Equity Residential (EQR) 10-Q 6 Aug 09 2009 Q2 Quarterly report Financial data

Statement Of Financial Position

Statement Of Financial Position Unclassified - Real Estate Operations (USD $)
In Thousands	Jun. 30, 2009	Dec. 31, 2008
Investment in real estate
Land	$3,669,394	$3,671,299
Depreciable property	13,993,241	13,908,594
Projects under development	725,598	855,473
Land held for development	239,377	254,873
Investment in real estate	18,627,610	18,690,239
Accumulated depreciation	(3,759,948)	(3,561,300)
Investment in real estate, net	14,867,662	15,128,939
Cash and cash equivalents	667,495	890,794
Investments in unconsolidated entities	3,666	5,795
Deposits - restricted	158,181	152,372
Escrow deposits - mortgage	17,541	19,729
Deferred financing costs, net	54,283	53,817
Other assets	154,234	283,664
Total assets	15,923,062	16,535,110
Liabilities:
Mortgage notes payable	5,028,736	5,036,930
Notes, net	4,945,244	5,447,012
Lines of credit	0	0
Accounts payable and accrued expenses	113,915	108,463
Accrued interest payable	107,566	113,846
Other liabilities	258,677	289,562
Security deposits	62,035	64,355
Distributions payable	142,187	141,843
Total liabilities	10,658,360	11,202,011
Commitments and contingencies	0	0
Redeemable Noncontrolling Interests - Operating Partnership	185,923	264,394
Shareholders' equity:
Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized; 1,950,925 shares issued and outstanding as of June 30, 2009 and 1,951,475 shares issued and outstanding as of December 31, 2008	208,773	208,786
Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 273,975,692 shares issued and outstanding as of June 30, 2009 and 272,786,760 shares issued and outstanding as of December 31, 2008	2,740	2,728
Paid in capital	4,373,983	4,273,489
Retained earnings	365,705	456,152
Accumulated other comprehensive loss	(22,222)	(35,799)
Total shareholders' equity	4,928,979	4,905,356
Noncontrolling Interests:
Operating Partnership	136,251	137,645
Preference Interests and Units	184	184
Partially Owned Properties	13,365	25,520
Total Noncontrolling Interests	149,800	163,349
Total equity	5,078,779	5,068,705
Total liabilities and equity	$15,923,062	$16,535,110

1_Statement Of Financial Positi

Statement Of Financial Position Unclassified - Real Estate Operations (Parenthetical) (USD $)
	Jun. 30, 2009	Dec. 31, 2008
Preferred Shares of beneficial interest, par value	0.01	0.01
Preferred Shares of beneficial interest, shares authorized	100,000,000	100,000,000
Preferred Shares of beneficial interest, shares issued	1,950,925	1,951,475
Preferred Shares of beneficial interest, shares outstanding	1,950,925	1,951,475
Common Shares of beneficial interest, par value	0.01	0.01
Common Shares of beneficial interest, shares authorized	1,000,000,000	1,000,000,000
Common Shares of beneficial interest, shares issued	273,975,692	272,786,760
Common Shares of beneficial interest, shares outstanding	273,975,692	272,786,760

Statement Of Income Real Estate

Statement Of Income Real Estate Investment Trusts (USD $)
In Thousands, except Per Share data	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
REVENUES
Rental income	$502,738	$510,567	$1,007,540	$1,003,532
Fee and asset management	2,412	2,716	5,275	5,010
Total revenues	505,150	513,283	1,012,815	1,008,542
EXPENSES
Property and maintenance	123,430	130,402	254,977	261,248
Real estate taxes and insurance	53,824	51,457	108,799	103,884
Property management	18,718	19,491	37,732	40,667
Fee and asset management	1,982	1,991	3,985	4,171
Depreciation	149,909	139,812	298,194	279,253
General and administrative	10,201	11,774	20,595	24,191
Impairment	11,124	0	11,124	0
Total expenses	369,188	354,927	735,406	713,414
Operating income	135,962	158,356	277,409	295,128
Interest and other income	6,622	4,808	12,639	8,167
Other expenses	(14)	(604)	(306)	(780)
Interest:
Expense incurred, net	(115,866)	(119,511)	(239,565)	(238,780)
Amortization of deferred financing costs	(3,255)	(2,178)	(6,220)	(4,338)
Income before income and other taxes, (loss) from investments in unconsolidated entities, net gain (loss) on sales of unconsolidated entities and discontinued operations	23,449	40,871	43,957	59,397
Income and other tax (expense) benefit	(259)	(1,628)	(2,389)	(4,622)
(Loss) from investments in unconsolidated entities	(2,026)	(95)	(2,221)	(190)
Net gain (loss) on sales of unconsolidated entities	(6)	0	2,759	0
Income from continuing operations	21,158	39,148	42,106	54,585
Discontinued operations, net	84,774	100,845	149,247	232,936
Net income	105,932	139,993	191,353	287,521
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership	(5,729)	(8,348)	(10,420)	(17,481)
Preference Interests and Units	(3)	(3)	(7)	(7)
Partially Owned Properties	5	(1,391)	74	(1,659)
Net income attributable to controlling interests	100,205	130,251	181,000	268,374
Preferred distributions	(3,620)	(3,626)	(7,240)	(7,259)
Net income available to Common Shares	$96,585	$126,625	$173,760	$261,115
Earnings per share - basic:
Income from continuing operations available to Common Shares	0.06	0.12	0.12	0.16
Net income available to Common Shares	0.35	0.47	0.64	0.97
Weighted average Common Shares outstanding	272,901	269,608	272,614	269,196
Earnings per share - diluted:
Income from continuing operations available to Common Shares	0.06	0.12	0.12	0.16
Net income available to Common Shares	0.35	0.46	0.64	0.96
Weighted average Common Shares outstanding	289,338	290,445	289,152	289,921
Distributions declared per Common Share outstanding	0.4825	0.4825	0.965	0.965

Statement Of Other Comprehensiv

Statement Of Other Comprehensive Income (USD $)
In Thousands	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Comprehensive income:
Net income	$105,932	$139,993	$191,353	$287,521
Other comprehensive income (loss) - derivative instruments:
Unrealized holding gains (losses) arising during the period	9,995	3,941	12,655	(5,207)
Losses reclassified into earnings from other comprehensive income	812	703	2,305	1,216
Other	0	0	449	0
Other comprehensive income (loss) - other instruments:
Unrealized holding gains (losses) arising during the period	1,203	24	3,111	(372)
(Gains) realized during the period	(4,943)	0	(4,943)	0
Comprehensive income	112,999	144,661	204,930	283,158
Comprehensive (income) attributable to Noncontrolling Interests	(5,727)	(9,742)	(10,353)	(19,147)
Comprehensive income attributable to controlling interests	$107,272	$134,919	$194,577	$264,011

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect Real Estate (USD $)
In Thousands	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$191,353	$287,521
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	301,835	294,174
Amortization of deferred financing costs	6,252	4,340
Amortization of discounts on investment securities	(1,658)	0
Amortization of discounts and premiums on debt	2,541	2,697
Amortization of deferred settlements on derivative instruments	1,604	527
Impairment	11,124	0
Write-off of pursuit costs	162	759
Transaction costs	144	21
Loss from investments in unconsolidated entities	2,221	190
Distributions from unconsolidated entities - return on capital	82	49
Net (gain) on sales of investment securities	(4,943)	0
Net (gain) on sales of unconsolidated entities	(2,759)	0
Net (gain) on sales of discontinued operations	(145,798)	(214,797)
(Gain) on debt extinguishments	(1,985)	0
Compensation paid with Company Common Shares	9,533	11,677
Changes in assets and liabilities:
Decrease (increase) in deposits - restricted	1,801	(3,477)
(Increase) in other assets	(2,656)	(13,287)
Increase in accounts payable and accrued expenses	14,315	37,702
(Decrease) in accrued interest payable	(6,280)	(7,732)
(Decrease) in other liabilities	(8,958)	(13,304)
(Decrease) increase in security deposits	(2,320)	2,066
Net cash provided by operating activities	365,610	389,126
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate - acquisitions	0	(344,230)
Investment in real estate - development/other	(197,362)	(275,074)
Improvements to real estate	(59,120)	(86,381)
Additions to non-real estate property	(1,107)	(1,413)
Interest capitalized for real estate under development	(21,018)	(29,477)
Proceeds from disposition of real estate, net	347,519	494,215
Proceeds from disposition of unconsolidated entities	0	2,629
Distributions from unconsolidated entities - return of capital	2,585	0
Purchase of investment securities	(52,822)	0
Proceeds from sale of investment securities	181,692	0
Transaction costs	(144)	(21)
(Increase) decrease in deposits on real estate acquisitions, net	(29,309)	25,984
Decrease in mortgage deposits	2,188	537
Acquisition of Noncontrolling Interests - Partially Owned Properties	(9,220)	(20)
Net cash provided by (used for) investing activities	163,882	(213,251)
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan and bond acquisition costs	(8,851)	(3,902)
Mortgage notes payable:
Proceeds	614,409	619,745
Restricted cash	21,699	13,662
Lump sum payoffs	(593,453)	(132,232)
Scheduled principal repayments	(9,666)	(12,449)
Prepayment premiums/fees	(35)	0
Notes, net:
Lump sum payoffs	(505,849)	0
Gain on debt extinguishments	2,020	0
Lines of credit:
Proceeds	0	841,000
Repayments	0	(980,000)
Proceeds from (payments on) settlement of derivative instruments	11,251	(13,256)
Proceeds from sale of Common Shares	3,960	4,320
Proceeds from exercise of options	128	6,939
Common Shares repurchased and retired	(1,124)	(10,935)
Payment of offering costs	(131)	(45)
Other financing activities, net	(8)	(8)
Contributions - Noncontrolling Interests - Partially Owned Properties	874	1,221
Contributions - Noncontrolling Interests - Operating Partnership	78	0
Distributions:
Common Shares	(263,636)	(260,426)
Preferred Shares	(7,240)	(7,268)
Preference Interests and Units	(7)	(7)
Noncontrolling Interests - Operating Partnership	(15,914)	(17,718)
Noncontrolling Interests - Partially Owned Properties	(1,296)	(1,747)
Net cash (used for) provided by financing activities	(752,791)	46,894
Net (decrease) increase in cash and cash equivalents	(223,299)	222,769
Cash and cash equivalents, beginning of period	890,794	50,831
Cash and cash equivalents, end of period	667,495	273,600
SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized	242,010	244,303
Net cash paid for income and other taxes	3,343	2,240
Real estate acquisitions/dispositions/other:
Mortgage loans assumed	0	24,946
Valuation of OP Units issued	0	849
Mortgage loans (assumed) by purchaser	(4,387)	0
Amortization of deferred financing costs:
Investment in real estate, net	(2,133)	(1,048)
Deferred financing costs, net	8,385	5,388
Amortization of discounts and premiums on debt:
Investment in real estate, net	(3)	0
Mortgage notes payable	(3,091)	(3,147)
Notes, net	5,635	5,844
Amortization of deferred settlements on derivative instruments:
Other liabilities	(701)	(689)
Accumulated other comprehensive loss	2,305	1,216
Unrealized (gain) loss on derivative instruments:
Other assets	(7,894)	(3,090)
Mortgage notes payable	(1,806)	1,079
Notes, net	(1,105)	1,233
Other liabilities	(1,850)	5,985
Accumulated other comprehensive loss	12,655	(5,207)
Proceeds from (payments on) settlement of derivative instruments:
Other assets	11,251	(39)
Other liabilities	$0	($13,217)

Statement Of Shareholders Equit

Statement Of Shareholders Equity And Other Comprehensive Income (USD $)
In Thousands			PAID IN CAPITAL	RETAINED EARNINGS	Accumulated Other Comprehensive Income [Member]	OPERATING PARTNERSHIP	PREFERENCE INTERESTS AND UNITS	Partially Owned Properties [Member]	Total
Balance, beginning of year at Dec. 31, 2008	$208,786	$2,728	$4,273,489	$456,152	($35,799)	$137,645	$184	$25,520	$5,068,705
Common Share Issuance:
Conversion of Preferred Shares into Common Shares			13
Conversion of OP Units into Common Shares		6	11,132
Exercise of share options			128
Employee Share Purchase Plan (ESPP)		3	3,957
Issuance of LTIP Units to Noncontrolling Interests						78
Accumulated other comprehensive income - derivative instruments:
Unrealized holding gains arising during the period					12,655				12,655
Losses reclassified into earnings from other comprehensive income					2,305				2,305
Other					449				449
Conversion of OP Units into Common Shares		6	11,132
Conversion of 7.00% Series E Cumulative Convertible	(13)
Share-based employee compensation expense:
Performance shares			108
Restricted shares			6,004
Share options			3,112
ESPP discount			840
Conversion of OP Units held by Noncontrolling Interests into OP Units held by General Partner						(11,138)
Accumulated other comprehensive income - other instruments:
Unrealized holding gains arising during the period					3,111				3,111
(Gains) realized during the period					(4,943)				(4,943)
Employee Share Purchase Plan (ESPP)		3	3,957
Common Shares repurchased and retired			(1,124)
Equity compensation associated with Noncontrolling Interests						599
Share-based employee compensation expense:
Restricted/performance shares		3
Offering costs			(131)
Net income (loss)				181,000		10,420		(74)	191,353
Supplemental Executive Retirement Plan (SERP)			12,831
Contributions by Noncontrolling Interests								874
Common Share distributions				(264,207)
Acquisition of Noncontrolling Interests - Partially Owned Properties			(513)
Distributions to Noncontrolling Interests						(15,687)		(1,304)
Preferred Share distributions				(7,240)
Change in market value of Redeemable Noncontrolling Interests - Operating Partnership			67,674
Change in carrying value of Redeemable Noncontrolling Interests - Operating Partnership						10,797
Acquisition of additional ownership interest by Operating Partnership								(11,651)
Adjustment for Noncontrolling Interests ownership in Operating Partnership			(3,537)			3,537
Balance, end of period at Jun. 30, 2009	208,773	2,740	4,373,983	365,705	(22,222)	136,251	184	13,365	5,078,779
Balance, beginning of year at Mar. 31, 2009							184
Share-based employee compensation expense:
Balance, end of period at Jun. 30, 2009							$184

Notes to Financial Statements

Notes to Financial Statements
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
1.Business	1. Business Equity Residential (EQR), a Maryland real estate investment trust (REIT) formed in March 1993, is an SP 500 company focused on the acquisition, development and management of high quality apartment properties in top United States growth markets. EQR has elected to be taxed as a REIT. EQR is the general partner of, and as of June30, 2009 owned an approximate 94.4% ownership interest in, ERP Operating Limited Partnership, an Illinois limited partnership (the Operating Partnership). The Company is structured as an umbrella partnership REIT (UPREIT) under which all property ownership and related business operations are conducted through the Operating Partnership and its subsidiaries. References to the Company include EQR, the Operating Partnership and those entities owned or controlled by the Operating Partnership and/or EQR. As of June30, 2009, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 526 properties in 23 states and the District of Columbia consisting of 143,856 units. The ownership breakdown includes (table does not include various uncompleted development properties): Properties Units Wholly Owned Properties 459 124,627 Partially Owned Properties: Consolidated 25 5,110 Unconsolidated 40 9,560 Military Housing (Fee Managed) 2 4,559 526 143,856
2.Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and certain reclassifications considered necessary for a fair presentation have been included. Certain reclassifications have been made to the prior period financial statements in order to conform to the current year presentation. Operating results for the six months ended June30, 2009 are not necessarily indicative of the results that may be expected for the year ending December31, 2009. In preparation of the Companys financial statements in conformity with accounting principles generally accepted in the United States, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The balance sheet at December31, 2008 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, including definitions of capitalized terms not defined herein, refer to the consolidated financial statements and footnotes thereto included in the Companys annual report on Form 10-K for the year ended December31, 2008. Income and Other Taxes Due to the structure of the Company as a REIT and the nature of the operations of its operating properties, no provision for federal income taxes has been made at the EQR level. Historically, the Company has generally only incurred certain state and local income, excise and franchise taxes. The Company has elected Taxable REIT Subsidiary (TRS) status for certain of its corporate subsidiaries, primarily those entities engaged in condominium conversion and corporate housing activities and as a result, these entities will incur both federal and state income taxes on any taxable income of such entities. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates for which the temporary differences are expected to be recovered or settled. The effect of deferred tax assets and liabilities are recognized in earnings in the period enacted. The Companys deferred tax assets are generally the result of tax affected amortization
3.Equity and Redeemable Noncontrolling Interests	3. Equity and Redeemable Noncontrolling Interests The following tables present the changes in the Companys issued and outstanding Common Shares and Units (which includes OP Units and Long-Term Incentive Plan (LTIP) Units) for the six months ended June30, 2009: 2009 Common Shares Common Shares outstanding at January1, 272,786,760 Common Shares Issued: Conversion of Series E Preferred Shares 612 Conversion of OP Units 629,061 Exercise of options 6,216 Employee Share Purchase Plan 263,003 Restricted share grants, net 337,490 Common Shares Other: Repurchased and retired (47,450) Common Shares outstanding at June30, 273,975,692 Units Units outstanding at January1, 16,679,777 LTIP Unit issuance 155,189 Conversion of OP Units to Common Shares (629,061) Units outstanding at June30, 16,205,905 Total Common Shares and Units outstanding at June30, 290,181,597 Units Ownership Interest in Operating Partnership 5.6% LTIP Units Issued: Issuance per unit $0.50 Issuance contribution valuation $0.1 million During the six months ended June30, 2009, the Company repurchased 47,450 of its Common Shares at an average price of $23.69 per share for total consideration of $1.1 million. These shares were retired subsequent to the repurchases. All of the shares repurchased during the six months ended June30, 2009 were repurchased from employees at the then current market prices to cover the minimum statutory tax withholding obligations related to the vesting of employees restricted shares. EQR has authorization to repurchase an additional $466.5 million of its shares as of June30, 2009. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units, as well as the equity positions of the holders of LTIP Units, are collectively referred to as the Noncontrolling Interests Operating Partnership. Subject to certain exceptions (including the book-up requirements of LTIP Units), the Noncontrolling Interests Operating Partnership may exchange their Units with EQR for EQR Common Shares on a one-for-one basis. A portion of the Noncontrolling Interests Operating Partnership Units are classified as mezzanine equity in accordance with EITF Topic D-98, Classification and Measurement of Redeemable Securities (EITF D-98) and EITF 00-19, Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in a Companys Own Stock (EITF 00-19), as they do not meet the requirements for permanent equity classification. The Operating Partnership has the right but not the obligation to make a cash payment to any and all holders of Units requesting an exchange from EQR. However, no aspect of an exchange requires a cash settlement by the Operating Partnership under any circumstances. Once the Operating Partnership elects not to redeem the Units for cash, EQR is obligated, either by contract or securities law, to deliver registered EQR Common Shares for a portion of the Units. This portion of the Units
4.Real Estate	4. Real Estate The following table summarizes the carrying amounts for the Companys investment in real estate (at cost) as of June30, 2009 and December31, 2008 (amounts in thousands): June30, 2009 December31, 2008 Land $ 3,669,394 $ 3,671,299 Depreciable property: Buildings and improvements 12,896,417 12,836,310 Furniture, fixtures and equipment 1,096,824 1,072,284 Projects under development: Land 140,618 175,355 Construction-in-progress 584,980 680,118 Land held for development: Land 181,430 205,757 Construction-in-progress 57,947 49,116 Investment in real estate 18,627,610 18,690,239 Accumulated depreciation (3,759,948) (3,561,300) Investment in real estate, net $ 14,867,662 $ 15,128,939 During the six months ended June30, 2009, the Company disposed of the following to unaffiliated parties (sales price in thousands): Properties Units Sales Price Rental Properties: Consolidated 23 4,199 $ 353,390 Unconsolidated (1) 1 216 20,700 Condominium Conversion Properties 1 23 4,669 Total 25 4,438 $ 378,759 (1) The Company owned a 25% interest in this unconsolidated rental property. Sales price listed is the gross sales price. The Company recognized a net gain on sales of discontinued operations of approximately $145.8 million and a net gain on sales of unconsolidated entities of approximately $2.8 million on the above sales.
5.Commitments to Acquire/Dispose of Real Estate	5. Commitments to Acquire/Dispose of Real Estate As of July30, 2009, in addition to the properties that were subsequently disposed of as discussed in Note 16, the Company had entered into separate agreements to dispose of the following (sales price in thousands): Properties Units SalesPrice Rental Properties: Consolidated 41 6,035 $ 534,089 Unconsolidated 2 516 37,000 Total 43 6,551 $ 571,089 The closings of these pending transactions are subject to certain conditions and restrictions, therefore, there can be no assurance that these transactions will be consummated or that the final terms will not differ in material respects from those summarized in the preceding paragraphs.
6.Investments in Partially Owned Entities	6. Investments in Partially Owned Entities The Company has co-invested in various properties with unrelated third parties which are either consolidated or accounted for under the equity method of accounting (unconsolidated). The following table summarizes the Companys investments in partially owned entities as of June30, 2009 (amounts in thousands except for project and unit amounts): Consolidated Unconsolidated Development Projects Held for and/orUnder Development Completed, Not Stabilized(4) Completed and Stabilized Other Total Institutional Joint Ventures Total projects (1) - 2 2 21 25 40 Total units (1) - 735 432 3,943 5,110 9,560 Debt Secured (2): EQR Ownership (3) $ 332,765 $ 161,981 $ 61,260 $ 218,087 $ 774,093 $ 109,958 Noncontrolling Ownership - - - 83,957 83,957 329,874 Total (at 100%) $ 332,765 $ 161,981 $ 61,260 $ 302,044 $ 858,050 $ 439,832 (1) Project and unit counts exclude all uncompleted development projects until those projects are completed. (2) All debt is non-recourse to the Company with the exception of $42.2 million in mortgage debt on various development projects. In addition, $66.0 million in mortgage debt on one development project will become recourse to the Company upon completion of that project. (3) Represents the Companys 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.
7.Deposits - Restricted	7. Deposits Restricted The following table presents the Companys restricted deposits as of June30, 2009 and December31, 2008 (amounts in thousands): June30, December31, 2009 2008 Taxdeferred (1031)exchange proceeds $ 29,309 $ - Earnest money on pending acquisitions 1,200 1,200 Restricted deposits on debt (1) 74,530 96,229 Resident security and utility deposits 40,707 41,478 Other 12,435 13,465 Totals $ 158,181 $ 152,372 (1) Primarily represents amounts held in escrow by the lender and released as draw requests are made on fully funded development mortgage loans.
8.Mortgage Notes Payable	8. Mortgage Notes Payable As of June30, 2009, the Company had outstanding mortgage debt of approximately $5.0 billion. During the six months ended June30, 2009, the Company: Repaid $603.1 million of mortgage loans; Obtained $500.0 million of mortgage loan proceeds through the issuance of an 11-year cross-collateralized loan with an all-in fixed interest rate for 10 years at approximately 5.6% secured by 13 properties; Obtained $114.4 million of new mortgage loans primarily on development properties; and Was released from $4.4 million of mortgage debt assumed by the purchaser on a disposed property. As of June30, 2009, scheduled maturities for the Companys outstanding mortgage indebtedness were at various dates through September1, 2048. At June30, 2009, the interest rate range on the Companys mortgage debt was 0.18% to 12.465%. During the six months ended June30, 2009, the weighted average interest rate on the Companys mortgage debt was 4.86%.
9.Notes	9. Notes As of June30, 2009, the Company had outstanding unsecured notes of approximately $4.9 billion. During the six months ended June30, 2009, the Company repurchased at par $105.2 million of its 4.75% fixed rate public notes due June15, 2009 and $185.2 million of its 6.95% fixed rate public notes due March2, 2011 pursuant to a cash tender offer announced on January16, 2009. The Company wrote-off approximately $0.4 million of unamortized deferred financing costs and approximately $1.1 million of unamortized discounts on notes payable in connection with these repurchases. In addition, the Company repaid the remaining $122.2 million of its 4.75% fixed rate public notes at maturity and $75.8 million of its 5.20% fixed rate tax-exempt notes during the quarter ended June30, 2009. During the six months ended June30, 2009, the Company repurchased $17.5 million of its 3.85% convertible fixed rate public notes due August15, 2026 at a discount to par of approximately 11.6%. The Company recognized a gain on early debt extinguishment of $2.0 million and wrote-off approximately $0.1 million of unamortized deferred financing costs and approximately $0.8 million of unamortized discounts on notes payable in connection with these repurchases. As of June30, 2009, scheduled maturities for the Companys outstanding notes were at various dates through 2028. At June30, 2009, the interest rate range on the Companys notes was 0.63% to 7.57%. During the six months ended June30, 2009, the weighted average interest rate on the Companys notes was 5.34%.
10.Lines of Credit	10. Lines of Credit The Operating Partnership has a $1.5 billion unsecured revolving credit facility maturing on February28, 2012, with the ability to increase available borrowings by an additional $500.0 million by adding additional banks to the facility orobtaining the agreement of existing banks to increase their commitments. Advances under the credit facility bear interest at variable rates based upon LIBOR at various interest periods plus a spread (currently 0.5%) dependent upon the Operating Partnerships credit rating or based on bids received from the lending group. EQR has guaranteed the Operating Partnerships credit facility up to the maximum amount and for the full term of the facility. During the year ended December31, 2008, one of the providers of the Operating Partnerships unsecured revolving credit facility declared bankruptcy. Under the existing terms of the credit facility, the providers share is up to $75.0 million of potential borrowings. As a result, the Operating Partnerships borrowing capacity under the unsecured revolving credit facility has in essence been permanently reduced to $1.425 billion of potential borrowings. The obligation to fund by all of the other providers has not changed. As of June30, 2009, the amount available on the credit facility was $1.35 billion (net of $74.5 million which was restricted/dedicated to support letters of credit and net of the $75.0 million discussed above). The Company did not draw on its revolving credit facility at any time during the six months ended June30, 2009.
11.Derivative and Other Fair Value Instruments	11. Derivative and Other Fair Value Instruments The Company follows the guidance under SFAS No.157 when valuing its financial instruments. The valuation of financial instruments under SFAS No.107, Disclosures about Fair Value of Financial Instruments, and SFAS No.133 and its amendments (SFAS Nos. 137/138/149), Accounting for Derivative Instruments and Hedging Activities, requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, where possible, bases the fair values of its financial instruments, including its derivative instruments, on listed market prices and third party quotes. Where these are not available, the Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments. The carrying value of the Companys mortgage notes payable and unsecured notes were approximately $5.0 billion and $4.9 billion, respectively, at June30, 2009. The fair value of the Companys mortgage notes payable and unsecured notes were approximately $4.9 billion and $4.8 billion, respectively, at June30, 2009. The fair values of the Companys financial instruments, other than mortgage notes payable, unsecured notes, derivative instruments and investment securities, including cash and cash equivalents, lines of credit and other financial instruments, approximate their carrying or contract values. In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company seeks to limit these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments. The following table summarizes the Companys consolidated derivative instruments at June30, 2009 (dollar amounts are in thousands): FairValue Hedges(1) Development Cash Flow Hedges (2) Current Notional Balance $ 15,693 $ 250,762 Lowest Possible Notional $ 15,693 $ 46,753 Highest Possible Notional $ 17,694 $ 320,061 Lowest Interest Rate 4.800% 4.059% Highest Interest Rate 4.800% 6.000% Earliest Maturity Date 2012 2009 Latest Maturity Date 2012 2011 (1) Fair Value Hedges Converts outstanding fixed rate debt to a floating interest rate. (2) Development Cash Flow Hedges Converts outstanding floating rate debt to a fixed interest rate. The following table provides the location of the Companys derivative instruments within the accompanying Consolidated Balance Sheets and their fair market values as of June30, 2009 (amounts in thousands): Asset Derivatives Liability Derivatives BalanceSheet Location FairValue BalanceSheet Location FairValue Derivatives designated as hedging instruments: Interest Rate Contracts: Fair Value Hedges Otherassets $ 3,442 Otherliabilities $ - Development Cash Flow Hedges Other assets 7 Other liabilities (4,977) Total $ 3,449 $ (4,977)
12.Earnings Per Share	12. Earnings Per Share The following tables set forth the computation of net income per share basic and net income per share diluted (amounts in thousands except per share amounts): Six Months Ended June30, Quarter Ended June30, 2009 2008 2009 2008 Numerator for net income per share basic: Income from continuing operations $ 42,106 $ 54,585 $ 21,158 $ 39,148 Allocation to Noncontrolling Interests Operating Partnership, net (1,973) (2,876) (982) (2,116) Net loss (income) attributable to Noncontrolling Interests Partially Owned Properties 74 (1,659) 5 (1,391) Net income attributable to Preference Interests and Units (7) (7) (3) (3) Preferred distributions (7,240) (7,259) (3,620) (3,626) Income from continuing operations available to Common Shares, net of Noncontrolling Interests 32,960 42,784 16,558 32,012 Discontinued operations, net of Noncontrolling Interests 140,800 218,331 80,027 94,613 Numerator for net income per share basic $ 173,760 $ 261,115 $ 96,585 $ 126,625 Numerator for net income per share diluted: Income from continuing operations $ 42,106 $ 54,585 $ 21,158 $ 39,148 Net loss (income) attributable to Noncontrolling Interests Partially Owned Properties 74 (1,659) 5 (1,391) Net income attributable to Preference Interests and Units (7) (7) (3) (3) Preferred distributions (7,240) (7,259) (3,620) (3,626) Income from continuing operations available to Common Shares 34,933 45,660 17,540 34,128 Discontinued operations, net 149,247 232,936 84,774 100,845 Numerator for net income per share diluted $ 184,180 $ 278,596 $ 102,314 $ 134,973 Denominator for net income per share basic and diluted: Denominator for net income per share basic 272,614 269,196 272,901 269,608 Effect of dilutive securities: OP Units 16,237 18,064 16,089 17,832 Long-term compensation award shares/units 301 2,661 348 3,005 Denominator for net income per share diluted 289,152 289,921 289,338 290,445 Net income per share basic $ 0.64 $ 0.97 $ 0.35 $ 0.47 Net income per share diluted $ 0.64 $ 0.96 $ 0.35 $ 0.46 Net income per share basic: Income from continuing operations available to Common Shares, net of Noncontrolling Interests $ 0.121 $ 0.159 $ 0.061 $ 0.119 Discontinued operations, net of Noncontrolling Interests 0.516 0.811 0.293 0.351
13.Discontinued Operations	13. Discontinued Operations The Company has presented separately as discontinued operations in all periods the results of operations for all consolidated assets disposed of on or after January1, 2002 (the date of adoption of SFAS No.144), all operations related to active condominium conversion properties effective upon their respective transfer into a TRS and all properties held for sale, if any. The components of discontinued operations are outlined below and include the results of operations for the respective periods that the Company owned such assets during the six months and quarters ended June30, 2009 and 2008 (amounts in thousands). SixMonthsEndedJune30, QuarterEndedJune30, 2009 2008 2009 2008 REVENUES Rental income $ 17,832 $ 60,482 $ 6,408 $ 27,599 Total revenues 17,832 60,482 6,408 27,599 EXPENSES (1) Property and maintenance 8,036 19,312 3,244 8,544 Real estate taxes and insurance 2,284 7,936 767 3,801 Property management - (62) - 3 Depreciation 3,641 14,921 1,438 6,782 General and administrative 25 17 20 14 Total expenses 13,986 42,124 5,469 19,144 Discontinued operating income 3,846 18,358 939 8,455 Interest and other income 10 140 3 148 Interest (2): Expense incurred, net (310) (1,014) (77) (496) Amortization of deferred financing costs (32) (2) - (1) Income and other tax (expense) benefit (65) 657 (18) 459 Discontinued operations 3,449 18,139 847 8,565 Net gain on sales of discontinued operations 145,798 214,797 83,927 92,280 Discontinued operations, net $ 149,247 $ 232,936 $ 84,774 $ 100,845 (1) Includes expenses paid in the current period for properties sold or held for sale in prior periods related to the Companys period of ownership. (2) Includes only interest expense specific to secured mortgage notes payable for properties sold and/or held for sale. For the properties sold during the six months ended June30, 2009 (excluding condominium conversion properties), the investment in real estate, net of accumulated depreciation, and the mortgage notes payable balances at December31, 2008 were $205.3 million and $17.8 million, respectively. The net real estate basis of the Companys active condominium conversion properties owned by the TRS and included in discontinued operations (excludes the Companys halted conversions as they are now held for use), which were included in investment in real estate, net in the consolidated balance sheets, was $8.0 million and $12.6 million at June30, 2009 and December31, 2008, respectively.
14.Commitments and Contingencies	14. Commitments and Contingencies The Company, as an owner of real estate, is subject to various Federal, state and local environmental laws. Compliance by the Company with existing laws has not had a material adverse effect on the Company. However, the Company cannot predict the impact of new or changed laws or regulations on its current properties or on properties that it may acquire in the future. The Company is party to a housing discrimination lawsuit brought by a non-profit civil rights organization in April 2006 in the U.S. District Court for the District of Maryland. The suit alleges that the Company designed and built approximately 300 of its properties in violation of the accessibility requirements of the Fair Housing Act and Americans with Disabilities Act. The suit seeks actual and punitive damages, injunctive relief (including modification of non-compliant properties), costs and attorneys fees. The Company believes it has a number of viable defenses, including that a majority of the named properties were completed before the operative dates of the statutes in question and/or were not designed or builtby the Company. Accordingly, the Company is defending the suit vigorously. Due to the pendency of the Companys defenses and the uncertainty of many other critical factual and legal issues, it is not possible to determine or predict the outcome of the suit and as a result, no amounts have been accrued at June30, 2009. While no assurances can be given, the Company does not believe that the suit, if adversely determined, would have a material adverse effect on the Company. The Company does not believe there is any other litigation pending or threatened against it that, individually or in the aggregate, reasonably may be expected to have a material adverse effect on the Company. The Company has established a reserve and recorded a corresponding reduction to its net gain on sales of discontinued operations related to potential liabilities associated with its condominium conversion activities. The reserve covers potential product liability related to each conversion. The Company periodically assesses the adequacy of the reserve and makes adjustments as necessary. During the six months ended June30, 2009, the Company recorded additional reserves of approximately $2.5 million (primarily related to an insurance settlement), paid approximately $0.7 million in settlements and released approximately $1.0 million of remaining reserves for settled claims. As a result, the Company had total reserves of approximately $11.1 million at June30, 2009. While no assurances can be given, the Company does not believe that the ultimate resolution of these potential liabilities, if adversely determined, would have a material adverse effect on the Company. As of June30, 2009, the Company has seven projects totaling 2,369 units in various stages of development with estimated completion dates ranging through June30, 2011. Some of the projects are developed solely by the Company, while others are co-developed with various third party development partners. The development venture agreements with partners are primarily deal-specific, with diffe
15.Reportable Segments	15. Reportable Segments Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by senior management. Senior management decides how resources are allocated and assesses performance on a monthly basis. The Companys primary business is owning, managing and operating multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents. Senior management evaluates the performance of each of our apartment communities individually and geographically, and both on a same store and non-same store basis; however, each of our apartment communities generally has similar economic characteristics, residents, products and services. The Companys operating segments have been aggregated by geography in a manner identical to that which is provided to its chief operating decision maker. The Companys fee and asset management, development (including FIN No.46(R) partially owned properties), condominium conversion and corporate housing (Equity Corporate Housing or ECH) activities are immaterial and do not individually meet the threshold requirements of a reportable segment as provided for in SFAS No.131 and as such, have been aggregated in the tables presented below. All revenues are from external customers and there is no customer who contributed 10% or more of the Companys total revenues during the six months and quarters ended June30, 2009 and 2008, respectively. The primary financial measure for the Companys rental real estate segment is net operating income (NOI), which represents rental income less: 1) property and maintenance expense; 2) real estate taxes and insurance expense; and 3) property management expense (all as reflected in the accompanying consolidated statements of operations). 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 Companys apartment communities. Current year NOI is compared to prior year NOI and current year budgeted NOI as a measure of financial performance. The following tables present NOI for each segment from our rental real estate specific to continuing operations for the six months and quarters ended June30, 2009 and 2008, respectively, as well as total assets at June30, 2009 (amounts in thousands): Six Months Ended June30, 2009 Northeast Northwest Southeast Southwest Other(3) Total Rental income: Same store (1) $ 279,346 $ 191,779 $ 218,041 $ 221,113 $ - $ 910,279 Non-same store/other (2)(3) 27,942 8,977 6,547 15,917 37,878 97,261 Total rental income 307,288 200,756 224,588 237,030 37,878 1,007,540 Operating expenses: Same store (1) 106,007 67,872 92,039 76,042 - 341,960 Non-same store/other (2)(3) 12,465 4,115
16.Subsequent Events/Other	16. Subsequent Events/Other Subsequent Events Subsequent to June30, 2009 and up until the time of this filing, the Company sold three apartment properties consisting of 749 units for $74.2 million (excluding condominium units). Other During the six months ended June30, 2009, the Company recorded an approximate $11.1 million non-cash asset impairment charge on a parcel of land held for development. Following the guidance in SFAS No.144, this charge was the result of an analysis of the parcels estimated fair value (determined using internally developed models based on market assumptions and comparable sales data) compared to its current capitalized carrying value. During the six months ended June30, 2009 and 2008, the Company recorded approximately $1.0 million and $2.2 million of additional general and administrative expense, respectively, and $0.7 million and $0.2 million of additional property management expense, respectively, related primarily to cash severance for various employees.

Document Information

Document Information
	6 Months Ended Jun. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Amendment Description	N.A.
Document Period End Date	2009-06-30

Entity Information

Entity Information (USD $)
	6 Months Ended Jun. 30, 2009	Jun. 30, 2008
Entity [Text Block]
Trading Symbol	EQR
Entity Registrant Name	EQUITY RESIDENTIAL
Entity Central Index Key	0000906107
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	273,975,692
Entity Public Float		$10,000,000,000