Statement Of Financial Position
Statement Of Financial Position Unclassified - Real Estate Operations (USD $) | ||
In Thousands | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Dec. 31, 2008 |
Investment in real estate | ||
Land | $3,629,701 | $3,671,299 |
Depreciable property | 13,755,610 | 13,908,594 |
Projects under development | 753,831 | 855,473 |
Land held for development | 239,158 | 254,873 |
Investment in real estate | 18,378,300 | 18,690,239 |
Accumulated depreciation | (3,785,198) | (3,561,300) |
Investment in real estate, net | 14,593,102 | 15,128,939 |
Cash and cash equivalents | 637,588 | 890,794 |
Investments in unconsolidated entities | 4,616 | 5,795 |
Deposits - restricted | 360,022 | 152,732 |
Escrow deposits - mortgage | 18,954 | 19,729 |
Deferred financing costs, net | 50,438 | 53,817 |
Other assets | 126,676 | 283,304 |
Total assets | 15,791,396 | 16,535,110 |
Liabilities: | ||
Mortgage notes payable | 4,885,560 | 5,036,930 |
Notes, net | 4,949,560 | 5,447,012 |
Lines of credit | 0 | 0 |
Accounts payable and accrued expenses | 131,730 | 108,463 |
Accrued interest payable | 72,970 | 113,846 |
Other liabilities | 264,221 | 289,562 |
Security deposits | 60,517 | 64,355 |
Distributions payable | 100,230 | 141,843 |
Total liabilities | 10,464,788 | 11,202,011 |
Commitments and contingencies | - | - |
Redeemable Limited Partners | 236,333 | 264,394 |
Partners' capital: | ||
Preference Units | 208,773 | 208,786 |
Preference Interests and Junior Preference Units | 0 | 184 |
General Partner | 4,772,514 | 4,732,369 |
Limited Partners | 118,332 | 137,645 |
Accumulated other comprehensive loss | (21,636) | (35,799) |
Total partners' capital | 5,077,983 | 5,043,185 |
Noncontrolling Interests - Partially Owned Properties | 12,292 | 25,520 |
Total capital | 5,090,275 | 5,068,705 |
Total liabilities and capital | $15,791,396 | $16,535,110 |
Statement Of Income Real Estate
Statement Of Income Real Estate Excluding REITs (USD $) | ||||
In Thousands | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
REVENUES | ||||
Rental income | $490,104 | $508,619 | $1,471,383 | $1,485,814 |
Fee and asset management | 2,653 | 2,387 | 7,928 | 7,397 |
Total revenues | 492,757 | 511,006 | 1,479,311 | 1,493,211 |
EXPENSES | ||||
Property and maintenance | 125,904 | 134,658 | 374,067 | 389,042 |
Real estate taxes and insurance | 55,743 | 52,039 | 161,777 | 153,317 |
Property management | 18,725 | 18,920 | 56,457 | 59,587 |
Fee and asset management | 1,931 | 1,983 | 5,916 | 6,154 |
Depreciation | 147,477 | 145,382 | 438,726 | 417,662 |
General and administrative | 9,881 | 9,849 | 30,476 | 34,040 |
Impairment | 0 | 0 | 11,124 | 0 |
Total expenses | 359,661 | 362,831 | 1,078,543 | 1,059,802 |
Operating income | 133,096 | 148,175 | 400,768 | 433,409 |
Interest and other income | 3,215 | 2,871 | 15,854 | 11,038 |
Other expenses | (1,922) | (2,106) | (2,228) | (2,886) |
Interest: | ||||
Expense incurred, net | (121,520) | (122,345) | (361,085) | (361,125) |
Amortization of deferred financing costs | (3,394) | (2,410) | (9,614) | (6,748) |
Income before income and other taxes, (loss) income from investments in unconsolidated entities, net gain on sales of unconsolidated entities and land parcels and discontinued operations | 9,475 | 24,185 | 43,695 | 73,688 |
Income and other tax (expense) benefit | (459) | (1,317) | (2,846) | (5,937) |
(Loss) income from investments in unconsolidated entities | (151) | 250 | (2,372) | 60 |
Net gain on sales of unconsolidated entities | 3,959 | 0 | 6,718 | 0 |
Net gain on sales of land parcels | 0 | 2,976 | 0 | 2,976 |
Income from continuing operations | 12,824 | 26,094 | 45,195 | 70,787 |
Discontinued operations, net | 130,541 | 161,031 | 289,523 | 403,859 |
Net income | 143,365 | 187,125 | 334,718 | 474,646 |
Net loss (income) attributable to Noncontrolling Interests - Partially Owned Properties | 317 | (106) | 391 | (1,765) |
Net income attributable to controlling interests | 143,682 | 187,019 | 335,109 | 472,881 |
ALLOCATION OF NET INCOME: | ||||
Preference Units | 3,619 | 3,628 | 10,859 | 10,887 |
Preference Interests and Junior Preference Units | 2 | 4 | 9 | 11 |
General Partner | 132,362 | 172,246 | 306,122 | 433,361 |
Limited Partners | 7,699 | 11,141 | 18,119 | 28,622 |
Net income available to Units | $140,061 | $183,387 | $324,241 | $461,983 |
Earnings per Unit - basic: | ||||
Income from continuing operations available to Units | 0.03 | 0.08 | 0.12 | 0.2 |
Net income available to Units | 0.48 | 0.64 | 1.12 | 1.61 |
Weighted average Units outstanding | 289,262 | 287,743 | 288,990 | 287,422 |
Earnings per Unit - diluted: | ||||
Income from continuing operations available to Units | 0.03 | 0.08 | 0.12 | 0.2 |
Net income available to Units | 0.48 | 0.63 | 1.12 | 1.59 |
Weighted average Units outstanding | 290,215 | 290,795 | 289,518 | 290,267 |
Distributions declared per Unit outstanding | 0.3375 | 0.4825 | 1.3025 | 1.4475 |
Statement Of Other Comprehensiv
Statement Of Other Comprehensive Income (USD $) | ||||
In Thousands | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Comprehensive income: | ||||
Net income | $143,365 | $187,125 | $334,718 | $474,646 |
Other comprehensive income (loss) - derivative instruments: | ||||
Unrealized holding gains (losses) arising during the period | (462) | (7,231) | 12,193 | (12,438) |
Losses reclassified into earnings from other comprehensive income | 709 | 712 | 3,014 | 1,928 |
Other | 0 | 0 | 449 | 0 |
Other comprehensive income (loss) - other instruments: | ||||
Unrealized holding gains (losses) arising during the period | 339 | 87 | 3,450 | (285) |
(Gains) realized during the period | 0 | 0 | (4,943) | 0 |
Comprehensive income | 143,951 | 180,693 | 348,881 | 463,851 |
Comprehensive loss (income) attributable to Noncontrolling Interests - Partially Owned Properties | 317 | (106) | 391 | (1,765) |
Comprehensive income attributable to controlling interests | $144,268 | $180,587 | $349,272 | $462,086 |
Statement Of Cash Flows Indirec
Statement Of Cash Flows Indirect Real Estate (USD $) | ||
In Thousands | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $334,718 | $474,646 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 451,487 | 447,936 |
Amortization of deferred financing costs | 9,646 | 6,751 |
Amortization of discounts on investment securities | (1,661) | 0 |
Amortization of discounts and premiums on debt | 3,346 | 4,060 |
Amortization of deferred settlements on derivative instruments | 2,003 | 893 |
Impairment | 11,124 | 0 |
Write-off of pursuit costs | 1,973 | 2,856 |
Transaction costs | 255 | 30 |
Loss (income) from investments in unconsolidated entities | 2,372 | (60) |
Distributions from unconsolidated entities - return on capital | 129 | 71 |
Net (gain) on sales of investment securities | (4,943) | 0 |
Net (gain) on sales of unconsolidated entities | (6,718) | 0 |
Net (gain) on sales of land parcels | 0 | (2,976) |
Net (gain) on sales of discontinued operations | (274,933) | (365,052) |
(Gain) on debt extinguishments | (4,420) | (225) |
Unrealized (gain) loss on derivative instruments | (2) | 68 |
Compensation paid with Company Common Shares | 13,975 | 16,753 |
Changes in assets and liabilities: | ||
Decrease (increase) in deposits - restricted | 4,890 | (2,131) |
Decrease (increase) in other assets | 4,353 | (16,122) |
Increase in accounts payable and accrued expenses | 35,555 | 66,078 |
(Decrease) in accrued interest payable | (40,876) | (45,145) |
(Decrease) in other liabilities | (6,167) | (19,829) |
(Decrease) increase in security deposits | (3,838) | 1,907 |
Net cash provided by operating activities | 532,268 | 570,509 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Investment in real estate - acquisitions | (18,500) | (344,231) |
Investment in real estate - development/other | (268,213) | (399,339) |
Improvements to real estate | (93,049) | (131,365) |
Additions to non-real estate property | (1,315) | (2,050) |
Interest capitalized for real estate under development | (28,704) | (45,117) |
Proceeds from disposition of real estate, net | 729,153 | 829,125 |
Proceeds from disposition of unconsolidated entities | 0 | 2,629 |
Distributions from unconsolidated entities - return of capital | 5,396 | 405 |
Purchase of investment securities | (52,822) | 0 |
Proceeds from sale of investment securities | 215,753 | 0 |
Transaction costs | (255) | (30) |
(Increase) in deposits on real estate acquisitions, net | (246,835) | (168,936) |
Decrease (increase) in mortgage deposits | 775 | (1,660) |
Acquisition of Noncontrolling Interests - Partially Owned Properties | (11,480) | (20) |
Net cash provided by (used for) investing activities | 229,904 | (260,589) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Loan and bond acquisition costs | (9,203) | (6,199) |
Mortgage notes payable: | ||
Proceeds | 657,785 | 1,242,425 |
Restricted cash | 34,655 | 28,390 |
Lump sum payoffs | (774,481) | (359,782) |
Scheduled principal repayments | (13,701) | (18,949) |
Gain (loss) on debt extinguishments | 2,400 | (41) |
Notes, net: | ||
Lump sum payoffs | (505,849) | (147,124) |
Gain on debt extinguishments | 2,020 | 266 |
Lines of credit: | ||
Proceeds | 0 | 841,000 |
Repayments | 0 | (980,000) |
Proceeds from (payments on) settlement of derivative instruments | 11,253 | (13,256) |
Proceeds from sale of OP Units | 4,698 | 5,085 |
Proceeds from exercise of EQR options | 7,420 | 16,772 |
OP Units repurchased and retired | (1,124) | (10,935) |
Premium on redemption of Preference Units | 0 | (4) |
Payment of offering costs | (463) | (88) |
Other financing activities, net | (8) | (8) |
Contributions - Noncontrolling Interests - Partially Owned Properties | 893 | 1,842 |
Contributions - Limited Partners | 78 | 0 |
Distributions: | ||
OP Units - General Partner | (395,786) | (391,072) |
Preference Units | (10,859) | (10,893) |
Preference Interests and Junior Preference Units | (11) | (11) |
OP Units - Limited Partners | (23,736) | (26,309) |
Noncontrolling Interests - Partially Owned Properties | (1,359) | (1,810) |
Net cash (used for) provided by financing activities | (1,015,378) | 169,299 |
Net (decrease) increase in cash and cash equivalents | (253,206) | 479,219 |
Cash and cash equivalents, beginning of period | 890,794 | 50,831 |
Cash and cash equivalents, end of period | 637,588 | 530,050 |
SUPPLEMENTAL INFORMATION: | ||
Cash paid for interest, net of amounts capitalized | 396,922 | 402,810 |
Net cash paid for income and other taxes | 4,047 | 2,302 |
Real estate acquisitions/dispositions/other: | ||
Mortgage loans assumed | 0 | 24,946 |
Valuation of OP Units issued | 1,034 | 849 |
Mortgage loans (assumed) by purchaser | (4,387) | 0 |
Amortization of deferred financing costs: | ||
Investment in real estate, net | (2,936) | (1,509) |
Deferred financing costs, net | 12,582 | 8,260 |
Amortization of discounts and premiums on debt: | ||
Investment in real estate, net | (3) | (3) |
Mortgage notes payable | (4,631) | (4,717) |
Notes, net | 7,980 | 8,780 |
Amortization of deferred settlements on derivative instruments: | ||
Other liabilities | (1,011) | (1,035) |
Accumulated other comprehensive loss | 3,014 | 1,928 |
Unrealized (gain) loss on derivative instruments: | ||
Other assets | (9,910) | (3,777) |
Mortgage notes payable | (1,755) | 3,992 |
Notes, net | 866 | 1,011 |
Other liabilities | (1,396) | 11,280 |
Accumulated other comprehensive loss | 12,193 | (12,438) |
Proceeds from (payments on) settlement of derivative instruments: | ||
Other assets | 11,253 | (39) |
Other liabilities | 0 | (13,217) |
Repurchase of notes, net not yet settled: | ||
Other liabilities | $0 | ($11,356) |
Statement Of Partners Capital
Statement Of Partners Capital (USD $) | |||||||
In Thousands | PREFERENCE UNITS
| PREFERENCE INTERESTS AND JUNIOR PREFERENCE UNITS
| GENERAL PARTNER
| LIMITED PARTNERS
| ACCUMULATED OTHER COMPREHENSIVE LOSS
| NONCONTROLLING INTERESTS - PARTIALLY OWNED PROPERTIES
| Total
|
Balance, beginning of year at Dec. 31, 2008 | $208,786 | $184 | $4,732,369 | $137,645 | ($35,799) | $25,520 | $5,068,705 |
Conversion of Preference Units into OP Units held by General Partner | 13 | ||||||
Issuance of OP Units | 1,034 | ||||||
Accumulated other comprehensive income - derivative instruments: | |||||||
Unrealized holding gains arising during the period | 12,193 | 12,193 | |||||
Losses reclassified into earnings from other comprehensive income | 3,014 | 3,014 | |||||
Other | 449 | 449 | |||||
Net loss (income) attributable to Noncontrolling Interests - Partially Owned Properties | (391) | 391 | |||||
Conversion of Series B Junior Preference Units | (184) | ||||||
Conversion of 7.00% Series E Cumulative Convertible | (13) | ||||||
Issuance of LTIP Units | 78 | ||||||
Accumulated other comprehensive income - other instruments: | |||||||
Unrealized holding gains arising during the period | 3,450 | 3,450 | |||||
(Gains) realized during the period | (4,943) | (4,943) | |||||
Contributions by Noncontrolling Interests | 893 | ||||||
Distributions to Noncontrolling Interests | (1,367) | ||||||
Conversion of OP Units held by Limited Partners into OP Units held by General Partner | 43,217 | (43,217) | |||||
Other | (658) | ||||||
Exercise of EQR share options | 7,420 | ||||||
Equity compensation associated with Units - Limited Partners | 896 | ||||||
Acquisition of additional ownership interest by Operating Partnership | (11,705) | ||||||
EQR's Employee Share Purchase Plan (ESPP) | 4,698 | ||||||
Net income available to Units - Limited Partners | 18,119 | 18,119 | |||||
Share-based employee compensation expense: | |||||||
EQR performance shares | 133 | ||||||
EQR restricted shares | 8,783 | ||||||
EQR share options | 4,563 | ||||||
EQR ESPP discount | 1,124 | ||||||
Units - Limited Partners distributions | (20,886) | ||||||
OP Units repurchased and retired | (1,124) | ||||||
Offering costs | (463) | ||||||
Net income available to Units - General Partner | 306,122 | 306,122 | |||||
OP Units - General Partner distributions | (357,024) | ||||||
Supplemental Executive Retirement Plan (SERP) | 20,781 | ||||||
Acquisition of Noncontrolling Interests - Partially Owned Properties | (1,496) | ||||||
Change in carrying value of Redeemable Limited Partners | 7,168 | 20,893 | |||||
Adjustment for Limited Partners ownership in Operating Partnership | (3,770) | 3,770 | |||||
Balance, end of period at Sep. 30, 2009 | $208,773 | $0 | $4,772,514 | $118,332 | ($21,636) | $12,292 | $5,090,275 |
1.Business
1.Business | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
1.Business | 1. Business ERP Operating Limited Partnership (ERPOP), an Illinois limited partnership, was formed in May 1993 to conduct the multifamily residential property business of Equity Residential (EQR). 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 September30, 2009 owned an approximate 95.0% ownership interest in ERPOP. EQR is structured as an umbrella partnership REIT (UPREIT) under which all property ownership and related business operations are conducted through ERPOP and its subsidiaries. References to the Operating Partnership include ERPOP and those entities owned or controlled by it. References to the Company mean EQR and the Operating Partnership. As of September30, 2009, the Operating Partnership, directly or indirectly through investments in title holding entities, owned all or a portion of 501 properties in 23 states and the District of Columbia consisting of 138,887 units. The ownership breakdown includes (table does not include various uncompleted development properties): Properties Units Wholly Owned Properties 436 120,378 Partially Owned Properties: Consolidated 26 5,126 Unconsolidated 37 8,788 Military Housing (Fee Managed) 2 4,595 501 138,887 |
2.Summary of Significant Accoun
2.Summary of Significant Accounting Policies | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
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 nine months ended September30, 2009 are not necessarily indicative of the results that may be expected for the year ending December31, 2009. In preparation of the Operating Partnerships 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 Operating Partnerships annual report on Form 10-K for the year ended December31, 2008. Income and Other Taxes The Operating Partnership generally is not liable for federal income taxes as the partners recognize their proportionate share of the Operating Partnerships income or loss in their tax returns; therefore, no provision for federal income taxes has been made at the ERPOP level. Historically, the Operating Partnership has generally only incurred certain state and local income, excise and franchise taxes. The Operating Partnership 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 after consideration of any net operating losses. 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 |
3.Capital and Redeemable Limite
3.Capital and Redeemable Limited Partners | |
1/1/2009 - 9/30/2009
| |
Notes to Financial Statements [Abstract] | |
3.Capital and Redeemable Limited Partners | 3. Capital and Redeemable Limited Partners The following tables present the changes in the Operating Partnerships issued and outstanding Units (which includes OP Units and Long-Term Incentive Plan (LTIP) Units) and in the limited partners Units for the nine months ended September30, 2009: 2009 General and Limited Partner Units General and Limited Partner Units outstanding at January1, 289,466,537 Issued to General Partner: Conversion of Series E Preference Units 612 Exercise of EQR options 352,222 Employee Share Purchase Plan 300,471 Restricted EQR share grants, net 313,776 Issued to Limited Partners: LTIP Units, net 154,616 OP Units issued through consolidations 32,061 Conversion of Series B Junior Preference Units 7,517 OP Units Other: Repurchased and retired (47,450 ) General and Limited Partner Units outstanding at September30, 290,580,362 Limited Partner Units Limited Partner Units outstanding at January1, 16,679,777 Limited Partner LTIP Units, net 154,616 Limited Partner OP Units issued through consolidations 32,061 Conversion of Series B Junior Preference Units 7,517 Conversion of Limited Partner OP Units to EQR Common Shares (2,441,029 ) Limited Partner Units outstanding at September30, 14,432,942 Limited Partner Units Ownership Interest in Operating Partnership 5.0 % Limited Partner LTIP Units Issued: Issuance per unit $ 0.50 Issuance contribution valuation $ 0.1 million Limited Partner OP Units Issued: Consolidations per unit $ 26.50 Consolidations valuation $ 0.8 million Conversion of Series B Junior Preference Units per unit $ 24.50 Conversion of Series B Junior Preference Units valuation $ 0.2 million In September 2009, EQR announced the creation of an At-The-Market (ATM) share offering program which would allow EQR to sell up to 17.0million Common Shares from time to time over the next three years into the existing trading market at current market prices as well as through negotiated transactions. Per the terms of ERPOPs partnership agreement, EQR contributes the net proceeds from all equity offerings to the capital of the Operating Partnership in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis). During the nine months ended September30, 2009, no shares were issued through the ATM program. During the nine months ended September30, 2009, EQR 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. Concurrent with these transactions, the Operating Partnership repurchased and retired 47,450 OP Units previously issued to EQR. All of the shares repurchased during the nine months ended September30, 2009 were repurchased from employees at the then current market prices to cover the minimum statutory tax withholding obligations related to the vesting of emp |
4.Real Estate
4.Real Estate | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
4.Real Estate | 4. Real Estate The following table summarizes the carrying amounts for the Operating Partnerships investment in real estate (at cost) as of September30, 2009 and December31, 2008 (amounts in thousands): September30, 2009 December31, 2008 Land $ 3,629,701 $ 3,671,299 Depreciable property: Buildings and improvements 12,656,386 12,836,310 Furniture, fixtures and equipment 1,099,224 1,072,284 Projects under development: Land 138,410 175,355 Construction-in-progress 615,421 680,118 Land held for development: Land 181,430 205,757 Construction-in-progress 57,728 49,116 Investment in real estate 18,378,300 18,690,239 Accumulated depreciation (3,785,198 ) (3,561,300 ) Investment in real estate, net $ 14,593,102 $ 15,128,939 During the nine months ended September30, 2009, the Operating Partnership acquired the 75% equity interest in one previously unconsolidated property it did not already own consisting of 250 units with a gross sales price of $18.5 million from its institutional joint venture partner. During the nine months ended September30, 2009, the Operating Partnership disposed of the following to unaffiliated parties (sales price in thousands): Properties Units SalesPrice Rental Properties: Consolidated 47 8,819 $ 734,509 Unconsolidated (1) 3 732 57,700 Condominium Conversion Properties 1 50 9,786 Total 51 9,601 $ 801,995 (1) The Operating Partnership owned a 25% interest in these unconsolidated rental properties. Sales price listed is the gross sales price. The Operating Partnerships buyout of its partners interest in one previously unconsolidated property is not included in the above totals. The Operating Partnership recognized a net gain on sales of discontinued operations of approximately $274.9 million and a net gain on sales of unconsolidated entities of approximately $6.7 million on the above sales. |
Dispose of Real Estate
Dispose of Real Estate | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
5.Commitments to Acquire/Dispose of Real Estate | 5. Commitments to Acquire/Dispose of Real Estate As of October30, 2009, in addition to the property that was subsequently acquired as discussed in Note 16, the Operating Partnership had entered into separate agreements to acquire three rental properties consisting of 686 units for $134.7 million. As of October30, 2009, in addition to the properties that were subsequently disposed of as discussed in Note 16, the Operating Partnership had entered into separate agreements to dispose of the following (sales price in thousands): Properties Units SalesPrice Rental Properties: Consolidated 29 5,660 $ 443,111 Unconsolidated 2 444 22,100 Total 31 6,104 $ 465,211 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 Owne
6.Investments in Partially Owned Entities | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
6.Investments in Partially Owned Entities | 6. Investments in Partially Owned Entities The Operating Partnership 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 Operating Partnerships investments in partially owned entities as of September30, 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(5) Total projects (1) - 3 2 21 26 37 Total units (1) - 898 432 3,796 5,126 8,788 Debt Secured (2): EQR Ownership (3) $ 340,813 $ 192,516 $ 61,260 $ 219,171 $ 813,760 $ 105,266 Noncontrolling Ownership - - - 82,786 82,786 315,798 Total (at 100%) $ 340,813 $ 192,516 $ 61,260 $ 301,957 $ 896,546 $ 421,064 (1) Project and unit counts exclude all uncompleted development projects until those projects are completed. (2) All debt is non-recourse to the Operating Partnership 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 Operating Partnership upon completion of that project. (3) Represents the Operating Partnerships 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. (5) Unconsolidated debt maturities and rates for institutional joint ventures are as follows: $112.6 million, May1, 2010, 8.33%; $121.0 million, December1, 2010, 7.54%; $143.8 million, March1, 2011, 6.95%; and $43.6 million, July1, 2019, 5.305%. A portion of this mortgage debt is also partially collateralized by $22.0 million in unconsolidated restricted cash set aside from the net proceeds of property sales. The Operating Partnership acquired its partners interest in one of the previously unconsolidated properties containing 250 units in the third quarter of 2009 for $18.5 million and as a result, the project is now consolidated and wholly owned. |
7.Deposits - Restricted
7.Deposits - Restricted | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
7.Deposits - Restricted | 7. Deposits Restricted The following table presents the Operating Partnerships restricted deposits as of September30, 2009 and December31, 2008 (amounts in thousands): September30, 2009 December31, 2008 Taxdeferred (1031)exchange proceeds $ 246,835 $ - Earnest money on pending acquisitions 1,200 1,200 Restricted deposits on debt (1) 61,574 96,229 Resident security and utility deposits 39,472 41,478 Other 10,941 13,825 Totals $ 360,022 $ 152,732 (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 | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
8.Mortgage Notes Payable | 8. Mortgage Notes Payable As of September30, 2009, the Operating Partnership had outstanding mortgage debt of approximately $4.9 billion. During the nine months ended September30, 2009, the Operating Partnership: Repaid $788.2 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 $157.8 million of new mortgage loans on development properties; Recognized a gain on early debt extinguishment of $2.4 million and wrote-off approximately $1.0 million of unamortized deferred financing costs; and Was released from $4.4 million of mortgage debt assumed by the purchaser on a disposed property. As of September30, 2009, scheduled maturities for the Operating Partnerships outstanding mortgage indebtedness were at various dates through September1, 2048. At September30, 2009, the interest rate range on the Operating Partnerships mortgage debt was 0.20% to 12.465%. During the nine months ended September30, 2009, the weighted average interest rate on the Operating Partnerships mortgage debt was 4.90%. |
9.Notes
9.Notes | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
9.Notes | 9. Notes As of September30, 2009, the Operating Partnership had outstanding unsecured notes of approximately $4.9 billion. During the nine months ended September30, 2009, the Operating Partnership 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 Operating Partnership 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 Operating Partnership 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 nine months ended September30, 2009. During the nine months ended September30, 2009, the Operating Partnership 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 Operating Partnership 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 September30, 2009, scheduled maturities for the Operating Partnerships outstanding notes were at various dates through 2028. At September30, 2009, the interest rate range on the Operating Partnerships notes was 0.34% to 7.57%. During the nine months ended September30, 2009, the weighted average interest rate on the Operating Partnerships notes was 5.32%. |
10.Lines of Credit
10.Lines of Credit | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
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 or obtaining 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 September30, 2009, the amount available on the credit facility was $1.36 billion (net of $68.5 million which was restricted/dedicated to support letters of credit and net of the $75.0 million discussed above). The Operating Partnership did not draw on its revolving credit facility at any time during the nine months ended September30, 2009. |
11.Derivative and Other Fair Va
11.Derivative and Other Fair Value Instruments | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
11.Derivative and Other Fair Value Instruments | 11. Derivative and Other Fair Value Instruments The valuation of financial instruments requires the Operating Partnership to make estimates and judgments that affect the fair value of the instruments. The Operating Partnership, 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 Operating Partnership 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 Operating Partnerships mortgage notes payable and unsecured notes were both approximately $4.9 billion at September30, 2009. The fair value of the Operating Partnerships mortgage notes payable and unsecured notes were approximately $4.8 billion and $5.1 billion, respectively, at September30, 2009. The fair values of the Operating Partnerships 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 Operating Partnership is exposed to the effect of interest rate changes. The Operating Partnership 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 Operating Partnerships consolidated derivative instruments at September30, 2009 (dollar amounts are in thousands): FairValue Hedges(1) Forward Starting Swaps(2) Development Cash Flow Hedges(3) Current Notional Balance $ 115,693 $ 100,000 $ 147,465 Lowest Possible Notional $ 115,693 $ 100,000 $ 20,330 Highest Possible Notional $ 117,694 $ 100,000 $ 194,111 Lowest Interest Rate 2.637% 4.306% 4.059% Highest Interest Rate 4.800% 4.306% 4.940% Earliest Maturity Date 2012 2021 2009 Latest Maturity Date 2013 2021 2011 (1) Fair Value Hedges Convert outstanding fixed rate debt to a floating interest rate. (2) Forward Starting Swaps Designed to partially fix the interest rate in advance of a planned future debt issuance. These swaps have a mandatory counterparty termination in 2012. (3) Development Cash Flow Hedges Convert outstanding floating rate debt to a fixed interest rate. The following table provides the location of the Operating Partnerships derivative instruments within the accompanying Consolidated Balance Sheets and their fair market values as of September30, 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 $ 5,463 Otherliabilities $ - Forward Starting Swap |
12.Earnings Per Unit
12.Earnings Per Unit | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
12.Earnings Per Unit | 12. Earnings Per Unit The following tables set forth the computation of net income per Unit basic and net income per Unit diluted (amounts in thousands except per Unit amounts): NineMonthsEndedSeptember30, QuarterEndedSeptember30, 2009 2008 2009 2008 Numerator for net income per Unit basic and diluted: Income from continuing operations $ 45,195 $ 70,787 $ 12,824 $ 26,094 Net loss (income) attributable to Noncontrolling Interests Partially Owned Properties 391 (1,765 ) 317 (106 ) Allocation to Preference Units (10,859 ) (10,887 ) (3,619 ) (3,628 ) Allocation to Preference Interests and Junior Preference Units (9 ) (11 ) (2 ) (4 ) Income from continuing operations available to Units 34,718 58,124 9,520 22,356 Discontinued operations, net 289,523 403,859 130,541 161,031 Numerator for net income per Unit basic and diluted $ 324,241 $ 461,983 $ 140,061 $ 183,387 Denominator for net income per Unit basic and diluted: Denominator for net income per Unit basic 288,990 287,422 289,262 287,743 Effect of dilutive securities: Dilution for Units issuable upon assumed exercise/vesting of EQRs long-term compensation award shares/units 528 2,845 953 3,052 Denominator for net income per Unit diluted 289,518 290,267 290,215 290,795 Net income per Unit basic $ 1.12 $ 1.61 $ 0.48 $ 0.64 Net income per Unit diluted $ 1.12 $ 1.59 $ 0.48 $ 0.63 Net income per Unit basic: Income from continuing operations available to Units $ 0.120 $ 0.203 $ 0.033 $ 0.078 Discontinued operations, net 1.001 1.405 0.451 0.559 Net income per Unit basic $ 1.121 $ 1.608 $ 0.484 $ 0.637 Net income per Unit diluted: Income from continuing operations available to Units $ 0.120 $ 0.200 $ 0.033 $ 0.077 Discontinued operations, net 1.000 1.392 0.450 0.554 Net income per Unit diluted $ 1.120 $ 1.592 $ 0.483 $ 0.631 Convertible preference interests/units that could be converted into 404,004 and 432,445 weighted average Common Shares (which would be contributed to the Operating Partnership in exchange for OP Units) for the nine months ended September30, 2009 and 2008, respectively, and 400,489 and 419,822 weighted average Common Shares for the quarters ended September30, 2009 |
13.Discontinued Operations
13.Discontinued Operations | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
13.Discontinued Operations | 13. Discontinued Operations The Operating Partnership has presented separately as discontinued operations in all periods the results of operations for all consolidated assets disposed of, 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 Operating Partnership owned such assets during the nine months and quarters ended September30, 2009 and 2008 (amounts in thousands). NineMonthsEndedSeptember30, QuarterEndedSeptember30, 2009 2008 2009 2008 REVENUES Rental income $ 52,595 $ 120,729 $ 8,502 $ 33,910 Total revenues 52,595 120,729 8,502 33,910 EXPENSES (1) Property and maintenance 18,707 36,972 3,857 10,796 Real estate taxes and insurance 6,094 14,465 1,045 3,923 Property management - (62 ) - - Depreciation 12,761 30,274 2,175 8,380 General and administrative 29 24 4 7 Total expenses 37,591 81,673 7,081 23,106 Discontinued operating income 15,004 39,056 1,421 10,804 Interest and other income 12 233 2 93 Interest (2): Expense incurred, net (308 ) (1,493 ) 2 (479 ) Amortization of deferred financing costs (32 ) (3 ) - (1 ) Income and other tax (expense) benefit (86 ) 1,014 (19 ) 359 Discontinued operations 14,590 38,807 1,406 10,776 Net gain on sales of discontinued operations 274,933 365,052 129,135 150,255 Discontinued operations, net $ 289,523 $ 403,859 $ 130,541 $ 161,031 (1) Includes expenses paid in the current period for properties sold or held for sale in prior periods related to the Operating Partnerships 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 nine months ended September30, 2009 (excluding condominium conversion properties), the investment in real estate, net of accumulated depreciation, and the mortgage notes payable balances at December31, 2008 were $459.8 million and $17.8 million, respectively. The net real estate basis of the Operating Partnerships active condominium conversion properties owned by the TRS and included in discontinued operations (excludes the Operating Partnerships halted conversions as they are now held for use), which were included in investment in real estate, net |
14.Commitments and Contingencie
14.Commitments and Contingencies | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
14.Commitments and Contingencies | 14. Commitments and Contingencies The Operating Partnership, as an owner of real estate, is subject to various Federal, state and local environmental laws. Compliance by the Operating Partnership with existing laws has not had a material adverse effect on the Operating Partnership. However, the Operating Partnership 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 Operating Partnership 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 Operating Partnership 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 Operating Partnership 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 built by the Operating Partnership. Accordingly, the Operating Partnership is defending the suit vigorously. Due to the pendency of the Operating Partnerships 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 September30, 2009. While no assurances can be given, the Operating Partnership does not believe that the suit, if adversely determined, would have a material adverse effect on the Operating Partnership. The Operating Partnership does not believe there is any other litigation pending or threatened against it that, individually or in the aggregate, may reasonably be expected to have a material adverse effect on the Operating Partnership. The Operating Partnership 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 Operating Partnership periodically assesses the adequacy of the reserve and makes adjustments as necessary. During the nine months ended September30, 2009, the Operating Partnership recorded additional reserves of approximately $2.7 million (primarily related to an insurance settlement), paid approximately $1.9 million in claims and released approximately $1.0 million of remaining reserves for settled claims. As a result, the Operating Partnership had total reserves of approximately $10.1 million at September30, 2009. While no assurances can be given, the Operating Partnership does not believe that the ultimate resolution of these potential liabilities, if adversely determined, would have a material adverse effect on the Operating Partnership. As of September30, 2009, the Operating Partnership has six projects totaling 2,206 units in variou |
15.Reportable Segments
15.Reportable Segments | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
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 Operating Partnerships 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 Operating Partnerships operating segments have been aggregated by geography in a manner identical to that which is provided to its chief operating decision maker. The Operating Partnerships fee and asset management, development (including its 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 and as such, have been aggregated in the Other segment in the tables presented below. All revenues are from external customers and there is no customer who contributed 10% or more of the Operating Partnerships total revenues during the nine months and quarters ended September30, 2009 and 2008, respectively. The primary financial measure for the Operating Partnerships 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 Operating Partnership 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 Operating Partnerships 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 nine months and quarters ended September30, 2009 and 2008, respectively, as well as total assets at September30, 2009 (amounts in thousands): Nine Months Ended September30, 2009 Northeast Northwest Southeast Southwest Other (3) Total Rental income: Same store (1) $ 411,723 $ 277,253 $ 308,426 $ 322,756 $ - $ 1,320,158 Non-same store/other (2)(3) 44,783 13,383 10,039 19,429 63,591 151,225 Total rental income 456,506 290,636 318,465 342,185 63,591 1,471,383 Operating expenses: Same store (1) 153,9 |
Other
Other | |
9 Months Ended
Sep. 30, 2009 | |
Notes to Financial Statements [Abstract] | |
16.Subsequent Events/Other | 16. Subsequent Events/Other Subsequent Events Subsequent to September30, 2009 and up until the time of this filing, the Operating Partnership: Acquired one apartment property consisting of 326 units for $99.5 million; Sold five consolidated apartment properties consisting of 1,480 units for $126.9 million (excluding condominium units) and one unconsolidated apartment property consisting of 238 units for $11.2 million (sales price listed is the gross sales price); Obtained $40.0 million of new mortgage debt; Repaid $164.5 million of mortgage loans; Entered into $200.0 million of forward starting swaps to hedge changes in interest rates related to future secured or unsecured debt issuances; and Entered into $200.0 million of fair value interest rate swaps to convert a portion of its fixed rate 2013 unsecured notes to a floating rate of interest. Other During the nine months ended September30, 2009, the Operating Partnership recorded an approximate $11.1 million non-cash asset impairment charge on a parcel of land held for development. 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 nine months ended September30, 2009 and 2008, the Operating Partnership recorded approximately $1.3 million and $2.2 million of additional general and administrative expense, respectively, and $1.3 million and $0.3 million of additional property management expense, respectively, related primarily to cash severance for various employees. |
Document Information
Document Information | |
9 Months Ended
Sep. 30, 2009 | |
Document Information [Text Block] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | 2009-09-30 |
Entity Information
Entity Information | |
9 Months Ended
Sep. 30, 2009 | |
Entity [Text Block] | |
Entity Registrant Name | ERP OPERATING LTD PARTNERSHIP |
Entity Central Index Key | 0000931182 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |