Exhibit 99.1
Equity Residential Reports 2006 Results
Year over Year Same-Store NOI Increases 7.0 Percent
CHICAGO--(BUSINESS WIRE)--Feb. 6, 2007--Equity Residential
(NYSE:EQR) today reported results for the quarter and year ended
December 31, 2006. All per share results are reported on a fully
diluted basis.
"2006 was a terrific year for Equity Residential, having produced
some of the best same-store results in our history. In addition, we
successfully continued the transformation of our portfolio with the
sale of our Lexford portfolio and the addition of numerous
high-quality assets across our core markets," said David J.
Neithercut, Equity Residential's President and CEO. "2007 should be
another very good year as favorable apartment fundamentals continue to
drive strong same-store results. Our 2007 FFO guidance range of $2.25
to $2.35 per share reflects our expectations for solid core growth
offset by dilution from the Lexford sale and lower profits from
condominium sales. Despite this short-term dilution, Equity
Residential is positioned for greater long term growth and capital
appreciation."
Fourth Quarter 2006
For the quarter ended December 31, 2006, the company reported
earnings of $1.54 per share compared to $0.74 per share in the fourth
quarter of 2005. The quarterly increase is primarily attributable to
$0.94 per share in higher gains on sales of properties in the fourth
quarter of 2006, which includes the sale of the company's Lexford
Housing Division, net of the goodwill impairment charge discussed
below.
The company's fourth quarter and full year results reflect the
previously announced goodwill impairment charge of $0.09 per share
taken by the company in relation to its corporate housing business.
Funds from Operations (FFO) for the quarter ended December 31,
2006 were $0.49 per share compared to $0.66 per share in the same
period of 2005. This decrease is primarily attributable to the above
referenced goodwill impairment charge as well as a gain of $0.06 per
share from the sale of a land parcel in the fourth quarter of 2005.
Total revenues from continuing operations for the quarter were
$517.9 million compared to $449.5 million in the fourth quarter of
2005. The primary components of this $68.4 million increase are the
properties acquired in 2005 and 2006.
Year Ended December 31, 2006
For the year ended December 31, 2006, the company reported
earnings of $3.50 per share compared to $2.79 per share in the same
period of 2005. FFO for the year ended December 31, 2006 were $2.27
per share compared to $2.52 per share in the same period of 2005.
Total revenues from continuing operations for the year ended
December 31, 2006 were $2.0 billion compared to $1.7 billion in the
same period of 2005.
Same-Store Results
On a same-store fourth quarter to fourth quarter comparison, which
includes 133,988 units, revenues increased 5.3 percent, expenses
increased 5.2 percent and NOI increased 5.4 percent. The increase in
same-store revenues was driven primarily by continued increases in
rental rate.
On a same-store year to year comparison, which includes 128,133
units, revenues increased 5.8 percent, expenses increased 4.0 percent
and NOI increased 7.0 percent.
Portfolio Activity
During the fourth quarter of 2006, the company acquired seven
properties, consisting of 1,288 units, for an aggregate purchase price
of $311.1 million at an average capitalization (cap) rate of 4.4
percent, and three land parcels for $40.9 million.
Also during the quarter, the company sold, including its Lexford
Housing Division, 295 properties, consisting of 28,947 units, for an
aggregate sale price of $1.2 billion at an average cap rate of 7.3
percent generating an unlevered internal rate of return (IRR) of 14.1
percent. The average cap rate and IRR for the non-Lexford property
sales were 6.1 percent and 10.1 percent, respectively. In addition,
the company sold 240 condominium units for $45.3 million.
During 2006, the company acquired 35 properties, consisting of
8,768 units, for an aggregate purchase price of $1.75 billion at an
average cap rate of 4.9 percent, and nine land parcels for $134.4
million.
During 2006, the company sold 335 properties, consisting of 39,608
units, for an aggregate sale price of $2.26 billion at an average cap
rate of 6.4 percent generating an unlevered IRR of 13.1 percent. The
average cap rate and IRR for the non-Lexford property sales were 5.5
percent and 11.9 percent, respectively. In addition, the company sold
1,069 condominium units for $216.0 million and two land parcels for
$1.6 million.
Lexford Housing Division Sale
On October 5, 2006, Equity Residential completed the sale of its
Lexford Housing Division, comprised of 289 properties consisting of
27,115 apartment units, for a cash purchase price of $1.086 billion.
First Quarter Results
Equity Residential expects to announce results for the first
quarter of 2007 on Tuesday, May 1, 2007 and host a conference call to
discuss those results at 10:00 a.m. CT on Wednesday, May 2, 2007.
Equity Residential is an S&P 500 company focused on the
acquisition, development and management of high quality apartment
properties in top U.S. growth markets. Equity Residential owns or has
investments in 617 properties totaling 165,716 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 web cast of the company's conference call discussing these
results will take place tomorrow, Wednesday, February 7, 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,
----------------------- -----------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
REVENUES
Rental income $1,981,335 $1,672,418 $515,657 $447,064
Fee and asset
management 9,101 10,240 2,223 2,477
----------- ----------- ----------- -----------
Total revenues 1,990,436 1,682,658 517,880 449,541
----------- ----------- ----------- -----------
EXPENSES
Property and
maintenance 527,154 451,245 136,840 116,226
Real estate taxes
and insurance 199,582 191,679 51,867 56,557
Property management 96,417 87,103 26,160 23,752
Fee and asset
management 8,934 8,555 2,457 2,197
Depreciation 562,739 439,594 150,996 119,274
General and
administrative 48,465 70,405 12,545 24,980
Impairment 34,002 613 32,284 94
----------- ----------- ----------- -----------
Total expenses 1,477,293 1,249,194 413,149 343,080
----------- ----------- ----------- -----------
Operating income 513,143 433,464 104,731 106,461
Interest and other
income 31,131 68,399 19,461 3,575
Interest:
Expense
incurred, net (427,952) (362,347) (108,760) (97,346)
Amortization
of deferred
financing
costs (8,302) (6,503) (1,887) (1,679)
----------- ----------- ----------- -----------
Income before
allocation to Minority
Interests, (loss)
income from
investments in
unconsolidated
entities, net gain
(loss) on sales of
unconsolidated
entities and land
parcels and
discontinued
operations 108,020 133,013 13,545 11,011
Allocation to Minority
Interests:
Operating
Partnership, net (4,201) (6,796) (322) (1,427)
Preference
Interests and
Units (2,002) (7,606) (223) (1,164)
Partially Owned
Properties (3,132) 801 (582) 129
Premium on
redemption of
Preference
Interests (684) (4,134) - -
(Loss) income from
investments in
unconsolidated
entities (631) 470 (66) 920
Net gain on sales of
unconsolidated
entities 370 1,330 - 1,206
Net gain (loss) on
sales of land parcels 2,792 30,245 (391) 19,879
----------- ----------- ----------- -----------
Income from continuing
operations, net of
minority interests 100,532 147,323 11,961 30,554
Discontinued
operations, net of
minority interests 972,312 714,470 453,100 195,332
----------- ----------- ----------- -----------
Net income 1,072,844 861,793 465,061 225,886
Preferred distributions (37,113) (49,642) (7,431) (10,638)
Premium on redemption
of Preferred Shares (3,965) (4,359) (24) (43)
----------- ----------- ----------- -----------
Net income available to
Common Shares $1,031,766 $807,792 $457,606 $215,205
=========== =========== =========== ===========
Earnings per share -
basic:
Income from continuing
operations available
to Common Shares $0.21 $0.33 $0.02 $0.07
=========== =========== =========== ===========
Net income available to
Common Shares $3.56 $2.83 $1.57 $0.75
=========== =========== =========== ===========
Weighted average Common
Shares outstanding 290,019 285,760 291,669 287,033
=========== =========== =========== ===========
Earnings per share -
diluted:
Income from continuing
operations available
to Common Shares $0.20 $0.32 $0.02 $0.07
=========== =========== =========== ===========
Net income available to
Common Shares $3.50 $2.79 $1.54 $0.74
=========== =========== =========== ===========
Weighted average Common
Shares outstanding 315,579 310,785 317,076 312,408
=========== =========== =========== ===========
Distributions declared
per Common Share
outstanding $1.79 $1.74 $0.4625 $0.4425
=========== =========== =========== ===========
EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS
(Amounts in thousands except per share data)
Year Ended Quarter Ended
December 31, December 31,
---------------------- ---------------------
2006 2005 2006 2005
----------- ---------- ---------- ----------
Net income $1,072,844 $861,793 $465,061 $225,886
Allocation to Minority
Interests - Operating
Partnership, net 4,201 6,796 322 1,427
Adjustments:
Depreciation 562,739 439,594 150,996 119,274
Depreciation - Non-
real estate
additions (7,840) (5,541) (2,225) (1,772)
Depreciation -
Partially Owned and
Unconsolidated
Properties 4,338 2,487 865 351
Net gain on sales of
unconsolidated
entities (370) (1,330) - (1,206)
Discontinued
operations:
Depreciation 29,779 89,153 914 18,481
Gain on sales
of
discontinued
operations,
net of
minority
interests (3) (955,863) (650,563) (467,950) (181,564)
Net incremental
gain on sales
of condominium
units 45,800 91,611 14,369 34,944
Minority
Interests -
Operating
Partnership 1,593 4,626 (606) 989
----------- ---------- ---------- ----------
FFO (1)(2) 757,221 838,626 161,746 216,810
Preferred distributions (37,113) (49,642) (7,431) (10,638)
Premium on redemption of
Preferred Shares (3,965) (4,359) (24) (43)
----------- ---------- ---------- ----------
FFO available to Common
Shares and OP Units -
basic $716,143 $784,625 $154,291 $206,129
=========== ========== ========== ==========
FFO available to Common
Shares and OP Units -
diluted $717,056 $785,818 $154,501 $206,387
=========== ========== ========== ==========
FFO per share and OP
Unit - basic $2.31 $2.56 $0.49 $0.67
=========== ========== ========== ==========
FFO per share and OP
Unit - diluted $2.27 $2.52 $0.49 $0.66
=========== ========== ========== ==========
Weighted average Common
Shares and OP Units
outstanding - basic 310,452 306,579 311,757 307,792
=========== ========== ========== ==========
Weighted average Common
Shares and OP Units
outstanding - diluted 316,168 311,553 317,620 313,071
=========== ========== ========== ==========
(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.
(3) Gain on sales of discontinued operations, net of minority
interests, has been reduced by approximately $4.5 million in one-
time accrued retention benefits for the year ended December 31,
2006, related to the previously announced October 5, 2006 closing
of the Lexford Housing Division disposition.
EQUITY RESIDENTIAL
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except for share amounts)
December 31, December 31,
2006 2005
------------ ------------
ASSETS
Investment in real estate
Land $3,217,672 $2,848,601
Depreciable property 13,376,359 13,336,636
Projects under development 386,917 240,980
Land held for development 254,227 164,153
------------ ------------
Investment in real estate 17,235,175 16,590,370
Accumulated depreciation (3,022,480) (2,888,140)
------------ ------------
Investment in real estate, net 14,212,695 13,702,230
Cash and cash equivalents 260,277 88,828
Investments in unconsolidated entities 4,448 6,838
Rents receivable 390 789
Deposits - restricted 391,825 77,093
Escrow deposits - mortgage 25,528 35,225
Deferred financing costs, net 43,384 40,636
Goodwill, net - 30,000
Other assets 123,672 127,112
------------ ------------
Total assets $15,062,219 $14,108,751
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $3,178,223 $3,379,289
Notes, net 4,419,433 3,442,784
Lines of credit 460,000 769,000
Accounts payable and accrued expenses 100,605 115,543
Accrued interest payable 91,172 78,441
Rents received in advance and other
liabilities 307,651 305,536
Security deposits 58,072 54,823
Distributions payable 151,382 145,812
------------ ------------
Total liabilities 8,766,538 8,291,228
------------ ------------
Commitments and contingencies
Minority Interests:
Operating Partnership 372,961 345,034
Preference Interests and Units 11,684 60,184
Partially Owned Properties 26,814 16,965
------------ ------------
Total Minority Interests 411,459 422,183
------------ ------------
Shareholders' equity:
Preferred Shares of beneficial interest,
$0.01 par value; 100,000,000 shares
authorized; 2,762,950 shares issued and
outstanding as of December 31, 2006 and
3,323,830 shares issued and outstanding
as of December 31, 2005 386,574 504,096
Common Shares of beneficial interest,
$0.01 par value; 1,000,000,000 shares
authorized; 293,551,633 shares issued
and outstanding as of December 31, 2006
and 289,536,344 shares issued and
outstanding as of December 31, 2005 2,936 2,895
Paid in capital 5,349,194 5,253,188
Retained earnings (deficit) 159,528 (350,367)
Accumulated other comprehensive loss (14,010) (14,472)
------------ ------------
Total shareholders' equity 5,884,222 5,395,340
------------ ------------
Total liabilities and shareholders'
equity $15,062,219 $14,108,751
============ ============
EQUITY RESIDENTIAL
Portfolio Summary
As of December 31, 2006
% of % of 2007 Average
Total Stabilized Rental
Markets Properties Units Units NOI Rate (1)
-------------- ---------- --------- -------- ----------- ---------
1 New York Metro
Area 18 5,443 3.3% 8.6% $2,415
2 DC Northern
Virginia 25 8,473 5.1% 7.4% 1,523
3 Los Angeles 35 7,321 4.4% 7.1% 1,628
4 South Florida 31 9,779 5.9% 7.0% 1,288
5 Seattle/Tacoma 48 11,083 6.7% 6.8% 1,128
6 Boston 37 6,889 4.2% 6.4% 1,504
7 Phoenix 40 11,381 6.9% 5.6% 922
8 San Francisco
Bay Area 27 6,501 3.9% 5.0% 1,474
9 Denver 29 9,547 5.8% 4.7% 864
10 Atlanta 34 10,537 6.4% 4.5% 877
11 Orlando 23 7,231 4.4% 4.4% 1,039
12 San Diego 12 3,822 2.3% 3.7% 1,558
13 Dallas/Ft
Worth 33 9,671 5.8% 3.4% 802
14 Inland Empire
CA 14 4,355 2.6% 3.3% 1,319
15 New England
(excl Boston) 41 5,823 3.5% 3.0% 1,068
16 Suburban
Maryland 21 5,145 3.1% 2.9% 1,101
17 Orange County 8 3,013 1.8% 2.9% 1,517
18 Houston 16 4,806 2.9% 2.0% 864
19 Jacksonville 12 3,755 2.3% 1.7% 896
20 Portland OR 11 3,713 2.2% 1.6% 874
---------- --------- -------- ----------- ---------
Top 20 Total 515 138,288 83.5% 92.0% 1,194
21 Raleigh/Durham 17 4,392 2.7% 1.6% 729
22 Tampa/Ft Myers 10 3,141 1.9% 1.3% 930
23 Austin 12 3,671 2.2% 1.3% 791
24 Charlotte 11 3,391 2.0% 1.0% 640
25 Nashville 8 2,325 1.4% 0.9% 799
26 Central Valley
CA 10 1,595 1.0% 0.5% 1,022
27 Minneapolis/St
Paul 6 817 0.5% 0.4% 1,098
28 Other 16 3,871 2.3% 1.1% 867
---------- --------- -------- ----------- ---------
Total 605 161,491 97.5% 100.0% 1,138
Condominium
Conversion 11 670 0.4% - -
Military
Housing 1 3,555 2.1% - -
---------- --------- -------- ----------- ---------
Grand Total 617 165,716 100.0% 100.0% $1,138
========== ========= ======== =========== =========
(1) Average rental rate is defined as total rental revenues divided by
the weighted average occupied units for the month of December 2006.
Portfolio as of December 31, 2006
Properties Units
---------- ----------
Wholly Owned Properties 546 146,442
Partially Owned Properties:
Consolidated 25 4,873
Unconsolidated 45 10,846
Military Housing (Fee Managed) 1 3,555
---------- ----------
617 165,716
Portfolio Rollforward Q4 2006
Properties Units $ Millions Cap Rate
---------- ---------- ---------- ---------
9/30/2006 905 193,692
Acquisitions:
Rental Properties 7 1,288 $311.1 4.4%
Land Parcels (three) - - $40.9
Dispositions:
Rental Properties (1) (295) (28,947) $(1,223.0) 7.3%
Condominium Units - (240) $(45.3)
Configuration Changes - (77)
---------- ----------
12/31/2006 617 165,716
Portfolio Rollforward 2006
Properties Units $ Millions Cap Rate
---------- ---------- ---------- ---------
12/31/2005 926 197,404
Acquisitions:
Rental Properties 35 8,768 $1,753.1 4.9%
Land Parcels (nine) - - $134.4
Dispositions:
Rental Properties (1) (335) (39,608) $(2,255.5) 6.4%
Condominium Units (5) (1,069) $(216.0)
Land Parcels (two) - - $(1.6)
Completed Developments 1 359
Configuration Changes (5) (138)
---------- ----------
12/31/2006 617 165,716
(1) Excluding the Lexford Housing Division, the cap rates were 6.1%
and 5.5% for the quarter and year ended December 31, 2006,
respectively.
Fourth Quarter 2006 vs. Fourth Quarter 2005
Quarter over Quarter Same-Store Results/Statistics
$ in Thousands (except for Average Rental Rate) -
133,988 Same-Store Units
Results Statistics
------------------------------- --------------------------
Average
Rental
Rate
Description Revenues Expenses NOI (1) (2) Occupancy Turnover
- ----------- ----------- --------- --------- ------- --------- --------
Q4 2006 $431,841 $166,094 $265,747 $1,138 94.5% (15.4%)
Q4 2005 $410,108 $157,909 $252,199 $1,083 94.4% (15.2%)
----------- --------- --------- ------- --------- --------
Change $21,733 $8,185 $13,548 $55 0.1% (0.2%)
=========== ========= ========= ======= ========= ========
Change 5.3% 5.2% 5.4% 5.1%
Fourth Quarter 2006 vs. Third Quarter 2006
Sequential Quarter over Quarter Same-Store Results/Statistics
$ in Thousands (except for Average Rental Rate) -
143,320 Same-Store Units
Results Statistics
------------------------------- --------------------------
Average
Rental
Rate
Description Revenues Expenses NOI (1) (2) Occupancy Turnover
- ----------- ----------- --------- --------- ------- --------- --------
Q4 2006 $474,358 $182,237 $292,121 $1,170 94.4% (15.4%)
Q3 2006 $471,891 $183,709 $288,182 $1,162 94.6% (18.8%)
----------- --------- --------- ------- --------- --------
Change $2,467 $(1,472) $3,939 $8 (0.2%) 3.4%
=========== ========= ========= ======= ========= ========
Change 0.5% (0.8%) 1.4% 0.7%
2006 vs. 2005
Year over Year Same-Store Results/Statistics
$ in Thousands (except for Average Rental Rate) -
128,133 Same-Store Units
Results Statistics
------------------------------- --------------------------
Average
Rental
Rate
Description Revenues Expenses NOI (1) (2) Occupancy Turnover
- ----------- ----------- --------- --------- ------- --------- --------
2006 $1,612,529 $628,210 $984,319 $1,110 94.6% (64.6%)
2005 $1,523,858 $604,318 $919,540 $1,050 94.6% (65.5%)
----------- --------- --------- ------- --------- --------
Change $88,671 $23,892 $64,779 $60 0.0% 0.9%
=========== ========= ========= ======= ========= ========
Change 5.8% 4.0% 7.0% 5.7%
(1) The Company's primary financial measure for evaluating each of its
apartment communities is net operating income ("NOI"). NOI represents
rental income less property and maintenance expense, real estate tax
and insurance expense, and property management expense. The Company
believes that NOI is helpful to investors as a supplemental measure
of the operating performance of a real estate company because it is a
direct measure of the actual operating results of the Company's
apartment communities.
(2) Average rental rate is defined as total rental revenues divided by
the weighted average occupied units for the period.
Same-Store NOI Reconciliation
Fourth Quarter 2006 vs. Fourth Quarter 2005
The following table presents a reconciliation of operating income per
the consolidated statements of operations to NOI for the Fourth
Quarter 2006 Same-Store Properties:
Quarter Ended
December 31,
----------------------
2006 2005
---------- ----------
(Amounts in thousands)
Operating income $104,731 $106,461
Adjustments:
Non-same-store operating results (35,043) 1,670
Fee and asset management revenue (2,223) (2,477)
Fee and asset management expense 2,457 2,197
Depreciation 150,996 119,274
General and administrative 12,545 24,980
Impairment 32,284 94
---------- ----------
Same-store NOI $265,747 $252,199
========== ==========
Same-Store NOI Reconciliation
2006 vs. 2005
The following table presents a reconciliation of operating income per
the consolidated statements of operations to NOI for the 2006 Same-
Store Properties:
Year Ended
December 31,
----------------------
2006 2005
---------- ----------
(Amounts in thousands)
Operating income $513,143 $433,464
Adjustments:
Non-same-store operating results (173,863) (22,851)
Fee and asset management revenue (9,101) (10,240)
Fee and asset management expense 8,934 8,555
Depreciation 562,739 439,594
General and administrative 48,465 70,405
Impairment 34,002 613
---------- ----------
Same-store NOI $984,319 $919,540
========== ==========
Fourth Quarter 2006 vs. Fourth Quarter 2005
Same-Store Results by Market
-------------------------------------------------------------------
4Q 2006 4Q 2006 4Q 2006
% of Average Weighted
Actual Rental Average
Markets Units NOI Rate (1) Occupancy %
------------------------- --------- --------- --------- -----------
1 Los Angeles 6,221 7.5% $1,657 95.1%
2 Seattle/Tacoma 8,532 6.6% 1,189 93.4%
3 Boston 5,761 6.5% 1,715 94.3%
4 South Florida 7,662 6.5% 1,319 94.0%
5 San Francisco Bay Area 5,990 6.2% 1,479 95.1%
6 New York Metro Area 3,828 5.8% 2,149 96.0%
7 Phoenix 9,247 5.8% 915 94.4%
8 DC Northern Virginia 5,183 5.4% 1,456 94.2%
9 Atlanta 8,465 4.6% 872 95.3%
10 Denver 7,775 4.4% 837 94.9%
11 Orlando 5,801 4.0% 1,042 94.1%
12 San Diego 3,486 3.9% 1,536 95.7%
13 Dallas/Ft Worth 8,091 3.7% 836 94.3%
14 New England (excl Boston) 5,823 3.6% 1,059 94.6%
15 Orange County 3,013 3.3% 1,515 95.9%
16 Inland Empire, CA 3,504 3.3% 1,305 95.0%
17 Suburban Maryland 4,629 3.0% 1,073 88.3%
18 Houston 4,806 2.2% 868 94.3%
19 Jacksonville 3,515 2.0% 902 94.2%
20 Portland 3,409 1.9% 890 94.3%
--------- --------- --------- -----------
Top 20 Markets 114,741 90.2% 1,188 94.3%
All Other Markets 19,247 9.8% 843 95.4%
--------- --------- --------- -----------
Total 133,988 100.0% $1,138 94.5%
========= ========= ========= ===========
--------------------------------------------
Increase (Decrease) from Prior Quarter
--------------------------------------------
Average
Rental
Markets Revenues Expenses NOI Rate (1) Occupancy
---------------------- -------- -------- ------- -------- ---------
1 Los Angeles 5.7% 3.2% 6.9% 5.6% 0.0%
2 Seattle/Tacoma 6.3% 9.0% 4.7% 6.4% (0.2%)
3 Boston 1.0% 1.1% 1.0% 1.6% (0.5%)
4 South Florida 6.1% 10.4% 3.5% 8.4% (2.2%)
5 San Francisco Bay Area 5.9% 1.7% 8.2% 5.7% 0.1%
6 New York Metro Area 8.0% 3.7% 10.5% 7.1% 0.7%
7 Phoenix 10.2% 4.6% 13.7% 10.5% (0.3%)
8 DC Northern Virginia 5.4% 11.9% 2.5% 4.9% 0.4%
9 Atlanta 4.7% 4.6% 4.8% 4.3% 0.3%
10 Denver 4.4% 4.6% 4.2% 2.9% 1.2%
11 Orlando 6.3% 13.4% 2.4% 6.7% (0.5%)
12 San Diego 2.8% 0.8% 3.8% 3.5% (0.6%)
13 Dallas/Ft Worth 3.4% (2.1%) 9.1% 2.8% 0.4%
14 New England (excl
Boston) 6.3% 9.9% 3.4% 2.8% 3.1%
15 Orange County 5.4% 8.2% 4.1% 5.3% 0.1%
16 Inland Empire, CA 4.2% 4.8% 3.9% 2.0% 1.9%
17 Suburban Maryland 0.3% 5.0% (2.4%) 3.9% (3.2%)
18 Houston 3.1% 3.8% 2.3% 4.5% (1.5%)
19 Jacksonville 5.1% 6.9% 3.9% 4.2% 0.8%
20 Portland 7.6% 0.3% 13.1% 7.0% 0.3%
-------- -------- ------- -------- ---------
Top 20 Markets 5.2% 5.2% 5.2% 5.1% 0.0%
All Other Markets 6.0% 5.3% 6.5% 5.0% 0.8%
-------- -------- ------- -------- ---------
Total 5.3% 5.2% 5.4% 5.1% 0.1%
======== ======== ======= ======== =========
(1) Average rental rate is defined as total rental revenues divided by
the weighted average occupied units for the period.
Fourth Quarter 2006 vs. Third Quarter 2006
Sequential Same-Store Results by Market
-------------------------------------------------------------------
4Q 2006 4Q 2006 4Q 2006
% of Average Weighted
Actual Rental Average
Markets Units NOI Rate (1) Occupancy %
------------------------- --------- --------- --------- -----------
1 New York Metro Area 5,288 8.6% $2,510 96.6%
2 Los Angeles 6,754 7.2% 1,636 94.8%
3 South Florida 9,347 7.0% 1,314 93.5%
4 Boston 6,109 6.4% 1,727 93.9%
5 DC Northern Virginia 7,068 6.4% 1,445 93.2%
6 Seattle/Tacoma 8,863 6.2% 1,192 93.5%
7 San Francisco Bay Area 5,990 5.6% 1,479 95.1%
8 Phoenix 9,247 5.2% 915 94.4%
9 Atlanta 9,353 4.8% 900 95.0%
10 Denver 8,111 4.2% 837 95.0%
11 Orlando 6,473 4.1% 1,045 94.0%
12 San Diego 3,822 3.9% 1,543 95.8%
13 Dallas/Ft Worth 8,241 3.4% 843 94.3%
14 New England (excl Boston) 5,823 3.2% 1,059 94.6%
15 Inland Empire, CA 3,712 3.2% 1,298 95.2%
16 Orange County 3,013 3.0% 1,515 95.9%
17 Suburban Maryland 4,837 2.8% 1,069 88.3%
18 Houston 4,806 2.0% 868 94.3%
19 Jacksonville 3,515 1.9% 902 94.2%
20 Raleigh/Durham 4,000 1.8% 748 95.9%
--------- --------- --------- -----------
Top 20 Markets 124,372 90.9% 1,216 94.3%
All Other Markets 18,948 9.1% 871 95.1%
--------- --------- --------- -----------
Total 143,320 100.0% $1,170 94.4%
========= ========= ========= ===========
--------------------------------------------
Increase (Decrease) from Prior Quarter
--------------------------------------------
Average
Rental
Markets Revenues Expenses NOI Rate (1) Occupancy
---------------------- -------- -------- ------- -------- ---------
1 New York Metro Area 1.1% 4.2% (0.5%) 1.4% (0.3%)
2 Los Angeles 0.1% (1.1%) 0.7% 0.9% (0.7%)
3 South Florida 2.4% 0.8% 3.6% 0.3% 1.8%
4 Boston 1.4% (1.8%) 3.4% 2.2% (0.7%)
5 DC Northern Virginia (1.3%) 7.3% (5.4%) 0.1% (1.4%)
6 Seattle/Tacoma 0.3% (0.4%) 0.8% (0.2%) 0.4%
7 San Francisco Bay Area 0.0% (0.6%) 0.3% 0.6% (0.6%)
8 Phoenix 1.2% (5.8%) 5.7% 1.4% (0.2%)
9 Atlanta 0.9% (0.3%) 1.8% 1.4% (0.4%)
10 Denver (0.2%) (1.2%) 0.5% (0.3%) 0.1%
11 Orlando (0.6%) (0.8%) (0.4%) 0.3% (0.8%)
12 San Diego 0.1% (5.7%) 3.4% (0.3%) 0.4%
13 Dallas/Ft Worth (0.5%) 0.8% (1.6%) (0.1%) (0.3%)
14 New England (excl
Boston) 1.0% 4.0% (1.4%) 1.0% (0.1%)
15 Inland Empire, CA 1.6% (12.6%) 9.8% 0.4% 1.1%
16 Orange County 0.7% (2.9%) 2.6% 0.8% (0.1%)
17 Suburban Maryland (2.7%) (1.4%) (3.5%) 1.2% (3.6%)
18 Houston 0.2% 3.3% (2.6%) (0.2%) 0.4%
19 Jacksonville 1.3% (0.1%) 2.3% 1.6% (0.2%)
20 Raleigh/Durham 2.8% (9.0%) 12.4% 1.9% 0.8%
-------- -------- ------- -------- ---------
Top 20 Markets 0.5% (0.5%) 1.1% 0.7% (0.2%)
All Other Markets 0.6% (3.4%) 3.9% 0.6% 0.1%
-------- -------- ------- -------- ---------
Total 0.5% (0.8%) 1.4% 0.7% (0.2%)
======== ======== ======= ======== =========
(1) Average rental rate is defined as total rental revenues divided by
the weighted average occupied units for the period.
2006 vs. 2005
Same-Store Results by Market
-------------------------------------------------------------------
2006 2006 2006
% of Average Weighted
Actual Rental Average
Markets Units NOI Rate (1) Occupancy %
------------------------- --------- --------- --------- -----------
1 Los Angeles 6,079 7.7% $1,638 94.7%
2 Boston 5,761 6.8% 1,690 94.1%
3 South Florida 7,398 6.7% 1,300 93.9%
4 San Francisco Bay Area 5,990 6.5% 1,445 95.6%
5 Phoenix 9,247 5.9% 885 94.8%
6 DC Northern Virginia 5,183 5.9% 1,424 95.1%
7 New York Metro Area 3,406 5.7% 2,169 96.4%
8 Seattle/Tacoma 7,153 5.0% 1,015 94.2%
9 Atlanta 8,263 4.7% 844 95.1%
10 Denver 6,921 4.2% 816 94.9%
11 San Diego 3,486 4.1% 1,528 94.8%
12 Dallas/Ft Worth 7,904 3.9% 825 94.5%
13 Orlando 5,151 3.8% 1,009 94.7%
14 New England (excl Boston) 5,823 3.7% 1,040 93.6%
15 Orange County 3,013 3.5% 1,491 95.3%
16 Inland Empire, CA 3,504 3.4% 1,295 93.6%
17 Suburban Maryland 4,325 3.1% 1,056 92.1%
18 Houston 4,806 2.4% 859 94.0%
19 Portland 3,409 2.0% 865 95.1%
20 Tampa 2,581 1.6% 927 94.4%
--------- --------- --------- -----------
Top 20 Markets 109,403 90.6% 1,161 94.5%
All Other Markets 18,730 9.4% 813 94.9%
--------- --------- --------- -----------
Total 128,133 100.0% $1,110 94.6%
========= ========= ========= ===========
--------------------------------------------
Increase (Decrease) from Prior Year
--------------------------------------------
Average
Rental
Markets Revenues Expenses NOI Rate (1) Occupancy
---------------------- -------- -------- ------- -------- ---------
1 Los Angeles 6.5% 4.0% 7.8% 6.9% (0.5%)
2 Boston 2.4% 4.7% 1.0% 2.5% (0.1%)
3 South Florida 8.9% 5.8% 11.0% 10.4% (1.4%)
4 San Francisco Bay Area 5.7% 2.7% 7.4% 5.5% 0.0%
5 Phoenix 11.2% 2.9% 16.7% 10.6% 0.4%
6 DC Northern Virginia 6.1% 4.7% 6.8% 5.6% 0.3%
7 New York Metro Area 8.1% 1.0% 12.3% 7.7% 0.3%
8 Seattle/Tacoma 6.6% 5.7% 7.3% 7.4% (0.8%)
9 Atlanta 3.8% 3.6% 4.0% 3.7% (0.1%)
10 Denver 3.8% 3.3% 4.1% 3.1% 0.4%
11 San Diego 4.3% 5.7% 3.6% 5.1% (0.7%)
12 Dallas/Ft Worth 4.1% (1.8%) 10.2% 4.1% (0.1%)
13 Orlando 8.8% 6.9% 10.0% 9.4% (0.7%)
14 New England (excl
Boston) 2.9% 7.7% (1.0%) 2.3% 0.5%
15 Orange County 6.7% 7.0% 6.6% 6.7% 0.0%
16 Inland Empire, CA 4.4% 5.4% 3.9% 4.8% (0.4%)
17 Suburban Maryland 2.4% 6.5% (0.1%) 3.4% (0.9%)
18 Houston 5.7% 1.7% 9.9% 4.9% 0.5%
19 Portland 5.4% 3.1% 7.1% 4.3% 0.8%
20 Tampa 9.4% 7.9% 10.6% 9.1% (0.1%)
-------- -------- ------- -------- ---------
Top 20 Markets 5.9% 4.1% 7.0% 5.9% (0.1%)
All Other Markets 5.4% 2.8% 7.5% 4.6% 0.6%
-------- -------- ------- -------- ---------
Total 5.8% 4.0% 7.0% 5.7% 0.0%
======== ======== ======= ======== =========
(1) Average rental rate is defined as total rental revenues divided by
the weighted average occupied units for the period.
Debt Summary as of December 31, 2006
(Amounts in thousands)
Weighted
Weighted Average
Average Maturities
Amounts (1) % of Total Rates (1) (years)
----------- ---------- ----------- ----------
Secured $3,178,223 39.4% 5.82% 6.4
Unsecured 4,879,433 60.6% 5.84% 6.6
----------- ---------- ----------- ----------
Total $8,057,656 100.0% 5.83% 6.5
=========== ========== =========== ==========
Fixed Rate Debt:
Secured - Conventional $2,286,529 28.4% 6.30% 4.4
Secured - Tax Exempt 18,260 0.2% 6.39% 18.3
Unsecured -
Public/Private 4,158,043 51.6% 5.90% 6.9
Unsecured - Tax Exempt 111,390 1.4% 5.06% 22.3
----------- ---------- ----------- ----------
Fixed Rate Debt 6,574,222 81.6% 6.04% 6.3
----------- ---------- ----------- ----------
Floating Rate Debt:
Secured - Conventional 338,278 4.2% 6.31% 2.4
Secured - Tax Exempt 535,156 6.6% 3.45% 17.4
Unsecured - Public 150,000 1.9% 6.13% 2.4
Unsecured - Revolving
Credit Facilities 460,000 5.7% 5.40% 1.4
----------- ---------- ----------- ----------
Floating Rate Debt 1,483,434 18.4% 4.90% 7.5
----------- ---------- ----------- ----------
Total $8,057,656 100.0% 5.83% 6.5
=========== ========== =========== ==========
(1) Net of the effect of any derivative instruments. Weighted average
rates are for the year ended December 31, 2006.
Debt Maturity Schedule as of December 31, 2006
(Amounts in thousands)
Weighted Weighted
Average Average
Rates Rates
Floating on Fixed on Total
Fixed Rate Rate % of Rate Debt
Year (1) (1) Total Total Debt (1) (1)
- ------ ----------- ----------- ----------- ------- -------- --------
2007 $360,411 $101,052 $461,463 5.7% 6.34% 6.51%
2008 (2) 520,499 489,335 1,009,834 12.5% 6.71% 6.17%
2009 452,953 382,564 835,517 10.4% 6.37% 5.36%
2010 279,323 - 279,323 3.5% 7.05% 7.05%
2011 (3) 1,448,445 24,150 1,472,595 18.3% 5.52% 5.50%
2012 558,396 - 558,396 6.9% 6.48% 6.48%
2013 567,355 - 567,355 7.1% 5.93% 5.93%
2014 504,141 34,460 538,601 6.7% 5.27% 5.26%
2015 316,459 - 316,459 3.9% 6.53% 6.53%
2016 1,089,170 - 1,089,170 13.5% 5.32% 5.32%
2017+ 477,070 451,873 928,943 11.5% 6.70% 5.88%
----------- ----------- ----------- ------- -------- --------
Total $6,574,222 $1,483,434 $8,057,656 100.0% 5.98% 5.82%
=========== =========== =========== ======= ======== ========
(1) Net of the effect of any derivative instruments. Weighted
average rates are as of December 31, 2006.
(2) Includes $460.0 million outstanding on the Company's $1.0
billion unsecured revolving credit facility, which matures on
May 29, 2008.
(3) Includes $650.0 million of 3.85% convertible unsecured debt with
a final maturity of 2026. The notes are callable by the Company
on or after August 18, 2011. The notes are putable by the
holders on August 18, 2011, August 15, 2016 and August 15,
2021.
Unsecured Debt Summary as of December 31, 2006
(Amounts in thousands)
Unamortized
Coupon Due Face Premium/ Net
Rate Date Amount (Discount) Balance
-----------------------------------------------------------
Fixed Rate
Notes:
7.625% 04/15/07 $50,000 $51 $50,051
6.900% 08/01/07 50,000 (14) 49,986
7.540% 09/01/07 (1) 4,286 - 4,286
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 (674) 299,326
6.950% 03/02/11 300,000 3,632 303,632
6.625% 03/15/12 400,000 (1,529) 398,471
5.200% 04/01/13 400,000 (740) 399,260
5.250% 09/15/14 500,000 (474) 499,526
6.584% 04/13/15 300,000 (919) 299,081
5.125% 03/15/16 500,000 (493) 499,507
5.375% 08/01/16 400,000 (1,778) 398,222
7.125% 10/15/17 150,000 (700) 149,300
7.570% 08/15/26 140,000 - 140,000
3.850% 08/15/26 (3) 650,000 (7,990) 642,010
Floating Rate
Adjustments (2) (150,000) - (150,000)
FAS 133 Adjustments
- net (2) (4,615) - (4,615)
-----------------------------------
4,169,671 (11,628) 4,158,043
-----------------------------------
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
Facilities: 05/29/08 (4) 460,000 - 460,000
-----------------------------------
Total Unsecured
Debt $4,891,061 $(11,628) $4,879,433
===================================
(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) Convertible notes mature on August 15, 2026. The notes are
callable by the Company on or after August 18, 2011. The notes
are putable by the holders on August 18, 2011, August 15, 2016
and August 15, 2021.
(4) Represents amount outstanding on the Company's $1.0 billion
unsecured revolving credit facility.
Selected Unsecured Public Debt Covenants
December 31, December 31,
2006 2005
------------ ------------
Total Debt to Adjusted Total Assets (not to
exceed 60%) 44.6% 44.9%
Secured Debt to Adjusted Total Assets (not
to exceed 40%) 17.6% 20.0%
Consolidated Income Available for Debt
Service to Maximum Annual Service Charges
(must be at least 1.5 to 1) 2.59 2.89
Total Unsecured Assets to Unsecured Debt
(must be at least 150%) 250.6% 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 December 31, 2006
(Amounts in thousands except for share and per share amounts)
Secured Debt $3,178,223 39.4%
Unsecured Debt 4,419,433 54.9%
Lines of Credit 460,000 5.7%
------------ -------
Total Debt 8,057,656 100.0% 33.0%
Common Shares 293,551,633 93.6%
OP Units 19,914,583 6.4%
------------ ------
Total Shares and OP
Units 313,466,216 100.0%
Common Share
Equivalents (see
below) 856,602
------------
Total outstanding at
quarter-end 314,322,818
Common Share Price at
December 31, 2006 $50.75
------------
15,951,883 97.7%
Perpetual Preferred
Equity (see below) 375,000 2.3%
------------ -------
Total Equity 16,326,883 100.0% 67.0%
Total Market
Capitalization $24,384,539 100.0%
Convertible Preferred Equity as of December 31, 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 11/1/98 434,816 $10,871 $1.75
7.00% Series H 6/30/98 28,134 703 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 700,317 $23,258
Annual Weighted Common
Dividend Average Conversion Share
Series Amount Rate Ratio Equivalents
- -------------------------- --------- --------- ---------- ------------
Preferred Shares:
7.00% Series E $761 1.1128 483,863
7.00% Series H 49 1.4480 40,738
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 $1,702 7.32% 856,602
Perpetual Preferred Equity as of December 31, 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:
8.60% Series D 7/15/07 700,000 $175,000 $21.50
8.29% Series K 12/10/26 1,000,000 50,000 4.145
6.48% Series N 6/19/08 600,000 150,000 16.20
------------ -----------
Total Perpetual
Preferred Equity 2,300,000 $375,000
Annual Weighted
Dividend Average
Series Amount Rate
- --------------------------------- ------------- ------------
Preferred Shares:
8.60% Series D $15,050
8.29% Series K 4,145
6.48% Series N 9,720
-------------
Total Perpetual Preferred Equity $28,915 7.71%
Common Share and Operating Partnership Unit (OP Unit)
Weighted Average Amounts Outstanding
2006 2005 4Q06 4Q05
------------ ------------ ------------ ------------
Weighted Average
Amounts
Outstanding for
Net Income
Purposes:
Common Shares -
basic 290,018,793 285,760,114 291,668,842 287,032,842
Shares issuable
from assumed
conversion/
vesting of:
- OP Units 20,433,196 20,819,217 20,088,178 20,758,907
- share options/
restricted
shares 5,127,102 4,205,901 5,318,852 4,616,552
------------ ------------ ------------ ------------
Total Common
Shares and OP
Units - diluted 315,579,091 310,785,232 317,075,872 312,408,301
Weighted Average
Amounts
Outstanding for
FFO Purposes:
Common Shares -
basic 290,018,793 285,760,114 291,668,842 287,032,842
OP Units - basic 20,433,196 20,819,217 20,088,178 20,758,907
------------ ------------ ------------ ------------
Total Common
Shares and OP
Units - basic 310,451,989 306,579,331 311,757,020 307,791,749
Shares issuable
from assumed
conversion/
vesting of:
- convertible
preferred
shares/units 588,838 767,878 544,086 662,414
- share options/
restricted
shares 5,127,102 4,205,901 5,318,852 4,616,552
------------ ------------ ------------ ------------
Total Common
Shares and OP
Units - diluted 316,167,929 311,553,110 317,619,958 313,070,715
Period Ending
Amounts
Outstanding:
Common Shares 293,551,633
OP Units 19,914,583
------------
Total Common
Shares and OP
Units 313,466,216
Partially Owned Entities as of December 31, 2006
(Amounts in thousands except for project and unit amounts)
Consolidated Unconsolidated
------------------------------------------ --------------
Development Projects
----------------------
Held
for Completed
and/or and Institutional
Under Stabil- Joint
Development ized Other Total Ventures
------------ --------- --------- --------- --------------
Total
projects(1) - 4 21 25 45
------------ --------- --------- --------- --------------
Total
units(1) - 977 3,896 4,873 10,846
------------ --------- --------- --------- --------------
Operating
information
for the year
ended
12/31/06 (at
100%):
Operating
revenue $11 $15,809 $53,632 $69,452 $100,123
Operating
expenses 1,818 5,968 18,653 26,439 45,072
------------ --------- --------- --------- --------------
Net
operating
income
(loss) (1,807) 9,841 34,979 43,013 55,051
Depreci-
ation - 5,800 13,951 19,751 21,017
Other 789 - (734) 55 348
------------ --------- --------- --------- --------------
Operating
income
(loss) (2,596) 4,041 21,762 23,207 33,686
Interest and
other
income 11,599 121 1,219 12,939 597
Interest:
Expense
incurred,
net (997) (3,405) (20,081) (24,483) (37,443)
Amorti-
zation of
deferred
financing
costs - (47) (110) (157) (617)
------------ --------- --------- --------- --------------
Net income
(loss) $8,006 $710 $2,790 $11,506 $(3,777)
============ ========= ========= ========= ==============
Debt -
Secured (2):
EQR
Ownership
(3) $159,154 $61,000 $287,022 $507,176 $121,200
Minority
Ownership - - 13,321 13,321 363,600
------------ --------- --------- --------- --------------
Total (at
100%) $159,154 $61,000 $300,343 $520,497 $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 December 31, 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 Service Debt
- ----------------------------------------------------------------------
Projects
Under
Development
- Wholly
Owned:
- ------------
Bella Vista Woodland
III Hills, CA 264 $73,336 $59,682 $59,682 $-
Highland Westwood,
Glen II MA 102 21,620 7,069 7,069 1,384
Emerson/CRP
II Boston, MA 310 167,953 42,597 42,597 -
Redmond
Ridge Redmond, WA 321 55,457 13,648 13,648 -
77 Hudson Jersey
City, NJ 481 242,129 43,821 43,821 -
----------------------------------------------
Projects
Under
Development
- Wholly
Owned 1,478 560,495 166,817 166,817 1,384
Projects
Under
Development
- Partially
Owned:
- ------------
Mozaic
(a.k.a. Los
Union Angeles,
Station) CA 272 69,661 64,852 42,757 39,787
Vintage Ontario, CA 300 53,810 45,143 45,143 40,775
Silver Silver
Spring Spring, MD 457 147,454 40,684 40,684 -
303 Third Cambridge,
Street MA 531 248,307 55,878 55,878 -
City Lofts Chicago, IL 278 71,109 13,848 13,848 -
Alta Pacific
(2) Irvine, CA 132 46,416 21,790 21,790 28,260
----------------------------------------------
Projects
Under
Development
- Partially
Owned 1,970 636,757 242,195 220,100 108,822
----------------------------------------------
Projects
Under
Development 3,448 1,197,252 409,012 386,917 110,206
----------------------------------------------
Land Held
for
Development N/A - 254,227 254,227 50,332
----------------------------------------------
Land/Projects
Held for
and/or Under
Development 3,448 1,197,252 663,239 641,144 160,538
----------------------------------------------
Completed
Not
Stabilized:
- ------------
2400 M St Washington,
(3) D.C. 359 111,947 107,888 - 75,936
----------------------------------------------
Projects
Completed
Not
Stabilized 359 111,947 107,888 - 75,936
----------------------------------------------
Completed
and
Stabilized
During the
Quarter:
- ------------
----------------------------------------------
Projects
Completed
and
Stabilized
During the
Quarter - - - - -
----------------------------------------------
Total
Projects 3,807 $1,309,199 $771,127 $641,144 $236,474
==============================================
NOI CONTRIBUTION FROM
DEVELOPMENT PROJECTS
Projects Under
Development
Completed Not Stabilized
Completed and Stabilized
During the Quarter
Total
Development/Newly
Stabilized NOI
Contribution
Percentage Percentage Percentage
Projects Location Completed Leased Occupied
- ----------------------------------------------------------------------
Projects Under
Development - Wholly
Owned:
- -------------------------
Bella Vista III Woodland
Hills, CA 81% 3% -
Highland Glen II Westwood, MA 43% - -
Emerson/CRP II Boston, MA 33% - -
Redmond Ridge Redmond, WA 12% - -
77 Hudson Jersey City,
NJ 9% - -
Projects Under
Development - Wholly
Owned
Projects Under
Development - Partially
Owned:
- -------------------------
Mozaic (a.k.a. Union Los Angeles,
Station) CA 98% 18% 11%
Vintage Ontario, CA 80% 22% 14%
Silver Spring Silver
Spring, MD 14% - -
303 Third Street Cambridge,
MA 7% - -
City Lofts Chicago, IL 6% - -
Alta Pacific (2) Irvine, CA 22% - -
Projects Under
Development - Partially
Owned
Projects Under
Development
Land Held for Development
Land/Projects Held for
and/or Under Development
Completed Not Stabilized:
- -------------------------
2400 M St (3) Washington,
D.C. 100% 65% 58%
Projects Completed Not
Stabilized
Completed and Stabilized
During the Quarter:
- -------------------------
Projects Completed and
Stabilized During the
Quarter
Total Projects
Total
NOI CONTRIBUTION FROM DEVELOPMENT Capital Q4 2006
PROJECTS Cost (1) NOI
----------------------
Projects Under Development $1,197,252 $(456)
Completed Not Stabilized 111,947 924
Completed and Stabilized During the
Quarter - -
----------------------
Total Development/Newly Stabilized
NOI Contribution $1,309,199 $468
======================
Estimated Estimated
Completion Stabilization
Projects Location Date Date
- ----------------------------------------------------------------------
Projects Under Development -
Wholly Owned:
- ---------------------------------
Bella Vista III Woodland
Hills, CA 2Q 2007 4Q 2007
Highland Glen II Westwood,
MA 2Q 2007 1Q 2008
Emerson/CRP II Boston, MA 2Q 2008 1Q 2009
Redmond Ridge Redmond, WA 2Q 2008 3Q 2010
77 Hudson Jersey
City, NJ 2Q 2009 4Q 2010
Projects Under Development -
Wholly Owned
Projects Under Development -
Partially Owned:
- ---------------------------------
Mozaic (a.k.a. Union Station) Los
Angeles,
CA 1Q 2007 1Q 2008
Vintage Ontario, CA 3Q 2007 1Q 2008
Silver Spring Silver
Spring, MD 4Q 2008 3Q 2010
303 Third Street Cambridge,
MA 3Q 2008 1Q 2010
City Lofts Chicago, IL 3Q 2008 2Q 2009
Alta Pacific (2) Irvine, CA 4Q 2007 3Q 2008
Projects Under Development -
Partially Owned
Projects Under Development
Land Held for Development
Land/Projects Held for and/or
Under Development
Completed Not Stabilized:
- ---------------------------------
2400 M St (3) Washington,
D.C. Completed 3Q 2007
Projects Completed Not Stabilized
Completed and Stabilized During
the Quarter:
- ---------------------------------
Projects Completed and Stabilized
During the Quarter
Total Projects
NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS
Projects Under Development
Completed Not Stabilized
Completed and Stabilized During the Quarter
Total Development/Newly Stabilized NOI
Contribution
(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,
all in accordance with GAAP.
(2) Debt is primarily tax-exempt bonds that are entirely outstanding,
with $18.8 million unfunded and classified as deposits - restricted
in the consolidated balance sheets at 12/31/06.
(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 December 31, 2006
(Amounts in thousands except for project and unit amounts)
Units
------------------------------
Available for
Sale
-----------------
Project
Start Estimated
Date Close Units Sold Not
Projects Location (1) Out Date Total Closed Closed Available
- -----------------------------------------------------------------------
For Sale
- ----------
Fairway Pembroke
Greens Pines, FL Q1 2005 Q1 2007 152 150 - 2
Timber Woodin-
Ridge ville, WA Q1 2005 Q1 2007 203 199 - 4
Milano Scottsdale,
Terrace AZ Q2 2005 Q3 2007 224 153 13 58
Braewood Bothell,
WA Q2 2005 Q1 2007 84 82 - 2
South Palm Tamarac,
Place FL Q2 2005 Q3 2007 208 109 8 91
Chante-
cleer Naperville,
Lakes IL Q4 2005 Q4 2007 304 206 5 93
Fifth
Avenue Seattle,
North (2) WA Q2 2005 Q1 2007 62 56 2 4
Parkside Seattle,
WA Q4 2005 Q2 2007 44 36 - 8
Park
Blooming- Blooming-
dale dale, IL Q2 2006 Q1 2008 250 78 12 160
Pacific Playa Del
Cove Ray, CA Q3 2006 Q4 2007 80 - - 80
Belle Arts Bellevue,
WA Q4 2006 Q1 2008 128 - - 128
------------------------------
1,739 1,069 40 630
Closed Out
- ----------
Tuscany Scottsdale,
Villas AZ Q4 2004 Q1 2006 180 180 - -
Venetian I Phoenix,
& II 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 - -
Magnuson Seattle,
Pointe WA Q1 2005 Q3 2006 105 105 - -
Projects closed out
prior to 2006 1,914 1,914 - -
------------------------------
3,744 3,744 - -
Other miscellaneous
adjustments - - - -
Totals 17 5,483 4,813 40 630
==============================
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 Q1 2007 47 $9,517 $2,428
Timber Ridge Woodin-
ville, WA Q1 2005 Q1 2007 171 32,290 9,312
Milano Scottsdale,
Terrace AZ Q2 2005 Q3 2007 143 33,246 8,789
Braewood Bothell,
WA Q2 2005 Q1 2007 82 18,233 4,990
South Palm Tamarac,
Place FL Q2 2005 Q3 2007 109 20,757 3,102
Chante- Naperville,
cleer Lakes IL Q4 2005 Q4 2007 206 32,107 5,510
Fifth Avenue Seattle,
North (2) WA Q2 2005 Q1 2007 56 16,082 3,210
Parkside Seattle,
WA Q4 2005 Q2 2007 36 9,631 1,241
Park
Blooming- Blooming-
dale dale, IL Q2 2006 Q1 2008 78 11,485 1,793
Pacific Cove Playa Del
Ray, CA Q3 2006 Q4 2007 - - -
Belle Arts Bellevue,
WA Q4 2006 Q1 2008 - - -
-----------------------------
928 183,348 40,375
Closed Out
- ------------
Tuscany Scottsdale,
Villas AZ Q4 2004 Q1 2006 2 331 (85)
Venetian I & Phoenix,
II AZ Q1 2004 Q1 2006 1 204 (190)
Four Lakes Lisle, IL Q4 2001 Q2 2006 46 7,688 815
Atlas (3) Washington,
DC Q4 2004 Q2 2006 6 3,006 401
Grand Plantation,
Marquis FL Q4 2004 Q2 2006 16 2,998 549
Magnuson Seattle,
Pointe WA Q1 2005 Q3 2006 70 18,397 5,892
Projects closed out
prior to 2006 - - 1,204
-----------------------------
141 32,624 8,586
Other miscellaneous
adjustments - - -
Totals 17 1,069 $215,972 $48,961
=============================
Gross incremental gain
on sales of condominium
units $48,961
Provision for income
taxes (3,161)
------------
Net incremental gain on
sales of condominium
units 45,800
Property management and
general and
administrative expenses (5,902)
Discontinued operating
income (loss) (5,018)
Operating income (loss)
of halted conversions 731
------------
Net Income - Condominium
Division (4) $35,611
============
4Q 2006
----------------------------
Project FFO
Start Estimated Incremental
Date Close Units Sales Gain on
Projects Location (1) Out Date Closed Price Sale
- ----------------------------------------------------------------------
For Sale
- --------------
Fairway Greens Pembroke
Pines, FL Q1 2005 Q1 2007 2 $432 $105
Timber Ridge Woodin-
ville, WA Q1 2005 Q1 2007 24 4,905 1,538
Milano Terrace Scottsdale,
AZ Q2 2005 Q3 2007 28 6,118 908
Braewood Bothell,
WA Q2 2005 Q1 2007 12 2,952 536
South Palm Tamarac,
Place FL Q2 2005 Q3 2007 28 5,848 736
Chante- Naperville,
cleer Lakes IL Q4 2005 Q4 2007 54 8,778 1,628
Fifth Avenue Seattle,
North (2) WA Q2 2005 Q1 2007 6 2,112 9
Parkside Seattle,
WA Q4 2005 Q2 2007 8 2,681 (87)
Park Blooming- Blooming-
dale dale, IL Q2 2006 Q1 2008 78 11,485 1,793
Pacific Cove Playa Del
Ray, CA Q3 2006 Q4 2007 - - -
Belle Arts Bellevue,
WA Q4 2006 Q1 2008 - - -
----------------------------
240 45,311 7,166
Closed Out
- --------------
Tuscany Villas Scottsdale,
AZ Q4 2004 Q1 2006 - - (184)
Venetian I & Phoenix,
II AZ Q1 2004 Q1 2006 - - (24)
Four Lakes Lisle, IL Q4 2001 Q2 2006 - - (74)
Atlas (3) Washington,
DC Q4 2004 Q2 2006 - - (15)
Grand Marquis Plantation,
FL Q4 2004 Q2 2006 - - 32
Magnuson Seattle,
Pointe WA Q1 2005 Q3 2006 - - (348)
Projects closed out prior
to 2006 - - (9)
----------------------------
- - (622)
Other miscellaneous
adjustments - - (180)
Totals 17 240 $45,311 $6,364
============================
Gross incremental gain on
sales of condominium
units $6,364
Provision for income taxes 8,005
------------
Net incremental gain on
sales of condominium
units 14,369
Property management and
general and
administrative expenses (1,458)
Discontinued operating
income (loss) (1,564)
Operating income (loss) of
halted conversions (2,198)
------------
Net Income - Condominium
Division (4) $9,149
============
(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, interest expense and certain other items
specific to condominium conversion projects that ultimately eliminate
in consolidation. Also excludes depreciation expense on halted
conversions (active conversions are not depreciated).
Maintenance Expenses and Capitalized Improvements to Real Estate
For the Year Ended December 31, 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) 115,152 $80,984 $703 $70,012 $608 $150,996 $1,311
New
Acquisition
Properties
(7) 29,512 22,008 805 15,335 561 37,343 1,366
Other (8) 6,651 20,916 16,804 37,720
-------- --------- --------- ---------
Total 151,315 $123,908 $102,151 $226,059
======== ========= ========= =========
---------------------------------------------------------
Capitalized Improvements to Real Estate
---------------------------------------------------------
Avg. Building Avg. Avg.
Replacements Per Improvements Per Per
(4) Unit (5) Unit Total Unit
------------------- ------------------- -----------------
Established
Properties
(6) $46,094 $400 $81,127 $705 $127,221 $1,105
New
Acquisition
Properties
(7) 9,194 336 35,854 1,311 45,048 1,647
Other (8) 30,384 52,527 82,911
------------ ------------ ---------
Total $85,672 $169,508 $255,180
============ ============ =========
------------------------
Total Expenditures
------------------------
Avg.
Grand Per
Total Unit
------------------------
Established Properties (6) $278,217 $2,416
New Acquisition Properties (7) 82,391 3,013
Other (8) 120,631
------------
Total $481,239
============
(1) Total units exclude 10,846 unconsolidated units and 3,555 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 27,346 units.
(8) Includes properties either Partially Owned or sold during the
period, commercial space, condominium conversions and $21.4 million
included in building improvements spent on seventeen specific assets
related to major renovations and repositioning of these assets.
Discontinued Operations
(Amounts in thousands)
Year Ended Quarter Ended
December 31, December 31,
--------------------- ---------------------
2006 2005 2006 2005
--------------------- ---------------------
REVENUES
Rental income $173,907 $365,492 $5,847 $77,585
Fee and asset management - 908 - 215
---------- ---------- ---------- ----------
Total revenues 173,907 366,400 5,847 77,800
---------- ---------- ---------- ----------
EXPENSES (1)
Property and maintenance 65,871 120,104 4,369 26,846
Real estate taxes and
insurance 20,028 46,069 (313) 9,722
Property management 8,695 10,409 (23) 2,574
Depreciation 29,898 89,364 914 18,533
General and administrative 579 1,142 (80) 218
Impairment 351 - - -
---------- ---------- ---------- ----------
Total expenses 125,422 267,088 4,867 57,893
---------- ---------- ---------- ----------
Discontinued operating
income 48,485 99,312 980 19,907
Interest and other income 1,507 1,411 (10) 554
Interest (2):
Expense incurred, net (24,918) (31,527) (10,071) (5,687)
Amortization of
deferred financing
costs (832) (663) (155) (17)
---------- ---------- ---------- ----------
Discontinued operations 24,242 68,533 (9,256) 14,757
Minority Interests -
Operating Partnership (1,593) (4,626) 606 (989)
---------- ---------- ---------- ----------
Discontinued operations,
net of minority interests 22,649 63,907 (8,650) 13,768
---------- ---------- ---------- ----------
Net gain on sales of
discontinued operations 1,016,443 697,655 494,115 194,602
Minority Interests -
Operating Partnership (66,780) (47,092) (32,365) (13,038)
---------- ---------- ---------- ----------
Gain on sales of
discontinued operations,
net of minority interests 949,663 650,563 461,750 181,564
---------- ---------- ---------- ----------
Discontinued operations,
net of minority interests $972,312 $714,470 $453,100 $195,332
========== ========== ========== ==========
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.
2007 Earnings Guidance (per share diluted)
- ----------------------------------------------------------------------
Q1 2007 2007
---------------- ----------------
Expected EPS (1) $0.69 to $0.73 $3.01 to $3.11
Add: Expected depreciation
expense 0.47 1.96
Less: Expected net gain on sales
(1) (0.68) (2.72)
---------------- ----------------
Expected FFO (2) $0.48 to $0.52 $2.25 to $2.35
================ ================
Same-Store Assumptions
-------------------------------------------------
2007
----------------
Physical occupancy 95.0%
Revenue change 5.00% to 6.00%
Expense change 3.50% to 4.50%
NOI change 5.50% to 7.50%
Acquisitions $2.0 billion
Dispositions $2.0 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