Market Overview

UDR Announces Second Quarter 2019 Results and Increases Full-Year Guidance Ranges

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UDR, Inc. (the "Company") Second Quarter 2019 Highlights:

  • Net income per share was $0.12, Funds from Operations ("FFO") per share was $0.54, FFO as Adjusted ("FFOA") per share was $0.52, and Adjusted Funds from Operations ("AFFO") per share was $0.48.
  • Net income attributable to common stockholders was $34.6 million as compared to $19.6 million in the prior year period. The increase was primarily due to higher gains on the sale of real estate and net operating income ("NOI") growth.
  • Year-over-year same-store ("SS") revenue, expense and NOI growth was 3.7 percent, 2.3 percent and 4.2 percent, respectively.
  • The Company's operating margin (property net operating income divided by property rental income) was 71.7 percent as compared to 71.4 percent in the prior year period.
  • The Company continued to implement its Next Generation Operating Platform which drove SS controllable operating margin expansion of approximately 50 basis points year-over-year to 84.7 percent and restrained SS controllable expense growth to 40 basis points year-over-year.
  • Acquired four apartment communities comprising 1,251 homes in Towson, MD, King of Prussia, PA, St. Petersburg, FL and Waltham, MA for $327.7 million. Subsequent to quarter-end, the Company entered into a contract to acquire a 185-home community in Englewood, NJ, for $83.6 million subject to customary closing conditions.
  • Invested in a Developer Capital Program ("DCP") project in Oakland, CA with a total capital commitment of $27.3 million.
  • The UDR/KFH JV sold one community in Washington, D.C. for $74.8 million. Subsequent to quarter-end, a second community was sold for $43.5 million. The Company is under contract to purchase the 70 percent it did not previously own of the third community, 1301 Thomas Circle, a 292-home property in Washington, D.C. at a valuation of $184.0 million subject to customary closing conditions. Upon closing, the JV will terminate.
  • Issued approximately 460.5 thousand common shares through the Company's at-the-market equity program at a weighted average net price of $44.94 for proceeds of $20.7 million. Subsequent to quarter-end, the Company issued approximately 2.2 million shares at a weighted average net price of $45.70 for proceeds of $99.4 million. These proceeds will be used to accretively fund acquisition activity.
  • Subsequent to quarter-end, the Company settled its late-June issuance of $300.0 million, 10-year unsecured debt at an effective rate of 3.46 percent after accounting for previous hedging activities.
  • Increased full-year 2019 earnings and same-store growth guidance:
    • Increased net income per share guidance by $0.015 at the midpoint to $0.38 to $0.41.
    • Increased FFO per share guidance by $0.035 at the midpoint to $2.09 to $2.12.
    • Increased FFOA and AFFO per share guidance by $0.015 at the midpoints, to $2.05 to $2.08 and $1.89 to $1.92, respectively.
    • Increased SS revenue guidance by 20 basis points at the midpoint to 3.40 to 4.00 percent.
    • Decreased SS expense guidance by 50 basis points at the midpoint to 2.50 to 3.00 percent.
    • Increased SS NOI guidance by 37.5 basis points at the midpoint to 3.75 to 4.50 percent.

 

Q2 2019

Q2 2018

YTD 2019

YTD 2018

Net income per common share, diluted

$

0.12

 

$

0.07

 

$

0.21

 

$

0.37

 

Conversion from GAAP share count

 

(0.010

)

 

(0.007

)

 

(0.018

)

 

(0.035

)

Net gain on the sale of depreciable real estate owned, incl. JVs

 

(0.017

)

 

-

 

 

(0.017

)

 

(0.237

)

Cumulative effect of change in accounting principle

 

-

 

 

-

 

 

-

 

 

(0.007

)

Depreciation and amortization, including JVs

 

0.432

 

 

0.412

 

 

0.852

 

 

0.824

 

Noncontrolling interests and preferred dividends

 

0.012

 

 

0.009

 

 

0.022

 

 

0.038

 

FFO per common share and unit, diluted

$

0.54

 

$

0.49

 

$

1.05

 

$

0.96

 

Promoted interest on settlement of note receivable, net of tax

 

-

 

 

-

 

 

(0.021

)

 

-

 

Legal and other costs

 

-

 

 

0.002

 

 

0.011

 

 

0.002

 

Net gain on the sale of non-depreciable real estate owned

 

(0.017

)

 

-

 

 

(0.017

)

 

-

 

Casualty-related charges/(recoveries), including JVs, net

 

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