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Equity Residential (EQR) SEC Filing 8-K Material Event for the period ending Tuesday, February 1, 2022

Equity Residential

CIK: 906107 Ticker: EQR

 

 

 

 


 

 

Fourth Quarter 2021 Results

Table of Contents

 

 

 

Corporate Headquarters:
Two North Riverside Plaza
Chicago, IL 60606
(312) 474-1300

Information included in this supplemental package is unaudited.

 

 

 


Table of Contents

 

 

 

 

NEWS RELEASE - FOR IMMEDIATE RELEASE

 

February 1, 2022

 

Equity Residential Reports Full Year 2021 Results and Provides Full Year 2022 Guidance

2022 Guidance Reflects Acceleration in Growth

 

Chicago, IL – February 1, 2022 - Equity Residential (NYSE: EQR) today reported results for the quarter and year ended December 31, 2021. All per share results are reported as available to common shares/units on a diluted basis. For the fourth quarter of 2021, the Company reported earnings per share (EPS), Funds from Operations (FFO) per share and Normalized FFO per share of $1.40, $0.76 and $0.82, respectively. For the full year of 2021, the Company reported EPS, FFO per share and Normalized FFO per share of $3.54, $2.96 and $2.99, respectively.

 

“Robust demand in the fourth quarter drove high occupancy and the lowest resident Turnover in our history, allowing us to continue to increase rents. We expect operations and cash flows in 2022 to accelerate further as we write new leases at significantly higher current market rent levels and benefit from continuing deep demand. Our target affluent renter demographic remains drawn to the attractive lifestyle that our high quality urban and suburban properties and dedicated property teams provide,” said Mark J. Parrell, Equity Residential’s President and CEO. “Our capital allocation plan remains solidly on track as we actively buy and build in our expansion markets and the more desirable suburbs of our established markets where increasing numbers of affluent renters wish to live, work and play.”

 

Recent Highlights

 

Healthy demand (and in the case of EPS, higher property sale gains) drove a 105.9% increase in EPS, 4.1% increase in FFO per share and 7.9% increase in Normalized FFO per share during the fourth quarter of 2021 compared to the same period of 2020.

 

The Company reported a 4.9% increase in same store revenue for the fourth quarter of 2021 compared to the same period of 2020, driven by strong Physical Occupancy, a substantial improvement in pricing power and an increase in Non-Residential revenues.

 

The Company reported a 3.0% increase in same store expenses for the full year of 2021, reflecting the Company’s continued success in managing controllable expenses and modest growth in real estate taxes.

 

The Company reported same store Turnover of 9.4% for the fourth quarter of 2021 and 44.4% for the full year of 2021, both the lowest in the Company’s history, demonstrating the depth of demand from its residents.

 

The Company provided full year 2022 operating guidance that anticipates a 19.5%, 15.2%, and 15.4% increase in EPS, FFO per share and Normalized FFO per share, respectively, driven by expected total same store revenue growth of 9.0% at the midpoint (and in the case of EPS, higher expected property sale gains).

 

The Company continued to successfully execute on its capital allocation strategy during the fourth quarter of 2021 with the acquisition of six operating properties in its expansion markets for an aggregate purchase price of approximately $689.0 million and the disposition of four operating properties in its California and Washington, D.C. markets for an aggregate sale price of approximately $695.0 million. During the full year of 2021, the Company acquired 17 operating properties for an aggregate purchase price of approximately $1.7 billion and sold 14 operating properties for an aggregate sale price of approximately $1.7 billion. 

 

The Company was named the Gold Nareit 2021 Diversity, Equity and Inclusion award recipient in recognition of the Company’s demonstration of a strong commitment to the advancement of diversity and inclusion both within the Company and in the REIT and publicly traded real estate industry.

 

Fourth Quarter and Full Year 2021 Results

The change in EPS for both the quarter and year ended December 31, 2021 compared to the same periods of 2020 is due primarily to higher property sale gains in the fourth quarter and year ended December 31, 2021, the various adjustment items listed on page 26 of this release and the items described below.

The per share change in FFO for both the quarter and year ended December 31, 2021 compared to the same periods of 2020 is due primarily to the various adjustment items listed on page 26 of this release and the items described below.

The per share change in Normalized FFO is due primarily to:

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Positive/(Negative) Impact

 

 

 

Fourth Quarter 2021 vs.

Fourth Quarter 2020

 

 

Full Year 2021 vs.

Full Year 2020

 

Residential same store Net Operating Income (NOI)

 

$

0.05

 

 

$

(0.33

)

Non-Residential same store NOI

 

 

0.01

 

 

 

0.06

 

2021 and 2020 transaction activity impact on NOI, net

 

 

 

(0.08

)

Interest expense, net

 

 

0.02

 

 

 

0.14

 

Corporate overhead (1)

 

 

(0.01

)

 

 

(0.03

)

Other items

 

 

(0.01

)

 

 

(0.03

)

Net

 

$

0.06

 

 

$

(0.27

)

 

(1)

Corporate overhead includes property management and general and administrative expenses.

 

The Company has a glossary of defined terms and related reconciliations of Non-GAAP financial measures on pages 28 through 33 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 7, 30 and 31 of this release.

 

Fourth Quarter and Full Year 2021 Same Store Residential Results

The Company has provided a breakout of Residential and Non-Residential same store results on page 11 of this release with definitions that can be found on page 32 of this release.  Non-Residential operations account for approximately 3.9% of total revenues for the year ended December 31, 2021.  The table below reflects same store Residential only results.

 

 

 

Fourth Quarter 2021 vs.

Fourth Quarter 2020

 

 

Fourth Quarter 2021 vs.

Third Quarter 2021

 

 

Full Year 2021 vs.

Full Year 2020

 

Apartment Units

 

74,298

 

 

75,206

 

 

74,077

 

Physical Occupancy

 

96.6% vs. 94.2%

 

 

96.6% vs. 96.6%

 

 

96.1% vs. 95.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

4.3%

 

 

3.0%

 

 

(4.6%)

 

Expenses

 

1.8%

 

 

(3.0%)

 

 

2.8%

 

NOI

 

5.6%

 

 

6.1%

 

 

(8.1%)

 

 

The following table reflects the detail of the change in Same Store Residential Revenues, which is presented on a GAAP basis showing Leasing Concessions on a straight-line basis.  See page 12 for detail and reconciliations of Same Store Residential Revenues on a GAAP basis to Same Store Residential Revenues with Leasing Concessions on a cash basis.

 

 

 

Fourth Quarter 2021 vs.

Fourth Quarter 2020

 

 

Fourth Quarter 2021 vs.

Third Quarter 2021

 

 

Full Year 2021 vs.

Full Year 2020

 

 

 

% Change

 

 

% Change

 

 

% Change

 

Same Store Residential Revenues-

  comparable period

 

 

 

 

 

 

 

 

 

 

 

Lease rates (1)

 

 

(0.2

%)

 

 

2.0

%

 

 

(5.0

%)

Leasing Concessions

 

 

0.2

%

 

 

0.7

%

 

 

(1.1

%)

Vacancy gain (loss)

 

 

2.5

%

 

 

0.0

%

 

 

1.3

%

Bad Debt, Net (2)

 

 

1.9

%

 

 

0.4

%

 

 

0.4

%

Other (3)

 

 

(0.1

%)

 

 

(0.1

%)

 

 

(0.2

%)

Same Store Residential Revenues-

  current period

 

4.3

%

 

 

3.0

%

 

 

(4.6

%)

 

(1)

The decline in lease rates for the full year 2021 vs. full year 2020 is driven by the cumulative impact of leasing activity over the past twelve months despite meaningful recent improvements.

(2)

Change in rental income due to bad debt write-offs and reserves, net of amounts (including governmental rental assistance payments) collected on previously written-off or reserved accounts.

(3)

Includes ancillary income, utility recoveries, early lease termination income, miscellaneous income and other items.


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Residential Same Store Operating Statistics

The following table includes select operating metrics for Residential Same Store Properties:

 

 

 

Q3 2021

 

 

Q4 2021

 

 

January 2022 (1)

 

Physical Occupancy (2)

 

96.7%

 

 

96.4%

 

 

96.6%

 

Percentage of Residents Renewing by quarter/month

57.4%

 

 

61.2%

 

 

61.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Lease Change

 

10.1%

 

 

10.6%

 

 

13.4%

 

Renewal Rate Achieved

 

5.7%

 

 

10.7%

 

 

12.3%

 

Blended Rate

 

7.6%

 

 

10.7%

 

 

12.7%

 

 

(1)

January 2022 results are preliminary.

(2)

Physical Occupancy is as of month-end September for Q3 2021, month-end December for Q4 2021 and as of January 27th for January 2022.

 

Investment Activity and Portfolio Strategy

The Company continues to optimize its portfolio by allocating capital to desirable suburban locations within its established markets and through expansion into certain new markets that attract a renter demographic that values our exceptional product offering.  In support of this strategy, the Company acquired six properties, consisting of 1,826 apartment units, during the fourth quarter of 2021 for an aggregate purchase price of approximately $689.0 million and a weighted average Acquisition Cap Rate of 3.7%. These properties are located in Austin, TX, Dallas/Ft. Worth, TX (2), Atlanta, GA, and Denver, CO (2).  For the full year of 2021, the Company acquired 17 properties, consisting of 4,747 apartment units, for an aggregate purchase price of approximately $1.7 billion and a weighted average Acquisition Cap Rate of 3.8%.  The average age of the properties acquired in 2021 was two years. Approximately $1.4 billion, or 82.0% of all acquisition activity in 2021, was in expansion markets.

 

The Company funded these acquisitions by selling older assets located within established markets that no longer met our long-term investment criteria. During the fourth quarter of 2021, the Company sold four properties consisting of 1,211 apartment units, for an aggregate sale price of approximately $695.0 million and a weighted average Disposition Yield of 3.6%, generating an Unlevered IRR of 12.1%. Two of the properties are located in suburban San Francisco, CA, one in suburban Los Angeles, CA and one in suburban Washington, D.C. During the full year of 2021, the Company sold 14 properties, consisting of 3,053 apartment units, for an aggregate sale price of approximately $1.7 billion and a weighted average Disposition Yield of 3.7%, generating an Unlevered IRR of 10.4%. The average age of the properties sold in 2021 was approximately 30 years.

 

Finally, the Company remains active in development, both directly and through its joint venture partners. During the fourth quarter of 2021, the Company completed the construction of Alcott, a 470-unit wholly owned apartment property in the urban center of Boston, MA for a total development cost of approximately $409.7 million and an expected stabilized Development Yield of 5.6%. Also during the fourth quarter, the Company entered into four unconsolidated joint ventures for the purpose of developing vacant land parcels into approximately 1,275 apartment units in Texas and Colorado.  Three of the projects are related to the Company’s joint venture development program with Toll Brothers, Inc. During the full year of 2021, the Company completed three development projects, consisting of 824 apartment units, for a total cost of approximately $602.8 million and started four development projects, consisting of 1,241 apartment units, for a total anticipated cost of approximately $452.7 million.

 

First Quarter 2022 Guidance

The Company has established guidance ranges for the first quarter of 2022 EPS, FFO per share and Normalized FFO per share as listed below:

 

 

Q1 2022

Guidance

EPS

 

$0.85 to $0.89

FFO per share

 

$0.75 to $0.79

Normalized FFO per share

 

$0.76 to $0.80

The difference between the fourth quarter 2021 actual EPS of $1.40 and the first quarter of 2022 EPS guidance midpoint of $0.87 is due primarily to lower expected property sale gains and the items described below.

The difference between the fourth quarter 2021 actual FFO of $0.76 per share and the first quarter of 2022 FFO guidance midpoint of $0.77 per share is due primarily to no impairment charges and the items described below. 

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The difference between the fourth quarter 2021 actual Normalized FFO of $0.82 per share and the first quarter of 2022 Normalized FFO guidance midpoint of $0.78 per share is due primarily to:

 

 

Positive/(Negative)

Impact

 

 

 

 

First Quarter 2022 vs. Fourth Quarter 2021

 

 

Interest expense, net

 

$

(0.01

)

 

Corporate overhead

 

 

(0.03

)

 

Net

 

$

(0.04

)

 

 

Full Year 2022 Guidance

The Company has provided guidance for its full year 2022 same store operating performance as well as EPS, FFO per share and Normalized FFO per share as listed below:

 

Same Store (includes Residential and Non-Residential):

 

Physical Occupancy

 

96.5%

 

Revenue change

 

8.0% to 10.0%

 

Expense change

 

2.5% to 3.5%

 

NOI change

 

11.0% to 13.0%

 

 

 

 

 

 

EPS

 

$4.18 to $4.28

 

FFO per share

 

$3.36 to $3.46

 

Normalized FFO per share

 

$3.40 to $3.50

 

 

The difference between the Company’s full year 2021 actual EPS of $3.54 and the full year 2022 EPS guidance midpoint of $4.23 is due primarily to higher expected property sale gains, higher expected depreciation expense, lower expected non-operating asset gains and the items described below.

 

The difference between the Company’s full year 2021 actual FFO of $2.96 per share and the full year 2022 FFO guidance midpoint of $3.41 per share is due primarily to lower expected non-operating asset gains and the items described below.

 

The difference between the Company’s full year 2021 actual Normalized FFO of $2.99 per share and the full year 2022 Normalized FFO guidance midpoint of $3.45 per share is due primarily to:

 

 

 

Positive/(Negative)

Impact

 

 

 

Full Year 2022 vs Full Year 2021

 

Same Store NOI

 

$

0.48

 

Lease-Up NOI

 

 

0.06

 

Interest expense, net

 

 

(0.04

)

Corporate overhead

 

 

(0.04

)

Net

 

$

0.46

 

 

Key assumptions underlying the full year 2022 guidance are outlined on page 27 of this release.

 

About Equity Residential

Equity Residential is committed to creating communities where people thrive.  The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract high quality long-term renters.  Equity Residential owns or has investments in 310 properties consisting of 80,407 apartment units, with an established presence in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin.  For more information on Equity Residential, please visit our website at www.equityapartments.com.

 

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements and information within the meaning of the federal securities laws.  These statements are based on current expectations, estimates, projections and assumptions made by management.  While Equity Residential’s management believes the assumptions underlying its

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forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, including, without limitation, changes in general market conditions, including the rate of job growth and cost of labor and construction material, the level of new multifamily construction and development, competition and government regulation.  In addition, these forward-looking statements are subject to risks related to the COVID-19 pandemic, many of which are unknown, including the duration and severity of the pandemic, the extent of the adverse health impact on the general population and on our residents, customers and employees in particular, its impact on the employment rate and the economy and the corresponding impact on our residents’ and tenants’ ability to pay their rent on time or at all, the extent and impact of governmental responses, the rollout and effectiveness of vaccines and the impact of operational changes we have implemented and may implement in response to the pandemic. Other risks and uncertainties are described under the heading “Risk Factors” in our Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityapartments.com. Many of these uncertainties and risks are difficult to predict and beyond management’s control.  Forward-looking statements are not guarantees of future performance, results or events.  Equity Residential assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

 

A live web cast of the Company’s conference call discussing these results will take place tomorrow, Wednesday, February 2, 2022 at 10:00 a.m. CT.  Please visit the Investor section of the Company’s website at www.equityapartments.com for the webcast link.

 

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Equity Residential

Consolidated Statements of Operations

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

Year Ended December 31,

 

 

Quarter Ended December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental income

 

$

2,463,997

 

 

$

2,571,705

 

 

$

645,130

 

 

$

613,435

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property and maintenance

 

 

453,532

 

 

 

440,998

 

 

 

112,271

 

 

 

107,665

 

Real estate taxes and insurance

 

 

397,105

 

 

 

381,562

 

 

 

99,325

 

 

 

93,519

 

Property management

 

 

98,155

 

 

 

93,825

 

 

 

23,798

 

 

 

22,312

 

General and administrative

 

 

56,506

 

 

 

48,305

 

 

 

13,404

 

 

 

11,093

 

Depreciation

 

 

838,272

 

 

 

820,832

 

 

 

222,240

 

 

 

201,829

 

Total expenses

 

 

1,843,570

 

 

 

1,785,522

 

 

 

471,038

 

 

 

436,418

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain (loss) on sales of real estate properties

 

 

1,072,183

 

 

 

531,807

 

 

 

484,560

 

 

 

179,589

 

Impairment

 

 

(16,769

)

 

 

 

 

 

(16,769

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

1,675,841

 

 

 

1,317,990

 

 

 

641,883

 

 

 

356,606

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other income

 

 

25,666

 

 

 

5,935

 

 

 

373

 

 

 

1,929

 

Other expenses

 

 

(19,275

)

 

 

(17,510

)

 

 

(8,367

)

 

 

(9,186

)

Interest:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense incurred, net

 

 

(272,473

)

 

 

(365,073

)

 

 

(69,740

)

 

 

(116,724

)

Amortization of deferred financing costs

 

 

(8,737

)

 

 

(8,939

)

 

 

(2,565

)

 

 

(2,686

)

Income before income and other taxes, income (loss) from

   investments in unconsolidated entities and net gain (loss)

   on sales of land parcels

 

 

1,401,022

 

 

 

932,403

 

 

 

561,584

 

 

 

229,939

 

Income and other tax (expense) benefit

 

 

(915

)

 

 

(852

)

 

 

(236

)

 

 

(350

)

Income (loss) from investments in unconsolidated entities

 

 

(3,398

)

 

 

(3,284

)

 

 

(370

)

 

 

(839

)

Net gain (loss) on sales of land parcels

 

 

5

 

 

 

34,234

 

 

 

 

 

 

34,234

 

Net income

 

 

1,396,714

 

 

 

962,501

 

 

 

560,978

 

 

 

262,984

 

Net (income) loss attributable to Noncontrolling Interests:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Partnership

 

 

(45,900

)

 

 

(34,010

)

 

 

(17,997

)

 

 

(9,386

)

Partially Owned Properties

 

 

(17,964

)

 

 

(14,855

)

 

 

(16,007

)

 

 

(742

)

Net income attributable to controlling interests

 

 

1,332,850

 

 

 

913,636

 

 

 

526,974

 

 

 

252,856

 

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(772

)

 

 

(772

)

Net income available to Common Shares

 

$

1,329,760

 

 

$

910,546

 

 

$

526,202

 

 

$

252,084

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

3.56

 

 

$

2.45

 

 

$

1.40

 

 

$

0.68

 

Weighted average Common Shares outstanding

 

 

373,833

 

 

 

371,791

 

 

 

374,897

 

 

 

371,915

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to Common Shares

 

$

3.54

 

 

$

2.45

 

 

$

1.40

 

 

$

0.68

 

Weighted average Common Shares outstanding

 

 

388,089

 

 

 

385,874

 

 

 

389,000

 

 

 

385,756

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per Common Share outstanding

 

$

2.41

 

 

$

2.41

 

 

$

0.6025

 

 

$

0.6025

 

 

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Equity Residential

Consolidated Statements of Funds From Operations and Normalized Funds From Operations

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

Year Ended December 31,

 

 

Quarter Ended December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net income

 

$

1,396,714

 

 

$

962,501

 

 

$

560,978

 

 

$

262,984

 

Net (income) loss attributable to Noncontrolling Interests – Partially

   Owned Properties

 

 

(17,964

)

 

 

(14,855

)

 

 

(16,007

)

 

 

(742

)

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(772

)

 

 

(772

)

Net income available to Common Shares and Units

 

 

1,375,660

 

 

 

944,556

 

 

 

544,199

 

 

 

261,470

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation

 

 

838,272

 

 

 

820,832

 

 

 

222,240

 

 

 

201,829

 

Depreciation – Non-real estate additions

 

 

(4,277

)

 

 

(4,564

)

 

 

(1,049

)

 

 

(1,131

)

Depreciation – Partially Owned Properties

 

 

(3,673

)

 

 

(3,345

)

 

 

(997

)

 

 

(831

)

Depreciation – Unconsolidated Properties

 

 

2,487

 

 

 

2,454

 

 

 

620

 

 

 

616

 

Net (gain) loss on sales of unconsolidated entities - operating

   assets

 

 

(1,304

)

 

 

(1,636

)

 

 

(1,300

)

 

 

(636

)

Net (gain) loss on sales of real estate properties

 

 

(1,072,183

)

 

 

(531,807

)

 

 

(484,560

)

 

 

(179,589

)

Noncontrolling Interests share of gain (loss) on sales

   of real estate properties

 

 

15,650

 

 

 

11,655

 

 

 

15,650

 

 

 

 

FFO available to Common Shares and Units

 

 

1,150,632

 

 

 

1,238,145

 

 

 

294,803

 

 

 

281,728

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjustments (see note for additional detail):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment non-operating assets

 

 

16,769

 

 

 

 

 

 

16,769

 

 

 

 

Write-off of pursuit costs

 

 

6,526

 

 

 

6,869

 

 

 

2,969

 

 

 

2,005

 

Debt extinguishment and preferred share redemption (gains)

   losses

 

 

744

 

 

 

39,292

 

 

 

480

 

 

 

39,255

 

Non-operating asset (gains) losses

 

 

(22,283

)

 

 

(32,590

)

 

 

731

 

 

 

(33,612

)

Other miscellaneous items

 

 

8,976

 

 

 

4,652

 

 

 

4,456

 

 

 

5,166

 

Normalized FFO available to Common Shares and Units

 

$

1,161,364

 

 

$

1,256,368

 

 

$

320,208

 

 

$

294,542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO

 

$

1,153,722

 

 

$

1,241,235

 

 

$

295,575

 

 

$

282,500

 

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(772

)

 

 

(772

)

FFO available to Common Shares and Units

 

$

1,150,632

 

 

$

1,238,145

 

 

$

294,803

 

 

$

281,728

 

FFO per share and Unit basic

 

$

2.98

 

 

$

3.22

 

 

$

0.76

 

 

$

0.73

 

FFO per share and Unit diluted

 

$

2.96

 

 

$

3.21

 

 

$

0.76

 

 

$

0.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Normalized FFO

 

$

1,164,454

 

 

$

1,259,458

 

 

$

320,980

 

 

$

295,314

 

Preferred distributions

 

 

(3,090

)

 

 

(3,090

)

 

 

(772

)

 

 

(772

)

Normalized FFO available to Common Shares and Units

 

$

1,161,364

 

 

$

1,256,368

 

 

$

320,208

 

 

$

294,542

 

Normalized FFO per share and Unit basic

 

$

3.01

 

 

$

3.27

 

 

$

0.83

 

 

$

0.77

 

Normalized FFO per share and Unit diluted

 

$

2.99

 

 

$

3.26

 

 

$

0.82

 

 

$

0.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average Common Shares and Units outstanding basic

 

 

386,096

 

 

 

384,794

 

 

 

386,851

 

 

 

384,899

 

Weighted average Common Shares and Units outstanding diluted

 

 

388,089

 

 

 

385,874

 

 

 

389,000

 

 

 

385,756

 

 

Note: See Adjustments from FFO to Normalized FFO for additional detail regarding the adjustments from FFO to Normalized FFO. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for the definitions of non-GAAP financial measures and other terms as well as the reconciliations of EPS to FFO per share and Normalized FFO per share.

7


Table of Contents

Equity Residential

Consolidated Balance Sheets

(Amounts in thousands except for share amounts)

(Unaudited)

 

 

 

December 31,

 

 

December 31,

 

 

 

2021

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

 

Land

 

$

5,814,790

 

 

$

5,785,367

 

Depreciable property

 

 

22,370,811

 

 

 

20,920,654

 

Projects under development

 

 

24,307

 

 

 

411,134

 

Land held for development

 

 

62,998

 

 

 

86,170

 

Investment in real estate

 

 

28,272,906

 

 

 

27,203,325

 

Accumulated depreciation

 

 

(8,354,282

)

 

 

(7,859,657

)

Investment in real estate, net

 

 

19,918,624

 

 

 

19,343,668

 

Investments in unconsolidated entities

 

 

127,448

 

 

 

52,782

 

Cash and cash equivalents

 

 

123,832

 

 

 

42,591

 

Restricted deposits

 

 

236,404

 

 

 

57,137

 

Right-of-use assets

 

 

474,713

 

 

 

499,287

 

Other assets

 

 

288,220

 

 

 

291,426

 

Total assets

 

$

21,169,241

 

 

$

20,286,891

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Mortgage notes payable, net

 

$

2,191,201

 

 

$

2,293,890

 

Notes, net

 

 

5,835,222

 

 

 

5,335,536

 

Line of credit and commercial paper

 

 

315,030

 

 

 

414,830

 

Accounts payable and accrued expenses

 

 

107,013

 

 

 

107,366

 

Accrued interest payable

 

 

69,510

 

 

 

65,896

 

Lease liabilities

 

 

312,335

 

 

 

329,130

 

Other liabilities

 

 

353,102

 

 

 

345,064

 

Security deposits

 

 

66,141

 

 

 

60,480

 

Distributions payable

 

 

233,502

 

 

 

232,262

 

Total liabilities

 

 

9,483,056

 

 

 

9,184,454

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Redeemable Noncontrolling Interests – Operating Partnership

 

 

498,977

 

 

 

338,951

 

Equity:

 

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

 

 

 

Preferred Shares of beneficial interest, $0.01 par value;

   100,000,000 shares authorized; 745,600 shares issued and

   outstanding as of December 31, 2021 and December 31, 2020

 

 

37,280

 

 

 

37,280

 

Common Shares of beneficial interest, $0.01 par value;

   1,000,000,000 shares authorized; 375,527,195 shares issued

   and outstanding as of December 31, 2021 and 372,302,000

   shares issued and outstanding as of December 31, 2020

 

 

3,755

 

 

 

3,723

 

Paid in capital

 

 

9,121,122

 

 

 

9,128,599

 

Retained earnings

 

 

1,827,063

 

 

 

1,399,715

 

Accumulated other comprehensive income (loss)

 

 

(34,272

)

 

 

(43,666

)

Total shareholders’ equity

 

 

10,954,948

 

 

 

10,525,651

 

Noncontrolling Interests:

 

 

 

 

 

 

 

 

Operating Partnership

 

 

214,094

 

 

 

233,162

 

Partially Owned Properties

 

 

18,166

 

 

 

4,673

 

Total Noncontrolling Interests

 

 

232,260

 

 

 

237,835

 

Total equity

 

 

11,187,208

 

 

 

10,763,486

 

Total liabilities and equity

 

$

21,169,241

 

 

$

20,286,891

 

 

 

 

8


Table of Contents

 

 

Equity Residential

Portfolio Summary

As of December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

% of

Stabilized

 

 

Average

 

 

 

 

 

 

 

Apartment

 

 

Budgeted