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6 | SUN LAKES LIFESTYLES | APRIL 2021 | Narrative for January Financials Net Income for the month of January was $153,306 and was $87,015 better than budget. Positive variance was due to lower than budget HOA operations utility expense for electricity, cable, and water along with lower than Budget Reserve Spending. The electricity variance was due to a credit from the City of Banning and Cable was due to the change over to the new Spectrum contract. All other expense categories were on or better than budget, other than Golf operation spending that was slightly worse than budget and Administration, which was slightly over budget due to labor costs. Net Food and Beverage operations were slightly worse than budget due to continued closure of the restaurant and lounge. Of concern is the continued shutdown of the restaurant and lounge and that actual food and labor costs as a percentage of sales exceeded budgeted labor and food percentages by about 80 percent. Food and beverage operations are being monitored on a weekly basis. Reserve and CIP Revenue reporting for January was based on FASB 606 revenue recognition rules. This resulted in a reported negative variance in revenue which matched the negative reduction in Reserve Expense. It is expected in the near future, that the Association will stop the FASB 606 reporting and revert to recognizing revenue assessments as they are billed, and recognizing Reserve and CIP expenses as they are incurred. Balance Sheet remained strong in January with total assets increasing from 13,135,969 to 13,738,979, primarily due to increased cash and investments. Operating cash at month end was $923,659 versus Current Liabilities and Accrued Payroll of 727,552 CONSOLIDATED INCOME STATEMENT - ACTUAL VS BUDGET MONTH ENDING JAN. 31, 2021

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