Company Announcements

UDR Announces Second Quarter 2021 Results and Increases Full-year 2021 Guidance Ranges

DENVER--(BUSINESS WIRE)--Jul. 28, 2021-- UDR, Inc. (the “Company”) (NYSE: UDR), announced today its second quarter 2021 earnings results. Net Income, Funds from Operations (“FFO”), FFO as Adjusted (“FFOA”), and Adjusted FFO (“AFFO”) per diluted share for the quarter ended June 30, 2021 are detailed below.

 

Quarter Ended June 30

 

Metric

2Q 2021
Actual

2Q 2021
Guidance

2Q 2020
Actual

$ Change vs.
Prior Year Period

% Change vs.
Prior Year Period

Net Income per diluted share

$0.04

$0.01 to $0.03

$0.19

$(0.15)

(78.9)%

FFO per diluted share

$0.52

$0.47 to $0.49

$0.51

$0.01

2.0%

FFOA per diluted share

$0.49

$0.47 to $0.49

$0.51

$(0.02)

(3.9)%

AFFO per diluted share

$0.44

$0.42 to $0.44

$0.47

$(0.03)

(6.4)%

  • The Company reported net income attributable to common stockholders of $10.7 million, or $0.04 per share, compared to $56.7 million, or $0.19 per share, in the prior year period. This decrease was primarily due to lower gains on sold properties and a decline in Same-Store (“SS”) net operating income (“NOI”), partially offset by lower depreciation expense, lower interest expense, and higher NOI from acquired communities.
  • SS results for the second quarter of 2021 as compared to the second quarter of 2020 and first quarter of 2021 are summarized below.

Growth / (Decline)

Year-Over-Year (“YOY”):
Q2 2021 vs. Q2 2020

Sequential:

Q2 2021 vs. Q1 2021

With concessions reflected on a cash basis:

 

 

SS Revenue

(1.0)%

1.8%

SS Expense

3.8%

(0.1)%

SS NOI

(3.1)%

2.7%

With concessions reflected on a straight-line basis:

 

 

SS Revenue

(1.8)%

1.8%

SS NOI

(4.1)%

2.7%

  • The Company’s weighted average SS physical occupancy for the second quarter of 2021 was 97.2 percent, compared to 96.1 percent for the second quarter of 2020 and 96.4 percent for the first quarter of 2021.
  • The Company continues to implement its Next Generation Operating Platform, which reduced second quarter 2021 SS controllable expenses by (1.6) percent sequentially and constrained growth to 2.0 percent YOY.
  • During the quarter, the Company deployed $405.6 million of capital comprising three community acquisitions and one land site purchase. Additionally, the Company committed an aggregate of $18.8 million to two Developer Capital Program (“DCP”) investments. Subsequent to quarter-end, the Company acquired one community for $170.0 million and entered into agreements to acquire two communities for a total of $239.5 million and sell one community for $124.0 million.
  • During the quarter, and as previously reported, the Company entered into forward equity sale agreements at a weighted average initial forward price per share of $49.17 for estimated future proceeds of approximately $425.6 million, subject to adjustment as described later in this release. No shares under these forward equity sale agreements have been settled.

“Second quarter 2021 results met the high-end of our guidance expectations. Accelerating operating trends across our portfolio, driven by the pace of the economic recovery, suggest a strong second half of the year. We have raised full-year 2021 guidance for the third time in 2021 due to strong pricing power and accretive transactions that we have completed or identified,” said Tom Toomey, UDR’s Chairman and CEO. “While emergency regulations remain in effect across numerous markets, assorted prohibitions are beginning to sunset as the health crisis abates and the economy continues its recovery.”

Outlook

For the third quarter of 2021, the Company has established the following earnings guidance ranges. For the full-year 2021, the Company increased its previously provided same-store and earnings guidance ranges(1):

 

Q3 2021
Outlook

Q2 2021
Actual

 

Updated

Full-Year 2021
Outlook

 

Prior

Full-Year 2021
Outlook

 

Change to
2021 Guidance,
at Midpoint

Net Income / (Loss) per share

$0.02 to $0.04

$0.04

$0.12 to $0.16

$0.07 to $0.13

$0.04

FFO per share

$0.49 to $0.51

$0.52

$1.85 to $1.89

$1.79 to $1.85

$0.05

FFOA per share

$0.49 to $0.51

$0.49

$1.97 to $2.01

$1.94 to $2.00

$0.02

AFFO per share

$0.44 to $0.46

$0.44

$1.79 to $1.83

$1.76 to $1.82

$0.02

YOY Growth/(Decline): concessions reflected on a cash basis:

SS Revenue

N/A

(1.0)%

(0.25)% to 0.75%

(1.25)% to 0.5%

0.625%

SS Expense

N/A

3.8%

1.0% to 3.0%

1.0% to 3.0%

-

SS NOI

N/A

(3.1)%

(1.0)% to 0.5%

(2.25)% to 0.0%

0.875%

YOY Growth/(Decline): concessions reflected on a straight-line basis:

SS Revenue

N/A

(1.8)%

(2.25)% to (1.25)%

(3.25)% to (1.5)%

0.625%

SS NOI

N/A

(4.1)%

(3.5)% to (2.0)%

(4.75)% to (2.5)%

0.875%

(1)

Additional assumptions for the Company’s third quarter and 2021 outlook can be found on Attachment 15 of the Company’s related quarterly Supplemental Financial Information. A reconciliation of FFO per share, FFOA per share, and AFFO per share to GAAP Net Income per share can be found on Attachment 16(D) of the Company’s related quarterly Supplemental Financial Information. Non-GAAP financial measures and other terms, as used in this earnings release, are defined and further explained on Attachments 16(A) through 16(D), “Definitions and Reconciliations,” of the Company’s related quarterly Supplemental Financial Information.

Recent Operating Trends

“We continue to see sequential improvement in traffic, occupancy, rate growth, and collections in all of our markets,” said Mike Lacy, UDR’s Senior Vice President of Operations. “We achieved an all-time high portfolio occupancy of 97.5 percent in June, pricing power continues to improve with our loss-to-lease in the low-double digits, and we continue to capture elevated levels of demand across our markets through a variety of Next Generation Operating Platform initiatives.”

The table presented below highlights first quarter 2021, second quarter 2021, and preliminary July 2021 residential operating trends.

Summary of First Quarter 2021, Second Quarter 2021, and July 2021 Residential Operating Trends(1)

As of and Through July 26, 2021

 

Metric

Q1 2021

Apr
2021

May
2021

Jun
2021

Q2 2021

Jul 2021
(Range)

Cash revenue collected (% of billed) during billing period

95.2%

94.0%

94.1%

94.0%

95.5%

94.0% - 94.2%

Cash revenue collected (% of billed) subsequent to billing period(1)

2.1%

3.0%

2.6%

1.8%

0.9%

N/A

Cash revenue collected (% of

billed) as of July 26, 2021(1)

97.3%

96.9%

96.6%

95.8%

96.4% (2)

93.4%

Revenue reserved or written-off(2)

2.6%

N/A

N/A

N/A

1.7%

N/A

Same-Store Metrics

 

 

 

 

 

 

Leasing Traffic (daily average)(3)

1,013

1,532

1,608

1,685

1,608

1,450 - 1,550

Weighted Average

Physical Occupancy

96.4%

96.8%

97.3%

97.5%

97.2%

97.4% - 97.6%

Effective Blended

Lease Rate Growth(3)

(4.9)%

(1.6)%

0.3%

3.1%

0.9%

5.0% - 6.0%

(1)

Metrics shown here are as of July 26, 2021, and are for the Company’s total residential portfolio, unless otherwise indicated. The summation of cash revenue collected during and subsequent to a billing period may not equate to the total cash revenue collected as of July 26, 2021 for that same billing period due to rounding. Cash revenue collected as a percentage of billed revenue for Q2 2020, Q3 2020, and Q4 2020 are 98.3 percent, 98.0 percent, and 97.6 percent, respectively, as of July 26, 2021.

(2)

For Q2 2021, the Company reserved (reflected as a reduction to revenue) an incremental approximately 0.0 percent, or $0.1 million, of billed residential revenue for bad debt, including $0 for the Company’s share from unconsolidated joint ventures. This brings the Company’s total bad debt reserve to $18.1 million, including $1.1 million for the Company’s share from unconsolidated joint ventures, which compares to a quarter-end accounts receivable balance of $25.9 million.

(3)

The Company defines (a) Leasing Traffic as average daily leads to lease a home for the period indicated and (b) Effective Blended Lease Rate Growth as the combined proportional growth as a result of Effective New Lease Rate Growth and Effective Renewal Lease Rate Growth. Management considers Effective Blended Lease Rate Growth a useful metric for investors as it assesses combined proportional market-level new and in-place demand trends. Please refer to the “Definitions and Reconciliations” section of the Company’s related quarterly Supplemental Financial Information for additional details.

Second Quarter 2021 Operations

In the second quarter, total revenue increased by $4.1 million year-over-year, or 1.3 percent, to $311.3 million. This increase was primarily attributable to growth in revenue from acquired and stabilized, non-mature communities, partially offset by declines in revenue from same-store communities. The second quarter annualized rate of turnover decreased by 170 basis points versus the prior year period to 47.5 percent.

Summary of Same-Store Results in Second Quarter 2021 versus Second Quarter 2020

Region

Revenue Growth /
(Decline)

Expense

Growth /
(Decline)

NOI
Growth /
(Decline)

% of Same-Store

Portfolio(1)

Physical
Occupancy(2)

YOY Change
in Occupancy

West

(5.4)%

3.3%

(8.3)%

35.8%

97.0%

1.4%

Mid-Atlantic

0.9%

4.2%

(0.4)%

22.2%

97.1%

0.3%

Northeast

(3.2)%

7.8%

(8.4)%

16.7%

96.8%

2.8%

Southeast

6.2%

3.3%

7.7%

12.2%

97.7%

0.5%

Southwest

3.0%

(1.4)%

6.0%

7.1%

97.1%

0.2%

Other Markets

5.0%

2.4%

6.1%

6.0%

97.8%

1.6%

Total (Cash)

(1.0)%

3.8%

(3.1)%

100.0%

97.2%

1.1%

Total (Straight-Line)

(1.8)%

-

(4.1)%

-

-

-

(1)

Based on Q2 2021 Same-Store NOI. For definitions of terms, please refer to the “Definitions and Reconciliations” section of the Company’s related quarterly Supplemental Financial Information.

(2)

Weighted average Same-Store physical occupancy for the quarter.

The table below includes sequential Same-Store results by region, with concessions accounted for on cash and straight-line bases.

Summary of Same-Store Results in Second Quarter 2021 versus First Quarter 2021

Region

Revenue
Growth /
(Decline)

Expense

Growth /
(Decline)

NOI
Growth /
(Decline)

% of Same-Store

Portfolio(1)

Physical
Occupancy(2)

Sequential
Change in
Occupancy

West

1.3%

0.1%

1.7%

35.8%

97.0%

1.2%

Mid-Atlantic

2.8%

2.1%

3.1%

22.2%

97.1%

0.5%

Northeast

(0.4)%

(5.4)%

2.5%

16.7%

96.8%

1.3%

Southeast

3.1%

0.9%

4.2%

12.2%

97.7%

0.5%

Southwest

2.9%

2.5%

3.1%

7.1%

97.1%

0.2%

Other Markets

3.3%

3.4%

3.2%

6.0%

97.8%

0.6%

Total (Cash)

1.8%

(0.1)%

2.7%

100.0%

97.2%

0.8%

Total (Straight-Line)

1.8%

-

2.7%

-

-

-

(1)

Based on Q2 2021 Same-Store NOI. For definitions of terms, please refer to the “Definitions and Reconciliations” section of the Company’s related quarterly Supplemental Financial Information.

(2)

Weighted average Same-Store physical occupancy for the quarter.

Year-to-date (“YTD”), for the six months ended June 30, 2021, total revenue decreased by $15.9 million year-over-year, or 2.5 percent, to $612.8 million. This decrease was primarily attributable to declines in revenue from same-store communities, partially offset by growth in revenue from acquired and stabilized, non-mature communities. The year-to-date annualized rate of turnover decreased by 30 basis points versus the prior year period to 43.5 percent.

The table below includes YTD Same-Store results by region, with concessions accounted for on cash and straight-line bases, for the six months ended June 30, 2021.

Summary of Same-Store Results YTD 2021 versus YTD 2020

Region

Revenue
Growth /
(Decline)

Expense

Growth /
(Decline)

NOI
Growth /
(Decline)

% of Same-Store

Portfolio(1)

Physical
Occupancy(2)

YTD YOY
Change in
Occupancy

West

(8.0)%

1.8%

(11.2)%

36.3%

96.4%

0.1%

Mid-Atlantic

(1.6)%

2.9%

(3.5)%

22.4%

96.9%

-

Northeast

(6.6)%

8.2%

(13.3)%

16.9%

96.1%

0.8%

Southeast

4.1%

6.9%

2.9%

11.7%

97.5%

0.5%

Southwest

0.5%

(0.9)%

1.4%

7.2%

97.0%

-

Other Markets

2.5%

1.3%

3.1%

5.5%

97.6%

1.4%

Total (Cash)

(3.8)%

3.6%

(6.9)%

100.0%

96.8%

0.3%

Total (Straight-Line)

(4.3)%

-

(7.6)%

-

-

-

(1)

Based on YTD 2021 Same-Store NOI. For definitions of terms, please refer to the “Definitions and Reconciliations” section of the Company’s related quarterly Supplemental Financial Information.

(2)

Weightedaverage Same-Store physical occupancy for YTD 2021.

Transactional Activity

The table below summarizes the Company’s transactional activity completed during the quarter.

Community / Property

Location (MSA)

Purchase

Price

($ millions)

Homes

Avg. Monthly

Revenue per
Occupied Home(1)

Physical
Occupancy(1)

Debt
Assumed

($ millions)

Acquisitions

 

 

 

 

 

 

The Canal

Dallas, TX

$110.2

636

$1,417

92.9%

$42.0

Cool Springs at Frisco Bridges

Dallas, TX

166.9

945

1,174

97.7%

89.5

Seneca Place

Washington, D.C.

121.9

468

1,374

98.5%

-

Meridian (land)

Tampa, FL

6.6

-

-

-

-

Alameda Point Block 11 (land)

San Francisco, CA

N/A(2)

-

-

-

-

Total / Weighted Avg.

 

$405.6

2,049

$1,294

96.4%

$131.5

(1)

Average Monthly Revenue per Occupied Home and Physical Occupancy are weighted averages for the quarter ended June 30, 2021.

(2)

The Company previously had a secured note with an unaffiliated third party with an aggregate commitment of $20.0 million, all of which was previously funded. The note was secured by a parcel of land and related land improvements. In September 2020, the developer defaulted on the loan. As a result of the default, in April 2021, the Company took title to the property pursuant to a deed in lieu of foreclosure.

Subsequent to quarter-end, the Company acquired one community and entered into agreements to acquire two communities and sell one wholly owned community, as summarized below.

Community / Property

Location (MSA)

Contract
Price

($ millions)

Homes

Avg. Monthly
Revenue per
Occupied Home(1)

Physical
Occupancy(1)

Debt
Assumed

($ millions)

Acquisitions Completed

 

 

 

 

 

 

Brio(2)

Seattle, WA

$170.0

259

$2,581

94.6%

-

Acquisitions Under Contract

 

 

 

 

 

 

Germantown, MD

Washington, D.C.

124.5

544

1,429

97.6%

-

King of Prussia, PA

Philadelphia, PA

115.0

320

1,913

92.8%

-

Subtotal / Weighted Avg.

 

$409.5

1,123

$1,826

95.5%

-

Dispositions Under Contract

 

 

 

 

 

 

1818 Platinum Triangle

Orange County, CA

$(124.0)

265

$2,449

97.3%

-

(1)

Average Monthly Revenue per Occupied Home and Physical Occupancy are as of June 30, 2021.

(2)

In November 2019, UDR made a $115.0 million secured loan to a third-party developer to finance a 259 apartment home community that was completed in 2020. UDR also entered into a purchase option agreement at the time the loan was funded which gave UDR the option to acquire the community at a fixed price. The option was exercised in August 2020, and UDR acquired and consolidated the community on July 1, 2021 for a cash outlay of $37.0 million. In connection with the acquisition of the community, the loan and the unpaid accrued interest were paid in full. As of June 30, 2021, the loan was secured by the community and was reflected in notes receivable, net on the Consolidated Balance Sheets and interest and other income/(expense), net on the Consolidated Statements of Operations in accordance with GAAP.

All properties acquired during the quarter, or under contract to be acquired, are located proximate to wholly owned UDR communities, which the Company expects should drive additional operating efficiencies as its Next Generation Operating Platform is deployed.

Development and Redevelopment Activity

At the end of the second quarter, the Company’s development pipeline totaled $501.5 million and was 57 percent funded. The Company’s active pipeline includes five development communities, one each in Denver, CO; Dublin, CA; King of Prussia, PA; Addison, TX; and Washington, D.C., for a combined total of 1,417 homes.

At the end of the second quarter, the Company’s redevelopment pipeline totaled $18.1 million and was 16 percent funded. With the commencement of redevelopment activity at one community in San Francisco, CA, during the quarter, the Company’s active pipeline includes two communities, one each in Newport Beach, CA, and San Francisco, CA.

Developer Capital Program (“DCP”) Activity

At the end of the second quarter, the Company’s preferred equity investments under its DCP platform, including accrued return, totaled $297.6 million with a weighted average return rate of 10.7 percent and weighted average estimated remaining term of 2.7 years.

During the quarter, the Company committed to invest $18.8 million in two DCP projects, as summarized below.

Community / Property

Location (MSA)

Commitment

($ millions)

Homes

Return Rate

Investment Type

Infield, Phase I

Orlando, FL

$16.0

384

14.0%

Preferred Equity

Infield, Phase II

Orlando, FL

2.8

-

14.0%

Secured Loan

Total / Weighted Avg.

 

$18.8

384

14.0%

 

Capital Markets and Balance Sheet Activity

As previously announced, during the quarter the Company entered into forward equity sale agreements for approximately 8.7 million shares of common stock at a weighted average initial forward price per share of $49.17, which will be adjusted at settlement to reflect the then-current federal funds rate and the amount of dividends paid to holders of UDR common stock over the term of the forward equity sale agreements. 6.1 million shares are subject to forward equity sale agreements entered into in connection with an underwritten public offering and approximately 2.6 million shares are subject to forward equity sale agreements under the Company’s at-the-market equity program. No shares under any of these forward equity sale agreements have been settled. The final dates by which shares sold under the forward equity sale agreements must be settled range between June 1, 2022 and June 20, 2022.

Subsequent to quarter-end, the Company increased the maximum aggregate capacity under its commercial paper program to $700.0 million from $500.0 million. The program bears an interest rate of 0.25 percent, the equivalent of LIBOR plus a spread of 16 basis points.

As of June 30, 2021, the Company had $681.1 million of liquidity through a combination of cash and undrawn capacity on its credit facilities, plus estimated proceeds of approximately $830.2 million from the potential settlement of approximately 17.9 million shares subject to previously-announced forward equity sale agreements (subject to adjustment as described above), for a total of $1.51 billion in liquidity. Please see Attachment 15 of the Company’s related quarterly Supplemental Financial Information for additional details on projected capital sources and uses.

The Company’s total indebtedness as of June 30, 2021 was $5.5 billion with no remaining consolidated maturities until 2023, excluding principal amortization, amounts on the Company’s commercial paper program and amounts on the Company’s working capital credit facility. In the table below, the Company has presented select balance sheet metrics for the quarter ended June 30, 2021 and the comparable prior year period.

 

Quarter Ended June 30

Balance Sheet Metric

2Q 2021

2Q 2020

Change

Fixed-Rate Debt as a percentage of Total Debt

89.7%

94.4%

(4.7)%

Weighted Average Interest Rate

2.7%

3.2%

(0.5)%

Weighted Average Years to Maturity

7.5

7.0

0.5

Consolidated Fixed Charge Coverage Ratio

4.8x

4.6x

0.2x

Consolidated Debt as a percentage of Total Assets

36.9%

34.2%

2.7%

Consolidated Net-Debt-to-EBITDAre

7.4x

6.2x

1.2x

Dividend

As previously announced, the Company’s Board of Directors declared a regular quarterly dividend on its common stock for the second quarter of 2021 in the amount of $0.3625 per share. The dividend will be paid in cash on August 2, 2021 to UDR common shareholders of record as of July 12, 2021. The second quarter 2021 dividend will represent the 195th consecutive quarterly dividend paid by the Company on its common stock.

Supplemental Information

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 ir.udr.com.

Attachment 16(A)

UDR, Inc.
Definitions and Reconciliations
June 30, 2021
(Unaudited)

Acquired Communities: The Company defines Acquired Communities as those communities acquired by the Company, other than development and redevelopment activity, that did not achieve stabilization as of the most recent quarter.

Adjusted Funds from Operations ("AFFO") attributable to common stockholders and unitholders: The Company defines AFFO as FFO as Adjusted attributable to common stockholders and unitholders less recurring capital expenditures on consolidated communities that are necessary to help preserve the value of and maintain functionality at our communities.

Management considers AFFO a useful supplemental performance metric for investors as it is more indicative of the Company's operational performance than FFO or FFO as Adjusted. AFFO is not intended to represent cash flow or liquidity for the period, and is only intended to provide an additional measure of our operating performance. The Company believes that net income/(loss) attributable to common stockholders is the most directly comparable GAAP financial measure to AFFO. Management believes that AFFO is a widely recognized measure of the operations of REITs, and presenting AFFO enables investors to assess our performance in comparison to other REITs. However, other REITs may use different methodologies for calculating AFFO and, accordingly, our AFFO may not always be comparable to AFFO calculated by other REITs. AFFO should not be considered as an alternative to net income/(loss) (determined in accordance with GAAP) as an indication of financial performance, or as an alternative to cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions. A reconciliation from net income/(loss) attributable to common stockholders to AFFO is provided on Attachment 2.

Consolidated Fixed Charge Coverage Ratio - adjusted for non-recurring items: The Company defines Consolidated Fixed Charge Coverage Ratio - adjusted for non-recurring items as Consolidated Interest Coverage Ratio - adjusted for non-recurring items divided by total consolidated interest, excluding the impact of costs associated with debt extinguishment, plus preferred dividends.

Management considers Consolidated Fixed Charge Coverage Ratio - adjusted for non-recurring items a useful metric for investors as it provides ratings agencies, investors and lending partners with a widely-used measure of the Company’s ability to service its consolidated debt obligations as well as compare leverage against that of its peer REITs. A reconciliation of the components that comprise Consolidated Fixed Charge Coverage Ratio - adjusted for non-recurring items is provided on Attachment 4(C) of the Company's quarterly supplemental disclosure.

Consolidated Interest Coverage Ratio - adjusted for non-recurring items: The Company defines Consolidated Interest Coverage Ratio - adjusted for non-recurring items as Consolidated EBITDAre – adjusted for non-recurring items divided by total consolidated interest, excluding the impact of costs associated with debt extinguishment.

Management considers Consolidated Interest Coverage Ratio - adjusted for non-recurring items a useful metric for investors as it provides ratings agencies, investors and lending partners with a widely-used measure of the Company’s ability to service its consolidated debt obligations as well as compare leverage against that of its peer REITs. A reconciliation of the components that comprise Consolidated Interest Coverage Ratio - adjusted for non-recurring items is provided on Attachment 4(C) of the Company's quarterly supplemental disclosure.

Consolidated Net Debt-to-EBITDAre - adjusted for non-recurring items: The Company defines Consolidated Net Debt-to-EBITDAre - adjusted for non-recurring items as total consolidated debt net of cash and cash equivalents divided by annualized Consolidated EBITDAre - adjusted for non-recurring items. Consolidated EBITDAre - adjusted for non-recurring items is defined as EBITDAre excluding the impact of income/(loss) from unconsolidated entities, adjustments to reflect the Company’s share of EBITDAre of unconsolidated joint ventures and other non-recurring items including, but not limited to casualty-related charges/(recoveries), net of wholly owned communities.

Management considers Consolidated Net Debt-to-EBITDAre - adjusted for non-recurring items a useful metric for investors as it provides ratings agencies, investors and lending partners with a widely-used measure of the Company’s ability to service its consolidated debt obligations as well as compare leverage against that of its peer REITs. A reconciliation between net income/(loss) and Consolidated EBITDAre - adjusted for non-recurring items is provided on Attachment 4(C) of the Company's quarterly supplemental disclosure.

Controllable Expenses: The Company refers to property operating and maintenance expenses as Controllable Expenses.

Controllable Operating Margin: The Company defines Controllable Operating Margin as (i) rental income less Controllable Expenses (ii) divided by rental income. Management considers Controllable Operating Margin a useful metric as it provides investors with an indicator of the Company’s ability to limit the growth of expenses that are within the control of the Company.

Development Communities: The Company defines Development Communities as those communities recently developed or under development by the Company, that are currently majority owned by the Company and have not achieved stabilization as of the most recent quarter.

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre): The Company defines EBITDAre as net income/(loss) (computed in accordance GAAP), plus interest expense, including costs associated with debt extinguishment, plus real estate depreciation and amortization, plus other depreciation and amortization, plus (minus) income tax provision/(benefit), net, (minus) plus net gain/(loss) on the sale of depreciable real estate owned, plus impairment write-downs of depreciable real estate, plus the adjustments to reflect the Company’s share of EBITDAre of unconsolidated joint ventures. The Company computes EBITDAre in accordance with standards established by the National Association of Real Estate Investment Trusts, or Nareit, which may not be comparable to EBITDAre reported by other REITs that do not compute EBITDAre in accordance with the Nareit definition, or that interpret the Nareit definition differently than the Company does. The White Paper on EBITDAre was approved by the Board of Governors of Nareit in September 2017.

Management considers EBITDAre a useful metric for investors as it provides an additional indicator of the Company’s ability to incur and service debt, and enables investors to assess our performance against that of its peer REITs. EBITDAre should be considered along with, but not as an alternative to, net income and cash flow as a measure of the Company’s activities in accordance with GAAP. EBITDAre does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of funds available to fund our cash needs. A reconciliation between net income/(loss) and EBITDAre is provided on Attachment 4(C) of the Company's quarterly supplemental disclosure.

Effective Blended Lease Rate Growth: The Company defines Effective Blended Lease Rate Growth as the combined proportional growth as a result of Effective New Lease Rate Growth and Effective Renewal Lease Rate Growth. Management considers Effective Blended Lease Rate Growth a useful metric for investors as it assesses combined proportional market-level, new and in-place demand trends.

Effective New Lease Rate Growth: The Company defines Effective New Lease Rate Growth as the increase in gross potential rent realized less concessions for the new lease term (current effective rent) versus prior resident effective rent for the prior lease term on new leases commenced during the current quarter.

Management considers Effective New Lease Rate Growth a useful metric for investors as it assesses market-level new demand trends.

Effective Renewal Lease Rate Growth: The Company defines Effective Renewal Lease Rate Growth as the increase in gross potential rent realized less concessions for the new lease term (current effective rent) versus prior effective rent for the prior lease term on renewed leases commenced during the current quarter.

Management considers Effective Renewal Lease Rate Growth a useful metric for investors as it assesses market-level, in-place demand trends.

Estimated Quarter of Completion: The Company defines Estimated Quarter of Completion of a development or redevelopment project as the date on which construction is expected to be completed, but it does not represent the date of stabilization.

Attachment 16(B)

UDR, Inc.
Definitions and Reconciliations
June 30, 2021
(Unaudited)

Funds from Operations as Adjusted ("FFO as Adjusted") attributable to common stockholders and unitholders: The Company defines FFO as Adjusted attributable to common stockholders and unitholders as FFO excluding the impact of other non-comparable items including, but not limited to, acquisition-related costs, prepayment costs/benefits associated with early debt retirement, impairment write-downs or gains and losses on sales of real estate or other assets incidental to the main business of the Company and income taxes directly associated with those gains and losses, casualty-related expenses and recoveries, severance costs and legal and other costs.

Management believes that FFO as Adjusted is useful supplemental information regarding our operating performance as it provides a consistent comparison of our operating performance across time periods and allows investors to more easily compare our operating results with other REITs. FFO as Adjusted is not intended to represent cash flow or liquidity for the period, and is only intended to provide an additional measure of our operating performance. The Company believes that net income/(loss) attributable to common stockholders is the most directly comparable GAAP financial measure to FFO as Adjusted. However, other REITs may use different methodologies for calculating FFO as Adjusted or similar FFO measures and, accordingly, our FFO as Adjusted may not always be comparable to FFO as Adjusted or similar FFO measures calculated by other REITs. FFO as Adjusted should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of financial performance, or as an alternative to cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity. A reconciliation from net income attributable to common stockholders to FFO as Adjusted is provided on Attachment 2.

Funds from Operations ("FFO") attributable to common stockholders and unitholders: The Company defines FFO attributable to common stockholders and unitholders as net income/(loss) attributable to common stockholders (computed in accordance with GAAP), excluding impairment write-downs of depreciable real estate related to the main business of the Company or of investments in non-consolidated investees that are directly attributable to decreases in the fair value of depreciable real estate held by the investee, gains and losses from sales of depreciable real estate related to the main business of the Company and income taxes directly associated with those gains and losses, plus real estate depreciation and amortization, and after adjustments for noncontrolling interests, and the Company’s share of unconsolidated partnerships and joint ventures. This definition conforms with the National Association of Real Estate Investment Trust's definition issued in April 2002 and restated in November 2018. In the computation of diluted FFO, if OP Units, DownREIT Units, unvested restricted stock, unvested LTIP Units, stock options, and the shares of Series E Cumulative Convertible Preferred Stock are dilutive, they are included in the diluted share count.

Management considers FFO a useful metric for investors as the Company uses 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 flow as a measure of the Company's activities in accordance with GAAP. FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of funds available to fund our cash needs. A reconciliation from net income/(loss) attributable to common stockholders to FFO is provided on Attachment 2.

Held For Disposition Communities: The Company defines Held for Disposition Communities as those communities that were held for sale as of the end of the most recent quarter.

Joint Venture Reconciliation at UDR's weighted average ownership interest:
 
In thousands

 

2Q 2021

 

YTD 2021

Income/(loss) from unconsolidated entities

$

9,751

 

$

14,673

 

Management fee

 

503

 

 

973

 

Financing fee

 

-

 

 

287

 

Interest expense

 

3,717

 

 

8,148

 

Debt extinguishment and other associated costs

 

-

 

 

1,395

 

Depreciation

 

7,930

 

 

16,135

 

General and administrative

 

65

 

 

129

 

Developer Capital Program (excludes Alameda Point Block 11, Brio and Infield Phase II)

 

(7,895

)

 

(14,922

)

Other (income)/expense

 

78

 

 

215

 

Realized/unrealized (gain)/loss on unconsolidated real estate technology investments

 

(6,218

)

 

(8,168

)

NOI related to sold properties

 

5

 

 

(82

)

(Gain)/loss on sales

 

-

 

 

(2,460

)

Total Joint Venture NOI at UDR's Ownership Interest

$

7,936

 

$

16,323

 

Net Operating Income (“NOI”): The Company defines NOI as rental income less direct property rental expenses. Rental income represents gross market rent and other revenues less adjustments for concessions, vacancy loss and bad debt. Rental expenses include real estate taxes, insurance, personnel, utilities, repairs and maintenance, administrative and marketing. Excluded from NOI is property management expense, which is calculated as 3.0% of property revenue, and land rent. Property management expense covers costs directly related to consolidated property operations, inclusive of corporate management, regional supervision, accounting and other costs.

Management considers NOI a useful metric for investors as it is a more meaningful representation of a community’s continuing operating performance than net income as it is prior to corporate-level expense allocations, general and administrative costs, capital structure and depreciation and amortization and is a widely used input, along with capitalization rates, in the determination of real estate valuations. A reconciliation from net income/(loss) attributable to UDR, Inc. to NOI is provided below.

In thousands

 

2Q 2021

 

 

1Q 2021

 

 

4Q 2020

 

 

 

3Q 2020

 

 

2Q 2020

 

Net income/(loss) attributable to UDR, Inc.

$

11,720

 

$

3,104

 

$

26,532

 

$

(25,258

)

$

57,771

 

Property management

 

9,273

 

 

8,995

 

 

8,659

 

 

8,879

 

 

8,797

 

Other operating expenses

 

4,373

 

 

4,435

 

 

6,153

 

 

5,543

 

 

6,100

 

Real estate depreciation and amortization

 

146,169

 

 

144,088

 

 

146,135

 

 

151,949

 

 

155,056

 

Interest expense

 

35,404

 

 

78,156

 

 

62,524

 

 

62,268

 

 

38,597

 

Casualty-related charges/(recoveries), net

 

(2,463

)

 

5,577

 

 

778

 

 

-

 

 

102

 

General and administrative

 

15,127

 

 

12,736

 

 

11,978

 

 

11,958

 

 

10,971

 

Tax provision/(benefit), net

 

135

 

 

619

 

 

668

 

 

187

 

 

1,526

 

(Income)/loss from unconsolidated entities

 

(9,751

)

 

(4,922

)

 

(4,516

)

 

(2,940

)

 

(8,021

)

Interest income and other (income)/expense, net

 

(2,536

)

 

(2,057

)

 

1,030

 

 

(2,183

)

 

(2,421

)

Joint venture management and other fees

 

(2,232

)

 

(1,615

)

 

(1,208

)

 

(1,199

)

 

(1,274

)

Other depreciation and amortization

 

2,602

 

 

2,601

 

 

2,074

 

 

3,887

 

 

2,027

 

(Gain)/loss on sale of real estate owned

 

-

 

 

(50,829

)

 

(57,974

)

 

-

 

 

(61,303

)

Net income/(loss) attributable to noncontrolling interests

 

815

 

 

170

 

 

2,019

 

 

(1,959

)

 

4,325

 

Total consolidated NOI

$

208,636

 

$

201,058

 

$

204,852

 

$

211,132

 

$

212,253

 

Attachment 16(C)

UDR, Inc.
Definitions and Reconciliations
June 30, 2021
(Unaudited)

NOI Enhancing Capital Expenditures ("Cap Ex"): The Company defines NOI Enhancing Capital Expenditures as expenditures that result in increased income generation or decreased expense growth over time.

Management considers NOI Enhancing Capital Expenditures a useful metric for investors as it quantifies the amount of capital expenditures that are expected to grow, not just maintain, revenues or to decrease expenses.

Non-Mature Communities: The Company defines Non-Mature Communities as those communities that have not met the criteria to be included in same-store communities.

Non-Residential / Other: The Company defines Non-Residential / Other as non-apartment components of mixed-use properties, land held, properties being prepared for redevelopment and properties where a material change in home count has occurred.

Other Markets: The Company defines Other Markets as the accumulation of individual markets where it operates less than 1,000 Same-Store homes. Management considers Other Markets a useful metric as the operating results for the individual markets are not representative of the fundamentals for those markets as a whole.

Physical Occupancy: The Company defines Physical Occupancy as the number of occupied homes divided by the total homes available at a community.

QTD Same-Store Communities: The Company defines QTD Same-Store Communities as those communities Stabilized for five full consecutive quarters. These communities were owned and had stabilized operating expenses as of the beginning of the quarter in the prior year, were not in process of any substantial redevelopment activities, and were not held for disposition.

Recurring Capital Expenditures: The Company defines Recurring Capital Expenditures as expenditures that are necessary to help preserve the value of and maintain functionality at its communities.

Redevelopment Communities: The Company generally defines Redevelopment Communities as those communities where substantial redevelopment is in progress that is expected to have a material impact on the community's operations, including occupancy levels and future rental rates.

Same-Store Revenue with Concessions on a Cash Basis: Same-Store Revenue with Concessions on a Cash Basis is considered by the Company to be a supplemental measure to rental income on a straight-line basis which allows investors to evaluate the impact of both current and historical concessions and to more readily enable comparisons to revenue as reported by its peer REITs. In addition, Same-Store Revenue with Concessions on a Cash Basis allows an investor to understand the historical trends in cash concessions.

A reconciliation between Same-Store Revenue with Concessions on a Cash Basis to Same-Store Revenue on a straight-line basis (inclusive of the impact to Same-Store NOI) is provided below:

 

2Q 21

 

 

2Q 20

 

2Q 21

 

 

 

1Q 21

 

 

YTD 21

YTD 20

Revenue (Cash basis)

$

285,948

 

$

288,981

$

285,948

 

$

280,966

 

$

560,469

 

$

582,805

Concessions granted/(amortized), net

 

(1,331

)

 

726

 

(1,331

)

 

(1,444

)

 

(2,680

)

 

121

Revenue (Straight-line basis)

$

284,617

 

$

289,707

$

284,617

 

$

279,522

 

$

557,789

 

$

582,926

 
% change - Same-Store Revenue with Concessions on a Cash basis:

 

-1.0

%

 

1.8

%

 

-3.8

%

% change - Same-Store Revenue with Concessions on a Straight-line basis:

 

-1.8

%

 

1.8

%

 

-4.3

%

 
% change - Same-Store NOI with Concessions on a Cash basis:

 

-3.1

%

 

2.7

%

 

-6.9

%

% change - Same-Store NOI with Concessions on a Straight-line basis:

 

-4.1

%

 

2.7

%

 

-7.6

%

Sold Communities: The Company defines Sold Communities as those communities that were disposed of prior to the end of the most recent quarter.

Stabilization/Stabilized: The Company defines Stabilization/Stabilized as when a community’s occupancy reaches 90% or above for at least three consecutive months.

Stabilized, Non-Mature Communities: The Company defines Stabilized, Non-Mature Communities as those communities that have reached Stabilization but are not yet in the same-store portfolio.

Total Revenue per Occupied Home: The Company defines Total Revenue per Occupied Home as rental and other revenues with concessions reported on a Cash Basis, divided by the product of occupancy and the number of apartment homes. A reconciliation between Same-Store Revenue with Concessions on a Cash Basis to Same-Store Revenue on a straight-line basis is provided above of the Company’s quarterly supplemental disclosure.

Management considers Total Revenue per Occupied Home a useful metric for investors as it serves as a proxy for portfolio quality, both geographic and physical.

TRS: The Company’s taxable REIT subsidiary (“TRS”) focuses on making investments and providing services that are otherwise not allowed to be made or provided by a REIT.

YTD Same-Store Communities: The Company defines YTD Same-Store Communities as those communities Stabilized for two full consecutive calendar years. These communities were owned and had stabilized operating expenses as of the beginning of the prior year, were not in process of any substantial redevelopment activities, and were not held for disposition.

Conference Call and Webcast Information

UDR will host a webcast and conference call at 1:00 p.m. Eastern Time on July 29, 2021 to discuss second quarter results as well as high-level views for 2021.

The webcast will be available on UDR's website at ir.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 877-705-6003 for domestic and 201-493-6725 for international. A passcode is not necessary.

This quarter, given the combination of a high volume of conference calls occurring during this time of year and the impact that the COVID-19 pandemic has had on staffing and capacity at the Company’s conference call provider, delays are anticipated when connecting to the live call. As a result, stakeholders and interested parties are encouraged to utilize the Company’s webcast link for its earnings results discussion.

A replay of the conference call will be available through August 29, 2021, by dialing 844-512-2921 for domestic and 412-317-6671 for international and entering the confirmation number, 13721057, when prompted for the passcode. A replay of the call will also be available for 30 days on UDR's website at ir.udr.com.

Full Text of the Earnings Report and Supplemental Data

The full text of the earnings report and related quarterly Supplemental Financial Information will be available on the Company’s website at ir.udr.com.

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, the impact of the COVID-19 pandemic and measures intended to prevent its spread or address its effects, 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 and rental rates, expectations concerning the joint ventures with third parties, expectations that technology 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 SEC 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.

About UDR, Inc.

UDR, Inc. (NYSE: UDR), an S&P 500 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 communities in targeted U.S. markets. As of June 30, 2021, UDR owned or had an ownership position in 54,667 apartment homes including 1,417 homes under development. For over 49 years, UDR has delivered long-term value to shareholders, the best standard of service to Residents and the highest quality experience for Associates.

Attachment 1

 

 

 

 

 

 

 

 

 

UDR, Inc.

Consolidated Statements of Operations

(Unaudited) (1)

 

Three Months Ended

 

Six Months Ended

June 30,

 

June 30,

In thousands, except per share amounts

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 
REVENUES:
Rental income (2)

$

309,116

 

$

305,982

 

$

608,942

 

$

626,075

 

Joint venture management and other fees

 

2,232

 

 

1,274

 

 

3,847

 

 

2,662

 

Total revenues

 

311,348

 

 

307,256

 

 

612,789

 

 

628,737

 

 
OPERATING EXPENSES:
Property operating and maintenance

 

51,335

 

 

48,717

 

 

102,716

 

 

98,200

 

Real estate taxes and insurance

 

49,145

 

 

45,012

 

 

96,532

 

 

90,157

 

Property management

 

9,273

 

 

8,797

 

 

18,268

 

 

18,000

 

Other operating expenses

 

4,373

 

 

6,100

 

 

8,808

 

 

11,066

 

Real estate depreciation and amortization

 

146,169

 

 

155,056

 

 

290,257

 

 

310,532

 

General and administrative

 

15,127

 

 

10,971

 

 

27,863

 

 

25,949

 

Casualty-related charges/(recoveries), net (3)

 

(2,463

)

 

102

 

 

3,114

 

 

1,353

 

Other depreciation and amortization

 

2,602

 

 

2,027

 

 

5,203

 

 

4,052

 

Total operating expenses

 

275,561

 

 

276,782

 

 

552,761

 

 

559,309

 

 
Gain/(loss) on sale of real estate owned

 

-

 

 

61,303

 

 

50,829

 

 

61,303

 

Operating income

 

35,787

 

 

91,777

 

 

110,857

 

 

130,731

 

 
Income/(loss) from unconsolidated entities (2)

 

9,751

 

 

8,021

 

 

14,673

 

 

11,388

 

Interest expense

 

(35,404

)

 

(38,597

)

 

(71,610

)

 

(77,914

)

Debt extinguishment and other associated costs

 

-

 

 

-

 

 

(41,950

)

 

-

 

Total interest expense

 

(35,404

)

 

(38,597

)

 

(113,560

)

 

(77,914

)

Interest income and other income/(expense), net

 

2,536

 

 

2,421

 

 

4,593

 

 

5,121

 

 
Income/(loss) before income taxes

 

12,670

 

 

63,622

 

 

16,563

 

 

69,326

 

Tax (provision)/benefit, net

 

(135

)

 

(1,526

)

 

(754

)

 

(1,690

)

 
Net Income/(loss)

 

12,535

 

 

62,096

 

 

15,809

 

 

67,636

 

Net (income)/loss attributable to redeemable noncontrolling interests in the OP and DownREIT Partnership

 

(807

)

 

(4,291

)

#

 

(961

)

 

(4,604

)

Net (income)/loss attributable to noncontrolling interests

 

(8

)

 

(34

)

#

 

(24

)

 

(40

)

 
Net income/(loss) attributable to UDR, Inc.

 

11,720

 

 

57,771

 

 

14,824

 

 

62,992

 

Distributions to preferred stockholders - Series E (Convertible)

 

(1,057

)

 

(1,062

)

 

(2,113

)

 

(2,128

)

 
Net income/(loss) attributable to common stockholders

$

10,663

 

$

56,709

 

$

12,711

 

$

60,864

 

 
 
Income/(loss) per weighted average common share - basic:

$

0.04

 

$

0.19

 

$

0.04

 

$

0.21

 

Income/(loss) per weighted average common share - diluted:

$

0.04

 

$

0.19

 

$

0.04

 

$

0.21

 

 
Common distributions declared per share

$

0.3625

 

$

0.3600

 

$

0.7250

 

$

0.7200

 

 
Weighted average number of common shares outstanding - basic

 

296,589

 

 

294,710

 

 

296,564

 

 

294,584

 

Weighted average number of common shares outstanding - diluted

 

297,542

 

 

295,087

 

 

297,221

 

 

295,083

 

(1) See Attachment 16 for definitions and other terms.

(2) During the three months ended June 30, 2021, UDR collected 95.5% of billed residential revenue and 79.9% of billed retail revenue. Of the 4.5% and 20.1% not collected, UDR reserved (reflected as a reduction to revenues) approximately 0.0% or $0.1 million for residential, including $0 for UDR’s share from unconsolidated joint ventures, for residential, and 10.0% or $0.7 million, including straight-line rent receivables and $0.1 million for UDR’s share from unconsolidated joint ventures, for retail. The reserves are based on probability of collection.

(3) During the three months ended June 30, 2021, UDR recorded casualty-related recoveries based on probability of receiving insurance proceeds in connection with property damage primarily from Winter Storm Uri.

Attachment 2

 

UDR, Inc.

Funds From Operations

(Unaudited) (1)

Three Months Ended

 

Six Months Ended

June 30,

 

June 30,

In thousands, except per share and unit amounts

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 
Net income/(loss) attributable to common stockholders

$

10,663

 

$

56,709

 

$

12,711

 

$

60,864

 

 
Real estate depreciation and amortization

 

146,169

 

 

155,056

 

 

290,257

 

 

310,532

 

Noncontrolling interests

 

815

 

 

4,325

 

 

985

 

 

4,644

 

Real estate depreciation and amortization on unconsolidated joint ventures

 

7,930

 

 

8,745

 

 

16,135

 

 

17,561

 

Net gain on the sale of unconsolidated depreciable property

 

-

 

 

-

 

 

(2,460

)

 

-

 

Net gain on the sale of depreciable real estate owned, net of tax

 

-

 

 

(61,303

)

 

(50,778

)

 

(61,303

)

Funds from operations ("FFO") attributable to common stockholders and unitholders, basic

$

165,577

 

$

163,532

 

$

266,850

 

$

332,298

 

 

Distributions to preferred stockholders - Series E (Convertible) (2)

 

1,057

 

 

1,062

 

 

2,113

 

 

2,128

 

 
FFO attributable to common stockholders and unitholders, diluted

$

166,634

 

$

164,594

 

$

268,963

 

$

334,426

 

 
FFO per weighted average common share and unit, basic

$

0.52

 

$

0.52

 

$

0.84

 

$

1.05

 

FFO per weighted average common share and unit, diluted

$

0.52

 

$

0.51

 

$

0.83

 

$

1.04

 

 
Weighted average number of common shares and OP/DownREIT Units outstanding, basic

 

319,139

 

 

317,096

 

 

319,038

 

 

316,891

 

Weighted average number of common shares, OP/DownREIT Units, and common stock
equivalents outstanding, diluted

 

323,010

 

 

320,426

 

 

322,613

 

 

320,372

 

 
Impact of adjustments to FFO:
Debt extinguishment and other associated costs

$

-

 

$

-

 

$

41,950

 

$

-

 

Debt extinguishment and other associated costs on unconsolidated joint ventures

 

-

 

 

-

 

 

1,682

 

 

-

 

Legal and other

 

590

 

 

1,586

 

 

1,219

 

 

2,344

 

Realized/unrealized (gain)/loss on unconsolidated real estate technology investments, net of tax

 

(6,681

)

 

(3,334

)

 

(8,109

)

 

(3,302

)

Severance costs and other restructuring expense

 

140

 

 

-

 

 

608

 

 

1,642

 

Casualty-related charges/(recoveries), net

 

(2,292

)

 

249

 

 

3,285

 

 

1,648

 

Casualty-related charges/(recoveries) on unconsolidated joint ventures, net

 

-

 

 

-

 

 

-

 

 

31

 

$

(8,243

)

$

(1,499

)

$

40,635

 

$

2,363

 

 
FFO as Adjusted attributable to common stockholders and unitholders, diluted

$

158,391

 

$

163,095

 

$

309,598

 

$

336,789

 

 
FFO as Adjusted per weighted average common share and unit, diluted

$

0.49

 

$

0.51

 

$

0.96

 

$

1.05

 

 
Recurring capital expenditures

 

(15,829

)

 

(12,504

)

 

(25,583

)

 

(21,713

)

AFFO attributable to common stockholders and unitholders, diluted

$

142,562

 

$

150,591

 

$

284,015

 

$

315,076

 

 
AFFO per weighted average common share and unit, diluted

$

0.44

 

$

0.47

 

$

0.88

 

$

0.98

 

(1) See Attachment 16 for definitions and other terms.

(2) Series E cumulative convertible preferred shares are dilutive for purposes of calculating FFO per share for the three and six months ended June 30, 2021 and June 30, 2020. Consequently, distributions to Series E cumulative convertible preferred stockholders are added to FFO and the weighted average number of Series E cumulative convertible preferred shares are included in the denominator when calculating FFO per common share and unit, diluted.

Attachment 3

 

UDR, Inc.

Consolidated Balance Sheets

(Unaudited) (1)

June 30,

 

December 31,

In thousands, except share and per share amounts

 

2021

 

 

 

2020

 

 
 
ASSETS
 
Real estate owned:
Real estate held for investment

$

13,325,599

 

$

12,706,940

 

Less: accumulated depreciation

 

(4,871,124

)

 

(4,590,577

)

Real estate held for investment, net

 

8,454,475

 

 

8,116,363

 

Real estate under development
(net of accumulated depreciation of $382 and $1,010)

 

286,543

 

 

246,867

 

Real estate held for disposition
(net of accumulated depreciation of $0 and $13,779)

 

-

 

 

102,876

 

Total real estate owned, net of accumulated depreciation

 

8,741,018

 

 

8,466,106

 

 
Cash and cash equivalents

 

3,370

 

 

1,409

 

Restricted cash

 

32,700

 

 

22,762

 

Notes receivable, net

 

139,047

 

 

157,992

 

Investment in and advances to unconsolidated joint ventures, net

 

619,172

 

 

600,233

 

Operating lease right-of-use assets

 

199,206

 

 

200,913

 

Other assets

 

184,758

 

 

188,118

 

Total assets

$

9,919,271

 

$

9,637,533

 

 
LIABILITIES AND EQUITY
 
Liabilities:
Secured debt

$

1,059,913

 

$

862,147

 

Unsecured debt

 

4,392,194

 

 

4,114,401

 

Operating lease liabilities

 

194,058

 

 

195,592

 

Real estate taxes payable

 

34,146

 

 

29,946

 

Accrued interest payable

 

43,536

 

 

44,760

 

Security deposits and prepaid rent

 

49,882

 

 

49,008

 

Distributions payable

 

116,688

 

 

115,795

 

Accounts payable, accrued expenses, and other liabilities

 

119,405

 

 

110,999

 

Total liabilities

 

6,009,822

 

 

5,522,648

 

 
Redeemable noncontrolling interests in the OP and DownREIT Partnership

 

1,104,276

 

 

856,294

 

 
Equity:
Preferred stock, no par value; 50,000,000 shares authorized
2,695,363 shares of 8.00% Series E Cumulative Convertible issued
and outstanding (2,695,363 shares at December 31, 2020)

 

44,764

 

 

44,764

 

14,357,914 shares of Series F outstanding (14,440,519 shares
at December 31, 2020)

 

1

 

 

1

 

Common stock, $0.01 par value; 350,000,000 shares authorized
296,848,024 shares issued and outstanding (296,611,579 shares at December 31, 2020)

 

2,968

 

 

2,966

 

Additional paid-in capital

 

5,887,838

 

 

5,881,383

 

Distributions in excess of net income

 

(3,143,000

)

 

(2,685,770

)

Accumulated other comprehensive income/(loss), net

 

(8,301

)

 

(9,144

)

Total stockholders' equity

 

2,784,270

 

 

3,234,200

 

Noncontrolling interests

 

20,903

 

 

24,391

 

Total equity

 

2,805,173

 

 

3,258,591

 

Total liabilities and equity

$

9,919,271

 

$

9,637,533

 

(1) See Attachment 16 for definitions and other terms.

Attachment 4(C)

 

UDR, Inc.

Selected Financial Information

(Dollars in Thousands)

(Unaudited) (1)

Quarter Ended

Coverage Ratios

June 30, 2021

 
Net income/(loss)

$

12,535

 

 
Adjustments:
Interest expense, including debt extinguishment and other associated costs

 

35,404

 

Real estate depreciation and amortization

 

146,169

 

Other depreciation and amortization

 

2,602

 

Tax provision/(benefit), net

 

135

 

Adjustments to reflect the Company's share of EBITDAre of unconsolidated joint ventures

 

11,647

 

EBITDAre

$

208,492

 

 
Casualty-related charges/(recoveries), net

 

(2,292

)

Legal and other costs

 

590

 

Severance costs and other restructuring expense

 

140

 

(Income)/loss from unconsolidated entities

 

(9,751

)

Adjustments to reflect the Company's share of EBITDAre of unconsolidated joint ventures

 

(11,647

)

Management fee expense on unconsolidated joint ventures

 

(503

)

Consolidated EBITDAre - adjusted for non-recurring items

$

185,029

 

 
Annualized consolidated EBITDAre - adjusted for non-recurring items

$

740,116

 

 
Interest expense, including debt extinguishment and other associated costs

 

35,404

 

Capitalized interest expense

 

2,235

 

Total interest

$

37,639

 

 
Preferred dividends

$

1,057

 

 
Total debt

$

5,452,107

 

Cash

 

(3,370

)

Net debt

$

5,448,737

 

 
Consolidated Interest Coverage Ratio - adjusted for non-recurring items 4.9x
 
Consolidated Fixed Charge Coverage Ratio - adjusted for non-recurring items 4.8x
 
Consolidated Net Debt-to-EBITDAre - adjusted for non-recurring items 7.4x
Debt Covenant Overview
 
Unsecured Line of Credit Covenants (2)

Required

 

Actual

 

Compliance

 

 

 

 

 

Maximum Leverage Ratio

≤60.0%

 

40.7%(2)

 

Yes

Minimum Fixed Charge Coverage Ratio

≥1.5x

 

4.5x

 

Yes

Maximum Secured Debt Ratio

≤40.0%

 

11.7%

 

Yes

Minimum Unencumbered Pool Leverage Ratio

≥150.0%

 

279.3%

 

Yes

 
Senior Unsecured Note Covenants (3)

Required

 

Actual

 

Compliance

 

 

 

 

 

Debt as a percentage of Total Assets

≤65.0%

 

36.9%(3)

 

Yes

Consolidated Income Available for Debt Service to Annual Service Charge

≥1.5x

 

5.4x

 

Yes

Secured Debt as a percentage of Total Assets

≤40.0%

 

7.2%

 

Yes

Total Unencumbered Assets to Unsecured Debt

≥150.0%

 

283.7%

 

Yes

 

 

 

 

 

Securities Ratings

Debt

 

Outlook

 

Commercial Paper

 

 

 

 

 

Moody's Investors Service

Baa1

 

Stable

 

P-2

S&P Global Ratings

BBB+

 

Stable

 

A-2

 
 
 

Gross

% of

Number of

 

2Q 2021 NOI (1)

 

 

 

Carrying Value

 

Total Gross

Asset Summary

Homes

 

($000s)

 

% of NOI

 

($000s)

 

Carrying Value

 
Unencumbered assets

42,868

$ 182,238

87.3%

$ 11,902,207

87.4%

Encumbered assets

7,545

26,398

12.7%

1,710,317

12.6%

50,413

$ 208,636

100.0%

$ 13,612,524

100.0%

(1) See Attachment 16 for definitions and other terms.

(2) As defined in our credit agreement dated September 27, 2018.

(3) As defined in our indenture dated November 1, 1995 as amended, supplemented or modified from time to time.

Attachment 16(D)

UDR, Inc.
Definitions and Reconciliations
June 30, 2021
(Unaudited)

All guidance is based on current expectations of future economic conditions and the judgment of the Company's management team. The following reconciles from GAAP Net income/(loss) per share for full-year 2021 and third quarter of 2021 to forecasted FFO, FFO as Adjusted and AFFO per share and unit:

Full-Year 2021

Low

 

High

 
Forecasted net income per diluted share

$

0.12

 

$

0.16

 

Conversion from GAAP share count

 

(0.02

)

 

(0.02

)

Net gain on the sale of depreciable real estate owned

 

(0.16

)

 

(0.16

)

Depreciation

 

1.89

 

 

1.89

 

Noncontrolling interests

 

0.01

 

 

0.01

 

Preferred dividends

 

0.01

 

 

0.01

 

Forecasted FFO per diluted share and unit

$

1.85

 

$

1.89

 

Legal and other costs

 

-

 

 

-

 

Debt extinguishment and other associated costs

 

0.14

 

 

0.14

 

Casualty-related charges/(recoveries)

 

0.01

 

 

0.01

 

Realized/unrealized gain on unconsolidated real estate technology investments, net of tax

 

(0.03

)

 

(0.03

)

Forecasted FFO as Adjusted per diluted share and unit

$

1.97

 

$

2.01

 

Recurring capital expenditures

 

(0.18

)

 

(0.18

)

Forecasted AFFO per diluted share and unit

$

1.79

 

$

1.83

 

 
 
 

 

3Q 2021

 

Low

 

High

 
Forecasted net income per diluted share

$

0.02

 

$

0.04

 

Conversion from GAAP share count

 

(0.01

)

 

(0.01

)

Depreciation

 

0.48

 

 

0.48

 

Noncontrolling interests

 

-

 

 

-

 

Preferred dividends

 

-

 

 

-

 

Forecasted FFO per diluted share and unit

$

0.49

 

$

0.51

 

Legal and other costs

 

-

 

 

-

 

Debt extinguishment and other associated costs

 

-

 

 

-

 

Casualty-related charges/(recoveries)

 

-

 

 

-

 

Realized/unrealized gain on unconsolidated real estate technology investments, net of tax

 

-

 

 

-

 

Forecasted FFO as Adjusted per diluted share and unit

$

0.49

 

$

0.51

 

Recurring capital expenditures

 

(0.05

)

 

(0.05

)

Forecasted AFFO per diluted share and unit

$

0.44

 

$

0.46

 

 

Trent Trujillo
720.283.6135

Source: UDR, Inc.

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