RICHMOND, Va.--(BUSINESS WIRE)--April 19, 2004--United Dominion
Realty Trust, Inc. (NYSE:UDR) today reported Funds From Operations
("FFO") of $54.8 million, or $0.38 per share (diluted), for the
quarter ended March 31, 2004. This compares to FFO of $49.1 million,
or $0.38 per share (diluted), for the same period a year ago. FFO is
reported on a fully diluted basis.
"The realization of an economic recovery and its positive impact
on our company is visible in our sequential revenue trends, where 71%
of our markets have delivered improving revenues, and in our FFO per
share, where we delivered sequential growth of a penny," stated Thomas
W. Toomey, President and Chief Executive Officer.
Highlights from the First Quarter
-- FFO exceeds Wall Street consensus estimates by $0.01 per share
-- Acquired four apartment communities for $105 million
-- Sold one apartment community for $12.8 million
-- Issued $125 million of 5.13% senior unsecured notes due 2014
-- Issued $50 million of 3.90% senior unsecured notes due 2010
Portfolio Operating Performance and Same Community Results
During the first quarter, 69,620 apartment homes, or 90% of total
apartment homes, were classified as Same Community. The Company
defines Same Community as all multifamily communities owned and
stabilized for at least one year as of the beginning of the most
recent quarter.
Same Community Results, Year/Year
($ in thousands, except monthly collections)
1st Qtr 1st Qtr
'04 '03 % Change
--------------------------
Rent and other income $146,702 148,116 -1.0%
Concessions 3,913 4,357 -10.2%
Bad debt 461 617 -25.2%
Total income 142,328 143,142 -0.6%
Expenses 56,028 53,995 3.8%
Net operating income 86,300 89,147 -3.2%
Avg. monthly collections per occupied home $700 $709 -1.3%
Avg. physical occupancy 93.1% 93.3% -20 bps
Operating margin 60.6% 62.3% -170 bps
Annualized resident turnover rate 56.1% 57.4% -130 bps
Resident credit loss, % of effective rent 0.3% 0.4% -10 bps
On a quarter-over-quarter basis, first quarter 2004 Same Community
Net Operating Income ("NOI") declined 3.2% as a result of a 0.6%
decrease in revenues from rental and other income and a 3.8% increase
in operating expenses.
Same Community represents 52 markets, of which 22 markets, or 42%,
generated positive Same Community NOI growth first quarter 2004
compared to first quarter 2003.
Same Community Results, Quarter/Quarter
($ in thousands, except monthly collections)
1st Qtr 4th Qtr
'04 '03 % Change
---------------------------
Rent and other income $146,702 $146,372 0.2%
Concessions 3,913 4,230 -7.5%
Bad debt 461 778 -40.8%
Total income 142,328 141,364 0.7%
Expenses 56,028 54,365 3.1%
Net operating income 86,300 86,999 -0.8%
Avg. monthly collections per occupied home $700 $700 -
Avg. physical occupancy 93.1% 92.9% 20 bps
Operating margin 60.6% 61.5% -90 bps
Annualized resident turnover rate 56.1% 60.7% -460 bps
Resident credit loss, % of effective rent 0.3% 0.5% -20 bps
Sequentially, comparing first quarter 2004 to fourth quarter 2003,
Same Community NOI declined 0.8% due to a 0.7% increase in rental and
other income offset by a 3.1% increase in expenses.
Same Community represents 52 markets, of which 30 markets, or 58%,
generated positive Same Community NOI growth first quarter 2004 over
fourth quarter 2003.
Portfolio Repositioning
During the first quarter, the Company acquired 1,115 apartment
homes for a total purchase price of $105 million (averaging $94,200
per home.) These properties were acquired at an average cap rate of
7.0% using forward twelve months of operations and a reserve for
capital expenditures that ranged from $450 to $470 per home, depending
on the community.
The Company sold one community in Pacific Grove, California, for
$12.8 million (averaging $128,350 per home) at a cap rate of 4.9%
using trailing twelve months of operations less an actual capital
expenditure reserve of $464 per home and a management fee of 2.75%.
The community was 87% occupied at closing and is 39 years old. For
more details on our acquisitions and disposition, see our press
release dated April 5, 2004.
"The cap rates at which we purchased our Plano, Texas, and
Baltimore, Maryland, properties during the first quarter were very
favorable. Further, all four properties are located in our core
markets, where we have operational efficiencies. Going forward, we
continue to find available communities to buy at prices at or below
replacement costs, and we are on track for our goal of $500 million in
acquisitions this year," stated Mark Wallis, Senior Executive Vice
President.
Financing Activities
In January, the Company issued $75 million of 5.13% senior
unsecured medium-term notes at a spread of 112 basis points that
mature January 2014. In March, we issued an additional $50 million
tranche of the 5.13% notes at a spread of 105 basis points. These two
issues, combined with our $75 million issuance last October,
constitute a single series of notes, bringing the aggregate principal
amount outstanding of the 5.13% senior unsecured medium-term notes to
$200 million.
Additionally in March, we issued $50 million of 3.90% senior
unsecured medium-term notes at a spread of 105 basis points that
mature March 2010.
"The issuance of these notes not only funded our acquisition
pipeline but reduced the outstanding balance on our line of credit,
thereby terming out some of that debt. This brings our variable rate
debt at the end of the quarter to 25%, which is the range of the
guidance we previously provided," stated Ella S. Neyland, Executive
Vice President and Treasurer.
Earnings Guidance
The Company believes that financial results for 2004 will be
affected by international, national and regional economic trends and
events, the acquisition and/or disposition of apartment communities
and other factors. Management estimates that recurring capital
expenditures for 2004 will be $470 per apartment home, or $0.25 per
share. Given current expectations and judgment, the Company has
narrowed the range of guidance for 2004 FFO to a range of $1.50 to
$1.58 per share (diluted) from a range of $1.48 to $1.60 per share
(diluted). The Company's guidance for second quarter 2004 FFO ranges
from $.39 to $.40 per share (diluted). Detailed assumptions for the
Company's guidance can be found on our website at www.udrt.com.
A reconciliation of the range provided for 2004 FFO per share to
Earnings Per Share ("EPS") for the full year is as follows:
High Low
Range Range
--------------
2004 Funds From Operations $1.58 - $1.50
Conversion to GAAP Share Count (A) 0.21 - 0.20
Minority Interest of OP Unit Holders (A) (0.01)- (0.04)
Depreciation (B) (1.44)- (1.38)
Gains (B) 0.10 - 0.55
Preferred Dividends (0.07)- (0.07)
Premium on Preferred Share Repurchases (0.05)- (0.05)
------ ------
Expected Earnings Per Share $0.32 - $0.71
====== ======
(A) Operating Partnership units are not considered to be common
stock equivalents for GAAP purposes.
(B) Due to the uncertain timing and extent of property
dispositions and acquisitions, actual results could differ materially
from expected EPS.
Supplemental Information
The Company provides Supplemental Information that provides
information regarding the financial position and operating results of
the Company. This Supplemental Information is available on the
Company's website at: http://www.udrt.com/1Q2004.
Conference Call Information
Date: April 20, 2004
Time: 1:00 p.m. Eastern Time
To Participate in the Telephone Conference Call:
Dial in at least five minutes prior to start time.
To Participate in the Telephone Conference Call:
Domestic: 800-218-0530
International: 303-262-2125
If you have any questions, please contact: Karen Droba
Phone: 312-640-6770
E-mail: kdroba@financialrelationsboard.com
Conference Call Playback:
Domestic: 800-405-2236
International: 303-590-3000
Passcode: 572869
The playback can be accessed until April 27, 2004 at midnight EST.
Webcast
The conference call will also be available on UDR's website at
www.udrt.com and at www.fulldisclosure.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 32-year
history during which it has raised the dividend each of the last 28
years. United Dominion is included in the S&P MidCap 400 Index. The
Company currently owns 77,259 apartment homes and has 1,311 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 website 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. You
can identify these forward-looking statements by the Company's use of
words such as "expects," "plans," "estimates," "projects," "intends,"
believes," and similar expressions that do not relate to historical
matters. 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, the impact of competition and
competitive pricing, acquisitions or new developments may not achieve
anticipated results, delays in completing developments and lease-ups
on schedule, 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. All forward-looking statements in this
press release are made as of today, based upon information known to
management as of the date hereof, and the Company assumes no
obligation to update or revise any of its forward-looking statements
even if experience or future changes show that indicated results or
events will not be realized.
Attachment 1
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
-------------------
In thousands, except per share amounts 2004 2003
------------------------------------------------------------------
Rental income $154,874 $144,800
Rental expenses:
Real estate taxes and insurance 18,963 16,777
Personnel 16,324 14,628
Utilities 10,216 8,791
Repair and maintenance 9,297 9,062
Administrative and marketing 5,568 5,279
Property management 4,361 4,178
Other operating expenses 270 294
--------- ---------
64,999 59,009
Non-property income 395 202
Other expenses:
Real estate depreciation and
amortization 41,926 37,646
Interest 28,905 31,330
General and administrative 4,754 5,449
Other depreciation and amortization 941 749
--------- ---------
76,526 75,174
Income before minority interests and
discontinued operations 13,744 10,819
Minority interests of outside partnerships (64) (375)
Minority interests of unitholders in operating
partnerships (460) (251)
--------- ---------
Income before discontinued operations, net of
minority interests 13,220 10,193
Income from discontinued operations, net of
minority interests (including gain on sales)
(A) 2,092 3,248
--------- ---------
Net income 15,312 13,441
Distributions to preferred stockholders -
Series B (2,911) (2,911)
Distributions to preferred stockholders -
Series D (Convertible) (1,036) (4,036)
Distributions to preferred stockholders -
Series E (Convertible) (1,138) -
Premium on preferred share repurchases (1,562) -
--------- ---------
Net income available to common stockholders $8,665 $6,494
========= =========
Earnings per common share - basic and diluted:
Income from continuing operations
available to common stockholders, net of
minority interests $0.05 $0.03
Income from discontinued operations, net
of minority interests $0.02 $0.03
Net income available to common
stockholders $0.07 $0.06
Common distributions declared per share $0.2925 $0.2850
Weighted average number of common shares
outstanding - basic 126,984 107,698
Weighted average number of common shares
outstanding - diluted 127,953 108,590
(A) Discontinued operations represents all properties sold since
January 1, 2002 and properties that are currently classified as
held for disposition at March 31, 2004.
Attachment 2
UNITED DOMINION REALTY TRUST, INC.
FUNDS FROM OPERATIONS
(Unaudited)
Three Months
Ended
March 31,
-----------------
In thousands, except per share amounts 2004 2003
-------------------------------------------------------------------
Net income $15,312 $13,441
Adjustments:
Distributions to preferred stockholders (5,085) (6,947)
Real estate depreciation and amortization, net
of outside partners' interest in 2003 41,926 37,449
Minority interests of unitholders in operating
partnership 460 251
Real estate depreciation related to
unconsolidated entities 57 33
Discontinued Operations:
Real estate depreciation 985 1,659
Minority interests of unitholders in operating
partnership 146 210
Net gains on sales of depreciable property (1,205) (1,045)
-------- --------
Funds from operations ("FFO") - basic $52,596 $45,051
======== ========
Distribution to preferred stockholders -
Series D and E (Convertible) 2,174 4,036
-------- --------
Funds from operations - diluted $54,770 $49,087
======== ========
Recurring capital expenditures (8,926) (8,506)
-------- --------
Adjusted funds from operations ("AFFO") - diluted $45,844 $40,581
======== ========
Weighted average number of common shares and OP
Units outstanding - basic 135,901 114,659
Weighted average number of common shares, OP
Units, and common stock
equivalents outstanding - diluted 145,163 129,420
FFO per common share - basic $0.39 $0.39
======== ========
FFO per common share - diluted $0.38 $0.38
======== ========
FFO is defined as net income (computed in accordance with GAAP),
excluding gains (or losses) from sales of depreciable property, plus
real estate 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 April 2002. United Dominion considers FFO
in evaluating property acquisitions and its operating performance 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.
For the three months ended March 31, 2004, distributions to preferred
stockholders exclude $1.6 million related to a premium on preferred
shares repurchased.
AFFO is defined as FFO less recurring capital expenditures for our
stabilized portfolio at $470 per home in 2004 and $464 per home in
2003.
Attachment 3
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
In thousands, except per share amounts 2004 2003
------------------------------------------------------------------
ASSETS
Real estate owned:
Real estate held for investment $4,336,423 $4,215,585
Less: accumulated depreciation (906,743) (865,701)
----------- -------------
3,429,680 3,349,884
Real estate under development 32,729 30,375
Real estate held for disposition
(net of accumulated depreciation of
$30,856 and $30,929) 63,121 74,662
----------- -------------
Total real estate owned, net of
accumulated depreciation 3,525,530 3,454,921
Cash and cash equivalents 1,973 4,824
Restricted cash 7,468 7,540
Deferred financing costs, net 20,541 21,425
Investment in unconsolidated
development joint venture 1,206 1,673
Funds held in escrow from 1031
exchanges pending the acquisition of
real estate 12,580 14,447
Other assets 35,795 38,573
Other assets - real estate held for
disposition 115 240
----------- -------------
Total assets $3,605,208 $3,543,643
=========== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Secured debt $1,008,520 $1,018,028
Unsecured debt 1,226,367 1,114,009
Real estate taxes payable 18,166 30,513
Accrued interest payable 17,670 12,892
Security deposits and prepaid rent 21,783 23,600
Distributions payable 41,768 40,623
Accounts payable, accrued expenses, and
other liabilities 36,866 45,189
Other liabilities - real estate held
for disposition 917 1,147
----------- -------------
Total liabilities 2,372,057 2,286,001
Minority interests 91,374 94,206
Stockholders' 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 2003) 135,400 135,400
2,000,000 shares 7.50% Series D
Cumulative Convertible Redeemable
issued
and outstanding (2,000,000
shares in 2003) 45,833 44,271
3,425,217 shares of 8.00% Series E
Cumulative Convertible issued
and outstanding (3,425,217 shares
in 2003) 56,893 56,893
Common stock, $1 par value;
250,000,000 shares authorized
127,752,838 shares issued and
outstanding (127,295,126 shares in
2003) 127,753 127,295
Additional paid-in capital 1,464,835 1,458,983
Distributions in excess of net
income (680,277) (651,497)
Deferred compensation - unearned
restricted stock awards (7,520) (5,588)
Notes receivable from officer-
stockholders (210) (459)
Accumulated other comprehensive
loss, net (930)(A) (1,862)(A)
----------- -------------
Total stockholders' equity 1,141,777 1,163,436
----------- -------------
Total liabilities and stockholders'
equity $3,605,208 $3,543,643
=========== =============
(A) Represents net unrealized loss on derivative instrument
transactions.
CONTACT: United Dominion Realty Trust, Inc.Monique Elwell, 720-283-6135
ir@udrt.comwww.udrt.com
SOURCE: United Dominion Realty Trust, Inc.