UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
FOR QUARTERLY AND TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to_________
Commission file number 1-10524
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UNITED DOMINION REALTY TRUST, INC.
----------------------------------
(Exact name of registrant as specified in its charter)
Virginia 54-0857512
- - ------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
400 East Cary Street, Richmond, Virginia 23219-3802
- - --------------------------------------------------------------------------------
(Address of principal executive offices - zip code)
(804) 780-2691
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to filing requirements
for at least the past 90 days.
Yes X No ______
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APPLICABLE ONLY TO CORPORATE USERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of May 8, 2001:
Common Stock, $1 Par Value: 101,291,902
UNITED DOMINION REALTY TRUST, INC.
FORM 10-Q
INDEX
PAGE
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PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (unaudited)
Consolidated Balance Sheets as of March 31, 2001 and December 31, 2000.................. 3
Consolidated Statements of Operations for the three months ended
March 31, 2001 and 2000............................................................. 4
Consolidated Statements of Cash Flows for the three months ended
March 31, 2001 and 2000............................................................. 5
Consolidated Statement of Shareholders' Equity for the three months ended
March 31, 2001...................................................................... 6
Notes to Consolidated Financial Statements.............................................. 7-14
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations.......................................................................... 15-24
Item 3. Quantitative and Qualitative Disclosures About Market Risk.............................. 25
PART II - OTHER INFORMATION
Item 1. Legal Proceedings....................................................................... 26
Item 2. Changes in Securities................................................................... 26
Item 3. Defaults Upon Senior Securities......................................................... 26
Item 4. Submission of Matters to a Vote of Security Holders..................................... 26
Item 5. Other Information....................................................................... 26
Item 6. Exhibits and Reports on Form 8-K........................................................ 26-30
Signatures ..................................................................................... 31
2
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
March 31, December 31,
2001 2000
- - ---------------------------------------------------------------------------------------------------------------------------------
ASSETS
Real estate owned:
Real estate held for investment (Note 2) $ 3,666,312 $ 3,758,974
Less: accumulated depreciation (532,739) (506,871)
-------------- --------------
3,133,573 3,252,103
Real estate under development 51,884 60,366
Real estate held for disposition (net of accumulated depreciation of $15,937
and $2,534) (Note 3) 120,585 14,446
-------------- --------------
Total real estate owned, net of accumulated depreciation 3,306,042 3,326,915
Cash and cash equivalents 7,442 10,305
Restricted cash 33,593 44,943
Deferred financing costs 13,650 14,271
Investment in unconsolidated development joint venture (Note 4) 7,886 8,088
Other assets 52,050 49,435
-------------- --------------
Total assets $ 3,420,663 $ 3,453,957
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Secured debt (Note 5) $ 838,014 $ 866,115
Unsecured debt (Note 6) 1,177,438 1,126,215
Real estate taxes payable 21,060 30,554
Accrued interest payable 16,033 18,059
Security deposits and prepaid rent 23,266 22,524
Distributions payable 36,242 36,128
Accounts payable, accrued expenses and other liabilities 54,277 47,144
-------------- --------------
Total liabilities 2,166,330 2,146,739
Minority interests 86,160 88,326
Shareholders' equity
Preferred stock, no par value; $25 liquidation preference,
25,000,000 shares authorized;
3,954,920 shares 9.25% Series A Cumulative Redeemable issued and outstanding
(3,969,120 in 2000) 98,873 99,228
5,432,109 shares 8.60% Series B Cumulative Redeemable issued and outstanding
(5,439,109 in 2000) 135,803 135,978
8,000,000 shares 7.50% Series D Cumulative Convertible Redeemable issued
and outstanding (8,000,000 in 2000) 175,000 175,000
Common stock, $1 par value; 150,000,000 shares authorized
101,369,483 shares issued and outstanding (102,219,250 in 2000) 101,369 102,219
Additional paid-in capital 1,073,051 1,081,387
Distributions in excess of net income (397,233) (366,531)
Notes receivable from officer-shareholders (7,382) (7,561)
Deferred compensation - unearned restricted stock awards (2,194) (828)
Accumulated other comprehensive loss (Note 7) (9,114) -
-------------- --------------
Total shareholders' equity 1,168,173 1,218,892
-------------- --------------
Total liabilities and shareholders' equity $ 3,420,663 $ 3,453,957
============== ==============
See accompanying notes to consolidated financial statements.
3
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended March 31, 2001 2000
- - ----------------------------------------------------------------------------------------------
REVENUES
Rental income $ 152,816 $ 154,057
Non-property income 1,136 1,070
----------- ----------
Total revenues 153,952 155,127
EXPENSES
Rental expenses:
Real estate taxes and insurance 17,561 17,483
Personnel 16,050 16,438
Repair and maintenance 8,476 8,532
Utilities 7,638 6,534
Administrative and marketing 5,833 5,923
Property management 3,790 4,643
Other operating expenses 430 402
Real estate depreciation 40,398 33,904
Interest 37,221 39,075
Severance costs and other organizational charges 5,404 -
Impairment loss on real estate and investments (Note 3) 3,188 -
General and administrative 4,505 3,870
Other depreciation and amortization 881 1,203
----------- ----------
Total expenses 151,375 138,007
----------- ----------
Income before gains on sales of investments, minority interests
and extraordinary item 2,577 17,120
Gains on sales of depreciable property 4,102 2,533
----------- ----------
Income before minority interests and extraordinary item 6,679 19,653
Minority interests of unitholders in operating partnerships 244 (668)
Minority interests of unitholders in other partnerships (1,004) (177)
----------- ----------
Income before extraordinary item 5,919 18,808
Extraordinary item - early extinguishment of debt (187) (228)
----------- ----------
Net income 5,732 18,580
Distributions to preferred shareholders - Series A and B (5,206) (5,583)
Distributions to preferred shareholders - Series D (Convertible) (3,857) (3,825)
Discount on preferred share repurchases 23 -
----------- ----------
Net income (loss) available to common shareholders $ (3,308) $ 9,172
=========== ==========
Earnings (loss) per common share (Note 8):
Basic $ (0.03) $ 0.09
=========== ==========
Diluted $ (0.03) $ 0.09
=========== ==========
Common distributions declared per share $ 0.2700 $ 0.2675
=========== ==========
Weighted average number of common shares outstanding-basic 101,346 103,019
Weighted average number of common shares outstanding-diluted 101,346 103,045
See accompanying notes to consolidated financial statements.
4
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended March 31, 2001 2000
- - ----------------------------------------------------------------------------------------------------------------------
Operating Activities
Net income $ 5,732 $ 18,580
Adjustments to reconcile net income to cash provided
by operating activities:
Depreciation and amortization 41,279 35,107
Impairment loss on real estate and investments 3,188 -
Gains on sales of investments (4,102) (2,533)
Minority interests 760 845
Extraordinary item-early extinguishment of debt 187 228
Amortization of deferred financing costs and other 883 1,057
Changes in operating assets and liabilities:
Decrease in operating liabilities (12,989) (8,272)
Decrease in operating assets 15,564 3,896
--------------- ---------------
Net cash provided by operating activities 50,502 48,908
Investing Activities
Proceeds from sales of real estate investments, net 4,236 13,042
Development of real estate assets (11,744) (19,653)
Capital expenditures - real estate assets, net of escrow reimbursement (11,322) (6,220)
Acquisition of real estate assets, net of liabilities assumed (4,410) -
Capital expenditures - non-real estate assets (360) (1,766)
1031 exchange funds held in escrow (7,233) -
--------------- ---------------
Net cash used in investing activities (30,833) (14,597)
Financing Activities
Scheduled principal payments on secured notes payable ( 2,709) (3,573)
Non-scheduled principal payments on secured notes payable (20,620) (49,645)
Proceeds from the issuance of unsecured notes payable - 146,700
Payments on unsecured notes payable (16,993) (8,351)
Net borrowing/(repayment) of short-term bank debt 68,300 (83,900)
Payment of financing costs (180) (935)
Proceeds from the issuance of common stock 1,966 4,305
Distributions paid to minority interests (2,528) (2,393)
Distributions paid to preferred shareholders (9,081) (9,355)
Distributions paid to common shareholders (27,238) (26,899)
Repurchase of operating partnership units (353) -
Repurchase of common and preferred stock (13,096) (1,986)
--------------- ---------------
Net cash used in financing activities (22,532) (36,032)
Net decrease in cash and cash equivalents (2,863) (1,721)
Cash and cash equivalents, beginning of period 10,305 7,678
--------------- ---------------
Cash and cash equivalents, end of period $ 7,442 $ 5,957
=============== ===============
Supplemental Information:
Interest paid during the period $ 38,711 $ 34,466
Conversion of operating partnership units to common stock 11 626
Issuance of restricted stock awards 1,548 829
Non-cash transactions associated with the acquisition of properties:
Secured debt assumed 2,915 -
Non-cash transactions associated with the disposition of properties:
Reduction in secured debt 7,694 10,367
See accompanying notes to consolidated financial statements.
5
UNITED DOMINION REALTY TRUST, INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(In thousands, except per share data)
(Unaudited)
Preferred Stock Common Stock
----------------------------------------------------
Shares Amount Shares Amount
- - ------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000 17,408,229 $ 410,206 102,219,250 $ 102,219
Comprehensive Income
Net income
Other comprehensive loss:
Cumulative effect of a change in accounting principle (Note 7)
Unrealized loss on derivative instruments (Note 7)
----------------------------------------------------------------------------------------------------------------------
Comprehensive loss
----------------------------------------------------------------------------------------------------------------------
Issuance of common shares to employees,
officers and director-shareholders 33,278 33
Issuance of common shares through dividend reinvestment
and stock purchase plan 95,972 96
Purchase of common and preferred stock (21,200) (530) (1,116,856) (1,117)
Issuance of restricted stock awards 127,100 127
Adjustment for cash purchase and conversion of
minority interests of unitholders in operating partnerships 10,739 11
Principal repayments on notes receivable from officer-
shareholders
Common stock distributions declared ($.27 per share)
Preferred stock distributions declared-Series A ($.54 per share)
Preferred stock distributions declared-Series B ($.54 per share)
Preferred stock distributions declared-Series D ($.48 per share)
Amortization of deferred compensation
--------------------------------------------------
Balance, March 31, 2001 17,387,029 $ 409,676 101,369,483 $ 101,369
==================================================
Distributions in Notes Receivable
Paid-in Excess of from Officer -
Capital Net Income Shareholders
- - ----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000 $ 1,081,387 $ (366,531) $ (7,561)
Comprehensive Income
Net income 5,732
Other comprehensive loss:
Cumulative effect of a change in accounting principle (Note 7)
Unrealized loss on derivative instruments (Note 7)
--------------------------------------------------------------------------------------------------------------------------------
Comprehensive loss 5,732
--------------------------------------------------------------------------------------------------------------------------------
Issuance of common shares to employees,
officers and director-shareholders 554
Issuance of common shares through dividend reinvestment
and stock purchase plan 1,104
Purchase of common and preferred stock (11,449)
Issuance of restricted stock awards 1,421
Adjustment for cash purchase and conversion of
minority interests of unitholders in operating partnerships 34
Principal repayments on notes receivable from officer-
shareholders 179
Common stock distributions declared ($.27 per share) (27,371)
Preferred stock distributions declared-Series A ($.54 per share) (2,286)
Preferred stock distributions declared-Series B ($.54 per share) (2,920)
Preferred stock distributions declared-Series D ($.48 per share) (3,857)
Amortization of deferred compensation
------------------------------------------------------
Balance, March 31, 2001 $ 1,073,051 $ (397,233) $ (7,382)
======================================================
Deferred Accumulated
Compensation - Other
Unearned Restricted Comprehensive
Stock Awards Loss Total
- - -------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 2000 $ (828) $ - $ 1,218,892
Comprehensive Income
Net income 5,732
Other comprehensive loss:
Cumulative effect of a change in accounting principle (Note 7) (3,848) (3,848)
Unrealized loss on derivative instruments (Note 7) (5,266) (5,266)
----------------------------------------------------------------------------------------------------------------------------
Comprehensive loss (9,114) (3,382)
----------------------------------------------------------------------------------------------------------------------------
Issuance of common shares to employees,
officers and director-shareholders 587
Issuance of common shares through dividend reinvestment
and stock purchase plan 1,200
Purchase of common and preferred stock (13,096)
Issuance of restricted stock awards (1,548) -
Adjustment for cash purchase and conversion of
minority interests of unitholders in operating partnerships 45
Principal repayments on notes receivable from officer-
shareholders 179
Common stock distributions declared ($.27 per share) (27,371)
Preferred stock distributions declared-Series A ($.54 per share) (2,286)
Preferred stock distributions declared-Series B ($.54 per share) (2,920)
Preferred stock distributions declared-Series D ($.48 per share) (3,857)
Amortization of deferred compensation 182 182
----------------------------------------------------------
Balance, March 31, 2001 $ (2,194) $ (9,114) $ 1,168,173
==========================================================
See accompanying notes to consolidated financial statements.
6
UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001
(UNAUDITED)
1. Basis of Presentation
The accompanying consolidated financial statements include the accounts of
United Dominion and its subsidiaries, including United Dominion Realty, L.P.
(the "Operating Partnership"), and Heritage Communities L.P. (the "Heritage
OP"), (collectively, "United Dominion"). As of March 31, 2001, there were
74,486,812 units in the Operating Partnership outstanding, of which 67,693,188
units, or 90.9%, were owned by United Dominion and 6,793,624 units, or 9.1%,
were owned by non-affiliated limited partners. As of March 31, 2001, there were
4,535,846 units in the Heritage OP outstanding, of which 3,910,755 units, or
86.2%, were owned by United Dominion and 625,091 units, or 13.8%, were owned by
non-affiliated limited partners. The consolidated financial statements of United
Dominion include the minority interests of the unitholders in the operating
partnerships.
The accompanying interim unaudited consolidated financial statements have been
prepared according to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted according to such rules and
regulations, although management believes that the disclosures are adequate to
make the information presented not misleading. The accompanying consolidated
financial statements should be read in conjunction with the audited financial
statements and related notes appearing in United Dominion's December 31, 2000
Annual Report on Form 10-K filed with the Securities and Exchange Commission.
In the opinion of management, the consolidated financial statements reflect all
adjustments which are necessary for the fair presentation of financial position
at March 31, 2001 and results of operations for the interim periods ended March
31, 2001 and 2000. Such adjustments are normal and recurring in nature. All
significant inter-company accounts and transactions have been eliminated in
consolidation. The interim results presented are not necessarily indicative of
results that can be expected for a full year.
The preparation of these financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent liabilities at the dates of the
financial statements and the amounts of revenues and expenses during the
reporting periods. Actual amounts realized or paid could differ from those
estimates.
Certain previously reported amounts have been reclassified to conform to the
current financial statement presentation.
2. Real Estate Held for Investment
At March 31, 2001 there are 270 communities with 75,488 apartment homes
classified as real estate held for investment. The following table summarizes
the components of real estate held for investment at March 31, 2001 and December
31, 2000 (dollars in thousands):
March 31, December 31,
2001 2000
----------------- -----------------
Land and land improvements $ 543,160 $ 668,003
Buildings and improvements 2,936,582 2,902,386
Furniture, fixtures and equipment 186,257 188,321
Construction in progress 313 264
----------------- -----------------
Real estate held for investment 3,666,312 3,758,974
Accumulated depreciation (532,739) (506,871)
----------------- -----------------
Real estate held for investment, net
of accumulated depreciation
$3,133,573 $3,252,103
================= =================
7
UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001
(UNAUDITED)
3. Real Estate Held for Disposition
At March 31, 2001, United Dominion had six apartment communities with 1,638
homes, eleven parcels of land and three commercial properties included in real
estate held for disposition totaling $120.6 million, which is net of $15.9
million of accumulated depreciation. Real estate held for disposition
contributed total revenues of $4.4 million and $4.1 million and property
operating income (property rental income less property operating expense) of
$2.7 million and $2.4 million for the three month periods ended March 31, 2001
and 2000, respectively. Certain assets are secured by mortgage indebtedness,
which may be assumed by the purchaser or repaid from the net proceeds.
During the first quarter of 2001, United Dominion performed an analysis of the
carrying value of all undeveloped land parcels in connection with the Company's
plans to accelerate the disposition of these sites. As a result, an aggregate
$2.8 million impairment loss was recognized on seven undeveloped sites in
selected markets. An impairment loss was indicated as a result of the net book
value of the assets being greater than the estimated fair market value less the
cost of disposal.
4. Investment in Unconsolidated Joint Venture
At March 31, 2001, United Dominion's investment in an unconsolidated joint
venture ("the venture") consisted of a 25% partnership interest in a development
joint venture in which the Company is serving as the managing partner. No gain
or loss was recognized on the Company's contribution to the development joint
venture. The venture will develop five apartment communities with a total of
1,438 homes for an aggregate total cost of approximately $103 million. Upon
closing of the venture in June 2000, United Dominion contributed the projects in
return for its equity interest of approximately $8 million in the venture and
was reimbursed for approximately $35 million of development outlays that were
incurred prior to closing the joint venture.
United Dominion serves as the developer, general contractor and property manager
for the venture and recognized fee income, to the extent of the outside
partner's interest, of approximately $0.4 million for services provided by the
Company to the joint venture for the quarter ended March 31, 2001. As of March
31, 2001, four of the joint venture properties were complete and one property
remains under development with completion anticipated to occur in the third
quarter of 2001. The Company has the option, but not the obligation, to purchase
these properties for fair value upon completion of the projects. Although the
legal termination date of the joint venture is December 2006, the Company does
not anticipate that the venture's useful life will exceed three years.
The following is a summary of the financial position of the joint venture as of
March 31, 2001 and December 31, 2000 (dollars in thousands):
March 31, December 31,
2001 2000
-------------- --------------
Assets:
Real estate, net $94,014 $85,644
Other assets 3,699 6,507
-------------- --------------
Total assets $97,713 $92,151
============== ==============
Liabilities and partners' equity:
Mortgage notes payable $59,227 $49,785
Other liabilities 7,779 11,436
Partners' equity 30,707 30,930
-------------- --------------
Total liabilities and partners' equity $97,713 $92,151
============== ==============
8
5. Secured Debt
Secured debt, which encumbers $1.4 billion or 38.5% of United Dominion's real
estate owned ($2.4 billion or 61.5% of United Dominion's real estate owned is
unencumbered) consists of the following at March 31, 2001 (dollars in
thousands):
No. of
Weighted Avg. Weighted Avg. Communities
Principal Outstanding Interest Rate Years to Maturity Encumbered
----------------------------- ----------------------------------------------------
March 31, December 31,
2001 2000 2001 2001 2001
- - ---------------------------------------------------------------- ----------------------------------------------------
Fixed Rate Debt
Mortgage Notes Payable (a) $511,332 $513,962 7.81% 5.5 74
Tax-Exempt Secured Notes Payable 76,287 79,756 6.80% 13.3 10
Secured Credit Facilities (b) 17,000 17,000 7.04% 12.8 --
----------------------------- ----------------------------------------------------
Total Fixed Rate Secured Debt 604,619 610,718 7.66% 6.7 84
Variable Rate Debt
Secured Credit Facilities (b) 196,340 216,960 7.33% 13.1 20
Tax-Exempt Secured Notes Payable 19,916 19,916 3.57% 24.2 3
Mortgage Notes Payable 17,139 18,521 7.39% 6.1 4
----------------------------- ----------------------------------------------------
Total Variable Rate Secured Debt 233,395 255,397 7.01% 13.5 27
----------------------------- ----------------------------------------------------
Total Secured Debt $838,014 $866,115 7.46% 8.4 111
============================= ====================================================
(a) Includes fair value adjustments aggregating $9.7 million at March 31, 2001
and $10.2 million at December 31, 2000, recorded in connection with the
ASR Merger and the AAC Merger on March 27, 1998 and December 7, 1998,
respectively.
(b) At March 31, 2001, United Dominion had $213.3 million outstanding under
two revolving credit facilities with the Federal National Mortgage
Association (the "FNMA Credit Facilities"). At March 31, 2001, the FNMA
Credit Facilities had a weighted average floating rate of interest of
7.31%. In order to limit a portion of its interest rate exposure, United
Dominion has two interest rate swap agreements associated with the FNMA
Credit Facilities. These agreements have an aggregate notional value of
$17 million under which United Dominion pays a fixed rate of interest and
receives a variable rate on the notional amount. The interest rate swap
agreements effectively change United Dominion's interest rate exposure on
$17 million of secured debt from a variable rate to a weighted average
fixed rate of 7.04%.
Approximate principal payments due during each of the next five calendar years
and thereafter, as of March 31, 2001, are as follows (dollars in thousands):
Amount
Year Maturing
-----------------------------------------
2001 $ 52,122
2002 54,284
2003 60,918
2004 124,798
2005 126,537
Thereafter 419,355
------------
Total $838,014
============
9
UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001
(UNAUDITED)
6. Unsecured Debt
A summary of unsecured debt at March 31, 2001 and December 31, 2000 is as
follows (dollars in thousands):
2001 2000
-------------- -------------
Commercial Banks
Borrowings outstanding under an
unsecured credit facility (a) (b) $ 312,700 $ 244,400
Borrowings outstanding under an
unsecured term loan (c) 100,000 100,000
Senior Unsecured Notes - Other
7.60% Medium-Term Notes due January 2002 46,750 48,750
7.65% Medium-Term Notes due January 2003 (d) 10,000 10,000
7.22% Medium-Term Notes due February 2003 11,890 11,900
5.05% City of Portland, OR Bonds due October 2003 7,345 7,345
8.63% Notes due March 2003 78,030 79,030
7.98% Notes due March, 2000-2003 (e) 14,857 22,285
7.67% Medium-Term Notes due January 2004 53,510 54,000
7.73% Medium-Term Notes due April 2005 22,400 22,400
7.02% Medium-Term Notes due November 2005 50,000 50,000
7.95% Medium-Term Notes due July 2006 103,308 107,398
7.07% Medium-Term Notes due November 2006 25,000 25,000
7.25% Notes due January 2007 108,310 110,080
ABAG Tax-Exempt Bonds due August 2008 46,700 46,700
8.50% Monthly Income Notes due November 2008 57,403 57,400
8.50% Debentures due September 2024 (f) 125,500 125,500
Other (g) 3,735 4,027
------------- ------------
764,738 781,815
------------- ------------
Total Unsecured Debt $1,177,438 $1,126,215
============= ============
(a) Weighted average interest rate of 6.5% and 7.5% at March 31, 2001 and
December 31, 2000, respectively.
(b) United Dominion had eight interest rate swap agreements associated with
commercial bank borrowings with an aggregate notional value of $155
million under which United Dominion pays a fixed rate of interest and
receives a variable rate of interest on the notional amounts. The
interest rate swaps effectively change United Dominion's interest rate
exposure on these borrowings from a variable rate to a weighted average
fixed rate of approximately 6.98%.
(c) United Dominion had five interest rate swap agreements associated with
borrowings under the term loan with an aggregate notional value of $100
million under which United Dominion pays a fixed rate of interest and
receives a variable rate of interest on the notional amounts. The
interest rate swaps effectively change United Dominion's interest rate
exposure on these borrowings from a variable rate to a weighted average
fixed rate of approximately 7.53%.
(d) United Dominion had one interest rate swap agreement associated with
these unsecured notes with an aggregate notional value of $10 million
under which United Dominion pays a fixed rate of interest and receives
a variable rate on the notional amount. The interest rate swap
agreement effectively changes United Dominion's interest rate exposure
on the $10 million from a variable rate to a fixed rate of 7.65%.
(e) Payable annually in two equal principal installments of $7.4 million.
(f) Includes an investor put feature that grants a one-time option to
redeem the debentures in September 2004.
(g) Includes $3.6 million and $3.8 million at March 31, 2001 and December
31, 2000, respectively, of deferred gains from the termination of
interest rate risk management agreements.
10
UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001
(UNAUDITED)
7. Derivative Instruments and Hedging Activities
Statements of Financial Accounting Standards No. 133 and 138, "Accounting for
Certain Derivative Instruments and Hedging Activities" became effective on
January 1, 2001. The new accounting standards require companies to carry all
derivative instruments, including certain embedded derivatives, in the
consolidated balance sheet at fair value. The accounting for changes in the fair
value of a derivative instrument depends on whether it has been designated and
qualifies as part of a hedging relationship and on the type of hedging
relationship. For those derivative instruments that are designated and qualify
as hedging instruments, a company must designate the hedging instrument, based
on the exposure being hedged, as either a fair value hedge, cash flow hedge or a
hedge of a net investment in a foreign operation. At March 31, 2001, all of the
Company's derivative financial instruments are designated as cash flow hedges of
underlying exposures, and are qualifying hedges for financial reporting
purposes. For derivative instruments that qualify as cash flow hedges, the
effective portion of the gain or loss on the derivative instrument is reported
as a component of other comprehensive income and reclassified into earnings
during the same period or periods during which the hedged transaction affects
earnings. The remaining gain or loss on the derivative instrument in excess of
the cumulative change in the present value of future cash flows of the hedged
item, if any, is recognized in current earnings during the period of change. The
adoption of Statements 133 and 138 on January 1, 2001 resulted in a cumulative
effect of an accounting change of $(3.8) million all of which was recorded
directly to other comprehensive loss.
As part of United Dominion's overall interest rate risk management strategy, the
Company uses derivative financial instruments as a means to modify the exposure
to interest rate risk on variable rate debt obligations or to hedge anticipated
financing transactions. The Company's derivative transactions used for interest
rate risk management include various interest rate swaps with indices that
relate to the pricing of specific financial instruments of United Dominion.
Because of the close correlation between the hedging instrument and the
underlying exposure being hedged, fluctuations in the value of the derivative
instruments are generally offset by changes in the value of the underlying
exposures. As a result, United Dominion believes that is has appropriately
controlled the risk so that derivatives used for interest rate risk management
will not have a material unintended effect on consolidated earnings. The Company
does not enter into derivative financial instruments for trading purposes.
The fair value of the Company's derivative instruments is reported on balance
sheet at their current fair value. Estimated fair values for interest rate swaps
rely on prevailing market interest rates. These fair value amounts should not be
viewed in isolation, but rather in relation to the values of the underlying
hedging transactions and investments and to the overall reduction in exposure to
adverse fluctuations in interest rates. Each interest rate swap agreement is
designated with all or a portion of the principal balance and term of a specific
debt obligation. The interest rate swaps involve the periodic exchange of
payments over the life of the related agreements. Amounts received or paid on
the interest rate swaps are recorded on an accrual basis as an adjustment to the
related interest expense of the outstanding debt based on the accrual method of
accounting. The related amounts payable to and receivable from counterparties
are included in other liabilities and other assets, respectively.
The following table presents the fair values of the Company's derivative
instruments outstanding as of March 31, 2001 (dollars in thousands):
11
UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001
(UNAUDITED)
Notional Fixed Type of Underlying Effective Contract Fair
Amount Rate Contract Debt Date Maturity Value
-------------------------------------------------------------------------------------------------------------
$ 5,000 7.32% Swap Bank Credit Facility 06/26/95 07/01/04 $ (210)
10,000 7.14% Swap Bank Credit Facility 10/18/95 10/03/02 (219)
5,000 6.98% Swap Bank Credit Facility 11/21/95 10/03/02 (96)
10,000 7.65% Swap Medium-Term Notes 01/26/99 01/27/03 (116)
7,000 6.78% Swap FNMA 06/30/99 06/30/04 (227)
10,000 7.22% Swap FNMA 12/01/99 04/01/04 (439)
25,000 7.39% Swap Bank Credit Facility 11/01/00 08/01/03 (932)
25,000 7.39% Swap Bank Credit Facility 11/01/00 08/01/03 (932)
25,000 7.49% Swap Bank Term Loan 11/15/00 05/15/03 (897)
20,000 7.49% Swap Bank Term Loan 11/15/00 05/15/03 (718)
23,500 7.62% Swap Bank Term Loan 11/15/00 05/15/04 (1,114)
23,000 7.62% Swap Bank Term Loan 11/15/00 05/15/04 (1,108)
25,000 7.21% Swap Bank Credit Facility 12/01/00 08/01/03 (828)
8,500 7.26% Swap Bank Term Loan 12/04/00 05/15/03 (265)
25,000 7.21% Swap Bank Credit Facility 12/04/00 08/01/03 (828)
35,000 5.98% Swap Bank Credit Facility 03/13/01 04/01/03 (213)
-----------------------------------------------------------------------------------------------------------
$ 282,000 $ (9,142)
===========================================================================================================
During the quarter ended March 31, 2001, United Dominion recognized $(3.8)
million of a cumulative effect of a change in accounting principle and $5.2
million of unrealized losses in accumulated other comprehensive loss related to
the Company's hedging instruments. In addition, United Dominion recognized
$(28.0) thousand in net income related to the ineffective portion of the
Company's hedging instruments.
As of March 31, 2001, United Dominion expects to reclassify $3.7 million of net
losses on derivative instruments from accumulated other comprehensive income to
earnings (interest expense) during the next twelve months in order to
artificially fix the interest rate on the related hedged transactions.
12
8. Earnings (Loss) Per Share
Basic earnings (loss) per common share is computed based upon the weighted
average number of common shares outstanding during the period. Diluted earnings
(loss) per common share is computed based on common shares outstanding plus the
effect of dilutive stock options and other potentially dilutive common stock
equivalents. The dilutive effect of stock options and other potential common
stock equivalents is determined using the treasury stock method based on United
Dominion's average stock price. The early extinguishment of debt does not have
an effect on the earnings per share calculation for the periods presented. The
following table sets forth the computation of basic and diluted earnings (loss)
per share (dollars in thousands, except per share data):
Three months ended
March 31,
2001 2000
-----------------------------
Numerator for basic and diluted earnings per share-
net income (loss) available to common shareholders $(3,308) $ 9,172
Denominator:
Beginning denominator for basic earnings per share-
weighted average common shares outstanding 101,529 103,019
Non-vested restricted stock (183) -
----------- -----------
Denominator for basic earnings per share 101,346 103,019
Effect of dilutive securities:
Employee stock options - 26
----------- -----------
Denominator for diluted earnings per share 101,346 103,045
=========== ===========
Basic earnings (loss) per share: $ (0.03) $ 0.09
=========== ===========
Diluted earnings (loss) per share $ (0.03) $ 0.09
=========== ===========
The effect of the conversion of the operating partnership units and convertible
preferred stock is not dilutive and is therefore not included in the above
calculations. If the operating partnership units were converted to common stock,
the additional shares of common stock outstanding for the three months ended
March 31, 2001 and 2000 would be 7,425,760 and 7,503,570, respectively. If the
convertible preferred stock was converted to common stock, the additional shares
of common stock outstanding for the three months ended March 31, 2001 and 2000
would be 12,307,692 common shares.
The effect of employee stock options for the three months ended March 31, 2001,
was not included since its effect would be dilutive due to the net loss to
common shareholders incurred during the period.
13
UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001
(UNAUDITED)
9. Restructuring Charges
During the first quarter of 2001, United Dominion announced the appointment of a
new chief executive officer and senior management structure. The new management
team began a comprehensive review of the organizational structure of the Company
and its operations. As a result of this review, the Company recorded a charge of
$5.4 million related to workforce reductions and other miscellaneous costs.
These charges are included in the Consolidated Statements of Operations within
the line item "Severance costs and other organizational charges." All charges
came under consideration subsequent to the appointment of the Company's new CEO
in February 2001 and were approved by management and the Board of Directors in
March 2001.
The planned workforce reductions resulted in a charge of $4.5 million and in the
planned termination of approximately 200 full time equivalent positions, or 10%
of total staffing in corporate functions, including senior management and
general and administrative functions, and in apartment operations. Employee
termination benefits include severance packages and related benefits and
outplacement services for employees terminated. As of March 31, 2001,
approximately 220 employees have been terminated. The Company expects that
substantially all of the unpaid charge as of March 31, 2001 will be paid during
the third quarter of 2001.
A reconciliation of the unpaid severance costs for the three months ended March
31, 2001, is presented below:
(in millions)
----------------------------------------------------------
Balance, beginning of period $ -
Accrued severance costs 4.5
Cash payments (0.9)
----------------------------------------------------------
Balance, end of period $ 3.6
----------------------------------------------------------
In connection with senior management's review of the Company during the first
quarter, United Dominion also recognized $0.4 million related to relocation
costs associated with the new executive offices in Denver and $0.5 million in
other miscellaneous costs.
10. Subsequent Events
In April 2001, United Dominion sold six Florida communities with 1,638 apartment
homes for an aggregate sales price of approximately $113.0 million and
recognized gains for financial reporting purposes of $21.5 million. Proceeds
from the sale were applied primarily to reductions in long-term debt, and to a
lesser extent, to complete 1031 exchanges in order to defer taxable gains and to
repurchase common and preferred shares.
In May 2001, the shareholders of United Dominion approved the Out-Performance
Program (the "Program) pursuant to which officers and other key employees of the
Company will be given the opportunity to invest in the Company by purchasing
performance shares ("Out-Performance Partnership Shares" or "OPPSs") of the
Operating Partnership for an initial investment of $1.27 million. To begin the
Program, the Company's performance will be measured over a twenty-eight month
period beginning with the month of Thomas W. Toomey's employment (February
2001). The Program is designed to provide participants with the possibility of
substantial returns on their investment if the Company's total return, defined
as dividend income plus share price appreciation, on its common stock during the
measurement period exceeds the industry average and is the equivalent of at
least a 30% total return or 12% annualized (the "minimum return"). At the
conclusion of the measurement period, if United Dominion's total return
satisfies these criteria, the holders of the OPPSs will receive distributions
and allocations of income and loss from the Operating Partnership equal to the
distributions and allocations that would be received on the number of interests
in the Operating Partnership ("OP Units") obtained by: (i) determining the
amount by which the cumulative total return of the Company's common stock over
the measurement period exceeds the greater of the cumulative total return of the
peer group index (the Morgan Stanley REIT Index) or the minimum return (such
being the "excess return"); (ii) multiplying 4% of the excess return by the
Company's market capitalization (defined as the average number of shares
outstanding over the 28 month period multiplied by the daily closing price of
the Company's common stock); and (iii) dividing the number obtained in (ii) by
the market value of one share of the Company common stock on the valuation date,
as the weighted average price per day of the common stock for the 20 trading
days immediately preceding the valuation date. If, on the valuation date, the
cumulative total return of United Dominion's common stock does not meet the
minimum return or the total return of the peer group and there is no excess
return, then the holders of the OPPSs will forfeit their entire initial
investment of $1.27 million.
14
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- - -------------------------------------------------------------------------------
OF OPERATIONS
-------------
Forward-Looking Statements
The following information should be read in conjunction with the United Dominion
Realty Trust, Inc. ("United Dominion") 2000 Form 10-K as well as the financial
statements and notes included in Item 1 of this report. This quarterly report
contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1993, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Such forward-looking statements include, without
limitation, statements concerning property acquisitions and dispositions,
development activity and capital expenditures, capital raising activities, rent
growth, occupancy and rental expense growth. Words such as "expects",
"anticipates", "intends", "plans", "believes", "seeks", "estimates" and
variations of such words and similar expressions are intended to identify such
forward-looking statements. Such statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievement of United Dominion to be materially different from the results of
operations or plans expressed or implied by such forward-looking statements.
Such factors include, among other things, unanticipated adverse business
developments affecting United Dominion, or its properties, adverse changes in
the real estate markets and general and local economies and business conditions.
Although United Dominion believes that the assumptions underlying the forward-
looking statements contained herein are reasonable, any of the assumptions could
be inaccurate, and therefore there can be no assurance that such statements
included in this report will prove to be accurate. In light of the significant
uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by
United Dominion or any other person that the results or conditions described in
such statements or the objectives and plans of United Dominion will be achieved.
Overview
United Dominion is a real estate investment trust (REIT) with activities related
to the ownership, development, acquisition, renovation, management, marketing
and strategic disposition of multifamily apartment communities nationwide. Over
the past four years, United Dominion has diversified into new markets to create
a national platform, upgraded the quality of the portfolio and invested in
infrastructure and technology. The Company continues to review its strategy
with a goal of enhancing long-term earnings growth on a sustained basis. At
March 31, 2001, United Dominion owned 276 communities with 77,192 apartment
homes nationwide.
15
The following table summarizes United Dominion's apartment market information by
major geographic markets (including real estate held for disposition and real
estate under development):
As of March 31, 2001 March 31, 2001
---------------------------------------------------------- --------------------------------
Number of Total Percentage of Carrying Quarter Ended Quarter Ended
Apartment Apartment Carrying Value Physical Avg Monthly
Communities Homes Value (in thousands) Occupancy Rental Rates
---------------------------------------------------------- --------------------------------
Houston, TX 22 5,722 5.9% $ 223,151 93.3% $ 605
Dallas, TX 14 4,533 5.6% 213,079 95.5% 670
Phoenix, AZ 11 3,618 5.5% 209,562 94.1% 699
Orlando, FL 14 4,140 5.2% 199,360 92.6% 697
San Antonio, TX 12 3,827 5.0% 188,050 93.2% 648
Raleigh, NC 9 2,951 4.1% 156,126 89.6% 717
Tampa, FL 10 3,372 4.0% 151,952 94.6% 684
Fort Worth, TX 11 3,561 3.8% 145,399 97.0% 625
San Francisco, CA 4 980 3.7% 139,622 99.1% 1,761
Charlotte, NC 10 2,710 3.5% 134,009 91.0% 676
Columbus, OH 5 2,175 3.2% 122,442 92.2% 663
Nashville, TN 8 2,220 3.1% 118,178 92.2% 685
South Florida 6 1,638 2.7% 103,509 95.7% 863
Greensboro, NC 8 2,123 2.7% 102,755 92.0% 635
Monterey Peninsula, CA 9 1,706 2.5% 96,762 96.1% 824
Memphis, TN 6 1,956 2.5% 95,954 92.1% 631
Richmond, VA 8 2,372 2.5% 94,753 96.1% 698
Southern California 5 1,414 2.4% 89,983 96.0% 869
Wilmington, NC 6 1,869 2.3% 88,284 88.1% 655
Atlanta, GA 6 1,426 1.8% 70,184 93.9% 734
Baltimore, MD 6 1,291 1.7% 66,473 97.8% 791
Columbia, SC 6 1,584 1.6% 61,589 94.4% 582
Seattle, WA 3 628 0.9% 33,668 96.3% 721
Other Northern Markets 38 8,383 9.7% 369,573 94.7% 667
Other Western Markets 23 6,233 8.2% 310,494 95.7% 650
Other Southern Markets 16 4,760 5.9% 221,764 91.9% 640
--------------------------------------------------------------------------------------------
Total Apartments 276 77,192 100.0% $3,806,675 93.9% $ 690
============================================================================================
16
Liquidity and Capital Resources
United Dominion's primary source of liquidity is its cash flow from operations
as determined by rental rates, occupancy levels and operating expenses related
to its portfolio of apartment homes. United Dominion routinely uses its
unsecured bank credit facility to temporarily fund certain investing and
financing activities prior to arranging for longer-term financing. During the
past several years, proceeds from the sales of real estate have been used for
both investing and financing activities.
United Dominion regularly reviews its short and long-term liquidity requirements
and considers the adequacy of its cash flow from operations as well as other
liquidity sources to meet these requirements. United Dominion believes that it
can fund its short-term liquidity needs such as normal recurring operating
expenses, debt service payments, recurring capital expenditures and
distributions to common and preferred shareholders through cash provided by
operating activities and borrowings from the Company's unsecured bank credit
facility, as needed (see discussion that follows under "Financing Activities").
To facilitate future financing activities in the public capital markets,
management believes that it is prudent to maintain shelf registration statement
capacity. In this regard, United Dominion filed a shelf registration statement
in December 1999 providing for the issuance of up to $700 million in common
shares, preferred shares and debt securities. In March 2000, United Dominion
utilized this shelf registration statement to sell $100 million of senior
unsecured notes due March 2003 at an interest rate of 8.625%. As of March 31,
2001, $600 million of equity and debt securities remain available for use under
the shelf registration.
Future Capital Needs
Future development expenditures are expected to be funded primarily through
joint ventures or with proceeds from the sale of property, and to a lesser
extent, cash flows provided by operating activities. Acquisition activity is
expected to be limited to the reinvestment of proceeds from the sale of property
in order to defer large tax gains and reinvested in targeted markets and sub-
markets.
During 2001, United Dominion has approximately $63 million of maturing debt
which the Company anticipates repaying using proceeds from the sale of apartment
communities, mortgage refinancing activity or borrowings under the Company's
unsecured credit facility.
The following discussion explains the changes in net cash provided by operating
activities and net cash used in investing and financing activities which are
presented in United Dominion's Consolidated Statements of Cash Flows.
Operating Activities
For the quarter ended March 31, 2001, United Dominion's cash flow from operating
activities of $50.5 million was relatively flat compared to $48.9 million for
the same period last year. The moderate increase of $1.6 million in the cash
flow from operating activities resulted primarily from a change in the level of
operating assets as a result of collections on escrow accounts and joint venture
receivables. This increase was offset by a decrease in the level of operating
liabilities as a result of the payment of real estate taxes.
Investing Activities
For the quarter ended March 31, 2001, net cash used in investing activities was
$30.8 million compared to net cash used in investing activities of $14.6 million
for 2000. Changes in the level of investing activities from period to period
reflects United Dominion's strategy as it relates to its acquisition, capital
expenditure, development and disposition programs, as well as the impact of the
capital market environment on these activities.
Real Estate under Development
Development activity is focused in core markets that have strong operations
managers in place. For the quarter ended March 31, 2001, United Dominion
invested approximately $11.7 million on real estate projects, down $8.0 million
from its 2000 level of $19.7 million.
17
The following projects were under development at March 31, 2001:
Cost to Budgeted Expected
No. of Apt. Completed Date Cost Est. Cost Completion
Homes Apt. Homes (In thousands) (In thousands) Per Home Date
----------- ------------ -------------- -------------- ---------- ------------
New Communities:
- - ---------------
Dominion Place at Kildaire Farm 332 -- $15,000 $25,700 $77,400 1Q02
Raleigh, NC
Red Stone Ranch 324 66 14,000 21,700 67,000 4Q01
Austin, TX
----------- ------------ ------------ ------------ ----------
Subtotal 656 66 29,000 47,400 72,300
----------- ------------ ------------ ------------ ----------
Additional Phases:
- - -----------------
Greensview II 192 -- 5,900 16,700 87,000 4Q01
Denver, CO
Manor at England Run III 120 -- 2,900 8,800 73,300 4Q01
Fredericksburg, VA
The Meridian II 270 -- 3,100 17,400 64,400 1Q02
Dallas, TX
----------- ------------ ------------ ------------ ----------
Subtotal 582 -- 11,900 42,900 73,700
----------- ------------ ------------ ------------ ----------
Total 1,238 66 $40,900 $90,300 $72,900
=========== ============ ============ ============ ==========
The new senior management team performed a comprehensive review of the
Company's undeveloped land parcels during the first quarter of 2001. As a
result of this review, the Company plans to curtail its development activity in
suburban, low barrier to entry sub-markets and plans to sell off suburban
development sites which at March 31, 2001, had a carrying value of $10.9
million.
Development Joint Venture
On June 21, 2000, United Dominion completed the formation of a joint venture
that will invest approximately $103 million to develop five apartment
communities with a total of 1,438 apartment homes. United Dominion owns a 25%
interest in the joint venture and is serving as the managing partner of the
joint venture as well as the developer, general contractor and property manager.
Upon closing of the venture, United Dominion contributed the projects in return
for its equity interest of approximately $8 million in the venture and was
reimbursed for approximately $35 million of development outlays that were
incurred prior to closing the joint venture.
During the first quarter of 2001, United Dominion completed the development of
three joint venture communities with a total of 880 apartment homes at a total
investment that was below budgeted costs. The Meridian, a 250 home community
located in Dallas, Texas was completed in June 2000. Furthermore, United
Dominion recognized fee income of approximately $0.4 million for general
contracting and developer services provided by the Company to the joint venture.
The Company has the option, but not the obligation, to purchase these properties
for fair value upon completion of the projects.
The following joint venture projects were complete as of March 31, 2001:
Development
No. of Cost Cost Per Date
Apt. Homes (In thousands) Home Completed % Leased
------------ -------------- ------------ ------------ ------------
New Communities:
- - ---------------
Parke 33 264 $17,100 $64,800 2/01 70.1%
Lakeland, FL
Sierra Canyon 236 15,400 65,300 3/01 70.3%
Phoenix, AZ
Oaks at Weston 380 28,000 73,700 3/01 53.4%
Raleigh, NC
------------ ------------- ------------
Total 880 $60,500 $68,800
============ ============= ============
18
The following joint venture project was under development at March 31, 2001:
Cost to Budgeted Expected
No. of Apt. Completed Date Cost Est. Cost Completion
Homes Apt. Homes (In thousands) (In thousands) Per Home Date
----------- ------------- -------------- -------------- ------------ ------------
New Community:
- - -------------
Mandolin 308 132 $17,800 $22,100 $71,800 3Q01
Dallas, TX
Disposition of Investments
For the quarter ended March 31, 2001, United Dominion sold three communities
with 251 apartment homes for an aggregate sales price of approximately $15.5
million and recognized gains for financial reporting purposes of $4.1 million.
Within each market, United Dominion plans to dispose of selected communities
with inferior locations, significant capital expense requirements without the
potential of a corresponding increase in rent or insufficient growth potential.
Proceeds from the 2001 sales, expected to be at levels below that of 2000, are
expected to be used to reduce debt, repurchase common and preferred shares, fund
development activity and acquire communities.
Subsequent to March 31, 2001, United Dominion sold six Florida communities with
1,638 apartment homes for an aggregate sales price of approximately $113.0
million and recognized gains for financial reporting purposes of $21.5 million.
Proceeds from the sale were applied primarily to reductions in long-term debt,
and to a lesser extent, to complete 1031 exchanges in order to defer taxable
gains and to repurchase common and preferred shares.
Acquisitions
During the quarter ended March 31, 2001, United Dominion acquired one community
with 158 apartment homes at a total cost (including closing costs) of $9.3
million which included the use of tax free exchange funds. As of March 31,
2001, United Dominion had approximately $7.2 million in reverse 1031 exchange
funds for the purchase of a property in Columbus, OH. The purchase closed in
April 2001.
During 2001, the new senior management team currently plans to channel new
investments to those markets that are projected to provide the best investment
returns for the Company over the next ten years. These transactions will likely
occur over time and will only be undertaken on an accretive basis. Markets will
be targeted based upon refined criteria including past performance, expected job
growth, current and anticipated housing supply and demand, ability to attract
and support household formation and local market expertise.
Capital Expenditures
United Dominion capitalizes those expenditures related to acquiring new assets,
materially enhancing the value of an existing asset, or substantially extending
the useful life of an existing asset. Expenditures necessary to maintain an
existing property in ordinary operating condition are expensed as incurred.
During the quarter ended March 31, 2001, $7.2 million or $96 per home was spent
on capital expenditures for United Dominion's same communities (those acquired
or developed prior to January 1, 2000). These capital improvements included
recurring capital expenditures, including floor coverings, HVAC equipment,
roofs, appliances, landscaping, siding, parking lots and other non-revenue
enhancing capital expenditures, which aggregated $4.5 million or $60 per home.
In addition, non-recurring revenue enhancing capital expenditures, including
water sub-metering, gating and access systems, the addition of microwaves,
washer-dryers, interior upgrades and new business and fitness centers totaled
$2.7 million or $36 per home for the quarter ended March 31, 2001. United
Dominion will continue to selectively add revenue-enhancing improvements that
the Company believes will provide a return on investment in excess of United
Dominion's cost of capital. Capital expenditures during 2001 are currently
expected to be at levels somewhat higher than those experienced in 2000.
Financing Activities
Net cash used in financing activities during the first quarter of 2001 was $22.5
million compared to $36.0 million for 2000, a decrease of $13.5 million. As part
of the plan to improve the Company's balance sheet position, United Dominion
used proceeds from its disposition program to pay down secured and unsecured
debt, to repurchase shares of common and preferred stock and to complete 1031
exchanges in order to defer taxable gains.
19
As of March 31, 2001, approximately $16.6 million of United Dominion's preferred
shares have been repurchased under the $25 million preferred share repurchase
program. For the quarter ended March 31, 2001, United Dominion repurchased
14,200 Series A preferred shares at an average price of $23.46 per share and
7,000 Series B preferred shares at an average price of $21.75 per share.
For the quarter ended March 31, 2001, the Company repurchased 831,384 common
shares at an average price of $11.10 and repurchased 19,941 operating
partnership units. As of March 31, 2001, approximately 6.2 million common
shares remained available for purchase under the common share repurchase
program. Repurchases of shares will be made from time to time in the open
market or in privately negotiated transactions. The timing, volume and purchase
price will be at the discretion of the Company.
During the quarter, the Company repaid $17.0 million of unsecured debt and was
relieved of $7.7 million of secured debt in connection with the disposition of
properties.
Credit Facilities
United Dominion has a $375 million three-year unsecured revolving credit
facility (the "Credit Facility") which extends until August 2003. At March 31,
2001, $312.7 million was outstanding under the Credit Facility leaving $62.3
million available for use.
Under the Credit Facility, the Company may borrow at a rate of LIBOR plus 100
basis points for LIBOR-based borrowings. Under the Credit Facility, the Company
pays a facility fee, which is equal to 0.20% of the commitment. The Credit
Facility is subject to customary financial covenants and limitations.
Information concerning short-term bank borrowings is summarized in the table
that follows (dollars in thousands):
Three months ended Year ended
March 31, 2001 December 31, 2000
- - ----------------------------------------------------------------------------------------------------------
Total revolving credit facilities $375,000 $375,000
Borrowings outstanding at end of period 312,700 244,400
Weighted average daily borrowings during the period 272,159 195,128
Maximum daily borrowings during the period 315,200 308,000
Weighted average daily interest rate during the period 6.84% 7.3%
Weighted average daily interest rate at end of period 6.08% 7.7%
Derivative Instruments
As part of United Dominion's overall interest rate risk management strategy, the
Company uses derivatives as a means to modify the interest rate characteristics
of variable rate debt obligations or to hedge anticipated financing
transactions. The Company's derivative transactions used for interest rate risk
management include various interest rate swaps with indices that relate to the
pricing of specific financial instruments of United Dominion. The Company
believes that it has appropriately controlled the risk so that derivatives used
for interest rate risk management will not have any material unintended effect
on consolidated earnings. Derivative contracts did not have a material impact
on the results of operations during the first quarter of 2001 (see Note 7 -
Derivative Instruments and Hedging Activities).
Funds from Operations
Funds from operations ("FFO") is defined as net income (computed in accordance
with generally accepted accounting principles), excluding gains (losses) from
sales of depreciable property, plus real estate depreciation and amortization,
and after adjustments for unconsolidated partnerships and joint ventures.
United Dominion computes FFO for all periods presented in accordance with the
recommendations set forth by the National Association of Real Estate Investment
Trust's October 1, 1999 White Paper. United Dominion considers FFO in evaluating
property acquisitions and its operating performance, and believes
20
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 operating performance
and liquidity. FFO does not represent cash generated from operating activities
in accordance with generally accepted accounting principles and is not
necessarily indicative of cash available to fund cash needs.
The following table outlines United Dominion's FFO calculation for the three
months ended March 31, (dollars in thousands, except per share amounts):
2001 2000
-------- --------
Net income $ 5,732 $ 18,580
Adjustments:
Distributions to preferred shareholders (9,063) (9,408)
Real estate depreciation, net of outside partners' interest 39,932 33,569
Gains on sale of depreciable property, net of outside partners' interest (3,331) (2,529)
Minority interests of unitholders in operating partnership (244) 668
Real estate depreciation related to unconsolidated entities 184 46
Extraordinary item-early extinguishment of debt 187 228
-------- --------
Funds from operations-basic $ 33,397 $ 41,154
======== ========
Adjustment:
Distribution to preferred shareholders-Series D (Convertible) 3,857 3,825
-------- --------
Funds from operations-diluted $ 37,254 $ 44,979
======== ========
Weighted average number of common shares and OP Units outstanding-basic 108,954 110,523
Weighted average number of common shares and OP Units outstanding-diluted 121,571 122,857
FFO per common share-basic $ 0.31 $ 0.37
======== ========
FFO per common share-diluted $ 0.31 $ 0.37
======== ========
Results of Operations
Net Income (Loss) Available to Common Shareholders
Net income (loss) available to common shareholders was $(3.3) million ($(.03)
per share) for the quarter ended March 31, 2001 compared to $9.2 million ($.09
per share) for 2000, representing a decrease of $12.5 million ($.12 per share).
The decrease was primarily due to $8.5 million in non-recurring charges
recognized in the first quarter of 2001 related primarily to workforce
reductions and severance costs, the writedown of seven undeveloped land sites
and the Company's investment in an online apartment leasing company and
relocation costs for the new executive offices. During the first quarter, United
Dominion recognized approximately $6.5 million more of depreciation expense
during the first three months of 2001 versus the comparable period in the prior
year primarily on communities transferred during the second quarter of 2000 from
real estate held for disposition to real estate held for investment as well as
depreciation on capitalized expenditures made during the prior twelve months.
The increase in expenses was partially offset by higher gains on the sales of
depreciable property of $1.6 million and a decrease of $1.9 million in financing
costs.
21
Apartment Community Operations
United Dominion's net income is primarily generated from the operations of its
apartment communities. The following table summarizes the operating performance
for United Dominion's total apartment portfolio for each of the periods
presented (dollars in thousands):
Three Months Ended
March 31,
-----------------------------------------
2001 2000 % Change
-----------------------------------------
Property rental income $152,410 $153,657 -0.8%
Property rental expenses (excluding
depreciation and amortization) (59,644) (59,819) -0.1%
-----------------------------------------
Property operating income $ 92,766 $ 93,838 -1.1%
=========================================
Weighted average number of apartment homes 77,011 82,067 -6.6%
Physical occupancy 93.9% 93.7% 0.2%
The decrease in property operating income and property operating expenses by the
Company's apartment community operations is due to the disposition of 5,359
apartment homes during 2000 and 2001. As a result of United Dominion's
disposition program, the weighted average number of apartment homes declined
6.6% from March 31, 2000 to March 31, 2001.
Same Communities
United Dominion's same communities (those communities acquired, developed or
stabilized prior to January 1, 2000 and held on January 1, 2001 which consisted
of 74,987 weighted average apartment homes) provided 97% of its property
operating income for the quarter ended March 31, 2001.
For the first quarter of 2001, property operating income for the same
communities increased 2.9% or $2.5 million compared to the same period in 2000.
The growth in property operating income resulted from a $5.9 million or 4.2%
increase in property rental income over the same period in the prior year. The
increase was driven by a $5.4 million or 3.6% increase in rental rates coupled
with a 1.4% increase in physical occupancy. The increase in property operating
income was partially offset by higher concessions and an increase in bad debt
expense. During this same period, property operating expenses at these same
communities increased $3.4 million or 6.3%. The increase in property operating
expenses was primarily due to a $1.4 million increase in gas costs (net of
reimbursement by residents) caused by the run-up in prices of natural gas
experienced during the quarter and a $0.8 million increase in property insurance
costs due to a combination of the Company's loss history plus overall increases
in market rates. The remaining increase in property operating expense was
attributable to a $0.7 million increase in personnel costs due to higher
salaries and benefit costs and a $0.6 million increase in repair and maintenance
expense.
As a result of the percentage changes in total property operating income and
total property operating expenses, the operating margin (property operating
income divided by property rental income) decreased 0.4% to 61.2%.
Non-Mature Communities
The remaining 3% of United Dominion's property operating income during the first
quarter of 2001 was generated from its non-mature communities (those communities
acquired or developed during 2000 and 2001). United Dominion's development
communities which included 1,058 apartment homes constructed since January 1,
2000 provided an additional $1.1 million of property operating income for the
quarter ended March 31, 2001. In addition, the two communities with 425
apartment homes acquired by United Dominion during 2000 and 2001 provided an
additional $0.5 million of property operating income for the first three months
of 2001.
22
Real Estate Depreciation
Real estate depreciation increased $6.5 million or 19.2% for the three months
ended March 31, 2001, over the same period last year. This increase is
primarily attributable to the recognition of depreciation expense on communities
classified as real estate held for disposition in the first quarter of 2000 that
were subsequently transferred to real estate held for investment during the
second quarter of 2000 and, to a lesser extent, depreciation taken on fully
developed properties since the first quarter of 2000 as well as depreciation
on capitalized expenditures made during the previous twelve months.
Interest Expense
During the first quarter of 2001, interest expense decreased $1.9 million over
the corresponding amount in 2000 as the weighted average amount of debt
outstanding decreased $112 million ($2.0 billion in 2001 versus $2.1 billion in
2000) and the weighted average interest rate remained constant at 7.5%. The
weighted average amount of debt employed during 2001 was lower as disposition
proceeds were used to repay outstanding debt. Average interest rates on short-
term bank borrowings for the first three months of 2001 were comparable to the
same period in the prior year. For the three months ended March 31, 2001 and
2000, total interest capitalized was $0.8 million and $1.0 million,
respectively.
Restructuring Charges
During the quarter ended March 31, 2001, United Dominion undertook a
comprehensive review of the organizational structure of the Company and its
operations subsequent to the appointment of a new senior management team and
CEO. As a result, the Company recorded $4.5 million of expense related to the
termination of approximately 10% of United Dominion's workforce, or 200
full-time equivalent positions, in operations and at the Corporate headquarters.
Management anticipates that the reduction in workforce will result in an
annualized savings of approximately $3.0 to $3.5 million through ongoing cost
efficiencies. These reductions will impact both personnel and general and
administrative expenses. As of March 31, 2001, approximately $0.9 million of the
accrued charge has been paid with the remainder to be paid during the third
quarter of 2001. In addition, United Dominion recognized expense in the
aggregate of $0.9 million related to relocation costs associated with the new
executive offices in Denver and other miscellaneous costs. No adjustments to the
existing reserve are contemplated at this time. All charges came under
consideration subsequent to the appointment of the Company's new CEO in February
2001 and were approved by management and the Board of Directors in March 2001.
Impairment Loss on Real Estate and Investments
In connection with the evaluation of the Company's real estate assets and
operations, senior management determined that it was in the Company's best
interest to dispose of all undeveloped tracts of land at an accelerated pace and
redeploy the proceeds elsewhere. This represented a change from prior management
in the holding period of these assets and their respective values. Prior
management had purchased these tracts of land in 1999 and 2000 with the intent
to build apartment communities on them. In order to accelerate the disposition
of these undeveloped land sites, the Company recorded an aggregate $2.8 million
impairment loss for the write down of seven undeveloped sites in selected
markets. The $2.8 million charge represents the discount necessary to dispose of
these assets in a short time frame coupled with decreases in market value in
2001 for these properties. In addition, the Company recognized a $0.3 million
charge for the write down of United Dominion's investment in an online apartment
leasing company.
General and Administrative
For the quarter ended March 31, 2001, general and administrative expenses
increased $0.6 million or 16.4% over 2000. The increase was primarily due to a
$0.7 million increase in salaries and bonus expense as the Company continues to
invest in professional staffing as well as a $0.3 million increase in consulting
expense related to the CEO search. These increases were offset by a $.2 million
decrease in both self-insurance costs and legal fees.
Gains on Sales of Investments
For the three months ended March 31, 2001, United Dominion recognized gains for
financial reporting purposes of $4.1 million compared to $2.5 million for the
comparable period last year. Changes in the level of gains recognized from
period to period reflect the changing level of United Dominion's divestiture
activity from period to period as well as the extent of gains related to
specific properties sold.
Distributions to Preferred Shareholders
Distributions to preferred shareholders totaled $9.1 million for the quarter
ended March 31, 2001 compared to $9.4 million for 2000. The decrease was due
to the repurchase of over 725,000 Series A and Series B preferred shares during
2000 and 2001.
Discount on Preferred Share Repurchases
For the quarter ended March 31, 2001, United Dominion recognized $23 thousand of
discount on preferred share repurchases. The discount on preferred share
repurchases represents the difference between the carrying value and the
purchase price of the preferred shares.
23
Contingencies
During the third quarter of 2000, the Company agreed to settle a class action
lawsuit concerning water usage billing in Texas in the amount of $2.7 million.
As a result of the settlement, the Company accrued $2.7 million in 2000 for the
settlement amount and estimated fees. The settlement received final court
approval during the first quarter of 2001 and United Dominion will make payment
in the near-term. Individuals in the class action may opt out of the
settlement, and in the event that more than 125 persons opt out, United Dominion
may elect to withdraw the settlement agreement.
Inflation
United Dominion believes that the direct effects of inflation on the Company's
operations have been inconsequential. Substantially all of the Company's leases
are for a term of one year or less which generally minimizes United Dominion's
risk from the adverse effects of inflation.
24
Item 3. Quantitative and Qualitative Disclosure of Market Risk
United Dominion is exposed to interest rate changes associated with the
Company's unsecured credit facility and other variable rate debt as well as
refinancing risk on the Company's fixed rate debt. United Dominion's involvement
with derivative financial instruments is limited and the Company does not expect
to use them for trading or other speculative purposes. United Dominion
occasionally uses derivative instruments to manage the Company's exposure to
interest rates.
See United Dominion's Form 10-K for the year ended December 31, 2000 "Item 7A
Qualitative and Quantitative Disclosures About Market Risk" for a more complete
discussion of our interest rate sensitive assets and liabilities. As of March
31, 2001, United Dominion's market risk has not changed materially from the
amounts reported on the Form 10-K for the year ended December 31, 2000.
25
PART II
Item 1. LEGAL PROCEEDINGS
- - ---------------------------
United Dominion and its subsidiaries are engaged in various litigations
and have a number of unresolved claims pending. The ultimate liability in
respect of such litigations and claims cannot be determined at this time. United
Dominion is of the opinion that such liability, to the extent not provided for
through insurance or otherwise, is not likely to be material in relation to the
consolidated financial statements of United Dominion. During the first quarter
of 2001, United Dominion received final court approval to settle a class action
lawsuit concerning water usage billing in Texas for $2.7 million.
Item 2. CHANGES IN SECURITIES
- - -------------------------------
None
Item 3. DEFAULT UPON SENIOR SECURITIES
- - ----------------------------------------
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- - -------------------------------------------------------------
None
Item 5. OTHER INFORMATION
- - ---------------------------
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
- - ------------------------------------------
(a) The exhibits listed on the accompanying index to exhibits are filed as
part of this quarterly report.
(b) Reports on Form 8-K
A Form 8-K was filed with the Securities and Exchange Commission on
February 16, 2001. The filing announced Thomas W. Toomey as the new
President and CEO of United Dominion as reported on its Press Release
issued on February 13, 2001.
A Form 8-K was filed with the Securities and Exchange Commission on
February 28, 2001. The filing included information that United Dominion
will present to current and prospective stockholders and other persons
and institutions as first presented on February 27, 2001.
A Form 8-K was filed with the Securities and Exchange Commission on
March 9, 2001. The filing reported United Dominion's 2000 fourth quarter
and year to date results of operations as reported on its Press Release
issued on February 1, 2001.
A Form 8-K was filed with the Securities and Exchange Commission on
March 28, 2001. The filing reported United Dominion's election of a new
chairman of the board, the appointment of four new senior executives,
the opening of a new executive office in Denver, Colorado and a one time
charge related to workforce reduction as reported on its Press Release
issued on March 27, 2001.
A Form 8-K was filed with the Securities and Exchange Commission on May
4, 2001. The filing reported United Dominion's 2001 first quarter
results of operations as reported on its Press Release issued on April
26
30, 2001.
EXHIBIT INDEX
Item 6(a)
The exhibits listed below are filed as part of this Quarterly Report.
References under the caption Location to exhibits, forms, or other filings
indicate that the form or other filing has been filed, that the indexed exhibit
and the exhibit referred to are the same and that the exhibit referred to is
incorporated by reference.
Exhibit Description Location
- - ------- ------------------------------------ -------------------------------------------------
2(a) Agreement and Plan of Merger dated Exhibit 2(a) to the Company's Form S-4 Registration
as of December 19, 1997, between Statement (Registration No. 333-45305) filed with
the Company, ASR Investment the Commission on January 30, 1998.
Corporation and ASR Acquisition Sub,
Inc.
2(b) Agreement of Plan of Merger dated as Exhibit 2(c) to the Company's Form S-3 Registration
of September 10, 1998, between the Statement (Registration No. 333-64281) filed with
Company and American Apartment the Commission on September 25, 1998.
Communities II, Inc. including as
exhibits thereto the proposed terms
of the Series D Preferred Stock and
the proposed form of Investment
Agreement between the Company, United
Dominion Realty, L.P., American
Apartment Communities II, Inc.,
American Apartment Communities
Operating Partnership, L.P.,
Schnitzer Investment Corp., AAC
Management LLC and LF Strategic
Realty Investors, L.P.
2(c) Partnership Interest Purchase and Exchange Exhibit 2(d) to the Company's Form S-3 Registration
Agreement dated as of September 10, 1998, Statement (Registration No. 333-64281) filed with
between the Company, United Dominion the Commission on September 25, 1998.
Realty, L.P., American Apartment
Communities Operating Partnership, L.P.,
AAC Management LLC, Schnitzer Investment
Corp., Fox Point Ltd. and James D.
Klingbeil including as an exhibit thereto
the proposed form of the Third Amended
and Restated Limited Partnership
Agreement of United Dominion Realty, L.P.
3(a) Restated Articles of Incorporation Exhibit 4(a)(ii) to the Company's Form S-3 Registration
Statement (Registration No. 333-72885) filed with the
Commission on February 24, 1999
27
3(b) Restated By-Laws Exhibit 3(b) to the Company's Annual Report
on Form 10-K for the year ended December 31, 2000.
4(i)(a) Specimen Common Stock Exhibit 4(i) to the Company's Annual Report
Certificate on Form 10-K for the year ended December 31, 1993.
4(i)(b) Form of Certificate for Shares Exhibit 1(e) to the Company's Form 8-A
of 9 1/4% Series A Cumulative Registration Statement dated April 24, 1995.
Redeemable Preferred Stock
4(i)(c) Form of Certificate for Shares Exhibit 1(e) to the Company's Form 8-A
of 8.60% Series B Cumulative Registration Statement dated June 11, 1997.
Redeemable Preferred Stock
4(i)(d) Rights Agreement dated as of Exhibit 1 to the Company's Form 8-A
January 27, 1998, between the Registration Statement dated February 4, 1998.
Company and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent.
4(i)(d)(a) First Amended and Restated Rights Exhibit 4(i)(d)(a) to the Company's Quarterly
Agreement dates as of September 14, Report on Form 10-Q for the quarter ended
1999, between the Company and September 30, 1999.
ChaseMellon Shareholders Services,
L.L.C., as Rights Agent
4(i)(e) Form of Rights Certificate Exhibit 4(e) to the Company's Form 8-A
Registration Statement dated February 4, 1998.
4(ii)(e) Note Purchase Agreement dated Exhibit 6(c)(5) to the Company's Form 8-A
as of February 15, 1993, between Registration Statement dated April 19, 1990.
the Company and CIGNA Property
and Casualty Insurance Company,
Connecticut General Life Insurance
Company, on behalf of one or more
separate accounts, Insurance
Company of North America,
Principal Mutual Life Insurance
Company and Aid Association for
Lutherans
4(ii)(f) Credit Agreement dated as of Exhibit 4(ii)(g) to the Company's Annual
November 14, 2000, between Report on Form 10-K for the year ended
the Company and certain subsidiaries December 31, 2000.
and a syndicate of banks represented
by First Union Nation Bank
28
10(i) Amended Employment Agreement Exhibit 10(i) to the Company's Annual Report
between the Company and John P. on Form 10-K for the year ended
McCann dated December 5, 2000. December 31, 2000.
10(ii) Amended Employment Agreement Exhibit 10(ii) to the Company's Annual
between the Company and John S. Report on Form 10-K for the year ended
Schneider dated December 5, 2000. December 31, 2000.
10(iii) Employment Agreement between Exhibit 10(iii) to the Company's Annual Report
the Company and Richard Giannotti on Form 10-K for the year ended December 31,
dated December 8, 1998. 1998.
10(iv) Employment Agreement between Exhibit 10(iv) to the Company's Quarterly
the Company and A. William Hamill Report on Form 10-Q for the quarter ended
dated September 30, 1999. September 30, 1999.
10(v) 1985 Stock Option Plan, as amended. Exhibit 10(iv) to the Company's Quarterly
Report on Form 10-Q for the quarter ended
June 30, 1998.
10(vi) 1991 Stock Purchase and Loan Plan. Exhibit 10(viii) to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31,
1997.
10(vii) Third Amended and Restated Exhibit 10(vi) to the Company's Annual Report
Agreement of Limited Partnership of on Form 10-K for the year ended December 31,
United Dominion Realty, L.P. 1998.
Dated as of December 7, 1998.
10(vii)(a) Subordination Agreement dated Exhibit 10(vi)(a) to the Company's Quarterly
April 16, 1998, between the Report on Form 10-Q for the quarter ended
Company and United Dominion March 31, 1998.
Realty, L.P.
10(viii) Servicing and Purchase Exhibit 10(vii) to the Company's Quarterly
Agreement dated as of June 24, Report on Form 10-Q for the quarter ended
1999, including as an exhibit June 30, 1999.
thereto the Note and Participation
Agreement forms.
10(ix) Description of Restricted Stock Exhibit 10(ix) to the Company's Annual Report
Awards Program. on Form 10-K for the year ended December 31,
1999.
10(x) Description of United Dominion Exhibit 10(x) to the Company's Annual
Realty Trust, Inc. Shareholder Report on Form 10-K for the year ended
Value Plan. December 31, 1999.
29
10(xi) Description of United Dominion Exhibit 10(xi) to the Company's Annual
Realty Trust, Inc. Executive Report on Form 10-K for the year ended
Deferral Plan. December 31, 1999.
10(xii) Employment Agreement between the Exhibit 10(xii) to the Company's Annual
Company and Curtis W. Carter Report on Form 10-K for the year ended
dated December 8, 1998. December 31, 1999.
10(xiii) Employment Agreement between Exhibit 10(xiii) to the Company's Annual
the Company and Mark E. Wood Report on Form 10-K for the year ended
dated March 21, 2000. December 31, 1999.
10(xiv) Employment Agreement between Filed herewith.
the Company and A. William
Hamill dated December 5, 2000.
10(xv) Retirement Agreement and Covenant Filed herewith.
Not to Compete between the Company
and John P. McCann dated March 20, 2001.
10(xvi) Retirement Agreement between Filed herewith.
the Company and John S. Schneider
dated March 16, 2001.
10(xvii) Employment Separation Agreement Filed herewith.
between the Company and A. William
Hamill dated March 20, 2001.
12 Computation of Ratio of Earnings Filed herewith.
to Fixed Charges.
30
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Quarterly Report to be signed
on its behalf by the undersigned, thereunto duly authorized.
United Dominion Realty Trust, Inc.
- - ----------------------------------
(registrant)
Date: May 15, 2001 /s/ Christopher D. Genry
- - ---------------------------------- ---------------------------------
Christopher D. Genry
Executive Vice President and
Chief Financial Officer
Date: May 15, 2001 /s/ Scott A. Shanaberger
- - ---------------------------------- ---------------------------------
Scott A. Shanaberger
Vice President and
Chief Accounting Officer
31