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Section 1: 8-K (8-K)

udr_ER_Current_Folio_8K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


FORM 8-K


 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): February 6, 2018

 


 

UDR, Inc.

(Exact name of registrant as specified in its charter)

 


 

 

 

 

 

 

Maryland

 

1-10524

 

54-0857512

(State or other jurisdiction

 

(Commission

 

(I.R.S. Employer

of incorporation)

 

File Number)

 

Identification No.)

 

 

 

 

 

1745 Shea Center Drive, Suite 200,
Highlands Ranch, Colorado

 

 

 

80129

(Address of principal executive offices)

 

 

 

(Zip Code)

 

Registrant’s telephone number, including area code: (720) 283-6120

 

Not Applicable

Former name or former address, if changed since last report

 


 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company          ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

 

 


 

Item 2.02 Results of Operations and Financial Condition.

 

On February 6, 2018, UDR, Inc. (the “Company”) issued a press release announcing its financial results for the quarter and year ended December 31, 2017. This press release is furnished as Exhibit 99.1 to this Report and refers to supplemental financial information that is available on the Company’s website and furnished as Exhibit 99.2 to this Report. This information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

 

 

 

 Ex. No.

    

 Description

 99.1

 

 Earnings press release dated February 6,  2018.

 99.2

 

 Supplemental Financial Information dated February 6, 2018.

 

 


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

 

 

UDR, Inc.

 

 

 

 

 February 6, 2018

 

By:

 

 /s/ Joseph D. Fisher

 

 

 

 

 Joseph D. Fisher

 

 

 

 

 Senior Vice President and Chief Financial Officer

 

 

 

 

 (Principal Financial Officer)

 

 


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Section 2: EX-99.1 (EX-99.1)

udr_Ex99_1

 

 

 

 

 

Image - Image1.jpeg

 

Exhibit 99.1

 

Press Release

 

 

 

 

DENVER, CO - February 6, 2018

 

 

Contact: Chris Van Ens

 

 

 

 

Phone:   720.348.7762

 

UDR ANNOUNCES FOURTH QUARTER AND FULL-YEAR 2017 RESULTS

 

UDR (the “Company”) Fourth Quarter 2017 Highlights:

·

Net income per share was $0.25, Funds from Operations (“FFO”) per share was $0.46, FFO as Adjusted per share was $0.48, and Adjusted Funds from Operations (“AFFO”) per share was $0.42.

·

Net income attributable to common stockholders was $68.4 million as compared to $236.7 million in the prior year period. The decrease was primarily due to lower gains on the sale of real estate.

·

Year-over-year same-store (“SS”) revenue, expense and net operating income (“NOI”) growth was 3.1 percent, 2.9 percent and 3.1 percent, respectively.  

·

Developer Capital Program (“DCP”) transactions completed during the quarter included:

o

Purchased Steele Creek, a 218-home community located in Denver, CO for $141.5 million. The Company’s profit participation totaled $14.9 million, making its effective basis $126.6 million.

o

Sold Katella Grand I, a 399-home community located in Anaheim, CA, for $148.0 million.

·

Sold two wholly-owned communities, Vista Del Rey and Villas at Carlsbad, located in Southern California, for $69.0 million. 

·

Subsequent to quarter end, entered into a contract to sell Pacific Shores, a 264-home community located in Orange County for $90.5 million, which is expected to close in the first quarter of 2018 subject to customary closing conditions.

·

Issued $300.0 million of 10-year unsecured debt at a 3.50 percent coupon and redeemed $300.0 million of 4.25 percent unsecured debt originally scheduled to mature in mid-2018, resulting in $3.4 million in prepayment costs.

·

Subsequent to quarter end, Thomas W. Toomey was named Chairman of the Company’s Board in addition to his responsibilities as President and Chief Executive Officer. James D. Klingbeil was appointed Lead Independent Director of the Board.

 

Full-Year 2017 Highlights:

·

Net income per share was $0.44, FFO per share was $1.83, FFO as Adjusted per share was $1.87, and AFFO per share was $1.72.

·

Net income attributable to common stockholders was $117.9 million as compared to $289.0 million in the prior year period. The decrease was primarily due to lower gains on the sale of real estate.

·

Year-over-year SS revenue, expense and NOI growth was 3.7 percent, 3.5 percent and 3.8 percent, respectively.  

·

Increased the Company’s declared dividend per share to $1.24, or by 5.1 percent year-over-year.

·

Completed construction on two UDR/MetLife JV developments comprising 536 homes in total, located in the San Francisco Bay Area and Orange County.

·

Expanded the DCP through investments in five communities comprising 1,253 homes in total, located in Seattle, Washington, D.C., San Francisco, Portland, OR, and Nashville, TN.

·

Completed $477.3 million in acquisitions/dispositions within the DCP, by acquiring two assets valued at $228.0 million and disposing of two assets valued at $249.3 million.

·

Prepaid $575.3 million of higher-cost debt and issued $600.0 million of 10-year unsecured debt at a weighted average 3.50 percent coupon.

·

Established a $500.0 million unsecured U.S. commercial paper program.

 

1


 

 

 

 

 

 

 

 

 

 

 

Q4 2017

Q4 2016

FY 2017

FY 2016

Net income per common share, diluted

 

$ 0.25

 

$ 0.88

 

$ 0.44

 

$ 1.08

Conversion from GAAP share count

 

(0.024)

 

(0.077)

 

(0.041)

 

(0.103)

Net gain on the sale of depreciable real estate owned

 

(0.209)

 

(0.799)

 

(0.260)

 

(0.870)

Depreciation and amortization

 

0.416

 

0.390

 

1.642

 

1.582

Noncontrolling interests and preferred dividends

 

0.024

 

0.078

 

0.050

 

0.106

FFO per common share and unit, diluted

 

$ 0.46

 

$ 0.47

 

$ 1.83

 

$ 1.80

Acquisition-related costs/(fees)

 

0.000

 

0.001

 

0.001

 

0.001

Cost/(benefit) associated with debt extinguishment, other

 

0.011

 

 -

 

0.031

 

0.006

Long-term incentive plan transition costs

 

 -

 

0.001

 

 -

 

0.003

Net gain on the sale of non-depreciable real estate owned

 

 -

 

 -

 

(0.005)

 

(0.006)

Legal claims, net of tax

 

 -

 

 -

 

 -

 

(0.002)

Net loss on sale of unconsolidated land

 

 -

 

 -

 

 -

 

0.003

Severance costs and other restructuring expense

 

0.002

 

0.003

 

0.002

 

0.003

Tax benefit - conversion of TRS entities into REITs

 

 -

 

(0.008)

 

 -

 

(0.008)

Casualty-related charges/(recoveries), including JVs, net

 

0.002

 

(0.005)

 

0.012

 

(0.010)

FFO as Adjusted per common share and unit, diluted

 

$ 0.48

 

$ 0.46

 

$ 1.87

 

$ 1.79

Recurring capital expenditures

 

(0.054)

 

(0.054)

 

(0.155)

 

(0.160)

AFFO per common share and unit, diluted

 

$ 0.42

 

$ 0.40

 

$ 1.72

 

$ 1.63

A reconciliation of FFO, FFO as Adjusted and AFFO to GAAP Net income attributable to common stockholders can be found on Attachment 2 of the Company’s fourth quarter Supplemental Financial Information.

 

Operations

 

In the fourth quarter, total revenue increased by $9.9 million or 4.1 percent, to $252.9 million. This increase was primarily attributable to growth in revenue from same-store communities and stabilized, non-mature communities.

In the fourth quarter, same-store NOI increased 3.1 percent year-over-year and was driven by same-store revenue growth of 3.1 percent and a 2.9 percent increase in same-store expenses. Weighted average same-store physical occupancy was flat year-over-year at 96.8 percent. The fourth quarter annualized rate of turnover was 41.2 percent, representing a 40 basis point decline year-over-year.

Summary of Same-Store Results Fourth Quarter 2017 versus Fourth Quarter 2016

 

 

 

 

 

 

 

 

 

    

 

Expense

 

% of

    

Number of

 

 

Revenue

Growth/

NOI

Same-Store

Same-Store

Same-Store

Region

 

Growth

(Decline)

Growth

Portfolio(1)

Occupancy(2)

Homes(3)

 

 

 

 

 

 

 

 

West

 

4.2%

(0.2)%

5.6%
40.4%
96.3%
11,743

Mid-Atlantic

 

1.8%
3.5%
1.1%
25.5%
97.3%
10,480

Northeast

 

2.1%
6.7%
0.1%
16.8%
97.1%
3,493

Southeast

 

3.7%
3.9%
3.5%
13.0%
96.7%
7,683

Southwest

 

3.4%
3.3%
3.4%
4.3%
96.6%
2,923

Total

 

3.1%
2.9%
3.1%
100.0%
96.8%
36,322

(1)Based on Q4 2017 NOI.

(2)Weighted average same-store physical occupancy for the quarter.

(3)During the fourth quarter, 36,322 apartment homes were classified as same-store. The Company defines QTD SS Communities as those communities stabilized for five full consecutive quarters. These communities were owned and had stabilized occupancy and operating expenses as of the beginning of the quarter in the prior year, were not in process of any substantial redevelopment activities, and not held for disposition.

 

Sequential same-store NOI increased by 1.4 percent in the fourth quarter of 2017 on same-store revenue growth of 0.1 percent and a 3.1 percent decrease in same-store expenses. Weighted average same-store physical occupancy increased by 10 basis points sequentially to 96.8 percent.

For the twelve months ended December 31, 2017, total revenue increased by $35.9 million or 3.7 percent, to $995.8 million. This increase was primarily attributable to growth in revenue from same-store communities and stabilized, non-mature communities.

2


 

 

For the twelve months ended December 31, 2017, same-store NOI increased 3.8 percent year-over-year and was driven by same-store revenue growth of 3.7 percent and a 3.5 percent increase in same-store expenses. Weighted average same‑store physical occupancy was 96.8 percent as compared to 96.6 percent in the prior year. The full-year rate of turnover was 49.8 percent, representing a 110 basis point decline year-over-year.

Summary of Same-Store Results Full-Year 2017 versus Full-Year 2016

 

 

 

 

 

 

 

 

 

    

 

 

    

% of

    

Number of

 

 

Revenue

Expense

NOI

Same-Store

Same-Store

Same-Store

Region

 

Growth

Growth

Growth

Portfolio(1)

Occupancy(2)

Homes(3)

 

 

 

 

 

 

 

 

West

 

4.4%
3.5%
4.7%
40.9%
96.4%
11,743

Mid-Atlantic

 

2.5%
0.1%
3.6%
24.0%
97.1%
9,629

Northeast

 

2.8%
8.9%
0.4%
17.5%
97.1%
3,493

Southeast

 

4.6%
2.2%
5.7%
13.3%
96.8%
7,683

Southwest

 

4.2%
5.5%
3.3%
4.3%
96.7%
2,923

Total

 

3.7%
3.5%
3.8%
100.0%
96.8%
35,471

(1) Based on YTD 2017 NOI.

(2)Weighted average same-store physical occupancy for YTD 2017.

(3)During the twelve months, 35,471 apartment homes were classified as same-store. The Company defines YTD SS Communities as those communities stabilized for two full consecutive calendar years. These communities were owned and had stabilized occupancy and operating expenses as of the beginning of the prior year, were not in process of any substantial redevelopment activities, and not held for disposition.

.

Development and Redevelopment Activity

At the end of the fourth quarter, the Company’s development pipeline totaled $864.5 million at its pro-rata ownership interest, consisting of a $54.0 million completed, non-stabilized project and $810.5 million of under-construction development projects, of which $664.6 million had been funded, leaving $145.9 million to be funded. Of the $810.5 million of under-construction development projects, $379.5 million commenced leasing in 2017 and $431.0 million is scheduled to commence leasing in 2018. The development pipeline is currently expected to produce a weighted average spread between stabilized yields and current market cap rates of 150 to 200 basis points.

During the quarter, the Company completed the redevelopment of Thirty377, a 305-home community in Dallas. The total cost of the redevelopment was $9.5 million.

Developer Capital Program

 

At the end of the fourth quarter, the Company’s DCP investment, including accrued return, totaled $158.9 million. Activity during the quarter consisted of:

·

As previously announced, the Company purchased Steele Creek, a 218-home community located in Denver, CO, for $141.5 million. The Company’s profit participation in the transaction totaled $14.9 million, making its effective basis $126.6 million. See the Company’s third quarter 2017 earnings press release for further information.

·

As previously announced, the West Coast Development Joint Venture (“WCDJV”) sold Katella Grand I, a 399-home community located in Anaheim, CA for $148.0 million. See the Company’s third quarter 2017 earnings press release for further information.

·

The Company’s investment balance in DCP-Other projects increased by $16.8 million. At quarter end, the Company’s investment balance totaled $55.9 million in DCP-Other projects.

3


 

Wholly-Owned Transactional Activity

During the quarter, the Company sold two communities, Vista Del Rey and Villas at Carlsbad, comprising 218 homes in total, located in Southern California, for $69.0 million or $316,500 per home. At the time of the sale, the communities had a weighted average monthly revenue per occupied home of $1,986 and were 50 years old on average.

 

Subsequent to quarter end, the Company entered into a  contract to sell Pacific Shores, a 264-home community, located in Orange County, for $90.5 million, or $342,800 per home. The transaction is expected to close in the first quarter of 2018 subject to customary closing conditions. At the end of the fourth quarter, the community had an average monthly revenue per occupied home of $2,053 and was 47 years old.

 

Capital Markets and Balance Sheet

 

As previously announced, during the fourth quarter, the Company issued $300.0 million of 10-year unsecured debt at a 3.50 percent coupon. Proceeds were used to redeem all $300.0 million of the Company’s outstanding 4.25 percent senior unsecured notes scheduled to mature on June 1, 2018, and for general corporate purposes. The Company incurred prepayment costs totaling $3.4 million.

At December 31, 2017, the Company had approximately $855.3 million in availability, through a combination of cash and undrawn capacity, on its credit facilities.

The Company’s total indebtedness at December 31, 2017 was $3.7 billion. The Company ended the quarter with fixed-rate debt representing 87.0 percent of its total debt, a total blended interest rate of 3.7 percent and a weighted average maturity of 5.3 years. The Company’s leverage was 33.2 percent versus 32.1 percent a year ago, its net‑debt-to-EBITDA was 5.3x versus 5.1x a year ago and its fixed charge coverage ratio was flat year-over year at 4.8x.

Board of Directors

 

Subsequent to quarter end, the Company’s Board of Directors appointed Thomas W. Toomey to the position of Chairman of the Board, effective January 1, 2018, in addition to his current responsibilities as the Company’s President and Chief Executive Officer.  James D. Klingbeil, who had served as Chairman since 2010, was named Lead Independent Director of the Board.

Dividend

 

As previously announced, the Company’s Board of Directors declared a regular quarterly dividend on its common stock for the fourth quarter of 2017 in the amount of $0.31 per share. The dividend was paid in cash on January 31, 2018 to UDR common stockholders of record as of January 10, 2018. The fourth quarter 2017 dividend represented the 181st consecutive quarterly dividend paid by the Company on its common stock.

 

In conjunction with this release, the Company has declared a 2018 annualized dividend per share of $1.29, a 4.0 percent increase over 2017.

4


 

Outlook

 

For the first quarter of 2018, the Company has established the following earnings guidance ranges:

 

 

 

 

 

 

 

 

Net income per share

    

$0.06 to $0.08

 

 

    

 

 

 

 

 

 

 

 

FFO per share

 

$0.46 to $0.48

 

 

 

 

 

 

 

 

 

 

 

FFO as Adjusted per share

 

$0.46 to $0.48

 

 

 

 

 

 

 

 

 

 

 

AFFO per share

 

$0.44 to $0.46

 

 

 

 

 

For the full-year 2018, the Company has established the following earnings guidance ranges:

 

 

 

 

 

 

 

 

Net income per share

    

$0.26 to $0.30

 

 

    

 

 

 

 

 

 

 

 

FFO per share

 

$1.91 to $1.95

 

 

 

 

 

 

 

 

 

 

 

FFO as Adjusted per share

 

$1.91 to $1.95

 

 

 

 

 

 

 

 

 

 

 

AFFO per share

 

$1.76 to $1.80

 

 

 

 

 

Full-Year 2017 FFO as Adjusted per share as compared to full-year 2018 guidance at the midpoint:

 

The difference between the Company’s full-year 2017 FFO as Adjusted of $1.87 per share and the $1.93 midpoint of its full-year 2018 FFO as Adjusted guidance range is primarily due to:

 

·

A positive impact of approximately $0.07 from same-store, joint venture and commercial operations;

·

A negative impact of approximately $0.01 from higher LIBOR and other non-core items;  

·

A neutral impact from development and Developer Capital Program investments after accounting for costs to fund; and

·

Flat general and administrative expense year-over-year.

 

 

For the full-year 2018, the Company has established the following same-store growth guidance ranges:

 

 

 

 

 

 

 

 

Revenue

    

2.50% to 3.50%

 

 

    

 

 

 

 

 

 

 

 

Expense

 

2.50% to 3.50%

 

 

 

 

 

 

 

 

 

 

 

Net operating income

 

2.50% to 3.50%

 

 

 

 

 

 

 

Additional assumptions for the Company’s first quarter and full-year 2018 guidance can be found on Attachment 15 of the Company’s fourth quarter Supplemental Financial Information. A reconciliation of FFO per share, FFO as Adjusted per share and AFFO per share to GAAP Net income per share can be found on Attachment 16(D) of the Company’s fourth quarter Supplemental Financial Information. Non-GAAP financial measures and other terms, as used in this earnings release, are defined and further explained on Attachments 16(A) through 16(D), “Definitions and Reconciliations,” of the Company’s fourth quarter Supplemental Financial Information.

5


 

Supplemental Information

 

The Company offers Supplemental Financial Information that provides details on the financial position and operating results of the Company which is available on the Company's website at ir.udr.com.

 

Conference Call and Webcast Information

 

UDR will host a webcast and conference call at 1:00 p.m. Eastern Time on February 7, 2018 to discuss fourth quarter and full-year results, recent events, 2018 guidance and management’s views on the economy and the apartment industry. The webcast will be available on UDR's website at ir.udr.com. To listen to a live broadcast, access the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.

 

To participate in the teleconference dial 877-705-6003 for domestic and 201-493-6725 for international. A passcode is not necessary.

 

A replay of the conference call will be available through March 7, 2018, by dialing 844-512-2921 for domestic and 412-317-6671 for international and entering the confirmation number, 13675009, when prompted for the passcode.

 

A replay of the call will be available for 30 days on UDR's website at ir.udr.com.

Full Text of the Earnings Report and Supplemental Data

 

Internet -- The full text of the earnings report and Supplemental Financial Information will be available on the Company’s website at ir.udr.com.  

 

Mail -- For those without Internet access, the fourth quarter 2017 earnings report and Supplemental Financial Information will be available by mail or fax, on request. To receive a copy, please call UDR Investor Relations at 720-348-7762.

 

6


 

Forward Looking Statements

 

Certain statements made in this press release may constitute “forward-looking statements.” Words such as “expects,” “intends,” “believes,” “anticipates,” “plans,” “likely,” “will,” “seeks,” “estimates” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement, due to a number of factors, which include, but are not limited to, unfavorable changes in the apartment market, changing economic conditions, the impact of inflation/deflation on rental rates and property operating expenses, expectations concerning availability of capital and the stabilization of the capital markets, the impact of competition and competitive pricing, acquisitions, developments and redevelopments not achieving anticipated results, delays in completing developments, redevelopments and lease-ups on schedule, expectations on job growth, home affordability and demand/supply ratio for multifamily housing, expectations concerning development and redevelopment activities, expectations on occupancy levels and rental rates, expectations concerning the joint ventures with third parties, expectations that technology will help grow net operating income, expectations on annualized net operating income and other risk factors discussed in documents filed by the Company with the Securities and Exchange Commission from time to time, including the Company's Annual Report on Form 10-K and the Company's Quarterly Reports on Form 10-Q. Actual results may differ materially from those described in the forward-looking statements. These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release, and the Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in the Company's expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required under the U.S. securities laws.

 

About UDR, Inc. 

UDR, Inc. (NYSE: UDR), an S&P 500 company, is a leading multifamily real estate investment trust with a demonstrated performance history of delivering superior and dependable returns by successfully managing, buying, selling, developing and redeveloping attractive real estate properties in targeted U.S. markets. As of December 31, 2017, UDR owned or had an ownership position in 49,728 apartment homes including 2,444 homes under development or in its Developer Capital Program – West Coast Development JV. For over 46 years, UDR has delivered long-term value to shareholders, the best standard of service to residents and the highest quality experience for associates.

 

 

7


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Section 3: EX-99.1 (EX-99.1 PDF)

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Section 4: EX-99.2 (EX-99.2)

udr_Ex99_2

Exhibit 99.2

Financial Highlights

 

UDR, Inc.

As of End of Fourth Quarter 2017

(Unaudited) (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual Results

 

Actual Results

 

Guidance as of December 31, 2017

Dollars in thousands, except per share and unit

 

 

 

4Q 2017

 

YTD 2017

 

1Q 2018

 

Full-Year 2018

 

 

 

 

 

 

 

 

 

 

 

GAAP Metrics

 

 

 

 

 

 

 

 

 

 

Net income/(loss) attributable to UDR, Inc.

 

 

 

$69,280

 

$121,558

 

--

 

--

Net income/(loss) attributable to common stockholders

 

 

 

$68,356

 

$117,850

 

--

 

--

Income/(loss) per weighted average common share, diluted

 

 

 

$0.25

 

$0.44

 

$0.06 to $0.08

 

$0.26 to $0.30

 

 

 

 

 

 

 

 

 

 

 

Per Share Metrics

 

 

 

 

 

 

 

 

 

 

FFO per common share and unit, diluted

 

 

 

$0.46

 

$1.83

 

$0.46 to $0.48

 

$1.91 to $1.95

FFO as Adjusted per common share and unit, diluted

 

 

 

$0.48

 

$1.87

 

$0.46 to $0.48

 

$1.91 to $1.95

Adjusted Funds from Operations ("AFFO") per common share and unit, diluted

 

 

 

$0.42

 

$1.72

 

$0.44 to $0.46

 

$1.76 to $1.80

Dividend declared per share and unit

 

 

 

$0.31

 

$1.24

 

$0.3225

 

$1.29 (2)

 

 

 

 

 

 

 

 

 

 

 

Same-Store Operating Metrics

 

 

 

 

 

 

 

 

 

 

Revenue growth

 

 

 

3.1%

 

3.7%

 

--

 

2.50% - 3.50%

Expense growth

 

 

 

2.9%

 

3.5%

 

--

 

2.50% - 3.50%

NOI growth

 

 

 

3.1%

 

3.8%

 

--

 

2.50% - 3.50%

Physical Occupancy

 

 

 

96.8%

 

96.8%

 

--

 

96.7% - 96.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Metrics

 

 

 

Homes

 

Communities

 

% of Total NOI

 

 

Same-Store

 

 

 

36,322

 

117

 

79.1%

 

 

Stabilized, Non-Mature

 

 

 

3,158

 

9

 

7.3%

 

 

Acquired Communities

 

 

 

218

 

1

 

0.6%

 

 

Redevelopment

 

 

 

-

 

-

 

-

 

 

Development, completed

 

 

 

300

 

-

 

0.1%

 

 

Non-Residential / Other

 

 

 

N/A

 

N/A

 

2.0%

 

 

Sold and Held for Disposition

 

 

 

-

 

-

 

0.4%

 

 

Joint Venture (includes completed JV developments) (3)

 

 

 

7,286

 

29

 

10.5%

 

 

Sub-total, completed homes

 

 

 

47,284

 

156

 

100%

 

 

Under Development

 

 

 

801

 

2

 

-

 

 

Joint Venture Development

 

 

 

533

 

2

 

-

 

 

Developer Capital Program - West Coast Development JV

 

 

 

1,110

 

4

 

-

 

 

Total expected homes (3)(4)

 

 

 

49,728

 

164

 

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Metrics (adjusted for non-recurring items)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4Q 2017

 

4Q 2016

 

 

 

 

Interest Coverage Ratio

 

 

 

4.9x

 

4.9x

 

 

 

 

Fixed Charge Coverage Ratio

 

 

 

4.8x

 

4.8x

 

 

 

 

Debt as a percentage of Total Assets

 

 

 

33.2%

 

32.1%

 

 

 

 

Net Debt-to-EBITDA

 

 

 

5.3x

 

5.1x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C:\Users\bmaas\Desktop\4Q17 Financial Highlights.JPG


(1)

See Attachment 16 for definitions and other terms.

(2)

Annualized for 2018.

(3)

Joint venture NOI is based on UDR's share.  Homes and communities at 100%.

(4)

Excludes 822 homes that are part of the Developer Capital Program – Other as described in Attachment 12(B).

 

1


 

Picture 9

Attachment 1

 

UDR, Inc.

Consolidated Statements of Operations

(Unaudited) (1)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31,

 

December 31,

In thousands, except per share amounts

 

2017

 

2016

 

2017

 

2016

 

 

 

 

 

 

 

 

 

REVENUES:

 

 

 

 

 

 

 

 

Rental income

 

$
250,116

 

$
240,081

 

$
984,309

 

$
948,461

Joint venture management and other fees

 

2,764

 

2,927

 

11,482

 

11,400

Total revenues

 

252,880

 

243,008

 

995,791

 

959,861

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Property operating and maintenance

 

42,086

 

40,075

 

164,660

 

159,947

Real estate taxes and insurance

 

30,354

 

28,726

 

121,146

 

115,429

Property management

 

6,878

 

6,603

 

27,068

 

26,083

Other operating expenses

 

3,050

 

2,369

 

9,060

 

7,649

Real estate depreciation and amortization

 

109,401

 

102,537

 

430,054

 

419,615

Acquisition costs

 

27

 

152

 

371

 

213

General and administrative

 

11,563

 

13,104

 

48,195

 

49,548

Casualty-related charges/(recoveries), net

 

586

 

(1,102)

 

4,335

 

732

Other depreciation and amortization

 

1,648

 

1,458

 

6,408

 

6,023

Total operating expenses

 

205,593

 

193,922

 

811,297

 

785,239

 

 

 

 

 

 

 

 

 

Operating income

 

47,287

 

49,086

 

184,494

 

174,622

 

 

 

 

 

 

 

 

 

Income/(loss) from unconsolidated entities (2)

 

19,666

 

35,945

 

31,257

 

52,234

 

 

 

 

 

 

 

 

 

Interest expense

 

(30,833)

 

(29,295)

 

(119,499)

 

(121,302)

(Cost)/benefit associated with debt extinguishment and other

 

(3,378)

 

 -

 

(9,212)

 

(1,729)

Total interest expense

 

(34,211)

 

(29,295)

 

(128,711)

 

(123,031)

Interest income and other income/(expense), net

 

548

 

481

 

1,971

 

1,930

 

 

 

 

 

 

 

 

 

Income/(loss) before income taxes and gain/(loss) on sale of real estate owned

 

33,290

 

56,217

 

89,011

 

105,755

Tax (provision)/benefit, net

 

1,065

 

3,063

 

240

 

3,774

 

 

 

 

 

 

 

 

 

Income/(loss) from continuing operations

 

34,355

 

59,280

 

89,251

 

109,529

Gain/(loss) on sale of real estate owned, net of tax

 

41,272

 

200,466

 

43,404

 

210,851

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

75,627

 

259,746

 

132,655

 

320,380

Net (income)/loss attributable to redeemable noncontrolling interests in the OP and DownREIT Partnership (3)

 

(6,290)

 

(22,114)

 

(10,933)

 

(27,282)

Net (income)/loss attributable to noncontrolling interests

 

(57)

 

(15)

 

(164)

 

(380)

 

 

 

 

 

 

 

 

 

Net income/(loss) attributable to UDR, Inc.

 

69,280

 

237,617

 

121,558

 

292,718

Distributions to preferred stockholders - Series E (Convertible)

 

(924)

 

(930)

 

(3,708)

 

(3,717)

 

 

 

 

 

 

 

 

 

Net income/(loss) attributable to common stockholders

 

$
68,356

 

$
236,687

 

$
117,850

 

$
289,001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income/(loss) per weighted average common share - basic:

 

$ 0.26

 

$ 0.89

 

$ 0.44

 

$ 1.09

Income/(loss) per weighted average common share - diluted:

 

$ 0.25

 

$ 0.88

 

$ 0.44

 

$ 1.08

 

 

 

 

 

 

 

 

 

Common distributions declared per share

 

$0.310

 

$0.295

 

$1.24

 

$1.18

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding - basic

 

267,270

 

266,498

 

267,024

 

265,386

Weighted average number of common shares outstanding - diluted

 

269,221

 

271,551

 

268,830

 

267,311


(1)

See Attachment 16 for definitions and other terms.

(2)

During the three months ended December 31, 2017, UDR recorded a gain on sale of approximately $5.5 million in connection with the sale of Katella Grand I, a West Coast Development JV community in Anahiem, CA and a gain on consolidation of approximately $14.8 million in connection with the acquisition of Steele Creek.  For the twelve months ended December 31, 2017, UDR has recorded gains on sale or consolidation of approximately $35.4 million.

(3)

Due to the quarterly calculation of noncontrolling interest, the sum of the quarterly amounts will not equal the annual totals.

 

2


 

Picture 9

Attachment 2

 

UDR, Inc.

Funds From Operations

(Unaudited) (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

December 31,

 

December 31,

In thousands, except per share and unit amounts

 

2017

 

2016

 

2017

 

2016

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss) attributable to common stockholders

 

$
68,356

 

$

236,687

 

$
117,850

 

$

289,001

 

 

 

 

 

 

 

 

 

 

 

Real estate depreciation and amortization

 

109,401

 

 

102,537

 

430,054

 

 

419,615

Noncontrolling interests

 

6,347

 

 

22,129

 

11,097

 

 

27,662

Real estate depreciation and amortization on unconsolidated joint ventures

 

14,128

 

 

13,055

 

57,102

 

 

47,832

Net gain on the sale of unconsolidated depreciable property

 

(20,850)

 

 

(36,385)

 

(35,363)

 

 

(47,848)

Net gain on the sale of depreciable real estate owned

 

(41,272)

 

 

(200,466)

 

(41,824)

 

 

(209,166)

Funds from operations ("FFO") attributable to common stockholders and unitholders, basic

 

$
136,110

 

$

137,557

 

$
538,916

 

$

527,096

 

 

 

 

 

 

 

 

 

 

 

  Distributions to preferred stockholders - Series E (Convertible) (2)

 

924

 

 

930

 

3,708

 

 

3,717

 

 

 

 

 

 

 

 

 

 

 

FFO attributable to common stockholders and unitholders, diluted

 

$
137,034

 

$

138,487

 

$
542,624

 

$

530,813

 

 

 

 

 

 

 

 

 

 

 

FFO per common share and unit, basic 

 

$
0.47

 

$

0.47

 

$
1.85

 

$

1.81

FFO per common share and unit, diluted

 

$
0.46

 

$

0.47

 

$
1.83

 

$

1.80

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares and OP/DownREIT Units outstanding - basic

 

291,911

 

 

291,471

 

291,845

 

 

290,516

Weighted average number of common shares, OP/DownREIT Units, and common stock

 

 

 

 

 

 

 

 

 

 

   equivalents outstanding - diluted

 

296,873

 

 

296,524

 

296,672

 

 

295,469

 

 

 

 

 

 

 

 

 

 

 

Impact of adjustments to FFO:

 

 

 

 

 

 

 

 

 

 

  Acquisition-related costs/(fees)

 

$
27

 

$

152

 

$
371

 

 

$
213

  Cost/(benefit) associated with debt extinguishment and other

 

3,378

 

 

 -

 

9,212

 

 

1,729

  Long-term incentive plan transition costs

 

 -

 

 

274

 

 -

 

 

898

  Net gain on the sale of non-depreciable real estate owned (3)

 

 -

 

 

 -

 

(1,580)

 

 

(1,685)

  Legal claims, net of tax

 

 -

 

 

 -

 

 -

 

 

(480)

  Net loss on sale of unconsolidated land

 

 -

 

 

 -

 

 -

 

 

1,016

  Severance costs and other restructuring expense

 

624

 

 

871

 

624

 

 

871

  Tax benefit associated with the conversion of certain TRS entities into REITs (4)

 

 -

 

 

(2,436)

 

 -

 

 

(2,436)

  Casualty-related charges/(recoveries), net

 

647

 

 

(1,102)

 

4,504

 

 

732

  Casualty-related charges/(recoveries) on unconsolidated joint ventures, net

 

 -

 

 

(251)

 

(881)

 

 

(3,752)

 

 

$
4,676

 

$

(2,492)

 

$
12,250

 

$

(2,894)

 

 

 

 

 

 

 

 

 

 

 

FFO as Adjusted attributable to common stockholders and unitholders, diluted

 

$
141,710

 

$

135,995

 

$
554,874

 

$

527,919

 

 

 

 

 

 

 

 

 

 

 

FFO as Adjusted per common share and unit, diluted

 

$
0.48

 

$

0.46

 

$
1.87

 

$

$
1.79

 

 

 

 

 

 

 

 

 

 

 

Recurring capital expenditures

 

(15,912)

 

 

(15,974)

 

(46,034)

 

 

(47,257)

AFFO attributable to common stockholders and unitholders, diluted

 

$
125,798

 

$

120,021

 

$
508,840

 

$

480,662

 

 

 

 

 

 

 

 

 

 

 

AFFO per common share and unit, diluted

 

$
0.42

 

$

0.40

 

$
1.72

 

$

1.63


(1)

See Attachment 16 for definitions and other terms.

(2)

Series E preferred shares are dilutive for purposes of calculating FFO per share.  Consequently, distributions to Series E preferred stockholders are added to FFO and the weighted average number of shares are included in the denominator when calculating FFO per common share and unit, diluted.

(3)

The GAAP gain for the year ended December 31, 2017 and 2016 is $43.4 million and $210.9 million, respectively, of which $1.6 million and $1.7 million is FFO gain related to the sale of land parcels.  The FFO gain is backed out for FFO as Adjusted.

(4)

During 4Q16, the Company recognized a one-time tax benefit of $2.4 million related to the conversion of certain taxable REIT subsidiary entities into REITs.

3


 

Picture 9

 

Attachment 3

 

UDR, Inc.

Consolidated Balance Sheets

(Unaudited) (1)

 

 

 

 

 

 

 

 

December 31,

 

December 31,

In thousands, except share and per share amounts

 

2017

 

2016

 

 

 

 

 

ASSETS

 

 

 

 

Real estate owned:

 

 

 

 

Real estate held for investment

 

$
9,584,716

 

$
9,271,847

Less: accumulated depreciation

 

(3,326,312)

 

(2,923,072)

  Real estate held for investment, net

 

6,258,404

 

6,348,775

Real estate under development

 

 

 

 

(net of accumulated depreciation of $3,854 and $0)

 

588,636

 

342,282

Real estate held for disposition

 

 

 

 

(net of accumulated depreciation of $0 and $553)

 

 -

 

1,071

Total real estate owned, net of accumulated depreciation

 

6,847,040

 

6,692,128

 

 

 

 

 

Cash and cash equivalents

 

2,038

 

2,112

Restricted cash

 

19,792

 

19,994

Notes receivable, net

 

19,469

 

19,790

Investment in and advances to unconsolidated joint ventures, net

 

720,830

 

827,025

Other assets

 

124,104

 

118,535

Total assets

 

$
7,733,273

 

$
7,679,584

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Liabilities:

 

 

 

 

Secured debt

 

$
803,269

 

$
1,130,858

Unsecured debt

 

2,868,394

 

2,270,620

Real estate taxes payable

 

18,349

 

17,388

Accrued interest payable

 

33,432

 

29,257

Security deposits and prepaid rent

 

31,916

 

34,238

Distributions payable

 

91,455

 

86,936

Accounts payable, accrued expenses, and other liabilities

 

102,956

 

103,835

Total liabilities

 

3,949,771

 

3,673,132

Redeemable noncontrolling interests in the OP and DownREIT Partnership

 

948,138

 

909,482

Equity:

 

 

 

 

Preferred stock, no par value; 50,000,000 shares authorized

 

 

 

 

2,780,994 shares of 8.00% Series E Cumulative Convertible issued

 

 

 

 

and outstanding (2,796,903 shares at December 31, 2016)

 

46,200

 

46,457

15,852,721 shares of Series F outstanding (16,196,889 shares

 

 

 

 

at December 31, 2016)

 

 1

 

 1

Common stock, $0.01 par value; 350,000,000 shares authorized

 

 

 

 

267,822,069 shares issued and outstanding (267,259,469 shares at December 31, 2016)

 

2,678

 

2,673

Additional paid-in capital

 

4,651,205

 

4,635,413

Distributions in excess of net income

 

(1,871,603)

 

(1,585,825)

Accumulated other comprehensive income/(loss), net

 

(2,681)

 

(5,609)

Total stockholders' equity

 

2,825,800

 

3,093,110

Noncontrolling interests

 

9,564

 

3,860

Total equity

 

2,835,364

 

3,096,970

Total liabilities and equity

 

$
7,733,273