Toggle SGML Header (+)


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): July 30, 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 July 30, 2018, UDR, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2018. 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 July 30,  2018.

 99.2

 

 Supplemental Financial Information dated July 30, 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.

 

 

 

 

 July 30, 2018

 

By:

 

 /s/ Joseph D. Fisher

 

 

 

 

 Joseph D. Fisher

 

 

 

 

 Senior Vice President and Chief Financial Officer

 

 

 

 

 (Principal Financial Officer)

 

 


(Back To Top)

Section 2: EX-99.1 (EX-99.1)

udr_Ex99_1

 

 

 

 

 

Image - Image1.jpeg

 

Exhibit 99.1

 

Press Release

 

 

 

 

DENVER, CO - July 30, 2018

 

 

Contact: Chris Van Ens

 

 

 

 

Phone:   720.348.7762

 

UDR ANNOUNCES SECOND QUARTER 2018 RESULTS AND INCREASES FULL-YEAR GUIDANCE RANGES

 

UDR, Inc. (the “Company”) Second Quarter 2018 Highlights:

·

Net income per share was $0.07, Funds from Operations (“FFO”) per share was $0.49, FFO as Adjusted (“FFOA”) per share was $0.49, and Adjusted Funds from Operations (“AFFO”) per share was $0.45.

·

Net income attributable to common stockholders was $19.6 million as compared to $9.2 million in the prior year period. The increase was primarily due to higher income from operating properties.

·

Year-over-year same-store (“SS”) revenue, expense and net operating income (“NOI”) growth for the quarter were 3.4 percent, 2.9 percent and 3.5 percent, respectively.

·

Completed the construction of The Residences at Pacific City, a $350.0 million, 516-home community located in Huntington Beach, CA.

·

345 Harrison Street, the Company’s 585-home, $366.5 million development project located in Boston ended the second quarter 59.3 percent leased, just seven weeks after officially opening.

·

Increased full-year 2018 earnings and same-store growth guidance:

o

Increased net income per share guidance by $0.005 at the midpoint to $0.51 to $0.54.

o

Increased FFO per share guidance by $0.005 at the midpoint to $1.92 to $1.95.

o

Increased FFOA and AFFO per share guidance by $0.015 at the midpoints, to $1.93 to $1.96 and $1.78 to $1.81, respectively.

o

Increased SS revenue, expense and NOI growth guidance ranges by 25 basis points at the midpoints to 3.0 to 3.5 percent.

 

 

 

 

 

 

 

Q2 2018

Q2 2017

YTD 2018

YTD 2017

Net income per common share, diluted

$0.07

$0.03

$0.37

$0.13

Conversion from GAAP share count

(0.007)

(0.003)

(0.035)

(0.012)

Net gain on the sale of depreciable real estate owned

-

-

(0.237)

(0.043)

Cumulative effect of change in accounting principle

-

-

(0.007)

-

Depreciation and amortization

0.412

0.414

0.825

0.815

Noncontrolling interests and preferred dividends

0.009

0.006

0.038

0.018

FFO per common share and unit, diluted

$0.49

$0.45

$0.96

$0.90

Cost/(benefit) associated with debt extinguishment and other

-

0.015

-

0.020

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

-

-

-

(0.005)

Legal and other costs

0.002

-

0.002

-

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

0.003

0.004

0.006

0.003

FFOA per common share and unit, diluted

$0.49

$0.47

$0.97

$0.92

Recurring capital expenditures

(0.043)

(0.036)

(0.066)

(0.059)

AFFO per common share and unit, diluted

$0.45

$0.43

$0.90

$0.86

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

1


 

 

 

Operations

 

In the second quarter, total revenue increased by $11.8 million year-over-year, or 4.7 percent, to $259.7 million. This increase was primarily attributable to growth in revenue from operating communities.

In the second quarter, same-store NOI increased 3.5 percent year-over-year and was driven by same-store revenue growth of 3.4 percent and a 2.9 percent increase in same-store expenses. Weighted average same-store physical occupancy increased by 30 basis points year-over-year to 97.0 percent. The second quarter annualized rate of turnover was 53.6 percent, representing a 200 basis point decline year-over-year.

Summary of Same-Store Results Second Quarter 2018 versus Second Quarter 2017

Region

Revenue Growth

Expense

Growth

NOI Growth/

(Decline)

% of

Same-Store

Portfolio(1)

Same-Store

Occupancy(2)

Number of Same-Store Homes(3)

West

4.5%
0.6%
5.8%
44.3%
96.5%
13,942

Mid-Atlantic

2.6%
2.6%
2.6%
23.7%
97.5%
10,480

Northeast

0.9%
8.5%

(2.0)%

15.3%
97.0%
3,493

Southeast

4.5%
2.2%
5.5%
12.2%
97.1%
7,683

Southwest

2.9%
4.9%
1.6%
4.5%
97.0%
3,313

Total

3.4%
2.9%
3.5%
100.0%
97.0%
38,911

(1)Based on Q2 2018 NOI.

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

(3)During the second quarter, 38,911 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 were not held for disposition.

 

In the second quarter, sequential same-store NOI increased by 2.1 percent and was driven by same-store revenue growth of 1.4 percent and a 0.5 percent decline in same-store expenses. Weighted average same-store physical occupancy increased by 10 basis points sequentially to 97.0 percent.

 

Year-to-date, for the six months ended June 30, 2018, total revenue increased by $21.2 million year-over-year, or 4.3 percent, to $513.0 million. This increase was primarily attributable to growth in revenue from operating communities.

 

Year-to-date, for the six months ended June 30, 2018, same-store NOI increased 3.1 percent year-over-year and was driven by same-store revenue growth of 3.2 percent and a 3.3 percent increase in same-store expenses. Weighted average same-store physical occupancy increased by 30 basis points year-over-year to 96.9 percent. The year-to-date annualized rate of turnover was 46.9 percent, representing a 160 basis point decline year-over-year.

 

Summary of Same-Store Results Year-To-Date 2018 versus Year-To-Date 2017

Region

Revenue Growth

Expense

Growth

NOI Growth/

(Decline)

% of

Same-Store

Portfolio(1)

Same-Store

Occupancy(2)

Number of Same-Store Homes(3)

West

4.3%
1.2%
5.3%
44.0%
96.5%
13,698

Mid-Atlantic

2.5%
4.5%
1.6%
24.0%
97.5%
10,480

Northeast

0.7%
6.3%

(1.6)%

15.7%
97.2%
3,493

Southeast

4.6%
1.1%
6.3%
12.4%
97.0%
7,683

Southwest

1.8%
7.2%

(1.6)%

3.9%
96.8%
2,923

Total

3.2%
3.3%
3.1%
100.0%
96.9%
38,277

(1)Based on YTD 2018 NOI.

(2)Weighted average same-store physical occupancy for YTD 2018.

(3)For the six months ended June 30, 2018, 38,277 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 were not held for disposition.

2


 

 

Development and Redevelopment Activity

At the end of the second quarter, the Company’s development pipeline totaled $810.5 million at its pro-rata ownership interest. Of this total, 96 percent had been funded. All of the Company’s development communities were in lease-up as of the end of the second quarter. 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, construction was completed on The Residences at Pacific City, a 516-home community located in Huntington Beach, CA with an estimated cost to construct of $350.0 million. The UDR/MetLife Joint Venture completed construction of Vision on Wilshire, a 150‑home community located in Los Angeles with an estimated cost to construct of $129.0 million at 100 percent. 

Developer Capital Program (“DCP”) Activity

At the end of the second quarter, the Company’s DCP investment, including accrued return, totaled $179.2 million. Activity during the quarter consisted of:

·

Completed the construction of Parallel, a 386-home community located in Anaheim, CA and CityLine II, a 155-home community located in Seattle. The Company’s ownership interest and initial investment in the two communities averages 49 percent and totals $42.0 million, respectively.

Capital Markets and Balance Sheet Activity

 

Second quarter UDR/MetLife Joint Venture capital markets activity included refinancing three construction loans into $191.6 million of 10-year, fixed-rate secured loans with a weighted average rate of 3.94 percent.

At June 30, 2018, the Company had approximately $771.1 million of availability, through a combination of cash and undrawn capacity, on its credit facilities.

The Company’s total indebtedness at June 30, 2018 was $3.75 billion. The Company ended the quarter with fixed-rate debt representing 85.0 percent of its total debt, a weighted average interest rate of 3.7 percent and a weighted average maturity of 4.8 years. The Company’s consolidated leverage was 33.4 percent versus 33.3 percent a year ago, its consolidated net‑debt-to-EBITDAre was 5.7x versus 5.8x a year ago and its consolidated fixed charge coverage ratio was 4.6x versus 4.5x a year ago.

Dividend

 

As previously announced, the Company’s Board of Directors declared a regular quarterly dividend on its common stock for the second quarter of 2018 in the amount of $0.3225 per share. The dividend will be paid in cash on July 31, 2018 to UDR common stock shareholders of record as of July 10, 2018. The second quarter 2018 dividend will represent the 183rd consecutive quarterly dividend paid by the Company on its common stock.

 

3


 

 

Outlook

 

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

 

 

 

 

 

 

 

 

Net income per share

    

$0.08 to $0.10

 

 

    

 

 

 

 

 

 

 

 

FFO per share

 

$0.48 to $0.50

 

 

 

 

 

 

 

 

 

 

 

FFO as Adjusted per share

 

$0.48 to $0.50

 

 

 

 

 

 

 

 

 

 

 

AFFO per share

 

$0.43 to $0.45

 

 

 

 

 

 

For the full-year 2018, the Company has increased its previously provided earnings guidance ranges:

 

 

 

 

 

 

 

 

 

 

Updated Guidance

 

Prior Guidance

 

 

Net income per share

    

$0.51 to $0.54

 

$0.50 to $0.54

    

 

 

 

 

 

 

 

 

FFO per share

 

$1.92 to $1.95

 

$1.91 to $1.95

 

 

 

 

 

 

 

 

 

FFO as Adjusted per share

 

$1.93 to $1.96

 

$1.91 to $1.95

 

 

 

 

 

 

 

 

 

AFFO per share

 

$1.78 to $1.81

 

$1.76 to $1.80

 

 

 

 

For the full-year 2018, the Company has increased its previously provided same-store growth guidance ranges:

 

 

 

 

 

 

 

 

 

 

 

Updated Guidance

 

Prior Guidance

 

 

Revenue

    

3.00% to 3.50%

 

2.50% to 3.50%

    

 

 

 

 

 

 

 

 

Expense

 

3.00% to 3.50%

 

2.50% to 3.50%

 

 

 

 

 

 

 

 

 

Net operating income

 

3.00% to 3.50%

 

2.50% to 3.50%

 

 

 

 

 

Additional assumptions for the Company’s third quarter and full-year 2018 guidance can be found on Attachment 15 of the Company’s second 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 second 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 second quarter Supplemental Financial Information.

4


 

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 July 31, 2018 to discuss second quarter results. 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 August 31, 2018, by dialing 844-512-2921 for domestic and 412-317-6671 for international and entering the confirmation number, 13681180, when prompted for the passcode.

 

A replay of the call will also 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 second quarter 2018 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.

 

5


 

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. Such statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the results of operations or plans expressed or implied by such forward‑looking statements. Such factors include, among other things, unfavorable changes in the apartment market, changing economic conditions, the impact of inflation/deflation on rental rates and property operating expenses, expectations concerning the availability of capital and the stability of the capital markets, the impact of competition and competitive pricing, acquisitions, developments and redevelopments not achieving anticipated results, delays in completing developments and redevelopments, delays in completing lease-ups on schedule or at expected rent and occupancy levels, 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 joint ventures and partnerships with third parties, expectations that automation 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 June 30, 2018, UDR owned or had an ownership position in 49,464 apartment homes including 1,334 homes under development or in its Developer Capital Program – West Coast Development Joint Venture. 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.

 

 

6


(Back To Top)

Section 3: EX-99.1 (EX-99.1)

Click here to view PDF

Note: This PDF document represents an unofficial copy of information contained within this document, as allowed by the recent EDGAR system modernization.
SNL Interactive cannot take responsibility for the integrity of this file or its appearance, layout, or legibility. It is provided as is by the filer of this document.

(Back To Top)

Section 4: EX-99.2 (EX-99.2)

Click here to view PDF

Note: This PDF document represents an unofficial copy of information contained within this document, as allowed by the recent EDGAR system modernization.
SNL Interactive cannot take responsibility for the integrity of this file or its appearance, layout, or legibility. It is provided as is by the filer of this document.

(Back To Top)

Section 5: EX-99.2 (EX-99.2)

udr_Ex99_2_Taxonomy2017

Exhibit 99.2

Financial Highlights

 

UDR, Inc.

As of End of Second Quarter 2018

(Unaudited) (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual Results

 

Actual Results

 

Guidance as of June 30, 2018

Dollars in thousands, except per share and unit

 

 

 

2Q 2018

 

YTD 2018

 

3Q 2018

 

Full-Year 2018

 

 

 

 

 

 

 

 

 

 

 

GAAP Metrics

 

 

 

 

 

 

 

 

 

 

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

 

 

 

$20,601

 

$102,357

 

--

 

--

Net income/(loss) attributable to common stockholders

 

 

 

$19,630

 

$100,431

 

--

 

--

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

 

 

 

$0.07

 

$0.37

 

$0.08 to $0.10

 

$0.51 to $0.54

 

 

 

 

 

 

 

 

 

 

 

Per Share Metrics

 

 

 

 

 

 

 

 

 

 

FFO per common share and unit, diluted

 

 

 

$0.49

 

$0.96

 

$0.48 to $0.50

 

$1.92 to $1.95

FFO as Adjusted per common share and unit, diluted

 

 

 

$0.49

 

$0.97

 

$0.48 to $0.50

 

$1.93 to $1.96

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

 

 

 

$0.45

 

$0.90

 

$0.43 to $0.45

 

$1.78 to $1.81

Dividend declared per share and unit

 

 

 

$0.3225

 

$0.6450

 

$0.3225

 

$1.29 (2)

 

 

 

 

 

 

 

 

 

 

 

Same-Store Operating Metrics

 

 

 

 

 

 

 

 

 

 

Revenue growth

 

 

 

3.4%

 

3.2%

 

--

 

3.00% - 3.50%

Expense growth

 

 

 

2.9%

 

3.3%

 

--

 

3.00% - 3.50%

NOI growth

 

 

 

3.5%

 

3.1%

 

--

 

3.00% - 3.50%

Physical Occupancy

 

 

 

97.0%

 

96.9%

 

--

 

96.7% - 96.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Metrics

 

 

 

Homes

 

Communities

 

% of Total NOI

 

 

Same-Store

 

 

 

38,911

 

124

 

84.4%

 

 

Stabilized, Non-Mature

 

 

 

523

 

2

 

1.2%

 

 

Acquired Communities

 

 

 

-

 

-

 

-

 

 

Redevelopment

 

 

 

-

 

-

 

-

 

 

Development, completed

 

 

 

746

 

1

 

0.4%

 

 

Non-Residential / Other

 

 

 

N/A

 

N/A

 

3.2%

 

 

Sold and Held for Disposition

 

 

 

-

 

-

 

-

 

 

Joint Venture (includes completed JV developments) (3)

 

 

 

7,950

 

31

 

10.8%

 

 

Sub-total, completed homes

 

 

 

48,130

 

158

 

100%

 

 

Under Development

 

 

 

355

 

1

 

-

 

 

Joint Venture Development

 

 

 

162

 

1

 

-

 

 

Developer Capital Program - West Coast Development JV

 

 

 

817

 

3

 

-

 

 

Total expected homes (3)(4)

 

 

 

49,464

 

163

 

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Metrics (adjusted for non-recurring items)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2Q 2018

 

2Q 2017

 

 

 

 

Consolidated Interest Coverage Ratio

 

 

 

4.7x

 

4.6x

 

 

 

 

Consolidated Fixed Charge Coverage Ratio

 

 

 

4.6x

 

4.5x

 

 

 

 

Consolidated Debt as a percentage of Total Assets

 

 

 

33.4%

 

33.3%

 

 

 

 

Consolidated Net Debt-to-EBITDAre

 

 

 

5.7x

 

5.8x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C:\Users\bmaas\Desktop\2Q18 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 1,042 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

 

Six Months Ended

 

 

June 30,

 

June 30,

In thousands, except per share amounts

 

2018

 

2017

 

2018

 

2017

 

 

 

 

 

 

 

 

 

REVENUES:

 

 

 

 

 

 

 

 

Rental income

 

$
256,634

 

$
244,658

 

$
507,117

 

$
485,929

Joint venture management and other fees

 

3,109

 

3,321

 

5,931

 

5,891

Total revenues

 

259,743

 

247,979

 

513,048

 

491,820

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Property operating and maintenance

 

41,452

 

40,612

 

82,039

 

80,212

Real estate taxes and insurance

 

31,907

 

29,423

 

65,189

 

59,611

Property management

 

7,057

 

6,728

 

13,945

 

13,363

Other operating expenses

 

2,825

 

2,369

 

4,834

 

4,060

Real estate depreciation and amortization

 

106,520

 

108,450

 

214,656

 

213,482

General and administrative

 

12,373

 

11,434

 

24,132

 

24,509

Casualty-related charges/(recoveries), net

 

746

 

1,191

 

1,686

 

1,693

Other depreciation and amortization

 

1,684

 

1,567

 

3,375

 

3,175

Total operating expenses

 

204,564

 

201,774

 

409,856

 

400,105

 

 

 

 

 

 

 

 

 

Operating income

 

55,179

 

46,205

 

103,192

 

91,715

 

 

 

 

 

 

 

 

 

Income/(loss) from unconsolidated entities (2)

 

(2,032)

 

(1,426)

 

(3,709)

 

9,772

 

 

 

 

 

 

 

 

 

Interest expense

 

(31,598)

 

(29,548)

 

(61,541)

 

(58,571)

(Cost)/benefit associated with debt extinguishment and other

 

 -

 

(4,318)

 

 -

 

(5,834)

Total interest expense

 

(31,598)

 

(33,866)

 

(61,541)

 

(64,405)

Interest income and other income/(expense), net

 

1,128

 

515

 

3,887

 

942

 

 

 

 

 

 

 

 

 

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

 

22,677

 

11,428

 

41,829

 

38,024

Tax (provision)/benefit, net

 

(233)

 

(366)

 

(460)

 

(698)

 

 

 

 

 

 

 

 

 

Income/(loss) from continuing operations

 

22,444

 

11,062

 

41,369

 

37,326

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

 

 -

 

 -

 

70,300

 

2,132

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

22,444

 

11,062

 

111,669

 

39,458

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

 

(1,813)

 

(854)

 

(9,203)

 

(3,192)

Net (income)/loss attributable to noncontrolling interests

 

(30)

 

(51)

 

(109)

 

(142)

 

 

 

 

 

 

 

 

 

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

 

20,601

 

10,157

 

102,357

 

36,124

Distributions to preferred stockholders - Series E (Convertible)

 

(971)

 

(929)

 

(1,926)

 

(1,858)

 

 

 

 

 

 

 

 

 

Net income/(loss) attributable to common stockholders

 

$
19,630

 

$
9,228

 

$
100,431

 

$
34,266

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$ 0.07

 

$ 0.03

 

$ 0.38

 

$ 0.13

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

 

$ 0.07

 

$ 0.03

 

$ 0.37

 

$ 0.13

 

 

 

 

 

 

 

 

 

Common distributions declared per share

 

$0.3225

 

$0.3100

 

$0.6450

 

$0.6200

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding - basic

 

267,311

 

266,972

 

267,428

 

266,881

Weighted average number of common shares outstanding - diluted

 

268,890

 

268,859

 

269,002

 

268,742

(1)

See Attachment 16 for definitions and other terms.

(2)

During the six months ended June 30, 2017, UDR exercised its fixed price option to acquire CityLine, a West Coast Development JV community in Seattle, WA, and recorded a $12.2 million gain on consolidation.

 

2


 

Picture 9

Attachment 2

 

UDR, Inc.

Funds From Operations

(Unaudited) (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

In thousands, except per share and unit amounts

 

2018

 

2017

 

 

2018

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss) attributable to common stockholders

 

$

19,630

 

$

9,228

 

$

100,431

 

$

34,266

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate depreciation and amortization

 

 

106,520

 

 

108,450

 

 

214,656

 

 

213,482

Noncontrolling interests

 

 

1,843

 

 

905

 

 

9,312

 

 

3,334

Real estate depreciation and amortization on unconsolidated joint ventures

 

 

15,512

 

 

14,497

 

 

29,852

 

 

28,264

Cumulative effect of change in accounting priniciple (2)

 

 

 -

 

 

 -

 

 

(2,100)

 

 

 -

Net gain on the sale of unconsolidated depreciable property

 

 

 -

 

 

 -

 

 

 -

 

 

(12,158)

Net gain on the sale of depreciable real estate owned

 

 

 -

 

 

 -

 

 

(70,300)

 

 

(552)

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

 

$

143,505

 

$

133,080

 

$

281,851

 

$

266,636

 

 

 

 

 

 

 

 

 

 

 

 

 

  Distributions to preferred stockholders - Series E (Convertible) (3)

 

 

971

 

 

929

 

 

1,926

 

 

1,858

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO attributable to common stockholders and unitholders, diluted

 

$

144,476

 

$

134,009

 

$

283,777

 

$

268,494

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO per common share and unit, basic 

 

$

0.49

 

$

0.46

 

$

0.97

 

$

0.91

FFO per common share and unit, diluted

 

$

0.49

 

$

0.45

 

$

0.96

 

$

0.90

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

291,885

 

 

291,836

 

 

291,968

 

 

291,794

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

 

 

 

 

 

 

 

 

 

 

 

 

   equivalents outstanding - diluted

 

 

296,475

 

 

296,751

 

 

296,553

 

 

296,683

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of adjustments to FFO:

 

 

 

 

 

 

 

 

 

 

 

 

  Cost/(benefit) associated with debt extinguishment and other

 

$

 -

 

$

4,318

 

$

 -

 

$

5,834

  Net gain on the sale of non-depreciable real estate owned (4)

 

 

 -

 

 

 -

 

 

 -

 

 

(1,580)

  Legal and other costs

 

 

625

 

 

 -

 

 

625

 

 

 -

  Casualty-related charges/(recoveries), net

 

 

806

 

 

1,191

 

 

1,815

 

 

1,693

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

 

 

 -

 

 

 -

 

 

 -

 

 

(881)

 

 

$

1,431

 

$

5,509

 

$

2,440

 

$

5,066

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO as Adjusted attributable to common stockholders and unitholders, diluted

 

$

145,907

 

$

139,518

 

$

286,217

 

$

273,560

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO as Adjusted per common share and unit, diluted

 

$

0.49

 

$

0.47

 

$

0.97

 

$

0.92

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring capital expenditures

 

 

(12,781)

 

 

(10,682)

 

 

(19,450)

 

 

(17,473)

AFFO attributable to common stockholders and unitholders, diluted

 

$

133,126

 

$

128,836

 

$

266,767

 

$

256,087

 

 

 

 

 

 

 

 

 

 

 

 

 

AFFO per common share and unit, diluted

 

$

0.45

 

$

0.43

 

$

0.90

 

$

0.86


(1)

See Attachment 16 for definitions and other terms.

(2)

During 1Q18, UDR adopted ASU No. 2016 01, Financial Instruments – Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities.  The updated standard requires certain equity securities to be measured at fair value on the balance sheet, with changes in fair value recognized in net income.  The adoption of the standard resulted in UDR recording a gain of $2.1 million in Interest income and other income/(expense), net on the Consolidated Statements of Operations.  As such, the cumulative effect of the change in accounting principle is backed out for FFO.

(3)

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.

(4)

The GAAP gain for the six months ended June 30, 2017 is $2.1 million, of which $1.6 million is FFO gain related to the sale of land parcels.  The FFO gain is backed out for FFO as Adjusted.

3


 

Picture 9

 

Attachment 3

 

UDR, Inc.

Consolidated Balance Sheets

(Unaudited) (1)

 

 

 

 

 

 

 

 

June 30,

 

December 31,

In thousands, except share and per share amounts

 

2018

 

2017

 

 

 

 

 

ASSETS

 

 

 

 

Real estate owned:

 

 

 

 

Real estate held for investment

 

$
9,940,707

 

$
9,584,716

Less: accumulated depreciation

 

(3,518,824)

 

(3,326,312)

Real estate held for investment, net

 

6,421,883

 

6,258,404

Real estate under development

 

 

 

 

(net of accumulated depreciation of $592 and $3,854)

 

335,665

 

588,636

Total real estate owned, net of accumulated depreciation

 

6,757,548

 

6,847,040

 

 

 

 

 

Cash and cash equivalents

 

1,055

 

2,038

Restricted cash

 

29,857

 

19,792

Notes receivable, net

 

40,709

 

19,469

Investment in and advances to unconsolidated joint ventures, net

 

739,910

 

720,830

Other assets

 

138,279

 

124,104

Total assets

 

$
7,707,358

 

$
7,733,273

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Liabilities:

 

 

 

 

Secured debt

 

$
799,815

 

$
803,269

Unsecured debt

 

2,952,297

 

2,868,394

Real estate taxes payable

 

21,972

 

18,349

Accrued interest payable

 

38,201

 

33,432

Security deposits and prepaid rent

 

34,519

 

31,916

Distributions payable

 

95,131

 

91,455

Accounts payable, accrued expenses, and other liabilities

 

74,344

 

102,956

Total liabilities

 

4,016,279

 

3,949,771

Redeemable noncontrolling interests in the OP and DownREIT Partnership

 

922,329

 

948,138

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 (2,780,994 shares at December 31, 2017)

 

46,200

 

46,200

15,804,393 shares of Series F outstanding (15,852,721 shares

 

 

 

 

at December 31, 2017)

 

 1

 

 1

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

 

 

 

 

267,667,437 shares issued and outstanding (267,822,069 shares at December 31, 2017)

 

2,677

 

2,678

Additional paid-in capital

 

4,639,147

 

4,651,205

Distributions in excess of net income

 

(1,929,124)

 

(1,871,603)

Accumulated other comprehensive income/(loss), net

 

(1,407)

 

(2,681)

Total stockholders' equity

 

2,757,494

 

2,825,800

Noncontrolling interests

 

11,256

 

9,564

Total equity

 

2,768,750

 

2,835,364

Total liabilities and equity

 

$
7,707,358

 

$
7,733,273

(1)

See Attachment 16 for definitions and other terms.

 

4


 

Picture 9

Attachment 4(A)

 

UDR, Inc.

Selected Financial Information

(Unaudited) (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

Common Stock and Equivalents

 

 

 

 

 

 

 

 

 

2018

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares

 

 

 

 

 

 

 

 

 

267,359,370

 

267,309,552

Restricted shares

 

 

 

 

 

 

 

 

 

308,067

 

512,517

Total common stock

 

 

 

 

 

 

 

 

 

267,667,437

 

267,822,069

Stock options, LTIP Units and restricted stock equivalents

 

 

 

 

 

 

 

 

 

1,358,089

 

1,589,662

Operating and DownREIT Partnership units

 

 

 

 

 

 

 

 

 

22,817,548

 

22,862,502

Preferred OP units

 

 

 

 

 

 

 

 

 

1,751,671

 

1,751,671

Convertible preferred Series E stock (2)

 

 

 

 

 

 

 

 

 

3,010,843

 

3,010,843

Total common stock and equivalents

 

 

 

 

 

 

 

 

 

296,605,588

 

297,036,747

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Shares Outstanding