10-QPeriod: Q1 FY2008

EQUITY RESIDENTIAL Quarterly Report for Q1 Ended Mar 31, 2008

Filed May 8, 2008For Securities:EQR

Summary

Equity Residential (EQR) reported its first quarter 2008 results, demonstrating a solid operational performance despite a challenging economic environment. Total revenues increased to $522.8 million, up from $475.8 million in the prior year, driven primarily by a 7.8% increase in rental income, reflecting higher rental rates across its portfolio. Net income available to common shareholders was $136.8 million, or $0.51 per diluted share, a notable increase from $118.8 million, or $0.40 per diluted share, in Q1 2007. The company also recognized a significant gain from discontinued operations. EQR maintained a strong balance sheet with total assets of $16.0 billion and managed its debt effectively, with a weighted average interest rate of 5.45% on its total debt of $9.9 billion. Key operational metrics, such as same-store Net Operating Income (NOI), saw a healthy increase of 4.7%, indicating effective property management and favorable market rental trends. The company also continued its strategic property dispositions and acquisitions, focusing on high-quality apartment properties in top growth markets.

Key Highlights

  • 1Total revenues increased by 10.0% year-over-year to $522.8 million, primarily driven by a 7.8% increase in rental income.
  • 2Net income available to common shareholders rose to $136.8 million ($0.51 per diluted share) from $118.8 million ($0.40 per diluted share) in the prior year's quarter.
  • 3Same-store Net Operating Income (NOI) increased by 4.7% to $305.9 million, signaling strong operational performance of existing properties.
  • 4The company reported a substantial gain of $122.5 million from discontinued operations.
  • 5Total assets stood at $16.0 billion, with investment in real estate, net, at $15.1 billion.
  • 6Total debt was $9.9 billion, with a weighted average interest rate of 5.45%. The company maintained access to liquidity with $1.4 billion available under its revolving credit facility.
  • 7EQR actively managed its portfolio, acquiring $41.9 million in properties and disposing of $271.6 million in properties during the quarter.

Frequently Asked Questions

In the first quarter of 2008, Equity Residential reported increased revenues of $522.8 million, up from $475.8 million in Q1 2007. Net income available to common shareholders was $136.8 million, or $0.51 per diluted share, an improvement from $118.8 million, or $0.40 per diluted share, in the prior year. The company also benefited from a significant gain on discontinued operations.

The company's same-store rental properties showed strong performance, with Net Operating Income (NOI) increasing by 4.7% to $305.9 million. This was driven by a 3.5% increase in rental revenues, primarily due to higher rental rates, and a 1.6% increase in operating expenses. The average occupancy rate remained high at 94.4%.

As of March 31, 2008, Equity Residential had total debt of approximately $9.9 billion. The company maintained a strong liquidity position with $502.6 million in cash and cash equivalents and $1.4 billion available under its revolving credit facility. The weighted average interest rate on its debt was 5.45%.

Yes, the company was active in portfolio management. During the quarter, Equity Residential acquired properties valued at $41.9 million and disposed of properties totaling $271.6 million. This aligns with their strategy of acquiring, developing, and managing high-quality apartment properties.