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Section 1: 8-K (8-K)

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false 0000906107 0000906107 2020-10-27 2020-10-27

 

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 27, 2020

 

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 27, 2020, Equity Residential issued a press release announcing its results of operations and financial condition as of September 30, 2020 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 27, 2020, announcing the results of operations and financial condition of Equity Residential as of September 30, 2020 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 27, 2020

 

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

 

i

 

 

 

 


 

 

Third Quarter 2020 Results

Table of Contents

Earnings Release

 

1 - 4

Consolidated Statements of Operations

 

5

Consolidated Statements of Funds From Operations and Normalized
Funds From Operations

 

6

Consolidated Balance Sheets

 

7

Portfolio Summary

 

8

Portfolio Rollforward

 

9

Same Store Results

 

10 - 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

Additional Reconciliations and Definitions of Non-GAAP
Financial Measures and Other Terms

 

26 - 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 27, 2020

 

Equity Residential Reports Third Quarter 2020 Results

 

Chicago, IL – October 27, 2020 - Equity Residential (NYSE: EQR) today reported results for the quarter and nine months ended September 30, 2020.

 

Third Quarter 2020 Results

All per share results are reported as available to common shares/units on a diluted basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended September 30,

 

 

 

 

 

2020

 

 

2019

 

 

$ Change

 

 

% Change

 

 

 

Earnings Per Share (EPS)

 

$

0.24

 

 

$

0.71

 

 

$

(0.47

)

 

 

(66.2

%)

 

 

Funds from Operations (FFO) per share

 

$

0.76

 

 

$

0.92

 

 

$

(0.16

)

 

 

(17.4

%)

 

 

Normalized FFO per share

 

$

0.77

 

 

$

0.91

 

 

$

(0.14

)

 

 

(15.4

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

2020

 

 

2019

 

 

$ Change

 

 

% Change

 

 

 

Earnings Per Share (EPS)

 

$

1.77

 

 

$

1.82

 

 

$

(0.05

)

 

 

(2.7

%)

 

 

Funds from Operations (FFO) per share

 

$

2.48

 

 

$

2.53

 

 

$

(0.05

)

 

 

(2.0

%)

 

 

Normalized FFO per share

 

$

2.49

 

 

$

2.58

 

 

$

(0.09

)

 

 

(3.5

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

"Operating results in the quarter were challenging and widely varying.  Our suburban portfolio continues to fare relatively well with occupancy similar to last year, rates down only modestly and recovery under way in some markets.  However, the approximately 23% of our portfolio located in the urban cores of New York, San Francisco and Boston continues to struggle with pandemic-related reductions in economic activity, which have led to declines in occupancy, lower resident renewal levels and a related drop in rental rates.  While we have seen recent improvements in renewals and application volume, pricing pressures continue and headwinds remain," said Mark J. Parrell, Equity Residential's President and CEO.  

 

"We anticipate that our financial results will weaken over subsequent quarters as the full effect of the pandemic is felt on our business.  Looking longer term, we expect that positive developments relating to the pandemic will eventually re-energize the urban centers which have persevered and thrived through many decades and in similarly challenging circumstances.  We continue to see the urban locations in our markets as centers of our country’s knowledge industries and expect them to again attract disproportionate numbers of affluent renters once the pandemic ends. Many thanks to my colleagues at our properties and offices across the country for their hard work and dedication in these difficult times."

 

Highlights

 

 

The Company collected approximately 97% of its expected Residential revenues in the third quarter of 2020; and

 

The Company’s balance sheet and liquidity position remains exceptionally strong, having reduced its total debt by over $600 million during 2020 using proceeds from property dispositions.

 

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Table of Contents

 

Results Per Share

The change in EPS for the quarter ended September 30, 2020 compared to the same period of 2019 is due primarily to lower property sale gains in the third quarter of 2020, the various adjustment items listed on page 25 of this release and the items described below.  The change in EPS for the nine months ended September 30, 2020 compared to the same period of 2019 is due primarily to 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, 2020 compared to the same periods of 2019, 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 2020 vs.

Third Quarter 2019

 

 

September YTD 2020 vs.

September YTD 2019

 

Residential same store Net Operating Income (NOI)

 

$

(0.09

)

 

$

(0.07

)

Non-Residential same store NOI (1)

 

 

(0.05

)

 

 

(0.07

)

Lease-Up NOI

 

 

 

 

0.01

 

2020 and 2019 transaction activity impact on NOI, net

 

(0.03

)

 

 

(0.03

)

Interest expense

 

 

0.03

 

 

 

0.08

 

Other items

 

 

 

 

(0.01

)

Net

 

$

(0.14

)

 

$

(0.09

)

 

(1)

Non-Residential same store NOI was negatively impacted by a $(0.03) per share non-cash write-off of Non-Residential straight-line lease receivables during the third quarter of 2020 and nine months ended September 30, 2020.

 

The Company has a glossary of defined terms and related reconciliations of Non-GAAP financial measures on pages 26 through 32 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 6, 28 and 29 of this release.

 

Same Store Results

The Company has provided a breakout of Residential and Non-Residential same store results on pages 10 and 11 of this release with definitions that can be found on page 30 of this release.  Non-Residential operations account for approximately 2.4% of total revenues for the nine months ended September 30, 2020.  The table below reflects same store Residential only results for the third quarter 2020 to third quarter 2019 comparison, which includes 75,596 apartment units, as well as for the nine months ended September 30, 2020 to nine months ended September 30, 2019 comparison, which includes 74,264 apartment units. The Company’s Physical Occupancy was 94.8% compared to 96.5% for the third quarter of 2020 and 2019, respectively, and 95.4% compared to 96.4% for the first nine months of 2020 and 2019, respectively.

 

 

 

Third Quarter 2020 vs.

Third Quarter 2019

 

 

September YTD 2020 vs.

September YTD 2019

 

Revenues

 

(5.0%)

 

 

(1.0%)

 

Expenses

 

3.0%

 

 

1.7%

 

NOI

 

(8.4%)

 

 

(2.2%)

 

2


Table of Contents

 

The following table reflects the detail of the change in Same Store Residential Revenues, which is presented on a GAAP basis showing Leasing Concessions on a straight-line basis.  See pages 30 and 31 for detail and reconciliations of Same Store Residential Revenues on a GAAP basis to Same Store Residential Revenues with Leasing Concessions on a cash basis.

 

 

 

Third Quarter 2020 vs. Third Quarter 2019

 

 

September YTD 2020 vs. September YTD 2019

 

 

 

% Change

 

 

% Change

 

Same Store Residential Revenues-

  comparable period

 

 

 

 

 

 

 

Lease rates

 

 

(1.4

%)

 

 

1.0

%

Leasing Concessions (1)

 

 

(0.6

%)

 

 

(0.2

%)

Vacancy loss

 

 

(1.7

%)

 

 

(1.2

%)

Bad Debt, Net (2)

 

 

(2.0

%)

 

 

(1.0

%)

Other (3)

 

 

0.7

%

 

 

0.4

%

Same Store Residential Revenues-

  current period

 

(5.0

%)

 

 

(1.0

%)

 

(1)

Reflects upfront discounts on both new move-in and renewal leases on a straight-line basis.

(2)

Reduction in rental income due to bad debt write-offs and reserves, net of amounts collected on previously written-off or reserved accounts.

(3)

Includes ancillary income, utility recoveries, miscellaneous income and other items.

 

Residential Same Store Operating Statistics

The following table includes select statistics for Residential Same Store Properties presented on a suburban and urban basis.  Statistics for October 2020 are preliminary and Blended Rate is inclusive of Leasing Concessions.

 

 

 

% of

Same Store

Residential

Revenues

 

 

Physical Occupancy on:

 

 

Renewal %

 

 

Blended Rate

 

 

Change in Applications

 

 

 

Sep

YTD 2020

 

 

Jun 30, 2020

 

 

Sep 30, 2020

 

 

Oct 22, 2020

 

 

Oct 2019

 

 

Sep 2020

 

 

Oct 2020 (4)

 

 

Q3

2020

 

 

Sep 2020

 

 

Oct 2020 (4)

 

 

Q3 2020 vs.

Q3 2019

 

 

Oct 2020 (4)

vs.

Oct 2019

 

Suburban (1)

 

44%

 

 

96.4%

 

 

95.9%

 

 

95.8%

 

 

59%

 

 

54%

 

 

57%

 

 

(4.8%)

 

 

(5.8%)

 

 

(6.0%)

 

 

10%

 

 

32%

 

Urban (1)(2)

 

33%

 

 

94.7%

 

 

94.4%

 

 

94.4%

 

 

50%

 

 

46%

 

 

50%

 

 

(6.5%)

 

 

(8.4%)

 

 

(10.7%)

 

 

21%

 

 

47%

 

Urban Core (1)(3)

23%

 

 

92.5%

 

 

89.2%

 

 

88.9%

 

 

58%

 

 

43%

 

 

46%

 

 

(14.7%)

 

 

(17.9%)

 

 

(21.4%)

 

 

48%

 

 

108%

 

Total

 

100%

 

 

95.1%

 

 

94.2%

 

 

94.1%

 

 

56%

 

 

50%

 

 

53%

 

 

(7.9%)

 

 

(9.5%)

 

 

(10.6%)

 

 

20%

 

 

46%

 

 

(1)

The Company defines Urban submarkets as those with 3,500 or more households per square mile with the remainder defined as Suburban.

(2)

Includes all other Urban properties excluding Urban Core.

(3)

Includes Urban properties in Manhattan/Brooklyn, Downtown Boston/Cambridge and Downtown San Francisco.

(4)

October 2020 results are preliminary.

 

Investment Activity

The Company acquired a 158-unit apartment property in suburban Seattle during the third quarter of 2020 for a purchase price of approximately $48.9 million at an Acquisition Capitalization Rate of 4.7%. The Company did not sell any assets during the third quarter of 2020.  During the first nine months of 2020, the Company acquired the property described above and sold five properties, consisting of 1,552 apartment units, for an aggregate sales price of approximately $754.4 million at a weighted average Disposition Yield of 4.7%, generating an Unlevered IRR of 10.8%.

 

Fourth Quarter 2020 Earnings and Conference Call

Equity Residential expects to announce its fourth quarter and full year 2020 results on Tuesday, February 2, 2021 and host a conference call to discuss those results at 10:00 a.m. CT on Wednesday, February 3, 2021.

 

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 residential properties located in and around dynamic cities that attract high quality long-term renters.  Equity Residential owns or has investments in 305 properties consisting of 78,568 apartment units, 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.

3


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.  In addition, these forward-looking statements are subject to risks related to the COVID-19 pandemic, many of which are unknown, including the duration and severity of the pandemic, the extent of the adverse health impact on the general population and on our residents, customers and employees in particular, its impact on the employment rate and the economy and the corresponding impact on our residents’ and tenants’ ability to pay their rent on time or at all, the extent and impact of governmental responses and the impact of operational changes we have implemented and may implement in response to the pandemic. 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 28, 2020 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.

4


Table of Contents

 

Equity Residential

Consolidated Statements of Operations

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

Quarter Ended September 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

1,958,270

 

 

$

2,016,796

 

 

$

622,433

 

 

$

685,120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and maintenance

 

 

333,333

 

 

 

338,497

 

 

 

113,065

 

 

 

114,966

 

Real estate taxes and insurance

 

 

288,043

 

 

 

270,434

 

 

 

95,273

 

 

 

87,546

 

Property management

 

 

71,513

 

 

 

72,705

 

 

 

20,196

 

 

 

21,940

 

General and administrative

 

 

37,212

 

 

 

41,127

 

 

 

10,859

 

 

 

11,417

 

Depreciation

 

 

619,003

 

 

 

616,201

 

 

 

200,605

 

 

 

211,478

 

Total expenses

 

 

1,349,104

 

 

 

1,338,964

 

 

 

439,998

 

 

 

447,347

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on sales of real estate properties

 

 

352,218

 

 

 

269,400

 

 

 

(25

)

 

 

130,565

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

961,384

 

 

 

947,232

 

 

 

182,410

 

 

 

368,338

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

4,006

 

 

 

2,581

 

 

 

535

 

 

 

656

 

Other expenses

 

 

(8,324

)

 

 

(11,205

)

 

 

(4,097

)

 

 

(2,813

)

Interest:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense incurred, net

 

 

(248,349

)

 

 

(289,776

)

 

 

(80,874

)

 

 

(85,936

)

Amortization of deferred financing costs

 

 

(6,253

)

 

 

(8,664

)

 

 

(2,101

)

 

 

(2,881

)

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

   investments in unconsolidated entities and net gain (loss)

   on sales of land parcels

 

 

702,464

 

 

 

640,168

 

 

 

95,873

 

 

 

277,364

 

Income and other tax (expense) benefit

 

 

(502

)

 

 

(749

)

 

 

(262

)

 

 

(265

)

Income (loss) from investments in unconsolidated entities

 

 

(2,445

)

 

 

66,906

 

 

 

(246

)

 

 

(1,152

)

Net gain (loss) on sales of land parcels

 

 

 

 

 

2,077

 

 

 

 

 

 

1,899

 

Net income

 

 

699,517

 

 

 

708,402

 

 

 

95,365

 

 

 

277,846

 

Net (income) loss attributable to Noncontrolling Interests:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Partnership

 

 

(24,624

)

 

 

(25,339

)

 

 

(3,376

)

 

 

(9,910

)

Partially Owned Properties

 

 

(14,113

)

 

 

(2,450

)

 

 

(703

)

 

 

(830

)

Net income attributable to controlling interests

 

 

660,780

 

 

 

680,613

 

 

 

91,286

 

 

 

267,106

 

Preferred distributions

 

 

(2,318

)

 

 

(2,318

)

 

 

(773

)

 

 

(773

)

Net income available to Common Shares

 

$

658,462

 

 

$

678,295

 

 

$

90,513

 

 

$

266,333

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

1.77

 

 

$

1.83

 

 

$

0.24

 

 

$

0.72

 

Weighted average Common Shares outstanding

 

 

371,749

 

 

 

370,227

 

 

 

371,869

 

 

 

370,768

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

1.77

 

 

$

1.82

 

 

$

0.24

 

 

$

0.71

 

Weighted average Common Shares outstanding

 

 

385,973

 

 

 

386,177

 

 

 

385,652

 

 

 

386,896

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per Common Share outstanding

 

$

1.8075

 

 

$

1.7025

 

 

$

0.6025

 

 

$

0.5675

 

 

5


Table of Contents

 

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,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net income

 

$

699,517

 

 

$

708,402

 

 

$

95,365

 

 

$

277,846

 

Net (income) loss attributable to Noncontrolling Interests – Partially

   Owned Properties

 

 

(14,113

)

 

 

(2,450

)

 

 

(703

)

 

 

(830

)

Preferred distributions

 

 

(2,318

)

 

 

(2,318

)

 

 

(773

)

 

 

(773

)

Net income available to Common Shares and Units

 

 

683,086

 

 

 

703,634

 

 

 

93,889

 

 

 

276,243

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

619,003

 

 

 

616,201

 

 

 

200,605

 

 

 

211,478

 

Depreciation – Non-real estate additions

 

 

(3,433

)

 

 

(4,235

)

 

 

(1,126

)

 

 

(1,932

)

Depreciation – Partially Owned Properties

 

 

(2,514

)

 

 

(2,700

)

 

 

(828

)

 

 

(898

)

Depreciation – Unconsolidated Properties

 

 

1,838

 

 

 

2,385

 

 

 

614

 

 

 

613

 

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

   assets

 

 

(1,000

)

 

 

(69,522

)

 

 

(1,000

)

 

 

 

Net (gain) loss on sales of real estate properties

 

 

(352,218

)

 

 

(269,400

)

 

 

25

 

 

 

(130,565

)

Noncontrolling Interests share of gain (loss) on sales

   of real estate properties

 

 

11,655

 

 

 

 

 

 

 

 

 

 

FFO available to Common Shares and Units

 

 

956,417

 

 

 

976,363

 

 

 

292,179

 

 

 

354,939

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (see note for additional detail):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment non-operating assets

 

 

 

 

 

 

 

 

 

 

 

 

Write-off of pursuit costs

 

 

4,864

 

 

 

4,098

 

 

 

1,586

 

 

 

1,111

 

Debt extinguishment and preferred share redemption (gains)

   losses

 

 

37

 

 

 

11,807

 

 

 

5

 

 

 

(4,840

)

Non-operating asset (gains) losses

 

 

1,022

 

 

 

(1,200

)

 

 

352

 

 

 

(1,452

)

Other miscellaneous items

 

 

(514

)

 

 

6,539

 

 

 

1,796

 

 

 

2,121

 

Normalized FFO available to Common Shares and Units

 

$

961,826

 

 

$

997,607

 

 

$

295,918

 

 

$

351,879

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$

958,735

 

 

$

978,681

 

 

$

292,952

 

 

$

355,712

 

Preferred distributions

 

 

(2,318

)

 

 

(2,318

)

 

 

(773

)

 

 

(773

)

FFO available to Common Shares and Units

 

$

956,417

 

 

$

976,363

 

 

$

292,179

 

 

$

354,939

 

FFO per share and Unit basic

 

$

2.49

 

 

$

2.55

 

 

$

0.76

 

 

$

0.93

 

FFO per share and Unit diluted

 

$

2.48

 

 

$

2.53

 

 

$

0.76

 

 

$

0.92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO

 

$

964,144

 

 

$

999,925

 

 

$

296,691

 

 

$

352,652

 

Preferred distributions

 

 

(2,318

)

 

 

(2,318

)

 

 

(773

)

 

 

(773

)

Normalized FFO available to Common Shares and Units

 

$

961,826

 

 

$

997,607

 

 

$

295,918

 

 

$

351,879

 

Normalized FFO per share and Unit basic

 

$

2.50

 

 

$

2.60

 

 

$

0.77

 

 

$

0.92

 

Normalized FFO per share and Unit diluted

 

$

2.49

 

 

$

2.58

 

 

$

0.77

 

 

$

0.91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average Common Shares and Units outstanding basic

 

 

384,759

 

 

 

383,142

 

 

 

384,871

 

 

 

383,709

 

Weighted average Common Shares and Units outstanding diluted

 

 

385,973

 

 

 

386,177

 

 

 

385,652

 

 

 

386,896

 

 

Note: See Adjustments from FFO to Normalized FFO for additional detail regarding the adjustments from FFO to Normalized FFO. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms 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.

6


Table of Contents

 

Equity Residential

Consolidated Balance Sheets

(Amounts in thousands except for share amounts)

(Unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

Land

 

$

5,794,771

 

 

$

5,936,188

 

Depreciable property

 

 

21,076,222

 

 

 

21,319,101

 

Projects under development

 

 

337,696

 

 

 

181,630

 

Land held for development

 

 

103,900

 

 

 

96,688

 

Investment in real estate

 

 

27,312,589

 

 

 

27,533,607

 

Accumulated depreciation

 

 

(7,738,318

)

 

 

(7,276,786

)

Investment in real estate, net

 

 

19,574,271

 

 

 

20,256,821

 

Investments in unconsolidated entities

 

 

54,828

 

 

 

52,238

 

Cash and cash equivalents

 

 

178,333

 

 

 

45,753

 

Restricted deposits

 

 

56,881

 

 

 

71,246

 

Right-of-use assets

 

 

502,184

 

 

 

512,774

 

Other assets

 

 

257,481

 

 

 

233,937

 

Total assets

 

$

20,623,978

 

 

$

21,172,769

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Mortgage notes payable, net

 

$

2,313,833

 

 

$

1,941,610

 

Notes, net

 

 

6,082,897

 

 

 

6,077,513

 

Line of credit and commercial paper

 

 

 

 

 

1,017,833

 

Accounts payable and accrued expenses

 

 

158,611

 

 

 

94,350

 

Accrued interest payable

 

 

65,669

 

 

 

66,852

 

Lease liabilities

 

 

329,684

 

 

 

331,334

 

Other liabilities

 

 

331,522

 

 

 

346,963

 

Security deposits

 

 

61,453

 

 

 

70,062

 

Distributions payable

 

 

232,237

 

 

 

218,326

 

Total liabilities

 

 

9,575,906

 

 

 

10,164,843

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Noncontrolling Interests – Operating Partnership

 

 

293,706

 

 

 

463,400

 

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, 2020 and December 31, 2019

 

 

37,280

 

 

 

37,280

 

Common Shares of beneficial interest, $0.01 par value;

   1,000,000,000 shares authorized; 372,239,249 shares issued

   and outstanding as of September 30, 2020 and 371,670,884

   shares issued and outstanding as of December 31, 2019

 

 

3,722

 

 

 

3,717

 

Paid in capital

 

 

9,166,018

 

 

 

8,965,577

 

Retained earnings

 

 

1,371,938

 

 

 

1,386,495

 

Accumulated other comprehensive income (loss)

 

 

(61,478

)

 

 

(77,563

)

Total shareholders’ equity

 

 

10,517,480

 

 

 

10,315,506

 

Noncontrolling Interests:

 

 

 

 

 

 

 

 

Operating Partnership

 

 

232,516

 

 

 

227,837

 

Partially Owned Properties

 

 

4,370

 

 

 

1,183

 

Total Noncontrolling Interests

 

 

236,886

 

 

 

229,020

 

Total equity