EX-99 2 ex99.htm

 

 

 

 

 

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 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 March 8, 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. | Fourth Quarter FY 2017 Supplemental Information2
  

 

Financial Highlights

(unaudited)

 

   Three Months Ended   Twelve Months Ended 
    12/31/2017    12/31/2016    12/31/2017    12/31/2016 
Operating Information                    
Number of Communities             112    101 
Number of Sites             20,029    18,054 
Rental and Related Income  $26,122,486   $23,366,346   $101,801,425   $90,679,557 
Community Operating Expenses  $12,176,772   $10,644,368   $47,846,565   $42,638,333 
Community NOI  $13,945,714   $12,721,978   $53,954,860   $48,041,224 
Expense Ratio   46.6%   45.6%   47.0%   47.0%
Sales of Manufactured Homes  $2,574,099   $1,777,351   $10,846,494   $8,534,272 
Number of Homes Sold   53    38    222    170 
Number of Rentals Added   258    212    948    927 
Net Income  $3,530,616   $3,376,615   $12,668,034   $11,534,559 
Net Loss Attributable to Common Shareholders  $(795,765)  $(413,132)  $(7,679,265)  $(2,568,873)
Adjusted EBITDA  $14,630,013   $13,380,376   $56,347,752   $50,565,254 
FFO  $6,552,815   $5,686,945   $19,959,411   $20,647,390 
Core FFO  $6,552,815   $5,719,937   $23,461,898   $20,731,742 
Normalized FFO  $6,323,576   $5,333,472   $21,714,370   $18,446,441 
                     
Shares Outstanding and Per Share Data                    
Weighted Average Shares Outstanding Basic and Diluted   35,071,943    28,829,801    32,675,650    27,808,895 
Net Loss Attributable to Common Shareholders per Share- Basic and Diluted  $(0.03)  $(0.02)  $(0.24)  $(0.10)
FFO per Share- Diluted  $0.19   $0.19   $0.60   $0.73 
Core FFO per Share- Diluted  $0.19   $0.20   $0.71   $0.74 
Normalized FFO per Share- Diluted  $0.18   $0.18   $0.66   $0.66 
                     
Dividends per Common Share  $0.18   $0.18   $0.72   $0.72 
                     
Balance Sheet                    
Total Assets            $823,881,326   $680,444,818 
Total Liabilities            $402,665,862   $363,412,851 
                     
Market Capitalization                    
Total Debt, Net of Unamortized Debt Issuance Costs            $389,599,604   $351,310,977 
Equity Market Capitalization            $528,772,213   $442,301,606 
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- 
Total Market Capitalization            $1,157,151,817   $980,237,583 

 

UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information3
  

 

Consolidated Balance Sheets

 

   December 31, 2017   December 31, 2016 
ASSETS        
Investment Property and Equipment          
Land  $61,239,644   $47,476,314 
Site and Land Improvements   463,242,075    398,776,390 
Buildings and Improvements   22,963,926    21,101,836 
Rental Homes and Accessories   216,992,988    172,862,227 
Total Investment Property   764,438,633    640,216,767 
Equipment and Vehicles   16,874,760    14,986,196 
Total Investment Property and Equipment   781,313,393    655,202,963 
Accumulated Depreciation   (166,444,512)   (140,255,603)
Net Investment Property and Equipment   614,868,881    514,947,360 
           
Other Assets          
Cash and Cash Equivalents   23,242,090    4,216,592 
Securities Available for Sale at Fair Value   132,964,276    108,755,172 
Inventory of Manufactured Homes   17,569,365    17,424,574 
Notes and Other Receivables, net   25,451,053    20,323,191 
Prepaid Expenses and Other Assets   3,457,083    4,497,937 
Land Development Costs   6,328,578    10,279,992 
Total Other Assets   209,012,445    165,497,458 
           
TOTAL ASSETS  $823,881,326   $680,444,818 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Liabilities          
Mortgages Payable, net of Unamortized Debt Issuance Costs  $304,895,117   $293,025,592 
Other Liabilities          
Accounts Payable   2,960,739    2,962,037 
Loans Payable, net of Unamortized Debt Issuance Costs   84,704,487    58,285,385 
Accrued Liabilities and Deposits   4,977,886    4,820,142 
Tenant Security Deposits   5,127,633    4,319,695 
Total Other Liabilities   97,770,745    70,387,259 
Total Liabilities   402,665,862    363,412,851 
           
COMMITMENTS AND CONTINGENCIES          
           
Shareholders’ Equity:          
Series A - 8.25% Cumulative Redeemable Preferred Stock, par value $0.10 per share: -0- and 3,663,800 shares authorized, issued and outstanding as of December 31, 2017 and 2016, respectively   -0-    91,595,000 
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 December 31, 2017 and 2016, respectively   95,030,000    95,030,000 
Series C - 6.75% Cumulative Redeemable Preferred Stock, par value $0.10 per Share; 5,750,000 and -0- shares authorized, issued and outstanding as of December 31, 2017 and 2016, respectively.   143,750,000    -0- 
Common Stock – $0.10 par value per share: 113,663,800 and 75,000,000 shares authorized; 35,488,068 and 29,388,811 shares issued and outstanding as of December 31, 2017 and 2016, respectively   3,548,807    2,938,881 
Excess Stock – $0.10 par value per share: 3,000,000 shares authorized; no shares issued or outstanding as of December 31, 2017 and 2016, respectively   -0-    -0- 
Additional Paid-In Capital   168,034,868    111,422,691 
Accumulated Other Comprehensive Income   11,519,582    16,713,188 
Accumulated Deficit   (667,793)   (667,793)
Total Shareholders’ Equity   421,215,464    317,031,967 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $823,881,326   $680,444,818 


 

UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information4
  

 

Consolidated Statements of Income (Loss)

 

   (unaudited)     
   Three Months Ended   Twelve Months Ended 
   12/31/2017   12/31/2016   12/31/2017   12/31/2016 
INCOME:                    
Rental and Related Income  $26,122,486   $23,366,346   $101,801,425   $90,679,557 
Sales of Manufactured Homes   2,574,099    1,777,351    10,846,494    8,534,272 
TOTAL INCOME   28,696,585    25,143,697    112,647,919    99,213,829 
                     
EXPENSES:                    
Community Operating Expenses   12,176,772    10,644,368    47,846,565    42,638,333 
Cost of Sales of Manufactured Homes   2,005,525    1,187,933    8,471,190    6,466,520 
Selling Expenses   633,375    581,544    3,095,155    2,852,405 
General and Administrative Expenses   2,455,016    2,071,626    9,645,681    8,004,925 
Acquisition Costs   -0-    27,871    -0-    79,231 
Depreciation Expense   7,297,190    6,121,424    27,557,746    23,214,100 
TOTAL EXPENSES   24,567,878    20,634,766    96,616,337    83,255,514 
                     
OTHER INCOME (EXPENSE):                    
Interest Income   527,385    377,727    2,006,880    1,584,585 
Dividend Income   2,419,860    1,801,309    8,134,898    6,636,126 
Gain on Sales of Securities, net   229,239    386,465    1,747,528    2,285,301 
Other Income   112,797    109,077    705,048    504,759 
Interest Expense   (3,835,982)   (3,828,241)   (15,876,972)   (15,432,364)
TOTAL OTHER INCOME (EXPENSE)   (546,701)   (1,153,663)   (3,282,618)   (4,421,593)
                     
Income before Gain (Loss) on Sales of Investment Property and Equipment   3,582,006    3,355,268    12,748,964    11,536,722 
Gain (Loss) on Sales of Investment Property and Equipment   (51,390)   21,347    (80,930)   (2,163)
NET INCOME   3,530,616    3,376,615    12,668,034    11,534,559 
                     
Less: Preferred Dividends   (4,326,381)   (3,789,747)   (16,844,812)   (14,103,432)
Less: Redemption of Preferred Stock   -0-    -0-    (3,502,487)   -0- 
                     
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS  $(795,765)  $(413,132)  $(7,679,265)  $(2,568,873)

 

UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information5
 

 

Consolidated Statements of Cash Flows

 

   Twelve Months Ended 
   12/31/2017   12/31/2016 
         
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net Income  $12,668,034   $11,534,559 
Non-Cash Items Included in Net Income:          
Depreciation   27,557,746    23,214,100 
Amortization of Financing Costs   660,910    733,485 
Stock Compensation Expense   1,314,491    1,064,678 
Provision for Uncollectible Notes and Other Receivables   (1,273,535)   909,397 
Gain on Sales of Securities, net   (1,747,528)   (2,285,301)
Loss on Sales of Investment Property and Equipment   80,930    2,163 
Changes in Operating Assets and Liabilities:          
Inventory of Manufactured Homes   (144,791)   (3,113,164)
Notes and Other Receivables, net of Notes Acquired with Acquisitions   215,684    (1,204,014)
Prepaid Expenses and Other Assets   1,040,854    (435,124)
Accounts Payable   (1,298)   145,747 
Accrued Liabilities and Deposits   161,727    (1,878,719)
Tenant Security Deposits   807,938    665,605 
Net Cash Provided by Operating Activities   41,341,162    29,353,412 
           
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchase of Manufactured Home Communities, net of Mortgages Assumed   (61,669,247)   (4,081,798)
Purchase of Investment Property and Equipment   (62,009,984)   (58,184,812)
Proceeds from Sales of Investment Property and Equipment   2,299,670    1,114,503 
Additions to Land Development Costs   (3,881,035)   (3,728,869)
Purchase of Securities Available for Sale   (45,075,311)   (27,518,151)
Proceeds from Sales of Securities Available for Sale   17,416,146    14,831,737 
Net Cash Used in Investing Activities   (152,919,761)   (77,567,390)
           
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from Mortgages, net of Mortgages Assumed   44,420,000    31,804,000 
Net Proceeds on Short Term Borrowings   26,401,635    406,935 
Principal Payments of Mortgages and Loans   (34,970,645)   (25,072,315)
Financing Costs on Debt   (641,471)   (668,338)
Proceeds from Issuance of Preferred Stock, net of offering costs   138,975,847    49,120,853 
Redemption of 8.25% Series A Preferred Stock   (91,595,000)   -0- 
Proceeds from Registered Direct Placement of Common Stock, net of Offering Costs   22,518,238    -0- 
Proceeds from Issuance of Common Stock in the DRIP, net of Dividend Reinvestments   57,506,016    20,012,393 
Proceeds from Exercise of Stock Options   5,435,634    2,485,060 
Preferred Dividends Paid   (16,665,934)   (14,563,645)
Common Dividends Paid, net of Reinvestments   (20,780,223)   (17,630,270)
Net Cash Provided by Financing Activities   130,604,097    45,894,673 
           
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   19,025,498    (2,319,305)
CASH AND CASH EQUIVALENTS – BEGINNING OF YEAR   4,216,592    6,535,897 
CASH AND CASH EQUIVALENTS – END OF YEAR  $23,242,090   $4,216,592 


 

UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information6
  

 

Reconciliation of Net Income to Adjusted EBITDA and Net Loss Attributable

to Common Shareholders to FFO, Core FFO and Normalized FFO

(unaudited)

 

   Three Months Ended   Twelve Months Ended 
   12/31/2017   12/31/2016   12/31/2017   12/31/2016 
Reconciliation of Net Income to Adjusted EBITDA                   
                     
Net Income  $3,530,616   $3,376,615   $12,668,034   $11,534,559 
Interest Expense   3,835,982    3,828,241    15,876,972    15,432,364 
Franchise Taxes   (33,775)   26,225    245,000    305,000 
Depreciation Expense   7,297,190    6,121,424    27,557,746    23,214,100 
Acquisition Costs   -0-    27,871    -0-    79,231 
                     
Adjusted EBITDA  $14,630,013   $13,380,376   $56,347,752   $50,565,254 
                     
Reconciliation of Net Loss Attributable to Common Shareholders to Funds from Operations      
                     
Net Loss Attributable to Common Shareholders  $(795,765)  $(413,132)  $(7,679,265)  $(2,568,873)
Depreciation Expense    7,297,190    6,121,424    27,557,746    23,214,100 
(Gain) Loss on Sales of Depreciable Assets   51,390    (21,347)   80,930    2,163 
                     
Funds from Operations (“FFO”)   6,552,815    5,686,945    19,959,411    20,647,390 
                     
Adjustments:                    
Acquisition Costs   -0-    27,871    -0-    79,231 
Cost of Early Extinguishment of Debt   -0-    5,121    -0-    5,121 
Redemption of Preferred Stock   -0-    -0-    3,502,487    -0- 
                     
Core Funds from Operations (“Core FFO”)   6,552,815    5,719,937    23,461,898    20,731,742 
                     
Adjustments:                    
Gain on Sale of Securities, net   (229,239)   (386,465)   (1,747,528)   (2,285,301)
                     
Normalized Funds From Operations (“Normalized FFO”)  $6,323,576   $5,333,472   $21,714,370   $18,446,441 

 

UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information7
  

 

Market Capitalization, Debt and Coverage Ratios

(unaudited)

 

   Twelve Months Ended 
   12/31/2017   12/31/2016 
Shares Outstanding   35,488,068    29,388,811 
Market Price Per Share  $14.90   $15.05 
Equity Market Capitalization  $528,772,213   $442,301,606 
Total Debt   389,599,604    351,310,977 
Preferred   238,780,000    186,625,000 
Total Market Capitalization  $1,157,151,817   $980,237,583 
           
Total Debt  $389,599,604   $351,310,977 
Less: Cash and Cash Equivalents   (23,242,090)   (4,216,592)
Net Debt   366,357,514    347,094,385 
Less: Securities Available for Sale at Fair Value (“Securities”)   (132,964,276)   (108,755,172)
Net Debt Less Securities  $233,393,238   $238,339,213 
           
Interest Expense  $15,876,972   $15,432,364 
Capitalized Interest   500,859    359,906 
Preferred Dividends   16,844,812    14,103,432 
Total Fixed Charges  $33,222,643   $29,895,702 
           
Adjusted EBITDA  $56,347,752   $50,565,254 
           
Debt and Coverage Ratios          
           
Net Debt / Total Market Capitalization   31.7%   35.4%
           
Net Debt Plus Preferred / Total Market Capitalization   52.3%   54.4%
           
Net Debt Less Securities / Total Market Capitalization   20.2%   24.3%
           
Net Debt Less Securities Plus Preferred / Total Market Capitalization   40.8%   43.4%
           
Interest Coverage   3.4x   3.2x
           
Fixed Charge Coverage   1.7x   1.7x
           
Net Debt / Adjusted EBITDA   6.5x   6.9x
           
Net Debt Less Securities / Adjusted EBITDA   4.1x   4.7x
           
Net Debt Plus Preferred / Adjusted EBITDA   10.7x   10.6x
           
Net Debt Less Securities Plus Preferred / Adjusted EBITDA   8.4x   8.4x


 

UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information8
  

 

Debt Analysis

(unaudited)

 

   Twelve Months Ended 
   12/31/2017   12/31/2016 
Debt Outstanding          
Mortgages Payable:          
Fixed Rate Mortgages (1)  $308,444,180   $296,209,454 
Variable Rate Mortgages   16,606    354,529 
           
Total Mortgages Before Unamortized Debt Issuance Costs   308,460,786    296,563,983 
Unamortized Debt Issuance Costs   (3,565,669)   (3,538,391)
Mortgages, Net of Unamortized Debt Issuance Costs  $304,895,117   $293,025,592 
Loans Payable:          
Unsecured Line of Credit  $35,000,000   $20,000,000 
Other Loans Payable   49,765,824    38,393,439 
           
Total Loans Before Unamortized Debt Issuance Costs   84,765,824    58,393,439 
Unamortized Debt Issuance Costs   (61,337)   (108,054)
Loans, Net of Unamortized Debt Issuance Costs  $84,704,487   $58,285,385 
           
Total Debt, Net of Unamortized Debt Issuance Costs  $389,599,604   $351,310,977 
           
% Fixed/Floating          
Fixed   80.1%   85.0%
Floating   19.9%   15.0%
Total   100.0%   100.0%
           
Weighted Average Interest Rates (2)          
Mortgages Payable   4.24%   4.34%
Loans Payable   3.14%   3.06%
Total Average   4.01%   4.13%

 

Notes:

(1) Includes a variable rate mortgage with a balance of $-0-, and $10,625,352 as of December 31, 2017 and 2016, respectively, which had 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. | Fourth Quarter FY 2017 Supplemental Information9
  

 

Debt Maturity

(unaudited)

 

 

As of 12/31/17:                
Fiscal Year Ended  Mortgages   Loans   Total   % of Total 
2018  $16,606   $2,776,329   $2,792,935    0.7%
2019   2,633,664    4,506,895    7,140,559    1.8%
2020   12,144,422    39,526,583 (1)   51,671,005    13.1%
2021   2,194,312    420,131    2,614,443    0.7%
2022   20,904,217    236,217    21,140,434    5.4%
Thereafter   270,567,565    37,299,669    307,867,234    78.3%
                     
Total Debt Before Unamortized Debt Issuance Cost   308,460,786    84,765,824    393,226,610    100.0%
                     
Unamortized Debt Issuance Cost   3,565,669    61,337    3,627,006      
                     
Total Debt, Net of Unamortized Debt Issuance Costs  $304,895,117   $84,704,487   $389,599,604      

 

Notes:
(1) Includes $35 million balance outstanding on the Company’s Line of Credit due March 2020, with an additional one year option.

 

UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information10
  

 

Property Summary and Snapshot

(unaudited)

 

   12/31/2017   12/31/2016   Change 
             
Communities   112    101    10.9%
Developed Sites   20,029    18,054    10.9%
Occupied   16,208    14,499    11.8%
Occupancy % (1)   81.4%   81.0%   40bps
Total Rentals   5,607    4,659    20.3%
Occupied Rentals   5,213    4,261    22.3%
Rental Occupancy %   93.0%   91.5%   150bps
Monthly Rent Per Site  $428   $422    1.4%
Monthly Rent per Home Rental Including Site  $726   $709    2.4%

 

Region  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    3,221    2,497    77.5%  $397    1,052    1,002    95.2%  $731 
Maryland   1    77    10    67    63    58    92.1%  $478    -0-    -0-    N/A    N/A 
Michigan   2    68    68    -0-    354    259    73.2%  $432    165    151    91.5%  $721 
New Jersey   4    349    187    162    1,005    959    95.4%  $607    36    34    94.4%  $953 
New York   7    617    308    309    1,144    943    82.4%  $508    289    268    92.7%  $860 
Ohio   32    1,475    1,065    410    5,099    4,038    79.2%  $365    1,374    1,293    94.1%  $662 
Pennsylvania   48    2,087    1,728    359    7,343    5,878    80.0%  $436    1,891    1,712    90.5%  $751 
Tennessee   7    413    321    92    1,800    1,576    87.6%  $445    800    753    94.1%  $722 
Total as of December 31, 2017   112    5,902    4,372    1,530    20,029    16,208    81.4%  $428    5,607    5,213    93.0%  $726 

 

Notes:
(1) The 144 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. | Fourth Quarter FY 2017 Supplemental Information11
  

 

Same Property Statistics

(unaudited)

 

   For Three Months Ended   For Twelve Months Ended 
   12/31/2017   12/31/2016   Change   % Change   12/31/2017   12/31/2016   Change   % Change 
Community Net Operating Income                                        
                                         
Rental and Related Income  $24,461,737   $23,229,637   $1,232,100    5.3%  $95,973,126   $90,505,068   $5,468,058    6.0%
Community Operating Expenses   10,526,340    9,969,780    556,560    5.6%   41,968,168    40,309,468    1,658,700    4.1%
                                         
Community NOI  $13,935,397   $13,259,857   $675,540    5.1%  $54,004,958   $50,195,600   $3,809,358    7.6%

 

   As of     
   12/31/2017   12/31/2016   Change 
Other Information               
Total Sites   17,605    17,609    0.0%
Occupied Sites   14,561    14,292    1.9%
Occupancy %   82.7%   81.2%   150bps
Number of Properties   98    98    N/A 
Total Rentals   5,254    4,610    14.0%
Occupied Rentals   4,913    4,245    15.7%
Rental Occupancy   93.5%   92.1%   140bps
Monthly Rent Per Site  $436   $423    3.1%
Monthly Rent Per Home Rental Including Site  $723   $709    2.0%

 

Notes:
Same Property includes all properties owned as of January 1, 2016, with the exception of Memphis Blues.

 

UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information12
  

 

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 

 

 

2017 Acquisitions

 

Community  Date of
Acquisition		   State   Number
of Sites		   Purchase
Price		   Number
of Acres		   Occupancy 
                         
Marysville Estates and Hillcrest Estates   January 20, 2017    OH    532   $9,588,000    149    57%
Boardwalk and Parke Place   January 20, 2017    IN    559    24,437,000    155    77%
Hillcrest Crossing   January 24, 2017    PA    200    2,485,000    78    40%
Cinnamon Woods   May 31, 2017    MD    63    4,000,000    79    92%

Pennsylvania 5 Community Portfolio

   December 22, 2017    PA    643    22,780,000    141    72%
Total 2017             1,997   $63,290,000    602    67%

 

UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information13
  

 

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 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 and costs of early extinguishment of debt. Normalized FFO reflects the same assumptions as Core FFO except that it also adjusts for gains and losses realized on 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 acquisition costs and costs of extinguishment of debt.

 

Normalized FFO is calculated as Core FFO excluding gains and losses realized on 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 35,478,000 and 33,146,000 shares for the three and twelve months ended December 31, 2017, respectively, and 29,279,000 and 28,136,000 for the three and twelve months ended December 31, 2016, respectively. Common stock equivalents resulting from stock options in the amount of 406,000 and 470,000 shares for the three and twelve months ended December 31, 2017, respectively, and 449,000 and 327,000 shares for the three and twelve months ended December 31, 2016, respectively, 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, 2016, with the exception of Memphis Blues.

 

Adjusted EBITDA is calculated as net income plus interest expense, franchise taxes, depreciation, amortization and acquisition costs.

 

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. | Fourth Quarter FY 2017 Supplemental Information14
  

 

Press Release Dated March 8, 2018

 

FOR IMMEDIATE RELEASE March 8, 2018
  Contact: Nelli Madden
  732-577-9997

 

UMH PROPERTIES, INC. REPORTS RESULTS FOR THE YEAR ENDED AND THE FOURTH QUARTER ENDED DECEMBER 31, 2017

 

FREEHOLD, NJ, March 8, 2018........ UMH Properties, Inc. (NYSE:UMH) reported Total Income of $112,648,000 for the year ended December 31, 2017 as compared to $99,214,000 for the year ended December 31, 2016, representing an increase of 14%. Total Income for the quarter ended December 31, 2017 was $28,697,000 as compared to $25,144,000 for the quarter ended December 31, 2016, representing an increase of 14%. Net Loss Attributable to Common Shareholders amounted to $7,679,000 or $0.24 per diluted share for the year ended December 31, 2017 as compared to $2,569,000 or $0.10 per diluted share for the year ended December 31, 2016. This increase was primarily due to a non-recurring, non-cash $3.5 million preferred redemption charge and to an increase in depreciation expense, attributable to acquisitions made. Net Loss Attributable to Common Shareholders amounted to $796,000 or $0.03 per diluted share for the quarter ended December 31, 2017 as compared to $413,000 or $0.02 per diluted share for the quarter ended December 31, 2016.

 

Core Funds from Operations (“Core FFO”) was $23,462,000 or $0.71 per diluted share for the year ended December 31, 2017 as compared to $20,731,000 or $0.74 per diluted share for the year ended December 31, 2016, representing a decrease in Core FFO per diluted share of 4%. Core FFO was $6,553,000 or $0.19 per diluted share for the quarter ended December 31, 2017 as compared to $5,719,000 or $0.20 per diluted share for the quarter ended December 31, 2016, representing a decrease in Core FFO per diluted share of 5%. Normalized Funds from Operations (“Normalized FFO”), was $21,714,000 or $0.66 per diluted share for the year ended December 31, 2017, as compared to $18,446,000 or $0.66 per diluted share for the year ended December 31, 2016. Normalized FFO was $6,324,000 or $0.18 per diluted share for the quarter ended December 31, 2017, as compared to $5,333,000 or $0.18 per diluted share for the quarter ended December 31, 2016.

 

A summary of significant financial information for the three and twelve months ended December 31, 2017 and 2016 is as follows:

 

   For the Three Months Ended 
   December 31, 
   2017   2016 
         
Total Income  $28,697,000   $25,144,000 
Total Expenses  $24,568,000   $20,635,000 
Gain on Sales of Securities, net  $229,000   $386,000 
Net Loss Attributable to Common Shareholders  $(796,000)  $(413,000)
Net Loss Attributable to Common Shareholders per Diluted Common Share  $(0.03)  $(0.02)
Core FFO (1)  $6,553,000   $5,719,000 
Core FFO (1) per Diluted Common Share   $0.19   $0.20 
Normalized FFO (1)  $6,324,000   $5,333,000 
Normalized FFO (1) per Diluted Common Share  $0.18   $0.18 
Weighted Average Shares Outstanding   35,072,000    28,830,000 

 


UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information15
  

 

   For the Twelve Months Ended 
   December 31, 
   2017   2016 
         
Total Income  $112,648,000   $99,214,000 
Total Expenses  $96,616,000   $83,256,000 
Gain on Sales of Securities, net  $1,748,000   $2,285,000 
Net Loss Attributable to Common Shareholders  $(7,679,000)  $(2,569,000)
Net Loss Attributable to Common Shareholders per Diluted Common Share  $(0.24)  $(0.10)
Core FFO (1)  $23,462,000   $20,731,000 
Core FFO (1) per Diluted Common Share   $0.71   $0.74 
Normalized FFO (1)  $21,714,000   $18,446,000 
Normalized FFO (1) per Diluted Common Share  $0.66   $0.66 
Weighted Average Shares Outstanding   32,676,000    27,809,000 

 

A summary of significant balance sheet information as of December 31, 2017 and 2016 is as follows:

 

   December 31, 2017   December 31, 2016 
         
Gross Real Estate Investments  $764,439,000   $640,217,000 
Securities Available for Sale at Fair Value  $132,964,000   $108,755,000 
Total Assets  $823,881,000   $680,445,000 
Mortgages Payable, net  $304,895,000   $293,026,000 
Loans Payable, net  $84,704,000   $58,285,000 
Total Shareholders’ Equity  $421,215,000   $317,032,000 

 

Samuel A. Landy, President and CEO, commented on the 2017 results.

 

“We are pleased to announce a very productive 2017. We have generated solid operating results, achieved strong growth and improved our financial position. We have reached a number of milestones this year. We now own and operate 112 manufactured home communities with over 20,000 developed homesites. We have been included in the MSCI REIT index. We have reached an all-time high stock price of $17.90. Our total market capitalization is over $1 billion with an equity market capitalization of over $500 million. Our accomplishments during the year include:

 

  ● Increased Rental and Related Income by 12.3%;
  ● Increased Community Net Operating Income (“NOI”) by 12.3%;
  ● Increased Same Property NOI by 7.6%
  ● Increased Same Property Occupancy by 150 basis points from 81.2% to 82.7%;
  ● Increased home sales by 27.1%;
  ● Acquired 11 communities containing approximately 2,000 home sites for a total cost of $63.3 million, including our first community in Maryland, bringing our total property portfolio to 112 manufactured home communities with over 20,000 developed homesites;
  ● Completed Phase I of a redevelopment community, Memphis Blues, our first all rental community;
  ● Increased our rental home portfolio by 948 homes to approximately 5,600 total rental homes, representing an increase of 20.3%;
  ● Increased rental home occupancy by 150 basis points from 91.5% to 93.0%;
  ● Reduced the weighted average interest rate on our mortgage debt from 4.3% to 4.2%;
  ● Reduced the weighted average interest rate on our total debt from 4.1% to 4.0%;
  ● Issued 5,750,000 shares of a new 6.75% Series C Cumulative Redeemable Preferred Stock, for net proceeds after deducting the underwriting discount and other estimated offering expenses, of approximately $139 million;

 

UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information16
  

 

  ● Redeemed our high coupon 8.25% Series A Preferred Stock, resulting in $1.4 million in annual preferred dividend savings;
  ● Issued 1,400,000 shares of our common stock raising net proceeds of $22.5 million, in conjunction with our inclusion in the MSCI REIT Index;
  ● Raised $60.4 million through our Dividend Reinvestment and Stock Purchase Plan;
  ● Reduced our Net Debt to Total Market Capitalization from 35.4% to 31.7% and our Net Debt Less Securities to Total Market Capitalization from 24.3% to 20.2%; and,
  ● Increased our total market capitalization to $1.2 billion, representing an increase of 18%.”

 

Mr. Landy stated, “This year, we successfully replaced all of the outstanding shares of our high coupon 8.25% Series A Preferred Stock with our new 6.75% Series C Perpetual Preferred Stock. This 150 basis point reduction will result in $1.4 million in annual preferred dividend savings going forward. Our 2017 earnings were impacted due to the expenses associated with completing this transaction, including a non-recurring, non-cash $3.5 million preferred redemption charge, and the short-term dilution associated with carrying the additional preferred stock until it was fully deployed. For the fourth quarter, our Normalized FFO was $0.18 per diluted share. We are pleased that our Normalized FFO for the quarter fully covered our $0.18 dividend.”

 

“Subsequent to yearend, UMH issued and sold 2,000,000 shares of a new 6.375% Series D Cumulative Redeemable Preferred Stock, and received net proceeds from the offering after expenses of approximately $48.1 million. We expect increased earnings as we fully deploy these proceeds.”

 

“In 2017, we increased our community portfolio by 11%. We acquired 11 communities containing approximately 2,000 developed homesites for an aggregate cost of approximately $63.3 million. The average occupancy of these communities is 67%. These communities are located within our existing footprint and provide additional growth opportunities through the filling of vacant sites and from expansion capabilities.”

 

“Home sales have been improving and increased 27% this year. With population growth, rising wages and steady job creation, housing demand should continue to increase. Our customers are seeing increased wages which is translating into rising housing demand.”

 

“Same Property NOI increased by 7.6% this year, driven by a 150 basis point increase in occupancy and a 310 basis point increase in site rent. Our 2017 accomplishments reflect consistent strong performance across our portfolio and position us for continued success in 2018.”

 

UMH Properties, Inc. will host its Fourth Quarter and Year End 2017 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Friday, March 9, 2018 at 10:00 a.m. Eastern Time.

 

The Company’s 2017 fourth quarter and yearend financial results being released herein will be available on the Company’s website at www.umh.reit in the “Financial Information and Filings” section.

 

To participate in the webcast, select the microphone icon found on the homepage www.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, March 9, 2018. It will be available until June 9, 2018, and can be accessed by dialing toll free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10116327. A transcript of the call and the webcast replay will be available at the Company’s website, www.umh.reit.

 

UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information17
  

 

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:

 

  (1) 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 acquisition costs and costs of early extinguishment of debt. We define Normalized Funds From Operations (“Normalized FFO”) as Core FFO excluding gains and losses realized on 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.
     
    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 and twelve months ended December 31, 2017 and 2016 are calculated as follows:

 

   Three Months Ended   Twelve Months Ended 
   12/31/17   12/31/16   12/31/17   12/31/16 
Net Loss Attributable to Common Shareholders  $(796,000)  $(413,000)  $(7,679,000)  $(2,569,000)
Depreciation Expense   7,297,000    6,121,000    27,557,000    23,214,000 
(Gain) Loss on Sales of Depreciable Assets   52,000    (22,000)   81,000    2,000 
FFO Attributable to Common Shareholders   6,553,000    5,686,000    19,959,000    20,647,000 
Acquisition Costs   -0-    28,000    -0-    79,000 
Cost of Early Extinguishment of Debt   -0-    5,000    -0-    5,000 
Redemption of Preferred Stock   -0-    -0-    3,503,000    -0- 
Core FFO Attributable to Common Shareholders   6,553,000    5,719,000    23,462,000    20,731,000 
Gain on Sales of Securities, net   (229,000)   (386,000)   (1,748,000)   (2,285,000)
Normalized FFO Attributable to Common Shareholders  $6,324,000   $5,333,000   $21,714,000   $18,446,000 

 

The diluted weighted shares outstanding used in the calculation of Core FFO per Diluted Common Share and Normalized FFO per Diluted Common Share were 35,478,000 and 33,146,000 shares for the three and twelve months ended December 31, 2017, respectively, and 29,279,000 and 28,136,000 for the three and twelve months ended December 31, 2016, respectively. Common stock equivalents resulting from stock options in the amount of 406,000 and 470,000 shares for the three and twelve months ended December 31, 2017, respectively, and 449,000 and 327,000 shares for the three and twelve months ended December 31, 2016, respectively, 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.

 

UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information18
  

 

The following are the cash flows provided (used) by operating, investing and financing activities for the twelve months ended December 31, 2017 and 2016:

 

   2017   2016 
Operating Activities  $41,341,000   $29,353,000 
Investing Activities   (152,920,000)   (77,567,000)
Financing Activities   130,604,000    45,895,000 

 

# # # #

 

 

 

 

UMH Properties, Inc. | Fourth Quarter FY 2017 Supplemental Information19