Exhibit 99.1
Equity Residential Reports Second Quarter Results;
Second Quarter Same-Store NOI Increases 7.6 Percent
CHICAGO--(BUSINESS WIRE)--Aug. 1, 2006--Equity Residential
(NYSE:EQR) today reported results for the quarter and six months ended
June 30, 2006. All per share results are reported on a fully diluted
basis.
"Our second quarter performance, with same-store NOI growth of 7.6
percent, reflects both the continuing strength of the multifamily
business, as well as the progress we have made in transforming our
portfolio," said David J. Neithercut, Equity Residential's President
and CEO. "We are creating value for our shareholders by focusing on
markets and properties which will generate better long term returns as
evidenced by the second quarter same-store results of our 2004 and
first quarter 2005 acquisitions, which achieved 12.5 percent and 16.8
percent NOI growth, respectively."
Second Quarter 2006
For the quarter ended June 30, 2006, the company reported earnings
of $0.51 per share compared to $0.44 per share in the second quarter
of 2005. The quarterly increase is primarily attributable to higher
gains on property sales as well as the items discussed below.
Funds from Operations (FFO) for the quarter ended June 30, 2006
were $0.61 per share compared to $0.56 per share in the same period of
2005. The increase is primarily attributable to continued improvement
in "same-store" net operating income and excellent growth from new
acquisitions.
On June 28, 2006, the company announced that it had entered into
an agreement to sell its Lexford Housing Division. At that time, the
company revised its guidance range for second quarter FFO to $0.56 to
$0.58 per share from $0.55 to $0.60 per share due to an anticipated
second quarter 2006 charge of $0.02 per share related to the early
extinguishment of certain debt encumbering that portfolio. That charge
will be incurred when the debt is extinguished, which is anticipated
to occur concurrently with the closing of the sale, expected in the
fourth quarter of 2006. As a result of the above as well as very
positive property performance, the reported second quarter FFO of
$0.61 per share exceeded the high end of the company's original
guidance range by $0.01 per share.
Total revenues from continuing operations for the quarter were
$491.9 million compared to $415.2 million in the second quarter of
2005. The primary components of this $76.7 million increase in
revenues include the properties acquired in 2005 and early 2006 as
well as strong same store performance.
Six Months Ended June 30, 2006
For the six months ended June 30, 2006, the company reported
earnings of $1.76 per share compared to $1.19 per share in the same
period of 2005.
FFO for the six months ended June 30, 2006 were $1.17 per share
compared to $1.30 per share in the same period of 2005. This decrease
was primarily attributable to a $0.18 per share decrease in other
income due to the gain recognized in 2005 from eBay's acquisition of
the company's interest in Rent.com.
Total revenues from continuing operations for the six months ended
June 30, 2006 were $963.7 million compared to $814.3 million in the
same period of 2005.
Same-Store Results
On a same-store second quarter to second quarter comparison, which
includes 132,093 units, revenues increased 5.9 percent, expenses
increased 3.5 percent and NOI increased 7.6 percent. The increase in
same-store revenues was driven primarily by increases in rental rate
and a decrease in concessions.
On a same-store six-month to six-month comparison, which includes
129,965 units, revenues increased 6.0 percent, expenses increased 4.5
percent and NOI increased 7.0 percent.
All same-store results exclude the Lexford Housing Division.
Same-Store and FFO Guidance
"The continued improvement in the performance of our properties in
the second quarter and first six months of the year and our new
expectations for the second half of the year lead us to raise our
guidance for same-store revenues and NOI and lower our expense
guidance for the year," said Mr. Neithercut. "This guidance is not
affected by the removal of the Lexford portfolio from our same-store
results. The Lexford revenue and expense numbers are tracking
similarly to our conventional same-store portfolio."
"We are leaving unchanged our 2006 FFO guidance of $2.30 to $2.50
per share, because the sale of the Lexford portfolio, which is a very
positive step in our portfolio reconfiguration, will result in $0.05
per share of FFO dilution for the full year and result in the company
generating FFO in the middle of that range. It is important to note,
however, that this dilution will be partially offset by a reduction in
capital expenditures."
Same-Store Guidance Assumptions
-------------------------------
New Previous
--- --------
Revenues 5.25% to 5.75% 4.75% to 5.75%
Expenses 2.5% to 3.5% 4.25% to 5.25%
NOI 6.5% to 8.0% 4.5% to 6.5%
Portfolio Reconfiguration
During the second quarter of 2006, the company acquired seven
properties, consisting of 2,143 units, for an aggregate purchase price
of $430.6 million at an average capitalization (cap) rate of 4.8
percent, and three land parcels for $62.3 million.
Also during the quarter, the company sold 13 properties,
consisting of 2,418 units, for an aggregate sale price of $229.6
million at an average cap rate of 5.3 percent generating an unlevered
internal rate of return (IRR) of 11.1 percent. In addition, the
company sold 354 condominium units for $72.1 million and one land
parcel for $0.9 million.
In the first six months of 2006, the company acquired 18
properties, consisting of 4,922 units, for an aggregate purchase price
of $937.2 million at an average cap rate of 4.9 percent, and five land
parcels for $76.5 million.
During the six months ended June 30, 2006, the company sold 38
properties, consisting of 10,528 units, for an aggregate sale price of
$1.0 billion at an average cap rate of 5.5 percent generating an
unlevered IRR of 12.2 percent. In addition, the company sold 525
condominium units for $107.2 million and one land parcel for $0.9
million.
Lexford Housing Division Sale
On June 28, 2006, Equity Residential announced that it agreed to
sell its Lexford Housing Division, comprised of 289 properties
consisting of 27,115 apartment units and a property management
business based in Columbus, Ohio, for a cash purchase price of $1.086
billion. The purchase price is equivalent to $40,052 per apartment
unit and a cap rate, after capital replacements of $400 per apartment
unit, on 2006 net operating income of 7.4 percent. The sale is
expected to close in the fourth quarter of 2006 and generate a total
book gain of approximately $430 million and an unlevered IRR of 15
percent.
Third Quarter 2006 Results
Equity Residential expects to announce third quarter 2006 results
on Tuesday, October 31, 2006 and host a conference call to discuss
those results at 1:00 p.m. CT on Wednesday, November 1, 2006.
Equity Residential is the largest publicly traded apartment
company in America. Nationwide, Equity Residential owns or has
investments in 898 properties, in 31 states and the District of
Columbia, consisting of 191,582 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 market 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 that become untrue because of
subsequent events.
A live webcast of the company's conference call discussing these
results and outlook for 2006 will take place tomorrow, Wednesday,
August 2, 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 webcast 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,
--------------------- ---------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
REVENUES
Rental income $958,911 $808,922 $489,619 $412,207
Fee and asset
management 4,807 5,362 2,320 3,023
---------- ---------- ---------- ----------
Total revenues 963,718 814,284 491,939 415,230
---------- ---------- ---------- ----------
EXPENSES
Property and
maintenance 252,447 217,248 127,549 111,134
Real estate taxes and
insurance 97,079 86,632 49,354 43,371
Property management 46,664 41,407 23,067 20,796
Fee and asset
management 4,326 4,176 2,158 2,076
Depreciation 271,924 212,238 139,906 107,832
General and
administrative 23,190 31,502 9,584 13,758
---------- ---------- ---------- ----------
Total expenses 695,630 593,203 351,618 298,967
---------- ---------- ---------- ----------
Operating income 268,088 221,081 140,321 116,263
Interest and other
income 4,365 62,270 2,011 2,790
Interest:
Expense incurred,
net (209,049) (173,728) (104,117) (89,167)
Amortization of
deferred
financing costs (4,513) (3,230) (1,770) (1,566)
---------- ---------- ---------- ----------
Income before allocation to
Minority Interests, loss
from investments in
unconsolidated entities, net
gain (loss) on sales of
unconsolidated entities and
land parcels and
discontinued
operations 58,891 106,393 36,445 28,320
Allocation to Minority
Interests:
Operating
Partnership, net (2,305) (5,685) (1,673) (823)
Preference Interests
and Units (1,556) (5,279) (457) (1,391)
Partially Owned
Properties (2,068) 2,296 (547) 819
Premium on redemption
of Preference
Interests (683) (4,112) (9) (2,384)
Loss from investments in
unconsolidated entities (375) (215) (145) (157)
Net gain on sales of
unconsolidated entities 352 124 23 -
Net gain (loss) on sales
of land parcels 246 10,366 246 (2)
---------- ---------- ---------- ----------
Income from continuing
operations, net of
minority interests 52,502 103,888 33,883 24,382
Discontinued operations,
net of minority interests 485,470 264,495 126,274 116,962
---------- ---------- ---------- ----------
Net income 537,972 368,383 160,157 141,344
Preferred distributions (20,168) (26,043) (10,073) (13,018)
---------- ---------- ---------- ----------
Net income available to
Common Shares $517,804 $342,340 $150,084 $128,326
========== ========== ========== ==========
Earnings per share -
basic:
Income from continuing
operations available to
Common Shares $0.11 $0.27 $0.08 $0.04
========== ========== ========== ==========
Net income available to
Common Shares $1.79 $1.20 $0.52 $0.45
========== ========== ========== ==========
Weighted average Common
Shares outstanding 289,172 284,899 289,460 285,283
========== ========== ========== ==========
Earnings per share -
diluted:
Income from continuing
operations available to
Common Shares $0.11 $0.27 $0.08 $0.04
========== ========== ========== ==========
Net income available to
Common Shares $1.76 $1.19 $0.51 $0.44
========== ========== ========== ==========
Weighted average Common
Shares outstanding 314,420 309,362 314,698 309,979
========== ========== ========== ==========
Distributions declared per
Common Share outstanding $0.8850 $0.8650 $0.4425 $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,
--------------------- ---------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Net income $537,972 $368,383 $160,157 $141,344
Allocation to Minority
Interests - Operating
Partnership, net 2,305 5,685 1,673 823
Adjustments:
Depreciation 271,924 212,238 139,906 107,832
Depreciation - Non-
real estate additions (3,682) (2,685) (1,886) (1,391)
Depreciation -
Partially Owned and
Unconsolidated
Properties 2,563 (638) 1,013 (387)
Net gain on sales of
unconsolidated
entities (352) (124) (23) -
Discontinued
operations:
Depreciation 25,429 47,030 10,724 22,368
Gain on sales of
discontinued
operations, net
of minority
interests (469,246) (231,952) (121,281) (100,815)
Net incremental
gain on sales of
condominium
units 18,553 29,036 11,426 15,554
Minority
Interests -
Operating
Partnership 1,143 2,374 351 1,178
---------- ---------- ---------- ----------
FFO (1)(2) 386,609 429,347 202,060 186,506
Preferred distributions (20,168) (26,043) (10,073) (13,018)
---------- ---------- ---------- ----------
FFO available to Common
Shares and OP Units -
basic $366,441 $403,304 $191,987 $173,488
========== ========== ========== ==========
FFO available to Common
Shares and OP Units -
diluted $366,917 $403,962 $192,217 $173,806
========== ========== ========== ==========
FFO per share and OP Unit
- basic $1.18 $1.32 $0.62 $0.57
========== ========== ========== ==========
FFO per share and OP Unit
- diluted $1.17 $1.30 $0.61 $0.56
========== ========== ========== ==========
Weighted average Common
Shares and OP Units
outstanding - basic 309,678 305,793 310,017 306,190
========== ========== ========== ==========
Weighted average Common
Shares and OP Units
outstanding - diluted 315,034 310,209 315,289 310,800
========== ========== ========== ==========
(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,
2006 2005
------------- -------------
ASSETS
Investment in real estate
Land $3,003,791 $2,848,601
Depreciable property 12,763,817 13,336,636
Projects under development 242,617 240,980
Land held for development 208,437 164,153
------------- -------------
Investment in real estate 16,218,662 16,590,370
Accumulated depreciation (2,772,806) (2,888,140)
------------- -------------
Investment in real estate, net 13,445,856 13,702,230
Real estate held for sale 635,270 -
Cash and cash equivalents 72,172 88,828
Investments in unconsolidated entities 4,733 6,838
Rents receivable 879 789
Deposits - restricted 95,855 77,093
Escrow deposits - mortgage 28,831 35,225
Deferred financing costs, net 40,628 40,636
Goodwill, net 30,000 30,000
Other assets 103,649 117,306
------------- -------------
Total assets $14,457,873 $14,098,945
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $3,096,427 $3,379,289
Mortgage notes payable, held for sale 207,029 -
Notes, net 3,838,697 3,442,784
Lines of credit 547,000 769,000
Accounts payable and accrued expenses 113,855 108,855
Accrued interest payable 86,527 78,441
Rents received in advance and other
liabilities 290,205 302,418
Security deposits 60,111 54,823
Distributions payable 145,226 145,812
------------- -------------
Total liabilities 8,385,077 8,281,422
------------- -------------
Commitments and contingencies
Minority Interests:
Operating Partnership 367,081 345,034
Preference Interests and Units 11,684 60,184
Partially Owned Properties 20,163 16,965
------------- -------------
Total Minority Interests 398,928 422,183
------------- -------------
Shareholders' equity:
Preferred Shares of beneficial
interest, $0.01 par value;
100,000,000 shares authorized;
3,264,550 shares issued and
outstanding as of June 30, 2006
and 3,323,830 shares issued and
outstanding as of December 31, 2005 502,614 504,096
Common Shares of beneficial interest,
$0.01 par value; 1,000,000,000 shares
authorized; 290,955,828 shares issued
and outstanding as of June 30, 2006
and 289,536,344 shares issued and
outstanding as of December 31, 2005 2,910 2,895
Paid in capital 5,269,054 5,253,188
Distributions in excess of accumulated
earnings (89,783) (350,367)
Accumulated other comprehensive loss (10,927) (14,472)
------------- -------------
Total shareholders' equity 5,673,868 5,395,340
------------- -------------
Total liabilities and shareholders'
equity $14,457,873 $14,098,945
============= =============
Second Quarter 2006 vs. Second Quarter 2005
Quarter over Quarter Same-Store Results
$ in Millions - 132,093 Same-Store Units (excludes Lexford)
Description Revenues Expenses NOI (1)
------------- ---------- --------- ---------
Q2 2006 $411.6 $158.8 $252.8
Q2 2005 $388.5 $153.5 $235.0
--------- --------- ---------
Change $23.1 $5.3 $17.8
========= ========= =========
Change 5.9% 3.5% 7.6%
Second Quarter 2006 vs. First Quarter 2006
Sequential Quarter over Quarter Same-Store Results
$ in Millions - 140,042 Same-Store Units (excludes Lexford)
Description Revenues Expenses NOI (1)
------------- ---------- --------- ---------
Q2 2006 $448.2 $172.6 $275.6
Q1 2006 $440.1 $174.5 $265.6
--------- --------- ---------
Change $8.1 $(1.9) $10.0
========= ========= =========
Change 1.8% (1.1%) 3.8%
June YTD 2006 vs. June YTD 2005
YTD over YTD Same-Store Results
$ in Millions - 129,965 Same-Store Units (excludes Lexford)
Description Revenues Expenses NOI (1)
------------- ---------- --------- ---------
YTD 2006 $802.5 $314.3 $488.2
YTD 2005 $757.2 $300.8 $456.4
--------- --------- ---------
Change $45.3 $13.5 $31.8
========= ========= =========
Change 6.0% 4.5% 7.0%
Same-Store Statistics (excludes Lexford)
Occupancy Turnover Occupancy Turnover Occupancy Turnover
--------- -------- --------- -------- --------- --------
Q2 Q2 YTD
2006 94.6% 16.6% 2006 94.6% 16.6% 2006 94.6% 30.5%
Q2 Q1 YTD
2005 94.6% 17.3% 2006 94.5% 13.9% 2005 94.4% 31.7%
--------- -------- -------- -------- -------- --------
Change 0.0% (0.7%) Change 0.1% 2.7% Change 0.2% (1.2%)
(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.
All same store results exclude the Lexford Housing Division.
Same Store NOI Reconciliation
Second Quarter 2006 vs. Second Quarter 2005
The following table presents a reconciliation of operating income per
the consolidated statements of operations to NOI for the Second
Quarter 2006 Same Store Properties:
Quarter Ended June 30,
----------------------
2006 2005
----------- ----------
(Amounts in millions)
Operating income $140.3 $116.3
Adjustments:
Insurance (1) (2.0) -
Non-same store operating results (34.9) (2.0)
Fee and asset management revenue (2.3) (3.0)
Fee and asset management expense 2.2 2.1
Depreciation 139.9 107.8
General and administrative 9.6 13.8
----------- ----------
Same store NOI $252.8 $235.0
=========== ==========
Same Store NOI Reconciliation
June YTD 2006 vs. June YTD 2005
The following table presents a reconciliation of operating income per
the consolidated statements of operations to NOI for the Six-Month
2006 Same Store Properties:
Six Months Ended
June 30,
---------------------
2006 2005
---------- ----------
(Amounts in millions)
Operating income $268.1 $221.1
Adjustments:
Insurance (1) (4.9) -
Non-same store operating results (69.6) (7.2)
Fee and asset management revenue (4.8) (5.4)
Fee and asset management expense 4.3 4.2
Depreciation 271.9 212.2
General and administrative 23.2 31.5
---------- ----------
Same store NOI $488.2 $456.4
========== ==========
(1) Amount represents additional insurance reimbursements.
Second Quarter 2006 vs. Second Quarter 2005
Same-Store Results by Market
--------------------------------
Increase (Decrease) from Prior
Quarter
-------------------------------------------------------------------
2Q 2Q 2006
2006 Weighted
% of Average
Actual Occupancy
Markets Units NOI % Revenues Expenses NOI Occupancy
-------------------------------------------------------------------
1 Los
Angeles 6,079 7.4% 93.8% 6.3% 3.3% 7.7% (1.4%)
2 Boston 5,761 6.6% 94.2% 1.7% 8.0% (2.0%) 0.1%
3 South
Florida 7,398 6.5% 93.3% 9.7% 2.5% 14.8% (1.4%)
4 San
Francisco
Bay Area 5,990 6.4% 96.3% 6.3% 2.7% 8.4% 0.8%
5 DC Suburban
Virginia 5,183 5.7% 96.3% 5.5% 1.0% 7.6% 0.0%
6 Phoenix 9,247 5.6% 94.3% 10.9% 3.6% 16.0% 0.4%
7 New York
Metro
Area 3,406 5.6% 96.8% 8.5% (0.3%) 13.6% 0.3%
8 Seattle/
Tacoma 7,700 5.5% 96.0% 7.5% 5.1% 9.0% 0.3%
9 Atlanta 8,945 5.0% 95.1% 4.0% 4.5% 3.7% 0.0%
10 Denver 7,425 4.3% 94.4% 3.9% 4.1% 3.7% 0.4%
11 San Diego 3,486 4.0% 93.4% 4.8% 5.4% 4.5% (1.7%)
12 Dallas/Ft
Worth 8,339 4.0% 94.8% 4.0% (0.9%) 9.0% (0.1%)
13 Orlando 5,465 4.0% 94.7% 10.2% 4.7% 13.6% (0.8%)
14 New
England
(excl
Boston) 5,823 3.5% 93.8% 2.1% 9.1% (3.5%) 0.2%
15 Orange Co 3,013 3.4% 94.2% 7.0% 4.2% 8.3% (0.9%)
16 Inland
Empire, CA 3,504 3.4% 92.7% 4.4% 4.3% 4.5% (2.0%)
17 DC
Suburban
Maryland 4,325 3.1% 93.6% 4.1% 4.9% 3.5% (0.6%)
18 Houston 5,282 2.4% 93.5% 6.8% 4.4% 9.6% 1.6%
19 Portland 3,409 1.9% 95.3% 3.3% 4.3% 2.5% 0.9%
20 Raleigh/
Durham 3,708 1.8% 95.6% 6.8% 3.4% 9.4% 1.7%
---------------------------------------------------------
Top 20
Markets 113,488 90.1% 94.6% 6.0% 3.8% 7.3% (0.1%)
All Other
Markets 18,605 9.9% 94.7% 5.8% 1.0% 9.9% 0.4%
---------------------------------------------------------
Total 132,093 100.0% 94.6% 5.9% 3.5% 7.6% 0.0%
=========================================================
Note: All same store results exclude the Lexford Housing Division.
Second Quarter 2006 vs. First Quarter 2006
Sequential Same-Store Results by Market
--------------------------------
Increase (Decrease) from Prior
Quarter
-------------------------------------------------------------------
2Q 2Q 2006
2006 Weighted
% of Average
Actual Occupancy
Markets Units NOI % Revenues Expenses NOI Occupancy
-------------------------------------------------------------------
1 New York
Metro
Area 5,153 8.5% 96.7% 2.6% (4.3%) 6.7% 1.1%
2 Los
Angeles 6,429 7.1% 93.7% 1.0% (2.8%) 3.0% (1.0%)
3 DC
Suburban
Virginia 6,662 6.4% 95.7% 3.7% (0.6%) 6.0% 1.4%
4 Seattle/
Tacoma 8,532 6.4% 96.0% 3.9% (2.5%) 8.1% 1.4%
5 South
Florida 7,662 6.2% 93.2% (0.7%) (0.5%) (0.8%) (3.1%)
6 Boston 5,761 6.0% 94.2% 0.3% (5.1%) 4.2% 0.9%
7 San
Francisco
Bay Area 5,990 5.9% 96.3% 3.5% (5.0%) 8.6% 1.2%
8 Phoenix 9,247 5.2% 94.3% 1.4% 3.8% 0.1% (1.6%)
9 Atlanta 9,275 4.8% 95.1% 2.0% (1.3%) 4.6% 0.3%
10 Orlando 6,473 4.3% 94.4% 1.9% 4.3% 0.5% (0.4%)
11 Denver 7,775 4.2% 94.5% 1.0% 3.8% (0.6%) (0.4%)
12 San Diego 3,486 3.7% 93.4% 1.0% (0.1%) 1.6% (1.4%)
13 Dallas/Ft
Worth 8,339 3.6% 94.8% 1.3% 1.1% 1.4% 0.6%
14 New
England
(excl
Boston) 5,823 3.2% 93.8% 4.1% (4.0%) 12.6% 2.7%
15 DC
Suburban
Maryland 4,837 3.2% 92.7% 2.6% (5.0%) 8.0% (0.4%)
16 Orange Co 3,013 3.2% 94.2% 1.5% (2.0%) 3.2% (1.1%)
17 Inland
Empire,
CA 3,504 3.1% 92.7% 2.2% (1.1%) 3.9% 0.1%
18 Houston 5,282 2.2% 93.5% 0.3% 4.1% (3.4%) (0.8%)
19 Jackson-
ville 3,659 2.0% 95.0% 0.9% 0.0% 1.5% (0.1%)
20 Portland 3,409 1.7% 95.1% 1.8% 2.0% 1.7% 0.2%
---------------------------------------------------------
Top 20
Markets 120,311 90.7% 94.5% 1.9% (1.2%) 3.8% 0.0%
All Other
Markets 19,731 9.3% 94.8% 1.7% 0.0% 3.1% 0.4%
---------------------------------------------------------
Total 140,042 100.0% 94.6% 1.8% (1.1%) 3.8% 0.1%
=========================================================
Note: All same store results exclude the Lexford Housing Division.
June YTD 2006 vs. June YTD 2005
Same-Store Results by Market
---------------------------------
Increase (Decrease) from Prior
Year
-------------------------------------------------------------------
Jun Jun YTD
YTD 2006
2006 Weighted
% of Average
Actual Occupancy
Markets Units NOI % Revenues Expenses NOI Occupancy
-------------------------------------------------------------------
1 Los
Angeles 6,079 7.6% 94.3% 7.1% 4.8% 8.2% (0.5%)
2 South
Florida 7,398 6.8% 94.8% 10.6% 4.2% 15.0% (0.4%)
3 Boston 5,761 6.6% 93.8% 2.9% 6.1% 0.9% 0.1%
4 San
Francisco
Bay Area 5,990 6.4% 95.7% 5.3% 5.3% 5.3% 0.4%
5 Phoenix 9,247 5.8% 95.0% 10.9% 2.7% 16.4% 0.9%
6 DC
Suburban
Virginia 5,183 5.8% 95.6% 6.3% 5.3% 6.7% 0.6%
7 New York
Metro
Area 3,406 5.5% 96.4% 8.6% 2.6% 12.0% 0.5%
8 Seattle/
Tacoma 7,153 5.0% 95.4% 7.2% 5.7% 8.2% 0.0%
9 Atlanta 8,743 4.9% 95.0% 3.2% 5.0% 1.9% (0.1%)
10 Denver 6,921 4.2% 94.9% 3.2% 3.0% 3.4% 0.6%
11 San Diego 3,486 4.1% 94.0% 5.0% 6.7% 4.2% (0.9%)
12 Dallas/Ft
Worth 8,152 4.0% 94.5% 4.0% 0.5% 7.5% (0.4%)
13 Orlando 5,151 3.8% 94.8% 10.5% 5.4% 13.7% (0.5%)
14 New
England
(excl
Boston) 5,823 3.5% 92.5% 0.9% 7.9% (4.9%) (0.9%)
15 Orange Co 3,013 3.5% 94.7% 7.1% 5.7% 7.8% (0.2%)
16 Inland
Empire,
CA 3,504 3.4% 92.7% 5.0% 4.8% 5.1% (1.5%)
17 DC
Suburban
Maryland 4,325 3.1% 93.4% 3.8% 9.3% 0.4% (0.1%)
18 Houston 5,282 2.5% 93.8% 6.9% 4.8% 9.1% 2.5%
19 Portland 3,409 1.9% 95.2% 3.2% 4.9% 2.0% 0.8%
20 Austin 3,671 1.6% 95.2% 6.4% 3.3% 10.0% 0.0%
---------------------------------------------------------
Top 20
Markets 111,697 90.0% 94.6% 6.0% 4.8% 6.8% 0.1%
All Other
Markets 18,268 10.0% 94.5% 5.7% 2.4% 8.3% 0.8%
---------------------------------------------------------
Total 129,965 100.0% 94.6% 6.0% 4.5% 7.0% 0.2%
=========================================================
Note: All same store results exclude the Lexford Housing Division.
Portfolio as of June 30, 2006
Properties Units
------------ ------------
Wholly Owned Properties 810 170,221
Partially Owned Properties:
Consolidated 42 6,872
Unconsolidated 45 10,846
Military Housing (Fee Managed) 1 3,643
------------ ------------
898 191,582
Portfolio Rollforward Q2 2006
Properties Units $ Millions Cap Rate
----------- ---------- ---------- ----------
3/31/2006 911 192,240
Acquisitions:
Rental Properties 7 2,143 $430.6 4.8%
Land Parcels (three) - - $62.3
Dispositions:
Rental Properties (13) (2,418) $(229.6) 5.3%
Condominium Units (2) (354) $(72.1)
Land Parcels (one) - - $(0.9)
Configuration Changes (5) (29)
----------- ----------
6/30/2006 898 191,582
Portfolio Rollforward 2006
Properties Units $ Millions Cap Rate
----------- ---------- ---------- ----------
12/31/2005 926 197,404
Acquisitions:
Rental Properties 18 4,922 $937.2 4.9%
Land Parcels (five) - - $76.5
Dispositions:
Rental Properties (38) (10,528) $(1,029.5) 5.5%
Condominium Units (4) (525) $(107.2)
Land Parcels (one) - - $(0.9)
Completed Developments 1 359
Configuration Changes (5) (50)
----------- ----------
6/30/2006 898 191,582
Portfolio Summary
As of June 30, 2006
% of % of 2006
Total Stabilized
Market Properties Units Units NOI (1)
----------- -------- ------- -----------
1 New York Metro Area 17 5,288 2.8% 8.3%
2 South Florida 31 9,779 5.1% 7.2%
3 DC Northern Virginia 21 7,571 4.0% 7.1%
4 Los Angeles 33 7,012 3.7% 7.0%
5 Seattle/Tacoma 46 10,782 5.6% 6.3%
6 Boston 36 6,709 3.5% 5.6%
7 Atlanta 35 11,017 5.8% 5.1%
8 San Francisco Bay Area 26 6,249 3.3% 5.1%
9 Phoenix 36 10,381 5.4% 5.0%
10 Denver 27 8,658 4.5% 4.3%
11 Orlando 20 6,473 3.4% 4.2%
12 San Diego 12 3,822 2.0% 4.0%
13 Inland Empire CA 14 4,355 2.3% 3.6%
14 Dallas/Ft Worth 34 9,919 5.2% 3.6%
15 DC Suburban Maryland 21 5,145 2.7% 3.2%
16 New England (excl Boston) 41 5,823 3.0% 3.1%
17 Orange County 8 3,013 1.6% 3.0%
18 Houston 17 5,282 2.8% 2.2%
19 Jacksonville 13 3,899 2.0% 2.0%
20 Portland OR 11 3,713 1.9% 1.7%
----------- -------- ------- -----------
Top 20 Total 499 134,890 70.6% 91.6%
21 Raleigh/Durham 17 4,392 2.3% 1.6%
22 Tampa/Ft Myers 10 3,141 1.6% 1.4%
23 Austin 12 3,671 1.9% 1.3%
24 Charlotte 11 3,391 1.8% 1.0%
25 Nashville 8 2,325 1.2% 0.9%
26 Central Valley CA 10 1,595 0.8% 0.5%
27 Minneapolis/St Paul 6 817 0.4% 0.4%
28 Other EQR 18 4,355 2.2% 1.3%
----------- -------- ------- -----------
Total 591 158,577 82.8% 100.0%
Lexford Portfolio 291 27,248 14.2% 0.0%
Condominium Conversion 15 2,114 1.1% 0.0%
Military Housing 1 3,643 1.9% 0.0%
----------- -------- ------- -----------
Grand Total 898 191,582 100.0% 100.0%
=========== ======== ======= ===========
(1) Excludes the Lexford Portfolio, which is held for sale and
included in discontinued operations.
Debt Summary as of June 30, 2006
(Amounts in thousands)
Weighted
Weighted Average
% of Average Maturities
Amounts (1) Total Rates (1) (years)
----------- --------- --------- ----------
Secured $3,303,456 43.0% 5.80% 6.4
Unsecured 4,385,697 57.0% 5.96% 7.2
----------- --------- --------- ----------
Total $7,689,153 100.0% 5.89% 6.8
=========== ========= ========= ==========
Fixed Rate Debt:
Secured - Conventional $2,455,981 32.0% 6.34% 4.3
Secured - Tax Exempt 18,317 0.2% 6.49% 18.8
Unsecured - Public/Private 3,577,307 46.5% 6.09% 7.7
Unsecured - Tax Exempt 111,390 1.5% 5.10% 22.8
----------- --------- --------- ----------
Fixed Rate Debt 6,162,995 80.2% 6.17% 6.6
----------- --------- --------- ----------
Floating Rate Debt:
Secured - Conventional 293,998 3.8% 5.99% 2.2
Secured - Tax Exempt 535,160 7.0% 3.45% 17.9
Unsecured - Public 150,000 1.9% 5.85% 2.9
Unsecured - Revolving
Credit Facilities 547,000 7.1% 5.02% 1.9
----------- --------- --------- ----------
Floating Rate Debt 1,526,158 19.8% 4.65% 7.6
----------- --------- --------- ----------
Total $7,689,153 100.0% 5.89% 6.8
=========== ========= ========= ==========
(1) Net of the effect of any derivative instruments. Weighted average
rates are for the six months ended June 30, 2006.
Debt Maturity Schedule as of June 30, 2006
(Amounts in thousands)
Weighted Weighted
Average Average
Rates Rates
on Fixed on
Fixed Rate Floating % of Rate Total
Year (1) Rate (1) Total Total Debt (1) Debt (1)
- ------- ----------- ----------- ----------- ------ -------- --------
2006 (2) $258,177 $53,838 $312,015 4.1% 7.12% 7.12%
2007 326,805 42,073 368,878 4.8% 6.88% 6.82%
2008 (3) 548,086 576,334 1,124,420 14.6% 6.71% 6.05%
2009 477,726 377,890 855,616 11.1% 6.44% 5.35%
2010 279,986 - 279,986 3.6% 7.05% 7.05%
2011 806,265 24,150 830,415 10.8% 6.86% 6.75%
2012 535,042 - 535,042 7.0% 6.51% 6.51%
2013 567,282 - 567,282 7.4% 5.93% 5.93%
2014 504,085 - 504,085 6.6% 5.27% 5.27%
2015 316,432 - 316,432 4.1% 6.54% 6.54%
2016+ (2) 1,543,109 451,873 1,994,982 25.9% 5.74% 5.45%
----------- ----------- ----------- ------ -------- --------
Total $6,162,995 $1,526,158 $7,689,153 100.0% 6.29% 6.00%
=========== =========== =========== ====== ======== ========
(1) Net of the effect of any derivative instruments. Weighted average
rates are as of June 30, 2006.
(2) 2006 includes $10.0 million of 7.57% unsecured debt with a final
maturity of 2026 that has been put back to the Company effective
August 15, 2006. 2016+ includes $140.0 million of 7.57% unsecured
debt with a final maturity of 2026 that was not put back to the
Company.
(3) Includes $547.0 million outstanding on the Company's unsecured
revolving credit facility, which matures on May 29, 2008.
Unsecured Debt Summary as of June 30, 2006
(Amounts in thousands)
Unamortized
Coupon Due Face Premium/ Net
Rate Date Amount (Discount) Balance
- ----------------------------------------------------------------------
Fixed Rate
Notes:
6.690% 11/01/06 $50,000 $(17) $49,983
7.625% 04/15/07 50,000 137 50,137
6.900% 08/01/07 50,000 (27) 49,973
7.540% 09/01/07 (1) 8,571 - 8,571
4.861% 11/30/07 50,000 - 50,000
7.500% 08/15/08 (1) 130,000 - 130,000
4.750% 06/15/09 (2) 300,000 (811) 299,189
6.950% 03/02/11 300,000 3,999 303,999
6.625% 03/15/12 400,000 (1,676) 398,324
5.200% 04/01/13 400,000 (799) 399,201
5.250% 09/15/14 500,000 (505) 499,495
6.584% 04/13/15 300,000 (974) 299,026
5.125% 03/15/16 500,000 (520) 499,480
5.375% 08/01/16 400,000 (1,871) 398,129
7.125% 10/15/17 150,000 (732) 149,268
7.570% 08/15/26 (3) 150,000 - 150,000
Floating Rate
Adjustments (2) (150,000) - (150,000)
FAS 133
Adjustments
- net (2) (7,468) - (7,468)
----------------------------------
3,581,103 (3,796) 3,577,307
----------------------------------
Fixed Rate Tax
Exempt Notes:
4.750% 12/15/28 (1) 35,600 - 35,600
5.200% 06/15/29 (1) 75,790 - 75,790
----------------------------------
111,390 - 111,390
----------------------------------
Floating Rate
Notes: 06/15/09 (2) 150,000 - 150,000
----------------------------------
Revolving Credit
Facility: 05/29/08 547,000 - 547,000
----------------------------------
Total Unsecured Debt $4,389,493 $(3,796)$4,385,697
==================================
(1) Notes are private. All other unsecured debt is public.
(2) $150.0 million in fair value interest rate swaps converts 50% of
the 4.750% Notes due June 15, 2009 to a floating interest rate.
(3) Put period expired July 15, 2006 with $10.0 million put back to
the Company effective August 15, 2006.
Selected Unsecured Public Debt Covenants
June 30, December 31,
2006 2005
------------- -------------
Total Debt to Adjusted Total Assets (not
to exceed 60%) 44.2% 44.9%
Secured Debt to Adjusted Total Assets (not
to exceed 40%) 19.0% 20.0%
Consolidated Income Available For Debt
Service To Maximum Annual Service Charges
(must be at least 1.5 to 1) 2.66 2.89
Total Unsecured Assets to Unsecured Debt
(must be at least 150%) 241.2% 261.4%
These selected covenants relate to ERP Operating Limited Partnership's
("ERPOP") outstanding unsecured public debt. Equity Residential is
the general partner of ERPOP.
Capital Structure as of June 30, 2006
(Amounts in thousands except for share and per share amounts)
Secured Debt $3,096,427 40%
Secured Debt - Held for
Sale 207,029 3%
Unsecured Debt 3,838,697 50%
Lines of Credit 547,000 7%
------------ -----
Total Debt 7,689,153 100% 35%
Common Shares 290,955,828 93%
OP Units 20,653,448 7%
----------- -----
Total Shares and OP Units 311,609,276 100%
Common Share Equivalents (see
below) 903,766
------------
Total outstanding at
quarter-end 312,513,042
Common Share Price at June
30, 2006 $44.73
------------
13,978,708 97%
Perpetual Preferred Equity
(see below) 490,000 3%
------------ -----
Total Equity 14,468,708 100% 65%
Total Market Capitalization $22,157,861 100%
Convertible Preferred Equity as of June 30, 2006
(Amounts in thousands except for share and per share amounts)
Annual
Dividend
Redemption Outstanding Liquidation Per
Series Date Shares/Units Value Share/Unit
- -------------------- ----------- ------------ ----------- ------------
Preferred Shares:
7.00% Series E 11/1/98 473,816 $11,846 $1.75
7.00% Series H 6/30/98 30,734 768 1.75
Preference
Interests:
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 741,917 $24,298
Annual Weighted Common
Dividend Average Conversion Share
Series Amount Rate Ratio Equivalents
- -------------------- ----------- ------------ ----------- ------------
Preferred Shares:
7.00% Series E $829 1.1128 527,262
7.00% Series H 54 1.4480 44,503
Preference
Interests:
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 $1,775 7.31% 903,766
Perpetual Preferred Equity as of June 30, 2006
(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
------------ ------------
Total Perpetual Preferred
Equity 2,760,000 $490,000
Annual
Dividend Annual Weighted
Per Dividend Average
Series Share/Unit Amount Rate
- ------------------------------- ------------ ------------ ------------
Preferred Shares:
9 1/8% Series C $22.8125 $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
------------
Total Perpetual Preferred
Equity $39,409 8.04%
Common Share and Operating Partnership Unit (OP Unit)
Weighted Average Amounts Outstanding
YTD 2Q06 YTD 2Q05 2Q06 2Q05
------------ ------------ ------------ ------------
Weighted Average
Amounts
Outstanding for
Net Income
Purposes:
Common Shares -
basic 289,171,660 284,899,012 289,459,922 285,283,094
Shares issuable
from assumed
conversion/
vesting of:
- OP Units 20,505,880 20,893,584 20,556,844 20,906,578
- share
options/
restricted
shares 4,742,794 3,569,088 4,680,985 3,789,207
------------ ------------ ------------ ------------
Total Common Shares
and OP Units -
diluted 314,420,334 309,361,684 314,697,751 309,978,879
Weighted Average
Amounts
Outstanding for
FFO Purposes:
Common Shares -
basic 289,171,660 284,899,012 289,459,922 285,283,094
OP Units -
basic 20,505,880 20,893,584 20,556,844 20,906,578
------------ ------------ ------------ ------------
Total Common Shares
and OP Units -
basic 309,677,540 305,792,596 310,016,766 306,189,672
Shares issuable
from assumed
conversion/vesting
of:
- convertible
preferred
shares/
units 614,125 847,812 591,694 821,299
- share
options/
restricted
shares 4,742,794 3,569,088 4,680,985 3,789,207
------------ ------------ ------------ ------------
Total Common Shares
and OP Units -
diluted 315,034,459 310,209,496 315,289,445 310,800,178
Period Ending
Amounts
Outstanding:
Common Shares 290,955,828
OP Units 20,653,448
------------
Total Common Shares
and OP Units 311,609,276
Partially Owned Entities as of June 30, 2006
(Amounts in thousands except for project and unit amounts)
Consolidated
-----------------------------------------------------
Development Projects
------------------------
Held for
and/or Completed
Under and
Development Stabilized Lexford Other Total
------------ ----------- -------- --------- ---------
Total
projects (1) - 4 17 21 42
------------ ----------- -------- --------- ---------
Total units (1) - 977 1,999 3,896 6,872
------------ ----------- -------- --------- ---------
Operating
information
for the six
months
ended 6/30/06
(at 100%):
Operating
revenue $- $7,863 $6,176 $26,406 $40,445
Operating
expenses 31 2,728 3,219 9,069 15,047
------------ ----------- -------- --------- ---------
Net operating
income
(loss) (31) 5,135 2,957 17,337 25,398
Depreciation - 2,900 1,380 7,463 11,743
Other 1 - 9 1,022 1,032
------------ ----------- -------- --------- ---------
Operating
income
(loss) (32) 2,235 1,568 8,852 12,623
Interest and
other income 67 58 31 506 662
Interest:
Expense
incurred,
net (462) (1,691) (1,162) (10,042) (13,357)
Amortization
of deferred
financing
costs - (24) (62) (55) (141)
------------ ----------- -------- --------- ---------
Net income
(loss) $(427) $578 $375 $(739) $(213)
============ =========== ======== ========= =========
Debt - Secured (2):
EQR Ownership
(3) $127,444 $61,000 $27,730 $287,149 $503,323
Minority
Ownership - - 4,531 13,321 17,852
------------ ----------- -------- --------- ---------
Total (at 100%) $127,444 $61,000 $32,261 $300,470 $521,175
============ =========== ======== ========= =========
Unconsolidated
---------------
Institutional
Joint Ventures
---------------
Total projects 45
--------------
Total units 10,846
--------------
Operating information for the
six months ended 6/30/06 (at 100%):
Operating revenue $ 49,148
Operating expenses 22,004
--------------
Net operating income (loss) 27,144
Depreciation 10,511
Other 154
--------------
Operating income (loss) 16,479
Interest and other income 343
Interest:
Expense incurred, net (18,722)
Amortization of deferred
financing costs (308)
--------------
Net income (loss) $ (2,208)
==============
Debt - Secured (2):
EQR Ownership (3) $ 121,200
Minority Ownership 363,600
--------------
Total (at 100%) $ 484,800
==============
(1) Project and unit counts exclude all uncompleted development
projects until those projects are completed. See the Consolidated
Development Projects schedule for more detail.
(2) All debt is non-recourse to the Company with the exception of
$28.3 million in mortgage bonds on one development project.
(3) Represents the Company's economic ownership interest.
Consolidated Development Projects as of June 30, 2006
(Amounts in thousands except for project and unit amounts)
Total
Book
Value
Total Not
Total Book Placed
No. of Capital Value To in Total
Projects Location Units Cost (1) Date (1) Service Debt
- ----------------------------------------------------------------------
Projects Under
Development - Wholly Owned:
- ----------------------------
Bella Vista Woodland
III Hills, CA 264 $72,370 $45,555 $45,555 $-
Highland Westwood,
Glen II MA 102 21,620 3,698 3,698 -
Emerson/CRP
II Boston, MA 310 161,309 19,141 19,141 -
Redmond
Ridge Redmond, WA 321 53,536 8,563 8,563 -
----------------------------------------------
Projects Under
Development - Wholly
Owned 997 308,835 76,957 76,957 -
Projects Under Development
- Partially Owned:
- --------------------------
Union Los Angeles,
Station CA 278 63,325 57,133 57,133 32,525
Vintage Ontario, CA 300 53,810 27,288 27,288 23,825
Silver Silver
Spring Spring, MD 457 145,224 25,681 25,681 -
City Lofts Chicago, IL 278 71,109 8,174 8,174 -
303 Third Cambridge,
Street MA 531 242,969 32,815 32,815 -
Alta
Pacific (2) Irvine, CA 132 39,380 14,569 14,569 28,260
----------------------------------------------
Projects Under
Development -
Partially Owned 1,976 615,817 165,660 165,660 84,610
----------------------------------------------
Projects
Under
Development 2,973 924,652 242,617 242,617 84,610
----------------------------------------------
Land Held
for
Development N/A - 208,437 208,437 42,834
----------------------------------------------
Land/Projects Held for
and/or Under
Development 2,973 924,652 451,054 451,054 127,444
----------------------------------------------
Completed Not
Stabilized:
- -------------
2400 M St Washington,
(3) D.C. 359 111,947 110,215 - 74,197
----------------------------------------------
Projects
Completed
Not
Stabilized 359 111,947 110,215 - 74,197
----------------------------------------------
Completed And Stabilized
During the Quarter:
- ------------------------
----------------------------------------------
Projects Completed And
Stabilized During the
Quarter - - - - -
----------------------------------------------
Total
Projects 3,332 $1,036,599 $561,269 $451,054 $201,641
==============================================
Percentage Percentage Percentage
Projects Location Completed Leased Occupied
- ----------------------------------------------------------------------
Projects Under Development -
Wholly Owned:
- ----------------------------
Bella Vista III Woodland Hills, CA 57% - -
Highland Glen II Westwood, MA 10% - -
Emerson/CRP II Boston, MA 14% - -
Redmond Ridge Redmond, WA 1% - -
Projects Under Development -
Partially Owned:
- ----------------------------------
Union Station Los Angeles, CA 91% - -
Vintage Ontario, CA 35% - -
Silver Spring Silver Spring, MD 4% - -
City Lofts Chicago, IL 1% - -
303 Third Street Cambridge, MA 1% - -
Alta Pacific (2) Irvine, CA 2% - -
Completed Not Stabilized:
- -------------------------
2400 M St (3) Washington, D.C. 100% 38% 22%
Total
NOI CONTRIBUTION FROM DEVELOPMENT Capital Q2 2006
PROJECTS Cost (1) NOI
------------------------
Projects Under
Development $924,652 $(29)
Completed Not
Stabilized 111,947 (166)
Completed And Stabilized During
the Quarter - -
------------------------
Total Development/Newly Stabilized
NOI Contribution $1,036,599 $(195)
========================
Estimated Estimated
Completion Stabilization
Projects Location Date Date
- ----------------------------------------------------------------------
Projects Under Development - Wholly
Owned:
- --------------------------------------
Bella Vista III Woodland Hills, CA 4Q 2006 3Q 2007
Highland Glen II Westwood, MA 1Q 2007 4Q 2007
Emerson/CRP II Boston, MA 2Q 2008 1Q 2009
Redmond Ridge Redmond, WA 1Q 2008 2Q 2010
Projects Under Development - Partially
Owned:
- --------------------------------------
Union Station Los Angeles, CA 3Q 2006 1Q 2008
Vintage Ontario, CA 2Q 2007 1Q 2008
Silver Spring Silver Spring, MD 1Q 2008 1Q 2010
City Lofts Chicago, IL 3Q 2008 2Q 2009
303 Third Street Cambridge, MA 3Q 2008 1Q 2010
Alta Pacific (2) Irvine, CA 3Q 2007 2Q 2008
Completed Not Stabilized:
- -------------------------
2400 M St (3) Washington, D.C. Completed 3Q 2007
(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
projects.
(2) Debt is primarily tax-exempt bonds that are entirely outstanding,
with $19.2 million unfunded and classified as deposits -
restricted in the consolidated balance sheets at 6/30/06.
(3) EQR acquired its partner's interest on 4/28/2006 and now wholly-
owns the property. Total Book Value to Date does not include
additional purchase consideration of $30.7MM.
Consolidated Condominium Conversion Projects as of June 30, 2006
(Amounts in thousands except for project and unit amounts)
Units
----------------------------
Available for
Sale
--------------
Project
Start Estimated Sold
Date Close Units Not Avail-
Projects Location (1) Out Date Total Closed Closed able
- ----------------------------------------------------------------------
For Sale
- --------
Fairway Pembroke
Greens Pines, FL Q1 2005 Q3 2006 152 145 - 7
Magnuson
Pointe Seattle, WA Q1 2005 Q4 2006 105 80 23 2
Timber Woodinville,
Ridge WA Q1 2005 Q1 2007 203 125 35 43
Milano Scottsdale,
Terrace AZ Q2 2005 Q2 2007 224 90 42 92
Braewood Bothell, WA Q2 2005 Q4 2006 84 33 16 35
South Palm
Place Tamarac, FL Q2 2005 Q3 2007 208 36 62 110
Chantecleer Naperville,
Lakes IL Q4 2005 Q4 2007 304 70 65 169
Fifth Avenue
North (2) Seattle, WA Q2 2005 Q4 2006 62 35 5 22
Parkside Seattle, WA Q4 2005 Q4 2006 44 16 8 20
Bella Vista Phoenix, AZ Q4 2005 Q1 2008 248 - 9 239
Oaks at
Falls Falls Church,
Church VA Q4 2005 Q4 2007 176 - - 176
Regency Centreville,
Park VA Q4 2005 Q1 2008 252 - - 252
Alameda Scottsdale,
Ranch AZ Q4 2005 Q4 2008 272 - - 272
Azure Creek Phoenix, AZ Q2 2006 Q1 2008 160 - - 160
Park Bloomingdale,
Bloomingdale IL Q2 2006 Q1 2008 250 - - 250
----------------------------
2,744 630 265 1,849
Closed Out
- ----------
Tuscany Scottsdale,
Villas AZ Q4 2004 Q1 2006 180 180 - -
Venetian I
& II Phoenix, AZ Q1 2004 Q1 2006 264 264 - -
Four Lakes Lisle, IL Q4 2001 Q2 2006 942 942 - -
Atlas (3) Washington,
DC Q4 2004 Q2 2006 141 141 - -
Grand Plantation,
Marquis FL Q4 2004 Q2 2006 198 198 - -
Projects closed out
prior to 2006 1,914 1,914 - -
----------------------------
3,639 3,639 - -
Totals 20 6,383 4,269 265 1,849
============================
2006 YTD Activity
---------------------------
Project FFO
Start Estimated Incremental
Date Close Units Sales Gain on
Projects Location (1) Out Date Closed Price Sale
- ------------------------------------------ ---------------------------
For Sale
- --------
Fairway Pembroke
Greens Pines, FL Q1 2005 Q3 2006 42 $8,448 $2,261
Magnuson
Pointe Seattle, WA Q1 2005 Q4 2006 45 11,384 3,658
Timber Woodinville,
Ridge WA Q1 2005 Q1 2007 97 17,337 4,589
Milano Scottsdale,
Terrace AZ Q2 2005 Q2 2007 80 18,544 5,611
Braewood Bothell, WA Q2 2005 Q4 2006 33 6,779 1,925
South Palm
Place Tamarac, FL Q2 2005 Q3 2007 36 6,462 1,153
Chantecleer Naperville,
Lakes IL Q4 2005 Q4 2007 70 10,237 1,694
Fifth
Avenue
North (2) Seattle, WA Q2 2005 Q4 2006 35 9,992 2,200
Parkside Seattle, WA Q4 2005 Q4 2006 16 3,746 773
Bella Vista Phoenix, AZ Q4 2005 Q1 2008 - - -
Oaks at
Falls Falls Church,
Church VA Q4 2005 Q4 2007 - - -
Regency Centreville,
Park VA Q4 2005 Q1 2008 - - -
Alameda Scottsdale,
Ranch AZ Q4 2005 Q4 2008 - - -
Azure Creek Phoenix, AZ Q2 2006 Q1 2008 - - -
Park Bloomingdale,
Bloomingdale IL Q2 2006 Q1 2008 - - -
---------------------------
454 92,929 23,864
Closed Out
- ----------
Tuscany Scottsdale,
Villas AZ Q4 2004 Q1 2006 2 331 100
Venetian I
& II Phoenix, AZ Q1 2004 Q1 2006 1 204 (152)
Four Lakes Lisle, IL Q4 2001 Q2 2006 46 7,688 892
Atlas (3) Washington,
DC Q4 2004 Q2 2006 6 3,006 416
Grand Plantation,
Marquis FL Q4 2004 Q2 2006 16 2,998 517
Projects closed out
prior to 2006 - - 1,056
---------------------------
71 14,227 2,829
Totals 20 525 $107,156 $26,693
===========================
Gross incremental gain on sales
of condominium units $26,693
Provision for income taxes (8,140)
-----------
Net incremental gain on sales
of condominium units 18,553
Property management and general and
administrative expenses (2,974)
Discontinued operating income 716
-----------
Net Income - Condominium Division (4) $16,295
===========
2Q 2006
---------------------------
Project FFO
Start Estimated Incremental
Date Close Units Sales Gain on
Projects Location (1) Out Date Closed Price Sale
- ------------------------------------------ ---------------------------
For Sale
- --------
Fairway Pembroke
Greens Pines, FL Q1 2005 Q3 2006 10 $1,979 $429
Magnuson
Pointe Seattle, WA Q1 2005 Q4 2006 31 8,036 2,729
Timber Woodinville,
Ridge WA Q1 2005 Q1 2007 67 12,478 3,451
Milano Scottsdale,
Terrace AZ Q2 2005 Q2 2007 37 8,874 2,531
Braewood Bothell, WA Q2 2005 Q4 2006 33 6,779 1,925
South Palm
Place Tamarac, FL Q2 2005 Q3 2007 36 6,462 1,153
Chantecleer Naperville,
Lakes IL Q4 2005 Q4 2007 70 10,237 1,694
Fifth
Avenue
North (2) Seattle, WA Q2 2005 Q4 2006 35 9,992 2,200
Parkside Seattle, WA Q4 2005 Q4 2006 16 3,746 773
Bella Vista Phoenix, AZ Q4 2005 Q1 2008 - - -
Oaks at
Falls Falls Church,
Church VA Q4 2005 Q4 2007 - - -
Regency Centreville,
Park VA Q4 2005 Q1 2008 - - -
Alameda Scottsdale,
Ranch AZ Q4 2005 Q4 2008 - - -
Azure Creek Phoenix, AZ Q2 2006 Q1 2008 - - -
Park Bloomingdale,
Bloomingdale IL Q2 2006 Q1 2008 - - -
----------------------------
335 68,583 16,885
Closed Out
- ----------
Tuscany Scottsdale,
Villas AZ Q4 2004 Q1 2006 - - (27)
Venetian I
& II Phoenix, AZ Q1 2004 Q1 2006 - - (103)
Four Lakes Lisle, IL Q4 2001 Q2 2006 16 2,740 396
Atlas (3) Washington,
DC Q4 2004 Q2 2006 1 430 250
Grand Plantation,
Marquis FL Q4 2004 Q2 2006 2 388 (125)
Projects closed out prior
to 2006 - - (430)
----------------------------
19 3,558 (39)
Totals 20 354 $72,141 $16,846
============================
Gross incremental gain on sales of
condominium units $16,846
Provision for income taxes (5,420)
-----------
Net incremental gain on sales of
condominium units 11,426
Property management and general and
administrative expenses (1,235)
Discontinued operating income 9
-----------
Net Income - Condominium Division (4) $10,200
===========
(1) Project start date represents the date that each respective
property was acquired by the taxable REIT subsidiary and included
in discontinued operations.
(2) Includes the sale of 3,744 square feet of retail space, which
amounted to a gain of $89,100 on proceeds of $956,500.
(3) Partially owned project; incremental gain on sale represents
portion attributable to the Company.
(4) 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, 2006
(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) 116,680 $38,109 $327 $35,144 $301 $73,253 $628
New Acquisition
Properties (7) 25,874 9,369 400 6,464 276 15,833 676
Properties Held
for Sale (8) 27,248 6,419 235 4,708 173 11,127 408
Other (9) 7,291 5,005 5,118 10,123
-------- -------- -------- ---------
Total 177,093 $58,902 $51,434 $110,336
======== ======== ======== =========
-----------------------------------------------------
Capitalized Improvements to Real Estate
-----------------------------------------------------
Avg. Building Avg. Avg.
Replacements Per Improvements Per Per
(4) Unit (5) Unit Total Unit
------------------- ----------------- ---------------
Established
Properties (6) $21,180 $181 $36,854 $316 $58,034 $497
New Acquisition
Properties (7) 4,191 179 10,886 465 15,077 644
Properties Held
for Sale (8) 5,495 202 3,457 127 8,952 329
Other (9) 10,006 14,372 24,378
------------- ----------- ---------
Total $40,872 $65,569 $106,441
============= =========== =========
-----------------
Total
Expenditures
-----------------
Avg.
Grand Per
Total Unit
-----------------
Established Properties (6) $131,287 $1,125
New Acquisition Properties (7) 30,910 1,320
Properties Held for Sale (8) 20,079 737
Other (9) 34,501
---------
Total $216,777
=========
(1) Total units exclude 10,846 unconsolidated units and 3,643 military
housing (fee managed) 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
appliances, mechanical equipment, fixtures and flooring, including
carpeting.
(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, 2004.
(7) Wholly Owned Properties acquired during 2004, 2005 and 2006. Per
unit amounts are based on a weighted average of 23,422 units.
(8) Properties held for sale include the entire Lexford Portfolio;
27,115 units under contract as previously disclosed and 133
miscellaneous units to be sold separately.
(9) Includes properties either Partially Owned or sold during the
period, commercial space, condominium conversions and $3.4 million
included in building improvements spent on seven specific assets
related to major renovations and repositioning of these assets.
Discontinued Operations
(Amounts in thousands)
Six Months Ended June 30, Quarter Ended June 30,
------------------------- -------------------------
2006 2005 2006 2005
------------------------- -------------------------
REVENUES
Rental income $116,323 $190,537 $50,855 $92,071
Fee and asset
management - 464 - 231
------------ ------------ ------------ ------------
Total
revenues 116,323 191,001 50,855 92,302
------------ ------------ ------------ ------------
EXPENSES (1)
Property and
maintenance 42,469 62,075 19,845 30,900
Real estate taxes
and insurance 13,884 23,650 5,792 10,594
Property
management 5,934 5,118 3,156 2,581
Depreciation 25,548 47,030 10,795 22,368
General and
administrative 826 706 389 284
------------ ------------ ------------ ------------
Total
expenses 88,661 138,579 39,977 66,727
------------ ------------ ------------ ------------
Discontinued
operating income 27,662 52,422 10,878 25,575
Interest and other
income 1,015 469 37 439
Interest (2):
Expense
incurred,
net (10,677) (17,701) (4,985) (8,564)
Amortization
of deferred
financing
costs (633) (273) (586) (125)
------------ ------------ ------------ ------------
Discontinued
operations 17,367 34,917 5,344 17,325
Minority Interests
- Operating
Partnership (1,143) (2,374) (351) (1,178)
------------ ------------ ------------ ------------
Discontinued
operations, net
of minority
interests 16,224 32,543 4,993 16,147
------------ ------------ ------------ ------------
Net gain on sales
of discontinued
operations 502,297 248,875 129,796 108,171
Minority Interests
- Operating
Partnership (33,051) (16,923) (8,515) (7,356)
------------ ------------ ------------ ------------
Gain on sales of
discontinued
operations, net of
minority interests 469,246 231,952 121,281 100,815
------------ ------------ ------------ ------------
Discontinued
operations, net
of minority
interests $485,470 $264,495 $126,274 $116,962
============ ============ ============ ============
Note: Discontinued operations includes the Lexford Housing Division.
(1) Includes expenses paid in the current period for properties sold
or held for sale 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 and/or held for sale.
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)
------------------------------------------
Q3 2006 2006
--------------- ---------------
Expected EPS (1) $0.11 to $0.16 $3.28 to $3.48
Add: Expected depreciation expense 0.47 1.92
Less: Expected net gain on sales (1) - (2.90)
--------------- ---------------
Expected FFO (2) $0.58 to $0.63 $2.30 to $2.50
=============== ===============
Same-Store Assumptions
----------------------
2006
---------------
Physical occupancy 94.5%
Revenue change 5.25% to 5.75%
Expense change 2.50% to 3.50%
NOI change 6.50% to 8.00%
Acquisitions $2.0 billion
Dispositions $2.2 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