Home Properties Inc (NYSE:HME) Q1 2015 Earnings Conference Call - Final Transcript
May 01, 2015 • 11:00 am ET
Ladies and gentlemen, thank you for standing by. And welcome to the Home Properties, First Quarter 2015 Earnings Call. During the presentation all participants will be a listen-only mode. Afterwards we'll conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded today, Friday, May 1, 2015.
Now, I'll like to turn the conference over to Ms. Shelly Doran, please go ahead ma'am.
Thank you. Good morning and thank you for joining us to discuss first quarter results for Home Properties. You can listen to today's call and view our slide presentation in the Investors section of our Web site at homeproperties.com. The earnings release and supplemental schedules have been posted in the section as well under the heading, News & Market Data. (Forward-Looking Cautionary Statements)
Today's prepared remarks and responses to questions will be limited to operational and financial results, strategies and outlook. Providing commentary and participating in the Q&A session today will be Ed Pettinella, President and CEO; John Smith, Senior Vice President and Chief Investment Officer; Bernie Quinn, Senior Vice President of Property Management Operations and David Gardner, Executive Vice President and CFO.
With that said, I'll now turn the call over to Ed.
Thanks, Shelly. I'm very pleased with our revenue growth for the first quarter. Base rental income increased 3.2%, equaled the guidance and total revenue growth exceeded the guidance by 10 basis points. Our core portfolio generated a solid 5.2% increase in net operating income.
For the second year in a row, we experienced difficult weather conditions in first quarter, in seven out of our eight markets. We budget for a normal winter weather conditions based upon 30 year averages in each of our markets. And this winter was nothing like normal. January weather was relatively mild. However, February and March, conditions were very cold and snowy. Temperatures were on average, 17% colder than normal in our Northern and Midwest markets. And while snow fall wasn't as heavy as last year, except in Boston, it was heavier than expected.
Turning to Slide 5, first quarter operating expenses related to weather were $0.03 per share higher than forecast. The primary components were snow removal, heating cost and payroll for overtime dealing with snow and icy conditions. Our first quarter results excluding the weather impact would have exceeded the midpoint of guidance.
NOI growth in DC was 1.5% for the quarter. Well, not a strong statistics, it is the best that has been since the second quarter of 2013, and compares favorably among the five peers in DC that have reported to date, ranking second in the group and 200 basis points above the average NOI of negative 0.5%. We continue to look for DC to begin to improve in the second half of 2015 and firmly believe in its long term viability. Once the weather improved in mid March, potential resident traffic picked up and we started to see significant leasing activity, resulting in a 120 basis points increase in occupancy and in