UMH Properties (UMH) 8-K Results of Operations and Financial Condition

Table of Contents

	Page
Financial Highlights	3
Consolidated Balance Sheets	4
Consolidated Statements of Income (Loss)	5
Consolidated Statements of Cash Flows	6
Reconciliation of Net Income (Loss) to Adjusted EBITDA and Net Loss Attributable to Common Shareholders to FFO, Core FFO and Normalized FFO	7
Market Capitalization, Debt and Coverage Ratios	8
Debt Analysis	9
Debt Maturity	10
Property Summary and Snapshot	11
Same Property Statistics	12
Acquisition Summary and Property Portfolio	13
Definitions	14
Press Release Dated May 9, 2018	15

Certain information in this Supplemental Information Package contain Non-GAAP financial measures. These Non-GAAP financial measures are REIT industry financial measures that are not calculated in accordance with accounting principles generally accepted in the United States of America. Please see page 14 for a definition of these Non-GAAP financial measures and page 7 for the reconciliation of certain captions in the Supplemental Information Package to the statement of operations as reported in the Company’s filings with the SEC on Form 10-Q.

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 2 

Financial Highlights

(unaudited)

	Three Months Ended
	3/31/2018			3/31/2017
Operating Information
Number of Communities		112			106
Number of Sites		20,015			19,333
Rental and Related Income	$	27,270,477		$	24,530,355
Community Operating Expenses	$	12,754,816		$	11,480,359
Community NOI	$	14,515,661		$	13,049,996
Expense Ratio		46.8	%		46.8	%
Sales of Manufactured Homes	$	2,525,487		$	1,918,194
Number of Homes Sold		54			43
Number of Rentals Added		165			243
Net Income (Loss)	$	(22,208,337	)	$	2,285,546
Net Loss Attributable to Common Shareholders	$	(27,154,510	)	$	(1,504,201	)
Adjusted EBITDA	$	14,958,509		$	12,976,439
FFO	$	(19,544,171	)	$	5,060,417
Core FFO	$	6,354,648		$	5,060,417
Normalized FFO	$	6,334,541		$	5,028,526
Shares Outstanding and Per Share Data
Weighted Average Shares Outstanding Basic and Diluted		35,907,090			29,954,773
Net Loss Attributable to Common Shareholders per Share - Basic and Diluted	$	(0.76	)	$	(0.05	)
FFO per Share - Diluted	$	(0.54	)	$	0.17
Core FFO per Share - Diluted	$	0.18		$	0.17
Normalized FFO per Share - Diluted	$	0.18		$	0.17
Dividends per Common Share	$	0.18		$	0.18
Balance Sheet
Total Assets	$	813,387,119		$	725,782,363
Total Liabilities	$	366,838,552		$	400,854,409
Market Capitalization
Total Debt, Net of Unamortized Debt Issuance Costs	$	353,699,718		$	387,375,362
Equity Market Capitalization	$	486,932,441		$	466,623,210
Series A Preferred Stock	$	-0-		$	91,595,000
Series B Preferred Stock	$	95,030,000		$	95,030,000
Series C Preferred Stock	$	143,750,000		$	-0-
Series D Preferred Stock	$	50,000,000		$	-0-
Total Market Capitalization	$	1,129,412,159		$	1,040,623,572

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 3 

Consolidated Balance Sheets

	March 31, 2018			December 31, 2017
	(unaudited)
ASSETS
Investment Property and Equipment
Land	$	61,239,644		$	61,239,644
Site and Land Improvements		465,133,352			463,242,075
Buildings and Improvements		23,027,199			22,963,926
Rental Homes and Accessories		224,242,140			216,992,988
Total Investment Property		773,642,335			764,438,633
Equipment and Vehicles		17,437,910			16,874,760
Total Investment Property and Equipment		791,080,245			781,313,393
Accumulated Depreciation		(173,889,571	)		(166,444,512	)
Net Investment Property and Equipment		617,190,674			614,868,881
Other Assets
Cash and Cash Equivalents		25,951,970			23,242,090
Marketable Securities at Fair Value		113,343,772			132,964,276
Inventory of Manufactured Homes		18,981,697			17,569,365
Notes and Other Receivables, net		25,809,308			25,451,053
Prepaid Expenses and Other Assets		4,499,430			3,457,083
Land Development Costs		7,610,268			6,328,578
Total Other Assets		196,196,445			209,012,445
TOTAL ASSETS	$	813,387,119		$	823,881,326
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Mortgages Payable, net of Unamortized Debt Issuance Costs	$	303,317,181		$	304,895,117
Other Liabilities
Accounts Payable		3,119,246			2,960,739
Loans Payable, net of Unamortized Debt Issuance Costs		50,382,537			84,704,487
Accrued Liabilities and Deposits		4,772,792			4,977,886
Tenant Security Deposits		5,246,796			5,127,633
Total Other Liabilities		63,521,371			97,770,745
Total Liabilities		366,838,552			402,665,862
COMMITMENTS AND CONTINGENCIES
Shareholders’ Equity:
Series B - 8.0% Cumulative Redeemable Preferred Stock, par value $0.10 per share: 4,000,000 shares authorized; 3,801,200 shares issued and outstanding as of March 31, 2018 and December 31, 2017		95,030,000			95,030,000
Series C- 6.75% Cumulative Redeemable Preferred Stock, par value $0.10 per Share; 5,750,000 shares authorized, issued and outstanding as of March 31, 2018 and December 31, 2017		143,750,000			143,750,000
Series D - 6.375% Cumulative Redeemable Preferred Stock, par value $0.10 per share, 2,300,000 shares authorized; 2,000,000 and -0- shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively		50,000,000			-0-
Common Stock – $0.10 par value per share: 111,363,800 and 113,663,800 shares authorized; 36,311,144 and 35,488,068 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively		3,631,114			3,548,807
Excess Stock – $0.10 par value per share: 3,000,000 shares authorized; no shares issued or outstanding as of March 31, 2018 and December 31, 2017		-0-			-0-
Additional Paid-In Capital		154,805,246			168,034,868
Accumulated Other Comprehensive Income		-0-			11,519,582
Accumulated Deficit		(667,793	)		(667,793	)
Total Shareholders’ Equity		446,548,567			421,215,464
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	813,387,119		$	823,881,326

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 4 

Consolidated Statements of Income (Loss)

(unaudited)

	Three Months Ended
	3/31/2018			3/31/2017
INCOME:
Rental and Related Income	$	27,270,477		$	24,530,355
Sales of Manufactured Homes		2,525,487			1,918,194
TOTAL INCOME		29,795,964			26,448,549
EXPENSES:
Community Operating Expenses		12,754,816			11,480,359
Cost of Sales of Manufactured Homes		1,980,171			1,503,209
Selling Expenses		804,072			759,379
General and Administrative Expenses		2,358,556			2,202,302
Depreciation Expense		7,594,634			6,540,238
TOTAL EXPENSES		25,492,249			22,485,487
OTHER INCOME (EXPENSE):
Interest Income		470,230			473,359
Dividend and Other Investment Income (Loss), net		(23,453,572	)		1,883,131
Other Income		67,463			48,104
Interest Expense		(3,580,468	)		(4,057,730	)
TOTAL OTHER INCOME (EXPENSE)		(26,496,347	)		(1,653,136	)
Income (Loss) before Loss on Sales of Investment Property and Equipment		(22,192,632	)		2,309,926
Loss on Sales of Investment Property and Equipment		(15,705	)		(24,380	)
NET INCOME (LOSS)		(22,208,337	)		2,285,546
Less: Preferred Dividends		4,946,173			3,789,747
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(27,154,510	)	$	(1,504,201	)

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 5 

Consolidated Statements of Cash Flows

(unaudited)

	Three Months Ended
	3/31/2018			3/31/2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)	$	(22,208,337	)	$	2,285,546
Non-Cash Items Included in Net Income (Loss):
Depreciation		7,594,634			6,540,238
Amortization of Financing Costs		154,881			174,787
Stock Compensation Expense		282,062			169,377
Provision (Benefit) for Uncollectible Notes and Other Receivables		(294,405	)		218,530
Gain on Sales of Marketable Securities, net		(20,107	)		(31,891	)
Decrease in Fair Value of Marketable Securities		25,898,819			-0-
Loss on Sales of Investment Property and Equipment		15,705			24,380
Changes in Operating Assets and Liabilities:
Inventory of Manufactured Homes		(1,412,332	)		(555,802	)
Notes and Other Receivables, net of Notes Acquired with Acquisitions		(63,850	)		(46,954	)
Prepaid Expenses and Other Assets		270,173			1,461,008
Accounts Payable		158,507			802,082
Accrued Liabilities and Deposits		(205,094	)		218,439
Tenant Security Deposits		119,163			366,593
Net Cash Provided by Operating Activities		10,289,819			11,626,333
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Manufactured Home Communities		-0-			(36,824,379	)
Purchase of Investment Property and Equipment		(10,468,059	)		(11,846,814	)
Proceeds from Sales of Investment Property and Equipment		535,927			522,436
Additions to Land Development Costs		(1,281,690	)		(692,389	)
Purchase of Marketable Securities		(6,526,883	)		(2,145,267	)
Proceeds from Sales of Marketable Securities		268,675			1,368,888
Net Cash Used in Investing Activities		(17,472,030	)		(49,617,525	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Mortgages		-0-			14,250,000
Net (Payments) Proceeds on Short Term Borrowings		(34,305,218	)		23,601,802
Principal Payments of Mortgages		(1,714,549	)		(1,852,336	)
Financing Costs on Debt		(35,000	)		(109,868	)
Proceeds from Issuance of Preferred Stock, net of Offering Costs		48,247,280			-0-
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments		9,357,099			13,772,576
Proceeds from Exercise of Stock Options		133,920			2,231,032
Preferred Dividends Paid		(4,680,547	)		(3,789,747	)
Common Dividends Paid, net of Reinvestments		(5,798,374	)		(4,735,323	)
Net Cash Provided by Financing Activities		11,204,611			43,368,136
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		4,022,400			5,376,944
CASH, CASH EQUIVALENTS AND RESTRICTED CASH – BEGINNING OF PERIOD		27,891,249			9,349,489
CASH, CASH EQUIVALENTS AND RESTRICTED CASH – END OF PERIOD	$	31,913,649		$	14,726,433

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 6 

Reconciliation of Net Income (Loss) to Adjusted EBITDA and Net Loss Attributable

to Common Shareholders to FFO, Core FFO and Normalized FFO

(unaudited)

	Three Months Ended
	3/31/2018			3/31/2017
Reconciliation of Net Income (Loss) to Adjusted EBITDA
Net Income (Loss)	$	(22,208,337	)	$	2,285,546
Interest Expense		3,580,468			4,057,730
Franchise Taxes		92,925			92,925
Depreciation Expense		7,594,634			6,540,238
Decrease in Fair Value of Marketable Securities		25,898,819			-0-
Adjusted EBITDA	$	14,958,509		$	12,976,439
Reconciliation of Net Loss Attributable to Common Shareholders to Funds from Operations
Net Loss Attributable to Common Shareholders	$	(27,154,510	)	$	(1,504,201	)
Depreciation Expense		7,594,634			6,540,238
Loss on Sales of Depreciable Assets		15,705			24,380
Funds from Operations (“FFO”)		(19,544,171	)		5,060,417
Adjustments:
Decrease in Fair Value of Marketable Securities		25,898,819			-0-
Core Funds from Operations (“Core FFO”)		6,354,648			5,060,417
Adjustments:
Gain on Sales of Marketable Securities, net		(20,107	)		(31,891	)
Normalized Funds From Operations
(“Normalized FFO”)	$	6,334,541		$	5,028,526

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 7 

Market Capitalization, Debt and Coverage Ratios

(unaudited)

	Three Months Ended						Year Ended
	3/31/2018			3/31/2017			12/31/2017
Shares Outstanding		36,311,144			30,678,712			35,488,068
Market Price Per Share	$	13.41		$	15.21		$	14.90
Equity Market Capitalization	$	486,932,441		$	466,623,210		$	528,772,213
Total Debt		353,699,718			387,375,362			389,599,604
Preferred		288,780,000			186,625,000			238,780,000
Total Market Capitalization	$	1,129,412,159		$	1,040,623,572		$	1,157,151,817
Total Debt	$	353,699,718		$	387,375,362		$	389,599,604
Less: Cash and Cash Equivalents		(25,951,970	)		(8,306,625	)		(23,242,090	)
Net Debt		327,747,748			379,068,737			366,357,514
Less: Marketable Securities at Fair Value (“Securities”)		(113,343,772	)		(107,516,027	)		(132,964,276	)
Net Debt Less Securities	$	214,403,976		$	271,552,710		$	233,393,238
Interest Expense	$	3,580,468		$	4,057,730		$	15,876,972
Capitalized Interest		307,197			113,630			500,859
Preferred Dividends		4,946,173			3,789,747			16,844,812
Total Fixed Charges	$	8,833,838		$	7,961,107		$	33,222,643
Adjusted EBITDA	$	14,958,509		$	12,976,439		$	56,347,752
Debt and Coverage Ratios
Net Debt / Total Market Capitalization		29.0	%		36.4	%		31.7	%
Net Debt Plus Preferred / Total Market Capitalization		54.6	%		54.4	%		52.3	%
Net Debt Less Securities / Total Market Capitalization		19.0	%		26.1	%		20.2	%
Net Debt Less Securities Plus Preferred / Total Market Capitalization		44.6	%		44.0	%		40.8	%
Interest Coverage		3.8x			3.1x			3.4x
Fixed Charge Coverage		1.7x			1.6x			1.7x
Net Debt / Adjusted EBITDA		5.5x			7.3x			6.5x
Net Debt Less Securities / Adjusted EBITDA		3.6x			5.2x			4.1x
Net Debt Plus Preferred / Adjusted EBITDA		10.3x			10.9x			10.7x
Net Debt Less Securities Plus Preferred / Adjusted EBITDA		8.4x			8.8x			8.4x

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 8 

Debt Analysis

(unaudited)

	Three Months Ended
	3/31/2018			3/31/2017			12/31/2017
Debt Outstanding
Mortgages Payable:
Fixed Rate Mortgages(1)	$	306,746,237		$	308,690,220		$	308,444,180
Variable Rate Mortgages		-0-			271,427			16,606
Total Mortgages BeforeUnamortized Debt Issuance Costs		306,746,237			308,961,647			308,460,786
Unamortized Debt Issuance Costs		(3,429,056	)		(3,510,687	)		(3,565,669	)
Mortgages, Net of Unamortized Debt Issuance Costs	$	303,317,181		$	305,450,960		$	304,895,117
Loans Payable:
Unsecured Line of Credit	$	15,000,000		$	35,000,000		$	35,000,000
Other Loans Payable		35,460,606			46,995,241			49,765,824
Total Loans BeforeUnamortized Debt Issuance Costs		50,460,606			81,995,241			84,765,824
Unamortized Debt Issuance Costs		(78,069	)		(70,839	)		(61,337	)
Loans, Net of Unamortized Debt Issuance Costs	$	50,382,537		$	81,924,402		$	84,704,487
Total Debt, Net of Unamortized Debt Issuance Costs	$	353,699,718		$	387,375,362		$	389,599,604
% Fixed/Floating
Fixed		87.7	%		80.4	%		80.1	%
Floating		12.3	%		19.6	%		19.9	%
Total		100.0	%		100.0	%		100.0	%
Weighted Average Interest Rates(2)
Mortgages Payable		4.24	%		4.36	%		4.24	%
Loans Payable		3.32	%		3.14	%		3.14	%
Total Average		4.11	%		4.10	%		4.01	%

Notes:

(1) Includes a variable rate mortgage with a balance of $-0-, $10,420,552 and $-0- as of March 31, 2018, March 31, 2017 and December 31, 2017, respectively, which has been effectively fixed at an interest rate of 3.89% with an interest rate swap agreement.

(2) Weighted average interest rates do not include the effect of unamortized debt issuance costs.

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 9 

Debt Maturity

(unaudited)

As of 03/31/18:
Fiscal Year Ended	Mortgages		Loans			Total		% of Total
2018	$	-0-	$	3,809,403		$	3,809,403		1.1	%
2019		2,567,109		4,534,941			7,102,050		2.0	%
2020		12,042,945		19,617,836	(1)		31,660,781		8.9	%
2021		2,184,884		524,190			2,709,074		0.8	%
2022		20,784,009		360,622			21,144,631		5.9	%
Thereafter		269,167,290		21,613,614			290,780,904		81.3	%
Total Debt Before Unamortized Debt Issuance Cost		306,746,237		50,460,606			357,206,843		100.0	%
Unamortized Debt Issuance Cost		3,429,056		78,069			3,507,125
Total Debt, Net of Unamortized Debt Issuance Costs	$	303,317,181	$	50,382,537		$	353,699,718

Notes:

(1) Includes $15 million balance outstanding on the Company’s Line of Credit due March 2020, with an additional one year option.

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 10 

Property Summary and Snapshot

(unaudited)

	3/31/2018			3/31/2017			Change
Communities		112			106			5.7	%
Developed Sites		20,015			19,333			3.5	%
Occupied		16,325			15,472			5.5	%
Occupancy %(1)		81.9	%		80.7	%		120 bps
Total Rentals		5,772			4,902			17.7	%
Occupied Rentals		5,465			4,594			19.0	%
Rental Occupancy %		94.7	%		93.7	%		100 bps
Monthly Rent Per Site	$	434		$	424			2.4	%
Monthly Rent Per Home Rental Including Site	$	732		$	712			2.8	%

State	Number		Total Acreage		Developed Acreage		Vacant Acreage		Total Sites		Occupied Sites		Occupancy Percentage			Monthly Rent Per Site		Total Rentals		Occupied Rentals		Rental Occupancy Percentage			Monthly Rent Per Home Rental
			(2)				(2)						(1)												(3)
Indiana		11		816		685		131		3,219		2,546		79.1	%	$	406		1,128		1,091		96.7	%	$	729
Maryland		1		77		10		67		63		58		92.1	%	$	478		-0-		-0-		N/A			N/A
Michigan		2		68		68		-0-		354		269		76.0	%	$	437		166		162		97.6	%	$	724
New Jersey		4		349		187		162		1,005		958		95.3	%	$	614		38		37		97.4	%	$	944
New York		7		617		308		309		1,144		942		82.3	%	$	514		289		274		94.8	%	$	862
Ohio		32		1,475		1,065		410		5,098		4,074		79.9	%	$	368		1,428		1,357		95.0	%	$	667
Pennsylvania		48		2,087		1,728		359		7,341		5,880		80.1	%	$	445		1,914		1,761		92.0	%	$	755
Tennessee		7		413		321		92		1,791		1,598		89.2	%	$	449		809		783		96.8	%	$	741
Total as of March 31, 2018		112		5,902		4,372		1,530		20,015		16,325		81.9	%	$	434		5,772		5,465		94.7	%	$	732

Notes:

(1) The 136 Sites at Memphis Blues are not included in the calculation of occupancy.

(2) Total and Vacant Acreage of 220 for the Mountain View Estates property is included in the above summary.

(3) Includes home and site rent charges.

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 11 

Same Property Statistics  

(unaudited)

	For Three Months Ended
	3/31/2018		3/31/2017		Change		% Change
Community Net Operating Income
Rental and RelatedIncome	$	25,174,039	$	23,637,476	$	1,536,563		6.5	%
Community OperatingExpenses		11,188,703		10,365,903		822,800		7.9	%
Community NOI	$	13,985,336	$	13,271,573	$	713,763		5.4	%

	As of
	3/31/2018			3/31/2017			Change
Other Information
Total Sites		17,890			17,891			0.0	%
Occupied Sites		14,886			14,637			1.7	%
Occupancy %		83.2	%		81.8	%		140 bps
Number of Properties		101			101			N/A
Total Rentals		5,458			4,781			14.2	%
Occupied Rentals		5,186			4,504			15.1	%
Rental Occupancy		95.0	%		94.2	%		80 bps
Monthly Rent Per Site	$	441		$	427			3.3	%
Monthly Rent Per Home Rental Including Site	$	729		$	712			2.4	%

Notes:

Same Property includes all properties owned as of January 1, 2017, with the exception of Memphis Blues.

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 12 

Acquisition Summary
At Acquisition:
Year of Acquisition	Number of Communities		Sites		Occupied Sites		Occupancy %			Price		Total Acres
2015		10		2,774		1,764		64	%	$	81,217,000		717
2016		3		289		215		74	%	$	7,277,000		219
2017		11		1,997		1,333		67	%	$	63,290,000		602

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 13 

Definitions

Investors and analysts following the real estate industry utilize funds from operations (“FFO”), core funds from operations (“Core FFO”), normalized funds from operations (“Normalized FFO”), community NOI, same property NOI, and earnings before interest, taxes, depreciation, amortization and acquisition costs (“Adjusted EBITDA”), variously defined, as supplemental performance measures. While the Company believes net income (loss) available to common stockholders, as defined by accounting principles generally accepted in the United States of America (U.S. GAAP), is the most appropriate measure, it considers Community NOI, Same Property NOI, Adjusted EBITDA, FFO, Core FFO and Normalized FFO, given their wide use by and relevance to investors and analysts, appropriate supplemental performance measures. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of U.S. GAAP depreciation and amortization of real estate assets. Core FFO reflects the same assumptions as FFO except that it also adjusts for the effects of acquisitions costs, costs of early extinguishment of debt, change in the fair value of marketable securities and costs associated with the redemption of preferred stock. Normalized FFO reflects the same assumptions as Core FFO except that it also adjusts for gains and losses realized on marketable securities investments and certain one-time charges. Community NOI and Same Property NOI provides a measure of rental operations, and does not factor in depreciation and amortization and non-property specific expenses such as general and administrative expenses. Adjusted EBITDA provides a tool to further evaluate the ability to incur and service debt and to fund dividends and other cash needs. In addition, Community NOI, Same Property NOI, Adjusted EBITDA, FFO, Core FFO and Normalized FFO are commonly used in various ratios, pricing multiples, yields and returns and valuation of calculations used to measure financial position, performance and value.

As used herein, the Company calculates FFO, as defined by The National Association of Real Estate Investment Trusts (“NAREIT”), to be equal to net income (loss) applicable to common shareholders, as defined by U.S. GAAP, excluding extraordinary items as defined by U.S. GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization. FFO includes gains and losses realized on securities investments.

Core FFO is calculated as FFO plus costs of extinguishment of debt, change in the fair value of marketable securities and costs associated with the redemption of preferred stock.

Normalized FFOis calculated as Core FFO excluding gains and losses realized on marketable securities investments and certain one-time charges.

FFO per Diluted Common Share, Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share is calculated using diluted weighted shares outstanding of 36,195,000 shares for the three months ended March 31, 2018, and 30,427,000 the three months ended March 31, 2017. Common stock equivalents resulting from stock options in the amount of 288,000 shares for the three months ended March 31, 2018, and 472,000 shares for the three months ended March 31, 2017, are included in the diluted weighted shares outstanding. Common stock equivalents were excluded from the computation of the Diluted Net Loss per Share as their effect would be anti-dilutive.

Community NOI is calculated as rental and related income less community operating expenses such as real estate taxes, repairs and maintenance, community salaries, utilities, insurance and other expenses. Community NOI excludes realized gains (losses) on securities transactions.

Same Property NOI is calculated as Community NOI, using all properties owned as of January 1, 2017, with the exception of Memphis Blues.

Adjusted EBITDA is calculated as net income plus interest expense, franchise taxes, depreciation, amortization and the change in the fair value of marketable securities.

Community NOI, Same Property NOI, Adjusted EBITDA, FFO, Core FFO and Normalized FFO do not represent cash generated from operating activities in accordance with U.S. GAAP and are not necessarily indicative of cash available to fund cash needs, including the repayment of principal on debt and payment of dividends and distributions. Community NOI, Same Property NOI, Adjusted EBITDA, FFO, Core FFO and Normalized FFO should not be considered as substitutes for net income applicable to common shareholders (calculated in accordance with U.S. GAAP) as a measure of results of operations, or cash flows (calculated in accordance with U.S. GAAP) as a measure of liquidity. Community NOI, Same Property NOI, Adjusted EBITDA, FFO, Core FFO and Normalized FFO as currently calculated by the Company may not be comparable to similarly titled, but variously calculated, measures of other REITs.

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 14 

Press Release Dated May 9, 2018

FOR IMMEDIATE RELEASE	May 9, 2018
	Contact: Nelli Madden
	732-577-9997

UMH PROPERTIES, INC. REPORTS RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2018

FREEHOLD, NJ, May 9, 2018........ UMH Properties, Inc. (NYSE:UMH) reported Total Income for the quarter ended March 31, 2018 of $29,796,000 as compared to $26,449,000 for the quarter ended March 31, 2017, representing an increase of 13%. Net Loss Attributable to Common Shareholders amounted to $27,155,000 or $0.76 per diluted share for the quarter ended March 31, 2018 as compared to $1,504,000 or $0.05 per diluted share for the quarter ended March 31, 2017. This increase was due to the change in fair value of our marketable securities. Starting in 2018, unrealized gains or losses in value on securities holding are included in our operating numbers. Previously, these unrealized gains or losses were recognized in “Accumulated Other Comprehensive Income” on our Balance Sheet. At quarter end, the Company had net unrealized losses of $14,379,000 in its securities portfolio, resulting in a $25,899,000 total decrease in fair value for the quarter.

Core Funds from Operations (“Core FFO”), was $6,355,000 or $0.18 per diluted share for the quarter ended March 31, 2018 as compared to $5,061,000 or $0.17 per diluted share for the quarter ended March 31, 2017, representing an increase in Core FFO per diluted share of 6%. Normalized Funds from Operations (“Normalized FFO”), was $6,335,000 or $0.18 per diluted share for the quarter ended March 31, 2018, as compared to $5,029,000 or $0.17 per diluted share for the quarter ended March 31, 2017, representing an increase in Normalized FFO per diluted share of 6%.

A summary of significant financial information for the three months ended March 31, 2018 and 2017 is as follows:

	For the Three Months Ended
	March 31,
	2018			2017
Total Income	$	29,796,000		$	26,449,000
Total Expenses	$	25,492,000		$	22,485,000
Dividend and Other Investment Income (Loss), net	$	(23,454,000	)	$	1,883,000
Net Loss Attributable to Common Shareholders	$	(27,155,000	)	$	(1,504,000	)
Net Loss Attributable to Common Shareholders per Diluted Common Share	$	(0.76	)	$	(0.05	)
Core FFO(1)	$	6,355,000		$	5,061,000
Core FFO(1) per Diluted Common Share	$	0.18		$	0.17
Normalized FFO(1)	$	6,335,000		$	5,029,000
Normalized FFO(1) per Diluted Common Share	$	0.18		$	0.17
Weighted Average Shares Outstanding		35,907,000			29,955,000

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 15 

A summary of significant balance sheet information as of March 31, 2018 and December 31, 2017 is as follows:

	March 31, 2018		December 31, 2017
Gross Real Estate Investments	$	773,642,000	$	764,439,000
Marketable Securities at Fair Value	$	113,344,000	$	132,964,000
Total Assets	$	813,387,000	$	823,881,000
Mortgages Payable, net	$	303,317,000	$	304,895,000
Loans Payable, net	$	50,383,000	$	84,704,000
Total Shareholders’ Equity	$	446,549,000	$	421,215,000

Samuel A. Landy, President and CEO, commented on the results of the first quarter of 2018.

“We are pleased to announce another solid quarter of operating results and an excellent start to 2018. Our Normalized FFO for the quarter of $0.18 per diluted share fully covered our dividend. During the quarter, we:

● Increased Rental and Related Income by 11.2%;

● Increased Community Net Operating Income (“NOI”) by 11.2%;

● Increased Same Property NOI by 5.4%

● Increased Same Property Occupancy by 140 basis points from 81.8% to 83.2%;

● Increased home sales by 31.7%;

● Increased our rental home portfolio by 165 homes to approximately 5,800 total rental homes, representing an increase of 17.7%;

● Increased rental home occupancy by 100 basis points from 93.7% to 94.7%;

● Reduced the weighted average interest rate on our mortgage debt from 4.4% to 4.2%;

● Maintained the weighted average interest rate on our total debt at 4.1%;

● Issued 2,000,000 shares of a new 6.375% Series D Cumulative Redeemable Preferred Stock, for net proceeds after deducting the underwriting discount and other estimated offering expenses, of approximately $48 million;

● Raised $10.1 million through our Dividend Reinvestment and Stock Purchase Plan;

● Reduced our Net Debt to Total Market Capitalization from 36.4% to 29.0% and our Net Debt Less Securities to Total Market Capitalization from 26.1% to 19.0%; and,

● Increased our total market capitalization to $1.1 billion, representing an increase of 8.5%.”

Mr. Landy stated, “Our positive results were driven by strong operating metrics. Our rental program remains the most efficient way to drive occupancy and earnings growth. During the quarter we added 165 rental homes to our communities. Our rental home portfolio now contains 5,772 homes with an occupancy rate of 94.7%.”

“Home sales have been improving and increased 32% this year. The positive demographic trends and robust labor market, combined with rising conventional home prices, should favor our industry and drive further demand for our homes.”

“Same Property NOI increased by 5.4% this year, driven by a 140 basis point increase in the occupancy rate and a 3.3% increase in our weighted average monthly site rent.”

“During the quarter, we also enhanced our liquidity by issuing 2,000,000 shares of a new 6.375% Series D Cumulative Redeemable Preferred Stock, for net proceeds, after deducting the underwriting discount and other estimated offering expenses, of approximately $48 million. We anticipate continued per share earnings accretion once this capital is fully deployed.”

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 16 

“Starting in 2018, unrealized gains or losses in value on securities holding are included in our operating numbers. The REIT market has been under pressure thus far in 2018 losing approximately 10% in value. We view this as temporary and expect the value of the companies to better reflect their earnings and underlying property values.”

“We continue to execute on our business plan. We have a robust acquisition pipeline of approximately $75 million. We anticipate completing the acquisition of two of these communities, with a total of approximately 670 sites at a purchase price of $20 million, within the next few weeks. We look forward to building on the substantial progress we have made thus far.”

UMH Properties, Inc. will host its First Quarter 2018 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Thursday, May 10, 2018 at 10:00 a.m. Eastern Time.

The Company’s 2018 first quarter financial results being released herein will be available on the Company’s website atwww.umh.reit in the “Financial Information and Filings” section.

To participate in the webcast, select the microphone icon found on the homepagewww.umh.reitto access the call. Interested parties can also participate via conference call by calling toll free 877-513-1898 (domestically) or 412-902-4147 (internationally).

The replay of the conference call will be available at 12:00 p.m. Eastern Time on Thursday, May 10, 2018. It will be available until August 1, 2018 and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10118610.A transcript of the call and the webcast replay will be available at the Company’s website, www.umh.reit.

UMH Properties, Inc., which was organized in 1968, is a public equity REIT that owns and operates 112 manufactured home communities containing approximately 20,000 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana, Michigan and Maryland. In addition, the Company owns a portfolio of REIT securities.

Certain statements included in this press release which are not historical facts may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are based on the Company’s current expectations and involve various risks and uncertainties. Although the Company believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, the Company can provide no assurance those expectations will be achieved. The risks and uncertainties that could cause actual results or events to differ materially from expectations are contained in the Company’s annual report on Form 10-K and described from time to time in the Company’s other filings with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

Note:

Non-GAAP Information: We assess and measure our overall operating results based upon an industry performance measure referred to as Funds From Operations (“FFO”), which management believes is a useful indicator of our operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. FFO, as defined by The National Association of Real Estate Investment Trusts (“NAREIT”), represents Net Income (Loss) Attributable to Common Shareholders, as defined by accounting principles generally accepted in the United States of America (“U.S. GAAP”), excluding extraordinary items, as defined under U.S. GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization. NAREIT created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance. We define Core Funds From Operations (“Core FFO”) as FFO plus costs of early extinguishment of debt, change in the fair value of marketable securities and costs associated with the redemption of preferred stock. We define Normalized Funds From Operations (“Normalized FFO”) as Core FFO excluding gains and losses realized on marketable securities investments and certain non-recurring charges. We define Community NOI as rental and related income less community operating expenses such as real estate taxes, repairs and maintenance, community salaries, utilities, insurance and other expenses. FFO, Core FFO and Normalized FFO, as well as Community NOI, should be considered as supplemental measures of operating performance used by REITs. FFO, Core FFO and Normalized FFO exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have a different cost basis. However, other REITs may use different methodologies to calculate FFO, Core FFO, Normalized FFO and Community NOI and, accordingly, our FFO, Core FFO, Normalized FFO and Community NOI may not be comparable to all other REITs. The items excluded from FFO, Core FFO and Normalized FFO are significant components in understanding the Company’s financial performance.

UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 17 

FFO, Core FFO and Normalized FFO (i) do not represent Cash Flow from Operations as defined by U.S. GAAP; (ii) should not be considered as an alternative to net income (loss) as a measure of operating performance or to cash flows from operating, investing and financing activities; and (iii) are not alternatives to cash flow as a measure of liquidity.

The reconciliation of the Company’s U.S. GAAP net loss to the Company’s FFO, Core FFO and Normalized FFO for the three months ended March 31, 2018 and 2017 are calculated as follows:

	Three Months Ended
	3/31/18			3/31/17
Net Loss Attributable to Common Shareholders	$	(27,155,000	)	$	(1,504,000	)
Depreciation Expense		7,595,000			6,540,000
Loss on Sales of Depreciable Assets		16,000			25,000
FFO Attributable to Common Shareholders		(19,544,000	)		5,061,000
Decrease in Fair Value of Marketable Securities		25,899,000			-0-
Core FFO Attributable to Common Shareholders		6,355,000			5,061,000
Gain on Sales of Marketable Securities, net		(20,000	)		(32,000	)
Normalized FFO Attributable to Common Shareholders	$	6,335,000		$	5,029,000

The diluted weighted shares outstanding used in the calculation of Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 36,195,000 shares for the three months ended March 31, 2018, and 30,427,000 for the three months ended March 31, 2017, respectively. Common stock equivalents resulting from stock options in the amount of 288,000 shares for the three months ended March 31, 2018, and 472,000 shares for the three months ended March 31, 2017, are included in the diluted weighted shares outstanding. Common stock equivalents were excluded from the computation of the Diluted Net Loss per Share as their effect would be anti-dilutive.

The following are the cash flows provided (used) by operating, investing and financing activities for the three months ended March 31, 2018 and 2017:

	2018			2017
Operating Activities	$	10,290,000		$	11,626,000
Investing Activities		(17,472,000	)		(49,618,000	)
Financing Activities		11,205,000			43,368,000

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UMH Properties, Inc. | First Quarter FY 2018 Supplemental Information 18