10-QPeriod: Q2 FY2009

EQUITY RESIDENTIAL Quarterly Report for Q2 Ended Jun 30, 2009

Filed August 6, 2009For Securities:EQR

Summary

Equity Residential (EQR) reported its financial results for the quarter ended June 30, 2009, a period marked by the ongoing economic downturn. The company experienced a decline in earnings per share to $0.35 from $0.46 in the same quarter of the prior year. This decline was primarily driven by lower rental income due to decreased occupancy and rental rates, as well as increased operating expenses, particularly in real estate taxes and maintenance. Despite these challenges, EQR demonstrated resilience through disciplined cost management and strategic asset disposition. The company maintained a relatively high occupancy rate of approximately 93% as of June 30, 2009. EQR also continued its strategy of selling non-core assets, generating proceeds that were used to reduce debt and fund operations. The company's liquidity remains a focus, with significant cash on hand and available credit facilities to manage upcoming obligations.

Financial Highlights

35 data points
Beta

Revenue

$480.33M

Net Income

$100.20M

20.9% Net Margin

EPS (Diluted)

$0.35

Total Assets

$15.92B

Cash & Equivalents

$667.50M

Free Cash Flow

$223.16M

Financial Statements
Beta
Revenue$480.33M
Operating Expenses$353.39M
Operating Income$120.66M
Interest Expense$115.67M
Net Income$100.20M
EPS (Basic)$0.35
EPS (Diluted)$0.35
Shares Outstanding (Basic)272.90M
Shares Outstanding (Diluted)289.34M

Key Highlights

  • 1Diluted Earnings Per Share (EPS) decreased to $0.35 for the quarter ended June 30, 2009, down from $0.46 in the prior year's quarter.
  • 2Total revenues for the quarter were $505.15 million, a slight decrease from $513.28 million in the same period last year.
  • 3Net income attributable to common shareholders decreased to $96.59 million ($0.35 per share) from $126.63 million ($0.46 per share) year-over-year.
  • 4The company's same-store rental income saw a decline, attributed to lower occupancy and average rental rates, compounded by an increase in move-in concessions.
  • 5Operating expenses increased due to higher real estate taxes and maintenance costs, though overall expense growth was managed to 1.1% year-to-date.
  • 6EQR continued to dispose of non-core assets, selling 25 properties for approximately $378.8 million and recognizing a significant net gain.
  • 7The company maintained a strong liquidity position with approximately $667.5 million in cash and cash equivalents and $1.35 billion available under its revolving credit facility as of June 30, 2009.

Frequently Asked Questions

Equity Residential reported a decrease in diluted earnings per share to $0.35 from $0.46 in the prior year's quarter. Net income attributable to common shareholders also declined, reflecting challenges from the prevailing economic conditions, including lower rental income and increased operating expenses. However, the company maintained a high occupancy rate and continued strategic asset dispositions.

The economic slowdown has led to a decline in rental income due to lower occupancy and rental rates, as well as an increase in concessions. Operating expenses have risen, particularly in real estate taxes and maintenance, although the company has implemented cost control measures to moderate overall expense growth.

EQR is focused on selling non-core assets to generate proceeds for debt reduction and operational funding. The company is also actively managing expenses and maintaining a strong liquidity position through cash reserves and available credit facilities to meet its financial obligations. Despite the challenging market, EQR aims to leverage its diverse portfolio and market presence for long-term stability and potential opportunistic acquisitions.

The company has been actively managing its debt, including pre-funding maturing obligations and repurchasing notes. As of June 30, 2009, EQR had approximately $5.0 billion in mortgage notes payable and $4.9 billion in unsecured notes. The company's debt maturity schedule shows a mix of fixed and floating rate debt, with a weighted average interest rate of 5.11% and maturities spread out over several years. EQR believes it has sufficient liquidity to meet near-term obligations.