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Equity Residential Reports Second Quarter 2009 Results
Wednesday, July 29, 2009 4:46 PM


Announces Expected Reduction of Common Share Annual Dividend to $1.35 per Share

Equity Residential (NYSE: EQR) today reported results for the quarter and six months ended June 30, 2009. All per share results are reported on a fully-diluted basis.

“We are pleased to deliver better than expected second quarter results as well as forecast modestly higher same store net operating income for the year than we originally thought,” said David J. Neithercut, Equity Residential’s President and CEO. “While lower operating expenses are the major contributor to our improved forecast, we are pleased that our revenue expectation for the year is essentially unchanged because our commitment to resident satisfaction is enabling us to retain existing residents at renewal rents higher than might have been expected in this extremely difficult economic climate.”

Second Quarter 2009

For the second quarter of 2009, the company reported earnings per share of $0.35 compared to earnings of $0.46 per share in the second quarter of 2008. The difference is primarily due to lower gains from property sales caused by lower property sales volume in 2009 and lower property net operating income (NOI) and a development-related impairment charge, which are both discussed below.

Funds from Operations (FFO) for the quarter ended June 30, 2009 was $0.58 per share compared to $0.64 per share in the same period of 2008. The difference is due primarily to:

  • the net negative impact of approximately $0.05 per share from lower total NOI from the company’s same store portfolio and dilution from 2008 and 2009 transaction activity, partially offset by the positive impact of NOI from lease-up activity;
  • the negative impact of approximately $0.04 per share from a non-cash charge of $11.1 million to reflect impairment in the value of a land parcel; and
  • the net positive impact of approximately $0.03 per share due to lower interest expense, higher interest and other income and certain other non-comparable items listed on page 23 of this release.

Six Months Ended June 30, 2009

For the six months ended June 30, 2009, the company reported earnings of $0.64 per share compared to $0.96 per share in the same period of 2008.

FFO for the six months ended June 30, 2009 was $1.16 per share compared to $1.22 per share in the same period of 2008.

Same Store Results

On a same store second quarter to second quarter comparison, which includes 121,256 apartment units, revenues decreased 2.4%, expenses decreased 0.6% and NOI decreased 3.4%. The revenue decrease was due to a 1.2% decrease in average rental rate and a 1.2% decrease in occupancy to 93.7%. The expense decrease was primarily due to a 2.8% decrease in utility expense and a 0.8% decrease in payroll.

On a same store six-month to six-month comparison, which includes 120,452 apartment units, revenues decreased 1.3%, expenses increased 1.1% and NOI decreased 2.8%.

Acquisitions/Dispositions

During the second quarter of 2009, the company sold 12 properties, consisting of 2,668 apartment units, for an aggregate sale price of $213.8 million at a weighted average capitalization (cap) rate of 7.6% generating an unlevered internal rate of return (IRR) of 9.7%. The company acquired no properties during the second quarter of 2009.

During the first six months of 2009, the company sold 23 consolidated properties, consisting of 4,199 apartment units, for an aggregate sale price of $353.4 million at a weighted average cap rate of 7.4% generating an unlevered IRR of 10.2%. The company acquired no properties during the first six months of 2009.

Liquidity

On June 29, 2009, the company closed a $500.0 million secured loan with Freddie Mac (NYSE: FRE), originated by Deutsche Bank Berkshire Mortgage. The loan is interest only and matures in eleven years with the first ten years fixed and the final year at a floating rate of interest. The loan, which is collateralized with thirteen assets in seven markets, has an all-in effective interest rate of approximately 5.6%. The closing of this loan continues the company's strategy of maintaining excellent liquidity and addressing funding obligations well before loan maturities.

The company currently has $565.0 million in unrestricted cash or securities readily convertible to cash, inclusive of the secured loan proceeds, and $1.35 billion available on its unsecured revolving credit facility. With current cash on hand, the company can meet all of its 2009 and 2010 debt maturities and development obligations. Inclusive of current cash on hand, the unsecured revolving credit facility and net disposition proceeds for 2009 as provided in current guidance, the company can meet all of its obligations through 2011.

Expected Dividend Reduction

The company expects to reduce its quarterly common share dividend, beginning with the dividend for the third quarter of 2009, from $0.4825 per share (an annual rate of $1.93 per share) to $0.3375 per share (an annual rate of $1.35 per share).

“We expect to take this step as a result of reductions in our cash flow from ongoing operations and also to position the company to take advantage of opportunities that may lie ahead,” said Mr. Neithercut.

Third Quarter 2009 Guidance

The company has established an FFO guidance range of $0.49 to $0.53 per share for the third quarter of 2009. The difference between the company’s actual pre-impairment second quarter 2009 FFO of $0.62 per share and the midpoint of the range for the third quarter is primarily attributable to:

  • the negative impact of approximately $0.07 per share from lower NOI from the company’s same store portfolio as well as dilution from 2009 transaction activity;
  • the negative impact of approximately $0.02 per share from increased interest expense due to higher debt balances as a result of the company’s recent $500.0 million loan from Freddie Mac and lower capitalized interest due to reduced development activity; and
  • the negative impact of approximately $0.02 per share from lower interest and other income in the third quarter.

Full Year 2009 Guidance

The company has revised its guidance for its full year 2009 same store operating performance, funds from operations results and transactions activities as well as other items listed on page 24 of this release. The changes to the full year same store and FFO guidance are listed below:

   

Previous

     

Revised

Same store:
Revenue change (4.5%) to (1.5%) (3.5%) to (3.0%)
Expense change 2.5% to 3.5% 1.25% to 1.75%
NOI change (9.25%) to (3.75%) (6.5%) to (5.5%)
 
FFO per share $2.00 to $2.30 $2.10 to $2.20

The guidance midpoint for the company’s full year 2009 FFO remains the same as the company’s previous guidance due to higher than expected property NOI and higher interest and other income offset by the impairment charge. Annual interest expense is largely unchanged as higher expense due to the $500.0 million loan from Freddie Mac is offset by lower than anticipated rates on the company’s floating rate debt.

Third Quarter 2009 Conference Call

Equity Residential expects to announce third quarter 2009 results on Wednesday, October 28, 2009 and host a conference call to discuss those results at 10:00 a.m. CT on Thursday, October 29, 2009.

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 526 properties located in 23 states and the District of Columbia, consisting of 143,856 apartment units. For more information on Equity Residential, please visit our website at www.equityresidential.com.

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements and information within the meaning of the federal securities laws. These statements are based on current expectations, estimates, projections and assumptions made by management. While Equity Residential’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, including, without limitation, changes in general market conditions, including the rate of job growth and cost of labor and construction material, the level of new multifamily construction and development, competition and local government regulation. Other risks and uncertainties are described under the heading “Risk Factors” in our Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityresidential.com. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Forward-looking statements are not guarantees of future performance, results or events. Equity Residential assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

A live web cast of the company’s conference call discussing these results and outlook for 2009 will take place tomorrow, Thursday, July 30, at 10:00 a.m. Central. Please visit the Investor Information section of the company’s website at www.equityresidential.com for the link. A replay of the web cast will be available for two weeks at this site.

Equity Residential
Consolidated Statements of Operations
(Amounts in thousands except per share data)
(Unaudited)
               
Six Months Ended June 30, Quarter Ended June 30,
2009 2008 2009 2008
REVENUES
Rental income $ 1,007,540 $ 1,003,532 $ 502,738 $ 510,567
Fee and asset management   5,275     5,010     2,412     2,716  
 
Total revenues   1,012,815     1,008,542     505,150     513,283  
 
EXPENSES
Property and maintenance 254,977 261,248 123,430 130,402
Real estate taxes and insurance 108,799 103,884 53,824 51,457
Property management 37,732 40,667 18,718 19,491
Fee and asset management 3,985 4,171 1,982 1,991
Depreciation 298,194 279,253 149,909 139,812
General and administrative 20,595 24,191 10,201 11,774
Impairment   11,124     -     11,124     -  
 
Total expenses   735,406     713,414     369,188     354,927  
 
Operating income 277,409 295,128 135,962 158,356
 
Interest and other income 12,639 8,167 6,622 4,808
Other expenses (306 ) (780 ) (14 ) (604 )
Interest:
Expense incurred, net (239,565 ) (238,780 ) (115,866 ) (119,511 )
Amortization of deferred financing costs   (6,220 )   (4,338 )   (3,255 )   (2,178 )
 
Income before income and other taxes, (loss) from investments in
unconsolidated entities, net gain (loss) on sales of unconsolidated
entities and discontinued operations 43,957 59,397 23,449 40,871
Income and other tax (expense) benefit (2,389 ) (4,622 ) (259 ) (1,628 )
(Loss) from investments in unconsolidated entities (2,221 ) (190 ) (2,026 ) (95 )
Net gain (loss) on sales of unconsolidated entities   2,759     -     (6 )   -  
Income from continuing operations 42,106 54,585 21,158 39,148
Discontinued operations, net   149,247     232,936     84,774     100,845  
Net income 191,353 287,521 105,932 139,993
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership (10,420 ) (17,481 ) (5,729 ) (8,348 )
Preference Interests and Units (7 ) (7 ) (3 ) (3 )
Partially Owned Properties   74     (1,659 )   5     (1,391 )
Net income attributable to controlling interests 181,000 268,374 100,205 130,251
Preferred distributions   (7,240 )   (7,259 )   (3,620 )   (3,626 )
Net income available to Common Shares $ 173,760   $ 261,115   $ 96,585   $ 126,625  
 
Earnings per share – basic:
Income from continuing operations available to Common Shares $ 0.12   $ 0.16   $ 0.06   $ 0.12  
Net income available to Common Shares $ 0.64   $ 0.97   $ 0.35   $ 0.47  
Weighted average Common Shares outstanding   272,614     269,196     272,901     269,608  
 
Earnings per share – diluted:

Income from continuing operations available to Common Shares

$ 0.12   $ 0.16   $ 0.06   $ 0.12  
Net income available to Common Shares $ 0.64   $ 0.96   $ 0.35   $ 0.46  
Weighted average Common Shares outstanding   289,152     289,921     289,338     290,445  
 
Distributions declared per Common Share outstanding $ 0.9650   $ 0.9650   $ 0.4825   $ 0.4825  
 

Equity Residential
Consolidated Statements of Funds From Operations
(Amounts in thousands except per share data)
(Unaudited)
               
 
Six Months Ended June 30, Quarter Ended June 30,

2009 (3)

2008 (3) 2009 (3) 2008 (3)
 
Net income $ 191,353 $ 287,521 $ 105,932 $ 139,993
Adjustments:
Net (income) loss attributable to Noncontrolling Interests:
Preference Interests and Units (7 ) (7 ) (3 ) (3 )
Partially Owned Properties 74 (1,659 ) 5 (1,391 )
Depreciation 298,194 279,253 149,909 139,812
Depreciation – Non-real estate additions (3,792 ) (4,081 ) (1,894 ) (2,030 )
Depreciation – Partially Owned and Unconsolidated Properties 431 2,040 248 1,006
Net (gain) loss on sales of unconsolidated entities (2,759 ) - 6 -
Discontinued operations:
Depreciation 3,641 14,921 1,438 6,782
Net gain on sales of discontinued operations (145,798 ) (214,797 ) (83,927 ) (92,280 )
Net incremental gain (loss) on sales of condominium units   335     (3,090 )   399     (3,456 )
 
FFO (1) (2) 341,672 360,101 172,113 188,433
Preferred distributions   (7,240 )   (7,259 )   (3,620 )   (3,626 )
 
FFO available to Common Shares and Units – basic (1) (2) $ 334,432   $ 352,842   $ 168,493   $ 184,807  
 
FFO available to Common Shares and Units – diluted (1) (2) $ 334,747   $ 353,183   $ 168,651   $ 184,975  
 
FFO per share and Unit – basic $ 1.16   $ 1.23   $ 0.58   $ 0.64  
 
FFO per share and Unit – diluted $ 1.16   $ 1.22   $ 0.58   $ 0.64  
 
Weighted average Common Shares and
Units outstanding – basic   288,851     287,260     288,990     287,440  
 
Weighted average Common Shares and
Units outstanding – diluted   289,558     290,360     289,743     290,878  
(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)

On January 1, 2009, the Company adopted FSP APB 14-1, which requires companies to retrospectively expense certain implied costs of the option value related to convertible debt.  As a result, net income, FFO and FFO available to Common Shares and Units – basic and diluted have all been reduced by approximately $5.0 million for both the six months ended June 30, 2009 and 2008, and by approximately $2.1 million and $2.5 million for the quarters ended June 30, 2009 and 2008, respectively.

 

Equity Residential
Consolidated Balance Sheets
(Amounts in thousands except for share amounts)
(Unaudited)
             
June 30, December 31,
2009 2008
ASSETS
Investment in real estate
Land $ 3,669,394 $ 3,671,299
Depreciable property 13,993,241 13,908,594
Projects under development 725,598 855,473
Land held for development   239,377     254,873  
Investment in real estate 18,627,610 18,690,239
Accumulated depreciation   (3,759,948 )   (3,561,300 )
Investment in real estate, net 14,867,662 15,128,939
 
Cash and cash equivalents 667,495 890,794
Investments in unconsolidated entities 3,666 5,795
Deposits – restricted 158,181 152,372
Escrow deposits – mortgage 17,541 19,729
Deferred financing costs, net 54,283 53,817
Other assets   154,234     283,664  
Total assets $ 15,923,062   $ 16,535,110  
 
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable $ 5,028,736 $ 5,036,930
Notes, net 4,945,244 5,447,012
Lines of credit - -
Accounts payable and accrued expenses 113,915 108,463
Accrued interest payable 107,566 113,846
Other liabilities 258,677 289,562
Security deposits 62,035 64,355
Distributions payable   142,187     141,843  
Total liabilities   10,658,360     11,202,011  
 
Commitments and contingencies
 
Redeemable Noncontrolling Interests – Operating Partnership   185,923     264,394  
 
Equity:
Shareholders' equity:
Preferred Shares of beneficial interest, $0.01 par value;
100,000,000 shares authorized; 1,950,925 shares issued
and outstanding as of June 30, 2009 and 1,951,475
shares issued and outstanding as of December 31, 2008 208,773 208,786
Common Shares of beneficial interest, $0.01 par value;
1,000,000,000 shares authorized; 273,975,692 shares issued
and outstanding as of June 30, 2009 and 272,786,760
shares issued and outstanding as of December 31, 2008 2,740 2,728
Paid in capital 4,373,983 4,273,489
Retained earnings 365,705 456,152
Accumulated other comprehensive loss   (22,222 )   (35,799 )
Total shareholders' equity 4,928,979 4,905,356
Noncontrolling Interests:
Operating Partnership 136,251 137,645
Preference Interests and Units 184 184
Partially Owned Properties   13,365     25,520  
Total Noncontrolling Interests   149,800     163,349  
Total equity   5,078,779     5,068,705  
Total liabilities and equity $ 15,923,062   $ 16,535,110  
 

Equity Residential
Portfolio Summary
As of June 30, 2009
           
 
% of 2009 Average
% of Stabilized Rental
Markets Properties Units Total Units NOI Rate (1)
 
1 New York Metro Area 22 6,246 4.3 % 10.1 % $ 2,627
2 DC Northern Virginia 26 8,781 6.1 % 9.0 % 1,631
3 South Florida 39 12,897 9.0 % 8.5 % 1,264
4 Los Angeles 39 7,841 5.5 % 8.2 % 1,729
5 Seattle/Tacoma 47 10,645 7.4 % 7.3 % 1,314
6 Boston 37 6,608 4.6 % 6.7 % 1,980
7 San Francisco Bay Area 34 6,731 4.7 % 6.6 % 1,670
8 Phoenix 42 12,085 8.4 % 5.4 % 880
9 Denver 25 8,606 6.0 % 5.1 % 998
10 San Diego 14 4,491 3.1 % 4.5 % 1,638
11 Orlando 26 8,042 5.6 % 4.3 % 1,008
12 Atlanta 28 8,730 6.1 % 3.9 % 934
13 Inland Empire, CA 15 4,655 3.2 % 3.8 % 1,333
14 Suburban Maryland 23 6,276 4.4 % 3.6 % 1,217
15 Orange County, CA 10 3,307 2.3 % 3.3 % 1,553
16 New England (excluding Boston) 24 3,945 2.7 % 2.1 % 1,110
17 Portland, OR 10 3,417 2.4 % 1.8 % 967
18 Jacksonville 12 3,951 2.7 % 1.7 % 871
19 Raleigh/Durham 12 3,058 2.1 % 1.3 % 789
20 Tampa 10 3,158 2.2 % 1.2 %   903
 
Top 20 Total 495 133,470 92.8 % 98.4 % 1,328
 
21 Central Valley, CA 7 1,205 0.8 % 0.6 % 1,032
22 Dallas/Ft. Worth 7 1,641 1.1 % 0.5 % 860
23 Other EQR 13 2,939 2.1 % 0.5 %   866
 
Total 522 139,255 96.8 % 100.0 % 1,311
 
Condominium Conversion 2 42 - - -
Military Housing 2 4,559 3.2 % -     -
 
Grand Total 526 143,856 100.0 % 100.0 % $ 1,311
 

(1)

 

Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the month of June 2009.

             
Equity Residential
                         
 
 
Portfolio as of June 30, 2009
 
Properties Units
 
Wholly Owned Properties 459

 

124,627
Partially Owned Properties:
Consolidated 25 5,110
Unconsolidated 40 9,560
Military Housing (Fee Managed) 2     4,559  
 
526     143,856  
 
                         
 
Portfolio Rollforward Q2 2009
($ in thousands)
 
Purchase/
Properties Units (Sale) Price Cap Rate
 
3/31/2009 537 146,232
 
Acquisitions:
Rental Properties - - - -
Dispositions:
Rental Properties:
Consolidated (12 ) (2,668 ) $ (213,817 ) 7.6 %
Condominium Conversion Properties - (22 ) $ (4,523 )
Completed Developments 1 457
Configuration Changes -   (143 )
 
6/30/2009 526   143,856  
 
                         
 
Portfolio Rollforward 2009
($ in thousands)
 
Purchase/
Properties Units (Sale) Price Cap Rate
 
12/31/2008 548 147,244
 
Acquisitions:
Rental Properties - - - -
Dispositions:
Rental Properties:
Consolidated (23 ) (4,199 ) $ (353,390 ) 7.4 %
Unconsolidated (1) (1 ) (216 ) $ (20,700 ) 8.0 %
Condominium Conversion Properties (1 ) (23 ) $ (4,669 )
Completed Developments 3 1,199
Configuration Changes -   (149 )
 
6/30/2009 526   143,856  
(1)   EQR owned a 25% interest in this unconsolidated rental property. Sale price listed is the gross sale price.

                 
Equity Residential
 
 
 
Second Quarter 2009 vs. Second Quarter 2008
Quarter over Quarter Same Store Results/Statistics
$ in thousands (except for Average Rental Rate) - 121,256 Same Store Units
 
Results Statistics
Average
Rental
Description Revenues Expenses NOI (1) Rate (2) Occupancy Turnover
 
Q2 2009 $ 457,052 $ 167,886 $ 289,166 $ 1,343 93.7 % 15.0 %
Q2 2008 $ 468,282   $ 168,890   $ 299,392   $ 1,359   94.9 % 15.9 %
 
Change $ (11,230 ) $ (1,004 ) $ (10,226 ) $ (16 ) (1.2 %) (0.9 %)
 
Change (2.4 %) (0.6 %) (3.4 %) (1.2 %)
 
 
 
Second Quarter 2009 vs. First Quarter 2009
Sequential Quarter over Quarter Same Store Results/Statistics
$ in thousands (except for Average Rental Rate) - 125,012 Same Store Units
 
Results Statistics
Average
Rental
Description Revenues Expenses NOI (1) Rate (2) Occupancy Turnover
 
Q2 2009 $ 473,860 $ 175,183 $ 298,677 $ 1,350 93.7 % 15.0 %
Q1 2009 $ 475,924   $ 182,910   $ 293,014   $ 1,356   93.7 % 13.5 %
 
Change $ (2,064 ) $ (7,727 ) $ 5,663   $ (6 ) 0.0 % 1.5 %
 
Change (0.4 %) (4.2 %) 1.9 % (0.4 %)
 
 
 
June YTD 2009 vs. June YTD 2008
YTD over YTD Same Store Results/Statistics
$ in thousands (except for Average Rental Rate) - 120,452 Same Store Units
 
Results Statistics
Average
Rental
Description Revenues Expenses NOI (1) Rate (2) Occupancy Turnover
 
YTD 2009 $ 910,279 $ 341,960 $ 568,319 $ 1,346 93.7 % 28.5 %
YTD 2008 $ 922,549   $ 338,147   $ 584,402   $ 1,352   94.5 % 29.7 %
 
Change $ (12,270 ) $ 3,813   $ (16,083 ) $ (6 ) (0.8 %) (1.2 %)
 
Change (1.3 %) 1.1 % (2.8 %) (0.4 %)
 
(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 2009 vs. Second Quarter 2008
Same Store Results by Market
                   
 
Increase (Decrease) from Prior Year's Quarter
Q2 2009 Q2 2009 Q2 2009
% of Average Weighted Average
Actual Rental Average Rental
Markets Units NOI Rate (1) Occupancy %

 

Revenues Expenses NOI Rate (1) Occupancy
 
1 New York Metro Area 6,246 10.3 % $ 2,680 94.8 % (3.3 %) 5.6 % (7.8 %) (3.0 %) (0.2 %)
2 DC Northern Virginia 8,057 8.9 % 1,664 94.2 % (1.4 %) 1.5 % (2.7 %) 0.3 % (1.7 %)
3 South Florida 11,761 8.6 % 1,281 93.4 % (2.8 %) (2.3 %) (3.1 %) (2.1 %) (0.6 %)
4 Los Angeles 6,863 7.7 % 1,719 92.9 % (4.1 %) (1.9 %) (5.1 %) (2.0 %) (2.0 %)
5 Seattle/Tacoma 8,215 6.9 % 1,374 92.8 % (3.4 %) 0.0 % (5.3 %) (1.2 %) (2.2 %)
6 Boston 5,714 6.9 % 1,924 95.0 % 0.6 % (3.7 %) 3.2 % 1.8 % (1.2 %)
7 San Francisco Bay Area 6,200 6.6 % 1,692 93.2 % (1.2 %) (2.1 %) (0.7 %) 1.7 % (2.7 %)
8 Phoenix 10,646 5.5 % 876 92.7 % (6.9 %) (3.3 %) (9.2 %) (5.7 %) (1.3 %)
9 Denver 8,059 5.2 % 997 94.0 % (0.7 %) (3.4 %) 0.6 % 0.5 % (1.2 %)
10 San Diego 4,491 4.9 % 1,646 93.8 % 0.5 % (1.5 %) 1.4 % 0.9 % (0.5 %)
11 Orlando 7,525 4.3 % 998 92.9 % (4.5 %) 0.4 % (7.5 %) (3.6 %) (0.9 %)
12 Atlanta 7,546 4.1 % 974 94.0 % (3.0 %) 0.8 % (5.7 %) (1.7 %) (1.2 %)
13 Inland Empire, CA 4,355 3.8 % 1,339 94.2 % (2.3 %) (2.7 %) (2.1 %) (1.4 %) (0.9 %)
14 Orange County, CA 3,175 3.4 % 1,578 93.9 % (2.3 %) (4.0 %) (1.6 %) (1.7 %) (0.6 %)
15 Suburban Maryland 3,977 2.9 % 1,176 94.4 % 1.5 % 1.5 % 1.5 % 2.4 % (0.8 %)
16 New England (excluding Boston) 3,945 2.3 % 1,104 93.9 % (1.1 %) 1.2 % (3.0 %) 0.0 % (1.1 %)
17 Jacksonville 3,711 1.9 % 890 93.4 % (2.8 %) 1.5 % (5.7 %) (2.6 %) (0.2 %)
18 Portland, OR 3,113 1.8 % 989 93.7 % (0.8 %) 1.5 % (2.2 %) 1.0 % (1.7 %)
19 Tampa 2,598 1.3 % 941 93.9 % (3.5 %) 0.9 % (6.6 %) (3.1 %) (0.3 %)
20 Raleigh/Durham 2,666 1.3 %   821 93.9 % (2.1 %) (3.8 %) (0.9 %) (0.5 %) (1.5 %)
 
Top 20 Markets 118,863 98.6 % 1,350 93.7 % (2.4 %) (0.5 %) (3.4 %) (1.1 %) (1.2 %)
All Other Markets 2,393 1.4 %   1,002 94.2 % (3.4 %) (4.5 %) (2.6 %) (2.1 %) (1.3 %)
 
Total 121,256 100.0 % $ 1,343 93.7 % (2.4 %) (0.6 %) (3.4 %) (1.2 %) (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 2009 vs. First Quarter 2009
Sequential Same Store Results by Market
                   
 
Increase (Decrease) from Prior Quarter
Q2 2009 Q2 2009 Q2 2009
% of Average Weighted Average
Actual Rental Average Rental
Markets Units NOI Rate (1) Occupancy % Revenues Expenses NOI Rate (1) Occupancy
 
1 New York Metro Area 6,246 9.9 % $ 2,680 94.8 % (0.4 %) (2.6 %) 0.9 % (1.5 %) 1.0 %
2 DC Northern Virginia 8,781 9.2 % 1,642 94.3 % (0.1 %) (5.0 %) 2.4 % 0.2 % (0.3 %)
3 South Florida 12,465 8.8 % 1,282 93.4 % (0.3 %) (5.3 %) 3.5 % (0.5 %) 0.2 %
4 Los Angeles 7,442 8.0 % 1,735 92.9 % (2.3 %) (2.3 %) (2.3 %) (1.4 %) (0.8 %)
5 Boston 6,024 7.2 % 2,001 95.0 % 1.9 % (10.1 %) 10.7 % 0.9 % 0.9 %
6 Seattle/Tacoma 8,215 6.7 % 1,374 92.8 % (0.2 %) (3.0 %) 1.4 % 0.0 % (0.2 %)
7 San Francisco Bay Area 6,200 6.4 % 1,692 93.2 % (1.7 %) (2.1 %) (1.4 %) (1.4 %) (0.3 %)
8 Phoenix 10,646 5.3 % 876 92.7 % (2.7 %) (5.0 %) (1.2 %) (1.5 %) (1.2 %)
9 Denver 8,059 5.1 % 997 94.0 % (0.4 %) 0.8 % (1.0 %) (0.9 %) 0.4 %
10 San Diego 4,491 4.7 % 1,646 93.8 % 0.3 % (5.5 %) 3.3 % (0.2 %) 0.5 %
11 Orlando 7,690 4.3 % 1,002 92.8 % (0.5 %) (1.9 %) 0.6 % (0.6 %) 0.1 %
12 Atlanta 7,546 3.9 % 974 94.0 % (0.6 %) (2.9 %) 1.2 % (1.1 %) 0.4 %
13 Suburban Maryland 5,251 3.8 % 1,210 94.5 % 3.4 % (3.7 %) 8.1 % 1.8 % 1.5 %
14 Inland Empire, CA 4,355 3.7 % 1,339 94.2 % (1.1 %) (5.2 %) 1.1 % (0.8 %) (0.3 %)
15 Orange County, CA 3,175 3.3 % 1,578 93.9 % (1.3 %) (3.0 %) (0.5 %) (1.1 %) (0.2 %)
16 New England (excluding Boston) 3,945 2.2 % 1,104 93.9 % 1.2 % (11.8 %) 16.0 % 1.3 % (0.1 %)
17 Jacksonville 3,711 1.8 % 890 93.4 % 0.8 % (1.8 %) 2.9 % 0.6 % 0.2 %
18 Portland, OR 3,113 1.8 % 989 93.7 % (0.8 %) (1.4 %) (0.5 %) 0.1 % (0.9 %)
19 Tampa 2,598 1.3 % 941 93.9 % (1.5 %) (4.8 %) 1.2 % (1.0 %) (0.4 %)
20 Raleigh/Durham 2,666 1.2 %   821 93.9 % (2.0 %) (2.6 %) (1.6 %) (0.7 %) (1.3 %)
 
Top 20 Markets 122,619 98.6 % 1,357 93.7 % (0.4 %) (4.2 %) 1.9 % (0.4 %) 0.0 %
All Other Markets 2,393 1.4 %   1,002 94.2 % (0.7 %) (4.5 %) 1.8 % (1.4 %) 0.7 %
 
Total 125,012 100.0 % $ 1,350 93.7 % (0.4 %) (4.2 %) 1.9 % (0.4 %) 0.0 %
 
(1)   Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period.

Equity Residential
June YTD 2009 vs. June YTD 2008
Same Store Results by Market
                     
 
Increase (Decrease) from Prior Year
June YTD 09 June YTD 09 June YTD 09
% of Average Weighted Average
Actual Rental Average Rental
Markets Units NOI Rate (1) Occupancy % Revenues Expenses NOI Rate (1) Occupancy
 
1 New York Metro Area 6,246 10.4 % $ 2,700 94.3 % (1.4 %) 3.7 % (4.3 %) (1.6 %) 0.2 %
2 South Florida 11,761 8.6 % 1,284 93.4 % (2.1 %) 1.3 % (4.5 %) (1.7 %) (0.4 %)
3 DC Northern Virginia 7,661 8.5 % 1,655 94.4 % (0.3 %) 2.1 % (1.4 %) 0.8 % (1.1 %)
4 Los Angeles 6,863 7.8 % 1,732 93.3 % (2.1 %) 0.6 % (3.3 %) (1.1 %) (0.9 %)
5 Seattle/Tacoma 8,215 7.0 % 1,374 92.9 % (1.4 %) 2.1 % (3.3 %) 0.3 % (1.6 %)
6 San Francisco Bay Area 6,200 6.8 % 1,704 93.3 % 0.6 % 0.2 % 0.8 % 3.2 % (2.4 %)
7 Boston 5,714 6.7 % 1,918 94.7 % 1.1 % (0.3 %) 1.9 % 2.3 % (1.2 %)
8 Phoenix 10,238 5.3 % 879 93.3 % (6.7 %) 0.4 % (10.9 %) (5.4 %) (1.4 %)
9 Denver 8,059 5.3 % 1,002 93.8 % 0.2 % (1.5 %) 1.1 % 1.6 % (1.3 %)
10 San Diego 4,491 4.9 % 1,648 93.6 % 0.8 % 0.1 % 1.1 % 1.4 % (0.5 %)
11 Orlando 7,525 4.4 % 1,001 92.8 % (4.5 %) (0.5 %) (7.0 %) (3.6 %) (0.8 %)
12 Atlanta 7,546 4.1 % 979 93.8 % (1.7 %) 2.3 % (4.6 %) (0.7 %) (1.0 %)
13 Inland Empire, CA 4,355 3.9 % 1,344 94.3 % (1.2 %) (0.1 %) (1.8 %) (1.6 %) 0.4 %
14 Orange County, CA 3,175 3.5 % 1,587 94.0 % (1.1 %) (1.3 %) (1.1 %) (0.8 %) (0.3 %)
15 Suburban Maryland 3,977 2.8 % 1,165 94.1 % 2.2 % 2.7 % 2.0 % 2.5 % (0.2 %)
16 New England (excluding Boston) 3,945 2.1 % 1,097 94.0 % (1.0 %) 3.8 % (5.3 %) (0.5 %) (0.5 %)
17 Portland, OR 3,113 1.9 % 989 94.2 % 0.3 % 1.4 % (0.3 %) 1.4 % (1.0 %)
18 Jacksonville 3,711 1.9 % 888 93.3 % (3.8 %) 1.9 % (7.7 %) (3.6 %) (0.2 %)
19 Tampa 2,598 1.3 % 946 94.2 % (2.9 %) 1.8 % (6.4 %) (3.0 %) 0.0 %
20 Raleigh/Durham 2,666 1.3 %   824 94.6 % (1.1 %) (0.7 %) (1.5 %) (0.2 %) (0.9 %)
 
Top 20 Markets 118,059 98.5 % 1,353 93.7 % (1.3 %) 1.2 % (2.8 %) (0.4 %) (0.9 %)
All Other Markets 2,393 1.5 %   1,010 93.8 % (0.6 %) (1.9 %) 0.2 % (0.4 %) (0.2 %)
 
Total 120,452 100.0 % $ 1,346 93.7 % (1.3 %) 1.1 % (2.8 %) (0.4 %) (0.8 %)
 
(1)   Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period.

         
Equity Residential
                           
 
Debt Summary as of June 30, 2009
(Amounts in thousands)
Weighted
Weighted Average
Average Maturities
Amounts (1) % of Total Rates (1) (years)
 
Secured $ 5,028,736 50.4 % 4.86 % 9.0
Unsecured   4,945,244 49.6 % 5.34 % 5.2
 
Total $ 9,973,980 100.0 % 5.11 % 7.1
 
Fixed Rate Debt:
Secured - Conventional $ 4,033,465 40.4 % 5.96 % 7.7
Unsecured - Public/Private   4,409,644 44.2 % 5.92 % 5.5
 
Fixed Rate Debt   8,443,109 84.6 % 5.93 % 6.6
 
Floating Rate Debt:
Secured - Conventional 359,597 3.6 % 2.07 % 3.5
Secured - Tax Exempt 635,674 6.4 % 0.73 % 21.1
Unsecured - Public/Private 500,000 5.0 % 1.36 % 1.3
Unsecured - Tax Exempt 35,600 0.4 % 0.44 % 19.5
Unsecured - Revolving Credit Facility   - -   -   2.7
 
Floating Rate Debt   1,530,871 15.4 % 1.32 % 10.1
 
Total $ 9,973,980 100.0 % 5.11 % 7.1
(1)   Net of the effect of any derivative instruments. Weighted average rates are for the six months ended June 30, 2009.
 
Note: The Company capitalized interest of approximately $21.0 million and $29.5 million during the six months ended June 30, 2009 and 2008, respectively. The Company capitalized interest of approximately $10.4 million and $14.8 million during the quarters ended June 30, 2009 and 2008, respectively.
Debt Maturity Schedule as of June 30, 2009
(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)
 
2009 $ 6,455 $ 86,725 $ 93,180 0.9 % 7.58 % 2.64 %
2010 220,603 672,235 (2) 892,838 8.9 % 7.54 % 2.93 %
2011 1,258,011 (3) 87,812 1,345,823 13.5 % 5.58 % 5.33 %
2012 955,972 3,442 959,414 9.6 % 5.89 % 5.88 %
2013 565,881 - 565,881 5.7 % 5.93 % 5.93 %
2014 516,964 - 516,964 5.2 % 5.28 % 5.28 %
2015 355,107 - 355,107 3.6 % 6.41 % 6.41 %
2016 1,088,710 - 1,088,710 10.9 % 5.32 % 5.32 %
2017 1,345,998 456 1,346,454 13.5 % 5.87 % 5.87 %
2018 335,501 44,677 380,178 3.8 % 5.96 % 5.60 %

2019

+

  1,793,907   635,524   2,429,431 24.4 % 5.86 % 5.04 %
 
Total $ 8,443,109 $ 1,530,871 $ 9,973,980 100.0 % 5.80 % 5.22 %
(1)   Net of the effect of any derivative instruments. Weighted average rates are as of June 30, 2009.
 
(2) Includes the Company's $500.0 million floating rate term loan facility, which matures on October 5, 2010, subject to two one-year extension options exercisable by the Company.
 
(3) Includes $531.1 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.

Equity Residential
Unsecured Debt Summary as of June 30, 2009
(Amounts in thousands)
             
Unamortized
Coupon Due Face Premium/ Net
Rate Date Amount (Discount) Balance
 
Fixed Rate Notes:
6.950 % 03/02/11 (1) $ 114,806 $ 1,688 $ 116,494
6.625 % 03/15/12 400,000 (795 ) 399,205
5.500 % 10/01/12 350,000 (1,122 ) 348,878
5.200 % 04/01/13 400,000 (444 ) 399,556
5.250 % 09/15/14 500,000 (320 ) 499,680
6.584 % 04/13/15 300,000 (645 ) 299,355
5.125 % 03/15/16 500,000 (359 ) 499,641
5.375 % 08/01/16 400,000 (1,314 ) 398,686
5.750 % 06/15/17 650,000 (4,069 ) 645,931
7.125 % 10/15/17 150,000 (538 ) 149,462
7.570 % 08/15/26 140,000 - 140,000
3.850 % 08/15/26 (2)   531,092   (18,336 )   512,756
 
  4,435,898   (26,254 )   4,409,644
 
Floating Rate Tax Exempt Notes:
7-Day SIFMA 12/15/28 (3)   35,600   -     35,600
 
 
Floating Rate Notes:
Term Loan Facility LIBOR+0.50% 10/05/10

(3)(4)

  500,000   -     500,000
 
 
Revolving Credit Facility: LIBOR+0.50% 02/28/12 (5)   -   -     -
 
Total Unsecured Debt $ 4,971,498 $ (26,254 ) $ 4,945,244
  Note: SIFMA stands for the Securities Industry and Financial Markets Association and is the tax-exempt index equivalent of LIBOR.
 
(1) On January 27, 2009, the Company repurchased $185.2 million of these notes at par pursuant to a cash tender offer announced on January 16, 2009.
 
(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. During the six months ended June 30, 2009, the Company repurchased $17.5 million of these notes at a discount to par of approximately 11.6% and recognized a gain on early debt extinguishment of $2.0 million. Effective January 1, 2009, the Company adopted FSP APB 14-1, which requires companies to expense the implied option value inherent in convertible debt. In conjunction with this adoption, the Company recorded an adjustment of $17.3 million to the beginning balance of the discount on its convertible notes.
 
(3) Notes are private. All other unsecured debt is public.
 
(4) Represents the Company's $500.0 million term loan facility, which matures on October 5, 2010, subject to two one-year extension options exercisable by the Company.
 
(5) As of June 30, 2009, there was no amount outstanding and approximately $1.35 billion available on the Company's unsecured revolving credit facility.

Equity Residential
Selected Unsecured Public Debt Covenants
         
 
 
June 30, March 31,
2009 2009
 
Total Debt to Adjusted Total Assets (not to exceed 60%) 50.8 % 51.2 %
 
Secured Debt to Adjusted Total Assets (not to exceed 40%) 25.6 % 25.1 %
 
Consolidated Income Available for Debt Service to
Maximum Annual Service Charges
(must be at least 1.5 to 1) 2.30 2.34
 
Total Unsecured Assets to Unsecured Debt
(must be at least 150%) 238.2 % 231.1 %
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, 2009
(Amounts in thousands except for share/unit and per share amounts)
 
Secured Debt $ 5,028,736 50.4 %
Unsecured Debt   4,945,244 49.6 %
 
Total Debt 9,973,980 100.0 % 60.0 %
 
Common Shares (includes Restricted Shares) 273,975,692 94.4 %
Units   16,205,905   5.6 %
 
Total Shares and Units 290,181,597 100.0 %
Common Share Equivalents (see below)   405,555
 
Total outstanding at quarter-end 290,587,152
Common Share Price at June 30, 2009 $ 22.23
6,459,752 97.0 %
Perpetual Preferred Equity (see below)   200,000 3.0 %
 
Total Equity 6,659,752 100.0 % 40.0 %
 
Total Market Capitalization $ 16,633,732 100.0 %
                                       
 
Convertible Preferred Equity as of June 30, 2009
(Amounts in thousands except for share/unit and per share/unit amounts)
 
Annual Annual Weighted Common
Redemption Outstanding Liquidation Dividend Dividend Average Conversion Share
Series     Date Shares/Units Value Per Share/Unit Amount Rate Ratio Equivalents
 
Preferred Shares:
7.00% Series E 11/1/98 328,466 $ 8,212 $ 1.75 $ 575 1.1128 365,517
7.00% Series H 6/30/98 22,459 561 1.75 39 1.4480 32,521
Junior Preference Units:
8.00% Series B 7/29/09 7,367   184 2.00   15 1.020408 7,517
 
Total Convertible Preferred Equity 358,292 $ 8,957 $ 629 7.02 % 405,555
                                       
 
Perpetual Preferred Equity as of June 30, 2009
(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 Q209 YTD Q208 Q209 Q208
 
Weighted Average Amounts Outstanding for Net Income Purposes:
Common Shares - basic 272,613,907 269,196,050 272,901,078 269,607,843
Shares issuable from assumed conversion/vesting of:
- OP Units 16,237,055 18,063,520 16,089,264 17,832,334
- long-term compensation award shares/units 300,939 2,661,461 347,395 3,004,340
 
Total Common Shares and Units - diluted 289,151,901 289,921,031 289,337,737 290,444,517
 
Weighted Average Amounts Outstanding for FFO Purposes:
Common Shares - basic 272,613,907 269,196,050 272,901,078 269,607,843
OP Units - basic 16,237,055 18,063,520 16,089,264 17,832,334
 
Total Common Shares and OP Units - basic 288,850,962 287,259,570 288,990,342 287,440,177
Shares issuable from assumed conversion/vesting of:
- convertible preferred shares/units 405,791 438,825 405,555 433,179
- long-term compensation award shares/units 300,939 2,661,461 347,395 3,004,340
 
Total Common Shares and Units - diluted 289,557,692 290,359,856 289,743,292 290,877,696
 
Period Ending Amounts Outstanding:
Common Shares (includes Restricted Shares) 273,975,692
Units 16,205,905
 
Total Shares and Units 290,181,597

Equity Residential
Partially Owned Entities as of June 30, 2009
(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
 
Total projects (1)   -     2     2     21     25     40  
 
Total units (1)   -     735     432     3,943     5,110     9,560  
 
Operating information for the six months
ended 6/30/09 (at 100%):
Operating revenue $ 309 $ 2,891 $ 3,564 $ 28,639 $ 35,403 $ 48,107
Operating expenses   635     2,171     1,473     9,670     13,949     21,716  
 
Net operating (loss) income (326 ) 720 2,091 18,969 21,454 26,391
Depreciation 185 1,179 1,780 7,445 10,589 10,105
General and administrative/other   50     411     5     7     473     190  
 
Operating (loss) income (561 ) (870 ) 306 11,517 10,392 16,096
Interest and other income 19 - - 71 90 98
Other expenses 2 - - - 2 -
Interest:
Expense incurred, net (51 ) (1,887 ) (1,074 ) (10,070 ) (13,082 ) (25,865 )
Amortization of deferred financing costs (40 ) (76 ) (26 ) (83 ) (225 ) (427 )
Income and other tax (expense) benefit   (19 )   -     -     (34 )   (53 )   (132 )
 
Net (loss) income $ (650 ) $ (2,833 ) $ (794 ) $ 1,401   $ (2,876 ) $ (10,230 )
 
 
Debt - Secured (2):
EQR Ownership (3) $ 332,765 $ 161,981 $ 61,260 $ 218,087 $ 774,093 $ 109,958
Noncontrolling Ownership   -     -     -     83,957     83,957     329,874  
 
Total (at 100%) $ 332,765   $ 161,981   $ 61,260   $ 302,044   $ 858,050   $ 439,832  
(1)   Project and unit counts exclude all uncompleted development projects until those projects are substantially completed. See the Consolidated Development Projects schedule for more detail.
 
(2) All debt is non-recourse to the Company with the exception of $42.2 million in mortgage debt on various development projects. In addition, $66.0 million in mortgage debt on one development project will become recourse to the Company upon completion of that project.
 
(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.

Equity Residential
Consolidated Development Projects as of June 30, 2009
(Amounts in thousands except for project and unit amounts)
                     
Total Book
Value Not
Placed in
Total
Capital 		Total
Book Value 		Estimated
Completion 		Estimated
Stabilization
No. of Total Percentage Percentage Percentage
Projects Location Units Cost (1) to Date Service Debt Completed   Leased Occupied Date Date
 
Projects Under Development - Wholly Owned:
70 Greene (a.k.a. 77 Hudson) Jersey City, NJ 480 $ 269,958 $ 244,591 $ 244,591 $ - 93 % 26 % 15 % Q4 2009 Q1 2011
Reserve at Town Center II Mill Creek, WA 100 24,464 15,090 15,090 - 64 % - - Q1 2010 Q3 2010
Redmond Way Redmond, WA 250 84,382 37,097 37,097 - 35 % - - Q1 2011 Q1 2012
 
Projects Under Development - Wholly Owned 830 378,804 296,778 296,778 -
 
Projects Under Development - Partially Owned:
Montclair Metro Montclair, NJ 163 48,730 40,471 40,471 23,070 89 % - - Q3 2009 Q1 2010
Red Road Commons South Miami, FL 404 128,816 119,329 119,329 63,662 96 % 54 % 12 % Q1 2010 Q3 2011
111 Lawrence Street Brooklyn, NY 492 283,968 169,202 169,202 48,272 66 % - - Q2 2010 Q3 2011
Westgate Pasadena, CA 480 170,558 99,818 99,818 163,160 (2 ) 48 % - - Q2 2011 Q2 2012
 
Projects Under Development - Partially Owned 1,539 632,072 428,820 428,820 298,164
         
Projects Under Development 2,369 1,010,876 725,598 725,598 298,164

(3

)

 

 
Land Held for Development N/A - 239,377 239,377 34,601
 
Land/Projects Held for and/or Under Development 2,369 1,010,876 964,975 964,975 332,765
 
Completed Not Stabilized - Wholly Owned (4):
Crowntree Lakes Orlando, FL 352 56,628 56,628 - - 98 % 93 % Completed Q3 2009
Mosaic at Metro Hyattsville, MD 260 60,383 59,560 - 41,499 70 % 60 % Completed Q1 2010
Third Square (a.k.a. 303 Third Street) (5) Cambridge, MA 482 255,625 254,587 - 172,235 67 % 55 % Completed Q2 2010
Reunion at Redmond Ridge Redmond, WA 321 53,175 53,150 - - 38 % 36 % Completed Q3 2010
 
Projects Completed Not Stabilized - Wholly Owned 1,415 425,811 423,925 - 213,734
 
Completed Not Stabilized - Partially Owned (4):
1401 South State (a.k.a. City Lofts) Chicago, IL 278 69,952 68,438 - 52,124 87 % 74 % Completed Q4 2009
Veridian (a.k.a. Silver Spring) Silver Spring, MD 457 148,705 147,748 - 109,857 76 % 54 % Completed Q3 2010
 
Projects Completed Not Stabilized - Partially Owned 735 218,657 216,186 - 161,981
         
Projects Completed Not Stabilized 2,150 644,468 640,111 - 375,715
 
Completed and Stabilized During the Quarter - Wholly Owned:
Highland Glen II Westwood, MA 102 19,888 19,868 - - 99 % 97 % Completed Stabilized
West End Apartments (a.k.a. Emerson/CRP II) Boston, MA 310 163,489 163,432 - - 98 % 96 % Completed Stabilized
 
Projects Completed and Stabilized During the Quarter - Wholly Owned 412 183,377 183,300 - -
         
Projects Completed and Stabilized During the Quarter 412 183,377 183,300 - -
 
Total Projects 4,931 $ 1,838,721 $ 1,788,386 $ 964,975 $ 708,480
 

 

 

NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS

Total Capital Cost (1)

Q2 2009 NOI

Projects Under Development $ 1,010,876 $ (290 )
Completed Not Stabilized 644,468 1,521
Completed and Stabilized During the Quarter 183,377   1,881  
Total Development NOI Contribution $ 1,838,721   $ 3,112  
(1) Total capital cost represents estimated development cost for projects under development and all capitalized costs incurred to date plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP.
 
(2) Debt is primarily tax-exempt bonds that are entirely outstanding with $72.4 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, 2009.
 
(3) Of the approximately $285.3 million of capital cost remaining to be funded at 6/30/09 for projects under development, $203.3 million will be funded by fully committed third party bank loans and the remaining $82.0 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) Third Square - Both the percentage leased and percentage occupied reflect the full 482 units included in phases I & II. Phase I is 94% leased and 83% occupied. Phase II is 26% leased and 11% occupied. The partner's interest was acquired during the second quarter of 2009 for $4.8 million and as a result the project is now wholly owned.

Equity Residential
Maintenance Expenses and Capitalized Improvements to Real Estate
For the Six Months Ended June 30, 2009
(Amounts in thousands except for unit and per unit amounts)
                             
 
 
Maintenance Expenses Capitalized Improvements to Real Estate Total Expenditures
 
Building
Improvements
(5)
Total
Units (1) 		Avg.
Per Unit 		Avg.
Per Unit 		Avg.
Per Unit 		Replacements
(4) 		Avg.
Per Unit 		Avg.
Per Unit 		Avg.
Per Unit 		Grand Total Avg.
Per Unit
Expense (2) Payroll (3) Total Total
 
Established Properties (6) 109,382 $ 42,957 $ 393 $ 38,490 $ 352 $ 81,447 $ 745 $ 16,543 $ 151 $ 17,513 $ 160 $ 34,056 $ 311 (9 ) $ 115,503 $ 1,056
 
New Acquisition Properties (7) 14,348 5,608 398 4,843 344 10,451 742 1,578 112 3,806 271 5,384 383 15,835 1,125
 
Other (8) 6,007 4,384 3,587 7,971 16,853 2,827 19,680 27,651
 
Total 129,737 $ 52,949 $ 46,920 $ 99,869 $ 34,974 $ 24,146 $ 59,120 $ 158,989
(1)   Total Units - Excludes 9,560 unconsolidated units and 4,559 military housing (fee managed) units, for which maintenance expenses and capitalized improvements to real estate are self-funded and do not consolidate into the Company's results.
 
(2) Maintenance Expenses - Includes general maintenance costs, unit turnover costs including interior painting, regularly scheduled landscaping and tree trimming costs, security, exterminating, fire protection, snow and ice removal, elevator repairs and other miscellaneous building repair costs.
 
(3) Maintenance Payroll - Includes employee costs for maintenance, cleaning, housekeeping and landscaping.
 
(4) Replacements - Includes new expenditures inside the units such as appliances, mechanical equipment, fixtures and flooring, including carpeting.
 
(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) Established Properties - Wholly Owned Properties acquired prior to January 1, 2007.
 
(7) New Acquisition Properties - Wholly Owned Properties acquired during 2007, 2008 and 2009. Per unit amounts are based on a weighted average of 14,074 units.
 
(8) Other - Primarily includes properties either partially owned or sold during the period, commercial space and corporate housing. Also includes $15.4 million included in replacements spent on various assets related to major renovations and repositioning of these assets.
 
(9) For 2009, the Company estimates an annual stabilized run rate of approximately $925 per unit of capital expenditures for its established properties.

Equity Residential
Discontinued Operations
(Amounts in thousands)
         
 
Six Months Ended Quarter Ended
June 30, June 30,
2009 2008 2009 2008
 
REVENUES
Rental income $ 17,832   $ 60,482   $ 6,408   $ 27,599  
 
Total revenues 17,832   60,482   6,408   27,599  
 
EXPENSES (1)
Property and maintenance 8,036 19,312 3,244 8,544
Real estate taxes and insurance 2,284 7,936 767 3,801
Property management - (62 ) - 3
Depreciation 3,641 14,921 1,438 6,782
General and administrative 25   17   20   14  
 
Total expenses 13,986   42,124   5,469   19,144  
 
Discontinued operating income 3,846 18,358 939 8,455
 
Interest and other income 10 140 3 148
Interest (2):
Expense incurred, net (310 ) (1,014 ) (77 ) (496 )
Amortization of deferred financing costs (32 ) (2 ) - (1 )
Income and other tax (expense) benefit (65 ) 657   (18 ) 459  
 
Discontinued operations 3,449 18,139 847 8,565
Net gain on sales of discontinued operations 145,798   214,797   83,927   92,280  
 
Discontinued operations, net $ 149,247   $ 232,936   $ 84,774   $ 100,845  
(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 Midpoint Reconciliations and Non-Comparable Items
(Amounts in thousands except per share data)
(All per share data is diluted)
           
 
FFO Midpoint Reconciliations
 
FFO Reconciliations
Guidance Midpoint Q2
2009 to Actual Q2 2009
Amounts Per Share
 
Guidance midpoint Q2 2009 FFO - Diluted (1) (2) $ 158,912 $ 0.548
Property NOI (including reserve adjustments) 10,780 0.037
Interest and other income 4,014 0.014
Impairment (11,124 ) (0.038 )
Interest expense 4,003 0.014
Other 2,066   0.007  
 
Actual Q2 2009 FFO - Diluted (1) (2) $ 168,651   $ 0.582  
                           
 
 
Non-Comparable Items (3)
 
Six Months Ended June 30, Quarter Ended June 30,
2009 2008 Variance 2009 2008 Variance
 
Impairment $ (11,124 ) $ - $ (11,124 ) $ (11,124 ) $ - $ (11,124 )
Debt extinguishment gains (interest and other income) 2,020 - 2,020