EX-99.1 2 a4937863ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Equity Residential Reports Second Quarter Results CHICAGO--(BUSINESS WIRE)--July 27, 2005--Equity Residential (NYSE:EQR) today reported results for the quarter and six months ended June 30, 2005. All per share results are reported on a fully diluted basis. "Business continues to strengthen and the table is set for a strong second half of 2005 and a very good 2006," said Bruce W. Duncan, Equity Residential's CEO. Second Quarter 2005 For the quarter ended June 30, 2005, the company reported earnings of $0.44 per share compared to $0.39 per share in the second quarter of 2004. The quarterly increase is primarily attributable to $0.10 per share in higher gains on property and condominium sales, partially offset by $0.03 per share of higher interest expense and $0.01 per share of higher compensation expense related to the previously announced planned retirement of Bruce W. Duncan. Funds from Operations (FFO) for both the quarters ended June 30, 2005 and 2004 were $0.56 per share. Total revenues from continuing operations for the quarter were $499.5 million compared to $460.2 million in the second quarter of 2004. The primary components of this $39.3 million increase in revenues include the properties acquired since July 1, 2004 as well as an approximate $13.3 million increase in second quarter "same-store" revenues. Six Months Ended June 30, 2005 For the six months ended June 30, 2005, the company reported earnings of $1.19 per share compared to $0.74 per share in the same period of 2004. FFO for the six months ended June 30, 2005 were $1.30 per share compared to $1.08 per share in the same period of 2004. Total revenues from continuing operations for the six months ended June 30, 2005 were $981.4 million compared to $892.2 million in the same period of 2004. "Same-Store" Results On a "same-store" second quarter to second quarter comparison, which includes 168,385 units, revenues increased 3.0 percent, expenses increased 4.9 percent and net operating income (NOI) increased 1.8 percent. On a sequential "same-store" comparison for these same 168,385 units from first quarter 2005 to second quarter 2005, revenues increased 1.9 percent, expenses increased 1.4 percent and NOI increased 2.3 percent. On a "same-store" six-month to six-month comparison, which includes 162,598 units, revenues increased 2.7 percent, expenses increased 4.8 percent and NOI increased 1.3 percent. Acquisitions/Dispositions During the second quarter of 2005, the company acquired 11 properties, consisting of 2,642 units, for an aggregate purchase price of $445.6 million at an average capitalization (cap) rate of 5.6 percent and one land parcel for $15.0 million. Also during the quarter, the company sold 14 properties, consisting of 3,320 units, for an aggregate sale price of $218.7 million at an average cap rate of 5.9 percent. In addition, the company sold 434 condominium units for $106.4 million. In the first six months of 2005, the company acquired 20 properties, consisting of 4,874 units, for an aggregate purchase price of $729.8 million at an average cap rate of 5.6 percent and two land parcels for $45.3 million. Also during the first six months of 2005, the company sold 24 properties, consisting of 5,994 units, for an aggregate sale price of $644.0 million at an average cap rate of 4.9 percent. In addition, the company sold 772 condominium units and two land parcels for $198.3 million and $36.3 million, respectively. Third Quarter 2005 Results Equity Residential expects to announce third quarter 2005 results on Tuesday, November 1, 2005 and host a conference call to discuss those results at 10:00 a.m. CT that day. Equity Residential, an S&P 500 company, is the largest publicly traded apartment company in America. Nationwide, Equity Residential owns or has investments in 933 properties in 32 states and the District of Columbia consisting of 198,240 units. For more information on Equity Residential, please visit our website at www.equityresidential.com. Forward-Looking Statements The company lists parameters for 2005 results in the final page of this release. 2005 results will depend upon a slowdown in multifamily starts and economic recovery and job growth. The forward-looking statements contained in this news release regarding 2005 results are further subject to certain risks and uncertainties including, without limitation, the risks described under the heading "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityresidential.com. This news release also contains forward-looking statements concerning development properties. The total number of units and cost of development and completion dates reflect the company's best estimates and are subject to uncertainties arising from changing economic conditions (such as costs of labor and construction materials), completion and local government regulation. The company 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 2005 will take place today at 10:00 a.m. Central. Please visit the Investor Information section of the company's web site at www.equityresidential.com for the link. A replay of the web cast will be available for two weeks at this site. EQUITY RESIDENTIAL CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands except per share data) (Unaudited) Six Months Ended Quarter Ended June 30, June 30, ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- REVENUES Rental income $975,593 $885,339 $496,249 $456,489 Fee and asset management 5,826 6,860 3,254 3,703 --------- --------- --------- --------- Total revenues 981,419 892,199 499,503 460,192 --------- --------- --------- --------- EXPENSES Property and maintenance 273,341 240,866 139,646 124,728 Real estate taxes and insurance 105,589 99,538 52,822 50,612 Property management 41,457 38,294 20,482 20,517 Fee and asset management 4,930 4,383 2,411 2,333 Depreciation 254,450 223,927 128,957 115,876 General and administrative 31,271 22,546 14,211 12,876 --------- --------- --------- --------- Total expenses 711,038 629,554 358,529 326,942 --------- --------- --------- --------- Operating income 270,381 262,645 140,974 133,250 Interest and other income 62,625 4,159 3,151 2,512 Interest: Expense incurred, net (184,322) (161,224) (94,627) (82,893) Amortization of deferred financing costs (3,294) (2,872) (1,597) (1,586) --------- --------- --------- --------- Income before allocation to Minority Interests, loss from investments in unconsolidated entities, net gain on sales of unconsolidated entities and discontinued operations 145,390 102,708 47,901 51,283 Allocation to Minority Interests: Operating Partnership (24,982) (15,738) (9,357) (8,098) Preference Interests (5,272) (10,106) (1,388) (5,053) Junior Preference Units (7) (62) (3) (31) Partially Owned Properties 2,296 296 819 443 Premium on redemption of Preference Interests (4,112) - (2,384) - Loss from investments in unconsolidated entities (215) (7,797) (157) (391) Net gain on sales of unconsolidated entities 124 4,405 - 1,971 --------- --------- --------- --------- Income from continuing operations 113,222 73,706 35,431 40,124 Net gain on sales of discontinued operations 259,824 149,259 108,559 77,760 Discontinued operations, net (4,663) 11,222 (2,646) 4,322 --------- --------- --------- --------- Net income 368,383 234,187 141,344 122,206 Preferred distributions (26,043) (27,325) (13,018) (13,653) --------- --------- --------- --------- Net income available to Common Shares $342,340 $206,862 $128,326 $108,553 ========= ========= ========= ========= Earnings per share - basic: Income from continuing operations available to Common Shares $0.37 $0.21 $0.10 $0.12 ========= ========= ========= ========= Net income available to Common Shares $1.20 $0.74 $0.45 $0.39 ========= ========= ========= ========= Weighted average Common Shares outstanding 284,899 278,224 285,283 278,949 ========= ========= ========= ========= Earnings per share - diluted: Income from continuing operations available to Common Shares $0.36 $0.21 $0.10 $0.11 ========= ========= ========= ========= Net income available to Common Shares $1.19 $0.74 $0.44 $0.39 ========= ========= ========= ========= Weighted average Common Shares outstanding 309,362 302,017 309,979 302,201 ========= ========= ========= ========= Distributions declared per Common Share outstanding $0.8650 $0.8650 $0.4325 $0.4325 ========= ========= ========= ========= EQUITY RESIDENTIAL CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS (Amounts in thousands except per share data) (Unaudited) Six Months Ended Quarter Ended June 30, June 30, ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- Net income $368,383 $234,187 $141,344 $122,206 Allocation to Minority Interests - Operating Partnership 24,982 15,738 9,357 8,098 Adjustments: Depreciation 254,450 223,927 128,957 115,876 Depreciation - Non-real estate additions (2,685) (2,717) (1,391) (1,417) Depreciation - Partially Owned Properties (2,685) (4,171) (1,362) (2,075) Depreciation - Unconsolidated Properties 2,047 7,879 975 1,116 Net (gain) on sales of unconsolidated entities (124) (4,405) - (1,971) Discontinued operations: Depreciation 4,818 17,834 1,243 8,700 Net (gain) on sales of discontinued operations (259,824) (149,259) (108,559) (77,760) Net incremental gain on sales of condominium units 29,619 8,470 15,944 4,946 Net gain on sales of vacant land 10,366 5,536 (2) 5,521 --------- --------- --------- --------- FFO (1)(2) 429,347 353,019 186,506 183,240 Preferred distributions (26,043) (27,325) (13,018) (13,653) --------- --------- --------- --------- FFO available to Common Shares and OP Units - basic $403,304 $325,694 $173,488 $169,587 ========= ========= ========= ========= FFO available to Common Shares and OP Units - diluted $403,962 $327,672 $173,809 $170,572 ========= ========= ========= ========= FFO per share and OP Unit - basic $1.32 $1.09 $0.57 $0.57 ========= ========= ========= ========= FFO per share and OP Unit - diluted $1.30 $1.08 $0.56 $0.56 ========= ========= ========= ========= Weighted average Common Shares and OP Units outstanding - basic 305,793 299,438 306,190 299,847 ========= ========= ========= ========= Weighted average Common Shares and OP Units outstanding - diluted 310,209 304,557 310,808 304,733 ========= ========= ========= ========= (1) The National Association of Real Estate Investment Trusts ("NAREIT") defines funds from operations ("FFO") (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States ("GAAP")), excluding gains (or losses) from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Company commences the conversion of units to condominiums, it simultaneously discontinues depreciation of such property. (2) The Company believes that FFO is helpful to investors as a supplemental measure of the operating performance of a real estate company, because it is a recognized measure of performance by the real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help compare the operating performance of a company's real estate between periods or as compared to different companies. FFO in and of itself does not represent net income or net cash flows from operating activities in accordance with GAAP. Therefore, FFO should not be exclusively considered as an alternative to net income or to net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company's calculation of FFO may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies. EQUITY RESIDENTIAL CONSOLIDATED BALANCE SHEETS (Amounts in thousands except for share amounts) (Unaudited) June 30, December 31, 2005 2004 ------------ ------------ ASSETS Investment in real estate Land $2,222,255 $2,183,818 Depreciable property 12,565,622 12,350,900 Construction in progress (including land) 403,068 317,903 ------------ ------------ Investment in real estate 15,190,945 14,852,621 Accumulated depreciation (2,765,550) (2,599,827) ------------ ------------ Investment in real estate, net 12,425,395 12,252,794 Cash and cash equivalents 102,752 83,505 Investments in unconsolidated entities 10,658 11,461 Rents receivable 942 1,681 Deposits - restricted 172,106 82,194 Escrow deposits - mortgage 34,586 35,800 Deferred financing costs, net 38,242 34,986 Goodwill, net 30,000 30,000 Other assets 93,355 112,854 ------------ ------------ Total assets $12,908,036 $12,645,275 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgage notes payable $3,203,644 $3,166,739 Notes, net 3,021,015 3,143,067 Line of credit 428,000 150,000 Accounts payable and accrued expenses 104,751 87,422 Accrued interest payable 71,251 70,411 Rents received in advance and other liabilities 272,284 227,588 Security deposits 49,995 49,501 Distributions payable 143,296 142,437 ------------ ------------ Total liabilities 7,294,236 7,037,165 ------------ ------------ Commitments and contingencies Minority Interests: Operating Partnership 333,545 319,841 Preference Interests 60,000 206,000 Junior Preference Units 184 184 Partially Owned Properties 7,189 9,557 ------------ ------------ Total Minority Interests 400,918 535,582 ------------ ------------ Shareholders' equity: Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized; 3,975,730 shares issued and outstanding as of June 30, 2005 and 4,108,658 shares issued and outstanding as of December 31, 2004 632,893 636,216 Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 287,144,333 shares issued and outstanding as of June 30, 2005 and 285,076,915 shares issued and outstanding as of December 31, 2004 2,871 2,851 Paid in capital 5,172,247 5,112,311 Deferred compensation - (18) Distributions in excess of accumulated earnings (563,253) (657,462) Accumulated other comprehensive loss (31,876) (21,370) ------------ ------------ Total shareholders' equity 5,212,882 5,072,528 ------------ ------------ Total liabilities and shareholders' equity $12,908,036 $12,645,275 ============ ============ June YTD 2005 vs. June YTD 2004 YTD over YTD Same-Store Results $ in Millions - 162,598 Same-Store Units Description Revenues Expenses NOI (1) ----------- ------------ -------- --------- YTD 2005 $849.2 $348.0 $501.2 YTD 2004 $826.9 $332.0 $494.9 ------------ -------- --------- Change $22.3 $16.0 $6.3 ============ ======== ========= Change 2.7% 4.8% 1.3% Second Quarter 2005 vs. Second Quarter 2004 Quarter over Quarter Same-Store Results $ in Millions - 168,385 Same-Store Units Description Revenues Expenses NOI (1) ----------- ------------ -------- --------- Q2 2005 $448.8 $182.6 $266.2 Q2 2004 $435.5 $174.2 $261.3 ------------ -------- --------- Change $13.3 $8.4 $4.9 ============ ======== ========= Change 3.0% 4.9% 1.8% Second Quarter 2005 vs. First Quarter 2005 Sequential Quarter over Quarter Same-Store Results $ in Millions - 168,385 Same-Store Units(a) Description Revenues Expenses NOI (1) ----------- ------------ -------- --------- Q2 2005 $448.8 $182.6 $266.2 Q1 2005 $440.3 $180.2 $260.1 ------------ -------- --------- Change $8.5 $2.4 $6.1 ============ ======== ========= Change 1.9% 1.4% 2.3% (a) Includes the same units as the Second Quarter 2005 vs. Second Quarter 2004 Same Store results for comparability purposes. Same-Store Occupancy Statistics YTD 2005 93.8% Q2 2005 94.1% Q2 2005 94.1% YTD 2004 93.3% Q2 2004 93.7% Q1 2005 93.4% --------- --------- --------- Change 0.5% Change 0.4% Change 0.7% (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. Same Store NOI Reconciliation June YTD 2005 vs. June YTD 2004 The following table provides a reconciliation of operating income per the consolidated statements of operations to NOI for the Six-Month 2005 Same Store Properties: Six Months Ended June 30, --------------------- 2005 2004 ---------- ---------- (Amounts in millions) Operating income $270.4 $262.6 Adjustments: Non-same store operating results (54.1) (11.6) Fee and asset management revenue (5.8) (6.9) Fee and asset management expense 4.9 4.4 Depreciation 254.5 223.9 General and administrative 31.3 22.5 ---------- ---------- Same store NOI $501.2 $494.9 ========== ========== Same Store NOI Reconciliation Second Quarter 2005 vs. Second Quarter 2004 The following table presents a reconciliation of operating income per the consolidated statements of operations to NOI for the Second Quarter 2005 Same Store Properties: Quarter Ended June 30, --------------------- 2005 2004 ---------- ---------- (Amounts in millions) Operating income $141.0 $133.3 Adjustments: Non-same store operating results (17.1) 0.6 Fee and asset management revenue (3.3) (3.7) Fee and asset management expense 2.4 2.3 Depreciation 129.0 115.9 General and administrative 14.2 12.9 ---------- ---------- Same store NOI $266.2 $261.3 ========== ========== June YTD 2005 vs. June YTD 2004 Same-Store Results by Market ----------------------------- Increase (Decrease) from Prior Year ------------------------------------------------------------------- June June YTD 05 YTD 05 Weighted % of Average Actual Occupancy Rev- Exp- Markets Units NOI % enues enses NOI Occupancy ------------------------------------------------------------------- 1 Boston 6,015 7.1% 93.3% (2.0%) 7.4% (7.1%) (1.3%) 2 South Florida 9,714 6.8% 95.6% 6.8% 4.8% 8.1% 1.3% 3 San Francisco Bay Area 5,990 5.9% 95.4% 1.8% 5.1% 0.1% 0.4% 4 Los Angeles 4,781 5.5% 95.2% 4.0% 6.8% 2.7% 0.5% 5 Phoenix 8,988 4.7% 94.1% 6.9% 6.0% 7.4% 3.4% 6 Atlanta 9,394 4.3% 94.1% 0.4% 2.5% (1.2%) 0.5% 7 DC Suburban Virginia 4,078 4.2% 94.8% 7.6% 0.7% 11.2% (0.1%) 8 Dallas/Ft Worth 9,245 4.1% 94.8% 0.6% 3.7% (2.3%) 1.1% 9 San Diego 3,766 4.1% 94.7% 4.3% 8.0% 2.5% 0.1% 10 New England (excl Boston) 6,210 3.9% 93.5% (0.0%) 7.8% (5.7%) (1.8%) 11 Denver 6,503 3.6% 94.2% (0.9%) 5.0% (4.0%) 1.3% 12 Seattle/Tacoma 6,290 3.6% 95.4% 4.1% 4.3% 4.0% 1.7% 13 DC Suburban Maryland 5,309 3.6% 93.4% 2.4% 7.1% (0.3%) (0.6%) 14 New York Metro Area 2,574 3.3% 95.3% 5.1% 4.7% 5.4% 1.0% 15 Inland Empire, CA 3,504 3.2% 94.2% 5.1% 10.3% 2.7% (1.6%) 16 Orange Co 3,013 3.2% 95.0% 4.4% 8.5% 2.5% 0.1% 17 Orlando 5,382 3.1% 95.6% 9.3% 4.9% 12.2% 1.9% 18 Houston 5,282 2.3% 91.3% (3.2%) 3.8% (9.7%) 0.5% 19 Portland 4,374 2.3% 94.2% 5.9% 3.1% 8.1% (0.1%) 20 Jacksonville 3,917 2.1% 94.4% 5.7% 2.1% 8.1% 2.4% ----------------------------------------------------- Top 20 Markets 114,329 80.5% 94.4% 3.1% 5.3% 1.7% 0.7% All Other Markets 48,269 19.5% 92.3% 1.4% 3.5% (0.4%) (0.1%) ----------------------------------------------------- Total 162,598 100.0% 93.8% 2.7% 4.8% 1.3% 0.5% ===================================================== Second Quarter 2005 vs. Second Quarter 2004 Same-Store Results by Market ----------------------------- Increase (Decrease) from Prior Quarter ------------------------------------------------------------------- 2Q 2005 2Q 2005 Weighted % of Average Actual Occupancy Rev- Exp- Markets Units NOI % enues enses NOI Occupancy ------------------------------------------------------------------- 1 South Florida 10,534 7.1% 95.3% 6.8% 4.3% 8.7% 1.2% 2 Boston 6,151 7.1% 93.9% (0.8%) 4.6% (3.7%) (1.6%) 3 Los Angeles 5,470 5.9% 95.3% 4.5% 5.0% 4.3% 1.1% 4 San Francisco Bay Area 5,990 5.7% 95.5% 1.8% 4.1% 0.6% 0.0% 5 DC Suburban Virginia 4,956 5.0% 96.1% 7.5% 3.2% 9.5% 0.2% 6 Atlanta 10,622 4.8% 94.2% 0.2% 3.3% (2.1%) 0.3% 7 Phoenix 8,988 4.5% 93.8% 8.3% 5.6% 10.3% 3.3% 8 Seattle/Tacoma 6,818 4.1% 95.9% 5.3% 2.8% 7.0% 1.7% 9 San Diego 3,766 3.9% 95.0% 3.9% 7.7% 2.1% (0.2%) 10 Dallas/Ft Worth 9,245 3.8% 94.9% 0.4% 4.7% (3.7%) 0.4% 11 New England (excl Boston) 6,210 3.8% 93.7% (0.5%) 8.3% (6.4%) (2.2%) 12 Denver 6,947 3.6% 94.8% 0.9% 4.5% (1.1%) 1.5% 13 DC Suburban Maryland 5,309 3.4% 94.0% 2.9% 8.3% (0.2%) (0.2%) 14 New York Metro Area 2,756 3.4% 96.0% 5.4% 4.5% 6.0% 0.7% 15 Inland Empire, CA 3,504 3.1% 94.7% 5.3% 11.3% 2.7% (1.2%) 16 Orange Co 3,013 3.0% 95.2% 3.3% 8.5% 1.1% (0.6%) 17 Orlando 5,382 2.9% 95.9% 9.0% 6.9% 10.3% 1.5% 18 Portland 4,374 2.2% 94.3% 5.7% 2.9% 8.0% (0.9%) 19 Houston 5,282 2.1% 91.9% (2.9%) 5.4%(10.7%) 0.9% 20 Jacksonville 3,917 2.0% 95.0% 6.8% 4.2% 8.6% 2.6% ----------------------------------------------------- Top 20 Markets 119,234 81.2% 94.7% 3.4% 5.2% 2.3% 0.6% All Other Markets 49,151 18.8% 92.8% 1.7% 3.9% (0.3%) 0.1% ----------------------------------------------------- Total 168,385 100.0% 94.1% 3.0% 4.9% 1.8% 0.4% ===================================================== Second Quarter 2005 vs. First Quarter 2005(a) Sequential Same-Store Results by Market ----------------------------- Increase (Decrease) from Prior Quarter ------------------------------------------------------------------- 2Q 2005 2Q 2005 Weighted % of Average Actual Occupancy Rev- Exp- Markets Units NOI % enues enses NOI Occupancy ------------------------------------------------------------------- 1 South Florida 10,534 7.1% 95.3% 1.4% 2.4% 0.7% (0.7%) 2 Boston 6,151 7.1% 93.9% 2.9%(6.8%) 9.5% 1.4% 3 Los Angeles 5,470 5.9% 95.3% 2.2%(0.1%) 3.4% 0.8% 4 San Francisco Bay Area 5,990 5.7% 95.5% 1.5%(0.6%) 2.6% 0.4% 5 DC Suburban Virginia 4,956 5.0% 96.1% 4.3% 2.0% 5.4% 2.4% 6 Atlanta 10,622 4.8% 94.2% 0.8% 0.2% 1.2% 0.0% 7 Phoenix 8,988 4.5% 93.8% 1.4% 1.4% 1.3% (0.5%) 8 Seattle/Tacoma 6,818 4.1% 95.9% 2.9%(0.1%) 5.0% 0.9% 9 San Diego 3,766 3.9% 95.0% 1.5% 2.6% 1.0% 0.5% 10 Dallas/Ft Worth 9,245 3.8% 94.9% 0.4% 4.4% (3.2%) 0.1% 11 New England (excl Boston) 6,210 3.8% 93.7% 1.8%(4.6%) 7.4% 0.4% 12 Denver 6,947 3.6% 94.8% 1.5% 3.7% 0.3% 1.2% 13 DC Suburban Maryland 5,309 3.4% 94.0% 2.9% 2.9% 2.9% 1.2% 14 New York Metro Area 2,756 3.4% 96.0% 3.5%(0.0%) 5.7% 1.6% 15 Inland Empire, CA 3,504 3.1% 94.7% 3.4% 0.3% 4.8% 1.0% 16 Orange Co 3,013 3.0% 95.2% 1.8% 0.3% 2.5% 0.3% 17 Orlando 5,382 2.9% 95.9% 2.5% 5.0% 0.9% 0.4% 18 Portland 4,374 2.2% 94.3% 2.0% 1.9% 2.1% 0.2% 19 Houston 5,282 2.1% 91.9% 0.5% 5.2% (4.3%) 1.1% 20 Jacksonville 3,917 2.0% 95.0% 3.9% 5.4% 3.0% 1.2% ----------------------------------------------------- Top 20 Markets 119,234 81.2% 94.7% 2.1% 0.8% 2.9% 0.5% All Other Markets 49,151 18.8% 92.8% 1.5% 3.2% 0.1% 1.1% ----------------------------------------------------- Total 168,385 100.0% 94.1% 1.9% 1.4% 2.3% 0.7% ===================================================== (a) Includes the same units as the Second Quarter 2005 vs. Second Quarter 2004 Same Store results for comparability purposes. Portfolio as of June 30, 2005 Properties Units ----------- ------- Wholly Owned Properties 837 175,498 Partially Owned Properties (Consolidated) 39 6,805 Unconsolidated Properties 57 16,117 ---------- -------- 933 198,420 Portfolio Rollforward 2005 $ Cap Properties Units Millions Rate ----------- ------- --------- ----- 12/31/2004 939 200,149 Acquisitions: Rental Properties 20 4,874 $729.8 5.6% Land Parcels - - $45.3 Dispositions: Rental Properties (1) (24) (5,994) $(644.0) 4.9% Condominium Units (3) (772) $(198.3) Land Parcels - - $(36.3) Completed Developments 1 141 Unit Configuration Changes - 22 ---------- ------- 6/30/2005 933 198,420 Portfolio Rollforward Q2 2005 $ Cap Properties Units Millions Rate ---------- ------- --------- ----- 3/31/2005 939 199,510 Acquisitions: Rental Properties 11 2,642 $445.6 5.6% Land Parcels - - $15.0 Dispositions: Rental Properties (14) (3,320) $218.7 5.9% Condominium Units (3) (434) $106.4 Unit Configuration Changes - 22 ---------- ------- 6/30/2005 933 198,420 (1) Cap rate was 6.1% excluding the sale of Water Terrace. Portfolio Summary As of June 30, 2005 % of 2005 % of NOI Market Properties Units Units Budget Boston 35 6,692 3.4% 6.0% DC Northern Virginia 17 5,578 2.8% 4.9% New York Metro Area 14 3,812 1.9% 4.5% New England (excluding Boston) 45 6,118 3.1% 3.6% DC Suburban Maryland 26 5,617 2.8% 3.3% --------------------------------------- Atlantic Region 137 27,817 14.0% 22.4% South Florida 49 11,052 5.6% 6.5% Orlando 32 6,898 3.5% 3.6% North Florida 49 7,411 3.7% 3.0% Tampa/Ft Myers 27 4,694 2.4% 1.7% --------------------------------------- Florida Region 157 30,055 15.1% 14.7% Raleigh/Durham 16 4,100 2.1% 1.4% Charlotte 11 3,391 1.7% 1.0% --------------------------------------- Carolina Region 27 7,491 3.8% 2.4% Atlanta 62 13,014 6.6% 5.1% Birmingham 1 240 0.1% 0.0% --------------------------------------- Georgia Region 63 13,254 6.7% 5.2% Minneapolis/St Paul 18 3,982 2.0% 1.9% Chicago 9 3,241 1.6% 1.6% Southeastern Michigan 21 2,845 1.4% 1.2% Nashville 11 2,729 1.4% 1.0% Columbus 31 3,415 1.7% 0.8% Indianapolis 29 3,056 1.5% 0.7% Northern Ohio 25 2,692 1.4% 0.7% Southern Ohio 20 1,634 0.8% 0.4% Milwaukee 3 686 0.3% 0.4% Lexington 7 656 0.3% 0.2% Louisville 8 608 0.3% 0.1% St Louis 1 192 0.1% 0.0% --------------------------------------- Midwest Region 183 25,736 13.0% 9.1% Lexford Other 45 3,805 1.9% 1.0% Dallas/Ft Worth 36 10,862 5.5% 3.7% Houston 17 5,282 2.7% 1.9% Austin 13 3,868 1.9% 1.3% Tulsa 7 1,828 0.9% 0.5% San Antonio 6 1,861 0.9% 0.4% Kansas City 1 288 0.1% 0.2% --------------------------------------- Texas Region 80 23,989 12.1% 8.0% Phoenix 37 10,628 5.4% 4.4% Tucson 2 558 0.3% 0.1% Albuquerque 2 369 0.2% 0.1% --------------------------------------- Arizona Region 41 11,555 5.8% 4.5% Denver 28 8,692 4.4% 4.1% --------------------------------------- Colorado Region 28 8,692 4.4% 4.1% Los Angeles 31 6,479 3.3% 6.3% San Diego 12 3,766 1.9% 3.7% Inland Empire, CA 12 3,971 2.0% 3.0% Orange County, CA 8 3,013 1.5% 2.9% --------------------------------------- Southern Cal Region 63 17,229 8.7% 15.9% San Francisco Bay Area 26 6,249 3.1% 4.9% Central Valley, CA 10 1,595 0.8% 0.5% --------------------------------------- Northern Cal Region 36 7,844 4.0% 5.4% Seattle 38 7,713 3.9% 4.0% Portland, OR 13 4,678 2.4% 2.1% Tacoma 7 2,341 1.2% 1.0% --------------------------------------- Washington Region 58 14,732 7.4% 7.1% --------------------------------------- Total 918 192,199 96.9% 99.7% Condominium Conversion 14 2,401 1.2% 0.3% Ft. Lewis - Military Housing 1 3,820 1.9% 0.0% --------------------------------------- Grand Total 933 198,420 100.0% 100.0% Debt Summary as of June 30, 2005 Weighted Average $ Millions (1) Rate (1) -------------- -------------- Secured $3,204 5.71% Unsecured 3,449 5.96% -------------- -------------- Total $6,653 5.84% Fixed Rate $5,215 6.46% Floating Rate 1,438 3.59% -------------- -------------- Total $6,653 5.84% Above Totals Include: --------------------- Tax Exempt: Fixed $285 3.58% Floating 466 2.91% -------------- -------------- Total $751 3.15% Unsecured Revolving Credit Facility $428 3.11% (1) Net of the effect of any derivative instruments. Debt Maturity Schedule as of June 30, 2005 Year $ Millions % of Total ----- ---------- ---------- 2005 $199 3.0% 2006 (2) 579 8.7% 2007 397 6.0% 2008 (3) 1,036 15.6% 2009 839 12.6% 2010 216 3.2% 2011 717 10.8% 2012 519 7.8% 2013 451 6.8% 2014+ (4) 1,700 25.5% ---------- ---------- Total $6,653 100.0% (2) Includes $150 million of unsecured debt with a final maturity of 2026 that is putable in 2006. (3) Includes $428 million outstanding on the Company's unsecured revolving credit facility. The Company entered into a new credit facility on April 1, 2005 that matures on May 29, 2008. (4) Includes $300 million of unsecured debt with a final maturity of 2015 that was putable/callable on April 13, 2005. Debt was remarketed and remains outstanding until April 13, 2015. Selected Unsecured Public Debt Covenants June 30, 2005 --------- Total Debt to Adjusted Total Assets (not to exceed 60%) 42.6% Secured Debt to Adjusted Total Assets (not to exceed 40%) 20.5% Consolidated Income Available For Debt Service To Maximum Annual Service Charges (must be at least 1.5 to 1) 2.89 Total Unsecured Assets to Unsecured Debt (must be at least 150%) 290.3% These selected covenants relate to ERP Operating Limited Partnership's ("ERPOP") outstanding unsecured public debt. Equity Residential is the general partner of ERPOP. The terms are defined in the original indenture. Market Capitalization as of June 30, 2005 Total Debt $6,652,659,406 Common Shares & OP Units 308,056,054 Common Share Equivalents 1,819,996 ------------ Total outstanding at quarter-end 309,876,050 Common Share Price at June 30, 2005 $36.82 ------------ 11,409,636,161 Perpetual Preferred Shares Liquidation Value 615,000,000 Perpetual Preference Interests Liquidation Value 25,500,000 ---------------- Total Market Capitalization $18,702,795,567 Total Debt/Total Market Capitalization 36% Common Share and Operating Partnership Unit (OP Unit) Weighted Average Amounts Outstanding YTD 2Q05 YTD 2Q04 2Q05 2Q04 ------------ ------------ ------------ ------------ Weighted Average Amounts Outstanding for Net Income Purposes: Common Shares - basic 284,899,012 278,223,576 285,283,094 278,949,482 Shares issuable from assumed conversion/ vesting of: - OP Units 20,893,584 21,214,377 20,906,578 20,897,740 - share options/ restricted shares 3,569,088 2,578,607 3,789,207 2,354,058 ------------ ------------ ------------ ------------ Total Common Shares and OP Units - diluted 309,361,684 302,016,560 309,978,879 302,201,280 Weighted Average Amounts Outstanding for FFO Purposes: OP Units - basic 20,893,584 21,214,377 20,906,578 20,897,740 Common Shares - basic 284,899,012 278,223,576 285,283,094 278,949,482 ------------ ------------ ------------ ------------ Total Common Shares and OP Units - basic 305,792,596 299,437,953 306,189,672 299,847,222 Shares issuable from assumed conversion/ vesting of: - convertible preferred shares/units 847,812 2,540,697 828,816 2,531,588 - share options/ restricted shares 3,569,088 2,578,607 3,789,207 2,354,058 ------------ ------------ ------------ ------------ Total Common Shares and OP Units - diluted 310,209,496 304,557,257 310,807,695 304,732,868 Period Ending Amounts Outstanding: OP Units 20,911,721 Common Shares 287,144,333 ------------ Total Common Shares and OP Units 308,056,054 Unconsolidated Entities as of June 30, 2005 (Amounts in thousands except for project and unit amounts) Institutional Joint Lexford / Ventures Other Totals ------------ ----------- --------- Total projects 45 11 56 (1) ------------ ----------- --------- Total units 10,846 1,451 12,297 (1) ------------ ----------- --------- Company's ownership percentage of outstanding debt 25.0% 10.7% Company's share of outstanding debt (2) $121,200 $2,861 $124,061 ------------ ----------- --------- Operating information for the six-months ended 6/30/05 (at 100%): Operating revenue $46,371 $4,462 $50,833 Operating expenses 20,893 2,342 23,235 ------------ ----------- --------- Net operating income 25,478 2,120 27,598 Depreciation 11,010 956 11,966 Other 176 2 178 ------------ ----------- --------- Operating income 14,292 1,162 15,454 Interest and other income 175 16 191 Interest: Expense incurred, net (18,722) (1,047) (19,769) Amortization of deferred financing costs (308) (91) (399) ------------ ----------- --------- Net (loss) income $(4,563) $40 $(4,523) ============ =========== ========= (1) Totals exclude Fort Lewis Military Housing consisting of one property and 3,820 units, which is not accounted for under the equity method of accounting, but is included in the Company's property/unit counts at June 30, 2005. (2) All debt is non-recourse to the Company. Consolidated Development Projects as of June 30, 2005 (Amounts in thousands except for project and unit amounts) Total Total Book No. of Capital Value To Projects Location Units Cost (1) Date (1)(2) ---------------------------------------------------------------------- Projects Under Development -------------- 2400 M St Washington, D.C. 359 $111,947 $85,356 Union Station Los Angeles, CA 278 57,727 33,372 Indian Ridge Waltham, MA 264 47,032 38,067 Bella Vista III (3) Woodland Hills, CA 264 70,649 25,053 ------------------------------- Total Projects Under Development 1,165 287,355 181,848 Completed Not Stabilized: ------------- 1210 Massachusetts Ave. (Sovereign Park) Washington, D.C. 144 39,702 39,456 City View at the Highlands (3) Lombard, IL 403 65,539 64,932 Marina Bay II (3)(4) Quincy, MA 108 23,480 23,153 ------------------------------- Total Projects Completed Not Stabilized 655 128,721 127,541 Completed And Stabilized During the Quarter: ------------------------ City Place (Westport) (3) Kansas City, MO 288 33,539 33,539 ------------------------------- Total Projects Completed And Stabilized During the Quarter 288 33,539 33,539 ------------------------------- Total Projects 2,108 $449,615 $342,928 =============================== Percentage Percentage Percentage Projects Location Completed Leased Occupied ---------------------------------------------------------------------- Projects Under Development -------------- 2400 M St Washington, D.C. 74% - - Union Station Los Angeles, CA 49% - - Indian Ridge Waltham, MA 88% 23% 14% Bella Vista III (3) Woodland Hills, CA 9% - - Completed Not Stabilized: ------------- 1210 Massachusetts Ave. (Sovereign Park) Washington, D.C. 100% 74% 73% City View at the Highlands (3) Lombard, IL 100% 97% 93% Marina Bay II (3)(4) Quincy, MA 100% 52% 51% Completed And Stabilized During the Quarter: ------------------------ City Place (Westport) (3) Kansas City, MO 100% 98% 97% Estimated Estimated Stabilization Projects Location Completion Date Date ---------------------------------------------------------------------- Projects Under Development -------------- 2400 M St Washington, D.C. 1Q 2006 3Q 2007 Union Station Los Angeles, CA 1Q 2006 4Q 2006 Indian Ridge Waltham, MA 4Q 2005 4Q 2006 Bella Vista III (3) Woodland Hills, CA 4Q 2006 3Q 2007 Completed Not Stabilized: -------------- 1210 Massachusetts Ave. (Sovereign Park) Washington, D.C. Completed 4Q 2005 City View at the Highlands (3) Lombard, IL Completed 3Q 2005 Marina Bay II (3)(4) Quincy, MA Completed 4Q 2005 Completed And Stabilized During the Quarter: ------------------------ City Place (Westport) (3) Kansas City, MO Completed 2Q 2005 Total Capital Q2 2005 NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS Cost (1) NOI ---------------------------- Projects Under Development $287,355 $(215) Completed Not Stabilized 128,721 1,104 Completed And Stabilized During the Quarter 33,539 559 ---------------------------- Total Development/Newly Stabilized NOI Contribution $449,615 $1,448 ============================ (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 completed projects. (2) Of the total book value to date, $170.0 million has been transferred to land and depreciable property and $172.9 million is currently reflected as construction in progress ("CIP"). The remaining $230.2 million of CIP represents land held for future development and related costs and land and related development costs for uncompleted condominium projects. Of the $106.7 million remaining to be invested, $59.9 million will be funded through third party construction mortgages. (3) Projects are wholly owned. All others are partially owned. (4) Project was sold on July 1, 2005. Consolidated Condominium Conversion Projects as of June 30, 2005 (Amounts in thousands except for project and unit amounts) Units ----------------------------- Available for Sale ---------------- Project Estimated Sold Start Close Units Not Projects Location Date Out Date Total Closed Closed Available ---------------------------------------------------------------------- For Sale -------- Four Lakes Lisle, IL Q4 2001 Q4 2005 942 743 63 136 Venetian I & II Phoenix, AZ Q1 2004 Q4 2005 264 148 116 - Radius at Logan Circle (1) Washington, DC Q2 2004 Q3 2005 170 169 - 1 Watermarke (1) Irvine, CA Q3 2004 Q4 2006 535 254 108 173 Atlas (1) Washington, DC Q4 2004 Q4 2005 141 - 99 42 Grand Marquis Plantation, FL Q4 2004 Q1 2006 198 - 194 4 Tuscany Villas Scottsdale, AZ Q4 2004 Q2 2006 180 - - 180 Fairway Greens Pembroke Pines, FL Q1 2005 Q2 2006 152 - - 152 Magnuson Pointe Seattle, WA Q1 2005 Q2 2006 104 - - 104 Timber Ridge Woodinville, WA Q1 2005 Q1 2007 203 - - 203 Braewood Bothell, WA Q2 2005 Q2 2006 84 - - 84 Fifth Avenue North Seattle, WA Q2 2005 Q1 2006 62 - - 62 Milano Terrace Scottsdale, AZ Q2 2005 Q3 2006 224 - - 224 Riviera Palms Coconut Creek, FL Q2 2005 Q3 2006 248 - - 248 South Palm Place Tamarac, FL Q2 2005 Q4 2006 208 - - 208 ----------------------------- 3,715 1,314 580 1,821 Closed Out ---------- Country Club Estates Mill Creek, WA Q1 2004 Q2 2005 151 151 - - Grand Oasis Coral Springs, FL Q2 2004 Q2 2005 198 198 - - Sterling Heights Bellevue, WA Q2 2004 Q2 2005 116 116 - - Verona Scottsdale, AZ Q2 2004 Q2 2005 108 108 - - Projects closed out prior to 2005 388 388 - - ----------------------------- 961 961 - - Totals 19 4,676 2,275 580 1,821 ============================= 2005 YTD Activity ----------------------------- Project Estimated FFO Start Close Units Sales Incremental Projects Location Date Out Date Closed Price Gain on Sale ---------------------------------------------------------------------- For Sale --------- Four Lakes Lisle, IL Q4 2001 Q4 2005 96 $ 13,862 $ 2,055 Venetian I & II Phoenix, AZ Q1 2004 Q4 2005 55 10,927 2,921 Radius at Logan Circle (1) Washington, DC Q2 2004 Q3 2005 53 21,437 3,227 Watermarke (1) Irvine, CA Q3 2004 Q4 2006 209 92,162 8,834 Atlas (1) Washington, DC Q4 2004 Q4 2005 - - - Grand Marquis Plantation, FL Q4 2004 Q1 2006 - - - Tuscany Villas Scottsdale, AZ Q4 2004 Q2 2006 - - - Fairway Greens Pembroke Pines, FL Q1 2005 Q2 2006 - - - Magnuson Pointe Seattle, WA Q1 2005 Q2 2006 - - - Timber Ridge Woodinville, WA Q1 2005 Q1 2007 - - - Braewood Bothell, WA Q2 2005 Q2 2006 - - - Fifth Avenue North Seattle, WA Q2 2005 Q1 2006 - - - Milano Terrace Scottsdale, AZ Q2 2005 Q3 2006 - - - Riviera Palms Coconut Creek, FL Q2 2005 Q3 2006 - - - South Palm Place Tamarac, FL Q2 2005 Q4 2006 - - - ----------------------------- 413 138,388 17,037 Closed Out ---------- Country Club Estates Mill Creek, WA Q1 2004 Q2 2005 86 14,883 2,867 Grand Oasis Coral Springs, FL Q2 2004 Q2 2005 89 12,875 3,473 Sterling Heights Bellevue, WA Q2 2004 Q2 2005 76 16,083 2,979 Verona Scottsdale, AZ Q2 2004 Q2 2005 108 16,092 3,334 Projects closed out prior to 2005 - - (71) ----------------------------- 359 59,933 12,582 Totals 19 772 $198,321 $ 29,619 ============================= Net incremental gain on sales of condominium units $ 29,619 Property management and general and administrative expenses (2,056) Discontinued operating income 250 ------------ Net Income - Condominium Division (2) $ 27,813 ============ 2Q 2005 ------------------------------ Project Estimated FFO Start Close Units Sales Incremental Projects Location Date Out Date Closed Price Gain on Sale ---------------------------------------------------------------------- For Sale -------- Four Lakes Lisle, IL Q4 2001 Q4 2005 66 $ 9,497 $ 1,782 Venetian I & II Phoenix, AZ Q1 2004 Q4 2005 54 10,769 2,915 Radius at Logan Circle (1) Washington, DC Q2 2004 Q3 2005 3 1,353 194 Watermarke (1) Irvine, CA Q3 2004 Q4 2006 123 53,251 4,704 Atlas (1) Washington, DC Q4 2004 Q4 2005 - - - Grand Marquis Plantation, FL Q4 2004 Q1 2006 - - - Tuscany Villas Scottsdale, AZ Q4 2004 Q2 2006 - - - Fairway Greens Pembroke Pines, FL Q1 2005 Q2 2006 - - - Magnuson Pointe Seattle, WA Q1 2005 Q2 2006 - - - Timber Ridge Woodinville, WA Q1 2005 Q1 2007 - - - Braewood Bothell, WA Q2 2005 Q2 2006 - - - Fifth Avenue North Seattle, WA Q2 2005 Q1 2006 - - - Milano Terrace Scottsdale, AZ Q2 2005 Q3 2006 - - - Riviera Palms Coconut Creek, FL Q2 2005 Q3 2006 - - - South Palm Place Tamarac, FL Q2 2005 Q4 2006 - - - ------------------------------ 246 74,870 9,595 Closed Out ---------- Country Club Estates Mill Creek, WA Q1 2004 Q2 2005 46 7,941 1,620 Grand Oasis Coral Springs, FL Q2 2004 Q2 2005 5 727 (16) Sterling Heights Bellevue, WA Q2 2004 Q2 2005 29 6,735 1,412 Verona Scottsdale, AZ Q2 2004 Q2 2005 108 16,092 3,334 Projects closed out prior to 2005 - - (1) ------------------------------ 188 31,495 6,349 Totals 19 434 $106,365 $ 15,944 ============================== Net incremental gain on sales of condominium units $ 15,944 Property management and general and administrative expenses (1,180) Discontinued operating income (113) ------------ Net Income - Condominium Division (2) $ 14,651 ============ (1) Partially owned projects; incremental gain on sale represents portion attributable to the Company. (2) Excludes interest income and interest expense specific to condominium conversion projects. Maintenance Expenses and Capitalized Improvements to Real Estate For the Six Months Ended June 30, 2005 (Amounts in thousands except for unit and per unit amounts) --------------------------------------------- Maintenance Expenses --------------------------------------------- Total Avg. Avg. Avg. Units Expense Per Payroll Per Per (1) (2) Unit (3) Unit Total Unit -------- -------------- -------------- --------------- Established Properties (6) 151,934 $45,194 $297 $42,058 $277 $87,252 $574 New Acquisition Properties (7) 21,282 6,655 354 5,151 274 11,806 628 Other (8) 9,087 5,214 4,523 9,737 -------- -------- -------- --------- Total 182,303 $57,063 $51,732 $108,795 ======== ======== ======== ========= --------------------------------------------------- Capitalized Improvements to Real Estate --------------------------------------------------- Avg. Building Avg. Avg. Replacements Per Improvements Per Per (4) Unit (5) Unit Total Unit ------------------ ----------------- -------------- Established Properties (6) $26,532 $175 $33,635 $221 $60,167 $396 New Acquisition Properties (7) 2,168 115 7,046 374 9,214 489 Other (8) 10,035 14,015 24,050 ----------- ----------- -------- Total $38,735 $54,696 $93,431 =========== =========== ======== -------------------- Total Expenditures -------------------- Avg. Per Grand Total Unit -------------------- Established Properties (6) $147,419 $970 New Acquisition Properties (7) 21,020 1,117 Other (8) 33,787 ---------- Total $202,226 ========== (1) Total units exclude 16,117 unconsolidated units. (2) Maintenance expenses include general maintenance costs, unit turnover costs including interior painting, regularly scheduled landscaping and tree trimming costs, security, exterminating, fire protection, snow and ice removal, elevator repairs, and other miscellaneous building repair costs. (3) Maintenance payroll includes employee costs for maintenance, cleaning, housekeeping, and landscaping. (4) Replacements include new expenditures inside the units such as carpets, appliances, mechanical equipment, fixtures and vinyl flooring. (5) Building improvements include roof replacement, paving, amenities and common areas, building mechanical equipment systems, exterior painting and siding, major landscaping, vehicles and office and maintenance equipment. (6) Wholly Owned Properties acquired prior to January 1, 2003. (7) Wholly Owned Properties acquired during 2003, 2004 and 2005. Per unit amounts are based on a weighted average of 18,823 units. (8) Includes properties either Partially Owned or sold during the period, commercial space, condominium conversions and $2.8 million included in building improvements spent on six specific assets related to major renovations and repositioning of these assets. Discontinued Operations (Amounts in thousands) Six Months Ended Quarter Ended June 30, June 30, ------------------- ------------------- 2005 2004 2005 2004 ------------------- ------------------- REVENUES Rental income $23,866 $69,466 $8,029 $32,860 --------- --------- --------- --------- Total revenues 23,866 69,466 8,029 32,860 --------- --------- --------- --------- EXPENSES (1) Property and maintenance 11,679 25,979 5,114 11,799 Real estate taxes and insurance 4,693 8,248 1,143 4,099 Property management 137 126 55 126 Depreciation 4,818 17,834 1,243 8,700 --------- --------- --------- --------- Total expenses 21,327 52,187 7,555 24,724 --------- --------- --------- --------- Discontinued operating income 2,539 17,279 474 8,136 Interest and other income 114 98 78 55 Interest: Expense incurred, net (7,107) (5,675) (3,104) (3,693) Amortization of deferred financing costs (209) (480) (94) (176) --------- --------- --------- --------- Discontinued operations, net $(4,663) $11,222 $(2,646) $4,322 ========= ========= ========= ========= (1) Includes expenses paid in the current period for properties sold in prior periods related to the Company's period of ownership. As a result of the Securities and Exchange Commission's Regulation FD, the Company will provide earnings guidance in its quarterly earnings release. These projections are based on current expectations and are forward-looking. 2005 Earnings Guidance (per share diluted) ------------------------------------------ Q3 2005 2005 -------------- -------------- Expected EPS (1) (3) $0.37 to $0.39 $2.01 to $2.11 Add: Expected depreciation expense 0.41 1.62 Less: Expected net gain on sales (1) (0.23) (1.20) -------------- -------------- Expected FFO (2) (3) $0.55 to $0.57 $2.43 to $2.53 ============== ============== Same-Store Assumptions ---------------------- 2005 -------------- Physical occupancy 94.0% Revenue change 2.00% to 3.25% Expense change 3.6% to 5.0% NOI change 0.0% to 3.0% Acquisitions $2.0 billion Dispositions $1.4 billion (1) Earnings per share ("EPS") represents net income per share calculated in accordance with accounting principles generally accepted in the United States. Expected EPS is calculated on a basis consistent with actual EPS. Due to the uncertain timing and extent of property dispositions and the resulting gains/losses on sales, actual EPS could differ materially from expected EPS. (2) The National Association of Real Estate Investment Trusts ("NAREIT") defines funds from operations ("FFO") (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States), excluding gains (or losses) from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. Expected FFO is calculated on a basis consistent with actual FFO. (3) Q1 2005 and full year 2005 include $0.21 per share of non-recurring realized gain on sale of vacant land ($0.03) and eBay, Inc.'s acquisition of the Company's ownership in Rent.com ($0.18). CONTACT: Equity Residential Marty McKenna, 312-928-1901