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| SUN LAKES LIFESTYLES | JUNE 2023 | 7 The income statement for the operating activities is separated by business components: HOA, Golf, Restaurant & Lounge. In March, there was a surplus of $123,927 and year-to-date of $343,700. The primary drivers of the year-to-date surplus are underbudget labor costs and underbudget golf course maintenance. The first quarter of the year is the best part of the year for cash deposits. This is because some members pay their full year HOA dues in the first quarter and most golfers purchase their annual membership in January. As shown in the graphic below, at the end of March 2023 the HOA's Operating Fund had cash of $664,455 and items that should be received in cash of $534,250 ($1,198,705 total) and outstanding bills of $635,017. The situation was very similar in 2022 as seen in the graphic for March of 2022. However, by Dec. 31, 2022 outstanding bills exceeded cash and receivables by $130,691 ($1,011,733 minus $881,042). The Operating Fund cash balance is lower than it should be relative to the monthly expenses of the HOA. Our HOA's Operating Fund monthly expenses are approximately $1,000,000. The recommended cash reserve should be two to three times monthly expenses or a minimum of $2,000,000. At the end of December 2018, the Operating Fund cash balance was $2,242,000. Several factors, including losses in Food & Beverage and day-to- day operations, caused the decrease in Operating Fund cash. The Master Board is looking to reduce the losses in the Food & Beverage operation including expansion of the Lounge. A Town Hall meeting to present preliminary plans for a Lounge expansion was held on April 19. The Restaurant design consultant, engaged by the Board, presented his recommended design for the Lounge expansion. The expansion plan presented was well received by those who attended the Town Hall. The Board has given the designer the go-ahead to prepare drawings and other information needed to get construction bids. ~ Gary Burkel Treasurer's Report: March 2023 Financial Statements * The Operating Fund is used to manage daily operations of the HOA. It does not include restricted cash held in the Reserve and Replacement Fund or the Capital Fund. ** Accounts receivable should be collected in subsequent month. SUN LAKES COUNTRY CLUB HOA OPERATING FUND* AVAILABLE CASH AND ACCOUNTS RECEIVABLE ** (BLUE) COMPARED TO OUTSTANDING BILLS (ORANGE) SUMMARY OF FINANCIAL ACTIVITY BY DEPARTMENT THROUGH MARCH 31, 2023 * Positive because loss year-to-date is less than budgeted loss year-to-date. ** Restaurant & Lounge combined. *** Calculation of the amount of the year-to-date net compares to the annual budget. For example, the year-to-date loss in the Restaurant & Lounge is 48% of the annual budgeted loss.

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