-----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, UVblhkylUPxsQ1FsqojiU2PotYY5nzR3qC8ojNudvxZRnA7sPhquQJ+mLMbd4Q67 ldWAsrLbk00kYpEUs+rW1g== 0001157523-05-009451.txt : 20051101 0001157523-05-009451.hdr.sgml : 20051101 20051101100524 ACCESSION NUMBER: 0001157523-05-009451 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051101 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051101 DATE AS OF CHANGE: 20051101 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: 051168252 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 8-K 1 a5008489.txt EQUITY RESIDENTIAL, 8-K 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): November 1, 2005 EQUITY RESIDENTIAL (Exact Name of Registrant as Specified in its Charter) Maryland 1-12252 13-3675988 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation or organization) File Number) 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): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02. Results of Operations and Financial Condition. On November 1, 2005, Equity Residential issued a press release announcing its results of operations and financial condition as of September 30, 2005 and for the nine months and quarter then ended. The press release is attached hereto as Exhibit 99.1. The information contained in this Section 2.02, including Exhibit 99.1, is being furnished and shall not be deemed "filed" with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by Equity Residential under the Securities Act of 1933, as amended. Item 9.01. Financial Statements and Exhibits. Exhibit Number Exhibit ------------ ------------------------------------------------------------ 99.1 Press Release dated November 1, 2005, announcing the results of operations and financial condition of Equity Residential as of September 30, 2005 and for the nine months and quarter then ended. 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: November 1, 2005 By: /s/ Mark L. Wetzel -------------------------------------------------- Name: Mark L. Wetzel -------------------------------------------------- Its: Senior Vice President and Chief Accounting Officer -------------------------------------------------- 3 EX-99.1 2 a5008489ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Equity Residential Reports Third Quarter Results; Announces Additional $500 Million Share Buyback Program CHICAGO--(BUSINESS WIRE)--Nov. 1, 2005--Equity Residential (NYSE:EQR) today reported results for the quarter and nine months ended September 30, 2005. All per share results are reported on a fully diluted basis. "Our third quarter results were driven by very good same-store revenue growth, strong condominium sales and excellent progress on our portfolio reconfiguration. Continued success in these areas as well as good job growth and household formations in our key markets should lead to a strong finish to 2005 and a very good 2006," said Bruce W. Duncan, Equity Residential's CEO. Third Quarter 2005 For the quarter ended September 30, 2005, the company reported earnings of $0.86 per share compared to $0.26 per share in the third quarter of 2004. The quarterly increase is primarily attributable to $0.63 per share in higher gains on property and condominium sales, partially offset by $0.04 per share in higher interest expense. Funds from Operations (FFO) for the quarter ended September 30, 2005 were $0.56 per share compared to $0.50 per share in the same period of 2004. The positive variance was primarily the result of $0.07 per share in higher gains on condominium sales and $0.02 per share of improved same-store results, offset by the previously mentioned $0.04 per share of higher interest expense. Total revenues from continuing operations for the quarter were $504.4 million compared to $456.6 million in the third quarter of 2004. The primary components of this $47.8 million increase in revenues include the properties acquired since October 1, 2004 as well as an approximate $18.4 million increase in third quarter same-store revenues. Nine Months Ended September 30, 2005 For the nine months ended September 30, 2005, the company reported earnings of $2.05 per share compared to $1.00 per share in the same period of 2004. The increase for the period is primarily attributable to higher gains on property and condominium sales and the previously announced gain due to eBay Inc.'s acquisition of the company's ownership interest in Rent.com. FFO for the nine months ended September 30, 2005 were $1.86 per share compared to $1.58 per share in the same period of 2004. Total revenues from continuing operations for the nine months ended September 30, 2005 were $1.5 billion compared to $1.3 billion in the same period of 2004. Same-Store Results On a same-store third quarter to third quarter comparison, which includes 165,673 units, revenues increased 4.3 percent, expenses increased 6.2 percent and net operating income (NOI) increased 3.0 percent. The increase in same-store expenses in the third quarter of 2005 includes approximately $3.7 million of additional insurance expense related to the impact of two property fires and Hurricane Katrina. Without the fire and hurricane related insurance expenses, the same-store expense and NOI increases would have been 4.1 percent and 4.4 percent, respectively, for the quarter. On a sequential same-store comparison for these same 165,673 units from second quarter 2005 to third quarter 2005, revenues increased 1.5 percent, expenses increased 5.0 percent and NOI decreased 0.8 percent. Without the fire and hurricane related insurance expenses, the same-store expense and NOI increases for the sequential period would have been 2.9 percent and 0.6 percent, respectively. On a same-store nine-month to nine-month comparison, which includes 158,005 units, revenues increased 3.2 percent, expenses increased 5.6 percent and NOI increased 1.6 percent. Without the fire and hurricane related insurance expenses, the same-store expense and NOI increases for the period would have been 4.8 percent and 2.2 percent, respectively. Acquisitions/Dispositions During the third quarter of 2005, the company acquired six properties, consisting of 2,294 units, for an aggregate purchase price of $416.0 million at an average capitalization (cap) rate of 5.7 percent and one land parcel for $1.4 million. Also during the quarter, the company sold 15 properties, consisting of 4,218 units, for an aggregate sale price of $433.0 million at an average cap rate of 5.2 percent. In addition, the company sold 569 condominium units for $183.9 million and a 248-unit property in the process of being converted to condominiums for $45.9 million. In the first nine months of 2005, the company acquired 26 properties, consisting of 7,168 units, for an aggregate purchase price of $1.1 billion at an average cap rate of 5.6 percent and three land parcels for $46.7 million. In addition, the company sold 39 properties, consisting of 10,212 units, for an aggregate sale price of $1.1 billion at an average cap rate of 5.0 percent. In addition, the company sold 1,341 condominium units for $382.2 million, a 248-unit property in the process of being converted to condominiums for $45.9 million and two land parcels for $36.3 million. "We have had an excellent year in our transaction activity, garnering very good prices on the sale of assets and executing on opportunities to add high-quality, well-located properties to our portfolio," said David J. Neithercut, Equity Residential's President. Share Buyback Authorization The company also announced a new common share repurchase program in the amount of $500 million. The new authorization is in addition to the $85 million remaining under the company's existing $200 million authorization approved in July 2002. The new program authorizes the company to repurchase common shares from time to time through the open market or privately negotiated transactions, subject to financial and market conditions and legal requirements. Fourth Quarter/Full Year 2005 Results Equity Residential expects to announce fourth quarter/full year 2005 results on Wednesday, February 1, 2006 and host a conference call to discuss those results at 10:00 a.m. CT that day. Equity Residential is the largest publicly traded apartment company in America. Nationwide, Equity Residential owns or has investments in 922 properties in 32 states and the District of Columbia consisting of 195,575 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 the remainder of 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) Nine Months Ended Quarter Ended September 30, September 30, ----------------------- ----------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- REVENUES Rental income $1,453,829 $1,316,790 $501,776 $454,128 Fee and asset management 8,456 9,268 2,630 2,436 ----------- ----------- ----------- ----------- Total revenues 1,462,285 1,326,058 504,406 456,564 ----------- ----------- ----------- ----------- EXPENSES Property and maintenance 411,187 362,372 146,341 129,612 Real estate taxes and insurance 162,711 159,407 59,701 62,480 Property management 63,254 56,850 21,924 18,865 Fee and asset management 7,518 6,500 2,595 2,144 Depreciation 378,123 334,352 129,701 116,170 General and administrative 45,012 34,778 14,243 11,961 ----------- ----------- ----------- ----------- Total expenses 1,067,805 954,259 374,505 341,232 ----------- ----------- ----------- ----------- Operating income 394,480 371,799 129,901 115,332 Interest and other income 65,471 6,841 2,878 2,655 Interest: Expense incurred, net (281,762) (242,361) (97,997) (81,862) Amortization of deferred financing costs (4,996) (4,583) (1,730) (1,781) ----------- ----------- ----------- ----------- Income before allocation to Minority Interests, income (loss) from investments in unconsolidated entities, net gain on sales of unconsolidated entities and discontinued operations 173,193 131,696 33,052 34,344 Allocation to Minority Interests: Operating Partnership (43,060) (21,223) (18,078) (5,485) Preference Interests (6,431) (15,158) (1,159) (5,052) Junior Preference Units (11) (67) (4) (5) Partially Owned Properties 672 1,107 (1,624) 811 Premium on redemption of Preference Interests (4,134) (1,117) (22) (1,117) Income (loss) from investments in unconsolidated entities (450) (7,468) (235) 329 Net gain on sales of unconsolidated entities 124 4,407 - 2 ----------- ----------- ----------- ----------- Income from continuing operations 119,903 92,177 11,930 23,827 Net gain on sales of discontinued operations 513,419 207,653 254,178 58,394 Discontinued operations, net 2,585 21,866 1,416 5,288 ----------- ----------- ----------- ----------- Net income 635,907 321,696 267,524 87,509 Preferred distributions (39,004) (40,671) (12,961) (13,346) Premium on redemption of Preferred Shares (4,316) - (4,316) - ----------- ----------- ----------- ----------- Net income available to Common Shares $592,587 $281,025 $250,247 $74,163 =========== =========== =========== =========== Earnings per share - basic: Income from continuing operations available to Common Shares $0.39 $0.24 $0.04 $0.05 =========== =========== =========== =========== Net income available to Common Shares $2.08 $1.01 $0.87 $0.26 =========== =========== =========== =========== Weighted average Common Shares outstanding 285,331 278,876 286,182 280,167 =========== =========== =========== =========== Earnings per share - diluted: Income from continuing operations available to Common Shares $0.39 $0.24 $0.04 $0.05 =========== =========== =========== =========== Net income available to Common Shares $2.05 $1.00 $0.86 $0.26 =========== =========== =========== =========== Weighted average Common Shares outstanding 310,211 302,739 311,564 304,028 =========== =========== =========== =========== Distributions declared per Common Share outstanding $1.2975 $1.2975 $0.4325 $0.4325 =========== =========== =========== =========== EQUITY RESIDENTIAL CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS (Amounts in thousands except per share data) (Unaudited) Nine Months Ended Quarter Ended September 30, September 30, ----------------------- ----------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- Net income $635,907 $321,696 $267,524 $87,509 Allocation to Minority Interests - Operating Partnership 43,060 21,223 18,078 5,485 Adjustments: Depreciation 378,123 334,352 129,701 116,170 Depreciation - Non-real estate additions (3,928) (4,025) (1,243) (1,308) Depreciation - Partially Owned and Unconsolidated Properties 2,136 2,828 2,774 (880) Net (gain) on sales of unconsolidated entities (124) (4,407) - (2) Discontinued operations: Depreciation 13,028 33,530 2,182 9,951 Net (gain) on sales of discontinued operations (513,419) (207,653) (254,178) (58,394) Net incremental gain on sales of condominium units 56,667 15,669 27,631 7,199 Net gain on sales of land parcels 10,366 5,483 - (53) ----------- ----------- ----------- ----------- FFO (1)(2) 621,816 518,696 192,469 165,677 Preferred distributions (39,004) (40,671) (12,961) (13,346) Premium on redemption of Preferred Shares (4,316) - (4,316) - ----------- ----------- ----------- ----------- FFO available to Common Shares and OP Units - basic $578,496 $478,025 $175,192 $152,331 =========== =========== =========== =========== FFO available to Common Shares and OP Units - diluted $579,432 $480,890 $175,466 $153,225 =========== =========== =========== =========== FFO per share and OP Unit - basic $1.89 $1.59 $0.57 $0.51 =========== =========== =========== =========== FFO per share and OP Unit - diluted $1.86 $1.58 $0.56 $0.50 =========== =========== =========== =========== Weighted average Common Shares and OP Units outstanding - basic 306,171 299,929 306,915 300,900 =========== =========== =========== =========== Weighted average Common Shares and OP Units outstanding - diluted 311,015 305,189 312,272 306,315 =========== =========== =========== =========== (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) September 30, December 31, 2005 2004 ------------- ------------- ASSETS Investment in real estate Land $2,283,157 $2,183,818 Depreciable property 12,670,716 12,350,900 Construction in progress (including land) 330,965 317,903 ------------- ------------- Investment in real estate 15,284,838 14,852,621 Accumulated depreciation (2,805,552) (2,599,827) ------------- ------------- Investment in real estate, net 12,479,286 12,252,794 Cash and cash equivalents 306,933 83,505 Investments in unconsolidated entities 11,390 11,461 Rents receivable 940 1,681 Deposits - restricted 305,366 82,194 Escrow deposits - mortgage 36,389 35,800 Deferred financing costs, net 40,041 34,986 Goodwill, net 30,000 30,000 Other assets 101,484 112,854 ------------- ------------- Total assets $13,311,829 $12,645,275 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgage notes payable $3,323,932 $3,166,739 Notes, net 3,443,588 3,143,067 Lines of credit - 150,000 Accounts payable and accrued expenses 124,908 87,422 Accrued interest payable 64,201 70,411 Rents received in advance and other liabilities 490,894 227,588 Security deposits 49,977 49,501 Distributions payable 143,572 142,437 ------------- ------------- Total liabilities 7,641,072 7,037,165 ------------- ------------- Commitments and contingencies Minority Interests: Operating Partnership 340,037 319,841 Preference Interests 60,000 206,000 Junior Preference Units 184 184 Partially Owned Properties 10,716 9,557 ------------- ------------- Total Minority Interests 410,937 535,582 ------------- ------------- Shareholders' equity: Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized; 3,349,630 shares issued and outstanding as of September 30, 2005 and 4,108,658 shares issued and outstanding as of December 31, 2004 504,741 636,216 Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 288,165,764 shares issued and outstanding as of September 30, 2005 and 285,076,915 shares issued and outstanding as of December 31, 2004 2,882 2,851 Paid in capital 5,207,399 5,112,311 Deferred compensation - (18) Distributions in excess of accumulated earnings (437,639) (657,462) Accumulated other comprehensive loss (17,563) (21,370) ------------- ------------- Total shareholders' equity 5,259,820 5,072,528 ------------- ------------- Total liabilities and shareholders' equity $13,311,829 $12,645,275 ============= ============= September YTD 2005 vs. September YTD 2004 YTD over YTD Same-Store Results $ in Millions - 158,005 Same-Store Units Description Revenues Expenses NOI (1) ----------- ----------- ----------- ----------- YTD 2005 $1,240.3 $512.9 $727.4 YTD 2004 $1,201.5 $485.8 $715.7 ----------- ----------- ----------- Change $38.8 $27.1 $11.7 =========== =========== =========== Change 3.2% 5.6% 1.6% Third Quarter 2005 vs. Third Quarter 2004 Quarter over Quarter Same-Store Results $ in Millions - 165,673 Same-Store Units Description Revenues Expenses NOI (1) ----------- ----------- ----------- ----------- Q3 2005 $446.6 $187.4 $259.2 Q3 2004 $428.2 $176.5 $251.7 ----------- ----------- ----------- Change $18.4 $10.9 $7.5 =========== =========== =========== Change 4.3% 6.2% 3.0% Third Quarter 2005 vs. Second Quarter 2005 Sequential Quarter over Quarter Same-Store Results $ in Millions - 165,673 Same-Store Units(a) Description Revenues Expenses NOI (1) ----------- ----------- ----------- ----------- Q3 2005 $446.6 $187.4 $259.2 Q2 2005 $439.8 $178.4 $261.4 ----------- ----------- ----------- Change $6.8 $9.0 $(2.2) =========== =========== =========== Change 1.5% 5.0% (0.8%) (a) Includes the same units as the Third Quarter 2005 vs. Third Quarter 2004 Same Store results for comparability purposes. Same-Store Occupancy Statistics YTD 2005 94.2% Q3 2005 94.7% Q3 2005 94.7% YTD 2004 93.5% Q3 2004 93.6% Q2 2005 94.2% ----------- ----------- --------- Change 0.7% Change 1.1% Change 0.5% (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 September YTD 2005 vs. September YTD 2004 The following table provides a reconciliation of operating income per the consolidated statements of operations to NOI for the Nine-Month 2005 Same Store Properties: Nine Months Ended September 30, --------------------------- 2005 2004 ------------- ------------- (Amounts in millions) Operating income $394.5 $371.8 Adjustments: Insurance (hurricane property damage) - 14.1 Non-same store operating results (89.2) (36.6) Fee and asset management revenue (8.5) (9.3) Fee and asset management expense 7.5 6.5 Depreciation 378.1 334.4 General and administrative 45.0 34.8 ------------- ------------- Same store NOI $727.4 $715.7 ============= ============= Same Store NOI Reconciliation Third Quarter 2005 vs. Third Quarter 2004 The following table presents a reconciliation of operating income per the consolidated statements of operations to NOI for the Third Quarter 2005 Same Store Properties: Quarter Ended September 30, --------------------------- 2005 2004 ------------- ------------- (Amounts in millions) Operating income $129.9 $115.3 Adjustments: Insurance (hurricane property damage) - 14.1 Non-same store operating results (14.6) (5.6) Fee and asset management revenue (2.6) (2.4) Fee and asset management expense 2.6 2.1 Depreciation 129.7 116.2 General and administrative 14.2 12.0 ------------- ------------- Same store NOI $259.2 $251.7 ============= ============= September YTD 2005 vs. September YTD 2004 Same-Store Results by Market -------------------------------- Increase (Decrease) from Prior Year ------------------------------------------------------------------- Sep Sep YTD 05 YTD 05 Weighted % of Average Actual Occupancy Markets Units NOI % Revenues Expenses NOI Occupancy ------------------------------------------------------------------- 1 South Florida 9,346 6.8% 95.4% 7.6% 5.4% 9.2% 1.2% 2 Boston 5,397 6.4% 93.9% (2.2%) 6.9%(7.3%) (1.3%) 3 San Francisco Bay Area 5,990 6.1% 95.7% 2.6% 5.9% 0.8% 0.8% 4 Los Angeles 4,781 5.7% 95.5% 4.6% 7.8% 3.1% 0.7% 5 Phoenix 8,988 4.9% 94.3% 7.7% 5.8% 9.1% 3.4% 6 DC Suburban Virginia 4,078 4.3% 94.8% 6.6% 1.9% 8.9% (0.2%) 7 Atlanta 9,082 4.2% 94.3% 0.7% 3.5%(1.6%) 0.6% 8 New England (excl Boston) 6,210 4.1% 93.6% 0.2% 7.7%(5.2%) (1.4%) 9 San Diego 3,486 4.0% 95.2% 4.3% 8.0% 2.6% 0.1% 10 Dallas/ Ft Worth 8,608 3.8% 94.8% 1.2% 6.4%(3.8%) 1.2% 11 Seattle/ Tacoma 6,290 3.7% 95.4% 4.5% 5.7% 3.7% 1.7% 12 Denver 6,360 3.5% 94.6% 0.5% 4.7%(1.8%) 1.6% 13 New York Metro Area 2,574 3.4% 95.6% 5.5% 5.6% 5.4% 1.0% 14 DC Suburban Maryland 4,739 3.4% 93.7% 3.3% 5.9% 1.9% (0.2%) 15 Inland Empire, CA 3,504 3.3% 94.3% 5.6% 10.9% 3.2% (1.0%) 16 Orange Co 3,013 3.3% 95.2% 4.6% 9.6% 2.3% 0.3% 17 Orlando 5,382 3.2% 96.0% 10.0% 5.3% 13.3% 1.6% 18 Houston 5,282 2.3% 92.5% (2.2%) 5.6%(9.6%) 1.5% 19 Minn/St Paul 3,826 2.2% 92.1% 0.0% 0.7%(0.6%) 1.3% 20 Jacksonville 3,917 2.2% 94.4% 6.5% 3.6% 8.5% 2.2% ------------------------------------------------------- Top 20 Markets 110,853 80.8% 94.6% 3.4% 5.8% 1.9% 0.9% All Other Markets 47,152 19.2% 93.2% 2.6% 4.8% 0.7% 0.1% ------------------------------------------------------- Total 158,005 100.0% 94.2% 3.2% 5.6% 1.6% 0.7% ======================================================= Third Quarter 2005 vs. Third Quarter 2004 Same-Store Results by Market -------------------------------- Increase (Decrease) from Prior Quarter ------------------------------------------------------------------- 3Q 2005 3Q 2005 Weighted % of Average Actual Occupancy Markets Units NOI % Revenues Expenses NOI Occupancy ------------------------------------------------------------------- 1 South Florida 10,166 7.1% 95.0% 8.7% 4.8% 11.5% 0.8% 2 Los Angeles 5,630 6.3% 96.2% 5.9% 9.7% 4.1% 1.7% 3 Boston 5,533 6.3% 94.8% (2.2%) 4.5%(5.8%) (0.7%) 4 San Francisco Bay Area 5,990 5.8% 96.5% 4.1% 7.0% 2.5% 1.6% 5 DC Suburban Virginia 4,956 5.1% 95.1% 5.6% 4.1% 6.3% 0.0% 6 Atlanta 10,772 4.8% 94.8% 1.1% 6.9%(3.3%) 0.6% 7 Phoenix 8,988 4.5% 94.7% 9.5% 5.8% 12.3% 3.2% 8 Seattle/ Tacoma 7,351 4.4% 95.4% 6.2% 7.2% 5.5% 1.9% 9 New England (excl Boston) 6,210 3.9% 93.9% 0.6% 7.6%(4.2%) (0.5%) 10 San Diego 3,486 3.8% 95.9% 3.8% 6.5% 2.5% (0.1%) 11 New York Metro Area 2,756 3.6% 96.3% 6.5% 8.9% 5.1% 1.2% 12 Orlando 5,978 3.5% 96.5% 10.9% 5.9% 14.5% 0.8% 13 Denver 6,804 3.5% 95.4% 4.0% 2.6% 4.9% 2.3% 14 Dallas/ Ft Worth 8,608 3.3% 94.7% 2.3% 8.8%(4.6%) 1.2% 15 DC Suburban Maryland 4,739 3.2% 93.3% 3.6% 5.5% 2.5% 0.1% 16 Inland Empire, CA 3,504 3.1% 94.4% 6.7% 11.3% 4.5% 0.1% 17 Orange Co 3,013 3.1% 95.7% 5.1% 10.6% 2.5% 0.6% 18 Minn/St Paul 3,826 2.2% 95.0% 5.3% (2.0%) 11.8% 4.5% 19 Houston 5,282 2.1% 94.9% (0.1%) 7.5%(7.9%) 3.4% 20 Jacksonville 3,988 2.1% 94.3% 8.3% 6.1% 9.9% 1.7% ------------------------------------------------------- Top 20 Markets 117,580 81.7% 95.1% 4.6% 6.4% 3.4% 1.3% All Other Markets 48,093 18.3% 93.9% 3.2% 5.4% 1.1% 0.8% ------------------------------------------------------- Total 165,673 100.0% 94.7% 4.3% 6.2% 3.0% 1.1% ======================================================= Third Quarter 2005 vs. Second Quarter 2005(a) Sequential Same-Store Results by Market -------------------------------- Increase (Decrease) from Prior Quarter ------------------------------------------------------------------- 3Q 2005 3Q 2005 Weighted % of Average Actual Occupancy Markets Units NOI % Revenues Expenses NOI Occupancy ------------------------------------------------------------------- 1 South Florida 10,166 7.1% 95.0% 2.2% 4.0% 1.0% (0.3%) 2 Los Angeles 5,630 6.3% 96.2% 2.3% 7.2%(0.1%) 0.8% 3 Boston 5,533 6.3% 94.8% (0.5%) 0.1%(0.9%) 0.9% 4 San Francisco Bay Area 5,990 5.8% 96.5% 2.2% 7.1%(0.6%) 1.0% 5 DC Suburban Virginia 4,956 5.1% 95.1% 1.3% 4.6%(0.2%) (0.9%) 6 Atlanta 10,772 4.8% 94.8% 0.4% 8.0%(5.3%) 0.5% 7 Phoenix 8,988 4.5% 94.7% 1.7% 7.3%(2.0%) 0.9% 8 Seattle/ Tacoma 7,351 4.4% 95.4% 1.3% 8.1%(3.3%) (0.4%) 9 New England (excl Boston) 6,210 3.9% 93.9% 1.0% (0.7%) 2.3% 0.2% 10 San Diego 3,486 3.8% 95.9% 2.3% 3.5% 1.7% 0.8% 11 New York Metro Area 2,756 3.6% 96.3% 2.7% 5.4% 1.1% 0.3% 12 Orlando 5,978 3.5% 96.5% 4.3% 5.2% 3.7% 0.7% 13 Denver 6,804 3.5% 95.4% 1.1% 8.2%(3.0%) 0.5% 14 Dallas/ Ft Worth 8,608 3.3% 94.7% 0.9% 7.2%(5.6%) (0.1%) 15 DC Suburban Maryland 4,739 3.2% 93.3% (0.2%) 1.2%(1.0%) (1.1%) 16 Inland Empire, CA 3,504 3.1% 94.4% 1.9% 9.2%(1.6%) (0.3%) 17 Orange Co 3,013 3.1% 95.7% 2.2% 6.6% 0.2% 0.6% 18 Minn/St Paul 3,826 2.2% 95.0% 4.5% (2.1%) 10.2% 2.1% 19 Houston 5,282 2.1% 94.9% 3.1% 6.7%(1.0%) 3.0% 20 Jacksonville 3,988 2.1% 94.3% 1.9% 5.9%(0.6%) (0.7%) ------------------------------------------------------- Top 20 Markets 117,580 81.7% 95.1% 1.7% 5.2%(0.5%) 0.4% All Other Markets 48,093 18.3% 93.9% 1.0% 4.6%(2.1%) 0.7% ------------------------------------------------------- Total 165,673 100.0% 94.7% 1.5% 5.0%(0.8%) 0.5% ======================================================= (a) Includes the same units as the Third Quarter 2005 vs. Third Quarter 2004 Same Store results for comparability purposes. Portfolio as of September 30, 2005 Properties Units ----------- ----------- Wholly Owned Properties 829 173,411 Partially Owned Properties (Consolidated) 36 6,134 Unconsolidated Properties 57 16,030 ----------- ----------- 922 195,575 Portfolio Rollforward 2005 Properties Units $ Millions Cap Rate ----------- ----------- ----------- ----------- 12/31/2004 939 200,149 Acquisitions: Rental Properties 26 7,168 $1,145.8 5.6% Land Parcels - - $46.7 Dispositions: Rental Properties(1) (39) (10,212) $(1,077.0) 5.0% Condominium Units (5) (1,589) $(428.1) Land Parcels - - $(36.3) Completed Developments 1 141 Unit Configuration Changes - (82) ----------- ----------- 9/30/2005 922 195,575 Portfolio Rollforward Q3 2005 Properties Units $ Millions Cap Rate ----------- ----------- ----------- ----------- 6/30/2005 933 198,420 Acquisitions: Rental Properties 6 2,294 $416.0 5.7% Land Parcels - - $1.4 Dispositions: Rental Properties (15) (4,218) $433.0 5.2% Condominium Units (2) (817) $229.8 Unit Configuration Changes - (104) ----------- ----------- 9/30/2005 922 195,575 (1) Cap rate was 5.6% excluding the sale of Water Terrace. - ---------------------------------------------------------------------- Portfolio Summary As of September 30, 2005 % of % of 2005 Market Properties Units Units NOI Budget Boston 34 6,566 3.4% 5.9% DC Northern Virginia 17 5,578 2.9% 4.9% New York Metro Area 15 4,064 2.1% 4.8% New England (excluding Boston) 45 6,118 3.1% 3.6% DC Suburban Maryland 24 5,351 2.7% 3.1% -------------------------------------------- Atlantic Region 135 27,677 14.2% 22.4% South Florida 48 10,684 5.5% 6.3% Orlando 33 7,234 3.7% 3.8% North Florida 50 7,733 4.0% 3.2% Tampa/Ft Myers 27 4,694 2.4% 1.7% -------------------------------------------- Florida Region 158 30,345 15.5% 14.8% 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 61 12,702 6.5% 5.0% -------------------------------------------- Georgia Region 61 12,702 6.5% 5.0% Minneapolis/St Paul 18 3,982 2.0% 1.9% Chicago 9 3,241 1.7% 1.6% Southeastern Michigan 21 2,845 1.5% 1.2% Nashville 11 2,729 1.4% 1.0% Columbus 31 3,415 1.7% 0.8% Indianapolis 29 3,056 1.6% 0.7% Northern Ohio 24 1,944 1.0% 0.5% Southern Ohio 20 1,634 0.8% 0.4% Milwaukee 3 686 0.4% 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 182 24,988 12.8% 9.0% Lexford Other 44 3,653 1.9% 0.9% - ---------------------------------------------------------------------- Portfolio Summary As of September 30, 2005 % of % of 2005 Market Properties Units Units NOI Budget Dallas/Ft Worth 34 10,225 5.2% 3.5% Houston 17 5,282 2.7% 1.9% Austin 13 3,868 2.0% 1.3% Tulsa 7 1,828 0.9% 0.5% San Antonio 6 1,861 1.0% 0.4% Kansas City 1 288 0.1% 0.2% -------------------------------------------- Texas Region 78 23,352 11.9% 7.8% 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 5.9% 4.5% Denver 28 8,899 4.6% 4.3% -------------------------------------------- Colorado Region 28 8,899 4.6% 4.3% Los Angeles 31 6,479 3.3% 6.3% San Diego 11 3,486 1.8% 3.5% Inland Empire, CA 12 3,971 2.0% 3.0% Orange County, CA 8 3,013 1.5% 2.9% -------------------------------------------- Southern Cal Region 62 16,949 8.7% 15.7% San Francisco Bay Area 26 6,249 3.2% 4.9% Central Valley, CA 10 1,595 0.8% 0.5% -------------------------------------------- Northern Cal Region 36 7,844 4.0% 5.4% Seattle 38 8,308 4.2% 5.1% Portland, OR 12 4,153 2.1% 1.8% Tacoma 7 2,341 1.2% 1.0% -------------------------------------------- Washington Region 57 14,802 7.6% 7.8% -------------------------------------------- Total 909 190,257 97.3% 100.0% Condominium Conversion 12 1,585 0.8% 0.0% Ft. Lewis - Military Housing 1 3,733 1.9% 0.0% -------------------------------------------- Grand Total 922 195,575 100.0% 100.0% Debt Summary as of September 30, 2005 Weighted Average $ Millions(1) Rate(1) ------------- ------------- Secured $3,324 5.65% Unsecured 3,443 5.93% ------------- ------------- Total $6,767 5.80% Fixed Rate $5,679 6.39% Floating Rate 1,088 3.61% ------------- ------------- Total $6,767 5.80% Above Totals Include: --------------------- Tax Exempt: Fixed $135 3.80% Floating 616 2.83% ------------- ------------- Total $751 3.14% Unsecured Revolving Credit Facilities $- 3.52% (1) Net of the effect of any derivative instruments. Debt Maturity Schedule as of September 30, 2005 Year $ Millions % of Total ----- ------------- ------------- 2005 $39 0.6% 2006 (1) 596 8.8% 2007 378 5.6% 2008 616 9.1% 2009 860 12.7% 2010 262 3.9% 2011 721 10.6% 2012 523 7.7% 2013 567 8.4% 2014+ 2,205 32.6% ------------- ------------- Total $6,767 100.0% (1) Includes $150 million of unsecured debt with a final maturity of 2026 that is putable in 2006. Selected Unsecured Public Debt Covenants September 30, 2005 ------------- Total Debt to Adjusted Total Assets (not to exceed 60%) 42.1% Secured Debt to Adjusted Total Assets (not to exceed 40%) 20.7% Consolidated Income Available For Debt Service To Maximum Annual Service Charges (must be at least 1.5 to 1) 2.79 Total Unsecured Assets to Unsecured Debt (must be at least 150%) 298.8% 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. Capital Structure as of September 30, 2005 (Amounts in thousands except for share and per share amounts) Secured Debt $3,323,932 49% Unsecured Debt 3,443,588 51% Lines of Credit - - ------------ ---- Total Debt 6,767,520 100% 36% Common Shares 288,165,764 93% OP Units 20,606,812 7% ------------- ------ Total Shares and OP Units 308,772,576 100% Common Share Equivalents (see below) 1,679,537 ------------- Total outstanding at quarter-end 310,452,113 Common Share Price at September 30, 2005 $37.85 ------------- 11,750,612 96% Perpetual Preferred Equity (see below) 515,500 4% ------------ ---- Total Equity 12,266,112 100% 64% Total Market Capitalization $19,033,632 100% Convertible Preferred Equity as of September 30, 2005 (Amounts in thousands except for share and per share amounts) Annual Dividend Annual Outstanding Liquidation Rate Per Dividend Series Shares/Units Value Share/Unit Amount - ---------------------- ------------ ----------- ----------- ---------- Preferred Shares: 7.00% Series E 554,696 $13,868 $1.75 $971 7.00% Series H 34,934 873 1.75 61 Preference Interests: 7.625% Series H 190,000 9,500 3.8125 724 7.625% Series I 270,000 13,500 3.8125 1,029 7.625% Series J 230,000 11,500 3.8125 877 Junior Preference Units: 8.00% Series B 7,367 184 2.00 15 ------------ ----------- ---------- Total Convertible Preferred Equity 1,286,997 $49,425 $3,677 Weighted Common Average Conversion Share Series Rate Ratio Equivalents - ---------------------- ------------- ------------- ------------- Preferred Shares: 7.00% Series E 1.1128 617,266 7.00% Series H 1.4480 50,584 Preference Interests: 7.625% Series H 1.5108 287,052 7.625% Series I 1.4542 392,634 7.625% Series J 1.4108 324,484 Junior Preference Units: 8.00% Series B 1.020408 7,517 ------------- Total Convertible Preferred Equity 7.44% 1,679,537 Perpetual Preferred Equity as of September 30, 2005 (1) (Amounts in thousands except for share and per share amounts) Annual Dividend Annual Weighted Outstanding Liquidation Rate Dividend Average Series Shares/Units Value Share/Unit Amount Per Rate - -------------- ------------ ----------- ------------ -------- -------- Preferred Shares: 9 1/8% Series C 460,000 $115,000 $22.81252 $10,494 8.60% Series D 700,000 175,000 21.50 15,050 8.29% Series K 1,000,000 50,000 4.145 4,145 6.48% Series N 600,000 150,000 16.20 9,720 Preference Interests: 7.875% Series G 510,000 25,500 3.9375 2,008 ------------ ----------- -------- Total Perpetual Preferred Equity 3,270,000 $515,500 $41,417 8.03% (1) Excludes $125.0 million for the 9 1/8% Series B Preferred Shares which was redeemed for cash on 10/17/05 and was included in rents received in advance and other liabilities in the consolidated balance sheets at 9/30/05. Common Share and Operating Partnership Unit (OP Unit) Weighted Average Amounts Outstanding YTD 3Q05 YTD 3Q04 3Q05 3Q04 ------------ ------------ ------------ ------------ Weighted Average Amounts Outstanding for Net Income Purposes: Common Shares - basic 285,331,211 278,876,118 286,181,532 280,167,146 Shares issuable from assumed conversion/ vesting of: - OP Units 20,839,532 21,052,706 20,733,194 20,732,726 - share options/ restricted shares 4,040,522 2,809,917 4,648,912 3,127,725 ------------ ------------ ------------ ------------ Total Common Shares and OP Units - diluted 310,211,265 302,738,741 311,563,638 304,027,597 Weighted Average Amounts Outstanding for FFO Purposes: OP Units - basic 20,839,532 21,052,706 20,733,194 20,732,726 Common Shares - basic 285,331,211 278,876,118 286,181,532 280,167,146 ------------ ------------ ------------ ------------ Total Common Shares and OP Units - basic 306,170,743 299,928,824 306,914,726 300,899,872 Shares issuable from assumed conversion/ vesting of: - convertible preferred shares/units 803,417 2,450,609 708,559 2,287,258 - share options/ restricted shares 4,040,522 2,809,917 4,648,912 3,127,725 ------------ ------------ ------------ ------------ Total Common Shares and OP Units - diluted 311,014,682 305,189,350 312,272,197 306,314,855 Period Ending Amounts Outstanding: OP Units 20,606,812 Common Shares 288,165,764 ------------ Total Common Shares and OP Units 308,772,576 - ---------------------------------------------------------------------- Unconsolidated Entities as of September 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 25.0% 10.7% Company's share of outstanding debt (2) $121,200 $2,847 $124,047 -------------- ----------- --------- Operating information for the nine-months ended 9/30/05 (at 100%): Operating revenue $70,023 $6,645 $76,668 Operating expenses 31,723 3,490 35,213 -------------- ----------- --------- Net operating income 38,300 3,155 41,455 Depreciation 16,391 1,421 17,812 Other 286 2 288 -------------- ----------- --------- Operating income 21,623 1,732 23,355 Interest and other income 300 27 327 Interest: Expense incurred, net (28,085) (1,553) (29,638) Amortization of deferred financing costs (463) (136) (599) -------------- ----------- --------- Net (loss) income $(6,625) $70 $(6,555) ============== =========== ========= (1) Totals exclude Fort Lewis Military Housing consisting of one property and 3,733 units, which is not accounted for under the equity method of accounting, but is included in the Company's property/unit counts at September 30, 2005. (2) All debt is non-recourse to the Company. Consolidated Development Projects as of September 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 $95,479 Union Station Los Angeles, CA 278 57,727 39,711 Indian Ridge Waltham, MA 264 47,032 42,538 Bella Vista III (3) Woodland Hills, CA 264 70,649 30,817 Vintage Ontario, CA 300 52,412 13,896 ------------------------------ Total Projects Under Development 1,465 339,767 222,441 Completed Not Stabilized: - ------------- 1210 Massachusetts Washington, D.C. Ave. (Sovereign Park) 144 39,702 39,441 ------------------------------ Total Projects Completed Not Stabilized 144 39,702 39,441 Completed And Stabilized During the Quarter: - ------------------------ City View at the Lombard, IL Highlands (3) 403 65,539 64,932 ------------------------------ Total Projects Completed And Stabilized During the Quarter 403 65,539 64,932 ------------------------------ Total Projects 2,012 $445,008 $326,814 ============================== Projects Location Percentage Percentage Percentage Completed Leased Occupied - ---------------------------------------------------------------------- Projects Under Development - -------------- 2400 M St Washington, D.C. 85% - - Union Station Los Angeles, CA 59% - - Indian Ridge Waltham, MA 96% 53% 51% Bella Vista III (3) Woodland Hills, CA 15% - - Vintage Ontario, CA 4% - - Total Projects Under Development Completed Not Stabilized: - ------------- 1210 Massachusetts Washington, D.C. Ave. (Sovereign Park) 100% 92% 90% Completed And Stabilized During the Quarter: - ------------------------ City View at the Lombard, IL Highlands (3) 100% 99% 97% Estimated Estimated Completion Stabilization Projects Location 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 Vintage Ontario, CA 1Q 2007 4Q 2007 Completed Not Stabilized: - ------------- 1210 Massachusetts Washington, D.C. Completed 4Q 2005 Ave. (Sovereign Park) Completed And Stabilized During the Quarter: - ------------------------ City View at the Lombard, IL Completed 3Q 2005 Highlands (3) Total Capital Q3 2005 NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS Cost (1) NOI -------------------- Projects Under Development $339,767 $50 Completed Not Stabilized 39,702 284 Completed And Stabilized During the Quarter 65,539 726 -------------------- Total Development/Newly Stabilized NOI Contribution $445,008 $1,060 ==================== (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, $129.1 million has been transferred to land and depreciable property and $197.7 million is currently reflected as construction in progress ("CIP"). The remaining $133.3 million of CIP represents land held for future development and related costs and land and related development costs for uncompleted condominium projects. Of the $118.2 million remaining to be invested, $77.4 million will be funded through third party construction mortgages. (3) Projects are wholly owned. All others are partially owned. Consolidated Condominium Conversion Projects as of September 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 Q1 2006 942 813 30 99 Venetian I & II Phoenix, AZ Q1 2004 Q4 2005 264 218 46 - Watermarke (1) Irvine, CA Q3 2004 Q1 2006 535 426 77 32 Atlas (1) Washington, DC Q4 2004 Q1 2006 141 106 22 13 Grand Plantation, Marquis FL Q4 2004 Q1 2006 198 71 126 1 Tuscany Scottsdale, Villas AZ Q4 2004 Q1 2006 180 79 100 1 Fairway Pembroke Greens Pines, FL Q1 2005 Q2 2006 152 - 131 21 Magnuson Pointe Seattle, WA Q1 2005 Q2 2006 105 - 32 73 Timber Ridge Woodinville, WA Q1 2005 Q1 2007 203 - 18 185 Braewood Bothell, WA Q2 2005 Q2 2006 84 - - 84 Fifth Avenue North Seattle, WA Q2 2005 Q2 2006 62 - - 62 Milano Scottsdale, Terrace AZ Q2 2005 Q3 2006 224 - - 224 South Palm Place Tamarac, FL Q2 2005 Q4 2006 208 - - 208 ----------------------------- 3,298 1,713 582 1,003 Closed Out - ---------- Country Club Mill Creek, Estates WA Q1 2004 Q2 2005 151 151 - - Grand Oasis Coral Springs, FL Q2 2004 Q2 2005 198 198 - - Sterling Bellevue, Heights WA Q2 2004 Q2 2005 116 116 - - Verona Scottsdale, AZ Q2 2004 Q2 2005 108 108 - - Radius at Washington, Logan Circle DC (1) Q2 2004 Q3 2005 170 170 - - Riviera Coconut Palms (2) Creek, FL Q2 2005 Q3 2005 248 248 - - Projects closed out prior to 2005 388 388 - - ----------------------------- 1,379 1,379 - - Totals 19 4,677 3,092 582 1,003 ============================= 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 Q1 2006 166 $ 24,993 $ 3,891 Venetian I & II Phoenix, AZ Q1 2004 Q4 2005 125 24,490 6,879 Watermarke (1) Irvine, CA Q3 2004 Q1 2006 381 165,565 17,160 Atlas (1) Washington, DC Q4 2004 Q1 2006 106 60,131 5,858 Grand Plantation, Marquis FL Q4 2004 Q1 2006 71 12,277 3,815 Tuscany Scottsdale, Villas AZ Q4 2004 Q1 2006 79 13,046 4,185 Fairway Pembroke Greens Pines, FL Q1 2005 Q2 2006 - - - Magnuson Seattle, WA Q1 2005 Q2 2006 Pointe - - - Timber Ridge Woodinville, WA Q1 2005 Q1 2007 - - - Braewood Bothell, WA Q2 2005 Q2 2006 - - - Fifth Avenue North Seattle, WA Q2 2005 Q2 2006 - - - Milano Scottsdale, Terrace AZ Q2 2005 Q3 2006 - - - South Palm Place Tamarac, FL Q2 2005 Q4 2006 - - - ----------------------------- 928 300,502 41,788 Closed Out - ---------- Country Club Mill Creek, Estates WA Q1 2004 Q2 2005 86 14,883 2,850 Grand Oasis Coral Springs, FL Q2 2004 Q2 2005 89 12,875 3,430 Sterling Bellevue, Heights WA Q2 2004 Q2 2005 76 16,083 2,991 Verona Scottsdale, AZ Q2 2004 Q2 2005 108 16,092 3,314 Radius at Washington, Logan Circle DC (1) Q2 2004 Q3 2005 54 21,837 3,676 Riviera Coconut Palms (2) Creek, FL Q2 2005 Q3 2005 248 45,880 4,568 Projects closed out prior to 2005 - - (103) ----------------------------- 661 127,650 20,726 Totals 19 1,589 $428,152 $ 62,514 ============================= Gross incremental gain on sales of condominium units $ 62,514 Provision for income taxes (5,847) ------------ Net incremental gain on sales of condominium units 56,667 Property management and general and administrative expenses (2,174) Discontinued operating income 1,193 ------------ Net Income - Condominium Division (3) $ 55,686 ============ 3Q 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 Q1 2006 70 $ 11,131 $ 1,836 Venetian I & II Phoenix, AZ Q1 2004 Q4 2005 70 13,563 3,958 Watermarke (1) Irvine, CA Q3 2004 Q1 2006 172 73,403 8,326 Atlas (1) Washington, DC Q4 2004 Q1 2006 106 60,131 5,858 Grand Plantation, Marquis FL Q4 2004 Q1 2006 71 12,277 3,815 Tuscany Scottsdale, Villas AZ Q4 2004 Q1 2006 79 13,046 4,185 Fairway Pembroke Greens Pines, FL Q1 2005 Q2 2006 - - - Magnuson Pointe Seattle, WA Q1 2005 Q2 2006 - - - Timber Woodinville, Ridge WA Q1 2005 Q1 2007 - - - Braewood Bothell, WA Q2 2005 Q2 2006 - - - Fifth Avenue North Seattle, WA Q2 2005 Q2 2006 - - - Milano Scottsdale, Terrace AZ Q2 2005 Q3 2006 - - - South Palm Place Tamarac, FL Q2 2005 Q4 2006 - - - ------------------------------ 568 183,551 27,978 Closed Out - ---------- Country Club Mill Creek, Estates WA Q1 2004 Q2 2005 - - (17) Grand Oasis Coral Springs, FL Q2 2004 Q2 2005 - - (43) Sterling Bellevue, Heights WA Q2 2004 Q2 2005 - - 12 Verona Scottsdale, AZ Q2 2004 Q2 2005 - - (20) Radius at Logan Washington, Circle (1) DC Q2 2004 Q3 2005 1 400 449 Riviera Coconut Palms (2) Creek, FL Q2 2005 Q3 2005 248 45,880 4,568 Projects closed out prior to 2005 - - (32) ------------------------------ 249 46,280 4,917 Totals 19 817 $229,831 $ 32,895 ============================== Gross incremental gain on sales of condominium units $ 32,895 Provision for income taxes (5,264) ------------ Net incremental gain on sales of condominium units 27,631 Property management and general and administrative expenses (701) Discontinued operating income 943 ------------ Net Income - Condominium Division (3) $ 27,873 ============ (1) Partially owned projects; incremental gain on sale represents portion attributable to the Company. (2) Riviera Palms was purchased on May 4, 2005 and was disposed of in its entirety on September 15, 2005 (3) Excludes interest income and interest expense specific to condominium conversion projects. Maintenance Expenses and Capitalized Improvements to Real Estate For the Nine Months Ended September 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) 148,198 $69,103 $466 $61,705 $416 $130,808 $882 New Acquisition Properties (7) 23,468 11,322 574 8,093 411 19,415 985 Other (8) 7,879 10,070 7,565 17,635 -------- -------- -------- --------- Total 179,545 $90,495 $77,363 $167,858 ======== ======== ======== ========= ---------------------------------------------------- Capitalized Improvements to Real Estate ---------------------------------------------------- Avg. Building Avg. Avg. Replacements Per Improvements Per Per (4) Unit (5) Unit Total Unit ------------ ----- ----------- ----- -------- ------ Established Properties (6) $43,850 $296 $63,303 $427 $107,153 $723 New Acquisition Properties (7) 4,022 204 12,557 637 16,579 841 Other (8) 16,719 26,823 43,542 ------------ ----------- --------- Total $64,591 $102,683 $167,274 ============ =========== ========= ------------------- Total Expenditures ------------------- Avg. Grand Per Total Unit --------- --------- Established Properties (6) $237,961 $1,605 New Acquisition Properties (7) 35,994 1,826 Other (8) 61,177 --------- Total $335,132 ========= (1) Total units exclude 16,030 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 19,707 units. (8) Includes properties either Partially Owned or sold during the period, commercial space, condominium conversions and $4.5 million included in building improvements spent on eight specific assets related to major renovations and repositioning of these assets. Discontinued Operations (Amounts in thousands) Nine Months Ended Quarter Ended September 30, September 30, ----------------------- ----------------------- 2005 2004 2005 2004 ----------------------- ----------------------- REVENUES Rental income $59,432 $131,939 $12,026 $39,796 ----------- ----------- ----------- ----------- Total revenues 59,432 131,939 12,026 39,796 ----------- ----------- ----------- ----------- EXPENSES (1) Property and maintenance 25,380 49,077 5,219 14,993 Real estate taxes and insurance 8,758 15,710 1,486 4,851 Property management 338 374 135 182 Depreciation 13,028 33,530 2,182 9,951 ----------- ----------- ----------- ----------- Total expenses 47,504 98,691 9,022 29,977 ----------- ----------- ----------- ----------- Discontinued operating income 11,928 33,248 3,004 9,819 Interest and other income 210 142 64 43 Interest (2): Expense incurred, net (9,079) (10,658) (1,415) (4,258) Amortization of deferred financing costs (474) (866) (237) (316) ----------- ----------- ----------- ----------- Discontinued operations, net $2,585 $21,866 $1,416 $5,288 =========== =========== =========== =========== (1) Includes expenses paid in the current period for properties sold 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. 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) ------------------------------------------ Q4 2005 2005 -------------- -------------- Expected EPS (1) $0.39 to $0.42 $2.44 to $2.47 Add: Expected depreciation expense 0.41 1.66 Less: Expected net gain on sales (1) (0.23) (1.67) -------------- -------------- Expected FFO (2) $0.57 to $0.60 $2.43 to $2.46 ============== ============== Same-Store Assumptions ---------------------- 2005 -------------- Physical occupancy 94.3% Revenue change 3.6% Expense change 5.3% NOI change 2.5% 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. CONTACT: Equity Residential Marty McKenna, 312-928-1901 -----END PRIVACY-ENHANCED MESSAGE-----