Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ 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 (UDR, Inc.) 333-156002-01 (United Dominion Realty, L.P.) UDR, Inc. United Dominion Realty, L.P. (Exact name of re ...

Financial Data and Key Metrics Changes - The company's second quarter FFO as adjusted per share was $0.51, a decline of only $0.01 or less than 2% year-over-year [40] - Cash collections as a percentage of billed revenue were strong at 97.5%, with no deterioration in month-over-month trajectory [12] - The balance sheet remains healthy with nearly $1 billion in available liquidity [14] Business Line Data and Key Metrics Changes - Combined same-store NOI declined by 4% year-over-year, driven by a revenue decline of 2.1% and an expense increase of 2.1% [16] - Blended lease rate growth remained positive during the quarter, despite challenges [22] - The company experienced a bad debt reserve totaling $4.5 million, negatively impacting results by 170 basis points [21] Market Data and Key Metrics Changes - Suburban communities generally outperformed urban communities in terms of occupancy and lease rate growth [23] - Physical occupancy in urban portfolios averaged 96.9%, compared to 94.6% in urban communities [23] - Certain urban areas experienced pressure due to corporate lease exposure and short-term mobility trends [24] Company Strategy and Development Direction - The company is focused on its next-generation operating platform, which is expected to enhance operational efficiency and resident engagement [10][31] - The strategy includes utilizing concessions rather than significant rental rate cuts to maximize both near-term and long-term results [53] - The company remains highly selective in capital deployment, focusing on both current yield and future value creation [50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage through uncertain times, citing a sound strategy and strong balance sheet [14] - The company is not reinstating full-year 2020 guidance due to ongoing uncertainty related to the pandemic [41] - Management noted that while occupancy has seen some pressure, they expect to maintain a strong rent roll for future periods [53] Other Important Information - The company has made nearly $2 billion in community acquisitions since the start of 2019, which continue to perform well [27] - The dividend remains secure and is well covered by cash flow from operations, with a payout ratio of 77% [47] Q&A Session Summary Question: How does the company think about the pricing strategy between offering concessions or holding rates? - Management stated they strategically elected to utilize concessions rather than take significant rental rate cuts to maximize both near-term and long-term results [53] Question: How does the company view its investment model in light of recent changes in MSAs? - Management emphasized that diversification remains a core part of the portfolio strategy, and they continue to utilize both quantitative and qualitative analyses in decision-making [57] Question: What is the company's approach to bad debt accounting? - Management clarified that they enhanced their approach to account for collectability in the current regulatory environment, establishing a prudent bad debt reserve [66] Question: How has leasing foot traffic performed with the resurgence of COVID cases? - Management reported that traffic and ad count for July were up around 9% and 7% respectively, despite some impact from the second wave of COVID [87]

[Explanatory Note](index=5&type=section&id=Explanatory%20Note) [Corporate Structure](index=5&type=section&id=Corporate%20Structure) This report combines the quarterly filings for UDR, Inc., a real estate investment trust (REIT), and its subsidiary, United Dominion Realty, L.P. (the Operating Partnership or OP) - UDR, Inc. is a REIT and the parent company of United Dominion Realty, L.P. (the Operating Partnership), through which it conducts most of its business[11](index=11&type=chunk)[12](index=12&type=chunk) - As of June 30, 2020, UDR, Inc. owned **95.3%** of the total outstanding OP Units in the Operating Partnership, giving it control over day-to-day operations[13](index=13&type=chunk) [PART I — FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1. Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements for both UDR, Inc. and its subsidiary, United Dominion Realty, L.P., for the period ended June 30, 2020 [UDR, INC. Consolidated Financial Statements](index=6&type=section&id=UDR%2C%20INC.%20Consolidated%20Financial%20Statements) UDR, Inc.'s financial statements show total assets of $9.56 billion as of June 30, 2020, with total revenues of $628.7 million and net income attributable to common stockholders of $60.9 million for the six months ended June 30, 2020 UDR, Inc. Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$9,564,471** | **$9,636,472** | | Total real estate owned, net | $8,403,115 | $8,470,748 | | Cash and cash equivalents | $833 | $8,106 | | **Total Liabilities** | **$5,315,060** | **$5,228,493** | | Secured debt, net | $1,112,870 | $1,149,441 | | Unsecured debt, net | $3,653,934 | $3,558,083 | | **Total Equity** | **$3,414,945** | **$3,389,314** | UDR, Inc. Consolidated Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :--- | :--- | :--- | | Total Revenues | $307,256 | $628,737 | | Operating Income | $91,777 | $130,731 | | Net Income Attributable to Common Stockholders | $56,709 | $60,864 | | Diluted EPS | $0.19 | $0.21 | UDR, Inc. Consolidated Statement of Cash Flows Highlights (Unaudited) | Cash Flow Activity | Six Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2019 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $317,015 | $286,421 | | Net cash used in investing activities | ($161,894) | ($805,993) | | Net cash provided by/(used in) financing activities | ($165,536) | $334,704 | [UNITED DOMINION REALTY, L.P. Consolidated Financial Statements](index=42&type=section&id=UNITED%20DOMINION%20REALTY%2C%20L.P.%20Consolidated%20Financial%20Statements) The Operating Partnership (UDR, L.P.) reported total assets of $2.34 billion as of June 30, 2020, generating rental income of $217.4 million and net income attributable to OP unitholders of $43.5 million for the six months ended June 30, 2020 United Dominion Realty, L.P. Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2020 (in thousands) | December 31, 2019 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$2,338,924** | **$2,398,745** | | Total real estate owned, net | $2,031,639 | $2,078,592 | | **Total Liabilities** | **$1,054,467** | **$1,032,859** | | Secured debt, net | $99,082 | $99,071 | | Notes payable due to the General Partner | $655,619 | $637,233 | | **Total Capital** | **$1,284,457** | **$1,365,886** | United Dominion Realty, L.P. Consolidated Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2020 (in thousands) | Six Months Ended June 30, 2020 (in thousands) | | :--- | :--- | :--- |\n| Rental Income | $105,201 | $217,366 | | Operating Income | $28,692 | $62,557 | | Net Income Attributable to OP Unitholders | $19,373 | $43,491 | | Net Income per OP Unit | $0.10 | $0.24 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=68&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant impact of the COVID-19 pandemic, noting strong rent collections despite challenges, and analyzes liquidity, capital resources, and operational results for both UDR, Inc. and the Operating Partnership - The COVID-19 pandemic has adversely affected residents' ability to pay rent, leading to eviction moratoriums and rent assistance programs, resulting in the company reserving approximately **$9.0 million** for uncollectible lease receivables in Q2 2020[330](index=330&type=chunk)[334](index=334&type=chunk) - Despite the pandemic, multifamily rent collections remained strong, with collections for billed monthly rents at **98.6%** for April, **97.6%** for May, and **96.2%** for June as of July 24, 2020[335](index=335&type=chunk) - In May 2020, the company sold two operating communities in Washington for combined gross proceeds of **$142.6 million**, resulting in a total gain of **$61.3 million**[367](index=367&type=chunk)[368](index=368&type=chunk)[417](index=417&type=chunk) UDR, Inc. Same-Store Community Performance vs. Prior Year | Period | Same-Store NOI Change | Same-Store Rental Income Change | Same-Store Operating Expense Change | | :--- | :--- | :--- | :--- | | **Q2 2020** | -4.5% | -2.2% | +3.6% | | **H1 2020** | -0.9% | +0.2% | +3.2% | UDR, Inc. Key Non-GAAP Performance Metrics (per diluted share/unit) | Metric | Q2 2020 | Q2 2019 | H1 2020 | H1 2019 | | :--- | :--- | :--- | :--- | :--- | | FFO | $0.51 | $0.54 | $1.04 | $1.05 | | FFOA | $0.51 | $0.52 | $1.05 | $1.02 | | AFFO | $0.47 | $0.48 | $0.98 | $0.96 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=91&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate risk from its variable-rate debt and refinancing needs for fixed-rate debt, with no material changes in market risk since the 2019 Annual Report on Form 10-K - The company's primary market risk is interest rate changes affecting its variable-rate debt and maturing fixed-rate debt[483](index=483&type=chunk) - As of June 30, 2020, there were no material changes to the company's market risk profile compared to what was disclosed in the 2019 Form 10-K[484](index=484&type=chunk) [Item 4. Controls and Procedures](index=91&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2020, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2020, the CEO and CFO concluded that the disclosure controls and procedures for both UDR, Inc. and the Operating Partnership are effective[487](index=487&type=chunk) - There were no changes during the quarter that materially affected, or are reasonably likely to materially affect, the internal control over financial reporting[488](index=488&type=chunk) [PART II — OTHER INFORMATION](index=92&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=92&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various routine legal claims and litigation, none of which are expected to have a material adverse effect on its financial position or results of operations - The company states that it is not involved in any legal proceedings that are expected to have a material adverse effect on its business or financial condition[491](index=491&type=chunk) [Item 1A. Risk Factors](index=92&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks to the company's business, including the COVID-19 pandemic, geographic concentration, reliance on debt financing, and the potential failure to qualify as a REIT - The COVID-19 pandemic is a primary risk, potentially leading to decreased occupancy, lower rental rates, and increased rent delinquencies due to job losses and economic uncertainty[493](index=493&type=chunk)[494](index=494&type=chunk) - The company has significant geographic concentration, with approximately **51.9%** of its H1 2020 NOI generated from the Washington D.C., Orange County, San Francisco Bay Area, and Boston markets, making it vulnerable to adverse regional economic conditions[498](index=498&type=chunk) - Risks related to indebtedness include insufficient cash flow to service debt, refinancing risk, and the potential for rising interest rates to increase costs, with the phase-out of LIBOR also noted as a potential risk[559](index=559&type=chunk)[562](index=562&type=chunk)[563](index=563&type=chunk) - Failure to maintain REIT status would result in adverse tax consequences, including being subject to federal income tax at regular corporate rates and the inability to deduct dividends paid to stockholders[575](index=575&type=chunk)[576](index=576&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=108&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2020, the company did not issue shares for OP Unit redemptions or repurchase shares under its public program, but did repurchase 72 shares from employees for tax obligations - No shares were repurchased under the company's **15 million** share repurchase program during the three months ended June 30, 2020, leaving **14.4 million** shares available for future repurchase[602](index=602&type=chunk) - A total of **72** shares were repurchased from employees at an average price of **$37.78** per share to satisfy statutory tax obligations on vested restricted stock[603](index=603&type=chunk) [Item 3. Defaults Upon Senior Securities](index=109&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - None[604](index=604&type=chunk) [Item 5. Other Information](index=109&type=section&id=Item%205.%20Other%20Information) There is no other information to report for the period - None[606](index=606&type=chunk)

UDR® Opening doors to the future® INVESTOR PRESENTATION JUNE 2020 Next Generation Operating Platform | UDR Resident App UDR, Inc. (NYSE: UDR) has a demonstrated history of successfully managing, buying, selling, developing and redeveloping attractive multifamily real estate properties in a variety of U.S. markets. • S&P 500 Company • ~$17.2 Billion Enterprise Value • 2020 Annualized Dividend of $1.44; ~3.9% yield as of May 28, 2020 Chief Financial Officer: Joe Fisher | 720-283-6139 Investor Relations: Trent ...

UDR, Inc. (NYSE:UDR) Q1 2020 Earnings Conference Call May 7, 2020 3:00 PM ET Company Participants Trent Trujillo - Director of Investor Relations Tom Toomey - CEO Jerry Davis - President and Chief Operating Officer Mike Lacy - Senior Vice President of Operations Joe Fisher - Chief Financial Officer Harry Alcock - Chief Investment Officer Matt Cozad - Senior VP, Corporate Services & Innovation Conference Call Participants Nicholas Joseph - Citi Austin Wurschmidt - KeyBanc Rich Hightower - Evercore Jeff Spect ...

Q12020 EARNINGS SUPPLEMENT UDR, Inc. (NYSE: UDR), has a demonstrated history of successfully managing, buying, selling, developing and redeveloping attractive real estate properties in primarily coastal, core U.S. markets. S&P 500 Company $17.1 Billion Enterprise Value 21 Markets, 167 Communities, 51,587 Apartment Homes Brio | Next Generation Operating Platform Resident App Electronic Platform Self-Guided and Virtual Tours CFO: Joe Fisher - 720.283.6139 | Investor Relations: Trent Trujillo - 720.283.6135 UD ...

PART I — FINANCIAL INFORMATION [Item 1. Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited Q1 2020 consolidated financial statements for UDR, Inc. and its Operating Partnership [UDR, INC. Consolidated Financial Statements](index=5&type=section&id=UDR%2C%20INC.%20Consolidated%20Financial%20Statements) UDR, Inc. reported Q1 2020 revenues of $321.5 million and net income of $4.2 million, with total assets growing to $9.69 billion UDR, Inc. Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total real estate owned, net | $8,545,527 | $8,470,748 | | Total assets | $9,691,105 | $9,636,472 | | Total liabilities | $5,393,582 | $5,228,493 | | Total stockholders' equity | $3,464,115 | $3,358,542 | | Total liabilities and equity | $9,691,105 | $9,636,472 | UDR, Inc. Consolidated Statement of Operations Highlights (in thousands, except per share data) | Income Statement Item | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Total revenues | $321,481 | $270,673 | | Operating income | $38,954 | $52,494 | | Net income attributable to common stockholders | $4,155 | $23,492 | | Diluted EPS | $0.01 | $0.08 | UDR, Inc. Consolidated Cash Flow Highlights (in thousands) | Cash Flow Item | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $135,456 | $137,333 | | Net cash used in investing activities | ($214,044) | ($459,749) | | Net cash provided by financing activities | $68,226 | $137,679 | [UDR, INC. Notes to Consolidated Financial Statements](index=10&type=section&id=UDR%2C%20INC.%20Notes%20to%20Consolidated%20Financial%20Statements) Notes detail Q1 2020 property acquisitions, debt issuance, and a 3.0% increase in Same-Store NOI - In January 2020, the company acquired a 294-home community in Tampa, FL for **$85.2 million** and increased its ownership to 100% in a 276-home community in Hillsboro, OR for **$21.6 million**[67](index=67&type=chunk)[68](index=68&type=chunk) - As of March 31, 2020, UDR owned 150 communities with **47,579 apartment homes** and had an ownership interest in **5,134 homes** through unconsolidated joint ventures[66](index=66&type=chunk)[316](index=316&type=chunk) - In February 2020, the company issued an additional **$200.0 million** of its 3.20% senior unsecured medium-term notes due 2030, bringing the total aggregate principal amount to $600.0 million[128](index=128&type=chunk) - **Same-Store Net Operating Income (NOI) increased by 3.0% YoY** for Q1 2020, driven by a 2.9% increase in rental income, while **Non-Mature Communities/Other NOI grew by 152.3%** primarily due to acquisitions in 2019[376](index=376&type=chunk)[378](index=378&type=chunk)[383](index=383&type=chunk) UDR, Inc. Debt Summary (in thousands) | Debt Category | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total Secured Debt, net | $1,144,201 | $1,149,441 | | Total Unsecured Debt, net | $3,740,937 | $3,558,083 | | **Total Debt, net** | **$4,885,138** | **$4,707,524** | [UNITED DOMINION REALTY, L.P. Consolidated Financial Statements](index=61&type=section&id=UNITED%20DOMINION%20REALTY%2C%20L.P.%20Consolidated%20Financial%20Statements) The Operating Partnership reported stable Q1 2020 net income of $24.1 million on $112.2 million of rental income United Dominion Realty, L.P. Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total real estate owned, net | $2,054,799 | $2,078,592 | | Total assets | $2,367,342 | $2,398,745 | | Total liabilities | $1,037,940 | $1,032,859 | | Total capital | $1,329,402 | $1,365,886 | United Dominion Realty, L.P. Consolidated Statement of Operations Highlights (in thousands, except per unit data) | Income Statement Item | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Rental income | $112,165 | $108,334 | | Operating income | $33,865 | $34,445 | | Net income attributable to OP unitholders | $24,118 | $23,946 | | Net income per weighted average OP Unit | $0.13 | $0.13 | [UNITED DOMINION REALTY, L.P. Notes to Consolidated Financial Statements](index=65&type=section&id=UNITED%20DOMINION%20REALTY%2C%20L.P.%20Notes%20to%20Consolidated%20Financial%20Statements) Notes show the Operating Partnership's portfolio of 52 communities and a 2.7% YoY increase in Same-Store NOI - As of March 31, 2020, the Operating Partnership's portfolio consisted of **52 communities with 16,434 apartment homes**[211](index=211&type=chunk) - The Operating Partnership is the guarantor on the General Partner's (UDR, Inc.) **$1.1 billion** unsecured revolving credit facility, **$500 million** commercial paper program, and over **$3.4 billion** in various medium-term notes[251](index=251&type=chunk) - The Operating Partnership's **Same-Store NOI for Q1 2020 increased 2.7% YoY** to $77.1 million, driven by a 3.0% increase in rental income[432](index=432&type=chunk)[437](index=437&type=chunk) - The Operating Partnership has notes payable to its General Partner (UDR, Inc.) totaling **$635.7 million** as of March 31, 2020[256](index=256&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=61&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, liquidity, and the initial impact of COVID-19, including 95.5% April rent collection - The company is closely monitoring the impact of the COVID-19 pandemic; for April 2020, it collected **95.5% of billed monthly rents** from multifamily residents[309](index=309&type=chunk)[311](index=311&type=chunk) - Management believes its **strong balance sheet and liquidity profile** position it well to weather the economic challenges posed by the COVID-19 pandemic[312](index=312&type=chunk) [UDR, Inc. MD&A](index=63&type=section&id=UDR%2C%20Inc.%20MD%26A) Management discusses lower net income but strong NOI growth of 18.9% and a rise in FFOA per share to $0.54 - **Net income attributable to common stockholders decreased to $4.2 million** in Q1 2020 from $23.5 million in Q1 2019, mainly due to a $43.0 million increase in depreciation expense[370](index=370&type=chunk)[375](index=375&type=chunk) - **Total property NOI increased by $35.8 million (18.9%) YoY**, driven by contributions from newly acquired communities and a 3.0% increase in Same-Store NOI[370](index=370&type=chunk)[376](index=376&type=chunk) - In February 2020, UDR issued **$200.0 million of 3.20% senior unsecured medium-term notes** due 2030 for net proceeds of approximately $211.3 million[329](index=329&type=chunk)[357](index=357&type=chunk) FFO, FFOA, and AFFO per Share (Diluted) | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | FFO per Share | $0.53 | $0.51 | | FFOA per Share | $0.54 | $0.50 | | AFFO per Share | $0.51 | $0.47 | [United Dominion Realty, L.P. MD&A](index=75&type=section&id=United%20Dominion%20Realty%2C%20L.P.%20MD%26A) The Operating Partnership reports stable net income of $24.1 million and a 3.1% increase in total property NOI - **Net income attributable to OP unitholders was stable at $24.1 million** ($0.13 per unit) in Q1 2020, compared to $23.9 million in Q1 2019[428](index=428&type=chunk) - **Total property NOI increased 3.1% to $81.6 million**, supported by a 2.7% increase in Same-Store NOI[432](index=432&type=chunk) - The Operating Partnership had **no acquisitions or dispositions** in Q1 2020 and has **no debt maturing** for the remainder of the year[411](index=411&type=chunk)[417](index=417&type=chunk) - The OP is exposed to interest rate risk on **$27.0 million of its own variable rate debt**[422](index=422&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=82&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate and refinancing risks, with no material changes from the 2019 Annual Report - The Company and Operating Partnership are exposed to **interest rate risk** from variable rate debt and refinancing risk[446](index=446&type=chunk) - There have been **no material changes to market risk** since the year-ended December 31, 2019 Form 10-K filing[447](index=447&type=chunk) [Item 4. Controls and Procedures](index=82&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2020, with no material changes - Based on an evaluation as of March 31, 2020, the CEO and CFO concluded that **disclosure controls and procedures are effective** at a reasonable assurance level[450](index=450&type=chunk) - **No changes in internal control over financial reporting** occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[451](index=451&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=83&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation not expected to have a material adverse effect on its financial results - The Company is party to various claims and litigation arising in the ordinary course of business but **does not expect them to have a material adverse effect** on its financial position or results[454](index=454&type=chunk) [Item 1A. Risk Factors](index=83&type=section&id=Item%201A.%20Risk%20Factors) Key risks include the COVID-19 pandemic, geographic concentration, debt refinancing, and maintaining REIT status - The **COVID-19 pandemic is a primary risk**, potentially affecting rental revenue, occupancy, tenant rent payment ability, and development projects[456](index=456&type=chunk)[457](index=457&type=chunk) - The company faces **geographic concentration risk**, with approximately **51.4% of its Q1 2020 NOI** generated from communities in four metropolitan areas[462](index=462&type=chunk) - Risks related to indebtedness include **insufficient cash flow for debt service**, refinancing risk, rising interest costs, and potential disruptions in financial markets[521](index=521&type=chunk)[524](index=524&type=chunk)[532](index=532&type=chunk) - The company is subject to tax risks, including the potential for adverse consequences if **UDR fails to qualify as a REIT**[537](index=537&type=chunk)[545](index=545&type=chunk) - Operational risks include potential liability from **environmental contamination, compliance costs with the ADA, and cybersecurity breaches**[487](index=487&type=chunk)[495](index=495&type=chunk)[512](index=512&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=99&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales or share repurchases occurred in Q1 2020, though shares were withheld for employee tax obligations - During Q1 2020, the company **did not issue any common stock** upon redemption of OP Units[563](index=563&type=chunk) - **No shares were repurchased** under the company's publicly announced share repurchase programs during Q1 2020[564](index=564&type=chunk) - A total of **58,611 shares were repurchased from employees** to cover tax obligations from vested restricted stock, at an average price of $47.78 per share[565](index=565&type=chunk) [Item 3. Defaults Upon Senior Securities](index=100&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon its senior securities - None[567](index=567&type=chunk) [Item 4. Mine Safety Disclosures](index=100&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[568](index=568&type=chunk) [Item 5. Other Information](index=100&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this item - None[569](index=569&type=chunk) [Item 6. Exhibits](index=101&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including governance documents and SOX certifications - Lists filed exhibits, including corporate governance documents, debt instruments, and required **CEO/CFO certifications**[570](index=570&type=chunk)[572](index=572&type=chunk)

Company Overview - UDR has an enterprise value of approximately $214 billion[1,5] - The company's annualized dividend is $144, representing a yield of approximately 29% as of February 25, 2020[1] - UDR's portfolio consists of 51294 homes with an average same-store rent of $2200[5] Financial Performance and Outlook - Year-to-date blended lease rate growth is 28%, which is 50 basis points above 4Q19[10] - Year-to-date occupancy is 969%, a year-over-year increase of 20 basis points[10] - The company anticipates $15-$20 million in incremental run-rate NOI by 2022 through its Next Generation Operating Platform[13,33] Capital Allocation and Investments - UDR acquired Slade at Channelside in Tampa, FL for $85 million and exercised a purchase option for the Arbory in Portland, OR for $54 million[10] - The company made a DCP investment in Thousand Oaks, CA for $20 million at a 9% yield plus participation[10] - UDR accretively prepaid $700 million of unsecured debt in 2019 with debt issued at a lower weighted average interest rate[14] Portfolio and Market Composition - West Coast properties account for 42% of UDR's total NOI, while Southwest properties account for 6%, Southeast 11%, Northeast 21%, and Mid-Atlantic 20%[7] - Development projects include $117 million in the West Coast and $162 million in the Southwest[7] Operating Excellence - The Next Generation Operating Platform is projected to expand controllable operating margin by 150-200 basis points by 2022[13] - Resident satisfaction Net Promoter Scores have increased by 15% since 2Q18[13] - Since 2014, UDR's same-store NOI growth without operating initiatives is comparable to peer growth including their initiatives, 40% vs 42%[34,51]

Part I [Item 1. Business](index=7&type=section&id=Item%201.%20Business) UDR, Inc. is a REIT owning and operating 148 multifamily apartment communities, focusing on strategic growth and operational excellence - UDR is a REIT specializing in multifamily apartment communities, with **148 communities** and **47,010 apartment homes** as of year-end 2019[24](index=24&type=chunk) - The company operates in two segments: Same-Store Communities and Non-Mature Communities/Other[29](index=29&type=chunk)[31](index=31&type=chunk) 2019 Dividend Summary | Quarter | Declared per Share | Paid per Share | | :--- | :--- | :--- | | First | $0.3425 | $0.3225 | | Second | $0.3425 | $0.3425 | | Third | $0.3425 | $0.3425 | | Fourth | $0.3425 | $0.3425 | | **Total** | **$1.3700** | **$1.3500** | - Key 2019 highlights include a **10.1% increase in total revenues**, **4.0% Same-Store NOI growth**, acquisition of **eight communities for $911.9 million**, and three new development projects[33](index=33&type=chunk) - In 2019, the company issued **$1.1 billion in senior unsecured notes** and raised over **$662 million** from common stock offerings[39](index=39&type=chunk) UDR, Inc. 5-Year Acquisition & Disposition Summary | Year | Homes Acquired | Homes Disposed | Homes Owned (Year-End) | | :--- | :--- | :--- | :--- | | **2019** | 7,079 | — | 47,010 | | **2018** | — | 868 | 39,931 | | **2017** | 462 | 218 | 39,998 | | **2016** | 508 | 1,782 | 39,454 | | **2015** | 3,246 | 2,735 | 40,728 | [Item 1A. Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to real estate operations, indebtedness, tax compliance for REIT status, and corporate organization, including geographic concentration and interest rate fluctuations - Significant geographic concentration risk exists, with **52.7% of 2019 NOI** from four major metropolitan areas[81](index=81&type=chunk) - Operational risks include challenges in renewing leases or re-letting units on favorable terms, impacting rental revenues[84](index=84&type=chunk) - Development and construction activities pose risks including financing difficulties, delays, cost overruns, and failure to achieve target occupancy or rental rates[92](index=92&type=chunk)[94](index=94&type=chunk) - Financial risks include insufficient cash flow for debt service, refinancing challenges, and exposure to changing interest rates, particularly with the LIBOR transition[142](index=142&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk) - A primary tax risk is the potential failure to qualify as a REIT, leading to corporate income tax and loss of dividend deductions[157](index=157&type=chunk)[158](index=158&type=chunk) - Charter provisions limit individual stock ownership to **9.9%** to maintain REIT status, which may also prevent a change of control[180](index=180&type=chunk) [Item 1B. Unresolved Staff Comments](index=52&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved comments from the Securities and Exchange Commission staff - No unresolved staff comments were reported[181](index=181&type=chunk) [Item 2. Properties](index=53&type=section&id=Item%202.%20Properties) As of December 31, 2019, UDR's consolidated portfolio included 148 apartment communities with 47,010 homes, with detailed breakdowns provided for both UDR and its Operating Partnership UDR, Inc. Real Estate Portfolio Summary (as of Dec 31, 2019) | Metric | Value | | :--- | :--- | | Total Communities | 148 | | Total Apartment Homes | 47,010 | | Total Real Estate Owned (at cost) | $12.60 billion | | Average Physical Occupancy | 96.4% | United Dominion Realty, L.P. Real Estate Portfolio Summary (as of Dec 31, 2019) | Metric | Value | | :--- | :--- | | Total Communities | 52 | | Total Apartment Homes | 16,434 | | Total Real Estate Owned (at cost) | $3.88 billion | | Average Physical Occupancy | 96.7% | [Item 3. Legal Proceedings](index=55&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, with no expected material impact on financial condition or results - Any liability from ordinary course legal proceedings is not expected to materially affect the company's financial condition or results[189](index=189&type=chunk) [Item 4. Mine Safety Disclosures](index=55&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - This item is not applicable to the company[190](index=190&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=57&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) UDR's common stock trades on the NYSE, with details on common and preferred stock, OP Units, 2019 distribution tax classification, and share repurchase program activity - UDR's common stock trades on the NYSE under symbol "UDR", with **294,631,463 shares outstanding** as of February 17, 2020[192](index=192&type=chunk) - For tax purposes, **73% of 2019 distributions** were classified as ordinary income[193](index=193&type=chunk) - No public trading market exists for Operating Partnership (OP) Units, with UDR and affiliates owning **95.7% of 184.1 million outstanding units** as of December 31, 2019[201](index=201&type=chunk) Share Repurchase Program Activity (Q4 2019) | Period | Shares Purchased | Average Price Paid | Shares Remaining for Purchase | | :--- | :--- | :--- | :--- | | Oct 2019 | — | — | 14,439,000 | | Nov 2019 | — | — | 14,439,000 | | Dec 2019 | — | — | 14,439,000 | [Item 6. Selected Financial Data](index=60&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides five-year selected consolidated financial data for UDR, Inc. and its Operating Partnership, highlighting key income, balance sheet, and cash flow metrics through 2019 UDR, Inc. Selected Financial Data (2018-2019) | Metric (in thousands, except per share) | 2019 | 2018 | | :--- | :--- | :--- | | **Operating Data** | | | | Rental income | $1,138,138 | $1,035,105 | | Net income attributable to common stockholders | $180,861 | $199,238 | | Diluted EPS | $0.63 | $0.74 | | **Balance Sheet Data** | | | | Total assets | $9,636,472 | $7,711,728 | | Total liabilities | $5,228,493 | $3,816,211 | | **Cash Flow Data** | | | | Cash from operating activities | $630,704 | $560,676 | United Dominion Realty, L.P. Selected Financial Data (2018-2019) | Metric (in thousands, except per unit) | 2019 | 2018 | | :--- | :--- | :--- | | **Operating Data** | | | | Rental income | $441,773 | $431,920 | | Net income | $103,995 | $231,485 | | Diluted EPS | $0.56 | $1.25 | | **Balance Sheet Data** | | | | Total assets | $2,398,745 | $2,304,590 | | Total liabilities | $1,032,859 | $818,701 | | **Cash Flow Data** | | | | Cash from operating activities | $255,093 | $255,668 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=66&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides a detailed analysis of 2019 financial condition and operational results for UDR, Inc. and its Operating Partnership, covering income, NOI, capital markets activities, and segment performance [UDR, Inc. MD&A](index=68&type=section&id=UDR%2C%20Inc.%20MD%26A) UDR's 2019 net income decreased due to lower property sale gains, despite strong operational performance with **10.4% total property NOI growth** and significant capital market activities - Net income attributable to common stockholders decreased from **$199.2 million in 2018** to **$180.9 million in 2019**, primarily due to lower gains on real estate sales[318](index=318&type=chunk) Property NOI Performance (2018 vs 2019) | Category (in thousands) | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | Same-Store NOI | $690,443 | $663,762 | 4.0% | | Non-Mature Communities/Other NOI | $117,860 | $68,353 | 72.4% | | **Total Property NOI** | **$808,303** | **$732,115** | **10.4%** | - Same-Store NOI grew **4.0%**, driven by a **3.6% increase in rental income** from higher rates and other income, with stable physical occupancy at **96.9%**[328](index=328&type=chunk) - Cash used in investing activities significantly increased to **$1.7 billion in 2019** from **$113.5 million in 2018**, primarily due to property acquisitions[263](index=263&type=chunk) - The company issued **$1.1 billion in senior unsecured notes**, using proceeds to repay **$700.0 million** of higher-rate notes[250](index=250&type=chunk)[251](index=251&type=chunk)[256](index=256&type=chunk) FFO, FFOA, and AFFO Per Diluted Share | Metric | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | FFO per share | $2.03 | $1.93 | $1.83 | | FFOA per share | $2.08 | $1.96 | $1.87 | | AFFO per share | $1.92 | $1.80 | $1.72 | [United Dominion Realty, L.P. MD&A](index=104&type=section&id=United%20Dominion%20Realty%2C%20L.P.%20MD%26A) The Operating Partnership's 2019 net income decreased due to fewer property sales, despite **1.8% total property NOI growth** and its role as guarantor for UDR, Inc.'s unsecured debt - Net income attributable to OP unitholders decreased to **$102.2 million in 2019** from **$229.8 million in 2018**, primarily due to the absence of real estate sale gains[393](index=393&type=chunk) Operating Partnership Property NOI Performance (2018 vs 2019) | Category (in thousands) | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | Same-Store NOI | $300,158 | $289,832 | 3.6% | | Non-Mature Communities/Other NOI | $22,848 | $27,548 | (17.1)% | | **Total Property NOI** | **$323,006** | **$317,380** | **1.8%** | - Same-Store NOI increased **3.6%**, driven by a **3.5% rise in property rental income** from higher rates and other income[401](index=401&type=chunk)[402](index=402&type=chunk) - The Operating Partnership guarantees UDR, Inc.'s **$1.1 billion revolving credit facility**, **$500 million commercial paper program**, **$350 million term loan**, and all outstanding medium-term notes[385](index=385&type=chunk)[854](index=854&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](index=119&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section incorporates market risk disclosures from Item 7, primarily focusing on interest rate risk, where a 100 basis point increase would raise annual interest expense by approximately **$3.5 million** - The company faces interest rate risk; a **100 basis point increase** would raise annual interest expense by approximately **$3.5 million** on its **$378.6 million variable rate debt** as of December 31, 2019[314](index=314&type=chunk) - Derivative financial instruments, including interest rate swaps and caps, are used to manage interest rate risk, typically designated as cash flow hedges[316](index=316&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=119&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item refers to the full consolidated financial statements and supplementary data for UDR, Inc. and United Dominion Realty, L.P., starting on page F-1 - Consolidated financial statements and related schedules for UDR, Inc. and United Dominion Realty, L.P. are attached, with an index on page F-1[417](index=417&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=119&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting principles, financial disclosure, or auditing scope - No changes in or disagreements with accountants were reported[418](index=418&type=chunk) [Item 9A. Controls and Procedures](index=119&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2019, with an unqualified audit opinion from Ernst & Young LLP - The CEO and CFO concluded that disclosure controls and procedures were effective as of December 31, 2019[422](index=422&type=chunk) - Management concluded internal control over financial reporting was effective, with Ernst & Young LLP issuing an unqualified audit opinion on UDR, Inc.'s controls[423](index=423&type=chunk)[424](index=424&type=chunk) - No material changes to internal control over financial reporting occurred during the fourth fiscal quarter[425](index=425&type=chunk) [Item 9B. Other Information](index=121&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - No other information was reported for this item[426](index=426&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=122&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2020 proxy statement - Information is incorporated by reference from the company's definitive proxy statement for the 2020 Annual Meeting of Stockholders[429](index=429&type=chunk) [Item 11. Executive Compensation](index=122&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive and director compensation is incorporated by reference from the 2020 proxy statement - Information is incorporated by reference from the company's definitive proxy statement for the 2020 Annual Meeting of Stockholders[431](index=431&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=122&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and equity compensation plans is incorporated by reference from the 2020 proxy statement - Information is incorporated by reference from the company's definitive proxy statement for the 2020 Annual Meeting of Stockholders[432](index=432&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=122&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the 2020 proxy statement - Information is incorporated by reference from the company's definitive proxy statement for the 2020 Annual Meeting of Stockholders[433](index=433&type=chunk) [Item 14. Principal Accountant Fees and Services](index=122&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the 2020 proxy statement - Information is incorporated by reference from the company's definitive proxy statement for the 2020 Annual Meeting of Stockholders[434](index=434&type=chunk) Part IV [Item 15. Exhibits, Financial Statement Schedules](index=124&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all documents filed as part of the Form 10-K, including an index to consolidated financial statements, schedules, and exhibits - This item provides an index to the Financial Statements (page F-1), Financial Statement Schedules (page S-1), and all Exhibits filed with the report[437](index=437&type=chunk)[438](index=438&type=chunk) [Item 16. Form 10-K Summary](index=138&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary in this optional section of the Form 10-K - No summary has been provided in this optional section[457](index=457&type=chunk)

Financial Data and Key Metrics Changes - UDR reported a same-store NOI growth of 4.1% and FFO as adjusted per share growth of 7% for Q4 2019, indicating strong operational execution [8][18] - Full-year 2019 FFOA per share was $2.08, representing over 6% year-over-year growth [37] - For 2020, UDR expects FFOA per share growth of 6% at the midpoint of guidance and a 5% year-over-year increase in the dividend per share [15][52] Business Line Data and Key Metrics Changes - In Q4 2019, same-store revenue, expense, and NOI growth rates were 3.3%, 1.3%, and 4.1% respectively, while full-year 2019 growth rates were 3.6%, 2.5%, and 4% [18] - The company has shifted focus to minimize controllable expense growth, achieving only 0.9% growth in controllable expenses in 2019 compared to 1.8% for the peer group [26][27] Market Data and Key Metrics Changes - UDR anticipates that top-line growth rates in 2020 will exhibit less variability than in previous years, with markets like Monterey Peninsula, Portland, and Boston expected to grow above the portfolio growth rate range [32] - Conversely, markets such as New York, Baltimore, and Orange County are expected to grow below the low end of the growth range [32] Company Strategy and Development Direction - UDR's strategy includes disciplined capital sourcing and allocation, focusing on acquisitions that provide operational and investment upside [10][45] - The company is implementing a NextGen operating platform aimed at enhancing customer engagement and operational efficiency, with expectations of expanding controllable margins by 150 to 200 basis points by 2022 [22][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the 2020 economic landscape being similar to 2019, with expectations of a robust economy and balanced supply-demand environment [14] - The company is focused on maintaining high occupancy rates and improving resident satisfaction, which increased by 11% in 2019 [27] Other Important Information - UDR completed $1.8 billion in acquisitions in 2019, with expectations for the weighted average yield on these acquisitions to improve from 4.7% to above 5.5% by year three [29][39] - The company has a strong liquidity position with $867 million available and a consolidated financial leverage of 34% on undepreciated book value [49] Q&A Session Summary Question: What is embedded in guidance in terms of blended lease rate growth? - Blended lease rate growth is expected to be around 3%, with renewals around 1% [55] Question: What is the impact of rent control initiatives in New York and California on 2020 same-store revenue? - The impact is estimated to be in the 10 to 15 basis points range [62] Question: What market has the widest bands between the likely top and bottom in terms of possible outcomes on same-store revenue? - Seattle is projected to have significant supply impact but also strong job growth, leading to variability [91] Question: What are the expectations for the Smart Home initiative in 2020? - The expectation is to add another 7,000 to 10,000 homes, contributing approximately 60 basis points to rent growth [70] Question: How is the NextGen operating platform impacting FFO? - The platform's expenditures are being capitalized, with an expected non-cash impact of 1 to 2 cents this year, ramping up to around 2 cents in the future [76] Question: What are the biggest risks to the forecast for 2020? - The biggest risks are related to job and wage growth, which could impact demand [78]