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 Income (Loss) Attributable to Common Shareholders to FFO and Normalized FFO	7
Market Capitalization, Debt and Coverage Ratios	8
Debt Analysis	9
Debt Maturity	10
Securities Portfolio Performance	11
Property Summary and Snapshot	12
Same Property Statistics	13
Acquisition Summary and Property Portfolio	14
Definitions	15
Press Release Dated November 7, 2019	16

Certain information in this Supplemental Information Package contains 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 15 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. | Third Quarter FY 2019 Supplemental Information 2

Financial Highlights
(unaudited)	Three Months Ended						Nine Months Ended
	9/30/2019			9/30/2018			9/30/2019			9/30/2018
Operating Information
Number of Communities								122			115
Number of Sites								23,009			20,684
Rental and Related Income	$	32,947,667		$	28,728,078		$	94,979,807		$	84,236,326
Community Operating Expenses(1)	$	15,645,602		$	13,288,715		$	45,384,310		$	38,758,711
Community NOI(1)	$	17,302,065		$	15,439,363		$	49,595,497		$	45,477,615
Expense Ratio(1)		47.5	%		46.3	%		47.8	%		46.0	%
Sales of Manufactured Homes	$	4,381,223		$	4,719,036		$	13,866,552		$	11,105,302
Number of Homes Sold		71			80			230			204
Number of Rentals Added		432			219			768			608
Net Income (Loss)(2)	$	12,432,808		$	(6,349,343	)	$	24,218,904		$	(8,485,696	)
Net Income (Loss) Attributable to Common Shareholders(2)	$	5,622,052		$	(11,472,600	)	$	5,999,135		$	(23,678,383	)
Adjusted EBITDA	$	17,077,523		$	16,530,494		$	49,318,728		$	46,761,492
FFO Attributable to Common Shareholders	$	5,805,377		$	7,093,936		$	17,567,245		$	19,602,826
Normalized FFO Attributable to Common Shareholders	$	6,011,488		$	7,093,936		$	18,148,606		$	20,107,719
Shares Outstanding and Per Share Data
Weighted Average Shares Outstanding
Basic		40,513,150			37,151,432			39,591,565			36,542,855
Diluted		40,753,553			37,151,432			39,829,716			36,542,855
Net Income (Loss) Attributable to Common Shareholders per Share(2) –
Basic and Diluted	$	0.14		$	(0.31	)	$	0.15		$	(0.65	)
FFO per Share- Diluted	$	0.14		$	0.19		$	0.44		$	0.53
Normalized FFO per Share- Diluted	$	0.15		$	0.19		$	0.46		$	0.55
Dividends per Common Share	$	0.18		$	0.18		$	0.54		$	0.54
Balance Sheet
Total Assets							$	1,010,152,228		$	868,504,952
Total Liabilities							$	473,517,889		$	415,391,383
Market Capitalization
Total Debt, Net of Unamortized Debt
Debt Issuance Costs							$	451,965,477		$	400,450,562
Equity Market Capitalization							$	574,617,106		$	585,968,866
Series B Preferred Stock							$	95,030,000		$	95,030,000
Series C Preferred Stock							$	243,750,000		$	143,750,000
Series D Preferred Stock							$	50,000,000		$	50,000,000
Total Market Capitalization							$	1,415,362,583		$	1,275,199,428

(1) Excludes a utility billing dispute of $375,250 over a prior ten-year period for the nine months ended September 30, 2019 and emergency windstorm tree removal expenses in two adjacent communities of $126,000 for the three and nine months ended September 30, 2019.

(2) Includes increase (decrease) in fair value of marketable securities.

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 3

Consolidated Balance Sheets
	September 30, 2019			December 31, 2018
	(unaudited)
ASSETS
Investment Property and Equipment
Land	$	72,349,068		$	68,154,110
Site and Land Improvements		596,123,002			533,547,154
Buildings and Improvements		26,229,356			25,156,183
Rental Homes and Accessories		287,909,455			254,598,641
Total Investment Property		982,610,881			881,456,088
Equipment and Vehicles		20,497,633			18,791,688
Total Investment Property and Equipment		1,003,108,514			900,247,776
Accumulated Depreciation		(223,185,106	)		(197,208,363	)
Net Investment Property and Equipment		779,923,408			703,039,413
Other Assets
Cash and Cash Equivalents		11,111,055			7,433,470
Marketable Securities at Fair Value		116,437,477			99,595,736
Inventory of Manufactured Homes		30,515,698			23,703,322
Notes and Other Receivables, net		37,270,024			31,493,555
Prepaid Expenses and Other Assets		11,722,083			6,195,596
Land Development Costs		23,172,483			9,441,025
Total Other Assets		230,228,820			177,862,704
TOTAL ASSETS	$	1,010,152,228		$	880,902,117
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Mortgages Payable, net of Unamortized Debt Issuance Costs	$	375,483,776		$	331,093,063
Other Liabilities
Accounts Payable		5,015,806			3,873,445
Loans Payable, net of Unamortized Debt Issuance Costs		76,481,701			107,985,353
Accrued Liabilities and Deposits		9,938,967			7,410,055
Tenant Security Deposits		6,597,639			5,842,161
Total Other Liabilities		98,034,113			125,111,014
Total Liabilities		473,517,889			456,204,077
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 September 30, 2019 and December 31, 2018		95,030,000			95,030,000
Series C- 6.75% Cumulative Redeemable Preferred Stock, par value $0.10 per share; 9,750,000 and 5,750,000 shares authorized, issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		243,750,000			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 shares issued and outstanding as of September 30, 2019 and December 31, 2018		50,000,000			50,000,000
Common Stock – $0.10 par value per share; 123,363,800 and 111,363,800 shares authorized; 40,810,874 and 38,320,414 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		4,081,087			3,832,041
Excess Stock – $0.10 par value per share; 3,000,000 shares authorized; no shares issued or outstanding as of September 30, 2019 and December 31, 2018		-0-			-0-
Additional Paid-In Capital		169,137,034			157,449,781
Undistributed Income (Accumulated Deficit)		(25,363,782	)		(25,363,782	)
Total Shareholders’ Equity		536,634,339			424,698,040
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,010,152,228		$	880,902,117

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 4

Consolidated Statements of Income (Loss)
(unaudited)
	Three Months Ended						Nine Months Ended
	9/30/2019			9/30/2018			9/30/2019			9/30/2018
INCOME:
Rental and Related Income	$	32,947,667		$	28,728,078		$	94,979,807		$	84,236,326
Sales of Manufactured Homes		4,381,223			4,719,036			13,866,552			11,105,302
TOTAL INCOME		37,328,890			33,447,114			108,846,359			95,341,628
EXPENSES:
Community Operating Expenses		15,771,602			13,288,715			45,885,560			38,758,711
Cost of Sales of Manufactured Homes		3,271,260			3,512,705			10,117,068			8,406,701
Selling Expenses		1,374,932			1,024,188			3,802,894			2,913,504
General and Administrative Expenses		2,579,348			2,559,023			7,910,248			8,200,261
Depreciation Expense		9,390,236			8,051,627			27,009,888			23,410,519
TOTAL EXPENSES		32,387,378			28,436,258			94,725,658			81,689,696
OTHER INCOME (EXPENSE):
Interest Income		650,767			563,549			1,787,390			1,569,955
Dividend Income		1,858,831			2,704,255			5,734,390			7,603,575
Gain on Sales of Marketable Securities, net		-0-			-0-			-0-			20,107
Increase (Decrease) in Fair Value of Marketable Securities		9,234,252			(10,487,430	)		15,477,833			(19,762,579	)
Other Income		170,593			134,761			423,639			334,740
Interest Expense		(4,395,806	)		(4,247,855	)		(13,288,994	)		(11,795,315	)
TOTAL OTHER INCOME (EXPENSE)		7,518,637			(11,332,720	)		10,134,258			(22,029,517	)
Income (Loss) before Loss on Sales of Investment Property and Equipment		12,460,149			(6,321,864	)		24,254,959			(8,377,585	)
Loss on Sales of Investment Property and Equipment		(27,341	)		(27,479	)		(36,055	)		(108,111	)
NET INCOME (LOSS)		12,432,808			(6,349,343	)		24,218,904			(8,485,696	)
Less: Preferred Dividends		(6,810,756	)		(5,123,257	)		(18,219,769	)		(15,192,687	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	5,622,052		$	(11,472,600	)	$	5,999,135		$	(23,678,383	)

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 5

Consolidated Statements of Cash Flows
(unaudited)	Nine Months Ended
	9/30/2019			9/30/2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss)	$	24,218,904		$	(8,485,696	)
Non-Cash Items Included in Net Income (Loss):
Depreciation		27,009,888			23,410,519
Amortization of Financing Costs		559,325			462,604
Stock Compensation Expense		1,491,710			1,247,722
Provision (Benefit) for Uncollectible Notes and Other Receivables		971,873			(835,102	)
Gain on Sales of Marketable Securities, net		-0-			(20,107	)
(Increase) Decrease in Fair Value of Marketable Securities		(15,477,833	)		19,762,579
Loss on Sales of Investment Property and Equipment		36,055			108,111
Changes in Operating Assets and Liabilities:
Inventory of Manufactured Homes		(6,812,376	)		(7,521,803	)
Notes and Other Receivables, net of Notes Acquired with Acquisitions		(6,748,342	)		(3,280,881	)
Prepaid Expenses and Other Assets		(3,814,046	)		(1,995,025	)
Accounts Payable		1,142,361			722,344
Accrued Liabilities and Deposits		2,528,912			666,513
Tenant Security Deposits		755,478			485,706
Net Cash Provided by Operating Activities		25,861,909			24,727,484
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Manufactured Home Communities, net of Mortgages Assumed		(37,308,285	)		(24,549,398	)
Purchase of Investment Property and Equipment		(49,343,862	)		(38,562,274	)
Proceeds from Sales of Investment Property and Equipment		2,129,383			1,956,785
Additions to Land Development Costs		(13,731,458	)		(8,504,424	)
Purchase of Marketable Securities		(1,363,908	)		(17,978,715	)
Proceeds from Sales of Marketable Securities		-0-			268,675
Net Cash Used in Investing Activities		(99,618,130	)		(87,369,351	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Mortgages, net of Mortgages Assumed		44,850,000			13,442,000
Net (Payments) Proceeds from Short Term Borrowings		(31,576,000	)		2,331,831
Principal Payments of Mortgages		(19,566,703	)		(5,094,625	)
Financing Costs on Debt		(786,735	)		(290,852	)
Proceeds from Issuance of Preferred Stock, net of Offering Costs		96,688,218			48,247,280
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments		23,578,603			21,292,003
Repurchase of Common Stock		(237,314	)		-0-
Proceeds from Exercise of Stock Options		763,980			1,385,000
Preferred Dividends Paid		(18,744,771	)		(14,927,062	)
Common Dividends Paid, net of Dividend Reinvestments		(15,823,031	)		(16,861,142	)
Net Cash Provided by Financing Activities		79,146,247			49,524,433
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		5,390,026			(13,117,434	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD		12,777,411			27,891,249
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT END OF PERIOD	$	18,167,437		$	14,773,815

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 6

Reconciliation of Net Income (Loss) to Adjusted EBITDA and Net Income (Loss) Attributable
to Common Shareholders to FFO and Normalized FFO

(unaudited)

	Three Months Ended						Nine Months Ended
	9/30/2019			9/30/2018			9/30/2019			9/30/2018
Reconciliation of Net Income (Loss) to Adjusted EBITDA
Net Income (Loss)	$	12,432,808		$	(6,349,343	)	$	24,218,904		$	(8,485,696	)
Interest Expense		4,395,806			4,247,855			13,288,994			11,795,315
Franchise Taxes		92,925			92,925			278,775			278,775
Depreciation Expense		9,390,236			8,051,627			27,009,888			23,410,519
(Increase) Decrease in Fair Value of Marketable Securities		(9,234,252	)		10,487,430			(15,477,833	)		19,762,579
Adjusted EBITDA	$	17,077,523		$	16,530,494		$	49,318,728		$	46,761,492
Reconciliation of Net Income (Loss) Attributable to Common Shareholders to Funds from Operations
Net Income (Loss) Attributable to Common Shareholders	$	5,622,052		$	(11,472,600	)	$	5,999,135		$	(23,678,383	)
Depreciation Expense		9,390,236			8,051,627			27,009,888			23,410,519
Loss on Sales of Depreciable Assets		27,341			27,479			36,055			108,111
(Increase) Decrease in Fair Value of Marketable Securities (1)		(9,234,252	)		10,487,430			(15,477,833	)		19,762,579
Funds from Operations (“FFO”)		5,805,377			7,093,936			17,567,245			19,602,826
Adjustments:
Non-Recurring Expenses(2)		206,111			-0-			581,361			525,000
Gain on Sales of Marketable Securities, net		-0-			-0-			-0-			(20,107	)
Normalized Funds from Operations
(“Normalized FFO”)	$	6,011,488		$	7,093,936		$	18,148,606		$	20,107,719

(1)	(Increase) Decrease in Fair Value of Marketable Securities, if any, were previously recorded in Core FFO.
(2)	Consists of utility billing dispute over a prior 10-year period ($375,250), emergency windstorm tree removal expenses in two adjacent communities ($126,000) and costs associated with acquisitions not completed ($80,111) in 2019 and one-time payroll expenditures ($525,000) in 2018.

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 7

Market Capitalization, Debt and Coverage Ratios

(unaudited)

	Nine Months Ended						Year Ended
	9/30/2019			9/30/2018			12/31/2018
Shares Outstanding		40,810,874			37,466,040			38,320,414
Market Price Per Share	$	14.08		$	15.64		$	11.84
Equity Market Capitalization	$	574,617,106		$	585,968,866		$	453,713,702
Total Debt		451,965,477			400,450,562			439,078,416
Preferred		388,780,000			288,780,000			288,780,000
Total Market Capitalization	$	1,415,362,583		$	1,275,199,428		$	1,181,572,118
Total Debt	$	451,965,477		$	400,450,562		$	439,078,416
Less: Cash and Cash Equivalents		(11,111,055	)		(8,879,883	)		(7,433,470	)
Net Debt		440,854,422			391,570,679			431,644,946
Less: Marketable Securities at Fair Value (“Securities”)		(116,437,477	)		(130,931,844	)		(99,595,736	)
Net Debt Less Securities	$	324,416,945		$	260,638,835		$	332,049,210
Interest Expense	$	13,288,994		$	11,795,315		$	16,038,585
Capitalized Interest		1,017,304			532,640			1,036,307
Preferred Dividends		18,219,769			15,192,687			20,315,944
Total Fixed Charges	$	32,526,067		$	27,520,642		$	37,390,836
Adjusted EBITDA	$	49,318,728		$	46,761,492		$	63,541,619
Debt and Coverage Ratios
Net Debt / Total Market Capitalization		31.1	%		30.7	%		36.5	%
Net Debt Plus Preferred / Total Market Capitalization		58.6	%		53.4	%		61.0	%
Net Debt Less Securities / Total Market Capitalization		22.9	%		20.4	%		28.1	%
Net Debt Less Securities Plus Preferred / Total Market Capitalization		50.4	%		43.1	%		52.5	%
Interest Coverage		3.4	x		3.8	x		3.7	x
Fixed Charge Coverage		1.5	x		1.7	x		1.7	x
Net Debt / Adjusted EBITDA		6.7	x		6.3	x		6.8	x
Net Debt Less Securities / Adjusted EBITDA		4.9	x		4.2	x		5.2	x
Net Debt Plus Preferred / Adjusted EBITDA		12.6	x		10.9	x		11.3	x
Net Debt Less Securities Plus Preferred / Adjusted EBITDA		10.8	x		8.8	x		9.8	x

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 8

Debt Analysis

(unaudited)	Nine Months Ended						Year Ended
	9/30/2019			9/30/2018			12/31/2018
Debt Outstanding
Mortgages Payable:
Fixed Rate Mortgages	$	379,101,982		$	316,808,161		$	334,411,425
Unamortized Debt Issuance Costs		(3,618,206	)		(3,388,721	)		(3,318,362	)
Mortgages, Net of Unamortized Debt Issuance Costs	$	375,483,776		$	313,419,440		$	331,093,063
Loans Payable:
Unsecured Line of Credit	$	5,000,000		$	35,000,000		$	50,000,000
Other Loans Payable		71,841,393			52,097,655			58,417,479
Total Loans Before Unamortized Debt Issuance Costs		76,841,393			87,097,655			108,417,479
Unamortized Debt Issuance Costs		(359,692	)		(66,533	)		(432,126	)
Loans, Net of Unamortized Debt Issuance Costs	$	76,481,701		$	87,031,122		$	107,985,353
Total Debt, Net of Unamortized Debt Issuance Costs	$	451,965,477		$	400,450,562		$	439,078,416
% Fixed/Floating
Fixed		84.5	%		80.0	%		77.0	%
Floating		15.5	%		20.0	%		23.0	%
Total		100.0	%		100.0	%		100.0	%
Weighted Average Interest Rates(1)
Mortgages Payable		4.14	%		4.24	%		4.29	%
Loans Payable		3.82	%		4.11	%		4.20	%
Total Average		4.09	%		4.21	%		4.27	%
Weighted Average Maturity (Years)
Mortgages Payable		6.2			6.3			6.3

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

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 9

Debt Maturity

(unaudited)

As of 9/30/19:
Fiscal Year Ended	Mortgages			Loans			Total			% of Total
2019	$	-0-		$	18,879,882		$	18,879,882			4.1	%
2020		-0-			10,153,208			10,153,208			2.2	%
2021		2,128,262			293,339			2,421,601			0.5	%
2022		20,042,010			5,907,256	(1)		25,949,266			5.7	%
2023		67,371,806			502,564			67,874,370			14.9	%
Thereafter		289,559,904			41,105,144			330,665,048			72.6	%
Total Debt Before Unamortized Debt Issuance Cost		379,101,982			76,841,393			455,943,375			100.0	%
Unamortized Debt Issuance Cost		(3,618,206	)		(359,692	)		(3,977,898	)
Total Debt, Net of Unamortized Debt Issuance Costs	$	375,483,776		$	76,481,701		$	451,965,477

(1) Includes $5 million balance outstanding on the Company’s Line of Credit due November 2022, with an additional one year option.

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 10

Securities Portfolio Performance

 

Year Ended	Securities Available for Sale		Dividend Income		Net Realized Gain on Sale of Securities		Net Realized Gain on Sale of Securities & Dividend Income
2010	$	28,757,477	$	1,762,609	$	2,027,943	$	3,790,552
2011		43,298,214		2,512,057		2,692,649		5,204,706
2012		57,325,440		3,243,592		4,092,585		7,336,177
2013		59,254,942		3,481,514		4,055,812		7,537,326
2014		63,555,961		4,065,986		1,542,589		5,608,575
2015		75,011,260		4,399,181		204,230		4,603,411
2016		108,755,172		6,636,126		2,285,301		8,921,427
2017		132,964,276		8,134,898		1,747,528		9,882,426
2018		99,595,736		10,367,155		20,107		10,387,262
2019*		116,437,477		5,734,390		-0-		5,734,390
			$	50,337,508	$	18,668,744	$	69,006,252

*For the nine months ended September 30,2019.

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 11

Property Summary and Snapshot

(unaudited)

	9/30/2019			9/30/2018			% Change
Communities		122			115			6.1	%
Developed Sites		23,009			20,684			11.2	%
Occupied		18,963			17,089			11.0	%
Occupancy %		82.4	%		82.6	%		-20bps
Total Rentals		7,280			6,215			17.1	%
Occupied Rentals		6,724			5,796			16.0	%
Rental Occupancy %		92.4	%		93.3	%		-90bps
Monthly Rent Per Site	$	443		$	432			2.5	%
Monthly Rent Per Home Rental Including Site	$	760		$	737			3.1	%

State	Number		TotalAcreage		DevelopedAcreage		VacantAcreage		TotalSites		OccupiedSites		OccupancyPercentage			Monthly RentPer Site		TotalRentals		OccupiedRentals		Rental Occupancy Percentage			Monthly Rent PerHome Rental
			(1)				(1)																		(2)
Indiana		14		1,104		870		234		3,990		3,326		83.4	%	$	392		1,512		1,406		93.0	%	$	754
Maryland		1		77		10		67		62		57		91.9	%	$	515		-0-		-0-		N/A			N/A
Michigan		3		153		148		5		740		608		82.2	%	$	437		253		224		88.5	%	$	760
New Jersey		4		349		187		162		1,006		952		94.6	%	$	621		40		37		92.5	%	$	985
New York		7		617		308		309		1,170		986		84.3	%	$	540		355		330		93.0	%	$	915
Ohio		36		1,781		1,315		466		6,713		5,179		77.1	%	$	394		2,065		1,861		90.1	%	$	698
Pennsylvania		50		2,148		1,786		362		7,629		6,240		81.8	%	$	460		2,241		2,085		93.0	%	$	783
Tennessee		7		413		321		92		1,699		1,615		95.1	%	$	473		814		781		95.9	%	$	778
Total as of September 30, 2019		122		6,642		4,945		1,697		23,009		18,963		82.4	%	$	443		7,280		6,724		92.4	%	$	760

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

(2) Includes home and site rent charges.

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 12

Same Property Statistics

(unaudited)

	For Three Months Ended									For Nine Months Ended
	9/30/2019		9/30/2018		Change		% Change			9/30/2019		9/30/2018		Change		% Change
Community Net Operating Income
Rental and Related Income	$	30,322,543	$	28,133,329	$	2,189,214		7.8	%	$	89,102,387	$	83,228,512	$	5,873,875		7.1	%
Community Operating Expenses		13,555,396		12,312,376		1,243,020		10.1	%		39,972,251		36,392,584		3,579,667		9.8	%
Community NOI	$	16,767,147	$	15,820,953	$	946,194		6.0	%	$	49,130,136	$	46,835,928	$	2,294,208		4.9	%

	As of
	9/30/2019			9/30/2018			Change
Total Sites		19,920			19,889			0.2	%
Occupied Sites		16,726			16,369			357 sites, 2.2%
Occupancy %		84.0	%		82.3	%		170bps
Number of Properties		112			112			N/A
Total Rentals		6,792			6,104			11.3	%
Occupied Rentals		6,357			5,700			11.5	%
Rental Occupancy		93.6	%		93.4	%		20bps
Monthly Rent Per Site	$	452		$	438			3.2	%
Monthly Rent Per Home Including Site	$	763		$	739			3.2	%

Same Property includes all properties owned as of January 1, 2018, with the exception of Memphis Blues.

(1) Excludes a one-time settlement of a utility billing dispute of $375,250 over a prior ten-year period.

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 13

Acquisition Summary

At Acquisition:
Year ofAcquisition	Number ofCommunities		Sites		OccupiedSites		Occupancy %			Price		Total Acres
2016		3		289		215		74	%	$	7,277,000		219
2017		11		1,997		1,333		67	%	$	63,290,000		602
2018		6		1,615		1,271		79	%	$	59,093,000		494
2019		4		1,495		935		63	%	$	56,237,000		246

 

Community	Date ofAcquisition		State		Number of Sites		Purchase Price		Number of Acres		Occupancy
Friendly Village		July 3, 2019		OH		824	$	19,386,000		101		46	%
Fifty-One Estates and New Colony		July 30, 2019		PA		285		11,650,000		60		76	%
Northtowne Meadows		August 27, 2019		MI		386		25,201,000		85		88	%
Total 2019 to Date						1,495	$	56,237,000		246		63	%

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 14

Definitions

Investors and analysts following the real estate industry utilize funds from operations available to common shareholders (“FFO”), normalized funds from operations available to common shareholders (“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 shareholders, 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 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. FFO also adjusts for the effects of the change in the fair value of marketable securities and costs associated with the redemption of preferred stock. Normalized FFO reflects the same assumptions as 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 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, and the change in the fair value of marketable securities plus certain non-cash items such as real estate asset depreciation and amortization. Included in the NAREIT FFO White Paper - 2018 Restatement, is an option pertaining to assets incidental to our main business in the calculation of NAREIT FFO to make an election to include or exclude gains and losses on the sale of these assets, such as marketable equity securities, and include or exclude mark-to-market changes in the value recognized on these marketable equity securities. In conjunction with the adoption of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude the change in the fair value of marketable securities from our FFO calculation. Prior to the adoption of the FFO White Paper – 2018 Restatement, we utilized Core Funds from Operations (Core FFO), which we defined as FFO, excluding the change in the fair value of marketable securities. NAREIT created FFO as a non-GAAP supplemental measure of REIT operating performance.

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

Normalized FFO per Diluted Common Share is calculated using diluted weighted shares outstanding of 40,754,000 and 39,830,000 shares for the three and nine months ended September 30, 2019, respectively, and 37,674,000 and 36,894,000 for the three and nine months ended September 30, 2018, respectively. Common stock equivalents resulting from stock options in the amount of 240,000 and 238,000 shares for the three and nine months ended September 30, 2019, respectively, and 523,000 and 352,000 shares for the three and nine months ended September 30, 2018, respectively, are included in the diluted weighted shares outstanding. Common stock equivalents for the three and nine months ended September 30, 2018 were excluded from the computation of the Diluted Net Income (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, 2018, with the exception of Memphis Blues.

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

Community NOI, Same Property NOI, Adjusted EBITDA, 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 and Normalized FFO should not be considered as substitutes for net loss 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 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. | Third Quarter FY 2019 Supplemental Information 15

Press Release Dated November 7, 2019

FOR IMMEDIATE RELEASE	November 7, 2019
	Contact: Nelli Madden
	732-577-9997

UMH PROPERTIES, INC. REPORTS RESULTS FOR THE THIRD QUARTER ENDED
SEPTEMBER 30, 2019

FREEHOLD, NJ, November 7, 2019........ UMH Properties, Inc. (NYSE:UMH) reported Total Income for the quarter ended September 30, 2019 of $37,329,000 as compared to $33,447,000 for the quarter ended September 30, 2018, representing an increase of 12%. Net Income Attributable to Common Shareholders amounted to $5,622,000 or $0.14 per diluted share for the quarter ended September 30, 2019 as compared to Net Loss of $11,473,000 or $0.31 per diluted share for the quarter ended September 30, 2018.

Funds from Operations Attributable to Common Shareholders (“FFO”), was $5,805,000 or $0.14 per diluted share for the quarter ended September 30, 2019 as compared to $7,094,000 or $0.19 per diluted share for the quarter ended September 30, 2018. Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), was $6,011,000 or $0.15 per diluted share for the quarter ended September 30, 2019, as compared to $7,094,000 or $0.19 per diluted share for the quarter ended September 30, 2018. These decreases were primarily attributable to the reduction in dividend income from our securities holdings as well as the impact of our $100 million preferred issue in April, which was not fully deployed until this quarter.

A summary of significant financial information for the three and nine months ended September 30, 2019 and 2018 is as follows:

	For the Three Months Ended
	September 30,
	2019		2018
Total Income	$	37,329,000	$	33,447,000
Total Expenses	$	32,387,000	$	28,436,000
Increase (Decrease) in Fair Value of Marketable Securities	$	9,234,000	$	(10,487,000	)
Net Income (Loss) Attributable to Common Shareholders	$	5,622,000	$	(11,473,000	)
Net Income (Loss) Attributable to Common Shareholders per Diluted Common Share	$	0.14	$	(0.31	)
FFO(1)	$	5,805,000	$	7,094,000
FFO(1)per Diluted Common Share	$	0.14	$	0.19
Normalized FFO(1)	$	6,011,000	$	7,094,000
Normalized FFO(1)per Diluted Common Share	$	0.15	$	0.19
Diluted Weighted Average Shares Outstanding		40,754,000		37,151,000

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 16

	For the Nine Months Ended
	September 30,
	2019		2018
Total Income	$	108,846,000	$	95,342,000
Total Expenses	$	94,726,000	$	81,690,000
Increase (Decrease) in Fair Value of Marketable Securities	$	15,478,000	$	(19,763,000	)
Net Income (Loss) Attributable to Common Shareholders	$	5,999,000	$	(23,678,000	)
Net Income (Loss) Attributable to Common Shareholders per Diluted Common Share	$	0.15	$	(0.65	)
FFO(1)	$	17,567,000	$	19,603,000
FFO(1) per Diluted Common Share	$	0.44	$	0.53
Normalized FFO(1)	$	18,149,000	$	20,108,000
Normalized FFO(1)per Diluted Common Share	$	0.46	$	0.55
Diluted Weighted Average Shares Outstanding		39,830,000		36,543,000

A summary of significant balance sheet information as of September 30, 2019 and December 31, 2018 is as follows:

	September 30, 2019		December 31, 2018
Gross Real Estate Investments	$	982,611,000	$	881,456,000
Marketable Securities at Fair Value	$	116,437,000	$	99,596,000
Total Assets	$	1,010,152,000	$	880,902,000
Mortgages Payable, net	$	375,484,000	$	331,093,000
Loans Payable, net	$	76,482,000	$	107,985,000
Total Shareholders’ Equity	$	536,634,000	$	424,698,000

Samuel A. Landy, President and CEO, commented on the results of the third quarter of 2019.

“Our community operating results continue to validate our business plan. We are pleased with the progress we have made at our value-add communities as well as our same store performance. The decrease in per share FFO is primarily attributable to the impact of our raising capital and a reduction in dividend income from our securities portfolio. Throughout the quarter we deployed this new capital into acquisitions, rental homes and other investments resulting in a sequential Normalized FFO increase of 7% as compared to the second quarter. The impact of these investments is not fully reflected in this quarter’s results.”

“During the quarter, we have made substantial progress on multiple fronts. We:

● Increased Rental and Related Income by 15% over the prior year period;

● Increased Community Net Operating Income (“NOI”) by 11% over the prior year period;

● Increased Same Property NOI by 6% over the prior year period;

● Increased Same Property Occupancy by 357 sites or 170 bps over the prior year period from 82.3% to 84.0%;

● Increased our rental home portfolio by 768 homes to approximately 7,300 total rental homes, representing an increase of 12% from yearend 2018;

● Acquired four communities containing approximately 1,500 homesites for a total cost of approximately $56.2 million;

● Raised $7.8 million through our Dividend Reinvestment and Stock Purchase Plan;

● Completed the financing/refinancing of four of our communities for total proceeds of approximately $44.9 million with a weighted average interest rate of 3.40%, paying off the existing $13.8 million mortgages with a weighted average rate of 5.91%;

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 17

● Reduced the weighted average interest rate on our mortgages payable from 4.3% at yearend 2018 to 4.1% at quarter end;

● Increased our total market capitalization to $1.4 billion, representing an increase of 20% over yearend 2018; and,

● Subsequent to quarter end, implemented a Preferred Stock At-The-Market Program (“ATM”) under which the Company may offer and sell shares of our 6.75% Series C Perpetual Preferred Stock (“Series C Preferred”) and/or 6.375% Series D Preferred Stock (“Series D Preferred”), having an aggregate sales price of up to $100,000,000. Through October 30, 2019, we have sold approximately 350,000 shares of our Series D Preferred for net proceeds of approximately $8.7 million, after offering expenses.”

Mr. Landy further stated, “UMH’s overall operating metrics remain strong. Same property NOI increased by 6% over the prior year period. This was driven by occupancy increases of 170 bps to 84.0% at quarter end 2019, an average increase in rental rates of 3.2% and the addition of rental homes. Year over year, we added almost 700 rental homes to our same property portfolio, increasing rental home occupancy to 93.6%.”

“UMH also had a busy quarter on the acquisition front. During the quarter, we closed on the acquisition of four communities containing 1,500 homesites, with a weighted average occupancy rate of 63%, for approximately $56 million. These communities are located in markets where we have experienced excellent demand for both sales and rental units. We anticipate strong returns at these value-add communities as we are able to execute on our long-term business plan.”

“We are satisfied with the progress that we have made at all of our communities. The value of our portfolio continues to grow as we upgrade the communities which should result in additional revenue growth through our rental and sales programs.”

UMH Properties, Inc. will host its Third Quarter 2019 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Friday, November 8, 2019 at 10:00 a.m. Eastern Time.

The Company’s 2019 third 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.reit to 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 Friday, November 8, 2019. It will be available until February 8, 2020 and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10134882.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 122 manufactured home communities containing approximately 23,000 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.

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 18

Note:

(1)	Non-GAAP Information: We assess and measure our overall operating results based upon an industry performance measure referred to as Funds from Operations Attributable to Common Shareholders (“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, and the change in the fair value of marketable securities plus certain non-cash items such as real estate asset depreciation and amortization. Included in the NAREIT FFO White Paper - 2018 Restatement, is an option pertaining to assets incidental to our main business in the calculation of NAREIT FFO to make an election to include or exclude gains and losses on the sale of these assets, such as marketable equity securities, and include or exclude mark-to-market changes in the value recognized on these marketable equity securities. In conjunction with the adoption of the FFO White Paper - 2018 Restatement, for all periods presented, we have elected to exclude the change in the fair value of marketable securities from our FFO calculation. Prior to the adoption of the FFO White Paper – 2018 Restatement, we utilized Core Funds from Operations (Core FFO), which we defined as FFO, excluding the change in the fair value of marketable securities. NAREIT created FFO as a non-U.S. GAAP supplemental measure of REIT operating performance.  We define Normalized Funds from Operations Attributable to Common Shareholders (“Normalized FFO”), as FFO, excluding gains and losses realized on marketable securities investments and certain one-time charges. FFO and Normalized FFO should be considered as supplemental measures of operating performance used by REITs.  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 and Normalized FFO and, accordingly, our FFO and Normalized FFO may not be comparable to all other REITs. The items excluded from FFO and Normalized FFO are significant components in understanding the Company’s financial performance.
	FFO and Normalized FFO (i) do not represent Cash Flow from Operations as defined by U.S. GAAP; (ii) should not be considered as alternatives 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 and Normalized FFO for the three and nine months ended September 30, 2019 and 2018 are calculated as follows:

	Three Months Ended						Nine Months Ended
	9/30/19			9/30/18			9/30/19			9/30/18
Net Income (Loss) Attributable to Common Shareholders	$	5,622,000		$	(11,473,000	)	$	5,999,000		$	(23,678,000	)
Depreciation Expense		9,390,000			8,052,000			27,010,000			23,410,000
(Gain) Loss on Sales of Depreciable Assets		27,000			28,000			36,000			108,000
(Increase) Decrease in Fair Value of Marketable Securities(2)		(9,234,000	)		10,487,000			(15,478,000	)		19,763,000
FFO Attributable to Common Shareholders		5,805,000			7,094,000			17,567,000			19,603,000
Non-Recurring Other Expense(3)		206,000			-0-			582,000			525,000
Gain on Sales of Marketable Securities, net		-0-			-0-			-0-			(20,000	)
Normalized FFO Attributable to Common Shareholders	$	6,011,000		$	7,094,000		$	18,149,000		$	20,108,000

The diluted weighted shares outstanding used in the calculation of FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 40,754,000 and 39,830,000 shares for the three and nine months ended September 30, 2019, respectively, and 37,674,000 and 36,894,000 shares for the three and nine months ended September 30, 2018, respectively. Common stock equivalents resulting from stock options in the amount of 240,000 and 238,000 shares for the three and nine months ended September 30, 2019, respectively, and 523,000 and 352,000 shares for the three and nine months ended September 30, 2018, respectively, are included in the diluted weighted shares outstanding. Common stock equivalents for the three and nine months ended September 30, 2018 were excluded from the computation of the Diluted Net Income (Loss) per Share as their effect would be anti-dilutive.

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 19

The following are the cash flows provided (used) by operating, investing and financing activities for the nine months ended September 30, 2019 and 2018:

	2019			2018
Operating Activities	$	25,862,000		$	24,727,000
Investing Activities		(99,618,000	)		(87,369,000	)
Financing Activities		79,146,000			49,524,000

(2)	(Increase)Decrease in Fair Value of Marketable Securities, if any, were previously recorded in Core FFO.
(3)	Consistsof utility billing dispute over a prior 10-year period ($376,000), emergency windstorm tree removal expenses in two adjacent communities ($126,000) and costs associated with acquisitions not completed ($80,000) in 2019 and one-time payroll expenditures ($525,000) in 2018.

# # # #

 

UMH Properties, Inc. | Third Quarter FY 2019 Supplemental Information 20