Attached files
| file | filename |
|---|---|
| 8-K - 8-K - EQUITY RESIDENTIAL | eqr-8k_20170425.htm |
NEWS RELEASE - FOR IMMEDIATE RELEASE
APRIL 25, 2017
Equity Residential Reports First Quarter 2017 Results
Chicago, IL – April 25, 2017 - Equity Residential (NYSE: EQR) today reported results for the quarter ended March 31, 2017. All per share results are reported as available to common shares/units on a diluted basis.
“Rental demand remains very strong across the nation’s coastal, gateway cities but new apartment supply continues to pressure new lease rates,” said David J. Neithercut, Equity Residential’s President and CEO. “Nevertheless, we achieved renewal rates of 4.3% in the first quarter and, as we approach our primary leasing season with occupancy of 96%, we are well positioned to meet our operating goals for the year.”
First Quarter 2017
Earnings per Share (EPS) for the first quarter of 2017 was $0.39 compared to $9.76 in the first quarter of 2016. The difference is due primarily to $9.64 per share in higher property sale gains as a result of the Company’s significant property sales activity in 2016, the various adjustment items listed on page 22 of this release and the items described below.
FFO (Funds from Operations), as defined by the National Association of Real Estate Investment Trusts (NAREIT), was $0.76 per share for the first quarter of 2017 compared to $0.47 per share in the first quarter of 2016. The difference is due primarily to the various adjustment items listed on page 22 of this release and the items described below.
Normalized FFO for the first quarter of 2017 was $0.74 per share compared to $0.76 per share in the
first quarter of 2016. The following items impacted Normalized FFO per share in the quarter:
|
|
• |
A positive impact of approximately $0.02 per share from increased same store net operating income (NOI); |
|
|
• |
A positive impact of approximately $0.03 per share from Lease-Up NOI; |
|
|
• |
A positive impact of approximately $0.01 per share from lower corporate overhead (property management and general and administrative expenses); and |
|
|
• |
A negative impact of approximately $0.08 per share of lower NOI primarily as a result of the Company’s 2016 disposition activity. |
Reconciliations and definitions of FFO and Normalized FFO are provided on pages 5, 25 and 26 of this release and the Company has included guidance for Normalized FFO on page 23 and FFO and EPS on page 26 of this release.
1
On a same store first quarter to first quarter comparison, which includes 71,000 apartment units, revenues increased 2.6%, expenses increased 3.9% and NOI increased 2.1%. Average Rental Rate increased 2.6% and occupancy was flat at 95.9%.
Investment Activity
The Company sold one consolidated apartment property, consisting of 304 apartment units, for a sale price of $47.6 million at a Disposition Yield of 6.7% and generating an Unlevered IRR of 17.1%. The Company also sold one land parcel located in New York City for a sale price of approximately $33.5 million. The Company did not acquire any properties during the first quarter of 2017.
Also during the quarter, the Company stabilized its 453 unit Potrero 1010 development in San Francisco at a Development Yield of 5.9%.
Second Quarter 2017 Guidance
The Company has established an EPS guidance range of $0.51 to $0.55 for the second quarter of 2017. The difference between the Company’s first quarter 2017 EPS of $0.39 and the midpoint of the second quarter 2017 guidance range of $0.53 is due primarily to higher expected gains on property sales and the items described below.
The Company has established an FFO guidance range of $0.75 to $0.79 per share for the second quarter of 2017. The difference between the Company’s first quarter 2017 FFO of $0.76 per share and the midpoint of the second quarter 2017 guidance range of $0.77 per share is due primarily to lower expected debt extinguishment costs, lower expected gains on land parcel sales and the items described below.
The Company has established a Normalized FFO guidance range of $0.75 to $0.79 per share for
the second quarter of 2017. The difference between the Company’s first quarter 2017 Normalized FFO of $0.74 per share and the midpoint of the second quarter 2017 guidance range of $0.77 per share is due primarily to:
|
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• |
A positive impact of approximately $0.02 per share from increased same store NOI; |
|
|
• |
A positive impact of approximately $0.01 per share from Lease-Up NOI; |
|
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• |
A positive impact of approximately $0.01 per share from lower total interest expense; and |
|
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• |
A negative impact of approximately $0.01 per share of lower NOI primarily as a result of the Company’s disposition activity. |
Glossary of Terms and Definitions
To improve comparability and enhance disclosure, the Company has a glossary of defined terms and related reconciliations of Non-GAAP financial measures on pages 24 through 27 of this release.
Second Quarter 2017 Earnings and Conference Call
Equity Residential expects to announce second quarter 2017 results on Tuesday, July 25, 2017 and host a conference call to discuss those results at 10:00 a.m. CT on Wednesday, July 26, 2017.
About Equity Residential
Equity Residential is an S&P 500 company focused on the acquisition, development and management of rental apartment properties in urban and high-density suburban coastal gateway markets where today’s renters want to live, work and play. Equity Residential owns or has investments in 302 properties consisting of 77,498 apartment units, primarily located in Boston, New York, Washington, D.C., Seattle, San Francisco and
2
Southern California. 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 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, April 26, at 10:00 a.m. Central. 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.
3
Consolidated Statements of Operations
(Amounts in thousands except per share data)
(Unaudited)
|
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Quarter Ended March 31, |
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|
|
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2017 |
|
|
2016 |
|
||
|
REVENUES |
|
|
|
|
|
|
|
|
|
Rental income |
|
$ |
603,920 |
|
|
$ |
616,165 |
|
|
Fee and asset management |
|
|
180 |
|
|
|
2,918 |
|
|
Total revenues |
|
|
604,100 |
|
|
|
619,083 |
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
Property and maintenance |
|
|
102,608 |
|
|
|
109,165 |
|
|
Real estate taxes and insurance |
|
|
81,728 |
|
|
|
80,196 |
|
|
Property management |
|
|
22,252 |
|
|
|
23,495 |
|
|
General and administrative |
|
|
14,173 |
|
|
|
16,717 |
|
|
Depreciation |
|
|
178,968 |
|
|
|
172,885 |
|
|
Total expenses |
|
|
399,729 |
|
|
|
402,458 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
204,371 |
|
|
|
216,625 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income |
|
|
601 |
|
|
|
3,058 |
|
|
Other expenses |
|
|
(1,090 |
) |
|
|
(2,556 |
) |
|
Interest: |
|
|
|
|
|
|
|
|
|
Expense incurred, net |
|
|
(106,210 |
) |
|
|
(213,492 |
) |
|
Amortization of deferred financing costs |
|
|
(2,296 |
) |
|
|
(5,394 |
) |
|
Income (loss) before income and other taxes, (loss) from investments in unconsolidated entities, net gain on sales of real estate properties and land parcels and discontinued operations |
|
|
95,376 |
|
|
|
(1,759 |
) |
|
Income and other tax (expense) benefit |
|
|
(262 |
) |
|
|
(350 |
) |
|
(Loss) from investments in unconsolidated entities |
|
|
(1,073 |
) |
|
|
(1,104 |
) |
|
Net gain on sales of real estate properties |
|
|
36,707 |
|
|
|
3,723,479 |
|
|
Net gain on sales of land parcels |
|
|
19,193 |
|
|
|
11,722 |
|
|
Income from continuing operations |
|
|
149,941 |
|
|
|
3,731,988 |
|
|
Discontinued operations, net |
|
|
— |
|
|
|
(157 |
) |
|
Net income |
|
|
149,941 |
|
|
|
3,731,831 |
|
|
Net (income) attributable to Noncontrolling Interests: |
|
|
|
|
|
|
|
|
|
Operating Partnership |
|
|
(5,411 |
) |
|
|
(143,309 |
) |
|
Partially Owned Properties |
|
|
(788 |
) |
|
|
(764 |
) |
|
Net income attributable to controlling interests |
|
|
143,742 |
|
|
|
3,587,758 |
|
|
Preferred distributions |
|
|
(773 |
) |
|
|
(773 |
) |
|
Net income available to Common Shares |
|
$ |
142,969 |
|
|
$ |
3,586,985 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share – basic: |
|
|
|
|
|
|
|
|
|
Income from continuing operations available to Common Shares |
|
$ |
0.39 |
|
|
$ |
9.84 |
|
|
Net income available to Common Shares |
|
$ |
0.39 |
|
|
$ |
9.84 |
|
|
Weighted average Common Shares outstanding |
|
|
366,605 |
|
|
|
364,592 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share – diluted: |
|
|
|
|
|
|
|
|
|
Income from continuing operations available to Common Shares |
|
$ |
0.39 |
|
|
$ |
9.76 |
|
|
Net income available to Common Shares |
|
$ |
0.39 |
|
|
$ |
9.76 |
|
|
Weighted average Common Shares outstanding |
|
|
382,280 |
|
|
|
382,243 |
|
|
|
|
|
|
|
|
|
|
|
|
Distributions declared per Common Share outstanding |
|
$ |
0.50375 |
|
|
$ |
8.50375 |
|
4
Consolidated Statements of Funds From Operations and Normalized Funds From Operations
(Amounts in thousands except per share data)
(Unaudited)
|
|
|
Quarter Ended March 31, |
|
|||||
|
|
|
2017 |
|
|
2016 |
|
||
|
Net income |
|
$ |
149,941 |
|
|
$ |
3,731,831 |
|
|
Net (income) attributable to Noncontrolling Interests – Partially Owned Properties |
|
|
(788 |
) |
|
|
(764 |
) |
|
Preferred distributions |
|
|
(773 |
) |
|
|
(773 |
) |
|
Net income available to Common Shares and Units |
|
|
148,380 |
|
|
|
3,730,294 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
178,968 |
|
|
|
172,885 |
|
|
Depreciation – Non-real estate additions |
|
|
(1,298 |
) |
|
|
(1,408 |
) |
|
Depreciation – Partially Owned Properties |
|
|
(832 |
) |
|
|
(994 |
) |
|
Depreciation – Unconsolidated Properties |
|
|
1,142 |
|
|
|
1,233 |
|
|
Net (gain) on sales of unconsolidated entities - operating assets |
|
|
(68 |
) |
|
|
— |
|
|
Net (gain) on sales of real estate properties |
|
|
(36,707 |
) |
|
|
(3,723,479 |
) |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
Net (gain) on sales of discontinued operations |
|
|
— |
|
|
|
(15 |
) |
|
FFO available to Common Shares and Units |
|
|
289,585 |
|
|
|
178,516 |
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments (see page 22 for additional detail): |
|
|
|
|
|
|
|
|
|
Asset impairment and valuation allowances |
|
|
— |
|
|
|
— |
|
|
Write-off of pursuit costs |
|
|
715 |
|
|
|
1,448 |
|
|
Debt extinguishment (gains) losses, including prepayment penalties, preferred share redemptions and non-cash convertible debt discounts |
|
|
12,304 |
|
|
|
120,097 |
|
|
(Gains) losses on sales of non-operating assets, net of income and other tax expense (benefit) |
|
|
(18,892 |
) |
|
|
(11,977 |
) |
|
Other miscellaneous items |
|
|
9 |
|
|
|
1,397 |
|
|
Normalized FFO available to Common Shares and Units |
|
$ |
283,721 |
|
|
$ |
289,481 |
|
|
|
|
|
|
|
|
|
|
|
|
FFO |
|
$ |
290,358 |
|
|
$ |
179,289 |
|
|
Preferred distributions |
|
|
(773 |
) |
|
|
(773 |
) |
|
FFO available to Common Shares and Units |
|
$ |
289,585 |
|
|
$ |
178,516 |
|
|
FFO per share and Unit - basic |
|
$ |
0.76 |
|
|
$ |
0.47 |
|
|
FFO per share and Unit - diluted |
|
$ |
0.76 |
|
|
$ |
0.47 |
|
|
|
|
|
|
|
|
|
|
|
|
Normalized FFO |
|
$ |
284,494 |
|
|
$ |
290,254 |
|
|
Preferred distributions |
|
|
(773 |
) |
|
|
(773 |
) |
|
Normalized FFO available to Common Shares and Units |
|
$ |
283,721 |
|
|
$ |
289,481 |
|
|
Normalized FFO per share and Unit - basic |
|
$ |
0.75 |
|
|
$ |
0.77 |
|
|
Normalized FFO per share and Unit - diluted |
|
$ |
0.74 |
|
|
$ |
0.76 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average Common Shares and Units outstanding - basic |
|
|
379,504 |
|
|
|
378,289 |
|
|
Weighted average Common Shares and Units outstanding - diluted |
|
|
382,280 |
|
|
|
382,243 |
|
Note: See page 22 for additional detail regarding the adjustments from FFO to Normalized FFO. See pages 24 through 27 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.
5
Consolidated Balance Sheets
(Amounts in thousands except for share amounts)
(Unaudited)
|
|
|
March 31, 2017 |
|
|
December 31, 2016 |
|
||
|
ASSETS |
|
|
|
|
|
|
|
|
|
Investment in real estate |
|
|
|
|
|
|
|
|
|
Land |
|
$ |
5,902,186 |
|
|
$ |
5,899,862 |
|
|
Depreciable property |
|
|
18,798,554 |
|
|
|
18,730,579 |
|
|
Projects under development |
|
|
666,228 |
|
|
|
637,168 |
|
|
Land held for development |
|
|
109,136 |
|
|
|
118,816 |
|
|
Investment in real estate |
|
|
25,476,104 |
|
|
|
25,386,425 |
|
|
Accumulated depreciation |
|
|
(5,526,586 |
) |
|
|
(5,360,389 |
) |
|
Investment in real estate, net |
|
|
19,949,518 |
|
|
|
20,026,036 |
|
|
Cash and cash equivalents |
|
|
42,139 |
|
|
|
77,207 |
|
|
Investments in unconsolidated entities |
|
|
59,483 |
|
|
|
60,141 |
|
|
Deposits – restricted |
|
|
76,053 |
|
|
|
76,946 |
|
|
Escrow deposits – mortgage |
|
|
68,031 |
|
|
|
64,935 |
|
|
Other assets |
|
|
413,114 |
|
|
|
398,883 |
|
|
Total assets |
|
$ |
20,608,338 |
|
|
$ |
20,704,148 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
Mortgage notes payable, net |
|
$ |
3,766,762 |
|
|
$ |
4,119,181 |
|
|
Notes, net |
|
|
4,848,477 |
|
|
|
4,848,079 |
|
|
Line of credit and commercial paper |
|
|
314,686 |
|
|
|
19,998 |
|
|
Accounts payable and accrued expenses |
|
|
165,640 |
|
|
|
147,482 |
|
|
Accrued interest payable |
|
|
74,383 |
|
|
|
60,946 |
|
|
Other liabilities |
|
|
308,466 |
|
|
|
350,466 |
|
|
Security deposits |
|
|
63,124 |
|
|
|
62,624 |
|
|
Distributions payable |
|
|
191,641 |
|
|
|
192,296 |
|
|
Total liabilities |
|
|
9,733,179 |
|
|
|
9,801,072 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable Noncontrolling Interests – Operating Partnership |
|
|
359,733 |
|
|
|
442,092 |
|
|
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 March 31, 2017 and December 31, 2016 |
|
|
37,280 |
|
|
|
37,280 |
|
|
Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 367,137,757 shares issued and outstanding as of March 31, 2017 and 365,870,924 shares issued and outstanding as of December 31, 2016 |
|
|
3,671 |
|
|
|
3,659 |
|
|
Paid in capital |
|
|
8,846,997 |
|
|
|
8,758,422 |
|
|
Retained earnings |
|
|
1,501,654 |
|
|
|
1,543,626 |
|
|
Accumulated other comprehensive (loss) |
|
|
(109,326 |
) |
|
|
(113,909 |
) |
|
Total shareholders’ equity |
|
|
10,280,276 |
|
|
|
10,229,078 |
|
|
Noncontrolling Interests: |
|
|
|
|
|
|
|
|
|
Operating Partnership |
|
|
228,762 |
|
|
|
221,297 |
|
|
Partially Owned Properties |
|
|
6,388 |
|
|
|
10,609 |
|
|
Total Noncontrolling Interests |
|
|
235,150 |
|
|
|
231,906 |
|
|
Total equity |
|
|
10,515,426 |
|
|
|
10,460,984 |
|
|
Total liabilities and equity |
|
$ |
20,608,338 |
|
|
$ |
20,704,148 |
|
6
|
|
|
|
|
|
|
|
|
|
|
% of |
|
|
Average |
|
||
|
|
|
|
|
|
|
Apartment |
|
|
Stabilized |
|
|
Rental |
|
|||
|
Markets/Metro Areas |
|
Properties |
|
|
Units |
|
|
NOI |
|
|
Rate |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Los Angeles |
|
|
70 |
|
|
|
15,857 |
|
|
|
18.3 |
% |
|
$ |
2,396 |
|
|
Orange County |
|
|
13 |
|
|
|
4,028 |
|
|
|
4.3 |
% |
|
|
2,068 |
|
|
San Diego |
|
|
13 |
|
|
|
3,505 |
|
|
|
3.9 |
% |
|
|
2,220 |
|
|
Subtotal – Southern California |
|
|
96 |
|
|
|
23,390 |
|
|
|
26.5 |
% |
|
|
2,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San Francisco |
|
|
54 |
|
|
|
12,959 |
|
|
|
19.6 |
% |
|
|
3,047 |
|
|
New York |
|
|
40 |
|
|
|
10,632 |
|
|
|
17.9 |
% |
|
|
3,734 |
|
|
Washington DC |
|
|
47 |
|
|
|
15,637 |
|
|
|
17.6 |
% |
|
|
2,343 |
|
|
Boston |
|
|
25 |
|
|
|
6,703 |
|
|
|
10.4 |
% |
|
|
2,850 |
|
|
Seattle |
|
|
37 |
|
|
|
7,096 |
|
|
|
8.0 |
% |
|
|
2,172 |
|
|
Other Markets |
|
|
1 |
|
|
|
136 |
|
|
|
— |
% |
|
|
1,141 |
|
|
Total |
|
|
300 |
|
|
|
76,553 |
|
|
|
100.0 |
% |
|
|
2,675 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unconsolidated Properties |
|
|
2 |
|
|
|
945 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total |
|
|
302 |
|
|
|
77,498 |
|
|
|
100.0 |
% |
|
$ |
2,675 |
|
Note: Projects under development are not included in the Portfolio Summary until construction has been completed.
|
1st Quarter 2017 Earnings Release |
|
7 |
|
Equity Residential
|
Portfolio as of March 31, 2017
|
|
|
Properties |
|
|
Apartment Units |
|
||
|
|
|
|
|
|
|
|
|
|
|
Wholly Owned Properties |
|
|
280 |
|
|
|
72,485 |
|
|
Master-Leased Properties - Consolidated |
|
|
3 |
|
|
|
853 |
|
|
Partially Owned Properties - Consolidated |
|
|
17 |
|
|
|
3,215 |
|
|
Partially Owned Properties - Unconsolidated |
|
|
2 |
|
|
|
945 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
302 |
|
|
|
77,498 |
|
Portfolio Rollforward Q1 2017
($ in thousands)
|
|
|
|
|
Properties |
|
|
Apartment Units |
|
|
Sales Price |
|
|
Disposition Yield |
|
||||
|
|
|
12/31/2016 |
|
|
302 |
|
|
|
77,458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dispositions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental Properties |
|
|
|
|
(1 |
) |
|
|
(304 |
) |
|
$ |
(47,600 |
) |
|
|
(6.7 |
%) |
|
Land Parcels |
|
|
|
|
— |
|
|
|
— |
|
|
$ |
(33,450 |
) |
|
|
|
|
|
Completed Developments - Consolidated |
|
|
|
|
1 |
|
|
|
344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/31/2017 |
|
|
302 |
|
|
|
77,498 |
|
|
|
|
|
|
|
|
|
|
1st Quarter 2017 Earnings Release |
|
8 |
|
Equity Residential
|
First Quarter 2017 vs. First Quarter 2016
Same Store Results/Statistics for 71,000 Same Store Apartment Units
$ in thousands (except for Average Rental Rate)
|
|
|
Results |
|
|
Statistics |
|
||||||||||||||||||
|
Description |
|
Revenues |
|
|
Expenses |
|
|
NOI |
|
|
Average Rental Rate |
|
|
Physical Occupancy |
|
|
Turnover |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2017 |
|
$ |
560,236 |
|
|
$ |
167,316 |
|
|
$ |
392,920 |
|
|
$ |
2,633 |
|
|
|
95.9 |
% |
|
|
10.4 |
% |
|
Q1 2016 |
|
$ |
545,846 |
|
|
$ |
161,004 |
|
|
$ |
384,842 |
|
|
$ |
2,566 |
|
|
|
95.9 |
% |
|
|
10.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change |
|
$ |
14,390 |
|
|
$ |
6,312 |
|
|
$ |
8,078 |
|
|
$ |
67 |
|
|
|
— |
|
|
|
(0.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change |
|
|
2.6 |
% |
|
|
3.9 |
% |
|
|
2.1 |
% |
|
|
2.6 |
% |
|
|
|
|
|
|
|
|
First Quarter 2017 vs. Fourth Quarter 2016
Same Store Results/Statistics for 73,412 Same Store Apartment Units
$ in thousands (except for Average Rental Rate)
|
|
|
Results |
|
|
Statistics |
|
||||||||||||||||||
|
Description |
|
Revenues |
|
|
Expenses |
|
|
NOI |
|
|
Average Rental Rate |
|
|
Physical Occupancy |
|
|
Turnover |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2017 |
|
$ |
583,583 |
|
|
$ |
175,798 |
|
|
$ |
407,785 |
|
|
$ |
2,655 |
|
|
|
95.8 |
% |
|
|
10.5 |
% |
|
Q4 2016 |
|
$ |
583,240 |
|
|
$ |
166,619 |
|
|
$ |
416,621 |
|
|
$ |
2,650 |
|
|
|
95.9 |
% |
|
|
11.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change |
|
$ |
343 |
|
|
$ |
9,179 |
|
|
$ |
(8,836 |
) |
|
$ |
5 |
|
|
|
(0.1 |
%) |
|
|
(0.7 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change |
|
|
0.1 |
% |
|
|
5.5 |
% |
|
|
(2.1 |
)% |
|
|
0.2 |
% |
|
|
|
|
|
|
|
|
Note: Same store revenues for all leases are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods. See page 26 for reconciliations from operating income.
|
1st Quarter 2017 Earnings Release |
|
9 |
|
Equity Residential First Quarter 2017 vs. First Quarter 2016 Same Store Results/Statistics by Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) from Prior Year's Quarter |
|
|||||||||||||||||||||
|
Markets/Metro Areas |
|
Apartment Units |
|
|
Q1 2017 % of Actual NOI |
|
|
Q1 2017 Average Rental Rate |
|
|
Q1 2017 Weighted Average Physical Occupancy % |
|
|
Q1 2017 Turnover |
|
|
Revenues |
|
|
Expenses |
|
|
NOI |
|
|
Average Rental Rate |
|
|
Physical Occupancy |
|
|
Turnover |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Los Angeles |
|
|
14,038 |
|
|
|
17.5 |
% |
|
$ |
2,380 |
|
|
|
95.8 |
% |
|
|
11.7 |
% |
|
|
3.8 |
% |
|
|
5.0 |
% |
|
|
3.3 |
% |
|
|
4.3 |
% |
|
|
(0.3 |
%) |
|
|
0.0 |
% |
|
San Diego |
|
|
3,505 |
|
|
|
4.2 |
% |
|
|
2,220 |
|
|
|
96.0 |
% |
|
|
14.6 |
% |
|
|
5.1 |
% |
|
|
3.9 |
% |
|
|
5.5 |
% |
|
|
4.8 |
% |
|
|
0.2 |
% |
|
|
0.6 |
% |
|
Orange County |
|
|
3,684 |
|
|
|
4.1 |
% |
|
|
2,033 |
|
|
|
96.1 |
% |
|
|
10.5 |
% |
|
|
5.5 |
% |
|
|
6.4 |
% |
|
|
5.2 |
% |
|
|
5.0 |
% |
|
|
0.4 |
% |
|
|
(0.1 |
%) |
|
Subtotal – Southern California |
|
|
21,227 |
|
|
|
25.8 |
% |
|
|
2,293 |
|
|
|
95.9 |
% |
|
|
11.9 |
% |
|
|
4.3 |
% |
|
|
5.0 |
% |
|
|
4.0 |
% |
|
|
4.4 |
% |
|
|
0.0 |
% |
|
|
0.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Washington DC |
|
|
15,475 |
|
|
|
18.9 |
% |
|
|
2,343 |
|
|
|
95.9 |
% |
|
|
9.2 |
% |
|
|
2.1 |
% |
|
|
2.8 |
% |
|
|
1.8 |
% |
|
|
1.9 |
% |
|
|
0.1 |
% |
|
|
(0.3 |
%) |
|
New York |
|
|
10,007 |
|
|
|
18.1 |
% |
|
|
3,668 |
|
|
|
95.9 |
% |
|
|
8.7 |
% |
|
|
0.3 |
% |
|
|
5.7 |
% |
|
|
(2.7 |
%) |
|
|
0.3 |
% |
|
|
(0.3 |
%) |
|
|
0.0 |
% |
|
San Francisco |
|
|
11,019 |
|
|
|
18.1 |
% |
|
|
2,916 |
|
|
|
96.0 |
% |
|
|
10.7 |
% |
|
|
2.9 |
% |
|
|
1.5 |
% |
|
|
3.4 |
% |
|
|
3.2 |
% |
|
|
(0.4 |
%) |
|
|
(1.4 |
%) |
|
Boston |
|
|
6,609 |
|
|
|
11.0 |
% |
|
|
2,850 |
|
|
|
95.9 |
% |
|
|
8.7 |
% |
|
|
1.4 |
% |
|
|
0.9 |
% |
|
|
1.6 |
% |
|
|
1.3 |
% |
|
|
1.1 |
% |
|
|
(2.6 |
%) |
|
Seattle |
|
|
6,527 |
|
|
|
8.0 |
% |
|
|
2,175 |
|
|
|
95.9 |
% |
|
|
12.6 |
% |
|
|
6.4 |
% |
|
|
5.9 |
% |
|
|
6.7 |
% |
|
|
5.7 |
% |
|
|
0.5 |
% |
|
|
0.3 |
% |
|
Other Markets |
|
|
136 |
|
|
|
0.1 |
% |
|
|
1,141 |
|
|
|
99.3 |
% |
|
|
5.1 |
% |
|
|
6.3 |
% |
|
|
29.5 |
% |
|
|
(6.1 |
%) |
|
|
5.9 |
% |
|
|
0.4 |
% |
|
|
(3.7 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
71,000 |
|
|
|
100.0 |
% |
|
$ |
2,633 |
|
|
|
95.9 |
% |
|
|
10.4 |
% |
|
|
2.6 |
% |
|
|
3.9 |
% |
|
|
2.1 |
% |
|
|
2.6 |
% |
|
|
0.0 |
% |
|
|
(0.5 |
%) |
|
1st Quarter 2017 Earnings Release |
|
10 |
|
Equity Residential First Quarter 2017 vs. Fourth Quarter 2016 Same Store Results/Statistics by Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) from Prior Quarter |
|
|||||||||||||||||||||
|
Markets/Metro Areas |
|
Apartment Units |
|
|
Q1 2017 % of Actual NOI |
|
|
Q1 2017 Average Rental Rate |
|
|
Q1 2017 Weighted Average Physical Occupancy % |
|
|
Q1 2017 Turnover |
|
|
Revenues |
|
|
Expenses |
|
|
NOI |
|
|
Average Rental Rate |
|
|
Physical Occupancy |
|
|
Turnover |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Los Angeles |
|
|
14,430 |
|
|
|
17.3 |
% |
|
$ |
2,379 |
|
|
|
95.7 |
% |
|
|
11.8 |
% |
|
|
0.2 |
% |
|
|
3.7 |
% |
|
|
(1.2 |
%) |
|
|
0.6 |
% |
|
|
(0.2 |
%) |
|
|
(1.7 |
%) |
|
San Diego |
|
|
3,505 |
|
|
|
4.0 |
% |
|
|
2,220 |
|
|
|
96.0 |
% |
|
|
14.6 |
% |
|
|
1.0 |
% |
|
|
5.1 |
% |
|
|
(0.4 |
%) |
|
|
1.1 |
% |
|
|
0.0 |
% |
|
|
0.3 |
% |
|
Orange County |
|
|
3,684 |
|
|
|
4.0 |
% |
|
|
2,033 |
|
|
|
96.1 |
% |
|
|
10.5 |
% |
|
|
0.3 |
% |
|
|
7.9 |
% |
|
|
(2.0 |
%) |
|
|
0.4 |
% |
|
|
(0.1 |
%) |
|
|
(1.2 |
%) |
|
Subtotal – Southern California |
|
|
21,619 |
|
|
|
25.3 |
% |
|
|
2,294 |
|
|
|
95.9 |
% |
|
|
12.0 |
% |
|
|
0.4 |
% |
|
|
4.5 |
% |
|
|
(1.2 |
%) |
|
|
0.7 |
% |
|
|
(0.1 |
%) |
|
|
(1.3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San Francisco |
|
|
11,846 |
|
|
|
18.9 |
% |
|
|
2,954 |
|
|
|
95.7 |
% |
|
|
11.1 |
% |
|
|
0.0 |
% |
|
|
4.0 |
% |
|
|
(1.2 |
%) |
|
|
0.3 |
% |
|
|
(0.3 |
%) |
|
|
(0.1 |
%) |
|
New York |
|
|
10,632 |
|
|
|
18.6 |
% |
|
|
3,734 |
|
|
|
95.9 |
% |
|
|
8.6 |
% |
|
|
0.0 |
% |
|
|
7.9 |
% |
|
|
(4.4 |
%) |
|
|
0.0 |
% |
|
|
(0.2 |
%) |
|
|
0.1 |
% |
|
Washington DC |
|
|
15,475 |
|
|
|
18.2 |
% |
|
|
2,343 |
|
|
|
95.9 |
% |
|
|
9.2 |
% |
|
|
0.0 |
% |
|
|
4.4 |
% |
|
|
(1.8 |
%) |
|
|
0.1 |
% |
|
|
(0.1 |
%) |
|
|
(1.1 |
%) |
|
Boston |
|
|
6,609 |
|
|
|
10.6 |
% |
|
|
2,850 |
|
|
|
95.9 |
% |
|
|
8.7 |
% |
|
|
(0.8 |
%) |
|
|
3.0 |
% |
|
|
(2.2 |
%) |
|
|
(0.8 |
%) |
|
|
0.2 |
% |
|
|
(1.5 |
%) |
|
Seattle |
|
|
7,095 |
|
|
|
8.3 |
% |
|
|
2,172 |
|
|
|
95.8 |
% |
|
|
12.8 |
% |
|
|
0.8 |
% |
|
|
8.9 |
% |
|
|
(2.0 |
%) |
|
|
0.8 |
% |
|
|
0.2 |
% |
|
|
1.1 |
% |
|
Other Markets |
|
|
136 |
|
|
|
0.1 |
% |
|
|
1,141 |
|
|
|
99.3 |
% |
|
|
5.1 |
% |
|
|
1.8 |
% |
|
|
41.0 |
% |
|
|
(15.4 |
%) |
|
|
(0.4 |
%) |
|
|
2.4 |
% |
|
|
(9.6 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
73,412 |
|
|
|
100.0 |
% |
|
$ |
2,655 |
|
|
|
95.8 |
% |
|
|
10.5 |
% |
|
|
0.1 |
% |
|
|
5.5 |
% |
|
|
(2.1 |
%) |
|
|
0.2 |
% |
|
|
(0.1 |
%) |
|
|
(0.7 |
%) |
|
1st Quarter 2017 Earnings Release |
|
11 |
First Quarter 2017 vs. First Quarter 2016
Same Store Operating Expenses for 71,000 Same Store Apartment Units
$ in thousands
|
|
|
Actual Q1 2017 |
|
|
Actual Q1 2016 |
|
|
$ Change |
|
|
% Change |
|
|
% of Actual Q1 2017 Operating Expenses |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes |
|
$ |
70,364 |
|
|
$ |
67,553 |
|
|
$ |
2,811 |
|
|
|
4.2 |
% |
|
|
42.1 |
% |
|
On-site payroll (1) |
|
|
37,406 |
|
|
|
35,774 |
|
|
|
1,632 |
|
|
|
4.6 |
% |
|
|
22.4 |
% |
|
Utilities (2) |
|
|
23,728 |
|
|
|
23,312 |
|
|
|
416 |
|
|
|
1.8 |
% |
|
|
14.2 |
% |
|
Repairs and maintenance (3) |
|
|
20,324 |
|
|
|
19,042 |
|
|
|
1,282 |
|
|
|
6.7 |
% |
|
|
12.1 |
% |
|
Insurance |
|
|
4,202 |
|
|
|
4,370 |
|
|
|
(168 |
) |
|
|
(3.8 |
%) |
|
|
2.5 |
% |
|
Leasing and advertising |
|
|
2,407 |
|
|
|
2,150 |
|
|
|
257 |
|
|
|
12.0 |
% |
|
|
1.4 |
% |
|
Other on-site operating expenses (4) |
|
|
8,885 |
|
|
|
8,803 |
|
|
|
82 |
|
|
|
0.9 |
% |
|
|
5.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same store operating expenses |
|
$ |
167,316 |
|
|
$ |
161,004 |
|
|
$ |
6,312 |
|
|
|
3.9 |
% |
|
|
100.0 |
% |
|
(1) |
On-site payroll - Includes payroll and related expenses for on-site personnel including property managers, leasing consultants and maintenance staff. |
|
(2) |
Utilities - Represents gross expenses prior to any recoveries under the Resident Utility Billing System ("RUBS"). Recoveries are reflected in rental income. |
|
(3) |
Repairs and maintenance - Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair and maintenance costs. |
|
(4) |
Other on-site operating expenses - Includes ground lease costs and administrative costs such as office supplies, telephone and data charges and association and business licensing fees. |
|
1st Quarter 2017 Earnings Release |
|
12 |
Debt Summary as of March 31, 2017
($ in thousands)
|
|
|
Amounts (1) |
|
|
% of Total |
|
|
Weighted Average Rates (1) |
|
|
Weighted Average Maturities (years) |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured |
|
$ |
3,766,762 |
|
|
|
42.2 |
% |
|
|
4.43 |
% |
|
|
5.9 |
|
|
Unsecured |
|
|
5,163,163 |
|
|
|
57.8 |
% |
|
|
4.37 |
% |
|
|
9.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
8,929,925 |
|
|
|
100.0 |
% |
|
|
4.40 |
% |
|
|
7.8 |
|
|
Fixed Rate Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured – Conventional |
|
$ |
3,130,010 |
|
|
|
35.0 |
% |
|
|
5.02 |
% |
|
|
4.7 |
|
|
Unsecured – Public |
|
|
4,399,172 |
|
|
|
49.3 |
% |
|
|
4.80 |
% |
|
|
10.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Rate Debt |
|
|
7,529,182 |
|
|
|
84.3 |
% |
|
|
4.89 |
% |
|
|
8.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Floating Rate Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured – Conventional |
|
|
7,044 |
|
|
|
0.1 |
% |
|
|
0.75 |
% |
|
|
16.6 |
|
|
Secured – Tax Exempt |
|
|
629,708 |
|
|
|
7.1 |
% |
|
|
1.33 |
% |
|
|
11.5 |
|
|
Unsecured – Public (2) |
|
|
449,305 |
|
|
|
5.0 |
% |
|
|
1.62 |
% |
|
|
2.2 |
|
|
Unsecured – Revolving Credit Facility (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4.8 |
|
|
Unsecured – Commercial Paper Program (4) |
|
|
314,686 |
|
|
|
3.5 |
% |
|
|
1.09 |
% |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Floating Rate Debt |
|
|
1,400,743 |
|
|
|
15.7 |
% |
|
|
1.39 |
% |
|
|
6.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
8,929,925 |
|
|
|
100.0 |
% |
|
|
4.40 |
% |
|
|
7.8 |
|
|
(1) |
Net of the effect of any derivative instruments. Weighted average rates are for the quarter ended March 31, 2017. |
|
(2) |
Fair value interest rate swaps convert the $450.0 million 2.375% notes due July 1, 2019 to a floating interest rate of 90-Day LIBOR plus 0.61%. |
|
(3) |
The Company’s $2.0 billion unsecured revolving credit facility matures January 10, 2022. The interest rate on advances under the credit facility will generally be LIBOR plus a spread (currently 0.825%) and an annual facility fee (currently 12.5 basis points). Both the spread and the facility fee are dependent on the credit rating of the Company’s long-term debt. As of March 31, 2017, there was approximately $1.66 billion available on the Company’s unsecured revolving credit facility (net of $20.7 million which was restricted/dedicated to support letters of credit and net of $315.0 million outstanding on the commercial paper program). |
|
(4) |
The Company may borrow up to a maximum of $500.0 million on the commercial paper program subject to market conditions. The notes bear interest at various floating rates with a weighted average of 1.09% for the quarter ended March 31, 2017 and a weighted average maturity of 26 days as of March 31, 2017. |
Note: The Company capitalized interest of approximately $8.2 million and $14.2 million during the quarters ended March 31, 2017 and 2016, respectively.
|
1st Quarter 2017 Earnings Release |
|
13 |
Debt Maturity Schedule as of March 31, 2017
($ in thousands)
|
Year |
|
Fixed Rate (1) |
|
|
Floating Rate (1) |
|
|
Total |
|
|
% of Total |
|
|
Weighted Average Rates on Fixed Rate Debt (1) |
|
|
Weighted Average Rates on Total Debt (1) |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
$ |
593,622 |
|
|
$ |
318,300 |
|
(2) |
$ |
911,922 |
|
|
|
10.1 |
% |
|
|
6.20 |
% |
|
|
4.49 |
% |
|
2018 |
|
|
83,056 |
|
|
|
100,735 |
|
|
|
183,791 |
|
|
|
2.0 |
% |
|
|
5.58 |
% |
|
|
3.33 |
% |
|
2019 |
|
|
507,071 |
|
(3) |
|
477,251 |
|
|
|
984,322 |
|
|
|
10.9 |
% |
|
|
5.17 |
% |
|
|
3.42 |
% |
|
2020 |
|
|
1,678,950 |
|
(4) |
|
10,500 |
|
|
|
1,689,450 |
|
|
|
18.7 |
% |
|
|
5.49 |
% |
|
|
5.46 |
% |
|
2021 |
|
|
927,882 |
|
|
|
12,600 |
|
|
|
940,482 |
|
|
|
10.4 |
% |
|
|
4.64 |
% |
|
|
4.59 |
% |
|
2022 |
|
|
265,737 |
|
|
|
13,800 |
|
|
|
279,537 |
|
|
|
3.1 |
% |
|
|
3.26 |
% |
|
|
3.15 |
% |
|
2023 |
|
|
1,327,218 |
|
|
|
15,300 |
|
|
|
1,342,518 |
|
|
|
14.9 |
% |
|
|
3.74 |
% |
|
|
3.71 |
% |
|
2024 |
|
|
1,711 |
|
|
|
17,100 |
|
|
|
18,811 |
|
|
|
0.2 |
% |
|
|
4.89 |
% |
|
|
1.25 |
% |
|
2025 |
|
|
451,797 |
|
|
|
19,600 |
|
|
|
471,397 |
|
|
|
5.2 |
% |
|
|
3.38 |
% |
|
|
3.28 |
% |
|
2026 |
|
|
593,912 |
|
|
|
21,700 |
|
|
|
615,612 |
|
|
|
6.8 |
% |
|
|
3.59 |
% |
|
|
3.49 |
% |
|
2027+ |
|
|
1,141,276 |
|
|
|
457,665 |
|
|
|
1,598,941 |
|
|
|
17.7 |
% |
|
|
4.52 |
% |
|
|
3.48 |
% |
|
Subtotal |
|
|
7,572,232 |
|
|
|
1,464,551 |
|
|
|
9,036,783 |
|
|
|
100.0 |
% |
|
|
4.59 |
% |
|
|
4.07 |
% |
|
Deferred Financing Costs and Unamortized (Discount) |
|
|
(43,050 |
) |
|
|
(63,808 |
) |
|
|
(106,858 |
) |
|
N/A |
|
|
N/A |
|
|
N/A |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
7,529,182 |
|
|
$ |
1,400,743 |
|
|
$ |
8,929,925 |
|
|
|
100.0 |
% |
|
|
4.59 |
% |
|
|
4.07 |
% |
|
(1) |
Net of the effect of any derivative instruments. Weighted average rates are as of March 31, 2017. |
|
(2) |
Includes $315.0 million in principal outstanding on the Company's commercial paper program. The Company may borrow up to a maximum of $500.0 million on the program subject to market conditions. |
|
(3) |
Includes a $500.0 million 5.19% mortgage loan with a maturity date of October 1, 2019 that can be prepaid at par beginning October 1, 2018. |
|
(4) |
Includes a $550.0 million 6.08% mortgage loan with a maturity date of March 1, 2020 that can be prepaid at par beginning March 1, 2019. Also includes a $500.0 million 5.78% mortgage loan with a maturity date of July 1, 2020 that can be prepaid at par beginning July 1, 2019. |
|
1st Quarter 2017 Earnings Release |
|
14 |
Selected Unsecured Public Debt Covenants
|
|
|
March 31, 2017 |
|
|
December 31, 2016 |
|
||
|
Total Debt to Adjusted Total Assets (not to exceed 60%) |
|
|
35.1% |
|
|
|
35.4% |
|
|
|
|
|
|
|
|
|
|
|
|
Secured Debt to Adjusted Total Assets (not to exceed 40%) |
|
|
14.8% |
|
|
|
16.2% |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Income Available for Debt Service to Maximum Annual Service Charges (must be at least 1.5 to 1) |
|
|
3.96 |
|
|
|
3.73 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Unsecured Assets to Unsecured Debt (must be at least 150%) |
|
|
377.6% |
|
|
|
390.8% |
|
Note: These selected covenants relate to ERP Operating Limited Partnership's ("ERPOP") outstanding unsecured public debt, which represent the Company's most restrictive covenants. Equity Residential is the general partner of ERPOP.
Selected Credit Ratios
|
|
|
March 31, 2017 |
|
|
December 31, 2016 |
|
||
|
Total debt to Normalized EBITDA |
|
5.73x |
|
|
5.74x |
|
||
|
|
|
|
|
|
|
|
|
|
|
Net debt to Normalized EBITDA |
|
5.66x |
|
|
5.65x |
|
||
|
|
|
|
|
|
|
|
|
|
|
Unencumbered NOI as a % of total NOI |
|
|
72.8% |
|
|
|
71.1% |
|
Note: See page 21 for the Normalized EBITDA reconciliations.
|
1st Quarter 2017 Earnings Release |
|
15 |
Capital Structure as of March 31, 2017
(Amounts in thousands except for share/unit and per share amounts)
|
Secured Debt |
|
|
|
|
|
|
|
|
|
$ |
3,766,762 |
|
|
|
42.2 |
% |
|
|
|
|
|
Unsecured Debt |
|
|
|
|
|
|
|
|
|
|
5,163,163 |
|
|
|
57.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt |
|
|
|
|
|
|
|
|
|
|
8,929,925 |
|
|
|
100.0 |
% |
|
|
27.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares (includes Restricted Shares) |
|
|
367,137,757 |
|
|
|
96.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Units (includes OP Units and Restricted Units) |
|
|
13,827,472 |
|
|
|
3.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Shares and Units |
|
|
380,965,229 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Price at March 31, 2017 |
|
$ |
62.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,703,657 |
|
|
|
99.8 |
% |
|
|
|
|
|
Perpetual Preferred Equity (see below) |
|
|
|
|
|
|
|
|
|
|
37,280 |
|
|
|
0.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Equity |
|
|
|
|
|
|
|
|
|
|
23,740,937 |
|
|
|
100.0 |
% |
|
|
72.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Market Capitalization |
|
|
|
|
|
|
|
|
|
$ |
32,670,862 |
|
|
|
|
|
|
|
100.0 |
% |
Perpetual Preferred Equity as of March 31, 2017
(Amounts in thousands except for share and per share amounts)
|
Series |
|
Redemption Date |
|
Outstanding Shares |
|
|
Liquidation Value |
|
|
Annual Dividend Per Share |
|
|
Annual Dividend Amount |
|
||||
|
Preferred Shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.29% Series K |
|
12/10/26 |
|
|
745,600 |
|
|
$ |
37,280 |
|
|
$ |
4.145 |
|
|
$ |
3,091 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Perpetual Preferred Equity |
|
|
|
|
745,600 |
|
|
$ |
37,280 |
|
|
|
|
|
|
$ |
3,091 |
|
|
1st Quarter 2017 Earnings Release |
|
16 |
|
|
|
Q1 2017 |
|
|
Q1 2016 |
|
||
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Amounts Outstanding for Net Income Purposes: |
|
|
|
|
|
|
|
|
|
Common Shares - basic |
|
|
366,605,450 |
|
|
|
364,592,279 |
|
|
Shares issuable from assumed conversion/vesting of: |
|
|
|
|
|
|
|
|
|
- OP Units |
|
|
12,898,618 |
|
|
|
13,696,822 |
|
|
- long-term compensation shares/units |
|
|
2,775,943 |
|
|
|
3,953,965 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Shares and Units - diluted |
|
|
382,280,011 |
|
|
|
382,243,066 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Amounts Outstanding for FFO and Normalized FFO Purposes: |
|
|
|
|
|
|
|
|
|
Common Shares - basic |
|
|
366,605,450 |
|
|
|
364,592,279 |
|
|
OP Units - basic |
|
|
12,898,618 |
|
|
|
13,696,822 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Shares and OP Units - basic |
|
|
379,504,068 |
|
|
|
378,289,101 |
|
|
Shares issuable from assumed conversion/vesting of: |
|
|
|
|
|
|
|
|
|
- long-term compensation shares/units |
|
|
2,775,943 |
|
|
|
3,953,965 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Shares and Units - diluted |
|
|
382,280,011 |
|
|
|
382,243,066 |
|
|
|
|
|
|
|
|
|
|
|
|
Period Ending Amounts Outstanding: |
|
|
|
|
|
|
|
|
|
Common Shares (includes Restricted Shares) |
|
|
367,137,757 |
|
|
|
365,496,019 |
|
|
Units (includes OP Units and Restricted Units) |
|
|
13,827,472 |
|
|
|
14,703,617 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Shares and Units |
|
|
380,965,229 |
|
|
|
380,199,636 |
|
|
1st Quarter 2017 Earnings Release |
|
17 |
|
Equity Residential Partially Owned Entities as of March 31, 2017 (Amounts in thousands except for property and apartment unit amounts)
|
|
|
|
Consolidated |
|
|
Unconsolidated |
|
||
|
|
|
|
|
|
|
|
|
|
|
Total properties |
|
|
17 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
Total apartment units |
|
|
3,215 |
|
|
|
945 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating information for the quarter ended 3/31/17 (at 100%): |
|
|
|
|
|
|
|
|
|
Operating revenue |
|
$ |
23,028 |
|
|
$ |
7,987 |
|
|
Operating expenses |
|
|
5,676 |
|
|
|
2,941 |
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income |
|
|
17,352 |
|
|
|
5,046 |
|
|
Property management |
|
|
813 |
|
|
|
213 |
|
|
General and administrative/other |
|
|
16 |
|
|
|
25 |
|
|
Depreciation |
|
|
5,201 |
|
|
|
4,020 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
11,322 |
|
|
|
788 |
|
|
Interest and other income |
|
|
13 |
|
|
|
— |
|
|
Interest: |
|
|
|
|
|
|
|
|
|
Expense incurred, net |
|
|
(3,312 |
) |
|
|
(2,072 |
) |
|
Amortization of deferred financing costs |
|
|
(68 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income and other taxes and (loss) from investments in unconsolidated entities |
|
|
7,955 |
|
|
|
(1,284 |
) |
|
Income and other tax (expense) benefit |
|
|
(34 |
) |
|
|
(12 |
) |
|
(Loss) from investments in unconsolidated entities |
|
|
(411 |
) |
|
|
— |
|
|
Net income (loss) |
|
$ |
7,510 |
|
|
$ |
(1,296 |
) |
|
|
|
|
|
|
|
|
|
|
|
Debt - Secured (1): |
|
|
|
|
|
|
|
|
|
EQR Ownership (2) |
|
$ |
236,590 |
|
|
$ |
29,085 |
|
|
Noncontrolling Ownership |
|
|
64,829 |
|
|
|
116,339 |
|
|
|
|
|
|
|
|
|
|
|
|
Total (at 100%) |
|
$ |
301,419 |
|
|
$ |
145,424 |
|
|
(1) |
All debt is non-recourse to the Company. |
|
(2) |
Represents the Company's current equity ownership interest. |
|
1st Quarter 2017 Earnings Release |
|
18 |
|
Equity Residential Development and Lease-Up Projects as of March 31, 2017 (Amounts in thousands except for project and apartment unit amounts)
|
|
Projects |
|
Location |
|
No. of Apartment Units |
|
|
Total Capital Cost |
|
|
Total Book Value to Date |
|
|
Total Book Value Not Placed in Service |
|
|
Total Debt |
|
|
Percentage Completed |
|
|
Percentage Leased |
|
|
Percentage Occupied |
|
|
Estimated Completion Date |
|
Estimated Stabilization Date |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projects Under Development: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
455 Eye Street |
|
Washington, DC |
|
|
174 |
|
|
$ |
73,157 |
|
|
$ |
64,636 |
|
|
$ |
64,636 |
|
|
$ |
— |
|
|
|
83 |
% |
|
|
2 |
% |
|
|
— |
|
|
Q3 2017 |
|
Q2 2018 |
|
855 Brannan (formerly 801 Brannan) |
|
San Francisco, CA |
|
|
449 |
|
|
|
304,035 |
|
|
|
236,310 |
|
|
|
236,310 |
|
|
|
— |
|
|
|
75 |
% |
|
|
1 |
% |
|
|
— |
|
|
Q3 2017 |
|
Q1 2019 |
|
Helios (formerly 2nd & Pine) |
|
Seattle, WA |
|
|
398 |
|
|
|
215,787 |
|
|
|
197,906 |
|
|
|
197,906 |
|
|
|
— |
|
|
|
90 |
% |
|
|
— |
|
|
|
— |
|
|
Q3 2017 |
|
Q2 2019 |
|
Cascade |
|
Seattle, WA |
|
|
477 |
|
|
|
176,378 |
|
|
|
138,710 |
|
|
|
138,710 |
|
|
|
— |
|
|
|
79 |
% |
|
|
2 |
% |
|
|
— |
|
|
Q3 2017 |
|
Q2 2019 |
|
100 K Street |
|
Washington, DC |
|
|
222 |
|
|
|
88,023 |
|
|
|
28,666 |
|
|
|
28,666 |
|
|
|
— |
|
|
|
11 |
% |
|
|
— |
|
|
|
— |
|
|
Q4 2018 |
|
Q4 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projects Under Development |
|
|
|
|
1,720 |
|
|
|
857,380 |
|
|
|
666,228 |
|
|
|
666,228 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Completed Not Stabilized (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
340 Fremont (formerly Rincon Hill) |
|
San Francisco, CA |
|
|
348 |
|
|
|
292,054 |
|
|
|
289,644 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
94 |
% |
|
|
90 |
% |
|
Completed |
|
Q2 2017 |
|
One Henry Adams |
|
San Francisco, CA |
|
|
241 |
|
|
|
172,337 |
|
|
|
166,244 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
50 |
% |
|
|
44 |
% |
|
Completed |
|
Q4 2017 |
|
Altitude (formerly Village at Howard Hughes) |
|
Los Angeles, CA |
|
|
545 |
|
|
|
193,231 |
|
|
|
191,955 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
65 |
% |
|
|
63 |
% |
|
Completed |
|
Q1 2018 |
|
The Alton (formerly Millikan) |
|
Irvine, CA |
|
|
344 |
|
|
|
108,681 |
|
|
|
105,027 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
48 |
% |
|
|
43 |
% |
|
Completed |
|
Q1 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projects Completed Not Stabilized |
|
|
|
|
1,478 |
|
|
|
766,303 |
|
|
|
752,870 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Completed and Stabilized During the Quarter: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Potrero 1010 |
|
San Francisco, CA |
|
|
453 |
|
|
|
223,009 |
|
|
|
222,720 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
97 |
% |
|
|
96 |
% |
|
Completed |
|
Stabilized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Projects Completed and Stabilized During the Quarter |
|
|
|
|
453 |
|
|
|
223,009 |
|
|
|
222,720 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Development Projects |
|
|
|
|
3,651 |
|
|
$ |
1,846,692 |
|
|
$ |
1,641,818 |
|
|
$ |
666,228 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land Held for Development |
|
|
|
N/A |
|
|
N/A |
|
|
$ |
109,136 |
|
|
$ |
109,136 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capital Cost |
|
|
Q1 2017 NOI |
|
|
|
|
|
|
|
|
|
||
|
Projects Under Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
857,380 |
|
|
$ |
(89 |
) |
|
|
|
|
|
|
|
|
|
Completed Not Stabilized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
766,303 |
|
|
|
5,739 |
|
|
|
|
|
|
|
|
|
|
Completed and Stabilized During the Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
223,009 |
|
|
|
4,032 |
|
|
|
|
|
|
|
|
|
|
Total Development NOI Contribution |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,846,692 |
|
|
$ |
9,682 |
|
|
|
|
|
|
|
|
|
Note: All development projects listed are wholly owned by the Company.
|
(1) |
Properties included here are substantially complete. However, they may still require additional exterior and interior work for all apartment units to be available for leasing. |
|
1st Quarter 2017 Earnings Release |
|
19 |
|
|
|
|
|
|
|
Repairs and Maintenance Expenses |
|
|
Capital Expenditures to Real Estate |
|
|
Total Expenditures |
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
Total Apartment Units (1) |
|
|
Expense (2) |
|
|
Avg. Per Apartment Unit |
|
|
Payroll (3) |
|
|
Avg. Per Apartment Unit |
|
|
Total |
|
|
Avg. Per Apartment Unit |
|
|
Replacements (4) |
|
|
Avg. Per Apartment Unit |
|
|
Building Improvements (5) |
|
|
Avg. Per Apartment Unit |
|
|
Total |
|
|
Avg. Per Apartment Unit |
|
|
Grand Total |
|
|
Avg. Per Apartment Unit |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store Properties |
|
|
71,000 |
|
|
$ |
20,324 |
|
|
$ |
286 |
|
|
$ |
17,175 |
|
|
$ |
242 |
|
|
$ |
37,499 |
|
|
$ |
528 |
|
|
$ |
18,299 |
|
|
$ |
258 |
|
|
$ |
19,284 |
|
|
$ |
271 |
|
|
$ |
37,583 |
|
|
$ |
529 |
|
(8) |
$ |
75,082 |
|
|
$ |
1,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Same Store Properties (6) |
|
|
5,553 |
|
|
|
1,290 |
|
|
|
248 |
|
|
|
1,049 |
|
|
|
201 |
|
|
|
2,339 |
|
|
|
449 |
|
|
|
699 |
|
|
|
134 |
|
|
|
862 |
|
|
|
165 |
|
|
|
1,561 |
|
|
|
299 |
|
|
|
3,900 |
|
|
|
748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (7) |
|
|
— |
|
|
|
135 |
|
|
|
|
|
|
|
211 |
|
|
|
|
|
|
|
346 |
|
|
|
|
|
|
|
21 |
|
|
|
|
|
|
|
132 |
|
|
|
|
|
|
|
153 |
|
|
|
|
|
|
|
499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
76,553 |
|
|
$ |
21,749 |
|
|
|
|
|
|
$ |
18,435 |
|
|
|
|
|
|
$ |
40,184 |
|
|
|
|
|
|
$ |
19,019 |
|
|
|
|
|
|
$ |
20,278 |
|
|
|
|
|
|
$ |
39,297 |
|
|
|
|
|
|
$ |
79,481 |
|
|
|
|
|
|
(1) |
Total Apartment Units - Excludes 945 unconsolidated apartment units for which repairs and maintenance expenses and capital expenditures to real estate are self-funded and do not consolidate into the Company's results. |
|
(2) |
Repairs and Maintenance Expenses - Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair and maintenance costs. |
|
(3) |
Maintenance Payroll - Includes payroll and related expenses for maintenance staff. |
|
(4) |
Replacements - Includes new expenditures inside the apartment units such as appliances, mechanical equipment, fixtures and flooring, including carpeting. Replacements for same store properties also include $10.8 million spent during the first quarter of 2017 on apartment unit renovations/rehabs (primarily kitchens and baths) on approximately 740 same store apartment units (equating to approximately $14,700 per apartment unit rehabbed) designed to reposition these units for higher rental levels in their respective markets. During 2017, the Company expects to spend approximately $50.0 million for all unit renovation/rehab costs (primarily on same store properties) at an average cost of $11,000 per apartment unit rehabbed. |
|
(5) |
Building Improvements - Includes roof replacement, paving, amenities and common areas, building mechanical equipment systems, exterior painting and siding, major landscaping, vehicles and office and maintenance equipment. |
|
(6) |
Per apartment unit amounts are based on a weighted average of 5,212 apartment units. |
|
(7) |
Other - Primarily includes expenditures for properties sold and properties under development. |
|
(8) |
The Company estimates that during 2017 it will spend approximately $2,600 per apartment unit of capital expenditures, inclusive of apartment unit renovation/rehab costs, or $1,900 per apartment unit excluding apartment unit renovation/rehab costs. These estimates include approximately $17.0 million or approximately $250 per apartment unit of additional expenditures for resident focused renovation projects such as common areas and fitness centers in order to remain competitive with the new luxury supply being delivered in many of our markets. |
|
1st Quarter 2017 Earnings Release |
|
20 |
Normalized EBITDA Reconciliations for Page 15
|
|
|
Trailing Twelve Months |
|
|
2017 |
|
|
2016 |
|
|||||||||||||||||||
|
|
|
March 31, 2017 |
|
|
December 31, 2016 |
|
|
Q1 |
|
|
Q4 |
|
|
Q3 |
|
|
Q2 |
|
|
Q1 |
|
|||||||
|
Net income |
|
$ |
898,214 |
|
|
$ |
4,480,104 |
|
|
$ |
149,941 |
|
|
$ |
302,381 |
|
|
$ |
217,492 |
|
|
$ |
228,400 |
|
|
$ |
3,731,831 |
|
|
Interest expense incurred, net |
|
|
374,964 |
|
|
|
482,246 |
|
|
|
106,210 |
|
|
|
95,930 |
|
|
|
86,352 |
|
|
|
86,472 |
|
|
|
213,492 |
|
|
Amortization of deferred financing costs |
|
|
9,535 |
|
|
|
12,633 |
|
|
|
2,296 |
|
|
|
2,633 |
|
|
|
2,261 |
|
|
|
2,345 |
|
|
|
5,394 |
|
|
Depreciation |
|
|
711,732 |
|
|
|
705,649 |
|
|
|
178,968 |
|
|
|
177,407 |
|
|
|
179,230 |
|
|
|
176,127 |
|
|
|
172,885 |
|
|
Income and other tax expense (benefit) (includes discontinued operations) |
|
|
1,529 |
|
|
|
1,625 |
|
|
|
262 |
|
|
|
425 |
|
|
|
426 |
|
|
|
416 |
|
|
|
358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
1,995,974 |
|
|
|
5,682,257 |
|
|
|
437,677 |
|
|
|
578,776 |
|
|
|
485,761 |
|
|
|
493,760 |
|
|
|
4,123,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-off of pursuit costs (other expenses) |
|
|
3,359 |
|
|
|
4,092 |
|
|
|
715 |
|
|
|
713 |
|
|
|
816 |
|
|
|
1,115 |
|
|
|
1,448 |
|
|
(Income) loss from investments in unconsolidated entities |
|
|
(4,832 |
) |
|
|
(4,801 |
) |
|
|
1,073 |
|
|
|
1,045 |
|
|
|
(7,750 |
) |
|
|
800 |
|
|
|
1,104 |
|
|
Net (gain) loss on sales of land parcels |
|
|
(23,202 |
) |
|
|
(15,731 |
) |
|
|
(19,193 |
) |
|
|
28 |
|
|
|
(4,037 |
) |
|
|
— |
|
|
|
(11,722 |
) |
|
(Gain) loss on sale of investment securities and other investments (interest and other income) |
|
|
(57,853 |
) |
|
|
(58,409 |
) |
|
|
— |
|
|
|
7 |
|
|
|
(3,260 |
) |
|
|
(54,600 |
) |
|
|
(556 |
) |
|
Insurance/litigation settlement or reserve income (interest and other income) |
|
|
(3,555 |
) |
|
|
(3,228 |
) |
|
|
(380 |
) |
|
|
(337 |
) |
|
|
(1,517 |
) |
|
|
(1,321 |
) |
|
|
(53 |
) |
|
Insurance/litigation/environmental settlement or reserve expense (other expenses) |
|
|
4,561 |
|
|
|
4,024 |
|
|
|
293 |
|
|
|
(5,074 |
) |
|
|
9,339 |
|
|
|
3 |
|
|
|
(244 |
) |
|
Other |
|
|
1,241 |
|
|
|
2,839 |
|
|
|
96 |
|
|
|
373 |
|
|
|
337 |
|
|
|
435 |
|
|
|
1,694 |
|
|
Net (gain) on sales of discontinued operations |
|
|
(28 |
) |
|
|
(43 |
) |
|
|
— |
|
|
|
— |
|
|
|
(28 |
) |
|
|
— |
|
|
|
(15 |
) |
|
Net (gain) on sales of real estate properties |
|
|
(357,283 |
) |
|
|
(4,044,055 |
) |
|
|
(36,707 |
) |
|
|
(173,184 |
) |
|
|
(90,036 |
) |
|
|
(57,356 |
) |
|
|
(3,723,479 |
) |
|
Normalized EBITDA |
|
$ |
1,558,382 |
|
|
$ |
1,566,945 |
|
|
$ |
383,574 |
|
|
$ |
402,347 |
|
|
$ |
389,625 |
|
|
$ |
382,836 |
|
|
$ |
392,137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Items: |
|
March 31, 2017 |
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt |
|
$ |
8,929,925 |
|
|
$ |
8,987,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
(42,139 |
) |
|
|
(77,207 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage principal reserves/sinking funds |
|
|
(61,033 |
) |
|
|
(58,652 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt |
|
$ |
8,826,753 |
|
|
$ |
8,851,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Quarter 2017 Earnings Release |
|
21 |
|
|
|
Quarter Ended March 31, |
|
|||||||||
|
|
|
2017 |
|
|
2016 |
|
|
Variance |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
Asset impairment and valuation allowances |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-off of pursuit costs (other expenses) |
|
|
715 |
|
|
|
1,448 |
|
|
|
(733 |
) |
|
Write-off of pursuit costs |
|
|
715 |
|
|
|
1,448 |
|
|
|
(733 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepayment premiums/penalties (interest expense) |
|
|
11,698 |
|
|
|
112,419 |
|
|
|
(100,721 |
) |
|
Write-off of unamortized deferred financing costs (interest expense) |
|
|
217 |
|
|
|
3,099 |
|
|
|
(2,882 |
) |
|
Write-off of unamortized (premiums)/discounts/OCI (interest expense) |
|
|
389 |
|
|
|
4,579 |
|
|
|
(4,190 |
) |
|
Debt extinguishment (gains) losses, including prepayment penalties, preferred share redemptions and non-cash convertible debt discounts |
|
|
12,304 |
|
|
|
120,097 |
|
|
|
(107,793 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (gain) on sales of land parcels |
|
|
(19,193 |
) |
|
|
(11,722 |
) |
|
|
(7,471 |
) |
|
(Gain) on sale of investment securities and other investments (interest and other income) |
|
|
— |
|
|
|
(556 |
) |
|
|
556 |
|
|
(Income) loss from investments in unconsolidated entities ─ non-operating assets |
|
|
301 |
|
|
|
301 |
|
|
|
— |
|
|
(Gains) losses on sales of non-operating assets, net of income and other tax expense (benefit) |
|
|
(18,892 |
) |
|
|
(11,977 |
) |
|
|
(6,915 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance/litigation settlement or reserve income (interest and other income) |
|
|
(380 |
) |
|
|
(53 |
) |
|
|
(327 |
) |
|
Insurance/litigation/environmental settlement or reserve expense (other expenses) |
|
|
293 |
|
|
|
(244 |
) |
|
|
537 |
|
|
Other |
|
|
96 |
|
|
|
1,694 |
|
|
|
(1,598 |
) |
|
Other miscellaneous items |
|
|
9 |
|
|
|
1,397 |
|
|
|
(1,388 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments from FFO to Normalized FFO |
|
$ |
(5,864 |
) |
|
$ |
110,965 |
|
|
$ |
(116,829 |
) |
Note: See pages 24 through 27 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.
|
1st Quarter 2017 Earnings Release |
|
22 |
The guidance/projections provided below are based on current expectations, are forward-looking and are consistent with the information provided in the fourth quarter 2016 earnings release. All guidance is given on a Normalized FFO basis. Therefore, certain items excluded from Normalized FFO, such as debt extinguishment costs/prepayment penalties and the write-off of pursuit costs, are not included in the estimates provided on this page. See pages 24 through 27 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.
2017 Normalized FFO Guidance (per share diluted)
|
|
|
Q2 2017 |
|
2017 |
|
Expected Normalized FFO Per Share |
|
$0.75 to $0.79 |
|
$3.05 to $3.15 |
2017 Same Store Assumptions (see Note below)
|
Physical occupancy |
|
|
|
|
95.7% |
|
|
Revenue change |
|
|
|
1.0% to 2.25% |
|
|
|
Expense change |
|
|
|
3.0% to 4.0% |
|
|
|
NOI change |
|
|
|
0.0% to 2.0% |
|
|
Note: Approximately 25 basis point change in NOI percentage = $0.01 per share change in EPS/FFO per share/Normalized FFO per share.
2017 Transaction Assumptions
|
Consolidated rental acquisitions |
|
|
|
$500.0 million |
|
Consolidated rental dispositions |
|
|
|
$500.0 million |
|
Spread between Acquisition Cap Rate and Disposition Yield |
|
|
|
75 basis points |
2017 Debt Assumptions
|
Weighted average debt outstanding |
|
|
|
$8.8 billion to $9.2 billion |
|
|
|
Weighted average interest rate (reduced for capitalized interest) |
|
|
|
|
4.12% |
|
|
Interest expense, net (on a Normalized FFO basis) |
|
|
|
$362.6 million to $379.0 million |
|
|
|
Capitalized interest |
|
|
|
$23.0 million to $28.0 million |
|
|
2017 Other Guidance Assumptions
|
Property management expense |
|
|
|
$83.0 million to $85.0 million |
|
General and administrative expense (see Note below) |
|
|
|
$50.0 million to $52.0 million |
|
Interest and other income |
|
|
|
$0.5 million |
|
Income and other tax expense |
|
|
|
$0.5 million to $1.5 million |
|
Debt offerings |
|
|
|
$300.0 million to $500.0 million |
|
Equity ATM share offerings |
|
|
|
No amounts budgeted |
|
Preferred share offerings |
|
|
|
No amounts budgeted |
|
Weighted average Common Shares and Units - Diluted |
|
|
|
383.2 million |
Note: Normalized FFO guidance excludes a duplicative charge of approximately $0.4 million, which will be recorded to general and administrative expense, related to the overlap of accounting costs for the Company's current and former executive compensation programs.
|
1st Quarter 2017 Earnings Release |
|
23 |
This Earnings Release and Supplemental Information includes certain non-GAAP financial measures and other terms that management believes are helpful in understanding our business. The definitions and calculations of these non-GAAP financial measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. These non-GAAP financial measures should not be considered as an alternative to net earnings or any other GAAP measurement of performance or as an alternative to cash flows from specific operating, investing or financing activities. Furthermore, these non-GAAP financial measures are not intended to be a measure of cash flow or liquidity.
Acquisition Capitalization Rate or Cap Rate – NOI that the Company anticipates receiving in the next 12 months (or the year two or three stabilized NOI for properties that are in lease-up at acquisition) less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $100-$450 per apartment unit depending on the age and condition of the asset) divided by the gross purchase price of the asset. The weighted average Acquisition Cap Rate for acquired properties is weighted based on the projected NOI streams and the relative purchase price for each respective property.
Average Rental Rate – Total residential rental revenues reflected on a straight-line basis in accordance with GAAP divided by the weighted average occupied apartment units for the reporting period presented.
Debt Covenant Compliance – Our unsecured debt includes certain financial and operating covenants including, among other things, maintenance of certain financial ratios. These provisions are contained in the indentures applicable to each notes payable or the credit agreement for our line of credit. The Debt Covenant Compliance ratios that are provided show the Company's compliance with certain covenants governing our public unsecured debt. These covenants generally reflect our most restrictive financial covenants. The Company was in compliance with its unsecured debt covenants for all years presented (the ratios should not be used for any other purpose, including without limitation, to evaluate the Company's financial condition or results of operations, nor do they indicate the Company's covenant compliance as of any other date or for any other period).
Development Yield – NOI that the Company anticipates receiving in the next 12 months following stabilization less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $50-$150 per apartment unit depending on the type of asset) divided by the Total Capital Cost of the asset. The weighted average Development Yield for development properties is weighted based on the projected NOI streams and the relative Total Capital Cost for each respective property.
Disposition Yield – NOI that the Company anticipates giving up in the next 12 months less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $100-$450 per apartment unit depending on the age and condition of the asset) divided by the gross sale price of the asset. The weighted average Disposition Yield for sold properties is weighted based on the projected NOI streams and the relative sales price for each respective property.
Earnings Per Share ("EPS") – Net income per share calculated in accordance with GAAP. Expected EPS is calculated on a basis consistent with actual EPS. Due to the uncertain timing and extent of property dispositions and the resulting gains/losses on sales, actual EPS could differ materially from expected EPS.
Economic Gain – Economic Gain is calculated as the net gain on sales of real estate properties in accordance with GAAP, excluding accumulated depreciation. The Company generally considers Economic Gain to be an appropriate supplemental measure to net gain on sales of real estate properties in accordance with GAAP because it is one indication of the gross value created by the Company's acquisition, development, rehab, management and ultimate sale of a property and because it helps investors to understand the relationship between the cash proceeds from a sale and the cash invested in the sold property. The following table presents a reconciliation of net gain on sales of real estate properties in accordance with GAAP to Economic Gain:
|
|
|
Quarter Ended March 31, 2017 |
|
|
|
|
|
|
|
|
|
Net Gain on Sales of Real Estate Properties |
|
$ |
36,707 |
|
|
Accumulated Depreciation Gain |
|
|
(12,773 |
) |
|
|
|
|
|
|
|
Economic Gain |
|
$ |
23,934 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1st Quarter 2017 Earnings Release |
|
24 |
|
Equity Residential Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms – Continued (Amounts in thousands except per share and per apartment unit data) (All per share data is diluted)
|
Funds From Operations and Normalized Funds From Operations:
Funds From Operations (“FFO”) – The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales and impairment write-downs of depreciable operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Expected FFO per share is calculated on a basis consistent with actual FFO per share and is considered an appropriate supplemental measure of expected operating performance when compared to expected EPS.
The Company believes that FFO and FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies.
Normalized Funds From Operations ("Normalized FFO") – Normalized FFO begins with FFO and excludes:
|
|
• |
the impact of any expenses relating to non-operating asset impairment and valuation allowances; |
|
|
• |
pursuit cost write-offs; |
|
|
• |
gains and losses from early debt extinguishment, including prepayment penalties, preferred share redemptions and the cost related to the implied option value of non-cash convertible debt discounts; |
|
|
• |
gains and losses on the sales of non-operating assets, including gains and losses from land parcel sales, net of the effect of income tax benefits or expenses; and |
|
|
• |
other miscellaneous items. |
Expected Normalized FFO per share is calculated on a basis consistent with actual Normalized FFO per share and is considered an appropriate supplemental measure of expected operating performance when compared to expected EPS.
The Company believes that Normalized FFO and Normalized FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the Company's operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company's actual operating results.
FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units do not represent net income, net income available to Common Shares or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units should not be exclusively considered as alternatives to net income, net income available to Common Shares or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company's calculation of FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.
FFO available to Common Shares and Units and Normalized FFO available to Common Shares and Units are calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares in accordance with GAAP. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the "Noncontrolling Interests – Operating Partnership". Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis.
|
1st Quarter 2017 Earnings Release |
|
25 |
|
Equity Residential Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms – Continued (Amounts in thousands except per share and per apartment unit data) (All per share data is diluted)
|
The following table presents reconciliations of EPS to FFO per share and Normalized FFO per share for pages 5 and 23 (the expected guidance/projections provided below are based on current expectations and are forward-looking):
|
|
|
Actual Q1 2017 Per Share |
|
|
Actual Q1 2016 Per Share |
|
|
Expected Q2 2017 Per Share |
|
|
Expected 2017 Per Share |
|
||||
|
EPS - Diluted |
|
$ |
0.39 |
|
|
$ |
9.76 |
|
|
$0.51 to $0.55 |
|
|
$1.83 to $1.93 |
|
||
|
Add: Depreciation expense |
|
|
0.47 |
|
|
|
0.45 |
|
|
0.47 |
|
|
1.92 |
|
||
|
Less: Net gain on sales |
|
|
(0.10 |
) |
|
|
(9.74 |
) |
|
(0.23) |
|
|
(0.69) |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share - Diluted |
|
|
0.76 |
|
|
|
0.47 |
|
|
0.75 to 0.79 |
|
|
3.06 to 3.16 |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairment and valuation allowances |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Write-off of pursuit costs |
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
0.01 |
|
|
|
Debt extinguishment (gains) losses, including prepayment penalties, preferred share redemptions and non-cash convertible debt discounts |
|
|
0.03 |
|
|
|
0.31 |
|
|
|
— |
|
|
0.03 |
|
|
|
(Gains) losses on sales of non-operating assets, net of income and other tax expense (benefit) |
|
|
(0.05 |
) |
|
|
(0.03 |
) |
|
|
— |
|
|
(0.05) |
|
|
|
Other miscellaneous items |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Normalized FFO per share - Diluted |
|
$ |
0.74 |
|
|
$ |
0.76 |
|
|
$0.75 to $0.79 |
|
|
$3.05 to $3.15 |
|
||
Lease-Up NOI – Represents NOI for development properties: (i) in various stages of lease-up; and (ii) where lease-up has been completed but the properties were not stabilized (defined as having achieved 90% occupancy for three consecutive months) for all of the current and comparable periods presented.
Net Operating Income (“NOI”) – NOI is the Company’s primary financial measure for evaluating each of its apartment properties. NOI is defined as rental income less direct property operating expenses (including real estate taxes and insurance). The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company's apartment properties. NOI does not include an allocation of property management expenses either in the current or comparable periods. Rental income for all leases and operating expense for ground leases (for both same store and non-same store properties) are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.
The following tables present reconciliations of operating income per the consolidated statements of operations to NOI, along with rental income, operating expenses and NOI per the consolidated statements of operations allocated between same store and non-same store results (see page 9):
|
|
|
Quarter Ended March 31, |
|
|||||
|
|
|
2017 |
|
|
2016 |
|
||
|
Operating income |
|
$ |
204,371 |
|
|
$ |
216,625 |
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Fee and asset management revenue |
|
|
(180 |
) |
|
|
(2,918 |
) |
|
Property management |
|
|
22,252 |
|
|
|
23,495 |
|
|
General and administrative |
|
|
14,173 |
|
|
|
16,717 |
|
|
Depreciation |
|
|
178,968 |
|
|
|
172,885 |
|
|
Total NOI |
|
$ |
419,584 |
|
|
$ |
426,804 |
|
|
Rental income: |
|
|
|
|
|
|
|
|
|
Same store |
|
$ |
560,236 |
|
|
$ |
545,846 |
|
|
Non-same store |
|
|
43,684 |
|
|
|
70,319 |
|
|
Total rental income |
|
|
603,920 |
|
|
|
616,165 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Same store |
|
|
167,316 |
|
|
|
161,004 |
|
|
Non-same store |
|
|
17,020 |
|
|
|
28,357 |
|
|
Total operating expenses |
|
|
184,336 |
|
|
|
189,361 |
|
|
NOI: |
|
|
|
|
|
|
|
|
|
Same store |
|
|
392,920 |
|
|
|
384,842 |
|
|
Non-same store |
|
|
26,664 |
|
|
|
41,962 |
|
|
Total NOI |
|
$ |
419,584 |
|
|
$ |
426,804 |
|
|
1st Quarter 2017 Earnings Release |
|
26 |
|
Equity Residential Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms – Continued (Amounts in thousands except per share and per apartment unit data) (All per share data is diluted)
|
Non-Same Store Properties – For annual comparisons, primarily includes all properties acquired during 2016 and 2017, plus any properties in lease-up and not stabilized as of January 1, 2016.
Normalized Earnings Before Interest, Income Taxes, Depreciation and Amortization ("EBITDA") – Represents net income in accordance with GAAP before interest expense, income taxes, depreciation expense and amortization expense and further adjusted for non-comparable items. Normalized EBITDA, total debt to Normalized EBITDA and net debt to Normalized EBITDA are important metrics in evaluating the credit strength of the Company and its ability to service its debt obligations. The Company believes that Normalized EBITDA, total debt to Normalized EBITDA and net debt to Normalized EBITDA are useful to investors, creditors and rating agencies because they allow investors to compare the Company's credit strength to prior reporting periods and to other companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company's actual credit quality.
Physical Occupancy – The weighted average occupied apartment units for the reporting period divided by the average of total apartment units available for rent for the reporting period.
Same Store Properties – For annual comparisons, primarily includes all properties acquired or completed that are stabilized prior to January 1, 2016, less properties subsequently sold. Properties are included in Same Store when they are stabilized for all of the current and comparable periods presented.
% of Stabilized NOI – Represents budgeted 2017 NOI for stabilized properties and projected annual NOI at stabilization (defined as having achieved 90% occupancy for three consecutive months) for properties that are in lease-up.
Total Capital Cost – Estimated cost for projects under development and/or developed and all capitalized costs incurred to date plus any estimates of costs remaining to be funded for all projects, including land acquisition costs, construction costs, capitalized real estate taxes and insurance, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees, all in accordance with GAAP.
Total Market Capitalization – The aggregate of the market value of the Company’s outstanding common shares, including restricted shares, the market value of the Company’s operating partnership units outstanding, including restricted units (based on the market value of the Company’s common shares) and the outstanding principal balance of debt. The Company believes this is a useful measure of a real estate operating company’s long-term liquidity and balance sheet strength, because it shows an approximate relationship between a company’s total debt and the current total market value of its assets based on the current price at which the Company’s common shares trade. However, because this measure of leverage changes with fluctuations in the Company’s share price, which occur regularly, this measure may change even when the Company’s earnings, interest and debt levels remain stable.
Turnover – Total residential move-outs divided by total residential apartment units, including inter-property and intra-property transfers.
Unencumbered NOI % – Represents NOI generated by consolidated real estate assets unencumbered by outstanding secured debt as a percentage of total NOI generated by all of the Company's consolidated real estate assets.
Unlevered Internal Rate of Return (“IRR”) – The Unlevered IRR on sold properties is the compound annual rate of return calculated by the Company based on the timing and amount of: (i) the gross purchase price of the property plus any direct acquisition costs incurred by the Company; (ii) total revenues earned during the Company’s ownership period; (iii) total direct property operating expenses (including real estate taxes and insurance) incurred during the Company’s ownership period; (iv) capital expenditures incurred during the Company’s ownership period; and (v) the gross sales price of the property net of selling costs. Each of the items (i) through (v) is calculated in accordance with GAAP.
The calculation of the Unlevered IRR does not include an adjustment for the Company’s general and administrative expense, interest expense (including loan assumption costs and other loan-related costs) or property management expense. Therefore, the Unlevered IRR is not a substitute for net income as a measure of our performance. Management believes that the Unlevered IRR achieved during the period a property is owned by the Company is useful because it is one indication of the gross value created by the Company’s acquisition, development, rehab, management and ultimate sale of a property, before the impact of Company overhead. The Unlevered IRR achieved on the properties as cited in this release should not be viewed as an indication of the gross value created with respect to other properties owned by the Company, and the Company does not represent that it will achieve similar Unlevered IRRs upon the disposition of other properties. The weighted average Unlevered IRR for sold properties is weighted based on all cash flows over the investment period for each respective property, including net sales proceeds.
|
1st Quarter 2017 Earnings Release |
|
27 |