UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, ~~2021.~~2022.

☐ TRANSITION PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

SUN COMMUNITIES, INC.

(Exact Name of Registrant as Specified in its Charter)


Maryland	1-12616	38-2730780
(State of Incorporation)	Commission file number	(I.R.S. Employer Identification No.)

27777 Franklin Rd,

Suite 200,

Southfield,

Michigan

48034

(Address of Principal Executive Offices)

(Zip Code)

(248) 208-2500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value

SUI

New York Stock Exchange

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of ~~“large~~"large accelerated filer,~~” “accelerated~~" "accelerated filer,~~” “smaller~~" "smaller reporting company,”" and ~~‘emerging~~"emerging growth ~~company”~~company" in rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

☒

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to ~~section to~~ Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of Common Stock, $0.01 par value per share, outstanding as of April ~~20, 2021: 111,828,638~~19, 2022: 121,612,597

INDEX



PART I – FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements
	Consolidated Balance Sheets as of March 31, ~~2021~~2022 (Unaudited) and December 31, ~~2020~~2021	1
	Consolidated Statements of Operations for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021 (Unaudited)	2
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021 (Unaudited)	3
	Consolidated ~~Statement~~Statements of Equity for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021 (Unaudited)	4
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021 (Unaudited)	5
	Notes to Consolidated Financial Statements (Unaudited)	65
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	5356
Item 4.	Controls and Procedures	5457

PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	5558
Item 1A.	Risk Factors	5558
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5659
Item 6.	Exhibits	5760

	Signatures	5861

SUN COMMUNITIES, INC.

PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(In ~~thousands,~~millions, except for per share amounts)


		(Unaudited)					(Unaudited)
		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Assets	Assets					Assets
Land	Land	$	2,190,762	$	2,119,364	Land	$	2,708.0	$	2,556.3
Land improvements and buildings	Land improvements and buildings	8,664,199		8,480,597		Land improvements and buildings	10,169.4		9,958.3
Rental homes and improvements	Rental homes and improvements	652,559		637,603		Rental homes and improvements	583.1		591.7
Furniture, fixtures and equipment	Furniture, fixtures and equipment	491,735		447,039		Furniture, fixtures and equipment	684.8		656.4
Investment property	Investment property	11,999,255		11,684,603		Investment property	14,145.3		13,762.7
Accumulated depreciation	Accumulated depreciation	(2,088,105)		(1,968,812)		Accumulated depreciation	(2,441.5)		(2,337.2)
Investment property, net (including $479,196 and $438,918 for consolidated VIEs at March 31, 2021 and December 31, 2020; see Note 7)		9,911,150		9,715,791
Cash, cash equivalents and restricted cash		120,174		92,641
Marketable securities (see Note 14)		127,821		124,726
Investment property, net (including $699.4 and $623.5 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)						Investment property, net (including $699.4 and $623.5 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)	11,703.8		11,425.5
Cash, cash equivalents and restricted cash (including $15.5 and $13.6 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)						Cash, cash equivalents and restricted cash (including $15.5 and $13.6 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)	102.6		78.2
Marketable securities (see Note 15)						Marketable securities (see Note 15)	158.3		186.9
Inventory of manufactured homes	Inventory of manufactured homes	43,242		46,643		Inventory of manufactured homes	63.3		51.1
Notes and other receivables, net	Notes and other receivables, net	249,009		221,650		Notes and other receivables, net	513.6		469.6

Goodwill	Goodwill	438,842		428,833		Goodwill	512.7		495.4
Other intangible assets, net		300,554		305,611
Other assets, net (including $31,820 and $24,554 for consolidated VIEs at March 31, 2021 and December 31, 2020; see Note 7)		263,417		270,691
Other intangible assets, net (including $13.8 and $13.4 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)						Other intangible assets, net (including $13.8 and $13.4 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)	334.2		306.8
Other assets, net (including $6.7 and $5.3 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)						Other assets, net (including $6.7 and $5.3 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)	525.7		480.6
Total Assets	Total Assets	$	11,454,209	$	11,206,586	Total Assets	$	13,914.2	$	13,494.1
Liabilities	Liabilities					Liabilities
Mortgage loans payable (including $54,142 and $47,706 for consolidated VIEs at March 31, 2021 and December 31, 2020; see Note 7)		$	3,430,420	$	3,444,967
Secured debt (see Note 8) (including $53.1 and $52.6 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)						Secured debt (see Note 8) (including $53.1 and $52.6 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)	$	3,366.6	$	3,380.7
Unsecured debt (see Note 8) (including $35.2 for consolidated VIEs at March 31, 2022 and December 31, 2021, respectively; see Note 7)						Unsecured debt (see Note 8) (including $35.2 for consolidated VIEs at March 31, 2022 and December 31, 2021, respectively; see Note 7)	2,709.9		2,291.1

Preferred Equity - Sun NG RV Resorts LLC - mandatorily redeemable (fully attributable to consolidated VIEs; see Note 7)		35,249		35,249
Preferred OP units - mandatorily redeemable		34,663		34,663
Lines of credit and other debt		917,603		1,242,197

Distributions payable	Distributions payable	95,076		86,988		Distributions payable	104.5		98.4
Advanced reservation deposits and rent	Advanced reservation deposits and rent	280,301		187,730		Advanced reservation deposits and rent	335.1		242.8
Accrued expenses and accounts payable	Accrued expenses and accounts payable	160,072		148,435		Accrued expenses and accounts payable	228.0		237.5
Other liabilities (including $47,901 and $21,957 for consolidated VIEs at March 31, 2021 and December 31, 2020; see Note 7)		148,128		134,650
Other liabilities (including $123.2 and $94.0 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)						Other liabilities (including $123.2 and $94.0 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)	236.6		224.1
Total Liabilities	Total Liabilities	5,101,512		5,314,879		Total Liabilities	6,980.7		6,474.6
Commitments and contingencies (see Note 15)
Temporary equity (see Note 9) (including $26,604 and $28,469 for consolidated VIEs at March 31, 2021 and December 31, 2020; see Note 7)		261,059		264,379
Commitments and contingencies (see Note 16)						Commitments and contingencies (see Note 16)
Temporary equity (see Note 9) (including $32.3 and $35.4 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)						Temporary equity (see Note 9) (including $32.3 and $35.4 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)	283.9		288.9

Stockholders' Equity

Common stock, $0.01 par value. Authorized: 180,000 shares; Issued and outstanding: 111,835 March 31, 2021 and 107,626 December 31, 2020		1,118		1,076
Shareholders' Equity						Shareholders' Equity

Common stock, $0.01 par value. Authorized: 180.0 shares; Issued and outstanding: 116.2 at March 31, 2022 and 116.0 at December 31, 2021						Common stock, $0.01 par value. Authorized: 180.0 shares; Issued and outstanding: 116.2 at March 31, 2022 and 116.0 at December 31, 2021	1.2		1.2
Additional paid-in capital	Additional paid-in capital	7,618,128		7,087,658		Additional paid-in capital	8,169.4		8,175.6
Accumulated other comprehensive loss		4,033		3,178
Accumulated other comprehensive income						Accumulated other comprehensive income	25.9		3.1
Distributions in excess of accumulated earnings	Distributions in excess of accumulated earnings	(1,631,044)		(1,566,636)		Distributions in excess of accumulated earnings	(1,654.6)		(1,556.0)
Total Sun Communities, Inc. stockholders' equity		5,992,235		5,525,276
Total Sun Communities, Inc. shareholders' equity						Total Sun Communities, Inc. shareholders' equity	6,541.9		6,623.9
Noncontrolling interests	Noncontrolling interests					Noncontrolling interests
Common and preferred OP units	Common and preferred OP units	82,502		85,968		Common and preferred OP units	86.8		86.8
Consolidated VIEs (fully attributable to consolidated VIEs; see Note 7)		16,901		16,084
Consolidated entities (including $20.3 and $19.4 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)						Consolidated entities (including $20.3 and $19.4 for consolidated VIEs at March 31, 2022 and December 31, 2021; see Note 7)	20.9		19.9
Total noncontrolling interests	Total noncontrolling interests	99,403		102,052		Total noncontrolling interests	107.7		106.7
Total Stockholders' Equity		6,091,638		5,627,328
Total Liabilities, Temporary Equity and Stockholders' Equity		$	11,454,209	$	11,206,586
Total Shareholders' Equity						Total Shareholders' Equity	6,649.6		6,730.6
Total Liabilities, Temporary Equity and Shareholders' Equity						Total Liabilities, Temporary Equity and Shareholders' Equity	$	13,914.2	$	13,494.1

See accompanying Notes to Consolidated Financial Statements.

SUN COMMUNITIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In ~~thousands,~~millions, except for per share amounts) (Unaudited)


		Three Months Ended				Three Months Ended
		March 31, 2021		March 31, 2020				March 31, 2022		March 31, 2021
Revenues	Revenues						Revenues
Real property	Real property	$	330,613	$	258,349		Real property	$	388.2	$	330.6
Home sales	Home sales	52,199		40,587			Home sales	64.7		52.2
Service, retail, dining and entertainment	Service, retail, dining and entertainment	50,612		5,103			Service, retail, dining and entertainment	80.8		50.6
Interest	Interest	2,631		2,350			Interest	6.8		2.6
Brokerage commissions and other, net	Brokerage commissions and other, net	5,960		3,913			Brokerage commissions and other, net	8.0		6.0
Total Revenues	Total Revenues	442,015		310,302			Total Revenues	548.5		442.0
Expenses	Expenses						Expenses
Property operating and maintenance	Property operating and maintenance	103,553		69,834			Property operating and maintenance	129.3		103.6
Real estate tax	Real estate tax	22,408		17,176			Real estate tax	26.1		22.4
Home costs and selling	Home costs and selling	41,590		34,039			Home costs and selling	45.9		41.6
Service, retail, dining and entertainment	Service, retail, dining and entertainment	45,431		6,682			Service, retail, dining and entertainment	70.5		45.4
General and administrative	General and administrative	38,203		25,349			General and administrative	55.7		38.2
Catastrophic event-related charges, net	Catastrophic event-related charges, net	2,414		606			Catastrophic event-related charges, net	—		2.4
Business combination		1,232		0
Business combinations							Business combinations	0.5		1.2
Depreciation and amortization	Depreciation and amortization	123,304		83,689			Depreciation and amortization	148.5		123.9

Loss on extinguishment of debt (see Note 8)	Loss on extinguishment of debt (see Note 8)	0		3,279			Loss on extinguishment of debt (see Note 8)	0.3		—
Interest	Interest	39,517		32,416			Interest	45.2		39.5
Interest on mandatorily redeemable preferred OP units / equity	Interest on mandatorily redeemable preferred OP units / equity	1,036		1,041			Interest on mandatorily redeemable preferred OP units / equity	1.0		1.0
Total Expenses	Total Expenses	418,688		274,111			Total Expenses	523.0		419.2
Income Before Other Items	Income Before Other Items	23,327		36,191			Income Before Other Items	25.5		22.8
Gain / (loss) on remeasurement of marketable securities (see Note 14)		3,661		(28,647)
Gain / (loss) on foreign currency translation		25		(17,479)

Gain / (loss) on remeasurement of marketable securities (see Note 15)							Gain / (loss) on remeasurement of marketable securities (see Note 15)	(34.5)		3.7
Loss on foreign currency translation							Loss on foreign currency translation	(2.2)		—
Gain on dispositions of properties							Gain on dispositions of properties	13.4		—
Other expense, net	Other expense, net	(1,099)		(972)			Other expense, net	(0.6)		(0.5)
Income / (loss) on remeasurement of notes receivable (see Note 4)		376		(2,112)
Gain on remeasurement of notes receivable (see Note 4)							Gain on remeasurement of notes receivable (see Note 4)	0.2		0.4
Income from nonconsolidated affiliates (see Note 6)	Income from nonconsolidated affiliates (see Note 6)	1,171		52			Income from nonconsolidated affiliates (see Note 6)	0.9		1.2
Income / (loss) on remeasurement of investment in nonconsolidated affiliates (see Note 6)		104		(2,191)
Gain on remeasurement of investment in nonconsolidated affiliates (see Note 6)							Gain on remeasurement of investment in nonconsolidated affiliates (see Note 6)	0.1		0.1
Current tax benefit / (expense) (see Note 12)	Current tax benefit / (expense) (see Note 12)	229		(450)			Current tax benefit / (expense) (see Note 12)	(1.3)		0.2
Deferred tax benefit (see Note 12)	Deferred tax benefit (see Note 12)	147		130			Deferred tax benefit (see Note 12)	—		0.1
Net Income / (Loss)		27,941		(15,478)
Less: Preferred return to preferred OP units / equity		2,864		1,570
Net Income							Net Income	1.5		28.0
Less: Preferred return to preferred OP units / equity interests							Less: Preferred return to preferred OP units / equity interests	3.0		2.9
Less: Income / (loss) attributable to noncontrolling interests	Less: Income / (loss) attributable to noncontrolling interests	295		(962)			Less: Income / (loss) attributable to noncontrolling interests	(2.2)		0.3

Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders		$	24,782	$	(16,086)
Net Income Attributable to Sun Communities, Inc. Common Shareholders							Net Income Attributable to Sun Communities, Inc. Common Shareholders	$	0.7	$	24.8

Weighted average common shares outstanding - basic	Weighted average common shares outstanding - basic	107,932		92,410			Weighted average common shares outstanding - basic	115.3		107.9
Weighted average common shares outstanding - diluted	Weighted average common shares outstanding - diluted	108,161		92,411			Weighted average common shares outstanding - diluted	115.9		108.2

Basic earnings / (loss) per share (see Note 13)		$	0.23	$	(0.17)
Diluted earnings / (loss) per share (see Note 13)		$	0.23	$	(0.17)
Basic earnings per share (see Note 13)							Basic earnings per share (see Note 13)	$	0.01	$	0.23
Diluted earnings per share (see Note 13)							Diluted earnings per share (see Note 13)	$	0.01	$	0.23

See accompanying Notes to Consolidated Financial Statements.

SUN COMMUNITIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In ~~thousands)~~millions) (Unaudited)

Three Months Ended
March 31, 2021 March 31, 2020
Net Income / (Loss) $ 27,941 $ (15,478)
Foreign currency translation gain / (loss) adjustment 895 (7,300)
Total Comprehensive Income 28,836 (22,778)
Less: Comprehensive income / (loss) attributable to noncontrolling interests (335) 1,268
Comprehensive Income / (Loss) attributable to Sun Communities, Inc. $ 28,501 $ (21,510)


	Three Months Ended
	March 31, 2022		March 31, 2021
Net Income	$	1.5	$	28.0
Foreign currency translation gain / (loss) adjustment	(1.3)		0.8

Cash flow hedge - Unrealized gain on interest rate swaps	25.2		—
Total Comprehensive Income	25.4		28.8
Less: Comprehensive (income) / loss attributable to noncontrolling interests	1.1		(0.3)
Comprehensive Income attributable to Sun Communities, Inc.	$	26.5	$	28.5

See accompanying Notes to Consolidated Financial Statements.

SUN COMMUNITIES, INC.

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF EQUITY

(In ~~thousands)~~millions) (Unaudited)

Temporary Equity Stockholders' Equity
Common
Stock Additional Paid-in Capital Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Loss Non-controlling Interests Total Stockholders' Equity Total
Equity
Balance at December 31, 2020 $ 264,379 $ 1,076 $ 7,087,658 $ (1,566,636) $ 3,178 $ 102,052 $ 5,627,328 $ 5,891,707
Issuance of common stock and common OP units, net — 42 522,222 — — — 522,264 522,264
Conversion of OP units — — 1,150 — — (1,150) — 0
Other redeemable non-controlling interests 52 — — (52) — — (52) 0
Share-based compensation - amortization and forfeitures — — 7,118 62 — — 7,180 7,180
Foreign currency translation — — — — 855 40 895 895
Net income (loss) (1,568) — — 27,647 — 1,862 29,509 27,941
Distributions (1,804) — — (92,823) — (3,260) (96,083) (97,887)
Other — — (20) 758 — (141) 597 597
Balance at March 31, 2021 $ 261,059 $ 1,118 $ 7,618,128 $ (1,631,044) $ 4,033 $ 99,403 $ 6,091,638 $ 6,352,697

Stockholders' Equity
Temporary Equity Common
Stock Additional Paid-in Capital Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Loss Non-controlling Interests Total Stockholders' Equity Total Equity
Balance at December 31, 2019 $ 78,004 $ 932 $ 5,213,264 $ (1,393,141) $ (1,331) $ 56,228 $ 3,875,952 $ 3,953,956
Issuance of common stock and common OP units, net — 1 (7,141) — — — (7,140) (7,140)
Conversion of OP units — — 446 — — (446) — 0
Other redeemable non-controlling interests 98 — — (85) — — (85) 13
Share-based compensation - amortization and forfeitures — — 4,928 93 — — 5,021 5,021
Issuance of Series E preferred OP units — — 181 — — 8,819 9,000 9,000
Foreign currency translation — — — — (6,994) (306) (7,300) (7,300)
Remeasurement of notes receivable and equity method investment — — — 1,953 — — 1,953 1,953
Net income (loss) (1,195) — — (14,514) — 231 (14,283) (15,478)
Distributions (457) — — (73,730) — (2,918) (76,648) (77,105)
Balance at March 31, 2020 $ 76,450 $ 933 $ 5,211,678 $ (1,479,424) $ (8,325) $ 61,608 $ 3,786,470 $ 3,862,920


			Shareholders' Equity
	Temporary Equity		Common Stock		Additional Paid-in Capital		Distributions in Excess of Accumulated Earnings		Accumulated Other Comprehensive Income		Non-controlling Interests		Total Shareholders' Equity		Total Equity
Balance at December 31, 2021	$	288.9	$	1.2	$	8,175.6	$	(1,556.0)	$	3.1	$	106.7	$	6,730.6	$	7,019.5
Issuance of common stock and common OP units, net	—		—		(0.2)		—		—		2.8		2.6		2.6
Common stock withheld to satisfy income tax obligations related to vesting of restricted stock awards	—		—		(16.4)		—		—		—		(16.4)		(16.4)
Conversion of OP units	—		—		0.7		—		—		(0.7)		—		—



Share-based compensation - amortization and forfeitures	—		—		9.7		0.1		—		—		9.8		9.8







Other comprehensive income	—		—		—		—		22.8		1.1		23.9		23.9
Net income / (loss)	(3.1)		—		—		3.7		—		0.9		4.6		1.5
Distributions	(2.1)		—		—		(102.3)		—		(3.1)		(105.4)		(107.5)
Other	0.2		—		—		(0.1)		—		—		(0.1)		0.1
Balance at March 31, 2022	$	283.9	$	1.2	$	8,169.4	$	(1,654.6)	$	25.9	$	107.7	$	6,649.6	$	6,933.5


			Shareholders' Equity
	Temporary Equity		Common Stock		Additional Paid-in Capital		Distributions in Excess of Accumulated Earnings		Accumulated Other Comprehensive Income		Non-controlling Interests		Total Shareholders' Equity		Total Equity
Balance at December 31, 2020	$	264.4	$	1.1	$	7,087.6	$	(1,566.6)	$	3.2	$	102.0	$	5,627.3	$	5,891.7
Issuance of common stock and common OP units, net	—		—		537.1		—		—		—		537.1		537.1
Common stock withheld to satisfy income tax obligations related to vesting of restricted stock awards	—		—		(14.8)		—		—		—		(14.8)		(14.8)
Conversion of OP units	—		—		1.2		—		—		(1.2)		—		—

Equity interest in consolidated entities	—		—		—		—		—		(0.1)		(0.1)		(0.1)
Other redeemable non-controlling interests	0.1		—		—		(0.1)		—		—		(0.1)		—
Share-based compensation - amortization and forfeitures	—		—		7.0		—		—		—		7.0		7.0







Other comprehensive income	—		—		—		—		0.8		—		0.8		0.8
Net income / (loss)	(1.6)		—		—		27.7		—		1.9		29.6		28.0
Distributions	(1.8)		—		—		(92.8)		—		(3.2)		(96.0)		(97.8)
Other	—		—		—		0.8		—		—		0.8		0.8
Balance at March 31, 2021	$	261.1	$	1.1	$	7,618.1	$	(1,631.0)	$	4.0	$	99.4	$	6,091.6	$	6,352.7

See accompanying Notes to Consolidated Financial Statements.

SUN COMMUNITIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In ~~thousands)~~millions) (Unaudited)


		Three Months Ended					Three Months Ended
		March 31, 2021		March 31, 2020			March 31, 2022		March 31, 2021
Operating Activities	Operating Activities					Operating Activities
Net Cash Provided By Operating Activities	Net Cash Provided By Operating Activities	$	220,490	$	118,513	Net Cash Provided By Operating Activities	$	225.7	$	220.5
Investing Activities	Investing Activities					Investing Activities
Investment in properties	Investment in properties	(151,979)		(132,759)		Investment in properties	(182.7)		(152.0)
Acquisitions of properties, net of cash acquired	Acquisitions of properties, net of cash acquired	(141,755)		(24,439)		Acquisitions of properties, net of cash acquired	(299.0)		(141.7)

Proceeds from dispositions of assets and depreciated homes, net		17,774		12,612

Proceeds from disposition of assets and depreciated homes, net						Proceeds from disposition of assets and depreciated homes, net	24.7		17.8
Proceeds related to disposition of properties						Proceeds related to disposition of properties	0.1		—

Issuance of notes and other receivables	Issuance of notes and other receivables	(7,907)		(19,903)		Issuance of notes and other receivables	(25.8)		(7.9)

Repayments of notes and other receivables	Repayments of notes and other receivables	1,207		854		Repayments of notes and other receivables	1.3		1.2
Investments in nonconsolidated affiliates	Investments in nonconsolidated affiliates	(4,510)		(6,970)		Investments in nonconsolidated affiliates	(6.4)		(4.5)
Distributions from nonconsolidated affiliates		1,192		1,275
Distributions of capital from nonconsolidated affiliates						Distributions of capital from nonconsolidated affiliates	3.6		1.2

Net Cash Used For Investing Activities	Net Cash Used For Investing Activities	(285,978)		(169,330)		Net Cash Used For Investing Activities	(484.2)		(285.9)
Financing Activities	Financing Activities					Financing Activities
Issuance of common stock, OP units, and preferred OP units, net		522,264		(7,140)
Issuance and costs of common stock, OP units and preferred OP units, net						Issuance and costs of common stock, OP units and preferred OP units, net	(0.2)		537.1
Common stock withheld to satisfy income tax obligations related to vesting of restricted stock awards						Common stock withheld to satisfy income tax obligations related to vesting of restricted stock awards	(16.4)		(14.8)

Borrowings on lines of credit	Borrowings on lines of credit	442,290		1,163,965		Borrowings on lines of credit	474.7		442.3
Payments on lines of credit	Payments on lines of credit	(766,260)		(763,076)		Payments on lines of credit	(58.2)		(766.3)
Proceeds from issuance of other debt	Proceeds from issuance of other debt	0		230,000		Proceeds from issuance of other debt	0.9		—

Payments on other debt	Payments on other debt	(14,799)		(134,203)		Payments on other debt	(15.4)		(14.8)
Prepayment penalty on collateralized term loans		0		(3,250)

Fees paid in connection with extinguishment of debt						Fees paid in connection with extinguishment of debt	(0.3)		—

Distributions to stockholders, OP unit holders, and preferred OP unit holders		(89,792)		(71,859)
Distributions						Distributions	(101.4)		(89.8)

Payments for deferred financing costs	Payments for deferred financing costs	(701)		(3,328)		Payments for deferred financing costs	(0.8)		(0.7)

Net Cash Provided By Financing Activities	Net Cash Provided By Financing Activities	93,002		411,109		Net Cash Provided By Financing Activities	282.9		93.0
Effect of exchange rate changes on cash, cash equivalents and restricted cash		19		(382)

Net change in cash, cash equivalents and restricted cash	Net change in cash, cash equivalents and restricted cash	27,533		359,910		Net change in cash, cash equivalents and restricted cash	24.4		27.6
Cash, cash equivalents and restricted cash, beginning of period	Cash, cash equivalents and restricted cash, beginning of period	92,641		34,830		Cash, cash equivalents and restricted cash, beginning of period	78.2		92.6
Cash, Cash Equivalents and Restricted Cash, End of Period	Cash, Cash Equivalents and Restricted Cash, End of Period	$	120,174	$	394,740	Cash, Cash Equivalents and Restricted Cash, End of Period	$	102.6	$	120.2


		Three Months Ended					Three Months Ended
		March 31, 2021		March 31, 2020			March 31, 2022		March 31, 2021
Supplemental Information	Supplemental Information					Supplemental Information
Cash paid for interest (net of capitalized interest of $1,154 and $2,258 respectively)		$	39,458	$	32,464
Cash paid for interest (net of capitalized interest of $1.0 and $1.2, respectively)						Cash paid for interest (net of capitalized interest of $1.0 and $1.2, respectively)	$	46.2	$	39.5
Cash paid for interest on mandatorily redeemable debt	Cash paid for interest on mandatorily redeemable debt	$	1,036	$	1,041	Cash paid for interest on mandatorily redeemable debt	$	1.0	$	1.0
Cash paid / (refunded) for income taxes		$	(484)	$	75
Cash (refunds) / paid for income taxes						Cash (refunds) / paid for income taxes	$	0.1	$	(0.5)
Noncash investing and financing activities	Noncash investing and financing activities					Noncash investing and financing activities

Change in distributions declared and outstanding	Change in distributions declared and outstanding	$	8,095	$	4,787	Change in distributions declared and outstanding	$	6.0	$	8.1
Conversion of common and preferred OP units	Conversion of common and preferred OP units	$	1,150	$	446	Conversion of common and preferred OP units	$	0.7	$	1.2

Proceeds related to disposition of properties through 1031 exchange						Proceeds related to disposition of properties through 1031 exchange	$	28.7	$	—
Contingent consideration liability related to prior acquisitions						Contingent consideration liability related to prior acquisitions	$	—	$	3.2

Noncash investing and financing activities at the date of acquisition						Noncash investing and financing activities at the date of acquisition
Acquisitions - Common stock and OP units issued						Acquisitions - Common stock and OP units issued	$	2.8	$	—

Acquisitions - Series E preferred interest		$	0	$	9,000

Acquisitions - Contingent consideration liability		$	3,201	$	0

See accompanying Notes to Consolidated Financial Statements.

~~SUN COMMUNITIES, INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

1. Basis of Presentation

Sun Communities, Inc., a Maryland corporation, and all wholly-owned or majority-owned and controlled subsidiaries, including Sun Communities Operating Limited Partnership (the "Operating Partnership"), Sun Home Services, Inc. ("SHS") and Safe Harbor Marinas, LLC ("Safe Harbor") are referred to herein as the "Company," "us," "we," and "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 intercompany transactions have been eliminated in consolidation.

During the three months ended March 31, 2021, we changed our organizational structure from a 2-segment to a 3-segment structure as a result of the recent acquisition of Safe Harbor and its internal organization. The new structure reflects how the chief operating decision maker manages the business, makes operating decisions, allocates resources and evaluates operating performance. Therefore, beginning with results for the three months ended March 31, 2021, we are reporting our financial results consistent with our newly realigned operating segments and have recast prior period amounts to conform to the way we internally manage our business and monitor segment performance. Certain reclassifications have been made to the prior period financial statements and related notes in order to conform to the current period presentation. The most significant changes were the combining of rental home revenue with real property revenue, the combining of rental home operating and maintenance expenses with property operating expenses, and the combining of home selling expenses with cost of home sales. Vacation rental home rent has been reclassified from ancillary income into real property. In addition, ancillary revenues and expenses have been renamed service, retail, dining & entertainment. There was no impact to prior period net income, stockholders equity or cash flows for any of the reclassifications.

The results of operations for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 as filed with the SEC on February ~~18, 2021~~22, 2022 (our ~~"2020~~"2021 Annual Report"). These statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our ~~2020~~2021 Annual Report.

~~SUN COMMUNITIES, INC.~~

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

~~(Unaudited)~~

~~2. Revenue~~

~~Disaggregation of Revenue~~

2. Revenue

The following ~~tables details~~table disaggregates our revenue by major source (in ~~thousands)~~millions):


		Three Months Ended																Three Months Ended
		March 31, 2021								March 31, 2020(1)								March 31, 2022								March 31, 2021
		MH		RV		Marinas		Consolidated		MH		RV		Marinas	Consolidated			MH		RV		Marina		Consolidated		MH		RV		Marina		Consolidated
Revenues	Revenues																Revenues
Real property	Real property	$	198,278	$	81,102	$	51,233	$	330,613	$	183,326	$	75,023	N/A	$	258,349	Real property	$	208.8	$	102.7	$	76.7	$	388.2	$	198.3	$	81.1	$	51.2	$	330.6
Home sales	Home sales	45,332		6,867		0		52,199		35,782		4,805		N/A	40,587		Home sales	58.0		6.7		—		64.7		45.3		6.9		—		52.2
Service, retail, dining and entertainment	Service, retail, dining and entertainment	1,864		4,394		44,354		50,612		2,053		3,050		N/A	5,103		Service, retail, dining and entertainment	2.3		7.3		71.2		80.8		1.9		4.3		44.4		50.6
Interest	Interest	2,086		537		8		2,631		1,999		351		N/A	2,350		Interest	6.2		0.6		—		6.8		2.1		0.5		—		2.6
Brokerage commissions and other, net	Brokerage commissions and other, net	2,520		2,895		545		5,960		2,099		1,814		N/A	3,913		Brokerage commissions and other, net	4.2		3.5		0.3		8.0		2.5		3.0		0.5		6.0
Total Revenues	Total Revenues	$	250,080	$	95,795	$	96,140	$	442,015	$	225,259	$	85,043	N/A	$	310,302	Total Revenues	$	279.5	$	120.8	$	148.2	$	548.5	$	250.1	$	95.8	$	96.1	$	442.0

~~(1)~~ ~~Recast to reflect segment changes~~

Our revenue consists ~~primarily~~ of ~~Real~~real property revenue at our MH, RV and ~~marina~~Marina properties, revenue from Home sales, Service, retail, dining and entertainment revenue, Interest income, and Brokerage commissions and other revenue.

The majority of our revenue is derived from site and home leases, and wet ~~slips~~slip and dry storage ~~spaces~~space leases that are accounted for pursuant to ASC 842, "Leases." We account for all revenue from contracts with customers following ASC 606, "Revenue from Contracts with Customers" except for those that are within the scope of other topics in the FASB ~~accounting standards codification.~~ASC. For additional information, refer to Note 1, "Significant Accounting Policies," in our ~~2020~~2021 Annual Report.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

3. Real Estate Acquisitions and Dispositions

~~2021~~2022 Acquisitions and Dispositions

During the three months ended March 31, ~~2021,~~2022, we acquired the following MH communities ~~resorts~~ and marinas:

~~Community Name~~

~~Type~~

Sites,
Wet Slips and
Dry Storage Spaces

~~State~~

~~Month Acquired~~

~~Association Island KOA~~

~~RV: asset acquisition~~

~~294~~

~~January~~

~~Blue Water Beach Resort~~

~~RV: asset acquisition~~

~~177~~

~~February~~

~~Tranquility MHC~~

~~MH: asset acquisition~~

~~February~~

~~Islamorada and Angler House(1)~~

~~Marina: asset acquisition~~

~~251~~

~~February~~

~~Prime Martha's Vineyard(1)~~

~~Marina: asset acquisition~~

~~390~~

~~March~~

~~Pleasant Beach Campground~~

~~RV: asset acquisition~~

~~102~~

~~March~~

~~Cherrystone Family Camping Resort~~

~~RV: asset acquisition~~

~~669~~

~~March~~

~~Beachwood Resort~~

~~RV: asset acquisition~~

~~672~~

~~March~~

~~Total~~

~~2,580~~

Community Name

Type

Sites, Wet Slips and
Dry Storage Spaces

Development Sites

State / Province or Country

Month Acquired

Harrison Yacht Yard(1)

Marina: asset acquisition

—

January

Outer Banks

Marina: asset acquisition

196

—

January

Jarrett Bay Boatworks

Marina: business combination

—

February

Tower Marine

Marina: asset acquisition

446

—

March

Sandy Bay

MH: asset acquisition

616

570

March

Total

1,291

570

(1) ~~Includes two marinas~~Combined with Safe Harbor Narrows Point, an existing adjacent marina.

The following table summarizes the amount of assets acquired, net of liabilities assumed at the acquisition date and the consideration paid for the ~~MH community, RV resort and marina~~ acquisitions completed during the three months ended March 31, ~~2021~~2022 (in ~~thousands)~~millions):

At Acquisition Date Consideration
Investment in property Inventory of manufactured homes, boat parts
and retail
related items In-place leases and other intangible assets Other assets / (liabilities), net Total identifiable assets acquired net of liabilities assumed Cash and escrow Total consideration
Association Island KOA $ 14,965 $ 0 $ 41 $ (248) $ 14,758 $ 14,758 $ 14,758
Blue Water Beach Resort 9,000 0 0 (151) 8,849 8,849 8,849
Tranquility MHC 1,250 0 0 (1) 1,249 1,249 1,249
Islamorada and Angler House 18,001 22 269 (317) 17,975 17,975 17,975
Prime Martha's Vineyard(1)
22,258 138 127 (573) 21,950 21,950 21,950
Pleasant Beach Campground 1,588 0 0 1 1,589 1,589 1,589
Cherrystone Family Camping Resort 59,900 0 0 (2,029) 57,871 57,871 57,871
Beachwood Resort 7,000 0 0 (401) 6,599 6,599 6,599
Total $ 133,962 $ 160 $ 437 $ (3,719) $ 130,840 $ 130,840 $ 130,840


	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 / (liabilities), net		Total identifiable assets acquired net of liabilities assumed		Cash and escrow		Temporary and permanent equity		Total consideration
Asset Acquisition
Harrison Yacht Yard(1)	$	5.8	$	—	$	—	$	—	$	5.8	$	5.8	$	—	$	5.8
Outer Banks	5.2		—		—		(0.4)		4.8		4.8		—		4.8

Tower Marine(2)	20.0		0.1		—		(1.7)		18.4		18.4		—		18.4
Sandy Bay(2)	187.0		6.2		—		—		193.2		193.2		—		193.2

























Business Combination
Jarrett Bay Boatworks	21.2		1.4		29.9		0.6		53.1		50.3		2.8		53.1

Total	$	239.2	$	7.7	$	29.9	$	(1.5)	$	275.3	$	272.5	$	2.8	$	275.3

(1) ~~Includes 2 marinas.~~Combined with Safe Harbor Narrows Point, an existing adjacent marina.

(2) The above allocations are estimates awaiting purchase price allocations.

As of March 31, ~~2021,~~2022, we have incurred ~~$1.8~~and capitalized $5.1 million of ~~additional capitalized~~ transaction costs, which have been capitalized and allocated among the various fixed asset categories ~~above.~~for purchases that meet the asset acquisition criteria. As of March 31, ~~2021,~~2022, we also incurred ~~$1.2~~$0.5 million of business combination expenses, ~~associated with our acquisition of Safe Harbor and related delayed consent properties, and the Rybovich Portfolio in 2020,~~ which are ~~accounted~~expensed for asacquisitions deemed to be business ~~combinations, as opposed to asset acquisitions.~~combinations.

~~Refer to Note 18, "Subsequent Events,"~~The total amount of Revenues and Net income included in the Consolidated Statements of Operations for ~~information regarding real estate acquisitions completed after~~the three months ended March 31, ~~2021.~~2022 related to business combinations completed in 2022 are set forth in the following table (in millions):



			Three Months Ended
	March 31, 2022
Total revenues	$	3.9
Net income	$


				0.1

The following unaudited pro forma financial information presents the results of our operations for the three months ended March 31, 2022 and 2021, as if the properties combined through business combinations in 2022 had been acquired on January 1, 2021. The unaudited pro forma results reflect certain adjustments for items that are not expected to have a continuing impact, such as adjustments for transaction costs incurred, management fees and acquisition accounting.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The information presented below has been prepared for comparative purposes only and does not purport to be indicative of either future results of operations or the results of operations that would have actually occurred had the acquisition been consummated on January 1, 2021 (in millions, except for per share data):



	Three Months Ended (unaudited)
	March 31, 2022		March 31, 2021
Total revenues	$	553.3	$	447.6
Net income attributable to Sun Communities, Inc. common shareholders	$	1.2	$	25.4
Net income per share attributable to Sun Communities, Inc. common shareholders - basic	$	0.01	$	0.24
Net income per share attributable to Sun Communities, Inc. common shareholders - diluted	$	0.01	$	0.23

Dispositions

On March 24, 2022, we sold 2 MH communities and 1 community containing MH and RV sites, located in Florida, with combined 323 sites, for $29.6 million . The gain from the sale of the properties was $13.4 million.

2021 Acquisitions and Dispositions

For the year ended December 31, 2021, we acquired the following MH communities, RV resorts and marinas:

Community Name

Type

Sites, Wet Slips and Dry Storage Spaces

Development Sites

State / Province or Country

Month Acquired

Sun Outdoors Association Island

RV: asset acquisition

294

—

January

Blue Water Beach Resort

RV: asset acquisition

177

—

February

Tranquility MHC

MH: asset acquisition

—

February

Islamorada and Angler House(1)

Marina: asset acquisition

251

—

February

Prime Martha's Vineyard(1)

Marina: asset acquisition

395

—

March

Pleasant Beach Campground

RV: asset acquisition

102

—

ON, Canada

March

Sun Outdoors Cape Charles

RV: asset acquisition

669

—

March

Beachwood Resort

RV: asset acquisition

672

—

March

ThemeWorld RV Resort

RV: asset acquisition

148

—

April

Sylvan Glen Estates

MH: asset acquisition

476

—

April

Shelter Island Boatyard

Marina: asset acquisition

—

May

Lauderdale Marine Center

Marina: asset acquisition

206

—

May

Apponaug Harbor

Marina: asset acquisition

348

—

June

Cabrillo Isle

Marina: business combination

476

—

June

Marathon

Marina: asset acquisition

135

—

June

Allen Harbor

Marina: asset acquisition

176

—

July

Cisco Grove Campground & RV

RV: asset acquisition

407

July

Four Leaf Portfolio(2)

MH: asset acquisition

2,545

340

MI / IN

July

Harborage Yacht Club

Marina: asset acquisition

300

—

July

Zeman Portfolio(3)

RV: asset acquisition

686

—

IL / NJ

July

Southern Leisure RV Resort

RV: asset acquisition

496

—

August

Sunroad Marina

Marina: asset acquisition

617

—

August

Lazy Lakes RV Resort

RV: asset acquisition

—

August

Puerto del Rey

Marina: asset acquisition

1,746

—

Puerto Rico

September

Stingray Point

Marina: asset acquisition

222

—

September

Detroit River

Marina: asset acquisition

440

—

September

Jetstream RV Resort at NASA

RV: asset acquisition

202

—

September

Beaver Brook Campground

RV: asset acquisition

204

150

October

Emerald Coast

Marina: business combination

311

—

November

Tall Pines Harbor Campground

RV: asset acquisition

241

—

November

Wells Beach Resort Campground

RV: asset acquisition

231

—

November

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

~~2020 Acquisitions and dispositions~~

~~For the year ended December 31, 2020, we acquired the following communities, resorts, and marinas.~~

Community Name Type Sites, Wet Slips and Dry Storage Spaces Development Sites State Month Acquired
Cape Cod(1)
RV: asset acquisition 230 0 MA January
Jellystone Natural Bridge RV: asset acquisition 299 0 VA February
Forest Springs(2)
MH: asset acquisition 372 0 CA May
Crown Villa RV: asset acquisition 123 0 OR June
Flamingo Lake RV: asset acquisition 421 0 FL July
Woodsmoke RV: asset acquisition 300 0 FL September
Jellystone Lone Star RV: asset acquisition 344 0 TX September
El Capitan & Ocean Mesa(3)(4)
RV: asset acquisition 266 109 CA September
Highland Green Estates & Troy Villa(5)
MH: asset acquisition 1,162 0 MI September
Safe Harbor Marinas(6)
Marina: business combination 37,305 0 Various October
Safe Harbor Hideaway Bay(7)
Marina: business combination 628 0 GA November
Gig Harbor RV: asset acquisition 115 0 WA November
Maine MH Portfolio(8)
MH: asset acquisition 1,083 0 ME November
Safe Harbor Anacapa Isle(7)
Marina: business combination 453 0 CA December
Mears Annapolis Marina: asset acquisitions 184 0 MD December
Wickford Marina: asset acquisitions 60 0 RI December
Rybovich Portfolio(9)
Marina: business combination 78 0 FL December
Rockland Marina: asset acquisitions 173 0 ME December
Mouse Mountain MH / RV: asset acquisition 304 0 FL December
Lakeview Mobile Estates MH: asset acquisition 296 0 CA December
Shenandoah Acres RV: asset acquisition 522 0 VA December
Jellystone at Barton Lake RV: asset acquisition 555 0 IN December
Kittatinny Portfolio(4)
RV: asset acquisition 527 0 NY & PA December
Total 45,800 109

Community Name

Type

Sites, Wet Slips and Dry Storage Spaces

Development Sites

State / Province or Country

Month Acquired

Port Royal

Marina: asset acquisition

167

—

November

Podickory Point

Marina: asset acquisition

209

—

December

Sunroad Marina (restaurant)

Marina: asset acquisition

—

December

Jellystone Park at Mammoth Cave

RV: asset acquisition

315

—

December

South Bay

Marina: asset acquisition

333

—

December

Wentworth by the Sea

Marina: asset acquisition

155

—

December

Rocky Mountain RV Park

RV: asset acquisition

—

December

Haas Lake RV Park Campground

RV: asset acquisition

492

—

December

Pearwood RV Resort

RV: asset acquisition

144

—

December

Holly Shores Camping Resort

RV: asset acquisition

310

—

December

Pheasant Ridge RV Park

RV: asset acquisition

130

—

December

Coyote Ranch Resort

RV: asset acquisition

165

December

Jellystone Park at Whispering Pines

RV: asset acquisition

131

—

December

Hospitality Creek Campground

RV: asset acquisition

230

—

December

Total

15,816

1,062

(1)~~In conjunction with the acquisition, we issued Series E preferred OP units. As of December 31, 2020, 90,000 Series E preferred OP units were outstanding.~~

~~(2)~~ In conjunction with the acquisition, we issued Series F preferred OP units and common OP units. As of December 31, 2020, 90,000 Series F preferred OP units, specific to this acquisition, were outstanding.

~~(3)~~ ~~In conjunction with the acquisition, we issued Series G preferred OP units. As of December 31, 2020, 240,710 Series G preferred OP units were outstanding.~~

~~(4)~~ ~~Includes 2 RV resorts.~~

~~(5)~~ ~~Includes 2 communities.~~

~~(6)~~ Includes 99 owned marinas located in 22 states. In conjunction with the acquisition, we issued Series H preferred OP units. As of December 31, 2020, 581,407 Series H preferred OP units were outstanding.

~~(7)~~ ~~Acquired in connection with Safe Harbor Marinas acquisition. Transfer of marinas was contingent on receiving third party consents.~~

~~(8)~~ ~~Includes 6 communities.~~

~~(9)~~ Includes 2 marinas. ~~In conjunction with the acquisition, we issued Series I preferred OP units. As of December 31, 2020, 922,000 Series I preferred OP units were outstanding.~~

(2) Includes 9 MH communities.

(3) Includes 2 RV Resorts.

~~SUN COMMUNITIES, INC.~~

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

~~(Unaudited)~~

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 ~~2020~~2021 (in ~~thousands)~~millions):

At Acquisition Date Consideration
Investment in property Inventory of manufactured homes, boat parts
and retail
related items Goodwill, In-place leases and other intangible assets Other assets / (liabilities), net Total identifiable assets acquired net of liabilities assumed Cash and escrow Debt assumed Temporary and permanent equity Total consideration
Asset Acquisition
Cape Cod $ 13,350 $ 0 $ 150 $ (295) $ 13,205 $ 4,205 $ 0 $ 9,000 $ 13,205
Jellystone Natural Bridge 11,364 0 80 (391) 11,053 11,053 0 0 11,053
Forest Springs 51,949 1,337 2,160 (107) 55,339 36,260 0 19,079 55,339
Crown Villa 16,792 0 0 (230) 16,562 16,562 0 0 16,562
Flamingo Lake 34,000 0 0 (155) 33,845 33,845 0 0 33,845
Woodsmoke 25,120 40 840 (461) 25,539 25,539 0 0 25,539
Jellystone Lone Star 21,000 0 0 (703) 20,297 20,297 0 0 20,297
El Capitan & Ocean Mesa 69,690 0 0 (10,321) 59,369 32,108 0 27,261 59,369
Highland Green Estates & Troy Villa 60,988 1,679 2,030 (15) 64,682 64,682 0 0 64,682
Gig Harbor 15,250 0 0 (22) 15,228 15,228 0 0 15,228
Maine MH Portfolio 79,890 0 1,359 30 81,279 72,479 8,800 0 81,279
Mears Annapolis 24,354 0 6,922 (546) 30,730 30,730 0 0 30,730
Wickford 3,468 0 42 (121) 3,389 3,389 0 0 3,389
Rockland 15,082 348 101 (368) 15,163 15,163 0 0 15,163
Mouse Mountain 15,221 0 279 (4) 15,496 15,496 0 0 15,496
Lakeview Mobile Estates 22,917 195 638 (72) 23,678 23,678 0 0 23,678
Shenandoah Acres 16,166 0 834 (197) 16,803 16,803 0 0 16,803
Jellystone at Barton Lake 23,462 0 538 (397) 23,603 23,603 0 0 23,603
Kittatinny Portfolio 16,220 0 30 29 16,279 16,279 0 0 16,279
Business Combination(1)
Safe Harbor Marinas(3)
1,643,879 5,700 418,033 (26,831) 2,040,781 1,141,797 829,000 69,984 2,040,781
Hideaway Bay(3)
26,218 23 7,242 (1,077) 32,406 32,406 0 0 32,406
Anacapa Isle(3)
10,924 0 3,146 60 14,130 14,130 0 0 14,130
Rybovich Portfolio(2)(3)
122,064 620 249,840 (37) 372,487 258,123 0 114,364 372,487
Total $ 2,339,368 $ 9,942 $ 694,264 $ (42,231) $ 3,001,343 $ 1,923,855 $ 837,800 $ 239,688 $ 3,001,343


	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(1)		Other assets / (liabilities), net		Total identifiable assets acquired net of liabilities assumed		Cash and escrow		Temporary and permanent equity		Total consideration
Asset Acquisition
Sun Outdoors Association Island	$	15.0	$	—	$	—	$	(0.2)	$	14.8	$	14.8	$	—	$	14.8
Blue Water Beach Resort	9.0		—		—		(0.3)		8.7		8.7		—		8.7
Tranquility MHC	1.2		—		—		—		1.2		1.2		—		1.2
Islamorada and Angler House	18.0		—		0.3		(0.3)		18.0		18.0		—		18.0
Prime Martha's Vineyard	22.3		0.2		0.1		(0.7)		21.9		21.9		—		21.9
Pleasant Beach Campground	1.5		—		0.1		—		1.6		1.6		—		1.6
Sun Outdoors Cape Charles	59.7		—		0.2		(2.0)		57.9		57.9		—		57.9
Beachwood Resort	14.0		—		0.2		(7.6)		6.6		6.6		—		6.6
ThemeWorld RV Resort	25.0		—		—		(0.1)		24.9		24.9		—		24.9
Sylvan Glen Estates	23.6		—		0.5		(0.3)		23.8		(0.2)		24.0		23.8
Shelter Island Boatyard	9.6		0.1		0.4		(0.1)		10.0		10.0		—		10.0
Lauderdale Marine Center	336.9		—		3.3		1.0		341.2		341.2		—		341.2
Apponaug Harbor	6.5		—		0.1		(0.7)		5.9		5.9		—		5.9
Marathon	19.1		—		0.3		(0.2)		19.2		19.2		—		19.2
Allen Harbor	4.0		—		—		(0.1)		3.9		3.9		—		3.9
Cisco Grove Campground & RV	6.6		—		—		—		6.6		6.6		—		6.6
Four Leaf Portfolio	210.7		0.3		4.0		(0.5)		214.5		214.5		—		214.5
Harborage Yacht Club	17.3		0.1		4.7		(0.5)		21.6		21.6		—		21.6

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)


	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(1)		Other assets / (liabilities), net		Total identifiable assets acquired net of liabilities assumed		Cash and escrow		Temporary and permanent equity		Total consideration
Zeman Portfolio	14.2		—		0.7		(0.5)		14.4		14.4		—		14.4
Southern Leisure RV Resort	17.4		—		0.3		(0.3)		17.4		17.4		—		17.4
Sunroad Marina(2)	47.8		—		0.5		65.0		113.3		113.3		—		113.3
Lazy Lakes RV Resort	11.3		—		—		(0.1)		11.2		11.2		—		11.2
Puerto del Rey	94.5		0.5		1.0		(4.1)		91.9		91.9		—		91.9
Stingray Point	2.9		—		—		(0.3)		2.6		2.6		—		2.6
Detroit River	8.7		—		0.2		(0.6)		8.3		8.3		—		8.3
Jetstream RV Resort at NASA	17.0		—		0.5		(0.2)		17.3		17.3		—		17.3
Beaver Brook Campground	4.4		—		0.1		—		4.5		4.5		—		4.5
Tall Pines Harbor Campground	10.5		—		—		—		10.5		10.5		—		10.5
Wells Beach Resort Campground	12.2		—		—		—		12.2		12.2		—		12.2
Port Royal	20.5		—		0.1		(0.3)		20.3		20.3		—		20.3
Podickory Point	3.3		—		—		(0.2)		3.1		3.1		—		3.1
Jellystone Park at Mammoth Cave	32.5		—		—		(0.6)		31.9		31.9		—		31.9
South Bay	14.0		—		0.2		(2.5)		11.7		11.7		—		11.7
Wentworth by the Sea	14.1		0.1		0.1		(1.1)		13.2		13.2		—		13.2
Rocky Mountain RV Park	12.5		—		—		—		12.5		12.5		—		12.5
Haas Lake RV Park Campground	20.1		—		—		—		20.1		16.5		3.6		20.1
Pearwood RV Resort	10.2		—		—		—		10.2		10.2		—		10.2
Holly Shores Camping Resort(3)	27.0		—		0.5		(0.5)		27.0		27.0		—		27.0
Pheasant Ridge RV Park	19.0		—		—		—		19.0		19.0		—		19.0
Coyote Ranch Resort	12.6		—		—		(0.2)		12.4		12.4		—		12.4
Jellystone Park at Whispering Pines	13.8		—		—		(0.2)		13.6		13.6		—		13.6
Hospitality Creek Campground(3)	15.0		—		0.6		(0.6)		15.0		15.0		—		15.0
Business Combination
Cabrillo Isle	37.6		—		10.1		(0.7)		47.0		47.0		—		47.0
Emerald Coast	9.0		2.7		41.9		(0.6)		53.0		53.0		—		53.0


Total	$	1,302.1	$	4.0	$	71.0	$	38.8	$	1,415.9	$	1,388.3	$	27.6	$	1,415.9

(1) Refer to Note 5, "Goodwill and Other Intangibles Assets," for additional detail on goodwill and other intangible assets.

(2) ~~Purchase price allocations were preliminary~~The balance includes the marina acquired in August and the restaurant acquired in December of which $9.2 million was recorded in investment property and $21.0 million in Other assets / liabilities.

(3) The allocation was estimated as of December ~~31, 2020~~2021 and ~~were~~was adjusted as of March ~~31, 2021 based on revised purchase price allocations.~~

~~(3)~~ ~~Allocations are preliminary and may change~~2022, based on final purchase price ~~allocations.~~allocation.

As of December 31, ~~2020,~~2021, we ~~have~~ incurred ~~$23.0~~$18.0 million of ~~expensed business combination~~ transaction costs, ~~(in relation to the acquisition Safe Harbor, Hideaway Bay, Anacapa Isle,~~which were capitalized and the Rybovich Portfolio, as each such acquisition meets the criteria to be accounted for as business combination), and $13.4 million of capitalized transaction costs for asset acquisitions which have been allocated among the various fixed asset categories ~~above.~~for purchases that meet the asset acquisition criteria. As of December 31, 2021, we also incurred $1.4 million of business combination expenses, which were expensed for acquisitions deemed to be business combinations.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The total amount of Revenues and Net income included in the Consolidated Statements of Operations for the year ended December 31, 2021 related to business combinations completed in 2021 are set forth in the following table (in millions):


	Year Ended
	December 31, 2021
Total revenues	$	6.4
Net income	$	0.5

The following unaudited pro forma financial information presents the results of our operations for the years ended December 31, 2021 and 2020, as if the properties combined through business combinations in 2021 had been acquired on January 1, 2020. The unaudited pro forma results reflect certain adjustments for items that are not expected to have a continuing impact, such as adjustments for transaction costs incurred, management fees and acquisition accounting.

The information presented below has been prepared for comparative purposes only and does not purport to be indicative of either future results of operations or the results of operations that would have actually occurred had the acquisitions been consummated on January 1, 2020 (in millions, except for per share data):


	Year Ended (unaudited)
	December 31, 2021
Total revenues	$	2,330.0
Net income attributable to Sun Communities, Inc. common shareholders	$	390.9
Net income per share attributable to Sun Communities, Inc. common shareholders - basic	$	3.47
Net income per share attributable to Sun Communities, Inc. common shareholders - diluted	$	3.40

Land for Expansion / Development

During the year ended December 31, ~~2020,~~2021, we acquired 811 land parcels, which are located ~~in Orange Beach, Alabama; Jensen Beach, Florida; Citra Lakes, Florida; Comal County, Texas;~~across the United States and ~~Menifee, California~~the United Kingdom for the potential development of nearly 4,000 sites, for total ~~consideration~~purchase price of ~~$9.7~~$172.8 million. ~~NaN~~

Other Acquisitions

In December 2021, we acquired Leisure Systems, Inc., the franchisor of the ~~land parcels are adjacent~~Jellystone Park™ system. The acquisition was accounted for as a business combination. The following table summarizes the amounts of assets acquired, net of liabilities assumed at the acquisition date and the consideration paid for the acquisition (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(1)		Other liabilities, net		Total identifiable assets acquired net of liabilities assumed		Cash and escrow		Temporary and permanent equity		Total consideration
Leisure Systems, Inc(1)	$	—	$	—	$	24.0	$	(2.3)	$	21.7	$	21.7	$	—	$	21.7

(1) The purchase price allocation is preliminary, subject to ~~existing communities.~~revision based on the final purchase price allocation to be finalized within one year from the acquisition date. As of December 31, 2021, the purchase price of $23.0 million was recognized within Other assets, net in the Consolidated Balance Sheets.

Dispositions

Real estate held for sale of $32.1 million as of December 31, 2020, was reclassified from Other assets, net to various line items on the Consolidated Balance Sheets during the three months ended March 31, 2021, as the sale of those assets was no longer probable. As of March 31, 2021, the primary reclassifications were $34.5 million of assets within Investment property, net and $3.8 million within Other liabilities on the Consolidated Balance Sheets.

On July ~~1, 2020,~~2, 2021, we sold ~~a manufactured housing community~~2 MH communities located in ~~Montana,~~Indiana and Missouri, containing ~~226~~a combined 677 sites, for ~~$12.6~~$67.5 million. The gain from the sale of the property was ~~approximately $5.6~~$49.4 million.

On August 26, 2021, we sold 4 MH communities located in Arizona, Illinois and Missouri, containing a combined 1,137 sites, for $94.6 million. The gain from the sale of the property was $58.7 million.

Refer to Note 19, "Subsequent Events," for information regarding acquisitions completed after March 31, 2022.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

4. Notes and Other Receivables

The following table sets forth certain information regarding notes and other receivables (in ~~thousands)~~millions):


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Installment notes receivable on manufactured homes, net	Installment notes receivable on manufactured homes, net	$	84,109	$	85,866	Installment notes receivable on manufactured homes, net	$	77.2	$	79.1
Notes receivable from real estate developers		58,286		52,638
Notes receivable from real estate developers and operators						Notes receivable from real estate developers and operators	304.4		284.0
Other receivables, net	Other receivables, net	106,614		83,146		Other receivables, net	132.0		106.5
Total Notes and Other Receivables, net	Total Notes and Other Receivables, net	$	249,009	$	221,650	Total Notes and Other Receivables, net	$	513.6	$	469.6

Installment Notes Receivable on Manufactured Homes

Installment notes receivable are measured at fair value, using indicative pricing models from third party valuation specialists, in accordance with ASC Topic 820 "Fair Value Measurements and Disclosures." The balances of installment notes receivable of ~~$84.1~~$77.2 million (net of fair value adjustment of ~~$0.9~~$0.4 million) and ~~$85.9~~$79.1 million (net of fair value adjustment of ~~$1.3~~$0.6 million) as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, are ~~collateralized~~secured by manufactured homes. The notes represent financing to purchasers of manufactured homes ~~primarily~~ located in our communities and require monthly principal and interest payments. The notes had a net weighted average interest rate (net of servicing costs) and maturity of ~~7.8~~7.6 percent and ~~15.0~~14.5 years as of March 31, ~~2021,~~2022, and ~~7.8~~7.6 percent and ~~15.2~~14.7 years as of December 31, ~~2020,~~2021, respectively. Refer to Note ~~14,~~15, "Fair Value of Financial Instruments," for additional detail.

The change in the aggregate balance of the installment notes receivable is as follows (in millions):


	Three Months Ended		Year Ended
	March 31, 2022		December 31, 2021
Beginning balance of gross installment notes receivable	$	79.7	$	87.2
Financed sale of manufactured homes	0.9		8.6
Adjustment for notes receivable related to assets held for sale	—		0.5

Principal payments and payoffs from our customers	(2.3)		(11.7)
Principal reduction from repossessed homes	(0.7)		(3.0)
Dispositions of properties	—		(1.9)
Ending balance of gross installment notes receivable	77.6		79.7






Beginning balance of fair value adjustments on gross installment notes receivable	(0.6)		(1.3)


Fair value adjustment	0.2		0.7
Fair value adjustments on gross installment notes receivable	(0.4)		(0.6)

Ending balance of installment notes receivable, net	$	77.2	$	79.1

Notes Receivable from Real Estate Developers and Operators

The change in the aggregate balance of notes receivable from real estate developers and operators is as follows (in millions):


	Three Months Ended		Year Ended
	March 31, 2022		December 31, 2021
Beginning balance	$	284.0	$	52.6
Additions	30.5		239.7
Payments	(4.1)		(13.0)
Other adjustments	(6.0)		4.7
Ending balance	$	304.4	$	284.0

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

~~The change~~Notes receivable from real estate developers and operators are measured at fair value, using indicative pricing models from third party valuation specialists, in ~~the aggregate balance of the installment notes receivable is as follows (in thousands):~~

accordance with ASC Topic 820 "
Fair Value Measurements and Disclosures.

Three Months Ended Year Ended
March 31, 2021 December 31, 2020
Beginning balance of gross installment notes receivable $ 87,142 $ 96,225
Financed sale of manufactured homes 1,212 5,014
Adjustment for notes receivable related to assets held for sale 477 (477)
Principal payments and payoffs from our customers (2,849) (8,977)
Principal reduction from repossessed homes (965) (4,643)
Ending balance of gross installment notes receivable 85,017 87,142
Beginning balance of allowance for losses on installment notes receivables 0 (645)
Initial fair value option adjustment
0 645
Ending balance of allowance for losses on installment notes receivables 0 0
Beginning balance of fair value adjustments on gross installment notes receivable (1,276) 0
Initial fair value option adjustment 0 991
Adjustment for notes receivable related to assets held for sale (7) 7
Fair value adjustment 375 (2,274)
Fair value adjustments on gross installment notes receivable (908) (1,276)
Ending balance of installment notes receivable, net $ 84,109 $ 85,866

~~Notes Receivable from Real Estate Developers~~

" As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the notes receivable balances ~~of $58.3 million and $52.6 million, respectively~~ are primarily comprised of a loan provided to a real estate operator to finance its acquisition and development costs, and construction loans provided to real estate developers. The carrying values of the notes generally approximate their fair market values either due to the nature of the loan and / or the note being secured by underlying collateral and / or personal guarantees. The notes receivable from real estate developers and operators have a net weighted average interest rate and maturity of ~~6.3~~7.5 percent and ~~1.6~~0.9 years as of March 31, ~~2021,~~2022, and ~~6.2~~7.2 percent and ~~1.8~~0.9 years as of December 31, ~~2020,~~2021, respectively. As of March 31, ~~2021,~~2022, real estate developers and operators collectively have ~~$14.5~~$49.0 million of undrawn funds on their loans. There were no ~~material~~ adjustments to the fair value of notes receivable from ~~the~~ real estate developers and operators for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021. Refer to Note ~~14,~~15, "Fair Value of Financial ~~Instruments.~~Instruments," for additional information.

Other Receivables, net

~~As of March 31, 2021, other~~Other receivables, net were comprised of amounts due ~~from: home sale proceeds of $28.6 million, marina customers for storage service and lease payments of $28.2 million (net~~from (in millions):


	March 31, 2022		December 31, 2021
Home sale proceeds	$	44.1	$	33.5
Marina customers for storage, service and lease payments, net(1)	40.5		29.3
MH and annual RV residents for rent, utility charges, fees and other pass through charges, net(2)	11.0		10.0
Insurance receivables	7.2		9.0
Other receivables(3)	29.2		24.7
Total Other Receivables, net	$	132.0	$	106.5

(1)Net of allowance of ~~$1.7 million), residents for rent, utility charges, fees~~$1.8 million and ~~other pass through charges~~$1.5 million as of ~~$15.9 million (net~~March 31, 2022 and December 31, 2021, respectively.

(2)Net of allowance of ~~$5.8 million), insurance receivables of $13.5~~$5.0 million and ~~other receivables~~$5.5 million as of ~~$20.4 million. As of~~March 31, 2022 and December 31, 2020, other receivables were comprised of amounts due from: home sale proceeds of $23.6 million, marina customers for storage services and lease payments of $19.2 million (net of allowance of $1.4 million), residents for rent, utility charges, fees and other pass through charges of $7.1 million (net of allowance of $7.2 million), insurance receivables of $13.6 million and other receivables of $19.6 million.2021, respectively.

(3)

Includes receivable from Rezplot Systems LLC, a nonconsolidated affiliate in which we have a 49.2 percent ownership interest. In June 2020, we made a convertible secured loan to Rezplot Systems ~~LLC, a nonconsolidated affiliate in which we have a 50 percent ownership interest.~~LLC. The note allows for a principal amount of up to $10.0 million to be drawn down over a period of three years, bears an interest rate of 3.0 percent and is secured by all the assets of Rezplot Systems LLC. In January 2022, we made an additional loan to Rezplot Systems LLC that allows for a principal amount of up to $5.0 million to be drawn over a period of three years and bears an interest rate of 3.0 percent. The outstanding balances were ~~$4.0~~$11.1 million and ~~$2.0~~$10.2 million as of March 31, ~~2021~~2022 and December 31, ~~2020, respectively, and are included in the Notes and other receivables, net line item on the Consolidated Balance Sheets.~~2021, respectively. Refer to Note 6, ~~"Investment~~"Investments in Nonconsolidated Affiliates," for additional information on Rezplot Systems LLC.

5. Goodwill and Other Intangibles Assets

Our intangible assets include goodwill, in-place leases, non-competition agreements, trademarks and trade names, customer relationships, and franchise agreements and other intangible assets. These intangible assets are recorded in Goodwill and Other ~~Intangible Assets,~~intangible assets, net on the Consolidated Balance Sheets.

Goodwill

The change in the carrying amount of goodwill during the three months ended March 31, 2022 is as follows (in millions):


Segment(1)	December 31, 2021		Acquisitions		Other(2)		March 31, 2022
Marina	$	495.4	$	8.8	$	(1.0)	$	503.2
RV	—		9.5		—		9.5
Total	$	495.4	$	18.3	$	(1.0)	$	512.7

(1) There was no Goodwill allocated to the MH segment as of March 31, 2022 and December 31, 2021.

(2) The measurement periods for the valuation of assets acquired and liabilities assumed end as soon as information on the facts and circumstances that existed as of the acquisition dates becomes available but not to exceed 12 months. Adjustments in purchase price allocations may require a change in the amounts allocated to goodwill during the periods in which the adjustments are determined. These purchase accounting adjustments are presented under Other in the table above.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Other Intangible Assets, net

The gross carrying amounts and accumulated amortization of our intangible assets are as follows (in ~~thousands)~~millions):

March 31, 2021 December 31, 2020
Intangible Asset Useful Life Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization
Goodwill Indefinite $ 438,842 N/A $ 428,833 N/A
In-place leases(1)
Expected term 149,109 (102,521) 145,531 (92,327)
Non-competition agreements 5 years 10,000 (500) 10,000 0
Trademarks and trade names
Various(2)
116,500 (208) 116,500 0
Customer relationships 7 - 10 years 107,958 (3,983) 108,000 (2,371)
Franchise agreements and other intangible assets 5.5 - 20 years 28,266 (4,067) 23,856 (3,578)
Total $ 850,675 $ (111,279) $ 832,720 $ (98,276)

~~(1)~~In-place leases as of March 31, 2021 include amounts related to certain assets previously held for sale, and included in Other assets, net, as of year ended December 31, 2020. Assets previously classified as held for sale were reclassified to held for investment as of January 1, 2021.

~~(2)All trademarks and trade names have an indefinite useful life except for one that has a three year useful life as of the acquisition date.~~

~~Goodwill impairment - Upon review of the qualitative factors in accordance with FASB ASC 350-20, "Goodwill and Other," we determined that no impairment indicators existed as of March 31, 2021 and December 31, 2020. As a result, there was no impairment of goodwill during three months ended March 31, 2021.~~

As a result of our organizational change and segment structure realignment, goodwill is recorded in our Marinas operating segment. Goodwill was preliminary as of December 31, 2020, subject to revisions based on purchase price allocations for the Safe Harbor and Rybovich business combination acquisitions which are reflected in the revised goodwill balance at March 31, 2021. There were no incremental acquisitions during the quarter ended March 31, 2021 which had goodwill.


		March 31, 2022				December 31, 2021
Other Intangible Asset	Useful Life	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization

In-place leases	2 months - 13 years	$	163.5	$	(125.2)	$	162.6	$	(120.8)
Non-competition agreements	5 years	10.0		(2.5)		10.0		(2.0)
Trademarks and trade names	3 years	2.5		(1.1)		5.8		(0.9)
Customer relationships	7 - 17 years	123.5		(15.1)		122.4		(12.3)
Franchise agreements and other intangible assets	3 - 27 years	46.1		(6.5)		31.1		(5.8)
Total finite-lived assets		$	345.6	$	(150.4)	$	331.9	$	(141.8)
Indefinite-lived assets - Trademarks and trade names	N/A	136.5		—		114.2		—
Indefinite-lived assets - Other	N/A	2.5		—		2.5		—
Total indefinite-lived assets		$	139.0	$	—	$	116.7	$	—
Total		$	484.6	$	(150.4)	$	448.6	$	(141.8)

Amortization expenses related to ~~the~~our Other intangible assets are as follows (in ~~thousands)~~millions):


		Three Months Ended				Three Months Ended
Intangible Asset Amortization Expense		March 31, 2021		March 31, 2020
Other Intangible Asset Amortization Expense							Other Intangible Asset Amortization Expense	March 31, 2022		March 31, 2021
In-place leases	In-place leases	$	9,816	$	3,451		In-place leases	$	4.6	$	9.8
Non-competition agreements	Non-competition agreements	500		0			Non-competition agreements	0.5		0.5
Trademarks and trade names	Trademarks and trade names	208		0			Trademarks and trade names	0.2		0.2
Customer relationships	Customer relationships	1,611		0			Customer relationships	2.8		1.6
Franchise fees and other intangible assets	Franchise fees and other intangible assets	490		205			Franchise fees and other intangible assets	0.6		0.5
Total	Total	$	12,625	$	3,656		Total	$	8.7	$	12.6

We anticipate amortization expense for Other intangible assets to be as follows for the next five years (in ~~thousands)~~millions):


		Remainder 2021		2022		2023		2024		2025			Remainder 2022		2023		2024		2025		2026
In-place leases	In-place leases	$	18,532	$	11,145	$	7,701	$	5,408	$	4,844	In-place leases	$	10.1	$	9.7	$	6.9	$	6.0	$	3.3
Non-competition agreements	Non-competition agreements	1,500		2,000		2,000		2,000		2,000		Non-competition agreements	1.5		2.0		2.0		2.0		—
Trademarks and trade names	Trademarks and trade names	625		833		833		0		0		Trademarks and trade names	0.6		0.8		—		—		—
Customer relationships	Customer relationships	8,128		10,837		10,837		10,837		10,837		Customer relationships	8.8		11.8		11.8		11.7		11.7
Franchise agreements and other intangible assets	Franchise agreements and other intangible assets	1,676		1,962		1,933		1,879		1,872		Franchise agreements and other intangible assets	2.4		3.1		3.1		3.0		2.7
Total	Total	$	30,461	$	26,777	$	23,304	$	20,124	$	19,553	Total	$	23.4	$	27.4	$	23.8	$	22.7	$	17.7

~~SUN COMMUNITIES, INC.~~

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

~~(Unaudited)~~

6. ~~Investment~~Investments in Nonconsolidated Affiliates

Investments in joint ventures that are not consolidated, nor recorded at cost, are accounted for using the equity method of accounting as prescribed in ~~FASB~~ ASC Topic 323, "Investments - Equity Method and Joint Ventures." Investments in nonconsolidated affiliates are recorded within Other assets, net on the Consolidated Balance Sheets. Equity income and loss are recorded in the Income from nonconsolidated affiliates line item on the Consolidated Statements of Operations.

RezPlot Systems LLC ("Rezplot")

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, we had a 5049.2 percent ownership interest in RezPlot, a RV reservation software technology company, which interest we acquired in January 2019.

Sungenia ~~joint venture~~Joint Venture ("Sungenia JV")

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, we had a 50 percent ownership interest in Sungenia JV, a joint venture formed between us and Ingenia Communities Group in November 2018, to establish and grow a manufactured housing community development program in Australia.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

GTSC LLC ("GTSC")

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, we had a 40 percent ownership interest in GTSC, which engages in acquiring, holding and selling loans secured, directly or indirectly, by manufactured homes located in our communities.

Origen Financial Services, LLC ("OFS")

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, we had a 22.9 percent ownership interest in OFS, an end-to-end online resident screening and document management suite.

SV Lift, LLC ("SV Lift")

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, we had a 50 percent ownership interest in SV Lift, which owns, operates and leases an aircraft.

The investment balance in each nonconsolidated affiliate is as follows (in ~~thousands)~~millions):


Investment	Investment	March 31, 2021		December 31, 2020		Investment	March 31, 2022		December 31, 2021
Investment in RezPlot	Investment in RezPlot	$	2,561	$	3,047	Investment in RezPlot	$	0.6	$	0.1
Investment in Sungenia JV	Investment in Sungenia JV	27,337		26,890		Investment in Sungenia JV	36.6		36.2
Investment in GTSC	Investment in GTSC	28,747		25,495		Investment in GTSC	37.3		35.7
Investment in OFS	Investment in OFS	181		152		Investment in OFS	0.3		0.2
Investment in SV Lift	Investment in SV Lift	3,373		3,490		Investment in SV Lift	2.7		2.9
Total	Total	$	62,199	$	59,074	Total	$	77.5	$	75.1

The income / (loss) from each nonconsolidated affiliate is as follows (in ~~thousands)~~millions):


		Three Months Ended				Three Months Ended
Income / (Loss) from Nonconsolidated Affiliates(1)	Income / (Loss) from Nonconsolidated Affiliates(1)	March 31, 2021		March 31, 2020			Income / (Loss) from Nonconsolidated Affiliates(1)	March 31, 2022		March 31, 2021
RezPlot equity loss	RezPlot equity loss	$	(487)	$	(500)		RezPlot equity loss	$	(0.7)	$	(0.5)
Sungenia JV equity income / (loss)		734		(115)
Sungenia JV equity income							Sungenia JV equity income	0.6		0.8
GTSC equity income	GTSC equity income	1,181		760			GTSC equity income	1.2		1.2
OFS equity income		29		38

SV Lift equity loss	SV Lift equity loss	(286)		(131)			SV Lift equity loss	(0.2)		(0.3)
Total Income from Nonconsolidated Affiliates	Total Income from Nonconsolidated Affiliates	$	1,171	$	52		Total Income from Nonconsolidated Affiliates	$	0.9	$	1.2

(1) Our Equity income in OFS for the three months ended March 31, 2022, and 2021 was immaterial to disclose.

The change in the GTSC investment balance is as follows (in millions):


	Three Months Ended		Year Ended
	March 31, 2022		December 31, 2021
Beginning balance	$	35.7	$	25.5


Contributions	5.1		27.3
Distributions	(4.8)		(23.0)
Equity earnings	1.2		6.1
Fair value adjustment	0.1		(0.2)
Ending Balance	$	37.3	$	35.7

The change in the Sungenia JV investment balance is as follows (in millions):


	Three Months Ended		Year Ended
	March 31, 2022		December 31, 2021
Beginning balance	$	36.2	$	26.9
Cumulative translation adjustment	(0.2)		(1.5)
Contributions	—		9.0

Equity earnings	0.6		1.8

Ending Balance	$	36.6	$	36.2

1415

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

~~The change in the GTSC investment balance is as follows (in thousands):~~

Three Months Ended Year Ended
March 31, 2021 December 31, 2020
Beginning balance $ 25,495 $ 18,488
Initial fair value option adjustment 0 317
Contributions 4,339 19,030
Distributions (2,372) (14,676)
Equity earnings 1,181 3,944
Fair value adjustment 104 (1,608)
Ending Balance $ 28,747 $ 25,495

~~The change in the Sungenia JV investment balance is as follows (in thousands):~~

Three Months Ended Year Ended
March 31, 2021 December 31, 2020
Beginning balance $ 26,890 $ 11,995
Cumulative translation adjustment (287) 2,180
Contributions 0 12,377
Equity earnings 734 338
Ending Balance $ 27,337 $ 26,890

7. Consolidated Variable Interest Entities

The Operating Partnership

We consolidate the Operating Partnership under the guidance set forth in ASC 810 "Consolidation." ~~Accounting Standard Update 2015-02 modified~~We evaluated whether the ~~evaluation of whether limited partnerships and similar legal entities are~~Operating Partnership met the criteria for classification as a variable interest ~~entities~~entity ("~~VIEs"~~VIE") or, alternatively, as a voting interest ~~entities. We evaluated the application of ASU 2015-02~~entity and concluded that the Operating Partnership met the criteria of a VIE. Our significant asset is our investment in the Operating Partnership, and consequently, substantially all of our assets and liabilities represent those assets and liabilities of the Operating Partnership. We are the sole general partner and generally have the power to manage and have complete control over the Operating Partnership and the obligation to absorb its losses or the right to receive its benefits.

Other Consolidated VIEs

We consolidate Sun NG RV Resorts LLC ("Sun NG Resorts"); Rudgate Village SPE, LLC, Rudgate Clinton SPE, LLC, and Rudgate Clinton Estates SPE, ~~LLC (collectively, "Rudgate");~~LLC; Sun NG Whitewater RV Resorts LLC; FPG Sun Menifee 80 LLC, SHM South Fork JV, ~~LLC.~~

~~We consolidate~~LLC; Sun ~~NG Resorts, Rudgate,~~Solar Energy Project LLC, Sun ~~NG Whitewater RV Resorts LLC,~~Solar Energy Project CA II, and FPG Sun ~~Menifee 80 LLC, and SHM South Fork JV,~~Moreno Valley 66 LLC under the guidance set forth in ~~FASB~~ ASC Topic 810 "Consolidation." We concluded that each entity is a VIE where we are the primary beneficiary, as we have the power to direct the significant activities of, and absorb the significant losses and receive the significant benefits from each entity. Refer to Note 8, "Debt and ~~Lines~~Line of Credit," for additional information on Sun NG ~~Resorts and Note 9, "Equity and Temporary Equity," for additional information on Sun NG Resorts, Sun NG Whitewater RV Resorts LLC, FPG Sun Menifee 80 LLC and SHM South Fork JV, LLC.~~

~~SUN COMMUNITIES, INC.~~

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

~~(Unaudited)~~

Resorts.

The following table summarizes the assets and liabilities of ~~Sun NG Resorts, Rudgate, Sun NG Whitewater RV Resorts LLC. FPG Sun Menifee 80 LLC and SHM South Fork JV, LLC~~our consolidated VIEs, with the exception of the Operating Partnership, included in our Consolidated Balance Sheets after eliminations (in ~~thousands)~~millions):


		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Assets	Assets					Assets
Investment property, net	Investment property, net	$	479,196	$	438,918	Investment property, net	$	699.4	$	623.5
Cash, cash equivalents and restricted cash						Cash, cash equivalents and restricted cash	15.5		13.6
Other intangible assets, net						Other intangible assets, net	13.8		13.4
Other assets, net	Other assets, net	31,820		24,554		Other assets, net	6.7		5.3
Total Assets	Total Assets	$	511,016	$	463,472	Total Assets	$	735.4	$	655.8

Liabilities and Other Equity	Liabilities and Other Equity					Liabilities and Other Equity
Debt		$	54,142	$	47,706
Preferred equity - Sun NG Resorts - mandatorily redeemable		35,249		35,249
Secured debt						Secured debt	$	53.1	$	52.6
Unsecured debt						Unsecured debt	35.2		35.2
Other liabilities	Other liabilities	47,901		21,957		Other liabilities	123.2		94.0
Total Liabilities	Total Liabilities	137,292		104,912		Total Liabilities	211.5		181.8
Temporary equity	Temporary equity	26,604		28,469		Temporary equity	32.3		35.4
Noncontrolling interests (including SHM South Fork JV, LLC)		16,901		16,084
Noncontrolling interests						Noncontrolling interests	20.3		19.4
Total Liabilities and Other Equity	Total Liabilities and Other Equity	$	180,797	$	149,465	Total Liabilities and Other Equity	$	264.1	$	236.6

~~Investment property, net and Other~~Total assets ~~net~~ related to the consolidated VIEs, with the exception of the Operating Partnership, comprised ~~approximately 4.5~~5.3 percent and ~~4.1~~4.9 percent of our consolidated total assets at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. ~~Debt, Preferred Equity and Other~~Total liabilities comprised ~~2.7~~3.0 percent and ~~2.0~~2.8 percent of our consolidated total liabilities at March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Equity Interests and Noncontrolling interests related to the consolidated VIEs, on an absolute basis, comprised less than 1.0 percent of our consolidated total equity at March 31, ~~2021~~2022 and at December 31, ~~2020,~~2021, respectively.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

8. Debt and ~~Lines~~Line of Credit

The following table sets forth certain information regarding debt including premiums, discounts and deferred financing costs (in ~~thousands~~millions, except for statistical information):

Carrying Amount Weighted Average
Years to Maturity Weighted Average
Interest Rates
March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020
Collateralized term loans - Life Companies $ 1,649,163 $ 1,658,239 16.1 16.3 3.990 % 3.990 %
Collateralized term loans - FNMA 1,148,524 1,150,924 8.9 9.1 3.228 % 3.230 %
Collateralized term loans - CMBS 265,758 267,205 2.6 2.9 4.789 % 4.789 %
Collateralized term loans - FMCC 366,975 368,599 3.6 3.9 3.853 % 3.854 %
Total Collateralized Term Loans 3,430,420 3,444,967
Preferred equity - Sun NG Resorts - mandatorily redeemable 35,249 35,249 3.5 3.8 6.000 % 6.000 %
Preferred OP units - mandatorily redeemable 34,663 34,663 4.9 5.1 5.932 % 5.932 %
Lines of credit and other debt 917,603 1,242,197 2.9 3.7 1.746 % 2.078 %
Total Debt $ 4,417,935 $ 4,757,076 9.5 9.4 3.394 % 3.370 %


	Carrying Amount				Weighted Average Years to Maturity		Weighted Average Interest Rates
	March 31, 2022		December 31, 2021		March 31, 2022	December 31, 2021	March 31, 2022		December 31, 2021








Secured Debt	$	3,366.6	$	3,380.7	10.4	10.6	3.778	%	3.779	%

Unsecured Debt
Senior unsecured notes	1,186.7		1,186.4		8.3	8.5	2.55	%	2.55	%

Line of credit and other debt	1,453.3		1,034.8		3.1	3.5	1.25	%	0.978	%
Preferred equity - Sun NG Resorts - mandatorily redeemable	35.2		35.2		2.5	2.8	6.0	%	6.0	%
Preferred OP units - mandatorily redeemable	34.7		34.7		3.9	4.1	5.932	%	5.932	%
Total Unsecured Debt	2,709.9		2,291.1
Total Debt	$	6,076.5	$	5,671.8	8.1	8.8	2.958	%	3.038	%

Secured Debt

Secured debt consists of mortgage term loans.

During the three months ended March 31, 2022, no mortgage term loans were paid off. During the year ended December 31, 2021, we paid off the following mortgage term loans (in millions, except for statistical information):


Period	Repayment Amount			Fixed Interest Rate		Maturity Date	Loss on Extinguishment of Debt
Three months ended December 31, 2021	$	11.6	(1)	4.3	%	February 1, 2022	$	—

(1)Includes 2 mortgage term loans which matured on February 1, 2022.

During the three months ended March 31, 2022 and year ended December 31, 2021, we did not enter into any new mortgage term loans.

The mortgage term loans, which total $3.4 billion as of March 31, 2022, are secured by 190 properties comprised of 75,378 sites representing approximately $3.1 billion of net book value.

Unsecured Debt

Senior Unsecured Notes

In October 2021, the Operating Partnership issued $450.0 million of senior unsecured notes with an interest rate of 2.3 percent and a seven-year term, due November 1, 2028 (the "2028 Notes"). Interest on the 2028 Notes is payable semi-annually in arrears on May 1 and November 1 of each year, beginning on May 1, 2022. In addition, the Operating Partnership issued $150.0 million of senior unsecured 2031 Notes (as defined below) with an interest rate of 2.7 percent and a ten-year term due July 15, 2031. The 2031 Notes are additional notes of the same series as the $600.0 million aggregate principal amount of senior unsecured notes that the Operating Partnership issued in June 2021. The net proceeds from the offering were approximately $595.5 million after deducting underwriters' discounts and estimated offering expenses. The proceeds were used to pay down borrowings under our Senior Credit Facility.

In June 2021, the Operating Partnership issued $600.0 million of senior unsecured notes with an interest rate of 2.7 percent and a ten-year term, due July 15, 2031 (the "2031 Notes"). Interest on the 2031 Notes is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2022. The net proceeds from the offering were approximately $592.4 million, after deducting underwriters' discounts and estimated offering expenses. The proceeds were used to pay down borrowings under our Senior Credit Facility.

1617

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

~~Collateralized Term Loans~~The total outstanding balance of senior unsecured notes was $1.2 billion at March 31, 2022. This balance is recorded in the Unsecured debt line item on the Consolidated Balance Sheets.

Line of Credit

In June 2021, we entered into a senior credit agreement (the "Credit Agreement") with certain lenders. The Credit Agreement combined and replaced our prior $750.0 million credit facility, which was scheduled to mature on May 21, 2023, (the "A&R Facility"), and the $1.8 billion credit facility between Safe Harbor and certain lenders, which was scheduled to mature on October 11, 2024 (the "Safe Harbor Facility"). The Safe Harbor Facility was terminated in connection with the execution of the Credit Agreement. We repaid all amounts due and outstanding under the Safe Harbor Facility on or prior to the effective date. We recognized a Loss on extinguishment of debt in our Consolidated Statement of Operations related to the termination of the A&R Facility and the Safe Harbor Facility of $0.2 million and $7.9 million, respectively.

Pursuant to the Credit Agreement, we may borrow up to $2.0 billion under a revolving loan (the "Senior Credit Facility"). The Senior Credit Facility is available to fund all of the Company's business, including its marina business conducted by Safe Harbor. The Credit Agreement also permits, subject to the satisfaction of certain conditions, additional borrowings (with the consent of the lenders) in an amount not to exceed $1.0 billion with the option to treat all, or a portion, of such additional funds as an incremental term loan.

The Senior Credit Facility has a four-year term ending June 14, 2025, and, at our option, the maturity date may be extended for 2 additional six-month periods, subject to the satisfaction of certain conditions. However, the maturity date with respect to $500.0 million of available borrowing under the Senior Credit Facility is October 11, 2024, which, under the terms of the Credit Agreement, may not be extended. The Senior Credit Facility bears interest at a floating rate based on the Adjusted Eurocurrency Rate or BBSY rate, plus a margin that is determined based on the Company's credit ratings calculated in accordance with the Credit Agreement, which can range from 0.725 percent to 1.4 percent. As of March 31, 2022, the margin based on our credit ratings was 0.85 percent on the Senior Credit Facility.

At the lenders' option, the Senior Credit Facility will become immediately due and payable upon an event of default under the Credit Agreement. We had $1.4 billion and $1.0 billion of borrowings on the Senior Credit Facility as of March 31, 2022 and December 31, 2021. Of the total amount borrowed as of March 31, 2022, $1.2 billion is scheduled to mature on June 14, 2025 and $203.0 million is scheduled to mature October 11, 2024. These balances are recorded in Unsecured debt on the Consolidated Balance Sheets.

The Senior Credit Facility provides us with the ability to issue letters of credit. Our issuance of letters of credit does not increase our borrowings outstanding under the Senior Credit Facility, but does reduce the borrowing amount available. We had $2.2 million of outstanding letters of credit at March 31, 2022 and December 31, 2021, respectively.

Refer to Note 19, "Subsequent Events," for information regarding the amendment of our Senior Credit Facility completed after March 31, 2022.

Bridge Loan Termination

On March 31, 2022, we terminated our commitment letter with Citigroup Global Markets, Inc. ("Citigroup"), pursuant to which, Citigroup (on behalf of its affiliates), committed to lend us up to £950.0 million, or approximately $1.2 billion converted at the March 31, 2022 exchange rate (the "Bridge Loan"). As of the date of termination, we did not have any borrowings outstanding under the Bridge Loan. During the three months ended March 31, ~~2021~~2022, we ~~made no repayments~~recognized a loss on extinguishment of debt in our Consolidated Statement of Operations of $0.3 million related to the ~~collateralized term loans. During~~termination of the ~~year ended December 31, 2020, we repaid the following collateralized term loans (in thousands except statistical information):~~Bridge Loan.

Three Months Ended Repayment Amount Fixed Interest Rate Maturity Date (Gain) / Loss on Extinguishment of Debt
June 30, 2020 $ 52,710 (1) 5.980 % (3) March 1, 2021
July 11, 2021
December 1, 2021 $ 1,930
March 31, 2020 $ 99,607 5.837 % March 1, 2021 $ 3,403
$ 19,922 (2) 5.830 % (3) July 1, 2020 $ (124)
Unsecured Term Loan

~~(1)~~
~~Includes 4 collateralized~~

In October 2019, we assumed a term ~~loans, 2 due~~loan facility, in the amount of $58.0 million in relation to ~~mature~~an acquisition. The term loan has a four-year term ending October 29, 2023, and bears interest at a floating rate based on ~~March~~the Eurodollar rate or Prime rate plus a margin ranging from 1.20 percent to 2.05 percent. Effective July 1, 2021, ~~1 due~~the agreement was amended to ~~mature on July 11, 2021~~release the associated collateral. The amendment extended the term loan facility maturity date to October 29, 2025 and adjusted the ~~other due to mature on December 1, 2021.~~

~~(2)Includes 4 collateralized term loans due to mature on July 1, 2020.~~

~~(3)The~~ interest rate ~~represents~~margin to a range from 0.8 percent to 1.6 percent. As of March 31, 2022, the ~~weighted average interest rate~~margin was 0.95 percent. The outstanding balance was $28.4 million at March 31, 2022 and $31.6 million at December 31, 2021. These balances are recorded in Unsecured debt and Secured debt on ~~collateralized term loans.~~the Consolidated Balance Sheets, respectively.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

During the three months ended March 31, 2021 we did not enter into any new collateralized term loans. During the year ended December 31, 2020, we entered into the following collateralized term loans (in thousands except statistical information):

Three Months Ended Loan Amount Term
(in years) Interest
Rate Maturity
Date
December 31, 2020 $ 268,800 (1) 12 2.662 % (2) May 1, 2030
November 1, 2032
March 31, 2020 $ 230,000 15 2.995 % April 1, 2035

~~(1)Includes 3 collateralized term loans, 1 for $8.8 million due to mature on May 1, 2030 and 2 for $39.5 million and $220.5 million, due to mature on November 1, 2032.~~

~~(2)The interest rate represents the weighted average interest rate on collateralized term loans.~~

~~The collateralized term loans totaling $3.4 billion as of March 31, 2021, are secured by 192 properties comprised of 77,306 sites representing approximately $3.2 billion of net book value.~~

Preferred Equity - Sun NG Resorts - ~~mandatorily redeemable~~Mandatorily Redeemable

In connection with the investment in Sun NG Resorts, $35.3 million of mandatorily redeemable Preferred Equity ("Preferred Equity - Sun NG Resorts") was purchased by unrelated third parties. The Preferred Equity - Sun NG Resorts carries a preferred rate of return of 6.0 percent per annum. The Preferred Equity - Sun NG Resorts has a ~~seven-year~~seven-year term ending June 1, 2025 and ~~$33.4 million~~ can be redeemed in the fourth quarter of 2024 at the holders' option. The Preferred Equity - Sun NG Resorts as of March 31, ~~2021~~2022 was $35.2 million. These balances are recorded within the Unsecured debt line item on the Consolidated Balance Sheets. Refer to Note 7, "Consolidated Variable Interest Entities," ~~and Note 9, "Equity and Temporary Equity,"~~ for additional information.

Preferred OP Units - mandatorily redeemable

Preferred OP units at March 31, ~~2021~~2022 and December 31, ~~2020~~2021 include $34.7 million of Aspen preferred OP units issued by the Operating Partnership. As of March 31, ~~2021,~~2022, these units are convertible indirectly into ~~406,470~~393,724 shares of our common stock.

In January 2020, we amended the Operating Partnership's partnership agreement. The amendment extended the automatic redemption date and reduced the annual distribution rate for 270,000 of the Aspen preferred OP units (the "Extended Units"). Subject to certain limitations, at any time prior to January 1, 2024 (or prior to January 1, 2034 with respect to the Extended Units), the holder of each Aspen preferred OP unit at its option may convert such Aspen preferred OP unit into: (a) if the average closing price of our common stock for the preceding ten trading days is $68.00 per share or less, 0.397 common OP units; or (b) if the ten-day average closing price is greater than $68.00 per share, the number of common OP units is determined by dividing (i) the sum of (A) $27.00 plus (B) 25.0 percent of the amount by which the ten-day average closing price exceeds $68.00 per share, by (ii) the ten-day average closing price. The current preferred distribution rate is 3.8 percent on the Extended Units and 6.5 percent on all other Aspen preferred OP units. On January 2, 2024 (or January 2, 2034 with respect to the Extended Units), we are required to redeem for cash all Aspen preferred OP units that have not been converted to common OP units. As of March 31, ~~2021,~~2022, 270,000 of the Extended Units and 1,013,819 other Aspen preferred units were outstanding.

~~SUN COMMUNITIES, INC.~~

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

~~(Unaudited)~~

~~Lines of Credit and Other Debt~~

~~Credit Agreement -~~ In May 2019, we amended and restated our credit agreement with Citibank, N.A. ("Citibank") and certain other lenders. Pursuant to the credit agreement, we entered into an unsecured senior credit facility with Citibank and certain lenders in the amount of $750.0 million, comprised of a $650.0 million revolving loan, with the ability to use up to $100.0 million for advances in Australian dollars, and a $100.0 million term loan (the "A&R Facility"). The A&R Credit Agreement has a four-year term ending May 21, 2023, which can be extended for two additional six-month periods, subject to the satisfaction of certain conditions as defined in the credit agreement. The credit agreement also provides for additional commitments in an amount not to exceed $350.0 million. The funding of these additional commitments is subject to certain conditions, including obtaining the consent of the lenders, some of which are outside of our control. If additional borrowings are made pursuant to any such additional commitments, the aggregate borrowing limit under the A&R Facility may be increased up to $1.1 billion.

The A&R Facility bears interest at a floating rate based on the Eurodollar rate or Bank Bill Swap Bid Rate plus a margin that is determined based on our leverage ratio calculated in accordance with the credit agreement, which margin can range from 1.20 percent to 2.10 percent for the revolving loan and 1.20 percent to 2.05 percent for the term loan. As of March 31, 2021, the margin based on our leverage ratio was 1.20 percent on the revolving loan and 1.20 percent on the term loan. We had $352.9 million and 0 borrowings on the revolving loan and the term loan, respectively, as of March 31, 2021. We had $40.4 million of borrowings on the revolving loan and 0 borrowings on the term loan, as of December 31, 2020.

The A&R Facility provides us with the ability to issue letters of credit. Our issuance of letters of credit does not increase our borrowings outstanding under our line of credit with Citibank, but does reduce the borrowing amount available. At March 31, 2021 and December 31, 2020, we had approximately $2.2 million and $2.1 million of outstanding letters of credit, respectively.

~~Safe Harbor Facility~~ - On October 30, 2020, in relation to the acquisition of Safe Harbor, we indirectly assumed approximately $829.0 million of Safe Harbor's debt (“Safe Harbor Facility”) owed to Citizens Bank N.A. ("Citizens"). On December 22, 2020, this facility was amended to, among other things, (a) increase the size of the revolving commitments available to Safe Harbor from $500.0 million to $1.3 billion, subject to borrowing base availability, (b) modify certain provisions relating to the determination of the borrowing base, (c) increase the cap on the incremental borrowing capacity from $350.0 million to $500.0 million, which allows Safe Harbor to request an increase to the revolving commitments and / or to establish additional term loans subject to the higher cap and the satisfaction of certain condition, and (d) modify certain financial covenants. The revolving loan and term loan under the Safe Harbor Facility both expire on October 11, 2024. The term loan component of the Safe Harbor Facility can be extended for two additional 12-month periods, subject to the satisfaction of certain conditions set forth in the credit agreement. The revolving commitments do not have an extension option.

The Safe Harbor Facility bears interest at a floating rate based on an adjusted LIBOR rate or a base rate, plus a margin that is determined based on Safe Harbor's ratio of consolidated funded debt to total asset value, calculated in accordance with the credit agreement, which margin can range from 1.375 percent to 2.250 percent for adjusted LIBOR rate loans and 0.375 percent to 1.250 percent for base rate loans. As of March 31, 2021, based on Safe Harbor's ratio of consolidated funded debt to total asset value, the margin was 2.000 percent on any adjusted LIBOR rate loans and 1.000 percent on any base rate loans. The Safe Harbor Facility is secured by the personal property of Safe Harbor and certain related entities and subsidiaries and a pledge of the equity interests in certain subsidiaries of Safe Harbor and related entities and subsidiaries, subject to customary exceptions. At the lender's option, the Safe Harbor Facility will become immediately due and payable upon an event of default that is continuing under the credit agreement. Safe Harbor had $19.0 million and $500.0 million of borrowings under the revolving loan and term loan respectively, as of March 31, 2021. Safe Harbor had $652.0 million and $500.0 million of borrowings under the revolving loan and term loan respectively, as of December 31, 2020.

The Safe Harbor Facility provides Safe Harbor with the ability to issue letters of credit. Its issuance of letters of credit does not increase its borrowings outstanding under its line of credit with Citizens, but does reduce the borrowing amount available. The balance of the outstanding letters of credit for Safe Harbor was approximately $0.3 million at March 31, 2021 and December 31, 2020.

~~Floor Plan~~ - We have a $12.0 million manufactured home floor plan facility renewable indefinitely until our lender provides us at least a 12-month notice of their intent to terminate the agreement. The interest rate is 100 basis points over the greater of the prime rate as quoted in the ~~Wall Street Journal~~ on the first business day of each month or 6.0 percent. At March 31, 2021, the effective interest rate was 7.0 percent. The outstanding balance was $3.2 million as of March 31, 2021 and $4.8 million as of December 31, 2020. These balances are recorded within the ~~Lines of credit and other~~Unsecured debt line item on the Consolidated Balance Sheets.

~~SUN COMMUNITIES, INC.~~

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

~~(Unaudited)~~

~~Other~~ - In October 2019, we assumed a term loan facility with Citibank, in the amount of $58.0 million in relation to an acquisition. The term loan has a four-year term ending October 29, 2023, and bears interest at a floating rate based on the Eurodollar rate or Prime rate plus a margin ranging from 1.20 percent to 2.05 percent. As of March 31, 2021, the margin based on our leverage ratio was 1.20 percent. The outstanding balance was $42.5 million at March 31, 2021 and $45.0 million at December 31, 2020, respectively. These balances are recorded in the Lines of credit and other debt line item on the Consolidated Balance Sheets.

Covenants

The ~~Collateralized~~mortgage term loans, senior unsecured notes and ~~Lines of credit~~Senior Credit Facility are subject to various financial and other covenants. The most restrictive covenants are pursuant to (a) the terms of the A&R Facility, which contains minimum fixed charge coverage ratio and net worth requirements, and maximum leverage, distribution ratios and variable rate indebtedness, and (b) the terms of the Safe HarborSenior Credit Facility, which contains a minimum fixed charge coverage ratio, ~~pre-distribution, a minimum fixed charge coverage~~maximum leverage ratio, ~~post~~ distribution ~~a minimum borrowing base coverage~~ ratio and variable rate indebtedness and (b) senior unsecured notes, which contain a ~~maximum leverage ratio.~~total debt to total assets, secured debt to total assets, consolidated income available for debt service to debt service and unencumbered total asset value to unsecured debt covenants. At March 31, ~~2021,~~2022, we were in compliance with all covenants.

In addition, certain of our subsidiary borrowers own properties that secure loans. These subsidiaries are consolidated within our accompanying Consolidated Financial Statements, however, each of these subsidiaries' assets and credit are not available to satisfy our debts and other obligations, and any of our other subsidiaries or any other person or entity.

~~Off-Balance Sheet Arrangements - Nonconsolidated Affiliate Indebtedness~~

~~GTSC~~ ~~- During September 2019, GTSC, a nonconsolidated affiliate in which we have a 40 percent ownership interest, entered into a warehouse~~Refer to Note 19, "Subsequent Events," for information regarding Debt and line of credit ~~with a maximum loan amount of $125.0 million. During September 2020, the maximum amount was increased to $180.0 million. As of~~activities completed after March 31, 2021, the aggregate carrying amount of debt, including both our and our partner's share, incurred by GTSC was $180.0 million (of which our proportionate share is $72.0 million). As of December 31, 2020, the aggregate carrying amount of debt, including both our and our partner's share, incurred by GTSC was $167.7 million (of which our proportionate share is $67.1 million). The debt bears interest at a variable rate based on LIBOR plus 1.65 percent per annum and matures on September 15, 2023.

~~Sungenia JV~~ - During May 2020, Sungenia JV, a nonconsolidated affiliate in which we have a 50 percent ownership interest, entered into a debt facility agreement with a maximum loan amount of 27.0 million Australian dollars, or $20.5 million converted at the March 31, 2021 exchange rate. As of March 31, 2021, the aggregate carrying amount of debt, including both our and our partners' share, incurred by Sungenia JV was $6.6 million (of which our proportionate share is $3.3 million). As of December 31, 2020, the aggregate carrying amount of debt, including both our and our partners' share, incurred by Sungenia JV was $6.7 million (of which our proportionate share is $3.3 million). The debt bears interest at a variable rate based on Australian Bank Bill Swap Bid Rate (BBSY) plus 2.05 percent per annum and is available for a minimum of three years.2022.

9. Equity and Temporary Equity

~~Public Equity Offerings~~Universal Shelf Registration Statement

~~On March 2,~~In April 2021, we ~~priced~~filed a ~~$1.1 billion underwritten public offering~~new universal shelf registration statement on Form S-3 with the SEC. The shelf registration statement was deemed automatically effective and provides for the registration of ~~an aggregate~~unspecified amounts of 8,050,000 shares at a public offering price of $140.00 per share, before underwriting discounts and commissions. The offering consisted of 4,000,000 shares offered directly by us and 4,050,000 shares offered under a forward equity sales agreement (the "March 2021 Forward Equity Offering"). We sold the 4,000,000 shares on March 9, 2021 and received net proceeds of $537.6 million. We may elect to settle the forward sale agreements relating to the remaining 4,050,000 shares upon one or more forward settlement dates no later than March 2022. We may also elect to cash settle or net share settle all or a portion of our obligations under the March 2021 Forward Equity Offering if we conclude it is in our best interest to do so. If we elect to cash settle or net settle the March 2021 Forward Equity Offering, we may not receive any proceeds. If we fully physically settle the March 2021 Forward Equity Offering, we expect to receive net proceeds of approximately $544.3 million.

~~We evaluated the accounting of the March 2021 Forward Equity Offering under FASB ASC Topic 480 "Distinguishing Liabilities from Equity" and FASB ASC Topic 815 "Derivatives and Hedging" and determined that the March 2021 Forward Equity Offering is indexed to our own~~ equity and ~~meet~~debt securities. We have the ~~requirements for equity classification under ASC 815-40-25.~~authority to issue 200,000,000 shares of capital stock, of which 180,000,000 shares are common stock and 20,000,000 are shares of preferred stock, par value $0.01 per share. As ~~result, the~~of March ~~2021 Forward Equity Offering has been classified as equity~~31, 2022, we had 116,207,122 shares of common stock issued and is therefore exempt from derivative accounting. We recorded the March 2021 Forward Equity Offering at fair value at inception, which we determined to be zero. Subsequent changes to fair value are not required under equity classification.outstanding and no shares of preferred stock were issued and outstanding.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

~~On September 30, 2020,~~Public Equity Offerings

In November 2021, we entered into ~~two~~2 forward sale agreements ~~(the "September 2020 Forward Equity Offerings")~~ relating to an underwritten registered public offering of ~~9,200,000~~4,025,000 shares of our common stock at a public offering price of ~~$139.50~~$185.00 per ~~share. The~~share and completed the offering ~~closed~~ on ~~October 5, 2020. On October 26, 2020, we physically settled~~November 18, 2021 (the "November 2021 Forward Sale Agreements"). We did not initially receive any proceeds from the ~~September 2020 Forward Equity Offering (by the delivery~~sale of shares of our common ~~stock). Proceeds from~~stock by the ~~offering were approximately $1.23 billion after deducting expenses related~~forward purchaser or its affiliates. We intend to ~~the offering. We used~~use the net proceeds, if any, received upon the future settlement of ~~this offering~~the forward sale agreements, to fund ~~the cash~~a portion of the purchase price for our acquisition of ~~Safe Harbor,~~Tiger Topco 1 Limited (together with its subsidiaries, "Park Holidays,") to repay borrowings outstanding under our Senior Credit Facility, to fund possible future acquisitions of properties and / or for working capital and general corporate purposes.

~~In May 2020, we closed an underwritten registered public offering~~ Refer to Note 19, "Subsequent Events," for information regarding the settlement of ~~4,968,000 shares of common stock. Proceeds from~~ the ~~offering were $633.1 million~~November 2021 Forward Sales Agreements completed after ~~deducting expenses related to the offering. We used the net proceeds of this offering to repay borrowings outstanding under the revolving loan under our senior credit facility.~~March 31, 2022.

At the Market Offering Sales Agreement

In ~~July 2017,~~December 2021, we entered into an atAt the ~~market offering sales agreement (the "Sales Agreement")~~Market Offering Sales Agreement with certain sales agents ~~(collectively, the "Sales Agents"), whereby~~and forward sellers pursuant to which we may ~~offer and~~ sell, ~~shares~~from time to time, up to an aggregate gross sales price of $1.25 billion of our common stock ~~having an aggregate offering price of up to $450.0 million, from time to time~~(the "December 2021 Sales Agreement"), through the ~~Sales Agents.~~sales agents, acting as our sales agents or, if applicable, as forward sellers, or directly to the sales agents as principals for their own accounts. The ~~Sales Agents~~sales agents and forward sellers are entitled to compensation in an agreed amount not to exceed 2.0 percent of the gross price per share for any shares sold under the December 2021 Sales Agreement. ~~Through March 31,~~We simultaneously terminated our prior sales agreement upon entering into the December 2021 ~~we have sold shares of our common stock for gross proceeds of $163.8 million under the~~ Sales Agreement. ~~There were no issuances~~

We entered into forward sales agreements with respect to 600,503 shares of common stock under our at the ~~Sales Agreement~~market offering program for $107.9 million during the three months ended March 31, ~~2021 or~~2022. These forward sale agreements were not settled as of March 31, 2022, but we expect to settle them by the end of March 2023. We also entered into forward sale agreements with respect to 1,820,109 shares of common stock under our at the market offering program for $356.5 million during the year ended December 31, ~~2020.~~2021. These forward sale agreements were not settled as of March 31, 2022, but we expect to settle them by the end of September 2022. Refer to Note 19, "Subsequent Events," for information regarding the settlement of certain of the forward sale agreements outstanding under our at the market offering program after March 31, 2022.

Issuances of ~~Common Stock and~~ Common OP Units in Connection with the Acquisition of Certain Properties

~~In December 2020, in connection with the acquisition~~Issuances of ~~the Rybovich Portfolio, we issued 130,475~~ Common OP ~~units.~~Units

Three Months Ended March 31, 2022

Common OP Units Issued

Related Acquisition

February 2022

14,683

Jarrett Bay Boatworks

~~In October 2020, in connection with the acquisition of Safe Harbor, we issued 55,403 Common OP units.~~Conversions

~~In May 2020, in connection with~~Conversions to Common Stock - Subject to certain limitations, holders can convert certain series of OP units to shares of our common stock at any time. Below is the ~~acquisition~~activity of ~~the Forest Springs community, we issued 82,420 Common OP units.~~

~~Equity Interests - SHM South Fork JV, LLC~~

In October 2020, in conjunction with the acquisition of Safe Harbor, we indirectly acquired $4.3 million of Safe Harbor's equity interest in SHM South Fork JV, LLC, a joint venture created for the purpose of acquiring land and constructing a marina in Fort Lauderdale, Florida. The Safe Harbor Equity Interests - SHM South Fork JV, LLC balance was $4.1 million and $4.3 million atconversions during the three months ended March 31, ~~2021~~2022 and ~~the year December 31, 2020, respectively. Refer to Note 7, "Consolidated Variable Interest Entities," for additional information.~~2021:

~~Issuance of Series E Preferred OP Units~~


		Three Months Ended		Three Months Ended
		March 31, 2022		March 31, 2021
Series	Conversion Rate	Units / Shares Converted	Common Stock(1)	Units / Shares Converted	Common Stock(1)
Common OP units	1.0000	1,260	1,260	24,912	24,912
Series A-1 preferred OP units	2.4390	2,694	6,568	4,316	10,525


Series C preferred OP units	1.1100	150	166	—	—
Series E preferred OP units	0.6897	5,000	3,448	—	—

(1)Calculation may yield minor differences due to rounding incorporated in the above numbers.

In January 2020, we issued 90,000 Series E preferred OP units in connection with the acquisition of Cape Cod RV Resort. The Series E preferred OP units have a stated issuance price of $100.00 per OP Unit and carry a preferred return of 5.25 percent until the second anniversary of the issuance date. Commencing with the second anniversary of the issuance date, the Series E Preferred OP Units carry a preferred return of 5.50 percent. Commencing the first anniversary of the issuance date, subject to certain limitations, each Series E Preferred OP Unit can be exchanged for our common stock equal to the quotient obtained by dividing $100.00 by $145.00 (as such ratio is subject to adjustments for certain capital events). As of March 31, 2021, 90,000 Series E preferred OP Units were outstanding. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional information.

~~Temporary Equity:~~

~~Issuance of Series I Preferred OP Units~~ - In December 2020, we issued 922,000 Series I preferred OP units in connection with the acquisition of the Rybovich Portfolio. The Series I preferred OP units have a stated issuance price of $100.00 per OP unit and carry a preferred return of 3.0 percent. Subject to certain limitations, at any time after the Series I issuance date, each Series I preferred OP unit can be exchanged for a number of shares of our common stock equal to the quotient obtained by dividing $100.00 by $164.00 (as such ratio is subject to adjustments for certain capital events) at the holder's option. Each holder may require redemption in cash after the fifth anniversary of the Series I issuance date or upon the holder's death. As of March 31, 2021, 922,000 Series I preferred OP units were outstanding. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional information.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

~~Issuance of Series H Preferred OP Units~~ - In October 2020, we issued 581,407 Series H preferred OP units in connection with the acquisition of Safe Harbor. The Series H preferred OP units have a stated issuance price of $100.00 per OP unit and carry a preferred return of 3.0 percent. Subject to certain limitations, at any time after the Series H issuance date, each Series H preferred OP unit can be exchanged for a number of shares of our common stock equal to the quotient obtained by dividing $100.00 by $164.00 (as such ratio is subject to adjustments for certain capital events) at the holder's option. Each holder may require redemption in cash after the fifth anniversary of the Series H issuance date or upon the holder's death. As of March 31, 2021, 581,407 Series H preferred OP units were outstanding. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional information.

~~Equity Interests - FPG Sun Menifee 80 LLC~~ - In October 2020, in connection with investment in land for future development in the city of Menifee in California, at the property known as FPG Sun Menifee 80, LLC, Foremost Pacific Group, LLC, "FPG," purchased $0.1 million of common equity interest in the land (referred to as "Equity Interests - FPG Sun Menifee 80 LLC"). The Equity Interests - FPG Sun Menifee 80 LLC do not have a fixed maturity date. Upon the occurrence of certain events, either FPG or Sun FPG Venture LLC, our subsidiary, can trigger a process under which we may be required to purchase the Equity Interests - FPG Sun Menifee 80 LLC from FPG. The Equity Interests - FPG Sun Menifee 80 LLC balance was $0.1 million at the three months ended March 31, 2021 and December 31, 2020. Refer to Note 7, "Consolidated Variable Interest Entities," for additional information.

~~Issuance of Series G Preferred OP Units~~ - In September 2020, we issued 260,710 Series G preferred OP units in connection with the acquisition of El Capitan & Ocean Mesa Resorts. The Series G preferred OP units have a stated issuance price of $100.00 per OP unit and carry a preferred return of 3.2 percent. Subject to certain limitations, at any time after the Series G issuance date, each Series G preferred OP unit can be exchanged for a number of shares of our common stock equal to the quotient obtained by dividing $100.00 by $155.00 (as such ratio is subject to adjustments for certain capital events) at the holder's option. Each holder may require redemption in cash after the fifth anniversary of the Series G issuance date or upon the holder's death. As of March 31, 2021, 240,710 Series G preferred OP units were outstanding. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional information.

~~Issuance of Series F Preferred OP Units~~ - In May 2020, we issued 90,000 Series F preferred OP units in connection with the acquisition of Forest Springs. The Series F preferred OP units have a stated issuance price of $100.00 per OP unit and carry a preferred return of 3.0 percent. Subject to certain limitations, at any time after the Series F issuance date, each Series F preferred OP unit can be exchanged for a number of shares of our common stock equal to the quotient obtained by dividing $100.00 by $160.00 (as such ratio is subject to adjustments for certain capital events) at the holder's option. Each holder may require redemption in cash after the fifth anniversary of the Series F issuance date or upon the holder's death. As of March 31, 2021, 90,000 Series F preferred OP units were outstanding. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional information.

~~Equity Interests - NG Sun Whitewater LLC~~ - In August 2019, in connection with the investment in land at the property known as Whitewater, NG Sun Whitewater LLC purchased $2.4 million of common equity interest in Sun NG Whitewater RV Resorts LLC (referred to as "Equity Interests - NG Sun Whitewater LLC"). The Equity Interests - NG Sun Whitewater LLC does not have a fixed maturity date. Upon the occurrence of certain events, either NG Sun Whitewater LLC or Sun NG LLC, our subsidiary, can trigger a process under which we may be required to purchase the Equity Interests - NG Sun Whitewater LLC from NG Sun Whitewater LLC. The Equity Interests - NG Sun Whitewater LLC balance was $5.1 million at the three months ended March 31, 2021 and year ended December 31, 2020. Refer to Note 7, "Consolidated Variable Interest Entities," for additional information.

~~Issuance of Series D Preferred OP Units~~ - In February 2019, we issued 488,958 Series D preferred OP units in connection with the acquisition of Country Village Estates. The Series D preferred OP units have a stated issuance price of $100.00 per OP unit and carry a preferred return of 3.75 percent until the second anniversary of the issuance date. Commencing with the second anniversary of the issuance date, the Series D preferred OP units carry a preferred return of 4.0 percent. Commencing with the first anniversary of the issuance date, each Series D preferred OP unit can be exchanged for our common stock equal to the quotient obtained by dividing $100.00 by $125.00 (as such ratio is subject to adjustments for certain capital events) at the holder's option. The holders may require redemption in cash after the fifth anniversary of the Series D issuance date or upon the holder's death. As of March 31, 2021, 488,958 Series D preferred OP units were outstanding. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for additional information.

~~SUN COMMUNITIES, INC.~~

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

~~(Unaudited)~~

~~Equity Interests - NG Sun LLC~~ - In June 2018, in connection with the investment in Sun NG Resorts, unrelated third parties purchased $6.5 million of Series B preferred equity interests and $15.4 million of common equity interest in Sun NG Resorts (herein jointly referred to as "Equity Interest - NG Sun LLC"). In April and September 2020, in connection with the acquisitions of Glen Ellis RV Park and Lone Star RV Park, $3.0 million of Series B preferred equity interests were converted to common equity interests. The Series B preferred equity interests carry a preferred return at a rate that, at any time, is equal to the interest rate on Sun NG Resorts' indebtedness at such time. The current rate of return is 5.0 percent. The Equity Interests - NG Sun LLC does not have a fixed maturity date and can be redeemed in the fourth quarters of 2024, 2025 and 2026 at the holders' option. Sun NG LLC, our subsidiary, has the right during certain periods each year, with or without cause, or for cause at any time, to elect to buy NG Sun LLC's interest. During a limited period in 2022, NG Sun LLC has the right to put its interest to Sun NG LLC. If either party exercises their option, the property management agreement will be terminated, and we are required to purchase the remaining interests of NG Sun LLC and the property management agreement at fair value. Refer to Note 7, "Consolidated Variable Interest Entities," and Note 8, "Debt and Lines of Credit," for additional information.

~~Conversions~~

~~Conversions to Common Stock~~ - Subject to certain limitations, holders can convert certain series of stock and OP units to shares of our common stock at any time. Below is the activity of conversions during the three months ended March 31, 2021 and 2020:

Three Months Ended Three Months Ended
March 31, 2021 March 31, 2020
Series Conversion Rate Units / Shares Converted
Common Stock(1)
Units / Shares Converted
Common Stock(1)
Common OP unit 1.0000 24,912 24,912 11,949 11,949
Series A-1 preferred OP unit 2.4390 4,316 10,525 6,677 16,283

~~(1)Calculation may yield minor differences due to rounding incorporated in the above numbers.~~

Distributions

Distributions declared for the three months ended March 31, ~~2021~~2022 were as follows:

Distributions Record Date Payment Date Distribution Per Share Total Distribution (in Thousands)
Common Stock, Common OP units and Restricted Stock 3/31/2021 4/15/2021 $ 0.83 $ 94,966

Common Stock, Common OP units and Restricted Stock Distributions

Record Date

Payment Date

Distribution Per Share

Total Distribution (in Millions)

March 31, 2022

3/31/2022

4/15/2022

0.88

104.5

~~SUN COMMUNITIES, INC.~~Refer to Note 19, "Subsequent Events," for information regarding equity transactions completed after March 31, 2022.

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

~~(Unaudited)~~

10. Share-Based Compensation

As of March 31, ~~2021,~~2022, we had 2 share-based compensation plans: the Sun Communities, Inc. 2015 Equity Incentive Plan ("2015 Equity Incentive Plan") and the First Amended and Restated 2004 Non-Employee Director Option Plan ("2004 Non-Employee Director Option Plan"). We believe granting equity awards will provide certain executives, key employees and directors additional incentives to promote our financial success and promote employee and director retention by providing an opportunity to acquire or increase the direct proprietary interest of those individuals in our operations and future. Time based awards for directors generally vest over three years. Time based awards for key employees and executives generally vest over five years. Market condition awards for the executives generally vest after three years.

During the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, shares were granted as follows:


Grant Period	Grant Period	Type	Plan	Shares Granted		Grant Date Fair Value Per Share			Vesting Type	Vesting Anniversary	Percentage		Grant Period	Type	Plan	Shares Granted	Grant Date Fair Value Per Share			Vesting Type
2022													2022	Key Employees	2015 Equity Incentive Plan	138,510	$	180.49	(1)	Time Based
2022													2022	Executive Officers	2015 Equity Incentive Plan	66,000	$	178.20	(1)	Time Based
2022													2022	Executive Officers	2015 Equity Incentive Plan	91,500	$	124.88	(2)	Market Condition	(3)
2022													2022	Directors	2004 Non-Employee Director Option Plan	11,900	$	197.00	(1)	Time Based
2021	2021	Executive Officers	2015 Equity Incentive Plan	54,000		$	151.89	(1)	Time Based	20.0% annually over 5 years			2021	Key Employees	2015 Equity Incentive Plan	90,406	$	146.03	(1)	Time Based
2021	2021	Executive Officers	2015 Equity Incentive Plan	81,000	(2)	$	99.49	(2)	Market Condition	3rd	100.0	%	2021	Executive Officers	2015 Equity Incentive Plan	72,400	$	151.67	(1)	Time Based
2021	2021	Executive Officers	2015 Equity Incentive Plan	15,000		$	151.89	(1)	Time Based	33.3% annually over 3 years			2021	Executive Officers	2015 Equity Incentive Plan	101,100	$	93.41	(2)	Market Condition	(3)
2021	2021	Executive Officers	2015 Equity Incentive Plan	15,000	(3)	$	99.49	(3)	Market Condition	3rd	100.0	%	2021	Directors	2004 Non-Employee Director Option Plan	11,709	$	179.64	(1)	Time Based
2021		Key Employees	2015 Equity Incentive Plan	28,856		$	151.89	(1)	Time Based	33.3% annually over 3 years
2021		Key Employees	2015 Equity Incentive Plan	61,550		$	143.28	(1)	Time Based	20.0% annually over 5 years
2021		Executive Officers	2015 Equity Incentive Plan	3,400		$	147.19	(1)	Time Based	20.0% annually over 5 years
2021		Executive Officers	2015 Equity Incentive Plan	5,100	(4)	$	96.41	(4)	Market Condition	3rd	100.0	%
2021		Directors	2004 Non-Employee Director Option Plan	1,509		$	147.19	(1)	Time Based	3rd	100.0	%
2021		Directors	2004 Non-Employee Director Option Plan	10,200		$	148.44	(1)	Time Based	3rd	100.0	%
2020		Key Employees	2015 Equity Incentive Plan	13,873		$	140.39	(1)	Time Based	20.0% annually over 5 years
2020		Executive Officers	2015 Equity Incentive Plan	69,368		$	137.63	(1)	Time Based	20.0% annually over 5 years
2020		Key Employees	2015 Equity Incentive Plan	1,500		$	143.20	(1)	Time Based	20.0% annually over 5 years
2020		Key Employees	2015 Equity Incentive Plan	51,790		$	162.42	(1)	Time Based	20.0% annually over 5 years
2020		Executive Officers	2015 Equity Incentive Plan	46,000		$	165.97	(1)	Time Based	20.0% annually over 5 years
2020		Executive Officers	2015 Equity Incentive Plan	69,000	(5)	$	125.47	(5)	Market Condition	3rd	100.0	%
2020		Directors	2004 Non-Employee Director Option Plan	10,200		$	147.97	(1)	Time Based	3rd	100.0	%

(1)~~The~~Represents the weighted average fair ~~values~~value per share of the ~~grants were determined by using the average~~ closing price of our common stock on the dates the shares were ~~issued.~~awarded.

(2)~~Share-based compensation for restricted stock awards with market conditions is measured based on an estimate of shares expected to vest. We estimate~~Represents the weighted average fair value per share of ~~share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. At the grant date our common stock price was $151.89. Based on~~ the Monte Carlo simulation ~~we expect 65.5 percent~~fair value price of our market condition awards on the ~~81,000~~dates the shares ~~to vest.~~were awarded.

(3)Share-based compensation for restricted stock awards with market conditions is measured based on ~~an estimate of~~ shares expected to ~~vest. We estimate the fair value of share-based compensation for restricted stock with market conditions~~vest using a Monte Carlo ~~simulation. At the grant date our common stock price was $151.89. Based on the Monte Carlo~~ simulation ~~we expect 65.5 percent of the 15,000 shares~~ to ~~vest.~~

~~(4)Share-based compensation for restricted stock awards with market conditions is measured based on an estimate of shares expected to vest. We estimate the~~determine fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. At the grant date our common stock price was $147.19. Based on the Monte Carlo simulation we expect 65.5 percent of the 5,100 shares to vest.value.

~~(5)~~Share-based compensation for restricted stock awards with market conditions is measured based on an estimate of shares expected to vest. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. At the grant date our common stock price was $165.97. Based on the Monte Carlo simulation we expect 75.6 percent of the 69,000 shares to vest.

~~Vesting~~

The vesting requirements for ~~252,153~~230,411 and ~~144,231~~252,153 restricted shares granted to our executives, directors and employees were satisfied during the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively.

~~Stock Options~~

During the three months ended March 31, 2021, 1,500 shares of common stock were issued in connection with the exercise of stock options with net proceeds of less than $0.1 million. There were no stock options outstanding as of March 31, 2021. During the ~~three months ended March 31, 2020, no stock options were exercised.~~

2321

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

11. Segment Reporting

ASC Topic 280, "Segment Reporting" ("ASC 280"), establishes standards for the way the business enterprises report information about operating segments in its financial statements. ~~Effective January~~As described in Note 1, ~~2021,~~ "Basis of Presentation,"we ~~transitioned from a two-segment to a three-segment structure as a result of~~analyze our operating results through the recent acquisition of Safe Harbor and its internal organization. The new structure reflects how the chief operating decision maker manages the business, makes operating decisions, allocates resources and evaluates operating performance. This structure better align our operations with our strategic initiatives. Beginning with the results of the three months ended March 31, 2021, we are reporting our financial results consistent with our new segment structure and have recast prior comparative periods to align with the new segment structure. Our new structure aligns our Company around 3 reportablefollowing segments: (i) Manufactured home ("MH") communities, (ii) Recreational vehicle ("RV") resorts and (iii) ~~Marinas.~~Marina.

The MH segment owns, operates, develops, or has an interest in, a portfolio of MH communities throughout the U.S. and the UK, and is in the business of acquiring, operating and developing ground up MH communities to provide affordable housing solutions to residents. The MH segment also provides manufactured home sales and leasing services to tenants and prospective tenants of our communities.

The RV segment owns, operates, develops, or has an interest in, a portfolio of RV resorts and is in the business of acquiring, operating and developing ground up RV resorts throughout the U.S. and in Canada. It also provides leasing services for vacation rentals within the RV resorts.

The ~~Marinas~~Marina segment owns, operates, ~~has an interest in a portfolio,~~ and develops marinas, and is in the business of acquiring and operating marinas throughout the U.S., with the majority of such marinas concentrated in coastal regions, and others located in various inland ~~regions.~~regions and Puerto Rico.

~~Hybrid properties~~Properties containing both MH and RV sites are classified to a segment based on the predominant site counts at the properties.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

A presentation of segment financial information is summarized as follows (in ~~thousands)~~millions):

Three Months Ended
March 31, 2021
March 31, 2020(1)
MH RV Marinas Consolidated MH RV Marinas Consolidated
Operating revenues $ 245,474 $ 92,363 $ 95,587 $ 433,424 $ 221,161 $ 82,878 N/A $ 304,039
Property operating expenses 97,024 51,763 64,195 212,982 85,072 42,659 N/A 127,731
Net Operating Income $ 148,450 $ 40,600 $ 31,392 $ 220,442 $ 136,089 $ 40,219 N/A $ 176,308
Adjustments to arrive at net income / (loss)
Interest income 2,631 2,350
Brokerage commissions and other revenues, net 5,960 3,913
General and administrative expense (38,203) (25,349)
Catastrophic event-related charges, net (2,414) (606)
Business combination expense (1,232) 0
Depreciation and amortization (123,304) (83,689)
Loss on extinguishment of debt (see Note 8) 0 (3,279)
Interest expense (39,517) (32,416)
Interest on mandatorily redeemable preferred OP units / equity (1,036) (1,041)
(Gain) / loss on remeasurement of marketable securities 3,661 (28,647)
Gain / (loss) on foreign currency translation 25 (17,479)
Other expense, net (1,099) (972)
(Gain) / loss on remeasurement of notes receivable 376 (2,112)
Income from nonconsolidated affiliates (see Note 6) 1,171 52
Loss on remeasurement of investment in nonconsolidated affiliates 104 (2,191)
Current tax benefit / (expense) 229 (450)
Deferred tax benefit (see Note 12) 147 130
Net Income / (Loss) 27,941 (15,478)
Less: Preferred return to preferred OP units / equity 2,864 1,570
Less: Income / (Loss) attributable to noncontrolling interests 295 (962)
Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders $ 24,782 $ (16,086)


	Three Months Ended
	March 31, 2022								March 31, 2021
	MH		RV		Marina		Consolidated		MH		RV		Marina		Consolidated
Operating revenues	$	269.1	$	116.7	$	147.9	$	533.7	$	245.5	$	92.3	$	95.6	$	433.4
Operating expenses / Cost of sales	107.4		67.1		97.3		271.8		97.1		51.7		64.2		213.0
NOI	$	161.7	$	49.6	$	50.6	$	261.9	$	148.4	$	40.6	$	31.4	$	220.4
Adjustments to arrive at net income
Interest income							6.8								2.6
Brokerage commissions and other revenues, net							8.0								6.0

General and administrative expense							(55.7)								(38.2)
Catastrophic event-related charges, net							—								(2.4)
Business combination expense, net							(0.5)								(1.2)
Depreciation and amortization							(148.5)								(123.9)

Loss on extinguishment of debt (see Note 8)							(0.3)								—
Interest expense							(45.2)								(39.5)
Interest on mandatorily redeemable preferred OP units / equity							(1.0)								(1.0)
Gain / (loss) on remeasurement of marketable securities							(34.5)								3.7
Loss on foreign currency translation							(2.2)								—
Gain on dispositions of properties							13.4								—
Other expense, net							(0.6)								(0.5)
Gain on remeasurement of notes receivable							0.2								0.4
Income from nonconsolidated affiliates (see Note 6)							0.9								1.2
Gain on remeasurement of investment in nonconsolidated affiliates							0.1								0.1
Current tax benefit / (expense)							(1.3)								0.2
Deferred tax benefit							—								0.1
Net Income							1.5								28.0
Less: Preferred return to preferred OP units / equity interests							3.0								2.9
Less: Income / (loss) attributable to noncontrolling interests							(2.2)								0.3



Net Income Attributable to Sun Communities, Inc. Common Shareholders							$	0.7							$	24.8

~~(1)~~ ~~Recast to reflect segment changes.~~


	March 31, 2022								December 31, 2021
	MH		RV		Marina		Consolidated		MH		RV		Marina		Consolidated
Identifiable Assets
Investment property, net	$	5,331.8	$	3,665.8	$	2,706.2	$	11,703.8	$	5,172.2	$	3,639.0	$	2,614.3	$	11,425.5
Cash, cash equivalents and restricted cash	52.0		31.9		18.7		102.6		36.7		19.9		21.6		78.2
Marketable securities	102.5		55.8		—		158.3		121.0		65.9		—		186.9
Inventory of manufactured homes	57.6		5.7		—		63.3		44.3		6.8		—		51.1
Notes and other receivables, net	395.5		68.0		50.1		513.6		374.2		55.5		39.9		469.6
Goodwill	—		9.5		503.2		512.7		—		—		495.4		495.4
Other intangible assets, net	25.2		36.9		272.1		334.2		27.4		22.7		256.7		306.8
Other assets, net	227.7		63.7		234.3		525.7		198.0		63.6		219.0		480.6
Total Assets	$	6,192.3	$	3,937.3	$	3,784.6	$	13,914.2	$	5,973.8	$	3,873.4	$	3,646.9	$	13,494.1

March 31, 2021
December 31, 2020 (1)
MH RV Marinas Consolidated MH RV Marinas Consolidated
Identifiable Assets
Investment property, net $ 4,828,033 $ 3,187,398 $ 1,895,719 $ 9,911,150 $ 4,823,174 $ 3,038,686 $ 1,853,931 $ 9,715,791
Cash, cash equivalents and restricted cash 71,119 38,695 10,360 120,174 53,152 28,919 10,570 92,641
Marketable securities 82,781 45,040 0 127,821 80,776 43,950 0 124,726
Inventory of manufactured homes 30,534 12,708 0 43,242 33,448 13,195 0 46,643
Notes and other receivables, net 149,187 56,264 43,558 249,009 144,027 44,002 33,621 221,650
Goodwill 0 0 438,842 438,842 0 0 428,833 428,833
Other intangible assets, net 31,762 24,287 244,505 300,554 33,998 23,819 247,794 305,611
Other assets, net 155,201 39,198 69,018 263,417 184,917 38,075 47,699 270,691
Total Assets $ 5,348,617 $ 3,403,590 $ 2,702,002 $ 11,454,209 $ 5,353,492 $ 3,230,646 $ 2,622,448 $ 11,206,586

~~(1)~~ ~~Recast to reflect segment changes~~

2523

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

12. Income Taxes

We have elected to be taxed as a real estate investment trust ("REIT") pursuant to Section 856(c) of the Internal Revenue Code of 1986, as amended ("Code"). In order for us to qualify as a REIT, at least 95 percent of our gross income in any year must be derived from qualifying sources. In addition, a REIT must distribute annually at least 90 percent of its REIT taxable income (calculated without any deduction for dividends paid and excluding capital gain) to its ~~stockholders~~shareholders and meet other tests.

Qualification as a REIT involves the satisfaction of numerous requirements (on an annual and quarterly basis) established under highly technical and complex Code provisions for which there are limited judicial or administrative interpretations and involves the determination of various factual matters and circumstances not entirely within our control. In addition, frequent changes occur in the area of REIT taxation, which requires us to continually monitor our tax status. We analyzed the various REIT tests and confirmed that we continued to qualify as a REIT for the three months ended March 31, ~~2021.~~2022.

As a REIT, we generally will not be subject to United States ("U.S.") federal income taxes at the corporate level on the ordinary taxable income we distribute to our ~~stockholders~~shareholders as dividends. If we fail to qualify as a REIT in any taxable year, our taxable income could be subject to U.S. federal income tax at regular corporate rates. Even if we qualify as a REIT, we may be subject to certain state and local income taxes as well as U.S. federal income and excise taxes on our undistributed income. In addition, taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to federal, state and local income taxes. We are also subject to local income taxes in Canada ~~as a result of the acquisition in 2016 of~~and Puerto Rico due to certain properties located in ~~Canada.~~Canada and one located in Puerto Rico. We do not provide for withholding taxes on our undistributed earnings from our Canadian subsidiaries as they are reinvested and will continue to be reinvested indefinitely outside of the U.S. However, we are subject to Australian withholding taxes on distributions from our investment in Ingenia Communities Group.

Deferred tax assets and liabilities reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and the basis of such assets and liabilities as measured by tax laws. Deferred tax assets are reduced, if necessary, by a valuation allowance to the amount where realization is more likely than not assured after considering all available evidence. Our temporary differences primarily relate to net operating loss carryforwards, and depreciation and basis differences between tax and GAAP. Our deferred tax assets that have a full valuation allowance relate to our taxable REIT subsidiaries. Net deferred tax liabilities of ~~$20.4 million and $20.6~~$20.7 million for Canadian entities have been recorded in relation to corporate entities and included in ~~other~~Other liabilities in our Consolidated Balance Sheets as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. ~~There are~~We had no U.S. federal deferred tax ~~assets or~~ liabilities as of March 31, 2022. U.S. federal deferred tax liabilities of $0.1 million have been recorded and included in our Consolidated Balance Sheets as of ~~March 31, 2021 and~~ December 31, ~~2020.~~2021.

We had 0no unrecognized tax benefits as of March 31, ~~2021~~2022 and ~~2020.~~2021. We do not expect significant changes in tax positions that would result in unrecognized tax benefits within one year of March 31, ~~2021.~~2022.

For the three months ended March 31, 2022, we recorded a current tax expense for federal, state and Canadian income taxes as well as Australian withholding taxes of $1.3 million. For the three months ended March 31, 2021, we recorded a current tax benefit for federal, state and Canadian income taxes ~~and Australian withholding~~ ~~taxes~~ of $0.2 ~~million.~~ ~~For the three months ended March 31, 2020 we recorded a current tax expense for federal, state and Canadian income taxes of $0.5~~ million.

For the three months ended March 31, 2021 ~~and 2020~~, we recorded a deferred tax ~~benefi~~benefit of ~~t of $147.0 thousand and $130.0 thousand~~$0.1 million.~~, respectively.~~

~~SUN COMMUNITIES, INC.~~

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

~~(Unaudited)~~

13. Earnings Per Share

Earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period on a basic and diluted basis. We calculate diluted earnings per share using the more dilutive of the treasury stock method and the two-class ~~method.~~method for stock option and restricted common shares, the treasury stock method for forward equity sales and the if converted method for convertible units.

From time to time, we enter into forward equity sales agreements, which are discussed in Note 9, "Equity and Temporary ~~Equity,~~Equity." We considered the potential dilution resulting from the forward equity sales agreements on the ~~EPS~~earnings per share calculations. At inception, the agreements do not have an effect on the computation of basic ~~EPS~~earnings per share as no shares are delivered unless and until there is a physical settlement. ~~The common~~Common shares issued upon the physical settlement of the forward equity sales agreements, weighted for the period these common shares are outstanding, are ~~usually~~ included in the denominator of basic ~~EPS.~~earnings per share. To determine the dilution resulting from the forward equity sales agreements during the period of time prior to settlement, we calculate the number of weighted-average shares outstanding –- diluted.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Our potentially dilutive securities include our potential common shares related to our forward equity offerings, our unvested restricted common shares, and our Operating Partnership outstanding common OP units, Series A-1 preferred OP units, Series A-3 preferred OP units, Series C preferred OP units, Series D preferred OP units, Series E preferred OP units, Series F preferred OP units, Series G preferred OP units, Series H preferred OP units, Series I preferred OP units, Series J preferred OP units and Aspen preferred OP Units, which, if converted or exercised, may impact dilution.

Diluted earnings per share considers the impact of potentially dilutive securities except when the potential common shares have an antidilutive effect. Our unvested restricted stock common shares contain rights to receive non-forfeitable ~~dividends~~distributions and participate equally with common stock with respect to ~~dividends~~distributions issued or declared, and thus, are participating securities, requiring the two-class method of computing earnings per share. The two-class method determines earnings per share by dividing the sum of distributed earnings to common stockholders and undistributed earnings allocated to common stockholders by the weighted average number of shares of common stock outstanding for the period. In calculating the two-class method, undistributed earnings are allocated to both common shares and participating securities based on the weighted average number of shares outstanding during the period. The two-class method determines earnings per share by (1) dividing the sum of distributed earnings allocated to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of shares of common stock outstanding for the period; and (2) dividing the sum of distributed earnings allocated to participating securities and undistributed earnings allocated to participating securities by the weighted average number of shares of participating securities for the period. The remaining ~~potential~~potentially dilutive common shares do not contain rights to ~~dividends~~distributions and are included in the computation of diluted earnings per share.

Computations of basic and diluted earnings per share were as follows (in ~~thousands,~~millions, except for per share data):

Three Months Ended
March 31, 2021 March 31, 2020
Numerator
Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders $ 24,782 $ (16,086)
Less: allocation to restricted stock awards 152 (254)
Basic earnings - Net Income / (Loss) attributable to common stockholders after allocation to restricted stock awards $ 24,630 $ (15,832)
Add allocation to restricted stock awards 0 0
Diluted earnings - Net Income / (Loss) attributable to common stockholders after allocation to restricted stock awards(1)
$ 24,630 $ (15,832)


	Three Months Ended
	March 31, 2022		March 31, 2021
Numerator
Net Income Attributable to Sun Communities, Inc. Common Shareholders	$	0.7	$	24.8
Less: allocation to restricted stock awards	—		0.2
Basic earnings - Net Income attributable to common shareholders after allocation to restricted stock awards	$	0.7	$	24.6



Diluted earnings - Net Income attributable to common shareholders after allocation to common and preferred OP units(1)	$	0.7	$	24.6

Denominator
Weighted average common shares outstanding 107,932 92,410
Add: common shares dilutive effect: March 2021 Forward Equity Offering 229 0
Add: dilutive stock options 0 1
Diluted weighted average common shares and securities(1)
108,161 92,411
Earnings Per Share Available to Common Stockholders After Allocation
Basic earnings / (losses) per share $ 0.23 $ (0.17)
Diluted earnings / (losses) per share(1)
$ 0.23 $ (0.17)


Denominator
Weighted average common shares outstanding	115.3		107.9
Add: common shares dilutive effect: Forward Equity Offering	0.2		0.3

Add: dilutive restricted stock	0.4		—
Add: common and preferred OP units dilutive effect	—		—
Diluted weighted average common shares and securities	115.9		108.2
Earnings Per Share Available to Common Shareholders After Allocation
Basic earnings per share	$	0.01	$	0.23
Diluted earnings per share	$	0.01	$	0.23

~~(1)~~ For the three months ended March 31, 2021 and 2020, diluted earnings per share was calculated using the two-class method as the application of this method resulted in a more dilutive earnings per share for those periods.

2725

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

We have excluded ~~certain~~all convertible securities from the computation of diluted earnings per share because the inclusion of those securities would have been anti-dilutive for the periods presented. The following table presents the outstanding securities that were excluded from the computation of diluted earnings per share as of March 31, ~~2021~~2022 and ~~2020~~2021 (in thousands):


		As of			Three Months Ended
		March 31, 2021	March 31, 2020		March 31, 2022	March 31, 2021
Common OP units	Common OP units	2,596	2,408	Common OP units	2,551	2,582
A-1 preferred OP units	A-1 preferred OP units	716	303	A-1 preferred OP units	272	290
A-3 preferred OP units	A-3 preferred OP units	75	40	A-3 preferred OP units	40	40

Aspen preferred OP units	Aspen preferred OP units	406	1,284	Aspen preferred OP units	1,284	1,284

Series C preferred OP units	Series C preferred OP units	340	310	Series C preferred OP units	306	306
Series D preferred OP units	Series D preferred OP units	391	489	Series D preferred OP units	489	489
Series E preferred OP units	Series E preferred OP units	62	90	Series E preferred OP units	85	90
Series F preferred OP units	Series F preferred OP units	56	0	Series F preferred OP units	90	90
Series G preferred OP units	Series G preferred OP units	155	0	Series G preferred OP units	241	241
Series H preferred OP units	Series H preferred OP units	355	0	Series H preferred OP units	581	581
Series I preferred OP units	Series I preferred OP units	562	0	Series I preferred OP units	922	922
Series J preferred OP units				Series J preferred OP units	240	—
Total Securities	Total Securities	5,714	4,924	Total Securities	7,101	6,915

14. ~~14.~~ Derivative Financial Instruments

Our objective and strategy in using interest rate derivatives is to manage exposure to interest rate movements, thereby minimizing the effect of interest rate changes and the effect they could have on future cash outflows (forecasted interest payments) on a forecasted issuance of long-term debt. Treasury locks are used to accomplish this objective. We do not enter into derivative instruments for speculative purposes.

We have designated the treasury lock contracts as cash flow hedges under ASC Topic 815, "Derivatives and Hedging." The risk being hedged is the interest rate risk related to forecasted transactions and the benchmark interest rate used is the on-the-run 10-year U.S. Treasury rate. As of March 31, 2022, we had 4 Treasury lock contracts with an aggregate notional amount of $600.0 million that were designated as cash flow hedges of interest rate risk. The unrealized gains or losses on the Treasury lock contracts were recorded in Accumulated other comprehensive income within the Consolidated Balance Sheets, and will be reclassified into earnings in the same period during which the hedged transaction affects earnings. These unrealized gains or losses will be amortized as reduction or increase to Interest expense within the Consolidated Statements of Operations.

The following table presents the gross fair value amounts of our derivative financial instruments and the associated notional amounts (in millions):


	March 31, 2022						December 31, 2021
Derivatives designated as cash flow hedges	Notional		Fair Value of Assets(1)		Fair Value of Liabilities		Notional		Fair Value of Assets(1)		Fair Value of Liabilities
Interest rate derivatives	$	600.0	$	25.6	$	—	$	150.0	$	0.4	$	—

(1)Included within Other Assets, net on the Consolidated Balance Sheets.

As of March 31, 2022, the net accumulated gain on our interest rate derivatives before tax effect was $25.6 million. We estimate that $3.4 million will be reclassified as a reduction to interest expense over the next 12 months. The maximum length of time for which we will hedge our exposure to the variability in future cash flows is 10 years.

Refer to Note 15, "Fair Value of Financial Instruments," for additional information related to the fair value methodology used for derivative financial instruments.

Refer to Note 19, "Subsequent Events," for information regarding derivative transactions completed after March 31, 2022.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

15. Fair Value of Financial Instruments

Our financial instruments consist primarily of cash, cash equivalents and restricted cash, marketable securities, notes and other receivables, derivatives assets, debt, warrant, and other liabilities. We utilize fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures, pursuant to ~~FASB~~ ASC 820, "Fair Value Measurements and Disclosures." The following methods and assumptions were used in order to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

ASC ~~Topic~~ 820, "Fair Value Measurements and Disclosures," requires disclosure regarding determination of fair value for assets and liabilities and establishes a hierarchy under which these assets and liabilities must be grouped, based on significant levels of observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumption. This hierarchy requires the use of observable market data when available. These two types of inputs have created the following fair value hierarchy:

Level 1 - Quoted unadjusted prices for identical instruments in active markets that we have the ability to access;

Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severity, etc.) in active markets or can be corroborated by observable market data; and

Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The unobservable inputs reflect our assumptions about the assumptions that market participants would use.

2827

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Assets by Hierarchy Level

The table below sets forth our financial assets and liabilities (in ~~thousands)~~millions) that required disclosure of fair value on a recurring basis as of March 31, ~~2021.~~2022. The table presents the carrying values and fair values of our financial instruments as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, that were measured using the valuation techniques described above. The table excludes other financial instruments such as ~~cash and cash equivalents,~~ other receivables and accounts payable as the carrying values associated with these instruments approximate their fair value since their maturities are less than one year. These are classified as Level 1 in the hierarchy.


		As of
		March 31, 2021											March 31, 2022
Financial Assets	Financial Assets	Carrying Value		Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value		Financial Assets	Carrying Value		Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
Cash, cash equivalents and restricted cash												Cash, cash equivalents and restricted cash	$	102.6	$	102.6	$	—	$	—	$	102.6
Marketable securities	Marketable securities	$	127,821	$	127,821	$	0	$	0	$	127,821	Marketable securities	158.3		158.3		—		—		158.3
Installment notes receivable on manufactured homes, net	Installment notes receivable on manufactured homes, net	84,109		0		0		84,109		84,109		Installment notes receivable on manufactured homes, net	77.2		—		—		77.2		77.2

Notes receivable from real estate developers		58,286		0		0		58,286		58,286
Notes receivable from real estate developers and operators												Notes receivable from real estate developers and operators	304.4		—		—		304.4		304.4
Warrants												Warrants	0.6		—		—		0.6		0.6
Derivative assets												Derivative assets	25.6		—		25.6		—		25.6
Total assets measured at fair value	Total assets measured at fair value	$	270,216	$	127,821	$	0	$	142,395	$	270,216	Total assets measured at fair value	$	668.7	$	260.9	$	25.6	$	382.2	$	668.7

Financial Liabilities	Financial Liabilities											Financial Liabilities
Debt		$	3,500,332	$	0	$	3,500,332	$	0	$	3,428,244
Secured debt												Secured debt	$	3,366.6	$	—	$	3,366.6	$	—	$	3,226.1

Lines of credit and other debt		917,603		0		917,603		0		917,603
Other liabilities (contingent consideration)		18,156		0		0		18,156		18,156

Unsecured debt												Unsecured debt
Senior unsecured notes												Senior unsecured notes	1,186.7		—		1,186.7		—		1,089.0

Line of credit and other unsecured debt												Line of credit and other unsecured debt	1,523.2		—		1,523.2		—		1,523.2
Total unsecured debt												Total unsecured debt	2,709.9		—		2,709.9		—		2,612.2
Other financial liabilities (contingent consideration)												Other financial liabilities (contingent consideration)	20.2		—		—		20.2		20.2
Total liabilities measured at fair value	Total liabilities measured at fair value	$	4,436,091	$	0	$	4,417,935	$	18,156	$	4,364,003	Total liabilities measured at fair value	$	6,096.7	$	—	$	6,076.5	$	20.2	$	5,858.5


		As of Year Ended
		December 31, 2020											December 31, 2021
Financial Assets	Financial Assets	Carrying Value		Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value		Financial Assets	Carrying Value		Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value
Cash, cash equivalents and restricted cash												Cash, cash equivalents and restricted cash	$	78.2	$	78.2	$	—	$	—	$	78.2
Marketable securities	Marketable securities	$	124,726	$	124,726	$	0	$	0	$	124,726	Marketable securities	186.9		186.9		—		—		186.9
Installment notes receivable on manufactured homes, net	Installment notes receivable on manufactured homes, net	85,866		0		85,866		0		85,866		Installment notes receivable on manufactured homes, net	79.1		—		—		79.1		79.1

Notes receivable from real estate developers		52,638		0		52,638		0		52,638
Notes receivable from real estate developers and operators												Notes receivable from real estate developers and operators	284.0		—		—		284.0		284.0
Derivative assets												Derivative assets	0.4		—		0.4		—		0.4
Total assets measured at fair value	Total assets measured at fair value	$	263,230	$	124,726	$	138,504	$	0	$	263,230	Total assets measured at fair value	$	628.6	$	265.1	$	0.4	$	363.1	$	628.6

Financial Liabilities	Financial Liabilities											Financial Liabilities
Debt		$	3,514,879	$	0	$	3,514,879	$	0	$	3,613,797
Secured debt												Secured debt	$	3,380.7	$	—	$	3,380.7	$	—	$	3,405.9

Lines of credit and other debt		1,242,197		0		1,242,197		0		1,242,197
Other liabilities (contingent consideration)		15,842		0		0		15,842		15,842

Unsecured debt												Unsecured debt
Senior unsecured notes												Senior unsecured notes	1,186.4		—		1,186.4		—		1,201.8
Line of credit and other unsecured debt												Line of credit and other unsecured debt	1,104.7		—		1,104.7		—		1,104.7
Total unsecured debt												Total unsecured debt	2,291.1		—		2,291.1		—		2,306.5

Other financial liabilities (contingent consideration)(1)												Other financial liabilities (contingent consideration)(1)	20.2		—		—		20.2		20.2
Total liabilities measured at fair value	Total liabilities measured at fair value	$	4,772,918	$	0	$	4,757,076	$	15,842	$	4,871,836	Total liabilities measured at fair value	$	5,692.0	$	—	$	5,671.8	$	20.2	$	5,732.6

(1)Balance updated to include contingent consideration related to a marina acquisition. This contingent consideration was included within Other liabilities on the Consolidated Balance Sheets at December 31, 2021.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

We utilize fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The following methods and assumptions were used in order to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash, Cash Equivalents and Restricted Cash

The carrying values of cash, cash equivalents and restricted cash approximate their fair market values due to the short-term nature of the instruments. These are classified as Level 1 in the hierarchy.

Marketable Securities

Marketable securities held by us and accounted for under ~~the~~ ASC 321 "~~Investment~~Investments - Equity Securities" are measured at fair value. Any change in fair value is recognized in the Consolidated Statement of Operations in Gain / (loss) on Remeasurement of marketable securities in accordance with ASU 2016-01 "Financial Instruments - Overall (Subtopic 825-10): Recognition and measurement of financial assets and financial liabilities." The fair value is measured by the quoted unadjusted share price which is readily available in active markets (Level 1).

~~SUN COMMUNITIES, INC.~~

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

~~(Unaudited)~~

The change in the marketable securities balance is as follows (in ~~thousands)~~millions):


		As of		As of
		Three Months Ended		Year Ended			Three Months Ended		Year Ended
		March 31, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Beginning Balance	Beginning Balance	$	124,725	$	94,727	Beginning Balance	$	186.9	$	124.7
Additional purchase		0		11,757
Additional purchases						Additional purchases	—		35.5
Change in fair value measurement	Change in fair value measurement	3,578		6,132		Change in fair value measurement	(34.5)		33.4
Foreign currency translation adjustment	Foreign currency translation adjustment	(1,678)		10,138		Foreign currency translation adjustment	4.4		(9.2)
Dividend reinvestment, net of tax	Dividend reinvestment, net of tax	1,196		1,971		Dividend reinvestment, net of tax	1.5		2.5

Ending Balance	Ending Balance	$	127,821	$	124,725	Ending Balance	$	158.3	$	186.9

Installment Notes Receivable on Manufactured Homes

Installment notes receivable on manufactured homes are recorded at fair value and are measured using model-derived indicative pricing using primarily unobservable inputs, inclusive of default rates, interest rates and recovery rates (Level 3). Refer to Note 4, "Notes and Other Receivables," for additional information.

Notes Receivable from Real Estate Developers and Operators

Notes receivable from real estate developers and operators are recorded at fair value and are measured using model-derived indicative pricing using primarily unobservable inputs including interest rates and counterparty performance (Level 3). The carrying values of the notes generally approximate their fair market values either due to the nature of the note and / or the note being secured by underlying collateral and / or personal guarantees. Refer to Note 4, "Notes and Other Receivables," for additional information.

~~Long-Term Debt and Lines of Credit~~Derivative Assets- Interest Rate Derivatives

Interest rate derivatives are recorded at fair value and consist of Treasury locks. The fair value of ~~long-term~~the Treasury lock is measured using observable inputs based on the 10-year Treasury note rate (Level 2).

Secured Debt

Secured debt consists primarily of our mortgage term loans. The fair value of mortgage term loans is based on the estimates of management and on rates currently quoted, rates currently prevailing for comparable loans and instruments of comparable maturities (Level 2). Refer to Note 8, "Debt and ~~Lines~~Line of Credit," for additional information.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Unsecured Debt

Senior unsecured notes - the fair value of senior unsecured notes is based on the estimates of management and on rates currently quoted, rates currently prevailing for comparable loans and instruments of comparable maturities (Level 2). Refer to Note 8, "Debt and Line of Credit," for additional information.

Line of credit and other unsecured debt - consists primarily of our Senior Credit Facility. We have variable rates on our ~~credit facilities and the revolving loans under our senior credit facility and the Safe Harbor credit facility.~~Senior Credit Facility. The fair value of the debt with variable rates approximates carrying value as the interest rates of these amounts approximate market rates. The estimated fair value of our indebtedness as of March 31, ~~2021,~~2022 approximated its gross carrying value.

Other Financial Liabilities

We estimate the fair value of ~~our~~ contingent consideration ~~liability~~liabilities based on valuation models using significant unobservable inputs that generally consider discounting of future cash flows using market interest rates and adjusting for non-performance risk over the remaining term of the liability (Level 3).

~~Other Financial Instruments~~

The carrying values of cash and cash equivalents, other receivables and accounts payable approximate their fair market values due to the short-term nature of those instruments. These are classified as Level 1 in the hierarchy.

Level 3 Reconciliation, Measurements and Transfers

We review the fair value hierarchy classifications each reporting period. Changes in the observability of the valuation attributes may result in a reclassification of certain financial assets or liabilities. Such reclassifications are reported as transfers in and out of Level 3 at the beginning fair value for the reporting period in which the changes occur. Availability of secondary market activity and consistency of pricing from third-party sources impacts our ability to classify securities as Level 2 or Level 3.

~~Our assessment resulted in a net transfer~~ There were no transfers into or out of Level 3 ~~of $138.5 million related to installment notes receivable on manufactured homes and notes from real estate developers~~ during the three months ended March 31, ~~2021.~~

~~SUN COMMUNITIES, INC.~~

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

~~(Unaudited)~~

Inputs that are used to derive the fair value for installment notes receivables on manufactured homes and notes receivable from real estate developers transferred to Level 3 from Level 2 during the quarter ended March 31, 2021 as significant inputs used to value those instruments inclusive of default rates, interest rates, recovery rates, and counterparty performance rely heavily on internally sourced assumptions as opposed to observable market-based inputs.2022.

The following ~~tables summarize~~table summarizes changes to our financial instruments carried at fair value and classified within Level 3 of the fair value hierarchy for the three months ended March 31, ~~2021~~2022 (in ~~thousands)~~millions):

Installment Notes Receivable on Manufactured Homes, net Notes Receivable From Real Estate Developers Other Liabilities (Contingent Consideration)
Level 3 beginning balance at December 31, 2020 $ 0 $ 0 $ 15,842
Transfer to level 3 85,866 52,638 0
Transfer out of level 3 0 0 0
Net earnings (loss) 375 0 71
Purchases and issuances 1,212 6,793 3,201
Sales and settlements (3,814) (262) 0
Other adjustments 470 (883) (958)
Level 3 ending balance at March 31, 2021 $ 84,109 $ 58,286 $ 18,156


	Three Months Ended
	March 31, 2022
Assets:	Installment Notes Receivable on MH, net		Notes Receivable From Real Estate Developers and Operators		Warrants
Level 3 beginning balance at December 31, 2021	$	79.1	$	284.0	$	—

Realized gains / (losses)	0.2		—		(0.6)
Purchases and issuances	0.9		30.5		1.2
Sales and settlements	(3.0)		(4.1)		—

Other adjustments	—		(6.0)		—
Level 3 ending balance at March 31, 2022	$	77.2	$	304.4	$	0.6

Other liabilities (Contingent Consideration) was $20.2 million at March 31, 2022 and December 31, 2021 respectively, and there were no changes to these Level 3 liabilities during the three months ended March 31, 2022. The balance at December 31, 2021 includes $8.9 million related to an acquisition in the marina segment that was previously included in Other Liabilities.

Although we have determined the estimated fair value amounts using available market information and commonly accepted valuation methodologies, considerable ~~judgement~~judgment is required in interpreting market data to develop fair value estimates. The fair value estimates are based on information available as of March 31, ~~2021.~~2022. As such, our estimates of fair value could differ significantly from the actual carrying value.

~~15.~~16. Commitments and Contingencies

Legal Proceedings

We are involved in various legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material adverse impact on our results of operations or financial condition.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

~~16.~~

17. Leases

Lessee Accounting

We lease land under non-cancelable operating leases at 33certain MH, RV and marina properties expiring at various dates through ~~year 2085.~~2094. The majority of the leases have terms requiring fixed payments plus additional rents based on a percentage of revenues at those properties. We also have other operating leases, primarily office space and equipment expiring at various dates through ~~2026.~~

~~Lessee Accounting~~2041.

Future minimum lease payments under non-cancellable leases as of the three months ended March 31, ~~2021~~2022 where we are the lessee include:


Maturity of Lease Liabilities (in thousands)		Operating Leases		Finance Leases		Total
2021 (Excluding three months ended March 31, 2021)		$	3,879	$	208	$	4,087
2022		4,741		213		4,954
Maturity of Lease Liabilities (in millions)								Maturity of Lease Liabilities (in millions)	Operating Leases		Finance Leases		Total
2022 (excluding three months ended March 31, 2022)								2022 (excluding three months ended March 31, 2022)	$	7.9	$	0.2	$	8.1
2023	2023	4,771		178		4,949		2023	10.2		0.2		10.4
2024	2024	5,144		4,063		9,207		2024	10.4		4.1		14.5
2025	2025	5,175		0		5,175		2025	10.4		—		10.4
2026								2026	9.3		—		9.3
Thereafter	Thereafter	55,533		0		55,533		Thereafter	196.8		—		196.8
Total Lease Payments	Total Lease Payments	$	79,243	$	4,662	$	83,905	Total Lease Payments	$	245.0	$	4.5	$	249.5
Less: Imputed interest	Less: Imputed interest	(32,734)		(335)		(33,069)		Less: Imputed interest	(112.9)		(0.2)		(113.1)
Present Value of Lease Liabilities	Present Value of Lease Liabilities	$	46,509	$	4,327	$	50,836	Present Value of Lease Liabilities	$	132.1	$	4.3	$	136.4

Right-of-use (ROU) assets and lease liabilities for finance and operating leases as included in our Consolidated Balance Sheets are as follows (in millions):


	Financial Statement Classification	As of
Description		March 31, 2022		December 31, 2021
Lease Assets
ROU asset obtained in exchange for new finance lease liabilities	Investment property, net	$	4.5	$	4.3
ROU asset obtained in exchange for new operating lease liabilities	Other assets, net	$	140.2	$	138.2
ROU asset obtained relative to below market operating lease	Other assets, net	$	92.5	$	93.1
Lease Liabilities
Finance lease liabilities	Other liabilities	$	4.3	$	4.2
Operating lease liabilities	Other liabilities	$	132.1	$	129.2

Lease expense for finance and operating leases, and short term lease cost as included in our Consolidated Statements of Operations are as follows (in millions):


		Three Months Ended
Description	Financial Statement Classification	March 31, 2022		March 31, 2021
Finance Lease Expense

Interest on lease liabilities	Interest expense	$	0.1	$	—
Operating lease cost	General and administrative expense, Property operating and maintenance	1.0		2.1
Variable lease cost	Property operating and maintenance	3.2		1.3
Short term lease cost	Property operating and maintenance	1.2		0.1
Total Lease Expense		$	5.5	$	3.5

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

~~Right-of-use (ROU) assets and lease liabilities for finance and operating leases as included in our Consolidated Balance Sheets are as follows (in thousands):~~

Description Financial Statement Classification As of
March 31, 2021 As of
December 31, 2020
Lease Assets
ROU asset obtained in exchange for new finance lease liabilities Investment property, net $ 4,368 $ 4,350
ROU asset obtained in exchange for new operating lease liabilities Other assets, net $ 59,272 $ 48,419
ROU asset obtained relative to below market operating lease Other assets, net $ 27,426 $ 27,614
Lease Liabilities
Finance lease liabilities Other liabilities $ 4,327 $ 4,334
Operating lease liabilities Other liabilities $ 46,509 $ 49,964

~~Lease expense for finance and operating leases as included in our Consolidated Statements of Operations are as follows (in thousands):~~

Three Months Ended
Description Financial Statement Classification March 31, 2021 March 31, 2020
Finance Lease Expense
Amortization of ROU assets Interest expense $ 6 $ (18)
Interest on lease liabilities Interest expense 26 26
Operating lease cost General and administrative expense, Property operating and maintenance 2,148 974
Variable lease cost Property operating and maintenance 1,299 369
Short term lease cost Property operating and maintenance 61 0
Total Lease Expense $ 3,540 $ 1,351

Lease term, discount rates and additional information for finance and operating leases are as follows:


	As of
Lease Term and Discount Rate	March 31, ~~2021~~2022
Weighted-average Remaining Lease Terms (years)
Finance lease	~~2.43~~2.26
Operating lease	~~25.90~~34.27
Weighted-average Discount Rate
Finance lease	~~2.44~~2.47	%
Operating lease	~~3.80~~3.85	%


		Three Months Ended					Three Months Ended
Other Information (in thousands)		March 31, 2021		March 31, 2020
Cash Paid For Amounts Included In The Measurement of Lease Liabilities
Other Information (in millions)						Other Information (in millions)	March 31, 2022		March 31, 2021
Cash Paid for Amounts Included in the Measurement of Lease Liabilities						Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flow from operating leases	Operating cash flow from operating leases	$	945	$	590	Operating cash flow from operating leases	$	2.4	$	1.0

Financing cash flow from finance leases	Financing cash flow from finance leases	33		8		Financing cash flow from finance leases	0.1		—
Total Cash Paid On Lease Liabilities	Total Cash Paid On Lease Liabilities	$	978	$	598	Total Cash Paid On Lease Liabilities	$	2.5	$	1.0

Lessor Accounting

We are not the lessor for any finance leases at our MH, RV or marina properties as of March 31, ~~2021.~~2022.

~~Over 95 percent~~Almost all of our operating leases at our MH and RV properties where we are the lessor are either ~~month to month~~month-to-month or for a time period not to exceed one year. As of March 31, ~~2021,~~2022, future minimum lease payments would not exceed 12 months.

Future minimum lease payments under non-cancellable leases at our RV resorts and marinas as of the three months ended March 31, 2022 where we are the lessor include:


Maturity of Lease Payments (in millions)	Operating Leases
2022 (excluding the three months ended March 31, 2022)	$	19.9
2023	22.5
2024	13.9
2025	6.9
2026	3.5
Thereafter	8.2
Total Undiscounted Cash Flows	$	74.9

The components of lease income for our operating leases, as included in our Consolidated Statement of Operations are as follows (in millions):


		Three Months Ended
Description	Financial Statement Classification	March 31, 2022		March 31, 2021
Operating Leases

Fixed lease income	Income from real property; Brokerage commissions and other revenue, net	$	7.1	$	3.7
Variable lease income(1)	Income from real property; Brokerage commissions and other revenue, net	$	0.7	$	1.0

(1)Consists of rent primarily based on a percentage of acquisition costs and net operating income.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

~~Future minimum lease payments under non-cancellable leases at our marinas and RV properties as of the three months ended March 31, 2021 where we are the lessor include:~~

Maturity of Lease Liabilities (in thousands) Operating Leases
2021 (Excluding three months ended March 31, 2021) $ 8,261
2022 6,951
2023 5,039
2024 2,090
2025 1,220
Thereafter 2,628
Total Undiscounted Cash Flows $ 26,189

~~The components of lease income were as follows (in thousands):~~

Three Months Ended
Description March 31, 2021 March 31, 2020
Operating Leases
Fixed lease income $ 3,657 $ 311
Variable lease income $ 1,028 $ 397

~~17.~~18. Recent Accounting Pronouncements

Recent Accounting Pronouncements - Adopted

In August 2020, the FASB issued ASU 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity."This update simplifies the accounting for convertible instruments by eliminating the models that require separation of a cash conversion or beneficial conversion feature from the host contract. Under the amended guidance, a convertible debt instrument is treated as one liability accounted for at its amortized cost and convertible preferred stock is considered one equity instrument accounted for at its historical cost, unless (a) there are other features that require bifurcation as a derivative, or (b) convertible debt was issued at a substantial premium. This update also eliminates several triggers for derivative accounting, including a requirement to settle certain contracts by delivering registered shares. Additionally, this update provides clarifications to improve the consistency of earnings per share (EPS) calculations. We adopted the ASU on January 1, 2022. The adoption of this ASU did not have an impact on our Consolidated Financial Statements.

Recent Accounting Pronouncements - Not Yet Adopted

In March 2020, the FASB issued ASU ~~No.~~ 2020-04, ""Reference Rate ~~Reform"~~Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which provides optional guidance for accounting for contracts, hedging relationships and other transactions affected by the reference rate reform, if certain criteria are met. The provisions of this standard are available for election through December 31, 2022. ~~We are currently evaluating~~As of March 31, 2022, we do not expect the reference rate reform will have a material impact ~~that ASU 2020-04 may have~~ on our Consolidated Financial Statements ~~and related disclosures.~~as the majority of our debt has fixed interest rates. Refer to Note 19, "Subsequent Events," for information regarding the amendment of our Senior Credit Facility, now based on SOFR after amendment, completed after March 31, 2022. amendment.

~~In August 2020,~~19. Subsequent Events

Acquisitions

Subsequent to the ~~FASB~~three months ended March 31, 2022, we completed our previously announced acquisition of Park Holidays in the UK for £950 million (or approximately $1.2 billion). As consideration for the acquisition, we (i) issued ~~ASU 2020-06,~~ an aggregate of 186,044 shares of our common stock with a value of approximately $34.0 million as of the closing to certain individual sellers who are also members of Park Holidays' senior management team, and (ii) paid the remainder of the purchase price in cash.


Property Name	Property Type	Sites, Wet Slips and Dry Storage Spaces	Development Sites	State / Province or Country	Total Purchase Price (in millions)
Park Holidays(1)	MH	15,906	1,140	UK	$	1,242.1
Christies Parks(2)	MH	249	—	UK	10.1
Bluewater Yacht Sales	Marina	200	—	Various	25.0
Jarrett Bay Bluewater Yacht Sales(3)	Marina	—	—	Various	17.6

Total Subsequent Acquisitions		16,355	1,140		$	1,294.8

(1)~~Debt - "Debt~~Includes 40 owned and 2 managed properties.

(2)Combined with ~~Conversion~~an existing adjacent MH community.

(3)Combined with an existing marina.

Debt

Senior Credit Facility Amendment

On April 7, 2022, in connection with the closing of the Park Holidays acquisition, the Operating Partnership as borrower, and Sun Communities, Inc., as guarantor, and certain lenders entered into Amendment No. 1 to the Fourth Amended and Restated Credit Agreement and Other ~~Options" (Subtopic 470-20) and "Derivatives and Hedging - Contracts in Entity's Own Equity" (Subtopic 815-40): "Accounting for Convertible Instruments and Contracts in an Entity's Own Equity"~~ ~~("ASU 2020-06"~~Loan Documents (the "Credit Facility Amendment"), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, "~~Debt: Debt with Conversion and Other Options~~," which requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer's own stock and classified in stockholders' equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, "~~Earnings Per Share~~," to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. We are currently evaluating the impact that ASU 2020-06 may have onamended our ~~Consolidated Financial Statements and related disclosure.~~Senior Credit Facility.

SUN COMMUNITIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

~~18.~~ ~~Subsequent Events~~The Credit Facility Amendment increases the aggregate amount of our Senior Credit Facility to $4.2 billion with the ability to upsize the total borrowings by an additional $800 million, subject to certain conditions. The increased aggregate amount under the Senior Credit Facility consists of the following: (a) a revolving loan in an amount up to $3.05 billion and (b) a term loan facility of $1.15 billion, with the ability to draw funds from the combined facilities in U.S. dollars, Pounds sterling, Euros, Canadian dollars and Australian dollars, subject to certain limitations. The Credit Facility Amendment extends the maturity date of the revolving loan facility to April 7, 2027, assuming the Operating Partnership's exercise of each of its two six-month extension options and, further, the Credit Facility Amendment also extends the maturity date of the term loan facility to April 7, 2025, which may not be extended. Prior to the amendment, the Senior Credit Facility permitted aggregate borrowings of up to $2.0 billion, with an accordion feature that allowed for additional commitments of up to $1.0 billion, subject to the satisfaction of certain conditions.

~~Shelf Registration Statement~~The Senior Credit Facility bears interest at a floating rate based on ~~Form S-3~~Adjusted Term SOFR, the Adjusted Eurocurrency Rate, the Daily RFR Rate, the Australian Bank Bill Swap Bid Rate (BBSY), the Daily SONIA Rate or the Canadian Dollar Offered Rate, as applicable, plus, in all cases, a margin, which can range from 0.725 percent to 1.6 percent, subject to certain adjustments. As of March 31, 2022, the margin based on our credit ratings would have been 0.85 percent on the revolving loan facility and 0.95 percent on the term loan facility.

~~Subsequent~~Senior Unsecured Notes

On April 12, 2022, the Operating Partnership issued $600.0 million of senior unsecured notes with an interest rate of 4.2 percent and a 10-year term, due April 15, 2032 (the "2032 Notes"). The net proceeds from the offering were $592.3 million after deducting underwriters' discounts and estimated offering expenses. We used the net proceeds from the offering to ~~the quarter ended March 31, 2021, on April 5, 2021, in~~repay borrowings outstanding under our Senior Credit Facility. In connection with the ~~expiration~~2032 Notes issuance, we settled 4 10-year Treasury rate locks totaling $600.0 million and received a settlement payment of $35.3 million. The balance is included in the Accumulated other comprehensive income in our universal shelf registration statement on Form S-3, that was filed with the SEC on April 6, 2018, we filed a new universal shelf registration statement on Form S-3 with the SEC, which was deemed automatically effectiveConsolidated Balance Sheets, and ~~which provides for the registration of unspecified amounts of equity and debt securities. However, there can be no assurance that we~~ will be ~~able to complete any such offerings~~amortized as a reduction of ~~securities in~~interest expense on a straight line basis over the ~~future.~~10-year term of the hedged transaction.

~~Acquisitions~~Equity Transactions

~~Subsequent~~On April 15, 2022, we settled forward sale agreements with respect to ~~the quarter ended March 31, 2021, we acquired an RV resort in Davenport, Florida with 148 developed sites for a total purchase price of $25.0 million.~~

~~Subsequent to the~~ ~~quarter ended March 31, 2021~~, we acquired a MH community located in Brighton, Michigan with 476 MH sites for a total purchase price of $24.0 million. In conjunction with the acquisition, the Operating Partnership created a new class of OP units, named Series J preferred units. As ~~of April 21, 2021,~~ 240,000 Series J preferred OP units were outstanding. The Series J preferred OP units have an issuance price of $100.00 and carry a preferred return of 2.85 percent per year. Subject to certain limitations, each Series J preferred OP unit is exchangeable at any time into that number of1,200,000 shares of ~~the Company's~~ common stock ~~equal~~under our at the market offering program. We also settled forward sale agreements with respect to 4,025,000 shares of common stock under the ~~quotient obtained by dividing $100.00 by $165.00 (as such ratio is subject~~November 2021 Forward Sale Agreements related to ~~adjustment for certain capital events).~~an underwritten registered public offering. The ~~holder may require redemption in cash (i) during~~aggregate net proceeds from the ~~30-day period following a change~~settlement of ~~control of~~these forward sale agreements was $934.9 million. We used the ~~Company or (ii) any time after the fifth anniversary of the issuance date of the Series J preferred OP units.~~net proceeds to repay borrowings outstanding under our Senior Credit Facility.

We have evaluated our Consolidated Financial Statements for subsequent events through the date that this Form 10-Q was issued.

SUN COMMUNITIES, INC.

ITEM 2. ~~MANAGEMENT’S~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 the accompanying Notes, along with our ~~2020~~2021 Annual Report.

OVERVIEW

We are a fully integrated, self-administered and self-managed REIT. As of March 31, ~~2021,~~2022, we owned and operated or held an interest in a portfolio of ~~562~~603 developed properties located in 39 states throughout the ~~U.S.~~United States, Ontario, Canada, Puerto Rico and ~~one province in Canada,~~the United Kingdom including ~~277~~283 MH communities, ~~141~~161 RV resorts, 3431 properties containing both MH and RV sites, and ~~110~~128 marinas. We have been in the business of acquiring, operating, developing and expanding MH communities and RV resorts since 1975 and marinas since 2020. We lease individual sites with utilities access for placement of manufactured homes, RVs or boats to our customers. We are also engaged in the marketing, selling and leasing of new and pre-owned homes to current and future residents in our MH communities. The ~~rental program~~Rental Program operations within our MH communities support and enhance our occupancy levels, property performance and cash flows.

~~COVID-19 IMPACT~~

As of March 31, 2021, there are no government regulations preventing the operations of any of our MH communities, RV resorts or marinas. Ontario, Canada does have travel restrictions in place that if extended into May 2021, could delay the opening of seasonal resorts in Canada. Additionally, the border for recreational travel between the Unites States and Canada remains closed with no defined opening date, which could impact cross border traffic to resorts and marinas across the United State and Canada. The execution of our operational and financial plans has helped to mitigate the impact of COVID-19 on our business.

We continue to provide essential services using social distancing techniques and minimal contact. To promote social distancing, we are encouraging our residents to use our online rent payment portals and other payment methods. We have instituted numerous health and safety measures at our communities and our Main Office to keep team members safe. These measures include infrared thermometers at entrances to monitor team members' temperatures, increased cleaning and sanitation of shared spaces and social distancing protocols throughout our footprint. We closely monitor and track orders by federal, state and local authorities and hold regular status calls with our operations and Main Office leadership teams. We have implemented and continue to encourage remote working arrangements, wherever possible, to keep our team members safe and to do our part to promote social distancing.

We remain committed to assisting individuals who are in the process of leasing a site, a wet slip, a dry storage space, or purchasing a home, while maintaining health and safety protocols including following strict social distancing. Virtual viewings of homes are being utilized to avoid or minimize contact.

The extent to which the COVID-19 pandemic impacts our operations, financial condition and financial results will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. The uncertainty of this situation precludes any prediction as to the full impact of the COVID-19 pandemic.

SIGNIFICANT ACCOUNTING POLICIES

We have identified significant accounting policies that, as a result of the judgments, uncertainties and complexities of the underlying accounting standards and operations involved could result in material changes to our financial condition or results of operations under different conditions or using different assumptions. Details regarding significant accounting policies are described fully in our ~~2020~~2021 Annual Report.

SUN COMMUNITIES, INC.

NON-GAAP FINANCIAL MEASURES

In addition to the results reported in accordance with GAAP in our "Results of Operations" below, we have provided information regarding net operating income ("NOI") and funds from operations ("FFO") as supplemental performance measures. We believe NOI and FFO are appropriate measures given their wide use by and relevance to investors and analysts following the real estate industry. NOI provides a measure of rental operations and does not factor in depreciation, amortization and non-property specific expenses such as general and administrative expenses. FFO, reflecting the assumption that real estate values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation / amortization of real estate assets. In addition, NOI and FFO are commonly used in various ratios, pricing multiples / yields and returns and valuation calculations used to measure financial position, performance and value.

NOI is derived from operating revenues minus property operating expenses and real estate taxes. NOI is a non-GAAP financial measure that we believe is helpful to investors as a supplemental measure of operating performance because it is an indicator of the return on property investment and provides a method of comparing property performance over time. We use NOI as a key measure when evaluating performance and growth of particular properties and / or groups of properties. The principal limitation of NOI is that it excludes depreciation, amortization, interest expense and non-property specific expenses such as general and administrative expenses, all of which are significant costs. Therefore, NOI is a measure of the operating performance of our properties rather than of the Company overall.

We believe that GAAP net income (loss) is the most directly comparable measure to NOI. NOI should not be considered to be an alternative to GAAP net income (loss) as an indication of our financial performance or GAAP cash flow from operating activities as a measure of our liquidity; nor is it indicative of funds available for our cash needs, including our ability to make cash distributions. Because of the inclusion of items such as interest, depreciation and amortization, the use of GAAP net income (loss) as a performance measure is limited as these items may not accurately reflect the actual change in market value of a property, in the case of depreciation and in the case of interest, may not necessarily be linked to the operating performance of a real estate asset, as it is often incurred at a parent company level and not at a property level.

FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT") as GAAP net income (loss), excluding gains (or losses) from sales of depreciable operating property, plus real estate related depreciation and amortization, real estate related impairments, and after adjustments for unconsolidated partnerships and joint ventures. FFO is a non-GAAP financial measure that management believes is a useful supplemental measure of our operating performance. By excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment and excluding real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO provides a performance measure that, when compared period-over-period, reflects the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not readily apparent from GAAP net income (loss). Management believes the use of FFO has been beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. We also use FFO excluding certain gain and loss items that management considers unrelated to the operational and financial performance of our core business ("Core FFO"). We believe that Core FFO provides enhanced comparability for investor evaluations of period-over-period results.

We believe that GAAP net income (loss) is the most directly comparable measure to FFO. The principal limitation of FFO is that it does not replace GAAP net income (loss) as a performance measure or GAAP cash flow from operations as a liquidity measure. Because FFO excludes significant economic components of GAAP net income (loss) including depreciation and amortization, FFO should be used as a supplement to GAAP net income (loss) and not as an alternative to it. ~~Further,~~Furthermore, 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. FFO is calculated in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that interpret the NAREIT definition differently.

SUN COMMUNITIES, INC.

RESULTS OF OPERATIONS

The following tables reconcile the Net income ~~/ (loss)~~ attributable to Sun Communities, Inc. common ~~stockholders~~shareholders to NOI and summarize our consolidated financial results for the three months ended March 31, 2022 and 2021 ~~and 2020~~ (in ~~thousands)~~millions):


		Three Months Ended				Three Months Ended
		March 31, 2021		March 31, 2020				March 31, 2022		March 31, 2021
Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders		$	24,782	$	(16,086)
Net Income Attributable to Sun Communities, Inc. Common Shareholders							Net Income Attributable to Sun Communities, Inc. Common Shareholders	$	0.7	$	24.8
Interest income	Interest income	(2,631)		(2,350)			Interest income	(6.8)		(2.6)
Brokerage commissions and other revenues, net	Brokerage commissions and other revenues, net	(5,960)		(3,913)			Brokerage commissions and other revenues, net	(8.0)		(6.0)
General and administrative expense	General and administrative expense	38,203		25,349			General and administrative expense	55.7		38.2
Catastrophic event-related charges, net	Catastrophic event-related charges, net	2,414		606			Catastrophic event-related charges, net	—		2.4
Business combination expense	Business combination expense	1,232		—			Business combination expense	0.5		1.2
Depreciation and amortization	Depreciation and amortization	123,304		83,689			Depreciation and amortization	148.5		123.9

Loss on extinguishment of debt (see Note 8)	Loss on extinguishment of debt (see Note 8)	—		3,279			Loss on extinguishment of debt (see Note 8)	0.3		—
Interest expense	Interest expense	39,517		32,416			Interest expense	45.2		39.5
Interest on mandatorily redeemable preferred OP units / equity	Interest on mandatorily redeemable preferred OP units / equity	1,036		1,041			Interest on mandatorily redeemable preferred OP units / equity	1.0		1.0
(Gain) / loss on remeasurement of marketable securities (see Note 14)		(3,661)		28,647
(Gain) / loss on foreign currency translation		(25)		17,479

(Gain) / loss on remeasurement of marketable securities (see Note 15)							(Gain) / loss on remeasurement of marketable securities (see Note 15)	34.5		(3.7)
Loss on foreign currency translation							Loss on foreign currency translation	2.2		—
Gain on disposition of property							Gain on disposition of property	(13.4)		—
Other expense, net	Other expense, net	1,099		972			Other expense, net	0.6		0.5
(Income) / loss on remeasurement of notes receivable (see Note 4)		(376)		2,112
Gain on remeasurement of notes receivable (see Note 4)							Gain on remeasurement of notes receivable (see Note 4)	(0.2)		(0.4)
Income from nonconsolidated affiliates (see Note 6)	Income from nonconsolidated affiliates (see Note 6)	(1,171)		(52)			Income from nonconsolidated affiliates (see Note 6)	(0.9)		(1.2)
(Income) / loss on remeasurement of investment in nonconsolidated affiliates (see Note 6)		(104)		2,191
Gain on remeasurement of investment in nonconsolidated affiliates (see Note 6)							Gain on remeasurement of investment in nonconsolidated affiliates (see Note 6)	(0.1)		(0.1)
Current tax (benefit) / expense (see Note 12)	Current tax (benefit) / expense (see Note 12)	(229)		450			Current tax (benefit) / expense (see Note 12)	1.3		(0.2)
Deferred tax benefit (see Note 12)	Deferred tax benefit (see Note 12)	(147)		(130)			Deferred tax benefit (see Note 12)	—		(0.1)
Preferred return to preferred OP units / equity		2,864		1,570
Preferred return to preferred OP units / equity interests							Preferred return to preferred OP units / equity interests	3.0		2.9
Income / (loss) attributable to noncontrolling interests	Income / (loss) attributable to noncontrolling interests	295		(962)			Income / (loss) attributable to noncontrolling interests	(2.2)		0.3

NOI	NOI	$	220,442	$	176,308		NOI	$	261.9	$	220.4

Three Months Ended
March 31, 2021 March 31, 2020
Real Property NOI $ 204,652 $ 171,339
Home Sales NOI 10,609 6,548
Service, retail, dining and entertainment NOI 5,181 (1,579)
NOI $ 220,442 $ 176,308


	Three Months Ended
	March 31, 2022		March 31, 2021
Real property NOI	$	232.8	$	204.6
Home sales NOI	18.8		10.6

Service, retail, dining and entertainment expenses NOI	10.3		5.2

NOI	$	261.9	$	220.4

~~We evaluate~~

SUN COMMUNITIES, INC.

Seasonality of Revenue

The RV and marina industries are seasonal in nature, and the results of operations in any one period may not be indicative of results in future periods.

In the RV segment, ~~operating performance based~~certain properties maintain higher occupancy during the summer months, while other properties maintain higher occupancy during the winter months. Based on ~~NOI.~~the location of our properties with transient RV sites, our portfolio generally produces higher revenues between April and September than between October and March. Real property - transient revenue is included in ~~the~~ RV segment revenue. As of March 31, 2022, we recognized $42.7 million of Real property - transient ~~(excluding Vacation rental)~~ revenue ~~is expected to approximate $175.9 million annually. Real property - transient (excluding Vacation rental) revenue was recognized $26.0 million~~ in the first ~~quarter and is expected to be $46.3 million in the second quarter, $76.3 million in the third quarter, and $27.3 million in the fourth~~ quarter. Real property - transient ~~(excluding Vacation rental)~~ revenue was ~~approximately $134.7~~$266.6 million for the year ended December 31, ~~2020.~~2021. In ~~2020,~~2021, Real property - transient ~~(excluding Vacation rental)~~revenue was recognized ~~18.8~~11.9 percent in the first quarter, ~~15.6~~27.3 percent in the second quarter, 44.9 percent in the third quarter and ~~20.7~~15.9 percent in the fourth quarter.

In the marina segment, demand for wet slip storage increases during the summer months as customers contract for the summer boating season, which also drives non-storage revenue streams such as service, fuel and on-premises restaurants or convenience stores. Demand for dry storage increases during the winter season as seasonal weather patterns require boat owners to store their vessels on dry docks and within covered racks. As of March 31, 2022, we recognized $62.4 million of seasonal Real property revenue in the first quarter. Seasonal Real property revenue was $246.6 million for the year ended December 31, 2021. In 2021, Seasonal Real property revenue was recognized 17.7 percent in the first quarter, 25.0 percent in the second quarter, 29.9 percent in the third quarter and 27.4 percent in the fourth quarter.

SUN COMMUNITIES, INC.

Comparison of the ~~three months ended~~Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021

Real Property Operations - Total Portfolio

The following tables reflect certain financial and other information for our Total Portfolio as of and for the three months ended March 31, 2022 and 2021 ~~and 2020~~ (in ~~thousands,~~millions, except for statistical information):

Three Months Ended
March 31, 2021
March 31, 2021(1)
Change % Change
Financial Information
Revenue
Real property (excluding Transient) $ 268,766 $ 207,186 $ 61,580 29.7 %
Real property - transient 32,536 30,347 2,189 7.2 %
Other 29,311 20,816 8,495 40.8 %
Total Operating 330,613 258,349 72,264 28.0 %
Expense
Property Operating 125,961 87,010 38,951 44.8 %
Real Property NOI $ 204,652 $ 171,339 $ 33,313 19.4 %

~~(1)Canadian currency figures included within the three months ended March 31, 2020 have been translated at the 2021 average exchange rates.~~


	Three Months Ended
	March 31, 2022		March 31, 2022		Change		% Change
Financial Information
Revenue


Real property (excluding transient)	$	306.7	$	268.8	$	37.9	14.1	%
Real property - transient	45.0		32.5		12.5		38.5	%
Other	36.5		29.3		7.2		24.6	%
Total Operating	388.2		330.6		57.6		17.4	%
Expense






Property Operating	155.4		126.0		29.4		23.3	%
Real Property NOI	$	232.8	$	204.6	$	28.2	13.8	%


		As of											As of
		March 31, 2021			March 31, 2020				Change				March 31, 2022			March 31, 2021				Change
Other Information	Other Information											Other Information
Number of properties(1)	Number of properties(1)	562			422				140			Number of properties(1)	603			562				41

MH occupancy	MH occupancy	96.5		%								MH occupancy	96.7		%
RV occupancy(2)	RV occupancy(2)	100.0		%								RV occupancy(2)	100.0		%
MH & RV blended occupancy(3)	MH & RV blended occupancy(3)	97.3		%	96.7		%		0.6		%	MH & RV blended occupancy(3)	97.5		%	97.3		%		0.2		%

Adjusted MH occupancy(4)		97.8		%
Adjusted RV occupancy(5)		100.0		%
Adjusted MH & RV occupancy(6)		98.3		%	98.3		%		—		%

Sites available for MH & RV development	Sites available for MH & RV development	9,646			10,293				(647)			Sites available for MH & RV development	11,377			9,646				1,731

Monthly base rent per site - MH	Monthly base rent per site - MH	$	596		$	581		(8)	$	15		Monthly base rent per site - MH	$	615		$	598		(5)	$	17
Monthly base rent per site - RV~~(7)~~(4)	Monthly base rent per site - RV~~(7)~~(4)	$	522		$	499		(8)	$	23		Monthly base rent per site - RV~~(7)~~(4)	$	542		$	522		(5)	$	20
Monthly base rent per site - Total	Monthly base rent per site - Total	$	579		$	563		(8)	$	16		Monthly base rent per site - Total	$	597		$	580		(5)	$	17

(1)~~Include~~Includes MH communities, RV resorts and marinas.

(2)Occupancy percentages include annual RV sites and exclude transient RV sites.

(3)Occupancy percentages include MH and annual RV sites, and exclude transient RV sites.

(4)~~Adjusted occupancy percentages include MH and exclude recently completed but vacant expansion sites.~~

~~(5)Adjusted occupancy percentages include annual RV sites, and exclude transient RV sites and recently completed but vacant expansion sites.~~

~~(6)Adjusted occupancy percentages include MH and annual RV sites, and exclude transient RV sites and recently completed but vacant expansion sites.~~

~~(7)~~Monthly base rent pertains to annual RV sites and excludes transient RV sites.

~~(8)~~(5)Canadian currency figures included within the three months ended March 31, ~~2020~~2021 have been translated at ~~2021~~2022 average exchange rates.

~~The $33.3~~For the three months ended March 31, 2022, the $28.2 million increase in Real Property NOI consists of ~~$4.6~~$13.6 million from Same ~~Communities~~Property MH and RV and $0.3 million from Same Property marina as detailed below, ~~$25.0 million from the Marinas~~ and ~~$3.7~~$14.3 million from recently acquired properties ~~in the three months ended March 31, 2021~~ as compared to the same period in ~~2020.~~2021.

3839

SUN COMMUNITIES, INC.

Real Property Operations - Same ~~Community~~Property

A key management tool used when evaluating performance and growth of our properties is a comparison of ~~our~~the Same ~~Communities. The~~Property portfolio. Same ~~Communities data includes all~~Property refers to properties ~~which~~that we have owned ~~and operated continuously since January 1, 2020,~~for at least the preceding year, exclusive of properties recently completed or under construction, and other properties as determined by management. The Same ~~Community~~Property data may change from time-to-time depending on acquisitions, dispositions, management discretion, significant transactions or unique situations. In order to evaluate the growth of the Same ~~Communities,~~Property portfolio, management has classified certain items differently than our GAAP statements. The reclassification difference between our GAAP statements and our Same ~~Community~~Property portfolio is the reclassification of utility revenues from ~~Real~~real property revenue to operating expenses. A significant portion of our utility charges are re-billed to our residents.

Real Property Operations - Same Property - MH and RV

The following tables reflect certain financial and other information for our Same ~~Communities~~Property MH and RV as of and for the three months ended March 31, 2022 and 2021 ~~and 2020~~ (in ~~thousands,~~millions, except for statistical information).


		Three Months Ended																									Three Months Ended
		Total Same Community								MH								RV													Total Same Property - MH and RV												MH												RV
		March 31, 2021		March 31, 2020		Change		% Change		March 31, 2021		March 31, 2020		Change		% Change		March 31, 2021		March 31, 2020		Change					% Change				March 31, 2022			March 31, 2021			Change			% Change(1)			March 31, 2022			March 31, 2021			Change			% Change(1)			March 31, 2022			March 31, 2021			Change		% Change(1)
Financial Information	Financial Information																												Financial Information
Revenue	Revenue																								Revenue
Real property (excluding Transient)		$	215,471	$	205,218	$	10,253	5.0	%	$	172,741	$	164,828	$	7,913	4.8	%	$	42,729	$	40,390	$	2,339				5.8	%
Real property (excluding transient)																								Real property (excluding transient)	$	233.1				$	218.7		$	14.4		6.6		%	$	182.4		$	174.9		$	7.5		4.3		%	$	50.7		$	43.8		$	6.9		15.5		%
Real property - transient	Real property - transient	25,907		28,870		(2,963)		(10.3)	%	601		928		(327)		(35.2)	%	25,306		27,942		(2,636)					(9.4)	%	Real property - transient		39.1			30.3			8.8			28.9	%		0.5			0.6			(0.1)			(23.1)	%		38.6			29.7			8.9		30.0	%
Other	Other	7,047		5,895		1,152		19.5	%	4,826		3,810		1,016		26.7	%	2,222		2,085		137					6.6	%	Other		7.6			7.2			0.4			5.5	%		4.9			4.4			0.5			11.1	%		2.7			2.8			(0.1)		(3.3)	%
Total Operating	Total Operating	248,425		239,983		8,442		3.5	%	178,168		169,566		8,602		5.1	%	70,257		70,417		(160)					(0.2)	%	Total Operating		279.8			256.2			23.6			9.2	%		187.8			179.9			7.9			4.4	%		92.0			76.3			15.7		20.5	%
Expense	Expense																								Expense

Property Operating	Property Operating	73,015		69,189		3,826		5.5	%	43,005		40,685		2,320		5.7	%	30,010		28,504		1,506					5.3	%	Property Operating		88.9			78.9			10.0			12.7	%		47.7			43.9			3.8			8.7	%		41.2			35.0			6.2		17.6	%
Real Property NOI	Real Property NOI	$	175,410	$	170,794	$	4,616	2.7	%	$	135,163	$	128,881	$	6,282	4.9	%	$	40,247	$	41,913	$	(1,666)				(4.0)	%	Real Property NOI		$	190.9		$	177.3		$	13.6		7.7	%		$	140.1		$	136.0		$	4.1		3.0	%		$	50.8		$	41.3		$	9.5	22.9	%

(1) Percentages are calculated based on unrounded numbers.

3940

SUN COMMUNITIES, INC.


		As of											As of
		March 31, 2021			March 31, 2020				Change				March 31, 2022			March 31, 2021				Change
Other Information	Other Information											Other Information
Number of properties	Number of properties	407			407				—			Number of properties	425			425				—

MH occupancy	MH occupancy	97.3		%								MH occupancy	97.3		%
RV occupancy(1)	RV occupancy(1)	100.0		%								RV occupancy(1)	100.0		%
MH & RV blended occupancy(2)	MH & RV blended occupancy(2)	97.9		%								MH & RV blended occupancy(2)	97.9		%

Adjusted MH occupancy(3)	Adjusted MH occupancy(3)	98.4		%								Adjusted MH occupancy(3)	98.1		%
Adjusted RV occupancy(4)	Adjusted RV occupancy(4)	100.0		%								Adjusted RV occupancy(4)	100.0		%
Adjusted MH & RV blended occupancy(5)	Adjusted MH & RV blended occupancy(5)	98.8		%	96.9		%	(6)	1.9		%	Adjusted MH & RV blended occupancy(5)	98.5		%	96.9		%	(6)	1.6		%

Sites available for development	Sites available for development	7,373			6,975				398			Sites available for development	7,645			8,243				(598)

Monthly base rent per site - MH	Monthly base rent per site - MH	$	599		$	580		(8)	$	19		Monthly base rent per site - MH	$	620		$	597		(8)	$	23
Monthly base rent per site - RV(7)	Monthly base rent per site - RV(7)	$	524		$	499		(8)	$	25		Monthly base rent per site - RV(7)	$	553		$	522		(8)	$	31
Monthly base rent per site - Total	Monthly base rent per site - Total	$	582		$	562		(8)	$	20		Monthly base rent per site - Total	$	604		$	580		(8)	$	24

(1)Occupancy percentages include annual RV sites and exclude transient RV sites.

(2)Occupancy percentages include MH and annual RV sites, and exclude transient RV sites.

(3)Adjusted occupancy percentages include MH and exclude recently completed but vacant expansion sites.

(4)Adjusted occupancy percentages include annual RV sites, and exclude transient RV sites and recently completed but vacant expansion sites.

(5)Adjusted occupancy percentages include MH and annual RV sites, and exclude transient RV sites and recently completed but vacant expansion sites.

(6)The occupancy percentages for ~~2020~~2021 have been adjusted to reflect incremental growth period-over-period from newly rented MH expansion sites and the conversion of transient RV sites to annual RV sites.

(7)Monthly base rent pertains to annual RV sites and excludes transient RV sites.

(8)Canadian currency figures included within three months ended March 31, ~~2020~~2021 have been translated at ~~2021~~2022 average exchange rates.

The amounts in the table above reflect constant currency for comparative purposes. We have reclassified water and sewer revenues of ~~$16.5~~$19.6 million and ~~$14.8~~$17.3 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, to reflect the utility expenses associated with our Same ~~Community~~Property portfolio net of recovery.

For the three months ended March 31, ~~2021~~2022 and ~~2020, the Total Same Community $4.6~~2021:

•The $13.6 million, or ~~2.7~~7.7 percent, growth in Total Same Property NOI is ~~attributable~~due to ~~the MH segment $6.3~~a $9.5 million, or ~~4.9~~22.9 percent, ~~growth~~increase in NOI ~~partially offset by~~from the RV segment ~~$1.7~~and $4.1 million, or ~~4.0~~3.0 percent, ~~decrease~~increase in ~~NOI.~~NOI from the MH segment.

•

The MHRV segment ~~$6.3~~increase in NOI of $9.5 million, or ~~4.9~~22.9 percent, ~~growth in NOI~~ is primarily due to aan increase in Real property - transient revenue of $8.9 million, or 30.0 percent, when compared to the same period in 2021 due to increased transient and vacation rental traffic.

•The MH segment increase in NOI of $4.1 million, or 3.0 percent, is primarily due to an increase in Real property (excluding transient) revenue of ~~$7.9~~$7.5 million, or ~~4.8 percent. The Real~~4.3 percent, when compared to the same period in 2021. MH property (excluding transient) revenue increased due to a ~~3.2~~3.8 percent increase in monthly base rent ~~per MH site~~and an increase in Occupancy of 160 basis points.

SUN COMMUNITIES, INC.

Real Property Operations - Same Property - Marina

The following tables reflect certain financial and other information for our Same Property Marina as of and for the three months ended March 31, 2022 and 2021 (in millions, except for statistical information).


	Three Months Ended
Financial Information	March 31, 2022		March 31, 2021		Change		% Change(1)
Revenue
Real property (excluding transient)	$	45.8	$	43.3	$	2.5	5.6	%
Real property - transient	1.4		0.9		0.5		58.7	%
Other	2.3		1.7		0.6		34.3	%
Total Operating	49.5		45.9		3.6		7.7	%
Expense








Property Operating	24.4		21.1		3.3		15.2	%
Real Property NOI	$	25.1	$	24.8	$	0.3	1.2	%

(1) Percentages are calculated based on unrounded numbers.


	As of
	March 31, 2022	March 31, 2021	Change	% Change
Other Information
Number of properties	101	101	—	—	%

We have reclassified utility revenueof $2.5 million and $2.6 million for the three months ended March 31, 2022 and 2021, to reflect the utility expenses associated with our Same Property Marina portfolio net of recovery.

Same Property Marina NOI remained flat for the three months ended March 31, 2022 when compared to the same period in ~~2020, and a 1.9 percent increase in occupancy.~~2021.

The RV segment $1.7 million, or 4.0 percent, decrease in NOI is due to a decrease in Real property - transient revenue of $2.6 million, or 9.4 percent, and an increase in Property operating expenses, primarily attributable to increases in supplies and repair, payroll and benefit and utility costs..

4042

SUN COMMUNITIES, INC.

Home Sales Summary

We purchase new homes and acquire pre-owned and repossessed manufactured homes, generally located within our communities, from lenders, dealers, and former residents to sell or lease to current and prospective residents.

The following table reflects certain financial and statistical information for our Home Sales Program for the three months ended March 31, 2022 and 2021 (in millions, except for average selling price and statistical information):


	Three Months Ended
	March 31, 2022			March 31, 2021			Change			% Change
Financial Information
New Homes
New home sales	$	26.6		$	23.0		$	3.6		15.7	%
New home cost of sales	21.6			18.7			2.9			15.5	%
Gross profit – new homes	5.0			4.3			0.7			16.3	%
Gross margin % – new homes	18.8		%	18.7		%	0.1		%
Average selling price – new homes	$	179,730		$	154,174		$	25,556		16.6	%

Pre-owned Homes
Pre-owned home sales	$	38.1		$	29.2		$	8.9		30.5	%
Pre-owned home cost of sales	19.8			18.6			1.2			6.5	%
Gross Profit – pre-owned homes	18.3			10.6			7.7			72.6	%
Gross margin % – pre-owned homes	48.0		%	36.4		%	11.6		%
Average selling price – pre-owned homes	$	55,298		$	42,605		$	12,693		29.8	%

Total Home Sales
Revenue from home sales	$	64.7		$	52.2		$	12.5		23.9	%
Cost of home sales	41.4			37.3			4.1			11.0	%
Home selling expenses	4.5			4.3			0.2			4.7	%
Home Sales NOI	$	18.8		$	10.6		$	8.2		77.4	%

Other Information
New home sales volume	148			149			(1)			(0.7)	%
Pre-owned home sales volume	689			686			3			0.4	%
Total home sales volume	837			835			2			0.2	%

Gross Profit - New Homes

For the three months ended March 31, 2022, the $0.7 million, or 16.3 percent, increase in gross profit is primarily the result of a 16.6 percent increase in the new home average selling price, as compared to the same period in 2021.

Gross Profit - Pre-owned Homes

For the three months ended March 31, 2022, the $7.7 million, or 72.6 percent, increase in gross profit is primarily the result of a 11.6 percent increase in gross margin, primarily due to a 29.8 percent increase in the pre-owned home average selling price, as compared to the same period in 2021.

Homes sales NOI

For the three months ended March 31, 2022, the $8.2 million, or 77.4 percent, increase in NOI is primarily the result of an increase in new home average selling price and pre-owned home average selling price, compared to the same period in 2021.

SUN COMMUNITIES, INC.

Rental Program Summary

The following table reflects certain financial and other information for our Rental Program as of and for the three months ended March 31, 2022 and 2021 (in millions, except for weighted average monthly rental rate and statistical information):


	Three Months Ended
	March 31, 2022		March 31, 2021		Change		% Change
Financial Information
Revenues
Home rent	$	16.1	$	17.0	$	(0.9)	(5.3)	%
Site rent	16.1		19.1		(3.0)		(15.7)	%
Total	32.2		36.1		(3.9)		(10.8)	%

Expenses



Rental Program operating and maintenance	4.9		5.2		(0.3)		(5.8)	%
Rental Program NOI	$	27.3	$	30.9	$	(3.6)	(11.7)	%

Other Information
Number of sold rental homes	177		211		(34)		(16.1)	%
Number of occupied rentals, end of period	9,467		11,473		(2,006)		(17.5)	%
Investment in occupied rental homes, end of period	$	541.9	$	621.9	$	(80.0)	(12.9)	%
Weighted average monthly rental rate, end of period	$	1,139	$	1,055	$	84	8.0	%

The Rental Program NOI is included in Real Property NOI. The Rental Program NOI is separately reviewed to assess the overall growth and performance of the Rental Program and its financial impact on the Company's operations.

For the three months ended March 31, 2022, Rental Program NOI decreased $3.6 million, or 11.7 percent as compared to the same period in 2021. The decrease is primarily due to a $3.9 million or 10.8 percent decrease in revenue driven by a 17.5 percent decrease in number of occupied rental homes, as compared to the same period in 2021.

SUN COMMUNITIES, INC.

~~Marinas~~Homes sales NOI

SUN COMMUNITIES, INC.

Rental Program Summary

The following table reflects certain financial and other information for our ~~marinas~~Rental Program as of and for the three months ended March 31, 2022 and 2021 (in ~~thousands,~~millions, except for ~~statistical information):~~


	~~Three Months Ended~~
	~~March 31, 2021~~
~~Financial Information~~
~~Revenues~~
~~Real property (excluding Transient)~~	$	~~46,106~~
~~Real property - transient~~	~~868~~
~~Other~~	~~1,649~~
~~Total Operating~~	~~48,623~~

~~Expenses~~
~~Property Operating~~	~~23,575~~
~~Real Property NOI~~	~~25,048~~
~~Service, retail, dining and entertainment~~
~~Service, retail, dining and entertainment revenue~~	~~44,354~~
~~Service, retail, dining and entertainment expense~~	~~38,009~~
~~Service, Retail, Dining and Entertainment NOI~~	~~6,345~~

~~Marina NOI~~	$	~~31,393~~

~~Other Information - Marinas~~	~~March 31, 2021~~
~~Number of properties(a)~~	~~110~~


~~Total wet slips and dry storage~~	~~38,753~~

~~(a)~~ ~~Marina properties comprised of four properties acquired in 2021 and 106 properties acquired in 2020.~~

~~SUN COMMUNITIES, INC.~~

~~Home Sales Summary~~

~~The following table reflects certain financial and statistical information for our Home Sales Program for the three months ended March 31, 2021 and 2020 (in thousands, except for~~weighted average ~~selling prices~~monthly rental rate and statistical information):

Three Months Ended
March 31, 2021 March 31, 2020 Change % Change
Financial Information
New Homes
New home sales $ 22,972 $ 15,596 $ 7,376 47.3 %
New home cost of sales 18,674 12,610 6,064 48.1 %
Gross Profit – new homes $ 4,298 $ 2,986 $ 1,312 43.9 %
Gross margin % – new homes 18.7 % 19.1 % (0.4) %
Average selling price – new homes $ 154,174 $ 131,059 $ 23,115 17.6 %
Pre-owned Homes
Pre-owned home sales $ 29,227 $ 24,991 $ 4,236 17.0 %
Pre-owned home cost of sales 18,584 17,422 1,162 6.7 %
Gross Profit – pre-owned homes $ 10,643 $ 7,569 $ 3,074 40.6 %
Gross margin % – pre-owned homes 36.4 % 30.3 % 6.1 %
Average selling price – pre-owned homes $ 42,605 $ 38,806 $ 3,799 9.8 %
Total Home Sales
Revenue from home sales $ 52,199 $ 40,587 $ 11,612 28.6 %
Cost of home sales 37,258 30,032 7,226 24.1 %
Home selling expenses 4,332 4,007 325 8.1 %
Home sales NOI $ 10,609 $ 6,548 $ 4,061 62.0 %
Statistical Information
New home sales volume 149 119 30 25.2 %
Pre-owned home sales volume 686 644 42 6.5 %
Total home sales volume 835 763 72 9.4 %


	Three Months Ended
	March 31, 2022		March 31, 2021		Change		% Change
Financial Information
Revenues
Home rent	$	16.1	$	17.0	$	(0.9)	(5.3)	%
Site rent	16.1		19.1		(3.0)		(15.7)	%
Total	32.2		36.1		(3.9)		(10.8)	%

Expenses



Rental Program operating and maintenance	4.9		5.2		(0.3)		(5.8)	%
Rental Program NOI	$	27.3	$	30.9	$	(3.6)	(11.7)	%

Other Information
Number of sold rental homes	177		211		(34)		(16.1)	%
Number of occupied rentals, end of period	9,467		11,473		(2,006)		(17.5)	%
Investment in occupied rental homes, end of period	$	541.9	$	621.9	$	(80.0)	(12.9)	%
Weighted average monthly rental rate, end of period	$	1,139	$	1,055	$	84	8.0	%

~~Gross Profit - New Homes~~The Rental Program NOI is included in Real Property NOI. The Rental Program NOI is separately reviewed to assess the overall growth and performance of the Rental Program and its financial impact on the Company's operations.

For the three months ended March 31, ~~2021, the $1.3~~2022, Rental Program NOI decreased $3.6 million, or ~~43.9~~11.7 percent ~~increase in gross profit is primarily the result of a 25.2 percent increase in new home sales volume coupled with a 17.6 percent increase in the new home average selling price,~~ as compared to the same period in ~~2020.~~

~~Gross Profit - Pre-owned Homes~~

~~For the three months ended March 31, 2021, the $3.1 million, or 40.6 percent increase in gross profit~~2021. The decrease is ~~primarily the result of a 6.1 percent increase in gross margin,~~ primarily due to a ~~9.8~~$3.9 million or 10.8 percent ~~increase~~decrease in ~~the pre-owned home average selling price, coupled with~~revenue driven by a ~~6.5~~17.5 percent ~~increase~~decrease in ~~pre-owned home sales volume,~~number of occupied rental homes, as compared to the same period in ~~2020.~~2021.

SUN COMMUNITIES, INC.

Homes sales NOI

For the three months ended March 31, ~~2021,~~2022, the ~~$4.1~~$8.2 million, or ~~62.0~~77.4 percent, increase in NOI is primarily the r~~esult~~result of ~~a 9.4 percent~~an increase in ~~home sales volume coupled with increase in~~new home average selling price as and pre-owned home average selling price, compared to the same period in ~~2020.~~2021.

4243

SUN COMMUNITIES, INC.

Rental Program Summary

The following table reflects certain financial and other information for our Rental Program as of and for the three months ended March 31, 2022 and 2021 ~~and 2020~~ (in ~~thousands,~~millions, except for weighted average monthly rental rate and statistical information):


		Three Months Ended								Three Months Ended
		March 31, 2021		March 31, 2020		Change		% Change				March 31, 2022		March 31, 2021		Change		% Change
Financial Information	Financial Information										Financial Information
Revenues	Revenues										Revenues
Home rent	Home rent	$	17,022	$	15,469	$	1,553	10.0	%		Home rent	$	16.1	$	17.0	$	(0.9)	(5.3)	%
Site rent	Site rent	19,117		18,007		1,110		6.2	%		Site rent	16.1		19.1		(3.0)		(15.7)	%
Total	Total	36,139		33,476		2,663		8.0	%		Total	32.2		36.1		(3.9)		(10.8)	%

Expenses	Expenses										Expenses

Rental Program operating and maintenance	Rental Program operating and maintenance	5,224		4,823		401		8.3	%		Rental Program operating and maintenance	4.9		5.2		(0.3)		(5.8)	%
Rental Program NOI	Rental Program NOI	$	30,915	$	28,653	$	2,262	7.9	%		Rental Program NOI	$	27.3	$	30.9	$	(3.6)	(11.7)	%

Other Information	Other Information										Other Information
Number of sold rental homes	Number of sold rental homes	211		234		(23)		(9.8)	%		Number of sold rental homes	177		211		(34)		(16.1)	%
Number of occupied rentals, end of period	Number of occupied rentals, end of period	11,473		11,431		42		0.4	%		Number of occupied rentals, end of period	9,467		11,473		(2,006)		(17.5)	%
Investment in occupied rental homes, end of period	Investment in occupied rental homes, end of period	$	621,869	$	596,319	$	25,550	4.3	%		Investment in occupied rental homes, end of period	$	541.9	$	621.9	$	(80.0)	(12.9)	%
Weighted average monthly rental rate, end of period	Weighted average monthly rental rate, end of period	$	1,055	$	1,009	$	46	4.6	%		Weighted average monthly rental rate, end of period	$	1,139	$	1,055	$	84	8.0	%

For the three months ended March 31, 2022, Rental Program NOI ~~increased $2.3~~decreased $3.6 million, or ~~7.9~~11.7 percent as compared to the same period in 2021. The decrease is primarily due to a $3.9 million or 10.8 percent decrease in revenue driven by a 17.5 percent decrease in number of occupied rental homes, as compared to the same period in 2021.

SUN COMMUNITIES, INC.

Marinas Summary

The following table reflects certain financial and other information for our marinas as of and for the three months ended March 31, 2022 and 2021 as(in millions, except for statistical information):


	Three Months Ended
	March 31, 2022		March 31, 2021		Change		% Change
Financial Information
Revenues
Real property (excluding transient)	$	67.0	$	46.1	$	20.9	45.3	%
Real property - transient	2.5		0.9		1.6		177.8	%
Other	2.9		1.6		1.3		81.3	%
Total Operating	72.4		48.6		23.8		49.0	%
Expenses
Property Operating	33.2		23.6		9.6		40.7	%
Real Property NOI	39.2		25.0		14.2		56.8	%
Service, retail, dining and entertainment
Revenue	71.2		44.4		26.8		60.4	%
Expense	59.8		38.0		21.8		57.4	%
NOI	11.4		6.4		5.0		78.1	%

Marina NOI	$	50.6	$	31.4	$	19.2	61.1	%

Statistical information
Number of properties	128		110		18		16.4	%


Total wet slips and dry storage	45,725		39,338		6,387		16.2	%

The Marina Real Property NOI is included in Real Property NOI. The Marina NOI is separately reviewed to assess the overall growth and performance of the marina segment and its financial impact on the Company's operations.

We have reclassified utility revenue of $4.3 million and $2.6 million for the three months ended March 31, 2022 and 2021, to reflect the utility expenses associated with our marina properties portfolio net of recovery.

For the three months ended March 31, 2022 and 2021:

•The $19.2 million, or 61.1 percent increase in Marina NOI is due to a $14.2 million, or 56.8 percent increase in Marina Real Property NOI and a $5.0 million or 78.1 percent increase in Service, Retail, Dining and Entertainment NOI.

•The $14.2 million, or 56.8 percent growth in Marina Real Property NOI is due to a $20.9 million, or 45.3 percent, increase in Real property (excluding transient) revenue due to an increase in the number of owned marina properties compared to the same period in ~~2020.~~ 2021.

•The 5.0 million, or 78.1 percent increase in Service, Retail, Dining and Entertainment NOI is ~~primarily~~ due to an increase in ~~Rental Program~~Real property transient revenue ~~of $2.7 million, or 8.0 percent,~~ due to ~~a 4.6 percent~~an increase in service rates at our marinas and the ~~weighted average monthly rental rate~~addition of service revenue from the acquisition of additional marinas coupled with increased demand and ~~a 0.4 percent increase in~~entry into the ~~number of occupied rentals.~~superyacht market.

4345

SUN COMMUNITIES, INC.

Other Items - Statements of Operations(1)

The following table summarizes other income and expenses for the three months ended March 31, 2022 and 2021 ~~and 2020~~ (in ~~thousands)~~millions):


		Three Months Ended								Three Months Ended
		March 31, 2021		March 31, 2020		Change		% Change				March 31, 2022		March 31, 2021		Change		% Change
Service, retail, dining and entertainment, net	Service, retail, dining and entertainment, net	$	5,181	$	(1,579)	$	6,760	428.1	%		Service, retail, dining and entertainment, net	$	10.3	$	5.2	$	5.1	98.1	%
Interest income	Interest income	$	2,631	$	2,350	$	281	12.0	%		Interest income	$	6.8	$	2.6	$	4.2	161.5	%
Brokerage commissions and other, net	Brokerage commissions and other, net	$	5,960	$	3,913	$	2,047	52.3	%		Brokerage commissions and other, net	$	8.0	$	6.0	$	2.0	33.3	%
General and administrative expense	General and administrative expense	$	38,203	$	25,349	$	12,854	50.7	%		General and administrative expense	$	55.7	$	38.2	$	17.5	45.8	%
Catastrophic event-related charges, net	Catastrophic event-related charges, net	$	2,414	$	606	$	1,808	298.3	%		Catastrophic event-related charges, net	$	—	$	2.4	$	(2.4)	N/M
Business combination expense		$	1,232	$	—	$	1,232	N/A
Business combination expense, net											Business combination expense, net	$	0.5	$	1.2	$	(0.7)	(58.3)	%
Depreciation and amortization	Depreciation and amortization	$	123,304	$	83,689	$	39,615	47.3	%		Depreciation and amortization	$	148.5	$	123.9	$	24.6	19.9	%
Asset impairment charge											Asset impairment charge	$	—	$	—	$	—	N/A
Loss on extinguishment of debt (see Note 8)	Loss on extinguishment of debt (see Note 8)	$	—	$	3,279	$	(3,279)	(100.0)	%		Loss on extinguishment of debt (see Note 8)	$	0.3	$	—	$	0.3	N/A
Interest expense	Interest expense	$	39,517	$	32,416	$	7,101	21.9	%		Interest expense	$	45.2	$	39.5	$	5.7	14.4	%
Interest on mandatorily redeemable preferred OP units / equity	Interest on mandatorily redeemable preferred OP units / equity	$	1,036	$	1,041	$	(5)	(0.5)	%		Interest on mandatorily redeemable preferred OP units / equity	$	1.0	$	1.0	$	—	—	%
Gain / (loss) on remeasurement of marketable securities (see Note 14)		$	3,661	$	(28,647)	$	32,308	112.8	%
Gain / (loss) on foreign currency translation		$	25	$	(17,479)	$	17,504	100.1	%

Gain / (loss) on remeasurement of marketable securities (see Note 15)											Gain / (loss) on remeasurement of marketable securities (see Note 15)	$	(34.5)	$	3.7	$	(38.2)	N/M
Loss on foreign currency translation											Loss on foreign currency translation	$	(2.2)	$	—	$	(2.2)	N/A
Gain on dispositions of properties											Gain on dispositions of properties	$	13.4	$	—	$	13.4	N/A
Other expense, net	Other expense, net	$	(1,099)	$	(972)	$	(127)	13.1	%		Other expense, net	$	(0.6)	$	(0.5)	$	(0.1)	20.0	%
Income / (loss) on remeasurement of notes receivable (see Note 4)		$	376	$	(2,112)	$	2,488	117.8	%
Gain on remeasurement of notes receivable (see Note 4)											Gain on remeasurement of notes receivable (see Note 4)	$	0.2	$	0.4	$	(0.2)	50.0	%
Income from nonconsolidated affiliates (see Note 6)	Income from nonconsolidated affiliates (see Note 6)	$	1,171	$	52	$	1,119	N/M			Income from nonconsolidated affiliates (see Note 6)	$	0.9	$	1.2	$	(0.3)	(25.0)	%
Income / (loss) on remeasurement of investment in nonconsolidated affiliates (see Note 6)		$	104	$	(2,191)	$	2,295	104.7	%
Income on remeasurement of investment in nonconsolidated affiliates (see Note 6)											Income on remeasurement of investment in nonconsolidated affiliates (see Note 6)	$	0.1	$	0.1	$	—	—	%
Current tax benefit / (expense) (see Note 12)	Current tax benefit / (expense) (see Note 12)	$	229	$	(450)	$	679	150.9	%		Current tax benefit / (expense) (see Note 12)	$	(1.3)	$	0.2	$	(1.5)	N/M
Deferred tax benefit (see Note 12)	Deferred tax benefit (see Note 12)	$	147	$	130	$	17	N/M			Deferred tax benefit (see Note 12)	$	—	$	0.1	$	(0.1)	N/M
Preferred return to preferred OP units / equity		$	2,864	$	1,570	$	1,294	82.4	%
Preferred return to preferred OP units / equity interests											Preferred return to preferred OP units / equity interests	$	3.0	$	2.9	$	0.1	3.4	%
Income attributable to noncontrolling interests	Income attributable to noncontrolling interests	$	295	$	(962)	$	1,257	130.7	%		Income attributable to noncontrolling interests	$	(2.2)	$	0.3	$	(2.5)	(833.3)	%

(1)Only items determined by management to be material, of interest, or unique to the periods disclosed above are explained below.

N/M = Percentage change is not meaningful.

Service, retail, dining and entertainment, net - for the three months ended March 31, ~~2021,~~2022, increased primarily due to increase in service rates at our marinas and the addition of service revenue from the acquisition of additional Safe Harbor ~~acquisition in the fourth quarter of 2020.~~marinas.

Interest income - -for the three months ended March 31, ~~2021,~~2022, increased primarily due to ~~higher balances on our~~an increase in the notes ~~receivable.~~receivable to real estate developers average balance in the current period as compared to the same period in 2021.

Brokerage commissions and other, ~~revenues,~~ net - for the three months ended March 31, ~~2021,~~2022, increased primarily due to an increase in brokerage commissions as a result of an increase in the number of brokered home sales, as compared to ~~2020.~~2021.

General and administrative expenses - for the three months ended March 31, ~~2021,~~2022, increased primarily due to an increase in wages and incentives driven by growth in strategic initiatives and acquisition activity as compared to the same period in ~~2020.~~

~~Catastrophic event-related charges, net -~~ ~~for the three months ended March 31, 2021, increased primarily due to fire damages and winter ice storms.~~

~~Business combination expenses~~ - for the three months ended March 31, 2021, were incurred as a result of our recent acquisitions of marinas. Refer to Note 3, "Real Estate Acquisitions and Dispositions" of our accompanying Consolidated Financial Statements for additional information.2021.

Depreciation and amortization - for the three months ended March 31, ~~2021,~~2022, increased as a result of property acquisitions during ~~2020~~2021 and ~~2021.~~2022. Refer to Note 3, "Real Estate Acquisitions and Dispositions," in our accompanying Consolidated Financial Statements for additional information.

~~Loss on extinguishment of debt -~~for the three months ended March 31, 2021, decreased primarily due to no prepayment penalties related to debt and financing activity as compared to the same period in 2020. Refer to Note 8, "Debt and Lines of Credit," in our accompanying Consolidated Financial Statements for additional information.

~~SUN COMMUNITIES, INC.~~

Interest expense - for the three months ended March 31, ~~2021,~~2022, increased primarily due to the ~~addition~~higher carrying balance of debt ~~related to Safe Harbor~~ as compared to the same period in ~~2020.~~2021. Refer to Note 8, "Debt and ~~Lines~~Line of Credit," of our accompanying Consolidated Financial Statements for additional information.

SUN COMMUNITIES, INC.

Gain / (loss) on remeasurement of marketable securities -for the three months ended March 31, ~~2021,~~2022 was a ~~$3.7~~loss of $34.5 million ~~gain~~ as compared to a ~~$28.6~~gain of $3.7 million ~~loss in~~during the same period in ~~2020, which represent remeasurement gains from~~2021 due to the fluctuation in the price of our ~~investment in~~publicly traded marketable securities. Refer to Note ~~14,~~15, "Fair Value of Financial Instruments," in our accompanying Consolidated Financial Statements for additional information.

Gain ~~/ (loss)~~ on ~~foreign currency translation~~dispositions of properties - for the three months ended March 31, ~~2021, was a $25.0 thousand gain as compared~~2022, increased due to a ~~$17.5 million loss in~~gain from the ~~same period in 2020, primarily due to fluctuations in exchange rates on Canadian and Australian denominated currencies.~~

~~Income / (loss) on remeasurement~~sale of ~~notes receivable -~~ ~~represents the adjustment of our in-house financing notes receivable portfolio, for which we elected the fair value option on January 1, 2020.~~three communities during 2022. Refer to Note ~~4, "Notes~~3, "Real Estate Acquisitions and ~~Other Receivables," and Note 14, "Fair Value of Financial Instruments,~~Dispositions," in our accompanying Consolidated Financial Statements for additional information.

~~Income / (loss) on remeasurement of investment in nonconsolidated affiliates -~~ ~~represents the adjustment of our equity investment in GTSC, for which we elected the fair value option on January 1, 2020. Refer to Note 6,"Investment in Nonconsolidated Affiliates," in our accompanying Consolidated Financial Statements for additional information.~~

~~Preferred return to preferred OP units / equity~~ - for the three months ended March 31, 2021, increased primarily as a result of the volume of preferred OP units issued in conjunction with various acquisitions since 2020. Refer to Note 3, "Real Estate Acquisitions and Dispositions," and Note 9, "Equity and Temporary Equity," of our accompanying Consolidated Financial Statements for additional information.

~~Income attributable to noncontrolling interests -~~ ~~for the three months ended March 31, 2021, increased as compared to the same period in 2020, primarily due to improved financial performance of the Company and its consolidated VIEs. Refer to Note7, "Consolidated Variable Interest Entities," in our accompanying Consolidated Financial Statements for additional information.~~

4547

SUN COMMUNITIES, INC.

~~Reconciliation of Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders to~~RECONCILIATION OF NET INCOME ATTRIBUTABLE TO SUN COMMUNITIES, INC. COMMON SHAREHOLDERS TO FFO

The following table reconciles Net income ~~/ (loss)~~ attributable to Sun Communities, Inc. common ~~stockholders~~shareholders to FFO for the three months ended March 31, 2022 and 2021 ~~and 2020~~ (in ~~thousands,~~millions, except for per share amounts):


		Three Months Ended				Three Months Ended
		March 31, 2021		March 31, 2020				March 31, 2022		March 31, 2021
Net Income / (Loss) Attributable to Sun Communities, Inc. Common Stockholders		$	24,782	$	(16,086)
Net Income Attributable to Sun Communities, Inc. Common Shareholders							Net Income Attributable to Sun Communities, Inc. Common Shareholders	$	0.7	$	24.8
Adjustments	Adjustments						Adjustments
Depreciation and amortization	Depreciation and amortization	123,076		83,752			Depreciation and amortization	148.3		123.8
Depreciation on nonconsolidated affiliates		30		—

(Gain) / loss on remeasurement of marketable securities	(Gain) / loss on remeasurement of marketable securities	(3,661)		28,647			(Gain) / loss on remeasurement of marketable securities	34.5		(3.7)
(Gain) / loss on remeasurement of investment in nonconsolidated affiliates		(104)		2,191
(Gain) / loss on remeasurement of notes receivable		(376)		2,112
Gain on remeasurement of investment in nonconsolidated affiliates							Gain on remeasurement of investment in nonconsolidated affiliates	(0.1)		(0.1)
Gain on remeasurement of notes receivable							Gain on remeasurement of notes receivable	(0.2)		(0.4)
Loss attributable to noncontrolling interests	Loss attributable to noncontrolling interests	(147)		(882)			Loss attributable to noncontrolling interests	(2.2)		(0.1)
Preferred return to preferred OP units	Preferred return to preferred OP units	480		874			Preferred return to preferred OP units	2.8		0.5

Gain on dispositions of properties							Gain on dispositions of properties	(13.4)		—

Gain on disposition of assets, net		(8,155)		(5,562)
FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)		135,925		95,046
Gain on dispositions of assets, net							Gain on dispositions of assets, net	(15.1)		(8.2)
FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities(1)							FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities(1)	$	155.3	$	136.6

Adjustments	Adjustments						Adjustments

Business combination expense and other acquisition related costs(2)	Business combination expense and other acquisition related costs(2)	1,953		385			Business combination expense and other acquisition related costs(2)	3.1		1.9

Loss on extinguishment of debt	Loss on extinguishment of debt	—		3,279			Loss on extinguishment of debt	0.3		—

Catastrophic event-related charges, net	Catastrophic event-related charges, net	2,414		606			Catastrophic event-related charges, net	—		2.4
Loss of earnings - catastrophic event-related(3)		200		300
Earnings - catastrophic event-related charges(3)							Earnings - catastrophic event-related charges(3)	—		0.2

(Gain) / loss on foreign currency translation		(25)		17,479
Other expense, net		716		302
Deferred tax benefits		(147)		(130)
Loss on foreign currency translation							Loss on foreign currency translation	2.2		—

Other adjustments, net(4)							Other adjustments, net(4)	1.9		(0.1)

Core FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities(1)		$	141,036	$	117,267
Core FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities(1)							Core FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities(1)	$	162.8	$	141.0

Weighted average common shares outstanding - basic	Weighted average common shares outstanding - basic	107,932		92,410			Weighted average common shares outstanding - basic	115.3		107.9
Add	Add						Add
Common shares dilutive effect: March 2021 forward equity offering		229		—
Common stock issuable upon conversion of stock options		—		1
Common shares dilutive effect from forward equity sale							Common shares dilutive effect from forward equity sale	0.2		0.2

Restricted stock	Restricted stock	191		524			Restricted stock	0.4		0.2
Common OP units	Common OP units	2,596		2,412			Common OP units	2.5		2.6

Common stock issuable upon conversion of certain preferred OP units	Common stock issuable upon conversion of certain preferred OP units	791		1,166			Common stock issuable upon conversion of certain preferred OP units	2.8		0.8

Weighted Average Common Shares Outstanding - Fully Diluted	Weighted Average Common Shares Outstanding - Fully Diluted	111,739		96,513			Weighted Average Common Shares Outstanding - Fully Diluted	121.2		111.7

FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities Per Share - Fully Diluted		$	1.22	$	0.98
FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities Per Share - Fully Diluted							FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities Per Share - Fully Diluted	$	1.28	$	1.22

Core FFO Attributable to Sun Communities, Inc. Common Stockholders and Dilutive Convertible Securities Per Share - Fully Diluted		$	1.26	$	1.22
Core FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities Per Share - Fully Diluted							Core FFO Attributable to Sun Communities, Inc. Common Shareholders and Dilutive Convertible Securities Per Share - Fully Diluted	$	1.34	$	1.26

(1)The effect of certain anti-dilutive convertible securities is excluded from these items.

(2)These costs represent ~~the~~(a) business combination expenses and expenses incurred to bring recently acquired properties up to our operating standards, including items such as tree trimming and painting costs that do not meet our capitalization ~~policy.~~policy, and (b) nonrecurring integration expenses associated with a new acquisition for the three months ended March 31, 2022 and 2021, and (c) acquisition's dead deal cost and (d) cost associated with the termination of the bridge loan commitment related to the acquisition of Park Holidays for the three months ended March 31, 2022.

(3)Adjustment ~~represents~~related to estimated loss of earnings in excess of the applicable business interruption deductible in relation to our three Florida Keys communities that were impaired by Hurricane Irma which had not yet been received from our insurer.

(4) Other adjustments, net include RV rebranding non-recurring cost for the three months ended March 31, 2022, and the change in estimated contingent consideration payments and the deferred tax benefit for the three months ended March 31, 2021.

SUN COMMUNITIES, INC.

LIQUIDITY AND CAPITAL RESOURCES

Short-term Liquidity

Our principal short-term liquidity demands have historically been, and are expected to continue to be, distributions to our ~~stockholders~~shareholders and the unit holders of the Operating Partnership, property acquisitions, development and expansion of our properties, capital improvement of our properties, the purchase of new and pre-owned homes, ~~property acquisitions, development and expansion of properties,~~ and debt repayment.

~~Subject to market conditions, we~~ We intend to ~~continue to identify opportunities to expand~~meet our ~~development pipeline and acquire existing properties. We finance acquisitions~~short-term liquidity requirements through available cash ~~secured financing,~~balances, cash flows generated from operations, draws on our ~~lines of credit, the assumption of existing debt on properties~~Senior Credit Facility, and the ~~issuance~~use of debt and equity ~~securities. We will continue to evaluate acquisition opportunities that meet~~offerings under our ~~criteria.~~shelf registration statement. Refer to Note ~~3, "Real Estate Acquisitions~~8, "Debt and ~~Dispositions,~~Line of Credit," and Note 9, "Equity and Temporary Equity," in ~~the~~our accompanying Consolidated Financial Statements for ~~information regarding recent property acquisitions.~~additional information.

We also intend to continue to strengthen our capital and liquidity positions by focusing on our core fundamentals, which are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs. We ~~intend~~take a disciplined approach to selecting the optimal mix of financing sources to meet our liquidity ~~requirements~~demands and minimize our overall cost of capital. In June 2021, we received investment grade ratings of BBB and Baa3 with a stable outlook from S&P Global and Moody's, respectively. We plan on continuing to leverage this enhanced strength in the credit markets to utilize a greater proportion of unsecured debt to lower our cost of capital and increase our financial flexibility.

Acquisitions

Subject to market conditions, we intend to continue to identify opportunities to expand our development pipeline and acquire existing properties. We finance acquisitions through available cash, ~~balances, cash flows generated from operations,~~secured financing, draws on our ~~lines~~Senior Credit Facility, the assumption of ~~credit,~~existing debt on properties and the ~~use~~issuance of debt and equity ~~offerings under~~securities. We will continue to evaluate acquisition opportunities that meet our ~~shelf registration statement.~~criteria. Refer to Note ~~8, "Debt~~3, "Real Estate Acquisitions and ~~Lines of Credit," and Note 9, "Equity and Temporary Equity,~~Dispositions," in the accompanying Consolidated Financial Statements for ~~additional information.~~information regarding recent property acquisitions.

Subsequent to the three months ended March 31, 2022, we completed our previously announced acquisition of Park Holidays. The acquisition values Park Holidays at an enterprise value of £950 million (or approximately $1.2 billion). As consideration for the acquisition, we (a) issued an aggregate of 186,044 shares of our common stock with a value of approximately $34.0 million as of the closing to certain individual sellers who are also members of Park Holidays' senior management, and (b) paid the remainder of the purchase price in cash.

Capital Expenditures ~~- MH, RV and Marinas~~

Our capital expenditures include expansion sites and development construction costs, ~~lot modifications,~~ recurring capital expenditures, ~~and~~lot modifications, growth projects, acquisition-related capital expenditures, rental home ~~purchases.~~purchases and rebranding costs.

Our capital expenditure activity is summarized as follows (in millions):


	Three Months Ended
	March 31, 2022		March 31, 2021
Expansion and Development Expenditures	$	47.4	$	46.9
Recurring Capital Expenditures	15.8		13.6
Lot Modifications Expenditures	6.4		7.3
Growth Projects	22.7		18.1
Acquisition-related Capital Expenditures	62.6		33.6
Rental Program	28.9		27.7
Rebranding Cost	3.7		—
Other	(4.8)		4.8
Total capital expenditures activity	$	182.7	$	152.0

Expansion and development ~~activities costs of $46.9 million and $60.2 million, were completed for the three months ended March 31, 2021 and 2020, respectively. Expansion and development activities consisted~~expenditures - consist primarily of construction ~~of sites~~costs such as roads, activities and ~~other~~amenities, and costs necessary to complete home and RV site improvements, such as driveways, sidewalks and landscaping at our MH communities and RV ~~properties.~~resorts. Expenditures also include costs to rebuild after damage has been incurred at MH, RV or marina properties, and research and development.

Lot modification expenditures were $7.3 million and $7.9 million, for the three months ended March 31, 2021 and 2020, respectively, at our MH and RV properties. These expenditures improve asset quality in our communities and are incurred when an existing home is removed and the site is prepared for a new home (more often than not, a multi-sectional home). These activities, which are mandated by strict manufacturer's installation requirements and state building codes, include items such as new foundations, driveways and utility upgrades.

SUN COMMUNITIES, INC.

Recurring capital expenditures ~~at our MH and RV properties were $10.5 million and $5.9 million, for the three months ended March 31, 2021 and 2020, respectively. These expenditures~~ - relate to our continued commitment to the upkeep of our MH and RV ~~properties.~~

~~Recurring capital expenditures at our marinas were $3.1 million for the three months ended March 31, 2021,~~properties and include items such ~~as:~~as dredging, dock repairs and improvements, and equipment maintenance and ~~upgrades.~~upgrades related to our marinas.

~~Growth project~~Lot modification capital expenditures ~~were $18.1 million~~ - are incurred to modify the foundational structures required to set a new home after a previous home has been removed. These expenditures are necessary to create a revenue stream from a new site renter and ~~$4.4 million, for~~often improve the ~~three months ended March 31, 2021 and 2020, respectively.~~ quality of the community. Other lot modification expenditures include land improvements added to annual RV sites to aid in the conversion of transient RV guests to annual contracts.

Growth projects - consist of revenue generating or expense reducing activities at MH communities, RV resorts and marinas. This includes, but is not limited to, utility efficiency and renewable energy projects, site, slip or amenity upgrades such as the addition of a garage, shed or boat lift, and other special capital projects that substantiate an incremental rental increase.

~~We invest~~Acquisition-related capital expenditures - consist of capital improvements identified during due diligence that are necessary to bring our communities, resorts, and marinas up to our operating standards. These include items such as: upgrading clubhouses; landscaping; new street light systems; new mail delivery systems; pool renovation including larger decks, heaters, and furniture; new maintenance facilities; lot modifications; and new signage.

Rental program - investment in the acquisition of homes intended for the Rental ~~Program.~~Program and the purchase of vacation rental homes at our RV resorts. Expenditures for these investments depend upon the condition of the markets for repossessions and new home sales, ~~as well as~~rental homes and vacation rental homes. ~~We finance certain~~

Rebranding cost - includes new signage at our RV resorts and costs of our new home purchases with a $12.0 million manufactured home floor plan facility. Our ability to purchase homes for sale or rent may be limited by cash received from third-party financing of our home sales, available manufactured home floor plan financingbuilding an RV mobile application and ~~working capital available on our lines of credit.~~updated website.

~~SUN COMMUNITIES, INC.~~

Cash Flow Activities

Our cash flow activities are summarized as follows (in ~~thousands)~~millions):


		Three Months Ended					Three Months Ended
		March 31, 2021		March 31, 2020			March 31, 2022		March 31, 2021
Net Cash Provided by Operating Activities	Net Cash Provided by Operating Activities	$	220,490	$	118,513	Net Cash Provided by Operating Activities	$	225.7	$	220.5
Net Cash Used for Investing Activities	Net Cash Used for Investing Activities	$	(285,978)	$	(169,330)	Net Cash Used for Investing Activities	$	(484.2)	$	(285.9)
Net Cash Provided by Financing Activities	Net Cash Provided by Financing Activities	$	93,002	$	411,109	Net Cash Provided by Financing Activities	$	282.9	$	93.0
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash		$	19	$	(382)

Cash, cash equivalents, and restricted cash increased by ~~approximately $27.5~~$24.4 million from ~~$92.6~~$78.2 million as of December 31, ~~2020,~~2021, to ~~$120.2~~$102.6 million as of March 31, ~~2021.~~2022.

Operating ~~Activities~~activities - Net cash provided by operating activities increased by ~~$102.0~~$5.2 million ~~from $118.5~~to $225.7 million for the three months ended March 31, ~~2020~~2022, compared to $220.5 million for the three months ended March 31, 2021. The increase was driven by improved operating performance at our MH, RV and marina properties.

Our net cash flows provided by operating activities from continuing operations may be adversely impacted by, among other things: (a) the market and economic conditions in our current markets generally, and specifically in the metropolitan areas of our current markets; (b) lower occupancy and rental rates of our properties; (c) increased operating costs, such as wage and benefit costs, insurance premiums, real estate taxes and utilities, that cannot be passed on to our tenants; (d) decreased sales of manufactured homes; (e) current volatility in economic conditions and the financial markets; and (f) the effects of the COVID-19 pandemic. See "Risk Factors" in Part I, Item 1A of our ~~2020~~2021 Annual Report.

Investing ~~Activities~~activities - Net cash used for investing activities ~~was $286.0~~increased by $198.3 million to $484.2 million for the three months ended March 31, ~~2021,~~2022, compared to ~~$169.3~~$285.9 million for the three months ended March 31, ~~2020.~~2021. The increase in Net cash used for investing activities was primarily driven by an increase in cash deployed to acquire new properties, capital expenditure activity, and issuance of notes and other receivables. Refer to the consolidated statements of Cash Flow for detail on the net cash used on investing activities during the three months ended March 31, 2022 and 2021. Refer to Note 3, "Real Estate Acquisitions and Dispositions," and Note 4. "Notes and Other Receivables," in our accompanying Consolidated Financial Statements for additional ~~information.~~information on acquisitions and issuance of notes and other receivables.

SUN COMMUNITIES, INC.

Financing ~~Activities~~activities - Net cash provided by financing activities ~~was~~increased by $189.9 million to $282.9 million for the three months ended March 31, 2022, compared to $93.0 million for the three months ended March 31, ~~2021, compared~~2021. The increase in Net cash provided by financing activities was primarily driven by a decrease in payments, and an increase in borrowings, under our Senior Credit Facility, and a decrease in proceeds due to ~~$411.1 million for~~a public equity offering during the three months ended March 31, ~~2020.~~2021 that did not exist during the three months ended March 31, 2022. Refer to the consolidated statements of Cash Flow for detail on the net cash provided by financing activities during the three months ended March 31, 2022 and 2021. Refer to Note 8, "Debt and ~~Lines~~Line of Credit," and Note 9, "Equity and Temporary Equity," in our accompanying Consolidated Financial Statements for additional information.

~~Financial Flexibility~~Equity and Debt Activity

On March 2, 2021, we priced a $1.1 billion underwritten public offering of an aggregate of 8,050,000 shares at a public offering price of $140.00 per share, before underwriting discounts and commissions. The offering consisted of 4,000,000 shares offered directly by us and 4,050,000 shares offered under a forward equity sales agreement (the "March 2021 ForwardPublic Equity Offering"). We sold the 4,000,000 shares on March 9, 2021 and received net proceeds of $537.6 million. We may elect to settle the forward sale agreement relating to the remaining 4,050,000 shares upon one or more forward settlement dates no later than March 2022. We may also elect to cash settle or net share settle all or a portion of our obligations under the March 2021 Forward Equity Offering if we conclude it is in our best interest to do so. If we elect to cash settle or net settle the March 2021 Forward Equity Offering, we may not receive any proceeds. If we fully physically settle the March 2021 Forward Equity Offering, we expect to receive net proceeds of approximately $544.3 million.Offerings

~~On September 30, 2020 and October 1, 2020,~~In November 2021, we entered into ~~two forward sale agreements (the "September 2020~~the November 2021 Forward ~~Equity Offering") relating to~~Sale Agreements in connection with an underwritten registered public offering of ~~9,200,000~~4,025,000 shares of our common stock at a public offering price of ~~$139.50 per share. The offering closed on October 5, 2020.~~$185.00. We did not initially receive any proceeds from the sale of shares of our common stock inby the ~~offering. On October 26, 2020, we physically~~forward purchaser or its affiliates. This forward sale agreement was not settled as of March 31, 2022.

At the ~~September 2020 Forward Equity~~Market Offering (by the delivery of shares of our common stock) and received net proceeds of approximately $1.2 billion. We used approximately $1.1 billion of the net proceeds to fund the cash portion of the Safe Harbor purchase price, and the remainder for working capital and general corporate purposes.Sales Agreement

In ~~May 2020,~~December 2021, we ~~closed~~entered into the December 2021 Sales Agreement, with certain sales agents and forward sellers pursuant to which we may sell, from time to time, up to an ~~underwritten registered public offering~~aggregate gross sales price of ~~4,968,000~~$1.25 billion of our common stock through the sales agents, acting as our sales agents or, if applicable, as forward sellers, or directly to the sales agents as principals for their own accounts. We simultaneously terminated our existing sales agreement upon entering into the December 2021 Sales Agreement.

We entered into forward sales agreements with respect to 600,503 shares of common ~~stock. Proceeds~~stock under our at the market offering program for $107.9 million during the three months ended March 31, 2022. We also entered into forward sale agreements with respect to 1,820,109 shares of common stock under our at the market offering program for $356.5 million during the year ended December 31, 2021. None of these forward sale agreements was settled as of March 31, 2022.

Settlement of Forward Sale Agreements

Subsequent to the three months ended March 31, 2022, on April 15, 2022, we settled forward sale agreements with respect to 1,200,000 shares of common stock under our at the market offering program. We also settled forward sale agreements with respect to 4,025,000 shares of common stock under the November 2021 Forward Sale Agreements. The aggregate net proceeds from the ~~offering were $633.1 million after deducting expenses related to the offering.~~settlement of these forward sale agreements was $934.9 million. We used the net proceeds to repay borrowings outstanding under our Senior Credit Facility. Refer to Note 19, "Subsequent Events," for information regarding the settlement of ~~this~~the forward sales agreements completed after March 31, 2022.

Senior Unsecured Notes

On April 12, 2022, the Operating Partnership issued $600.0 million of senior unsecured 2032 Notes with an interest rate of 4.2 percent and a 10-year term, due April 15, 2032. The net proceeds from the offering were approximately $592.3 million after deducting underwriters' discounts and estimated offering expenses. We used the net proceeds from the offering to repay borrowings outstanding under our Senior Credit Facility. In connection with the ~~revolving loan under~~2032 Notes issuance, we settled four 10-year Treasury rate locks totaling $600.0 million and received a settlement payment of $35.3 million, which is included in the Accumulated other comprehensive income balance in our Consolidated Balance Sheets, and will be amortized into interest expense on a straight line basis over the 10-year term of the hedged transaction. This lowers the effective interest rate on the 2032 Notes from 4.2 percent to 3.6 percent.

In October 2021, the Operating Partnership issued $450.0 million of senior ~~credit facility.~~unsecured 2028 Notes with an interest rate of 2.3 percent and a seven-year term, due November 1, 2028. In addition, the Operating Partnership issued $150.0 million of senior unsecured 2031 Notes (as defined below) with an interest rate of 2.7 percent and a ten-year term due July 15, 2031. The net proceeds from the offering were approximately $595.5 million after deducting underwriters' discounts and estimated offering expenses.

In June 2021, the Operating Partnership issued $600.0 million of senior unsecured 2031 Notes with an interest rate of 2.7 percent and a ten-year term, due July 15, 2031. The net proceeds from the offering were approximately $592.4 million, after deducting underwriters' discounts and estimated offering expenses.

4851

SUN COMMUNITIES, INC.

~~In July 2017,~~The proceeds from the 2028 Notes and the 2031 Notes were used to pay down borrowings under our Senior Credit Facility. The total outstanding balance of senior unsecured notes was $1.2 billion at March 31, 2022.

The obligations of the Operating Partnership to pay principal, premiums, if any, and interest on the 2028 Notes, 2031 Notes, and 2032 Notes are guaranteed on a senior basis by Sun Communities, Inc. The irrevocable guarantee is full and unconditional, and the Operating Partnership is a consolidated subsidiary of the Company. Under Rule 3-10 of Regulation S-X, as amended, subsidiary issuers of obligations guaranteed by its parent company are not required to provide separate financial statements, provided that the subsidiary obligor is consolidated into the parent company's consolidated financial statements, the parent guarantee is "full and unconditional" and, subject to certain exceptions, the alternative disclosure required by Rule 13-01 is provided, which includes narrative disclosure and summarized financial information. Accordingly, separate consolidated financial statements of the Operating Partnership have not been presented. Furthermore, as permitted under Rule 13-01(a)(4)(vi), we have excluded the summarized financial information for the Operating Partnership as the assets, liabilities and results of operations of the Operating Partnership are not materially different from the corresponding amounts presented in our consolidated financial statements and management believes such summarized financial information would be repetitive and not provide incremental value to investors.

Line of Credit

On April 7, 2022, in conjunction with the closing of the Park Holidays acquisition, we amended our Senior Credit Facility to increase its aggregate amount to $4.2 billion with the ability to upsize the total borrowings by an additional $800 million, subject to certain conditions. Refer to Note 19, "Subsequent Events," for information regarding the amendment of our Senior Credit Facility completed after March 31, 2022.

On June 14, 2021, we entered into ~~an at the market offering sales~~a senior credit agreement (the ~~"Sales~~"Credit Agreement") with certain ~~sales agents (collectively,~~lenders. The Credit Agreement combined and replaced our prior $750.0 million credit facility, which was scheduled to mature on May 21, 2023, (the "A&R Facility"), and the ~~"Sales Agents"~~$1.8 billion credit facility between Safe Harbor and certain lenders, which was scheduled to mature on October 11, 2024 (the "Safe Harbor Facility")~~, whereby~~. The Safe Harbor Facility was terminated in connection with the execution of the Credit Agreement. We repaid all amounts due and outstanding under the Safe Harbor Facility on or prior to the effective date. We recognized a Loss on extinguishment of debt in our Consolidated Statement of Operations related to the termination of the A&R Facility and the Safe Harbor Facility of $0.2 million and $7.9 million, respectively.

Pursuant to the Credit Agreement, we may ~~offer and sell shares of our common stock, having an aggregate offering price of~~borrow up to ~~$450.0 million, from time~~$2.0 billion under a revolving loan (the "Senior Credit Facility"). The Senior Credit Facility is available to ~~time through~~fund all of the ~~Sales Agents.~~Company's business, including its marina business conducted by Safe Harbor. The ~~Sales Agents are entitled~~Credit Agreement also permits, subject to ~~compensation~~the satisfaction of certain conditions, additional borrowings (with the consent of the lenders) in an ~~agreed~~ amount not to exceed ~~2.0 percent~~$1.0 billion with the option to treat all, or a portion, of the gross price per share for any shares sold under the Sales Agreement. Through March 31, 2021, we have sold shares of our common stock for gross proceeds of $163.8 million under the Sales Agreement. There were no issuances of common stock under the Sales Agreement during the three months ended March 31, 2021 or during the year ended December 31, 2020.such additional funds as an incremental term loan.

~~In October 2019, we assumed a term loan facility with Citibank, N.A. ("Citibank"), in the amount of $58.0 million in relation to an acquisition.~~ The ~~term loan~~Senior Credit Facility has a four-year term ending ~~October 29, 2023,~~June 14, 2025, and, ~~bears interest~~ at ~~a floating rate based on~~our option, the Eurodollar rate or Prime rate plus a margin ranging from 1.20 percent to 2.05 percent. The outstanding balance as of March 31, 2021 and December 31, 2020 was $42.5 million and $45.0 million, respectively.

In May 2019, we amended and restated our credit agreement with Citibank and certain other lenders. Pursuant to the credit agreement, we entered into an unsecured senior credit facility with Citibank and certain lenders in the amount of $750.0 million, comprised of a $650.0 million revolving loan, with the ability to use up to $100.0 million for advances in Australian dollars, and a $100.0 million term loan (the "A&R Facility"). The A&R Credit Agreement has a four-year term ending May 21, 2023, which canmaturity date may be extended for two additional six-month periods, subject to the satisfaction of certain ~~conditions as defined in~~conditions. However, the ~~credit agreement. The credit agreement also provides for additional commitments in an amount not~~maturity date with respect to ~~exceed $350.0 million. The funding~~$500.0 million of ~~these additional commitments~~available borrowing under the Senior Credit Facility is ~~subject to certain conditions, including obtaining~~October 11, 2024, which, under the ~~consent~~terms of the ~~lenders, some of which are outside of our control. If additional borrowings are made pursuant to any such additional commitments, the aggregate borrowing limit under the A&R Facility~~Credit Agreement, may not be ~~increased up to $1.1 billion.~~

extended. The ~~A&R~~Senior Credit Facility bears interest at a floating rate based on the ~~Eurodollar~~Adjusted Eurocurrency Rate or BBSY rate, ~~or Bank Bill Swap Bid Rate~~ plus a margin that is determined based on ~~our leverage ratio~~the Company's credit ratings calculated in accordance with the ~~credit agreement,~~Credit Agreement, which ~~margin~~ can range from ~~1.20~~0.725 percent to ~~2.10 percent for the revolving loan and 1.20 percent to 2.05 percent for the term loan.~~1.4 percent. As of March 31, ~~2021,~~2022, the margin based on our ~~leverage ratio~~credit ratings was ~~1.20~~0.85 percent on the ~~revolving loan~~Senior Credit Facility.

At the lenders' option, the Senior Credit Facility will become immediately due and ~~1.20 percent on~~payable upon an event of default under the ~~term loan.~~Credit Agreement. We had ~~$352.9 million~~$1.4 billion and $1.0 billion of borrowings on the ~~revolving loan and no borrowings on the term loan, respectively,~~Senior Credit Facility as of March 31, 2022 and December 31, 2021. ~~We had $40.4~~Of the total amount borrowed as of March 31, 2022, $1.2 billion is scheduled to mature on June 14, 2025 and $203.0 million ~~of borrowings~~is scheduled to mature October 11, 2024. These balances are recorded in Unsecured debt on the ~~revolving loan and no borrowings on the term loan, as of December 31, 2020.~~Consolidated Balance Sheets.

The ~~A&R~~Senior Credit Facility provides us with the ability to issue letters of credit. Our issuance of letters of credit does not increase our borrowings outstanding under ~~our line of credit with Citibank, N.A. ("Citibank"),~~the Senior Credit Facility, but does reduce the borrowing amount available. At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, we had ~~approximately~~ $2.2 ~~million and $2.1~~ million of outstanding letters of credit, respectively.

SUN COMMUNITIES, INC.

Financial Covenants

Pursuant to the terms of the ~~A&R~~Senior Credit Facility, we are subject to various financial and other covenants. ~~As of March 31, 2021, we were in compliance with these covenants and do not anticipate that we will be unable to meet these covenants in the near term as a result of COVID-19's impact on our business.~~ The most restrictive financial covenants for the ~~A&R~~Senior Credit Facility are as follows:

Covenant

Requirement

As of March 31, ~~2021~~2022

Maximum leverage ratio

<65.0%

~~27.1%~~28.8%

Minimum fixed charge coverage ratio

>1.40

~~3.65~~4.25

~~Minimum tangible net worth~~

~~>$3,731,946~~

~~$7,757,794~~

Maximum dividend payout ratio

<95.0%

~~58.1%~~49.2%

Maximum ~~variable rate indebtedness~~secured leverage ratio

<~~50.0%~~40.0%

~~5.4%~~14.6%

~~On October 30, 2020, in relation~~In addition, we are required to maintain the following covenants with respect to the acquisition of Safe Harbor, we indirectly assumed approximately $829.0 million of Safe Harbor's debt owed to Citizens Bank N.A. ("Citizens"). On December 22, 2020, this facility was amended to, among other things, (a) increase the size of the revolving commitments available to Safe Harbor from $500.0 million to $1.3 billion, subject to borrowing base availability, (b) modify certain provisions relating to the determination of the borrowing base, (c) increase the cap on the incremental borrowing capacity from $350.0 million to $500.0 million, which allows Safe Harbor to request an increase to the revolving commitments and / or to establish additional term loans subject to the higher cap and the satisfaction of certain condition, and (d) modify certain financial covenants. The revolving loan and term loan under the Safe Harbor facility both expire on October 11, 2024. The term loan component of the Safe Harbor Facility can be extended for two additional 12-month periods, subject to the satisfaction of certain conditions set forth in the credit agreement. The revolving commitments do not have an extension option.

~~SUN COMMUNITIES, INC.~~

Pursuant to the terms of the Safe Harbor Facility, we are subject to various financial and other covenants. As of March 31, 2021, we were in compliance with these covenants and do not anticipate that we will be unable to meet these covenants in the near term as a result of COVID-19's impact on our marina business. The most restrictive financial covenants for the Safe Harbor Facility are as follows:senior unsecured notes payable:

Covenant

Requirement

As of March 31, ~~2021~~2022

~~Maximum leverage ratio~~Total debt to total assets

<≤60.0%

~~20.3%~~40.1%

~~Minimum fixed charge coverage ratio (pre-distribution)~~Secured debt to total assets

~~>1.35~~≤40.0%

~~4.18~~22.1%

~~Minimum fixed charge coverage ratio (post-distribution)~~Consolidated income available for debt service to debt service

~~>1.00~~≥1.50

~~3.25~~5.80

~~Minimum borrowing base coverage ratio~~Unencumbered total asset value to total unsecured debt

~~>1.00~~≥150.0%

~~2.95~~382.1%

As of March 31, 2022, we were in compliance with the above covenants and do not anticipate that we will be unable to meet these covenants in the near term.

Bridge Loan Termination

On March 31, 2022, we terminated our commitment letter with Citigroup, pursuant to which, Citigroup (on behalf of its affiliates), previously committed to lend us up to £950 million, or approximately $1.2 billion converted at the March 31, 2022 exchange rate (the "Bridge Loan"). As of the date of termination, we did not have any borrowings outstanding under the Bridge Loan.

Long-term Financing and Capital Requirements

Long-term Financing

We anticipate meeting our long-term liquidity requirements, such as scheduled debt maturities, large property acquisitions, expansion and development of properties, other nonrecurring capital improvements and Operating Partnership unit redemptions through the long-term unsecured and secured indebtedness and the issuance of certain debt or equity securities ~~and / or the collateralization of our properties.~~subject to market conditions.

We had unrestricted cash on hand as of March 31, ~~2021~~2022, of ~~approximately $105.1~~$90.4 million. As of March 31, ~~2021,~~2022, there ~~is approximately $1.7 billion~~was $572.9 million of remaining capacity on the ~~lines of credit under the A&R Facility and the Safe Harbor~~Senior Credit Facility. At March 31, ~~2021~~2022 we had a total of ~~260~~413 unencumbered MH, RV and RV properties, of which 61 support the borrowing base for the $750.0 million revolving loan under our A&R Facility and 31 support the borrowing base for a term loan facility. The remaining 168 unencumbered MH and RV properties, with an estimated asset value of approximately $2.8 billion as of March 31, 2021 are available to secure potential mortgage debt. At March 31, 2021 we had a total of 110 unencumbered marinas, of which 108 support the borrowing base for our Safe Harbor Facility.marina properties.

From time to time, we may also issue shares of our capital stock, issue equity units in our Operating Partnership, issue unsecured notes, obtain other debt financing or sell selected assets. Our ability to finance our long-term liquidity requirements in such a manner will be affected by numerous economic factors affecting the MH, RV and marina industries at the time, including ~~the effects of the COVID-19 pandemic,~~ the availability and cost of mortgage debt, our financial condition, the operating history of the properties, the state of the debt and equity markets, and the general national, regional and local economic conditions. When it becomes necessary for us to approach the credit markets, the volatility in those markets could make borrowing more difficult to secure, more expensive, or effectively unavailable. In the event our current credit ratings are downgraded, it may become difficult or more expensive to obtain additional financing or refinance existing unsecured indebtedness as maturities become due. See "Risk Factors" in Part I, Item 1A of our ~~2020~~2021 Annual ~~Report and in Part II, Item 1A of this report.~~Report. If we are unable to obtain additional debt or equity financing on acceptable terms, our business, results of operations and financial condition would be adversely impacted.

SUN COMMUNITIES, INC.

As of March 31, ~~2021,~~2022, our net debt to enterprise value was ~~approximately 19.7~~21.9 percent (assuming conversion of all common OP units, Series A-1 preferred OP units, Series A-3 preferred OP units, Series C preferred OP units, Series D preferred OP units, Series E preferred OP units, Series F preferred OP units, Series G preferred OP units, Series H preferred OP units, Series I preferred OP units and Series IJ preferred OP units to shares of common stock). Our debt has a weighted average maturity of ~~approximately 9.5~~8.1 years and a weighted average interest rate of ~~3.4~~3.0 percent.

~~SUN COMMUNITIES, INC.~~

~~Off-Balance Sheet Arrangements~~

~~Our off-balance sheet investments include nonconsolidated affiliates. These investments all have varying ownership structures. Substantially all~~Capital Requirements

Certain of our nonconsolidated affiliates, which are accounted for under the ~~equity method~~equity-method of accounting, ashave incurred indebtedness. We have not guaranteed the debt of our nonconsolidated affiliates in the arrangements referenced below, nor do we have any obligations to fund this debt should the ~~ability~~nonconsolidated affiliates be unable to ~~exercise significant influence, but not control, over the operating and financial decisions of these joint venture arrangements.~~do so. Refer to Note 6, ~~"Investment~~"Investments in Nonconsolidated Affiliates,~~" and Note 8, "Debt and Lines of Credit,~~" in the accompanying Consolidated Financial Statements for additional information ~~on our off-balance sheet investments.~~

~~Nonconsolidated Affiliate Indebtedness~~about these entities.

GTSC- During September 2019, GTSC, entered into a warehouse line of credit with a maximum loan amount of $125.0 million. During September 2020, May 2021 and December 2021, the maximum amount was increased to $180.0 ~~million.~~million, $230.0 million and $255.0 million, respectively, with an option to increase to $275.0 million subject to the lender's consent. As of March 31, 2022, the aggregate carrying amount of debt, including both our and our partner's share, incurred by GTSC was $256.4 million (of which our proportionate share is $102.6 million). As of December 31, 2021, the aggregate carrying amount of debt, including both our and our partner's share, incurred by GTSC was ~~$180.0~~$243.1 million (of which our proportionate share is ~~$72.0~~$97.2 million). The debt bears interest at a variable rate based on ~~LIBOR~~a Commercial Paper or adjusted Secured Overnight Financing Rate plus 1.65 percent per annum and matures on ~~September~~December 15, ~~2023. Refer to Note 6, "Investment in Nonconsolidated Affiliates," in the accompanying Consolidated Financial Statements for additional information on our nonconsolidated affiliates.~~2025.

Sungenia JV - During May 2020, Sungenia JV, entered into a debt facility agreement with a maximum loan amount of ~~27.0~~$27.0 million Australian dollars, or ~~$20.5~~$20.2 million converted at the March 31, ~~2021~~2022 exchange rate. As of March 31, 2022, the aggregate carrying amount of debt, including both our and our partners' share, incurred by Sungenia JV was $6.5 million (of which our proportionate share is approximately $3.2 million). As of December 31, 2021, the aggregate carrying amount of debt, including both our and our partners' share, incurred by Sungenia JV was ~~$6.6~~$6.3 million (of which our proportionate share is ~~$3.3~~$3.1 million). The debt bears interest at a variable rate based on ~~Australian~~the BBSY rate plus 2.05 percent per annum and is available for a minimum of three years. ~~Refer to Note 6, "Investment in Nonconsolidated Affiliates," in the accompanying Consolidated Financial Statements for additional information on our nonconsolidated affiliates.~~

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SUN COMMUNITIES, INC.

CAUTIONARY STATEMENT REGARDING 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 Securities Exchange Act of 1934, as amended (the "Exchange Act"), and we intend that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this filing 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. These forward-looking statements reflect our 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 filing. These risks and uncertainties may cause our actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks disclosed under "Risk Factors" in our ~~2020~~2021 Annual Report, and in our other filings with the SEC, such risks and uncertainties include, but are not limited to:

•~~outbreaks~~Outbreaks of disease, including the COVID-19 pandemic, and related stay-at-home orders, quarantine policies and restrictions on travel, trade and business operations;

•~~changes~~Changes in general economic conditions, including, inflation, deflation, and energy costs, the real estate industry and the markets in which ~~we operate;~~the Company operates;

•~~difficulties~~Difficulties in our ability to evaluate, finance, complete and integrate acquisitions, ~~(including the Safe Harbor acquisition),~~ developments and expansions successfully;

•~~our~~Our liquidity and refinancing demands;

•~~our~~Our ability to obtain or refinance maturing debt;

•~~our~~Our ability to maintain compliance with covenants contained in our debt ~~facilities;~~facilities and our senior unsecured notes;

•~~availability~~Availability of capital;

•~~changes~~Changes in foreign currency exchange rates, including between the U.S. dollar and each of the Canadian dollar, Australian dollar and ~~the Australian dollar;~~Pounds sterling;

•~~our~~Our ability to maintain rental rates and occupancy levels;

•~~our~~Our ability to maintain effective internal control over financial reporting and disclosure controls and procedures;

•~~increases~~Increases in interest rates and operating costs, including insurance premiums and real property taxes;

•~~risks~~Risks related to natural disasters such as hurricanes, earthquakes, floods, droughts and wildfires;

•~~general~~General volatility of the capital markets and the market price of shares of our capital stock;

•~~our~~Our ability to maintain our status as a REIT;

•~~changes~~Changes in real estate and zoning laws and regulations;

•~~legislative~~Legislative or regulatory changes, including changes to laws governing the taxation of REITs;

•~~litigation,~~Litigation, judgments or settlements;

•~~competitive~~Competitive market forces;

•~~the~~The ability of purchasers of manufactured homes and boats to obtain financing; and

•~~the~~The level of repossessions by manufactured home and boat lenders.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. We undertake no obligation to publicly update or revise any forward-looking statements included or incorporated by reference into this filing, whether as a result of new information, future events, changes in our expectations or otherwise, except as required by law.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. All written and oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by these cautionary statements.

5255

SUN COMMUNITIES, INC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the exposure to loss resulting from changes in market factors such as interest rates, foreign currency exchange rates, commodity prices and equity prices.

Interest Rate Risk

Our principal market risk exposure is interest rate risk. We mitigate this risk by maintaining prudent amounts of leverage, minimizing capital costs and interest expense while continuously evaluating all available debt and equity resources and following established risk management policies and procedures, which include the periodic use of derivatives. Our primary strategy in entering into derivative contracts is to minimize the variability that interest rate changes could have on our future cash flows. From time to time, we employ derivative instruments that effectively convert a portion of our variable rate debt to fixed rate debt. We do not enter into derivative instruments for speculative purposes.

Our variable rate debt totaled ~~$917.6 million~~$1.5 billion and ~~$583.1~~$917.6 million as of March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, and ~~bears~~at such dates bore interest at the Adjusted Eurocurrency Rate or BBSY rate, plus a margin, and Prime or various LIBOR ~~rates.~~rates, respectively. If the Adjusted Eurocurrency Rate or BBSY rates, and Prime or LIBOR rates increased or decreased by 1.0 percent, our interest expense would have increased or decreased by ~~approximately~~ $3.0 ~~million and $0.9~~ million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, based on the $1.2 billion ~~and $356.6 million~~ average balances outstanding under our variable rate debt facilities, respectively.

Foreign Currency Exchange Rate Risk

Foreign currency exchange rate risk is the risk that fluctuations in currencies against the U.S. dollar will negatively impact our results of operations. We are exposed to foreign currency exchange rate risk as a result of remeasurement and translation of the assets and liabilities of our Canadian properties, ~~and~~ our Australian equity investment and joint venture, and our United Kingdom assets into U.S. dollars. Fluctuations in foreign currency exchange rates can therefore create volatility in our results of operations and may adversely affect our financial condition.

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, our ~~stockholder's~~shareholder's equity included ~~$254.5~~$834.3 million and ~~$250.8~~$663.6 million from our ~~Canadian subsidiaries~~investments and ~~Australian equity investments, respectively,~~operations in Canada, Australia and the United Kingdom, which collectively represented ~~4.2~~12.5 percent and ~~4.5~~9.9 percent of total ~~stockholder's~~shareholder's equity, respectively. Based on our sensitivity analysis, a 10.0 percent strengthening of the U.S. dollar against the Canadian ~~and~~dollar, Australian dollar and Pounds sterling would have caused a reduction of ~~$25.5~~$83.4 million and ~~$25.1~~$66.4 million to our total ~~stockholder's~~shareholder's equity at March 31, ~~2021~~2022 and December 31, ~~2020.~~2021, respectively.

Capital Market Risk

We are exposed to risks related to the equity capital markets, and our related ability to raise capital through the issuance of our common stock or other equity instruments. We are also exposed to risks related to the debt capital markets, and our related ability to finance our business through borrowings under other financing arrangements. As a REIT, we are required to distribute a significant portion of our taxable income annually, which constrains our ability to accumulate operating cash flow and therefore requires us to utilize debt or equity capital to finance our business. We seek to mitigate these risks by monitoring the debt and equity capital markets to inform our decisions on the amount, timing and terms of capital we raise.

5356

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the specified time periods and accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures (pursuant to Rules 13a-15(e) or 15d-15(e) of the Exchange Act) at March 31, ~~2021.~~2022. Based upon this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of March 31, ~~2021.~~

In October 2020, we completed the acquisition of Safe Harbor and are currently integrating Safe Harbor into our operations, compliance program and internal control processes. Safe Harbor constituted approximately 23 percent of our total assets as of December 31, 2020, including the goodwill and other intangible assets recorded as part of the purchase price allocation, and three percent of our revenues for the year ended December 31, 2020. SEC regulations allow companies to exclude acquisitions from their assessment of internal control over financial reporting during the first year following an acquisition. We have excluded the acquired operation of Safe Harbor from our assessment of our internal control over financial reporting for the three months ended March 31, 2021. As of March 31, 2021, Safe Harbor represented approximately 24 percent of our total assets and 22 percent of our revenues for the quarter ending March 31, 2021.2022.

Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting during the three months ended March 31, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

5457

SUN COMMUNITIES, INC.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Legal Proceedings Arising in the Ordinary Course of Business

Refer to "Legal Proceedings" in Part 1 - Item 1 - Note ~~15,~~16, "Commitments and Contingencies," in our accompanying Consolidated Financial Statements.

Environmental Matters

Item 103 of Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that we reasonably believe will exceed an applied threshold not to exceed $1.0 million. Applying this threshold, there are no environmental matters to disclose for the three months ended March 31, 2022.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the risk factors described in Part 1, Item 1A., "Risk Factors," in our ~~2020~~2021 Annual Report, which could materially affect our business, financial condition or future results. There have been no material changes to the disclosure on these matters as set forth in such report.

5558

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Holders of our OP units have converted the following units during the three months ended March 31, ~~2021:~~2022:


			Three Months Ended				Three Months Ended
			March 31, 2021				March 31, 2022
Series	Series	Conversion Rate	Units / Shares Converted	Common Stock(1)	Series	Conversion Rate	Units / Shares Converted	Common Stock(1)
Common OP units	Common OP units	1.0000	24,912	24,912	Common OP units	1.0000	1,260	1,260
Series A-1 preferred OP units	Series A-1 preferred OP units	2.4390	4,316	10,525	Series A-1 preferred OP units	2.4390	2,694	6,568

Series C preferred OP units					Series C preferred OP units	1.1100	150	166

Series E preferred OP units					Series E preferred OP units	0.6897	5,000	3,448

(1)Calculation may yield minor differences due to rounding incorporated in the above numbers.

All of the securities described above ~~shares of common stock~~ were issued in private placements in reliance on Section 4(a)(2) of the Securities Act, including Regulation D promulgated thereunder, based on certain ~~investments~~investment representations made by the parties to whom the securities were issued. No underwriters were used in connection with any of such issuances.

Purchases of Equity Securities

The following table summarizes our common stock repurchases during the three months ended March 31, 2022:


	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
Period	(a)	(b)		(c)	(d)
January 1, 2022 - January 31, 2022	28,362	$	205.79	—	$	—
February 1, 2022 - February 28, 2022	12,611	$	186.16	—	$	—
March 1, 2022 - March 31, 2022	47,154	$	174.71	—	$	—
Total	88,127	$	186.35	—	$	—

During the three months ended March 31, 2022, we withheld 88,127 shares from employees to satisfy estimated statutory income tax obligations related to vesting of restricted stock awards. The value of the common stock withheld was based on the closing price of our common stock on the applicable vesting date.

ITEM 6. EXHIBITS


Exhibit No.	Description	Method of Filing
3.1	Sun Communities, Inc. Articles of Restatement	Incorporated by reference to Sun Communities, Inc.'s Annual Report on Form 10-K filed on February 22, 2018
3.2	Third Amended and Restated Bylaws	Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on May 12, 2017


10.1	~~Employment Agreement dated~~Second Amendment to the Sun Communities, Inc. First Amended and Restated 2004 Non-Employee Director Option Plan effective as of March 29, ~~2021~~2022#	Filed herewith
10.2	First Amendment to Employment Agreement among Sun Communities, Inc., Sun Communities Operating Limited Partnership and Gary A. ~~Shiffman#~~Shiffman dated March 30, 2022#	Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on ~~March 31, 2021~~April 1, 2022
~~10.2~~10.3	First Amendment to Employment Agreement ~~dated March 29, 2021~~ among Sun Communities, Inc., Sun Communities Operating Limited Partnership and John B. ~~McLaren#~~McLaren dated March 30, 2022#	Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on ~~March 31, 2021~~April 1, 2022
~~10.3~~10.4	First Amendment to Employment Agreement ~~dated March 29, 2021~~ among Sun Communities, Inc., Sun Communities Operating Limited Partnership and Karen J. ~~Dearing#~~Dearing dated March 30, 2022#	Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on April 1, 2022
10.5	First Amendment to Employment Agreement among Sun Communities, Inc., Sun Communities Operating Limited Partnership and Bruce Thelen dated March ~~31, 2021~~30, 2022#	Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on April 1, 2022
10.6	First Amendment to Employment Agreement among Sun Communities, Inc., Sun Communities Operating Limited Partnership and Aaron Weiss dated March 30, 2022#	Incorporated by reference to Sun Communities Inc.'s Current Report on Form 8-K filed on April 1, 2022
22.1	List of issuers of guaranteed securities	Filed herewith
31.1	Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith
31.2	Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Filed herewith
101.INS	XBRL Instance Document	The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith
104	Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101)	Filed herewith

# Management contract or compensatory plan or arrangement.

~~# Management contract or compensatory plan or arrangement~~

5760

SUN COMMUNITIES, INC.

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 thereunto duly authorized.



Dated: April ~~27, 2021~~26, 2022	By:	/s/ Karen J. Dearing
		Karen J. Dearing, Chief Financial Officer and Secretary (Duly authorized officer and principal financial officer)

5861


		March 31, 2021				December 31, 2020
Intangible Asset	Useful Life	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Goodwill	Indefinite	$	438,842	N/A		$	428,833	N/A
In-place leases(1)	Expected term	149,109		(102,521)		145,531		(92,327)
Non-competition agreements	5 years	10,000		(500)		10,000		0
Trademarks and trade names	Various(2)	116,500		(208)		116,500		0
Customer relationships	7 - 10 years	107,958		(3,983)		108,000		(2,371)
Franchise agreements and other intangible assets	5.5 - 20 years	28,266		(4,067)		23,856		(3,578)
Total		$	850,675	$	(111,279)	$	832,720	$	(98,276)


Three Months Ended	Loan Amount			Term (in years)	Interest Rate			Maturity Date
December 31, 2020	$	268,800	(1)	12	2.662	%	(2)	May 1, 2030 November 1, 2032
March 31, 2020	$	230,000		15	2.995	%		April 1, 2035


	March 31, 2021								December 31, 2020 (1)
	MH		RV		Marinas		Consolidated		MH		RV		Marinas		Consolidated
Identifiable Assets
Investment property, net	$	4,828,033	$	3,187,398	$	1,895,719	$	9,911,150	$	4,823,174	$	3,038,686	$	1,853,931	$	9,715,791
Cash, cash equivalents and restricted cash	71,119		38,695		10,360		120,174		53,152		28,919		10,570		92,641
Marketable securities	82,781		45,040		0		127,821		80,776		43,950		0		124,726
Inventory of manufactured homes	30,534		12,708		0		43,242		33,448		13,195		0		46,643
Notes and other receivables, net	149,187		56,264		43,558		249,009		144,027		44,002		33,621		221,650
Goodwill	0		0		438,842		438,842		0		0		428,833		428,833
Other intangible assets, net	31,762		24,287		244,505		300,554		33,998		23,819		247,794		305,611
Other assets, net	155,201		39,198		69,018		263,417		184,917		38,075		47,699		270,691
Total Assets	$	5,348,617	$	3,403,590	$	2,702,002	$	11,454,209	$	5,353,492	$	3,230,646	$	2,622,448	$	11,206,586


Description	Financial Statement Classification	As of March 31, 2021		As of December 31, 2020
Lease Assets
ROU asset obtained in exchange for new finance lease liabilities	Investment property, net	$	4,368	$	4,350
ROU asset obtained in exchange for new operating lease liabilities	Other assets, net	$	59,272	$	48,419
ROU asset obtained relative to below market operating lease	Other assets, net	$	27,426	$	27,614
Lease Liabilities
Finance lease liabilities	Other liabilities	$	4,327	$	4,334
Operating lease liabilities	Other liabilities	$	46,509	$	49,964


	Three Months Ended
	March 31, 2021		March 31, 2021(1)		Change		% Change
Financial Information
Revenue


Real property (excluding Transient)	$	268,766	$	207,186	$	61,580	29.7	%
Real property - transient	32,536		30,347		2,189		7.2	%
Other	29,311		20,816		8,495		40.8	%
Total Operating	330,613		258,349		72,264		28.0	%
Expense






Property Operating	125,961		87,010		38,951		44.8	%
Real Property NOI	$	204,652	$	171,339	$	33,313	19.4	%