Exhibit 99.1
Equity Residential Reports 2005 Results; Exceeds
Guidance Due to Strong Condominium Sales
CHICAGO--(BUSINESS WIRE)--Jan. 31, 2006--Equity Residential (NYSE:EQR), the
largest publicly traded apartment company in America, today reported results for
the quarter and year ended December 31, 2005. All per share results are reported
on a fully diluted basis.
"As we expected, the continuing improvement in the economy, growth in jobs
and diminished supply in our core markets facilitated a strong finish to 2005
and will continue to benefit Equity Residential in 2006," said David J.
Neithercut, Equity Residential's President and CEO.
Fourth Quarter 2005
For the quarter ended December 31, 2005, the company reported earnings of
$0.74 per share compared to $0.48 per share in the fourth quarter of 2004. The
quarterly increase is primarily attributable to higher gains from sales of land
parcels, properties and condominiums.
Funds from Operations (FFO) for the quarter ended December 31, 2005 were
$0.66 per share compared to $0.56 per share in the same period of 2004. The
positive variance was primarily the result of higher gains on sales of land
parcels and condominiums in the quarter. The company's fourth quarter FFO
exceeded the high end of the guidance provided by the company on November 1,
2005 by $0.06 per share. This excess is comprised of $0.01 per share from
continued improvement in the company's same-store performance, $0.02 per share
related to the company's Watermarke condominium joint venture property in
California and $0.03 per share from the sale of condominium units at two of the
company's Florida properties.
Total revenues from continuing operations for the quarter were $518.9
million compared to $451.9 million in the fourth quarter of 2004. The primary
components of this $67.0 million increase in revenues include the properties
purchased after January 1, 2005 as well as a $25.1 million increase in
same-store revenues.
Year Ended December 31, 2005
For the year ended December 31, 2005, the company reported earnings of
$2.79 per share compared to $1.48 per share in the same period of 2004. The
annual increase is primarily attributable to higher gains on property and
condominium sales and the previously announced gain due to eBay Inc.'s
acquisition of the company's ownership interest in Rent.com.
FFO for the year ended December 31, 2005 was $2.52 per share compared to
$2.14 per share in the same period of 2004.
Total revenues from continuing operations for the year ended December 31,
2005 were $1.95 billion compared to $1.75 billion in the same period of 2004.
Same-Store Results
On a same-store fourth quarter to fourth quarter comparison, which includes
163,196 apartment units, revenues increased 5.9 percent, expenses increased 5.2
percent and NOI increased 6.4 percent. On a sequential same-store comparison for
these same 163,196 apartment units from third quarter 2005 to fourth quarter
2005, revenues increased 1.3 percent, expenses decreased 4.0 percent and NOI
increased 5.2 percent.
On a same-store year to year comparison, which includes 154,854 apartment
units, revenues increased 3.9 percent, expenses increased 5.6 percent and NOI
increased 2.8 percent.
Acquisitions/Dispositions
"2005 was a tremendous year of progress towards our goal of adding
high-quality, well-located assets to our portfolio, with acquisitions of over
$2.5 billion," said Mr. Neithercut. "We also sold more than $1.9 billion of
properties that were older or in slower growth markets, receiving good pricing
and furthering our goal of reducing the number of markets in which we operate.
In 2006 we will continue to work towards these goals with $1.5 billion in
anticipated acquisitions and $1.5 billion in planned dispositions."
During the fourth quarter of 2005, the company acquired 15 properties,
consisting of 4,891 apartment units, for an aggregate purchase price of $1.4
billion at an average capitalization (cap) rate of 4.7 percent and four land
parcels for $91.6 million.
Also during the quarter, the company sold 11 properties, consisting of
2,636 apartment units, for an aggregate sale price of $274.6 million at an
average cap rate of 5.2 percent and three land parcels for $72.0 million. In
addition, the company sold 652 condominium units for $165.2 million.
In the year ended December 31, 2005, the company acquired 41 properties,
consisting of 12,059 apartment units, for an aggregate purchase price of $2.5
billion at an average cap rate of 5.1 percent and seven land parcels for $138.3
million. In addition, the company sold 50 properties, consisting of 12,848
apartment units, for an aggregate sale price of $1.4 billion at an average cap
rate of 5.0 percent. In addition, the company sold 2,241 condominium units for
$593.3 million and five land parcels for $108.3 million.
First Quarter 2006 Results
Equity Residential expects to announce first quarter 2006 results on
Tuesday, May 2, 2006 and host a conference call to discuss those results at
10:00 a.m. CT on Wednesday, May 3, 2006.
Equity Residential, an S&P 500 company, is the largest publicly traded
apartment company in America. Nationwide, Equity Residential owns or has
investments in 926 properties in 31 states and the District of Columbia
consisting of 197,404 apartment units. For more information on Equity
Residential, please visit our website at www.equityresidential.com.
Forward-Looking Statements
In addition to historical information, this press release contains
forward-looking statements and information within the meaning of the federal
securities laws. These statements are based on current expectations, estimates,
projections and assumptions made by management. While Equity Residential's
management believes the assumptions underlying its forward-looking statements
are reasonable, such information is inherently subject to uncertainties and may
involve certain risks, including, without limitation, changes in general
economic conditions, including the rate of job growth and cost of labor and
construction material, the level of new multifamily construction and
development, competition and local government regulation. Other risks and
uncertainties are described under the heading "Risk Factors" in our Annual
Report on Form 10-K filed with the Securities and Exchange Commission (SEC) and
available on our website, www.equityresidential.com. Many of these uncertainties
and risks are difficult to predict and beyond management's control.
Forward-looking statements are not guarantees of future performance, results or
events. Equity Residential assumes no obligation to update or supplement
forward-looking statements because of subsequent events.
A live web cast of the company's conference call discussing these results
and outlook for 2006 will take place Wednesday, February 1, 2006 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)
Year Ended Quarter Ended
December 31, December 31,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
REVENUES
Rental income $1,943,789 $1,742,028 $516,227 $449,416
Fee and asset
management 11,148 11,796 2,692 2,528
----------- ----------- ----------- -----------
Total revenues 1,954,937 1,753,824 518,919 451,944
----------- ----------- ----------- -----------
EXPENSES
Property and
maintenance 544,495 477,605 140,314 122,020
Real estate taxes
and insurance 224,400 205,173 64,920 48,843
Property management 84,307 77,093 22,723 20,589
Fee and asset
management 9,852 8,814 2,520 2,347
Depreciation 508,140 445,374 136,752 117,324
General and
administrative 71,799 49,299 25,385 14,188
----------- ----------- ----------- -----------
Total expenses 1,442,993 1,263,358 392,614 325,311
----------- ----------- ----------- -----------
Operating income 511,944 490,466 126,305 126,633
Interest and other
income 68,517 8,957 3,553 2,117
Interest:
Expense incurred,
net (384,021) (328,289) (103,013) (86,110)
Amortization of
deferred
financing costs (6,570) (6,057) (1,696) (1,485)
----------- ----------- ----------- -----------
Income before allocation
to Minority Interests,
income (loss) from
investments in
unconsolidated entities,
net gain on sales of
unconsolidated entities
and land parcels and
discontinued operations 189,870 165,077 25,149 41,155
Allocation to Minority
Interests:
Operating
Partnership (58,514) (31,228) (15,454) (10,005)
Preference
Interests (7,591) (19,420) (1,160) (4,262)
Junior Preference
Units (15) (70) (4) (3)
Partially Owned
Properties 801 1,787 129 680
Premium on
redemption of
Preference
Interests (4,134) (1,117) - -
Income (loss) from
investments in
unconsolidated
entities 470 (7,325) 920 143
Net gain on sales of
unconsolidated
entities 1,330 4,593 1,206 186
Net gain on sales of
land parcels 30,245 5,482 19,879 -
----------- ----------- ----------- -----------
Income from continuing
operations 152,462 117,779 30,665 27,894
Net gain on sales of
discontinued
operations 697,655 318,443 194,602 116,272
Discontinued
operations, net 11,676 36,107 619 6,467
----------- ----------- ----------- -----------
Net income 861,793 472,329 225,886 150,633
Preferred distributions (49,642) (53,746) (10,638) (13,075)
Premium on redemption
of Preferred Shares (4,359) - (43) -
----------- ----------- ----------- -----------
Net income available to
Common Shares $807,792 $418,583 $215,205 $137,558
=========== =========== =========== ===========
Earnings per share -
basic:
Income from continuing
operations available
to Common Shares $0.51 $0.32 $0.12 $0.08
=========== =========== =========== ===========
Net income available to
Common Shares $2.83 $1.50 $0.75 $0.49
=========== =========== =========== ===========
Weighted average Common
Shares outstanding 285,760 279,744 287,033 282,329
=========== =========== =========== ===========
Earnings per share -
diluted:
Income from continuing
operations available
to Common Shares $0.51 $0.31 $0.11 $0.08
=========== =========== =========== ===========
Net income available to
Common Shares $2.79 $1.48 $0.74 $0.48
=========== =========== =========== ===========
Weighted average Common
Shares outstanding 310,785 303,871 312,408 306,841
=========== =========== =========== ===========
Distributions declared
per Common Share
outstanding $1.74 $1.73 $0.4425 $0.4325
=========== =========== =========== ===========
EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS
(Amounts in thousands except per share data)
Year Ended Quarter Ended
December 31, December 31,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Net income $861,793 $472,329 $225,886 $150,633
Allocation to Minority
Interests - Operating
Partnership 58,514 31,228 15,454 10,005
Adjustments:
Depreciation 508,140 445,374 136,752 117,324
Depreciation - Non-
real estate additions (5,752) (5,574) (1,824) (1,549)
Depreciation -
Partially Owned and
Unconsolidated
Properties 2,487 1,903 351 (926)
Net (gain) on sales of
unconsolidated
entities (1,330) (4,593) (1,206) (186)
Discontinued
operations:
Depreciation 20,818 51,209 1,055 11,377
Net (gain) on
sales of
discontinued
operations (697,655) (318,443) (194,602) (116,272)
Net incremental
gain on sales of
condominium
units 91,611 32,054 34,944 16,385
----------- ----------- ----------- -----------
FFO (1)(2) 838,626 705,487 216,810 186,791
Preferred
distributions (49,642) (53,746) (10,638) (13,075)
Premium on redemption
of Preferred Shares (4,359) - (43) -
----------- ----------- ----------- -----------
FFO available to
Common Shares and OP
Units - basic $784,625 $651,741 $206,129 $173,716
=========== =========== =========== ===========
FFO available to
Common Shares and OP
Units - diluted $785,818 $655,177 $206,387 $174,291
=========== =========== =========== ===========
FFO per share and OP
Unit - basic $2.56 $2.17 $0.67 $0.57
=========== =========== =========== ===========
FFO per share and OP
Unit - diluted $2.52 $2.14 $0.66 $0.56
=========== =========== =========== ===========
Weighted average
Common Shares and
OP Units outstanding -
basic 306,579 300,683 307,792 302,931
=========== =========== =========== ===========
Weighted average
Common Shares and
OP Units outstanding -
diluted 311,553 306,075 313,071 308,317
=========== =========== =========== ===========
(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)
December 31, December 31,
2005 2004
------------- -------------
ASSETS
Investment in real estate
Land $2,848,601 $2,183,818
Depreciable property 13,336,636 12,350,900
Construction in progress (including
land) 405,133 317,903
------------- -------------
Investment in real estate 16,590,370 14,852,621
Accumulated depreciation (2,888,140) (2,599,827)
------------- -------------
Investment in real estate, net 13,702,230 12,252,794
Cash and cash equivalents 88,828 83,505
Investments in unconsolidated entities 6,838 11,461
Rents receivable 789 1,681
Deposits - restricted 77,093 82,194
Escrow deposits - mortgage 35,225 35,800
Deferred financing costs, net 40,636 34,986
Goodwill, net 30,000 30,000
Other assets 117,306 112,854
------------- -------------
Total assets $14,098,945 $12,645,275
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $3,379,289 $3,166,739
Notes, net 3,442,784 3,143,067
Lines of credit 769,000 150,000
Accounts payable and accrued expenses 108,855 87,422
Accrued interest payable 78,441 70,411
Rents received in advance and other
liabilities 302,418 227,588
Security deposits 54,823 49,501
Distributions payable 145,812 142,437
------------- -------------
Total liabilities 8,281,422 7,037,165
------------- -------------
Commitments and contingencies
Minority Interests:
Operating Partnership 345,034 319,841
Preference Interests 60,000 206,000
Junior Preference Units 184 184
Partially Owned Properties 16,965 9,557
------------- -------------
Total Minority Interests 422,183 535,582
------------- -------------
Shareholders' equity:
Preferred Shares of beneficial
interest, $0.01 par value;
100,000,000 shares authorized;
3,323,830 shares issued and
outstanding as of December 31,
2005 and 4,108,658 shares issued
and outstanding as of December
31, 2004 504,096 636,216
Common Shares of beneficial interest,
$0.01 par value; 1,000,000,000 shares
authorized; 289,536,344 shares issued
and outstanding as of December 31,
2005 and 285,076,915 shares issued
and outstanding as of December 31, 2004 2,895 2,851
Paid in capital 5,253,188 5,112,311
Deferred compensation - (18)
Distributions in excess of accumulated
earnings (350,367) (657,462)
Accumulated other comprehensive loss (14,472) (21,370)
------------- -------------
Total shareholders' equity 5,395,340 5,072,528
------------- -------------
Total liabilities and shareholders'
equity $14,098,945 $12,645,275
============= =============
Year 2005 vs. Year 2004
Year over Year Same-Store Results
$ in Millions - 154,854 Same-Store Units
Description Revenues Expenses (1) NOI (2)
------------ ------------ ------------ ------------
2005 $1,636.7 $678.2 $958.5
2004 $1,574.8 $642.0 $932.8
------------ ------------ ------------
Change $61.9 $36.2 $25.7
============ ============ ============
Change 3.9% 5.6% 2.8%
Fourth Quarter 2005 vs. Fourth Quarter 2004
Quarter over Quarter Same-Store Results
$ in Millions - 163,196 Same-Store Units
Description Revenues Expenses (1) NOI (2)
------------ ------------ ------------ ------------
Q4 2005 $448.4 $180.2 $268.2
Q4 2004 $423.3 $171.3 $252.0
------------ ------------ ------------
Change $25.1 $8.9 $16.2
============ ============ ============
Change 5.9% 5.2% 6.4%
Fourth Quarter 2005 vs. Third Quarter 2005
Sequential Quarter over Quarter Same-Store Results
$ in Millions - 163,196 Same-Store Units(a)
Description Revenues Expenses (1) NOI (2)
------------ ------------ -------------------------
Q4 2005 $448.4 $180.2 $268.2
Q3 2005 $442.6 $187.7 $254.9
------------ ------------ ------------
Change $5.8 $(7.5) $13.3
============ ============ ============
Change 1.3% (4.0%) 5.2%
(a) Includes the same units as the Fourth Quarter 2005 vs. Fourth
Quarter 2004 Same Store results for comparability purposes.
Same-Store Occupancy Statistics
Year 2005 94.1% Q4 2005 94.0% Q4 2005 94.0%
Year 2004 93.5% Q4 2004 93.4% Q3 2005 94.8%
----------- ----------- -----------
Change 0.6% Change 0.6% Change (0.8%)
(1) December YTD 2005 and Fourth Quarter 2005 expenses exclude the
uninsured property damage caused by Hurricane Wilma. December YTD
2004 and Fourth Quarter 2004 expenses exclude the uninsured
property damage caused by Hurricanes Frances, Charley, Ivan and
Jeanne.
(2) 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
2005 vs. 2004
The following table provides a reconciliation of operating income per
the consolidated statements of operations to NOI for the 2005 Same
Store Properties:
Year Ended December 31,
---------------------------
2005 2004
------------- -------------
(Amounts in millions)
Operating income $511.9 $490.5
Adjustments:
Insurance (1) 11.1 15.2
Non-same store operating results (143.2) (64.6)
Fee and asset management revenue (11.1) (11.8)
Fee and asset management expense 9.9 8.8
Depreciation 508.1 445.4
General and administrative 71.8 49.3
------------- -------------
Same store NOI $958.5 $932.8
============= =============
Same Store NOI Reconciliation
Fourth Quarter 2005 vs. Fourth Quarter 2004
The following table presents a reconciliation of operating income per
the consolidated statements of operations to NOI for the Fourth
Quarter 2005 Same Store Properties:
Quarter Ended December 31,
---------------------------
2005 2004
------------- -------------
(Amounts in millions)
Operating income $126.3 $126.6
Adjustments:
Insurance (1) 11.1 1.1
Non-same store operating results (31.2) (7.0)
Fee and asset management revenue (2.7) (2.5)
Fee and asset management expense 2.5 2.3
Depreciation 136.8 117.3
General and administrative 25.4 14.2
------------- -------------
Same store NOI $268.2 $252.0
============= =============
(1) Hurricane property damage net of reimbursement from insurance
company
2005 vs. 2004
Same-Store Results by Market
----------------------------------
Increase (Decrease) from
Prior Year
-------------------------------------------------------------------
2005
2005 Weighted
% of Average
Actual Occupancy
Markets Units NOI % Revenues Expenses NOI Occupancy
-------------------------------------------------------------------
1 South
Florida 9,042 6.7% 95.6% 8.4% 6.6% 9.7% 1.2%
2 Boston 5,397 6.5% 94.0% (0.6%) 6.7% (4.7%) (0.6%)
3 San Francisco
Bay Area 5,990 6.2% 95.6% 3.2% 5.9% 1.7% 0.6%
4 Los
Angeles 4,781 5.7% 95.4% 5.1% 7.5% 3.9% 0.5%
5 Phoenix 8,740 4.9% 94.4% 8.7% 4.1% 12.1% 3.0%
6 Atlanta 9,082 4.3% 94.3% 1.4% 3.4% (0.2%) 0.5%
7 DC Suburban
Virginia 3,826 4.1% 94.4% 7.0% 3.1% 8.9% 0.0%
8 San Diego 3,486 4.1% 95.5% 4.7% 7.7% 3.3% 0.3%
9 New England
(excl
Boston) 6,101 4.0% 93.2% 0.5% 8.0% (4.9%) (1.3%)
10 Seattle/
Tacoma 6,092 3.7% 94.9% 5.0% 5.6% 4.5% 1.0%
11 Dallas/
Ft Worth 8,152 3.7% 94.6% 1.7% 6.1% (2.7%) 0.8%
12 Denver 6,360 3.6% 94.5% 1.6% 3.9% 0.2% 1.7%
13 DC Suburban
Maryland 4,739 3.4% 93.1% 3.3% 7.1% 1.1% (0.6%)
14 Inland Empire,
CA 3,504 3.4% 94.0% 6.1% 10.0% 4.2% (0.9%)
15 Orange Co 3,013 3.4% 95.4% 5.4% 8.5% 3.8% 0.4%
16 Orlando 5,382 3.3% 95.6% 10.0% 5.7% 13.0% 0.9%
17 New York Metro
Area 2,430 3.2% 95.6% 6.0% 6.2% 5.8% 0.9%
18 Houston 5,282 2.4% 93.2% (0.2%) 4.7% (5.0%) 2.2%
19 Minn/
St Paul 3,826 2.3% 92.4% 2.1% 1.1% 2.9% 2.3%
20 Portland 3,849 2.1% 94.3% 5.3% 4.1% 6.2% 0.3%
----------------------------------------------------------
Top 20
Markets 109,074 81.0% 94.5% 4.1% 5.8% 3.0% 0.8%
All Other
Markets 45,780 19.0% 93.1% 3.3% 5.1% 1.7% 0.4%
----------------------------------------------------------
Total 154,854 100.0% 94.1% 3.9% 5.6% 2.8% 0.6%
==========================================================
Fourth Quarter 2005 vs. Fourth Quarter 2004
Same-Store Results by Market
----------------------------------
Increase (Decrease) from
Prior Quarter
-------------------------------------------------------------------
4Q 2005
4Q 2005 Weighted
% of Average
Actual Occupancy
Markets Units NOI % Revenues Expenses NOI Occupancy
-------------------------------------------------------------------
1 South
Florida 9,582 7.0% 96.1% 10.6% 5.3% 14.3% 1.2%
2 Boston 5,618 6.3% 94.7% 4.6% 6.9% 3.3% 1.6%
3 Los
Angeles 5,630 6.3% 95.2% 6.3% 6.0% 6.5% 0.2%
4 San Francisco
Bay Area 5,990 5.7% 95.1% 4.9% 5.8% 4.3% (0.1%)
5 DC Suburban
Virginia 5,182 5.2% 93.7% 8.2% 5.4% 9.6% 0.4%
6 Atlanta 10,772 4.9% 94.3% 3.7% 5.5% 2.3% 0.5%
7 Phoenix 8,740 4.7% 94.8% 11.5% 0.3% 19.6% 2.3%
8 Seattle/
Tacoma 7,153 4.4% 93.6% 6.5% 4.6% 7.8% (0.8%)
9 Orlando 6,314 3.9% 94.7% 9.4% 5.3% 11.9% (1.3%)
10 New York Metro
Area 2,871 3.7% 95.7% 7.9% 8.8% 7.3% 1.1%
11 San Diego 3,486 3.7% 96.4% 5.8% 6.0% 5.7% 1.0%
12 New England
(excl
Boston) 6,101 3.6% 91.8% 1.3% 6.4% (2.4%) (1.4%)
13 Denver 6,804 3.5% 94.0% 4.6% 3.9% 5.0% 1.8%
14 Dallas/
Ft Worth 8,152 3.3% 93.9% 2.4% 5.6% (0.8%) (0.8%)
15 Inland Empire,
CA 3,504 3.2% 93.1% 7.2% 5.4% 8.2% (0.7%)
16 Orange Co 3,013 3.2% 95.8% 7.3% 4.5% 8.7% 0.7%
17 DC Suburban
Maryland 4,739 3.0% 91.5% 2.9% 10.0% (1.0%) (2.0%)
18 Houston 5,282 2.3% 95.4% 5.5% 4.0% 7.2% 4.4%
19 Minn/
St Paul 3,826 2.3% 93.5% 8.3% (0.5%) 15.6% 5.3%
20 Tampa/
Ft Myers 3,976 1.9% 94.4% 11.1% 8.7% 12.9% 0.4%
----------------------------------------------------------
Top 20
Markets 116,735 82.1% 94.4% 6.4% 5.4% 7.0% 0.6%
All Other
Markets 46,461 17.9% 93.0% 4.2% 4.7% 3.7% 0.6%
----------------------------------------------------------
Total 163,196 100.0% 94.0% 5.9% 5.2% 6.4% 0.6%
==========================================================
Fourth Quarter 2005 vs. Third Quarter 2005(a)
Sequential Same-Store Results by Market
----------------------------------
Increase (Decrease) from
Prior Quarter
-------------------------------------------------------------------
4Q 2005
4Q 2005 Weighted
% of Average
Actual Occupancy
Markets Units NOI % Revenues Expenses NOI Occupancy
-------------------------------------------------------------------
1 South
Florida 9,582 7.0% 96.1% 3.5% (4.6%) 9.5% 1.2%
2 Boston 5,618 6.3% 94.7% 3.8% 4.3% 3.4% (0.2%)
3 Los
Angeles 5,630 6.3% 95.2% 1.6% (3.3%) 4.2% (1.0%)
4 San Francisco
Bay Area 5,990 5.7% 95.1% 0.4% (3.1%) 2.5% (1.5%)
5 DC Suburban
Virginia 5,182 5.2% 93.7% 0.2% (5.2%) 3.0% (1.5%)
6 Atlanta 10,772 4.9% 94.3% 1.3% (4.7%) 6.6% (0.5%)
7 Phoenix 8,740 4.7% 94.8% 3.6% (8.5%) 12.6% 0.1%
8 Seattle/
Tacoma 7,153 4.4% 93.6% 0.5% (6.2%) 5.7% (1.9%)
9 Orlando 6,314 3.9% 94.7% 1.0% (6.6%) 6.0% (1.7%)
10 New York Metro
Area 2,871 3.7% 95.7% 0.9% (3.3%) 3.4% (0.7%)
11 San Diego 3,486 3.7% 96.4% 2.0% 0.7% 2.7% 0.5%
12 New England
(excl
Boston) 6,101 3.6% 91.8% (1.4%) (0.1%) (2.5%) (2.2%)
13 Denver 6,804 3.5% 94.0% (0.3%) (6.1%) 3.4% (1.4%)
14 Dallas/
Ft Worth 8,152 3.3% 93.9% 0.7% (4.0%) 6.3% (0.9%)
15 Inland Empire,
CA 3,504 3.2% 93.1% 0.9% (7.2%) 5.3% (1.4%)
16 Orange Co 3,013 3.2% 95.8% 2.6% (2.7%) 5.3% 0.1%
17 DC Suburban
Maryland 4,739 3.0% 91.5% (1.2%) (2.4%) (0.4%) (1.9%)
18 Houston 5,282 2.3% 95.4% 3.1% (6.4%) 14.6% 0.6%
19 Minn/
St Paul 3,826 2.3% 93.5% 1.6% (4.4%) 6.3% (1.5%)
20 Tampa/
Ft Myers 3,976 1.9% 94.4% 1.7% (2.5%) 5.3% (0.8%)
----------------------------------------------------------
Top 20
Markets 116,735 82.1% 94.4% 1.4% (3.8%) 5.0% (0.8%)
All Other
Markets 46,461 17.9% 93.0% 0.9% (4.8%) 6.3% (0.9%)
----------------------------------------------------------
Total 163,196 100.0% 94.0% 1.3% (4.0%) 5.2% (0.8%)
==========================================================
(a) Includes the same units as Fourth Quarter 2005 vs. Fourth Quarter
2004 Same Store results for comparability purposes.
Portfolio as of December 31, 2005
Properties Units
---------- ----------
Wholly Owned Properties 834 175,501
Partially Owned Properties
(Consolidated) 35 6,004
Unconsolidated Properties 57 15,899
---------- ----------
926 197,404
Portfolio Rollforward 2005
Properties Units $ Millions Cap Rate
---------- ---------- ---------- ----------
12/31/2004 939 200,149
Acquisitions:
Rental Properties 41 12,059 $2,535.7 5.1%
Land Parcels - - $138.3
Dispositions:
Rental Properties (1) (50) (12,848) $(1,351.6) 5.0%
Condominium Units (6) (2,241) $(593.3)
Land Parcels - - $(108.3)
Completed Developments 2 405
Unit Configuration Changes - (120)
---------- ----------
12/31/2005 926 197,404
Portfolio Rollforward Q4 2005
Properties Units $ Millions Cap Rate
---------- ---------- ---------- ----------
9/30/2005 922 195,575
Acquisitions:
Rental Properties 15 4,891 $1,389.9 4.7%
Land Parcels - - $91.6
Dispositions:
Rental Properties (11) (2,636) $(274.6) 5.2%
Condominium Units (1) (652) $(165.2)
Land Parcels - - $(72.0)
Completed Developments 1 264
Unit Configuration Changes - (38)
---------- ----------
12/31/2005 926 197,404
(1) Cap rate was 5.5% excluding the sale of Water Terrace.
Portfolio Summary
As of December 31, 2005
% of % of 2006
Properties Units Total Stabilized
Total Totals Units NOI
Market ----------- ----------- ----------- -----------
1 New York Metro Area 17 5,245 2.7 7.4
2 South Florida 47 10,380 5.3 6.2
3 Los Angeles 31 6,479 3.3 6.1
4 DC Northern Virginia 19 6,806 3.4 5.9
5 Seattle/Tacoma 44 10,451 5.3 5.6
6 Boston 35 6,831 3.5 5.4
7 Atlanta 62 13,032 6.6 4.9
8 San Francisco Bay Area 26 6,249 3.2 4.6
9 Phoenix 36 10,381 5.3 4.6
10 Orlando 35 7,906 4.0 4.4
11 Denver 28 8,899 4.5 4.0
12 San Diego 11 3,486 1.8 3.3
13 Inland Empire CA 14 4,355 2.2 3.3
14 Dallas/Ft Worth 33 9,769 4.9 3.2
15 DC Suburban Maryland 25 5,559 2.8 3.1
16 New England
(excl Boston) 43 6,009 3.0 3.0
17 Orange County 8 3,013 1.5 2.8
18 Jacksonville 23 4,915 2.5 2.2
19 Houston 17 5,282 2.7 2.0
20 Minneapolis/St Paul 18 3,982 2.0 1.9
----------- ----------- ----------- -----------
Top 20 Total 572 139,029 70.5 83.9
21 Tampa/Ft Myers 27 4,694 2.3 1.7
22 Portland OR 12 4,153 2.1 1.7
23 Chicago 8 2,937 1.5 1.4
24 Raleigh/Durham 16 4,100 2.1 1.4
25 Austin 12 3,671 1.8 1.2
26 Southeastern Michigan 20 2,593 1.3 1.0
27 Nashville 11 2,729 1.4 1.0
28 Charlotte 11 3,391 1.7 0.9
29 Central Valley CA 10 1,595 0.8 0.5
30 Other EQR 21 5,494 2.8 1.4
31 Other Lexford 188 17,096 8.7 3.9
----------- ----------- ----------- -----------
Total 908 191,482 97.0 100.0
Condominium Conversion 17 2,229 1.1 0.0
Military Housing 1 3,693 1.9 0.0
----------- ----------- ----------- -----------
Grand Total 926 197,404 100.0 100.0
=========== =========== =========== ===========
Debt Summary as of December 31, 2005
Weighted
$ Millions (1) Average Rate (1)
---------------- ----------------
Secured $3,379 5.63%
Unsecured 4,212 5.89%
---------------- ----------------
Total $7,591 5.76%
Fixed Rate $5,700 6.32%
Floating Rate 1,891 3.75%
---------------- ----------------
Total $7,591 5.76%
Above Totals Include:
---------------------
Tax Exempt:
Fixed $135 4.02%
Floating 629 2.95%
---------------- ----------------
Total $764 3.25%
Unsecured Revolving Credit
Facilities $769 3.80%
(1) Net of the effect of any derivative instruments.
Debt Maturity Schedule as of December 31, 2005
Year $ Millions % of Total
-------------- -------------- --------------
2006 (1) $774 10.2%
2007 389 5.1%
2008 (2) 1,175 15.5%
2009 862 11.4%
2010 264 3.5%
2011 805 10.6%
2012 537 7.1%
2013 568 7.5%
2014 505 6.6%
2015+ 1,712 22.5%
-------------- --------------
Total $7,591 100.0%
(1) Includes $150.0 million of 7.57% unsecured debt with a final
maturity of 2026 that is putable in 2006. Also includes $215.0
million outstanding on the Company's short-term $600.0 million
unsecured revolving credit facility. This facility was
terminated on January 20, 2006 in conjunction with the
Company's $400.0 million unsecured note issuance which closed
on January 19, 2006.
(2) Includes $554.0 million outstanding on the Company's long-term
unsecured revolving credit facility, which matures on May 29,
2008.
Selected Unsecured Public Debt Covenants
December 31, December 31,
2005 2004
------------ ------------
Total Debt to Adjusted Total Assets (not to
exceed 60%) 44.9% 42.5%
Secured Debt to Adjusted Total Assets (not
to exceed 40%) 20.0% 20.8%
Consolidated Income Available For Debt
Service To Maximum Annual Service Charges
(must be at least 1.5 to 1) 2.84 2.97
Total Unsecured Assets to Unsecured Debt
(must be at least 150%) 261.4% 278.1%
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.
Capital Structure as of December 31, 2005
(Amounts in thousands except for share and per share amounts)
Secured Debt $3,379,289 45%
Unsecured Debt 3,442,784 45%
Lines of Credit 769,000 10%
------------ ----
Total Debt 7,591,073 100% 37%
Common Shares 289,536,344 93%
OP Units 20,424,245 7%
------------ ----
Total Shares and OP Units 309,960,589 100%
Common Share Equivalents
(see below) 1,650,760
------------
Total outstanding at
quarter-end 311,611,349
Common Share Price at
December 31, 2005 $39.12
------------
12,190,236 96%
Perpetual Preferred Equity
(see below) 515,500 4%
------------ ----
Total Equity 12,705,736 100% 63%
Total Market Capitalization $20,296,809 100%
Convertible Preferred Equity as of December 31, 2005
(Amounts in thousands except for share and per share amounts)
Annual
Dividend
Redemption Outstanding Liquidation Rate Per
Series Date Shares/Units Value Share/Unit
- ----------------- ------------- ------------ ------------ ------------
Preferred Shares:
7.00% Series E 11/1/98 529,096 $13,228 $1.75
7.00% Series H 6/30/98 34,734 868 1.75
Preference Interests:
7.625% Series H 3/23/06 190,000 9,500 3.8125
7.625% Series I 6/22/06 270,000 13,500 3.8125
7.625% Series J 12/14/06 230,000 11,500 3.8125
Junior Preference
Units:
8.00% Series B 7/29/09 7,367 184 2.00
------------ ------------
Total Convertible
Preferred Equity 1,261,197 $48,780
Annual Weighted Common
Dividend Average Conversion Share
Series Amount Rate Ratio Equivalents
- ----------------- ------------- ------------ ------------ ------------
Preferred Shares:
7.00% Series E $926 1.1128 588,778
7.00% Series H 61 1.4480 50,295
Preference Interests:
7.625% Series H 724 1.5108 287,052
7.625% Series I 1,029 1.4542 392,634
7.625% Series J 877 1.4108 324,484
Junior Preference
Units:
8.00% Series B 15 1.020408 7,517
------------ ------------
Total Convertible
Preferred Equity $3,632 7.44% 1,650,760
Perpetual Preferred Equity as of December 31, 2005
(Amounts in thousands except for share and per share amounts)
Redemption Outstanding Liquidation
Series Date Shares/Units Value
- ------------------------------ ------------- ------------ ------------
Preferred Shares:
9 1/8% Series C 9/9/06 460,000 $115,000
8.60% Series D 7/15/07 700,000 175,000
8.29% Series K 12/10/26 1,000,000 50,000
6.48% Series N 6/19/08 600,000 150,000
Preference Interests:
7.875% Series G 3/21/06 510,000 25,500
------------ ------------
Total Perpetual Preferred Equity 3,270,000 $515,500
Annual
Dividend Annual Weighted
Rate Per Dividend Average
Series Share/Unit Amount Rate
- ------------------------------ ------------- ------------ ------------
Preferred Shares:
9 1/8% Series C $22.81252 $10,494
8.60% Series D 21.50 15,050
8.29% Series K 4.145 4,145
6.48% Series N 16.20 9,720
Preference Interests:
7.875% Series G 3.9375 2,008
------------
Total Perpetual Preferred Equity $41,417 8.03%
Common Share and Operating Partnership Unit (OP Unit)
Weighted Average Amounts Outstanding
2005 2004 4Q05 4Q04
------------ ------------ ------------ ------------
Weighted Average
Amounts Outstanding
for Net Income
Purposes:
Common Shares -
basic 285,760,114 279,744,163 287,032,842 282,329,423
Shares issuable
from assumed
conversion/
vesting of:
- OP Units 20,819,217 20,939,266 20,758,907 20,601,420
- share
options/
restricted
shares 4,205,901 3,188,048 4,616,552 3,909,787
------------ ------------ ------------ ------------
Total Common Shares
and OP Units -
diluted 310,785,232 303,871,477 312,408,301 306,840,630
Weighted Average
Amounts Outstanding
for FFO Purposes:
OP Units -
basic 20,819,217 20,939,266 20,758,907 20,601,420
Common Shares -
basic 285,760,114 279,744,163 287,032,842 282,329,423
------------ ------------ ------------ ------------
Total Common Shares
and OP Units -
basic 306,579,331 300,683,429 307,791,749 302,930,843
Shares issuable
from assumed
conversion/vesting
of:
- convertible
preferred
shares/units 767,878 2,203,785 662,414 1,476,195
- share
options/
restricted
shares 4,205,901 3,188,048 4,616,552 3,909,787
------------ ------------ ------------ ------------
Total Common Shares
and OP Units -
diluted 311,553,110 306,075,262 313,070,715 308,316,825
Period Ending
Amounts
Outstanding:
OP Units 20,424,245
Common Shares 289,536,344
------------
Total Common
Shares and
OP Units 309,960,589
Unconsolidated Entities as of December 31, 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 1,360 12,206 (1)
------------- ------------- -------------
Company's ownership
percentage 25.0% 11.0%
Company's share of
outstanding debt (2) $121,200 $2,602 $123,802
------------- ------------- -------------
Operating information
for the year ended
12/31/05 (at 100%):
Operating revenue $94,025 $8,700 $102,725
Operating expenses 42,273 4,607 46,880
------------- ------------- -------------
Net operating income 51,752 4,093 55,845
Depreciation 21,901 1,856 23,757
Other 437 2 439
------------- ------------- -------------
Operating income 29,414 2,235 31,649
Interest and other
income 414 41 455
Interest:
Expense incurred,
net (37,443) (2,020) (39,463)
Amortization of
deferred
financing costs (617) (178) (795)
------------- ------------- -------------
Net (loss) income $(8,232) $78 $(8,154)
============= ============= =============
(1) Totals exclude Fort Lewis Military Housing consisting of one
property and 3,693 units, which is not accounted for under the
equity method of accounting, but is included in the Company's
property/unit counts at December 31, 2005.
(2) All debt is non-recourse to the Company.
Consolidated Development Projects as of December 31, 2005
(Amounts in thousands except for project and unit amounts)
Total Book
Total Value To
No. of Capital Date
Projects Location Units Cost (1) (1)(2)
- ----------------------------------------------------------------------
Projects Under
Development
- --------------
2400 M St Washington, D.C. 359 $111,947 $104,336
Union Station Los Angeles, CA 278 62,030 46,343
Bella Vista Woodland Hills, CA
III (3) 264 71,139 35,315
Vintage Ontario, CA 300 52,412 17,105
Highland Westwood, MA
Glen II (3) 102 21,620 1,997
Silver Spring Silver Spring, MD 457 145,224 19,091
---------------------------------
Total Projects Under Development 1,760 464,372 224,187
Completed Not
Stabilized:
- --------------
Indian Ridge Waltham, MA 264 47,032 44,840
---------------------------------
Total Projects Completed Not
Stabilized 264 47,032 44,840
Completed And
Stabilized
During the
Quarter:
- -------------
1210 Washington, D.C.
Massachusetts
Ave. (Sovereign
Park) 144 39,702 39,527
---------------------------------
Total Projects Completed And
Stabilized During the Quarter 144 39,702 39,527
---------------------------------
Total Projects 2,168 $551,106 $308,554
=================================
Percentage Percentage Percentage
Projects Location Completed Leased Occupied
- ----------------------------------------------------------------------
Projects Under
Development
- --------------
2400 M St Washington, D.C. 97% - -
Union Station Los Angeles, CA 73% - -
Bella Vista Woodland Hills, CA
III (3) 26% - -
Vintage Ontario, CA 9% - -
Highland Westwood, MA
Glen II (3) 1% - -
Silver Spring Silver Spring, MD 1% - -
Total Projects Under Development
Completed Not
Stabilized:
- --------------
Indian Ridge Waltham, MA 100% 78% 72%
Total Projects Completed Not
Stabilized
Completed And Stabilized During the
Quarter:
- -----------------------------------
1210 Washington, D.C.
Massachusetts
Ave. (Sovereign
Park) 100% 93% 92%
NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS
Total Capital Q4 2005
Cost (1) NOI
Projects Under Development $464,372 $(5)
Completed Not Stabilized 47,032 375
Completed And Stabilized During the
Quarter 39,702 566
Total Development/Newly Stabilized
NOI Contribution $551,106 $936
Estimated Estimated
Projects Location Completion Date Stabilization Date
- ----------------------------------------------------------------------
Projects Under
Development
- --------------
2400 M St Washington, D.C. 2Q 2006 3Q 2007
Union Station Los Angeles, CA 2Q 2006 4Q 2006
Bella Vista Woodland Hills, CA 4Q 2006 3Q 2007
III (3)
Vintage Ontario, CA 1Q 2007 4Q 2007
Highland Westwood, MA 1Q 2007 4Q 2007
Glen II (3)
Silver Spring Silver Spring, MD 1Q 2008 4Q 2009
Total Projects Under Development
Completed Not
Stabilized:
- --------------
Indian Ridge Waltham, MA Completed 3Q 2006
Total Projects Completed Not
Stabilized
Completed And Stabilized During the
Quarter:
- -----------------------------------
1210 Washington, D.C. Completed Stabilized
Massachusetts
Ave. (Sovereign
Park)
(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, $83.8 million has been
transferred to land and depreciable property and $224.8 million is
currently reflected as construction in progress ("CIP"). The
remaining $180.5 million of CIP represents land held for future
development and related costs and land and related development
costs for uncompleted condominium projects. Of the $242.6 million
remaining to be invested, $55.5 million will be funded through
third party construction mortgages.
(3) Projects are wholly owned. All others are partially owned.
Consolidated Condominium Conversion Projects as of December 31, 2005
(Amounts in thousands except for project and unit amounts)
Units
-----------------------------
Available for
Sale
----------------
Estimated
Project Close Sold
Start Out Units Not Avail-
Projects Location Date(1) Date Total Closed Closed able
- ----------------------------------------------------------------------
For Sale
- --------
Four Lakes Lisle, IL Q4 2001 Q1 2006 942 896 16 30
Venetian I Phoenix, AZ Q1 2004 Q1 2006
& II 264 263 1 -
Atlas (2) Washington, Q4 2004 Q1 2006
DC 141 135 3 3
Grand Plantation, Q4 2004 Q1 2006
Marquis FL 198 182 16 -
Tuscany Scottsdale, Q4 2004 Q1 2006
Villas AZ 180 178 2 -
Fairway Pembroke Q1 2005 Q2 2006
Greens Pines, FL 152 103 41 8
Magnuson Seattle, WA Q1 2005 Q4 2006
Pointe 105 35 15 55
Timber Ridge Woodin- Q1 2005 Q1 2007
ville, WA 203 28 21 154
Milano Scottsdale, Q2 2005 Q4 2006
Terrace AZ 224 10 86 128
Braewood Bothell, WA Q2 2005 Q4 2006 84 - - 84
Fifth Avenue Seattle, WA Q2 2005 Q4 2006
North 62 - - 62
South Palm Tamarac, FL Q2 2005 Q1 2007
Place 208 - - 208
Parkside Seattle, WA Q4 2005 Q4 2006 44 - - 44
Chantecleer Naperville, Q4 2005 Q4 2007
Lakes IL 304 - - 304
Oaks at Falls Q4 2005 Q2 2007
Falls Church, VA
Church 176 - - 176
Bella Vista Phoenix, AZ Q4 2005 Q2 2007 248 - - 248
Regency Park Centre- Q4 2005 Q3 2007
ville, VA 252 - - 252
Alameda Scottsdale, Q4 2005 Q3 2007
Ranch AZ 272 - - 272
-----------------------------
4,059 1,830 201 2,028
Closed Out
- ----------
Country Club Mill Creek, Q1 2004 Q2 2005
Estates WA 151 151 - -
Grand Oasis Coral Q2 2004 Q2 2005
Springs,
FL 198 198 - -
Sterling Bellevue, Q2 2004 Q2 2005
Heights WA 116 116 - -
Verona Scottsdale, Q2 2004 Q2 2005
AZ 108 108 - -
Radius at Washington, Q2 2004 Q3 2005
Logan DC
Circle (2) 170 170 - -
Riviera Coconut Q2 2005 Q3 2005
Palms (3) Creek, FL 248 248 - -
Watermarke Irvine, CA Q3 2004 Q4 2005
(2) 535 535 - -
Projects closed out prior to 2005 388 388 - -
-----------------------------
1,914 1,914 - -
Totals 25 5,973 3,744 201 2,028
=============================
2005 YTD Activity
-----------------------------
Estimated
Project Close FFO
Start Out Units Sales Incremental
Projects Location Date(1) Date Closed Price Gain on Sale
- ----------------------------------------------------------------------
For Sale
- --------
Four Lakes Lisle, IL Q4 2001 Q1 2006 249 $ 37,834 $ 4,646
Venetian I Phoenix, AZ Q1 2004 Q1 2006
& II 170 33,261 9,368
Atlas (2) Washington, Q4 2004 Q1 2006
DC 135 76,244 7,371
Grand Plantation, Q4 2004 Q1 2006
Marquis FL 182 32,375 10,045
Tuscany Scottsdale, Q4 2004 Q1 2006
Villas AZ 178 30,618 10,093
Fairway Pembroke Q1 2005 Q2 2006
Greens Pines, FL 103 20,630 5,845
Magnuson Seattle, WA Q1 2005 Q4 2006
Pointe 35 7,794 1,688
Timber Ridge Woodinville,Q1 2005 Q1 2007
WA 28 3,915 869
Milano Scottsdale, Q2 2005 Q4 2006
Terrace AZ 10 2,157 681
Braewood Bothell, WA Q2 2005 Q4 2006 - - -
Fifth Avenue Seattle, WA Q2 2005 Q4 2006
North - - -
South Palm Tamarac, FL Q2 2005 Q1 2007
Place - - -
Parkside Seattle, WA Q4 2005 Q4 2006 - - -
Chantecleer Naperville, Q4 2005 Q4 2007
Lakes IL - - -
Oaks at Falls Q4 2005 Q2 2007
Falls Church, VA - - -
Church
Bella Vista Phoenix, AZ Q4 2005 Q2 2007 - - -
Regency Park Centreville,Q4 2005 Q3 2007
VA - - -
Alameda Scottsdale, Q4 2005 Q3 2007
Ranch AZ - - -
-----------------------------
1,090 244,828 50,606
Closed Out
- ----------
Country Club Mill Creek, Q1 2004 Q2 2005
Estates WA 86 14,883 2,834
Grand Oasis Coral Q2 2004 Q2 2005
Springs, FL 89 12,875 3,418
Sterling Bellevue, Q2 2004 Q2 2005
Heights WA 76 16,083 2,992
Verona Scottsdale, Q2 2004 Q2 2005
AZ 108 16,092 3,314
Radius at Washington, Q2 2004 Q3 2005
Logan DC
Circle (2) 54 21,837 3,815
Riviera Coconut Q2 2005 Q3 2005
Palms (3) Creek, FL 248 45,880 4,560
Watermarke Irvine, CA Q3 2004 Q4 2005
(2) 490 220,827 29,048
Projects closed out prior
to 2005 - - (226)
-----------------------------
1,151 348,477 49,755
Totals 25 2,241 $593,305 $ 100,361
=============================
Gross incremental gain on sales of
condominium units $ 100,361
Provision for income
taxes (8,750)
------------
Net incremental gain on sales of
condominium units 91,611
Property management and general and
administrative expenses (3,125)
Discontinued operating
income 839
------------
Net Income - Condominium
Division (4) $ 89,325
============
4Q 2005
-----------------------------
Estimated
Project Close FFO
Start Out Units Sales Incremental
Projects Location Date(1) Date Closed Price Gain on Sale
- ----------------------------------------------------------------------
For Sale
- ------------
Four Lakes Lisle, IL Q4 2001 Q1 2006 83 $ 12,841 $ 755
Venetian I Phoenix, AZ Q1 2004 Q1 2006
& II 45 8,771 2,489
Atlas (2) Washington, Q4 2004 Q1 2006
DC 29 16,113 1,513
Grand Plantation, Q4 2004 Q1 2006
Marquis FL 111 20,098 6,230
Tuscany Scottsdale, Q4 2004 Q1 2006
Villas AZ 99 17,572 5,908
Fairway Pembroke Q1 2005 Q2 2006
Greens Pines, FL 103 20,630 5,845
Magnuson Seattle, WA Q1 2005 Q4 2006
Pointe 35 7,794 1,688
Timber Ridge Woodin- Q1 2005 Q1 2007
ville, WA 28 3,915 869
Milano Scottsdale, Q2 2005 Q4 2006
Terrace AZ 10 2,157 681
Braewood Bothell, WA Q2 2005 Q4 2006 - - -
Fifth Avenue Seattle, WA Q2 2005 Q4 2006
North - - -
South Palm Tamarac, FL Q2 2005 Q1 2007
Place - - -
Parkside Seattle, WA Q4 2005 Q4 2006 - - -
Chantecleer Naperville, Q4 2005 Q4 2007
Lakes IL - - -
Oaks at Falls Q4 2005 Q2 2007
Falls Church, VA
Church - - -
Bella Vista Phoenix, AZ Q4 2005 Q2 2007 - - -
Regency Park Centre- Q4 2005 Q3 2007
ville, VA - - -
Alameda Scottsdale, Q4 2005 Q3 2007
Ranch AZ - - -
-----------------------------
543 109,891 25,978
Closed Out
- ------------
Country Club Mill Creek, Q1 2004 Q2 2005
Estates WA - - (16)
Grand Oasis Coral Q2 2004 Q2 2005
Springs,
FL - - (12)
Sterling Bellevue, Q2 2004 Q2 2005 1`
Heights WA - -
Verona Scottsdale, Q2 2004 Q2 2005
AZ - - -
Radius at Washington, Q2 2004 Q3 2005
Logan DC
Circle (2) - - 139
Riviera Coconut Q2 2005 Q3 2005
Palms (3) Creek, FL - - (8)
Watermarke Irvine, CA Q3 2004 Q4 2005
(2) 109 55,262 11,888
Projects closed out prior to 2005 - - (123)
-----------------------------
109 55,262 11,869
Totals 25 652 $165,153 $ 37,847
=============================
Gross incremental gain on sales of
condominium units $ 37,847
Provision for income
taxes (2,903)
------------
Net incremental gain on sales of
condominium units 34,944
Property management and general and
administrative expenses (951)
Discontinued operating
income (354)
------------
Net Income - Condominium
Division (4) $ 33,639
============
(1) Project start date represents the date that each respective
property was acquired by the taxable REIT subsidiary.
(2) Partially owned projects; incremental gain on sale represents
portion attributable to the Company.
(3) Riviera Palms was purchased on May 4, 2005 and was disposed of in
its entirety on September 15, 2005
(4) Excludes interest income and interest expense specific to
condominium conversion projects.
Maintenance Expenses and Capitalized Improvements to Real Estate
For the Year Ended December 31, 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) 145,305 $89,615 $617 $80,224 $552 $169,839 $1,169
New Acquisition
Properties (7) 27,669 15,885 763 11,215 538 27,100 1,301
Other (8) 8,531 14,387 11,367 25,754
--------- --------- --------- ---------
Total 181,505 $119,887 $102,806 $222,693
========= ========= ========= =========
------------------------------------------------------
Capitalized Improvements to Real Estate
------------------------------------------------------
Avg. Building Avg. Avg.
Replacements Per Improvements Per Per
(4) Unit (5) Unit Total Unit
---------------- ----- ----------- ---- ------- ------
Established
Properties (6) $55,508 $382 $89,252 $614 $144,760 $996
New Acquisition
Properties (7) 5,626 270 19,508 937 25,134 1,207
Other (8) 23,421 39,185 62,606
---------------- ----------- ---------
Total $84,555 $147,945 $232,500
================ =========== =========
----------------------------------
Total Expenditures
----------------------------------
Avg.
Grand Per
Total Unit
----------- --------
Established
Properties (6) $314,599 $2,165
New Acquisition
Properties (7) 52,234 2,508
Other (8) 88,360
-----------
Total $455,193
===========
(1) Total units exclude 15,899 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 20,828 units.
(8) Includes properties either Partially Owned or sold during the
period, commercial space, condominium conversions and $6.8
million included in building improvements spent on nine specific
assets related to major renovations and repositioning of these
assets.
Discontinued Operations
(Amounts in thousands)
Year Ended Quarter Ended
December 31, December 31,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
REVENUES
Rental income $94,121 $199,587 $8,422 $43,470
--------- --------- --------- ---------
Total revenues 94,121 199,587 8,422 43,470
--------- --------- --------- ---------
EXPENSES (1)
Property and maintenance 38,373 70,782 5,987 14,918
Real estate taxes and insurance 13,348 24,284 1,359 5,497
Property management 389 629 51 209
Depreciation 20,818 51,209 1,055 11,377
General and administrative 361 341 (93) 341
--------- --------- --------- ---------
Total expenses 73,289 147,245 8,359 32,342
--------- --------- --------- ---------
Discontinued operating income 20,832 52,342 63 11,128
Interest and other income 1,293 184 576 41
Interest (2):
Expense incurred, net (9,853) (15,200) (20) (4,360)
Amortization of deferred
financing costs (596) (1,219) - (342)
--------- --------- --------- ---------
Discontinued operations, net $11,676 $36,107 $619 $6,467
========= ========= ========= =========
(1) Includes expenses paid in the current period for properties sold
in prior periods related to the Company's period of ownership.
(2) Includes only interest expense specific to secured mortgage notes
payable for properties sold.
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.
2006 Earnings Guidance (per share diluted)
------------------------------------------
Q1 2006 2006
------- ----
Expected EPS (1) $0.62 to $0.67 $2.73 to $2.93
Add: Expected depreciation expense 0.43 1.71
Less: Expected net gain on sales (1) (0.54) (2.14)
---------------- ----------------
Expected FFO (2) $0.51 to $0.56 $2.30 to $2.50
================ ================
Same-Store Assumptions
----------------------
2006
----
Physical occupancy 94.5%
Revenue change 4.75% to 5.75%
Expense change 4.25% to 5.25%
NOI change 4.50% to 6.50%
Acquisitions $1.5 billion
Dispositions $1.5 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.
CONTACT: Equity Residential
Marty McKenna, 312-928-1901