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Section 1: 10-Q (10-Q)

eqr-10q_20190930.htm
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2019-07-01 2019-09-30 0000906107 eqr:SameStoreMember 2019-07-01 2019-09-30 0000906107 eqr:NonSameStoreMember eqr:NonSameStoreAndOtherMember 2019-07-01 2019-09-30 0000906107 eqr:OtherMember eqr:NonSameStoreAndOtherMember 2019-07-01 2019-09-30 0000906107 eqr:NonSameStoreAndOtherMember 2019-07-01 2019-09-30 0000906107 eqr:LosAngelesMember eqr:SameStoreMember 2018-07-01 2018-09-30 0000906107 eqr:OrangeCountyMember eqr:SameStoreMember 2018-07-01 2018-09-30 0000906107 eqr:SanDiegoMember eqr:SameStoreMember 2018-07-01 2018-09-30 0000906107 eqr:SouthernCaliforniaMember eqr:SameStoreMember 2018-07-01 2018-09-30 0000906107 eqr:SanFranciscoMember eqr:SameStoreMember 2018-07-01 2018-09-30 0000906107 stpr:DC eqr:SameStoreMember 2018-07-01 2018-09-30 0000906107 stpr:NY eqr:SameStoreMember 2018-07-01 2018-09-30 0000906107 eqr:BostonMember eqr:SameStoreMember 2018-07-01 2018-09-30 0000906107 eqr:SeattleMember eqr:SameStoreMember 2018-07-01 2018-09-30 0000906107 us-gaap:NonCoreMember eqr:SameStoreMember 2018-07-01 2018-09-30 0000906107 eqr:SameStoreMember 2018-07-01 2018-09-30 0000906107 eqr:NonSameStoreMember eqr:NonSameStoreAndOtherMember 2018-07-01 2018-09-30 0000906107 eqr:OtherMember eqr:NonSameStoreAndOtherMember 2018-07-01 2018-09-30 0000906107 eqr:NonSameStoreAndOtherMember 2018-07-01 2018-09-30 0000906107 eqr:SameStoreMember eqr:LosAngelesMember 2019-09-30 0000906107 eqr:SameStoreMember eqr:OrangeCountyMember 2019-09-30 0000906107 eqr:SameStoreMember eqr:SanDiegoMember 2019-09-30 0000906107 eqr:SameStoreMember eqr:SouthernCaliforniaMember 2019-09-30 0000906107 eqr:SameStoreMember eqr:SanFranciscoMember 2019-09-30 0000906107 eqr:SameStoreMember stpr:DC 2019-09-30 0000906107 eqr:SameStoreMember stpr:NY 2019-09-30 0000906107 eqr:SameStoreMember eqr:BostonMember 2019-09-30 0000906107 eqr:SameStoreMember eqr:SeattleMember 2019-09-30 0000906107 eqr:SameStoreMember us-gaap:NonCoreMember 2019-09-30 0000906107 eqr:SameStoreMember 2019-09-30 0000906107 eqr:NonSameStoreAndOtherMember eqr:NonSameStoreMember 2019-09-30 0000906107 eqr:NonSameStoreAndOtherMember eqr:OtherMember 2019-09-30 0000906107 eqr:NonSameStoreAndOtherMember 2019-09-30 0000906107 eqr:TaxExemptMortgageBondMember us-gaap:SubsequentEventMember 2019-10-01 2019-10-01

 

Table of Contents

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from        to

Commission File Number: 1-12252 (Equity Residential)

Commission File Number: 0-24920 (ERP Operating Limited Partnership)

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

 

Maryland (Equity Residential)

 

13-3675988 (Equity Residential)

Illinois (ERP Operating Limited Partnership)

 

36-3894853 (ERP Operating Limited Partnership)

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

 

 

Two North Riverside Plaza, Chicago, Illinois 60606

 

(312) 474-1300

(Address of principal executive offices) (Zip Code)

 

(Registrant’s telephone number, including area code)

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 (Equity Residential)

 

EQR

 

New York Stock Exchange

7.57% Notes due August 15, 2026

(ERP Operating Limited Partnership)

 

N/A

 

New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Equity Residential  Yes   No

ERP Operating Limited Partnership  Yes   No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

Equity Residential  Yes   No

ERP Operating Limited Partnership  Yes   No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Equity Residential:

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Small reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

l

ERP Operating Limited Partnership:

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

 

Small reporting company

 

 

 

 

 

 

 

 

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.

 

Equity Residential  

ERP Operating Limited Partnership  

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

Equity Residential  Yes   No

ERP Operating Limited Partnership  Yes   No

The number of EQR Common Shares of Beneficial Interest, $0.01 par value, outstanding on October 25, 2019 was 371,354,411.

 

 

 


 

Table of Contents

 

EXPLANATORY NOTE

This report combines the reports on Form 10-Q for the quarterly period ended September 30, 2019 of Equity Residential and ERP Operating Limited Partnership.  Unless stated otherwise or the context otherwise requires, references to “EQR” mean Equity Residential, a Maryland real estate investment trust (“REIT”), and references to “ERPOP” mean ERP Operating Limited Partnership, an Illinois limited partnership.  References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP.  References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP.  The following chart illustrates the Company’s and the Operating Partnership’s corporate structure:

EQR is the general partner of, and as of September 30, 2019 owned an approximate 96.4% ownership interest in, ERPOP.  The remaining 3.6% interest is owned by limited partners.  As the sole general partner of ERPOP, EQR has exclusive control of ERPOP’s day-to-day management. Management operates the Company and the Operating Partnership as one business. The management of EQR consists of the same members as the management of ERPOP.

The Company is structured as an umbrella partnership REIT (“UPREIT”) and EQR contributes all net proceeds from its various equity offerings to ERPOP.  In return for those contributions, EQR receives a number of OP Units (see definition below) in ERPOP equal to the number of Common Shares it has issued in the equity offering. The Company may acquire properties in transactions that include the issuance of OP Units as consideration for the acquired properties. Such transactions may, in certain circumstances, enable the sellers to defer in whole or in part, the recognition of taxable income or gain that might otherwise result from the sales.  This is one of the reasons why the Company is structured in the manner shown above.  Based on the terms of ERPOP’s partnership agreement, OP Units can be exchanged with Common Shares on a one-for-one basis because the Company maintains a one-for-one relationship between the OP Units of ERPOP issued to EQR and the outstanding Common Shares.

The Company believes that combining the reports on Form 10-Q of EQR and ERPOP into this single report provides the following benefits:

 

enhances investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

 

eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and

 

creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

 


 

Table of Contents

 

The Company believes it is important to understand the few differences between EQR and ERPOP in the context of how EQR and ERPOP operate as a consolidated company.  All of the Companys property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP.  EQRs primary function is acting as the general partner of ERPOP.  EQR also issues equity from time to time, the net proceeds of which it is obligated to contribute to ERPOP, and guarantees certain debt of ERPOP, as disclosed in this report.  EQR does not have any indebtedness as all debt is incurred by the Operating Partnership.  The Operating Partnership holds substantially all of the assets of the Company, including the Companys ownership interests in its joint ventures.  The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity.  Except for the net proceeds from equity offerings by EQR (which are contributed to the capital of ERPOP in exchange for additional partnership interests in ERPOP (“OP Units”) (on a one-for-one Common Share per OP Unit basis) or additional preference units in ERPOP (on a one-for-one preferred share per preference unit basis)), the Operating Partnership generates all remaining capital required by the Company’s business.  These sources include the Operating Partnerships working capital, net cash provided by operating activities, borrowings under its revolving credit facility and/or commercial paper program, the issuance of secured and unsecured debt and partnership interests, and proceeds received from disposition of certain properties and joint venture interests.

Shareholders equity, partners capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership.  The limited partners of the Operating Partnership are accounted for as partners capital in the Operating Partnerships financial statements and as noncontrolling interests in the Companys financial statements.  The noncontrolling interests in the Operating Partnerships financial statements include the interests of unaffiliated partners in various consolidated partnerships. The noncontrolling interests in the Companys financial statements include the same noncontrolling interests at the Operating Partnership level and limited partner OP Unit holders of the Operating Partnership.  The differences between shareholders equity and partners capital result from differences in the equity issued at the Company and Operating Partnership levels.

To help investors understand the differences between the Company and the Operating Partnership, this report provides separate consolidated financial statements for the Company and the Operating Partnership; a single set of consolidated notes to such financial statements that includes separate discussions of each entitys debt, noncontrolling interests and shareholders equity or partners capital, as applicable; and a combined Managements Discussion and Analysis of Financial Condition and Results of Operations section that includes discrete information related to each entity.

This report also includes separate Part I, Item 4, Controls and Procedures, sections and separate Exhibits 31 and 32 certifications for each of the Company and the Operating Partnership in order to establish that the requisite certifications have been made and that the Company and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18 U.S.C. §1350.

In order to highlight the differences between the Company and the Operating Partnership, the separate sections in this report for the Company and the Operating Partnership specifically refer to the Company and the Operating Partnership.  In the sections that combine disclosure of the Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company.  Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the Company is one business and the Company operates that business through the Operating Partnership.

As general partner with control of ERPOP, EQR consolidates ERPOP for financial reporting purposes, and EQR essentially has no assets or liabilities other than its investment in ERPOP.  Therefore, the assets and liabilities of the Company and the Operating Partnership are the same on their respective financial statements.  The separate discussions of the Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.

 

 

 


 

Table of Contents

 

TABLE OF CONTENTS

 

 

PAGE

 

 

PART I.

 

 

 

Item 1. Financial Statements of Equity Residential:

 

 

 

Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018

2

 

 

Consolidated Statements of Operations and Comprehensive Income for the nine months and quarters ended September 30, 2019 and 2018

3 to 4

 

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018

5 to 7

 

 

Consolidated Statements of Changes in Equity for the nine months and quarters ended September 30, 2019 and 2018

8 to 9

 

 

Financial Statements of ERP Operating Limited Partnership:

 

 

 

Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018

10

 

 

Consolidated Statements of Operations and Comprehensive Income for the nine months and quarters ended September 30, 2019 and 2018

11 to 12

 

 

Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018

13 to 15

 

 

Consolidated Statements of Changes in Capital for the nine months and quarters ended September 30, 2019 and 2018

16 to 17

 

 

Notes to Consolidated Financial Statements of Equity Residential and ERP Operating Limited Partnership

18 to 38

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

39 to 55

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk

55

 

 

Item 4. Controls and Procedures

55 to 56

 

 

PART II.

 

 

Item 1. Legal Proceedings

56

 

Item 1A. Risk Factors

56

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

56

 

Item 3. Defaults Upon Senior Securities

56

 

Item 4. Mine Safety Disclosures

56

 

Item 5. Other Information

56

 

 

Item 6. Exhibits

56

 

 


 

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

 

$

21,054,056

 

 

$

20,394,209

 

 

See accompanying notes

 

 

2


 

Table of Contents

 

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(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

 

 

See accompanying notes

3


 

Table of Contents

 

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

Quarter Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

708,402

 

 

$

562,804

 

 

$

277,846

 

 

$

223,846

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss) – derivative instruments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized holding gains (losses) arising during the period

 

 

(33,765

)

 

 

24,021

 

 

 

 

 

 

12,026

 

Losses reclassified into earnings from other comprehensive

   income

 

 

14,659

 

 

 

13,902

 

 

 

5,757

 

 

 

4,595

 

Other comprehensive income (loss)

 

 

(19,106

)

 

 

37,923

 

 

 

5,757

 

 

 

16,621

 

Comprehensive income

 

 

689,296

 

 

 

600,727

 

 

 

283,603

 

 

 

240,467

 

Comprehensive (income) attributable to Noncontrolling Interests

 

 

(27,096

)

 

 

(23,848

)

 

 

(10,946

)

 

 

(9,519

)

Comprehensive income attributable to controlling interests

 

$

662,200

 

 

$

576,879

 

 

$

272,657

 

 

$

230,948

 

 

See accompanying notes

4


 

Table of Contents

 

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income

 

$

708,402

 

 

$

562,804

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

616,201

 

 

 

583,869

 

Amortization of deferred financing costs

 

 

8,664

 

 

 

9,054

 

Amortization of above/below market lease intangibles

 

 

(53

)

 

 

3,294

 

Amortization of discounts and premiums on debt

 

 

10,137

 

 

 

21,360

 

Amortization of deferred settlements on derivative instruments

 

 

14,650

 

 

 

13,893

 

Amortization of right-of-use assets

 

 

9,966

 

 

 

 

Impairment

 

 

 

 

 

702

 

Write-off of pursuit costs

 

 

4,098

 

 

 

3,125

 

(Income) loss from investments in unconsolidated entities

 

 

(66,906

)

 

 

2,993

 

Distributions from unconsolidated entities – return on capital

 

 

2,486

 

 

 

1,885

 

Net (gain) loss on sales of real estate properties

 

 

(269,400

)

 

 

(256,834

)

Net (gain) loss on sales of land parcels

 

 

(2,077

)

 

 

(995

)

Net (gain) loss on debt extinguishment

 

 

3,381

 

 

 

22,110

 

Compensation paid with Company Common Shares

 

 

20,777

 

 

 

22,270

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

(Increase) decrease in other assets

 

 

(20,871

)

 

 

(18,550

)

Increase (decrease) in accounts payable and accrued expenses

 

 

57,822

 

 

 

58,756

 

Increase (decrease) in accrued interest payable

 

 

11,125

 

 

 

11,097

 

Increase (decrease) in lease liabilities

 

 

(1,784

)

 

 

 

Increase (decrease) in other liabilities

 

 

(15,578

)

 

 

1,190

 

Increase (decrease) in security deposits

 

 

3,140

 

 

 

2,168

 

Net cash provided by operating activities

 

 

1,094,180

 

 

 

1,044,191

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Investment in real estate – acquisitions

 

 

(1,147,236

)

 

 

(708,092

)

Investment in real estate – development/other

 

 

(137,238

)

 

 

(101,573

)

Capital expenditures to real estate

 

 

(128,335

)

 

 

(138,119

)

Non-real estate capital additions

 

 

(2,139

)

 

 

(3,155

)

Interest capitalized for real estate under development

 

 

(4,801

)

 

 

(4,547

)

Proceeds from disposition of real estate, net

 

 

692,649