Toggle SGML Header (+)


Section 1: 8-K (8-K)

eqr-8k_20190730.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 30, 2019

 

EQUITY RESIDENTIAL

(Exact Name of Registrant as Specified in its Charter)

 

 

Maryland

1-12252

13-3675988

(State or Other Jurisdiction

of Incorporation or Organization)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

 

 

Two North Riverside Plaza

Chicago, Illinois

60606

 

 

(Address of Principal Executive Offices)

(Zip Code)

 

Registrant's telephone number, including area code: (312) 474-1300

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Shares of Beneficial Interest,
$0.01 Par Value

 

EQR

 

New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 


 

Item 2.02.  Results of Operations and Financial Condition.

On July 30, 2019, Equity Residential issued a press release announcing its results of operations and financial condition as of June 30, 2019 and for the six months and quarter then ended. The press release is furnished as Exhibit 99.1. The information contained in this Item 2.02 on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by Equity Residential under the Securities Act of 1933, as amended.

Item 9.01.  Financial Statements and Exhibits.

 

Exhibit

Number

 

Exhibit

 

 

 

99.1

 

Press Release dated July 30, 2019, announcing the results of operations and financial condition of Equity Residential as of June 30, 2019 and for the six months and quarter then ended.

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

EQUITY RESIDENTIAL

 

 

 

 

Date: July 30, 2019

 

By:

/s/ Ian S. Kaufman

 

 

Name:

Ian S. Kaufman

 

 

Its:

Senior Vice President and Chief Accounting Officer

 

 

 

(Principal Accounting Officer)

 

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

eqr-ex991_22.htm

 

 

 

 

 

 


 

 

Second Quarter 2019 Results

Table of Contents

Earnings Release

 

1 – 5

Consolidated Statements of Operations

 

6

Consolidated Statements of Funds From Operations and Normalized

Funds From Operations

 

7

Consolidated Balance Sheets

 

8

Portfolio Summary

 

9

Portfolio Rollforward

 

10

Same Store Results

 

11 - 16

Debt Summary

 

17 – 19

Capital Structure

 

20

Common Share and Unit Weighted Average Amounts Outstanding

 

21

Development and Lease-Up Projects

 

22

Capital Expenditures to Real Estate

 

23

Normalized EBITDAre Reconciliations

 

24

Adjustments from FFO to Normalized FFO

 

25

Normalized FFO Guidance and Assumptions

 

26

Additional Reconciliations and Definitions of Non-GAAP

Financial Measures and Other Terms

 

27 - 31



Corporate Headquarters:
Two North Riverside Plaza
Chicago, IL 60606
(312) 474-1300


Information included in this supplemental package is unaudited.

 

 

 

 

 


Table of Contents

 

 

 

 

 

NEWS RELEASE - FOR IMMEDIATE RELEASE

 

July 30, 2019

 

Equity Residential Reports Second Quarter 2019 Results

Raises Full Year Guidance

 

Chicago, IL – July 30, 2019 - Equity Residential (NYSE: EQR) today reported results for the quarter and six months ended June 30, 2019.  All per share results are reported as available to common shares/units on a diluted basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended June 30,

 

 

 

 

 

2019

 

 

2018

 

 

$ Change

 

 

% Change

 

 

 

Earnings Per Share (EPS)

 

$

0.83

 

 

$

0.31

 

 

$

0.52

 

 

 

167.7

%

 

 

Funds from Operations (FFO) per share

 

$

0.80

 

 

$

0.81

 

 

$

(0.01

)

 

 

(1.2

%)

 

 

Normalized FFO per share

 

$

0.86

 

 

$

0.81

 

 

$

0.05

 

 

 

6.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

 

 

 

2019

 

 

2018

 

 

$ Change

 

 

% Change

 

 

 

Earnings Per Share (EPS)

 

$

1.11

 

 

$

0.88

 

 

$

0.23

 

 

 

26.1

%

 

 

Funds from Operations (FFO) per share

 

$

1.61

 

 

$

1.52

 

 

$

0.09

 

 

 

5.9

%

 

 

Normalized FFO per share

 

$

1.67

 

 

$

1.58

 

 

$

0.09

 

 

 

5.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“Our operating results in the second quarter exceeded even our prior elevated expectations, led by improving results in our East Coast markets and Seattle and continued strength in our California markets,” said Mark J. Parrell, Equity Residential’s President and CEO.  “The story in our business continues to be nearly limitless demand for the high quality lifestyle that our urban and dense suburban apartment properties and dedicated property teams provide. Based on this strong demand and the lowest second quarter turnover in our history, we are pleased to increase our full year same store revenue, NOI and Normalized FFO per share guidance ranges, with the new midpoints above the top end of our prior ranges.”  

 

Highlights

 

 

The Company produced same store revenue growth of 3.5% for the second quarter of 2019, which was above its expectations, with Physical Occupancy of 96.6% and Renewal Rate Achieved growth of 5.1%.

 

 

The Company produced Normalized FFO per share growth of 6.2% for the second quarter of 2019.

 

1


Table of Contents

 

During the second quarter of 2019, the Company acquired three apartment properties, totaling 1,065 apartment units, for an aggregate purchase price of approximately $376.0 million.

 

 

During the second quarter of 2019, the Company issued $600.0 million of unsecured notes at a coupon rate of 3.0%, one of the lowest ten-year coupons in the Company’s and the REIT industry’s history.

 

Results Per Share

The change in EPS for both the quarter and six months ended June 30, 2019 compared to the same periods of 2018, are due primarily to higher property and unconsolidated sale gains in the second quarter of 2019, the various adjustment items listed on page 25 of this release and the items described below.

 

The per share changes in FFO for both the quarter and six months ended June 30, 2019 compared to the same periods of 2018, are due primarily to the various adjustment items listed on page 25 of this release and the items described below.

 

The per share changes in Normalized FFO are due primarily to:

 

 

 

Positive/(Negative) Impact

 

 

 

Second Quarter 2019 vs.

Second Quarter 2018

 

 

June YTD 2019 vs.

June YTD 2018

 

Same Store Net Operating Income (NOI)

 

$

0.04

 

 

$

0.07

 

Lease-Up NOI and other non-same store NOI

 

 

0.01

 

 

 

0.02

 

2019 and 2018 transaction activity impact on NOI

 

 

0.01

 

 

 

0.02

 

Other items, including corporate overhead 1

 

 

(0.01

)

 

 

(0.02

)

Net

 

$

0.05

 

 

$

0.09

 

 

1 Corporate overhead includes property management and general and administrative expenses.

 

The Company has a glossary of defined terms and related reconciliations of Non-GAAP financial measures on pages 27 through 31 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 7, 28 and 29 of this release and the Company has included guidance for 2019 Normalized FFO per share on page 26 and 2019 FFO per share and 2019 EPS on page 29 of this release.

 

Same Store Results

The following table shows the increases in same store results for the second quarter 2019 to second quarter 2018 comparison, which includes 74,236 apartment units, and for the six months ended June 30, 2019 to six months ended June 30, 2018 comparison, which includes 73,609 apartment units. The Company’s Physical Occupancy was 96.6% compared to 96.2% for the second quarter of 2019 and 2018, respectively, and 96.4% compared to 96.1% for the first six months of 2019 and 2018, respectively.

 

 

 

Second Quarter 2019 vs.

Second Quarter 2018

 

 

June YTD 2019 vs.

June YTD 2018

 

Revenues

 

3.5%

 

 

3.3%

 

Expenses

 

3.3%

 

 

3.9%

 

NOI

 

3.6%

 

 

3.1%

 

 

Investment Activity

The Company acquired three apartment properties during the second quarter of 2019, totaling 1,065 apartment units, for an aggregate purchase price of approximately $376.0 million at a weighted average Acquisition Capitalization Rate of 4.9%. The properties are located in suburban Washington, D.C., suburban Denver and San Jose, CA.

 

2


Table of Contents

The Company sold two wholly owned properties during the second quarter of 2019, totaling 561 apartment units, for an aggregate sale price of approximately $402.8 million at a weighted average Disposition Yield of 4.4%, generating an Unlevered IRR of 8.6%. The properties are located in New York and Boston. Also during the second quarter of 2019, the Company sold two unconsolidated properties, totaling 945 apartment units, for an aggregate sale price of approximately $394.5 million at a weighted average Disposition Yield of 4.7%, received net proceeds of approximately $78.3 million and recognized a GAAP gain on sale of approximately $69.5 million from these sales. The properties are located in San Jose, CA and South Florida.

 

During the first six months of 2019, the Company acquired six properties, totaling 1,644 apartment units, for an aggregate purchase price of approximately $634.7 million at a weighted average Acquisition Capitalization Rate of 4.8%.  The Company did not sell any properties in the first quarter of 2019.  Therefore, year-to-date 2019 disposition activity is the same as listed above for the second quarter 2019.

 

Capital Markets Activity    

On June 26, 2019, the Company issued $600.0 million of 10-year unsecured notes at a coupon rate of 3.0%. After the effect of the termination of certain interest rate hedges, underwriters’ fees and other costs associated with the offering, the all-in effective rate of the notes is approximately 3.85%. Proceeds were used to repay a portion of $950.0 million in secured and unsecured debt that was paid off on July 1, 2019. See page 18 of this release for more details.

 

Third Quarter 2019 Guidance

The Company has established guidance ranges for the third quarter of 2019 EPS, FFO per share and Normalized FFO per share as listed below:

 

 

Q3 2019

Guidance

EPS

 

$0.71 to $0.75

FFO per share

 

$0.87 to $0.91

Normalized FFO per share

 

$0.87 to $0.91

 

The difference between the second quarter 2019 actual EPS of $0.83 and the third quarter 2019 EPS guidance midpoint of $0.73 is due primarily to lower expected property and unconsolidated sale gains, offset by lower expected debt extinguishment costs and the items described below.

 

The difference between the second quarter 2019 actual FFO of $0.80 per share and the third quarter 2019 FFO guidance midpoint of $0.89 per share is due primarily to lower expected debt extinguishment costs and the items described below.

 

The difference between the second quarter 2019 actual Normalized FFO of $0.86 per share and the third quarter 2019 Normalized FFO guidance midpoint of $0.89 per share is due primarily to:

 

 

 

Positive/(Negative)

Impact

 

 

 

 

Third Quarter 2019 vs.

Second Quarter 2019

 

 

Same Store NOI

 

$

0.01

 

 

2019 and 2018 transaction activity impact on NOI

 

 

0.01

 

 

Corporate overhead

 

 

0.01

 

 

Net

 

$

0.03

 

 

 

 

 

 

 

 

3


Table of Contents

Full Year 2019 Guidance

The Company has revised its guidance for its full year 2019 same store operating performance, EPS, FFO per share, Normalized FFO per share and transactions as listed below:

 

 

 

Revised

 

 

Previous

 

Same Store:

 

 

 

 

 

 

 

 

Physical Occupancy

 

96.4%

 

 

96.2%

 

Revenue change

 

3.1% to 3.5%

 

 

2.2% to 3.2%

 

Expense change

 

3.5% to 4.0%

 

 

3.5% to 4.5%

 

NOI change

 

2.7% to 3.5%

 

 

1.5% to 3.0%

 

 

 

 

 

 

 

 

 

 

EPS

 

$2.48 to $2.54

 

 

$1.94 to $2.04

 

FFO per share

 

$3.36 to $3.42

 

 

$3.26 to $3.36

 

Normalized FFO per share

 

$3.43 to $3.49

 

 

$3.34 to $3.44

 

 

 

 

 

 

 

 

 

 

Transactions:

 

 

 

 

 

 

 

 

Consolidated rental acquisitions

 

$1.0 billion

 

 

$700.0 million

 

Consolidated rental dispositions

 

$1.0 billion

 

 

$700.0 million

 

Transaction Accretion (Dilution)

 

None

 

 

(25 basis points)

 

 

 

The change in the full year 2019 EPS guidance range is due primarily to higher expected property and unconsolidated sale gains and the items described below.

 

The change in the full year 2019 FFO per share guidance range is due primarily to the items described below.

 

The change in the full year 2019 Normalized FFO per share guidance range is due primarily to:

 

 

 

Positive/(Negative)

Impact

 

 

 

 

Revised Full Year 2019 vs.

Previous Full Year 2019

 

 

Same Store NOI

 

$

0.04

 

 

2019 and 2018 transaction activity impact on NOI

 

 

0.03

 

 

Interest expense

 

 

0.01

 

 

Other items, including corporate overhead

 

 

(0.01

)

 

Net

 

$

0.07

 

 

 

Third Quarter 2019 Earnings and Conference Call

Equity Residential expects to announce its third quarter 2019 results on Tuesday, October 22, 2019 and host a conference call to discuss those results at 10:00 a.m. CT on Wednesday, October 23, 2019.

 

About Equity Residential

Equity Residential is an S&P 500 company focused on the acquisition, development and management of rental apartment properties located in urban and high-density suburban markets where today’s renters want to live, work and play.  Equity Residential owns or has investments in 309 properties consisting of 79,624 apartment units, primarily located in Boston, New York, Washington, D.C., Seattle, San Francisco, Southern California and Denver.  For more information on Equity Residential, please visit our website at www.equityapartments.com.

 

4


Table of Contents

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements and information within the meaning of the federal securities laws.  These statements are based on current expectations, estimates, projections and assumptions made by management.  While Equity Residential’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, including, without limitation, changes in general market conditions, including the rate of job growth and cost of labor and construction material, the level of new multifamily construction and development, competition and local government regulation.  Other risks and uncertainties are described under the heading “Risk Factors” in our Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityapartments.com.  Many of these uncertainties and risks are difficult to predict and beyond management’s control.  Forward-looking statements are not guarantees of future performance, results or events.  Equity Residential assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

 

A live web cast of the Company’s conference call discussing these results will take place tomorrow, Wednesday, July 31, at 10:00 a.m. CT.  Please visit the Investor section of the Company’s web site at www.equityapartments.com for the link.  A replay of the web cast will be available for two weeks at this site.

 

5


Table of Contents

Equity Residential

Consolidated Statements of Operations

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

Quarter Ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

1,331,676

 

 

$

1,272,451

 

 

$

669,374

 

 

$

639,620

 

Fee and asset management

 

 

335

 

 

 

373

 

 

 

143

 

 

 

188

 

Total revenues

 

 

1,332,011

 

 

 

1,272,824

 

 

 

669,517

 

 

 

639,808

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and maintenance

 

 

223,531

 

 

 

211,946

 

 

 

108,461

 

 

 

103,744

 

Real estate taxes and insurance

 

 

182,888

 

 

 

181,396

 

 

 

91,446

 

 

 

89,482

 

Property management

 

 

50,765

 

 

 

46,928

 

 

 

24,369

 

 

 

23,484

 

General and administrative

 

 

29,710

 

 

 

28,780

 

 

 

14,329

 

 

 

12,502

 

Depreciation

 

 

404,723

 

 

 

389,251

 

 

 

200,508

 

 

 

192,942

 

Total expenses

 

 

891,617

 

 

 

858,301

 

 

 

439,113

 

 

 

422,154

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on sales of real estate properties

 

 

138,835

 

 

 

142,162

 

 

 

138,856

 

 

 

(51

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

579,229

 

 

 

556,685

 

 

 

369,260

 

 

 

217,603

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

1,590

 

 

 

6,996

 

 

 

1,009

 

 

 

1,116

 

Other expenses

 

 

(8,392

)

 

 

(7,210

)

 

 

(5,117

)

 

 

(3,769

)

Interest:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense incurred, net

 

 

(203,840

)

 

 

(210,235

)

 

 

(108,902

)

 

 

(94,131

)

Amortization of deferred financing costs

 

 

(5,783

)

 

 

(5,778

)

 

 

(3,647

)

 

 

(2,099

)

Income before income and other taxes, income (loss) from

   investments in unconsolidated entities and net gain (loss)

   on sales of land parcels

 

 

362,804

 

 

 

340,458

 

 

 

252,603

 

 

 

118,720

 

Income and other tax (expense) benefit

 

 

(484

)

 

 

(487

)

 

 

(246

)

 

 

(274

)

Income (loss) from investments in unconsolidated entities

 

 

68,058

 

 

 

(2,008

)

 

 

68,765

 

 

 

(1,031

)

Net gain (loss) on sales of land parcels

 

 

178

 

 

 

995

 

 

 

177

 

 

 

995

 

Net income

 

 

430,556

 

 

 

338,958

 

 

 

321,299

 

 

 

118,410

 

Net (income) loss attributable to Noncontrolling Interests:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Partnership

 

 

(15,429

)

 

 

(12,358

)

 

 

(11,510

)

 

 

(4,299

)

Partially Owned Properties

 

 

(1,620

)

 

 

(1,189

)

 

 

(821

)

 

 

(509

)

Net income attributable to controlling interests

 

 

413,507

 

 

 

325,411

 

 

 

308,968

 

 

 

113,602

 

Preferred distributions

 

 

(1,545

)

 

 

(1,545

)

 

 

(772

)

 

 

(772

)

Net income available to Common Shares

 

$

411,962

 

 

$

323,866

 

 

$

308,196

 

 

$

112,830

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

1.11

 

 

$

0.88

 

 

$

0.83

 

 

$

0.31

 

Weighted average Common Shares outstanding

 

 

369,952

 

 

 

367,865

 

 

 

370,342

 

 

 

367,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

1.11

 

 

$

0.88

 

 

$

0.83

 

 

$

0.31

 

Weighted average Common Shares outstanding

 

 

385,644

 

 

 

383,224

 

 

 

386,107

 

 

 

383,423

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per Common Share outstanding

 

$

1.135

 

 

$

1.08

 

 

$

0.5675

 

 

$

0.54

 

 

6


Table of Contents

Equity Residential

Consolidated Statements of Funds From Operations and Normalized Funds From Operations

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

Six Months Ended June 30,

 

 

Quarter Ended June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net income

 

$

430,556

 

 

$

338,958

 

 

$

321,299

 

 

$

118,410

 

Net (income) loss attributable to Noncontrolling Interests – Partially

   Owned Properties

 

 

(1,620

)

 

 

(1,189

)

 

 

(821

)

 

 

(509

)

Preferred distributions

 

 

(1,545

)

 

 

(1,545

)

 

 

(772

)

 

 

(772

)

Net income available to Common Shares and Units

 

 

427,391

 

 

 

336,224

 

 

 

319,706

 

 

 

117,129

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

404,723

 

 

 

389,251

 

 

 

200,508

 

 

 

192,942

 

Depreciation – Non-real estate additions

 

 

(2,303

)

 

 

(2,260

)

 

 

(1,121

)

 

 

(1,115

)

Depreciation – Partially Owned Properties

 

 

(1,802

)

 

 

(1,933

)

 

 

(899

)

 

 

(901

)

Depreciation – Unconsolidated Properties

 

 

1,772

 

 

 

2,297

 

 

 

850

 

 

 

1,149

 

Net (gain) loss on sales of unconsolidated entities - operating

   assets

 

 

(69,522

)

 

 

 

 

 

(69,522

)

 

 

 

Net (gain) loss on sales of real estate properties

 

 

(138,835

)

 

 

(142,162

)

 

 

(138,856

)

 

 

51

 

Noncontrolling Interests share of gain (loss) on sales

   of real estate properties

 

 

 

 

 

(284

)

 

 

 

 

 

(284

)

FFO available to Common Shares and Units

 

 

621,424

 

 

 

581,133

 

 

 

310,666

 

 

 

308,971

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (see page 25 for additional detail):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment non-operating assets

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of pursuit costs

 

 

2,987

 

 

 

2,066

 

 

 

1,539

 

 

 

1,135

 

Debt extinguishment and preferred share redemption (gains)

   losses

 

 

16,647

 

 

 

23,539

 

 

 

16,647

 

 

 

 

Non-operating asset (gains) losses

 

 

252

 

 

 

(478

)

 

 

23

 

 

 

(691

)

Other miscellaneous items

 

 

4,418

 

 

 

(1,470

)

 

 

2,843

 

 

 

1,769

 

Normalized FFO available to Common Shares and Units

 

$

645,728

 

 

$

604,790

 

 

$

331,718

 

 

$

311,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$

622,969

 

 

$

582,678

 

 

$

311,438

 

 

$

309,743

 

Preferred distributions

 

 

(1,545

)

 

 

(1,545

)

 

 

(772

)

 

 

(772

)

FFO available to Common Shares and Units

 

$

621,424

 

 

$

581,133

 

 

$

310,666

 

 

$

308,971

 

FFO per share and Unit basic

 

$

1.62

 

 

$

1.53

 

 

$

0.81

 

 

$

0.81

 

FFO per share and Unit diluted

 

$

1.61

 

 

$

1.52

 

 

$

0.80

 

 

$

0.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO

 

$

647,273

 

 

$

606,335

 

 

$

332,490

 

 

$

311,956

 

Preferred distributions

 

 

(1,545

)

 

 

(1,545

)

 

 

(772

)

 

 

(772

)

Normalized FFO available to Common Shares and Units

 

$

645,728

 

 

$

604,790

 

 

$

331,718

 

 

$

311,184

 

Normalized FFO per share and Unit basic

 

$

1.69

 

 

$

1.59

 

 

$

0.87

 

 

$

0.82

 

Normalized FFO per share and Unit diluted

 

$

1.67

 

 

$

1.58

 

 

$

0.86

 

 

$

0.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average Common Shares and Units outstanding basic

 

 

382,854

 

 

 

380,729

 

 

 

383,227

 

 

 

380,795

 

Weighted average Common Shares and Units outstanding diluted

 

 

385,644

 

 

 

383,224

 

 

 

386,107

 

 

 

383,423

 

 

Note: See page 25 for additional detail regarding the adjustments from FFO to Normalized FFO. See pages 27 through 31 for the definitions of non-GAAP financial measures and other terms as well as the reconciliations of EPS to FFO per share and Normalized FFO per share.

7


Table of Contents

Equity Residential

Consolidated Balance Sheets

(Amounts in thousands except for share amounts)

(Unaudited)

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

ASSETS

 

 

 

 

 

 

 

 

Land

 

$

5,889,308

 

 

$

5,875,803

 

Depreciable property

 

 

20,824,053

 

 

 

20,435,901

 

Projects under development

 

 

171,869

 

 

 

109,409

 

Land held for development

 

 

110,545

 

 

 

89,909

 

Investment in real estate

 

 

26,995,775

 

 

 

26,511,022

 

Accumulated depreciation

 

 

(7,026,622

)

 

 

(6,696,281

)

Investment in real estate, net

 

 

19,969,153

 

 

 

19,814,741

 

Investments in unconsolidated entities

 

 

52,907

 

 

 

58,349

 

Cash and cash equivalents

 

 

251,273

 

 

 

47,442

 

Restricted deposits

 

 

58,195

 

 

 

68,871

 

Right-of-use assets

 

 

431,753

 

 

 

 

Other assets

 

 

227,430

 

 

 

404,806

 

Total assets

 

$

20,990,711

 

 

$

20,394,209

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Mortgage notes payable, net

 

$

2,599,013

 

 

$

2,385,470

 

Notes, net

 

 

6,531,408

 

 

 

5,933,286

 

Line of credit and commercial paper

 

 

 

 

 

499,183

 

Accounts payable and accrued expenses

 

 

108,574

 

 

 

102,471

 

Accrued interest payable

 

 

64,158

 

 

 

62,622

 

Lease liabilities

 

 

281,620

 

 

 

 

Other liabilities

 

 

302,628

 

 

 

358,563

 

Security deposits

 

 

69,027

 

 

 

67,258

 

Distributions payable

 

 

218,697

 

 

 

206,601

 

Total liabilities

 

 

10,175,125

 

 

 

9,615,454

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Noncontrolling Interests – Operating Partnership

 

 

436,035

 

 

 

379,106

 

Equity:

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Preferred Shares of beneficial interest, $0.01 par value;

   100,000,000 shares authorized; 745,600 shares issued and

   outstanding as of June 30, 2019 and December 31, 2018

 

 

37,280

 

 

 

37,280

 

Common Shares of beneficial interest, $0.01 par value;

   1,000,000,000 shares authorized; 370,838,810 shares issued

   and outstanding as of June 30, 2019 and 369,405,161

   shares issued and outstanding as of December 31, 2018

 

 

3,708

 

 

 

3,694

 

Paid in capital

 

 

8,949,581

 

 

 

8,935,453

 

Retained earnings

 

 

1,252,809

 

 

 

1,261,763

 

Accumulated other comprehensive income (loss)

 

 

(89,849

)

 

 

(64,986

)

Total shareholders’ equity

 

 

10,153,529

 

 

 

10,173,204

 

Noncontrolling Interests:

 

 

 

 

 

 

 

 

Operating Partnership

 

 

227,320

 

 

 

228,738

 

Partially Owned Properties

 

 

(1,298

)

 

 

(2,293

)

Total Noncontrolling Interests

 

 

226,022

 

 

 

226,445

 

Total equity

 

 

10,379,551

 

 

 

10,399,649

 

Total liabilities and equity

 

$

20,990,711

 

 

$

20,394,209

 

 

 

 

8


Table of Contents

Equity Residential

Portfolio Summary

As of June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

% of

Stabilized

 

 

Average

 

 

 

 

 

 

 

Apartment