Discontinued Operations (UNITED DOMINION REALTY, L.P.)

6 Months Ended

Jun. 30, 2013

Entity Information [Line Items]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

Discontinued operations represent properties that UDR has either sold or which management believes meet the criteria to be classified as held for sale. In order to be classified as held for sale and reported as discontinued operations, a property’s operations and cash flows have been or will be divested to a third party by the Company whereby UDR will not have any continuing involvement in the ownership or operation of the property after the sale or disposition. The results of operations of the property are presented as discontinued operations for all periods presented and do not impact the net earnings reported by the Company. Once a property is deemed as held for sale, depreciation is no longer recorded. However, if the Company determines that the property no longer meets the criteria of held for sale, the Company will recapture any unrecorded depreciation for the property. The assets and liabilities of properties classified as held for sale are presented separately on the Consolidated Balance Sheets at the lower of their carrying amount or their estimated fair value less the costs to sell the assets.

There were no sales during the three and six months endedJune 30, 2013 that met the criteria to be reported as discontinued operations. In addition, the Company had no communities at June 30, 2013 that met the criteria to be classified as held for sale. During the three and six months endedJune 30, 2012, the Company sold 15 communities with 4,931 apartment homes and 21 communities with 6,507 apartment homes, respectively. During the three and six months endedJune 30, 2012, UDR recognized gains (before tax) on the sale of communities for financial reporting purposes of $180.9 million and $261.4 million, respectively, which are included in discontinued operations. The results of operations for sold properties are classified on the Consolidated Statements of Operations in the line item entitled “Income from discontinued operations, net of tax.”

The following is a summary of income from discontinued operations, net of tax for the three and six months ended June 30, 2013 and 2012 (dollars in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Rental income	$	—	$	13,215	$	—	$	30,316
Rental expenses	—		4,637		—		10,566
Property management	—		364		—		834
Real estate depreciation	—		—		—		6,340
Interest and other (income)/expense, net	—		791		—		791
	—		5,792		—		18,531
Income before net gain on the sale of depreciable property	—		7,423		—		11,785
Net gain on the sale of depreciable property, net of tax	—		172,006		—		252,531
Income from discontinued operations, net of tax	$	—	$	179,429	$	—	$	264,316
Income from discontinued operations attributable to UDR, Inc., net of tax	$	—	$	172,643	$	—	$	254,179

United Dominion Reality L.P. [Member]

Entity Information [Line Items]

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

Discontinued operations represent properties that the Operating Partnership has either sold or which management believes meet the criteria to be classified as held for sale. In order to be classified as held for sale and reported as discontinued operations, a property’s operations and cash flows have or will be divested to a third party by the Operating Partnership whereby the Operating Partnership will not have any significant continuing involvement in the ownership or operation of the property after the sale or disposition. The results of operations of the property are presented as discontinued operations for all periods presented and do not impact the net earnings reported by the Operating Partnership. Once a property is deemed as held for sale, depreciation is no longer recorded. However, if the Operating Partnership determines that the property no longer meets the criteria of held for sale, the Operating Partnership will recapture any unrecorded depreciation for the property. The assets and liabilities of properties deemed as held for sale are presented separately on the Consolidated Balance Sheets. Properties deemed as held for sale are reported at the lower of their carrying amount or their estimated fair value less the costs to sell the assets.

During the three and six months endedJune 30, 2013, the Operating Partnership did not dispose of any communities. During the three and six months ended June 30, 2012, the Operating Partnership sold four communities with 1,314 apartment homes. At June 30, 2013, the Operating Partnership had no communities that met the criteria to be classified as held for sale and included in discontinued operations.

During the three and six months endedJune 30, 2012, the Operating Partnership recognized a net gain on the sale of communities for financial reporting purposes of $51.3 million and $51.2 million, respectively, which is included in discontinued operations. The results of operations for these properties are classified in the Consolidated Statements of Operations in the line item entitled “Income from discontinued operations.”

The following is a summary of income from discontinued operations for the three and six months ended June 30, 2013 and 2012 (dollars in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Rental income	$	—	$	3,377	$	—	$	6,750
Rental expenses	—		1,178		—		2,247
Property management	—		93		—		186
Real estate depreciation	—		—		—		1,205
	—		1,271		—		3,638
Income before net gain on the sale of depreciable property	—		2,106		—		3,112
Net gain on the sale of depreciable property	—		51,266		—		51,182
Income from discontinued operations	$	—	$	53,372	$	—	$	54,294