UDR Announces Third Quarter 2012 Results
UDR Announces Third Quarter 2012 Results
~ New York Enters Same-Store Portfolio ~
The Company generated Funds from Operations (FFO) of $86.5 million or $0.33 per diluted share, for the quarter ended September 30, 2012, as compared to $73.0 million, or $0.32 per diluted share, in the third quarter of 2011. Excluding non-recurring items, the Company's third quarter 2012 FFO-Core was $0.33 per diluted share. See the reconciliation below for further detail.
|Q3 2012||Q3 2011||YTD 2012||YTD 2011|
|FFO- Core per diluted share||$0.33||$0.32||$1.00||$0.94|
|Benefit/(Cost) associated with debt extinguishment||-||0.002||0.001||(0.013)|
|Gain on sale of marketable securities||-||0.011||-||0.027|
|Redemption of preferred stock||-||-||(0.011)||-|
|Gain on sale of TRS property||-||-||0.031||0.004|
|FFO- Reported per diluted share||$0.33||$0.32||$1.01||$0.93|
A reconciliation of FFO to GAAP Net Income can be found on Attachment 2 of the Company's third quarter 2012 Supplemental Financial Information.
"The strong supply and demand fundamentals present in the multifamily industry continue to support the positive outlook for our business," said Tom Toomey, UDR's President and CEO. Mr. Toomey continued, "The actions we have taken over the past three years to grow our portfolio in select high-barrier to entry markets and deleverage our balance sheet directly align with our objective of creating sustainable shareholder value."
Same-store revenue increased 5.5 percent year-over-year while net operating income (NOI) increased 6.4 percent for the third quarter 2012. Same-store physical occupancy increased 10 basis points year-over-year to 95.8 percent. Same-store expenses increased 3.6 percent driven primarily by higher real estate taxes.
Resident turnover increased to an annualized rate of 66 percent from 65 percent in the third quarter of 2011.
Summary Same-Store Results Third Quarter 2012 versus Third Quarter 2011
% of Same-
Based on QTD 2012 NOI.
Average same-store occupancy for the quarter.
During the third quarter, 36,452 apartment homes, or approximately 87 percent of 41,827 total consolidated apartment homes, were classified as same-store. The Company defines same-store as all multifamily communities owned and stabilized for at least one year as of the beginning of the most recent quarter.
Sequentially, same-store NOI increased by 0.9 percent driven by revenue growth of 1.8 percent and offset by a 3.6 percent increase in same-store expenses.
For the nine months ended September 30, 2012, the Company's same-store revenue increased 5.3 percent as compared to the prior year while expenses increased 2.4 percent resulting in a same-store NOI increase of 6.8 percent as compared to the prior year period in 2011. Year-over-year occupancy was flat at 95.7 percent.
Summary Same-Store Results YTD 2012 versus YTD 2011
% of Same-
Based on YTD 2012 NOI.
Average same-store occupancy for YTD 2012.
During the six months ended September 30, 2012, 33,823 apartment homes, or approximately 81 percent of 41,827 total consolidated apartment homes, were classified as same-store. The Company defines same-store as all multifamily communities owned and stabilized for at least one year as of the beginning of the most recent year.
Improving the Company's operational efficiency, while increasing resident satisfaction, are the compelling factors for our continued investment in technology. Residents have a high utilization rate of the Company's technology platform:
|Established Technology Initiatives:||Q3 2012||Q3 2011|
|Resident payments received via ACH||76%||77%|
|Service requests entered through MyUDR.com||76%||80%|
|Move-ins initiated via an internet source||60%||63%|
|Renewals completed electronically||84%||87%|
The Company commenced construction on its Beach Walk development in Huntington Beach, CA. Prior to commencement, the Company acquired the remaining 10 percent ownership interest in Beach Walk from its former joint venture partner. The community will consist of 173 homes, has an estimated construction cost of $50.7 million and is expected to be delivered in the second quarter of 2014.
Joint Venture Investment Activity
The Company, through a joint venture, acquired a land parcel in Santa Monica, CA for $10.3 million.
At September 30, 2012, the Company had $1.1 billion in availability through a combination of cash and undrawn capacity on its credit facilities, giving the Company ample flexibility to meet its near-term capital needs for debt maturities, development and redevelopment activities.
The Company's total indebtedness at September 30, 2012 was $3.3 billion. The Company ended the third quarter with fixed-rate debt representing 89 percent of its total debt, a total blended interest rate of 4.5 percent and a weighted average maturity of 4.8 years. UDR's fixed charge coverage ratio (adjusted for non-recurring items) was 2.9 times.
Post Quarter Activity
Joint Venture Investment Activity
In a transaction scheduled to close on October 31, the Company will exchange its ownership interests in four operating communities and two land parcels in the UDR/MetLife I joint venture, in addition to $10 million in cash, for an increased ownership interest in The Olivian, an A-quality high-rise building located in downtown Seattle. At closing, the Company will own 50 percent of The Olivian and the community will be contributed to the UDR/MetLife II joint venture. The Company will continue to fee manage the four operating communities it will exchange out of. Additional transaction details are provided below:
|Acquired Ownership Interest|
|Seattle||224||2009||$3,451||96.6%||9.1%||ML I||50.0%||ML II|
|Relinquished Ownership Interest|
|W. Avg./Total||1,159||2009||$1,896||96.4%||12.0%||ML I||0.0%||n/a|
|2 Land Parcels|
|1||3Q 2012 averages.|
|2||ML I represents the UDR/MetLife I joint venture. ML II represents the UDR/MetLife II joint venture.|
The Olivian has a 4.5 percent, $63.4 million loan with a term of 7 years. Debt on the four operating communities and two land parcels in which UDR exchanged out of totaled $134.7 million, carried a weighted average interest rate of 3.5 percent and had a term of 7 years.
The Company offers Supplemental Financial Information that provides details on the financial position and operating results of the Company which is available on the Company's website at www.udr.com.
Conference Call and Webcast Information
The Company will host a webcast and conference call at 11:00 a.m. EDT on October 29, 2012 to discuss third quarter results. A webcast will be available on the Company'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, download and install any necessary audio software.
To participate in the teleconference dial 877-941-0844 for domestic and 480-629-9835 for international and provide the following conference ID number: 4565351.
A replay of the conference call will be available through November 30, 2012, by dialing 800-406-7325 for domestic and 303-590-3030 for international and entering the confirmation number, 4565351, when prompted for the pass code.
A replay of the call will be available for 90 days on the Company's website at www.udr.com.
Full Text of the Earnings Report and Supplemental Financial Information
Internet -- The full text of the earnings report and Supplemental Financial Information will be available on the Company's website at www.udr.com.
Mail -- For those without Internet access, the third quarter 2012 earnings report and Supplemental Financial Information will be available by mail or fax, on request. To receive a copy, please call UDR Investor Relations at 720-348-7762.
Forward Looking Statements
Certain statements made in this press release may constitute "forward-looking statements." Words such as "expects," "intends," "believes," "anticipates," "plans," "likely," "will," "seeks," "estimates" and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement, 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, developments and redevelopments not achieving anticipated results, delays in completing developments, redevelopments 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® development, expectations concerning the joint ventures with third parties, expectations that automation will help grow net 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. Actual results may differ materially from those described in the forward-looking statements. 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 update or revise 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 under the U.S. securities laws.
This release and these forward-looking statements include UDR's analysis and conclusions and reflect UDR's judgment as of the date of these materials. UDR assumes no obligation to revise or update to reflect future events or circumstances.
About UDR, Inc.
UDR, Inc. (NYSE:UDR), an S&P 400 company, 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 September 30, 2012, UDR owned or had an ownership position in 54,985 apartment homes including 2,441 homes under development. For 40 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.
|Consolidated Statements of Operations(1)|
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|In thousands, except per share amounts||2012||2011||2012||2011|
|Real estate taxes and insurance||22,633||19,949||65,079||55,113|