Clipper Realty Inc. SUPPLEMENTAL DATA Second Quarter 2020 1 Clipper Realty Inc. Announces Second Quarter 2020 Results Announces Stock Repurchase Program NEW YORK, August 10, 2020 /Business Wire/ -- Clipper Realty Inc. (NYSE: CLPR) (the "Company"), a leading owner and operator of multifamily residential and commercial properties in the New York metropolitan area, today announced financial and operating results for the three months ended June 30, 2020. Highlights for the Three Months Ended June 30, 2020 • Ach ...

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, 2020 ☐ 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 ...

Clipper Realty, Inc. (NYSE:CLPR) Q1 2020 Earnings Conference Call May 11, 2020 5:00 PM ET Company Participants Michael Frenz - CFO & Secretary David Bistricer - Co-Chairman & CEO Jacob Bistricer - COO Conference Call Participants Buck Horne - Raymond James & Associates Craig Kucera - B. Riley FBR, Inc. Operator Good afternoon, ladies and gentlemen, and welcome to Clipper Realty First Quarter '20 Earnings Call. [Operator Instructions]. It is now my pleasure to turn the floor over to your host Michael Frenz. ...

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, 2020 ☐ 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 ...

Financial Highlights - Record quarterly and annual revenues were achieved, with $306 million and $1162 million respectively, representing increases of 98% and 56% compared to 2018[3] - Record annual income from operations reached $335 million, a 32% increase compared to 2018[3] - Record quarterly and annual Net Operating Income (NOI) were $169 million and $628 million respectively, up 94% and 47% from the same periods in 2018[3] - Record annual Adjusted Funds From Operations (AFFO) reached $220 million, an 112% increase compared to 2018[3] - A dividend of $0095 per share was declared for the fourth quarter of 2019[3, 10] Financial Results Analysis - Fourth-quarter revenues increased by $27 million, or 98%, to $306 million, compared to $279 million in 2018[4] - Full-year revenues increased by $62 million, or 56%, to $1162 million, compared to $1100 million in 2018[4] - Net loss for 2019 was $41 million, or $17 million excluding a non-recurring loss on debt extinguishment[3, 6] - AFFO for the fourth quarter of 2019 was $53 million, compared to $54 million for the fourth quarter of 2018[7] - AFFO for the full year 2019 was $220 million, compared to $198 million for the full year 2018[7] Balance Sheet and Financing - Notes payable (excluding unamortized loan costs) were $10094 million at the end of 2019, compared to $9256 million at the end of 2018[8] - A $186 million mortgage loan was obtained for the 1010 Pacific Street property, along with a pre-development bridge loan of up to $30 million[9]

Clipper Realty Inc. (NYSE:CLPR) Q4 2019 Earnings Conference Call March 12, 2020 5:00 PM ET Company Participants Michael Frenz - Chief Financial Officer David Bistricer - Co-Chairman of the Board & Chief Executive Officer J.J. Bistricer - Chief Operating Officer Conference Call Participants Craig Kucera - B. Riley FBR Operator Good afternoon, ladies and gentlemen, and welcome to the Clipper Realty 4Q 2019 Earnings Call. At this time, all participants have been placed on a listen-only mode and we will open th ...

PART I [ITEM 1. BUSINESS](index=4&type=section&id=ITEM%201.%20BUSINESS) Clipper Realty Inc. is a self-managed REIT focused on acquiring and managing multifamily and commercial properties in the New York metropolitan area, with 75% of revenue from residential rents - Clipper Realty Inc. is a self-managed real estate company acquiring and repositioning multifamily and commercial properties in the **New York metropolitan area**, with a portfolio in Manhattan and Brooklyn[11](index=11&type=chunk) - The Company was incorporated in 2015, closed a private offering in August 2015, and completed an IPO on February 9, 2017, raising approximately **$78.7 million**[12](index=12&type=chunk)[13](index=13&type=chunk) - As of December 31, 2019, the portfolio includes Tribeca House, Flatbush Gardens, 141 Livingston Street, 250 Livingston Street, Aspen, Clover House, 10 West 65th Street, and 1010 Pacific Street (under redevelopment)[16](index=16&type=chunk)[18](index=18&type=chunk) - Approximately **75% of revenues** are from residential rents, with the remainder from commercial and retail tenants, and City of New York agencies lease **16% of rentable square feet**, representing **15% of total annualized rent**[21](index=21&type=chunk) [ITEM 1A. RISK FACTORS](index=8&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks from New York City market conditions, rent stabilization laws, dependence on key tenants, substantial debt, and the need to maintain REIT qualification - Unfavorable market and economic conditions in New York City could adversely affect occupancy, rental rates, collections, operating expenses, and property values[54](index=54&type=chunk)[55](index=55&type=chunk)[62](index=62&type=chunk) - The Housing Stability and Tenant Protection Act of 2019 significantly limits the company's ability to raise rents on rent-stabilized units and convert them to market-rate, potentially impairing portfolio value and stock price[56](index=56&type=chunk)[59](index=59&type=chunk) - Dependence on the City of New York as the sole office tenant (16% of rentable square feet, 15% of annualized rent) poses a risk if the City faces financial difficulties, potentially leading to defaults or lease non-renewals[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - The company has substantial property-level debt (**$1,009.4 million** as of December 31, 2019), which may limit financial and operating activities, affect the ability to incur additional debt, and increase vulnerability to economic downturns[119](index=119&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk) - Failure to maintain REIT qualification would result in significant adverse consequences, including corporate-level income tax and reduced distributions to stockholders[192](index=192&type=chunk)[195](index=195&type=chunk) [CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS](index=36&type=section&id=CAUTIONARY%20NOTE%20CONCERNING%20FORWARD-LOOKING%20STATEMENTS) This section warns that forward-looking statements are subject to significant business, economic, and regulatory risks, including market conditions and rent stabilization changes - The report contains forward-looking statements that are inherently subject to significant business, economic, competitive, regulatory, and other risks, contingencies, and uncertainties[231](index=231&type=chunk) - Key factors influencing future results include market and economic conditions, rent stabilization regulations, operating costs, risks of property damage (natural disasters, climate change, terrorist attacks), financing and development risks, competition, and potential changes in key personnel[231](index=231&type=chunk) [ITEM 2. PROPERTIES](index=37&type=section&id=ITEM%202.%20PROPERTIES) The company's portfolio as of December 31, 2019, included eight properties totaling 3.2 million rentable square feet, 98% leased, with additional development underway - As of December 31, 2019, the company's portfolio consisted of eight properties totaling approximately **3.2 million rentable square feet** (plus an approximate **119,000 rentable square feet** under development) and was approximately **98% leased**[234](index=234&type=chunk) Company's Portfolio Summary as of December 31, 2019 | Address \nMultifamily | Submarket | Year Built | Leasable Sq. Ft. | Units | Percent Leased | Base Annual Rental Revenue (millions) | Net Square | Effective Rent Per Occupied Foot | |:----------------------|:----------|:-----------|:-----------------|:--------|:---------------|:--------------------------------------|:-----------|:---------------------------------| | 50 Murray Street | Manhattan | 1964 | 396,528 | 390 | 97.7% | $27.3 | $70.32 | | | 53 Park Place | Manhattan | 1921 | 86,288 | 116 | 100.0% | $6.2 | $71.41 | | | Flatbush Gardens complex | Brooklyn | 1950 | 1,749,405 | 2,496 | 97.6% | $42.0 | $24.61 | | | 250 Livingston Street | Brooklyn | 1920 | 26,819 | 36 | 100.0% | $1.3 | $47.69 | | | Aspen | Manhattan | 2004 | 165,542 | 232 | 98.7% | $5.8 | $36.60 | | | 10 West 65th Street | Manhattan | 1939 | 75,678 | 82 | 98.8% | $3.4 | $45.97 | | | Clover House | Brooklyn | 1959 | 102,131 | 158 | 94.3% | $6.5 | $69.09 | | | **Total Multifamily** | | | **2,602,391** | **3,510** | **97.7%** | **$92.5** | **$36.48** | | | **Commercial** | | | | | | | | | | 141 Livingston Street | Brooklyn | 1959 | 206,084 | 1 | 100.0% | $8.2 | $40.00 | | | 250 Livingston Street | Brooklyn | 1920 | 294,144 | 1 | 100.0% | $8.2 | $27.71 | | | **Total Commercial** | | | **500,228** | **2** | **100.0%** | **$16.4** | **$32.77** | | | **Retail** | | | | | | | | | | 50 Murray Street (retail) | Manhattan | | 44,436 | 7 | 100.0% | $2.4 | $54.87 | | | 50 Murray Street (parking) | Manhattan | | 24,200 | 1 | 100.0% | $1.2 | $50.67 | | | 53 Park Place (retail) | Manhattan | | 8,600 | 1 | 100.0% | $0.4 | $42.52 | | | 141 Livingston Street (parking/other) | Brooklyn | | 14,853 | 1 | 100.0% | $0.4 | $26.12 | | | 250 Livingston Street (retail) | Brooklyn | | 990 | 1 | 100.0% | $0.1 | $118.58 | | | 250 Livingston Street (parking) | Brooklyn | | — | — | — | $0.2 | — | | | Aspen (retail) | Manhattan | | 21,060 | 3 | 82.0% | $0.8 | $48.39 | | | Aspen (parking) | Manhattan | | — | — | — | $0.3 | — | | | **Total Retail** | | | **114,139** | **14** | **96.7%** | **$5.8** | **$53.86** | | | **Total Portfolio** | | | **3,216,758** | **3,526** | **98.0%** | **$114.7** | **$34.42** | | Commercial and Retail Lease Expirations (2020-Thereafter) | Year | Number of Tenants | Total Square Feet | Annualized Rental Revenue | % of Annualized Rental Revenue Expiring | |:-----|:------------------|:------------------|:--------------------------|:----------------------------------------| | 2020 | 2 | 10,047 | 604,124 | 2.0% | | 2021 | — | — | — | — | | 2022 | 3 | 57,200 | 2,354,243 | 7.7% | | 2023 | 2 | 10,812 | 672,264 | 2.2% | | 2024 | 1 | 1,500 | 123,750 | 0.4% | | 2025 | 2 | 548,580 | 25,693,317 | 83.8% | | 2026 | — | — | — | — | | 2027 | 1 | 7,568 | 325,000 | 1.1% | | 2028 | — | — | — | — | | 2029 | — | — | — | — | | Thereafter | 3 | 12,809 | 862,454 | 2.8% | | Total | 14 | 648,516 | $30,635,152 | 100.0% | [ITEM 3. LEGAL PROCEEDINGS](index=42&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company faces a significant legal proceeding regarding rent stabilization at Tribeca House, with an appeal underway for rent overcharges and attorney's fees, while other claims are not material - The New York Court of Appeals ruled against the Company on June 25, 2019, holding that apartments in buildings receiving RPTL 421-g tax benefits are not subject to luxury deregulation, impacting **41 present or former tenants** at Tribeca House[266](index=266&type=chunk) - The Company's motion for reargument was denied, and the matter was remitted for a special referee to determine rent overcharges and attorney's fees; an appeal for a stay of the hearing was granted on January 7, 2020, with the appeal scheduled for May 2020[266](index=266&type=chunk) - The U.S. Supreme Court denied the Company's Petition for a Writ of Certiorari on January 13, 2020, making the Court of Appeals' order final, and the Company has not recorded any liability for potential settlement due to uncertainty of timing and ultimate resolution[266](index=266&type=chunk) - Other legal proceedings, including an ADA claim at 141 Livingston Street, are not expected to have a material adverse effect on the Company's financial position[268](index=268&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURE](index=43&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURE) This item is not applicable to the company PART II [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=43&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on the NYSE, with 1,226 holders as of February 2020, and future dividends are discretionary based on financial performance and REIT requirements - The company's common stock is traded on the NYSE under the ticker symbol CLPR, with trading commencing on February 10, 2017[271](index=271&type=chunk) - As of February 19, 2020, there were **1,226 holders of record** of the company's common stock[273](index=273&type=chunk) - There is no guarantee of quarterly cash distributions; they are authorized at the discretion of the board and depend on cash from operations, financial condition, capital requirements, and REIT distribution requirements[275](index=275&type=chunk) [ITEM 6. SELECTED FINANCIAL DATA](index=45&type=section&id=ITEM%206.%20SELECTED%20FINANCIAL%20DATA) This section presents selected consolidated financial data for 2015-2019, including statements of operations, balance sheets, cash flows, and non-GAAP measures like FFO and NOI Selected Consolidated Statement of Operations Data (in thousands) | Indicator | 2019 | 2018 | 2017 | 2016 | 2015 | |:---|:---|:---|:---|:---|:---| | Total revenues | $116,165 | $109,997 | $103,952 | $93,005 | $84,604 | | Total operating expenses | $82,669 | $77,539 | $74,448 | $67,208 | $56,101 | | Income from operations | $33,496 | $32,458 | $29,504 | $25,797 | $28,503 | | Interest expense, net | $(35,187) | $(32,781) | $(35,505) | $(38,136) | $(36,703) | | Net loss | $(4,123) | $(9,001) | $(6,001) | $(12,339) | $(8,200) | | Net loss attributable to common stockholders | $(1,665) | $(3,633) | $(2,365) | $(3,754) | $(1,365) | | Basic and diluted net loss per share | $(0.11) | $(0.22) | $(0.15) | $(0.34) | $(0.12) | | Cash dividends per share | $0.38 | $0.38 | $0.37 | $0.26 | $0.04 | Selected Consolidated Balance Sheet Data (in thousands) | Indicator | 2019 | 2018 | 2017 | 2016 | 2015 | |:---|:---|:---|:---|:---|:---|\ | Investment in real estate, net | $1,080,533 | $1,025,737 | $996,892 | $823,077 | $726,107 | | Cash and cash equivalents | $42,500 | $37,028 | $7,940 | $37,547 | $125,332 | | Total assets | $1,166,207 | $1,101,008 | $1,052,085 | $905,208 | $881,118 | | Notes payable, net of unamortized debt costs | $997,903 | $913,564 | $843,946 | $754,459 | $713,440 | | Total liabilities | $1,024,424 | $939,523 | $866,494 | $778,992 | $734,741 | | Total equity | $141,783 | $161,485 | $185,591 | $126,216 | $146,377 | Selected Non-GAAP Financial Measures (in thousands) | Indicator | 2019 | 2018 | 2017 | 2016 | 2015 | |:---|:---|:---|:---|:---|:---|\ | FFO | $15,526 | $9,004 | $10,720 | $2,956 | $4,321 | | AFFO | $22,041 | $19,818 | $16,682 | $9,998 | $9,247 | | Adjusted EBITDA | $56,134 | $52,091 | $49,554 | $43,743 | $41,531 | | Net Operating Income (NOI) | $62,825 | $60,024 | $56,388 | $49,625 | $46,118 | [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=46&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial performance, including revenue, expenses, net loss, liquidity, debt, and cash flow, along with non-GAAP measures and the impact of taxes and inflation - Residential rental income (excluding Clover House) increased by **5.6%** from **$81,117 thousand** in 2018 to **$85,627 thousand** in 2019, driven by higher rental rates at Flatbush Gardens and increased rates and occupancy at Tribeca House[307](index=307&type=chunk) - Net loss decreased significantly from **$9,001 thousand** in 2018 to **$4,123 thousand** in 2019, primarily due to a substantial decrease in loss on extinguishment of debt (from **$8,872 thousand** to **$2,432 thousand**)[307](index=307&type=chunk)[315](index=315&type=chunk)[316](index=316&type=chunk) - The company's short-term liquidity needs are met by cash from operations, while long-term needs for acquisitions and major renovations are expected to be funded by external financing sources like equity offerings and debt[331](index=331&type=chunk)[332](index=332&type=chunk) Cash Flow Summary (in thousands) | Activity | 2019 | 2018 | 2017 | |:---|:---|:---|:---|\ | Operating activities | $23,772 | $22,362 | $13,065 | | Investing activities | $(74,903) | $(39,295) | $(187,656) | | Financing activities | $62,199 | $41,127 | $147,609 | [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=59&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is interest rate fluctuations on its variable rate debt, with a 100 basis point increase hypothetically raising annual interest expense by $0.2 million, managed through interest rate caps - The principal market risk is related to interest rate fluctuations, with **$19.5 million** of uncapped variable rate debt as of December 31, 2019[379](index=379&type=chunk)[380](index=380&type=chunk) - A **100 basis point increase** in interest rates would result in a hypothetical increase of approximately **$0.2 million** in annual interest expense[380](index=380&type=chunk) - The company uses interest rate caps to manage risk, including a new cap purchased on January 7, 2020, for up to **$21.6 million** of 1010 Pacific Street debt, providing protection if one-month LIBOR exceeds **3.6%**[379](index=379&type=chunk)[380](index=380&type=chunk) Fair Value of Notes Payable (in millions) | Date | Carrying Amount | Estimated Fair Value | |:---|:---|:---|\ | December 31, 2019 | $1,009.4 | $1,058.1 | | December 31, 2018 | $925.6 | $927.6 | [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=59&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section incorporates consolidated financial statements and supplementary data by reference, including auditor's report, balance sheets, statements of operations, equity, cash flows, and notes - The financial statements and supplementary data are incorporated by reference, starting on page F-1 of the Annual Report on Form 10-K[382](index=382&type=chunk) [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE](index=59&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) There were no changes in or disagreements with accountants on accounting and financial disclosure during the reported period [ITEM 9A. CONTROLS AND PROCEDURES](index=59&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2019, with no material changes during the quarter - As of December 31, 2019, management, with CEO and CFO participation, concluded that disclosure controls and procedures are designed at a reasonable assurance level and are effective[384](index=384&type=chunk) - No material changes in internal control over financial reporting were identified during the last quarter of the fiscal year[385](index=385&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2019, based on the COSO framework[386](index=386&type=chunk) [ITEM 9B. OTHER INFORMATION](index=60&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) This section states that there is no other information required to be disclosed PART III [ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE](index=60&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) Information regarding directors, executive officers, and corporate governance will be provided in the company's Proxy Statement, to be filed no later than 120 days after the fiscal year-end [ITEM 11. EXECUTIVE COMPENSATION](index=60&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Information regarding executive compensation will be provided in the company's Proxy Statement, to be filed no later than 120 days after the fiscal year-end [ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS](index=61&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) This section details equity compensation plans, including securities authorized for future issuance and outstanding options, with further ownership information in the Proxy Statement Equity Compensation Plan Information | Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |:---|:---|:---|:---|\ | Equity compensation plans approved by security holders | | | | | 2015 Omnibus Plan | 689,423 | — | 310,577 | | 2015 Director Plan | 193,559 | — | 156,441 | | Equity compensation plans not approved by security holders | — | — | — | | Total | 882,982 | - | 467,018 | [ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE](index=61&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) Information regarding certain relationships, related transactions, and director independence will be provided in the company's Proxy Statement, to be filed no later than 120 days after the fiscal year-end [ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES](index=61&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) Information regarding principal accounting fees and services will be provided in the company's Proxy Statement, to be filed no later than 120 days after the fiscal year-end PART IV [ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES](index=61&type=section&id=ITEM%2015.%20EXHIBITS%2C%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists all exhibits and financial statement schedules, including consolidated financial statements and an exhibit index detailing corporate documents and agreements - The section includes a list of exhibits, financial statement schedules, and consolidated financial statements[400](index=400&type=chunk) - The Exhibit Index details various corporate documents such as Articles of Amendment and Restatement, Bylaws, LLC Agreements, Registration Rights Agreements, Employment Agreements, and Loan Agreements[402](index=402&type=chunk)[403](index=403&type=chunk)[404](index=404&type=chunk)[405](index=405&type=chunk)[406](index=406&type=chunk) SIGNATURES This section contains the required signatures for the Annual Report on Form 10-K from key executives and directors, affirming compliance with the Securities Exchange Act of 1934 - The report is signed by David Bistricer (Co-Chairman and CEO), Michael C. Frenz (CFO), Sam Levinson (Co-Chairman), and other directors, affirming compliance with the Securities Exchange Act of 1934[408](index=408&type=chunk)[410](index=410&type=chunk)[413](index=413&type=chunk) Index to Consolidated Financial Statements and Schedule This index lists the consolidated financial statements and schedules, including the auditor's report, balance sheets, statements of operations, equity, cash flows, notes, and Schedule III - The index lists the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Operations, Equity, and Cash Flows, and Notes to Consolidated Financial Statements[415](index=415&type=chunk) - It also includes Financial Statement Schedule III – Real Estate and Accumulated Depreciation[415](index=415&type=chunk) [Report of Independent Registered Public Accounting Firm](index=69&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) BDO USA, LLP issued an unqualified opinion on the consolidated financial statements for 2017-2019, affirming fair presentation in conformity with GAAP, without auditing internal control over financial reporting - BDO USA, LLP issued an unqualified opinion, stating that the consolidated financial statements for the three years ended December 31, 2019, present fairly the financial position, results of operations, and cash flows in conformity with GAAP[417](index=417&type=chunk) - The audit assessed risks of material misstatement but did not include an audit of internal control over financial reporting, as the company is an 'emerging growth company'[419](index=419&type=chunk)[388](index=388&type=chunk) [Consolidated Balance Sheets](index=70&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets for 2019 and 2018 show total assets increasing to **$1,166,207 thousand** in 2019, driven by real estate investment, while total equity decreased Consolidated Balance Sheet Highlights (in thousands) | Item | December 31, 2019 | December 31, 2018 | |:---|:---|:---|\ | Investment in real estate, net | $1,080,533 | $1,025,737 | | Cash and cash equivalents | $42,500 | $37,028 | | Total assets | $1,166,207 | $1,101,008 | | Notes payable, net | $997,903 | $913,564 | | Total liabilities | $1,024,424 | $939,523 | | Total stockholders' equity | $57,234 | $65,182 | | Total equity | $141,783 | $161,485 | - Investment in real estate, net, increased from **$1,025,737 thousand** in 2018 to **$1,080,533 thousand** in 2019[424](index=424&type=chunk) - Total equity decreased from **$161,485 thousand** in 2018 to **$141,783 thousand** in 2019[424](index=424&type=chunk) [Consolidated Statements of Operations](index=71&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations for 2017-2019 show a decrease in net loss attributable to common stockholders in 2019, with increasing total revenues and operating expenses Consolidated Statements of Operations Highlights (in thousands) | Item | 2019 | 2018 | 2017 | |:---|:---|:---|:---|\ | Total Revenues | $116,165 | $109,997 | $103,952 | | Total Operating Expenses | $82,669 | $77,539 | $74,448 | | Income From Operations | $33,496 | $32,458 | $29,504 | | Interest expense, net | $(35,187) | $(32,781) | $(35,505) | | Net loss | $(4,123) | $(9,001) | $(6,001) | | Net loss attributable to common stockholders | $(1,665) | $(3,633) | $(2,365) | | Basic and diluted net loss per share | $(0.11) | $(0.22) | $(0.15) | - Net loss attributable to common stockholders decreased from **$(3,633) thousand** in 2018 to **$(1,665) thousand** in 2019[427](index=427&type=chunk) - Total revenues increased from **$109,997 thousand** in 2018 to **$116,165 thousand** in 2019, while total operating expenses increased from **$77,539 thousand** to **$82,669 thousand**[427](index=427&type=chunk) [Consolidated Statements of Equity](index=72&type=section&id=Consolidated%20Statements%20of%20Equity) The consolidated statements of equity for 2017-2019 show total equity decreasing to **$141,783 thousand** in 2019, primarily due to net loss and distributions Consolidated Statements of Equity Highlights (in thousands) | Item | December 31, 2019 | December 31, 2018 | December 31, 2017 | |:---|:---|:---|:---|\ | Total stockholders' equity | $57,234 | $65,182 | $74,912 | | Non-controlling interests | $84,549 | $96,303 | $110,679 | | Total equity | $141,783 | $161,485 | $185,591 | | Net loss | $(4,123) | $(9,001) | $(6,001) | | Dividends and distributions | $(17,089) | $(17,038) | $(16,565) | | Amortization of LTIP grants | $1,510 | $1,940 | $3,110 | - Total equity decreased from **$161,485 thousand** at December 31, 2018, to **$141,783 thousand** at December 31, 2019[431](index=431&type=chunk) - Dividends and distributions totaled **$17,089 thousand** in 2019, **$17,038 thousand** in 2018, and **$16,565 thousand** in 2017[431](index=431&type=chunk) [Consolidated Statements of Cash Flows](index=73&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows for 2017-2019 show increased net cash from operating activities in 2019, while investing activities used more cash due to property acquisitions Consolidated Statements of Cash Flows Highlights (in thousands) | Activity | 2019 | 2018 | 2017 | |:---|:---|:---|:---|\ | Net cash provided by operating activities | $23,772 | $22,362 | $13,065 | | Net cash used in investing activities | $(74,903) | $(39,295) | $(187,656) | | Net cash provided by financing activities | $62,199 | $41,127 | $147,609 | | Net increase (decrease) in cash and cash equivalents and restricted cash | $11,068 | $24,194 | $(26,982) | - Net cash provided by operating activities increased to **$23,772 thousand** in 2019 from **$22,362 thousand** in 2018[434](index=434&type=chunk) - Net cash used in investing activities increased to **$74,903 thousand** in 2019, primarily due to the acquisition of the 1010 Pacific Street property for **$31,129 thousand** and capital projects[434](index=434&type=chunk)[551](index=551&type=chunk) [Notes to Consolidated Financial Statements](index=74&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's organization, accounting policies, acquisitions, debt, rental income, fair value, commitments, related-party transactions, segment reporting, and multiemployer union agreements - The company operates as a REIT, generally not subject to U.S. federal corporate-level income tax on distributed earnings, and aims to distribute at least **90% of its taxable income**[476](index=476&type=chunk) - As of December 31, 2019, the company had **$1,009,431 thousand** in total debt, primarily mortgage notes secured by its properties, with various maturity dates and interest rates[509](index=509&type=chunk) - The company's revenue streams are primarily from residential (**75% in 2019**) and commercial (**25% in 2019**) rental income, with commercial leases to the City of New York comprising a significant portion[536](index=536&type=chunk)[519](index=519&type=chunk) - The company is subject to multiemployer union agreements for certain employees, with contributions made to defined benefit pension and other plans[542](index=542&type=chunk) [Schedule III – Real Estate and Accumulated Depreciation](index=93&type=section&id=Schedule%20III%20%E2%80%93%20Real%20Estate%20and%20Accumulated%20Depreciation) Schedule III details the company's real estate assets and accumulated depreciation as of December 31, 2019, summarizing activity for 2017-2019, including property costs and encumbrances Investment in Real Estate and Accumulated Depreciation (in thousands) | Item | 2019 | 2018 | 2017 | |:---|:---|:---|:---|\ | Balance at beginning of period (Investment in real estate) | $1,116,199 | $1,070,606 | $881,251 | | Acquisition of real estate | $31,129 | — | $166,630 | | Additions during period | $42,623 | $45,642 | $22,725 | | Balance at end of period (Investment in real estate) | $1,189,951 | $1,116,199 | $1,070,606 | | Balance at beginning of period (Accumulated depreciation) | $90,462 | $73,714 | $58,174 | | Depreciation expense | $18,956 | $16,765 | $15,540 | | Balance at end of period (Accumulated depreciation) | $109,418 | $90,462 | $73,714 | - Total investment in real estate increased from **$1,116,199 thousand** in 2018 to **$1,189,951 thousand** in 2019, including **$31,129 thousand** for the acquisition of 1010 Pacific Street[551](index=551&type=chunk) - Accumulated depreciation increased from **$90,462 thousand** in 2018 to **$109,418 thousand** in 2019, with depreciation expense of **$18,956 thousand** for the year[551](index=551&type=chunk)

Clipper Realty Inc. SUPPLEMENTAL DATA Third Quarter 2019 1 Clipper Realty Inc. Announces Third Quarter 2019 Results Reports Record Revenues, Clover House Refinancing and Property Acquisition NEW YORK, November 12, 2019 /Business Wire/ -- Clipper Realty Inc. (NYSE: CLPR) (the "Company"), a leading owner and operator of multifamily residential and commercial properties in the New York metropolitan area, today announced financial and operating results for the three months ended September 30, 2019. Highlights f ...

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)