Supplemental Information				June 30, 2015

 

UMH Properties, Inc.
Juniper Business Plaza		Website: www.umh.com
3499 Route 9 North, Suite 3C		Email: umh@umh.com
Freehold, NJ 07728		Phone: (732) 577-9997

 

Table of Contents
	Page
Financial Highlights	3
Consolidated Balance Sheets	4
Consolidated Statements of Income (Loss)	5
Consolidated Statement of Cash Flows	6
Reconciliation of Net Income to EBITDA and Net Loss Attributable	7
to Common Shareholders to FFO, Core FFO and Normalized FFO
Market Capitalization, Debt and Coverage Levels	8
Debt Analysis and Debt Maturity	9
Property Summary and Snapshot	10
Acquisition Summary	11
Same Property Statistics	12
Marcellus and Utica Shale Region Exposure	13
Definitions	14
Press Release Dated August 6, 2015	15

 

The statement of income (loss) and supplemental statement of income (loss) provided in this supplemental information package present funds from operations, core funds from operations, community NOI, same property NOI and EBITDA which 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 supplemental performance measures. Please see the supplemental statement of income (loss) reconciliation for a reconciliation of certain captions in the supplemental statement of income (loss) reported in this supplemental information package to the statement of income (loss) as reported in the Company's filings with the SEC on Form 10-Q.

 

Financial Highlights
(unaudited)
		Three Months Ended						Six Months Ended
		6/30/2015			6/30/2014			6/30/2015			6/30/2014
Operating Information
Number of Communities		92			82			92			82
Rental and Related Income	$	17,937,342		$	15,768,908		$	35,153,028		$	30,615,684
Community Operating Expenses	$	9,139,539		$	8,341,946		$	17,952,028		$	16,629,555
Community NOI	$	8,797,803		$	7,426,962		$	17,201,000		$	13,986,129
Expense Ratio		51.0%			52.9%			51.1%			54.3%
Sales of Manufactured Homes		1,616,101			2,379,824			2,744,501			3,382,229
Number of Homes Sold		32			40			56			60
Net Income	$	203,982		$	1,476,725		$	922,499		$	2,044,914
Net Loss Attributable to
Common Shareholders	$	(1,685,165)		$	(412,422)		$	(2,855,795)		$	(1,733,380)
EBITDA	$	8,117,632		$	7,902,568		$	16,094,577		$	14,317,134
FFO	$	2,839,959		$	3,213,837		$	5,892,890		$	5,353,195
Core FFO	$	3,117,603		$	3,213,837		$	6,276,665		$	5,638,374
Normalized FFO	$	3,096,055		$	2,506,783		$	6,321,917		$	4,422,917
Shares Outstanding and Per Share Data
Weighted Average Shares   Outstanding-
Basic		25,645,978			22,054,132			25,210,785			21,655,236
Diluted		25,702,375			22,104,120			25,262,049			21,700,948
Community NOI -   Basic	$	0.34		$	0.34		$	0.68		$	0.65
Diluted	$	0.34		$	0.34		$	0.68		$	0.64
Net Loss Attributable to Common Shareholders per Share - Basic and Diluted	$	(0.06)		$	(0.02)		$	(0.11)		$	(0.08)
FFO per Share-   Basic and Diluted	$	0.11		$	0.15		$	0.23		$	0.25
Core FFO per Share- Basic and Diluted	$	0.12		$	0.15		$	0.25		$	0.26
Normalized FFO per Share-  Basic and Diluted	$	0.12		$	0.11		$	0.25		$	0.20
Dividends per Common Share	$	0.18		$	0.18		$	0.36		$	0.36
Balance Sheet
Total Assets	$	506,012,157		$	449,835,786		$	506,012,157		$	449,835,786
Total Liabilities	$	300,466,761		$	248,655,841		$	300,466,761		$	248,655,841
Market Capitalization
Total Debt	$	289,247,946		$	239,478,269		$	289,247,946		$	239,478,269
Equity Market Capitalization	$	255,062,199		$	225,271,985		$	255,062,199		$	225,271,985
Preferred Stock	$	91,595,000		$	91,595,000		$	91,595,000		$	91,595,000
Total Market Capitalization	$	635,905,145		$	556,345,254		$	635,905,145		$	556,345,254

 

Consolidated Balance Sheets
		June 30,			December 31,
		2015			2014
ASSETS		(unaudited)
Investment Property and Equipment
Land	$	40,811,514		$	39,133,514
Site and Land Improvements		314,349,213			299,776,250
Buildings and Improvements		18,033,386			17,534,698
Rental Homes and Accessories		106,739,856			91,719,997
Total Investment Property		479,933,969			448,164,459
Equipment and Vehicles		12,858,037			12,242,086
Total Investment Property and Equipment		492,792,006			460,406,545
Accumulated Depreciation		(107,952,810)			(99,522,180)
Net Investment Property and Equipment		384,839,196			360,884,365
Other Assets
Cash and Cash Equivalents		9,030,833			8,082,792
Securities Available for Sale at Fair Value		63,347,985			63,555,961
Inventory of Manufactured Homes		14,117,326			12,306,715
Notes and Other Receivables, net		20,228,331			21,992,566
Unamortized Financing Costs		3,174,403			2,228,779
Prepaid Expenses and Other Assets		5,149,091			3,356,034
Land Development Costs		6,124,992			5,861,764
Total Other Assets		121,172,961			117,384,611
TOTAL ASSETS	$	506,012,157		$	478,268,976
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Mortgages Payable	$	224,311,606		$	182,670,854
Other Liabilities
Accounts Payable		2,756,693			1,824,293
Loans Payable		64,936,340			77,439,230
Accrued Liabilities and Deposits		5,392,905			4,757,604
Tenant Security Deposits		3,069,217			2,749,890
Total Other Liabilities		76,155,155			86,771,017
Total Liabilities		300,466,761			269,441,871
COMMITMENTS AND CONTINGENCIES
Shareholders' Equity:
Series A - 8.25% Cumulative Redeemable Preferred Stock, Par Value $0.10,
Per Share: 3,663,800 Shares Authorized, Issued and Outstanding as of
June 30, 2015 and December 31, 2014		91,595,000			91,595,000
Common Stock – $0.10 Par Value Per Share: 42,000,000 Shares Authorized;
26,026,755 and 24,372,083  Shares Issued and Outstanding as of
June 30, 2015 and December 31, 2014		2,602,676			2,437,208
Excess Stock – $0.10 Par Value Per Share: 3,000,000 Shares Authorized;
No Shares Issued or Outstanding		-0-			-0-
Additional Paid-In Capital		113,852,090			110,422,454
Accumulated Other Comprehensive Income		(1,836,577)			5,040,236
Accumulated Deficit		(667,793)			(667,793)
Total Shareholders' Equity		205,545,396			208,827,105
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	506,012,157		$	478,268,976

 

Consolidated Statements of Income (Loss)
(unaudited)
		Three Months Ended						Six Months Ended
		6/30/2015			6/30/2014			6/30/2015			6/30/2014
INCOME:
Rental and Related Income	$	17,937,342		$	15,768,908		$	35,153,028		$	30,615,684
Sales of Manufactured Homes		1,616,101			2,379,824			2,744,501			3,382,229
TOTAL INCOME		19,553,443			18,148,732			37,897,529			33,997,913
EXPENSES:
Community Operating Expenses		9,139,539			8,341,946			17,952,028			16,629,555
Cost of Sales of Manufactured Homes		1,238,854			1,944,233			2,119,524			2,710,612
Selling Expenses		658,028			752,136			1,343,567			1,472,815
General and Administrative Expenses		1,808,958			1,779,056			3,465,658			3,382,979
Acquisition Costs		188,248			-0-			294,379			285,179
Depreciation Expense		4,451,195			3,672,454			8,679,469			7,110,126
TOTAL EXPENSES		17,484,822			16,489,825			33,854,625			31,591,266
OTHER INCOME (EXPENSE):
Interest Income		466,129			537,771			944,462			1,085,014
Dividend Income		1,006,876			1,004,610			2,101,654			2,064,075
Gain on Sale of Securities Transactions, net		21,548			707,054			79,748			1,215,457
Other Income		88,692			191,577			138,556			244,264
Interest Expense		(3,238,109)			(2,530,528)			(6,049,720)			(4,738,653)
Amortization of Financing Costs		(135,846)			(138,861)			(265,889)			(255,441)
TOTAL OTHER INCOME (EXPENSE)		(1,790,710)			(228,377)			(3,051,189)			(385,284)
Income before Gain (Loss) on Sales of
Investment Property and Equipment		277,911			1,430,530			991,715			2,021,363
Gain (Loss) on Sales of Investment Property
And Equipment		(73,929)			46,195			(69,216)			23,551
NET INCOME		203,982			1,476,725			922,499			2,044,914
Less:  Preferred Dividend		1,889,147			1,889,147			3,778,294			3,778,294
NET LOSS ATTRIBUTABLE TO
COMMON SHAREHOLDERS	$	(1,685,165)		$	(412,422)		$	(2,855,795)		$	(1,733,380)

 

 

Consolidated Statements of Cash Flows
(unaudited)
		6/30/2015			6/30/2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	922,499		$	2,044,914
Non-Cash Adjustments:
Depreciation		8,679,469			7,110,126
Amortization of Financing Costs		265,889			255,441
Stock Compensation Expense		453,678			562,896
Increase in Provision for Uncollectible Notes and Other Receivables		532,530			455,913
Gain on Sales of Securities Transactions, net		(79,748)			(1,215,457)
(Gain) Loss on Sales of Investment Property and Equipment		69,216			(23,551)
Changes in Operating Assets and Liabilities:
Inventory of Manufactured Homes		(1,810,611)			(3,141,207)
Notes and Other Receivables		1,231,705			116,946
Prepaid Expenses and Other Assets		(1,793,057)			300,138
Accounts Payable		932,400			894,012
Accrued Liabilities and Deposits		523,496			231,913
Tenant Security Deposits		319,327			354,608
Net Cash Provided by Operating Activities		10,246,793			7,946,692
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Manufactured Home Communities, net of Mortgages Assumed		(10,326,524)			(6,837,261)
Purchase of Investment Property and Equipment		(20,349,094)			(15,126,286)
Proceeds from Sales of Assets		262,578			511,514
Additions to Land Development		(263,228)			(162,832)
Purchase of Securities Available for Sale		(7,528,787)			(5,018,926)
Proceeds from Sales of Securities Available for Sale		1,051,503			7,088,440
Net Cash Used in Investing Activities		(37,153,552)			(19,545,351)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Mortgages, net of Mortgages Assumed		57,655,000			-0-
Net Proceeds (Payments) on Short Term Borrowings		(12,502,890)			13,874,850
Principal Payments of Mortgages		(18,304,724)			(2,268,260)
Financing Costs on Debt		(1,211,513)			(241,177)
Proceeds from Issuance of Common Stock, net of Reinvestments		13,973,648			14,336,379
Proceeds from Exercise of Stock Options		151,200			-0-
Preferred Dividends Paid		(3,778,294)			(3,778,294)
Common Dividends Paid, net of Reinvestments		(8,127,627)			(6,931,849)
Net Cash Provided by Financing Activities		27,854,800			14,991,649
NET INCREASE  IN CASH AND CASH EQUIVALENTS		948,041			3,392,990
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD		8,082,792			7,615,143
CASH AND CASH EQUIVALENTS – ENDING OF PERIOD	$	9,030,833		$	11,008,133

 

 

Reconciliation of Net Income to EBITDA and Net Loss Attributable
to Common Shareholders to FFO, Core FFO and Normalized FFO
(unaudited)
			Three Months Ended						Six Months Ended
			6/30/2015			6/30/2014			6/30/2015			6/30/2014
Reconciliation of Net Income To EBITDA
	Net Income	$	203,982		$	1,476,725		$	922,499		$	2,044,914
	Add: Interest Expense		3,238,109			2,530,528			6,049,720			4,738,653
	Add: Franchise Taxes		88,500			84,000			177,000			168,000
	Add: Depreciation Expense		4,451,195			3,672,454			8,679,469			7,110,126
	Add: Amortization of Financing Costs		135,846			138,861			265,889			255,441
	EBITDA	$	8,117,632		$	7,902,568		$	16,094,577		$	14,317,134
Reconciliation of Net Loss Attributable to Common Shareholders to Funds from Operations
	Net Loss Attributable to
	Common Shareholders	$	(1,685,165)		$	(412,422)		$	(2,855,795)		$	(1,733,380)
	Add: Depreciation Expense		4,451,195			3,672,454			8,679,469			7,110,126
	Less: (Gain) Loss on Sales of
	Depreciable Assets		73,929			(46,195)			69,216			(23,551)
	Funds from Operations ("FFO")		2,839,959			3,213,837			5,892,890			5,353,195
	Adjustments:
	Add: Acquisition Costs		188,248			-0-			294,379			285,179
	Add: Cost of Early Extinguishment of Debt		89,396			-0-			89,396			-0-
	Core Funds from Operations ("Core FFO")		3,117,603			3,213,837			6,276,665			5,638,374
	Adjustments:
	Less: Gain on Sale of Securities
	Transactions, net		(21,548)			(707,054)			(79,748)			(1,215,457)
	Add: Settlement of Memphis Mobile
	City Litigation		-0-			-0-			125,000			-0-
	Normalized Funds From Operations
	(“Normalized FFO”)	$	3,096,055		$	2,506,783		$	6,321,917		$	4,422,917

 

Market Capitalization, Debt and Coverage Levels
(unaudited)
			Year to Date
			6/30/2015			6/30/2014
	Shares Outstanding		26,026,755			22,459,819
	Market Price Per Share	$	9.80		$	10.03
	Equity Market Capitalization	$	255,062,199		$	225,271,985
	Total Debt		289,247,946			239,478,269
	Preferred		91,595,000			91,595,000
	Total Market Capitalization	$	635,905,145		$	556,345,254
	Total Debt	$	289,247,946		$	239,478,269
	Less: Cash and Cash Equivalents		(9,030,833)			(11,008,133)
	Net Debt		280,217,113			228,470,136
	Less: Securities Available for Sale at Fair Value (Securities)		63,347,985			62,822,789
	Net Debt Less Securities	$	216,869,128		$	165,647,347
	Interest Expense	$	6,049,720		$	4,738,653
	Capitalized Interest		143,114			128,806
	Preferred Dividends Paid		3,778,294			3,778,294
	Total Fixed Charges	$	9,971,128		$	8,645,753
	EBITDA	$	16,094,577		$	14,317,134
DEBT AND COVERAGE RATIOS
	Net Debt / Total Market Capitalization		44.1%			41.1%
	Net Debt + Preferred / Total Market Capitalization		58.5%			57.5%
	Net Debt Less Securities / Total Market Capitalization		34.1%			29.8%
	Net Debt Less Securities + Preferred / Total Market Capitalization		48.5%			46.2%
	Interest Coverage		5.3x			6.0x
	Fixed Charge Coverage		1.6x			1.7x
	Net Debt / EBITDA		8.7x			8.0x
	Net Debt Less Securities/ EBITDA		6.7x			5.8x
	Net Debt + Preferred / EBITDA		11.6x			11.2x

 

Debt Analysis
(unaudited)			Year to Date
			6/30/2015			6/30/2014
DEBT OUTSTANDING
	Mortgages Payable	$	224,311,606		$	176,484,423
	Loans Payable:
	Unsecured Line of Credit		30,000,000			30,000,000
	Other Loans Payable		34,936,340			32,993,846
	Total Loans Payable		64,936,340			62,993,846
	Total Debt	$	289,247,946		$	239,478,269
% FIXED/FLOATING
	Fixed		71.2%			70.3%
	Floating		28.8%			29.7%
	Total		100.0%			100.0%
WEIGHTED AVERAGE INTEREST RATES
	Mortgages Payable		4.62%			4.76%
	Loans Payable		3.45%			3.19%
	Total Average		4.36%			4.35%

 

Debt Maturity

Total Debt (000’s)

 

Fiscal Year Ended		Mortgages		Loans			Total	% of Total
2016	$	8,706,507	$	30,000,000	(1)	$	38,706,507	13.4%
2017		41,472,331		-			41,472,331	14.3%
2018		16,117,996		-			16,117,996	5.6%
2019		3,252,035		4,000,000			7,252,035	2.5%
2020		13,051,528					13,051,528	4.5%
Thereafter		141,711,209		30,936,340			172,647,549	59.7%
Total as of 06/30/2015	$	224,311,606	$	64,936,340		$	289,247,946	100.0%
Notes:
(1) Includes $35 million Line of Credit due March 2016, which has a one year extension option.

 

Property Summary and Snapshot

 

(unaudited)

 

	6/30/2015		6/30/2014
Communities	92		82
Developed Sites	15,654		14,459
Occupied	12,702		11,681
Occupancy % (1)	82.0%		81.7%

 

  

As of June 30, 2015:
Region	Number	Total Acreage	Developed Acreage	Vacant Acreage	Total Sites	Occupied Sites	Occupancy Percentage		Monthly Rent Per Site
		(2)		(2)			(1)
Indiana	6	345	296	49	1,396	1,143	81.9%	$	381
Michigan	1	28	28	-0-	143	105	73.4%	$	386
New Jersey	4	348	187	162	1,006	959	95.3%	$	570
New York	7	396	301	96	1,132	901	79.6%	$	466
Ohio	25	993	770	225	3,627	2,835	78.2%	$	321
E. Pennsylvania	26	963	805	159	3,608	3,053	84.6%	$	441
W. Pennsylvania	16	904	723	181	2,920	2,192	75.1%	$	377
Tennessee	7	413	321	92	1,822	1,514	83.1%	$	407
	92	4,390	3,431	964	15,654	12,702	82.0%	$	400

 

Notes:
(1) The 156 Vacant Sites at Memphis Mobile City are not Included in the calculation of occupancy.
(2) Total and Vacant Acreage of 220 for the Mountain View Estates property is not included in the summary since there are
no current sites and approval for sites is still in process.

 

Acquisition Summary
Year of Acquisition	Number of Communities	Sites	Occupied Sites	Occupancy %		Price	Total Acres
2012	17	1,727	1,559	90%	$	47,600,000	382
2013	17	2,738	2,279	83%	$	88,270,000	232
2014	14	1,612	1,230	76%	$	42,550,000	547
2015 to date	4	623	440	71%	$	12,617,000	223

 

2015 Acquisitions
Community	Date of Acquisition	State	Number of Sites		Purchase Price		Number of Acres	Occupancy
Holly Acres	January 21, 2015	PA	141	$	3,800,000		40	96%
Voyager Estates and
Huntingdon Pointe	April 23, 2015	PA	324		5,300,000		141	63%
Valley Stream	May 27, 2015	PA	158		3,517,000		43	64%
Total 2015 to Date			623	$	12,617,000		224

 

Same Property Statistics
(unaudited)
			For Three Months Ended											For Six Months Ended
			6/30/2015			6/30/2014			Change		% Change			6/30/2015			6/30/2014			Change		% Change
Community Net Operating Income
	Rental and Related
	Income	$	16,321,653		$	15,083,124		$	1,238,529		8.2%		$	32,220,638		$	29,773,724		$	2,446,914		8.2%
	Community Operating
	Expenses		7,340,495			7,376,152			(35,657)		-0.5%			15,292,754			15,402,114			(109,360)		-0.7%
	Community NOI	$	8,981,158		$	7,706,972		$	1,274,186		16.5%		$	16,927,884		$	14,371,610		$	2,556,274		17.8%

 

			Year to Date
			6/30/2015			6/20/2014			Change		% Change
OTHER INFORMATION
	Number of Properties		74			74			-		N/A
	Developed Acreage		2,907			2,907			-		N/A
	Vacant Acreage		722			722			-		N/A
	Total Sites		13,270			13,301			(31)		-0.2%
	Occupied Sites		11,062			10,969			93		0.8%
	Occupancy %		83.4%			82.5%			0.9%		N/A
	Monthly Rent Per Site	$	413		$	400		$	13		3.3%

 

 

Notes:

Same Property includes all properties owned as of January 1, 2014, with the exception of Memphis Mobile City.

 

Marcellus and Utica Shale Region Exposure

The Marcellus and Utica Shale Regions		UMH benefits from significant exposures
are large natural gas fields located		to the Marcellus and Utica Shale
beneath much of Pennsylvania, Ohio,		Regions with over 2,600 acres in
West Virginia and New York. These		existing communities.
fields have the potential to be among the
largest sources of natural gas in the
world. It is also expected that the activity		Total Acreage
surrounding the development of the		Total - 4,600
shale regions is to accelerate over the
next few years. With the rise in
development, economies in the shale
region are expected to benefit from
increase employment, wealth of
landowners, and state and local tax
revenues.
Demand for rental homes has already
increased substantially over the past
few years, as a result of the Marcellus
and Utica shale related activity. We are
meeting this demand by adding new
rentals homes to our portfolio.
Existing Home Communities

 

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 and amortization ("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, EBITDA, FFO, and Core 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 is also adjusts for the effects of acquisitions costs. 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. 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, EBITDA, FFO, and Core 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 cost of early extinguishment of debt.

 

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

 

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, 2014, with the exception of Memphis Mobile City.

 

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

 

Community NOI, Same Property NOI, 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, 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, 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.

 

Press Release Dated August 6, 2015

FOR IMMEDIATE RELEASE	August 6, 2015
	Contact: Nelli Madden
	732-577-9997

UMH PROPERTIES, INC. REPORTS 2nd QUARTER 2015 EARNINGS

 

FREEHOLD, NJ, August 6, 2015........ UMH Properties, Inc. (NYSE:UMH) reported Normalized Funds from Operations (Normalized FFO) of $3,096,000 or $0.12 per diluted share for the quarter ended June 30, 2015, as compared to $2,507,000 or $0.11 per diluted share for the quarter ended June 30, 2014. Normalized FFO for the six months ended June 30, 2015 was $6,322,000 or $0.25 per diluted share as compared to $4,423,000 or $0.20 a year ago. Core Funds from Operations (Core FFO), which includes realized gains on the sale of securities was $3,118,000 or $0.12 per diluted share for the quarter ended June 30, 2015, as compared to $3,214,000 or $0.15 per diluted share for the quarter ended June 30, 2014.

 

A summary of significant financial information for the three and six months ended June 30, 2015 and 2014 is as follows:

 

			For the Three Months Ended
			June 30,
			2015			2014
	Total Income	$	19,553,000		$	18,149,000
	Total Expenses	$	17,485,000		$	16,490,000
	Gain on Securities Transactions, net	$	22,000		$	707,000
	Net Loss Attributable to Common Shareholders	$	(1,685,000)		$	(412,000)
	Net Loss Attributable to Common Shareholders per Diluted Common Share	$	(0.06)		$	(0.02)
	Core FFO (1)	$	3,118,000		$	3,214,000
	Core FFO (1) per Diluted Common Share	$	0.12		$	0.15
	Normalized FFO (1)	$	3,096,000		$	2,507,000
	Normalized FFO (1) per Diluted Common Share	$	0.12		$	0.11
	Weighted Average Diluted Shares Outstanding		25,702,000			22,104,000

 

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			For the Six Months Ended
			June 30,
			2015			2014
	Total Income	$	37,898,000		$	33,998,000
	Total Expenses	$	33,855,000		$	31,591,000
	Gain on Securities Transactions, net	$	80,000		$	1,215,000
	Net Loss Attributable to Common Shareholders	$	(2,856,000)		$	(1,733,000)
	Net Loss Attributable to Common Shareholders per Diluted Common Share	$	(0.11)		$	(0.08)
	Core FFO (1)	$	6,277,000		$	5,638,000
	Core FFO (1) per Diluted Common Share	$	0.25		$	0.26
	Normalized FFO (1)	$	6,322,000		$	4,423,000
	Normalized FFO (1) per Diluted Common Share	$	0.25		$	0.20
	Weighted Average Diluted Shares Outstanding		25,262,000			21,701,000

 

A summary of significant balance sheet information as of June 30, 2015 and December 31, 2014 is as follows:

		June 30, 2015			December 31, 2014
Total Investment Property	$	479,934,000		$	448,164,000
Securities Available for Sale at Fair Value	$	63,348,000		$	63,556,000
Total Assets	$	506,012,000		$	478,269,000
Mortgages Payable	$	224,312,000		$	182,671,000
Loans Payable	$	64,936,000		$	77,439,000
Total Shareholders’ Equity	$	205,545,000		$	208,827,000

Samuel A. Landy, President and CEO, commented on the results of the second quarter of 2015:

“We are pleased with the progress achieved during the quarter. Normalized FFO was $3.1 million or $0.12 per diluted share for the second quarter of 2015, compared to $2.5 million or $0.11 per diluted share in the prior year period, representing an increase of 9% on a per share basis. For the six months, normalized FFO increased 25% to $0.25 per diluted share compared to $0.20 per diluted share a year ago. Because the $40 million net proceeds from our recent financing which was completed at the end of the first quarter have not yet been fully deployed, Normalized FFO was impacted this quarter by an increase in interest expense. The proceeds from this financing will go toward funding our upcoming acquisitions which will generate additional per share earnings accretion once they are fully deployed.” 

“Community Net Operating Income (NOI) increased 18% to $8.8 million for the second quarter of 2015, as compared to $7.4 million for the same period in 2014. This growth in earnings has been driven by our recent acquisitions, increased occupancy rates, and the addition of rental homes. Demand for rental units continues to be strong and we expect to add a total of approximately 700 occupied rental units this year. We have also continued to improve our same property metrics. Same property occupancy increased 90 basis points over the prior year period from 82.5% to 83.4% currently. Same property revenue increased 8.2% and

 

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expenses decreased 50 basis points. This resulted in an increase in same property NOI of 16.5% over ther prior year period. For the six months, same property NOI increased 17.8%. Our community operating expenses as a percent of rental and related income continue to trend down as we upgrade and integrate our acquisitions, and for the current quarter was 51.0%, representing a 190 basis point improvement over the prior year period.” 

“On the acquisition front, we acquired three Pennsylvania communities during the quarter containing a total of approximately 480 developed homesites for an aggregate purchase price of $8.8 million. In addition to the acquisitions completed thus far in 2015, we have a definitive agreement to purchase six manufactured home communities with a total of approximately 2,200 developed homesites located in Indiana, Ohio and Michigan for a purchase price of approximately $68.6 million.  This acquisition is expected to close during the second half of 2015. We are negotiating the refinancing of several of our existing communities, as well as the financing of four of the to-be-acquired communities to help fund our growing acquisition pipeline. We expect to raise approximately $60 to $65 million of net proceeds after the retirement of existing debt. UMH continues to seek acquisitions in our target markets.” 

“Our portfolio is now comprised of 92 communities, with 15,700 developed homesites, situated on 4,600 total acres, in seven states. 57% of our acreage is in the energy-rich Marcellus and Utica Shale Region. Shale development is fueling the revitalization of this region and we feel we are still in the very early stages of witnessing the development of these vast energy resources.” 

UMH Properties, Inc. will host its Second Quarter 2015 Financial Results Webcast and Conference Call. Senior management will discuss the results, current market conditions and future outlook on Friday, August 7, 2015 at 10:00 a.m. Eastern Time. 

The Company’s 2015 second quarter financial results being released herein will be available on the Company’s website at www.umh.com in the “Financial Information and Filings” section under the “Investors” tab. 

To participate in the webcast, select the “Investors” tab at the top of the company’s website at www.umh.com, then select the microphone icon. 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, August 7, 2015. It will be available until November 1, 2015, and can be accessed by dialing toll

free 877-344-7529 (domestically) and 412-317-0088 (internationally) and entering the passcode 10066873. A transcript of the call and the webcast replay will be available at the company’s website, www.umh.com under the “Investors” tab. 

UMH Properties, Inc., which was organized in 1968, is a public equity REIT that owns and operates ninety-two manufactured home communities containing approximately 15,700 developed homesites. These communities are located in New Jersey, New York, Ohio, Pennsylvania, Tennessee, Indiana and Michigan. In addition, the Company owns a portfolio of REIT securities.

 

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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. Factors and risks 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. 

(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. FFO, Core FFO and Normalized FFO 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. 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. FFO, Core FFO and Normalized FFO, as calculated by the Company, may not be comparable to similarly titled measures reported by other REITs.

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The reconciliation of the Company’s U.S. GAAP net income (loss) to the Company’s FFO, Core FFO and Normalized FFO for the three and six months ended June 30, 2015 and 2014 are calculated as follows:

 

			Three Months Ended				Six Months Ended
			6/30/15		6/30/14		6/30/15		6/30/14
Net Income (Loss) Attributable to Common Shareholders			$(1,685,000)		$(412,000)		$(2,856,000)		$(1,733,000)
Add: Depreciation Expense			4,451,000		3,672,000		8,680,000		7,110,000
Less: (Gain) Loss on Sales of  Depreciable Assets			74,000		(46,000)		69,000		(24,000)
FFO Attributable to Common Shareholders			2,840,000		3,214,000		5,893,000		5,353,000
Add: Acquisition Costs			188,000		-0-		294,000		285,000
Add: Cost of Early Extinguishment of Debt			90,000		-0-		90,000		-0-
Core FFO Attributable to Common Shareholders			3,118,000		3,214,000		6,277,000		5,638,000
Less: Gain on Sale of Securities Transactions, net			(22,000)		(707,000)		(80,000)		(1,215,000)
Add: Settlement of Litigation			-0-		-0-		125,000		-0-
Normalized FFO Attributable to Common Shareholders			$3,096,000		$2,507,000		$6,322,000		$4,423,000

 

The following are the cash flows provided (used) by operating, investing and financing activities for the six months ended June 30, 2015 and 2014:

 

		2015		2014
	Operating Activities	$10,247,000		$7,947,000
	Investing Activities	(37,154,000)		(19,545,000)
	Financing Activities	27,855,000		14,992,000

 

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