Statement Of Financial Position
Statement Of Financial Position Unclassified - Real Estate Operations (USD $) | ||
In Thousands | Dec. 31, 2009
| Dec. 31, 2008
|
Investment in real estate | ||
Land | $3,650,324 | $3,671,299 |
Depreciable property | 13,893,521 | 13,908,594 |
Projects under development | 668,979 | 855,473 |
Land held for development | 252,320 | 254,873 |
Investment in real estate | 18,465,144 | 18,690,239 |
Accumulated depreciation | (3,877,564) | (3,561,300) |
Investment in real estate, net | 14,587,580 | 15,128,939 |
Cash and cash equivalents | 193,288 | 890,794 |
Investments in unconsolidated entities | 6,995 | 5,795 |
Deposits - restricted | 352,008 | 152,732 |
Escrow deposits - mortgage | 17,292 | 19,729 |
Deferred financing costs, net | 46,396 | 53,817 |
Other assets | 213,956 | 283,304 |
Total assets | 15,417,515 | 16,535,110 |
Liabilities: | ||
Mortgage notes payable | 4,783,446 | 5,036,930 |
Notes, net | 4,609,124 | 5,447,012 |
Lines of credit | 0 | 0 |
Accounts payable and accrued expenses | 58,537 | 108,463 |
Accrued interest payable | 101,849 | 113,846 |
Other liabilities | 272,236 | 289,562 |
Security deposits | 59,264 | 64,355 |
Distributions payable | 100,266 | 141,843 |
Total liabilities | 9,984,722 | 11,202,011 |
Commitments and contingencies | ||
Redeemable Limited Partners | 258,280 | 264,394 |
Partners' capital: | ||
Preference Units | 208,773 | 208,786 |
Preference Interests and Junior Preference Units | 0 | 184 |
General Partner | 4,833,885 | 4,732,369 |
Limited Partners | 116,120 | 137,645 |
Accumulated other comprehensive income (loss) | 4,681 | (35,799) |
Total partners' capital | 5,163,459 | 5,043,185 |
Noncontrolling Interests - Partially Owned Properties | 11,054 | 25,520 |
Total capital | 5,174,513 | 5,068,705 |
Total liabilities and capital | $15,417,515 | $16,535,110 |
Statement Of Income Real Estate
Statement Of Income Real Estate Excluding REITs (USD $) | |||
In Thousands | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
REVENUES | |||
Rental income | $1,933,365 | $1,964,954 | $1,814,863 |
Fee and asset management | 10,346 | 10,715 | 9,183 |
Total revenues | 1,943,711 | 1,975,669 | 1,824,046 |
EXPENSES | |||
Property and maintenance | 487,216 | 508,048 | 472,899 |
Real estate taxes and insurance | 215,250 | 203,582 | 181,887 |
Property management | 71,938 | 77,063 | 87,476 |
Fee and asset management | 7,519 | 7,981 | 8,412 |
Depreciation | 582,280 | 559,468 | 531,178 |
General and administrative | 38,994 | 44,951 | 46,767 |
Impairment | 11,124 | 116,418 | 0 |
Total expenses | 1,414,321 | 1,517,511 | 1,328,619 |
Operating income | 529,390 | 458,158 | 495,427 |
Interest and other income | 16,684 | 33,515 | 20,037 |
Other expenses | (6,487) | (5,760) | (1,827) |
Interest: | |||
Expense incurred, net | (503,828) | (489,513) | (489,310) |
Amortization of deferred financing costs | (12,794) | (9,684) | (10,077) |
Income (loss) 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 | 22,965 | (13,284) | 14,250 |
Income and other tax (expense) benefit | (2,808) | (5,284) | (2,518) |
(Loss) income from investments in unconsolidated entities | (2,815) | (107) | 332 |
Net gain on sales of unconsolidated entities | 10,689 | 2,876 | 2,629 |
Net gain on sales of land parcels | 0 | 2,976 | 6,360 |
Income (loss) from continuing operations | 28,031 | (12,823) | 21,053 |
Discontinued operations, net | 353,998 | 449,236 | 1,026,303 |
Net income | 382,029 | 436,413 | 1,047,356 |
Net loss (income) attributable to Noncontrolling Interests - Partially Owned Properties | 558 | (2,650) | (2,200) |
Net income attributable to controlling interests | 382,587 | 433,763 | 1,045,156 |
ALLOCATION OF NET INCOME: | |||
Preference Units | 14,479 | 14,507 | 22,792 |
Preference Interests and Junior Preference Units | 9 | 15 | 441 |
Premium on redemption of Preference Units | 0 | 0 | 6,154 |
General Partner | 347,794 | 393,115 | 951,242 |
Limited Partners | 20,305 | 26,126 | 64,527 |
Net income available to Units | $368,099 | $419,241 | $1,015,769 |
Earnings per Unit - basic: | |||
Income (loss) from continuing operations available to Units | 0.05 | -0.1 | -0.04 |
Net income available to Units | 1.27 | 1.46 | 3.4 |
Weighted average Units outstanding | 289,167 | 287,631 | 298,392 |
Earnings per Unit - diluted: | |||
Income (loss) from continuing operations available to Units | 0.05 | -0.1 | -0.04 |
Net income available to Units | 1.27 | 1.46 | 3.4 |
Weighted average Units outstanding | 290,105 | 287,631 | 298,392 |
Distributions declared per Unit outstanding | 1.64 | 1.93 | 1.87 |
Statement Of Other Comprehensiv
Statement Of Other Comprehensive Income (USD $) | |||
In Thousands | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Comprehensive income: | |||
Net income | $382,029 | $436,413 | $1,047,356 |
Other comprehensive income (loss) - derivative instruments: | |||
Unrealized holding gains (losses) arising during the year | 37,676 | (23,815) | (3,853) |
Losses reclassified into earnings from other comprehensive income | 3,724 | 2,696 | 1,954 |
Other | 449 | 0 | 0 |
Other comprehensive income (loss) - other instruments: | |||
Unrealized holding gains arising during the year | 3,574 | 1,202 | 27 |
(Gains) realized during the year | (4,943) | 0 | 0 |
Comprehensive income | 422,509 | 416,496 | 1,045,484 |
Comprehensive loss (income) attributable to Noncontrolling Interests - Partially Owned Properties | 558 | (2,650) | (2,200) |
Comprehensive income attributable to controlling interests | $423,067 | $413,846 | $1,043,284 |
Statement Of Cash Flows Indirec
Statement Of Cash Flows Indirect Real Estate (USD $) | |||
In Thousands | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $382,029 | $436,413 | $1,047,356 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 600,375 | 602,908 | 616,414 |
Amortization of deferred financing costs | 13,127 | 9,701 | 11,849 |
Amortization of discounts on investment securities | (1,661) | (365) | 0 |
Amortization of discounts and premiums on debt | 5,857 | 9,730 | 5,082 |
Amortization of deferred settlements on derivative instruments | 2,228 | 1,317 | 575 |
Impairment | 11,124 | 116,418 | 0 |
Write-off of pursuit costs | 4,838 | 5,535 | 1,726 |
Transaction costs | 1,650 | 225 | 104 |
Loss (income) from investments in unconsolidated entities | 2,815 | 107 | (332) |
Distributions from unconsolidated entities - return on capital | 153 | 116 | 102 |
Net (gain) on sales of investment securities | (4,943) | 0 | 0 |
Net (gain) on sales of unconsolidated entities | (10,689) | (2,876) | (2,629) |
Net (gain) on sales of land parcels | 0 | (2,976) | (6,360) |
Net (gain) on sales of discontinued operations | (335,299) | (392,857) | (933,013) |
Loss (gain) on debt extinguishments | 17,525 | (18,656) | 3,339 |
Unrealized (gain) loss on derivative instruments | (3) | 500 | (1) |
Compensation paid with Company Common Shares | 17,843 | 22,311 | 21,631 |
Other operating activities, net | 0 | 0 | (19) |
Changes in assets and liabilities: | |||
Decrease (increase) in deposits - restricted | 3,117 | (1,903) | 2,927 |
Decrease (increase) in other assets | 11,768 | (1,488) | (4,873) |
(Decrease) in accounts payable and accrued expenses | (34,524) | (821) | (9,760) |
(Decrease) increase in accrued interest payable | (11,997) | (10,871) | 33,545 |
Increase (decrease) in other liabilities | 2,220 | (19,412) | 1,482 |
(Decrease) increase in security deposits | (5,091) | 2,196 | 4,087 |
Net cash provided by operating activities | 672,462 | 755,252 | 793,232 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Investment in real estate - acquisitions | (175,531) | (388,083) | (1,680,074) |
Investment in real estate - development/other | (330,623) | (521,546) | (480,184) |
Improvements to real estate | (123,937) | (169,838) | (252,675) |
Additions to non-real estate property | (2,028) | (2,327) | (7,696) |
Interest capitalized for real estate under development | (34,859) | (60,072) | (45,107) |
Proceeds from disposition of real estate, net | 887,055 | 887,576 | 2,012,939 |
Investments in unconsolidated entities | 0 | 0 | (191) |
Distributions from unconsolidated entities - return of capital | 6,521 | 3,034 | 122 |
Purchase of investment securities | (77,822) | (158,367) | 0 |
Proceeds from sale of investment securities | 215,753 | 0 | 0 |
Transaction costs | (1,650) | (225) | (104) |
(Increase) decrease in deposits on real estate acquisitions, net | (250,257) | 65,395 | 245,667 |
Decrease in mortgage deposits | 2,437 | 445 | 5,354 |
Acquisition of Noncontrolling Interests - Partially Owned Properties | (11,480) | (20) | 0 |
Other investing activities, net | 0 | 0 | 1,200 |
Net cash provided by (used for) investing activities | 103,579 | (344,028) | (200,749) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Loan and bond acquisition costs | (9,291) | (9,233) | (26,257) |
Mortgage notes payable: | |||
Proceeds | 738,798 | 1,841,453 | 827,831 |
Restricted cash | 46,664 | 37,262 | (113,318) |
Lump sum payoffs | (939,022) | (411,391) | (523,299) |
Scheduled principal repayments | (17,763) | (24,034) | (24,732) |
Gain (loss) on debt extinguishments | 2,400 | (81) | (3,339) |
Notes, net: | |||
Proceeds | 0 | 0 | 1,493,030 |
Lump sum payoffs | (850,115) | (304,043) | (150,000) |
Scheduled principal repayments | 0 | 0 | (4,286) |
(Loss) gain on debt extinguishments | (19,925) | 18,737 | 0 |
Lines of credit: | |||
Proceeds | 0 | 841,000 | 17,536,000 |
Repayments | 0 | (980,000) | (17,857,000) |
Proceeds from (payments on) settlement of derivative instruments | 11,253 | (26,781) | 2,370 |
Proceeds from sale of OP Units | 86,184 | 0 | 0 |
Proceeds from EQR's Employee Share Purchase Plan (ESPP) | 5,292 | 6,170 | 7,165 |
Proceeds from exercise of EQR options | 9,136 | 24,634 | 28,760 |
OP Units repurchased and retired | (1,124) | (12,548) | (1,221,680) |
Redemption of Preference Units | 0 | 0 | (175,000) |
Premium on redemption of Preference Units | 0 | 0 | (24) |
Payment of offering costs | (2,536) | (102) | (175) |
Other financing activities, net | (16) | (16) | (14) |
Contributions - Noncontrolling Interests - Partially Owned Properties | 893 | 2,083 | 10,267 |
Contributions - Limited Partners | 78 | 0 | 0 |
Distributions: | |||
OP Units - General Partner | (488,604) | (522,195) | (526,281) |
Preference Units | (14,479) | (14,521) | (27,008) |
Preference Interests and Junior Preference Units | (12) | (15) | (453) |
OP Units - Limited Partners | (28,935) | (34,584) | (35,543) |
Noncontrolling Interests - Partially Owned Properties | (2,423) | (3,056) | (18,943) |
Net cash (used for) provided by financing activities | (1,473,547) | 428,739 | (801,929) |
Net (decrease) increase in cash and cash equivalents | (697,506) | 839,963 | (209,446) |
Cash and cash equivalents, beginning of year | 890,794 | 50,831 | 260,277 |
Cash and cash equivalents, end of year | 193,288 | 890,794 | 50,831 |
SUPPLEMENTAL INFORMATION: | |||
Cash paid for interest, net of amounts capitalized | 508,847 | 491,803 | 457,700 |
Net cash paid (received) for income and other taxes | 3,968 | (1,252) | (1,587) |
Real estate acquisitions/dispositions/other: | |||
Mortgage loans assumed | 0 | 24,946 | 226,196 |
Valuation of OP Units issued | 1,034 | 849 | 0 |
Mortgage loans (assumed) by purchaser | (17,313) | 0 | (76,744) |
Amortization of deferred financing costs: | |||
Investment in real estate, net | (3,585) | (1,986) | (1,521) |
Deferred financing costs, net | 16,712 | 11,687 | 13,370 |
Amortization of discounts and premiums on debt: | |||
Investment in real estate, net | (3) | (6) | 0 |
Mortgage notes payable | (6,097) | (6,287) | (6,252) |
Notes, net | 11,957 | 16,023 | 11,334 |
Amortization of deferred settlements on derivative instruments: | |||
Other liabilities | (1,496) | (1,379) | (1,379) |
Accumulated other comprehensive income (loss) | 3,724 | 2,696 | 1,954 |
Unrealized (gain) loss on derivative instruments: | |||
Other assets | (33,261) | (6,680) | (2,347) |
Mortgage notes payable | (1,887) | 6,272 | 7,492 |
Notes, net | 719 | 1,846 | 4,323 |
Other liabilities | (3,250) | 22,877 | (5,616) |
Accumulated other comprehensive income (loss) | 37,676 | (23,815) | (3,853) |
Proceeds from (payments on) settlement of derivative instruments: | |||
Other assets | 11,253 | (98) | 2,375 |
Other liabilities | $0 | ($26,683) | ($5) |
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 INCOME (LOSS)
| NONCONTROLLING INTERESTS - PARTIALLY OWNED PROPERTIES
| Total
|
Balance, beginning of year at Dec. 31, 2006 | $386,574 | $11,684 | $5,229,672 | $186,285 | ($14,010) | $26,814 | |
Conversion of Preference Units into OP Units held by General Partner | 1,912 | ||||||
Accumulated other comprehensive income (loss) - derivative instruments: | |||||||
Unrealized holding gains (losses) arising during the year | (3,853) | (3,853) | |||||
Losses reclassified into earnings from other comprehensive income | 1,954 | 1,954 | |||||
Other | 0 | 0 | |||||
Net loss (income) attributable to Noncontrolling Interests - Partially Owned Properties | 2,200 | (2,200) | |||||
Redemption of 8.60% Series D Cumulative Redeemable | (175,000) | ||||||
Conversion of 7.625% Series J Preference Interests | (11,500) | ||||||
Conversion of Preference Interests into OP Units held by General Partner | 11,500 | ||||||
Accumulated other comprehensive income (loss) - other instruments: | |||||||
Unrealized holding gains arising during the year | 27 | 27 | |||||
(Gains) realized during the year | 0 | 0 | |||||
Contributions by Noncontrolling Interests | 10,267 | ||||||
Conversion of 7.00% Series E Cumulative Convertible | (1,818) | ||||||
Conversion of Series B Junior Preference Units | 0 | ||||||
Conversion of OP Units held by Limited Partners into OP Units held by General Partner | 32,445 | (32,445) | |||||
Distributions to Noncontrolling Interests | (18,957) | ||||||
Conversion of 7.00% Series H Cumulative Convertible | (94) | ||||||
Issuance of OP Units | 0 | 0 | |||||
Other | 5,912 | ||||||
Exercise of EQR share options | 28,760 | ||||||
Issuance of LTIP Units | 0 | ||||||
Acquisition of additional ownership interest by Operating Partnership | 0 | ||||||
EQR's Employee Share Purchase Plan (ESPP) | 7,165 | ||||||
Equity compensation associated with Units - Limited Partners | 0 | ||||||
Share-based employee compensation expense: | |||||||
EQR performance shares | 1,278 | ||||||
EQR restricted shares | 15,230 | ||||||
EQR share options | 5,345 | ||||||
EQR ESPP discount | 1,701 | ||||||
Net income available to Units - Limited Partners | 64,527 | 64,527 | |||||
OP Units repurchased and retired | (1,226,320) | ||||||
Units - Limited Partners distributions | (35,213) | ||||||
Offering costs | (175) | ||||||
Premium on redemption of Preference Units - original issuance costs | 6,130 | ||||||
Net income available to Units - General Partner | 951,242 | 951,242 | |||||
OP Units - General Partner distributions | (520,700) | ||||||
Supplemental Executive Retirement Plan (SERP) | (6,709) | ||||||
Acquisition of Noncontrolling Interests - Partially Owned Properties | 0 | ||||||
Change in carrying value of Redeemable Limited Partners | 146,284 | 17,861 | |||||
Adjustment for Limited Partners ownership in Operating Partnership | 38,830 | (38,830) | |||||
Balance, end of year at Dec. 31, 2007 | 209,662 | 184 | 4,723,590 | 162,185 | (15,882) | 26,236 | |
Conversion of Preference Units into OP Units held by General Partner | 876 | ||||||
Accumulated other comprehensive income (loss) - derivative instruments: | |||||||
Unrealized holding gains (losses) arising during the year | (23,815) | (23,815) | |||||
Losses reclassified into earnings from other comprehensive income | 2,696 | 2,696 | |||||
Other | 0 | 0 | |||||
Net loss (income) attributable to Noncontrolling Interests - Partially Owned Properties | 2,650 | (2,650) | |||||
Redemption of 8.60% Series D Cumulative Redeemable | 0 | ||||||
Conversion of 7.625% Series J Preference Interests | 0 | ||||||
Conversion of Preference Interests into OP Units held by General Partner | 0 | ||||||
Accumulated other comprehensive income (loss) - other instruments: | |||||||
Unrealized holding gains arising during the year | 1,202 | 1,202 | |||||
(Gains) realized during the year | 0 | 0 | |||||
Contributions by Noncontrolling Interests | 2,083 | ||||||
Conversion of 7.00% Series E Cumulative Convertible | (828) | ||||||
Conversion of Series B Junior Preference Units | 0 | ||||||
Conversion of OP Units held by Limited Partners into OP Units held by General Partner | 49,901 | (49,901) | |||||
Distributions to Noncontrolling Interests | (3,072) | ||||||
Conversion of 7.00% Series H Cumulative Convertible | (48) | ||||||
Issuance of OP Units | 0 | 849 | |||||
Other | (500) | ||||||
Exercise of EQR share options | 24,634 | ||||||
Issuance of LTIP Units | 0 | ||||||
Acquisition of additional ownership interest by Operating Partnership | (1,877) | ||||||
EQR's Employee Share Purchase Plan (ESPP) | 6,170 | ||||||
Equity compensation associated with Units - Limited Partners | 0 | ||||||
Share-based employee compensation expense: | |||||||
EQR performance shares | (8) | ||||||
EQR restricted shares | 17,278 | ||||||
EQR share options | 5,846 | ||||||
EQR ESPP discount | 1,289 | ||||||
Net income available to Units - Limited Partners | 26,126 | 26,126 | |||||
OP Units repurchased and retired | (7,908) | ||||||
Units - Limited Partners distributions | (33,745) | ||||||
Offering costs | (102) | ||||||
Premium on redemption of Preference Units - original issuance costs | 0 | ||||||
Net income available to Units - General Partner | 393,115 | 393,115 | |||||
OP Units - General Partner distributions | (523,648) | ||||||
Supplemental Executive Retirement Plan (SERP) | (7,304) | ||||||
Acquisition of Noncontrolling Interests - Partially Owned Properties | 0 | ||||||
Change in carrying value of Redeemable Limited Partners | 65,524 | 15,247 | |||||
Adjustment for Limited Partners ownership in Operating Partnership | (16,884) | 16,884 | |||||
Balance, end 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 | ||||||
Accumulated other comprehensive income (loss) - derivative instruments: | |||||||
Unrealized holding gains (losses) arising during the year | 37,676 | 37,676 | |||||
Losses reclassified into earnings from other comprehensive income | 3,724 | 3,724 | |||||
Other | 449 | 449 | |||||
Net loss (income) attributable to Noncontrolling Interests - Partially Owned Properties | (558) | 558 | |||||
Redemption of 8.60% Series D Cumulative Redeemable | 0 | ||||||
Conversion of 7.625% Series J Preference Interests | 0 | ||||||
Conversion of Preference Interests into OP Units held by General Partner | 0 | ||||||
Accumulated other comprehensive income (loss) - other instruments: | |||||||
Unrealized holding gains arising during the year | 3,574 | 3,574 | |||||
(Gains) realized during the year | (4,943) | (4,943) | |||||
Contributions by Noncontrolling Interests | 893 | ||||||
Conversion of 7.00% Series E Cumulative Convertible | (13) | ||||||
Conversion of Series B Junior Preference Units | (184) | ||||||
Conversion of OP Units held by Limited Partners into OP Units held by General Partner | 48,803 | (48,803) | |||||
Distributions to Noncontrolling Interests | (2,439) | ||||||
Conversion of 7.00% Series H Cumulative Convertible | 0 | ||||||
Issuance of OP Units | 123,734 | 1,034 | |||||
Other | (657) | ||||||
Exercise of EQR share options | 9,136 | ||||||
Issuance of LTIP Units | 78 | ||||||
Acquisition of additional ownership interest by Operating Partnership | (11,705) | ||||||
EQR's Employee Share Purchase Plan (ESPP) | 5,292 | ||||||
Equity compensation associated with Units - Limited Partners | 1,194 | ||||||
Share-based employee compensation expense: | |||||||
EQR performance shares | 179 | ||||||
EQR restricted shares | 11,132 | ||||||
EQR share options | 5,996 | ||||||
EQR ESPP discount | 1,303 | ||||||
Net income available to Units - Limited Partners | 20,305 | 20,305 | |||||
OP Units repurchased and retired | (1,124) | ||||||
Units - Limited Partners distributions | (25,679) | ||||||
Offering costs | (2,536) | ||||||
Premium on redemption of Preference Units - original issuance costs | 0 | ||||||
Net income available to Units - General Partner | 347,794 | 347,794 | |||||
OP Units - General Partner distributions | (450,287) | ||||||
Supplemental Executive Retirement Plan (SERP) | 27,809 | ||||||
Acquisition of Noncontrolling Interests - Partially Owned Properties | (1,496) | ||||||
Change in carrying value of Redeemable Limited Partners | (14,544) | 20,658 | |||||
Adjustment for Limited Partners ownership in Operating Partnership | (9,688) | 9,688 | |||||
Balance, end of year at Dec. 31, 2009 | $208,773 | $0 | $4,833,885 | $116,120 | $4,681 | $11,054 | $5,174,513 |
Business
Business | |
12 Months Ended
Dec. 31, 2009 | |
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 December31, 2009 owned an approximate 95.2% 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 December31, 2009, the Operating Partnership, directly or indirectly through investments in title holding entities, owned all or a portion of 495 properties in 23 states and the District of Columbia consisting of 137,007 units. The ownership breakdown includes (table does not include various uncompleted development properties): Properties Units Wholly Owned Properties 432 118,796 Partially Owned Properties: Consolidated 27 5,530 Unconsolidated 34 8,086 Military Housing 2 4,595 495 137,007 The Wholly Owned Properties are accounted for under the consolidation method of accounting. The Operating Partnership beneficially owns 100% fee simple title to 429 of the 432 Wholly Owned Properties and all but one of its wholly owned development properties and land parcels. The Operating Partnership owns the building and improvements and leases the land underlying the improvements under long-term ground leases that expire in 2026, 2077 and 2101 for the three operating properties, respectively, and 2104 for one land parcel. These properties are consolidated and reflected as real estate assets while the ground leases are accounted for as operating leases. The Partially Owned Properties Consolidated are controlled by the Operating Partnership but have partners with noncontrolling interests and are accounted for under the consolidation method of accounting. The Partially Owned Properties Unconsolidated are partially owned but not controlled by the Operating Partnership and consist of investments in partnership interests that are accounted for under the equity method of accounting. The Military Housing properties consist of investments in limited liability companies that, as a result of the terms of the operating agreements, are accounted for as management contract rights with all fees recognized as fee and asset management revenue. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | |
12 Months Ended
Dec. 31, 2009 | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation Due to the Operating Partnerships ability as general partner to control either through ownership or by contract its subsidiaries, other than entities that own controlling interests in the Partially Owned Properties Unconsolidated and certain other entities in which the Operating Partnership has investments, each such subsidiary has been consolidated with the Operating Partnership for financial reporting purposes. The consolidated financial statements also include all variable interest entities for which the Operating Partnership is the primary beneficiary. Noncontrolling interests represented by EQRs indirect 1% interest in various entities are immaterial and have not been accounted for in the Consolidated Financial Statements. In addition, certain amounts due from EQR for its 1% interests in various entities have not been reflected in the Consolidated Balance Sheets since such amounts are immaterial. Real Estate Assets and Depreciation of Investment in Real Estate Effective for business combinations on or after January1, 2009, an acquiring entity is required to recognize all assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. In addition, an acquiring entity is required to expense acquisition-related costs as incurred (amounts are included in the other expenses line item in the consolidated statements of operations), value noncontrolling interests at fair value at the acquisition date and expense restructuring costs associated with an acquired business. Due to the Operating Partnerships limited acquisition activities in 2009, this has not had a material effect on the Operating Partnerships consolidated results of operations or financial position. Should the Operating Partnership increase its acquisition activities, the effect could become material. The Operating Partnership allocates the purchase price of properties to net tangible and identified intangible assets acquired based on their fair values. In making estimates of fair values for purposes of allocating purchase price, the Operating Partnership utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, our own analysis of recently acquired and existing comparable properties in our portfolio and other market data. The Operating Partnership also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. The Operating Partnership allocates the purchase price of acquired real estate to various components as follows: Land Based on actual purchase price if acquired separately or market research/comparables if acquired with an operating property. Furniture, Fixtures and Equipment Ranges between $8,000 and $13,000 per apartment unit acquired as an estimate of the fair value of the appliances and fixtures inside a unit. The per-unit amount applied depends on the type |
Capital and Redeemable Limited
Capital and Redeemable Limited Partners | |
1/1/2009 - 12/31/2009
| |
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 years ended December31, 2009, 2008 and 2007: 2009 2008 2007 General and Limited Partner Units General and Limited Partner Units outstanding at January1, 289,466,537 287,974,981 313,466,216 Issued to General Partner: Conversion of Series E Preference Units 612 36,830 80,895 Conversion of Series H Preference Units - 2,750 5,463 Conversion of Preference Interests - - 324,484 Issuance of OP Units 3,497,300 - - Exercise of EQR share options 422,713 995,129 1,040,765 Employee Share Purchase Plan (ESPP) 324,394 195,961 189,071 Restricted EQR share grants, net 298,717 461,954 352,433 Issued to Limited Partners: LTIP Units, net 154,616 - - OP Units issued through acquisitions/consolidations 32,061 19,017 - Conversion of Series B Junior Preference Units 7,517 - - OP Units Other: Repurchased and retired (47,450 ) (220,085 ) (27,484,346 ) General and Limited Partner Units outstanding at December31, 294,157,017 289,466,537 287,974,981 Limited Partner Units Limited Partner Units outstanding at January1, 16,679,777 18,420,320 19,914,583 Limited Partner LTIP Units, net 154,616 - - Limited Partner OP Units issued through acquisitions/consolidations 32,061 19,017 - Conversion of Series B Junior Preference Units 7,517 - - Conversion of Limited Partner OP Units to EQR Common Shares (2,676,002 ) (1,759,560 ) (1,494,263 ) Limited Partner Units outstanding at December31, 14,197,969 16,679,777 18,420,320 Limited Partner Units Ownership Interest in Operating Partnership 4.8 % 5.8 % 6.4 % Limited Partner LTIP Units Issued: Issuance per unit $0.50 - - Issuance contribution valuation $0.1 million - - Limited Partner OP Units Issued: Acquisitions/consolidations per unit $26.50 $44.64 - Acquisitions/consolidations valuation $0.8 million $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 - - As of December31, 2009, an unlimited amount of equity securities remains available for issuance by EQR under a registration statement the SEC declared effective in December 2008 (under SEC regulations enacted in 2005, the registration statement automatically expires on December15, 2011 and does not contain a maximum issuance amount). Per the terms of ERPOPs partnership agreement, EQR contr |
Real Estate
Real Estate | |
12 Months Ended
Dec. 31, 2009 | |
Real Estate | 4. Real Estate The following table summarizes the carrying amounts for the Operating Partnerships investment in real estate (at cost) as of December31, 2009 and 2008 (amounts in thousands): 2009 2008 Land $ 3,650,324 $ 3,671,299 Depreciable property: Buildings and improvements 12,781,543 12,836,310 Furniture, fixtures and equipment 1,111,978 1,072,284 Projects under development: Land 106,716 175,355 Construction-in-progress 562,263 680,118 Land held for development: Land 181,430 205,757 Construction-in-progress 70,890 49,116 Investment in real estate 18,465,144 18,690,239 Accumulated depreciation (3,877,564 ) (3,561,300 ) Investment in real estate, net $ 14,587,580 $ 15,128,939 During the year ended December31, 2009, the Operating Partnership acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands): Properties Units Purchase Price Rental Properties 2 566 $ 145,036 Land Parcel (one) - - 11,500 Total 2 566 $ 156,536 The Operating Partnership also 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 year ended December31, 2008, the Operating Partnership acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands): Properties Units Purchase Price Rental Properties 7 2,141 $ 380,683 Uncompleted Developments - - 31,705 Military Housing (1) 1 978 - Total 8 3,119 $ 412,388 (1) The Operating Partnership assumed management of 978 housing units (828 units as of December31, 2009) at McChord Air Force Base in Washington state and invested $2.4 million towards its redevelopment. McChord AFB adjoins Ft. Lewis, a U.S. Army base at which the Operating Partnership already manages 3,731 units (3,767 units as of December31, 2009). During the year ended December31, 2009, the Operating Partnership disposed of the following to unaffiliated parties (sales price in thousands): Properties Units SalesPrice Rental Properties: Consolidated 54 11,055 $ 905,219 Unconsolidated (1) 6 1,434 96,018 Condominium Conversion Properties 1 62 12,021 Total 61 12,551 $ 1,013,258 (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 discontinu |
Dispose of Real Estate
Dispose of Real Estate | |
12 Months Ended
Dec. 31, 2009 | |
Commitments to Acquire/Dispose of Real Estate | 5. Commitments to Acquire/Dispose of Real Estate As of the date of this filing, in addition to the properties that were subsequently acquired as discussed in Note 21, the Operating Partnership had entered into separate agreements to acquire two rental properties consisting of 852 units for $309.7 million. As of the date of this filing, in addition to the properties that were subsequently disposed of as discussed in Note 21, the Operating Partnership had entered into separate agreements to dispose of the following (sales price in thousands): Properties Units SalesPrice Rental Properties: Consolidated 18 2,268 $ 191,501 Unconsolidated 1 216 10,700 Total 19 2,484 $ 202,201 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. |
Investments in Partially Owned
Investments in Partially Owned Entities | |
12 Months Ended
Dec. 31, 2009 | |
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 December31, 2009 (amounts in thousands except for project and unit amounts): Consolidated Unconsolidated Development Projects Institutional Joint Ventures(5) Held for and/or Under Development Completed, Not Stabilized(4) Completed and Stabilized Other Total Total projects (1) - 3 3 21 27 34 Total units (1) - 1,024 710 3,796 5,530 8,086 Debt Secured (2): EQR Ownership (3) $ 303,253 $ 218,965 $ 113,385 $ 219,136 $ 854,739 $ 101,809 Noncontrolling Ownership - - - 82,732 82,732 305,426 Total (at 100%) $ 303,253 $ 218,965 $ 113,385 $ 301,868 $ 937,471 $ 407,235 (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 $29.8 million, July1, 2019, 5.305%. A portion of this mortgage debt is also partially collateralized by $42.6 million in unconsolidated restricted cash set aside from the net proceeds of property sales. During the third quarter of 2009, the Operating Partnership acquired its partners interest in one of the previously unconsolidated properties containing 250 units for $18.5 million and as a result, the project is now consolidated and wholly owned. |
Deposits - Restricted
Deposits - Restricted | |
12 Months Ended
Dec. 31, 2009 | |
Deposits - Restricted | 7. Deposits Restricted The following table presents the Operating Partnerships restricted deposits as of December31, 2009 and 2008 (amounts in thousands): December31, 2009 December31, 2008 Taxdeferred (1031)exchange proceeds $ 244,257 $ - Earnest money on pending acquisitions 6,000 1,200 Restricted deposits on debt (1) 49,565 96,229 Resident security and utility deposits 39,361 41,478 Other 12,825 13,825 Totals $ 352,008 $ 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. |
Mortgage Notes Payable
Mortgage Notes Payable | |
12 Months Ended
Dec. 31, 2009 | |
Mortgage Notes Payable | 8. Mortgage Notes Payable As of December31, 2009, the Operating Partnership had outstanding mortgage debt of approximately $4.8 billion. During the year ended December31, 2009, the Operating Partnership: Repaid $956.8 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 $40.0 million of new mortgage loans to accommodate the delayed sale of two properties that closed in January 2010; Obtained $198.8 million of new mortgage loans on development properties; Recognized a gain on early debt extinguishment of $2.4 million and wrote-off approximately $1.1 million of unamortized deferred financing costs; and Was released from $17.3 million of mortgage debt assumed by the purchaser on two disposed properties. As of December31, 2009, scheduled maturities for the Operating Partnerships outstanding mortgage indebtedness were at various dates through September1, 2048. At December31, 2009, the interest rate range on the Operating Partnerships mortgage debt was 0.20% to 12.465%. During the year ended December31, 2009, the weighted average interest rate on the Operating Partnerships mortgage debt was 4.89%. The historical cost, net of accumulated depreciation, of encumbered properties was $5.8 billion and $6.5 billion at December31, 2009 and 2008, respectively. Aggregate payments of principal on mortgage notes payable for each of the next five years and thereafter are as follows (amounts in thousands): Year Total 2010 $ 110,817 2011 758,850 2012 268,146 2013 167,361 2014 18,409 Thereafter 3,459,863 Total $ 4,783,446 As of December31, 2008, the Operating Partnership had outstanding mortgage debt of approximately $5.0 billion. During the year ended December31, 2008, the Operating Partnership: Repaid $435.4 million of mortgage loans; Assumed $24.9 million of mortgage debt on an uncompleted development property in connection with its acquisition; Obtained $500.0 million of mortgage loan proceeds through the issuance of an 11.5 year cross-collateralized loan with a fixed stated interest rate for 10.5 years at 5.19% secured by 13 properties; Obtained $550.0 million of mortgage loan proceeds through the issuance of an 11.5 year cross-collateralized loan with a fixed stated interest rate for 10.5 years at approximately 6% secured by 15 properties; Obtained $543.0 million of mortgage loan proceeds through the issuance of an 8 year cross-collateralized loan with a fixed stated interest rate for 7 years at approximately 6% secured by 18 properties; and Obtained an additional $248.5 million of new mortgage loans primarily on development properties. The Operating Partnership recorded approximately $81,000 and $131,000 of prepayment penalties and write-offs of unamortized deferred financing costs, respectively, as additional in |
Notes
Notes | |
12 Months Ended
Dec. 31, 2009 | |
Notes | 9. Notes The following tables summarize the Operating Partnerships unsecured note balances and certain interest rate and maturity date information as of and for the years ended December31, 2009 and 2008, respectively: December31, 2009 (Amounts are in thousands) Net Principal Balance Interest Rate Ranges Weighted Average InterestRate Maturity Date Ranges Fixed Rate Public/Private Notes (1) $ 3,771,700 3.85%-7.57% 5.93% 2011-2026 Floating Rate Public/Private Notes (1) 801,824 (1) 1.37% 2010-2013 Floating Rate Tax-Exempt Bonds 35,600 (2) 0.37% 2028 Totals $ 4,609,124 December31, 2008 (Amounts are in thousands) Net Principal Balance Interest Rate Ranges Weighted Average InterestRate Maturity Date Ranges Fixed Rate Public/Private Notes (1) $ 4,684,068 3.85% -7.57% 5.69% 2009-2026 Floating Rate Public/Private Notes (1) 651,554 (1) 3.89% 2009-2010 Fixed Rate Tax-Exempt Bonds 75,790 5.20% 5.07% 2029 Floating Rate Tax-Exempt Bonds 35,600 (2) 1.05% 2028 Totals $ 5,447,012 (1) At December31, 2009, $300.0 million in fair value interest rate swaps converts a portion of the $400.0 million face value 5.200% notes due April1, 2013 to a floating interest rate. At December31, 2008, $150.0 million in fair value interest rate swaps converted a portion of the $227.4 million face value 4.750% notes due June15, 2009 to a floating interest rate. (2) The floating interest rate is based on the 7-Day Securities Industry and Financial Markets Association (SIFMA) rate, which is the tax-exempt index equivalent of LIBOR. The interest rate is 0.27% and 0.75% at December31, 2009 and 2008, respectively. The Operating Partnerships unsecured public debt contains certain financial and operating covenants including, among other things, maintenance of certain financial ratios. The Operating Partnership was in compliance with its unsecured public debt covenants for both the years ended December31, 2009 and 2008. As of December31, 2009, an unlimited amount of debt securities remains available for issuance by the Operating Partnership under a registration statement that became automatically effective upon filing with the SEC in December 2008 (under SEC regulations enacted in 2005, the registration statement automatically expires on December21, 2011 and does not contain a maximum issuance amount). During the year ended December31, 2009, the Operating Partnership: Repurchased at par $105.2 million of its 4.75% fixed rate public notes due June15, 2009 pursuant to a cash tender offer announced on January16, 2009 and wrote-off approximately $79,000 of unamortized deferred financing costs and approximately $46,000 of unamortized discounts on notes payable; Repaid the remaining $122.2 million of its 4.75% fixed rate public notes at maturity; Repurchased at par $185.2 million of its 6.95% fixed rate public notes due March2, 2011 pursuant to a cash tender |
Lines of Credit
Lines of Credit | |
12 Months Ended
Dec. 31, 2009 | |
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 0.50%) 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 December31, 2009, the amount available on the credit facility was $1.37 billion (net of $56.7 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 and had no balance outstanding on its revolving credit facility at any time during the year ended December31, 2009. As of December31, 2008, the amount available on the credit facility was $1.29 billion (net of $130.0 million which was restricted/dedicated to support letters of credit and net of the $75.0 million discussed above). During the year ended December31, 2008, the weighted average interest rate was 4.31%. |
Derivative and Other Fair Value
Derivative and Other Fair Value Instruments | |
12 Months Ended
Dec. 31, 2009 | |
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 values of the Operating Partnerships mortgage notes payable and unsecured notes were approximately $4.8 billion and $4.6 billion, respectively, at December31, 2009. The fair values of the Operating Partnerships mortgage notes payable and unsecured notes were approximately $4.6 billion and $4.7 billion, respectively, at December31, 2009. The carrying values of the Operating Partnerships mortgage notes payable and unsecured notes were approximately $5.0 billion and $5.4 billion, respectively, at December31, 2008. The fair values of the Operating Partnerships mortgage notes payable and unsecured notes were approximately $5.0 billion and $4.7 billion, respectively, at December31, 2008. 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 December31, 2009 (dollar amounts are in thousands): Fair Value Hedges (1) Forward Starting Swaps (2) Development Cash Flow Hedges (3) Current Notional Balance $ 315,693 $ 700,000 $ 58,367 Lowest Possible Notional $ 315,693 $ 700,000 $ 3,020 Highest Possible Notional $ 317,694 $ 700,000 $ 91,343 Lowest Interest Rate 2.009 % 4.005 % 4.059 % Highest Interest Rate 4.800 % 4.695 % 4.059 % Earliest Maturity Date 2012 2021 2011 Latest Maturity Date 2013 2023 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 mandatory counterparty terminations in 2012, 2013 and 2014. (3) Development Cash Flow Hedges Convert outstanding floating rate debt to a fixed interest rate. The following tables provide the location of the Operating Partnerships derivative instruments within the accompanying Consolidated Balance |
Earnings Per Unit
Earnings Per Unit | |
12 Months Ended
Dec. 31, 2009 | |
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): Year Ended December31, 2009 2008 2007 Numerator for net income per Unit basic and diluted: Income (loss) from continuing operations $ 28,031 $ (12,823 ) $ 21,053 Net loss (income) attributable to Noncontrolling Interests Partially Owned Properties 558 (2,650 ) (2,200 ) Allocation to Preference Units (14,479 ) (14,507 ) (22,792 ) Allocation to Preference Interests and Junior Preference Units (9 ) (15 ) (441 ) Allocation to premium on redemption of Preference Units - - (6,154 ) Income (loss) from continuing operations available to Units 14,101 (29,995 ) (10,534 ) Discontinued operations, net 353,998 449,236 1,026,303 Numerator for net income per Unit basic and diluted $ 368,099 $ 419,241 $ 1,015,769 Denominator for net income per Unit basic and diluted: Denominator for net income per Unit basic 289,167 287,631 298,392 Effect of dilutive securities: Dilution for Units issuable upon assumed exercise/vesting of EQRs long-term compensation award shares/units 938 Denominator for net income per Unit diluted 290,105 287,631 298,392 Net income per Unit basic $ 1.27 $ 1.46 $ 3.40 Net income per Unit diluted $ 1.27 $ 1.46 $ 3.40 Net income per Unit basic: Income (loss) from continuing operations available to Units $ 0.049 $ (0.104 ) $ (0.035 ) Discontinued operations, net 1.222 1.560 3.440 Net income per Unit basic $ 1.271 $ 1.456 $ 3.405 Net income per Unit diluted: Income (loss) from continuing operations available to Units $ 0.049 $ (0.104 ) $ (0.035 ) Discontinued operations, net 1.220 1.560 3.440 Net income per Unit diluted $ 1.269 $ 1.456 $ 3.405 Potential common shares issuable from the assumed exercise/vesting of EQR long-term compensation award shares/units are automatically anti-dilutive and therefore excluded from the diluted earnings per Unit calculation as the Operating Partnership had a loss from continuing operations for the years ended December31, 2008 and 2007, respectively. Convertible preference interests/units that could be converted into 402,501, 427,090 and 652,534 weighted average Common Shares (which would be contributed to the Operating Partnership in exchange for OP Units) for the years ended December31, 2009, 2008 and 2007, respectiv |
Discontinued Operations
Discontinued Operations | |
12 Months Ended
Dec. 31, 2009 | |
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 each of the years ended December31, 2009, 2008 and 2007 (amounts in thousands). Year Ended December31, 2009 2008 2007 REVENUES Rental income $ 72,823 $ 173,243 $ 323,142 Total revenues 72,823 173,243 323,142 EXPENSES (1) Property and maintenance 26,681 52,785 102,287 Real estate taxes and insurance 9,062 19,853 40,317 Property management - (62 ) 266 Depreciation 18,095 43,440 85,236 General and administrative 34 29 15 Total expenses 53,872 116,045 228,121 Discontinued operating income 18,951 57,198 95,021 Interest and other income 21 249 328 Other expenses (1 ) - (3 ) Interest (2): Expense incurred, net (1,104 ) (2,897 ) (7,591 ) Amortization of deferred financing costs (333 ) (17 ) (1,772 ) Income and other tax benefit (expense) 1,165 1,846 7,307 Discontinued operations 18,699 56,379 93,290 Net gain on sales of discontinued operations 335,299 392,857 933,013 Discontinued operations, net $ 353,998 $ 449,236 $ 1,026,303 (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 2009 (excluding condominium conversion properties), the investment in real estate, net of accumulated depreciation, and the mortgage notes payable balances at December31, 2008 were $572.5 million and $38.9 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 in the consolidated balance sheets, was $0.8 million and $12.6 million at December31, 2009 and 2008, respectively. |
Share Incentive Plans
Share Incentive Plans | |
12 Months Ended
Dec. 31, 2009 | |
Share Incentive Plans | 14. Share Incentive Plans Any Common Shares issued pursuant to EQRs incentive equity compensation and employee share purchase plans will result in the Operating Partnership issuing OP Units to EQR on a one-for-one basis with the Operating Partnership receiving the net cash proceeds of such issuances. On May15, 2002, the shareholders of EQR approved the Companys 2002 Share Incentive Plan. The maximum aggregate number of awards that may be granted under this plan may not exceed 7.5% of the Companys outstanding Common Shares calculated on a fully diluted basis and determined annually on the first day of each calendar year. As of January1, 2010, this amount equaled 22,091,629, of which 6,295,992 shares were available for future issuance. No awards may be granted under the 2002 Share Incentive Plan, as restated, after February20, 2012. Pursuant to the 2002 Share Incentive Plan, as restated, and the Amended and Restated 1993 Share Option and Share Award Plan, as amended (collectively the Share Incentive Plans), officers, trustees and key employees of the Company may be granted share options to acquire Common Shares (Options) including non-qualified share options (NQSOs), incentive share options (ISOs) and share appreciation rights (SARs), or may be granted restricted or non-restricted shares, subject to conditions and restrictions as described in the Share Incentive Plans. In addition, each year prior to 2007, certain executive officers of the Company participated in the Companys performance-based restricted share plan. Effective January1, 2007, the Company elected to discontinue the award of new performance-based award grants. Options, SARs, restricted shares, performance shares and LTIP Units (see discussion below) are sometimes collectively referred to herein as Awards. The Options are generally granted at the fair market value of the Companys Common Shares at the date of grant, vest in three equal installments over a three-year period, are exercisable upon vesting and expire ten years from the date of grant. The exercise price for all Options under the Share Incentive Plans is equal to the fair market value of the underlying Common Shares at the time the Option is granted. Options exercised result in new Common Shares being issued on the open market. The Amended and Restated 1993 Share Option and Share Award Plan, as amended, will terminate at such time as all outstanding Awards have expired or have been exercised/vested. The Board of Trustees may at any time amend or terminate the Share Incentive Plans, but termination will not affect Awards previously granted. Any Options which had vested prior to such a termination would remain exercisable by the holder. Restricted shares that have been awarded through December31, 2009 generally vest three years from the award date. In addition, the Companys unvested restricted shareholders have the same voting rights as any other Common Share holder. During the three-year period of restriction, the Companys unvested restricted shareholders receive quarterly dividend payments on their shares at the same rate and on the same date as any other Common Share holder. As a result, dividends pai |
Employee Plans
Employee Plans | |
12 Months Ended
Dec. 31, 2009 | |
Employee Plans | 15. Employee Plans The Company established an Employee Share Purchase Plan to provide each employee and EQR trustee the ability to annually acquire up to $100,000 of Common Shares of EQR. In 2003, EQRs shareholders approved an increase in the aggregate number of Common Shares available under the ESPP to 7,000,000 (from 2,000,000). The Company has 3,561,333 Common Shares available for purchase under the ESPP at December31, 2009. The Common Shares may be purchased quarterly at a price equal to 85% of the lesser of: (a)the closing price for a share on the last day of such quarter; and (b)the greater of: (i)the closing price for a share on the first day of such quarter, and (ii)the average closing price for a share for all the business days in the quarter. The following table summarizes information regarding the Common Shares issued under the ESPP (the net proceeds noted below were contributed to the Operating Partnership in exchange for OP Units): Year Ended December31, 2009 2008 2007 (Amountsinthousandsexceptshareandpershareamounts) Shares issued 324,394 195,961 189,071 Issuance price ranges $14.21$24.84 $23.51$37.61 $31.38$43.17 Issuance proceeds $5,292 $6,170 $7,165 The Company established a defined contribution plan (the 401(k) Plan) to provide retirement benefits for employees that meet minimum employment criteria. The Operating Partnership, on behalf of the Company, matches dollar for dollar up to the first 3% of eligible compensation that a participant contributes to the 401(k) Plan. Participants are vested in the Companys contributions over five years. The Operating Partnership recognized an expense in the amount of $3.5 million, $3.8 million and $4.2 million for the years ended December31, 2009, 2008 and 2007, respectively. The Operating Partnership, on behalf of the Company, may also elect to make an annual discretionary profit-sharing contribution as a percentage of each individual employees eligible compensation under the 401(k) Plan. The Operating Partnership did not make a contribution for the years ended December31, 2009 and 2008 and as such, no expense was recognized in either year. The Operating Partnership recognized an expense of approximately $1.5 million for the year ended December31, 2007. The Company established a supplemental executive retirement plan (the SERP) to provide certain officers and EQR trustees an opportunity to defer a portion of their eligible compensation in order to save for retirement. The SERP is restricted to investments in EQR Common Shares, certain marketable securities that have been specifically approved and cash equivalents. The deferred compensation liability represented in the SERP and the securities issued to fund such deferred compensation liability are consolidated by the Operating Partnership and carried on the Operating Partnerships balance sheet, and the Companys Common Shares held in the SERP are accounted for as a reduction to General Partners capital. |
Distribution Reinvestment and S
Distribution Reinvestment and Share Purchase Plan | |
12 Months Ended
Dec. 31, 2009 | |
Distribution Reinvestment and Share Purchase Plan | 16. Distribution Reinvestment and Share Purchase Plan On November3, 1997, the Company filed with the SEC a Form S-3 Registration Statement to register 14,000,000 Common Shares pursuant to a Distribution Reinvestment and Share Purchase Plan (the DRIP Plan). The registration statement was declared effective on November25, 1997. The remaining shares available for issuance under the 1997 registration lapsed in December 2008. On December16, 2008, the Company filed with the SEC a Form S-3 Registration Statement to register 5,000,000 Common Shares under the DRIP Plan. The registration statement was automatically declared effective the same day and expires at the earlier of the date in which all 5,000,000 shares have been issued or December15, 2011. The Company has 4,932,533 Common Shares available for issuance under the DRIP Plan at December31, 2009. The DRIP Plan provides holders of record and beneficial owners of Common Shares and Preferred Shares with a simple and convenient method of investing cash distributions in additional Common Shares (which is referred to herein as the Dividend Reinvestment DRIP Plan). Common Shares may also be purchased on a monthly basis with optional cash payments made by participants in the DRIP Plan and interested new investors, not currently shareholders of EQR, at the market price of the Common Shares less a discount ranging between 0% and 5%, as determined in accordance with the DRIP Plan (which is referred to herein as the Share Purchase DRIP Plan). Common Shares purchased under the DRIP Plan may, at the option of EQR, be directly issued by EQR or purchased by EQRs transfer agent in the open market using participants funds. The net proceeds from any Common Share issuances are contributed to the Operating Partnership in exchange for OP Units. |
Transactions with Related Parti
Transactions with Related Parties | |
12 Months Ended
Dec. 31, 2009 | |
Transactions with Related Parties | 17. Transactions with Related Parties Pursuant to the terms of the partnership agreement for the Operating Partnership, the Operating Partnership is required to reimburse EQR for all expenses incurred by EQR in excess of income earned by EQR through its indirect 1% ownership of various entities. Amounts paid on behalf of EQR are reflected in the consolidated statements of operations as general and administrative expenses. The Operating Partnership provided asset and property management services to certain related entities for properties not owned by the Operating Partnership, which terminated in December 2008. Fees received for providing such services were approximately $0.3 million for both the years ended December31, 2008 and 2007. The Operating Partnership leases its corporate headquarters from an entity controlled by EQRs Chairman of the Board of Trustees. The lease terminates on July31, 2011. Amounts incurred for such office space for the years ended December31, 2009, 2008 and 2007, respectively, were approximately $3.0 million, $2.9 million and $2.9 million. The Operating Partnership believes these amounts equal market rates for such rental space. |
Commitments and Contingencies
Commitments and Contingencies | |
12 Months Ended
Dec. 31, 2009 | |
Commitments and Contingencies | 18. 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 December31, 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 year ended December31, 2009, the Operating Partnership recorded additional reserves of approximately $3.3 million (primarily related to an insurance settlement), paid approximately $4.7 million in claims and released approximately $2.2 million of remaining reserves for settled claims. As a result, the Operating Partnership had total reserves of approximately $6.7 million at December31, 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 December31, 2009, the Operating Partnership has four projects totaling 1,700 units in various stages of |
Impairment and Other Expenses
Impairment and Other Expenses | |
12 Months Ended
Dec. 31, 2009 | |
Impairment and Other Expenses | 19. Impairment and Other Expenses During the year ended December31, 2009, the Operating Partnership recorded an approximate $11.1 million non-cash asset impairment charge on a parcel of land held for development. During the year ended December31, 2008, the Operating Partnership recorded approximately $116.4 million of non-cash asset impairment charges on land held for development related to five potential development projects that will no longer be pursued. These charges were the result of an analysis of each parcels estimated fair value (determined using internally developed models based on market assumptions and comparable sales data) compared to its current capitalized carrying value and managements decision to reduce the number of planned development projects the Operating Partnership will undertake. During the years ended December31, 2009, 2008 and 2007, the Operating Partnership incurred charges of $6.5 million, $5.8 million and $1.8 million, respectively, related to the write-off of various pursuit and out-of-pocket costs for terminated acquisition, disposition (including halted condominium conversions) and development transactions and related to transaction closing costs, such as survey, title and legal fees, on the acquisition of operating properties and are included in other expenses on the Consolidated Statements of Operations. |
Reportable Segments
Reportable Segments | |
12 Months Ended
Dec. 31, 2009 | |
Reportable Segments | 20. 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 three years ended December31, 2009, 2008, or 2007. The primary financial measure for the Operating Partnerships rental real estate properties 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 years ended December31, 2009, 2008 and 2007, respectively, as well as total assets for the years ended December31, 2009 and 2008, respectively (amounts in thousands): Year Ended December31, 2009 Northeast Northwest Southeast Southwest Other (3) Total Rental income: Same store (1) $ 544,166 $ 358,718 $ 395,014 $ 427,876 $ - $ 1,725,774 Non-same store/other (2)(3) 63,663 18,031 13,473 26,394 86,030 207,591 Total rental income 607,829 376,749 408,487 454,270 86,030 1,933,365 Operating expenses: Same store (1) 203,06 |
Other
Other | |
12 Months Ended
Dec. 31, 2009 | |
Subsequent Events/Other | 21. Subsequent Events/Other Subsequent Events Subsequent to December31, 2009 and up until the time of this filing, the Operating Partnership: Acquired five apartment properties consisting of 1,174 units for $495.6 million; Sold four consolidated apartment properties consisting of 1,025 units for $94.9 million (excluding condominium units) and one unconsolidated apartment property consisting of 268 units for $13.4 million (sales price listed is the gross sales price); Assumed $10.4 million of mortgage debt in conjunction with the acquisition of one property; Was released from $40.0 million of mortgage debt assumed by the purchaser on two disposed properties; Repaid $24.2 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; EQR repurchased and retired 58,130 of its Common Shares at an average price of $32.46 per share for total consideration of $1.9 million from employees to cover the minimum statutory tax withholding obligations related to the vesting of employees restricted shares. Concurrent with these transactions, the Operating Partnership repurchased and retired 58,130 OP Units previously issued to EQR; and Issued 1.1million Common Shares at an average price of $33.87 per share for total consideration of $35.8 million under EQRs ATM share offering program. Other During the years ended December31, 2008 and 2007, the Operating Partnership recognized $0.7 million and $0.3 million, respectively, of forfeited deposits for various terminated transactions, which are included in interest and other income. In addition, during 2009, 2008 and 2007, the Operating Partnership received $0.2 million, $1.7 million and $4.1 million, respectively, for the settlement of litigation/insurance claims, which are included in interest and other income in the accompanying consolidated statements of operations. During the years ended December31, 2009, 2008 and 2007, in addition to the amounts discussed below for EQRs former Chief Financial Officer (CFO) and one other former EQR executive vice president, the Operating Partnership recorded approximately $1.4 million, $4.3 million and $0.5 million of additional general and administrative expense, respectively, and $1.6 million, $0.8 million and $1.6 million of additional property management expense, respectively, related primarily to cash severance for various employees. During the year ended December31, 2007, the Operating Partnership entered into resignation/release agreements with EQRs former CFO and one other former EQR executive vice president. The Operating Partnership recorded approximately $3.4 million of additional general and administrative expense during the year ended December31, 2007 related to cash severance and accelerated vesting of share options and restricted/performance shares. The Operating Partnership recorded a reduction to general and administrative expense of approximately $1.7 million during the year ended December31, 2007 due to the successful resolution of a |
Quarterly Financial Data
Quarterly Financial Data (Unaudited) | |
12 Months Ended
Dec. 31, 2009 | |
Quarterly Financial Data (Unaudited) | 22. Quarterly Financial Data (Unaudited) The following unaudited quarterly data has been prepared on the basis of a December31 year-end. All amounts have also been restated in accordance with the guidance on discontinued operations, noncontrolling interests and convertible debt, and reflect dispositions and/or properties held for sale through December31, 2009. Amounts are in thousands, except for per Unit amounts. 2009 First Quarter 3/31 Second Quarter 6/30 Third Quarter 9/30 Fourth Quarter 12/31 Total revenues (1) $ 488,238 $ 485,954 $ 486,532 $ 482,987 Operating income (1) 134,320 129,002 130,798 135,270 Income (loss) from continuing operations (1) 14,023 14,397 11,012 (11,401 ) Discontinued operations, net (1) 71,398 91,535 132,353 58,712 Net income * 85,421 105,932 143,365 47,311 Net income available to Units 81,866 102,314 140,061 43,858 Earnings per Unit basic: Net income available to Units $ 0.28 $ 0.35 $ 0.48 $ 0.15 Weighted average Units outstanding 288,710 288,990 289,262 289,693 Earnings per Unit diluted: Net income available to Units $ 0.28 $ 0.35 $ 0.48 $ 0.15 Weighted average Units outstanding 288,853 289,338 290,215 289,693 (1) The amounts presented for the first three quarters of 2009 are not equal to the same amounts previously reported in the respective Form 10-Qs filed with the SEC for each period as a result of changes in discontinued operations due to additional property sales which occurred throughout 2009. Below is a reconciliation to the amounts previously reported: 2009 First Quarter 3/31 Second Quarter 6/30 Third Quarter 9/30 Total revenues previously reported in Form 10-Q $ 515,144 $ 505,150 $ 492,757 Total revenues subsequently reclassified to discontinued operations (26,906 ) (19,196 ) (6,225 ) Total revenues disclosed in Form 10-K $ 488,238 $ 485,954 $ 486,532 Operating income previously reported in Form 10-Q $ 144,181 $ 135,962 $ 133,096 Operating income subsequently reclassified to discontinued operations (9,861 ) (6,960 ) (2,298 ) Operating income disclosed in Form 10-K $ 134,320 $ 129,002 $ 130,798 Income from continuing operations previously reported in Form 10-Q $ 23,487 $ 21,158 $ 12,824 Income from continuing operations subsequently reclassified to discontinued operations (9,464 ) (6,761 ) (1,812 ) Income from continuing operations disclosed in Form 10-K |
Schedule III - Real Estate and
Schedule III - Real Estate and Accumulated Depreciation | |
12 Months Ended
Dec. 31, 2009 | |
Schedule III - Real Estate and Accumulated Depreciation | ERP OPERATING LIMITED PARTNERSHIP Schedule III - Real Estate and Accumulated Depreciation Overall Summary December31, 2009 Properties (H) Units(H) InvestmentinReal Estate, Gross Accumulated Depreciation InvestmentinReal Estate, Net Encumbrances Wholly Owned Unencumbered 281 76,487 $ 11,112,317,728 $ (2,477,548,347 ) $ 8,634,769,381 $ - Wholly Owned Encumbered 151 42,309 5,903,435,223 (1,272,390,073 ) 4,631,045,150 2,441,648,706 Portfolio/Entity Encumbrances (1) - - - - - 1,404,327,000 Wholly Owned Properties 432 118,796 17,015,752,951 (3,749,938,420 ) 13,265,814,531 3,845,975,706 Partially Owned Unencumbered - - 125,900,815 (740,000 ) 125,160,815 - Partially Owned Encumbered 27 5,530 1,323,490,147 (126,885,454 ) 1,196,604,693 937,470,654 Partially Owned Properties 27 5,530 1,449,390,962 (127,625,454 ) 1,321,765,508 937,470,654 Total Unencumbered Properties 281 76,487 11,238,218,543 (2,478,288,347 ) 8,759,930,196 - Total Encumbered Properties 178 47,839 7,226,925,370 (1,399,275,527 ) 5,827,649,843 4,783,446,360 TotalConsolidatedInvestmentinRealEstate 459 124,326 $ 18,465,143,913 $ (3,877,563,874 ) $ 14,587,580,039 $ 4,783,446,360 (1) See attached Encumbrances Reconciliation. ERP OPERATING LIMITED PARTNERSHIP Schedule III - Real Estate and Accumulated Depreciation Encumbrances Reconciliation December31, 2009 Portfolio/Entity Encumbrances Number of Properties Encumberedby SeeProperties With Note: Amount EQR-Bond Partnership 10 I $ 88,189,000 EQR-Fanwell 2007 LP 7 J 223,138,000 EQR-Wellfan 2008 LP (R) 15 K 550,000,000 EQR-SOMBRA 2008 LP 19 L 543,000,000 Portfolio/Entity Encumbrances 51 1,404,327,000 IndividualPropertyEncumbrances 3,379,119,360 TotalEncumbrancesperFinancialStatements $ 4,783,446,360 ERP OPERATING LIMITED PARTNERSHIP Schedule III - Real Estate and Accumulated Depreciation (Amounts in thousands) The changes in total real estate for the years ended December31, 2009, 2008 and 2007 are as follows: 2009 2008 2007 Balance, beginning of year $ 18,690,239 $ 18,333,350 $ 17,235,175 Acquisitions and development 512,977 995,026 2,456,495 Improvements 125,965 172,165 260,371 Dispositions and other (864,037 ) (810,302 ) (1,618,691 ) Balance, end of year $ 18,465,144 $ 18,690,239 $ 18,333,350 The changes in accumulated depreciation for the years ended December31, 2009, 2008, and 2007 are as |
Document Information
Document Information | |
12 Months Ended
Dec. 31, 2009 | |
Document Type | 10-K |
Amendment Flag | false |
Document Period End Date | 2009-12-31 |
Entity Information
Entity Information (USD $) | |||
12 Months Ended
Dec. 31, 2009 | Feb. 17, 2010
| Oct. 30, 2009
| |
Entity Registrant Name | ERP OPERATING LTD PARTNERSHIP | ||
Entity Central Index Key | 0000931182 | ||
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 | 0 | ||
Entity Public Float | $0 |