1 FORM 10-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 1 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 1-12616 SUN COMMUNITIES, INC. (Exact name of registrant as specified in its charter) STATE OF MARYLAND 38-2730780 State of Incorporation I.R.S. Employer I.D. No. 31700 MIDDLEBELT ROAD SUITE 145 FARMINGTON HILLS, MICHIGAN 48334 (248) 932-3100 (Address of principal executive offices and telephone number) Securities Registered Pursuant to Section 12(b) of the Act: COMMON STOCK, PAR VALUE $.01 PER SHARE Securities Registered Pursuant to Section 12(g) of the Act: NONE 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. Yes X No ----- ----- 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 ----- ----- As of March 19, 2001, the aggregate market value of the Registrant's voting stock held by non-affiliates of the Registrant was approximately $513,193,961. As of March 19, 2001, there were 17,607,511 shares of the Registrant's common stock issued and outstanding. DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Registrant's definitive Proxy Statement to be filed for its 2001 Annual Meeting of Shareholders are incorporated by reference into Part III of this Report.
2 EXPLANATORY NOTE: This Amendment No. 1 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2000 (the "Form 10-K") is filed to amend Part IV, Item 14. The line item including depreciation and amortization was mistakenly omitted from the "Cash Flows from Operating Activities" section of the Consolidated Statement of Cash Flows found on page F-6 of the Form 10-K. The amounts reported for the second line item in Footnote 3 Notes and Other Receivables were in reverse order. In accordance with the rules and regulations of the Securities and Exchange Commission, the entire Item 14 is restated in this Amendment No. 1 to correct these errors. Other than these two changes, there have been no changes to this Item 14. Item 14 of the Form 10-K is hereby amended in its entirety to read as follows: PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) The following documents are filed herewith as part of this Form 10-K: (1) A list of the financial statements required to be filed as a part of this Form 10-K is shown in the "Index to the Consolidated Financial Statements and Financial Statement Schedule" filed herewith. (2) A list of the financial statement schedules required to be filed as a part of this Form 10-K is shown in the "Index to the Consolidated Financial Statements and Financial Statement Schedule" filed herewith. (3) A list of the exhibits required by Item 601 of Regulation S-K to be filed as a part of this Form 10-K is shown on the "Exhibit Index" filed herewith. (b) Reports on Form 8-K No Current Reports on Form 8-K were filed during the last fiscal quarter for the year ended December 31, 2000. 2
3 SUN COMMUNITIES, INC. INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS PAGES Report of Independent Accountants F-2 Financial Statements: Consolidated Balance Sheets as of December 31, 2000 and 1999 F-3 Consolidated Statements of Income for the Years Ended December 31, 2000, 1999 and 1998 F-4 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2000, 1999 and 1998 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998 F-6 Notes to Consolidated Financial Statements F-7 - F-15 Schedule III - Real Estate and Accumulated Depreciation F-16 - F-20 F-1
4 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Sun Communities, Inc.: In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, stockholders' equity and of cash flows present fairly, in all material respects, the financial position of Sun Communities, Inc. (the "Company") at December 31, 2000 and December 31, 1999, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 14(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Detroit, Michigan February 12, 2001 F-2
5 SUN COMMUNITIES, INC. CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2000 AND 1999 (AMOUNTS IN THOUSANDS EXCEPT FOR PER SHARE DATA) ASSETS 2000 1999 ------------ ------------ Investment in rental property, net $ 751,820 $ 755,138 Cash and cash equivalents 18,466 11,330 Notes and other receivables 156,349 101,158 Investment in and advances to affiliate 7,930 8,605 Other assets 32,063 27,801 ------------ ------------ Total assets $ 966,628 $ 904,032 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Line of credit $ 12,000 $ 47,000 Debt 452,508 354,564 Accounts payable and accrued expenses 16,304 17,616 Deposits and other liabilities 8,839 8,660 ------------ ------------ Total liabilities 489,651 427,840 ------------ ------------ Minority interests 140,943 137,834 ------------ ------------ Stockholders' equity: Preferred stock, $.01 par value, 10,000 shares authorized, none issued ___ ___ Common stock, $.01 par value, 100,000 shares authorized, 17,516 and 17,459 issued and outstanding in 2000 and 1999, respectively 175 174 Paid-in capital 393,771 393,360 Officers notes (11,257) (11,452) Unearned compensation (4,746) (5,459) Distributions in excess of accumulated earnings (41,688) (38,265) Treasury stock, at cost, 7 shares in 2000 (221) -- ------------- ------------ Total stockholders' equity 336,034 338,358 ------------ ------------ Total liabilities and stockholders' equity $ 966,628 $ 904,032 ============ ============ The accompanying notes are an integral part of the consolidated financial statements. F-3
6 SUN COMMUNITIES, INC. CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (AMOUNTS IN THOUSANDS EXCEPT FOR PER SHARE DATA) 2000 1999 1998 --------- --------- --------- REVENUES Income from property..........................................................$ 132,440 $ 125,424 $ 114,346 Other income.................................................................. 14,105 9,530 5,984 --------- --------- --------- Total revenues.............................................................. 146,545 134,954 120,330 --------- --------- --------- EXPENSES Property operating and maintenance............................................ 28,592 27,300 25,647 Real estate taxes............................................................. 9,115 8,888 8,728 Property management........................................................... 2,934 2,638 2,269 General and administrative.................................................... 4,079 3,682 3,339 Depreciation and amortization................................................. 30,671 28,551 24,961 Interest...................................................................... 29,651 27,289 23,987 --------- --------- --------- Total expenses.............................................................. 105,042 98,348 88,931 --------- --------- --------- Income before other, net and minority interests................................. 41,503 36,606 31,399 Other, net...................................................................... 4,801 829 655 --------- --------- --------- Income before minority interests................................................ 46,304 37,435 32,054 Less income allocated to minority interests: Preferred OP Units.......................................................... 7,826 3,663 2,505 Common OP Units............................................................. 5,184 4,683 3,453 --------- --------- --------- Net income......................................................................$ 33,294 $ 29,089 $ 26,096 ========= ========= ========= Earnings per common share: Basic.......................................................................$ 1.92 $ 1.69 $ 1.55 ========= ========= ========= Diluted.....................................................................$ 1.91 $ 1.68 $ 1.53 ========= ========= ========= Weighted average common shares outstanding: Basic....................................................................... 17,304 17,191 16,856 ========= ========= ========= Diluted..................................................................... 17,390 17,343 17,031 ========= ========= ========= The accompanying notes are an integral part of the consolidated financial statements. F-4
7 SUN COMMUNITIES, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (AMOUNTS IN THOUSANDS EXCEPT FOR PER SHARE DATA) DISTRIBUTION COMMON PAID IN UNEARNED IN EXCESS OF TREASURY STOCK CAPITAL COMPENSATION EARNINGS STOCK ---------- ----------- -------------- -------------- -------- Balance, January 1, 1998....................$ 166 $ 364,050 $ (25,663) Issuance of common stock, net............... 6 11,418 $ (5,302) Reclassification and conversion of minority interests....................... 13,980 Net income.................................. 26,096 Cash distributions declared of $1.94 per share................................ (32,778) --------- ----------- ------------- ------------- Balance, December 31, 1998.................. 172 389,448 (5,302) (32,345) Issuance of common stock, net............... 2 1,595 (157) Reclassification and conversion of minority interests....................... 2,317 Net income.................................. 29,089 Cash distributions declared of $2.02 per share................................ (35,009) --------- ----------- ------------- ------------- Balance, December 31, 1999.................. 174 393,360 (5,459) (38,265) Issuance of common stock, net............... 1 445 Amortization................................ 713 Treasury stock purchased, 7 shares.......... $ (221) Reclassification and conversion of minority interests....................... (34) Net income.................................. 33,294 Cash distributions declared of $2.10 per share................................ (36,717) --------- ----------- ------------- ------------- -------- Balance, December 31, 2000..................$ 175 $ 393,771 $ (4,746) $ (41,688) $ (221) ========= =========== ============= ============= ======= The accompanying notes are an integral part of the consolidated financial statements. F-5
8 SUN COMMUNITIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998 (AMOUNTS IN THOUSANDS) 2000 1999 1998 ----------- ----------- ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income................................................................$ 33,294 $ 29,089 $ 26,096 Adjustments to reconcile net income to cash provided by operating activities: Income allocated to minority interests................................. 5,184 4,683 3,453 Net gain from property dispositions.................................... (4,801) (1,781) (655) Depreciation and amortization.......................................... 30,671 28,551 24,961 Amortization of deferred financing costs............................... 943 865 681 Increase in other assets................................................... (7,480) (9,329) (4,449) Increase (decrease) in accounts payable and other liabilities.............. (1,133) 1,616 6,892 ----------- ----------- ------------ Net cash provided by operating activities.................................. 56,678 53,694 56,979 ----------- ----------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES Investment in rental properties............................................ (57,832) (67,588) (99,156) Proceeds related to property dispositions.................................. 34,460 36,720 20,773 Investment in notes receivable, net........................................ (46,577) (52,218) (32,523) Investment in and advances to affiliate.................................... 675 2,854 514 Officer note............................................................... 195 157 164 ----------- ----------- ------------ Net cash used in investing activities.................................. (69,079) (80,075) (110,228) ----------- ----------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds from issuance of common stock and operating partnership units, net................................................ 209 51,019 27,328 Borrowings (repayments) on line of credit, net............................. (35,000) 21,000 9,000 Proceeds from notes payable and other debt................................. 100,000 -- 65,000 Repayments on notes payable and other debt................................. (2,056) (1,741) (935) Payments for deferred financing costs...................................... (1,242) (1,533) (2,667) Distributions.............................................................. (42,374) (40,622) (37,087) ----------- ----------- ------------ Net cash provided by financing activities.............................. 19,537 28,123 60,639 ----------- ----------- ------------ Net increase in cash and cash equivalents................................. 7,136 1,742 7,390 Cash and cash equivalents, beginning of year.............................. 11,330 9,588 2,198 ----------- ----------- ------------ Cash and cash equivalents, end of year....................................$ 18,466 $ 11,330 $ 9,588 =========== =========== ============ SUPPLEMENTAL INFORMATION Cash paid for interest including capitalized amounts of $3,148, $2,230 and $1,045 in 2000, 1999 and 1998, respectively.................$ 31,882 $ 28,422 $ 23,517 Noncash investing and financing activities: Debt assumed for rental properties and other........................... -- 10,445 18,356 Capitalized lease obligations for rental properties and other.......... -- 10,605 9,479 Property acquired through the exchange of similar property............. -- 7,700 -- Common stock issued as unearned compensation........................... -- 720 5,631 Property acquired (sold) in satisfaction of note receivable............ (8,614) 4,400 -- Issuance of partnership units for rental properties and other ......... 3,564 -- 2,204 The accompanying notes are an integral part of the consolidated financial statements. F-6
9 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000, 1999 AND 1998 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: A. BUSINESS: Sun Communities, Inc. and its subsidiaries (the "Company") is a real estate investment trust ("REIT") which owns and operates or finances 109 manufactured housing communities located in 15 states concentrated principally in the Midwest and Southeast comprising approximately 38,282 developed sites and approximately 2,392 sites suitable for development. In addition, the Company owns four undeveloped properties comprised of approximately 1,856 sites planned for future development. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. B. PRINCIPLES OF CONSOLIDATION: The accompanying financial statements include the accounts of the Company and all majority-owned and controlled subsidiaries including Sun Communities Operating Limited Partnership (the "Operating Partnership"). The minority interests include Common Operating Partnership Units ("OP Units") which are convertible into an equivalent number of shares of the Company's common stock. Such conversion would have no effect on earnings per share since the allocation of earnings to an OP Unit is equivalent to earnings allocated to a share of common stock. Of the 20.2 million OP Units outstanding, the Company owns 17.5 million or 86.7 percent. The minority interests are adjusted to their relative ownership interest whenever OP Units or common stock are issued, converted or retired by reclassification to/from paid-in capital. Included in minority interests at December 31, 2000 and 1999 are 2 million Series A Perpetual Preferred OP Units ("Series A Units") issued at $25 per unit in September 1999 bearing an annual coupon rate of 8.875 percent. The PPOP Units may be called by the Company at par on or after September 29, 2004, have no stated maturity or mandatory redemption and are convertible into preferred stock under certain circumstances. Also included in minority interests are 1.3 million Preferred OP Units ("POP Units") issued at $27 per unit bearing an annual cumulative dividend of $2.43 and redeemable at par or convertible serially over a four year period beginning in January, 2003. The POP Units are convertible into 994,000 OP Units at prices up to $36.00 per share. At prices above $36.00 per share, the POP Units are convertible into OP Units based on a formula the numerator of which is $36.00 plus 25 percent of stock price appreciation above $36 per share. The denominator is the then stock price. The Company's stock price at December 31, 2000 was $33.50. In May 2000 and also included in minority interest, the Company issued 35,637 Series B Preferred OP Units ("Series B Units") at a $100 mandatory redemption price with interest rates ranging from 7.0 percent to 9.0 percent and a maturity of May 1, 2006. The Company is subject to earlier redemption of 10,000 Series B Units upon the request of the holder on May 1, 2003 or a complete redemption of all Series B Units on May 1, 2004 or 2005. F-7
10 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 2000, 1999 AND 1998 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED): C. RENTAL PROPERTY: Rental property is recorded at the lower of cost, less accumulated depreciation or fair value. Management evaluates the recoverability of its investment in rental property whenever events or changes in circumstances such as recent operating results, expected net operating cash flow and plans for future operations indicate that full asset recoverability is questionable. Recoverability of these assets is measured by a comparison of the carrying amount of such assets to the future undiscounted net cash flows expected to be generated by the assets. If such assets were deemed to be impaired as a result of this measurement, the impairment that would be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset as determined on a discounted net cash flow basis. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. Useful lives are 30 years for land improvements and buildings and 7 to 15 years for furniture, fixtures and equipment. Expenditures for ordinary maintenance and repairs are charged to operations as incurred and significant renovations and improvements, which improve and/or extend the useful life of the asset, are capitalized and depreciated over their estimated useful lives. Construction costs related to new community or expansion sites development including interest are capitalized until the property is substantially complete. D. CASH AND CASH EQUIVALENTS: The Company considers all highly liquid investments with an initial maturity of three months or less to be cash and cash equivalents. E. INVESTMENTS IN AND ADVANCES TO AFFILIATE: Sun Home Services ("SHS") provides home sales and other services to current and prospective tenants. Through the Operating Partnership, the Company owns 100 percent of the outstanding preferred stock of SHS, is entitled to 95 percent of the operating cash flow, and accounts for its investment utilizing the equity method of accounting. The common stock is owned by two officers of the Company and the estate of a former officer of the Company who collectively are entitled to receive 5 percent of the operating cash flow. F. REVENUE RECOGNITION: Rental income attributable to leases is recorded on a straight-line basis when earned from tenants. Leases entered into by tenants generally range from month-to-month to one year and are renewable by mutual agreement of the Company and resident or, in some cases, as provided by state statute. G. FAIR VALUE OF FINANCIAL INSTRUMENTS: The carrying value of financial instruments which includes cash and cash investments, mortgages and notes receivable and debt approximates fair value. Fair values have been determined through information obtained from market sources and management estimates. H. RECLASSIFICATIONS: Certain 1999 and 1998 amounts have been reclassified to conform with the 2000 financial statement presentation. Such reclassifications have no effect on results of operations as originally presented. F-8
11 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 2000, 1999 AND 1998 2. RENTAL PROPERTY (AMOUNTS IN THOUSANDS): AT DECEMBER 31 ------------------------ 2000 1999 -------- -------- Land.....................................................$ 76,120 $ 76,069 Land improvements and buildings.......................... 739,858 720,662 Furniture, fixtures, and equipment ...................... 17,498 16,943 Land held for future development......................... 12,042 17,046 Property under development............................... 21,859 16,976 -------- -------- 867,377 847,696 Less accumulated depreciation.......................(115,557) (92,558) -------- -------- $751,820 $755,138 ======== ======== Land improvements and buildings consist primarily of infrastructure, roads, landscaping, clubhouses, maintenance buildings and amenities. Included in rental property at December 31, 2000 and 1999 are net carrying amounts related to capitalized leases of $39.7 million and $40.8 million, respectively. During 2000, the Company acquired three manufactured housing communities comprising 659 developed sites for $21.1 million. During 1999, the Company acquired eight communities comprising 1,485 developed sites and 370 sites suitable for development for $32.0 million and three development communities comprising 1,538 sites, some of which were partially developed, for $9.5 million. These transactions have been accounted for as purchases, and the statements of income include the operations of the acquired communities from the dates of their respective acquisitions. As of December 31, 2000, in conjunction with a 1993 acquisition, the Company is obligated to issue $9.2 million of OP Units through 2009 based on the per share market value of the Company's stock on the issuance date. This obligation was accounted for as part of the purchase price of the original acquisition. 3. NOTES AND OTHER RECEIVABLES (AMOUNTS IN THOUSANDS): AT DECEMBER 31 --------------------------- 2000 1999 ----------- ----------- Mortgage notes receivable, primarily with minimum monthly interest payments at LIBOR based floating rates of approximately LIBOR + 3.0%, maturing at various dates from April 2001 through June 2012, collateralized by manufactured home communities. $ 60,491 $ 23,277 Note receivable, subordinated, collateralized by all assets of the borrower, bears interest at LIBOR + 2.35% and payable on demand 35,849 40,794 Note receivable, subordinated, bears interest at 9.75% and matures September 2005. 4,000 4,000 F-9
12 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED DECEMBER 31, 2000, 1999 AND 1998 3. NOTES AND OTHER RECEIVABLES (CONTINUED)(AMOUNTS IN THOUSANDS): AT DECEMBER 31 ------------------------- 2000 1999 --------- --------- Installment loans on manufactured homes with interest payable monthly at a weighted average interest rate and maturity of 11% and 22 years, respectively. 32,426 18,635 Other receivables 23,583 14,452 --------- --------- $ 156,349 $ 101,158 ========= ========= At December 31, 2000, the maturities of mortgage notes receivables are approximately as follows: 2001 - $13.3 million; 2002 - $18.5 million; 2003 - $11.1 million; after 2005 - $17.6 million. Officers' notes, presented as a reduction to stockholders' equity in the balance sheet, are 10 year, LIBOR + 1.75% notes, with a minimum and maximum interest rate of 6% and 9%, respectively, collateralized by 366,206 shares of the Company's common stock and 127,794 OP Units with substantial personal recourse. Interest income of $0.9 million, $0.8 million and $0.9 million has been recognized in 2000, 1999 and 1998, respectively. 4. DEBT (AMOUNTS IN THOUSANDS): AT DECEMBER 31 ------------------------------ 2000 1999 ---------- ---------- Collateralized term loan, interest at 7.01%, due September 9, 2007.........$ 43,393 $ 43,927 Senior notes, interest at 8.20%, due August 15, 2008....................... 100,000 -- Senior notes, interest at 7.375%, due May 1, 2001.......................... 65,000 65,000 Senior notes, interest at 7.625%, due May 1, 2003.......................... 85,000 85,000 Senior notes, interest at 6.97%, due December 3, 2007...................... 35,000 35,000 Senior notes, interest at 6.77%, due May 14, 2015, callable/redeemable May 16, 2005...................................... 65,000 65,000 Capitalized lease obligations, interest at 6.1%, $9.4 million due in March 2001, balance due through December 2003......................... 36,009 36,620 Mortgage notes, other...................................................... 23,106 24,017 ---------- ---------- $ 452,508 $ 354,564 ========== ========== The Company has a $125 million unsecured line of credit at LIBOR plus 1.0% maturing in January 2003, of which $113 million was available at December 31, 2000. The average interest rate of outstanding borrowings at December 31, 2000 was 7.06% following conversion to LIBOR in January 2001. F-10
13 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000, 1999 AND 1998 4. DEBT (CONTINUED) (AMOUNTS IN THOUSANDS): The term loan is collateralized by seven communities comprising approximately 3,400 sites. The capitalized lease obligations and mortgage notes are collateralized by thirteen communities comprising approximately 3,200 sites. At the lease expiration date of the capitalized leases the Company has the right and intends to purchase the properties for the amount of the then outstanding lease obligation. Annual payments under these capitalized lease obligations are $2.1 million in 2001 and 2002 and $0.8 million in 2003. At December 31, 2000, the maturities of debt, excluding the line of credit, during the next five years are approximately as follows: 2001 - $76.5 million; 2002 - $17.4 million; 2003 - $86.5 million; 2004 - $11.9 million; and 2005 - $1.3 million. 5. STOCK OPTIONS: Data pertaining to stock option plans are as follows: 2000 1999 1998 --------- --------- -------- Options outstanding, January 1............................... 1,121,000 1,055,600 965,900 Options granted.............................................. 17,500 102,000 162,500 Option price................................................. $35.37 $30.03-$32.96 $33.75-$34.13 Options exercised............................................ 16,667 35,099 66,800 Option price...............................................$28.64-$30.03 $22.75-$33.75 $20.00-$33.75 Options forfeited............................................ 12,583 1,501 6,000 Option price...............................................$30.03-$33.75 $33.75 $33.75-$34.91 Options outstanding, December 31............................. 1,109,250 (a) 1,121,000 1,055,600 Option price................................................. $20-$35.39 $20-$35.39 $20-$35.39 Options exercisable, December 31.................................827,329 (a) 709,811 601,410 (a) There are 273,400 options outstanding and exercisable which range from $20.00 - $27.99 with a weighted average life of 4.0 years related to the outstanding options. The weighted average exercise price for these outstanding and exercisable options is $22.81. There are 835,850 and 553,933 options outstanding and exercisable, respectively, which range from $28.00 - $35.99 with a weighted average life of 5.0 years related to the outstanding options. The weighted average exercise price for these outstanding and exercisable options is $31.08 and $30.29, respectively. At December 31, 2000, 509,904 shares of common stock were available for the granting of options. Stock option plans originally provided for the grant of up to 2,120,000 options. Options are granted at fair value and generally vest over a two-year period and may be exercised for 10 years after date of grant. In addition, the Company established a Long-Term Incentive Plan for certain employees granting up to 240,000 options in 1997, which become exercisable in equal installments in 2002-2004 based on corporate profit performance. The Company has opted to measure compensation cost utilizing the intrinsic value method. The fair value of each option grant was estimated as of the date of grant using the Black-Scholes option-pricing model with the following assumptions for options granted: F-11
14 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000, 1999 AND 1998 5. STOCK OPTIONS (CONTINUED): 2000 1999 1998 ------- ------- ---------- Estimated fair value per share of options granted during year.................$ 2.43 $ 2.43 $ 2.43 Assumptions: Annualized dividend yield..................................................... 7.1% 7.1% 7.0% Common stock price volatility................................................. 15.3% 15.3% 15.9% Risk-free rate of return...................................................... 6.4% 6.4% 5.4% Expected option term (in years)............................................... 6 6 4 If compensation cost for stock option grants had been recognized based on the fair value at the grant date, this would have resulted in net income of $33.1 million, $28.8 million and $25.8 million and basic net income per share of $1.91, $1.68 and $1.53 in 2000, 1999 and 1998, respectively. 6. STOCKHOLDERS' EQUITY: In April 1998, the Company declared a dividend of one Preferred Stock Purchase Right (Right) for each outstanding share of common stock. The Rights are not presently exercisable. Each Right entitles the holder, upon the occurrence of certain specified events, including a material change in the ownership of the Company, to purchase preferred stock and common stock, from the Company and/or from another person into which the Company is merged or which acquires control of the Company. The Rights, which were not given dividend accounting recognition due to the amount involved, may be generally redeemed by the Company at a price of $0.01 per Right or $0.2 million in total. The Rights expire on June 8, 2008. In December 1999, and June 1998, the Company issued restricted stock awards of 24,750 at $30.00 per share and 165,000 at $34.12 per share, respectively, to officers and certain employees which are being amortized over their five to ten year vesting period. Compensation cost recognized in income for these stock awards was $0.7 million, $0.6 million and $0.3 million in 2000, 1999 and 1998, respectively. In December 1998, the Company issued common stock and OP units aggregating $25.5 million to Directors, employees and consultants. The purchase was financed by personal bank loans guaranteed by the Company until the loans mature in January 2004. No compensation expense was recognized in respect to the guarantees as the fair value thereof was not material nor have there been any defaults. F-12
15 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000, 1999 AND 1998 7. OTHER INCOME (AMOUNTS IN THOUSANDS): The components of other income are as follows for the years ended December 31, 2000, 1999 and 1998: 2000 1999 1998 ---------- ----------- ---------- Interest income $ 9,385 $ 6,345 $ 3,125 Income from affiliate 607 1,726 2,147 Other income 4,113 1,459 712 ---------- --------- ---------- $ 14,105 $ 9,530 $ 5,984 ========== ========= ========== Other, net presented in the Consolidated Statements of Income primarily relates to net gains from property dispositions. 8. INCOME TAXES (AMOUNTS IN THOUSANDS): The Company has elected to be taxed as a real estate investment trust ("REIT") as defined under Section 856(c) of the Internal Revenue Code of 1986, as amended. In order for the Company to qualify as a REIT, at least 95 percent of the Company's gross income in any year must be derived from qualifying sources. As a REIT, the Company generally will not be subject to U.S. Federal income taxes at the corporate level if it distributes at least 95 percent of its REIT ordinary taxable income to its stockholders. REIT's are also subject to a number of other organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, its taxable income will be subject to U.S. Federal income tax at regular corporate rates (including any applicable alternative minimum tax). Even if the Company qualifies as a REIT, it may be subject to certain state and local income taxes and to U.S. Federal income and excise taxes on its undistributed income. Dividend payout on taxable income available to common stockholders: 2000 1999 1998 --------- ----------- ---------- Taxable income available to common stockholders $ 14,683 $ 14,681 $ 14,087 Less tax gain on disposition of properties (13) (5,943) (5,519) --------- ----------- ---------- Taxable operating income available to common stockholders $ 14,670 $ 8,738 $ 8,568 ========= =========== ========== Total dividends paid to common stockholders $ 36,717 $ 35,009 $ 32,778 ========= =========== ========== F-13
16 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000, 1999 AND 1998 8. INCOME TAXES (CONTINUED)(AMOUNTS IN THOUSANDS): 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, 2000, 1999 and 1998, distributions paid per share were taxable as follows: 2000 1999 1998 ------------------ ---------------------- -------------------- AMOUNT PERCENTAGE AMOUNT PERCENTAGE AMOUNT PERCENTAGE Ordinary income $ 1.30 62.0% $ 1.29 64.0% $ 1.27 65.6% Return of capital .80 38.0 .39 19.4 .38 19.8 Capital gains -- -- .28 13.6 .11 5.6 Unrecaptured SEC. 1250 gain -- -- .06 3.0 .18 9.0 ------ ------ ------ ------ ------ ------ $ 2.10 100.0% $ 2.02 100.0% $ 1.94 100.0% ====== ====== ====== ====== ====== ====== 9. EARNINGS PER SHARE (AMOUNTS IN THOUSANDS): 2000 1999 1998 --------- -------- ------- Earnings used for basic and diluted earnings per share computation $33,294 $ 29,089 $26,096 ======= ======== ======= Total shares used for basic earnings per share 17,304 17,191 16,856 Dilutive securities: Stock options and other 86 152 175 ------- -------- ------- Total weighted average shares used for diluted earnings per share computation 17,390 17,343 17,031 ======= ======== ======= Diluted earnings per share reflect the potential dilution that would occur if dilutive securities were exercised or converted into common stock. Convertible POP Units are excluded from the computations as their inclusion would have an anti-dilutive effect on earnings per share in 2000, 1999 and 1998. F-14
17 SUN COMMUNITIES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2000, 1999 AND 1998 10. QUARTERLY FINANCIAL DATA (UNAUDITED): The following unaudited quarterly amounts are in thousands, except for per share amounts: FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER MARCH 31 JUNE 30 SEPT. 30 DEC. 31 -------- ------- -------- ------- 2000 Total revenues...................................................$ 36,033 $ 36,064 $ 37,013 $ 37,435 Operating income (a).............................................$ 24,823 $ 25,380 $ 25,549 $ 26,073 Income before other, net and allocation to minority interests.........................................$ 10,430 $ 10,396 $ 10,200 $ 10,477 Net income (b)...................................................$ 7,357 $ 7,305 $ 11,117 $ 7,515 Weighted average common shares outstanding....................... 17,286 17,310 17,312 17,308 Earnings per common share-basic..................................$ 0.43 $ 0.42 $ 0.64 $ 0.43 FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER MARCH 31 JUNE 30 SEPT. 30 DEC. 31 ----------- --------- -------- -------- 1999 Total revenues.................................................$ 33,000 $ 32,761 $ 34,133 $ 35,060 Operating income (a)...........................................$ 22,425 $ 22,517 $ 23,157 $ 24,347 Income before other, net and allocation to minority interests........................................$ 8,938 $ 8,727 $ 8,727 $ 10,214 Net income (b).................................................$ 7,135 $ 6,964 $ 6,985 $ 8,005 Weighted average common shares outstanding..................... 17,113 17,160 17,223 17,269 Earnings per common share-basic................................$ 0.42 $ 0.40 $ 0.41 $ 0.46 (a) Operating income is defined as total revenues less property operating and maintenance expense, real estate tax expense, property management and general and administrative expenses. Operating income is a measure of the performance of the operations of the properties before the effects of depreciation, amortization and interest expense. Operating income is not necessarily an indication of the performance of the Company or a measure of liquidity. (b) Net income includes net gains on the disposition of properties of $182 in the fourth quarter of 2000, $4,619 in the third quarter of 2000 and $829 in the fourth quarter of 1999. F-15
18 SUN COMMUNITIES, INC. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 2000 (AMOUNTS IN THOUSANDS) COST CAPITALIZED SUBSEQUENT TO INITIAL COST ACQUISITION TO COMPANY IMPROVEMENTS ----------------------- ------------------- BUILDING BUILDING AND AND PROPERTY NAME LOCATION ENCUMBRANCE LAND FIXTURES LAND FIXTURES - --------------------- ----------------- ------------- --------- ---------- ------- --------- Academy/ Westpointe Canton, MI - $ 1,485 $ 14,336 - - Allendale Allendale, MI - 393 3,684 - $ 3,480 Alpine Grand Rapids, MI - 729 6,692 - 2,731 Apple Creek Amelia, OH (3) 543 5,480 - (23) Arbor Terrace Bradenton, FL - 481 4,410 - 232 Ariana Village Lakeland, FL - 240 2,195 - 434 Autumn Ridge Ankeny, IO - 890 8,054 - 696 Bedford Hills Battle Creek, MI (1) 1,265 11,562 - 281 Bell Crossing Clarksville, TN - 717 1,916 - 1,084 Bonita Lake Bonita Springs, FL - 285 2,641 - 102 Boulder Ridge Pflugerville, TX - 1,000 500 $ 518 9,404 Branch Creek Austin, TX - 796 3,716 - 4,267 Brentwood Kentwood, MI - 385 3,592 - 165 Brookside Village Goshen, IN - 260 1,080 386 7,071 Byrne Hill Village Toledo, OH - 383 3,903 - 56 Byron Center Byron Center, MI - 257 2,402 (4) 131 Candlelight Village Chicago Heights, IL - 600 5,623 - 441 Candlewick Court Owosso, MI - 125 1,900 132 972 Carrington Pointe Ft. Wayne, IN - 1,076 3,632 - 3,117 Casa Del Valle Alamo, TX - 246 2,316 - 292 Catalina Middletown, OH - 653 5,858 - 671 Chain O'Lakes Grand Island, FL - 551 5,003 - 178 Chisholm Point Pflugerville, TX - 609 5,286 - 1,568 Clearwater Village South Bend, IN - 80 1,270 61 1,772 Cobus Green Elkhart, IN - 762 7,037 - 555 College Park Estates Canton, MI - 75 800 174 4,468 Continental Estates Davison, MI - 1,625 16,581 150 1,309 Continental North Davison, MI - (6) (6) - 3,276 Country Acres Cadillac, MI - 380 3,495 - 174 Country Meadows Flat Rock, MI - 924 7,583 296 9,054 GROSS AMOUNT CARRIED AT DECEMBER 31, 2000 --------------------- BUILDING DATE OF AND ACCUMULATED CONSTRUCTION(C) PROPERTY NAME LAND FIXTURES TOTAL DEPRECIATION ACQUISITION(A) - --------------------- --------- ---------- ----------- ------------ -------------- Academy/ Westpointe $ 1,485 $ 14,336 $ 15,821 $ 240 2000(A) Allendale 393 7,164 7,557 905 1996(A) Alpine 729 9,423 10,152 1,232 1996(A) Apple Creek 543 5,457 6,000 252 1999(A) Arbor Terrace 481 4,642 5,123 723 1996(A) Ariana Village 240 2,629 2,869 559 1994(A) Autumn Ridge 890 8,750 9,640 1,292 1996(A) Bedford Hills 1,265 11,843 13,108 1,816 1996(A) Bell Crossing 717 3,000 3,717 123 1999(A) Bonita Lake 285 2,743 3,028 424 1996(A) Boulder Ridge 1,518 9,904 11,422 802 1998(C) Branch Creek 796 7,983 8,779 1,116 1995(A) Brentwood 385 3,757 4,142 592 1996(A) Brookside Village 646 8,151 8,797 1,281 1985(A) Byrne Hill Village 383 3,959 4,342 211 1999(A) Byron Center 253 2,533 2,786 404 1996(A) Candlelight Village 600 6,064 6,664 932 1996(A) Candlewick Court 257 2,872 3,129 675 1985(A) Carrington Pointe 1,076 6,749 7,825 642 1997(A) Casa Del Valle 246 2,608 2,854 333 1997(A) Catalina 653 6,529 7,182 1,527 1993(A) Chain O'Lakes 551 5,181 5,732 867 1996(A) Chisholm Point 609 6,854 7,463 1,155 1995(A) Clearwater Village 141 3,042 3,183 577 1986(A) Cobus Green 762 7,592 8,354 1,787 1993(A) College Park Estates 249 5,268 5,517 1,128 1978(A) Continental Estates 1,775 17,890 19,665 2,780 1996(A) Continental North - 3,276 3,276 107 1996(A) Country Acres 380 3,669 4,049 561 1996(A) Country Meadows 1,220 16,637 17,857 2,841 1994(A) F-16
19 SUN COMMUNITIES, INC. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION, CONTINUED DECEMBER 31, 2000 (AMOUNTS IN THOUSANDS) COST CAPITALIZED SUBSEQUENT TO INITIAL COST ACQUISITION TO COMPANY IMPROVEMENTS ----------------------- ------------------- BUILDING BUILDING AND AND PROPERTY NAME LOCATION ENCUMBRANCE LAND FIXTURES LAND FIXTURES - --------------------- ----------------- ------------- --------- ---------- ------- --------- Countryside Village Perry, MI (1) 275 3,920 185 1,845 Creekwood Meadows Burton, MI - 808 2,043 404 6,053 Cutler Estates Grand Rapids, MI (1) 822 7,604 - 196 Deerfield Run Anderson, MI 1,700 990 1,607 - 1,493 Desert View Village West Wendover, NV - 1,180 - 423 4,432 Eagle Crest Firestone, CO - 4,073 150 45 6,905 Edwardsville Edwardsville, KS (1) 425 8,805 541 2,158 Fisherman's Cove Flint, MI - 380 3,438 - 436 Forest Meadows Philomath, OR - 1,031 2,064 - 75 Four Seasons Elkhart, IN - 500 4,800 - - Goldcoaster Homestead, FL - 446 4,234 124 1,389 Golden Lakes Plant City, FL - 1,092 7,161 - 1,000 Grand Grand Rapids, MI - 374 3,587 - 49 Groves Ft. Myers, FL - 249 2,396 - 465 Hamlin Webberville, MI - 125 1,675 536 961 Holiday Village Elkhart, IN - 100 3,207 143 1,111 Holly Forest Holly Hill, FL - 920 8,376 - 220 Indian Creek Ft. Myers Beach, FL - 3,832 34,660 - 700 Island Lake Merritt Island, FL - 700 6,431 - 221 Kensington Meadows Lansing, MI - 250 2,699 - 3,416 Kenwood La Feria, TX - 145 1,857 - (23) King's Court Traverse City, MI - 1,473 13,782 - 1,173 King's Lake Debary, FL - 280 2,542 - 1,899 King's Pointe Winter Haven, FL - 262 2,359 - 392 Lafayette Place Warren, MI - 669 5,979 - 592 Lake Juliana Auburndale, FL - 335 2,848 - 636 Lake San Marino Naples, FL - 650 5,760 - 314 Leesburg Landing Leesburg, FL - 50 429 921 416 GROSS AMOUNT CARRIED AT DECEMBER 31, 2000 --------------------- BUILDING DATE OF AND ACCUMULATED CONSTRUCTION(C) PROPERTY NAME LAND FIXTURES TOTAL DEPRECIATION ACQUISITION(A) - --------------------- --------- ---------- ----------- ------------ -------------- Countryside Village 460 5,765 6,225 1,233 1987(A) Creekwood Meadows 1,212 8,096 9,308 636 1997(C) Cutler Estates 822 7,800 8,622 1,205 1996(A) Deerfield Run 990 3,100 4,090 114 1999(A) Desert View Village 1,603 4,432 6,035 75 1998(C) Eagle Crest 4,118 7,055 11,173 - 1998(C) Edwardsville 966 10,963 11,929 2,449 1987(A) Fisherman's Cove 380 3,874 4,254 907 1993(A) Forest Meadows 1,031 2,139 3,170 98 1999(A) Four Seasons 500 4,800 5,380 81 2000(A) Goldcoaster 570 5,623 6,193 621 1997(A) Golden Lakes 1,092 8,161 9,253 1,898 1993(A) Grand 374 3,636 4,010 460 1996(A) Groves 249 2,861 3,110 387 1997(A) Hamlin 661 2,636 3,297 556 1984(A) Holiday Village 243 4,318 4,561 1,023 1986(A) Holly Forest 920 8,596 9,516 1,012 1997(A) Indian Creek 3,832 35,360 39,192 5,506 1996(A) Island Lake 700 6,652 7,352 1,237 1995(A) Kensington Meadows 250 6,115 6,365 835 1995(A) Kenwood 145 1,834 1,979 87 1999(A) King's Court 1,473 14,955 16,428 2,253 1996(A) King's Lake 280 4,441 4,721 791 1994(A) King's Pointe 262 2,751 3,013 592 1994(A) Lafayette Place 669 6,571 7,240 566 1998(A) Lake Juliana 335 3,484 3,819 737 1994(A) Lake San Marino 650 6,074 6,724 940 1996(A) Leesburg Landing 971 845 1,816 119 1996(A) F-17
20 SUN COMMUNITIES, INC. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION, CONTINUED DECEMBER 31, 2000 (AMOUNTS IN THOUSANDS) COST CAPITALIZED SUBSEQUENT TO INITIAL COST ACQUISITION TO COMPANY IMPROVEMENTS ----------------------- ------------------- BUILDING BUILDING AND AND PROPERTY NAME LOCATION ENCUMBRANCE LAND FIXTURES LAND FIXTURES - --------------------- ----------------- ------------- --------- ---------- ------- --------- Liberty Farms Valparaiso, IN - 66 1,201 116 1,757 Lincoln Estates Holland, MI - 455 4,201 - 261 Maple Grove Estates Dorr, MI - 15 210 19 266 Maplewood Lawrence, IN - 280 2,122 - 678 Meadow Lake Estates White Lake, MI - 1,188 11,498 126 1,396 Meadowbrook Estates Monroe, MI - 431 3,320 379 5,644 Meadowbrook Village Tampa, FL - 519 4,728 - 256 Meadows Nappanee, IN - 300 2,300 (13) 2,193 Meadowstream Village Sodus, MI - 100 1,175 109 1,282 Oakwood Village Miamisburg, OH 363 1,964 6,401 - 4,559 Orange Tree Orange City, FL - 283 2,530 15 651 Orchard Lake Milford, OH (3) 395 4,064 - (37) Paradise Chicago Heights, IL - 723 6,638 - 459 Parkwood Grand Blanc, MI - 477 4,279 - 553 Pecan Branch Georgetown, TX - 1,379 - 331 1,886 Pin Oak Parc St. Louis, MO - 1,038 3,250 467 4,392 Pine Hills Middlebury, IN - 72 544 58 1,593 Pine Ridge Petersburg, VA - 405 2,397 - 1,147 Presidential Hudsonville, MI - 680 6,314 - 1,059 Richmond Richmond, MI (2) 501 2,040 - 289 Royal Country Miami, FL (1) 2,290 20,758 - 557 Saddle Oak Club Ocala, FL - 730 6,743 - 523 Scio Farms Ann Arbor, MI - 2,300 22,659 - 3,345 Sherman Oaks Jackson, MI (1) 200 2,400 240 3,333 Siesta Bay Ft. Myers Beach, FL - 2,051 18,549 - 456 Silver Star Orlando, FL - 1,067 9,685 - 250 Snow to Sun Weslaco, TX 95 190 2,143 15 706 Southfork Belton, MO - 1,000 9,011 - 968 St. Clair Place St. Clair, MI (2) 501 2,029 - 307 GROSS AMOUNT CARRIED AT DECEMBER 31, 2000 --------------------- BUILDING DATE OF AND ACCUMULATED CONSTRUCTION(C) PROPERTY NAME LAND FIXTURES TOTAL DEPRECIATION ACQUISITION(A) - --------------------- --------- ---------- ----------- ------------ -------------- Liberty Farms 182 2,958 3,140 662 1985(A) Lincoln Estates 455 4,462 4,917 685 1996(A) Maple Grove Estates 34 476 510 109 1979(A) Maplewood 280 2,800 3,080 644 1989(A) Meadow Lake Estates 1,314 12,894 14,208 2,912 1994(A) Meadowbrook Estates 810 8,964 9,774 2,089 1986(A) Meadowbrook Village 519 4,984 5,503 1,163 1994(A) Meadows 287 4,493 4,780 958 1987(A) Meadowstream Village 209 2,457 2,666 566 1984(A) Oakwood Village 1,964 10,960 12,924 744 1998(A) Orange Tree 298 3,181 3,479 632 1994(A) Orchard Lake 395 4,027 4,422 211 1999(A) Paradise 723 7,097 7,820 1,070 1996(A) Parkwood 477 4,832 5,309 1,118 1993(A) Pecan Branch 1,710 1,886 3,596 - 1999(C) Pin Oak Parc 1,505 7,642 9,147 1,077 1994(A) Pine Hills 130 2,137 2,267 474 1980(A) Pine Ridge 405 3,544 3,949 795 1986(A) Presidential 680 7,373 8,053 1,104 1996(A) Richmond 501 2,329 2,830 207 1998(A) Royal Country 2,290 21,315 23,605 5,030 1994(A) Saddle Oak Club 730 7,266 7,996 1,500 1995(A) Scio Farms 2,300 26,004 28,304 4,587 1995(A) Sherman Oaks 440 5,733 6,173 1,317 1986(A) Siesta Bay 2,051 19,005 21,056 2,948 1996(A) Silver Star 1,067 9,935 11,002 1,534 1996(A) Snow to Sun 205 2,849 3,054 331 1997(A) Southfork 1,000 9,979 10,979 839 1997(A) St. Clair Place 501 2,336 2,837 245 1998(A) F-18
21 SUN COMMUNITIES, INC. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION, CONTINUED DECEMBER 31, 2000 (AMOUNTS IN THOUSANDS) COST CAPITALIZED SUBSEQUENT TO INITIAL COST ACQUISITION TO COMPANY IMPROVEMENTS ----------------------- ------------------- BUILDING BUILDING AND AND PROPERTY NAME LOCATION ENCUMBRANCE LAND FIXTURES LAND FIXTURES - --------------------- ----------------- ------------- --------- ---------- ------- --------- Stonebridge Richfield Twp., MI 1,119 2,044 - 180 597 Sun Villa Reno, NV 6,839 2,385 11,773 - 473 Sunset Ridge Portland, MI - 2,044 - - 2,983 Timber Ridge Ft. Collins, CO - 990 9,231 - 611 Timberbrook Bristol, IN (1) 490 3,400 101 4,840 Timberline Estates Grand Rapids, MI - 536 4,867 - 492 Town and Country Traverse City, MI - 406 3,736 - 201 Valley Brook Indianapolis, IN - 150 3,500 1,277 8,562 Village Trails Howard City, MI 426 988 1,472 - 593 Water Oak Country Club Est. Lady Lake, FL - 2,503 17,478 - 2,781 Westbrook Toledo, OH (2) 1,110 10,462 - 16 West Glen Village Indianapolis, IN - 1,100 10,028 - 669 White Lake White Lake, MI - 673 6,179 - 2,373 White Oak Mt. Morris, MI - 782 7,245 112 3,057 Willowbrook Toledo, OH (2) 781 7,054 - 331 Windham Hills Jackson, MI - 2,673 2,364 - 4,515 Woodhaven Place Wood Haven, MI (2) 501 4,541 - 677 Woodlake Estates Yoder, IN - 632 3,674 - 1,834 Woodland Park Estates Eugene, OR 7,784 1,593 14,398 - 246 Woods Edge West Lafayette, IN - 100 2,600 3 6,730 Woodside Terrace Holland, OH (2) 1,064 9,625 - 1,193 Worthington Arms Delaware, OH - 376 2,624 - 1,057 Corporate Headquarters Farmington Hills, MI - - - - 4,513 --------- ---------- ------- --------- $ 85,772 $ 586,480 $ 8,570 $ 186,555 ========= ========== ======= ========= GROSS AMOUNT CARRIED AT DECEMBER 31, 2000 --------------------- BUILDING DATE OF AND ACCUMULATED CONSTRUCTION(C) PROPERTY NAME LAND FIXTURES TOTAL DEPRECIATION ACQUISITION(A) - --------------------- --------- ---------- ----------- ------------ -------------- Stonebridge 2,224 597 2,821 - 1998(C) Sun Villa 2,385 12,246 14,631 1,016 1998(A) Sunset Ridge 2,044 2,983 5,027 - 1998(C) Timber Ridge 990 9,842 10,832 1,502 1996(A) Timberbrook 591 8,240 8,831 1,742 1987(A) Timberline Estates 536 5,359 5,895 1,159 1994(A) Town and Country 406 3,937 4,343 612 1996(A) Valley Brook 1,427 12,062 13,489 2,452 1989(A) Village Trails 988 2,065 3,053 154 1998(A) Water Oak Country Club Est. 2,503 20,259 22,762 4,614 1993(A) Westbrook 1,110 10,478 11,588 540 1999(A) West Glen Village 1,100 10,697 11,797 2,297 1994(A) White Lake 673 8,552 9,225 911 1997(A) White Oak 894 10,302 11,196 1,049 1997(A) Willowbrook 781 7,385 8,166 623 1997(A) Windham Hills 2,673 6,879 9,552 459 1998(A) Woodhaven Place 501 5,218 5,719 450 1998(A) Woodlake Estates 632 5,508 6,140 375 1998(A) Woodland Park Estates 1,593 14,644 16,237 1,239 1998(A) Woods Edge 103 9,330 9,433 1,261 1985(A) Woodside Terrace 1,064 10,818 11,882 1,236 1997(A) Worthington Arms 376 3,681 4,057 852 1990(A) Corporate Headquarters - 4,513 4,513 1,161 Various --------- --------- --------- --------- $ 94,342(4) $ 773,035(5) $ 867,377 $ 115,557 ========= ========= ========= ========= (1) These communities collateralize $43.4 million of secured debt. (2) These communities are financed by $36 million of collateralized lease obligations. (3) These communities collateralize $4.8 million of secured debt. (4) Includes $6.2 million of land in property under development in Footnote 2 "Rental Property" to the Company's Consolidated Financial Statements included elsewhere herein. (5) Includes $15.7 million of property under development in Footnote 2 "Rental Property" to the Company's Consolidated Financial Statements included elsewhere herein. (6) The initial cost for this property was included in the initial cost reported for Continental Estates. F-19
22 SUN COMMUNITIES, INC. SCHEDULE III REAL ESTATE AND ACCUMULATED DEPRECIATION, CONTINUED DECEMBER 31, 2000 (AMOUNTS IN THOUSANDS) The change in investment in real estate for the years ended December 31, 2000, 1999 and 1998 is as follows: 2000 1999 1998 --------- --------- --------- Balance, beginning of year $ 847,696 $ 803,152 $ 684,821 Community and land acquisitions, including immediate improvements 24,339 41,083 102,248 Community expansion and development 30,795 42,480 26,874 Improvements, other 4,595 7,022 6,193 Dispositions and other (40,048) (46,041) (16,984) --------- --------- --------- Balance, end of year $ 867,377 $ 847,696 $ 803,152 ========= ========= ========= The change in accumulated depreciation for the years ended December 31, 2000, 1999 and 1998 is as follows: 2000 1999 1998 --------- -------- -------- Balance, beginning of year $ 92,558 $ 70,940 $ 50,084 Depreciation for the period 26,170 25,112 22,765 Dispositions and other (3,171) (3,494) (1,909) --------- -------- -------- Balance, end of year $ 115,557 $ 92,558 $ 70,940 ========= ======== ======== F-20
23 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. Date: June 29, 2001 SUN COMMUNITIES, INC. By /s/ Gary A. Shiffman ------------------------------------ Gary A. Shiffman, President
24 EXHIBIT INDEX EXHIBIT METHOD OF NUMBER DESCRIPTION FILING - ------ ----------- ------ 2.1 Form of Sun Communities, Inc.'s Common Stock Certificate (1) 3.1 Amended and Restated Articles of Incorporation of Sun Communities, Inc. (1) 3.2 Bylaws of Sun Communities, Inc. (3) 4.1 Indenture, dated as of April 24, 1996, among Sun Communities, Inc., Sun Communities (4) Operating Limited Partnership and Bankers Trust Company, as Trustee 4.2 Form of Note for the 2001 Notes (4) 4.3 Form of Note for the 2003 Notes (4) 4.4 First Supplemental Indenture, dated as of August 20, 1997, by and between Sun Communities (9) Operating Limited Partnership and Bankers Trust Company, as Trustee 4.5 Form of Medium-Term Note (Floating Rate) (9) 4.6 Form of Medium-Term Note (Fixed Rate) (9) 4.7 Articles Supplementary of Board of Directors of Sun Communities, Inc. Designating a Series (11) of Preferred Stock and Fixing Distribution and other Rights in such Series 4.8 Articles Supplementary of Board of Directors of Sun Communities, Inc. Designating a Series (13) of Preferred Stock 10.1 Second Amended and Restated Agreement of Limited Partnership of Sun Communities Operating (8) Limited Partnership 10.2 Second Amended and Restated 1993 Stock Option Plan# (12) 10.3 Amended and Restated 1993 Non-Employee Director Stock Option Plan# (8) 10.4 Form of Stock Option Agreement between Sun Communities, Inc. and certain directors, officers (1) and other individuals# 10.5 Form of Non-Employee Director Stock Option Agreement between Sun Communities, Inc. and (5) certain directors# 10.6 Employment Agreement between Sun Communities, Inc. and Gary A. Shiffman# (8) 10.7 Senior Unsecured Line of Credit Agreement with Lehman Brothers Holdings Inc. (9) 10.8 Amended and Restated Loan Agreement between Sun Communities Funding Limited Partnership and (9) Lehman Brothers Holdings Inc. 10.9 Amended and Restated Loan Agreement among Miami Lakes Venture Associates, Sun Communities (9) Funding Limited Partnership and Lehman Brothers Holdings Inc. 10.10 Form of Indemnification Agreement between each officer and director of Sun (9)
25 EXHIBIT METHOD OF NUMBER DESCRIPTION FILING - ------ ----------- ------ Communities, Inc. and Sun Communities, Inc. 10.11 Loan Agreement among Sun Communities Operating Limited Partnership, Sea Breeze Limited (9) Partnership and High Point Associates, LP. 10.12 Option Agreement by and between Sun Communities Operating Limited Partnership and Sea Breeze (9) Limited Partnership 10.13 Option Agreement by and between Sun Communities Operating Limited Partnership and High Point (9) Associates, LP 10.14 $1,022,538.12 Promissory Note from Gary A. Shiffman to Sun Communities Operating Limited (7) Partnership 10.15 $1,022,538.13 Promissory Note from Gary A. Shiffman to Sun Communities Operating Limited (7) Partnership 10.16 $6,604,923.75 Promissory Note from Gary A. Shiffman to Sun Communities Operating Limited (7) Partnership 10.17 Stock Pledge Agreement between Gary A. Shiffman and Sun Communities Operating Limited (7) Partnership for 94,570 shares of Common Stock 10.18 Stock Pledge Agreement between Gary A. Shiffman and Sun Communities Operating Limited (7) Partnership for 305,430 shares of Common Stock 10.19 $ 1,300,195.40 Promissory Note from Gary A. Shiffman to Sun Communities Operating Limited (9) Partnership 10.20 $ 1,300,195.40 Promissory Note from Gary A. Shiffman to Sun Communities Operating Limited (9) Partnership 10.21 Stock Pledge Agreement between Gary A. Shiffman and Sun Communities Operating Limited (9) Partnership with respect to 80,000 shares of Common Stock 10.22 Employment Agreement between Sun Communities, Inc. and Jeffrey P. Jorissen# (11) 10.23 Long Term Incentive Plan (9) 10.24 Restricted Stock Award Agreement between Sun Communities, Inc. and Gary A. Shiffman, dated (11) June 5, 1998# 10.25 Restricted Stock Award Agreement between Sun Communities, Inc. and Jeffrey P. Jorissen, (11) dated June 5, 1998# 10.26 Restricted Stock Award Agreement between Sun Communities, Inc. and Jonathan M. Colman, dated (11) June 5, 1998# 10.27 Restricted Stock Award Agreement between Sun Communities, Inc. and Brian W. Fannon, dated (11) June 5, 1998# 10.28 Sun Communities, Inc. 1998 Stock Purchase Plan# (11) 10.29 Employment Agreement between Sun Home Services, Inc. and Brian Fannon# (11)
26 EXHIBIT METHOD OF NUMBER DESCRIPTION FILING - ------ ----------- ------ 10.30 Facility and Guaranty Agreement among Sun Communities, Inc., Sun Communities Operating (11) Limited Partnership, Certain Subsidiary Guarantors and First National Bank of Chicago, dated December 10, 1998 10.31 Rights Agreement between Sun Communities, Inc. and State Street Bank and Trust Company, (10) dated April 24, 1998 10.32 Employment Agreement between Sun Communities, Inc. and Brian W. Fannon# (11) 10.33 Contribution Agreement, dated as of September 29, 1999, by and among the Company, the (13) Operating Partnership, Belcrest Realty Corporation and Belair Real Estate Corporation 10.34 One Hundred Third Amendment to Second Amended and Restated Limited Partnership Agreement of (13) the Operating Partnership 10.35 Subordinated Loan Agreement dated September 30, 1997 between Bingham Financial Services (14) Corporation ("Bingham") and the Company (assigned to Sun Communities Operating Limited Partnership (the "Operating Partnership") as of December 31, 1997) 10.36 Term Promissory Note dated September 30, 1997 executed by Bingham in favor of the Company (14) (assigned to the Operating Partnership as of December 31, 1997) 10.37 Loan Agreement dated March 1, 1998 between Bingham and the Operating Partnership (15) 10.38 Demand Promissory Note dated March 1, 1998 executed by Bingham in favor of the Operating (15) Partnership 10.39 Loan Agreement dated March 30, 1999 between Bingham and the Operating Partnership (16) 10.40 Demand Promissory Note dated March 30, 1999 executed by Bingham in favor of the Operating (16) Partnership 10.41 First Amendment dated June 11, 1999 to Subordinated Loan Agreement dated September 30, 1997 (16) between Bingham and the Operating Partnership 10.42 First Amendment dated June 11, 1999 to Loan Agreement dated March 1, 1998 between Bingham (16) and the Operating Partnership 10.43 Amended Demand Promissory Note dated June 11, 1999 executed by Bingham in favor of the (16) Operating Partnership 10.44 Security Agreement dated December 13, 1999 between the Operating Partnership and Bingham (17) 10.45 Second Amendment to Loan Agreement dated December 13, 1999 between Bingham and the Operating (18) Partnership 10.46 Second Amended Demand Promissory Note dated December 13, 1999 executed by Bingham in favor (17) of the Operating Partnership 10.47 Membership Pledge Agreement dated December 13, 1999 between Bingham (18)
27 EXHIBIT METHOD OF NUMBER DESCRIPTION FILING - ------ ----------- ------ and the Operating Partnership 10.48 Amended and Restated Security Agreement dated December 13, 1999 between Bingham and the (18) Operating Partnership 10.49 Stock Pledge Agreement dated December 13, 1999 between Bingham and the Operating Partnership (18) 10.50 Supplemental Agreement Regarding Assignment of Notes, Loan Agreements and Security Agreements (18) as Collateral Security dated December 13, 1999 between Bingham and the Operating Partnership 10.51 Supplemental Agreement Regarding Assignment of Note, Loan Agreement and Security Agreement (19) as Collateral Security dated December 13, 1999 between Bingham and the Operating Partnership 10.52 Supplemental Agreement Regarding Assignment of Note and Security Agreement as Collateral (18) Security dated March 16, 2000 between Bingham and the Operating Partnership 10.53 Stock Pledge Agreement dated October 20, 2000 between Bingham and the Operating Partnership (18) 10.55 Supplemental Agreement Regarding Assignment of Notes, Loan Agreements and Security (19) Agreements as Collateral Security dated December 13, 1999 between Bingham and the Operating Partnership. 10.54 Amendment to Amended and Restated Security Agreement dated October 20, 2000 between Bingham (18) and the Operating Partnership 10.55 12.1 Computation of Ratio of Earnings to Fixed Charges and Ratio Earnings to Combined Fixed (20) Charges and Preferred Dividends 21 List of Subsidiaries of Sun Communities, Inc. (20) 23 Consent of PricewaterhouseCoopers LLP, independent accountants (21) - --------------------------- (1) Incorporated by reference to Sun Communities, Inc.'s Registration Statement No. 33-69340. (2) Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K dated March 20, 1996. (3) Incorporated by reference to Sun Communities, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1995. (4) Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K dated April 24, 1996. (5) Incorporated by reference to Sun Communities, Inc.'s Registration Statement No. 33-80972. (6) Incorporated by reference to Sun Communities, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1994.
28 (7) Incorporated by reference to Sun Communities, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 1995. (8) Incorporated by reference to Sun Communities, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1996. (9) Incorporated by reference to Sun Communities, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997. (10) Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K dated April 24, 1998. (11) Incorporated by reference to Sun Communities, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1998. (12) Incorporated by reference to Sun Communities, Inc.'s Proxy Statement, dated April 20, 1999 (13) Incorporated by reference to Sun Communities, Inc.'s Current Report on Form 8-K dated October 14, 1999. (14) Incorporated by reference to Bingham Financial Services Corporation's Registration Statement on Form S-1, No. 333-34453. (15) Incorporated by reference to Bingham Financial Services Corporation's Annual Report on Form 10-K for the year ended September 30, 1998, No. 0-23381. (16) Incorporated by reference to Bingham Financial Services Corporation's Annual Report on Form 10-K for the year ended September 30, 1999, No. 0-23381. (17) Incorporated by reference to Bingham Financial Services Corporation's Quarterly Report on Form 10-Q for the quarter ended June 30, 2000, No. 0-23381. (18) Incorporated by reference to Sun Communities, Inc.'s Registration Statement on Form S-3, Amendment No. 1, No. 333-54718. (19) Incorporated by reference to Sun Communities Operating Limited Partnership's Annual Report on Form 10-K for the year ended December 31, 2000, No. 333-2522-01. (20) Previously filed. (21) Filed herewith. # Management contract or compensatory plan or arrangement required to be identified by Form 10-K Item 14.
1 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the registration statements of Sun Communities, Inc. on Form S-3 (File No. 333-54718, File No. 333-86237, File No. 333-64271, File No. 333-36451, File No. 333-14595, File No. 333-45273, File No. 333-72461, File No. 333-30462 and File No. 333-1822) and on Form S-8 (File No. 333-11923 and File No. 333-82479) of our report dated February 12, 2001 relating to the consolidated financial statements and financial statement schedule of Sun Communities, Inc. in this Annual Report on Form 10-K/A. PRICEWATERHOUSECOOPERS LLP Detroit, Michigan June 29, 2001