UDR Announces Second Quarter Results and Raises Full-Year 2024 Guidance Ranges

UDR, Inc. (the “Company”) (NYSE: UDR), announced today its second quarter 2024 results. Net Income, Funds from Operations (“FFO”), FFO as Adjusted (“FFOA”), and Adjusted FFO (“AFFO”) per diluted share for the quarter ended June 30, 2024 are detailed below.

Quarter Ended June 30

Metric

2Q 2024 Actual

2Q 2024 Guidance

2Q 2023 Actual

$ Change vs. Prior Year Period

% Change vs. Prior Year Period

Net Income per diluted share

$0.08

$0.13 to $0.15

$1.05

($0.97

)

(92

FFO per diluted share

$0.60

$0.60 to $0.62

$0.63

($0.03

)

FFOA per diluted share

$0.62

$0.60 to $0.62

$0.61

$0.01

AFFO per diluted share

$0.55

$0.53 to $0.55

$0.55

$0.00

Same-Store (“SS”) results, with concessions reflected on a straight-line basis, for the second quarter 2024 versus the second quarter 2023 and the first quarter 2024 are summarized below.

SS Growth / (Decline)

Year-Over-Year (“YOY”): 2Q 2024 vs. 2Q 2023

Sequential: 2Q 2024 vs. 1Q 2024

Revenue

2.5

0.6

Expense

3.7

(1.5

Net Operating Income (“NOI”)

2.0

1.6

During the second quarter, the Company completed the development of 101 N. Meridian, a $134.0 million, 330-home apartment community in Tampa, FL.
Subsequent to quarter-end, the Company,
- Funded $25.9 million and is under contract to fund an additional $9.1 million as part of a preferred equity DCP portfolio investment at a 10.75 percent rate of return in four stabilized communities in Portland, OR as part of a recapitalization.
- Received a $17.2 million partial paydown of its preferred equity DCP investment in Vernon Boulevard, a 534-home apartment community recently developed in Queens, NY.
- Earned the distinction of being a 2024 National Top Workplaces winner in the Real Estate Industry.

“Strong employment growth and relative affordability compared to other forms of housing translated into near-record-high absorption for the industry in the first half of the year, leading to results that met the high-end of our FFOA per share expectations,” said Tom Toomey, UDR’s Chairman and CEO. “Supported by more robust pricing power than anticipated, the strength of our operating platform, and an innovative culture that continues to generate value-creating initiatives, we are raising full-year 2024 FFOA per diluted share and same-store growth guidance expectations to reflect our strong positioning in the marketplace.”

Outlook(1)

As shown in the table below, the Company has established the following guidance ranges for the third quarter of 2024 and has updated its previously provided full-year 2024 Net Income per diluted share, FFO per diluted share, FFOA per diluted share, AFFO per diluted share, and Same-Store growth guidance ranges.

3Q 2024 Outlook

2Q 2024 Actual

Updated Full-Year 2024 Outlook

Prior Full-Year 2024 Outlook

Full-Year 2024 Midpoint (Change)

Net Income per diluted share

$0.08 to $0.10

$0.08

$0.35 to $0.43

$0.33 to $0.45

$0.39 (unch)

FFO per diluted share

$0.60 to $0.62

$0.60

$2.38 to $2.46

$2.36 to $2.48

$2.42 (unch)

FFOA per diluted share

$0.61 to $0.63

$0.62

$2.42 to $2.50

$2.38 to $2.50

$2.46 (+$0.02)

AFFO per diluted share

$0.54 to $0.56

$0.55

$2.16 to $2.24

$2.12 to $2.24

$2.20 (+$0.02)

YOY Growth: concessions reflected on a straight-line basis:

SS Revenue

N/A

2.5%

1.00% to 3.00%

0.00% to 3.00%

2.00% (+0.50%)

SS Expense

N/A

3.7%

4.00% to 6.00%

4.25% to 6.25%

5.00% (-0.25%)

SS NOI

N/A

2.0%

(0.25)% to 1.75%

(1.75)% to 1.75%

0.75% (+0.75%)

(1)

Additional assumptions for the Company’s third quarter and full-year 2024 outlook can be found on Attachment 13 of the Company’s related quarterly Supplemental Financial Information (“Supplement”). A reconciliation of GAAP Net Income per share to FFO per share, FFOA per share, and AFFO per share can be found on Attachment 14(D) of the Company’s related quarterly Supplement. Non-GAAP financial measures and other terms, as used in this earnings release, are defined and further explained on Attachments 14(A) through 14(D), “Definitions and Reconciliations,” of the Company’s related quarterly Supplement.

Operating Results

In the second quarter, total revenue increased by $10.8 million YOY, or 2.7 percent, to $415.3 million. This increase was primarily attributable to growth in revenue from Same-Store communities.

“Occupancy, effective new lease rate growth, resident retention, and other income growth all exceeded our second quarter expectations, leading to strong Same-Store revenue results,” said Mike Lacy, UDR’s Senior Vice President of Operations. “As we begin the third quarter, market rents are following a typical seasonal trajectory and have stabilized following sequential growth through mid-June. We remain optimistic on our forward growth prospects as concessions are stable, resident retention continues to improve, other income growth is robust in the high-single-digit range, and effective renewal lease rate growth for July and August has increased to the 4.5 percent to 5.0 percent range, helping to offset some seasonal slowing in effective new lease rate growth.”

Summary of First Quarter 2024, Second Quarter 2024, and July 2024 Residential Operating Trends(1)

As of July 29, 2024

Same-Store Metric

1Q 2024 as reported

2Q 2024 as reported

Jul 2024

Weighted Average Physical Occupancy

97.1%

96.8%

96.2% to 96.3%

Effective Blended Lease Rate Growth(2)

0.8%

2.4%

2.3% to 2.5%

Effective New Lease Rate Growth

(2.5)%

0.5%

(0.9)% to (0.6)%

Effective Renewal Lease Rate Growth

3.8%

3.9%

4.9% to 5.0%

(1)

Metrics are as of July 29, 2024 for the Company’s Same-Store residential portfolio and are subject to change.

(2)

The Company defines Effective Blended Lease Rate Growth as the combined proportional growth as a result of (a) Effective New Lease Rate Growth and (b) Effective Renewal Lease Rate Growth. Management considers Effective Blended Lease Rate Growth a useful metric for investors as it assesses combined proportional market-level new and in-place demand trends. Please refer to the “Definitions and Reconciliations” section of the Company’s related quarterly Supplement for additional details.

In the tables below, the Company has presented YOY, sequential, and year-to-date (“YTD”) Same-Store results by region, with concessions accounted for on a straight-line basis.

Summary of Same-Store Results in the Second Quarter 2024 versus the Second Quarter 2023

Region

Revenue Growth / (Decline)

Expense Growth / (Decline)

NOI Growth / (Decline)

% of Same-Store Portfolio(1)

Physical Occupancy(2)

YOY Change in Occupancy

West

2.6%

1.9%

2.9%

31.0%

96.6%

0.2%

Mid-Atlantic

3.8%

3.5%

4.0%

20.6%

97.1%

0.2%

Northeast

3.8%

5.1%

3.2%

18.5%

97.2%

0.1%

Southeast

0.8%

1.8%

0.4%

14.1%

96.6%

0.3%

Southwest

0.2%

5.6%

(2.8)%

9.2%

96.7%

0.4%

Other Markets

1.9%

8.1%

(0.5)%

6.6%

96.8%

0.2%

Total

2.5%

3.7%

2.0%

100.0%

96.8%

0.2%

(1)

Based on 2Q 2024 Same-Store NOI. For definitions of terms, please refer to the “Definitions and Reconciliations” section of the Company’s related quarterly Supplement.

(2)

Weighted average Same-Store physical occupancy for the quarter.

Summary of Same-Store Results in the Second Quarter 2024 versus the First Quarter 2024

Region

Revenue Growth / (Decline)

Expense Growth / (Decline)

NOI Growth / (Decline)

% of Same-Store Portfolio(1)

Physical Occupancy(2)

Sequential Change in Occupancy

West

0.1%

(1.5)%

0.7%

31.0%

96.6%

(0.5)%

Mid-Atlantic

0.8%

0.6%

0.9%

20.6%

97.1%

(0.2)%

Northeast

0.9%

(5.2)%

4.4%

18.5%

97.2%

(0.1)%

Southeast

0.7%

(0.7)%

1.4%

14.1%

96.6%

(0.3)%

Southwest

0.7%

0.4%

0.9%

9.2%

96.7%

0.1%

Other Markets

0.9%

(0.6)%

1.5%

6.6%

96.8%

(0.3)%

Total

0.6%

(1.5%)

1.6%

100.0%

96.8%

(0.2)%

(1)

Based on 2Q 2024 Same-Store NOI. For definitions of terms, please refer to the “Definitions and Reconciliations” section of the Company’s related quarterly Supplement.

(2)

Weighted average Same-Store physical occupancy for the quarter.

Summary of Same-Store Results for YTD 2024 versus YTD 2023

Region

Revenue Growth / (Decline)

Expense Growth / (Decline)

NOI Growth / (Decline)

% of Same-Store Portfolio(1)

Physical Occupancy(2)

YTD YOY Change in Occupancy

West

3.0%

5.3%

2.2%

31.4%

96.9%

0.6%

Mid-Atlantic

4.1%

6.1%

3.2%

20.9%

97.2%

0.4%

Northeast

3.9%

7.8%

2.0%

18.4%

97.3%

0.2%

Southeast

1.5%

2.8%

0.9%

14.2%

96.7%

0.5%

Southwest

0.2%

1.5%

(0.6)%

8.8%

96.7%

0.3%

Other Markets

2.2%

9.9%

(0.6)%

6.3%

97.0%

0.2%

Total

2.8%

5.4%

1.7%

100.0%

97.0%

0.5%

(1)

Based on YTD 2024 Same-Store NOI. For definitions of terms, please refer to the “Definitions and Reconciliations” section of the Company’s related quarterly Supplement.

(2)

Weighted average Same-Store physical occupancy for YTD 2024.

Development Activity

During the quarter, the Company completed the development of 101 N. Meridian, a $134.0 million, 330-home apartment community in Tampa, FL. At the end of the second quarter, the Company had no projects in its active development pipeline.

Developer Capital Program (“DCP”) Portfolio Activity

At the end of the second quarter, the Company had funded $483.8 million, or 99.8 percent, of its $484.7 million of DCP commitments. These investments carry a contractual weighted average 10.0 percent rate of return and have a weighted average remaining term of 2.4 years.

Subsequent to quarter-end, the Company,

Received a $17.2 million partial paydown of its preferred equity DCP investment in Vernon Boulevard, a 534-home apartment community recently developed in Queens, NY. In conjunction with the paydown, the Company’s remaining $50.0 million preferred equity investment will earn a contractual 11.0 percent rate of return, which was adjusted lower from a previous 13.0 percent rate of return to reflect the reduced risk in UDR’s investment.
Funded $25.9 million and is under contract to fund an additional $9.1 million as part of a preferred equity DCP portfolio investment in four stabilized communities as part of a recapitalization, which is summarized below.

Community / Type

Location (MSA)

Apartment Homes

Investment Type

Commitment ($ millions)

Last Dollar LTV(1)

Rate of Return

Stabilized Portfolio / Recapitalization

Portland, OR

818

Preferred Equity

$35.0

75%

10.75%

(1)

The capital structure for this portfolio includes, in order of seniority, senior loans that represent approximately 57.5 percent of property value, UDR’s preferred equity investment that represents the next approximately 17.5 percent of property value, and sponsor equity representing the remaining approximately 25 percent of property value, with these percentages based on the transaction price.

Capital Markets and Balance Sheet Activity

The Company’s total indebtedness as of June 30, 2024 was $5.8 billion with only $290.3 million, or 5.4 percent of total consolidated debt, maturing through 2025, including principal amortization and excluding amounts on the Company’s commercial paper program and working capital credit facility. As of June 30, 2024, the Company had $946.2 million in liquidity through a combination of cash and undrawn capacity on its credit facilities. Please see Attachment 13 of the Company’s related quarterly Supplement for additional details on projected capital sources and uses.

In the table below, the Company has presented select balance sheet metrics for the quarter ended June 30, 2024 and the comparable prior year period.

Quarter Ended June 30

Balance Sheet Metric

2Q 2024

2Q 2023

Change

Weighted Average Interest Rate

3.38%

3.21%

0.17%

Weighted Average Years to Maturity(1)

5.2

6.3

(1.1)

Consolidated Fixed Charge Coverage Ratio

5.0x

0.0x

Consolidated Debt as a percentage of Total Assets

32.7%

31.9%

0.8%

Consolidated Net Debt-to-EBITDAre(2)

5.7x

5.5x

0.2x

(1)

If the Company’s commercial paper balance was refinanced using its line of credit, the weighted average years to maturity would have been 5.3 years with and without extensions for 2Q 2024 and 6.4 years with and without extensions for 2Q 2023.

(2)

Defined as EBITDAre - adjusted for non-recurring items. A reconciliation of GAAP Net Income per share to EBITDAre - adjusted for non-recurring items and GAAP Total Debt to Net Debt can be found on Attachment 4(C) of the Company’s related quarterly Supplement.

Corporate Responsibility

As previously announced, subsequent to quarter-end, the Company was named as a 2024 Top Workplaces winner in the Real Estate Industry. This distinction reflects the Company’s ongoing commitment to fostering an innovative culture and engaging associate experience.

Dividend

As previously announced, the Company’s Board of Directors declared a regular quarterly dividend on its common stock for the second quarter 2024 in the amount of $0.425 per share. The dividend will be paid in cash on July 31, 2024 to UDR common shareholders of record as of July 10, 2024. The second quarter 2024 dividend will represent the 207th consecutive quarterly dividend paid by the Company on its common stock.

Supplemental Financial Information

The Company offers Supplemental Financial Information that provides details on the financial position and operating results of the Company, which is available on the Investor Relations section of the Company's website at ir.udr.com.

Attachment 14(A)

Definitions and Reconciliations June 30, 2024 (Unaudited)

Acquired Communities: The Company defines Acquired Communities as those communities acquired by the Company, other than development and redevelopment activity, that did not achieve stabilization as of the most recent quarter.

Adjusted Funds from Operations ("AFFO") attributable to common stockholders and unitholders: The Company defines AFFO as FFO as Adjusted attributable to common stockholders and unitholders less recurring capital expenditures on consolidated communities that are necessary to help preserve the value of and maintain functionality at our communities.

Management considers AFFO a useful supplemental performance metric for investors as it is more indicative of the Company's operational performance than FFO or FFO as Adjusted. AFFO is not intended to represent cash flow or liquidity for the period, and is only intended to provide an additional measure of our operating performance. The Company believes that net income/(loss) attributable to common stockholders is the most directly comparable GAAP financial measure to AFFO. Management believes that AFFO is a widely recognized measure of the operations of REITs, and presenting AFFO enables investors to assess our performance in comparison to other REITs. However, other REITs may use different methodologies for calculating AFFO and, accordingly, our AFFO may not always be comparable to AFFO calculated by other REITs. AFFO should not be considered as an alternative to net income/(loss) (determined in accordance with GAAP) as an indication of financial performance, or as an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions. A reconciliation from net income/(loss) attributable to common stockholders to AFFO is provided on Attachment 2.

Consolidated Fixed Charge Coverage Ratio - adjusted for non-recurring items: The Company defines Consolidated Fixed Charge Coverage Ratio - adjusted for non-recurring items as Consolidated Interest Coverage Ratio - adjusted for non-recurring items divided by total consolidated interest, excluding the impact of costs associated with debt extinguishment, plus preferred dividends.

Management considers Consolidated Fixed Charge Coverage Ratio - adjusted for non-recurring items a useful metric for investors as it provides ratings agencies, investors and lenders with a widely-used measure of the Company’s ability to service its consolidated debt obligations as well as compare leverage against that of its peer REITs. A reconciliation of the components that comprise Consolidated Fixed Charge Coverage Ratio - adjusted for non-recurring items is provided on Attachment 4(C) of the Company's quarterly supplemental disclosure.

Consolidated Interest Coverage Ratio - adjusted for non-recurring items: The Company defines Consolidated Interest Coverage Ratio - adjusted for non-recurring items as Consolidated EBITDAre – adjusted for non-recurring items divided by total consolidated interest, excluding the impact of costs associated with debt extinguishment.

Management considers Consolidated Interest Coverage Ratio - adjusted for non-recurring items a useful metric for investors as it provides ratings agencies, investors and lenders with a widely-used measure of the Company’s ability to service its consolidated debt obligations as well as compare leverage against that of its peer REITs. A reconciliation of the components that comprise Consolidated Interest Coverage Ratio - adjusted for non-recurring items is provided on Attachment 4(C) of the Company's quarterly supplemental disclosure.

Consolidated Net Debt-to-EBITDAre - adjusted for non-recurring items: The Company defines Consolidated Net Debt-to-EBITDAre - adjusted for non-recurring items as total consolidated debt net of cash and cash equivalents divided by annualized Consolidated EBITDAre - adjusted for non-recurring items. Consolidated EBITDAre - adjusted for non-recurring items is defined as EBITDAre excluding the impact of income/(loss) from unconsolidated entities, adjustments to reflect the Company’s share of EBITDAre of unconsolidated joint ventures and other non-recurring items including, but not limited to casualty-related charges/(recoveries), net of wholly owned communities.

Management considers Consolidated Net Debt-to-EBITDAre - adjusted for non-recurring items a useful metric for investors as it provides ratings agencies, investors and lenders with a widely-used measure of the Company’s ability to service its consolidated debt obligations as well as compare leverage against that of its peer REITs. A reconciliation between net income/(loss) and Consolidated EBITDAre - adjusted for non-recurring items is provided on Attachment 4(C) of the Company's quarterly supplemental disclosure.

Controllable Expenses: The Company refers to property operating and maintenance expenses as Controllable Expenses.

Development Communities: The Company defines Development Communities as those communities recently developed or under development by the Company, that are currently majority owned by the Company and have not achieved stabilization as of the most recent quarter.

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre): The Company defines EBITDAre as net income/(loss) (computed in accordance with GAAP), plus interest expense, including costs associated with debt extinguishment, plus real estate depreciation and amortization, plus other depreciation and amortization, plus (minus) income tax provision/(benefit), net, (minus) plus net gain/(loss) on the sale of depreciable real estate owned, plus impairment write-downs of depreciable real estate, plus the adjustments to reflect the Company’s share of EBITDAre of unconsolidated joint ventures. The Company computes EBITDAre in accordance with standards established by the National Association of Real Estate Investment Trusts, or Nareit, which may not be comparable to EBITDAre reported by other REITs that do not compute EBITDAre in accordance with the Nareit definition, or that interpret the Nareit definition differently than the Company does. The White Paper on EBITDAre was approved by the Board of Governors of Nareit in September 2017.

Management considers EBITDAre a useful metric for investors as it provides an additional indicator of the Company’s ability to incur and service debt, and enables investors to assess our performance against that of its peer REITs. EBITDAre should be considered along with, but not as an alternative to, net income and cash flow as a measure of the Company’s activities in accordance with GAAP. EBITDAre does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of funds available to fund our cash needs. A reconciliation between net income/(loss) and EBITDAre is provided on Attachment 4(C) of the Company's quarterly supplemental disclosure.

Effective Blended Lease Rate Growth: The Company defines Effective Blended Lease Rate Growth as the combined proportional growth as a result of Effective New Lease Rate Growth and Effective Renewal Lease Rate Growth. Management considers Effective Blended Lease Rate Growth a useful metric for investors as it assesses combined proportional market-level, new and in-place demand trends.

Effective New Lease Rate Growth: The Company defines Effective New Lease Rate Growth as the increase in gross potential rent realized less concessions on a straight-line basis for the new lease term (current effective rent) versus prior resident effective rent for the prior lease term on new leases commenced during the current quarter. Management considers Effective New Lease Rate Growth a useful metric for investors as it assesses market-level new demand trends.

Effective Renewal Lease Rate Growth: The Company defines Effective Renewal Lease Rate Growth as the increase in gross potential rent realized less concessions on a straight-line basis for the new lease term (current effective rent) versus prior effective rent for the prior lease term on renewed leases commenced during the current quarter. Management considers Effective Renewal Lease Rate Growth a useful metric for investors as it assesses market-level, in-place demand trends.

Estimated Quarter of Completion: The Company defines Estimated Quarter of Completion of a development or redevelopment project as the date on which construction is expected to be completed, but it does not represent the date of stabilization.

Attachment 14(B)

Definitions and Reconciliations June 30, 2024 (Unaudited)

Funds from Operations as Adjusted ("FFO as Adjusted") attributable to common stockholders and unitholders: The Company defines FFO as Adjusted attributable to common stockholders and unitholders as FFO excluding the impact of other non-comparable items including, but not limited to, acquisition-related costs, prepayment costs/benefits associated with early debt retirement, impairment write-downs or gains and losses on sales of real estate or other assets incidental to the main business of the Company and income taxes directly associated with those gains and losses, casualty-related expenses and recoveries, severance costs and legal and other costs.

Management believes that FFO as Adjusted is useful supplemental information regarding our operating performance as it provides a consistent comparison of our operating performance across time periods and allows investors to more easily compare our operating results with other REITs. FFO as Adjusted is not intended to represent cash flow or liquidity for the period, and is only intended to provide an additional measure of our operating performance. The Company believes that net income/(loss) attributable to common stockholders is the most directly comparable GAAP financial measure to FFO as Adjusted. However, other REITs may use different methodologies for calculating FFO as Adjusted or similar FFO measures and, accordingly, our FFO as Adjusted may not always be comparable to FFO as Adjusted or similar FFO measures calculated by other REITs. FFO as Adjusted should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of financial performance, or as an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity. A reconciliation from net income attributable to common stockholders to FFO as Adjusted is provided on Attachment 2.

Funds from Operations ("FFO") attributable to common stockholders and unitholders: The Company defines FFO attributable to common stockholders and unitholders as net income/(loss) attributable to common stockholders (computed in accordance with GAAP), excluding impairment write-downs of depreciable real estate related to the main business of the Company or of investments in non-consolidated investees that are directly attributable to decreases in the fair value of depreciable real estate held by the investee, gains and losses from sales of depreciable real estate related to the main business of the Company and income taxes directly associated with those gains and losses, plus real estate depreciation and amortization, and after adjustments for noncontrolling interests, and the Company’s share of unconsolidated partnerships and joint ventures. This definition conforms with the National Association of Real Estate Investment Trust's definition issued in April 2002 and restated in November 2018. In the computation of diluted FFO, if OP Units, DownREIT Units, unvested restricted stock, unvested LTIP Units, stock options, and the shares of Series E Cumulative Convertible Preferred Stock are dilutive, they are included in the diluted share count.

Management considers FFO a useful metric for investors as the Company uses FFO in evaluating property acquisitions and its operating performance and believes that FFO should be considered along with, but not as an alternative to, net income and cash flow as a measure of the Company's activities in accordance with GAAP. FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of funds available to fund our cash needs. A reconciliation from net income/(loss) attributable to common stockholders to FFO is provided on Attachment 2.

Held For Disposition Communities: The Company defines Held for Disposition Communities as those communities that were held for sale as of the end of the most recent quarter.

Joint Venture Reconciliation at UDR's weighted average ownership interest: In thousands

2Q 2024

YTD 2024

Income/(loss) from unconsolidated entities

4,046

13,131

Management fee

861

1,699

Interest expense

4,466

8,938

Depreciation

13,768

27,461

General and administrative

192

349

Developer Capital Program (excludes loans)

(8,436

)

(16,599

)

Other (income)/expense

)

(48

)

Realized and unrealized (gain)/loss on real estate technology investments, net of tax

189

(5,457

)

Total Joint Venture NOI at UDR's Ownership Interest

15,083

29,474

Net Operating Income (“NOI”): The Company defines NOI as rental income less direct property rental expenses. Rental income represents gross market rent and other revenues less adjustments for concessions, vacancy loss and bad debt. Rental expenses include real estate taxes, insurance, personnel, utilities, repairs and maintenance, administrative and marketing. Excluded from NOI is property management expense, which is calculated as 3.25% of property revenue, and land rent. Property management expense covers costs directly related to consolidated property operations, inclusive of corporate management, regional supervision, accounting and other costs.

Management considers NOI a useful metric for investors as it is a more meaningful representation of a community’s continuing operating performance than net income as it is prior to corporate-level expense allocations, general and administrative costs, capital structure and depreciation and amortization and is a widely used input, along with capitalization rates, in the determination of real estate valuations. A reconciliation from net income/(loss) attributable to UDR, Inc. to NOI is provided below.

In thousands

2Q 2024

1Q 2024

4Q 2023

3Q 2023

2Q 2023

Net income/(loss) attributable to UDR, Inc.

28,883

43,149

32,986

32,858

347,545

Property management

13,433

13,379

13,354

13,271

13,101

Other operating expenses

7,593

6,828

8,320

4,611

4,259

Real estate depreciation and amortization

170,488

169,858

170,643

167,551

168,925

Interest expense

47,811

48,062

47,347

44,664

45,113

Casualty-related charges/(recoveries), net

998

6,278

(224

)

(1,928

)

1,134

General and administrative

20,136

17,810

20,838

15,159

16,452

Tax provision/(benefit), net

386

337

428

1,351

(Income)/loss from unconsolidated entities

(4,046

)

(9,085

)

20,219

(5,508

)

(9,697

)

Interest income and other (income)/expense, net

(6,498

)

(5,865

)

(9,371

)

3,069

(10,447

)

Joint venture management and other fees

(1,992

)

(1,965

)

(2,379

)

(1,772

)

(1,450

)

Other depreciation and amortization

4,679

4,316

4,397

3,692

3,681

(Gain)/loss on sale of real estate owned

(16,867

)

(25,308

)

(325,884

)

Net income/(loss) attributable to noncontrolling interests

2,130

3,161

2,975

2,561

22,638

Total consolidated NOI

284,001

279,396

283,890

278,656

276,721

Attachment 14(C)

Definitions and Reconciliations June 30, 2024 (Unaudited)

NOI Enhancing Capital Expenditures ("Cap Ex"): The Company defines NOI Enhancing Capital Expenditures as expenditures that result in increased income generation or decreased expense growth over time.

Management considers NOI Enhancing Capital Expenditures a useful metric for investors as it quantifies the amount of capital expenditures that are expected to grow, not just maintain, revenues or to decrease expenses.

Non-Mature Communities: The Company defines Non-Mature Communities as those communities that have not met the criteria to be included in same-store communities.

Non-Residential / Other: The Company defines Non-Residential / Other as non-apartment components of mixed-use properties, land held, properties being prepared for redevelopment and properties where a material change in home count has occurred.

Other Markets: The Company defines Other Markets as the accumulation of individual markets where it operates less than 1,000 Same-Store homes. Management considers Other Markets a useful metric as the operating results for the individual markets are not representative of the fundamentals for those markets as a whole.

Physical Occupancy: The Company defines Physical Occupancy as the number of occupied homes divided by the total homes available at a community.

QTD Same-Store Communities: The Company defines QTD Same-Store Communities as those communities Stabilized for five full consecutive quarters. These communities were owned and had stabilized operating expenses as of the beginning of the quarter in the prior year, were not in process of any substantial redevelopment activities, and were not held for disposition.

Recurring Capital Expenditures: The Company defines Recurring Capital Expenditures as expenditures that are necessary to help preserve the value of and maintain functionality at its communities.

Redevelopment Communities: The Company generally defines Redevelopment Communities as those communities where substantial redevelopment is in progress. Based upon the level of material impact the redevelopment has on the community (operations, occupancy levels, and future rental rates), the community may or may not maintain Stabilization. As such, for each redevelopment, the Company assesses whether the community remains in Same-Store.

Sold Communities: The Company defines Sold Communities as those communities that were disposed of prior to the end of the most recent quarter.

Stabilization/Stabilized: The Company defines Stabilization/Stabilized as when a community’s occupancy reaches 90% or above for at least three consecutive months.

Stabilized, Non-Mature Communities: The Company defines Stabilized, Non-Mature Communities as those communities that have reached Stabilization but are not yet in the same-store portfolio.

Total Revenue per Occupied Home: The Company defines Total Revenue per Occupied Home as rental and other revenues with concessions reported on a straight-line basis, divided by the product of occupancy and the number of apartment homes.

Management considers Total Revenue per Occupied Home a useful metric for investors as it serves as a proxy for portfolio quality, both geographic and physical.

TRS: The Company’s taxable REIT subsidiaries (“TRS”) focus on making investments and providing services that are otherwise not allowed to be made or provided by a REIT.

YTD Same-Store Communities: The Company defines YTD Same-Store Communities as those communities Stabilized for two full consecutive calendar years. These communities were owned and had stabilized operating expenses as of the beginning of the prior year, were not in process of any substantial redevelopment activities, and were not held for disposition.

Conference Call and Webcast Information

UDR will host a webcast and conference call at 12:00 p.m. Eastern Time on July 31, 2024, to discuss second quarter 2024 results as well as high-level views for 2024. The webcast will be available on the Investor Relations section of the Company’s website at ir.udr.com. To listen to a live broadcast, access the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software. To participate in the teleconference dial 877-423-9813 for domestic and 201-689-8573 for international. A passcode is not necessary.

Given a high volume of conference calls occurring during this time of year, delays are anticipated when connecting to the live call. As a result, stakeholders and interested parties are encouraged to utilize the Company’s webcast link for its earnings results discussion.

A replay of the conference call will be available through August 31, 2024, by dialing 844-512-2921 for domestic and 412-317-6671 for international and entering the confirmation number, 13747589, when prompted for the passcode. A replay of the call will also be available on the Investor Relations section of the Company’s website at ir.udr.com.

Full Text of the Earnings Report and Supplemental Data

The full text of the earnings report and related quarterly Supplement will be available on the Investor Relations section of the Company’s website at ir.udr.com.

Forward-Looking Statements

Certain statements made in this press release may constitute “forward-looking statements.” Words such as “expects,” “intends,” “believes,” “anticipates,” “plans,” “likely,” “will,” “seeks,” “outlook,” “guidance,” “estimates” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in a forward-looking statement, due to a number of factors, which include, but are not limited to, general market and economic conditions, unfavorable changes in the apartment market and economic conditions that could adversely affect occupancy levels and rental rates, the impact of inflation/deflation on rental rates and property operating expenses, the availability of capital and the stability of the capital markets, rising interest rates, the impact of competition and competitive pricing, acquisitions, developments and redevelopments not achieving anticipated results, delays in completing developments, redevelopments and lease-ups on schedule or at expected rent and occupancy levels, changes in job growth, home affordability and demand/supply ratio for multifamily housing, development and construction risks that may impact profitability, risks that joint ventures with third parties and DCP investments do not perform as expected, the failure of automation or technology to help grow net operating income, and other risk factors discussed in documents filed by the Company with the SEC from time to time, including the Company's Annual Report on Form 10-K and the Company's Quarterly Reports on Form 10-Q. Actual results may differ materially from those described in the forward-looking statements. These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release, and the Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in the Company's expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required under the U.S. securities laws.

About UDR, Inc.

UDR, Inc. (NYSE: UDR), an S&P 500 company, is a leading multifamily real estate investment trust with a demonstrated performance history of delivering superior and dependable returns by successfully managing, buying, selling, developing and redeveloping attractive real estate communities in targeted U.S. markets. As of June 30, 2024, UDR owned or had an ownership position in 60,126 apartment homes. For over 52 years, UDR has delivered long-term value to shareholders, the best standard of service to Residents and the highest quality experience for Associates.

Attachment 1

Consolidated Statements of Operations (Unaudited) (1) Three Months Ended Six Months Ended June 30, June 30, In thousands, except per share amounts

2024

2023

2024

2023

REVENUES: Rental income (2)

413,328

403,098

824,997

801,405

Joint venture management and other fees

1,992

1,450

3,957

2,692

Total revenues

415,320

404,548

828,954

804,097

OPERATING EXPENSES: Property operating and maintenance

70,443

68,861

143,921

133,695

Real estate taxes and insurance

58,884

57,516

117,679

115,486

Property management

13,433

13,101

26,812

26,046

Other operating expenses

7,593

4,259

14,421

7,291

Real estate depreciation and amortization

170,488

168,925

340,346

338,225

General and administrative

20,136

16,452

37,946

33,932

Casualty-related charges/(recoveries), net

998

1,134

7,276

5,290

Other depreciation and amortization

4,679

3,681

8,995

7,330

Total operating expenses

346,654

333,929

697,396

667,295

Gain/(loss) on sale of real estate owned

325,884

16,867

325,885

Operating income

68,666

396,503

148,425

462,687

Income/(loss) from unconsolidated entities (2)

4,046

9,697

13,131

19,404

Interest expense

(47,811

)

(45,113

)

(95,873

)

(88,855

)

Interest income and other income/(expense), net

6,498

10,447

12,363

11,457

Income/(loss) before income taxes

31,399

371,534

78,046

404,693

Tax (provision)/benefit, net

(386

)

(1,351

)

(723

)

(1,585

)

Net Income/(loss)

31,013

370,183

77,323

403,108

Net (income)/loss attributable to redeemable noncontrolling interests in the OP and DownREIT Partnership

(2,013

)

(22,630

)

(5,162

)

(24,583

)

Net (income)/loss attributable to noncontrolling interests

(117

)

(129

)

(16

)

Net income/(loss) attributable to UDR, Inc.

28,883

347,545

72,032

378,509

Distributions to preferred stockholders - Series E (Convertible)

(1,210

)

(1,222

)

(2,441

)

(2,405

)

Net income/(loss) attributable to common stockholders

27,673

346,323

69,591

376,104

Income/(loss) per weighted average common share - basic:

0.08

1.05

0.21

1.14

Income/(loss) per weighted average common share - diluted:

0.08

1.05

0.21

1.14

Common distributions declared per share

0.425

0.42

0.850

0.84

Weighted average number of common shares outstanding - basic

329,056

328,957

328,940

328,871

Weighted average number of common shares outstanding - diluted

329,572

332,480

329,334

332,412

(1)

See Attachment 14 for definitions and other terms.

(2)

As of June 30, 2024, UDR's residential accounts receivable balance, net of its reserve, was $6.2 million, including its share from unconsolidated joint ventures. The unreserved amount is based on probability of collection.

Attachment 2

Funds From Operations (Unaudited) (1) Three Months Ended Six Months Ended June 30, June 30, In thousands, except per share and unit amounts

2024

2023

2024

2023

Net income/(loss) attributable to common stockholders

27,673

346,323

69,591

376,104

Real estate depreciation and amortization

170,488

168,925

340,346

338,225

Noncontrolling interests

2,130

22,638

5,291

24,599

Real estate depreciation and amortization on unconsolidated joint ventures

14,228

8,695

28,382

16,180

Net (gain)/loss on the sale of depreciable real estate owned, net of tax

(324,769

)

(16,867

)

(324,770

)

Funds from operations ("FFO") attributable to common stockholders and unitholders, basic

214,519

221,812

426,743

430,338

Distributions to preferred stockholders - Series E (Convertible) (2)

1,210

1,222

2,441

2,405

FFO attributable to common stockholders and unitholders, diluted

215,729

223,034

429,184

432,743

FFO per weighted average common share and unit, basic

0.61

0.63

1.21

1.23

FFO per weighted average common share and unit, diluted

0.60

0.63

1.20

1.22

Weighted average number of common shares and OP/DownREIT Units outstanding, basic

353,380

350,207

353,311

350,157

Weighted average number of common shares, OP/DownREIT Units, and common stock equivalents outstanding, diluted

356,747

353,730

356,584

353,698

Impact of adjustments to FFO: Variable upside participation on DCP, net

(204

)

(204

)

Legal and other costs

2,914

5,444

(1,258

)

Realized and unrealized (gain)/loss on real estate technology investments, net of tax

372

(7,847

)

(4,616

)

(8,110

)

Severance costs

1,111

1,532

Casualty-related charges/(recoveries)

998

1,134

7,276

5,290

Total impact of adjustments to FFO

5,395

(6,917

)

9,636

(4,282

)

FFO as Adjusted attributable to common stockholders and unitholders, diluted

221,124

216,117

438,820

428,461

FFO as Adjusted per weighted average common share and unit, diluted

0.62

0.61

1.23

1.21

Recurring capital expenditures, inclusive of unconsolidated joint ventures

(26,290

)

(21,345

)

(43,598

)

(33,644

)

AFFO attributable to common stockholders and unitholders, diluted

194,834

194,772

395,222

394,817

AFFO per weighted average common share and unit, diluted

0.55

0.55

1.11

1.12

(1)

See Attachment 14 for definitions and other terms.

(2)

Series E cumulative convertible preferred shares are dilutive for purposes of calculating FFO per share for the three and six months ended June 30, 2024 and June 30, 2023. Consequently, distributions to Series E cumulative convertible preferred stockholders are added to FFO and the weighted average number of Series E cumulative convertible preferred shares are included in the denominator when calculating FFO per common share and unit, diluted.

Attachment 3

Consolidated Balance Sheets (Unaudited) (1) June 30, December 31, In thousands, except share and per share amounts

2024

2023

ASSETS Real estate owned: Real estate held for investment

16,070,591

15,757,456

Less: accumulated depreciation

(6,572,743

)

(6,242,686

)

Real estate held for investment, net

9,497,848

9,514,770

Real estate under development (net of accumulated depreciation of $0 and $184)

160,220

Real estate held for disposition (net of accumulated depreciation of $0 and $24,960)

81,039

Total real estate owned, net of accumulated depreciation

9,497,848

9,756,029

Cash and cash equivalents

2,770

2,922

Restricted cash

31,616

31,944

Notes receivable, net

241,842

228,825

Investment in and advances to unconsolidated joint ventures, net

958,943

952,934

Operating lease right-of-use assets

188,828

190,619

Other assets

195,958

209,969

Total assets

11,117,805

11,373,242

LIABILITIES AND EQUITY Liabilities: Secured debt

1,235,748

1,277,713

Unsecured debt

4,540,388

4,520,996

Operating lease liabilities

184,076

185,836

Real estate taxes payable

44,333

47,107

Accrued interest payable

47,289

47,710

Security deposits and prepaid rent

49,168

50,528

Distributions payable

151,518

149,600

Accounts payable, accrued expenses, and other liabilities

120,784

141,311

Total liabilities

6,373,304

6,420,801

Redeemable noncontrolling interests in the OP and DownREIT Partnership

1,021,782

961,087

Equity: Preferred stock, no par value; 50,000,000 shares authorized at June 30, 2024 and December 31, 2023: 2,600,678 shares of 8.00% Series E Cumulative Convertible issued and outstanding (2,686,308 shares at December 31, 2023)

43,192

44,614

11,647,322 shares of Series F outstanding (11,867,730 shares at December 31, 2023)

Common stock, $0.01 par value; 450,000,000 shares authorized at June 30, 2024 and December 31, 2023: 329,539,663 shares issued and outstanding (329,014,512 shares at December 31, 2023)

3,295

3,290

Additional paid-in capital

7,508,794

7,493,217

Distributions in excess of net income

(3,840,808

)

(3,554,892

)

Accumulated other comprehensive income/(loss), net

7,910

4,914

Total stockholders' equity

3,722,384

3,991,144

Noncontrolling interests

335

210

Total equity

3,722,719

3,991,354

Total liabilities and equity

11,117,805

11,373,242

(1)

See Attachment 14 for definitions and other terms.

Attachment 4(C)

Selected Financial Information

(Dollars in Thousands)

(Unaudited)(1)

Quarter Ended Coverage Ratios June 30, 2024 Net income/(loss)

31,013

Adjustments: Interest expense, including debt extinguishment and other associated costs

47,811

Real estate depreciation and amortization

170,488

Other depreciation and amortization

4,679

Tax provision/(benefit), net

386

Adjustments to reflect the Company's share of EBITDAre of unconsolidated joint ventures

18,694

EBITDAre

273,071

Casualty-related charges/(recoveries), net

998

Legal and other costs

2,914

Severance costs

1,111

Realized and unrealized (gain)/loss on real estate technology investments

183

(Income)/loss from unconsolidated entities

(4,046

)

Adjustments to reflect the Company's share of EBITDAre of unconsolidated joint ventures

(18,694

)

Management fee expense on unconsolidated joint ventures

(861

)

Consolidated EBITDAre - adjusted for non-recurring items

254,676

Annualized consolidated EBITDAre - adjusted for non-recurring items

1,018,704

Interest expense, including debt extinguishment and other associated costs

47,811

Capitalized interest expense

2,417

Total interest

50,228

Preferred dividends

1,210

Total debt

5,776,136

Cash

(2,770

)

Net debt

5,773,366

Consolidated Interest Coverage Ratio - adjusted for non-recurring items 5.1x Consolidated Fixed Charge Coverage Ratio - adjusted for non-recurring items 5.0x Consolidated Net Debt-to-EBITDAre - adjusted for non-recurring items 5.7x Debt Covenant Overview Unsecured Line of Credit Covenants (2) Required Actual Compliance Maximum Leverage Ratio ≤60.0%

31.3% (2)

Yes Minimum Fixed Charge Coverage Ratio ≥1.5x

4.8x

Yes Maximum Secured Debt Ratio ≤40.0%

10.2%

Yes Minimum Unencumbered Pool Leverage Ratio ≥150.0%

381.9%

Yes Senior Unsecured Note Covenants (3) Required Actual Compliance Debt as a percentage of Total Assets ≤65.0%

32.7%(3)

Yes Consolidated Income Available for Debt Service to Annual Service Charge ≥1.5x

5.5x

Yes Secured Debt as a percentage of Total Assets ≤40.0%

7.0%

Yes Total Unencumbered Assets to Unsecured Debt ≥150.0%

320.2%

Yes Securities Ratings Debt Outlook Commercial Paper Moody's Investors Service Baa1 Stable P-2 S&P Global Ratings BBB+ Stable A-2 Gross % of Number of 2Q 2024 NOI (1) Carrying Value Total Gross Asset Summary Homes ($000s) % of NOI ($000s) Carrying Value Unencumbered assets

46,421

$ 245,245

86.4%

$ 13,907,962

86.5%

Encumbered assets

9,278

38,756

13.6%

2,162,629

13.5%

55,699

$ 284,001

100.0%

$ 16,070,591

100.0%

(1)

See Attachment 14 for definitions and other terms.

(2)

As defined in our credit agreement dated September 15, 2021, as amended.

(3)

As defined in our indenture dated November 1, 1995 as amended, supplemented or modified from time to time.

Attachment 14(D)

Definitions and Reconciliations June 30, 2024 (Unaudited)

All guidance is based on current expectations of future economic conditions and the judgment of the Company's management team. The following reconciles from GAAP Net income/(loss) per share for full-year 2024 and third quarter of 2024 to forecasted FFO, FFO as Adjusted and AFFO per share and unit:

Full-Year 2024 Low High Forecasted net income per diluted share

0.35

0.43

Conversion from GAAP share count

(0.02

)

(0.02

)

Net gain on the sale of depreciable real estate owned

(0.05

)

(0.05