UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) February 13, 1998
United Dominion Realty Trust, Inc.
(Exact name of registrant as specified in its charter)
Virginia 1-10524 54-0857512
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(State or other jurisdiction of (Commission (I.R.S. Employer
Incorporation) File Number) Identification No.)
10 South Sixth Street, Richmond, Virginia 23219-3802
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(Address of principal executive offices)
Registrant's telephone number, including area code (804) 780-2691
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NO CHANGE
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On February 2, 1998, United Dominion Realty Trust, Inc., the registrant, issued
a Press Release announcing its 1997 results of operations. The following is a
summary of United Dominion Realty Trust, Inc.'s results of operations:
For 1997, the Company reported rental revenues of $386.7 million, income from
property operations (rental income less rental expenses, excluding depreciation)
of $222.9 million and net income available to common shareholders of $52.8
million. For 1996, the Company had rental income of $242.1 million, income from
property operations of $137.3 million and net income available to common
shareholders of $28.3 million. On a per share basis, basic net income for 1997
was $.61 per share versus $.49 reported for 1996, and diluted net income was
$.60 per share for 1997 versus $.49 for 1996. These per share amounts are
reported in compliance with Statement of Financial Accounting Standards No. 128,
"Earnings Per Share". Net income for 1997 includes gains on sales of investments
aggregating $12.7 million ($.15 per share). During 1996 the Company reported
gains on sales aggregating $4.3 million ($.08 per share). The Company's 1997
sales are part of its continuing effort to upgrade its portfolio through the
disposition of older communities and other properties that no longer meet its
investment criteria.
For the fourth quarter of 1997, the Company reported rental income of $102.5
million, income from property operations of $60.0 million and net income
available to common shareholders of $9.4 million. For the fourth quarter 1996,
the Company reported rental income of $67.0 million, income from property
operations of $38.6 million, and net income available to common shareholders of
$8.0 million. On a per share basis, basic and diluted net income for 1997 were
both $.11 per share compared to 1996 when they were both $.14 per share.
John P. McCann, President and CEO, stated, "All year, our same community results
have been excellent. We enjoyed consistently good occupancy, solid rent growth,
gains in non-rental income, and only modest expense growth. As a result, mature
apartment net operating income growth was above our 4% target each quarter. We
were able to improve our operating margin a full 1% during the year. While there
was new construction during the year, there was also very good absorption.
Because we operate in so many major markets, some will always be very strong,
some will be balanced, and some will be weak. In 1997, many of our markets
remained strong throughout the year. At year-end, occupancy was up over year-end
1996, which is encouraging for 1998. We are continuing to sell communities that
no longer meet our objectives, primarily our older communities, and we are
replacing them with acquisitions and new developments that improve our prospects
for the future."
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A comparison of full year results between 1997 and 1996 communities is as
follows:
Mature Apartments Eastern Division - In the 31,519 completed apartments in the
127 stabilized communities owned by the Company since the beginning of 1996,
rental income increased $7.6 million, or 3.8%, while economic occupancy
decreased 0.4% to 92.6%. Rental expenses increased only 2.1% with the result
that the operating margin improved 0.7% to 57.3%.
Non Mature Apartments
Western Division - For the 11,817 completed apartments in 37 stabilized
communities west of the Mississippi acquired in connection with the Company's
merger with South West Property Trust Inc. (SWP) on December 31, 1996, rental
income increased $2.9 million or 4.2% and economic occupancy increased 0.1% to
92.9%. Rental expenses decreased 0.3% with the result that the operating margin
improved 2.0%. The decrease in rental expense is partially attributable to the
fact that as a consequence of the merger, operating expenses at the former SWP
properties were very high in the fourth quarter last year. The 1996 data used in
the comparison was obtained from SWP's accounting records.
Other Non Mature- For the 19,453 apartments in the 61 communities not owned
throughout 1996 and 1997 (plus the 2,570 apartment homes in the 12 communities
sold during 1997), excluding those stabilized properties acquired in the SWP
transaction, economic occupancy was 89.3% and the operating margin was 59.6%.
All Apartments - For the 58,038 weighted average number of apartment homes owned
during 1997, economic occupancy was 91.7% and the operating margin was 57.6%.
United Dominion Realty Trust, Inc. now owns 62,459 complete apartment homes in
225 communities in 15 states. This reflects the acquisition of five apartment
communities (2,076 homes) and the sale of five communities (2,406 homes)
subsequent to the end of the year.
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FINANCIAL INFORMATION
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<CAPTION>
Three Months Ended Year Ended
Operating Results December 31, December 31,
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In thousands, except per share amounts 1997 1996 1997 1996
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<S> <C>
Operating Data
Revenues:
Rental income $102,490 $66,993 $386,672 $242,112
Interest and other non-property income 256 510 1,123 1,707
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102,746 67,503 387,795 243,819
Expenses:
Rental expenses:
Utilities 6,571 4,925 24,861 17,735
Repairs and maintenance 13,900 10,818 54,607 40,665
Real estate taxes 7,947 4,650 30,961 17,348
Property management 3,049 1,383 12,203 5,575
Other rental expenses 11,048 6,659 41,099 23,510
Real estate depreciation 21,659 13,699 76,688 47,410
Interest 20,739 15,430 79,004 50,843
General and administrative 1,804 1,226 7,075 5,418
Other depreciation and amortization 745 382 2,084 1,299
Impairment loss on real estate owned 0 0 1,400 290
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87,462 59,172 329,982 210,093
Income before gains (losses) on sales
of investments, minority interest of
unitholders in operating partnership
and extraordinary items 15,284 8,331 57,813 33,726
Gains (losses) on sales of investments (18) 2,170 12,664 4,346
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Income before minority interest of
unitholders in operating partnership
and extraordinary items 15,266 10,501 70,477 38,072
Minority interest of unitholders in
operating partnership (166) (32) (278) (58)
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Income before extraordinary item 15,100 10,469 70,199 38,014
Extraordinary item-early extinguishment
of debt (50) (23) (50) (23)
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Net income 15,050 10,446 70,149 37,991
Dividends to preferred shareholders (5,653) (2,428) (17,345) (9,713)
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Net income available to common shareholders $9,397 $8,018 $52,804 $28,278
============ ================= ================= ================
Weighted average number of common
shares outstanding 88,756 58,983 87,145 57,482
Common distributions declared $22,509 $14,202 $88,587 $55,493
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Other Data
Cash Flow Data
Cash provided by operating activities 26,812 17,464 137,903 90,064
Cash used in investing activities (62,095) (19,036) (345,666) (161,572)
Cash provided by financing activities 30,373 7,221 194,784 82,056
Funds from Operations*
Income before gains (losses) on sales of
investments, minority interest of
unitholders in operating partnership and
extraordinary $15,284 $8,331 $57,813 $33,726
Adjustments:
Real estate depreciation 21,659 13,699 76,688 47,410
Dividends to preferred shareholders (5,653) (2,428) (17,345) (9,713)
Impairment loss on real estate owned 0 0 1,400 290
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Funds from operations $31,290 $19,602 $118,556 $71,713
============ ================= ================= ================
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Per Share Data:
Basic net income available to common
shareholders $0.11 $0.14 $0.61 $0.49
Diluted net income available to
common shareholders $0.11 $0.14 $0.60 $0.49
Common distributions declared $0.2525 $0.24 $1.01 $0.96
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Mature Apartment Information
Eastern Division:
Average monthly rent $580 $560 $572 $551
Physical occupancy 93.6% 93.2% 93.3% 93.7%
Economic occupancy 93.0% 92.4% 92.6% 93.0%
Expense ratio 41.8% 42.7% 42.7% 43.4%
Western Division: **
Average monthly rent $545 $527 $538 $516
Physical occupancy 94.4% 92.7% 93.7% 93.5%
Economic occupancy 93.5% 92.0% 92.9% 92.8%
Expense ratio 43.7% 50.9% 44.5% 46.5%
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Apartment Homes Owned
Total apartment homes owned at
end of period 62,789 55,664 62,789 55,664
Weighted average number of apartment homes
owned during the period 61,137 41,352 58,038 37,481
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<CAPTION>
Balance Sheet Data December 31,
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1997 1996
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<S> <C>
Real estate owned, at cost*** $2,472,537 $2,085,023
Notes payable-secured 417,325 376,560
Notes payable-unsecured 738,901 668,275
Shareholders' equity 1,058,357 850,379
Number of common shares outstanding 89,168 81,983
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* Funds from operations is defined as income before gains
(losses) on the sales of investments, minority interest of
unitholders in operating partnership and extraordinary items
(computed in accordance with generally accepted accounting
principles) plus real estate depreciation, less preferred
dividends and after adjustment for significant non-recurring
items, if any.
** Data for 1996 obtained from accounting records of South West
Property Trust Inc. This data is for the 11,817 stablized
apartment communities acquired in the South West Property Trust
Inc. Merger on December 31, 1996.
*** Includes real estate held for investment, real estate held
for disposition and real estate under development.
Mature Apartment Information By Major Market
Average Rental
Physical Occupancy Rent Rate
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Market Apartments(1) 4Q97 4Q96 4Q97 Growth(2)
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Dallas, TX 7,223 95.5% 94.3% $558 5.1%
Columbia, SC 3,218 93.5% 90.9% 501 1.9%
Richmond, VA 3,000 95.3% 93.1% 565 4.4%
Raleigh, NC 2,440 96.0% 98.8% 626 5.8%
Tampa, FL 2,351 93.9% 93.5% 581 5.0%
Orlando, FL 2,088 94.8% 93.5% 584 5.1%
Charlotte, NC 1,795 95.6% 94.2% 596 4.1%
Baltimore, MD 1,746 92.7% 94.3% 663 3.2%
Eastern NC 1,730 92.7% 97.5% 548 4.7%
Hampton Roads, VA 1,436 93.6% 89.7% 547 2.2%
Nashville, TN 1,344 93.1% 92.8% 593 2.9%
Greenville, SC 1,330 91.4% 88.6% 511 2.1%
Washington DC 1,011 87.1% 87.4% 665 2.7%
Ft. Lauderdale, FL 960 93.7% 93.7% 799 2.7%
Memphis, TN 935 92.9% 93.8% 523 4.1%
San Antonio, TX 925 92.5% 89.0% 512 0.9%
Atlanta, GA 906 94.1% 91.9% 601 1.8%
Austin, TX 517 92.7% 86.8% 533 0.7%
Houston, TX 514 95.8% 90.5% 474 2.4%
Greensboro, NC 447 81.3% 84.5% 485 3.7%
Phoenix, AZ 392 87.0% 95.0% 530 3.2%
Jacksonville, FL 352 90.9% 88.6% 589 1.5%
Notes:
(1) Mature apartments for 1997 are those communities that were acquired,
developed and stabilized prior to January 1996, including those of South
West Property Trust Inc. acquired on December 31, 1996, and held throughout
all four quarters of 1996 and 1997.
(2) The change in gross potential rent from fourth quarter 1996 to fourth
quarter 1997.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf by the undersigned
hereunto duly authorized.
UNITED DOMINION REALTY TRUST, INC.
Date: February 13, 1998 /s/ James Dolphin
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James Dolphin, Executive Vice President
and Chief Financial Officer
Date February 13, 1998 /s/ Jerry A. Davis
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Jerry Davis, Vice President
and Corporate Controller
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