RICHMOND, Va.--(BUSINESS WIRE)--Jan. 31, 2005--United Dominion
Realty Trust, Inc. (NYSE: UDR) today reported Funds From Operations
("FFO") of $57.5 million, or $0.39 per share (diluted), for the
quarter ended December 31, 2004. For the same period a year ago, the
Company reported FFO of $53.8 million, or $0.37 per share (diluted).
FFO for the twelve months ended December 31, 2004 was $219.6 million,
or $1.51 per share (diluted). For the same period a year ago, the
Company reported FFO of $208.4 million, or $1.52 per share (diluted).
"I'm pleased to report that we continued to gain traction in our
operations with growth in rent and Net Operating Income ("NOI") during
the fourth quarter," stated Thomas W. Toomey, President and Chief
Executive Officer. "Throughout 2004, we registered sequential
quarterly improvement in year over year comparisons for rent and net
operating income. The 2.1% growth in NOI for the fourth quarter was
our best performance in over two years. These improvements in overall
operating results, combined with our recent $1.3 billion in
acquisitions and sales afford us an excellent base to build from for
2005."
Highlights
-- Acquired 11 communities for $529 million
-- Sold 9 communities for $112 million
-- Issued $100 million of 5.00% senior unsecured notes due
January 2012
-- Issued $25 million of 4.30% senior unsecured notes due July
2007
-- Issued $100 million of 5.25% senior unsecured notes due
January 2015
-- Issued 4.5 million shares of common stock for net proceeds of
$91.3 million
-- Redeemed 2 million shares of Series D Cumulative Convertible
Redeemable Preferred Stock
Portfolio Operating Performance and Same Community Results
During the fourth quarter, 64,177 apartment homes, or 81% of total
apartment homes, were classified as Same Community. The Company
defines Same Community as all multifamily communities owned and
stabilized for at least one year as of the beginning of the most
recent quarter.
Same Community Results, Year/Year
($ in thousands, except monthly rent)
4th Qtr '04 4th Qtr '03 % Change
----------- ----------- ----------
Rent and other income $138,897 $136,096 2.1%
Concessions 4,085 3,928 4.0
Bad debt 729 656 11.1
Total income 134,083 131,512 2.0
Expenses 51,373 50,483 1.8
Net operating income 82,710 81,029 2.1
Avg. monthly collections per
occupied home $710 $707 0.4%
Avg. monthly reimbursements per
occupied home 30 27 11.1
Avg. physical occupancy 94.1% 92.9% 120 bps
Operating margin 61.7 61.6 10 bps
Annualized resident turnover
rate 59.5 62.4 -290 bps
Resident credit loss, % of
effective rent 0.5 0.5 0 bps
Same Community represents 41 markets, of which 28 markets, or 68%,
generated positive Same Community revenue growth and 25 markets, or
61%, generated positive Same Community NOI when compared to the prior
year.
Same Community Results, Quarter/Quarter
($ in thousands, except monthly rent)
4th Qtr '04 3rd Qtr '04 % Change
----------- ----------- -----------
Rent and other income $138,897 $138,641 0.2%
Concessions 4,085 4,058 0.7
Bad debt 729 634 15.0
Total income 134,083 133,949 0.1
Expenses 51,373 52,399 -2.0
Net operating income 82,710 81,550 1.4
Avg. monthly collections per
occupied home $710 $709 0.1%
Avg. monthly reimbursements per
occupied home 30 29 3.4
Avg. physical occupancy 94.1% 94.2% -10 bps
Operating margin 61.7 60.9 80 bps
Annualized resident turnover rate 59.5 73.4 -1390 bps
Resident credit loss, % of
effective rent 0.5 0.5 0 bps
Same Community represents 41 markets, of which 19 markets, or 46%,
generated positive Same Community revenue growth and 24 markets, or
59%, generated positive Same Community NOI growth when compared to the
prior quarter.
Non-Mature Properties
The composition of the Company's portfolio has changed
significantly over the past three years. Currently, 19% of the
portfolio is considered 'non-mature', meaning that the communities
have not been owned or stabilized for at least one year. In the coming
quarters, the Same Community portfolio will benefit from an influx of
acquired properties currently considered non-mature in California,
Metropolitan Washington D.C. and Florida, which are high rent and high
occupancy markets. These high barrier markets comprise approximately
76% of non-mature NOI. The overall average monthly rental rate of our
non-mature assets is approximately $300 above the current mature
portfolio.
Portfolio Repositioning
As previously announced, the Company acquired 11 communities with
3,761 apartment homes for a total purchase price of $529 million
(averaging $140,500 per home) during the quarter, which included seven
communities in the Essex transaction. These transactions represent a
blended capitalization rate of 5.6% using forward twelve months of
operations and a reserve for capital expenditures ranging from $270 to
$450 per home.
During the fourth quarter, the Company announced sales totaling
$112 million (averaging $48,000 per home) at a blended capitalization
rate of 8.7% using trailing twelve months of operations less an actual
capital expenditure reserve of $470 per home and an implied management
fee of 2.75%. The sales include eight communities in Michigan with
1,970 apartment homes for a total of $91.5 million (averaging $46,400
per home), and one community in Louisville, Kentucky for $20.1 million
(averaging $56,600 per home). In addition, the Company sold nine acres
of land in Texas for $0.8 million. The Company recognized $17.7
million in gains on the sales in the fourth quarter. The Company is
under contract to sell 11 communities consisting of 2,623 unites for
$169 million at a blended cap rate of 5.5%. The communities are
located in Houston, Anaheim and Phoenix.
For more details on the Company's acquisition and disposition
activities, see our press release dated December 13, 2004.
"These transactions continue to move us forward on two fronts.
Approximately 50% of our projected 2005 NOI is expected to come from
California, Florida and the Metro D.C. area, and we have exited two
additional markets, bringing our total to 43," stated W. Mark Wallis,
Senior Executive Vice President, Strategy, Legal, Acquisitions,
Dispositions & Development.
Financing Activities
In October, the Company issued $100 million of 5.00% senior
unsecured notes due January 15, 2012 at spread of 123 basis points.
Also in October, the Company issued $25 million of 4.30% senior
unsecured notes due July 1, 2007 at spread of 100 basis points. These
notes represent a re-opening of the 4.30% senior notes issued on June
25, 2004. These additional notes will constitute a single series of
notes, bringing the aggregate principal amount outstanding of the
4.30% senior notes to $75 million. In November, the Company issued
$100 million of 5.25% senior unsecured notes due January 15, 2015 at a
spread of 127 basis points. During the quarter, the Company issued 4.5
million shares of common stock at a price of approximately $20.48 per
share and received net proceeds of $91.3 million.
eBay Purchase of Rent.com
On December 16, 2004, eBay (Nasdaq: EBAY) announced that it had
agreed to acquire privately held Rent.com, a leading Internet listing
web site in the apartment and rental housing industry, for
approximately $415 million plus acquisition costs, net of Rent.com's
cash on hand. United Dominion owns shares in Rent.com. The
acquisition, which is subject to various regulatory approvals and
approval of Rent.com's stockholders, is expected to close in the first
quarter of 2005.
If the closing occurs, the Company expects to record a one-time
pre-tax gain of between $12 and $14 million. There is no assurance
that the Rent.com transaction will close, or if it does, whether the
Company will realize the anticipated gain. The Company is considering,
among other things, utilizing a portion of the gain to offset
prepayment penalties we may elect to incur by prepaying certain
secured debt. The earnings guidance shown below does not include the
possible effects of the Rent.com transaction.
Earnings Guidance
United Dominion believes that the financial results for 2005 will
be affected by international, national and regional economic trends
and events, the acquisition and/or disposition of apartment
communities and other factors. The Company's guidance for the first
quarter 2005 FFO is $0.37 to $0.39 per share (diluted) and $1.57 to
$1.70 per share (diluted) for the full year 2005. All guidance is
based on the current expectations and judgment of the Company's
management team.
Detailed assumptions for the Company's 2005 guidance can be found
on our website at:
http://media.corporate-ir.net/media_files/irol/11/112440/guidance/
guidance2005.pdf (Due to its length, this URL may need to be
copied/pasted into your Internet browser's address field. Remove the
extra space if one exists.)
A reconciliation of the range provided for projected 2005 FFO per
share for the full year to Earnings Per Share ("EPS") for the full
year is as follows:
2005
High-end Low-end
----------------------------------------------------------------------
Funds From Operations(1) $1.70 $1.57
----------------------------------------------------------------------
Conversion to GAAP Share Count (2) 0.22 0.21
----------------------------------------------------------------------
Minority Interest of OP Unit Holders (2) (0.02) (0.04)
----------------------------------------------------------------------
Depreciation (3) (1.58) (1.48)
----------------------------------------------------------------------
Gains (3) 0.15 0.30
----------------------------------------------------------------------
Preferred Dividends (0.07) (0.07)
---------------------------------------------=========================
Expected Earnings Per Share $0.40 $0.49
----------------------------------------------------------------------
(1) The National Association of Real Estate Investment Trusts
("NAREIT") defines funds from operations ("FFO") (April 2002 White
Paper) as net income (computed in accordance with accounting
principles generally accepted in the United States (GAAP)),
excluding gains (or losses) from sales of depreciable property,
plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. The Company
believes that FFO is helpful to investors as a supplemental
measure of the operating performance of a real estate company
because it provides investors an understanding of the ability of
the Company to incur and service debt and to make capital
expenditures. FFO in and of itself does not represent net income
or net cash flows from operating activities in accordance with
GAAP. Therefore, FFO should not be exclusively considered as an
alternative to net income or to net cash flows from operating
activities as determined by GAAP or as a measure of liquidity.
(2) Operating Partnership units are not considered to be common stock
equivalents for GAAP purposes.
(3) Due to the uncertain timing and extent of property dispositions
and acquisitions, actual results could differ materially from
expected EPS.
Supplemental Information
The Company offers 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:
www.udrt.com/resources/files/Investor_Relations/4Q2004.pdf
Conference Call Information
Date: February 1, 2005
Time: 1:00 p.m. Eastern Time
To Participate in the Telephone Conference Call:
Dial in at least five minutes prior to start time.
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: 11019477
The playback can be accessed until March 15, 2005 at midnight EST.
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 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 78,855 apartment homes and has 1,311 homes
currently under development. 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. 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 not achieving
anticipated results, the expectation that approximately 50% of
projected 2005 net operating income will come from California, Florida
and Metropolitan Washington D.C., 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. 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 Twelve Months Ended
December 31, December 31,
------------------- -------------------
In thousands, except per
share amounts 2004 2003 2004 2003
-------------------------- ------------------- -------------------
Rental income $163,832 $138,732 $604,270 $542,894
Rental expenses:
Real estate taxes
and insurance 18,660 15,782 71,055 62,329
Personnel 17,387 14,310 63,878 55,252
Utilities 9,457 8,062 36,625 32,244
Repair and
maintenance 10,012 9,785 38,409 34,909
Administrative and
marketing 5,816 5,151 21,299 19,793
Property
management 4,717 4,242 17,881 16,873
Other operating
expenses 375 293 1,226 1,205
--------- --------- --------- ---------
66,424 57,625 250,373 222,605
Non-property
income 395 365 2,608 1,068
Other expenses:
Real estate
depreciation and
amortization 49,228 39,106 171,781 145,706
Interest 35,847 28,444 124,087 117,457
General and
administrative 6,081 4,493 19,316 20,626
Hurricane related
expenses - - 5,503 -
Impairment loss on
investments - - - 1,392 (B)
Other depreciation
and amortization 809 869 3,372 3,087
--------- --------- --------- ---------
91,965 72,912 324,059 288,268
Income before minority
interests and
discontinued operations 5,838 8,560 32,446 33,089
Minority interests of
outside partnerships (15) - (182) (614)
Minority interests of
unitholders in operating
partnerships (3) 588 (443) 874
--------- --------- --------- ---------
Income before discontinued
operations, net of
minority interests 5,820 9,148 31,821 33,349
Income from discontinued
operations, net of
minority interests
(including
gain on sales)(A) 19,693 11,887 65,331 37,055
--------- --------- --------- ---------
Net income 25,513 21,035 97,152 70,404
Distributions to preferred
stockholders - Series B (2,911) (2,911) (11,644) (11,645)
Distributions to preferred
stockholders - Series D
(Convertible) (348) (1,696) (3,473) (12,178)
Distributions to preferred
stockholders - Series E
(Convertible) (1,000) (1,138) (4,414) (2,503)
Premium on preferred stock
conversions (1,042) (921) (5,729) (19,271)
--------- --------- --------- ---------
Net income available to
common stockholders $20,212 $14,369 $71,892 $24,807
========= ========= ========= =========
Earnings per weighted
average common share -
basic:
Income/(loss) from
continuing operations
available to common
stockholders, net of
minority interests $0.00 $0.02 $0.05 ($0.10)
Income from
discontinued
operations, net of
minority interests $0.15 $0.10 $0.51 $0.32
Net income available
to common
stockholders $0.15 $0.12 $0.56 $0.22
Earnings per weighted
average common share -
diluted:
Income/(loss) from
continuing operations
available to common
stockholders, net of
minority interests $0.00 $0.02 $0.05 ($0.10)
Income from
discontinued
operations, net of
minority interests $0.15 $0.10 $0.51 $0.32
Net income available
to common
stockholders $0.15 $0.12 $0.56 $0.22
Common distributions
declared per share $0.2925 $0.2850 $1.1700 $1.1400
Weighted average number of
common shares outstanding
- basic 131,136 121,854 128,097 114,672
Weighted average number of
common shares outstanding
- diluted 132,172 122,846 129,080 114,672
(A) Discontinued operations represents all properties sold since
January 1, 2002 and properties that are currently classified as
held for disposition at December 31, 2004.
(B) Represents the write-off of the Company's investment in Realeum,
Inc., an unconsolidated development joint venture created to
develop web-based solutions for multifamily
Attachment 2
--------------
UNITED DOMINION REALTY TRUST, INC.
FUNDS FROM OPERATIONS
(Unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
----------------- -------------------
In thousands, except per share
amounts 2004 2003 2004 2003
------------------------------- ----------------- -------------------
Net income $25,513 $21,035 $97,152 $70,404
Adjustments:
Distributions to preferred
stockholders (4,259) (5,745) (19,531) (26,326)
Real estate depreciation and
amortization, net of outside
partners' interest in 2003 49,228 39,106 171,781 145,271
Minority interests of
unitholders in operating
partnership 3 (588) 443 (874)
Real estate depreciation
related to unconsolidated
entities 72 60 279 196
Discontinued Operations:
Real estate depreciation 769 4,100 8,847 17,687
Minority interests of
unitholders in operating
partnership 1,326 809 4,400 2,521
Net gain on sale of
depreciable property (17,664) (7,793) (52,903) (15,941)
-------- -------- --------- ---------
Funds from operations ("FFO") -
basic $54,988 $50,984 $210,468 $192,938
======== ======== ========= =========
Distribution to preferred
stockholders - Series D and
E (Convertible) 1,348 2,834 7,887 14,681
-------- -------- --------- ---------
Funds from operations - diluted $56,336 $53,818 $218,355 $207,619
======== ======== ========= =========
Gains on the disposition of
real estate developed for
sale (A) 1,202 - 1,202 812
-------- -------- --------- ---------
FFO with gains on the
disposition of real estate
developed for sale - diluted $57,538 $53,818 $219,557 $208,431
======== ======== ========= =========
Weighted average number of
common shares and OP Units
outstanding - basic 139,882 130,565 136,852 122,589
Weighted average number of
common shares, OP Units, and
common stock equivalents
outstanding - diluted 148,302 144,440 145,842 136,975
FFO per common share - basic $0.39 $0.39 $1.54 $1.57
======== ======== ========= =========
FFO per common share - diluted $0.39 $0.37 $1.51 $1.52
======== ======== ========= =========
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 December 31, 2004 and 2003,
distributions to preferred stockholders exclude $1.0 million and $0.9
million, respectively, related to premiums on preferred stock
conversions. For the twelve months ended December 31, 2004 and 2003,
distributions to preferred stockholders exclude $5.7 million and $19.3
million, respectively, related to premiums on preferred stock
conversions.
(A) See Attachment 2(A) for further discussion.
Attachment 2(A)
---------------
UNITED DOMINION REALTY TRUST, INC.
FUNDS FROM OPERATIONS (continued)
(Unaudited)
The following is a reconciliation of GAAP gains from the disposition
of real estate developed for sale to gross gains from the disposition
of real estate developed for sale.
Three Months Twelve Months
Ended Ended
December 31, December 31,
----------------- -----------------
In thousands 2004 2003 2004 2003
--------------------------------------------------- -----------------
GAAP gains from the disposition of
real estate developed for sale $1,278 $ - $1,278 $1,249
Less: accumulated depreciation (76) - (76) (437)
-------- -------- -------- --------
Gains from the disposition of real
estate developed for sale $1,202 $ - $1,202 $812
======== ======== ======== ========
Gains from the disposition of real estate investments developed for
sale is defined as net sales proceeds less a tax provision (such
development by REITs must be conducted in a TRS) and the gross
investment basis of the asset before accumulated depreciation. We
consider FFO with gains/losses on real estate developed for sale to be
a meaningful supplemental measure of performance because the
short-term use of funds produce a profit which differs from the
traditional long-term investment in real estate for REITs.
Attachment 3
-------------
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
In thousands, except share and December 31, December 31,
per share amounts 2004 2003
-------------------------------------------------------------------
ASSETS
Real estate owned:
Real estate held for investment $5,029,516 $3,900,573
Less: accumulated depreciation (978,651) (809,524)
------------ ------------
4,050,865 3,091,049
Real estate under development 65,758 29,715
Real estate held for disposition (net
of accumulated depreciation of
$29,236 and $87,106) 118,786 334,157
------------ ------------
Total real estate owned, net of
accumulated depreciation 4,235,409 3,454,921
Cash and cash equivalents 7,904 4,824
Restricted cash 6,086 7,540
Deferred financing costs, net 25,151 21,425
Investment in unconsolidated
development joint venture 458 1,673
Funds held in escrow from 1031
exchanges pending the acquisition of
real estate 17,039 14,447
Notes receivable 5,000 13,000
Other assets 34,347 25,247
Other assets - real estate held for
disposition 607 566
------------ ------------
Total assets $4,332,001 $3,543,643
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Secured debt $1,197,924 $1,018,028
Unsecured debt 1,682,058 1,114,009
Real estate taxes payable 31,356 29,776
Accrued interest payable 18,773 12,892
Security deposits and prepaid rent 25,168 21,412
Distributions payable 44,624 40,623
Accounts payable, accrued expenses, and
other liabilities 50,217 44,749
Other liabilities - real estate held
for disposition 2,837 4,512
------------ ------------
Total liabilities 3,052,957 2,286,001
Minority interests 83,593 94,206
Stockholders' equity
Preferred stock, no par value; $25
liquidation preference,
25,000,000 shares authorized;
5,416,009 shares of 8.60% Series B
Cumulative Redeemable issued and
outstanding
(5,416,009 shares in 2003) 135,400 135,400
0 shares of 7.50% Series D
Cumulative Convertible Redeemable
issued
and outstanding (2,000,000 shares
in 2003) - 44,271
2,803,812 shares of 8.00% Series E
Cumulative Convertible issued
and outstanding (3,425,217 shares
in 2003) 46,571 56,893
Common stock, $1 par value; 250,000,000 shares
authorized
136,429,592 shares issued and
outstanding (127,295,126 shares in
2003) 136,430 127,295
Additional paid-in capital 1,614,916 1,458,983
Distributions in excess of net income (731,808) (651,497)
Deferred compensation - unearned
restricted stock awards (6,058) (5,588)
Notes receivable from officer-
stockholders - (459)
Accumulated other comprehensive loss,
net - (1,862)(A)
------------ ------------
Total stockholders' equity 1,195,451 1,163,436
------------ ------------
Total liabilities and stockholders'
equity $4,332,001 $3,543,643
============ ============
(A) Represents net unrealized loss on derivative instrument
transactions.
CONTACT: United Dominion Realty Trust, Inc.Larry Thede, 720-283-2450
ir@udrt.comwww.udrt.com
SOURCE: United Dominion Realty Trust, Inc.