# SUN COMMUNITIES INC (SUI) FY 2022 MD&A

Verbatim Item 7 Management's Discussion and Analysis from SUN COMMUNITIES INC's 10-K for fiscal year 2022.

SEC filing source: https://www.sec.gov/Archives/edgar/data/912593/000091259323000080/sui-20221231.htm
Accession: 0000912593-23-000080
Filing date: 2023-02-23
Report date: 2022-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/SUI/
All MD&A years: /company/SUI/mda/
Previous year: /company/SUI/mda/fy2021/ (FY 2021)
Next year: /company/SUI/mda/fy2023/ (FY 2023)

ITEM 7.     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 accompanying footnotes thereto included in this Annual Report on Form 10-K. In addition to the results presented in accordance with GAAP below, we have provided NOI and FFO information as supplemental performance measures. Refer to Non-GAAP Financial Measures in this Item 7 for additional information.

OVERVIEW

We are a fully integrated REIT. As of December 31, 2022, we owned and operated, directly or indirectly, or had an interest in, a portfolio of 669 developed properties located in the U.S., the UK, and Canada, including 353 MH communities, 182 RV communities and 134 marinas. We have been in the business of acquiring, operating, developing and expanding MH and RV communities 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 operations within our MH communities support and enhance our occupancy levels, property performance and cash flows.

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EXECUTIVE SUMMARY

2022 General Overview

•Total revenues for 2022 increased 30.7% to $3.0 billion.

•In April 2022, we completed our previously announced acquisition of Park Holidays, the second largest owner and operator of holiday parks in the UK, at an enterprise value of £950.0 million (or approximately $1.2 billion). At the initial acquisition date, the Park Holidays portfolio was comprised of 40 owned and two managed properties located in the UK with over 15,900 sites and 600 development sites.

•Including Park Holidays, we acquired 69 properties, totaling over 27,000 sites, wet slips and dry storage spaces, and sites for expansion for a total purchase price of $2.2 billion.

•Achieved Constant Currency Core FFO and Core FFO of $7.44 and $7.35 per diluted share and OP unit, respectively, representing increases of 14.3% and 12.9% compared to 2021.

•Achieved Real property Same Property NOI growth of 5.4% for MH and RV and 7.7% for Marina over 2021.

•Increased MH and RV Same Property occupancy by 180 basis points to 98.6% as compared to 96.8% in 2021.

•Achieved 5-year and 10-year total shareholder return of 73.1% and 396.9%, respectively, outperforming the MSCI US REIT, Russell 1000, U.S. REIT Residential and S&P 500 indexes.

•Completed the construction of over 2,000 total sites at six ground-up developments and 11 expansion and re-development properties.

•Settled forward sale agreements related to an underwritten registered public offering of 4,025,000 shares of our common stock and 2,726,212 shares of our common stock sold under our at-the-market offering program for aggregate net proceeds of $1.2 billion.

•Obtained a $4.2 billion multi-currency revolving credit facility, a 110% increase from the prior credit facility.

•Closed $850.0 million of debt transactions, including an offering of underwritten senior unsecured notes of $600.0 million for net proceeds of $592.3 million.

•Completed a timely execution of our disaster preparedness plan that helped us successfully manage Hurricane Ian.

Property Operations

Occupancy in our MH and annual RV properties, as well as our ability to increase rental rates, directly affect revenues. Our revenue streams are predominantly derived from customers renting our sites on a long-term basis. Our Same Property communities continue to achieve revenue and occupancy increases which drive continued NOI growth. Our Same Property marinas achieved revenue increases which contributed to our NOI growth.

[[GREPCENT_TABLE]]
[["","","Year Ended"],["Portfolio Information:","","December 31, 2022","","December 31, 2021","","December 31, 2020"],["Occupancy % - Total Portfolio - MH and Annual RV blended(1)","","95.9","%","","97.4","%","","97.3","%"],["Occupancy % - Same Property - Adjusted MH and Annual RV blended(1)(2)(3)","","98.6","%","","96.8","%","","97.5","%"],["Core FFO per share","","$","7.35","","","$","6.51","","","$","5.09"],["Constant Currency Core FFO per share","","$","7.44","","","$","6.51","","","$","5.09"],["Real property NOI - Total Portfolio (in millions)","","$","1,167.0","","","$","1,002.6","","","$","721.3"],["Real property NOI - Same Property (in millions) - MH and RV(3)","","$","819.7","","","$","777.5","","","$","686.6"],["Real property NOI - Same Property (in millions) - Marina(3)","","$","162.0","","","$","150.5","","","N/A"],["Homes sales volume (excluding UK home sales)","","3,212","","","4,088","","","2,866"],["UK home sales","","2,177","","","N/A","","N/A"]]
[[/GREPCENT_TABLE]]

(1) Occupancy percent includes annual RV sites and excludes transient RV sites.

(2) Occupancy percent excludes recently completed but vacant expansion sites.

(3) Same Property is based on the as reported year end Same Property count for each respective year.

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SUN COMMUNITIES, INC.

Acquisition Activity

During the year ended December 31, 2022, we acquired 61 MH and RV communities and eight marinas, with 24,347 sites, wet slips and dry storage spaces and 2,655 development sites. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for details of our acquisition activities.

Disposition Activity

Management continually evaluates properties within the portfolio for potential disposition opportunities. When a given property no longer fits our desired growth profile, we seek to redeploy capital to properties and geographies fit to provide greater future returns. From time to time, strategic reductions to the portfolio are necessary to reduce exposure to less desirable locations and support long-term positioning of the Company.

During the year ended December 31, 2022, we sold an RV community containing 514 sites located in California for $15.0 million and two MH communities and one community containing MH and RV sites, each located in Florida, with a total of 323 sites for $29.5 million. Refer to Note 3, "Real Estate Acquisitions and Dispositions," for details on the disposition activities.

Development and Expansion Activities

We have been focused on property ground-up developments and expansion opportunities adjacent to our existing properties.

Ground-up Developments - During the year ended December 31, 2022, we delivered over 840 total sites at six ground-up development properties located in Arizona, Texas, North Carolina and Colorado. We have developed nearly 2,900 sites within the past three years.

Expansions - During the year ended December 31, 2022, we expanded nearly 1,160 total sites at 11 properties. We have developed over 2,050 sites within the past three years.

We continue to expand our properties utilizing our inventory of owned and entitled land. We have 16,195 MH and RV sites suitable for future development.

Markets

Our MH and RV properties are largely concentrated in the U.S. in Florida, Michigan, Texas and California, and in the UK, which collectively contain 66.2% of our total MH and RV sites. We have expanded our market share in multiple states through recent acquisitions and increased our property holdings in high-growth areas of the U.S. including retirement and vacation destinations.

We have also experienced strong revenue growth through recent acquisitions of RV communities. The age demographic of RV communities is attractive, as the population of retirement age adults in the U.S. is growing. RV communities have become a trending vacation opportunity not only for the retiree population, but as an affordable vacation alternative for families and millennials.

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SUN COMMUNITIES, INC.

The following table identifies our MH and RV markets by total sites:

[[GREPCENT_TABLE]]
[["","","December 31, 2022","","December 31, 2021"],["Major Market","","Number of Properties","","Total Sites","","% of Total Sites","","Number of Properties","","Total Sites","","% of Total Sites"],["Florida","","129","","","44,278","","","24.6","%","","132","","","46,733","","","29.4","%"],["Michigan","","84","","","33,220","","","18.5","%","","84","","","33,126","","","20.8","%"],["Texas","","31","","","11,344","","","6.3","%","","30","","","10,768","","","6.8","%"],["California","","37","","","8,797","","","4.9","%","","36","","","8,934","","","5.6","%"],["Arizona","","13","","","5,523","","","3.1","%","","12","","","5,308","","","3.3","%"],["Ontario, Canada","","16","","","5,239","","","2.9","%","","16","","","5,237","","","3.3","%"],["Indiana","","12","","","4,178","","","2.3","%","","12","","","4,176","","","2.6","%"],["New Jersey","","11","","","4,042","","","2.2","%","","11","","","3,990","","","2.5","%"],["Colorado","","11","","","3,786","","","2.1","%","","10","","","3,539","","","2.2","%"],["Virginia","","10","","","3,449","","","1.9","%","","10","","","3,435","","","2.2","%"],["Maine","","16","","","3,656","","","2.0","%","","15","","","3,431","","","2.2","%"],["New York","","10","","","2,940","","","1.6","%","","10","","","3,141","","","2.0","%"],["Ohio","","9","","","2,925","","","1.6","%","","9","","","2,925","","","1.8","%"],["South Carolina","","6","","","2,624","","","1.5","%","","6","","","2,624","","","1.7","%"],["New Hampshire","","10","","","2,380","","","1.3","%","","10","","","2,398","","","1.5","%"],["Illinois","","5","","","2,235","","","1.2","%","","5","","","2,235","","","1.4","%"],["Connecticut","","16","","","2,005","","","1.1","%","","16","","","2,005","","","1.3","%"],["Maryland","","6","","","1,863","","","1.0","%","","6","","","1,852","","","1.2","%"],["Delaware","","5","","","1,979","","","1.1","%","","4","","","1,716","","","1.1","%"],["Pennsylvania","","5","","","1,535","","","0.9","%","","5","","","1,536","","","1.0","%"],["Georgia","","4","","","1,417","","","0.8","%","","4","","","1,414","","","0.9","%"],["Oregon","","6","","","1,384","","","0.8","%","","6","","","1,330","","","0.8","%"],["North Carolina","","5","","","1,182","","","0.7","%","","5","","","1,123","","","0.7","%"],["Massachusetts","","3","","","921","","","0.5","%","","3","","","927","","","0.6","%"],["Utah","","6","","","927","","","0.5","%","","6","","","927","","","0.6","%"],["Washington","","2","","","780","","","0.4","%","","2","","","784","","","0.5","%"],["Wisconsin","","2","","","591","","","0.3","%","","2","","","591","","","0.4","%"],["Tennessee","","2","","","545","","","0.3","%","","2","","","545","","","0.3","%"],["Minnesota","","1","","","475","","","0.3","%","","1","","","475","","","0.3","%"],["Iowa","","1","","","413","","","0.2","%","","1","","","413","","","0.3","%"],["Louisiana","","1","","","334","","","0.2","%","","1","","","334","","","0.2","%"],["Nevada","","1","","","324","","","0.2","%","","1","","","324","","","0.2","%"],["Kentucky","","1","","","330","","","0.2","%","","1","","","315","","","0.2","%"],["Alabama","","1","","","497","","","0.3","%","","1","","","167","","","0.1","%"],["Mississippi","","1","","","155","","","0.1","%","","1","","","155","","","0.1","%"],["Montana","","1","","","75","","","\u2014","%","","1","","","75","","","\u2014","%"],["North American Total","","480","","","158,348","","","88.1","%","","477","","","159,008","","","100.0","%"],["United Kingdom","","55","","","21,370","","","11.9","%","","N/A","","N/A","","N/A"],["Total","","535","","","179,718","","","100.0","%","","477","","","159,008","","","100.0","%"]]
[[/GREPCENT_TABLE]]

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SUN COMMUNITIES, INC.

The following table identifies our marina markets by total wet slips and dry storage spaces:

[[GREPCENT_TABLE]]
[["","","December 31, 2022","","December 31, 2021"],["Major Market","","Number of Properties","","Wet Slips","","Dry Storage Spaces","","Total Wet Slips / Dry Storage Spaces","","% Wet Slips / Dry Storage Spaces","","Number of Properties","","Wet Slips","","Dry Storage Spaces","","Total Wet Slips / Dry Storage Spaces","","% Wet Slips / Dry Storage Spaces"],["Florida","","21","","","2,551","","","2,503","","","5,054","","","10.6","%","","20","","","2,701","","","2,532","","","5,233","","","11.6","%"],["California","","11","","","5,360","","","345","","","5,705","","","11.9","%","","9","","","3,884","","","56","","","3,940","","","8.7","%"],["Rhode Island","","12","","","3,291","","","130","","","3,421","","","7.2","%","","12","","","3,308","","","177","","","3,485","","","7.7","%"],["Connecticut","","11","","","3,325","","","\u2014","","","3,325","","","7.0","%","","11","","","3,299","","","\u2014","","","3,299","","","7.3","%"],["Michigan","","7","","","3,120","","","673","","","3,793","","","7.9","%","","6","","","2,637","","","555","","","3,192","","","7.1","%"],["Georgia","","4","","","2,593","","","246","","","2,839","","","5.9","%","","4","","","2,587","","","246","","","2,833","","","6.3","%"],["New York","","9","","","3,018","","","\u2014","","","3,018","","","6.3","%","","8","","","2,783","","","\u2014","","","2,783","","","6.2","%"],["Maryland","","9","","","2,071","","","561","","","2,632","","","5.5","%","","9","","","2,156","","","489","","","2,645","","","5.9","%"],["Massachusetts","","9","","","2,070","","","450","","","2,520","","","5.3","%","","9","","","2,045","","","501","","","2,546","","","5.6","%"],["Kentucky","","5","","","2,332","","","40","","","2,372","","","5.0","%","","5","","","2,365","","","40","","","2,405","","","5.3","%"],["North Carolina","","7","","","1,169","","","1,492","","","2,661","","","5.6","%","","5","","","1,081","","","1,301","","","2,382","","","5.3","%"],["Texas","","3","","","1,841","","","223","","","2,064","","","4.3","%","","3","","","1,841","","","283","","","2,124","","","4.6","%"],["South Carolina","","8","","","1,206","","","610","","","1,816","","","3.8","%","","8","","","1,261","","","613","","","1,874","","","4.1","%"],["Puerto Rico","","1","","","981","","","625","","","1,606","","","3.4","%","","1","","","987","","","625","","","1,612","","","3.6","%"],["Ohio","","2","","","888","","","155","","","1,043","","","2.2","%","","2","","","888","","","139","","","1,027","","","2.3","%"],["Alabama","","1","","","81","","","642","","","723","","","1.5","%","","1","","","81","","","648","","","729","","","1.6","%"],["Mississippi","","1","","","451","","","135","","","586","","","1.2","%","","1","","","453","","","134","","","587","","","1.3","%"],["Arkansas","","1","","","582","","","\u2014","","","582","","","1.2","%","","1","","","582","","","\u2014","","","582","","","1.3","%"],["New Jersey","","2","","","376","","","35","","","411","","","0.9","%","","2","","","488","","","30","","","518","","","1.1","%"],["Tennessee","","2","","","385","","","\u2014","","","385","","","0.8","%","","2","","","384","","","\u2014","","","384","","","0.9","%"],["New Hampshire","","1","","","221","","","\u2014","","","221","","","0.5","%","","1","","","231","","","\u2014","","","231","","","0.5","%"],["Virginia","","2","","","424","","","\u2014","","","424","","","0.9","%","","1","","","228","","","\u2014","","","228","","","0.5","%"],["Vermont","","1","","","127","","","83","","","210","","","0.4","%","","1","","","102","","","72","","","174","","","0.4","%"],["Oklahoma","","1","","","162","","","\u2014","","","162","","","0.3","%","","1","","","172","","","\u2014","","","172","","","0.4","%"],["Maine","","3","","","240","","","10","","","250","","","0.5","%","","2","","","170","","","\u2014","","","170","","","0.4","%"],["","","134","","","38,865","","","8,958","","","47,823","","","","","125","","","36,714","","","8,441","","","45,155"]]
[[/GREPCENT_TABLE]]

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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

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. In addition, we calculate Constant Currency NOI for our UK Operations by translating the operating results from the UK at the foreign currency exchange rate used for guidance. We believe that NOI and Constant Currency NOI provide enhanced comparability for investor evaluation of properties performance and growth over time.

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.

Same Property NOI - A management tool used when evaluating performance and growth of our properties is a comparison of the Same Property portfolio. We define same properties as those we have owned and operated continuously since January 1, 2021. Same properties exclude ground-up development properties, acquired properties and properties sold after December 31, 2020. We believe that same property NOI is helpful to investors as a supplemental comparative performance measure of the income generated from the Same Property portfolio from one period to the next. The Same Property data may change from time-to-time depending on acquisitions, dispositions, management discretion, significant transactions or unique situations. Same Property NOI does not include the revenues and expenses related to home sales, service, retail, dining and entertainment activities at the properties.

FFO

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, real estate related impairment and 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"). In addition, we calculate Constant Currency Core FFO by translating the operating results from the UK, Canada and Australia at the foreign currency exchange rates used for guidance. We believe that Core FFO and Constant Currency Core FFO provide enhanced comparability for investor evaluations of period-over-period results.

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SUN COMMUNITIES, INC.

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 financial performance measure or GAAP cash flow from operating activities as a measure of our liquidity. 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. 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.

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SUN COMMUNITIES, INC.

RESULTS OF OPERATIONS

Summary Statements of Operations

The following tables reconcile the Net income attributable to Sun Communities, Inc. common shareholders to NOI and summarize our consolidated financial results for the years ended December 31, 2022, 2021 and 2020 (in millions):

[[GREPCENT_TABLE]]
[["","","Year Ended"],["","","December 31, 2022","","December 31, 2021","","December 31, 2020"],["Net income attributable to SUI common shareholders","","$","242.0","","","$","380.2","","","$","131.6"],["Interest income","","(35.2)","","","(12.2)","","","(10.1)"],["Brokerage commissions and other revenues, net","","(34.9)","","","(30.2)","","","(17.2)"],["General and administrative","","256.8","","","181.3","","","109.5"],["Catastrophic event-related charges, net","","17.5","","","2.2","","","0.9"],["Business combinations","","24.7","","","1.4","","","23.0"],["Depreciation and amortization","","604.8","","","522.7","","","376.9"],["Loss on extinguishment of debt (see Note 8)","","4.4","","","8.1","","","5.2"],["Interest expense","","229.8","","","158.6","","","129.1"],["Interest on mandatorily redeemable preferred OP units / equity","","4.2","","","4.2","","","4.2"],["(Gain) / loss on remeasurement of marketable securities (see Note 14)","","53.4","","","(33.5)","","","(6.1)"],["(Gain) / loss on foreign currency exchanges","","(5.4)","","","3.7","","","(7.7)"],["Gain on disposition of properties","","(12.2)","","","(108.1)","","","(5.6)"],["Other expense, net","","2.1","","","12.1","","","5.2"],["(Gain) / loss on remeasurement of notes receivable (see Note 4)","","0.8","","","(0.7)","","","3.3"],["Income from nonconsolidated affiliates (see Note 6)","","(2.9)","","","(4.0)","","","(1.7)"],["Loss on remeasurement of investment in nonconsolidated affiliates (see Note 6)","","2.7","","","0.2","","","1.6"],["Current tax expense (see Note 12)","","10.3","","","1.2","","","0.8"],["Deferred tax expense / (benefit) (see Note 12)","","(4.2)","","","0.1","","","(1.6)"],["Preferred return to preferred OP units / equity interests","","11.0","","","12.1","","","6.9"],["Add: Income attributable to noncontrolling interests","","10.8","","","21.5","","","8.9"],["NOI","","$","1,380.5","","","$","1,120.9","","","$","757.1"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","","Year Ended"],["","","December 31, 2022","","December 31, 2021","","December 31, 2020"],["Real property NOI","","$","1,167.0","","","$","1,002.6","","","$","721.3"],["Home sales NOI","","154.6","","","74.4","","","28.6"],["Service, retail, dining and entertainment NOI","","58.9","","","43.9","","","7.2"],["NOI","","$","1,380.5","","","$","1,120.9","","","$","757.1"]]
[[/GREPCENT_TABLE]]

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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, certain properties maintain higher occupancy during the summer months, while other properties maintain higher occupancy during the winter months. Based on 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 RV segment revenue. The following table presents the seasonality of real property-transient revenue for the years ended December 31, 2022, 2021 and 2020:

[[GREPCENT_TABLE]]
[["","Real property - transient revenue (in millions)","","For the Three Months Ended"],["Year","","March 31","","June 30","","September 30","","December 31","","Total"],["2022","$","335.0","","","12.7","%","","27.8","%","","45.8","%","","13.7","%","","100.0","%"],["2021","$","266.6","","","11.9","%","","27.3","%","","44.9","%","","15.9","%","","100.0","%"],["2020","$","134.7","","","18.8","%","","15.6","%","","44.9","%","","20.7","%","","100.0","%"]]
[[/GREPCENT_TABLE]]

In the marina market, 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. The following table presents the seasonality of Marina real property revenue for the years ended December 31, 2022, 2021 and 2020:

[[GREPCENT_TABLE]]
[["","Seasonal real property revenue(in millions)","","For the Three Months Ended"],["Year","","March 31","","June 30","","September 30","","December 31","","Total"],["2022","$","310.2","","","20.1","%","","25.6","%","","29.0","%","","25.3","%","","100.0","%"],["2021","$","246.6","","","17.7","%","","25.0","%","","29.9","%","","27.4","%","","100.0","%"],["2020","$","24.4","","","N/A","","N/A","","N/A","","100.0","%","","100.0","%"]]
[[/GREPCENT_TABLE]]

In 2020, Seasonal real property revenue was recognized 100% in the fourth quarter, given that the Safe Harbor acquisition closed during the fourth quarter.

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Comparison of the Years Ended December 31, 2022 and 2021

Real Property Operations - Total Portfolio

The following tables reflect certain financial and other information for our Total Portfolio as of and for the years ended December 31, 2022 and 2021 (in millions, except for statistical information):

[[GREPCENT_TABLE]]
[["","Year Ended"],["Financial Information","December 31, 2022","","December 31, 2021","","Change","","% Change"],["Revenue"],["Real property (excluding transient and other)","$","1,356.3","","","$","1,165.0","","","$","191.3","","","16.4","%"],["Real property - transient","353.4","","","281.4","","","72.0","","","25.6","%"],["Other","192.5","","","151.8","","","40.7","","","26.8","%"],["Total Operating","1,902.2","","","1,598.2","","","304.0","","","19.0","%"],["Expense"],["Property Operating","735.2","","","595.6","","","139.6","","","23.4","%"],["Real Property NOI","$","1,167.0","","","$","1,002.6","","","$","164.4","","","16.4","%"]]
[[/GREPCENT_TABLE]]

[[GREPCENT_TABLE]]
[["","","As of"],["Other Information","","December 31, 2022","","December 31, 2021","","Change"],["Number of properties(1)","","669","","","602","","","67"],["MH occupancy","","94.8","%"],["RV occupancy(2)","","100.0","%"],["MH & RV blended occupancy(3)","","95.9","%","","97.4","%","","(1.5)","%"],["Sites available for MH & RV development","","16,195","","","10,672","","","5,523"],["Monthly base rent per site - MH","","$","630","","","$","603","","(5)","$","27"],["Monthly base rent per site - RV(4)","","$","544","","","$","523","","(5)","$","21"],["Monthly base rent per site - Total","","$","609","","","$","584","","(5)","$","25"],["Weighted average monthly rental rate - MH Rental Program","","$","1,221","","","$","1,112","","","$","109"]]
[[/GREPCENT_TABLE]]

(1) Includes MH and RV communities 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) Monthly base rent pertains to annual RV sites and excludes transient RV sites.

(5) Canadian currency figures included within the year ended December 31, 2021 have been translated at 2022 average exchange rates, respectively.

The $164.4 million increase in Real Property NOI as compared to the same period in 2021, consists of $42.2 million from Same Property MH and RV, $11.5 million from Same Property Marina, $51.0 million from the UK operations and $59.7 million from other recently acquired or developed properties in the year ended December 31, 2022 as compared to 2021.

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Real Property Operations - Same Property Portfolio

A key management tool used when evaluating performance and growth of our properties is a comparison of the Same Property portfolio. Same Property refers to properties that we have owned for at least the preceding year, exclusive of properties recently completed or under construction, and other properties as determined by management. The Same 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 Property portfolio, management has classified certain items differently than our GAAP statements. The reclassification difference between our GAAP statements and our Same Property portfolio is the reclassification of utility revenues from real property revenue to operating expenses. A significant portion of our utility charges are re-billed to our residents. Additionally, for the MH and RV, the amounts in the tables below reflect constant currency for comparative purposes. For the years ended December 31, 2022 and 2021, Canadian currency figures included within the year ended December 31, 2021 have been translated at 2022 average exchange rates. For the years ended December 31, 2021 and 2020, Canadian currency figures included within the year ended December 31, 2020 have been translated at 2021 average exchange rates.

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Real Property Operations - Same Property - MH and RV United States and Canada

The following tables reflect certain financial and other information for our Same Property MH and RV portfolio as of and for the years ended December 31, 2022 and 2021.

(in millions, except for statistical information).

[[GREPCENT_TABLE]]
[["","Total Same Property","","MH","","RV"],["","Year Ended","","","","","","Year Ended","","","","","","Year Ended"],["Financial Information","December 31, 2022","","December 31, 2021","","Change","","% Change(1)","","December 31, 2022","","December 31, 2021","","Change","","% Change(1)","","December 31, 2022","","December 31, 2021","","Change","","% Change(1)"],["Revenue"],["Real property (excluding transient and other)","$","929.3","","","$","873.0","","","$","56.3","","","6.4","%","","$","739.9","","","$","707.4","","","$","32.5","","","4.6","%","","$","189.4","","","$","165.6","","","$","23.8","","","14.4","%"],["Real property - transient","245.0","","","237.5","","","7.5","","","3.1","%","","1.2","","","1.5","","","(0.3)","","","(14.8)","%","","243.8","","","236.1","","","7.7","","","3.3","%"],["Other","43.5","","","41.9","","","1.6","","","3.9","%","","19.8","","","19.0","","","0.8","","","3.7","%","","23.7","","","22.8","","","0.9","","","4.0","%"],["Total Operating","1,217.8","","","1,152.4","","","65.4","","","5.7","%","","760.9","","","727.9","","","33.0","","","4.5","%","","456.9","","","424.5","","","32.4","","","7.6","%"],["Expense"],["Property Operating","398.1","","","374.9","","","23.2","","","6.2","%","","202.7","","","187.5","","","15.2","","","8.1","%","","195.4","","","187.4","","","8.0","","","4.2","%"],["Real Property NOI","$","819.7","","","$","777.5","","","$","42.2","","","5.4","%","","$","558.2","","","$","540.4","","","$","17.8","","","3.3","%","","$","261.5","","","$","237.1","","","$","24.4","","","10.3","%"]]
[[/GREPCENT_TABLE]]

(1) Percentages are calculated based on unrounded numbers.

[[GREPCENT_TABLE]]
[["","Total Same Property","","MH","","RV"],["","Year Ended","","","","","","Year Ended","","","","","","Year Ended"],["Financial Information","December 31, 2021","","December 31, 2020","","Change","","% Change(1)","","December 31, 2021","","December 31, 2020","","Change","","% Change(1)","","December 31, 2021","","December 31, 2020","","Change","","% Change(1)"],["Revenue"],["Real property (excluding transient and other)","$","875.3","","","$","824.7","","","$","50.6","","","6.1","%","","$","693.4","","","$","663.6","","","$","29.8","","","4.5","%","","$","182.0","","","$","161.1","","","$","20.9","","","13.0","%"],["Real property - transient","194.8","","","144.1","","","50.7","","","35.2","%","","1.4","","","1.7","","","(0.3)","","","(15.2)","%","","193.3","","","142.4","","","50.9","","","35.8","%"],["Other","39.0","","","23.4","","","15.6","","","67.0","%","","19.3","","","10.3","","","9.0","","","87.1","%","","19.7","","","13.0","","","6.7","","","51.1","%"],["Total Operating","1,109.1","","","992.2","","","116.9","","","11.8","%","","714.1","","","675.6","","","38.5","","","5.7","%","","395.0","","","316.5","","","78.5","","","24.8","%"],["Expense"],["Property Operating","345.7","","","305.6","","","40.1","","","13.1","%","","182.8","","","169.1","","","13.7","","","8.1","%","","163.0","","","136.5","","","26.5","","","19.4","%"],["Real Property NOI","$","763.4","","","$","686.6","","","$","76.8","","","11.2","%","","$","531.3","","","$","506.5","","","$","24.8","","","4.9","%","","$","232.0","","","$","180.0","","","$","52.0","","","28.9","%"]]
[[/GREPCENT_TABLE]]

(1) Percentages are calculated based on unrounded numbers.

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[[GREPCENT_TABLE]]
[["","","As of","","","","As of"],["Other Information","","December 31, 2022","","December 31, 2021","","Change","","December 31, 2021","","December 31, 2020","","Change"],["Number of properties(1)","","421","","","421","","","\u2014","","","403","","","403","","","\u2014"],["MH occupancy","","97.1","%","","","","","","97.6","%"],["RV occupancy(2)","","100.0","%","","","","","","100.0","%"],["MH & RV blended occupancy(3)","","97.8","%","","","","","","98.2","%"],["Adjusted MH occupancy(4)","","98.2","%","","","","","","98.6","%"],["Adjusted RV occupancy(5)","","100.0","%","","","","","","100.0","%"],["Adjusted MH & RV blended occupancy(6)","","98.6","%","","96.8","%","(7)","1.8","%","","98.9","%","","97.5","%","(7)","1.4","%"],["Sites available for development","","7,092","","","7,670","","","(578)","","","6,866","","","7,332","","","(466)"],["Monthly base rent per site - MH","","$","635","","","$","607","","(9)","$","28","","","$","611","","","$","591","","(9)","$","20"],["Monthly base rent per site - RV(8)","","$","555","","","$","516","","(9)","$","39","","","$","537","","","$","512","","(9)","$","25"],["Monthly base rent per site - Total","","$","617","","","$","587","","(9)","$","30","","","$","593","","","$","573","","(9)","$","20"],["Monthly base rent per site - MH Rental Program","","$","1,225","","","$","1,117","","","$","108"]]
[[/GREPCENT_TABLE]]

(1) Financial results from properties disposed of during the year have been removed from Same Property reporting.

(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 sites and exclude recently completed but vacant MH expansion sites.

(5) Adjusted occupancy percentages include annual RV sites, and exclude transient RV sites.

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

(7) The occupancy percentages for 2021 of the years ended December 31, 2022 and 2021 and 2020 of the years ended December 31, 2021 and 2020 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.

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

(9) Canadian currency figures included within the year ended December 31, 2021 and 2020 have been translated at 2022 and 2021 average exchange rates, respectively.

For the years ended December 31, 2022 and 2021:

•The Same Property data includes all properties that we have owned and operated continuously since January 1, 2021 exclusive of ground-up development and redevelopment properties recently completed or under construction, and other properties as determined by management. We have reclassified utilities revenues of $79.0 million and $71.4 million for the years ended December 31, 2022 and 2021, respectively, to reflect the utility expenses associated with our Same Property net of recovery.

•The MH segment's increase in NOI of $17.8 million, or 3.3%, when compared to the same period in 2021 is primarily due to an increase in Real property (excluding transient and other) revenue of $32.5 million, or 4.6% partially offset by increased property operating expenses. Real property (excluding transient and other) revenue increased primarily due to a 4.6% increase in monthly base rent.

•The RV segment's increase in NOI of $24.4 million, or 10.3%, when compared to the same period in 2021 is primarily due to an increase in Real property (excluding transient and other) revenue of $23.8 million, or 14.4%, primarily due to 7.6% increase in monthly base rent.

For the years ended December 31, 2021 and 2020:

•The Same Property data includes all properties that we owned and operated continuously since January 1, 2020, exclusive of ground-up development and redevelopment properties recently completed or under construction, and other properties as determined by management. We have reclassified utilities revenues of $69.0 million and $63.1 million rebilled to residents and owners for the years ended December 31, 2021 and 2020, respectively, to reflect the utility expenses associated with our Same Property net of recovery.

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•The MH segment's increase in NOI of $24.8 million, or 4.9%, when compared to the same period in 2020 is primarily due to an increase in Real property (excluding transient and other) revenue of $29.8 million, or 4.5%. Real property (excluding transient and other) revenue increased due to a 3.4% increase in monthly base rent per MH site and a 1.4% increase in occupancy.

•The RV segment's increase in NOI of $52.0 million, or 28.9%, when compared to the same period in 2020 is primarily due to an increase in Real property - transient revenue of $50.9 million, or 35.8%, due to increased transient and vacation rental stays at our resorts. The results of the comparative 2020 period were impacted by the required closure, or delayed opening, of over 40 of our RV resorts due to the COVID-19 pandemic.

Real Property Operations - Same Property - Marina

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

[[GREPCENT_TABLE]]
[["","Year Ended"],["Financial Information","December 31, 2022","","December 31, 2021","","Change","","% Change(1)"],["Revenue"],["Real property (excluding transient and other)","$","221.4","","","$","205.6","","","$","15.8","","","7.7","%"],["Real property - transient","12.4","","","13.0","","","(0.6)","","","(5.1)","%"],["Other","12.3","","","11.4","","","0.9","","","8.7","%"],["Total Operating","246.1","","","230.0","","","16.1","","","7.0","%"],["Expense"],["Property Operating","84.1","","","79.5","","","4.6","","","5.8","%"],["Real Property NOI","$","162.0","","","$","150.5","","","$","11.5","","","7.7","%"]]
[[/GREPCENT_TABLE]]

(1) Percentages are calculated based on unrounded numbers.

[[GREPCENT_TABLE]]
[["","As of"],["","December 31, 2022","","December 31, 2021","","Change","","% Change"],["Other Information"],["Number of properties","101","","","101","","","\u2014","","","\u2014","%"],["Wet slip and dry storage spaces","35,546","","","35,744","","","(198)","","","(0.6)","%"]]
[[/GREPCENT_TABLE]]

The Same Property data includes all marinas that we have owned and operated continuously since January 1, 2021 exclusive of certain properties as determined by management. We have reclassified utility revenues of $11.4 million and $11.1 million for the year ended December 31, 2022 and 2021, respectively, to reflect the utility expenses associated with our Same Property Marina portfolio net of recovery.

For the years ended December 31, 2022 and 2021, the $11.5 million, or 7.7%, increase in Marina Real Property NOI is primarily due to the $15.8 million, or 7.7%, increase in Real property (excluding transient and other) revenue, partially offset by increased property operating expenses.

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UK Operations Summary

The following table reflects certain financial and other information for our UK operations as of and for the period from date of acquisition to December 31, 2022 (in millions, except for statistical information):

[[GREPCENT_TABLE]]
[["","","","","YTD Since AcquisitionDecember 31, 2022"],["Financial Information"],["Revenues"],["Real property (excluding transient and other)","","","","$","60.0"],["Real property - transient","","","","38.5"],["Other","","","","1.2"],["Total Operating","","","","99.7"],["Expenses"],["Property Operating","","","","48.7"],["Real Property NOI","","","","51.0"],["Home Sales"],["Revenue","","","","190.4"],["Cost of home sales","","","","102.4"],["Home selling expenses","","","","5.5"],["NOI","","","","82.5"],["Retail, dining and entertainment"],["Revenue","","","","32.8"],["Expense","","","","38.0"],["Net Operating Loss","","","","(5.2)"],["UK Operations NOI","","","","$","128.3"],["Adjustment"],["Foreign currency translation impact","","","","15.6"],["UK Operations NOI - Constant Currency","","","","$","143.9"],["Other information"],["Number of properties","","","","55"],["Developed sites","","","","18,227"],["Occupied sites","","","","16,223"],["Occupancy","","","","89.0","%"],["Transient sites","","","","3,143"],["Sites available for development","","","","1,888"],["Home Sales"],["New home sales volume","","","","1,158"],["Pre-owned home sales volume","","","","1,019"],["Total home sales volume","","","","2,177"]]
[[/GREPCENT_TABLE]]

UK Operations NOI, a component of our MH segment, is separately reviewed to assess the overall growth and performance of the UK Operations portfolio and its financial impact on our operations.

We have reclassified utility revenue of $8.9 million for the period from date of acquisition through December 31, 2022, to reflect the utility expenses associated with our UK Operations portfolio net of recovery.

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Home Sales Summary (excluding UK home sales)

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

The following table reflects certain financial and statistical information for our Home Sales Program for the years ended December 31, 2022 and 2021 (in millions, except for average selling prices and other information):

[[GREPCENT_TABLE]]
[["","Year Ended"],["","December 31, 2022","","December 31, 2021","","Change","","% Change"],["Financial Information"],["New homes"],["New home sales","$","126.0","","","$","114.9","","","$","11.1","","","9.7%"],["New home cost of sales","103.3","","","94.1","","","9.2","","","9.8%"],["Gross profit \u2013 new homes","22.7","","","20.8","","","1.9","","","9.1%"],["Gross margin % \u2013 new homes","18.0","%","","18.1","%","","(0.1)","%"],["Average selling price \u2013 new homes","$","179,232","","","$","156,902","","","$","22,330","","","14.2%"],["Pre-owned homes"],["Pre-owned home sales","$","149.4","","","$","165.3","","","$","(15.9)","","","(9.6)%"],["Pre-owned home cost of sales","81.6","","","93.0","","","(11.4)","","","(12.3)%"],["Gross profit \u2013 pre-owned homes","67.8","","","72.3","","","(4.5)","","","(6.2)%"],["Gross margin % \u2013 pre-owned homes","45.4","%","","43.7","%","","1.7","%"],["Average selling price \u2013 pre-owned homes","$","59,546","","","$","49,255","","","$","10,291","","","20.9%"],["Total home sales"],["Revenue from home sales","$","275.4","","","$","280.2","","","$","(4.8)","","","(1.7)%"],["Cost of home sales","184.9","","","187.1","","","(2.2)","","","(1.2)%"],["Home selling expenses","18.4","","","18.7","","","(0.3)","","","(1.6)%"],["Home Sales NOI","$","72.1","","","$","74.4","","","$","(2.3)","","","(3.1)%"],["Other Information"],["New home sales volume","703","","","732","","","(29)","","","(4.0)%"],["Pre-owned home sales volume","2,509","","","3,356","","","(847)","","","(25.2)%"],["Total home sales volume","3,212","","","4,088","","","(876)","","","(21.4)%"]]
[[/GREPCENT_TABLE]]

Gross Profit - New Homes

For the year ended December 31, 2022, the $1.9 million, or 9.1%, increase in gross profit is primarily the result of a 14.2% increase in new home average selling price, partially offset by a 4.0% decrease in new home sales volume, as compared to the same period in 2021.

Gross Profit - Pre-owned Homes

For the year ended December 31, 2022, the $4.5 million, or 6.2%, decrease in gross profit is driven by a 25.2% decrease in pre-owned home sales volume, partially offset by a 20.9% increase in the pre-owned home average selling price, as compared to the same period in 2021.

Refer to the UK Operations summary above for financial information related to our home sales in the UK.

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Rental Program Summary

The following table reflects certain financial and other information for our Rental Program for the years ended December 31, 2022 and 2021 (in millions, except for other information):

[[GREPCENT_TABLE]]
[["","Year Ended"],["","December 31, 2022","","December 31, 2021","","Change","","% Change"],["Financial Information"],["Revenues","$","127.6","","","$","138.1","","","$","(10.5)","","","(7.6)","%"],["Expenses","23.9","","","19.7","","","4.2","","","21.3","%"],["Rental Program NOI","$","103.7","","","$","118.4","","","$","(14.7)","","","(12.4)","%"],["Other Information"],["Number of sold rental homes","640","","","1,071","","","(431)","","","(40.2)","%"],["Number of occupied rentals, end of period","9,334","","","9,870","","","(536)","","","(5.4)","%"],["Investment in occupied rental homes, end of period","$","572.3","","","$","556.3","","","$","16.0","","","2.9","%"],["Weighted average monthly rental rate, end of period","$","1,221","","","$","1,112","","","$","109","","","9.8","%"]]
[[/GREPCENT_TABLE]]

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 our operations.

For the year ended December 31, 2022, Rental Program NOI decreased $14.7 million, or 12.4% as compared to the same period in 2021. The decrease is primarily due to a $10.5 million, or 7.6%, decrease in revenue, driven by a 5.4% decrease in the number of occupied rental homes and a 21.3% increase in expenses as compared to the same period in 2021.

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Marina Segment Summary

The following table reflects certain financial and other information for our marinas for the years ended December 31, 2022 and 2021 (in millions, except for other information):

[[GREPCENT_TABLE]]
[["","","","","Year Ended"],["","","","","","","December 31, 2022","","December 31, 2021","","Change","","% Change"],["Financial Information"],["Revenues"],["Real property (excluding transient and other)","","","","","","$","321.8","","$","251.0","","$","70.8","","28.2%"],["Real property - transient","","","","","","18.9","","14.8","","4.1","","27.7%"],["Other","","","","","","23.8","","12.4","","11.4","","91.9%"],["Total Operating","","","","","","364.5","","278.2","","86.3","","31.0%"],["Expenses"],["Property Operating","","","","","","121.4","","95.6","","25.8","","27.0%"],["Real Property NOI","","","","","","243.1","","182.6","","60.5","","33.1%"],["Service, retail, dining and entertainment"],["Revenue","","","","","","402.3","","270.8","","131.5","","48.6%"],["Expense","","","","","","356.9","","241.1","","115.8","","48.0%"],["NOI","","","","","","45.4","","29.7","","15.7","","52.9%"],["Marina NOI","","","","","","$","288.5","","$","212.3","","$","76.2","","35.9%"],["Other Information"],["Number of properties","","","","","","134","","125","","9","","7.2%"],["Total wet slips and dry storage","","","","","","47,823","","45,155","","2,668","","5.9%"]]
[[/GREPCENT_TABLE]]

The Marina NOI is separately reviewed to assess the overall growth and performance of the Marina segment and its financial impact on our results of operations.

We have reclassified utility revenues of $20.2 million and $15.0 million for the years ended December 31, 2022 and 2021, respectively, to reflect the utility expenses associated with our Marina portfolio net of recovery.

For the years ended December 31, 2022 and 2021:

•The $76.2 million, or 35.9% increase in Marina NOI is due to a $60.5 million, or 33.1%, increase in Marina Real Property NOI and a $15.7 million, or 52.9% increase, in Service, Retail, Dining and Entertainment NOI.

•The $60.5 million, or 33.1%, increase in Marina Real Property NOI is due primarily to an increase in the number of owned Marina properties compared to the same period in 2021.

•The $15.7 million, or 52.9%, increase in Service, Retail, Dining and Entertainment NOI is due primarily to increased service rates at our marinas and the addition of service revenue from the acquisition of additional marinas as compared to the same period in 2021.

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Other Items - Statements of Operations(1)

The following table summarizes other income and expenses for the years ended December 31, 2022 and 2021 (amounts in millions):

[[GREPCENT_TABLE]]
[["","Year Ended"],["","December 31, 2022","","December 31, 2021","","Change","","% Change"],["Service, retail, dining and entertainment, net","$","58.9","","","$","43.9","","","$","15.0","","","34.2","%"],["Interest income","$","35.2","","","$","12.2","","","$","23.0","","","188.5","%"],["Brokerage commissions and other, net","$","34.9","","","$","30.2","","","$","4.7","","","15.6","%"],["General and administrative expense","$","256.8","","","$","181.3","","","$","75.5","","","41.6","%"],["Catastrophic event-related charges, net","$","17.5","","","$","2.2","","","$","15.3","","","695.5","%"],["Business combinations","$","24.7","","","$","1.4","","","$","23.3","","","N/M"],["Depreciation and amortization","$","604.8","","","$","522.7","","","$","82.1","","","15.7","%"],["Loss on extinguishment of debt (see Note 8)","$","4.4","","","$","8.1","","","$","(3.7)","","","(45.7)","%"],["Interest expense","$","229.8","","","$","158.6","","","$","71.2","","","44.9","%"],["Interest on mandatorily redeemable preferred OP units / equity","$","4.2","","","$","4.2","","","$","\u2014","","","\u2014","%"],["Gain / (loss) on remeasurement of marketable securities (see Note 14)","$","(53.4)","","","$","33.5","","","$","(86.9)","","","N/M"],["Gain / (loss) on foreign currency exchanges","$","5.4","","","$","(3.7)","","","$","9.1","","","N/M"],["Gain on dispositions of properties","$","12.2","","","$","108.1","","","$","(95.9)","","","(88.7)","%"],["Other expense, net","$","(2.1)","","","$","(12.1)","","","$","10.0","","","(82.6)","%"],["Gain / (loss) on remeasurement of notes receivable (see Note 4)","$","(0.8)","","","$","0.7","","","$","(1.5)","","","N/M"],["Income from nonconsolidated affiliates (see Note 6)","$","2.9","","","$","4.0","","","$","(1.1)","","","(27.5)","%"],["Loss on remeasurement of investment in nonconsolidated affiliates (see Note 6)","$","(2.7)","","","$","(0.2)","","","$","(2.5)","","","N/M"],["Current tax expense (see Note 12)","$","(10.3)","","","$","(1.2)","","","$","(9.1)","","","758.3","%"],["Deferred tax benefit / (expense) (see Note 12)","$","4.2","","","$","(0.1)","","","$","4.3","","","N/M"],["Preferred return to preferred OP units / equity interests","$","11.0","","","$","12.1","","","$","(1.1)","","","(9.1)","%"],["Income attributable to noncontrolling interests","$","10.8","","","$","21.5","","","$","(10.7)","","","(49.8)","%"]]
[[/GREPCENT_TABLE]]

(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 year ended December 31, 2022, increased primarily due to increased service rates at our marinas and acquisitions.

Interest income - for the year ended December 31, 2022, increased primarily due to interest income on a loan provided to a real estate operator to finance its acquisition and development costs in the current period as compared to the same period in 2021.

General and administrative expense - for the year ended December 31, 2022, increased primarily due to the acquisition of Park Holidays, and an increase in wages and incentives driven by growth in strategic initiatives as compared to the same period in 2021.

Catastrophic event-related charges, net - for the year ended December 31, 2022, increased primarily due to charges for impairment, cleanup, debris removal and repairs, partially offset by expected insurance recoveries, at our properties in Fort Myers, Florida, which sustained significant damage from Hurricane Ian. Refer to Note 16, "Commitments and Contingencies," in our accompanying Consolidated Financial Statements for additional information.

Business combinations - for the year ended December 31, 2022, increased primarily as a result of the acquisition of Park Holidays. Refer to Note 3, "Real Estate Acquisitions and Dispositions," in our accompanying Consolidated Financial Statements for additional information.

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

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Interest expense - for the year ended December 31, 2022, increased due to the higher carrying balance of debt and increased interest rates as compared to the same period in 2021. Refer to Note 8, "Debt and Line of Credit," in our accompanying Consolidated Financial Statements for additional information.

Gain / (loss) on remeasurement of marketable securities - for the year ended December 31, 2022, was a loss of $53.4 million, as compared to a gain of $33.5 million during the same period in 2021 due to the fluctuation in the price of our publicly traded marketable securities. Refer to Note 15, "Fair Value of Financial Instruments," in our accompanying Consolidated Financial Statements for additional information.

Gain / (loss) on foreign currency exchanges - for the year ended December 31, 2022, was a gain of $5.4 million, primarily due to the impact of the U.S. dollar strengthening against the Pound sterling on our line of credit. There was a loss of $3.7 million in the same period in 2021, primarily due to the fluctuation of exchange rates on Canadian and Australian denominated currencies.

Gain on dispositions of properties - for the year ended December 31, 2022, decreased due to a lower net gain on the sale of four properties as compared to a gain on the sale of six properties during the same period in 2021. Refer to Note 3, "Real Estate Acquisitions and Dispositions," in our accompanying Consolidated Financial Statements for additional information.

Other expense, net - for the year ended December 31, 2022, was an expense of $2.1 million, compared to an expense of $12.1 million, for the year ended December 31, 2021, primarily due to a gain from a litigation settlement in 2022 and contingent consideration expense in 2021.

Current tax expense - for the year ended December 31, 2022, increased due to incremental taxable income from the acquisition of Park Holidays in the UK. Refer to Note 12, "Income Taxes," in our accompanying Consolidated Financial Statements for additional information.

Income attributable to noncontrolling interests - for the year ended December 31, 2022, decreased due to a decrease in Net Income as compared to the same period in 2021.

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SUN COMMUNITIES, INC.

RECONCILIATION OF NET INCOME ATTRIBUTABLE TO SUI COMMON SHAREHOLDERS TO FFO

The following table reconciles Net income attributable to SUI common shareholders to FFO for the years ended December 31, 2022, 2021 and 2020 (in millions, except for per share amounts):

[[GREPCENT_TABLE]]
[["","Year Ended"],["","December 31, 2022","","December 31, 2021","","December 31, 2020"],["Net Income Attributable to SUI Common Shareholders","$","242.0","","","$","380.2","","","$","131.6"],["Adjustments"],["Depreciation and amortization","602.6","","","521.9","","","376.9"],["Depreciation on nonconsolidated affiliates","0.1","","","0.1","","","0.1"],["(Gain) / loss on remeasurement of marketable securities","53.4","","","(33.5)","","","(6.1)"],["Loss on remeasurement of investment in nonconsolidated affiliates","2.7","","","0.2","","","1.6"],["(Gain) / loss on remeasurement of notes receivable","0.8","","","(0.7)","","","3.3"],["Gain on dispositions of properties","(12.2)","","","(108.1)","","","(5.6)"],["Add: Returns on preferred OP units","9.5","","","4.0","","","2.2"],["Add: Income attributable to noncontrolling interests","10.4","","","14.7","","","7.9"],["Gain on dispositions of assets, net","(54.9)","","","(60.5)","","","(22.2)"],["FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities(1)","$","854.4","","","$","718.3","","","$","489.7"],["Adjustments"],["Business combination expense and other acquisition related costs(2)","47.4","","","10.0","","","25.3"],["Loss on extinguishment of debt","4.4","","","8.1","","","5.2"],["Catastrophic event-related charges, net","17.5","","","2.2","","","0.9"],["Loss of earnings - catastrophic event-related charges, net(3)","4.8","","","0.2","","","\u2014"],["(Gain) / loss on foreign currency exchanges","(5.4)","","","3.7","","","(7.7)"],["Other adjustments, net(4)","0.4","","","16.2","","","2.2"],["Core FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities(1)","$","923.5","","","$","758.7","","","$","515.6"],["Adjustment"],["Foreign currency translation impact(5)","11.0","","","\u2014","","","\u2014"],["Constant Currency Core FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities","$","934.5","","","$","758.7","","","$","515.6"],["Weighted Average Common Shares Outstanding - Basic","120.2","","","112.6","","","97.5"],["Add"],["Common shares dilutive effect from forward equity sale","0.2","","","\u2014","","","\u2014"],["Restricted stock","0.4","","","0.2","","","0.4"],["Common OP units","2.5","","","2.5","","","2.5"],["Common stock issuable upon conversion of certain preferred OP units","2.3","","","1.2","","","0.9"],["Weighted Average Common Shares Outstanding - Diluted","125.6","","","116.5","","","101.3"],["FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities Per Share","$","6.80","","","$","6.16","","","$","4.83"],["Core FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities Per Share","$","7.35","","","$","6.51","","","$","5.09"],["Constant Currency Core FFO Attributable to SUI Common Shareholders and Dilutive Convertible Securities per Share","$","7.44","","","$","6.51","","","$","5.09"]]
[[/GREPCENT_TABLE]]

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

(2)These costs represent (i) nonrecurring integration expenses associated with new acquisitions and first year acquisition deferred costs, (ii) costs associated with potential acquisitions that will not close, (iii) costs associated with the termination of the bridge loan commitment during the three months ended March 31, 2022 related to the acquisition of Park Holidays and (iv) 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.

(3)Adjustment related to estimated loss of earnings in excess of the applicable business interruption deductible in relation to our three Fort Myers Florida RV communities that were impaired by Hurricane Ian and 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 (i) deferred tax (benefit) / expense and long-term lease termination (benefit) / expense for the years ended December 31, 2022, 2021 and 2020 (ii) accelerated deferred compensation amortization, gain from litigation settlement and gain on sale of investment in nonconsolidated affiliate for the year ended December 31, 2022, (iii) RV rebranding non-recurring cost for the years ended December 31, 2022 and 2021, and (iv) change in estimated contingent consideration for the years ended December 31, 2021 and 2020.

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(5)We calculated the foreign currency translation impact by comparing the actual weighted average foreign currency rates with the weighted average foreign currency rates used for guidance, as follows:

[[GREPCENT_TABLE]]
[["","","","Year Ended"],["","","","December 31, 2022"],["","","","","","Actual","","Guidance"],["U.S. Dollars per Pounds Sterling","","","","","$","1.2041","","","$","1.330"],["U.S. Dollars per Canadian Dollars","","","","","$","0.7692","","","$","0.770"],["U.S. Dollars per Australian Dollars","","","","","$","0.7282","","","$","0.756"]]
[[/GREPCENT_TABLE]]

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SUN COMMUNITIES, INC.

LIQUIDITY AND CAPITAL RESOURCES

Short-term Liquidity

Our principal short-term liquidity demands historically have been, and are expected to continue to be, distributions to our 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, and debt repayment. We intend to meet our short-term liquidity requirements through available cash balances, cash flows generated from operations, draws on our Senior Credit Facility, and the use of debt and equity offerings under our shelf registration statement. Refer to Note 8, "Debt and Line of Credit," and Note 9, "Equity and Temporary Equity," in our accompanying Consolidated Financial Statements for 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 take a disciplined approach to selecting the optimal mix of financing sources to meet our liquidity demands and minimize our overall cost of capital. In June 2021, we received investment grade ratings of BBB and Baa3 from S&P Global and Moody's, respectively, both with stable outlooks. Our ratings remain unchanged from original receipt. We plan to continue to capitalize on our unsecured bond market access to optimize our cost of capital and increase our financial flexibility.

Current market and economic conditions, including relating to, among other things, interest rates, currency fluctuations, equity valuations and inflation, may adversely affect our ability to obtain debt and equity capital in the short term on attractive terms.

Acquisition, development and expansion activities

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, secured financing, draws on our Senior Credit Facility, the assumption of existing debt on properties and the issuance of debt and equity securities. The current higher interest rate environment may make it more expensive to finance acquisitions and fund developments and expansions We will continue to evaluate acquisition and development opportunities that meet our underwriting criteria.

During the year ended December 31, 2022, we acquired 61 MH and RV communities, totaling 21,795 sites and 2,655 development sites, and eight marinas totaling 2,552 wet slips and dry storage spaces, for a total purchase price of approximately $2.2 billion. This includes our acquisition of Park Holidays at an enterprise value of £950.0 million, or approximately $1.2 billion.

We have been focused on property ground-up development and expansion opportunities adjacent to our existing properties. During the year ended December 31, 2022, we constructed over 840 total sites at six ground-up developments and expanded nearly 1,160 total sites at 11 properties.

We continue to expand our properties utilizing our inventory of owned and entitled land. We have 16,195 MH and RV sites suitable for future development.

Refer to Note 3, "Real Estate Acquisitions and Dispositions," in our accompanying Consolidated Financial Statements for additional detail on acquisitions completed in 2022.

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Capital Expenditures

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

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

[[GREPCENT_TABLE]]
[["","Year Ended"],["","December 31, 2022","","December 31, 2021"],["Non-Recurring Capital Expenditures"],["Lot Modifications","$","39.1","","","$","28.8"],["Growth Projects","99.5","","","77.0"],["Rebranding","15.0","","","6.1"],["Acquisition-related Capital Expenditures","280.3","","","176.5"],["Expansion and Development","261.8","","","201.7"],["Rental Program","151.1","","","117.4"],["Other","0.4","","","0.5"],["Total Non-Recurring Capital Expenditures","847.2","","","608.0"],["Recurring Capital Expenditures","73.8","","","64.6"],["Total Capital Expenditure Activities","$","921.0","","","$","672.6"]]
[[/GREPCENT_TABLE]]

Recurring capital expenditures - property recurring capital expenditures are necessary to maintain asset quality, including purchasing and replacing assets used to operate the communities and marinas. Recurring capital expenditures at our MH and RV properties include items such as: major road and driveway repairs and improvements; pool improvements; clubhouse renovations; adding or replacing streetlights; playground equipment; signage; maintenance facilities; manager housing and property vehicles. Recurring capital expenditures at our marinas include items such as: dredging, dock repairs and improvements, and equipment maintenance and upgrades. The minimum capitalized amount is five hundred dollars.

Non-Recurring Capital Expenditures

Lot modifications - lot modification capital expenditures 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 often improve the 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 - growth projects consist of revenue generating or expense reducing activities at MH, RV and marina properties. 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.

Rebranding - rebranding includes new signage at our RV communities and costs of building an RV mobile application and updated website.

Acquisition-related capital expenditures - consist of capital improvements identified during due diligence that are necessary to bring our communities 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 including main signs and internal road signs.

Expansion and development expenditures - consist primarily of construction costs such as roads, activities and amenities, and costs necessary to complete home and RV site improvements, such as driveways, sidewalks and landscaping at our MH and RV communities. Expenditures also include costs to rebuild after damage has been incurred at MH, RV or Marina properties, and research and development.

Rental program - consists of investment in the acquisition of homes intended for the Rental Program and the purchase of vacation rental homes at our RV communities. Expenditures for these investments depend upon the condition of the markets for repossessions and new home sales, rental homes and vacation rental homes.

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Cash Flow Activities

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

[[GREPCENT_TABLE]]
[["","Year Ended"],["","December 31, 2022","","December 31, 2021","","December 31, 2020"],["Net Cash Provided by Operating Activities","$","734.9","","","$","753.6","","","$","543.3"],["Net Cash Used for Investing Activities","$","(3,062.6)","","","$","(2,338.2)","","","$","(2,486.5)"],["Net Cash Provided by Financing Activities","$","2,348.6","","","$","1,570.4","","","$","2,000.8"],["Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash","$","(8.7)","","","$","(0.2)","","","$","0.2"]]
[[/GREPCENT_TABLE]]

Cash, cash equivalents and restricted cash increased by $12.2 million from $78.2 million as of December 31, 2021, to $90.4 million as of December 31, 2022.

Operating activities - Net cash provided by operating activities decreased by $18.7 million, to $734.9 million for the year ended December 31, 2022, compared to $753.6 million for the year ended December 31, 2021. The decrease in operating cash flow was primarily due to changes in inventory, other assets, and other receivables, including an increase in insurance reimbursement receivables related to Hurricane Ian, partially offset by improved operating performance at our existing MH and RV communities and marinas.

Our net cash flows provided by operating activities from continuing operations may be adversely impacted by, among other things:

•the market and economic conditions in our current markets generally, and specifically in the metropolitan areas of our current markets;

•lower occupancy and rental rates of our properties;

•substantial increases in insurance premium;

•increases in other operating costs, such as wage and benefit costs, real estate taxes and utilities;

•decreased sales of manufactured homes;

•current volatility in economic conditions and the financial markets; and

•the effects of the COVID-19 pandemic. Refer to "Risk Factors" in Part I, Item 1A in this Annual Report on Form 10-K.

Investing activities - Net cash used for investing activities increased by $0.8 billion, to $3.1 billion for the year ended December 31, 2022, compared to $2.3 billion for the year ended December 31, 2021. The increase in Net cash used for investing activities was primarily driven by an increase in cash deployed to acquire Park Holidays and other new properties during the year ended December 31, 2022 as compared to the corresponding period in 2021. Refer to the Consolidated Statements of Cash Flow for detail on the net cash used for investing activities during the years ended December 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 on acquisitions and issuance of notes and other receivables.

Financing activities - Net cash provided by financing activities increased by $0.7 billion, to $2.3 billion for the year ended December 31, 2022, compared to $1.6 billion for the year ended December 31, 2021. The increase in Net cash provided by financing activities was primarily driven by an increase in borrowings on our Senior Credit Facility, net of repayments, during the year ended December 31, 2022 as compared to the corresponding period in 2021. Refer to the Consolidated Statements of Cash Flow for detail on the net cash provided by financing activities during the years ended December 31, 2022 and 2021. Refer to Note 8, "Debt and Line of Credit," and Note 9, "Equity and Temporary Equity," in our accompanying Consolidated Financial Statements for additional information.

We are exposed to interest rate variability associated with our outstanding floating rate debt and any maturing debt that has to be refinanced. Interest rate movements impact our borrowing costs and, while as of December 31, 2022, over 77% of our total debt was fixed rate financing, including the impact of hedge activity, increases in interest costs are likely to adversely affect our financial results.

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SUN COMMUNITIES, INC.

Equity and Debt Activity

Public Equity Offerings

In November 2021, we entered into the November 2021 Forward Sale Agreements in connection with an underwritten registered public offering of 4,025,000 shares of our common stock at a public offering price of $185.00 per share. In April 2022, we completed the physical settlement of the 4,025,000 shares of common stock and received aggregate net proceeds of $705.4 million. We used the net proceeds to repay borrowings outstanding under our Senior Credit Facility, and for working capital and general corporate purposes.

In March 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. We sold the 4,000,000 shares on March 9, 2021 and received net proceeds of $537.6 million after deducting expenses related to the offering. In May and June 2021, we completed the physical settlement of the remaining 4,050,000 shares and received net proceeds of $539.7 million after deducting expenses related to the offering. Proceeds from the offering were used to acquire assets and pay down borrowings under our revolving line of credit.

At the Market Offering Sales Agreement

In December 2021, we entered into an At the Market Offering Sales Agreement (the "Sales Agreement"), with certain sales agents and forward sellers pursuant to which we may sell, from time to time, up to an aggregate gross sales price of $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 prior sales agreement upon entering into the Sales Agreement. Through December 2022, we had entered into forward sales agreements under our Sales Agreement for an aggregate gross sales price of $160.6 million.

During the three months ended September 30, 2022, we entered into forward sale agreements with respect to 15,000 shares of common stock under our Sales Agreement for $2.6 million. Additionally, we settled all of our outstanding forward sale agreements with respect to 1,526,212 shares of common stock which includes 620,109; 600,503; 290,600; and 15,000 shares of common stock from the three months ended December 31, 2021, March 31, June 30 and September 30, 2022 forward sale agreements, respectively. The net proceeds of $275.5 million from the settlement of these forward sale agreements were used to repay borrowings outstanding under our Senior Credit Facility.

During the three months ended June 30, 2022, we completed the physical settlement of 1,200,000 shares of common stock under our prior at the market offering program and received net proceeds of $229.5 million. Additionally, we entered into forward sales agreements with respect 290,600 shares of common stock for $50.1 million, under our Sales Agreement. These forward sale agreements were settled during the three months ended September 30, 2022.

During the three months ended March 31, 2022, we entered into forward sales agreements with respect to 600,503 shares of common stock for $107.9 million, under our Sales Agreement. These forward sale agreements were settled during the three months ended September 30, 2022.

During the year ended December 31, 2021, we entered into forward sale agreements with respect to 1,820,109 shares of common stock under our prior at the market offering program for $356.5 million. We completed the physical settlement of 1,200,000 and 620,109 shares of common stock during the three months ended June 30, 2022 and September 30, 2022, respectively.

Secured Debt

During the year ended December 31, 2022, we entered into a new $20.6 million construction loan, which was undrawn as of December 31, 2022 and a $3.4 million mortgage term loan that are jointly secured by one property. Both loans mature August 10, 2047 and have a fixed interest rate of 3.65%. Additionally, during and subsequent to the quarter ended December 31, 2022, we entered into mortgage term loans of (a) $226.0 million related to 18 existing encumbered properties which mature between June 15, 2026, and December 15, 2029, and have a fixed interest rate of 4.5% and (b) $85.0 million related to five properties which mature on February 13, 2026, and have a fixed interest rate of 5.0%. We used the net proceeds to repay borrowings outstanding under our Senior Credit Facility.

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SUN COMMUNITIES, INC.

During the three months ended September 30, 2022, we repaid $318.0 million of term loans collateralized by 35 properties. These loans had a weighted average interest rate of 4.81% and were set to mature from December 2022 through September 2024.

Senior Unsecured Notes

In January 2023, the Operating Partnership issued $400.0 million of senior unsecured notes with an interest rate of 5.7% and a 10-year term, due January 15, 2033 (the "2033 Notes"). Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 of each year, beginning on July 15, 2023. The net proceeds from the offering were $395.3 million, after deducting underwriters' discounts and offering expenses. In connection with the 2033 Notes issuance, we settled two 10-year treasury rate lock contracts and a forward swap totaling $250.0 million and received a net settlement payment of $7.4 million. This lowered the effective interest rate on the 2033 Notes from 5.7% to 5.5%.

In April 2022, the Operating Partnership issued $600.0 million of senior unsecured 2032 Notes with an interest rate of 4.2% and a 10-year term, due April 15, 2032. The net proceeds from the offering were $592.3 million after deducting underwriters' discounts and estimated offering expenses. In connection with the 2032 Notes issuance, we settled four 10-year treasury rate lock contracts totaling $600.0 million and received a settlement payment of $35.3 million. The balance will be amortized as a reduction of 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% to 3.6%.

In October 2021, the Operating Partnership issued $450.0 million of senior unsecured 2028 Notes with an interest rate of 2.3% and a seven-year term, due November 1, 2028. The Operating Partnership also issued an additional $150.0 million of its 2031 Notes (as defined below). The net proceeds from both offerings 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% and a 10-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.

The proceeds from the 2028 Notes, the 2031 Notes, the 2032 Notes and the 2033 Notes, were used to pay down borrowings under our Senior Credit Facility. The total outstanding principal balance of senior unsecured notes was $1.8 billion at December 31, 2022.

The obligations of the Operating Partnership to pay principal, premiums, if any, and interest on the 2028 Notes, the 2031 Notes, the 2032 Notes, and the 2033 Notes are guaranteed on a senior basis by Sun Communities, Inc. The 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

In April 2022, in connection with the closing of the Park Holidays acquisition, the Operating Partnership as borrower, and SUI, as guarantor, and certain lenders entered into the Credit Facility Amendment, which amended our Senior Credit Facility.

The Credit Facility Amendment increased the aggregate amount of our Senior Credit Facility to $4.2 billion with the ability to upsize the total borrowings by an additional $800.0 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 extended the maturity date of the revolving loan facility to April 7, 2026. At our option that maturity date may be extended two additional six-month periods. In addition, the Credit Facility Amendment established the maturity date of the term loan facility under the Credit Facility Amendment as April 7, 2025, which may not be further extended.

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Prior to the Credit Facility 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. Prior to the amendment, $500.0 million of available borrowings under the Senior Credit Facility were scheduled to mature on October 11, 2024, with the remainder scheduled to mature on June 14, 2025. We had no loss on extinguishment of debt during the year ended December 31, 2022. During the year ended December 31, 2021, we recognized losses on extinguishment of debt in our Consolidated Statements of Operations of $0.1 million related to the amendment of the Senior Credit Facility, and $0.2 million and $7.9 million, related to the termination of our $750.0 million credit facility and the $1.8 billion credit facility between Safe Harbor and certain lenders, respectively.

The Senior Credit Facility bears interest at a floating rate based on Adjusted Term SOFR, the Adjusted Eurocurrency Rate, the Daily RFR, the Australian BBSY, the Daily SONIA Rate or the Canadian Dollar Offered Rate, as applicable, plus a margin, in all cases, which can range from 0.725% to 1.6%, subject to certain adjustments. As of December 31, 2022, the margins based on our credit ratings were 0.85% on the revolving loan facility and 0.95% on the term loan facility. During the year ended December 31, 2022, we achieved sustainability related requirements resulting in a favorable 0.01% adjustment to both margins.

At the lenders' option, the Senior Credit Facility will become immediately due and payable upon an event of default under the Credit Facility Amendment. We had $1.1 billion of borrowings outstanding under the revolving loan and $1.1 billion of borrowings outstanding under the term loan on the Senior Credit Facility as of December 31, 2022. We had $1.0 billion of revolving borrowings on our prior Senior Credit Facility as of December 31, 2021. 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 $2.3 million and $2.2 million of outstanding letters of credit at December 31, 2022 and 2021, respectively.

Financial Covenants

Pursuant to the terms of the Senior Credit Facility, we are subject to various financial and other covenants. The most restrictive financial covenants for the Senior Credit Facility are as follows:

[[GREPCENT_TABLE]]
[["Covenant","","Requirement","","As of December 31, 2022"],["Maximum leverage ratio","","65.0%","","33.8%"],["Minimum fixed charge coverage ratio","","1.40","","3.82"],["Maximum secured leverage ratio","","40.0%","","12.6%"]]
[[/GREPCENT_TABLE]]

In addition, we are required to maintain the following covenants with respect to the senior unsecured notes payable:

[[GREPCENT_TABLE]]
[["Covenant","","Requirement","","As of December 31, 2022"],["Total debt to total assets","","\u226460.0%","","40.3%"],["Secured debt to total assets","","\u226440.0%","","18.0%"],["Consolidated income available for debt service to debt service","","\u22651.50","","5.30"],["Unencumbered total asset value to total unsecured debt","","\u2265150.0%","","344.0%"]]
[[/GREPCENT_TABLE]]

As of December 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

In March 2022, we terminated our commitment letter with Citigroup, pursuant to which, Citigroup (on behalf of its affiliates), previously committed to lend us up to £950.0 million in Pounds sterling, 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.

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Derivative Transactions

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. We do not enter into derivative instruments for speculative purposes.

During the year ended December 31, 2022, we entered into two treasury rate lock contracts and one forward swap contract with an aggregate notional value of $250.0 million to hedge interest rate risk associated with the future issuance of long-term debt. We also entered into two interest rate swap agreements to hedge variable rate borrowings of £400.0 million (equivalent to $483.6 million as of December 31, 2022) under the term loan on our Senior Credit Facility. The interest rate swaps locked in a total fixed rate, inclusive of spread, of 3.66% through the term loan maturity date of April 7, 2025.

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 subject to market conditions. If current market and economic conditions, including relating to, among other things, interest rates, currency fluctuations, equity valuations and inflation, continue or worsen, our ability to obtain debt and equity capital in the long term on attractive terms may be adversely affected.

We had unrestricted cash on hand as of December 31, 2022 of $72.8 million. As of December 31, 2022, there was $1.9 billion of remaining capacity on the Senior Credit Facility. At December 31, 2022 we had a total of 515 unencumbered MH, RV and 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 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. Refer to "Risk Factors" in Part I, Item 1A of this Annual Report on Form 10-K. 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.

As of December 31, 2022, our net debt to enterprise value was 27.9% (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 and Series J preferred OP units to shares of common stock). Our debt has a weighted average interest rate of 3.75% and a weighted average years to maturity of 7.4.

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Capital Requirements

Our capital requirements as of December 31, 2022 include both short and long term obligations:

Our primary long-term liquidity needs are principal payments on outstanding indebtedness as summarized in the table below:

[[GREPCENT_TABLE]]
[["","","Payments Due By Period (in millions)"],["Outstanding Indebtedness(1)","","Total Due","","Short-term Obligation \u22641 Year","","Long-term Obligation After 1 Year","","Refer to"],["Principal payments on long-term debt","","$","7,235.1","","","$","183.4","","","$","7,051.7","","","Note 8. Debt and Line of Credit"],["Interest expense(2)","","1,510.5","","","187.5","","","1,323.0"],["Operating leases","","299.2","","","13.6","","","285.6","","","Note 17. Leases"],["Finance lease","","28.9","","","1.0","","","27.9","","","Note 17. Leases"],["Total Outstanding Indebtedness","","$","9,073.7","","","$","385.5","","","$","8,688.2"]]
[[/GREPCENT_TABLE]]

(1)Our outstanding indebtedness in this table excludes debt premiums, discounts and deferred financing costs, as applicable.

(2)Our obligations related to interest expense are calculated based on the current debt levels, rates and maturities as of December 31, 2022 (including finance leases), and actual payments required in future periods may be different than the amounts included above. Perpetual securities include one year of interest expense for payment due after five years.

Certain of our nonconsolidated affiliates, which are accounted for under the equity-method of accounting, have 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 nonconsolidated affiliates be unable to do so. Refer to Note 6, "Investments in Nonconsolidated Affiliates," in the accompanying Consolidated Financial Statements for additional information about these entities.

GTSC - During September 2019, GTSC entered into a warehouse line of credit with a maximum loan amount of $125.0 million. The line of credit was subsequently amended, with the maximum amount increased to $325.0 million as of December 31, 2022, with an option to increase to $375.0 million subject to the lender's consent. As of December 31, 2022 and 2021, the aggregate carrying amount of debt, including both our and our partner's share, incurred by GTSC was $275.0 million (of which our proportionate share is $110.0 million), and $243.1 million (of which our proportionate share is $97.2 million), respectively. The debt bears interest at a variable rate based on a Commercial Paper or adjusted Secured Overnight Financing Rate plus a margin ranging from 1.65% to 2.5% per annum and matures on December 15, 2026.

Sungenia JV - During May 2020, Sungenia JV, entered into a debt facility agreement with a maximum loan amount of $27.0 million Australian dollars, or $18.4 million converted at the December 31, 2022 exchange rate. During July 2022, the maximum amount was increased to $50.0 million Australian dollars, or $34.1 million converted at the December 31, 2022 exchange rate. As of December 31, 2022 and 2021, the aggregate carrying amount of the debt, including both our and our partners' share, incurred by Sungenia JV was $7.9 million (of which our proportionate share is approximately $4.0 million), and $6.3 million (of which our proportionate share is $3.1 million), respectively. The debt bears interest at a variable rate based on the BBSY rate plus a margin ranging from 1.35% to 1.4%, subject to adjustment for additional future commitments, per annum and matures on June 30, 2027.

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SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES

Critical Accounting Estimates

Our Consolidated Financial Statements are prepared in accordance with United States of America generally accepted accounting principles ("GAAP"), which require the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses in the periods presented. We believe that the accounting estimates employed are appropriate and resulting balances are reasonable; however, due to inherent uncertainties in making estimates, actual results could differ from the original estimates, requiring adjustments to these balances in future periods.

Our significant accounting estimates include acquisitions of investment properties and impairments of long-lived assets or properties, and right-of-use assets. Refer to Note 1, "Significant Accounting Policies," in our accompanying Consolidated Financial Statements for information regarding our critical accounting estimates that affect the Consolidated Financial Statements and that use judgments and assumptions. In addition, the likelihood that materially different amounts could be reported under varied conditions and assumptions is discussed.

Impact of New Accounting Standards

Refer to Note 19, "Recent Accounting Pronouncements," in our accompanying Consolidated Financial Statements for information regarding new accounting pronouncements.

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