Summary
Equity Residential (EQR) reported its second quarter and first half 2011 financial results, highlighting significant activity in property dispositions and acquisitions. The company continued its strategic focus on core markets, selling non-core assets to fund acquisitions in high-growth areas. Despite a strong operational performance indicated by increased same-store revenues and Net Operating Income (NOI), the accelerated pace and volume of asset sales, coupled with reinvestment in assets with lower initial yields, created a dilutive effect on per-share results. EQR also successfully refinanced its credit facilities and maintained a substantial cash position, ensuring liquidity for near-term obligations and strategic investments.
Financial Highlights
34 data pointsBeta
Financial Statements
Beta
| Revenue | $480.37M |
| Operating Expenses | $340.51M |
| Operating Income | $134.13M |
| Interest Expense | $120.00M |
| Net Income | $555.92M |
| EPS (Basic) | $1.88 |
| EPS (Diluted) | $1.85 |
| Shares Outstanding (Basic) | 294.66M |
| Shares Outstanding (Diluted) | 312.20M |
Key Highlights
- 1Significant increase in Net Operating Income (NOI) of 7.4% for same-store properties year-over-year for the six months ended June 30, 2011, driven by higher rental rates and occupancy.
- 2Diluted Earnings Per Share (EPS) significantly increased to $2.27 for the six months ended June 30, 2011, from $0.21 in the prior year, primarily due to substantial gains from property sales.
- 3Active disposition strategy continued, with $1.2 billion in property sales during the first half of 2011, primarily from non-core markets, alongside $549.3 million in acquisitions of apartment properties in strategic markets.
- 4The company maintained a strong liquidity position with $604.8 million in cash and cash equivalents as of June 30, 2011, and a newly secured $1.25 billion revolving credit facility.
- 5Despite operational strength, transaction activity (accelerated dispositions and reinvestment in lower-cap-rate assets) resulted in per-share dilution, impacting Normalized Funds From Operations (FFO).
- 6Company successfully executed its ATM share offering program, raising $154.5 million in the first half of 2011.
- 7Consolidated debt-to-total market capitalization remained significant at 33.5% as of June 30, 2011, with a weighted average interest rate of 5.00% on total debt.
Frequently Asked Questions
Equity Residential reported a significant increase in diluted EPS to $2.27 for the first six months of 2011, up from $0.21 in the same period of 2010. This was largely driven by substantial gains from property sales. Same-store revenues increased by 4.5% and Net Operating Income (NOI) grew by 7.4% year-over-year, indicating strong underlying operational performance. However, the company noted that accelerated dispositions and reinvestment in lower-yielding assets created dilution to per-share results.
EQR continued its strategic asset rotation, selling $1.2 billion in non-core assets and acquiring $549.3 million in core market properties during the first half of 2011. While these dispositions generated significant gains and freed up capital, the accelerated pace and the reinvestment of proceeds into assets with lower initial yields diluted per-share performance, as noted by management. The company aims to balance these strategic moves to maximize long-term total returns.
Equity Residential maintained a strong liquidity position with $604.8 million in cash and cash equivalents as of June 30, 2011. The company also secured a new $1.25 billion unsecured revolving credit facility, enhancing its financial flexibility. The company expects its operating cash flow, existing cash, and credit facility availability to be sufficient to meet near-term obligations, including debt maturities, capital expenditures, and distributions.
As of June 30, 2011, the company had total debt of $9.45 billion, with a debt-to-market capitalization ratio of 33.5%. The weighted average interest rate on total debt was 5.00%. The company actively manages its debt maturity profile and has access to both secured and unsecured debt markets, as well as equity issuance through its ATM program, to fund its long-term capital requirements.