The Blackstone Group LP (NYSE: BX) will reportedly invest hundreds of millions of dollars in Israel, through a joint venture that it will set up with Markstone Capital Partners Group LLC. Markstone, headed by managing directors Ron Lubash and Amir Kess, will apparently become Blackstone’s exclusive representative in Israel. Markstone will seek Israeli companies in which the two private equity funds will invest.
The deal will be closed in a few weeks. Markstone has declined to respond to the report.
Blackstone, with $166.2 billion in assets under management, is the world’s largest private equity fund, larger than Apax Partners, which has invested billions of shekels in Israel, including the acquisition of the controlling interests in Tnuva Food Industries Ltd. and Psagot Investment House Ltd.
New York-based Blackstone was founded by CEO Stephen Schwarzman in 1985. It has a market cap of $7.66 billion, and posted a net profit of $1.4 billion in 2011.
Markstone has had a mixed track record with its investments in Israel. It founded Prisma Investment House, which went bankrupt. Its investments in Elran (DD) Real Estate Ltd. (TASE:ELRE) and Tomcar Ltd., which developed a commercial off-road utility vehicle, both failed. Successful exits on investments include Golden Pages Ltd., improved seed varieties developer Zeraim Gedera Ltd., and Netafim Ltd.
Markstone raised $800 million in 2003-04 from institutional investors, including California Public Employees’ Retirement System (CalPERS) and New York State Pension Fund in the US, and Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) and Menorah Mivtachim Holdings Ltd. (TASE: MORA) in Israel. Markstone chairman Elliot Broidy resigned after a plea bargain for bribery in the US. In September 2010, Markstone reached a settlement with then-New York State Attorney General Andrew Cuomo, in which the Israeli private equity fund paid $18 million.
Published by Globes [online], Israel business news – www.globes-online.com – on February 19, 2012
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2012年2月19日星期日
2012年2月13日星期一
Greene Co. airport improvements could land jobs for region
The Beavercreek Twp. Board of Trustees is considering financial incentives for potential development of more than 1,000 acres near the Greene County Lewis A. Jackson Regional Airport.
The board plans to vote March 5 on a resolution to establish a tax increment financing fund (TIF) for a 19-parcel, 1,086-acre area south of U.S. 35 that could become an economic engine by serving corporate jets and new businesses. It would enable developers not to shoulder all the cost of roads, water, sewer and other infrastructure.
The mostly agricultural area stretches from Langs Chevrolet near Orchard Lane to south of the airport. The biggest parcel is a 615-acre spot owned by the Valley Springs Farm Co.
Letters of notice have been sent to the superintendents of Beavercreek, Xenia and the Greene County Career Center school districts about the proposed 10-year TIF.
“It can impact them from the standpoint that they lose revenue off of this,” Beavercreek Twp. Trustee Robert Glaser said. “But we have the option to take and make it up. We can take money out of that pool and make them whole. This puts them on notice that it’s going to happen, or it could happen.”
‘Nobody’ knows about TIF plan
Glaser admits most public officials and residents know little of the plan. “We’ve really had no public input on this whatsoever,” Glaser said during a trustee meeting on Feb. 6. “I don’t think the public is aware that we are doing this.
“Nobody seems to know about this. We publish these reports but who reads all this stuff? I think we need to go a little extra step and make sure that the public is aware of what we’re doing, so that there’s no surprises.”
Greene County Auditor David Graham said a TIF was used to develop the land that became The Greene.
“The developer wanted somebody to pay for the infrastructure improvements that needed to be made related to that property. There were no roads, no water, no sewer,” Graham said. “Nobody likes the theory of a TIF, but it gives you an opportunity to control a development.”
A 2008 Beavercreek citizen satisfaction survey performed by Fallon Research showed 52 percent of the city’s residents favored using a TIF-like tool and 37 percent opposed it.
Airport could be economic boon
The area near the airport has long been considered a potential economic resource. With Wright-Patterson Air Force Base positioning itself for more rounds of Base Realignment and Closure, the site could be attractive to defense contractors and others.
Glaser said the runway’s expansion to 5,000 feet is nearly completed, which will enable it to accommodate more private jets per Federal Aviation Administration rules. Glaser said the airport may need a waiver since the setback from the taxiways and some hangars do not meet the FAA regulations.
In 2008, the collection of hangars and runways was in the sights of Beavercreek and Xenia city officials when both proposed joint tax agreements with the township in order to bring services to the property. Officials from both cities hoped to have their foot in the door when the property near the airport begins to develop.
“Our county airport is strategically located. It’s a real jewel,” Greene County Commissioner Rick Perales said in July 2008 after an airport plan was presented. “This gives us a foundation to work from.”
Xenia City Manager Jim Percival said he proposed a Joint Economic Development District that included the TIF idea during a July 2008 board of trustees meeting, but that he “never heard back.”
Percival said Xenia has no plans to annex any land near the airport. He did not know about the township’s newest plan. “There’s potential with the airport, no question,” he said. “We always want to work with our neighbors to provide benefits to the entire region.”
Trustees tried to acquire farm land
Glaser said the trustees tried to purchase a 60-acre parcel just south of the airport from the Beavercreek-based Deccan Group, LLC.
“We were just looking at it as a potential investment, let’s put it that way,” Glaser said of the farm land that includes a 1900 bungalow and another structure. “This was a strategic piece of property for the future of the township . . . Control of the property was important to us on a long-term basis. . . . We couldn’t reach terms with the owner.”
County auditor records show the land was purchased for $300,000 in 2003. Neither side disclosed the negotiated prices or how far apart the sides were.
Jan Venkayya, president of Deccan, said the house is rented out and the land leased to a farmer who grows soybeans and corn. She said the township’s offer was not the right price.
“For development, anyone wants to have utilities,” Venkayya said. “I think (our land) would be very useful for the airport for them to expand. It’s an emotional issue for me. I have an attachment to that land, but maybe at some point I would be willing to sell it.”
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The board plans to vote March 5 on a resolution to establish a tax increment financing fund (TIF) for a 19-parcel, 1,086-acre area south of U.S. 35 that could become an economic engine by serving corporate jets and new businesses. It would enable developers not to shoulder all the cost of roads, water, sewer and other infrastructure.
The mostly agricultural area stretches from Langs Chevrolet near Orchard Lane to south of the airport. The biggest parcel is a 615-acre spot owned by the Valley Springs Farm Co.
Letters of notice have been sent to the superintendents of Beavercreek, Xenia and the Greene County Career Center school districts about the proposed 10-year TIF.
“It can impact them from the standpoint that they lose revenue off of this,” Beavercreek Twp. Trustee Robert Glaser said. “But we have the option to take and make it up. We can take money out of that pool and make them whole. This puts them on notice that it’s going to happen, or it could happen.”
‘Nobody’ knows about TIF plan
Glaser admits most public officials and residents know little of the plan. “We’ve really had no public input on this whatsoever,” Glaser said during a trustee meeting on Feb. 6. “I don’t think the public is aware that we are doing this.
“Nobody seems to know about this. We publish these reports but who reads all this stuff? I think we need to go a little extra step and make sure that the public is aware of what we’re doing, so that there’s no surprises.”
Greene County Auditor David Graham said a TIF was used to develop the land that became The Greene.
“The developer wanted somebody to pay for the infrastructure improvements that needed to be made related to that property. There were no roads, no water, no sewer,” Graham said. “Nobody likes the theory of a TIF, but it gives you an opportunity to control a development.”
A 2008 Beavercreek citizen satisfaction survey performed by Fallon Research showed 52 percent of the city’s residents favored using a TIF-like tool and 37 percent opposed it.
Airport could be economic boon
The area near the airport has long been considered a potential economic resource. With Wright-Patterson Air Force Base positioning itself for more rounds of Base Realignment and Closure, the site could be attractive to defense contractors and others.
Glaser said the runway’s expansion to 5,000 feet is nearly completed, which will enable it to accommodate more private jets per Federal Aviation Administration rules. Glaser said the airport may need a waiver since the setback from the taxiways and some hangars do not meet the FAA regulations.
In 2008, the collection of hangars and runways was in the sights of Beavercreek and Xenia city officials when both proposed joint tax agreements with the township in order to bring services to the property. Officials from both cities hoped to have their foot in the door when the property near the airport begins to develop.
“Our county airport is strategically located. It’s a real jewel,” Greene County Commissioner Rick Perales said in July 2008 after an airport plan was presented. “This gives us a foundation to work from.”
Xenia City Manager Jim Percival said he proposed a Joint Economic Development District that included the TIF idea during a July 2008 board of trustees meeting, but that he “never heard back.”
Percival said Xenia has no plans to annex any land near the airport. He did not know about the township’s newest plan. “There’s potential with the airport, no question,” he said. “We always want to work with our neighbors to provide benefits to the entire region.”
Trustees tried to acquire farm land
Glaser said the trustees tried to purchase a 60-acre parcel just south of the airport from the Beavercreek-based Deccan Group, LLC.
“We were just looking at it as a potential investment, let’s put it that way,” Glaser said of the farm land that includes a 1900 bungalow and another structure. “This was a strategic piece of property for the future of the township . . . Control of the property was important to us on a long-term basis. . . . We couldn’t reach terms with the owner.”
County auditor records show the land was purchased for $300,000 in 2003. Neither side disclosed the negotiated prices or how far apart the sides were.
Jan Venkayya, president of Deccan, said the house is rented out and the land leased to a farmer who grows soybeans and corn. She said the township’s offer was not the right price.
“For development, anyone wants to have utilities,” Venkayya said. “I think (our land) would be very useful for the airport for them to expand. It’s an emotional issue for me. I have an attachment to that land, but maybe at some point I would be willing to sell it.”
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2012年2月8日星期三
OSC launches new insider trading probe; high-profile mining exec named
TORONTO – The Ontario Securities Commission has launched an insider trading probe involving a former employee of venerable Canadian investment bank GMP Securities.
The probe, alleging illegal profits totalling some $962,000, centres on Eda Marie Agueci, a former executive assistant at GMP who is accused of tipping others about pending transactions for which her firm acted as an adviser, and of trading in the stocks of those companies herself.
Among those named in the statement of allegations by the OSC staff is well-known mining industry executive Ian Telfer, chairman of Goldcorp Inc. (TSX:G).
Telfer is not accused of participating in insider trading himself, but the OSC staff alleges he helped facilitate the alleged illegal conduct of Agueci and her brother-in-law, Santo Iacono, a partner in S.I.R. Investment Inc., a food services distribution company, during the relevant period.
The allegations have not been proven and Telfer has issued a statement describing them as “completely without merit” and saying he plans to vigorously defend against them.
“The allegation is that I acted contrary to the public interest by agreeing to include a family member of a business associate in a private financing,” Telfer said in a statement after the allegations were made public.
“There is no allegation that I breached any securities law or that I was involved in any insider trading scheme,” Telfer said, adding that he was “very disappointed that the OSC is trying to stretch its jurisdiction to suggest that there is something wrong with agreeing to include someone’s relative in a private placement.”
Agueci, as an executive assistant to the chairman and to the mining group of the investment banking department of GMP Securities L.P., is alleged to have acquired through her employment or from others material non-public facts concerning pending corporate transactions, which she would communicate to other respondents.
“In doing so, she repeatedly engaged in unlawful tipping, contrary to subsection 76(2) of the Securities Act,” it said.
The OSC said respondents who received such information from Agueci would then trade in securities of the reporting issuers “with knowledge of material facts . . . that had not generally been disclosed, thereby engaging in illegal insider trading.”
In some cases, the respondents are accused of informing others of such material facts and recommending investing to them or of having made “payments to Agueci in relation to their illicit trading.”
“The illegal tipping and insider trading scheme involved trading in the securities of six reporting issuers and yielded trading profits of approximately $962,000,” it said.
In addition, Agueci is alleged to have received direct and indirect payments totalling $25,000 from Dennis Wing who, during the relevant period, was president and chief executive officer of registered investment dealer Fort House Inc..
In order to conceal the unlawful trading activity, certain respondents are alleged to have used deceptive techniques, including avoiding the use of stock symbols in correspondence in order to avoid detection by GMP’s compliance department, the OSC said.http://tourism9.com/ http://vkins.com/
2012年2月7日星期二
AP Enterprise: Brown bank regulator an insider
SACRAMENTO, Calif. —
Gov. Jerry Brown’s appointee to head the department that oversees banking, financial and consumer regulations in California led a trade association that fought against tighter lending restrictions before the subprime mortgage crisis exploded and was an executive with Washington Mutual when the now-failed bank was among the most aggressive marketers of loans to high-risk borrowers.
Jan Owen, a Democrat, also is named in a congressional inquiry into whether lawmakers and certain executives received preferential treatment for home loans, although she was not accused of wrongdoing.
Consumer advocates said they are watching Owen’s decisions carefully to see how she performs in her role as commissioner of the California Department of Corporations. The Democratic governor appointed her in December to the $143,000-a-year position, and she started in January.
Owen, 59, of West Sacramento, has a long resume in California, including stints in both business and government, but it is her history with organizations that were at the heart of the mortgage meltdown that stands out in a state that has one of the highest home foreclosure rates in the nation.
Owen served as state director of government and industry affairs at Washington Mutual from 2002 until its collapse in 2008, one of the largest bank failures in American history. It was taken over by JP Morgan Chase, where Owen stayed on as vice president of government affairs until 2009.
“It is of concern if a person who takes a job there, at that pay level in particular, has such experience, particularly with the mortgage bankers association, JPMorgan and Washington Mutual,” said Rick Jacobs, president of the Courage Campaign, which advocates on behalf of policies for poor and working-class families.
“These are big institutions, some of which don’t even exist anymore because of what they did in the mortgage business, and what they did to California,” Jacobs said. “That should be watched very carefully.”
Owen declined to be interviewed by The Associated Press for this story, but a spokesman for the Department of Corporations, Mark Leyes, responded to questions by email and telephone. He said Owen’s professional background is an asset because she understands consumer issues.
“Understanding these industries and how they function- and fail – improves the ability to regulate effectively,” Leyes said in an email.
He said the department protects consumers by licensing and regulating the network of financial services and securities businesses, including brokers, dealers, investment advisers, financial planners and lenders. Because Owen “really understands how these complex industries operate, she knows what to look for and how to crack down,” Leyes said.
Officials with several consumer groups said they were hesitant to openly criticize Owen’s background because they will have to work with her in her new role. Lawmakers similarly were hesitant because Owen’s appointment still has to be approved in the Legislature. Although Owen’s appointment requires confirmation by the state Senate, she is allowed to work for up to one year before lawmakers decide.
Some consumer advocates who have worked with Owen in the past praised her, saying she was responsive to their concerns.
Orson Aguilar, executive director of the Greenlining Institute, a Berkeley-based national policy group that advocates for racial and economic justice, said he often found himself on the opposite side of the table from Owen on consumer protection and affordable housing issues when she was an executive at Washington Mutual.
“I think people would be surprised, but definitely she was somebody who was easy to work with and she got it. She just didn’t pay lip service, she tried her hardest” to help poor communities, he said.
Before joining Washington Mutual, Owen was executive director of the California Mortgage Bankers Association from 2000 to 2002, where she worked on behalf of lenders on regulatory issues that she now is in charge of enforcing.
Owen was among those who argued against a 2001 bill that attempted to control high-interest predatory lending several years before the collapse of the housing industry, which helped propel the state’s unemployment rate to more than 12 percent during the height of the recession.
SB60 by then-Sen. Joe Dunn, a Democrat, would have required lenders to assess whether potential recipients of high-interest, high-risk loans had the means to repay them and required the attorney general to document complaints against lenders.
The bill sought to end the “abusive practices imposed upon a captive market,” according to its text.
“These abusive tactics, known as `predatory lending’ practices, range from the charging of exorbitant fees and interest rates from those least likely to afford them, to aggressive sales of costly and unnecessary services, to outright fraud aimed at forcing foreclosures and allowing seizures of property,” the bill said.
That was 2001, long before most Americans had heard about the complex lending and financial instruments that contributed to the collapse of the housing market and billions of dollars in bank bailouts.
A report that year in American Banker, a trade magazine, notes that a hearing on the bill was canceled and said Owen’s office contacted the senator to try to “work with him” on it. A newsletter for bankers association members from 2001 quotes Owen as saying the legislation and other bills like it would turn lenders away from California, which would lead to complaints that low-income buyers and the elderly could not receive loans.
“There is a fine line between protecting consumers and making the process so cumbersome and risky that lenders will simply do business elsewhere,” she said in the newsletter.
Dunn’s bill died in committee that year.
The former senator, who is now executive director of the State Bar of California, did not return a call from The Associated Press seeking comment.
Leyes, of the Department of Corporations, said industry groups argued that the law duplicated existing federal regulations, although those did not cap interest rates or fees on loans. He noted that the association did not take an official public position on the bill.
“The industry wasn’t supportive of Dunn’s bill and similar efforts that year or in that time period. Jan was employed by the association, the CMBA, and she needed to represent their point of view,” he said.
Leyes said a similar bill by then-Sen. Carole Migden passed later. The Mortgage Bankers Association also lobbied against that bill.
The association also is listed as an opponent of the California Financial Privacy Act by then-Assemblyman Tim Leslie, which sought to prohibit financial companies from sharing customers’ data unless customers opted in. That legislation, AB21, died in a committee in 2002.
The California Reinvestment Coalition is one of many groups that lobbied in the early 2000s for tighter lending standards and more restrictions on high-interest loans. Its associate director, Kevin Stein, said he did not recall whether Owen spoke out publicly against the Dunn bill but said her resume raises some concerns about whether she will be an effective advocate for consumers.
Stein called Washington Mutual a “perfect example of what happens when regulators don’t regulate.”
“So she’s aware of that, and maybe there’s some appreciation that she might have for the role that regulations can and should play,” he said.
A spokesman for the governor, Gil Duran, said is uniquely qualified to lead the department.
“Jan Owen is a highly experienced and respected commissioner with a deep knowledge of California’s complex industries and regulations. Gov. Brown picks appointees based on their qualifications,” he said.
Owen’s name also is cited in two congressional investigations.
They include a 2009 inquiry into the collapse of Countrywide Financial Corp. as a potential “Friend of Angelo” – a reference to former Countrywide chief executive Angelo Mozilo, who helped high-profile clients get discounted mortgages.
Once the country’s largest lender, Countrywide played a major role in the collapse of the housing market because it aggressively pushed complicated home loans to people with a questionable ability to repay.
An April 2003 email exchange cited as part of the House Oversight and Government Reform Committee’s investigation begins with an email message from Owen to Pete Mills, then-senior vice president of legislative and government regulatory affairs for Countrywide Home Loans.
“Don’t forget name and telephone number of the guy for refi for us,” Owen wrote.
Mills then emailed another Countrywide executive, asking him or “one of your top people,” to help Owen. In addition to noting her government affairs position at Washington Mutual, Mills refers in his email to Owen as “a good friend of Countrywide from her days as executive director at Calif. MBA.” A follow-up email urges another staffer to offer Owen a discount of half a percentage point on her loan and “no junk fees.”
Leyes said Owen does not remember ever receiving a refinancing offer from Countrywide, and public records reviewed by The Associated Press do not show her or her husband having any loans from the company for the two Sacramento-area homes they have owned.
The report concluded that Countrywide loan officers waived fees and knocked off points for VIP borrowers at no cost, saving them thousands of dollars in deals that were not available to regular applicants. It does not say whether Owen received a loan with preferential terms.
“She didn’t seek any preferential treatment even though she may have kind of innocuously asked into the terms that Countrywide provided for a refinance,” Leyes said. “What’s unfortunate is that that got included in that report back then and it didn’t get challenged or corrected at the time.”
Owen’s name also surfaced in a July 2010 House Ethics Committee investigation that cleared Rep. Laura Richardson, D-Long Beach, of wrongdoing in the foreclosure of her Sacramento home, an action that Washington Mutual later rescinded. Owen was among the bank officials who dealt with Richardson’s case.
Before she worked for the trade association and the banks, Owen was chief consultant to the Senate Banking Committee in the Legislature from 1992 to 1995, a deputy commissioner at the Department of Financial Institutions under former Gov. Gray Davis from 1996 to 1999 and acting commissioner from 1999 to 2000, when she left to head the bankers association
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Gov. Jerry Brown’s appointee to head the department that oversees banking, financial and consumer regulations in California led a trade association that fought against tighter lending restrictions before the subprime mortgage crisis exploded and was an executive with Washington Mutual when the now-failed bank was among the most aggressive marketers of loans to high-risk borrowers.
Jan Owen, a Democrat, also is named in a congressional inquiry into whether lawmakers and certain executives received preferential treatment for home loans, although she was not accused of wrongdoing.
Consumer advocates said they are watching Owen’s decisions carefully to see how she performs in her role as commissioner of the California Department of Corporations. The Democratic governor appointed her in December to the $143,000-a-year position, and she started in January.
Owen, 59, of West Sacramento, has a long resume in California, including stints in both business and government, but it is her history with organizations that were at the heart of the mortgage meltdown that stands out in a state that has one of the highest home foreclosure rates in the nation.
Owen served as state director of government and industry affairs at Washington Mutual from 2002 until its collapse in 2008, one of the largest bank failures in American history. It was taken over by JP Morgan Chase, where Owen stayed on as vice president of government affairs until 2009.
“It is of concern if a person who takes a job there, at that pay level in particular, has such experience, particularly with the mortgage bankers association, JPMorgan and Washington Mutual,” said Rick Jacobs, president of the Courage Campaign, which advocates on behalf of policies for poor and working-class families.
“These are big institutions, some of which don’t even exist anymore because of what they did in the mortgage business, and what they did to California,” Jacobs said. “That should be watched very carefully.”
Owen declined to be interviewed by The Associated Press for this story, but a spokesman for the Department of Corporations, Mark Leyes, responded to questions by email and telephone. He said Owen’s professional background is an asset because she understands consumer issues.
“Understanding these industries and how they function- and fail – improves the ability to regulate effectively,” Leyes said in an email.
He said the department protects consumers by licensing and regulating the network of financial services and securities businesses, including brokers, dealers, investment advisers, financial planners and lenders. Because Owen “really understands how these complex industries operate, she knows what to look for and how to crack down,” Leyes said.
Officials with several consumer groups said they were hesitant to openly criticize Owen’s background because they will have to work with her in her new role. Lawmakers similarly were hesitant because Owen’s appointment still has to be approved in the Legislature. Although Owen’s appointment requires confirmation by the state Senate, she is allowed to work for up to one year before lawmakers decide.
Some consumer advocates who have worked with Owen in the past praised her, saying she was responsive to their concerns.
Orson Aguilar, executive director of the Greenlining Institute, a Berkeley-based national policy group that advocates for racial and economic justice, said he often found himself on the opposite side of the table from Owen on consumer protection and affordable housing issues when she was an executive at Washington Mutual.
“I think people would be surprised, but definitely she was somebody who was easy to work with and she got it. She just didn’t pay lip service, she tried her hardest” to help poor communities, he said.
Before joining Washington Mutual, Owen was executive director of the California Mortgage Bankers Association from 2000 to 2002, where she worked on behalf of lenders on regulatory issues that she now is in charge of enforcing.
Owen was among those who argued against a 2001 bill that attempted to control high-interest predatory lending several years before the collapse of the housing industry, which helped propel the state’s unemployment rate to more than 12 percent during the height of the recession.
SB60 by then-Sen. Joe Dunn, a Democrat, would have required lenders to assess whether potential recipients of high-interest, high-risk loans had the means to repay them and required the attorney general to document complaints against lenders.
The bill sought to end the “abusive practices imposed upon a captive market,” according to its text.
“These abusive tactics, known as `predatory lending’ practices, range from the charging of exorbitant fees and interest rates from those least likely to afford them, to aggressive sales of costly and unnecessary services, to outright fraud aimed at forcing foreclosures and allowing seizures of property,” the bill said.
That was 2001, long before most Americans had heard about the complex lending and financial instruments that contributed to the collapse of the housing market and billions of dollars in bank bailouts.
A report that year in American Banker, a trade magazine, notes that a hearing on the bill was canceled and said Owen’s office contacted the senator to try to “work with him” on it. A newsletter for bankers association members from 2001 quotes Owen as saying the legislation and other bills like it would turn lenders away from California, which would lead to complaints that low-income buyers and the elderly could not receive loans.
“There is a fine line between protecting consumers and making the process so cumbersome and risky that lenders will simply do business elsewhere,” she said in the newsletter.
Dunn’s bill died in committee that year.
The former senator, who is now executive director of the State Bar of California, did not return a call from The Associated Press seeking comment.
Leyes, of the Department of Corporations, said industry groups argued that the law duplicated existing federal regulations, although those did not cap interest rates or fees on loans. He noted that the association did not take an official public position on the bill.
“The industry wasn’t supportive of Dunn’s bill and similar efforts that year or in that time period. Jan was employed by the association, the CMBA, and she needed to represent their point of view,” he said.
Leyes said a similar bill by then-Sen. Carole Migden passed later. The Mortgage Bankers Association also lobbied against that bill.
The association also is listed as an opponent of the California Financial Privacy Act by then-Assemblyman Tim Leslie, which sought to prohibit financial companies from sharing customers’ data unless customers opted in. That legislation, AB21, died in a committee in 2002.
The California Reinvestment Coalition is one of many groups that lobbied in the early 2000s for tighter lending standards and more restrictions on high-interest loans. Its associate director, Kevin Stein, said he did not recall whether Owen spoke out publicly against the Dunn bill but said her resume raises some concerns about whether she will be an effective advocate for consumers.
Stein called Washington Mutual a “perfect example of what happens when regulators don’t regulate.”
“So she’s aware of that, and maybe there’s some appreciation that she might have for the role that regulations can and should play,” he said.
A spokesman for the governor, Gil Duran, said is uniquely qualified to lead the department.
“Jan Owen is a highly experienced and respected commissioner with a deep knowledge of California’s complex industries and regulations. Gov. Brown picks appointees based on their qualifications,” he said.
Owen’s name also is cited in two congressional investigations.
They include a 2009 inquiry into the collapse of Countrywide Financial Corp. as a potential “Friend of Angelo” – a reference to former Countrywide chief executive Angelo Mozilo, who helped high-profile clients get discounted mortgages.
Once the country’s largest lender, Countrywide played a major role in the collapse of the housing market because it aggressively pushed complicated home loans to people with a questionable ability to repay.
An April 2003 email exchange cited as part of the House Oversight and Government Reform Committee’s investigation begins with an email message from Owen to Pete Mills, then-senior vice president of legislative and government regulatory affairs for Countrywide Home Loans.
“Don’t forget name and telephone number of the guy for refi for us,” Owen wrote.
Mills then emailed another Countrywide executive, asking him or “one of your top people,” to help Owen. In addition to noting her government affairs position at Washington Mutual, Mills refers in his email to Owen as “a good friend of Countrywide from her days as executive director at Calif. MBA.” A follow-up email urges another staffer to offer Owen a discount of half a percentage point on her loan and “no junk fees.”
Leyes said Owen does not remember ever receiving a refinancing offer from Countrywide, and public records reviewed by The Associated Press do not show her or her husband having any loans from the company for the two Sacramento-area homes they have owned.
The report concluded that Countrywide loan officers waived fees and knocked off points for VIP borrowers at no cost, saving them thousands of dollars in deals that were not available to regular applicants. It does not say whether Owen received a loan with preferential terms.
“She didn’t seek any preferential treatment even though she may have kind of innocuously asked into the terms that Countrywide provided for a refinance,” Leyes said. “What’s unfortunate is that that got included in that report back then and it didn’t get challenged or corrected at the time.”
Owen’s name also surfaced in a July 2010 House Ethics Committee investigation that cleared Rep. Laura Richardson, D-Long Beach, of wrongdoing in the foreclosure of her Sacramento home, an action that Washington Mutual later rescinded. Owen was among the bank officials who dealt with Richardson’s case.
Before she worked for the trade association and the banks, Owen was chief consultant to the Senate Banking Committee in the Legislature from 1992 to 1995, a deputy commissioner at the Department of Financial Institutions under former Gov. Gray Davis from 1996 to 1999 and acting commissioner from 1999 to 2000, when she left to head the bankers association
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Private-Equity Lobbying Helped Protect Romney’s Tax Benefits
February 07, 2012, 7:18 AM EST
By Steven Sloan
Feb. 7 (Bloomberg) — The largest U.S. private-equity funds and venture capital firms have relied on a five-year, multimillion-dollar lobbying campaign to protect the carried interest tax break that helped drive presidential candidate Mitt Romney’s 2010 effective tax rate below 14 percent.
With the issue gaining attention in this year’s U.S. presidential election campaign, the investment industry is again girding to defend its preferential tax treatment. Blackstone Group LP alone spent $5 million in 2011 lobbying Congress on issues including the tax treatment of carried interest.
“If anything preserves the status quo, it will be the very heavy lobbying campaign,” said Edward Kleinbard, a law professor at the University of Southern California. “There’s no other reason for the subsidy to survive.”
Opponents of the tax rate for carried interest see this as an opportunity to press for change. Romney released his 2010 tax returns on Jan. 24, revealing he paid an effective tax rate of 13.9 percent on income of $21.6 million.
Romney, a former Republican governor of Massachusetts and co-founder of Bain Capital LLC, has come to personify the debate over whether the carried interest paid to private-equity managers should be taxed at the capital gains rate of 15 percent while ordinary income is taxed at rates as high as 35 percent.
Tax Fairness Debate
Democrats view the carried interest issue as an element of the tax fairness theme that President Barack Obama is highlighting in his re-election campaign. Representative Sander Levin of Michigan, the top Democrat on the House Ways and Means Committee, plans to introduce a bill as soon as this week that would tax carried interest at the same rate as regular income, according to spokesman Josh Drobnyk. The bill probably won’t advance in the Republican-controlled chamber this year.
Carried interest is the profits-based compensation that private-equity managers, real estate investors and members of oil and gas partnerships often receive. They get a portion of their clients’ earnings as investment income if the underlying earnings are treated that way. Levin and Obama call carried interest compensation for work, which they say should be viewed like wages for tax purposes.
Private-equity firms invested more than $148 billion in 1,234 U.S.-based companies in 2010, according to the Private Equity Growth Capital Council. The industry says it employs more than 8 million people.
Washington Lobbyists
Companies opposed to changing the tax treatment of carried interest have hired veteran Washington lobbyists to make their case. Wayne Berman of Ogilvy Government Relations is Blackstone’s top lobbyist on the issue. He was an assistant commerce secretary during George H.W. Bush’s administration. Other Ogilvy lobbyists working for Blackstone include Drew Maloney, who was a staffer for former House Majority Whip Tom DeLay, a Texas Republican, and Moses Mercado, the former House Democratic Leader Richard Gephardt’s deputy chief of staff.
Kohlberg Kravis Roberts & Co. hired former Representative Vic Fazio, a California Democrat, to work with Congress on “tax issues affecting private-equity firms and their portfolio companies,” according to lobbying records. The New York-based private-equity company spent $150,000 in the fourth quarter on lobbyists from Akin Gump Strauss Hauer & Feld to work on issues that included tax policy.
Bain spent $80,000 during the fourth quarter to hire lobbyists from Public Strategies Washington Inc. to “monitor tax reform developments,” lobbying records show. Joseph O’Neill and Paul Snyder are lobbying for Romney’s former company.
O’Neill was chief of staff to former Senate Finance Committee Chairman Lloyd Bentsen and helped run the late Texas Democrat’s 1988 vice presidential bid. Snyder was a legislative assistant to former House Speaker Tip O’Neill, the late Massachusetts Democrat.
Budget Deficit
Raising taxes on carried interest compensation wouldn’t do much to narrow the U.S. budget deficit. In its fiscal 2012 budget request, the Obama administration said the proposal to tax carried interest as ordinary income would generate $14.8 billion over 10 years. In December, the deficit stood at almost $1.3 trillion.
The issue has divided Congress along mostly partisan lines. The last time the Senate considered a bill that would have increased taxes on carried interest — in June 2010 — every Republican voted against it, preventing the bill from advancing. Senator Ben Nelson of Nebraska was the only Democrat to oppose the legislation.
Few Defections
The same bill was passed in the House that year with 15 lawmakers in each party voting against their leaders.
As the debate over carried-interest taxation advanced in Congress, the Private Equity Growth Capital Council was formed in February 2007 so the industry could make its case more directly to lawmakers.
The group, whose members include the Carlyle Group LP, based in Washington, and New York-based Blackstone spent about $2.5 million that year lobbying Congress on issues that included measures to tax carried interest at the same rate as ordinary income. It spent $2.2 million on lobbying in 2011.
“We believe that tax policy should incentivize the kind of entrepreneurial risk-taking that private-equity firms take every day,” said Ken Spain, a spokesman for the Private Equity Growth Capital Council, a trade group based in Washington. “We remain vigilant in respect to this issue. Private equity as an asset class is going to be a topic of discussion throughout 2012.”
Spain is a former communications director for the National Republican Congressional Committee.
Comprehensive Overhaul
While the issue will be a central one in the presidential campaign and on Capitol Hill, the taxation of carried interest probably won’t change until Congress considers a comprehensive tax-code overhaul. That would be difficult to enact before 2013.
One potential challenge for private equity is something that otherwise would be seen as a favorable development for the industry: a Romney administration. Ending the preferential treatment of capital gains if Romney wins the presidency could dissolve notions that he is a captive to his former industry, said Martin Sullivan, a contributing editor at Tax Analysts, a nonprofit organization in Falls Church, Virginia.
“It will be much easier to repeal if Mitt Romney becomes president than if Mr. Obama remains president,” he said.
Still, Romney adviser Eric Fehrnstrom told reporters last month that the Republican presidential candidate thinks carried interest should be taxed at the same rate as a capital gain. The candidate has proposed eliminating the tax on capital gains for those with adjusted gross incomes of less than $200,000 a year.
‘Convoluted’ Code
Private-equity executives also rely on fairness arguments to make their case. In a Jan. 27 appearance on Bloomberg Television, Steve Pagliuca, the managing partner of Bain Capital, said the tax code is “convoluted” and “almost unintelligible.”
“We’ve got to have a fair tax code,” he said. “We don’t wake up every day saying ‘Well, what’s the tax code?’ We wake up trying to build great businesses and we pay all of the taxes that are necessary.”
Mark Heesen, president of the National Venture Capital Association, an industry trade group based in Arlington, Virginia, said his industry often reminds lawmakers of its differences from other investors such as private-equity firms. Venture capital firms typically invest in early-stage companies and don’t use as much leverage as private-equity investors do.
Creating Something
“We are able to demonstrate our belief that quintessential capital gains are all about creating something out of nothing,” he said. “That’s what venture capital does.”
Heesen said his message to Congress is that it’s important to maintain the link between carried interest and capital gains, even if the capital gains tax rate increases. Unless Congress acts, such gains will be taxed at 20 percent in 2013. High earners will face an additional 3.8 percent tax on capital gains and other unearned income as part of the 2010 health-care law.
On the other side of the issue is the AFL-CIO, which has lobbied in favor of changing how carried interest is taxed, and is prepared to do so again. Damon Silvers, the policy director for the labor organization in Washington, called the treatment of carried interest a “tax subsidy for leveraged buyouts.”
“We are going to be pressing the carried interest issue at whatever opportunity we get,” he said. “Mitt Romney’s tax returns are the world’s greatest educational tool about the impact of the carried-interest loophole.”
The AFL-CIO spent $1.1 million in 2007 to lobby Congress on issues that included a Senate bill to raise taxes on carried interest.
Lobbying on the carried-interest debate is only part of the reason the tax break has survived, said David Donnelly, the national campaigns director at the Public Campaign Action Fund, a Washington nonprofit group that tracks political contributions. Investors who are paid in carried interest are often the well-heeled donors that members of both parties turn to for campaign contributions, he said.
“I don’t think it’s simply the lobbying,” Donnelly said. “The people who are interested in this particular provision are high net-worth individuals. That’s a constituency that Congress always cares about when they have to raise money to fund their campaigns.”
–With assistance from Richard Rubin in Washington and Cristina Alesci in New York. Editors: Jodi Schneider, Robin Meszoly
To contact the reporter on this story: Steven Sloan in Washington at ssloan7@bloomberg.net
To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net
http://tourism9.com/ http://vkins.com/
By Steven Sloan
Feb. 7 (Bloomberg) — The largest U.S. private-equity funds and venture capital firms have relied on a five-year, multimillion-dollar lobbying campaign to protect the carried interest tax break that helped drive presidential candidate Mitt Romney’s 2010 effective tax rate below 14 percent.
With the issue gaining attention in this year’s U.S. presidential election campaign, the investment industry is again girding to defend its preferential tax treatment. Blackstone Group LP alone spent $5 million in 2011 lobbying Congress on issues including the tax treatment of carried interest.
“If anything preserves the status quo, it will be the very heavy lobbying campaign,” said Edward Kleinbard, a law professor at the University of Southern California. “There’s no other reason for the subsidy to survive.”
Opponents of the tax rate for carried interest see this as an opportunity to press for change. Romney released his 2010 tax returns on Jan. 24, revealing he paid an effective tax rate of 13.9 percent on income of $21.6 million.
Romney, a former Republican governor of Massachusetts and co-founder of Bain Capital LLC, has come to personify the debate over whether the carried interest paid to private-equity managers should be taxed at the capital gains rate of 15 percent while ordinary income is taxed at rates as high as 35 percent.
Tax Fairness Debate
Democrats view the carried interest issue as an element of the tax fairness theme that President Barack Obama is highlighting in his re-election campaign. Representative Sander Levin of Michigan, the top Democrat on the House Ways and Means Committee, plans to introduce a bill as soon as this week that would tax carried interest at the same rate as regular income, according to spokesman Josh Drobnyk. The bill probably won’t advance in the Republican-controlled chamber this year.
Carried interest is the profits-based compensation that private-equity managers, real estate investors and members of oil and gas partnerships often receive. They get a portion of their clients’ earnings as investment income if the underlying earnings are treated that way. Levin and Obama call carried interest compensation for work, which they say should be viewed like wages for tax purposes.
Private-equity firms invested more than $148 billion in 1,234 U.S.-based companies in 2010, according to the Private Equity Growth Capital Council. The industry says it employs more than 8 million people.
Washington Lobbyists
Companies opposed to changing the tax treatment of carried interest have hired veteran Washington lobbyists to make their case. Wayne Berman of Ogilvy Government Relations is Blackstone’s top lobbyist on the issue. He was an assistant commerce secretary during George H.W. Bush’s administration. Other Ogilvy lobbyists working for Blackstone include Drew Maloney, who was a staffer for former House Majority Whip Tom DeLay, a Texas Republican, and Moses Mercado, the former House Democratic Leader Richard Gephardt’s deputy chief of staff.
Kohlberg Kravis Roberts & Co. hired former Representative Vic Fazio, a California Democrat, to work with Congress on “tax issues affecting private-equity firms and their portfolio companies,” according to lobbying records. The New York-based private-equity company spent $150,000 in the fourth quarter on lobbyists from Akin Gump Strauss Hauer & Feld to work on issues that included tax policy.
Bain spent $80,000 during the fourth quarter to hire lobbyists from Public Strategies Washington Inc. to “monitor tax reform developments,” lobbying records show. Joseph O’Neill and Paul Snyder are lobbying for Romney’s former company.
O’Neill was chief of staff to former Senate Finance Committee Chairman Lloyd Bentsen and helped run the late Texas Democrat’s 1988 vice presidential bid. Snyder was a legislative assistant to former House Speaker Tip O’Neill, the late Massachusetts Democrat.
Budget Deficit
Raising taxes on carried interest compensation wouldn’t do much to narrow the U.S. budget deficit. In its fiscal 2012 budget request, the Obama administration said the proposal to tax carried interest as ordinary income would generate $14.8 billion over 10 years. In December, the deficit stood at almost $1.3 trillion.
The issue has divided Congress along mostly partisan lines. The last time the Senate considered a bill that would have increased taxes on carried interest — in June 2010 — every Republican voted against it, preventing the bill from advancing. Senator Ben Nelson of Nebraska was the only Democrat to oppose the legislation.
Few Defections
The same bill was passed in the House that year with 15 lawmakers in each party voting against their leaders.
As the debate over carried-interest taxation advanced in Congress, the Private Equity Growth Capital Council was formed in February 2007 so the industry could make its case more directly to lawmakers.
The group, whose members include the Carlyle Group LP, based in Washington, and New York-based Blackstone spent about $2.5 million that year lobbying Congress on issues that included measures to tax carried interest at the same rate as ordinary income. It spent $2.2 million on lobbying in 2011.
“We believe that tax policy should incentivize the kind of entrepreneurial risk-taking that private-equity firms take every day,” said Ken Spain, a spokesman for the Private Equity Growth Capital Council, a trade group based in Washington. “We remain vigilant in respect to this issue. Private equity as an asset class is going to be a topic of discussion throughout 2012.”
Spain is a former communications director for the National Republican Congressional Committee.
Comprehensive Overhaul
While the issue will be a central one in the presidential campaign and on Capitol Hill, the taxation of carried interest probably won’t change until Congress considers a comprehensive tax-code overhaul. That would be difficult to enact before 2013.
One potential challenge for private equity is something that otherwise would be seen as a favorable development for the industry: a Romney administration. Ending the preferential treatment of capital gains if Romney wins the presidency could dissolve notions that he is a captive to his former industry, said Martin Sullivan, a contributing editor at Tax Analysts, a nonprofit organization in Falls Church, Virginia.
“It will be much easier to repeal if Mitt Romney becomes president than if Mr. Obama remains president,” he said.
Still, Romney adviser Eric Fehrnstrom told reporters last month that the Republican presidential candidate thinks carried interest should be taxed at the same rate as a capital gain. The candidate has proposed eliminating the tax on capital gains for those with adjusted gross incomes of less than $200,000 a year.
‘Convoluted’ Code
Private-equity executives also rely on fairness arguments to make their case. In a Jan. 27 appearance on Bloomberg Television, Steve Pagliuca, the managing partner of Bain Capital, said the tax code is “convoluted” and “almost unintelligible.”
“We’ve got to have a fair tax code,” he said. “We don’t wake up every day saying ‘Well, what’s the tax code?’ We wake up trying to build great businesses and we pay all of the taxes that are necessary.”
Mark Heesen, president of the National Venture Capital Association, an industry trade group based in Arlington, Virginia, said his industry often reminds lawmakers of its differences from other investors such as private-equity firms. Venture capital firms typically invest in early-stage companies and don’t use as much leverage as private-equity investors do.
Creating Something
“We are able to demonstrate our belief that quintessential capital gains are all about creating something out of nothing,” he said. “That’s what venture capital does.”
Heesen said his message to Congress is that it’s important to maintain the link between carried interest and capital gains, even if the capital gains tax rate increases. Unless Congress acts, such gains will be taxed at 20 percent in 2013. High earners will face an additional 3.8 percent tax on capital gains and other unearned income as part of the 2010 health-care law.
On the other side of the issue is the AFL-CIO, which has lobbied in favor of changing how carried interest is taxed, and is prepared to do so again. Damon Silvers, the policy director for the labor organization in Washington, called the treatment of carried interest a “tax subsidy for leveraged buyouts.”
“We are going to be pressing the carried interest issue at whatever opportunity we get,” he said. “Mitt Romney’s tax returns are the world’s greatest educational tool about the impact of the carried-interest loophole.”
The AFL-CIO spent $1.1 million in 2007 to lobby Congress on issues that included a Senate bill to raise taxes on carried interest.
Lobbying on the carried-interest debate is only part of the reason the tax break has survived, said David Donnelly, the national campaigns director at the Public Campaign Action Fund, a Washington nonprofit group that tracks political contributions. Investors who are paid in carried interest are often the well-heeled donors that members of both parties turn to for campaign contributions, he said.
“I don’t think it’s simply the lobbying,” Donnelly said. “The people who are interested in this particular provision are high net-worth individuals. That’s a constituency that Congress always cares about when they have to raise money to fund their campaigns.”
–With assistance from Richard Rubin in Washington and Cristina Alesci in New York. Editors: Jodi Schneider, Robin Meszoly
To contact the reporter on this story: Steven Sloan in Washington at ssloan7@bloomberg.net
To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net
http://tourism9.com/ http://vkins.com/
2012年2月6日星期一
DENVER–(BUSINESS WIRE)–
UDR, Inc. (NYSE: UDR – News), a leading multifamily real estate investment trust, today announced its fourth quarter and full year 2011 results.
The Company generated Funds from Operations (FFO) of $80.2 million or $0.35 per diluted share for the quarter ended December 31, 2011, as compared to $53.4 million or $0.28 per diluted share in the fourth quarter of 2010. Excluding all one-time items, the Company’s fourth quarter 2011 FFO-Core would have been $0.34 per diluted share. See the reconciliation below for further detail.
For the twelve-months ended December 31, 2011, UDR generated FFO of $1.28 per diluted share as compared to $1.09 per diluted share for the twelve-months ended December 31, 2010. Excluding all one-time items, the Company’s 2011 FFO-Core would have been $1.28 per diluted share. See the reconciliation below for further detail.
A reconciliation of FFO to GAAP Net Income can be found on Attachment 2 of the Company’s fourth quarter Supplemental Financial Information.
Tom Toomey, UDR’s President and CEO stated, “We are pleased with the progress we made in further transitioning our portfolio in 2011, including $1.2 billion of acquisitions in New York City, a $500 million asset exchange that increased our presence in San Francisco and the Boston metro area, the expansion of our development and redevelopment pipeline by over $800 million and the disposition of $594 million of non-core assets. These transactions improved the Company’s portfolio by increasing our ownership interests in markets characterized by above-average job growth, low home affordability, below-average new supply risk and superior revenue growth and return prospects.” Mr. Toomey continued, “Driven by sound market fundamentals, a more advantageous geographic and asset mix and our robust operating and technology platforms, 2012 will be another strong year for UDR. As a result, the Board of Directors has approved a 10% increase in our annual common stock dividend to $0.88 per share for 2012.”
Operations
Same-store net operating income increased 7.7 percent year-over-year for the fourth quarter 2011 while same-store revenue increased 5.3 percent over the same period. Same-store physical occupancy decreased 40 basis points to 95.1 percent as compared to the prior year period. Same-store expenses increased 0.5 percent driven by an increase in utilities costs and real estate taxes. The rate of turnover increased to an annualized rate of 50 percent from 47 percent in the fourth quarter of 2010.
Sequentially, the Company’s same-store NOI increased by 2.3 percent driven by increased revenues of 0.2 percent and a 3.9 percent decrease in same-store expenses during the fourth quarter of 2011.
For the twelve-months ended December 31, 2011, the Company’s same-store revenue increased 4.1 percent as compared to the prior year while expenses increased 1.4 percent, resulting in a same-store NOI increase of 5.6 percent as compared to the prior year period. Year-over-year occupancy decreased by 20 basis points to 95.5 percent.
Technology Platform
Improving the Company’s operational efficiency, while increasing resident satisfaction, are the compelling factors for our continued investment in technology. The Company’s technology platform has gained acceptance and recognition from our residents as shown by the following utilization rates:
Development and Redevelopment Activity
As previously announced during the fourth quarter of 2011, the Company acquired land for its Village at Bella Terra development project in Huntington Beach, CA. The newly started community is projected to include 467 homes, cost $150 million and be completed in the second quarter of 2013.
In addition, the Company acquired a land parcel adjacent to its Vitruvian ParkSM development in Addison, TX for $4.7 million and a land parcel adjacent to its Garrison Square community in the Boston metro area for $4.6 million.
Joint Venture Investment Activity
As previously announced on December 21, 2011, the Company and its joint venture partner Kuwait Finance House (“KFH”) acquired 1301 Thomas Circle in Washington, D.C. for $153.8 million. The 292-home apartment community is located in the Logan Circle neighborhood near the 14th Street Corridor, is within minutes of the Mt. Vernon Square and McPherson Metro Stations and is near UDR’s wholly-owned Andover House community. The 10-story community was completed in 2006, is well-amenitized, has a 256-space parking garage and had an average monthly income per occupied home of $2,740 at the time of acquisition. Additional details related to the transaction can be found in the December 21, 2011 press release on the Company’s website at www.udr.com.
Following the purchase of 1301 Thomas Circle, there remained approximately $169 million of investment capacity under the terms of the joint venture agreement.
Disposition Activity
During the fourth quarter of 2011, the Company sold nine communities containing 2,331 homes for $275.4 million in total gross proceeds, bringing full-year 2011 asset dispositions to $593.9 million. At the time of the fourth quarter dispositions, total income per occupied home for the communities sold averaged $1,065 per month. The fourth quarter dispositions were located in a variety of markets including the Eastern Shore of Maryland, Raleigh, the East Bay area of San Francisco, the Inland Empire, San Diego, Houston and San Antonio.
Capital Markets Activity
During the fourth quarter of 2011, the Company completed a number of debt related activities aimed at managing its near term maturities and capital costs.
As previously announced, on October 25, 2011, the Company entered into a new $900 million unsecured revolving credit facility, replacing its prior $600 million facility. The new facility has an initial term of four years, includes a one-year extension option and contains an accordion feature that allows the Company to increase the facility to $1.35 billion.
Based on the Company’s credit ratings at the time of closing, the credit facility carried an interest rate equal to LIBOR plus a spread of 122.5 basis points and a facility fee of 22.5 basis points.
Coinciding with the closing of the new revolving credit facility, the Company amended and re-priced its $250 million unsecured term loan due in January 2016. The term loan was re-priced to LIBOR plus 142.5 basis points from LIBOR plus 200 basis points and its underlying covenants were aligned with those of UDR’s new revolving credit facility. Additional details related to these debt activities can be found in the October 25, 2011 press release on the Company’s website at www.udr.com.
In addition, the Company prepaid a $100.0 million secured mortgage at par in November. The mortgage had an interest rate of 6.78 percent and was originally due in May of 2012.
In the fourth quarter of 2011, the Company raised $15.5 million of equity through the sale of approximately 630 thousand shares at a weighted average net price of $24.67 per share under its “At the Market” equity offering program. In 2011, the Company raised a total of $989 million of equity from a combination of “At the Market” proceeds, a secondary offering completed in July and the issuance of operating partnership units.
Balance Sheet
At December 31, 2011, UDR had $738.7 million in availability through a combination of cash and undrawn capacity on its credit facilities. Potential sources of additional capital include the Company’s $5.0 billion of unencumbered assets (on a historical non-depreciated cost basis), 7.4 million shares available for issuance under its “At the Market” equity offering program in addition to $400 to $600 million in expected dispositions in 2012.
UDR’s total indebtedness at December 31, 2011 was $3.9 billion. The Company ended the fourth quarter with fixed-rate debt representing 73 percent of its total debt, a total blended interest rate of 4.0 percent and a weighted average maturity of 4.4 years. UDR’s fixed charge coverage ratio (adjusted for non-recurring items) was 2.6 times at year-end 2011 versus 2.3 times a year ago.
Post Quarter Activity
Joint Venture Investment Activity
On January 12, 2012, UDR formed a second real estate joint venture with MetLife (UDR/MetLife II) wherein each party owns a 50 percent interest in a $1.3 billion portfolio of 12 operating communities containing 2,528 apartment homes.
The 12 operating communities in the joint venture include seven communities from the Company’s first real estate joint venture with MetLife (UDR/MetLife I) formed on November 8, 2010, while the remaining five communities were newly acquired by UDR/MetLife II. The newly acquired communities, collectively known as Columbus Square, are recently developed, high-rise apartment buildings located on the Upper West Side of Manhattan and were purchased for $630 million. Additional details related to the transaction can be found in the January 12, 2012 press release on the Company’s website at www.udr.com.
With the closing of UDR/MetLife II, the original joint venture between the parties, UDR/MetLife I, now comprises 19 operating communities containing 3,930 homes as well as 10 vacant land parcels. Historical cost of the venture is $1.8 billion and the Company’s weighted average ownership interest in the UDR/MetLife I operating communities is now 12.6 percent and 4.0 percent for the land parcels in the venture.
Capital Markets Activity
On January 5, 2012, the Company priced a ten-year, $400 million offering of 4.625 percent senior unsecured notes under its existing shelf registration. The notes will mature on January 10, 2022. This offering fulfills the Company’s full-year 2012 guidance for $400 million in new debt issuances. A portion of this offering was used to repay $100 million of 5 percent unsecured debt originally due in January 2012. Additional details related to the transaction can be found in the January 5, 2012 press release on the Company’s website at www.udr.com.
In addition, the Company prepaid a $30.6 million mortgage at par in January 2012 that was secured by its 21 Chelsea community in Manhattan.
In January 2012, the Company raised $29.1 million of equity through the sale of approximately 1.2 million shares at a weighted average net price of $24.68 per share under its “At the Market” equity offering program.
Supplemental 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 Company’s website at www.udr.com.
Conference Call and Webcast Information
UDR will host a webcast and conference call at 11:00 a.m. EST on February 6, 2012 to discuss fourth quarter results. A webcast will be available on UDR’s website at www.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 800-762-8779 for domestic and 480-629-9771 for international and provide the following conference ID number: 4501829.
A replay of the conference call will be available through February 20, 2012, by dialing 800-406-7325 for domestic and 303-590-3030 for international and entering the confirmation number, 4501829, when prompted for the pass code.
A replay of the call will be available for 90 days on UDR’s website at www.udr.com.
Full Text of the Earnings Report and Supplemental Data
Internet — The full text of the earnings report and Supplemental Financial Information will be available on the Company’s website at www.udr.com.
Mail — For those without Internet access, the fourth quarter 2011 earnings report and Supplemental Financial Information will be available by mail or fax, on request. To receive a copy, please call UDR Investor Relations at 720-348-7762.
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,” “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, unfavorable changes in the apartment market, changing economic conditions, the impact of inflation/deflation on rental rates and property operating expenses, expectations concerning availability of capital and the stabilization of the capital markets, 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, expectations on job growth, home affordability and demand/supply ratio for multifamily housing, expectations concerning development and redevelopment activities, expectations on occupancy levels, expectations concerning the Vitruvian ParkSM development, expectations concerning the joint ventures with KFH and MetLife, expectations that automation will help grow net operating income, expectations on annualized net operating income and other risk factors discussed in documents filed by the Company with the Securities and Exchange Commission 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.
This release and these forward-looking statements include UDR’s analysis and conclusions and reflect UDR’s judgment as of the date of these materials. UDR assumes no obligation to revise or update to reflect future events or circumstances.
About UDR, Inc.
UDR, Inc. (NYSE: UDR), an S&P 400 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 properties in targeted U.S. markets. As of December 31, 2011, UDR owned or had an ownership position in 60,465 apartment homes including 2,626 homes under development. For over 39 years, UDR has delivered long-term value to shareholders, the best standard of service to residents, and the highest quality experience for associates. Additional information can be found on the Company’s website at www.udr.com.
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UDR, Inc. (NYSE: UDR – News), a leading multifamily real estate investment trust, today announced its fourth quarter and full year 2011 results.
The Company generated Funds from Operations (FFO) of $80.2 million or $0.35 per diluted share for the quarter ended December 31, 2011, as compared to $53.4 million or $0.28 per diluted share in the fourth quarter of 2010. Excluding all one-time items, the Company’s fourth quarter 2011 FFO-Core would have been $0.34 per diluted share. See the reconciliation below for further detail.
For the twelve-months ended December 31, 2011, UDR generated FFO of $1.28 per diluted share as compared to $1.09 per diluted share for the twelve-months ended December 31, 2010. Excluding all one-time items, the Company’s 2011 FFO-Core would have been $1.28 per diluted share. See the reconciliation below for further detail.
| Q4 2011 | Q4 2010 | YTD 2011 | YTD 2010 | |||||||||||||
| FFO- Core per diluted share | $ | 0.34 | $ | 0.28 | $ | 1.28 | $ | 1.13 | ||||||||
| Acquisition-related costs | (0.006 | ) | (0.001 | ) | (0.028 | ) | (0.016 | ) | ||||||||
| JV financing and acquisition fee | 0.004 | 0.005 | 0.011 | 0.006 | ||||||||||||
| Restructuring charges | (0.001 | ) | (0.035 | ) | (0.006 | ) | (0.038 | ) | ||||||||
| Storm-related expenses | - | - | - | (0.004 | ) | |||||||||||
| Costs associated with debt extinguishment | (0.002 | ) | - | (0.021 | ) | (0.007 | ) | |||||||||
| Gain on sale of assets/marketable securities | 0.014 | - | 0.046 | - | ||||||||||||
| Other | - | 0.025 | - | 0.027 | ||||||||||||
| FFO- Reported per diluted share | $ | 0.35 | $ | 0.28 | $ | 1.28 | $ | 1.09 | ||||||||
A reconciliation of FFO to GAAP Net Income can be found on Attachment 2 of the Company’s fourth quarter Supplemental Financial Information.
Tom Toomey, UDR’s President and CEO stated, “We are pleased with the progress we made in further transitioning our portfolio in 2011, including $1.2 billion of acquisitions in New York City, a $500 million asset exchange that increased our presence in San Francisco and the Boston metro area, the expansion of our development and redevelopment pipeline by over $800 million and the disposition of $594 million of non-core assets. These transactions improved the Company’s portfolio by increasing our ownership interests in markets characterized by above-average job growth, low home affordability, below-average new supply risk and superior revenue growth and return prospects.” Mr. Toomey continued, “Driven by sound market fundamentals, a more advantageous geographic and asset mix and our robust operating and technology platforms, 2012 will be another strong year for UDR. As a result, the Board of Directors has approved a 10% increase in our annual common stock dividend to $0.88 per share for 2012.”
Operations
Same-store net operating income increased 7.7 percent year-over-year for the fourth quarter 2011 while same-store revenue increased 5.3 percent over the same period. Same-store physical occupancy decreased 40 basis points to 95.1 percent as compared to the prior year period. Same-store expenses increased 0.5 percent driven by an increase in utilities costs and real estate taxes. The rate of turnover increased to an annualized rate of 50 percent from 47 percent in the fourth quarter of 2010.
| Summary Same-Store Results Fourth Quarter 2011 versus Fourth Quarter 2010 | |||||||||||||||||
| Region | Revenue Growth/ Decline | Expense Growth/ Decline | NOI Growth/ Decline | % of Same- Store Portfolio¹ | Same-Store Occupancy2 | Number of Same-Store Homes3 | |||||||||||
| Western | 6.1 | % | -2.1 | % | 10.1 | % | 38.0 | % | 94.6 | % | 11,801 | ||||||
| Mid-Atlantic | 4.6 | % | 1.5 | % | 5.9 | % | 30.4 | % | 95.8 | % | 10,130 | ||||||
| Southeastern | 4.6 | % | 3.6 | % | 5.2 | % | 23.3 | % | 94.9 | % | 12,272 | ||||||
| Southwestern | 6.2 | % | -0.8 | % | 11.4 | % | 8.3 | % | 95.1 | % | 4,477 | ||||||
| Total | 5.3 | % | 0.5 | % | 7.7 | % | 100.0 | % | 95.1 | % | 38,680 | ||||||
| 1 Based on QTD 2011 NOI. | |||||||||||||||||
| 2 Average same-store occupancy for the quarter. | |||||||||||||||||
| 3 During the fourth quarter, 38,680 apartment homes, or approximately 82 percent of 47,343 total apartment homes, were classified as same-store. The Company defines same-store as all multifamily communities owned and stabilized for at least one year as of the beginning of the most recent quarter. | |||||||||||||||||
Sequentially, the Company’s same-store NOI increased by 2.3 percent driven by increased revenues of 0.2 percent and a 3.9 percent decrease in same-store expenses during the fourth quarter of 2011.
For the twelve-months ended December 31, 2011, the Company’s same-store revenue increased 4.1 percent as compared to the prior year while expenses increased 1.4 percent, resulting in a same-store NOI increase of 5.6 percent as compared to the prior year period. Year-over-year occupancy decreased by 20 basis points to 95.5 percent.
| Summary Same-Store Results YTD 2011 versus YTD 2010 | |||||||||||||||||
| Region | Revenue Growth/ Decline | Expense Growth/ Decline | NOI Growth/ Decline | % of Same- Store Portfolio¹ | Same-Store Occupancy2 | Number of Same-Store Homes3 | |||||||||||
| Western | 4.5 | % | 0.1 | % | 6.6 | % | 37.5 | % | 95.0 | % | 11,361 | ||||||
| Mid-Atlantic | 4.2 | % | 1.6 | % | 5.5 | % | 31.0 | % | 96.2 | % | 10,130 | ||||||
| Southeastern | 3.4 | % | 3.0 | % | 3.7 | % | 23.0 | % | 95.2 | % | 11,901 | ||||||
| Southwestern | 4.3 | % | 0.8 | % | 6.8 | % | 8.5 | % | 95.7 | % | 4,477 | ||||||
| Total | 4.1 | % | 1.4 | % | 5.6 | % | 100.0 | % | 95.5 | % | 37,869 | ||||||
| 1 Based on YTD NOI. | |||||||||||||||||
| 2 Average same-store occupancy for YTD 2011. | |||||||||||||||||
| 3 During 2011, 37,869 apartment homes, or approximately 80 percent of 47,343 total apartment homes, were classified as same-store. The Company defines same-store as all multifamily communities owned and stabilized for at least one year as of the beginning of the most recent year. | |||||||||||||||||
Technology Platform
Improving the Company’s operational efficiency, while increasing resident satisfaction, are the compelling factors for our continued investment in technology. The Company’s technology platform has gained acceptance and recognition from our residents as shown by the following utilization rates:
| Established Technology Initiatives: | December 2011 | December 2010 | ||||
| Resident payments received via ACH | 77 | % | 79 | % | ||
| Service requests entered through MyUDR.com | 79 | % | 79 | % | ||
| Move-ins initiated via an internet source | 57 | % | 62 | % | ||
| Renewals completed electronically | 86 | % | 81 | % | ||
Development and Redevelopment Activity
As previously announced during the fourth quarter of 2011, the Company acquired land for its Village at Bella Terra development project in Huntington Beach, CA. The newly started community is projected to include 467 homes, cost $150 million and be completed in the second quarter of 2013.
In addition, the Company acquired a land parcel adjacent to its Vitruvian ParkSM development in Addison, TX for $4.7 million and a land parcel adjacent to its Garrison Square community in the Boston metro area for $4.6 million.
Joint Venture Investment Activity
As previously announced on December 21, 2011, the Company and its joint venture partner Kuwait Finance House (“KFH”) acquired 1301 Thomas Circle in Washington, D.C. for $153.8 million. The 292-home apartment community is located in the Logan Circle neighborhood near the 14th Street Corridor, is within minutes of the Mt. Vernon Square and McPherson Metro Stations and is near UDR’s wholly-owned Andover House community. The 10-story community was completed in 2006, is well-amenitized, has a 256-space parking garage and had an average monthly income per occupied home of $2,740 at the time of acquisition. Additional details related to the transaction can be found in the December 21, 2011 press release on the Company’s website at www.udr.com.
Following the purchase of 1301 Thomas Circle, there remained approximately $169 million of investment capacity under the terms of the joint venture agreement.
Disposition Activity
During the fourth quarter of 2011, the Company sold nine communities containing 2,331 homes for $275.4 million in total gross proceeds, bringing full-year 2011 asset dispositions to $593.9 million. At the time of the fourth quarter dispositions, total income per occupied home for the communities sold averaged $1,065 per month. The fourth quarter dispositions were located in a variety of markets including the Eastern Shore of Maryland, Raleigh, the East Bay area of San Francisco, the Inland Empire, San Diego, Houston and San Antonio.
Capital Markets Activity
During the fourth quarter of 2011, the Company completed a number of debt related activities aimed at managing its near term maturities and capital costs.
As previously announced, on October 25, 2011, the Company entered into a new $900 million unsecured revolving credit facility, replacing its prior $600 million facility. The new facility has an initial term of four years, includes a one-year extension option and contains an accordion feature that allows the Company to increase the facility to $1.35 billion.
Based on the Company’s credit ratings at the time of closing, the credit facility carried an interest rate equal to LIBOR plus a spread of 122.5 basis points and a facility fee of 22.5 basis points.
Coinciding with the closing of the new revolving credit facility, the Company amended and re-priced its $250 million unsecured term loan due in January 2016. The term loan was re-priced to LIBOR plus 142.5 basis points from LIBOR plus 200 basis points and its underlying covenants were aligned with those of UDR’s new revolving credit facility. Additional details related to these debt activities can be found in the October 25, 2011 press release on the Company’s website at www.udr.com.
In addition, the Company prepaid a $100.0 million secured mortgage at par in November. The mortgage had an interest rate of 6.78 percent and was originally due in May of 2012.
In the fourth quarter of 2011, the Company raised $15.5 million of equity through the sale of approximately 630 thousand shares at a weighted average net price of $24.67 per share under its “At the Market” equity offering program. In 2011, the Company raised a total of $989 million of equity from a combination of “At the Market” proceeds, a secondary offering completed in July and the issuance of operating partnership units.
Balance Sheet
At December 31, 2011, UDR had $738.7 million in availability through a combination of cash and undrawn capacity on its credit facilities. Potential sources of additional capital include the Company’s $5.0 billion of unencumbered assets (on a historical non-depreciated cost basis), 7.4 million shares available for issuance under its “At the Market” equity offering program in addition to $400 to $600 million in expected dispositions in 2012.
UDR’s total indebtedness at December 31, 2011 was $3.9 billion. The Company ended the fourth quarter with fixed-rate debt representing 73 percent of its total debt, a total blended interest rate of 4.0 percent and a weighted average maturity of 4.4 years. UDR’s fixed charge coverage ratio (adjusted for non-recurring items) was 2.6 times at year-end 2011 versus 2.3 times a year ago.
Post Quarter Activity
Joint Venture Investment Activity
On January 12, 2012, UDR formed a second real estate joint venture with MetLife (UDR/MetLife II) wherein each party owns a 50 percent interest in a $1.3 billion portfolio of 12 operating communities containing 2,528 apartment homes.
The 12 operating communities in the joint venture include seven communities from the Company’s first real estate joint venture with MetLife (UDR/MetLife I) formed on November 8, 2010, while the remaining five communities were newly acquired by UDR/MetLife II. The newly acquired communities, collectively known as Columbus Square, are recently developed, high-rise apartment buildings located on the Upper West Side of Manhattan and were purchased for $630 million. Additional details related to the transaction can be found in the January 12, 2012 press release on the Company’s website at www.udr.com.
With the closing of UDR/MetLife II, the original joint venture between the parties, UDR/MetLife I, now comprises 19 operating communities containing 3,930 homes as well as 10 vacant land parcels. Historical cost of the venture is $1.8 billion and the Company’s weighted average ownership interest in the UDR/MetLife I operating communities is now 12.6 percent and 4.0 percent for the land parcels in the venture.
Capital Markets Activity
On January 5, 2012, the Company priced a ten-year, $400 million offering of 4.625 percent senior unsecured notes under its existing shelf registration. The notes will mature on January 10, 2022. This offering fulfills the Company’s full-year 2012 guidance for $400 million in new debt issuances. A portion of this offering was used to repay $100 million of 5 percent unsecured debt originally due in January 2012. Additional details related to the transaction can be found in the January 5, 2012 press release on the Company’s website at www.udr.com.
In addition, the Company prepaid a $30.6 million mortgage at par in January 2012 that was secured by its 21 Chelsea community in Manhattan.
In January 2012, the Company raised $29.1 million of equity through the sale of approximately 1.2 million shares at a weighted average net price of $24.68 per share under its “At the Market” equity offering program.
| 2012 Guidance | ||||||
| Full year 2012 guidance is as follows: | ||||||
| Range | ||||||
| FFO per diluted share | $1.37 to $1.43 | |||||
| Dividend per share | $0.88 | |||||
| Same-Store Metrics: | Range | |||||
| Number of homes | 38,680 | |||||
| Revenue growth | 5.0% to 6.0% | |||||
| Expense growth | 3.0% to 3.5% | |||||
| Net operating income growth | 6.0% to 7.5% | |||||
| G&A expenses ($M) | $32 to $34 | |||||
| Recurring capital expenditures | $1,150/stabilized home | |||||
| Stabilized homes | 47,545 | |||||
| Transactional Activity ($M): | Range | Completed(1) | ||||
| Acquisitions | Market dependent | |||||
| Dispositions | $400 to $600 | |||||
| Development spend | $400 | |||||
| Redevelopment spend | $100 | |||||
| Join venture investments, net | $290 | $290 | ||||
| Financing Activity ($M): | Range | Completed(1) | ||||
| Equity | Market dependent | $29 | ||||
| Debt | $400 | $400 | ||||
| (1) As of February 6, 2012 | ||||||
| FFO Per Share GAAP Reconciliation | ||||||
| All guidance is based on current expectations of future economic conditions and the judgment of the Company’s management team. The following is a reconciliation from forecasted FFO per share to GAAP net loss per share: | ||||||
| Low | High | |||||
| Forecasted 2012 FFO Guidance per Diluted Share | $1.37 | $1.43 | ||||
| Conversion to GAAP Share Count | (0.09) | (0.09) | ||||
| Depreciation | (1.78) | (1.78) | ||||
| Non-Controlling Interests | 0.01 | 0.01 | ||||
| Preferred Dividends | (0.02) | (0.02) | ||||
| Forecasted 2012 GAAP Net Loss per Diluted Share | ($0.51) | ($0.45) | ||||
Supplemental 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 Company’s website at www.udr.com.
Conference Call and Webcast Information
UDR will host a webcast and conference call at 11:00 a.m. EST on February 6, 2012 to discuss fourth quarter results. A webcast will be available on UDR’s website at www.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 800-762-8779 for domestic and 480-629-9771 for international and provide the following conference ID number: 4501829.
A replay of the conference call will be available through February 20, 2012, by dialing 800-406-7325 for domestic and 303-590-3030 for international and entering the confirmation number, 4501829, when prompted for the pass code.
A replay of the call will be available for 90 days on UDR’s website at www.udr.com.
Full Text of the Earnings Report and Supplemental Data
Internet — The full text of the earnings report and Supplemental Financial Information will be available on the Company’s website at www.udr.com.
Mail — For those without Internet access, the fourth quarter 2011 earnings report and Supplemental Financial Information will be available by mail or fax, on request. To receive a copy, please call UDR Investor Relations at 720-348-7762.
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,” “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, unfavorable changes in the apartment market, changing economic conditions, the impact of inflation/deflation on rental rates and property operating expenses, expectations concerning availability of capital and the stabilization of the capital markets, 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, expectations on job growth, home affordability and demand/supply ratio for multifamily housing, expectations concerning development and redevelopment activities, expectations on occupancy levels, expectations concerning the Vitruvian ParkSM development, expectations concerning the joint ventures with KFH and MetLife, expectations that automation will help grow net operating income, expectations on annualized net operating income and other risk factors discussed in documents filed by the Company with the Securities and Exchange Commission 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.
This release and these forward-looking statements include UDR’s analysis and conclusions and reflect UDR’s judgment as of the date of these materials. UDR assumes no obligation to revise or update to reflect future events or circumstances.
About UDR, Inc.
UDR, Inc. (NYSE: UDR), an S&P 400 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 properties in targeted U.S. markets. As of December 31, 2011, UDR owned or had an ownership position in 60,465 apartment homes including 2,626 homes under development. For over 39 years, UDR has delivered long-term value to shareholders, the best standard of service to residents, and the highest quality experience for associates. Additional information can be found on the Company’s website at www.udr.com.
| Attachment 1 | ||||||||
| UDR, Inc. | ||||||||
| Consolidated Statements of Operations | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | Twelve Months Ended | |||||||
| December 31, | December 31, | |||||||
| In thousands, except per share amounts | 2011 | 2010 | 2011 | 2010 | ||||
| Rental income | $ 187,999 | $ 152,396 | $ 691,263 | $ 574,084 | ||||
| Rental expenses: | ||||||||
| Real estate taxes and insurance | 22,776 | 18,376 | 84,007 | 70,762 | ||||
| Personnel | 15,076 | 13,445 | 56,617 | 51,696 | ||||
| Utilities | 10,248 | 7,946 | 37,405 | 31,564 | ||||
| Repair and maintenance | 9,843 | 8,571 | 37,155 | 32,386 | ||||
| Administrative and marketing | 4,227 | 3,964 | 15,411 | 14,643 | ||||
| Property management | 5,169 | 4,191 | 19,009 | 15,788 | ||||
| Other operating expenses | 1,580 | 1,465 | 5,990 | 5,773 | ||||
| 68,919 | 57,958 | 255,594 | 222,612 | |||||
| Non-property income: | ||||||||
| Loss from unconsolidated entities | (2,092) | (1,447) | (6,352) | (4,204) | ||||
| Gain on sale of investments | 1,396 | 4,725 | 7,069 | 4,725 | ||||
| Interest and other income (1) | 3,406 | 2,049 | 10,353 | 7,777 | ||||
| 2,710 | 5,327 | 11,070 | 8,298 | |||||
| Other expenses: | ||||||||
| Real estate depreciation and amortization | 97,975 | 74,842 | 356,011 | 275,615 | ||||
| Interest | 39,030 | 35,432 | 151,144 | 140,869 | ||||
| Amortization of convertible debt premium | - | 776 | 1,077 | 1,204 | ||||
| Other debt charges (2) | 550 | 83 | 4,602 | 3,530 | ||||
| Total interest | 39,580 | 36,291 | 156,823 | 145,603 | ||||
| Acquisition-related costs | 57 | 186 | 4,828 | 2,865 | ||||
| Severance charges | 317 | 6,803 | 1,342 | 6,803 | ||||
| General and administrative | 5,747 | 10,597 | 35,440 | 39,845 | ||||
| Other depreciation and amortization | 919 | 1,088 | 3,931 | 4,843 | ||||
| 144,595 | 129,807 | 558,375 | 475,574 | |||||
| Loss from continuing operations | (22,805) | (30,042) | (111,636) | (115,804) | ||||
| Income from discontinued operations | 70,923 | 725 | 132,221 | 9,216 | ||||
| Consolidated net income/(loss) | 48,118 | (29,317) | 20,585 | (106,588) | ||||
| Net (income)/loss attributable to non-controlling interests | (1,620) | 861 | (562) | 3,689 | ||||
| Net income/(loss) attributable to UDR, Inc. | 46,498 | (28,456) | 20,023 | (102,899) | ||||
| Distributions to preferred stockholders – Series E (Convertible) | (931) | (932) | (3,724) | (3,726) | ||||
| Distributions to preferred stockholders – Series G | (1,377) | (1,437) | (5,587) | (5,762) | ||||
| (Premium)/discount on preferred stock repurchases, net | - | - | (175) | 25 | ||||
| Net income/(loss) attributable to common stockholders | $ 44,190 | $ (30,825) | $ 10,537 | $ (112,362) | ||||
| Earnings/(loss) per weighted average common share – basic and diluted: | ||||||||
| Loss from continuing operations available to common stockholders | ($0.12) | ($0.17) | ($0.60) | ($0.73) | ||||
| Income from discontinued operations | $0.33 | $0.00 | $0.66 | $0.06 | ||||
| Net Income/(loss) attributable to common stockholders | $0.20 | ($0.17) | $0.05 | ($0.68) | ||||
| Common distributions declared per share | $0.2150 | $0.185 | $0.800 | $0.730 | ||||
| Weighted average number of common shares outstanding – basic and diluted | 217,823 | 180,743 | 201,294 | 165,857 | ||||
| (1) Includes $3.2 million and $1.7 million of management fees from joint ventures during the three months ended December 31, 2011 and 2010 and $9.6 million and $3.2 million during the twelve months ended December 31, 2011 and 2010. | ||||||||
| (2) Write-off of deferred financing costs on early debt extinguishment, including $0 and $599 write-off of convertible debt premium for the three and twelve months ended December 31, 2010. | ||||||||
| Attachment 2 | ||||||||
| UDR, Inc. | ||||||||
| Funds From Operations | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | Twelve Months Ended | |||||||
| December 31, | December 31, | |||||||
| In thousands, except per share amounts | 2011 | 2010 | 2011 | 2010 | ||||
| Net income/(loss) attributable to UDR, Inc. | $ 46,498 | $ (28,456) | $ 20,023 | $ (102,899) | ||||
| Distributions to preferred stockholders | (2,308) | (2,369) | (9,311) | (9,488) | ||||
| Real estate depreciation and amortization, including discontinued operations | 98,513 | 81,922 | 370,343 | 303,446 | ||||
| Non-controlling interests | 1,620 | (861) | 562 | (3,689) | ||||
| Real estate depreciation and amortization on unconsolidated joint ventures | 2,983 | 2,323 | 11,631 | 5,698 | ||||
| Net gain on the sale of depreciable property in discontinued operations, excluding RE3 | (68,045) | (49) | (123,217) | (4,048) | ||||
| (Premium)/discount on preferred stock repurchases, net | - | - | (175) | 25 | ||||
| Funds from operations (“FFO”) – basic | $ 79,261 | $ 52,510 | $ 269,856 | $ 189,045 | ||||
| Distribution to preferred stockholders – Series E (Convertible) | 931 | 932 | 3,724 | 3,726 | ||||
| Funds from operations – diluted | $ 80,192 | $ 53,442 | $ 273,580 | $ 192,771 | ||||
| FFO per common share – basic | $ 0.35 | $ 0.28 | $ 1.29 | $ 1.10 | ||||
| FFO per common share – diluted | $ 0.35 | $ 0.28 | $ 1.28 | $ 1.09 | ||||
| Weighted average number of common shares and OP Units outstanding – basic | 227,248 | 186,041 | 208,896 | 171,569 | ||||
| Weighted average number of common shares, OP Units, and common stock equivalents outstanding – diluted | 232,405 | 191,651 | 214,086 | 176,900 | ||||
| FFO is defined as net income (computed in accordance with GAAP), excluding impairment write-downs of depreciable real estate or of investments in non-consolidated investees that are driven by measurable decreases in the fair value of depreciable real estate held by the investee, gains (or losses) from sales of depreciable property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. This definition conforms with the National Association of Real Estate Investment Trust’s definition issued in April 2002. UDR considers 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 flows as a measure of UDR’s activities in accordance with generally accepted accounting principles and is not necessarily indicative of cash available to fund cash needs. | ||||||||
| RE3 gain on sales, net of taxes, is defined as net sales proceeds less a tax provision and the gross investment basis of the asset before accumulated depreciation. We consider FFO with RE3 gain on sales, net of taxes, to be a meaningful supplemental measure of performance because the short-term use of funds produce profits which differ from the traditional long-term investment in real estate for REITs. | ||||||||
| Attachment 3 | ||||||||
| UDR, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| December 31, | December 31, | |||||||
| In thousands, except share and per share amounts | 2011 | 2010 | ||||||
| (unaudited) | (audited) | |||||||
| ASSETS | ||||||||
| Real estate owned: | ||||||||
| Real estate held for investment | $ | 7,825,725 | $ | 6,198,667 | ||||
| Less: accumulated depreciation | (1,831,157 | ) | (1,505,626 | ) | ||||
| 5,994,568 | 4,693,041 | |||||||
| Real estate under development | ||||||||
| (net of accumulated depreciation of $570 and $0) | 248,176 | 97,912 | ||||||
| Real estate held for disposition | ||||||||
| (net of accumulated depreciation of $0 and $132,700) | - | 452,068 | ||||||
| Total real estate owned, net of accumulated depreciation | 6,242,744 | 5,243,021 | ||||||
| Cash and cash equivalents | 12,503 | 9,486 | ||||||
| Marketable securities | - | 3,866 | ||||||
| Restricted cash | 24,634 | 15,447 | ||||||
| Deferred financing costs, net | 30,068 | 27,267 | ||||||
| Notes receivable | - | 7,800 | ||||||
| Investment in unconsolidated joint ventures | 213,040 | 148,057 | ||||||
| Other assets | 198,365 | 74,596 | ||||||
| Total assets | $ | 6,721,354 | $ | 5,529,540 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Secured debt | $ | 1,891,553 | $ | 1,808,746 | ||||
| Secured debt – real estate held for disposition | - | 154,924 | ||||||
| Unsecured debt | 2,026,817 | 1,603,834 | ||||||
| Real estate taxes payable | 13,397 | 14,585 | ||||||
| Accrued interest payable | 23,208 | 20,889 | ||||||
| Security deposits and prepaid rent | 35,516 | 26,046 | ||||||
| Distributions payable | 51,019 | 36,561 | ||||||
| Deferred fees and gains on the sale of depreciable property | 29,100 | 28,943 | ||||||
| Accounts payable, accrued expenses, and other liabilities | 95,485 | 105,925 | ||||||
| Total liabilities | 4,166,095 | 3,800,453 | ||||||
| Redeemable non-controlling interests in operating partnership | 236,475 | 119,057 | ||||||
| Stockholders’ equity | ||||||||
| Preferred stock, no par value; 50,000,000 shares authorized | ||||||||
| 2,803,812 shares of 8.00% Series E Cumulative Convertible issued and outstanding (2,803,812 shares at December 31, 2010) | 46,571 | 46,571 | ||||||
| 3,264,362 shares of 6.75% Series G Cumulative Redeemable issued and outstanding (3,405,562 shares at December 31, 2010) | 81,609 | 85,139 | ||||||
| Common stock, $0.01 par value; 250,000,000 shares authorized | ||||||||
| 219,650,225 shares issued and outstanding (182,496,330 shares at December 31, 2010) | 2,197 | 1,825 | ||||||
| Additional paid-in capital | 3,340,470 | 2,450,141 | ||||||
| Distributions in excess of net income | (1,142,895 | ) | (973,864 | ) | ||||
| Accumulated other comprehensive loss, net | (13,902 | ) | (3,469 | ) | ||||
| Total stockholders’ equity | 2,314,050 | 1,606,343 | ||||||
| Non-controlling interest | 4,734 | 3,687 | ||||||
| Total equity | 2,318,784 | 1,610,030 | ||||||
| Total liabilities and stockholders’ equity | $ | 6,721,354 | $ | 5,529,540 | ||||
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Starting off on the ground level, I have helped grow family business 20 years ago in India. The concept of venture financing did not exist at that time and no seed funds were available through bank loans. My father, who is my hero and role model made it seem that anything was possible if you believed in it. He knew how to grow the business organically and take manageable risks. I co-founded Serus Corporation based in Mountain View, CA, along with Barbara Hoefle who also believed in much of the same principles. What have we learnt? Some fundamentals that haven’t changed over time—fundamentals that we are very passionate about.
Create Return on Investment—the Bottomline: You have a great idea and want to start a company. What is the first thing to do? Develop an investor presentation and start looking for money? Wrong! You need to put together a product presentation and start looking for paying customers. This may seem like an impossible task at first. It is not.
Focus on a sustaining model: Start thinking about creating long-term value. Before seeking investment, you need to understand that your primary responsibility is to generate value and return 10 to 50 times the investment, within a 3 to 5 year period. Investors are in the business to make money and entrepreneurs are in business to innovate.
Investment alone is NOT going to help: It saddens me to see today’s entrepreneurs’ first task while starting a company is to seek investment. It almost seems like obtaining venture capital is the main goal of starting the company. This is quite like thinking that you want to buy a house because your goal is to get a mortgage loan. The goal is NOT the mortgage, the goal is to improve your living conditions or to make an investment by buying the house. A mortgage loan just enables you to achieve that goal. The aim of starting a company should be to satisfy a market need that would in turn nurture the life of your company. Venture funds should only be to enable you to achieve that goal.
Measure Revenue-per-employee and profits: In failing to educate young entrepreneurs of their responsibility when seeking investment, we will continue to create companies doomed to fail rather than succeed. Avoid falling into the hole that many companies have fallen into during the last few years. Entrepreneurs need to stop getting carried away with investor pitches. Example: The very famous ideal “hockey stick” financial growth plan that everyone knows is just that—ideal.
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Create Return on Investment—the Bottomline: You have a great idea and want to start a company. What is the first thing to do? Develop an investor presentation and start looking for money? Wrong! You need to put together a product presentation and start looking for paying customers. This may seem like an impossible task at first. It is not.
Focus on a sustaining model: Start thinking about creating long-term value. Before seeking investment, you need to understand that your primary responsibility is to generate value and return 10 to 50 times the investment, within a 3 to 5 year period. Investors are in the business to make money and entrepreneurs are in business to innovate.
Investment alone is NOT going to help: It saddens me to see today’s entrepreneurs’ first task while starting a company is to seek investment. It almost seems like obtaining venture capital is the main goal of starting the company. This is quite like thinking that you want to buy a house because your goal is to get a mortgage loan. The goal is NOT the mortgage, the goal is to improve your living conditions or to make an investment by buying the house. A mortgage loan just enables you to achieve that goal. The aim of starting a company should be to satisfy a market need that would in turn nurture the life of your company. Venture funds should only be to enable you to achieve that goal.
Measure Revenue-per-employee and profits: In failing to educate young entrepreneurs of their responsibility when seeking investment, we will continue to create companies doomed to fail rather than succeed. Avoid falling into the hole that many companies have fallen into during the last few years. Entrepreneurs need to stop getting carried away with investor pitches. Example: The very famous ideal “hockey stick” financial growth plan that everyone knows is just that—ideal.
http://tourism9.cm/ http://vkins.com/
2012年1月23日星期一
Leader of investigation accused of trying to protect his party members
WASHINGTON — The California congressman leading the investigation into whether members of Congress and other government officials received sweetheart home loans from Countrywide Financial Corp. has been accused of trying to protect Republican lawmakers caught up in the probe.
Rep. Darrell Issa, chairman of the House Oversight and Government Reform Committee, said he hoped to get answers to “outstanding public-interest questions” when he issued a subpoena for records about Countrywide’s VIP discount program last year.
“The American people have a right to know the totality of who participated in the Countrywide’s VIP program and what they did in return for access to it,” Issa, R-Vista, said at the time.
But Issa’s committee has declined to publicly reveal the names of three House members whom the subpoenaed records indicate received the discounted loans. Instead, Issa has forwarded the lawmakers’ names to the House ethics committee for review, a practice he previously had condemned.
The House ethics panel operates in private, and the names became public only after they were leaked to the news media and confirmed by the lawmakers themselves. Rep. Elton Gallegly, R-Simi Valley, reportedly received the discounted loans.
Maryland Rep. Elijah Cummings, the oversight committee’s top Democrat, suggested in a letter to Issa last week that he had changed course because the three members in question are Republicans. Rep. Edolphus Towns, D-N.Y., got a discounted loan, but his ties to the program were made public in 2009.
Issa’s spokesman, Frederick Hill, called Cummings’ accusations “a distortion of the facts.”
“The point that Congressman Issa has consistently made is that it is not the purpose of the oversight committee’s investigation to make judgments about members of Congress, whether or not they acted appropriately,” Hill said. “That task basically goes to the ethics committee.
“The purpose of the (oversight) committee’s investigation is to basically look at what happened on a factual basis within the Countrywide VIP program.”
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Rep. Darrell Issa, chairman of the House Oversight and Government Reform Committee, said he hoped to get answers to “outstanding public-interest questions” when he issued a subpoena for records about Countrywide’s VIP discount program last year.
“The American people have a right to know the totality of who participated in the Countrywide’s VIP program and what they did in return for access to it,” Issa, R-Vista, said at the time.
But Issa’s committee has declined to publicly reveal the names of three House members whom the subpoenaed records indicate received the discounted loans. Instead, Issa has forwarded the lawmakers’ names to the House ethics committee for review, a practice he previously had condemned.
The House ethics panel operates in private, and the names became public only after they were leaked to the news media and confirmed by the lawmakers themselves. Rep. Elton Gallegly, R-Simi Valley, reportedly received the discounted loans.
Maryland Rep. Elijah Cummings, the oversight committee’s top Democrat, suggested in a letter to Issa last week that he had changed course because the three members in question are Republicans. Rep. Edolphus Towns, D-N.Y., got a discounted loan, but his ties to the program were made public in 2009.
Issa’s spokesman, Frederick Hill, called Cummings’ accusations “a distortion of the facts.”
“The point that Congressman Issa has consistently made is that it is not the purpose of the oversight committee’s investigation to make judgments about members of Congress, whether or not they acted appropriately,” Hill said. “That task basically goes to the ethics committee.
“The purpose of the (oversight) committee’s investigation is to basically look at what happened on a factual basis within the Countrywide VIP program.”
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Friends of Angelo, Part 2
Four lawmakers have been referred to the House Ethics Committee for receiving special mortgage loans from the notorious “V.I.P.” program of Countrywide Financial. Ethics rules require members to accept loans only “on terms generally available to the public.” It should be of great interest for the public, particularly those mired in mortgage trouble, to see if anything comes out of the Congressional investigation.
The loans were uncovered in a three-year-long inquiry by Representative Darrell Issa, the Republican chairman of the House oversight committee. He denounced Countrywide’s program as a source of “bribery” and “public corruption” when Democrats seemed to be the beneficiaries of the mortgage company’s largess. Now that three of the four House members referred to the ethics committee are Republicans, Democrats are urging Mr. Issa to keep up the good work.
The lawmakers have been identified in news reports as Howard McKeon and Elton Gallegly, both Republicans of California; Pete Sessions, Republican of Texas and the party’s Congressional campaign chairman; and Edolphus Towns, Democrat of New York. All have denied seeking or knowing about the “Friends of Angelo” program set up by Angelo Mozilo, former head of Countrywide.
Mr. Issa is vowing to press forward with his investigation of the loans, wherever it leads, his office insisted. The public should hope for similar dedication from the Ethics Committee.
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The lawmakers have been identified in news reports as Howard McKeon and Elton Gallegly, both Republicans of California; Pete Sessions, Republican of Texas and the party’s Congressional campaign chairman; and Edolphus Towns, Democrat of New York. All have denied seeking or knowing about the “Friends of Angelo” program set up by Angelo Mozilo, former head of Countrywide.
Mr. Issa is vowing to press forward with his investigation of the loans, wherever it leads, his office insisted. The public should hope for similar dedication from the Ethics Committee.
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2012年1月19日星期四
Families of College Bound Students: Tips on Financial Aid Forms
For parents of college students and prospective college students (Fall of 2012), financial aid forms need to be submitted soon. Typically financial aid forms for prospective students are due in January or February, while forms for returning students are due in March or April. Be sure to check the deadlines for each school where the student is applying and/or attending. Depending on the school there may be multiple forms to fill out. The first step is to determine which forms are needed:
For prospective students, beginning in the Fall of 2011 all colleges are required to post a “net price calculator” on their websites that help families figure out what freshman year will cost. The calculations are designed to be an estimate; the financial aid office will have the final say on the actual financial aid award. It is based on the “Expected Family Contribution” computed based on information on the FAFSA form.
The process of financial aid should also involve investigating grant opportunities from sources other than the college. There are numerous opportunities for scholarship and grants and many have a separate application process. School guidance offices are often the best place to start the investigation.
In addition to financial aid, there are several tax advantages for the families of college students. The American Opportunity Credit replaces the Hope Credit through 2012. The American Opportunity Credit is a maximum tax credit of $2,500 and has a higher income limit qualification than other tax benefits. Read IRS Publication 970, “Tax Benefits for Education” to determine if you are eligible. Other tax benefits may be available to you depending on your circumstances.
FPA Member Jeanne Gibson Sullivan, CFP®, is a financial planner and principal of Financially in Tune in Wakefield, MA and a parent of two sons – a freshman in college and a high school junior.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.- Free Application for Federal Student Aid (FAFSA) Form: This is the basic form required for financial aid at all colleges including all federal student loans, such as Stafford Loans and PLUS loans. The FAFSA form asks for information such as student and parent income and assets, but does not take into consideration retirement assets or the equity in the primary residence. The FAFSA will determine the family’s “Expected Family Contribution”, which is the amount that the family is thought to be able to pay – often a higher number than the parent thinks they can afford! Information and forms can be found at www.fafsa.ed.gov . Even if the family does not think they are eligible for need-based aid, but wants to access Stafford loans and PLUS loans, the FAFSA must be filled out. Certain merit scholarships may also require completion of the FAFSA forms.
- Stafford Loans: Most students who fill out a FAFSA form are eligible for unsubsidized Stafford loans. First year students can borrow up to $5,500. The interest rate on unsubsidized loans is currently 6.8 percent and is not based on the applicant’s credit score. Need-based subsidized Stafford loans now have an interest rate of 3.4 percent in 2011-12 and the interest does not accrue while the student is in school.
- Federal Direct PLUS Loan: Parents can also borrow through the Direct PLUS program. Parents can borrow up to the cost of attendance less any other financial aid received. The interest rate is presently 7.9 percent and is charged beginning with the disbursement of the loan. Please note that certain fees apply to these lending programs, so read the details carefully.
- CSS PROFILE Form: Some private colleges use a different methodology for calculating financial aid and require the College Board’s CSS PROFILE form. A list of schools requiring the CSS PROFILE form can be found on the College Board website . The CSS PROFILE form asks more detailed and broader financial questions than the FAFSA and takes into account other factors such as the equity in your house. Some schools may also request a copy of a tax return, so if possible, try to get your taxes done early.
- Additional Forms: Occasionally a college may require supplemental information, so be sure to check with the school.
For prospective students, beginning in the Fall of 2011 all colleges are required to post a “net price calculator” on their websites that help families figure out what freshman year will cost. The calculations are designed to be an estimate; the financial aid office will have the final say on the actual financial aid award. It is based on the “Expected Family Contribution” computed based on information on the FAFSA form.
The process of financial aid should also involve investigating grant opportunities from sources other than the college. There are numerous opportunities for scholarship and grants and many have a separate application process. School guidance offices are often the best place to start the investigation.
In addition to financial aid, there are several tax advantages for the families of college students. The American Opportunity Credit replaces the Hope Credit through 2012. The American Opportunity Credit is a maximum tax credit of $2,500 and has a higher income limit qualification than other tax benefits. Read IRS Publication 970, “Tax Benefits for Education” to determine if you are eligible. Other tax benefits may be available to you depending on your circumstances.
FPA Member Jeanne Gibson Sullivan, CFP®, is a financial planner and principal of Financially in Tune in Wakefield, MA and a parent of two sons – a freshman in college and a high school junior.
http://tourism9.com/ http://vkins.com/
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