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Section 1: 8-K (8-K)

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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): October 22, 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 October 22, 2019, Equity Residential issued a press release announcing its results of operations and financial condition as of September 30, 2019 and for the nine 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 October 22, 2019, announcing the results of operations and financial condition of Equity Residential as of September 30, 2019 and for the nine months and quarter then ended.

 

 

 

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

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: October 22, 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_33.htm

 

 

 

 

 

 

 

 

Third 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 - 32



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

 

October 22, 2019

 

Equity Residential Reports Third Quarter 2019 Results

Revises Full Year Guidance

 

Chicago, IL – October 22, 2019 - Equity Residential (NYSE: EQR) today reported results for the quarter and nine months ended September 30, 2019.  All per share results are reported as available to common shares/units on a diluted basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended September 30,

 

 

 

 

 

2019

 

 

2018

 

 

$ Change

 

 

% Change

 

 

 

Earnings Per Share (EPS)

 

$

0.71

 

 

$

0.58

 

 

$

0.13

 

 

 

22.4

%

 

 

Funds from Operations (FFO) per share

 

$

0.92

 

 

$

0.79

 

 

$

0.13

 

 

 

16.5

%

 

 

Normalized FFO per share

 

$

0.91

 

 

$

0.83

 

 

$

0.08

 

 

 

9.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

2019

 

 

2018

 

 

$ Change

 

 

% Change

 

 

 

Earnings Per Share (EPS)

 

$

1.82

 

 

$

1.46

 

 

$

0.36

 

 

 

24.7

%

 

 

Funds from Operations (FFO) per share

 

$

2.53

 

 

$

2.30

 

 

$

0.23

 

 

 

10.0

%

 

 

Normalized FFO per share

 

$

2.58

 

 

$

2.41

 

 

$

0.17

 

 

 

7.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“We are pleased to report that our same store revenues, expenses and NOI as well as our Normalized FFO results are tracking in line with or better than the improved expectations we provided in July and that the efforts of our hard working colleagues across the Company produced the highest resident retention in our history.  We continue to see robust demand to live in the vibrant urban and dense suburban centers of the cities in which we operate,” said Mark J. Parrell, Equity Residential’s President and CEO.

 

Highlights

 

 

•

The Company produced same store revenue growth of 3.4% for the third quarter of 2019, with Physical Occupancy of 96.5% and Renewal Rate Achieved growth of 5.0%.

 

 

•

The Company produced Normalized FFO per share growth of 9.6% for the third quarter of 2019.

 

 

•

During the third quarter of 2019, the Company acquired four apartment properties, totaling 1,084 apartment units, for an aggregate purchase price of approximately $489.9 million.

 

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•

During the third quarter of 2019, the Company issued $600.0 million of unsecured notes at a coupon rate of 2.5% and a yield of 2.56%, the lowest ten-year yield in both the Company’s and REIT industry’s histories.

 

Results Per Share

The change in EPS for both the quarter and nine months ended September 30, 2019 compared to the same periods of 2018, are due primarily to higher property and unconsolidated sale gains in the third quarter and/or full year 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 nine months ended September 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

 

 

 

Third Quarter 2019 vs.

Third Quarter 2018

 

 

September YTD 2019 vs.

September YTD 2018

 

Same Store NOI

 

$

0.04

 

 

$

0.10

 

Lease-Up NOI and other non-same store NOI

 

 

0.02

 

 

 

0.06

 

2019 and 2018 transaction activity impact on NOI

 

 

0.02

 

 

 

0.03

 

Interest expense

 

 

0.01

 

 

 

0.01

 

Other items, including corporate overhead 1

 

 

(0.01

)

 

 

(0.03

)

Net

 

$

0.08

 

 

$

0.17

 

 

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 32 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 7, 29 and 30 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 30 of this release.

 

Same Store Results

The following table shows the increases in same store results for the third quarter 2019 to third quarter 2018 comparison, which includes 75,290 apartment units, and for the nine months ended September 30, 2019 to nine months ended September 30, 2018 comparison, which includes 72,979 apartment units. The Company’s Physical Occupancy was 96.5% compared to 96.3% for the third quarter of 2019 and 2018, respectively, and 96.5% compared to 96.2% for the first nine months of 2019 and 2018, respectively.

 

 

 

Third Quarter 2019 vs.

Third Quarter 2018

 

 

September YTD 2019 vs.

September YTD 2018

 

Revenues

 

3.4%

 

 

3.3%

 

Expenses

 

3.7%

 

 

3.8%

 

NOI

 

3.3%

 

 

3.0%

 

 

Investment Activity

The Company acquired four apartment properties during the third quarter of 2019, totaling 1,084 apartment units, for an aggregate purchase price of approximately $489.9 million at a weighted average Acquisition Capitalization Rate of 4.4%. The properties are located in Los Angeles, the San Francisco Bay Area and suburban Denver.

 

During the third quarter of 2019, the Company completed a 137 apartment unit property in Seattle and an 84 apartment unit property in Cambridge, MA.  Also during the quarter, the Company started a 200 apartment unit joint venture development property in the San Francisco Bay Area at a development cost of approximately

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$117.8 million as well as a wholly-owned 154 apartment unit property in suburban Washington, D.C. that will be developed at a cost of approximately $75.3 million.  

 

The Company sold seven properties during the third quarter of 2019, totaling 641 apartment units, for an aggregate sale price of approximately $303.9 million at a weighted average Disposition Yield of 4.7%, generating an Unlevered IRR of 7.6%. One of the properties is located in Arlington, VA and the other six are located in Berkeley, CA.

 

During the first nine months of 2019, the Company acquired ten properties, totaling 2,728 apartment units, for an aggregate purchase price of approximately $1.1 billion at a weighted average Acquisition Capitalization Rate of 4.6%.

 

During the first nine months of 2019, the Company sold nine wholly-owned properties, totaling 1,202 apartment units, for an aggregate sale price of approximately $706.7 million at a weighted average Disposition Yield of 4.5%, generating an Unlevered IRR of 8.0%. During the first nine months of 2019, the Company also 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.

 

Capital Markets Activity    

On August 27, 2019, the Company issued $600.0 million of 10-year unsecured notes at a coupon rate of 2.5% and yield of 2.56%. After the effect of underwriters’ fees and other costs associated with the offering, the all-in effective yield of the notes is approximately 2.65%. As previously disclosed, on July 1, 2019 the Company paid off $950.0 million in secured and unsecured debt with a Weighted Average Rate of 4.62%.

 

Fourth Quarter 2019 Guidance

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

 

 

Q4 2019

Guidance

EPS

 

$0.63 to $0.65

FFO per share

 

$0.87 to $0.89

Normalized FFO per share

 

$0.87 to $0.89

 

The difference between the third quarter 2019 actual EPS of $0.71 and the fourth quarter 2019 EPS guidance midpoint of $0.64 is due primarily to lower expected property sale gains and the items described below.

 

The difference between the third quarter 2019 actual FFO of $0.92 per share and the fourth quarter 2019 FFO guidance midpoint of $0.88 per share is due primarily to the items described below.

 

The difference between the third quarter 2019 actual Normalized FFO of $0.91 per share and the fourth quarter 2019 Normalized FFO guidance midpoint of $0.88 per share is due primarily to:

 

 

 

Positive/(Negative)

Impact

 

 

 

 

Fourth Quarter 2019 vs.

Third Quarter 2019

 

 

Same Store NOI

 

$

(0.01

)

 

2019 and 2018 transaction activity impact on NOI

 

 

(0.01

)

 

Other items, including corporate overhead

 

 

(0.01

)

 

Net

 

$

(0.03

)

 

 

 

 

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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%

 

 

96.4%

 

Revenue change

 

3.3%

 

 

3.1% to 3.5%

 

Expense change

 

3.8%

 

 

3.5% to 4.0%

 

NOI change

 

3.1%

 

 

2.7% to 3.5%

 

 

 

 

 

 

 

 

 

 

EPS

 

$2.45 to $2.47

 

 

$2.48 to $2.54

 

FFO per share

 

$3.40 to $3.42

 

 

$3.36 to $3.42

 

Normalized FFO per share

 

$3.46 to $3.48

 

 

$3.43 to $3.49

 

 

 

 

 

 

 

 

 

 

Transactions:

 

 

 

 

 

 

 

 

Consolidated rental acquisitions

 

$1.1 billion

 

 

$1.0 billion

 

Consolidated rental dispositions

 

$1.0 billion

 

 

$1.0 billion

 

Transaction Accretion (Dilution)

 

None

 

 

None

 

 

 

The change in the full year 2019 EPS guidance range is due primarily to higher expected depreciation expense 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

 

 

Property NOI

 

$

0.01

 

 

Interest expense

 

 

0.01

 

 

Other items, including corporate overhead

 

 

(0.01

)

 

Net

 

$

0.01

 

 

 

Fourth Quarter and Full Year 2019 Earnings and Conference Call

Equity Residential expects to announce its fourth quarter and full year 2019 results on Tuesday, January 28, 2020 and host a conference call to discuss those results at 10:00 a.m. CT on Wednesday, January 29, 2020.

 

About Equity Residential

Equity Residential is committed to creating communities where people thrive.  The Company, a member of the S&P 500, is focused on the acquisition, development and management of rental apartment properties located in urban and high-density suburban communities where today’s renters want to live, work and play.  Equity Residential owns or has investments in 308 properties consisting of 80,299 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.

 

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

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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, October 23, 2019 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.

 

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Equity Residential

Consolidated Statements of Operations

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

Quarter Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

2,016,796

 

 

$

1,925,128

 

 

$

685,120

 

 

$

652,677

 

Fee and asset management

 

 

360

 

 

 

563

 

 

 

25

 

 

 

190

 

Total revenues

 

 

2,017,156

 

 

 

1,925,691

 

 

 

685,145

 

 

 

652,867

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and maintenance

 

 

338,497

 

 

 

322,487

 

 

 

114,966

 

 

 

110,541

 

Real estate taxes and insurance

 

 

270,434

 

 

 

268,784

 

 

 

87,546

 

 

 

87,388

 

Property management

 

 

72,705

 

 

 

69,175

 

 

 

21,940

 

 

 

22,247

 

General and administrative

 

 

41,127

 

 

 

41,420

 

 

 

11,417

 

 

 

12,640

 

Depreciation

 

 

616,201

 

 

 

583,869

 

 

 

211,478

 

 

 

194,618

 

Total expenses

 

 

1,338,964

 

 

 

1,285,735

 

 

 

447,347

 

 

 

427,434

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on sales of real estate properties

 

 

269,400

 

 

 

256,834

 

 

 

130,565

 

 

 

114,672

 

Impairment

 

 

—

 

 

 

(702

)

 

 

—

 

 

 

(702

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

947,592

 

 

 

896,088

 

 

 

368,363

 

 

 

339,403

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

2,221

 

 

 

14,860

 

 

 

631

 

 

 

7,864

 

Other expenses

 

 

(11,205

)

 

 

(14,871

)

 

 

(2,813

)

 

 

(7,661

)

Interest:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense incurred, net

 

 

(289,776

)

 

 

(321,454

)

 

 

(85,936

)

 

 

(111,219

)

Amortization of deferred financing costs

 

 

(8,664

)

 

 

(9,054

)

 

 

(2,881

)

 

 

(3,276

)

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

   investments in unconsolidated entities and net gain (loss)

   on sales of land parcels

 

 

640,168

 

 

 

565,569

 

 

 

277,364

 

 

 

225,111

 

Income and other tax (expense) benefit

 

 

(749

)

 

 

(767

)

 

 

(265

)

 

 

(280

)

Income (loss) from investments in unconsolidated entities

 

 

66,906

 

 

 

(2,993

)

 

 

(1,152

)

 

 

(985

)

Net gain (loss) on sales of land parcels

 

 

2,077

 

 

 

995

 

 

 

1,899

 

 

 

—

 

Net income

 

 

708,402

 

 

 

562,804

 

 

 

277,846

 

 

 

223,846

 

Net (income) loss attributable to Noncontrolling Interests:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Partnership

 

 

(25,339

)

 

 

(20,517

)

 

 

(9,910

)

 

 

(8,159

)

Partially Owned Properties

 

 

(2,450

)

 

 

(1,939

)

 

 

(830

)

 

 

(750

)

Net income attributable to controlling interests

 

 

680,613

 

 

 

540,348

 

 

 

267,106

 

 

 

214,937

 

Preferred distributions

 

 

(2,318

)

 

 

(2,318

)

 

 

(773

)

 

 

(773

)

Net income available to Common Shares

 

$

678,295

 

 

$

538,030

 

 

$

266,333

 

 

$

214,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

1.83

 

 

$

1.46

 

 

$

0.72

 

 

$

0.58

 

Weighted average Common Shares outstanding

 

 

370,227

 

 

 

367,920

 

 

 

370,768

 

 

 

368,028

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

1.82

 

 

$

1.46

 

 

$

0.71

 

 

$

0.58

 

Weighted average Common Shares outstanding

 

 

386,177

 

 

 

383,433

 

 

 

386,896

 

 

 

383,884

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per Common Share outstanding

 

$

1.7025

 

 

$

1.62

 

 

$

0.5675

 

 

$

0.54

 

 

6

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Equity Residential

Consolidated Statements of Funds From Operations and Normalized Funds From Operations

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

Quarter Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net income

 

$

708,402

 

 

$

562,804

 

 

$

277,846

 

 

$

223,846

 

Net (income) loss attributable to Noncontrolling Interests – Partially

   Owned Properties

 

 

(2,450

)

 

 

(1,939

)

 

 

(830

)

 

 

(750

)

Preferred distributions

 

 

(2,318

)

 

 

(2,318

)

 

 

(773

)

 

 

(773

)

Net income available to Common Shares and Units

 

 

703,634

 

 

 

558,547

 

 

 

276,243

 

 

 

222,323

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

616,201

 

 

 

583,869

 

 

 

211,478

 

 

 

194,618

 

Depreciation – Non-real estate additions

 

 

(4,235

)

 

 

(3,397

)

 

 

(1,932

)

 

 

(1,137

)

Depreciation – Partially Owned Properties

 

 

(2,700

)

 

 

(2,837

)

 

 

(898

)

 

 

(904

)

Depreciation – Unconsolidated Properties

 

 

2,385

 

 

 

3,447

 

 

 

613

 

 

 

1,150

 

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

   assets

 

 

(69,522

)

 

 

—

 

 

 

—

 

 

 

—

 

Net (gain) loss on sales of real estate properties

 

 

(269,400

)

 

 

(256,834

)

 

 

(130,565

)

 

 

(114,672

)

Noncontrolling Interests share of gain (loss) on sales

   of real estate properties

 

 

—

 

 

 

(284

)

 

 

—

 

 

 

—

 

Impairment – operating assets

 

 

—

 

 

 

702

 

 

 

—

 

 

 

702

 

FFO available to Common Shares and Units

 

 

976,363

 

 

 

883,213

 

 

 

354,939

 

 

 

302,080

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (see page 25 for additional detail):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment – non-operating assets

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Write-off of pursuit costs

 

 

4,098

 

 

 

3,125

 

 

 

1,111

 

 

 

1,059

 

Debt extinguishment and preferred share redemption (gains)

   losses

 

 

11,807

 

 

 

41,142

 

 

 

(4,840

)

 

 

17,603

 

Non-operating asset (gains) losses

 

 

(1,200

)

 

 

(255

)

 

 

(1,452

)

 

 

223

 

Other miscellaneous items

 

 

6,539

 

 

 

(2,608

)

 

 

2,121

 

 

 

(1,138

)

Normalized FFO available to Common Shares and Units

 

$

997,607

 

 

$

924,617

 

 

$

351,879

 

 

$

319,827

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$

978,681

 

 

$

885,531

 

 

$

355,712

 

 

$

302,853

 

Preferred distributions

 

 

(2,318

)

 

 

(2,318

)

 

 

(773

)

 

 

(773

)

FFO available to Common Shares and Units

 

$

976,363

 

 

$

883,213

 

 

$

354,939

 

 

$

302,080

 

FFO per share and Unit – basic

 

$

2.55

 

 

$

2.32

 

 

$

0.93

 

 

$

0.79

 

FFO per share and Unit – diluted

 

$

2.53

 

 

$

2.30

 

 

$

0.92

 

 

$

0.79

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO

 

$

999,925

 

 

$

926,935

 

 

$

352,652

 

 

$

320,600

 

Preferred distributions

 

 

(2,318

)

 

 

(2,318

)

 

 

(773

)

 

 

(773

)

Normalized FFO available to Common Shares and Units

 

$

997,607

 

 

$

924,617

 

 

$

351,879

 

 

$

319,827

 

Normalized FFO per share and Unit – basic

 

$

2.60

 

 

$

2.43

 

 

$

0.92

 

 

$

0.84

 

Normalized FFO per share and Unit – diluted

 

$

2.58

 

 

$

2.41

 

 

$

0.91

 

 

$

0.83

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average Common Shares and Units outstanding – basic

 

 

383,142

 

 

 

380,791

 

 

 

383,709

 

 

 

380,912

 

Weighted average Common Shares and Units outstanding – diluted

 

 

386,177

 

 

 

383,433

 

 

 

386,896

 

 

 

383,884

 

 

Note: See page 25 for additional detail regarding the adjustments from FFO to Normalized FFO. See pages 27 through 32 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)

 

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018

 

ASSETS

 

 

 

 

 

 

 

 

Land

 

$

5,955,121

 

 

$

5,875,803

 

Depreciable property

 

 

21,168,255

 

 

 

20,435,901

 

Projects under development

 

 

143,434

 

 

 

109,409

 

Land held for development

 

 

91,017

 

 

 

89,909

 

Investment in real estate

 

 

27,357,827

 

 

 

26,511,022

 

Accumulated depreciation

 

 

(7,171,876

)

 

 

(6,696,281

)

Investment in real estate, net

 

 

20,185,951

 

 

 

19,814,741

 

Investments in unconsolidated entities

 

 

52,474

 

 

 

58,349

 

Cash and cash equivalents

 

 

28,777

 

 

 

47,442

 

Restricted deposits

 

 

55,819

 

 

 

68,871

 

Right-of-use assets

 

 

481,044

 

 

 

—

 

Other assets

 

 

249,991

 

 

 

404,806

 

Total assets

 

$

21,054,056

 

 

$

20,394,209

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Mortgage notes payable, net

 

$

1,962,471

 

 

$

2,385,470

 

Notes, net

 

 

6,675,084

 

 

 

5,933,286

 

Line of credit and commercial paper

 

 

354,381

 

 

 

499,183

 

Accounts payable and accrued expenses

 

 

151,680

 

 

 

102,471

 

Accrued interest payable

 

 

73,747

 

 

 

62,622

 

Lease liabilities

 

 

333,312

 

 

 

—

 

Other liabilities

 

 

312,849

 

 

 

358,563

 

Security deposits

 

 

70,398

 

 

 

67,258

 

Distributions payable

 

 

218,136

 

 

 

206,601

 

Total liabilities

 

 

10,152,058

 

 

 

9,615,454

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Noncontrolling Interests – Operating Partnership

 

 

494,999

 

 

 

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 September 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; 371,327,332 shares issued

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

   shares issued and outstanding as of December 31, 2018

 

 

3,713

 

 

 

3,694

 

Paid in capital

 

 

8,917,312

 

 

 

8,935,453

 

Retained earnings

 

 

1,308,423

 

 

 

1,261,763

 

Accumulated other comprehensive income (loss)

 

 

(84,092

)

 

 

(64,986

)

Total shareholders’ equity

 

 

10,182,636

 

 

 

10,173,204

 

Noncontrolling Interests:

 

 

 

 

 

 

 

 

Operating Partnership

 

 

226,065

 

 

 

228,738

 

Partially Owned Properties

 

 

(1,702

)

 

 

(2,293

)

Total Noncontrolling Interests

 

 

224,363

 

 

 

226,445

 

Total equity

 

 

10,406,999

 

 

 

10,399,649

 

Total liabilities and equity

 

$