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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): October 29, 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 October 29, 2018, UDR, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 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 October 29,  2018.

 99.2

 

 Supplemental Financial Information dated October 29, 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.

 

 

 

 

 October 29, 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 – October 29, 2018

 

 

Contact: Chris Van Ens

 

 

 

 

Phone:   720.348.7762

 

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

UDR, Inc. (the “Company”) Third 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 $0.44.

·

Net income attributable to common stockholders was $17.6 million as compared to $15.3 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 3.8 percent, 3.5 percent and 3.9 percent, respectively.

·

The Company’s $808.5 million pro-rata share of development projects in lease-up continued to realize strong demand, ending the third quarter at a weighted average 77.9 percent leased.

·

Invested in three Developer Capital Program (“DCP”) projects for a total commitment of $73.1 million. The communities are located in Philadelphia, PA, Orlando, FL, and Santa Monica, CA.

·

Entered into a contract to sell Circle Towers, a 46 year old, 604-home community located in Fairfax County, VA, for $160.0 million. The transaction is scheduled to close during the fourth quarter subject to customary closing conditions.

·

Subsequent to quarter end, issued $300.0 million of 10-year unsecured debt at an effective 4.27 percent coupon and intends to use the proceeds to prepay $195.8 million of 5.28 percent secured debt originally scheduled to mature in October and December 2019 and for general corporate purposes.

·

Increased and/or tightened full-year 2018 earnings and same-store growth guidance ranges:

o

Increased net income per share guidance by $0.18 at the midpoint to $0.70 to $0.71.

o

Increased FFOA per share guidance by $0.01 at the midpoint to $1.95 to $1.96.

o

Tightened AFFO per share guidance to $1.79 to $1.80.

o

Increased SS revenue, expense and NOI growth guidance ranges by 25 basis points at the low-ends to 3.25 to 3.50 percent.

 

 

 

 

 

 

Q3 2018

Q3 2017

YTD 2018

YTD 2017

Net income per common share, diluted

$0.07

$0.06

$0.44

$0.18

Conversion from GAAP share count

(0.006)

(0.005)

(0.041)

(0.017)

Net gain on the sale of depreciable real estate owned

-

(0.008)

(0.237)

(0.051)

Cumulative effect of change in accounting principle

-

-

(0.007)

-

Depreciation and amortization

0.418

0.411

1.242

1.225

Noncontrolling interests and preferred dividends

0.009

0.008

0.047

0.025

FFO per common share and unit, diluted

$0.49

$0.46

$1.44

$1.37

Cost/(benefit) associated with debt extinguishment and other

0.002

-

0.002

0.020

Acquisition-related costs/(fees)

-

0.001

-

0.001

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

-

-

-

(0.005)

Legal and other costs

0.002

-

0.004

-

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

0.002

0.007

0.009

0.010

FFOA per common share and unit, diluted

$0.49

$0.47

$1.46

$1.39

Recurring capital expenditures

(0.050)

(0.043)

(0.116)

(0.102)

AFFO per common share and unit, diluted

$0.44

$0.43

$1.34

$1.29

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 third quarter Supplemental Financial Information.

1


 

 

 

Operations

 

In the third quarter, total revenue increased by $15.1 million year-over-year, or 6.0 percent, to $266.1 million. This increase was primarily attributable to growth in revenue from operating and lease-up communities.

In the third quarter, same-store NOI increased 3.9 percent year-over-year, driven by same-store revenue growth of 3.8 percent and same-store expense growth of 3.5 percent. Weighted average same-store physical occupancy increased by 30 basis points year-over-year to 96.9 percent. The third quarter annualized rate of turnover was 63.4 percent, representing a 40 basis point increase year-over-year.

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

 

 

 

 

 

 

 

Region

Revenue Growth

Expense

Growth/

(Decline)

NOI Growth/

(Decline)

% of

Same-Store

Portfolio(1)

Same-Store

Occupancy(2)

Number of Same-Store Homes(3)

West

4.4%

(0.0)%

6.0%
45.4%
96.5%
13,942

Mid-Atlantic

3.3%
4.1%
3.0%
22.3%
97.2%
9,876

Northeast

1.7%
6.8%

(0.6)%

15.2%
97.3%
3,493

Southeast

5.8%
9.3%
4.3%
12.7%
96.9%
7,683

Southwest

2.2%
1.1%
3.0%
4.4%
97.2%
3,313

Total

3.8%
3.5%
3.9%
100.0%
96.9%
38,307

(1)Based on Q3 2018 SS NOI.

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

(3)During the third quarter, 38,307 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 third quarter, sequential same-store NOI decreased by 0.2 percent, driven by same-store revenue growth of 1.2 percent and same-store expense growth of 4.9 percent. Weighted average same-store physical occupancy decreased by 10 basis points sequentially to 96.9 percent.

 

Year-to-date, for the nine months ended September 30, 2018, total revenue increased by $36.3 million year-over-year, or 4.9 percent, to $779.2 million. This increase was primarily attributable to growth in revenue from operating and lease-up communities.

 

Year-to-date, for the nine months ended September 30, 2018, same-store NOI increased 3.4 percent year-over-year, driven by same-store revenue growth of 3.4 percent and same-store expense growth of 3.4 percent. 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 52.5 percent, representing a 100 basis point decrease 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%
0.8%
5.6%
44.8%
96.5%
13,698

Mid-Atlantic

2.8%
4.5%
2.0%
22.8%
97.4%
9,876

Northeast

1.0%
6.5%

(1.3)%

15.8%
97.2%
3,493

Southeast

5.0%
3.7%
5.6%
12.7%
97.0%
7,683

Southwest

1.6%
4.8%

(0.4)%

3.9%
96.9%
2,923

Total

3.4%
3.4%
3.4%
100.0%
96.9%
37,673

(1)Based on YTD 2018 SS NOI.

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

(3)For the nine months ended September 30, 2018, 37,673 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 Activity

At the end of the third quarter, the Company’s development pipeline totaled $808.5 million at its pro-rata ownership interest, and was 98 percent funded. All of the Company’s development communities were in lease-up as of the end of the third 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.

DCP Activity

At the end of the third quarter, the Company’s DCP investment, including accrued return, totaled $222.7 million. Activity during the quarter consisted of:

·

Investment in three DCP projects for a total capital commitment of $73.1 million. The communities are located in Philadelphia, PA, Orlando, FL, and Santa Monica, CA, will include 867 homes and have a weighted average yield and term to maturity of 10.0 percent and 4.9 years.

 

Transaction Activity

During the quarter, the Company entered into a contract to sell Circle Towers, a 46 year old, 604-home community located in Fairfax County, VA, for $160.0 million or $264,900 per home. During the third quarter the community had a weighted average monthly revenue per occupied home of $2,049. The transaction is scheduled to close during the fourth quarter subject to customary closing conditions.

 

Capital Markets and Balance Sheet Activity

 

Balance sheet activity during the third quarter included:

·

The Company amended and restated its $1.1 billion revolving credit facility and its $350.0 million term loan outstanding under the same agreement. The amendment extends the maturity dates on the revolver and term loan to January and September 2023, respectively. In addition, the spread over LIBOR was reduced by 7.5 basis points and 5.0 basis points for the revolver and term loan, respectively.

·

The Company refinanced $79.1 million of consolidated secured debt with a weighted average rate of 5.04 percent within its DownREIT partnership that was originally scheduled to mature in 2018 and 2019 into an $80.0 million secured 10-year fixed-rate loan at a rate of 4.08 percent.

·

Third quarter UDR/MetLife Joint Venture capital markets activity included refinancing the construction loan associated with Vitruvian West into a $41.3 million secured 10-year fixed-rate loan at a rate of 4.12 percent.     

Subsequent to quarter end, the Company issued $300.0 million of 10-year unsecured debt at a 4.40 percent coupon. Proceeds are intended to be used to prepay $195.8 million of 5.28 percent secured debt originally scheduled to mature in October and December 2019 and for general corporate purposes. The Company had previously entered into a hedging instrument that lowered the effective coupon on the unsecured issuance to 4.27 percent.

At September 30, 2018, the Company had approximately $710.1 million of availability, through a combination of cash and undrawn capacity, on its credit facilities.

The Company’s total indebtedness at September 30, 2018 was $3.8 billion. The Company ended the quarter with fixed-rate debt representing 84.4 percent of its total debt, a weighted average interest rate of 3.6 percent and a weighted average maturity of 4.9 years. The Company’s consolidated leverage was 33.7 percent versus 33.5 percent a year ago, its consolidated net‑debt-to-EBITDAre was 5.7x versus 5.9x a year ago and its consolidated fixed charge coverage ratio was 4.5x versus 4.4x a year ago.

3


 

 

Dividend

As previously announced, the Company’s Board of Directors declared a regular quarterly dividend on its common stock for the third quarter of 2018 in the amount of $0.3225 per share. The dividend will be paid in cash on October 31, 2018 to UDR common stock shareholders of record as of October 10, 2018. The third quarter 2018 dividend will represent the 184th consecutive quarterly dividend paid by the Company on its common stock.

4


 

Outlook

 

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

 

 

 

 

 

 

 

 

Net income per share

    

$0.26 to $0.27

 

 

    

 

 

 

 

 

 

 

 

FFO per share

 

$0.48 to $0.49

 

 

 

 

 

 

 

 

 

 

 

FFO as Adjusted per share

 

$0.49 to $0.50

 

 

 

 

 

 

 

 

 

 

 

AFFO per share

 

$0.45 to $0.46

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

Updated Guidance

 

Prior Guidance

 

 

Net income per share

    

$0.70 to $0.71

 

$0.51 to $0.54

    

 

 

 

 

 

 

 

 

FFO per share

 

$1.92 to $1.93

 

$1.92 to $1.95

 

 

 

 

 

 

 

 

 

FFO as Adjusted per share

 

$1.95 to $1.96

 

$1.93 to $1.96

 

 

 

 

 

 

 

 

 

AFFO per share

 

$1.79 to $1.80

 

$1.78 to $1.81

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Updated Guidance

 

Prior Guidance

 

 

Revenue

    

3.25% to 3.50%

 

3.00% to 3.50%

    

 

 

 

 

 

 

 

 

Expense

 

3.25% to 3.50%

 

3.00% to 3.50%

 

 

 

 

 

 

 

 

 

Net operating income

 

3.25% to 3.50%

 

3.00% 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 third 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 third 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 third 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 October 30, 2018 to discuss third 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 November 30, 2018, by dialing 844-512-2921 for domestic and 412-317-6671 for international and entering the confirmation number, 13683794, 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 third 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.

 

 

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. 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 September 30, 2018, UDR owned or had an ownership position in 49,464 apartment homes including 932 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.

 

 

7


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Section 3: EX-99.2 (EX-99.2)

udr_Ex99_2

Exhibit 99.2

Financial Highlights

 

UDR, Inc.

As of End of Third Quarter 2018

(Unaudited) (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual Results

 

Actual Results

 

Guidance as of September 30, 2018

Dollars in thousands, except per share and unit

 

 

 

3Q 2018

 

YTD 2018

 

4Q 2018

 

Full-Year 2018

 

 

 

 

 

 

 

 

 

 

 

GAAP Metrics

 

 

 

 

 

 

 

 

 

 

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

 

 

 

$18,610

 

$120,967

 

--

 

--

Net income/(loss) attributable to common stockholders

 

 

 

$17,639

 

$118,070

 

--

 

--

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

 

 

 

$0.07

 

$0.44

 

$0.26 to $0.27

 

$0.70 to $0.71

 

 

 

 

 

 

 

 

 

 

 

Per Share Metrics

 

 

 

 

 

 

 

 

 

 

FFO per common share and unit, diluted

 

 

 

$0.49

 

$1.44

 

$0.48 to $0.49

 

$1.92 to $1.93

FFO as Adjusted per common share and unit, diluted

 

 

 

$0.49

 

$1.46

 

$0.49 to $0.50

 

$1.95 to $1.96

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

 

 

 

$0.44

 

$1.34

 

$0.45 to $0.46

 

$1.79 to $1.80

Dividend declared per share and unit

 

 

 

$0.3225

 

$0.9675

 

$0.3225

 

$1.29 (2)

 

 

 

 

 

 

 

 

 

 

 

Same-Store Operating Metrics

 

 

 

 

 

 

 

 

 

 

Revenue growth

 

 

 

3.8%

 

3.4%

 

--

 

3.25% - 3.50%

Expense growth

 

 

 

3.5%

 

3.4%

 

--

 

3.25% - 3.50%

NOI growth

 

 

 

3.9%

 

3.4%

 

--

 

3.25% - 3.50%

Physical Occupancy

 

 

 

96.9%

 

96.9%

 

--

 

96.7% - 96.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Metrics

 

 

 

Homes

 

Communities

 

% of Total NOI

 

 

Same-Store

 

 

 

38,307

 

123

 

83.2%

 

 

Stabilized, Non-Mature

 

 

 

523

 

2

 

1.1%

 

 

Acquired Communities

 

 

 

-

 

-

 

-

 

 

Redevelopment

 

 

 

-

 

-

 

-

 

 

Development, completed

 

 

 

986

 

1

 

1.5%

 

 

Non-Residential / Other

 

 

 

N/A

 

N/A

 

3.1%

 

 

Joint Venture (includes completed JV developments) (3)

 

 

 

8,112

 

32

 

11.1%

 

 

Sub-total, completed homes

 

 

 

47,928

 

158

 

100%

 

 

Sold and Held for Disposition

 

 

 

604

 

1

 

-

 

 

Under Development

 

 

 

115

 

1

 

-

 

 

Joint Venture Development

 

 

 

-

 

-

 

-

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3Q 2018

 

3Q 2017

 

 

 

 

Consolidated Interest Coverage Ratio

 

 

 

4.7x

 

4.5x

 

 

 

 

Consolidated Fixed Charge Coverage Ratio

 

 

 

4.5x

 

4.4x

 

 

 

 

Consolidated Debt as a percentage of Total Assets

 

 

 

33.7%

 

33.5%

 

 

 

 

Consolidated Net Debt-to-EBITDAre

 

 

 

5.7x

 

5.9x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C:\Users\bmaas\Desktop\3Q18 - Financial Highlights Picture.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 1,909 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

 

Nine Months Ended

 

 

September 30,

 

September 30,

In thousands, except per share amounts

 

2018

 

2017

 

2018

 

2017

 

 

 

 

 

 

 

 

 

REVENUES:

 

 

 

 

 

 

 

 

Rental income

 

$
263,256

 

$
248,264

 

$
770,373

 

$
734,193

Joint venture management and other fees

 

2,888

 

2,827

 

8,819

 

8,718

Total revenues

 

266,144

 

251,091

 

779,192

 

742,911

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Property operating and maintenance

 

44,090

 

42,362

 

126,129

 

122,574

Real estate taxes and insurance

 

34,352

 

31,181

 

99,541

 

90,792

Property management

 

7,240

 

6,827

 

21,185

 

20,190

Other operating expenses

 

3,314

 

1,950

 

8,148

 

6,010

Real estate depreciation and amortization

 

107,881

 

107,171

 

322,537

 

320,653

Acquisition costs

 

 -

 

344

 

 -

 

344

General and administrative

 

11,896

 

12,123

 

36,028

 

36,632

Casualty-related charges/(recoveries), net

 

678

 

2,056

 

2,364

 

3,749

Other depreciation and amortization

 

1,682

 

1,585

 

5,057

 

4,760

Total operating expenses

 

211,133

 

205,599

 

620,989

 

605,704

 

 

 

 

 

 

 

 

 

Operating income

 

55,011

 

45,492

 

158,203

 

137,207

 

 

 

 

 

 

 

 

 

Income/(loss) from unconsolidated entities (2)

 

(1,382)

 

1,819

 

(5,091)

 

11,591

 

 

 

 

 

 

 

 

 

Interest expense

 

(33,994)

 

(30,095)

 

(95,535)

 

(88,666)

(Cost)/benefit associated with debt extinguishment and other

 

(407)

 

 -

 

(407)

 

(5,834)

Total interest expense

 

(34,401)

 

(30,095)

 

(95,942)

 

(94,500)

Interest income and other income/(expense), net

 

1,188

 

481

 

5,075

 

1,423

 

 

 

 

 

 

 

 

 

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

 

20,416

 

17,697

 

62,245

 

55,721

Tax (provision)/benefit, net

 

(158)

 

(127)

 

(618)

 

(825)

 

 

 

 

 

 

 

 

 

Income/(loss) from continuing operations

 

20,258

 

17,570

 

61,627

 

54,896

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

 

 -

 

 -

 

70,300

 

2,132

 

 

 

 

 

 

 

 

 

Net income/(loss)

 

20,258

 

17,570

 

131,927

 

57,028

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

 

(1,616)

 

(1,415)

 

(10,819)

 

(4,607)

Net (income)/loss attributable to noncontrolling interests

 

(32)

 

35

 

(141)

 

(107)

 

 

 

 

 

 

 

 

 

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

 

18,610

 

16,190

 

120,967

 

52,314

Distributions to preferred stockholders - Series E (Convertible)

 

(971)

 

(926)

 

(2,897)

 

(2,784)

 

 

 

 

 

 

 

 

 

Net income/(loss) attributable to common stockholders

 

$
17,639

 

$
15,264

 

$
118,070

 

$
49,530

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$ 0.07

 

$ 0.06

 

$ 0.44

 

$ 0.19

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

 

$ 0.07

 

$ 0.06

 

$ 0.44

 

$ 0.18

 

 

 

 

 

 

 

 

 

Common distributions declared per share

 

$0.3225

 

$0.3100

 

$0.9675

 

$0.9300

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding - basic

 

267,727

 

267,056

 

267,529

 

266,940

Weighted average number of common shares outstanding - diluted

 

268,861

 

269,062

 

269,020

 

268,851

(1)

See Attachment 16 for definitions and other terms.

(2)

During the three and nine months ended September 30, 2017, UDR recorded gains on sale of approximately $2.4 million and $14.5 million, respectively. 

 

2


 

Picture 9

Attachment 2

 

UDR, Inc.

Funds From Operations

(Unaudited) (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

In thousands, except per share and unit amounts

 

2018

 

2017

 

2018

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss) attributable to common stockholders

 

$

17,639

 

$

15,264

 

$

118,070

 

$

49,530

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate depreciation and amortization

 

 

107,881

 

 

107,171

 

 

322,537

 

 

320,653

Noncontrolling interests

 

 

1,648

 

 

1,380

 

 

10,960

 

 

4,714

Real estate depreciation and amortization on unconsolidated joint ventures

 

 

15,979

 

 

14,710

 

 

45,831

 

 

42,974

Cumulative effect of change in accounting priniciple (2)

 

 

 -

 

 

 -

 

 

(2,100)

 

 

 -

Net gain on the sale of unconsolidated depreciable property

 

 

 -

 

 

(2,355)

 

 

 -

 

 

(14,513)

Net gain on the sale of depreciable real estate owned

 

 

 -

 

 

 -

 

 

(70,300)

 

 

(552)

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

 

$

143,147

 

$

136,170

 

$

424,998

 

$

402,806

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

971

 

 

926

 

 

2,897

 

 

2,784

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO attributable to common stockholders and unitholders, diluted

 

$

144,118

 

$

137,096

 

$

427,895

 

$

405,590

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO per weighted average common share and unit, basic 

 

$

0.49

 

$

0.47

 

$

1.46

 

$

1.38

FFO per weighted average common share and unit, diluted

 

$

0.49

 

$

0.46

 

$

1.44

 

$

1.37

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

292,285

 

 

291,878

 

 

292,075

 

 

291,822

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

 

 

 

 

 

 

 

 

 

 

 

 

   equivalents outstanding - diluted

 

 

296,430

 

 

296,900

 

 

296,577

 

 

296,757

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of adjustments to FFO:

 

 

 

 

 

 

 

 

 

 

 

 

  Cost/(benefit) associated with debt extinguishment and other

 

$

482

 

$

 -

 

$

482

 

$

5,834

Acquisition-related costs/(fees)

 

 

 -

 

 

344

 

 

 -

 

 

344

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

 

 

 -

 

 

 -

 

 

 -

 

 

(1,580)

  Legal and other costs

 

 

563

 

 

 -

 

 

1,188

 

 

 -

  Casualty-related charges/(recoveries), net

 

 

740

 

 

2,164

 

 

2,555

 

 

3,857

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

 

 

 -

 

 

 -

 

 

 -

 

 

(881)

 

 

$

1,785

 

$

2,508

 

$

4,225

 

$

7,574

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO as Adjusted attributable to common stockholders and unitholders, diluted

 

$

145,903

 

$

139,604

 

$

432,120

 

$

413,164

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO as Adjusted per weighted average common share and unit, diluted

 

$

0.49

 

$

0.47

 

$

1.46

 

$

1.39

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring capital expenditures

 

 

(14,949)

 

 

(12,649)

 

 

(34,399)

 

 

(30,122)

AFFO attributable to common stockholders and unitholders, diluted

 

$

130,954

 

$

126,955

 

$

397,721

 

$

383,042

 

 

 

 

 

 

 

 

 

 

 

 

 

AFFO per weighted average common share and unit, diluted

 

$

0.44

 

$

0.43

 

$

1.34

 

$

1.29


(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 nine months ended September 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)

 

 

 

 

 

 

 

 

September 30,

 

December 31,

In thousands, except share and per share amounts

 

2018

 

2017

 

 

 

 

 

ASSETS

 

 

 

 

Real estate owned:

 

 

 

 

Real estate held for investment

 

$
9,809,142

 

$
9,584,716

Less: accumulated depreciation

 

(3,544,781)

 

(3,326,312)

Real estate held for investment, net

 

6,264,361

 

6,258,404

Real estate under development

 

 

 

 

(net of accumulated depreciation of $3,674 and $3,854)

 

347,012

 

588,636

Real estate held for disposition

 

 

 

 

(net of accumulated depreciation of $77,872 and $0)

 

89,964

 

 -

Total real estate owned, net of accumulated depreciation

 

6,701,337

 

6,847,040

 

 

 

 

 

Cash and cash equivalents

 

1,084

 

2,038

Restricted cash

 

26,996

 

19,792

Notes receivable, net

 

41,009

 

19,469

Investment in and advances to unconsolidated joint ventures, net

 

767,376

 

720,830

Other assets

 

140,982

 

124,104

Total assets

 

$
7,678,784

 

$
7,733,273

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Liabilities:

 

 

 

 

Secured debt

 

$
798,241

 

$
803,269

Unsecured debt

 

3,012,939

 

2,868,394

Real estate taxes payable

 

38,581

 

18,349

Accrued interest payable

 

27,750

 

33,432

Security deposits and prepaid rent

 

31,821

 

31,916

Distributions payable

 

95,372

 

91,455

Accounts payable, accrued expenses, and other liabilities

 

73,812

 

102,956

Total liabilities

 

4,078,516

 

3,949,771

Redeemable noncontrolling interests in the OP and DownREIT Partnership

 

992,805

 

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

 

 

 

 

268,390,557 shares issued and outstanding (267,822,069 shares at December 31, 2017)

 

2,684

 

2,678

Additional paid-in capital

 

4,619,570

 

4,651,205

Distributions in excess of net income

 

(2,075,402)

 

(1,871,603)

Accumulated other comprehensive income/(loss), net

 

202

 

(2,681)

Total stockholders' equity

 

2,593,255

 

2,825,800

Noncontrolling interests

 

14,208

 

9,564

Total equity

 

2,607,463

 

2,835,364

Total liabilities and equity

 

$
7,678,784

 

$
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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

Common Stock and Equivalents

 

 

 

 

 

 

 

 

 

2018

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares

 

 

 

 

 

 

 

 

 

268,084,668

 

267,309,552

Restricted shares

 

 

 

 

 

 

 

 

 

305,889

 

512,517

Total common stock

 

 

 

 

 

 

 

 

 

268,390,557

 

267,822,069

Stock options, LTIP Units and restricted stock equivalents

 

 

 

 

 

 

 

 

 

265,409

 

1,589,662

Operating and DownREIT Partnership units

 

 

 

 

 

 

 

 

 

22,804,468

 

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

 

 

 

 

 

 

 

 

 

296,222,948

 

297,036,747

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Shares Outstanding

 

 

 

 

 

 

 

 

 

3Q 2018

 

3Q 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

292,284,954

 

291,878,372

Weighted average number of OP/DownREIT units outstanding

 

 

 

 

 

 

 

 

 

(24,557,672)

 

(24,822,635)

Weighted average number of common shares outstanding - basic per the Consolidated Statements of Operations

 

 

 

 

 

 

 

 

 

267,727,282

 

267,055,737

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares, OP/DownREIT units, and common stock equivalents outstanding - diluted

 

 

 

 

 

 

 

 

 

296,430,410

 

296,899,883

Weighted average number of OP/DownREIT units outstanding

 

 

 

 

 

 

 

 

 

(24,557,672)

 

(24,822,635)

Weighted average number of Series E preferred shares outstanding (3)