Attached files
| file | filename |
|---|---|
| 8-K - EQUITY RESIDENTIAL 8-K - EQUITY RESIDENTIAL | a6376947.htm |
Exhibit 99.1
Equity Residential Reports Second Quarter 2010 Results
Improving Revenue Results in Increased Guidance for 2010
CHICAGO--(BUSINESS WIRE)--July 28, 2010--Equity Residential (NYSE: EQR) today reported results for the quarter and six months ended June 30, 2010. All per share results are reported on a fully-diluted basis.
“We are pleased that the strong and broad based recovery in apartment fundamentals that began earlier this year has continued through our primary leasing season,” said David J. Neithercut, Equity Residential’s President and CEO. “With strong occupancy, little new supply and favorable demographics, we expect top line growth for years to come. Obviously, the rate of that growth is highly dependent on employment growth.”
Second Quarter 2010
The company reported solid results for the quarter with FFO (funds from operations) that exceeded the high end of the company’s guidance range. In addition, same store sequential revenues turned positive for the first time in six quarters and the company expects that in the third quarter, same store quarter over quarter revenues and NOI (net operating income) will turn positive.
For the second quarter of 2010, the company reported earnings of $0.02 per share compared to the pre-impairment $0.39 per share in the second quarter of 2009. The difference is due primarily to lower gains from property sales in 2010.
FFO for the quarter ended June 30, 2010 was $0.58 per share compared to the pre-impairment $0.62 per share for the same period of 2009. The difference is due primarily to:
- the negative impact of approximately $0.03 per share from lower NOI from the company’s same store portfolio;
- the negative impact of approximately $0.05 per share of dilution from the company’s 2009 transaction activity, partially offset by accretion of $0.02 per share of NOI from the company’s 2010 transaction activity;
- the positive impact of approximately $0.03 per share of NOI from lease-up activity; and
- the negative impact of approximately $0.01 per share from lower interest and other income.
Six Months Ended June 30, 2010
For the six months ended June 30, 2010, the company reported earnings of $0.21 per share compared to $0.64 per share in the same period of 2009.
FFO for the six months ended June 30, 2010 was $1.07 per share compared to $1.16 per share in the same period of 2009.
Same Store Results
On a same store second quarter to second quarter comparison, which includes 117,349 apartment units, revenues decreased 1.2%, expenses increased 1.5% and NOI decreased 2.9%.
On a same store sequential first quarter to second quarter comparison, which includes 119,806 apartment units, revenues increased 1.3%, expenses decreased 4.3% and NOI increased 5.1%.
On a same store six-month to six-month comparison, which includes 117,349 apartment units, revenues decreased 2.1%, expenses increased 1.5% and NOI decreased 4.2%.
Acquisitions/Dispositions
During the second quarter of 2010, the company acquired two properties, consisting of 742 apartment units, for an aggregate purchase price of $210.1 million: a 183-unit property in Fullerton, CA for a purchase price of $43.3 million at a capitalization (cap) rate of 5.7%; and as previously announced, 425 Mass in Washington, D.C., consisting of 559 units, for a purchase price of $166.8 million. 425 Mass was unoccupied on the purchase date and the company expects a stabilized yield of 8.5% in the third year of ownership. As of June 30, 2010, the property was 30% leased. The company did not sell any consolidated properties during the quarter.
During the first six months of 2010, the company acquired eight properties, consisting of 2,209 apartment units, for an aggregate purchase price of $849.4 million. The weighted average cap rate on these acquisitions excluding the 425 Mass purchase was 5.6%. Also during the first six months of 2010, the company sold eight consolidated properties, consisting of 2,011 apartment units, for an aggregate sale price of $145.9 million at a weighted average cap rate of 7.5% generating an unlevered internal rate of return (IRR) of 9.4%.
Prospect Towers
On July 16, 2010, a portion of the garage at a company owned property in Hackensack, NJ collapsed. There were no injuries as a result and an investigation as to the cause is ongoing. The property, known as Prospect Towers, includes a 203-unit, mid-rise building in which residents remain in occupancy and a 157-unit, 18-story high-rise building that will be unavailable for occupancy until mid-November while electrical, water and life safety systems are restored. The company currently estimates that the costs (both expensed and capitalized), including providing for our residents’ interim needs, lost revenue and garage reconstruction, will be approximately $12 million, after insurance reimbursements of $8 million. The company estimates a negative impact on FFO of approximately $0.02 per share for the third quarter 2010 and $0.03 per share for the full year 2010, which are included in the revised guidance ranges provided in this press release.
At-The-Market (ATM) Share Offering Program
During the second quarter of 2010, the company did not issue any common shares under its ATM Share Offering Program. The company has approximately 12.4 million shares available for issuance under this program and has not issued any such shares since January 14, 2010.
Debt Offering
On July 15, 2010, the company closed on a $600.0 million unsecured notes offering maturing July 15, 2020 with a coupon rate of 4.75% and an all-in effective interest rate of 5.09% including the effect of fees and the termination of certain interest rate hedges. Proceeds from the issuance are being used to pay down the company’s unsecured revolving credit facility and for general corporate purposes.
Third Quarter 2010 Guidance
The company has established an FFO guidance range of $0.51 to $0.55 per share for the third quarter of 2010. The difference between the company’s actual second quarter 2010 FFO of $0.58 per share and the midpoint of the range for the third quarter is primarily attributable to:
- the positive impact of $0.02 per share from higher NOI from same store and lease-up properties;
- the negative impact of $0.03 per share from higher interest expense primarily from the unsecured debt offering and a prepayment penalty on an expected disposition;
- the negative impact of $0.02 per share from the costs associated with Prospect Towers; and
- the negative impact of $0.02 per share from lower interest and other income and increased other expenses.
Full Year 2010 Guidance
The company has revised its guidance for its full year 2010 same store operating performance and FFO results as well as other items listed on page 25 of this release. The changes to the full year same store and FFO guidance are listed below:
|
Previous |
Revised |
||||
| Same store: | |||||
| Physical occupancy | 94.3% | 95.0% | |||
| Revenue change | (3.0%) to (1.0%) | (0.5%) to 0.0% | |||
| Expense change | 1.0% to 2.0% | 1.0% to 2.0% | |||
| NOI change | (6.0%) to (2.0%) | (2.0%) to (0.5%) | |||
| FFO per share | $1.95 to $2.15 | $2.14 to $2.20 | |||
The difference between the midpoint of the previous FFO guidance range and the midpoint of the revised guidance range is due primarily to:
- the positive impact of $0.13 per share from higher NOI from same store and lease-up properties;
- the positive impact of $0.04 per share from 2010 transaction activity and timing;
- the negative impact of $0.03 per share from higher interest expense primarily from the unsecured debt offering; and
- the negative impact of $0.03 per share from the costs associated with Prospect Towers offset by a positive $0.01 per share of higher interest and other income.
Third Quarter 2010 Conference Call
Equity Residential expects to announce third quarter 2010 results on Wednesday, October 27, 2010 and host a conference call to discuss those results at 10:00 a.m. CT on Thursday, October 28, 2010.
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 492 properties located in 23 states and the District of Columbia, consisting of 137,091 apartment units. For more information on Equity Residential, please visit our website at www.equityapartments.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 and subsequent periodic reports filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityapartments.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, Thursday, July 29, at 10:00 a.m. Central. Please visit the Investor Information section of the company’s web site at www.equityapartments.com for the link. A replay of the web cast will be available for two weeks at this site.
| Equity Residential | ||||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||
| (Amounts in thousands except per share data) | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
|
Six Months Ended |
Quarter Ended |
|||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||
| REVENUES | ||||||||||||||||||
| Rental income | $ | 993,570 | $ | 957,533 | $ | 507,891 | $ | 477,921 | ||||||||||
| Fee and asset management | 5,468 | 5,275 | 3,046 | 2,412 | ||||||||||||||
| Total revenues | 999,038 | 962,808 | 510,937 | 480,333 | ||||||||||||||
| EXPENSES | ||||||||||||||||||
| Property and maintenance | 251,971 | 241,386 | 125,454 | 116,711 | ||||||||||||||
| Real estate taxes and insurance | 114,482 | 103,845 | 56,957 | 51,357 | ||||||||||||||
| Property management | 41,147 | 37,732 | 20,467 | 18,718 | ||||||||||||||
| Fee and asset management | 3,660 | 3,985 | 1,646 | 1,982 | ||||||||||||||
| Depreciation | 326,965 | 284,952 | 174,794 | 143,296 | ||||||||||||||
| General and administrative | 20,811 | 20,595 | 10,090 | 10,201 | ||||||||||||||
| Impairment | - | 11,124 | - | 11,124 | ||||||||||||||
| Total expenses | 759,036 | 703,619 | 389,408 | 353,389 | ||||||||||||||
| Operating income | 240,002 | 259,189 | 121,529 | 126,944 | ||||||||||||||
| Interest and other income | 5,117 | 12,639 | 2,892 | 6,622 | ||||||||||||||
| Other expenses | (6,026 | ) | (306 | ) | (1,643 | ) | (14 | ) | ||||||||||
| Interest: | ||||||||||||||||||
| Expense incurred, net | (231,116 | ) | (239,172 | ) | (115,819 | ) | (115,670 | ) | ||||||||||
| Amortization of deferred financing costs | (5,516 | ) | (6,214 | ) | (2,319 | ) | (3,252 | ) | ||||||||||
|
|
||||||||||||||||||
| Income before income and other taxes, (loss) from | ||||||||||||||||||
| investments in unconsolidated entities, net gain | ||||||||||||||||||
| (loss) on sales of unconsolidated entities and | ||||||||||||||||||
| discontinued operations | 2,461 | 26,136 | 4,640 | 14,630 | ||||||||||||||
| Income and other tax (expense) benefit | (20 | ) | (2,387 | ) | 146 | (259 | ) | |||||||||||
| (Loss) from investments in unconsolidated entities | (923 | ) | (2,221 | ) | (459 | ) | (2,026 | ) | ||||||||||
| Net gain (loss) on sales of unconsolidated entities | 5,557 | 2,759 | 5,079 | (6 | ) | |||||||||||||
| Income from continuing operations | 7,075 | 24,287 | 9,406 | 12,339 | ||||||||||||||
| Discontinued operations, net | 60,870 | 167,066 | 683 | 93,593 | ||||||||||||||
| Net income | 67,945 | 191,353 | 10,089 | 105,932 | ||||||||||||||
| Net (income) loss attributable to Noncontrolling Interests: | ||||||||||||||||||
| Operating Partnership | (2,936 | ) | (10,420 | ) | (313 | ) | (5,729 | ) | ||||||||||
| Preference Interests and Units | - | (7 | ) | - | (3 | ) | ||||||||||||
| Partially Owned Properties | 435 | 74 | 185 | 5 | ||||||||||||||
| Net income attributable to controlling interests | 65,444 | 181,000 | 9,961 | 100,205 | ||||||||||||||
| Preferred distributions | (7,238 | ) | (7,240 | ) | (3,618 | ) | (3,620 | ) | ||||||||||
| Net income available to Common Shares | $ | 58,206 | $ | 173,760 | $ | 6,343 | $ | 96,585 | ||||||||||
| Earnings per share – basic: | ||||||||||||||||||
| Income from continuing operations available to Common Shares | $ | - | $ | 0.06 | $ | 0.02 | $ | 0.03 | ||||||||||
| Net income available to Common Shares | $ | 0.21 | $ | 0.64 | $ | 0.02 | $ | 0.35 | ||||||||||
| Weighted average Common Shares outstanding | 281,435 | 272,614 | 282,217 | 272,901 | ||||||||||||||
| Earnings per share – diluted: | ||||||||||||||||||
| Income from continuing operations available to Common Shares | $ | - | $ | 0.06 | $ | 0.02 | $ | 0.03 | ||||||||||
| Net income available to Common Shares | $ | 0.21 | $ | 0.64 | $ | 0.02 | $ | 0.35 | ||||||||||
| Weighted average Common Shares outstanding | 298,244 | 289,152 | 299,642 | 289,338 | ||||||||||||||
| Distributions declared per Common Share outstanding | $ | 0.6750 | $ | 0.9650 | $ | 0.3375 | $ | 0.4825 | ||||||||||
| Equity Residential | ||||||||||||||||||
| Consolidated Statements of Funds From Operations | ||||||||||||||||||
| (Amounts in thousands except per share data) | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
|
Six Months Ended |
Quarter Ended |
|||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||
| Net income | $ | 67,945 |
|
$ | 191,353 | $ | 10,089 |
|
$ | 105,932 | ||||||||
| Adjustments: | ||||||||||||||||||
| Net (income) loss attributable to Noncontrolling Interests: | ||||||||||||||||||
| Preference Interests and Units | - | (7 | ) | - | (3 | ) | ||||||||||||
| Partially Owned Properties | 435 | 74 | 185 | 5 | ||||||||||||||
| Depreciation | 326,965 | 284,952 | 174,794 | 143,296 | ||||||||||||||
| Depreciation – Non-real estate additions | (3,369 | ) | (3,792 | ) | (1,676 | ) | (1,894 | ) | ||||||||||
| Depreciation – Partially Owned and Unconsolidated Properties | 7 | 431 | (4 | ) | 248 | |||||||||||||
| Net (gain) loss on sales of unconsolidated entities | (5,557 | ) | (2,759 | ) | (5,079 | ) | 6 | |||||||||||
| Discontinued operations: | ||||||||||||||||||
| Depreciation | 711 | 16,883 | 148 | 8,051 | ||||||||||||||
| Net (gain) on sales of discontinued operations | (60,253 | ) | (145,798 | ) | (217 | ) | (83,927 | ) | ||||||||||
| Net incremental gain on sales of condominium units | 631 | 335 | 243 | 399 | ||||||||||||||
| FFO (1) (2) | 327,515 | 341,672 | 178,483 | 172,113 | ||||||||||||||
| Preferred distributions | (7,238 | ) | (7,240 | ) | (3,618 | ) | (3,620 | ) | ||||||||||
| FFO available to Common Shares and Units – basic (1) (2) | $ | 320,277 | $ | 334,432 | $ | 174,865 | $ | 168,493 | ||||||||||
| FFO available to Common Shares and Units – diluted (1) (2) | $ | 320,583 | $ | 334,747 | $ | 175,018 | $ | 168,651 | ||||||||||
| FFO per share and Unit – basic | $ | 1.09 | $ | 1.16 | $ | 0.59 | $ | 0.58 | ||||||||||
| FFO per share and Unit – diluted | $ | 1.07 | $ | 1.16 | $ | 0.58 | $ | 0.58 | ||||||||||
| Weighted average Common Shares and | ||||||||||||||||||
| Units outstanding – basic | 295,177 | 288,851 | 295,897 | 288,990 | ||||||||||||||
| Weighted average Common Shares and | ||||||||||||||||||
| Units outstanding – diluted | 298,641 | 289,558 | 300,039 | 289,743 | ||||||||||||||
(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. FFO available to Common Shares and Units is calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares in accordance with accounting principles generally accepted in the United States. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the "Noncontrolling Interests - Operating Partnership". Subject to certain restrictions, the Noncontrolling Interests - Operating Partnership may exchange their OP Units for EQR Common Shares on a one-for-one basis.
(2) The Company believes that FFO and FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures 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 and FFO available to Common Shares and Units can help compare the operating performance of a company's real estate between periods or as compared to different companies. FFO and FFO available to Common Shares and Units do not represent net income, net income available to Common Shares or net cash flows from operating activities in accordance with GAAP. Therefore, FFO and FFO available to Common Shares and Units should not be exclusively considered as alternatives to net income, net income available to Common Shares or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company's calculation of FFO and FFO available to Common Shares and Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.
| Equity Residential | |||||||||||
| Consolidated Balance Sheets | |||||||||||
| (Amounts in thousands except for share amounts) | |||||||||||
| (Unaudited) | |||||||||||
| June 30, | December 31, | ||||||||||
| 2010 | 2009 | ||||||||||
| ASSETS | |||||||||||
| Investment in real estate | |||||||||||
| Land | $ | 4,003,177 | $ | 3,650,324 | |||||||
| Depreciable property | 14,686,447 | 13,893,521 | |||||||||
| Projects under development | 473,280 | 668,979 | |||||||||
| Land held for development | 251,219 | 252,320 | |||||||||
| Investment in real estate | 19,414,123 | 18,465,144 | |||||||||
| Accumulated depreciation | (4,146,964 | ) | (3,877,564 | ) | |||||||
| Investment in real estate, net | 15,267,159 | 14,587,580 | |||||||||
| Cash and cash equivalents | 47,982 | 193,288 | |||||||||
| Investments in unconsolidated entities | 2,889 | 6,995 | |||||||||
| Deposits – restricted | 108,654 | 352,008 | |||||||||
| Escrow deposits – mortgage | 17,995 | 17,292 | |||||||||
| Deferred financing costs, net | 41,862 | 46,396 | |||||||||
| Other assets | 138,731 | 213,956 | |||||||||
| Total assets | $ | 15,625,272 | $ | 15,417,515 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities: | |||||||||||
| Mortgage notes payable | $ | 4,754,601 | $ | 4,783,446 | |||||||
| Notes, net | 4,584,800 | 4,609,124 | |||||||||
| Lines of credit | 320,000 | - | |||||||||
| Accounts payable and accrued expenses | 81,791 | 58,537 | |||||||||
| Accrued interest payable | 97,273 | 101,849 | |||||||||
| Other liabilities | 312,119 | 272,236 | |||||||||
| Security deposits | 62,568 | 59,264 | |||||||||
| Distributions payable | 102,520 | 100,266 | |||||||||
| Total liabilities | 10,315,672 | 9,984,722 | |||||||||
| Commitments and contingencies | |||||||||||
| Redeemable Noncontrolling Interests – Operating Partnership | 313,735 | 258,280 | |||||||||
|
|
|||||||||||
| Equity: | |||||||||||
| Shareholders' equity: | |||||||||||
| Preferred Shares of beneficial interest, $0.01 par value; | |||||||||||
| 100,000,000 shares authorized; 1,947,425 shares | |||||||||||
| issued and outstanding as of June 30, 2010 and | |||||||||||
| 1,950,925 shares issued and outstanding as of | |||||||||||
| December 31, 2009 | 208,686 | 208,773 | |||||||||
| Common Shares of beneficial interest, $0.01 par value; | |||||||||||
| 1,000,000,000 shares authorized; 283,442,674 | |||||||||||
| shares issued and outstanding as of June 30, | |||||||||||
| 2010 and 279,959,048 shares issued and | |||||||||||
| outstanding as of December 31, 2009 | 2,834 | 2,800 | |||||||||
| Paid in capital | 4,524,359 | 4,477,426 | |||||||||
| Retained earnings | 220,965 | 353,659 | |||||||||
| Accumulated other comprehensive (loss) income | (79,666 | ) | 4,681 | ||||||||
| Total shareholders' equity | 4,877,178 | 5,047,339 | |||||||||
| Noncontrolling Interests: | |||||||||||
| Operating Partnership | 108,989 | 116,120 | |||||||||
| Partially Owned Properties | 9,698 | 11,054 | |||||||||
| Total Noncontrolling Interests | 118,687 | 127,174 | |||||||||
| Total equity | 4,995,865 | 5,174,513 | |||||||||
| Total liabilities and equity | $ | 15,625,272 | $ | 15,417,515 | |||||||
| Equity Residential | ||||||||||||||
| Portfolio Summary | ||||||||||||||
| As of June 30, 2010 | ||||||||||||||
| % of 2010 | Average | |||||||||||||
| % of | Stabilized | Rental | ||||||||||||
| Markets | Properties | Units | Total Units | NOI | Rate (1) | |||||||||
| 1 | New York Metro Area | 27 | 7,800 | 5.7 | % | 12.0 | % | $ 2,755 | ||||||
| 2 | DC Northern Virginia | 29 | 9,886 | 7.2 | % | 11.2 | % | 1,714 | ||||||
| 3 | South Florida | 39 | 13,013 | 9.5 | % | 8.8 | % | 1,282 | ||||||
| 4 | Boston | 36 | 6,503 | 4.7 | % | 8.0 | % | 2,047 | ||||||
| 5 | Los Angeles | 36 | 7,463 | 5.5 | % | 7.5 | % | 1,689 | ||||||
| 6 | Seattle/Tacoma | 47 | 10,645 | 7.8 | % | 6.7 | % | 1,267 | ||||||
| 7 | San Francisco Bay Area | 33 | 6,239 | 4.6 | % | 5.4 | % | 1,618 | ||||||
| 8 | Phoenix | 41 | 11,769 | 8.6 | % | 5.0 | % | 838 | ||||||
| 9 | Denver | 23 | 7,967 | 5.8 | % | 4.8 | % | 1,008 | ||||||
| 10 | Suburban Maryland | 22 | 6,090 | 4.4 | % | 4.6 | % | 1,328 | ||||||
| 11 | San Diego | 13 | 4,284 | 3.1 | % | 4.6 | % | 1,660 | ||||||
| 12 | Orlando | 26 | 8,042 | 5.9 | % | 4.2 | % | 968 | ||||||
| 13 | Inland Empire, CA | 14 | 4,519 | 3.3 | % | 3.5 | % | 1,291 | ||||||
| 14 | Orange County, CA | 11 | 3,490 | 2.5 | % | 3.2 | % | 1,504 | ||||||
| 15 | Atlanta | 22 | 6,889 | 5.0 | % | 3.0 | % | 918 | ||||||
| 16 | All Other Markets (2) | 71 | 17,855 | 13.0 | % | 7.5 | % | 932 | ||||||
| Total | 490 | 132,454 | 96.6 | % | 100.0 | % | 1,356 | |||||||
| Military Housing | 2 | 4,637 | 3.4 | % | - | - | ||||||||
| Grand Total | 492 | 137,091 | 100.0 | % | 100.0 | % | $ 1,356 | |||||||
| (1) Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the month of June 2010. | ||||||||||||||
| (2) All Other Markets - Each individual market is less than 2.0% of 2010 stabilized NOI. | ||||||||||||||
| Equity Residential | |||||||||||||||||
| Portfolio as of June 30, 2010 | |||||||||||||||||
| Properties | Units | ||||||||||||||||
| Wholly Owned Properties | 441 | 121,721 | |||||||||||||||
| Partially Owned Properties: | |||||||||||||||||
| Consolidated | 25 | 5,098 | |||||||||||||||
| Unconsolidated | 24 | 5,635 | |||||||||||||||
| Military Housing | 2 | 4,637 | |||||||||||||||
| 492 | 137,091 | ||||||||||||||||
| Portfolio Rollforward Q2 2010 | |||||||||||||||||
| ($ in thousands) | |||||||||||||||||
| Purchase/ | |||||||||||||||||
| Properties | Units | (Sale) Price | Cap Rate | ||||||||||||||
| 3/31/2010 | 491 | 136,470 | |||||||||||||||
| Acquisitions: | |||||||||||||||||
| Rental Properties: | |||||||||||||||||
| Consolidated - Stabilized | 1 | 183 | $ 43,340 | 5.7 | % | ||||||||||||
| Consolidated - Not Stabilized (1) | 1 | 559 | $ 166,750 | ||||||||||||||
| Dispositions: | |||||||||||||||||
| Rental Properties: | |||||||||||||||||
| Unconsolidated (2) | (1 | ) | (156 | ) | $ (18,550 | ) | 5.0 | % | |||||||||
| Configuration Changes | - | 35 | |||||||||||||||
| 6/30/2010 | 492 | 137,091 | (3 | ) | |||||||||||||
| Portfolio Rollforward 2010 | |||||||||||||||||
| ($ in thousands) | |||||||||||||||||
| Purchase/ | |||||||||||||||||
| Properties | Units | (Sale) Price | Cap Rate | ||||||||||||||
| 12/31/2009 | 495 | 137,007 | |||||||||||||||
| Acquisitions: | |||||||||||||||||
| Rental Properties: | |||||||||||||||||
| Consolidated - Stabilized | 7 | 1,650 | $ 682,601 | 5.6 | % | ||||||||||||
| Consolidated - Not Stabilized (1) | 1 | 559 | $ 166,750 | ||||||||||||||
| Land Parcel (one) | - | - | $ 12,000 | ||||||||||||||
| Dispositions: | |||||||||||||||||
| Rental Properties: | |||||||||||||||||
| Consolidated | (8 | ) | (2,011 | ) | $ (145,940 | ) | 7.5 | % | |||||||||
| Unconsolidated (2) | (3 | ) | (640 | ) | $ (42,650 | ) | 6.5 | % | |||||||||
| Condominium Conversion Properties | (1 | ) | (2 | ) | $ (360 | ) | |||||||||||
| Completed Developments | 1 | 480 | |||||||||||||||
| Configuration Changes | - | 48 | |||||||||||||||
| 6/30/2010 | 492 | 137,091 | (3 | ) | |||||||||||||
| (1) | EQR acquired this property unoccupied and expects a stabilized yield of 8.5% in the third year of ownership. | |
| (2) | EQR owned a 25% interest in these unconsolidated rental properties. Sale price listed is the gross sale price. | |
| (3) | EQR acquired the 75% equity interest it did not previously own in seven unconsolidated properties containing 1,811 units with a real estate value of $105.1 million at an implied cap rate of 8.4%. These properties continue to be included in the Company's portfolio counts above. See the Partially Owned Entities schedule for additional discussion. |
| Equity Residential | |||||||||||||
| Second Quarter 2010 vs. Second Quarter 2009 | |||||||||||||
| Same Store Results/Statistics | |||||||||||||
| $ in thousands (except for Average Rental Rate) - 117,349 Same Store Units | |||||||||||||
| Results | Statistics | ||||||||||||
| Average | |||||||||||||
| Rental | |||||||||||||
| Description | Revenues | Expenses | NOI (1) | Rate (2) | Occupancy | Turnover | |||||||
| Q2 2010 | $ 448,804 | $ 169,010 | $ 279,794 | $ 1,342 | 95.1% | 14.3% | |||||||
| Q2 2009 | $ 454,461 | $ 166,442 | $ 288,019 | $ 1,380 | 93.6% | 15.1% | |||||||
| Change | $ (5,657) | $ 2,568 | $ (8,225) | $ (38) | 1.5% | (0.8%) | |||||||
| Change | (1.2%) | 1.5% | (2.9%) | (2.8%) | |||||||||
| Second Quarter 2010 vs. First Quarter 2010 | |||||||||||||
| Same Store Results/Statistics | |||||||||||||
| $ in thousands (except for Average Rental Rate) - 119,806 Same Store Units | |||||||||||||
| Results | Statistics | ||||||||||||
| Average | |||||||||||||
| Rental | |||||||||||||
| Description | Revenues | Expenses | NOI (1) | Rate (2) | Occupancy | Turnover | |||||||
| Q2 2010 | $ 460,303 | $ 173,231 | $ 287,072 | $ 1,348 | 95.1% | 14.3% | |||||||
| Q1 2010 | $ 454,236 | $ 181,065 | $ 273,171 | $ 1,339 | 94.6% | 11.8% | |||||||
| Change | $ 6,067 | $ (7,834) | $ 13,901 | $ 9 | 0.5% | 2.5% | |||||||
| Change | 1.3% | (4.3%) | 5.1% | 0.7% | |||||||||
| June YTD 2010 vs. June YTD 2009 | |||||||||||||
| Same Store Results/Statistics | |||||||||||||
| $ in thousands (except for Average Rental Rate) - 117,349 Same Store Units | |||||||||||||
| Results | Statistics | ||||||||||||
| Average | |||||||||||||
| Rental | |||||||||||||
| Description | Revenues | Expenses | NOI (1) | Rate (2) | Occupancy | Turnover | |||||||
| YTD 2010 | $ 891,910 | $ 345,515 | $ 546,395 | $ 1,337 | 94.9% | 26.1% | |||||||
| YTD 2009 | $ 910,757 | $ 340,260 | $ 570,497 | $ 1,383 | 93.7% | 28.7% | |||||||
| Change | $ (18,847) | $ 5,255 | $ (24,102) | $ (46) | 1.2% | (2.6%) | |||||||
| Change | (2.1%) | 1.5% | (4.2%) | (3.3%) | |||||||||
| (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 | ||||||||||||||||||||||||||||
| Second Quarter 2010 vs. Second Quarter 2009 | ||||||||||||||||||||||||||||
| Same Store Results/Statistics by Market | ||||||||||||||||||||||||||||
| Increase (Decrease) from Prior Year's Quarter | ||||||||||||||||||||||||||||
| Q2 2010 | Q2 2010 | Q2 2010 | ||||||||||||||||||||||||||
| % of | Average | Weighted | Average | |||||||||||||||||||||||||
| Actual | Rental | Average | Rental | |||||||||||||||||||||||||
| Markets | Units | NOI | Rate (1) | Occupancy % | Revenues | Expenses | NOI | Rate (1) | Occupancy | |||||||||||||||||||
| 1 | DC Northern Virginia | 8,781 | 10.3 | % | $ 1,652 | 96.2 | % | 2.7 | % | (2.1 | %) | 5.0 | % | 0.6 | % | 1.9 | % | |||||||||||
| 2 | New York Metro Area | 6,247 | 9.9 | % | 2,554 | 96.1 | % | (3.3 | %) | 4.2 | % | (7.6 | %) | (4.6 | %) | 1.3 | % | |||||||||||
| 3 | South Florida | 12,465 | 9.8 | % | 1,276 | 94.8 | % | 0.9 | % | (2.4 | %) | 3.2 | % | (0.4 | %) | 1.3 | % | |||||||||||
| 4 | Boston | 6,021 | 7.9 | % | 2,035 | 95.6 | % | 2.1 | % | 1.3 | % | 2.5 | % | 1.5 | % | 0.5 | % | |||||||||||
| 5 | Los Angeles | 7,099 | 7.8 | % | 1,679 | 94.1 | % | (2.3 | %) | 1.2 | % | (4.2 | %) | (3.7 | %) | 1.3 | % | |||||||||||
| 6 | Seattle/Tacoma | 8,473 | 6.6 | % | 1,290 | 94.1 | % | (4.8 | %) | 4.0 | % | (9.9 | %) | (6.4 | %) | 1.6 | % | |||||||||||
| 7 | San Francisco Bay Area | 6,239 | 6.5 | % | 1,619 | 95.2 | % | (3.2 | %) | 2.0 | % | (6.0 | %) | (5.6 | %) | 2.3 | % | |||||||||||
| 8 | Denver | 7,755 | 5.3 | % | 1,015 | 95.5 | % | (0.2 | %) | 2.1 | % | (1.4 | %) | (2.0 | %) | 1.7 | % | |||||||||||
| 9 | Phoenix | 10,647 | 5.2 | % | 830 | 94.6 | % | (3.3 | %) | 3.8 | % | (7.8 | %) | (5.2 | %) | 1.8 | % | |||||||||||
| 10 | San Diego | 4,103 | 4.6 | % | 1,654 | 95.1 | % | 0.6 | % | 4.8 | % | (1.3 | %) | (0.7 | %) | 1.2 | % | |||||||||||
| 11 | Orlando | 7,690 | 4.5 | % | 960 | 94.4 | % | (2.5 | %) | (1.4 | %) | (3.2 | %) | (4.2 | %) | 1.6 | % | |||||||||||
| 12 | Suburban Maryland | 4,823 | 3.8 | % | 1,216 | 95.6 | % | 1.8 | % | (0.4 | %) | 3.1 | % | 0.5 | % | 1.2 | % | |||||||||||
| 13 | Inland Empire, CA | 4,219 | 3.7 | % | 1,298 | 95.6 | % | (1.7 | %) | 3.2 | % | (4.2 | %) | (3.2 | %) | 1.4 | % | |||||||||||
| 14 | Orange County, CA | 3,175 | 3.3 | % | 1,503 | 94.8 | % | (3.9 | %) | 5.7 | % | (8.0 | %) | (4.7 | %) | 0.9 | % | |||||||||||
| 15 | Atlanta | 5,979 | 3.2 | % | 950 | 95.6 | % | (4.2 | %) | 2.0 | % | (8.6 | %) | (5.6 | %) | 1.5 | % | |||||||||||
| 16 | All Other Markets | 13,633 | 7.6 | % | 961 | 95.2 | % | (1.2 | %) | 1.9 | % | (3.5 | %) | (2.6 | %) | 1.3 | % | |||||||||||
| Total | 117,349 | 100.0 | % | $ 1,342 | 95.1 | % | (1.2 | %) | 1.5 | % | (2.9 | %) | (2.8 | %) | 1.5 | % | ||||||||||||
| (1) | Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period. | |||||||||||||||||||||||||||
| Equity Residential | ||||||||||||||||||||||||||||
| Second Quarter 2010 vs. First Quarter 2010 | ||||||||||||||||||||||||||||
| Same Store Results/Statistics by Market | ||||||||||||||||||||||||||||
| Increase (Decrease) from Prior Quarter | ||||||||||||||||||||||||||||
| Q2 2010 | Q2 2010 | Q2 2010 | ||||||||||||||||||||||||||
| % of | Average | Weighted | Average | |||||||||||||||||||||||||
| Actual | Rental | Average | Rental | |||||||||||||||||||||||||
| Markets | Units | NOI | Rate (1) | Occupancy % | Revenues | Expenses | NOI | Rate (1) | Occupancy | |||||||||||||||||||
| 1 | DC Northern Virginia | 9,107 | 10.6 | % | $ 1,681 | 96.3 | % | 3.4 | % | (9.7 | %) | 10.6 | % | 1.8 | % | 1.5 | % | |||||||||||
| 2 | New York Metro Area | 6,247 | 9.6 | % | 2,554 | 96.1 | % | 2.0 | % | (6.4 | %) | 8.4 | % | 1.1 | % | 0.8 | % | |||||||||||
| 3 | South Florida | 12,465 | 9.6 | % | 1,276 | 94.8 | % | 0.7 | % | (7.7 | %) | 6.9 | % | 0.7 | % | 0.0 | % | |||||||||||
| 4 | Boston | 6,313 | 8.2 | % | 2,056 | 95.5 | % | 1.9 | % | (5.4 | %) | 6.6 | % | 1.2 | % | 0.6 | % | |||||||||||
| 5 | Los Angeles | 7,463 | 8.0 | % | 1,685 | 94.1 | % | 0.1 | % | (2.1 | %) | 1.3 | % | 0.7 | % | (0.6 | %) | |||||||||||
| 6 | Seattle/Tacoma | 8,540 | 6.5 | % | 1,290 | 94.1 | % | 2.2 | % | 0.2 | % | 3.7 | % | 1.3 | % | 0.9 | % | |||||||||||
| 7 | San Francisco Bay Area | 6,239 | 6.4 | % | 1,619 | 95.2 | % | 0.3 | % | (4.3 | %) | 3.2 | % | 0.1 | % | 0.3 | % | |||||||||||
| 8 | Phoenix | 11,201 | 5.4 | % | 833 | 94.6 | % | 0.4 | % | (1.7 | %) | 1.9 | % | 0.0 | % | 0.4 | % | |||||||||||
| 9 | Denver | 7,755 | 5.2 | % | 1,015 | 95.5 | % | 1.5 | % | 0.2 | % | 2.2 | % | 1.1 | % | 0.4 | % | |||||||||||
| 10 | Orlando | 8,042 | 4.6 | % | 967 | 94.4 | % | 0.4 | % | (5.4 | %) | 4.7 | % | 0.2 | % | 0.2 | % | |||||||||||
| 11 | San Diego | 4,103 | 4.5 | % | 1,654 | 95.1 | % | 1.2 | % | 1.2 | % | 1.3 | % | 0.8 | % | 0.4 | % | |||||||||||
| 12 | Suburban Maryland | 5,325 | 4.3 | % | 1,271 | 95.6 | % | 3.0 | % | (7.8 | %) | 10.4 | % | 1.5 | % | 1.4 | % | |||||||||||
| 13 | Inland Empire, CA | 4,219 | 3.6 | % | 1,298 | 95.6 | % | 1.3 | % | 0.4 | % | 1.8 | % | 0.1 | % | 1.2 | % | |||||||||||
| 14 | Orange County, CA | 3,175 | 3.2 | % | 1,503 | 94.8 | % | 0.5 | % | 3.5 | % | (1.0 | %) | 0.3 | % | 0.2 | % | |||||||||||
| 15 | Atlanta | 5,979 | 3.2 | % | 950 | 95.6 | % | (0.1 | %) | (5.4 | %) | 4.5 | % | (0.1 | %) | 0.0 | % | |||||||||||
| 16 | All Other Markets | 13,633 | 7.1 | % | 960 | 94.8 | % | (0.4 | %) | 7.4 | % | (6.1 | %) | (1.2 | %) | 0.8 | % | |||||||||||
| Total | 119,806 | 100.0 | % | $ 1,348 | 95.1 | % | 1.3 | % | (4.3 | %) | 5.1 | % | 0.7 | % | 0.5 | % | ||||||||||||
| (1) | Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period. | |||||||||||||||||||||||||||
| Equity Residential | ||||||||||||||||||||||||||||
| June YTD 2010 vs. June YTD 2009 | ||||||||||||||||||||||||||||
| Same Store Results/Statistics by Market | ||||||||||||||||||||||||||||
| Increase (Decrease) from Prior Year | ||||||||||||||||||||||||||||
| June YTD 10 | June YTD 10 | June YTD 10 | ||||||||||||||||||||||||||
| % of | Average | Weighted | Average | |||||||||||||||||||||||||
| Actual | Rental | Average | Rental | |||||||||||||||||||||||||
| Markets | Units | NOI | Rate (1) | Occupancy % | Revenues | Expenses | NOI | Rate (1) | Occupancy | |||||||||||||||||||
| 1 | DC Northern Virginia | 8,781 | 10.0 | % | $ 1,637 | 95.5 | % | 1.0 | % | 0.5 | % | 1.2 | % | (0.2 | %) | 1.1 | % | |||||||||||
| 2 | South Florida | 12,465 | 9.7 | % | 1,272 | 94.8 | % | 0.4 | % | (0.3 | %) | 0.9 | % | (1.1 | %) | 1.4 | % | |||||||||||
| 3 | New York Metro Area | 6,247 | 9.7 | % | 2,541 | 95.7 | % | (4.4 | %) | 6.3 | % | (10.8 | %) | (5.8 | %) | 1.3 | % | |||||||||||
| 4 | Los Angeles | 7,099 | 7.9 | % | 1,675 | 94.5 | % | (3.4 | %) | (0.4 | %) | (5.0 | %) | (4.6 | %) | 1.2 | % | |||||||||||
| 5 | Boston | 6,021 | 7.9 | % | 2,023 | 95.2 | % | 2.1 | % | (1.8 | %) | 4.7 | % | 1.3 | % | 0.7 | % | |||||||||||
| 6 | Seattle/Tacoma | 8,473 | 6.7 | % | 1,282 | 93.7 | % | (6.0 | %) | 2.7 | % | (11.1 | %) | (6.8 | %) | 0.8 | % | |||||||||||
| 7 | San Francisco Bay Area | 6,239 | 6.6 | % | 1,618 | 95.1 | % | (4.3 | %) | 2.4 | % | (7.9 | %) | (6.1 | %) | 1.8 | % | |||||||||||
| 8 | Denver | 7,755 | 5.4 | % | 1,009 | 95.3 | % | (1.2 | %) | 2.0 | % | (2.8 | %) | (2.7 | %) | 1.5 | % | |||||||||||
| 9 | Phoenix | 10,647 | 5.3 | % | 830 | 94.4 | % | (4.8 | %) | 2.0 | % | (9.2 | %) | (5.9 | %) | 1.1 | % | |||||||||||
| 10 | San Diego | 4,103 | 4.7 | % | 1,647 | 94.9 | % | 0.3 | % | 1.6 | % | (0.3 | %) | (1.1 | %) | 1.4 | % | |||||||||||
| 11 | Orlando | 7,690 | 4.5 | % | 959 | 94.3 | % | (3.0 | %) | 1.4 | % | (5.8 | %) | (4.5 | %) | 1.6 | % | |||||||||||
| 12 | Suburban Maryland | 4,823 | 3.8 | % | 1,208 | 95.0 | % | 2.2 | % | 1.5 | % | 2.6 | % | 0.8 | % | 1.3 | % | |||||||||||
| 13 | Inland Empire, CA | 4,219 | 3.7 | % | 1,298 | 95.0 | % | (2.9 | %) | 0.2 | % | (4.4 | %) | (3.6 | %) | 0.7 | % | |||||||||||
| 14 | Orange County, CA | 3,175 | 3.3 | % | 1,501 | 94.7 | % | (4.8 | %) | 2.3 | % | (7.8 | %) | (5.4 | %) | 0.7 | % | |||||||||||
| 15 | Atlanta | 5,979 | 3.2 | % | 951 | 95.6 | % | (4.4 | %) | 3.2 | % | (10.0 | %) | (6.1 | %) | 1.7 | % | |||||||||||
| 16 | All Other Markets | 13,633 | 7.6 | % | 959 | 95.0 | % | (1.6 | %) | 1.2 | % | (3.7 | %) | (2.7 | %) | 1.1 | % | |||||||||||
| Total | 117,349 | 100.0 | % | $ 1,337 | 94.9 | % | (2.1 | %) | 1.5 | % | (4.2 | %) | (3.3 | %) | 1.2 | % | ||||||||||||
| (1) | Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period. | |||||||||||||||||||||||||||
| Equity Residential | ||||||||||||||
| Second Quarter 2010 vs. Second Quarter 2009 | ||||||||||||||
| Same Store Operating Expenses | ||||||||||||||
| $ in thousands - 117,349 Same Store Units | ||||||||||||||
| % of Actual | ||||||||||||||
| Q2 2010 | ||||||||||||||
| Actual | Actual | $ | % | Operating | ||||||||||
| Q2 2010 | Q2 2009 | Change | Change | Expenses | ||||||||||
| Real estate taxes | $ 45,299 | $ 46,190 | $ (891 | ) | (1.9 | %) | 26.8 | % | ||||||
| On-site payroll (1) | 42,021 | 39,903 | 2,118 | 5.3 | % | 24.9 | % | |||||||
| Utilities (2) | 25,092 | 25,018 | 74 | 0.3 | % | 14.8 | % | |||||||
| Repairs and maintenance (3) | 24,772 | 24,432 | 340 | 1.4 | % | 14.7 | % | |||||||
| Property management costs (4) | 18,042 | 16,815 | 1,227 | 7.3 | % | 10.7 | % | |||||||
| Insurance | 5,637 | 5,634 | 3 | 0.1 | % | 3.3 | % | |||||||
| Leasing and advertising | 3,619 | 3,972 | (353 | ) | (8.9 | %) | 2.1 | % | ||||||
| Other operating expenses (5) | 4,528 | 4,478 | 50 | 1.1 | % | 2.7 | % | |||||||
| Same store operating expenses | $ 169,010 | $ 166,442 | $ 2,568 | 1.5 | % | 100.0 | % | |||||||
| June YTD 2010 vs. June YTD 2009 | ||||||||||||||
| Same Store Operating Expenses | ||||||||||||||
| $ in thousands - 117,349 Same Store Units | ||||||||||||||
| % of Actual | ||||||||||||||
| YTD 2010 | ||||||||||||||
| Actual | Actual | $ | % | Operating | ||||||||||
| YTD 2010 | YTD 2009 | Change | Change | Expenses | ||||||||||
| Real estate taxes | $ 92,136 | $ 92,380 | $ (244 | ) | (0.3 | %) | 26.7 | % | ||||||
| On-site payroll (1) | 83,711 | 82,480 | 1,231 | 1.5 | % | 24.2 | % | |||||||
| Utilities (2) | 54,062 | 53,380 | 682 | 1.3 | % | 15.6 | % | |||||||
| Repairs and maintenance (3) | 50,856 | 48,877 | 1,979 | 4.0 | % | 14.7 | % | |||||||
| Property management costs (4) | 35,855 | 33,698 | 2,157 | 6.4 | % | 10.4 | % | |||||||
| Insurance | 11,273 | 11,268 | 5 | 0.0 | % | 3.3 | % | |||||||
| Leasing and advertising | 7,421 | 7,603 | (182 | ) | (2.4 | %) | 2.1 | % | ||||||
| Other operating expenses (5) | 10,201 | 10,574 | (373 | ) | (3.5 | %) | 3.0 | % | ||||||
| Same store operating expenses | $ 345,515 | $ 340,260 | $ 5,255 | 1.5 | % | 100.0 | % | |||||||
| (1) | On-site payroll - Includes payroll and related expenses for on-site personnel including property managers, leasing consultants and maintenance staff. | |
| (2) | Utilities - Represents gross expenses prior to any recoveries under the Resident Utility Billing System ("RUBS"). Recoveries are reflected in rental income. | |
| (3) | Repairs and maintenance - Includes general maintenance costs, unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs. | |
| (4) | Property management costs - Includes payroll and related expenses for departments, or portions of departments, that directly support on-site management. These include such departments as regional and corporate property management, property accounting, human resources, training, marketing and revenue management, procurement, real estate tax, property legal services and information technology. | |
| (5) | Other operating expenses - Includes administrative costs such as office supplies, telephone and data charges and association and business licensing fees. |
| Equity Residential | |||||||||||||||||||
| Debt Summary as of June 30, 2010 | |||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||
| Weighted | |||||||||||||||||||
| Weighted | Average | ||||||||||||||||||
| Average | Maturities | ||||||||||||||||||
| Amounts (1) | % of Total | Rates (1) | (years) | ||||||||||||||||
| Secured | $ 4,754,601 | 49.2 | % | 4.86 | % | 8.5 | |||||||||||||
| Unsecured | 4,904,800 | 50.8 | % | 4.91 | % | 4.2 | |||||||||||||
| Total | $ 9,659,401 | 100.0 | % | 4.89 | % | 6.3 | |||||||||||||
| Fixed Rate Debt: | |||||||||||||||||||
| Secured - Conventional | $ 3,796,247 | 39.3 | % | 5.77 | % | 7.1 | |||||||||||||
| Unsecured - Public/Private | 3,775,953 | 39.1 | % | 5.84 | % | 4.9 | |||||||||||||
| Fixed Rate Debt | 7,572,200 | 78.4 | % | 5.80 | % | 6.0 | |||||||||||||
| Floating Rate Debt: | |||||||||||||||||||
| Secured - Conventional | 352,712 | 3.6 | % | 2.44 | % | 3.5 | |||||||||||||
| Secured - Tax Exempt | 605,642 | 6.3 | % | 0.55 | % | 20.9 | |||||||||||||
| Unsecured - Public/Private | 808,847 | 8.4 | % | 1.70 | % | 1.8 | |||||||||||||
| Unsecured - Revolving Credit Facility | 320,000 | 3.3 | % | 0.66 | % | 1.7 | |||||||||||||
| Floating Rate Debt | 2,087,201 | 21.6 | % | 1.36 | % | 7.3 | |||||||||||||
| Total | $ 9,659,401 | 100.0 | % | 4.89 | % | 6.3 | |||||||||||||
| (1) | Net of the effect of any derivative instruments. Weighted average rates are for the six months ended June 30, 2010. | ||||||||||||||||||
| Note: The Company capitalized interest of approximately $7.9 million and $21.0 million during the six months ended June 30, 2010 and 2009, respectively. The Company capitalized interest of approximately $3.5 million and $10.4 million during the quarters ended June 30, 2010 and 2009 respectively. | |||||||||||||||||||
| Debt Maturity Schedule as of June 30, 2010 | |||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||
| Weighted | Weighted | ||||||||||||||||||
| Average Rates | Average | ||||||||||||||||||
| Fixed | Floating | on Fixed | Rates on | ||||||||||||||||
| Year | Rate (1) | Rate (1) | Total | % of Total | Rate Debt (1) | Total Debt (1) | |||||||||||||
| 2010 | $ 27,197 | $ 51,797 | $ 78,994 | 0.8 | % | 7.61 | % | 4.00 | % | ||||||||||
| 2011 | 1,066,609 | (2 | ) | 740,906 | (3 | ) | 1,807,515 | 18.7 | % | 5.51 | % | 3.87 | % | ||||||
| 2012 | 763,301 | 323,834 | (4 | ) | 1,087,135 | 11.3 | % | 5.70 | % | 4.23 | % | ||||||||
| 2013 | 266,597 | 309,351 | 575,948 | 6.0 | % | 6.76 | % | 4.90 | % | ||||||||||
| 2014 | 517,687 | 22,045 | 539,732 | 5.6 | % | 5.28 | % | 5.20 | % | ||||||||||
| 2015 | 355,940 | - | 355,940 | 3.7 | % | 6.41 | % | 6.41 | % | ||||||||||
| 2016 | 1,089,484 | - | 1,089,484 | 11.3 | % | 5.32 | % | 5.32 | % | ||||||||||
| 2017 | 1,355,744 | 456 | 1,356,200 | 14.0 | % | 5.87 | % | 5.87 | % | ||||||||||
| 2018 | 336,093 | 44,677 | 380,770 | 3.9 | % | 5.95 | % | 5.45 | % | ||||||||||
| 2019 | 502,244 | 20,766 | 523,010 | 5.4 | % | 5.19 | % | 5.01 | % | ||||||||||
| 2020+ | 1,291,304 | 573,369 | 1,864,673 | 19.3 | % | 6.11 | % | 4.88 | % | ||||||||||
| Total | $ 7,572,200 | $ 2,087,201 | $ 9,659,401 | 100.0 | % | 5.86 | % | 4.90 | % | ||||||||||
| (1) | Net of the effect of any derivative instruments. Weighted average rates are as of June 30, 2010. | |
| (2) | Includes $482.5 million face value 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 the Company's $500.0 million term loan facility, which originally matured on October 5, 2010. Effective April 12, 2010, the Company exercised the first of its two one-year extension options. As a result, the maturity date is now October 5, 2011 and there is one remaining one-year extension option exercisable by the Company. | |
| (4) | Includes $320.0 million outstanding on the Company's unsecured revolving credit facility. As of June 30, 2010, there was approximately $1.02 billion available on this facility. |
| Equity Residential | ||||||||||||||||
| Unsecured Debt Summary as of June 30, 2010 | ||||||||||||||||
| (Amounts in thousands) | ||||||||||||||||
| Unamortized | ||||||||||||||||
| Coupon | Due | Face | Premium/ | Net | ||||||||||||
| Rate | Date | Amount | (Discount) | Balance | ||||||||||||
| Fixed Rate Notes: | ||||||||||||||||
| 6.950 | % | 03/02/11 | $ 93,096 | $ 602 | $ 93,698 | |||||||||||
| 6.625 | % | 03/15/12 | 253,858 | (321 | ) | 253,537 | ||||||||||
| 5.500 | % | 10/01/12 | 222,133 | (493 | ) | 221,640 | ||||||||||
| 5.200 | % | 04/01/13 | (1) | 400,000 | (325 | ) | 399,675 | |||||||||
| Fair Value Derivative Adjustments | (1) | (300,000 | ) | - | (300,000 | ) | ||||||||||
| 5.250 | % | 09/15/14 | 500,000 | (259 | ) | 499,741 | ||||||||||
| 6.584 | % | 04/13/15 | 300,000 | (535 | ) | 299,465 | ||||||||||
| 5.125 | % | 03/15/16 | 500,000 | (305 | ) | 499,695 | ||||||||||
| 5.375 | % | 08/01/16 | 400,000 | (1,129 | ) | 398,871 | ||||||||||
| 5.750 | % | 06/15/17 | 650,000 | (3,560 | ) | 646,440 | ||||||||||
| 7.125 | % | 10/15/17 | 150,000 | (473 | ) | 149,527 | ||||||||||
| 7.570 | % | 08/15/26 | 140,000 | - | 140,000 | |||||||||||
| 3.850 | % | 08/15/26 | (2) | 482,545 | (8,881 | ) | 473,664 | |||||||||
| 3,791,632 | (15,679 | ) | 3,775,953 | |||||||||||||
| Floating Rate Notes: | ||||||||||||||||
| 04/01/13 | (1) | 300,000 | - | 300,000 | ||||||||||||
| Fair Value Derivative Adjustments | (1) | 8,847 | - | 8,847 | ||||||||||||
| Term Loan Facility | LIBOR+0.50% | 10/05/11 | (3)(4) | 500,000 | - | 500,000 | ||||||||||
| 808,847 | - | 808,847 | ||||||||||||||
| Revolving Credit Facility: | LIBOR+0.50% | 02/28/12 | (3)(5) | 320,000 |
|
- | 320,000 | |||||||||
| Total Unsecured Debt | $ 4,920,479 | $ (15,679 | ) | $ 4,904,800 | ||||||||||||
| (1) | $300.0 million in fair value interest rate swaps converts a portion of the 5.200% notes due April 1, 2013 to a floating interest rate. | |
| (2) | 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. | |
| (3) | Facilities are private. All other unsecured debt is public. | |
| (4) | Represents the Company's $500.0 million term loan facility, which originally matured on October 5, 2010. Effective April 12, 2010, the Company exercised the first of its two one-year extension options. As a result, the maturity date is now October 5, 2011 and there is one remaining one-year extension option exercisable by the Company. | |
| (5) | Represents amount outstanding on the Company's unsecured revolving credit facility which matures on February 28, 2012. As of June 30, 2010, there was approximately $1.02 billion available on this facility. |
| Equity Residential | ||||||
| Selected Unsecured Public Debt Covenants | ||||||
| June 30, | March 31, | |||||
| 2010 | 2010 | |||||
| Total Debt to Adjusted Total Assets (not to exceed 60%) | 48.9 | % | 48.8 | % | ||
| Secured Debt to Adjusted Total Assets (not to exceed 40%) | 24.1 | % | 24.8 | % | ||
| Consolidated Income Available for Debt Service to | ||||||
| Maximum Annual Service Charges | ||||||
| (must be at least 1.5 to 1) | 2.54 | 2.48 | ||||
| Total Unsecured Assets to Unsecured Debt | 251.6 | % | 255.5 | % | ||
| (must be at least 150%) | ||||||
| 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 June 30, 2010 | |||||||||||||||||||||
| (Amounts in thousands except for share/unit and per share amounts) | |||||||||||||||||||||
| Secured Debt | $ 4,754,601 | 49.2 | % | ||||||||||||||||||
| Unsecured Debt | 4,904,800 | 50.8 | % | ||||||||||||||||||
| Total Debt | 9,659,401 | 100.0 | % | 43.4 | % | ||||||||||||||||
| Common Shares (includes Restricted Shares) | 283,442,674 | 95.3 | % | ||||||||||||||||||
| Units (includes OP Units and LTIP Units) | 13,899,303 | 4.7 | % | ||||||||||||||||||
| Total Shares and Units | 297,341,977 | 100.0 | % | ||||||||||||||||||
| Common Share Equivalents (see below) | 394,143 | ||||||||||||||||||||
| Total outstanding at quarter-end | 297,736,120 | ||||||||||||||||||||
| Common Share Price at June 30, 2010 | $ 41.64 | ||||||||||||||||||||
| 12,397,732 | 98.4 | % | |||||||||||||||||||
| Perpetual Preferred Equity (see below) | 200,000 | 1.6 | % | ||||||||||||||||||
| Total Equity | 12,597,732 | 100.0 | % | 56.6 | % | ||||||||||||||||
| Total Market Capitalization | $ 22,257,133 | 100.0 | % | ||||||||||||||||||
| Convertible Preferred Equity as of June 30, 2010 | |||||||||||||||||||||
| (Amounts in thousands except for share and per share amounts) | |||||||||||||||||||||
| Annual | Annual | Weighted | Common | ||||||||||||||||||
| Redemption | Outstanding | Liquidation | Dividend | Dividend | Average | Conversion | Share | ||||||||||||||
| Series | Date | Shares | Value | Per Share | Amount | Rate | Ratio | Equivalents | |||||||||||||
| Preferred Shares: | |||||||||||||||||||||
| 7.00% Series E | 11/1/98 | 324,966 | $ 8,124 | $ 1.75 | $ 569 | 1.1128 | 361,622 | ||||||||||||||
| 7.00% Series H | 6/30/98 | 22,459 | 562 | 1.75 | 39 | 1.4480 | 32,521 | ||||||||||||||
| Total Convertible Preferred Equity | 347,425 | $ 8,686 | $ 608 | 7.00 | % | 394,143 | |||||||||||||||
| Perpetual Preferred Equity as of June 30, 2010 | |||||||||||||||||||||
| (Amounts in thousands except for share and per share amounts) | |||||||||||||||||||||
| Annual | Annual | Weighted | |||||||||||||||||||
| Redemption | Outstanding | Liquidation | Dividend | Dividend | Average | ||||||||||||||||
| Series | Date | Shares | Value | Per Share | Amount | Rate | |||||||||||||||
| Preferred Shares: | |||||||||||||||||||||
| 8.29% Series K | 12/10/26 | 1,000,000 | $ 50,000 | $ 4.145 | $ 4,145 | ||||||||||||||||
| 6.48% Series N | 6/19/08 | 600,000 | 150,000 | 16.20 | 9,720 | ||||||||||||||||
| Total Perpetual Preferred Equity | 1,600,000 | $ 200,000 | $ 13,865 | 6.93 | % | ||||||||||||||||
| Equity Residential | ||||||||||
| Common Share and Unit | ||||||||||
| Weighted Average Amounts Outstanding | ||||||||||
| YTD Q210 | YTD Q209 | Q210 | Q209 | |||||||
| Weighted Average Amounts Outstanding for Net Income Purposes: | ||||||||||
| Common Shares - basic | 281,435,061 | 272,613,907 | 282,216,694 | 272,901,078 | ||||||
| Shares issuable from assumed conversion/vesting of: | ||||||||||
| - OP Units | 13,742,403 | 16,237,055 | 13,680,607 | 16,089,264 | ||||||
| - long-term compensation award shares/units | 3,066,663 | 300,939 | 3,744,505 | 347,395 | ||||||
| Total Common Shares and Units - diluted | 298,244,127 | 289,151,901 | 299,641,806 | 289,337,737 | ||||||
| Weighted Average Amounts Outstanding for FFO Purposes: | ||||||||||
| Common Shares - basic | 281,435,061 | 272,613,907 | 282,216,694 | 272,901,078 | ||||||
| OP Units - basic | 13,742,403 | 16,237,055 | 13,680,607 | 16,089,264 | ||||||
| Total Common Shares and OP Units - basic | 295,177,464 | 288,850,962 | 295,897,301 | 288,990,342 | ||||||
| Shares issuable from assumed conversion/vesting of: | ||||||||||
| - convertible preferred shares/units | 397,306 | 405,791 | 397,004 | 405,555 | ||||||
| - long-term compensation award shares/units | 3,066,663 | 300,939 | 3,744,505 | 347,395 | ||||||
| Total Common Shares and Units - diluted | 298,641,433 | 289,557,692 | 300,038,810 | 289,743,292 | ||||||
| Period Ending Amounts Outstanding: | ||||||||||
| Common Shares (includes Restricted Shares) | 283,442,674 | 273,975,692 | ||||||||
| Units (includes OP Units and LTIP Units) | 13,899,303 | 16,205,905 | ||||||||
| Total Shares and Units | 297,341,977 | 290,181,597 | ||||||||
| Equity Residential | ||||||||||||||||||||
| Partially Owned Entities as of June 30, 2010 | ||||||||||||||||||||
| (Amounts in thousands except for project and unit amounts) | ||||||||||||||||||||
| Consolidated | Unconsolidated | |||||||||||||||||||
| Development Projects | ||||||||||||||||||||
| Held for | Institutional | |||||||||||||||||||
| and/or Under | Completed, Not | Completed | Joint | |||||||||||||||||
| Development | Stabilized (4) | and Stabilized | Other | Total | Ventures (5) | |||||||||||||||
| Total projects (1) | - | 1 | 3 | 21 | 25 | 24 | ||||||||||||||
| Total units (1) | - | 163 | 1,139 | 3,796 | 5,098 | 5,635 | ||||||||||||||
|
Operating information for the six months ended 6/30/10 (at 100%): |
||||||||||||||||||||
| Operating revenue | $ 1,496 | $ 1,026 | $ 11,338 | $ 27,779 | $ 41,639 | $ 34,756 | ||||||||||||||
| Operating expenses | 2,330 | 676 | 4,227 | 9,779 | 17,012 | 16,459 | ||||||||||||||
| Net operating (loss) income | (834 | ) | 350 | 7,111 | 18,000 | 24,627 | 18,297 | |||||||||||||
| Depreciation | - | 886 | 5,223 | 7,414 | 13,523 | 9,230 | ||||||||||||||
| General and administrative/other | 46 | - | 96 | 19 | 161 | 121 | ||||||||||||||
| Operating (loss) income | (880 | ) | (536 | ) | 1,792 | 10,567 | 10,943 | 8,946 | ||||||||||||
| Interest and other income | 15 | 6 | - | 11 | 32 | 67 | ||||||||||||||
| Other expenses | (401 | ) | - | - | (451 | ) | (852 | ) | - | |||||||||||
| Interest: | ||||||||||||||||||||
| Expense incurred, net | (1,170 | ) | (272 | ) | (2,778 | ) | (10,060 | ) | (14,280 | ) | (13,224 | ) | ||||||||
| Amortization of deferred financing costs | - | (64 | ) | (323 | ) | (111 | ) | (498 | ) | (525 | ) | |||||||||
|
(Loss) before income and other taxes and discontinued operations |
(2,436 | ) | (866 | ) | (1,309 | ) | (44 | ) | (4,655 | ) | (4,736 | ) | ||||||||
| Income and other tax (expense) benefit | (33 | ) | - | - | (24 | ) | (57 | ) | (127 | ) | ||||||||||
| Net gain on sales of discontinued operations | 720 | - | - | - | 720 | 9,983 | ||||||||||||||
| Net (loss) income | $ (1,749 | ) | $ (866 | ) | $ (1,309 | ) | $ (68 | ) | $ (3,992 | ) | $ 5,120 | |||||||||
| Debt - Secured (2): | ||||||||||||||||||||
| EQR Ownership (3) | $ 146,534 | $ 33,872 | $ 240,436 | $ 220,218 | $ 641,060 | $ 66,200 | ||||||||||||||
| Noncontrolling Ownership | - | - | - | 81,469 | 81,469 | 198,600 | ||||||||||||||
| Total (at 100%) | $ 146,534 | $ 33,872 | $ 240,436 | $ 301,687 | $ 722,529 | $ 264,800 | ||||||||||||||
| (1) Project and unit counts exclude all uncompleted development projects until those projects are substantially completed. See the Consolidated Development and Lease-Up Projects schedule for more detail. | |
| (2) All debt is non-recourse to the Company with the exception of $14.0 million in mortgage debt on various development projects. | |
| (3) Represents the Company's current 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. | |
|
(5) Unconsolidated debt maturities and rates are as follows: $121.0 million, December 1, 2010, 7.54%; and $143.8 million, March 1, 2011, 6.95%. On April 30, 2010, the Company acquired the 75% equity interest it did not previously own in seven of the unconsolidated properties containing 1,811 units in exchange for an approximate $30.0 million payment to its partner. In addition, the Company repaid the net $70.0 million mortgage loan, which was to mature on May 1, 2010, concurrent with closing using proceeds drawn from the Company's line of credit. The total consideration paid by the Company represents an implied 8.4% cap rate. The Company anticipates selling the 25% equity interest it currently owns in 13 of the unconsolidated properties containing 2,624 units in exchange for an approximate $12.5 million payment from its partner and the related $121.0 million in non-recourse mortgage debt will be extinguished by the partner at closing. The total consideration received by the Company represents an implied 7.0% cap rate. |
|
| Equity Residential | |||||||||||||||||||||||||||
| Consolidated Development and Lease-Up Projects as of June 30, 2010 | |||||||||||||||||||||||||||
| (Amounts in thousands except for project and unit amounts) | |||||||||||||||||||||||||||
| Total Book | |||||||||||||||||||||||||||
| Total | Total | Value Not | Estimated | Estimated | |||||||||||||||||||||||
| No. of | Capital | Book Value | Placed in | Total | Percentage | Percentage | Percentage | Completion | Stabilization | ||||||||||||||||||
| Projects | Location | Units | Cost (1) | to Date | Service | Debt | Completed | Leased | Occupied | Date | Date | ||||||||||||||||
| Projects Under Development - Wholly Owned: | |||||||||||||||||||||||||||
| Red 160 (formerly Redmond Way) | Redmond, WA | 250 | $ 84,382 | $ 66,267 | $ 66,267 | $ - | 85 | % | 31 | % | 9 | % | Q1 2011 | Q1 2012 | |||||||||||||
| Westgate (5) | Pasadena, CA | 480 | 170,558 | 139,479 | 139,479 | 163,160 | (2 | ) | 85 | % | 52 | % | 47 | % | Q2 2011 | Q2 2012 | |||||||||||
| 500 West 23rd Street (formerly 10 Chelsea) (6) | New York, NY | 111 | 55,555 | 15,683 | 15,683 | - | 2 | % | - | - | Q4 2011 | Q4 2012 | |||||||||||||||
| Savoy III | Aurora, CO | 168 | 23,856 | 3,005 | 3,005 | - | 1 | % | - | - | Q3 2012 | Q2 2013 | |||||||||||||||
| Projects Under Development - Wholly Owned | 1,009 | 334,351 | 224,434 | 224,434 | 163,160 | ||||||||||||||||||||||
| Projects Under Development - Partially Owned: | |||||||||||||||||||||||||||
| The Brooklyner (formerly 111 Lawrence Street) | Brooklyn, NY | 490 | 280,868 | 248,846 | 248,846 | 128,837 | 95 | % | 57 | % | 54 | % | Q3 2010 | Q3 2011 | |||||||||||||
| Projects Under Development - Partially Owned | 490 | 280,868 | 248,846 | 248,846 | 128,837 | ||||||||||||||||||||||
| Projects Under Development | 1,499 | 615,219 | 473,280 | 473,280 | 291,997 | (3 | ) | ||||||||||||||||||||
| Completed Not Stabilized - Wholly Owned (4): | |||||||||||||||||||||||||||
| Third Square (formerly 303 Third) | Cambridge, MA | 482 | 257,457 | 256,470 | - | - | 94 | % | 87 | % | Completed | Q4 2010 | |||||||||||||||
| 70 Greene (formerly 77 Hudson) | Jersey City, NJ | 480 | 269,958 | 267,580 | - | - | 89 | % | 87 | % | Completed | Q1 2011 | |||||||||||||||
| Reunion at Redmond Ridge | Redmond, WA | 321 | 53,175 | 53,151 | - | - | 78 | % | 75 | % | Completed | Q1 2011 | |||||||||||||||
| 425 Mass (7) | Washington, D.C. | 559 | 166,750 | 166,750 | - | - | 30 | % | 16 | % | Completed | Q1 2012 | |||||||||||||||
| Projects Completed Not Stabilized - Wholly Owned | 1,842 | 747,340 | 743,951 | - | - | ||||||||||||||||||||||
| Completed Not Stabilized - Partially Owned (4): | |||||||||||||||||||||||||||
| Montclair Metro | Montclair, NJ | 163 | 48,730 | 45,970 | - | 33,872 | 97 | % | 96 | % | Completed | Q3 2010 | |||||||||||||||
| Projects Completed Not Stabilized - Partially Owned | 163 | 48,730 | 45,970 | - | 33,872 | ||||||||||||||||||||||
| Projects Completed Not Stabilized | 2,005 | 796,070 | 789,921 | - | 33,872 | ||||||||||||||||||||||
| Completed and Stabilized During the Quarter - Wholly Owned: | |||||||||||||||||||||||||||
| Reserve at Town Center II | Mill Creek, WA | 100 | 21,548 | 21,475 | - | - | 94 | % | 91 | % | Completed | Stabilized | |||||||||||||||
| Projects Completed and Stabilized During the Quarter - Wholly Owned | 100 | 21,548 | 21,475 | - | - | ||||||||||||||||||||||
| Completed and Stabilized During the Quarter - Partially Owned: | |||||||||||||||||||||||||||
| Red Road Commons | South Miami, FL | 404 | 127,839 | 126,933 | - | 73,978 | 98 | % | 96 | % | Completed | Stabilized | |||||||||||||||
| Projects Completed and Stabilized During the Quarter - Partially Owned | 404 | 127,839 | 126,933 | - | 73,978 | ||||||||||||||||||||||
| Projects Completed and Stabilized During the Quarter | 504 | 149,387 | 148,408 | - | 73,978 | ||||||||||||||||||||||
| Total Projects | 4,008 | $ 1,560,676 | $ 1,411,609 | $ 473,280 | $ 399,847 | ||||||||||||||||||||||
| Land Held for Development | N/A | N/A | $ 251,219 | $ 251,219 | $ 17,697 | ||||||||||||||||||||||
| Total Capital | Q2 2010 | ||||||||||||||||||||||||||
| NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS | Cost (1) | NOI | |||||||||||||||||||||||||
| Projects Under Development | $ 615,219 | $ 702 | |||||||||||||||||||||||||
| Completed Not Stabilized | 796,070 | 2,772 | |||||||||||||||||||||||||
| Completed and Stabilized During the Quarter | 149,387 | 1,288 | |||||||||||||||||||||||||
| Total Development NOI Contribution | $ 1,560,676 | $ 4,762 | |||||||||||||||||||||||||
| (1) Total capital cost represents estimated development cost for projects under development and/or developed 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 $31.5 million held in escrow by the lender and released as draw requests are made. This escrowed amount is classified as "Deposits - restricted" in the consolidated balance sheets at June 30, 2010. | |
| (3) Of the approximately $141.9 million of capital cost remaining to be funded at 6/30/10 for projects under development, $63.1 million will be funded by fully committed third party bank loans and the remaining $78.8 million will be funded by cash on hand. | |
| (4) Properties included here are substantially complete. However, they may still require additional exterior and interior work for all units to be available for leasing. | |
| (5) The partner's interest in this development property, an adjacent land parcel and an unrelated operating property were acquired during the second quarter of 2010 for $0.1 million and as a result the assets are now wholly owned. | |
| (6) 500 West 23rd Street - The land under this development is subject to a long term ground lease. | |
| (7) 425 Mass - The Company acquired this unoccupied, completed development project on 4/7/10 and has begun lease-up activities. | |
| Equity Residential | |||||||||||||||||||||||||||||||||
| Repairs and Maintenance Expenses and Capital Expenditures to Real Estate | |||||||||||||||||||||||||||||||||
| For the Six Months Ended June 30, 2010 | |||||||||||||||||||||||||||||||||
| (Amounts in thousands except for unit and per unit amounts) | |||||||||||||||||||||||||||||||||
| Repairs and Maintenance Expenses | Capital Expenditures to Real Estate | Total Expenditures | |||||||||||||||||||||||||||||||
| Building | |||||||||||||||||||||||||||||||||
| Total | Avg. | Avg. | Avg. | Replacements | Avg. | Improvements | Avg. | Avg. | Grand | Avg. | |||||||||||||||||||||||
| Units (1) | Expense (2) | Per Unit | Payroll (3) | Per Unit | Total | Per Unit | (4) | Per Unit | (5) | Per Unit | Total | Per Unit | Total | Per Unit | |||||||||||||||||||
| Same Store Properties (6) | 117,349 | $ 50,856 | $ 434 | $ 41,422 | $ 353 | $ 92,278 | $ 787 | $ 33,724 | $ 287 | $ 21,683 | $ 185 | $ 55,407 | $ 472 | (9) | $ 147,685 | $ 1,259 | |||||||||||||||||
| Non-Same Store Properties (7) | 9,470 | 3,102 | 434 | 2,616 | 366 | 5,718 | 800 | 1,182 | 165 | 2,403 | 336 | 3,585 | 501 | 9,303 | 1,301 | ||||||||||||||||||
| Other (8) | - | - | 1,084 | 1,084 | 137 | 53 | 190 | 1,274 | |||||||||||||||||||||||||
| Total | 126,819 | $ 53,958 | $ 45,122 | $ 99,080 | $ 35,043 | $ 24,139 | $ 59,182 | $ 158,262 | |||||||||||||||||||||||||
| (1) | Total Units - Excludes 5,635 unconsolidated units and 4,637 military housing units, for which repairs and maintenance expenses and capital expenditures to real estate are self-funded and do not consolidate into the Company's results. | |
| (2) | Repairs and Maintenance Expenses - Includes general maintenance costs, unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs. | |
| (3) | Maintenance Payroll - Includes payroll and related expenses for maintenance staff. | |
| (4) | Replacements - Includes new expenditures inside the units such as appliances, mechanical equipment, fixtures and flooring, including carpeting. Replacements for same store properties also include $13.7 million spent on various assets related to unit renovations/rehabs (primarily kitchens and baths) designed to reposition these assets for higher rental levels in their respective markets. | |
| (5) | Building Improvements - Includes roof replacement, paving, amenities and common areas, building mechanical equipment systems, exterior painting and siding, major landscaping, vehicles and office and maintenance equipment. | |
| (6) | Same Store Properties - Primarily includes all properties acquired or completed and stabilized prior to January 1, 2009, less properties subsequently sold. | |
| (7) | Non-Same Store Properties - Primarily includes all properties acquired during 2009 and 2010, plus any properties in lease-up and not stabilized as of January 1, 2009. Per unit amounts are based on a weighted average of 7,153 units. | |
| (8) | Other - Primarily includes expenditures for properties sold during the period. | |
| (9) | For 2010, the Company estimates that it will spend approximately $1,075 per unit of capital expenditures for its same store properties inclusive of unit renovation/rehab costs, or $825 per unit excluding unit renovation/rehab costs. |
| Equity Residential | |||||||||||||
| Discontinued Operations | |||||||||||||
| (Amounts in thousands) | |||||||||||||
| Six Months Ended | Quarter Ended | ||||||||||||
| June 30, | June 30, | ||||||||||||
| 2010 | 2009 | 2010 | 2009 | ||||||||||
| REVENUES | |||||||||||||
| Rental income | $ 3,886 | $ 67,839 | $ 1,019 | $ 31,225 | |||||||||
| Total revenues | 3,886 | 67,839 | 1,019 | 31,225 | |||||||||
| EXPENSES (1) | |||||||||||||
| Property and maintenance | 2,179 | 21,627 | 662 | 9,963 | |||||||||
| Real estate taxes and insurance | 675 | 7,238 | 92 | 3,234 | |||||||||
| Depreciation | 711 | 16,883 | 148 | 8,051 | |||||||||
| General and administrative | 16 | 25 | 13 | 20 | |||||||||
| Total expenses | 3,581 | 45,773 | 915 | 21,268 | |||||||||
| Discontinued operating income | 305 | 22,066 | 104 | 9,957 | |||||||||
| Interest and other income | 360 | 10 | 359 | 3 | |||||||||
| Interest (2): | |||||||||||||
| Expense incurred, net | (23 | ) | (703 | ) | (1 | ) | (273 | ) | |||||
| Amortization of deferred financing costs | - | (38 | ) | - | (3 | ) | |||||||
| Income and other tax (expense) benefit | (25 | ) | (67 | ) | 4 | (18 | ) | ||||||
| Discontinued operations | 617 | 21,268 | 466 | 9,666 | |||||||||
| Net gain on sales of discontinued operations | 60,253 | 145,798 | 217 | 83,927 | |||||||||
| Discontinued operations, net | $ 60,870 | $ 167,066 | $ 683 | $ 93,593 | |||||||||
| (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 | |||||||||||||||||||
| FFO Guidance Reconciliations and Non-Comparable Items | |||||||||||||||||||
| (Amounts in thousands except per share data) | |||||||||||||||||||
| (All per share data is diluted) | |||||||||||||||||||
| FFO Guidance Reconciliations | |||||||||||||||||||
| FFO Reconciliations | |||||||||||||||||||
| Guidance Q2 2010 | |||||||||||||||||||
| to Actual Q2 2010 | |||||||||||||||||||
| Amounts | Per Share | ||||||||||||||||||
| Guidance Q2 2010 FFO - Diluted (1) (2) | $ 165,920 | $ 0.554 | |||||||||||||||||
| Property NOI | 6,563 | 0.022 | |||||||||||||||||
| Insurance/litigation settlement proceeds (interest and other income) | 2,422 | 0.008 | |||||||||||||||||
| Other | 113 | (0.001 | ) | ||||||||||||||||
| Actual Q2 2010 FFO - Diluted (1) (2) | $ 175,018 | $ 0.583 | |||||||||||||||||
| Non-Comparable Items (3) | |||||||||||||||||||
| Six Months Ended June 30, | Quarter Ended June 30, | ||||||||||||||||||
| 2010 | 2009 | Variance | 2010 | 2009 | Variance | ||||||||||||||
| Impairment | $ - | $ (11,124 | ) | $ 11,124 | $ - | $ (11,124 | ) | $ 11,124 | |||||||||||
| Insurance/litigation settlement proceeds (interest and other income) | 5,192 | 171 | 5,021 | 3,192 | - | 3,192 | |||||||||||||
| Debt extinguishment gains (interest and other income) | - | 2,020 | (2,020 | ) | - | - | - | ||||||||||||
| Gain on sale of investment securities (interest and other income) | - | 4,943 | (4,943 | ) | - | 4,943 | (4,943 | ) | |||||||||||
| Write-off of pursuit costs (other expenses) | (2,062 | ) | (162 | ) | (1,900 | ) | (1,016 | ) | 30 | (1,046 | ) | ||||||||
| Property acquisition costs (other expenses) | (3,964 | ) | (144 | ) | (3,820 | ) | (627 | ) | (44 | ) | (583 | ) | |||||||
| Non-cash convertible debt discount (includes extinguishment write-offs) | (3,890 | ) | (5,025 | ) | 1,135 | (1,945 | ) | (2,141 | ) | 196 | |||||||||
| Debt extinguishment costs (interest): | |||||||||||||||||||
| Prepayment premiums/penalties | - | (35 | ) | 35 | - | - | - | ||||||||||||
| Write-off of unamortized deferred financing costs | (929 | ) | (1,435 | ) | 506 | (2 | ) | (780 | ) | 778 | |||||||||
| Write-off of unamortized premiums/(discounts)/(OCI) | - | (758 | ) | 758 | - | 47 | (47 | ) | |||||||||||
| EQR 25% share of unconsolidated defeasance costs | |||||||||||||||||||
| ((loss) from investments in unconsolidated entities) | - | (1,775 | ) | 1,775 | - | (1,775 | ) | 1,775 | |||||||||||
| Net incremental gain on sales of condominium units | 631 | 335 | 296 | 243 | 399 | (156 | ) | ||||||||||||
| Other | (520 | ) | (1,668 | ) | 1,148 | (112 | ) | (814 | ) | 702 | |||||||||
| Net non-comparable items (3) | $ (5,542 | ) | $ (14,657 | ) | $ 9,115 | $ (267 | ) | $ (11,259 | ) | $ 10,992 | |||||||||
| Note: See page 26 for definitions, footnotes and reconciliations of EPS to FFO. | |||||||||||||||||||
| Equity Residential | ||||||
| Earnings Guidance and Assumptions | ||||||
| The earnings guidance/projections provided below are based on current expectations and are forward-looking. | ||||||
|
2010 Earnings Guidance (per share diluted) |
||||||
| Q3 2010 | 2010 | |||||
| Expected FFO (1) (2) | $0.51 to $0.55 | $2.14 to $2.20 | ||||
|
2010 Same Store Assumptions |
||||||
| Physical occupancy | 95.0% | |||||
| Revenue change | (0.5%) to 0.0% | |||||
| Expense change | 1.0% to 2.0% | |||||
| NOI change | (2.0%) to (0.5%) | |||||
| (Note: 25 basis point change in NOI percentage = $0.01 per share change in EPS/FFO) | ||||||
|
2010 Transaction Assumptions |
||||||
| Consolidated rental acquisitions | $1.25 billion | |||||
| Consolidated rental dispositions | $850.0 million | |||||
| Capitalization rate spread | 150 basis points | |||||
|
2010 Debt Assumptions |
||||||
| Weighted average debt outstanding | $9.7 billion to $9.8 billion | |||||
|
Weighted average interest rate (reduced for capitalized interest and including prepayment penalties) |
4.92% | |||||
| Interest expense | $477.5 million to $482.5 million | |||||
| Note: | Debt guidance assumes no additional debt offerings beyond the $600.0 million unsecured offering that closed on 7/15/10 and no additional debt extinguishments, but does include approximately $7.8 million of interest expense for the requirement to expense the implied option value inherent in convertible debt. The terms of the Company's debt covenants do not include this charge as interest expense. | |||||
|
2010 Other Guidance Assumptions |
||||||
| General and administrative expense | $40.0 million to $41.0 million | |||||
| Interest and other income | $5.5 million to $6.5 million | |||||
| Other expenses (write-off of pursuit and property acquisition costs) | $10.0 million to $12.0 million | |||||
| Income and other tax expense | $1.0 million | |||||
| Net gain on sales of land parcels | No amounts budgeted | |||||
| Preferred share redemptions | No amounts budgeted | |||||
| Equity ATM share offerings | No additional amounts budgeted | |||||
| Weighted average Common Shares and Units - Diluted | 299.7 million | |||||
| Note: See page 26 for definitions, footnotes and reconciliations of EPS to FFO. | ||||||
| Equity Residential | ||||||||||||
| Additional Reconciliations | ||||||||||||
| (Amounts in thousands except per share data) | ||||||||||||
| (All per share data is diluted) | ||||||||||||
| 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 | ||||||||||||
| Expected | Expected | |||||||||||
| Expected Q2 2010 | Q3 2010 | 2010 | ||||||||||
| Amounts | Per Share | Per Share | Per Share | |||||||||
| Expected Earnings - Diluted (4) | $ 11,691 | $ 0.038 | $0.10 to $0.14 | $0.97 to $1.03 | ||||||||
| Add: Expected depreciation expense | 154,229 | 0.516 | 0.58 | 2.26 | ||||||||
| Less: Expected net gain on sales (4) | - | - | (0.17 | ) | (1.09 | ) | ||||||
| Expected FFO - Diluted (1) (2) | $ 165,920 | $ 0.554 | $0.51 to $0.55 | $2.14 to $2.20 | ||||||||
|
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 ("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. FFO available to Common Shares and Units is calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares in accordance with accounting principles generally accepted in the United States. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the "Noncontrolling Interests - Operating Partnership". Subject to certain restrictions, the Noncontrolling Interests - Operating Partnership may exchange their OP Units for EQR Common Shares on a one-for-one basis. | |
| (2) | The Company believes that FFO and FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures 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 and FFO available to Common Shares and Units can help compare the operating performance of a company's real estate between periods or as compared to different companies. FFO and FFO available to Common Shares and Units do not represent net income, net income available to Common Shares or net cash flows from operating activities in accordance with GAAP. Therefore, FFO and FFO available to Common Shares and Units should not be exclusively considered as alternatives to net income, net income available to Common Shares or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company's calculation of FFO and FFO available to Common Shares and Units 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 represents net income per share calculated in accordance with accounting principles generally accepted in the United States. Expected earnings is calculated on a basis consistent with actual earnings. Due to the uncertain timing and extent of property dispositions and the resulting gains/losses on sales, actual earnings could differ materially from expected earnings. | |
| Same Store NOI Reconciliation for Page 10 | ||||||||||||||
| The following tables present reconciliations of operating income per the consolidated statements of operations to NOI for the June YTD 2010 and Second Quarter 2010 Same Store Properties: | ||||||||||||||
| Six Months Ended June 30, | Quarter Ended June 30, | |||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||
| Operating income | $ 240,002 | $ 259,189 | $ 121,529 | $ 126,944 | ||||||||||
| Adjustments: | ||||||||||||||
| Non-same store operating results | (39,575 | ) | (4,073 | ) | (25,219 | ) | (3,116 | ) | ||||||
| Fee and asset management revenue | (5,468 | ) | (5,275 | ) | (3,046 | ) | (2,412 | ) | ||||||
| Fee and asset management expense | 3,660 | 3,985 | 1,646 | 1,982 | ||||||||||
| Depreciation | 326,965 | 284,952 | 174,794 | 143,296 | ||||||||||
| General and administrative | 20,811 | 20,595 | 10,090 | 10,201 | ||||||||||
| Impairment | - | 11,124 | - | 11,124 | ||||||||||
| Same store NOI | $ 546,395 | $ 570,497 | $ 279,794 | $ 288,019 | ||||||||||
CONTACT:
Equity Residential
Marty McKenna, 312/928-1901