XML 62 R40.htm IDEA: XBRL DOCUMENT v2.4.0.6
Reportable Segments (UNITED DOMINION REALTY, L.P.)
 6 Months Ended
Jun. 30, 2012
Entity Information [Line Items]  
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS
GAAP guidance requires that segment disclosures present the measure(s) used by the chief operating decision maker to decide how to allocate resources and for purposes of assessing such segments’ performance. UDR’s chief operating decision maker is comprised of several members of its executive management team who use several generally accepted industry financial measures to assess the performance of the business for our reportable operating segments.
UDR owns and operates multifamily apartment communities that generate rental and other property related income through the leasing of apartment homes to a diverse base of tenants. The primary financial measures for UDR’s apartment communities are rental income and net operating income (“NOI”). Rental income represents gross market rent less adjustments for concessions, vacancy loss and bad debt. NOI is defined as rental income less direct property rental expenses. 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 2.75% of property revenue to cover the regional supervision and accounting costs related to consolidated property operations, and land rent. UDR’s chief operating decision maker utilizes NOI as the key measure of segment profit or loss.
UDR’s two reportable segments are same communities and non-mature/other communities:
•
Same communities represent those communities acquired, developed, and stabilized prior to April 1, 2011 and held as of June 30, 2012. A comparison of operating results from the prior year is meaningful as these communities were owned and had stabilized occupancy and operating expenses as of the beginning of the prior year, there is no plan to conduct substantial redevelopment activities, and the community is not held for disposition within the current year. A community is considered to have stabilized occupancy once it achieves 90% occupancy for at least three consecutive months.
•
Non-mature/other communities represent those communities that were acquired or developed in 2011 and 2012, sold properties, redevelopment properties, properties classified as real estate held for disposition, joint venture properties, and the non-apartment components of mixed use properties.
Management evaluates the performance of each of our apartment communities on a same community and non-mature/other basis, as well as individually and geographically. This is consistent with the aggregation criteria under GAAP as each of our apartment communities generally has similar economic characteristics, facilities, services, and tenants. Therefore, the Company’s reportable segments have been aggregated by geography in a manner identical to that which is provided to the chief operating decision maker.
All revenues are from external customers and no single tenant or related group of tenants contributed 10% or more of UDR’s total revenues during the three and six months ended June 30, 2012 and 2011.
The accounting policies applicable to the operating segments described above are the same as those described in Note 2, Significant Accounting Policies. The following table details rental income and NOI from continuing and discontinued operations for UDR’s reportable segments for the three and six months ended June 30, 2012 and 2011, and reconciles NOI to net income/(loss) attributable to UDR per the Consolidated Statements of Operations (dollars in thousands):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Reportable apartment home segment rental income
 
 
 
 
 
 
 
Same Communities
 
 
 
 
 
 
 
Western Region
$
54,740

 
$
51,450

 
$
108,031

 
$
101,627

Mid-Atlantic Region
39,063

 
37,482

 
77,572

 
74,343

Southeastern Region
27,364

 
26,081

 
54,377

 
51,889

Southwestern Region
10,855

 
10,019

 
21,435

 
19,808

Non-Mature communities/Other
58,668

 
52,186

 
118,618

 
100,053

Total segment and consolidated rental income
$
190,690

 
$
177,218

 
$
380,033

 
$
347,720

Reportable apartment home segment NOI
 
 
 
 
 
 
 
Same Communities
 
 
 
 
 
 
 
Western Region
$
38,130

 
$
35,569

 
$
75,214

 
$
69,661

Mid-Atlantic Region
27,086

 
25,964

 
53,765

 
51,030

Southeastern Region
17,764

 
16,280

 
35,358

 
32,516

Southwestern Region
6,229

 
5,766

 
12,495

 
10,995

Non-Mature communities/Other
39,702

 
34,491

 
80,193

 
64,665

Total segment and consolidated NOI
128,911

 
118,070

 
257,025

 
228,867

Reconciling items:
 
 
 
 
 
 
 
Non-property income
3,223

 
2,853

 
6,906

 
7,389

Property management
(5,244
)
 
(4,873
)
 
(10,451
)
 
(9,562
)
Other operating expenses
(1,434
)
 
(1,585
)
 
(2,817
)
 
(3,089
)
Depreciation and amortization
(84,474
)
 
(91,161
)
 
(178,721
)
 
(175,276
)
Interest
(41,542
)
 
(37,844
)
 
(76,287
)
 
(78,561
)
General and administrative
(13,738
)
 
(12,875
)
 
(23,117
)
 
(23,505
)
Other depreciation and amortization
(1,017
)
 
(986
)
 
(1,935
)
 
(2,029
)
Loss from unconsolidated entities
(2,412
)
 
(1,348
)
 
(5,103
)
 
(2,680
)
Tax benefit of taxable REIT subsidiary, net
2,027

 
—

 
24,903

 
—

Redeemable non-controlling interests in OP
(5,911
)
 
(221
)
 
(9,331
)
 
611

Non-controlling interests
(43
)
 
(37
)
 
(95
)
 
(88
)
Net gain on sale of depreciable property
172,006

 
44,658

 
252,531

 
44,699

Net income/(loss) attributable to UDR, Inc.
$
150,352

 
$
14,651

 
$
233,508

 
$
(13,224
)
The following table details the assets of UDR’s reportable segments as of June 30, 2012 and December 31, 2011 (dollars in thousands):
 
June 30,
2012
 
December 31,
2011
Reportable apartment home segment assets:
 
 
 
Same communities:
 
 
 
Western Region
$
2,274,841

 
$
2,260,859

Mid-Atlantic Region
1,346,780

 
1,340,679

Southeastern Region
862,330

 
852,572

Southwestern Region
411,699

 
409,751

Non-mature communities/Other
2,865,595

 
3,210,610

Total segment assets
7,761,245

 
8,074,471

Accumulated depreciation
(1,769,530
)
 
(1,831,727
)
Total segment assets — net book value
5,991,715

 
6,242,744

Reconciling items:
 
 
 
Cash and cash equivalents
184,112

 
12,503

Restricted cash
24,580

 
24,634

Deferred financing costs, net
28,579

 
30,068

Notes receivable
39,409

 
—

Investment in unconsolidated joint ventures
580,098

 
213,040

Other assets
124,128

 
198,365

Total consolidated assets
$
6,972,621

 
$
6,721,354


Capital expenditures related to our same communities totaled $15.1 million and $24.5 million and $10.3 million and $17.2 million for the three and six months ended June 30, 2012 and 2011, respectively. Capital expenditures related to our non-mature/other communities totaled $2.2 million and $5.1 million and $3.4 million and $5.4 million for the three and six months ended June 30, 2012 and 2011, respectively.
Markets included in the above geographic segments are as follows:
i.
Western — Orange County, San Francisco, Seattle, Monterey Peninsula, Los Angeles, San Diego, Inland Empire, Sacramento, and Portland
ii.
Mid-Atlantic — Boston, Metropolitan DC, Richmond, Baltimore, Norfolk, and Other Mid-Atlantic
iii.
Southeastern — Tampa, Orlando, Nashville, and Other Florida
iv.
Southwestern — Dallas and Austin
United Dominion Reality L.P. [Member]
  
Entity Information [Line Items]  
REPORTABLE SEGMENTS
REPORTABLE SEGMENTS
GAAP guidance, requires that segment disclosures present the measure(s) used by the chief operating decision maker to decide how to allocate resources and for purposes of assessing such segments’ performance. The Operating Partnership has the same chief operating decision maker as that of its parent, the General Partner. The chief operating decision maker consists of several members of UDR’s executive management team who use several generally accepted industry financial measures to assess the performance of the business for our reportable operating segments.
The Operating Partnership owns and operates multifamily apartment communities throughout the United States that generate rental and other property related income through the leasing of apartment homes to a diverse base of tenants. The primary financial measures of the Operating Partnership’s apartment communities are rental income and net operating income (“NOI”), and are included in the chief operating decision maker’s assessment of UDR’s performance on a consolidated basis. Rental income represents gross market rent less adjustments for concessions, vacancy loss and bad debt. NOI is defined as total revenues less direct property operating expenses. 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 2.75% of property revenue to cover the regional supervision and accounting costs related to consolidated property operations, and land rent. The chief operating decision maker of the General Partner utilizes NOI as the key measure of segment profit or loss.
The Operating Partnership’s two reportable segments are same communities and non-mature/other communities:

•
Same communities represent those communities acquired, developed, and stabilized prior to April 1, 2011 and held as of June 30, 2012. A comparison of operating results from the prior year is meaningful as these communities were owned and had stabilized occupancy and operating expenses as of the beginning of the prior year, there is no plan to conduct substantial redevelopment activities, and the community is not held for disposition within the current year. A community is considered to have stabilized occupancy once it achieves 90% occupancy for at least three consecutive months.

•
Non-mature/other communities represent those communities that were acquired or developed in 2011 or 2012, sold properties, redevelopment properties, and the non-apartment components of mixed use properties.
Management evaluates the performance of each of our apartment communities on a same community and non-mature/other basis, as well as individually and geographically. This is consistent with the aggregation criteria of Topic 280 as each of our apartment communities generally has similar economic characteristics, facilities, services, and tenants. Therefore, the Operating Partnership’s reportable segments have been aggregated by geography in a manner identical to that which is provided to the chief operating decision maker.
All revenues are from external customers and no single tenant or related group of tenants contributed 10% or more of the Operating Partnership’s total revenues during the three and six months ended June 30, 2012 and 2011.
The accounting policies applicable to the operating segments described above are the same as those described in Note 2, “Significant Accounting Policies.” The following table details rental income and NOI from continuing and discontinued operations for the Operating Partnership’s reportable segments for the three and six months ended June 30, 2012 and 2011, and reconciles NOI to net income attributable to OP unit holders per the consolidated statement of operations (dollars in thousands):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Reportable apartment home segment rental income
 
 
 
 
 
 
 
Same Communities
 
 
 
 
 
 
 
Western Region
$
43,749

 
$
41,157

 
$
86,275

 
$
81,190

Mid-Atlantic Region
16,594

 
15,946

 
32,930

 
31,620

Southeastern Region
10,079

 
9,578

 
20,063

 
19,075

Southwestern Region
4,957

 
4,510

 
9,741

 
8,962

Non-Mature communities/Other
26,029

 
24,942

 
51,667

 
45,115

Total segment and consolidated rental income
$
101,408

 
$
96,133

 
$
200,676

 
$
185,962

Reportable apartment home segment NOI
 
 
 
 
 
 
 
Same Communities
 
 
 
 
 
 
 
Western Region
$
30,877

 
$
28,807

 
$
60,695

 
$
56,264

Mid-Atlantic Region
11,411

 
11,063

 
22,582

 
21,761

Southeastern Region
6,592

 
5,907

 
13,169

 
11,924

Southwestern Region
2,942

 
2,871

 
5,928

 
5,391

Non-Mature communities/Other
19,328

 
17,276

 
38,314

 
30,096

Total segment and consolidated NOI
71,150

 
65,924

 
140,688

 
125,436

Reconciling items:
 
 
 
 
 
 
 
Property management
(2,789
)
 
(2,644
)
 
(5,519
)
 
(5,114
)
Other operating expenses
(4,095
)
 
(1,447
)
 
(8,144
)
 
(2,805
)
Depreciation and amortization
(46,733
)
 
(50,225
)
 
(98,410
)
 
(91,383
)
Interest
(12,891
)
 
(13,844
)
 
(25,861
)
 
(25,794
)
General and administrative
(4,505
)
 
(6,294
)
 
(9,425
)
 
(10,874
)
Net gain on the sale of real estate
51,266

 
16,038

 
51,182

 
16,038

Non-controlling interests
(231
)
 
(32
)
 
(265
)
 
(59
)
Net income attributable to OP unit holders
$
51,172

 
$
7,476

 
$
44,246

 
$
5,445










The following table details the assets of the Operating Partnership’s reportable segments as of June 30, 2012 and December 31, 2011 (dollars in thousands):
 
June 30,
2012
 
December 31, 2011
Reportable apartment home segment assets
 
 
 
Same Store Communities
 
 
 
Western Region
$
1,711,270

 
$
1,699,311

Mid-Atlantic Region
699,653

 
697,217

Southeastern Region
320,341

 
317,354

Southwestern Region
185,012

 
184,158

Non-Mature communities/Other
1,222,982

 
1,307,258

Total segment assets
4,139,258

 
4,205,298

Accumulated depreciation
(1,015,594
)
 
(976,358
)
Total segment assets - net book value
3,123,664

 
3,228,940

Reconciling items:
 
 
 
Cash and cash equivalents
1,174

 
704

Restricted cash
13,633

 
12,568

Deferred financing costs, net
6,714

 
8,184

Other assets
32,881

 
41,771

Total consolidated assets
$
3,178,066

 
$
3,292,167


Capital expenditures related to the Operating Partnership’s same communities totaled $8.5 million and $14.3 million and $6.0 million and $11.0 million for the three and six months ended June 30, 2012 and 2011, respectively. Capital expenditures related to the Operating Partnership’s non-mature/other communities totaled $873,000 and $1.6 million and $1.1 million and $1.8 million for the three and six months ended June 30, 2012 and 2011, respectively.
Markets included in the above geographic segments are as follows:
i.
Western — Orange County, San Francisco, Monterey Peninsula, Los Angeles, Seattle, Sacramento, Inland Empire, Portland, and San Diego
ii.
Mid-Atlantic — Metropolitan DC and Baltimore
iii.
Southeastern — Nashville, Tampa, and Other Florida
iv.
Southwestern — Dallas