DENVER--(BUSINESS WIRE)--
UDR, Inc. (NYSE: UDR), a leading multifamily real estate investment
trust (REIT), today announced its first quarter 2009 results.
The Company generated Funds from Operations (FFO) of $58.1 million, or
$0.37 per diluted share, for the quarter ended March 31, 2009, equal to
the first quarter of 2008. Both 2009 and 2008 per share results reflect
the issuance of 11.4 million shares of common stock distributed with the
Company's January 29, 2009, special dividend. The results exclude the
effects of the implementation of FASB Staff Position APB 14-1, Accounting
for Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement).
During the first quarter of 2009, the Company repurchased $160 million
of its outstanding notes. Approximately $108 million was repurchased in
a tender offer for its 6.5 percent notes due June of 2009, and $52
million of the repurchases were primarily for convertible debt maturing
in 2011. These repurchases were completed in the open market at an
average discount of 18.6 percent. The open market purchases resulted in
a net gain of $8.9 million, or $0.06 per diluted share.
A reconciliation of FFO to GAAP Net Income can be found on Attachment 2
of the Company's earnings release.
"UDR is well positioned to weather the challenging environment with a
strong and flexible balance sheet and an uncompromised focus on
operations," said Tom Toomey, President and CEO of UDR. "While we do not
take this flexibility for granted, we do acknowledge the freedom it
affords us to focus on operating our business as best we can in a
turbulent economic environment."
Mr. Toomey continued, "During the first quarter of 2009, UDR delivered
strong operational results. Our growth in same-store net operating
income is the result of our transformed portfolio, our focus on driving
occupancy and a streamlined cost structure. We anticipate that
macro-economic challenges will continue to impact pricing throughout our
portfolio, and we will remain focused on maintaining a high-occupancy
level to recapture pricing power when the cycle turns.
"Despite ongoing uncertainty in the broader economy, we remain confident
in UDR's strategic direction," Toomey added. "Our communities are
located in attractive markets and offer an affordable solution to home
ownership; our associates are focused on outperforming their markets;
and we have the financial flexibility to maintain that focus through all
stages of the economic cycle," Toomey concluded.
Operations
The Company generated same-store net operating income (NOI) growth of
1.9 percent for the first quarter 2009. Same-store physical occupancy
increased 20 basis points to 94.7 percent, and total income per occupied
home grew to $1,176, up 30 basis points from a year ago.
Revenue growth of 0.4 percent was due primarily to gains in income per
occupied home in a number of the Company's larger markets, including
Metropolitan DC, and San Francisco and San Diego, CA, offset by revenue
declines in Orange County, CA, and Orlando and Jacksonville, FL.
Same-store expenses decreased by 2.7 percent as a result of proactive
cost management across all aspects of the cost structure and some
favorable regional expense comparisons.
Summary Same-Store Results First Quarter 2009 versus First Quarter 2008
Revenue Expense % Same Same
Growth/ NOI Growth/ Community Community # Same
Region Growth/ Community
Decline Decline Portfolio(1) Occupancy Homes(2)
Decline
Western 1.3% -4.5% 3.8% 50.1% 94.3% 13,549
Mid-Atlantic 1.4% 0.2% 2.0% 23.8% 96.1% 8,134
Southeastern -2.0% -1.6% -2.2% 22.3% 94.4% 10,484
Southwestern -0.9% -6.1% 2.0% 3.8% 94.7% 1,469
Total 0.4% -2.7% 1.9% 100.0% 94.7% 33,636
(1) Based on YTD 2009 NOI
(2) During the first quarter, 33,636 apartment homes, or 75 percent of total
apartment homes (44,571), 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.
Technology Platform
The Company continues to pursue additional technology-based marketing
channels to expand its outreach and increase the efficiency of its
on-site personnel. UDR's call center, its website and mobile web
capabilities drive traffic to its communities "24/7," effectively
increasing the Company's hours of operation. During the quarter 56
percent of UDR's signed leases were originated over the Internet,
demonstrating the power of the Company's technology platform, award
winning websites and the accessibility it offers to residents and
prospects.
In January, UDR rolled out an electronic payment capability across its
entire portfolio. Automated Clearing House (ACH) payments automatically
deduct rent payments from residents' bank accounts on a monthly basis.
By the end of April, roughly 23 percent of the Company's resident base
had adopted the ACH payment option. This enhances UDR's cash management,
reduces costs and enables UDR's community managers to maximize their
time enhancing the customer service experience.
Portfolio Investment Activities
UDR has seven active development projects and one active redevelopment
project underway, comprising 2,559 homes, at a total cost of $421
million, with a remaining capital funding commitment of just $3.5
million. Management anticipates delivery of roughly 77 percent of this
pipeline in 2010, when the economy should begin to recover and demand is
expected to increase. In addition to its active developments and
redevelopments, the Company has one $29 million presale project
underway, which is scheduled for completion in the second half of 2009.
The Company does not intend to start any additional development projects
in 2009, nor did the Company complete any acquisitions or dispositions
during the quarter.
Balance Sheet
At March 31, 2009, UDR had capacity of $1.1 billion from cash, undrawn
credit facilities and notes receivable, giving it ample flexibility to
meet its capital needs for its development activities and debt
maturities through the end of 2010. In addition, the Company's $3.2
billion unencumbered asset base (book value) provides it with additional
flexibility to address capital needs.
UDR's total indebtedness at March 31, 2009, was $3.4 billion. The
Company ended the first quarter with 81.0 percent fixed-rate debt,
blended interest rate of 4.5 percent and a weighted average maturity of
6.5 years.
Current cash and available credit capacity is sufficient to fund all of
the Company's debt maturities through at least 2010, as presented in the
table below:
Cash and Available Credit Capacity ($000s)
Cash/
Maturity Total Capacity Amount Available
Facility
Cash - - $37,000 $37,000
Note Receivable(1) - - 200,000 200,000
Line of Credit 7/2012 Unsecured 600,000 548,900
FNMA 11/2018 Secured 500,000 88,804
FNMA(2) 5/2012 Secured 200,000 140,000
Construction Loans Various Secured 319,000 134,285
TOTAL CASH AND CREDIT CAPACITY AT 3/31/2009 $1,856,000 $1,148,989
2009 Debt Maturities(3) 107,821
2010 Debt Maturities(3) 347,706
2009/2010 Construction Costs and Pre-sale Acquisition 179,231
EXPECTED CASH AND CREDIT CAPACITY AT 12/31/2010 $514,231
(1) Reflects note receivable from the March 2008 portfolio sale, which was paid
in full on May 4, 2009.
(2) After expansion, maturity can be extended to 2017.
(3) Assumes available extensions are used.
Subsequent Event
On May 4th, UDR announced that it had received payment of a
$200 million note receivable related to the Company's March 2008
portfolio sale. The Company intends to use proceeds to fund general
corporate obligations.
2009 Guidance
The Company is reiterating previously announced 2009 guidance. UDR
believes that financial results for 2009 will be affected by ongoing
uncertainty related to global economic trends and events, credit market
volatility, projected job losses in key markets, financing activities,
and other factors. All guidance is based on current expectations of
future economic conditions and the judgment of the Company's management
team.
For full year 2009, the Company is estimating FFO of $1.23 to $1.35 per
diluted share.
Assumptions for guidance in 2009 include:
-
A 1.0 percent to 3.0 percent decline in same-store revenue
year-over-year;
-
A 1.5 percent to 2.5 percent growth in same-store expense
year-over-year;
-
A 3.0 percent to 5.0 percent decline in same-store NOI year-over-year;
-
No new development starts or asset acquisitions or sales; and
-
Guidance excludes estimated impact from APB 14-1.
Supplemental Information
The Company offers Supplemental Financial Information that provides
details regarding the financial position and operating results of the
Company. This Supplemental Information is available on the Company's
website at: www.udr.com.
Conference Call and Webcast Information
UDR will host a webcast and conference call on May 6th at
10:00 a.m. ET to discuss first quarter results. The webcast will be
available on UDR's website at www.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 and download and
install any necessary audio software.
To participate in the teleconference, dial 877-941-2332 for domestic and
480-629-9722 for international.
A replay of the conference call will be available through May 12th,
2009, by dialing 800-406-7325 for domestic and 303-590-3030 for
international and entering the confirmation number, 4057831, when
prompted for the pass code.
A replay of the call will be available for 90 days on UDR's website.
Full Text of the Earnings Report and
Supplemental Data
Internet -- The full text of the earnings report and supplemental data
will be available at the UDR website, www.udr.com.
Mail -- For those without Internet access, the first quarter 2009
earnings release will be available by mail or fax, on request. To
receive a copy, please call UDR Investor Relations at 720-283-6121.
Forward-Looking Statements
Certain statements made in this press release may constitute
"forward-looking statements." The words "expect," "intend," "believe,"
"anticipate," "likely," "will" and similar expressions generally
identify forward-looking statements. These 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
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 or new developments not achieving anticipated results,
delays in completing developments 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, expectations
concerning the Vitruvian Park project, expectations that automation will
help grow net operating income, expectations on post-renovated
stabilized annual operating income, expectations on annualized net
operating income 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. 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 disseminate any updates or revisions to
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 by law.
About UDR, Inc.
UDR 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 properties in targeted U.S. markets.
As of March 31, 2008, UDR owned 44,571 apartment homes and had 2,046
homes under development and another 289 homes under contract for
development in its pre-sale program. For over 37 years, UDR has
delivered long-term value to shareholders, the best standard of service
to residents, and the highest quality experience for associates.
Additional information can be found on the Company's website at www.udr.com.
UDR
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
In thousands, except per share amounts 2009 2008
Rental income $ 150,615 $ 126,586
Rental expenses:
Real estate taxes and insurance 20,020 12,494
Personnel 12,633 11,797
Utilities 8,367 7,083
Repair and maintenance 7,209 6,790
Administrative and marketing 3,333 3,286
Property management 4,142 3,481
Other operating expenses 1,496 1,004
57,200 45,935
Non-property income:
Loss from unconsolidated entities (717 ) (374 )
Tax (expense)/benefit for taxable REIT subsidiary (51 ) 1,265
Interest and other income 5,024 4,627
4,256 5,518
Other expenses:
Real estate depreciation and amortization 68,985 52,435
Interest 36,509 40,506
Net gain on debt extinguishment (including $1,754 (7,113 ) (4,739 )
write-off of convertible debt premium in 2009)
Amortization of convertible debt premium 1,296 1,670
Total interest 30,692 37,437
Hurricane related expenses 241 -
General and administrative 9,614 9,769
Other depreciation and amortization 1,394 929
110,926 100,570
Loss from continuing operations (13,255 ) (14,401 )
(Loss)/income from discontinued operations (168 ) 786,856
Consolidated net (loss)/income (13,423 ) 772,455
Net loss/(income) attributable to non-controlling 794 (48,736 )
interests
Net (loss)/income attributable to UDR, Inc. (12,629 ) 723,719
Distributions to preferred stockholders - Series E (931 ) (931 )
(Convertible)
Distributions to preferred stockholders - Series G (1,869 ) (2,278 )
Net (loss)/income available to common stockholders $ (15,429 ) $ 720,510
Earnings per weighted average common share - basic
and diluted: (1)
Loss from continuing operations available to ($0.10 ) ($0.12 )
common stockholders
(Loss)/income from discontinued operations ($0.00 ) $ 5.17
Net (loss)/income available to common stockholders ($0.10 ) $ 5.05
Common distributions declared per share (1) $ 0.305 $ 0.305
Weighted average number of common shares 147,614 142,547
outstanding - basic (1)
Weighted average number of common shares 147,614 142,547
outstanding - diluted (1)
Amounts for all periods represented have been adjusted to reflect the
(1) issuance of 11.4 million common shares issued in connection with the
Company's January 29, 2009 special dividend.
UDR
Funds From Operations
(Unaudited)
Three Months Ended
March 31,
In thousands, except per share amounts 2009 2008
Net (loss)/income attributable to UDR, Inc. $ (12,629 ) $ 723,719
Distributions to preferred stockholders (2,800 ) (3,209 )
Real estate depreciation and amortization, including 68,985 52,435
discontinued operations
Non-controlling interest, including discontinued (794 ) 48,736
operations
Real estate depreciation and amortization on 1,143 745
unconsolidated joint ventures
Net loss/(gains) on the sale of depreciable property 168 (767,962 )
in discontinued operations, excluding RE3
Funds from operations ("FFO") - basic $ 54,073 $ 54,464
Distribution to preferred stockholders - Series E 931 931
(Convertible)
Funds from operations - diluted $ 55,004 $ 55,395
FFO per common share - basic $ 0.35 $ 0.36
FFO per common share - diluted $ 0.35 $ 0.35
Write-off of convertible debt premium due to adoption 1,754 -
of APB 14-1
Amortization of convertible debt premium due to 1,296 1,670
adoption of APB 14-1
Funds from operations as adjusted - diluted $ 58,054 $ 57,065
FFO as adjusted per common share - diluted $ 0.37 $ 0.37
Weighted average number of common shares and OP Units 155,662 152,251
outstanding - basic (1)
Weighted average number of common shares, OP Units,
and common stock equivalents outstanding - diluted 158,763 156,095
(1)
(1) Amounts for all periods represented have been adjusted to reflect the
issuance of 11.4 million common shares issued in connection with the Company's
January 29, 2009 special dividend.
FASB Staff Position APB 14-1 requires companies to expense, on a current and
retroactive basis, certain implied costs of the option value related to
convertible debt and is effective for fiscal years beginning on or after
December 15, 2008. Adoption of APB 14-1 results in the recognition of non-cash
charges.
FFO is defined as net income (computed in accordance with GAAP), excluding gains
(or losses) from sales of depreciable property, premiums or original issuance
costs associated with preferred stock redemptions, 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. UDR 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 UDR's activities in accordance with generally
accepted accounting principles and is not necessarily indicative of cash
available to fund cash needs.
UDR
Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
In thousands, except share and per share amounts 2009 2008
ASSETS
Real estate owned:
Real estate held for investment $ 5,693,789 $ 5,644,930
Less: accumulated depreciation (1,146,487 ) (1,078,637 )
4,547,302 4,566,293
Real estate under development
(net of accumulated depreciation of $544 and 209,040 186,771
$52)
Total real estate owned, net of accumulated 4,756,342 4,753,064
depreciation
Cash and cash equivalents 37,132 12,740
Available-for-sale securities 32,133 -
Restricted cash 8,617 7,726
Deferred financing costs, net 29,262 29,168
Notes receivable 207,300 207,450
Investment in unconsolidated joint ventures 47,415 47,048
Other assets 66,562 85,842
Other assets - real estate held for disposition 767 767
Total assets $ 5,185,530 $ 5,143,805
LIABILITIES AND STOCKHOLDERS' EQUITY
Secured debt $ 1,717,244 $ 1,462,471
Unsecured debt 1,643,177 1,798,662
Real estate taxes payable 19,141 14,035
Accrued interest payable 21,574 20,744
Security deposits and prepaid rent 30,165 28,829
Distributions payable 49,817 57,144
Deferred gains on the sale of depreciable 28,840 28,845
property
Accounts payable, accrued expenses, and other 67,044 71,395
liabilities
Other liabilities - real estate held for 1,274 1,204
disposition
Total liabilities 3,578,276 3,483,329
Redeemable non-controlling interests in 69,290 108,092
operating partnership
Stockholders' equity
Preferred stock, no par value; 50,000,000 shares
authorized 2,803,812 shares of 8.00% Series E 46,571 46,571
Cumulative Convertible issued and outstanding
(2,803,812 shares at December 31, 2008)
4,430,700 shares of 6.75% Series G Cumulative
Redeemable issued and outstanding (4,430,700 110,768 110,768
shares at December 31, 2008)
Common stock, $0.01 par value; 250,000,000
shares authorized 149,096,743 shares issued and 1,491 1,488
outstanding (148,781,115 shares at December 31,
2008)
Additional paid-in capital 1,857,320 1,850,871
Distributions in excess of net income (470,520 ) (448,737 )
Accumulated other comprehensive loss, net (11,055 ) (11,927 )
Total UDR, Inc. stockholders' equity 1,534,575 1,549,034
Non-controlling interest 3,389 3,350
Total equity 1,537,964 1,552,384
Total liabilities and stockholders' equity $ 5,185,530 $ 5,143,805
Source: UDR, Inc.
Contact: UDR, Inc.
David Messenger, 720-283-6120
CFO