Summary
Equity Residential (EQR) reported a significant increase in income from continuing operations for the six months and quarter ended June 30, 2012, compared to the prior year. This growth was primarily driven by robust performance in same-store properties, characterized by rising average rental rates and improved occupancy, which offset increased operating expenses, particularly real estate taxes and payroll. The company is strategically repositioning its portfolio, divesting non-core assets while acquiring and developing properties in high-barrier-to-entry "core" markets. Despite a substantial increase in acquisitions during the first half of 2012, the company also maintained a balanced disposition strategy, aiming for an equal volume of acquisitions and dispositions by year-end. The report highlights strong leasing season demand, positive demographic trends, and a continued aversion to homeownership as key drivers supporting rental housing demand.
Financial Highlights
35 data points| Revenue | $448.35M |
| Operating Expenses | $319.79M |
| Operating Income | $121.75M |
| Interest Expense | $114.63M |
| Net Income | $103.26M |
| EPS (Basic) | $0.33 |
| EPS (Diluted) | $0.33 |
| Shares Outstanding (Basic) | 300.19M |
| Shares Outstanding (Diluted) | 300.19M |
Key Highlights
- 1Same-store revenue growth was strong, increasing 5.5% year-over-year for both the six-month and quarterly periods, driven by a 5.6% increase in average rental rates.
- 2Occupancy rates remained high, reaching 96.0% on a same-store basis in July 2012, supporting rent growth.
- 3The company is actively executing its portfolio repositioning strategy, acquiring $670 million in properties and selling $336.3 million in the first half of 2012, with plans for $1.25 billion in both acquisitions and dispositions for the full year.
- 4Operating expenses for same-store properties increased by 1.9% (six months) and 2.0% (quarter), primarily due to higher real estate taxes and on-site payroll, though partially offset by lower utility costs.
- 5Diluted earnings per share for the six months ended June 30, 2012, were $0.80, a decrease from $2.30 in the prior year, mainly due to lower gains from property sales in the current period.
- 6The company has access to significant liquidity, with $1.68 billion available on its revolving credit facility as of June 30, 2012, and expects sufficient liquidity to meet funding obligations through the year.
- 7Equity Residential is strategically investing in "core" markets characterized by high barriers to entry, strong economic growth, and favorable demographics, while divesting properties in less desirable markets.