-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LwREOByDqrtT7kG2LIFfwioO8LvLAtW1fdVYEOpvv5IC5CPo1Bz4mX+pQLzu+X0K CQuzI+FJ50ccL48jwx96Hg== 0001104659-06-000519.txt : 20060105 0001104659-06-000519.hdr.sgml : 20060105 20060105101704 ACCESSION NUMBER: 0001104659-06-000519 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060105 ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060105 DATE AS OF CHANGE: 20060105 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EQUITY RESIDENTIAL CENTRAL INDEX KEY: 0000906107 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 363877868 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12252 FILM NUMBER: 06510844 BUSINESS ADDRESS: STREET 1: EQUITY RESIDENTIAL STREET 2: 2 N RIVERSIDE PLAZA, STE 400 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129281178 MAIL ADDRESS: STREET 1: TWO N RIVERSIDE PLAZA STREET 2: SUITE 450 CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: EQUITY RESIDENTIAL PROPERTIES TRUST DATE OF NAME CHANGE: 19930524 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ERP OPERATING LTD PARTNERSHIP CENTRAL INDEX KEY: 0000931182 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 363894853 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24920 FILM NUMBER: 06510845 BUSINESS ADDRESS: STREET 1: TWO N RIVERSIDE PLZ STREET 2: STE 400 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3124741300 MAIL ADDRESS: STREET 1: TWO N RIVERSIDE PLAZA STREET 2: SUITE 450 CITY: CHICAGO STATE: IL ZIP: 60606 8-K 1 a05-22624_18k.htm CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): January 5, 2006

 

EQUITY RESIDENTIAL

(Exact Name of Registrant as Specified in its Charter)

 

Maryland

 

1-12252

 

13-3675988

(State or other jurisdiction
of incorporation or organization)

 

(Commission
File Number)

 

(I.R.S. Employer
Identification No.)

 

ERP OPERATING LIMITED PARTNERSHIP

(Exact Name of Registrant as Specified in its Charter)

 

Illinois

 

0-24920

 

36-3894853

(State or other jurisdiction
of incorporation or organization)

 

(Commission
File Number)

 

(I.R.S. Employer
Identification No.)

 

 

 

 

 

Two North Riverside Plaza, Suite 400
Chicago, Illinois

 

60606

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (312) 474-1300

 

Not applicable
(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 


 

Item 9.01. Financial Statements and Exhibits.

 

(a), (b) Throughout 2005, Equity Residential, through its operating partnership, ERP Operating Limited Partnership (collectively with Equity Residential, the “Company”), acquired various real estate properties, including the Company’s previously announced acquisition on November 3, 2005 of three high-rise apartment towers, known as Trump Place, located at 140, 160 and 180 Riverside Boulevard on the Upper West Side of Manhattan.  The Company is hereby filing certain financial information relating to Trump Place (see Item 9.01(d) below) indicated under Rule 3-14 and Article 11 of Regulation S-X.

 

(d)           Exhibits:

 

Exhibit

 

 

 

Number

 

 

Exhibit

23.1

 

Consents of Ernst & Young LLP

 

 

 

 

99.1

 

(a)

Financial Statements of Real Estate Operations Acquired

 

 

 

 

 

 

Report of Independent Registered Public Accounting Firm

 

 

 

Combined Statements of Revenue and Certain Expenses

 

 

 

Notes to Combined Statements of Revenue and Certain Expenses

 

 

 

 

 

 

(b)

Pro Forma Financial Information

 

 

 

 

 

 

 

Equity Residential

 

 

 

 

 

 

 

Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2005 (unaudited)

 

 

 

Pro Forma Condensed Consolidated Statements of Operations for the nine-month period ended September 30, 2005 (unaudited) and for the year ended December 31, 2004 (unaudited)

 

 

 

 

 

 

 

ERP Operating Limited Partnership

 

 

 

 

 

 

 

Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2005 (unaudited)

 

 

 

Pro Forma Condensed Consolidated Statements of Operations for the nine-month period ended September 30, 2005 (unaudited) and for the year ended December 31, 2004 (unaudited)

 

2


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

EQUITY RESIDENTIAL

 

 

Date: January 5, 2006

By:

/s/ Donna Brandin

 

 

 

 

Name:

Donna Brandin

 

 

 

 

Its:

Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

Date: January 5, 2006

By:

/s/ Mark L. Wetzel

 

 

 

 

Name:

Mark L. Wetzel

 

 

 

 

Its:

Senior Vice President and Chief Accounting Officer

 

 

 

 

ERP OPERATING LIMITED PARTNERSHIP

 

BY:

EQUITY RESIDENTIAL,

 

 

ITS GENERAL PARTNER

 

 

Date: January 5, 2006

By:

/s/ Donna Brandin

 

 

 

 

Name:

Donna Brandin

 

 

 

 

Its:

Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

Date: January 5, 2006

By:

/s/ Mark L. Wetzel

 

 

 

 

Name:

Mark L. Wetzel

 

 

 

 

Its:

Senior Vice President and Chief Accounting Officer

 

3

 EX-23.1 2 a05-22624_1ex23d1.htm CONSENTS OF EXPERTS AND COUNSEL

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the incorporation by reference in the Registration Statements (Forms S-3 No. 333-45533, No. 333-39289, No. 333-100631, No. 333-63176, No. 333-80835, No. 333-72961, No. 333-12983, No. 333-06873, No. 33-97680 and No. 33-84974; Forms S-8 No. 333-06869, No. 333-107244, No. 333-83403, No. 333-102609, No. 333-66257 and No. 333-88237; and Forms S-4 No. 333-44576 and No. 333-35873) of Equity Residential and in the related Prospectuses of our report dated December 15, 2005, with respect to the Combined Statement of Revenue and Certain Expenses of Trump Place included in this Current Report on Form 8-K.

 

 

 

/s/ Ernst & Young LLP

 

 

Ernst & Young LLP

 

 

Chicago, Illinois

January 4, 2006

 

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the incorporation by reference in the Registration Statements (Form S-3 No. 333-105850 and Forms S-4 No. 333-44576 and No. 333-36053) of ERP Operating Limited Partnership and in the related Prospectuses of our report dated December 15, 2005, with respect to the Combined Statement of Revenue and Certain Expenses of Trump Place included in this Current Report on
Form 8-K.

 

 

 

/s/ Ernst & Young LLP

 

 

Ernst & Young LLP

 

 

Chicago, Illinois

 

January 4, 2006

 

 

4

 EX-99.1 3 a05-22624_1ex99d1.htm EXHIBIT 99

Exhibit 99.1

 

Report of Independent Registered Public Accounting Firm

 

The Board of Trustees and Shareholders
Equity Residential

 

The Partners

ERP Operating Limited Partnership

 

We have audited the accompanying combined statement of revenue and certain expenses of Trump Place for the year ended December 31, 2004. This combined statement is the responsibility of the management of Trump Place (the “Property”). Our responsibility is to express an opinion on this combined statement based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined statement is free of material misstatement. We were not engaged to perform an audit of the Property’s internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Property’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined financial statement, assessing the accounting principles used and significant estimates made by management, and evaluating the overall combined financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

The accompanying combined statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in a Current Report on Form 8-K of Equity Residential and ERP Operating Limited Partnership, as described in Note 1, and is not intended to be a complete presentation of the Property’s revenue and expenses.

 

In our opinion, the combined statement referred to above presents fairly, in all material respects, the revenue and certain expenses of Trump Place for the year ended December 31, 2004, in conformity with U.S. generally accepted accounting principles.

 

 

/s/ Ernst & Young LLP

 

 

     Ernst & Young LLP

 

Chicago, Illinois

December 15, 2005

 

5


 

TRUMP PLACE

Combined Statements of Revenue and Certain Expenses

 

 

 

Nine-Month

 

 

 

 

 

Period Ended

 

Year Ended

 

 

 

September 30, 2005

 

December 31, 2004

 

 

 

(Unaudited)

 

 

 

Rental income

 

$

33,605,000

 

$

39,890,800

 

Other revenue

 

1,532,116

 

2,040,053

 

Total revenue

 

35,137,116

 

41,930,853

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

Operating

 

6,573,958

 

8,653,441

 

Utilities

 

1,708,867

 

2,279,375

 

Repairs and maintenance

 

927,463

 

796,489

 

Real estate taxes

 

973,840

 

1,400,730

 

Insurance

 

961,316

 

889,816

 

Management fee

 

337,500

 

412,500

 

Total expenses

 

11,482,944

 

14,432,351

 

Revenue in excess of certain expenses

 

$

23,654,172

 

$

27,498,502

 

 

See accompanying notes.

 

6


 

TRUMP PLACE

Notes to Combined Statements of Revenue and Certain Expenses

 

1. Basis of Presentation

 

On November 3, 2005, ERP Operating Limited Partnership (collectively with Equity Residential, its general partner, the “Company”) acquired three high-rise apartment towers in New York, New York known as Trump Place.  Due to common ownership and management of the apartment towers, these statements are shown on a combined basis.

 

The combined statements of revenue and certain expenses relate to the operations of Trump Place and were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, including Rule 3-14 of Regulation S-X. Accordingly, the accompanying combined statements of revenue and certain expenses have been prepared using the accrual method of accounting, and certain expenses such as depreciation, amortization, income taxes, mortgage interest expense and entity expenses are not reflected in the combined statements of revenue and certain expenses, as required by Rule 3-14 of Regulation S-X of the Securities and Exchange Commission. Consequently, the combined statements of revenue and certain expenses for the periods presented are not representative of the actual operations for the periods presented, as certain revenues and expenses which may not be in the proposed future operations of Trump Place have been excluded in accordance with Rule 3-14 of Regulation S-X.

 

The accompanying unaudited interim combined statement of revenue and certain expenses has been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and was prepared on the same basis as the combined statement of revenue and certain expenses for the year ended December 31, 2004. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of the information for this interim period have been made. The revenue in excess of certain expenses for such interim period is not necessarily indicative of the excess of revenue over certain expenses for the full year.

 

2. Summary of Significant Accounting Policies

 

Revenue Recognition

 

The apartments are leased under operating leases with terms of generally two years or less. Rental income is recognized as it is earned, which is not materially different than on a straight-line basis.

 

Repairs and Maintenance

 

Repairs and maintenance costs are expensed as incurred, while significant improvements, renovations and replacements are capitalized.

 

Estimates

 

The preparation of the combined statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Advertising Costs

 

All advertising costs are expensed as incurred and reported on the statement of revenue and certain expenses within the line item “Operating Expenses”. For the year ended December 31, 2004 and the nine month period ended September 30, 2005, advertising expenses were approximately $464,543 and $170,928, respectively.

 

7


 

TRUMP PLACE

Notes to Combined Statements of Revenue and Certain Expenses (Continued)

 

3. Related Party Transactions

 

Property management fees in the amount of $412,500 and $337,500 were charged by a related party during 2004 and the nine month period ended September 30, 2005, respectively.

 

8


 

Pro Forma Condensed Consolidated Balance Sheets

 

The accompanying unaudited Pro Forma Condensed Consolidated Balance Sheets of Equity Residential and ERP Operating Limited Partnership (collectively, the “Company”) are presented as if Trump Place had been acquired on September 30, 2005.  These Pro Forma Condensed Consolidated Balance Sheets should be read in conjunction with the Pro Forma Condensed Consolidated Statements of Operations for the nine-month period ended September 30, 2005 and for the year ended December 31, 2004 and the historical consolidated financial statements and notes thereto of the Company reported on Forms 10-Q for the nine-month period ended September 30, 2005 and on Forms 10-K for the year ended December 31, 2004, as updated on Forms 8-K dated December 2, 2005.  In management’s opinion, all adjustments necessary to reflect the acquisition of Trump Place have been made.  The following Pro Forma Condensed Consolidated Balance Sheets are not necessarily indicative of what the actual financial position would have been assuming the above transaction had been consummated at September 30, 2005, nor do they purport to represent the future financial position of the Company.

 

9


 

Pro Forma Condensed Consolidated Statements of Operations

 

The accompanying unaudited Pro Forma Condensed Consolidated Statements of Operations for the nine-month period ended September 30, 2005 and for the year ended December 31, 2004 of Equity Residential and ERP Operating Limited Partnership (collectively, the “Company”) are presented as if Trump Place had been acquired on January 1, 2004.

 

These Pro Forma Condensed Consolidated Statements of Operations should be read in conjunction with the historical consolidated financial statements included in the Company’s previous filings with the Securities and Exchange Commission.

 

The unaudited Pro Forma Condensed Consolidated Statements of Operations are not necessarily indicative of what the actual results of operations would have been for the nine-month period ended September 30, 2005 or for the year ended December 31, 2004 assuming the above transaction had been consummated on January 1, 2004, nor do they purport to represent the future results of operations of the Company.

 

10


 

EQUITY RESIDENTIAL

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2005

(Amounts in thousands)

(Unaudited)

 

 

 

HISTORICAL

 

PRO FORMA

 

PRO FORMA

 

 

 

AMOUNTS (A)

 

ADJUSTMENTS (B)

 

AMOUNTS

 

ASSETS

 

 

 

 

 

 

 

Investment in real estate

 

 

 

 

 

 

 

Land

 

$

2,283,157

 

$

388,441

 

$

2,671,598

 

Depreciable property

 

12,670,716

 

422,737

 

13,093,453

 

Construction in progress (including land)

 

330,965

 

—

 

330,965

 

Investment in real estate

 

15,284,838

 

811,178

 

16,096,016

 

Accumulated depreciation

 

(2,805,552

)

—

 

(2,805,552

)

Investment in real estate, net

 

12,479,286

 

811,178

 

13,290,464

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

306,933

 

—

 

306,933

 

Investments in unconsolidated entities

 

11,390

 

—

 

11,390

 

Rents receivable

 

940

 

—

 

940

 

Deposits – restricted

 

305,366

 

—

 

305,366

 

Escrow deposits – mortgage

 

36,389

 

—

 

36,389

 

Deferred financing costs, net

 

40,041

 

—

 

40,041

 

Goodwill, net

 

30,000

 

—

 

30,000

 

Other assets

 

101,484

 

—

 

101,484

 

Total assets

 

$

13,311,829

 

$

811,178

 

$

14,123,007

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Mortgage notes payable

 

$

3,323,932

 

$

—

 

$

3,323,932

 

Notes, net

 

3,443,588

 

—

 

3,443,588

 

Lines of credit

 

—

 

811,178

 

811,178

 

Accounts payable and accrued expenses

 

124,908

 

—

 

124,908

 

Accrued interest payable

 

64,201

 

—

 

64,201

 

Rents received in advance and other liabilities

 

490,894

 

—

 

490,894

 

Security deposits

 

49,977

 

—

 

49,977

 

Distributions payable

 

143,572

 

—

 

143,572

 

Total liabilities

 

7,641,072

 

811,178

 

8,452,250

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Total Minority Interests

 

410,937

 

—

 

410,937

 

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

5,259,820

 

—

 

5,259,820

 

Total liabilities and shareholders’ equity

 

$

13,311,829

 

$

811,178

 

$

14,123,007

 

 

See accompanying notes.

 

11


 

EQUITY RESIDENTIAL

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (Continued)

SEPTEMBER 30, 2005

(Unaudited)

 

Notes to Pro Forma Condensed Consolidated Balance Sheet

 

(A)      Represents the consolidated balance sheet of Equity Residential as of September 30, 2005, as contained in the historical unaudited consolidated financial statements and notes thereto filed on Form 10-Q.

 

(B)        Represents the acquisition of Trump Place for a total purchase price of $808.8 million plus closing costs of $2.4 million. Although this Pro Forma Condensed Consolidated Balance Sheet assumes the acquisition of Trump Place would be financed initially by the revolving lines of credit, the Company’s near-term intention is to finance the acquisition through the use of tax-deferred 1031 exchange proceeds from dispositions.

 

12


 

EQUITY RESIDENTIAL

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2005

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

HISTORICAL

 

PRO FORMA

 

PRO FORMA

 

 

 

AMOUNTS (A)

 

ADJUSTMENTS (B)

 

AMOUNTS

 

REVENUES

 

 

 

 

 

 

 

Rental income

 

$

1,453,829

 

$

35,137

 

$

1,488,966

 

Fee and asset management

 

8,456

 

—

 

8,456

 

Total revenues

 

1,462,285

 

35,137

 

1,497,422

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

Property and maintenance

 

411,187

 

9,210

 

420,397

 

Real estate taxes and insurance

 

162,711

 

1,935

 

164,646

 

Property management

 

63,254

 

338

 

63,592

 

Fee and asset management

 

7,518

 

—

 

7,518

 

Depreciation

 

378,123

 

10,939

 

389,062

 

General and administrative

 

45,012

 

—

 

45,012

 

 

 

 

 

 

 

 

 

Total expenses

 

1,067,805

 

22,422

 

1,090,227

 

 

 

 

 

 

 

 

 

Operating income

 

394,480

 

12,715

 

407,195

 

Interest and other income

 

65,471

 

—

 

65,471

 

Interest:

 

 

 

 

 

 

 

Expense incurred, net

 

(281,762

)

(21,385

)

(303,147

)

Amortization of deferred financing costs

 

(4,996

)

—

 

(4,996

)

Income before allocation to Minority Interests, loss from investments in unconsolidated entities, net gain on sales of unconsolidated entities and discontinued operations

 

173,193

 

(8,670

)

164,523

 

Allocation to Minority Interests:

 

 

 

 

 

 

 

Operating Partnership

 

(43,060

)

587

 

(42,473

)

Preference Interests

 

(6,431

)

—

 

(6,431

)

Junior Preference Units

 

(11

)

—

 

(11

)

Partially Owned Properties

 

672

 

—

 

672

 

Premium on redemption of Preference Interests

 

(4,134

)

—

 

(4,134

)

Loss from investments in unconsolidated entities

 

(450

)

—

 

(450

)

Net gain on sales of unconsolidated entities

 

124

 

—

 

124

 

Income from continuing operations

 

119,903

 

(8,083

)

111,820

 

Preferred distributions

 

(39,004

)

—

 

(39,004

)

Premium on redemption of Preferred Shares

 

(4,316

)

—

 

(4,316

)

Income from continuing operations available to Common Shares

 

$

76,583

 

$

(8,083

)

$

68,500

 

 

 

 

 

 

 

 

 

Earnings per share - basic:

 

 

 

 

 

 

 

Income from continuing operations available to Common Shares

 

$

0.39

 

$

(0.03

)

$

0.36

 

Weighted average Common Shares outstanding

 

285,331

 

285,331

 

285,331

 

 

 

 

 

 

 

 

 

Earnings per share - diluted:

 

 

 

 

 

 

 

Income from continuing operations available to Common Shares

 

$

0.39

 

$

(0.03

)

$

0.36

 

Weighted average Common Shares outstanding

 

310,211

 

310,211

 

310,211

 

 

See accompanying notes.

 

13


 

EQUITY RESIDENTIAL

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2004

(Amounts in thousands except per share data)

(Unaudited)

 

 

 

HISTORICAL

 

PRO FORMA

 

PRO FORMA

 

 

 

AMOUNTS (A)

 

ADJUSTMENTS (C)

 

AMOUNTS

 

REVENUES

 

 

 

 

 

 

 

Rental income

 

$

1,774,509

 

$

41,931

 

$

1,816,440

 

Fee and asset management

 

11,796

 

—

 

11,796

 

Total revenues

 

1,786,305

 

41,931

 

1,828,236

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

Property and maintenance

 

486,298

 

11,729

 

498,027

 

Real estate taxes and insurance

 

209,207

 

2,291

 

211,498

 

Property management

 

76,823

 

412

 

77,235

 

Fee and asset management

 

8,777

 

—

 

8,777

 

Depreciation

 

453,931

 

22,429

 

476,360

 

General and administrative

 

50,013

 

—

 

50,013

 

Total expenses

 

1,285,049

 

36,861

 

1,321,910

 

 

 

 

 

 

 

 

 

Operating income

 

501,256

 

5,070

 

506,326

 

Interest and other income

 

8,958

 

—

 

8,958

 

Interest:

 

 

 

 

 

 

 

Expense incurred, net

 

(328,538

)

(13,995

)

(342,533

)

Amortization of deferred financing costs

 

(6,072

)

—

 

(6,072

)

 

 

 

 

 

 

 

 

Income before allocation to Minority Interests, loss from investments in unconsolidated entities, net gain on sales of unconsolidated entities and discontinued operations

 

175,604

 

(8,925

)

166,679

 

Allocation to Minority Interests:

 

 

 

 

 

 

 

Operating Partnership

 

(31,228

)

620

 

(30,608

)

Preference Interests

 

(19,420

)

—

 

(19,420

)

Junior Preference Units

 

(70

)

—

 

(70

)

Partially Owned Properties

 

1,787

 

—

 

1,787

 

Premium on redemption of Preference Interests

 

(1,117

)

—

 

(1,117

)

Loss from investments in unconsolidated entities

 

(7,325

)

—

 

(7,325

)

Net gain on sales of unconsolidated entities

 

4,593

 

—

 

4,593

 

Income from continuing operations

 

122,824

 

(8,305

)

114,519

 

Preferred distributions

 

(53,746

)

—

 

(53,746

)

Income from continuing operations available to Common Shares

 

$

69,078

 

$

(8,305

)

$

60,773

 

 

 

 

 

 

 

 

 

Earnings per share - basic:

 

 

 

 

 

 

 

Income from continuing operations available to Common Shares

 

$

0.33

 

$

(0.03

)

$

0.30

 

Weighted average Common Shares outstanding

 

279,744

 

279,744

 

279,744

 

 

 

 

 

 

 

 

 

Earnings per share - diluted:

 

 

 

 

 

 

 

Income from continuing operations available to Common Shares

 

$

0.33

 

$

(0.03

)

$

0.30

 

Weighted average Common Shares outstanding

 

303,871

 

303,871

 

303,871

 

 

See accompanying notes.

 

14


 

EQUITY RESIDENTIAL

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)

NINE MONTHS ENDED SEPTEMBER 30, 2005

YEAR ENDED DECEMBER 31, 2004

(Unaudited)

 

Notes to Pro Forma Condensed Consolidated Statements of Operations

 

(A)           Represents the historical consolidated statements of operations of Equity Residential as contained in the historical consolidated financial statements included in previous filings with the Securities and Exchange Commission.

 

(B)             Represents the pro forma revenues and expenses for the nine months ended September 30, 2005 attributable to the acquisition of Trump Place as if the acquisition had occurred on January 1, 2004.  Interest expense incurred of $21.4 million is attributable to draws under the lines of credit calculated using a weighted average interest rate of 3.515%.  Although these Pro Forma Condensed Consolidated Statements of Operations assume the acquisition of Trump Place would be financed initially by the revolving lines of credit, the Company’s near-term intention is to finance the acquisition through the use of tax-deferred 1031 exchange proceeds from dispositions.  Preliminary depreciation expense of $10.9 million relates to the aggregate purchase price of $811.2 million less a preliminary allocation to land of $388.4 million and is calculated as follows (amounts in thousands except for depreciable lives):

 

 

 

 

 

 

 

Nine Months

 

 

 

 

 

Weighted Average

 

Ended 9/30/05

 

Asset

 

Basis

 

Depreciable Life

 

Expense

 

Building

 

$

410,654

 

30 Years

 

$

10,267

 

F,F&E

 

3,995

 

5 Years

 

599

 

In-Place Leases – Residential

 

7,844

 

9 Months

 

—

 

In-Place Leases – Retail

 

244

 

30 Months

 

73

 

 

 

 

 

 

 

 

 

Total

 

$

422,737

 

 

 

$

10,939

 

 

(C)             Represents the pro forma revenues and expenses for the year ended December 31, 2004 attributable to the acquisition of Trump Place as if the acquisition had occurred on January 1, 2004.  Interest expense incurred of $14.0 million is attributable to draws under the lines of credit calculated using a weighted average interest rate of 1.7253%.  Although these Pro Forma Condensed Consolidated Statements of Operations assume the acquisition of Trump Place would be financed initially by the revolving lines of credit, the Company’s near-term intention is to finance the acquisition through the use of tax-deferred 1031 exchange proceeds from dispositions.  Preliminary depreciation expense of $22.4 million relates to the aggregate purchase price of $811.2 million less a preliminary allocation to land of $388.4 million and is calculated as follows (amounts in thousands except for depreciable lives):

 

 

 

 

 

 

 

Year

 

 

 

 

 

Weighted Average

 

Ended 12/31/04

 

Asset

 

Basis

 

Depreciable Life

 

Expense

 

Building

 

$

410,654

 

30 Years

 

$

13,688

 

F,F&E

 

3,995

 

5 Years

 

799

 

In-Place Leases – Residential

 

7,844

 

9 Months

 

7,844

 

In-Place Leases – Retail

 

244

 

30 Months

 

98

 

 

 

 

 

 

 

 

 

Total

 

$

422,737

 

 

 

$

22,429

 

 

15


 

ERP OPERATING LIMITED PARTNERSHIP

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2005

(Amounts in thousands)

(Unaudited)

 

 

 

HISTORICAL

 

PRO FORMA

 

PRO FORMA

 

 

 

AMOUNTS (A)

 

ADJUSTMENTS (B)

 

AMOUNTS

 

ASSETS

 

 

 

 

 

 

 

Investment in real estate

 

 

 

 

 

 

 

Land

 

$

2,283,157

 

$

388,441

 

$

2,671,598

 

Depreciable property

 

12,670,716

 

422,737

 

13,093,453

 

Construction in progress (including land)

 

330,965

 

—

 

330,965

 

Investment in real estate

 

15,284,838

 

811,178

 

16,096,016

 

Accumulated depreciation

 

(2,805,552

)

—

 

(2,805,552

)

Investment in real estate, net

 

12,479,286

 

811,178

 

13,290,464

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

306,933

 

—

 

306,933

 

Investments in unconsolidated entities

 

11,390

 

—

 

11,390

 

Rents receivable

 

940

 

—

 

940

 

Deposits – restricted

 

305,366

 

—

 

305,366

 

Escrow deposits – mortgage

 

36,389

 

—

 

36,389

 

Deferred financing costs, net

 

40,041

 

—

 

40,041

 

Goodwill, net

 

30,000

 

—

 

30,000

 

Other assets

 

101,484

 

—

 

101,484

 

Total assets

 

$

13,311,829

 

$

811,178

 

$

14,123,007

 

 

 

 

 

 

 

 

 

LIABILITIES AND PARTNERS’ CAPITAL

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Mortgage notes payable

 

$

3,323,932

 

$

—

 

$

3,323,932

 

Notes, net

 

3,443,588

 

—

 

3,443,588

 

Lines of credit

 

—

 

811,178

 

811,178

 

Accounts payable and accrued expenses

 

124,908

 

—

 

124,908

 

Accrued interest payable

 

64,201

 

—

 

64,201

 

Rents received in advance and other liabilities

 

490,894

 

—

 

490,894

 

Security deposits

 

49,977

 

—

 

49,977

 

Distributions payable

 

143,572

 

—

 

143,572

 

Total liabilities

 

7,641,072

 

811,178

 

8,452,250

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Total Minority Interests

 

10,716

 

—

 

10,716

 

Total partners’ capital

 

5,660,041

 

—

 

5,660,041

 

Total liabilities and partners’ capital

 

$

13,311,829

 

$

811,178

 

$

14,123,007

 

 

See accompanying notes.

 

16


 

ERP OPERATING LIMITED PARTNERSHIP

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (Continued)

SEPTEMBER 30, 2005

(Unaudited)

 

Notes to Pro Forma Condensed Consolidated Balance Sheet

 

(A)           Represents the consolidated balance sheet of ERP Operating Limited Partnership as of September 30, 2005, as contained in the unaudited historical consolidated financial statements and notes thereto filed on Form 10-Q.

 

(B)             Represents the acquisition of Trump Place for a total purchase price of $808.8 million plus closing costs of $2.4 million.  Although this Pro Forma Condensed Consolidated Balance Sheet assumes the acquisition of Trump Place would be financed initially by the revolving lines of credit, the Company’s near-term intention is to finance the acquisition through the use of tax-deferred 1031 exchange proceeds from dispositions.

 

17


 

ERP OPERATING LIMITED PARTNERSHIP

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2005

(Amounts in thousands except per OP Unit data)

(Unaudited)

 

 

 

HISTORICAL

 

PRO FORMA

 

PRO FORMA

 

 

 

AMOUNTS (A)

 

ADJUSTMENTS (B)

 

AMOUNTS

 

REVENUES

 

 

 

 

 

 

 

Rental income

 

$

1,453,829

 

$

35,137

 

$

1,488,966

 

Fee and asset management

 

8,456

 

—

 

8,456

 

 

 

 

 

 

 

 

 

Total revenues

 

1,462,285

 

35,137

 

1,497,422

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

Property and maintenance

 

411,187

 

9,210

 

420,397

 

Real estate taxes and insurance

 

162,711

 

1,935

 

164,646

 

Property management

 

63,254

 

338

 

63,592

 

Fee and asset management

 

7,518

 

—

 

7,518

 

Depreciation

 

378,123

 

10,939

 

389,062

 

General and administrative

 

45,012

 

—

 

45,012

 

 

 

 

 

 

 

 

 

Total expenses

 

1,067,805

 

22,422

 

1,090,227

 

 

 

 

 

 

 

 

 

Operating income

 

394,480

 

12,715

 

407,195

 

Interest and other income

 

65,471

 

—

 

65,471

 

Interest:

 

 

 

 

 

 

 

Expense incurred, net

 

(281,762

)

(21,385

)

(303,147

)

Amortization of deferred financing costs

 

(4,996

)

—

 

(4,996

)

Income before allocation to Minority Interests, loss from investments in unconsolidated entities, net gain on sales of unconsolidated entities and discontinued operations

 

173,193

 

(8,670

)

164,523

 

Allocation to Minority Interests – Partially Owned Properties

 

672

 

—

 

672

 

Loss from investments in unconsolidated entities

 

(450

)

—

 

(450

)

Net gain on sales of unconsolidated entities

 

124

 

—

 

124

 

Income from continuing operations

 

$

173,539

 

$

(8,670

)

$

164,869

 

 

 

 

 

 

 

 

 

ALLOCATION OF INCOME FROM CONTINUING OPERATIONS:

 

 

 

 

 

 

 

Preference Units

 

$

39,004

 

$

—

 

$

39,004

 

Preference Interests

 

$

6,431

 

$

—

 

$

6,431

 

Junior Preference Interests

 

$

11

 

$

—

 

$

11

 

Premium on redemption of Preference Units

 

$

4,316

 

$

—

 

$

4,316

 

Premium on redemption of Preference Interests

 

$

4,134

 

$

—

 

$

4,134

 

Income from continuing operations available to OP Units

 

$

119,643

 

$

(8,670

)

$

110,973

 

 

 

 

 

 

 

 

 

Earnings per OP Unit - basic:

 

 

 

 

 

 

 

Income from continuing operations available to OP Units

 

$

0.39

 

$

(0.03

)

$

0.36

 

Weighted average OP Units outstanding

 

306,171

 

306,171

 

306,171

 

 

 

 

 

 

 

 

 

Earnings per OP Unit - diluted:

 

 

 

 

 

 

 

Income from continuing operations available to OP Units

 

$

0.39

 

$

(0.03

)

$

0.36

 

Weighted average OP Units outstanding

 

310,211

 

310,211

 

310,211

 

 

See accompanying notes.

 

18


 

ERP OPERATING LIMITED PARTNERSHIP

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2004

(Amounts in thousands except per OP Unit data)

(Unaudited)

 

 

 

HISTORICAL

 

PRO FORMA

 

PRO FORMA

 

 

 

AMOUNTS (A)

 

ADJUSTMENTS (C)

 

AMOUNTS

 

REVENUES

 

 

 

 

 

 

 

Rental income

 

$

1,774,509

 

$

41,931

 

$

1,816,440

 

Fee and asset management

 

11,796

 

—

 

11,796

 

Total revenues

 

1,786,305

 

41,931

 

1,828,236

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

Property and maintenance

 

486,298

 

11,729

 

498,027

 

Real estate taxes and insurance

 

209,207

 

2,291

 

211,498

 

Property management

 

76,823

 

412

 

77,235

 

Fee and asset management

 

8,777

 

—

 

8,777

 

Depreciation

 

453,931

 

22,429

 

476,360

 

General and administrative

 

50,013

 

—

 

50,013

 

Total expenses

 

1,285,049

 

36,861

 

1,321,910

 

 

 

 

 

 

 

 

 

Operating income

 

501,256

 

5,070

 

506,326

 

Interest and other income

 

8,958

 

—

 

8,958

 

Interest:

 

 

 

 

 

 

 

Expense incurred, net

 

(328,538

)

(13,995

)

(342,533

)

Amortization of deferred financing costs

 

(6,072

)

—

 

(6,072

)

 

 

 

 

 

 

 

 

Income before allocation to Minority Interests, loss from investments in unconsolidated entities, net gain on sales of unconsolidated entities and discontinued operations

 

175,604

 

(8,925

)

166,679

 

Allocation to Minority Interests – Partially Owned Properties

 

1,787

 

—

 

1,787

 

Loss from investments in unconsolidated entities

 

(7,325

)

—

 

(7,325

)

Net gain on sales of unconsolidated entities

 

4,593

 

—

 

4,593

 

Income from continuing operations

 

$

174,659

 

$

(8,925

)

$

165,734

 

 

 

 

 

 

 

 

 

 

 

 

ALLOCATION OF INCOME FROM CONTINUING OPERATIONS:

 

 

 

 

 

 

 

Preference Units

 

$

53,746

 

$

—

 

$

53,746

 

Preference Interests

 

$

19,420

 

$

—

 

$

19,420

 

Junior Preference Interests

 

$

70

 

$

—

 

$

70

 

Premium on redemption of Preference Units

 

$

—

 

$

—

 

$

—

 

Premium on redemption of Preference Interests

 

$

1,117

 

$

—

 

$

1,117

 

Income from continuing operations available to OP Units

 

$

100,306

 

$

(8,925

)

$

91,381

 

 

 

 

 

 

 

 

 

Earnings per OP Unit - basic:

 

 

 

 

 

 

 

Income from continuing operations available to OP Units

 

$

0.33

 

$

(0.03

)

$

0.30

 

Weighted average OP Units outstanding

 

300,683

 

300,683

 

300,683

 

 

 

 

 

 

 

 

 

Earnings per OP Unit - diluted:

 

 

 

 

 

 

 

Income from continuing operations available to OP Units

 

$

0.33

 

$

(0.03

)

$

0.30

 

Weighted average OP Units outstanding

 

303,871

 

303,871

 

303,871

 

 

See accompanying notes.

 

19


 

ERP OPERATING LIMITED PARTNERSHIP

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)

NINE MONTHS ENDED SEPTEMBER 30, 2005

YEAR ENDED DECEMBER 31, 2004

(Unaudited)

 

Notes to Pro Forma Condensed Consolidated Statements of Operations

 

(A)           Represents the historical consolidated statements of operations of ERP Operating Limited Partnership as contained in the historical consolidated financial statements included in previous filings with the Securities and Exchange Commission.

 

(B)             Represents the pro forma revenues and expenses for the nine months ended September 30, 2005 attributable to the acquisition of Trump Place as if the acquisition had occurred on January 1, 2004.  Interest expense incurred of $21.4 million is attributable to draws under the lines of credit calculated using a weighted average interest rate of 3.515%.  Although these Pro Forma Condensed Consolidated Statements of Operations assume the acquisition of Trump Place would be financed initially by the revolving lines of credit, the Company’s near-term intention is to finance the acquisition through the use of tax-deferred 1031 exchange proceeds from dispositions.  Preliminary depreciation expense of $10.9 million relates to the aggregate purchase price of $811.2 million less a preliminary allocation to land of $388.4 million and is calculated as follows (amounts in thousands except for depreciable lives):

 

 

 

 

 

 

 

Nine Months

 

 

 

 

 

Weighted Average

 

Ended 9/30/05

 

Asset

 

Basis

 

Depreciable Life

 

Expense

 

Building

 

$

410,654

 

30 Years

 

$

10,267

 

F,F&E

 

3,995

 

5 Years

 

599

 

In-Place Leases – Residential

 

7,844

 

9 Months

 

—

 

In-Place Leases – Retail

 

244

 

30 Months

 

73

 

 

 

 

 

 

 

 

 

Total

 

$

422,737

 

 

 

$

10,939

 

 

(C)             Represents the pro forma revenues and expenses for the year ended December 31, 2004 attributable to the acquisition of Trump Place as if the acquisition had occurred on January 1, 2004.  Interest expense incurred of $14.0 million is attributable to draws under the lines of credit calculated using a weighted average interest rate of 1.7253%.  Although these Pro Forma Condensed Consolidated Statements of Operations assume the acquisition of Trump Place would be financed initially by the revolving lines of credit, the Company’s near-term intention is to finance the acquisition through the use of tax-deferred 1031 exchange proceeds from dispositions.  Preliminary depreciation expense of $22.4 million relates to the aggregate purchase price of $811.2 million less a preliminary allocation to land of $388.4 million and is calculated as follows (amounts in thousands except for depreciable lives):

 

 

 

 

 

 

 

Year

 

 

 

 

 

Weighted Average

 

Ended 12/31/04

 

Asset

 

Basis

 

Depreciable Life

 

Expense

 

Building

 

$

410,654

 

30 Years

 

$

13,688

 

F,F&E

 

3,995

 

5 Years

 

799

 

In-Place Leases – Residential

 

7,844

 

9 Months

 

7,844

 

In-Place Leases – Retail

 

244

 

30 Months

 

98

 

 

 

 

 

 

 

 

 

Total

 

$

422,737

 

 

 

$

22,429

 

 

20

 -----END PRIVACY-ENHANCED MESSAGE-----