10-QPeriod: Q2 FY2002

EQUITY RESIDENTIAL Quarterly Report for Q2 Ended Jun 30, 2002

Filed August 13, 2002For Securities:EQR

Summary

Equity Residential (EQR) reported its financial results for the quarterly period ended June 30, 2002. The company's total assets decreased slightly to $12.11 billion from $12.24 billion at the end of 2001, while total liabilities also saw a reduction to $6.09 billion from $6.19 billion. Shareholders' equity remained relatively stable at $5.40 billion. For the six months ended June 30, 2002, total revenues were $1.025 billion, a slight decrease from $1.039 billion in the prior year period. Net income for the same period was $214.175 million, down from $238.211 million in the first half of 2001. Earnings per share (diluted) were $0.60 for the six months, compared to $0.67 in the prior year. Operationally, the company continues to be active in property acquisitions and dispositions. During the first half of 2002, EQR acquired seven properties for $166.5 million and disposed of twenty-three properties. The company also manages a significant portfolio of 1,065 multifamily properties with 227,963 apartment units across 36 states. Liquidity appears stable, with $88.9 million in cash and cash equivalents and a $700 million revolving credit facility in place.

Key Highlights

  • 1Total assets stood at $12.11 billion, with total liabilities at $6.09 billion as of June 30, 2002.
  • 2For the six months ended June 30, 2002, total revenues were $1.025 billion, a slight decrease compared to $1.039 billion in the same period of 2001.
  • 3Net income for the six months ended June 30, 2002, was $214.175 million, a decrease from $238.211 million in the prior year.
  • 4Diluted earnings per share for the six months ended June 30, 2002, were $0.60, down from $0.67 in the corresponding period of 2001.
  • 5The company acquired seven multifamily properties for $166.5 million and disposed of twenty-three properties during the first half of 2002.
  • 6As of June 30, 2002, Equity Residential owned or had interests in a portfolio of 1,065 multifamily properties with 227,963 apartment units.
  • 7The company maintained a revolving credit facility of $700 million, with $88.9 million in cash and cash equivalents at quarter-end.

Frequently Asked Questions

Equity Residential maintains a substantial real estate portfolio with total assets of $12.11 billion. While revenues and net income saw a slight decrease in the first six months of 2002 compared to 2001, the company has active acquisition and disposition strategies, a healthy credit facility, and manages its debt effectively, indicated by a debt-to-market capitalization ratio of 36.62%, which is below its target of 50%. Overall, the company appears financially stable, with ongoing efforts to optimize its property portfolio.

Equity Residential actively managed its portfolio during the first half of 2002. The company acquired seven new multifamily properties totaling 1,983 units for $166.5 million. Concurrently, it disposed of twenty-three properties comprising 3,654 units for $197.2 million. The total portfolio size as of June 30, 2002, consisted of 1,065 properties with 227,963 units.

Equity Residential utilizes a combination of debt and equity to finance its operations and growth. As of June 30, 2002, the company had total debt of $5.65 billion. It maintained a strong liquidity position with $88.9 million in cash and cash equivalents and a $700 million revolving credit facility. The company also strategically manages its debt maturities, with the majority of its debt maturing after 2005. The debt-to-total market capitalization ratio of 36.62% indicates a manageable debt load relative to its market value.

The filing notes potential risks related to economic and market conditions impacting occupancy and rents, and the cost of capital. Contingencies include routine litigation, environmental law compliance, and specific obligations related to development agreements where the company may have obligations to fund additional financing or purchase partner interests. The company states it does not believe current litigation will materially affect its financial statements.