Debt (UNITED DOMINION REALTY, L.P.)

3 Months Ended

Mar. 31, 2013

SECURED AND UNSECURED DEBT

The following is a summary of our secured and unsecured debt at March 31, 2013 and December 31, 2012 (amounts in thousands):



	Principal Outstanding				For the Three Months Ended March 31, 2013
					Weighted Average Interest Rate		Weighted Average Years to Maturity	Number of Communities Encumbered
	March 31, 2013		December 31, 2012
	March 31, 2013		December 31, 2012
Secured Debt:
Fixed Rate Debt
Mortgage notes payable (a)	$	453,076	$	455,533	5.41	%	3.3	8
Fannie Mae credit facilities (c)	629,063		631,078		5.11	%	5.6	23
Total fixed rate secured debt	1,082,139		1,086,611		5.24	%	4.6	31
Variable Rate Debt
Mortgage notes payable (b)	37,415		37,415		1.09	%	0.3	2
Tax-exempt secured notes payable (d)	94,700		94,700		0.87	%	9.9	2
Fannie Mae credit facilities (c)	211,409		211,409		2.06	%	5.3	7
Total variable rate secured debt	343,524		343,524		1.63	%	6.1	11
Total Secured Debt	1,425,663		1,430,135		4.37	%	5.0	42

Unsecured Debt:
Commercial Banks
Borrowings outstanding under an unsecured credit facility due October 2015 (e), (f)	170,000		76,000		1.15	%	2.6
Senior Unsecured Notes
4.63% Medium-Term Notes due January 2022 (net of discount of $3,151 and $3,241) (f)	396,849		396,759		4.63	%	8.8
1.64% Term Notes due January 2016 (f)	35,000		35,000		1.64	%	2.8
2.68% Term Notes due January 2016 (f)	65,000		65,000		2.68	%	2.8
6.05% Medium-Term Notes due June 2013	122,500		122,500		6.05	%	0.2
5.13% Medium-Term Notes due January 2014	184,000		184,000		5.13	%	0.8
5.50% Medium-Term Notes due April 2014 (net of discount of $71 and $89)	128,429		128,411		5.50	%	1.0
5.25% Medium-Term Notes due January 2015 (net of discount of $230 and $262)	324,945		324,913		5.25	%	1.8
5.25% Medium-Term Notes due January 2016	83,260		83,260		5.25	%	2.8
2.90% Term Notes due January 2016 (f)	250,000		250,000		2.90	%	2.8
8.50% Debentures due September 2024	15,644		15,644		8.50	%	11.5
4.25% Medium-Term Notes due June 2018 (net of discount of $2,215 and $2,322) (f)	297,785		297,678		4.25	%	5.2
Other	32		33		N/A		N/A
Total Unsecured Debt	2,073,444		1,979,198		4.31	%	3.8
Total Debt	$	3,499,107	$	3,409,333	4.34	%	4.2

Our secured debt instruments generally feature either monthly interest and principal or monthly interest-only payments with balloon payments due at maturity. For purposes of classification of the above table, variable rate debt with a derivative financial instrument designated as a cash flow hedge is deemed as fixed rate debt due to the Company having effectively established a fixed interest rate for the underlying debt instrument. Secured debt encumbers $2.3 billion or 28.4% of UDR’s total real estate owned based upon gross book value ($5.9 billion or 71.6% of UDR’s real estate owned based on gross book value is unencumbered) as of March 31, 2013.

(a) At March 31, 2013, fixed rate mortgage notes payable are generally due in monthly installments of principal and interest and mature at various dates from December 2014 through May 2019 and carry interest rates ranging from 3.43% to 5.94%.

The Company will from time to time acquire properties subject to fixed rate debt instruments. In those situations, management will record the secured debt at its estimated fair value and amortize any difference between the fair value and par to interest expense over the life of the underlying debt instrument. During the three months ended March 31, 2013 and 2012, the Company had $1.3 million and $1.1 million of a reduction to interest expense based on amortization on the fair market adjustment of debt assumed in acquisition of properties, respectively. The unamortized fair market adjustment was a net premium of $15.6 million and $16.9 million at March 31, 2013 and December 31, 2012, respectively.

(b) Variable rate mortgage notes payable are generally due in monthly installments of principal and interest and mature July 2013. The mortgage notes payable are based on LIBOR plus specified basis points, which translate into an interest rate of 1.09% at March 31, 2013.

(c) UDR has three secured credit facilities with Fannie Mae with an aggregate commitment of $929.3 million at March 31, 2013. The Fannie Mae credit facilities are for an initial term of 10 years (maturing at various dates from May 2017 through December 2019) and bear interest at floating and fixed rates. At March 31, 2013, we have $629.1 million of the outstanding balance fixed at a weighted average interest rate of 5.11% and the remaining balance of $211.4 million on these facilities is currently at a weighted average variable interest rate of 2.06%.

Further information related to these credit facilities is as follows (dollars in thousands):



	March 31, 2013			December 31, 2012
Borrowings outstanding	$	840,472		$	842,487
Weighted average borrowings during the period ended	840,921			903,817
Maximum daily borrowings during the period ended	841,494			1,054,735
Weighted average interest rate during the period ended	4.4		%	4.3		%
Weighted average interest rate at the end of the period	4.3		%	4.4		%

(d) The variable rate mortgage notes payable that secure tax-exempt housing bond issues mature on August 2019 and March 2032, respectively. Interest on these notes is payable in monthly installments. The variable rate mortgage notes have interest rates of 0.86% and 0.90%, respectively, as of March 31, 2013.

(e) The Company has a $900 million unsecured revolving credit facility. The unsecured credit facility has an initial term of four years and includes a one-year extension option. It contains an accordion feature that allows the Company to increase the facility to $1.35 billion. The credit facility carries an interest rate equal to LIBOR plus a spread of 122.5 basis points and a facility fee of 22.5 basis points.

The following is a summary of short-term bank borrowings under UDR’s bank credit facility at March 31, 2013 and December 31, 2012 (dollars in thousands):



	March 31, 2013			December 31, 2012
Total revolving credit facility	$	900,000		$	900,000
Borrowings outstanding at end of period (1)	170,000			76,000
Weighted average daily borrowings during the period ended	118,268			167,038
Maximum daily borrowings during the period ended	184,500			788,000
Weighted average interest rate during the period ended	1.2		%	1.5		%
Interest rate at end of the period	1.2		%	1.4		%

(1) Excludes $2.5 million and $3.9 million of letters of credit at March 31, 2013 and December 31, 2012, respectively.

(f) The Operating Partnership is a guarantor at March 31, 2013 and December 31, 2012.

The aggregate maturities, including amortizing principal payments of secured debt, of total debt for the next five calender years subsequent to March 31, 2013 are as follows (dollars in thousands):



Year	Total Fixed Secured Debt		Total Variable Secured Debt		Total Secured Debt		Total Unsecured Debt (a)		Total Debt
2013	$	8,928	$	37,415	$	46,343	$	121,776	$	168,119
2014	46,369		—		46,369		311,577		357,946
2015	197,229		—		197,229		494,389		691,618
2016	138,449		—		138,449		432,484		570,933
2017	178,378		65,000		243,378		—		243,378
Thereafter	512,786		241,109		753,895		713,218		1,467,113
Total	$	1,082,139	$	343,524	$	1,425,663	$	2,073,444	$	3,499,107

(a) With the exception of the 1.64% Term Notes due January 2016 and revolving credit facility which carry a variable interest rate, all unsecured debt carries fixed interest rates.

We were in compliance with the covenants of our debt instruments at March 31, 2013.

United Dominion Reality L.P. [Member]

Entity Information [Line Items]

DEBT

Our secured debt instruments generally feature either monthly interest and principal or monthly interest-only payments with balloon payments due at maturity. For purposes of classification in the following table, variable rate debt with a derivative financial instrument designated as a cash flow hedge is deemed as fixed rate debt due to the Operating Partnership having effectively established the fixed interest rate for the underlying debt instrument. Secured debt consists of the following as of March 31, 2013 and December 31, 2012 (dollars in thousands):



	Principal Outstanding				Three Months Ended March 31,
	March 31, 2013		December 31, 2012		Weighted Average Interest Rate		Weighted Average Years to Maturity	Number of Communities Encumbered
Fixed Rate Debt
Mortgage notes payable	$	392,953	$	394,999	5.41	%	3.3	5
Fannie Mae credit facilities	370,434		370,638		4.90	%	6.0	10
Total fixed rate secured debt	763,387		765,637		5.16	%	4.6	15
Variable Rate Debt
Mortgage notes payable	37,415		37,415		1.09	%	0.3	2
Tax-exempt secured note payable	27,000		27,000		0.90	%	19.0	1
Fannie Mae credit facilities	137,187		137,187		2.52	%	5.8	5
Total variable rate secured debt	201,602		201,602		2.04	%	6.5	8
Total secured debt	$	964,989	$	967,239	4.51	%	5.0	23

As of March 31, 2013, the General Partner had secured credit facilities with Fannie Mae with an aggregate commitment of $929.3 million with $840.5 million outstanding. The Fannie Mae credit facilities are for an initial term of 10 years and bear interest at floating and fixed rates. At March 31, 2013, $629.1 million of the outstanding balance was fixed at a weighted average interest rate of 5.11% and the remaining balance of $211.4 million on these facilities had a weighted average variable interest rate of 2.06%. There was a total of $507.6 million of these credit facilities allocated to the Operating Partnership at March 31, 2013 based on the ownership of the assets securing the debt. Following is information related to the credit facilities allocated to the Operating Partnership:



	March 31, 2013			December 31, 2012
	(dollar amounts in thousands)
Borrowings outstanding	$	507,621		$	507,825
Weighted average borrowings during the period ended	507,893			544,793
Maximum daily borrowings during the period	508,239			635,762
Weighted average interest rate during the period ended	4.4		%	4.3		%
Interest rate at the end of the period	4.3		%	4.4		%

The Operating Partnership may from time to time acquire properties subject to fixed rate debt instruments. In those situations, management will record the secured debt at its estimated fair value and amortize any difference between the fair value and par to interest expense over the life of the underlying debt instrument. The unamortized fair value adjustment of the fixed rate debt instruments on the Operating Partnership’s properties was a net premium of $12.8 million and $13.8 million at March 31, 2013 and December 31, 2012, respectively.

Fixed Rate Debt

Mortgage notes payable. Fixed rate mortgage notes payable are generally due in monthly installments of principal and interest and mature at various dates from December 2015 through May 2019 and carry interest rates ranging from 3.43% to 5.94%.

Secured credit facilities. At March 31, 2013, the General Partner had borrowings against its fixed rate facilities of $629.1 million of which $370.4 million was allocated to the Operating Partnership based on the ownership of the assets securing the debt. As of March 31, 2013, the fixed rate Fannie Mae credit facilities allocated to the Operating Partnership had a weighted average fixed interest rate of 4.90%.

Variable Rate Debt

Mortgage notes payable. Variable rate mortgage notes payable are generally due in monthly installments of principal and interest and mature July 2013. Interest on the variable rate mortgage notes is based on LIBOR plus some basis points, which translated into an interest rate of 1.09% at March 31, 2013.

Tax-exempt secured note payable. The variable rate mortgage note payable that secures tax-exempt housing bond issues matures March 2032. Interest on this note is payable in monthly installments. The mortgage note payable had an interest rate of 0.90% as of March 31, 2013.

Secured credit facilities. At March 31, 2013, the General Partner had borrowings against its variable rate facilities of $211.4 million of which $137.2 million was allocated to the Operating Partnership based on the ownership of the assets securing the debt. As of March 31, 2013, the variable rate borrowings under the Fannie Mae credit facilities allocated to the Operating Partnership had a weighted average floating interest rate of 2.52%.

The aggregate maturities of the Operating Partnership’s secured debt due during each of the next five calendar years subsequent to March 31, 2013 are as follows (dollars in thousands):



	Fixed				Variable
	Mortgage Notes		Credit Facilities		Mortgage Notes		Tax Exempt Notes Payable		Credit Facilities		Total
2013	$	5,336	$	242	$	37,415	$	—	$	—	$	42,993
2014	7,391		344		—		—		—		7,735
2015	192,534		364		—		—		—		192,898
2016	134,082		382		—		—		—		134,464
2017	1,449		15,684		—		—		6,566		23,699
Thereafter	52,161		353,418		—		27,000		130,621		563,200
Total	$	392,953	$	370,434	$	37,415	$	27,000	$	137,187	$	964,989

Guarantor on Unsecured Debt

The Operating Partnership is a guarantor on the General Partner’s unsecured revolving credit facility with an aggregate borrowing capacity of $900 million, a $250 million term loan due January 2016, a $100 million term loan due January 2016, $300 million of medium-term notes due June 2018, and $400 million of medium-term notes due January 2022. As of March 31, 2013 and December 31, 2012, there were $170.0 million and $76.0 million

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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