-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QwPopRq2RrdLDyLE6irlD22WfOKx8RiKXAIHsWnBVnY+u6Eyo48czWaDPv/7GCTl txZPEM9Ir9VO1SlJZnPJvA== 0000916641-98-001148.txt : 19981029 0000916641-98-001148.hdr.sgml : 19981029 ACCESSION NUMBER: 0000916641-98-001148 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981028 ITEM INFORMATION: FILED AS OF DATE: 19981028 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNITED DOMINION REALTY TRUST INC CENTRAL INDEX KEY: 0000074208 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 540857512 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-10524 FILM NUMBER: 98732445 BUSINESS ADDRESS: STREET 1: 10 S 6TH ST STE 203 CITY: RICHMOND STATE: VA ZIP: 23219-3802 BUSINESS PHONE: 8047802691 MAIL ADDRESS: STREET 1: 10 SOUTH SIXTH STREET STREET 2: SUITE 203 CITY: RICHMOND STATE: VA ZIP: 23219-3802 FORMER COMPANY: FORMER CONFORMED NAME: OLD DOMINION REAL ESTATE INVESTMENT TRUST DATE OF NAME CHANGE: 19850110 FORMER COMPANY: FORMER CONFORMED NAME: OLD DOMINION REIT ONE DATE OF NAME CHANGE: 19770921 FORMER COMPANY: FORMER CONFORMED NAME: OLD DOMINION REAL ESTATE INVESTMENT TRUS DATE OF NAME CHANGE: 19741216 8-K 1 UNITED DOMINION REALTY TRUST, INC. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): October 28, 1998 ------------------------ UNITED DOMINION REALTY TRUST, INC ------------------------------------------------------- (Exact name of registrant as specified in its charter) Virginia 1-10524 54-0857512 (State or other jurisdiction of (Commission File Number) (I.R.S. Employer incorporation of organization) Identification No.) 10 South Sixth Street, Virginia 23219-3802 --------------------------------------------------- (Address of principal executive offices - zip code) (804) 780-2691 -------------------------------------------------- Registrant's telephone number, including area code ITEM 5. OTHER EVENTS On October 23, 1998, United Dominion Realty Trust, Inc., the registrant, issued a Press Release announcing its results of operations for the three and nine months ended September 30, 1998. The following is a summary of United Dominion Realty Trust, Inc.'s results of operations: United Dominion Realty Trust, Inc., Richmond, Virginia (NYSE:UDR) today reported funds from operations (FFO) of $35.1 million for the quarter ended September 30, 1998, compared with $29.1 million for the same period last year. For the first nine months of 1998, FFO was $102.7 million compared with last year's FFO of $86.4 million. John McCann, President and CEO stated "We are implementing a strategy that correctly positions our Company for the long-term. Key elements of our plan include entering new markets, maximizing our internal growth through the implementation of revenue enhancing and expense reducing initiatives and improvements, upgrading the overall quality of our assets to achieve higher same community results and lower capital expenditures per apartment, and investing in the infrastructure to support our growing Company while enhancing management tools at all levels. This plan slows FFO growth in the short-term, but will enhance it over the longer-term. We are achieving solid performance from our same community portfolio, as evidenced by the 7.2% year to date increase in net operating income (NOI). This reflects the strengths of our core portfolio, operations and many of our markets. We have made many acquisitions over the past two years and shortly will close on the acquisition of American Apartment Communities II. Over the next twelve months, our focus will be on growing these same community results as we have done with our core portfolio, while completing the repositioning of our Company." For the quarter ended September 30, 1998, the Company reported rental income of $123.5 million, income from property operations (excluding depreciation) of $70.8 million, and net income available to common shareholders of $8.2 million. For the third quarter of 1997, the Company had rental income of $98.8 million, income from property operations (excluding depreciation) of $56.2 million and net income available to common shareholders of $17.7 million. On a per share basis, basic and diluted net income available to common shareholders for the third quarter of 1998 were both $.08 compared to the third quarter of 1997 when they were both $.20. Net income for the third quarter of 1997 includes gains on the sales of investments of $9.3 million, or $.11 per share. For the first nine months of 1998, the Company reported rental income of $346.2 million, income from property operations (excluding depreciation) of $203.0 million and net income available to common shareholders of $49.0 million. For the first nine months of 1997, the Company had rental income of $284.2 million, income from property operations (excluding depreciation) of $163.0 million and net income available to common shareholders of $43.4 million. On a per share basis, basic and diluted net income available to common shareholders for the first nine months of 1998 were both $.50 compared to the first nine months of 1997 when basic and diluted net income available to common shareholders were both $.50. Net income available to common shareholders for the first nine months of 1998 included a $20.5 million gain ($.20 per share) on the sales of investments, while $12.7 million ($.15 per share) of such gains were recorded during the same period last year. Additionally, net income available to common shareholders for the first nine months of 1998 compared to the same period last year reflects an additional $5.3 million ($.05 per share) of dividends to preferred shareholders. A comparison of the third quarter results between the 1998 and 1997 communities is as follows: Same Community - For the 48,245 completed apartment homes in the 178 stabilized communities owned by the Company since the beginning of 1997, NOI increased $2.7 million or 5.9%. Rental income increased $2.7 million or 3.3%, primarily as a result of a 3.5% increase in average rents to $605 as physical occupancy remained relatively flat at 93.5% compared to the same period last year. A portion of the rent growth reflected the impact of upgrades and revenue enhancing capital expenditures that have been made since January 1, 1997. Rental expenses remained flat over the same quarter last year as utilities, repairs and maintenance and other operating expenses decreased as a result of the upgrade programs and improved economies of scale. The operating margin improved 1.5% to 59.1% as a result of increased rental income. Non-Mature Communities - For the 24,464 apartment homes in the 91 communities not owned throughout 1998 and 1997, plus the 4,948 apartment homes in the 17 communities sold during 1998, physical occupancy was 89.8% and the operating margin was 54.1%. All Communities - For the 72,365 weighted average apartment homes owned during the third quarter of 1998, physical occupancy was 92.2% and the operating margin was 57.5%. United Dominion Realty Trust, Inc. now owns, 72,709 completed apartment homes in 269 communities in the Sunbelt and the Pacific Northwest. On September 11, 1998, the Company agreed to acquire the San Francisco based private REIT of American Apartment Communities II that includes 54 communities containing 14,141 apartment homes. With the acquisition, the Company will own in excess of 86,000 completed apartment homes and operate nationally in 35 major markets. FINANCIAL INFORMATION
Three Months Ended Nine Months Ended Operating Results September 30, September 30, -------------------------------------------- In thousands, except per share amounts 1998 1997 1998 1997 - ---------------------------------------------------------------------------------------------------------- ---------------------- Revenues: Rental income $123,475 $98,816 $346,171 $284,182 Interest and other non-property income 576 479 2,735 867 --------- -------- --------- ---------- 124,051 99,295 348,906 285,049 Expenses: Rental expenses: Utilities 7,259 6,166 19,204 18,290 Repairs and maintenance 17,072 14,528 45,107 40,707 Real estate taxes 10,461 8,107 29,802 23,014 Property management 4,048 3,080 11,855 9,154 Other rental expenses 13,787 10,762 37,241 30,051 Real estate depreciation 26,901 19,740 73,376 55,029 Interest 27,224 19,346 75,784 58,265 General and administrative 2,534 1,619 7,306 5,271 Other depreciation and amortization 893 494 2,434 1,339 Impairment loss on real estate owned -- 1,400 -- 1,400 --------- -------- --------- ---------- 110,179 85,242 302,109 242,520 Income before gains on sales of investments, minority interest of unitholders in operating partnership and extraordinary item 13,872 14,053 46,797 42,529 Gains on sales of investments 13 9,309 20,474 12,682 --------- -------- --------- ---------- Income before minority interest of unitholders in operating partnership 13,885 23,362 67,271 55,211 Minority interest of unitholders in operating partnership (78) (53) (1,200) (112) --------- -------- --------- ---------- Income before extraordinary item 13,807 23,309 66,071 55,099 Extraordinary item - early extinguishment of debt -- -- (116) -- --------- -------- --------- ---------- Net income 13,807 23,309 65,955 55,099 Dividends to preferred shareholders (5,650) (5,653) (16,953) (11,692) --------- -------- --------- ---------- Net income available to common shareholders $8,157 $17,656 $49,002 $43,407 ========= ======== ========= ========== Weighted average number of common shares outstanding-basic 103,104 87,853 98,786 86,602 Weighted average number of common shares outstanding-diluted 106,222 88,007 101,352 86,770 Common distributions declared $27,089 $22,261 $80,555 $66,071 - ----------------------------------------------------------------------------------------------------------------------------------- Funds from Operations (a) Income before gains on sales of investments, minority interest of unitholders in operating partnership and extraordinary item $13,872 $14,053 $46,797 $42,529 Adjustments: Real estate depreciation 26,901 19,740 73,376 55,029 Dividends to preferred shareholders (5,650) (5,653) (16,953) (11,692) Impairment loss on real estate owned -- 1,400 -- 1,400 Change in accounting for internal acquisitions costs (b) -- (436) (544) (915) ========= ======== ========= ========== Funds from operations $35,123 $29,104 $102,676 $86,351 ========= ======== ========= ========== Weighted average number of common shares and OP Units outstanding-basic 106,181 88,013 101,268 86,746 Weighted average number of common shares and OP Units outstanding-diluted 106,222 88,167 101,352 86,914 - ----------------------------------------------------------------------------------------------------------------------------------- Per Share: Basic earnings per common share $0.08 $0.20 $0.50 $0.50 Diluted earnings per common share $0.08 $0.20 $0.50 $0.50 Common distributions declared $0.2625 $0.2525 $0.7875 $0.7575 - ----------------------------------------------------------------------------------------------------------------------------------- Mature Apartment Information Average monthly rent $605 $584 $599 $579 Physical occupancy 93.5% 93.6% 92.8% 92.7% Economic occupancy 92.8% 92.8% 92.2% 92.1% Operating margin 59.1% 57.6% 59.9% 57.9% - ----------------------------------------------------------------------------------------------------------------------------------- Apartment Homes Owned Total apartment homes owned at end of period 72,709 61,099 72,709 61,099 Weighted average number of apartment homes owned during the period 72,365 60,204 68,723 57,803 - -----------------------------------------------------------------------------------------------------------------------------------
Balance Sheet Data September 30, December 31, --------------------------------- ------------------ 1998 1997 1997 - ------------------------------------------------------------------------------------------------------------ ------------------ Real estate owned, at cost (c) $3,099,553 $2,382,267 $2,472,537 Notes payable-secured 646,718 412,624 417,325 Notes payable-unsecured 902,180 687,521 738,901 Shareholders' equity 1,219,549 1,057,502 1,058,357 Number of common shares outstanding 103,207 88,162 89,168 - ---------------------------------------------------------------------------------------------------------------------------------
(a) Funds from operations is defined as income before gains (losses) on the sales of investments, minority interest of unitholders in operating partnership and extraordinary items (computed in accordance with generally accepted accounting principles) plus real estate depreciation, less preferred dividends and after adjustment for signficant non-recurring items, if any. (b) Represents the change in accounting for internal acquisition costs which were capitalized during 1997 and the first quarter of 1998. (c) Includes real estate held for investment, real estate held for disposition and real estate under development. Same Community Information By Major Market
Average Rental Physical Occupancy Rent Rate ---------------------------- 3Q97 Growth(2) Market Apartments (1) 3Q98 3Q97 - --------------------------------------------------------------------------------------------------------------------------------- Dallas, TX 5,550 95.87% 95.26% $602 3.63% Columbia, SC 3,326 94.24% 94.07% $515 2.65% Raleigh, NC 3,104 95.39% 95.49% $660 3.70% Richmond, VA 2,826 93.10% 94.24% $605 5.67% Orlando, FL 2,816 94.86% 96.53% $622 7.75% Tampa, FL 2,203 92.73% 92.80% $615 4.38% Eastern NC 2,150 88.59% 96.68% $586 3.47% San Antonio, TX 1,983 93.84% 93.12% $624 0.85% Charlotte, NC 1,746 95.80% 96.17% $614 3.71% Baltimore, MD 1,746 95.62% 93.49% $680 3.67% Hampton Roads, VA 1,628 92.05% 94.68% $555 1.90% Greensboro, NC 1,607 90.95% 86.23% $588 0.37% Nashville, TN 1,520 93.07% 91.67% $594 0.83% Washington, DC 1,483 93.79% 89.05% $703 2.32% Atlanta, GA 1,462 95.58% 93.20% $631 4.53% Greenville, SC 1,436 89.50% 89.12% $533 2.32% Jacksonville, FL 1,157 92.16% 86.76% $620 3.71% Ft. Lauderdale, FL 960 89.62% 94.56% $822 3.89% Phoenix, AZ 732 88.08% 92.40% $666 6.09% Memphis, TN 704 95.80% 94.76% $543 2.34% Houston, TX 514 96.77% 94.64% $495 5.51% Austin, TX 192 95.29% 89.51% $538 1.62%
Notes: (1) Same community for 1998 are those communities that were acquired, developed and stabilized prior to January 1997, and held throughout the first nine months of 1997 and 1998. (2) The change in gross potential rent from third quarter 1997 to third quarter 1998. UNITED DOMINION REALTY TRUST, INC THIRD QUARTER 1998 INFORMATION SUPPLEMENT (unaudited
- -------------------------------------------------------------------------------------------------------------- MATURE APARTMENTS: (% Change): Northern Southern Western Total -------------- --------------- ----------------- ----------------- 3Q98 9M98 3Q98 9M98 3Q98 9M98 3Q98 9M98 -------------- --------------- ----------------- ----------------- NOI 7.0% 7.5% 6.6% 9.2% 2.6% 3.5% 5.9% 7.2% Rental income 3.0% 3.2% 3.8% 4.1% 3.0% 3.2% 3.3% 3.5% Average rent 3.4% 3.5% 4.0% 3.7% 2.9% 3.1% 3.5% 3.5% Economic occupancy -0.7% -0.5% 0.6% 1.0% 0.0% 0.0% -0.1% 0.2% Physical occupancy -0.4% -0.4% 0.2% 1.0% -0.5% -0.2% -0.2% 0.1% Operating expenses -3.3% -0.4% 0.5% -1.8% 3.5% 2.7% -0.2% -1.5%
- ------------------------------------------------------------------------------------------------------------------------------------ MAJOR MARKETS: Mature NOI % Change No. of % of ---------------------------------------------- Top 15 Homes Portfolio 3Q98 9M98 - -------------- ------- ------------------- ---------------------------------------------- Dallas, TX 8,954 12.4% 6.6% 10.4% Houston, TX 5,783 8.0% 31.9% 22.4% Orlando, FL 3,848 5.3% 14.2% 13.5% San Antonio, TX 3,840 5.3% 3.4% -2.9% Raleigh, NC 3,484 4.8% 6.1% 6.9% Columbia, SC 3,326 4.6% 3.4% 8.2% Phoenix, AZ 3,136 4.3% -6.4% 0.5% Richmond, VA 3,091 4.3% 6.4% 12.4% Eastern NC 2,681 3.7% -7.4% -7.4% Tampa, FL 2,669 3.7% 3.3% 12.5% Nashville, TN 2,576 3.6% -1.5% 1.8% Charlotte, NC 2,566 3.5% 6.1% 5.6% Memphis, TN 2,196 3.0% 10.6% 6.1% Greensboro, NC 2,123 2.9% 19.1% 13.0% Hampton Roads, VA 1,830 2.5% 2.0% 10.9%
- ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL STRUCTURE: W/Avg. % of Market Amount Interest Rate Capitalization ------------------- ----------------------- -------------- (in million) Debt: Secured mortgage debt $474.0 7.6% 15.7% Tax-exempt bonds 141.1 6.9% 4.7% Senior unsecured debt 595.2 7.5% 19.8% Unsecured credit facilities 307.0 6.1% 10.2% Secured credit facilities 31.7 6.4% 1.0% ------------------- --------------- -------------------- Combined total debt $1,549.0 7.2% 51.4% Equity: Preferred at par $255.0 8.5% Common (including OP Units) at $11.38 1,208.9 40.1% ------------------- -------------------- Total market capitalization $3,012.9 100.0% Coverage Ratios: Interest Coverage Ratio 2.5 Fixed Charge Coverage 2.1 Debt Structure: Fixed Rate $1,161.7 75.0% Floating Rate 387.3* 25.0% ------------------- --------------- $1,549.0 100.0%
* $45 million of this amount is fixed via a swap. Floating debt not fixed via a swap is $342.3 million or 22%. Signatures Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. UNITED DOMINION REALTY TRUST, INC. Date: October 28, 1998 /s/ James Dolphin ---------------- --------------------------- James Dolphin, Senior Vice President Chief Financial Officer Date: October 28, 1998 /s/ Robin R. Flanagan ---------------- --------------------------- Robin R. Flanagan, Assistant Vice President and Chief Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----