Equity Residential EQR today reported results for the quarter and six months ended June 30, 2011. All per share results are reported on a fully-diluted basis.
“As we enter the final months of our primary leasing season, we are pleased that fundamentals remain strong across all of our markets and that same store net operating income (NOI) results for the full year should be at the high end of our original guidance range,” said David J. Neithercut, Equity Residential's President and CEO. “However, we expect Normalized Funds from Operations for the year to be slightly below our original guidance midpoint due to increased disposition activity as we take advantage of attractive pricing for non-core assets and are challenged to redeploy that capital in a highly competitive acquisition environment in our core markets.”
Second Quarter 2011
FFO (Funds from Operations), as defined by the National Association of Real Estate Investment Trusts (NAREIT), for the second quarter of 2011 was $0.58 per share compared to $0.58 per share in the second quarter of 2010.
For the second quarter of 2011, the company reported Normalized FFO of $0.60 per share compared to $0.58 per share in the same period of 2010. The difference is due primarily to:
- the positive impact of $0.06 per share from higher same store NOI and $0.04 per share from higher lease-up NOI;
- the negative impact of $0.06 per share from 2011 transaction activity and timing; and
- the negative impact of approximately $0.02 per share from other items including higher interest expense and the dilutive effect of stock options due to a higher than budgeted share price.
Normalized FFO begins with FFO and eliminates certain items that by their nature are not comparable from period to period or that tend to obscure the company's actual operating performance. A reconciliation and definition of Normalized FFO are provided on pages 6 and 26 of this release and the company has included guidance for Normalized FFO on page 25 of this release.
For the second quarter of 2011, the company reported earnings of $1.85 per share compared to $0.02 per share in the second quarter of 2010. The difference is due primarily to higher gains from property sales in 2011.
Six Months Ended June 30, 2011
FFO for the six months ended June 30, 2011 was $1.14 per share compared to $1.07 per share in the same period of 2010.
For the six months ended June 30, 2011, the company reported Normalized FFO of $1.16 per share compared to $1.09 per share in the same period of 2010.
For the six months ended June 30, 2011, the company reported earnings of $2.27 per share compared to $0.21 per share in the same period of 2010.
Same Store Results
On a same store second quarter to second quarter comparison, which includes 105,730 apartment units, revenues increased 4.9%, expenses increased 0.7% and NOI increased 7.4%.
On a same store six-month to six-month comparison, which includes 104,163 apartment units, revenues increased 4.5%, expenses decreased 0.3% and NOI increased 7.4%.
Acquisitions/Dispositions
During the second quarter of 2011, the company acquired five properties with a total of 1,548 apartment units for an aggregate purchase price of $410.2 million at a weighted average capitalization (cap) rate of 5.0%. The company also acquired, for potential development, a land parcel located across the street from its 425 Mass Avenue apartment property in Washington, D.C. for $12.9 million.
During the quarter, the company sold 26 properties, with a total of 8,536 apartment units for an aggregate sale price of $911.5 million at a weighted average cap rate of 6.3% generating an unlevered internal rate of return (IRR), inclusive of management costs, of 11.7%.
During the first six months of 2011, the company acquired seven properties with a total of 2,069 apartment units for an aggregate purchase price of $549.3 million at a weighted average cap rate of 5.2%; a commercial building adjacent to its Harbor Steps apartment property in downtown Seattle for a purchase price of $11.8 million, for potential redevelopment; and one land parcel for $12.9 million.
Also during the first six months of 2011, the company sold 38 properties with a total of 11,267 apartment units for an aggregate sale price of $1.17 billion at a weighted average cap rate of 6.4% generating an unlevered IRR, inclusive of management costs, of 11.5%.
Unsecured Revolving Credit Facility
On July 13, 2011, the company entered into a new $1.25 billion unsecured revolving credit agreement with a group of 23 financial institutions. The new facility matures in July 2014, subject to a one-year extension at the company's option. The interest rate on advances under the new facility will generally be LIBOR plus a spread (currently 1.15%) and the company pays an annual facility fee of 0.2%. Both the spread and the facility fee are dependent on the credit rating of the company's long-term debt. This facility replaced the company's existing facility which was scheduled to mature in February 2012.
Redemption of Notes
On July 18, 2011, the company called for redemption on August 18, 2011 its outstanding 3.85% Exchangeable Senior Notes due 2026. As of July 15, 2011, there was $482.5 million of notes outstanding. The redemption of these notes has been planned since the beginning of the year and the impact of this redemption was included in the company's 2011 Normalized FFO guidance. Details of the redemption can be found in the company's July 18, 2011 press release.
At-The-Market (ATM) Share Offering Program
The company has not issued any shares under this program since January 13, 2011 and currently has 10 million shares available for future issuance under this program. The company would use proceeds from share sales primarily to fund its investment activity, including development, and to fund debt repayment.
Third Quarter 2011 Guidance
The company has established a Normalized FFO guidance range of $0.59 to $0.63 per share for the third quarter of 2011. The difference between the company's second quarter 2011 Normalized FFO of $0.60 per share and the midpoint of the third quarter guidance range is primarily due to:
- the positive impact of $0.02 per share from higher same store and lease-up NOI;
- the positive impact of $0.01 per share from lower G&A expenses and other items; and
- the negative impact of $0.02 per share from 2011 transaction activity and timing.
Full Year 2011 Guidance
The company has revised its guidance for its full year 2011 same store operating performance, transactions and Normalized FFO results as well as other items listed on page 25 of this release. The changes to the full year same store, transactions and Normalized FFO guidance are listed below:
|
Previous |
Revised |
|||
| Same store: | ||||
| Physical occupancy | 95.0% | 95.2% | ||
| Revenue change | 4.0% to 5.0% | 4.8% to 5.1% | ||
| Expense change | 1.0% to 2.0% | 0.0% to 1.0% | ||
| NOI change | 5.0% to 7.5% | 7.0% to 8.0% | ||
| Acquisitions: | $1.0 billion | $1.15 billion | ||
| Dispositions: | $1.25 billion | $1.5 billion | ||
| Cap Rate Spread: | 125 basis points | 150 basis points | ||
| Normalized FFO per share: | $2.40 to $2.50 | $2.40 to $2.45 | ||
The difference between the midpoint of the previous Normalized FFO guidance range and the midpoint of the revised guidance range is due primarily to:
- the positive impact of $0.07 per share from higher NOI from same store and lease-up properties;
- the positive impact of $0.03 per share from lower interest expense due to development debt payoffs and the application of transaction proceeds to maturing debt;
- the negative impact of $0.10 per share from 2011 transaction activity and timing; and
- the negative impact of approximately $0.02 per share from other items including lower interest income and the dilutive effect of stock options due to a higher than budgeted share price.
Third Quarter 2011 Conference Call
Equity Residential expects to announce third quarter 2011 results on Wednesday, October 26, 2011 and host a conference call to discuss those results at 10:00 a.m. CT on Thursday, October 27, 2011.
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 421 properties located in 16 states and the District of Columbia, consisting of 120,760 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 28, 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 June 30, | Quarter Ended June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| REVENUES | ||||||||||||||||
| Rental income | $ | 974,096 | $ | 871,091 | $ | 496,111 | $ | 444,333 | ||||||||
| Fee and asset management | 3,754 | 5,468 | 1,948 | 3,046 | ||||||||||||
| Total revenues | 977,850 | 876,559 | 498,059 | 447,379 | ||||||||||||
| EXPENSES | ||||||||||||||||
| Property and maintenance | 211,418 | 202,801 | 103,092 | 100,045 | ||||||||||||
| Real estate taxes and insurance | 110,332 | 105,496 | 56,701 | 52,350 | ||||||||||||
| Property management | 43,148 | 40,756 | 20,767 | 20,264 | ||||||||||||
| Fee and asset management | 1,957 | 3,563 | 1,009 | 1,605 | ||||||||||||
| Depreciation | 321,181 | 302,964 | 159,087 | 162,697 | ||||||||||||
| General and administrative | 22,341 | 20,808 | 10,908 | 10,089 | ||||||||||||
| Total expenses | 710,377 | 676,388 | 351,564 | 347,050 | ||||||||||||
| Operating income | 267,473 | 200,171 | 146,495 | 100,329 | ||||||||||||
| Interest and other income | 1,292 | 4,845 | 281 | 2,625 | ||||||||||||
| Other expenses | (6,790 | ) | (6,026 | ) | (4,626 | ) | (1,643 | ) | ||||||||
| Interest: | ||||||||||||||||
| Expense incurred, net | (241,856 | ) | (227,489 | ) | (120,525 | ) | (113,723 | ) | ||||||||
| Amortization of deferred financing costs | (7,454 | ) | (5,295 | ) | (4,444 | ) | (2,300 | ) | ||||||||
| Income (loss) before income and other taxes, (loss) | ||||||||||||||||
| from investments in unconsolidated entities, net | ||||||||||||||||
| gain on sales of unconsolidated entities and land | ||||||||||||||||
| parcels and discontinued operations | 12,665 | (33,794 | ) | 17,181 | (14,712 | ) | ||||||||||
| Income and other tax (expense) benefit | (387 | ) | 7 | (203 | ) | 147 | ||||||||||
| (Loss) from investments in unconsolidated entities | - | (923 | ) | - | (459 | ) | ||||||||||
| Net gain on sales of unconsolidated entities | - | 5,557 | - | 5,079 | ||||||||||||
| Net gain on sales of land parcels | 4,217 | - | 4,217 | - | ||||||||||||
| Income (loss) from continuing operations | 16,495 | (29,153 | ) | 21,195 | (9,945 | ) | ||||||||||
| Discontinued operations, net | 698,324 | 97,098 | 560,558 | 20,034 | ||||||||||||
| Net income | 714,819 | 67,945 | 581,753 | 10,089 | ||||||||||||
| Net (income) loss attributable to Noncontrolling Interests: | ||||||||||||||||
| Operating Partnership | (31,533 | ) | (2,936 | ) | (25,758 | ) | (313 | ) | ||||||||
| Partially Owned Properties | (31 | ) | 435 | (71 | ) | 185 | ||||||||||
| Net income attributable to controlling interests | 683,255 | 65,444 | 555,924 | 9,961 | ||||||||||||
| Preferred distributions | (6,933 | ) | (7,238 | ) | (3,467 | ) | (3,618 | ) | ||||||||
| Net income available to Common Shares | $ | 676,322 | $ | 58,206 | $ | 552,457 | $ | 6,343 | ||||||||
| Earnings per share – basic: | ||||||||||||||||
| Income (loss) from continuing operations available to Common Shares | $ | 0.03 | $ | (0.12 | ) | $ | 0.06 | $ | (0.05 | ) | ||||||
| Net income available to Common Shares | $ | 2.30 | $ | 0.21 | $ | 1.88 | $ | 0.02 | ||||||||
| Weighted average Common Shares outstanding | 293,784 | 281,435 | 294,663 | 282,217 | ||||||||||||
| Earnings per share – diluted: | ||||||||||||||||
| Income (loss) from continuing operations available to Common Shares | $ | 0.03 | $ | (0.12 | ) | $ | 0.06 | $ | (0.05 | ) | ||||||
| Net income available to Common Shares | $ | 2.27 | $ | 0.21 | $ | 1.85 | $ | 0.02 | ||||||||
| Weighted average Common Shares outstanding | 311,380 | 281,435 | 312,199 | 282,217 | ||||||||||||
| Distributions declared per Common Share outstanding | $ | 0.6750 | $ | 0.6750 | $ | 0.3375 | $ | 0.3375 | ||||||||
| Equity Residential | ||||||||||||||||
| Consolidated Statements of Funds From Operations and Normalized Funds From Operations | ||||||||||||||||
| (Amounts in thousands except per share data) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Six Months Ended June 30, | Quarter Ended June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net income | $ | 714,819 | $ | 67,945 | $ | 581,753 | $ | 10,089 | ||||||||
| Adjustments: | ||||||||||||||||
|
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties |
(31 | ) | 435 | (71 | ) | 185 | ||||||||||
| Depreciation | 321,181 | 302,964 | 159,087 | 162,697 | ||||||||||||
| Depreciation – Non-real estate additions | (2,905 | ) | (3,257 | ) | (1,521 | ) | (1,620 | ) | ||||||||
| Depreciation – Partially Owned and Unconsolidated Properties | (1,505 | ) | 7 | (755 | ) | (4 | ) | |||||||||
| Net (gain) on sales of unconsolidated entities | - | (5,557 | ) | - | (5,079 | ) | ||||||||||
| Discontinued operations: | ||||||||||||||||
| Depreciation | 9,661 | 24,600 | 2,446 | 12,189 | ||||||||||||
| Net (gain) on sales of discontinued operations | (682,236 | ) | (60,253 | ) | (558,482 | ) | (217 | ) | ||||||||
| Net incremental gain on sales of condominium units | 1,115 | 631 | 720 | 243 | ||||||||||||
| Gain on sale of Equity Corporate Housing (ECH) | 1,024 | - | 1,024 | - | ||||||||||||
| FFO (1) (3) | 361,123 | 327,515 | 184,201 | 178,483 | ||||||||||||
| Adjustments (see page 24 for additional detail): | ||||||||||||||||
| Asset impairment and valuation allowances | - | - | - | - | ||||||||||||
| Property acquisition costs and write-off of pursuit costs (other expenses) | 6,790 | 6,026 | 4,626 | 1,643 | ||||||||||||
|
Debt extinguishment (gains) losses, including prepayment penalties, preferred share redemptions and non-cash convertible debt discounts |
8,573 | 4,819 | 6,510 | 1,947 | ||||||||||||
|
(Gains) losses on sales of non-operating assets, net of income and other tax expense (benefit) |
(5,529 | ) | (612 | ) | (5,153 | ) | (245 | ) | ||||||||
| Other miscellaneous non-comparable items | (2,100 | ) | (5,192 | ) | - | (3,192 | ) | |||||||||
| Normalized FFO (2) (3) | $ | 368,857 | $ | 332,556 | $ | 190,184 | $ | 178,636 | ||||||||
| FFO (1) (3) | $ | 361,123 | $ | 327,515 | $ | 184,201 | $ | 178,483 | ||||||||
| Preferred distributions | (6,933 | ) | (7,238 | ) | (3,467 | ) | (3,618 | ) | ||||||||
| FFO available to Common Shares and Units - basic (1) (3) (4) | $ | 354,190 | $ | 320,277 | $ | 180,734 | $ | 174,865 | ||||||||
| FFO available to Common Shares and Units - diluted (1) (3) (4) | $ | 354,190 | $ | 320,583 | $ | 180,734 | $ | 175,018 | ||||||||
| FFO per share and Unit - basic | $ | 1.15 | $ | 1.09 | $ | 0.59 | $ | 0.59 | ||||||||
| FFO per share and Unit - diluted | $ | 1.14 | $ | 1.07 | $ | 0.58 | $ | 0.58 | ||||||||
| Normalized FFO (2) (3) | $ | 368,857 | $ | 332,556 | $ | 190,184 | $ | 178,636 | ||||||||
| Preferred distributions | (6,933 | ) | (7,238 | ) | (3,467 | ) | (3,618 | ) | ||||||||
| Normalized FFO available to Common Shares and Units - basic (2) (3) (4) | $ | 361,924 | $ | 325,318 | $ | 186,717 | $ | 175,018 | ||||||||
| Normalized FFO available to Common Shares and Units - diluted (2) (3) (4) | $ | 361,924 | $ | 325,624 | $ | 186,717 | $ | 175,171 | ||||||||
| Normalized FFO per share and Unit - basic | $ | 1.18 | $ | 1.10 | $ | 0.61 | $ | 0.59 | ||||||||
| Normalized FFO per share and Unit - diluted | $ | 1.16 | $ | 1.09 | $ | 0.60 | $ | 0.58 | ||||||||
| Weighted average Common Shares and Units outstanding - basic | 307,106 | 295,177 | 307,954 | 295,897 | ||||||||||||
| Weighted average Common Shares and Units outstanding - diluted | 311,380 | 298,641 | 312,199 | 300,039 | ||||||||||||
| Note:See page 24 for additional detail regarding the adjustments from FFO to Normalized FFO. See page 26 for the definitions, the footnotes referenced above and the reconciliations of EPS to FFO and Normalized FFO. | ||||||||||||||||
| Equity Residential | |||||||||||
| Consolidated Balance Sheets | |||||||||||
| (Amounts in thousands except for share amounts) | |||||||||||
| (Unaudited) | |||||||||||
| June 30, | December 31, | ||||||||||
| 2011 | 2010 | ||||||||||
| ASSETS | |||||||||||
| Investment in real estate | |||||||||||
| Land | $ | 4,161,358 | $ | 4,110,275 | |||||||
| Depreciable property | 15,046,250 | 15,226,512 | |||||||||
| Projects under development | 115,085 | 130,337 | |||||||||
| Land held for development | 214,495 | 235,247 | |||||||||
| Investment in real estate | 19,537,188 | 19,702,371 | |||||||||
| Accumulated depreciation | (4,307,406 | ) | (4,337,357 | ) | |||||||
| Investment in real estate, net | 15,229,782 | 15,365,014 | |||||||||
| Cash and cash equivalents | 604,764 | 431,408 | |||||||||
| Investments in unconsolidated entities | 3,623 | 3,167 | |||||||||
| Deposits – restricted | 361,831 | 180,987 | |||||||||
| Escrow deposits – mortgage | 10,905 | 12,593 | |||||||||
| Deferred financing costs, net | 35,451 | 42,033 | |||||||||
| Other assets | 151,766 | 148,992 | |||||||||
| Total assets | $ | 16,398,122 | $ | 16,184,194 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities: | |||||||||||
| Mortgage notes payable | $ | 4,352,372 | $ | 4,762,896 | |||||||
| Notes, net | 5,096,250 | 5,185,180 | |||||||||
| Lines of credit | - | - | |||||||||
| Accounts payable and accrued expenses | 69,118 | 39,452 | |||||||||
| Accrued interest payable | 92,584 | 98,631 | |||||||||
| Other liabilities | 306,503 | 304,202 | |||||||||
| Security deposits | 60,779 | 60,812 | |||||||||
| Distributions payable | 106,566 | 140,905 | |||||||||
| Total liabilities | 10,084,172 | 10,592,078 | |||||||||
| Commitments and contingencies | |||||||||||
| Redeemable Noncontrolling Interests – Operating Partnership | 438,141 | 383,540 | |||||||||
| Equity: | |||||||||||
| Shareholders' equity: | |||||||||||
| Preferred Shares of beneficial interest, $0.01 par value; | |||||||||||
| 100,000,000 shares authorized; 1,600,000 shares | |||||||||||
| issued and outstanding as of June 30, 2011 and | |||||||||||
| December 31, 2010 | 200,000 | 200,000 | |||||||||
| Common Shares of beneficial interest, $0.01 par value; | |||||||||||
| 1,000,000,000 shares authorized; 296,280,085 | |||||||||||
| shares issued and outstanding as of June 30, | |||||||||||
| 2011 and 290,197,242 shares issued and | |||||||||||
| outstanding as of December 31, 2010 | 2,963 | 2,902 | |||||||||
| Paid in capital | 4,947,467 | 4,741,521 | |||||||||
| Retained earnings | 680,619 | 203,581 | |||||||||
| Accumulated other comprehensive (loss) | (80,553 | ) | (57,818 | ) | |||||||
| Total shareholders' equity | 5,750,496 | 5,090,186 | |||||||||
| Noncontrolling Interests: | |||||||||||
| Operating Partnership | 122,018 | 110,399 | |||||||||
| Partially Owned Properties | 3,295 | 7,991 | |||||||||
| Total Noncontrolling Interests | 125,313 | 118,390 | |||||||||
| Total equity | 5,875,809 | 5,208,576 | |||||||||
| Total liabilities and equity | $ | 16,398,122 | $ | 16,184,194 | |||||||
| Equity Residential | |||||||||||||||
| Portfolio Summary | |||||||||||||||
| As of June 30, 2011 | |||||||||||||||
| % of Total | % of | Average | |||||||||||||
| Apartment | Apartment | Stabilized | Rental | ||||||||||||
| Markets | Properties | Units | Units | NOI | Rate (1) | ||||||||||
| 1 | New York Metro Area | 28 | 8,290 | 6.9 | % | 13.2 | % | $ | 2,913 | ||||||
| 2 | DC Northern Virginia | 27 | 9,813 | 8.1 | % | 12.2 | % | 2,008 | |||||||
| 3 | South Florida | 38 | 12,742 | 10.5 | % | 9.3 | % | 1,376 | |||||||
| 4 | Los Angeles | 41 | 8,762 | 7.3 | % | 8.9 | % | 1,750 | |||||||
| 5 | Boston | 28 | 5,823 | 4.8 | % | 7.6 | % | 2,294 | |||||||
| 6 | Seattle/Tacoma | 43 | 9,582 | 7.9 | % | 7.2 | % | 1,393 | |||||||
| 7 | San Francisco Bay Area | 33 | 6,194 | 5.1 | % | 5.9 | % | 1,768 | |||||||
| 8 | San Diego | 14 | 4,963 | 4.1 | % | 5.4 | % | 1,815 | |||||||
| 9 | Denver | 23 | 7,967 | 6.6 | % | 4.9 | % | 1,091 | |||||||
| 10 | Phoenix | 32 | 9,265 | 7.7 | % | 4.4 | % | 901 | |||||||
| 11 | Orlando | 25 | 7,676 | 6.4 | % | 4.2 | % | 1,002 | |||||||
| 12 | Suburban Maryland | 15 | 4,462 | 3.7 | % | 3.9 | % | 1,470 | |||||||
| 13 | Orange County, CA | 11 | 3,490 | 2.9 | % | 3.3 | % | 1,546 | |||||||
| 14 | Inland Empire, CA | 10 | 3,081 | 2.5 | % | 2.5 | % | 1,407 | |||||||
| 15 | Atlanta | 16 | 4,800 | 4.0 | % | 2.5 | % | 1,016 | |||||||
| 16 | All Other Markets (2) | 35 | 9,000 | 7.5 | % | 4.6 | % | 1,035 | |||||||
| Total | 419 | 115,910 | 96.0 | % | 100.0 | % | 1,543 | ||||||||
| Military Housing | 2 | 4,850 | 4.0 | % | - | - | |||||||||
| Grand Total | 421 | 120,760 | 100.0 | % | 100.0 | % | $ | 1,543 | |||||||
| (1) Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the month of June 2011. | |
| (2) All Other Markets - Each individual market is less than 2.0% of stabilized NOI. | |
| Note: | Projects under development are not included in the Portfolio Summary until construction has been completed, at which time they are included at their projected stabilized NOI. |
| Equity Residential | |||||||||||||||||
| Portfolio as of June 30, 2011 | |||||||||||||||||
| Apartment | |||||||||||||||||
| Properties | Units | ||||||||||||||||
| Wholly Owned Properties | 397 | 111,539 | |||||||||||||||
| Partially Owned Properties - Consolidated | 22 | 4,371 | |||||||||||||||
| Military Housing | 2 | 4,850 | |||||||||||||||
| 421 | 120,760 | ||||||||||||||||
| Portfolio Rollforward Q2 2011 | |||||||||||||||||
| ($ in thousands) | |||||||||||||||||
| Apartment | Purchase/ | ||||||||||||||||
| Properties | Units | (Sale) Price | Cap Rate | ||||||||||||||
| 3/31/2011 | 442 | 127,711 | |||||||||||||||
| Acquisitions: | |||||||||||||||||
| Rental Properties - Consolidated | 5 | 1,548 | $ | 410,235 | 5.0 | % | |||||||||||
| Land Parcel (one) | - | - | $ | 12,850 | |||||||||||||
| Dispositions: | |||||||||||||||||
| Rental Properties - Consolidated | (26 | ) | (8,536 | ) | $ | (911,543 | ) | 6.3 | % | ||||||||
| Land Parcel (one) (1) | - | - | $ | (22,786 | ) | ||||||||||||
| Configuration Changes | - | 37 | |||||||||||||||
| 6/30/2011 | 421 | 120,760 | |||||||||||||||
| Portfolio Rollforward 2011 | |||||||||||||||||
| Apartment | Purchase/ | ||||||||||||||||
| Properties | Units | (Sale) Price | Cap Rate | ||||||||||||||
| 12/31/2010 | 451 | 129,604 | |||||||||||||||
| Acquisitions: | |||||||||||||||||
| Rental Properties - Consolidated | 7 | 2,069 | $ | 549,253 | 5.2 | % | |||||||||||
| Land Parcel (one) | - | - | $ | 12,850 | |||||||||||||
| Other (2) | - | - | $ | 11,750 | |||||||||||||
| Dispositions: | |||||||||||||||||
| Rental Properties - Consolidated | (38 | ) | (11,267 | ) | $ | (1,173,314 | ) | 6.4 | % | ||||||||
| Land Parcel (one) (1) | - | - | $ | (22,786 | ) | ||||||||||||
| Completed Developments | 1 | 250 | |||||||||||||||
| Configuration Changes | - | 104 | |||||||||||||||
| 6/30/2011 | 421 | 120,760 | |||||||||||||||
| (1) | Represents the sale of a land parcel, on which the Company no longer planned to develop, in suburban Washington, D.C. | |
| (2) | Represents the acquisition of a 97,000 square foot commercial building adjacent to our Harbor Steps apartment property in downtown Seattle for potential redevelopment. | |
| Equity Residential | |||||||||||||||||||||||
| Second Quarter 2011 vs. Second Quarter 2010 | |||||||||||||||||||||||
| Same Store Results/Statistics | |||||||||||||||||||||||
| $ in thousands (except for Average Rental Rate) - 105,730 Same Store Apartment Units | |||||||||||||||||||||||
| Results | Statistics | ||||||||||||||||||||||
| Average | |||||||||||||||||||||||
| Rental | |||||||||||||||||||||||
| Description | Revenues | Expenses | NOI (1) | Rate (2) | Occupancy | Turnover | |||||||||||||||||
| Q2 2011 | $ | 450,422 | $ | 163,030 | $ | 287,392 | $ | 1,490 | 95.5 | % | 15.0 | % | |||||||||||
| Q2 2010 | $ | 429,512 | $ | 161,831 | $ | 267,681 | $ | 1,426 | 95.1 | % | 14.3 | % | |||||||||||
| Change | $ | 20,910 | $ | 1,199 | $ | 19,711 | $ | 64 | 0.4 | % | 0.7 | % | |||||||||||
| Change | 4.9 | % | 0.7 | % | 7.4 | % | 4.5 | % | |||||||||||||||
| Second Quarter 2011 vs. First Quarter 2011 | |||||||||||||||||||||||
| Same Store Results/Statistics | |||||||||||||||||||||||
| $ in thousands (except for Average Rental Rate) - 110,208 Same Store Apartment Units | |||||||||||||||||||||||
| Results | Statistics | ||||||||||||||||||||||
| Average | |||||||||||||||||||||||
| Rental | |||||||||||||||||||||||
| Description | Revenues | Expenses | NOI (1) | Rate (2) | Occupancy | Turnover | |||||||||||||||||
| Q2 2011 | $ | 473,642 | $ | 171,178 | $ | 302,464 | $ | 1,503 | 95.5 | % | 15.0 | % | |||||||||||
| Q1 2011 | $ | 462,723 | $ | 175,220 | $ | 287,503 | $ | 1,476 | 95.0 | % | 11.5 | % | |||||||||||
| Change | $ | 10,919 | $ | (4,042 | ) | $ | 14,961 | $ | 27 | 0.5 | % | 3.5 | % | ||||||||||
| Change | 2.4 | % | (2.3 | %) | 5.2 | % | 1.8 | % | |||||||||||||||
| June YTD 2011 vs. June YTD 2010 | |||||||||||||||||||||||
| Same Store Results/Statistics | |||||||||||||||||||||||
| $ in thousands (except for Average Rental Rate) - 104,163 Same Store Apartment Units | |||||||||||||||||||||||
| Results | Statistics | ||||||||||||||||||||||
| Average | |||||||||||||||||||||||
| Rental | |||||||||||||||||||||||
| Description | Revenues | Expenses | NOI (1) | Rate (2) | Occupancy | Turnover | |||||||||||||||||
| YTD 2011 | $ | 858,888 | $ | 315,172 | $ | 543,716 | $ | 1,445 | 95.2 | % | 26.7 | % | |||||||||||
| YTD 2010 | $ | 822,276 | $ | 316,040 | $ | 506,236 | $ | 1,389 | 94.8 | % | 26.2 | % | |||||||||||
| Change | $ | 36,612 | $ | (868 | ) | $ | 37,480 | $ | 56 | 0.4 | % | 0.5 | % | ||||||||||
| Change | 4.5 | % | (0.3 | %) | 7.4 | % | 4.0 | % | |||||||||||||||
| (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 its operating performance because it is a direct measure of the actual operating results of the Company's apartment communities. See page 26 for reconciliations from operating income. | |
| (2) | Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period. | |
| Equity Residential | ||||||||||||||||||||||||||||
| Second Quarter 2011 vs. Second Quarter 2010 | ||||||||||||||||||||||||||||
| Same Store Results/Statistics by Market | ||||||||||||||||||||||||||||
| Increase (Decrease) from Prior Year's Quarter | ||||||||||||||||||||||||||||
| Q2 2011 | Q2 2011 | Q2 2011 | ||||||||||||||||||||||||||
| % of | Average | Weighted | Average | |||||||||||||||||||||||||
| Apartment | Actual | Rental | Average | Rental | ||||||||||||||||||||||||
| Markets | Units | NOI | Rate (1) | Occupancy % | Revenues | Expenses | NOI | Rate (1) | Occupancy | |||||||||||||||||||
| 1 | New York Metro Area | 6,797 | 12.1 | % | $ | 2,980 | 96.6 | % | 5.7 | % | 4.9 | % | 6.2 | % | 5.5 | % | 0.3 | % | ||||||||||
| 2 | DC Northern Virginia | 7,899 | 10.5 | % | 1,899 | 96.2 | % | 6.4 | % | 1.8 | % | 8.5 | % | 6.5 | % | (0.1 | %) | |||||||||||
| 3 | South Florida | 12,113 | 9.9 | % | 1,346 | 94.6 | % | 4.9 | % | 2.0 | % | 6.9 | % | 5.2 | % | (0.2 | %) | |||||||||||
| 4 | Los Angeles | 7,463 | 8.4 | % | 1,720 | 94.7 | % | 2.8 | % | (1.4 | %) | 5.0 | % | 2.1 | % | 0.7 | % | |||||||||||
| 5 | Boston | 5,347 | 7.9 | % | 2,241 | 96.3 | % | 5.0 | % | (2.1 | %) | 9.2 | % | 3.5 | % | 1.3 | % | |||||||||||
| 6 | Seattle/Tacoma | 8,129 | 7.1 | % | 1,395 | 94.9 | % | 5.9 | % | (0.2 | %) | 9.8 | % | 4.9 | % | 0.8 | % | |||||||||||
| 7 | San Francisco Bay Area | 5,512 | 6.4 | % | 1,748 | 96.0 | % | 6.0 | % | 1.0 | % | 8.8 | % | 5.3 | % | 0.7 | % | |||||||||||
| 8 | Denver | 7,759 | 5.6 | % | 1,084 | 95.4 | % | 6.9 | % | 5.0 | % | 7.9 | % | 6.8 | % | 0.0 | % | |||||||||||
| 9 | Phoenix | 9,265 | 5.1 | % | 896 | 95.3 | % | 5.6 | % | (3.8 | %) | 12.4 | % | 4.8 | % | 0.7 | % | |||||||||||
| 10 | San Diego | 4,284 | 4.8 | % | 1,687 | 95.3 | % | 2.2 | % | (1.5 | %) | 4.0 | % | 1.6 | % | 0.5 | % | |||||||||||
| 11 | Orlando | 7,676 | 4.6 | % | 1,003 | 95.1 | % | 3.9 | % | 1.8 | % | 5.4 | % | 3.2 | % | 0.7 | % | |||||||||||
| 12 | Suburban Maryland | 4,005 | 3.7 | % | 1,387 | 95.4 | % | 3.5 | % | (2.8 | %) | 7.0 | % | 4.0 | % | (0.5 | %) | |||||||||||
| 13 | Orange County, CA | 3,307 | 3.5 | % | 1,530 | 95.6 | % | 2.5 | % | (3.6 | %) | 5.5 | % | 1.8 | % | 0.7 | % | |||||||||||
| 14 | Inland Empire, CA | 3,081 | 2.9 | % | 1,415 | 95.2 | % | 3.0 | % | (5.5 | %) | 7.6 | % | 3.7 | % | (0.6 | %) | |||||||||||
| 15 | Atlanta | 4,596 | 2.6 | % | 1,021 | 96.2 | % | 4.4 | % | 1.7 | % | 6.6 | % | 4.1 | % | 0.3 | % | |||||||||||
| 16 | All Other Markets | 8,497 | 4.9 | % | 1,017 | 95.6 | % | 4.7 | % | 2.6 | % | 6.3 | % | 4.2 | % | 0.5 | % | |||||||||||
| Total | 105,730 | 100.0 | % | $ | 1,490 | 95.5 | % | 4.9 | % | 0.7 | % | 7.4 | % | 4.5 | % | 0.4 | % | |||||||||||
| (1) | Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period. | |
| Equity Residential | ||||||||||||||||||||||||||||
| Second Quarter 2011 vs. First Quarter 2011 | ||||||||||||||||||||||||||||
| Same Store Results/Statistics by Market | ||||||||||||||||||||||||||||
| Increase (Decrease) from Prior Quarter | ||||||||||||||||||||||||||||
| Q2 2011 | Q2 2011 | Q2 2011 | ||||||||||||||||||||||||||
| % of | Average | Weighted | Average | |||||||||||||||||||||||||
| Apartment | Actual | Rental | Average | Rental | ||||||||||||||||||||||||
| Markets | Units | NOI | Rate (1) | Occupancy % | Revenues | Expenses | NOI | Rate (1) | Occupancy | |||||||||||||||||||
| 1 | New York Metro Area | 7,767 | 13.1 | % | $ | 2,931 | 96.7 | % | 3.3 | % | (6.1 | %) | 10.6 | % | 1.7 | % | 1.5 | % | ||||||||||
| 2 | DC Northern Virginia | 8,406 | 10.8 | % | 1,927 | 96.1 | % | 3.6 | % | (5.0 | %) | 7.7 | % | 2.6 | % | 0.9 | % | |||||||||||
| 3 | South Florida | 12,113 | 9.4 | % | 1,346 | 94.6 | % | 1.7 | % | (0.1 | %) | 2.9 | % | 1.8 | % | (0.1 | %) | |||||||||||
| 4 | Los Angeles | 7,831 | 8.4 | % | 1,723 | 94.7 | % | 1.4 | % | 0.7 | % | 1.8 | % | 1.4 | % | 0.0 | % | |||||||||||
| 5 | Boston | 5,527 | 7.8 | % | 2,279 | 96.2 | % | 2.3 | % | (7.5 | %) | 8.3 | % | 1.1 | % | 1.1 | % | |||||||||||
| 6 | Seattle/Tacoma | 9,081 | 7.3 | % | 1,363 | 94.8 | % | 3.4 | % | (2.2 | %) | 7.0 | % | 2.3 | % | 1.1 | % | |||||||||||
| 7 | San Francisco Bay Area | 6,194 | 6.8 | % | 1,754 | 95.9 | % | 2.5 | % | (4.0 | %) | 6.2 | % | 2.0 | % | 0.4 | % | |||||||||||
| 8 | Denver | 7,967 | 5.4 | % | 1,077 | 95.4 | % | 3.1 | % | 6.8 | % | 1.4 | % | 2.7 | % | 0.4 | % | |||||||||||
| 9 | Phoenix | 9,265 | 4.9 | % | 896 | 95.3 | % | 1.6 | % | (1.7 | %) | 3.8 | % | 1.7 | % | (0.1 | %) | |||||||||||
| 10 | San Diego | 4,284 | 4.6 | % | 1,687 | 95.3 | % | 1.3 | % | (1.5 | %) | 2.8 | % | 0.7 | % | 0.6 | % | |||||||||||
| 11 | Orlando | 7,676 | 4.4 | % | 1,003 | 95.1 | % | 1.0 | % | 0.6 | % | 1.3 | % | 0.9 | % | 0.1 | % | |||||||||||
| 12 | Suburban Maryland | 4,005 | 3.5 | % | 1,387 | 95.4 | % | 2.7 | % | (3.6 | %) | 6.2 | % | 1.6 | % | 1.0 | % | |||||||||||
| 13 | Orange County, CA | 3,490 | 3.5 | % | 1,541 | 95.5 | % | 0.9 | % | (0.1 | %) | 1.4 | % | 0.7 | % | 0.2 | % | |||||||||||
| 14 | Inland Empire, CA | 3,081 | 2.8 | % | 1,415 | 95.2 | % | 1.1 | % | (2.3 | %) | 2.8 | % | 0.8 | % | 0.2 | % | |||||||||||
| 15 | Atlanta | 4,800 | 2.6 | % | 1,015 | 96.2 | % | 2.4 | % | 4.1 | % | 1.0 | % | 1.8 | % | 0.5 | % | |||||||||||
| 16 | All Other Markets | 8,721 | 4.7 | % | 1,012 | 95.7 | % | 2.1 | % | (1.6 | %) | 5.2 | % | 1.5 | % | 0.5 | % | |||||||||||
| Total | 110,208 | 100.0 | % | $ | 1,503 | 95.5 | % | 2.4 | % | (2.3 | %) | 5.2 | % | 1.8 | % | 0.5 | % | |||||||||||
| (1) | Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period. | |
| Equity Residential | ||||||||||||||||||||||||||||
| June YTD 2011 vs. June YTD 2010 | ||||||||||||||||||||||||||||
| Same Store Results/Statistics by Market | ||||||||||||||||||||||||||||
| Increase (Decrease) from Prior Year | ||||||||||||||||||||||||||||
| June YTD 11 | June YTD 11 | June YTD 11 | ||||||||||||||||||||||||||
| % of | Average | Weighted | Average | |||||||||||||||||||||||||
| Apartment | Actual | Rental | Average | Rental | ||||||||||||||||||||||||
| Markets | Units | NOI | Rate (1) | Occupancy % | Revenues | Expenses | NOI | Rate (1) | Occupancy | |||||||||||||||||||
| 1 | DC Northern Virginia | 7,679 | 10.3 | % | $ | 1,846 | 95.7 | % | 6.5 | % | (0.6 | %) | 10.1 | % | 6.3 | % | 0.1 | % | ||||||||||
| 2 | South Florida | 12,113 | 10.3 | % | 1,334 | 94.7 | % | 4.4 | % | 0.4 | % | 7.1 | % | 4.6 | % | (0.1 | %) | |||||||||||
| 3 | New York Metro Area | 5,887 | 9.9 | % | 2,701 | 96.0 | % | 5.5 | % | 4.1 | % | 6.5 | % | 5.2 | % | 0.2 | % | |||||||||||
| 4 | Los Angeles | 7,463 | 8.8 | % | 1,709 | 94.7 | % | 2.1 | % | (3.1 | %) | 5.0 | % | 1.7 | % | 0.4 | % | |||||||||||
| 5 | Boston | 5,347 | 8.0 | % | 2,230 | 95.8 | % | 5.0 | % | (0.6 | %) | 8.5 | % | 3.6 | % | 1.2 | % | |||||||||||
| 6 | Seattle/Tacoma | 7,873 | 6.9 | % | 1,369 | 94.3 | % | 5.4 | % | (0.5 | %) | 9.4 | % | 4.4 | % | 0.8 | % | |||||||||||
| 7 | San Francisco Bay Area | 5,512 | 6.6 | % | 1,733 | 95.8 | % | 5.1 | % | (0.2 | %) | 8.2 | % | 4.4 | % | 0.6 | % | |||||||||||
| 8 | Denver | 7,759 | 5.8 | % | 1,069 | 95.2 | % | 6.0 | % | 2.1 | % | 8.1 | % | 6.0 | % | (0.1 | %) | |||||||||||
| 9 | Phoenix | 9,265 | 5.3 | % | 889 | 95.4 | % | 5.1 | % | (3.8 | %) | 11.6 | % | 4.0 | % | 1.0 | % | |||||||||||
| 10 | Orlando | 7,676 | 4.9 | % | 998 | 95.0 | % | 3.6 | % | 0.7 | % | 5.7 | % | 2.9 | % | 0.7 | % | |||||||||||
| 11 | San Diego | 4,103 | 4.8 | % | 1,671 | 95.0 | % | 1.5 | % | 0.1 | % | 2.2 | % | 1.5 | % | 0.1 | % | |||||||||||
| 12 | Suburban Maryland | 4,005 | 3.8 | % | 1,375 | 94.9 | % | 3.9 | % | (5.7 | %) | 9.8 | % | 3.9 | % | 0.0 | % | |||||||||||
| 13 | Orange County, CA | 3,307 | 3.6 | % | 1,526 | 95.4 | % | 2.3 | % | (1.7 | %) | 4.2 | % | 1.8 | % | 0.6 | % | |||||||||||
| 14 | Inland Empire, CA | 3,081 | 3.1 | % | 1,409 | 95.0 | % | 3.1 | % | (4.1 | %) | 7.1 | % | 3.4 | % | (0.2 | %) | |||||||||||
| 15 | Atlanta | 4,596 | 2.8 | % | 1,013 | 95.9 | % | 3.0 | % | (0.9 | %) | 6.2 | % | 3.0 | % | 0.0 | % | |||||||||||
| 16 | All Other Markets | 8,497 | 5.1 | % | 1,009 | 95.3 | % | 4.3 | % | 1.3 | % | 6.8 | % | 3.7 | % | 0.6 | % | |||||||||||
| Total | 104,163 | 100.0 | % | $ | 1,445 | 95.2 | % | 4.5 | % | (0.3 | %) | 7.4 | % | 4.0 | % | 0.4 | % | |||||||||||
| (1) | Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period. | |
| Equity Residential | |||||||||||||||||
| Second Quarter 2011 vs. Second Quarter 2010 | |||||||||||||||||
| Same Store Operating Expenses | |||||||||||||||||
| $ in thousands - 105,730 Same Store Apartment Units | |||||||||||||||||
| % of Actual | |||||||||||||||||
| Q2 2011 | |||||||||||||||||
| Actual | Actual | $ | % | Operating | |||||||||||||
| Q2 2011 | Q2 2010 | Change | Change | Expenses | |||||||||||||
| Real estate taxes | $ | 46,715 | $ | 45,889 | $ | 826 | 1.8 | % | 28.6 | % | |||||||
| On-site payroll (1) | 37,883 | 39,232 | (1,349 | ) | (3.4 | %) | 23.2 | % | |||||||||
| Utilities (2) | 24,070 | 23,325 | 745 | 3.2 | % | 14.8 | % | ||||||||||
| Repairs and maintenance (3) | 23,811 | 22,589 | 1,222 | 5.4 | % | 14.6 | % | ||||||||||
| Property management costs (4) | 18,197 | 17,180 | 1,017 | 5.9 | % | 11.2 | % | ||||||||||
| Insurance | 5,049 | 5,365 | (316 | ) | (5.9 | %) | 3.1 | % | |||||||||
| Leasing and advertising | 2,894 | 3,564 | (670 | ) | (18.8 | %) | 1.8 | % | |||||||||
| Other on-site operating expenses (5) | 4,411 | 4,687 | (276 | ) | (5.9 | %) | 2.7 | % | |||||||||
| Same store operating expenses | $ | 163,030 | $ | 161,831 | $ | 1,199 | 0.7 | % | 100.0 | % | |||||||
| June YTD 2011 vs. June YTD 2010 | |||||||||||||||||
| Same Store Operating Expenses | |||||||||||||||||
| $ in thousands - 104,163 Same Store Apartment Units | |||||||||||||||||
| % of Actual | |||||||||||||||||
| YTD 2011 | |||||||||||||||||
| Actual | Actual | $ | % | Operating | |||||||||||||
| YTD 2011 | YTD 2010 | Change | Change | Expenses | |||||||||||||
| Real estate taxes | $ | 85,461 | $ | 84,735 | $ | 726 | 0.9 | % | 27.1 | % | |||||||
| On-site payroll (1) | 73,921 | 76,078 | (2,157 | ) | (2.8 | %) | 23.5 | % | |||||||||
| Utilities (2) | 50,214 | 49,004 | 1,210 | 2.5 | % | 15.9 | % | ||||||||||
| Repairs and maintenance (3) | 45,406 | 45,700 | (294 | ) | (0.6 | %) | 14.4 | % | |||||||||
| 34,699 | 32,891 | 1,808 | 5.5 | % | 11.0 | % | |||||||||||
| Insurance | 9,944 | 10,556 | (612 | ) | (5.8 | %) | 3.2 | % | |||||||||
| Leasing and advertising | 5,877 | 7,050 | (1,173 | ) | (16.6 | %) | 1.9 | % | |||||||||
| Other on-site operating expenses (5) | 9,650 | 10,026 | (376 | ) | (3.8 | %) | 3.0 | % | |||||||||
| Same store operating expenses | $ | 315,172 | $ | 316,040 | $ | (868 | ) | (0.3 | %) | 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, apartment 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 on-site 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, 2011 | |||||||||||||
| (Amounts in thousands) | |||||||||||||
| Weighted | |||||||||||||
| Weighted | Average | ||||||||||||
| Average | Maturities | ||||||||||||
| Amounts (1) | % of Total | Rates (1) | (years) | ||||||||||
| Secured | $ | 4,352,372 | 46.1 | % | 4.81 | % | 8.3 | ||||||
| Unsecured | 5,096,250 | 53.9 | % | 5.17 | % | 4.2 | |||||||
| Total | $ | 9,448,622 | 100.0 | % | 5.00 | % | 6.0 | ||||||
| Fixed Rate Debt: | |||||||||||||
| Secured - Conventional | $ | 3,590,353 | 38.0 | % | 5.59 | % | 7.3 | ||||||
| Unsecured - Public/Private | 4,287,431 | 45.4 | % | 5.83 | % | 4.7 | |||||||
| Fixed Rate Debt | 7,877,784 | 83.4 | % | 5.72 | % | 5.9 | |||||||
| Floating Rate Debt: | |||||||||||||
| Secured - Conventional | 264,612 | 2.8 | % | 3.05 | % | 0.9 | |||||||
| Secured - Tax Exempt | 497,407 | 5.3 | % | 0.29 | % | 19.7 | |||||||
| Unsecured - Public/Private | 808,819 | 8.5 | % | 1.67 | % | 1.5 | |||||||
| Unsecured - Revolving Credit Facility (2) | - | - | - | 0.7 | |||||||||
| Floating Rate Debt | 1,570,838 | 16.6 | % | 1.38 | % | 6.8 | |||||||
| Total | $ | 9,448,622 | 100.0 | % | 5.00 | % | 6.0 | ||||||
| (1) | Net of the effect of any derivative instruments. Weighted average rates are for the six months ended June 30, 2011. | |
| (2) |
On July 13, 2011, the Company replaced its then existing unsecured revolving credit facility with a new $1.25 billion unsecured revolving credit facility maturing on July 13, 2014, subject to a one-year extension option exercisable by the Company. The interest rate on advances under the new credit facility will generally be LIBOR plus a spread (currently 1.15%) and the Company pays an annual facility fee of 0.2%. Both the spread and the facility fee are dependent on the credit rating of the Company's long-term debt. |
|
| Note: The Company capitalized interest of approximately $3.7 million and $7.9 million during the six months ended June 30, 2011 and 2010, respectively. The Company capitalized interest of approximately $2.0 million and $3.5 million during the quarters ended June 30, 2011 and 2010, respectively. |
| Debt Maturity Schedule as of June 30, 2011 | ||||||||||||||||||
| (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) | ||||||||||||
| 2011 | $ | 492,335 | (2) | $ | 50,914 | $ | 543,249 | 5.8 | % | 3.91 | % | 3.89 | % | |||||
| 2012 | 640,027 | 685,360 | (3) | 1,325,387 | 14.0 | % | 6.06 | % | 3.52 | % | ||||||||
| 2013 | 272,761 | 309,357 | 582,118 | 6.2 | % | 6.71 | % | 4.88 | % | |||||||||
| 2014 | 566,288 | 21,959 | 588,247 | 6.2 | % | 5.32 | % | 5.24 | % | |||||||||
| 2015 | 418,764 | - | 418,764 | 4.4 | % | 6.31 | % | 6.31 | % | |||||||||
| 2016 | 1,192,934 | - | 1,192,934 | 12.6 | % | 5.35 | % | 5.35 | % | |||||||||
| 2017 | 1,355,833 | 456 | 1,356,289 | 14.4 | % | 5.87 | % | 5.87 | % | |||||||||
| 2018 | 80,768 | 44,677 | 125,445 | 1.3 | % | 5.72 | % | 4.23 | % | |||||||||
| 2019 | 801,760 | 20,766 | 822,526 | 8.7 | % | 5.49 | % | 5.36 | % | |||||||||
| 2020 | 1,671,836 | 809 | 1,672,645 | 17.7 | % | 5.50 | % | 5.50 | % | |||||||||
| 2021+ | 384,478 | 436,540 | 821,018 | 8.7 | % | 5.99 | % | 3.23 | % | |||||||||
| Total | $ | 7,877,784 | $ | 1,570,838 | $ | 9,448,622 | 100.0 | % | 5.58 | % | 4.92 | % | ||||||
| (1) | Net of the effect of any derivative instruments. Weighted average rates are as of June 30, 2011. | |
| (2) | Includes $482.5 million face value of 3.85% convertible unsecured debt with a final maturity of 2026. On July 18, 2011, the notes were called for redemption and are subject to exchange prior to the redemption date of August 18, 2011. | |
| (3) | Effective April 5, 2011, the Company exercised the second of its two one-year extension options for its $500.0 million term loan facility and as a result, the maturity date is now October 5, 2012. | |
| Equity Residential | |||||||||||||||||||
| Unsecured Debt Summary as of June 30, 2011 | |||||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||||
| Unamortized | |||||||||||||||||||
| Coupon | Due | Face | Premium/ | Net | |||||||||||||||
| Rate | Date | Amount | (Discount) | Balance | |||||||||||||||
| Fixed Rate Notes: | |||||||||||||||||||
| 6.625 | % | 03/15/12 | $ | 253,858 | $ | (137 | ) | $ | 253,721 | ||||||||||
| 5.500 | % | 10/01/12 | 222,133 | (274 | ) | 221,859 | |||||||||||||
| 5.200 | % | 04/01/13 | (1) | 400,000 | (207 | ) | 399,793 | ||||||||||||
| Fair Value Derivative Adjustments | (1) | (300,000 | ) | - | (300,000 | ) | |||||||||||||
| 5.250 | % | 09/15/14 | 500,000 | (197 | ) | 499,803 | |||||||||||||
| 6.584 | % | 04/13/15 | 300,000 | (414 | ) | 299,586 | |||||||||||||
| 5.125 | % | 03/15/16 | 500,000 | (251 | ) | 499,749 | |||||||||||||
| 5.375 | % | 08/01/16 | 400,000 | (943 | ) | 399,057 | |||||||||||||
| 5.750 | % | 06/15/17 | 650,000 | (3,052 | ) | 646,948 | |||||||||||||
| 7.125 | % | 10/15/17 | 150,000 | (408 | ) | 149,592 | |||||||||||||
| 4.750 | % | 07/15/20 | 600,000 | (4,120 | ) | 595,880 | |||||||||||||
| 7.570 | % | 08/15/26 | 140,000 | - | 140,000 | ||||||||||||||
| 3.850 | % | 08/15/26 | (2) | 482,545 | (1,102 | ) | 481,443 | ||||||||||||
| 4,298,536 | (11,105 | ) | 4,287,431 | ||||||||||||||||
| Floating Rate Notes: | |||||||||||||||||||
| 04/01/13 | (1) | 300,000 | - | 300,000 | |||||||||||||||
| Fair Value Derivative Adjustments | (1) | 8,819 | - | 8,819 | |||||||||||||||
| Term Loan Facility | LIBOR+0.50% | 10/05/12 | (3)(4) | 500,000 | - | 500,000 | |||||||||||||
| 808,819 | - | 808,819 | |||||||||||||||||
| Revolving Credit Facility: | (3)(5) | - | - | - | |||||||||||||||
| Total Unsecured Debt | $ | 5,107,355 | $ | (11,105 | ) | $ | 5,096,250 | ||||||||||||
| (1) | Fair value interest rate swaps convert $300.0 million of the 5.200% notes due April 1, 2013 to a floating interest rate. | |
| (2) | Convertible notes mature on August 15, 2026. On July 18, 2011, the notes were called for redemption and are subject to exchange prior to the redemption date of August 18, 2011. | |
|
(3) |
Facilities are private. All other unsecured debt is public. | |
| (4) | Effective April 5, 2011, the Company exercised the second of its two one-year extension options for its $500.0 million term loan facility and as a result, the maturity date is now October 5, 2012. | |
| (5) |
On July 13, 2011, the Company replaced its then existing unsecured revolving credit facility with a new $1.25 billion unsecured revolving credit facility maturing on July 13, 2014, subject to a one-year extension option exercisable by the Company. The interest rate on advances under the new credit facility will generally be LIBOR plus a spread (currently 1.15%) and the Company pays an annual facility fee of 0.2%. Both the spread and the facility fee are dependent on the credit rating of the Company's long-term debt. |
|
| Equity Residential | ||||||||||||
| Selected Unsecured Public Debt Covenants | ||||||||||||
| June 30, | March 31, | |||||||||||
| 2011 | 2011 | |||||||||||
| Total Debt to Adjusted Total Assets (not to exceed 60%) | 45.7 | % | 47.3 | % | ||||||||
| Secured Debt to Adjusted Total Assets (not to exceed 40%) | 21.0 | % | 22.4 | % | ||||||||
| Consolidated Income Available for Debt Service to | ||||||||||||
| Maximum Annual Service Charges | ||||||||||||
| (must be at least 1.5 to 1) | 2.58 | 2.56 | ||||||||||
| Total Unsecured Assets to Unsecured Debt | 270.7 | % | 263.3 | % | ||||||||
| (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, 2011 | |||||||||||||||||||||||
| (Amounts in thousands except for share/unit and per share amounts) | |||||||||||||||||||||||
| Secured Debt | $ | 4,352,372 | 46.1 | % | |||||||||||||||||||
| Unsecured Debt | 5,096,250 | 53.9 | % | ||||||||||||||||||||
| Total Debt | 9,448,622 | 100.0 | % | 33.5 | % | ||||||||||||||||||
| Common Shares (includes Restricted Shares) | 296,280,085 | 95.6 | % | ||||||||||||||||||||
| Units (includes OP Units and LTIP Units) | 13,488,276 | 4.4 | % | ||||||||||||||||||||
| Total Shares and Units | 309,768,361 | 100.0 | % | ||||||||||||||||||||
| Common Share Price at June 30, 2011 | $ | 60.00 | |||||||||||||||||||||
| 18,586,102 | 98.9 | % | |||||||||||||||||||||
| Perpetual Preferred Equity (see below) | 200,000 | 1.1 | % | ||||||||||||||||||||
| Total Equity | 18,786,102 | 100.0 | % | 66.5 | % | ||||||||||||||||||
| Total Market Capitalization | $ | 28,234,724 | 100.0 | % | |||||||||||||||||||
| Perpetual Preferred Equity as of June 30, 2011 | |||||||||||||||||||||||
| (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 Q211 | YTD Q210 | Q211 | Q210 | ||||||||||||
| Weighted Average Amounts Outstanding for Net Income Purposes: | |||||||||||||||
| Common Shares - basic | 293,783,729 | 281,435,061 | 294,662,571 | 282,216,694 | |||||||||||
| Shares issuable from assumed conversion/vesting of (1): | |||||||||||||||
| - OP Units | 13,322,096 | - | 13,291,204 | - | |||||||||||
| - long-term compensation shares/units | 4,274,215 | - | 4,245,599 | - | |||||||||||
| Total Common Shares and Units - diluted (1) | 311,380,040 | 281,435,061 | 312,199,374 | 282,216,694 | |||||||||||
|
Weighted Average Amounts Outstanding for FFO and Normalized FFO Purposes: |
|||||||||||||||
| Common Shares - basic | 293,783,729 | 281,435,061 | 294,662,571 | 282,216,694 | |||||||||||
| OP Units - basic | 13,322,096 | 13,742,403 | 13,291,204 | 13,680,607 | |||||||||||
| Total Common Shares and OP Units - basic | 307,105,825 | 295,177,464 | 307,953,775 | 295,897,301 | |||||||||||
| Shares issuable from assumed conversion/vesting of: | |||||||||||||||
| - convertible preferred shares/units | - | 397,306 | - | 397,004 | |||||||||||
| - long-term compensation shares/units | 4,274,215 | 3,066,663 | 4,245,599 | 3,744,505 | |||||||||||
| Total Common Shares and Units - diluted | 311,380,040 | 298,641,433 | 312,199,374 | 300,038,810 | |||||||||||
| Period Ending Amounts Outstanding: | |||||||||||||||
| Common Shares (includes Restricted Shares) | 296,280,085 | 283,442,674 | |||||||||||||
| Units (includes OP Units and LTIP Units) | 13,488,276 | 13,899,303 | |||||||||||||
| Total Shares and Units | 309,768,361 | 297,341,977 | |||||||||||||
| (1) | Potential common shares issuable from the assumed conversion of OP Units and the exercise/vesting of long-term compensation shares/units are automatically anti-dilutive and therefore excluded from the diluted earnings per share calculation as the Company had a loss from continuing operations for the six months and quarter ended June 30, 2010. | |
| Equity Residential | ||||||||||||||||||
| Partially Owned Entities as of June 30, 2011 | ||||||||||||||||||
| (Amounts in thousands except for project and apartment unit amounts) | ||||||||||||||||||
| Consolidated | ||||||||||||||||||
| Development Projects | ||||||||||||||||||
| Held for | ||||||||||||||||||
| and/or Under | Completed | |||||||||||||||||
| Development | and Stabilized | Other | Total | |||||||||||||||
| Total projects (1) | - | 3 | 19 | 22 | ||||||||||||||
| Total apartment units (1) | - | 931 | 3,440 | 4,371 | ||||||||||||||
| Operating information for the six months ended 6/30/11 (at 100%): | ||||||||||||||||||
| Operating revenue | $ | - | $ | 10,763 | $ | 28,261 | $ | 39,024 | ||||||||||
| Operating expenses | 124 | 3,848 | 9,371 | 13,343 | ||||||||||||||
| Net operating (loss) income | (124 | ) | 6,915 | 18,890 | 25,681 | |||||||||||||
| Depreciation | - | 5,872 | 7,491 | 13,363 | ||||||||||||||
| General and administrative/other | 103 | 5 | 27 | 135 | ||||||||||||||
| Operating (loss) income | (227 | ) | 1,038 | 11,372 | 12,183 | |||||||||||||
| Interest and other income | 4 | 4 | 8 | 16 | ||||||||||||||
| Other expenses | (207 | ) | - | (14 | ) | (221 | ) | |||||||||||
| Interest: | ||||||||||||||||||
| Expense incurred, net | (399 | ) | (4,440 | ) | (6,785 | ) | (11,624 | ) | ||||||||||
| Amortization of deferred financing costs | - | (1,337 | ) | (324 | ) | (1,661 | ) | |||||||||||
| (Loss) income before income and other | ||||||||||||||||||
| taxes and net gains on sales of land | ||||||||||||||||||
| parcels and discontinued operations | (829 | ) | (4,735 | ) | 4,257 | (1,307 | ) | |||||||||||
| Income and other tax (expense) benefit | (57 | ) | - | (8 | ) | (65 | ) | |||||||||||
| Net gain on sales of land parcels | 4,217 | - | - | 4,217 | ||||||||||||||
| Net gain on sales of discontinued operations | 169 | - | - | 169 | ||||||||||||||
| Net income (loss) | $ | 3,500 | $ | (4,735 | ) | $ | 4,249 | $ | 3,014 | |||||||||
| Debt - Secured (2): | ||||||||||||||||||
| EQR Ownership (3) | $ | - | $ | 232,530 | $ | 152,017 | $ | 384,547 | ||||||||||
| Noncontrolling Ownership | - | - | 30,620 | 30,620 | ||||||||||||||
| Total (at 100%) | $ | - | $ | 232,530 | $ | 182,637 | $ | 415,167 | ||||||||||
| (1) Project and apartment unit counts exclude all uncompleted development projects until those projects are substantially completed. | |
| (2) All debt is non-recourse to the Company with the exception of $14.0 million in mortgage debt on one development project. | |
| (3) Represents the Company's current economic ownership interest. | |
| Note: See page 21 for the discussion of the Company's unconsolidated Sunrise Village development. | |
| Equity Residential | |||||||||||||||||||||||||||||||||
| Development and Lease-Up Projects as of June 30, 2011 | |||||||||||||||||||||||||||||||||
| (Amounts in thousands except for project and apartment unit amounts) | |||||||||||||||||||||||||||||||||
| Total Book | |||||||||||||||||||||||||||||||||
| No. of | Total | Total | Value Not | Estimated | Estimated | ||||||||||||||||||||||||||||
| Apartment | 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 | ||||||||||||||||||||||
| Consolidated | |||||||||||||||||||||||||||||||||
| Projects Under Development - Wholly Owned: | |||||||||||||||||||||||||||||||||
| Ten23 (formerly 500 West 23rd Street) (2) | New York, NY | 111 | $ | 55,555 | $ | 42,180 | $ | 42,180 | $ | - | 71 | % | - | - | Q4 2011 | Q4 2012 | |||||||||||||||||
| Savoy III | Aurora, CO | 168 | 23,856 | 11,441 | 11,441 | - | 42 | % | - | - | Q2 2012 | Q2 2013 | |||||||||||||||||||||
| 2201 Pershing Drive | Arlington, VA | 188 | 64,242 | 19,142 | 19,142 | - | 10 | % | - | - | Q3 2012 | Q3 2013 | |||||||||||||||||||||
| Chinatown Gateway | Los Angeles, CA | 280 | 92,920 | 30,290 | 30,290 | - | 3 | % | - | - | Q3 2013 | Q2 2015 | |||||||||||||||||||||
| Projects Under Development - Wholly Owned | 747 | 236,573 | 103,053 | 103,053 | - | ||||||||||||||||||||||||||||
| Projects Under Development | 747 | 236,573 | 103,053 | 103,053 | - | ||||||||||||||||||||||||||||
| Completed Not Stabilized - Wholly Owned (3): | |||||||||||||||||||||||||||||||||
| 425 Mass (4) | Washington, D.C. | 559 | 166,750 | 166,750 | - | - | 91 | % | 83 | % | Completed | Q4 2011 | |||||||||||||||||||||
| Vantage Pointe (4) | San Diego, CA | 679 | 200,000 | 200,000 | - | - | 80 | % | 74 | % | Completed | Q1 2012 | |||||||||||||||||||||
| Projects Completed Not Stabilized - Wholly Owned | 1,238 | 366,750 | 366,750 | - | - | ||||||||||||||||||||||||||||
| Projects Completed Not Stabilized | 1,238 | 366,750 | 366,750 | - | - | ||||||||||||||||||||||||||||
| Completed and Stabilized During the Quarter - Wholly Owned: | |||||||||||||||||||||||||||||||||
| Red 160 (formerly Redmond Way) | Redmond, WA | 250 | 82,582 | 80,882 | - | - | 97 | % | 94 | % | Completed | Stabilized | |||||||||||||||||||||
|
Westgate |
Pasadena, CA | 480 | 157,158 | 156,651 | - | 97,145 | (5 | ) | 97 | % | 96 | % | Completed | Stabilized | |||||||||||||||||||
| Projects Completed and Stabilized During the Quarter - Wholly Owned | 730 | 239,740 | 237,533 | - | 97,145 | ||||||||||||||||||||||||||||
| Completed and Stabilized During the Quarter - Partially Owned: | |||||||||||||||||||||||||||||||||
| The Brooklyner (formerly 111 Lawrence Street) | Brooklyn, NY | 490 | 262,368 | 261,456 | - | 148,002 | 99 | % | 98 | % | Completed | Stabilized | |||||||||||||||||||||
| Projects Completed and Stabilized During the Quarter - Partially Owned | 490 | 262,368 | 261,456 | - | 148,002 | ||||||||||||||||||||||||||||
| Projects Completed and Stabilized During the Quarter | 1,220 | 502,108 | 498,989 | - | 245,147 | ||||||||||||||||||||||||||||
| Total Consolidated Projects | 3,205 | $ | 1,105,431 | $ | 968,792 | $ | 103,053 | (6 | ) | $ | 245,147 | ||||||||||||||||||||||
| Land Held for Development | N/A | N/A | $ | 214,495 | $ | 214,495 | $ | - | |||||||||||||||||||||||||
| Unconsolidated | |||||||||||||||||||||||||||||||||
| Projects Under Development - Unconsolidated: | |||||||||||||||||||||||||||||||||
| Sunrise Village (7) | Sunrise, FL | 501 | $ | 78,212 | $ | 17,108 | $ | 17,108 | $ | - | 1 | % | - | - | Q2 2013 | Q2 2014 | |||||||||||||||||
| Projects Under Development - Unconsolidated | 501 | 78,212 | 17,108 | 17,108 | - | ||||||||||||||||||||||||||||
| Projects Under Development | 501 | 78,212 | 17,108 | 17,108 | - | ||||||||||||||||||||||||||||
| Total Unconsolidated Projects | 501 | $ | 78,212 | $ | 17,108 | $ | 17,108 | $ | - | ||||||||||||||||||||||||
| Total Capital | Q2 2011 | ||||||||||||||||||||||||||||||||
| NOI CONTRIBUTION FROM CONSOLIDATED DEVELOPMENT PROJECTS | Cost (1) | NOI | |||||||||||||||||||||||||||||||
| Projects Under Development | $ | 236,573 | $ | (9 | ) | ||||||||||||||||||||||||||||
| Completed Not Stabilized | 366,750 | 3,060 | |||||||||||||||||||||||||||||||
| Completed and Stabilized During the Quarter | 502,108 | 5,049 | |||||||||||||||||||||||||||||||
| Total Consolidated Development NOI Contribution | $ | 1,105,431 | $ | 8,100 | |||||||||||||||||||||||||||||
| (1) | Total capital cost represents estimated 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) | Ten23 - The land under this development is subject to a long term ground lease. | |
| (3) | Properties included here are substantially complete. However, they may still require additional exterior and interior work for all apartment units to be available for leasing. | |
| (4) | The Company acquired these completed development projects prior to stabilization and has begun/continued lease-up activities. | |
| (5) | Debt is tax-exempt bonds with $0.2 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 6/30/11. The Company paid-off $37.9 million in tax-exempt bonds during the second quarter of 2011. | |
| (6) | Total book value not placed in service excludes $12.0 million of construction-in-progress related to the reconstruction of the Prospect Towers garage. | |
| (7) | Sunrise Village - In 2010, the Company admitted an 80% institutional partner to an entity owning a developable land parcel in Florida in exchange for $11.7 million in cash and retained a 20% equity interest. This land parcel is now unconsolidated. Total project cost is approximately $78.2 million and construction will be predominantly funded with a long-term, non-recourse secured loan from the partner. The Company is responsible for constructing the project and has given certain construction cost overrun guarantees. The Company's remaining funding obligation is currently estimated at approximately $2.4 million. | |
| Equity Residential | ||||||||||||||||||||||||||||||||||||||||||||||||
| Repairs and Maintenance Expenses and Capital Expenditures to Real Estate | ||||||||||||||||||||||||||||||||||||||||||||||||
| For the Six Months Ended June 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||
| (Amounts in thousands except for apartment unit and per apartment unit amounts) | ||||||||||||||||||||||||||||||||||||||||||||||||
| Repairs and Maintenance Expenses | Capital Expenditures to Real Estate | Total Expenditures | ||||||||||||||||||||||||||||||||||||||||||||||
| Total | Avg. Per | Avg. Per | Avg. Per | Avg. Per | Building | Avg. Per | Avg. Per | Avg. Per | ||||||||||||||||||||||||||||||||||||||||
| Apartment | Apartment | Apartment | Apartment | Replacements | Apartment | Improvements | Apartment | Apartment | Grand | Apartment | ||||||||||||||||||||||||||||||||||||||
| Units (1) | Expense (2) | Unit | Payroll (3) | Unit | Total | Unit | (4) | Unit | (5) | Unit | Total | Unit | Total | Unit | ||||||||||||||||||||||||||||||||||
| Same Store Properties (6) | 104,163 | $ | 45,406 | $ | 436 | $ | 37,339 | $ | 358 | $ | 82,745 | $ | 794 | $ | 33,373 | $ | 321 | $ | 22,942 | $ | 220 | $ | 56,315 | $ | 541 | (9 | ) | $ | 139,060 | $ | 1,335 | |||||||||||||||||
| Non-Same Store Properties (7) | 11,747 | 5,021 | 484 | 4,134 | 399 | 9,155 | 883 | 2,220 | 214 | 4,949 | 477 | 7,169 | 691 | 16,324 | 1,574 | |||||||||||||||||||||||||||||||||
| Other (8) | - | 2,491 | 4,714 | 7,205 | 1,226 | 153 | 1,379 | 8,584 | ||||||||||||||||||||||||||||||||||||||||
| Total | 115,910 | $ | 52,918 | $ | 46,187 | $ | 99,105 | $ | 36,819 | $ | 28,044 | $ | 64,863 | $ | 163,968 | |||||||||||||||||||||||||||||||||
| (1) | Total Apartment Units - Excludes 4,850 military housing apartment 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, apartment 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 apartment units such as appliances, mechanical equipment, fixtures and flooring, including carpeting. Replacements for same store properties also include $18.2 million spent during the six months ended June 30, 2011 on apartment unit renovations/rehabs (primarily kitchens and baths) on 2,497 apartment units (equating to about $7,300 per apartment unit rehabbed) designed to reposition these assets for higher rental levels in their respective markets. In 2011, the Company expects to spend approximately $41.0 million rehabbing 5,500 apartment units (equating to about $7,500 per apartment unit rehabbed). | |
| (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, 2010, less properties subsequently sold. | |
| (7) | Non-Same Store Properties - Primarily includes all properties acquired during 2010 and 2011, plus any properties in lease-up and not stabilized as of January 1, 2010. Per apartment unit amounts are based on a weighted average of 10,369 apartment units. | |
| (8) | Other - Primarily includes expenditures for properties sold during the period. | |
| (9) | For 2011, the Company estimates that it will spend approximately $1,200 per apartment unit of capital expenditures for its same store properties inclusive of apartment unit renovation/rehab costs, or $850 per apartment unit excluding apartment unit renovation/rehab costs. | |
| Equity Residential | |||||||||||||||||
| Discontinued Operations | |||||||||||||||||
| (Amounts in thousands) | |||||||||||||||||
| Six Months Ended | Quarter Ended | ||||||||||||||||
| June 30, | June 30, | ||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| REVENUES | |||||||||||||||||
| Rental income | $ | 70,787 | $ | 126,365 | $ | 24,065 | $ | 64,577 | |||||||||
| Total revenues | 70,787 | 126,365 | 24,065 | 64,577 | |||||||||||||
| EXPENSES (1) | |||||||||||||||||
| Property and maintenance | 40,690 | 51,349 | 17,950 | 26,071 | |||||||||||||
| Real estate taxes and insurance | 3,859 | 10,149 | 989 | 4,943 | |||||||||||||
| Depreciation | 9,749 | 24,712 | 2,480 | 12,245 | |||||||||||||
| General and administrative | 47 | 19 | 36 | 14 | |||||||||||||
| Total expenses | 54,345 | 86,229 | 21,455 | 43,273 | |||||||||||||
| Discontinued operating income | 16,442 | 40,136 | 2,610 | 21,304 | |||||||||||||
| Interest and other income | 97 | 632 | 92 | 626 | |||||||||||||
| Interest (2): | |||||||||||||||||
| Expense incurred, net | 204 | (3,650 | ) | (77 | ) | (2,097 | ) | ||||||||||
| Amortization of deferred financing costs | (594 | ) | (221 | ) | (530 | ) | (19 | ) | |||||||||
| Income and other tax (expense) benefit | (61 | ) | (52 | ) | (19 | ) | 3 | ||||||||||
| Discontinued operations | 16,088 | 36,845 | 2,076 | 19,817 | |||||||||||||
| Net gain on sales of discontinued operations | 682,236 | 60,253 | 558,482 | 217 | |||||||||||||
| Discontinued operations, net | $ | 698,324 | $ | 97,098 | $ | 560,558 | $ | 20,034 | |||||||||
| (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 | ||||||||||||||||||||||||||||||
| Normalized FFO Guidance Reconciliations and Non-Comparable Items | ||||||||||||||||||||||||||||||
| (Amounts in thousands except per share data) | ||||||||||||||||||||||||||||||
| (All per share data is diluted) | ||||||||||||||||||||||||||||||
| Normalized FFO Guidance Reconciliations | ||||||||||||||||||||||||||||||
| Normalized | ||||||||||||||||||||||||||||||
| FFO Reconciliations | ||||||||||||||||||||||||||||||
| Guidance Q2 2011 | ||||||||||||||||||||||||||||||
| to Actual Q2 2011 | ||||||||||||||||||||||||||||||
| Amounts | Per Share | |||||||||||||||||||||||||||||
| Guidance Q2 2011 Normalized FFO - Diluted (2) (3) | $ | 183,407 | $ | 0.587 | ||||||||||||||||||||||||||
| Property NOI | 5,987 | 0.019 | ||||||||||||||||||||||||||||
| Other | (2,677 | ) | (0.008 | ) | ||||||||||||||||||||||||||
| Actual Q2 2011 Normalized FFO - Diluted (2) (3) | $ | 186,717 | $ | 0.598 | ||||||||||||||||||||||||||
| Non-Comparable Items – Adjustments from FFO to Normalized FFO (2) (3) | ||||||||||||||||||||||||||||||
| Six Months Ended June 30, | Quarter Ended June 30, | |||||||||||||||||||||||||||||
| 2011 | 2010 | Variance | 2011 | 2010 | Variance | |||||||||||||||||||||||||
| Impairment | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||
| Asset impairment and valuation allowances | - | - | - | - | - | - | ||||||||||||||||||||||||
| 3,752 | 3,964 | (212 | ) | 3,271 | 627 | 2,644 | ||||||||||||||||||||||||
| Write-off of pursuit costs (other expenses) | 3,038 | 2,062 | 976 | 1,355 | 1,016 | 339 | ||||||||||||||||||||||||
| Property acquisition costs and write-off of pursuit costs (other expenses) | 6,790 | 6,026 | 764 | 4,626 | 1,643 | 2,983 | ||||||||||||||||||||||||
| Write-off of unamortized deferred financing costs (interest expense) | 2,114 | 929 | 1,185 | 1,996 | 2 | 1,994 | ||||||||||||||||||||||||
| Non-cash convertible debt discount (interest expense) | 3,890 | 3,890 | - | 1,945 | 1,945 | - | ||||||||||||||||||||||||
| Unrealized loss due to ineffectiveness of forward starting swaps (interest expense) | 2,569 | - | 2,569 | 2,569 | - | 2,569 | ||||||||||||||||||||||||
|
Debt extinguishment (gains) losses, including prepayment penalties, preferred share redemptions and non-cash convertible debt discounts |
8,573 | 4,819 | 3,754 | 6,510 | 1,947 | 4,563 | ||||||||||||||||||||||||
| Net (gain) loss on sales of land parcels | (4,217 | ) | - | (4,217 | ) | (4,217 | ) | - | (4,217 | ) | ||||||||||||||||||||
| Net incremental (gain) loss on sales of condominium units | (1,115 | ) | (631 | ) | (484 | ) | (720 | ) | (243 | ) | (477 | ) | ||||||||||||||||||
| Income and other tax expense (benefit) - Condo sales | 26 | 19 | 7 | 7 | (2 | ) | 9 | |||||||||||||||||||||||
| (Gain) on sale of Equity Corporate Housing (ECH), net of severance | (223 | ) | - | (223 | ) | (223 | ) | - | (223 | ) | ||||||||||||||||||||
|
(Gains) losses on sales of non-operating assets, net of income and other tax expense (benefit) |
(5,529 | ) | (612 | ) | (4,917 | ) | (5,153 | ) | (245 | ) | (4,908 | ) | ||||||||||||||||||
| Prospect Towers garage insurance proceeds (real estate taxes and insurance) | (1,600 | ) | - | (1,600 | ) | - | - | - | ||||||||||||||||||||||
| Insurance/litigation settlement proceeds (interest and other income) | - | (5,192 | ) | 5,192 | - | (3,192 | ) | 3,192 | ||||||||||||||||||||||
| Forfeited deposits (interest and other income) | (500 | ) | - | (500 | ) | - | - | - | ||||||||||||||||||||||
| Other miscellaneous non-comparable items | (2,100 | ) | (5,192 | ) | 3,092 | - | (3,192 | ) | 3,192 | |||||||||||||||||||||
| Non-comparable items – Adjustments from FFO to Normalized FFO (2) (3) | $ | 7,734 | $ | 5,041 | $ | 2,693 | $ | 5,983 | $ | 153 | $ | 5,830 | ||||||||||||||||||
| Note: See page 26 for the definitions, the footnotes referenced above and the reconciliations of EPS to FFO and Normalized FFO. |
| Equity Residential | ||||||
| Normalized FFO Guidance and Assumptions | ||||||
| The guidance/projections provided below are based on current expectations and are forward-looking. | ||||||
| All guidance is given on a Normalized FFO basis. | ||||||
|
2011 Normalized FFO Guidance (per share diluted) |
||||||
| Q3 2011 | 2011 | |||||
| Expected Normalized FFO (2) (3) | $0.59 to $0.63 | $2.40 to $2.45 | ||||
|
2011 Same Store Assumptions |
||||||
| Physical occupancy | 95.2% | |||||
| Revenue change | 4.8% to 5.1% | |||||
| Expense change | 0.0% to 1.0% | |||||
| NOI change | 7.0% to 8.0% | |||||
| (Note: 30 basis point change in NOI percentage = $0.01 per share change in EPS/FFO) | ||||||
|
2011 Transaction Assumptions |
||||||
| Consolidated rental acquisitions | $1.15 billion | |||||
| Consolidated rental dispositions | $1.5 billion | |||||
| Capitalization rate spread | 150 basis points | |||||
|
2011 Debt Assumptions (see Note) |
||||||
| Weighted average debt outstanding | $9.3 billion to $9.4 billion | |||||
| Weighted average interest rate (reduced for capitalized interest) | 4.98% | |||||
| Interest expense | $463.0 million to $468.0 million | |||||
|
2011 Other Guidance Assumptions (see Note) |
||||||
| General and administrative expense | $42.0 million to $43.0 million | |||||
| Interest and other income | $1.5 million to $2.0 million | |||||
| $0.5 million to $1.5 million | ||||||
| Weighted average Common Shares and Units - Diluted | 312.9 million | |||||
|
Note: All guidance is given on a Normalized FFO basis. Therefore, certain items excluded from Normalized FFO, such as debt |
|
extinguishment costs/prepayment penalties and the write-off of pursuit and property acquisition costs, are not included |
|
in the estimates provided on this page. See page 26 for the definitions, the footnotes referenced above and the |
|
reconciliations of EPS to FFO and Normalized FFO. |
| Equity Residential | |||||||||||||||
| Additional Reconciliations, Definitions and Footnotes | |||||||||||||||
| (Amounts in thousands except per share data) | |||||||||||||||
| (All per share data is diluted) | |||||||||||||||
| The guidance/projections provided below are based on current expectations and are forward-looking. | |||||||||||||||
| Reconciliations of EPS to FFO and Normalized FFO for Pages 6, 24 and 25 | |||||||||||||||
| Expected | Expected | ||||||||||||||
| Expected Q2 2011 | Q3 2011 | 2011 | |||||||||||||
| Amounts | Per Share | Per Share | Per Share | ||||||||||||
| Expected Earnings - Diluted (5) | $ | 310,093 | $ | 0.992 | $0.50 to $0.54 | $2.87 to $2.92 | |||||||||
| Add: Expected depreciation expense | 173,559 | 0.555 | 0.51 | 2.09 | |||||||||||
| Less: Expected net gain on sales (5) | (303,021 | ) | (0.969 | ) | (0.43 | ) | (2.60 | ) | |||||||
| Expected FFO - Diluted (1) (3) | 180,631 | 0.578 | 0.58 to 0.62 | 2.36 to 2.41 | |||||||||||
| Asset impairment and valuation allowances | - | - | - | - | |||||||||||
| Property acquisition costs and write-off of pursuit costs (other expenses) | 3,144 | 0.010 | 0.01 | 0.04 | |||||||||||
| Debt extinguishment (gains) losses, including | |||||||||||||||
| prepayment penalties, preferred share | |||||||||||||||
| redemptions and non-cash convertible debt | |||||||||||||||
| discounts | 4,235 | 0.014 | 0.01 | 0.04 | |||||||||||
| (Gains) losses on sales of non-operating assets, | |||||||||||||||
| net of income and other tax expense (benefit) | (4,603 | ) | (0.015 | ) | - | (0.02 | ) | ||||||||
| Other miscellaneous non-comparable items | - | - | (0.01 | ) | (0.02 | ) | |||||||||
| Expected Normalized FFO - Diluted (2) (3) | $ | 183,407 | $ | 0.587 | $0.59 to $0.63 | $2.40 to $2.45 | |||||||||
| Definitions and Footnotes for Pages 6, 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 apartment units to condominiums, it simultaneously discontinues depreciation of such property. |
|
| (2) | Normalized funds from operations ("Normalized FFO") begins with FFO and excludes: | |
| • the impact of any expenses relating to asset impairment and valuation allowances; | ||
| • property acquisition and other transaction costs related to mergers and acquisitions and pursuit cost write-offs (other expenses); | ||
| • gains and losses from early debt extinguishment, including prepayment penalties, preferred share redemptions and the cost related to the implied option value of non-cash convertible debt discounts; | ||
| • gains and losses on the sales of non-operating assets, including gains and losses from land parcel and condominium sales, net of the effect of income tax benefits or expenses; and | ||
|
• other miscellaneous non-comparable items. |
||
| (3) |
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. The company also believes that Normalized FFO and Normalized 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 allow investors to compare the company's operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company's actual operating results. FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized 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, FFO available to Common Shares and Units, Normalized FFO and Normalized 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, FFO available to Common Shares and Units, Normalized FFO and Normalized 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. |
|
| (4) |
FFO available to Common Shares and Units and Normalized FFO available to Common Shares and Units are 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 Common Shares on a one-for-one basis. |
|
| (5) |
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 2011 and Second Quarter 2011 Same Store Properties: | |||||||||||||||||
| Six Months Ended June 30, | Quarter Ended June 30, | ||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| Operating income | $ | 267,473 | $ | 200,171 | $ | 146,495 | $ | 100,329 | |||||||||
| Adjustments: | |||||||||||||||||
| Non-same store operating results | (65,482 | ) | (15,802 | ) | (28,159 | ) | (3,993 | ) | |||||||||
| Fee and asset management revenue | (3,754 | ) | (5,468 | ) | (1,948 | ) | (3,046 | ) | |||||||||
| Fee and asset management expense | 1,957 | 3,563 | 1,009 | 1,605 | |||||||||||||
| Depreciation | 321,181 | 302,964 | 159,087 | 162,697 | |||||||||||||
| General and administrative | 22,341 | 20,808 | 10,908 | 10,089 | |||||||||||||
| Same store NOI | $ | 543,716 | $ | 506,236 | $ | 287,392 | $ | 267,681 | |||||||||
Equity Residential
Marty McKenna, 312/928-1901
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