Sun Communities
Annual Report 2017

Plain-text annual report

7.0% 2012-2017 AVERAGE 7.0% 2012-2017 AVERAGE 7.7% 7.7% 9.1% 9.1% 7.1% 7.1% 6.9% 6.9% 5.5% 5.5% 5.9% 5.9% YE 2012 YE 2012 YE 2013 YE 2013 YE 2014 YE 2014 YE 2015 YE 2015 YE 2016 YE 2016 YE 2017 YE 2017 900.0% 900.0% 800.0% 800.0% 700.0% 700.0% 600.0% 600.0% 500.0% 500.0% 400.0% 400.0% 300.0% 300.0% 200.0% 200.0% 100.0% 100.0% 0.0% 0.0% (100.0%) (100.0%) 10 - year Total Return 10 - year Total Return 846.3% 846.3% 126.0% 126.0% 105.0% 105.0% Sun Communities, Inc. (SUI) Sun Communities, Inc. (SUI) MSCI US REIT (RMS) MSCI US REIT (RMS) S&P 500 S&P 500 230 MH Communities 230 MH Communities 89 RV Communities 89 RV Communities 31 MH and RV Communities 31 MH and RV Communities 66% 66% 25% 25% 9% 9% 25% 25% 9% 9% Gary A. Shiffman Gary A. Shiffman chairman and chief chairman and chief executive officer executive officer UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2017 Commission file number 1-12616 SUN COMMUNITIES, INC. (Exact Name of Registrant as Specified in its Charter) Maryland (State of Incorporation) 27777 Franklin Rd. Suite 200 Southfield, Michigan (Address of Principal Executive Offices) 38-2730780 (I.R.S. Employer Identification No.) 48034 (Zip Code) (248) 208-2500 (Registrant’s telephone number, including area code) Common Stock, Par Value $0.01 per Share New York Stock Exchange Securities Registered Pursuant to Section 12(b) of the Act Name of each exchange on which registered Securities Registered Pursuant to Section 12(g) of the Act: 6.50% Series A-4 Cumulative Convertible Preferred Stock, par value $0.01 per Share Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [X] No [ ] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes [ ] No [X] Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ X ] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. (Check one): Large accelerated filer [ X ] Smaller reporting company [ ] Accelerated filer [ ] Non-accelerated filer [ ] Emerging growth company [ ] If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section to Section 13(a) of the Exchange Act. [ ] Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X] As of June 30, 2017, the aggregate market value of the Registrant’s stock held by non-affiliates was $6,722,799,273 (computed by reference to the closing sales price of the Registrant’s common stock as of June 30, 2017). For this computation, the Registrant has excluded the market value of all shares of common stock reported as beneficially owned by executive officers and directors of the Registrant; such exclusion shall not be deemed to constitute an admission that any such person is an affiliate of the Registrant. Number of shares of common stock, $0.01 par value per share, outstanding as of February 15, 2018: 79,739,141 Documents Incorporated By Reference Unless provided in an amendment to this Annual Report on Form 10-K, the information required by Part III is incorporated by reference to the registrant’s proxy statement to be filed pursuant to Regulation 14A, with respect to the registrant’s 2018 annual meeting of stockholders. SUN COMMUNITIES, INC. Table of Contents Item Description Page Part I. Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4. Part II. Item 5. Item 6. Item 7. Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures about Market Risk Item 8. Item 9. Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information Part III. Item 10. Directors, Executive Officers and Corporate Governance Item 11. Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accountant Fees and Services Item 12. Item 13. Item 14. Part IV. Item 15. Item 16. Exhibits and Financial Statement Schedules Form 10-K Summary 1 8 19 20 31 31 33 36 37 59 60 60 60 60 64 64 64 64 64 65 65 [This page intentionally left blank] SUN COMMUNITIES, INC. PART I ITEM 1. BUSINESS GENERAL Sun Communities, Inc., a Maryland corporation, and all wholly-owned or majority-owned and controlled subsidiaries, including Sun Communities Operating Limited Partnership, a Michigan limited partnership (the “Operating Partnership”) and Sun Home Services, Inc., a Michigan corporation (“SHS”) are referred to herein as the “Company,” “us,” “we,” and “our”. We are a self- administered and self-managed real estate investment trust (“REIT”). We are a fully integrated real estate company which, together with our affiliates and predecessors, have been in the business of acquiring, operating, developing, and expanding manufactured housing (“MH”) and recreational vehicle (“RV”) communities since 1975. We lease individual parcels of land (“sites”) with utility access for placement of manufactured homes and RVs to our customers. We are also engaged through a taxable subsidiary, SHS, in the marketing, selling, and leasing of new and pre-owned homes to current and future residents in our communities. The operations of SHS support and enhance our occupancy levels, property performance and cash flows. We own, operate, or have an interest in a portfolio of MH and RV communities. As of December 31, 2017, we owned, operated or had an interest in a portfolio of 350 properties in 29 states and Ontario, Canada (collectively, the “Properties”), including 230 MH communities, 89 RV communities, and 31 Properties containing both MH and RV sites. As of December 31, 2017, the Properties contained an aggregate of 121,892 developed sites comprised of 83,294 developed MH sites, 22,742 annual RV sites (inclusive of both annual and seasonal usage rights), and 15,856 transient RV sites. There are approximately 9,600 additional MH and RV sites suitable for development. Our executive and principal property management office is located at 27777 Franklin Road, Suite 200, Southfield, Michigan 48034 and our telephone number is (248) 208-2500. We have regional property management offices located in Austin, Texas; Grand Rapids, Michigan; Denver, Colorado; Ft. Myers, Florida; and Orlando, Florida; and we employed an aggregate of 2,727 full and part time employees as of December 31, 2017. Our website address is www.suncommunities.com and we make available, free of charge, on or through our website all of our periodic reports, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and current reports on Form 8- K, as soon as reasonably practicable after we file such reports with the Securities and Exchange Commission (the “SEC”). STRUCTURE OF THE COMPANY The Operating Partnership is structured as an umbrella partnership REIT, or UPREIT. In 1993, we contributed our net assets to the Operating Partnership in exchange for the sole general partner interest in the Operating Partnership and the majority of all the Operating Partnership’s initial capital. We conduct substantially all of our operations through the Operating Partnership. The Operating Partnership owns, either directly or indirectly through other subsidiaries, all of our assets. This UPREIT structure enables us to comply with certain complex requirements under the federal tax rules and regulations applicable to REITs, and to acquire MH and RV communities in transactions that defer some or all of the sellers’ tax consequences. The financial results of the Operating Partnership and our other subsidiaries are consolidated in our Consolidated Financial Statements. The financial results include certain activities that do not necessarily qualify as REIT activities under the Internal Revenue Code of 1986, as amended (the “Code”). We have formed taxable REIT subsidiaries, as defined in the Code, to engage in such activities. We use taxable REIT subsidiaries to offer certain services to our residents and engage in activities that would not otherwise be permitted under the REIT rules if provided directly by us or by the Operating Partnership. The taxable REIT subsidiaries include our home sales business, SHS, which provides manufactured home sales, leasing, and other services to current and prospective tenants of the Properties. Under the partnership agreement, the Operating Partnership is structured to make distributions with respect to certain of the Operating Partnership units (“OP units”) at the same time that distributions are made to our common stockholders. The Operating Partnership is structured to permit limited partners holding certain classes or series of OP units to exchange those OP units for shares of our common stock (in a taxable transaction) and achieve liquidity for their investment. As the sole general partner of the Operating Partnership, we generally have the power to manage and have complete control over the conduct of the Operating Partnership’s affairs and all decisions or actions made or taken by us as the general partner pursuant to the partnership agreement are generally binding upon all of the partners and the Operating Partnership. 1 SUN COMMUNITIES, INC. We do not own all of the OP units. As of December 31, 2017, the Operating Partnership had issued and outstanding: • • • • • • • 82,425,282 common OP units; 1,283,819 preferred OP units (“Aspen preferred OP units”); 345,371 Series A-1 preferred OP units; 40,268 Series A-3 preferred OP units; 1,509,494 Series A-4 preferred OP units; 67,801 Series B-3 preferred OP units; and 316,357 Series C preferred OP units. As of December 31, 2017, we held: • • • 79,679,163 common OP units, or approximately 97 percent of the issued and outstanding common OP units; 1,085,365 Series A-4 preferred OP units, or approximately 72 percent of the issued and outstanding Series A-4 preferred OP units; and no Aspen preferred OP units, Series A-1 preferred OP units, Series A-3 preferred OP units, Series B-3 preferred OP units, or Series C preferred OP units. Ranking and Priority The various classes and series of OP units issued by the Operating Partnership rank as follows with respect to rights to the payment of distributions and the distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Operating Partnership: • • • • • first, the Series A-4 preferred OP units, Aspen preferred OP units and Series A-1 preferred OP units, on parity with each other; next, the Series C preferred OP units; next, the Series B-3 preferred OP units; next, the Series A-3 preferred OP units; and finally, the common OP units. Common OP Units Subject to certain limitations, the holder of each common OP unit at its option may convert such common OP unit at any time into one share of our common stock. Holders of common OP units are entitled to receive distributions from the Operating Partnership as and when declared by the general partner, provided that all accrued distributions payable on OP units ranking senior to the common OP units have been paid. The holders of common OP units generally receive distributions on the same dates and in amounts equal to the distributions paid to holders of our common stock. Aspen Preferred OP Units Subject to certain limitations, at any time prior to January 1, 2024, the holder of each Aspen preferred OP unit at its option may convert such Aspen preferred OP unit into: (a) if the average closing price of our common stock for the preceding ten trading days is $68.00 per share or less, 0.397 common OP units, or (b) if the average closing price of our common stock for the preceding ten trading days is greater than $68.00 per share, the number of common OP units determined by dividing (i) the sum of (A) $27.00 plus (B) 25 percent of the amount by which the average closing price of our common stock for the preceding ten trading days exceeds $68.00 per share, by (ii) the average closing price of our common stock for the preceding ten trading days. The holders of Aspen preferred OP units are entitled to receive distributions not less than quarterly. Distributions on Aspen preferred OP units are generally paid on the same dates as distributions are paid to holders of common OP units. Each Aspen preferred OP unit is entitled to receive distributions in an amount equal to the product of (x) $27.00, multiplied by (y) an annual rate equal to the 10- year U.S. Treasury bond yield plus 239 basis points; provided, however, that the aggregate distribution rate shall not be less than 6.5 percent nor more than 9 percent. On January 2, 2024, we are required to redeem all Aspen preferred OP units that have not been converted to common OP units. In addition, we are required to redeem the Aspen preferred OP units of any holder thereof within five days after receipt of a written demand during the existence of certain uncured Aspen preferred OP unit defaults, including our failure to pay distributions on the Aspen preferred OP units when due and our failure to provide certain security for the payment of distributions on the Aspen preferred OP units. We may also redeem Aspen preferred OP units from time to time if we and the holder thereof agree to do so. 2 SUN COMMUNITIES, INC. Series A-1 Preferred OP Units Subject to certain limitations, the holder of each Series A-1 preferred OP unit at its option may exchange such Series A-1 preferred OP unit at any time into approximately 2.4390 shares of our common stock (which exchange rate is subject to adjustment upon stock splits, recapitalizations, and similar events). The holders of Series A-1 preferred OP units are entitled to receive distributions not less than quarterly. Distributions on Series A-1 preferred OP units are generally paid on the last day of each quarter. Each Series A-1 preferred OP unit is entitled to receive distributions in an amount equal to the product of $100.00 multiplied by an annual rate equal to 6.0 percent. Series A-1 preferred OP units do not have any voting or consent rights on any matter requiring the consent or approval of the Operating Partnership’s limited partners. Series A-3 Preferred OP Units Subject to certain limitations, the holder of each Series A-3 preferred OP unit at its option may exchange such Series A-3 preferred OP unit at any time into approximately 1.8605 shares of our common stock (which exchange rate is subject to adjustment upon stock splits, recapitalizations, and similar events). The holders of Series A-3 preferred OP units are entitled to receive distributions not less than quarterly. Each Series A-3 preferred OP unit is entitled to receive distributions in an amount equal to the product of $100.00 multiplied by an annual rate equal to 4.5 percent. Series A-3 preferred OP units do not have any voting or consent rights on any matter requiring the consent or approval of the Operating Partnership’s limited partners. Series A-4 Preferred OP Units In connection with the issuance of our 6.5% Series A-4 Cumulative Convertible Preferred Stock (the “Series A-4 preferred stock”) in November 2014, the Operating Partnership created the Series A-4 preferred OP units as a new class of OP units. Series A-4 preferred OP units have economic and other rights and preferences substantially similar to those of the Series A-4 preferred stock, including rights to receive distributions at the same time and in the same amounts as distributions paid on Series A-4 preferred stock. Each Series A-4 preferred OP unit is exchangeable into approximately 0.4444 shares of common stock or common OP units (which exchange rate is subject to adjustment upon stock splits, recapitalizations, and similar events). The Operating Partnership issued Series A-4 preferred OP units to us in connection with our acquisition of a portfolio of MH communities from Green Courte Real Estate Partners, LLC and certain of their affiliated entities (collectively, the “Green Courte parties” or the “Green Courte entities”). In July 2015 and June 2017, we repurchased 4,066,586 and 438,448 Series A-4 preferred OP units, respectively. At December 31, 2017, we held 1,085,365 Series A-4 preferred OP units. The rights of the Series A-4 preferred OP units held by us mirror the economic rights of the Series A-4 preferred OP units issued to the Green Courte entities, but certain voting, consent, and other rights do not apply to the Series A-4 preferred OP units held by us. If certain change of control transactions occur or if our common stock ceases to be listed or quoted on an exchange or quotation system, then at any time after November 26, 2019, we or the holders of shares of Series A-4 preferred stock and Series A-4 preferred OP units may cause all or any of those shares or units to be redeemed for cash at a redemption price equal to the sum of (i) the greater of (x) the amount that the redeemed shares of Series A-4 preferred stock and Series A-4 preferred OP units would have received in such transaction if they had been converted into shares of our common stock immediately prior to such transaction, or (y) $25.00 per share, plus (ii) any accrued and unpaid distributions thereon to, but not including, the redemption date. Series B-3 Preferred OP Units Series B-3 preferred OP units are not convertible. The holders of Series B-3 preferred OP units generally receive distributions on the last day of each quarter. Each Series B-3 preferred OP unit is entitled to receive distributions in an amount equal to the product of $100.00 multiplied by an annual rate equal to 8.0 percent. Subject to certain limitations, (x) during the 90-day period beginning on each of the tenth through fifteenth anniversaries of the issue date of the applicable Series B-3 preferred OP units, (y) at any time after the fifteenth anniversary of the issue date of the applicable Series B-3 preferred OP units, or (z) after our receipt of notice of the death of the electing holder of a Series B-3 preferred OP unit, each holder of Series B-3 preferred OP units may require us to redeem such holder’s Series B-3 preferred OP units at the redemption price of $100.00 per unit. In addition, at any time after the fifteenth anniversary of the issue date of the applicable Series B-3 preferred OP units we may redeem, at our option, all of the Series B-3 preferred OP units of any holder thereof at the redemption price of $100.00 per unit. Series B-3 preferred OP units do not have any voting or consent rights on any matter requiring the consent or approval of the Operating Partnership’s limited partners. 3 SUN COMMUNITIES, INC. During the three months ended December 31, 2017, we redeemed a total of 44,599 B-3 preferred OP units. At December 31, 2017, there were outstanding 10,800 Series B-3 preferred OP units which were issued on December 1, 2002, 24,751 Series B-3 preferred OP units which were issued on January 1, 2003, and 32,250 Series B-3 preferred OP units which were issued on January 5, 2004. Series C Preferred OP Units Subject to certain limitations, the holder of each Series C preferred OP unit at its option may exchange such Series C preferred OP unit at any time into 1.11 shares of our common stock (which exchange rate is subject to adjustment upon stock splits, recapitalizations, and similar events). The holders of Series C preferred OP units are entitled to receive distributions not less than quarterly. Each Series C preferred OP unit is entitled to receive distributions in an amount equal to the product of $100.00 multiplied by an annual rate equal to (i) 4.5 percent until April 1, 2020, and (ii) 5.0 percent after April 2, 2020. Series C preferred OP units do not have any voting or consent rights on any matter requiring the consent or approval of the Operating Partnership’s limited partners. REAL PROPERTY OPERATIONS Properties are designed and improved for several home options of various sizes and designs that consist of both MH communities and RV communities. An MH community is a residential subdivision designed and improved with sites for the placement of manufactured homes, related improvements, and amenities. Manufactured homes are detached, single family homes which are produced off site by manufacturers and installed on sites within the community. Manufactured homes are available in a wide array of designs, providing owners with a level of customization generally unavailable in other forms of multi-family housing developments. Modern manufactured housing communities contain improvements similar to other garden style residential developments, including centralized entrances, paved streets, curbs, gutters, and parkways. In addition, these communities also often provide a number of amenities, such as a clubhouse, a swimming pool, shuffleboard courts, tennis courts, and laundry facilities. An RV community is a resort or park designed and improved with sites for the placement of RVs for varied lengths of time. Properties may also provide vacation rental homes. RV communities include a number of amenities such as restaurants, golf courses, swimming pools, tennis courts, fitness centers, planned activities, and spacious social facilities. The owner of each home on our Properties leases the site on which the home is located. We typically own the underlying land, utility connections, streets, lighting, driveways, common area amenities, and other capital improvements and are responsible for enforcement of community guidelines and maintenance. In five of our 350 communities, we do not own all of the underlying land and operate the communities pursuant to ground leases. Certain of the Properties provide water and sewer service through public or private utilities, while others provide these services to residents from on-site facilities. Each owner of a home within our Properties is responsible for the maintenance of the home and leased site. As a result, our capital expenditure needs tend to be less significant relative to multi-family rental apartment complexes. 4 SUN COMMUNITIES, INC. PROPERTY MANAGEMENT Our property management strategy emphasizes intensive, hands-on management by dedicated, on-site district and community managers. We believe that this on-site focus enables us to continually monitor and address resident concerns, the performance of competitive properties, and local market conditions. As of December 31, 2017, we employed 2,727 full and part time employees, of which 2,348 were located on-site as property managers, support staff, or maintenance personnel. Our community managers are overseen by John B. McLaren, our President and Chief Operating Officer, who has been in the manufactured housing industry since 1995, three Senior Vice Presidents of Operations and Sales, eight Divisional Vice Presidents and 35 Regional Vice Presidents. Each Regional Vice President is responsible for semi-annual market surveys of competitive communities, interaction with local manufactured home dealers, regular property inspections, and oversight of property operations and sales functions for seven to 14 properties. Each district or community manager performs regular inspections in order to continually monitor the Property’s physical condition and to effectively address tenant concerns. In addition to a district or community manager, each district or property has on-site maintenance personnel and management support staff. We hold mandatory training sessions for all new property management personnel to ensure that management policies and procedures are executed effectively and professionally. All of our property management personnel participate in on-going training to ensure that changes to management policies and procedures are implemented consistently. We offer over 300 trainings including books, online courses, webinars and live sessions for our team members through our Sun University, which has led to increased knowledge and accountability for daily operations and policies and procedures. HOME SALES AND RENTALS SHS is engaged in the marketing, selling and leasing of new and pre-owned homes to current and future residents in our communities. Because tenants often purchase a home already on-site within a community, such services enhance occupancy and property performance. Additionally, because many of the homes on the Properties are sold through SHS, better control of home quality in our communities can be maintained than if sales services were conducted solely through third-party brokers. SHS also leases homes to prospective tenants. At December 31, 2017, SHS had 11,074 occupied leased homes in its portfolio. New and pre-owned homes are purchased for the Rental Program. Leases associated with the Rental Program generally have a term of one year. The Rental Program requires intensive management of costs associated with repair and refurbishment of these homes as the tenants vacate and the homes are re-leased, similar to apartment rentals. We received approximately 49,000 applications during 2017 to live in our Properties, providing a significant “resident boarding” system allowing us to market purchasing a home to the best applicants and to rent to the remainder of approved applicants. Through the Rental Program we are able to demonstrate our product and lifestyle to the renters, while monitoring their payment history and converting qualified renters to owners. REGULATIONS AND INSURANCE General MH and RV community properties are subject to various laws, ordinances and regulations, including regulations relating to recreational facilities such as swimming pools, clubhouses, and other common areas. We believe that each Property has the necessary operating permits and approvals. Insurance Our management believes that the Properties are covered by adequate fire, property, business interruption, general liability, and (where appropriate) flood and earthquake insurance provided by reputable companies with commercially reasonable deductibles and limits. We maintain a blanket policy that covers all of our Properties. We have obtained title insurance insuring fee title to the Properties in an aggregate amount which we believe to be adequate. Claims made to our insurance carriers that are determined to be recoverable are classified in other receivables as incurred. 5 SUN COMMUNITIES, INC. SITE LEASES OR USAGE RIGHTS Typical tenant leases for MH sites are month-to-month or year-to-year, renewable upon the consent of both parties, or, in some instances, as provided by statute. Certain of our leases, mainly at our Florida and California properties, are tied to the consumer price index or other indices as they relate to rent increases. Generally, market rate adjustments are made on an annual basis. These leases are cancelable for non-payment of rent, violation of community rules and regulations or other specified defaults. During the five calendar years ended December 31, 2017, on average 2.2 percent of the homes in our communities have been removed by their owners and 5.6 percent of the homes have been sold by their owners to a new owner who then assumes rental obligations as a community resident. The average cost to move a home is approximately $4,000 to $10,000. The average resident remains in our communities for approximately 15 years, while the average home, which gives rise to the rental stream, remains in our communities for over 40 years. Please see the Risk Factors in Item 1A, and our accompanying Consolidated Financial Statements and related notes thereto beginning on page F-1 of this Annual Report on Form 10-K for more detailed information. 6 SUN COMMUNITIES, INC. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains various “forward-looking statements” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we intend that such forward-looking statements will be subject to the safe harbors created thereby. For this purpose, any statements contained in this filing that relate to expectations, beliefs, projections, future plans and strategies, trends or prospective events or developments and similar expressions concerning matters that are not historical facts are deemed to be forward-looking statements. Words such as “forecasts,” “intends,” “intend,” “intended,” “goal,” “estimate,” “estimates,” “expects,” “expect,” “expected,” “project,” “projected,” “projections,” “plans,” “predicts,” “potential,” “seeks,” “anticipates,” “anticipated,” “should,” “could,” “may,” “will,” “designed to,” “foreseeable future,” “believe,” “believes,” “scheduled,” “guidance” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these words. These forward- looking statements reflect our current views with respect to future events and financial performance, but involve known and unknown risks and uncertainties, both general and specific to the matters discussed in this filing. These risks and uncertainties may cause our actual results to be materially different from any future results expressed or implied by such forward-looking statements. In addition to the risks disclosed under “Risk Factors” contained in this Annual Report on Form 10-K and our other filings with the SEC, such risks and uncertainties include but are not limited to: • • • • • • • • • • • • • • • • • • • changes in general economic conditions, the real estate industry, and the markets in which we operate; difficulties in our ability to evaluate, finance, complete and integrate acquisitions, developments and expansions successfully; our liquidity and refinancing demands; our ability to obtain or refinance maturing debt; our ability to maintain compliance with covenants contained in our debt facilities; availability of capital; changes in foreign currency exchange rates, specifically between the U.S. dollar and Canadian dollar; our ability to maintain rental rates and occupancy levels; our failure to maintain effective internal control over financial reporting and disclosure controls and procedures; increases in interest rates and operating costs, including insurance premiums and real property taxes; risks related to natural disasters such as hurricanes, earthquakes, floods and wildfires; general volatility of the capital markets and the market price of shares of our capital stock; our failure to maintain our status as a REIT; changes in real estate and zoning laws and regulations; legislative or regulatory changes, including changes to laws governing the taxation of REITs; litigation, judgments or settlements; competitive market forces; the ability of manufactured home buyers to obtain financing; and the level of repossessions by manufactured home lenders. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made. We undertake no obligation to publicly update or revise any forward-looking statements included or incorporated by reference into this filing, whether as a result of new information, future events, changes in our expectations or otherwise, except as required by law. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. All written and oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by these cautionary statements. 7 SUN COMMUNITIES, INC. ITEM 1A. RISK FACTORS Our prospects are subject to certain uncertainties and risks. Our future results could differ materially from current results, and our actual results could differ materially from those projected in forward-looking statements as a result of certain risk factors. These risk factors include, but are not limited to, those set forth below, other one-time events, and important factors disclosed previously and from time to time in our other filings with the SEC. REAL ESTATE RISKS General economic conditions and the concentration of our properties in Florida, Michigan, Texas, and California may affect our ability to generate sufficient revenue. The market and economic conditions in our current markets generally, and specifically in metropolitan areas of our current markets, may significantly affect manufactured home occupancy or rental rates. Occupancy and rental rates, in turn, may significantly affect our revenues, and if our communities do not generate revenues sufficient to meet our operating expenses, including debt service and capital expenditures, our cash flow and ability to pay or refinance our debt obligations could be adversely affected. We derive significant amounts of our rental income from properties located in Florida, Michigan, Texas, and California. As of December 31, 2017, 123 properties, representing approximately 35.5 percent of developed sites, are located in Florida; 68 properties, representing approximately 21.4 percent of developed sites, are located in Michigan; 21 properties, representing approximately 6.5 percent of developed sites, are located in Texas; and 27 properties, representing approximately 5.3 percent of developed sites, are located in California. As a result of the geographic concentration of our Properties in Florida, Michigan, Texas, and California, we are exposed to the risks of downturns in the local economy or other local real estate market conditions which could adversely affect occupancy rates, rental rates, and property values of properties in these markets. Our income would also be adversely affected if tenants were unable to pay rent or if sites were unable to be rented on favorable terms. If we were unable to promptly relet or renew the leases for a significant number of the sites, or if the rental rates upon such renewal or reletting were significantly lower than expected rates, then our business and results of operations could be adversely affected. In addition, certain expenditures associated with each Property (such as real estate taxes and maintenance costs) generally are not reduced when circumstances cause a reduction in income from the Property. Furthermore, real estate investments are relatively illiquid and, therefore, will tend to limit our ability to vary our portfolio promptly in response to changes in economic or other conditions. The following factors, among others, may adversely affect the revenues generated by our communities: • • • • • • • • • the national and local economic climate which may be adversely impacted by, among other factors, plant closings, and industry slowdowns; local real estate market conditions such as the oversupply of MH and RV sites or a reduction in demand for MH and RV sites in an area; changes in foreign currency exchange rates, specifically between the U.S. dollar and Canadian dollar; the number of repossessed homes in a particular market; the lack of an established dealer network; the rental market which may limit the extent to which rents may be increased to meet increased expenses without decreasing occupancy rates; the perceptions by prospective tenants of the safety, convenience and attractiveness of our Properties and the neighborhoods where they are located; zoning or other regulatory restrictions; competition from other available MH and RV communities and alternative forms of housing (such as apartment buildings and site-built single-family homes); 8 SUN COMMUNITIES, INC. • • • our ability to effectively manage, maintain and insure the Properties; increased operating costs, including insurance premiums, real estate taxes, and utilities; and the enactment of rent control laws or laws taxing the owners of manufactured homes. Competition affects occupancy levels and rents which could adversely affect our revenues. Our Properties are located in developed areas that include other MH and RV community properties. The number of competitive MH and RV community properties in a particular area could have a material adverse effect on our ability to lease sites and increase rents charged at our Properties or at any newly acquired properties. We may be competing with others with greater resources and whose officers and directors have more experience than our officers and directors. In addition, other forms of multi family residential properties, such as private and federally funded or assisted multi-family housing projects and single family housing, provide housing alternatives to potential tenants of MH and RV communities. Our ability to sell or lease manufactured homes may be affected by various factors, which may in turn adversely affect our profitability. SHS operates in the manufactured home market offering manufactured home sales and leasing services to tenants and prospective tenants of our communities. The market for the sale and lease of manufactured homes may be adversely affected by the following factors: • • • • downturns in economic conditions which adversely impact the housing market; an oversupply of, or a reduced demand for, manufactured homes; the difficulty facing potential purchasers in obtaining affordable financing as a result of heightened lending criteria; and an increase or decrease in the rate of manufactured home repossessions which provide aggressively priced competition to new manufactured home sales. Any of the above listed factors could adversely impact our rate of manufactured home sales and leases, which would result in a decrease in profitability. The cyclical and seasonal nature of the MH and the RV industries may lead to fluctuations in our operating results. The MH and RV markets can experience cycles of growth and downturn due to seasonality patterns. In the MH market, certain properties maintain higher occupancy during the summer months, while certain other properties maintain higher occupancy during the winter months. The RV market typically shows a decline in demand over the winter months, yet usually produces higher growth in the spring and summer months due to higher use by vacationers. Our results on a quarterly basis can fluctuate due to this cyclicality and seasonality. We may not be able to integrate or finance our acquisitions and our acquisitions may not perform as expected. We have acquired and intend to continue to acquire MH and RV properties on a select basis. Our acquisition activities and their success are subject to the following risks: • we may be unable to acquire a desired property because of competition from other well-capitalized real estate investors, including both publicly traded REITs and institutional investment funds; • • even if we enter into an acquisition agreement for a property, it is usually subject to customary conditions to closing, including completion of due diligence investigations to our satisfaction, which may not be satisfied; even if we are able to acquire a desired property, competition from other real estate investors may significantly increase the purchase price; • we may be unable to finance acquisitions on favorable terms; 9 SUN COMMUNITIES, INC. • • acquired properties may fail to perform as expected; acquired properties may be located in new markets where we face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area, and unfamiliarity with local governmental and permitting procedures; and • we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations. If any of the above risks occurred, our business and results of operations could be adversely affected. In addition, we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were to be asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle it, which could adversely affect our cash flow. Increases in taxes and regulatory compliance costs may reduce our results of operations. Costs resulting from changes in real estate laws, income taxes, service or other taxes, generally are not passed through to tenants under leases and may adversely affect our results of operations and financial condition. Similarly, changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions may result in significant unanticipated expenditures, which would adversely affect our business and results of operations. We may not be able to integrate or finance our expansion and development activities. From time to time, we engage in the construction and development of new communities or expansion of existing communities, and may continue to engage in the development and construction business in the future. Our construction and development pipeline may be exposed to the following risks which are in addition to those risks associated with the ownership and operation of established MH and RV communities: • we may not be able to obtain financing with favorable terms for community development which may make us unable to proceed with the development; • we may be unable to obtain, or face delays in obtaining, necessary zoning, building and other governmental permits and authorizations, which could result in increased costs and delays, and even require us to abandon development of the community entirely if we are unable to obtain such permits or authorizations; • we may abandon development opportunities that we have already begun to explore and as a result we may not recover expenses already incurred in connection with exploring such development opportunities; • we may be unable to complete construction and lease up of a community on schedule resulting in increased debt service expense and construction costs; • we may incur construction and development costs for a community which exceed our original estimates due to increased materials, labor or other costs, which could make completion of the community uneconomical and we may not be able to increase rents to compensate for the increase in development costs which may impact our profitability; • we may be unable to secure long term financing on completion of development resulting in increased debt service and lower profitability; and • occupancy rates and rents at a newly developed community may fluctuate depending on several factors, including market and economic conditions, which may result in the community not being profitable. If any of the above risks occurred, our business and results of operations could be adversely affected. 10 SUN COMMUNITIES, INC. Rent control legislation may harm our ability to increase rents. State and local rent control laws in certain jurisdictions may limit our ability to increase rents and to recover increases in operating expenses and the costs of capital improvements. Enactment of such laws has been considered from time to time in other jurisdictions. Certain Properties are located, and we may purchase additional properties, in markets that are either subject to rent control or in which rent-limiting legislation exists or may be enacted. Legislative requirements can limit accessibility of affordable financing for potential manufactured home buyers. Recent legislation impacting third party loan originators, consumer protection laws and lender requirements to investigate a borrower's creditworthiness may restrict access of affordable chattel financing to potential manufactured home buyers. We may be subject to environmental liability. Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate is liable for the costs of removal or remediation of certain hazardous substances at, on, under or in such property. Such laws often impose liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous substances. The presence of such substances, or the failure to properly remediate such substances, may adversely affect the owner’s ability to sell or rent the property, to borrow using the property as collateral or to develop the property. Persons who arrange for the disposal or treatment of hazardous substances also may be liable for the costs of removal or remediation of such substances at a disposal or treatment facility owned or operated by another person. In addition, certain environmental laws impose liability for the management and disposal of asbestos containing materials and for the release of such materials into the air. These laws may provide for third parties to seek recovery from owners or operators of real properties for personal injury associated with asbestos containing materials. In connection with the ownership, operation, management, and development of real properties, we may be considered an owner or operator of such properties and, therefore, are potentially liable for removal or remediation costs, and also may be liable for governmental fines and injuries to persons and property. When we arrange for the treatment or disposal of hazardous substances at landfills or other facilities owned by other persons, we may be liable for the removal or remediation costs at such facilities. All of the Properties have been subject to a Phase I or similar environmental audit (which involves general inspections without soil sampling or ground water analysis) completed by independent environmental consultants. These environmental audits have not revealed any significant environmental liability that would have a material adverse effect on our business. These audits cannot reflect conditions arising after the studies were completed, and no assurances can be given that existing environmental studies reveal all environmental liabilities, that any prior owner or operator of a property or neighboring owner or operator did not create any material environmental condition not known to us, or that a material environmental condition does not otherwise exist as to any one or more Properties. Losses in excess of our insurance coverage or uninsured losses could adversely affect our operating results and cash flow. We have a significant concentration of properties in Florida and California, where natural disasters or other catastrophic events such as hurricanes or earthquakes could negatively impact our operating results and cash flows. We maintain comprehensive liability, fire, property, business interruption, general liability, and (where appropriate) flood and earthquake insurance, provided by reputable companies with commercially reasonable deductibles and limits. Certain types of losses including, but not limited to, riots or acts of war, may be either uninsurable or not economically insurable. In the event an uninsured loss occurs, we could lose both our investment in and anticipated profits and cash flow from the affected property. Any loss could adversely affect our ability to repay our debt. FINANCING AND INVESTMENT RISKS Our significant amount of debt could limit our operational flexibility or otherwise adversely affect our financial condition. We have a significant amount of debt. As of December 31, 2017, we had approximately $3.1 billion of total debt outstanding, consisting of approximately $2.9 billion in debt that is collateralized by mortgage liens on 190 of the Properties, $129.2 million that is secured by collateralized receivables, $41.3 million on our lines of credit, and $41.4 million that is unsecured debt. If we fail to meet our obligations under our secured debt, the lenders would be entitled to foreclose on all or some of the collateral securing such debt which could have a material adverse effect on us and our ability to make expected distributions, and could threaten our continued viability. 11 SUN COMMUNITIES, INC. We are subject to the risks normally associated with debt financing, including the following risks: • • • our cash flow may be insufficient to meet required payments of principal and interest, or require us to dedicate a substantial portion of our cash flow to pay our debt and the interest associated with our debt rather than to other areas of our business; our existing indebtedness may limit our operating flexibility due to financial and other restrictive covenants, including restrictions on incurring additional debt; it may be more difficult for us to obtain additional financing in the future for our operations, working capital requirements, capital expenditures, debt service or other general requirements; • we may be more vulnerable in the event of adverse economic and industry conditions or a downturn in our business; • we may be placed at a competitive disadvantage compared to our competitors that have less debt; and • we may not be able to refinance at all or on favorable terms, as our debt matures. If any of the above risks occurred, our financial condition and results of operations could be materially adversely affected. We may incur substantially more debt, which would increase the risks associated with our substantial leverage. Despite our current indebtedness levels, we may incur substantially more debt in the future. If new debt is added to our current debt levels, an even greater portion of our cash flow will be needed to satisfy our debt service obligations. As a result, the related risks that we now face could intensify and increase the risk of a default on our indebtedness. TAX RISKS We may suffer adverse tax consequences and be unable to attract capital if we fail to qualify as a REIT. We believe that since our taxable year ended December 31, 1994, we have been organized and operated, and intend to continue to operate, so as to qualify for taxation as a REIT under the Code. Although we believe that we have been and will continue to be organized and have operated and will continue to operate so as to qualify for taxation as a REIT, we cannot be assured that we have been or will continue to be organized or operated in a manner to so qualify or remain so qualified. Qualification as a REIT involves the satisfaction of numerous requirements (some on an annual and quarterly basis) established under highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations, and involves the determination of various factual matters and circumstances not entirely within our control. In addition, frequent changes occur in the area of REIT taxation, which require us to continually monitor our tax status. If we fail to qualify as a REIT in any taxable year, our taxable income could be subject to U.S. federal income tax at regular corporate rates (including any applicable alternative minimum tax). Moreover, unless entitled to relief under certain statutory provisions, we also would be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost. This treatment would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability to us for the years involved. In addition, distributions to stockholders would no longer be required to be made. Federal, state and foreign income tax laws governing REITs and related interpretations may change at any time, and any such legislative or other actions affecting REITs could have a negative effect on us. Federal, state and foreign income tax laws governing REITs or the administrative interpretations of those laws may be amended at any time. Federal, state, and foreign tax laws are under constant review by persons involved in the legislative process, at the Internal Revenue Service and the U.S. Department of the Treasury, and at various state and foreign tax authorities. Changes to tax laws, regulations, or administrative interpretations, which may be applied retroactively, could adversely affect us. We cannot predict whether, when, in what forms, or with what effective dates, the tax laws, regulations, and administrative interpretations applicable to us may be changed. Accordingly, we cannot assert that any such change will not significantly affect either our ability to qualify for taxation as a REIT or the income tax consequences to us. In particular, new U.S. federal tax legislation enacted into law on December 22, 2017 informally titled the Tax Cut and Jobs Act (the “Tax Act”) has made many major changes to the taxation of individuals and businesses. There are a significant number of 12 SUN COMMUNITIES, INC. technical issues and uncertainties with respect to the interpretation and application of the Tax Act, which may or may not be clarified by future guidance. It is not possible to predict whether such clarifications will result in adverse consequences to the Company or its stockholders. Stockholders are urged to consult their tax advisors with respect to the effects of the Tax Act and to monitor future guidance issued with respect to the Tax Act and any other potential amendments to relevant tax laws. We intend for the Operating Partnership to be taxed as a partnership, but we cannot guarantee that it will qualify. We believe that the Operating Partnership has been organized as a partnership and will qualify for treatment as such under the Code. However, if the Operating Partnership is deemed to be a “publicly traded partnership,” it will be treated as a corporation instead of a partnership for federal income tax purposes unless at least 90 percent of its income is qualifying income as defined in the Code. The income requirements applicable to REITs and the definition of “qualifying income” for purposes of this 90 percent test are similar in most respects. Qualifying income for the 90 percent test generally includes passive income, such as specified types of real property rents, dividends, and interest. We believe that the Operating Partnership has and will continue to meet this 90 percent test, but we cannot guarantee that it has or will. If the Operating Partnership were to be taxed as a regular corporation, it would incur substantial tax liabilities, we would fail to qualify as a REIT for federal income tax purposes, and our ability to raise additional capital could be significantly impaired. Our ability to accumulate cash may be restricted due to certain REIT distribution requirements. In order to qualify as a REIT, we must distribute to our stockholders at least 90 percent of our REIT taxable income (calculated without any deduction for dividends paid and excluding net capital gain) and to avoid federal income taxation, our distributions must not be less than 100 percent of our REIT taxable income, including capital gains. As a result of the distribution requirements, we do not expect to accumulate significant amounts of cash. Accordingly, these distributions could significantly reduce the cash available to us in subsequent periods to fund our operations and future growth. Our taxable REIT subsidiaries, or TRSs, are subject to special rules that may result in increased taxes. As a REIT, we must pay a 100 percent penalty tax on certain payments that we receive if the economic arrangements between us and any of our TRSs are not comparable to similar arrangements between unrelated parties. The Internal Revenue Service may successfully assert that the economic arrangements of any of our inter-company transactions are not comparable to similar arrangements between unrelated parties. Dividends payable by REITs do not qualify for the reduced tax rates applicable to certain dividends. The maximum federal tax rate for certain qualified dividends payable to domestic stockholders that are individuals, trusts and estates is 20 percent. Dividends payable by REITs, however, are generally not eligible for this reduced rate. Although this rule does not adversely affect the taxation of REITs or dividends paid by REITs, the more favorable rates applicable to regular qualified corporate dividends could cause investors who are individuals, trusts and estates to perceive investments in REITs to be relatively less competitive than investments in stock of non-REIT corporations that pay dividends, which could adversely affect the comparative value of the stock of REITs, including our common stock and preferred stock. Under the Tax Cuts and Jobs Act, REIT dividends (other than capital gain dividends and qualified dividends) received by non- corporate taxpayers may be eligible for a 20 percent deduction. Prospective investors should consult their own tax advisors regarding the effect of this change on their effective tax rate with respect to REIT dividends. Complying with REIT requirements may cause us to forego otherwise attractive opportunities. To remain qualified as a REIT for federal income tax purposes, we must continually satisfy requirements and tests under the tax law concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of our stock. In order to meet these tests, we may be required to forego or limit attractive business or investment opportunities and distribute all of our net earnings rather than invest in attractive opportunities or hold larger liquid reserves. Therefore, compliance with the REIT requirements may hinder our ability to operate solely to maximize profits. Our ability to use net operating loss carryforwards to reduce future tax payments may be limited if we experience a change in ownership, or if taxable income does not reach sufficient levels. 13 SUN COMMUNITIES, INC. Under Section 382 of the Code, if a corporation undergoes an “ownership change” (generally defined as a greater than 50 percent change (by value) in its equity ownership over a rolling three-year period), the corporation’s ability to use its pre-ownership-change net operating loss carryforwards to offset its post-ownership-change income may be limited. We may experience ownership changes in the future. If an ownership change were to occur, we would be limited in the portion of net operating loss carryforwards that we could use in the future to offset taxable income for U.S. federal income tax purposes. BUSINESS RISKS Some of our directors and officers may have conflicts of interest with respect to certain related party transactions and other business interests. Lease of Executive Offices. Gary A. Shiffman, together with certain of his family members, indirectly owns an equity interest of approximately 28.0 percent in American Center LLC, the entity from which we lease office space for our principal executive offices. Each of Brian M. Hermelin, Ronald A. Klein and Arthur A. Weiss indirectly owns a less than one percent interest in American Center LLC. Mr. Shiffman is our Chief Executive Officer and Chairman of the Board. Each of Mr. Hermelin, Mr. Klein and Mr. Weiss is a director of the Company. Under the lease agreement, we lease approximately 71,500 rentable square feet of permanent space, and approximately 21,000 rentable square feet of temporary space. The initial term of the lease is until October 31, 2026, and the base rent is $17.95 per square foot (gross) until October 31, 2018, for both permanent and temporary space, with graduated rental increases thereafter. Each of Mr. Shiffman, Mr. Hermelin, Mr. Klein and Mr. Weiss may have a conflict of interest with respect to his obligations as our officer and/or director, as applicable, and their ownership interests in American Center LLC. Legal Counsel. During 2017, Jaffe, Raitt, Heuer, & Weiss, Professional Corporation acted as our general counsel and represented us in various matters. Arthur A. Weiss, one of our directors, is the Chairman of the Board of Directors and a shareholder of such firm. We incurred legal fees and expenses owed to Jaffe, Raitt, Heuer, & Weiss of approximately $5.0 million, $8.0 million and $4.6 million in the years ended December 31, 2017, 2016 and 2015, respectively. Tax Consequences Upon Sale of Properties. Gary A. Shiffman holds limited partnership interests in the Operating Partnership which were received in connection with the contribution of properties from partnerships previously affiliated with him. Prior to any redemption of these limited partnership interests for our common stock, Mr. Shiffman will have tax consequences different from those on us and our public stockholders upon the sale of any of these partnerships. Therefore, we and Mr. Shiffman may have different objectives regarding the appropriate pricing and timing of any sale of those properties. We rely on key management. We are dependent on the efforts of our executive officers, Gary A. Shiffman, John B. McLaren, Karen J. Dearing, and Jonathan M. Colman. The loss of services of one or more of these executive officers could have a temporary adverse effect on our operations. We do not currently maintain or contemplate obtaining any “key-man” life insurance on the Executive Officers. Certain provisions in our governing documents may make it difficult for a third-party to acquire us. 9.8 percent Ownership Limit. In order to qualify and maintain our qualification as a REIT, not more than 50 percent of the outstanding shares of our capital stock may be owned, directly or indirectly, by five or fewer individuals. Thus, ownership of more than 9.8 percent, in number of shares or value, of the issued and outstanding shares of our capital stock by any single stockholder has been restricted, with certain exceptions, for the purpose of maintaining our qualification as a REIT under the Code. Such restrictions in our charter do not apply to Milton M. Shiffman, Gary A. Shiffman, and Robert B. Bayer; trustees, personal representatives and agents to the extent acting for them or their respective estates; or certain of their respective relatives. The 9.8 percent ownership limit, as well as our ability to issue additional shares of common stock or shares of other stock (which may have rights and preferences over the common stock), may discourage a change of control of the Company and may also: (1) deter tender offers for the common stock, which offers may be advantageous to stockholders; and (2) limit the opportunity for stockholders to receive a premium for their common stock that might otherwise exist if an investor were attempting to assemble a block of common stock in excess of 9.8 percent of our outstanding shares or otherwise effect a change of control of the Company. Preferred Stock. Our charter authorizes the Board of Directors to issue up to 20,000,000 shares of preferred stock and to establish the preferences and rights (including the right to vote and the right to convert into shares of common stock) of any shares issued. Our charter designates 6,364,770 shares of preferred stock as 6.50% Series A-4 Cumulative Convertible Preferred Stock (“Series A-4 preferred stock”), $0.01 par value per share of which 1,085,365 shares were issued and outstanding as of December 31, 2017. 14 SUN COMMUNITIES, INC. The power to issue preferred stock could have the effect of delaying or preventing a change in control of the Company even if a change in control were in the stockholders’ interest. Subject to certain limitations, upon written notice to us, each holder of shares of Series A-4 preferred stock at its option may convert each share of Series A-4 preferred stock held by it for that number of shares of our common stock equal to the quotient obtained by dividing $25.00 by the then-applicable conversion price. The initial conversion price is $56.25, so initially each share of Series A-4 preferred stock is convertible into approximately 0.4444 shares of common stock. The conversion price is subject to adjustment upon various events. At our option, instead of issuing the shares of common stock to the converting holder of Series A-4 preferred stock as described above, we may make a cash payment to the converting holder with respect to each share of Series A-4 preferred stock the holder desires to convert equal to the fair market value of one share of our common stock. If, at any time after November 26, 2019, the volume weighted average of the daily volume weighted average price of a share of our common stock on the NYSE equals or exceeds 115.5 percent of the then prevailing conversion price for at least 20 trading days in a period of 30 consecutive trading days, then, within 10 days thereafter, upon written notice to the holders thereof, we may convert each outstanding share of Series A-4 preferred stock into that number of shares of common stock equal to the quotient obtained by dividing $25.00 by the then prevailing conversion price. These features of the Series A-4 preferred stock may have the effect of inhibiting a third-party from making an acquisition proposal for the Company or of delaying, deferring or preventing a change of control of the Company under circumstances that otherwise could provide the holders of our common stock and preferred stock with the opportunity to realize a premium over the then-current market price or that stockholders may otherwise believe is in their best interests. Certain provisions of Maryland law could inhibit changes in control, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interest. Certain provisions of the Maryland General Corporation Law, (“MGCL”), may have the effect of inhibiting a third-party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of shares of our capital stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including: • • “business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns 10 percent or more of the voting power of our shares or an affiliate thereof or an affiliate or associate of ours who was the beneficial owner, directly or indirectly, of 10 percent or more of the voting power of our then outstanding voting stock at any time within the two-year period immediately prior to the date in question) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose fair price and/or supermajority and stockholder voting requirements on these combinations; and “control share” provisions that provide that “control shares” of our company (defined as shares that, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares. The provisions of the MGCL relating to business combinations do not apply, however, to business combinations that are approved or exempted by our Board of Directors prior to the time that the interested stockholder becomes an interested stockholder. As permitted by the statute, our Board of Directors has by resolution exempted Milton M. Shiffman, Robert B. Bayer, and Gary A. Shiffman, their affiliates and all persons acting in concert or as a group with the foregoing, from the business combination provisions of the MGCL and, consequently, the five-year prohibition and the supermajority vote requirements will not apply to business combinations between us and these persons. As a result, these persons may be able to enter into business combinations with us that may not be in the best interests of our stockholders without compliance by our Company with the supermajority vote requirements and the other provisions of the statute. Also, pursuant to a provision in our bylaws, we have exempted any acquisition of our stock from the control share provisions of the MGCL. However, our Board of Directors may by amendment to our bylaws opt in to the control share provisions of the MGCL at any time in the future. 15 SUN COMMUNITIES, INC. Additionally, Subtitle 8 of Title 3 of the MGCL permits our Board of Directors, without stockholder approval and regardless of what is currently provided in our charter or bylaws, to elect to be subject to certain provisions relating to corporate governance that may have the effect of delaying, deferring or preventing a transaction or a change of control of our company that might involve a premium to the market price of our common stock or otherwise be in our stockholders’ best interests. These provisions include a classified board; two-thirds vote to remove a director; that the number of directors may only be fixed by the Board of Directors; that vacancies on the board as a result of an increase in the size of the board or due to death, resignation or removal can only be filled by the board, and the director appointed to fill the vacancy serves for the remainder of the full term of the class of director in which the vacancy occurred; and a majority requirement for the calling by stockholders of special meetings. Other than a classified board, the filling of vacancies as a result of the removal of a director and a majority requirement for the calling by stockholders of special meetings, we are already subject to these provisions, either by provisions of our charter and bylaws unrelated to Subtitle 8 or by reason of an election to be subject to certain provisions of Subtitle 8. In the future, our Board of Directors may elect, without stockholder approval, to make us subject to the provisions of Subtitle 8 to which we are not currently subject. Our Board of Directors has power to adopt, alter or repeal any provision of our bylaws or make new bylaws, provided, however, that our stockholders may alter or repeal any provision of our bylaws and adopt new bylaws if any such alteration, repeal or adoption is approved by the affirmative vote of a majority of all votes entitled to be cast on the matter. Changes in our investment and financing policies may be made without stockholder approval. Our investment and financing policies, and our policies with respect to certain other activities, including our growth, debt, capitalization, distributions, REIT status, and operating policies, are determined by our Board of Directors. Although the Board of Directors has no present intention to do so, these policies may be amended or revised from time to time at the discretion of the Board of Directors without notice to or a vote of our stockholders. Accordingly, stockholders may not have control over changes in our policies and changes in our policies may not fully serve the interests of all stockholders. Substantial sales of our common stock could cause our stock price to fall. The sale or issuance of substantial amounts of our common stock or preferred stock, whether directly by us or in the secondary market, the perception that such sales could occur or the availability of future issuances of shares of our common stock, preferred stock, OP units or other securities convertible into or exchangeable or exercisable for our common stock or preferred stock, could materially and adversely affect the market price of our common stock or preferred stock and our ability to raise capital through future offerings of equity or equity-related securities. In addition, we may issue capital stock that is senior to our common stock in the future for a number of reasons, including to finance our operations and business strategy, to adjust our ratio of debt to equity or for other reasons. Based on the applicable conversion ratios then in effect, as of February 15, 2018, in the future we may issue to the limited partners of the Operating Partnership, up to approximately 2.7 million shares of our common stock in exchange for their OP units. The limited partners may sell such shares pursuant to registration rights, if available, or an available exemption from registration. As of February 15, 2018, options to purchase 3,000 shares of our common stock were outstanding under our equity incentive plans, and we currently have the authority to issue restricted stock awards or options to purchase up to an additional 1,351,843 shares of our common stock pursuant to our equity incentive plans. In addition, we entered into an At-the-Market Offering Sales Agreement in July 2017 to issue and sell shares of common stock. As of February 15, 2018, our Board of Directors had authorized us to sell an additional $420.0 million of common stock under this agreement. No prediction can be made regarding the effect that future sales of shares of our common stock or our other securities will have on the market price of shares. An increase in interest rates may have an adverse effect on the price of our common stock. One of the factors that may influence the price of our common stock in the public market will be the annual distributions to stockholders relative to the prevailing market price of the common stock. An increase in market interest rates may tend to make the common stock less attractive relative to other investments, which could adversely affect the market price of our common stock. We may be adversely impacted by fluctuations in foreign currency exchange rates. Our investments in and operations of Canadian properties are exposed to the effects of changes in the Canadian dollar against the U.S. dollar. Changes in foreign currency exchange rates cannot always be predicted; as a result, substantial unfavorable changes in exchange rates could have a material adverse effect on our financial condition and results of operations. 16 SUN COMMUNITIES, INC. The volatility in economic conditions and the financial markets may adversely affect our industry, business and financial performance. The U.S. interest rate environment, oil price fluctuations, uncertain tax and economic plans in the U.S. executive and legislative branches, and turmoil in emerging markets have created uncertainty and volatility in the U.S. and global economies. Continued economic uncertainty, both nationally and internationally, causes increased volatility in investor confidence thereby creating similar volatility in the availability of both debt and equity capital in the financial markets. The other risk factors presented in this Annual Report on Form 10-K discuss some of the principal risks inherent in our business, including liquidity risks, operational risks, and credit risks, among others. Turbulence in financial markets accentuates each of these risks and magnifies their potential effect on us. If such volatility is experienced in future periods, there could be an adverse impact on our access to capital, stock price and our operating results. Our business operations may not generate the cash needed to make distributions on our capital stock or to service our indebtedness, and we may adjust our common stock distribution policy. Our ability to make distributions on our common stock and preferred stock, and payments on our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to make distributions on our common stock or preferred stock, to pay our indebtedness or to fund our other liquidity needs. The decision to declare and pay distributions on shares of our common stock in the future, as well as the timing, amount and composition of any such future distributions, will be at the sole discretion of our Board of Directors in light of conditions then existing, including our earnings, financial condition, capital requirements, debt maturities, the availability of debt and equity capital, applicable REIT and legal restrictions and the general overall economic conditions and other factors. Any change in our distribution policy could have a material adverse effect on the market price of our common stock. Our ability to pay distributions is limited by the requirements of Maryland law. Our ability to pay distributions on our common stock and preferred stock is limited by the laws of Maryland. Under Maryland law, a Maryland corporation generally may not make a distribution if, after giving effect to the distribution, the corporation would not be able to pay its debts as they become due in the usual course of business, or the corporation’s total assets would be less than the sum of its total liabilities plus, unless the corporation’s charter provides otherwise, the amount that would be needed, if the corporation were dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution, provided, however, that a Maryland corporation may make a distribution from: (i) its net earnings for the fiscal year in which the distribution is made; (ii) its net earnings for the preceding fiscal year; or (iii) the sum of its net earnings for its preceding eight fiscal quarters even if, after such distribution, the corporation’s total assets would be less than its total liabilities. Accordingly, we generally may not make a distribution on our common stock or preferred stock if, after giving effect to the distribution, we would not be able to pay our debts as they become due in the usual course of business or, unless paid from one of the permitted sources of net earnings as described above, our total assets would be less than the sum of our total liabilities plus, unless the terms of such class or series of stock provide otherwise, the amount that would be needed to satisfy the preferential rights upon dissolution of the holders of shares of any class or series of stock then outstanding, if any, with preferential rights upon dissolution senior to those of our common stock or currently outstanding preferred stock. We may not be able to pay distributions upon events of default under our financing documents. Some of our financing documents contain restrictions on distributions upon the occurrence of events of default thereunder. If such an event of default occurs, such as our failure to pay principal at maturity or interest when due for a specified period of time, we would be prohibited from making payments on our common stock and preferred stock. Our share price could be volatile and could decline, resulting in a substantial or complete loss on our stockholders’ investment. The stock markets, including the NYSE on which we list our common stock, have experienced significant price and volume fluctuations. As a result, the market price of our common stock and preferred stock could be similarly volatile, and investors in our common stock and preferred stock may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. The price of our common stock and preferred stock could be subject to wide fluctuations in response to a number of factors, including: 17 SUN COMMUNITIES, INC. • • • • • • • • • • • • • • • • issuances of other equity securities in the future, including new series or classes of preferred stock; our operating performance and the performance of other similar companies; our ability to maintain compliance with covenants contained in our debt facilities; actual or anticipated variations in our operating results, funds from operations, cash flows or liquidity; changes in expectations of future financial performance or changes in our earnings estimates or those of analysts; changes in our distribution policy; publication of research reports about us or the real estate industry generally; increases in market interest rates that lead purchasers of our common stock and preferred stock to demand a higher dividend yield; changes in foreign currency exchange rates, specifically between the U.S. dollar and Canadian dollar; changes in market valuations of similar companies; adverse market reaction to the amount of our debt outstanding at any time, the amount of our debt maturing in the near- and medium-term and our ability to refinance our debt, or our plans to incur additional debt in the future; additions or departures of key management personnel; speculation in the press or investment community; equity issuances by us, or share resales by our stockholders or the perception that such issuances or resales may occur; actions by institutional stockholders; and general market and economic conditions. Many of the factors listed above are beyond our control. Those factors may cause the market price of our common stock or preferred stock to decline significantly, regardless of our financial condition, results of operations and prospects. It is impossible to provide any assurance that the market price of our common stock or preferred stock will not fall in the future, and it may be difficult for holders to resell shares of our common stock or preferred stock at prices they find attractive, or at all. In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation could result in substantial costs and divert our management’s attention and resources. Our Series A-4 preferred stock has not been rated. We have not sought to obtain a rating for our Series A-4 preferred stock. No assurance can be given, however, that one or more rating agencies might not independently determine to issue such a rating or that such a rating, if issued, would not adversely affect the market price of the Series A-4 preferred stock. In addition, we may elect in the future to obtain a rating of the Series A-4 preferred stock, which could adversely affect the market price of such preferred stock. Ratings only reflect the views of the rating agency or agencies issuing the ratings and such ratings could be revised downward, placed on a watch list or withdrawn entirely at the discretion of the issuing rating agency if in its judgment circumstances so warrant. Any such downward revision, placing on a watch list or withdrawal of a rating could have an adverse effect on the market price of the Series A-4 preferred stock. Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer. In the ordinary course of our business, we collect and store sensitive data, including our proprietary business information and that of our tenants, clients and vendors, as well as personally identifiable information of our employees, in our facilities and on our 18 SUN COMMUNITIES, INC. network. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our network and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, disrupt our operations, damage our reputation, and cause a loss of confidence, which could adversely affect our business. A significant interruption in our information technology systems could adversely affect our operations. We rely intensively on information technology to account for tenant transactions, manage the privacy of tenant data, communicate internally and externally, and analyze our financial and operating results. We are dependent on continuous access to the Internet to use our cloud-based applications. Damage or failure to our information technology systems could adversely affect our results of operations as we may incur significant costs or data loss. We continually assess new and enhanced information technology solutions to manage risk of system failure or interruption. Expanding social media platforms present new challenges. Social media outlets continue to grow and expand, which presents us with new risks. Adverse content about the Company and our Properties on social media platforms could result in damage to our reputation or brand. Improper posts by employees or others could result in disclosure of confidential or proprietary information regarding our operations. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 19 SUN COMMUNITIES, INC. ITEM 2. PROPERTIES As of December 31, 2017, the Properties were located throughout the US and in Ontario, Canada and consisted of 230 MH communities, 89 RV communities, and 31 properties containing both MH and RV sites. As of December 31, 2017, the Properties contained an aggregate of 121,892 developed sites comprised of 83,294 developed manufactured home sites, 22,742 annual RV sites (inclusive of both annual and seasonal usage rights), and 15,856 transient RV sites. There are approximately 9,600 additional MH and RV sites suitable for development. Most of the Properties include amenities oriented toward family and retirement living. Of the 350 Properties, 174 have more than 300 developed sites, with the largest having 2,340 developed MH and RV sites. See “Real Estate and Accumulated Depreciation, Schedule III”, included in our Consolidated Financial Statements, for detail on Properties that are encumbered. As of December 31, 2017, the Properties had an occupancy rate of 95.8 percent excluding transient RV sites. Since January 1, 2017, the Properties have averaged an aggregate annual turnover of homes (where the home is moved out of the community) of approximately 1.9 percent and an average annual turnover of residents (where the resident-owned home is sold and remains within the community, typically without interruption of rental income) of approximately 6.6 percent. The average renewal rate for residents in our Rental Program was 64.8 percent for the year ended December 31, 2017. We believe that our Properties’ high amenity levels contribute to low turnover and generally high occupancy rates. All of the Properties provide residents with attractive amenities with most offering a clubhouse, a swimming pool, and laundry facilities. Many of the Properties offer additional amenities such as sauna/whirlpool spas, tennis courts, shuffleboard, basketball courts, and/ or exercise rooms. Many RV communities offer incremental amenities including golf, pro shops, restaurants, zip lines, waterparks, watersports, and thematic experiences. We have concentrated our communities within certain geographic areas in order to achieve economies of scale in management and operation. The Properties are principally concentrated in the Midwestern, Southern, Northeastern, Southeastern U.S. and Ontario, Canada. We believe that geographic diversification helps to insulate the portfolio from regional economic influences. The following tables set forth certain information relating to the Properties as of December 31, 2017. The occupancy percentage includes MH sites and annual RV sites, and excludes transient RV sites. Property MH/ RV City State MH and Annual RV Sites as of 12/31/17 Transient RV Sites as of 12/31/17 Occupancy as of 12/31/17 Occupancy as of 12/31/16 UNITED STATES Midwest Michigan Academy/West Pointe Allendale Meadows Mobile Village Alpine Meadows Mobile Village Apple Carr Village Arbor Woods Brentwood Mobile Village Brookside Village Byron Center Mobile Village Camelot Villa Cider Mill Crossings Cider Mill Village Continental North Country Acres Mobile Village Country Hills Village Country Meadows Mobile Village MH Canton MH Allendale MH Grand Rapids MH Muskegon MI MI MI MI MH Superior Township MI MI MH Kentwood MI MH Kentwood MI MH Byron Center MI MH Macomb MI MH Fenton MH Middleville MH Davison MH Cadillac MH Hudsonville MH Flat Rock MI MI MI MI MI 20 441 352 403 595 458 195 196 143 712 434 258 474 182 239 577 — 97.5% 98.9% — 96.9% — 97.5% — 84.4% (1) — 75.3% — 97.4% — 99.0% — 100.0% — 99.3% — 74.0% (1) — 98.1% — 73.4% — 98.4% — 100.0% — 95.5% 98.0% 96.8% 94.0% N/A 100.0% 100.0% 100.0% 99.3% 91.1% (1) 96.9% 65.6% 95.6% 99.2% 95.7% SUN COMMUNITIES, INC. MH and Annual RV Sites as of 12/31/17 395 State MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI MI Property Country Meadows Village Creekwood Meadows Cutler Estates Mobile Village Dutton Mill Village East Village Estates Egelcraft Fisherman’s Cove Frenchtown Villa/Elizabeth Woods Grand Mobile Estates Hamlin Hickory Hills Village Hidden Ridge RV Resort (2) Holiday West Village Holly Village / Hawaiian Gardens Hunters Crossing Hunters Glen Kensington Meadows Kimberly Estates MH/ RV MH Caledonia City MH Burton MH Grand Rapids MH Caledonia Washington MH Township MH Muskegon MH Flint MH Newport MH Grand Rapids MH Webberville MH Battle Creek RV Hopkins MH Holland MH Holly MH Capac MH Wayland MH Lansing MH Newport Kings Court Mobile Village MH Traverse City Knollwood Estates Lafayette Place Lakeview Leisure Village Lincoln Estates Meadow Lake Estates Meadowbrook Estates Meadowlands of Gibraltar Northville Crossings Oak Island Village Petoskey RV Resort (2) Pinebrook Village Presidential Estates Mobile Village Richmond Place River Haven Village Rudgate Clinton Rudgate Manor Scio Farms Estates Sheffield Estates Silver Springs Southwood Village St. Clair Place MH Allendale MH Warren MH Ypsilanti MH Belmont MH Holland MH White Lake MH Monroe MH Rockwood MH Northville MH East Lansing RV Petoskey MI MH Grand Rapids MI MH Hudsonville MI MH Richmond MI MI MH Grand Haven MH Clinton Township MI MI MH Sterling Heights MI MH Ann Arbor MH Auburn Hills MI MH Clinton Township MI MI MH Grand Rapids MI MH St. Clair 21 Transient RV Sites as of 12/31/17 Occupancy as of 12/31/17 — 91.4% (1) — 98.5% — 98.5% — 97.4% — 99.4% — 97.6% — 91.4% — 84.7% (1) — 96.8% — 95.7% (1) — 98.6% Occupancy as of 12/31/16 99.7% 95.8% 98.8% 99.0% 98.3% 97.2% 93.8% 84.9% 96.8% 89.1% (1) 98.6% 168 100.0% 100.0% — 99.7% — 94.6% — 99.1% — 76.5% (1) — 96.6% — 94.8% — 78.8% (1) — 92.6% — 94.9% — 98.2% — 100.0% — 99.5% — 97.9% — 96.3% — 96.9% — 99.5% — 97.6% 78 N/A — 98.9% — 98.9% — 94.9% — 78.8% — 97.3% — 97.3% — 98.4% — 99.6% — 99.5% — 98.7% — 96.0% 99.7% 93.6% 97.4% 96.1% 91.0% 80.4% 98.9% 99.4% 88.2% 98.7% 99.6% 99.5% 94.6% 94.9% 95.9% 99.2% 97.6% N/A 98.4% 98.4% 88.9% 72.3% 95.7% 98.3% 97.9% 96.9% 98.2% 98.7% 93.0% 336 259 307 708 458 162 1,123 219 230 283 167 341 425 114 396 290 387 802 161 254 392 238 191 425 453 320 756 250 — 185 364 117 721 667 931 913 228 547 394 100 SUN COMMUNITIES, INC. Property Sunset Ridge Sycamore Village Tamarac Village Tamarac Village RV Resort (2) Timberline Estates Town & Country Mobile Village Warren Dunes Village Waverly Shores Village West Village Estates White Lake Mobile Home Village Windham Hills Estates Windsor Woods Village Woodhaven Place Michigan Total MH/ RV MH Portland City MH Mason MH Ludington RV Ludington MH Coopersville MH Traverse City MH Bridgman MH Holland MH Romulus MH White Lake MH Jackson MH Wayland MH Woodhaven Indiana Brookside Mobile Home Village MH Goshen Carrington Pointe Clear Water Mobile Village Cobus Green Mobile Home Park Deerfield Run Four Seasons Lake Rudolph Campground & RV Resort(2) Liberty Farms Pebble Creek Pine Hills Roxbury Park Indiana Total Ohio Apple Creek East Fork Indian Creek RV & Camping Resort (2) Oakwood Village Orchard Lake Westbrook Senior Village Westbrook Village Willowbrook Place Woodside Terrace Ohio Total MH Ft. Wayne MH South Bend MH Osceola MH Anderson MH Elkhart RV Santa Claus MH Valparaiso MH Greenwood MH Middlebury MH Goshen MH Amelia MH Batavia Geneva on the RV Lake MH Miamisburg MH Milford MH Toledo MH Toledo MH Toledo MH Holland 22 MH and Annual RV Sites as of 12/31/17 249 State MI Transient RV Sites as of 12/31/17 Occupancy as of 12/31/17 — 92.0% (1) — 98.5% — 98.7% 10 100.0% — 98.7% — 99.5% — 72.3% (1) — 78.8% (1) — 99.4% — 96.8% — 85.5% (1) — 98.4% — 96.4% Occupancy as of 12/31/16 76.7% (1) 99.2% 99.3% 100.0% 99.3% 97.4% 98.4% 100.0% 98.1% 98.1% 91.2% (1) 96.5% 97.7% 94.8% 25,881 256 93.3% — 89.1% — 98.4% — 96.5% — 96.4% — 91.4% — 95.4% 520 N/A — 96.8% — 95.3% — 98.5% — 97.7% 95.0% 520 83.0% 98.1% 94.7% 96.4% 90.3% 95.0% N/A 99.1% 96.9% 96.1% 99.0% 93.9% — 97.7% — 98.9% (1) 97.7% 88.9% (1) 145 100.0% — 98.8% — 98.0% — 99.1% — 94.2% — 94.0% — 93.4% 100.0% 99.2% 95.2% 98.2% 96.2% 96.2% 90.7% 95.6% 2,759 145 97.0% MI MI MI MI MI MI MI MI MI MI MI MI IN IN IN IN IN IN IN IN IN IN IN OH OH OH OH OH OH OH OH OH 396 301 104 296 192 314 415 628 315 469 314 220 570 320 227 386 175 218 — 220 257 129 398 2,900 176 350 414 511 147 112 344 266 439 SUN COMMUNITIES, INC. MH/ RV City State MH and Annual RV Sites as of 12/31/17 Transient RV Sites as of 12/31/17 Occupancy as of 12/31/17 Occupancy as of 12/31/16 RV Austin RV San Antonio MH Pflugerville MH Austin MH Pflugerville MH New Braunfels RV New Braunfels RV Austin MH Austin MH Georgetown MH Houston MH Austin MH Austin MH San Marcos MH Carrolton RV Carrolton MH San Antonio MH Converse MH Kyle MH San Antonio RV San Antonio RV Arlington MH San Antonio RV Bradenton MH Lakeland MH Sarasota RV Zephyrhills RV Arcadia MH Punta Gorda MH Dade City RV Dade City RV Bushnell MH Hudson MH Sebring RV Sebring MH South Daytona 23 TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX TX FL FL FL FL FL FL FL FL FL FL FL FL FL 13 119 629 392 417 367 15 — 433 229 680 848 515 562 54 12 335 446 171 7 27 14 316 141 100.0% 143 100.0% — 95.4% (1) — 100.0% — 98.8% — 97.0% (1) 100.0% 349 N/A 244 — 96.8% — 37.6% (1) — 98.4% (1) — 97.3% (1) — 98.5% — 83.8% (1) — 100.0% 208 100.0% — 97.9% — 97.1% — 98.8% — 100.0% 100.0% 129 159 100.0% — 70.9% (1) 6,601 1,373 93.2% 187 207 251 281 337 408 206 36 266 191 407 365 128 174 100.0% — 96.1% — 98.8% 71 100.0% 74 100.0% — 96.1% (1) — 99.5% 100.0% 19 139 100.0% — 96.9% — 99.8% 167 100.0% — 90.6% 100.0% 100.0% 97.0% 99.5% 100.0% 99.7% N/A N/A 97.7% 91.3% 94.4% (1) 96.2% (1) 98.8% 68.5% (1) 100.0% N/A 96.1% 98.2% 99.4% 100.0% 100.0% 100.0% 93.8% 94.8% 100.0% 96.6% 100.0% 100.0% 100.0% 98.2% 98.5% 100.0% 100.0% 92.6% 99.8% 100.0% 90.6% Property SOUTH Texas Austin Lone Star RV Resort (2) Blazing Star (2) Boulder Ridge Branch Creek Estates Chisholm Point Estates Comal Farms Hill Country Cottage and RV Resort (2) La Hacienda RV Resort (2) Oak Crest Pecan Branch Pine Trace River Ranch River Ridge Saddlebrook Sandy Lake Sandy Lake RV Resort (2) Stonebridge Summit Ridge Sunset Ridge Traveler’s World Traveler’s World RV Resort (2) Treetops RV Resort (2) Woodlake Trails Texas Total SOUTHEAST Florida Arbor Terrace RV Park (2) Ariana Village Bahia Vista Estates Baker Acres RV Resort (2) Big Tree RV Resort (2) Blue Heron Pines Blue Jay Blue Jay RV Resort (2) Blueberry Hill (2) Brentwood Estates Buttonwood Bay Buttonwood Bay RV Resort (2) Candlelight Manor SUN COMMUNITIES, INC. MH and Annual RV Sites as of 12/31/17 467 State FL MH/ RV MH Sanford City MH Haines City RV Haines City RV Dade City RV Naples MH Hudson MH Port Orange MH Paisley RV Paisley MH Lake Alfred RV Port Orange MH Orlando RV Dunedin RV Ellenton FL FL FL FL FL FL FL FL FL FL FL FL FL MH Panama City Beach FL RV Panama City Beach FL FL MH Ocala FL MH Homosassa FL MH Zephyrhills RV Zephyrhills MH Homestead RV Homestead MH Dunedin RV Citra RV Dade City RV Ft. Myers MH Orlando MH Auburndale RV Riverview MH Key West MH Apopka MH Holly Hill FL FL FL FL FL FL FL FL FL FL FL FL FL RV Homosassa Springs FL FL RV Bradenton FL MH Ft. Myers Beach RV Ft. Myers Beach MH Merritt Island MH DeBary MH Lakeland MH Lake Alfred MH Kissimmee MH Davenport 24 FL FL FL FL FL FL FL Transient RV Sites as of 12/31/17 Occupancy as of 12/31/17 — 98.5% (1) — 90.9% 171 100.0% 40 100.0% 97 100.0% — 98.7% — 95.0% — 90.7% 100.0% 11 — 95.4% 100.0% 127 — 98.1% 68 49 100.0% 100.0% — 100.0% — 100.0% — 97.6% — 96.7% — 100.0% 63 100.0% — 98.2% 100.0% 39 — 96.3% 119 100.0% 93 56 100.0% 100.0% — 95.3% 103 — 98.8% 100.0% — 84.6% — 95.0% — 99.8% 131 143 100.0% 100.0% — 99.7% 101 100.0% — 100.0% — 100.0% — 82.9% — 100.0% — 99.2% — 90.9% Occupancy as of 12/31/16 99.4% 90.9% 100.0% 100.0% 100.0% 99.0% N/A 78.1% 100.0% 95.8% 100.0% 94.6% 100.0% 100.0% N/A N/A 97.6% 94.3% 100.0% 100.0% 100.0% 100.0% 94.2% 100.0% 100.0% 100.0% 91.9% 99.2% 100.0% 100.0% 94.0% 99.5% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 74.9% 98.2% 95.4% 90.9% 110 196 142 207 478 383 97 14 259 105 569 171 145 42 158 293 300 52 155 502 4 135 285 152 213 974 829 210 13 100 402 92 333 353 976 301 245 239 226 239 142 Property Carriage Cove Central Park Central Park RV Resort (2) Citrus Hill RV Resort (2) Club Naples (2) Club Wildwood Colony in the Wood Country Squire Country Squire RV Resort (2) Cypress Greens Daytona Beach RV Resort (2) Deerwood Dunedin RV Resort (2) Ellenton Gardens RV Resort (2) Emerald Coast Emerald Coast RV Resort (2) Fairfield Village Forest View Glen Haven Glen Haven RV Resort (2) Gold Coaster Gold Coaster RV Resort (2) Grand Bay Grand Lakes (2) Grove Ridge RV Resort (2) Groves RV Resort (2) Gulfstream Harbor The Hamptons Hidden River RV Resort (2) The Hideaway The Hills Holly Forest Estates Homosassa River RV Resort (2) Horseshoe Cove RV Resort (2) Indian Creek Park Indian Creek RV Park (2) Island Lakes Kings Lake Kings Manor King’s Pointe Kissimmee Gardens Kissimmee South SUN COMMUNITIES, INC. Property Kissimmee South RV Resort (2) La Costa Village Lake Josephine (2) Lake Juliana Landings Lake Pointe Village Lake San Marino RV Park (2) Lakeland RV Resort (2) Lakeshore Landings Lakeshore Villas Lamplighter Majestic Oaks RV Resort (2) Marco Naples RV Resort (2) Meadowbrook Village Mill Creek Mill Creek RV Resort (2) Naples RV Resort (2) New Ranch North Lake (2) Oakview Estates Ocean Breeze MH/ RV RV Davenport City MH Port Orange RV Sebring MH Auburndale MH Mulberry RV Naples RV Lakeland MH Orlando MH Tampa MH Port Orange RV Zephyrhills RV Naples MH Tampa MH Kissimmee RV Kissimmee RV Naples MH Clearwater RV Moore Haven MH Arcadia MH Marathon MH Jensen Beach Ocean Breeze Jensen Beach Ocean Breeze Jensen Beach RV Resort (2) RV Jensen Beach Orange City MH Orange City Orange City RV Resort (2) Orange Tree Village RV Orange City MH Orange City Paddock Park South Palm Key Village Palm Village Park Place Park Royale Pecan Park RV Resort (2) Pelican Bay Pelican RV Resort & Marina (2) Plantation Landings Pleasant Lake RV Resort (2) Rainbow Rainbow RV Resort (2) Rainbow Village of Largo (2) Rainbow Village of Zephyrhills (2) Red Oaks Red Oaks RV Resort (2) Regency Heights MH Ocala MH Davenport MH Bradenton MH Sebastian MH Pinellas Park RV Jacksonville MH Micco RV Marathon MH Haines City RV Bradenton MH Frostproof RV Frostproof RV Largo RV Zephyrhills MH Bushnell RV Bushnell MH Clearwater 25 MH and Annual RV Sites as of 12/31/17 79 Transient RV Sites as of 12/31/17 121 State FL Occupancy as of 12/31/17 100.0% Occupancy as of 12/31/16 100.0% FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL 658 110 274 362 227 173 306 280 260 199 214 257 31 88 100 94 202 119 — 195 21 4 295 246 188 204 146 474 309 — 216 76 394 250 37 379 238 333 103 459 391 — 99.7% 100.0% 68 — 97.5% — 99.2% 100.0% 180 58 100.0% — 100.0% — 97.5% — 97.3% 100.0% 54 78 100.0% — 99.2% — 100.0% 69 100.0% 67 100.0% — 97.9% 70 100.0% — 99.2% —% (5) — — 63.1% (1) 100.0% 87 — 100.0% 226 100.0% — 100.0% — 76.1% — 100.0% — 98.0% — 93.3% — 99.7% 183 N/A — 92.6% 10 100.0% — 99.2% 91 100.0% — 100.0% 83 71 49 100.0% 100.0% 100.0% — 92.2% 458 100.0% — 95.4% 99.5% 100.0% 97.4% 99.2% 100.0% 100.0% 98.4% 97.1% 96.9% 100.0% 100.0% 99.6% 100.0% 100.0% 100.0% 97.9% 100.0% 95.8% 82.6% 76.2% 100.0% 100.0% 100.0% 100.0% 72.9% 99.0% 98.6% 89.0% 97.7% N/A 88.9% 100.0% 99.5% 100.0% 100.0% 100.0% 100.0% 100.0% 92.2% 100.0% 93.8% SUN COMMUNITIES, INC. MH and Annual RV Sites as of 12/31/17 481 State FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL FL 11 728 127 864 395 376 — — 202 1,069 — — 338 302 157 130 54 142 730 399 107 547 56 178 215 904 173 332 407 77 212 273 31 232 214 148 136 25 113 213 213 MH/ RV MH Davenport City RV Key Largo MH Ruskin RV Crystal River MH Miami MH Haines City MH Ocala MH Islamorada RV Islamorada MH Sarasota MH Port St. Lucie MH Islamorada RV Islamorada MH North Fort Myers RV Zephyrhills MH Hudson MH Ocala MH Punta Gorda RV Punta Gorda RV Ft. Myers RV Zephyrhills MH Bradenton MH Zephyrhills MH Thonotasassa RV Thonotasassa MH Homosassa RV Sarasota MH Port Richey MH Zephyrhills MH Grand Island MH Key West RV Zephyrhills MH Coconut Creek MH Dover RV Dover RV Hudson MH Apopka MH Bradenton RV Bradenton MH Port Charlotte MH Homosassa MH Homosassa 26 Property The Ridge Riptide RV Resort & Marina (2) Riverside Club Rock Crusher Canyon RV Park (2) Royal Country Royal Palm Village Saddle Oak Club San Pedro San Pedro RV Resort & Marina (2) Saralake Estates Savanna Club Sea Breeze Resort Sea Breeze RV Resort (2) Serendipity Settler’s Rest RV Resort (2) Shadow Wood Village Shady Road Villas Shell Creek Shell Creek RV Resort & Marina (2) Siesta Bay RV Park (2) Southern Charm RV Resort (2) Southern Pines Southport Springs Spanish Main Spanish Main RV Resort (2) Stonebrook Sun-N-Fun RV Resort (2) Suncoast Gateway Sundance Sunlake Estates Sunset Harbor at Cow Key Marina Sweetwater RV Resort (2) Tallowwood Isle Tampa East Tampa East RV Resort (2) Three Lakes (2) The Valley Vista del Lago Vista del Lago RV Resort (2) Vizcaya Lakes Walden Woods I Walden Woods II Transient RV Sites as of 12/31/17 Occupancy as of 12/31/17 — 98.3% 29 100.0% — 78.7% 267 100.0% — 99.9% — 82.3% — 99.5% —% (5) —% (5) — — — 100.0% — 97.6% (1) —% (5) — —% (5) — — 98.5% 76 100.0% — 99.4% — 62.3% — 100.0% 100.0% 42 67 100.0% 100.0% 98 — 95.3% — 98.4% (1) — 91.1% 98 100.0% — 90.7% 615 100.0% — 98.3% — 100.0% — 93.4% — 97.4% 100.0% 79 — 95.6% — 100.0% 437 100.0% 93 100.0% — 99.3% — 95.6% 100.0% 14 — 79.7% — 100.0% — 98.6% Occupancy as of 12/31/16 94.2% 100.0% 76.4% 100.0% 99.9% 77.7% 99.7% 94.4% 100.0% 100.0% 97.2% 93.5% 100.0% 99.1% 100.0% 98.7% 58.5% 100.0% 100.0% 100.0% 100.0% 91.6% 98.5% 92.9% 100.0% 89.3% 100.0% 83.8% 100.0% 93.1% 98.7% 100.0% 96.3% 100.0% 100.0% 100.0% 96.6% 94.9% 100.0% 78.8% 100.0% 98.1% SUN COMMUNITIES, INC. Property Water Oak Country Club Estates Waters Edge RV Resort (2) Westside Ridge Windmill Village Woodlands at Church Lake Florida Total SOUTHWEST California 49’er Village RV Resort (2) Alta Laguna Caliente Sands The Colony Friendly Village of La Habra Friendly Village of Modesto Friendly Village of Simi Friendly Village of West Covina Heritage Indian Wells RV Resort (2) Lakefront Lazy J Ranch Lemon Wood Napa Valley Oak Creek Ocean West Palos Verdes Shores MH & Golf Community Pembroke Downs Pismo Dunes RV Resort (2) Rancho Alipaz Rancho Cabellero Royal Palms Royal Palms RV Resort (2) Vallecito Victor Villa Vines RV Resort (2) Vista del Lago Wine Country RV Resort (2) California Total Arizona MH/ RV City MH Lady Lake RV Zephyrhills MH Auburndale MH Davenport MH Groveland RV Plymouth Rancho Cucamonga MH MH Cathedral City MH Oxnard MH La Habra MH Modesto MH Simi Valley MH West Covina MH Temecula RV Indio MH Lakeside MH Arcata MH Ventura MH Napa MH Coarsegold MH McKinleyville MH San Pedro MH Chino RV Pismo Beach San Juan MH Capistrano MH Riverside MH Cathedral City RV Cathedral City MH Newbury Park MH Victorville RV Paso Robles MH Scotts Valley RV Paso Robles MH and Annual RV Sites as of 12/31/17 1,219 136 219 509 291 37,254 State FL FL FL FL FL Transient RV Sites as of 12/31/17 Occupancy as of 12/31/17 — 95.3% (1) 81 100.0% — 99.1% — 99.2% — 70.5% 97.1% 6,074 Occupancy as of 12/31/16 94.5% (1) 100.0% 98.6% 98.0% 67.4% 96.4% CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA CA 31 294 100.0% N/A 295 118 150 329 289 222 157 196 138 295 219 231 257 198 128 242 163 331 132 303 439 37 303 287 — 202 — 5,692 — 100.0% — 97.5% — 100.0% — 100.0% — 94.5% — 100.0% — 99.4% — 100.0% 100.0% — 100.0% — 100.0% — 100.0% — 100.0% — 95.0% — 100.0% 178 — 100.0% — 100.0% — 100.0% — 100.0% — 99.7% — 96.8% 1 100.0% — 100.0% — 97.2% N/A — 100.0% N/A 99.1% 130 203 806 99.7% N/A 100.0% 99.4% 90.7% 100.0% 100.0% 99.5% 100.0% 100.0% N/A 100.0% 100.0% 96.0% N/A 99.6% 100.0% N/A 100.0% 99.7% 96.8% 100.0% 99.7% 95.5% N/A 100.0% N/A 98.6% Blue Star/Lost Dutchman Blue Star/Lost Dutchman RV Resort (2) MH Apache Junction RV Apache Junction AZ AZ 169 75 — 93.5% 131 100.0% 94.1% 100.0% 27 SUN COMMUNITIES, INC. MH and Annual RV Sites as of 12/31/17 Transient RV Sites as of 12/31/17 City State Occupancy as of 12/31/17 Occupancy as of 12/31/16 Property Brentwood West Desert Harbor Fiesta Village Fiesta Village RV Resort (2) La Casa Blanca Mountain View Palm Creek Golf Palm Creek Golf & RV Resort (2) Rancho Mirage Reserve at Fox Creek Sun Valley Verde Plaza Arizona Total Colorado Cave Creek Eagle Crest The Grove at Alta Ridge Jellystone Park(TM) at Larkspur (2) North Point Estates Skyline Swan Meadow Village Timber Ridge Colorado Total OTHER Seaport RV Resort (2) High Pointe Sea Air Village Sea Air Village RV Resort (2) Countryside Atlanta Countryside Gwinnett Countryside Lake Lanier Autumn Ridge Candlelight Village Maple Brook Oak Ridge Sunset Lakes RV Resort (2) Wildwood Community Campers Haven RV Resort (2) Peter’s Pond RV Resort (2) Castaways RV Resort & Campground (2) MH/ RV MH Mesa MH Apache Junction MH Mesa RV Mesa MH Apache Junction MH Mesa MH Casa Grande RV Casa Grande MH Apache Junction MH Bullhead City MH Apache Junction MH Tucson MH Evans MH Firestone MH Thornton RV Larkspur MH Pueblo MH Fort Collins MH Dillon MH Fort Collins RV Old Mystic MH Frederica MH Rehoboth Beach RV Rehoboth Beach MH Lawrenceville MH Buford MH Buford MH Ankeny MH Sauk Village MH Matteson MH Manteno RV Hillsdale MH Sandwich RV Dennisport RV Sandwich RV Berlin 28 AZ AZ AZ AZ AZ AZ AZ AZ AZ AZ AZ AZ CO CO CO CO CO CO CO CO CT DE DE DE GA GA GA IA IL IL IL IL IL MA MA MD — 99.1% — 99.0% — 79.9% 7 100.0% — 100.0% 97.7% 100.0% 81.2% 100.0% 100.0% — 99.4% — 52.1% (1) 100.0% 958 — 100.0% 100.0% 70.0% (1) 100.0% 100.0% 350 205 154 3 198 170 493 889 312 311 268 — 95.2% — 91.8% 189 3,786 — 90.0% 91.0% 1,096 447 441 409 — 108 170 175 585 — 99.1% — 100.0% — 99.8% 146 N/A — 99.1% — 99.4% — 100.0% — 99.5% 2,335 146 99.6% 93.2% 91.0% 81.5% 93.6% 99.1% 100.0% 99.8% N/A 97.2% 100.0% 100.0% 99.7% 99.6% 42 409 373 123 260 331 548 413 309 441 426 229 476 234 325 4 107 100.0% 100.0% — 96.6% — 98.4% 11 100.0% — 65.0% (1) — 99.1% — 98.7% — 97.1% — 97.1% — 99.6% — 93.0% 269 100.0% — 99.4% 40 81 100.0% 100.0% 389 100.0% 97.1% 98.4% 100.0% 100.0% (3) 99.7% 98.7% 98.8% 95.5% 99.3% 90.1% N/A 99.8% 100.0% 100.0% 100.0% SUN COMMUNITIES, INC. Property Fort Whaley (2) Frontier Town (2) Maplewood Manor MH/ City RV RV Whaleyville RV Ocean City MH Brunswick State MD MD ME MH Brunswick Merrymeeting Saco/Old Orchard Beach KOA (2) Town & Country Village Wagon Wheel RV Resort & Campground (2) RV Old Orchard Beach ME Wild Acres RV Resort & Campground (2) RV Old Orchard Beach ME MN Southern Hills/Northridge Place RV Saco MH Lisbon MH Stewartville ME ME ME Pin Oak Parc Southfork MH O’Fallon MH Belton Countryside Village Fort Tatham RV Resort & Campground (2) RV Sylva Glen Laurel MH Concord MH Great Falls MH Charlotte RV Cape May Meadowbrook Big Timber Lake RV Resort (2) Cape May Crossing Cape May KOA (2) Driftwood Camping Resort (2) RV Clermont Long Beach RV Resort & Campground (2) RV Barnegat Seashore Campsites RV Park and Campground (2) RV Cape May RV Cape May MH Cape May Shady Pines Galloway Township MH Galloway Township RV MH Reno RV Gansevoort Shady Pines RV Resort (2) Sun Villa Estates Adirondack Gateway RV Resort & Campground (2) Jellystone Park(TM) at Birchwood Acres MH Greenfield Park Jellystone Park(TM) at Birchwood Acres (2) RV Greenfield Park Jellystone Park(TM) of Western New York(2) RV North Java Parkside Village Sky Harbor The Villas at Calla Pointe Forest Meadows Woodland Park Estates Countryside Estates Lake In Wood (2) Pheasant Ridge MH Cheektowaga MH Cheektowaga MH Cheektowaga MH Philomath MH Eugene MH Mckean RV Narvon MH Lancaster Lakeside Crossing Bell Crossing MH Conway MH Clarksville 29 MO MO MT NC NC NC NJ NJ NJ NJ NJ NJ NJ NJ NV NY NY NY NY NY NY NY OR OR PA PA PA SC TN MH and Annual RV Sites as of 12/31/17 — Transient RV Sites as of 12/31/17 179 Occupancy as of 12/31/17 N/A Occupancy as of 12/31/16 N/A — 296 43 — 144 225 291 475 502 474 226 52 260 321 309 28 354 612 165 434 40 58 324 251 1 91 6 156 522 116 75 398 304 279 553 588 237 584 N/A — 99.3% — 100.0% 196 N/A — 99.3% N/A 99.7% 97.7% N/A 99.3% 61 100.0% 100.0% 339 100.0% — 92.8% (1) — 96.6% 100.0% 94.1% (1) 93.6% — 65.0% — 98.7% 100.0% 39 — 98.5% — 100.0% 100.0% 219 — 100.0% 275 100.0% 95 49 100.0% 100.0% 66.2% 99.1% 100.0% 99.2% 99.7% 100.0% 100.0% 100.0% 100.0% 100.0% 242 100.0% 100.0% — 97.5% 97.5% 37 100.0% — 99.7% 78 100.0% — 100.0% 183 100.0% 353 100.0% — 100.0% — 94.8% — 100.0% — 100.0% — 100.0% — 98.7% 141 100.0% — 99.8% — 76.0% (1) — 99.2% 100.0% 100.0% N/A 100.0% 100.0% 100.0% 100.0% 92.7% 100.0% 100.0% 100.0% 99.0% 100.0% 99.5% 96.2% 98.3% SUN COMMUNITIES, INC. MH/ RV City State MH and Annual RV Sites as of 12/31/17 Transient RV Sites as of 12/31/17 Occupancy as of 12/31/17 Occupancy as of 12/31/16 Property Gwynn’s Island RV Resort & Campground (2) New Point RV Resort (2) Sunset Beach RV Resort (4) Pine Ridge Thunderhill Estates Westward Ho RV Resort & Campground (2) Other Total US TOTAL / AVERAGE RV Gwynn RV New Point RV Cape Charles MH Prince George MH Sturgeon Bay RV Glenbeulah RV Millgrove CANADA Arran Lake RV Resort & Campground (2) RV Allenford Craigleith RV Resort & Campground (2) RV Clarksburg Deer Lake RV Resort & Campground (2) RV Huntsville Grand Oaks RV Resort & Campground (2) RV Cayuga Gulliver’s Lake RV Resort & Campground (2) Hidden Valley RV Resort & Campground (2) Lafontaine RV Resort & Campground (2) Lake Avenue RV Resort & Campground(2) RV Cherry Valley Pickerel Park RV Resort & Campground(2) RV Napanee Sherkston Shores Beach Resort & Campground (2) Silver Birches RV Resort & Campground (2) Trailside RV Resort & Campground (2) Willow Lake RV Resort & Campground(2) RV Scotland Willowood RV Resort & Campground (2) RV Amherstburg Woodland Lake RV Resort & Campground (2) RV Bornholm RV Sherkston RV Lambton Shores RV Seguin RV Normandale RV Penetanguishene CANADA TOTAL / AVERAGE VA VA VA VA WI WI ON ON ON ON ON ON ON ON ON 98 228 — 265 226 31 100.0% 100.0% N/A 96 — — 90.9% (1) — 99.1% 224 15,194 98 4,192 100.0% 96.0% 100.0% 100.0% N/A 95.9% 98.7% 100.0% 97.3% 102,402 14,608 95.6% 96.0% 139 62 156 227 198 195 181 115 132 50 49 83 38 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 1 100.0% 100.0% 50 82 12 77 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ON 1,364 350 100.0% 100.0% ON ON ON ON ON 125 179 310 100 37 58 61 100.0% 100.0% 100.0% 227 100.0% 151 3,634 73 1,248 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% COMPANY TOTAL / AVERAGE 106,036 15,856 95.8% 96.2% (1) Occupancy in these Properties reflects the fact that these communities are in a lease-up phase following an expansion. (2) Occupancy percentage excludes transient RV sites. Percentage calculated by dividing revenue producing sites by developed sites. A revenue producing site is defined as a site that is occupied by a paying resident or reserved by a customer with annual or seasonal usage rights. A developed site is defined as an adequate sized parcel of land that has road and utility access which is zoned and licensed (if required) for use as a home site. (3) At December 31, 2016, the number of developed sites and occupancy percentage at this property included sites that had been covered under our comprehensive insurance coverage (subject to deductibles and certain limitations) for both property damage and business interruption from a flood that caused substantial damage to this property. (4) We have an ownership interest in Sunset Beach, but do not maintain and operate the property. (5) Occupancy in these Properties for 12/31/2017 reflects redevelopment following asset impairments resulting from Hurricane Irma in September 2017. 30 SUN COMMUNITIES, INC. ITEM 3. LEGAL PROCEEDINGS We are involved in various legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material adverse impact on our results of operations or financial condition. ITEM 4. MINE SAFETY DISCLOSURES None. 31 SUN COMMUNITIES, INC. EXECUTIVE OFFICERS OF THE REGISTRANT The persons listed below are our executive officers. Name Gary A. Shiffman John B. McLaren Karen J. Dearing Jonathan M. Colman Age 63 47 53 62 Title Chairman and Chief Executive Officer President and Chief Operating Officer Executive Vice President, Treasurer, Chief Financial Officer and Secretary Executive Vice President Gary A. Shiffman is our Chairman and Chief Executive Officer and has been a director and an executive officer since our inception in 1993. He is a member of our Executive Committee. He has been actively involved in the management, acquisition, construction and development of manufactured housing communities and has developed an extensive network of industry relationships over the past thirty years. He has overseen the acquisition, rezoning, development, expansion and marketing of numerous manufactured home communities, as well as recreational vehicle communities. Additionally, Mr. Shiffman, through his family-related interests, has had significant direct holdings in various real estate asset classes, which include office, multi-family, industrial, residential and retail. Mr. Shiffman is an executive officer and a director of SHS and all of our other corporate subsidiaries. John B. McLaren has been in the manufactured housing industry since 1995. He has served as our President since 2014 and as our Chief Operating Officer since 2008. From 2008 to 2014, he served as an Executive Vice President of the Company. From 2005 to 2008, he was Senior Vice President of SHS with overall responsibility for home sales and leasing. Mr. McLaren spent approximately three years as Vice President of Leasing & Service for SHS with responsibility for developing and leading our Rental Program and also has experience in the multi-family REIT segment and the chattel lending industry. Karen J. Dearing has served as our Chief Financial Officer and Executive Vice President since 2008. She joined us in 1998 as the Director of Finance where she worked extensively with accounting and finance matters related to our ground-up developments and expansions. Ms. Dearing became our Corporate Controller in 2002 and Senior Vice President in 2006. She is responsible for the overall management of our information technology, accounting, tax and finance departments, and all internal and external financial reporting. Prior to working for us, Ms. Dearing had 7.5 years of experience as the Financial Controller of a privately- owned automotive supplier and 4.5 years of experience as a certified public accountant with Deloitte. Jonathan M. Colman has served as an Executive Vice President since March 2003. He joined us in 1994 as Vice President- Acquisitions and became a Senior Vice President in 1995. A certified public accountant, Mr. Colman has over thirty-five years of experience in the manufactured housing community industry. Prior to joining Sun, he has been involved in the acquisition, financing and management of over 75 manufactured housing communities for two of the 10 largest manufactured housing community owners, including Uniprop, Inc. during its syndication of over $90.0 million in public limited partnerships in the late 1980s. Mr. Colman is also a Vice President of all of our corporate subsidiaries. 32 SUN COMMUNITIES, INC. PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has been listed on the NYSE since December 8, 1993, and traded under the symbol “SUI”. The following table sets forth the high and low sales prices per share for the common stock for the periods indicated as reported by the NYSE and the distributions per share paid by us with respect to each period: Year Ended December 31, 2017 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Ended December 31, 2016 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter High Low 83.76 $ 91.37 $ 91.87 $ 96.08 $ 75.76 $ 79.41 $ 84.00 $ 85.27 $ Distributions 0.67 0.67 0.67 0.67 (1) High Low 71.76 $ 76.69 $ 85.98 $ 79.32 $ 62.58 $ 66.73 $ 74.23 $ 69.90 $ Distributions 0.65 0.65 0.65 0.65 (2) $ $ $ $ $ $ $ $ (1) Paid on January 16, 2018, to stockholders of record on December 29, 2017. (2) Paid on January 20, 2017, to stockholders of record on December 31, 2016. On February 15, 2018, the closing share price of our common stock was $86.52 per share on the NYSE, and there were 203 holders of record for the 79,739,141 million outstanding shares of common stock. On February 15, 2018, the Operating Partnership had (i) 2,740,342 common OP units issued and outstanding, not held by us, which were convertible into an equal number of shares of our common stock, (ii) 1,283,819 Aspen preferred OP units issued and outstanding which were exchangeable for 471,498 shares of our common stock, (iii) 343,237 Series A-1 preferred OP units issued and outstanding which were exchangeable for 837,163 shares of our common stock, (iv) 40,268 Series A-3 preferred OP units issued and outstanding which were exchangeable for 74,917 shares of our common stock, (v) 421,756 Series A-4 preferred OP units issued and outstanding, not held by us, which were exchangeable for 187,447 shares of our common stock, and (vi) 316,357 Series C preferred OP units issued and outstanding which were exchangeable for 351,156 shares of our common stock. We have historically paid regular quarterly distributions to holders of our common stock and common OP units. In addition, we are obligated to make distributions to holders of shares of Series A-4 preferred stock, Aspen preferred OP units, Series A-1 preferred OP units, Series A-3 preferred OP units, Series A-4 preferred OP units, Series B-3 preferred OP units and Series C preferred OP units. See “Structure of the Company” under Part I, Item 1 of this Annual Report on Form 10-K. Our ability to make distributions on our common and preferred stock and OP units, payments on our indebtedness, and to fund planned capital expenditures will depend on our ability to generate cash in the future. The decision to declare and pay distributions on shares of our common stock and common OP units in the future, as well as the timing, amount, and composition of any such future distributions, will be at the sole discretion of our Board of Directors in light of conditions then existing, including our earnings, financial condition, capital requirements, debt maturities, the availability of debt and equity capital, applicable REIT and legal restrictions, general overall economic conditions, and other factors. 33 SUN COMMUNITIES, INC. Securities Authorized for Issuance Under Equity Compensation Plans The following table reflects information about the securities authorized for issuance under our equity compensation plans as of December 31, 2017: Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of shares of common stock remaining available for future issuance under equity compensation plans (excluding securities reflected in column a) Plan Category (a) (b) (c) Equity compensation plans approved by stockholders Equity compensation plans not approved by stockholders Total 3,000 — 3,000 $ $ 33.45 — 33.45 1,371,343 — 1,371,343 Issuer Purchases of Equity Securities In November 2004, our Board of Directors authorized us to repurchase up to 1,000,000 shares of our common stock. We have 400,000 common shares remaining in the repurchase program. No common shares were repurchased under this program during 2017 or 2016. There is no expiration date specified for the repurchase program. Recent Sales of Unregistered Securities From time to time, we may issue shares of common stock in exchange for OP units that may be tendered to the Operating Partnership for redemption in accordance with the terms and provisions of the limited partnership agreement of the Operating Partnership. Such shares are issued based on the exchange ratios and formulas described in “Structure of the Company” under Part I, Item 1 of this Annual Report on Form 10-K. Year Ended December 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 Series Common OP unit Series A-1 preferred OP unit Series A-4 preferred OP unit Series A-4 preferred stock Series C preferred OP unit Conversion Rate Units / Shares 1 2.439 0.4444 0.4444 1.11 36,055 21,919 10,000 158,036 16,806 Common Stock 36,055 53,456 4,440 70,238 18,651 Units/ Shares 104,106 20,691 120,906 385,242 7,043 Common Stock 104,106 50,458 53,733 171,218 7,815 Units/ Shares 99,851 41,116 114,414 231,093 — Common Stock 99,851 100,277 50,848 102,708 — In addition to the shares of common stock issued pursuant to OP unit conversions above, we issued 298,900 shares of common stock totaling $26.4 million on July 27, 2017 in connection with an acquisition. All of the securities described above were issued in private placements in reliance on Section 4(a)(2) of the Securities Act, including Regulation D promulgated thereunder, based on certain investment representations made by the parties to whom the securities were issued. No underwriters were used in connection with any of such issuances. Performance Graph Set forth below is a line graph comparing the yearly percentage change in the cumulative total shareholder return on our common stock against the cumulative total return of a broad market index composed of all issuers listed on the NYSE and an industry index comprised of thirteen publicly traded residential real estate investment trusts, for the five year period ending on December 31, 2017. This line graph assumes a $100 investment on December 31, 2012, a reinvestment of distributions and actual increase of the market value of our common stock relative to an initial investment of $100. The comparisons in this table are required by the SEC and are not intended to forecast or be indicative of possible future performance of our common stock. 34 SUN COMMUNITIES, INC. Peer Group We utilize peer group data for quantitative benchmarking against external market participants. We select our peer group based on a number of quantitative and qualitative factors including, but not limited to, revenues, total assets, market capitalization, industry, sub-industry, location, total shareholder return history, executive compensation components, and peer decisions made by other companies. From time to time, we update our peer group based on analysis of the aforementioned factors and application of judgment. During 2017, we updated our peer group, as shown in the “SUI New Peer Group” caption in the table below. Index Sun Communities, Inc. SNL US REIT Residential NYSE Market Index SUI Old Peer Group (1) SUI New Peer Group (2) Period Ending 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 $ $ $ $ $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 100.00 $ 112.95 $ 97.19 $ 126.28 $ 92.11 $ 94.60 $ 168.48 $ 133.00 $ 134.81 $ 127.26 $ 130.10 $ 198.55 $ 154.74 $ 129.29 $ 144.68 $ 149.94 $ 229.76 $ 162.46 $ 144.73 $ 151.89 $ 158.12 $ 287.03 176.71 171.83 161.80 165.48 (1) SUI old peer group included: American Campus Communities, Inc., American Capital Agency Corp., Apartment Investment and Management Company, AvalonBay Communities, Inc., Camden Property Trust, Education Realty Trust, Inc., Equity Lifestyles Properties, Inc., Equity Residential, Essex Property Trust, Inc., Mid-America Apartment Communities, Inc., Senior Housing Properties Trust and UDR, Inc. (2) SUI new peer group includes: American Campus Communities, Inc., Apartment Investment and Management Company, AvalonBay Communities, Inc., Brandywine Realty Trust, Camden Property Trust, CubeSmart, Equity Lifestyles Properties, Inc., Essex Property Trust, Inc., Mid-America Apartment Communities, Inc., Tanger Factory Outlet Centers, Inc., Taubman Centers, Inc., UDR, Inc., and Weingarten Realty Investors. 35 SUN COMMUNITIES, INC. The information included under the heading “Performance Graph” is not to be treated as “soliciting material” or as “filed” with the SEC, and is not incorporated by reference into any filing by the Company under the Securities Act or the Exchange Act that is made on, before or after the date of filing of this Annual Report on Form 10-K. ITEM 6. SELECTED FINANCIAL DATA The following table sets forth selected financial and operating information on a historical basis. The historical financial data has been derived from our historical financial statements. The following information should be read in conjunction with the information included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the Consolidated Financial Statements and the Notes thereto. In addition to the results presented in accordance with GAAP below, we have provided net operating income (“NOI”) and funds from operations (“FFO”) as supplemental performance measures. Refer to Non-GAAP Financial Measures in Item 7 below for additional information. OPERATING INFORMATION Total revenues Net income attributable to Sun Communities, Inc. common stockholders Earnings per share - basic Earnings per share - diluted Cash distributions declared per common share $ $ $ $ $ Year Ended December 31, 2017 2016 (1) 2015 (1) 2014 (1) 2013 (1) (In thousands, except for share related data) 982,570 $ 833,778 $ 674,731 $ 484,259 $ 422,713 65,021 $ 0.85 $ 17,369 $ 0.27 $ 0.85 $ 0.26 $ 137,325 $ 2.53 $ $ 2.52 22,376 $ 0.54 $ $ 0.54 10,610 0.31 0.31 2.68 $ 2.60 $ 2.60 $ 2.60 $ 2.52 FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per share - fully diluted Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per share - fully diluted $ 320,119 $ 225,653 $ 192,128 $ 134,549 $ 117,583 $ 337,384 $ 266,131 $ 210,559 $ 148,356 $ 121,511 $ $ 3.95 $ 3.22 $ 3.31 $ 3.06 $ 3.12 4.17 $ 3.79 $ 3.63 $ 3.37 $ 3.22 BALANCE SHEETS Total assets Total debt Total liabilities $ 6,111,957 $ 5,870,776 $ 4,181,799 $ 2,925,546 $ 1,987,742 $ 3,079,238 $ 3,110,042 $ 2,336,297 $ 1,819,941 $ 1,485,658 $ 3,405,204 $ 3,441,605 $ 2,562,421 $ 1,997,540 $ 1,611,363 (1) Financial information has been revised to reflect certain reclassifications in prior periods to conform to current period presentation. 36 SUN COMMUNITIES, INC. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION 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 net operating income (“NOI”) and funds from operations (“FFO”) as supplemental performance measures. Refer to Non-GAAP Financial Measures in this Item for additional information. OVERVIEW We are a fully integrated, self-administered and self-managed REIT. As of December 31, 2017, we owned and operated, or had an interest in, a portfolio of 350 properties located throughout the United States and Ontario, Canada, including 230 MH communities, 89 RV communities, and 31 properties containing both MH and RV sites. We have been in the business of acquiring, operating, developing, and expanding MH and RV communities since 1975. We lease individual sites with utility access for placement of manufactured homes and RVs to our customers. We are also engaged through SHS in the marketing, selling, and leasing of new and pre-owned homes to current and future residents in our communities. The operations of SHS support and enhance our occupancy levels, property performance, and cash flows. EXECUTIVE SUMMARY 2017 Accomplishments: • Total revenues for 2017 increased 17.9 percent to $982.6 million. • Core FFO for 2017 was $4.17 per diluted share and OP unit, an increase of 10.0 percent over 2016. • Achieved Same Community NOI growth of 6.9 percent. • Gained 2,406 revenue producing sites. • Reached Same Community occupancy of 97.3 percent, excluding approximately 1,800 recently completed but vacant expansion sites. Sold 3,282 homes, an increase of 3.5 percent over 2016. • • Brokered homes sales increased by 21.2 percent to 2,006 in 2017 as compared to 1,655 in 2016. • Reduced net debt leverage ratio to 6.3 at December 31, 2017 compared to 7.5 at December 31, 2016. • Achieved 1-year, 3-year and 5-year total shareholder return of 24.9 percent, 70.4 percent and 187.0 percent, respectively. • Delivered over 2,100 expansion sites in 26 communities. • Closed an underwritten registered public offering for net proceeds over $400.0 million. • Acquired nine communities for total consideration of approximately $145.0 million. Property Operations: Occupancy in our Properties as well as our ability to increase rental rates directly affects revenues. Our revenue streams are predominantly derived from customers renting our sites on a long-term basis. Our Same Community properties continue to achieve revenue and occupancy increases which drive continued NOI growth. We continue to sell homes at a high level in our communities and expect this trend to continue. Portfolio Information: Occupancy % - Total Portfolio - MH and RV blended (1) Occupancy % - Same Community - MH and RV blended (1)(2) Core FFO NOI - Total Portfolio (in thousands) NOI - Same Community (in thousands) $ $ $ Homes Sold Number of Occupied Rental Homes (1) Occupancy percent includes annual RV sites, and excludes transient RV sites. (2) Occupancy percent excludes recently completed but vacant expansion sites. 37 Year Ended December 31, 2017 2016 2015 95.8% 97.3% 4.17 479,662 382,210 3,282 11,074 $ $ $ 96.2% 95.4% 3.79 403,337 357,618 3,172 10,733 $ $ $ 95.0% 94.7% 3.63 335,567 310,890 2,483 10,685 SUN COMMUNITIES, INC. Acquisition Activity: During the past three years, we have completed acquisitions of over 150 properties with over 46,000 sites located in high growth areas and retirement and vacation destinations such as California, Florida, and Eastern coastal areas such as the Jersey Shore and Cape Cod, Massachusetts. We have also expanded into Ontario, Canada, with the Carefree acquisition in 2016. During 2017, we acquired nine communities, as detailed in the table below: Property/Portfolio Location Type Total Consideration (in thousands) Number of sites - MH/ Annual 49’er Village Sunset Lakes Arbor Woods Pismo Dunes Lazy J Ranch Ocean West Caliente Sands Emerald Coast Colony in the Wood Total $ Plymouth, CA Hillsdale, IL Superior Township, MI Pismo Beach, CA Arcata, CA McKinleyville, CA Cathedral City, CA Panama City Beach, FL Port Orange, FL RV RV MH RV MH MH MH MH & RV MH 13,000 8,045 16,943 21,920 14,300 9,673 8,871 19,500 32,478 — — 458 — 220 130 118 37 383 Number of sites - Transient 328 498 — 331 — — — 164 — Expansion Sites — — — — — 4 — 14 — 18 $ 144,730 1,346 1,321 During 2017, we acquired Carolina Pines RV Resort, an undeveloped parcel of land near Myrtle Beach, South Carolina, for $5.9 million. This land parcel has been entitled and zoned to build an 841 site RV resort. Additionally, in December 2017, we acquired 25.0 percent of the land previously under a ground lease at one of our California communities for $4.0 million. Expansion Activity: We have been focused on expansion opportunities adjacent to our existing communities, and we have developed nearly 3,000 sites over the past three years. We have expanded over 2,100 sites at 26 communities in 2017. The total cost to construct the sites was over $66.0 million. We continue to expand our Properties utilizing our inventory of owned and entitled land (approximately 9,600 sites available for development) and expect to construct over 1,700 additional sites in 2018. Capital Activity: In 2017, we closed an underwritten registered public offering of 4,830,000 shares of common stock at a price of $86.00 per share. Proceeds from the offering were $408.9 million after deducting expenses related to the offering, and were used to repay borrowings outstanding on the revolving loan under our senior revolving credit facility, to fund possible future acquisitions and for working capital and general corporate purposes. Refer to Note 9, “Equity and Mezzanine Securities,” of our accompanying Consolidated Financial Statements for further information regarding capital activity. 38 SUN COMMUNITIES, INC. Markets: Our Properties are largely concentrated in Florida, Michigan, Texas and California. We have expanded our market share in California through recent acquisitions and increased our property holdings in other 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 baby boomers 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. The following table identifies our largest markets by total sites: December 31, 2017 December 31, 2016 Major Market Florida Michigan Texas California Ontario, Canada Arizona Indiana New Jersey Ohio Colorado Illinois New York Maine Pennsylvania Maryland Georgia Missouri Delaware Virginia Massachusetts North Carolina South Carolina Wisconsin Minnesota Oregon Iowa Nevada Tennessee Montana Connecticut Number of Properties 123 68 21 27 15 11 11 7 9 8 5 6 6 3 3 3 2 2 4 2 3 1 2 1 2 1 1 1 1 1 Total Sites 43,328 26,137 7,974 6,498 4,882 4,882 3,420 2,917 2,904 2,481 2,150 1,757 1,595 1,277 1,156 1,139 976 916 718 680 672 588 548 475 473 413 324 237 226 149 % of Total Sites Number of Properties Total Sites % of Total Sites 35.5% 21.4% 6.5% 5.3% 4.0% 4.0% 2.8% 2.4% 2.4% 2.0% 1.8% 1.4% 1.3% 1.1% 1.0% 0.9% 0.8% 0.8% 0.6% 0.6% 0.6% 0.5% 0.4% 0.4% 0.4% 0.3% 0.3% 0.2% 0.2% 0.1% 121 67 21 22 15 11 11 7 9 8 4 6 6 3 3 3 2 2 4 2 3 1 2 1 2 1 1 1 1 1 42,823 24,716 36.5% 21.1% 7,593 5,375 4,868 4,614 3,402 3,002 2,913 2,483 1,652 1,717 1,521 1,277 1,215 1,049 976 916 698 680 672 418 548 426 473 413 324 237 226 149 6.5% 4.6% 4.2% 3.9% 2.9% 2.6% 2.5% 2.1% 1.4% 1.5% 1.3% 1.1% 1.0% 0.9% 0.8% 0.8% 0.6% 0.6% 0.6% 0.4% 0.5% 0.4% 0.4% 0.4% 0.3% 0.2% 0.2% 0.1% 350 121,892 341 117,376 39 SUN COMMUNITIES, INC. NON-GAAP FINANCIAL MEASURES In addition to the results reported in accordance with GAAP in our “Results of Operations” below, we have provided information regarding net operating income (“NOI”) and funds from operations (“FFO”) as supplemental performance measures. We believe NOI and FFO are appropriate measures given their wide use by and relevance to investors and analysts following the real estate industry. NOI provides a measure of rental operations and does not factor in depreciation, amortization and non-property specific expenses such as general and administrative expenses. FFO, reflecting the assumption that real estate values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation/amortization of real estate assets. In addition, NOI and FFO are commonly used in various ratios, pricing multiples/yields and returns and valuation calculations used to measure financial position, performance and value. NOI is derived from 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 costs. Therefore, NOI is a measure of the operating performance of the properties of the Company rather than of the Company overall. FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as net income (loss) computed in accordance with 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. The Company 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 gain and loss items that management considers unrelated to the operational and financial performance of our core business (“Core FFO”). 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. 40 SUN COMMUNITIES, INC. RESULTS OF OPERATIONS We report operating results under two segments: Real Property Operations and Home Sales and Rentals. The Real Property Operations segment owns, operates, develops, or has an interest in, a portfolio of MH and RV communities throughout the U.S. and in Canada, and is in the business of acquiring, operating, and expanding MH and RV communities. The Home Sales and Rentals segment offers MH and RV park model sales and leasing services to tenants and prospective tenants of our communities. We evaluate segment operating performance based on NOI and gross profit. Refer to Note 11, “Segment Reporting,” in our accompanying Consolidated Financial Statements for additional information. SUMMARY STATEMENTS OF OPERATIONS The following table summarizes our consolidated financial results and reconciles Net income attributable to Sun Communities, Inc. common stockholders to NOI for the years ended December 31, 2017, 2016, and 2015 (in thousands): Net income attributable to Sun Communities, Inc. common stockholders $ Other revenues Home selling expenses General and administrative Transaction costs Catastrophic weather related charges, net Depreciation and amortization Loss on extinguishment of debt Interest expense Other income / (expense), net Gain on disposition of properties, net Current tax expense Deferred tax benefit / (expense) Income from affiliate transactions Preferred return to preferred OP units Amounts attributable to noncontrolling interests Preferred stock distributions Preferred stock redemption costs NOI/Gross Profit Real Property NOI Rental Program NOI Home Sales NOI/Gross profit Ancillary NOI/Gross profit Site rent from Rental Program (included in Real Property NOI) (1) NOI/Gross profit $ $ $ Years Ended 2017 2016 65,021 (24,874) 12,457 74,711 9,801 8,352 261,536 6,019 130,242 (8,982) — 446 (582) — 4,581 5,055 7,162 $ $ 17,369 (21,150) 9,744 64,087 31,914 1,172 221,770 1,127 122,315 4,676 — 683 (400) (500) 5,006 150 8,946 — 550,945 $ — 466,909 $ 2015 137,325 (18,157) 7,476 47,455 17,803 — 177,637 2,800 110,878 — (125,376) 158 1,000 (7,500) 4,973 10,054 13,793 4,328 384,647 Years Ended 2017 479,662 92,382 32,294 10,440 (63,833) 550,945 $ $ 2016 403,337 85,086 30,087 9,999 (61,600) 466,909 $ $ 2015 335,567 83,232 20,787 7,013 (61,952) 384,647 (1) 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 the Real Property Operations segment. 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 Rental Program and financial impact on our operations. 41 SUN COMMUNITIES, INC. COMPARISON OF THE YEARS ENDED DECEMBER 31, 2017 AND 2016 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, 2017 and 2016: Financial Information (in thousands) Income from Real Property Property operating expenses: Payroll and benefits Legal, taxes, and insurance Utilities Supplies and repair Other Real estate taxes Year Ended December 31, 2017 $ 742,228 2016 $ 620,917 Change $ 121,311 % Change 19.5% 67,075 7,264 83,550 25,871 26,518 52,288 56,744 5,941 67,495 20,732 22,362 44,306 10,331 1,323 16,055 5,139 4,156 7,982 44,986 18.2% 22.3% 23.8% 24.8% 18.6% 18.0% 20.7% 18.9% Property operating expenses 262,566 217,580 Real Property NOI $ 479,662 $ 403,337 $ 76,325 Other Information Number of properties MH occupancy RV occupancy MH & RV blended occupancy (1) As of December 31, 2017 350 2016 341 Change 9 94.6% 100.0% 95.8% 96.2% (0.4)% Sites available for development 9,617 10,337 (720) Monthly base rent per site - MH Monthly base rent per site - RV (2) Monthly base rent per site - Total (1) Overall occupancy percent includes MH and annual RV sites, and excludes transient RV sites. (2) Monthly base rent pertains to annual RV sites and excludes transient RV sites. $ $ $ 533 439 512 $ $ $ 515 420 495 $ $ $ 18 19 17 The $76.3 million increase in Real Property NOI consists of $51.7 million from recently acquired properties and $24.6 million from our Same Community properties as detailed below. 42 REAL PROPERTY OPERATIONS – SAME COMMUNITY SUN COMMUNITIES, INC. A key management tool used when evaluating performance and growth of our properties is a comparison of Same Communities. Same Communities consist of properties owned and operated throughout 2017 and 2016. The Same Community data may change from time-to-time depending on acquisitions, dispositions, management discretion, significant transactions, or unique situations. The Same Community data in this Form 10-K includes all properties which we have owned and operated continuously since January 1, 2016. All communities from the American Land Lease portfolio acquisition are included within Same Communities. In order to evaluate the growth of the Same Communities, management has classified certain items differently than our GAAP statements. The reclassification difference between our GAAP statements and our Same Community portfolio is the reclassification of water and sewer revenues from income from real property to utilities. A significant portion of our utility charges are re-billed to our residents. We have reclassifed $26.9 million and $25.8 million for the year ended December 31, 2017 and 2016, respectively, to reflect the utility expenses associated with our Same Community portfolio net of recovery. The following tables reflect certain financial and other information for our Same Communities as of and for the years ended December 31, 2017 and 2016: Financial Information (in thousands) Income from Real Property Property operating expenses: Payroll and benefits Legal, taxes, and insurance Utilities Supplies and repair (1) Other Real estate taxes Property operating expenses Real Property NOI Other Information Number of properties MH occupancy (2) RV occupancy (2) MH & RV blended occupancy (2) Year Ended December 31, 2017 $ 533,942 2016 $ 503,770 45,240 5,562 29,726 19,109 13,696 38,399 151,732 $ 382,210 43,078 5,174 28,475 18,729 13,988 36,708 146,152 $ 357,618 Change $ 30,172 % Change 6.0 % 2,162 388 1,251 380 (292) 1,691 5,580 $ 24,592 5.0 % 7.5 % 4.4 % 2.0 % (2.1)% 4.6 % 3.8 % 6.9 % As of December 31, 2017 231 2016 231 Change — % Change — % 96.9% 100.0% 97.3% 95.4% (3) 1.9% Sites available for development 5,087 6,263 (1,176) (18.8)% Monthly base rent per site - MH Monthly base rent per site - RV (4) Monthly base rent per site - Total $ $ $ 518 459 510 $ $ $ 500 441 492 $ $ $ 18 18 18 3.6 % (5) 4.2 % (5) 3.6 % (5) (1) Year ended December 31, 2016 excludes $0.1 million of expenses incurred for recently acquired properties to bring the properties up to Sun’s operating standards. These costs did not meet the Company’s capitalization policy. (2) The Same Community occupancy percentage for 2017 is derived from 80,407 developed sites, of which 78,257 were occupied. The number of developed (3) sites excludes RV transient sites and approximately 1,800 recently completed but vacant MH expansion sites. The Same Community occupancy percentage for 2016 has been adjusted to reflect incremental growth period-over-period from filled expansion sites and the conversion of transient RV sites to annual RV sites. (4) Monthly base rent pertains to annual RV sites and excludes transient RV sites. (5) Calculated using actual results without rounding. The 6.9 percent growth in NOI is primarily due to a 6.0 percent increase in Income from real property. The 6.0 percent increase in Income from real property is primarily due to a 1.9 percent increase in MH & RV blended occupancy, a 3.6 percent increase in total monthly base rent per site and a 0.5 percent increase in transient and other revenue. The increase in Income from real property was partially offset by a 3.8 percent increase in Property operating expenses compared to 2016, which was primarily due to higher payroll and benefits, real estate taxes and utilities in 2017. 43 SUN COMMUNITIES, INC. RENTALS AND HOME SALES The following table reflects certain financial and other information for our Rental Program as of and for the years ended December 31, 2017 and 2016 (in thousands, except for statistical information): Financial Information Rental home revenue Site rent from Rental Program (1) Rental Program revenue Expenses Commissions Repairs and refurbishment Taxes and insurance Marketing and other Rental Program operating and maintenance Rental Program NOI Other Information Number of occupied rentals, end of period Investment in occupied rental homes, end of period Number of sold rental homes Weighted average monthly rental rate, end of period Year Ended December 31, $ 2017 50,549 63,833 114,382 $ 2016 47,780 61,600 109,380 2,620 9,864 6,102 3,414 22,000 92,382 $ $ 2,242 12,825 5,734 3,493 24,294 85,086 11,074 $ 494,945 10,733 $ 457,691 1,168 $ 917 $ 1,089 882 Change % Change $ $ $ $ 2,769 2,233 5,002 378 (2,961) 368 (79) (2,294) 7,296 341 37,254 79 35 5.8 % 3.6 % 4.6 % 16.9 % (23.1)% 6.4 % (2.3)% (9.4)% 8.6 % 3.2 % 8.1 % 7.3 % 4.0 % (1) 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 the Real Property Operations segment. 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 assess the overall growth and performance of Rental Program and financial impact to our operations. Rental Program NOI increased by 8.6 percent compared to 2016. The increase is due to a 4.6 percent increase in Rental Program revenue attributable to a 4.0 percent increase in weighted average monthly rental rates and a 3.2 percent increase in the number of occupied rentals, combined with an overall decrease in Rental Program operating and maintenance expenses. The 9.4 percent decrease in Rental Program operating and maintenance expenses is primarily due to lower Repairs and refurbishment expenses in 2017 as compared to 2016. The reduction in Repairs and refurbishment expenses is primarily due to our continuing investment in occupied rentals and replacement of older homes in the Rental Program with newer ones that do not require the same level of repairs and refurbishments. 44 SUN COMMUNITIES, INC. 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, 2017 and 2016 (in thousands, except for average selling prices and statistical information): Financial Information New home sales Pre-owned home sales Revenue from homes sales New home cost of sales Pre-owned home cost of sales Cost of home sales NOI / Gross profit Gross profit – new homes Gross margin % – new homes Average selling price – new homes Gross profit – pre-owned homes Gross margin % – pre-owned homes Average selling price – pre-owned homes Statistical Information Home sales volume: New home sales Pre-owned home sales Total homes sold Year Ended December 31, 2017 $ 36,915 2016 $ 30,977 Change $ 5,938 90,493 127,408 31,578 63,536 95,114 $ 32,294 79,530 110,507 26,802 53,618 80,420 $ 30,087 10,963 16,901 4,776 9,918 14,694 $ 2,207 % Change 19.2% 13.8% 15.3% 17.8% 18.5% 18.3% 7.3% $ 5,337 $ 4,175 $ 1,162 27.8% 14.5% 13.5% 1.0 % $ 101,975 $ 94,156 $ 7,819 $ 26,957 $ 25,912 $ 1,045 29.8% 32.6% (2.8)% 8.3% 4.0% $ 30,991 $ 27,974 $ 3,017 10.8% 362 2,920 3,282 329 2,843 3,172 33 77 110 10.0% 2.7% 3.5% Gross profit for new and pre-owned home sales increased $1.2 million and $1.0 million, respectively, in 2017 as compared to 2016. The increases for both new and pre-owned home sales are primarily the result of higher home sales volumes combined with higher average selling prices in 2017 as compared to 2016. 45 SUN COMMUNITIES, INC. OTHER INCOME STATEMENT ITEMS The following table summarizes other income and expenses for the years ended December 31, 2017 and 2016 (amounts in thousands): Year Ended December 31, 2017 2016 Change % Change Ancillary revenues, net Interest income Brokerage commissions and other revenues, net Home selling expenses General and administrative expenses Transaction costs Catastrophic weather related charges, net Depreciation and amortization Loss on extinguishment of debt Interest expense Other income / (expense), net Current tax expense Deferred tax benefit Income from affiliate transactions $ $ $ $ $ $ $ $ $ $ $ $ $ $ 10,440 21,180 3,694 12,457 74,711 9,801 8,352 261,536 6,019 130,242 $ $ $ $ $ $ $ $ $ $ 8,982 $ (446) $ $ 582 — $ 9,999 18,113 3,037 9,744 64,087 31,914 1,172 221,770 1,127 $ $ $ $ $ $ $ $ $ 122,315 $ (4,676) $ (683) $ $ 400 500 $ 441 3,067 657 2,713 10,624 (22,113) 7,180 39,766 4,892 7,927 13,658 237 182 (500) 4.4 % 16.9 % 21.6 % 27.8 % 16.6 % (69.3)% 612.6 % 17.9 % 434.1 % 6.5 % 292.1 % (34.7)% 45.5 % (100.0)% Interest income - increased primarily due to an increase in our installment notes receivable, partially offset by a decrease in our collateralized receivables, as compared to December 31, 2016. Brokerage commissions and other revenues, net - increased due to the sale of 2,006 brokered homes in 2017 as compared to 1,655 in 2016, a 21.2 percent increase. Home selling expenses - increased primarily due to higher volumes and higher weighted average selling prices for both new and used homes in 2017, which resulted in higher commissions. General and administrative expenses - increased primarily due to additional employee related costs as headcount increased in connection with our growth through acquisitions. Transaction costs - relate to diligence and other expenses incurred in connection with our acquisitions. These costs were significantly lower in 2017 as compared to 2016, due to the acquisition of Carefree in 2016. Refer to Note 2, “Real Estate Acquisitions and Dispositions,” in our accompanying Consolidated Financial Statements for additional information. Catastrophic weather related charges, net - In September 2017, Hurricane Irma impacted 121 of our communities in Florida and three in Georgia. We recognized charges totaling $31.7 million comprised of $21.3 million for debris and tree removal, common area repairs and minor flooding damage, as well as $10.4 million for impaired assets at the three Florida Keys communities. These charges were partially offset by estimated insurance recoveries of $23.7 million. In 2016, Catastrophic weather related charges, net were primarily attributable to debris and tree removal, common area repairs and minor flooding damage from hurricanes Hermine and Matthew. Depreciation and amortization - increased as a result of our acquisition of Carefree in 2016, as well as other properties in the second half of 2016 and during 2017. Refer to Note 2, “Real Estate Acquisitions and Dispositions,” of our accompanying Consolidated Financial Statements for additional information. Loss on extinguishment of debt - in 2017 of $6.0 million was recognized in connection with defeasement or repayment of collateralized term loans totaling $61.4 million. In 2016, the loss on extinguishment of debt of $1.1 million was in connection with repayment of a total of $79.1 million of collateralized term loans. Refer to Note 8, “Debt and Lines of Credit,” in our accompanying Consolidated Financial Statements for additional information. 46 SUN COMMUNITIES, INC. Interest expense - increased primarily due to 2017 including a full year of interest expense from incremental borrowings of $338.0 million, $405.0 million and $139.0 million in connection with our Fannie Mae Financing, NML Financing and Freddie Mac Financing arrangements, respectively. The $338.0 million and $405.0 million borrowings were entered into in June 2016, and the $139.0 million was entered into in September 2016. Refer to Note 8, “Debt and Lines of Credit,” in our accompanying Consolidated Financial Statements for additional information. Other income / (expense), net - in 2017 consisted of foreign currency translation gains of $5.9 million and a contingent liability remeasurement gain of $3.0 million, compared to 2016 which consisted of foreign currency translation losses of $5.0 million and a contingent liability remeasurement loss of $0.2 million, partially offset by a $0.5 million gain related to the acquisition of a community. Income from affiliate transactions - of $0.5 million in 2016 was due to the sale of our entire interest in Origen Financial, Inc. Prior to the sale, the carrying value of our investment was zero. 47 SUN COMMUNITIES, INC. COMPARISON OF THE YEARS ENDED DECEMBER 31, 2016 AND 2015 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, 2016 and 2015: Financial Information (in thousands) Income from Real Property Property operating expenses: Payroll and benefits Legal, taxes, and insurance Utilities Supplies and repair Other Real estate taxes Property operating expenses Year Ended December 31, 2016 $ 620,917 2015 $ 506,078 Change $ 114,839 % Change 22.7 % 56,744 5,941 67,495 20,732 22,362 44,306 217,580 40,207 7,263 53,112 19,075 16,140 34,714 170,511 16,537 (1,322) 14,383 1,657 6,222 9,592 47,069 41.1 % (18.2)% 27.1 % 8.7 % 38.6 % 27.6 % 27.6 % 20.2 % Real Property NOI $ 403,337 $ 335,567 $ 67,770 Other Information Number of properties MH occupancy RV occupancy MH & RV blended occupancy (1) As of December 31, 2016 341 2015 231 Change 110 95.1% 100.0% 96.2% 95.0% 1.2% Sites available for development 10,337 7,181 3,156 Monthly base rent per site - MH Monthly base rent per site - RV (2) Monthly base rent per site - Total (1) Overall occupancy (percent) includes MH and annual RV sites, and excludes transient RV sites. (2) Monthly base rent pertains to annual RV sites and excludes transient RV sites. $ $ $ 515 416 495 $ $ $ 484 423 477 $ $ $ 31 (7) 18 The 20.2 percent growth in Real Property NOI consists of $45.7 million from newly acquired properties and $22.0 million from Same Community properties as detailed below. 48 REAL PROPERTY OPERATIONS – SAME COMMUNITY SUN COMMUNITIES, INC. The following tables reflect certain financial and other information for our Same Communities, which includes all properties we have owned and operated continuously since January 1, 2015 as of and for the years ended December 31, 2016 and 2015: Financial Information (in thousands) Income from Real Property Property operating expenses: Payroll and benefits Legal, taxes, and insurance Utilities Supplies and repair (1) Other Real estate taxes Property operating expenses Real Property NOI Other Information Number of properties MH occupancy (2) RV occupancy (2) MH & RV blended occupancy (2) (3) Year Ended December 31, 2016 $ 466,967 2015 $ 440,202 Change % Change $ 26,765 6.1 % 38,688 5,398 26,161 16,617 12,945 34,239 134,048 $ 332,919 36,465 6,633 25,674 17,154 11,823 31,563 129,312 $ 310,890 $ 2,223 (1,235) 487 (537) 1,122 2,676 4,736 22,029 6.1 % (18.6)% 1.9 % (3.1)% 9.5 % 8.5 % 3.7 % 7.1 % As of December 31, 2015 2016 219 219 Change — % Change — % 96.0% 100.0% 96.6% 94.7% 1.9% Sites available for development 6,542 5,906 636 10.8 % Monthly base rent per site - MH Monthly base rent per site - RV (4) 3.2 % Monthly base rent per site - Total (1) Year ended December 31, 2015 excludes $2.8 million of expenses incurred for recently acquired properties to bring the properties up to Sun’s operating 3.3 % 3.1 % 489 474 482 498 423 436 16 13 15 $ $ $ $ $ $ $ $ $ standards. These costs did not meet the Company’s capitalization policy. (2) Overall occupancy (percent) includes MH and annual RV sites, and excludes recently completed but vacant expansion sites and transient RV sites. (3) Overall occupancy (percent) for 2015 has been adjusted to reflect incremental growth year over year from filled expansion sites and the conversion of transient RV sites to annual RV sites. (4) Monthly base rent pertains to annual RV sites and excludes transient RV sites. The 7.1 percent growth in NOI is primarily due to increased revenues of $26.8 million partially offset by additional expenses of $4.7 million. Income from real property revenue consists of MH and RV site rent, and miscellaneous other property revenues. The 6.1 percent growth in income from real property was due to a combination of factors. Revenue from our MH and RV portfolio increased $24.9 million due to monthly base rent per site increases of 3.2 percent, a 1.9 percent increase in occupancy, and the increased number of occupied vacation rental sites. Additionally, other revenues increased $1.8 million primarily due to increases in property tax revenues, trash income, cable television royalties, and month-to-month fees. Property operating expenses increased approximately $4.7 million, or 3.7 percent, compared to 2015. The increase is primarily due to increased real estate taxes of $2.7 million and increased payroll and benefits of $2.2 million, partially offset by reduced legal, tax, and insurance expenses. 49 SUN COMMUNITIES, INC. RENTALS AND HOME SALES The following table reflects certain financial and other information for our Rental Program as of and for the years ended December 31, 2016 and 2015 (in thousands, except for statistical information): 3.3 % (0.6)% 1.1 % (30.3)% 4.1 % 1.7 % (7.5)% (2.7)% 2.2 % 0.5 % 2.0 % 19.9 % 2.8 % Financial Information Rental home revenue Site rent from Rental Program (1) Rental Program revenue Expenses Commissions Repairs and refurbishment Taxes and insurance Marketing and other Rental Program operating and maintenance Year Ended December 31, $ 2016 47,780 61,600 109,380 $ 2015 46,236 61,952 108,188 $ 2,242 12,825 5,734 3,493 24,294 3,216 12,326 5,638 3,776 24,956 Rental Program NOI $ 85,086 $ 83,232 $ 1,544 (352) 1,192 (974) 499 96 (283) (662) 1,854 Change % Change Other Information Number of occupied rentals, end of period Investment in occupied rental homes, end of period Number of sold rental homes Weighted average monthly rental rate, end of period 10,733 $ 457,691 10,685 $ 448,837 1,089 $ 882 $ 908 858 $ $ 48 8,854 181 24 (1) 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 the Real Property Operations segment. 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 assess the overall growth and performance of Rental Program and financial impact to our operations. The 2.2 percent growth in Rental Program NOI is primarily due to a 2.8 percent increase in weighted average monthly rental rates. Additionally, operating and maintenance expenses decreased by $0.7 million, primarily as a result of a decline in commissions of $1.0 million that was partially offset by an increase in repairs and refurbishment. 50 SUN COMMUNITIES, INC. The following table reflects certain financial and statistical information for our Home Sales Program for the years ended December 31, 2016 and 2015 (in thousands, except for average selling prices and statistical information): Financial Information New home sales Pre-owned home sales Revenue from homes sales New home cost of sales Pre-owned home cost of sales Cost of home sales NOI / Gross profit Gross profit – new homes Gross margin % – new homes Average selling price – new homes Gross profit – pre-owned homes Gross margin % – pre-owned homes Average selling price – pre-owned homes Statistical Information Home sales volume: New home sales Pre-owned home sales Total homes sold Year Ended December 31, 2016 $ 30,977 79,530 110,507 26,802 53,618 80,420 2015 $ 22,208 57,520 Change $ 8,769 22,010 79,728 18,620 40,321 58,941 30,779 8,182 13,297 21,479 $ 30,087 $ 20,787 $ 9,300 $ 4,175 $ 3,588 $ 13.5% 16.2% 587 (2.7)% % Change 39.5% 38.3% 38.6% 43.9% 33.0% 36.4% 44.7% 16.4% $ 94,156 $ 81,346 $ 12,810 15.8% $ 25,912 $ 17,199 $ 8,713 50.7% 32.6% 29.9% 2.7 % $ 27,974 $ 26,027 $ 1,947 7.5% 329 2,843 3,172 273 2,210 2,483 56 633 689 20.5% 28.6% 27.8% Gross profit for new home sales increased $0.6 million, or 16.4 percent, primarily in connection with an increase in new home sales volumes of 20.5 percent, that was partially offset by higher cost of sales for new homes. Total gross profit for pre-owned home sales increased $8.7 million, primarily due to increased sales volumes of 28.6 percent and a 17.1 percent increase in average gross profit per home sale. 51 SUN COMMUNITIES, INC. OTHER INCOME STATEMENT ITEMS The following table summarizes other income and expenses for the years ended December 31, 2016 and 2015 (amounts in thousands): Year Ended December 31, 2016 2015 Change % Change Ancillary revenues, net Interest income Brokerage commissions and other revenues, net Home selling expenses General and administrative expenses Transaction costs Catastrophic weather related charges, net Depreciation and amortization Loss on extinguishment of debt Interest expense Other income / (expense), net Gain on disposition of properties, net Current tax expense Deferred tax benefit / (expense) Income from affiliate transactions Preferred stock redemption costs $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 9,999 18,113 3,037 9,744 64,087 31,914 1,172 221,770 $ $ $ $ $ $ $ $ 1,127 122,315 $ $ (4,676) $ — $ (683) $ $ 400 $ 500 — $ 7,013 15,938 2,219 7,476 47,455 17,803 $ $ $ $ $ $ — $ $ 177,637 2,800 110,878 $ $ — $ 125,376 $ (158) $ (1,000) $ $ 7,500 $ 4,328 2,986 2,175 818 2,268 16,632 14,111 1,172 44,133 (1,673) 11,437 (4,676) (125,376) (525) 1,400 (7,000) (4,328) 42.6 % 13.7 % 36.9 % 30.3 % 35.1 % 79.3 % N/A 24.8 % (59.8)% 10.3 % N/A (100.0)% 332.3 % (140.0)% (93.3)% (100.0)% Ancillary revenues, net - increased primarily due to an increase of $3.0 million in vacation rental income at RV resorts. Interest income - increased primarily due to an increase in interest income on notes and collateralized receivables totaling $2.1 million. Brokerage commissions and other revenues, net - increased primarily due to a higher number of brokered homes sold in 2016 as compared to 2015. Home selling expenses - increased $2.3 million primarily due to an increase in commissions consistent with an increase in the number of homes sold in 2016 as compared to 2015. General and administrative expenses - increased $16.6 million primarily due to additional employee related costs as headcount increased in connection with the Company’s growth through significant acquisitions and increased consulting and implementation costs for technology and efficiency related initiatives. Transaction costs - increased primarily due to due diligence and other transaction costs in relation to our acquisitions. Refer to Note 2, “Real Estate Acquisitions and Dispositions,” in our accompanying Consolidated Financial Statements for additional information. Catastrophic weather related charges, net - in 2016 included costs of $1.2 million related to hurricanes Hermine and Matthew. Depreciation and amortization - expenses increased $44.1 million primarily as a result of additional depreciation and amortization related to our newly acquired properties. Refer to Note 2, “Real Estate Acquisitions and Dispositions,” in our accompanying Consolidated Financial Statements for additional information. Loss on extinguishment of debt - decreased $1.7 million as compared to 2015. During 2016, we repaid collateralized term loans that were due to mature during 2017. Refer to Note 8, “Debt and Lines of Credit,” in our accompanying Consolidated Financial Statements for additional information. 52 SUN COMMUNITIES, INC. Interest expense - increased $11.4 million primarily due to our borrowing $338.0 million under a senior secured credit facility and entering into three mortgage loans totaling $405.0 million, both in June 2016. Refer to Note 8, “Debt and Lines of Credit,” in our accompanying Consolidated Financial Statements for additional information. Other income / (expense), net - in 2016 includes the impact of foreign currency translation losses of $5.0 million, and contingent liability revaluation expense of $0.2 million, partially offset by a $0.5 million gain related to the acquisition of Adirondack Gateway. Gain on disposition of properties, net - decreased $125.4 million as we recorded no gains or losses during 2016, whereas we disposed of twenty communities in 2015. Deferred tax benefit (expense) - was favorable by $1.4 million in 2016 as compared to 2015. During 2016, we recognized a deferred tax benefit in connection with the Carefree acquisition. In 2015, we increased the valuation allowance on SHS loss carryforwards by $1.0 million. Income from affiliate transactions - was $7.5 million in 2015 due to a distribution to us from Origen Financial, Inc. (“Origen.”) In 2016, we sold our entire interest in Origen consisting of 5,000,000 shares for proceeds of $0.5 million. The carrying value of our investment in Origen prior to the sale was zero. Preferred stock redemption costs - were $4.3 million in 2015 as a result of a repurchase agreement with certain holders of the Company’s Series A-4 preferred stock. There were no such redemptions in 2016. 53 SUN COMMUNITIES, INC. The following table reconciles Net income attributable to Sun Communities, Inc. common stockholders to FFO for the years ended December 31, 2017, 2016, and 2015 (in thousands, except per share amounts): Net income attributable to Sun Communities, Inc. common stockholders Adjustments: Depreciation and amortization Amounts attributable to noncontrolling interests Preferred return to preferred OP units Preferred distribution to Series A-4 Preferred Stock Gain / (loss) on disposition of properties, net Gain / (loss) on disposition of assets, net FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) Adjustments: Transaction costs Other acquisition related costs (2) Income from affiliate transactions Loss on extinguishment of debt Catastrophic weather related costs, net Loss of earnings - catastrophic weather related (3) Other income, net Debt premium write-off Deferred tax benefit / (expense) Ground lease intangible write-off Preferred stock redemption costs Year Ended December 31, 2017 65,021 2016 17,369 2015 $ 137,325 $ $ 262,211 4,535 2,320 2,107 — (16,075) 178,048 221,576 (41) 9,644 2,612 2,462 — — — (125,376) (10,125) (15,713) $ 320,119 $ 225,653 $ 192,128 9,801 2,810 — 6,019 8,352 292 (8,982) (1,343) (582) 898 — 31,914 3,328 (500) 1,127 1,172 — 4,676 (839) (400) — — 17,803 — (7,500) 2,800 — — — — 1,000 — 4,328 Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) $ 337,384 $ 266,131 $ 210,559 Weighted average common shares outstanding - basic: 76,084 65,856 53,686 Add: Common stock issuable upon conversion of stock options Restricted stock Common OP units Common stock issuable upon conversion of Series A-1 preferred OP units Common stock issuable upon conversion of Series A-3 preferred OP units Common stock issuable upon conversion of Series A-4 preferred OP units Weighted average common shares outstanding - fully diluted 2 625 2,756 869 75 585 80,996 8 457 2,844 925 75 — 70,165 16 411 2,803 988 75 — 57,979 FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per share - fully diluted Core FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per share - fully diluted $ $ 3.95 4.17 $ $ 3.22 3.79 $ $ 3.31 3.63 (1) The effect of certain anti-dilutive convertible securities is excluded from these items. (2) These costs represent the first year expense incurred to bring acquired properties up to the Company's operating standards, including items such as tree trimming and painting costs that did not meet the Company's capitalization policy. These costs were included as an FFO adjustment for the year ended December 31, 2016 and 2017. Had a similar adjustment been made in 2015, FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities per share excluding certain items would have been $3.68 for the year ended December 31, 2015. (3) Adjustment represents estimated loss of earnings in excess of the applicable business interruption deductible at our three Florida Keys communities that were impaired by Hurricane Irma. The Company is actively working with its insurer on the related claims, but has not yet received any advance for the expected recovery of lost earnings. 54 SUN COMMUNITIES, INC. LIQUIDITY AND CAPITAL RESOURCES Our principal liquidity demands have historically been, and are expected to continue to be, distributions to our stockholders and the unit holders of the Operating Partnership, capital improvement of properties, the purchase of new and pre-owned homes, property acquisitions, development and expansion of properties, and debt repayment. During the year ended December 31, 2017, we acquired nine communities. Refer to Note 2, “Real Estate Acquisitions and Dispositions” in our accompanying Consolidated Financial Statements for additional information regarding our acquisitions in 2017. Subject to market conditions, we intend to continue to look for opportunities to expand our development pipeline and acquire existing communities. We finance acquisitions through available cash, secured financing, draws on our lines of credit, the assumption of existing debt on properties, and the issuance of equity securities. We will continue to evaluate acquisition opportunities that meet our criteria. We also intend to continue to strengthen our capital and liquidity positions by focusing on our core fundamentals, which are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs. We intend to meet our liquidity requirements through available cash balances, cash flows generated from operations, draws on our lines of credit, and the use of debt and equity offerings under our shelf registration statement. Refer to Note 8, “Debt and Lines of Credit” and Note 9, “Equity and Mezzanine Securities” in our accompanying Consolidated Financial Statements for additional information. Our capital expenditures include expansion and development, lot modifications, recurring capital expenditures and rental home purchases. For the years ended December 31, 2017 and 2016, expansion and development activities of $88.3 million and $48.0 million, respectively, related to costs consisting primarily of construction of sites and other costs necessary to complete home site improvements. For the years ended December 31, 2017 and 2016, lot modification expenditures were $18.1 million and $19.0 million, respectively. These expenditures improve asset quality in our communities and are incurred when an existing home is removed and the site is prepared for a new home (more often than not, a multi-sectional home). These activities, which are mandated by strict manufacturer’s installation requirements and state building codes, include items such as new foundations, driveways, and utility upgrades. For the years ended December 31, 2017 and 2016, recurring capital expenditures were $14.2 million and $17.6 million, respectively, related to our continued commitment to upkeep of our properties. We invested $17.0 million in the acquisition of homes intended for the Rental Program. Expenditures for 2018 will depend upon the condition of the markets for repossessions and new home sales, as well as rental homes. We finance new home purchases with a $12.0 million manufactured home floor plan facility. Our ability to purchase homes for sale or rent may be limited by cash received from third-party financing of our home sales, available manufactured home floor plan financing and working capital available on our lines of credit. Our cash flow activities are summarized as follows (in thousands): Net Cash Provided by Operating Activities Net Cash Used for Investing Activities Net Cash Provided by Financing Activities Effect of Exchange Rate on Cash and Cash Equivalents Year Ended December 31, 2017 2016 2015 $ $ $ $ 261,750 $ (401,642) $ $ 141,557 $ 298 238,693 $ (1,614,512) $ $ 1,338,970 (73) $ 182,263 (413,184) 192,548 — Cash and cash equivalents increased by $1.9 million from $8.2 million as of December 31, 2016, to $10.1 million as of December 31, 2017. Operating Activities Net cash provided by operating activities increased by $23.1 million from $238.7 million for the year ended December 31, 2016 to $261.8 million for the year ended December 31, 2017. 55 SUN COMMUNITIES, INC. Our net cash flows provided by operating activities from continuing operations may be adversely impacted by, among other things: (a) the market and economic conditions in our current markets generally, and specifically in metropolitan areas of our current markets; (b) lower occupancy and rental rates of our properties; (c) increased operating costs, such as wage and benefit costs, insurance premiums, real estate taxes and utilities, that cannot be passed on to our tenants; (d) decreased sales of manufactured homes; and (e) current volatility in economic conditions and the financial markets. See “Risk Factors” in Part I, Item 1A in this Annual Report on Form 10-K. Investing Activities Net cash used for investing activities was $401.6 million for the year ended December 31, 2017, compared to $1.6 billion for the year ended December 31, 2016. Financing Activities Net cash provided by financing activities was $141.6 million for the year ended December 31, 2017, compared to $1.3 billion for the year ended December 31, 2016. Refer to Note 8, “Debt and Lines of Credit” and Note 9, “Equity and Mezzanine Securities” in our accompanying Consolidated Financial Statements for additional information. Financial Flexibility In July 2017, we entered into a new at the market sales agreement (the “Sales Agreement”) with BMO Capital Markets Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Robert W. Baird & Co. Incorporated, Fifth Third Securities, Inc., RBC Capital Markets, LLC, BTIG, LLC, Jefferies LLC, Credit Suisse Securities (USA) LLC and Samuel A. Ramirez & Company, Inc. (each, a “Sales Agent;” collectively, the “Sales Agents”), whereby we may offer and sell shares of our common stock, having an aggregate offering price of up to $450.0 million, from time to time through the Sales Agents. The Sales Agents are entitled to compensation in an agreed amount not to exceed 2.0 percent of the gross price per share for any shares sold from time to time under the Sales Agreement. Concurrent with the entry in the Sales Agreement, we terminated our previous sales agreement which had an aggregate offering price of up to $250.0 million (the “Prior Agreement”). In April 2017, we amended and restated our credit agreement (the “A&R Credit Agreement”) with Citibank, N.A. (“Citibank”) and certain other lenders. Under the A&R Credit Agreement, we have a senior revolving credit facility with Citibank and certain other lenders in the amount of $650.0 million, comprised of a $550.0 million revolving loan and a $100.0 million term loan (the “A&R Facility”). The A&R Credit Agreement has a four-year term ending April 25, 2021, which can be extended for two additional six-month periods at our option, subject to the satisfaction of certain conditions as defined in the credit agreement. The A&R Credit Agreement also provides for, subject to the satisfaction of certain conditions, additional commitments in an amount not to exceed $350.0 million. If additional borrowings are made pursuant to any such additional commitments, the aggregate borrowing limit under the A&R Facility may be increased up to $1.0 billion. The A&R Facility bears interest at a floating rate based on the Eurodollar rate plus a margin that is determined based on our leverage ratio calculated in accordance with the A&R Credit Agreement, which margin can range from 1.35 percent to 2.20 percent for the revolving loan and 1.30 percent to 2.15 percent for the term loan. As of December 31, 2017, the margin on our leverage ratio was 1.35 percent and 1.30 percent on the revolving and term loans, respectively. We had $37.8 million in borrowings on the revolving loan and no borrowings on the term loan totaling $37.8 million as of December 31, 2017, with a weighted average interest rate of 2.79 percent. The A&R Facility replaced our $450.0 million credit facility (the “Previous Facility”), which was scheduled to mature on August 19, 2019. At the time of closing of the A&R Facility, there were $220.8 million in borrowings under the Previous Facility. At December 31, 2016, under the Previous Facility, we had $42.3 million in borrowings on the revolving loan and $58.0 million in borrowings on the term loan totaling $100.3 million with a weighted average interest rate of 2.14 percent. At December 31, 2017 and December 31, 2016, approximately $1.3 million and $4.6 million of availability was used to back standby letters of credit. Pursuant to the terms of the A&R Facility, we are subject to various financial and other covenants. We are currently in compliance with these covenants. The most restrictive financial covenants for the A&R Facility are as follows: 56 SUN COMMUNITIES, INC. Covenant Maximum Leverage Ratio Minimum Fixed Charge Coverage Ratio Minimum Tangible Net Worth (in thousands) Maximum Dividend Payout Ratio Requirement < 65.0% > 1.40 >$2,513,492 < 95.0% As of 12/31/17 34.7% 2.62 $3,949,597 63.0% We anticipate meeting our long-term liquidity requirements, such as scheduled debt maturities, large property acquisitions, expansion and development of communities, and Operating Partnership unit redemptions through the issuance of certain debt or equity securities and/or the collateralization of our properties. At December 31, 2017, we had 160 unencumbered properties, of which 61 support the borrowing base for our $650.0 million line of credit. From time to time, we may also issue shares of our capital stock, issue equity units in our Operating Partnership, obtain 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 and RV community industry 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. See “Risk Factors” in Part I, Item 1A in 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. Contractual Cash Obligations Our primary long-term liquidity needs are principal payments on outstanding indebtedness. As of December 31, 2017, our outstanding contractual obligations, including interest expense, were as follows: Contractual Cash Obligations (1) Collateralized term loans - FNMA Collateralized term loans - Life Company Total Due $ 1,012,316 1,045,529 $ <1 year 44,754 22,948 Collateralized term loans - CMBS Collateralized term loans - FMCC Secured borrowings Lines of credit 411,087 388,790 129,182 41,809 8,013 6,035 5,541 — Payments Due By Period (In thousands) 1-3 years $ 149,854 3-5 years $ 193,005 After 5 years 624,703 $ 58,363 15,888 12,783 12,620 4,009 67,983 188,966 13,883 14,370 37,800 896,235 198,220 356,089 96,651 — Preferred OP units - mandatorily redeemable Total principal payments 41,443 $ 3,070,156 6,780 94,071 $ — $ 253,517 — $ 516,007 34,663 $ 2,206,561 Interest expense (2) Operating leases Capital lease obligation Total contractual cash obligations $ 888,979 68,824 4,114 $ 4,032,073 $ 129,074 2,800 16 $ 225,961 $ 238,148 5,726 34 $ 497,425 $ 199,640 5,894 36 $ 721,577 $ 322,117 54,404 4,028 $ 2,587,110 (1) Contractual cash obligations in the table above exclude debt premiums, discounts and deferred financing costs, as applicable. (2) Our contractual cash obligations related to interest expense are calculated based on the current debt levels, rates and maturities as of December 31, 2017 (including capital leases and excluding secured borrowings), and actual payments required in future periods may be different than the amounts included above. Perpetual securities include one year of interest expense in the “After 5 years” category. As of December 31, 2017, our net debt to enterprise value approximated 28.2 percent (assuming conversion of all common OP units, Series A-1 preferred OP units, Series A-3 preferred OP units, Series A-4 preferred OP units, and Series C preferred OP units to shares of common stock). Our debt had a weighted average maturity of approximately 8.9 years and a weighted average interest rate of 4.50 percent. 57 SUN COMMUNITIES, INC. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our Consolidated Financial Statements are prepared in accordance with U.S. 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. The critical accounting estimates that affect the Consolidated Financial Statements and that use judgments and assumptions are listed below. In addition, the likelihood that materially different amounts could be reported under varied conditions and assumptions is discussed. Refer to Note 1, “Significant Accounting Policies,” of our accompanying Consolidated Financial Statements for information regarding our critical accounting estimates. Impact of New Accounting Standards Refer to Note 17, “Recent Accounting Pronouncements,” of our accompanying Consolidated Financial Statements for information regarding new accounting pronouncements. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements with any unconsolidated entities that we believe have or are reasonably likely to have a material effect on its financial condition, results of operations, liquidity, or capital resources. 58 SUN COMMUNITIES, INC. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk is the exposure to loss resulting from changes in market factors such as interest rates, foreign currency exchange rates, commodity prices, and equity prices. Interest Rate Risk Our principal market risk exposure is interest rate risk. We mitigate this risk by maintaining prudent amounts of leverage, minimizing capital costs, and interest expense while continuously evaluating all available debt and equity resources and following established risk management policies and procedures, which include the periodic use of derivatives. Our primary strategy in entering into derivative contracts is to minimize the variability that interest rate changes could have on our future cash flows. From time to time, we employ derivative instruments that effectively convert a portion of our variable rate debt to fixed rate debt. We do not enter into derivative instruments for speculative purposes. We have two interest rate cap agreements with a total notional amount of $159.7 million as of December 31, 2017. The first interest rate cap agreement has a cap rate of 9.00 percent, a notional amount of $150.1 million and a termination date of April 2018. The second interest rate cap agreement has a cap rate of 11.02 percent, a notional amount of $9.6 million and a termination date of May 2023. Our remaining variable rate debt totaled $194.7 million and $256.0 million as of December 31, 2017 and 2016, respectively, and bears interest at Prime or various LIBOR rates. If Prime or LIBOR increased or decreased by 1.0 percent, our interest expense would have increased or decreased by approximately $2.3 million and $3.0 million for the years ended December 31, 2017 and 2016, respectively, based on the $229.6 million and $299.1 million average balance outstanding under our variable rate debt facilities, respectively. Foreign Currency Exchange Rate Risk Foreign currency exchange rate risk is the risk that fluctuations in currencies against the U.S. dollar will negatively impact our results of operations. We are exposed to foreign currency exchange rate risk as a result of remeasurement and translation of the assets and liabilities of our Canadian properties into U.S. dollars. Fluctuations in foreign currency exchange rates can therefore create volatility in our results of operations and may adversely affect our financial condition. At December 31, 2017 and 2016, our stockholder’s equity included $91.5 million and $79.9 million from our Canadian subsidiaries, respectively, which represented 3.4 percent of total equity in both periods. Based on our sensitivity analysis, a 10.0 percent strengthening of the U.S. dollar against the Canadian dollar would have caused a reduction of $9.2 million and $8.0 million to our total stockholder’s equity at December 31, 2017 and 2016, respectively. 59 SUN COMMUNITIES, INC. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Financial statements and supplementary data are filed herewith under Item 15. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ITEM 9. None. ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the specified time periods and accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures (pursuant to Rules 13a-15(e) or 15d-15(e) of the Exchange Act) at December 31, 2017. Based upon this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2017. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. GAAP. Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, misstatements due to error or fraud may not be prevented or detected on a timely basis. Our management performed an assessment of the effectiveness of our internal control over financial reporting at December 31, 2017, utilizing the criteria discussed in the “Internal Control - Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. The objective of this assessment was to determine whether our internal control over financial reporting was effective at December 31, 2017. Based on management’s assessment, we have concluded that our internal control over financial reporting was effective at December 31, 2017. The effectiveness of our internal control over financial reporting has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in its report which is included herein. Changes in Internal Control Over Financial Reporting There have not been any changes in our internal control over financial reporting during the quarter ended December 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION The following is a summary of additional material United States federal income tax considerations with respect to Sun Communities, Inc. This discussion is being included in this Annual Report on Form 10-K for incorporation by reference into the Company’s Registration Statements on Forms S-3 (File No. 333-204911, effective June 12, 2015; File No. 333-203502, effective April 17, 2015 and File No. 333-203498, effective April 17, 2015) and on Forms S-8 (File No. 333162216, effective as of September 30, 2009 and File No. 333-205857, effective July 24, 2015), the prospectuses filed as part of such Registration Statements on Form S-3, and any applicable prospectus supplements thereto. This discussion supplements and updates the discussions contained in, or incorporated by reference into, the prospectuses filed as part of such Registration Statements on Form S-3, and any applicable prospectus supplements thereto, under the heading “Material U.S. Federal Income Tax Considerations,” and supersedes such discussions to the extent inconsistent with such discussions. 60 SUN COMMUNITIES, INC. ADDITIONAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS The Tax Cuts and Jobs Act On December 22, 2017, H.R. 1, informally titled the Tax Cuts and Jobs Act (the “Tax Act” or the “Act”) was signed into law. The Tax Act makes major changes to the Code, including a number of provisions of the Code that may directly or indirectly affect the taxation of REITs and their security holders. The most significant of these provisions are described below. The individual and collective impact of these changes on REITs and their security holders is uncertain, and may not become evident for some period of time. While the changes in the Tax Act generally appear to be favorable with respect to REITs, the extensive changes to non- REIT provisions in the Code may have unanticipated effects on us or our stockholders. Moreover, Congressional leaders have recognized that the process of adopting extensive tax legislation in a short amount of time without hearings and substantial time for review is likely to have led to drafting errors, issues needing clarification and unintended consequences that may or may not be revised in subsequent tax legislation. At this point, it is not clear when Congress will address these issues or when the Internal Revenue Service will be able to issue administrative guidance on the changes made in the Tax Act. Prospective investors should consult their tax advisors regarding the implications of the Tax Act on their investment. Refer to Note 12, “Income Taxes,” of our accompanying Consolidated Financial Statements for resulting impacts of the Tax Act on the Company. Revised Individual Tax Rates and Deductions The Tax Act creates seven income tax brackets for individuals ranging from 10 percent to 37 percent that generally apply at higher thresholds than current law. For example, the highest 37 percent rate applies to joint return filer incomes above $600,000, instead of the highest 39.6 percent rate that applies to incomes above $470,700 under pre-Tax Act law. The maximum 20 percent rate that applies to long-term capital gains and qualified dividend income is unchanged, as is the 3.8 percent tax on net investment income. The Act also eliminates personal exemptions, but nearly doubles the standard deduction for most individuals (e.g. the standard deduction for joint return filers rises from $12,700 in 2017 to $24,000 upon the Act’s effectiveness). The Act also eliminates many itemized deductions, limits individual deductions for state and local income, property and sales taxes (other than those paid in a trade or business) to $10,000 collectively for joint return filers (with a special provision to prevent 2017 deductions for prepayment of 2018 state or local income taxes), and limits the amount of new acquisition indebtedness on principal or second residences for which mortgage interest deductions are available to $750,000. Interest deductions on home equity debt are eliminated. Charitable deductions are generally preserved. The phaseout of itemized deductions based on income is eliminated. The Tax Act does not eliminate the individual alternative minimum tax, but it raises the exemption and exemption phaseout threshold for application of the tax. These individual income tax changes are generally effective beginning in 2018, but without further legislation, they will expire, or sunset, after 2025. Pass-Through Business Income Tax Rate Lowered through Deduction Under the Tax Act, individuals, trusts, and estates generally may deduct 20 percent of “qualified business income” (generally, domestic trade or business income other than certain investment items) of a partnership, S corporation, or sole proprietorship. In addition, “qualified REIT dividends” (i.e., REIT dividends other than capital gain dividends and portions of REIT dividends designated as qualified dividend income eligible for capital gain tax rates) and certain other income items are eligible for the deduction by the taxpayer. The overall deduction is limited to 20 percent of the sum of the taxpayer’s taxable income (less net capital gain) and certain cooperative dividends, subject to further limitations based on taxable income. In addition, for taxpayers with taxable income above a certain threshold (e.g., $315,000 for joint return filers), the deduction for each trade or business is generally limited to no more than the greater of: (i) 50 percent of the taxpayer’s proportionate share of total wages from a partnership, S corporation or sole proprietorship, or (ii) 25 percent of the taxpayer’s proportionate share of such total wages plus 2.5 percent of the unadjusted basis of acquired tangible depreciable property that is used to produce qualified business income and satisfies certain other requirements. The deduction for qualified REIT dividends is not subject to these wage and basis limitations. The deduction, if allowed in full, equates to a maximum 29.6 percent tax rate on domestic qualified business income of partnerships, S corporations, or sole proprietorships, and a maximum 29.6 percent tax rate on REIT dividends. As with the other individual income tax changes, the deduction provisions are effective beginning in 2018. Without further legislation, the deduction sunsets after 2025. 61 SUN COMMUNITIES, INC. Net Operating Loss Modifications Net operating loss (“NOL”) provisions are modified by the Tax Act. The Act limits the NOL deduction to 80 percent of taxable income (before the deduction). It also generally eliminates NOL carrybacks for individuals and non-REIT corporations (NOL carrybacks did not apply to REITs under prior law), but allows indefinite NOL carryforwards. The new NOL rules apply beginning in 2018. Maximum Corporate Tax Rate Lowered to 21 percent; Elimination of Corporate Alternative Minimum Tax The Tax Act reduces the 35 percent maximum corporate income tax rate to a maximum 21 percent corporate rate, and reduces the dividends-received deduction for certain corporate subsidiaries. The Act also permanently eliminates the corporate alternative minimum tax. These provisions are effective beginning in 2018. Limitations on Interest Deductibility; Real Property Trades or Businesses Can Elect Out Subject to Longer Asset Cost Recovery Periods The Tax Act limits a taxpayer’s net interest expense deduction to 30 percent of the sum of adjusted taxable income, business interest, and certain other amounts. Adjusted taxable income does not include items of income or expense not allocable to a trade or business, business interest or expense, the new deduction for qualified business income, NOLs, and for years prior to 2022, deductions for depreciation, amortization, or depletion. For partnerships, the interest deduction limit is applied at the partnership level, subject to certain adjustments to the partners for unused deduction limitation at the partnership level. The Act allows a real property trade or business to elect out of this interest limit so long as it uses a 40-year recovery period for nonresidential real property, a 30-year recovery period for residential rental property, and a 20-year recovery period for related improvements described below. Disallowed interest expense is carried forward indefinitely (subject to special rules for partnerships). The interest deduction limit applies beginning in 2018. Maintains Cost Recovery Period for Buildings; Reduced Cost Recovery Periods for Tenant Improvements; Increased Expensing for Equipment For taxpayers that do not use the Act’s real property trade or business exception to the business interest deduction limits, the Act maintains the current 39-year and 27.5-year straight line recovery periods for nonresidential real property and residential rental property, respectively, and provides that tenant improvements for such taxpayers are subject to a general 15-year recovery period. Also, the Act temporarily allows 100 percent expensing of certain new or used tangible property through 2022, phasing out at 20 percent for each following year (with an election available for 50 percent expensing of such property if placed in service during the first taxable year ending after September 27, 2017). The changes apply, generally, to property acquired after September 27, 2017 and placed in service after September 27, 2017. Like Kind Exchanges Retained for Real Property, but Eliminated for Most Personal Property The Tax Act continues the deferral of gain from the like kind exchange of real property, but provides that foreign real property is no longer “like kind” to domestic real property. Furthermore, the Act eliminates like kind exchanges for most personal property. These changes are effective generally for exchanges completed after December 31, 2017, with a transition rule allowing such exchanges where one part of the exchange is completed prior to December 31, 2017. Technical Terminations of Partnerships For tax years beginning January 1, 2018, the Tax Act permanently repeals the technical termination rule for partnerships. The technical termination rule provided that a partnership (or limited liability company (“LLC”) taxed as a partnership) terminated for tax purposes (and a new partnership is deemed to be created) if there was a sale or exchange of 50 percent or more of the total interest in the partnership (or LLC) capital and profits in a 12-month period. International Provisions: Modified Territorial Tax Regime The Act moves the United States from a worldwide to a modified territorial tax system, with provisions included to prevent corporate base erosion. 62 SUN COMMUNITIES, INC. Accrual of Income Under the Tax Act, the Company generally will be required to take certain amounts in income no later than the time such amounts are reflected on certain financial statements. The application of this rule may require the accrual of income earlier than would be the case under the general tax rules, although the precise application of this rule is unclear at this time. This rule generally will be effective for tax years beginning after December 31, 2017. To the extent that this rule requires the accrual of income earlier than under the general tax rules, it could increase our “phantom income,” which may make it more likely that we could be required to borrow funds or take other action to satisfy the REIT distribution requirements for the taxable year in which this “phantom income” is recognized. Other Provisions The Tax Act makes other significant changes to the Code. These changes include provisions limiting the ability to offset dividend and interest income with partnership or S corporation net active business losses. These provisions are effective beginning in 2018, but without further legislation, sunset after 2025. ARTICLES OF RESTATEMENT On February 20, 2018, the Company filed articles of restatement (the “Articles of Restatement”) with the Maryland Department of Assessments and Taxation consolidating its charter. The Articles of Restatement are filed herewith as Exhibit 3.1. 63 SUN COMMUNITIES, INC. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Pursuant to instruction 3 to paragraph (b) of Item 401 of Regulation S-K, certain information regarding our executive officers is contained in Part I of this Form 10-K. Unless provided in an amendment to this Annual Report on Form 10-K, the other information required by this Item is incorporated herein by reference to the applicable information in the proxy statement for our 2018 annual meeting (the “Proxy Statement,”) including the information set forth under the captions “Board of Directors and Corporate Governance - Incumbent Directors and Nominees,” “Management and Executive Compensation - Executive Officers,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Board of Directors and Corporate Governance - Board of Directors and Committees” and “Board of Directors and Corporate Governance - Consideration of Director Nominees.” ITEM 11. EXECUTIVE COMPENSATION Unless provided in an amendment to this Annual Report on Form 10-K, the information required by this Item is incorporated by reference to the applicable information in the Proxy Statement, including the information set forth under the captions “Management and Executive Compensation,” “Board of Directors and Corporate Governance - Director Compensation Table,” “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report.” The information in the section captioned “Compensation Committee Report” in the Proxy Statement or an amendment to this Annual Report on Form 10-K is incorporated by reference herein but shall be deemed furnished, not filed, and shall not be deemed to be incorporated by reference into any filing we make under the Securities Act of 1933 or the Securities Exchange Act of 1934. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Unless provided in an amendment to this Annual Report on Form 10-K, the information required by this Item is incorporated by reference to the applicable information in the Proxy Statement, including the information set forth under the captions “Security Ownership of Certain Beneficial Owners and Management” and “Securities Authorized for Issuance Under Equity Compensation Plans.” ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Unless provided in an amendment to this Annual Report on Form 10-K, the information required by this Item is incorporated by reference to the Proxy Statement, including the information set forth under the captions “Certain Relationships and Related Transactions and Director Independence,” “Board of Directors and Corporate Governance - Board of Directors and Committees” and “Board of Directors and Corporate Governance - Board Leadership Structure and Independence of Non-Employee Directors.” ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Unless provided in an amendment to this Annual Report on Form 10-K, the information required by this Item is incorporated by reference to the Proxy Statement, including the information set forth under the caption “Ratification of Selection of Grant Thornton LLP.” 64 SUN COMMUNITIES, INC. PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES The following documents are filed herewith as part of this Form 10-K: 1. Financial Statements A list of the financial statements required to be filed as a part of this Annual Report on Form 10 K is shown in the “Index to the Consolidated Financial Statements and Financial Statement Schedules” filed herewith. 2. Financial Schedule The financial statement schedule required to be filed as a part of this Annual Report on Form 10 K is shown in the “Index to the Consolidated Financial Statements and Financial Statement Schedules” filed herewith. 3. Exhibits A list of the exhibits required by Item 601 of Regulation S K to be filed as a part of this Annual Report on Form 10-K is shown on the “Exhibit Index” filed herewith. ITEM 16. FORM 10-K SUMMARY None. 65 SUN COMMUNITIES, INC. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: February 22, 2018 By /s/ Gary A. Shiffman Gary A. Shiffman Chief Executive Officer SUN COMMUNITIES, INC. (Registrant) Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /s/ /s/ /s/ /s/ /s/ /s/ /s/ /s/ Name Gary A. Shiffman Gary A. Shiffman Karen J. Dearing Karen J. Dearing Meghan G. Baivier Meghan G. Baivier Stephanie W. Bergeron Stephanie W. Bergeron Brian M. Hermelin Brian M. Hermelin Ronald A. Klein Ronald A. Klein Clunet R. Lewis Clunet R. Lewis Arthur A. Weiss Arthur A. Weiss Capacity Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) Date February 22, 2018 February 22, 2018 February 22, 2018 February 22, 2018 February 22, 2018 February 22, 2018 February 22, 2018 February 22, 2018 Executive Vice President, Chief Financial Officer, Treasurer, Secretary (Principal Financial Officer and Principal Accounting Officer) Director Director Director Director Director Director 66 SUN COMMUNITIES, INC. EXHIBIT INDEX Exhibit Number Description Method of Filing 3.1 Sun Communities, Inc. Articles of Restatement Filed herewith Promissory Note dated June 9, 2016 in the original principal amount of $162.0 million executed by Carefree Communities CA LLC and NHC-CA101, LLC in favor of The Northwestern Mutual Life Insurance Company Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed June 9, 2016 3.2 Third Amended and Restated Bylaws 4.1 4.2 4.3 Rights Agreement, dated as of June 2, 2008, between Sun Communities, Inc. and Computershare Trust Company, N.A., as Rights Agent Registration Rights Agreement dated February 8, 2013 among Sun Communities, Inc., and the holders of Series A-3 Preferred Units that are parties thereto Form of Registration Rights Agreement between Sun Communities, Inc. and Carefree Communities Intermediate Holdings, L.L.C. 4.4 Form of certificate evidencing common stock 4.5 Form of certificate evidencing 6.50% Series A-4 Cumulative Convertible Preferred Stock 4.6 Second Amendment to Rights Agreement, dated October 4, 2017, between Sun Communities, Inc. and Computershare Trust Company, N.A., as Rights Agent Master Credit Facility Agreement, dated June 3, 2016, by and among Sun Apple Creek LLC; Sun Bell Crossing LLC; Sun Boulder Ridge LLC; Aspen-Brentwood Project, LLC; Sun Cave Creek LLC; Sun Countryside Lake Lanier LLC; Sun Cutler Estates LLC; Aspen-Grand Project, LLC; Sun Hamlin LLC; Sun Hawaiian Holly LLC; Holiday West Village Mobile Home Park, LLC; Sun Meadowbrook FL LLC; Sun Oakcrest LLC, Sun Pine Ridge LLC; Sun Scio Farms LLC; Sun Villa MHC LLC; Waverly Shores Village Mobile Home Park, LLC, as Borrowers, and Regions Bank, as Lender Master Loan Agreement dated June 9, 2016, by and among Carefree Communities CA LLC, NHC-CA101, LLC and The Northwestern Mutual Life Insurance Company Master Loan Agreement dated June 9, 2016, by and between Carefree Communities CA LLC and The Northwestern Mutual Life Insurance Company Promissory Note dated June 9, 2016 in the original principal amount of $163.0 million executed by Carefree Communities CA LLC in favor of The Northwestern Mutual Life Insurance Company Amended and Restated Mortgage and Security Agreement dated June 9, 2016, by and between SNF Property LLC and The Northwestern Mutual Life Insurance Company Amended and Restated Promissory Note dated June 9, 2016 in the original principal amount of $80.0 million executed by SNF Property LLC in favor of The Northwestern Mutual Life Insurance Company Lease, dated November 1, 2002, by and between the Operating Partnership as Tenant and American Center LLC as Landlord 10.9 Third Lease Modification dated October 31, 2011 by and between the Operating Partnership as Tenant and American Center LLC as Landlord 10.10 Third Amended and Restated Agreement of Limited Partnership of Sun Communities Operating Limited Partnership, dated June 19, 2014. 10.11 10.12 Amendment No. 2 dated November 26, 2014, to the Third Amended and Restated Agreement of Limited Partnership of Sun Communities Operating Limited Partnership Amendment No. 7, dated April 1, 2015, to the Third Amended and Restated Agreement of Limited Partnership of Sun Communities Operating Limited Partnership 67 10.1 10.2 10.3 10.4 10.5 10.6 10.7 10.8 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed on May 12, 2017 Incorporated by reference to Sun Communities, Inc.’s Registration Statement on Form 8-A filed June 3, 2008 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed February 12, 2013 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed March 22, 2016 Incorporated by reference to Sun Communities, Inc.’s Registration Statement on Form 8-A filed November 9, 2012 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed December 2, 2014 Incorporated by reference to Sun Communities, Inc.’s Current report on Form 8-K filed on October 4, 2017 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed June 9, 2016 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed June 9, 2016 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed June 9, 2016 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed June 9, 2016 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed June 9, 2016 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed June 9, 2016 Incorporated by reference to Sun Communities, Inc.’s Annual Report on Form 10-K for the year ended December 31, December 31, 2002, as amended Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 10-K for the year ended December 31, 2011 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed June 23, 2014 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed December 2, 2014 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed April 2, 2015 SUN COMMUNITIES, INC. 10.13 Amendment No. 8, dated April 22, 2015, to the Third Amended and Restated Agreement of Limited Partnership of Sun Communities Operating Limited Partnership 10.14 First Amended and Restated 2004 Non-Employee Director Option Plan# 10.15 Sun Communities, Inc. 2015 Equity Incentive Plan# 10.16 Form of Stock Option Agreement between Sun Communities, Inc. and certain directors, officers and other individuals# 10.17 Form of Non-Employee Director Stock Option Agreement between Sun Communities, Inc. and certain directors# 10.18 Form of Restricted Stock Award Agreement# 10.19 First Amendment to Restricted Stock Award Agreement between Sun Communities, Inc. and Gary A. Shiffman dated July 15, 2014# 10.20 Employment Agreement dated June 20, 2013 among Sun Communities, Inc., Sun Communities Operating Limited Partnership and Gary A. Shiffman# 10.21 First Amendment to Employment Agreement among Sun Communities, Inc., Sun Communities Operating Limited Partnership and Gary A. Shiffman dated July 15, 2014# 10.22 Second Amendment to Employment Agreement among Sun Communities, Inc., Sun Communities Operating Limited Partnership and Gary A. Shiffman dated March 8, 2017# 10.23 Employment Agreement dated May 19, 2015 among Sun Communities, Inc., Sun Communities Operating Limited Partnership and John B. McLaren# 10.24 First Amendment to Employment Agreement among Sun Communities, Inc. Sun Communities Operating Limited Partnership, and John B. McLaren dated March 8, 2017# 10.25 Employment Agreement July 16, 2015 among Sun Communities, Inc., Sun Communities Operating Limited Partnership and Karen J. Dearing# 10.26 First Amendment Employment Agreement among Sun Communities, Inc., Sun Communities Operating Partnership, and Karen J. Dearing dated March 8, 2017# 10.27 Sun Communities, Inc. Executive Compensation “Clawback” Policy# At the Market Offering Sales Agreement, dated July 28, 2017, among Sun Communities, Inc., Sun Communities Operating Limited Partnership, BMO Capital Markets Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Robert W. Baird & Co. Incorporated, Fifth Third Securities, Inc., RBC Capital Markets, LLC, BTIG, LLC, Jefferies LLC, Credit Suisse Securities (USA) LLC and Samuel A. Ramirez & Company, Inc. Second Amended and Restated Credit Agreement, dated April 25, 2017 with Citibank, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and BMO Capital Markets, as Joint Lead Arrangers, and Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Joint Bookrunners, and Bank of America, N.A. and Bank of Montreal, as Co-Syndication Agents and Fifth Third Bank, an Ohio Banking Corporation, Regions Bank and RBC Capital Markets as Co-Documentation Agents and the other lenders, PNC Bank, National Association, U.S. Bank National Association, Credit Suisse, Associated Bank, N.A. and Flagstar Bank, FSB. Incorporated by reference to Sun Communities, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed July 25, 2012 Incorporated by reference to Sun Communities, Inc.’s Proxy Statement dated April 29, 2015 for the Annual meeting of Stockholders held July 20, 2015 Incorporated by reference to Sun Communities, Inc.’s Registration Statement No. 33 69340 Incorporated by reference to Sun Communities, Inc.’s Registration Statement No. 33 80972 Incorporated by reference to Sun Communities, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2004 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed July 15, 2014 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed June 24, 2013 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed July 15, 2014 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed on March 8, 2017 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed May 20, 2015 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed on March 8, 2017 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed July 17, 2015 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed on March 8, 2017 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed July 15, 2014 Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed on July 28, 2017. Incorporated by reference to Sun Communities, Inc.’s Current Report on Form 8-K filed on April 27, 2017 List of Subsidiaries of Sun Communities, Inc. Consent of Grant Thornton LLP Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 The following Sun Communities, Inc. financial information, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2017 and 2016, (ii) Consolidated Statements of Operations for the Years Ended December 31, 2017, 2016 and 2015, (iii) Consolidated Statements of Stockholders’ Equity and Comprehensive Loss for the Years Ended December 31, 2017, 2016 and 2015, (iv) Consolidated Statements of Cash Flows, for the Years Ended December 31, 2017, 2016 and 2015; (v) Notes to Consolidated Financial Statements, and (vi) Schedule III - Real Estate and Accumulated Depreciation Filed herewith Filed herewith Filed herewith Filed herewith Furnished herewith Filed herewith 68 10.28 10.29 21.1 23.1 31.1 31.2 32.1 101.1 SUN COMMUNITIES, INC. * # Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K because such schedules and exhibits do not contain information which is material to an investment decision or which is not otherwise disclosed in the filed agreements. The Company will furnish the omitted schedules and exhibits to the Securities and Exchange Commission upon request by the Commission. Management contract or compensatory plan or arrangement. 69 [This page intentionally left blank] SUN COMMUNITIES, INC. INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE Reports of Independent Registered Public Accounting Firm Financial Statements: Consolidated Balance Sheets as of December 31, 2017 and 2016 Consolidated Statements of Operations for the Years Ended December 31, 2017, 2016, and 2015 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2017, 2016, and 2015 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2017, 2016, and 2015 Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016, and 2015 Notes to Consolidated Financial Statements Real Estate and Accumulated Depreciation, Schedule III Page F-2 F-4 F-5 F-6 F-7 F-8 F-10 F-43 F - 1 SUN COMMUNITIES, INC. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Sun Communities, Inc. Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Sun Communities, Inc. (a Maryland corporation) and subsidiaries (the “Company”) as of December 31, 2017 and 2016, and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and schedule (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 22, 2018 expressed an unqualified opinion. Basis for opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ GRANT THORNTON LLP GRANT THORNTON LLP We have served as the Company’s auditor since 2003. Southfield, Michigan February 22, 2018 F - 2 SUN COMMUNITIES, INC. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Sun Communities, Inc. Opinion on internal control over financial reporting We have audited the internal control over financial reporting of Sun Communities, Inc. (a Maryland corporation) and subsidiaries (the “Company”) as of December 31, 2017, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in the 2013 Internal Control-Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2017, and our report dated February 22, 2018 expressed an unqualified opinion on those financial statements. Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP GRANT THORNTON LLP Southfield, Michigan February 22, 2018 F - 3 SUN COMMUNITIES, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts) ASSETS Land Land improvements and buildings Rental homes and improvements Furniture, fixtures and equipment Investment property Accumulated depreciation Investment property, net (including $50,193 and $88,987 for consolidated variable interest entities at December 31, 2017 and December 31, 2016; see Note 7) Cash and cash equivalents Inventory of manufactured homes Notes and other receivables, net Collateralized receivables, net Other assets, net (including $1,659 and $3,054 for consolidated variable interest entities at December 31, 2017 and December 31, 2016; see Note 7) TOTAL ASSETS LIABILITIES Mortgage loans payable (including $41,970 and $62,111 for consolidated variable interest entities at December 31, 2017 and December 31, 2016; see Note 7) Secured borrowings on collateralized receivables Preferred OP units - mandatorily redeemable Lines of credit Distributions payable Other liabilities (including $1,468 and $1,998 for consolidated variable interest entities at December 31, 2017 and December 31, 2016; see Note 7) TOTAL LIABILITIES Commitments and contingencies Series A-4 preferred stock, $0.01 par value. Issued and outstanding: 1,085 shares at December 31, 2017 and 1,681 shares at December 31, 2016 Series A-4 preferred OP units STOCKHOLDERS’ EQUITY Series A preferred stock, $0.01 par value. Issued and outstanding: none at December 31, 2017 and 3,400 shares at December 31, 2016 Common stock, $0.01 par value. Authorized: 180,000 shares; Issued and outstanding: 79,679 shares at December 31, 2017 and 73,206 shares at December 31, 2016 Additional paid-in capital Accumulated other comprehensive income (loss) Distributions in excess of accumulated earnings Total Sun Communities, Inc. stockholders' equity Noncontrolling interests: Common and preferred OP units Consolidated variable interest entities Total noncontrolling interest TOTAL STOCKHOLDERS’ EQUITY TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ $ $ As of December 31, 2017 2016 $ 1,107,838 5,102,014 528,074 144,953 6,882,879 (1,237,525) 1,051,536 4,825,043 489,633 130,127 6,496,339 (1,026,858) 5,645,354 10,127 30,430 163,496 128,246 134,304 6,111,957 2,867,356 129,182 41,443 41,257 55,225 270,741 3,405,204 $ $ 5,469,481 8,164 21,632 81,179 143,870 146,450 5,870,776 2,819,567 144,477 45,903 100,095 51,896 279,667 3,441,605 32,414 10,652 50,227 16,717 — 34 797 3,758,533 1,102 (1,162,001) 2,598,431 60,971 4,285 65,256 2,663,687 6,111,957 $ $ 732 3,321,441 (3,181) (1,023,415) 2,295,611 69,598 (2,982) 66,616 2,362,227 5,870,776 See accompanying Notes to Consolidated Financial Statements. F - 4 SUN COMMUNITIES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) REVENUES Income from real property Revenue from home sales Rental home revenue Ancillary revenues Interest Brokerage commissions and other revenues, net Total revenues COSTS AND EXPENSES Property operating and maintenance Real estate taxes Cost of home sales Rental home operating and maintenance Ancillary expenses Home selling expenses General and administrative Transaction costs Catastrophic weather related charges, net Depreciation and amortization Loss on extinguishment of debt Interest Interest on mandatorily redeemable preferred OP units Total expenses Income before other items Other income / (expense), net Gain on disposition of properties, net Current tax expense Deferred tax benefit / (expense) Income from affiliate transactions Net income Less: Preferred return to preferred OP units Less: Amounts attributable to noncontrolling interests Net income attributable to Sun Communities, Inc. Less: Preferred stock distributions Less: Preferred stock redemption costs Net income attributable to Sun Communities, Inc. common stockholders Weighted average common shares outstanding: Basic Diluted Earnings per share (Refer to Note 13): Basic Diluted Year Ended December 31, 2017 2016 2015 $ $ $ $ 742,228 127,408 50,549 37,511 21,180 3,694 982,570 210,278 52,288 95,114 22,000 27,071 12,457 74,711 9,801 8,352 261,536 6,019 127,128 3,114 909,869 72,701 8,982 — (446) 582 — 81,819 (4,581) (5,055) 72,183 (7,162) — 65,021 $ $ 620,917 110,507 47,780 33,424 18,113 3,037 833,778 173,274 44,306 80,420 24,294 23,425 9,744 64,087 31,914 1,172 221,770 1,127 119,163 3,152 797,848 35,930 (4,676) — (683) 400 500 31,471 (5,006) (150) 26,315 (8,946) — 17,369 $ $ 76,084 76,711 65,856 66,321 0.85 0.85 $ $ 0.27 0.26 $ $ 506,078 79,728 46,236 24,532 15,938 2,219 674,731 135,797 34,714 58,941 24,956 17,519 7,476 47,455 17,803 — 177,637 2,800 107,659 3,219 635,976 38,755 — 125,376 (158) (1,000) 7,500 170,473 (4,973) (10,054) 155,446 (13,793) (4,328) 137,325 53,686 53,702 2.53 2.52 See accompanying Notes to Consolidated Financial Statements. F - 5 $ 2015 170,473 — 170,473 10,054 $ 160,419 SUN COMMUNITIES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Year Ended December 31, 2017 2016 Net income Foreign currency translation gain / (loss) Total comprehensive income Less: Comprehensive income / (loss) attributable to noncontrolling interests $ $ 81,819 4,527 86,346 5,299 Comprehensive income attributable to Sun Communities, Inc. $ 81,047 $ 31,471 (3,401) 28,070 (70) 28,140 See accompanying Notes to Consolidated Financial Statements. F - 6 SUN COMMUNITIES, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands) 7.125% Series A Cumulative Redeemable Preferred Stock Common Stock Additional Paid-In Capital Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Income / (Loss) Non- controlling Interests Total Stockholders’ Equity Balance as of December 31, 2014, revised $ 34 $ 486 $ 1,741,154 $ (863,545) $ — $ 29,691 $ 907,820 Issuance of common stock from exercise of options, net Issuance, conversion of OP units and associated costs of common stock, net Conversion of Series A-4 preferred stock Preferred stock redemption Share-based compensation - amortization and forfeitures Net income Distributions Balance at December 31, 2015 Issuance of common stock from exercise of options, net Issuance, conversion of OP units and associated costs of common stock, net Conversion of Series A-4 preferred stock Share-based compensation - amortization and forfeitures Foreign currency translation loss Net income Distributions Balance at December 31, 2016 Issuance of common stock and common OP units, net Conversion of OP units Redemption of Series A-4 preferred stock Conversion of Series A-4 preferred stock Redemption of Series A-4 OP units Redemption of Series A Cumulative Convertible Preferred Stock Share-based compensation - amortization and forfeitures Acquisition of noncontrolling interests Foreign currency translation gain Net income Distributions — — — — — — — 34 — — — — — — — 34 — — — — — (34) — — — — — — 98 — — — — — 95 564,260 6,900 — 6,905 — — 584 2,319,314 — 144 — 4 — — — 149 981,174 11,503 9,301 — — — — — — (4,328) 203 160,418 (156,870) (864,122) — — — 252 — 31,321 (190,866) — — — — — — — — — — — — (3,181) — — — 95 52,921 617,279 — — — 9,185 (11,026) 6,900 (4,328) 7,108 169,603 (167,896) 80,771 1,536,581 — 149 (2,687) — — (220) 60 978,631 11,503 9,557 (3,401) 31,381 (11,308) (202,174) 732 3,321,441 (1,023,415) (3,181) 66,616 2,362,227 63 1 — 1 — — — — — — — 514,024 3,556 (3,867) 4,719 (2,571) (84,966) 12,398 (6,201) — — — — — — — — — 297 — — 76,765 (215,648) — — — — — — — — 4,283 — — 2,001 (3,298) — — — — — 6,101 244 4,849 516,088 259 (3,867) 4,720 (2,571) (85,000) 12,695 (100) 4,527 81,614 (11,257) (226,905) Balance at December 31, 2017 $ — $ 797 $ 3,758,533 $ (1,162,001) $ 1,102 $ 65,256 $ 2,663,687 See accompanying Notes to Consolidated Financial Statements. F - 7 SUN COMMUNITIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activities: Year Ended December 31, 2016 2017 2015 $ 81,819 $ 31,471 $ 170,473 Gain on disposition of assets Gain on disposition of properties, net Gain on acquisition of property Unrealized foreign currency translation (gain) / loss Contingent liability remeasurement (gain) / loss Asset impairment charges Share-based compensation Depreciation and amortization Deferred tax (benefit) expense Amortization of below market lease Amortization of debt premium Amortization of deferred financing costs Amortization of ground lease intangibles Loss on extinguishment of debt Income from affiliate transactions Change in notes receivable from financed sales of inventory homes, net of repayments Change in inventory, other assets and other receivables, net Change in other liabilities NET CASH PROVIDED BY OPERATING ACTIVITIES INVESTING ACTIVITIES: Investment in properties Acquisitions of properties, net of cash acquired Payments for deposits on acquisitions Proceeds from affiliate transactions Proceeds from dispositions of assets and depreciated homes, net Proceeds from disposition of properties Issuance of notes and other receivables Payment for membership interest Repayments of notes and other receivables NET CASH USED FOR INVESTING ACTIVITIES FINANCING ACTIVITIES: Issuance and costs of common stock, OP units, and preferred OP units, net Borrowings on lines of credit Payments on lines of credit Proceeds from issuance of other debt Payments on other debt Prepayment penalty on debt Proceeds received from return of prepaid deferred financing costs Redemption of Series A-4 preferred stock and OP units Redemption of Series A cumulative convertible preferred stock Redemption of Series B-3 preferred OP units Distributions to stockholders, OP unit holders, and preferred OP unit holders Preferred stock redemption costs Payments for deferred financing costs NET CASH PROVIDED BY FINANCING ACTIVITIES Effect of exchange rate changes on cash and cash equivalents Net change in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period F - 8 (9,338) — — (6,146) (3,035) 742 12,695 256,193 (582) (7,402) (9,548) 2,910 1,914 6,019 — (26,193) (29,264) (9,034) 261,750 (288,537) (120,377) — — 8,575 — (3,918) — 2,615 (401,642) 487,677 661,000 (719,536) 185,153 (124,427) (6,019) — (24,698) (85,000) (4,460) (224,483) — (3,650) 141,557 298 1,963 8,164 10,127 $ (11,224) (5,051) — (125,376) — — — — 7,108 174,589 1,000 (5,073) (10,483) 1,936 — 2,800 (7,500) (9,270) (14,618) 1,728 182,263 (510) 5,005 181 — 9,557 218,669 (400) (6,570) (10,693) 2,160 600 1,127 (500) (20,933) 28,118 (7,365) 238,693 (223,429) (1,487,593) — 500 4,709 88,696 (10,633) — 13,238 (1,614,512) (208,427) (309,274) (2,260) 7,500 6,848 94,522 (1,755) (2,102) 1,764 (413,184) 310,396 750,534 421,184 580,754 (401,978) (505,409) 377,041 964,252 (222,877) (230,785) (2,800) (1,127) — 6,852 — (121,445) — — — — (162,491) (193,740) (4,328) — (7,006) (25,509) 192,548 1,338,970 — (73) (38,373) (36,922) 83,459 45,086 45,086 8,164 $ $ SUPPLEMENTAL INFORMATION: Cash paid for interest (net of capitalized interest of $2,755, $1,595 and $608 respectively) Cash paid for interest on mandatorily redeemable debt Cash (refunds) paid for income taxes Noncash investing and financing activities: Reduction in secured borrowing balance Change in distributions declared and outstanding Conversion of common and preferred OP units Conversion of Series A-4 preferred stock Proceeds related to the disposition of properties held in escrow Settlement of membership interest Capital lease Noncash investing and financing activities at the date of acquisition: Acquisitions - Series A-4 preferred OP units issued Acquisitions - Series A-4 preferred stock issued Acquisitions - Common stock and OP units issued Acquisitions - Series C preferred OP units issued Acquisitions - debt assumed Acquisitions - contingent consideration liability Year Ended December 31, 2017 2016 2015 $ 124,046 $ 121,480 3,114 $ (194) $ 3,152 452 23,449 3,267 3,556 $ $ $ 19,734 9,626 5,933 $ $ $ $ $ $ 99,989 3,222 310 26,293 6,744 5,491 4,720 $ — $ — $ $ 4,114 11,503 $ 6,900 — $ 126,339 — $ — $ 2,786 — — $ — $ — $ 1,000 — $ 175,613 28,410 $ 225,000 $ 278,955 — $ — $ 33,154 4,592 $ — $ 380,043 — $ 9,830 $ — $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ See accompanying Notes to Consolidated Financial Statements. F - 9 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Significant Accounting Policies Business Sun Communities, Inc., a Maryland corporation, and all wholly-owned or majority-owned and controlled subsidiaries, including Sun Communities Operating Limited Partnership, a Michigan limited partnership (the “Operating Partnership”), and Sun Home Services, Inc., a Michigan corporation (“SHS”) are referred to herein as the “Company,” “us,” “we,” and “our”. We are a fully integrated, self-administered and self-managed real estate investment trust (“REIT”). We own, operate, or have an interest in a portfolio, and develop manufactured housing (“MH”) and recreational vehicle (“RV”) communities throughout the United States (“U.S.”). As of December 31, 2017, we owned, operated or had an interest in a portfolio of 350 developed properties located in 29 states and Ontario, Canada (collectively the “Properties”), including 230 MH communities, 89 RV communities, and 31 communities containing both MH and RV sites. As of December 31, 2017, the Properties contained an aggregate of 121,892 developed sites comprised of 83,294 developed MH sites, 22,742 annual RV sites, and 15,856 transient RV sites. There are approximately 9,600 additional MH and RV sites suitable for development. Principles of Consolidation The accompanying Consolidated Financial Statements include our accounts and all majority-owned and controlled subsidiaries, including entities in which we have a controlling interest or have been determined to be the primary beneficiary of a variable interest entity (“VIE”). All inter-company transactions have been eliminated in consolidation. Any subsidiaries in which we have an ownership percentage equal to or greater than 50%, but less than 100%, or considered a VIE, represent subsidiaries with a noncontrolling interest. The noncontrolling interests in our subsidiaries are allocated their proportionate share of the subsidiaries’ financial results. This allocation is recorded as the noncontrolling interest in our Consolidated Financial Statements. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions related to the reported amounts included in our Consolidated Financial Statements and accompanying footnotes thereto. Actual results could differ from those estimates. Investment Property Investment property is recorded at cost, less accumulated depreciation. We review the carrying value of long-lived assets to be held and used for impairment quarterly or whenever events or changes in circumstances indicate a possible impairment. Our primary indicator for potential impairment is based on NOI trends period over period. Circumstances that may prompt a test of recoverability may include a significant decrease in the anticipated market price, an adverse change to the extent or manner in which an asset may be used or in its physical condition or other such events that may significantly change the value of the long- lived asset. An impairment loss is recognized when a long-lived asset’s carrying value is not recoverable and exceeds estimated fair value. We estimate the fair value of our long-lived assets based on discounted future cash flows and any potential disposition proceeds for a given asset. Forecasting cash flows requires management to make estimates and assumptions about such variables as the estimated holding period, rental rates, occupancy, development, and operating expenses during the holding period, as well as disposition proceeds. Management uses its best judgment when developing these estimates and assumptions, but the development of the projected future cash flows is based on subjective variables. Future events could occur which would cause us to conclude that impairment indicators exist, and significant adverse changes in national, regional, or local market conditions or trends may cause us to change the estimates and assumptions used in our impairment analysis. The results of an impairment analysis could be material to our financial statements. We periodically receive offers from interested parties to purchase certain of our properties. These offers may be the result of an active program initiated by us to sell the property, or from an unsolicited offer to purchase the property. The typical sale process involves a significant negotiation and due diligence period between us and the potential purchaser. As the intent of this process is to determine if there are items that would cause the purchaser to be unwilling to purchase or we would be unwilling to sell, it is not unusual for such potential offers of sale/purchase to be withdrawn as such issues arise. We classify assets as “held for sale” when it is probable, in our opinion, that a sale transaction will be completed within one year. This typically occurs when all significant contingencies surrounding the closing have been resolved, which often corresponds with the closing date. F - 10 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS We allocate the purchase price of properties to net tangible and identified intangible assets acquired based on their fair values. In making estimates of fair values for purposes of allocating purchase price, we utilize an independent third-party to value the net tangible and identified intangible assets in connection with the acquisition of the respective property. We provide historical and pro forma financial information obtained about each property, as well as any other information needed in order for the third-party to ascertain the fair value of the tangible and intangible assets (including in-place leases) acquired. On January 1, 2018, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” Upon adoption of this standard, we expect that substantially all of our future property acquisitions will be accounted for as asset acquisitions. Refer to Note 17, “Recent Accounting Pronouncements,” for additional information regarding adoption of this ASU. Capitalized Costs We capitalize certain costs incurred in connection with the development, redevelopment, capital enhancement and leasing of our properties. Management is required to use professional judgment in determining whether such costs meet the criteria for immediate expense or capitalization. The amounts are dependent on the volume and timing of such activities and the costs associated with such activities. Maintenance, repairs and minor improvements to properties are expensed when incurred. Renovations and improvements to properties are capitalized and depreciated over their estimated useful lives and construction costs related to the development of new community or expansion sites are capitalized until the property is substantially complete. Costs incurred to initially renovate pre-owned and repossessed homes that we acquire for our Rental Program are capitalized and the majority of costs incurred to refurbish the homes at turnover and repair the homes while occupied are expensed. Certain expenditures to dealers and residents related to obtaining lessees in our communities are capitalized and amortized over a seven-year period based on the anticipated term of occupancy of a resident. Costs associated with implementing our computer systems are capitalized and amortized over the estimated useful lives of the related software and hardware. Costs incurred to obtain new debt financing are capitalized and amortized over the terms of the related loan agreement using the straight-line method (which approximates the effective interest method). Cash and Cash Equivalents We consider all highly liquid investments with a maturity of three months or less from the date of purchase to be cash and cash equivalents. The maximum amount of credit risk arising from cash deposits in excess of federally insured amounts was approximately $17.7 million and $10.1 million as of December 31, 2017 and 2016, respectively. Inventory Inventory of manufactured homes is stated at lower of specific cost or market based on the specific identification method. Investments in Affiliates Investments in affiliates in which we do not have a controlling direct or indirect voting interest, but can exercise significant influence over the entity with respect to its operations and major decisions, are accounted for using the equity method of accounting. The carrying value of our investment is adjusted for our proportionate share of the affiliate’s net income or loss and reduced by distributions received. We review the carrying value of our investment in affiliates for other than temporary impairment whenever events or changes in circumstances indicate a possible impairment. Financial condition, operational performance, and other economic trends are some of the factors we consider when we evaluate the existence of impairment indicators. When we have a carrying value of zero for our investment, we suspend the equity method of accounting until such time that the affiliate’s net income equals or exceeds the share of net losses not recognized during the time in which the equity method of accounting was suspended. Refer to Note 6, “Investment in Affiliates,” for additional information. Notes and Other Receivables Notes receivable includes both installment loans for manufactured homes purchased by the Company as well as transferred loans that have not met the requirements for sale accounting which are presented herein as collateralized receivables. The notes are collateralized by the underlying manufactured home sold. For purposes of accounting policy, all notes receivable are considered one homogeneous segment, as the notes are typically underwritten using the same requirements and terms. Notes receivable are reported at their outstanding unpaid principal balance adjusted for an allowance for loan loss. Interest income is accrued based upon the unpaid principal balance of the loans. F - 11 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Past due status of our notes receivable is determined based upon the contractual terms of the note. When a note receivable becomes 60 days delinquent, we stop accruing interest on the note receivable. The interest on nonaccrual loans is accounted for on the cash basis until qualifying for return to accrual. Loans are returned to accrual when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. The ability to collect our notes receivable is measured based on current and historical information and events. We consider numerous factors including: length of delinquency, estimated costs to lease or sell, and repossession history. Our experience supports a high recovery rate for notes receivable; however, there is some degree of uncertainty about the recoverability of our investment in these notes receivable. We are generally able to recover our recorded investment in uncollectible notes receivable by repossessing the homes on the notes retained by us and repurchasing the homes on the collateralized receivables, and subsequently selling or leasing these homes to potential residents in our communities. We have established a loan loss reserve based on our estimated unrecoverable costs associated with repossessed/repurchased homes. We estimate our unrecoverable costs to be the repurchase price of the home collateralizing the note receivable plus repair and remarketing costs in excess of the estimated selling price of the home being repossessed. A historical average of this excess cost is calculated based on prior repossessions/repurchases and is applied to our estimated annual future repossessions to create the allowance for both installment and collateralized notes receivable. We evaluate the collectability of a loan based on our ability to collect the scheduled payments of principal and interest when due according to the contractual terms of the loan agreement. We generally see that if the obligor is delinquent on the loan they are also delinquent on site rent. If the scheduled payment is delinquent beyond the grace period required by law or by the loan agreement, notice is given to start the collection process. A specific allowance is estimated on the past due loans based on historical delinquency data and current delinquency levels. Credit quality is evaluated at the inception of the receivable. Factors that are considered in order to determine the credit quality of the applicant include, but are not limited to: rental payment history; home debt to income ratio; loan value to the collateralized asset; total debt to income ratio; length of employment; previous landlord references; and FICO scores. Other receivables are generally comprised of amounts due from residents for rent and related charges, home sale proceeds receivable from sales near year end and various other miscellaneous receivables. Accounts receivable from residents are typically due within 30 days and stated at amounts due from residents net of an allowance for doubtful accounts. Accounts outstanding longer than the contractual payment terms are considered past due. We evaluate the recoverability of our receivables whenever events occur or there are changes in circumstances such that management believes it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan and lease agreements. Receivables related to community rents are reserved when we believe that collection is less than probable, which is generally after a resident balance reaches 60 to 90 days past due. Restricted Cash Restricted cash consists of amounts held in deposit for tax, insurance and repair escrows held by lenders in accordance with certain debt agreements. At December 31, 2017 and 2016, $13.4 million and $17.1 million of restricted cash, respectively, was included as a component of Other assets, net on the Consolidated Balance Sheets. Identified Intangible Assets The Company amortizes identified intangible assets that are determined to have finite lives over the period the assets are expected to contribute directly or indirectly to the future cash flows of the property or business. The carrying amounts of the identified intangible assets are included in Other assets, net on our Consolidated Balance Sheets. Refer to Note 5, “Intangible Assets,” for additional information. Deferred Taxes We are subject to certain state taxes that are considered to be income taxes and have certain subsidiaries that are taxed as regular corporations for U.S. (i.e., federal, state, local, etc.) and non-U.S. income tax purposes. Deferred tax assets or liabilities are recognized for temporary differences between the tax basis of assets and liabilities and their carrying amounts in the financial statements and net operating loss carryforwards in certain subsidiaries, including those domiciled in foreign jurisdictions, which may be realized in future periods if the respective subsidiary generates sufficient taxable income. Deferred tax assets and liabilities are measured using currently enacted tax rates. A valuation allowance is established if, based on the available evidence, it is considered more likely than not that some portion or all of the deferred tax assets will not be realized. Refer to Note 12, “Income Taxes,” for additional information. F - 12 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Deferred Financing Costs Deferred financing costs include fees and costs incurred to obtain long-term financing. The costs are amortized over the terms of the respective loans. Unamortized deferred financing costs are written off when debt is retired before the maturity date. Upon amendment of the line of credit or refinancing of mortgage debt, unamortized deferred financing costs are accounted for in accordance with FASB Accounting Standards Codification (“ASC”) 470-50-40, “Modifications and Extinguishments.” Share-Based Compensation Share-based compensation cost for service vesting restricted stock awards is measured based on the closing share price of our common stock on the date of grant. Share-based compensation for restricted stock awards with performance conditions is measured based on an estimate of shares expected to vest. If it is not probable that the performance conditions will be satisfied, we do not recognize compensation expense. We measure the fair value of awards with performance conditions using the closing price of our common stock as of the grant date to calculate compensation cost. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. We recognize compensation cost ratably over each tranche of shares based on the fair value estimated by the model. Share-based compensation cost for stock options is estimated at the grant date based on each option’s fair-value as calculated by the Binomial (lattice) option-pricing model. The Binomial (lattice) option-pricing model incorporates various assumptions including expected volatility, expected life, dividend yield, and interest rates. Refer to Note 10, “Share-Based Compensation” for additional information. Fair Value of Financial Instruments Our financial instruments consist of cash and cash equivalents, accounts and notes receivable, accounts payable, derivative instruments, debt and a contingent consideration liability. We utilize fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures, pursuant to FASB ASC 820, “Fair Value Measurements and Disclosures.” Refer to Note 16, “Fair Value of Financial Instruments,” for additional information regarding the estimates and assumptions used to estimate the fair value of each financial instrument class. Revenue Recognition Rental income attributable to site and home leases is recorded on a straight-line basis when earned from tenants. Leases entered into by tenants are generally for one year terms, but may range from month-to-month to two years and are renewable by mutual agreement from us and the resident, or in some cases, as provided by state statute. Revenue from the sale of manufactured homes is recognized upon transfer of title at the closing of the sales transaction. Interest income on notes receivable is recorded on a level yield basis over the life of the notes. We report real estate taxes collected from residents and remitted to taxing authorities in revenue. Refer to Note 17, “Recent Accounting Pronouncements,” for information regarding our adoption of ASU 2014-09 “Revenue from Contracts with Customers (Topic 606)” and the related updates subsequently issued by the FASB on January 1, 2018. Advertising Costs Advertising costs are expensed as incurred. As of December 31, 2017, 2016 and 2015, we had advertising costs of $5.9 million, $4.2 million and $3.9 million, respectively. Depreciation and Amortization Depreciation and amortization are computed on a straight-line basis over the estimated useful lives of the assets. Useful lives are 30 years for land improvements and buildings, 10 years for rental homes, seven to 15 years for furniture, fixtures and equipment, four to seven years for computer hardware and software, and seven to 15 years for intangible assets. Foreign Currency The assets and liabilities of our Canadian operations, where the functional currency is the Canadian dollar, are translated into U.S. dollars using the exchange rate in effect as of the balance sheet date. Income statement amounts are translated at the average exchange rate prevailing during the period. The resulting translation adjustments are recorded as a component of accumulated other comprehensive income (loss). F - 13 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Foreign currency exchange gains and losses arising from fluctuations in currency exchange rates on transactions and the effects of remeasurement of monetary balances denominated in currencies other than the functional currency are recorded in earnings. For the year ended December 31, 2017, we recorded a foreign currency translation gain of $5.9 million within Other income / (expense), net on our Consolidated Statements of Operations, as compared to a foreign currency translation loss of $5.0 million, for the year ended December 31, 2016. We had no foreign currency translation impact for the year ended December 31, 2015. Derivative Instruments and Hedging Activities We do not enter into derivative instruments for speculative purposes. We adjust our balance sheet on a quarterly basis to reflect the current fair market value of our derivatives. We use standard market conventions to determine the fair values of derivative instruments, including the quoted market prices or quotes from brokers or dealers for the same or similar instruments. All methods of assessing fair value result in a general approximation of value and such value may never actually be realized. Changes in the fair value of derivatives are recorded in earnings. As of December 31, 2017 and 2016, the fair value of our derivatives was zero. Refer to Note 15, “Derivative Instruments and Hedging Activities” for additional information. F - 14 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. Real Estate Acquisitions and Dispositions 2017 Acquisitions In December 2017, we acquired Colony in the Wood (“Colony in the Wood”), an age-restricted MH community with 383 sites located in Port Orange, Florida. In November 2017, we acquired Emerald Coast RV Beach Resort (“Emerald Coast”), an MH and RV community with 201 sites located in Panama City Beach, Florida. In September 2017, we acquired three age-restricted MH communities: Lazy J Ranch (“Lazy J Ranch”), with 220 sites in Arcata, California; Ocean West (“Ocean West”), with 130 sites in McKinleyville, California; and Caliente Sands (“Caliente Sands”), with 118 sites in Cathedral City, California. In July 2017, we acquired Pismo Dunes RV Resort (“Pismo Dunes”), an age-restricted RV community with 331 sites located in Pismo Beach, California. In June 2017, we acquired Arbor Woods (“Arbor Woods”), a MH community with 458 sites located in Superior Township, Michigan. In May 2017, we acquired Sunset Lakes RV Resort (“Sunset Lakes”), a RV resort with 498 sites located in Hillsdale, Illinois. In March 2017, we acquired Far Horizons 49er Village RV Resort Inc. (“49er Village”), a RV resort with 328 sites located in Plymouth, California. The following table summarizes the amounts of assets acquired net of liabilities assumed at the acquisition date and the consideration paid for the acquisitions completed in 2017 (in thousands): At Acquisition Date (1) Investment in property Notes receivable Inventory of manufactured homes In-place leases and other intangible assets Total identifiable assets acquired net of liabilities assumed Consideration Cash Equity Liabilities assumed Cash proceeds from seller Total consideration Lazy J Ranch Emerald Coast Colony in the Wood $ 32,478 $ 19,400 $13,938 $ 9,453 $ 8,640 $ 21,260 $ 15,725 $ 7,835 $ 12,890 $141,619 23 Caliente Sands Sunset Lakes Arbor Woods Ocean West 49er Village Pismo Dunes Total 23 — — — — — — — — — — — 2 — 21 — 100 360 220 210 660 465 730 — — 488 210 110 2,600 $ 32,478 $ 19,500 $14,300 $ 9,673 $ 8,871 $ 21,920 $ 16,943 $ 8,045 $ 13,000 $144,730 $ 32,478 $ 19,500 $14,300 $ 5,081 $ 8,871 $ — $ 14,943 $ 8,045 $ 13,000 $116,218 — 28,410 5,102 — — 26,410 510 — — — — 4,592 2,000 — — — — — — — — — (5,000) $ 32,478 $ 19,500 $14,300 $ 9,673 $ 8,871 $ 21,920 $ 16,943 $ 8,045 $ 13,000 $144,730 — (5,000) — — — — — (1) The purchase price allocations in the table above are preliminary and may be adjusted as final costs and valuations are determined. F - 15 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The amount of total revenues and net income included in the Consolidated Statements of Operations for the year ended December 31, 2017 related to the acquisitions completed in 2017 are set forth in the following table (in thousands): Total revenues Net income Year Ended December 31, 2017 (unaudited) $ $ 8,857 2,248 The following unaudited pro forma financial information presents the results of our operations for the year ended December 31, 2017 and 2016, as if the properties acquired in 2017 had been acquired on January 1, 2016. The unaudited pro forma results reflect certain adjustments for items that are not expected to have a continuing impact, such as adjustments for transaction costs incurred, management fees, and purchase accounting. The information presented below has been prepared for comparative purposes only and does not purport to be indicative of either future results of operations or the results of operations that would have actually occurred had the acquisitions been consummated on January 1, 2016 (in thousands, except per-share data): Year Ended December 31, (unaudited) 2017 2016 Total revenues Net income attributable to Sun Communities, Inc. common stockholders Net income per share attributable to Sun Communities, Inc. common stockholders - basic Net income per share attributable to Sun Communities, Inc. common stockholders - diluted $ $ $ $ 992,770 68,404 0.90 0.89 $ $ $ $ 850,376 22,720 0.34 0.34 Also in 2017, we acquired Carolina Pines RV Resort, an undeveloped parcel of land (“Carolina Pines” formerly known as Bear Lake), near Myrtle Beach, South Carolina, for $5.9 million. This land parcel has been entitled and zoned to build an 841 site RV resort. Transaction costs of $9.8 million, $31.9 million, and $17.8 million have been incurred for the years ended December 31, 2017, 2016, and 2015, respectively. These costs are presented as Transaction costs in our Consolidated Statements of Operations. 2016 Acquisitions In June 2016, we acquired all of the issued and outstanding shares of common stock of Carefree Communities Inc. (“Carefree”) through the Operating Partnership for an aggregate purchase price of $1.68 billion. Carefree owned 103 MH and RV communities, comprising over 27,000 sites. At the closing, we issued 3,329,880 shares of common stock at $67.57 per share (or $225.0 million in common stock) to the seller and the Operating Partnership paid the balance of the purchase price in cash. Approximately $1.0 billion of the cash payment was applied simultaneously to repay debt on the properties owned by Carefree. The Operating Partnership funded the cash portion of the purchase price in part with proceeds from debt financings as described in Note 8, “Debt and Lines of Credit” and net proceeds of $385.4 million from an underwritten public offering of 6,037,500 shares of common stock at a price of $66.50 per share in March 2016. F - 16 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS We have allocated the “investment in property” balances for Carefree to the respective balance sheet line items upon completion of a purchase price allocation in accordance with the FASB ASC Topic 805 “Business Combinations,” as set forth in the table below (in thousands): At Acquisition Date Investment in property Ground leases In-place leases Deferred tax liability Other liabilities Inventory of manufactured homes Below market lease Total identifiable assets acquired and liabilities assumed Consideration Cash and equity $ $ $ Carefree 1,670,981 33,270 35,010 (23,637) (15,665) 13,521 (29,340) 1,684,140 1,684,140 Additionally, during 2016, we acquired seven RV resorts and one MH community for total consideration of $89.7 million. We added 1,677 sites in six states as a result of these acquisitions. The amount of revenue and net income included in the Consolidated Statements of Operations for the year ended December 31, 2016 related to the Carefree acquisition is set forth in the following table (in thousands): Carefree Acquisition Revenue Net income Dispositions Year Ended December 31, 2016 (unaudited) $ $ 97,836 9,070 There were no property dispositions during 2017. During the fourth quarter of 2016, we terminated a ground lease arrangement in one of the communities acquired in the Carefree transaction. No gain or loss resulted from the ground lease termination. 3. Collateralized Receivables and Transfers of Financial Assets We previously completed various transactions with an unrelated entity involving our notes receivable under which we received cash proceeds in exchange for relinquishing our right, title, and interest in certain notes receivable. We have no further obligations or rights with respect to the control, management, administration, servicing, or collection of the installment notes receivable. However, we are subject to certain recourse provisions requiring us to purchase the underlying homes collateralizing such notes, in the event of a note default and subsequent repossession of the home by the unrelated entity. The recourse provisions are considered to be a form of continuing involvement, and therefore these transferred loans did not meet the requirements for sale accounting. We continue to recognize these transferred loans on our balance sheet and refer to them as collateralized receivables. The proceeds from the transfer have been recognized as a secured borrowing. In the event of a note default and subsequent repossession of a manufactured home by the unrelated entity, the terms of the agreement require us to repurchase the manufactured home. Default is defined as the failure to repay the installment note receivable according to contractual terms. The repurchase price is calculated as a percentage of the outstanding principal balance of the collateralized receivable, plus any outstanding late fees, accrued interest, legal fees, and escrow advances associated with the installment note receivable. The percentage used to determine the repurchase price of the outstanding principal balance on the installment note receivable is based on the number of payments made on the note. In general, the repurchase price is determined as follows: F - 17 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Number of Payments Fewer than or equal to 15 Greater than 15 but fewer than 64 Equal to or greater than 64 but fewer than 120 120 or more Repurchase Percentage 100% 90% 65% 50% The transferred assets have been classified as Collateralized receivables, net and the cash proceeds received from these transactions have been classified as Secured borrowings on collateralized receivables within the Consolidated Balance Sheets. The balance of the collateralized receivables was $128.2 million (net of allowance of $0.9 million) and $143.9 million (net of allowance of $0.6 million) as of December 31, 2017, and December 31, 2016, respectively. The receivables have a weighted average interest rate and maturity of 10.0 percent and 15.3 years as of December 31, 2017, and 10.0 percent and 15.7 years as of December 31, 2016. The outstanding balance on the secured borrowing was $129.2 million and $144.5 million as of December 31, 2017, and December 31, 2016, respectively. The collateralized receivables earn interest income, and the secured borrowings accrue interest expense at the same interest rates. The amount of interest income and expense recognized was $13.2 million, $14.0 million, and $13.2 million for the years ended December 31, 2017, 2016, and 2015, respectively. The balances of the collateralized receivables and secured borrowings fluctuate. The balances increase as additional notes receivable are transferred and exchanged for cash proceeds. The balances are reduced as the related collateralized receivables are collected from the customers, or as the underlying collateral is repurchased. The change in the aggregate gross principal balance of the collateralized receivables is as follows (in thousands): Beginning balance Financed sales of manufactured homes Principal payments and payoffs from our customers Principal reduction from repurchased homes Total activity Ending balance Year Ended December 31, 2017 December 31, 2016 $ $ 144,477 8,153 (12,186 ) (11,262 ) (15,295 ) 129,182 $ $ 140,440 23,771 (11,937) (7,797) 4,037 144,477 The following table sets forth the allowance for the collateralized receivables (in thousands): Beginning balance Lower of cost or market write-downs Increase to reserve balance Total activity Ending balance Year Ended December 31, 2017 December 31, 2016 $ $ (607) $ 1,024 (1,353) (329) (936) $ (672) 617 (552) 65 (607) F - 18 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. Notes and Other Receivables The following table sets forth certain information regarding notes and other receivables (in thousands): Installment notes receivable on manufactured homes, net Other receivables, net Total notes and other receivables, net Installment Notes Receivable on Manufactured Homes Year Ended December 31, 2017 December 31, 2016 $ $ 115,797 $ 47,699 163,496 $ 59,320 21,859 81,179 The installment notes of $115.8 million (net of allowance of $0.4 million) and $59.3 million (net of allowance of $0.2 million) as of December 31, 2017 and December 31, 2016, respectively, are collateralized by manufactured homes. The notes represent financing provided to purchasers of manufactured homes primarily located in our communities and require monthly principal and interest payments. The notes have a weighted average interest rate (net of servicing costs) and maturity of 8.2 percent and 17.2 years as of December 31, 2017, and 8.3 percent and 16.0 years as of December 31, 2016. The change in the aggregate gross principal balance of the installment notes receivable is as follows (in thousands): Beginning balance Financed sales of manufactured homes Acquired notes Principal payments and payoffs from our customers Principal reduction from repossessed homes Total activity Ending balance Allowance for Losses for Installment Notes Receivable Year Ended December 31, 2017 December 31, 2016 $ $ 59,524 $ 66,104 23 (6,128 ) (3,349 ) 56,650 116,174 $ 20,610 41,322 3,521 (4,363) (1,566) 38,914 59,524 The following table sets forth the allowance change for the installment notes receivable (in thousands): Beginning balance Lower of cost or market write-downs Increase to reserve balance Total activity Ending balance Other Receivables Year Ended December 31, 2017 December 31, 2016 $ $ (205) $ 170 (342) (172 ) (377) $ (192) 128 (141) (13) (205) As of December 31, 2017, other receivables were comprised of amounts due from residents for rent, and water and sewer usage of $7.0 million (net of allowance of $1.5 million), home sale proceeds of $13.8 million, insurance receivables of $24.2 million, and rebates and other receivables of $2.7 million. As of December 31, 2016, other receivables were comprised of amounts due from residents for rent, and water and sewer usage of $6.0 million (net of allowance of $1.5 million), home sale proceeds of $11.6 million, insurance receivables of $2.3 million, rebates and other receivables of $2.0 million. F - 19 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5. Intangible Assets Our intangible assets include ground leases, in-place leases, franchise fees, and other intangible assets. These intangible assets are recorded in Other assets, net on the Consolidated Balance Sheets. In December 2017, we acquired 25.0 percent of the land that was previously under a ground lease at one of our California communities for $4.0 million, and amended the ground lease agreement to include an option to purchase an additional 25.0 percent of the land. As a result of these transactions, we wrote off $1.1 million of the gross carrying amount of the ground lease intangible and $0.2 million of accumulated amortization. The $0.9 million net write off is included within Property operating and maintenance expense in our Consolidated Statements of Operations for the year ended December 31, 2017. The gross carrying amounts and accumulated amortization are as follows (in thousands): December 31, 2017 December 31, 2016 Intangible Asset Ground leases In-place leases Franchise fees and other intangible assets Total Useful Life 8-57 years 7 years 15 years Gross Carrying Amount $ 32,165 100,843 1,880 Accumulated Amortization $ (1,409) $ (45,576) (1,451) (48,436) $ Gross Carrying Amount 33,270 98,235 1,880 Accumulated Amortization $ (600) (31,796) (1,155) (33,551) $ 134,888 $ 133,385 $ Total amortization expenses related to our intangible assets are as follows (in thousands): Intangible Asset Ground leases In-place leases Franchise fees and other intangible assets Total Year Ended December 31, 2017 2016 2015 $ $ 809 $ 600 $ 13,812 301 11,559 535 14,922 $ 12,694 $ — 8,299 516 8,815 We anticipate amortization expense for our intangible assets to be as follows for the next five years (in thousands): Estimated expense $ 14,507 $ 13,591 $ 11,863 $ 11,471 $ 6,870 2018 2019 Year 2020 2021 2022 6. Investment in Affiliates Origen Services At December 31, 2017 and 2016, we had a 22.9 percent ownership interest in Origen Services, an entity that specializes in resident screening services. We have suspended equity method accounting as the carrying value of our investment is zero. Origen Financial, Inc. (“Origen”) Through Sun OFI, LLC, a taxable REIT subsidiary, we previously owned 5,000,000 shares of common stock of Origen, which approximated an ownership interest of 19.3 percent. During 2016, we sold all 5,000,000 shares of common stock in Origen to an unrelated party for aggregate proceeds of $0.5 million. The carrying value of our investment prior to the sale was zero. During 2015, we received a distribution of $7.5 million from Origen. F - 20 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7. Consolidated Variable Interest Entities We consolidate Rudgate Village SPE, LLC; Rudgate Clinton SPE, LLC; and Rudgate Clinton Estates SPE, LLC (collectively, “Rudgate”) as a variable interest entity (“VIE”). We evaluated our arrangement with this property under the guidance set forth in FASB ASC Topic 810 “Consolidation.” We concluded that Rudgate qualified as a VIE where we are the primary beneficiary, as we have power to direct the significant activities, absorb the significant losses and receive the significant benefits from the entity. During 2017, we acquired the noncontrolling equity interests in Wildwood Mobile Home Park (“Wildwood”) held by third parties for total consideration of $0.1 million. Prior to this acquisition, we consolidated Wildwood as a VIE. The acquisition resulted in the Company owning a 100.0 percent controlling interest in Wildwood, and was deemed a VIE reconsideration event. We concluded that Wildwood was no longer a VIE. The following table summarizes the assets and liabilities included in our Consolidated Balance Sheets after appropriate eliminations have been made (in thousands): ASSETS Investment property, net Other assets Total Assets LIABILITIES AND STOCKHOLDERS’ EQUITY Debt Other liabilities Noncontrolling interests Total Liabilities and Stockholders’ Equity December 31, 2017 December 31, 2016 $ $ $ $ 50,193 1,659 51,852 $ $ 41,970 $ 1,468 4,285 47,723 $ 88,987 3,054 92,041 62,111 1,998 (2,982) 61,127 Investment property, net and other assets related to the consolidated VIEs comprised approximately 0.8 percent and 1.6 percent of our consolidated total assets at December 31, 2017 and December 31, 2016, respectively. Debt and other liabilities comprised approximately 1.2 percent and 1.9 percent of our consolidated total liabilities at December 31, 2017 and December 31, 2016, respectively. Noncontrolling interests related to the consolidated VIEs, on an absolute basis, comprised less than 1.0 percent of our consolidated total equity at December 31, 2017 and December 31, 2016. 8. Debt and Lines of Credit The following table sets forth certain information regarding debt (in thousands): Carrying Amount Weighted Average Years to Maturity Weighted Average Interest Rates December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Collateralized term loans - Life Companies Collateralized term loans - FNMA Collateralized term loans - CMBS Collateralized term loans - FMCC Secured borrowings Lines of credit Preferred OP units - mandatorily redeemable Total debt 1,044,246 $ 1,026,014 410,747 386,349 888,705 $ 1,046,803 492,294 391,765 129,182 41,257 144,477 100,095 41,443 45,903 $ 3,079,238 $ 3,110,042 13.9 5.6 5.0 6.9 15.3 3.1 5.0 8.9 12.2 6.6 5.6 7.9 15.7 3.6 5.4 8.5 3.9% 4.4% 5.1% 3.9% 10.0% 2.8% 6.7% 4.5% 3.9% 4.3% 5.2% 3.9% 10.0% 2.1% 6.9% 4.5% F - 21 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Collateralized Term Loans In December 2017, we defeased a $38.6 million collateralized term loan with a 5.25 percent fixed interest rate that was due to mature on June 1, 2022. As a result of the transaction we recognized a loss on extinguishment of debt of $5.2 million in our Consolidated Statements of Operations. Concurrent with the defeasance, we entered into a new $100.0 million collateralized term loan, encumbered by the same property, with a 4.25 percent fixed rate of interest and 30-year term. Refer to Note 20, “Subsequent Events,” for additional information regarding collateralized term loan repayments after December 31, 2017. In September 2017, in connection with the Ocean West acquisition, we assumed a $4.6 million collateralized term loan with Fannie Mae, with an interest rate of 4.34 percent and a remaining term of 9.8 years. In June 2017, we entered into a $77.0 million collateralized term loan which bears interest at a rate of 4.16 percent amortizing over a 25-year term. We also repaid a $3.9 million collateralized term loan with an interest rate of 6.54 percent that was due to mature on August 31, 2017. As a result of the repayment transaction, we recognized a loss on extinguishment of debt of $0.3 million in our Consolidated Statements of Operations. During the first quarter of 2017, we defeased an $18.9 million collateralized term loan with an interest rate of 6.49 percent that was due to mature on August 1, 2017, releasing one encumbered community. As a result of the transaction, we recognized a loss on extinguishment of debt of $0.5 million in our Consolidated Statements of Operations. In addition, we repaid a $10.0 million collateralized term loan with an interest rate of 5.57 percent that was due to mature on May 1, 2017, releasing an additional encumbered community. During the fourth quarter of 2016, we repaid a total of $79.1 million aggregate principal amount of collateralized term loans that were due to mature during 2017, releasing 10 communities. Also in the fourth quarter of 2016, we entered into a promissory note $58.5 million that bears interest at a rate of 3.33 percent and has a seven-year term. The repayment of the note is interest only for the entire term. In September 2016, 15 subsidiaries of the Operating Partnership entered into a promissory note for total borrowings of $139.0 million with PNC Bank, as lender (the “Freddie Mac Financing”). Five of the loans totaling $70.2 million bear interest at a rate of 3.93 percent and have ten-year terms. The remaining ten loans totaling $68.8 million bear interest at a rate of 3.75 percent and have seven-year terms. The Freddie Mac Financing provides for principal and interest payments to be amortized over 30 years. Proceeds from the Freddie Mac Financing described above and the underwritten registered public equity offering in September 2016 described in Note 9, “Equity and Mezzanine Securities” were utilized to repay $62.1 million in mortgage loans and $300.0 million on our revolving loan under our senior revolving credit facility (refer to Lines of Credit below for additional information regarding the A&R Facility.) In June 2016, 17 subsidiaries of the Operating Partnership entered into a Master Credit Facility Agreement (the “Fannie Mae Credit Agreement”) with Regions Bank, as lender. Pursuant to the Fannie Mae Credit Agreement, Regions Bank loaned a total of $338.0 million under a senior secured credit facility, comprised of two ten-year term loans in the amount of $300.0 million and $38.0 million, respectively (collectively the “Fannie Mae Financing”). The $300.0 million term loan bears interest at 3.69 percent and the $38.0 million term loan bears interest at 3.67 percent for a blended rate of 3.69 percent. The Fannie Mae Financing provides for principal and interest payments to be amortized over 30 years. The Fannie Mae Financing is secured by mortgages encumbering 17 MH communities comprised of real and personal property owned by the borrowers. Additionally, the Company and the Operating Partnership have provided a guaranty of the non-recourse carve-out obligations of the borrowers under the Fannie Mae Financing. Additionally, in June 2016, three subsidiaries of the Operating Partnership entered into mortgage loan documents (the “NML Loan Documents”) with The Northwestern Mutual Life Insurance Company (“NML”). Pursuant to the NML Loan Documents, NML made three portfolio loans to the subsidiary borrowers in the aggregate amount of $405.0 million. NML loaned $162.0 million under a ten-year term loan to two of the subsidiary borrowers (the “Portfolio A Loan”). The Portfolio A Loan bears interest at 3.53 percent and is secured by deeds of trust encumbering seven MH communities and one RV community. NML also loaned $163.0 million under a 12-year term loan (the “Portfolio B Loan”) to one subsidiary which is also a borrower under the Portfolio A Loan. The Portfolio B Loan bears interest at 3.71 percent and is secured by deeds of trust and a ground lease encumbering eight MH communities. NML also loaned $80.0 million under a 12-year term loan (the “Portfolio C Loan” and, collectively, with the Portfolio A Loan and the Portfolio B Loan, the “NML Financing”) to one subsidiary borrower. The Portfolio C Loan bears interest at 3.71 F - 22 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS percent and is secured by a mortgage encumbering one RV community. The MH and RV communities noted above that secure the NML Financing were acquired as part of the Carefree transaction (Refer to Note 2, “Real Estate Acquisitions and Dispositions”). The NML Financing is generally non-recourse, however, the borrowers under the NML Financing and the Operating Partnership are responsible for certain customary non-recourse carveouts. In addition, the NML Financing will be fully recourse to the subsidiary borrowers and the Operating Partnership if: (a) the borrowers violate the prohibition on transfer covenants set forth in the loan documents; or (b) a voluntary bankruptcy proceedings is commenced by the borrowers or an involuntary bankruptcy, liquidation, receivership or similar proceeding has commenced against the borrowers and remains undismissed for a period of 90 days. Proceeds from the Fannie Mae Financing and NML Financing were primarily used to fund the cash portion of the Carefree acquisition (Refer to Note 2, “Real Estate Acquisitions and Dispositions”). The collateralized term loans totaling $2.9 billion as of December 31, 2017, are secured by 190 properties comprised of 75,198 sites representing approximately $3.4 billion of net book value. Secured Borrowings Refer to Note 3, “Collateralized Receivables and Transfers of Financial Assets,” for additional information regarding our collateralized receivables and secured borrowings transactions. Preferred OP units Preferred OP units at December 31, 2017 and 2016 include $34.7 million of Aspen preferred OP units issued by the Operating Partnership. As of December 31, 2017, these units are convertible indirectly into 459,499 shares of our common stock. Subject to certain limitations, at any time prior to January 1, 2024, the holder of each Aspen preferred OP unit at its option may convert such Aspen preferred OP unit into: (a) if the market price of our common stock is $68.00 per share or less, 0.397 common OP units; or (b) if the market price of our common stock is greater than $68.00 per share, the number of common OP units is determined by dividing (i) the sum of (A) $27.00 plus (B) 25 percent of the amount by which the market price of our common stock exceeds $68.00 per share, by (ii) the per-share market price of our common stock. The current preferred distribution rate is 6.5 percent. On January 2, 2024, we are required to redeem all Aspen preferred OP units that have not been converted to common OP units. Preferred OP units also include $6.7 million and $11.2 million at December 31, 2017 and 2016, respectively, of Series B-3 preferred OP units, which are not convertible. During the three months ended December 31, 2017, we redeemed 44,599 of the Series B-3 preferred OP units at an average redemption price per unit, which included accrued and unpaid distributions, of $101.143755. In the aggregate, we paid $4.5 million to redeem these units. Refer to Note 20, “Subsequent Events” for additional information regarding Series B-3 preferred OP unit redemptions after December 31, 2017. Subject to certain limitations, (a) during the 90-day period beginning on each of the tenth through fifteenth anniversaries of the issue date of the applicable Series B-3 preferred OP units, (b) at any time after the fifteenth anniversary of the issue date of the applicable Series B-3 preferred OP units, or (c) after our receipt of notice of the death of the electing holder of a Series B-3 preferred OP unit, each holder of Series B-3 preferred OP units may require us to redeem such holder's Series B-3 preferred OP units at the redemption price of $100.00 per unit. In addition, at any time after the fifteenth anniversary of the issue date of the applicable Series B-3 preferred OP units we may redeem, at our option, all of the Series B-3 preferred OP units of any holder thereof at the redemption price of $100.00 per unit. Lines of Credit In April 2017, we amended and restated our credit agreement (the “A&R Credit Agreement”) with Citibank, N.A. (“Citibank”) and certain other lenders. Pursuant to the A&R Credit Agreement, we have a senior revolving credit facility with Citibank and certain other lenders in the amount of $650.0 million, comprised of a $550.0 million revolving loan and a $100.0 million term loan (the “A&R Facility”). The A&R Credit Agreement has a four-year term ending April 25, 2021, which can be extended for two additional six-month periods at our option, subject to the satisfaction of certain conditions as defined in the credit agreement. The A&R Credit Agreement also provides for, subject to the satisfaction of certain conditions, additional commitments in an amount not to exceed $350.0 million. If additional borrowings are made pursuant to any such additional commitments, the aggregate borrowing limit under the A&R Facility may be increased up to $1.0 billion. The A&R Facility bears interest at a floating rate based on the Eurodollar rate plus a margin that is determined based on our leverage ratio calculated in accordance with the A&R Credit Agreement, which margin can range from 1.35 percent to 2.20 percent F - 23 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS for the revolving loan and 1.30 percent to 2.15 percent for the term loan. As of December 31, 2017, the margin on our leverage ratio was 1.35 percent and 1.30 percent on the revolving and term loans, respectively. We had $37.8 million in borrowings on the revolving loan and no borrowings on the term loan totaling $37.8 million as of December 31, 2017, with a weighted average interest rate of 2.79 percent. The A&R Facility replaced our $450.0 million credit facility (the “Previous Facility”), which was scheduled to mature on August 19, 2019. At the time of the closing of the A&R Facility, there were $220.8 million in borrowings under the Previous Facility. At December 31, 2016, under the Previous Facility, we had $42.3 million in borrowings on the revolving loan and $58.0 million in borrowings on the term loan totaling $100.3 million with a weighted average interest rate of 2.14 percent. The A&R Facility provides, and the Previous Facility provided, us with the ability to issue letters of credit. Our issuance of letters of credit does not increase our borrowings outstanding under our line of credit, but does reduce the borrowing amount available. At December 31, 2017 and December 31, 2016, $1.3 million and $4.6 million, respectively, of availability was used to back standby letters of credit. We have a $12.0 million manufactured home floor plan facility renewable indefinitely until our lender provides us at least a twelve month notice of their intent to terminate the agreement. The interest rate is 100 basis points over the greater of the prime rate as quoted in the Wall Street Journal on the first business day of each month or 6.0 percent. At December 31, 2017, the effective interest rate was 7.0 percent. The outstanding balance was $4.0 million and $2.8 million as of December 31, 2017 and December 31, 2016, respectively. Covenants Pursuant to the terms of the A&R Facility, we are subject to various financial and other covenants. The most restrictive of our debt agreements place limitations on secured borrowings and contain minimum fixed charge coverage, leverage, distribution, and net worth requirements. At December 31, 2017, we were in compliance with all covenants. In addition, certain of our subsidiary borrowers own properties that secure loans. These subsidiaries are consolidated within our accompanying Consolidated Financial Statements, however, each of these subsidiaries’ assets and credit are not available to satisfy the debts and other obligations of the Company, any of its other subsidiaries or any other person or entity. Long-term Debt Maturities As of December 31, 2017, the total of maturities and amortization of our debt (excluding premiums and discounts) and lines of credit during the next five years were as follows (in thousands): Maturities and Amortization By Year Mortgage loans payable: Maturities Principal amortization Secured borrowings Lines of credit Preferred OP units - mandatorily redeemable Total Total Due 2018 2019 2020 2021 2022 Thereafter $ 2,183,609 674,113 129,182 41,809 $ 26,186 55,564 5,541 — $ 64,314 56,904 6,036 4,009 $ 58,078 57,593 6,583 — $ 270,680 56,612 7,069 37,800 $ 82,544 54,001 7,302 — $ 1,681,807 393,439 96,651 — 41,443 $ 3,070,156 6,780 $ 94,071 — $ 131,263 — $ 122,254 — $ 372,161 — $ 143,847 34,663 $ 2,206,560 9. Equity and Mezzanine Securities Public Equity Offerings In May 2017, we closed an underwritten registered public offering of 4,830,000 shares of common stock at a price of $86.00 per share. Proceeds from the offering were $408.9 million after deducting expenses related to the offering, which were used to repay F - 24 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS borrowings outstanding under the revolving loan under our A&R Facility, to fund acquisitions and for working capital and general corporate purposes. In September 2016, we closed an underwritten registered public offering of 3,737,500 shares of common stock at a net price of $75.89 per share. Proceeds from the offering were approximately $283.6 million after deducting expenses related to the offering, which were used to repay borrowings outstanding under the revolving loan under our Previous Facility. In June 2016, at the closing of the Carefree acquisition, we issued the seller 3,329,880 shares of our common stock at an issuance price of $67.57 per share or $225.0 million in common stock. Refer to Note 2, “Real Estate Acquisitions and Dispositions.” In March 2016, we closed an underwritten registered public offering of 6,037,500 shares of common stock at a price of $66.50 per share. Net proceeds from the offering were approximately $385.4 million after deducting discounts and expenses related to the offering, which we used to fund a portion of the purchase price for the acquisition of Carefree Communities. At the Market Offering Sales Agreement In July 2017, we entered into a new at the market offering sales agreement (the “Sales Agreement”) with BMO Capital Markets Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., Robert W. Baird & Co. Incorporated, Fifth Third Securities, Inc., RBC Capital Markets, LLC, BTIG, LLC, Jefferies LLC, Credit Suisse Securities (USA) LLC and Samuel A. Ramirez & Company, Inc. (each, a “Sales Agent;” collectively, the “Sales Agents”), whereby we may offer and sell shares of our common stock, having an aggregate offering price of up to $450.0 million, from time to time through the Sales Agents. The Sales Agents are entitled to compensation in an agreed amount not to exceed 2.0 percent of the gross price per share for any shares sold from time to time under the Sales Agreement. Concurrent with the entry into the Sales Agreement, we terminated our previous sales agreement dated June 17, 2015, with BMO Capital Markets Corp., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc., (the “Prior Agreement”). The Prior Agreement had an aggregate offering price of up to $250.0 million. We did not incur any penalties in connection with termination of the Prior Agreement. Issuances of common stock under the Sales Agreement during 2017 were as follows: Quarter Ended December 31, 2017 Common Stock Issued 321,800 Weighted Average Sales Price 93.33 $ $ Net Proceeds (in Millions) 29.7 Issuances of common stock under the Prior Agreement during 2017 and 2016 were as follows: Quarter Ended June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2016 June 30, 2016 Common Stock Issued 400,000 280,502 19,498 620,828 485,000 Weighted Average Sales Price 85.01 $ $ $ $ $ 76.47 75.90 76.81 71.86 $ $ $ $ $ Net Proceeds (in Millions) 33.6 21.2 1.5 47.1 34.4 Issuances of Common Stock and Common OP Units In July 2017, we issued 298,900 shares of common stock totaling $26.4 million in connection with the acquisition of Pismo Dunes. In June 2017, we issued a total of 23,311 common OP units for total consideration of $2.0 million in connection with acquisition activity during the three months ended June 30, 2017. Conversions Subject to certain limitations, holders can convert certain series of stock and OP units to shares of our common stock at any time. Below is the activity of conversions during 2017 and 2016: F - 25 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Conversion Rate 1 2.439 0.4444 0.4444 1.11 Year Ended December 31, 2017 Year Ended December 31, 2016 Units/Shares 36,055 21,919 10,000 158,036 16,806 Common Stock 36,055 53,456 4,440 70,238 18,651 Units/Shares 104,106 20,691 120,906 385,242 7,043 Common Stock 104,106 50,458 53,733 171,218 7,815 Series Common OP unit Series A-1 preferred OP unit Series A-4 preferred OP unit Series A-4 preferred stock Series C preferred OP unit Dividends Dividend distributions declared for the quarter ended December 31, 2017 are as follows: Dividend Common Stock, Common OP units and Restricted Stock Series A-4 Cumulative Convertible Preferred Stock Record Date 12/29/2017 12/21/2017 Payment Date 1/16/2018 $ 1/2/2018 $ Distribution per Share Total Distribution 0.67 $ 0.40625 $ 55,225 441 Redemptions If certain change of control transactions occur or if our common stock ceases to be listed or quoted on an exchange or quotation system, then at any time after November 26, 2019, we or the holders of shares of Series A-4 preferred stock and Series A-4 preferred OP units may cause all or any of those shares or units to be redeemed for cash at a redemption price equal to the sum of (i) the greater of (x) the amount that the redeemed shares of Series A-4 preferred stock and Series A-4 preferred OP units would have received in such transaction if they had been converted into shares of our common stock immediately prior to such transaction, or (y) $25.00 per share, plus (ii) any accrued and unpaid distributions thereon to, but not including, the redemption date. In November 2017, we redeemed all of the outstanding shares of our 7.125% Series A Cumulative Redeemable Preferred Stock. Holders received a cash payment of $25.14349 per share which included accrued and unpaid dividends. In the aggregate, the Company paid $85.5 million to redeem all of the 3,400,000 outstanding shares. In June 2017, we redeemed 438,448 shares of Series A-4 preferred stock and 200,000 shares of Series A-4 preferred OP units from certain of the Green Courte entities for total consideration of $24.7 million. Accrued dividends totaling $0.2 million were also paid in connection with the redemptions. The Green Courte entities were the sellers of the American Land Lease portfolio which we acquired in 2014 and 2015. Repurchase Program In November 2004, our Board of Directors authorized us to repurchase up to 1,000,000 shares of our common stock. We have 400,000 common shares remaining in the repurchase program. No common shares were repurchased during 2017 or 2016. There is no expiration date specified for the repurchase program. 10. Share-Based Compensation As of December 31, 2017, we have two share-based compensation plans; the Sun Communities, Inc. 2015 Equity Incentive Plan (“2015 Equity Incentive Plan”) and the First Amended and Restated 2004 Non-Employee Director Option Plan (“2004 Non- Employee Director Option Plan”). We believe granting equity awards will provide certain executives, key employees and directors additional incentives to promote our financial success, and promote employee and director retention by providing an opportunity to acquire or increase the direct proprietary interest of those individuals in our operations and future. Restricted Stock The majority of our share-based compensation is awarded as service vesting restricted stock grants to executives and key employees. We have also awarded restricted stock to our non-employee directors. We measure the fair value associated with these awards using the closing price of our common stock as of the grant date to calculate compensation cost. Employee awards typically vest F - 26 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS over several years and are subject to continued employment by the employee. Award recipients receive distribution payments on unvested shares of restricted stock. 2015 Equity Incentive Plan At the Annual Meeting of Stockholders held on July 20, 2015, the stockholders approved the 2015 Equity Plan. The 2015 Equity Plan had been adopted by the Board and was effective upon approval by our stockholders. The maximum number of shares of common stock that may be issued under the 2015 Equity Plan is 1,750,000 shares of our common stock, with 1,344,769 shares remaining for future issuance. 2004 Non-Employee Director Option Plan The director plan was approved by our stockholders at the Annual Meeting of Stockholders held on July 19, 2012. The director plan amended and restated in its entirety our 2004 Non-Employee Director Stock Option Plan. The types of awards that may be granted under the director plan are options, restricted stock and OP units. Only non-employee directors are eligible to participate in the director plan. The maximum number of options, restricted stock and OP units that may be issued under the Director Plan is 175,000 shares, with 26,754 shares remaining for future issuance. During the year ended December 31, 2017, shares were granted as follows: Award Type Plan 2017 Key Employees 2015 Equity Incentive Plan Shares Granted Grant Date Fair Value Per Share Vesting Type Vesting Anniversary Percentage 2,500 $ 84.18 (1) Time Based 2nd 2017 Executive Officers 2015 Equity Incentive Plan 100,000 $ 79.30 (2) Time Based 3rd 4th 5th 6th 3rd 4th 5th 6th 7th 2017 Executive Officers 2015 Equity Incentive Plan 100,000 $ 79.30 2017 Directors 2004 Non-Employee Director Option Plan 16,900 $ 79.64 (2) (1) Market & Performance Conditions Multiple tranches through March 2022 Time Based 3rd 100.0% (1) Grant date fair value is measured based on the closing price of our common stock on the date(s) shares are issued. (2) Share-based compensation for restricted stock awards with performance conditions is measured based on an estimate of shares expected to vest. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. F - 27 35.0% 35.0% 20.0% 5.0% 5.0% 20.0% 30.0% 35.0% 10.0% 5.0% SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS During the year ended December 31, 2016, shares were granted as follows: Award Type Plan 2016 Executive Officers 2015 Equity Incentive Plan Shares Granted Grant Date Fair Value Per Share Vesting Type Vesting Anniversary Percentage 65,000 $ 69.25 (2) Time Based 3rd 4th 5th 6th 7th 20.0% 30.0% 35.0% 10.0% 5.0% Multiple tranches through March 2022 3rd 3rd 4th 5th 6th 7th 100.0% 35.0% 35.0% 20.0% 5.0% 5.0% 2016 Executive Officers 2015 Equity Incentive Plan 65,000 $ 69.25 2016 Directors 2004 Non-Employee Director Option Plan 16,800 $ 69.45 2016 Key Employees 2015 Equity Incentive Plan 81,000 $ 69.70 (2) (1) (1) Market & Performance Conditions Time Based Time Based (1) Grant date fair value is measured based on the closing price of our common stock on the date(s) shares are issued. (2) Share-based compensation for restricted stock awards with performance conditions is measured based on an estimate of shares expected to vest. We estimate the fair value of share-based compensation for restricted stock with market conditions using a Monte Carlo simulation. The following table summarizes our restricted stock activity for the years ended December 31, 2017, 2016, and 2015: Unvested restricted shares at January 1, 2015 Granted Vested Forfeited Unvested restricted shares at December 31, 2015 Granted Vested Forfeited Unvested restricted shares at December 31, 2016 Granted Vested Forfeited Unvested restricted shares at December 31, 2017 Number of Shares Weighted Average Grant Date Fair Value 688,743 $ $ 216,800 (85,021) $ (7,262) $ 813,260 $ $ 227,800 (165,631) $ (33,795) $ $ 841,634 219,400 $ (196,412) $ (4,769) $ $ 859,853 43.87 64.32 31.89 45.94 50.59 69.43 45.90 56.49 56.38 79.38 47.60 56.43 64.25 Total compensation cost recognized for restricted stock was $12.7 million, $9.6 million, and $7.1 million for the years ended December 31, 2017, 2016, and 2015, respectively. The total fair value of shares vested was $9.3 million, $7.6 million, and $2.7 million for the years ended December 31, 2017, 2016 and 2015, respectively. The remaining net compensation cost related to our unvested restricted shares outstanding as of December 31, 2017 is approximately $35.4 million. That expense is expected to be recognized $11.1 million in 2018, $8.8 million in 2019, $7.7 million in 2020 and $7.8 million thereafter. F - 28 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Options During 2017, 1,500 non-employee director options with an intrinsic value of $0.1 million were exercised at a weighted average price of $29.91. At December 31, 2017, 3,000 fully vested non-employee director options remained outstanding with an intrinsic value of $0.2 million. These options had a weighted average exercise price of $33.45 and a weighted average contractual term of 3.1 years. No options have been granted, and there has been no compensation expense associated with non-vested stock option awards for the years ended December 31, 2017, 2016, or 2015. F - 29 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 11. Segment Reporting We group our operating segments into reportable segments that provide similar products and services. Each operating segment has discrete financial information evaluated regularly by our chief operating decision maker in evaluating and assessing performance. We have two reportable segments: (i) Real Property Operations and (ii) Home Sales and Rentals. The Real Property Operations segment owns, operates, has an interest in a portfolio, and develops MH communities and RV communities and is in the business of acquiring, operating, and expanding MH and RV communities. The Home Sales and Rentals segment offers manufactured home sales and leasing services to tenants and prospective tenants of our communities. Transactions between our segments are eliminated in consolidation. Transient RV revenue is included in the Real Property Operations segment revenues and is approximately $78.0 million for the year ended December 31, 2017. In 2017, transient RV revenue was recognized 27.2 percent in the first quarter, 20.1 percent in the second quarter, 36.9 percent in the third quarter, and 15.8 percent in the fourth quarter. A presentation of our segment financial information is summarized as follows (amounts in thousands): Revenues Operating expenses / Cost of sales Net operating income / Gross profit Adjustments to arrive at net income / (loss): Interest and other revenues, net Home selling expense General and administrative Transaction costs Catastrophic weather related charges, net Depreciation and amortization Loss on extinguishment of debt Interest Interest on mandatorily redeemable preferred OP units Other income / (expense), net Current tax expense Deferred tax benefit Net income / (loss) Less: Preferred return to preferred OP units Less: Amounts attributable to noncontrolling interests Net income / (loss) attributable to Sun Communities, Inc. Less: Preferred stock distributions Net income / (loss) attributable to Sun Communities, Inc. common stockholders Year Ended December 31, 2017 Real Property Operations Home Sales and Home Rentals Consolidated $ 779,739 $ 177,957 $ 289,637 490,102 24,875 — (64,735) (9,812) (7,856) (199,960) (6,019) (127,113) (3,114) 8,983 (62) 582 105,871 4,581 6,339 94,951 7,162 117,114 60,843 (1) (12,457) (9,976) 11 (496) (61,576) — (15) — (1) (384) — (24,052) — (1,284) (22,768) — 957,696 406,751 550,945 24,874 (12,457) (74,711) (9,801) (8,352) (261,536) (6,019) (127,128) (3,114) 8,982 (446) 582 81,819 4,581 5,055 72,183 7,162 $ 87,789 $ (22,768) $ 65,021 F - 30 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2016 Real Property Operations Home Sales and Home Rentals Consolidated Revenues Operating expenses / Cost of sales Net operating income / Gross profit Adjustments to arrive at net income / (loss): Interest and other revenues, net Home selling expenses General and administrative Transaction costs Catastrophic weather related charges, net Depreciation and amortization Loss on extinguishment of debt Interest Interest on mandatorily redeemable preferred OP units Other expenses, net Current tax expense Deferred tax benefit Income from affiliate transactions Net income / (loss) Less: Preferred return to preferred OP units Less: Amounts attributable to noncontrolling interests Net income / (loss) attributable to Sun Communities, Inc. Less: Preferred stock distributions Net income / (loss) attributable to Sun Communities, Inc. common stockholders $ $ 654,341 241,005 413,336 $ 158,287 104,714 53,573 21,150 — (55,481) (31,863) (1,147) (166,296) (1,127) (119,150) (3,152) (4,675) (471) 400 500 52,024 5,006 1,478 45,540 8,946 — (9,744) (8,606) (51) (25) (55,474) — (13) — (1) (212) — — (20,553) — (1,328) (19,225) — $ 36,594 $ (19,225) $ 812,628 345,719 466,909 21,150 (9,744) (64,087) (31,914) (1,172) (221,770) (1,127) (119,163) (3,152) (4,676) (683) 400 500 31,471 5,006 150 26,315 8,946 17,369 F - 31 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2015 Real Property Operations Home Sales and Home Rentals Consolidated Revenues Operating expenses / Cost of sales Net operating income / Gross profit Adjustments to arrive at net income / (loss): Interest and other revenues, net Home selling expenses General and administrative Transaction costs Depreciation and amortization Loss on extinguishment of debt Interest Interest on mandatorily redeemable preferred OP units Gain on disposition of properties Current tax expense Deferred tax expense Income from affiliate transactions Net income / (loss) Less: Preferred return to preferred OP units Less: Amounts attributable to noncontrolling interests Net income / (loss) attributable to Sun Communities, Inc. Less: Preferred stock distributions Less: Preferred stock redemption costs $ 530,610 $ 125,964 $ 188,030 342,580 18,119 — (40,235) (17,802) (125,297) (2,800) (107,647) (3,219) 106,613 (56) — 7,500 177,756 4,973 10,622 162,161 13,793 4,328 83,897 42,067 38 (7,476) (7,220) (1) (52,340) — (12) — 18,763 (102) (1,000) — (7,283) — (568) (6,715) — — 656,574 271,927 384,647 18,157 (7,476) (47,455) (17,803) (177,637) (2,800) (107,659) (3,219) 125,376 (158) (1,000) 7,500 170,473 4,973 10,054 155,446 13,793 4,328 Net income / (loss) attributable to Sun Communities, Inc. common stockholders $ 144,040 $ (6,715) $ 137,325 December 31, 2017 December 31, 2016 Real Property Operations Home Sales and Home Rentals Identifiable assets: Investment property, net Cash and cash equivalents Inventory of manufactured homes Notes and other receivables, net Collateralized receivables, net Other assets, net Total assets $ 5,172,521 (7,649) — 149,798 128,246 130,455 $ 5,573,371 $ 472,833 17,776 30,430 13,698 — 3,849 $ 538,586 Consolidated $ 5,645,354 10,127 30,430 163,496 128,246 134,304 $ 6,111,957 Real Property Operations Home Sales and Home Rentals $ 5,019,165 3,705 — 68,901 143,870 143,650 $ 5,379,291 $ 450,316 4,459 21,632 12,278 — 2,800 $ 491,485 Consolidated $ 5,469,481 8,164 21,632 81,179 143,870 146,450 $ 5,870,776 F - 32 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 12. Income Taxes We have elected to be taxed as a REIT pursuant to Section 856(c) of the Internal Revenue Code of 1986, as amended (“Code”). In order for us to qualify as a REIT, at least 95.0 percent of our gross income in any year must be derived from qualifying sources. In addition, a REIT must distribute annually at least 90.0 percent of its REIT taxable income (calculated without any deduction for dividends paid and excluding capital gain) to its stockholders and meet other tests. Qualification as a REIT involves the satisfaction of numerous requirements (on an annual and quarterly basis) established under highly technical and complex Code provisions for which there are limited judicial or administrative interpretations, and involves the determination of various factual matters and circumstances not entirely within our control. In addition, frequent changes occur in the area of REIT taxation, which requires us continually to monitor our tax status. We analyzed the various REIT tests and confirmed that we continued to qualify as a REIT for the year ended December 31, 2017. As a REIT, we generally will not be subject to U.S. federal income taxes at the corporate level on the ordinary taxable income we distribute to our stockholders as dividends. If we fail to qualify as a REIT in any taxable year, our taxable income could be subject to U.S. federal income tax at regular corporate rates (including any applicable alternative minimum tax). Even if we qualify as a REIT, we may be subject to certain state and local income taxes as well as U.S. federal income and excise taxes on our undistributed income. In addition, taxable income from non-REIT activities managed through taxable REIT subsidiaries (“TRSs”) is subject to federal, state and local income taxes. The Company is also subject to income taxes in Canada as a result of the acquisition of Carefree in 2016. We do not provide for withholding taxes on our undistributed earnings from our Canadian subsidiaries as they are reinvested and will continue to be reinvested indefinitely outside the United States. For income tax purposes, distributions paid to common stockholders consist of ordinary income, capital gains, and return of capital. For the years ended December 31, 2017, 2016, and 2015, distributions paid per share were taxable as follows (unaudited / rounded): Years Ended December 31, 2017 2016 2015 Ordinary income Capital gain Return of capital Total distributions declared Amount Percentage Amount Percentage Amount Percentage $ $ 0.83 — 1.83 2.66 31.2% $ —% 68.8% 100.0% $ 0.81 0.51 1.28 2.60 31.2% $ 19.6% 49.2% 100.0% $ 1.08 0.78 0.74 2.60 41.7% 30.1% 28.2% 100.0% On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law. Under the Tax Act, the corporate income tax rate is reduced from a maximum marginal rate of 35.0 percent to a flat 21.0 percent. In accordance with ASC 740, “Accounting for Income Taxes,” entities are required to recognize the effect of tax law changes in the period of enactment even though the effective date of most provisions of the Tax Act was January 1, 2018. Although the Staff Accounting Bulletin (“SAB”) No. 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act,” allows entities to record provisional amounts during a measurement period, it is our view that we have obtained the necessary information available to prepare and analyze (including computations) in reasonable detail the accounting for the change in tax law as noted below. The components of our (benefit) / provision for income taxes attributable to continuing operations for the year ended December 31, 2017 and 2016 are as follows (amounts in thousands): F - 33 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Federal Current State and Local Current Deferred Foreign Current Deferred Year Ended December 31, 2017 Year Ended December 31, 2016 $ (181) $ 675 (11) (48) (571) 187 438 — 58 (400) Total (Benefit) / Provision $ (136) $ 283 A reconciliation of the (benefit) / provision for income taxes with the amount computed by applying the statutory federal income tax rate to income before provision for income taxes for the year ended December 31, 2017 and 2016 is as follows (amounts in thousands): Pre-tax loss attributable to taxable subsidiaries $ (17,404) $ (11,157) Year Ended December 31, 2017 Year Ended December 31, 2016 Federal provision / (benefit) at statutory tax rate (34%) State and local taxes, net of federal benefit Alternative minimum tax Rate differential Change in valuation allowance Change in deferred tax asset Others Tax (benefit) / provision - taxable subsidiaries Other state taxes - flow through subsidiaries Total (benefit) / provision (5,918) (3) — 318 (21,322) 25,885 360 (680) 544 (136) $ 34.0 % — % — % (1.8)% 122.5 % (148.7)% (2.1)% 3.9 % (3,794) (183) 93 104 4,021 — (225) 16 267 283 $ 34.0 % 1.6 % (0.8)% (0.9)% (36.0)% — % 2.0 % (0.1)% Our deferred tax assets and liabilities reflect the impact of temporary differences between the amounts of assets and liabilities for financial reporting purposes and the bases of such assets and liabilities as measured by tax laws. Deferred tax assets are reduced, if necessary, by a valuation allowance to the amount where realization is more likely than not assured after considering all available evidence. Our temporary differences primarily relate to net operating loss carryforwards, and with respect to our Canadian investments, depreciation and basis differences between tax and U.S. GAAP. At December 31, 2017, we re-measured the deferred tax assets and liabilities of our U.S. TRSs to reflect the effect of the enacted change in the tax rate under the Tax Act. We have also considered the new tax rate in assessing the need for and change to our existing valuation allowance and adjusted accordingly. Since we have recorded a full valuation allowance against substantially all of our deferred tax assets related to the U.S. TRSs, no material impact on the net deferred tax asset and the provision for income taxes was noted. F - 34 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The deferred tax assets and liabilities included in the consolidated balance sheets are comprised of the following tax effects of temporary differences and based on the Tax Act (amounts in thousands): Deferred Tax Assets Net operating loss carryforwards Real estate assets Other Gross deferred tax assets Valuation allowance Net deferred tax assets Deferred Tax Liabilities Basis differences - foreign investment Gross deferred tax liabilities Net Deferred Tax Liability (1) As of December 31, 2017 2016 $ 19,739 $ 23,523 1,272 44,534 (41,932 ) 2,602 30,821 33,167 1,746 65,734 (63,862) 1,872 (25,114 ) (25,114 ) (23,816) (23,816) $ (22,512 ) $ (21,944) (1) Net deferred tax liability is included within Other liabilities in our Consolidated Balance Sheets. SHS had U.S. operating loss carryforwards of $81.0 million, or $17.1 million after tax, as of December 31, 2017. The loss carryforwards will begin to expire in 2021 through 2035 if not offset by future taxable income. In addition, our Canadian subsidiaries have operating loss carryforwards of $10.2 million, or $2.7 million after tax, as of December 31, 2017. The loss carryforwards will begin to expire in 2033 through 2038 if not offset by future taxable income. We had no unrecognized tax benefits as of December 31, 2017 and 2016. We expect no significant increases or decreases in unrecognized tax benefits due to changes in tax positions within one year of December 31, 2017. We classify certain state taxes as income taxes for financial reporting purposes. We recorded a provision for state income taxes of $0.7 million for the year ended December 31, 2017, $0.4 million for the year ended December 31, 2016, and $0.2 million for the year ended December 31, 2015. As previously noted, certain of our subsidiaries are subject to income taxes in the U.S. and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require application of significant judgment. With few exceptions, we are no longer subject to U.S. federal, state and local, examinations by tax authorities for the tax years ended December 31, 2011 and prior. In addition, our Canadian subsidiaries are subject to taxes in Canada and in the province of Ontario. We are no longer subject to examination by the Canadian tax authorities for the tax years ended December 31, 2012 and prior. Our policy is to report income tax penalties and income tax related interest expense as a component of income tax expense. No interest or penalty associated with any unrecognized income tax benefit or provision was accrued, nor was any income tax related interest or penalty recognized during the years ended December 31, 2017, 2016 and 2015. SHS is currently under audit by the Internal Revenue Service for the tax year 2015. F - 35 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 13. Earnings Per Share We have outstanding stock options, unvested restricted common shares, and Series A-4 preferred stock, and our Operating Partnership has outstanding common OP units, Series A-1 preferred OP units, Series A-3 preferred OP units, Series A-4 preferred OP units, Series C preferred OP units, and Aspen preferred OP Units, which if converted or exercised, may impact dilution. Computations of basic and diluted earnings per share were as follows (in thousands, except per share data): Numerator Net income attributable to common stockholders Allocation to restricted stock awards Basic earnings: net income attributable to common stockholders after allocation Allocation of income to restricted stock awards Diluted earnings: net income attributable to common stockholders after allocation Denominator Weighted average common shares outstanding Add: dilutive stock options Add: dilutive restricted stock Diluted weighted average common shares and securities Earnings per share available to common stockholders after allocation: Basic Diluted Year Ended December 31, 2017 65,021 455 65,476 (455) 65,021 $ $ $ 2016 17,369 115 17,484 (115) 17,369 $ $ $ 2015 137,325 (1,757) 135,568 — 135,568 76,084 65,856 53,686 2 625 8 457 16 — 76,711 66,321 53,702 0.85 0.85 $ $ 0.27 0.26 $ $ 2.53 2.52 $ $ $ $ $ We have excluded certain securities from the computation of diluted earnings per share because the inclusion of these securities would have been anti-dilutive for the periods presented. The following table presents the outstanding securities that were excluded from the computation of diluted earnings per share for the years ended December 31, 2017, 2016 and 2015 (amounts in thousands): Restricted Stock Common OP units Series A-1 preferred OP units Series A-3 preferred OP units Series A-4 preferred OP units Series A-4 preferred stock Series C preferred OP units Aspen preferred OP units Total securities Year Ended December 31, 2017 2016 2015 — 2,746 345 40 424 1,085 316 1,284 6,240 — 2,759 367 40 634 1,682 333 1,284 7,099 813 2,863 388 40 755 2,067 340 1,284 8,550 F - 36 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 14. Selected Quarterly Financial Information (Unaudited) The following is a condensed summary of our unaudited quarterly results for years ended December 31, 2017 and 2016. Income / (loss) per share for the year may not equal the sum of the fiscal quarters’ income / (loss) per share due to changes in basic and diluted shares outstanding. 2017 Total revenues Total expenses Income before other items Quarters 1st 2nd 3rd 4th (In thousands, except per share amounts) $234,400 $237,899 $268,245 $ 242,026 209,729 222,171 $ 24,671 $ 15,728 $ 33,250 $ 234,995 234,850 7,176 Net income attributable to Sun Communities, Inc. common stockholders $ 21,104 $ 12,364 $ 24,115 $ 7,438 Earnings per share: Basic Diluted Total revenues Total expenses 2016 $ $ 0.29 $ 0.29 $ 0.16 $ 0.16 $ 0.31 $ 0.31 $ 0.09 0.09 $174,644 $190,799 $249,701 $ 218,634 211,569 226,688 195,781 162,638 Income / (loss) before other items $ 12,006 (4,982) $ 23,013 $ 7,065 Net income / (loss) attributable to Sun Communities, Inc. common stockholders $ 7,875 (7,803) $ 18,897 (1,600) Earnings / (loss) per share: Basic Diluted $ $ 0.14 $ 0.14 $ (0.12) $ (0.12) $ 0.27 $ 0.27 $ (0.02) (0.02) F - 37 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 15. Derivative Instruments and Hedging Activities Our objective in using interest rate derivatives is to manage exposure to interest rate movements thereby minimizing the effect of interest rate changes and the effect it could have on future cash flows. Interest rate caps are used to accomplish this objective. We do not enter into derivative instruments for speculative purposes nor do we have any swaps in a hedging arrangement. The following table provides the terms of our interest rate cap derivative contracts that were in effect as of December 31, 2017: Type Purpose Effective Date Maturity Date Notional (in millions) Based on Variable Rate Cap Rate Spread Effective Fixed Rate Cap Cap Cap Floating Rate 4/1/2015 4/1/2018 Cap Floating Rate 10/3/2016 5/1/2023 $ $ 150.1 3 Month LIBOR 3.2040% 9.000% 9.6 3 Month LIBOR 4.0040% 11.020% —% —% N/A N/A In accordance with ASC Topic 815, “Derivatives and Hedging,” derivative instruments are recorded at fair value in Other assets, net or Other liabilities on the Consolidated Balance Sheets. As of December 31, 2017 and 2016, the fair value of the derivatives was zero. 16. Fair Value of Financial Instruments Our financial instruments consist primarily of cash and cash equivalents, accounts and notes receivable, accounts payable, derivative instruments, and debt. ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy under which these assets and liabilities must be grouped, based on significant levels of observable or unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumption. This hierarchy requires the use of observable market data when available. These two types of inputs have created the following fair value hierarchy: Level 1—Quoted unadjusted prices for identical instruments in active markets; Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. We utilize fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The following methods and assumptions were used in order to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Derivative Instruments The derivative instruments held by us are interest rate cap agreements for which quoted market prices are indirectly available. For those derivatives, we use model-derived valuations in which all significant inputs and significant value drivers are observable in active markets provided by brokers or dealers to determine the fair values of derivative instruments on a recurring basis (Level 2). Refer to Note 15, “Derivative Instruments and Hedging Activities.” Installment Notes Receivable on Manufactured Homes The net carrying value of the installment notes receivable on manufactured homes estimates the fair value as the interest rates in the portfolio are comparable to current prevailing market rates (Level 2). Refer Note 4, “Notes and Other Receivables.” Long Term Debt and Lines of Credit The fair value of long-term debt (excluding the secured borrowing) is based on the estimates of management and on rates currently quoted, rates currently prevailing for comparable loans, and instruments of comparable maturities (Level 2). Refer to Note 8, “Debt and Lines of Credit.” F - 38 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Collateralized Receivables and Secured Borrowing The fair value of these financial instruments offset each other as our collateralized receivables represent a transfer of financial assets and the cash proceeds received from these transactions have been classified as a secured borrowing on the Consolidated Balance Sheets. The net carrying value of the collateralized receivables estimates the fair value as the interest rates in the portfolio are comparable to current prevailing market rates (Level 2). Refer to Note 3, “Collateralized Receivables and Transfers of Financial Assets.” Financial Liabilities We estimate the fair value of our contingent consideration liability based on discounting of future cash flows using market interest rates and adjusting for non-performance risk over the remaining term of the liability (Level 2). Other Financial Instruments The carrying values of cash and cash equivalents, accounts receivable, and accounts payable approximate their fair market values due to the short-term nature of these instruments. The table below sets forth our financial assets and liabilities that required disclosure of their fair values on a recurring basis as of December 31, 2017. The table presents the carrying values and fair values of our financial instruments as of December 31, 2017 and December 31, 2016 that were measured using the valuation techniques described above (in thousands). The table excludes other financial instruments such as cash and cash equivalents, accounts receivable, and accounts payable as the carrying values associated with these instruments approximate fair value since their maturities are less than one year. Financial assets Installment notes receivable on manufactured homes, net Collateralized receivables, net Financial liabilities Debt (excluding secured borrowings) Secured borrowings Lines of credit Other liabilities (contingent consideration) 17. Recent Accounting Pronouncements December 31, 2017 December 31, 2016 Carrying Value 115,797 128,246 $ $ Fair Value Carrying Value Fair Value $ $ 115,797 128,246 $ $ 59,320 $ 59,320 143,870 $ 143,870 $ 2,908,799 129,182 $ $ 2,726,770 129,182 $ $ $ 41,257 6,976 $ $ 41,257 6,976 $ 2,865,470 144,477 $ $ $ 100,095 10,011 $ 2,820,680 $ 144,477 $ $ 98,640 10,011 In May 2017, the FASB issued ASU 2017-09 “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” This update is to provide clarity and reduce both diversity in practice and cost and complexity when applying the guidance in Topic 718, Compensation - Stock Compensation, regarding a change to the terms or conditions of a share-based payment award. The guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year. Early adoption is permitted, including adoption in interim periods, for reporting periods for which financial statements have not yet been issued. Once effective, we will apply the standard prospectively should a modification occur. In January 2017, the FASB issued ASU 2017-01 “Business Combinations (Topic 805): Clarifying the Definition of a Business.” This update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year. Under current guidance, substantially all of our property acquisitions are accounted for as business combinations with identifiable assets and liabilities measured at fair value, and acquisition related costs expensed as incurred and reported as Transaction costs in our Consolidations Statements of Operations. Upon adoption of ASU 2017-01, we expect that substantially all of our future F - 39 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS property acquisitions will be accounted for as assets acquisitions. We will allocate the purchase price of the properties on a relative fair value basis and capitalize direct acquisition related costs as part of the purchase price. In November 2016, the FASB issued ASU 2016-18 “Statement of Cash Flows (Topic 230): Restricted Cash.” This update requires inclusion of restricted cash and restricted cash equivalents with cash and cash equivalents when reconciling the beginning-of- period and end-of-period total amounts shown on the statement of cash flows. The guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year. Once effective, we will include restricted cash and cash equivalents as prescribed by ASU 2016-18 in our Consolidated Statements of Cash Flows. Our restricted cash consists of amounts held in deposit for tax, insurance and repair escrows held by lenders in accordance with certain debt agreements. At December 31, 2017 and 2016, $13.4 million and $17.1 million of restricted cash, respectively, was included as a component of Other assets, net on our Consolidated Balance Sheets. In October 2016, the FASB issued ASU 2016-16 “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.” This update requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year. Upon adoption of this standard, there will be no material impact to our Consolidated Financial Statements. In August 2016, the FASB issued ASU 2016-15 “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments.” This update addresses eight specific cash flow issues with the objective of reducing existing diversity in practice. The guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within that year. Upon adoption of this standard, there will be no material impact to our Consolidated Financial Statements. In June 2016, the FASB issued ASU 2016-13 “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are in the initial phases of evaluating how ASU 2016-13 will impact our accounting policies regarding assessment of, and allowance for, loan losses. In March 2016, the FASB issued ASU 2016-09 “Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” The amendments in this update are intended to simplify several aspects of the accounting for share-based payments. We adopted these amendments as of January 1, 2017. The main provisions of this update regarding excess tax benefits did not have an impact on our Consolidated Financial Statements due to our status as a REIT for taxation purposes. We have elected to continue estimating the number of shares expected to vest in order to determine compensation cost, and were previously classifying, as financing activity, cash paid by us for employee taxes when shares were withheld to cover minimum statutory requirements. In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” The core principle of this update is that a lessee should recognize the assets and liabilities that arise from leases while the accounting by a lessor is largely unchanged from that applied under previous GAAP. The amendments in this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Our income from real property and rental home revenue streams is derived from rental agreements where we are the lessor. As noted above, the lessor accounting model is largely unchanged by this update. We are the lessee in other arrangements, primarily for our executive offices, ground leases at five communities, and certain equipment. We are currently evaluating our inventory of such leases for recognition of right of use assets and corresponding lease liabilities on our Consolidated Balance Sheets, and the related disclosure requirements thereto. In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). The objective of this amendment is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying this amendment, companies will perform a five-step analysis of transactions to determine when and how revenue is recognized. This amendment applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. An entity should apply the amendments using either the full retrospective approach or retrospectively with a cumulative effect of initially applying the amendments recognized at the date of initial application. In July 2015, the FASB issued ASU 2015-14 which deferred the effective date of ASU 2014-09 by one year to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. F - 40 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS We will adopt ASU 2014-09 and the related updates subsequently issued by the FASB on January 1, 2018, via the modified retrospective approach. Applicability of the standard updates to our revenue streams and other considerations are summarized below. Income from real property - is derived from rental agreements whereby we lease land to residents in our communities. We account for the lease components of these rental agreements pursuant to ASC 840 “Leases” and the non-lease components under ASC 605 “Revenue Recognition.” Revenue from home sales - is recognized pursuant to ASC 605 “Revenue Recognition,” as the manufactured homes are tangible personal property that can be located on any parcel of land. The manufactured homes are not permanent fixtures or improvements to the underlying real estate, and are therefore not considered by us to be subject to the guidance in ASC 360-20 “Real Estate Sales.” Rental home revenue - is comprised of rental agreements whereby we lease homes to residents in our communities. We account for these revenues pursuant to ASC 840 “Leases.” Ancillary revenues - are primarily comprised of restaurant, golf, merchandise and other activities at our RV communities. These revenues are recognized pursuant to ASC 605 “Revenue Recognition,” at point of sale to customers as our performance obligations are then satisfied. Interest income - on our notes receivable will continue to be recognized as revenue, but presented separately from revenue from contracts with customers, as interest income is not in the scope of ASU 2014-09 and the related updates subsequently issued by the FASB. Broker commissions and other revenues, net - is primarily comprised of (i) brokerage commissions that we account for on a net basis pursuant to ASC 605 “Revenue Recognition,” as our performance obligation is to arrange for a third party to transfer a home to a customer; and (ii) notes receivable loss reserves. As detailed above, our revenues from income from real property, home sales, ancillary revenues, and broker commissions will be in the scope of the new guidance. Upon adoption, we will present contract assets and liabilities, as applicable, when one party to a transaction has performed and the other has not. Our disclosures will be expanded, as applicable, to discuss our performance obligations, contract balances, timing and nature of our revenue streams. There will not be any other resulting changes to our accounting policies for revenue recognition or Consolidated Financial Statements from adoption of this guidance. 18. Commitments and Contingencies Legal Proceedings We are involved in various legal proceedings arising in the ordinary course of business. All such proceedings, taken together, are not expected to have a material adverse impact on our results of operations or financial condition. Catastrophic Weather Related Charges In September 2017, Hurricane Irma impacted 121 of our communities in Florida and three in Georgia. We recognized charges totaling $31.7 million comprised of $21.3 million for debris and tree removal, common area repairs and minor flooding damage, as well as $10.4 million for impaired assets at three Florida Keys communities. These charges were partially offset by estimated insurance recoveries of $23.7 million. We maintain property, casualty, flood and business interruption insurance for our community portfolio, subject to customary deductibles and limits. As of December 31, 2017, we had not received any insurance recoveries. Refer to Note 20, “Subsequent Events” for information regarding insurance recoveries received subsequent to year end. The net charges of $8.0 million related to Hurricane Irma were recognized as Catastrophic weather related charges, net in our Consolidated Statements of Operations for the year ended December 31, 2017. Actual charges and insurance recoveries could vary significantly from these estimates. Any changes to these estimates will be recognized in the period(s) in which they are determined. F - 41 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Expected insurance recoveries for lost earnings and redevelopment costs greater than the asset impairment charge for the Florida Keys were excluded from our Consolidated Statements of Operations for the year ended December 31, 2017. We are actively working with our insurer on the related claims, but have not yet received any advance for the expected recovery of lost earnings. The three Florida Keys communities will require redevelopment followed by a tenant lease-up period. As such, we currently cannot estimate a date when operating results will be restored to pre-hurricane levels. Our business interruption insurance policy provides for up to 60 months of coverage from the date of restoration. 19. Related Party Transactions Lease of Executive Offices. Gary A. Shiffman, together with certain of his family members, indirectly owns an equity interest of approximately 28.0 percent in American Center LLC, the entity from which we lease office space for our principal executive offices. Each of Brian M. Hermelin, Ronald A. Klein and Arthur A. Weiss indirectly owns a less than one percent interest in American Center LLC. Mr. Shiffman is our Chief Executive Officer and Chairman of the Board. Each of Mr. Hermelin, Mr. Klein and Mr. Weiss is a director of the Company. Under this agreement, we lease approximately 71,500 rentable square feet of permanent space, and approximately 21,000 rentable square feet of temporary space. The initial term of the lease is until October 31, 2026, and the base rent is $17.95 per square foot (gross) until October 31, 2018, for both permanent and temporary space, with graduated rental increases thereafter. Each of Mr. Shiffman, Mr. Hermelin, Mr. Klein and Mr. Weiss may have a conflict of interest with respect to his obligations as our officer and/or director and his ownership interest in American Center LLC. Legal Counsel. During 2015-2017, Jaffe, Raitt, Heuer, & Weiss, Professional Corporation acted as our general counsel and represented us in various matters. Arthur A. Weiss is the Chairman of the Board of Directors and a shareholder of such firm. We incurred legal fees and expenses owed to Jaffe, Raitt, Heuer, & Weiss of approximately $5.0 million, $8.0 million and $4.6 million in the years ended December 31, 2017, 2016 and 2015, respectively. Tax Consequences Upon Sale of Properties. Gary A. Shiffman holds limited partnership interests in the Operating Partnership which were received in connection with the contribution of properties from partnerships previously affiliated with him. Prior to any redemption of these limited partnership interests for our common stock, Mr. Shiffman will have tax consequences different from those on us and our public stockholders upon the sale of any of these partnerships. Therefore, we and Mr. Shiffman may have different objectives regarding the appropriate pricing and timing of any sale of those properties. 20. Subsequent Events In January 2018, we redeemed 41,051 units of our 8.00% Series B-3 preferred OP units (“B-3 Units”). The weighted average redemption price per unit, which included accrued and unpaid distributions, was $100.065753. In the aggregate, we paid $4.1 million to redeem the B-3 Units. In January 2018, we repaid three collateralized term loans totaling $7.6 million with a weighted average interest rate of 6.25 percent, releasing two encumbered communities. The loans were due to mature on March 1, 2019. We recognized a loss on extinguishment of debt of $0.2 million as a result of the repayment transactions. In February 2018, we received $5.0 million of insurance recoveries in connection with property damage at our Florida and Georgia communities resulting from Hurricane Irma in September 2017. Refer to Note 18, “Commitments and Contingencies” for additional information regarding impacts to our consolidated financial statements from Hurricane Irma. We have evaluated our Consolidated Financial Statements for subsequent events through the date that this Form 10-K was issued. F - 42 ) C & A ( 6 9 9 1 1 4 1 9 , ) A ( ) C & A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C & A ( ) A ( ) A ( ) A ( ) C & A ( ) A ( ) A ( 6 1 0 2 6 4 1 1 , 1 1 0 2 0 3 4 3 , 9 9 9 1 3 9 9 3 , 6 9 9 1 9 9 2 4 , 7 1 0 2 5 4 3 4 9 9 1 6 2 1 2 , 6 1 0 2 3 7 6 1 0 2 8 9 4 6 9 9 1 6 1 0 2 6 1 0 2 9 9 9 1 0 3 2 7 , 9 6 9 4 0 7 0 6 3 5 , 3 1 0 2 6 1 0 4 , 6 1 0 2 2 1 0 2 5 9 7 0 3 7 1 , 5 1 0 2 0 2 1 3 , 6 1 0 2 4 1 0 2 0 4 5 5 2 1 2 , 9 7 4 7 1 , 4 8 0 6 4 , 7 0 5 6 1 , 9 0 8 8 , 7 2 1 9 , 0 1 5 9 1 , 5 7 8 3 , 9 1 6 2 , 7 7 0 0 1 , 6 5 4 3 1 , 1 1 2 5 2 , 3 1 6 5 1 , 5 2 1 1 1 , 3 1 8 3 2 , 6 5 1 6 1 , 2 8 5 8 , 7 8 5 8 3 , 8 2 8 2 1 , 1 9 4 3 2 , 0 5 7 6 1 , 8 4 3 2 2 , 7 0 7 5 1 , 6 6 2 8 , 1 7 6 , 8 0 7 1 6 1 , 5 3 6 3 , 4 1 4 1 , 7 4 4 9 , 9 9 5 2 1 , 1 0 4 8 1 , 3 7 4 3 1 , 1 2 4 0 1 , 3 2 2 3 2 , 6 0 9 4 1 , 2 3 8 7 , 7 7 1 8 3 , 8 8 7 0 1 , 1 7 3 8 1 , 6 1 0 2 6 8 1 2 1 6 4 , 2 9 9 3 , 6 9 9 1 5 9 5 8 , 3 4 5 5 1 , 7 7 1 5 1 , r o ) A ( d e r i u q c A ) C ( d e t c u r t s n o C ) A ( ) A ( ) A ( ) A ( e t a D 7 1 0 2 0 0 0 2 7 1 2 7 2 5 1 1 , d e t a l u m u c c A n o i t a i c e r p e D 5 3 8 3 1 , 5 8 3 4 2 , l a t o T 5 5 6 1 1 , 0 0 9 2 2 , e l b a i c e r p e D s t e s s A 0 8 1 , 2 5 8 4 , 1 d n a L 0 2 6 6 6 3 9 2 7 0 0 8 6 3 7 , 3 2 3 4 5 6 5 4 0 4 3 , 3 0 4 2 5 4 9 2 2 6 , 8 2 2 0 , 2 3 9 4 , 1 1 8 5 0 , 0 1 0 6 2 , 1 5 3 5 , 9 6 8 7 , 2 1 6 2 , 4 5 8 7 , 3 0 4 4 , 1 5 0 2 , 1 9 3 2 0 3 6 7 5 8 0 1 8 , 6 0 4 1 , 2 4 0 7 0 9 5 0 5 2 , 1 0 5 7 0 1 4 0 4 0 , 2 0 2 1 , 5 4 3 5 , 1 5 4 5 , 4 1 5 7 3 9 5 , 1 5 0 5 , 8 5 1 9 , 1 2 7 3 , 1 9 6 6 , 1 3 8 8 , 2 9 0 1 , 1 1 5 6 , 5 — — — — — — — — — — — 5 1 — ) 3 3 ( — — ) 3 1 ( — — — — — — 3 4 - F 0 1 7 , 0 1 8 7 2 , 4 1 0 7 9 , 1 4 8 6 , 3 2 9 6 , 6 8 8 0 , 1 2 2 7 1 , 6 0 8 4 , 5 0 1 4 , 4 5 8 3 , 2 1 0 8 1 , 2 5 8 4 , 1 0 2 6 6 6 3 9 2 7 0 0 8 6 3 7 , 3 2 3 4 5 6 5 4 0 4 3 , 3 5 9 1 , 2 0 4 2 5 7 1 , 1 3 1 9 , 7 4 5 0 , 8 0 5 6 , 7 1 0 8 8 , 1 1 6 1 9 , 1 8 0 3 , 1 2 4 3 5 , 3 1 3 6 1 , 6 4 9 2 , 5 3 9 7 6 , 9 0 2 7 , 2 1 0 9 1 , 1 0 3 6 0 9 8 0 1 8 , 6 0 4 1 , 2 7 1 7 0 9 5 0 5 2 , 1 0 5 7 0 1 4 0 4 0 , 2 0 2 1 , 5 — B — B A D — B C — D — — B — E B A — C E — E , a g n o m a c u C o h c n a R I M , s d i p a R d n a r G Y N , t r o o v e s n a G I M , e l a d n e l l A V R y a w e t a G k c a d n o r i d A d n u o r g p m a C & t r o s e R e l i b o M s w o d a e M e n i p l A e g a l l i V s w o d a e M e l a d n e l l A e g a l l i V e l i b o M I M , p i h s n w o T r o i r e p u S ) 4 ( s d o o W r o b r A L F , n o t n e d a r B k r a P V R e c a r r e T r o b r A I M , n o g e k s u M H O , a i l e m A e m o H d e r u t c a f u n a M f l e S d n a y t i n u m m o C k e e r C e l p p A e g a r o t S e g a l l i V r r a C e l p p A A C a n u g a L a t l A A C , h t u o m y l P ) 4 ( t r o s e R V R e g a l l i V ' r e 9 4 I M , n o t n a C e t n i o P t s e W / y m e d a c A L F , d n a l e k a L e l i b o M e g a l l i V a n a i r A k r a P e m o H ) 1 ( N O , d r o f n e l l A & t r o s e R V R e k a L n a r r A d n u o r g p m a C X T , n i t s u A A I , y n e k n A L F , a t o s a r a S L F , s l l i h r y h p e Z N T , e l l i v s k r a l C J N , y a M e p a C V R r a t S e n o L n i t s u A t r o s e R ) 3 ( e g d i R n m u t u A s e t a t s E a t s i V a i h a B t r o s e R V R s e r c A r e k a B V R e k a L r e b m T g i B i t r o s e R ) 3 ( g n i s s o r C l l e B X T , o i n o t n A n a S L F , a d r o G a t n u P L F , y t i C e d a D s e n i P n o r e H e u l B r a t S g n i z a l B V R & H M y a J e u l B t r o s e R L F , a i d a c r A t r o s e R V R e e r T g i B Z A , n o i t c n u J e h c a p A n a m h c t u D t s o L / r a t S e u l B t a d e i r r a C t n u o m A s s o r G 7 1 0 2 , 1 3 r e b m e c e D d e z i l a t i p a C s t s o C n o i t i s i u q c A o t t n e u q e s b u S ) s t n e m e v o r p m I ( y n a p m o C o t t s o C l a i t i n I I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e c n a r b m u c n E n o i t a c o L e m a N y t r e p o r P r o ) A ( d e r i u q c A ) C ( d e t c u r t s n o C ) A ( ) C ( ) C & A ( e t a D 2 1 0 2 8 9 9 1 5 9 9 1 4 3 5 1 , 7 7 2 2 1 , 4 3 0 6 , ) A ( ) A ( ) A ( ) C & A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C & A ( ) C & A ( ) C ( ) C ( ) A ( ) C & A ( ) C & A ( ) A ( ) A ( 5 1 0 2 6 0 0 1 , 6 9 9 1 4 1 0 2 6 4 6 3 , 5 9 0 3 , 5 8 9 1 1 1 0 2 1 0 0 2 6 9 9 1 7 1 0 2 3 1 0 2 6 1 0 2 6 1 0 2 6 9 9 1 6 1 0 2 3 1 0 2 7 1 0 2 4 1 0 2 7 9 9 1 8 1 4 8 , 1 0 4 1 , 3 6 6 2 1 , 7 1 9 2 , 8 1 1 0 3 8 5 , 7 9 6 7 2 2 1 1 1 1 9 4 8 , 7 9 7 2 , — 5 5 9 2 , 1 0 4 6 , 4 1 0 2 4 1 0 2 — 0 1 8 3 , 4 0 0 2 9 6 9 8 , 6 1 0 2 5 9 9 1 1 1 0 2 1 1 0 2 6 1 0 2 6 0 6 9 8 9 5 , 3 3 4 5 , 2 2 9 1 , 4 6 1 0 4 0 0 1 , 4 0 6 2 3 , 2 0 3 0 1 , 9 3 0 3 1 , 6 9 1 6 , 1 6 9 8 3 , 9 1 7 8 1 , 6 3 2 6 , 1 0 6 6 2 , 6 4 9 4 , 8 9 6 8 , 9 5 8 3 3 , 7 9 1 7 2 , 5 5 9 7 , 4 1 9 6 1 , 5 2 4 2 , 7 3 7 4 1 , 6 6 2 6 , 3 9 5 9 2 , 7 9 0 7 1 , 1 9 4 1 4 , 8 9 0 6 1 , 3 5 9 8 2 , 1 0 1 4 1 , 4 7 9 9 , 4 7 7 3 2 , 2 3 1 7 , 6 1 4 4 , 0 1 2 , 6 0 8 2 8 2 , 6 0 5 9 , 9 8 8 1 1 , 1 1 8 , 5 1 4 3 5 2 , 3 7 0 8 1 , 6 6 0 6 , 9 4 6 4 2 , 3 9 6 4 , 8 6 7 6 , 9 4 9 2 3 , 7 3 9 2 1 , 5 1 8 4 , 4 1 3 , 6 1 5 5 1 2 , 7 8 0 4 1 , 6 6 3 3 4 5 3 2 , 1 2 0 , 6 1 1 7 1 7 2 , 2 0 7 , 4 1 2 1 7 6 2 , 1 0 5 1 1 , 5 6 3 9 , 4 5 2 , 3 2 2 8 8 6 , 6 4 2 3 , 0 3 8 , 3 4 2 3 , 4 6 9 7 0 5 1 , 1 5 8 3 0 2 6 , 3 1 6 4 6 0 7 1 2 5 9 , 1 3 5 2 0 3 9 , 1 0 1 9 0 6 2 , 4 1 0 4 1 , 3 0 0 6 0 7 2 0 5 6 0 0 9 , 5 0 5 0 , 6 6 7 0 , 1 0 2 3 , 4 1 6 9 3 , 1 1 4 2 , 2 9 0 6 0 2 5 0 5 2 0 0 6 , 2 0 7 1 , 1 0 7 9 , 2 0 8 7 , 7 2 0 9 7 , 5 0 3 5 , 2 9 1 2 , 2 9 3 1 , 1 3 9 9 , 6 1 2 0 5 5 5 3 , 6 8 5 1 9 2 , 2 8 3 7 , 1 1 8 4 9 2 2 0 , 1 1 9 6 , 0 1 2 6 4 1 5 3 , 6 6 6 3 8 0 3 , 2 9 8 3 , 2 1 4 9 8 , 4 2 0 7 , 4 1 9 6 3 , 1 1 6 9 0 , 1 9 7 0 , 4 6 8 6 , 1 2 4 2 8 2 9 2 , 3 — — — — 6 8 3 — 4 2 3 , 3 d n a L — — — — — — — — — — — — — — — — — — — — — 4 4 - F e l b a i c e r p e D s t e s s A d n a L e c n a r b m u c n E n o i t a c o L e m a N y t r e p o r P 0 0 5 0 4 2 , 3 6 1 7 , 3 9 5 3 , 9 2 9 5 , 3 2 0 2 , 4 2 0 8 0 , 1 4 6 5 , 5 4 9 2 , 8 1 2 0 4 , 2 0 1 7 , 6 1 1 2 , 1 2 5 1 9 , 1 1 7 6 8 , 3 3 2 6 , 5 3 9 6 , 1 6 3 7 , 7 — 5 3 2 , 1 2 2 3 6 , 3 — 7 7 2 , 2 2 3 4 3 , 5 1 0 3 8 , 3 0 0 0 , 1 6 9 7 0 5 1 , 1 5 8 3 0 2 6 , 3 1 0 6 2 0 7 1 2 5 9 , 1 3 5 2 0 3 9 , 1 0 1 9 0 6 2 , 4 1 0 4 1 , 3 0 0 6 0 7 2 0 5 6 0 0 9 , 5 0 5 0 , 6 6 7 0 , 1 0 2 3 , 4 1 6 9 3 , 1 1 4 2 , 2 5 0 4 , 0 1 0 0 6 , 2 6 8 2 , 5 8 6 5 , 1 0 9 5 , 3 2 2 4 , 2 9 0 6 0 2 5 0 5 2 0 7 1 , 1 C B B E B B B D D A — A — — A — C — E — A — B — — C A — X T , e l l i v r e g u l f P L F , l l e n h s u B X T , n i t s u A L F , n o s d u H I M , d o o w t n e K Z A , a s e M I M , d o o w t n e K L F , g n i r b e S N I , n e h s o G A C , y t i C l a r d e h t a C I M , r e t n e C n o r y B I M , b m o c a M A M , t r o p s i n n e D s e t a t s E k e e r C h c n a r B s e t a t s E d o o w t n e r B e l i b o M d o o w t n e r B e g a l l i V t s e W d o o w t n e r B l l i H y r r e b e u l B e g d i R r e d l u o B e m o H e l i b o M e d i s k o o r B e g a l l i V e l i b o M r e t n e C n o r y B e g a l l i V ) 4 ( s d n a S e t n e i l a C a l l i V t o l e m a C V R n e v a H s r e p m a C t r o s e R e g a l l i V e d i s k o o r B y a B d o o w n o t t u B L F , a t o k a D h t u o S r o n a M t h g i l e l d n a C L I , e g a l l i V k u a S J N , y a M e p a C J N , y a M e p a C e g a l l i V t h g i l e l d n a C g n i s s o r C y a M e p a C A O K y a M e p a C N I , e n y a W . t F L F , d r o f n a S D M , n i l r e B & t r o s e R V R s y a w a t s a C d n u o r g p m a C e t n i o P n o t g n i r r a C e v o C e g a i r r a C C S , s g n o L ) 5 ( t r o s e R V R s e n i P a n i l o r a C A C , s e l b o R o s a P ) 5 ( t r o s e R V R s e l b o R a v a C O C , s n a v E k e e r C e v a C L F , y t i C s e n i a H V R & H M k r a P l a r t n e C t r o s e R X T , e l l i v r e g u l f P s e t a t s E t n i o P m l o h s i h C I M , e l l i v e l d d i M e g a l l i V l l i M r e d i C I M , n o t n e F s g n i s s o r C l l i M r e d i C L F , y t i C e d a D t r o s e R V R l l i H s u r t i C d e t a l u m u c c A n o i t a i c e r p e D l a t o T e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A t a d e i r r a C t n u o m A s s o r G 7 1 0 2 , 1 3 r e b m e c e D d e z i l a t i p a C s t s o C n o i t i s i u q c A o t t n e u q e s b u S ) s t n e m e v o r p m I ( y n a p m o C o t t s o C l a i t i n I 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S r o ) A ( d e r i u q c A ) C ( d e t c u r t s n o C ) A ( ) A ( ) A ( ) A ( ) C & A ( ) A ( ) C & A ( ) C & A ( ) A ( ) A ( ) C & A ( ) C & A ( ) A ( ) C & A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C ( ) A ( ) A ( ) A ( ) A ( ) C & A ( ) A ( ) A ( e t a D 6 8 9 1 1 1 0 2 6 1 0 2 8 7 0 4 , 7 8 9 1 , 8 2 1 1 , 3 9 9 1 9 8 5 8 , 7 1 0 2 6 1 0 2 0 0 0 2 6 9 9 1 — 7 6 3 0 7 9 4 , 8 0 7 0 1 , s u o i r a V 3 8 1 6 1 , 6 9 9 1 1 1 0 2 5 7 0 4 , 9 2 7 1 , 4 9 9 1 1 1 0 2 1 5 9 5 1 , 8 6 1 2 , 6 1 0 2 4 0 0 2 4 1 0 2 4 0 0 2 4 0 0 2 4 1 0 2 7 2 1 6 9 4 5 , 2 9 5 1 , 5 1 5 6 , 2 6 9 6 7 9 0 1 , 6 1 0 2 4 4 7 9 9 1 8 3 4 9 , 6 9 9 1 5 1 0 2 6 1 0 2 6 4 6 6 , 2 2 6 1 , 6 7 4 6 1 0 2 7 3 2 9 9 9 1 5 1 0 2 8 5 9 3 , 3 7 6 3 , 4 1 0 2 2 4 8 1 , 8 7 9 7 , 5 3 4 3 1 , 7 1 2 6 3 , 2 0 0 7 1 , 7 8 4 2 3 , 4 2 2 7 , 1 6 2 2 1 , 6 8 1 1 2 , 9 6 9 4 6 , 8 7 7 7 , 4 6 0 6 , 5 7 0 8 2 , 8 1 8 3 1 , 0 4 2 3 , 0 2 5 7 1 , 1 3 4 3 1 , 3 0 5 4 1 , 5 7 2 7 2 , 7 3 5 8 , 9 4 3 1 , 9 8 5 8 1 , 2 9 7 1 1 , 1 3 8 9 1 , 5 6 0 1 1 , 9 0 7 7 , 6 9 5 9 , 7 1 3 9 4 , 1 4 1 9 1 , 7 3 8 , 7 5 5 6 7 , 1 1 0 2 2 , 0 4 2 6 1 , 7 8 4 2 3 , 4 2 2 7 , 6 0 8 0 1 , 7 3 4 0 2 , 9 6 9 , 4 6 8 9 3 , 7 4 2 7 5 , 5 5 8 6 2 , 8 6 2 3 1 , 0 2 7 , 2 6 4 2 6 1 , 1 1 1 3 1 , 9 7 3 3 1 , 9 5 3 5 2 , 7 0 1 8 , 4 2 9 7 7 3 7 1 , 3 4 0 1 1 , 1 7 8 8 1 , 5 6 7 8 , 4 4 8 4 , 6 0 6 , 8 7 9 3 2 4 , 1 0 2 5 1 , 1 4 1 0 8 7 , 5 6 0 2 , 4 1 d n a L 2 6 7 — — 5 5 4 , 1 9 4 7 — 0 8 3 0 4 3 0 5 5 0 2 2 , 1 0 2 5 0 2 3 4 7 2 , 1 4 2 1 , 1 6 1 9 , 1 0 3 4 5 2 4 2 1 2 , 1 9 4 7 0 6 9 0 0 3 , 2 5 6 8 , 2 0 9 9 0 2 9 , 6 0 4 9 , 3 e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e c n a r b m u c n E n o i t a c o L e m a N y t r e p o r P 7 6 5 , 6 3 0 7 , 2 6 3 7 9 7 8 7 3 0 2 , 9 4 7 0 , 9 8 4 3 , 4 1 9 6 9 , 4 6 3 0 9 , 3 3 6 8 , 1 2 7 2 , 9 1 3 1 7 , 7 1 0 0 , 1 9 8 2 , 5 1 0 5 , 1 0 4 8 , 3 2 0 0 , 9 0 5 9 9 1 2 4 3 3 , 5 1 2 0 1 , 4 3 5 3 , 1 7 0 6 , 1 4 8 5 9 9 9 , 6 4 0 8 , 4 0 1 3 1 6 — — — — — — — — — — 6 9 2 — — — — — — — 5 4 0 4 — — — 5 3 — — — 5 4 - F 0 7 2 , 1 2 5 9 , 4 5 7 2 , 1 2 7 3 0 , 7 8 7 4 , 2 3 7 3 4 , 6 2 3 7 , 1 9 8 0 , 6 — 5 9 4 , 3 1 6 8 , 3 3 8 5 , 7 5 5 5 , 5 9 1 7 , 1 7 5 9 , 0 1 0 1 6 , 1 1 9 3 5 , 9 7 5 3 , 6 1 7 5 1 , 7 5 0 7 3 4 0 , 2 1 4 9 , 6 8 1 5 , 7 1 8 5 1 , 7 0 6 2 , 4 7 0 6 , 1 3 9 5 , 7 3 1 9 8 , 4 1 0 8 0 8 7 , 5 6 0 2 , 4 1 2 6 7 — — 5 5 4 , 1 — 9 4 7 0 8 3 0 4 3 4 2 9 0 5 5 0 2 5 4 7 2 , 1 0 2 3 4 2 1 , 1 6 1 9 , 1 0 3 4 0 2 4 8 0 8 9 4 7 0 6 9 0 0 3 , 2 0 3 8 , 2 0 9 9 0 2 9 , 6 0 4 9 , 3 B C E A — — C A — A A B C — C E A B C — A B E — — C B E N I , d n e B h t u o S L F , s e l p a N L F , n o s d u H N I , a l o e c s O e l i b o M r e t a W r a e l C s e l p a N b u l C e g a l l i V e l i b o M n e e r G s u b o C k r a P e m o H d o o w d l i W b u l C X T , s l e f n u a r B w e N A C , d r a n x O ) 2 ( y n o l o C e h T s m r a F l a m o C L F , e g n a r O t r o P ) 4 ( d o o W e h t n i y n o l o C I M , d l e i f h t u o S I M , n o s i v a D ) 5 ( s r e t r a u q d a e H e t a r o p r o C h t r o N l a t n e n i t n o C I M , e l l i v n o s d u H e g a l l i V s l l i H y r t n u o C I M , k c o R t a l F e l i b o M s w o d a e M y r t n u o C e g a l l i V A G , e l l i v e c n e r w a L a t n a l t A e d i s y r t n u o C I M , a i n o d e l a C e g a l l i V s w o d a e M y r t n u o C L F , y e l s i a P V R & H M e r i u q S y r t n u o C t r o s e R ) 1 ( N O , g r u b s k r a l C & t r o s e R V R h t i e l g i a r C d n u o r g p m a C T M , s l l a F t a e r G e g a l l i V e d i s y r t n u o C I M , n o t r u B s w o d a e M d o o w k e e r C A P , n a e k c M s e t a t s E e d i s y r t n u o C A G , d r o f u B t t e n n i w G e d i s y r t n u o C A G , d r o f u B r e i n a L e k a L e d i s y r t n u o C I M , c a l l i d a C e l i b o M s e r c A y r t n u o C e g a l l i V I M , s d i p a R d n a r G L F , d e r f l A e k a L e l i b o M s e t a t s E r e l t u C e g a l l i V s n e e r G s s e r p y C ) 1 ( N O , e l l i v s t n u H N I , n o s r e d n A L F , o d n a l r O Z A , n o i t c n u J e h c a p A & t r o s e R V R e k a L r e e D d n u o r g p m a C n u R d l e i f r e e D r o b r a H t r e s e D d o o w r e e D L F , e g n a r O t r o P t r o s e R V R h c a e B a n o t y a D d e t a l u m u c c A n o i t a i c e r p e D l a t o T e l b a i c e r p e D s t e s s A t a d e i r r a C t n u o m A s s o r G 7 1 0 2 , 1 3 r e b m e c e D d e z i l a t i p a C s t s o C n o i t i s i u q c A o t t n e u q e s b u S ) s t n e m e v o r p m I ( y n a p m o C o t t s o C l a i t i n I 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S r o ) A ( d e r i u q c A ) C ( d e t c u r t s n o C e t a D d e t a l u m u c c A n o i t a i c e r p e D l a t o T e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e c n a r b m u c n E n o i t a c o L e m a N y t r e p o r P t a d e i r r a C t n u o m A s s o r G 7 1 0 2 , 1 3 r e b m e c e D d e z i l a t i p a C s t s o C n o i t i s i u q c A o t t n e u q e s b u S ) s t n e m e v o r p m I ( y n a p m o C o t t s o C l a i t i n I 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S ) A ( ) A ( ) A ( ) C ( ) C & A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( 4 1 0 2 9 8 3 4 , 6 1 0 2 1 1 0 2 8 9 9 1 0 0 0 2 2 1 0 2 9 5 9 4 6 6 2 , 2 3 7 4 1 , 1 1 6 9 , 6 3 1 6 , 4 1 0 2 7 1 1 3 , 6 1 0 2 8 7 4 7 1 0 2 6 6 1 5 1 0 2 8 4 6 1 , 4 1 0 2 3 9 9 1 9 9 9 1 5 1 0 2 4 3 6 1 6 7 4 , 5 6 4 1 , 6 5 9 1 , 6 1 0 2 3 7 5 1 0 2 0 0 0 2 9 7 6 9 8 0 4 , ) C & A ( 4 1 0 2 7 3 8 7 , ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C & A ( ) A ( ) A ( 6 1 0 2 7 0 4 1 , 6 1 0 2 4 6 8 6 1 0 2 3 9 0 1 , 6 1 0 2 4 2 3 5 1 0 2 6 1 0 2 1 0 0 2 7 9 9 1 6 1 0 2 8 0 5 0 3 5 4 , 1 5 9 6 , 4 7 7 4 , 4 5 3 4 1 0 4 3 , 0 5 6 2 2 , 6 2 1 1 1 , 9 7 7 2 3 , 3 5 3 7 2 , 7 2 7 1 3 , 4 1 5 5 2 , 8 3 2 1 1 , 9 4 4 9 1 , 8 4 1 0 2 , 3 4 1 8 , 9 1 8 7 , 9 1 6 3 , 6 3 8 3 2 , 1 7 5 1 , 4 1 6 9 , 4 4 8 8 , 9 7 4 9 6 , 0 5 2 3 5 , 4 7 1 8 2 , 2 5 7 1 3 , 3 6 4 0 2 , 8 5 2 0 7 , 1 9 4 1 1 , 5 7 0 6 1 , 3 9 0 0 1 , 7 1 4 0 1 , 4 6 5 2 3 , 0 5 2 8 1 , 6 5 7 0 1 , 4 6 7 0 3 , 3 7 0 6 2 , 7 1 3 0 3 , 4 2 8 4 2 , 0 5 4 , 1 0 0 4 , 4 0 7 3 5 1 0 , 2 0 8 2 , 1 0 1 4 , 1 0 9 6 3 1 7 , 2 7 2 3 , 1 9 5 7 , 1 4 1 6 , 0 3 1 7 7 , 9 1 4 0 9 , 4 8 2 2 , 2 8 0 1 9 , 0 3 1 , 2 3 5 3 , 1 9 1 1 9 , 8 8 9 8 1 , 3 1 3 5 , 9 3 4 7 , 8 8 5 2 , 6 0 5 2 2 , 1 6 4 1 , 4 0 1 , 9 4 4 3 8 , 0 3 3 , 0 1 0 6 1 , 1 0 3 8 , 2 0 8 3 1 3 0 , 1 0 3 3 , 1 0 1 1 0 1 5 0 0 5 9 4 5 1 3 8 3 8 8 3 5 0 5 4 1 0 0 , 4 1 0 7 0 1 9 , 3 3 3 5 , 3 9 2 0 8 6 , 0 5 4 , 1 2 0 7 , 5 1 4 9 2 6 2 , 6 5 9 , 6 2 2 9 0 , 1 4 1 9 1 2 , 6 4 8 6 1 , 3 4 9 5 , 8 9 2 1 5 , 1 1 5 9 , 4 3 4 4 1 , 5 7 4 , 9 7 5 9 6 , 0 6 2 , 6 6 0 9 , 4 1 0 2 5 , 4 1 0 6 9 , 8 1 0 8 9 , 1 1 4 6 , 1 8 1 6 0 6 4 , 3 0 6 8 9 2 0 , 1 2 2 7 2 3 1 , 8 8 3 1 , 1 1 8 9 , 3 1 3 4 6 1 4 2 , 5 — — — — — — — — — — — — — — — — — — — — — — — — — 2 7 1 — 6 4 - F 1 5 8 , 9 2 3 2 9 , 6 1 7 9 9 , 8 0 5 1 2 0 3 , 6 3 1 4 , 5 2 6 9 5 , 2 2 5 5 7 , 7 0 7 0 , 9 3 7 6 , 8 1 5 7 4 , 4 8 3 4 , 3 0 5 0 , 2 6 5 0 , 2 2 0 6 7 4 9 1 , 5 1 1 8 , 4 0 5 4 , 1 0 0 4 , 4 0 7 3 5 1 0 , 2 0 8 2 , 1 0 1 4 , 1 0 9 6 0 3 1 , 2 0 3 3 , 0 1 0 6 1 , 1 0 3 8 , 2 0 8 3 1 3 0 , 1 0 3 3 , 1 0 1 1 0 1 5 0 0 5 7 2 3 , 2 5 0 5 4 , 1 2 0 2 , 5 2 6 5 9 , 6 2 5 8 8 , 0 2 6 8 9 , 5 1 1 2 2 , 5 6 6 1 , 3 4 3 5 4 3 7 3 , 8 4 3 2 , 4 4 1 3 , 6 0 6 2 , 6 6 0 9 , 4 1 0 2 5 , 4 1 0 6 9 , 8 1 0 8 9 , 1 1 4 6 , 1 6 4 4 0 6 4 , 3 D E A B C A D E — B — A A B — C A E D D D D C E C A — J N , t n o m r e l C g n i p m a C d o o w t f i r D t r o s e R L F , n i d e n u D t r o s e R V R n i d e n u D I M , a i n o d e l a C O C , e n o t s e r i F H O , a i v a t a B e g a l l i V l l i M n o t t u D t s e r C e l g a E k r o F t s a E I M , . p w T n o t g n i h s a W s e t a t s E e g a l l i V t s a E I M , n o g e k s u M t f a r c l e g E , h c a e B y t i C a m a n a P L F , n o t n e l l E R O , h t a m o l i h P L F , a s s a s o m o H D M , e l l i v y e l a h W N I , t r a h k l E C N , a v l y S I M , t r o p w e N A C , a r b a H a L A C , o t s e d o M L F , a l a c O Z A , a s e M I M , t n i l F L F & t r o s e R V R m a h t a T t r o F a L f o e g a l l i V y l d n e i r F a r b a H / a l l i V n w o t h c n e r F s d o o W h t e b a z i l E d n u o r g p m a C y e l a h W t r o F s n o s a e S r u o F e g a l l i V d l e i f r i a F e g a l l i V a t s e i F ' e v o C s n a m r e h s i F s w o d a e M t s e r o F w e i V t s e r o F f o e g a l l i V y l d n e i r F o t s e d o M V R s n e d r a G n o t n e l l E t r o s e R V R t s a o C d l a r e m E ) 4 ( t r o s e R A C , y e l l a V i m i S i m i S f o e g a l l i V y l d n e i r F A C , a n i v o C t s e W D M , y t i C n a e c O t s e W f o e g a l l i V y l d n e i r F n w o T r e i t n o r F a n i v o C L F , s l l i h r y h p e Z t r o s e R V R n e v a H n e l G L F , d a e t s e m o H L F , n i d e n u D C N , d r o c n o C r e t s a o C d l o G l e r u a L n e l G y a B d n a r G r o ) A ( d e r i u q c A ) C ( d e t c u r t s n o C ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( e t a D 2 1 0 2 6 9 9 1 6 1 0 2 4 1 0 2 6 1 0 2 7 9 9 1 5 1 0 2 5 9 8 1 , 3 2 7 3 , 9 2 2 9 1 4 4 , 1 4 3 5 5 7 2 , 9 0 2 7 , ) A ( 6 1 0 2 0 7 1 ) A ( ) C & A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C & A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C ( 3 1 0 2 9 9 4 4 8 9 1 5 1 0 2 6 1 0 2 1 1 0 2 1 1 0 2 6 1 0 2 6 1 0 2 6 1 0 2 7 9 9 1 6 1 0 2 6 1 0 2 1 1 0 2 7 9 9 1 0 7 4 6 , 0 3 9 5 , 5 6 4 5 8 6 2 , 3 0 8 8 9 3 8 4 2 0 8 6 8 6 6 , 1 4 2 4 9 7 1 , 8 1 3 2 , 6 9 9 5 , 4 0 0 2 3 5 8 7 , 6 1 0 2 5 6 3 6 1 0 2 2 5 8 1 , 2 1 0 2 4 0 0 2 3 5 4 8 2 8 7 , 5 0 3 3 1 , 9 0 8 7 , 5 5 6 5 , 6 5 4 2 4 , 7 5 7 7 , 3 5 4 6 , 7 7 5 7 9 , 1 6 2 6 , 8 3 3 3 , 3 7 7 5 1 , 8 1 4 5 8 , 3 6 0 2 2 , 2 5 7 0 1 , 9 3 2 4 , 5 2 5 1 1 , 8 4 8 7 , 3 1 2 4 , 9 7 6 4 1 , 8 1 8 2 3 , 7 2 6 6 , 7 6 6 9 , 2 3 6 0 1 , 2 5 3 0 2 , 5 6 1 8 , 9 7 6 4 4 , 9 6 7 2 , 7 9 4 4 2 , 5 2 0 8 , 5 3 4 7 , 3 7 6 4 , 6 8 0 7 3 , 7 6 4 6 , 4 0 2 , 6 7 6 0 3 8 , 4 7 3 0 8 2 , 5 2 8 9 0 7 3 , 5 0 9 2 , 1 9 4 2 0 1 5 , 4 1 d n a L 4 2 5 , 3 8 4 8 , 3 ) 0 3 ( 3 5 4 0 8 0 , 1 8 0 8 , 3 7 3 1 , 4 4 7 2 3 , 7 8 9 , 2 4 2 3 8 7 5 2 , 2 1 1 5 1 , 8 2 5 9 6 , 3 6 8 8 , 2 9 9 9 , 9 9 7 , 3 5 7 5 7 , 5 0 2 , 5 3 9 4 1 , 3 2 8 3 1 , 8 2 0 9 2 , 7 3 8 4 , 7 2 3 9 , 2 1 7 9 , 0 6 7 1 6 6 0 9 8 , 5 1 0 0 2 , 3 1 0 6 7 0 4 4 0 5 9 , 3 3 4 6 , 2 0 2 7 , 2 6 5 8 0 9 7 , 3 0 9 7 , 1 0 4 3 0 2 9 3 8 9 , 1 7 3 4 , 3 1 6 8 9 3 7 9 , 1 5 9 2 , 2 6 0 9 , 2 9 9 1 , 1 1 2 5 5 3 0 , 1 2 9 7 , 6 8 6 9 8 2 8 , 1 0 6 2 , 1 6 3 3 , 1 8 3 8 8 1 , 4 1 5 , 1 2 4 2 , 5 5 4 6 6 , 0 2 5 , 1 5 2 6 , 1 3 1 2 5 3 , 9 3 3 , 2 5 9 3 3 2 , 0 3 4 6 6 4 , 9 2 0 1 , 1 1 0 6 , 2 7 4 2 , 1 9 6 4 , 1 1 — — 2 1 — — — — 7 3 — 6 3 5 — — — — — 3 3 — ) 2 4 ( — — — — — — — — — 7 4 - F 1 0 5 , 4 7 8 5 , 3 0 2 2 , 4 6 1 1 , 7 3 7 8 3 , 5 6 9 3 , 2 0 3 9 , 8 7 4 7 3 0 8 2 , 5 0 7 9 0 7 3 , 5 0 9 2 , 1 9 4 2 0 1 5 , 4 1 0 5 9 , 2 0 5 9 , 2 5 9 5 5 7 6 , 1 5 5 5 , 7 6 7 7 8 , 7 7 9 6 , 7 3 9 8 6 7 3 , 6 0 7 1 , 4 2 7 9 1 3 0 , 7 0 0 2 , 7 2 9 6 8 , 3 7 6 0 , 8 6 7 3 , 8 0 6 7 5 2 1 0 9 8 , 5 1 0 0 2 , 3 1 0 6 7 0 4 4 0 5 9 , 3 0 1 6 , 2 0 2 7 , 2 8 9 8 0 9 7 , 3 0 9 7 , 1 0 4 3 0 2 9 6 9 5 , 3 1 4 1 5 , 1 0 2 0 , 5 0 2 5 , 1 2 1 6 , 2 3 2 9 0 , 1 6 2 9 , 1 1 0 3 4 6 6 4 , 9 2 0 1 , 1 C B — E E A B — C B B D — C — — — — C — B B B — E C C I M , s d i p a R d n a r G s e t a t s E e l i b o M d n a r G L F , a r t i C s e k a L d n a r G ) 1 ( N O , a g u y a C & t r o s e R V R s k a O d n a r G d n u o r g p m a C O C , n o t n r o h T ) 3 ( e g d i R a t l A t a e v o r G e h T L F , y t i C e d a D t r o s e R V R e g d i R e v o r G L F , s r e y M . t F L F , o d n a l r O t r o s e R V R s e v o r G r o b r a H m a e r t s f l u G ) 1 ( N O , e v o r g l l i M I M , e l l i v r e b b e W L F , e l a d n r u b u A A C , a l u c e m e T A V , n n y w G t r o s e R V R e k a L s ' r e v i l l u G d n u o r g p m a C & t r o s e R V R d n a l s I ' s n n y w G d n u o r g p m a C & s n o t p m a H e h T n i l m a H e g a t i r e H ) 1 ( N O , e l a d n a m r o N t r o s e R V R y e l l a V n e d d i H d n u o r g p m a C & L F , w e i v r e v i R t r o s e R V R r e v i R n e d d i H I M , k e e r C e l t t a B e g a l l i V s l l i H y r o k c i H I M , s n i k p o H t r o s e R V R e g d i R n e d d i H X T , s l e f n u a r B w e N L F , a k p o p A d n a e g a t t o C y r t n u o C l l i H t r o s e R V R s l l i H e h T L F , t s e W y e K E D , a c i r e d e r F y a w a e d i H e h T ) 3 ( e t n i o P h g i H , s g n i r p S a s s a s o m o H V R r e v i R a s s a s o m o H L F t r o s e R L F , l l i H y l l o H s e t a t s E t s e r o F y l l o H I M , d n a l l o H e g a l l i V t s e W y a d i l o H I M , y l l o H n a i i a w a H / e g a l l i V y l l o H s n e d r a G L F , n o t n e d a r B I M , d n a l y a W I M , c a p a C V R e v o C e o h s e s r o H t r o s e R g n i s s o r C s r e t n u H n e l G s r e t n u H d e t a l u m u c c A n o i t a i c e r p e D l a t o T e l b a i c e r p e D s t e s s A e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e c n a r b m u c n E n o i t a c o L e m a N y t r e p o r P t a d e i r r a C t n u o m A s s o r G 7 1 0 2 , 1 3 r e b m e c e D d e z i l a t i p a C s t s o C n o i t i s i u q c A o t t n e u q e s b u S ) s t n e m e v o r p m I ( y n a p m o C o t t s o C l a i t i n I 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S r o ) A ( d e r i u q c A ) C ( d e t c u r t s n o C ) A ( e t a D 6 9 9 1 4 0 3 8 2 , d e t a l u m u c c A n o i t a i c e r p e D 5 7 7 9 4 , l a t o T ) C & A ( 3 1 0 2 6 8 1 4 , ) A ( ) A ( ) A ( ) A ( ) A ( ) C & A ( ) A ( 6 1 0 2 5 4 1 1 , 5 9 9 1 7 3 0 5 , 3 1 0 2 2 4 2 2 , 6 1 0 2 2 6 3 3 1 0 2 5 9 9 1 6 1 0 2 2 7 7 2 , 6 0 7 6 , 7 2 8 ) C & A ( 6 9 9 1 7 9 0 2 1 , ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( 4 9 9 1 6 1 0 2 5 1 0 2 6 1 0 2 6 1 0 2 1 0 0 2 4 1 0 2 5 1 0 2 5 1 0 2 4 1 3 3 , 0 3 3 2 7 4 1 , 1 8 7 7 3 4 3 4 2 4 , 6 8 7 1 , 3 4 4 5 , 5 4 4 2 , 8 9 9 1 6 6 0 7 , 6 1 0 2 3 3 1 6 1 0 2 0 9 2 1 0 2 6 1 0 2 4 9 9 1 5 1 0 2 2 0 9 1 , 7 5 6 6 0 3 , 4 8 5 2 , ) C & A ( 4 1 0 2 0 0 1 6 , 9 8 8 7 2 , 4 1 3 4 2 , 0 4 9 7 , 3 3 3 1 1 , 7 4 6 9 , 9 5 9 5 1 , 5 5 3 1 1 , 1 5 4 5 1 , 2 7 6 2 2 , 0 2 6 5 , 8 1 5 9 , 1 5 7 7 1 , 4 1 7 8 1 , 8 4 0 2 1 , 3 6 6 8 , 9 9 0 9 1 , 6 3 3 7 6 , 7 1 8 6 2 , 4 6 2 4 1 , 6 1 6 4 , 7 2 4 2 , 0 1 0 6 1 , 2 5 7 3 , 9 8 1 5 , 4 7 6 0 3 , 1 5 1 7 3 , e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e c n a r b m u c n E n o i t a c o L e m a N y t r e p o r P 3 4 9 , 5 4 2 3 8 , 3 3 8 2 , 1 1 4 7 4 7 2 , 4 3 4 1 2 , 0 4 2 7 , 5 1 4 0 0 7 0 8 8 , 2 3 7 7 0 1 , 0 6 5 3 8 6 , 6 4 6 9 , 1 9 0 8 6 4 2 , 5 7 6 7 7 , 0 8 8 , 1 6 4 2 , 2 9 8 0 5 1 , 5 0 1 1 1 , 1 0 2 4 1 , 0 3 9 0 2 , 0 4 3 5 , 8 4 2 7 , 1 4 2 7 1 , 4 4 4 5 1 , 8 0 3 8 , 3 6 2 8 , 9 2 7 4 1 , 6 9 6 3 6 , 7 4 1 3 2 , 5 9 5 3 1 , 0 1 3 3 , 9 4 7 1 , 0 5 6 8 , 2 6 2 3 , 4 5 8 4 , 4 9 1 0 3 , 0 7 8 0 5 2 0 5 2 , 1 0 8 2 2 4 7 , 1 0 1 5 0 7 2 , 2 0 7 2 , 3 0 0 4 0 4 7 , 3 0 7 3 , 4 0 4 6 , 3 0 7 6 , 3 9 6 6 5 0 2 , 6 6 0 4 , 8 1 4 0 , 8 8 4 1 , 7 8 9 7 , 2 0 7 6 , 1 8 7 4 2 4 0 , 1 9 8 4 , 1 2 0 2 , 4 7 8 5 1 8 3 , 1 2 2 9 6 1 6 , 7 6 0 3 , 1 5 3 2 , 1 8 7 6 0 6 3 , 7 0 9 4 5 3 3 0 8 4 9 5 4 3 5 5 , 1 2 3 4 6 0 8 , 1 9 9 3 1 1 8 4 3 , 0 4 3 , 2 8 9 6 , 6 — ) 5 ( — — — — — — — 9 6 2 — — — — — — — — — — 6 1 8 — — — — — 8 4 - F 0 6 6 , 4 3 2 3 8 , 3 1 9 7 , 0 2 0 7 4 , 9 1 1 3 4 , 6 0 2 4 0 0 7 0 8 8 , 2 7 2 5 , 5 0 6 5 1 2 5 , 5 0 8 8 , 1 4 8 8 , 8 9 9 6 , 2 0 6 1 , 6 2 8 7 , 3 1 2 4 5 , 2 8 7 5 , 5 3 6 7 , 6 1 2 0 4 , 4 1 9 1 8 , 6 1 6 0 , 4 2 4 1 , 4 1 5 1 3 , 2 6 5 2 2 , 2 2 9 7 9 , 5 0 7 8 0 5 2 0 5 2 , 1 3 7 4 , 1 0 8 2 0 1 5 0 7 2 , 2 0 7 2 , 3 0 0 4 0 4 7 , 3 0 7 3 , 4 0 4 6 , 3 0 7 6 , 3 9 6 6 5 7 0 , 2 0 9 2 , 1 0 9 2 , 1 7 9 0 , 7 0 3 8 , 2 8 4 0 , 3 5 9 7 , 9 2 0 7 6 0 6 3 , 7 0 9 4 5 3 3 0 8 4 3 1 1 , 8 2 0 4 3 , 2 D C D D A — A B C — D — B — — A B D C A — — A — A D A L F , h c a e B s r e y M . t F k r a P k e e r C n a i d n I , e k a L e h t n o a v e n e G H O ) 3 ( & V R k e e r C n a i d n I t r o s e R g n i p m a C Y N , k r a P d l e i f n e e r G O C , r u p s k r a L Y N , a v a J h t r o N I M , g n i s n a L I M , t r o p w e N I M , y t i C e s r e v a r T L F , d e r f l A e k a L L F , e e m m i s s i K L F , d n a l e k a L L F , y r a B e D L F , t r o p n e v a D t a ) M T ( k r a P e n o t s y l l e J s e r c A d o o w h c r i B t a ) M T ( k r a P e n o t s y l l e J r u p s k r a L f o ) M T ( k r a P e n o t s y l l e J k r o Y w e N n r e t s e W s w o d a e M n o t g n i s n e K s e t a t s E y l r e b m K i e l i b o M t r u o C s g n i K e g a l l i V V R h t u o S e e m m i s s i K s n e d r a G e e m m i s s i K t r o s e R r o n a M s g n i K e k a L s g n i K e t n i o P s g n i K ' L F , d n a l s I t t i r r e M s e k a L d n a l s I A C , o i d n I t r o s e R V R s l l e W n a i d n I Z A , n o i t c n u J e h c a p A L F , e g n a r O t r o P a c n a l B a s a C a L e g a l l i V a t s o C a L I M , e l a d n e l l A s e t a t s E d o o w l l o n K ) 1 ( N O , y e l l a V y r r e h C & t r o s e R V R e u n e v A e k a L d n u o r g p m a C X T , n i t s u A t r o s e R V R a d n e i c a H a L I M , n e r r a W e c a l P e t t e y a f a L ) 1 ( N O , y n i T & t r o s e R V R e n i a t n o f a L d n u o r g p m a C L F , e l a d n r u b u A s g n i d n a L a n a i l u J e k a L L F , y r r e b l u M e g a l l i V e t n i o P e k a L N I , s u a l C a t n a S t r o s e R V R & d n u o r g p m a C h p l o d u R e k a L A P , n o v r a N L F , g n i r b e S e n i h p e s o J e k a L d o o W n I e k a L t a d e i r r a C t n u o m A s s o r G 7 1 0 2 , 1 3 r e b m e c e D d e z i l a t i p a C s t s o C n o i t i s i u q c A o t t n e u q e s b u S ) s t n e m e v o r p m I ( y n a p m o C o t t s o C l a i t i n I 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S r o ) A ( d e r i u q c A ) C ( d e t c u r t s n o C ) A ( ) A ( ) A ( ) A ( ) A ( ) C & A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C & A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C & A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C ( e t a D 6 9 9 1 6 1 0 2 6 1 0 2 4 1 0 2 5 1 0 2 5 1 0 2 4 0 0 2 5 1 0 2 7 1 0 2 1 1 0 2 6 1 0 2 8 4 9 4 3 3 7 3 2 5 , 6 7 4 2 , 9 8 6 1 , 9 5 8 2 , 0 7 5 7 , 0 6 1 1 , 2 2 1 7 1 9 1 , 6 0 4 5 8 9 1 9 3 7 2 , 6 9 9 1 7 6 2 4 , 6 1 0 2 6 1 0 2 4 1 0 2 4 1 0 2 6 1 0 2 1 1 2 1 1 3 6 7 9 5 , 6 6 7 1 , 9 2 6 4 9 9 1 9 6 5 3 1 , 0 0 0 2 6 8 9 1 4 9 9 1 5 1 0 2 4 1 0 2 6 1 0 2 3 5 8 8 , 9 4 2 0 1 , 0 2 1 4 , 6 9 2 1 , 0 4 2 8 3 3 4 1 0 2 0 7 5 1 , 6 1 0 2 1 1 0 2 3 1 0 2 6 1 0 2 1 1 0 2 1 0 0 2 4 6 6 0 4 9 3 7 1 3 5 7 1 , 4 0 4 1 , 0 9 7 3 , 5 7 5 0 1 , 9 4 9 9 3 , 4 9 5 8 , 7 2 3 3 2 , 3 0 8 2 2 , 4 8 6 1 4 , 2 0 7 8 1 , 7 4 8 4 1 , 8 3 9 3 1 , 8 8 3 9 , 6 2 3 7 2 , 0 6 9 4 , 5 2 5 7 , 9 5 9 4 , 9 5 8 9 , 6 9 8 7 5 , 1 8 2 6 1 , 7 1 6 4 1 , 2 3 5 1 2 , 7 5 1 3 2 , 8 1 0 8 1 , 7 3 3 6 , 0 1 3 3 1 , 6 0 1 2 , 1 5 5 7 , 9 1 2 8 1 , 0 3 0 0 3 , 8 8 4 7 , 9 9 8 0 1 , 6 9 6 5 , 1 8 3 9 , 8 4 6 9 , 5 2 9 , 9 3 9 3 8 1 , 4 6 8 6 , 7 5 7 0 2 , 3 2 7 9 1 , 4 6 1 8 3 , 6 4 5 7 1 , 7 1 5 3 1 , 8 3 8 6 , 8 2 0 9 , 6 8 7 7 , 8 7 7 4 , 0 7 0 , 7 9 4 2 4 , 1 9 8 5 , 6 3 4 9 4 , 1 1 5 4 1 , 7 2 8 1 1 , 7 1 2 0 2 , 7 4 8 1 2 , 8 0 2 7 1 , 8 1 8 5 , 0 7 6 2 1 , 6 5 8 1 , 1 5 1 , 6 9 2 7 2 1 , 0 9 2 2 1 , 8 4 8 3 , 9 4 3 9 , 6 2 4 3 , 1 3 2 5 , 6 6 0 8 , 0 5 6 6 5 5 , 1 2 d n a L 0 3 7 , 1 0 7 5 , 2 0 8 0 , 3 0 2 5 , 3 6 5 1 , 1 0 3 3 , 1 0 0 1 , 7 0 6 3 2 8 1 5 5 4 0 4 5 , 9 1 0 1 7 8 6 9 , 3 0 6 4 , 8 0 7 7 , 1 0 9 7 , 2 5 1 3 , 1 0 1 3 , 1 0 1 8 9 1 5 0 4 6 0 5 2 0 0 4 , 1 0 9 4 , 5 0 4 7 , 7 1 0 4 6 , 3 0 5 5 , 1 0 7 2 , 2 0 5 1 , 4 2 8 5 , 1 e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e c n a r b m u c n E n o i t a c o L e m a N y t r e p o r P 3 5 9 5 6 1 , 4 0 4 3 , 1 6 7 2 , 1 0 4 7 9 4 5 , 6 3 4 6 , 6 1 7 6 — 9 0 8 8 6 8 7 7 5 , 3 9 6 8 , 2 5 3 8 6 6 1 , 1 1 7 5 9 2 5 , 1 9 6 3 , 1 9 1 7 , 8 7 7 2 , 5 1 8 8 8 , 3 1 0 9 0 , 1 7 9 9 , 4 6 3 8 2 1 3 , 1 4 0 4 5 1 6 8 2 8 , 1 0 9 0 , 4 3 0 7 5 4 7 , 1 9 3 0 , 5 — — — — — — — — — — — 6 1 1 — — 8 2 — — — 7 2 1 — 9 7 3 — — — — — — — — — — — 9 4 - F 0 6 7 , 5 0 4 4 , 7 1 4 2 5 , 5 1 8 4 , 9 1 3 8 9 , 8 1 5 1 6 , 1 3 3 0 9 , 0 1 6 4 8 , 2 1 8 3 8 , 6 9 1 2 , 8 8 1 9 , 6 1 0 2 , 1 1 0 2 , 4 4 1 4 , 3 5 2 7 , 4 5 6 8 , 8 4 2 8 9 , 2 1 8 5 4 , 0 1 8 9 4 , 1 1 0 7 5 , 6 0 2 3 , 3 8 2 7 , 4 3 7 6 , 7 0 2 0 , 1 9 3 8 , 4 5 2 3 , 2 1 5 7 6 , 1 1 0 2 0 , 2 9 5 2 , 5 3 2 7 , 2 6 8 4 , 3 7 2 0 , 3 0 5 6 6 5 5 , 1 2 0 3 7 , 1 0 7 5 , 2 0 8 0 , 3 0 2 5 , 3 6 5 1 , 1 0 3 3 , 1 0 0 1 , 7 0 6 3 6 6 5 5 4 0 4 5 , 9 1 0 1 7 0 4 9 , 3 0 6 4 , 8 0 7 7 , 1 0 9 7 , 2 8 8 1 , 1 0 1 3 , 1 1 3 4 9 1 5 0 4 6 0 5 2 0 0 4 , 1 0 9 4 , 5 0 4 7 , 7 1 0 4 6 , 3 0 5 5 , 1 0 7 2 , 2 0 5 1 , 4 2 8 5 , 1 A D — D B D C B — C D C — — E B E — B C A B A C — B D C C — C C A C , e d i s e k a L L F , d n a l e k a L L F , o d n a l r O L F , a p m a T C S , y a w n o C I M , i t n a l i s p Y L F , e g n a r O t r o P I M , t n o m l e B A C , a t a c r A N I , o s i a r a p l a V A C , a r u t n e V I M , d n a l l o H t r o s e R V R d n a l e k a L s g n i d n a L e r o h s e k a L g n i s s o r C e d i s e k a L s a l l i V e r o h s e k a L t n o r f e k a L ) 4 ( h c n a R J y z a L r e t h g i l p m a L e g a l l i V e r u s i e L d o o W n o m e L s m r a F y t r e b i L s e t a t s E n l o c n i L w e i v e k a L L F , s e l p a N k r a P V R o n i r a M n a S e k a L L F , s l l i h r y h p e Z t r o s e R V R s k a O c i t s e j a M J N , t a g e n r a B & t r o s e R V R h c a e B g n o L d n u o r g p m a C L I , n o s e t t a M k o o r B e l p a M E M , k c i w s n u r B r o n a M d o o w e l p a M I M , e k a L e t i h W s e t a t s E e k a L w o d a e M L F , s e l p a N t r o s e R V R s e l p a N o c r a M C N , e t t o l r a h C k o o r b w o d a e M I M , e o r n o M s e t a t s E k o o r b w o d a e M L F , a p m a T e g a l l i V k o o r b w o d a e M I M , d o o w k c o R r a t l a r b i G f o s d n a l w o d a e M E M , k c i w s n u r B g n i t e e m y r r e M L F , e e m m i s s i K t r o s e R V R k e e r C l l i M L F , n e v a H e r o o M A V , t n i o P w e N L F , r e t a w r a e l C Z A , a s e M A C , a p a N L F , s e l p a N t r o s e R V R s e l p a N y e l l a V a p a N w e i V n i a t n u o M t r o s e R V R t n i o P w e N h c n a R w e N e k a L h t r o N O C , o l b e u P s e t a t s E t n i o P h t r o N d e t a l u m u c c A n o i t a i c e r p e D l a t o T e l b a i c e r p e D s t e s s A t a d e i r r a C t n u o m A s s o r G 7 1 0 2 , 1 3 r e b m e c e D d e z i l a t i p a C s t s o C n o i t i s i u q c A o t t n e u q e s b u S ) s t n e m e v o r p m I ( y n a p m o C o t t s o C l a i t i n I 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S r o ) A ( d e r i u q c A ) C ( d e t c u r t s n o C ) A ( ) A ( ) C ( ) A ( ) A ( ) A ( e t a D 2 1 0 2 4 1 0 2 2 0 0 2 1 1 0 2 4 1 0 2 6 1 0 2 2 9 9 8 , 1 1 5 1 , 9 4 9 8 , 0 4 4 2 , 5 8 7 4 , 7 3 2 ) C & A ( 8 9 9 1 7 0 1 1 1 , ) A ( ) C & A ( ) A ( ) A ( ) A ( ) A ( ) A ( 6 1 0 2 — 6 1 0 2 7 1 0 2 4 2 9 9 7 1 1 0 2 4 9 9 1 9 9 9 1 6 1 0 2 3 0 7 1 , 6 2 5 2 , 7 1 8 2 , 9 5 3 ) C & A ( 2 1 0 2 1 9 5 9 1 , ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C & A ( ) C ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( 5 1 0 2 6 1 0 2 6 1 0 2 5 1 0 2 5 1 0 2 4 1 0 2 0 0 0 2 9 9 9 1 6 1 0 2 3 8 1 9 6 4 1 , 2 7 1 1 , 4 3 2 4 , 3 1 5 2 , 9 7 2 1 , 3 4 3 6 , 8 9 0 2 , 6 8 2 5 1 0 2 6 3 0 1 , 6 1 0 2 6 1 0 2 8 0 3 7 8 3 6 1 0 2 4 3 2 3 1 0 2 1 4 2 5 , d e t a l u m u c c A n o i t a i c e r p e D l a t o T e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e c n a r b m u c n E n o i t a c o L e m a N y t r e p o r P t a d e i r r a C t n u o m A s s o r G 7 1 0 2 , 1 3 r e b m e c e D d e z i l a t i p a C s t s o C n o i t i s i u q c A o t t n e u q e s b u S ) s t n e m e v o r p m I ( y n a p m o C o t t s o C l a i t i n I 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S 8 9 5 9 3 , 7 3 4 7 1 , 8 8 1 6 2 , 5 6 7 9 , 8 7 9 0 4 , 4 2 5 5 , 6 8 8 2 2 , 3 7 3 2 , 8 2 2 6 4 , 0 8 4 9 , 2 4 3 8 , 2 5 9 3 , 0 2 1 6 , 5 2 8 7 , 8 0 0 7 0 1 , 7 9 4 0 2 , 2 8 5 6 , 0 4 3 3 2 , 4 5 2 2 5 , 9 5 9 9 2 , 0 4 2 1 1 , 9 7 6 3 1 , 5 4 8 8 , 0 2 8 7 , 5 9 1 2 1 , 9 3 7 0 1 , 0 1 5 7 1 , 4 7 0 1 3 , 2 5 7 4 , 2 6 3 8 3 , 7 7 6 2 1 , 7 7 8 1 2 , 5 4 4 9 , 8 8 8 9 3 , 4 7 6 4 , 2 2 9 0 2 , 3 4 2 0 2 7 2 , 3 1 4 4 , 2 2 4 7 , 4 5 6 3 , 0 4 7 , 5 5 9 1 7 , 2 7 1 5 9 , 7 5 6 6 1 , 2 1 6 3 , 0 4 3 3 2 , 4 9 8 0 5 , 9 8 2 9 2 , 0 9 6 0 1 , 9 4 6 2 1 , 1 3 2 7 , 0 2 8 5 , 5 2 7 1 1 , 9 7 9 5 , 0 5 9 7 , 4 7 3 6 2 , 2 2 5 4 , 6 3 2 , 1 0 6 7 , 4 1 1 3 , 4 0 2 3 0 5 8 0 9 0 , 1 4 6 9 , 1 0 3 3 , 2 6 2 0 , 9 1 7 6 0 , 5 0 2 9 8 9 2 0 8 3 0 3 6 8 9 7 , 8 2 9 4 , 1 6 6 2 , 9 2 0 6 , 2 7 4 9 , 2 3 9 7 ) 7 2 7 , 1 ( 1 2 5 , 4 1 — 0 4 3 , 3 1 2 8 8 , 1 4 2 1 , 1 5 1 7 , 1 4 9 5 6 3 8 , 1 1 9 2 0 , 9 1 0 4 8 , 3 0 7 9 , 2 — 0 6 3 , 1 0 7 6 0 5 5 0 3 0 , 1 4 1 6 , 1 0 0 0 , 2 0 7 4 0 6 7 , 4 0 6 5 , 9 0 0 7 , 4 0 3 2 6 9 9 3 6 7 5 2 5 , 1 6 1 2 , 2 3 4 2 8 8 2 5 7 5 , 7 1 3 2 , 7 0 2 8 2 8 1 , 1 1 8 6 7 3 2 , 1 4 3 5 , 3 2 5 2 , 1 — — — — — — — — — 7 2 — 5 1 ) 5 1 ( — — — — — — — — — 5 3 2 — — — — — — 0 5 - F 4 6 5 , 9 2 5 8 1 , 1 1 1 1 6 , 2 1 3 4 8 , 6 1 4 9 , 6 3 1 8 8 , 3 1 0 4 , 6 0 7 7 , 1 2 6 8 , 3 1 3 1 4 , 4 0 4 5 , 5 0 3 5 , 2 5 2 0 , 4 1 0 6 , 6 3 4 1 , 6 7 1 6 6 , 5 1 9 4 8 , 2 5 1 8 , 1 2 8 7 6 , 8 4 6 4 0 , 9 2 2 0 4 , 0 1 4 7 0 , 5 — 0 0 0 , 5 3 4 5 , 0 1 2 4 7 , 4 9 6 2 , 7 0 4 8 , 2 2 0 7 2 , 3 6 3 2 , 1 0 6 7 , 4 1 1 3 , 4 0 2 3 0 5 8 0 9 0 , 1 4 6 9 , 1 0 3 3 , 2 6 2 0 , 9 1 0 4 0 , 5 0 2 9 3 8 2 5 9 3 0 3 6 6 3 8 , 1 1 0 4 8 , 3 0 7 9 , 2 — 0 6 3 , 1 0 7 6 0 5 5 0 3 0 , 1 9 7 3 , 1 0 0 0 , 2 0 7 4 0 6 7 , 4 0 6 5 , 9 0 0 7 , 4 0 3 2 B B B — D — B — — B C D C — D B — D D D B C C — — D D C — A C , d l o g e s r a o C X T , n i t s u A k e e r C k a O t s e r C k a O I M , e l l i v h t r o N s g n i s s o r C e l l i v h t r o N I M , g n i s n a L t s a E e g a l l i V d n a l s I k a O H O , g r u b s i m a i M L F , n o h t a r a M L I , o n e t n a M L F , a i d a c r A A C , e l l i v y e l n i K c M L F , h c a e B n e s n e J L F , y t i C e g n a r O L F , y t i C e g n a r O H O , d r o f l i M L F , a l a c O Z A , e d n a r G a s a C L F , t r o p n e v a D L F , n o t n e d a r B L F , k r a P s a l l e n i P Y N , a g a w o t k e e h C X T , n w o t e g r o e G N I , d o o w n e e r G A C , o r d e P n a S L F , n a i t s a b e S n e s n e J e z e e r B n a e c O h c a e B ) 4 ( t s e W n a e c O V R & H M y t i C e g n a r O t r o s e R e g a l l i V e e r T e g n a r O ) 3 ( e k a L d r a h c r O V R & f l o G k e e r C m l a P t r o s e R h t u o S k r a P k c o d d a P e g a l l i V y e K m l a P e g a l l i V m l a P s e t a t s E w e i v k a O e g a l l i V d o o w k a O ) 6 ( e z e e r B n a e c O e g d i R k a O ) 2 ( H M s e r o h S s e d r e V s o l a P y t i n u m m o C f l o G & e g a l l i V e d i s k r a P k e e r C e l b b e P h c n a r B n a c e P e l a y o R k r a P e c a l P k r a P L F , e l l i v n o s k c a J t r o s e R V R k r a P n a c e P L F , o c c i M y a B n a c i l e P L F , n o h t a r a M A C , o n i h C & t r o s e R y a B n a c i l e P a n i r a M s n w o D e k o r b m e P A M , h c i w d n a S t r o s e R V R d n o P s ' r e t e P I M , y e k s o t e P t r o s e R V R y e k s o t e P r o ) A ( d e r i u q c A ) C ( d e t c u r t s n o C ) A ( e t a D 2 0 0 2 7 0 2 0 1 , d e t a l u m u c c A n o i t a i c e r p e D 9 5 0 2 2 , l a t o T ) A ( 6 1 0 2 6 2 1 ) C & A ( 4 9 9 1 7 2 1 8 , ) A ( ) C & A ( ) C & A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C & A ( ) C ( ) A ( ) A ( ) A ( 0 8 9 1 6 8 9 1 4 0 0 2 1 1 0 2 7 1 0 2 5 1 0 2 6 1 0 2 0 0 3 2 , 4 7 0 4 , 0 9 1 2 1 , 3 8 1 0 4 9 1 , 7 3 7 2 , 9 4 1 1 , 6 9 9 1 2 1 0 2 3 5 4 7 , 2 9 9 1 , 6 1 0 2 4 6 7 6 1 0 2 7 7 5 6 1 0 2 6 1 0 2 4 1 0 2 6 1 0 2 2 8 1 4 6 6 7 8 7 2 , 9 2 2 1 , 6 1 0 2 3 3 8 4 1 0 2 6 2 5 2 , 8 9 9 1 5 1 0 2 2 3 3 2 , 7 5 2 3 , 6 1 0 2 0 9 1 0 0 2 8 1 5 2 1 , 0 0 0 2 2 0 0 2 5 1 0 2 5 1 0 2 1 0 0 2 7 9 0 0 1 , 9 8 3 1 1 , 5 2 9 5 , 9 2 8 4 1 9 6 , 0 3 4 3 , 9 8 8 8 1 , 3 6 2 4 , 7 2 0 9 , 0 3 3 9 3 , 9 0 5 7 , 9 8 2 1 2 , 0 4 9 5 3 , 6 4 1 7 2 , 6 0 5 3 1 , 0 3 6 1 1 , 8 1 9 8 1 , 7 8 8 2 1 , 7 0 6 7 , 9 1 8 9 2 , 7 1 7 0 3 , 7 4 4 7 2 , 3 2 1 8 2 , 1 7 1 3 2 , 7 4 2 5 , 9 5 4 6 4 , 3 8 4 4 , 5 2 8 9 2 , 0 2 9 9 4 , 6 3 2 8 2 , 2 5 5 1 7 , 8 1 5 8 , 3 3 0 5 1 , 5 1 0 0 2 , 9 1 5 , 2 4 8 3 7 1 , 1 3 1 4 , 2 2 6 8 , 0 8 6 , 6 3 9 7 3 7 , 9 1 2 0 1 , 0 7 8 2 3 , 6 2 9 1 2 , 6 2 8 2 1 , 0 4 7 9 , 8 9 4 4 1 , e l b a i c e r p e D s t e s s A 4 4 0 , 2 d n a L 1 1 9 5 0 5 , 1 2 3 1 5 0 4 0 3 1 0 5 6 , 2 0 7 0 , 1 1 0 7 0 , 3 0 2 2 , 5 0 8 6 0 9 8 , 1 0 2 4 , 4 6 3 7 4 9 3 4 3 1 , 4 1 7 8 5 , 3 5 2 2 , 6 1 1 5 , 9 1 7 8 6 , 1 9 2 7 9 8 , 1 3 2 5 , 1 2 1 5 , 6 8 5 0 , 4 9 6 9 , 1 7 8 0 1 1 , 0 0 8 , 1 3 0 2 , 1 7 0 6 3 , 9 5 2 3 1 , 7 0 2 3 2 , 7 6 2 2 2 , 3 9 7 , 6 1 1 2 2 1 2 , 7 7 7 , 4 9 0 1 8 3 , 3 4 0 2 , 5 2 0 8 2 , 4 3 2 5 4 , 5 3 0 5 2 , 2 5 9 9 6 , 7 7 9 , 7 6 7 9 3 1 , 0 0 0 , 4 0 6 5 , 6 1 0 1 5 , 7 0 8 1 , 5 0 3 3 , 1 1 0 7 4 0 5 9 , 1 0 5 3 , 8 0 4 4 , 2 0 0 8 , 1 6 8 6 , 4 1 0 2 , 3 0 0 6 , 1 1 4 5 7 5 0 , 1 1 5 7 3 1 8 9 6 9 8 6 7 , 1 9 5 0 , 1 7 4 1 , 1 7 3 7 , 2 6 4 6 , 2 2 5 0 , 1 8 5 0 , 1 1 1 9 3 , 4 4 5 4 9 , 9 5 4 7 , 3 5 3 4 , 2 6 0 1 , 4 — 1 1 7 6 4 0 6 — ) 7 5 2 ( — — — — — — — — 0 0 0 , 4 — — — — — ) 1 3 ( — — — ) 4 ( — — 1 2 1 — 1 5 - F 9 7 2 , 9 1 4 4 0 , 2 5 2 1 , 2 0 5 2 , 3 4 4 5 7 9 3 , 2 9 6 1 , 7 1 2 9 6 , 5 0 9 1 , 0 1 3 7 9 , 0 3 3 0 4 , 0 2 4 1 3 , 6 2 8 6 , 5 9 2 5 , 2 1 0 0 9 8 3 0 , 1 2 7 5 0 4 0 3 1 7 0 9 , 2 0 7 0 , 1 1 0 7 0 , 3 0 2 2 , 5 0 8 6 0 9 8 , 1 0 2 4 , 4 4 8 8 , 9 0 0 8 , 1 6 5 8 , 2 6 4 4 , 2 1 8 3 2 , 2 2 9 9 4 , 0 2 4 3 7 , 5 1 4 7 0 , 0 2 0 4 0 , 2 3 6 4 , 5 3 1 9 9 3 4 8 7 6 9 , 6 1 0 9 0 , 5 1 7 0 2 , 6 6 2 4 5 , 5 0 7 8 , 9 — 0 6 5 , 6 1 0 1 5 , 7 0 8 1 , 5 0 3 3 , 1 1 0 5 9 , 1 1 0 5 0 5 3 , 8 0 4 4 , 2 0 0 8 , 1 0 9 6 , 4 1 0 2 , 3 0 0 6 , 1 0 2 4 7 5 0 , 1 A — B A B C C — D E B A E — — D B — — D A B — C C A D C B ) 1 ( N O , e e n a p a N O M , n o l l a F O ' N I , y r u b e l d d i M A V , e g r o e G e c n i r P I M , s d i p a R d n a r G X T , n o t s u o H t r o s e R V R k r a P l e r e k c i P d n u o r g p m a C & c r a P k a O n i P ) 3 ( e c a r T e n i P e g d i R e n i P s l l i H e n i P e g a l l i V k o o r b e n i P A P , r e t s a c n a L e g d i R t n a s a e h P A C , h c a e B o m s i P ) 4 ( t r o s e R s e n u D o m s i P L F , y t i C s e n i a H s g n i d n a L n o i t a t n a l P L F , n o t n e d a r B t r o s e R V R e k a L t n a s a e l P I M , e l l i v n o s d u H L F , f o o r p t s o r F s e t a t s E l a i t n e d i s e r P e g a l l i V e l i b o M t r o s e R V R w o b n i a R L F , o g r a L o g r a L f o e g a l l i V w o b n i a R , o n a r t s i p a C n a u J n a S A C L F . s l l i h r y h p e Z A C , e d i s r e v i R Z A , n o i t c n u J e h c a p A f o e g a l l i V w o b n i a R s l l i h r y h p e Z ) 2 ( z a p i l A o h c n a R o r e l l a b a C o h c n a R e g a r i M o h c n a R Z A , y t i C d a e h l l u B k e e r C x o F t a e v r e s e R L F , r e t a w r a e l C L F , l l e n h s u B ) 2 ( t r o s e R V R s k a O d e R s t h g i e H y c n e g e R I M , d n o m h c i R L F , t r o p n e v a D L F , o g r a L y e K ) 3 ( e c a l P d n o m h c i R e g d i R e h T & t r o s e R V R e d i t p i R a n i r a M I M , n e v a H d n a r G e g a l l i V n e v a H r e v i R L F , r e v i R l a t s y r C N I , n e h s o G V R n o y n a C r e h s u r C k c o R k r a P k r a P y r u b x o R X T , n i t s u A X T , n i t s u A L F , n i k s u R ) 3 ( h c n a R r e v i R b u l C e d i s r e v i R e g d i R r e v i R t a d e i r r a C t n u o m A s s o r G 7 1 0 2 , 1 3 r e b m e c e D d e z i l a t i p a C s t s o C n o i t i s i u q c A o t t n e u q e s b u S ) s t n e m e v o r p m I ( y n a p m o C o t t s o C l a i t i n I 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e c n a r b m u c n E n o i t a c o L e m a N y t r e p o r P r o ) A ( d e r i u q c A ) C ( d e t c u r t s n o C ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C ( ) A ( ) A ( ) A ( ) C & A ( ) C & A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( e t a D 4 9 9 1 5 1 0 2 6 1 0 2 2 1 0 2 2 1 0 2 2 4 3 7 1 , 4 4 5 2 , 4 7 1 1 , 7 9 3 6 , 9 0 5 8 , 4 1 0 2 2 4 1 1 , 5 9 9 1 2 0 0 2 5 2 8 5 , 5 2 6 0 1 , 0 6 4 5 2 , 3 7 3 1 3 , 3 7 5 2 2 , 9 2 9 1 3 , 1 8 1 2 4 , 0 0 5 9 , 0 0 9 8 , 4 3 1 5 3 , 0 7 1 3 2 , 3 4 6 9 2 , 3 7 5 2 2 , 9 3 8 0 3 , 1 4 7 0 4 , 0 1 7 8 , 0 7 1 , 8 1 3 4 , 3 3 0 9 2 , 2 0 3 7 , 1 — 0 9 0 , 1 0 4 4 , 1 0 9 7 0 3 7 3 0 7 , 1 2 1 4 , 2 7 9 1 , 2 3 1 9 5 7 1 , 7 1 3 6 , 9 4 3 1 , 5 7 2 4 , 1 8 8 5 , 1 2 6 1 0 2 — 0 5 1 3 , 0 4 0 1 1 , 3 ) 6 7 3 , 2 ( 6 1 0 2 6 1 0 2 5 1 0 2 5 9 9 1 7 9 9 1 6 1 0 2 3 1 0 2 7 6 9 8 3 6 5 9 8 6 , 0 7 9 3 2 , 5 6 2 6 , — 8 6 8 4 1 0 2 8 5 4 3 , 5 1 0 2 6 1 0 2 6 1 0 2 6 1 0 2 6 1 0 2 2 5 4 5 2 2 0 3 2 1 6 1 1 3 3 2 , 6 0 0 2 9 2 8 3 , 6 1 0 2 8 3 5 4 9 6 9 1 , 8 4 6 8 1 , 2 9 8 2 9 , 1 0 7 9 3 , 7 5 7 3 1 , 8 6 5 7 , 9 7 7 2 , 8 2 9 6 2 , 0 2 0 7 2 , 5 2 4 0 1 , 7 3 2 9 , 1 2 6 5 , 2 7 8 3 , 3 0 2 0 1 , 6 4 7 2 1 , 4 6 9 8 1 , 8 0 1 2 1 , 2 8 0 0 8 , 3 1 4 7 3 , 0 5 5 2 1 , 8 7 1 9 5 6 2 , 8 9 8 5 2 , 0 6 8 5 2 , 5 6 6 8 , 7 1 7 4 , 1 6 5 4 , 2 2 4 3 , 5 2 4 9 , 0 3 7 0 4 5 , 6 0 1 8 , 2 1 8 8 2 , 2 7 0 2 , 1 0 9 3 , 7 0 2 1 0 3 0 , 1 0 6 1 , 1 0 6 7 , 1 0 2 5 , 4 0 5 4 8 7 7 0 6 0 , 1 5 0 7 5 9 1 7 2 1 , 1 4 5 7 , 4 1 1 7 3 , 2 ) 8 3 4 , 4 ( 9 6 3 , 2 0 7 6 , 2 8 3 3 , 2 0 8 9 9 1 8 3 9 7 3 0 6 0 6 2 , 2 6 4 5 0 1 , 0 0 2 , 2 4 8 8 6 1 0 2 6 9 9 1 5 4 4 5 , 8 4 7 4 1 , 9 0 9 3 2 1 , 9 3 3 5 2 , 6 7 8 , 0 0 1 4 8 2 3 2 , 3 3 0 , 3 2 5 5 0 , 2 2 1 7 , 3 5 3 7 , 4 6 1 0 2 3 9 6 8 7 2 , 5 9 8 1 , 1 9 8 5 5 3 — — — — — — — — — — — — ) 2 1 ( — — — — — — — — — — — 4 3 8 2 1 1 2 5 - F 8 5 7 , 0 2 6 4 4 , 7 2 0 6 6 , 1 2 4 6 6 , 3 2 0 1 1 , 1 3 6 7 5 , 3 3 4 7 , 6 3 4 8 , 1 1 6 1 4 , 2 7 3 8 , 7 1 3 0 4 , 1 1 7 8 8 , 9 7 9 5 6 , 2 2 9 7 1 , 0 1 0 9 2 6 1 6 , 4 8 2 2 , 3 2 2 2 5 , 3 2 5 8 6 , 7 8 9 8 , 3 8 6 7 , 3 9 1 8 , 2 5 6 1 , 7 0 9 2 , 2 0 3 7 , 1 — 0 9 0 , 1 0 4 4 , 1 0 9 7 0 3 7 3 0 7 , 1 0 1 1 , 3 0 3 7 0 4 5 , 6 0 1 8 , 2 1 0 0 3 , 2 7 0 2 , 1 0 9 3 , 7 0 2 1 0 3 0 , 1 0 6 1 , 1 0 6 7 , 1 0 2 5 , 4 0 5 4 8 7 7 0 6 0 , 1 2 6 6 , 9 0 0 2 , 2 4 6 1 , 7 9 9 4 5 , 8 1 0 5 7 , 2 2 1 5 0 , 2 0 4 5 , 1 0 8 8 E E — A A C B C — — — D B — — C D B — — — — C E — A — I M , p i h s n w o T n o t n i l C A C , y t i C l a r d e h t a C I M , s t h g i e H g n i l r e t S V R & H M s m l a P l a y o R ) 2 ( t r o s e R h c a e B d r a h c r O d l O / o c a S n o t n i l C e t a g d u R r o n a M e t a g d u R L F , y t i C s e n i a H e g a l l i V m l a P l a y o R L F , i m a i M y r t n u o C l a y o R E M , o c a S L F , a l a c O X T , s o c r a M n a S L F , a d a r o m a l s I & t r o s e R V R o r d e P n a S ) 6 ( a n i r a M b u l C k a O e l d d a S k o o r b e l d d a S A O K L F , e i c u L . t S t r o P X T , n o t l o r r a C L F , a t o s a r a S V R & H M e k a L y d n a S t r o s e R s e t a t s E e k a l a r a S b u l C a n n a v a S E D , h c a e B h t o b o h e R L F , a d a r o m a l s I ) 6 ( t r o s e R e z e e r B a e S e g a l l i V r i A a e S T C , c i t s y M d l O t r o s e R V R t r o p a e S I M , r o b r A n n A ) 3 ( s e t a t s E s m r a F o i c S J N , y a M e p a C V R s e t i s p m a C e r o h s a e S d n u o r g p m a C d n a k r a P L F , s r e y M t r o F h t r o N y t i p i d n e r e S , p i h s n w o T y a w o l l a G V R & H M s e n i P y d a h S J N t r o s e R L F , s l l i h r y h p e Z t r o s e R V R t s e R s ' r e l t t e S L F , n o s d u H e g a l l i V d o o W w o d a h S I M , s l l i H n r u b u A s e t a t s E d l e i f f e h S L F , a d r o G a t n u P & t r o s e R V R k e e r C l l e h S a n i r a M L F , a l a c O s a l l i V d a o R y d a h S ) 1 ( N O , n o t s k r e h S h c a e B s e r o h S n o t s k r e h S d n u o r g p m a C & t r o s e R L F , s r e y M . t F k r a P V R y a B a t s e i S ) 1 ( N O , s e r o h S n o t b m a L t r o s e R V R s e h c r i B r e v l i S d n u o r g p m a C & d e t a l u m u c c A n o i t a i c e r p e D l a t o T e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e c n a r b m u c n E n o i t a c o L e m a N y t r e p o r P t a d e i r r a C t n u o m A s s o r G 7 1 0 2 , 1 3 r e b m e c e D d e z i l a t i p a C s t s o C n o i t i s i u q c A o t t n e u q e s b u S ) s t n e m e v o r p m I ( y n a p m o C o t t s o C l a i t i n I 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S r o ) A ( d e r i u q c A ) C ( d e t c u r t s n o C ) A ( ) A ( ) A ( ) A ( ) C & A ( ) A ( ) A ( ) C & A ( ) A ( ) A ( ) A ( ) C ( ) C & A ( ) A ( ) C & A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C ( ) C & A ( ) A ( ) A ( ) A ( ) A ( e t a D 2 1 0 2 4 1 0 2 4 1 0 2 9 0 5 4 , 8 3 2 3 , 6 6 5 1 , 6 1 0 2 9 9 9 4 1 0 2 6 1 0 2 7 9 9 1 5 1 0 2 1 1 0 2 7 0 2 9 3 4 2 , 5 1 6 8 , 2 5 6 1 , 0 5 1 3 , 6 1 0 2 8 7 4 8 9 9 1 8 9 9 1 0 0 0 2 5 1 0 2 0 0 0 2 6 1 0 2 4 1 0 2 8 9 9 1 6 1 0 2 5 1 0 2 5 1 0 2 6 1 0 2 7 2 1 2 , — 1 6 7 4 , 8 3 2 1 , 2 6 9 7 , 7 6 9 6 , 8 1 3 2 , 8 7 0 8 , 9 3 2 7 3 2 2 , 2 6 1 2 , 5 7 2 1 , 6 1 0 2 7 1 0 2 6 9 3 9 1 1 8 9 9 1 6 7 1 8 , 0 0 0 2 4 1 0 2 6 1 0 2 0 3 7 4 , 9 3 3 2 , 8 3 5 1 1 0 2 0 2 3 4 , 6 1 0 2 5 7 0 1 , 0 2 4 1 2 , 0 5 7 0 3 , 9 6 0 5 1 , 9 0 6 3 2 , 2 9 7 3 2 , 9 9 8 5 , 4 1 0 8 1 , 8 8 2 4 3 , 5 9 6 3 1 , 5 4 0 2 1 , 1 4 6 4 , 7 2 4 4 , 0 8 8 0 1 , 0 2 2 5 1 , 3 4 8 5 2 , 2 3 4 3 2 , 9 8 1 4 , 4 1 0 7 1 , 8 2 2 9 1 , 5 9 3 3 1 , 5 5 6 , 9 0 4 1 4 , 7 3 1 , 2 0 8 9 8 , 0 7 5 4 1 , 1 1 1 4 2 , 0 6 3 0 1 7 , 1 0 0 0 , 1 0 0 3 0 6 0 , 5 1 0 9 3 , 2 1 0 5 0 9 2 , 2 0 0 9 , 1 0 5 6 2 3 7 , 1 9 5 5 0 2 , 2 3 4 8 2 , 9 0 8 2 1 , 1 6 8 8 1 3 , 2 0 6 2 , 2 d n a L 4 6 9 , 3 9 7 1 , 4 9 8 6 9 6 6 8 1 , 0 4 9 , 4 3 0 3 , 1 8 7 1 1 7 1 , 5 6 3 0 2 1 , 3 1 8 , 0 5 8 6 1 2 2 , 4 3 5 4 1 , 0 1 8 1 , 1 5 1 7 2 , 5 5 5 1 3 , 0 3 8 7 2 , 7 9 5 6 1 , 4 7 3 8 , 7 2 5 1 2 , 0 5 4 1 1 , 2 0 4 1 2 , 1 1 4 1 1 , 2 0 6 7 1 , 7 0 3 5 3 , 8 1 4 9 1 , 2 5 2 3 1 , 6 1 2 1 , 1 6 2 6 2 , 5 6 2 5 2 , 0 3 0 4 2 , 7 2 0 8 , 4 3 5 6 , 2 9 4 9 1 , 0 6 2 9 , 2 6 2 9 1 , 1 7 0 0 1 , 2 1 2 7 1 , 1 1 5 1 2 , 0 5 7 , 2 2 8 2 , 1 4 9 5 0 9 8 0 9 2 , 6 0 0 8 , 3 0 7 5 , 8 0 4 8 , 1 5 3 0 , 2 0 9 1 , 2 0 4 1 , 2 0 4 3 , 1 0 9 3 6 9 7 , 3 1 9 0 7 , 0 1 2 5 8 3 0 0 , 8 9 9 9 , 1 8 7 8 , 1 6 9 4 , 1 1 1 1 , 2 7 3 1 , 2 4 8 8 , 6 7 0 5 9 1 0 , 2 2 8 0 9 , 2 0 1 0 , 1 9 7 4 , 1 6 1 9 5 5 9 — 1 8 1 , 1 1 9 3 9 3 5 2 9 4 , 9 1 5 8 4 , 6 ) 2 7 4 ( 8 5 9 4 1 7 1 7 8 , 3 — — — — — — — — — — — 6 4 2 ) 5 1 6 ( — ) 3 8 8 ( ) 9 3 1 ( — ) 3 0 1 , 1 ( — — — — — — ) 9 ( — — — — — 3 5 - F 5 9 5 , 6 1 3 5 2 , 4 2 0 2 1 , 2 1 1 6 8 8 1 3 , 2 0 6 2 , 2 6 6 3 , 7 1 0 4 9 , 4 3 2 7 , 2 1 7 3 3 , 3 1 1 0 , 9 9 2 2 , 7 1 7 1 5 , 1 1 — 9 5 1 , 8 9 2 0 , 2 6 9 0 , 2 3 6 0 , 4 1 2 9 0 , 2 0 6 3 0 1 7 , 1 0 0 0 , 1 0 0 3 0 6 0 , 5 1 1 0 5 0 9 3 , 2 4 4 0 , 2 5 1 5 , 2 0 5 6 5 1 6 , 2 7 5 4 , 7 1 1 2 5 9 , 0 5 0 0 3 8 0 4 , 8 1 3 7 7 , 1 1 6 0 3 , 5 2 4 8 0 , 4 2 0 3 0 , 4 2 — 6 3 6 , 7 5 9 9 , 5 5 7 7 , 2 4 3 7 , 9 1 3 1 1 , 9 1 4 3 , 3 1 7 9 7 , 0 2 0 5 7 , 2 5 8 3 , 2 4 9 5 0 9 8 0 9 2 , 6 0 0 8 , 3 0 7 5 , 8 0 4 8 , 1 4 4 0 , 2 0 9 1 , 2 0 4 1 , 2 0 4 3 , 1 0 9 3 6 9 7 , 3 1 B A E E E — A B — — A — C B C D D B — B D — — — C C E E — — I M , p i h s n w o T n o t n i l C Y N , a g a w o t k e e h C O C , s n i l l o C t r o F s g n i r p S r e v l i S r o b r a H y k S e n i l y k S L F , s l l i h r y h p e Z N M , e l l i v t r a w e t S L F , n o t n e d a r B L F , s l l i h r y h p e Z O M , n o t l e B e g d i r h t r o N / s l l i H n r e h t u o S V R m r a h C n r e h t u o S t r o s e R s e n i P n r e h t u o S k r o f h t u o S e c a l P s g n i r p S t r o p h t u o S I M , s d i p a R d n a r G e g a l l i V d o o w h t u o S V R & H M n i a M h s i n a p S L F , a s s a s a t o n o h T I M , r i a l C . t S I M , . p w T d l e i f h c i R X T , o i n o t n A n a S L F , a s s a s o m o H X T , e s r e v n o C e c a l P r i a l C . t S ) 5 ( ) 3 ( e g d i r b e n o t S e g d i r b e n o t S k o o r b e n o t S t r o s e R ) 3 ( e g d i R t i m m u S Z A , n o i t c n u J e h c a p A L F , y e h c i R t r o P L F , s l l i h r y h p e Z V N , o n e R ) 3 ( s e t a t s E a l l i V n u S y a w e t a G t s a o c n u S y e l l a V n u S e c n a d n u S L F , a t o s a r a S ) 3 ( t r o s e R V R n u F - N - n u S L F , d n a l s I d n a r G s e t a t s E e k a l n u S A V , s e l r a h C e p a C t r o s e R V R h c a e B t e s n u S L F , t s e W y e K w o C t a r o b r a H t e s n u S a n i r a M y e K L I , e l a d s l l i H ) 4 ( t r o s e R V R s e k a L t e s n u S L F , s l l i h r y h p e Z t r o s e R V R r e t a w t e e w S I M , n o s a M e g a l l i V e r o m a c y S O C , n o l l i D ) 3 ( e g a l l i V w o d a e M n a w S I M , d n a l t r o P X T , e l y K ) 3 ( e g d i R t e s n u S e g d i R t e s n u S L F , k e e r C t u n o c o C e l s I d o o w w o l l a T d e t a l u m u c c A n o i t a i c e r p e D l a t o T e l b a i c e r p e D s t e s s A e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e c n a r b m u c n E n o i t a c o L e m a N y t r e p o r P t a d e i r r a C t n u o m A s s o r G 7 1 0 2 , 1 3 r e b m e c e D d e z i l a t i p a C s t s o C n o i t i s i u q c A o t t n e u q e s b u S ) s t n e m e v o r p m I ( y n a p m o C o t t s o C l a i t i n I 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S r o ) A ( d e r i u q c A ) C ( d e t c u r t s n o C ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) A ( ) C & A ( e t a D 1 1 0 2 5 0 0 2 2 1 0 2 4 1 0 2 6 9 9 1 4 9 9 1 2 4 3 3 , 1 4 4 4 , 2 3 4 1 , 8 0 3 1 , 2 5 6 7 , 5 9 0 6 , 6 9 9 1 4 1 0 2 2 6 8 8 3 4 3 , 6 1 0 2 2 2 2 6 1 0 2 6 1 0 2 6 1 0 2 6 1 0 2 6 1 0 2 6 1 0 2 4 1 5 3 8 5 7 1 5 0 2 3 2 0 4 9 0 1 1 , 4 1 0 2 2 3 3 1 , 3 1 0 2 3 1 4 1 , 6 1 0 2 1 0 4 6 1 0 2 5 1 0 2 3 1 0 2 5 1 0 2 1 1 0 2 0 2 3 1 7 3 7 5 2 2 , 0 2 3 2 , 3 6 4 1 , ) C & A ( 3 9 9 1 3 9 4 0 2 , ) A ( ) C & A ( ) A ( ) A ( ) A ( 6 1 0 2 1 1 0 2 0 5 3 4 8 6 1 , 2 1 0 2 0 3 9 4 , 1 0 0 2 9 9 9 1 3 8 9 1 , 6 1 4 8 , 4 7 8 5 1 , 4 1 7 1 1 , 2 1 8 0 1 , 4 7 9 0 1 , 6 3 1 3 1 , 6 4 7 0 1 , 8 6 8 5 , 1 8 7 6 , 2 3 9 7 , 1 4 1 0 1 , 8 6 6 1 1 , 2 5 3 6 3 , 9 1 2 9 , 4 5 3 9 , 0 8 2 4 2 , 1 4 5 1 1 , 2 6 6 9 , 7 3 0 8 2 , 3 5 7 9 , 1 0 4 5 , 6 3 3 1 1 , 2 4 9 8 2 , 3 2 6 1 1 , 3 1 1 5 4 , 8 1 9 7 , 9 6 2 1 1 , 3 5 2 5 2 , 9 0 3 4 , 5 7 6 6 1 , 9 8 4 5 1 , 0 8 9 0 1 , 2 6 7 5 , 4 3 3 0 1 , 6 4 1 2 1 , 1 1 2 0 1 , 2 6 4 , 5 1 5 5 6 , 6 9 1 4 , 1 5 3 9 , 8 3 9 0 1 , 6 8 5 0 1 , 9 8 6 6 , 4 4 6 8 , 0 7 7 1 2 , 1 6 1 1 1 , 2 7 7 8 , 7 0 2 0 1 , 3 2 1 6 , 1 3 7 4 , 6 4 7 0 1 , 2 9 3 7 2 , 3 1 3 1 1 , 8 7 1 2 4 , 8 3 7 6 , 9 7 4 0 1 , 9 6 3 4 2 , 4 5 9 3 , 5 6 5 5 1 , 5 8 3 4 3 7 0 5 0 , 5 d n a L 0 4 6 0 9 9 5 3 5 6 0 4 0 3 2 1 6 4 , 3 0 7 6 , 4 1 0 4 , 2 6 2 3 , 1 5 1 9 , 2 4 4 3 , 5 6 2 7 , 1 2 1 0 , 2 6 3 7 , 3 6 4 5 0 9 7 0 3 7 6 6 7 , 5 2 0 3 5 , 2 0 1 7 0 1 5 , 2 0 8 3 0 9 8 0 3 8 , 7 1 0 7 6 0 3 6 , 3 0 9 5 0 5 5 , 1 0 1 3 5 3 9 , 2 0 8 1 , 1 0 9 7 4 8 8 5 5 3 0 1 1 , 1 9 9 3 , 1 7 0 1 , 1 2 7 7 9 2 0 , 1 5 7 5 , 1 2 6 3 , 1 7 4 1 2 6 6 , 1 1 5 7 4 9 7 0 1 5 3 4 0 , 3 7 1 0 , 1 3 6 9 , 7 2 7 4 , 5 2 8 8 2 , 1 2 1 2 , 3 4 0 6 , 4 9 5 6 3 0 1 , 5 d e t a l u m u c c A n o i t a i c e r p e D l a t o T e l b a i c e r p e D s t e s s A t a d e i r r a C t n u o m A s s o r G 7 1 0 2 , 1 3 r e b m e c e D e l b a i c e r p e D s t e s s A d n a L d e z i l a t i p a C s t s o C n o i t i s i u q c A o t t n e u q e s b u S ) s t n e m e v o r p m I ( 5 8 — — — — — — — 6 4 — — — — — — — — — — — — — — 1 0 1 — 0 5 4 — — — 4 5 - F I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S y n a p m o C o t t s o C l a i t i n I 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( 0 1 3 , 6 1 6 3 , 3 8 0 0 , 9 1 3 2 , 9 7 6 8 , 4 6 3 7 , 3 9 3 5 , 4 0 5 6 , 3 2 5 9 , 7 1 3 8 , 9 4 1 8 , 9 0 6 6 , 5 9 6 0 , 7 8 0 4 , 0 2 4 1 0 , 1 1 0 1 1 , 7 6 5 4 , 9 9 2 3 , 5 1 2 2 , 4 3 0 7 , 7 5 7 3 , 6 2 0 5 3 , 3 6 0 7 , 6 1 0 5 4 , 5 7 6 2 , 7 5 6 7 , 9 1 5 9 2 , 3 2 6 4 , 0 1 8 2 0 , 2 1 e l b a i c e r p e D s t e s s A d n a L e c n a r b m u c n E n o i t a c o L e m a N y t r e p o r P 0 0 3 4 3 7 0 5 0 , 5 0 4 6 0 9 9 5 3 5 6 0 4 0 3 2 0 9 6 , 3 0 9 7 0 3 7 6 6 7 , 5 2 0 3 5 , 2 0 1 7 0 1 5 , 2 0 8 3 0 9 8 0 3 8 , 7 1 0 7 6 0 3 6 , 3 0 9 5 0 5 5 , 1 0 1 3 4 3 8 , 2 0 8 1 , 1 0 4 3 4 8 8 5 5 3 0 1 1 , 1 — A C E B B A E — — — D — — D A C D E C C B / D C D E B B B B I M , n o t g n i d u L e g a l l i V c a r a m a T L F , n o s d u H L F , r e v o D t s a E a p m a T s e k a L e e r h T I W , y a B n o e g r u t S s e t a t s E l l i h r e d n u h T I M , e l l i v s r e p o o C s e t a t s E e n i l r e b m T i I M , y t i C e s r e v a r T e l i b o M y r t n u o C & n w o T e g a l l i V E M , n o b s i L e g a l l i V y r t n u o C & n w o T O C , s n i l l o C . t F e g d i R r e b m T i X T , o i n o t n A n a S ) 1 ( N O , n i u g e S & t r o s e R V R e d i s l i a r T d n u o r g p m a C V R d l r o W s r e l e v a r T t r o s e R X T , n o t g n i l r A t r o s e R V R s p o t e e r T A C , k r a P y r u b w e N A C , e l l i v r o t c i V L F , a k p o p A Z A , n o s c u T y e l l a V e h T a z a l P e d r e V a l l i V r o t c i V o t i c e l l a V Y N , a g a w o t k e e h C e t n i o P a l l a C t a s a l l i V e h T A C , s e l b o R o s a P A C , y e l l a V s t t o c S t r o s e R V R s e n i V o g a L l e d a t s i V L F , n o t n e d a r B V R & H M o g a L l e d a t s i V t r o s e R , h c a e B d r a h c r O d l O t r o s e R V R l e e h W n o g a W L F , e t t o l r a h C t r o P s e k a L a y a c z i V L F , a s s a s o m o H I M , n a m g d i r B E M L F , e k a L y d a L L F , s l l i h r y h p e Z e g a l l i V s e n u D n e r r a W d n u o r g p m a C & s d o o W n e d l a W b u l C y r t n u o C k a O r e t a W s e t a t s E t r o s e R V R e g d E s r e t a W I M , d n a l l o H e g a l l i V s e r o h S y l r e v a W I M , s u l u m o R s e t a t s E e g a l l i V t s e W H O , o d e l o T e g a l l i V r o i n e S k o o r b t s e W H O , o d e l o T e g a l l i V k o o r b t s e W ) C & A ( 7 9 9 1 4 4 2 9 , ) A ( ) A ( ) A ( ) A ( ) A ( ) C & A ( ) A ( ) A ( ) C & A ( ) A ( ) C & A ( ) A ( ) A ( ) A ( ) A ( 3 1 0 2 4 1 0 2 6 1 0 2 7 9 9 1 6 1 0 2 8 9 9 1 5 1 0 2 1 1 0 2 4 1 0 2 8 9 9 1 0 0 0 2 6 1 0 2 8 9 9 1 5 1 0 2 7 9 9 1 8 5 5 6 , 1 4 6 4 , 5 2 1 0 5 3 6 , 4 9 5 0 4 0 1 , 4 1 2 3 , 4 0 7 2 , 7 8 9 1 , 7 7 7 4 , 7 5 2 4 , 0 4 1 9 3 6 9 , 4 7 8 2 0 6 9 , 5 2 5 7 3 2 , , 1 7 6 1 9 , 3 2 3 7 1 , 6 7 6 2 3 , 0 1 5 0 4 , 7 9 8 3 , 4 5 5 2 1 , 9 5 9 2 , 9 2 8 4 2 , 5 2 2 5 4 , 8 2 7 9 , 5 7 7 6 1 , 3 5 4 0 1 , 6 1 8 4 1 , 2 1 3 4 , 3 9 8 6 1 , 2 1 7 2 1 , 2 6 3 9 1 , , 9 7 8 2 8 8 6 , 6 3 0 1 3 , 0 2 6 8 3 , 1 2 6 2 , 3 7 7 1 1 , 5 8 7 1 , 6 5 1 2 2 , 5 6 6 7 3 , 8 5 4 , 9 5 3 0 5 1 , 2 5 9 9 , 6 8 6 3 1 , 1 4 6 2 , 1 0 3 5 1 , 2 3 2 0 1 , 9 9 2 8 1 , 0 4 6 , 1 0 9 8 , 1 1 8 7 6 7 2 , 1 4 7 1 , 1 3 7 6 , 2 0 6 5 , 7 0 7 2 1 0 5 0 4 7 , 1 0 3 1 , 1 1 7 6 , 1 2 9 5 , 1 0 8 4 , 2 3 6 0 , 1 r o ) A ( d e r i u q c A ) C ( d e t c u r t s n o C ) A ( ) A ( 3 1 0 2 5 6 5 1 , e t a D 5 1 0 2 4 8 9 d e t a l u m u c c A n o i t a i c e r p e D 6 7 1 2 1 , l a t o T 6 1 4 1 1 , 0 6 7 2 0 7 7 1 1 8 , 0 5 0 , 1 5 7 4 , 2 1 5 6 6 1 , 2 7 6 2 7 4 , 0 1 8 8 8 0 5 2 , 4 6 4 3 9 1 7 , 4 5 9 2 2 9 7 , 9 1 1 7 3 , 1 3 2 6 , 3 5 2 5 , 3 1 1 4 , 5 9 9 3 , 3 1 ) 6 5 ( 6 7 4 3 0 9 0 6 1 , 1 4 7 6 , 8 1 2 — — — — — — — — 6 1 — 4 1 — — — — — 4 1 7 , 0 1 0 6 7 2 4 6 , 5 0 5 0 , 1 9 7 1 , 6 2 7 6 6 8 7 , 6 2 2 3 7 , 7 3 5 7 2 , 2 4 5 0 , 7 0 9 4 , 1 4 6 3 , 2 4 9 2 , 6 3 5 3 8 , 5 0 1 5 , 1 1 7 8 2 1 4 5 , 4 5 6 1 , 2 8 9 3 , 4 1 2 7 0 , 9 5 2 6 , 9 0 4 6 , 1 0 9 8 , 1 1 8 7 0 6 2 , 1 0 6 1 , 1 3 7 6 , 2 0 6 5 , 7 0 7 2 1 0 5 0 4 7 , 1 6 8 1 , 1 0 5 6 , 1 2 9 5 , 1 0 8 4 , 2 3 6 0 , 1 D C B C D — B — — B C C B C — — B B , h c a e B d r a h c r O d l O I M , e k a L e t i h W E M e m o H e l i b o M e k a L e t i h W e g a l l i V & t r o s e R V R s e r c A d l i W d n u o r g p m a C ) 1 ( N O , d n a l t o c S & t r o s e R V R e k a L w o l l i W d n u o r g p m a C L I , h c i w d n a S y t i n u m m o C d o o w d l i W H O , o d e l o T e c a l P k o o r b w o l l i W ) 1 ( N O , g r e b t s r e h m A & t r o s e R V R d o o w o l l i W d n u o r g p m a C I M , n o s k c a J s e t a t s E s l l i H m a h d n i W L F , t r o p n e v a D e g a l l i V l l i m d n i W I M , d n a l y a W e g a l l i V s d o o W r o s d n i W A C , s e l b o R o s a P t r o s e R V R y r t n u o C e n i W I M , n e v a h d o o W X T , o i n o t n A n a S ) 1 ( N O , m l o h n r o B d n u o r g p m a C d n a t r o s e R V R e k a L d n a l d o o W e c a l P n e v a h d o o W ) 3 ( s l i a r T e k a l d o o W R O , e n e g u E s e t a t s E k r a P d n a l d o o W L F , d n a l e v o r G H O , d n a l l o H h c r u h C t a s d n a l d o o W e k a L e c a r r e T e d i s d o o W L F , e l a d n r u b u A e g d i R e d i s t s e W I W , h a l u e b n e l G t r o s e R V R o H d r a w t s e W d n u o r g p m a C & 5 5 - F . d e n i m r e t e d e r a s n o i t a u l a v d n a s t s o c l a n i f s a d e t s u j d a e b y a m d n a y r a n i m i l e r p e r a e v o b a e l b a t e h t n i n w o h s s e u l a v d e t a l e r d n a s n o i t a c o l l a e c i r p e s a h c r u p e h T . 7 1 0 2 g n i r u d d e r i u q c a s a w y t r e p o r p s i h T . e l b a c i l p p a s a , s t e s s A e l b a i c e r p e D r o d n a L f o n o i t i s o p s i d l a i t r a p a o t e u d y t r e p o r p s i h t t a d e s a e r c e d s a h 7 1 0 2 , 1 3 r e b m e c e D t a d e i r r a c t n u o m a s s o r G . ) s r e t r a u q d a e H e t a r o p r o C r o ( d e p o l e v e d y l l u f t o n s a w t i s a 7 1 0 2 , 1 3 r e b m e c e D f o s a t n u o c y t i n u m m o c r u o n i d e d u l c n i t o n s a w y t r e p o r p s i h T . 7 1 0 2 r e b m e t p e S n i a m r I e n a c i r r u H f o t l u s e r a s a d e r i a p m i s a w y t r e p o r p s i h T . n o i t a l s n a r t y c n e r r u c n g i e r o f f o t c a p m i e h t s t c e l f e r , s e i t r e p o r p n a i d a n a C r u o t a , 7 1 0 2 , 1 3 r e b m e c e D t a d e i r r a c t n u o m a s s o r G . e s a e l d n u o r g o t t c e j b u s s i y t r e p o r p s i h t f o t r a p r o l l A , 1 4 0 5 7 7 5 , 8 3 8 , 7 0 1 , 1 8 6 3 , 0 8 4 , 1 5 5 2 , 9 3 7 6 , 4 9 2 , 4 3 8 5 , 8 9 0 , 1 . g n i d n a t s t u o n o i l l i m 8 . 1 4 $ d a h h c i h w , t i d e r c f o e n i l d e r u c e s r u o r o f e s a b g n i w o r r o b e h t t r o p p u s s e i t i n u m m o c e s e h T . t b e d d e r u c e s f o n o i l l i m 8 . 8 8 3 $ e z i l a r e t a l l o c s e i t i n u m m o c e s e h T . t b e d d e r u c e s f o n o i l l i b 0 . 1 $ e z i l a r e t a l l o c s e i t i n u m m o c e s e h T . t b e d d e r u c e s f o n o i l l i m 1 . 1 1 4 $ e z i l a r e t a l l o c s e i t i n u m m o c e s e h T . t b e d d e r u c e s f o n o i l l i b 0 . 1 $ e z i l a r e t a l l o c s e i t i n u m m o c e s e h T A B C D E ) 1 ( ) 2 ( ) 3 ( ) 4 ( ) 5 ( ) 6 ( t a d e i r r a C t n u o m A s s o r G 7 1 0 2 , 1 3 r e b m e c e D d e z i l a t i p a C s t s o C n o i t i s i u q c A o t t n e u q e s b u S ) s t n e m e v o r p m I ( y n a p m o C o t t s o C l a i t i n I I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e l b a i c e r p e D s t e s s A d n a L e c n a r b m u c n E n o i t a c o L e m a N y t r e p o r P — 0 6 6 , 8 2 9 3 4 , 5 9 1 — 8 5 9 , 7 4 3 0 8 , 3 1 1 ) 6 7 9 , 8 2 2 ( ) 8 0 5 , 1 6 ( 2 8 4 , 4 1 2 , 1 4 6 5 , 2 2 8 , 1 5 7 3 , 4 0 2 1 3 3 , 8 8 5 1 3 , 8 6 1 ) 1 1 5 , 0 1 ( ) 0 7 9 , 3 6 ( , 1 3 r e b m e c e D d e d n E s r a e Y 5 1 0 2 6 1 0 2 7 1 0 2 7 1 9 , 3 6 3 , 3 $ 2 2 5 , 3 7 5 , 4 $ 9 3 3 , 6 9 4 , 6 $ 2 2 5 , 3 7 5 , 4 $ 9 3 3 , 6 9 4 , 6 $ 9 7 8 , 2 8 8 , 6 $ , 1 3 r e b m e c e D d e d n E s r a e Y 5 1 0 2 6 1 0 2 7 1 0 2 — 3 5 7 , 5 9 7 6 0 7 , 9 5 1 ) 2 5 0 , 3 0 1 ( 7 0 4 , 2 5 8 $ 7 0 4 , 2 5 8 $ 8 5 8 , 6 2 0 , 1 $ — 7 5 1 , 1 0 2 ) 6 0 7 , 6 2 ( ) 5 0 4 ( ) 0 5 3 , 5 2 ( 2 2 4 , 6 3 2 $ 8 5 8 , 6 2 0 , 1 $ 5 2 5 , 7 3 2 , 1 $ : s w o l l o f s a s i 5 1 0 2 d n a , 6 1 0 2 , 7 1 0 2 , 1 3 r e b m e c e D d e d n e s r a e y e h t r o f y t r e p o r p t n e m t s e v n i n i e g n a h c e h T I I I E L U D E H C S , N O I T A I C E R P E D D E T A L U M U C C A D N A E T A T S E L A E R . C N I , S E I T I N U M M O C N U S 7 1 0 2 , 1 3 R E B M E C E D ) s d n a s u o h t n i s t n u o m a ( s t n e m e v o r p m i e t a i d e m m i g n i d u l c n i , s n o i t i s i u q c a d n a l d n a y t i n u m m o C t n e m p o l e v e d d n a n o i s n a p x e y t i n u m m o C e c n a l a b g n i n n i g e B r e h t o , s t n e m e v o r p m I t n e m r i a p m i t e s s A r e h t o d n a s n o i t i s o p s i D e c n a l a b g n i d n E : s w o l l o f s a s i 5 1 0 2 d n a , 6 1 0 2 , 7 1 0 2 , 1 3 r e b m e c e D d e d n e s r a e y e h t r o f n o i t a i c e r p e d d e t a l u m u c c a n i e g n a h c e h T d o i r e p e h t r o f n o i t a i c e r p e D r e h t o d n a s n o i t i s o p s i D t n e m r i a p m i t e s s A e c n a l a b g n i n n i g e B e c n a l a b g n i d n E 6 5 - F [This page intentionally left blank] [This page intentionally left blank] 7.0% 7.0% 2012-2017 2012-2017 AVERAGE AVERAGE 7.7% 7.7% 9.1% 9.1% 7.1% 7.1% 6.9% 6.9% 5.5% 5.5% 5.9% 5.9% YE 2012 YE 2012 YE 2013 YE 2013 YE 2014 YE 2014 YE 2015 YE 2015 YE 2016 YE 2016 YE 2017 YE 2017 900.0% 900.0% 800.0% 800.0% 700.0% 700.0% 600.0% 600.0% 500.0% 500.0% 400.0% 400.0% 300.0% 300.0% 200.0% 200.0% 100.0% 100.0% 0.0% 0.0% (100.0%) (100.0%) 10 - year Total Return 10 - year Total Return 846.3% 846.3% 126.0% 126.0% 105.0% 105.0% Sun Communities, Inc. (SUI) Sun Communities, Inc. (SUI) MSCI US REIT (RMS) MSCI US REIT (RMS) S&P 500 S&P 500 230 MH Communities 230 MH Communities 89 RV Communities 89 RV Communities 31 MH and RV Communities 31 MH and RV Communities 66% 66% 25% 25% 9% 9% 25% 25% 9% 9% Gary A. Shiffman Gary A. Shiffman chairman and chief chairman and chief executive officer executive officer 

Continue reading text version or see original annual report in PDF format above