SUN COMMUNITIES INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - PRESS RELEASE AND SUPPLEMENTAL

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8-K - 8-K EARNINGS RELEASE - SUN COMMUNITIES INC	form8-kearningsreleaseq420.htm

Table of Contents



Summary - Earnings Press Release	i - vi

Investor Information	1

Portfolio Overview	2

Financial Information
Balance Sheets	3
Statements of Operations	4 - 6
Outstanding Securities	7
Reconciliations to Non-GAAP Financial Measures	8
Reconciliation of Net (Loss) Income to Funds from Operations	9
Reconciliation of Recurring EBITDA to Net (Loss) Income	10
Reconciliation of Net Operating Income to Net (Loss) Income	11
Non-GAAP and Other Financial Measures	12
Financial Highlights	13
Debt Analysis	14

Selected Financial Information
Statement of Operations – Same Community	15
Rental Program Summary	16
Home Sales Summary	17
Acquisitions Summary	18

Other Information
Property Summary	19 - 20
Capital Improvements, Development, and Acquisitions	21
Operating Statistics for Manufactured Homes and Annual/Seasonal RV’s	22
Footnotes and Definitions	23 - 25

NEWS RELEASE

February 23, 2017

Sun Communities, Inc. Reports 2016 Fourth Quarter Results

Southfield, Michigan, February 23, 2017 – Sun Communities, Inc. (NYSE: SUI) (the "Company"), a real estate investment trust ("REIT") that owns and operates, or has an interest in, manufactured housing ("MH") and recreational vehicle ("RV") communities, today reported its fourth quarter results.

Financial Results for the Quarter and Year Ended December 31, 2016

For the quarter ended December 31, 2016, total revenues increased $50.4 million, or 30.0 percent, to $218.6 million compared to $168.2 million for the same period in 2015. Net loss attributable to Common Stockholders was $1.6 million, or $0.02 per diluted common share, as compared to net income attributable to Common Stockholders of $89.4 million, or $1.56 per diluted common share, for the same period in 2015.

For the year ended December 31, 2016, total revenues increased $159.1 million, or 23.6 percent, to $833.8 million compared to $674.7 million for the same period in 2015. Net income attributable to Common Stockholders for the year ended December 31, 2016 was $17.4 million, or $0.26 per diluted common share, as compared to $137.3 million, or $2.52 per diluted common share, for the same period in 2015.

Non-GAAP Financial Measures and Portfolio Performance


•	For the quarter ended December 31, 2016, Funds from Operations ("FFO")⁽¹⁾ excluding certain items was $0.91 per diluted share and OP unit ("Share") as compared to $0.81 in the prior year, an increase of 12.3 percent.


•	For the year ended December 31, 2016, FFO⁽¹⁾ excluding certain items was $3.79 per Share as compared to $3.63 in the prior year, an increase of 4.4 percent.


•	Home sales increased by 27.8 percent as compared to the year ended December 31, 2015.


•	Revenue producing sites increased by 301 sites for the quarter bringing total portfolio occupancy to 96.2 percent, up 120 basis points from year end 2015.


•	For the quarter, same community Net Operating Income ("NOI")⁽¹⁾ increased by 9.1 percent as compared to the three months ended December 31, 2015.

“Sun’s most recent results demonstrate the ongoing power of our platform. We achieved industry leading internal growth, increased or maintained occupancy for the 20th consecutive quarter and sold a record number of homes into our communities, while integrating our largest acquisition to date,” said Gary A. Shiffman, Chairman and Chief Executive Officer. “As we proceed through 2017, we are keenly focused on continuing to deliver exceptional results to our shareholders. Along with continuing to drive NOI growth from our core portfolio, we anticipate the most meaningful opportunities will come from value-add assets that we can reposition to deliver superior returns over the long term. Sun is well positioned to continue our track record of value creation.”

OPERATING HIGHLIGHTS

Community Occupancy

Total portfolio occupancy increased to 96.2 percent at December 31, 2016 from 95.0 percent at December 31, 2015. During the fourth quarter of 2016, revenue producing sites increased by 301 sites, as compared to 548 revenue producing sites gained in the fourth quarter of 2015.

Revenue producing sites gained during the year ended December 31, 2016 were 1,686 as compared to 1,905 revenue producing sites gained for the same period in 2015.

Same Community Results

For the 219 communities owned throughout 2016 and 2015, fourth quarter 2016 total revenues increased 6.2 percent and total expenses decreased 0.9 percent, resulting in an increase in NOI⁽¹⁾ of 9.1 percent over the fourth quarter of 2015. Same community occupancy increased to 96.6 percent at December 31, 2016 from 94.7 percent at December 31, 2015.

For the year ended December 31, 2016, total revenues increased 6.1 percent and total expenses increased 3.7 percent, resulting in an increase in NOI⁽¹⁾ of 7.1 percent over the year ended December 31, 2015.

Home Sales

Total homes sales were 762 for the fourth quarter of 2016 as compared to 738 total homes sold during the same period in 2015.

During the year ended December 31, 2016, the Company sold 3,172 homes as compared to the 2,483 homes sold during the same period ending 2015, resulting in an additional 689 homes sold during 2016, or a 27.8 percent increase.

Rental homes sales, which are included in total home sales, were 231 and 297 for the three months ended and 1,089 and 908 for the year ended December 31, 2016 and 2015, respectively.

BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

Debt Transactions

During the quarter ended December 31, 2016, the Company completed a $58.5 million secured borrowing that bears interest at a fixed rate of 3.33 percent and has a seven-year term. The Company repaid mortgage loans totaling $79.1 million in the fourth quarter and $28.9 million subsequent to year end, substantially addressing all of its 2017 maturities.

As of December 31, 2016, the Company had approximately $3.1 billion of debt outstanding. The weighted average interest rate was 4.48 percent and the weighted average maturity was 8.5 years. The Company had $8.2 million of unrestricted cash on hand. At period-end the Company’s net debt to trailing twelve month EBITDA⁽¹⁾ ratio was 7.5 times.

Equity Transactions

During the fourth quarter of 2016 and in January 2017, the Company sold 300,000 shares of common stock through its At-the-Market equity sales program at a weighted average price of $76.43 per share. Net proceeds from the sales were $22.6 million.

PORTFOLIO ACTIVITY

Acquisitions ⁽²⁾

As noted in its third quarter earnings release, the Company acquired two communities shortly after September 30, 2016, for total consideration of $9.8 million. These communities, located in Colorado and New York, contain 495 RV sites and have expansion potential of approximately 350 sites.

Additionally, during the fourth quarter, the Company acquired a community adjacent to one of its existing communities in Florida, for consideration of $3.4 million. This community has 178 RV sites.

These communities are located in high demand destination locations and will undergo repositioning or expansion activities to fully realize the inherent value in the zoned and entitled land that was previously under-managed or under-utilized.

GUIDANCE 2017

The Company estimates full year 2017 FFO⁽¹⁾ per Share to be in the range of $4.16 to $4.24 per Share and the first quarter 2017 to be in the range of $1.06 to $1.08 per Share. Guidance does not include prospective acquisitions or capital markets activity.

Total Portfolio



Number of communities:	341	341

	2017 Guidance	2016 Actual
	(in Millions)	(in Millions)		% Change
MH Revenues	$479.3 - $479.9
RV Seasonal/Annual	109.0 - 109.5
RV Transient	74.5 - 75.1
Other Revenue	69.0 - 69.5
Income from real property	$731.8 - $734.0	$	620.9	17.9% - 18.2%
Real estate taxes	52.7 - 52.6	44.3		19.0% - 18.7%
Property operating and maintenance	208.0 - 205.6	173.3		20.0% - 18.6%
Total property operating expenses	$260.7 - $258.2	$	217.6	19.8% - 18.7%
Net operating income ("NOI")⁽¹⁾	$471.1 - $475.8	$	403.3	16.8% - 18.0%

iii



	2017 Guidance	2016 Actual
	(in Millions, except share data)	(in Millions, except share data)		% Change
Rental program, net	$25.9 - $26.0	$	23.5	10.2% - 10.6%
Home sales gross profit	32.0 - 32.8	30.1		6.3% - 9.0%
Ancillary revenues, net	10.7 - 10.8	10.0		7.0% - 8.0%
Interest, brokerage commissions, and other revenues, net	24.4 - 24.5	21.2		15.1% - 15.6%
Home selling expenses	13.0 - 12.9	9.7		34.0% - 33.0%
General and administrative	72.7 - 72.0	64.1		13.4% - 12.3%

Weighted average common shares outstanding, fully diluted	78.1

Q1 FFO⁽¹⁾ per Share	$1.06 - $1.08
2017 FFO⁽¹⁾ per Share	$4.16 - $4.24

Supplementary Information:



	1Q17	2Q17	3Q17	4Q17
Seasonality of FFO⁽¹⁾	25.5%	22.3%	28.3%	23.9%



	2017
New home sales volume	470 - 485
Pre-owned home sales volume	3,000 - 3,100
Increase in revenue producing sites	2,600 - 2,800
Weighted average monthly rent increase	3.6	%
Gross profit from rental home sales included above (non-FFO) (in millions)	$15.6

Same Community Portfolio:



Number of communities	231	231

	2017 Guidance	2016 Actual
	(in Millions)	(in Millions)		% Change
MH revenues	$401.9 - $402.4
RV seasonal/annual	54.1 - 54.3
RV transient	47.3 - 47.6
Other revenue	28.7 - 28.9
Income from real property	$532.0 - $533.2	$	504.0	5.6% - 5.8%
Real estate taxes	39.1 - 39.0	36.8		6.3% - 6.0%
Property operating and maintenance	112.2 - 112.1	109.3		2.7% - 2.6%
Total property operating expenses	$151.3 - $151.1	$	146.1	3.6% - 3.4%
Net operating income ("NOI")⁽¹⁾	$380.7 - $382.1	$	357.9	6.4% - 6.8%

The estimates and assumptions presented above represent a range of possible outcomes and may differ materially from actual results. The estimates and assumptions are forward looking based on the Company's current assessment of economic and market conditions, as well as other risks outlined below under the caption "Forward-Looking Statements."

EARNINGS CONFERENCE CALL

A conference call to discuss fourth quarter operating results will be held on Thursday, February 23, 2017 at 11:00 A.M. (ET). To participate, call toll-free 877-407-4018. Callers outside the U.S. or Canada can access the call at 201-689-8471. A replay will be available following the call through March 9, 2017 and can be accessed toll-free by calling 844-512-2921 or by calling 412-317-6671. The Conference ID number for the call and the replay is 13652683. The conference call will be available live on Sun Communities' website www.suncommunities.com. Replay will also be available on the website.

Sun Communities, Inc. is a REIT that, as of December 31, 2016, owned or had an interest in a portfolio of 341 communities comprising approximately 117,000 developed sites in 29 states and Ontario, Canada.

For more information about Sun Communities, Inc., please visit the website at www.suncommunities.com.

CONTACT

Please address all inquiries to our investor relations department at our website www.suncommunities.com, by phone (248) 208-2500, by email investorrelations@suncommunities.com or by mail Sun Communities, Inc. Attn: Investor Relations, 27777 Franklin Road, Ste. 200, Southfield, MI 48034.

Forward-Looking Statements

This press release contains various "forward-looking statements" within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and the Company intends that such forward-looking statements will be subject to the safe harbors created thereby. Forward-looking statements can be identified by words such as "will," "may," "could," "expect," "anticipate," "believes," "intends," "should," "plans," "estimates," "approximate," "guidance," and similar expressions in this press release that predict or indicate future events and trends and that do not report historical matters.

These forward-looking statements reflect the Company’s current views with respect to future events and financial performance, but involve known and unknown risks, uncertainties, and other factors, some of which are beyond the Company's control. These risks, uncertainties, and other factors may cause the actual results of the Company to be materially different from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include national, regional and local economic climates, the ability to maintain rental rates and occupancy levels, competitive market forces, the performance of recent acquisitions, the ability to integrate future acquisitions smoothly and efficiently, changes in market rates of interest, changes in foreign currency exchange rates, the ability of manufactured home buyers to obtain financing and the level of repossessions by manufactured home lenders. Further details of potential risks that may affect the Company are described in our periodic reports filed with the U.S. Securities and Exchange Commission, including in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the year ended December 31, 2016.

The forward-looking statements contained in this press release speak only as of the date hereof and the Company expressly disclaims any obligation to provide public updates, revisions or amendments to any forward-looking statements made herein to reflect changes in the Company’s assumptions, expectations of future events, or trends.

Investor Information



RESEARCH COVERAGE

	BMO Capital Markets	Paul Adornato
		(212) 885-4170
		paul.adornato@bmo.com

	Citi Research	Michael Bilerman/Nicholas Joseph
		(212) 816-1383
		michael.bilerman@citi.com
		nicholas.joseph@citi.com

	Evercore ISI	Steve Sakwa
		(212) 446-9462
		steve.sakwa@evercoreisi.com

		Gwen Clark
		(212) 446-5611
		gwen.clark@evercoreisi.com

	Green Street Advisors	Ryan Burke
		(949) 640-8780
		rburke@greenstreetadvisors.com

	Robert W. Baird & Co.	Drew Babin
		(610) 238-6634
		dbabin@rwbaird.com

	Wells Fargo	Todd Stender
		(562) 637-1371
		todd.stender@wellsfargo.com


INQUIRIES

Sun Communities welcomes questions or comments from stockholders, analysts, investment managers, media, or
any prospective investor. Please address all inquiries to our Investor Relations department.

	At Our Website	www.suncommunities.com

	By Email	investorrelations@suncommunities.com

	By Phone	(248) 208-2500

4th Quarter 2016 Supplemental Information 1 Sun Communities, Inc.

Portfolio Overview

(As of December 31, 2016)

4th Quarter 2016 Supplemental Information 2 Sun Communities, Inc.

Balance Sheets

(amounts in thousands)



	Quarter Ended
	12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
ASSETS:
Land	$	1,027,976		$	1,072,964		$	458,349		$	456,380		$	451,340
Land improvements and buildings	4,825,043			4,682,920			5,294,663			3,586,969			3,535,909
Rental homes and improvements	489,633			485,340			477,875			469,217			460,480
Furniture, fixtures and equipment	130,127			125,603			107,123			104,855			102,746
Land held for future development	23,560			23,497			23,497			23,047			23,047
Investment property	6,496,339			6,390,324			6,361,507			4,640,468			4,573,522
Accumulated depreciation	(1,026,858		)	(977,486		)	(928,882		)	(889,941		)	(852,407		)
Investment property, net	5,469,481			5,412,838			5,432,625			3,750,527			3,721,115
Cash and cash equivalents	8,164			69,829			31,441			410,408			45,086
Inventory of manufactured homes	21,632			24,147			29,044			16,636			14,828
Notes and other receivables, net	81,179			87,856			76,466			54,124			47,972
Collateralized receivables, net ⁽³⁾	143,870			143,888			144,017			142,944			139,768
Other assets, net	146,450			166,148			109,598			188,247			213,030
Total assets, net	$	5,870,776		$	5,904,706		$	5,823,191		$	4,562,886		$	4,181,799
LIABILITIES:
Mortgage loans payable	$	2,819,567		$	2,854,831		$	2,792,021		$	2,114,818		$	2,125,267
Secured borrowings ⁽³⁾	144,477			144,522			144,684			143,664			140,440
Preferred OP units - mandatorily redeemable	45,903			45,903			45,903			45,903			45,903
Lines of credit	100,095			57,737			357,721			58,065			24,687
Distributions payable	51,896			51,100			47,992			45,351			41,265
Other liabilities	279,667			275,650			257,423			184,102			184,859
Total liabilities	3,441,605			3,429,743			3,645,744			2,591,903			2,562,421
Series A-4 preferred stock	50,227			50,227			50,227			61,732			61,732
Series A-4 preferred OP units	16,717			19,906			20,266			20,762			21,065
STOCKHOLDERS' EQUITY:
Series A preferred stock	34			34			34			34			34
Common stock	732			730			686			646			584
Additional paid-in capital	3,321,441			3,313,905			2,980,382			2,706,657			2,319,314
Accumulated other comprehensive loss	(3,181		)	(4,876		)	1			—			—
Distributions in excess of accumulated earnings	(1,023,415		)	(975,511		)	(947,988		)	(896,896		)	(864,122		)
Total SUI stockholders' equity	2,295,611			2,334,282			2,033,115			1,810,441			1,455,810
Noncontrolling interests:
Common and preferred OP units	69,598			73,284			76,166			80,018			82,538
Consolidated variable interest entities	(2,982		)	(2,736		)	(2,327		)	(1,970		)	(1,767		)
Total noncontrolling interest	66,616			70,548			73,839			78,048			80,771
Total stockholders' equity	2,362,227			2,404,830			2,106,954			1,888,489			1,536,581
Total liabilities & stockholders' equity	$	5,870,776		$	5,904,706		$	5,823,191		$	4,562,886		$	4,181,799

4th Quarter 2016 Supplemental Information 3 Sun Communities, Inc.

Statements of Operations

(amounts in thousands, except per share amounts)



	Quarter Ended
	12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
REVENUES:
Income from real property (excluding transient revenue)	$	156,533		$	158,020		$	129,117		$	119,084		$	117,604
Transient revenue	10,824			26,304			10,884			10,151			5,568
Revenue from home sales	28,520			31,211			26,039			24,737			25,169
Rental home revenue	12,084			12,031			11,957			11,708			11,756
Ancillary revenues	4,982			16,446			7,383			4,613			3,576
Interest	4,791			4,705			4,672			3,945			4,074
Brokerage commissions and other revenues, net	900			984			747			406			491
Total revenues	218,634			249,701			190,799			174,644			168,238

EXPENSES:
Property operating and maintenance	47,917			57,089			37,067			31,201			33,360
Real estate taxes	12,184			12,384			10,153			9,585			8,683
Cost of home sales	21,617			21,935			18,684			18,184			19,296
Rental home operating and maintenance	6,657			6,350			5,411			5,876			6,841
Ancillary expenses	4,728			9,449			5,599			3,649			3,888
Home selling expenses	2,504			2,643			2,460			2,137			2,079
General and administrative	17,177			16,575			16,543			13,792			10,511
Transaction costs	4,023			4,191			20,979			2,721			4,653
Depreciation and amortization	62,205			61,483			49,670			48,412			47,530
Extinguishment of debt	1,127			—			—			—			—
Interest	30,641			33,800			28,428			26,294			28,066
Interest on mandatorily redeemable preferred OP units	789			789			787			787			790
Total expenses	211,569			226,688			195,781			162,638			165,697
Income / (loss) before other items	7,065			23,013			(4,982		)	12,006			2,541
Other expenses, net ⁽⁴⁾	(5,848		)	—			—			—			—
Gain on disposition of properties, net	—			—			—			—			98,430
Current tax (expense) / benefit	(116		)	(283		)	(56		)	(228		)	71
Deferred tax benefit / (expense)	400			—			—			—			(1,000		)
Income from affiliate transactions	—			500			—			—			—
Net income / (loss)	1,501			23,230			(5,038		)	11,778			100,042
Less: Preferred return to preferred OP units	(1,213		)	(1,257		)	(1,263		)	(1,273		)	(1,281		)
Less: Amounts attributable to noncontrolling interests	310			(879		)	695			(276		)	(6,922		)
Less: Preferred stock distribution	(2,198		)	(2,197		)	(2,197		)	(2,354		)	(2,440		)
NET (LOSS) / INCOME ATTRIBUTABLE TO SUI	$	(1,600	)	$	18,897		$	(7,803	)	$	7,875		$	89,399
Weighted average common shares outstanding:
Basic	72,277			68,655			64,757			57,736			56,181
Diluted	72,685			69,069			64,757			58,126			57,639
Earnings / (loss) per share:
Basic	$	(0.02	)	$	0.27		$	(0.12	)	$	0.14		$	1.57
Diluted	$	(0.02	)	$	0.27		$	(0.12	)	$	0.14		$	1.56

4th Quarter 2016 Supplemental Information 4 Sun Communities, Inc.

Statements of Operations - Quarter to Date Comparison

(amounts in thousands, except per share amounts)



	Three Months Ended December 31,
	2016			2015			Change			% Change
REVENUES:
Income from real property (excluding transient revenue)	$	156,533		$	117,604		$	38,929		33.1	%
Transient revenue	10,824			5,568			5,256			94.4	%
Revenue from home sales	28,520			25,169			3,351			13.3	%
Rental home revenue	12,084			11,756			328			2.8	%
Ancillary revenues	4,982			3,576			1,406			39.3	%
Interest	4,791			4,074			717			17.6	%
Brokerage commissions and other revenues, net	900			491			409			83.3	%
Total revenues	218,634			168,238			50,396			30.0	%

EXPENSES:
Property operating and maintenance	47,917			33,360			14,557			43.6	%
Real estate taxes	12,184			8,683			3,501			40.3	%
Cost of home sales	21,617			19,296			2,321			12.0	%
Rental home operating and maintenance	6,657			6,841			(184		)	(2.7	)%
Ancillary expenses	4,728			3,888			840			21.6	%
Home selling expenses	2,504			2,079			425			20.4	%
General and administrative	17,177			10,511			6,666			63.4	%
Transaction costs	4,023			4,653			(630		)	(13.5	)%
Depreciation and amortization	62,205			47,530			14,675			30.9	%
Extinguishment of debt	1,127			—			1,127			N/A
Interest	30,641			28,066			2,575			9.2	%
Interest on mandatorily redeemable preferred OP units	789			790			(1		)	(0.1	)%
Total expenses	211,569			165,697			45,872			27.7	%
Income before other items	7,065			2,541			4,524			178.0	%
Other expenses, net ⁽⁴⁾	(5,848		)	—			(5,848		)	N/A
Gain on disposition of properties, net	—			98,430			(98,430		)	(100.0	)%
Current tax (expense) / benefit	(116		)	71			(187		)	(263.4	)%
Deferred tax benefit / (expense)	400			(1,000		)	1,400			(140.0	)%
Net income	1,501			100,042			(98,541		)	(98.5	)%
Less: Preferred return to preferred OP units	(1,213		)	(1,281		)	68			5.3	%
Less: Amounts attributable to noncontrolling interests	310			(6,922		)	7,232			104.5	%
Less: Preferred stock distribution	(2,198		)	(2,440		)	242			9.9	%
NET (LOSS) / INCOME ATTRIBUTABLE TO SUI	$	(1,600	)	$	89,399		$	(90,999	)	(101.8	)%
Weighted average common shares outstanding:
Basic	72,277			56,181			16,096			28.7	%
Diluted	72,685			57,639			15,046			26.1	%
Earnings / (loss) per share:
Basic	$	(0.02	)	$	1.57		$	(1.59	)	(101.3	)%
Diluted	$	(0.02	)	$	1.56		$	(1.58	)	(101.3	)%

4th Quarter 2016 Supplemental Information 5 Sun Communities, Inc.

Statements of Operations - Year to Date Comparison

(amounts in thousands, except per share amounts)



	Year Ended December 31,
	2016			2015			Change			% Change
REVENUES:
Income from real property (excluding transient revenue)	$	562,754		$	467,114		$	95,640		20.5	%
Transient revenue	58,163			38,964			19,199			49.3	%
Revenue from home sales	110,507			79,728			30,779			38.6	%
Rental home revenue	47,780			46,236			1,544			3.3	%
Ancillary revenues	33,424			24,532			8,892			36.3	%
Interest	18,113			15,938			2,175			13.7	%
Brokerage commissions and other revenues, net	3,037			2,219			818			36.9	%
Total revenues	833,778			674,731			159,047			23.6	%

EXPENSES:
Property operating and maintenance	173,274			135,797			37,477			27.6	%
Real estate taxes	44,306			34,714			9,592			27.6	%
Cost of home sales	80,420			58,941			21,479			36.4	%
Rental home operating and maintenance	24,294			24,956			(662		)	(2.7	)%
Ancillary expenses	23,425			17,519			5,906			33.7	%
Home selling expenses	9,744			7,476			2,268			30.3	%
General and administrative	64,087			47,455			16,632			35.1	%
Transaction costs	31,914			17,803			14,111			79.3	%
Depreciation and amortization	221,770			177,637			44,133			24.8	%
Extinguishment of debt	1,127			2,800			(1,673		)	(59.8	)%
Interest	119,163			107,659			11,504			10.7	%
Interest on mandatorily redeemable preferred OP units	3,152			3,219			(67		)	(2.1	)%
Total expenses	796,676			635,976			160,700			25.3	%
Income before other items	37,102			38,755			(1,653		)	(4.3	)%
Other expenses, net ⁽⁴⁾	(5,848		)	—			(5,848		)	N/A
Gain on disposition of properties, net	—			125,376			(125,376		)	(100.0	)%
Current tax expense	(683		)	(158		)	(525		)	(332.3	)%
Deferred tax benefit / (expense)	400			(1,000		)	1,400			140.0	%
Income from affiliate transactions	500			7,500			(7,000		)	(93.3	)%
Net income	31,471			170,473			(139,002		)	(81.5	)%
Less: Preferred return to preferred OP units	(5,006		)	(4,973		)	(33		)	(0.7	)%
Less: Amounts attributable to noncontrolling interests	(150		)	(10,054		)	9,904			98.5	%
Less: Preferred stock distribution	(8,946		)	(13,793		)	4,847			35.1	%
Less: Preferred stock redemption costs	—			(4,328		)	4,328			N/A
NET INCOME ATTRIBUTABLE TO SUI	$	17,369		$	137,325		$	(119,956	)	(87.4	)%
Weighted average common shares outstanding:
Basic	65,856			53,686			$	12,170		22.7	%
Diluted	66,321			53,702			$	12,619		23.5	%
Earnings per share:
Basic	$	0.27		$	2.53		$	(2.26	)	(89.3	)%
Diluted	$	0.26		$	2.52		$	(2.26	)	(89.7	)%

4th Quarter 2016 Supplemental Information 6 Sun Communities, Inc.

Summary of Securities Outstanding as of December 31, 2016

(units/stock/shares in thousands)



	Number of Units/Stock/Shares Outstanding	Conversion Rate	If Converted	Issuance Price per unit	Annual Distribution Rate
Convertible Securities
Series A-1 preferred OP Units	367	2.4390	895	$100	6.0%
Series A-3 preferred OP Units	40	1.8605	74	$100	4.5%
Series A-4 preferred OP Units	634	0.4444	282	$25	6.5%
Series C preferred OP Units	333	1.1100	370	$100	4.0%
Common OP Units	2,759	1.0000	2,759	N/A	Mirrors the Common Share distributions
Series A-4 cumulative convertible Preferred Stock	1,682	0.4444	747	$25	6.5%

Non-Convertible Securities
Preferred Stock ( SUI-PrA)	3,400	N/A	N/A	$25	7.125%

Common Shares	73,206	N/A	N/A	N/A	$2.60*
* Annual distribution is based on the last quarter distribution annualized.

4th Quarter 2016 Supplemental Information 7 Sun Communities, Inc.

Reconciliations to Non-GAAP Financial Measures

4th Quarter 2016 Supplemental Information 8 Sun Communities, Inc.

Reconciliation of Net (Loss) Income Attributable to Sun Communities, Inc. Common Stockholders to Funds from Operations

(amounts in thousands except for per share data)



	Three Months Ended December 31,						Year Ended December 31,
	2016			2015			2016			2015
Net (loss) income attributable to Sun Communities, Inc. common stockholders	$	(1,600	)	$	89,399		$	17,369		$	137,325
Adjustments:
Preferred return to preferred OP units	604			631			2,462			2,612
Amounts attributable to noncontrolling interests	(296		)	6,941			(41		)	9,644
Depreciation and amortization	62,351			47,801			221,576			178,048
Gain on disposition of properties, net	—			(98,430		)	—			(125,376		)
Gain on disposition of assets, net	(3,487		)	(3,060		)	(15,713		)	(10,125		)
Funds from operations ("FFO") attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities ^{(1) (6)}	57,572			43,282			225,653			192,128
Adjustments:
Transaction costs	4,023			4,653			31,914			17,803
Other acquisition related costs⁽⁵⁾	1,861			—			3,328			—
Income from affiliate transactions	—			—			(500		)	(7,500		)
Foreign currency exchange ⁽⁴⁾	5,005			—			5,005			—
Contingent liability re-measurement ⁽⁴⁾	181			—			181			—
Gain on acquisition of property ⁽⁴⁾	(510		)	—			(510		)	—
Hurricane related costs ⁽⁴⁾	1,172			—			1,172			—
Preferred stock redemption costs	—			—			—			4,328
Extinguishment of debt	1,127			—			1,127			2,800
Debt premium write-off	(839		)	—			(839		)	—
Deferred tax (benefit) expense	(400		)	1,000			(400		)	1,000
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities excluding certain items^{(1) (6)}	$	69,192		$	48,935		$	266,131		$	210,559

Weighted average common shares outstanding - basic:	72,277			56,181			65,856			53,686
Add:
Common stock issuable upon conversion of stock options	1			13			8			16
Restricted stock	407			423			457			411
Common OP units	2,793			2,863			2,844			2,803
Common stock issuable upon conversion of Series A-1 preferred OP units	901			947			925			988
Common stock issuable upon conversion of Series A-3 preferred OP units	75			75			75			75
Weighted average common shares outstanding - fully diluted	76,454			60,502			70,165			57,979

FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities ⁽⁶⁾ per share - fully diluted	$	0.75		$	0.72		$	3.22		$	3.31
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities ⁽⁶⁾ per share excluding certain items - fully diluted	$	0.91		$	0.81		$	3.79		$	3.63

4th Quarter 2016 Supplemental Information 9 Sun Communities, Inc.

Reconciliation of Recurring EBITDA to Net (Loss) Income Attributable to Sun Communities, Inc. Common Stockholders

(amounts in thousands)

The following table reconciles Recurring EBITDA to consolidated net (loss) income:



	Three Months Ended December 31,						Year Ended December 31,
	2016			2015			2016			2015
RECURRING EBITDA ⁽¹⁾	$	105,850		$	83,580		$	414,228		$	347,873
Interest	30,641			28,066			119,163			107,659
Interest on mandatorily redeemable preferred OP units	789			790			3,152			3,219
Depreciation and amortization	62,205			47,530			221,770			177,637
Extinguishment of debt	1,127			—			1,127			2,800
Transaction costs	4,023			4,653			31,914			17,803
Gain on disposition of properties, net	—			(98,430		)	—			(125,376		)
Other expenses, net	5,848			—			5,848			—
Current tax expense / (benefit)	116			(71		)	683			158
Deferred tax (benefit) / expense	(400		)	1,000			(400		)	1,000
Income from affiliate transactions	—			—			(500		)	(7,500		)
Net income	1,501			100,042			31,471			170,473
Less: Preferred return to preferred OP units	1,213			1,281			5,006			4,973
Less: Amounts attributable to noncontrolling interests	(310		)	6,922			150			10,054
Net income attributable to Sun Communities, Inc.	598			91,839			26,315			155,446
Less: Preferred stock distributions	2,198			2,440			8,946			13,793
Less: Preferred stock redemption costs	—			—			—			4,328
Net (loss) / income attributable to Sun Communities, Inc., common stockholders	$	(1,600	)	$	89,399		$	17,369		$	137,325

4th Quarter 2016 Supplemental Information 10 Sun Communities, Inc.

Reconciliation of Net Operating Income to Net (Loss) Income Attributable to Sun Communities, Inc. Common Stockholders

(amounts in thousands)

The following table reconciles net operating income to consolidated net (loss) income:



	Three Months Ended December 31,						Year Ended December 31,
	2016			2015			2016			2015
Real Property NOI	$	107,256		$	81,129		$	403,337		$	335,567
Rental Program NOI	20,863			20,427			85,086			83,232
Home Sales NOI/Gross Profit	6,903			5,873			30,087			20,787
Ancillary NOI/Gross Profit (Loss)	254			(312		)	9,999			7,013
Site rent from Rental Program (included in Real Property NOI) ⁽⁷⁾	(15,436		)	(15,512		)	(61,600		)	(61,952		)
NOI/Gross profit	119,840			91,605			466,909			384,647
Adjustments to arrive at net (loss) income:
Other revenues	5,691			4,565			21,150			18,157
Home selling expenses	(2,504		)	(2,079		)	(9,744		)	(7,476		)
General and administrative	(17,177		)	(10,511		)	(64,087		)	(47,455		)
Transaction costs	(4,023		)	(4,653		)	(31,914		)	(17,803		)
Depreciation and amortization	(62,205		)	(47,530		)	(221,770		)	(177,637		)
Extinguishment of debt	(1,127		)	—			(1,127		)	(2,800		)
Interest expense	(31,430		)	(28,856		)	(122,315		)	(110,878		)
Other expenses, net	(5,848		)	—			(5,848		)	—
Gain on disposition of properties, net	—			98,430			—			125,376
Current tax (expense) / benefit	(116		)	71			(683		)	(158		)
Deferred tax benefit / (expense)	400			(1,000		)	400			(1,000		)
Income from affiliate transactions	—			—			500			7,500
Net income	1,501			100,042			31,471			170,473
Less: Preferred return to preferred OP units	1,213			1,281			5,006			4,973
Less: Amounts attributable to noncontrolling interests	(310		)	6,922			150			10,054
Net income attributable to Sun Communities, Inc.	598			91,839			26,315			155,446
Less: Preferred stock distributions	2,198			2,440			8,946			13,793
Less: Preferred stock redemption costs	—			—			—			4,328
Net (loss) / income attributable to Sun Communities, Inc. common stockholders	$	(1,600	)	$	89,399		$	17,369		$	137,325

4th Quarter 2016 Supplemental Information 11 Sun Communities, Inc.

Non-GAAP and Other Financial Measures

4th Quarter 2016 Supplemental Information 12 Sun Communities, Inc.

Financial Highlights

(amounts in thousands, except per share data)



	Quarter Ended
	12/31/2016			9/30/2016		6/30/2016			3/31/2016		12/31/2015
OPERATING INFORMATION
Total revenues	$	218,634		$	249,701	$	190,799		$	174,644	$	168,238
Net income (loss)	$	1,501		$	23,230	$	(5,038	)	$	11,778	$	100,042
Net (loss) income attributable to common stockholders	$	(1,600	)	$	18,897	$	(7,803	)	$	7,875	$	89,399
(Loss) earnings per share basic	$	(0.02	)	$	0.27	$	(0.12	)	$	0.14	$	1.57
(Loss) earnings per share diluted	$	(0.02	)	$	0.27	$	(0.12	)	$	0.14	$	1.56

Recurring EBITDA ⁽¹⁾	$	105,850		$	123,276	$	94,882		$	90,220	$	83,580
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities^{(1) (6)}	$	57,572		$	78,023	$	37,473		$	53,270	$	43,282
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities excluding certain items⁽¹⁾ ⁽⁶⁾	$	69,192		$	83,181	$	58,452		$	55,991	$	48,935
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities ⁽⁶⁾per share - fully diluted	$	0.75		$	1.06	$	0.54		$	0.86	$	0.72
FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities ⁽⁶⁾ per share excluding certain items - fully diluted	$	0.91		$	1.13	$	0.85		$	0.90	$	0.81


BALANCE SHEETS
Total assets	$	5,870,776		$	5,904,706	$	5,823,191		$	4,562,886	$	4,181,799
Total debt	$	3,110,042		$	3,102,993	$	3,340,329		$	2,362,450	$	2,336,297
Total liabilities	$	3,441,605		$	3,429,743	$	3,645,744		$	2,591,903	$	2,562,421

4th Quarter 2016 Supplemental Information 13 Sun Communities, Inc.

Debt Analysis

(amounts in thousands)



	Quarter Ended
	12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015
DEBT OUTSTANDING
Lines of credit	$	100,095	$	57,737	$	357,721	$	58,065	$	24,687
Mortgage loans payable	2,819,567		2,854,831		2,792,021		2,114,818		2,125,267
Preferred OP units - mandatorily redeemable	45,903		45,903		45,903		45,903		45,903
Secured borrowing⁽³⁾	144,477		144,522		144,684		143,664		140,440
Total debt	$	3,110,042	$	3,102,993	$	3,340,329	$	2,362,450	$	2,336,297

% FIXED/FLOATING
Fixed	91.8%		93.1%		84.5%		90.7%		92.0%
Floating	8.2%		6.9%		15.5%		9.3%		8.0%
Total	100.0%		100.0%		100.0%		100.0%		100.0%

WEIGHTED AVERAGE INTEREST RATES
Lines of credit	2.14%		1.93%		1.89%		1.87%		1.62%
Mortgage loans payable	4.24%		4.30%		4.38%		4.67%		4.65%
Preferred OP units - mandatorily redeemable	6.87%		6.87%		6.87%		6.87%		6.87%
Average before Secured borrowing	4.21%		4.29%		4.13%		4.64%		4.66%
Secured borrowing ⁽³⁾	10.03%		10.06%		10.09%		10.12%		10.17%
Total average	4.48%		4.56%		4.39%		4.98%		4.99%

DEBT RATIOS
Net Debt/(T-12) Recurring EBITDA ⁽¹⁾	7.5		7.7		9.1		5.5		6.6

Net Debt/Enterprise Value	33.8%		32.8%		36.6%		27.7%		34.0%

Net Debt + Preferred Stock/Enterprise Value	35.2%		34.2%		38.0%		29.7%		36.1%

Net Debt/Gross Assets	45.0%		44.1%		49.0%		35.8%		45.6%

COVERAGE RATIOS
(T-12) Recurring EBITDA/ Interest ⁽¹⁾	3.2		3.1		3.1		3.0		3.1

(T-12) Recurring EBITDA/ Interest + Pref. Distributions + Pref. Stock Distribution ⁽¹⁾	2.9		2.9		2.8		2.7		2.6



MATURITIES/PRINCIPAL AMORTIZATION NEXT FIVE YEARS	2017			2018			2019			2020			2021
Lines of credit	$	—		$	2,889		$	—		$	97,455		$	—
Mortgage loans payable:
Maturities	32,688			26,186			64,314			58,078			270,680
Weighted average rate of maturities	6.67		%	6.22		%	5.35		%	3.39		%	5.53		%
Principal amortization	51,878			53,318			54,035			54,575			53,436
Preferred OP units - mandatorily redeemable	11,240			—			—			—			—
Secured borrowing ⁽³⁾	5,645			6,186			6,727			7,341			7,888
Total	$	101,451		$	88,579		$	125,076		$	217,449		$	332,004

4th Quarter 2016 Supplemental Information 14 Sun Communities, Inc.

Statements of Operations – Same Community

(amounts in thousands except for Other Information)



	Three Months Ended December 31,										Year Ended December 31,
	2016		2015			Change			% Change		2016		2015			Change			% Change
REVENUES:
Income from real property	$	113,884	$	107,224		$	6,660		6.2	%	$	466,967	$	440,202		$	26,765		6.1	%

PROPERTY OPERATING EXPENSES:
Payroll and benefits	8,809		8,944			(135		)	(1.5	)%	38,688		36,465			2,223			6.1	%
Legal, taxes & insurance	1,224		1,412			(188		)	(13.3	)%	5,398		6,633			(1,235		)	(18.6	)%
Utilities	5,761		5,958			(197		)	(3.3	)%	26,161		25,674			487			1.9	%
Supplies and repair	3,884		4,651		⁽⁸⁾	(767		)	(16.5	)%	16,617		17,154		⁽⁸⁾	(537		)	(3.1	)%
Other	3,283		2,333			950			40.7	%	12,945		11,823			1,122			9.5	%
Real estate taxes	7,936		7,880			56			0.7	%	34,239		31,563			2,676			8.5	%
Property operating expenses	30,897		31,178			(281		)	(0.9	)%	134,048		129,312			4,736			3.7	%
NET OPERATING INCOME (NOI)⁽¹⁾	$	82,987	$	76,046		$	6,941		9.1	%	$	332,919	$	310,890		$	22,029		7.1	%



	As of December 31,
	2016			2015				Change			% Change
OTHER INFORMATION
Number of properties	219			219				—

Overall occupancy⁽⁹⁾	96.6		%	94.7		%	⁽¹⁰⁾	1.9		%

Sites available for development	6,542			5,906				636			10.8	%

Monthly base rent per site - MH	$	498		$	482			$	16		3.3	%
Monthly base rent per site - RV ⁽¹¹⁾	$	436		$	423			$	13		3.1	%
Monthly base rent per site - Total	$	489		$	474			$	15		3.2	%

4th Quarter 2016 Supplemental Information 15 Sun Communities, Inc.

Rental Program Summary

(amounts in thousands except for *)



	Three Months Ended December 31,									Year Ended December 31,
	2016		2015		Change			% Change		2016		2015		Change			% Change
REVENUES:
Rental home revenue	$	12,084	$	11,756	$	328		2.8	%	$	47,780	$	46,236	$	1,544		3.3	%
Site rent included in Income from real property	15,436		15,512		(76		)	(0.5	)%	61,600		61,952		(352		)	(0.6	)%
Rental Program revenue	27,520		27,268		252			0.9	%	109,380		108,188		1,192			1.1	%

EXPENSES:
Commissions	532		775		(243		)	(31.4	)%	2,242		3,216		(974		)	(30.3	)%
Repairs and refurbishment	3,537		4,198		(661		)	(15.8	)%	12,825		12,326		499			4.1	%
Taxes and insurance	1,556		973		583			59.9	%	5,734		5,638		96			1.7	%
Marketing and other	1,032		895		137			15.3	%	3,493		3,776		(283		)	(7.5	)%
Rental Program operating and maintenance	6,657		6,841		(184		)	(2.7	)%	24,294		24,956		(662		)	(2.7	)%
NET OPERATING INCOME (NOI) ⁽¹⁾	$	20,863	$	20,427	$	436		2.1	%	$	85,086	$	83,232	$	1,854		2.2	%

Occupied rental home information as of December 31, 2016 and 2015:
Number of occupied rentals, end of period*										10,733		10,685		48			0.5	%
Investment in occupied rental homes, end of period										$	457,691	$	448,837	$	8,854		2.0	%
Number of sold rental homes*										1,089		908		181			19.9	%
Weighted average monthly rental rate, end of period*										$	882	$	858	$	24		2.8	%

4th Quarter 2016 Supplemental Information 16 Sun Communities, Inc.

Homes Sales Summary

(amounts in thousands except for *)



	Three Months Ended December 31,											Year Ended December 31,
	2016			2015			Change			% Change		2016			2015			Change			% Change
New home sales	$	10,505		$	7,318		$	3,187		43.6	%	$	30,977		$	22,208		$	8,769		39.5	%
Pre-owned home sales	18,015			17,851			164			0.9	%	79,530			57,520			22,010			38.3	%
Revenue from home sales	28,520			25,169			3,351			13.3	%	110,507			79,728			30,779			38.6	%

New home cost of sales	9,289			6,272			3,017			48.1	%	26,802			18,620			8,182			43.9	%
Pre-owned home cost of sales	12,328			13,024			(696		)	(5.3	)%	53,618			40,321			13,297			33.0	%
Cost of home sales	21,617			19,296			2,321			12.0	%	80,420			58,941			21,479			36.4	%

NOI / Gross Profit ⁽¹⁾	$	6,903		$	5,873		$	1,030		17.5	%	$	30,087		$	20,787		$	9,300		44.7	%

Gross profit – new homes	$	1,216		$	1,046		$	170		16.3	%	$	4,175		$	3,588		$	587		16.4	%
Gross margin % – new homes	11.6		%	14.3		%	(2.7		)%			13.5		%	16.2		%	(2.7		)%
Average selling price – new homes*	$	105,050		$	89,242		$	15,808		17.7	%	$	94,156		$	81,346		$	12,810		15.8	%

Gross profit – pre-owned homes	$	5,687		$	4,827		$	860		17.8	%	$	25,912		$	17,199		$	8,713		50.7	%
Gross margin % – pre-owned homes	31.6		%	27.0		%	4.6		%			32.6		%	29.9		%	2.7		%
Average selling price – pre-owned homes*	$	27,213		$	27,211		$	2		—	%	$	27,974		$	26,027		$	1,947		7.5	%

Home sales volume:
New home sales*	100			82			18			22.0	%	329			273			56			20.5	%
Pre-owned home sales*	662			656			6			0.9	%	2,843			2,210			633			28.6	%
Total homes sold*	762			738			24			3.3	%	3,172			2,483			689			27.8	%

4th Quarter 2016 Supplemental Information 17 Sun Communities, Inc.

Acquisitions Summary - Properties Acquired in 2016 and 2015

(amounts in thousands except for statistical data)



	Three Months Ended December 31, 2016		Year Ended December 31, 2016
REVENUES:
Income from real property	$	53,473	$	153,950
PROPERTY AND OPERATING EXPENSES:
Payroll and benefits	7,363		18,056
Legal, taxes & insurance	330		543
Utilities	12,893		41,334
Supplies and repair	1,774		4,115
Other	2,596		9,417
Real estate taxes	4,248		10,067
Property operating expenses	29,204		83,532

NET OPERATING INCOME (NOI)⁽¹⁾	$	24,269	$	70,418

			As of December 31, 2016
Other information:
Number of properties			122
Occupied sites ⁽¹²⁾			24,359
Developed sites ⁽¹²⁾			25,055
Occupancy % ⁽¹²⁾			97.2		%
Transient sites			8,703
Monthly base rent per site - MH			$	596
Monthly base rent per site - RV ⁽¹¹⁾			$	398
Monthly base rent per site - Total ⁽¹¹⁾			$	509
Ancillary revenues, net (in thousands)			$	2,992

Home sales:
Gross profit from home sales (in thousands)			$	4,452
New homes sales			95
Pre-owned homes sales			306

Occupied rental home information:
Rental program NOI ⁽¹⁾(in thousands)			$	540
Number of occupied rentals, end of period			292
Investment in occupied rental homes (in thousands)			$	9,716
Weighted average monthly rental rate			$	955

4th Quarter 2016 Supplemental Information 18 Sun Communities, Inc.



Property Summary
(includes MH and Annual/Seasonal RV’s)

COMMUNITIES	12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015
FLORIDA
Communities	121		121		121		61		61
Developed sites ⁽¹²⁾	36,326		36,050		36,119		24,312		24,216
Occupied ⁽¹²⁾	35,021		34,745		34,720		23,359		23,201
Occupancy % ⁽¹²⁾	96.4	%	96.4	%	96.1	%	96.1	%	95.8	%
Sites for development	1,465		1,259		1,259		823		823
MICHIGAN
Communities	67		67		66		66		65
Developed sites ⁽¹²⁾	24,512		24,388		24,387		24,363		23,966
Occupied ⁽¹²⁾	23,248		23,218		23,198		23,079		22,677
Occupancy % ⁽¹²⁾	94.8	%	95.2	%	95.1	%	94.7	%	94.6	%
Sites for development	2,589		2,628		2,248		2,105		2,105
TEXAS
Communities	21		21		21		17		16
Developed sites ⁽¹²⁾	6,186		6,088		6,071		5,970		5,965
Occupied ⁽¹²⁾	5,862		5,774		5,771		5,602		5,517
Occupancy % ⁽¹²⁾	94.8	%	94.8	%	95.1	%	93.8	%	92.5	%
Sites for development	1,474		1,455		1,347		1,347		1,347
CALIFORNIA
Communities	22		22		22		3		3
Developed sites ⁽¹²⁾	4,862		4,863		4,864		198		198
Occupied ⁽¹²⁾	4,793		4,792		4,796		192		192
Occupancy % ⁽¹²⁾	98.6	%	98.5	%	98.6	%	97.0	%	97.0	%
Sites for development	332		332		332		332		332
ARIZONA
Communities	11		11		11		10		10
Developed sites ⁽¹²⁾	3,565		3,567		3,532		3,302		3,301
Occupied ⁽¹²⁾	3,338		3,305		3,281		3,102		3,078
Occupancy % ⁽¹²⁾	93.6	%	92.7	%	92.9	%	93.9	%	93.2	%
Sites for development	358		358		358		393		393
ONTARIO, CANADA
Communities	15		15		15		—		—
Developed sites ⁽¹²⁾	3,368		3,453		3,375		—		—
Occupied ⁽¹²⁾	3,368		3,453		3,375		—		—
Occupancy % ⁽¹²⁾	100.0	%	100.0	%	100.0	%	—	%	—	%
Sites for development	1,599		2,029		2,029		—		—
INDIANA
Communities	11		11		11		11		11
Developed sites ⁽¹²⁾	2,900		2,900		2,900		2,900		2,900
Occupied ⁽¹²⁾	2,724		2,712		2,700		2,674		2,628
Occupancy % ⁽¹²⁾	93.9	%	93.5	%	93.1	%	92.2	%	90.6	%
Sites for development	316		316		316		363		363

4th Quarter 2016 Supplemental Information 19 Sun Communities, Inc.



Property Summary
(includes MH and Annual/Seasonal RV’s)

COMMUNITIES	12/31/2016		9/30/2016		6/30/2016		3/31/2016		12/31/2015
OHIO
Communities	9		9		9		9		9
Developed sites ⁽¹²⁾	2,715		2,719		2,718		2,700		2,703
Occupied ⁽¹²⁾	2,595		2,602		2,616		2,585		2,560
Occupancy % ⁽¹²⁾	95.6	%	95.7	%	96.2	%	95.7	%	94.7	%
Sites for development	—		—		—		—		—
COLORADO
Communities	8		7		7		7		7
Developed sites ⁽¹²⁾	2,335		2,335		2,335		2,335		2,335
Occupied ⁽¹²⁾	2,325		2,323		2,320		2,319		2,315
Occupancy % ⁽¹²⁾	99.6	%	99.5	%	99.4	%	99.3	%	99.1	%
Sites for development	656		304		304		304		304
OTHER STATES
Communities	56		55		54		49		49
Developed sites ⁽¹²⁾	14,313		14,415		14,337		13,683		13,657
Occupied ⁽¹²⁾	13,919		13,991		13,912		13,237		13,142
Occupancy % ⁽¹²⁾	97.3	%	97.1	%	97.0	%	96.7	%	96.2	%
Sites for development	1,827		1,823		1,728		1,514		1,514
TOTAL - PORTFOLIO
Communities	341		339		337		233		231
Developed sites ⁽¹²⁾	101,082		100,778		100,638		79,763		79,241
Occupied ⁽¹²⁾	97,193		96,915		96,689		76,149		75,310
Occupancy % ⁽¹²⁾	96.2	%	96.2	%	96.1	%	95.5	%	95.0	%
Sites for development	10,616		10,504		9,921		7,181		7,181
% Communities age restricted	33.1	%	33.3	%	33.5	%	26.2	%	26.4	%

TRANSIENT RV PORTFOLIO SUMMARY
Location
Florida	6,497		7,232		6,990		2,664		2,823
Ontario, Canada	1,500		1,485		1,657		—		—
Texas	1,407		1,446		1,455		799		414
Arizona	1,049		1,047		1,055		1,096		1,087
New Jersey	1,042		1,047		1,084		995		981
New York	830		484		483		489		499
Maine	555		556		571		575		604
California	513		478		518		296		296
Indiana	502		501		501		501		501
Michigan	204		203		126		150		160
Ohio	198		194		195		213		210
Other States	1,997		1,801		1,864		2,099		2,092
Total transient RV sites	16,294		16,474		16,499		9,877		9,667

4th Quarter 2016 Supplemental Information 20 Sun Communities, Inc.

Capital Improvements, Development, and Acquisitions

(amounts in thousands except for *)



	Recurring
	Capital			Recurring
	Expenditures			Capital			Lot					Expansion &			Revenue
		Average/Site*			Expenditures ⁽¹³⁾			Modifications ⁽¹⁴⁾		Acquisitions ⁽¹⁵⁾			Development ⁽¹⁶⁾			Producing ⁽¹⁷⁾
2016		$	211		$	17,613		$	19,040	$	1,822,564		$	47,958		$	2,631
2015		$	230		$	20,344		$	13,961	$	1,214,482		$	28,660		$	4,497
2014		$	227		$	18,077		$	9,414	$	785,624		$	22,196		$	1,454

4th Quarter 2016 Supplemental Information 21 Sun Communities, Inc.

Operating Statistics for Manufactured Homes and Annual/Seasonal RV’s



	Resident		Net Leased		New Home		Pre-owned		Brokered
MARKETS	Move-outs		Sites ⁽¹⁸⁾		Sales		Home Sales		Re-sales
Michigan		439		310		9		1,231		152
Florida		358		662		186		338		987
Texas		180		249		14		377		49
Indiana		54		96		—		213		9
Ohio		100		36		1		102		6
Arizona		49		127		40		28		133
Colorado		12		12		16		204		46
Other states and Ontario, Canada		530		194		63		350		273
Year Ended December 31, 2016		1,722		1,686		329		2,843		1,655



	Resident		Net Leased		New Home		Pre-owned		Brokered
TOTAL FOR YEAR ENDED	Move-outs		Sites ⁽¹⁸⁾		Sales		Home Sales		Re-sales
2015		1,344		1,905		273		2,210		1,244
2014		1,504		1,890		113		1,853		618



	Resident			Resident
PERCENTAGE TRENDS	Move-outs			Re-sales
2016		2.0	%		6.1	%
2015		2.0	%		5.9	%
2014		2.6	%		5.0	%

4th Quarter 2016 Supplemental Information 22 Sun Communities, Inc.

Footnotes and Definitions

(1)

Investors in and analysts following the real estate industry utilize funds from operations (FFO), net operating income (NOI), and recurring earnings before interest, tax, depreciation and amortization (Recurring EBITDA) as supplemental performance measures. We believe FFO, NOI, and Recurring EBITDA are appropriate measures given their wide use by and relevance to investors and analysts. 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. 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. Recurring EBITDA, a metric calculated as EBITDA exclusive of certain nonrecurring items, provides a further tool to evaluate ability to incur and service debt and to fund dividends and other cash needs. Additionally, FFO, NOI, and Recurring EBITDA are commonly used in various ratios, pricing multiples/yields and returns and valuation calculations used to measure financial position, performance and value.

FFO is defined by the National Association of Real Estate Investment Trusts (NAREIT) as net income (loss) computed in accordance with generally accepted accounting principles (GAAP), excluding gains (or losses) from sales of depreciable operating property, plus real estate-related depreciation and amortization, 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 the Company's operating performance. Management generally considers FFO to be a useful measure for reviewing comparative operating and financial performance because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment and excluding real estate asset depreciation and amortization (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO provides a performance measure that, when compared period over period, reflects the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing perspective not readily apparent from net income (loss). Management believes that 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. FFO is computed in accordance with the Company's interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than the Company. The Company also uses FFO excluding certain items, which excludes certain gain and loss items that management considers unrelated to the operational and financial performance of our core business. We believe that this provides investors with another financial measure of our operating performance that is more comparable when evaluating period over period results.

Because FFO excludes significant economic components of net income (loss) including depreciation and amortization, FFO should be used as an adjunct to net income (loss) and not as an alternative to net income (loss). The principal limitation of FFO is that it does not represent cash flow from operations as defined by GAAP and is a supplemental measure of performance that does not replace net income (loss) as a measure of performance or net cash provided by operating activities as a measure of liquidity. In addition, 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 only provides investors with an additional performance measure that, when combined with measures computed in accordance with GAAP such as net income (loss), cash flow from operating activities, investing activities and financing activities, provide investors with an indication of our ability to service debt and to fund acquisitions and other expenditures. Other REITs may use different methods for calculating FFO, accordingly, our FFO may not be comparable to other REITs.

NOI is derived from revenues minus property operating expenses and real estate taxes. NOI does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (loss) (determined in accordance with GAAP) as an indication of the Company's financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company's liquidity; nor is it indicative of funds available for the Company's cash needs, including its ability to make cash distributions. The Company believes that net income (loss) is the most directly comparable GAAP measurement to NOI. Because of the inclusion of items such as interest, depreciation, and amortization, the use of 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. The Company believes that NOI is helpful to investors as a 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. The Company uses NOI as a key management tool 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

4th Quarter 2016 Supplemental Information 23 Sun Communities, Inc.

costs, therefore, NOI is a measure of the operating performance of the properties of the Company rather than of the Company overall.

EBITDA is defined as NOI plus other income, plus (minus) equity earnings (loss) from affiliates, minus general and administrative expenses. EBITDA includes EBITDA from discontinued operations. The Company believes that net income (loss) is the most directly comparable GAAP measurement to EBITDA.

(2) The consideration amounts presented with respect to acquired communities represent the economic transaction and do not contemplate the fair value purchase accounting required by GAAP.

(3) This is a transferred asset transaction which has been classified as collateralized receivables and the cash received from this transaction has been classified as a secured borrowing. The interest income and interest expense accrue at the same rate/amount.

(4) Other expenses, net on the Consolidated Statements of Operations is comprised of: foreign currency exchange $5.0 million; hurricane related costs $1.2 million; and contingent liability re-measurement $0.2 million; partially offset by gain on acquisition of property $0.5 million.

(5) These costs represent the first year expenses incurred to bring acquired properties up to the Company's operating standards, including items such as tree trimming and painting costs that do not meet the Company's capitalization policy. As these costs have become more significant in connection with the size of our acquisitions, they are included as an adjustment to FFO for the year ended December 31, 2016. The Company incurred $1.1 million and $2.8 million of these first year expenses for the three months and year ended December 31, 2015, and had a similar adjustment been made, FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per share excluding certain items would have been $0.83 and $3.68 for the three months and year ended December 31, 2015.

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

(7) The renter's monthly payment includes the site rent and an amount attributable to the leasing of the home. The site rent is reflected in Real Property NOI. For purposes of management analysis, the site rent is included in the Rental Program revenue to evaluate the incremental revenue gains associated with implementation of the Rental Program, and to assess the overall growth and performance of the Rental Program and financial impact on our operations.

(8) Three months and year ended December 31, 2015 excludes $1.1 million and $2.8 million of first year expenses for properties acquired in late 2014 and 2015 incurred to bring the properties up to Sun's operating standards. These costs did not meet the Company's capitalization policy.

(9) Includes manufactured housing (MH) and annual/seasonal recreational vehicle (RV) sites, and excludes transient RV sites and recently completed but vacant expansion sites.

(10) Occupancy reflects current year gains from expansion sites and the conversion of transient RV guests to annual/seasonal RV contracts as vacant in 2015.

(11) Monthly base rent per site pertains to annual/seasonal RV sites and excludes transient RV sites.

(12) Includes MH and annual/seasonal RV sites, and excludes transient RV sites.

(13) Includes capital expenditures necessary to maintain asset quality, including purchasing and replacing assets used to operate the community. These capital expenditures include items such as: major road, driveway, and pool improvements; clubhouse renovations; adding or replacing street lights; playground equipment; signage; maintenance facilities; manager housing and property vehicles. The minimum capitalized amount is five hundred dollars.

(14) Includes capital expenditures which improve the asset quality of the community. These costs are incurred when an existing older home moves out, and the site is prepared for a new home, more often than not, a multi-sectional home. These activities which are mandated by strict manufacturer’s installation requirements and state building code include items such as new foundations, driveways, and utility upgrades.

4th Quarter 2016 Supplemental Information 24 Sun Communities, Inc.

(15) Acquisitions represent the purchase price of existing operating communities and land parcels to develop expansions or new communities. Acquisitions also include deferred maintenance identified during due diligence and those capital improvements necessary to bring the community up to the Company’s 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; and new signage including main signs and internal road signs. These are considered acquisition costs and although identified during due diligence, they sometimes require up to twelve months after closing to complete.

(16) Expansion and development costs consist primarily of construction costs and costs necessary to complete home site improvements.


(17)	Capital costs related to revenue generating activities, consisting primarily of garages, sheds, and sub-metering of water, sewer and electricity. Revenue generating attractions at our RV resorts are also included here and, occasionally, a special capital project requested by residents and accompanied by an extra rental increase will be classified as revenue producing.

(18) Net leased sites do not include occupied sites acquired in that year.

Certain financial information has been revised to reflect reclassifications in prior periods to conform to current period presentation.

4th Quarter 2016 Supplemental Information 25 Sun Communities, Inc.

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