Equity Residential(US:EQR)2022-10-27 16:00Part I Financial Statements This section presents unaudited condensed consolidated financial statements for EQR and ERPOP, detailing balance sheets, operations, cash flows, and equity changes, with notes Financial Statements of Equity Residential (EQR) EQR's financial statements show total assets decreased to $20.27 billion, with nine-month net income at $641.6 million and diluted EPS at $1.63 EQR Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | $20,265,405 | $21,169,241 | | Total Liabilities | $8,633,131 | $9,483,056 | | Total Equity | $11,261,737 | $11,187,208 | EQR Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Rental Income | $2,035,477 | $1,818,867 | | Net Gain on Sales of Real Estate | $304,346 | $587,623 | | Net Income | $641,641 | $835,736 | | Diluted EPS | $1.63 | $2.14 | EQR Consolidated Cash Flow Highlights (in thousands) | Cash Flow Activity | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,120,228 | $978,213 | | Net Cash from Investing Activities | $243,336 | ($309,589) | | Net Cash from Financing Activities | ($1,602,333) | ($541,603) | Financial Statements of ERP Operating Limited Partnership (ERPOP) ERPOP's financial statements mirror EQR's assets and liabilities, with nine-month net income at $641.6 million, differing in capital structure ERPOP Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Assets | $20,265,405 | $21,169,241 | | Total Liabilities | $8,633,131 | $9,483,056 | | Total Capital | $11,261,737 | $11,187,208 | ERPOP Consolidated Statement of Operations Highlights (in thousands, except per unit data) | Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Rental Income | $2,035,477 | $1,818,867 | | Net Gain on Sales of Real Estate | $304,346 | $587,623 | | Net Income | $641,641 | $835,736 | | Diluted EPU | $1.63 | $2.14 | Notes to Consolidated Financial Statements These notes detail the company's business structure, accounting policies, real estate transactions, debt, and segment performance - As of September 30, 2022, the company owned a portfolio of 308 properties consisting of 79,594 apartment units8384 Real Estate Transactions (Nine Months Ended Sep 30, 2022) | Transaction Type | Properties | Apartment Units | Price (in thousands) | | :--- | :--- | :--- | :--- | | Acquisitions | 1 | 172 | $113,000 | | Dispositions | 3 | 945 | $746,150 | Debt Summary as of September 30, 2022 (in thousands) | Debt Type | Balance | % of Total | | :--- | :--- | :--- | | Secured | $1,967,827 | 26.2% | | Unsecured | $5,530,364 | 73.8% | | Total Debt | $7,498,191 | 100.0% | Same Store NOI Growth by Market (Nine Months Ended Sep 30, 2022 vs 2021) | Market | 2022 NOI (in thousands) | 2021 NOI (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Los Angeles | $248,775 | $216,369 | +15.0% | | San Francisco | $218,829 | $195,653 | +11.8% | | Washington, D.C. | $203,597 | $192,848 | +5.6% | | New York | $179,635 | $133,917 | +34.1% | | Seattle | $150,789 | $129,294 | +16.6% | | Boston | $134,637 | $116,475 | +15.6% | | Total Same Store | $1,281,194 | $1,111,032 | +15.3% | Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management attributes strong nine-month 2022 performance to healthy demand, resulting in 96.5% physical occupancy and 15.3% same-store NOI growth - For the nine months ended September 30, 2022, same-store NOI increased by 15.3% compared to the prior year, driven by an 11.1% increase in rental income and a 3.0% increase in operating expenses203 - Key operating drivers for 2022 performance include strong pricing, high physical occupancy of 96.5%, and low resident turnover of 33.6%214215 - The company maintains a strong balance sheet with approximately $2.3 billion in readily available liquidity and 87.0% of its real estate portfolio unencumbered as of September 30, 2022218231 Reconciliation of Diluted EPS (YTD 2022 vs YTD 2021) | Component | Change in EPS | | :--- | :--- | | Diluted EPS for period ended 2021 | $2.14 | | Property NOI | $0.49 | | Net gain/loss on property sales | ($0.73) | | Depreciation expense | ($0.13) | | Other | ($0.14) | | Diluted EPS for period ended 2022 | $1.63 | Quantitative and Qualitative Disclosures about Market Risk The company reports no material changes to its market risk disclosures since the 2021 Annual Report on Form 10-K - There have been no material changes to the company's market risk disclosures since the 2021 Form 10-K242 Controls and Procedures Management concluded disclosure controls and procedures were effective as of September 30, 2022, with no material changes to internal control - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2022243245 - No material changes to internal control over financial reporting occurred during the third quarter of 2022244247 Part II Legal Proceedings The company reports no pending or threatened litigation expected to have a material adverse effect - As of September 30, 2022, the company is not aware of any litigation that is reasonably expected to have a material adverse effect248 Risk Factors No material changes to risk factors were reported from the company's 2021 Annual Report on Form 10-K - No material changes to risk factors were reported from the company's 2021 Form 10-K249 Unregistered Sales of Equity Securities and Use of Proceeds In Q3 2022, EQR issued 6,572 Common Shares for OP Units from limited partners, relying on a registration exemption - In Q3 2022, EQR issued 6,572 Common Shares in exchange for 6,572 OP Units from limited partners, utilizing a registration exemption250 Defaults Upon Senior Securities The company reported no defaults upon senior securities - None251 Other Information The company reported no other information for this item - None251 Exhibits This section lists exhibits filed with the Form 10-Q report, including executive plan amendments and CEO/CFO certifications