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Section 1: 8-K (8-K)

0000074208false00000742082020-10-292020-10-29

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, 2020

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: (720283-6120

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 October 29, 2020, UDR, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2020. 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, 2020.

 99.2

 Supplemental Financial Information dated October 29, 2020.

104

Cover Page Interactive Data File – The cover page XBRL tags are embedded within the Inline XBRL document

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, 2020

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)

Graphic

Exhibit 99.1

Press Release

DENVER, CO – October 29, 2020

Contact: Trent Trujillo

Phone:   720.283.6135

UDR ANNOUNCES THIRD QUARTER 2020 RESULTS

AND FOURTH QUARTER 2020 GUIDANCE

UDR, Inc. (the “Company”) Third Quarter 2020 Highlights:

Net loss per share was ($0.09), Funds from Operations (“FFO”) per share was $0.42, FFO as Adjusted (“FFOA”) per share was $0.50, and Adjusted FFO (“AFFO”) per share was $0.45.
Net loss attributable to common stockholders was ($26.3) million compared to net income of $26.2 million in the prior year period, primarily due to a decline in Combined Same-Store net operating income (“NOI”), depreciation from communities acquired since 2019, and costs associated with debt extinguishment.
Year-over-year (“YOY”) Combined Same-Store results during the third quarter of 2020, with concessions accounted for on cash and straight-line bases, as compared to the third quarter of 2019 were as follows:

(1)

Region

Revenue Growth / (Decline)

Expense

Growth / (Decline)

NOI Growth / (Decline)

% of Combined Same-Store

Portfolio(1)

Physical Occupancy(2)

YOY Change in Occupancy

West

(7.8)%

1.1%

(10.7)%

39.9%

94.0%

(2.5)%

Mid-Atlantic

(1.7)%

2.6%

(3.6)%

22.8%

96.8%

(0.2)%

Northeast

(16.1)%

7.1%

(26.9)%

13.6%

91.7%

(5.0)%

Southeast

1.7%

8.9%

(1.5)%

11.9%

97.3%

0.3%

Southwest

1.1%

5.4%

(1.8)%

7.1%

96.9%

0.4%

Other Markets

(0.6)%

6.6%

(3.7)%

4.7%

97.1%

1.0%

Total (Cash)

(5.9)%

4.2%

(10.0)%

100.0%

95.5%

(1.2)%

Total (Straight-Line)

(3.3)%

-

(6.4)%

-

-

-

(1)

Based on Q3 2020 Combined Same-Store NOI. For definitions of terms, please refer to the “Definitions and Reconciliations” section of the Company’s third quarter Supplemental Financial Information.

(2)

Weighted average Combined Same-Store physical occupancy for the quarter.

The Company continues to implement its Next Generation Operating Platform, which has driven a year-to-date (“YTD”) Combined Same-Store controllable expense decline of (0.4) percent YOY.
The Company repurchased approximately 597,500 common shares at an average price of $33.11 per share for total consideration of approximately $19.8 million.
The Company purchased Village at Valley Forge, a development site in the King of Prussia submarket of Philadelphia, PA, for $16.2 million.
As previously announced, the Company issued $400.0 million of unsecured debt at an effective interest rate of 2.11 percent that matures in 2032. Proceeds were used to prepay $245.8 million of 4.64 percent secured debt due in 2023 and to purchase $116.9 million of 3.75 percent unsecured debt due in 2024.
Subsequent to quarter-end, the Company sold DelRay Tower, a 332-home community located in Metropolitan Washington, D.C., for gross proceeds of $145.0 million.

“UDR’s business remains resilient with our leasing and occupancy fundamentals bolstered by our Next Generation Operating Platform and strong liquidity position. While we knew the third quarter would be challenging due to transitory issues in three key markets, namely New York, San Francisco, and Boston, we are pleased that across the majority of our portfolio there are growing signs of stability in billed rent, collections, occupancy, blended lease rate growth, concessions, and resident turnover. However, we remain subject to still-evolving regulatory constraints and economic volatility which create a level of future uncertainty,” said Tom Toomey, UDR’s Chairman and CEO. “I am thankful for the commitment our associates have demonstrated to enhancing the lives of our residents and the neighborhoods in which we operate during the pandemic.”

1


Recent Operating Trends and Fourth Quarter 2020 Outlook

The table below is a summary of third quarter 2020 residential operational trends and October 2020 expectations, as of and through October 26, 2020. Importantly, the Company has seen no degradation in cash revenue collections, which continue to trend above 98 percent. October cash revenue received as a percentage of billed revenue is consistent with the months of April through September at corresponding collection times as of and through the 26th day of each month.

Summary of Third Quarter and October 2020 Residential Operating Trends(1)

As of and Through October 26, 2020

Metric

Q3 2019

July 2020

Aug 2020

Sept 2020

Q3

2020

Oct 2020

Estimated Range

Residential revenue billed

($ millions)

$315.2

$105.2

$103.8

$103.5

$312.5

$102.5-$103.5

Revenue recognized /

reserved(2)

N/A

N/A

N/A

N/A

98.7% / 1.3%

N/A

Cash revenue collected

(% of billed)

99.6%

97.7%

96.8%

96.0%

96.8% (2)

Consistent with prior months

Leasing Traffic(3)

874

1,177

1,114

1,103

1,132

1,000 – 1,100

Visits(3)

27,066

10,445

10,739

10,567

31,751

10,000 – 11,000

Combined Same-Store Metrics

Weighted Average

Physical Occupancy

96.7%

95.6%

95.5%

95.5%

95.5%

95.5%-96.0%

Effective Blended

Lease Rate Growth(3)

3.5%

(0.4)%

(0.6)%

(0.7)%

(0.6)%

(0.6)% - (1.0)%

(1)

Metrics shown here are for the Company’s total residential portfolio, unless otherwise indicated, and are as of October 26, 2020.

(2)

As of September 30, 2020, the Company had collected 96.1 percent of Q3 2020 billed residential revenue. Of the 3.9 percent, or $12.2 million, not collected, and based on probability of collection, the Company reserved (reflected as a reduction to revenue) approximately 1.3 percent, or $4.0 million, for bad debt, comprising $3.4 million from Combined Same-Store communities, $0.3 million from all other consolidated communities, and $0.3 million from the Company’s share from unconsolidated joint ventures.

(3)

For definitions, please refer to the “Definitions and Reconciliations” section of the Company’s third quarter Supplemental Financial Information.

Outlook

For the fourth quarter of 2020, the Company has established the following same-store and earnings guidance ranges(1):

Q3 2020 – Actual

Q4 2020 – Outlook

Net Income / (Loss) per share

$(0.09)

$0.17 to $0.19

FFO per share

$0.42

$0.47 to $0.49

FFOA per share

$0.50

$0.48 to $0.50

AFFO per share

$0.45

$0.43 to $0.45

YOY Combined Same-Store Revenue Growth / (Decline), with concessions reported on a cash basis(2)

(5.9)%

(5.0)% to (6.0)%

YOY Combined Same-Store Revenue Growth / (Decline), with concessions reported on a straight-line basis(2)

(3.3)%

(4.0)% to (5.0)%

YOY Combined Same-Store Expense Growth

4.2%

3.25% to 4.25%

YOY Combined Same-Store NOI Growth / (Decline), with concessions reported on a cash basis(2)

(10.0)%

(8.5)% to (10.0)%

YOY Combined Same-Store NOI Growth / (Decline), with concessions reported on a straight-line basis(2)

(6.4)%

(7.5)% to (9.0)%

(1)

Additional assumptions for the Company’s fourth quarter outlook can be found on Attachment 15 of the Company’s third 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(E) 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(E), “Definitions and Reconciliations,” of the Company’s third quarter Supplemental Financial Information.

(2)

“Cash Basis” and “Straight-Line Basis” present concessions reported on a cash or straight-line basis, respectively.

2


Third Quarter 2020 Operations

In the third quarter, total revenue increased by $14.7 million year-over-year, or 5.0 percent, to $310.0 million. This increase was primarily attributable to growth in revenue from acquired and stabilized, non-mature communities. The third quarter annualized rate of turnover increased by 160 basis points versus the prior year period to 65.4 percent. Please refer to the table on page 1 of this Press Release for additional details.

23.1 percent of the Company’s third quarter 2020 Combined Same-Store NOI came from communities located in the New York, San Francisco, and Boston markets. Rent growth and occupancy in the suburban areas of these markets remained stable, but third quarter operating results in the urban areas of these three markets were highly challenged due to delayed re-openings of the cities, resulting in elevated concessionary activity and vacancy. While challenged, recent trends indicate evidence of rental rates bottoming and occupancy improving in each of these urban areas.

Summary of Third Quarter YOY Combined Same-Store Growth and Occupancy Trends

(1)

Revenue Growth / (Decline)

NOI Growth / (Decline)

Physical Occupancy(3)

Market

% of Combined Same-Store

Portfolio(1)

Cash Basis(2)

Straight-Line Basis(2)

Cash Basis(2)

Straight-Line Basis(2)

Q3 2020

As of October 26, 2020

New York, NY

4.0%

(22.2)%

(10.7)%

(44.9)%

(26.2)%

87.7%

92.3%

San Francisco, CA

9.5%

(19.1)%

(15.2)%

(24.7)%

(19.5)%

86.3%

88.6%

Boston, MA

9.6%

(11.4)%

(6.7)%

(15.3)%

(8.9)%

93.8%

93.7%

Subtotal / Wtd. Avg.

23.1%

(17.2)%

(11.0)%

(26.0)%

(17.2)%

89.7%

91.6%

Remaining Markets

76.9%

(1.5)%

(0.3)%

(3.8)%

(2.1)%

97.2%

96.7%

Total / Wtd. Avg.

100.0%

(5.9)%

(3.3)%

(10.0)%

(6.4)%

95.5%

95.8%

(1)

Based on Q3 2020 Combined Same-Store NOI. Totals may not equate to the displayed subtotals or weighted averages due to rounding. For definitions of terms, please refer to the “Definitions and Reconciliations” section of the Company’s third quarter Supplemental Financial Information.

(2)

“Cash Basis” and “Straight-Line Basis” present concessions reported on a cash or straight-line basis, respectively.

(3)

Weighted average Combined Same-Store physical occupancy for the third quarter 2020 and as of October 26, 2020, respectively.

In the table below, the Company has presented sequential Combined Same-Store results by region, with concessions accounted for on cash and straight-line bases.

Summary of Combined Same-Store Results in Third Quarter 2020 versus Second Quarter 2020

(1)

Region

Revenue Growth / (Decline)

Expense

Growth / (Decline)

NOI Growth / (Decline)

% of Combined Same-Store

Portfolio(1)

Physical Occupancy(2)

Sequential Change in Occupancy

West

(4.3)%

3.6%

(6.9)%

39.9%

94.0%

(1.5)%

Mid-Atlantic

0.0%

4.1%

(1.8)%

22.8%

96.8%

(0.1)%

Northeast

(9.2)%

14.6%

(20.5)%

13.6%

91.7%

(1.8)%

Southeast

1.6%

3.2%

0.7%

11.9%

97.3%

0.0%

Southwest

0.9%

3.8%

(1.0)%

7.1%

96.9%

0.0%

Other Markets

1.2%

8.5%

(2.0)%

4.7%

97.1%

0.7%

Total (Cash)

(2.8)%

5.9%

(6.5)%

100.0%

95.5%

(0.6)%

Total (Straight-Line)

(0.3)%

-

(2.9)%

-

-

-

(1)

Based on Q3 2020 Combined Same-Store NOI. For definitions of terms, please refer to the “Definitions and Reconciliations” section of the Company’s third quarter Supplemental Financial Information.

(2)

Weighted average Combined Same-Store physical occupancy for the quarter.

3


In the table below, the Company has presented components of residential revenue contribution that drove the year-over-year and sequential decreases in Combined Same-Store revenue during the third quarter, as reported on a cash basis. The decreases are a result of the following:

Year-Over-Year Contribution to Growth / (Decline)(1)

Sequential Contribution to Growth / (Decline)(1)

Residential Revenue Components

Q3 2019 to Q3 2020

($ in millions)

Q3 2019 to Q3 2020

(%)

Q2 2020 to Q3 2020

($ in millions)

Q2 2020 to Q3 2020

(%)

Base Quarter Combined Same-Store Revenue

$286.9

$277.9

Gross Rents

$0.0

0.0%

$(1.9)

(0.7)%

Concessions(2)

$(7.7)

(2.7)%

$(6.5)

(2.4)%

Economic Occupancy Loss

$(5.6)

(1.9)%

$(2.3)

(0.8)%

Net Bad Debt Write-Offs

$(0.5)

(0.2)%

$(0.5)

(0.2)%

Bad Debt Reserve

$(3.4)

(1.2)%

$1.3

0.5%

Fee and Other Income

$0.4

0.1%

$2.1

0.8%

Q3 2020 Combined Same-Store Revenue

$270.1

(5.9)%

$270.1

(2.8)%

(1)

Totals may not sum to $270.1 million, (5.9) percent and (2.8) percent, respectively, due to rounding.

(2)

Concessions exclude direct leasing costs. Please see Attachment 16(A), “Definitions and Reconciliations,” of the Company’s third quarter Supplemental Financial Information for a reconciliation of Combined Same-Store Revenue with concessions on a cash basis to Combined Same-Store Revenue on a straight-line basis.

Year-to-date, for the nine months ended September 30, 2020, total revenue increased by $91.4 million year-over-year, or 10.8 percent, to $938.8 million. This increase was primarily attributable to growth in revenue from acquired and stabilized, non-mature communities.

In the table below, the Company has presented year-to-date, for the nine months ended September 30, 2020, Combined Same-Store results by region, with concessions accounted for on cash and straight-line bases. The year-to-date annualized rate of turnover decreased by 70 basis points versus the prior year period to 51.2 percent.

Summary of Combined Same-Store Results YTD 2020 versus YTD 2019

(1)

Region

Revenue Growth / (Decline)

Expense

Growth / (Decline)

NOI Growth / (Decline)

% of Combined

Same-Store

Portfolio(1)

Physical Occupancy(2)

YTD YOY Change in Occupancy

West

(2.8)%

2.4%

(4.4)%

39.6%

95.5%

(1.0)%

Mid-Atlantic

0.0%

2.0%

(0.9)%

23.9%

96.9%

(0.2)%

Northeast

(6.8)%

6.5%

(13.1)%

12.9%

94.5%

(2.2)%

Southeast

1.8%

6.9%

(0.4)%

11.2%

97.2%

0.2%

Southwest

1.9%

(0.9)%

4.0%

7.5%

96.9%

0.5%

Other Markets

0.2%

1.6%

(0.4)%

4.9%

96.6%

0.6%

Total (Cash)

(1.7)%

3.1%

(3.6)%

100.0%

96.3%

(0.4)%

Total (Straight-Line)

(0.7)%

-

(2.3)%

-

-

-

(1)

Based on YTD 2020 Combined Same-Store NOI. For definitions of terms, please refer to the “Definitions and Reconciliations” section of the Company’s third quarter Supplemental Financial Information.

(2)

Weighted average Combined Same-Store physical occupancy for YTD 2020.

Retail tenant income accounts for less than 2 percent of the Company’s consolidated NOI. During the third quarter, the Company collected 89.4 percent of billed retail revenue and reserved $0.8 million, including $0.1 million for UDR’s share from unconsolidated joint ventures, of its retail revenue based on probability of collection.

4


Wholly Owned Transactional Activity

During the quarter, the Company acquired Village at Valley Forge, a fully entitled development site in the King of Prussia submarket of Philadelphia, PA, for $16.2 million.

Subsequent to quarter-end the Company sold DelRay Tower, a 332-home community located in Metropolitan Washington, D.C (Alexandria, VA), for gross proceeds of $145.0 million, or $436,750 per home. At the time of sale, the community, which was extensively redeveloped six years ago, had a weighted average monthly revenue per occupied home of $2,095 and physical occupancy of 93.1 percent.

Development Activity

At the end of the third quarter, the Company’s development pipeline totaled $423.5 million, of which 47 percent of this cost had been incurred. The Company’s active pipeline includes four development communities, one each in Addison, TX; Denver, CO; Dublin, CA; and Washington, D.C., for a combined total of 1,178 homes. During the quarter construction commenced at 440 Penn Street, a $145.0 million, 300-home community in Washington, D.C.

Developer Capital Program (“DCP”) Activity

At the end of the third quarter, the Company’s DCP investments, including accrued return, totaled $473.2 million with a weighted average return rate of 8.6 percent and weighted average expected remaining term of 2.5 years.

During the quarter, the third-party developer affiliated with UDR’s $20.0 million secured note on Alameda Point Block 11 in Alameda, CA, defaulted on the loan. As a result of the default, the Company expects to take title to the property pursuant to a deed in lieu of foreclosure. At that time, the Company will reclassify the related balance from a secured loan to a wholly-owned land parcel.

As previously announced, during the quarter the Company invested $40.0 million into Vernon Boulevard, a 534-home multifamily development located in Queens, NY. The investment yields 13.0 percent on the Company’s capital outstanding with 4.8 years until expected redemption and includes profit participation upon a liquidity event. The community is fully capitalized, inclusive of $61.7 million of developer equity (or approximately 18 percent of the $341.7 million total project cost), and construction commenced during the fourth quarter of 2019.

Capital Markets and Balance Sheet Activity

During the quarter, the Company repurchased approximately 597,500 common shares at an average price of $33.11 per share for total consideration of approximately $19.8 million.

As previously announced, during the quarter the Company:

Issued $400.0 million of unsecured debt at an effective interest rate of 2.11 percent that matures in 2032. A portion of the proceeds were used to prepay $245.8 million of 4.64 percent secured debt due in 2023 and to purchase $116.9 million of 3.75 percent unsecured debt due in 2024 pursuant to the previously-announced tender offer. The combined prepayment and make-whole amounts, netted against fair market value adjustments, totaled approximately $24.0 million.
Refinanced its only remaining 2020 maturity, a $79.3 million, 4.35 percent fixed rate mortgage loan, with a $160.9 million, 2.62 percent fixed rate secured loan that matures in 2031. The net costs associated with debt extinguishment totaled approximately $0.5 million.
Amended its $75.0 million working capital credit facility. The amendment extends the maturity date from January 2021 to January 2022. The interest rate on the facility remains equal to LIBOR plus a spread of 82.5 basis points.

5


At September 30, 2020, the Company had $923.8 million of liquidity through a combination of cash and undrawn capacity on its credit facilities, plus an approximate $102.0 million of incremental capital sources from the potential settlement of previously-announced forward equity sales agreements. Please see Attachment 15 of the Company’s third quarter Supplemental Financial Information for additional details on projected capital sources and uses.

The Company’s total indebtedness as of September 30, 2020 was $4.9 billion with no remaining consolidated maturities through 2022, excluding principal amortization, amounts on the Company’s commercial paper program and amounts on the Company’s working capital credit facility. The Company ended the quarter with fixed-rate debt representing 93.7 percent of its total debt, a weighted average interest rate of 3.01 percent and a weighted average years to maturity of 7.6 years. The Company’s consolidated leverage was 35.0 percent versus 31.0 percent a year ago, its consolidated net-debt-to-EBITDAre was 6.5x versus 5.5x a year ago and its consolidated fixed charge coverage ratio was 4.7x, flat versus a year ago.

Dividend

As previously announced, the Company’s Board of Directors declared a regular quarterly dividend on its common stock for the third quarter of 2020 in the amount of $0.36 per share. The dividend will be paid in cash on November 2, 2020 to UDR common stock shareholders of record as of October 12, 2020. The third quarter 2020 dividend will represent the 192nd consecutive quarterly dividend paid by the Company on its common stock.

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 12:00 p.m. Eastern Time on October 30, 2020 to discuss third quarter results as well as high-level views for 2020.

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.

This quarter, given the combination of a high volume of conference calls occurring during this time of year generally and the impact that the COVID-19 pandemic has had on staffing and capacity at our conference call provider, we anticipate potential delays if you dial in to be connected to the live call. As a result, we encourage stockholders and interested parties to join us for the Company’s earnings results discussion via the webcast link. If you choose to dial in to the live call, please allow extra time to be connected to the call.

A replay of the conference call will be available through November 29, 2020, by dialing 844-512-2921 for domestic and 412-317-6671 for international and entering the confirmation number, 13710872, 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. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement, due to a number of factors, which include, but are not limited to, the impact of the COVID-19 pandemic and measures intended to prevent its spread or address its effects, unfavorable changes in the apartment market, changing economic conditions, the impact of inflation/deflation on rental rates and property operating expenses, expectations concerning availability of capital and the stabilization of the capital markets, the impact of competition and competitive pricing, acquisitions, developments and redevelopments not achieving anticipated results, delays in completing developments, redevelopments and lease-ups on schedule, expectations on job growth, home affordability and demand/supply ratio for multifamily housing, expectations concerning development and redevelopment activities, expectations on occupancy levels and rental rates, expectations concerning the joint ventures with third parties, expectations that technology will help grow net operating income, expectations on annualized net operating income and other risk factors discussed in documents filed by the Company with the SEC 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 communities in targeted U.S. markets. As of September 30, 2020, UDR owned or had an ownership position in 51,649 apartment homes including 1,031 homes under development. For over 48 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)

Exhibit 99.2

Financial Highlights

UDR, Inc.

As of End of Third Quarter 2020

(Unaudited) (1)

Guidance as of

Actual Results

Actual Results

September 30, 2020

Dollars in thousands, except per share and unit

3Q 2020

YTD 2020

4Q 2020

GAAP Metrics

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

-$25,258

$37,734

--

Net income/(loss) attributable to common stockholders

-$26,309

$34,555

--

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

-$0.09

$0.12

$0.17 to $0.19

Per Share Metrics

FFO per common share and unit, diluted

$0.42

$1.46

$0.47 to $0.49

FFO as Adjusted per common share and unit, diluted

$0.50

$1.55

$0.48 to $0.50

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

$0.45

$1.43

$0.43 to $0.45

Dividend declared per share and unit

$0.36

$1.08

$0.36

Combined Same-Store Operating Metrics (2)

Combined Revenue growth (Cash basis) (3)

-5.9%

-1.7%

(5.00%) to (6.00%)

Combined Revenue growth (Straight-line basis) (3)

-3.3%

-0.7%

(4.00%) to (5.00%)

Combined Expense growth

4.2%

3.1%

3.25% to 4.25%

Combined NOI growth (Cash basis) (3)

-10.0%

-3.6%

(8.50%) to (10.00%)

Combined NOI growth (Straight-line basis) (3)

-6.4%

-2.3%

(7.50%) to (9.00%)

Combined Physical Occupancy

95.5%

96.3%

--

Property Metrics

Homes

Communities

% of Total NOI

Combined Same-Store (2)

43,877

139

83.4%

Acquired JV Same-Store Portfolio (2)

(3,619)

(11)

-6.8%

UDR Same-Store

40,258

128

76.6%

Stabilized, Non-Mature

2,480

6

4.1%

Acquired JV Same-Store Portfolio (2)

3,619

11

6.8%

Redevelopment

652

2

1.0%

Development, completed

147

-

0.0%

Non-Residential / Other

N/A

N/A

7.2%

Joint Venture (4)

3,130

14

4.3%

Total completed homes

50,286

161

100.0%

Sold and Held for Disposition

332

1

-

Under Development

1,031

4

-

Total Quarter-end homes (4)(5)

51,649

166

100%

Balance Sheet Metrics (adjusted for non-recurring items)

3Q 2020

3Q 2019

Consolidated Interest Coverage Ratio

4.8x

4.8x

Consolidated Fixed Charge Coverage Ratio

4.7x

4.7x

Consolidated Debt as a percentage of Total Assets

35.0%

31.0%

Consolidated Net Debt-to-EBITDAre

6.5x

5.5x

Graphic


(1)See Attachment 16 for definitions and other terms.
(2)Amounts include the Acquired JV Same-Store Portfolio Communities as if these communities were 100% owned by UDR during all periods presented. These communities were stabilized as of the beginning of the prior year, were not in process of any substantial redevelopment activities, and were not held for disposition. Because these communities became wholly owned by UDR in 2019 (the 11 communities and 3,619 homes were previously owned by UDR unconsolidated JVs), they are not included in the UDR Same-Store Communities. These 11 communities will be eligible to join the UDR Same-Store Communities on January 1, 2021.
(3)See Attachment 16(A) for definitions and reconciliations.
(4)Joint venture NOI is based on UDR's share. Homes and communities at 100%.
(5)Excludes 3,017 homes that are part of the Developer Capital Program as described in Attachment 12(B).

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Graphic

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

2020

2019

2020

2019

REVENUES:

Rental income (2)

$

308,845

$

289,008

$

934,920

$

835,393

Joint venture management and other fees

1,199

6,386

3,861

11,982

Total revenues

310,044

295,394

938,781

847,375

OPERATING EXPENSES:

Property operating and maintenance

53,385

46,869

151,585

131,702

Real estate taxes and insurance

44,328

38,490

134,485

110,624

Property management

8,879

8,309

26,879

24,018

Other operating expenses

5,543

2,751

16,609

11,132

Real estate depreciation and amortization

151,949

127,391

462,481

357,793

General and administrative

11,958

12,197

37,907

37,002

Casualty-related charges/(recoveries), net

-

(1,088)

1,353

(842)

Other depreciation and amortization

3,887

1,619

7,939

4,953

Total operating expenses

279,929

236,538

839,238

676,382

Gain/(loss) on sale of real estate owned

-

-

61,303

5,282

Operating income

30,115

58,856

160,846

176,275

Income/(loss) from unconsolidated entities (2)

2,940

12,713

14,328

19,387

Interest expense

(37,728)

(36,240)

(115,642)

(104,199)

Cost associated with debt extinguishment and other

(24,540)

(6,283)

(24,540)

(6,283)

Total interest expense

(62,268)

(42,523)

(140,182)

(110,482)

Interest income and other income/(expense), net

2,183

1,875

7,304

12,998

Income/(loss) before income taxes

(27,030)

30,921

42,296

98,178

Tax (provision)/benefit, net

(187)

(1,499)

(1,877)

(3,836)

Net Income/(loss)

(27,217)

29,422

40,419

94,342

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

1,990

(2,162)

(2,614)

(6,871)

Net (income)/loss attributable to noncontrolling interests

(31)

(56)

(71)

(145)

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

(25,258)

27,204

37,734

87,326

Distributions to preferred stockholders - Series E (Convertible)

(1,051)

(1,031)

(3,179)

(3,073)

Net income/(loss) attributable to common stockholders

$

(26,309)

$

26,173

$

34,555

$

84,253

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

($0.09)

$0.09

$0.12

$0.30

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

($0.09)

$0.09

$0.12

$0.30

Common distributions declared per share

$0.3600

$0.3425

$1.0800

$1.0275

Weighted average number of common shares outstanding - basic

294,713

288,706

294,627

282,598

Weighted average number of common shares outstanding - diluted

295,003

289,529

294,938

283,292


(1)See Attachment 16 for definitions and other terms.
(2)During the three months ended September 30, 2020, UDR collected 96.1% of billed residential revenue and 89.4% of billed retail revenue. Of the 3.9% and 10.6% not collected, UDR reserved (reflected as a reduction to revenues) approximately 1.3% or $4.0 million for residential, including $0.3 million for UDR’s share from unconsolidated joint ventures, and 9.1% or $0.8 million, including straight-line rent receivables and $0.1 million for UDR’s share from unconsolidated joint ventures, for retail. The reserves are based on probability of collection.

2


Graphic

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

2020

2019

2020

2019

Net income/(loss) attributable to common stockholders

$

(26,309)

$

26,173

$

34,555

$

84,253

Real estate depreciation and amortization

151,949

127,391

462,481

357,793

Noncontrolling interests

(1,959)

2,218

2,685

7,016

Real estate depreciation and amortization on unconsolidated joint ventures

8,738

14,615

26,299

45,500

Net gain on the sale of unconsolidated depreciable property

-

(5,259)

-

(10,510)

Net gain on the sale of depreciable real estate owned

-

-

(61,303)

-

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

$

132,419

$

165,138

$

464,717

$

484,052

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

1,051

1,031

3,179

3,073

FFO attributable to common stockholders and unitholders, diluted

$

133,470

$

166,169

$

467,896

$

487,125

FFO per weighted average common share and unit, basic

$

0.42

$

0.53

$

1.47

$

1.58

FFO per weighted average common share and unit, diluted

$

0.42

$

0.53

$

1.46

$

1.57

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

317,034

310,917

316,939

305,666

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

equivalents outstanding - diluted

320,242

314,751

320,210

309,371

Impact of adjustments to FFO:

Cost associated with debt extinguishment and other

$

24,540

$

6,283

$

24,540

$

6,283

Promoted interest on settlement of note receivable, net of tax

-

-

-

(6,482)

Legal and other costs

1,570

-

3,914

3,660

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

-

-

-

(5,282)

Unrealized (gain)/loss on unconsolidated technology investments, net of tax

155

(3,144)

(3,147)

(3,373)

Joint venture development success fee

-

(3,750)

-

(3,750)

Severance costs and other restructuring expense

254

274

1,896

274

Casualty-related charges/(recoveries), net

74

(1,088)

1,722

(827)

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

-

(651)

31

(424)

$

26,593

$

(2,076)

$

28,956

$

(9,921)

FFO as Adjusted attributable to common stockholders and unitholders, diluted

$

160,063

$

164,093

$

496,852

$

477,204

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

$

0.50

$

0.52

$

1.55

$

1.54

Recurring capital expenditures

(17,397)

(13,177)

(39,110)

(33,145)

AFFO attributable to common stockholders and unitholders, diluted

$

142,666

$

150,916

$

457,742

$

444,059

AFFO per weighted average common share and unit, diluted

$

0.45

$

0.48

$

1.43

$

1.44


(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 nine months ended September 30, 2020 and September 30, 2019. 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.

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Graphic

Attachment 3

UDR, Inc.

Consolidated Balance Sheets

(Unaudited) (1)

September 30,

December 31,

In thousands, except share and per share amounts

2020

2019

ASSETS

Real estate owned:

Real estate held for investment

$

12,533,801

$

12,532,324

Less: accumulated depreciation

(4,467,108)

(4,131,330)

Real estate held for investment, net

8,066,693

8,400,994

Real estate under development

(net of accumulated depreciation of $510 and $23)

197,313

69,754

Real estate held for disposition

(net of accumulated depreciation of $45,153 and $0)

84,243

-

Total real estate owned, net of accumulated depreciation

8,348,249

8,470,748

Cash and cash equivalents

927

8,106

Restricted cash

23,273

25,185

Notes receivable, net

156,996

153,650

Investment in and advances to unconsolidated joint ventures, net

646,355

588,262

Operating lease right-of-use assets

201,754

204,225

Other assets

173,834

186,296

Total assets

$

9,551,388

$

9,636,472

LIABILITIES AND EQUITY

Liabilities:

Secured debt

$

933,087

$

1,149,441

Unsecured debt

3,984,559

3,558,083

Operating lease liabilities

196,346

198,558

Real estate taxes payable

49,239

29,445

Accrued interest payable

30,606

45,199

Security deposits and prepaid rent

46,861

48,353

Distributions payable

115,055

109,382

Accounts payable, accrued expenses, and other liabilities

102,197

90,032

Total liabilities

5,457,950

5,228,493

Redeemable noncontrolling interests in the OP and DownREIT Partnership

759,986

1,018,665

Equity:

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

2,695,363 shares of 8.00% Series E Cumulative Convertible issued

and outstanding (2,780,994 shares at December 31, 2019)

44,764

46,200

14,442,737 shares of Series F outstanding (14,691,274 shares

at December 31, 2019)

1

1

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

294,479,942 shares issued and outstanding (294,588,305 shares at December 31, 2019)

2,945

2,946

Additional paid-in capital

5,776,267

5,781,975

Distributions in excess of net income

(2,500,827)

(2,462,132)

Accumulated other comprehensive income/(loss), net

(10,494)

(10,448)

Total stockholders' equity

3,312,656

3,358,542

Noncontrolling interests

20,796

30,772

Total equity

3,333,452

3,389,314

Total liabilities and equity

$

9,551,388

$

9,636,472


(1)See Attachment 16 for definitions and other terms.

4


Graphic

Attachment 4(A)

UDR, Inc.

Selected Financial Information

(Unaudited) (1)

September 30,

December 31,

Common Stock and Equivalents

2020

2019

Common shares

294,221,525

294,340,740

Restricted shares

258,417

247,565

Total common shares

294,479,942

294,588,305

Restricted unit and common stock equivalents

77,790

766,926

Operating and DownREIT Partnership units

20,562,221

20,061,283

Class A Limited Partnership units

1,751,671

1,751,671

Series E cumulative convertible preferred shares (2)

2,918,127

3,010,843

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

319,789,751

320,179,028

Weighted Average Number of Shares Outstanding

3Q 2020

3Q 2019

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

317,033,933

310,917,284

Weighted average number of OP/DownREIT units outstanding

(22,320,726)

(22,210,886)

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

294,713,207

288,706,398

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

320,242,031

314,750,616

Weighted average number of OP/DownREIT units outstanding

(22,320,726)

(22,210,886)

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

(2,918,127)

(3,010,843)

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

295,003,178

289,528,887

Year-to-Date 2020

Year-to-Date 2019

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

316,938,796

305,667,140

Weighted average number of OP/DownREIT units outstanding

(22,311,783)

(23,068,376)

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

294,627,013

282,598,764

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

320,210,090

309,371,460

Weighted average number of OP/DownREIT units outstanding

(22,311,783)

(23,068,376)

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

(2,960,424)

(3,010,843)

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

294,937,883

283,292,241


(1)See Attachment 16 for definitions and other terms.
(2)At September 30, 2020 and December 31, 2019 there were 2,695,363 and 2,780,994 of Series E cumulative convertible preferred shares outstanding, which is equivalent to 2,918,127 and 3,010,843 shares of common stock if converted (after adjusting for the special dividend paid in 2008).
(3)Series E cumulative convertible preferred shares are anti-dilutive for purposes of calculating Income/(loss) per weighted average common share for the three and nine months ended September 30, 2020 and September 30, 2019.

5


Graphic

Attachment 4(B)

UDR, Inc.

Selected Financial Information

(Unaudited) (1)

Weighted

Weighted