Equity residential reports first quarter 2015
results
Chicago--(business wire)--equity residential (nyse: eqr) today reported results for the quarter ended march 31, 2015. all per share results are reported as available to common shares on a diluted basis. “apartment fundamentals remain very strong across our markets and 2015 should be another terrific year for equity residential,” said david j. neithercut, equity residential’s president and ceo. “as we head into our primary leasing season, we continue to experience less turnover, better occupancy and higher rental rates than original expectations and are therefore pleased to raise our guidance range for same store revenue growth to 4.3% to 4.7%.” first quarter 2015 ffo (funds from operations), as defined by the national association of real estate investment trusts (nareit), for the first quarter of 2015 was $0.79 per share compared to $0.71 per share in the first quarter of 2014. the difference is due primarily to the items described below. for the first quarter of 2015, the company reported normalized ffo of $0.79 per share compared to $0.71 per share in the same period of 2014. the following items impacted normalized ffo per share in the quarter: a positive impact of approximately $0.07 per share from higher same store net operating income (noi) and approximately $0.02 per share from noi from non-same store properties currently in lease-up; a positive impact of approximately $0.01 per share from lower interest expense primarily due to higher capitalized interest in the first quarter of 2015; and a negative impact of approximately $0.02 per share from the timing of the company’s 2014 and 2015 transaction activity and other items. normalized ffo begins with ffo and eliminates certain items that by their nature are not comparable from period to period or that tend to obscure the company’s actual operating performance. reconciliations and definitions of ffo and normalized ffo are provided on pages 5 and 25 of this release and the company has included guidance for normalized ffo on page 24 and ffo on page 25 of this release. for the first quarter of 2015, the company reported earnings of $0.49 per share compared to $0.22 per share in the first quarter of 2014. the difference is due primarily to higher gains on property sales in the first quarter of 2015 and the items described above. same store results on a same store first quarter to first quarter comparison, which includes 97,586 apartment units, revenues increased 5.0%, expenses increased 1.4% and noi increased 7.0%. capital markets activity in february 2015, the company established a $500 million unsecured commercial paper note program which allows equity residential to borrow on a daily, weekly and monthly basis. as of april 27, 2015, the company’s program has approximately $500 million outstanding at a weighted average rate of 0.61% for a weighted average period of 12 days. investment activity the company did not acquire any operating properties during the first quarter of 2015. during the first quarter of 2015, the company sold three consolidated apartment properties, consisting of 550 apartment units, for an aggregate sale price of approximately $145.4 million at a weighted average capitalization (cap) rate of 5.3%. these sales generated an unlevered internal rate of return (irr), inclusive of indirect management costs, of 11.9%. second quarter 2015 guidance the company has established a normalized ffo guidance range of $0.82 to $0.86 per share for the second quarter of 2015. the difference between the company’s first quarter 2015 normalized ffo of $0.79 per share and the midpoint of the second quarter 2015 guidance range of $0.84 per share is due primarily to: a positive impact of approximately $0.04 per share from higher same store noi; and a positive impact of approximately $0.01 per share from lower g&a costs. full year 2015 guidance the company has revised its guidance for its full year 2015 same store operating performance and normalized ffo per share as listed below: previous revised the company’s guidance for transaction activity remains unchanged at $500 million of acquisitions and $500 million of dispositions with a cap rate spread of 100 basis points. second quarter 2015 earnings and conference call equity residential expects to announce second quarter 2015 results on tuesday, july 28, 2015 and host a conference call to discuss those results at 10:00 a.m. ct on wednesday, july 29, 2015. equity residential is an s&p 500 company focused on the acquisition, development and management of high quality apartment properties in top u.s. growth markets. equity residential owns or has investments in 389 properties consisting of 108,793 apartment units. 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 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 local government regulation. 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, april 29, at 10:00 a.m. central. please visit the investor section of the company’s web site at www.equityapartments.com for the link. a replay of the web cast will be available for two weeks at this site. income before income and other taxes, income (loss) from investments in unconsolidated entities, net gain (loss) on sales of real estate properties and land parcels and discontinued operations preferred shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized; 803,600 shares issued and outstanding as of march 31, 2015 and 1,000,000 shares issued and outstanding as of december 31, 2014 common shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 363,968,420 shares issued and outstanding as of march 31, 2015 and 362,855,454 shares issued and outstanding as of december 31, 2014 % of total 2014 ffo purposes: 3 projects under development - wholly owned: projects under development - partially owned: completed not stabilized - wholly owned (5): completed and stabilized during the quarter - wholly owned: total capitalcost (1) q1 2015noi completed and stabilized during the quarter - unconsolidated: balance sheet items: redemptions and non-cash convertible debt discounts 2015 normalized ffo guidance (per share diluted) q2 2015 2015 2015 same store assumptions (note: approximately 25 basis point change in noi percentage = $0.01 per share change in eps/ffo/normalized ffo) 2015 transaction assumptions 2015 debt assumptions 2015 other guidance assumptions expected q1 2015 debt extinguishment (gains) losses, including prepayment penalties, preferred share redemptions and non-cash convertible debt discounts expense (benefit)
