EX-99.1 2 a5068686ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Equity Residential Reports 2005 Results; Exceeds Guidance Due to Strong Condominium Sales CHICAGO--(BUSINESS WIRE)--Jan. 31, 2006--Equity Residential (NYSE:EQR), the largest publicly traded apartment company in America, today reported results for the quarter and year ended December 31, 2005. All per share results are reported on a fully diluted basis. "As we expected, the continuing improvement in the economy, growth in jobs and diminished supply in our core markets facilitated a strong finish to 2005 and will continue to benefit Equity Residential in 2006," said David J. Neithercut, Equity Residential's President and CEO. Fourth Quarter 2005 For the quarter ended December 31, 2005, the company reported earnings of $0.74 per share compared to $0.48 per share in the fourth quarter of 2004. The quarterly increase is primarily attributable to higher gains from sales of land parcels, properties and condominiums. Funds from Operations (FFO) for the quarter ended December 31, 2005 were $0.66 per share compared to $0.56 per share in the same period of 2004. The positive variance was primarily the result of higher gains on sales of land parcels and condominiums in the quarter. The company's fourth quarter FFO exceeded the high end of the guidance provided by the company on November 1, 2005 by $0.06 per share. This excess is comprised of $0.01 per share from continued improvement in the company's same-store performance, $0.02 per share related to the company's Watermarke condominium joint venture property in California and $0.03 per share from the sale of condominium units at two of the company's Florida properties. Total revenues from continuing operations for the quarter were $518.9 million compared to $451.9 million in the fourth quarter of 2004. The primary components of this $67.0 million increase in revenues include the properties purchased after January 1, 2005 as well as a $25.1 million increase in same-store revenues. Year Ended December 31, 2005 For the year ended December 31, 2005, the company reported earnings of $2.79 per share compared to $1.48 per share in the same period of 2004. The annual increase 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 year ended December 31, 2005 was $2.52 per share compared to $2.14 per share in the same period of 2004. Total revenues from continuing operations for the year ended December 31, 2005 were $1.95 billion compared to $1.75 billion in the same period of 2004. Same-Store Results On a same-store fourth quarter to fourth quarter comparison, which includes 163,196 apartment units, revenues increased 5.9 percent, expenses increased 5.2 percent and NOI increased 6.4 percent. On a sequential same-store comparison for these same 163,196 apartment units from third quarter 2005 to fourth quarter 2005, revenues increased 1.3 percent, expenses decreased 4.0 percent and NOI increased 5.2 percent. On a same-store year to year comparison, which includes 154,854 apartment units, revenues increased 3.9 percent, expenses increased 5.6 percent and NOI increased 2.8 percent. Acquisitions/Dispositions "2005 was a tremendous year of progress towards our goal of adding high-quality, well-located assets to our portfolio, with acquisitions of over $2.5 billion," said Mr. Neithercut. "We also sold more than $1.9 billion of properties that were older or in slower growth markets, receiving good pricing and furthering our goal of reducing the number of markets in which we operate. In 2006 we will continue to work towards these goals with $1.5 billion in anticipated acquisitions and $1.5 billion in planned dispositions." During the fourth quarter of 2005, the company acquired 15 properties, consisting of 4,891 apartment units, for an aggregate purchase price of $1.4 billion at an average capitalization (cap) rate of 4.7 percent and four land parcels for $91.6 million. Also during the quarter, the company sold 11 properties, consisting of 2,636 apartment units, for an aggregate sale price of $274.6 million at an average cap rate of 5.2 percent and three land parcels for $72.0 million. In addition, the company sold 652 condominium units for $165.2 million. In the year ended December 31, 2005, the company acquired 41 properties, consisting of 12,059 apartment units, for an aggregate purchase price of $2.5 billion at an average cap rate of 5.1 percent and seven land parcels for $138.3 million. In addition, the company sold 50 properties, consisting of 12,848 apartment units, for an aggregate sale price of $1.4 billion at an average cap rate of 5.0 percent. In addition, the company sold 2,241 condominium units for $593.3 million and five land parcels for $108.3 million. First Quarter 2006 Results Equity Residential expects to announce first quarter 2006 results on Tuesday, May 2, 2006 and host a conference call to discuss those results at 10:00 a.m. CT on Wednesday, May 3, 2006. Equity Residential, an S&P 500 company, is the largest publicly traded apartment company in America. Nationwide, Equity Residential owns or has investments in 926 properties in 31 states and the District of Columbia consisting of 197,404 apartment units. For more information on Equity Residential, please visit our website at www.equityresidential.com. Forward-Looking Statements In addition to historical information, this press release contains forward-looking statements and information within the meaning of the federal securities laws. These statements are based on current expectations, estimates, projections and assumptions made by management. While Equity Residential's management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, including, without limitation, changes in general economic conditions, including the rate of job growth and cost of labor and construction material, the level of new multifamily construction and development, competition and local government regulation. Other risks and uncertainties are described under the heading "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityresidential.com. Many of these uncertainties and risks are difficult to predict and beyond management's control. Forward-looking statements are not guarantees of future performance, results or events. Equity Residential assumes no obligation to update or supplement forward-looking statements because of subsequent events. A live web cast of the company's conference call discussing these results and outlook for 2006 will take place Wednesday, February 1, 2006 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) Year Ended Quarter Ended December 31, December 31, ----------------------- ----------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- REVENUES Rental income $1,943,789 $1,742,028 $516,227 $449,416 Fee and asset management 11,148 11,796 2,692 2,528 ----------- ----------- ----------- ----------- Total revenues 1,954,937 1,753,824 518,919 451,944 ----------- ----------- ----------- ----------- EXPENSES Property and maintenance 544,495 477,605 140,314 122,020 Real estate taxes and insurance 224,400 205,173 64,920 48,843 Property management 84,307 77,093 22,723 20,589 Fee and asset management 9,852 8,814 2,520 2,347 Depreciation 508,140 445,374 136,752 117,324 General and administrative 71,799 49,299 25,385 14,188 ----------- ----------- ----------- ----------- Total expenses 1,442,993 1,263,358 392,614 325,311 ----------- ----------- ----------- ----------- Operating income 511,944 490,466 126,305 126,633 Interest and other income 68,517 8,957 3,553 2,117 Interest: Expense incurred, net (384,021) (328,289) (103,013) (86,110) Amortization of deferred financing costs (6,570) (6,057) (1,696) (1,485) ----------- ----------- ----------- ----------- Income before allocation to Minority Interests, income (loss) from investments in unconsolidated entities, net gain on sales of unconsolidated entities and land parcels and discontinued operations 189,870 165,077 25,149 41,155 Allocation to Minority Interests: Operating Partnership (58,514) (31,228) (15,454) (10,005) Preference Interests (7,591) (19,420) (1,160) (4,262) Junior Preference Units (15) (70) (4) (3) Partially Owned Properties 801 1,787 129 680 Premium on redemption of Preference Interests (4,134) (1,117) - - Income (loss) from investments in unconsolidated entities 470 (7,325) 920 143 Net gain on sales of unconsolidated entities 1,330 4,593 1,206 186 Net gain on sales of land parcels 30,245 5,482 19,879 - ----------- ----------- ----------- ----------- Income from continuing operations 152,462 117,779 30,665 27,894 Net gain on sales of discontinued operations 697,655 318,443 194,602 116,272 Discontinued operations, net 11,676 36,107 619 6,467 ----------- ----------- ----------- ----------- Net income 861,793 472,329 225,886 150,633 Preferred distributions (49,642) (53,746) (10,638) (13,075) Premium on redemption of Preferred Shares (4,359) - (43) - ----------- ----------- ----------- ----------- Net income available to Common Shares $807,792 $418,583 $215,205 $137,558 =========== =========== =========== =========== Earnings per share - basic: Income from continuing operations available to Common Shares $0.51 $0.32 $0.12 $0.08 =========== =========== =========== =========== Net income available to Common Shares $2.83 $1.50 $0.75 $0.49 =========== =========== =========== =========== Weighted average Common Shares outstanding 285,760 279,744 287,033 282,329 =========== =========== =========== =========== Earnings per share - diluted: Income from continuing operations available to Common Shares $0.51 $0.31 $0.11 $0.08 =========== =========== =========== =========== Net income available to Common Shares $2.79 $1.48 $0.74 $0.48 =========== =========== =========== =========== Weighted average Common Shares outstanding 310,785 303,871 312,408 306,841 =========== =========== =========== =========== Distributions declared per Common Share outstanding $1.74 $1.73 $0.4425 $0.4325 =========== =========== =========== =========== EQUITY RESIDENTIAL CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS (Amounts in thousands except per share data) Year Ended Quarter Ended December 31, December 31, ----------------------- ----------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- Net income $861,793 $472,329 $225,886 $150,633 Allocation to Minority Interests - Operating Partnership 58,514 31,228 15,454 10,005 Adjustments: Depreciation 508,140 445,374 136,752 117,324 Depreciation - Non- real estate additions (5,752) (5,574) (1,824) (1,549) Depreciation - Partially Owned and Unconsolidated Properties 2,487 1,903 351 (926) Net (gain) on sales of unconsolidated entities (1,330) (4,593) (1,206) (186) Discontinued operations: Depreciation 20,818 51,209 1,055 11,377 Net (gain) on sales of discontinued operations (697,655) (318,443) (194,602) (116,272) Net incremental gain on sales of condominium units 91,611 32,054 34,944 16,385 ----------- ----------- ----------- ----------- FFO (1)(2) 838,626 705,487 216,810 186,791 Preferred distributions (49,642) (53,746) (10,638) (13,075) Premium on redemption of Preferred Shares (4,359) - (43) - ----------- ----------- ----------- ----------- FFO available to Common Shares and OP Units - basic $784,625 $651,741 $206,129 $173,716 =========== =========== =========== =========== FFO available to Common Shares and OP Units - diluted $785,818 $655,177 $206,387 $174,291 =========== =========== =========== =========== FFO per share and OP Unit - basic $2.56 $2.17 $0.67 $0.57 =========== =========== =========== =========== FFO per share and OP Unit - diluted $2.52 $2.14 $0.66 $0.56 =========== =========== =========== =========== Weighted average Common Shares and OP Units outstanding - basic 306,579 300,683 307,792 302,931 =========== =========== =========== =========== Weighted average Common Shares and OP Units outstanding - diluted 311,553 306,075 313,071 308,317 =========== =========== =========== =========== (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) December 31, December 31, 2005 2004 ------------- ------------- ASSETS Investment in real estate Land $2,848,601 $2,183,818 Depreciable property 13,336,636 12,350,900 Construction in progress (including land) 405,133 317,903 ------------- ------------- Investment in real estate 16,590,370 14,852,621 Accumulated depreciation (2,888,140) (2,599,827) ------------- ------------- Investment in real estate, net 13,702,230 12,252,794 Cash and cash equivalents 88,828 83,505 Investments in unconsolidated entities 6,838 11,461 Rents receivable 789 1,681 Deposits - restricted 77,093 82,194 Escrow deposits - mortgage 35,225 35,800 Deferred financing costs, net 40,636 34,986 Goodwill, net 30,000 30,000 Other assets 117,306 112,854 ------------- ------------- Total assets $14,098,945 $12,645,275 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgage notes payable $3,379,289 $3,166,739 Notes, net 3,442,784 3,143,067 Lines of credit 769,000 150,000 Accounts payable and accrued expenses 108,855 87,422 Accrued interest payable 78,441 70,411 Rents received in advance and other liabilities 302,418 227,588 Security deposits 54,823 49,501 Distributions payable 145,812 142,437 ------------- ------------- Total liabilities 8,281,422 7,037,165 ------------- ------------- Commitments and contingencies Minority Interests: Operating Partnership 345,034 319,841 Preference Interests 60,000 206,000 Junior Preference Units 184 184 Partially Owned Properties 16,965 9,557 ------------- ------------- Total Minority Interests 422,183 535,582 ------------- ------------- Shareholders' equity: Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized; 3,323,830 shares issued and outstanding as of December 31, 2005 and 4,108,658 shares issued and outstanding as of December 31, 2004 504,096 636,216 Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 289,536,344 shares issued and outstanding as of December 31, 2005 and 285,076,915 shares issued and outstanding as of December 31, 2004 2,895 2,851 Paid in capital 5,253,188 5,112,311 Deferred compensation - (18) Distributions in excess of accumulated earnings (350,367) (657,462) Accumulated other comprehensive loss (14,472) (21,370) ------------- ------------- Total shareholders' equity 5,395,340 5,072,528 ------------- ------------- Total liabilities and shareholders' equity $14,098,945 $12,645,275 ============= ============= Year 2005 vs. Year 2004 Year over Year Same-Store Results $ in Millions - 154,854 Same-Store Units Description Revenues Expenses (1) NOI (2) ------------ ------------ ------------ ------------ 2005 $1,636.7 $678.2 $958.5 2004 $1,574.8 $642.0 $932.8 ------------ ------------ ------------ Change $61.9 $36.2 $25.7 ============ ============ ============ Change 3.9% 5.6% 2.8% Fourth Quarter 2005 vs. Fourth Quarter 2004 Quarter over Quarter Same-Store Results $ in Millions - 163,196 Same-Store Units Description Revenues Expenses (1) NOI (2) ------------ ------------ ------------ ------------ Q4 2005 $448.4 $180.2 $268.2 Q4 2004 $423.3 $171.3 $252.0 ------------ ------------ ------------ Change $25.1 $8.9 $16.2 ============ ============ ============ Change 5.9% 5.2% 6.4% Fourth Quarter 2005 vs. Third Quarter 2005 Sequential Quarter over Quarter Same-Store Results $ in Millions - 163,196 Same-Store Units(a) Description Revenues Expenses (1) NOI (2) ------------ ------------ ------------------------- Q4 2005 $448.4 $180.2 $268.2 Q3 2005 $442.6 $187.7 $254.9 ------------ ------------ ------------ Change $5.8 $(7.5) $13.3 ============ ============ ============ Change 1.3% (4.0%) 5.2% (a) Includes the same units as the Fourth Quarter 2005 vs. Fourth Quarter 2004 Same Store results for comparability purposes. Same-Store Occupancy Statistics Year 2005 94.1% Q4 2005 94.0% Q4 2005 94.0% Year 2004 93.5% Q4 2004 93.4% Q3 2005 94.8% ----------- ----------- ----------- Change 0.6% Change 0.6% Change (0.8%) (1) December YTD 2005 and Fourth Quarter 2005 expenses exclude the uninsured property damage caused by Hurricane Wilma. December YTD 2004 and Fourth Quarter 2004 expenses exclude the uninsured property damage caused by Hurricanes Frances, Charley, Ivan and Jeanne. (2) 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 2005 vs. 2004 The following table provides a reconciliation of operating income per the consolidated statements of operations to NOI for the 2005 Same Store Properties: Year Ended December 31, --------------------------- 2005 2004 ------------- ------------- (Amounts in millions) Operating income $511.9 $490.5 Adjustments: Insurance (1) 11.1 15.2 Non-same store operating results (143.2) (64.6) Fee and asset management revenue (11.1) (11.8) Fee and asset management expense 9.9 8.8 Depreciation 508.1 445.4 General and administrative 71.8 49.3 ------------- ------------- Same store NOI $958.5 $932.8 ============= ============= Same Store NOI Reconciliation Fourth Quarter 2005 vs. Fourth Quarter 2004 The following table presents a reconciliation of operating income per the consolidated statements of operations to NOI for the Fourth Quarter 2005 Same Store Properties: Quarter Ended December 31, --------------------------- 2005 2004 ------------- ------------- (Amounts in millions) Operating income $126.3 $126.6 Adjustments: Insurance (1) 11.1 1.1 Non-same store operating results (31.2) (7.0) Fee and asset management revenue (2.7) (2.5) Fee and asset management expense 2.5 2.3 Depreciation 136.8 117.3 General and administrative 25.4 14.2 ------------- ------------- Same store NOI $268.2 $252.0 ============= ============= (1) Hurricane property damage net of reimbursement from insurance company 2005 vs. 2004 Same-Store Results by Market ---------------------------------- Increase (Decrease) from Prior Year ------------------------------------------------------------------- 2005 2005 Weighted % of Average Actual Occupancy Markets Units NOI % Revenues Expenses NOI Occupancy ------------------------------------------------------------------- 1 South Florida 9,042 6.7% 95.6% 8.4% 6.6% 9.7% 1.2% 2 Boston 5,397 6.5% 94.0% (0.6%) 6.7% (4.7%) (0.6%) 3 San Francisco Bay Area 5,990 6.2% 95.6% 3.2% 5.9% 1.7% 0.6% 4 Los Angeles 4,781 5.7% 95.4% 5.1% 7.5% 3.9% 0.5% 5 Phoenix 8,740 4.9% 94.4% 8.7% 4.1% 12.1% 3.0% 6 Atlanta 9,082 4.3% 94.3% 1.4% 3.4% (0.2%) 0.5% 7 DC Suburban Virginia 3,826 4.1% 94.4% 7.0% 3.1% 8.9% 0.0% 8 San Diego 3,486 4.1% 95.5% 4.7% 7.7% 3.3% 0.3% 9 New England (excl Boston) 6,101 4.0% 93.2% 0.5% 8.0% (4.9%) (1.3%) 10 Seattle/ Tacoma 6,092 3.7% 94.9% 5.0% 5.6% 4.5% 1.0% 11 Dallas/ Ft Worth 8,152 3.7% 94.6% 1.7% 6.1% (2.7%) 0.8% 12 Denver 6,360 3.6% 94.5% 1.6% 3.9% 0.2% 1.7% 13 DC Suburban Maryland 4,739 3.4% 93.1% 3.3% 7.1% 1.1% (0.6%) 14 Inland Empire, CA 3,504 3.4% 94.0% 6.1% 10.0% 4.2% (0.9%) 15 Orange Co 3,013 3.4% 95.4% 5.4% 8.5% 3.8% 0.4% 16 Orlando 5,382 3.3% 95.6% 10.0% 5.7% 13.0% 0.9% 17 New York Metro Area 2,430 3.2% 95.6% 6.0% 6.2% 5.8% 0.9% 18 Houston 5,282 2.4% 93.2% (0.2%) 4.7% (5.0%) 2.2% 19 Minn/ St Paul 3,826 2.3% 92.4% 2.1% 1.1% 2.9% 2.3% 20 Portland 3,849 2.1% 94.3% 5.3% 4.1% 6.2% 0.3% ---------------------------------------------------------- Top 20 Markets 109,074 81.0% 94.5% 4.1% 5.8% 3.0% 0.8% All Other Markets 45,780 19.0% 93.1% 3.3% 5.1% 1.7% 0.4% ---------------------------------------------------------- Total 154,854 100.0% 94.1% 3.9% 5.6% 2.8% 0.6% ========================================================== Fourth Quarter 2005 vs. Fourth Quarter 2004 Same-Store Results by Market ---------------------------------- Increase (Decrease) from Prior Quarter ------------------------------------------------------------------- 4Q 2005 4Q 2005 Weighted % of Average Actual Occupancy Markets Units NOI % Revenues Expenses NOI Occupancy ------------------------------------------------------------------- 1 South Florida 9,582 7.0% 96.1% 10.6% 5.3% 14.3% 1.2% 2 Boston 5,618 6.3% 94.7% 4.6% 6.9% 3.3% 1.6% 3 Los Angeles 5,630 6.3% 95.2% 6.3% 6.0% 6.5% 0.2% 4 San Francisco Bay Area 5,990 5.7% 95.1% 4.9% 5.8% 4.3% (0.1%) 5 DC Suburban Virginia 5,182 5.2% 93.7% 8.2% 5.4% 9.6% 0.4% 6 Atlanta 10,772 4.9% 94.3% 3.7% 5.5% 2.3% 0.5% 7 Phoenix 8,740 4.7% 94.8% 11.5% 0.3% 19.6% 2.3% 8 Seattle/ Tacoma 7,153 4.4% 93.6% 6.5% 4.6% 7.8% (0.8%) 9 Orlando 6,314 3.9% 94.7% 9.4% 5.3% 11.9% (1.3%) 10 New York Metro Area 2,871 3.7% 95.7% 7.9% 8.8% 7.3% 1.1% 11 San Diego 3,486 3.7% 96.4% 5.8% 6.0% 5.7% 1.0% 12 New England (excl Boston) 6,101 3.6% 91.8% 1.3% 6.4% (2.4%) (1.4%) 13 Denver 6,804 3.5% 94.0% 4.6% 3.9% 5.0% 1.8% 14 Dallas/ Ft Worth 8,152 3.3% 93.9% 2.4% 5.6% (0.8%) (0.8%) 15 Inland Empire, CA 3,504 3.2% 93.1% 7.2% 5.4% 8.2% (0.7%) 16 Orange Co 3,013 3.2% 95.8% 7.3% 4.5% 8.7% 0.7% 17 DC Suburban Maryland 4,739 3.0% 91.5% 2.9% 10.0% (1.0%) (2.0%) 18 Houston 5,282 2.3% 95.4% 5.5% 4.0% 7.2% 4.4% 19 Minn/ St Paul 3,826 2.3% 93.5% 8.3% (0.5%) 15.6% 5.3% 20 Tampa/ Ft Myers 3,976 1.9% 94.4% 11.1% 8.7% 12.9% 0.4% ---------------------------------------------------------- Top 20 Markets 116,735 82.1% 94.4% 6.4% 5.4% 7.0% 0.6% All Other Markets 46,461 17.9% 93.0% 4.2% 4.7% 3.7% 0.6% ---------------------------------------------------------- Total 163,196 100.0% 94.0% 5.9% 5.2% 6.4% 0.6% ========================================================== Fourth Quarter 2005 vs. Third Quarter 2005(a) Sequential Same-Store Results by Market ---------------------------------- Increase (Decrease) from Prior Quarter ------------------------------------------------------------------- 4Q 2005 4Q 2005 Weighted % of Average Actual Occupancy Markets Units NOI % Revenues Expenses NOI Occupancy ------------------------------------------------------------------- 1 South Florida 9,582 7.0% 96.1% 3.5% (4.6%) 9.5% 1.2% 2 Boston 5,618 6.3% 94.7% 3.8% 4.3% 3.4% (0.2%) 3 Los Angeles 5,630 6.3% 95.2% 1.6% (3.3%) 4.2% (1.0%) 4 San Francisco Bay Area 5,990 5.7% 95.1% 0.4% (3.1%) 2.5% (1.5%) 5 DC Suburban Virginia 5,182 5.2% 93.7% 0.2% (5.2%) 3.0% (1.5%) 6 Atlanta 10,772 4.9% 94.3% 1.3% (4.7%) 6.6% (0.5%) 7 Phoenix 8,740 4.7% 94.8% 3.6% (8.5%) 12.6% 0.1% 8 Seattle/ Tacoma 7,153 4.4% 93.6% 0.5% (6.2%) 5.7% (1.9%) 9 Orlando 6,314 3.9% 94.7% 1.0% (6.6%) 6.0% (1.7%) 10 New York Metro Area 2,871 3.7% 95.7% 0.9% (3.3%) 3.4% (0.7%) 11 San Diego 3,486 3.7% 96.4% 2.0% 0.7% 2.7% 0.5% 12 New England (excl Boston) 6,101 3.6% 91.8% (1.4%) (0.1%) (2.5%) (2.2%) 13 Denver 6,804 3.5% 94.0% (0.3%) (6.1%) 3.4% (1.4%) 14 Dallas/ Ft Worth 8,152 3.3% 93.9% 0.7% (4.0%) 6.3% (0.9%) 15 Inland Empire, CA 3,504 3.2% 93.1% 0.9% (7.2%) 5.3% (1.4%) 16 Orange Co 3,013 3.2% 95.8% 2.6% (2.7%) 5.3% 0.1% 17 DC Suburban Maryland 4,739 3.0% 91.5% (1.2%) (2.4%) (0.4%) (1.9%) 18 Houston 5,282 2.3% 95.4% 3.1% (6.4%) 14.6% 0.6% 19 Minn/ St Paul 3,826 2.3% 93.5% 1.6% (4.4%) 6.3% (1.5%) 20 Tampa/ Ft Myers 3,976 1.9% 94.4% 1.7% (2.5%) 5.3% (0.8%) ---------------------------------------------------------- Top 20 Markets 116,735 82.1% 94.4% 1.4% (3.8%) 5.0% (0.8%) All Other Markets 46,461 17.9% 93.0% 0.9% (4.8%) 6.3% (0.9%) ---------------------------------------------------------- Total 163,196 100.0% 94.0% 1.3% (4.0%) 5.2% (0.8%) ========================================================== (a) Includes the same units as Fourth Quarter 2005 vs. Fourth Quarter 2004 Same Store results for comparability purposes. Portfolio as of December 31, 2005 Properties Units ---------- ---------- Wholly Owned Properties 834 175,501 Partially Owned Properties (Consolidated) 35 6,004 Unconsolidated Properties 57 15,899 ---------- ---------- 926 197,404 Portfolio Rollforward 2005 Properties Units $ Millions Cap Rate ---------- ---------- ---------- ---------- 12/31/2004 939 200,149 Acquisitions: Rental Properties 41 12,059 $2,535.7 5.1% Land Parcels - - $138.3 Dispositions: Rental Properties (1) (50) (12,848) $(1,351.6) 5.0% Condominium Units (6) (2,241) $(593.3) Land Parcels - - $(108.3) Completed Developments 2 405 Unit Configuration Changes - (120) ---------- ---------- 12/31/2005 926 197,404 Portfolio Rollforward Q4 2005 Properties Units $ Millions Cap Rate ---------- ---------- ---------- ---------- 9/30/2005 922 195,575 Acquisitions: Rental Properties 15 4,891 $1,389.9 4.7% Land Parcels - - $91.6 Dispositions: Rental Properties (11) (2,636) $(274.6) 5.2% Condominium Units (1) (652) $(165.2) Land Parcels - - $(72.0) Completed Developments 1 264 Unit Configuration Changes - (38) ---------- ---------- 12/31/2005 926 197,404 (1) Cap rate was 5.5% excluding the sale of Water Terrace. Portfolio Summary As of December 31, 2005 % of % of 2006 Properties Units Total Stabilized Total Totals Units NOI Market ----------- ----------- ----------- ----------- 1 New York Metro Area 17 5,245 2.7 7.4 2 South Florida 47 10,380 5.3 6.2 3 Los Angeles 31 6,479 3.3 6.1 4 DC Northern Virginia 19 6,806 3.4 5.9 5 Seattle/Tacoma 44 10,451 5.3 5.6 6 Boston 35 6,831 3.5 5.4 7 Atlanta 62 13,032 6.6 4.9 8 San Francisco Bay Area 26 6,249 3.2 4.6 9 Phoenix 36 10,381 5.3 4.6 10 Orlando 35 7,906 4.0 4.4 11 Denver 28 8,899 4.5 4.0 12 San Diego 11 3,486 1.8 3.3 13 Inland Empire CA 14 4,355 2.2 3.3 14 Dallas/Ft Worth 33 9,769 4.9 3.2 15 DC Suburban Maryland 25 5,559 2.8 3.1 16 New England (excl Boston) 43 6,009 3.0 3.0 17 Orange County 8 3,013 1.5 2.8 18 Jacksonville 23 4,915 2.5 2.2 19 Houston 17 5,282 2.7 2.0 20 Minneapolis/St Paul 18 3,982 2.0 1.9 ----------- ----------- ----------- ----------- Top 20 Total 572 139,029 70.5 83.9 21 Tampa/Ft Myers 27 4,694 2.3 1.7 22 Portland OR 12 4,153 2.1 1.7 23 Chicago 8 2,937 1.5 1.4 24 Raleigh/Durham 16 4,100 2.1 1.4 25 Austin 12 3,671 1.8 1.2 26 Southeastern Michigan 20 2,593 1.3 1.0 27 Nashville 11 2,729 1.4 1.0 28 Charlotte 11 3,391 1.7 0.9 29 Central Valley CA 10 1,595 0.8 0.5 30 Other EQR 21 5,494 2.8 1.4 31 Other Lexford 188 17,096 8.7 3.9 ----------- ----------- ----------- ----------- Total 908 191,482 97.0 100.0 Condominium Conversion 17 2,229 1.1 0.0 Military Housing 1 3,693 1.9 0.0 ----------- ----------- ----------- ----------- Grand Total 926 197,404 100.0 100.0 =========== =========== =========== =========== Debt Summary as of December 31, 2005 Weighted $ Millions (1) Average Rate (1) ---------------- ---------------- Secured $3,379 5.63% Unsecured 4,212 5.89% ---------------- ---------------- Total $7,591 5.76% Fixed Rate $5,700 6.32% Floating Rate 1,891 3.75% ---------------- ---------------- Total $7,591 5.76% Above Totals Include: --------------------- Tax Exempt: Fixed $135 4.02% Floating 629 2.95% ---------------- ---------------- Total $764 3.25% Unsecured Revolving Credit Facilities $769 3.80% (1) Net of the effect of any derivative instruments. Debt Maturity Schedule as of December 31, 2005 Year $ Millions % of Total -------------- -------------- -------------- 2006 (1) $774 10.2% 2007 389 5.1% 2008 (2) 1,175 15.5% 2009 862 11.4% 2010 264 3.5% 2011 805 10.6% 2012 537 7.1% 2013 568 7.5% 2014 505 6.6% 2015+ 1,712 22.5% -------------- -------------- Total $7,591 100.0% (1) Includes $150.0 million of 7.57% unsecured debt with a final maturity of 2026 that is putable in 2006. Also includes $215.0 million outstanding on the Company's short-term $600.0 million unsecured revolving credit facility. This facility was terminated on January 20, 2006 in conjunction with the Company's $400.0 million unsecured note issuance which closed on January 19, 2006. (2) Includes $554.0 million outstanding on the Company's long-term unsecured revolving credit facility, which matures on May 29, 2008. Selected Unsecured Public Debt Covenants December 31, December 31, 2005 2004 ------------ ------------ Total Debt to Adjusted Total Assets (not to exceed 60%) 44.9% 42.5% Secured Debt to Adjusted Total Assets (not to exceed 40%) 20.0% 20.8% Consolidated Income Available For Debt Service To Maximum Annual Service Charges (must be at least 1.5 to 1) 2.84 2.97 Total Unsecured Assets to Unsecured Debt (must be at least 150%) 261.4% 278.1% 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 December 31, 2005 (Amounts in thousands except for share and per share amounts) Secured Debt $3,379,289 45% Unsecured Debt 3,442,784 45% Lines of Credit 769,000 10% ------------ ---- Total Debt 7,591,073 100% 37% Common Shares 289,536,344 93% OP Units 20,424,245 7% ------------ ---- Total Shares and OP Units 309,960,589 100% Common Share Equivalents (see below) 1,650,760 ------------ Total outstanding at quarter-end 311,611,349 Common Share Price at December 31, 2005 $39.12 ------------ 12,190,236 96% Perpetual Preferred Equity (see below) 515,500 4% ------------ ---- Total Equity 12,705,736 100% 63% Total Market Capitalization $20,296,809 100% Convertible Preferred Equity as of December 31, 2005 (Amounts in thousands except for share and per share amounts) Annual Dividend Redemption Outstanding Liquidation Rate Per Series Date Shares/Units Value Share/Unit ----------------- ------------- ------------ ------------ ------------ Preferred Shares: 7.00% Series E 11/1/98 529,096 $13,228 $1.75 7.00% Series H 6/30/98 34,734 868 1.75 Preference Interests: 7.625% Series H 3/23/06 190,000 9,500 3.8125 7.625% Series I 6/22/06 270,000 13,500 3.8125 7.625% Series J 12/14/06 230,000 11,500 3.8125 Junior Preference Units: 8.00% Series B 7/29/09 7,367 184 2.00 ------------ ------------ Total Convertible Preferred Equity 1,261,197 $48,780 Annual Weighted Common Dividend Average Conversion Share Series Amount Rate Ratio Equivalents ----------------- ------------- ------------ ------------ ------------ Preferred Shares: 7.00% Series E $926 1.1128 588,778 7.00% Series H 61 1.4480 50,295 Preference Interests: 7.625% Series H 724 1.5108 287,052 7.625% Series I 1,029 1.4542 392,634 7.625% Series J 877 1.4108 324,484 Junior Preference Units: 8.00% Series B 15 1.020408 7,517 ------------ ------------ Total Convertible Preferred Equity $3,632 7.44% 1,650,760 Perpetual Preferred Equity as of December 31, 2005 (Amounts in thousands except for share and per share amounts) Redemption Outstanding Liquidation Series Date Shares/Units Value ------------------------------ ------------- ------------ ------------ Preferred Shares: 9 1/8% Series C 9/9/06 460,000 $115,000 8.60% Series D 7/15/07 700,000 175,000 8.29% Series K 12/10/26 1,000,000 50,000 6.48% Series N 6/19/08 600,000 150,000 Preference Interests: 7.875% Series G 3/21/06 510,000 25,500 ------------ ------------ Total Perpetual Preferred Equity 3,270,000 $515,500 Annual Dividend Annual Weighted Rate Per Dividend Average Series Share/Unit Amount Rate ------------------------------ ------------- ------------ ------------ Preferred Shares: 9 1/8% Series C $22.81252 $10,494 8.60% Series D 21.50 15,050 8.29% Series K 4.145 4,145 6.48% Series N 16.20 9,720 Preference Interests: 7.875% Series G 3.9375 2,008 ------------ Total Perpetual Preferred Equity $41,417 8.03% Common Share and Operating Partnership Unit (OP Unit) Weighted Average Amounts Outstanding 2005 2004 4Q05 4Q04 ------------ ------------ ------------ ------------ Weighted Average Amounts Outstanding for Net Income Purposes: Common Shares - basic 285,760,114 279,744,163 287,032,842 282,329,423 Shares issuable from assumed conversion/ vesting of: - OP Units 20,819,217 20,939,266 20,758,907 20,601,420 - share options/ restricted shares 4,205,901 3,188,048 4,616,552 3,909,787 ------------ ------------ ------------ ------------ Total Common Shares and OP Units - diluted 310,785,232 303,871,477 312,408,301 306,840,630 Weighted Average Amounts Outstanding for FFO Purposes: OP Units - basic 20,819,217 20,939,266 20,758,907 20,601,420 Common Shares - basic 285,760,114 279,744,163 287,032,842 282,329,423 ------------ ------------ ------------ ------------ Total Common Shares and OP Units - basic 306,579,331 300,683,429 307,791,749 302,930,843 Shares issuable from assumed conversion/vesting of: - convertible preferred shares/units 767,878 2,203,785 662,414 1,476,195 - share options/ restricted shares 4,205,901 3,188,048 4,616,552 3,909,787 ------------ ------------ ------------ ------------ Total Common Shares and OP Units - diluted 311,553,110 306,075,262 313,070,715 308,316,825 Period Ending Amounts Outstanding: OP Units 20,424,245 Common Shares 289,536,344 ------------ Total Common Shares and OP Units 309,960,589 Unconsolidated Entities as of December 31, 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 1,360 12,206 (1) ------------- ------------- ------------- Company's ownership percentage 25.0% 11.0% Company's share of outstanding debt (2) $121,200 $2,602 $123,802 ------------- ------------- ------------- Operating information for the year ended 12/31/05 (at 100%): Operating revenue $94,025 $8,700 $102,725 Operating expenses 42,273 4,607 46,880 ------------- ------------- ------------- Net operating income 51,752 4,093 55,845 Depreciation 21,901 1,856 23,757 Other 437 2 439 ------------- ------------- ------------- Operating income 29,414 2,235 31,649 Interest and other income 414 41 455 Interest: Expense incurred, net (37,443) (2,020) (39,463) Amortization of deferred financing costs (617) (178) (795) ------------- ------------- ------------- Net (loss) income $(8,232) $78 $(8,154) ============= ============= ============= (1) Totals exclude Fort Lewis Military Housing consisting of one property and 3,693 units, which is not accounted for under the equity method of accounting, but is included in the Company's property/unit counts at December 31, 2005. (2) All debt is non-recourse to the Company. Consolidated Development Projects as of December 31, 2005 (Amounts in thousands except for project and unit amounts) Total Book Total Value To No. of Capital Date Projects Location Units Cost (1) (1)(2) ---------------------------------------------------------------------- Projects Under Development -------------- 2400 M St Washington, D.C. 359 $111,947 $104,336 Union Station Los Angeles, CA 278 62,030 46,343 Bella Vista Woodland Hills, CA III (3) 264 71,139 35,315 Vintage Ontario, CA 300 52,412 17,105 Highland Westwood, MA Glen II (3) 102 21,620 1,997 Silver Spring Silver Spring, MD 457 145,224 19,091 --------------------------------- Total Projects Under Development 1,760 464,372 224,187 Completed Not Stabilized: -------------- Indian Ridge Waltham, MA 264 47,032 44,840 --------------------------------- Total Projects Completed Not Stabilized 264 47,032 44,840 Completed And Stabilized During the Quarter: ------------- 1210 Washington, D.C. Massachusetts Ave. (Sovereign Park) 144 39,702 39,527 --------------------------------- Total Projects Completed And Stabilized During the Quarter 144 39,702 39,527 --------------------------------- Total Projects 2,168 $551,106 $308,554 ================================= Percentage Percentage Percentage Projects Location Completed Leased Occupied ---------------------------------------------------------------------- Projects Under Development -------------- 2400 M St Washington, D.C. 97% - - Union Station Los Angeles, CA 73% - - Bella Vista Woodland Hills, CA III (3) 26% - - Vintage Ontario, CA 9% - - Highland Westwood, MA Glen II (3) 1% - - Silver Spring Silver Spring, MD 1% - - Total Projects Under Development Completed Not Stabilized: -------------- Indian Ridge Waltham, MA 100% 78% 72% Total Projects Completed Not Stabilized Completed And Stabilized During the Quarter: ----------------------------------- 1210 Washington, D.C. Massachusetts Ave. (Sovereign Park) 100% 93% 92% NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS Total Capital Q4 2005 Cost (1) NOI Projects Under Development $464,372 $(5) Completed Not Stabilized 47,032 375 Completed And Stabilized During the Quarter 39,702 566 Total Development/Newly Stabilized NOI Contribution $551,106 $936 Estimated Estimated Projects Location Completion Date Stabilization Date ---------------------------------------------------------------------- Projects Under Development -------------- 2400 M St Washington, D.C. 2Q 2006 3Q 2007 Union Station Los Angeles, CA 2Q 2006 4Q 2006 Bella Vista Woodland Hills, CA 4Q 2006 3Q 2007 III (3) Vintage Ontario, CA 1Q 2007 4Q 2007 Highland Westwood, MA 1Q 2007 4Q 2007 Glen II (3) Silver Spring Silver Spring, MD 1Q 2008 4Q 2009 Total Projects Under Development Completed Not Stabilized: -------------- Indian Ridge Waltham, MA Completed 3Q 2006 Total Projects Completed Not Stabilized Completed And Stabilized During the Quarter: ----------------------------------- 1210 Washington, D.C. Completed Stabilized Massachusetts Ave. (Sovereign Park) (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, $83.8 million has been transferred to land and depreciable property and $224.8 million is currently reflected as construction in progress ("CIP"). The remaining $180.5 million of CIP represents land held for future development and related costs and land and related development costs for uncompleted condominium projects. Of the $242.6 million remaining to be invested, $55.5 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 December 31, 2005 (Amounts in thousands except for project and unit amounts) Units ----------------------------- Available for Sale ---------------- Estimated Project Close Sold Start Out Units Not Avail- Projects Location Date(1) Date Total Closed Closed able ---------------------------------------------------------------------- For Sale -------- Four Lakes Lisle, IL Q4 2001 Q1 2006 942 896 16 30 Venetian I Phoenix, AZ Q1 2004 Q1 2006 & II 264 263 1 - Atlas (2) Washington, Q4 2004 Q1 2006 DC 141 135 3 3 Grand Plantation, Q4 2004 Q1 2006 Marquis FL 198 182 16 - Tuscany Scottsdale, Q4 2004 Q1 2006 Villas AZ 180 178 2 - Fairway Pembroke Q1 2005 Q2 2006 Greens Pines, FL 152 103 41 8 Magnuson Seattle, WA Q1 2005 Q4 2006 Pointe 105 35 15 55 Timber Ridge Woodin- Q1 2005 Q1 2007 ville, WA 203 28 21 154 Milano Scottsdale, Q2 2005 Q4 2006 Terrace AZ 224 10 86 128 Braewood Bothell, WA Q2 2005 Q4 2006 84 - - 84 Fifth Avenue Seattle, WA Q2 2005 Q4 2006 North 62 - - 62 South Palm Tamarac, FL Q2 2005 Q1 2007 Place 208 - - 208 Parkside Seattle, WA Q4 2005 Q4 2006 44 - - 44 Chantecleer Naperville, Q4 2005 Q4 2007 Lakes IL 304 - - 304 Oaks at Falls Q4 2005 Q2 2007 Falls Church, VA Church 176 - - 176 Bella Vista Phoenix, AZ Q4 2005 Q2 2007 248 - - 248 Regency Park Centre- Q4 2005 Q3 2007 ville, VA 252 - - 252 Alameda Scottsdale, Q4 2005 Q3 2007 Ranch AZ 272 - - 272 ----------------------------- 4,059 1,830 201 2,028 Closed Out ---------- Country Club Mill Creek, Q1 2004 Q2 2005 Estates WA 151 151 - - Grand Oasis Coral Q2 2004 Q2 2005 Springs, FL 198 198 - - Sterling Bellevue, Q2 2004 Q2 2005 Heights WA 116 116 - - Verona Scottsdale, Q2 2004 Q2 2005 AZ 108 108 - - Radius at Washington, Q2 2004 Q3 2005 Logan DC Circle (2) 170 170 - - Riviera Coconut Q2 2005 Q3 2005 Palms (3) Creek, FL 248 248 - - Watermarke Irvine, CA Q3 2004 Q4 2005 (2) 535 535 - - Projects closed out prior to 2005 388 388 - - ----------------------------- 1,914 1,914 - - Totals 25 5,973 3,744 201 2,028 ============================= 2005 YTD Activity ----------------------------- Estimated Project Close FFO Start Out Units Sales Incremental Projects Location Date(1) Date Closed Price Gain on Sale ---------------------------------------------------------------------- For Sale -------- Four Lakes Lisle, IL Q4 2001 Q1 2006 249 $ 37,834 $ 4,646 Venetian I Phoenix, AZ Q1 2004 Q1 2006 & II 170 33,261 9,368 Atlas (2) Washington, Q4 2004 Q1 2006 DC 135 76,244 7,371 Grand Plantation, Q4 2004 Q1 2006 Marquis FL 182 32,375 10,045 Tuscany Scottsdale, Q4 2004 Q1 2006 Villas AZ 178 30,618 10,093 Fairway Pembroke Q1 2005 Q2 2006 Greens Pines, FL 103 20,630 5,845 Magnuson Seattle, WA Q1 2005 Q4 2006 Pointe 35 7,794 1,688 Timber Ridge Woodinville,Q1 2005 Q1 2007 WA 28 3,915 869 Milano Scottsdale, Q2 2005 Q4 2006 Terrace AZ 10 2,157 681 Braewood Bothell, WA Q2 2005 Q4 2006 - - - Fifth Avenue Seattle, WA Q2 2005 Q4 2006 North - - - South Palm Tamarac, FL Q2 2005 Q1 2007 Place - - - Parkside Seattle, WA Q4 2005 Q4 2006 - - - Chantecleer Naperville, Q4 2005 Q4 2007 Lakes IL - - - Oaks at Falls Q4 2005 Q2 2007 Falls Church, VA - - - Church Bella Vista Phoenix, AZ Q4 2005 Q2 2007 - - - Regency Park Centreville,Q4 2005 Q3 2007 VA - - - Alameda Scottsdale, Q4 2005 Q3 2007 Ranch AZ - - - ----------------------------- 1,090 244,828 50,606 Closed Out ---------- Country Club Mill Creek, Q1 2004 Q2 2005 Estates WA 86 14,883 2,834 Grand Oasis Coral Q2 2004 Q2 2005 Springs, FL 89 12,875 3,418 Sterling Bellevue, Q2 2004 Q2 2005 Heights WA 76 16,083 2,992 Verona Scottsdale, Q2 2004 Q2 2005 AZ 108 16,092 3,314 Radius at Washington, Q2 2004 Q3 2005 Logan DC Circle (2) 54 21,837 3,815 Riviera Coconut Q2 2005 Q3 2005 Palms (3) Creek, FL 248 45,880 4,560 Watermarke Irvine, CA Q3 2004 Q4 2005 (2) 490 220,827 29,048 Projects closed out prior to 2005 - - (226) ----------------------------- 1,151 348,477 49,755 Totals 25 2,241 $593,305 $ 100,361 ============================= Gross incremental gain on sales of condominium units $ 100,361 Provision for income taxes (8,750) ------------ Net incremental gain on sales of condominium units 91,611 Property management and general and administrative expenses (3,125) Discontinued operating income 839 ------------ Net Income - Condominium Division (4) $ 89,325 ============ 4Q 2005 ----------------------------- Estimated Project Close FFO Start Out Units Sales Incremental Projects Location Date(1) Date Closed Price Gain on Sale ---------------------------------------------------------------------- For Sale ------------ Four Lakes Lisle, IL Q4 2001 Q1 2006 83 $ 12,841 $ 755 Venetian I Phoenix, AZ Q1 2004 Q1 2006 & II 45 8,771 2,489 Atlas (2) Washington, Q4 2004 Q1 2006 DC 29 16,113 1,513 Grand Plantation, Q4 2004 Q1 2006 Marquis FL 111 20,098 6,230 Tuscany Scottsdale, Q4 2004 Q1 2006 Villas AZ 99 17,572 5,908 Fairway Pembroke Q1 2005 Q2 2006 Greens Pines, FL 103 20,630 5,845 Magnuson Seattle, WA Q1 2005 Q4 2006 Pointe 35 7,794 1,688 Timber Ridge Woodin- Q1 2005 Q1 2007 ville, WA 28 3,915 869 Milano Scottsdale, Q2 2005 Q4 2006 Terrace AZ 10 2,157 681 Braewood Bothell, WA Q2 2005 Q4 2006 - - - Fifth Avenue Seattle, WA Q2 2005 Q4 2006 North - - - South Palm Tamarac, FL Q2 2005 Q1 2007 Place - - - Parkside Seattle, WA Q4 2005 Q4 2006 - - - Chantecleer Naperville, Q4 2005 Q4 2007 Lakes IL - - - Oaks at Falls Q4 2005 Q2 2007 Falls Church, VA Church - - - Bella Vista Phoenix, AZ Q4 2005 Q2 2007 - - - Regency Park Centre- Q4 2005 Q3 2007 ville, VA - - - Alameda Scottsdale, Q4 2005 Q3 2007 Ranch AZ - - - ----------------------------- 543 109,891 25,978 Closed Out ------------ Country Club Mill Creek, Q1 2004 Q2 2005 Estates WA - - (16) Grand Oasis Coral Q2 2004 Q2 2005 Springs, FL - - (12) Sterling Bellevue, Q2 2004 Q2 2005 1` Heights WA - - Verona Scottsdale, Q2 2004 Q2 2005 AZ - - - Radius at Washington, Q2 2004 Q3 2005 Logan DC Circle (2) - - 139 Riviera Coconut Q2 2005 Q3 2005 Palms (3) Creek, FL - - (8) Watermarke Irvine, CA Q3 2004 Q4 2005 (2) 109 55,262 11,888 Projects closed out prior to 2005 - - (123) ----------------------------- 109 55,262 11,869 Totals 25 652 $165,153 $ 37,847 ============================= Gross incremental gain on sales of condominium units $ 37,847 Provision for income taxes (2,903) ------------ Net incremental gain on sales of condominium units 34,944 Property management and general and administrative expenses (951) Discontinued operating income (354) ------------ Net Income - Condominium Division (4) $ 33,639 ============ (1) Project start date represents the date that each respective property was acquired by the taxable REIT subsidiary. (2) Partially owned projects; incremental gain on sale represents portion attributable to the Company. (3) Riviera Palms was purchased on May 4, 2005 and was disposed of in its entirety on September 15, 2005 (4) Excludes interest income and interest expense specific to condominium conversion projects. Maintenance Expenses and Capitalized Improvements to Real Estate For the Year Ended December 31, 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) 145,305 $89,615 $617 $80,224 $552 $169,839 $1,169 New Acquisition Properties (7) 27,669 15,885 763 11,215 538 27,100 1,301 Other (8) 8,531 14,387 11,367 25,754 --------- --------- --------- --------- Total 181,505 $119,887 $102,806 $222,693 ========= ========= ========= ========= ------------------------------------------------------ Capitalized Improvements to Real Estate ------------------------------------------------------ Avg. Building Avg. Avg. Replacements Per Improvements Per Per (4) Unit (5) Unit Total Unit ---------------- ----- ----------- ---- ------- ------ Established Properties (6) $55,508 $382 $89,252 $614 $144,760 $996 New Acquisition Properties (7) 5,626 270 19,508 937 25,134 1,207 Other (8) 23,421 39,185 62,606 ---------------- ----------- --------- Total $84,555 $147,945 $232,500 ================ =========== ========= ---------------------------------- Total Expenditures ---------------------------------- Avg. Grand Per Total Unit ----------- -------- Established Properties (6) $314,599 $2,165 New Acquisition Properties (7) 52,234 2,508 Other (8) 88,360 ----------- Total $455,193 =========== (1) Total units exclude 15,899 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 20,828 units. (8) Includes properties either Partially Owned or sold during the period, commercial space, condominium conversions and $6.8 million included in building improvements spent on nine specific assets related to major renovations and repositioning of these assets. Discontinued Operations (Amounts in thousands) Year Ended Quarter Ended December 31, December 31, ------------------- ------------------- 2005 2004 2005 2004 --------- --------- --------- --------- REVENUES Rental income $94,121 $199,587 $8,422 $43,470 --------- --------- --------- --------- Total revenues 94,121 199,587 8,422 43,470 --------- --------- --------- --------- EXPENSES (1) Property and maintenance 38,373 70,782 5,987 14,918 Real estate taxes and insurance 13,348 24,284 1,359 5,497 Property management 389 629 51 209 Depreciation 20,818 51,209 1,055 11,377 General and administrative 361 341 (93) 341 --------- --------- --------- --------- Total expenses 73,289 147,245 8,359 32,342 --------- --------- --------- --------- Discontinued operating income 20,832 52,342 63 11,128 Interest and other income 1,293 184 576 41 Interest (2): Expense incurred, net (9,853) (15,200) (20) (4,360) Amortization of deferred financing costs (596) (1,219) - (342) --------- --------- --------- --------- Discontinued operations, net $11,676 $36,107 $619 $6,467 ========= ========= ========= ========= (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. 2006 Earnings Guidance (per share diluted) ------------------------------------------ Q1 2006 2006 ------- ---- Expected EPS (1) $0.62 to $0.67 $2.73 to $2.93 Add: Expected depreciation expense 0.43 1.71 Less: Expected net gain on sales (1) (0.54) (2.14) ---------------- ---------------- Expected FFO (2) $0.51 to $0.56 $2.30 to $2.50 ================ ================ Same-Store Assumptions ---------------------- 2006 ---- Physical occupancy 94.5% Revenue change 4.75% to 5.75% Expense change 4.25% to 5.25% NOI change 4.50% to 6.50% Acquisitions $1.5 billion Dispositions $1.5 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