Exhibit 99.1
Equity Residential Reports First Quarter Results
CHICAGO--(BUSINESS WIRE)--May 1, 2007--Equity Residential (NYSE:
EQR) today reported results for the quarter ended March 31, 2007. All
per share results are reported on a fully diluted basis.
"Our first quarter operating performance was in line with our
expectations with very good occupancy levels across our largest
markets and strong revenue growth despite working off of a very
challenging comparison to first quarter 2006," said David J.
Neithercut, Equity Residential's President and CEO. "We continue to
see good job growth and limited new supply in many of our markets,
reinforcing our belief that they will produce good results for the
remainder of the year. As we head into our primary leasing season,
however, we have recently begun to see certain markets experiencing
somewhat slower sequential rental rate growth than we had hoped.
Nevertheless, we still expect the portfolio to produce good full year
revenue growth."
First Quarter 2007
For the quarter ended March 31, 2007, the company reported
earnings of $0.40 per share compared to $1.25 per share in the first
quarter of 2006. The quarterly decrease is primarily attributable to
$0.82 per share in higher gains on property sales in the first quarter
of 2006.
Funds from Operations (FFO) for the quarter ended March 31, 2007
were $0.55 per share compared to $0.56 per share in the same period of
2006. The quarterly decrease is primarily attributable to higher gains
on condominium sales in the first quarter of 2006.
The company's FFO of $0.55 per share for the quarter exceeded the
guidance range of $0.48 to $0.52 per share provided by the company in
its fourth quarter 2006 earnings release on February 6, 2007. The
items describing the difference between actual FFO per share for the
quarter and the midpoint of the company's original guidance range are
listed on page 24 of this release. The difference was primarily due to
changes in timing on certain anticipated income and expense items. The
main items were:
-- Certain expenses were postponed to future quarters in 2007
resulting in approximately $1.6 million less general and
administrative expenses than projected;
-- The company recorded a reduction to general and administrative
expense of $1.6 million due to the successful resolution of a
certain lawsuit in Florida resulting in the reversal of the
majority of a previously established litigation reserve;
-- Due to a delay in the timing of certain dispositions to future
quarters in 2007, the company incurred approximately $4.9
million less than projected in prepayment penalties and
write-offs of unamortized deferred financing costs in
connection with debt extinguishments; and
-- The company's condominium conversion business closed
additional units in the first quarter that were originally
anticipated to close in subsequent quarters, resulting in
additional net income and FFO of approximately $2.0 million.
"Same-Store" Results
On a "same-store" first quarter to first quarter comparison, which
includes 133,703 units, revenues increased 5.2 percent, expenses
increased 5.2 percent and NOI increased 5.2 percent. The increase in
same-store revenues, which came in as expected, was driven primarily
by increases in average rental rates and a slight increase in
occupancy. The increase in same-store expenses was slightly higher
than expected. Certain maintenance related expenses were front loaded
and should trend lower throughout the remainder of the year. In
addition, the company incurred higher than anticipated weather related
expenses in Denver and Washington, D.C.
Acquisitions/Dispositions
During the first quarter of 2007, the company acquired thirteen
properties, consisting of 3,899 units, for an aggregate purchase price
of $674.2 million at an average capitalization (cap) rate of 5.3
percent and three land parcels for $42.5 million.
Also during the quarter, the company sold 12 properties,
consisting of 3,711 units, for an aggregate sale price of $253.9
million at an average cap rate of 6.1 percent generating an unlevered
internal rate of return (IRR) of 10.0 percent. In addition, the
company sold 157 condominium units for $37.3 million.
Share Repurchase
During the first quarter of 2007, the company repurchased and
retired 4,140,254 of its common shares at an average purchase price of
$48.76 per share for an aggregate purchase of approximately $201.9
million. The company's Board of Trustees has authorized an increase of
approximately $200 million in the company's share repurchase program,
bringing the amount currently available under the plan to $500
million.
"We were pleased to take advantage of the excellent opportunity
that the recent pullback in Equity Residential's common share price
created for us to buy our portfolio at a significant discount to the
value of our assets. Our Board has given us authorization to increase
the amount we have available and we will continue to create value for
our shareholders by buying our own portfolio whenever an appropriate
discount exists," said Mr. Neithercut.
New Disclosure
On pages 24 and 25 of this release, the company has provided new
disclosure including:
-- a reconciliation of guidance midpoint First Quarter 2007 FFO
to actual First Quarter 2007 FFO;
-- a breakout of items included in FFO in the First Quarters of
both 2006 and 2007 that by their nature are not comparable
from period to period; and
-- additional assumptions used to create 2007 earnings guidance.
Second Quarter 2007 Results
Equity Residential expects to announce second quarter 2007 results
on Tuesday, July 31, 2007 and host a conference call to discuss those
results at Noon CT on Wednesday, August 1, 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 618 properties consisting of 166,324 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 2007 will take place tomorrow, Wednesday, May
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)
Quarter Ended
March 31,
-------------------------
2007 2006
------------ ------------
REVENUES
Rental income $523,898 $459,971
Fee and asset management 2,267 2,487
------------ ------------
Total revenues 526,165 462,458
------------ ------------
EXPENSES
Property and maintenance 141,581 122,061
Real estate taxes and insurance 58,977 46,071
Property management 24,904 23,642
Fee and asset management 2,341 2,168
Depreciation 152,821 128,676
General and administrative 9,966 13,040
Impairment 236 566
------------ ------------
Total expenses 390,826 336,224
------------ ------------
Operating income 135,339 126,234
Interest and other income 2,444 2,352
Interest:
Expense incurred, net (111,660) (104,555)
Amortization of deferred financing costs (2,564) (2,738)
------------ ------------
Income before allocation to Minority
Interests, loss from investments in
unconsolidated entities, net gain on sales
of unconsolidated entities and discontinued
operations 23,559 21,293
Allocation to Minority Interests:
Operating Partnership, net (939) (543)
Preference Interests and Units (223) (1,099)
Partially Owned Properties (592) (1,521)
Premium on redemption of Preference
Interests - (674)
Loss from investments in unconsolidated
entities (229) (230)
Net gain on sales of unconsolidated entities - 329
------------ ------------
Income from continuing operations, net of
minority interests 21,576 17,555
Discontinued operations, net of minority
interests 104,661 360,260
------------ ------------
Net income 126,237 377,815
Preferred distributions (7,424) (10,095)
------------ ------------
Net income available to Common Shares $118,813 $367,720
============ ============
Earnings per share - basic:
Income from continuing operations available
to Common Shares $0.05 $0.03
============ ============
Net income available to Common Shares $0.41 $1.27
============ ============
Weighted average Common Shares outstanding 292,251 288,880
============ ============
Earnings per share - diluted:
Income from continuing operations available
to Common Shares $0.05 $0.03
============ ============
Net income available to Common Shares $0.40 $1.25
============ ============
Weighted average Common Shares outstanding 316,265 314,049
============ ============
Distributions declared per Common Share
outstanding $0.4625 $0.4425
============ ============
EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS
(Amounts in thousands except per share data)
(Unaudited)
Quarter Ended
March 31,
-------------------------
2007 2006
------------ ------------
Net income $126,237 $377,815
Allocation to Minority Interests - Operating
Partnership, net 939 543
Adjustments:
Depreciation 152,821 128,676
Depreciation - Non-real estate additions (2,035) (1,796)
Depreciation - Partially Owned and
Unconsolidated Properties 943 1,550
Net gain on sales of unconsolidated
entities - (329)
Discontinued operations:
Depreciation 1,853 18,047
Gain on sales of discontinued
operations, net of minority interests (104,810) (347,953)
Net incremental gain on sales of
condominium units 4,692 7,127
Provision for income taxes - Non-condo
sales (187) -
Minority Interests - Operating
Partnership (10) 869
------------ ------------
FFO (1)(2) 180,443 184,549
Preferred distributions (7,424) (10,095)
------------ ------------
FFO available to Common Shares and OP Units
- basic $173,019 $174,454
============ ============
FFO available to Common Shares and OP Units
- diluted $173,224 $174,700
============ ============
FFO per share and OP Unit - basic $0.56 $0.56
============ ============
FFO per share and OP Unit - diluted $0.55 $0.56
============ ============
Weighted average Common Shares and OP Units
outstanding - basic 311,698 309,335
============ ============
Weighted average Common Shares and OP Units
outstanding - diluted 316,794 314,686
============ ============
(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 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)
March 31, December 31,
2007 2006
------------ ------------
ASSETS
Investment in real estate
Land $3,391,105 $3,217,672
Depreciable property 13,784,447 13,376,359
Projects under development 384,534 399,131
Land held for development 296,990 242,013
------------ ------------
Investment in real estate 17,857,076 17,235,175
Accumulated depreciation (3,103,329) (3,022,480)
------------ ------------
Investment in real estate, net 14,753,747 14,212,695
Cash and cash equivalents 171,742 260,277
Investments in unconsolidated entities 4,196 4,448
Deposits - restricted 188,958 391,825
Escrow deposits - mortgage 23,426 25,528
Deferred financing costs, net 46,434 43,384
Other assets 133,391 124,062
------------ ------------
Total assets $15,321,894 $15,062,219
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $3,105,938 $3,178,223
Notes, net 4,420,467 4,419,433
Lines of credit 947,500 460,000
Accounts payable and accrued expenses 118,319 96,699
Accrued interest payable 70,303 91,172
Other liabilities 367,567 311,557
Security deposits 60,474 58,072
Distributions payable 150,577 151,382
------------ ------------
Total liabilities 9,241,145 8,766,538
------------ ------------
Commitments and contingencies
Minority Interests:
Operating Partnership 352,639 372,961
Preference Interests and Units 11,684 11,684
Partially Owned Properties 20,995 26,814
------------ ------------
Total Minority Interests 385,318 411,459
------------ ------------
Shareholders' equity:
Preferred Shares of beneficial interest,
$0.01 par value; 100,000,000 shares
authorized; 2,746,850 shares issued and
outstanding as of March 31, 2007 and
2,762,950 shares issued and outstanding
as of December 31, 2006 386,171 386,574
Common Shares of beneficial interest,
$0.01 par value; 1,000,000,000 shares
authorized; 290,747,000 shares issued and
outstanding as of March 31, 2007 and
293,551,633 shares issued and outstanding
as of December 31, 2006 2,907 2,936
Paid in capital 5,176,897 5,349,194
Retained earnings 143,024 159,528
Accumulated other comprehensive loss (13,568) (14,010)
------------ ------------
Total shareholders' equity 5,695,431 5,884,222
------------ ------------
Total liabilities and shareholders'
equity $15,321,894 $15,062,219
============ ============
EQUITY RESIDENTIAL
Portfolio Summary
As of March 31, 2007
% of 2007 Average
% of Total Stabilized Rental
Markets Properties Units Units NOI Rate (1)
-------------- ---------- -------- ---------- ---------- ---------
1 New York Metro
Area 18 5,443 3.3% 8.5% $2,459
2 South Florida 36 11,865 7.1% 8.4% 1,298
3 Los Angeles 37 7,709 4.6% 7.3% 1,667
4 DC Northern
Virginia 25 8,473 5.1% 7.3% 1,529
5 Seattle/Tacoma 49 11,285 6.8% 6.8% 1,163
6 Boston 37 6,889 4.2% 6.4% 1,479
7 Phoenix 41 11,861 7.1% 5.8% 934
8 San Francisco
Bay Area 27 6,501 3.9% 4.9% 1,552
9 Denver 29 9,547 5.7% 4.6% 907
10 Atlanta 35 10,719 6.5% 4.5% 883
11 Orlando 24 7,543 4.5% 4.5% 1,054
12 San Diego 13 4,051 2.4% 3.7% 1,583
13 Inland Empire
CA 15 4,655 2.8% 3.4% 1,342
14 Dallas/Ft
Worth 31 8,731 5.3% 3.1% 830
15 Orange County 9 3,175 1.9% 3.0% 1,512
16 New England
(excl Boston) 41 5,823 3.5% 2.9% 1,061
17 Suburban
Maryland 21 5,145 3.1% 2.9% 1,051
18 Jacksonville 12 3,755 2.3% 1.7% 895
19 Portland OR 11 3,713 2.2% 1.6% 891
20 Raleigh/Durham 16 4,032 2.4% 1.5% 740
---------- -------- ---------- ---------- ---------
Top 20 Total 527 140,915 84.7% 92.8% 1,212
21 Houston 12 3,229 1.9% 1.4% 893
22 Tampa/Ft Myers 10 3,141 1.9% 1.3% 930
23 Austin 12 3,671 2.2% 1.3% 800
24 Charlotte 11 3,391 2.1% 0.9% 671
25 Nashville 7 1,989 1.2% 0.7% 829
26 Central Valley
CA 10 1,595 1.0% 0.5% 1,038
27 Minneapolis/St
Paul 2 319 0.2% 0.1% 1,319
28 Other 16 3,871 2.3% 1.0% 863
---------- -------- ---------- ---------- ---------
Total 607 162,121 97.5% 100.0% 1,164
Condominium
Conversion 10 643 0.4% - -
Military
Housing 1 3,560 2.1% - -
---------- -------- ---------- ---------- ---------
Grand Total 618 166,324 100.0% 100.0% $1,164
========== ======== ========== ========== =========
(1) Average rental rate is defined as total rental revenues divided by
the weighted average occupied units for the month of March 2007.
EQUITY RESIDENTIAL
Portfolio as of March 31, 2007
Properties Units
----------- -----------
Wholly Owned
Properties 545 146,473
Partially Owned
Properties:
Consolidated 27 5,445
Unconsolidated 45 10,846
Military Housing
(Fee Managed) 1 3,560
----------- -----------
618 166,324
Portfolio Rollforward Q1 2007
Properties Units $ Thousands Cap Rate
------------ ----------- ----------- -----------
12/31/2006 617 165,716
Acquisitions:
Rental Properties 13 3,899 $674,156 5.3%
Land Parcels
(three) - - $42,450
Dispositions:
Rental Properties (12) (3,711) $(253,930) 6.1%
Condominium Units (2) (157) $(37,280)
Completed
Developments 2 572
Configuration Changes - 5
------------ -----------
3/31/2007 618 166,324
EQUITY RESIDENTIAL
First Quarter 2007 vs. First Quarter 2006
Quarter over Quarter Same-Store Results/Statistics
$ in Thousands (except for Average Rental Rate) - 133,703 Same-Store
Units
Results Statistics
----------------------------- --------------------------
Average
Rental
Rate
Description Revenues Expenses NOI (1) (2) Occupancy Turnover
- ------------- --------- --------- --------- ------- --------- --------
Q1 2007 $448,401 $174,840 $273,561 $1,181 94.8% (13.5%)
Q1 2006 $426,236 $166,133 $260,103 $1,124 94.6% (13.9%)
--------- --------- --------- ------- --------- --------
Change $22,165 $8,707 $13,458 $57 0.2% 0.4%
========= ========= ========= ======= ========= ========
Change 5.2% 5.2% 5.2% 5.1%
First Quarter 2007 vs. Fourth Quarter 2006
Sequential Quarter over Quarter Same-Store Results/Statistics
$ in Thousands (except for Average Rental Rate) - 141,485 Same-Store
Units
Results Statistics
----------------------------- --------------------------
Average
Rental
Rate
Description Revenues Expenses NOI (1) (2) Occupancy Turnover
- ------------- --------- --------- --------- ------- --------- --------
Q1 2007 $477,344 $187,085 $290,259 $1,189 94.8% (13.6%)
Q4 2006 $473,686 $182,176 $291,510 $1,183 94.5% (15.4%)
--------- --------- --------- ------- --------- --------
Change $3,658 $4,909 $(1,251) $6 0.3% 1.8%
========= ========= ========= ======= ========= ========
Change 0.8% 2.7% (0.4%) 0.5%
(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.
EQUITY RESIDENTIAL
Same-Store NOI Reconciliation
First Quarter 2007 vs. First Quarter 2006
The following table presents a reconciliation of operating income per
the consolidated statements of operations to NOI for the First
Quarter 2007 Same-Store Properties:
Quarter Ended
March 31,
-------------------------
2007 2006
------------ ------------
(Amounts in thousands)
Operating income $135,339 $126,234
Adjustments:
Non-same-store operating results (24,875) (8,094)
Fee and asset management revenue (2,267) (2,487)
Fee and asset management expense 2,341 2,168
Depreciation 152,821 128,676
General and administrative 9,966 13,040
Impairment 236 566
------------ ------------
Same-store NOI $273,561 $260,103
============ ============
EQUITY RESIDENTIAL
First Quarter 2007 vs. First Quarter 2006
Same-Store Results by Market
-------------------------------------------------------------------
1Q 2007 1Q 2007 1Q 2007
% of Average Weighted
Actual Rental Average
Occupancy
Markets Units NOI Rate (1) %
-------------------------------------------------------------------
1 New York Metro Area 5,153 8.8% $2,525 96.1%
2 Los Angeles 6,221 7.3% 1,672 95.2%
3 Seattle/Tacoma 8,532 6.5% 1,198 94.6%
4 DC Northern Virginia 6,662 6.3% 1,430 94.9%
5 South Florida 7,662 6.2% 1,316 94.3%
6 San Francisco Bay Area 5,990 6.1% 1,505 95.5%
7 Boston 5,761 6.0% 1,722 93.2%
8 Phoenix 9,247 5.5% 925 94.2%
9 Atlanta 8,795 4.7% 882 95.7%
10 Orlando 6,473 4.3% 1,043 94.0%
11 Denver 7,775 4.3% 844 95.2%
12 San Diego 3,486 3.8% 1,568 94.5%
13 Dallas/Ft Worth 7,151 3.4% 862 94.8%
14 Inland Empire CA 3,712 3.3% 1,311 94.3%
15 New England (excl Boston) 5,823 3.3% 1,061 93.9%
16 Orange County 3,013 3.3% 1,518 95.6%
17 Suburban Maryland 4,041 2.5% 1,063 93.3%
18 Jacksonville 3,515 1.9% 900 94.6%
19 Portland OR 3,409 1.9% 907 95.1%
20 Austin 3,671 1.6% 810 96.8%
----------------------------------------
Top 20 Markets 116,092 91.0% 1,228 94.8%
All Other Markets 17,611 9.0% 866 95.1%
----------------------------------------
Total 133,703 100.0% $1,181 94.8%
========================================
--------------------------------------------------
Increase (Decrease) from Prior Quarter
-------------------------------------------------------------------
Average
Rental
Markets Revenues Expenses NOI Rate (1) Occupancy
-------------------------------------------------------------------
1 New York Metro
Area 7.1% 4.3% 8.8% 6.7% 0.4%
2 Los Angeles 5.6% 1.9% 7.5% 5.1% 0.5%
3 Seattle/Tacoma 6.6% 3.4% 8.8% 6.6% (0.1%)
4 DC Northern
Virginia 5.9% 14.3% 1.6% 5.4% 0.5%
5 South Florida 2.3% 8.6% (1.6%) 4.5% (2.0%)
6 San Francisco Bay
Area 8.0% 3.9% 10.4% 7.5% 0.3%
7 Boston 1.8% 0.4% 2.8% 1.9% (0.1%)
8 Phoenix 7.2% 9.1% 6.0% 9.0% (1.6%)
9 Atlanta 5.8% 4.3% 6.9% 4.7% 0.9%
10 Orlando 4.0% 10.6% 0.2% 4.8% (0.8%)
11 Denver 4.4% 10.7% 1.0% 4.1% 0.3%
12 San Diego 4.1% 2.5% 4.9% 4.4% (0.3%)
13 Dallas/Ft Worth 3.0% 4.0% 2.2% 2.5% 0.5%
14 Inland Empire CA 5.1% 6.2% 4.5% 3.3% 1.6%
15 New England (excl
Boston) 7.0% 0.9% 13.4% 3.9% 2.7%
16 Orange County 4.7% 1.5% 6.3% 4.3% 0.3%
17 Suburban Maryland 1.1% 12.8% (6.3%) 2.3% (1.1%)
18 Jacksonville 2.7% 5.6% 0.7% 3.2% (0.5%)
19 Portland OR 8.4% 3.1% 12.2% 8.3% 0.1%
20 Austin 9.1% 0.9% 18.0% 6.8% 2.0%
--------------------------------------------------
Top 20 Markets 5.2% 5.4% 5.1% 5.1% 0.1%
All Other Markets 5.0% 4.3% 5.7% 4.4% 0.5%
--------------------------------------------------
Total 5.2% 5.2% 5.2% 5.1% 0.2%
==================================================
(1) Average rental rate is defined as total rental revenues divided by
the weighted average occupied units for the period.
EQUITY RESIDENTIAL
First Quarter 2007 vs. Fourth Quarter 2006
Sequential Same-Store Results by Market
-------------------------------------------------------------------
1Q 2007 1Q 2007 1Q 2007
% of Average Weighted
Actual Rental Average
Occupancy
Markets Units NOI Rate (1) %
-------------------------------------------------------------------
1 New York Metro Area 5,288 8.7% $2,544 96.2%
2 Los Angeles 6,754 7.4% 1,654 94.8%
3 South Florida 9,347 7.1% 1,307 94.3%
4 DC Northern Virginia 7,286 6.6% 1,449 94.9%
5 Seattle/Tacoma 9,060 6.6% 1,200 94.6%
6 Boston 6,289 6.3% 1,731 93.1%
7 San Francisco Bay Area 6,242 5.9% 1,486 95.4%
8 Phoenix 9,247 5.2% 925 94.2%
9 Atlanta 9,353 4.8% 900 95.3%
10 Denver 8,807 4.7% 861 95.2%
11 Orlando 6,959 4.4% 1,046 94.1%
12 San Diego 3,822 3.9% 1,572 94.4%
13 Dallas/Ft Worth 7,301 3.3% 870 94.8%
14 New England (excl Boston) 5,823 3.1% 1,061 93.9%
15 Orange County 3,013 3.1% 1,518 95.6%
16 Inland Empire CA 4,355 2.6% 1,328 94.2%
17 Suburban Maryland 4,041 2.4% 1,063 93.3%
18 Jacksonville 3,515 1.8% 900 94.6%
19 Portland OR 3,409 1.8% 907 95.1%
20 Raleigh/Durham 3,640 1.6% 755 95.2%
----------------------------------------
Top 20 Markets 123,551 91.3% 1,235 94.6%
All Other Markets 17,934 8.7% 876 95.5%
----------------------------------------
Total 141,485 100.0% $1,189 94.8%
========================================
--------------------------------------------------
Increase (Decrease) from Prior Quarter
-------------------------------------------------------------------
Average
Rental
Markets Revenues Expenses NOI Rate (1) Occupancy
-------------------------------------------------------------------
1 New York Metro
Area 0.8% 4.1% (1.0%) 1.2% (0.4%)
2 Los Angeles 1.1% 1.2% 1.0% 1.1% 0.0%
3 South Florida 0.3% 1.5% (0.5%) (0.6%) 0.8%
4 DC Northern
Virginia 1.4% 5.4% (0.8%) (0.3%) 1.7%
5 Seattle/Tacoma 2.0% 1.7% 2.2% 0.9% 1.0%
6 Boston (0.5%) 5.3% (4.1%) 0.4% (0.8%)
7 San Francisco Bay
Area 2.0% 5.3% 0.2% 1.6% 0.4%
8 Phoenix 0.9% 4.2% (1.1%) 1.1% (0.2%)
9 Atlanta 0.3% 3.8% (2.2%) 0.0% 0.3%
10 Denver 1.2% 3.8% (0.3%) 0.8% 0.4%
11 Orlando 0.0% 3.7% (2.3%) (0.2%) 0.1%
12 San Diego 0.4% 1.0% 0.2% 1.9% (1.4%)
13 Dallas/Ft Worth 1.2% (5.4%) 7.8% 0.5% 0.7%
14 New England (excl
Boston) (0.6%) 6.1% (6.2%) 0.1% (0.7%)
15 Orange County (0.2%) (3.9%) 1.7% 0.2% (0.3%)
16 Inland Empire CA 0.4% 3.9% (1.4%) 1.2% (0.8%)
17 Suburban Maryland 1.9% 9.4% (3.3%) (1.8%) 3.3%
18 Jacksonville 0.2% 5.1% (2.9%) (0.2%) 0.4%
19 Portland OR 2.8% (0.3%) 5.0% 1.9% 0.8%
20 Raleigh/Durham (1.0%) 2.6% (3.4%) (0.3%) (0.7%)
--------------------------------------------------
Top 20 Markets 0.8% 3.0% (0.6%) 0.5% 0.3%
All Other Markets 0.8% 0.1% 1.4% 0.8% 0.1%
--------------------------------------------------
Total 0.8% 2.7% (0.4%) 0.5% 0.3%
==================================================
(1) Average rental rate is defined as total rental revenues divided by
the weighted average occupied units for the period.
EQUITY RESIDENTIAL
Debt Summary as of March 31, 2007
(Amounts in thousands)
Weighted
Weighted Average
% of Average Maturities
Amounts (1) Total Rates (1) (years)
----------- --------- --------- ----------
Secured $3,105,938 36.7% 5.73% 6.3
Unsecured 5,367,967 63.3% 5.69% 6.5
----------- --------- --------- ----------
Total $8,473,905 100.0% 5.71% 6.4
=========== ========= ========= ==========
Fixed Rate Debt:
Secured - Conventional $2,158,687 25.5% 6.23% 4.5
Secured - Tax Exempt 11,200 0.1% 6.46% 19.7
Unsecured - Public/Private 4,162,825 49.1% 5.69% 6.6
Unsecured - Tax Exempt 111,390 1.3% 5.06% 22.1
----------- --------- --------- ----------
Fixed Rate Debt 6,444,102 76.0% 5.86% 6.2
----------- --------- --------- ----------
Floating Rate Debt:
Secured - Conventional 414,162 4.9% 6.04% 2.0
Secured - Tax Exempt 521,889 6.2% 3.44% 16.9
Unsecured - Public 146,252 1.7% 6.53% 2.2
Unsecured - Revolving
Credit Facility 947,500 11.2% 5.63% 4.9
----------- --------- --------- ----------
Floating Rate Debt 2,029,803 24.0% 5.13% 7.2
----------- --------- --------- ----------
Total $8,473,905 100.0% 5.71% 6.4
=========== ========= ========= ==========
(1) Net of the effect of any derivative instruments. Weighted average
rates are for the quarter ended March 31, 2007.
Note: The Company capitalized interest of approximately $7.9 million
and $4.0 million for the quarters ended March 31, 2007 and 2006,
respectively.
Debt Maturity Schedule as of March 31, 2007
(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 $237,777 $85,147 $322,924 3.8% 6.60% 6.67%
2008 479,938 119,571 599,509 7.1% 6.65% 6.61%
2009 457,821 380,367 838,188 9.9% 6.35% 5.35%
2010 279,576 - 279,576 3.3% 7.05% 7.05%
2011 (2) 1,448,748 24,150 1,472,898 17.4% 5.52% 5.49%
2012 (3) 555,380 947,500 1,502,880 17.7% 6.49% 5.94%
2013 567,010 - 567,010 6.7% 5.93% 5.93%
2014 503,771 34,460 538,231 6.4% 5.27% 5.26%
2015 357,579 - 357,579 4.2% 6.40% 6.40%
2016 1,088,845 - 1,088,845 12.8% 5.32% 5.32%
2017+ 467,657 438,608 906,265 10.7% 6.70% 5.55%
----------- ----------- ----------- ------ --------- --------
Total $6,444,102 $2,029,803 $8,473,905 100.0% 5.97% 5.77%
=========== =========== =========== ====== ========= ========
(1) Net of the effect of any derivative instruments. Weighted average
rates are as of March 31, 2007.
(2) 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.
(3) Includes $947.5 million outstanding on the Company's $1.5 billion
unsecured revolving credit facility, which matures on February 28,
2012.
EQUITY RESIDENTIAL
Unsecured Debt Summary as of March 31, 2007
(Amounts in thousands)
Unamortized
Coupon Due Face Premium/ Net
Rate Date Amount (Discount) Balance
-------------------------------------------------------
Fixed Rate
Notes:
7.625% 04/15/07 $50,000 $7 $50,007
6.900% 08/01/07 50,000 (8) 49,992
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 (605) 299,395
6.950% 03/02/11 300,000 3,445 303,445
6.625% 03/15/12 400,000 (1,456) 398,544
5.200% 04/01/13 400,000 (710) 399,290
5.250% 09/15/14 500,000 (458) 499,542
6.584% 04/13/15 300,000 (892) 299,108
5.125% 03/15/16 500,000 (480) 499,520
5.375% 08/01/16 400,000 (1,732) 398,268
7.125% 10/15/17 150,000 (684) 149,316
7.570% 08/15/26 140,000 - 140,000
3.850% 08/15/26 (3) 650,000 (7,888) 642,112
Floating Rate
Adjustments (2) (150,000) - (150,000)
-----------------------------------
4,174,286 (11,461) 4,162,825
-----------------------------------
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
FAS 133
Adjustments -
net (2) (3,748) - (3,748)
-----------------------------------
146,252 - 146,252
-----------------------------------
Revolving
Credit
Facility: 02/28/12 (4) 947,500 - 947,500
-----------------------------------
Total
Unsecured
Debt $5,379,428 $(11,461) $5,367,967
===================================
(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 $1.5 billion
unsecured revolving credit facility which matures on February 28,
2012.
EQUITY RESIDENTIAL
Selected Unsecured Public Debt Covenants
March 31, December 31,
2007 2006
------------ ------------
Total Debt to Adjusted Total Assets (not to
exceed 60%) 46.1% 44.6%
Secured Debt to Adjusted Total Assets (not to
exceed 40%) 16.9% 17.6%
Consolidated Income Available for Debt
Service to Maximum Annual Service Charges
(must be at least 1.5 to 1) 2.63 2.59
Total Unsecured Assets to Unsecured Debt
(must be at least 150%) 236.8% 250.6%
These selected covenants relate to ERP Operating Limited Partnership's
("ERPOP") outstanding unsecured public debt. Equity Residential is
the general partner of ERPOP.
EQUITY RESIDENTIAL
Capital Structure as of March 31, 2007
(Amounts in thousands except for share and per share amounts)
Secured Debt $3,105,938 36.7%
Unsecured Debt 4,420,467 52.1%
Revolving
Credit
Facility 947,500 11.2%
------------ --------
Total Debt 8,473,905 100.0% 35.5%
Common Shares 290,747,000 93.8%
OP Units 19,311,285 6.2%
------------ --------
Total Shares and
OP Units 310,058,285 100.0%
Common Share
Equivalents (see
below) 838,519
------------
Total outstanding
at quarter-end 310,896,804
Common Share
Price at March
31, 2007 $48.23
------------
14,994,553 97.6%
Perpetual
Preferred Equity
(see below) 375,000 2.4%
------------ --------
Total Equity 15,369,553 100.0% 64.5%
Total Market
Capitalization $23,843,458 100.0%
Convertible Preferred Equity as of March 31, 2007
(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 11/1/98 419,216 $10,480 $1.75
7.00% Series H 6/30/98 27,634 691 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 684,217 $22,855
Annual Weighted Common
Dividend Average Conversion Share
Series Amount Rate Ratio Equivalents
- ---------------------- ---------- ------------ ----------- -----------
Preferred Shares:
7.00% Series E $734 1.1128 466,504
7.00% Series H 48 1.4480 40,014
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 $1,674 7.32% 838,519
Perpetual Preferred Equity as of March 31, 2007
(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%
EQUITY RESIDENTIAL
Common Share and Operating Partnership Unit (OP Unit)
Weighted Average Amounts Outstanding
1Q 2007 1Q 2006
------------ ------------
Weighted Average Amounts Outstanding for Net
Income Purposes:
Common Shares - basic 292,251,267 288,880,193
Shares issuable from assumed
conversion/vesting of:
- OP Units 19,446,271 20,454,349
- share options/restricted shares 4,567,631 4,714,712
------------ ------------
Total Common Shares and OP Units - diluted 316,265,169 314,049,254
Weighted Average Amounts Outstanding for FFO
Purposes:
Common Shares - basic 292,251,267 288,880,193
OP Units - basic 19,446,271 20,454,349
------------ ------------
Total Common Shares and OP Units - basic 311,697,538 309,334,542
Shares issuable from assumed
conversion/vesting of:
- convertible preferred shares/units 528,667 636,811
- share options/restricted shares 4,567,631 4,714,712
------------ ------------
Total Common Shares and OP Units - diluted 316,793,836 314,686,065
Period Ending Amounts Outstanding:
Common Shares 290,747,000
OP Units 19,311,285
------------
Total Common Shares and OP Units 310,058,285
EQUITY RESIDENTIAL
Partially Owned Entities as of March 31, 2007
(Amounts in thousands except for project and unit amounts)
Consolidated
----------------------------------------------------
Development Projects
--------------------------------
Held for Completed, Completed
and/or Not and
Under Stabil- Stabil-
Development ized (4) ized Other Total
----------- ---------- --------- --------- ---------
Total projects(1) - 2 4 21 27
----------- ---------- --------- --------- ---------
Total units(1) - 572 977 3,896 5,445
----------- ---------- --------- --------- ---------
Operating
information for
the quarter ended
3/31/07 (at
100%):
Operating
revenue $2 $325 $3,907 $13,752 $17,986
Operating
expenses 189 832 1,317 4,870 7,208
----------- ---------- --------- --------- ---------
Net operating
income (loss) (187) (507) 2,590 8,882 10,778
Depreciation - 192 1,459 3,416 5,067
Other - - - 29 29
----------- ---------- --------- --------- ---------
Operating income
(loss) (187) (699) 1,131 5,437 5,682
Interest and
other income 20 - 34 255 309
Interest:
Expense
incurred, net (278) (333) (837) (5,018) (6,466)
Amortization
of deferred
financing
costs - - (12) (28) (40)
----------- ---------- --------- --------- ---------
Net income
(loss) $(445) $(1,032) $316 $646 $(515)
=========== ========== ========= ========= =========
Debt - Secured
(2):
EQR Ownership
(3) $98,860 $90,237 $61,000 $286,957 $537,054
Minority
Ownership - - - 13,321 13,321
----------- ---------- --------- --------- ---------
Total (at 100%) $98,860 $90,237 $61,000 $300,278 $550,375
=========== ========== ========= ========= =========
Unconsolidated
--------------
Institutional
Joint
Ventures
--------------
Total projects(1) 45
--------------
Total units(1) 10,846
--------------
Operating
information for
the quarter ended
3/31/07 (at
100%):
Operating
revenue $26,136
Operating
expenses 12,847
--------------
Net operating
income (loss) 13,289
Depreciation 5,366
Other 120
--------------
Operating income
(loss) 7,803
Interest and
other income 138
Interest:
Expense
incurred, net (9,361)
Amortization
of deferred
financing
costs (154)
--------------
Net income
(loss) $(1,574)
==============
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 substantially 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.
(4) Projects included here are substantially complete. However, they
may still require additional exterior and interior work for all units
to be available for leasing.
EQUITY RESIDENTIAL
Consolidated Development Projects as of March 31, 2007
(Amounts in thousands except for project and unit amounts)
Total
Book
Value
Total Not
No. Total Book Placed
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 $65,008 $65,008 $-
Highland Westwood,
Glen II MA 102 21,620 12,784 12,784 5,000
Emerson/CRP Boston, MA
II 310 167,953 60,616 60,616 -
Redmond Redmond, WA
Ridge 321 55,457 17,550 17,550 -
77 Hudson Jersey
City, NJ 481 242,129 51,442 51,442 -
Crowntree Orlando, FL
Lakes 352 58,628 15,664 15,664 -
------ ----------- ---------------------------
Projects Under
Development - Wholly
Owned 1,830 619,123 223,064 223,064 5,000
Projects Under
Development - Partially
Owned:
- ------------------------
Silver Silver
Spring Spring, MD 457 147,454 47,457 47,457 -
303 Third Cambridge,
Street MA 531 248,307 63,513 63,513 -
City Lofts Chicago, IL 278 71,109 18,846 18,846 -
Alta Pacific Irvine, CA
(2) 132 46,416 27,275 27,275 28,260
----------------------------------------------
Projects Under
Development - Partially
Owned 1,398 513,286 157,091 157,091 28,260
----------------------------------------------
Projects
Under
Development 3,228 1,132,409 380,155 380,155 33,260
----------------------------------------------
Land Held
for
Development N/A - 296,990 296,990 70,600
----------------------------------------------
Land/Projects Held for
and/or Under
Development 3,228 1,132,409 677,145 677,145 103,860
----------------------------------------------
Completed Not Stabilized
- Wholly Owned:
- ------------------------
2400 M St Washington,
(3) D.C. 359 111,947 107,856 - -
----------------------------------------------
Projects Completed Not
Stabilized - Wholly
Owned 359 111,947 107,856 - -
Completed Not Stabilized
- Partially Owned (4):
- ------------------------
Mozaic Los
(a.k.a. Angeles,
Union CA
Station) 272 69,661 67,900 2,508 42,192
Vintage Ontario, CA 300 53,810 52,177 1,871 48,045
----------------------------------------------
Projects Completed Not
Stabilized - Partially
Owned 572 123,471 120,077 4,379 90,237
----------------------------------------------
Projects
Completed
Not
Stabilized 931 235,418 227,933 4,379 90,237
----------------------------------------------
Completed and Stabilized
During the Quarter:
- ------------------------
----------------------------------------------
Projects Completed and
Stabilized During the
Quarter - - - - -
----------------------------------------------
Total
Projects 4,159 $1,367,827 $905,078 $681,524 $194,097
==============================================
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 94% 6% 3%
Highland Glen II Westwood, MA 75% - -
Emerson/CRP II Boston, MA 47% - -
Redmond Ridge Redmond, WA 22% - -
77 Hudson Jersey City, NJ 11% - -
Crowntree Lakes Orlando, FL 4% - -
Projects Under Development -
Wholly Owned
Projects Under Development -
Partially Owned:
- ----------------------------------
Silver Spring Silver Spring,
MD 22% - -
303 Third Street Cambridge, MA 12% - -
City Lofts Chicago, IL 18% - -
Alta Pacific (2) Irvine, CA 39% - -
Projects Under Development -
Partially Owned
Projects Under
Development
Land Held for
Development
Land/Projects Held for and/or
Under Development
Completed Not Stabilized - Wholly
Owned:
- ----------------------------------
2400 M St (3) Washington, D.C. 100% 82% 69%
Projects Completed Not Stabilized
- Wholly Owned
Completed Not Stabilized -
Partially Owned (4):
- ----------------------------------
Mozaic (a.k.a. Los Angeles, CA
Union Station) 100% 42% 39%
Vintage Ontario, CA 100% 38% 33%
Projects Completed Not Stabilized
- Partially Owned
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 Cost
PROJECTS (1) Q1 2007 NOI
------------------------
Projects Under
Development $1,132,409 $(2)
Completed Not
Stabilized 235,418 773
Completed and Stabilized During
the Quarter - -
------------------------
Total Development/Newly
Stabilized NOI Contribution $1,367,827 $771
========================
Estimated Estimated
Completion Stabilization
Projects Location Date Date
- ----------------------------------------------------------------------
Projects Under Development - Wholly
Owned:
- ----------------------------------------
Bella Vista III Woodland Hills, CA 2Q 2007 1Q 2008
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
Crowntree Lakes Orlando, FL 3Q 2008 3Q 2009
Projects Under Development - Wholly
Owned
Projects Under Development - Partially
Owned:
- ----------------------------------------
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 - Wholly Owned:
- ----------------------------------------
2400 M St (3) Washington, D.C. Completed 3Q 2007
Projects Completed Not Stabilized -
Wholly Owned
Completed Not Stabilized - Partially
Owned (4):
- ----------------------------------------
Mozaic (a.k.a. Los Angeles, CA Completed 1Q 2008
Union Station)
Vintage Ontario, CA Completed 1Q 2008
Projects Completed Not Stabilized -
Partially Owned
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 $18.9 million unfunded and classified as deposits - restricted
in the consolidated balance sheets at 3/31/07.
(3) EQR acquired its partner's interest on 4/28/06 and now wholly-owns
the property. Total Book Value to Date does not include additional
purchase consideration of $30.7 million.
(4) Projects included here are substantially complete. However, they
may still require additional exterior and interior work for all units
to be available for leasing.
EQUITY RESIDENTIAL
Consolidated Condominium Conversion Projects as of March 31, 2007
(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 Q2 2007 152 150 - 2
Milano Scottsdale,
Terrace AZ Q2 2005 Q3 2007 224 182 2 40
South Palm Tamarac, FL
Place Q2 2005 Q3 2007 208 143 20 45
Chantecleer Naperville,
Lakes IL Q4 2005 Q4 2007 304 221 8 75
Fifth Avenue
North Seattle, WAQ2 2005 Q2 2007 62 61 - 1
Parkside Seattle, WAQ4 2005 Q2 2007 44 42 - 2
Park Blooming-
Blooming- dale, IL
dale Q2 2006 Q1 2008 250 104 8 138
Belle Arts Bellevue,
WA Q4 2006 Q1 2008 128 36 19 73
Pacific Cove Playa Del
Ray, CA Q3 2006 Q4 2007 80 - 57 23
Arrington Issaquah,
Place WA Q1 2007 Q3 2008 130 - - 130
------------------------------
1,582 939 114 529
Closed Out
- ------------
Timber Ridge Woodin-
ville, WA Q1 2005 Q1 2007 203 203 - -
Braewood Bothell, WAQ2 2005 Q1 2007 84 84 - -
Projects
closed out
prior to
2007 3,744 3,744 - -
------------------------------
4,031 4,031 - -
Totals 12 5,613 4,970 114 529
==============================
Gross
incremental
gain on
sales of
condominium
units (3)
Provision
for income
taxes
Net
incremental
gain on
sales of
condominium
units (3)
Corporate
overhead
(property
management
expense)
Other
expenses
Discontinued
operating
income
(loss)
Operating
income of
halted
conversions
Net Income -
Condominium
Division
(2)
2007 YTD Activity
----------------------------------------
Units FFO Incremental
Projects Location Closed Sales Price Gain on Sale (3)
- ----------------------------- ----------------------------------------
For Sale
- --------------
Fairway Greens Pembroke
Pines, FL - $ - $ (4)
Milano Terrace Scottsdale, AZ 29 7,008 1,257
South Palm Tamarac, FL
Place 34 6,874 525
Chantecleer Naperville, IL
Lakes 15 2,297 322
Fifth Avenue
North Seattle, WA 5 1,540 222
Parkside Seattle, WA 6 2,210 36
Park Blooming- Blooming-
dale dale, IL 26 3,992 323
Belle Arts Bellevue, WA 36 11,727 1,465
Pacific Cove Playa Del Ray,
CA - - -
Arrington Issaquah, WA
Place - - -
----------------------------------------
151 35,648 4,146
Closed Out
- --------------
Timber Ridge Woodin-
ville, WA 4 1,059 451
Braewood Bothell, WA 2 573 91
Projects
closed out
prior to 2007 - - (4)
----------------------------------------
6 1,632 538
Totals 157 $ 37,280 $ 4,684
========================================
Gross
incremental
gain on sales
of
condominium
units (3) $ 4,684
Provision for
income taxes 8
-----------------
Net
incremental
gain on sales
of
condominium
units (3) 4,692
Corporate
overhead
(property
management
expense) (1,226)
Other expenses (71)
Discontinued
operating
income (loss) (1,355)
Operating
income of
halted
conversions 87
-----------------
Net Income -
Condominium
Division (2) $ 2,127
=================
(1) Project start date represents the date that each respective
property was acquired by the taxable REIT subsidiary and included in
discontinued operations.
(2) 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).
(3) Amounts are net of a $459,000 reserve for potential homeowners
disputes.
EQUITY RESIDENTIAL
Maintenance Expenses and Capitalized Improvements to Real Estate
For the Quarter Ended March 31, 2007
(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) 121,126 $22,397 $185 $19,355 $160 $41,752 $345
New Acquisition
Properties (7) 23,596 4,644 203 3,723 163 8,367 366
Other (8) 7,196 2,904 2,050 4,954
-------- -------- -------- --------
Total 151,918 $29,945 $25,128 $55,073
======== ======== ======== ========
-----------------------------------------------------
Capitalized Improvements to Real Estate
-----------------------------------------------------
Avg. Building Avg. Avg.
Replacements Per Improvements Per Per
(4) Unit (5) Unit Total Unit
-------------------- ----------------- --------------
Established
Properties (6) $10,093 $83 $17,230 $142 $27,323 $225
New Acquisition
Properties (7) 1,328 58 15,080 660 16,408 718
Other (8) 4,028 9,595 13,623
------------- ----------- --------
Total $15,449 $41,905 $57,354
============= =========== ========
-------------------
Total Expenditures
-------------------
Avg.
Per
Grand Total Unit
-------------------
Established
Properties (6) $69,075 $570
New Acquisition
Properties (7) 24,775 1,084
Other (8) 18,577
-----------
Total $112,427
===========
(1) Total units exclude 10,846 unconsolidated units and 3,560 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, 2005.
(7) Wholly Owned Properties acquired during 2005, 2006 and 2007. Per
unit amounts are based on a weighted average of 22,845 units.
(8) Includes properties either partially owned or sold during the
period, commercial space, corporate housing, condominium conversions
and $4.7 million included in building improvements spent on thirteen
specific assets related to major renovations and repositioning of
these assets.
EQUITY RESIDENTIAL
Discontinued Operations
(Amounts in thousands)
Quarter Ended
March 31,
-----------------------
2007 2006
-----------------------
REVENUES
Rental income $7,749 $74,789
----------- -----------
Total revenues 7,749 74,789
----------- -----------
EXPENSES (1)
Property and maintenance 4,484 25,461
Real estate taxes and insurance 1,209 9,746
Property management 141 2,733
Depreciation 1,853 18,095
General and administrative 2 211
Impairment - 226
----------- -----------
Total expenses 7,689 56,472
----------- -----------
Discontinued operating income 60 18,317
Interest and other income 87 980
Interest (2):
Expense incurred, net (306) (6,069)
Amortization of deferred financing costs - (52)
----------- -----------
Discontinued operations (159) 13,176
Minority Interests - Operating Partnership 10 (869)
----------- -----------
Discontinued operations, net of minority
interests (149) 12,307
----------- -----------
Net gain on sales of discontinued operations 111,767 372,501
Minority Interests - Operating Partnership (6,957) (24,548)
----------- -----------
Gain on sales of discontinued operations, net
of minority interests 104,810 347,953
----------- -----------
Discontinued operations, net of minority
interests $104,661 $360,260
=========== ===========
(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.
EQUITY RESIDENTIAL
Additional Reconciliations and Non-Comparable Items
(Amounts in thousands except per share data)
(All per share data is diluted)
FFO Reconciliations
FFO Reconciliations
Guidance Midpoint Q1
2007 to Actual Q1 2007
-----------------------
Amounts Per Share
----------- -----------
Guidance midpoint Q1 2007 FFO - Diluted (1)
(2) $161,170 $0.506
Property NOI 1,435 0.005
General and administrative expense 1,575 0.005
Florida litigation reserve reduction (general
and administrative expense) 1,625 0.005
Interest and other income 777 0.003
Interest expense (excluding debt
extinguishment):
Share repurchase and transaction timing (1,077) (0.003)
Capitalized interest, floating rates
and other 2,003 0.006
Amortization of deferred financing costs
(excluding debt extinguishment) (188) (0.001)
Prepayment penalties on debt extinguishment 3,213 0.010
Write-off of unamortized deferred financing
costs on debt extinguishment 1,668 0.005
Net income - Condominium division (after
taxes/overhead/operations) 2,038 0.006
Other (primarily ECH NOI and impairment) (1,015) (0.003)
Weighted average share count adjustment - 0.003
----------- -----------
Actual Q1 2007 FFO - Diluted (1) (2) $173,224 $0.547
=========== ===========
Non-Comparable Items (3)
Q1 2007 Q1 2006
----------- -----------
Florida litigation reserve reduction (general
and administrative expense) $1,625 $-
Performance shares (general and
administrative expense) (40) (1,431)
Impairment (including discontinued
operations) (237) (792)
Prepayment penalties on debt extinguishment (141) (2,867)
Write-off of unamortized deferred financing
costs on debt extinguishment (718) (987)
Gain on debt extinguishment - 782
Premium on redemption of Preference
Interests - (674)
Net incremental gain on sales of condominium
units 4,692 7,127
----------- -----------
Net non-comparable items (3) $5,181 $1,158
=========== ===========
Note: See page 26 for definitions, footnotes and reconciliations of
EPS to FFO.
EQUITY RESIDENTIAL
The earnings guidance/projections provided below are based on current
expectations and are forward-looking.
2007 Earnings Guidance (per share diluted)
---------------------------------------------------------------------
Q2 2007 2007
--------------- ---------------
Expected FFO (1) (2) $0.54 to $0.58 $2.25 to $2.35
2007 Same-Store Assumptions
---------------------------------------------------------------------
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%
(Note: 30 basis point change in NOI percentage = $0.01 per share
change in EPS/FFO)
2007 Transaction Assumptions
---------------------------------------------------------------------
Acquisitions $2.0 billion
Dispositions $2.0 billion
Capitalization rate spread 100 basis
points
2007 Debt Assumptions
---------------------------------------------------------------------
Weighted average debt outstanding $8.5 billion -
$8.9 billion
Weighted average interest rate (reduced for
capitalized interest and
including prepayment penalties) 5.48%
Interest expense (including $465.0 million
discontinued operations) - $490.0
million
2007 Preferred Share Assumptions
---------------------------------------------------------------------
Series D Preferred Shares:
-------------------------------------
Redemption timing July 2007
Liquidation value $175.0 million
Premium on redemption (non-cash) $6.1 million
2007 Condominium Conversion Assumptions
---------------------------------------------------------------------
Net incremental gain on sales of $16.0 million -
condominium units $23.0 million
Net income - Condominium division (after $7.5 million -
taxes/overhead/operations) $17.0 million
Number of condominium unit sales 550 units - 850
units
2007 Other Guidance Assumptions
---------------------------------------------------------------------
General and administrative expense $48.0 million -
$51.0 million
Interest and other income $5.0 million -
$7.0 million
Net gain (loss) on sales of land No amounts
parcels budgeted
Weighted average Common Shares and OP Units - Diluted 315.7 million
Note: See page 26 for definitions, footnotes and reconciliations of
EPS to FFO.
EQUITY RESIDENTIAL
The earnings guidance/projections provided below are based on current
expectations and are forward-looking.
Reconciliations of EPS to FFO for Pages 24 and 25
(Amounts in thousands except per share data)
(All per share data is diluted)
Expected Expected
Expected Q1 2007 Q2 2007 2007
Amounts Per Share Per Share Per Share
----------- ----------- ----------- -----------
Expected EPS - $1.02 to $3.02 to
Diluted (4) $229,403 $0.721 $1.06 $3.12
Add: Expected
depreciation
expense 148,319 0.466 0.49 2.00
Less: Expected net
gain on sales (4) (216,552) (0.681) (0.97) (2.77)
----------- ----------- ----------- -----------
Expected FFO - $0.54 to $2.25 to
Diluted (1) (2) $161,170 $0.506 $0.58 $2.35
=========== =========== =========== ===========
Definitions and Footnotes for Pages 24 and 25
(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),
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.
(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 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)Non-comparable items are those items included in FFO that by their
nature are not comparable from period to period, such as net
incremental gain on sales of condominium units, impairment
charges, debt extinguishment costs and redemption premiums on
Preferred Shares/Preference Interests.
(4)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.
CONTACT: Equity Residential
Marty McKenna, 312-928-1901