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Section 1: 8-K (8-K)

0000074208false00000742082020-07-282020-07-28

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 28, 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 July 28, 2020, UDR, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 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 July 28, 2020.

 99.2

 Supplemental Financial Information dated July 28, 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.

 July 28, 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 – July 28, 2020

Contact: Trent Trujillo

Phone:   720.283.6135

UDR ANNOUNCES SECOND QUARTER 2020 RESULTS

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

Net income per share was $0.19, Funds from Operations (“FFO”) per share was $0.51, FFO as Adjusted (“FFOA”) per share was $0.51, and Adjusted FFO (“AFFO”) per share was $0.47.
Net income attributable to common stockholders was $56.7 million as compared to $34.6 million in the prior year period. The increase was primarily due to net operating income (“NOI”) growth and gains from the sale of communities during the quarter, partially offset by increased depreciation from communities acquired during 2019 and 2020 as well as the Company recording bad debt reserves against its residential and retail revenues of $5.5 million and $3.5 million, respectively.
Year-over-year (“YOY”) Combined Same-Store revenue, expense and NOI growth / (decline) was (2.1) percent, 2.5 percent and (4.0) percent, respectively. The Company’s second quarter Combined Same-Store bad debt reserve totaled $4.5 million. Absent this reserve, Combined Same-Store revenue and NOI growth / (decline) would have been (0.4) percent and (1.6) percent, respectively.
The Company continues to implement its Next Generation Operating Platform, which drove a Combined Same-Store controllable expense decline of (2.0) percent YOY and helped to maintain controllable operating margin of 84.3 percent, equal to the prior year period despite a decline in Combined Same-Store revenue due to the impact of COVID-19.
The Company’s Combined Same-Store operating margin (property NOI divided by property rental income) was 70.2 percent as compared to 71.5 percent in the prior year period. The decrease is primarily due to a decline in Combined Same-Store revenue and increases in real estate taxes and reserves for bad debt.
As previously announced, the Company sold Waterscape, a 196-home community located in Kirkland, WA, for gross proceeds of $92.9 million and Borgata Apartment Homes, a 71-home community located in Bellevue, WA, for gross proceeds of $49.7 million.
The Company executed a rate lock agreement to refinance its only remaining 2020 maturity, a $79.5 million, 4.35 percent fixed rate mortgage loan, with a $160.9 million, 2.62 percent 10.5-year secured loan. The Company expects to close on the refinancing transaction during the third quarter of 2020.

Subsequent to Quarter-End Highlights:

The Company is providing a summary of recent operations, as of July 24, which can be found on page 4 of this Press Release. Highlights include: (1) total revenue billed remained relatively consistent throughout the second quarter, (2) cash collections were 97.5 percent on a base of $322.6 million in billed revenue, (3) weighted average physical occupancy was 96.3 percent, and (4) traffic, qualified leads, and applications showed sequential monthly improvement.
As previously announced, the Company issued $400.0 million of unsecured debt at an effective interest rate of 2.11 percent with 12.0 years to maturity. A portion of the proceeds were / will be used to prepay $245.8 million of 4.64 percent secured debt originally due in 2023 and to purchase $116.9 million of 3.75 percent unsecured debt originally due in 2024 pursuant to the previously-announced tender offer.
The Company, through its Developer Capital Program, invested $40.0 million into a 534-home community in Queens, NY. The investment yields 13.0 percent on the Company’s capital outstanding with 5.0 years until expected redemption and includes profit participation upon a liquidity event.
The Company amended its $75.0 million working capital credit facility to extend its maturity from January 2021 to January 2022. The interest rate on the facility remains LIBOR plus a spread of 82.5 basis points.

1


“UDR continues to operate at a high level due to the capabilities of our Next Generation Operating Platform, and is in a strong liquidity position to execute on the diverse set of opportunities our experienced teams continue to identify. However, ongoing regulatory impediments as well as the uncertainties surrounding the cadence of state re-openings limit our ability to provide guidance for the remainder of 2020,” said Tom Toomey, UDR’s Chairman and CEO. “I commend our associates for the hard work, dedication, and compassion they have shown in collaboration with our residents through this difficult time.”

Q2 2020

Q2 2019

YTD 2020

YTD 2019

Net income per common share, diluted

$0.19

$0.12

$0.21

$0.21

Conversion from GAAP share count

(0.015)

(0.010)

(0.016)

(0.018)

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

(0.191)

(0.017)

(0.191)

(0.017)

Depreciation and amortization, including JVs

0.511

0.432

1.024

0.852

Noncontrolling interests and preferred dividends

0.017

0.012

0.021

0.022

FFO per common share and unit, diluted

$0.51

$0.54

$1.04

$1.05

Promoted interest on settlement of note receivable, net of tax

-

-

-

(0.021)

Legal and other costs

0.005

-

0.007

0.012

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

-

(0.017)

-

(0.017)

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

(0.010)

-

(0.010)

(0.001)

Severance costs and other restructuring expense

-

-

0.005

-

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

0.001

0.001

0.005

0.002

FFOA per common share and unit, diluted

$0.51

$0.52

$1.05

$1.02

Recurring capital expenditures

(0.039)

(0.041)

(0.068)

(0.065)

AFFO per common share and unit, diluted

$0.47

$0.48

$0.98

$0.96

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 $25.9 million year-over-year, or 9.2 percent, to $307.3 million. This increase was primarily attributable to growth in revenue from acquisition communities.

Second quarter Combined Same-Store NOI decreased 4.0 percent year-over-year, driven by a Combined Same-Store revenue decline of 2.1 percent and Combined Same-Store expense growth of 2.5 percent. Absent the Company’s bad debt reserve, Combined Same-Store revenue would have declined 0.4 percent. Weighted average Combined Same-Store physical occupancy decreased by 50 basis points to 96.3 percent versus the prior year period. The second quarter annualized rate of turnover decreased by 620 basis points versus the prior year period to 48.9 percent.

Summary of Combined Same-Store Results Second Quarter 2020 versus Second Quarter 2019

(1)

Region

Revenue Growth / (Decline)

Expense

Growth / (Decline)

NOI Growth / (Decline)

% of Combined Same-Store

Portfolio(1)

Physical Occupancy(2)

Number of Homes(3)

West

(3.0)%

1.5%

(4.4)%

39.7%

95.6%

13,086

Mid-Atlantic

(0.9)%

2.5%

(2.3)%

23.6%

97.0%

10,762

Northeast

(6.6)%

4.7%

(11.4)%

13.7%

94.2%

4,080

Southeast

1.5%

9.6%

(2.0)%

11.2%

97.3%

7,428

Southwest

0.9%

(2.9)%

3.6%

7.1%

96.9%

5,136

Other Markets

(1.0)%

(1.5)%

(0.8)%

4.7%

96.4%

2,147

Total

(2.1)%

2.5%

(4.0)%

100.0%

96.3%

42,639

(1)

Based on Q2 2020 Combined Same-Store NOI.

(2)

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

(3)

During the second quarter, 42,639 apartment homes were classified as Combined Same-Store. The Company defines QTD Combined Same-Store Communities as those communities stabilized for five full consecutive quarters, including the 11 Joint Venture communities acquired in 2019 totaling 3,619 homes as if they were 100 percent owned by UDR during all periods presented. Combined Same-Store communities were owned and had stabilized physical 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.

2


In the second quarter, sequential Combined Same-Store NOI decreased 5.1 percent, driven by a Combined Same-Store revenue decline of 3.7 percent and a Combined Same-Store expense decline of 0.4 percent. Weighted average Combined Same-Store physical occupancy decreased by 70 basis points sequentially to 96.3 percent.

In the table below, the Company has provided components of revenue contribution that drove the year-over-year and sequential decreases in Combined Same-Store revenue. The decreases are a result of the following:

(1)

(1)

Year-Over-Year

Sequential

Revenue Components

Q2 2019

($ millions) (1)

Contribution to Growth / (Decline)(1)

Q1 2020

($ millions) (1)

Contribution to Growth / (Decline)(1)

Combined Same-Store Revenue

$271.1

$275.7

Gross Rents

$4.6

1.7%

$0.6

0.2%

Concessions

$(1.6)

(0.6)%

$(1.9)

(0.7)%

Economic Occupancy Loss

$(2.8)

(1.0)%

$(3.3)

(1.2)%

Bad Debt Reserve

$(4.5)

(1.7)%

$(4.5)

(1.6)%

Fee and Other Income

$(1.3)

(0.5)%

$(1.2)

(0.4)%

Q2 2020

$265.4

(2.1)%

$265.4

(3.7)%

(1)

Totals may not sum to $265.4 million, (2.1)% and (3.7)%, respectively, due to rounding.

Year-to-date, for the six months ended June 30, 2020, total revenue increased by $76.8 million year-over-year, or 13.9 percent, to $628.7 million. This increase was primarily attributable to growth in revenue from acquisition communities.

Year-to-date, for the six months ended June 30, 2020, Combined Same-Store NOI decreased (0.4) percent year-over-year, driven by Combined Same-Store revenue growth of 0.3 percent and Combined Same-Store expense growth of 2.1 percent. Weighted average Combined Same-Store physical occupancy decreased by 20 basis points to 96.6 percent versus the prior year period. The year-to-date annualized rate of turnover decreased by 310 basis points versus the prior year period to 43.7 percent.

Summary of Combined Same-Store Results Year-To-Date 2020 versus Year-To-Date 2019

(1)

Region

Revenue Growth / (Decline)

Expense

Growth / (Decline)

NOI Growth / (Decline)

% of Combined

Same-Store

Portfolio(1)

Physical Occupancy(2)

Number of Homes(3)

West

0.1%

2.5%

(0.6)%

39.4%

96.2%

12,545

Mid-Atlantic

0.8%

1.5%

0.5%

24.0%

97.1%

10,762

Northeast

(2.1)%

5.8%

(5.7)%

13.6%

95.5%

3,892

Southeast

1.8%

5.4%

0.4%

10.9%

97.0%

7,047

Southwest

2.4%

(4.0)%

7.0%

7.3%

97.0%

5,136

Other Markets

0.6%

(0.9)%

1.3%

4.8%

96.3%

2,147

Total

0.3%

2.1%

(0.4)%

100.0%

96.6%

41,529

(1)

Based on YTD 2020 Combined Same-Store NOI.

(2)

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

(3)

For the six months ended June 30, 2020, 41,529 apartment homes were classified as Combined Same-Store. The Company defines YTD Combined Same-Store Communities as those communities stabilized for two full consecutive calendar years, including the 11 Joint Venture communities acquired in 2019 totaling 3,619 homes as if they were 100 percent owned by UDR during all periods presented. Combined Same-Store communities were owned and had stabilized physical 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.

3


Recent Operating Trends

Due to economic challenges and related government actions and regulations as a result of COVID-19, the Company is providing a selection of operational trends through Q2 2020. Additionally, July cash revenue received as a percentage of billed revenue is consistent with April, May, and June at corresponding times of prior months.

Summary of Second Quarter Operational Trends(1)

Residential Operating Metric

Q2 2019

April 2020

May 2020

June 2020

Q2 2020

Total revenue billed ($ millions)

$277.8

$108.5

$106.9

$107.2

$322.6

Revenue recognized / reserved(2)

N/A

N/A

N/A

N/A

98.3% / 1.7%

Cash revenue collected (as % of billed)

99.6%

98.6%

97.6%

96.2%

97.5%

Leasing Traffic(3)

1,009

782

1,059

1,191

1,011

Visits or Qualified Leads(3)

28,821

3,949

7,040

11,395

22,384

Applications(3)

7,759

2,148

3,027

3,818

8,993

Lease Closing Ratio(3)

26.9%

54.4%

43.0%

33.5%

40.2%

Combined Same-Store Metrics

Weighted Average Physical Occupancy

96.9%

96.6%

96.1%

96.1%

96.3%

Effective Blended Lease Rate Growth(4)

4.4%

2.0%

0.7%

0.0%

0.8%

(1)

Metrics shown here are for the Company’s total portfolio, unless otherwise indicated, and are as of July 24, 2020.

(2)

As of June 30, 2020, the Company had collected 96.1% of Q2 2020 billed residential revenue. Of the 3.9% not collected, and based on probability of collection, the Company reserved (reflected as a reduction to revenue) approximately 1.7%, or $5.5 million, for bad debt, comprising $4.5 million from Combined Same-Store communities, $0.6 million from non-Combined Same-Store communities, and $0.4 million from the Company’s share from unconsolidated joint ventures.

(3)

The Company defines (a) Leasing Traffic as average daily leads; (b) Visits or Qualified Leads as the summation of tours taken by current and prospective residents, whether in-person (where allowed) or by virtual means, for the period indicated; (c) Applications as the total (or gross) number of applications received for the period indicated; and (d) Lease Closing Ratio as leases signed as a percentage of Visits.

(4)

The Company defines Effective Blended Lease Rate Growth as the combined proportional growth as a result of Effective New Lease Rate Growth (the increase in gross potential rent realized less concessions for the new lease term, or current effective rent, versus prior resident effective rent for the prior lease term on new leases commenced during the current quarter) and Effective Renewal Lease Rate Growth (the increase in gross potential rent realized less concessions for the new lease term, or current effective rent, versus prior effective rent for the prior lease term on renewed leases commenced during the current quarter).

Retail tenant income accounts for less than 2 percent of the Company’s consolidated NOI. During the second quarter, the Company collected 70.8 percent of billed retail revenue and reserved $3.5 million, including $0.1 million for UDR’s share from unconsolidated joint ventures, of its retail revenue based on probability of collection. Of the total retail reserve amount, $0.6 million is attributable to accounts receivable with the remainder attributable to straight-line rent receivables.

Wholly Owned Transactional Activity

As previously announced, during the quarter the Company:

Sold Waterscape, a 196-home community located in Kirkland, WA, for gross proceeds of $92.9 million, or $474,000 per home. At the time of sale, the 6-year-old community had a weighted average monthly revenue per occupied home of $2,476 and physical occupancy of 97 percent.
Sold Borgata Apartment Homes, a 71-home community located in Bellevue, WA, for $49.7 million, or $700,000 per home. At the time of sale, the 19-year-old community had a weighted average monthly revenue per occupied home of $3,301 and physical occupancy of 97 percent.

4


Development Activity

At the end of the second quarter, the Company’s development pipeline totaled $278.5 million, of which 47 percent of this cost had been incurred. The Company’s active pipeline includes 3 development communities, 1 each in Addison, TX, Denver, CO, and Dublin, CA, for a combined total of 878 homes. Leasing commenced at Vitruvian West Phase 2 (in Addison, TX) during the quarter.

Developer Capital Program (“DCP”) Activity

At the end of the second quarter, the Company’s DCP investments, including accrued return, totaled $419.6 million with a weighted average return rate of 9.8 percent and weighted average expected remaining term of 2.5 years.

Subsequent to quarter-end, the Company:

Invested $40.0 million into a 534-home multifamily development located in Queens, NY. The investment yields 13.0 percent on the Company’s capital outstanding with 5.0 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:

Executed a rate lock agreement to refinance its only remaining 2020 maturity, a $79.5 million, 4.35 percent fixed rate loan due in 2020, with a $160.9 million, 2.62 percent fixed rate secured loan due in 2031. The Company expects to close on the refinancing transaction during the third quarter of 2020. The incremental proceeds are anticipated to be used to reduce the Company’s borrowings under its unsecured commercial paper program.

Subsequent to quarter-end, the Company:

As previously announced, issued $400.0 million of unsecured debt at an effective interest rate of 2.11 percent with 12.0 years to maturity. A portion of the proceeds were / will be 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.
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.

At June 30, 2020, the Company had $973.7 million of liquidity through a combination of cash and undrawn capacity on its credit facilities, plus an approximate $105.0 million of incremental capital sources from the potential settlement of previously-announced forward equity sales agreements. Please see Attachment 15 of the Company’s second quarter Supplemental Financial Information for additional details on projected capital sources and uses.

The Company’s total indebtedness as of June 30, 2020 was $4.8 billion and, after completion of the aforementioned secured debt refinancing, the Company will have 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 94.4 percent of its total debt, a total blended interest rate of 3.24 percent and a weighted average years to maturity of 7.0 years. The Company’s consolidated leverage was 34.2 percent versus 32.1 percent a year ago, its consolidated net-debt-to-EBITDAre was 6.2x versus 5.4x a year ago and its consolidated fixed charge coverage ratio was 4.6x versus 4.9x a year ago.

5


Dividend

As previously announced, the Company’s Board of Directors declared a regular quarterly dividend on its common stock for the second quarter of 2020 in the amount of $0.36 per share. The dividend will be paid in cash on July 31, 2020 to UDR common stock shareholders of record as of July 10, 2020. The second quarter 2020 dividend will represent the 191st 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 1:00 p.m. Eastern Time on July 29, 2020 to discuss second 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 August 28, 2020, by dialing 844-512-2921 for domestic and 412-317-6671 for international and entering the confirmation number, 13706590, 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 June 30, 2020, UDR owned or had an ownership position in 51,320 apartment homes including 819 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 Second Quarter 2020

(Unaudited) (1)

Actual Results

Actual Results

Dollars in thousands, except per share and unit

2Q 2020

YTD 2020

GAAP Metrics

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

$57,771

$62,992

Net income/(loss) attributable to common stockholders

$56,709

$60,864

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

$0.19

$0.21

Per Share Metrics

FFO per common share and unit, diluted

$0.51

$1.04

FFO as Adjusted per common share and unit, diluted

$0.51

$1.05

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

$0.47

$0.98

Dividend declared per share and unit

$0.36

$0.72

Combined Same-Store Operating Metrics (4)

Combined Revenue growth

-2.1%

0.3%

Combined Expense growth

2.5%

2.1%

Combined NOI growth

-4.0%

-0.4%

Combined Physical Occupancy

96.3%

96.6%

Property Metrics

Homes

Communities

% of Total NOI

Combined Same-Store (4)

42,639

136

83.7%

Acquired JV Same-Store Portfolio (4)

(3,619)

(11)

-7.1%

UDR Same-Store

39,020

125

76.6%

Stabilized, Non-Mature

4,021

10

8.8%

Acquired JV Same-Store Portfolio (4)

3,619

11

7.1%

Redevelopment

652

2

2.0%

Development, completed

59

-

0.0%

Non-Residential / Other

N/A

N/A

0.6%

Joint Venture (includes completed Joint Venture developments) (2)

3,130

14

4.9%

Total completed homes

50,501

162

100%

Under Development

819

3

-

Total Quarter-end homes (2)(3)

51,320

165

100%

Balance Sheet Metrics (adjusted for non-recurring items)

2Q 2020

2Q 2019

Consolidated Interest Coverage Ratio

4.7x

5.0x

Consolidated Fixed Charge Coverage Ratio

4.6x

4.9x

Consolidated Debt as a percentage of Total Assets

34.2%

32.1%

Consolidated Net Debt-to-EBITDAre

6.2x

5.4x

Graphic


(1)See Attachment 16 for definitions and other terms.
(2)Joint venture NOI is based on UDR's share. Homes and communities at 100%.
(3)Excludes 2,483 homes that are part of the Developer Capital Program as described in Attachment 12(B).
(4)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.

1


Graphic

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

2020

2019

2020

2019

REVENUES:

Rental income (2)

$

305,982

$

278,463

$

626,075

$

546,385

Joint venture management and other fees

1,274

2,845

2,662

5,596

Total revenues

307,256

281,308

628,737

551,981

OPERATING EXPENSES:

Property operating and maintenance

48,717

42,894

98,200

84,833

Real estate taxes and insurance

45,012

35,834

90,157

72,134

Property management

8,797

8,006

18,000

15,709

Other operating expenses

6,100

2,735

11,066

8,381

Real estate depreciation and amortization

155,056

117,934

310,532

230,402

General and administrative

10,971

12,338

25,949

24,805

Casualty-related charges/(recoveries), net

102

246

1,353

246

Other depreciation and amortization

2,027

1,678

4,052

3,334

Total operating expenses

276,782

221,665

559,309

439,844

Gain/(loss) on sale of real estate owned

61,303

5,282

61,303

5,282

Operating income

91,777

64,925

130,731

117,419

Income/(loss) from unconsolidated entities (2)

8,021

6,625

11,388

6,674

Interest expense

(38,597)

(34,417)

(77,914)

(67,959)

Interest income and other income/(expense), net

2,421

1,310

5,121

11,123

Income/(loss) before income taxes

63,622

38,443

69,326

67,257

Tax (provision)/benefit, net

(1,526)

(125)

(1,690)

(2,337)

Net Income/(loss)

62,096

38,318

67,636

64,920

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

(4,291)

(2,652)

(4,604)

(4,709)

Net (income)/loss attributable to noncontrolling interests

(34)

(47)

(40)

(89)

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

57,771

35,619

62,992

60,122

Distributions to preferred stockholders - Series E (Convertible)

(1,062)

(1,031)

(2,128)

(2,042)

Net income/(loss) attributable to common stockholders

$

56,709

$

34,588

$

60,864

$

58,080

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

$0.19

$0.12

$0.21

$0.21

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

$0.19

$0.12

$0.21

$0.21

Common distributions declared per share

$0.3600

$0.3425

$0.7200

$0.6850

Weighted average number of common shares outstanding - basic

294,710

281,960

294,584

279,494

Weighted average number of common shares outstanding - diluted

295,087

282,575

295,083

280,081


(1)See Attachment 16 for definitions and other terms.
(2)During the three months ended June 30, 2020, UDR collected 96.1% of billed residential revenue and 70.8% of billed retail revenue. Of the 3.9% and 29.2% not collected, UDR reserved (reflected as a reduction to revenues) approximately 1.7% or $5.5 million for residential, including $0.4 million for UDR’s share from unconsolidated joint ventures, and 163.6% or $3.5 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

Six Months Ended

June 30,

June 30,

In thousands, except per share and unit amounts

2020

2019

2020

2019

Net income/(loss) attributable to common stockholders

$

56,709

$

34,588

$

60,864

$

58,080

Real estate depreciation and amortization

155,056

117,934

310,532

230,402

Noncontrolling interests

4,325

2,699

4,644

4,798

Real estate depreciation and amortization on unconsolidated joint ventures

8,745

15,211

17,561

30,885

Net gain on the sale of unconsolidated depreciable property

-

(5,251)

-

(5,251)

Net gain on the sale of depreciable real estate owned

(61,303)

-

(61,303)

-

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

$

163,532

$

165,181

$

332,298

$

318,914

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

1,062

1,031

2,128

2,042

FFO attributable to common stockholders and unitholders, diluted

$

164,594

$

166,212

$

334,426

$

320,956

FFO per weighted average common share and unit, basic

$

0.52

$

0.54

$

1.05

$

1.05

FFO per weighted average common share and unit, diluted

$

0.51

$

0.54

$

1.04

$

1.05

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

317,096

304,696

316,891

302,998

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

equivalents outstanding - diluted

320,426

308,322

320,372

306,596

Impact of adjustments to FFO:

Promoted interest on settlement of note receivable, net of tax

$

-

$

-

$

-

$

(6,482)

Legal and other costs

1,586

-

2,344

3,660

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

-

(5,282)

-

(5,282)

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

(3,334)

-

(3,302)

(229)

Severance costs and other restructuring expense

-

-

1,642

-

Casualty-related charges/(recoveries), net

249

246

1,648

261

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

-

81

31

227

$

(1,499)

$

(4,955)

$

2,363

$

(7,845)

FFO as Adjusted attributable to common stockholders and unitholders, diluted

$

163,095

$

161,257

$

336,789

$

313,111

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

$

0.51

$

0.52

$

1.05

$

1.02

Recurring capital expenditures

(12,504)

(12,750)

(21,713)

(19,968)

AFFO attributable to common stockholders and unitholders, diluted

$

150,591

$

148,507

$

315,076

$

293,143

AFFO per weighted average common share and unit, diluted

$

0.47

$

0.48

$

0.98

$

0.96


(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, 2020 and June 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.

3


Graphic

Attachment 3

UDR, Inc.

Consolidated Balance Sheets

(Unaudited) (1)

June 30,

December 31,

In thousands, except share and per share amounts

2020

2019

ASSETS

Real estate owned:

Real estate held for investment

$

12,643,851

$

12,532,324

Less: accumulated depreciation

(4,372,321)

(4,131,330)

Real estate held for investment, net

8,271,530

8,400,994

Real estate under development

(net of accumulated depreciation of $203 and $23)

131,585

69,754

Total real estate owned, net of accumulated depreciation

8,403,115

8,470,748

Cash and cash equivalents

833

8,106

Restricted cash

22,043

25,185

Notes receivable, net

155,956

153,650

Investment in and advances to unconsolidated joint ventures, net

598,058

588,262

Operating lease right-of-use assets

202,586

204,225

Other assets

181,880

186,296

Total assets

$

9,564,471

$

9,636,472

LIABILITIES AND EQUITY

Liabilities:

Secured debt

$

1,112,870

$

1,149,441

Unsecured debt

3,653,934

3,558,083

Operating lease liabilities

197,092

198,558

Real estate taxes payable

31,952

29,445

Accrued interest payable

47,087

45,199

Security deposits and prepaid rent

45,607

48,353

Distributions payable

115,254

109,382

Accounts payable, accrued expenses, and other liabilities

111,264

90,032

Total liabilities

5,315,060

5,228,493

Redeemable noncontrolling interests in the OP and DownREIT Partnership

834,466

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

14,452,717 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

295,067,779 shares issued and outstanding (294,588,305 shares at December 31, 2019)

2,951

2,946

Additional paid-in capital

5,794,428

5,781,975

Distributions in excess of net income

(2,432,882)

(2,462,132)

Accumulated other comprehensive income/(loss), net

(11,940)

(10,448)

Total stockholders' equity

3,397,322

3,358,542

Noncontrolling interests

17,623

30,772

Total equity

3,414,945

3,389,314

Total liabilities and equity

$

9,564,471

$

9,636,472


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

4


Graphic

Attachment 4(A)

UDR, Inc.

Selected Financial Information

(Unaudited) (1)

June 30,

December 31,

Common Stock and Equivalents

2020

2019

Common shares

294,807,144

294,340,740

Restricted shares

260,635

247,565

Total common shares

295,067,779

294,588,305

Restricted unit and common stock equivalents

168,914

766,926

Operating and DownREIT Partnership units

20,572,201

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

320,478,692

320,179,028

Weighted Average Number of Shares Outstanding

2Q 2020

2Q 2019

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

317,096,319

304,695,905

Weighted average number of OP/DownREIT units outstanding

(22,386,642)

(22,736,366)

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

294,709,677

281,959,539

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

320,425,840

308,322,431

Weighted average number of OP/DownREIT units outstanding

(22,386,642)

(22,736,366)

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

(2,952,768)

(3,010,843)

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

295,086,430

282,575,222

Year-to-Date 2020

Year-to-Date 2019

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

316,890,705

302,998,559

Weighted average number of OP/DownREIT units outstanding

(22,307,263)

(23,504,227)

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

294,583,442

279,494,332

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

320,371,665

306,596,164

Weighted average number of OP/DownREIT units outstanding

(22,307,263)

(23,504,227)

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

(2,981,806)

(3,010,843)

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

295,082,596

280,081,094


(1)See Attachment 16 for definitions and other terms.
(2)At June 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 six months ended June 30, 2020 and June 30, 2019.

5


Graphic

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

$

1,057,839

22.2%

3.85%

5.2

Floating

27,000

0.6%

0.85%

11.7

Combined

1,084,839

22.8%

3.77%

5.4

Unsecured

Fixed

3,430,644

(3)

72.2%

3.44%

7.9

Floating

237,180

5.0%

0.58%

0.6

Combined

3,667,824

77.2%

3.26%

7.4

Total Debt

Fixed

4,488,483

94.4%

3.54%

7.3

Floating

264,180

5.6%

0.61%

1.7

Combined

4,752,663

100.0%