Exhibit 99.1
Equity Residential Reports Second Quarter Results
CHICAGO--(BUSINESS WIRE)--July 27, 2005--Equity Residential
(NYSE:EQR) today reported results for the quarter and six months ended
June 30, 2005. All per share results are reported on a fully diluted
basis.
"Business continues to strengthen and the table is set for a
strong second half of 2005 and a very good 2006," said Bruce W.
Duncan, Equity Residential's CEO.
Second Quarter 2005
For the quarter ended June 30, 2005, the company reported earnings
of $0.44 per share compared to $0.39 per share in the second quarter
of 2004. The quarterly increase is primarily attributable to $0.10 per
share in higher gains on property and condominium sales, partially
offset by $0.03 per share of higher interest expense and $0.01 per
share of higher compensation expense related to the previously
announced planned retirement of Bruce W. Duncan.
Funds from Operations (FFO) for both the quarters ended June 30,
2005 and 2004 were $0.56 per share.
Total revenues from continuing operations for the quarter were
$499.5 million compared to $460.2 million in the second quarter of
2004. The primary components of this $39.3 million increase in
revenues include the properties acquired since July 1, 2004 as well as
an approximate $13.3 million increase in second quarter "same-store"
revenues.
Six Months Ended June 30, 2005
For the six months ended June 30, 2005, the company reported
earnings of $1.19 per share compared to $0.74 per share in the same
period of 2004.
FFO for the six months ended June 30, 2005 were $1.30 per share
compared to $1.08 per share in the same period of 2004.
Total revenues from continuing operations for the six months ended
June 30, 2005 were $981.4 million compared to $892.2 million in the
same period of 2004.
"Same-Store" Results
On a "same-store" second quarter to second quarter comparison,
which includes 168,385 units, revenues increased 3.0 percent, expenses
increased 4.9 percent and net operating income (NOI) increased 1.8
percent. On a sequential "same-store" comparison for these same
168,385 units from first quarter 2005 to second quarter 2005, revenues
increased 1.9 percent, expenses increased 1.4 percent and NOI
increased 2.3 percent.
On a "same-store" six-month to six-month comparison, which
includes 162,598 units, revenues increased 2.7 percent, expenses
increased 4.8 percent and NOI increased 1.3 percent.
Acquisitions/Dispositions
During the second quarter of 2005, the company acquired 11
properties, consisting of 2,642 units, for an aggregate purchase price
of $445.6 million at an average capitalization (cap) rate of 5.6
percent and one land parcel for $15.0 million.
Also during the quarter, the company sold 14 properties,
consisting of 3,320 units, for an aggregate sale price of $218.7
million at an average cap rate of 5.9 percent. In addition, the
company sold 434 condominium units for $106.4 million.
In the first six months of 2005, the company acquired 20
properties, consisting of 4,874 units, for an aggregate purchase price
of $729.8 million at an average cap rate of 5.6 percent and two land
parcels for $45.3 million. Also during the first six months of 2005,
the company sold 24 properties, consisting of 5,994 units, for an
aggregate sale price of $644.0 million at an average cap rate of 4.9
percent. In addition, the company sold 772 condominium units and two
land parcels for $198.3 million and $36.3 million, respectively.
Third Quarter 2005 Results
Equity Residential expects to announce third quarter 2005 results
on Tuesday, November 1, 2005 and host a conference call to discuss
those results at 10:00 a.m. CT that day.
Equity Residential, an S&P 500 company, is the largest publicly
traded apartment company in America. Nationwide, Equity Residential
owns or has investments in 933 properties in 32 states and the
District of Columbia consisting of 198,240 units. For more information
on Equity Residential, please visit our website at
www.equityresidential.com.
Forward-Looking Statements
The company lists parameters for 2005 results in the final page of
this release. 2005 results will depend upon a slowdown in multifamily
starts and economic recovery and job growth. The forward-looking
statements contained in this news release regarding 2005 results are
further subject to certain risks and uncertainties including, without
limitation, the risks described under the heading "Risk Factors" in
our Annual Report on Form 10-K filed with the Securities and Exchange
Commission (SEC) and available on our website,
www.equityresidential.com. This news release also contains
forward-looking statements concerning development properties. The
total number of units and cost of development and completion dates
reflect the company's best estimates and are subject to uncertainties
arising from changing economic conditions (such as costs of labor and
construction materials), completion and local government regulation.
The company assumes no obligation to update or supplement
forward-looking statements that become untrue because of subsequent
events.
A live web cast of the company's conference call discussing these
results and outlook for 2005 will take place today at 10:00 a.m.
Central. Please visit the Investor Information section of the
company's web site at www.equityresidential.com for the link. A replay
of the web cast will be available for two weeks at this site.
EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands except per share data)
(Unaudited)
Six Months Ended Quarter Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
REVENUES
Rental income $975,593 $885,339 $496,249 $456,489
Fee and asset management 5,826 6,860 3,254 3,703
--------- --------- --------- ---------
Total revenues 981,419 892,199 499,503 460,192
--------- --------- --------- ---------
EXPENSES
Property and maintenance 273,341 240,866 139,646 124,728
Real estate taxes and
insurance 105,589 99,538 52,822 50,612
Property management 41,457 38,294 20,482 20,517
Fee and asset management 4,930 4,383 2,411 2,333
Depreciation 254,450 223,927 128,957 115,876
General and administrative 31,271 22,546 14,211 12,876
--------- --------- --------- ---------
Total expenses 711,038 629,554 358,529 326,942
--------- --------- --------- ---------
Operating income 270,381 262,645 140,974 133,250
Interest and other income 62,625 4,159 3,151 2,512
Interest:
Expense incurred, net (184,322) (161,224) (94,627) (82,893)
Amortization of
deferred financing
costs (3,294) (2,872) (1,597) (1,586)
--------- --------- --------- ---------
Income before allocation to
Minority Interests, loss from
investments in unconsolidated
entities, net gain on sales
of unconsolidated entities
and discontinued operations 145,390 102,708 47,901 51,283
Allocation to Minority
Interests:
Operating Partnership (24,982) (15,738) (9,357) (8,098)
Preference Interests (5,272) (10,106) (1,388) (5,053)
Junior Preference Units (7) (62) (3) (31)
Partially Owned Properties 2,296 296 819 443
Premium on redemption of
Preference Interests (4,112) - (2,384) -
Loss from investments in
unconsolidated entities (215) (7,797) (157) (391)
Net gain on sales of
unconsolidated entities 124 4,405 - 1,971
--------- --------- --------- ---------
Income from continuing
operations 113,222 73,706 35,431 40,124
Net gain on sales of
discontinued operations 259,824 149,259 108,559 77,760
Discontinued operations, net (4,663) 11,222 (2,646) 4,322
--------- --------- --------- ---------
Net income 368,383 234,187 141,344 122,206
Preferred distributions (26,043) (27,325) (13,018) (13,653)
--------- --------- --------- ---------
Net income available to Common
Shares $342,340 $206,862 $128,326 $108,553
========= ========= ========= =========
Earnings per share - basic:
Income from continuing
operations available to Common
Shares $0.37 $0.21 $0.10 $0.12
========= ========= ========= =========
Net income available to Common
Shares $1.20 $0.74 $0.45 $0.39
========= ========= ========= =========
Weighted average Common Shares
outstanding 284,899 278,224 285,283 278,949
========= ========= ========= =========
Earnings per share - diluted:
Income from continuing
operations available to Common
Shares $0.36 $0.21 $0.10 $0.11
========= ========= ========= =========
Net income available to Common
Shares $1.19 $0.74 $0.44 $0.39
========= ========= ========= =========
Weighted average Common Shares
outstanding 309,362 302,017 309,979 302,201
========= ========= ========= =========
Distributions declared per
Common Share outstanding $0.8650 $0.8650 $0.4325 $0.4325
========= ========= ========= =========
EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS
(Amounts in thousands except per share data)
(Unaudited)
Six Months Ended Quarter Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net income $368,383 $234,187 $141,344 $122,206
Allocation to Minority
Interests - Operating
Partnership 24,982 15,738 9,357 8,098
Adjustments:
Depreciation 254,450 223,927 128,957 115,876
Depreciation - Non-real
estate additions (2,685) (2,717) (1,391) (1,417)
Depreciation - Partially
Owned Properties (2,685) (4,171) (1,362) (2,075)
Depreciation -
Unconsolidated Properties 2,047 7,879 975 1,116
Net (gain) on sales of
unconsolidated entities (124) (4,405) - (1,971)
Discontinued operations:
Depreciation 4,818 17,834 1,243 8,700
Net (gain) on sales
of discontinued
operations (259,824) (149,259) (108,559) (77,760)
Net incremental gain
on sales of
condominium units 29,619 8,470 15,944 4,946
Net gain on sales of
vacant land 10,366 5,536 (2) 5,521
--------- --------- --------- ---------
FFO (1)(2) 429,347 353,019 186,506 183,240
Preferred distributions (26,043) (27,325) (13,018) (13,653)
--------- --------- --------- ---------
FFO available to Common
Shares and OP Units - basic $403,304 $325,694 $173,488 $169,587
========= ========= ========= =========
FFO available to Common
Shares and OP Units -
diluted $403,962 $327,672 $173,809 $170,572
========= ========= ========= =========
FFO per share and OP Unit -
basic $1.32 $1.09 $0.57 $0.57
========= ========= ========= =========
FFO per share and OP Unit -
diluted $1.30 $1.08 $0.56 $0.56
========= ========= ========= =========
Weighted average Common
Shares and
OP Units outstanding -
basic 305,793 299,438 306,190 299,847
========= ========= ========= =========
Weighted average Common
Shares and
OP Units outstanding -
diluted 310,209 304,557 310,808 304,733
========= ========= ========= =========
(1) The National Association of Real Estate Investment Trusts
("NAREIT") defines funds from operations ("FFO") (April 2002 White
Paper) as net income (computed in accordance with accounting
principles generally accepted in the United States ("GAAP")),
excluding gains (or losses) from sales of depreciable property,
plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures will be calculated
to reflect funds from operations on the same basis. The April 2002
White Paper states that gain or loss on sales of property is
excluded from FFO for previously depreciated operating properties
only. Once the Company commences the conversion of units to
condominiums, it simultaneously discontinues depreciation of such
property.
(2) The Company believes that FFO is helpful to investors as a
supplemental measure of the operating performance of a real estate
company, because it is a recognized measure of performance by the
real estate industry and by excluding gains or losses related to
dispositions of depreciable property and excluding real estate
depreciation (which can vary among owners of identical assets in
similar condition based on historical cost accounting and useful
life estimates), FFO can help compare the operating performance of
a company's real estate between periods or as compared to
different companies. FFO in and of itself does not represent net
income or net cash flows from operating activities in accordance
with GAAP. Therefore, FFO should not be exclusively considered as
an alternative to net income or to net cash flows from operating
activities as determined by GAAP or as a measure of liquidity. The
Company's calculation of FFO may differ from other real estate
companies due to, among other items, variations in cost
capitalization policies for capital expenditures and, accordingly,
may not be comparable to such other real estate companies.
EQUITY RESIDENTIAL
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except for share amounts)
(Unaudited)
June 30, December 31,
2005 2004
------------ ------------
ASSETS
Investment in real estate
Land $2,222,255 $2,183,818
Depreciable property 12,565,622 12,350,900
Construction in progress (including land) 403,068 317,903
------------ ------------
Investment in real estate 15,190,945 14,852,621
Accumulated depreciation (2,765,550) (2,599,827)
------------ ------------
Investment in real estate, net 12,425,395 12,252,794
Cash and cash equivalents 102,752 83,505
Investments in unconsolidated entities 10,658 11,461
Rents receivable 942 1,681
Deposits - restricted 172,106 82,194
Escrow deposits - mortgage 34,586 35,800
Deferred financing costs, net 38,242 34,986
Goodwill, net 30,000 30,000
Other assets 93,355 112,854
------------ ------------
Total assets $12,908,036 $12,645,275
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $3,203,644 $3,166,739
Notes, net 3,021,015 3,143,067
Line of credit 428,000 150,000
Accounts payable and accrued expenses 104,751 87,422
Accrued interest payable 71,251 70,411
Rents received in advance and other
liabilities 272,284 227,588
Security deposits 49,995 49,501
Distributions payable 143,296 142,437
------------ ------------
Total liabilities 7,294,236 7,037,165
------------ ------------
Commitments and contingencies
Minority Interests:
Operating Partnership 333,545 319,841
Preference Interests 60,000 206,000
Junior Preference Units 184 184
Partially Owned Properties 7,189 9,557
------------ ------------
Total Minority Interests 400,918 535,582
------------ ------------
Shareholders' equity:
Preferred Shares of beneficial interest,
$0.01 par value; 100,000,000 shares
authorized; 3,975,730 shares issued
and outstanding as of June 30, 2005
and 4,108,658 shares issued and
outstanding as of December 31, 2004 632,893 636,216
Common Shares of beneficial interest,
$0.01 par value; 1,000,000,000 shares
authorized; 287,144,333 shares issued
and outstanding as of June 30, 2005
and 285,076,915 shares issued and
outstanding as of December 31, 2004 2,871 2,851
Paid in capital 5,172,247 5,112,311
Deferred compensation - (18)
Distributions in excess of accumulated
earnings (563,253) (657,462)
Accumulated other comprehensive loss (31,876) (21,370)
------------ ------------
Total shareholders' equity 5,212,882 5,072,528
------------ ------------
Total liabilities and shareholders'
equity $12,908,036 $12,645,275
============ ============
June YTD 2005 vs. June YTD 2004
YTD over YTD Same-Store Results
$ in Millions - 162,598 Same-Store Units
Description Revenues Expenses NOI (1)
----------- ------------ -------- ---------
YTD 2005 $849.2 $348.0 $501.2
YTD 2004 $826.9 $332.0 $494.9
------------ -------- ---------
Change $22.3 $16.0 $6.3
============ ======== =========
Change 2.7% 4.8% 1.3%
Second Quarter 2005 vs. Second Quarter 2004
Quarter over Quarter Same-Store Results
$ in Millions - 168,385 Same-Store Units
Description Revenues Expenses NOI (1)
----------- ------------ -------- ---------
Q2 2005 $448.8 $182.6 $266.2
Q2 2004 $435.5 $174.2 $261.3
------------ -------- ---------
Change $13.3 $8.4 $4.9
============ ======== =========
Change 3.0% 4.9% 1.8%
Second Quarter 2005 vs. First Quarter 2005
Sequential Quarter over Quarter Same-Store Results
$ in Millions - 168,385 Same-Store Units(a)
Description Revenues Expenses NOI (1)
----------- ------------ -------- ---------
Q2 2005 $448.8 $182.6 $266.2
Q1 2005 $440.3 $180.2 $260.1
------------ -------- ---------
Change $8.5 $2.4 $6.1
============ ======== =========
Change 1.9% 1.4% 2.3%
(a) Includes the same units as the Second Quarter 2005 vs. Second
Quarter 2004 Same Store results for comparability purposes.
Same-Store Occupancy Statistics
YTD 2005 93.8% Q2 2005 94.1% Q2 2005 94.1%
YTD 2004 93.3% Q2 2004 93.7% Q1 2005 93.4%
--------- --------- ---------
Change 0.5% Change 0.4% Change 0.7%
(1) The Company's primary financial measure for evaluating each of its
apartment communities is net operating income ("NOI"). NOI
represents rental income less property and maintenance expense,
real estate tax and insurance expense, and property management
expense. The Company believes that NOI is helpful to investors as
a supplemental measure of the operating performance of a real
estate company because it is a direct measure of the actual
operating results of the Company's apartment communities.
Same Store NOI Reconciliation
June YTD 2005 vs. June YTD 2004
The following table provides a reconciliation of operating income per
the consolidated statements of operations to NOI for the Six-Month
2005 Same Store Properties:
Six Months Ended
June 30,
---------------------
2005 2004
---------- ----------
(Amounts in millions)
Operating income $270.4 $262.6
Adjustments:
Non-same store operating results (54.1) (11.6)
Fee and asset management revenue (5.8) (6.9)
Fee and asset management expense 4.9 4.4
Depreciation 254.5 223.9
General and administrative 31.3 22.5
---------- ----------
Same store NOI $501.2 $494.9
========== ==========
Same Store NOI Reconciliation
Second Quarter 2005 vs. Second Quarter 2004
The following table presents a reconciliation of operating income per
the consolidated statements of operations to NOI for the Second
Quarter 2005 Same Store Properties:
Quarter Ended
June 30,
---------------------
2005 2004
---------- ----------
(Amounts in millions)
Operating income $141.0 $133.3
Adjustments:
Non-same store operating results (17.1) 0.6
Fee and asset management revenue (3.3) (3.7)
Fee and asset management expense 2.4 2.3
Depreciation 129.0 115.9
General and administrative 14.2 12.9
---------- ----------
Same store NOI $266.2 $261.3
========== ==========
June YTD 2005 vs. June YTD 2004
Same-Store Results by Market
-----------------------------
Increase (Decrease) from
Prior Year
-------------------------------------------------------------------
June
June YTD 05
YTD 05 Weighted
% of Average
Actual Occupancy Rev- Exp-
Markets Units NOI % enues enses NOI Occupancy
-------------------------------------------------------------------
1 Boston 6,015 7.1% 93.3% (2.0%) 7.4% (7.1%) (1.3%)
2 South Florida 9,714 6.8% 95.6% 6.8% 4.8% 8.1% 1.3%
3 San Francisco
Bay Area 5,990 5.9% 95.4% 1.8% 5.1% 0.1% 0.4%
4 Los Angeles 4,781 5.5% 95.2% 4.0% 6.8% 2.7% 0.5%
5 Phoenix 8,988 4.7% 94.1% 6.9% 6.0% 7.4% 3.4%
6 Atlanta 9,394 4.3% 94.1% 0.4% 2.5% (1.2%) 0.5%
7 DC Suburban
Virginia 4,078 4.2% 94.8% 7.6% 0.7% 11.2% (0.1%)
8 Dallas/Ft
Worth 9,245 4.1% 94.8% 0.6% 3.7% (2.3%) 1.1%
9 San Diego 3,766 4.1% 94.7% 4.3% 8.0% 2.5% 0.1%
10 New England
(excl Boston) 6,210 3.9% 93.5% (0.0%) 7.8% (5.7%) (1.8%)
11 Denver 6,503 3.6% 94.2% (0.9%) 5.0% (4.0%) 1.3%
12 Seattle/Tacoma 6,290 3.6% 95.4% 4.1% 4.3% 4.0% 1.7%
13 DC Suburban
Maryland 5,309 3.6% 93.4% 2.4% 7.1% (0.3%) (0.6%)
14 New York Metro
Area 2,574 3.3% 95.3% 5.1% 4.7% 5.4% 1.0%
15 Inland Empire,
CA 3,504 3.2% 94.2% 5.1% 10.3% 2.7% (1.6%)
16 Orange Co 3,013 3.2% 95.0% 4.4% 8.5% 2.5% 0.1%
17 Orlando 5,382 3.1% 95.6% 9.3% 4.9% 12.2% 1.9%
18 Houston 5,282 2.3% 91.3% (3.2%) 3.8% (9.7%) 0.5%
19 Portland 4,374 2.3% 94.2% 5.9% 3.1% 8.1% (0.1%)
20 Jacksonville 3,917 2.1% 94.4% 5.7% 2.1% 8.1% 2.4%
-----------------------------------------------------
Top 20 Markets 114,329 80.5% 94.4% 3.1% 5.3% 1.7% 0.7%
All Other
Markets 48,269 19.5% 92.3% 1.4% 3.5% (0.4%) (0.1%)
-----------------------------------------------------
Total 162,598 100.0% 93.8% 2.7% 4.8% 1.3% 0.5%
=====================================================
Second Quarter 2005 vs. Second Quarter 2004
Same-Store Results by Market
-----------------------------
Increase (Decrease) from
Prior Quarter
-------------------------------------------------------------------
2Q 2005
2Q 2005 Weighted
% of Average
Actual Occupancy Rev- Exp-
Markets Units NOI % enues enses NOI Occupancy
-------------------------------------------------------------------
1 South Florida 10,534 7.1% 95.3% 6.8% 4.3% 8.7% 1.2%
2 Boston 6,151 7.1% 93.9% (0.8%) 4.6% (3.7%) (1.6%)
3 Los Angeles 5,470 5.9% 95.3% 4.5% 5.0% 4.3% 1.1%
4 San Francisco
Bay Area 5,990 5.7% 95.5% 1.8% 4.1% 0.6% 0.0%
5 DC Suburban
Virginia 4,956 5.0% 96.1% 7.5% 3.2% 9.5% 0.2%
6 Atlanta 10,622 4.8% 94.2% 0.2% 3.3% (2.1%) 0.3%
7 Phoenix 8,988 4.5% 93.8% 8.3% 5.6% 10.3% 3.3%
8 Seattle/Tacoma 6,818 4.1% 95.9% 5.3% 2.8% 7.0% 1.7%
9 San Diego 3,766 3.9% 95.0% 3.9% 7.7% 2.1% (0.2%)
10 Dallas/Ft
Worth 9,245 3.8% 94.9% 0.4% 4.7% (3.7%) 0.4%
11 New England
(excl Boston) 6,210 3.8% 93.7% (0.5%) 8.3% (6.4%) (2.2%)
12 Denver 6,947 3.6% 94.8% 0.9% 4.5% (1.1%) 1.5%
13 DC Suburban
Maryland 5,309 3.4% 94.0% 2.9% 8.3% (0.2%) (0.2%)
14 New York Metro
Area 2,756 3.4% 96.0% 5.4% 4.5% 6.0% 0.7%
15 Inland Empire,
CA 3,504 3.1% 94.7% 5.3% 11.3% 2.7% (1.2%)
16 Orange Co 3,013 3.0% 95.2% 3.3% 8.5% 1.1% (0.6%)
17 Orlando 5,382 2.9% 95.9% 9.0% 6.9% 10.3% 1.5%
18 Portland 4,374 2.2% 94.3% 5.7% 2.9% 8.0% (0.9%)
19 Houston 5,282 2.1% 91.9% (2.9%) 5.4%(10.7%) 0.9%
20 Jacksonville 3,917 2.0% 95.0% 6.8% 4.2% 8.6% 2.6%
-----------------------------------------------------
Top 20 Markets 119,234 81.2% 94.7% 3.4% 5.2% 2.3% 0.6%
All Other
Markets 49,151 18.8% 92.8% 1.7% 3.9% (0.3%) 0.1%
-----------------------------------------------------
Total 168,385 100.0% 94.1% 3.0% 4.9% 1.8% 0.4%
=====================================================
Second Quarter 2005 vs. First Quarter 2005(a)
Sequential Same-Store Results by Market
-----------------------------
Increase (Decrease) from
Prior Quarter
-------------------------------------------------------------------
2Q 2005
2Q 2005 Weighted
% of Average
Actual Occupancy Rev- Exp-
Markets Units NOI % enues enses NOI Occupancy
-------------------------------------------------------------------
1 South Florida 10,534 7.1% 95.3% 1.4% 2.4% 0.7% (0.7%)
2 Boston 6,151 7.1% 93.9% 2.9%(6.8%) 9.5% 1.4%
3 Los Angeles 5,470 5.9% 95.3% 2.2%(0.1%) 3.4% 0.8%
4 San Francisco
Bay Area 5,990 5.7% 95.5% 1.5%(0.6%) 2.6% 0.4%
5 DC Suburban
Virginia 4,956 5.0% 96.1% 4.3% 2.0% 5.4% 2.4%
6 Atlanta 10,622 4.8% 94.2% 0.8% 0.2% 1.2% 0.0%
7 Phoenix 8,988 4.5% 93.8% 1.4% 1.4% 1.3% (0.5%)
8 Seattle/Tacoma 6,818 4.1% 95.9% 2.9%(0.1%) 5.0% 0.9%
9 San Diego 3,766 3.9% 95.0% 1.5% 2.6% 1.0% 0.5%
10 Dallas/Ft
Worth 9,245 3.8% 94.9% 0.4% 4.4% (3.2%) 0.1%
11 New England
(excl Boston) 6,210 3.8% 93.7% 1.8%(4.6%) 7.4% 0.4%
12 Denver 6,947 3.6% 94.8% 1.5% 3.7% 0.3% 1.2%
13 DC Suburban
Maryland 5,309 3.4% 94.0% 2.9% 2.9% 2.9% 1.2%
14 New York Metro
Area 2,756 3.4% 96.0% 3.5%(0.0%) 5.7% 1.6%
15 Inland Empire,
CA 3,504 3.1% 94.7% 3.4% 0.3% 4.8% 1.0%
16 Orange Co 3,013 3.0% 95.2% 1.8% 0.3% 2.5% 0.3%
17 Orlando 5,382 2.9% 95.9% 2.5% 5.0% 0.9% 0.4%
18 Portland 4,374 2.2% 94.3% 2.0% 1.9% 2.1% 0.2%
19 Houston 5,282 2.1% 91.9% 0.5% 5.2% (4.3%) 1.1%
20 Jacksonville 3,917 2.0% 95.0% 3.9% 5.4% 3.0% 1.2%
-----------------------------------------------------
Top 20 Markets 119,234 81.2% 94.7% 2.1% 0.8% 2.9% 0.5%
All Other
Markets 49,151 18.8% 92.8% 1.5% 3.2% 0.1% 1.1%
-----------------------------------------------------
Total 168,385 100.0% 94.1% 1.9% 1.4% 2.3% 0.7%
=====================================================
(a) Includes the same units as the Second Quarter 2005 vs. Second
Quarter 2004 Same Store results for comparability purposes.
Portfolio as of June 30, 2005
Properties Units
----------- -------
Wholly Owned Properties 837 175,498
Partially Owned Properties
(Consolidated) 39 6,805
Unconsolidated Properties 57 16,117
---------- --------
933 198,420
Portfolio Rollforward 2005
$ Cap
Properties Units Millions Rate
----------- ------- --------- -----
12/31/2004 939 200,149
Acquisitions:
Rental Properties 20 4,874 $729.8 5.6%
Land Parcels - - $45.3
Dispositions:
Rental Properties (1) (24) (5,994) $(644.0) 4.9%
Condominium Units (3) (772) $(198.3)
Land Parcels - - $(36.3)
Completed Developments 1 141
Unit Configuration Changes - 22
---------- -------
6/30/2005 933 198,420
Portfolio Rollforward Q2 2005
$ Cap
Properties Units Millions Rate
---------- ------- --------- -----
3/31/2005 939 199,510
Acquisitions:
Rental Properties 11 2,642 $445.6 5.6%
Land Parcels - - $15.0
Dispositions:
Rental Properties (14) (3,320) $218.7 5.9%
Condominium Units (3) (434) $106.4
Unit Configuration Changes - 22
---------- -------
6/30/2005 933 198,420
(1) Cap rate was 6.1% excluding the sale of Water Terrace.
Portfolio Summary
As of June 30, 2005
% of 2005
% of NOI
Market Properties Units Units Budget
Boston 35 6,692 3.4% 6.0%
DC Northern Virginia 17 5,578 2.8% 4.9%
New York Metro Area 14 3,812 1.9% 4.5%
New England (excluding Boston) 45 6,118 3.1% 3.6%
DC Suburban Maryland 26 5,617 2.8% 3.3%
---------------------------------------
Atlantic Region 137 27,817 14.0% 22.4%
South Florida 49 11,052 5.6% 6.5%
Orlando 32 6,898 3.5% 3.6%
North Florida 49 7,411 3.7% 3.0%
Tampa/Ft Myers 27 4,694 2.4% 1.7%
---------------------------------------
Florida Region 157 30,055 15.1% 14.7%
Raleigh/Durham 16 4,100 2.1% 1.4%
Charlotte 11 3,391 1.7% 1.0%
---------------------------------------
Carolina Region 27 7,491 3.8% 2.4%
Atlanta 62 13,014 6.6% 5.1%
Birmingham 1 240 0.1% 0.0%
---------------------------------------
Georgia Region 63 13,254 6.7% 5.2%
Minneapolis/St Paul 18 3,982 2.0% 1.9%
Chicago 9 3,241 1.6% 1.6%
Southeastern Michigan 21 2,845 1.4% 1.2%
Nashville 11 2,729 1.4% 1.0%
Columbus 31 3,415 1.7% 0.8%
Indianapolis 29 3,056 1.5% 0.7%
Northern Ohio 25 2,692 1.4% 0.7%
Southern Ohio 20 1,634 0.8% 0.4%
Milwaukee 3 686 0.3% 0.4%
Lexington 7 656 0.3% 0.2%
Louisville 8 608 0.3% 0.1%
St Louis 1 192 0.1% 0.0%
---------------------------------------
Midwest Region 183 25,736 13.0% 9.1%
Lexford Other 45 3,805 1.9% 1.0%
Dallas/Ft Worth 36 10,862 5.5% 3.7%
Houston 17 5,282 2.7% 1.9%
Austin 13 3,868 1.9% 1.3%
Tulsa 7 1,828 0.9% 0.5%
San Antonio 6 1,861 0.9% 0.4%
Kansas City 1 288 0.1% 0.2%
---------------------------------------
Texas Region 80 23,989 12.1% 8.0%
Phoenix 37 10,628 5.4% 4.4%
Tucson 2 558 0.3% 0.1%
Albuquerque 2 369 0.2% 0.1%
---------------------------------------
Arizona Region 41 11,555 5.8% 4.5%
Denver 28 8,692 4.4% 4.1%
---------------------------------------
Colorado Region 28 8,692 4.4% 4.1%
Los Angeles 31 6,479 3.3% 6.3%
San Diego 12 3,766 1.9% 3.7%
Inland Empire, CA 12 3,971 2.0% 3.0%
Orange County, CA 8 3,013 1.5% 2.9%
---------------------------------------
Southern Cal Region 63 17,229 8.7% 15.9%
San Francisco Bay Area 26 6,249 3.1% 4.9%
Central Valley, CA 10 1,595 0.8% 0.5%
---------------------------------------
Northern Cal Region 36 7,844 4.0% 5.4%
Seattle 38 7,713 3.9% 4.0%
Portland, OR 13 4,678 2.4% 2.1%
Tacoma 7 2,341 1.2% 1.0%
---------------------------------------
Washington Region 58 14,732 7.4% 7.1%
---------------------------------------
Total 918 192,199 96.9% 99.7%
Condominium Conversion 14 2,401 1.2% 0.3%
Ft. Lewis - Military Housing 1 3,820 1.9% 0.0%
---------------------------------------
Grand Total 933 198,420 100.0% 100.0%
Debt Summary as of June 30, 2005
Weighted
Average
$ Millions (1) Rate (1)
-------------- --------------
Secured $3,204 5.71%
Unsecured 3,449 5.96%
-------------- --------------
Total $6,653 5.84%
Fixed Rate $5,215 6.46%
Floating Rate 1,438 3.59%
-------------- --------------
Total $6,653 5.84%
Above Totals Include:
---------------------
Tax Exempt:
Fixed $285 3.58%
Floating 466 2.91%
-------------- --------------
Total $751 3.15%
Unsecured Revolving Credit Facility $428 3.11%
(1) Net of the effect of any derivative instruments.
Debt Maturity Schedule as of June 30, 2005
Year $ Millions % of Total
----- ---------- ----------
2005 $199 3.0%
2006 (2) 579 8.7%
2007 397 6.0%
2008 (3) 1,036 15.6%
2009 839 12.6%
2010 216 3.2%
2011 717 10.8%
2012 519 7.8%
2013 451 6.8%
2014+ (4) 1,700 25.5%
---------- ----------
Total $6,653 100.0%
(2) Includes $150 million of unsecured debt with a final maturity of
2026 that is putable in 2006.
(3) Includes $428 million outstanding on the Company's unsecured
revolving credit facility. The Company entered into a new credit
facility on April 1, 2005 that matures on May 29, 2008.
(4) Includes $300 million of unsecured debt with a final maturity of
2015 that was putable/callable on April 13, 2005. Debt was
remarketed and remains outstanding until April 13, 2015.
Selected Unsecured Public Debt Covenants
June 30,
2005
---------
Total Debt to Adjusted Total Assets (not to exceed 60%) 42.6%
Secured Debt to Adjusted Total Assets (not to exceed 40%) 20.5%
Consolidated Income Available For Debt Service To
Maximum Annual Service Charges
(must be at least 1.5 to 1) 2.89
Total Unsecured Assets to Unsecured Debt
(must be at least 150%) 290.3%
These selected covenants relate to ERP Operating Limited Partnership's
("ERPOP") outstanding unsecured public debt. Equity Residential is the
general partner of ERPOP. The terms are defined in the original
indenture.
Market Capitalization as of June 30, 2005
Total Debt $6,652,659,406
Common Shares & OP Units 308,056,054
Common Share Equivalents 1,819,996
------------
Total outstanding at quarter-end 309,876,050
Common Share Price at June 30, 2005 $36.82
------------
11,409,636,161
Perpetual Preferred Shares Liquidation
Value 615,000,000
Perpetual Preference Interests
Liquidation Value 25,500,000
----------------
Total Market Capitalization $18,702,795,567
Total Debt/Total Market Capitalization 36%
Common Share and Operating Partnership Unit (OP Unit)
Weighted Average Amounts Outstanding
YTD 2Q05 YTD 2Q04 2Q05 2Q04
------------ ------------ ------------ ------------
Weighted Average
Amounts Outstanding
for Net Income
Purposes:
Common Shares -
basic 284,899,012 278,223,576 285,283,094 278,949,482
Shares issuable
from assumed
conversion/
vesting of:
- OP Units 20,893,584 21,214,377 20,906,578 20,897,740
- share
options/
restricted
shares 3,569,088 2,578,607 3,789,207 2,354,058
------------ ------------ ------------ ------------
Total Common
Shares and OP
Units - diluted 309,361,684 302,016,560 309,978,879 302,201,280
Weighted Average
Amounts
Outstanding for
FFO Purposes:
OP Units - basic 20,893,584 21,214,377 20,906,578 20,897,740
Common Shares -
basic 284,899,012 278,223,576 285,283,094 278,949,482
------------ ------------ ------------ ------------
Total Common
Shares and OP
Units - basic 305,792,596 299,437,953 306,189,672 299,847,222
Shares issuable
from assumed
conversion/
vesting of:
- convertible
preferred
shares/units 847,812 2,540,697 828,816 2,531,588
- share
options/
restricted
shares 3,569,088 2,578,607 3,789,207 2,354,058
------------ ------------ ------------ ------------
Total Common
Shares and OP
Units - diluted 310,209,496 304,557,257 310,807,695 304,732,868
Period Ending
Amounts
Outstanding:
OP Units 20,911,721
Common Shares 287,144,333
------------
Total Common
Shares and OP
Units 308,056,054
Unconsolidated Entities as of June 30, 2005
(Amounts in thousands except for project and unit amounts)
Institutional
Joint Lexford /
Ventures Other Totals
------------ ----------- ---------
Total projects 45 11 56 (1)
------------ ----------- ---------
Total units 10,846 1,451 12,297 (1)
------------ ----------- ---------
Company's ownership percentage of
outstanding debt 25.0% 10.7%
Company's share of outstanding
debt (2) $121,200 $2,861 $124,061
------------ ----------- ---------
Operating information for the
six-months ended 6/30/05
(at 100%):
Operating revenue $46,371 $4,462 $50,833
Operating expenses 20,893 2,342 23,235
------------ ----------- ---------
Net operating income 25,478 2,120 27,598
Depreciation 11,010 956 11,966
Other 176 2 178
------------ ----------- ---------
Operating income 14,292 1,162 15,454
Interest and other income 175 16 191
Interest:
Expense incurred, net (18,722) (1,047) (19,769)
Amortization of deferred
financing costs (308) (91) (399)
------------ ----------- ---------
Net (loss) income $(4,563) $40 $(4,523)
============ =========== =========
(1) Totals exclude Fort Lewis Military Housing consisting of one
property and 3,820 units, which is not accounted for under the
equity method of accounting, but is included in the Company's
property/unit counts at June 30, 2005.
(2) All debt is non-recourse to the Company.
Consolidated Development Projects as of June 30, 2005
(Amounts in thousands except for project and unit amounts)
Total Total Book
No. of Capital Value To
Projects Location Units Cost (1) Date (1)(2)
- ----------------------------------------------------------------------
Projects Under
Development
- --------------
2400 M St Washington, D.C. 359 $111,947 $85,356
Union Station Los Angeles, CA 278 57,727 33,372
Indian Ridge Waltham, MA 264 47,032 38,067
Bella Vista III (3) Woodland Hills,
CA 264 70,649 25,053
-------------------------------
Total Projects Under
Development 1,165 287,355 181,848
Completed Not
Stabilized:
- -------------
1210 Massachusetts Ave.
(Sovereign Park) Washington, D.C. 144 39,702 39,456
City View at the
Highlands (3) Lombard, IL 403 65,539 64,932
Marina Bay II (3)(4) Quincy, MA 108 23,480 23,153
-------------------------------
Total Projects Completed
Not Stabilized 655 128,721 127,541
Completed And Stabilized
During the Quarter:
- ------------------------
City Place
(Westport) (3) Kansas City, MO 288 33,539 33,539
-------------------------------
Total Projects Completed
And Stabilized During
the Quarter 288 33,539 33,539
-------------------------------
Total Projects 2,108 $449,615 $342,928
===============================
Percentage Percentage Percentage
Projects Location Completed Leased Occupied
- ----------------------------------------------------------------------
Projects Under
Development
- --------------
2400 M St Washington, D.C. 74% - -
Union Station Los Angeles, CA 49% - -
Indian Ridge Waltham, MA 88% 23% 14%
Bella Vista III (3) Woodland Hills,
CA 9% - -
Completed Not
Stabilized:
- -------------
1210 Massachusetts Ave.
(Sovereign Park) Washington, D.C. 100% 74% 73%
City View at the
Highlands (3) Lombard, IL 100% 97% 93%
Marina Bay II (3)(4) Quincy, MA 100% 52% 51%
Completed And Stabilized
During the Quarter:
- ------------------------
City Place
(Westport) (3) Kansas City, MO 100% 98% 97%
Estimated
Estimated Stabilization
Projects Location Completion Date Date
- ----------------------------------------------------------------------
Projects Under
Development
- --------------
2400 M St Washington, D.C. 1Q 2006 3Q 2007
Union Station Los Angeles, CA 1Q 2006 4Q 2006
Indian Ridge Waltham, MA 4Q 2005 4Q 2006
Bella Vista III (3) Woodland Hills,
CA 4Q 2006 3Q 2007
Completed Not
Stabilized:
- --------------
1210 Massachusetts Ave.
(Sovereign Park) Washington, D.C. Completed 4Q 2005
City View at the
Highlands (3) Lombard, IL Completed 3Q 2005
Marina Bay II (3)(4) Quincy, MA Completed 4Q 2005
Completed And Stabilized
During the Quarter:
- ------------------------
City Place
(Westport) (3) Kansas City, MO Completed 2Q 2005
Total Capital Q2 2005
NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS Cost (1) NOI
----------------------------
Projects Under Development $287,355 $(215)
Completed Not Stabilized 128,721 1,104
Completed And Stabilized During the
Quarter 33,539 559
----------------------------
Total Development/Newly
Stabilized NOI Contribution $449,615 $1,448
============================
(1) Total capital cost represents estimated development cost for
projects under development and all capitalized costs incurred to
date plus any estimates of costs remaining to be funded for all
completed projects.
(2) Of the total book value to date, $170.0 million has been
transferred to land and depreciable property and $172.9 million is
currently reflected as construction in progress ("CIP"). The
remaining $230.2 million of CIP represents land held for future
development and related costs and land and related development
costs for uncompleted condominium projects. Of the $106.7 million
remaining to be invested, $59.9 million will be funded through
third party construction mortgages.
(3) Projects are wholly owned. All others are partially owned.
(4) Project was sold on July 1, 2005.
Consolidated Condominium Conversion Projects as of June 30, 2005
(Amounts in thousands except for project and unit amounts)
Units
-----------------------------
Available for
Sale
----------------
Project Estimated Sold
Start Close Units Not
Projects Location Date Out Date Total Closed Closed Available
- ----------------------------------------------------------------------
For Sale
- --------
Four Lakes Lisle, IL Q4 2001 Q4 2005 942 743 63 136
Venetian I
& II Phoenix, AZ Q1 2004 Q4 2005 264 148 116 -
Radius at
Logan
Circle (1) Washington,
DC Q2 2004 Q3 2005 170 169 - 1
Watermarke
(1) Irvine, CA Q3 2004 Q4 2006 535 254 108 173
Atlas (1) Washington,
DC Q4 2004 Q4 2005 141 - 99 42
Grand
Marquis Plantation,
FL Q4 2004 Q1 2006 198 - 194 4
Tuscany
Villas Scottsdale,
AZ Q4 2004 Q2 2006 180 - - 180
Fairway
Greens Pembroke
Pines, FL Q1 2005 Q2 2006 152 - - 152
Magnuson
Pointe Seattle, WA Q1 2005 Q2 2006 104 - - 104
Timber
Ridge Woodinville,
WA Q1 2005 Q1 2007 203 - - 203
Braewood Bothell, WA Q2 2005 Q2 2006 84 - - 84
Fifth
Avenue
North Seattle, WA Q2 2005 Q1 2006 62 - - 62
Milano
Terrace Scottsdale,
AZ Q2 2005 Q3 2006 224 - - 224
Riviera
Palms Coconut
Creek, FL Q2 2005 Q3 2006 248 - - 248
South Palm
Place Tamarac, FL Q2 2005 Q4 2006 208 - - 208
-----------------------------
3,715 1,314 580 1,821
Closed Out
- ----------
Country
Club
Estates Mill Creek,
WA Q1 2004 Q2 2005 151 151 - -
Grand Oasis Coral
Springs,
FL Q2 2004 Q2 2005 198 198 - -
Sterling
Heights Bellevue,
WA Q2 2004 Q2 2005 116 116 - -
Verona Scottsdale,
AZ Q2 2004 Q2 2005 108 108 - -
Projects
closed out
prior to 2005 388 388 - -
-----------------------------
961 961 - -
Totals 19 4,676 2,275 580 1,821
=============================
2005 YTD Activity
-----------------------------
Project Estimated FFO
Start Close Units Sales Incremental
Projects Location Date Out Date Closed Price Gain on Sale
- ----------------------------------------------------------------------
For Sale
- ---------
Four Lakes Lisle, IL Q4 2001 Q4 2005 96 $ 13,862 $ 2,055
Venetian I
& II Phoenix, AZ Q1 2004 Q4 2005 55 10,927 2,921
Radius at
Logan
Circle (1) Washington,
DC Q2 2004 Q3 2005 53 21,437 3,227
Watermarke
(1) Irvine, CA Q3 2004 Q4 2006 209 92,162 8,834
Atlas (1) Washington,
DC Q4 2004 Q4 2005 - - -
Grand
Marquis Plantation,
FL Q4 2004 Q1 2006 - - -
Tuscany
Villas Scottsdale,
AZ Q4 2004 Q2 2006 - - -
Fairway
Greens Pembroke
Pines, FL Q1 2005 Q2 2006 - - -
Magnuson
Pointe Seattle, WA Q1 2005 Q2 2006 - - -
Timber
Ridge Woodinville,
WA Q1 2005 Q1 2007 - - -
Braewood Bothell, WA Q2 2005 Q2 2006 - - -
Fifth
Avenue
North Seattle, WA Q2 2005 Q1 2006 - - -
Milano
Terrace Scottsdale,
AZ Q2 2005 Q3 2006 - - -
Riviera
Palms Coconut
Creek, FL Q2 2005 Q3 2006 - - -
South Palm
Place Tamarac, FL Q2 2005 Q4 2006 - - -
-----------------------------
413 138,388 17,037
Closed Out
- ----------
Country
Club
Estates Mill Creek,
WA Q1 2004 Q2 2005 86 14,883 2,867
Grand Oasis Coral
Springs,
FL Q2 2004 Q2 2005 89 12,875 3,473
Sterling
Heights Bellevue,
WA Q2 2004 Q2 2005 76 16,083 2,979
Verona Scottsdale,
AZ Q2 2004 Q2 2005 108 16,092 3,334
Projects
closed out
prior to 2005 - - (71)
-----------------------------
359 59,933 12,582
Totals 19 772 $198,321 $ 29,619
=============================
Net incremental
gain on sales of
condominium units $ 29,619
Property management
and general and
administrative expenses (2,056)
Discontinued operating
income 250
------------
Net Income - Condominium
Division (2) $ 27,813
============
2Q 2005
------------------------------
Project Estimated FFO
Start Close Units Sales Incremental
Projects Location Date Out Date Closed Price Gain on Sale
- ----------------------------------------------------------------------
For Sale
- --------
Four Lakes Lisle, IL Q4 2001 Q4 2005 66 $ 9,497 $ 1,782
Venetian I
& II Phoenix, AZ Q1 2004 Q4 2005 54 10,769 2,915
Radius at
Logan
Circle (1) Washington,
DC Q2 2004 Q3 2005 3 1,353 194
Watermarke
(1) Irvine, CA Q3 2004 Q4 2006 123 53,251 4,704
Atlas (1) Washington,
DC Q4 2004 Q4 2005 - - -
Grand
Marquis Plantation,
FL Q4 2004 Q1 2006 - - -
Tuscany
Villas Scottsdale,
AZ Q4 2004 Q2 2006 - - -
Fairway
Greens Pembroke
Pines, FL Q1 2005 Q2 2006 - - -
Magnuson
Pointe Seattle, WA Q1 2005 Q2 2006 - - -
Timber
Ridge Woodinville,
WA Q1 2005 Q1 2007 - - -
Braewood Bothell, WA Q2 2005 Q2 2006 - - -
Fifth
Avenue
North Seattle, WA Q2 2005 Q1 2006 - - -
Milano
Terrace Scottsdale,
AZ Q2 2005 Q3 2006 - - -
Riviera
Palms Coconut
Creek, FL Q2 2005 Q3 2006 - - -
South Palm
Place Tamarac, FL Q2 2005 Q4 2006 - - -
------------------------------
246 74,870 9,595
Closed Out
- ----------
Country
Club
Estates Mill Creek,
WA Q1 2004 Q2 2005 46 7,941 1,620
Grand Oasis Coral
Springs,
FL Q2 2004 Q2 2005 5 727 (16)
Sterling
Heights Bellevue,
WA Q2 2004 Q2 2005 29 6,735 1,412
Verona Scottsdale,
AZ Q2 2004 Q2 2005 108 16,092 3,334
Projects
closed out
prior to 2005 - - (1)
------------------------------
188 31,495 6,349
Totals 19 434 $106,365 $ 15,944
==============================
Net incremental
gain on sales of
condominium units $ 15,944
Property management
and general and
administrative expenses (1,180)
Discontinued operating
income (113)
------------
Net Income - Condominium
Division (2) $ 14,651
============
(1) Partially owned projects; incremental gain on sale represents
portion attributable to the Company.
(2) Excludes interest income and interest expense specific to
condominium conversion projects.
Maintenance Expenses and Capitalized Improvements to Real Estate
For the Six Months Ended June 30, 2005
(Amounts in thousands except for unit and per unit amounts)
---------------------------------------------
Maintenance Expenses
---------------------------------------------
Total Avg. Avg. Avg.
Units Expense Per Payroll Per Per
(1) (2) Unit (3) Unit Total Unit
-------- -------------- -------------- ---------------
Established
Properties (6) 151,934 $45,194 $297 $42,058 $277 $87,252 $574
New Acquisition
Properties (7) 21,282 6,655 354 5,151 274 11,806 628
Other (8) 9,087 5,214 4,523 9,737
-------- -------- -------- ---------
Total 182,303 $57,063 $51,732 $108,795
======== ======== ======== =========
---------------------------------------------------
Capitalized Improvements to Real Estate
---------------------------------------------------
Avg. Building Avg. Avg.
Replacements Per Improvements Per Per
(4) Unit (5) Unit Total Unit
------------------ ----------------- --------------
Established
Properties (6) $26,532 $175 $33,635 $221 $60,167 $396
New Acquisition
Properties (7) 2,168 115 7,046 374 9,214 489
Other (8) 10,035 14,015 24,050
----------- ----------- --------
Total $38,735 $54,696 $93,431
=========== =========== ========
--------------------
Total Expenditures
--------------------
Avg.
Per
Grand Total Unit
--------------------
Established
Properties (6) $147,419 $970
New Acquisition
Properties (7) 21,020 1,117
Other (8) 33,787
----------
Total $202,226
==========
(1) Total units exclude 16,117 unconsolidated units.
(2) Maintenance expenses include general maintenance costs, unit
turnover costs including interior painting, regularly scheduled
landscaping and tree trimming costs, security, exterminating, fire
protection, snow and ice removal, elevator repairs, and other
miscellaneous building repair costs.
(3) Maintenance payroll includes employee costs for maintenance,
cleaning, housekeeping, and landscaping.
(4) Replacements include new expenditures inside the units such as
carpets, appliances, mechanical equipment, fixtures and vinyl
flooring.
(5) Building improvements include roof replacement, paving, amenities
and common areas, building mechanical equipment systems, exterior
painting and siding, major landscaping, vehicles and office and
maintenance equipment.
(6) Wholly Owned Properties acquired prior to January 1, 2003.
(7) Wholly Owned Properties acquired during 2003, 2004 and 2005. Per
unit amounts are based on a weighted average of 18,823 units.
(8) Includes properties either Partially Owned or sold during the
period, commercial space, condominium conversions and $2.8 million
included in building improvements spent on six specific assets
related to major renovations and repositioning of these assets.
Discontinued Operations
(Amounts in thousands)
Six Months Ended Quarter Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
------------------- -------------------
REVENUES
Rental income $23,866 $69,466 $8,029 $32,860
--------- --------- --------- ---------
Total revenues 23,866 69,466 8,029 32,860
--------- --------- --------- ---------
EXPENSES (1)
Property and maintenance 11,679 25,979 5,114 11,799
Real estate taxes and
insurance 4,693 8,248 1,143 4,099
Property management 137 126 55 126
Depreciation 4,818 17,834 1,243 8,700
--------- --------- --------- ---------
Total expenses 21,327 52,187 7,555 24,724
--------- --------- --------- ---------
Discontinued operating income 2,539 17,279 474 8,136
Interest and other income 114 98 78 55
Interest:
Expense incurred, net (7,107) (5,675) (3,104) (3,693)
Amortization of deferred
financing costs (209) (480) (94) (176)
--------- --------- --------- ---------
Discontinued operations, net $(4,663) $11,222 $(2,646) $4,322
========= ========= ========= =========
(1) Includes expenses paid in the current period for properties sold
in prior periods related to the Company's period of ownership.
As a result of the Securities and Exchange Commission's Regulation
FD, the Company will provide earnings guidance in its quarterly
earnings release. These projections are based on current expectations
and are forward-looking.
2005 Earnings Guidance (per share diluted)
------------------------------------------
Q3 2005 2005
-------------- --------------
Expected EPS (1) (3) $0.37 to $0.39 $2.01 to $2.11
Add: Expected depreciation expense 0.41 1.62
Less: Expected net gain on sales (1) (0.23) (1.20)
-------------- --------------
Expected FFO (2) (3) $0.55 to $0.57 $2.43 to $2.53
============== ==============
Same-Store Assumptions
----------------------
2005
--------------
Physical occupancy 94.0%
Revenue change 2.00% to 3.25%
Expense change 3.6% to 5.0%
NOI change 0.0% to 3.0%
Acquisitions $2.0 billion
Dispositions $1.4 billion
(1) Earnings per share ("EPS") represents net income per share
calculated in accordance with accounting principles generally
accepted in the United States. Expected EPS is calculated on a
basis consistent with actual EPS. Due to the uncertain timing and
extent of property dispositions and the resulting gains/losses on
sales, actual EPS could differ materially from expected EPS.
(2) The National Association of Real Estate Investment Trusts
("NAREIT") defines funds from operations ("FFO") (April 2002 White
Paper) as net income (computed in accordance with accounting
principles generally accepted in the United States), excluding
gains (or losses) from sales of depreciable property, plus
depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures will be calculated
to reflect funds from operations on the same basis. Expected FFO
is calculated on a basis consistent with actual FFO.
(3) Q1 2005 and full year 2005 include $0.21 per share of
non-recurring realized gain on sale of vacant land ($0.03) and
eBay, Inc.'s acquisition of the Company's ownership in Rent.com
($0.18).
CONTACT: Equity Residential
Marty McKenna, 312-928-1901