Exhibit 99.1
Equity Residential Reports Second Quarter Results
Same Store NOI Increases 4.9%
CHICAGO--(BUSINESS WIRE)--Equity Residential (NYSE:EQR) today reported results for the quarter and six months ended June 30, 2008. All per share results are reported on a fully-diluted basis.
“We are very pleased with our operating performance for the first half of the year with solid occupancy and good revenue growth across most of our major markets,” said David J. Neithercut, Equity Residential’s President and CEO. “And we will produce good results for the year, with same store revenue growth of 3% to 3.5%, which is modestly short of our original expectations as many of our markets are feeling the impact of job losses due to a challenging economic environment.”
Second Quarter 2008
For the quarter ended June 30, 2008, the company reported earnings of $0.47 per share compared to $0.95 per share in the second quarter of 2007. The decrease is primarily attributable to lower gains on property sales due to a lower volume of property sales in 2008.
Funds from Operations (FFO) for the quarter ended June 30, 2008 were $0.64 per share compared to $0.60 per share in the same period of 2007. The $0.04 per share increase in the second quarter of 2008 is due primarily to:
- A net positive impact of approximately $0.03 per share from higher total net operating income (NOI) as a result of higher NOI from the company’s same store portfolio and the lease up of development and other non-same store properties, partially offset by dilution from the company’s 2007 and 2008 transaction activity;
- A net cumulative positive impact on interest expense and preferred share distributions of approximately $0.08 per share due primarily to lower floating rates of interest, the use of sales proceeds to pay down debt, higher capitalized interest, lower debt extinguishment costs and lower share count, partially offset by the increased interest expense associated with the company’s 2007 share buyback;
- A negative impact of approximately $0.04 per share from the company’s condominium operations; and
- A negative impact of approximately $0.03 per share due to higher income taxes, no gains on land sales and certain other non-comparable items listed on page 24 of this release.
Six Months Ended June 30, 2008
For the six months ended June 30, 2008, the company reported earnings of $0.98 per share compared to $1.35 per share in the same period of 2007.
FFO for the six months ended June 30, 2008 were $1.23 per share compared to $1.15 per share in the same period of 2007.
Same Store Results
On a same store second quarter to second quarter comparison, which includes 123,246 apartment units, revenues increased 4.0%, expenses increased 2.4% and NOI increased 4.9%. The increase in same store revenues was driven primarily by an increase in average rental rate.
On a same store six-month to six-month comparison, which includes 119,546 apartment units, revenues increased 3.8%, expenses increased 2.0% and NOI increased 4.8%. The increase in same store revenues was driven primarily by an increase in average rental rate.
Acquisitions/Dispositions
During the second quarter of 2008, the company acquired four properties, consisting of 1,666 apartment units, for an aggregate purchase price of $295.0 million at an average capitalization (cap) rate of 6.0%. In addition, the company acquired an uncompleted development property for a purchase price of $31.7 million.
Also during the quarter, the company sold eight properties, consisting of 1,965 apartment units, for an aggregate sale price of $206.9 million at an average cap rate of 5.6% generating an unlevered internal rate of return (IRR) of 10.9%. In addition, the company sold 32 condominium units for an aggregate sale price of $6.1 million.
During the first six months of 2008, the company acquired six properties, consisting of 1,837 apartment units, for an aggregate purchase price of $336.9 million at an average cap rate of 5.9%, as well as an uncompleted development property for a purchase price of $31.7 million.
Also during the first six months of 2008, the company sold 23 properties, consisting of 5,282 apartment units, for an aggregate sale price of $478.5 million at an average cap rate of 5.7% generating an unlevered IRR of 10.7%. In addition, the company sold 73 condominium units for an aggregate sale price of $15.5 million.
Liquidity
The company recently agreed to borrow $550 million in a loan originated by Wells Fargo (NYSE:WFC) for repurchase by Fannie Mae (NYSE:FNM). This is a secured loan with an all-in effective interest rate of approximately 6%. The loan is interest only and matures in 11.5 years with the first 10.5 years fixed and the last year at a floating rate of interest. The funding is expected to occur in late August 2008. Equity Residential currently has approximately $1.4 billion available on its unsecured revolving credit facility and approximately $145 million of unrestricted cash. These existing funding sources, combined with the new Fannie Mae/Wells Fargo borrowing, give the company ample liquidity to meet its 2008 and 2009 funding requirements.
Third Quarter 2008 Earnings Guidance
The company has established an FFO guidance range of $0.61 to $0.65 per share for the third quarter of 2008. When compared to the second quarter 2008, the company’s third quarter FFO results will reflect a continued contribution from good same store operating performance and be negatively impacted by approximately $0.01 per share in connection with the timing of its new secured loan from Fannie Mae.
Full Year 2008 Guidance
The company has revised its guidance for its full year 2008 same store operating performance, funds from operations results and transactions activities as well as other items listed on page 25 of this release. The changes to the full year same store and FFO guidance are listed below:
| | Previous | | Revised |
| Same store: | | | | |
| Revenue change | | 3.00% to 4.00% | | 3.00% to 3.50% |
| Expense change | | 2.50% to 3.25% | | 2.25% to 2.50% |
| NOI change | | 3.00% to 4.75% | | 3.50% to 4.00% |
| | | | |
| FFO | | $2.45 to $2.60 | | $2.45 to $2.55 |
The company’s full year 2008 FFO results will reflect a continued contribution from good same store operating performance and be negatively impacted by approximately $0.04 per share due to losses from its condominium conversion business and $0.02 per share from the timing of its new secured loan from Fannie Mae. As a result, the company anticipates FFO results at the midpoint of the revised guidance range.
Third Quarter 2008 Conference Call
Equity Residential expects to announce third quarter 2008 results on Wednesday, October 29, 2008 and host a conference call to discuss those results at 10:00 a.m. CT on Thursday, October 30, 2008.
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 564 properties located in 23 states and the District of Columbia, consisting of 150,699 apartment units. For more information on Equity Residential, please visit our website at www.equityresidential.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 filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityresidential.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 and outlook for 2008 will take place tomorrow, Thursday, July 31, at 10:00 a.m. Central. Please visit the Investor Information section of the company’s web site at www.equityresidential.com for the link. A replay of the web cast will be available for two weeks at this site.
| EQUITY RESIDENTIAL |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Amounts in thousands except per share data) |
| (Unaudited) |
| | | | | | | | |
| | Six Months Ended June 30, | | Quarter Ended June 30, |
| | 2008 | | 2007 | | 2008 | | 2007 |
| REVENUES | | | | | | | | |
| Rental income | | $ 1,047,943 | | | $ 957,654 | | | $ 532,809 | | | $ 489,124 | |
| Fee and asset management | | 5,010 | | | 4,703 | | | 2,716 | | | 2,436 | |
| | | | | | | | |
| Total revenues | | 1,052,953 | | | 962,357 | | | 535,525 | | | 491,560 | |
| | | | | | | | |
| EXPENSES | | | | | | | | |
| Property and maintenance | | 271,876 | | | 250,832 | | | 135,769 | | | 125,446 | |
| Real estate taxes and insurance | | 109,940 | | | 102,455 | | | 54,613 | | | 50,686 | |
| Property management | | 40,587 | | | 47,262 | | | 19,450 | | | 22,420 | |
| Fee and asset management | | 4,171 | | | 4,504 | | | 1,991 | | | 2,163 | |
| Depreciation | | 290,605 | | | 280,941 | | | 145,485 | | | 143,456 | |
| General and administrative | | 24,191 | | | 20,816 | | | 11,774 | | | 11,447 | |
| Impairment | | 703 | | | 394 | | | 584 | | | 158 | |
| | | | | | | | |
| Total expenses | | 742,073 | | | 707,204 | | | 369,666 | | | 355,776 | |
| | | | | | | | |
| Operating income | | 310,880 | | | 255,153 | | | 165,859 | | | 135,784 | |
| | | | | | | | |
| Interest and other income | | 8,181 | | | 6,216 | | | 4,813 | | | 3,778 | |
| Interest: | | | | | | | | |
| Expense incurred, net | | (234,731 | ) | | (232,445 | ) | | (117,484 | ) | | (121,789 | ) |
| Amortization of deferred financing costs | | (4,340 | ) | | (5,832 | ) | | (2,179 | ) | | (3,611 | ) |
| | | | | | | | |
Income before income and other taxes, allocation to Minority Interests, loss from investments in unconsolidated entities, net gain on sales of land parcels and discontinued operations | | 79,990 | | | 23,092 | | | 51,009 | | | 14,162 | |
| Income and other tax (expense) benefit | | (4,624 | ) | | (698 | ) | | (1,628 | ) | | (101 | ) |
| Allocation to Minority Interests: | | | | | | | | |
| Operating Partnership, net | | (4,167 | ) | | (640 | ) | | (2,735 | ) | | (671 | ) |
| Preference Interests and Units | | (7 | ) | | (434 | ) | | (3 | ) | | (211 | ) |
| Partially Owned Properties | | (1,659 | ) | | (779 | ) | | (1,391 | ) | | (187 | ) |
| Loss from investments in unconsolidated entities | | (190 | ) | | (363 | ) | | (95 | ) | | (134 | ) |
| Net gain on sales of land parcels | | - | | | 4,516 | | | - | | | 4,516 | |
| Income from continuing operations, net of minority interests | | 69,343 | | | 24,694 | | | 45,157 | | | 17,374 | |
| Discontinued operations, net of minority interests | | 203,751 | | | 383,944 | | | 87,455 | | | 265,027 | |
| Net income | | 273,094 | | | 408,638 | | | 132,612 | | | 282,401 | |
| Preferred distributions | | (7,259 | ) | | (14,840 | ) | | (3,626 | ) | | (7,416 | ) |
| Net income available to Common Shares | | $ 265,835 | | | $ 393,798 | | | $ 128,986 | | | $ 274,985 | |
| | | | | | | | |
| Earnings per share - basic: | | | | | | | | |
| Income from continuing operations available to Common Shares | | $ 0.23 | | | $ 0.03 | | | $ 0.15 | | | $ 0.04 | |
| Net income available to Common Shares | | $ 0.99 | | | $ 1.37 | | | $ 0.48 | | | $ 0.97 | |
| Weighted average Common Shares outstanding | | 269,196 | | | 288,316 | | | 269,608 | | | 284,424 | |
| | | | | | | | |
| Earnings per share - diluted: | | | | | | | | |
| Income from continuing operations available to Common Shares | | $ 0.23 | | | $ 0.03 | | | $ 0.15 | | | $ 0.03 | |
| Net income available to Common Shares | | $ 0.98 | | | $ 1.35 | | | $ 0.47 | | | $ 0.95 | |
| Weighted average Common Shares outstanding | | 289,921 | | | 311,963 | | | 290,445 | | | 307,631 | |
| | | | | | | | |
| Distributions declared per Common Share outstanding | | $ 0.9650 | | | $ 0.9250 | | | $ 0.4825 | | | $ 0.4625 | |
| EQUITY RESIDENTIAL |
| CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS |
| (Amounts in thousands except per share data) |
| (Unaudited) |
| | | | | | | | |
| | | | | | | | |
| | Six Months Ended June 30, | | Quarter Ended June 30, |
| | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | | | | |
| Net income | | $ 273,094 | | | $ 408,638 | | | $ 132,612 | | | $ 282,401 | |
| Allocation to Minority Interests - Operating Partnership, net | | 4,167 | | | 640 | | | 2,735 | | | 671 | |
| Adjustments: | | | | | | | | |
| Depreciation | | 290,605 | | | 280,941 | | | 145,485 | | | 143,456 | |
| Depreciation - Non-real estate additions | | (4,081 | ) | | (4,173 | ) | | (2,030 | ) | | (2,138 | ) |
| Depreciation - Partially Owned and Unconsolidated Properties | | 2,040 | | | 2,081 | | | 1,006 | | | 1,138 | |
| Discontinued operations: | | | | | | | | |
| Depreciation | | 3,569 | | | 30,800 | | | 1,109 | | | 13,611 | |
| Gain on sales of discontinued operations, net of minority interests | | (201,329 | ) | | (361,525 | ) | | (86,568 | ) | | (256,569 | ) |
| Net incremental (loss) gain on sales of condominium units | | (3,090 | ) | | 13,587 | | | (3,456 | ) | | 8,903 | |
| Minority Interests - Operating Partnership | | 162 | | | 1,487 | | | 58 | | | 560 | |
| | | | | | | | |
| FFO (1)(2) | | 365,137 | | | 372,476 | | | 190,951 | | | 192,033 | |
| Preferred distributions | | (7,259 | ) | | (14,840 | ) | | (3,626 | ) | | (7,416 | ) |
| | | | | | | | |
| FFO available to Common Shares and OP Units - basic (1) (2) | | $ 357,878 | | | $ 357,636 | | | $ 187,325 | | | $ 184,617 | |
| | | | | | | | |
| FFO available to Common Shares and OP Units - diluted (1) (2) | | $ 358,219 | | | $ 358,035 | | | $ 187,493 | | | $ 184,811 | |
| | | | | | | | |
| FFO per share and OP Unit - basic | | $ 1.25 | | | $ 1.16 | | | $ 0.65 | | | $ 0.61 | |
| | | | | | | | |
| FFO per share and OP Unit - diluted | | $ 1.23 | | | $ 1.15 | | | $ 0.64 | | | $ 0.60 | |
| | | | | | | | |
Weighted average Common Shares and OP Units outstanding - basic | | 287,260 | | | 307,582 | | | 287,440 | | | 303,511 | |
| | | | | | | | |
Weighted average Common Shares and OP Units outstanding - diluted | | 290,360 | | | 312,478 | | | 290,878 | | | 308,131 | |
(1) The National Association of Real Estate Investment Trusts ("NAREIT") defines funds from operations ("FFO") (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States ("GAAP")), excluding gains (or losses) from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Company commences the conversion of units to condominiums, it simultaneously discontinues depreciation of such property. FFO available to Common Shares and OP Units is calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares in accordance with accounting principles generally accepted in the United States. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the "Minority Interests - Operating Partnership". Subject to certain restrictions, the Minority Interests - Operating Partnership may exchange their OP Units for EQR Common Shares on a one-for-one basis.
(2) The Company believes that FFO and FFO available to Common Shares and OP Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and OP Units can help compare the operating performance of a company's real estate between periods or as compared to different companies. FFO and FFO available to Common Shares and OP Units do not represent net income, net income available to Common Shares or net cash flows from operating activities in accordance with GAAP. Therefore, FFO and FFO available to Common Shares and OP Units should not be exclusively considered as alternatives to net income, net income available to Common Shares or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company's calculation of FFO and FFO available to Common Shares and OP Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.
| EQUITY RESIDENTIAL |
| CONSOLIDATED BALANCE SHEETS |
| (Amounts in thousands except for share amounts) |
| (Unaudited) |
| | | | |
| | June 30, | | December 31, |
| | 2008 | | 2007 |
| ASSETS | | | | |
| Investment in real estate | | | | |
| Land | | $ 3,684,584 | | | $ 3,607,305 | |
| Depreciable property | | 13,899,777 | | | 13,556,681 | |
| Projects under development | | 763,327 | | | 828,530 | |
| Land held for development | | 358,955 | | | 340,834 | |
| Investment in real estate | | 18,706,643 | | | 18,333,350 | |
| Accumulated depreciation | | (3,343,071 | ) | | (3,170,125 | ) |
| Investment in real estate, net | | 15,363,572 | | | 15,163,225 | |
| | | | |
| Cash and cash equivalents | | 273,600 | | | 50,831 | |
| Investments in unconsolidated entities | | 3,308 | | | 3,547 | |
| Deposits - restricted | | 217,107 | | | 253,276 | |
| Escrow deposits - mortgage | | 19,637 | | | 20,174 | |
| Deferred financing costs, net | | 54,785 | | | 56,271 | |
| Other assets | | 151,214 | | | 142,453 | |
| Total assets | | $ 16,083,223 | | | $ 15,689,777 | |
| | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | |
| Liabilities: | | | | |
| Mortgage notes payable | | $ 4,103,913 | | | $ 3,605,971 | |
| Notes, net | | 5,765,803 | | | 5,763,762 | |
| Lines of credit | | - | | | 139,000 | |
| Accounts payable and accrued expenses | | 148,660 | | | 109,385 | |
| Accrued interest payable | | 116,985 | | | 124,717 | |
| Other liabilities | | 303,806 | | | 322,975 | |
| Security deposits | | 64,225 | | | 62,159 | |
| Distributions payable | | 141,478 | | | 141,244 | |
| Total liabilities | | 10,644,870 | | | 10,269,213 | |
| | | | |
| Commitments and contingencies | | | | |
| Minority Interests: | | | | |
| Operating Partnership | | 320,754 | | | 331,626 | |
| Preference Interests and Units | | 184 | | | 184 | |
| Partially Owned Properties | | 25,842 | | | 26,236 | |
| Total Minority Interests | | 346,780 | | | 358,046 | |
| | | | |
| Shareholders' equity: | | | | |
Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized; 1,963,975 shares issued and outstanding as of June 30, 2008 and 1,986,475 shares issued and outstanding as of December 31, 2007 | | 209,099 | | | 209,662 | |
Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 270,927,139 shares issued and outstanding as of June 30, 2008 and 269,554,661 shares issued and outstanding as of December 31, 2007 | | 2,709 | | | 2,696 | |
| Paid in capital | | 4,295,637 | | | 4,266,538 | |
| Retained earnings | | 604,373 | | | 599,504 | |
| Accumulated other comprehensive loss | | (20,245 | ) | | (15,882 | ) |
| Total shareholders' equity | | 5,091,573 | | | 5,062,518 | |
| Total liabilities and shareholders' equity | | $ 16,083,223 | | | $ 15,689,777 | |
| EQUITY RESIDENTIAL |
| | | | | | | | | | | | |
| Portfolio Summary |
| As of June 30, 2008 |
| | | | | | | | | | | | |
| | Markets | | Properties | | Units | | % of
Total Units | | % of 2008
Stabilized
NOI | | Average
Rental
Rate (1) |
| | | | | | | | | | | | |
| 1 | | New York Metro Area | | 22 | | 6,246 | | 4.1 | % | | 10.1 | % | | $ 2,752 |
| 2 | | DC Northern Virginia | | 26 | | 8,781 | | 5.8 | % | | 8.3 | % | | 1,659 |
| 3 | | Los Angeles | | 37 | | 7,714 | | 5.1 | % | | 8.2 | % | | 1,783 |
| 4 | | South Florida | | 39 | | 12,897 | | 8.6 | % | | 8.1 | % | | 1,301 |
| 5 | | Seattle/Tacoma | | 48 | | 11,071 | | 7.4 | % | | 7.2 | % | | 1,338 |
| 6 | | Boston | | 37 | | 6,217 | | 4.1 | % | | 6.2 | % | | 1,867 |
| 7 | | San Francisco Bay Area | | 33 | | 6,623 | | 4.4 | % | | 6.0 | % | | 1,673 |
| 8 | | Phoenix | | 41 | | 11,780 | | 7.8 | % | | 5.6 | % | | 933 |
| 9 | | Denver | | 26 | | 8,902 | | 5.9 | % | | 4.9 | % | | 991 |
| 10 | | San Diego | | 14 | | 4,491 | | 3.0 | % | | 4.3 | % | | 1,644 |
| 11 | | Orlando | | 25 | | 7,877 | | 5.2 | % | | 4.3 | % | | 1,033 |
| 12 | | Atlanta | | 30 | | 9,110 | | 6.0 | % | | 4.1 | % | | 957 |
| 13 | | Inland Empire, CA | | 15 | | 4,655 | | 3.1 | % | | 3.6 | % | | 1,358 |
| 14 | | Suburban Maryland | | 21 | | 5,559 | | 3.7 | % | | 3.2 | % | | 1,189 |
| 15 | | Orange County | | 10 | | 3,307 | | 2.2 | % | | 3.2 | % | | 1,601 |
| 16 | | New England (excluding Boston) | | 33 | | 4,925 | | 3.3 | % | | 2.5 | % | | 1,102 |
| 17 | | Jacksonville | | 12 | | 3,951 | | 2.6 | % | | 1.8 | % | | 898 |
| 18 | | Portland, OR | | 11 | | 3,713 | | 2.5 | % | | 1.8 | % | | 957 |
| 19 | | Tampa/Ft. Myers | | 11 | | 3,414 | | 2.3 | % | | 1.4 | % | | 933 |
| 20 | | Dallas/Ft. Worth | | 15 | | 3,631 | | 2.4 | % | | 1.3 | % | | 919 |
| | | | | | | | | | | | |
| | Top 20 Total | | 506 | | 134,864 | | 89.5 | % | | 96.1 | % | | 1,345 |
| | | | | | | | | | | | |
| 21 | | Austin | | 9 | | 2,985 | | 2.0 | % | | 1.3 | % | | 897 |
| 22 | | Raleigh/Durham | | 12 | | 3,058 | | 2.0 | % | | 1.2 | % | | 812 |
| 23 | | Central Valley, CA | | 11 | | 1,853 | | 1.2 | % | | 0.9 | % | | 1,108 |
| 24 | | Other EQR | | 17 | | 3,784 | | 2.5 | % | | 0.5 | % | | 851 |
| | | | | | | | | | | | |
| | Total | | 555 | | 146,544 | | 97.2 | % | | 100.0 | % | | 1,309 |
| | | | | | | | | | | | |
| | Condominium Conversion | | 8 | | 424 | | 0.3 | % | | - | | | - |
| | Military Housing | | 1 | | 3,731 | | 2.5 | % | | - | | | - |
| | | | | | | | | | | | |
| | Grand Total | | 564 | | 150,699 | | 100.0 | % | | 100.0 | % | | $ 1,309 |
(1) Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the month of June 2008.
EQUITY RESIDENTIAL |
| | | | | | | | |
| Portfolio as of June 30, 2008 |
| | | | | | | | | | | |
| | | | | | Properties | | Units | | |
| | | | | | | | | | |
| | Wholly Owned Properties | | | | 491 | | | 130,813 | | | |
| | Partially Owned Properties: | | | | | | | | |
| | Consolidated | | | | 28 | | | 5,709 | | | |
| | Unconsolidated | | | | 44 | | | 10,446 | | | |
| | Military Housing (Fee Managed) | | | | 1 | | | 3,731 | | | |
| | | | | | 564 | | | 150,699 | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Portfolio Rollforward Q2 2008 |
| | | | | | | | | | |
| | | | Properties | | Units | | $ Thousands | | Cap Rate |
| | | | | | | | | | |
| | 3/31/2008 | | 565 | | | 149,769 | | | | | |
| | | | | | | | | | |
| Acquisitions: | | | | | | | | |
| Rental Properties | | 4 | | | 1,666 | | | $ 295,000 | | | 6.0 | % |
| Uncompleted Developments (1) | | - | | | - | | | $ 31,705 | | | |
| Dispositions: | | | | | | | | |
| Rental Properties | | (8 | ) | | (1,965 | ) | | $ (206,906 | ) | | 5.6 | % |
| Condominium Conversion Properties | | (1 | ) | | (32 | ) | | $ (6,053 | ) | | |
| Completed Developments | | 4 | | | 1,261 | | | | | |
| | | | | | | | | | |
| | 6/30/2008 | | 564 | | | 150,699 | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Portfolio Rollforward 2008 |
| | | | | | | | | | |
| | | | Properties | | Units | | $ Thousands | | Cap Rate |
| | | | | | | | | | |
| | 12/31/2007 | | 579 | | | 152,821 | | | | | |
| | | | | | | | | | |
| Acquisitions: | | | | | | | | |
| Rental Properties | | 6 | | | 1,837 | | | $ 336,863 | | | 5.9 | % |
| Uncompleted Developments (1) | | - | | | - | | | $ 31,705 | | | |
| Dispositions: | | | | | | | | |
| Rental Properties | | (23 | ) | | (5,282 | ) | | $ (478,549 | ) | | 5.7 | % |
| Condominium Conversion Properties | | (3 | ) | | (73 | ) | | $ (15,498 | ) | | |
| Completed Developments | | 5 | | | 1,393 | | | | | |
| Configuration Changes | | - | | | 3 | | | | | |
| | | | | | | | | | |
| | 6/30/2008 | | 564 | | | 150,699 | | | | | |
(1) Represents the acquisition of Mosaic at Metro in Hyattsville, Maryland. See the Consolidated Development Projects on page 20 for further information.
EQUITY RESIDENTIAL |
| | | | | | | | |
| Second Quarter 2008 vs. Second Quarter 2007 |
| Quarter over Quarter Same Store Results/Statistics |
| | | | | | | | | | | | |
| $ in Thousands (except for Average Rental Rate) - 123,246 Same Store Units |
| | | | |
| | Results | | Statistics |
| Description | | Revenues | | Expenses | | NOI (1) | | Average Rental
Rate (2) | | Occupancy | | Turnover |
| Q2 2008 | | $ 461,335 | | | $ 167,284 | | | $ 294,051 | | | $ 1,315 | | | 95.0 | % | | 15.9 | % |
| Q2 2007 | | $ 443,721 | | | $ 163,420 | | | $ 280,301 | | | $ 1,268 | | | 94.8 | % | | 16.4 | % |
| Change | | $ 17,614 | | | $ 3,864 | | | $ 13,750 | | | $ 47 | | | 0.2 | % | | (0.5 | %) |
| Change | | 4.0 | % | | 2.4 | % | | 4.9 | % | | 3.7 | % | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Second Quarter 2008 vs. First Quarter 2008 |
| Sequential Quarter over Quarter Same Store Results/Statistics |
| | | | | | | | | | | | |
| $ in Thousands (except for Average Rental Rate) - 128,991 Same Store Units |
| |
| | Results | | Statistics |
| Description | | Revenues | | Expenses | | NOI (1) | | Average Rental
Rate (2) | | Occupancy | | Turnover |
| Q2 2008 | | $ 489,456 | | | $ 178,642 | | | $ 310,814 | | | $ 1,334 | | | 94.9 | % | | 16.0 | % |
| Q1 2008 | | $ 481,315 | | | $ 181,228 | | | $ 300,087 | | | $ 1,321 | | | 94.3 | % | | 13.7 | % |
| Change | | $ 8,141 | | | $ (2,586 | ) | | $ 10,727 | | | $ 13 | | | 0.6 | % | | 2.3 | % |
| Change | | 1.7 | % | | (1.4 | %) | | 3.6 | % | | 1.0 | % | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| June YTD 2008 vs. June YTD 2007 |
| YTD over YTD Same Store Results/Statistics |
| | | | | | | | | | | | |
| $ in Thousands (except for Average Rental Rate) - 119,546 Same Store Units |
| | | | |
| | Results | | Statistics |
| Description | | Revenues | | Expenses | | NOI (1) | | Average Rental
Rate (2) | | Occupancy | | Turnover |
| YTD 2008 | | $ 889,236 | | | $ 327,018 | | | $ 562,218 | | | $ 1,311 | | | 94.7 | % | | 29.6 | % |
| YTD 2007 | | $ 856,947 | | | $ 320,631 | | | $ 536,316 | | | $ 1,262 | | | 94.8 | % | | 29.9 | % |
| Change | | $ 32,289 | | | $ 6,387 | | | $ 25,902 | | | $ 49 | | | (0.1 | %) | | (0.3 | %) |
| Change | | 3.8 | % | | 2.0 | % | | 4.8 | % | | 3.9 | % | | | | |
(1) The Company's primary financial measure for evaluating each of its apartment communities is net operating income ("NOI"). NOI represents rental income less property and maintenance expense, real estate tax and insurance expense, and property management expense. The Company believes that NOI is helpful to investors as a supplemental measure of the operating performance of a real estate company because it is a direct measure of the actual operating results of the Company's apartment communities.
(2) Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period.
EQUITY RESIDENTIAL |
| | | | |
| Same Store NOI Reconciliation |
| Second Quarter 2008 vs. Second Quarter 2007 |
| | | | |
The following table presents a reconciliation of operating income
per the consolidated statements of operations to NOI for the Second
Quarter 2008 Same Store Properties: |
| | | | |
| | Quarter Ended June 30, |
| | 2008 | | 2007 |
| | (Amounts in thousands) |
| | | | |
| Operating income | | $ 165,859 | | | $ 135,784 | |
| Adjustments: | | | | |
| Non-same store operating results | | (28,926 | ) | | (10,271 | ) |
| Fee and asset management revenue | | (2,716 | ) | | (2,436 | ) |
| Fee and asset management expense | | 1,991 | | | 2,163 | |
| Depreciation | | 145,485 | | | 143,456 | |
| General and administrative | | 11,774 | | | 11,447 | |
| Impairment | | 584 | | | 158 | |
| | | | |
| Same store NOI | | $ 294,051 | | | $ 280,301 | |
| | | | |
| | | | |
| | | | |
| Same Store NOI Reconciliation |
| June YTD 2008 vs. June YTD 2007 |
| | | | |
The following table presents a reconciliation of operating income
per the consolidated statements of operations to NOI for the
Six-Month 2008 Same Store Properties: |
| | | | |
| | Six Months Ended June 30, |
| | 2008 | | 2007 |
| | (Amounts in thousands) |
| | | | |
| Operating income | | $ 310,880 | | | $ 255,153 | |
| Adjustments: | | | | |
| Non-same store operating results | | (63,322 | ) | | (20,789 | ) |
| Fee and asset management revenue | | (5,010 | ) | | (4,703 | ) |
| Fee and asset management expense | | 4,171 | | | 4,504 | |
| Depreciation | | 290,605 | | | 280,941 | |
| General and administrative | | 24,191 | | | 20,816 | |
| Impairment | | 703 | | | 394 | |
| | | | |
| Same store NOI | | $ 562,218 | | | $ 536,316 | |
EQUITY RESIDENTIAL |
| | | | | | | | | | | | | | | | |
| Second Quarter 2008 vs. Second Quarter 2007 |
| Same Store Results by Market |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Increase (Decrease) from Prior Year's Quarter |
| | | | | | Q2 2008 | | Q2 2008 | | Q2 2008 | | | | | | | | | | |
| | | | | | % of | | Average | | Weighted | | | | | | | | Average | | |
| | | | | | Actual | | Rental | | Average | | | | | | | | Rental | | |
| | Markets | | Units | | NOI | | Rate (1) | | Occupancy % | | Revenues | | Expenses | | NOI | | Rate (1) | | Occupancy |
| 1 | | New York Metro Area | | 5,443 | | 9.8 | % | | $ 2,712 | | 96.1 | % | | 5.0 | % | | 3.3 | % | | 5.8 | % | | 5.3 | % | | (0.2 | %) |
| 2 | | South Florida | | 11,433 | | 8.5 | % | | 1,312 | | 94.0 | % | | 0.3 | % | | 2.8 | % | | (1.4 | %) | | (0.6 | %) | | 0.8 | % |
| 3 | | Los Angeles | | 6,864 | | 8.0 | % | | 1,754 | | 94.9 | % | | 4.3 | % | | 3.2 | % | | 4.7 | % | | 4.8 | % | | (0.5 | %) |
| 4 | | Seattle/Tacoma | | 8,604 | | 7.4 | % | | 1,364 | | 95.0 | % | | 9.2 | % | | 4.1 | % | | 12.2 | % | | 9.3 | % | | 0.0 | % |
| 5 | | DC Northern Virginia | | 6,870 | | 7.1 | % | | 1,543 | | 96.1 | % | | 5.9 | % | | (2.9 | %) | | 10.5 | % | | 4.7 | % | | 1.0 | % |
| 6 | | Boston | | 5,649 | | 6.5 | % | | 1,890 | | 96.2 | % | | 4.2 | % | | 1.8 | % | | 5.7 | % | | 3.6 | % | | 0.5 | % |
| 7 | | San Francisco Bay Area | | 5,793 | | 6.1 | % | | 1,627 | | 95.6 | % | | 7.7 | % | | 3.5 | % | | 9.8 | % | | 8.1 | % | | (0.4 | %) |
| 8 | | Phoenix | | 9,990 | | 5.5 | % | | 925 | | 94.1 | % | | (0.1 | %) | | 2.2 | % | | (1.4 | %) | | (0.9 | %) | | 0.7 | % |
| 9 | | Denver | | 7,605 | | 4.7 | % | | 967 | | 95.1 | % | | 6.6 | % | | 4.4 | % | | 7.8 | % | | 7.1 | % | | (0.4 | %) |
| 10 | | Orlando | | 7,243 | | 4.5 | % | | 1,032 | | 93.8 | % | | (1.2 | %) | | 0.4 | % | | (2.1 | %) | | (1.3 | %) | | 0.1 | % |
| 11 | | Atlanta | | 7,926 | | 4.4 | % | | 985 | | 95.1 | % | | 4.4 | % | | 4.1 | % | | 4.7 | % | | 4.5 | % | | (0.1 | %) |
| 12 | | San Diego | | 3,822 | | 4.1 | % | | 1,645 | | 94.5 | % | | 3.2 | % | | 2.1 | % | | 3.7 | % | | 3.5 | % | | (0.3 | %) |
| 13 | | Inland Empire, CA | | 4,355 | | 3.8 | % | | 1,358 | | 95.0 | % | | 2.5 | % | | 1.3 | % | | 3.1 | % | | 1.2 | % | | 1.2 | % |
| 14 | | Orange County | | 3,175 | | 3.4 | % | | 1,606 | | 94.5 | % | | 3.6 | % | | 0.7 | % | | 5.0 | % | | 4.6 | % | | (1.0 | %) |
| 15 | | New England (excluding Boston) | | 4,925 | | 2.8 | % | | 1,107 | | 95.2 | % | | 2.2 | % | | (0.1 | %) | | 4.2 | % | | 2.2 | % | | (0.1 | %) |
| 16 | | Suburban Maryland | | 3,687 | | 2.6 | % | | 1,172 | | 95.2 | % | | 9.0 | % | | 6.6 | % | | 10.5 | % | | 7.0 | % | | 1.7 | % |
| 17 | | Portland, OR | | 3,409 | | 2.0 | % | | 969 | | 95.4 | % | | 5.4 | % | | 1.7 | % | | 7.9 | % | | 6.2 | % | | (0.7 | %) |
| 18 | | Jacksonville | | 3,231 | | 1.7 | % | | 899 | | 93.6 | % | | (2.4 | %) | | 2.8 | % | | (5.7 | %) | | (1.5 | %) | | (0.9 | %) |
| 19 | | Dallas/Ft. Worth | | 2,601 | | 1.4 | % | | 990 | | 96.0 | % | | 4.8 | % | | 7.3 | % | | 3.0 | % | | 4.6 | % | | 0.2 | % |
| 20 | | Austin | | 2,985 | | 1.4 | % | | 901 | | 95.6 | % | | 6.2 | % | | 2.4 | % | | 9.9 | % | | 5.7 | % | | 0.5 | % |
| | Top 20 Markets | | 115,610 | | 95.7 | % | | 1,339 | | 95.0 | % | | 4.0 | % | | 2.4 | % | | 5.0 | % | | 3.8 | % | | 0.2 | % |
| | All Other Markets | | 7,636 | | 4.3 | % | | 952 | | 95.1 | % | | 2.7 | % | | 1.0 | % | | 3.8 | % | | 1.8 | % | | 0.8 | % |
| | Total | | 123,246 | | 100.0 | % | | $ 1,315 | | 95.0 | % | | 4.0 | % | | 2.4 | % | | 4.9 | % | | 3.7 | % | | 0.2 | % |
(1) Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period.
EQUITY RESIDENTIAL |
| |
| Second Quarter 2008 vs. First Quarter 2008 |
| Sequential Same Store Results by Market |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Increase (Decrease) from Prior Quarter |
| | | | | | Q2 2008 | | Q2 2008 | | Q2 2008 | | | | | | | | | | |
| | | | | | % of | | Average | | Weighted | | | | | | | | Average | | |
| | | | | | Actual | | Rental | | Average | | | | | | | | Rental | | |
| | Markets | | Units | | NOI | | Rate (1) | | Occupancy % | | Revenues | | Expenses | | NOI | | Rate (1) | | Occupancy |
| 1 | | New York Metro Area | | 6,246 | | 10.4 | % | | $ 2,760 | | 95.1 | % | | 3.5 | % | | (7.2 | %) | | 10.0 | % | | 1.5 | % | | 1.9 | % |
| 2 | | South Florida | | 11,761 | | 8.2 | % | | 1,308 | | 94.1 | % | | 0.9 | % | | 0.7 | % | | 1.1 | % | | 0.3 | % | | 0.6 | % |
| 3 | | DC Northern Virginia | | 7,661 | | 8.1 | % | | 1,653 | | 96.1 | % | | 2.7 | % | | (5.6 | %) | | 6.9 | % | | 1.3 | % | | 1.3 | % |
| 4 | | Los Angeles | | 6,864 | | 7.5 | % | | 1,754 | | 94.9 | % | | 1.9 | % | | (0.4 | %) | | 3.0 | % | | 0.5 | % | | 1.3 | % |
| 5 | | Seattle/Tacoma | | 8,708 | | 7.1 | % | | 1,369 | | 95.0 | % | | 4.0 | % | | 0.2 | % | | 6.2 | % | | 3.1 | % | | 0.9 | % |
| 6 | | San Francisco Bay Area | | 6,364 | | 6.4 | % | | 1,669 | | 95.8 | % | | 1.7 | % | | 1.7 | % | | 1.7 | % | | 1.3 | % | | 0.4 | % |
| 7 | | Boston | | 5,805 | | 6.3 | % | | 1,878 | | 96.2 | % | | 2.2 | % | | (3.4 | %) | | 6.0 | % | | 1.5 | % | | 0.6 | % |
| 8 | | Phoenix | | 10,238 | | 5.4 | % | | 927 | | 94.1 | % | | (1.6 | %) | | 0.6 | % | | (3.0 | %) | | (0.4 | %) | | (1.2 | %) |
| 9 | | Denver | | 8,355 | | 4.9 | % | | 981 | | 95.2 | % | | 1.4 | % | | 3.9 | % | | 0.1 | % | | 1.2 | % | | 0.1 | % |
| 10 | | San Diego | | 4,491 | | 4.5 | % | | 1,631 | | 94.3 | % | | 1.0 | % | | (3.1 | %) | | 3.1 | % | | 0.6 | % | | 0.4 | % |
| 11 | | Orlando | | 7,525 | | 4.4 | % | | 1,035 | | 93.8 | % | | (0.4 | %) | | (3.5 | %) | | 1.6 | % | | (0.7 | %) | | 0.3 | % |
| 12 | | Atlanta | | 7,926 | | 4.1 | % | | 985 | | 95.1 | % | | 2.1 | % | | 1.1 | % | | 2.8 | % | | 1.1 | % | | 1.0 | % |
| 13 | | Inland Empire, CA | | 4,355 | | 3.6 | % | | 1,358 | | 95.0 | % | | 1.1 | % | | (0.9 | %) | | 2.1 | % | | (1.2 | %) | | 2.2 | % |
| 14 | | Orange County | | 3,175 | | 3.2 | % | | 1,606 | | 94.5 | % | | 1.2 | % | | 1.5 | % | | 1.0 | % | | 0.7 | % | | 0.4 | % |
| 15 | | New England (excluding Boston) | | 4,925 | | 2.7 | % | | 1,107 | | 95.2 | % | | 1.4 | % | | (7.0 | %) | | 10.1 | % | | 0.3 | % | | 1.1 | % |
| 16 | | Suburban Maryland | | 3,977 | | 2.6 | % | | 1,148 | | 95.3 | % | | 4.2 | % | | (0.8 | %) | | 7.5 | % | | 2.0 | % | | 2.0 | % |
| 17 | | Portland, OR | | 3,409 | | 1.9 | % | | 969 | | 95.4 | % | | 1.4 | % | | (1.5 | %) | | 3.3 | % | | 1.0 | % | | 0.4 | % |
| 18 | | Jacksonville | | 3,711 | | 1.8 | % | | 914 | | 93.6 | % | | (1.4 | %) | | (1.7 | %) | | (1.2 | %) | | (1.4 | %) | | 0.1 | % |
| 19 | | Tampa | | 2,854 | | 1.5 | % | | 954 | | 94.4 | % | | (0.2 | %) | | (4.1 | %) | | 2.7 | % | | (0.7 | %) | | 0.5 | % |
| 20 | | Dallas/Ft. Worth | | 2,601 | | 1.4 | % | | 990 | | 96.0 | % | | 2.3 | % | | 5.3 | % | | 0.1 | % | | 1.7 | % | | 0.6 | % |
| | Top 20 Markets | | 120,951 | | 96.0 | % | | 1,361 | | 94.9 | % | | 1.7 | % | | (1.6 | %) | | 3.7 | % | | 1.0 | % | | 0.7 | % |
| | All Other Markets | | 8,040 | | 4.0 | % | | 938 | | 95.5 | % | | 1.4 | % | | 2.5 | % | | 0.6 | % | | 1.0 | % | | 0.4 | % |
| | Total | | 128,991 | | 100.0 | % | | $ 1,334 | | 94.9 | % | | 1.7 | % | | (1.4 | %) | | 3.6 | % | | 1.0 | % | | 0.6 | % |
(1) Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period.
EQUITY RESIDENTIAL |
| | | | | | | | | | | | | | | | | | |
| June YTD 2008 vs. June YTD 2007 |
| Same Store Results by Market |
| | | | | | | | | | | | |
| | | | | | | | | | | | Increase (Decrease) from Prior Year |
| | | | | | Jun YTD 08 | | Jun YTD 08 | | Jun YTD 08 | | | | | | | | | | |
| | | | | | % of | | Average | | Weighted | | | | | | | | Average | | |
| | | | | | Actual | | Rental | | Average | | | | | | | | Rental | | |
| | Markets | | Units | | NOI | | Rate (1) | | Occupancy % | | Revenues | | Expenses | | NOI | | Rate (1) | | Occupancy |
| 1 | | New York Metro Area | | 5,443 | | 9.9 | % | | $ 2,710 | | 95.2 | % | | 5.0 | % | | 4.5 | % | | 5.2 | % | | 6.0 | % | | (0.9 | %) |
| 2 | | Los Angeles | | 6,748 | | 8.0 | % | | 1,739 | | 94.2 | % | | 4.2 | % | | 1.8 | % | | 5.3 | % | | 5.2 | % | | (0.9 | %) |
| 3 | | Seattle/Tacoma | | 8,402 | | 7.4 | % | | 1,346 | | 94.4 | % | | 8.6 | % | | 3.2 | % | | 11.9 | % | | 8.9 | % | | (0.2 | %) |
| 4 | | DC Northern Virginia | | 6,870 | | 7.2 | % | | 1,535 | | 95.5 | % | | 4.5 | % | | (2.4 | %) | | 8.2 | % | | 3.9 | % | | 0.5 | % |
| 5 | | South Florida | | 9,347 | | 7.1 | % | | 1,295 | | 93.9 | % | | (0.7 | %) | | 1.7 | % | | (2.2 | %) | | (0.9 | %) | | 0.2 | % |
| 6 | | Boston | | 5,649 | | 6.6 | % | | 1,876 | | 95.8 | % | | 3.7 | % | | 4.2 | % | | 3.5 | % | | 2.3 | % | | 1.3 | % |
| 7 | | San Francisco Bay Area | | 5,793 | | 6.3 | % | | 1,616 | | 95.3 | % | | 7.8 | % | | 1.2 | % | | 11.4 | % | | 8.2 | % | | (0.4 | %) |
| 8 | | Phoenix | | 9,350 | | 5.5 | % | | 929 | | 94.9 | % | | 0.4 | % | | 0.5 | % | | 0.4 | % | | (0.5 | %) | | 0.9 | % |
| 9 | | Denver | | 7,605 | | 4.9 | % | | 962 | | 95.1 | % | | 6.9 | % | | 0.9 | % | | 10.1 | % | | 7.2 | % | | (0.3 | %) |
| 10 | | Orlando | | 6,931 | | 4.4 | % | | 1,037 | | 93.6 | % | | (1.5 | %) | | 1.5 | % | | (3.2 | %) | | (1.3 | %) | | (0.2 | %) |
| 11 | | Atlanta | | 7,744 | | 4.4 | % | | 978 | | 94.6 | % | | 3.9 | % | | 2.8 | % | | 4.8 | % | | 4.7 | % | | (0.7 | %) |
| 12 | | San Diego | | 3,822 | | 4.3 | % | | 1,642 | | 94.3 | % | | 3.5 | % | | 2.4 | % | | 4.0 | % | | 3.8 | % | | (0.3 | %) |
| 13 | | Inland Empire, CA | | 4,355 | | 4.0 | % | | 1,366 | | 94.0 | % | | 2.3 | % | | 0.1 | % | | 3.5 | % | | 2.3 | % | | 0.0 | % |
| 14 | | Orange County | | 3,013 | | 3.4 | % | | 1,606 | | 94.2 | % | | 3.6 | % | | 0.7 | % | | 4.9 | % | | 5.1 | % | | (1.3 | %) |
| 15 | | New England (excluding Boston) | | 4,925 | | 2.8 | % | | 1,105 | | 94.7 | % | | 2.2 | % | | 3.9 | % | | 0.6 | % | | 2.5 | % | | (0.4 | %) |
| 16 | | Suburban Maryland | | 3,687 | | 2.7 | % | | 1,160 | | 94.3 | % | | 7.9 | % | | 1.0 | % | | 12.7 | % | | 6.7 | % | | 1.0 | % |
| 17 | | Portland, OR | | 3,409 | | 2.0 | % | | 966 | | 95.1 | % | | 5.5 | % | | 2.8 | % | | 7.3 | % | | 6.0 | % | | (0.4 | %) |
| 18 | | Jacksonville | | 3,231 | | 1.7 | % | | 908 | | 93.6 | % | | (1.0 | %) | | 3.2 | % | | (3.7 | %) | | 0.0 | % | | (1.0 | %) |
| 19 | | Dallas/Ft. Worth | | 2,601 | | 1.5 | % | | 982 | | 95.7 | % | | 5.0 | % | | 5.1 | % | | 4.9 | % | | 4.4 | % | | 0.5 | % |
| 20 | | Austin | | 2,985 | | 1.5 | % | | 897 | | 96.0 | % | | 5.9 | % | | 2.5 | % | | 8.9 | % | | 6.0 | % | | (0.1 | %) |
| | Top 20 Markets | | 111,910 | | 95.6 | % | | 1,336 | | 94.7 | % | | 3.9 | % | | 2.1 | % | | 4.9 | % | | 3.9 | % | | (0.1 | %) |
| | | | | | | | | | | | | | | | | | | | |
| | All Other Markets | | 7,636 | | 4.4 | % | | 950 | | 94.7 | % | | 2.0 | % | | 0.7 | % | | 2.9 | % | | 1.9 | % | | 0.0 | % |
| | Total | | 119,546 | | 100.0 | % | | $ 1,311 | | 94.7 | % | | 3.8 | % | | 2.0 | % | | 4.8 | % | | 3.9 | % | | (0.1 | %) |
(1) Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period.
EQUITY RESIDENTIAL |
| | | | | | | | |
| Debt Summary as of June 30, 2008 |
| (Amounts in thousands) |
| | | | | | | | |
| | | | | | | | Weighted |
| | | | | | Weighted | | Average |
| | | | | | Average | | Maturities |
| | Amounts (1) | | % of Total | | Rates (1) | | (years) |
| | | | | | | | |
| Secured | | $ 4,103,913 | | 41.6 | % | | 5.16 | % | | 8.0 |
| Unsecured | | 5,765,803 | | 58.4 | % | | 5.50 | % | | 5.8 |
| Total | | $ 9,869,716 | | 100.0 | % | | 5.36 | % | | 6.7 |
| | | | | | | | |
| Fixed Rate Debt: | | | | | | | | |
| Secured - Conventional | | $ 2,917,404 | | 29.6 | % | | 6.01 | % | | 6.0 |
| Unsecured - Public/Private | | 5,003,472 | | 50.7 | % | | 5.68 | % | | 5.9 |
| Unsecured - Tax Exempt | | 111,390 | | 1.1 | % | | 5.06 | % | | 20.8 |
| Fixed Rate Debt | | 8,032,266 | | 81.4 | % | | 5.78 | % | | 6.2 |
| | | | | | | | |
| Floating Rate Debt: | | | | | | | | |
| Secured - Conventional | | 569,136 | | 5.8 | % | | 3.84 | % | | 4.6 |
| Secured - Tax Exempt | | 617,373 | | 6.2 | % | | 2.51 | % | | 20.9 |
| Unsecured - Public/Private | | 650,941 | | 6.6 | % | | 4.29 | % | | 1.9 |
| Unsecured - Revolving Credit Facility | | - | | - | | | 4.29 | % | | 3.6 |
| Floating Rate Debt | | 1,837,450 | | 18.6 | % | | 3.56 | % | | 8.9 |
| | | | | | | | |
| Total | | $ 9,869,716 | | 100.0 | % | | 5.36 | % | | 6.7 |
(1) Net of the effect of any derivative instruments. Weighted average rates are for the six months ended June 30, 2008.
Note: The Company capitalized interest of approximately $29.5 million and $17.9 million during the six months ended June 30, 2008 and 2007, respectively. The Company capitalized interest of approximately $14.8 million and $10.0 million during the quarters ended June 30, 2008 and 2007, respectively.
| Debt Maturity Schedule as of June 30, 2008 |
| (Amounts in thousands) |
| | | | | | | | | | | | |
| | | | | | | | | | Weighted | | Weighted |
| | | | | | | | | | Average Rates | | Average Rates |
| | Fixed Rate | | Floating Rate | | | | % of | | on Fixed Rate | | on Total Debt |
| Year | | (1) | | (1) | | Total | | Total | | Debt (1) | | (1) |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| 2008 | | $ 338,298 | | | $ 10,200 | | | $ 348,498 | | 3.5 | % | | 6.61 | % | | 6.54 | % |
| 2009 | | 458,479 | | | 526,129 | | | 984,608 | | 10.0 | % | | 6.35 | % | | 5.08 | % |
| 2010 | (2) | 287,526 | | | 612,525 | | | 900,051 | | 9.1 | % | | 7.03 | % | | 4.62 | % |
| 2011 | (3) | 1,531,880 | | | 41,537 | | | 1,573,417 | | 16.0 | % | | 5.58 | % | | 5.50 | % |
| 2012 | | 907,912 | | | - | | | 907,912 | | 9.2 | % | | 6.08 | % | | 6.08 | % |
| 2013 | | 566,310 | | | - | | | 566,310 | | 5.7 | % | | 5.93 | % | | 5.93 | % |
| 2014 | | 517,460 | | | - | | | 517,460 | | 5.2 | % | | 5.28 | % | | 5.28 | % |
| 2015 | | 355,565 | | | - | | | 355,565 | | 3.6 | % | | 6.41 | % | | 6.41 | % |
| 2016 | | 1,089,312 | | | - | | | 1,089,312 | | 11.0 | % | | 5.32 | % | | 5.32 | % |
| 2017 | | 803,642 | | | 456 | | | 804,098 | | 8.2 | % | | 6.01 | % | | 6.01 | % |
| 2018+ | | 1,175,882 | | | 646,603 | | | 1,822,485 | | 18.5 | % | | 5.75 | % | | 5.00 | % |
| Total | | $ 8,032,266 | | | $ 1,837,450 | | | $ 9,869,716 | | 100.0 | % | | 5.85 | % | | 5.44 | % |
(1) Net of the effect of any derivative instruments. Weighted average rates are as of June 30, 2008.
(2) Includes the Company's $500.0 million floating rate term loan facility, which matures on October 5, 2010, subject to two one-year extension options exercisable by the Company.
(3) Includes $650.0 million of 3.85% convertible unsecured debt with a final maturity of 2026. The notes are callable by the Company on or after August 18, 2011. The notes are putable by the holders on August 18, 2011, August 15, 2016 and August 15, 2021.
EQUITY RESIDENTIAL |
| | | | | | | | | | |
| Unsecured Debt Summary as of June 30, 2008 |
| (Amounts in thousands) |
| | | | | | | | | | | | |
| | | | | | | | | | Unamortized | | |
| | Coupon | | Due | | | | Face | | Premium/ | | Net |
| | Rate | | Date | | | | Amount | | (Discount) | | Balance |
| | | | | | | | | | | | |
| Fixed Rate Notes: | | | | | | | | | | | | |
| | 7.500 | % | | 08/15/08 | | (1) | | $ 130,000 | | | $ - | | | $ 130,000 | |
| | 4.750 | % | | 06/15/09 | | (2) | | 300,000 | | | (263 | ) | | 299,737 | |
| | 6.950 | % | | 03/02/11 | | | | 300,000 | | | 2,462 | | | 302,462 | |
| | 6.625 | % | | 03/15/12 | | | | 400,000 | | | (1,089 | ) | | 398,911 | |
| | 5.500 | % | | 10/01/12 | | | | 350,000 | | | (1,467 | ) | | 348,533 | |
| | 5.200 | % | | 04/01/13 | | | | 400,000 | | | (562 | ) | | 399,438 | |
| | 5.250 | % | | 09/15/14 | | | | 500,000 | | | (382 | ) | | 499,618 | |
| | 6.584 | % | | 04/13/15 | | | | 300,000 | | | (754 | ) | | 299,246 | |
| | 5.125 | % | | 03/15/16 | | | | 500,000 | | | (412 | ) | | 499,588 | |
| | 5.375 | % | | 08/01/16 | | | | 400,000 | | | (1,500 | ) | | 398,500 | |
| | 5.750 | % | | 06/15/17 | | | | 650,000 | | | (4,578 | ) | | 645,422 | |
| | 7.125 | % | | 10/15/17 | | | | 150,000 | | | (603 | ) | | 149,397 | |
| | 7.570 | % | | 08/15/26 | | | | 140,000 | | | - | | | 140,000 | |
| | 3.850 | % | | 08/15/26 | | (3) | | 650,000 | | | (7,380 | ) | | 642,620 | |
| Floating Rate Adjustments | | | | | | (2) | | (150,000 | ) | | - | | | (150,000 | ) |
| | | | | | | | 5,020,000 | | | (16,528 | ) | | 5,003,472 | |
| | | | | | | | | | | | |
| Fixed Rate Tax Exempt Notes: | | | | | | | | | | | | |
| | 4.750 | % | | 12/15/28 | | (1) | | 35,600 | | | - | | | 35,600 | |
| | 5.200 | % | | 06/15/29 | | (1) | | 75,790 | | | - | | | 75,790 | |
| | | | | | | | 111,390 | | | - | | | 111,390 | |
| | | | | | | | | | | | |
| Floating Rate Notes: | | | | | | | | | | | | |
| | | | 06/15/09 | | (2) | | 150,000 | | | - | | | 150,000 | |
| FAS 133 Adjustments - net | | | | | | (2) | | 941 | | | - | | | 941 | |
| Term Loan Facility | | | | 10/05/10 | | (4) | | 500,000 | | | - | | | 500,000 | |
| | | | | | | | 650,941 | | | - | | | 650,941 | |
| | | | | | | | | | | | |
| Revolving Credit Facility: | | | | 02/28/12 | | (5) | | - | | | - | | | - | |
| | | | | | | | | | | | |
| Total Unsecured Debt | | | | | | | | $ 5,782,331 | | | $ (16,528 | ) | | $ 5,765,803 | |
(1) Notes are private. All other unsecured debt is public.
(2) $150.0 million in fair value interest rate swaps converts 50% of the 4.750% Notes due June 15, 2009 to a floating interest rate.
(3) Convertible notes mature on August 15, 2026. The notes are callable by the Company on or after August 18, 2011. The notes are putable by the holders on August 18, 2011, August 15, 2016 and August 15, 2021.
(4) Represents the Company's $500.0 million term loan facility, which matures on October 5, 2010, subject to two one-year extension options exercisable by the Company.
(5) As of June 30, 2008, there was no amount outstanding on the Company's $1.5 billion unsecured revolving credit facility which matures on February 28, 2012.
EQUITY RESIDENTIAL |
| | | | |
| Selected Unsecured Public Debt Covenants |
| | | | |
| | June 30, | | March 31, |
| | 2008 | | 2008 |
| | | | |
| Total Debt to Adjusted Total Assets (not to exceed 60%) | | 50.9 | % | | 51.3 | % |
| | | | |
| | | | |
| Secured Debt to Adjusted Total Assets (not to exceed 40%) | | 21.2 | % | | 21.3 | % |
| | | | |
| | | | |
Consolidated Income Available for Debt
Service to Maximum Annual Service Charges | | | | |
| (must be at least 1.5 to 1) | | 2.21 | | | 2.08 | |
| | | | |
| | | | |
| Total Unsecured Assets to Unsecured Debt | | | | |
| (must be at least 150%) | | 210.1 | % | | 207.2 | % |
These selected covenants relate to ERP Operating Limited Partnership's ("ERPOP") outstanding unsecured public debt. Equity Residential is the general partner of ERPOP.
EQUITY RESIDENTIAL |
| |
| Capital Structure as of June 30, 2008 |
| (Amounts in thousands except for share and per share amounts) |
| | | | | | | | | | |
| Secured Debt | | | | | | $ 4,103,913 | | 41.6 | % | | |
| Unsecured Debt | | | | | | 5,765,803 | | 58.4 | % | | |
| Total Debt | | | | | | 9,869,716 | | 100.0 | % | | 46.7 | % |
| | | | | | | | | | |
| Common Shares | | 270,927,139 | | 93.8 | % | | | | | | |
| OP Units | | 17,798,574 | | 6.2 | % | | | | | | |
| Total Shares and OP Units | | 288,725,713 | | 100.0 | % | | | | | | |
| Common Share Equivalents (see below) | | 420,378 | | | | | | | | |
| Total outstanding at quarter-end | | 289,146,091 | | | | | | | | |
| Common Share Price at June 30, 2008 | | $ 38.27 | | | | | | | | |
| | | | | | 11,065,621 | | 98.2 | % | | |
| Perpetual Preferred Equity (see below) | | | | | | 200,000 | | 1.8 | % | | |
| Total Equity | | | | | | 11,265,621 | | 100.0 | % | | 53.3 | % |
| | | | | | | | | | |
| Total Market Capitalization | | | | | | $ 21,135,337 | | | | 100.0 | % |
| Convertible Preferred Equity as of June 30, 2008 |
| (Amounts in thousands except for share/unit and per share/unit amounts) |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | Annual | | Annual | | Weighted | | | | Common |
| | | Redemption | | Outstanding | | Liquidation | | Dividend | | Dividend | | Average | | Conversion | | Share |
| Series | | Date | | Shares/Units | | Value | | Per Share/Unit | | Amount | | Rate | | Ratio | | Equivalents |
| | | | | | | | | | | | | | | | | | |
| Preferred Shares: | | | | | | | | | | | | | | | | |
| 7.00% Series E | | 11/1/98 | | 340,616 | | $ 8,515 | | $ 1.75 | | $ 596 | | | | 1.1128 | | 379,037 |
| 7.00% Series H | | 6/30/98 | | 23,359 | | 584 | | 1.75 | | 41 | | | | 1.4480 | | 33,824 |
| Junior Preference Units: | | | | | | | | | | | | | | | | |
| 8.00% Series B | | 7/29/09 | | 7,367 | | 184 | | 2.00 | | 15 | | | | 1.020408 | | 7,517 |
| Total Convertible Preferred Equity | | | | 371,342 | | $ 9,283 | | | | $ 652 | | 7.02 | % | | | | 420,378 |
| Perpetual Preferred Equity as of June 30, 2008 |
| (Amounts in thousands except for share and per share amounts) |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Annual | | Annual | | Weighted |
| | | | | | Redemption | | Outstanding | | Liquidation | | Dividend | | Dividend | | Average |
| Series | | Date | | Shares | | Value | | Per Share | | Amount | | Rate |
| Preferred Shares: | | | | | | | | | | | | | |
| 8.29% Series K | | | 12/10/26 | | 1,000,000 | | $ 50,000 | | $ 4.145 | | $ 4,145 | | |
| 6.48% Series N | | | 6/19/08 | | 600,000 | | 150,000 | | 16.20 | | 9,720 | | |
| Total Perpetual Preferred Equity | | | | 1,600,000 | | $ 200,000 | | | | $ 13,865 | | 6.93 | % |
EQUITY RESIDENTIAL |
| |
| Common Share and Operating Partnership Unit (OP Unit) |
| Weighted Average Amounts Outstanding |
| | | | | | | | | | | |
| | | | YTD Q208 | | YTD Q207 | | Q208 | | Q207 |
| | | | | | | | | | |
| Weighted Average Amounts Outstanding for Net Income Purposes: | | | | | | | | |
| Common Shares - basic | | 269,196,050 | | 288,316,068 | | 269,607,843 | | 284,424,108 |
| Shares issuable from assumed conversion/vesting of: | | | | | | | | |
| | - OP Units | | 18,063,520 | | 19,265,714 | | 17,832,334 | | 19,087,151 |
| | - share options/ restricted shares | | 2,661,461 | | 4,381,549 | | 3,004,340 | | 4,119,457 |
| Total Common Shares and OP Units - diluted | | 289,921,031 | | 311,963,331 | | 290,444,517 | | 307,630,716 |
| | | | | | | | | | |
| Weighted Average Amounts Outstanding for FFO Purposes: | | | | | | | | |
| Common Shares - basic | | 269,196,050 | | 288,316,068 | | 269,607,843 | | 284,424,108 |
| OP Units - basic | | 18,063,520 | | 19,265,714 | | 17,832,334 | | 19,087,151 |
| Total Common Shares and OP Units - basic | | 287,259,570 | | 307,581,782 | | 287,440,177 | | 303,511,259 |
| Shares issuable from assumed conversion/vesting of: | | | | | | | | |
| | - convertible preferred shares/units | | 438,825 | | 514,384 | | 433,179 | | 500,257 |
| | - share options/ restricted shares | | 2,661,461 | | 4,381,549 | | 3,004,340 | | 4,119,457 |
| Total Common Shares and OP Units - diluted | | 290,359,856 | | 312,477,715 | | 290,877,696 | | 308,130,973 |
| | | | | | | | | | |
| Period Ending Amounts Outstanding: | | | | | | | | |
| Common Shares - basic | | 270,927,139 | | | | | | |
| OP Units - basic | | 17,798,574 | | | | | | |
| Total Common Shares and OP Units - basic | | 288,725,713 | | | | | | |
EQUITY RESIDENTIAL |
| |
| Partially Owned Entities as of June 30, 2008 |
| (Amounts in thousands except for project and unit amounts) |
| | | | | | | | | | | | | | | | |
| | | | | Consolidated | | Unconsolidated |
| | | | | Development Projects | | | | | | |
| | | | | Held for and/or Under Development | | Completed, Not Stabilized (4) | | Completed and Stabilized | | Other | | Total | | Institutional Joint Ventures |
| | | | | | | | | | | | | | | |
| Total projects | (1) | | - | | | 2 | | | 5 | | | 21 | | | 28 | | | 44 | |
| | | | | | | | | | | | | | | |
| Total units | (1) | | - | | | 410 | | | 1,405 | | | 3,894 | | | 5,709 | | | 10,446 | |
| | | | | | | | | | | | | | | |
| Operating information for the six months | | | | | | | | | | | | | |
| ended 6/30/08 (at 100%): | | | | | | | | | | | | | |
| Operating revenue | | | $ 180 | | | $ 245 | | | $ 11,932 | | | $ 28,982 | | | $ 41,339 | | | $ 52,090 | |
| Operating expenses | | | 461 | | | 914 | | | 5,845 | | | 9,701 | | | 16,921 | | | 23,742 | |
| Net operating (loss) income | | | (281 | ) | | (669 | ) | | 6,087 | | | 19,281 | | | 24,418 | | | 28,348 | |
| Depreciation | | | 185 | | | 315 | | | 4,704 | | | 7,276 | | | 12,480 | | | 10,772 | |
| Other | | | - | | | - | | | 1,538 | | | 12 | | | 1,550 | | | 156 | |
| Operating (loss) income | | | (466 | ) | | (984 | ) | | (155 | ) | | 11,993 | | | 10,388 | | | 17,420 | |
| Interest and other income | | | 38 | | | 9 | | | 45 | | | 235 | | | 327 | | | 312 | |
| Interest: | | | | | | | | | | | | | |
| | Expense incurred, net | | | - | | | (68 | ) | | (3,879 | ) | | (10,055 | ) | | (14,002 | ) | | (18,722 | ) |
| | Amortization of deferred financing costs | | | - | | | (5 | ) | | (63 | ) | | (66 | ) | | (134 | ) | | (308 | ) |
| Income and other tax (expense) benefit | | | (112 | ) | | - | | | - | | | (46 | ) | | (158 | ) | | (214 | ) |
| Net (loss) income | | | $ (540 | ) | | $ (1,048 | ) | | $ (4,052 | ) | | $ 2,061 | | | $ (3,579 | ) | | $ (1,512 | ) |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Debt - Secured (2): | | | | | | | | | | | | | |
| | EQR Ownership (3) | | | $ 432,582 | | | $ 71,984 | | | $ 141,206 | | | $ 289,058 | | | $ 934,830 | | | $ 121,200 | |
| | Minority Ownership | | | - | �� | | - | | | - | | | 13,321 | | | 13,321 | | | 363,600 | |
| Total (at 100%) | | | $ 432,582 | | | $ 71,984 | | | $ 141,206 | | | $ 302,379 | | | $ 948,151 | | | $ 484,800 | |
(1) Project and unit counts exclude all uncompleted development projects until those projects are substantially completed. See the Consolidated Development Projects schedule for more detail.
(2) All debt is non-recourse to the Company with the exception of $76.8 million in mortgage bonds on various development projects.
(3) Represents the Company's current economic ownership interest.
(4) Projects included here are substantially complete. However, they may still require additional exterior and interior work for all units to be available for leasing.
EQUITY RESIDENTIAL |
| | | | | | | | | | | | | | | | | | | | |
Consolidated Development Projects as of June 30, 2008 |
| (Amounts in thousands except for project and unit amounts) |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Projects | | Location | | No. of
Units | | Total Capital
Cost (1) | | Total Book Value
To Date | | Total Book
Value Not
Placed in
Service | | Total Debt | | | Percentage
Completed | | Percentage
Leased | | Percentage
Occupied | | Estimated
Completion
Date | | Estimated
Stabilization Date |
| | | | | | | | | | | | | | | | | | | | | | | |
| Projects Under Development - Wholly Owned: | | | | | | | | | | | | | | | | | | | | | | | |
| Key Isle at Windermere II | | Orlando, FL | | 165 | | $ 29,058 | | $ 26,829 | | $ 26,829 | | $ - | | | 99% | | 55% | | 34% | | Q3 2008 | | Q1 2009 |
| Mosaic at Metro (4) | | Hyattsville, MD | | 260 | | 61,483 | | 33,916 | | 33,916 | | 26,589 | | | 60% | | 4% | | - | | Q4 2008 | | Q1 2010 |
| 70 Greene (a.k.a. 77 Hudson) | | Jersey City, NJ | | 480 | | 269,958 | | 148,824 | | 148,824 | | - | | | 60% | | - | | - | | Q4 2009 | | Q1 2011 |
| Reserve at Town Center II | | Mill Creek, WA | | 100 | | 24,464 | | 6,029 | | 6,029 | | - | | | 6% | | - | | - | | Q2 2010 | | Q3 2010 |
| Redmond Way | | Redmond, WA | | 250 | | 84,382 | | 18,572 | | 18,572 | | - | | | 1% | | - | | - | | Q1 2011 | | Q1 2012 |
| | | | | | | | | | | | | | | | | | | | | | | |
| Projects Under Development - Wholly Owned | | | | 1,255 | | 469,345 | | 234,170 | | 234,170 | | 26,589 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Projects Under Development - Partially Owned: | | | | | | | | | | | | | | | | | | | | | | | |
| Veridian (a.k.a. Silver Spring) | | Silver Spring, MD | | 457 | | 147,454 | | 117,255 | | 117,255 | | 79,111 | | | 82% | | 2% | | - | | Q4 2008 | | Q3 2010 |
| Third Square (a.k.a. 303 Third Street) | | Cambridge, MA | | 482 | | 248,307 | | 200,415 | | 200,415 | | 112,524 | | | 86% | | 9% | | - | | Q4 2008 | | Q1 2010 |
| Montclair Metro | | Montclair, NJ | | 163 | | 48,730 | | 21,953 | | 21,953 | | 7,075 | | | 40% | | - | | - | | Q2 2009 | | Q1 2010 |
| Red Road Commons | | South Miami, FL | | 404 | | 128,816 | | 64,445 | | 64,445 | | 17,388 | | | 35% | | - | | - | | Q1 2010 | | Q3 2011 |
| 111 Lawrence Street | | Brooklyn, NY | | 492 | | 283,968 | | 67,324 | | 67,324 | | - | | | 9% | | - | | - | | Q2 2010 | | Q3 2011 |
| Westgate | | Pasadena, CA | | 480 | | 170,558 | | 57,765 | | 57,765 | | 163,160 | (2) | | 9% | | - | | - | | Q2 2011 | | Q2 2012 |
| | | | | | | | | | | | | | | | | | | | | | | |
| Projects Under Development - Partially Owned | | | | 2,478 | | 1,027,833 | | 529,157 | | 529,157 | | 379,258 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Projects Under Development | | | | 3,733 | | 1,497,178 | | 763,327 | | 763,327 | | 405,847 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Land Held for Development | | | | N/A | | - | | 358,955 | | 358,955 | | 53,324 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Land/Projects Held for and/or Under Development | | | | 3,733 | | 1,497,178 | | 1,122,282 | | 1,122,282 | | 459,171 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Completed Not Stabilized - Wholly Owned (3): | | | | | | | | | | | | | | | | | | | | | | | |
| Bella Vista III | | Woodland Hills, CA | | 264 | | 73,337 | | 73,211 | | - | | - | | | | | 97% | | 93% | | Completed | | Q3 2008 |
| West End Apartments (a.k.a. Emerson/CRP II) | | Boston, MA | | 310 | | 167,952 | | 155,778 | | - | | - | | | | | 74% | | 60% | | Completed | | Q1 2009 |
| Highland Glen II | | Westwood, MA | | 102 | | 19,872 | | 19,835 | | - | | - | | | | | 69% | | 66% | | Completed | | Q1 2009 |
| Crowntree Lakes | | Orlando, FL | | 352 | | 58,628 | | 56,035 | | - | | - | | | | | 40% | | 24% | | Completed | | Q4 2009 |
| Reunion at Redmond Ridge | | Redmond, WA | | 321 | | 55,457 | | 52,223 | | - | | - | | | | | 19% | | 15% | | Completed | | Q3 2010 |
| | | | | | | | | | | | | | | | | | | | | | | |
| Projects Completed Not Stabilized - Wholly Owned | | | | 1,349 | | 375,246 | | 357,082 | | - | | - | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Completed Not Stabilized - Partially Owned (3): | | | | | | | | | | | | | | | | | | | | | | | |
| Alta Pacific | | Irvine, CA | | 132 | | 47,554 | | 45,918 | | - | | 28,260 | (2) | | | | 54% | | 40% | | Completed | | Q1 2009 |
| 1401 South State (a.k.a. City Lofts) | | Chicago, IL | | 278 | | 71,109 | | 64,908 | | - | | 43,724 | | | | | 35% | | 20% | | Completed | | Q2 2009 |
| | | | | | | | | | | | | | | | | | | | | | | |
| Projects Completed Not Stabilized - Partially Owned | | | | 410 | | 118,663 | | 110,826 | | - | | 71,984 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Projects Completed Not Stabilized | | | | 1,759 | | 493,909 | | 467,908 | | - | | 71,984 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total Projects | | | | 5,492 | | $1,991,087 | | $ 1,590,190 | | $1,122,282 | | $ 531,155 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Total Capital | | Q2 2008 | | | | | | |
| NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS | | | | | | | | | | | | | | | Cost (1) | | NOI | | | | | | |
| Projects Under Development | | | | | | | | | | | | | | | $ 1,497,178 | | $ (66) | | | | | | |
| Completed Not Stabilized | | | | | | | | | | | | | | | 493,909 | | 844 | | | | | | |
| Completed and Stabilized During the Quarter | | | | | | | | | | | | | | | - | | - | | | | | | |
| Total Development/Newly Stabilized NOI Contribution | | | | | | | | | | | | | | | $ 1,991,087 | | $ 778 | | | | | | |
(1) Total capital cost represents estimated development cost for projects under development and all capitalized costs incurred to date plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP.
(2) Debt is primarily tax-exempt bonds that are entirely outstanding, with $117.6 million held in escrow by the lender and released as draw requests are made. This escrowed amount is classified as "Deposits - restricted" in the consolidated balance sheets at 6/30/08.
(3) Properties included here are substantially complete. However, they may still require additional exterior and interior work for all units to be available for leasing.
(4) Project was acquired on 6/25/08. The previous owner commenced development in the fourth quarter of 2005.
EQUITY RESIDENTIAL |
| |
| Consolidated Condominium Conversion Projects as of June 30, 2008 |
| (Amounts in thousands except for project and unit amounts) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Units | | 2008 YTD Activity | | Q2 2008 |
| | | | | | | | | | | | | Available for Sale | | | | | | | | | | | | |
| Projects | | Location | | Project Start
Date (1) | | Estimated
Close Out
Date | | Total | | Units
Closed | | Sold Not
Closed | | Available | | Units
Closed | | Sales Price | | FFO Incremental
Gain on Sale (2) | | Units
Closed | | Sales Price | | FFO Incremental
Gain on Sale (2) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
For Sale | | | | | | | | | | | | | | | | | | | | | | | | | | |
| South Palm Place | | Tamarac, FL | | Q2 2005 | | Q3 2008 | | 208 | | 207 | | - | | 1 | | 5 | | $746 | | $(325 | ) | | 4 | | $563 | | $(302 | ) |
| Park Bloomingdale | | Bloomingdale, IL | | Q2 2006 | | Q4 2008 | | 250 | | 209 | | 9 | | 32 | | 29 | | 5,109 | | 14 | | | 19 | | 3,338 | | 57 | |
| Belle Arts | | Bellevue, WA | | Q4 2006 | | Q4 2008 | | 128 | | 127 | | - | | 1 | | - | | - | | 1 | | | - | | - | | - | |
| Arrington Place | | Issaquah, WA | | Q1 2007 | | Q2 2009 | | 130 | | 63 | | 3 | | 64 | | 18 | | 4,754 | | 316 | | | 5 | | 1,269 | | 57 | |
| The Cleo (The Alexandria) | | Los Angeles, CA | | Q3 2007 | | Q2 2009 | | 104 | | - | | 31 | | 73 | | - | | - | | - | | | - | | - | | - | |
| Verde (Mission Verde) | | San Jose, CA | | Q3 2007 | | Q3 2009 | | 108 | | - | | 22 | | 86 | | - | | - | | - | | | - | | - | | - | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | 928 | | 606 | | 65 | | 257 | | 52 | | 10,609 | | 6 | | | 28 | | 5,170 | | (188 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Closed Out | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Chantecleer Lakes | | Naperville, IL | | Q4 2005 | | Q1 2008 | | 304 | | 304 | | - | | - | | 2 | | 326 | | 29 | | | - | | - | | (5 | ) |
| Pacific Cove | | Playa Del Ray, CA | | Q3 2006 | | Q1 2008 | | 80 | | 80 | | - | | - | | 1 | | 520 | | (61 | ) | | - | | - | | (47 | ) |
| Milano Terrace | | Scottsdale, AZ | | Q2 2005 | | Q2 2008 | | 224 | | 224 | | - | | - | | 18 | | 4,043 | | 230 | | | 4 | | 883 | | 22 | |
| Projects closed out prior to 2008 (2) | | | | | | | | 4,289 | | 4,289 | | - | | - | | - | | - | | (3,294 | ) | | - | | - | | (3,238 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | 4,897 | | 4,897 | | - | | - | | 21 | | 4,889 | | (3,096 | ) | | 4 | | 883 | | (3,268 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Totals | | | | | | 6 | | 5,825 | | 5,503 | | 65 | | 257 | | 73 | | $15,498 | | $(3,090 | ) | | 32 | | $6,053 | | $(3,456 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net incremental loss on sales of condominium units (2) | | | | | | | | | | | | | | | | | | | | $(3,090 | ) | | | | | | $(3,456 | ) |
| Corporate overhead (property management expense) | | | | | | | | | | | | | | | | | | | | (1,412 | ) | | | | | | (676 | ) |
| Other expenses | | | | | | | | | | | | | | | | | | | | (255 | ) | | | | | | (51 | ) |
| Discontinued operating loss of active conversions | | | | | | | | | | | | | | | | | | | | (2,497 | ) | | | | | | (1,185 | ) |
| Income of halted conversions (3) | | | | | | | | | | | | | | | | | | | | 709 | | | | | | | 453 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Pre-tax net loss - Condominium division (4) | | | | | | | | | | | | | | | | | | | | $(6,545 | ) | | | | | | $(4,915 | ) |
(1)Project start date represents the date that each respective property was acquired by the taxable REIT subsidiary and included in discontinued operations.
(2) Amounts are net of $173,000 and $71,000 in reserves for potential homeowners disputes for the six months and quarter ended June 30, 2008, respectively. The company recorded an additional reserve of $3,197,000 on various projects closed out prior to 2008.
(3) Halted conversions includes the results of Sheridan Lake Club (Dania Beach Club), Sage, The Martine (Crosspointe) and The Hamilton.
(4) Excludes interest income, interest expense and certain other items specific to condominium conversion projects that ultimately eliminate in consolidation.
Also excludes depreciation expense on halted conversions (active conversions are not depreciated) and excludes income and other taxes on condominium sales and operations, if any.
EQUITY RESIDENTIAL |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Maintenance Expenses and Capitalized Improvements to Real Estate |
| For the Six Months Ended June 30, 2008 |
| (Amounts in thousands except for unit and per unit amounts) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Maintenance Expenses | | Capitalized Improvements to Real Estate | | Total Expenditures |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Total | | | | Avg. | | | | Avg. | | | | Avg. | | | | Avg. | | Building | | Avg. | | | | Avg. | | | | Avg. |
| | | Units | | Expense | | Per | | Payroll | | Per | | | | Per | | Replacements | Per | | Improvements | Per | | | | Per | | | | Per |
| | | (1) | | (2) | | Unit | | (3) | | Unit | | Total | | Unit | | (4) | | Unit | | (5) | | Unit | | Total | | Unit | | Grand Total | Unit |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Established Properties (6) | | 109,648 | | | $ | 41,756 | | | $ | 381 | | $ | 37,485 | | | $ | 342 | | $ | 79,241 | | $ | 723 | | $ | 18,999 | | | $ | 173 | | $ | 28,510 | | | $ | 260 | | $ | 47,509 | | $ | 433 | (9 | ) | $ | 126,750 | | $ | 1,156 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| New Acquisition Properties (7) | | 20,378 | | | | 7,290 | | | | 410 | | | 6,476 | | | | 365 | | | 13,766 | | | 775 | | | 2,421 | | | | 136 | | | 9,848 | | | | 554 | | | 12,269 | | | 690 | | | 26,035 | | | 1,465 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other (8) | | 6,496 | | | | 4,828 | | | | | | 4,004 | | | | | | 8,832 | | | | | 20,637 | | | | | | 5,966 | | | | | | 26,603 | | | | | 35,435 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | 136,522 | | | $ | 53,874 | | | | | $ | 47,965 | | | | | $ | 101,839 | | | | $ | 42,057 | | | | | $ | 44,324 | | | | | $ | 86,381 | | | | $ | 188,220 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| (1) | | Total Units - Excludes 10,446 unconsolidated units and 3,731 military housing (fee managed) units, for which maintenance expenses and capitalized improvements to real estate are self-funded and do not consolidate into the Company's results. |
| | |
| (2) | | Maintenance Expenses - Includes general maintenance costs, unit turnover costs including interior painting, regularly scheduled landscaping and tree trimming costs, security, exterminating, fire protection, snow and ice removal, elevator repairs, and other miscellaneous building repair costs. |
| | |
| (3) | | Maintenance Payroll - Includes employee costs for maintenance, cleaning, housekeeping, and landscaping. |
| | |
| (4) | | Replacements - Includes new expenditures inside the units such as appliances, mechanical equipment, fixtures and flooring, including carpeting. |
| | |
| (5) | | Building Improvements - Includes roof replacement, paving, amenities and common areas, building mechanical equipment systems, exterior painting and siding, major landscaping, vehicles and office and maintenance equipment. |
| | |
| (6) | | Established Properties - Wholly Owned Properties acquired prior to January 1, 2006. |
| | |
| (7) | | New Acquisition Properties - Wholly Owned Properties acquired during 2006, 2007 and 2008. Per unit amounts are based on a weighted average of 17,766 units. |
| | |
| (8) | | Other - Includes properties either partially owned or sold during the period, commercial space, corporate housing and condominium conversions. Also includes $16.4 million included in replacements spent on various assets related to major renovations and repositioning of these assets. |
| | |
| (9) | | For 2008, the Company estimates an annual stabilized run rate of approximately $1,100 per unit of capital expenditures for its established properties. |
| |
EQUITY RESIDENTIAL |
| |
| Discontinued Operations |
| (Amounts in thousands) |
| | | | | | | | | | |
| | | Six Months Ended | | Quarter Ended |
| | | June 30, | | June 30, |
| | | 2008 | | 2007 | | 2008 | | 2007 |
| | | | | | | | | |
| REVENUES | | | | | | | | |
| Rental income | | $ | 16,071 | | | $ | 111,894 | | | $ | 5,357 | | | $ | 48,777 | |
| Total revenues | | | 16,071 | | | | 111,894 | | | | 5,357 | | | | 48,777 | |
| | | | | | | | | |
| EXPENSES (1) | | | | | | | | |
| Property and maintenance | | | 8,705 | | | | 38,438 | | | | 3,197 | | | | 17,759 | |
| Real estate taxes and insurance | | | 1,880 | | | | 14,257 | | | | 645 | | | | 5,840 | |
| Property management | | | 18 | | | | 264 | | | | 44 | | | | 61 | |
| Depreciation | | | 3,569 | | | | 30,800 | | | | 1,109 | | | | 13,611 | |
| General and administrative | | | 17 | | | | 10 | | | | 14 | | | | 8 | |
| Impairment | | | 56 | | | | - | | | | - | | | | - | |
| Total expenses | | | 14,245 | | | | 83,769 | | | | 5,009 | | | | 37,279 | |
| | | | | | | | | |
| Discontinued operating income | | | 1,826 | | | | 28,125 | | | | 348 | | | | 11,498 | |
| | | | | | | | | |
| Interest and other income | | | 126 | | | | 142 | | | | 143 | | | | 49 | |
| Interest (2): | | | | | | | | |
| Expense incurred, net | | | (27 | ) | | | (2,527 | ) | | | (5 | ) | | | (1,217 | ) |
| Amortization of deferred financing costs | | | - | | | | (1,652 | ) | | | - | | | | (1,309 | ) |
| Income and other tax benefit (expense) | | | 659 | | | | (182 | ) | | | 459 | | | | (3 | ) |
| | | | | | | | | |
| Discontinued operations | | | 2,584 | | | | 23,906 | | | | 945 | | | | 9,018 | |
| Minority Interests - Operating Partnership | | | (162 | ) | | | (1,487 | ) | | | (58 | ) | | | (560 | ) |
| Discontinued operations, net of minority interests | | | 2,422 | | | | 22,419 | | | | 887 | | | | 8,458 | |
| | | | | | | | | |
| Net gain on sales of discontinued operations | | | 214,797 | | | | 385,503 | | | | 92,280 | | | | 273,557 | |
| Minority Interests - Operating Partnership | | | (13,468 | ) | | | (23,978 | ) | | | (5,712 | ) | | | (16,988 | ) |
| Gain on sales of discontinued operations, net of minority interests | | 201,329 | | | | 361,525 | | | | 86,568 | | | | 256,569 | |
| | | | | | | | | |
| Discontinued operations, net of minority interests | | $ | 203,751 | | | $ | 383,944 | | | $ | 87,455 | | | $ | 265,027 | |
| | |
| (1) | | Includes expenses paid in the current period for properties sold or held for sale in prior periods related to the Company’s period of ownership. |
| | |
| (2) | | Includes only interest expense specific to secured mortgage notes payable for properties sold and/or held for sale. |
| |
EQUITY RESIDENTIAL |
| |
| Additional Reconciliations and Non-Comparable Items |
| (Amounts in thousands except per share data) |
| (All per share data is diluted) |
| | | | | | | | | | | | |
| FFO Reconciliations |
| | | | | | | | | | | | |
| | | | | | | | | | FFO Reconciliations |
| | | | | | | | | | Guidance Midpoint Q2 |
| | | | | | | | | | 2008 to Actual Q2 2008 |
| | | | | | | | | | Amounts | | Per Share |
| | | | | | | | | | | | |
| Guidance midpoint Q2 2008 FFO - Diluted (1) (2) | | | | | | | | | | $ | 183,886 | | | $ | 0.633 | |
| Property NOI (including reserve adjustments) | | | | | | | | | | | 8,765 | | | | 0.030 | |
| Insurance/litigation settlement proceeds | | | | | | | | | | | 1,175 | | | | 0.004 | |
| Net incremental (loss) on sales of condominium units | | | | | | | | | | | (4,302 | ) | | | (0.015 | ) |
| Other | | | | | | | | | | | (2,031 | ) | | | (0.007 | ) |
| | | | | | | | | | | | |
| Actual Q2 2008 FFO - Diluted (1) (2) | | | | | | | | | | $ | 187,493 | | | $ | 0.645 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Non-Comparable Items (3) |
| | | | | | | | | | | | |
| | Six Months Ended June 30, | | Quarter Ended June 30, |
| | 2008 | | 2007 | | Variance | | 2008 | | 2007 | | Variance |
| Property insurance reserve adjustments (real estate taxes and insurance expense) | | $ | 2,042 | | | $ | (656 | ) | | $ | 2,698 | | | $ | 2,036 | | | $ | 966 | | | $ | 1,070 | |
| Workers compensation reserve adjustments (property management expense) | | | 329 | | | | 173 | | | | 156 | | | | 113 | | | | (40 | ) | | | 153 | |
| Medical reserve adjustments (property management expense) | | | 454 | | | | - | | | | 454 | | | | 454 | | | | - | | | | 454 | |
| Severance charges: | | | | | | | | | | | | |
| Property management expense | | | (193 | ) | | | (117 | ) | | | (76 | ) | | | (17 | ) | | | (117 | ) | | | 100 | |
| General and administrative expense | | | (2,162 | ) | | | - | | | | (2,162 | ) | | | (465 | ) | | | - | | | | (465 | ) |
| Florida litigation reserve reduction (general and administrative expense) | | | - | | | | 1,667 | | | | (1,667 | ) | | | - | | | | 42 | | | | (42 | ) |
| Performance shares (general and administrative expense) | | | (270 | ) | | | (219 | ) | | | (51 | ) | | | (91 | ) | | | (179 | ) | | | 88 | |
| Impairment (including discontinued operations) | | | (759 | ) | | | (394 | ) | | | (365 | ) | | | (584 | ) | | | (158 | ) | | | (426 | ) |
| Insurance/litigation settlement proceeds (interest and other income) | | | 1,725 | | | | - | | | | 1,725 | | | | 1,175 | | | | - | | | | 1,175 | |
| Forfeited deposits (interest and other income) | | | 488 | | | | 40 | | | | 448 | | | | 215 | | | | 17 | | | | 198 | |
| Debt extinguishment costs (interest): | | | | | | | | | | | | |
| Prepayment penalties | | | - | | | | (3,041 | ) | | | 3,041 | | | | - | | | | (2,900 | ) | | | 2,900 | |
| Write-off of unamortized deferred financing costs | | | (6 | ) | | | (3,828 | ) | | | 3,822 | | | | - | | | | (3,110 | ) | | | 3,110 | |
| Net gain on sales of land parcels | | | - | | | | 4,516 | | | | (4,516 | ) | | | - | | | | 4,516 | | | | (4,516 | ) |
| Net incremental (loss) gain on sales of condominium units | | | (3,090 | ) | | | 13,587 | | | | (16,677 | ) | | | (3,456 | ) | | | 8,903 | | | | (12,359 | ) |
| Income and other tax (expense) benefit - Condo sales | | | 727 | | | | 7 | | | | 720 | | | | 414 | | | | (1 | ) | | | 415 | |
| Net non-comparable items (3) | | $ | (715 | ) | | $ | 11,735 | | | $ | (12,450 | ) | | $ | (206 | ) | | $ | 7,939 | | | $ | (8,145 | ) |
| | | | | | | | | | | | |
| | | | | | |
| Note: See page 26 for definitions, footnotes and reconciliations of EPS to FFO. | | | | | | |
| |
EQUITY RESIDENTIAL |
| |
| The earnings guidance/projections provided below are based on current expectations and are forward-looking. |
| | | | |
2008 Earnings Guidance (per share diluted) |
| | | | |
| | Q3 2008 | | 2008 |
| | | | |
| Expected FFO (1) (2) | | $0.61 to $0.65 | | $2.45 to $2.55 |
| | | | |
| | | | |
2008 Same Store Assumptions |
| Physical occupancy | | | | 94.7% |
| Revenue change | | | | 3.00% to 3.50% |
| Expense change | | | | 2.25% to 2.50% |
| NOI change | | | | 3.50% to 4.00% |
| (Note: 25 basis point change in NOI percentage = $0.01 per share change in EPS/FFO) |
| | | | |
2008 Transaction Assumptions |
| Rental acquisitions | | | | $0.75 billion |
| Rental dispositions | | | | $1.0 billion |
| Capitalization rate spread | | | | 75 basis points |
| | | | |
2008 Debt Assumptions |
| Weighted average debt outstanding | | | | $9.8 billion to $10.0 billion |
| Weighted average interest rate (reduced for capitalized interest and | | |
| including prepayment penalties) | | 4.84% |
| Interest expense (including discontinued operations) | | | | $475.0 million to $485.0 million |
| | | | |
2008 Condominium Conversion Assumptions |
| Net incremental (loss) gain on sales of condominium units | | $(2.5) million to $0.0 million |
| Pre-tax net (loss) - Condominium division (after overhead/operations) | | $(10.0) million to $(7.0) million |
| Effective tax rate | | | | 0% |
| Number of condominium unit sales | | | | 125 units to 185 units |
| | | | |
2008 Other Guidance Assumptions |
| General and administrative expense | | | | $46.0 million to $48.0 million |
| Interest and other income | | | | $12.5 million to $14.5 million |
| Income and other tax expense | | | | $5.0 million to $6.0 million |
| Net gain on sales of land parcels | | | | No amounts budgeted |
| Preferred share redemptions | | | | No amounts budgeted |
| Weighted average Common Shares and OP Units - Diluted | | 290.9 million |
| | | | |
| | | | |
| Note: See page 26 for definitions, footnotes and reconciliations of EPS to FFO. |
| |
EQUITY RESIDENTIAL |
| |
| The earnings guidance/projections provided below are based on current expectations and are forward-looking. |
| | | | | | | | |
| | | | | | | | |
| Reconciliations of EPS to FFO for Pages 24 and 25 |
| | | | | | | | |
| (Amounts in thousands except per share data) |
| (All per share data is diluted) |
| | | | | | | | |
| | | | | | Expected | | Expected |
| | Expected Q2 2008 | | Q3 2008 | | 2008 |
| | Amounts | | Per Share | | Per Share | | Per Share |
| | | | | | | | |
| Expected Earnings - Diluted (4) | | $ | 156,749 | | | $ | 0.539 | | | $0.59 to $0.63 | | $2.05 to $2.15 |
| Add: Expected depreciation expense | | | 145,827 | | | | 0.503 | | | 0.50 | | | 2.00 | |
| Less: Expected net gain on sales (4) | | | (118,690 | ) | | | (0.409 | ) | | (0.48 | ) | | (1.60 | ) |
| | | | | | | | |
| Expected FFO - Diluted (1) (2) | | $ | 183,886 | | | $ | 0.633 | | | $0.61 to $0.65 | | $2.45 to $2.55 |
| |
| Definitions and Footnotes for Pages 24 and 25 |
| | |
| (1) | | The National Association of Real Estate Investment Trusts ("NAREIT") defines funds from operations ("FFO") (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States ("GAAP")), excluding gains (or losses) from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Company commences the conversion of units to condominiums, it simultaneously discontinues depreciation of such property. FFO available to Common Shares and OP Units is calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares in accordance with accounting principles generally accepted in the United States. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the "Minority Interests - Operating Partnership". Subject to certain restrictions, the Minority Interests - Operating Partnership may exchange their OP Units for EQR Common Shares on a one-for-one basis. |
| | |
| (2) | | The Company believes that FFO and FFO available to Common Shares and OP Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and OP Units can help compare the operating performance of a company's real estate between periods or as compared to different companies. FFO and FFO available to Common Shares and OP Units do not represent net income, net income available to Common Shares or net cash flows from operating activities in accordance with GAAP. Therefore, FFO and FFO available to Common Shares and OP Units should not be exclusively considered as alternatives to net income, net income available to Common Shares or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company's calculation of FFO and FFO available to Common Shares and OP Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies. |
| | |
| (3) | | Non-comparable items are those items included in FFO that by their nature are not comparable from period to period, such as net incremental gain on sales of condominium units, impairment charges, debt extinguishment costs and redemption premiums on Preferred Shares/Preference Interests. |
| | |
| (4) | | Earnings represents net income per share calculated in accordance with accounting principles generally accepted in the United States. Expected earnings is calculated on a basis consistent with actual earnings. Due to the uncertain timing and extent of property dispositions and the resulting gains/losses on sales, actual earnings could differ materially from expected earnings. |
CONTACT:
Equity Residential
Marty McKenna
(312) 928-1901
