RICHMOND, Va.--(BUSINESS WIRE)--April 24, 2006--United Dominion
Realty Trust, Inc. (NYSE: UDR) today reported Funds From Operations
("FFO") of $61.5 million for the quarter ended March 31, 2006,
compared to FFO of $57.9 million for the same period a year ago. The
results produced FFO per share of $0.42 per share (diluted), a 7.7%
increase from FFO of $0.39 per share (diluted), for the same period a
year ago.
"We delivered robust same community operating performance in the
first quarter; achieving 6.3% revenue growth and 6.6% net operating
income growth compared to last year. These are our strongest results
in over five years," stated Thomas W. Toomey, President and Chief
Executive Officer. "This was our ninth consecutive quarter of
sequential same store revenue growth. Pricing power is clearly on our
side as demonstrated by our 5.6% increase in total income per home and
26% reduction in concessions. In addition to our solid operating
performance, I am pleased with the success of our condo conversion
business and that our development and rehab activity has continued to
grow. In addition to closing on the sale of 181 condominiums in the
first quarter, we placed another 153 condos under contract. This month
we entered into a joint venture contract with national apartment
developer JPI and our total development pipeline currently exceeds
2,200 homes at a budgeted cost of $339 million. Finally, we have 2,943
homes undergoing rehabs at a budgeted cost of $97 million."
First Quarter Highlights
-- Achieved same store occupancy of 94.8%, up from 94.2% in the
first quarter of 2005.
-- Recorded total income per occupied home of $852 per month, the
highest level in the company's history.
-- Registered the ninth consecutive quarter of positive
sequential same store revenue growth.
-- Re-priced 27% of the Company's leases at an average monthly
increase of $35 per lease, with March being the strongest
month at $48 per lease.
-- Completed 1,550 kitchen and bath rehabs, representing an
investment of $14.1 million.
-- Sold 181 condominium homes for $36.4 million, realizing an
after-tax gain of $8.5 million. The sales represent an
after-tax cap rate of 3.3%
Portfolio Operating Performance and Same Community Results
% of Total Total Same
Revenue Expense NOI Portfolio Community
Region Growth Growth Growth Based On Homes
1Q06 NOI
Mid-Atlantic 4.7% 6.1% 4.0% 29.1% 18,026
Western 8.5 1.8 12.1 28.6 12,835
Southeastern 7.6 6.5 8.3 22.4 15,641
Southwestern 4.7 8.0 2.2 16.8 16,830
Midwestern 4.2 8.3 1.3 3.1 2,974
Total 6.3% 5.7% 6.6% 100.0% 66,306
During the first quarter, 66,306 apartment homes, or 88% of total
apartment homes were classified as Same Community. The Company defines
Same Community as all multifamily communities owned and stabilized for
at least one year as of the beginning of the most recent quarter.
Same Community Results, Year/Year
($ in thousands, except collections and
total income per occupied home)
1st Qtr '06 1st Qtr '05 % Change
------------ ------------ ----------
Rent and other income $163,840 $155,226 5.5%
Concessions 2,835 3,836 -26.1%
Bad debt 306 204 50.0%
Total income 160,699 151,186 6.3%
Expenses 60,839 57,532 5.7%
Net operating income 99,860 93,654 6.6%
Collections per occupied home $816 $775 5.3%
Total income per occupied home $852 $807 5.6%
Avg. physical occupancy 94.8% 94.2% 60 bps
Operating margin 62.1% 61.9% 20 bps
Resident credit loss, % of
effective rent 0.2% 0.1% 10 bps
Comparing first quarter 2006 to first quarter 2005, on a Same
Community basis, 89% of the portfolio generated positive revenue
growth and 77% of the portfolio generated positive NOI growth.
Same Community Results, Quarter/Quarter
($ in thousands, except collections and
total income per occupied home)
1st Qtr '06 4th Qtr '05 % Change
------------- ------------ ---------
Rent and other income $163,840 $161,985 1.1%
Concessions 2,835 3,060 -7.4%
Bad debt 306 737 -58.5%
Total income 160,699 158,188 1.6%
Expenses 60,839 60,419 0.7%
Net operating income 99,860 97,769 2.1%
Collections per occupied home $816 $803 1.6%
Total income per occupied home $852 $838 1.7%
Avg. physical occupancy 94.8% 94.9% -10 bps
Operating margin 62.1% 61.8% 30 bps
Resident credit loss, % of
effective rent 0.2% 0.5% -30 bps
Comparing first quarter 2006 to fourth quarter 2005, on a Same
Community basis, 71% of the portfolio generated positive revenue
growth and 60% of the portfolio generated positive NOI growth.
Portfolio Repositioning
During the first quarter, the Company acquired a 160 home
apartment community in Plano, Texas for a total purchase price of $9.7
million or $60,690 per home. The transaction was completed at a 6.2%
cap rate using forward twelve months of operations and a reserve for
capital expenditures of $510 per home. The property is adjacent to an
existing United Dominion community. The Company intends to upgrade the
homes with new kitchens and baths.
Condominium Activity
In the first quarter, the Company sold 181 condominiums for an
after-tax gain of $8.5 million. The sales represent an after tax cap
rate of 3.3%. Another 153 homes are currently under contract. The
Company's 2006 original guidance was to sell 425 to 525 condominiums
for an after-tax FFO contribution of $14.5 to $18 million or $0.10 to
$0.12 per share.
Earnings Guidance
The Company believes that financial results for 2006 will be
affected by international, national and regional economic trends and
events, the acquisition and/or disposition of apartment communities,
portfolio repositioning, financing activities, and other factors. The
Company's guidance for second quarter 2006 FFO is $0.42 to $0.44 per
share (diluted) and $1.63 to $1.73 per share (diluted) for the full
year 2006. All guidance is based on the current expectations and
judgment of the Company's management team.
Detailed assumptions for the Company's 2006 guidance can be found
on our website at:
http://media.corporate-ir.net/media_files/irol/11/112440/guidance/
guidance.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 2006 FFO per
share for the full year to Earnings Per Share ("EPS") for the full
year is as follows:
2006
---------------------------------------------------------------------
Funds From Operations(1) $1.73 $1.63
---------------------------------------------------------------------
Conversion to GAAP Share Count (2) 0.16 0.15
---------------------------------------------------------------------
Minority Interest of OP Unit Holders (2) (0.03) (0.05)
---------------------------------------------------------------------
Depreciation (3) (1.70) (1.65)
---------------------------------------------------------------------
Gains (3) 0.50 0.70
---------------------------------------------------------------------
Preferred Dividends (0.09) (0.09)
--------------------------------------------------===================
Expected Earnings Per Share $0.57 $0.69
---------------------------------------------------------------------
(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:
http://www.udrt.com/resources/files/Investor_Relations/1Q2006.pdf
Conference Call Information
Date: April 25, 2006
Time: 1:00 p.m. Eastern Time
To Participate in the Telephone Conference Call:
Domestic: 800-218-0530
International: 303-262-2193
If you have any questions, please contact:
Gloria Price: 720-283-6132
E-mail: gprice@udrt.com
Conference Call Playback:
Domestic: 800-405-2236
International: 303-590-3000
Passcode: 11056418#
The playback can be accessed through May 2, 2006.
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 raised the
dividend each of the last 30 years. United Dominion is included in the
S&P MidCap 400 Index. At March 31, 2006, the Company owned 75,223
apartment homes and had 1,335 homes 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, 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
March 31,
------------------
In thousands, except per share amounts 2006 2005
----------------------------------------------------------------------
Rental income $176,810 $158,636
Rental expenses:
Real estate taxes and insurance 23,232 19,172
Personnel 17,306 15,969
Utilities 11,283 9,571
Repair and maintenance 10,300 9,835
Administrative and marketing 5,423 5,570
Property management 4,991 4,813
Other operating expenses 298 290
--------- ---------
72,833 65,220
Non-property income:
Sale of technology investment - 12,306
Other income 1,178 618
--------- ---------
1,178 12,924
Other expenses:
Real estate depreciation and amortization 57,397 48,566
Interest 44,094 38,572
General and administrative 6,764 7,000
Loss on early debt retirement - 6,644
Other depreciation and amortization 704 652
--------- ---------
108,959 101,434
(Loss)/income before minority interests and
discontinued operations (3,804) 4,906
Minority interests of outside partnerships (16) (58)
Minority interests of unitholders in
operating partnerships 468 (59)
--------- ---------
(Loss)/income before discontinued operations,
net of minority interests (3,352) 4,789
Income from discontinued operations, net of
minority interests (including gain on sales)(A) 15,359 10,152
--------- ---------
Net income 12,007 14,941
Distributions to preferred stockholders
-- Series B (2,911) (2,911)
Distributions to preferred stockholders
-- Series E (Convertible) (931) (931)
--------- ---------
Net income available to common stockholders $8,165 $11,099
========= =========
Earnings per weighted average common share --
basic and diluted:
(Loss)/income from continuing operations
available to common stockholders, net
of minority interests ($0.05) $0.01
Income from discontinued operations, net
of minority interests $0.11 $0.07
Net income available to common stockholders $0.06 $0.08
Common distributions declared per share $0.3125 $0.3000
Weighted average number of common shares
outstanding -- basic 133,589 136,067
Weighted average number of common shares
outstanding -- diluted 133,589 137,073
(A) Discontinued operations represents all properties sold since
January 1, 2002, and properties that are currently classified as
held for disposition at March 31, 2006.
Attachment 2
------------
UNITED DOMINION REALTY TRUST, INC.
FUNDS FROM OPERATIONS
(Unaudited)
Three Months Ended
March 31,
------------------
In thousands, except per share amounts 2006 2005
----------------------------------------------------------------------
Net income $12,007 $14,941
Adjustments:
Distributions to preferred stockholders (3,842) (3,842)
Real estate depreciation and amortization 57,397 48,566
Minority interests of unitholders in operating
partnership (468) 59
Real estate depreciation related to
unconsolidated entities - 62
Discontinued Operations:
Real estate depreciation 1,326 3,153
Minority interests of unitholders in operating
partnership 1,001 632
Net gains on the sale of depreciable property (15,347) (7,023)
Net incremental gains on the sale of
condominium homes 8,472 459
Gains on the disposition of real estate
developed for sale 9 -
-------- --------
Funds from operations ("FFO") -- basic $60,555 $57,007
======== ========
Distribution to preferred stockholders --
Series E (Convertible) 931 931
-------- --------
Funds from operations -- diluted $61,486 $57,938
======== ========
Weighted average number of common shares and OP
Units outstanding -- basic 142,342 144,586
Weighted average number of common shares, OP
Units, and common stock equivalents
outstanding -- diluted 147,801 150,187
FFO per common share -- basic $0.43 $0.39
======== ========
FFO per common share -- diluted $0.42 $0.39
======== ========
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.
Net incremental gains on the sale of condominium homes and the net
incremental gain on the sale of a depreciable asset related to an
unconsolidated entity are defined as net sales proceeds less a tax
provision and the gross investment basis of the asset before
accumulated depreciation. We consider FFO with gains/losses on the
sale of condominium homes and gains/losses on the sale of depreciable
assets related to an unconsolidated entity 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 per share March 31, December 31,
amounts 2006 2005
----------------------------------------------------------------------
ASSETS
Real estate owned:
Real estate held for investment $5,275,689 $5,215,688
Less: accumulated depreciation (1,137,308) (1,080,616)
----------- -----------
4,138,381 4,135,072
Real estate under development (net of
accumulated depreciation of $619 and
$140) 129,235 117,328
Real estate held for disposition (net of
accumulated depreciation of $44,373 and
$43,073) 123,038 136,195
----------- -----------
Total real estate owned, net of
accumulated depreciation 4,390,654 4,388,595
Cash and cash equivalents 36,336 15,543
Restricted cash 4,809 4,583
Deferred financing costs, net 30,436 31,036
Notes receivable 36,120 64,805
Other assets 31,019 33,938
Other assets -- real estate held for
disposition 1,468 3,093
----------- -----------
Total assets $4,530,842 $4,541,593
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Secured debt $1,122,162 $1,116,259
Unsecured debt 2,092,003 2,043,518
Real estate taxes payable 21,208 24,433
Accrued interest payable 24,178 26,672
Security deposits and prepaid rent 25,331 25,535
Distributions payable 47,078 45,313
Accounts payable, accrued expenses, and
other liabilities 32,752 55,147
Other liabilities -- real estate held for
disposition 6,681 13,173
----------- -----------
Total liabilities 3,371,393 3,350,050
Minority interests 81,146 83,819
Stockholders' equity
Preferred stock, no par value; 50,000,000
shares authorized
5,416,009 shares of 8.60% Series B
Cumulative Redeemable issued and
outstanding (5,416,009 shares in
2005) 135,400 135,400
2,803,812 shares of 8.00% Series E
Cumulative Convertible issued and
outstanding (2,803,812 shares in
2005) 46,571 46,571
Common stock, $0.01 par value; 250,000,000
shares authorized
134,279,842 shares issued and outstanding
(134,012,053 shares in 2005) 1,343 1,340
Additional paid-in capital 1,684,518 1,680,115
Distributions in excess of net income (789,529) (755,702)
----------- -----------
Total stockholders' equity 1,078,303 1,107,724
----------- -----------
Total liabilities and stockholders'
equity $4,530,842 $4,541,593
=========== ===========
CONTACT: United Dominion Realty Trust, Inc.Larry Thede, 720-283-2450
ir@udrt.comwww.udrt.com
SOURCE: United Dominion Realty Trust, Inc.