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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): July 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))

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01

UDR

New York Stock Exchange

 

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

 99.2

 

 Supplemental Financial Information dated July 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.

 

 

 

 

 July 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)

udr_Ex99_1

 

 

 

 

 

Image - Image1.jpeg

 

Exhibit 99.1

 

Press Release

 

 

 

 

DENVER, CO – July 30, 2019

 

 

Contact: Chris Van Ens

 

 

 

 

Phone:   720.348.7762

 

UDR ANNOUNCES SECOND QUARTER 2019 RESULTS AND INCREASES FULL-YEAR GUIDANCE RANGES

 

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

·

Net income per share was $0.12, Funds from Operations (“FFO”) per share was $0.54, FFO as Adjusted (“FFOA”) per share was $0.52, and Adjusted Funds from Operations (“AFFO”) per share was $0.48.

·

Net income attributable to common stockholders was $34.6 million as compared to $19.6 million in the prior year period. The increase was primarily due to higher gains on the sale of real estate and net operating income (“NOI”) growth.

·

Year-over-year same-store (“SS”) revenue, expense and NOI growth was 3.7 percent, 2.3 percent and 4.2 percent, respectively.

·

The Company’s operating margin (property net operating income divided by property rental income) was 71.7 percent as compared to 71.4 percent in the prior year period.

·

The Company continued to implement its Next Generation Operating Platform which drove SS controllable operating margin expansion of approximately 50 basis points year-over-year to 84.7 percent and restrained SS controllable expense growth to 40 basis points year-over-year.

·

Acquired four apartment communities comprising 1,251 homes in Towson, MD, King of Prussia, PA, St. Petersburg, FL and Waltham, MA for $327.7 million. Subsequent to quarter-end, the Company entered into a contract to acquire a 185-home community in Englewood, NJ, for $83.6 million subject to customary closing conditions.

·

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

·

The UDR/KFH JV sold one community in Washington, D.C. for $74.8 million. Subsequent to quarter-end, a second community was sold for $43.5 million. The Company is under contract to purchase the 70 percent it did not previously own of the third community, 1301 Thomas Circle, a 292-home property in Washington, D.C. at a valuation of $184.0 million subject to customary closing conditions. Upon closing, the JV will terminate.  

·

Issued approximately 460.5 thousand common shares through the Company’s at-the-market equity program at a weighted average net price of $44.94 for proceeds of $20.7 million. Subsequent to quarter-end, the Company issued approximately 2.2 million shares at a weighted average net price of $45.70 for proceeds of $99.4 million. These proceeds will be used to accretively fund acquisition activity.

·

Subsequent to quarter-end, the Company settled its late-June issuance of $300.0 million, 10-year unsecured debt at an effective rate of 3.46 percent after accounting for previous hedging activities.

·

Increased full-year 2019 earnings and same-store growth guidance:

o

Increased net income per share guidance by $0.015 at the midpoint to $0.38 to $0.41.

o

Increased FFO per share guidance by $0.035 at the midpoint to $2.09 to $2.12.

o

Increased FFOA and AFFO per share guidance by $0.015 at the midpoints, to $2.05 to $2.08 and $1.89 to $1.92, respectively.

o

Increased SS revenue guidance by 20 basis points at the midpoint to 3.40 to 4.00 percent.

o

Decreased SS expense guidance by 50 basis points at the midpoint to 2.50 to 3.00 percent.

o

Increased SS NOI guidance by 37.5 basis points at the midpoint to 3.75 to 4.50 percent.

1

 

 

 

 

 

 

Q2 2019

Q2 2018

YTD 2019

YTD 2018

Net income per common share, diluted

$0.12

$0.07

$0.21

$0.37

Conversion from GAAP share count

(0.010)

(0.007)

(0.018)

(0.035)

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

(0.017)

-

(0.017)

(0.237)

Cumulative effect of change in accounting principle

-

-

-

(0.007)

Depreciation and amortization, including JVs

0.432

0.412

0.852

0.824

Noncontrolling interests and preferred dividends

0.012

0.009

0.022

0.038

FFO per common share and unit, diluted

$0.54

$0.49

$1.05

$0.96

Promoted interest on settlement of note receivable, net of tax

-

-

(0.021)

-

Legal and other costs

-

0.002

0.011

0.002

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

(0.017)

-

(0.017)

-

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

0.001

0.003

0.002

0.006

FFOA per common share and unit, diluted

$0.52

$0.49

$1.02

$0.97

Recurring capital expenditures

(0.041)

(0.043)

(0.065)

(0.066)

AFFO per common share and unit, diluted

$0.48

$0.45

$0.96

$0.90

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.

 

Operations

In the second quarter, total revenue increased by $21.6 million year-over-year, or 8.3 percent, to $281.3 million. This increase was primarily attributable to growth in revenue from operating and acquisition communities.

In the second quarter, same-store NOI increased 4.2 percent year-over-year, driven by same-store revenue growth of 3.7 percent and same-store expense growth of 2.3 percent. Weighted average same-store physical occupancy remained at 96.9 percent versus the same prior year period. The second quarter annualized rate of turnover was 54.8 percent, representing a 100 basis point increase year-over-year and partially driven by the Company’s Short-Term Furnished Rental Program.

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

 

 

 

 

 

 

 

 

 

Region

Revenue Growth

Expense

Growth

NOI Growth

% of Same‑Store

NOI(1)

Same-Store

Occupancy(2)

Number of Same-Store Homes(3)

West

 4.5%

   2.5%

 5.2%

 46.2%

 96.6%

 13,942

Mid-Atlantic

 2.9%

   1.6%

 3.4%

 23.0%

 97.4%

 9,877

Southeast

 4.0%

   2.4%

 4.7%

 12.6%

 96.9%

 7,683

Northeast

 2.5%

      4.3%

 1.7%

 12.3%

 97.0%

 2,840

Southwest

 2.5%

      0.6%

 3.8%

 5.9%

 97.0%

 3,835

Total

 3.7%

 2.3%

 4.2%

 100.0%

 96.9%

 38,177

(1)Based on Q2 2019 SS NOI.

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

(3)During the second quarter, 38,177 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 2.4 percent, driven by same-store revenue growth of 1.3 percent and a same-store expense decline of 1.2 percent. Weighted average same-store physical occupancy increased by 10 basis points sequentially to 96.9 percent.

Year-to-date, for the six months ended June 30, 2019, total revenue increased by $38.9 million year-over-year, or 7.6 percent, to $552.0 million. This increase was primarily attributable to growth in revenue from operating and acquisition communities.

Year-to-date, for the six months ended June 30, 2019, same-store NOI increased 4.1 percent year-over-year, driven by same-store revenue growth of 3.7 percent and same-store expense growth of 2.7 percent. Weighted average same-store physical occupancy remained at 96.9 percent versus the same prior year period. The year-to-date annualized rate of turnover was 47.0 percent, representing a 10 basis point decrease year-over-year.

2

Summary of Same-Store Results Year-To-Date 2019 versus Year-To-Date 2018

 

 

 

 

 

 

 

Region

Revenue Growth

Expense

Growth

NOI Growth

% of

Same-Store

NOI(1)

Same-Store

Occupancy(2)

Number of Same-Store Homes(3)

West

4.4%
3.0%
4.9%
46.4%
96.5%
13,942

Mid-Atlantic

3.1%
1.4%
3.9%
23.1%
97.5%
9,877

Southeast

4.1%
3.0%
4.6%
12.9%
96.8%
7,683

Northeast

2.3%
5.6%
0.9%
12.4%
97.0%
2,840

Southwest

3.1%
0.6%
4.9%
5.2%
96.9%
3,617

Total

3.7%
2.7%
4.1%
100.0%
96.9%
37,959

(1)Based on YTD 2019 NOI.

(2)Weighted average same-store physical occupancy for YTD 2019.

(3)For the six months ended June 30, 2019, 37,959 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.

 

Development Activity

At the end of the second quarter, the Company’s development pipeline totaled $32.0 million at its pro-rata ownership interest and was 26 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.

DCP Activity

At the end of the second quarter, the Company’s DCP investments, including accrued return, totaled $243.5 million.

During the quarter, 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  a profit participation upon sale of the community.

Wholly-Owned Transactional Activity

During the quarter, 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, was 74 years old and underwent a major renovation in 2010.

·

Park Square, a 313-home community located in King of Prussia, PA, for $107.3 million or $342,800 per home. At the time of the acquisition, the community had average monthly revenue per occupied home of $1,897, occupancy of 67 percent and was one year old.

·

The Preserve at Gateway, a 240-home community located in St. Petersburg, FL, for $49.4 million or $205,800 per home. At the time of the acquisition, the community had average monthly revenue per occupied home of $1,434, occupancy of 95 percent and was six years old.

·

Currents on the Charles, a 200-home community located in Waltham, MA, for $84.6 million or $423,000 per home. At the time of the acquisition, the community had average monthly revenue per occupied home of $2,574, occupancy of 97 percent and was four years old.

Subsequent to quarter-end, the Company entered into a contract to acquire One William, a 185-home community located in Englewood, NJ, for $83.6 million or $451,900 per home. The community had average monthly revenue per occupied home of $2,701, occupancy of 99 percent and was one year old when the contract was executed. One William is expected to close during the third quarter, subject to customary closing conditions.

 

 

 

3

Joint Venture Transactional Activity

During the quarter, the UDR/KFH joint venture sold one community in Washington, D.C. for $74.8 million. Subsequent to quarter-end, a second community in Washington, D.C. was sold for $43.5 million. The Company is under contract to purchase the 70 percent it does not own of the third community in the joint venture, 1301 Thomas Circle, a 292-home property in Washington, D.C. at a valuation of $184.0 million or $630,100 per home. The community had average monthly revenue per occupied home of $3,395, occupancy of 98 percent and was 13 years old when the contract was executed. Thomas Circle is expected to close in 2019, subject to customary closing conditions. Once complete, the UDR/KFH joint venture will terminate.

Capital Markets and Balance Sheet Activity

During the second quarter, the Company issued approximately 460.5 thousand common shares through its at-the-market equity program at a weighted average net price of $44.94 for proceeds of $20.7 million. Uses of proceeds include the acquisitions outlined in this press release and general corporate purposes.

Subsequent to quarter-end, the Company:

·

Issued approximately 2.2 million common shares through its at-the-market equity program at a weighted average net price of $45.70 for proceeds of $99.4 million. Uses of proceeds include the acquisitions outlined in this press release and general corporate purposes.

·

Settled its late-June issuance of $300.0 million, 10-year unsecured debt at an effective rate of 3.46 percent after accounting for previous hedging activities. Uses of proceeds include the repayment of debt, including amounts outstanding under the Company’s commercial paper program, unsecured revolving credit facility and working capital credit facility, or for other general corporate purposes.

At June 30, 2019, the Company had approximately $750.6 million of liquidity through a combination of cash and undrawn capacity on its credit facilities and prior to accounting for the $300.0 million unsecured debt issuance outlined previously in this press release.

The Company’s total indebtedness at June 30, 2019 was $3.87 billion. The Company ended the quarter with fixed‑rate debt representing 85.7 percent of its total debt, a total blended interest rate of 3.64 percent and a weighted average maturity of 4.9 years. The Company’s consolidated leverage was 32.1 percent versus 33.4 percent a year ago, its consolidated net‑debt-to-EBITDAre was 5.4x versus 5.7x a year ago and its consolidated fixed charge coverage ratio was 4.9x versus 4.6x 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 2019 in the amount of $0.3425 per share. The dividend will be paid in cash on July 31, 2019 to UDR common stockholders of record as of July 10, 2019. The second quarter 2019 dividend will represent the 187th consecutive quarterly dividend paid by the Company on its common stock.

4

Outlook

 

For the third quarter of 2019, the Company has established the following earnings guidance ranges.

 

 

 

 

 

 

 

Net income per share

    

$0.11 to $0.13

 

 

    

 

 

 

 

 

 

 

 

FFO per share

 

$0.52 to $0.54

 

 

 

 

 

 

 

 

 

 

 

FFOA per share

 

$0.51 to $0.53

 

 

 

 

 

 

 

 

 

 

 

AFFO per share

 

$0.46 to $0.48

 

 

 

 

 

 

For the full-year 2019, the Company increased its previously provided earnings per share guidance ranges.

 

 

 

Updated Guidance

 

Prior Guidance

 

 

 

 

 

 

 

 

 

Net income per share

    

$0.38 to $0.41

 

$0.36 to $0.40

    

 

 

 

 

 

 

 

 

FFO per share

 

$2.09 to $2.12

 

$2.05 to $2.09

 

 

 

 

 

 

 

 

 

FFOA per share

 

$2.05 to $2.08

 

$2.03 to $2.07

 

 

 

 

 

 

 

 

 

AFFO per share

 

$1.89 to $1.92

 

$1.87 to $1.91

 

 

 

 

For the full-year 2019, the Company increased its previously provided same-store revenue and NOI growth guidance ranges and decreased its previously provided same-store expense growth guidance range.

 

 

 

Updated Guidance

 

Prior Guidance

 

 

 

 

 

 

 

 

 

Revenue growth

    

3.40% to 4.00%

 

3.00% to 4.00%

    

 

 

 

 

 

 

 

 

Expense growth

 

2.50% to 3.00%

 

2.75% to 3.75%

 

 

 

 

 

 

 

 

 

Net operating income growth

 

3.75% to 4.50%

 

3.25% to 4.25%

 

 

 

 

 

 

 

 

 

Physical Occupancy

 

96.8% to 97.0%

 

96.8% to 97.0%

 

 

 

Additional assumptions for the Company’s third quarter and full-year 2019 guidance can be found on Attachment 15 of the Company’s second 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 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.

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 July 31, 2019 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, 2019, by dialing 844-512-2921 for domestic and 412-317-6671 for international and entering the confirmation number, 13692090, 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.  

 

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 June 30, 2019, UDR owned or had an ownership position in 50,829 apartment homes including 366 homes under development. For over 47 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 Second Quarter 2019

(Unaudited) (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual Results

 

Actual Results

 

Guidance as of June 30, 2019

Dollars in thousands, except per share and unit

 

 

 

2Q 2019

 

YTD 2019

 

3Q 2019

 

Full-Year 2019

 

 

 

 

 

 

 

 

 

 

 

GAAP Metrics

 

 

 

 

 

 

 

 

 

 

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

 

 

 

$35,619

 

$60,122

 

--

 

--

Net income/(loss) attributable to common stockholders

 

 

 

$34,588

 

$58,080

 

--

 

--

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

 

 

 

$0.12

 

$0.21

 

$0.11 to $0.13

 

$0.38 to $0.41

 

 

 

 

 

 

 

 

 

 

 

Per Share Metrics

 

 

 

 

 

 

 

 

 

 

FFO per common share and unit, diluted

 

 

 

$0.54

 

$1.05

 

$0.52 to $0.54

 

$2.09 to $2.12

FFO as Adjusted per common share and unit, diluted

 

 

 

$0.52

 

$1.02

 

$0.51 to $0.53

 

$2.05 to $2.08

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

 

 

 

$0.48

 

$0.96

 

$0.46 to $0.48

 

$1.89 to $1.92

Dividend declared per share and unit

 

 

 

$0.3425

 

$0.6850

 

$0.3425

 

$1.37 (2)

 

 

 

 

 

 

 

 

 

 

 

Same-Store Operating Metrics

 

 

 

 

 

 

 

 

 

 

Revenue growth

 

 

 

3.7%

 

3.7%

 

--

 

3.40% - 4.00%

Expense growth

 

 

 

2.3%

 

2.7%

 

--

 

2.50% - 3.00%

NOI growth

 

 

 

4.2%

 

4.1%

 

--

 

3.75% - 4.50%

Physical Occupancy

 

 

 

96.9%

 

96.9%

 

--

 

96.8% - 97.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property Metrics

 

 

 

Homes

 

Communities

 

% of Total NOI

 

 

Same-Store

 

 

 

38,177

 

123

 

78.8%

 

 

Stabilized, Non-Mature

 

 

 

2,211

 

6

 

6.3%

 

 

Acquired Communities

 

 

 

1,251

 

4

 

0.8%

 

 

Redevelopment

 

 

 

653

 

2

 

2.2%

 

 

Development, completed

 

 

 

-

 

-

 

-

 

 

Non-Residential / Other

 

 

 

N/A

 

N/A

 

1.6%

 

 

Joint Venture (includes completed Joint Venture developments) (3)

 

 

 

7,452

 

29

 

10.2%

 

 

Developer Capital Program - West Coast Development JV

 

 

 

276

 

1

 

0.1%

 

 

Total completed homes (excluding Held for Disposition)

 

 

 

50,020

 

165

 

100%

 

 

Joint Venture Held for Disposition

 

 

 

443

 

2

 

-

 

 

Under Development

 

 

 

-

 

-

 

-

 

 

Joint Venture Under Development

 

 

 

366

 

1

 

-

 

 

Total Quarter-end homes (3)(4)

 

 

 

50,829

 

168

 

100%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Metrics (adjusted for non-recurring items)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2Q 2019

 

2Q 2018

 

 

 

 

Consolidated Interest Coverage Ratio

 

 

 

5.0x

 

4.7x

 

 

 

 

Consolidated Fixed Charge Coverage Ratio

 

 

 

4.9x

 

4.6x

 

 

 

 

Consolidated Debt as a percentage of Total Assets

 

 

 

32.1%

 

33.4%

 

 

 

 

Consolidated Net Debt-to-EBITDAre

 

 

 

5.4x

 

5.7x

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

C:\Users\bmaas\Desktop\2Q19 Financial Highlights.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 2,082 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

 

2019

 

2018

 

2019

 

2018

 

 

 

 

 

 

 

 

 

REVENUES:

 

 

 

 

 

 

 

 

Rental income

 

$
278,463

 

$
256,634

 

$
546,385

 

$
507,117

Joint venture management and other fees

 

2,845

 

3,109

 

5,596

 

5,931

Total revenues

 

281,308

 

259,743

 

551,981

 

513,048

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Property operating and maintenance

 

42,894

 

41,452

 

84,833

 

82,039

Real estate taxes and insurance

 

35,834

 

31,907

 

72,134

 

65,189

Property management

 

8,006

 

7,057

 

15,709

 

13,945

Other operating expenses

 

2,735

 

2,825

 

8,381

 

4,834

Real estate depreciation and amortization

 

117,934

 

106,520

 

230,402

 

214,656

General and administrative

 

12,338

 

12,373

 

24,805

 

24,132

Casualty-related charges/(recoveries), net

 

246

 

746

 

246

 

1,686

Other depreciation and amortization

 

1,678

 

1,684

 

3,334

 

3,375

Total operating expenses

 

221,665

 

204,564

 

439,844

 

409,856

 

 

 

 

 

 

 

 

 

Gain/(loss) on sale of real estate owned

 

5,282

 

 -

 

5,282

 

70,300

Operating income

 

64,925

 

55,179

 

117,419

 

173,492

 

 

 

 

 

 

 

 

 

Income/(loss) from unconsolidated entities

 

6,625

 

(2,032)

 

6,674

 

(3,709)

Interest expense

 

(34,417)

 

(31,598)

 

(67,959)

 

(61,541)

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

 

1,310

 

1,128

 

11,123

 

3,887

 

 

 

 

 

 

 

 

 

Income/(loss) before income taxes

 

38,443

 

22,677

 

67,257

 

112,129

Tax (provision)/benefit, net (2)

 

(125)

 

(233)

 

(2,337)

 

(460)

 

 

 

 

 

 

 

 

 

Net Income/(loss)

 

38,318

 

22,444

 

64,920

 

111,669

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

 

(2,652)

 

(1,813)

 

(4,709)

 

(9,203)

Net (income)/loss attributable to noncontrolling interests

 

(47)

 

(30)

 

(89)

 

(109)

 

 

 

 

 

 

 

 

 

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

 

35,619

 

20,601

 

60,122

 

102,357

Distributions to preferred stockholders - Series E (Convertible)

 

(1,031)

 

(971)

 

(2,042)

 

(1,926)

 

 

 

 

 

 

 

 

 

Net income/(loss) attributable to common stockholders

 

$
34,588

 

$
19,630

 

$
58,080

 

$
100,431

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$ 0.12

 

$ 0.07

 

$ 0.21

 

$ 0.38

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

 

$ 0.12

 

$ 0.07

 

$ 0.21

 

$ 0.37

 

 

 

 

 

 

 

 

 

Common distributions declared per share

 

$0.3425

 

$0.3225

 

$0.6850

 

$0.6450

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding - basic

 

281,960

 

267,311

 

279,494

 

267,428

Weighted average number of common shares outstanding - diluted

 

282,575

 

268,890

 

280,081

 

269,002

(1)

See Attachment 16 for definitions and other terms.

(2)

During the six months ended June 30, 2019, 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

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

In thousands, except per share and unit amounts

 

2019

 

2018

 

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income/(loss) attributable to common stockholders

 

$

34,588

 

$

19,630

 

$

58,080

 

$

100,431

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate depreciation and amortization

 

 

117,934

 

 

106,520

 

 

230,402

 

 

214,656

Noncontrolling interests

 

 

2,699

 

 

1,843

 

 

4,798

 

 

9,312

Real estate depreciation and amortization on unconsolidated joint ventures

 

 

15,211

 

 

15,512

 

 

30,885

 

 

29,852

Cumulative effect of change in accounting principle

 

 

 -

 

 

 -

 

 

 -

 

 

(2,100)

Net gain on the sale of unconsolidated depreciable property

 

 

(5,251)

 

 

 -

 

 

(5,251)

 

 

 -

Net gain on the sale of depreciable real estate owned

 

 

 -

 

 

 -

 

 

 -

 

 

(70,300)

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

 

$

165,181

 

$

143,505

 

$

318,914

 

$

281,851

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

1,031

 

 

971

 

 

2,042

 

 

1,926

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO attributable to common stockholders and unitholders, diluted

 

$

166,212

 

$

144,476

 

$

320,956

 

$

283,777

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO per weighted average common share and unit, basic 

 

$

0.54

 

$

0.49

 

$

1.05

 

$

0.97

FFO per weighted average common share and unit, diluted

 

$

0.54

 

$

0.49

 

$

1.05

 

$

0.96

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

304,696

 

 

291,885

 

 

302,998

 

 

291,968

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

 

 

 

 

 

 

 

 

 

 

 

 

   equivalents outstanding - diluted

 

 

308,322

 

 

296,475

 

 

306,596

 

 

296,553

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of adjustments to FFO:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

 -

 

$

 -

 

$

(6,482)

 

$

 -

Legal and other costs (4)

 

 

 -

 

 

625

 

 

3,431

 

 

625

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

 

 

(5,282)

 

 

 -

 

 

(5,282)

 

 

 -

Casualty-related charges/(recoveries), net

 

 

246

 

 

806

 

 

261

 

 

1,815

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

 

 

81

 

 

 -

 

 

227

 

 

 -

 

 

$

(4,955)

 

$

1,431

 

$

(7,845)

 

$

2,440

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO as Adjusted attributable to common stockholders and unitholders, diluted

 

$

161,257

 

$

145,907

 

$

313,111

 

$

286,217

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.52

 

$

0.49

 

$

1.02

 

$

0.97

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring capital expenditures

 

 

(12,750)

 

 

(12,781)

 

 

(19,968)

 

 

(19,450)

AFFO attributable to common stockholders and unitholders, diluted

 

$

148,507

 

$

133,126

 

$

293,143

 

$

266,767

 

 

 

 

 

 

 

 

 

 

 

 

 

AFFO per weighted average common share and unit, diluted

 

$

0.48

 

$

0.45

 

$

0.96

 

$

0.90


(1)

See Attachment 16 for definitions and other terms.

(2)

Series E preferred shares are dilutive for purposes of calculating FFO per share for the three and six months ended June 30, 2019 and June 30, 2018.  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 for the six months ended June 30, 2019 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)

 

 

 

 

 

 

 

 

June 30,

 

December 31,

In thousands, except share and per share amounts

 

2019

 

2018

 

 

 

 

 

ASSETS

 

 

 

 

Real estate owned:

 

 

 

 

Real estate held for investment

 

$
11,011,516

 

$
10,196,159

Less: accumulated depreciation

 

(3,878,897)

 

(3,654,160)

Total real estate owned, net of accumulated depreciation

 

7,132,619

 

6,541,999

 

 

 

 

 

Cash and cash equivalents

 

981

 

185,216

Restricted cash

 

23,042

 

23,675

Notes receivable, net

 

37,494

 

42,259

Investment in and advances to unconsolidated joint ventures, net

 

769,000

 

780,869

Operating lease right-of-use assets (2)

 

93,939

 

 -

Other assets

 

140,191

 

137,710

Total assets

 

$
8,197,266

 

$
7,711,728

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

Liabilities:

 

 

 

 

Secured debt

 

$
598,389

 

$
601,227

Unsecured debt

 

3,272,200

 

2,946,560

Operating lease liabilities (2)

 

88,099

 

 -

Real estate taxes payable

 

23,919

 

20,608

Accrued interest payable

 

42,029

 

38,747

Security deposits and prepaid rent

 

35,222

 

35,060

Distributions payable

 

105,611

 

97,666

Accounts payable, accrued expenses, and other liabilities

 

63,250

 

76,343

Total liabilities

 

4,228,719

 

3,816,211

 

 

 

 

 

Redeemable noncontrolling interests in the OP and DownREIT Partnership

 

1,000,532

 

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

15,097,917 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

 

 

 

 

283,104,643 shares issued and outstanding (275,545,900 shares at December 31, 2018)

 

2,831

 

2,755

Additional paid-in capital

 

5,244,819

 

4,920,732

Distributions in excess of net income

 

(2,336,609)

 

(2,063,996)

Accumulated other comprehensive income/(loss), net

 

(7,838)

 

(67)

Total stockholders' equity

 

2,949,404

 

2,905,625

Noncontrolling interests

 

18,611

 

17,152

Total equity

 

2,968,015

 

2,922,777

Total liabilities and equity

 

$
8,197,266

 

$
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.  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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

Common Stock and Equivalents

 

 

 

 

 

 

 

 

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares

 

 

 

 

 

 

 

 

 

282,849,744

 

275,239,072

Restricted shares

 

 

 

 

 

 

 

 

 

254,899

 

306,828

Total common shares

 

 

 

 

 

 

 

 

 

283,104,643

 

275,545,900

Restricted unit and common stock equivalents

 

 

 

 

 

 

 

 

 

429,293

 

385,088

Operating and DownREIT Partnership units

 

 

 

 

 

 

 

 

 

20,536,865

 

22,800,064

Class A Limited Partnership units

 

 

 

 

 

 

 

 

 

1,751,671

 

1,751,671

Series E cumulative convertible preferred shares (2)

 

 

 

 

 

 

 

 

 

3,010,843

 

3,010,843

Total common shares, OP/DownREIT units, and common stock equivalents

 

 

 

 

 

 

 

 

 

308,833,315

 

303,493,566