RICHMOND, Va.--(BUSINESS WIRE)--April 28, 2003--United Dominion
Realty Trust, Inc. (NYSE symbol: UDR) today reported Funds From
Operations ("FFO") of $49.1 million, or $0.38 per diluted share, for
the quarter ended March 31, 2003, compared to FFO of $35.3 million, or
$0.28 per diluted share, for the comparable period a year ago, which
included $15.8 million in prepayment penalties on the early
extinguishment of debt.
Excluding these prepayment penalties, FFO for the first quarter of
2002 would have been $51.1 million, or $0.41 per share. FFO is
reported on a fully diluted basis.
"The first quarter was one in which we continued to improve the
quality of our earnings, assets and balance sheet flexibility. The
operating results are in line with Wall Street's expectation and our
own. We are delivering consistent revenues which have not declined for
the last 10 months, but remain cautious, not withstanding the early
signs of recovery in the multifamily business, based on reduced
concessions and sustained occupancies," stated Thomas W. Toomey,
President and Chief Executive Officer.
Highlights from the First Quarter
-- FFO in line with Wall Street consensus estimates
-- Issued $150 Million in unsecured debt at 4.5%, maturing in
2008
-- First Multifamily REIT to be included in S&P MidCap 400 Index
-- Sold 2.0 million shares of common stock for net proceeds of
$31.2 million
-- Obtained a new $500 million unsecured revolving credit
facility
-- Sold $12.2 million of assets
Portfolio Operating Performance and Same Community Results
During the first quarter, 68,729 apartment homes, or 92.5% of
total apartment homes, were classified as Same Community. The Company
defines Same Community as stabilized apartment communities owned for
at least four full quarters.
Same Community Results ($ in thousands, except monthly rent)
----------------------------------------------------------------------
1st Qtr 1st Qtr
'03 '02 % Change
---------------------------------------
Gross potential rent $144,941$147,720 -1.9%
Net rental & other income 139,207 142,245 -2.1%
Expenses 52,978 51,918 2.0%
Net operating income 86,229 90,327 -4.5%
Avg. monthly rent per home $703$716 -1.9%
Avg. monthly rent per SF 0.79 0.81 -1.9%
Avg. physical occupancy 93.5% 93.5% 0.0%
Operating margin 61.9% 63.5% -1.6%
Resident credit loss, % of
gross potential rent 0.5% 0.2% 0.3%
Rent concessions, % of gross
potential rent 2.9% 2.7% 0.2%
Annualized resident turnover
rate 58.2% 64.2% -6.0%
On a quarter-over-quarter basis, first quarter 2003 Same Community
Net Operating Income ("NOI") growth of negative 4.5% was the result of
a 2.1% decrease in revenues from rental and other income and a 2.0%
increase in operating expenses.
Same Communities represent 57 markets, of which 15 markets, or
26%, generated positive Same Community NOI growth first quarter 2003
over first quarter 2002.
Same Community Results ($ in thousands, except monthly rent)
----------------------------------------------------------------------
1st Qtr 4th Qtr
'03 '02 % Change
------------------------------------
Gross potential rent $144,941$146,196 -0.9%
Net rental & other income 139,207 140,587 -1.0%
Expenses 52,978 52,292 1.3%
Net operating income 86,229 88,295 -2.3%
Avg. monthly rent per home $703$709 -0.9%
Avg. monthly rent per SF 0.79 0.80 -0.9%
Avg. physical occupancy 93.5% 93.3% 0.2%
Operating margin 61.9% 62.8% -0.9%
Resident credit loss, % of gross
potential rent 0.5% 0.7% -0.2%
Rent concessions, % of gross
potential rent 2.9% 3.1% -0.2%
Annualized resident turnover rate 58.2% 61.3% -3.1%
Sequentially comparing first quarter 2003 to the fourth quarter
2002, Same Community NOI decreased by 2.3% due to a 1.0% decrease in
rental and other income and expenses increasing 1.3%.
Same Communities represent 57 markets, of which 24 markets, or
42%, generated positive Same Community NOI growth first quarter 2003
over fourth quarter 2002.
Financing Activities
In January, the Company issued 2 million shares of common stock
for net proceeds of $31.2 million at a net price per share of $15.62.
The proceeds were used to repay debt and for general corporate
purposes.
In February, we issued $150 million of 4.50% senior unsecured
medium-term notes that will mature in March 2008. The net proceeds
were used to repay amounts outstanding on our unsecured revolving
credit facility.
In March, the Company obtained a new $500 million unsecured
revolving credit facility. The facility replaces a $375 million
unsecured revolver and $100 million unsecured term loan. The pricing
was improved by 25 and 30 basis points, respectively. The new facility
matures in March 2006 and can be extended at the Company's option for
an additional one year.
During the first quarter, $107 million of unsecured debt matured
with a weighted average interest rate of 8.34%. These maturities were
repaid from our unsecured credit facility.
Portfolio Repositioning
On February 11, 2003, the Company sold a 17-year-old apartment
community with 220 apartment homes in Phoenix, Arizona, for a Sale
Price of $10.2 million. A gain of approximately $1 million was
realized on this sale. The sale price was on a cap rate of 7.7% using
trailing twelve month Net Operating Income less a capital expenditure
reserve of $435 per unit. The occupancy of the property was 87.3% with
average rent per home of $641 or $0.78 per square foot.
Earnings Guidance
Management continues to provide written earnings guidance in order
to improve communications with its shareholders and the investment
community.
The 12 analysts that report to First Call have earnings estimates
for 2003 that range from $1.47 to $1.57 per share. The Company
believes that FFO results for 2003 will be affected by international,
national and regional economic trends and events, the acquisition
and/or disposition of apartment communities and other factors. Given
current expectations and judgment, management's FFO estimates for 2003
remain unchanged from our previous guidance of $1.51 to $1.59 per
share.
Management estimates that recurring capital expenditures for 2003
will be $435 per apartment home, or $0.25 per share.
Supplemental Information
UDR provides Quarterly Supplemental Information with details
regarding the Company's activities during the period. The information
is available on the UDR website at: http://www.udrt.com/1Q2003
Conference Call Information
Date: April 29, 2003
Time: 1:00 pm Eastern Time
To Participate in the Telephone Conference Call:
Dial in at least five minutes prior to start time.
Domestic: 800-218-0204
International: 303-262-2130
If you have any questions, please contact: Elyse Fischler
Phone: 312-640-6786
E-mail: efischler@webershandwick.com
Conference Call Playback:
Domestic: 800-405-2236
International: 303-590-3000
Passcode: 527811
The playback can be accessed until May 5, 2003 at midnight.
Webcast:
The conference call will also be available on UDR's website at
www.udrt.com and at www.ccbn.com. To listen to a live broadcast, go to
one of these sites at least 15 minutes prior to the scheduled start
time in order to register, download, and install any necessary audio
software. A replay will also be available for 90 days on UDR's website
and also on ccbn's website.
About United Dominion Realty Trust, Inc.
United Dominion is the fourth largest apartment REIT, owning and
operating apartment communities nationwide. The Company has a thirty
one-year history during which it has raised the dividend each of the
last twenty-seven years. United Dominion is included in the S&P MidCap
400 Index. The Company currently owns 74,262 apartment homes and is
the developer of 1,120 homes currently under development. United
Dominion's common stock is traded on the New York Stock Exchange under
the symbol UDR. Additional information about United Dominion may be
found on its web site at www.udrt.com.
Statements contained in this press release, which are not
historical facts, are forward-looking statements, as the term is
defined in the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risks and uncertainties
which can cause actual results to differ materially from those
currently anticipated, due to a number of factors, which include, but
are not limited to, unfavorable changes in the apartment market,
changing economic conditions, acquisitions or new developments may not
achieve anticipated results, difficulties in selling existing
apartment communities, 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. The statements in this
press release are made as of today, based upon information currently
known to management, and the company disclaims any duty to update such
statements.
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
-------------------
In thousands, except per share amounts 2003 2002
----------------------------------------------------------
Rental income $151,418$145,676
Rental expenses:
Real estate taxes and
insurance 17,486 16,483
Personnel 15,397 14,494
Utilities 9,494 8,639
Repairs and maintenance 9,635 8,478
Administrative and marketing 5,570 5,435
Property management 4,178 4,362
Other operating expenses 294 333
--------- ---------
62,054 58,224
Other income:
Non-property income 202 347
Other expenses:
Real estate depreciation 39,305 35,630
Interest 31,507 31,613
(Gain)/loss on early debt
retirement (182) 15,814
General and administrative 5,449 7,621
Other depreciation and
amortization 760 1,062
--------- ---------
76,839 91,740
Income/(loss) before gains on sales of
investments, minority interests,
and discontinued operations 12,727 (3,941)
Gains on sales of land and depreciable
property - 1,201
--------- ---------
Income/(loss) before minority
interests and discontinued operations 12,727 (2,740)
Minority interests of outside
partnerships (375) (454)
Minority interests of unitholders in
operating partnerships (367) 640
--------- ---------
Income/(loss) before discontinued
operations 11,985 (2,554)
Income from discontinued operations,
net of minority interests/A 1,456 891
--------- ---------
Net income/(loss) 13,441 (1,663)
Distributions to preferred
shareholders - Series A and B (2,911) (2,911)
Distributions to preferred shareholders
- Series D (Convertible) (4,036) (3,964)
--------- ---------
Net income/(loss) available to common
shareholders $6,494 $(8,538)
========= =========
Earnings/(loss) per common share -
basic and diluted:
Income/(loss) before
discontinued operations, net of
minority interests $0.05 ($0.09)
Income from discontinued
operations, net of minority
interests $0.01$0.01
Net income/(loss) available to
common shareholders $0.06 ($0.08)
Common distributions declared per
share $0.2850 $0.2775
Weighted average number of common
shares outstanding-basic 107,698 103,654
Weighted average number of common
shares outstanding-diluted 108,590 103,654
/A: Discontinued operations represents all properties sold since
January 1, 2002 and properties that are currently classified as held
for disposition at March 31, 2003.
UNITED DOMINION REALTY TRUST, INC.
FUNDS FROM OPERATIONS
(Unaudited)
Three Months
Ended
March 31,
-----------------
In thousands, except per share amounts 2003 2002
-------------------------------------------------------------
Net income (loss) $13,441 $(1,663)
Adjustments:
Distributions to preferred
shareholders (6,947) (6,875)
Real estate depreciation, net of
outside partners' interest 39,108 35,239
Minority interests of unitholders
in operating partnership 367 (640)
Real estate depreciation related to
unconsolidated entities 33 183
Gains on sales of depreciable
property, net of outside partners'
interest - (1,201)
Discontinued Operations:
Real estate depreciation - 3,656
Minority interests of unitholders
in operating partnership 94 61
Impairment loss on real estate - 2,301
(Gains)/losses on sales of
depreciable property (1,045) 283
-------- --------
Funds from operations ("FFO") -
basic $45,051$31,344
======== ========
Adjustment:
Distribution to preferred
shareholders - Series D
(Convertible) $ 4,036$ 3,964
-------- --------
Funds from operations - diluted $49,087$35,308
======== ========
Adjustment:
Recurring capital expenditures $(7,969) $(8,133)
-------- --------
Adjusted funds from operations
("AFFO") - diluted $41,118$27,175
======== ========
Weighted average number of common shares
and OP Units outstanding - basic 114,659 111,006
Weighted average number of common shares,
OP Units, and common stock equivalents
outstanding - diluted 129,420 124,977
FFO per common share-basic $ 0.39$ 0.28
======== ========
FFO per common share-diluted $ 0.38$ 0.28
======== ========
FFO is defined as net income (computed in accordance with GAAP),
excluding gains (or losses) from sales of depreciable property, plus
depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. This definition
conforms with the National Association of Real Estate Investment
Trust's definition issued in October, 1999 which became effective
beginning January 1, 2000. In July of 2000, the Best Financial
Practices Council of NAREIT further concluded that impairment write
downs associated with depreciable operating property should be added
back to GAAP net income to arrive at FFO. United Dominion considers
FFO in evaluating property acquisitions and its operating perfomance
and believes that FFO should be considered along with, but not as an
alternative to, net income and cash flows as a measure of United
Dominion's activities in accordance with generally accepted accounting
principles and is not necessarily indicative of cash available to fund
cash needs.
AFFO is defined as FFO less recurring capital expenditures for our
stabilized portfolio at $435 per home in 2003 and $425 per home in
2002.
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, Dec. 31,
In thousands, except per share amounts 2003 2002
----------------------------------------------------------------------
ASSETS
Real estate owned:
Real estate held for investment $3,909,588$3,908,746
Less: accumulated depreciation (784,139) (742,876)
------------------ -----------
3,125,449 3,165,870
Real estate under development 35,662 30,624
Real estate held for disposition
(net of accumulated depreciation
of $437 and $5,857) 25,389 22,256
------------------ -----------
Total real estate owned, net of
accumulated depreciation 3,186,500 3,218,750
Cash and cash equivalents 4,513 3,152
Restricted cash 10,798 11,773
Deferred financing costs, net 21,586 17,548
Other assets 27,824 24,870
Real estate held for disposition
assets 25 43
------------------ -----------
Total assets $3,251,246$3,276,136
================== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Secured debt $1,008,779$1,015,740
Unsecured debt 1,026,544 1,041,900
Real estate taxes payable 17,048 29,743
Accrued interest payable 14,337 11,908
Security deposits and prepaid rent 20,792 21,379
Distributions payable 36,700 35,141
Accounts payable, accrued expenses,
and other liabilities 43,770 49,634
Real estate held for disposition
liabilities 127 204
------------------ -----------
Total liabilities 2,168,097 2,205,649
Minority interests 67,911 69,216
Shareholders' equity
Preferred stock, no par value; $25
liquidation preference,
25,000,000 shares authorized;
5,416,009 shares 8.60% Series B
Cumulative Redeemable issued and
outstanding (5,416,009 shares in 2002) 135,400 135,400
8,000,000 shares 7.50% Series D
Cumulative Convertible Redeemable
issued and outstanding (8,000,000
shares in 2002) 175,000 175,000
Common stock, $1 par value;
150,000,000 shares authorized
109,028,102 shares issued and
outstanding (106,605,259 shares
in 2002) 109,028 106,605
Additional paid-in capital 1,175,356 1,140,786
Distributions in excess of net
income (566,024) (541,428)
Deferred compensation - unearned
restricted stock awards (4,098) (2,504)
Notes receivable from officer-
shareholders (2,539) (2,630)
Accumulated other comprehensive
loss, net (6,885)/A (9,958)/A
------------------ -----------
Total shareholders' equity 1,015,238 1,001,271
------------------ -----------
Total liabilities and shareholders'
equity $3,251,246$3,276,136
================== ===========
/A: Represents net unrealized loss on derivative instrument
transactions.
CONTACT: United Dominion Realty Trust, Inc.Ella Neyland, 720/283-6144; ir@udrt.com;
www.udrt.com
SOURCE: United Dominion Realty Trust, Inc.