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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): April 30, 2019

 


 

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 April 30, 2019, UDR, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2019. 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 April 30,  2019.

 99.2

 

 Supplemental Financial Information dated April 30, 2019.

 

 


 

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.

 

 

 

 

 April 30, 2019

 

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 - PDF)

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Section 3: EX-99.1 (EX-99.1)

udr_Ex99_1

 

 

 

 

 

Image - Image1.jpeg

 

Exhibit 99.1

 

Press Release

 

 

 

 

DENVER, CO – April 30, 2019

 

 

Contact: Chris Van Ens

 

 

 

 

Phone:   720.348.7762

 

UDR ANNOUNCES FIRST QUARTER 2019 RESULTS

 

UDR, Inc. (the “Company”) First Quarter 2019 Highlights:

·

Net income per share was $0.08, Funds from Operations (“FFO”) per share was $0.51, FFO as Adjusted (“FFOA”) per share was $0.50, and Adjusted Funds from Operations (“AFFO”) per share was $0.47.

·

Net income attributable to common stockholders was $23.5 million as compared to $80.8 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 3.8 percent, 3.0 percent and 4.1 percent, respectively.

·

Acquired four apartment communities comprising 1,110 homes and two development sites for a total cash outlay, including debt payoffs, of $402.9 million.

·

Commenced a $25.0 million redevelopment of 10 Hanover Square, a 493-home community located in lower Manhattan, and a $10.5 million redevelopment of Garrison Square, a 160-home community located in the Back Bay neighborhood of Boston.

·

The UDR/MetLife Joint Venture commenced construction of Vitruvian West Phase 2, a $64.0 million (at 100 percent), 366‑home community located in Addison, TX.

·

Issued approximately 4.35 million common shares through the Company’s at-the-market equity program at a weighted average net price of $44.16 for proceeds of $192.2 million.

 

Subsequent to Quarter-End Highlights:

·

Acquired Rodgers Forge, a 498-home community located in Towson, MD, for $86.4 million.

·

Entered into a contract to acquire Park Square, a 313-home community located in King of Prussia, PA, for $108.5 million.

·

Invested in a Developer Capital Program (“DCP”) project located in Oakland, CA with a total capital commitment of $27.3 million.

 

 

 

 

 

Q1 2019

Q1 2018

Net income per common share, diluted

$0.08

$0.30

Conversion from GAAP share count

(0.008)

(0.028)

Net gain on the sale of depreciable real estate owned, including JVs

-

(0.237)

Cumulative effect of change in accounting principle

-

(0.007)

Depreciation and amortization, including JVs

0.420

0.413

Noncontrolling interests and preferred dividends

0.010

0.028

FFO per common share and unit, diluted

$0.51

$0.47

Promoted interest on settlement of note receivable, net of tax

(0.021)

-

Legal and other costs

0.011

-

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

0.001

0.003

FFOA per common share and unit, diluted

$0.50

$0.47

Recurring capital expenditures

(0.024)

(0.022)

AFFO per common share and unit, diluted

$0.47

$0.45

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 first quarter Supplemental Financial Information.

 

1


 

Operations

In the first quarter, total revenue increased by $17.4 million year-over-year, or 6.9 percent, to $270.7 million. This increase was primarily attributable to growth in revenue from operating, lease-up and acquisition communities.

In the first quarter, same-store NOI increased 4.1 percent year-over-year, driven by same-store revenue growth of 3.8 percent and same-store expense growth of 3.0 percent. Weighted average same-store physical occupancy decreased by 10 basis points year-over-year to 96.8 percent. The first quarter annualized rate of turnover was 39.2 percent, representing a 110 basis point decrease year-over-year.

Summary of Same-Store Results First Quarter 2019 versus First Quarter 2018

 

 

 

 

 

 

 

 

 

Region

Revenue Growth

Expense

Growth/

(Decline)

NOI Growth

% of Same‑Store

NOI(1)

Same-Store

Occupancy(2)

Number of Same-Store Homes(3)

West

 4.3%

   3.5%

 4.6%

 46.2%

 96.4%

 13,942

Mid-Atlantic

 3.4%

   1.2%

 4.5%

 23.1%

 97.6%

 9,877

Southeast

 4.3%

   3.6%

 4.6%

 13.0%

 96.7%

 7,683

Northeast

 2.2%

      6.8%

 0.1%

 12.4%

 97.1%

 2,840

Southwest

 3.4%

      (0.3)%

 6.1%

 5.3%

 96.5%

 3,617

Total

 3.8%

 3.0%

 4.1%

 100.0%

 96.8%

 37,959

(1)Based on Q1 2019 SS NOI.

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

(3)During the first quarter, 37,959 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 first quarter, sequential same-store NOI increased by 1.0 percent, driven by same-store revenue growth of 1.1 percent and same-store expense growth of 1.3 percent. Weighted average same-store physical occupancy was flat sequentially at 96.8 percent.

 

Development and Redevelopment Activity

At the end of the first quarter, the Company’s development pipeline totaled $747.9 million at its pro-rata ownership interest and was 96 percent funded. 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.

The Company commenced one new development project during the first quarter, Vitruvian West Phase 2, a 366‑home community located in Addison, TX. The community is being developed in a 50%/50% joint venture with MetLife for a total budgeted cost of $64.0 million (at 100 percent) and is expected to be completed in early 2021.

The Company commenced the redevelopments of 10 Hanover Square, a 493-home community located in lower Manhattan, and Garrison Square, a 160-home community located in the Back Bay neighborhood of Boston. Total spend on the two projects is budgeted at $35.5 million with expected completions in late 2020/early 2021.

 

DCP Activity

 

At the end of the first quarter, the Company’s DCP investment, including accrued return, totaled $213.1 million.

As previously announced, the Company exercised its fixed price options and acquired the approximately 51 percent interests it did not own in Parallel, a 386-home community completed in 2018 and located in the Platinum Triangle submarket of Anaheim, CA, and CityLine II, a 155-home community completed in 2018 and located in suburban Seattle, WA, from its West Coast Development Joint Venture. The cash outlay for the acquisitions totaled $131.7 million and the Company’s blended all-in investment in the two communities was $183.9 million. At the time of acquisition, average revenue per occupied home was $2,045 at Parallel and $2,083 at CityLine II.

 

2


 

 

 

Subsequent to quarter end, the Company committed to providing $27.3 million of capital to the 173-home Modera Lake Merritt multifamily development located in Oakland, CA. The investment yields 9.0% on the Company’s capital outstanding with profit participation upon sale of the community.

 

Wholly-Owned Transactional Activity

 

As previously announced, the Company acquired:

 

·

Leonard Pointe, a 188-home community located in Brooklyn, NY, for $132.1 million or $702,700 per home. At the time of the acquisition, the community had average monthly revenue per occupied home of $3,515, occupancy of 99 percent and was four years old.

·

Peridot Palms, a 381-home community located in St. Petersburg, FL, for $98.3 million or $258,000 per home. At the time of the acquisition, the community had average monthly revenue per occupied home of $1,785, occupancy of 94 percent and was two years old. 

·

500 Penn Street NE, a development site located in the Union Market district of Washington, D.C., for $27.1 million.

·

1590 Grove Street, a development site located in the Sloan’s Lake submarket of Denver, CO, for $13.7 million. 

 

Subsequent to quarter end, the Company:

 

·

Acquired Rodgers Forge, a 498-home community located in Towson, MD, for $86.4 million or $173,500 per home. At the time of the acquisition, the community had average monthly revenue per occupied home of $1,263, occupancy of 91 percent and underwent a significant renovation in 2010.

·

Entered into a contract to acquire Park Square, a 313-home community located in King of Prussia, PA, for $108.5 million or $346,600 per home. The community had average monthly revenue per occupied home of $1,897 and was one year old when the contract was executed. Park Square is expected to close during the second quarter, subject to customary closing conditions.

 

Capital Markets and Balance Sheet Activity

 

During the first quarter:

·

The Company issued approximately 4.35 million common shares through its at-the-market equity program at a weighted average net price of $44.16 for proceeds of $192.2 million. Proceeds will be used for the acquisitions outlined in this press release and general corporate purposes.

·

The UDR/MetLife Joint Venture refinanced a $71.8 million loan at 4.40 percent with a $58.6 million secured loan at 3.77 percent. 

 

At March 31, 2019, the Company had approximately $1.0 billion of liquidity through a combination of cash and undrawn capacity on its credit facilities.

The Company’s total indebtedness at March 31, 2019 was $3.6 billion. The Company ended the quarter with fixed‑rate debt representing 92.4 percent of its total debt, a total blended interest rate of 3.7 percent and a weighted average maturity of 5.5 years. The Company’s consolidated leverage was 30.6 percent versus 33.1 percent a year ago, its consolidated net‑debt-to-EBITDAre was 5.3x versus 5.8x a year ago and its consolidated fixed charge coverage ratio was 4.8x 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 first quarter of 2019 in the amount of $0.3425 per share. The dividend was paid in cash on April 30, 2019 to UDR common stockholders of record as of April 9, 2019. The first quarter 2019 dividend represented the 186th consecutive quarterly dividend paid by the Company on its common stock.

3


 

Outlook

 

For the second quarter of 2019, the Company has established the following earnings guidance ranges:

 

 

 

 

 

 

 

Net income per share

    

$0.08 to $0.10

 

 

    

 

 

 

 

 

 

 

 

FFO per share

 

$0.50 to $0.52

 

 

 

 

 

 

 

 

 

 

 

FFOA per share

 

$0.50 to $0.52

 

 

 

 

 

 

 

 

 

 

 

AFFO per share

 

$0.45 to $0.47

 

 

 

 

 

 

For the full-year 2019, the Company revised its net income per share guidance. No changes were made to the other previously provided earnings guidance ranges:

 

 

 

 

 

 

 

 

Net income per share

    

$0.36 to $0.40

 

 

    

 

 

 

 

 

 

 

 

FFO per share

 

$2.05 to $2.09

 

 

 

 

 

 

 

 

 

 

 

FFOA per share

 

$2.03 to $2.07

 

 

 

 

 

 

 

 

 

 

 

AFFO per share

 

$1.87 to $1.91

 

 

 

 

 

 

For the full-year 2019, no changes were made to the Company’s previously provided same-store growth and occupancy guidance ranges:

 

 

 

 

 

 

 

 

Revenue growth

    

3.00% to 4.00%

 

 

    

 

 

 

 

 

 

 

 

Expense growth

 

2.75% to 3.75%

 

 

 

 

 

 

 

 

 

 

 

Net operating income growth

 

3.25% to 4.25%

 

 

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

96.8% to 97.0%

 

 

 

 

 

Additional assumptions for the Company’s second quarter and full-year 2019 guidance can be found on Attachment 15 of the Company’s first quarter Supplemental Financial Information. A reconciliation of FFO per share, FFOA per share and AFFO per share to GAAP Net income per share can be found on Attachment 16(D) of the Company’s first 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 first 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 May 1, 2019 to discuss first 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 June 1, 2019, by dialing 844-512-2921 for domestic and 412-317-6671 for international and entering the confirmation number, 13689377, 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

 

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

 

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 March 31, 2019, UDR owned or had an ownership position in 49,795 apartment homes including 366 homes under development. 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


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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 First Quarter 2019

(Unaudited) (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual Results

 

 

 

Guidance as of March 31, 2019

Dollars in thousands, except per share and unit

 

 

 

1Q 2019

 

 

 

2Q 2019

 

Full-Year 2019

 

 

 

 

 

 

 

 

 

 

 

GAAP Metrics

 

 

 

 

 

 

 

 

 

 

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

 

 

 

$24,503

 

 

 

--

 

--

Net income/(loss) attributable to common stockholders

 

 

 

$23,492

 

 

 

--

 

--

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

 

 

 

$0.08

 

 

 

$0.08 to $0.10

 

$0.36 to $0.40

 

 

 

 

 

 

 

 

 

 

 

Per Share Metrics

 

 

 

 

 

 

 

 

 

 

FFO per common share and unit, diluted

 

 

 

$0.51

 

 

 

$0.50 to $0.52

 

$2.05 to $2.09

FFO as Adjusted per common share and unit, diluted

 

 

 

$0.50

 

 

 

$0.50 to $0.52

 

$2.03 to $2.07

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

 

 

 

$0.47

 

 

 

$0.45 to $0.47

 

$1.87 to $1.91

Dividend declared per share and unit

 

 

 

$0.3425

 

 

 

$0.3425

 

$1.37 (2)

 

 

 

 

 

 

 

 

 

 

 

Same-Store Operating Metrics

 

 

 

 

 

 

 

 

 

 

Revenue growth

 

 

 

3.8%

 

 

 

--

 

3.00% - 4.00%

Expense growth

 

 

 

3.0%

 

 

 

--

 

2.75% - 3.75%

NOI growth

 

 

 

4.1%

 

 

 

--

 

3.25% - 4.25%

Physical Occupancy

 

 

 

96.8%

 

 

 

--

 

96.8% - 97.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Metrics

 

 

 

Homes

 

Communities

 

% of Total NOI

 

 

Same-Store

 

 

 

37,959

 

122

 

79.5%

 

 

Stabilized, Non-Mature

 

 

 

218

 

1

 

0.6%

 

 

Acquired Communities

 

 

 

1,110

 

4

 

1.6%

 

 

Redevelopment

 

 

 

653

 

2

 

2.5%

 

 

Development, completed

 

 

 

1,101

 

2

 

3.8%

 

 

Non-Residential / Other

 

 

 

N/A

 

N/A

 

1.0%

 

 

Joint Venture (includes completed JV developments) (3)

 

 

 

8,112

 

32

 

10.8%

 

 

Developer Capital Program - West Coast Development JV

 

 

 

276

 

1

 

0.2%

 

 

Sub-total, completed homes

 

 

 

49,429

 

164

 

100%

 

 

Sold and Held for Disposition

 

 

 

-

 

-

 

-

 

 

Under Development

 

 

 

-

 

-

 

-

 

 

Joint Venture Development

 

 

 

366

 

1

 

-

 

 

Total expected homes (3)(4)

 

 

 

49,795

 

165

 

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Metrics (adjusted for non-recurring items)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1Q 2019

 

1Q 2018

 

 

 

 

Consolidated Interest Coverage Ratio

 

 

 

4.9x

 

4.6x

 

 

 

 

Consolidated Fixed Charge Coverage Ratio

 

 

 

4.8x

 

4.5x

 

 

 

 

Consolidated Debt as a percentage of Total Assets

 

 

 

30.6%

 

33.1%

 

 

 

 

Consolidated Net Debt-to-EBITDAre

 

 

 

5.3x

 

5.8x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C:\Users\bmaas\Desktop\EX 992 - Financial Highlights pic.JPG


(1)

See Attachment 16 for definitions and other terms.

(2)

Annualized for 2019.

(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

 

 

March 31,

In thousands, except per share amounts

 

2019

 

2018

 

 

 

 

 

REVENUES:

 

 

 

 

Rental income

 

$
267,922

 

$
250,483

Joint venture management and other fees

 

2,751

 

2,822

Total revenues

 

270,673

 

253,305

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

Property operating and maintenance

 

41,939

 

40,587

Real estate taxes and insurance

 

36,300

 

33,282

Property management

 

7,703

 

6,888

Other operating expenses

 

5,646

 

2,009

Real estate depreciation and amortization

 

112,468

 

108,136

General and administrative

 

12,467

 

11,759

Casualty-related charges/(recoveries), net

 

 -

 

940

Other depreciation and amortization

 

1,656

 

1,691

Total operating expenses

 

218,179

 

205,292

 

 

 

 

 

Gain/(loss) on sale of real estate owned

 

 -

 

70,300

Operating income

 

52,494

 

118,313

 

 

 

 

 

Income/(loss) from unconsolidated entities

 

49

 

(1,677)

Interest expense

 

(33,542)

 

(29,943)

Interest income and other income/(expense), net (2)

 

9,813

 

2,759

 

 

 

 

 

Income/(loss) before income taxes

 

28,814

 

89,452

Tax (provision)/benefit, net (2)

 

(2,212)

 

(227)

 

 

 

 

 

Net Income/(loss)

 

26,602

 

89,225

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

 

(2,057)

 

(7,390)

Net (income)/loss attributable to noncontrolling interests

 

(42)

 

(79)

 

 

 

 

 

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

 

24,503

 

81,756

Distributions to preferred stockholders - Series E (Convertible)

 

(1,011)

 

(955)

 

 

 

 

 

Net income/(loss) attributable to common stockholders

 

$
23,492

 

$
80,801

 

 

 

 

 

 

 

 

 

 

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

 

$ 0.08

 

$ 0.30

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

 

$ 0.08

 

$ 0.30

 

 

 

 

 

Common distributions declared per share

 

$0.3425

 

$0.3225

 

 

 

 

 

Weighted average number of common shares outstanding - basic

 

277,002

 

267,546

Weighted average number of common shares outstanding - diluted

 

277,557

 

269,208

(1)

See Attachment 16 for definitions and other terms.

(2)

During 1Q19, UDR earned a promoted interest of $8.5 million on the payment of a promissory note receivable from a multifamily technology company.  The estimated tax provision on the payment was approximately $2.0 million.

 

 

2


 

Picture 9

Attachment 2

 

UDR, Inc.

Funds From Operations

(Unaudited) (1)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31,

In thousands, except per share and unit amounts

 

 

2019

 

2018

 

 

 

 

 

 

 

Net income/(loss) attributable to common stockholders

 

$

23,492

 

$

80,801

 

 

 

 

 

 

 

Real estate depreciation and amortization

 

 

112,468

 

 

108,136

Noncontrolling interests

 

 

2,099

 

 

7,469

Real estate depreciation and amortization on unconsolidated joint ventures

 

 

15,674

 

 

14,340

Cumulative effect of change in accounting principle

 

 

 -

 

 

(2,100)

Net gain on the sale of depreciable real estate owned

 

 

 -

 

 

(70,300)

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

 

$

153,733

 

$

138,346

 

 

 

 

 

 

 

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

 

 

1,011

 

 

955

 

 

 

 

 

 

 

FFO attributable to common stockholders and unitholders, diluted

 

$

154,744

 

$

139,301

 

 

 

 

 

 

 

FFO per weighted average common share and unit, basic 

 

$

0.51

 

$

0.47

FFO per weighted average common share and unit, diluted

 

$

0.51

 

$

0.47

 

 

 

 

 

 

 

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

 

 

301,282

 

 

292,052

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

 

 

 

 

 

 

   equivalents outstanding - diluted

 

 

304,848

 

 

296,725

 

 

 

 

 

 

 

Impact of adjustments to FFO:

 

 

 

 

 

 

Promoted interest on settlement of note receivable, net of tax (3)

 

$

(6,482)

 

$

-

Legal and other costs (4)

 

 

3,431

 

 

 -

  Casualty-related charges/(recoveries), net

 

 

15

 

 

1,009

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

 

 

146

 

 

 -

 

 

$

(2,890)

 

$

1,009

 

 

 

 

 

 

 

FFO as Adjusted attributable to common stockholders and unitholders, diluted

 

$

151,854

 

$

140,310

 

 

 

 

 

 

 

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

 

$

0.50

 

$

0.47

 

 

 

 

 

 

 

Recurring capital expenditures

 

 

(7,218)

 

 

(6,669)

AFFO attributable to common stockholders and unitholders, diluted

 

$

144,636

 

$

133,641

 

 

 

 

 

 

 

AFFO per weighted average common share and unit, diluted

 

$

0.47

 

$

0.45


(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)

See footnote 2 on Attachment 1.

(4)

During 1Q19, UDR adopted ASU No. 2016-02, Leases (codified as ASC 842), which changed how UDR recognizes costs incurred to obtain resident and retail leases.  Prior to adoption, UDR deferred and amortized over the lease term certain direct leasing costs.  Under the updated standard, only those direct costs that are incremental to the arrangement may be deferred and any direct costs to negotiate or arrange a lease that would have been incurred regardless of whether the lease was obtained (“non-incremental costs”) shall be expensed as incurred.  The standard also provided a practical expedient whereby an entity need not reassess direct costs for any pre-existing leases upon adoption.  As such, the adoption of the standard resulted in UDR expensing any new non-incremental costs as incurred and continuing to amortize the pre-existing non-incremental costs deferred upon adoption over the remaining lease terms.  The impact in 1Q19 for the amortization expense related to the pre-existing non-incremental costs was $1.1 million, which is backed out for FFO as Adjusted in Legal and other costs.

3


 

Picture 9

 

Attachment 3

 

UDR, Inc.

Consolidated Balance Sheets

(Unaudited) (1)

 

 

 

 

 

 

 

 

March 31

 

December 31,

In thousands, except share and per share amounts

 

2019

 

2018

 

 

 

 

 

ASSETS

 

 

 

 

Real estate owned:

 

 

 

 

Real estate held for investment

 

$
10,680,555

 

$
10,196,159

Less: accumulated depreciation

 

(3,764,099)

 

(3,654,160)

Total real estate owned, net of accumulated depreciation

 

6,916,456

 

6,541,999

 

 

 

 

 

Cash and cash equivalents

 

1,043

 

185,216

Restricted cash

 

23,111

 

23,675

Notes receivable, net

 

36,974

 

42,259

Investment in and advances to unconsolidated joint ventures, net

 

749,100

 

780,869

Operating lease right-of-use assets (2)

 

94,145

 

 -

Other assets

 

134,896

 

137,710

Total assets

 

$
7,955,725

 

$
7,711,728

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Liabilities:

 

 

 

 

Secured debt

 

$
599,796

 

$
601,227

Unsecured debt

 

2,990,033

 

2,946,560

Operating lease liabilities (2)

 

88,218

 

 -

Real estate taxes payable

 

27,205

 

20,608

Accrued interest payable

 

29,397

 

38,747

Security deposits and prepaid rent

 

36,332

 

35,060

Distributions payable

 

105,548

 

97,666

Accounts payable, accrued expenses, and other liabilities

 

65,334

 

76,343

Total liabilities

 

3,941,863

 

3,816,211

 

 

 

 

 

Redeemable noncontrolling interests in the OP and DownREIT Partnership

 

1,051,498

 

972,740

 

 

 

 

 

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, 2018)

 

46,200

 

46,200

15,797,155 shares of Series F outstanding (15,802,393 shares

 

 

 

 

at December 31, 2018)

 

 1

 

 1

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

 

 

 

 

281,791,932 shares issued and outstanding (275,545,900 shares at December 31, 2018)

 

2,818

 

2,755

Additional paid-in capital

 

5,184,195

 

4,920,732

Distributions in excess of net income

 

(2,281,262)

 

(2,063,996)

Accumulated other comprehensive income/(loss), net

 

(2,970)

 

(67)

Total stockholders' equity

 

2,948,982

 

2,905,625

Noncontrolling interests

 

13,382

 

17,152

Total equity

 

2,962,364

 

2,922,777

Total liabilities and equity

 

$
7,955,725

 

$
7,711,728

(1)

See Attachment 16 for definitions and other terms.

(2)

During 1Q19, UDR adopted ASU No. 2016-02, Leases (codified as ASC 842).  The updated standard requires lessees to recognize a lease liability and a right-of-use asset for all leases on their balance sheets (with certain exceptions provided by the standard).  The standard also provides a transition option that permits entities to not recast the comparative periods presented when transitioning to the standard.  The adoption of the standard resulted in UDR recording operating lease right-of-use assets of $94.1 million and operating lease liabilities of $88.2 million on the March 31, 2019 Consolidated Balance Sheet. Given that UDR elected the transition option, there are no comparable balances as of December 31, 2018.

 

4


 

Picture 9

Attachment 4(A)

 

UDR, Inc.

Selected Financial Information

(Unaudited) (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

Common Stock and Equivalents

 

 

 

 

 

 

 

 

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares

 

 

 

 

 

 

 

 

 

281,536,575

 

275,239,072

Restricted shares

 

 

 

 

 

 

 

 

 

255,357

 

306,828

Total common stock

 

 

 

 

 

 

 

 

 

281,791,932

 

275,545,900

Restricted unit and stock equivalents

 

 

 

 

 

 

 

 

 

297,832

 

385,088

Operating and DownREIT Partnership units

 

 

 

 

 

 

 

 

 

21,378,510

 

22,800,064

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

 

 

 

 

 

 

 

 

 

308,230,788

 

303,493,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Number of Shares Outstanding

 

 

 

 

 

 

 

 

 

1Q 2019

 

1Q 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

301,282,354

 

292,052,216

Weighted average number of OP/DownREIT units outstanding

 

 

 

 

 

 

 

 

 

(24,280,619)

 

(24,506,519)

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

 

 

 

 

 

 

 

 

 

277,001,735

 

267,545,697

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

304,848,093

 

296,725,209

Weighted average number of OP/DownREIT units outstanding

 

 

 

 

 

 

 

 

 

(24,280,619)

 

(24,506,519)

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

 

 

 

 

 

 

 

 

 

(3,010,843)

 

(3,010,843)

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

 

 

 

 

 

 

 

 

 

277,556,631

 

269,207,847

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


(1)

See Attachment 16 for definitions and other terms.

(2)

At March 31, 2019 and December 31, 2018 there were 2,780,994 shares of the Series E outstanding, which is equivalent to 3,010,843 shares of common stock if converted (after adjusting for the special dividend paid in 2008).

(3)

Series E preferred shares are anti-dilutive for purposes of calculating Income/(loss) per weighted average common share for the three months ended March 31, 2019 and March 31, 2018.

 

5


 

Picture 9

Attachment 4(B)

 

UDR, Inc.

Selected Financial Information

(Unaudited) (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

Average

 

Average Years

Debt Structure, In thousands

 

 

 

 

 

 

Balance

 

% of Total

 

Interest Rate

 

to Maturity (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Secured

 

Fixed

 

 

 

 

$
502,055

 

13.9%

 

3.85%

 

4.8

 

 

Floating

 

 

 

 

94,700

 

2.6%

 

2.31%

 

3.9

 

 

Combined

 

 

 

 

596,755

 

16.5%

 

3.60%

 

4.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unsecured

 

Fixed

 

 

 

 

2,830,644

(3)

78.5%

 

3.69%

 

6.0

 

 

Floating

 

 

 

 

179,310

 

5.0%

 

3.06%

 

1.4

 

 

Combined

 

 

 

 

3,009,954

 

83.5%

 

3.65%

 

5.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt

 

Fixed

 

 

 

 

3,332,699

 

92.4%

 

3.71%

 

5.8

 

 

Floating

 

 

 

 

274,010

 

7.6%

 

2.80%

 

2.3

 

 

Combined

 

 

 

 

$
3,606,709

 

100.0%

 

3.64%

 

5.5

 

 

Total Non-Cash Adjustments (4)

 

 

 

 

(16,880)

 

 

 

 

 

 

 

 

Total per Balance Sheet

 

 

 

 

$
3,589,829

 

 

 

3.73%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt Maturities, In thousands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revolving Credit

 

 

 

 

 

 

 

 

 

 

Unsecured

 

Facilities & Comm.

 

 

 

 

 

Weighted Average

 

 

Secured Debt (5)

 

Debt (5)

 

Paper (2) (6) (7)

 

Balance

 

% of Total

 

Interest Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

$
70,560

 

$

 -

 

$
90,000

 

$
160,560

 

4.5%

 

2.58%

2020

 

198,076

 

 

300,000

 

 -

 

498,076

 

13.8%

 

3.87%

2021

 

1,117

 

 

 -

 

54,310

 

55,427

 

1.5%

 

3.32%

2022

 

1,157

 

 

400,000

 

 -

 

401,157

 

11.1%