Sun Communities, Inc. Reports 2017 Third Quarter Results

(MENAFNEditorial) Sun Communities, Inc. Reports 2017 Third Quarter Results Â

NEWS RELEASEOctober 23, 2017

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

financial Results for the Quarter and Nine Months Ended September 30, 2017

For the quarter ended September 30, 2017, total revenues increased $18.5 million, or 7.4 percent, to $268.2 million compared to $249.7 million for the same period in 2016. Net income attributable to common stockholders was $24.1 million, or $0.31 per diluted common share, as compared to net income attributable to common stockholders of $18.9 million, or $0.27 net income per diluted common share, for the same period in 2016.

For the nine months ended September 30, 2017, total revenues increased $125.4 million, or 20.4 percent, to $740.5 million compared to $615.1 million for the same period in 2016. Net income attributable to common stockholders was $57.6 million, or $0.76 per diluted common share, as compared to net income attributable to common stockholders of $19.0 million, or $0.30 per diluted common share, for the same period in 2016.

Non-GAAP Financial Measures and Portfolio Performance

Funds from Operations ("FFO")(1) excluding certain items was $1.13 per diluted share and OP unit ("Share") for both the quarter ended September 30, 2017 and 2016. Same Community Net Operating Income ("NOI")(1) increased by 7.7 percent and 6.8 percent for the quarter and nine months ended September 30, 2017, respectively, as compared to the same periods in 2016. Revenue producing sites increased by 394 sites for the quarter ended September 30, 2017, as compared to an increase of 292 sites in the same period in 2016.   Home sales volumes of 2,432 for the nine months ended September 30, 2017, increased from 2,410 for the same period in 2016. "Our strength in the third quarter was driven by our continued ability to generate internal growth. Our same community NOI increased by 7.7 percent in the quarter boosted by a 160-basis point occupancy gain," said Gary A. Shiffman, Chairman and Chief Executive Officer. "We have laid the foundation for ongoing internal growth through our active expansion site development program, and we are confident in the consistent value-generation embedded in our platform. On the acquisition front we added four high quality, age-restricted MH and RV communities in California, further penetrating an important market for us. We have a high degree of visibility into our pipeline and expect to continue to deploy capital into similar quality communities."

OPERATING HIGHLIGHTS

Community Occupancy

Total portfolio occupancy was 96.2 percent at both September 30, 2017 and September 30, 2016, including the impact of recently completed but vacant expansion sites. During the quarter ended September 30, 2017, revenue producing sites increased by 394 sites, as compared to 292 revenue producing sites gained during the third quarter of 2016.

Revenue producing sites increased by 1,833 for the nine months ended September 30, 2017 as compared to 1,385 revenue producing sites gained during the nine months ended September 30, 2016.

Same Community Results

For the 231 communities owned since January 1, 2016, NOI(1) for the quarter ended September 30, 2017 increased 7.7 percent over the same period in 2016, driven by a 6.2 percent increase in revenues and a 2.9 percent increase in operating expenses. Same Community occupancy increased to 97.2 percent at September 30, 2017 from 95.6 percent(9)(10) at September 30, 2016.

For the nine months ended September 30, 2017, total revenues increased by 5.9 percent while total expenses increased by 3.5 percent, resulting in an increase to NOI(1) of 6.8 percent over the nine months ended September 30, 2016.

Home Sales

Total home sales were 805 for the quarter ended September 30, 2017 as compared to 895 homes sold during the same period in 2016, a 10.1 percent decrease. During the nine months ended September 30, 2017, the Company sold 2,432 homes, compared to 2,410 homes sold for the same period ending 2016.

Rental homes sales, which are included in total home sales, were 286 for both quarters ended September 30, 2017 and 2016. Rental home sales were 828 and 858 for the nine months ended September 30, 2017 and 2016, respectively.

PORTFOLIO ACTIVITY

Acquisitions(2)

During the quarter ended September 30, 2017, the Company acquired a 331 site age-restricted RV resort located in Pismo Beach, California, for total consideration of $21.4 million. Additionally, the Company acquired three age-restricted MH communities during the quarter: Lazy J Ranch, with 220 sites in Arcata, California; Ocean West, with 130 sites in McKinleyville, California; and Caliente Sands, with 118 sites in Cathedral City, California, for total consideration of $32.8 million.Â

Catastrophic Weather

On September 10, 2017, Hurricane Irma hit Florida as a Category 4 hurricane and impacted 121 of the Company's communities in Florida and three in Georgia. The Company recognized charges totaling $23.1 million comprised of $12.7 million for debris and tree removal, common area repairs and minor flooding damage, as well as $10.4 million for impaired assets at three communities containing 190 total sites located in the Florida Keys. These charges, which include management's best estimate of the total repair expense the Company will incur, were partially offset by estimated insurance recoveries of $15.3 million. The net charges of $7.8 million have been classified as "Catastrophic weather related charges" in the Consolidated Statements of Operations. Expected insurance recoveries for loss of income and redevelopment costs greater than the impairment charge related to the three Florida Key communities cannot be estimated at this time and are excluded from the insurance recovery estimate recorded at September 30, 2017. The Company maintains property, casualty, flood and business interruption insurance for its community portfolio, subject to customary deductibles and limits.

BALANCE SHEET AND CAPITAL MARKETS ACTIVITY

Debt Transactions

As previously announced, during the quarter ended September 30, 2017, the Company assumed a $4.6 million collateralized term loan in connection with acquisition activities. The term loan has a remaining term of 9.8 years and bears interest at 4.34 percent.Â

As of September 30, 2017, the Company had approximately $3.0 billion of debt outstanding. The weighted average interest rate was 4.56 percent and the weighted average maturity was 8.4 years. The Company had $137.4 million of unrestricted cash on hand. At period-end the Company's net debt to trailing twelve month Recurring EBITDA(1) ratio was 6.0 times.

Equity Transactions

During the quarter ended September 30, 2017, the Company entered into a new at the market ("ATM") equity sales program that has an aggregate offering price of up to $450.0 million. The new ATM program replaced the Company's prior equity sales agreement that had an aggregate offering price of up to $250.0 million.

After quarter end, the Company announced a notice of redemption to the holders of its 7.125% Series A Cumulative Redeemable Preferred Stock, which it has elected to redeem on November 14, 2017. Holders will receive cash in the amount of $25.00, plus all accrued and unpaid dividends, which is equal to an aggregate payment of $25.14349 per share. In the aggregate, the Company will pay $85.5 million to redeem all of the shares.

GUIDANCE 2017

The Company is updating fourth quarter 2017 guidance of FFO(1) per Share to be in the range of $0.96 to $0.99 and anticipates FFO(1) per Share of $4.15 to $4.18 for the full year 2017.

The Company also affirms 2017 full year guidance of Same Community NOI(1) growth of 6.4 percent to 6.8 percent. Guidance does not include prospective acquisitions or capital markets activity.

FFO(1) per Share estimates assume certain non-core items are adjusted from FFO(1). The estimates and assumptions presented above represent a range of possible outcomes and may differ materially from actual results. The estimates and assumptions are forward-looking based on the Company's current assessment of economic and market conditions, as well as other risks outlined below under the caption "Forward-Looking Statements."

EARNINGS CONFERENCE CALL

A conference call to discuss third quarter operating results will be held on Tuesday, October 24, 2017 at 11:00 A.M. (ET). To participate, call toll-free 877-407-9039. Callers outside the U.S. or Canada can access the call at 201-689-8470. A replay will be available following the call through November 7, 2017 and can be accessed toll-free by calling 844-512-2921 or by calling 412-317-6671. The Conference ID number for the call and the replay is 13669386. The conference call will be available live on Sun Communities' website www.suncommunities.com. Replay will also be available on the website.

Sun Communities, Inc. is a REIT that, as of September 30, 2017, owned, operated, or had an interest in a portfolio of 348 communities comprising approximately 120,000 developed sites in 29 states and Ontario, Canada.

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

CONTACT

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

Forward-Looking Statements

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

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

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

Investor Information                                                          Â

RESEARCH COVERAGE              Firm  Analyst  Phone  Email Bank of America Merrill Lynch  Joshua Dennerlein  (646) 855-1681  BMO Capital Markets  John Kim  (212) 885-4115  Citi Research  Michael Bilerman  (212) 816-1383    Nicholas Joseph  (212) 816-1909  Evercore ISI  Gwen Clark  (212) 446-5611  Green Street Advisors  Ryan Burke  (949) 640-8780  RBC Capital Markets  Neil Malkin  (440) 715-2651  Robert W. Baird & Co.  Drew Babin  (610) 238-6634  Wells Fargo  Todd Stender  (562) 637-1371                INQUIRIES              Sun Communities welcomes questions or comments from stockholders, analysts, investment managers, media, or any prospective investor. Please address all inquiries to our Investor Relations department.        At Our Website  www.suncommunities.com            By Email           By Phone  (248) 208-2500                                                             Portfolio Overview                                                                           (As of September 30, 2017)

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Balance Sheets                                                                                                                                              (amounts in thousands)

  9/30/2017  12/31/2016 ASSETS:     Land  $ 1,079,708   $ 1,051,536  Land improvements and buildings  5,024,937   4,825,043  Rental homes and improvements  516,618   489,633  Furniture, fixtures and equipment  140,894   130,127  Investment property  6,762,157   6,496,339  Accumulated depreciation  (1,188,332 )  (1,026,858 ) Investment property, net  5,573,825   5,469,481  Cash and cash equivalents  137,448   8,164  Inventory of manufactured homes  25,741   21,632  Notes and other receivables, net  145,760   81,179  Collateralized receivables, net (3)  134,015   143,870  Other assets, net  141,047   146,450  Total assets  $ 6,157,836   $ 5,870,776  LIABILITIES:     Mortgage loans payable  $ 2,822,640   $ 2,819,567  Secured borrowings (3)  134,884   144,477  Preferred OP units - mandatorily redeemable  45,903   45,903  Lines of credit  -   100,095  Distributions payable  56,520   51,896  Other liabilities  291,074   279,667  Total liabilities  3,351,021   3,441,605  Series A-4 preferred stock  32,414   50,227  Series A-4 preferred OP units  10,832   16,717  STOCKHOLDERS' EQUITY:     Series A preferred stock  34   34  Common stock  793   732  Additional paid-in capital  3,810,930   3,321,441  Accumulated other comprehensive income (loss)  1,531   (3,181 ) Distributions in excess of accumulated earnings  (1,117,228 )  (1,023,415 )  Total SUI stockholders' equity  2,696,060   2,295,611  Noncontrolling interests:     Common and preferred OP units  63,668   69,598  Consolidated variable interest entities  3,841   (2,982 ) Total noncontrolling interest  67,509   66,616  Total stockholders' equity  2,763,569   2,362,227  Total liabilities & stockholders' equity  $ 6,157,836   $ 5,870,776  Statements of Operations - Quarter to Date Comparison                                                            (amounts in thousands, except per share amounts)

 Three Months Ended September 30,  2017  2016  Change  % Change REVENUES        Income from real property (excluding transient revenue) $ 169,533   $ 158,020   $ 11,513   7.3 % Transient revenue 28,730   26,304   2,426   9.2 % Revenue from home sales 33,197   31,211   1,986   6.4 % Rental home revenue 12,757   12,031   726   6.0 % Ancillary revenues 17,017   16,446   571   3.5 % Interest 5,920   4,705   1,215   25.8 % Brokerage commissions and other revenues, net 1,091   984   107   10.9 % Total revenues 268,245   249,701   18,544   7.4 %         EXPENSES        Property operating and maintenance 59,249   57,089   2,160   3.8 % Real estate taxes 13,053   12,384   669   5.4 % Cost of home sales 25,094   21,935   3,159   14.4 % Rental home operating and maintenance 6,775   6,350   425   6.7 % Ancillary expenses 9,993   9,449   544   5.8 % Home selling expenses 3,290   2,643   647   24.5 % General and administrative 18,267   16,575   1,692   10.2 % Transaction costs 2,167   4,191   (2,024 )  (48.3 )% Depreciation and amortization 64,232   61,483   2,749   4.5 % Interest 32,085   33,800   (1,715 )  (5.1 )% Interest on mandatorily redeemable preferred OP units 790   789   1   0.1 % Total expenses 234,995   226,688   8,307   3.7 % Income before other items 33,250   23,013   10,237   44.5 % Catastrophic weather related charges (7,756 )  -   (7,756 )  N/A Other income, net (4) 3,345   -   3,345   N/A Current tax benefit / (expense) 38   (283 )  321   113.4 % Deferred tax benefit 81   -   81   N/A Income from affiliate transactions -   500   (500 )  100.0 % Net income 28,958   23,230   5,728   24.7 % Less: Preferred return to preferred OP units (1,112 )  (1,257 )  145   (11.5 )% Less: Amounts attributable to noncontrolling interests (1,776 )  (879 )  (897 )  102.1 % Less: Preferred stock distribution (1,955 )  (2,197 )  242   (11.0 )% NET INCOME ATTRIBUTABLE TO SUI $ 24,115   $ 18,897   $ 5,218   27.6 %         Weighted average common shares outstanding:        Basic 78,369   68,655   9,714   14.2 % Diluted 78,808   69,069   9,739   14.1 % Earnings per share:        Basic $ 0.31   $ 0.27   $ 0.04   14.8 % Diluted $ 0.31   $ 0.27   $ 0.04   14.8 % Statements of Operations - Year to Date Comparison                                                                              (amounts in thousands, except per share amounts)

 Nine Months Ended September 30,  2017  2016  Change  % Change REVENUES:        Income from real property (excluding transient revenue) $ 495,179   $ 406,221   $ 88,958   21.9 % Transient revenue 65,599   47,339   18,260   38.6 % Revenue from home sales 91,319   81,987   9,332   11.4 % Rental home revenue 37,774   35,696   2,078   5.8 % Ancillary revenues 32,086   28,442   3,644   12.8 % Interest 15,609   13,322   2,287   17.2 % Brokerage commissions and other revenues, net 2,978   2,137   841   39.4 % Total revenues 740,544   615,144   125,400   20.4 %         EXPENSES:        Property operating and maintenance 159,861   125,357   34,504   27.5 % Real estate taxes 39,322   32,122   7,200   22.4 % Cost of home sales 67,999   58,803   9,196   15.6 % Rental home operating and maintenance 16,821   17,637   (816 )  (4.6 )% Ancillary expenses 21,719   18,697   3,022   16.2 % Home selling expenses 9,391   7,240   2,151   29.7 % General and administrative 56,188   46,910   9,278   19.8 % Transaction costs 6,990   27,891   (20,901 )  (74.9 )% Depreciation and amortization 189,719   159,565   30,154   18.9 % Extinguishment of debt 759   -   759   N/A Interest 95,765   88,522   7,243   8.2 % Interest on mandatorily redeemable preferred OP units 2,361   2,363   (2 )  (0.1 )% Total expenses 666,895   585,107   81,788   14.0 % Income before other items 73,649   30,037   43,612   145.2 % Catastrophic weather related charges (8,124 )  -   (8,124 )  N/A Other income, net (4) 5,340   -   5,340   N/A Current tax expense (133 )  (567 )  434   76.5 % Deferred tax benefit 745   -   745   N/A Income from affiliate transactions -   500   (500 )  100.0 % Net income 71,477   29,970   41,507   138.5 % Less: Preferred return to preferred OP units (3,482 )  (3,793 )  311   (8.2 )% Less: Amounts attributable to noncontrolling interests (4,179 )  (460 )  (3,719 )  808.5 % Less: Preferred stock distribution (6,233 )  (6,748 )  515   (7.6 )% NET INCOME ATTRIBUTABLE TO SUI $ 57,583   $ 18,969   38,614   203.6 %         Weighted average common shares outstanding:        Basic 75,234   63,716   11,518   18.1 % Diluted 75,846   64,146   11,700   18.2 % Earnings per share:        Basic $ 0.76   $ 0.30   $ 0.46   153.3 % Diluted $ 0.76   $ 0.30   $ 0.46   153.3 % Outstanding Securities and Capitalization             (in thousands except for *)

Outstanding Securities - As of September 30, 2017            Number of Units/Shares Outstanding  Conversion Rate*  If Converted  Issuance Price per unit*  Annual Distribution Rate* Convertible Securities          Series A-1 preferred OP units 349  2.4390  851  $100  6.0% Series A-3 preferred OP units 40  1.8605  74  $100  4.5% Series A-4 preferred OP units 425  0.4444  189  $25  6.5% Series C preferred OP units 316  1.1100  351  $100  4.5% Common OP units 2,757  1.0000  2,757  N/A  Mirrors common shares distributions Series A-4 cumulative convertible preferred stock 1,085  0.4444  482  $25  6.5%           Non-Convertible Securities          Preferred stock (SUI-PrA) 3,400  N/A  N/A  $25  7.125% Common shares 79,341  N/A  N/A  N/A  $2.68^ ^ Annual distribution is based on the last quarterly distribution annualized. Capitalization - As of September 30, 2017              Equity  Shares  Share Price*  Total Common shares  79,341   $ 85.68   $ 6,797,937  Common OP units  2,757   $ 85.68   236,220  Subtotal  82,098     $ 7,034,157         Series A-1 preferred OP units  851   $ 85.68   72,914  Series A-3 preferred OP units  74   $ 85.68   6,340  Series A-4 preferred OP units  189   $ 85.68   16,194  Series C preferred OP units  351   $ 85.68   30,074  Total diluted shares outstanding  83,563     $ 7,159,679   Debt Mortgage loans payable      $ 2,822,640  Secured borrowings (3)      134,884  Preferred OP units - mandatorily redeemable      45,903  Lines of credit      -  Total Debt      $ 3,003,427   Preferred Perpetual preferred  3,400   $ 25.00   $ 85,000  A-4 preferred stock  1,085   $ 25.00   $ 27,125  Total Capitalization      $ 10,275,231  Reconciliations to Non-GAAP Financial Measures

Reconciliation of Net Income Attributable to Sun Communities, Inc. Common Stockholders to Funds from Operations                                                                               (amounts in thousands except for per share data)

 Three Months Ended September 30,  Nine Months Ended  September 30,  2017  2016  2017  2016 Net income attributable to Sun Communities, Inc. common stockholders $ 24,115   18,897   $ 57,583   $ 18,969  Adjustments:        Depreciation and amortization 64,484   61,809   190,143   159,225  Amounts attributable to noncontrolling interests 1,608   685   3,710   255  Preferred return to preferred OP units 578   616   1,750   1,858  Preferred distribution to Series A-4 preferred stock 441   683   1,666   -  Gain on disposition of assets, net (4,309 )  (4,667 )  (11,342 )  (12,226 ) FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6)  86,917   78,023   243,510   168,081  Adjustments:        Transaction costs 2,167   4,191   6,990   27,891  Other acquisition related costs (5) 343   1,467   2,712   1,467  Income from affiliate transactions -   (500 )  -   (500 ) Extinguishment of debt -   -   759   -  Catastrophic weather related charges 7,756   -   8,124   -  Other income, net (4) (3,345 )  -   (5,340 )  -  Debt premium write-off -   -   (438 )  -  Deferred tax benefit (81 )  -   (745 )  -  FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities excluding certain items (1) (6)  $ 93,757   $ 83,181   $ 255,572   $ 196,939          Weighted average common shares outstanding - basic: 78,369   68,655   75,241   63,716  Add:        Common stock issuable upon conversion of stock options 2   8   2   10  Restricted stock 437   406   610   437  Common OP units 2,761   2,856   2,758   2,861  Common stock issuable upon conversion of Series A-1 preferred OP units 858   920   877   932  Common stock issuable upon conversion of Series A-3 preferred OP units 75   75   75   75  Common stock issuable upon conversion of Series A-4 preferred stock 482   747   620   -  Weighted average common shares outstanding - fully diluted 82,984   73,667   80,183   68,031          FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) per share - fully diluted  $ 1.05   $ 1.06   $ 3.04   $ 2.47  FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) per share excluding certain items - fully diluted  $ 1.13   $ 1.13   $ 3.19   $ 2.89  Reconciliation of Net Income Attributable to Sun Communities, Inc. Common Stockholders to Recurring EBITDA(amounts in thousands)

 Three Months Ended  September 30,  Nine Months Ended  September 30,  2017  2016  2017  2016 Net income attributable to Sun Communities, Inc., common stockholders $ 24,115   $ 18,897   $ 57,583   $ 18,969  Interest 32,085   33,800   95,765   88,522  Interest on mandatorily redeemable preferred OP units 790   789   2,361   2,363  Depreciation and amortization 64,232   61,483   189,719   159,565  Extinguishment of debt -   -   759   -  Transaction costs 2,167   4,191   6,990   27,891  Catastrophic weather related charges 7,756   -   8,124   -  Other income, net (4) (3,345 )  -   (5,340 )  -  Current tax (benefit) / expense (38 )  283   133   567  Deferred tax benefit (81 )  -   (745 )  -  Income from affiliate transactions -   (500 )  -   (500 ) Preferred return to preferred OP units 1,112   1,257   3,482   3,793  Amounts attributable to noncontrolling interests 1,776   879   4,179   460  Preferred stock distribution 1,955   2,197   6,233   6,748  RECURRING EBITDA (1) $ 132,524   $ 123,276   $ 369,243   $ 308,378  Reconciliation of Net Income Attributable to Sun Communities, Inc. Common Stockholders to Net Operating Income(amounts in thousands)

 Three Months Ended  September 30,  Nine Months Ended  September 30,  2017  2016  2017  2016 Net income attributable to Sun Communities, Inc., common stockholders: $ 24,115   $ 18,897   $ 57,583   $ 18,969  Other revenues (7,011 )  (5,689 )  (18,587 )  (15,459 ) Home selling expenses 3,290   2,643   9,391   7,240  General and administrative 18,267   16,575   56,188   46,910  Transaction costs 2,167   4,191   6,990   27,891  Depreciation and amortization 64,232   61,483   189,719   159,565  Extinguishment of debt -   -   759   -  Interest expense 32,875   34,589   98,126   90,885  Catastrophic weather related charges 7,756   -   8,124   -  Other income, net (4) (3,345 )  -   (5,340 )  -  Current tax (benefit) / expense (38 )  283   133   567  Deferred tax benefit (81 )  -   (745 )  -  Income from affiliate transactions -   (500 )  -   (500 ) Preferred return to preferred OP units 1,112   1,257   3,482   3,793  Amounts attributable to noncontrolling interests 1,776   879   4,179   460  Preferred stock distributions 1,955   2,197   6,233   6,748  NOI(1) / Gross Profit $ 147,070   $ 136,805   $ 416,235   $ 347,069   Three Months Ended  September 30,  Nine Months Ended  September 30,  2017  2016  2017  2016 Real Property NOI (1) $ 125,961   $ 114,851   $ 361,595   $ 296,081  Rental Program NOI (1) 22,060   21,213   68,759   64,223  Home Sales NOI(1) / Gross Profit 8,103   9,276   23,320   23,184  Ancillary NOI(1) / Gross Profit 7,024   6,997   10,367   9,745  Site rent from Rental Program (included in Real Property NOI) (1)(7) (16,078 )  (15,532 )  (47,806 )  (46,164 ) NOI(1) / Gross profit $ 147,070   $ 136,805   $ 416,235   $ 347,069  Non-GAAP and Other Financial Measures

Financial Highlights                                                                                                                                     (amounts in thousands, except per share data)

 Quarter Ended  9/30/2017  6/30/2017  3/31/2017  12/31/2016  9/30/2016 OPERATING INFORMATION          Total revenues $ 268,245   $ 237,899   $ 234,400   $ 218,634   $ 249,701  Net income $ 28,958   $ 16,974   $ 25,545   $ 1,501   $ 23,230  Net income / (loss) attributable to common stockholders $ 24,115   $ 12,364   $ 21,104   $ (1,600 )  $ 18,897  Earnings / (loss) per share basic $ 0.31   $ 0.16   $ 0.29   $ (0.02 )  $ 0.27  Earnings / (loss) per share diluted $ 0.31   $ 0.16   $ 0.29   $ (0.02 )  $ 0.27            Recurring EBITDA (1) $ 132,524   $ 114,324   $ 122,395   $ 105,850   $ 123,276  FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities(1) (6) $ 86,917   $ 73,202   $ 83,391   $ 57,572   $ 78,023  FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities excluding certain items(1) (6) $ 93,757   $ 76,194   $ 85,621   $ 69,192   $ 83,181  FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) per share - fully diluted $ 1.05   $ 0.92   $ 1.07   $ 0.75   $ 1.06  FFO attributable to Sun Communities, Inc. common stockholders and dilutive convertible securities (1) (6) per share excluding certain items - fully diluted $ 1.13   $ 0.96   $ 1.10   $ 0.91   $ 1.13            BALANCE SHEETS          Total assets $ 6,157,836   $ 6,178,713   $ 5,902,447   $ 5,870,776   $ 5,904,706  Total debt $ 3,003,427   $ 3,018,653   $ 3,140,547   $ 3,110,042   $ 3,102,993  Total liabilities $ 3,351,021   $ 3,373,695   $ 3,478,132   $ 3,441,605   $ 3,429,743  Debt Analysis                                                                                                                                                (amounts in thousands)

 Quarter Ended  9/30/2017  6/30/2017  3/31/2017  12/31/2016  9/30/2016 DEBT OUTSTANDING          Mortgage loans payable $ 2,822,640   $ 2,832,819   $ 2,774,645   $ 2,819,567   $ 2,854,831   Secured borrowings (3) 134,884   139,496   141,671   144,477   144,522  Preferred OP units - mandatorily redeemable 45,903   45,903   45,903   45,903   45,903  Lines of credit (8) -   435   178,328   100,095   57,737  Total debt $ 3,003,427   $ 3,018,653   $ 3,140,547   $ 3,110,042   $ 3,102,993            % FIXED/FLOATING          Fixed 94.9 %  94.9 %  89.4 %  91.8 %  93.1 % Floating 5.1 %  5.1 %  10.6 %  8.2 %  6.9 % Total 100.0 %  100.0 %  100.0 %  100.0 %  100.0 %           WEIGHTED AVERAGE INTEREST RATES          Mortgage loans payable 4.26 %  4.26 %  4.26 %  4.24 %  4.30 % Preferred OP units - mandatorily redeemable 6.87 %  6.87 %  6.87 %  6.87 %  6.87 % Lines of credit (8) - %  - %  2.52 %  2.14 %  1.93 % Average before Secured borrowings 4.30 %  4.30 %  4.19 %  4.21 %  4.29 % Secured borrowings (3) 9.98 %  9.99 %  10.01 %  10.03 %  10.06 % Total average 4.56 %  4.56 %  4.45 %  4.48 %  4.56 %           DEBT RATIOS          Net Debt / Recurring EBITDA(1) (TTM) 6.0   6.0   7.0   7.5   7.7  Net Debt / Enterprise Value 28.3 %  27.2 %  32.8 %  33.8 %  32.8 % Net Debt + Preferred Stock / Enterprise Value 29.4 %  28.4 %  34.2 %  35.2 %  34.2 % Net Debt / Gross Assets 39.0 %  38.0 %  44.8 %  45.0 %  44.1 %           COVERAGE RATIOS          Recurring EBITDA(1) (TTM) / Interest 3.5  3.4  3.3  3.2  3.1  Recurring EBITDA(1) (TTM) / Interest + Pref.Distributions + Pref. Stock Distribution 3.2  3.1  3.0  2.9  2.9 MATURITIES/PRINCIPAL AMORTIZATION NEXT FIVE YEARS 2017  2018  2019  2020  2021 Mortgage loans payable:          Maturities $ -   $ 26,186   $ 64,314   $ 58,078   $ 270,680  Weighted average rate of maturities - %  6.13 %  6.24 %  5.92 %  5.53 % Principal amortization 13,369   55,143   55,937   56,588   55,578  Secured borrowings (3) 1,354   5,736   6,235   6,795   7,298  Preferred OP units - mandatorily redeemable 3,670   7,570   -   -   -  Total $ 18,393   $ 94,635   $ 126,486   $ 121,461   $ 333,556  Statements of Operations - Same Community                                                                     (amounts in thousands except for Other Information)

 Three Months Ended September 30,  Nine Months Ended September 30,  2017  2016  Change % Change  2017  2016  Change  % Change REVENUES:               Income from real property $ 144,589   $ 136,137   $ 8,452  6.2 %  $ 404,353   $ 381,979   $ 22,374   5.9 %                PROPERTY OPERATING EXPENSES:            Payroll and benefits 13,070   12,596   474  3.8 %  34,780   33,407   1,373   4.1 % Legal, taxes & insurance 1,325   1,178   147  12.5 %  4,073   3,895   178   4.6 % Utilities 8,961   8,821   140  1.6 %  22,905   22,082   823   3.7 % Supplies and repair 5,702   5,862   (160 ) (2.7 )%  14,712   14,474   238   1.6 % Other 4,078   3,955   123  3.1 %  10,550   10,412   138   1.3 % Real estate taxes 9,631   9,148   483  5.3 %  29,104   27,943   1,161   4.2 % Property operating expenses 42,767   41,560   1,207  2.9 %  116,124   112,213   3,911   3.5 % NET OPERATING INCOME (NOI)(1) $ 101,822   $ 94,577   $ 7,245  7.7 %  $ 288,229   $ 269,766   $ 18,463   6.8 %  As of September 30,   2017  2016  Change  % Change  OTHER INFORMATION         Number of properties 231   231   -              MH occupancy (9) 96.7 %        RV occupancy (9) 100.0 %        MH & RV blended occupancy (9) 97.2 %  95.6 % (10) 1.6 %             Sites available for development 6,003   7,177   (1,174 )  (16.4 )%           Monthly base rent per site - MH $ 514   $ 497   $ 17   3.5 % (12) Monthly base rent per site - RV (11) $ 448   $ 433   $ 15   3.5 % (12) Monthly base rent per site - Total $ 506   $ 489   $ 17   3.5 % (12) Rental Program Summary    (amounts in thousands except for *)

 Three Months Ended September 30,  Nine Months Ended September 30,  2017  2016  Change  % Change  2017  2016  Change  % Change REVENUES:                Rental home revenue $ 12,757   $ 12,031   $ 726   6.0 %  $ 37,774   $ 35,696   $ 2,078   5.8 % Site rent included in Income from real property 16,078   15,532   546   3.5 %  47,806   46,164   1,642   3.6 % Rental program revenue 28,835   27,563   1,272   4.6 %  85,580   81,860   3,720   4.5 %                 EXPENSES:                Commissions 891   551   340   61.7 %  1,902   1,710   192   11.2 % Repairs and refurbishment 3,306   3,349   (43 )  (1.3 )%  7,950   9,288   (1,338 )  (14.4 )% Taxes and insurance 1,546   1,446   100   6.9 %  4,489   4,178   311   7.4 % Marketing and other 1,032   1,004   28   2.8 %  2,480   2,461   19   0.8 % Rental program operating and maintenance 6,775   6,350   425   6.7 %  16,821   17,637   (816 )  (4.6 )% NET OPERATING INCOME (NOI) (1) $ 22,060   $ 21,213   $ 847   4.0 %  $ 68,759   $ 64,223   $ 4,536   7.1 %                 Occupied rental home information as of September 30, 2017 and 2016:         Number of occupied rentals, end of period*  10,960   10,797   163   1.5 % Investment in occupied rental homes, end of period  $ 482,591   $ 453,521   $ 29,070   6.4 % Number of sold rental homes (YTD)*  828   858   (30 )  (3.5 )% Weighted average monthly rental rate, end of period*  $ 908   $ 879   $ 29   3.3 % Home Sales Summary           (amounts in thousands except for *)

 Three Months Ended September 30,  Nine Months Ended September 30,  2017  2016  Change  % Change  2017  2016  Change  % Change New home sales $ 10,331   $ 9,391   $ 940   10.0 %  $ 24,760   $ 20,472   $ 4,288   21.0 % Pre-owned home sales 22,866   21,820   1,046   4.8 %  66,559   61,515   5,044   8.2 % Revenue from home sales 33,197   31,211   1,986   6.4 %  91,319   81,987   9,332   11.4 %                 New home cost of sales 8,699   7,896   803   10.2 %  21,044   17,513   3,531   20.2 % Pre-owned home cost of sales 16,395   14,039   2,356   16.8 %  46,955   41,290   5,665   13.7 % Cost of home sales 25,094   21,935   3,159   14.4 %  67,999   58,803   9,196   15.6 %                 NOI / Gross Profit (1) $ 8,103   $ 9,276   $ (1,173 )  (12.7 )%  $ 23,320   $ 23,184   $ 136   0.6 %                 Gross profit - new homes $ 1,632   $ 1,495   $ 137   9.2 %  $ 3,716   $ 2,959   $ 757   25.6 % Gross margin % - new homes 15.8 %  15.9 %  (0.1 )%    15.0 %  14.5 %  0.5 %   Average selling price - new homes* $ 101,284   $ 90,298   $ 10,986   12.2 %  $ 95,598   $ 89,397   $ 6,201   6.9 %                 Gross profit - pre-owned homes $ 6,471   $ 7,781   $ (1,310 )  (16.8 )%  $ 19,604   $ 20,225   $ (621 )  (3.1 )% Gross margin % - pre-owned homes 28.3 %  35.7 %  (7.4 )%    29.5 %  32.9 %  (3.4 )%   Average selling price - pre-owned homes* $ 32,526   $ 27,585   $ 4,941   17.9 %  $ 30,630   $ 28,205   $ 2,425   8.6 %                 Home sales volume:         New home sales* 102   104   (2 )  (1.9 )%  259   229   30   13.1 % Pre-owned home sales* 703   791   (88 )  (11.1 )%  2,173   2,181   (8 )  (0.4 )% Total homes sold* 805   895   (90 )  (10.1 )%  2,432   2,410   22   0.9 %               Â

Acquisitions Summary - Properties Acquired in 2017 and 2016(amounts in thousands except for statistical data)

  Three Months Ended  September 30, 2017  Nine Months Ended  September 30, 2017 REVENUES:     Income from real property  $ 45,760   $ 133,443  PROPERTY AND OPERATING EXPENSES:     Payroll and benefits  6,098   16,360  Legal, taxes & insurance  596   1,266  Utilities  6,890   17,755  Supplies and repair  1,999   4,912  Other  2,616   9,566  Real estate taxes  3,422   10,218  Property operating expenses  21,621   60,077       NET OPERATING INCOME (NOI) (1)  $ 24,139   $ 73,366           As of September 30, 2017 Other information:     Number of properties    117  Occupied sites (13)    22,526  Developed sites (13)    23,156  Occupancy % (13)    97.3 % Transient sites    7,208  Monthly base rent per site - MH    $ 619  Monthly base rent per site - RV (11)    $ 415  Monthly base rent per site - Total (11)    $ 512  Ancillary revenues, net (in thousands)    $ 2,384       Home sales:     Gross profit from home sales (in thousands)    $ 3,266  New homes sales    64  Pre-owned homes sales    209       Occupied rental home information:     Rental program NOI (1) (in thousands)    $ 611  Number of occupied rentals, end of period    366  Investment in occupied rental homes (in thousands)    $ 10,679  Weighted average monthly rental rate    $ 890  Property Summary           (includes MH and Annual RV's)              COMMUNITIES  9/30/2017  6/30/2017  3/31/2017  12/31/2016  9/30/2016 FLORIDA           Communities  121   121   121   121   121  Developed sites (13)  36,587   36,661   36,533   36,326   36,050  Occupied (13)  35,414   35,479   35,257   35,021   34,745  Occupancy % (13)  96.8 %  96.8 %  96.5 %  96.4 %  96.4 % Sites for development  1,469   1,368   1,359   1,461   1,455  MICHIGAN           Communities  68   68   67   67   67  Developed sites (13)  25,498   25,496   25,024   24,512   24,388  Occupied (13)  23,996   23,924   23,443   23,248   23,218  Occupancy % (13)  94.1 %  93.8 %  93.7 %  94.8 %  95.2 % Sites for development  1,752   1,752   1,798   2,414   2,453  TEXAS           Communities  21   21   21   21   21  Developed sites (13)  6,410   6,312   6,292   6,186   6,088  Occupied (13)  6,041   6,021   5,943   5,862   5,774  Occupancy % (13)  94.2 %  95.4 %  94.5 %  94.8 %  94.8 % Sites for development  1,277   1,345   1,387   1,474   1,455  CALIFORNIA           Communities  27   23   23   22   22  Developed sites (13)  5,693   4,894   4,865   4,862   4,863  Occupied (13)  5,630   4,834   4,804   4,793   4,792  Occupancy % (13)  98.9 %  98.8 %  98.7 %  98.6 %  98.5 % Sites for development  379   367   411   332   332  ONTARIO, CANADA           Communities  15   15   15   15   15  Developed sites (13)  3,620   3,564   3,451   3,368   3,453  Occupied (13)  3,620   3,564   3,451   3,368   3,453  Occupancy % (13)  100.0 %  100.0 %  100.0 %  100.0 %  100.0 % Sites for development  1,628   1,628   1,628   1,599   2,029  ARIZONA           Communities  11   11   11   11   11  Developed sites (13)  3,602   3,589   3,582   3,565   3,567  Occupied (13)  3,410   3,383   3,370   3,338   3,305  Occupancy % (13)  94.7 %  94.3 %  94.1 %  93.6 %  92.7 % Sites for development  269   269   269   358   358  INDIANA           Communities  11   11   11   11   11  Developed sites (13)  2,900   2,900   2,900   2,900   2,900  Occupied (13)  2,759   2,758   2,741   2,724   2,712  Occupancy % (13)  95.1 %  95.1 %  94.5 %  93.9 %  93.5 % Sites for development  330   330   330   316   316  OHIO           Communities  9   9   9   9   9  Developed sites (13)  2,757   2,735   2,719   2,715   2,719  Occupied (13)  2,676   2,643   2,623   2,595   2,602  Occupancy % (13)  97.1 %  96.6 %  96.5 %  95.6 %  95.7 % Sites for development  75   75   75   -   -  COLORADO           Communities  8   8   8   8   7  Developed sites (13)  2,335   2,335   2,335   2,335   2,335  Occupied (13)  2,318   2,326   2,329   2,325   2,323  Occupancy % (13)  99.3 %  99.6 %  99.7 %  99.6 %  99.5 % Sites for development  670   656   656   656   304  OTHER STATES           Communities  57   57   56   56   55  Developed sites (13)  14,957   14,891   14,567   14,313   14,415  Occupied (13)  14,532   14,439   14,130   13,919   13,991  Occupancy % (13)  97.2 %  97.0 %  97.0 %  97.3 %  97.1 % Sites for development  2,540   2,582   1,977   1,727   1,723  TOTAL - PORTFOLIO           Communities  348   344   342   341   339  Developed sites (13)  104,359   103,377   102,268   101,082   100,778  Occupied (13)  100,396   99,371   98,091   97,193   96,915  MH & RV blended occupancy % (13)  96.2 %  96.1 %  95.9 %  96.2 %  96.2 % Sites for development  10,389   10,372   9,890   10,337   10,425  % Communities age restricted  33.6 %  32.8 %  33.0 %  33.1 %  33.3 %            TRANSIENT RV PORTFOLIO SUMMARY            Location           Florida  6,133   6,244   6,467   6,497   7,232  Texas  1,392   1,403   1,412   1,407   1,446  Ontario, Canada  1,262   1,314   1,451   1,500   1,485  New Jersey  1,016   1,028   1,059   1,042   1,047  Arizona  1,012   1,025   1,032   1,049   1,047  California  808   808   840   513   478  New York  623   630   588   830   484  Maine  529   533   543   555   556  Indiana  520   520   520   502   501  Michigan  258   260   210   204   203  Ohio  147   169   194   198   194  Other locations  2,215   2,253   1,966   1,997   1,801  Total transient RV sites  15,915   16,187   16,282   16,294   16,474  Capital Improvements, Development, and Acquisitions   (amounts in thousands except for *)

 Recurring            Capital Recurring          Expenditures Capital Lot   Expansion & Revenue   Average/Site*  Expenditures (14)  Modifications (15)  Acquisitions (16)  Development (17)  Producing (18) YTD 2017  $ 192   $ 12,551   $ 18,085   $ 136,117   $ 55,888   $ 1,250  2016  $ 211   $ 17,613   $ 19,040   $ 1,822,564   $ 47,958   $ 2,631  2015  $ 230   $ 20,344   $ 13,961   $ 1,214,482   $ 28,660   $ 4,497  Operating Statistics for Manufactured Homes and Annual RV's

 Resident Net Leased New Home Pre-owned Brokered LOCATIONS Move-outs Sites (19) Sales Home Sales Re-sales Florida  783   553   118   281   934  Michigan  364   458   25   1,012   98  Texas  175   179   21   248   26  California  26   16   6   16   26  Arizona  39   72   19   18   135  Ontario, Canada  161   252   24   31   191  Indiana  37   35   1   165   15  Ohio  80   81   -   89   4  Colorado  9   (7 )  4   102   38  Other locations  441   194   41   211   115  Nine Months Ended September 30, 2017  2,115   1,833   259   2,173   1,582   Resident Net Leased New Home Pre-owned Brokered TOTAL FOR YEAR ENDED Move-outs Sites (19) Sales Home Sales Re-sales 2016  1,722   1,686   329   2,843   1,655  2015  1,344   1,905   273   2,210   1,244   Resident Resident PERCENTAGE TRENDS Move-outs Re-sales 2017 (TTM)  1.9 %  6.4 % 2016  2.0 %  6.1 % 2015  2.0 %  5.9 % Footnotes and Definitions         Â

                      (1)    Investors in and analysts following the real estate industry utilize funds from operations ("FFO"), net operating income ("NOI"), and recurring earnings before interest, tax, depreciation and amortization ("Recurring EBITDA") as supplemental performance measures. We believe FFO, NOI, and Recurring EBITDA are appropriate measures given their wide use by and relevance to investors and analysts. FFO, reflecting the assumption that real estate values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation/amortization of real estate assets. NOI provides a measure of rental operations and does not factor in depreciation/amortization and non-property specific expenses such as general and administrative expenses. Recurring EBITDA, a metric calculated as EBITDA exclusive of certain nonrecurring items, provides a further tool to evaluate ability to incur and service debt and to fund dividends and other cash needs. Additionally, FFO, NOI, and Recurring EBITDA are commonly used in various ratios, pricing multiples/yields and returns and valuation calculations used to measure financial position, performance and value.

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

Because FFO excludes significant economic components of net income (loss) including depreciation and amortization, FFO should be used as an adjunct to net income (loss) and not as an alternative to net income (loss). The principal limitation of FFO is that it does not represent cash flow from operations as defined by GAAP and is a supplemental measure of performance that does not replace net income (loss) as a measure of performance or net cash provided by operating activities as a measure of liquidity. In addition, FFO is not intended as a measure of a REIT's ability to meet debt principal repayments and other cash requirements, nor as a measure of working capital. FFO only provides investors with an additional performance measure that, when combined with measures computed in accordance with GAAP such as net income (loss), cash flow from operating activities, investing activities and financing activities, provide investors with an indication of our ability to service debt and to fund acquisitions and other expenditures. Other REITs may use different methods for calculating FFO, accordingly, our FFO may not be comparable to other REITs.

NOI is derived from revenues minus property operating expenses and real estate taxes. NOI does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income (loss) (determined in accordance with GAAP) as an indication of the Company's financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company's liquidity; nor is it indicative of funds available for the Company's cash needs, including its ability to make cash distributions. The Company believes that net income (loss) is the most directly comparable GAAP measurement to NOI. Because of the inclusion of items such as interest, depreciation, and amortization, the use of net income (loss) as a performance measure is limited as these items may not accurately reflect the actual change in market value of a property, in the case of depreciation and in the case of interest, may not necessarily be linked to the operating performance of a real estate asset, as it is often incurred at a parent company level and not at a property level. The Company believes that NOI is helpful to investors as a measure of operating performance because it is an indicator of the return on property investment, and provides a method of comparing property performance over time. The Company uses NOI as a key management tool when evaluating performance and growth of particular properties and/or groups of properties. The principal limitation of NOI is that it excludes depreciation, amortization interest expense and non-property specific expenses such as general and administrative expenses, all of which are significant costs, therefore, NOI is a measure of the operating performance of the properties of the Company rather than of the Company overall.

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

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

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

(4)  Other income, net for the quarter ended September 30, 2017, is comprised of a foreign currency translation gain of $3.4 million partially offset by contingent liability re-measurement of $0.1 million. For the nine months ended September 30, 2017, Other income, net is comprised of a foreign currency translation gain of $6.4 million, partially offset by contingent liability re-measurement of $1.1 million.

(5)Â These costs represent the first year expenses incurred to bring acquired properties up to the Company's operating standards, including items such as tree trimming and painting costs that do not meet the Company's capitalization policy.

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

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

(8)Â Lines of credit also includes the Company's MH floor plan facility. The effective interest rate on the MH floor plan facility was 7.0 percent for all periods presented. However, the Company pays no interest if the floor plan balance is repaid within 60 days.

(9) MH occupancy excludes recently completed but vacant expansion sites. RV occupancy includes annual sites and excludes transient RV sites.

(10) The 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.

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

(12) Calculated using actual results without rounding.

(13) Includes MH and annual RV sites, and excludes transient RV sites.

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

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

(16) Acquisitions represent the purchase price of existing operating communities and land parcels to develop expansions or new communities. Acquisitions for the nine months ended September 30, 2017 also include $65.9 million of capital improvements identified during due diligence that are necessary to bring the community up to the Company's standards. These include items such as: upgrading clubhouses; landscaping; new street light systems; new mail delivery systems; pool renovation including larger decks, heaters, and furniture; new maintenance facilities; and new signage including main signs and internal road signs. These are considered acquisition costs and although identified during due diligence, they often require 24 to 36 months after closing to complete.

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

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

    (19) Net leased sites do not include occupied sites acquired during that year.

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

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