Market Overview

UDR Announces Fourth Quarter and Full-Year 2018 Results and 2019 Guidance

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UDR, Inc. (the "Company") Fourth Quarter 2018 Highlights:

  • Net income per share was $0.30, Funds from Operations ("FFO") per
    share was $0.49, FFO as Adjusted ("FFOA") per share was $0.50, and
    Adjusted Funds from Operations ("AFFO") per share was $0.46.
  • Net income attributable to common stockholders was $81.2 million as
    compared to $68.4 million in the prior year period. The increase was
    driven by higher operating income and gains on the sale of real estate.
  • Year-over-year ("YOY") same-store ("SS") revenue, expense and net
    operating income ("NOI") growth rates were 3.7, 4.4, and 3.4 percent,
    respectively.
  • The Company's $779.0 million pro-rata share of development projects in
    lease-up continued to realize strong demand, ending the fourth quarter
    at a weighted average 85.5 percent leased.
  • Previously announced fourth quarter highlights include:
    • Sold Circle Towers, a 604-home community in Fairfax County, VA,
      for $160.0 million.
    • Issued $300.0 million of 10-year unsecured debt at an effective
      rate of 4.27 percent and 7.15 million common shares, at a net
      price of $41.98, for proceeds of approximately $300.0 million.

Subsequent to Quarter-End Highlights:

  • Acquired partner's joint venture interests in Parallel, a 386-home
    community in Anaheim, CA, and CityLine II, a 155-home community in
    suburban Seattle, WA, for a total cash outlay of $131.7 million.
  • Under contract to purchase Leonard Pointe, a 188-home community in
    Brooklyn, NY, for $132.3 million.
  • Purchased 500 Penn Street NE, a development site in Washington, D.C.,
    for $27.2 million, and 1590 Grove Street, a development site in
    Denver, CO, for $13.7 million.
  • Realized approximately $6.5 million, net of estimated taxes, on the
    settlement of a $5.6 million note receivable to a multifamily
    technology company, resulting in an IRR of approximately 55 percent.
  • Named Jerry A. Davis President, in addition to his responsibilities as
    Chief Operating Officer.

Full-Year 2018 Highlights:

  • Net income per share was $0.74, FFO per share was $1.93, FFOA per
    share was $1.96, and AFFO per share was $1.80.
  • Net income attributable to common stockholders was $199.2 million as
    compared to $117.9 million in the prior year period. The increase was
    driven by higher operating income and gains on the sale of real estate.
  • YOY SS revenue, expense and NOI growth rates were 3.5, 3.6, and 3.4
    percent, respectively.
  • Increased the Company's declared dividend by 4.0 percent YOY to $1.29
    per share.
  • Completed construction of two wholly-owned and two UDR/MetLife JV
    developments comprising 1,634 homes with a total cost to construct of
    $808.5 million at the Company's ownership interest.
  • Expanded the Developer Capital Program ("DCP") through committed
    investments totaling $93.1 million in four communities, comprising
    1,087 homes, and at a weighted average yield of 10.4 percent.
  • Repurchased approximately 593,000 common shares at an average price of
    $33.69 for approximately $20.0 million.
  • Named Thomas W. Toomey Chairman of the Board, in addition to his
    responsibilities as Chief Executive Officer.
 
      Q4 2018     Q4 2017     FY 2018     FY 2017
Net income per common share, diluted     $ 0.30       $ 0.25       $ 0.74       $ 0.44  
Conversion from GAAP share count     (0.028 )     (0.024 )     (0.069 )     (0.041 )
Net gain on the sale of depreciable real estate owned, incl. JVs (0.221 ) (0.209 ) (0.459 ) (0.260 )
Cumulative effect of change in accounting principle - - (0.007 ) -
Depreciation and amortization, incl. JVs 0.411 0.416 1.653 1.642
Noncontrolling interests and preferred dividends       0.028         0.024         0.075         0.050  
FFO per common share and unit, diluted     $ 0.49       $ 0.46       $ 1.93       $ 1.83  
Cost/(benefit) associated with debt extinguishment and other, incl.
JVs
0.010 0.011 0.012 0.031
Acquisition-related costs/(fees) - 0.000 - 0.001
Net gain on the sale of non-depreciable real estate owned - - - (0.005 )
Legal and other costs 0.001 - 0.005 -
Severance costs and other restructuring expense 0.000 0.002 0.000
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