8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): January 31, 2005

UNITED DOMINION REALTY TRUST, INC.

(Exact name of Registrant as specified in its charter)

Maryland	1-10524	54-0857512
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1745 Shea Center Drive, Suite 200, Highlands Ranch, Colorado 80129

(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (720) 283-6120

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c))

TABLE OF CONTENTS

	ITEM 2.02. Results of Operations and Financial Condition.
	ITEM 9.01. Financial Statements and Exhibits.
Signatures
Exhibit Index
Press Release

ITEM 2.02. Results of Operations and Financial Condition.

     On January 31, 2005, United Dominion Realty Trust, Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2004. A copy of the press release is furnished as Exhibit 99.1 to this report. This Form 8-K and the attached exhibit are furnished to, but not filed with, the Securities and Exchange Commission.

ITEM 9.01. Financial Statements and Exhibits.

     (c) Exhibits

Exhibit No.	Description
99.1	Press Release dated January 31, 2005

Signatures

     Pursuant to the requirements of the Securities 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: January 31, 2005	By:	/s/ Scott A. Shanaberger Name:   Scott A. Shanaberger Title:     Senior Vice President and               Chief Accounting Officer

Exhibit Index

Exhibit No.	Description
99.1	Press Release dated January 31, 2005

EX-99.1 2 d22043exv99w1.htm PRESS RELEASE

Exhibit 99.1

For details contact:
Larry Thede
Phone (720)283-2450
E-mail: ir@udrt.com
www.udrt.com

PRESS RELEASE
For Immediate Release

UNITED DOMINION REALTY TRUST, INC. ANNOUNCES

FOURTH QUARTER RESULTS

RICHMOND, VA. (January 31, 2005) United Dominion Realty Trust, Inc. (NYSE: UDR) today reported Funds From Operations (“FFO”) of $57.5 million, or $0.39 per share (diluted), for the quarter ended December 31, 2004. For the same period a year ago, the Company reported FFO of $53.8 million, or $0.37 per share (diluted). FFO for the twelve months ended December 31, 2004 was $219.6 million, or $1.51 per share (diluted). For the same period a year ago, the Company reported FFO of $208.4 million, or $1.52 per share (diluted).

“I’m pleased to report that we continued to gain traction in our operations with growth in rent and Net Operating Income (“NOI”) during the fourth quarter,” stated Thomas W. Toomey, President and Chief Executive Officer. “Throughout 2004, we registered sequential quarterly improvement in year over year comparisons for rent and net operating income. The 2.1% growth in NOI for the fourth quarter was our best performance in over two years. These improvements in overall operating results, combined with our recent $1.3 billion in acquisitions and sales afford us an excellent base to build from for 2005.”

Highlights

•   Acquired 11 communities for $529 million

•   Sold 9 communities for $112 million

•   Issued $100 million of 5.00% senior unsecured notes due January 2012

•   Issued $25 million of 4.30% senior unsecured notes due July 2007

•   Issued $100 million of 5.25% senior unsecured notes due January 2015

•   Issued 4.5 million shares of common stock for net proceeds of $91.3 million

•   Redeemed 2 million shares of Series D Cumulative Convertible Redeemable Preferred Stock

Portfolio Operating Performance and Same Community Results

During the fourth quarter, 64,177 apartment homes, or 81% of total apartment homes, were classified as Same Community. The Company defines Same Community as all multifamily communities owned and stabilized for at least one year as of the beginning of the most recent quarter.

Same Community Results, Year/Year
($ in thousands, except monthly rent)

	4th Qtr '04			4th Qtr '03			% Change
Rent and other income	$	138,897		$	136,096			2.1	%
Concessions		4,085			3,928			4.0
Bad debt		729			656			11.1
Total income		134,083			131,512			2.0
Expenses		51,373			50,483			1.8
Net operating income		82,710			81,029			2.1
Avg. monthly collections per occupied home	$	710		$	707			0.4	%
Avg. monthly reimbursements per occupied home		30			27			11.1
Avg. physical occupancy		94.1	%		92.9	%	120 bps
Operating margin		61.7			61.6		10 bps
Annualized resident turnover rate		59.5			62.4		-290 bps
Resident credit loss, % of effective rent		0.5			0.5		0 bps

Same Community represents 41 markets, of which 28 markets, or 68%, generated positive Same Community revenue growth and 25 markets, or 61%, generated positive Same Community NOI when compared to the prior year.

Same Community Results, Quarter/Quarter
($ in thousands, except monthly rent)

	4th Qtr '04			3rd Qtr '04			% Change
Rent and other income	$	138,897		$	138,641			0.2	%
Concessions		4,085			4,058			0.7
Bad debt		729			634			15.0
Total income		134,083			133,949			0.1
Expenses		51,373			52,399			-2.0
Net operating income		82,710			81,550			1.4
Avg. monthly collections per occupied home	$	710		$	709			0.1	%
Avg. monthly reimbursements per occupied home		30			29			3.4
Avg. physical occupancy		94.1	%		94.2	%	-10 bps
Operating margin		61.7			60.9		80 bps
Annualized resident turnover rate		59.5			73.4		-1390 bps
Resident credit loss, % of effective rent		0.5			0.5		0 bps

Same Community represents 41 markets, of which 19 markets, or 46%, generated positive Same Community revenue growth and 24 markets, or 59%, generated positive Same Community NOI growth when compared to the prior quarter.

Non-Mature Properties

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The composition of the Company’s portfolio has changed significantly over the past three years. Currently, 19% of the portfolio is considered ‘non-mature’, meaning that the communities have not been owned or stabilized for at least one year. In the coming quarters, the Same Community portfolio will benefit from an influx of acquired properties currently considered non-mature in California, Metropolitan Washington D.C. and Florida, which are high rent and high occupancy markets. These high barrier markets comprise approximately 76% of non-mature NOI. The overall average monthly rental rate of our non-mature assets is approximately $300 above the current mature portfolio.

Portfolio Repositioning

As previously announced, the Company acquired 11 communities with 3,761 apartment homes for a total purchase price of $529 million (averaging $140,500 per home) during the quarter, which included seven communities in the Essex transaction. These transactions represent a blended capitalization rate of 5.6% using forward twelve months of operations and a reserve for capital expenditures ranging from $270 to $450 per home.

During the fourth quarter, the Company announced sales totaling $112 million (averaging $48,000 per home) at a blended capitalization rate of 8.7% using trailing twelve months of operations less an actual capital expenditure reserve of $470 per home and an implied management fee of 2.75%. The sales include eight communities in Michigan with 1,970 apartment homes for a total of $91.5 million (averaging $46,400 per home), and one community in Louisville, Kentucky for $20.1 million (averaging $56,600 per home). In addition, the Company sold nine acres of land in Texas for $0.8 million. The Company recognized $17.7 million in gains on the sales in the fourth quarter. The Company is under contract to sell 11 communities consisting of 2,623 units for $169 million at a blended cap rate of 5.5%. The communities are located in Houston, Anaheim and Phoenix.

For more details on the Company’s acquisition and disposition activities, see our press release dated December 13, 2004.

“These transactions continue to move us forward on two fronts. Approximately 50% of our projected 2005 NOI is expected to come from California, Florida and the Metro D.C. area, and we have exited two additional markets, bringing our total to 43,” stated W. Mark Wallis, Senior Executive Vice President, Strategy, Legal, Acquisitions, Dispositions & Development.

Financing Activities

In October, the Company issued $100 million of 5.00% senior unsecured notes due January 15, 2012 at spread of 123 basis points. Also in October, the Company issued $25 million of 4.30% senior unsecured notes due July 1, 2007 at spread of 100 basis points. These notes represent a re-opening of the 4.30% senior notes issued on June 25, 2004. These additional notes will constitute a single series of notes, bringing the aggregate principal amount outstanding of the 4.30% senior notes to $75 million. In November, the Company issued $100 million of 5.25% senior unsecured notes due January 15, 2015 at a spread of 127 basis points. During the quarter, the Company issued 4.5 million shares of common stock at a price of approximately $20.48 per share and received net proceeds of $91.3 million.

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eBay Purchase of Rent.com

On December 16, 2004, eBay (Nasdaq: EBAY) announced that it had agreed to acquire privately held Rent.com, a leading Internet listing web site in the apartment and rental housing industry, for approximately $415 million plus acquisition costs, net of Rent.com’s cash on hand. United Dominion owns shares in Rent.com. The acquisition, which is subject to various regulatory approvals and approval of Rent.com’s stockholders, is expected to close in the first quarter of 2005.

If the closing occurs, the Company expects to record a one-time pre-tax gain of between $12 and $14 million. There is no assurance that the Rent.com transaction will close, or if it does, whether the Company will realize the anticipated gain. The Company is considering, among other things, utilizing a portion of the gain to offset prepayment penalties we may elect to incur by prepaying certain secured debt. The earnings guidance shown below does not include the possible effects of the Rent.com transaction.

Earnings Guidance

United Dominion believes that the financial results for 2005 will be affected by international, national and regional economic trends and events, the acquisition and/or disposition of apartment communities and other factors. The Company’s guidance for the first quarter 2005 FFO is $0.37 to $0.39 per share (diluted) and $1.57 to $1.70 per share (diluted) for the full year 2005. All guidance is based on the current expectations and judgment of the Company’s management team.

Detailed assumptions for the Company’s 2005 guidance can be found on our website at:
http://media.corporate-ir.net/media_files/irol/11/112440/guidance/guidance2005.pdf

A reconciliation of the range provided for projected 2005 FFO per share for the full year to Earnings Per Share (“EPS”) for the full year is as follows:

	2005
	High-end			Low-end
Funds From Operations(1)	$	1.70		$	1.57
Conversion to GAAP Share Count (2)		0.22			0.21
Minority Interest of OP Unit Holders (2)		(0.02	)		(0.04	)
Depreciation (3)		(1.58	)		(1.48	)
Gains (3)		0.15			0.30
Preferred Dividends		(0.07	)		(0.07	)
Expected Earnings Per Share	$	0.40		$	0.49

(1) The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (“FFO”) (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (GAAP)), excluding gains (or losses) from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. The Company believes that

4

FFO is helpful to investors as a supplemental measure of the operating performance of a real estate company because it provides investors an understanding of the ability of the Company to incur and service debt and to make capital expenditures. FFO in and of itself does not represent net income or net cash flows from operating activities in accordance with GAAP. Therefore, FFO should not be exclusively considered as an alternative to net income or to net cash flows from operating activities as determined by GAAP or as a measure of liquidity.
(2) Operating Partnership units are not considered to be common stock equivalents for GAAP purposes.
(3) Due to the uncertain timing and extent of property dispositions and acquisitions, actual results could differ materially from expected EPS.

Supplemental Information

The Company offers Supplemental Information that provides information regarding the financial position and operating results of the Company. This Supplemental Information is available on the Company’s website at: www.udrt.com/resources/files/Investor_Relations/4Q2004.pdf

Conference Call Information

Date: February 1, 2005
Time:1:00 p.m. Eastern Time

To Participate in the Telephone Conference Call:

Dial in at least five minutes prior to start time.
Domestic: 800-218-0530
International: 303-262-2125
If you have any questions, please contact: Karen Droba
Phone: 312-640-6770
E-mail: kdroba@financialrelationsboard.com

Conference Call Playback:
Domestic: 800-405-2236
International: 303-590-3000
Passcode: 11019477
The playback can be accessed until March 15, 2005 at midnight EST.

Webcast:
The conference call will also be available on UDR’s website at www.udrt.com and at www.ccbn.com. To listen to a live broadcast, go to one of these sites at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. A replay will also be available for 90 days on UDR’s website and also on CCBN’s website.

About United Dominion Realty Trust, Inc.

United Dominion is the fourth largest apartment REIT, owning and operating apartment communities nationwide. The Company has a 32-year history during which it has raised the dividend each of the last 28 years. United Dominion is included in the S&P MidCap 400 Index.

5

The Company currently owns 78,855 apartment homes and has 1,311 homes currently under development. Additional information about United Dominion may be found on its Web site at www.udrt.com.

Statements contained in this press release, which are not historical facts, are forward-looking statements, as the term is defined in the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the Company’s use of words such as, “expects,” “plans,” “estimates,” “projects,” “intends,” “believes,” and similar expressions that do not relate to historical matters. Such forward-looking statements are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated, 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 competition and competitive pricing, acquisitions or new developments not achieving anticipated results, the expectation that approximately 50% of projected 2005 net operating income will come from California, Florida and Metropolitan Washington D.C., delays in completing developments and lease-ups on schedule, difficulties in selling existing apartment communities, 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. All forward-looking statements in this press release are made as of today, based upon information known to management as of the date hereof. The Company assumes no obligation to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.

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Attachment 1

UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
In thousands, except per share amounts	2004			2003			2004			2003
Rental income	$	163,832		$	138,732		$	604,270		$	542,894
Rental expenses:
Real estate taxes and insurance		18,660			15,782			71,055			62,329
Personnel		17,387			14,310			63,878			55,252
Utilities		9,457			8,062			36,625			32,244
Repair and maintenance		10,012			9,785			38,409			34,909
Administrative and marketing		5,816			5,151			21,299			19,793
Property management		4,717			4,242			17,881			16,873
Other operating expenses		375			293			1,226			1,205
		66,424			57,625			250,373			222,605
Non-property income		395			365			2,608			1,068
Other expenses:
Real estate depreciation and amortization		49,228			39,106			171,781			145,706
Interest		35,847			28,444			124,087			117,457
General and administrative		6,081			4,493			19,316			20,626
Hurricane related expenses		—			—			5,503			—
Impairment loss on investments		—			—			—			1,392	(B)
Other depreciation and amortization		809			869			3,372			3,087
		91,965			72,912			324,059			288,268
Income before minority interests and discontinued operations		5,838			8,560			32,446			33,089
Minority interests of outside partnerships		(15	)		—			(182	)		(614	)
Minority interests of unitholders in operating partnerships		(3	)		588			(443	)		874
Income before discontinued operations, net of minority interests		5,820			9,148			31,821			33,349
Income from discontinued operations, net of minority interests (including gain on sales) (A)		19,693			11,887			65,331			37,055
Net income		25,513			21,035			97,152			70,404
Distributions to preferred stockholders — Series B		(2,911	)		(2,911	)		(11,644	)		(11,645	)
Distributions to preferred stockholders — Series D (Convertible)		(348	)		(1,696	)		(3,473	)		(12,178	)
Distributions to preferred stockholders — Series E (Convertible)		(1,000	)		(1,138	)		(4,414	)		(2,503	)
Premium on preferred stock conversions		(1,042	)		(921	)		(5,729	)		(19,271	)
Net income available to common stockholders	$	20,212		$	14,369		$	71,892		$	24,807
Earnings per weighted average common share — basic:
Income/(loss) from continuing operations available to common stockholders, net of minority interests	$	0.00		$	0.02		$	0.05			($0.10	)
Income from discontinued operations, net of minority interests	$	0.15		$	0.10		$	0.51		$	0.32
Net income available to common stockholders	$	0.15		$	0.12		$	0.56		$	0.22
Earnings per weighted average common share — diluted:
Income/(loss) from continuing operations available to common stockholders, net of minority interests	$	0.00		$	0.02		$	0.05			($0.10	)
Income from discontinued operations, net of minority interests	$	0.15		$	0.10		$	0.51		$	0.32
Net income available to common stockholders	$	0.15		$	0.12		$	0.56		$	0.22
Common distributions declared per share	$	0.2925		$	0.2850		$	1.1700		$	1.1400
Weighted average number of common shares outstanding — basic		131,136			121,854			128,097			114,672
Weighted average number of common shares outstanding — diluted		132,172			122,846			129,080			114,672

(A)	Discontinued operations represents all properties sold since January 1, 2002 and properties that are currently classified as held for disposition at December 31, 2004.
(B)	Represents the write-off of the Company’s investment in Realeum, Inc., an unconsolidated development joint venture created to develop web-based solutions for multifamily property and portfolio management.

Attachment 2

UNITED DOMINION REALTY TRUST, INC.
FUNDS FROM OPERATIONS
(Unaudited)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
In thousands, except per share amounts	2004			2003				2004			2003
Net income	$	25,513		$	21,035			$	97,152		$	70,404
Adjustments:
Distributions to preferred stockholders		(4,259	)		(5,745	)			(19,531	)		(26,326	)
Real estate depreciation and amortization, net of outside partners’ interest in 2003		49,228			39,106				171,781			145,271
Minority interests of unitholders in operating partnership		3			(588	)			443			(874	)
Real estate depreciation related to unconsolidated entities		72			60				279			196
Discontinued Operations:
Real estate depreciation		769			4,100				8,847			17,687
Minority interests of unitholders in operating partnership		1,326			809				4,400			2,521
Net gain on sale of depreciable property		(17,664	)		(7,793	)			(52,903	)		(15,941	)
Funds from operations (“FFO”) — basic	$	54,988		$	50,984			$	210,468		$	192,938
Distribution to preferred stockholders — Series D and E (Convertible)		1,348			2,834				7,887			14,681
Funds from operations — diluted	$	56,336		$	53,818			$	218,355		$	207,619
Gains on the disposition of real estate developed for sale (A)		1,202			—				1,202			812
FFO with gains on the disposition of real estate developed for sale — diluted	$	57,538		$	53,818			$	219,557		$	208,431
Weighted average number of common shares and OP Units outstanding — basic		139,882			130,565				136,852			122,589
Weighted average number of common shares, OP Units, and common stock equivalents outstanding — diluted		148,302			144,440				145,842			136,975
FFO per common share — basic	$	0.39		$	0.39			$	1.54		$	1.57
FFO per common share — diluted	$	0.39		$	0.37			$	1.51		$	1.52

FFO is defined as net income (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. This definition conforms with the National Association of Real Estate Investment Trust’s definition issued in April 2002. United Dominion considers 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 flows as a measure of United Dominion’s activities in accordance with generally accepted accounting principles and is not necessarily indicative of cash available to fund cash needs.

For the three months ended December 31, 2004 and 2003, distributions to preferred stockholders exclude $1.0 million and $0.9 million, respectively, related to premiums on preferred stock conversions. For the twelve months ended December 31, 2004 and 2003, distributions to preferred stockholders exclude $5.7 million and $19.3 million, respectively, related to premiums on preferred stock conversions.

(A)See Attachment 2(A) for further discussion.

Attachment 2(A)

UNITED DOMINION REALTY TRUST, INC.
FUNDS FROM OPERATIONS (continued)
(Unaudited)

The following is a reconciliation of GAAP gains from the disposition of real estate developed for sale to gross gains from the disposition of real estate developed for sale.

	Three Months Ended					Twelve Months Ended
	December 31,					December 31,
In thousands	2004			2003		2004			2003
GAAP gains from the disposition of real estate developed for sale	$	1,278		$	—	$	1,278		$	1,249
Less: accumulated depreciation		(76	)		—		(76	)		(437	)
Gains from the disposition of real estate developed for sale	$	1,202		$	—	$	1,202		$	812

Gains from the disposition of real estate investments developed for sale is defined as net sales proceeds less a tax provision (such development by REITs must be conducted in a TRS) and the gross investment basis of the asset before accumulated depreciation. We consider FFO with gains/losses on real estate developed for sale to be a meaningful supplemental measure of performance because the short-term use of funds produce a profit which differs from the traditional long-term investment in real estate for REITs.

Attachment 3

UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

	December 31,			December 31,
In thousands, except share and per share amounts	2004			2003
ASSETS
Real estate owned:
Real estate held for investment	$	5,029,516		$	3,900,573
Less: accumulated depreciation		(978,651	)		(809,524	)
		4,050,865			3,091,049
Real estate under development		65,758			29,715
Real estate held for disposition (net of accumulated depreciation of $29,236 and $87,106)		118,786			334,157
Total real estate owned, net of accumulated depreciation		4,235,409			3,454,921
Cash and cash equivalents		7,904			4,824
Restricted cash		6,086			7,540
Deferred financing costs, net		25,151			21,425
Investment in unconsolidated development joint venture		458			1,673
Funds held in escrow from 1031 exchanges pending the acquisition of real estate		17,039			14,447
Notes receivable		5,000			13,000
Other assets		34,347			25,247
Other assets — real estate held for disposition		607			566
Total assets	$	4,332,001		$	3,543,643
LIABILITIES AND STOCKHOLDERS’ EQUITY
Secured debt	$	1,197,924		$	1,018,028
Unsecured debt		1,682,058			1,114,009
Real estate taxes payable		31,356			29,776
Accrued interest payable		18,773			12,892
Security deposits and prepaid rent		25,168			21,412
Distributions payable		44,624			40,623
Accounts payable, accrued expenses, and other liabilities		50,217			44,749
Other liabilities — real estate held for disposition		2,837			4,512
Total liabilities		3,052,957			2,286,001
Minority interests		83,593			94,206
Stockholders’ equity
Preferred stock, no par value; $25 liquidation preference,
25,000,000 shares authorized; 5,416,009 shares of 8.60% Series B Cumulative Redeemable issued and outstanding (5,416,009 shares in 2003)		135,400			135,400
0 shares of 7.50% Series D Cumulative Convertible Redeemable issued and outstanding (2,000,000 shares in 2003)		—			44,271
2,803,812 shares of 8.00% Series E Cumulative Convertible issued and outstanding (3,425,217 shares in 2003)		46,571			56,893
Common stock, $1 par value; 250,000,000 shares authorized 136,429,592 shares issued and outstanding (127,295,126 shares in 2003)		136,430			127,295
Additional paid-in capital		1,614,916			1,458,983
Distributions in excess of net income		(731,808	)		(651,497	)
Deferred compensation — unearned restricted stock awards		(6,058	)		(5,588	)
Notes receivable from officer-stockholders		—			(459	)
Accumulated other comprehensive loss, net		—			(1,862	)(A)
Total stockholders’ equity		1,195,451			1,163,436
Total liabilities and stockholders’ equity	$	4,332,001		$	3,543,643

(A)   Represents net unrealized loss on derivative instrument transactions.

EX-99.1

exv99w1