Equity Residential (EQR) Q3 2022 Earnings Call Transcript

For the period ending September 30, 2022

October 26, 2022 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Equity Residential Third Quarter '22 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Marty McKenna. Please go ahead.

Marty McKenna - IR

Good morning, and thanks for joining us to discuss Equity Residential's Third Quarter 2022 Results. Our featured speakers today are Mark Parrell, our President and CEO; and Michael Manelis, our Chief Operating Officer. Bob Garechana, our Chief Financial Officer, is here with us as well for the Q&A.

Our earnings release and accompanying management presentation are posted in the Investors section of equityapartments.com. Please be advised that certain matters discussed during this conference call may constitute forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to certain economic risks and uncertainties. The company assumes no obligation to update or supplement these statements that become untrue because of subsequent events.

Now I'll turn the call over to Mark Parrell.

Mark Parrell - President and CEO

Thank you, Marty. Good morning, and thank you all for joining us today to discuss our third quarter results. As you could see from our press release, Equity Residential had an outstanding quarter. Our revenue results in the quarter were driven by steady occupancy, continuing strong renewal rate growth and decelerating but still above trend, new lease rate growth. We couple that with a continuation of modest expense growth leading the same-store NOI growth for the quarter of an exceptional 16.2%.

With continuing positive financial leverage, this led to a 19.5% increase in quarter-over-quarter normalized funds from operations. We are proud to have improved margins and created substantial cash flow growth in the turbulent time in the economy.

I congratulate my colleagues across Equity Residential for their hard work, taking care of our residents and their fellow employees and producing these impressive financial results.

We know at this late point in the year, the focus naturally turns to 2023. As usual, we are not giving guidance at this time, but in the management presentation we posted last night, we tried to frame the material factors that will drive next year's revenue results.

In a moment, Michael will take you through those factors in some detail. We remind you that the success we've had in 2022 will create a challenging comparable period. So we continue to expect a moderation in 2023 annual same-store revenue growth even if as we expect 2023 as a strong above-trend year.