Clipper Realty Inc (NYSE:CLPR) Q3 2019 Results Earnings Conference Call November 12, 2019 5:30 PM ET Company Participants Michael Frenz - Chief Financial Officer David Bistricer - Co-Chairman of the Board and Chief Executive Officer J.J. Bistricer - Chief Operating Officer Operator Good afternoon, ladies and gentlemen, and welcome to the Clipper Realty 3Q '19 Earnings Conference Call. At this time all participants have been placed on a listen-only mode and we will open the floor for your questions and comm ...

[Part I – Financial Information](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Cautionary Note Concerning Forward-Looking Statements](index=3&type=section&id=CAUTIONARY%20NOTE%20CONCERNING%20FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements, highlighting risks and uncertainties that could cause actual results to differ, including market conditions, regulatory changes, tenant financial difficulties, and operating cost control - The report contains forward-looking statements identified by words such as "may," "will," and "expect," which are not historical facts and are subject to various risks[6](index=6&type=chunk) - Key risks include: - Market and economic conditions affecting occupancy and rental rates - Economic or regulatory changes in New York City, particularly rent stabilization laws - Financial difficulty of the single government tenant in commercial buildings - Ability to control operating costs and risks related to property damage[6](index=6&type=chunk) [Item 1. Condensed Financial Statements](index=4&type=section&id=ITEM%201.%20CONDENSED%20FINANCIAL%20STATEMENTS) This section presents Clipper Realty Inc.'s unaudited condensed consolidated financial statements as of September 30, 2019, including balance sheets, statements of operations, equity, and cash flows, with detailed notes [Consolidated Balance Sheets](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) Total assets increased to **$1.138 billion** from **$1.101 billion**, driven by real estate investment, while total liabilities rose to **$989.9 million** from **$939.5 million** due to higher notes payable Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | Sep 30, 2019 (Unaudited) | Dec 31, 2018 | | :--- | :--- | :--- | | **Total Assets** | **$1,138,318** | **$1,101,008** | | Investment in real estate, net | $1,049,211 | $1,025,737 | | Cash and cash equivalents | $43,552 | $37,028 | | **Total Liabilities** | **$989,934** | **$939,523** | | Notes payable, net | $963,218 | $913,564 | | **Total Equity** | **$148,384** | **$161,485** | [Consolidated Statements of Operations](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q3 2019 total revenues increased to **$29.4 million**, but higher expenses resulted in a **net loss of $0.18 million**, while the nine-month net loss significantly narrowed to **$1.47 million** from **$7.44 million** due to reduced debt extinguishment loss Q3 2019 vs Q3 2018 Operating Results (in thousands) | Metric | Q3 2019 | Q3 2018 | | :--- | :--- | :--- | | Total Revenues | $29,440 | $27,948 | | Income from Operations | $8,510 | $9,109 | | Net (Loss) Income | $(182) | $1,251 | | Net (Loss) Income per Share | $(0.01) | $0.02 | Nine Months Ended Sep 30, 2019 vs 2018 Operating Results (in thousands) | Metric | Nine Months 2019 | Nine Months 2018 | | :--- | :--- | :--- | | Total Revenues | $85,538 | $82,116 | | Income from Operations | $25,474 | $23,955 | | Net Loss | $(1,473) | $(7,435) | | Net Loss per Share | $(0.05) | $(0.18) | [Consolidated Statements of Equity](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20EQUITY) Total equity decreased from **$161.5 million** at year-end 2018 to **$148.4 million** by September 30, 2019, primarily due to net loss and paid dividends - Total equity decreased from **$161.5 million** at December 31, 2018, to **$148.4 million** at September 30, 2019[15](index=15&type=chunk) - During the nine months ended September 30, 2019, the company paid total dividends and distributions of **$12.8 million**[15](index=15&type=chunk)[19](index=19&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash from operating activities for the nine months ended September 30, 2019, was **$18.4 million**, a decrease from **$23.8 million**, while investing activities used **$36.5 million**, and financing activities provided **$32.9 million** from debt refinancing Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Activity | 2019 | 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $18,390 | $23,807 | | Net cash used in investing activities | $(36,512) | $(27,844) | | Net cash provided by financing activities | $32,894 | $7,452 | | **Net increase in cash** | **$14,772** | **$3,415** | [Notes to Consolidated Financial Statements](index=9&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Notes detail the company's organization, accounting policies, debt, legal contingencies, and segment performance, highlighting its Manhattan and Brooklyn property portfolio, recent debt refinancing, and a significant rent stabilization legal proceeding - The company's property portfolio as of September 30, 2019, includes Tribeca House, Flatbush Gardens, 141 Livingston Street, 250 Livingston Street, Aspen, Clover House, and 10 West 65th Street[27](index=27&type=chunk)[28](index=28&type=chunk) - The company has two reportable operating segments: Residential Rental Properties and Commercial Rental Properties[33](index=33&type=chunk) - A significant legal proceeding involves a lawsuit from tenants at Tribeca House concerning rent stabilization laws (RPTL 421-g), where the New York Court of Appeals ruled in favor of tenants, with no liability yet recorded for potential settlement[111](index=111&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's performance, financial condition, and liquidity, covering business overview, operating results, capital resources, and non-GAAP reconciliations, highlighting residential revenue growth, new rent stabilization laws, and recent acquisitions [Overview of Our Company](index=24&type=section&id=Overview%20of%20Our%20Company) Clipper Realty, a REIT, focuses on Manhattan and Brooklyn multifamily and commercial properties, with Clover House reaching stabilization and the acquisition of 1010 Pacific Street for redevelopment, while facing impacts from the Housing Stability and Tenant Protection Act of 2019 - The Clover House property development was substantially completed and began lease-up, reaching stabilization during the quarter[132](index=132&type=chunk) - On November 8, 2019, the company acquired 1010 Pacific Street in Brooklyn for **$31 million**, planning redevelopment into a multifamily rental building[133](index=133&type=chunk) - The Housing Stability and Tenant Protection Act of 2019 was signed into law, which is expected to reduce the Company's ability to raise rents on its rent-stabilized units[135](index=135&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) Q3 2019 total revenues grew **4.0%** to **$29.4 million**, but higher expenses resulted in a **net loss of $0.2 million**, while nine-month revenues grew **3.7%** to **$85.5 million**, and net loss narrowed to **$1.5 million** from **$7.4 million** due to reduced debt extinguishment loss Q3 2019 vs Q3 2018 Results Summary (in thousands) | Item | Q3 2019 | Q3 2018 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $29,440 | $27,948 | 4.0% | | Residential Rental Income | $22,117 | $20,675 | 5.1% | | Total Operating Expenses | $20,930 | $18,839 | 7.7% | | Net (Loss) Income | $(182) | $1,251 | (88.7)% | - The increase in Q3 residential rental income was primarily due to higher base rent and occupancy at the Flatbush Gardens and Tribeca House properties[141](index=141&type=chunk) - The net loss for the nine months ended September 30, 2019, was **$1.5 million**, a significant improvement from a net loss of **$7.4 million** in the prior year, primarily due to a reduced loss on extinguishment of debt of **$1.8 million** in 2019 versus **$7.0 million** in 2018[151](index=151&type=chunk)[159](index=159&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2019, the company held **$43.6 million** in cash and **$963.2 million** in net indebtedness, expecting to meet short-term liquidity through operations and long-term needs via cash flow, debt, and equity offerings - As of September 30, 2019, the company possessed **$43.6 million** in cash and cash equivalents and **$17.1 million** in restricted cash[161](index=161&type=chunk) - The company paid dividends and distributions totaling **$12.8 million** during the nine months ended September 30, 2019[167](index=167&type=chunk) - Net cash from financing activities for the nine months ended September 30, 2019, was **$32.9 million**, primarily from the refinancing of the 250 Livingston Street property[171](index=171&type=chunk) [Non-GAAP Financial Measures](index=30&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles key non-GAAP financial measures, including FFO of **$12.6 million**, AFFO of **$16.8 million**, Adjusted EBITDA of **$41.1 million**, and NOI of **$46.0 million** for the nine months ended September 30, 2019 Reconciliation of Net (Loss) Income to FFO and AFFO (in thousands) | Metric | Nine Months 2019 | Nine Months 2018 | | :--- | :--- | :--- | | Net (loss) income | $(1,473) | $(7,435) | | Real estate depreciation and amortization | 14,068 | 13,382 | | **FFO** | **$12,595** | **$5,947** | | Adjustments | 4,182 | 8,466 | | **AFFO** | **$16,777** | **$14,413** | Reconciliation of Income from Operations to NOI (in thousands) | Metric | Nine Months 2019 | Nine Months 2018 | | :--- | :--- | :--- | | Income from operations | $25,474 | $23,955 | | Adjustments | 20,500 | 20,672 | | **NOI** | **$45,974** | **$44,627** | Reconciliation of Net (Loss) Income to Adjusted EBITDA (in thousands) | Metric | Nine Months 2019 | Nine Months 2018 | | :--- | :--- | :--- | | Net (loss) income | $(1,473) | $(7,435) | | Adjustments | 42,568 | 46,130 | | **Adjusted EBITDA** | **$41,095** | **$38,695** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is interest rate fluctuations, with **$64.7 million** in variable rate debt, where a 1% change would impact annual net income by approximately **$0.6 million**, managed previously with interest rate caps - The company's principal market risk is related to interest rate fluctuations[193](index=193&type=chunk) - A **1%** change in interest rates on the **$64.7 million** of variable rate debt would impact annual net income by approximately **$0.6 million**[195](index=195&type=chunk) - The estimated fair value of the company's notes payable was approximately **$1.038 billion** as of September 30, 2019, compared to a carrying amount of **$973.5 million**[195](index=195&type=chunk)[106](index=106&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2019, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of September 30, 2019, the company's disclosure controls and procedures are effective to provide reasonable assurance that required information is recorded and reported in a timely manner[196](index=196&type=chunk) - No material changes in internal control over financial reporting were identified during the quarter[197](index=197&type=chunk) [Part II – Other Information](index=33&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=33&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section details a significant legal proceeding involving 41 tenants at Tribeca House regarding rent stabilization laws (RPTL 421-g), where the New York Court of Appeals ruled in favor of tenants, with the company appealing to the U.S. Supreme Court and no liability recorded - The company is involved in a lawsuit with 41 tenants at its Tribeca House properties regarding rent stabilization under RPTL 421-g tax abatements[199](index=199&type=chunk) - On June 25, 2019, the New York Court of Appeals ruled in favor of the tenants, holding that apartments in buildings receiving these tax benefits are not subject to luxury deregulation[199](index=199&type=chunk) - The company filed a Petition for a Writ of Certiorari with the U.S. Supreme Court on October 24, 2019, with the ultimate resolution and financial impact currently unpredictable, and no liability has been recorded[199](index=199&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the company's 2018 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the company's 2018 Annual Report on Form 10-K[202](index=202&type=chunk) [Item 6. Exhibits](index=36&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - Exhibits filed include certifications from the Principal Executive Officer and Principal Financial Officer, as well as XBRL data files[205](index=205&type=chunk)

Clipper Realty Inc. (NYSE:CLPR) Q2 2019 Results Conference Call August 1, 2019 5:00 PM ET Company Participants Michael Frenz – Chief Financial Officer David Bistricer – Co-Chairman of the Board and Chief Executive Officer J.J. Bistricer – Chief Operating Officer Conference Call Participants Craig Kucera – B. Riley FBR, Inc Operator Good afternoon, ladies and gentlemen, and welcome to the Clipper Realty 2Q 2019 Earnings Call. At this time all participants are placed on a listen-only mode and we will open the ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38010 CLIPPER REALTY INC. (Exact name of Registrant as specified in its charter) Maryland 47-4579660 (State or other jurisdiction of incorpora ...

INIM WININ ALALALA CLIPPER REALTY W Investor Presentation June 2019 KIDS KI > K Forward-Looking Statements All statements other than statements of historical fact included in this presentation for Clipper Realty Inc. (the "Company") regarding the Company's financial position, business strategy and the plans, objectives, expectations, or assumptions of management for future operations, are forward-looking statements. When used in this presentation, words such as "may," "will," "should," "could," "expect," "a ...

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☒ For the quarterly period ended March 31, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38010 CLIPPER REALTY INC. (Exact name of Registrant as specified in its charter) Maryland 47-4579660 (State or other jurisdiction of incorpor ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38010 CLIPPER REALTY INC. (Exact name of Registrant as specified in its charter) Maryland 47-4579660 (State or other jurisdiction of incorporation ...