10-QPeriod: Q3 FY2023

EQUITY RESIDENTIAL Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 2, 2023For Securities:EQR

Summary

Equity Residential (EQR) reported solid operational performance for the nine months ended September 30, 2023, with total Net Operating Income (NOI) increasing by 5.5% to $1.44 billion, primarily driven by a 6.6% rise in same-store NOI. This growth was fueled by a 6.2% increase in same-store rental income, attributed to strong demand and limited new supply, though partially offset by a $1.5 million write-off related to the Rite Aid bankruptcy. The company also saw a modest increase in same-store operating expenses, largely due to repairs, maintenance, and higher payroll-related costs. Financially, EQR maintained strong liquidity with approximately $2.0 billion available on its revolving credit facility. Cash flow from operations increased by $68.3 million year-over-year, reflecting the improved NOI. The company actively managed its portfolio through strategic acquisitions and dispositions, adding two properties in Atlanta and Denver and selling eight properties in Los Angeles and Seattle. EQR also continued its development activities, stabilizing two properties during the period.

Financial Highlights

32 data points
Beta

Net Income

$172.51M

EPS (Diluted)

$0.45

Total Assets

$20.11B

Cash & Equivalents

$39.25M

Free Cash Flow

$442.54M

Financial Statements
Beta
Operating Expenses$498.94M
Operating Income$252.03M
Interest Expense$68.89M
Net Income$172.51M
EPS (Basic)$0.45
EPS (Diluted)$0.45
Shares Outstanding (Basic)378.85M
Shares Outstanding (Diluted)391.35M

Key Highlights

  • 1Total Net Operating Income (NOI) grew by 5.5% to $1.44 billion for the nine months ended September 30, 2023.
  • 2Same-store NOI increased by a robust 6.6%, driven by a 6.2% rise in same-store rental income.
  • 3Strong demand and limited new supply supported rental income growth, though a Rite Aid bankruptcy impacted receivables.
  • 4The company maintained significant liquidity, with approximately $2.0 billion available on its unsecured revolving credit facility as of September 30, 2023.
  • 5EQR strategically adjusted its portfolio, acquiring two properties and disposing of eight during the nine-month period.
  • 6Cash flow from operating activities increased by $68.3 million compared to the prior year, reflecting improved operational performance.
  • 7Dividends/distributions increased by 6.0% year-over-year, with a quarterly dividend of $0.6625 per share/unit.

Frequently Asked Questions

The primary driver of EQR's revenue growth was the increase in same-store rental income, which rose by 6.2%. This was supported by healthy demand for apartments and limited new supply in its key markets, though partially offset by a non-cash write-off of straight-line receivables due to the Rite Aid bankruptcy.

EQR strategically managed its portfolio by acquiring two consolidated rental properties in Atlanta and Denver, and disposing of eight consolidated rental properties located in Los Angeles and Seattle. The company also continued its development activities, stabilizing two properties.

EQR maintained a strong liquidity position with approximately $2.0 billion in available borrowing capacity on its unsecured revolving credit facility as of September 30, 2023. The company also reported $39.3 million in cash and cash equivalents and $87.5 million in restricted deposits.

Same-store operating expenses increased by 5.3% for the nine months ended September 30, 2023, compared to the prior year. Key drivers included a $9.8 million increase in repairs and maintenance, a $5.9 million increase in real estate taxes, and a $7.3 million increase in on-site payroll due to higher staffing utilization and employee benefit costs.