Exhibit 99.1
Equity Residential Reports Third Quarter 2011 Results
Quarterly Same Store Revenue Increases 5.5%
Quarterly Net Operating Income Increases 9.0%
CHICAGO--(BUSINESS WIRE)--October 26, 2011--Equity Residential (NYSE: EQR) today reported results for the quarter and nine months ended September 30, 2011. All per share results are reported on a fully-diluted basis.
“We are extremely pleased with our continued strong operating performance which delivered same store NOI growth of 9.0% in the third quarter,” said David J. Neithercut, Equity Residential’s President and CEO. “Fundamentals continue to be positive and we remain confident that increasing demand for apartment living combined with limited new supply will produce strong results next year and for years to come despite concerns about weakening economic growth.”
Third Quarter 2011
FFO (Funds from Operations), as defined by the National Association of Real Estate Investment Trusts (NAREIT), for the third quarter of 2011 was $0.63 per share compared to $0.55 per share in the third quarter of 2010.
For the third quarter of 2011, the company reported Normalized FFO of $0.62 per share compared to $0.57 per share in the same period of 2010. The difference is due primarily to:
- the positive impact of $0.08 per share from higher same store net operating income (NOI) and $0.02 per share from higher lease-up NOI;
- the negative impact of $0.08 per share from 2010 and 2011 transaction activity and timing; and
- the positive impact of approximately $0.03 per share from lower interest expense and 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. A reconciliation and definition of Normalized FFO are provided on pages 6 and 26 of this release and the company has included guidance for Normalized FFO on page 25 of this release.
For the third quarter of 2011, the company reported earnings of $0.35 per share compared to $0.09 per share in the third quarter of 2010. The difference is due primarily to higher gains from property sales in 2011.
Nine Months Ended September 30, 2011
FFO for the nine months ended September 30, 2011 was $1.77 per share compared to $1.63 per share in the same period of 2010.
For the nine months ended September 30, 2011, the company reported Normalized FFO of $1.78 per share compared to $1.66 per share in the same period of 2010.
For the nine months ended September 30, 2011, the company reported earnings of $2.62 per share compared to $0.30 per share in the same period of 2010.
Same Store Results
On a same store third quarter to third quarter comparison, which includes 104,922 apartment units, revenues increased 5.5%, expenses decreased 0.1% and NOI increased 9.0%.
On a same store nine-month to nine-month comparison, which includes 102,129 apartment units, revenues increased 4.8%, expenses decreased 0.3% and NOI increased 7.9%.
Acquisitions/Dispositions
During the third quarter of 2011, the company acquired two properties with a total of 365 apartment units for an aggregate purchase price of $113.0 million at a weighted average capitalization (cap) rate of 4.7% and a newly constructed, unoccupied asset currently in lease up for $39.5 million. Also during the quarter, the company acquired a land parcel located in Southern California for $5.6 million and entered into a long-term ground lease on a land parcel in New York City, both for potential development.
During the quarter, the company sold seven properties, with a total of 2,261 apartment units for an aggregate sale price of $210.1 million at a weighted average cap rate of 7.2% generating an unlevered internal rate of return (IRR), inclusive of management costs, of 8.2%.
During the first nine months of 2011, the company acquired ten properties, consisting of 2,529 apartment units, for an aggregate purchase price of $701.7 million. The weighted average cap rate on these acquisitions, excluding the lease up asset described above, is 5.1%. The company also acquired a commercial building adjacent to its Harbor Steps apartment property in downtown Seattle for a purchase price of $11.8 million, for potential redevelopment, two land parcels for $18.5 million, and entered into the long-term ground lease for potential development described above.
Also during the first nine months of 2011, the company sold 45 properties with a total of 13,528 apartment units for an aggregate sale price of $1.38 billion at a weighted average cap rate of 6.5% generating an unlevered IRR, inclusive of management costs, of 11.0%.
Unsecured Revolving Credit Facility
On July 13, 2011, the company entered into a new $1.25 billion unsecured revolving credit agreement with a group of 23 financial institutions. The new facility matures in July 2014, subject to a one-year extension at the company’s option. The interest rate on advances under the new facility will generally be LIBOR plus a spread (currently 1.15%) and the company pays an annual facility fee of 0.2%. Both the spread and the facility fee are dependent on the credit rating of the company’s long-term debt. This facility replaced the company’s existing facility which was scheduled to mature in February 2012.
Redemption of Notes
On August 18, 2011, the company redeemed its 3.85% Exchangeable Senior Notes due 2026, of which $482.5 million were outstanding. The notes were redeemed at par and no premium was paid. The redemption of these notes had been planned since the beginning of the year and the impact of this redemption was included in the company’s 2011 Normalized FFO guidance.
At-The-Market (ATM) Share Offering Program
The company has not issued any shares under this program since January 13, 2011 and currently has 10 million shares available for future issuance under this program. The company would use proceeds from share sales primarily to fund its investment activity, including development, and to fund debt repayment.
Fourth Quarter 2011 Guidance
The company has established a Normalized FFO guidance range of $0.63 to $0.67 per share for the fourth quarter of 2011. The difference between the company’s third quarter 2011 Normalized FFO of $0.62 per share and the midpoint of the fourth quarter guidance range is primarily due to:
- the positive impact of $0.02 per share from higher same store and lease-up NOI;
- the positive impact of $0.01 per share from 2010 and 2011 transaction activity and timing; and
- the positive impact of $0.01 per share from lower interest expense.
Full Year 2011 Guidance
The company has revised its guidance for its full year 2011 same store operating performance, transactions and Normalized FFO results as well as other items listed on page 25 of this release. The changes to the full year same store, transactions and Normalized FFO guidance are listed below:
Previous | Revised | ||||
| Same store: | |||||
| Physical occupancy | 95.2% | 95.2% | |||
| Revenue change | 4.8% to 5.1% | 5.0% | |||
| Expense change | 0.0% to 1.0% | 0.5% | |||
| NOI change | 7.0% to 8.0% | 7.7% | |||
| Acquisitions: | $1.15 billion | $1.25 billion | |||
| Dispositions: | $1.5 billion | $1.4 billion | |||
| Cap Rate Spread: | 150 basis points | 130 basis points | |||
| Normalized FFO per share: | $2.40 to $2.45 | $2.41 to $2.45 | |||
Fourth Quarter 2011 Conference Call
Equity Residential expects to announce fourth quarter 2011 results on Wednesday, February 1, 2012 and host a conference call to discuss those results at 10:00 a.m. CT on Thursday, February 2, 2012.
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 417 properties located in 15 states and the District of Columbia, consisting of 119,011 apartment units. For more information on Equity Residential, please visit our website at www.equityapartments.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 and subsequent periodic reports filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityapartments.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 will take place tomorrow, Thursday, October 27, at 10:00 a.m. Central. Please visit the Investor Information section of the company’s web site at www.equityapartments.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) | ||||||||||||||||
Nine Months Ended | Quarter Ended | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| REVENUES | ||||||||||||||||
| Rental income | $ | 1,470,398 | $ | 1,311,377 | $ | 509,030 | $ | 451,832 | ||||||||
| Fee and asset management | 6,682 | 7,596 | 2,928 | 2,128 | ||||||||||||
| Total revenues | 1,477,080 | 1,318,973 | 511,958 | 453,960 | ||||||||||||
| EXPENSES | ||||||||||||||||
| Property and maintenance | 314,768 | 303,916 | 106,635 | 104,259 | ||||||||||||
| Real estate taxes and insurance | 168,056 | 160,307 | 59,083 | 56,205 | ||||||||||||
| Property management | 62,389 | 59,770 | 19,241 | 19,014 | ||||||||||||
| Fee and asset management | 3,207 | 4,242 | 1,250 | 679 | ||||||||||||
| Depreciation | 482,039 | 457,822 | 164,552 | 158,318 | ||||||||||||
| General and administrative | 32,462 | 31,029 | 10,121 | 10,221 | ||||||||||||
| Total expenses | 1,062,921 | 1,017,086 | 360,882 | 348,696 | ||||||||||||
| Operating income | 414,159 | 301,887 | 151,076 | 105,264 | ||||||||||||
| Interest and other income | 6,608 | 5,045 | 5,317 | 201 | ||||||||||||
| Other expenses | (9,318 | ) | (9,513 | ) | (2,528 | ) | (3,487 | ) | ||||||||
| Interest: | ||||||||||||||||
| Expense incurred, net | (354,960 | ) | (348,279 | ) | (113,370 | ) | (121,116 | ) | ||||||||
| Amortization of deferred financing costs | (12,129 | ) | (7,729 | ) | (4,721 | ) | (2,437 | ) | ||||||||
Income (loss) before income and other taxes, (loss) income from investments in unconsolidated entities, net gain (loss) on sales of unconsolidated entities and land parcels and discontinued operations | 44,360 | (58,589 | ) | 35,774 | (21,575 | ) | ||||||||||
| Income and other tax (expense) benefit | (669 | ) | (283 | ) | (283 | ) | (291 | ) | ||||||||
| (Loss) income from investments in unconsolidated entities | - | (735 | ) | - | 188 | |||||||||||
| Net gain on sales of unconsolidated entities | - | 28,101 | - | 22,544 | ||||||||||||
| Net gain (loss) on sales of land parcels | 4,217 | (1,161 | ) | - | (1,161 | ) | ||||||||||
| Income (loss) from continuing operations | 47,908 | (32,667 | ) | 35,491 | (295 | ) | ||||||||||
| Discontinued operations, net | 779,888 | 130,438 | 77,486 | 30,121 | ||||||||||||
| Net income | 827,796 | 97,771 | 112,977 | 29,826 | ||||||||||||
| Net (income) loss attributable to Noncontrolling Interests: | ||||||||||||||||
| Operating Partnership | (36,275 | ) | (4,167 | ) | (4,742 | ) | (1,231 | ) | ||||||||
| Partially Owned Properties | (418 | ) | 623 | (387 | ) | 188 | ||||||||||
| Net income attributable to controlling interests | 791,103 | 94,227 | 107,848 | 28,783 | ||||||||||||
| Preferred distributions | (10,399 | ) | (10,855 | ) | (3,466 | ) | (3,617 | ) | ||||||||
| Net income available to Common Shares | $ | 780,704 | $ | 83,372 | $ | 104,382 | $ | 25,166 | ||||||||
| Earnings per share – basic: | ||||||||||||||||
| Income (loss) from continuing operations available to Common Shares | $ | 0.12 | $ | (0.15 | ) | $ | 0.10 | $ | (0.01 | ) | ||||||
| Net income available to Common Shares | $ | 2.65 | $ | 0.30 | $ | 0.35 | $ | 0.09 | ||||||||
| Weighted average Common Shares outstanding | 294,474 | 281,867 | 295,831 | 282,717 | ||||||||||||
| Earnings per share – diluted: | ||||||||||||||||
| Income (loss) from continuing operations available to Common Shares | $ | 0.12 | $ | (0.15 | ) | $ | 0.10 | $ | (0.01 | ) | ||||||
| Net income available to Common Shares | $ | 2.62 | $ | 0.30 | $ | 0.35 | $ | 0.09 | ||||||||
| Weighted average Common Shares outstanding | 311,908 | 281,867 | 312,844 | 282,717 | ||||||||||||
| Distributions declared per Common Share outstanding | $ | 1.0125 | $ | 1.0125 | $ | 0.3375 | $ | 0.3375 | ||||||||
| Equity Residential | ||||||||||||||||
| Consolidated Statements of Funds From Operations and Normalized Funds From Operations | ||||||||||||||||
| (Amounts in thousands except per share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
Nine Months Ended | Quarter Ended | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net income | $ | 827,796 | $ | 97,771 | $ | 112,977 | $ | 29,826 | ||||||||
| Adjustments: | ||||||||||||||||
| Net (income) loss attributable to Noncontrolling Interests – | ||||||||||||||||
| Partially Owned Properties | (418 | ) | 623 | (387 | ) | 188 | ||||||||||
| Depreciation | 482,039 | 457,822 | 164,552 | 158,318 | ||||||||||||
| Depreciation – Non-real estate additions | (4,202 | ) | (4,842 | ) | (1,297 | ) | (1,585 | ) | ||||||||
| Depreciation – Partially Owned and Unconsolidated Properties | (2,263 | ) | (849 | ) | (758 | ) | (856 | ) | ||||||||
| Net (gain) on sales of unconsolidated entities | - | (28,101 | ) | - | (22,544 | ) | ||||||||||
| Discontinued operations: | ||||||||||||||||
| Depreciation | 14,256 | 43,706 | 901 | 15,646 | ||||||||||||
| Net (gain) on sales of discontinued operations | (759,100 | ) | (69,538 | ) | (76,864 | ) | (9,285 | ) | ||||||||
| Net incremental gain (loss) on sales of condominium units | 2,050 | 619 | 935 | (12 | ) | |||||||||||
| Gain (loss) on sale of Equity Corporate Housing (ECH) | 1,022 | - | (2 | ) | - | |||||||||||
| FFO (1) (3) | 561,180 | 497,211 | 200,057 | 169,696 | ||||||||||||
| Adjustments (see page 24 for additional detail): | ||||||||||||||||
| Asset impairment and valuation allowances | - | - | - | - | ||||||||||||
| Property acquisition costs and write-off of pursuit costs (other expenses) | 9,318 | 9,513 | 2,528 | 3,487 | ||||||||||||
Debt extinguishment (gains) losses, including prepayment penalties, preferred share redemptions and non-cash convertible debt discounts | 9,250 | 6,673 | 677 | 1,854 | ||||||||||||
(Gains) losses on sales of non-operating assets, net of income and other tax expense (benefit) | (6,554 | ) | 577 | (1,025 | ) | 1,189 | ||||||||||
| Other miscellaneous non-comparable items | (7,762 | ) | (5,192 | ) | (5,662 | ) | - | |||||||||
| Normalized FFO (2) (3) | $ | 565,432 | $ | 508,782 | $ | 196,575 | $ | 176,226 | ||||||||
| FFO (1) (3) | $ | 561,180 | $ | 497,211 | $ | 200,057 | $ | 169,696 | ||||||||
| Preferred distributions | (10,399 | ) | (10,855 | ) | (3,466 | ) | (3,617 | ) | ||||||||
| FFO available to Common Shares and Units - basic (1) (3) (4) | $ | 550,781 | $ | 486,356 | $ | 196,591 | $ | 166,079 | ||||||||
| FFO available to Common Shares and Units - diluted (1) (3) (4) | $ | 550,781 | $ | 486,814 | $ | 196,591 | $ | 166,231 | ||||||||
| FFO per share and Unit - basic | $ | 1.79 | $ | 1.65 | $ | 0.64 | $ | 0.56 | ||||||||
| FFO per share and Unit - diluted | $ | 1.77 | $ | 1.63 | $ | 0.63 | $ | 0.55 | ||||||||
| Normalized FFO (2) (3) | $ | 565,432 | $ | 508,782 | $ | 196,575 | $ | 176,226 | ||||||||
| Preferred distributions | (10,399 | ) | (10,855 | ) | (3,466 | ) | (3,617 | ) | ||||||||
| Normalized FFO available to Common Shares and Units - basic (2) (3) (4) | $ | 555,033 | $ | 497,927 | $ | 193,109 | $ | 172,609 | ||||||||
| Normalized FFO available to Common Shares and Units - diluted (2) (3) (4) | $ | 555,033 | $ | 498,385 | $ | 193,109 | $ | 172,761 | ||||||||
| Normalized FFO per share and Unit - basic | $ | 1.80 | $ | 1.68 | $ | 0.63 | $ | 0.58 | ||||||||
| Normalized FFO per share and Unit - diluted | $ | 1.78 | $ | 1.66 | $ | 0.62 | $ | 0.57 | ||||||||
| Weighted average Common Shares and Units outstanding - basic | 307,705 | 295,572 | 308,884 | 296,348 | ||||||||||||
| Weighted average Common Shares and Units outstanding - diluted | 311,908 | 299,427 | 312,844 | 300,773 | ||||||||||||
Note: See page 24 for additional detail regarding the adjustments from FFO to Normalized FFO. See page 26 for the definitions, the footnotes referenced above and the reconciliations of EPS to FFO and Normalized FFO. | ||||||||||||||||
| Equity Residential | |||||||||||
| Consolidated Balance Sheets | |||||||||||
| (Amounts in thousands except for share amounts) | |||||||||||
| (Unaudited) | |||||||||||
| September 30, | December 31, | ||||||||||
| 2011 | 2010 | ||||||||||
| ASSETS | |||||||||||
| Investment in real estate | |||||||||||
| Land | $ | 4,158,288 | $ | 4,110,275 | |||||||
| Depreciable property | 15,055,570 | 15,226,512 | |||||||||
| Projects under development | 119,433 | 130,337 | |||||||||
| Land held for development | 205,476 | 235,247 | |||||||||
| Investment in real estate | 19,538,767 | 19,702,371 | |||||||||
| Accumulated depreciation | (4,405,479 | ) | (4,337,357 | ) | |||||||
| Investment in real estate, net | 15,133,288 | 15,365,014 | |||||||||
| Cash and cash equivalents | 45,986 | 431,408 | |||||||||
| Investments in unconsolidated entities | 11,020 | 3,167 | |||||||||
| Deposits – restricted | 369,461 | 180,987 | |||||||||
| Escrow deposits – mortgage | 10,677 | 12,593 | |||||||||
| Deferred financing costs, net | 37,334 | 42,033 | |||||||||
| Other assets | 149,051 | 148,992 | |||||||||
| Total assets | $ | 15,756,817 | $ | 16,184,194 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities: | |||||||||||
| Mortgage notes payable | $ | 4,136,848 | $ | 4,762,896 | |||||||
| Notes, net | 4,614,323 | 5,185,180 | |||||||||
| Lines of credit | 26,000 | - | |||||||||
| Accounts payable and accrued expenses | 97,845 | 39,452 | |||||||||
| Accrued interest payable | 69,895 | 98,631 | |||||||||
| Other liabilities | 409,591 | 304,202 | |||||||||
| Security deposits | 62,073 | 60,812 | |||||||||
| Distributions payable | 106,673 | 140,905 | |||||||||
| Total liabilities | 9,523,248 | 10,592,078 | |||||||||
| Commitments and contingencies | |||||||||||
| Redeemable Noncontrolling Interests – Operating Partnership | 378,798 | 383,540 | |||||||||
| Equity: | |||||||||||
| Shareholders' equity: | |||||||||||
| Preferred Shares of beneficial interest, $0.01 par value; | |||||||||||
| 100,000,000 shares authorized; 1,600,000 shares issued | |||||||||||
| and outstanding as of September 30, 2011 and December 31, 2010 | 200,000 | 200,000 | |||||||||
| Common Shares of beneficial interest, $0.01 par value; | |||||||||||
| 1,000,000,000 shares authorized; 296,620,833 shares issued | |||||||||||
| and outstanding as of September 30, 2011 and 290,197,242 | |||||||||||
| shares issued and outstanding as of December 31, 2010 | 2,966 | 2,902 | |||||||||
| Paid in capital | 5,032,863 | 4,741,521 | |||||||||
| Retained earnings | 684,902 | 203,581 | |||||||||
| Accumulated other comprehensive (loss) | (185,032 | ) | (57,818 | ) | |||||||
| Total shareholders' equity | 5,735,699 | 5,090,186 | |||||||||
| Noncontrolling Interests: | |||||||||||
| Operating Partnership | 120,786 | 110,399 | |||||||||
| Partially Owned Properties | (1,714 | ) | 7,991 | ||||||||
| Total Noncontrolling Interests | 119,072 | 118,390 | |||||||||
| Total equity | 5,854,771 | 5,208,576 | |||||||||
| Total liabilities and equity | $ | 15,756,817 | $ | 16,184,194 | |||||||
| Equity Residential | |||||||||||||||
| Portfolio Summary | |||||||||||||||
| As of September 30, 2011 | |||||||||||||||
| % of Total | % of | Average | |||||||||||||
| Apartment | Apartment | Stabilized | Rental | ||||||||||||
| Markets | Properties | Units | Units | NOI | Rate (1) | ||||||||||
| 1 | New York Metro Area | 28 | 8,290 | 7.0 | % | 13.3 | % | $ | 2,949 | ||||||
| 2 | DC Northern Virginia | 27 | 9,813 | 8.2 | % | 12.3 | % | 2,045 | |||||||
| 3 | South Florida | 39 | 12,989 | 10.9 | % | 9.6 | % | 1,398 | |||||||
| 4 | Los Angeles | 42 | 8,880 | 7.5 | % | 9.1 | % | 1,792 | |||||||
| 5 | Boston | 28 | 5,821 | 4.9 | % | 7.7 | % | 2,332 | |||||||
| 6 | Seattle/Tacoma | 43 | 9,582 | 8.1 | % | 7.2 | % | 1,403 | |||||||
| 7 | San Francisco Bay Area | 34 | 6,289 | 5.3 | % | 6.1 | % | 1,858 | |||||||
| 8 | San Diego | 14 | 4,963 | 4.2 | % | 5.4 | % | 1,846 | |||||||
| 9 | Denver | 23 | 7,970 | 6.7 | % | 4.9 | % | 1,126 | |||||||
| 10 | Phoenix | 32 | 9,265 | 7.8 | % | 4.4 | % | 925 | |||||||
| 11 | Orlando | 24 | 7,265 | 6.1 | % | 4.0 | % | 1,017 | |||||||
| 12 | Suburban Maryland | 15 | 4,462 | 3.7 | % | 3.9 | % | 1,460 | |||||||
| 13 | Orange County, CA | 11 | 3,490 | 2.9 | % | 3.3 | % | 1,576 | |||||||
| 14 | Inland Empire, CA | 10 | 3,081 | 2.6 | % | 2.5 | % | 1,451 | |||||||
| 15 | Atlanta | 16 | 4,800 | 4.0 | % | 2.5 | % | 1,040 | |||||||
| 16 | All Other Markets (2) | 29 | 7,150 | 6.0 | % | 3.8 | % | 1,073 | |||||||
| Total | 415 | 114,110 | 95.9 | % | 100.0 | % | 1,583 | ||||||||
| Military Housing | 2 | 4,901 | 4.1 | % | - | - | |||||||||
| Grand Total | 417 | 119,011 | 100.0 | % | 100.0 | % | $ | 1,583 | |||||||
| (1) Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the month of September 2011. | |
| (2) All Other Markets - Each individual market is less than 2.0% of stabilized NOI. | |
| Note: Projects under development are not included in the Portfolio Summary until construction has been completed, at which time they are included at their projected stabilized NOI. | |
| Equity Residential | |||||||||||||||||
| Portfolio as of September 30, 2011 | |||||||||||||||||
| Apartment | |||||||||||||||||
| Properties | Units | ||||||||||||||||
| Wholly Owned Properties | 394 | 110,194 | |||||||||||||||
| Partially Owned Properties - Consolidated | 21 | 3,916 | |||||||||||||||
| Military Housing | 2 | 4,901 | |||||||||||||||
| 417 | 119,011 | ||||||||||||||||
| Portfolio Rollforward Q3 2011 | |||||||||||||||||
| ($ in thousands) | |||||||||||||||||
| Apartment | Purchase/ | ||||||||||||||||
| Properties | Units | (Sale) Price | Cap Rate | ||||||||||||||
| 6/30/2011 | 421 | 120,760 | |||||||||||||||
| Acquisitions: | |||||||||||||||||
| Rental Properties: | |||||||||||||||||
| Consolidated - Stabilized | 2 | 365 | $ | 112,975 | 4.7 | % | |||||||||||
| Consolidated - Not Stabilized (1) | 1 | 95 | $ | 39,520 | |||||||||||||
| Land Parcels (two) (2) | - | - | $ | 5,600 | |||||||||||||
| Dispositions: | |||||||||||||||||
| Rental Properties: | |||||||||||||||||
| Consolidated | (7 | ) | (2,261 | ) | $ | (210,100 | ) | 7.2 | % | ||||||||
| Configuration Changes | - | 52 | |||||||||||||||
| 9/30/2011 | 417 | 119,011 | |||||||||||||||
| Portfolio Rollforward 2011 | |||||||||||||||||
| ($ in thousands) | |||||||||||||||||
| Apartment | Purchase/ | ||||||||||||||||
| Properties | Units | (Sale) Price | Cap Rate | ||||||||||||||
| 12/31/2010 | 451 | 129,604 | |||||||||||||||
| Acquisitions: | |||||||||||||||||
| Rental Properties: | |||||||||||||||||
| Consolidated - Stabilized | 9 | 2,434 | $ | 662,228 | 5.1 | % | |||||||||||
| Consolidated - Not Stabilized (1) | 1 | 95 | $ | 39,520 | |||||||||||||
| Land Parcels (three) (2) | - | - | $ | 18,450 | |||||||||||||
| Other (3) | - | - | $ | 11,750 | |||||||||||||
| Dispositions: | |||||||||||||||||
| Rental Properties: | |||||||||||||||||
| Consolidated | (45 | ) | (13,528 | ) | $ | (1,383,414 | ) | 6.5 | % | ||||||||
| Land Parcel (one) (4) | - | - | $ | (22,786 | ) | ||||||||||||
| Completed Developments | 1 | 250 | |||||||||||||||
| Configuration Changes | - | 156 | |||||||||||||||
| 9/30/2011 | 417 | 119,011 | |||||||||||||||
| (1) | The Company acquired one unoccupied property in the third quarter of 2011 (88 Hillside) that is expected to stabilize at a 6.3% yield on cost. | |
| (2) | Includes entry into a long-term ground lease for a land parcel in New York City. | |
| (3) | Represents the acquisition of a 97,000 square foot commercial building adjacent to our Harbor Steps apartment property in downtown Seattle for potential redevelopment. | |
| (4) | Represents the sale of a land parcel, on which the Company no longer planned to develop, in suburban Washington, D.C. | |
| Equity Residential | |||||||||||||||||||||||
| Third Quarter 2011 vs. Third Quarter 2010 | |||||||||||||||||||||||
| Same Store Results/Statistics | |||||||||||||||||||||||
| $ in thousands (except for Average Rental Rate) - 104,922 Same Store Apartment Units | |||||||||||||||||||||||
| Results | Statistics | ||||||||||||||||||||||
| Average | |||||||||||||||||||||||
| Rental | |||||||||||||||||||||||
| Description | Revenues | Expenses | NOI (1) | Rate (2) | Occupancy | Turnover | |||||||||||||||||
| Q3 2011 | $ | 457,308 | $ | 166,212 | $ | 291,096 | $ | 1,524 | 95.4 | % | 17.7 | % | |||||||||||
| Q3 2010 | $ | 433,508 | $ | 166,381 | $ | 267,127 | $ | 1,453 | 94.9 | % | 17.8 | % | |||||||||||
| Change | $ | 23,800 | $ | (169 | ) | $ | 23,969 | $ | 71 | 0.5 | % | (0.1 | %) | ||||||||||
| Change | 5.5 | % | (0.1 | %) | 9.0 | % | 4.9 | % | |||||||||||||||
| Third Quarter 2011 vs. Second Quarter 2011 | |||||||||||||||||||||||
| Same Store Results/Statistics | |||||||||||||||||||||||
| $ in thousands (except for Average Rental Rate) - 109,603 Same Store Apartment Units | |||||||||||||||||||||||
| Results | Statistics | ||||||||||||||||||||||
| Average | |||||||||||||||||||||||
| Rental | |||||||||||||||||||||||
| Description | Revenues | Expenses | NOI (1) | Rate (2) | Occupancy | Turnover | |||||||||||||||||
| Q3 2011 | $ | 485,971 | $ | 176,599 | $ | 309,372 | $ | 1,551 | 95.4 | % | 17.6 | % | |||||||||||
Q2 2011 | $ | 475,718 | $ | 171,445 | $ | 304,273 | $ | 1,518 | 95.4 | % | 15.0 | % | |||||||||||
| Change | $ | 10,253 | $ | 5,154 | $ | 5,099 | $ | 33 | 0.0 | % | 2.6 | % | |||||||||||
| Change | 2.2 | % | 3.0 | % | 1.7 | % | 2.2 | % | |||||||||||||||
| September YTD 2011 vs. September YTD 2010 | |||||||||||||||||||||||
| Same Store Results/Statistics | |||||||||||||||||||||||
| $ in thousands (except for Average Rental Rate) - 102,129 Same Store Apartment Units | |||||||||||||||||||||||
| Results | Statistics | ||||||||||||||||||||||
| Average | |||||||||||||||||||||||
| Rental | |||||||||||||||||||||||
| Description | Revenues | Expenses | NOI (1) | Rate (2) | Occupancy | Turnover | |||||||||||||||||
| YTD 2011 | $ | 1,284,208 | $ | 467,944 | $ | 816,264 | $ | 1,468 | 95.3 | % | 44.4 | % | |||||||||||
| YTD 2010 | $ | 1,225,371 | $ | 469,151 | $ | 756,220 | $ | 1,407 | 94.9 | % | 44.0 | % | |||||||||||
| Change | $ | 58,837 | $ | (1,207 | ) | $ | 60,044 | $ | 61 | 0.4 | % | 0.4 | % | ||||||||||
| Change | 4.8 | % | (0.3 | %) | 7.9 | % | 4.3 | % | |||||||||||||||
| (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 its operating performance because it is a direct measure of the actual operating results of the Company's apartment communities. See page 26 for reconciliations from operating income. | |
| (2) | Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period. | |
| Equity Residential | ||||||||||||||||||||||||||||
| Third Quarter 2011 vs. Third Quarter 2010 | ||||||||||||||||||||||||||||
| Same Store Results/Statistics by Market | ||||||||||||||||||||||||||||
| Increase (Decrease) from Prior Year's Quarter | ||||||||||||||||||||||||||||
| Q3 2011 | Q3 2011 | Q3 2011 | ||||||||||||||||||||||||||
| % of | Average | Weighted | Average | |||||||||||||||||||||||||
| Apartment | Actual | Rental | Average | Rental | ||||||||||||||||||||||||
| Markets | Units | NOI | Rate (1) | Occupancy % | Revenues | Expenses | NOI | Rate (1) | Occupancy | |||||||||||||||||||
| 1 | New York Metro Area | 6,797 | 11.8 | % | $ | 3,023 | 96.5 | % | 5.5 | % | 7.4 | % | 4.1 | % | 5.5 | % | 0.0 | % | ||||||||||
| 2 | DC Northern Virginia | 7,899 | 10.6 | % | 1,940 | 96.2 | % | 6.3 | % | 2.0 | % | 8.3 | % | 6.6 | % | (0.3 | %) | |||||||||||
| 3 | South Florida | 12,113 | 10.0 | % | 1,365 | 94.4 | % | 4.5 | % | (3.8 | %) | 10.2 | % | 4.4 | % | 0.1 | % | |||||||||||
| 4 | Los Angeles | 7,463 | 8.5 | % | 1,746 | 95.4 | % | 3.1 | % | (5.0 | %) | 7.7 | % | 2.3 | % | 0.7 | % | |||||||||||
| 5 | Boston | 5,347 | 7.9 | % | 2,275 | 96.4 | % | 6.0 | % | (4.1 | %) | 12.1 | % | 5.5 | % | 0.4 | % | |||||||||||
| 6 | Seattle/Tacoma | 8,760 | 7.4 | % | 1,398 | 94.6 | % | 6.3 | % | 1.5 | % | 9.5 | % | 4.2 | % | 1.9 | % | |||||||||||
| 7 | San Francisco Bay Area | 5,512 | 6.5 | % | 1,816 | 95.8 | % | 9.7 | % | (0.3 | %) | 15.7 | % | 7.7 | % | 1.8 | % | |||||||||||
| 8 | Denver | 7,970 | 5.8 | % | 1,120 | 95.6 | % | 7.9 | % | 0.2 | % | 12.2 | % | 7.9 | % | (0.2 | %) | |||||||||||
| 9 | Phoenix | 9,265 | 5.1 | % | 920 | 94.8 | % | 6.7 | % | (1.3 | %) | 12.6 | % | 6.4 | % | 0.2 | % | |||||||||||
| 10 | San Diego | 4,284 | 5.0 | % | 1,720 | 95.3 | % | 3.7 | % | (4.6 | %) | 7.9 | % | 2.8 | % | 0.8 | % | |||||||||||
| 11 | Orlando | 7,265 | 4.3 | % | 1,016 | 95.6 | % | 4.2 | % | 4.8 | % | 3.8 | % | 3.3 | % | 0.8 | % | |||||||||||
| 12 | Orange County, CA | 3,490 | 3.7 | % | 1,573 | 95.5 | % | 3.3 | % | (0.8 | %) | 5.4 | % | 3.0 | % | 0.3 | % | |||||||||||
| 13 | Suburban Maryland | 4,005 | 3.6 | % | 1,399 | 95.1 | % | 3.8 | % | 0.2 | % | 5.8 | % | 4.3 | % | (0.5 | %) | |||||||||||
| 14 | Atlanta | 4,800 | 2.9 | % | 1,037 | 96.3 | % | 4.8 | % | (4.2 | %) | 12.6 | % | 4.8 | % | 0.0 | % | |||||||||||
| 15 | Inland Empire, CA | 3,081 | 2.8 | % | 1,437 | 94.6 | % | 3.4 | % | (1.6 | %) | 6.3 | % | 2.9 | % | 0.4 | % | |||||||||||
| 16 | All Other Markets | 6,871 | 4.1 | % | 1,049 | 95.7 | % | 6.3 | % | (0.5 | %) | 11.8 | % | 5.1 | % | 1.1 | % | |||||||||||
| Total | 104,922 | 100.0 | % | $ | 1,524 | 95.4 | % | 5.5 | % | (0.1 | %) | 9.0 | % | 4.9 | % | 0.5 | % | |||||||||||
| (1) Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period. | ||||||||||||||||||||||||||||
| Equity Residential | ||||||||||||||||||||||||||||
| Third Quarter 2011 vs. Second Quarter 2011 | ||||||||||||||||||||||||||||
| Same Store Results/Statistics by Market | ||||||||||||||||||||||||||||
| Increase (Decrease) from Prior Quarter | ||||||||||||||||||||||||||||
| Q3 2011 | Q3 2011 | Q3 2011 | ||||||||||||||||||||||||||
| % of | Average | Weighted | Average | |||||||||||||||||||||||||
| Apartment | Actual | Rental | Average | Rental | ||||||||||||||||||||||||
| Markets | Units | NOI | Rate (1) | Occupancy % | Revenues | Expenses | NOI | Rate (1) | Occupancy | |||||||||||||||||||
| 1 | New York Metro Area | 7,767 | 12.8 | % | $ | 2,992 | 96.5 | % | 1.9 | % | 5.7 | % | (0.7 | %) | 2.1 | % | (0.2 | %) | ||||||||||
| 2 | DC Northern Virginia | 8,406 | 10.8 | % | 1,968 | 96.2 | % | 2.1 | % | 2.6 | % | 1.9 | % | 2.1 | % | 0.0 | % | |||||||||||
| 3 | South Florida | 12,742 | 10.1 | % | 1,391 | 94.3 | % | 1.6 | % | (2.3 | %) | 4.0 | % | 1.8 | % | (0.2 | %) | |||||||||||
| 4 | Los Angeles | 8,311 | 9.0 | % | 1,758 | 95.4 | % | 2.5 | % | 2.7 | % | 2.3 | % | 1.6 | % | 0.8 | % | |||||||||||
| 5 | Boston | 5,821 | 8.1 | % | 2,318 | 96.1 | % | 1.7 | % | 5.2 | % | (0.2 | %) | 1.6 | % | 0.0 | % | |||||||||||
| 6 | Seattle/Tacoma | 9,331 | 7.4 | % | 1,395 | 94.6 | % | 1.9 | % | 4.9 | % | 0.2 | % | 2.1 | % | (0.2 | %) | |||||||||||
| 7 | San Francisco Bay Area | 6,194 | 6.8 | % | 1,818 | 95.8 | % | 3.6 | % | 4.4 | % | 3.1 | % | 3.7 | % | (0.1 | %) | |||||||||||
| 8 | Denver | 7,970 | 5.5 | % | 1,120 | 95.6 | % | 4.2 | % | 3.9 | % | 4.4 | % | 4.1 | % | 0.2 | % | |||||||||||
| 9 | Phoenix | 9,265 | 4.8 | % | 920 | 94.8 | % | 2.1 | % | 4.8 | % | 0.4 | % | 2.7 | % | (0.6 | %) | |||||||||||
| 10 | San Diego | 4,284 | 4.7 | % | 1,720 | 95.3 | % | 2.0 | % | (3.7 | %) | 4.8 | % | 2.0 | % | 0.0 | % | |||||||||||
| 11 | Orlando | 7,265 | 4.0 | % | 1,016 | 95.6 | % | 2.2 | % | 6.8 | % | (0.8 | %) | 1.7 | % | 0.5 | % | |||||||||||
| 12 | Orange County, CA | 3,490 | 3.5 | % | 1,573 | 95.5 | % | 2.1 | % | 3.3 | % | 1.5 | % | 2.1 | % | 0.0 | % | |||||||||||
| 13 | Suburban Maryland | 4,005 | 3.3 | % | 1,399 | 95.1 | % | 0.6 | % | 5.5 | % | (1.8 | %) | 0.9 | % | (0.3 | %) | |||||||||||
| 14 | Atlanta | 4,800 | 2.7 | % | 1,037 | 96.3 | % | 2.2 | % | (1.3 | %) | 4.9 | % | 2.1 | % | 0.1 | % | |||||||||||
| 15 | Inland Empire, CA | 3,081 | 2.6 | % | 1,437 | 94.6 | % | 1.0 | % | 8.0 | % | (2.4 | %) | 1.6 | % | (0.5 | %) | |||||||||||
| 16 | All Other Markets | 6,871 | 3.9 | % | 1,049 | 95.7 | % | 2.8 | % | (2.4 | %) | 6.8 | % | 2.5 | % | 0.2 | % | |||||||||||
| Total | 109,603 | 100.0 | % | $ | 1,551 | 95.4 | % | 2.2 | % | 3.0 | % | 1.7 | % | 2.2 | % | 0.0 | % | |||||||||||
| (1) Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period. | ||||||||||||||||||||||||||||
| Equity Residential | ||||||||||||||||||||||||||||
| September YTD 2011 vs. September YTD 2010 | ||||||||||||||||||||||||||||
| Same Store Results/Statistics by Market | ||||||||||||||||||||||||||||
| Increase (Decrease) from Prior Year | ||||||||||||||||||||||||||||
| Sept. YTD 11 | Sept. YTD 11 | Sept. YTD 11 | ||||||||||||||||||||||||||
| % of | Average | Weighted | Average | |||||||||||||||||||||||||
| Apartment | Actual | Rental | Average | Rental | ||||||||||||||||||||||||
| Markets | Units | NOI | Rate (1) | Occupancy % | Revenues | Expenses | NOI | Rate (1) | Occupancy | |||||||||||||||||||
| 1 | DC Northern Virginia | 7,679 | 10.5 | % | $ | 1,866 | 95.9 | % | 6.4 | % | 0.2 | % | 9.4 | % | 6.4 | % | 0.0 | % | ||||||||||
| 2 | South Florida | 12,113 | 10.4 | % | 1,344 | 94.6 | % | 4.4 | % | (1.0 | %) | 8.2 | % | 4.5 | % | (0.1 | %) | |||||||||||
| 3 | New York Metro Area | 5,887 | 10.1 | % | 2,725 | 96.1 | % | 5.6 | % | 5.7 | % | 5.4 | % | 5.4 | % | 0.1 | % | |||||||||||
| 4 | Los Angeles | 7,463 | 8.9 | % | 1,721 | 95.0 | % | 2.5 | % | (3.7 | %) | 5.9 | % | 1.9 | % | 0.5 | % | |||||||||||
| 5 | Boston | 5,347 | 8.1 | % | 2,245 | 96.0 | % | 5.3 | % | (1.8 | %) | 9.7 | % | 4.2 | % | 0.9 | % | |||||||||||
| 6 | Seattle/Tacoma | 7,873 | 7.0 | % | 1,383 | 94.4 | % | 5.6 | % | 0.1 | % | 9.4 | % | 4.3 | % | 1.1 | % | |||||||||||
| 7 | San Francisco Bay Area | 5,512 | 6.7 | % | 1,761 | 95.8 | % | 6.6 | % | (0.3 | %) | 10.7 | % | 5.5 | % | 1.0 | % | |||||||||||
| 8 | Denver | 7,762 | 5.9 | % | 1,088 | 95.3 | % | 6.7 | % | 1.4 | % | 9.5 | % | 6.7 | % | (0.1 | %) | |||||||||||
| 9 | Phoenix | 9,265 | 5.4 | % | 899 | 95.2 | % | 5.6 | % | (3.0 | %) | 11.9 | % | 4.8 | % | 0.7 | % | |||||||||||
| 10 | San Diego | 4,103 | 4.9 | % | 1,684 | 95.1 | % | 2.1 | % | (1.6 | %) | 3.9 | % | 1.8 | % | 0.3 | % | |||||||||||
| 11 | Orlando | 7,265 | 4.6 | % | 1,001 | 95.2 | % | 3.9 | % | 2.1 | % | 5.1 | % | 3.1 | % | 0.7 | % | |||||||||||
| 12 | Suburban Maryland | 4,005 | 3.8 | % | 1,383 | 95.0 | % | 3.9 | % | (3.8 | %) | 8.4 | % | 4.0 | % | (0.2 | %) | |||||||||||
| 13 | Orange County, CA | 3,307 | 3.7 | % | 1,538 | 95.4 | % | 2.7 | % | (1.6 | %) | 4.8 | % | 2.3 | % | 0.4 | % | |||||||||||
| 14 | Inland Empire, CA | 3,081 | 3.0 | % | 1,418 | 94.9 | % | 3.2 | % | (3.2 | %) | 6.8 | % | 3.2 | % | 0.0 | % | |||||||||||
| 15 | Atlanta | 4,596 | 2.8 | % | 1,023 | 96.1 | % | 3.6 | % | (2.0 | %) | 8.3 | % | 3.6 | % | 0.0 | % | |||||||||||
| 16 | All Other Markets | 6,871 | 4.2 | % | 1,027 | 95.4 | % | 5.1 | % | 1.1 | % | 8.3 | % | 4.2 | % | 0.8 | % | |||||||||||
| Total | 102,129 | 100.0 | % | $ | 1,468 | 95.3 | % | 4.8 | % | (0.3 | %) | 7.9 | % | 4.3 | % | 0.4 | % | |||||||||||
(1) Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period. | ||||||||||||||||||||||||||||
| Equity Residential | |||||||||||||||||
| Third Quarter 2011 vs. Third Quarter 2010 | |||||||||||||||||
| Same Store Operating Expenses | |||||||||||||||||
| $ in thousands - 104,922 Same Store Apartment Units | |||||||||||||||||
| % of Actual | |||||||||||||||||
| Q3 2011 | |||||||||||||||||
| Actual | Actual | $ | % | Operating | |||||||||||||
| Q3 2011 | Q3 2010 | Change | Change | Expenses | |||||||||||||
| Real estate taxes | $ | 46,887 | $ | 45,682 | $ | 1,205 | 2.6 | % | 28.2 | % | |||||||
| On-site payroll (1) | 38,871 | 39,512 | (641 | ) | (1.6 | %) | 23.4 | % | |||||||||
| Utilities (2) | 25,398 | 25,063 | 335 | 1.3 | % | 15.3 | % | ||||||||||
| Repairs and maintenance (3) | 24,185 | 24,608 | (423 | ) | (1.7 | %) | 14.6 | % | |||||||||
| Property management costs (4) | 18,475 | 17,340 | 1,135 | 6.5 | % | 11.1 | % | ||||||||||
| Insurance | 4,991 | 5,306 | (315 | ) | (5.9 | %) | 3.0 | % | |||||||||
| Leasing and advertising | 3,025 | 4,383 | (1,358 | ) | (31.0 | %) | 1.8 | % | |||||||||
| Other on-site operating expenses (5) | 4,380 | 4,487 | (107 | ) | (2.4 | %) | 2.6 | % | |||||||||
| Same store operating expenses | $ | 166,212 | $ | 166,381 | $ | (169 | ) | (0.1 | %) | 100.0 | % | ||||||
| September YTD 2011 vs. September YTD 2010 | |||||||||||||||||
| Same Store Operating Expenses | |||||||||||||||||
| $ in thousands - 102,129 Same Store Apartment Units | |||||||||||||||||
| % of Actual | |||||||||||||||||
| YTD 2011 | |||||||||||||||||
| Actual | Actual | $ | % | Operating | |||||||||||||
| YTD 2011 | YTD 2010 | Change | Change | Expenses | |||||||||||||
| Real estate taxes | $ | 127,155 | $ | 125,516 | $ | 1,639 | 1.3 | % | 27.2 | % | |||||||
| On-site payroll (1) | 109,904 | 112,705 | (2,801 | ) | (2.5 | %) | 23.5 | % | |||||||||
| Utilities (2) | 73,831 | 72,297 | 1,534 | 2.1 | % | 15.8 | % | ||||||||||
| Repairs and maintenance (3) | 67,958 | 68,653 | (695 | ) | (1.0 | %) | 14.5 | % | |||||||||
| Property management costs (4) | 51,882 | 49,015 | 2,867 | 5.8 | % | 11.1 | % | ||||||||||
| Insurance | 14,621 | 15,530 | (909 | ) | (5.9 | %) | 3.1 | % | |||||||||
| Leasing and advertising | 8,713 | 11,107 | (2,394 | ) | (21.6 | %) | 1.9 | % | |||||||||
| Other on-site operating expenses (5) | 13,880 | 14,328 | (448 | ) | (3.1 | %) | 2.9 | % | |||||||||
| Same store operating expenses | $ | 467,944 | $ | 469,151 | $ | (1,207 | ) | (0.3 | %) | 100.0 | % | ||||||
| (1) | On-site payroll - Includes payroll and related expenses for on-site personnel including property managers, leasing consultants and maintenance staff. |
| (2) | Utilities - Represents gross expenses prior to any recoveries under the Resident Utility Billing System ("RUBS"). Recoveries are reflected in rental income. |
| (3) | Repairs and maintenance - Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs. |
| (4) | Property management costs - Includes payroll and related expenses for departments, or portions of departments, that directly support on-site management. These include such departments as regional and corporate property management, property accounting, human resources, training, marketing and revenue management, procurement, real estate tax, property legal services and information technology. |
| (5) | Other on-site operating expenses - Includes administrative costs such as office supplies, telephone and data charges and association and business licensing fees. |
| Equity Residential | ||||||||||||
| Debt Summary as of September 30, 2011 | ||||||||||||
| (Amounts in thousands) | ||||||||||||
| Weighted | ||||||||||||
| Weighted | Average | |||||||||||
| Average | Maturities | |||||||||||
| Amounts (1) | % of Total | Rates (1) | (years) | |||||||||
| Secured | $ | 4,136,848 | 47.1 | % | 4.83 | % | 8.2 | |||||
| Unsecured | 4,640,323 | 52.9 | % | 5.15 | % | 4.4 | ||||||
| Total | $ | 8,777,171 | 100.0 | % | 5.00 | % | 6.1 | |||||
| Fixed Rate Debt: | ||||||||||||
| Secured - Conventional | $ | 3,587,114 | 40.8 | % | 5.57 | % | 7.1 | |||||
| Unsecured - Public/Private | 3,806,478 | 43.4 | % | 5.83 | % | 5.0 | ||||||
| Fixed Rate Debt | 7,393,592 | 84.2 | % | 5.71 | % | 6.0 | ||||||
| Floating Rate Debt: | ||||||||||||
| Secured - Conventional | 115,285 | 1.3 | % | 3.07 | % | 1.0 | ||||||
| Secured - Tax Exempt | 434,449 | 5.0 | % | 0.27 | % | 20.1 | ||||||
| Unsecured - Public/Private | 807,845 | 9.2 | % | 1.66 | % | 1.2 | ||||||
| Unsecured - Revolving Credit Facility (2) | 26,000 | 0.3 | % | 1.32 | % | 2.8 | ||||||
| Floating Rate Debt | 1,383,579 | 15.8 | % | 1.37 | % | 6.8 | ||||||
| Total | $ | 8,777,171 | 100.0 | % | 5.00 | % | 6.1 | |||||
| (1) | Net of the effect of any derivative instruments. Weighted average rates are for the nine months ended September 30, 2011. |
| (2) | On July 13, 2011, the Company replaced its then existing unsecured revolving credit facility with a new $1.25 billion unsecured revolving credit facility maturing on July 13, 2014, subject to a one-year extension option exercisable by the Company. The interest rate on advances under the new credit facility will generally be LIBOR plus a spread (currently 1.15%) and the Company pays an annual facility fee of 0.2%. Both the spread and the facility fee are dependent on the credit rating of the Company's long-term debt. |
| Note: The Company capitalized interest of approximately $5.9 million and $10.2 million during the nine months ended September 30, 2011 and 2010, respectively. The Company capitalized interest of approximately $2.2 million and $2.3 million during the quarters ended September 30, 2011 and 2010, respectively. |
| Debt Maturity Schedule as of September 30, 2011 | ||||||||||||||||||
| (Amounts in thousands) | ||||||||||||||||||
| Weighted | Weighted | |||||||||||||||||
| Average Rates | Average | |||||||||||||||||
| Fixed | Floating | on Fixed | Rates on | |||||||||||||||
| Year | Rate (1) | Rate (1) | Total | % of Total | Rate Debt (1) | Total Debt (1) | ||||||||||||
| 2011 | $ | 5,474 | $ | 50,622 | $ | 56,096 | 0.6 | % | 6.65 | % | 4.02 | % | ||||||
| 2012 | 625,590 | 536,887 | (2) | 1,162,477 | 13.2 | % | 6.04 | % | 3.71 | % | ||||||||
| 2013 | 273,304 | 308,360 | 581,664 | 6.6 | % | 6.71 | % | 4.87 | % | |||||||||
| 2014 | 566,862 | 48,012 | (3) | 614,874 | 7.0 | % | 5.32 | % | 5.07 | % | ||||||||
| 2015 | 419,433 | - | 419,433 | 4.8 | % | 6.31 | % | 6.31 | % | |||||||||
| 2016 | 1,190,544 | - | 1,190,544 | 13.6 | % | 5.34 | % | 5.34 | % | |||||||||
| 2017 | 1,355,835 | 456 | 1,356,291 | 15.4 | % | 5.87 | % | 5.87 | % | |||||||||
| 2018 | 80,771 | 16,417 | 97,188 | 1.1 | % | 5.72 | % | 4.92 | % | |||||||||
| 2019 | 801,763 | 20,766 | 822,529 | 9.4 | % | 5.49 | % | 5.36 | % | |||||||||
| 2020 | 1,671,836 | 809 | 1,672,645 | 19.1 | % | 5.50 | % | 5.50 | % | |||||||||
| 2021+ | 402,180 | 401,250 | 803,430 | 9.2 | % | 5.91 | % | 3.39 | % | |||||||||
| Total | $ | 7,393,592 | $ | 1,383,579 | $ | 8,777,171 | 100.0 | % | 5.69 | % | 5.04 | % | ||||||
| (1) | Net of the effect of any derivative instruments. Weighted average rates are as of September 30, 2011. |
| (2) | Effective April 5, 2011, the Company exercised the second of its two one-year extension options for its $500.0 million term loan facility and as a result, the maturity date is now October 5, 2012. |
| (3) | Includes $26.0 million outstanding on the Company's unsecured revolving credit facility. As of September 30, 2011, there was approximately $1.14 billion available on this facility. |
| Equity Residential | ||||||||||||||||||||
| Unsecured Debt Summary as of September 30, 2011 | ||||||||||||||||||||
| (Amounts in thousands) | ||||||||||||||||||||
| Unamortized | ||||||||||||||||||||
| Coupon | Due | Face | Premium/ | Net | ||||||||||||||||
| Rate | Date | Amount | (Discount) | Balance | ||||||||||||||||
| Fixed Rate Notes: | ||||||||||||||||||||
| 6.625 | % | 03/15/12 | $ | 253,858 | $ | (92 | ) | $ | 253,766 | |||||||||||
| 5.500 | % | 10/01/12 | 222,133 | (219 | ) | 221,914 | ||||||||||||||
| 5.200 | % | 04/01/13 | (1) | 400,000 | (177 | ) | 399,823 | |||||||||||||
| Fair Value Derivative Adjustments | (1) | (300,000 | ) | - | (300,000 | ) | ||||||||||||||
| 5.250 | % | 09/15/14 | 500,000 | (182 | ) | 499,818 | ||||||||||||||
| 6.584 | % | 04/13/15 | 300,000 | (386 | ) | 299,614 | ||||||||||||||
| 5.125 | % | 03/15/16 | 500,000 | (238 | ) | 499,762 | ||||||||||||||
| 5.375 | % | 08/01/16 | 400,000 | (897 | ) | 399,103 | ||||||||||||||
| 5.750 | % | 06/15/17 | 650,000 | (2,924 | ) | 647,076 | ||||||||||||||
| 7.125 | % | 10/15/17 | 150,000 | (392 | ) | 149,608 | ||||||||||||||
| 4.750 | % | 07/15/20 | 600,000 | (4,006 | ) | 595,994 | ||||||||||||||
| 7.570 | % | 08/15/26 | 140,000 | - | 140,000 | |||||||||||||||
| 3,815,991 | (9,513 | ) | 3,806,478 | |||||||||||||||||
| Floating Rate Notes: | ||||||||||||||||||||
| 04/01/13 | (1) | 300,000 | - | 300,000 | ||||||||||||||||
| Fair Value Derivative Adjustments | (1) | 7,845 | - | 7,845 | ||||||||||||||||
| Term Loan Facility | LIBOR+0.50% | 10/05/12 | (2)(3) | 500,000 | - | 500,000 | ||||||||||||||
| 807,845 | - | 807,845 | ||||||||||||||||||
| Revolving Credit Facility: | LIBOR+1.15% | 07/13/14 | (2)(4) | 26,000 | - | 26,000 | ||||||||||||||
| Total Unsecured Debt | $ | 4,649,836 | $ | (9,513 | ) | $ | 4,640,323 | |||||||||||||
| (1) | Fair value interest rate swaps convert $300.0 million of the 5.200% notes due April 1, 2013 to a floating interest rate. |
| (2) | Facilities are private. All other unsecured debt is public. |
| (3) | Effective April 5, 2011, the Company exercised the second of its two one-year extension options for its $500.0 million term loan facility and as a result, the maturity date is now October 5, 2012. |
| (4) | On July 13, 2011, the Company replaced its then existing unsecured revolving credit facility with a new $1.25 billion unsecured revolving credit facility maturing on July 13, 2014, subject to a one-year extension option exercisable by the Company. The interest rate on advances under the new credit facility will generally be LIBOR plus a spread (currently 1.15%) and the Company pays an annual facility fee of 0.2%. Both the spread and the facility fee are dependent on the credit rating of the Company's long-term debt. As of September 30, 2011, there was approximately $1.14 billion available on the Company's unsecured revolving credit facility. |
| Equity Residential | |||||||||
| Selected Unsecured Public Debt Covenants | |||||||||
| September 30, | June 30, | ||||||||
| 2011 | 2011 | ||||||||
| Total Debt to Adjusted Total Assets (not to exceed 60%) | 43.6 | % | 45.7 | % | |||||
| Secured Debt to Adjusted Total Assets (not to exceed 40%) | 20.5 | % | 21.0 | % | |||||
| Consolidated Income Available for Debt Service to | |||||||||
| Maximum Annual Service Charges | |||||||||
| (must be at least 1.5 to 1) | 2.81 | 2.58 | |||||||
| Total Unsecured Assets to Unsecured Debt | 293.2 | % | 270.7 | % | |||||
| (must be at least 150%) | |||||||||
| 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 September 30, 2011 | |||||||||||||||||||||||
| (Amounts in thousands except for share/unit and per share amounts) | |||||||||||||||||||||||
| Secured Debt | $ | 4,136,848 | 47.1 | % | |||||||||||||||||||
| Unsecured Debt | 4,640,323 | 52.9 | % | ||||||||||||||||||||
| Total Debt | 8,777,171 | 100.0 | % | 35.0 | % | ||||||||||||||||||
| Common Shares (includes Restricted Shares) | 296,620,833 | 95.6 | % | ||||||||||||||||||||
| Units (includes OP Units and LTIP Units) | 13,509,488 | 4.4 | % | ||||||||||||||||||||
| Total Shares and Units | 310,130,321 | 100.0 | % | ||||||||||||||||||||
| Common Share Price at September 30, 2011 | $ | 51.87 | |||||||||||||||||||||
| 16,086,460 | 98.8 | % | |||||||||||||||||||||
| Perpetual Preferred Equity (see below) | 200,000 | 1.2 | % | ||||||||||||||||||||
| Total Equity | 16,286,460 | 100.0 | % | 65.0 | % | ||||||||||||||||||
| Total Market Capitalization | $ | 25,063,631 | 100.0 | % | |||||||||||||||||||
| Perpetual Preferred Equity as of September 30, 2011 | |||||||||||||||||||||||
| (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 Unit | |||||||||||
| Weighted Average Amounts Outstanding | |||||||||||
| YTD Q311 | YTD Q310 | Q311 | Q310 | ||||||||
| Weighted Average Amounts Outstanding for Net Income Purposes: | |||||||||||
| Common Shares - basic | 294,473,642 | 281,867,105 | 295,830,970 | 282,717,105 | |||||||
| Shares issuable from assumed conversion/vesting of (1): | |||||||||||
| - OP Units | 13,231,470 | - | 13,053,174 | - | |||||||
| - long-term compensation shares/units | 4,203,347 | - | 3,960,089 | - | |||||||
| Total Common Shares and Units - diluted (1) | 311,908,459 | 281,867,105 | 312,844,233 | 282,717,105 | |||||||
| Weighted Average Amounts Outstanding for FFO and Normalized | |||||||||||
| FFO Purposes: | |||||||||||
| Common Shares - basic | 294,473,642 | 281,867,105 | 295,830,970 | 282,717,105 | |||||||
| OP Units - basic | 13,231,470 | 13,704,927 | 13,053,174 | 13,631,198 | |||||||
| Total Common Shares and OP Units - basic | 307,705,112 | 295,572,032 | 308,884,144 | 296,348,303 | |||||||
| Shares issuable from assumed conversion/vesting of: | |||||||||||
| - convertible preferred shares/units | - | 396,098 | - | 393,724 | |||||||
| - long-term compensation shares/units | 4,203,347 | 3,458,727 | 3,960,089 | 4,031,120 | |||||||
| Total Common Shares and Units - diluted | 311,908,459 | 299,426,857 | 312,844,233 | 300,773,147 | |||||||
| Period Ending Amounts Outstanding: | |||||||||||
| Common Shares (includes Restricted Shares) | 296,620,833 | 283,971,112 | |||||||||
| Units (includes OP Units and LTIP Units) | 13,509,488 | 13,859,444 | |||||||||
| Total Shares and Units | 310,130,321 | 297,830,556 | |||||||||
| (1) | Potential common shares issuable from the assumed conversion of OP Units and the exercise/vesting of long-term compensation shares/units are automatically anti-dilutive and therefore excluded from the diluted earnings per share calculation as the Company had a loss from continuing operations for the nine months and quarter ended September 30, 2010. |
| Equity Residential | ||||||||||||||||
| Partially Owned Entities as of September 30, 2011 | ||||||||||||||||
| (Amounts in thousands except for project and apartment unit amounts) | ||||||||||||||||
| Consolidated | ||||||||||||||||
| Development Projects | ||||||||||||||||
| Held for | ||||||||||||||||
| and/or Under | Completed | |||||||||||||||
| Development | and Stabilized | Other | Total | |||||||||||||
| Total projects (1) | - | 2 | 19 | 21 | ||||||||||||
| Total apartment units (1) | - | 441 | 3,475 | 3,916 | ||||||||||||
| Operating information for the nine months ended 9/30/11 (at 100%): | ||||||||||||||||
| Operating revenue | $ | - | $ | 6,649 | $ | 43,016 | $ | 49,665 | ||||||||
| Operating expenses | 207 | 3,083 | 14,487 | 17,777 | ||||||||||||
| Net operating (loss) income | (207 | ) | 3,566 | 28,529 | 31,888 | |||||||||||
| Depreciation | - | 3,121 | 11,256 | 14,377 | ||||||||||||
| General and administrative/other | 115 | 6 | 50 | 171 | ||||||||||||
| Operating (loss) income | (322 | ) | 439 | 17,223 | 17,340 | |||||||||||
| Interest and other income | 5 | 5 | 10 | 20 | ||||||||||||
| Other expenses | (289 | ) | - | (39 | ) | (328 | ) | |||||||||
| Interest: | ||||||||||||||||
| Expense incurred, net | (399 | ) | (2,465 | ) | (8,948 | ) | (11,812 | ) | ||||||||
| Amortization of deferred financing costs | - | (202 | ) | (341 | ) | (543 | ) | |||||||||
| (Loss) income before income and other taxes and net gains | ||||||||||||||||
| on sales of land parcels and discontinued operations | (1,005 | ) | (2,223 | ) | 7,905 | 4,677 | ||||||||||
| Income and other tax (expense) benefit | (57 | ) | - | (6 | ) | (63 | ) | |||||||||
| Net gain on sales of land parcels | 4,217 | - | - | 4,217 | ||||||||||||
| Net gain on sales of discontinued operations | 169 | - | 13,265 | 13,434 | ||||||||||||
| Net income (loss) | $ | 3,324 | $ | (2,223 | ) | $ | 21,164 | $ | 22,265 | |||||||
| Debt - Secured (2): | ||||||||||||||||
| EQR Ownership (3) | $ | - | $ | 84,153 | $ | 159,068 | $ | 243,221 | ||||||||
| Noncontrolling Ownership | - | - | 41,269 | 41,269 | ||||||||||||
| Total (at 100%) | $ | - | $ | 84,153 | $ | 200,337 | $ | 284,490 | ||||||||
| (1) Project and apartment unit counts exclude all uncompleted development projects until those projects are substantially completed. | |
| (2) All debt is non-recourse to the Company. | |
| (3) Represents the Company's current economic ownership interest. | |
| Note: See page 21 for the discussion of the Company's unconsolidated Nexus Sawgrass and Domain developments. | |
| Equity Residential | ||||||||||||||||||||||||||||||||
| Development and Lease-Up Projects as of September 30, 2011 | ||||||||||||||||||||||||||||||||
| (Amounts in thousands except for project and apartment unit amounts) | ||||||||||||||||||||||||||||||||
| Total Book | ||||||||||||||||||||||||||||||||
| No. of | Total | Total | Value Not | Estimated | Estimated | |||||||||||||||||||||||||||
| Apartment | Capital | Book Value | Placed in | Total | Percentage | Percentage | Percentage | Completion | Stabilization | |||||||||||||||||||||||
Projects | Location | Units | Cost (1) | to Date | Service | Debt | Completed | Leased | Occupied | Date | Date | |||||||||||||||||||||
| Consolidated | ||||||||||||||||||||||||||||||||
Projects Under Development - Wholly Owned: | ||||||||||||||||||||||||||||||||
| Ten23 (formerly 500 West 23rd Street) (2) | New York, NY | 111 | $ | 55,555 | $ | 48,934 | $ | 48,934 | $ | - | 90 | % | - | - | Q4 2011 | Q4 2012 | ||||||||||||||||
| Savoy III | Aurora, CO | 168 | 23,856 | 12,880 | 12,880 | - | 56 | % | - | - | Q2 2012 | Q2 2013 | ||||||||||||||||||||
| 2201 Pershing Drive | Arlington, VA | 188 | 64,242 | 24,841 | 24,841 | - | 24 | % | - | - | Q3 2012 | Q3 2013 | ||||||||||||||||||||
| Chinatown Gateway | Los Angeles, CA | 280 | 92,920 | 32,778 | 32,778 | - | 7 | % | - | - | Q3 2013 | Q2 2015 | ||||||||||||||||||||
| Projects Under Development - Wholly Owned | 747 | 236,573 | 119,433 | 119,433 | - | |||||||||||||||||||||||||||
| Projects Under Development | 747 | 236,573 | 119,433 | 119,433 | - | |||||||||||||||||||||||||||
Completed Not Stabilized - Wholly Owned (3): | ||||||||||||||||||||||||||||||||
| 425 Mass (4) | Washington, D.C. | 559 | 166,750 | 166,750 | - | - | 96 | % | 95 | % | Completed | Q4 2011 | ||||||||||||||||||||
| Vantage Pointe (4) | San Diego, CA | 679 | 200,000 | 200,000 | - | - | 91 | % | 90 | % | Completed | Q1 2012 | ||||||||||||||||||||
| 88 Hillside (4) | Daly City, CA | 95 | 39,520 | 39,520 | - | - | 3 | % | - | Completed | Q2 2012 | |||||||||||||||||||||
| Projects Completed Not Stabilized - Wholly Owned | 1,333 | 406,270 | 406,270 | - | - | |||||||||||||||||||||||||||
| Projects Completed Not Stabilized | 1,333 | 406,270 | 406,270 | - | - | |||||||||||||||||||||||||||
| Total Consolidated Projects | 2,080 | $ | 642,843 | $ | 525,703 | $ | 119,433 | $ | - | |||||||||||||||||||||||
| Land Held for Development | N/A | N/A | $ | 205,476 | $ | 205,476 | $ | - | ||||||||||||||||||||||||
| Unconsolidated | ||||||||||||||||||||||||||||||||
Projects Under Development - Unconsolidated: | ||||||||||||||||||||||||||||||||
| Domain (5) | San Jose, CA | 444 | $ | 154,570 | $ | 35,728 | $ | 35,728 | $ | - | 1 | % | - | - | Q1 2013 | Q1 2015 | ||||||||||||||||
| Nexus Sawgrass (formerly Sunrise Village) (6) | Sunrise, FL | 501 | 78,212 | 19,411 | 19,411 | - | 2 | % | - | - | Q2 2013 | Q2 2014 | ||||||||||||||||||||
| Projects Under Development - Unconsolidated | 945 | 232,782 | 55,139 | 55,139 | - | |||||||||||||||||||||||||||
| Projects Under Development | 945 | 232,782 | 55,139 | 55,139 | - | |||||||||||||||||||||||||||
| Total Unconsolidated Projects | 945 | $ | 232,782 | $ | 55,139 | $ | 55,139 | $ | - | |||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||||
| NOI CONTRIBUTION FROM CONSOLIDATED DEVELOPMENT PROJECTS | Total Capital | Q3 2011 | ||||||||||||||||||||||||||||||
| Projects Under Development | $ | 236,573 | $ | 10 | ||||||||||||||||||||||||||||
| Completed Not Stabilized | 406,270 | 4,544 | ||||||||||||||||||||||||||||||
| Completed and Stabilized During the Quarter | - | - | ||||||||||||||||||||||||||||||
| Total Consolidated Development NOI Contribution | $ | 642,843 | $ | 4,554 | ||||||||||||||||||||||||||||
| (1) | Total capital cost represents estimated cost for projects under development and/or developed 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) | Ten23 - The land under this development is subject to a long term ground lease. |
| (3) | Properties included here are substantially complete. However, they may still require additional exterior and interior work for all apartment units to be available for leasing. |
| (4) | The Company acquired these completed development projects prior to stabilization and has begun/continued lease-up activities. |
| (5) | Domain - In August 2011, the Company admitted an 80% institutional partner to an entity owning a developable land parcel in exchange for $28.4 million in cash and retained a 20% equity interest. This land parcel is now unconsolidated. Total project cost is approximately $154.6 million and construction will be predominantly funded with a long-term, non-recourse secured loan from the partner. The Company is responsible for constructing the project and has given certain construction cost overrun guarantees. The Company's remaining funding obligation is currently estimated at approximately $4.7 million. |
| (6) | Nexus Sawgrass - In 2010, the Company admitted an 80% institutional partner to an entity owning a developable land parcel in exchange for $11.7 million in cash and retained a 20% equity interest. This land parcel is now unconsolidated. Total project cost is approximately $78.2 million and construction will be predominantly funded with a long-term, non-recourse secured loan from the partner. The Company is responsible for constructing the project and has given certain construction cost overrun guarantees. The Company's remaining funding obligation is currently estimated at approximately $1.9 million. |
| Equity Residential | ||||||||||||||||||||||||||||||||||||||||||||||||
| Repairs and Maintenance Expenses and Capital Expenditures to Real Estate | ||||||||||||||||||||||||||||||||||||||||||||||||
| For the Nine Months Ended September 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Amounts in thousands except for apartment unit and per apartment unit amounts) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Repairs and Maintenance Expenses | Capital Expenditures to Real Estate | Total Expenditures | ||||||||||||||||||||||||||||||||||||||||||||||
| Total | Avg. Per | Avg. Per | Avg. Per | Avg. Per | Building | Avg. Per | Avg. Per | Avg. Per | ||||||||||||||||||||||||||||||||||||||||
| Apartment | Apartment | Apartment | Apartment | Replacements | Apartment | Improvements | Apartment | Apartment | Grand | Apartment | ||||||||||||||||||||||||||||||||||||||
| Units (1) | Expense (2) | Unit | Payroll (3) | Unit | Total | Unit | (4) | Unit | (5) | Unit | Total | Unit | Total | Unit | ||||||||||||||||||||||||||||||||||
| Same Store Properties (6) | 102,129 | $ | 67,958 | $ | 665 | $ | 55,843 | $ | 547 | $ | 123,801 | $ | 1,212 | $ | 53,872 | $ | 528 | $ | 35,948 | $ | 352 | $ | 89,820 | $ | 880 | (9 | ) | $ | 213,621 | $ | 2,092 | |||||||||||||||||
| Non-Same Store Properties (7) | 11,981 | 8,575 | 804 | 6,426 | 602 | 15,001 | 1,406 | 4,787 | 449 | 9,388 | 880 | 14,175 | 1,329 | 29,176 | 2,735 | |||||||||||||||||||||||||||||||||
| Other (8) | - | 3,679 | 6,167 | 9,846 | 1,862 | 213 | 2,075 | 11,921 | ||||||||||||||||||||||||||||||||||||||||
| Total | 114,110 | $ | 80,212 | $ | 68,436 | $ | 148,648 | $ | 60,521 | $ | 45,549 | $ | 106,070 | $ | 254,718 | |||||||||||||||||||||||||||||||||
| (1) | Total Apartment Units - Excludes 4,901 military housing apartment units for which repairs and maintenance expenses and capital expenditures to real estate are self-funded and do not consolidate into the Company's results. |
| (2) | Repairs and Maintenance Expenses - Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs. |
| (3) | Maintenance Payroll - Includes payroll and related expenses for maintenance staff. |
| (4) | Replacements - Includes new expenditures inside the apartment units such as appliances, mechanical equipment, fixtures and flooring, including carpeting. Replacements for same store properties also include $29.2 million spent during the nine months ended September 30, 2011 on apartment unit renovations/rehabs (primarily kitchens and baths) on 4,160 apartment units (equating to about $7,000 per apartment unit rehabbed) designed to reposition these assets for higher rental levels in their respective markets. In 2011, the Company expects to spend approximately $41.0 million rehabbing 5,500 apartment units (equating to about $7,500 per apartment unit rehabbed). |
| (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) | Same Store Properties - Primarily includes all properties acquired or completed and stabilized prior to January 1, 2010, less properties subsequently sold. |
| (7) | Non-Same Store Properties - Primarily includes all properties acquired during 2010 and 2011, plus any properties in lease-up and not stabilized as of January 1, 2010. Per apartment unit amounts are based on a weighted average of 10,666 apartment units. |
| (8) | Other - Primarily includes expenditures for properties sold during the period. |
| (9) | For 2011, the Company estimates that it will spend approximately $1,200 per apartment unit of capital expenditures for its same store properties inclusive of apartment unit renovation/rehab costs, or $850 per apartment unit excluding apartment unit renovation/rehab costs. |
| Equity Residential | |||||||||||||||||
| Discontinued Operations | |||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||
| Nine Months Ended | Quarter Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| REVENUES | |||||||||||||||||
| Rental income | $ | 87,279 | $ | 213,221 | $ | 3,764 | $ | 75,310 | |||||||||
| Total revenues | 87,279 | 213,221 | 3,764 | 75,310 | |||||||||||||
| EXPENSES (1) | |||||||||||||||||
| Property and maintenance | 46,177 | 85,544 | 2,202 | 31,051 | |||||||||||||
| Real estate taxes and insurance | 5,369 | 17,162 | 151 | 5,619 | |||||||||||||
| Depreciation | 14,344 | 43,873 | 901 | 15,701 | |||||||||||||
| General and administrative | 49 | 32 | 2 | 13 | |||||||||||||
| Total expenses | 65,939 | 146,611 | 3,256 | 52,384 | |||||||||||||
| Discontinued operating income | 21,340 | 66,610 | 508 | 22,926 | |||||||||||||
| Interest and other income | 140 | 640 | 42 | 7 | |||||||||||||
| Interest (2): | |||||||||||||||||
| Expense incurred, net | (83 | ) | (6,032 | ) | (21 | ) | (2,056 | ) | |||||||||
| Amortization of deferred financing costs | (640 | ) | (252 | ) | - | (28 | ) | ||||||||||
| Income and other tax (expense) benefit | 31 | (66 | ) | 93 | (13 | ) | |||||||||||
| Discontinued operations | 20,788 | 60,900 | 622 | 20,836 | |||||||||||||
| Net gain on sales of discontinued operations | 759,100 | 69,538 | 76,864 | 9,285 | |||||||||||||
| Discontinued operations, net | $ | 779,888 | $ | 130,438 | $ | 77,486 | $ | 30,121 | |||||||||
| (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 | |||||||||||||||||||||||||
| Normalized FFO Guidance Reconciliations and Non-Comparable Items | |||||||||||||||||||||||||
| (Amounts in thousands except per share data) | |||||||||||||||||||||||||
| (All per share data is diluted) | |||||||||||||||||||||||||
| Normalized FFO Guidance Reconciliations | |||||||||||||||||||||||||
| Normalized | |||||||||||||||||||||||||
| FFO Reconciliations | |||||||||||||||||||||||||
| Guidance Q3 2011 | |||||||||||||||||||||||||
| to Actual Q3 2011 | |||||||||||||||||||||||||
| Amounts | Per Share | ||||||||||||||||||||||||
| Guidance Q3 2011 Normalized FFO - Diluted (2) (3) | $ | 189,938 | $ | 0.606 | |||||||||||||||||||||
| Property NOI | 2,353 | 0.008 | |||||||||||||||||||||||
| Other | 818 | 0.003 | |||||||||||||||||||||||
| Actual Q3 2011 Normalized FFO - Diluted (2) (3) | $ | 193,109 | $ | 0.617 | |||||||||||||||||||||
| Non-Comparable Items – Adjustments from FFO to Normalized FFO (2) (3) | |||||||||||||||||||||||||
Nine Months Ended | Quarter Ended | ||||||||||||||||||||||||
| 2011 | 2010 | Variance | 2011 | 2010 | Variance | ||||||||||||||||||||
| Impairment | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||
| Asset impairment and valuation allowances | - | - | - | - | - | - | |||||||||||||||||||
| Property acquisition costs (other expenses) | 5,266 | 6,001 | (735 | ) | 1,514 | 2,037 | (523 | ) | |||||||||||||||||
| Write-off of pursuit costs (other expenses) | 4,052 | 3,512 | 540 | 1,014 | 1,450 | (436 | ) | ||||||||||||||||||
| Property acquisition costs and write-off of pursuit costs (other expenses) | 9,318 | 9,513 | (195 | ) | 2,528 | 3,487 | (959 | ) | |||||||||||||||||
| Prepayment premiums/penalties (interest expense) | - | 158 | (158 | ) | - | 158 | (158 | ) | |||||||||||||||||
| Write-off of unamortized deferred financing costs (interest expense) | 4,347 | 1,004 | 3,343 | 2,233 | 75 | 2,158 | |||||||||||||||||||
| Write-off of unamortized (premiums)/discounts/OCI (interest expense) | (89 | ) | (324 | ) | 235 | (89 | ) | (324 | ) | 235 | |||||||||||||||
| Non-cash convertible debt discount (interest expense) | 4,992 | 5,835 | (843 | ) | 1,102 | 1,945 | (843 | ) | |||||||||||||||||
| Unrealized (gain) due to ineffectiveness of forward starting swaps (interest expense) | - | - | - | (2,569 | ) | - | (2,569 | ) | |||||||||||||||||
Debt extinguishment (gains) losses, including prepayment penalties, preferred share redemptions and non-cash convertible debt discounts | 9,250 | 6,673 | 2,577 | 677 | 1,854 | (1,177 | ) | ||||||||||||||||||
| Net (gain) loss on sales of land parcels | (4,217 | ) | 1,161 | (5,378 | ) | - | 1,161 | (1,161 | ) | ||||||||||||||||
| Net incremental (gain) loss on sales of condominium units | (2,050 | ) | (619 | ) | (1,431 | ) | (935 | ) | 12 | (947 | ) | ||||||||||||||
| Income and other tax expense (benefit) - Condo sales | (66 | ) | 35 | (101 | ) | (92 | ) | 16 | (108 | ) | |||||||||||||||
| (Gain) loss on sale of Equity Corporate Housing (ECH), net of severance | (221 | ) | - | (221 | ) | 2 | - | 2 | |||||||||||||||||
(Gains) losses on sales of non-operating assets, net of income and other tax expense (benefit) | (6,554 | ) | 577 | (7,131 | ) | (1,025 | ) | 1,189 | (2,214 | ) | |||||||||||||||
| Prospect Towers garage insurance proceeds (real estate taxes and insurance) | (2,725 | ) | - | (2,725 | ) | (1,125 | ) | - | (1,125 | ) | |||||||||||||||
| Insurance/litigation settlement proceeds (interest and other income) | - | (5,192 | ) | 5,192 | - | - | - | ||||||||||||||||||
| Termination of royalty participation in LRO (interest and other income) | (4,537 | ) | - | (4,537 | ) | (4,537 | ) | - | (4,537 | ) | |||||||||||||||
| Forfeited deposits (interest and other income) | (500 | ) | - | (500 | ) | - | - | - | |||||||||||||||||
| Other miscellaneous non-comparable items | (7,762 | ) | (5,192 | ) | (2,570 | ) | (5,662 | ) | - | (5,662 | ) | ||||||||||||||
| Non-comparable items – Adjustments from FFO to Normalized FFO (2) (3) | $ | 4,252 | $ | 11,571 | $ | (7,319 | ) | $ | (3,482 | ) | $ | 6,530 | $ | (10,012 | ) | ||||||||||
| Note: See page 26 for the definitions, the footnotes referenced above and the reconciliations of EPS to FFO and Normalized FFO. | |||||||||||||||||||||||||
| Equity Residential | ||||||
| Normalized FFO Guidance and Assumptions | ||||||
| The guidance/projections provided below are based on current expectations and are forward-looking. All | ||||||
| guidance is given on a Normalized FFO basis. | ||||||
2011 Normalized FFO Guidance (per share diluted) | ||||||
| Q4 2011 | 2011 | |||||
| Expected Normalized FFO (2) (3) | $0.63 to $0.67 | $2.41 to $2.45 | ||||
2011 Same Store Assumptions | ||||||
| Physical occupancy | 95.2% | |||||
| Revenue change | 5.0% | |||||
| Expense change | 0.5% | |||||
| NOI change | 7.7% | |||||
| (Note: 30 basis point change in NOI percentage = $0.01 per share change in EPS/FFO) | ||||||
2011 Transaction Assumptions | ||||||
| Consolidated rental acquisitions | $1.25 billion | |||||
| Consolidated rental dispositions | $1.4 billion | |||||
| Capitalization rate spread | 130 basis points | |||||
2011 Debt Assumptions (see Note) | ||||||
| Weighted average debt outstanding | $9.3 billion to $9.4 billion | |||||
| Weighted average interest rate (reduced for capitalized interest) | 4.95% | |||||
| Interest expense | $460.0 million to $465.0 million | |||||
2011 Other Guidance Assumptions (see Note) | ||||||
| General and administrative expense | $43.0 million | |||||
| Interest and other income | $1.7 million | |||||
| Income and other tax expense | $1.0 million | |||||
| Weighted average Common Shares and Units - Diluted | 312.2 million | |||||
Note: All guidance is given on a Normalized FFO basis. Therefore, certain items excluded from Normalized FFO, such as debt extinguishment costs/prepayment penalties and the write-off of pursuit and property acquisition costs, are not included in the estimates provided on this page. See page 26 for the definitions, the footnotes referenced above and the reconciliations of EPS to FFO and Normalized FFO.
| Equity Residential | ||||||||||||||
| Additional Reconciliations, Definitions and Footnotes | ||||||||||||||
| (Amounts in thousands except per share data) | ||||||||||||||
| (All per share data is diluted) | ||||||||||||||
| The guidance/projections provided below are based on current expectations and are forward-looking. | ||||||||||||||
| Reconciliations of EPS to FFO and Normalized FFO for Pages 6, 24 and 25 | ||||||||||||||
| Expected | Expected | |||||||||||||
| Expected Q3 2011 | Q4 2011 | 2011 | ||||||||||||
| Amounts | Per Share | Per Share | Per Share | |||||||||||
| Expected Earnings - Diluted (5) | $ | 163,210 | $ | 0.521 | $0.12 to $0.16 | $2.74 to $2.78 | ||||||||
| Add: Expected depreciation expense | 160,379 | 0.511 | 0.54 | 2.11 | ||||||||||
| Less: Expected net gain on sales (5) | (134,817 | ) | (0.430 | ) | (0.05 | ) | (2.47 | ) | ||||||
| Expected FFO - Diluted (1) (3) | 188,772 | 0.602 | 0.61 to 0.65 | 2.38 to 2.42 | ||||||||||
| Asset impairment and valuation allowances | - | - | - | - | ||||||||||
| Property acquisition costs and write-off of pursuit costs (other expenses) | 2,465 | 0.008 | 0.02 | 0.05 | ||||||||||
Debt extinguishment (gains) losses, including prepayment penalties, preferred share redemptions and non-cash convertible debt discounts | 3,515 | 0.011 | - | 0.03 | ||||||||||
(Gains) losses on sales of non-operating assets, net of income and other tax expense (benefit) | (277 | ) | (0.001 | ) | - | (0.02 | ) | |||||||
| Other miscellaneous non-comparable items | (4,537 | ) | (0.014 | ) | - | (0.03 | ) | |||||||
| Expected Normalized FFO - Diluted (2) (3) | $ | 189,938 | $ | 0.606 | $0.63 to $0.67 | $2.41 to $2.45 | ||||||||
| Definitions and Footnotes for Pages 6, 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 apartment units to condominiums, it simultaneously discontinues depreciation of such property. |
| (2) | Normalized funds from operations ("Normalized FFO") begins with FFO and excludes: |
| • the impact of any expenses relating to asset impairment and valuation allowances; | |
| • property acquisition and other transaction costs related to mergers and acquisitions and pursuit cost write-offs (other expenses); | |
| • gains and losses from early debt extinguishment, including prepayment penalties, preferred share redemptions and the cost related to the implied option value of non-cash convertible debt discounts; | |
| • gains and losses on the sales of non-operating assets, including gains and losses from land parcel and condominium sales, net of the effect of income tax benefits or expenses; and | |
| • other miscellaneous non-comparable items. | |
| (3) | The Company believes that FFO and FFO available to Common Shares and 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 Units can help compare the operating performance of a company's real estate between periods or as compared to different companies. The company also believes that Normalized FFO and Normalized FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the company's operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company's actual operating results. FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and 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, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and 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, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and 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. |
| (4) | FFO available to Common Shares and Units and Normalized FFO available to Common Shares and Units are 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 "Noncontrolling Interests - Operating Partnership". Subject to certain restrictions, the Noncontrolling Interests - Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis. |
| (5) | 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. |
| Same Store NOI Reconciliation for Page 10 | |||||||||||||||||
| The following tables present reconciliations of operating income per the consolidated statements of operations to NOI for the September YTD 2011 and Third Quarter 2011 Same Store Properties: | |||||||||||||||||
| Nine Months Ended September 30, | Quarter Ended September 30, | ||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| Operating income | $ | 414,159 | $ | 301,887 | $ | 151,076 | $ | 105,264 | |||||||||
| Adjustments: | |||||||||||||||||
| Non-same store operating results | (108,921 | ) | (31,164 | ) | (32,975 | ) | (5,227 | ) | |||||||||
| Fee and asset management revenue | (6,682 | ) | (7,596 | ) | (2,928 | ) | (2,128 | ) | |||||||||
| Fee and asset management expense | 3,207 | 4,242 | 1,250 | 679 | |||||||||||||
| Depreciation | 482,039 | 457,822 | 164,552 | 158,318 | |||||||||||||
| General and administrative | 32,462 | 31,029 | 10,121 | 10,221 | |||||||||||||
| Same store NOI | $ | 816,264 | $ | 756,220 | $ | 291,096 | $ | 267,127 | |||||||||
CONTACT:
Equity Residential
Marty McKenna, (312) 928-1901