UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

x

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934

 

 

For the quarterly period ended September 30, 2006

or

o

 

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

 

United Dominion Realty Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland

54-0857512

(State or other jurisdiction of
incorporation of organization)

(I.R.S. Employer
Identification No.)

 

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

(Address of principal executive offices) (zip code)

(720) 283-6120

(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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x

Accelerated filer o

Non-accelerated filer o

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

The number of shares of the issuer’s common stock, $0.01 par value, outstanding as of November 6, 2006 was 134,692,092.

 




UNITED DOMINION REALTY TRUST, INC.
FORM 10-Q
INDEX

 

PAGE

 

PART I—FINANCIAL INFORMATION

 

 

 

 

 

Item 1.

Condensed Consolidated Financial Statements (unaudited)

 

 

2

 

 

 

Consolidated Balance Sheets as of September 30, 2006 and December 31, 2005

 

 

2

 

 

 

Consolidated Statements of Operations for the three and nine months ended September 30, 2006 and 2005

 

 

3

 

 

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2006 and 2005

 

 

4

 

 

 

Consolidated Statement of Stockholders’ Equity for the nine months ended September 30, 2006 .

 

 

5

 

 

 

Notes to Consolidated Financial Statements

 

 

6

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

15

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

 

29

 

 

Item 4.

Controls and Procedures

 

 

29

 

 

PART II—OTHER INFORMATION

 

 

 

 

 

Item 1A.

Risk Factors

 

 

30

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

 

37

 

 

Item 5.

Other Information

 

 

38

 

 

Item 6.

Exhibits

 

 

38

 

 

 

Signatures

 

 

39

 

 

 

1




PART I—FINANCIAL INFORMATION

Item 1.                        FINANCIAL STATEMENTS

UNITED DOMINION REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS
(In thousands, except for share data)
(Unaudited)

 

 

September 30,

 

December 31,

 

 

 

2006

 

2005

 

ASSETS

 

 

 

 

 

 

 

 

 

Real estate owned:

 

 

 

 

 

 

 

 

 

Real estate held for investment

 

 

$

5,414,298

 

 

 

$

4,933,500

 

 

Less: accumulated depreciation

 

 

(1,164,077

)

 

 

(1,002,455

)

 

 

 

 

4,250,221

 

 

 

3,931,045

 

 

Real estate under development (net of accumulated depreciation of $71 and $140)

 

 

161,580

 

 

 

90,769

 

 

Real estate held for disposition (net of accumulated depreciation of $14,680 and $121,234)

 

 

139,049

 

 

 

366,781

 

 

Total real estate owned, net of accumulated depreciation

 

 

4,550,850

 

 

 

4,388,595

 

 

Cash and cash equivalents

 

 

28,748

 

 

 

15,543

 

 

Restricted cash

 

 

5,591

 

 

 

4,583

 

 

Deferred financing costs, net

 

 

30,775

 

 

 

31,036

 

 

Notes receivable

 

 

10,000

 

 

 

64,805

 

 

Other assets

 

 

49,687

 

 

 

33,729

 

 

Other assets—real estate held for disposition

 

 

6,615

 

 

 

3,302

 

 

Total assets

 

 

$

4,682,266

 

 

 

$

4,541,593

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Secured debt

 

 

$

1,161,919

 

 

 

$

1,116,259

 

 

Unsecured debt

 

 

2,170,924

 

 

 

2,043,518

 

 

Real estate taxes payable

 

 

37,559

 

 

 

22,446

 

 

Accrued interest payable

 

 

22,429

 

 

 

26,672

 

 

Security deposits and prepaid rent

 

 

24,836

 

 

 

24,072

 

 

Distributions payable

 

 

47,199

 

 

 

45,313

 

 

Accounts payable, accrued expenses, and other liabilities

 

 

51,159

 

 

 

53,223

 

 

Other liabilities—real estate held for disposition

 

 

478

 

 

 

18,547

 

 

Total liabilities

 

 

3,516,503

 

 

 

3,350,050

 

 

Minority interests

 

 

86,339

 

 

 

83,819

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

Preferred stock, no par value; 50,000,000 shares authorized 5,416,009 shares 8.60% Series B Cumulative Redeemable issued and outstanding (5,416,009 in 2005)

 

 

135,400

 

 

 

135,400

 

 

2,803,812 shares 8.00% Series E Cumulative Convertible issued and outstanding (2,803,812 in 2005)

 

 

46,571

 

 

 

46,571

 

 

Common stock, $0.01 par value; 250,000,000 shares authorized 134,678,388 shares issued and outstanding (134,012,053 in 2005)

 

 

1,347

 

 

 

1,340

 

 

Additional paid-in capital

 

 

1,686,039

 

 

 

1,680,115

 

 

Distributions in excess of net income

 

 

(789,933

)

 

 

(755,702

)

 

Total stockholders’ equity

 

 

1,079,424

 

 

 

1,107,724

 

 

Total liabilities and stockholders’ equity

 

 

$

4,682,266

 

 

 

$

4,541,593

 

 

 

See accompanying notes to consolidated financial statements.

2




UNITED DOMINION REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share data)
(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2006

 

2005

 

2006

 

2005

 

REVENUES

 

 

 

 

 

 

 

 

 

Rental income

 

$

177,634

 

$

157,715

 

$

514,236

 

$

459,798

 

Non-property income:

 

 

 

 

 

 

 

 

 

Sale of technology investment

 

796

 

 

796

 

12,306

 

Other income

 

451

 

2,319

 

2,352

 

2,976

 

Total non-property income

 

1,247

 

2,319

 

3,148

 

15,282

 

Total revenues

 

178,881

 

160,034

 

517,384

 

475,080

 

EXPENSES

 

 

 

 

 

 

 

 

 

Rental expenses:

 

 

 

 

 

 

 

 

 

Real estate taxes and insurance

 

20,159

 

19,420

 

61,971

 

55,080

 

Personnel

 

17,197

 

16,442

 

50,219

 

46,744

 

Utilities

 

10,006

 

9,081

 

29,709

 

26,543

 

Repair and maintenance

 

11,287

 

10,008

 

30,376

 

28,702

 

Administrative and marketing

 

5,474

 

5,460

 

15,777

 

15,859

 

Property management

 

5,126

 

4,771

 

15,211

 

14,428

 

Other operating expenses

 

308

 

291

 

907

 

870

 

Real estate depreciation and amortization

 

61,242

 

48,742

 

172,330

 

141,517

 

Interest

 

47,148

 

41,586

 

138,049

 

119,320

 

General and administrative

 

7,381

 

4,913

 

20,981

 

16,822

 

Loss on early debt retirement

 

 

 

 

6,662

 

Other depreciation and amortization

 

834

 

681

 

2,252

 

1,970

 

Total expenses

 

186,162

 

161,395

 

537,782

 

474,517

 

(Loss)/income before minority interests and discontinued operations

 

(7,281

)

(1,361

)

(20,398

)

563

 

Minority interests of outside partnerships

 

(33

)

22

 

(87

)

(89

)

Minority interests of unitholders in operating partnerships

 

773

 

316

 

2,040

 

649

 

(Loss)/income before discontinued operations, net of minority
interests

 

(6,541

)

(1,023

)

(18,445

)

1,123

 

Income from discontinued operations, net of minority interests

 

65,893

 

16,158

 

121,990

 

81,395

 

Net income

 

59,352

 

15,135

 

103,545

 

82,518

 

Distributions to preferred stockholders—Series B

 

(2,911

)

(2,911

)

(8,733

)

(8,733

)

Distributions to preferred stockholders—Series E (Convertible)

 

(931

)

(931

)

(2,794

)

(2,794

)

Net income available to common stockholders

 

$

55,510

 

$

11,293

 

$

92,018

 

$

70,991

 

Earnings per weighted average common share—basic and diluted:

 

 

 

 

 

 

 

 

 

Loss from continuing operations available to common stockholders, net of minority interests

 

$

(0.07

)

$

(0.04

)

$

(0.22

)

$

(0.08

)

Income from discontinued operations, net of minority interests

 

$

0.49

 

$

0.12

 

$

0.91

 

$

0.60

 

Net income available to common stockholders

 

$

0.42

 

$

0.08

 

$

0.69

 

$

0.52

 

Common distributions declared per share

 

$

0.3125

 

$

0.3000

 

$

0.9375

 

$

0.9000

 

Weighted average number of common shares outstanding—basic

 

133,712

 

136,392

 

133,660

 

136,231

 

Weighted average number of common shares outstanding—diluted

 

133,712

 

136,392

 

133,660

 

136,231

 

 

See accompanying notes to consolidated financial statements.

3




UNITED DOMINION REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, except for share data)
(Unaudited)

 

 

Nine Months Ended
September 30,

 

 

 

2006

 

2005

 

Operating Activities

 

 

 

 

 

Net income

 

$

103,545

 

$

82,518

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

181,849

 

158,504

 

Net gains on the sale of land and depreciable property

 

(114,497

)

(66,657

)

Gain on the sale of technology investment

 

(796

)

(12,306

)

Distribution of earnings from unconsolidated joint venture

 

 

124

 

Minority interests

 

5,972

 

4,498

 

Amortization of deferred financing costs and other

 

4,368

 

6,544

 

Changes in operating assets and liabilities:

 

 

 

 

 

Increase in operating assets

 

(9,888

)

(6,321

)

(Decrease)/increase in operating liabilities

 

(6,105

)

3,556

 

Net cash provided by operating activities

 

164,448

 

170,460

 

Investment Activities

 

 

 

 

 

Proceeds from sales of real estate investments, net

 

391,185

 

203,534

 

Repayment of note receivable

 

59,805

 

33,705

 

Acquisition of real estate assets (net of liabilities assumed and initial capital expenditures

 

(333,055

)

(310,551

)

Development of real estate assets

 

(38,920

)

(35,046

)

Capital expenditures and other major improvements—real estate assets, net of escrow reimbursement

 

(163,490

)

(96,858

)

Capital expenditures—non-real estate assets

 

(2,499

)

(1,950

)

Investment in consolidated joint venture

 

(10,630

)

 

Proceeds from the sale of technology investment

 

796

 

12,306

 

Decrease in funds held in escrow from 1031 exchanges pending the acquisition of real estate

 

 

17,039

 

Net cash used in investing activities

 

(96,808

)

(177,821

)

Financing Activities

 

 

 

 

 

Scheduled principal payments on secured debt

 

(69,289

)

(7,565

)

Non-scheduled principal payments on secured debt

 

 

(125,221

)

Payments on unsecured debt

 

(110,194

)

(21,100

)

Proceeds from the issuance of unsecured debt

 

125,000

 

268,875

 

Proceeds from the issuance of secured debt

 

44,814

 

 

Net proceeds from revolving bank debt

 

112,800

 

35,000

 

Payment of financing costs

 

(4,211

)

(6,374

)

Distribution of capital from unconsolidated joint venture

 

 

458

 

Collateral substitution deposit

 

(10,432

)

 

Proceeds from the issuance of common stock

 

4,441

 

4,185

 

Proceeds from the issuance of performance shares

 

400

 

380

 

Cancellation of performance shares

 

(2,059

)

 

Purchase of minority interests from outside partners

 

 

(522

)

Conversion of operating partnership units to cash

 

 

(50

)

Distributions paid to minority interests

 

(9,815

)

(9,365

)

Distributions paid to preferred stockholders

 

(11,527

)

(11,527

)

Distributions paid to common stockholders

 

(124,363

)

(122,237

)

Net cash (used in)/provided by financing activities

 

(54,435

)

4,937

 

Net increase/(decrease) in cash and cash equivalents

 

13,205

 

(2,424

)

Cash and cash equivalents, beginning of period

 

15,543

 

7,904

 

Cash and cash equivalents, end of period

 

$

28,748

 

$

5,480

 

Supplemental Information:

 

 

 

 

 

Interest paid during the period

 

$

143,312

 

$

119,709

 

Non-cash transactions:

 

 

 

 

 

Conversion of operating partnership minority interests to common stock
(34,290 shares in 2006 and 92,985 shares in 2005)

 

317

 

1,382

 

Issuance of restricted stock awards

 

3,082

 

8,450

 

Secured debt assumed with acquisition of a property

 

14,236

 

26,825

 

Receipt of a note receivable in connection with sales of real estate investments

 

 

124,650

 

Deferred gain in connection with sales of real estate investments

 

 

11,794

 

Non-cash transactions associated with consolidated joint venture:

 

 

 

 

 

Issuance of note receivable

 

4,000

 

 

Real estate asset acquired

 

72,004

 

 

Secured debt assumed

 

55,899

 

 

Operating assets assumed

 

51

 

 

Operating liabilities assumed

 

5,028

 

 

 

See accompanying notes to consolidated financial statements.

4




UNITED DOMINION REALTY TRUST, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
(In thousands, except for share data)
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Distributions

 

 

 

 

 

Preferred Stock

 

Common Stock

 

Paid-in

 

In Excess of

 

 

 

 

 

Shares

 

Amount

 

Shares

 

Amount

 

Capital

 

Net Income

 

Total

 

Balance, December 31, 2005

 

8,219,821

 

$

181,971

 

134,012,053

 

 

$

1,340

 

 

$

1,680,115

 

 

$

(755,702

)

 

$

1,107,724

 

Comprehensive Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

103,545

 

 

103,545

 

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

103,545

 

 

103,545

 

Issuance of common and restricted
shares and other

 

 

 

 

 

632,045

 

 

7

 

 

7,666

 

 

 

 

7,673

 

Adjustment for conversion of minority interests of unitholders in operating partnerships

 

 

 

 

 

34,290

 

 

 

 

317

 

 

 

 

317

 

Adjustment for cancellation of minority interests in
Series A LLC

 

 

 

 

 

 

 

 

 

 

 

(2,059

)

 

 

 

 

(2,059

)

Common stock distributions declared ($0.9375 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(126,249

)

 

(126,249

)

Preferred stock distributions declared-Series B ($1.6125 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,733

)

 

(8,733

)

Preferred stock distributions declared-Series E ($0.9966 per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,794

)

 

(2,794

)

Balance, September 30, 2006

 

8,219,821

 

$

181,971

 

134,678,388

 

 

$

1,347

 

 

$

1,686,039

 

 

$

(789,933

)

 

$

1,079,424

 

 

See accompanying notes to consolidated financial statements.

5




UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2006
(UNAUDITED)

1.                 CONSOLIDATION AND BASIS OF PRESENTATION

United Dominion Realty Trust, Inc. is a self-administered real estate investment trust, or REIT, that owns, acquires, renovates, develops, and manages middle-market apartment communities nationwide. 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 September 30, 2006, there were 166,185,740 units in the Operating Partnership outstanding, of which 156,145,126 units or 94% were owned by United Dominion and 10,040,614 units or 6% were owned by limited partners (of which 1,650,322 are owned by the holders of the Series A OPPS, see Note 6). As of September 30, 2006, there were 5,542,200 units in the Heritage OP outstanding, of which 5,212,993 units or 94% were owned by United Dominion and 329,207 units or 6% were owned by limited partners. The consolidated financial statements of United Dominion include the minority interests of the unitholders in the Operating Partnership and the Heritage OP. All significant intercompany accounts and transactions have been eliminated in consolidation.

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 accounting principles generally accepted in the United States 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 Annual Report on Form 10-K for the year ended December 31, 2005, filed with the Securities and Exchange Commission as updated by the Current Report on Form 8-K filed August 17, 2006.

In the opinion of management, the consolidated financial statements reflect all adjustments that are necessary for the fair presentation of financial position at September 30, 2006, and results of operations for the interim periods ended September 30, 2006 and 2005. Such adjustments are normal and recurring in nature. 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.

In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 (“FIN 48”), to create a single model to address accounting for uncertainty in tax positions. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. United Dominion is currently evaluating the impact of this Interpretation on our results of operations and financial position.

6




UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2.                 REAL ESTATE HELD FOR INVESTMENT

At September 30, 2006, there are 237 communities with 68,890 apartment homes classified as real estate held for investment. The following table summarizes the components of real estate held for investment (dollars in thousands):

 

 

September 30,
2006

 

December 31,
2005

 

Land and land improvements

 

 

$

1,249,914

 

 

$

1,219,540

 

Buildings and improvements

 

 

3,870,894

 

 

3,469,817

 

Furniture, fixtures, and equipment

 

 

292,507

 

 

244,143

 

Construction in process

 

 

983

 

 

 

Real estate held for investment

 

 

5,414,298

 

 

4,933,500

 

Accumulated depreciation

 

 

(1,164,077

)

 

(1,002,455

)

Real estate held for investment, net

 

 

$

4,250,221

 

 

$

3,931,045

 

 

3.                 INCOME FROM DISCONTINUED OPERATIONS

FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (FAS 144) requires, among other things, that the primary assets and liabilities and the results of operations of United Dominion’s real properties which have been sold subsequent to January 1, 2002, or are held for disposition subsequent to January 1, 2002, be classified as discontinued operations and segregated in United Dominion’s Consolidated Statements of Operations and Balance Sheets. Properties classified as real estate held for disposition generally represent properties that are actively marketed or contracted for sale which are expected to close within the next twelve months.

For purposes of these financial statements, FAS 144 results in the presentation of the primary assets and liabilities and the net operating results of those properties sold or classified as held for disposition through September 30, 2006, as discontinued operations for all periods presented. The adoption of FAS 144 does not have an impact on net income available to common stockholders. FAS 144 only results in the reclassification of the operating results of all properties sold or classified as held for disposition through September 30, 2006, within the Consolidated Statements of Operations for the three and nine months ended September 30, 2006 and 2005, and the reclassification of the assets and liabilities within the Consolidated Balance Sheets for 2006 and 2005.

For the nine months ended September 30, 2006, United Dominion sold 22 communities with a total of 6,768 apartment homes and 351 condominiums from four communities with a total of 612 condominiums. We recognized gains for financial reporting purposes of $114.5 million on these sales. At September 30, 2006, United Dominion had three communities with a total of 1,152 homes and a net book value of $72.4 million, four communities with a total of 562 condominiums and a net book value of $62.5 million, and one parcel of land with a net book value of $4.1 million included in real estate held for disposition. During 2005, United Dominion sold 22 communities with a total of 6,352 apartment homes, 240 condominiums from five communities with a total of 648 condominiums, and one parcel of land. In conjunction with the sale of ten communities in July 2005, we received short-term notes for $124.7 million that bear interest at 6.75% and had maturities ranging from September 2005 to July 2006. As of September 30, 2006, all of the notes receivable had matured and had been repaid. We recognized previously deferred gains for financial reporting purposes of $6.4 million during the nine months ended September 30, 2006. The results of operations for these properties and the interest expense associated with the secured debt on these

7




UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

properties are classified on the Consolidated Statements of Operations in the line item titled “Income from discontinued operations, net of minority interests.”

United Dominion has elected Taxable REIT Subsidiary (“TRS”) status for certain of its corporate subsidiaries, primarily those engaged in condominium conversion and development activities. United Dominion recognized a $2.4 million income tax benefit for the three months ended September 30, 2006, and a provision for income taxes of $2.4 million for the three months ended September 30, 2005. For the nine months ended September 30, 2006 and 2005, United Dominion recognized a provision for income taxes of $4.9 million and $3.8 million, respectively. These amounts are included in the income from discontinued operations, net of minority interests in the accompanying consolidated statement of operations.

The following is a summary of income from discontinued operations for the periods presented, (dollars in thousands):

 

 

Three Months Ended
September 30

 

Three Months Ended
September 30

 

 

 

2006

 

2005

 

2006

 

2005

 

Rental income

 

$

8,779

 

$

15,828

 

$

38,892

 

$

65,015

 

Non-property income

 

 

 

5

 

8

 

 

 

8,779

 

15,828

 

38,897

 

65,023

 

Rental expenses

 

3,978

 

7,462

 

17,251

 

28,147

 

Real estate depreciation

 

608

 

4,283

 

7,232

 

14,929

 

Interest (income)/expense

 

(313

)

(254

)

(1,039

)

242

 

Loss on early debt retirement

 

 

 

 

1,821

 

Other expenses

 

1

 

26

 

35

 

88

 

 

 

4,274

 

11,517

 

23,479

 

45,227

 

Income before net gain on the sale of depreciable property and minority interests

 

4,505

 

4,311

 

15,418

 

19,796

 

Net gain on the sale of depreciable property

 

65,669

 

12,851

 

114,497

 

66,657

 

Income before minority interests

 

70,174

 

17,162

 

129,915

 

86,453

 

Minority interests on income from discontinued operations

 

(4,281

)

(1,004

)

(7,925

)

(5,058

)

Income from discontinued operations, net of minority interests

 

$

65,893

 

$

16,158

 

$

121,990

 

$

81,395

 

 

8




UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4.                 SECURED DEBT

Secured debt on continuing and discontinued operations, which encumbers $2.0 billion or 34% of United Dominion’s real estate owned based upon book value ($3.8 billion or 66% of United Dominion’s real estate owned is unencumbered) consists of the following as of September 30, 2006 (dollars in thousands):

 

 

 

 

 

 

Weighted

 

Weighted

 

Number of

 

 

 

Principal Outstanding

 

Average

 

Average Years

 

Communities

 

 

 

September 30,

 

December 31,

 

Interest Rate

 

to Maturity

 

Encumbered

 

 

 

2006

 

2005

 

2006

 

2006

 

2006

 

Fixed Rate Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage notes payable

 

 

$

342,719

 

 

 

$

359,281

 

 

 

5.40

%

 

 

5.0

 

 

 

14

 

 

Tax-exempt secured notes payable

 

 

26,285

 

 

 

26,400

 

 

 

5.85

%

 

 

18.4

 

 

 

3

 

 

Fannie Mae credit facilities

 

 

399,362

 

 

 

363,875

 

 

 

6.09

%

 

 

4.5

 

 

 

9

 

 

Total fixed rate secured debt

 

 

$

768,366

 

 

 

749,556

 

 

 

5.77

%

 

 

5.2

 

 

 

26

 

 

Variable Rate Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage notes payable

 

 

93,314

 

 

 

66,464

 

 

 

7.17

%

 

 

3.7

 

 

 

4

 

 

Tax-exempt secured notes payable

 

 

7,770

 

 

 

7,770

 

 

 

3.92

%

 

 

21.8

 

 

 

1

 

 

Fannie Mae credit facilities

 

 

292,469

 

 

 

292,469

 

 

 

5.60

%

 

 

6.2

 

 

 

46

 

 

Total variable rate secured debt

 

 

393,553

 

 

 

366,703

 

 

 

5.94

%

 

 

5.9

 

 

 

51

 

 

Total secured debt

 

 

$

1,161,919

 

 

 

$

1,116,259

 

 

 

5.83

%

 

 

5.4

 

 

 

77

 

 

 

Approximate principal payments due during each of the next five calendar years and thereafter, as of September 30, 2006, are as follows (dollars in thousands):

Year

 

 

 

Fixed
Rate
Maturities

 

Variable
Rate
Maturities

 

Total
Secured
Maturities

 

2006

 

$

1,516

 

$

33,628

 

$

35,144

 

2007

 

81,841

 

 

81,841

 

2008

 

9,513

 

 

9,513

 

2009

 

18,114

 

 

18,114

 

2010

 

272,641

 

22,271

 

294,912

 

Thereafter

 

384,741

 

337,654

 

722,395

 

 

 

$

768,366

 

$

393,553

 

$

1,161,919

 

 

During the first quarter of 2005, United Dominion prepaid approximately $110 million of secured debt. In conjunction with these prepayments, we incurred prepayment penalties of $8.5 million in both continuing and discontinued operations as “Loss on early debt retirement.” These penalties were funded by the proceeds from the sale of our technology investment of $12.3 million.

9




UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

5.   UNSECURED DEBT

A summary of unsecured debt as of September 30, 2006 and December 31, 2005 is as follows (dollars in thousands):

 

 

2006

 

2005

 

Commercial Banks

 

 

 

 

 

Borrowings outstanding under an unsecured credit facility due May 2008(a)

 

$

323,600

 

$

210,800

 

Senior Unsecured Notes—Other

 

 

 

 

 

7.95% Medium-Term Notes due July 2006

 

 

85,374

 

7.07% Medium-Term Notes due November 2006

 

25,000

 

25,000

 

7.25% Notes due January 2007

 

92,255

 

92,255

 

4.30% Medium-Term Notes due July 2007

 

75,000

 

75,000

 

4.50% Medium-Term Notes due March 2008

 

200,000

 

200,000

 

8.50% Monthly Income Notes due November 2008

 

29,081

 

29,081

 

4.25% Medium-Term Notes due January 2009

 

50,000

 

50,000

 

6.50% Notes due June 2009

 

200,000

 

200,000

 

3.90% Medium-Term Notes due March 2010

 

50,000

 

50,000

 

5.00% Medium-Term Notes due January 2012

 

100,000

 

100,000

 

6.05% Medium-Term Notes due June 2013(b)

 

125,000

 

 

5.13% Medium-Term Notes due January 2014

 

200,000

 

200,000

 

5.25% Medium-Term Notes due January 2015

 

250,000

 

250,000

 

5.25% Medium-Term Notes due January 2016

 

100,000

 

100,000

 

8.50% Debentures due September 2024

 

54,118

 

54,118

 

4.00% Convertible Senior Notes due December 2035

 

250,000

 

250,000

 

Other

 

170

 

370

 

 

 

2,124,224

 

1,761,198

 

Unsecured Notes—Other

 

 

 

 

 

Verano Construction Loan due February 2006

 

 

24,820

 

ABAG Tax-Exempt Bonds due August 2008

 

46,700

 

46,700

 

 

 

46,700

 

71,520

 

Total Unsecured Debt

 

$

2,170,924

 

$

2,043,518

 


(a)           United Dominion has a three-year $500 million unsecured revolving credit facility. The credit facility matures on May 31, 2008, and at United Dominion’s option, can be extended for an additional year. United Dominion has the right to increase the credit facility to $750 million if the initial lenders increase their commitments or we receive commitments from additional lenders. Based on United Dominion’s current credit ratings, the credit facility carries an interest rate equal to LIBOR plus a spread of 57.5 basis points, which represents a 12.5 basis point reduction to the previous unsecured revolver, and the facility fee was reduced from 20 basis points to 15 basis points. Under a competitive bid feature and for so long as United Dominion maintains an Investment Grade Rating, United Dominion has the right to bid out 100% of the commitment amount.

(b)          In June 2006, United Dominion issued $125 million of 6.05% medium-term notes. Interest is payable semiannually on June 1 and December 1, with the first interest payment due December 1, 2006. The notes mature on June 1, 2013.

10




UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6.   EARNINGS PER SHARE

Basic earnings per common share is computed based upon the weighted average number of common shares outstanding during the period. Diluted earnings per common share is computed based upon 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 potentially dilutive common stock equivalents is determined using the treasury stock method based on United Dominion’s average stock price.

The following table sets forth the computation of basic and diluted earnings per share for the periods presented, (dollars in thousands, except per share data):

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2006

 

2005

 

2006

 

2005

 

Numerator for basic and diluted earnings per share—

 

 

 

 

 

 

 

 

 

Net income available to common stockholders

 

$

55,510

 

$

11,293

 

$

92,018

 

$

70,991

 

Denominator:

 

 

 

 

 

 

 

 

 

Denominator for basic and diluted earnings per share—

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

134,626

 

137,164

 

134,430

 

137,017

 

Non-vested restricted stock awards

 

(914

)

(772

)

(770

)

(786

)

Denominator for basic and diluted earnings per share

 

133,712

 

136,392

 

133,660

 

136,231

 

Basic and diluted earnings per share

 

$

0.42

 

$

0.08

 

$

0.69

 

$

0.52

 

 

The effect of the conversion of the operating partnership units, Series A Out-Performance Partnership Shares, and convertible preferred stock is not dilutive and is therefore not included in the above calculations. If the operating partnership units were converted into common stock, the additional shares of common stock outstanding for the three and nine months ended September 30, 2006 would be 8,724,535 and 8,739,982 weighted average common shares, and 8,503,993 and 8,509,748 weighted average common shares for the three and nine months ended September 30, 2005. If the Series A Out-Performance Partnership Shares were converted into common stock, the additional shares of common stock outstanding for the three and nine months ended September 30, 2006 would be 1,691,845 and 1,739,433 weighted average common shares, and 1,791,329 weighted average common shares for the three and nine months ended September 30, 2005. If the convertible preferred stock were converted into common stock, the additional shares of common stock outstanding for the three and nine months ended September 30, 2006 and 2005 would be 2,803,812 weighted average common shares.

7.   COMPREHENSIVE INCOME

Total comprehensive income for the three and nine months ended September 30, 2006 and 2005, was $59.3 million and $103.5 million for 2006 and $15.1 million and $82.5 million for 2005, respectively. There is no difference between net income and total comprehensive income for the periods presented.

11




UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

8.   COMMITMENTS AND CONTINGENCIES

Commitments

United Dominion is committed to completing its real estate under development, which has an estimated cost to complete of $53.7 million at September 30, 2006.

United Dominion has entered into two contracts to purchase apartment communities upon their development completion. Provided that the developer meets certain conditions, United Dominion will purchase these communities for a total of $76.5 million.

Contingencies

Series C Out-Performance Program

In May 2005, the stockholders of United Dominion approved a new Out-Performance Program and the first series of new Out-Performance Partnership Shares under the program are the Series C Out-Performance Units (the “Series C Program”) pursuant to which certain executive officers and other key employees of United Dominion (the “Series C Participants”) were given the opportunity to invest indirectly in United Dominion by purchasing interests in UDR Out-Performance III, LLC, a Delaware limited liability company (the “Series C LLC”), the only asset of which is a special class of partnership units of the Operating Partnership (“Series C Out-Performance Partnership Shares” or “Series C OPPSs”). The purchase price for the Series C OPPSs was determined by the Compensation Committee of United Dominion’s board of directors to be $750,000, assuming 100% participation, and was based upon the advice of an independent valuation expert. United Dominion’s performance for the Series C Program will be measured over the 36-month period from June 1, 2005 to May 30, 2008.

The Series C Program is designed to provide participants with the possibility of substantial returns on their investment if the cumulative total return on United Dominion’s common stock, as measured by the cumulative amount of dividends paid plus share price appreciation during the measurement period is at least the equivalent of a 36% total return, or 12% annualized (“Minimum Return”).

At the conclusion of the measurement period, if United Dominion’s cumulative total return satisfies these criteria, the Series C LLC as holder of the Series C OPPSs will receive (for the indirect benefit of the Series C Participants as holders of interests in the Series C LLC) 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 OP Units obtained by:

i.       determining the amount by which the cumulative total return of United Dominion’s common stock over the measurement period exceeds the Minimum Return (such excess being the “Excess Return”);

ii.     multiplying 2% of the Excess Return by United Dominion’s market capitalization (defined as the average number of shares outstanding over the 36-month period, including common stock, common stock equivalents and OP Units); and

iii.    dividing the number obtained in clause (ii) by the market value of one share of United Dominion’s common stock on the valuation date, computed as the volume-weighted average price per day of common stock for the 20 trading days immediately preceding the valuation date.

12




UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the Series C OPPSs, the number determined pursuant to (ii) above is capped at 1% of market capitalization.

If, on the valuation date, the cumulative total return of United Dominion’s common stock does not meet the Minimum Return, then the Series C Participants will forfeit their entire initial investment.

Based on the results through September 30, 2006, the Series C LLC would not be entitled to receive distributions or allocations of income had the Series C Program terminated on that date. However, since the ultimate determination of Series C OPPSs to be issued will not occur until May 30, 2008, and the number of Series C OPPSs is determinable only upon future events, the financial statements do not reflect any impact for these events.

Series D Out-Performance Program

In February 2006, the board of directors of United Dominion approved the Series D Out-Performance Program (the “Series D Program”) pursuant to which certain executive officers and other key employees of United Dominion (the “Series D Participants”) were given the opportunity to invest indirectly in United Dominion by purchasing interests in UDR Out-Performance IV, LLC, a Delaware limited liability company (the “Series D LLC”), the only asset of which is a special class of partnership units of the Operating Partnership (“Series D Out-Performance Partnership Shares” or “Series D OPPSs”). The Series D Program is part of the New Out-Performance Program approved by United Dominion’s stockholders in May 2005. The Series D LLC has agreed to sell 830,000 membership units to members of United Dominion’s senior management at a price of $1.00 per unit. The aggregate purchase price of $830,000 for the Series D OPPSs, assuming 100% participation, is based upon the advice of an independent valuation expert. The Series D Program will measure the cumulative total return on our common stock over the 36-month period beginning January 1, 2006 and ending December 31, 2008.

The Series D Program is designed to provide participants with the possibility of substantial returns on their investment if the cumulative total return on United Dominion’s common stock, as measured by the cumulative amount of dividends paid plus share price appreciation during the measurement period is at least the equivalent of a 36% total return or 12% annualized (“Minimum Return”).

At the conclusion of the measurement period, if United Dominion’s cumulative total return satisfies these criteria, the Series D LLC as holder of the Series D OPPSs will receive (for the indirect benefit of the Series D Participants as holders of interests in the Series D LLC) 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 OP Units obtained by:

i.       determining the amount by which the cumulative total return of United Dominion’s common stock over the measurement period exceeds the Minimum Return (such excess being the “Excess Return”);

ii.     multiplying 2% of the Excess Return by United Dominion’s market capitalization (defined as the average number of shares outstanding over the 36-month period, including common stock, common stock equivalents and OP Units); and

iii.    dividing the number obtained in (ii) by the market value of one share of United Dominion’s common stock on the valuation date, computed as the volume-weighted average price per day of the common stock for the 20 trading days immediately preceding the valuation date.

13




UNITED DOMINION REALTY TRUST, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

For the Series D OPPSs, the number determined pursuant to clause (ii) above is capped at 1% of market capitalization.

If, on the valuation date, the cumulative total return of United Dominion’s common stock does not meet the Minimum Return, then the Series D Participants will forfeit their entire initial investment.

Based on the results through September 30, 2006, the Series D LLC would not be entitled to receive distributions or allocations of income had the Series D Program terminated on that date. However, since the ultimate determination of Series D OPPSs to be issued will not occur until December 31, 2008, and the number of Series D OPPSs is determinable only upon future events, the financial statements do not reflect any impact for these events.

Litigation and Legal Matters

United Dominion is subject to various legal proceedings and claims arising in the ordinary course of business. United Dominion cannot determine the ultimate liability with respect to such legal proceedings and claims at this time. United Dominion believes that such liability, to the extent not provided for through insurance or otherwise, will not have a material adverse effect on our financial condition, results of operations or cash flow.

9.    SUBSEQUENT EVENT

On October 12, 2006, United Dominion completed the sale of $250 million aggregate principal amount of convertible senior unsecured notes due 2011 with a coupon of 3.625%. The net proceeds from the offering of approximately $245 million were used for the repayment of indebtedness under our revolving credit facility, the cost of a capped call transaction, and for other general corporate purposes.

Prior to July 15, 2011, upon the occurrence of specified events, the notes will be convertible at the option of the holder into cash and, in certain circumstances, shares of United Dominion’s common stock at an initial conversion rate of 26.6326 shares per $1,000 principal amount of notes (which equates to an initial conversion price of approximately $37.55 per share). On or after July 15, 2011, the notes will be convertible at any time prior to the close of business on the second business day prior to maturity at the option of the holder into cash and, in certain circumstances, shares of United Dominion’s common stock at the above initial conversion rate. The initial conversion rate is subject to adjustment under certain circumstances.

The notes will not be redeemable at the option of United Dominion, except to preserve the status of United Dominion as a REIT. If United Dominion undergoes certain change of control transactions, note holders may require United Dominion to repurchase all or a portion of their notes at a purchase price equal to 100% of the principal amount of the notes to be repurchased plus unpaid interest (including additional interest, if any) accrued to, but not including, the repurchase date.

Concurrent with the issuance of the convertible senior unsecured notes, United Dominion entered into a capped call transaction with JPMorgan Chase Bank, National Association, London Branch. The capped call transaction has a low strike price of $37.548 and a high strike price of $43.806.

14




Item 2.                        MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 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 achievements of United Dominion Realty Trust, Inc. to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

The following factors, among others, could cause our future results to differ materially from those expressed in the forward-looking statements:

·       unfavorable changes in apartment market and economic conditions that could adversely affect occupancy levels and rental rates,

·       the failure of acquisitions to achieve anticipated results,

·       possible difficulty in selling apartment communities,

·       the timing and closing of planned dispositions under agreement,

·       competitive factors that may limit our ability to lease apartment homes or increase or maintain rents,

·       insufficient cash flow that could affect our debt financing and create refinancing risk,

·       failure to generate sufficient revenue, which could impair our debt service payments and distributions to stockholders,

·       development and construction risks that may impact our profitability,

·       potential damage from natural disasters, including hurricanes and other weather-related events, which could result in substantial costs to us,

·       risks from extraordinary losses for which we may not have insurance or adequate reserves,

·       uninsured losses due to insurance deductibles, self-insurance retention, uninsured claims or casualties, or losses in excess of applicable coverage,

·       delays in completing developments and lease-ups on schedule,

·       our failure to succeed in new markets,

·       changing interest rates, which could increase interest costs and affect the market price of our securities,

·       potential liability for environmental contamination, which could result in substantial costs to us,

·       the imposition of federal taxes if we fail to qualify as a REIT under the Internal Revenue Code in any taxable year,

15




·       our internal control over financial reporting may not be considered effective which could result in a loss of investor confidence in our financial reports, and in turn have an adverse effect on our stock price, and

·       changes in real estate tax laws, tax laws and other laws affecting our business.

A discussion of these and other factors affecting our business and prospects is set forth below in Part II, Item 1A. Risk Factors. We encourage investors to review these risks factors.

Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such statements included in this Report may not 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 us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. Any forward-looking statement speaks only as of the date on which it is made. Except to fulfill our obligations under the federal securities laws, we undertake no obligation to update any such statement to reflect events or circumstances after the date on which it is made.

Business Overview

We are a real estate investment trust, or REIT, that owns, acquires, renovates, develops, and manages apartment communities nationwide. We were formed in 1972 as a Virginia corporation. In June 2003, we changed our state of incorporation from Virginia to Maryland. Our subsidiaries include two operating partnerships, Heritage Communities L.P., a Delaware limited partnership, and United Dominion Realty, L.P., a Delaware limited partnership. Unless the context otherwise requires, all references in this Report to “we,” “us,” “our,” “the company,” or “United Dominion” refer collectively to United Dominion Realty Trust, Inc. and its subsidiaries.

16




At September 30, 2006, our portfolio included 243 communities with 70,604 apartment homes nationwide. The following table summarizes our market information by major geographic markets (includes real estate held for disposition, real estate under development, and land, but excludes commercial properties):

 

 

As of September 30, 2006

 

Three Months Ended
September 30, 2006

 

Nine Months Ended
September 30, 2006

 

 

 

Number of
Apartment
Communities

 

Number of
Apartment
Homes

 

Percentage
of Carrying
Value

 

Carrying
Value (in
thousands)

 

Average
Physical
Occupancy

 

Total Income 
per Occupied 
Home(a)

 

Average
Physical
Occupancy

 

Total Income 
per Occupied 
Home(a)

 

WESTERN REGION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Orange Co., CA

 

 

13

 

 

 

4,067

 

 

 

11.9

%

 

 

$

682,096

 

 

 

94.8

%

 

 

$

1,446

 

 

 

94.8

%

 

 

$

1,419

 

 

San Francisco, CA

 

 

10

 

 

 

2,425

 

 

 

7.8

%

 

 

443,860

 

 

 

97.0

%

 

 

1,561

 

 

 

97.0

%

 

 

1,525

 

 

Los Angeles, CA

 

 

6

 

 

 

1,210

 

 

 

3.4

%

 

 

192,967

 

 

 

92.8

%

 

 

1,401

 

 

 

93.7

%

 

 

1,396

 

 

Seattle, WA

 

 

8

 

 

 

1,984

 

 

 

2.9

%

 

 

168,736

 

 

 

95.7

%

 

 

922

 

 

 

95.8

%

 

 

894

 

 

San Diego, CA

 

 

5

 

 

 

1,123

 

 

 

2.8

%

 

 

162,324

 

 

 

93.7

%

 

 

1,250

 

 

 

94.0

%

 

 

1,108

 

 

Inland Empire, CA

 

 

4

 

 

 

1,282

 

 

 

2.7

%

 

 

155,317

 

 

 

91.3

%

 

 

1,045

 

 

 

91.9

%

 

 

1,030

 

 

Monterey Peninsula, CA

 

 

7

 

 

 

1,568

 

 

 

2.5

%

 

 

143,118

 

 

 

91.5

%

 

 

962

 

 

 

89.7

%

 

 

949

 

 

Portland, OR

 

 

5

 

 

 

1,365

 

 

 

1.5

%

 

 

84,992

 

 

 

94.7

%

 

 

766

 

 

 

94.5

%

 

 

739

 

 

Sacramento, CA

 

 

2

 

 

 

914

 

 

 

1.1

%

 

 

64,306

 

 

 

91.9

%

 

 

870

 

 

 

92.4

%

 

 

865

 

 

MID-ATLANTIC REGION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metropolitan DC

 

 

8

 

 

 

2,469

 

 

 

4.3

%

 

 

246,458

 

 

 

96.2

%

 

 

1,217

 

 

 

96.2

%

 

 

1,201

 

 

Raleigh, NC

 

 

11

 

 

 

3,663

 

 

 

4.0

%

 

 

227,664

 

 

 

92.7

%

 

 

698

 

 

 

93.0

%

 

 

691

 

 

Baltimore, MD

 

 

10

 

 

 

2,118

 

 

 

3.1

%

 

 

174,915

 

 

 

95.7

%

 

 

1,069

 

 

 

96.0

%

 

 

1,052

 

 

Richmond, VA

 

 

9

 

 

 

2,636

 

 

 

3.0

%

 

 

170,809

 

 

 

96.2

%

 

 

882

 

 

 

96.5

%

 

 

888

 

 

Wilmington, NC

 

 

6

 

 

 

1,868

 

 

 

1.8

%

 

 

102,395

 

 

 

95.9

%

 

 

763

 

 

 

95.0

%

 

 

752

 

 

Charlotte, NC

 

 

6

 

 

 

1,226

 

 

 

1.5

%

 

 

87,318

 

 

 

94.6

%

 

 

755

 

 

 

94.2

%

 

 

730

 

 

Norfolk, VA

 

 

6

 

 

 

1,438

 

 

 

1.3

%

 

 

73,379

 

 

 

95.8

%

 

 

915

 

 

 

95.7

%

 

 

909

 

 

Other Mid-Atlantic

 

 

13

 

 

 

2,817

 

 

 

2.5

%

 

 

143,791

 

 

 

95.4

%

 

 

868

 

 

 

95.3

%

 

 

855

 

 

SOUTHEASTERN REGION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tampa, FL

 

 

12

 

 

 

4,144

 

 

 

4.7

%

 

 

269,733

 

 

 

93.1

%

 

 

958

 

 

 

92.5

%

 

 

949

 

 

Orlando, FL

 

 

12

 

 

 

3,476

 

 

 

3.6

%

 

 

205,893

 

 

 

92.6

%

 

 

923

 

 

 

94.0

%

 

 

889

 

 

Nashville, TN

 

 

10

 

 

 

2,966

 

 

 

3.2

%

 

 

184,546

 

 

 

94.9

%

 

 

749

 

 

 

95.1

%

 

 

700

 

 

Jacksonville, FL

 

 

4

 

 

 

1,557

 

 

 

1.9

%

 

 

109,306

 

 

 

94.7

%

 

 

857

 

 

 

94.5

%

 

 

841

 

 

Atlanta, GA

 

 

6

 

 

 

1,426

 

 

 

1.5

%

 

 

83,177

 

 

 

94.9

%

 

 

709

 

 

 

95.4

%

 

 

695

 

 

Other Florida

 

 

8

 

 

 

2,401

 

 

 

2.8

%

 

 

160,152

 

 

 

89.3

%

 

 

931

 

 

 

92.7

%

 

 

916

 

 

Other Southeastern

 

 

7

 

 

 

1,752

 

 

 

1.4

%

 

 

78,402

 

 

 

96.1

%

 

 

646

 

 

 

95.2

%

 

 

639

 

 

SOUTHWESTERN REGION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Houston, TX

 

 

16

 

 

 

5,447

 

 

 

4.6

%

 

 

262,647

 

 

 

94.4

%

 

 

682

 

 

 

94.7

%

 

 

674

 

 

Dallas, TX

 

 

5

 

 

 

2,054

 

 

 

3.0

%

 

 

173,826

 

 

 

96.4

%

 

 

667

 

 

 

96.2

%

 

 

582

 

 

Arlington, TX

 

 

6

 

 

 

1,828

 

 

 

1.7

%

 

 

94,900

 

 

 

94.9

%

 

 

685

 

 

 

95.1

%

 

 

674

 

 

Phoenix, AZ

 

 

5

 

 

 

1,261

 

 

 

1.5

%

 

 

87,865

 

 

 

82.7

%

 

 

1,014

 

 

 

84.8

%

 

 

990

 

 

Austin, TX

 

 

5

 

 

 

1,425

 

 

 

1.5

%

 

 

86,325

 

 

 

97.1

%

 

 

734

 

 

 

96.5

%

 

 

721

 

 

Denver, CO

 

 

2

 

 

 

884

 

 

 

1.2

%

 

 

70,020

 

 

 

93.9

%

 

 

757

 

 

 

91.2

%

 

 

739

 

 

Other Southwestern

 

 

6

 

 

 

2,469

 

 

 

2.6

%

 

 

148,850

 

 

 

96.1

%

 

 

745

 

 

 

95.5

%

 

 

733

 

 

MIDWESTERN REGION