1 ============================================================================= SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A AMENDMENT NO. 1 TO CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 DATE OF REPORT: DECEMBER 31, 1997 (Date of earliest event reported) SUN COMMUNITIES, INC. (Exact name of registrant as specified in its charter) MARYLAND COMMISSION FILE NO. 1-12616 38-2730780 (State of incorporation (IRS Employer I.D. No.) 31700 MIDDLEBELT ROAD SUITE 145 FARMINGTON HILLS, MICHIGAN 48334 (Address of principal executive offices) (248) 932-3100 (Registrant's telephone number, including area code) ============================================================================= Page 1 of 19 pages 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. The financial statements and the pro forma financial information of the Registrant for the properties acquired by the Registrant during the 1997 calendar year, prepared in accordance with Regulation S-X, are included in this Report. Pursuant to Regulation S-X, financial statements are being provided for only four such properties as the aggregate purchase price for such properties is more than fifty percent (50%) of the aggregate purchase price of all properties acquired by the Registrant during the 1997 calendar year. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. SUN COMMUNITIES, INC., a Maryland corporation Date: March 13, 1998 By: /s/Jeffrey P. Jorissen -------------------------------------------- Jeffrey P. Jorissen, Senior Vice President, Treasurer, Chief Financial Officer, and Secretary Page 2 of 19 pages 3 FINANCIAL STATEMENTS AND PRO FORMA INFORMATION TABLE OF CONTENTS FINANCIAL STATEMENTS Page 3 of 19 pages
Southfork Mobile Home Park Page -------------------------- Report of Independent Accountants ................................... 4 Historical Summaries of Gross Income and Direct Operating Expenses .. 5 Woodside Terrace ---------------- Report of Independent Accountants ................................... 7 Historical Summaries of Gross Income and Direct Operating Expenses .. 8 Willowbrook Place ----------------- Report of Independent Accountants ................................... 10 Historical Summaries of Gross Income and Direct Operating Expenses .. 11 White Oak Estates ----------------- Report of Independent Accountants ................................... 13 Historical Summaries of Gross Income and Direct Operating Expenses .. 14 PRO FORMA INFORMATION --------------------- Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 1996 (unaudited) .................... 16 4 [COOPERS & LYBRAND LETTERHEAD] REPORT OF INDEPENDENT ACCOUNTANTS Board of Directors and Shareholders of Sun Communities, Inc.: We have audited the accompanying historical summaries of gross income and direct operating expenses (the "Historical Summaries") of Southfork Mobile Home Park for the six-month period ended June 30, 1997 and the year ended December 31, 1996. These Historical Summaries are the responsibility of Southfork Mobile Home Park's management. Our responsibility is to express an opinion on the Historical Summaries based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summaries are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summaries. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summaries. We believe that our audits provide a reasonable basis for our opinion. The accompanying Historical Summaries were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and are not intended to be a complete presentation of Southfork Mobile Home Park's revenues and expenses. In our opinion, the Historical Summaries referred to above present fairly, in all material respects, the gross income and direct operating expenses described in Note 1 of Southfork Mobile Home Park for the six-month period ended June 30, 1997 and the year ended December 31, 1996, in conformity with generally accepted accounting principles. COOPERS & LYBRAND L.L.P. - ------------------------ Coopers & Lybrand L.L.P. Detroit, Michigan January 9, 1998 Page 4 of 19 pages 5 SUN COMMUNITIES, INC. SOUTHFORK MOBILE HOME PARK HISTORICAL SUMMARIES OF GROSS INCOME AND DIRECT OPERATING EXPENSES for the six-month period ended June 30, 1997 and the year ended December 31, 1996 The accompanying note is an integral part of the historical summaries. Page 5 of 19 pages
SIX MONTHS YEAR ENDED ENDED JUNE 30, DEC 31, 1997 1996 ----------- ------------ Gross Income: Rental income $ 516,915 $ 939,282 Other income 160,306 307,336 ----------- ------------ Total gross income 677,221 1,246,618 ----------- ------------ Direct operating costs: Property operating and maintenance expenses 260,961 501,862 Real estate taxes 21,534 42,837 General and administrative 23,686 46,602 ----------- ------------ 306,181 591,301 ----------- ------------ Gross income in excess of direct operating expenses $ 371,040 $ 655,317 =========== ============ 6 SUN COMMUNITIES, INC. SOUTHFORK MOBILE HOME PARK NOTE TO HISTORICAL SUMMARIES OF GROSS INCOME AND DIRECT OPERATING EXPENSES 1. BASIS OF PRESENTATION: The Historical Summaries have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for the real estate operations acquired. The Historical Summaries are not representative of the actual operations for the periods presented, as certain expenses which may not be comparable to the expenses expected to be incurred by Sun Communities, Inc. in the proposed future operations of Southfork Mobile Home Park have been excluded. Expenses excluded consist of management fees, interest, depreciation, certain professional fees and other indirect costs not directly related to the future operations of the Southfork Mobile Home Park property. Rental income is recognized when due from residents. The Historical Summaries relate to operations of the property which was acquired by Sun Communities, Inc. in December, 1997. Southfork Mobile Home Park had 476 developed sites at June 30, 1997. Page 6 of 19 pages 7 [COOPERS & LYBRAND LETTERHEAD] REPORT OF INDEPENDENT ACCOUNTANTS Board of Directors and Shareholders of Sun Communities, Inc.: We have audited the accompanying historical summaries of gross income and direct operating expenses (the "Historical Summaries") of Woodside Terrace for the six-month period ended June 30, 1997 and the year ended December 31, 1996. These Historical Summaries are the responsibility of Woodside Terrace's management. Our responsibility is to express an opinion on the Historical Summaries based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summaries are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summaries. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summaries. We believe that our audits provide a reasonable basis for our opinion. The accompanying Historical Summaries were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and are not intended to be a complete presentation of Woodside Terrace's revenues and expenses. In our opinion, the Historical Summaries referred to above present fairly, in all material respects, the gross income and direct operating expenses described in Note 1 of Woodside Terrace for the six-month period ended June 30, 1997 and the year ended December 31, 1996, in conformity with generally accepted accounting principles. Coopers & Lybrand L.L.P. Detroit, Michigan January 9, 1998 Page 7 of 19 pages 8 SUN COMMUNITIES, INC. WOODSIDE TERRACE HISTORICAL SUMMARIES OF GROSS INCOME AND DIRECT OPERATING EXPENSES for the six-month period ended June 30, 1997 and the year ended December 31, 1996 The accompanying note is an integral part of the Historical Summaries. Page 8 of 19 pages
SIX MONTHS YEAR ENDED ENDED JUNE 30, DEC 31, 1997 1996 --------- ---------- Gross Income: Rental income $ 653,969 $1,282,038 Other income 14,438 37,824 --------- ---------- Total gross income 668,407 1,319,862 --------- ---------- Direct operating costs: Property operating and maintenance expenses 122,036 304,815 Real estate taxes 19,947 40,260 General and administrative 6,077 29,847 --------- ---------- 148,060 374,922 --------- ---------- Gross income in excess of direct operating expenses $ 520,347 $ 944,940 ========= ========== 9 SUN COMMUNITIES, INC. WOODSIDE TERRACE NOTE TO HISTORICAL SUMMARIES OF GROSS INCOME AND DIRECT OPERATING EXPENSES 1. BASIS OF PRESENTATION: The Historical Summaries have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for the real estate operations acquired. The Historical Summaries are not representative of the actual operations for the periods presented, as certain expenses which may not be comparable to the expenses expected to be incurred by Sun Communities, Inc. in the proposed future operations of Woodside Terrace have been excluded. Expenses excluded consist of management fees, interest, depreciation, certain professional fees and other indirect costs not directly related to the future operations of the Woodside Terrace property. Rental income is recognized when due from residents. The Historical Summaries relate to operations of the property which was leased by Sun Communities, Inc in November, 1997. Woodside Terrace had 439 developed sites at June 30, 1997. Page 9 of 19 pages 10 [COOPERS & LYBRAND LETTERHEAD] REPORT OF INDEPENDENT ACCOUNTANTS Board of Directors and Shareholders of Sun Communities, Inc.: We have audited the accompanying historical summaries of gross income and direct operating expenses (the "Historical Summaries") of Willowbrook Place for the six-month period ended June 30, 1997 and the year ended December 31, 1996. These Historical Summaries are the responsibility of Willowbrook Place's management. Our responsibility is to express an opinion on the Historical Summaries based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summaries are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summaries. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summaries. We believe that our audits provide a reasonable basis for our opinion. The accompanying Historical Summaries were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and are not intended to be a complete presentation of Willowbrook Place's revenues and expenses. In our opinion, the Historical Summaries referred to above present fairly, in all material respects, the gross income and direct operating expenses described in Note 1 of Willowbrook Place for the six-month period ended June 30, 1997 and the year ended December 31, 1996, in conformity with generally accepted accounting principles. Coopers & Lybrand LLP Detroit, Michigan January 9, 1998 Page 10 of 19 pages 11 SUN COMMUNITIES, INC. WILLOWBROOK PLACE HISTORICAL SUMMARIES OF GROSS INCOME AND DIRECT OPERATING EXPENSES for the six-month period ended June 30, 1997 and the year ended December 31, 1996 The accompanying note is an integral part of the Historical Summaries. Page 11 of 19 pages
SIX MONTHS YEAR ENDED ENDED JUN 30, DEC 31, 1997 1996 ----------- ----------- Gross Income: Rental income $ 390,809 $ 765,642 Other income 4,175 13,850 ----------- ----------- Total gross income 394,984 779,492 ----------- ----------- Direct operating costs: Property operating and maintenance expenses 66,426 145,452 Real estate taxes 18,234 36,802 General and administrative 6,523 11,159 ----------- ----------- Total direct operating expenses 91,183 193,413 ----------- ----------- Gross income in excess of direct operating expenses $ 303,801 $ 586,079 =========== =========== 12 SUN COMMUNITIES, INC. WILLOWBROOK PLACE NOTE TO HISTORICAL SUMMARIES OF GROSS INCOME AND DIRECT OPERATING EXPENSES 1. BASIS OF PRESENTATION: The Historical Summaries have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for the real estate operations acquired. The Historical Summaries are not representative of the actual operations for the periods presented, as certain expenses which may not be comparable to the expenses expected to be incurred by Sun Communities, Inc. in the proposed future operations of Willowbrook Place have been excluded. Expenses excluded consist of management fees, interest, depreciation, certain professional fees and other indirect costs not directly related to the future operations of the Willowbrook Place property. Rental income is recognized when due from residents. The Historical Summaries relate to operations of the property which was leased by Sun Communities, Inc. in December, 1997. Willowbrook Place had 266 developed sites at June 30, 1997. Page 12 of 19 pages 13 [COOPERS & LYBRAND LETTERHEAD] REPORT OF INDEPENDENT ACCOUNTANTS Board of Directors and Shareholders of Sun Communities, Inc.: We have audited the accompanying historical summaries of gross income and direct operating expenses (the "Historical Summaries") of White Oak Estates for the six-month period ended June 30, 1997 and the year ended December 31, 1996. These Historical Summaries are the responsibility of White Oak Estates' management. Our responsibility is to express an opinion on the Historical Summaries based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summaries are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summaries. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summaries. We believe that our audits provide a reasonable basis for our opinion. The accompanying Historical Summaries were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and are not intended to be a complete presentation of White Oak Estates' revenues and expenses. In our opinion, the Historical Summaries referred to above present fairly, in all material respects, the gross income and direct operating expenses described in Note 1 of White Oak Estates for the six-month period ended June 30, 1997 and the year ended December 31, 1996, in conformity with generally accepted accounting principles. Coopers & Lybrand L.L.P. Detroit, Michigan December 23, 1997 Page 13 of 19 pages 14 SUN COMMUNITIES, INC. WHITE OAK ESTATES HISTORICAL SUMMARIES OF GROSS INCOME AND DIRECT OPERATING EXPENSES for the six-month period ended June 30, 1997 and the year ended December 31, 1996 The accompanying note is an integral part of the Historical Summaries. Page 14 of 19 pages
SIX MONTHS YEAR ENDED ENDED JUN 30, DEC 31, 1997 1996 ----------- ---------- Gross Income: Rental income $ 536,975 $ 1,039,433 Other income 3,135 6,801 ----------- ---------- Total gross income 540,110 1,046,234 ----------- ---------- Direct operating costs: Property operating and maintenance expenses 150,073 292,968 Real estate taxes 56,991 106,547 General and administrative 2,352 11,880 ----------- ---------- 209,416 411,395 ----------- ---------- Gross income in excess of direct operating expenses $ 330,694 $ 634,839 =========== ========== 15 SUN COMMUNITIES, INC. WHITE OAK ESTATES NOTE TO HISTORICAL SUMMARIES OF GROSS INCOME AND DIRECT OPERATING EXPENSES 1. BASIS OF PRESENTATION: The Historical Summaries have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission for the real estate operations acquired. The Historical Summaries are not representative of the actual operations for the periods presented, as certain expenses which may not be comparable to the expenses expected to be incurred by Sun Communities, Inc. in the proposed future operations of White Oak Estates have been excluded. Expenses excluded consist of management fees, interest, depreciation, certain professional fees and other indirect costs not directly related to the future operations of the White Oak Estates property. Rental income is recognized when due from residents. The Historical Summaries relate to operations of White Oak Estates which was acquired by Sun Communities, Inc. in December, 1997. White Oak Estates had 377 developed sites at June 30, 1997. Page 17 of 19 pages 16 SUN COMMUNITIES, INC. PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET DECEMBER 31, 1996 (UNAUDITED) During 1997, the Company acquired twelve manufactured housing communities, consisting of 4,258 manufactured housing and recreational vehicle sites, for an aggregate purchase price of $69.8 million. All communities were acquired from parties unrelated to the Company. In acquiring these manufactured housing communities, management evaluated material factors including, but not limited to, each community's operating income, location and competition, rent structure, occupancy rates, developed sites and undeveloped sites or property. The following pro forma consolidated balance sheet as of December 31, 1996 and the pro forma consolidated statement of operations for the year then ended have been prepared to reflect the acquisition of the twelve manufactured housing communities. The pro forma financial information is based on the consolidated historical financial statements of Sun Communities, Inc. and should be read in conjunction with those financial statements and the notes thereto. The pro forma consolidated balance sheet was prepared as if the acquisitions described herein occurred on December 31, 1996. The pro forma consolidated statement of operations was prepared as if the acquisitions described herein occurred on January 1, 1996. The pro forma financial information is unaudited and is not necessarily indicative of the results which actually would have occurred if the transaction had been consummated on the dates described, nor does it purport to represent the Company's future financial position or results of operations. - ------------------ (A) Reflects the Company's historical consolidated balance sheet as of December 31, 1996. (B) Amounts presented reflect the acquisition of twelve manufactured home communities. (C) Includes $35 million of senior notes issued, $17,400 of collateralized lease obligations and $8,200 borrowed from the Company's line of credit. Page 16 of 19 pages
Sun Sun Communities, Inc. Pro Forma Communities, Inc. (A) Adjustments Pro Forma ------------------ ----------------- -------------------- (in thousands) Assets: Investment in real estate, net $558,278 $69,800 (B) $628,078 Cash and cash equivalents 9,236 (9,200)(B) 36 Investment in Sun Home Services, Inc. 5,103 5,103 Mortgage notes receivable 4,176 4,176 Other assets 8,263 8,263 ---------------- ------------- ------------- Total assets $585,056 $60,600 $645,656 ================ ============= ============= Liabilities: Line of credit $8,200 (C) $8,200 Debt $185,000 52,400 (C) 237,400 Accounts payable and accrued expenses 7,718 7,718 Deposits and other liabilities 9,123 9,123 ---------------- ------------- ------------- Total liabilities 201,841 60,600 262,441 ---------------- ------------- ------------- Minority interests 82,283 82,283 ---------------- ------------- Stockholders' equity: Common stock 154 154 Paid in capital 328,321 328,321 Officers' notes (9,173) (9,173) Distributions in excess of accumulated earnings (18,370) (18,370) ---------------- ------------- ------------ Total stockholders' equity 300,932 0 300,932 ---------------- ------------- ------------- Total liabilities and stockholders' equity $585,056 $60,600 $645,656 ================ ============= ============= 17 SUN COMMUNITIES, INC. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 (UNAUDITED) (A) Reflects the historical operations of Sun Communities, Inc. for the year ended December 31, 1996. (B) These adjustments are derived from audited Historical Summaries of Gross Income and Direct Operating Expenses for four manufactured housing communities the Company acquired for an aggregate purchase price of $36.3 million. (C) These adjustments reflect the unaudited gross income and direct operating expenses of eight manufactured housing communities the Company acquired in Florida (4), Texas (2), Indiana (1) and Michigan (1), for an aggregate purchase price of $33.5 million. The communities contained an aggregate of 2,809 sites at their respective acquisition dates, including 1,867 manufactured housing sites, 604 recreational vehicle sites and 338 undeveloped sites. (D) Reflects the adjustment necessary to reflect annual interest expense computed as follows: $8,200 Line of credit at 6.89% $565 $35,000 Senior Notes at 6.97% 2,440 $17,400 lease obligations at 6.1% 1,047 ------ $4,051 ====== (E) Reflects depreciation on the acquired communities. (F) Reflects the adjustment necessary to state minority interest at 12.4%. (G) Before extraordinary income. Page 17 of 19 pages
Sun Gross Income and Direct Operating Other Sun Communities, Inc. Expenses of Acquired Properties Pro Forma Communities, Inc. (A) (B) (C) Adjustments Pro Forma ----------------- -------------- --------------- ------------- ----------------- REVENUES (in thousands except per share data) Income from property $71,312 $4,392 $4,654 $80,358 Income from Sun Home Services, Inc. 506 506 Other income 1,381 1,381 -------- ------ ------ ------- ------- Total revenues 73,199 4,392 4,654 0 82,245 -------- ------ ------ ------- ------- EXPENSES Property operating and maintenance 15,970 1,345 1,651 18,966 Real estate taxes 5,654 226 371 6,251 General and administrative 3,458 3,458 Depreciation and amortization 14,887 2,321 (E) 17,208 Interest 11,277 4,051 (D) 15,328 -------- ------ ------ ------- ------- Total expenses 51,246 1,571 2,022 6,372 61,211 -------- ------ ------ ------- ------- Income before minority interests 21,953 2,821 2,632 (6,372) 21,034 Less income allocated to minority interests: Preferred OP Units 1,670 1,670 Common OP Units 2,473 (114)(F) 2,359 -------- ------ ------ ------- ------- Net income (G) $17,810 $2,821 $2,632 ($6,258) $17,005 ======== ====== ====== ======= ======= Net income per common share $1.24 Weighted average number of shares 13,733 outstanding 18 EXHIBIT INDEX Page 18 of 19 pages
Exhibit Number Description Filed Herewith ------- ----------- -------------- 23.1 Consent of Coopers & Lybrand L.L.P., X independent accountants
1 EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statements of Sun Communities, Inc. on Forms S-3 (File No. 33-95694; File No. 333-1822; File No. 333-2522; File No. 333-14595; File No. 333-36451; File No. 333-45273) and on Form S-8 (File No. 333-11923) of our reports dated January 9, 1998 on our audits of the Historical Summaries of Gross Income and Direct Operating Expenses of each of Willowbrook Place, Woodside Terrace, and White Oak Estates, and our report dated December 23, 1997 on our audit of the Historical Summaries of Gross Income and Direct Operating Expenses of Southfork Mobile Home Park, for the six months period ended June 30, 1997 and the year ended December 31, 1996, which reports are included in this Current Report on Form 8-K. Coopers & Lybrand L.L.P. - --------------------------- Coopers & Lybrand L.L.P. Detroit, Michigan March 13, 1998 Page 17 of 19 pages