Equity Residential (NYSE: EQR) today reported results for the quarter and year ended December 31, 2013. All per share results are reported as available to common shares on a diluted basis.
“2013 was an extraordinary year for Equity Residential during which we delivered 4.5% same store revenue growth while acquiring and seamlessly integrating nearly $9 billion of new assets and selling $4.5 billion of non-core assets,” said David J. Neithercut, Equity Residential’s President and CEO. “2014 represents the first full year of stabilized operations following the successful completion of our multi-year plan to totally transform our property portfolio and we are pleased to expect an 8% increase in our Normalized FFO and dividend.”
Fourth Quarter 2013
FFO (Funds from Operations), as defined by the National Association of Real Estate Investment Trusts (NAREIT), for the fourth quarter of 2013 was $0.67 per share compared to $0.94 per share in the fourth quarter of 2012. The difference is due primarily to the $80.0 million Archstone termination fee that the company recognized in the fourth quarter of 2012 as well as the higher debt extinguishment costs incurred in the fourth quarter of 2013 discussed further on page three of this release.
For the fourth quarter of 2013, the company reported Normalized FFO of $0.77 per share compared to $0.75 per share in the same period of 2012. The following items impacted Normalized FFO per share in the quarter:
- the positive impact of approximately $0.03 per share from higher same store net operating income (NOI);
- the positive impact of approximately $0.28 per share from the Archstone properties, offset by the negative impact of approximately $0.28 per share from 2012 and 2013 disposition activity and common share issuance in connection with the company’s purchase of Archstone; and
- the negative impact of approximately $0.01 per share from various 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. Merger expenses and prepayment penalties are not included in the company’s Normalized FFO. A reconciliation and definition of Normalized FFO are provided on pages 26 and 28 of this release and the company has included guidance for Normalized FFO on page 27 of this release.