Maryland (Equity Residential)
|
13-3675988 (Equity Residential)
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Illinois (ERP Operating Limited Partnership)
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36-3894853 (ERP Operating Limited Partnership)
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
|
|
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Two North Riverside Plaza, Chicago, Illinois 60606
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(312) 474-1300
|
(Address of principal executive offices) (Zip Code)
|
(Registrant's telephone number, including area code)
|
Equity Residential Yes
x
No
¨
|
ERP Operating Limited Partnership Yes
x
No
o
|
Equity Residential Yes
x
No
¨
|
ERP Operating Limited Partnership Yes
x
No
o
|
Equity Residential:
|
|
Large accelerated filer
x
|
Accelerated filer
¨
|
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
¨
|
ERP Operating Limited Partnership:
|
|
Large accelerated filer
¨
|
Accelerated filer
¨
|
Non-accelerated filer
x
(Do not check if a smaller reporting company)
|
Smaller reporting company
¨
|
Equity Residential Yes
¨
No
x
|
ERP Operating Limited Partnership Yes
¨
No
x
|
•
|
enhances investors' understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
|
•
|
eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and
|
•
|
creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
|
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PAGE
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September 30,
2014 |
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December 31,
2013 |
||||
ASSETS
|
|
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||||
Investment in real estate
|
|
|
|
|
||||
Land
|
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$
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6,329,907
|
|
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$
|
6,192,512
|
|
Depreciable property
|
|
19,919,609
|
|
|
19,226,047
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Projects under development
|
|
1,046,210
|
|
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988,867
|
|
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Land held for development
|
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279,139
|
|
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393,522
|
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Investment in real estate
|
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27,574,865
|
|
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26,800,948
|
|
||
Accumulated depreciation
|
|
(5,314,260
|
)
|
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(4,807,709
|
)
|
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Investment in real estate, net
|
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22,260,605
|
|
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21,993,239
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Cash and cash equivalents
|
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31,478
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|
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53,534
|
|
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Investments in unconsolidated entities
|
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128,100
|
|
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178,526
|
|
||
Deposits – restricted
|
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84,945
|
|
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103,567
|
|
||
Escrow deposits – mortgage
|
|
45,995
|
|
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42,636
|
|
||
Deferred financing costs, net
|
|
60,530
|
|
|
58,486
|
|
||
Other assets
|
|
396,441
|
|
|
404,557
|
|
||
Total assets
|
|
$
|
23,008,094
|
|
|
$
|
22,834,545
|
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
||||
Mortgage notes payable
|
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$
|
5,090,960
|
|
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$
|
5,174,166
|
|
Notes, net
|
|
5,420,646
|
|
|
5,477,088
|
|
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Lines of credit
|
|
446,000
|
|
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115,000
|
|
||
Accounts payable and accrued expenses
|
|
203,070
|
|
|
118,791
|
|
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Accrued interest payable
|
|
86,472
|
|
|
78,309
|
|
||
Other liabilities
|
|
349,371
|
|
|
347,748
|
|
||
Security deposits
|
|
75,738
|
|
|
71,592
|
|
||
Distributions payable
|
|
188,266
|
|
|
243,511
|
|
||
Total liabilities
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|
11,860,523
|
|
|
11,626,205
|
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||
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|
|
|
||||
Commitments and contingencies
|
|
|
|
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||||
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||||
Redeemable Noncontrolling Interests – Operating Partnership
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430,149
|
|
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363,144
|
|
||
Equity:
|
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
|
||||
Preferred Shares of beneficial interest, $0.01 par value;
|
|
|
|
|
||||
100,000,000 shares authorized; 1,000,000 shares issued and
outstanding as of September 30, 2014 and December 31, 2013 |
|
50,000
|
|
|
50,000
|
|
||
Common Shares of beneficial interest, $0.01 par value;
|
|
|
|
|
||||
1,000,000,000 shares authorized; 362,208,087 shares issued
and outstanding as of September 30, 2014 and 360,479,260 shares issued and outstanding as of December 31, 2013 |
|
3,622
|
|
|
3,605
|
|
||
Paid in capital
|
|
8,574,176
|
|
|
8,561,500
|
|
||
Retained earnings
|
|
1,915,344
|
|
|
2,047,258
|
|
||
Accumulated other comprehensive (loss)
|
|
(164,806
|
)
|
|
(155,162
|
)
|
||
Total shareholders’ equity
|
|
10,378,336
|
|
|
10,507,201
|
|
||
Noncontrolling Interests:
|
|
|
|
|
||||
Operating Partnership
|
|
213,889
|
|
|
211,412
|
|
||
Partially Owned Properties
|
|
125,197
|
|
|
126,583
|
|
||
Total Noncontrolling Interests
|
|
339,086
|
|
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337,995
|
|
||
Total equity
|
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10,717,422
|
|
|
10,845,196
|
|
||
Total liabilities and equity
|
|
$
|
23,008,094
|
|
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$
|
22,834,545
|
|
|
|
Nine Months Ended September 30,
|
|
Quarter Ended September 30,
|
||||||||||||
|
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2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
|
||||||||
Rental income
|
|
$
|
1,942,492
|
|
|
$
|
1,741,169
|
|
|
$
|
662,001
|
|
|
$
|
624,063
|
|
Fee and asset management
|
|
7,596
|
|
|
7,399
|
|
|
2,077
|
|
|
2,566
|
|
||||
Total revenues
|
|
1,950,088
|
|
|
1,748,568
|
|
|
664,078
|
|
|
626,629
|
|
||||
|
|
|
|
|
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|
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||||||||
EXPENSES
|
|
|
|
|
|
|
|
|
||||||||
Property and maintenance
|
|
361,105
|
|
|
330,812
|
|
|
120,144
|
|
|
118,782
|
|
||||
Real estate taxes and insurance
|
|
245,717
|
|
|
217,753
|
|
|
80,568
|
|
|
75,916
|
|
||||
Property management
|
|
61,080
|
|
|
63,395
|
|
|
18,407
|
|
|
18,875
|
|
||||
Fee and asset management
|
|
4,293
|
|
|
4,739
|
|
|
1,253
|
|
|
1,516
|
|
||||
Depreciation
|
|
565,772
|
|
|
796,233
|
|
|
190,469
|
|
|
276,707
|
|
||||
General and administrative
|
|
41,296
|
|
|
47,017
|
|
|
9,968
|
|
|
14,437
|
|
||||
Total expenses
|
|
1,279,263
|
|
|
1,459,949
|
|
|
420,809
|
|
|
506,233
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income
|
|
670,825
|
|
|
288,619
|
|
|
243,269
|
|
|
120,396
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest and other income
|
|
3,213
|
|
|
1,767
|
|
|
576
|
|
|
1,015
|
|
||||
Other expenses
|
|
(7,161
|
)
|
|
(27,718
|
)
|
|
(4,971
|
)
|
|
(4,368
|
)
|
||||
Interest:
|
|
|
|
|
|
|
|
|
||||||||
Expense incurred, net
|
|
(347,224
|
)
|
|
(437,452
|
)
|
|
(118,251
|
)
|
|
(120,035
|
)
|
||||
Amortization of deferred financing costs
|
|
(8,554
|
)
|
|
(15,636
|
)
|
|
(2,628
|
)
|
|
(4,335
|
)
|
||||
Income (loss) before income and other taxes, (loss) from investments in
unconsolidated entities, net gain (loss) on sales of land parcels, discontinued operations and net gain on sales of real estate properties |
|
311,099
|
|
|
(190,420
|
)
|
|
117,995
|
|
|
(7,327
|
)
|
||||
Income and other tax (expense) benefit
|
|
(1,146
|
)
|
|
(1,325
|
)
|
|
(260
|
)
|
|
(492
|
)
|
||||
(Loss) from investments in unconsolidated entities
|
|
(10,201
|
)
|
|
(57,749
|
)
|
|
(1,176
|
)
|
|
(3,209
|
)
|
||||
Net gain (loss) on sales of land parcels
|
|
1,846
|
|
|
12,179
|
|
|
1,052
|
|
|
(2,437
|
)
|
||||
Income (loss) from continuing operations
|
|
301,598
|
|
|
(237,315
|
)
|
|
117,611
|
|
|
(13,465
|
)
|
||||
Discontinued operations, net
|
|
1,500
|
|
|
2,026,798
|
|
|
(62
|
)
|
|
405,182
|
|
||||
Income before net gain on sales of real estate properties
|
|
303,098
|
|
|
1,789,483
|
|
|
117,549
|
|
|
391,717
|
|
||||
Net gain on sales of real estate properties
|
|
128,544
|
|
|
—
|
|
|
113,641
|
|
|
—
|
|
||||
Net income
|
|
431,642
|
|
|
1,789,483
|
|
|
231,190
|
|
|
391,717
|
|
||||
Net (income) loss attributable to Noncontrolling Interests:
|
|
|
|
|
|
|
|
|
||||||||
Operating Partnership
|
|
(16,273
|
)
|
|
(70,947
|
)
|
|
(8,738
|
)
|
|
(14,836
|
)
|
||||
Partially Owned Properties
|
|
(1,800
|
)
|
|
1,101
|
|
|
(708
|
)
|
|
311
|
|
||||
Net income attributable to controlling interests
|
|
413,569
|
|
|
1,719,637
|
|
|
221,744
|
|
|
377,192
|
|
||||
Preferred distributions
|
|
(3,109
|
)
|
|
(3,109
|
)
|
|
(1,037
|
)
|
|
(1,037
|
)
|
||||
Net income available to Common Shares
|
|
$
|
410,460
|
|
|
$
|
1,716,528
|
|
|
$
|
220,707
|
|
|
$
|
376,155
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share – basic:
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations available to Common Shares
|
|
$
|
1.13
|
|
|
$
|
(0.65
|
)
|
|
$
|
0.61
|
|
|
$
|
(0.04
|
)
|
Net income available to Common Shares
|
|
$
|
1.14
|
|
|
$
|
4.87
|
|
|
$
|
0.61
|
|
|
$
|
1.05
|
|
Weighted average Common Shares outstanding
|
|
360,900
|
|
|
352,414
|
|
|
361,409
|
|
|
359,811
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share – diluted:
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations available to Common Shares
|
|
$
|
1.13
|
|
|
$
|
(0.65
|
)
|
|
$
|
0.61
|
|
|
$
|
(0.04
|
)
|
Net income available to Common Shares
|
|
$
|
1.13
|
|
|
$
|
4.87
|
|
|
$
|
0.61
|
|
|
$
|
1.05
|
|
Weighted average Common Shares outstanding
|
|
377,228
|
|
|
352,414
|
|
|
377,954
|
|
|
359,811
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Distributions declared per Common Share outstanding
|
|
$
|
1.50
|
|
|
$
|
1.20
|
|
|
$
|
0.50
|
|
|
$
|
0.40
|
|
|
|
Nine Months Ended September 30,
|
|
Quarter Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
431,642
|
|
|
$
|
1,789,483
|
|
|
$
|
231,190
|
|
|
$
|
391,717
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income – derivative instruments:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized holding (losses) gains arising during the period
|
|
(21,784
|
)
|
|
8,737
|
|
|
97
|
|
|
(3,600
|
)
|
||||
Losses reclassified into earnings from other comprehensive income
|
|
12,606
|
|
|
16,084
|
|
|
4,271
|
|
|
3,986
|
|
||||
Other comprehensive income (loss) – other instruments:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized holding gains (losses) arising during the period
|
|
—
|
|
|
554
|
|
|
—
|
|
|
(374
|
)
|
||||
(Gains) realized during the period
|
|
—
|
|
|
(830
|
)
|
|
—
|
|
|
(830
|
)
|
||||
Other comprehensive (loss) – foreign currency:
|
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustments arising during the period
|
|
(466
|
)
|
|
(789
|
)
|
|
(2,184
|
)
|
|
(1,730
|
)
|
||||
Other comprehensive (loss) income
|
|
(9,644
|
)
|
|
23,756
|
|
|
2,184
|
|
|
(2,548
|
)
|
||||
Comprehensive income
|
|
421,998
|
|
|
1,813,239
|
|
|
233,374
|
|
|
389,169
|
|
||||
Comprehensive (income) attributable to Noncontrolling Interests
|
|
(17,705
|
)
|
|
(70,770
|
)
|
|
(9,530
|
)
|
|
(14,428
|
)
|
||||
Comprehensive income attributable to controlling interests
|
|
$
|
404,293
|
|
|
$
|
1,742,469
|
|
|
$
|
223,844
|
|
|
$
|
374,741
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2014
|
|
2013
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net income
|
|
$
|
431,642
|
|
|
$
|
1,789,483
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation
|
|
565,772
|
|
|
830,097
|
|
||
Amortization of deferred financing costs
|
|
8,554
|
|
|
15,864
|
|
||
Amortization of above/below market leases
|
|
2,376
|
|
|
2,214
|
|
||
Amortization of discounts and premiums on debt
|
|
(8,750
|
)
|
|
(37,612
|
)
|
||
Amortization of deferred settlements on derivative instruments
|
|
12,205
|
|
|
15,683
|
|
||
Write-off of pursuit costs
|
|
2,067
|
|
|
3,969
|
|
||
Loss from investments in unconsolidated entities
|
|
10,201
|
|
|
57,749
|
|
||
Distributions from unconsolidated entities – return on capital
|
|
4,557
|
|
|
1,519
|
|
||
Net (gain) on sales of investment securities
|
|
(57
|
)
|
|
(830
|
)
|
||
Net (gain) on sales of land parcels
|
|
(1,846
|
)
|
|
(12,179
|
)
|
||
Net (gain) on sales of discontinued operations
|
|
(223
|
)
|
|
(1,990,577
|
)
|
||
Net (gain) on sales of real estate properties
|
|
(128,544
|
)
|
|
—
|
|
||
Unrealized (gain) loss on derivative instruments
|
|
(66
|
)
|
|
32
|
|
||
Compensation paid with Company Common Shares
|
|
24,647
|
|
|
29,019
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
(Increase) decrease in deposits – restricted
|
|
(2,223
|
)
|
|
4,152
|
|
||
Decrease in mortgage deposits
|
|
1,638
|
|
|
271
|
|
||
Decrease in other assets
|
|
3,854
|
|
|
7,315
|
|
||
Increase in accounts payable and accrued expenses
|
|
76,331
|
|
|
65,001
|
|
||
Increase (decrease) in accrued interest payable
|
|
8,163
|
|
|
(2,175
|
)
|
||
(Decrease) in other liabilities
|
|
(173
|
)
|
|
(5,427
|
)
|
||
Increase (decrease) in security deposits
|
|
4,146
|
|
|
(6,475
|
)
|
||
Net cash provided by operating activities
|
|
1,014,271
|
|
|
767,093
|
|
||
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
Acquisition of Archstone, net of cash acquired
|
|
—
|
|
|
(4,000,875
|
)
|
||
Investment in real estate – acquisitions
|
|
(404,658
|
)
|
|
(108,308
|
)
|
||
Investment in real estate – development/other
|
|
(380,691
|
)
|
|
(256,965
|
)
|
||
Capital expenditures to real estate
|
|
(133,181
|
)
|
|
(96,866
|
)
|
||
Non-real estate capital additions
|
|
(2,446
|
)
|
|
(3,359
|
)
|
||
Interest capitalized for real estate and unconsolidated entities under development
|
|
(38,140
|
)
|
|
(32,946
|
)
|
||
Proceeds from disposition of real estate, net
|
|
224,538
|
|
|
4,434,708
|
|
||
Investments in unconsolidated entities
|
|
(14,568
|
)
|
|
(59,363
|
)
|
||
Distributions from unconsolidated entities – return of capital
|
|
77,042
|
|
|
25,471
|
|
||
Proceeds from sale of investment securities
|
|
57
|
|
|
828
|
|
||
Decrease in deposits on real estate acquisitions and investments, net
|
|
20,845
|
|
|
147,890
|
|
||
Decrease in mortgage deposits
|
|
560
|
|
|
7,623
|
|
||
Acquisition of Noncontrolling Interests – Partially Owned Properties
|
|
(5,501
|
)
|
|
—
|
|
||
Net cash (used for) provided by investing activities
|
|
(656,143
|
)
|
|
57,838
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2014
|
|
2013
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
||||
Debt financing costs
|
|
$
|
(10,598
|
)
|
|
$
|
(18,254
|
)
|
Mortgage deposits
|
|
(5,557
|
)
|
|
(3,769
|
)
|
||
Mortgage notes payable:
|
|
|
|
|
||||
Proceeds
|
|
—
|
|
|
5,951
|
|
||
Lump sum payoffs
|
|
(63,772
|
)
|
|
(701,762
|
)
|
||
Scheduled principal repayments
|
|
(8,919
|
)
|
|
(9,527
|
)
|
||
Notes, net:
|
|
|
|
|
||||
Proceeds
|
|
1,194,278
|
|
|
1,245,550
|
|
||
Lump sum payoffs
|
|
(1,250,000
|
)
|
|
(400,000
|
)
|
||
Lines of credit:
|
|
|
|
|
||||
Proceeds
|
|
5,324,000
|
|
|
8,413,000
|
|
||
Repayments
|
|
(4,993,000
|
)
|
|
(8,413,000
|
)
|
||
(Payments on) settlement of derivative instruments
|
|
(758
|
)
|
|
(44,013
|
)
|
||
Proceeds from Employee Share Purchase Plan (ESPP)
|
|
2,728
|
|
|
2,973
|
|
||
Proceeds from exercise of options
|
|
56,554
|
|
|
16,044
|
|
||
Common Shares repurchased and retired
|
|
(1,777
|
)
|
|
—
|
|
||
Payment of offering costs
|
|
—
|
|
|
(954
|
)
|
||
Other financing activities, net
|
|
(33
|
)
|
|
(33
|
)
|
||
Contributions – Noncontrolling Interests – Partially Owned Properties
|
|
5,684
|
|
|
11,520
|
|
||
Contributions – Noncontrolling Interests – Operating Partnership
|
|
3
|
|
|
5
|
|
||
Distributions:
|
|
|
|
|
||||
Common Shares
|
|
(595,564
|
)
|
|
(537,464
|
)
|
||
Preferred Shares
|
|
(3,109
|
)
|
|
(3,109
|
)
|
||
Noncontrolling Interests – Operating Partnership
|
|
(23,582
|
)
|
|
(22,216
|
)
|
||
Noncontrolling Interests – Partially Owned Properties
|
|
(6,762
|
)
|
|
(5,702
|
)
|
||
Net cash (used for) financing activities
|
|
(380,184
|
)
|
|
(464,760
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(22,056
|
)
|
|
360,171
|
|
||
Cash and cash equivalents, beginning of period
|
|
53,534
|
|
|
612,590
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
31,478
|
|
|
$
|
972,761
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2014
|
|
2013
|
||||
SUPPLEMENTAL INFORMATION:
|
|
|
|
|
||||
Cash paid for interest, net of amounts capitalized
|
|
$
|
335,646
|
|
|
$
|
451,495
|
|
Net cash paid for income and other taxes
|
|
$
|
866
|
|
|
$
|
1,064
|
|
Amortization of deferred financing costs:
|
|
|
|
|
||||
Investment in real estate, net
|
|
$
|
—
|
|
|
$
|
(152
|
)
|
Deferred financing costs, net
|
|
$
|
8,554
|
|
|
$
|
16,016
|
|
Amortization of discounts and premiums on debt:
|
|
|
|
|
||||
Mortgage notes payable
|
|
$
|
(10,515
|
)
|
|
$
|
(39,232
|
)
|
Notes, net
|
|
$
|
1,765
|
|
|
$
|
1,620
|
|
Amortization of deferred settlements on derivative instruments:
|
|
|
|
|
||||
Other liabilities
|
|
$
|
(401
|
)
|
|
$
|
(401
|
)
|
Accumulated other comprehensive income
|
|
$
|
12,606
|
|
|
$
|
16,084
|
|
Loss from investments in unconsolidated entities:
|
|
|
|
|
||||
Investments in unconsolidated entities
|
|
$
|
7,684
|
|
|
$
|
51,907
|
|
Other liabilities
|
|
$
|
2,517
|
|
|
$
|
5,842
|
|
Distributions from unconsolidated entities – return on capital:
|
|
|
|
|
||||
Investments in unconsolidated entities
|
|
$
|
4,399
|
|
|
$
|
1,519
|
|
Other liabilities
|
|
$
|
158
|
|
|
$
|
—
|
|
Unrealized (gain) loss on derivative instruments:
|
|
|
|
|
||||
Other assets
|
|
$
|
11,409
|
|
|
$
|
(10,609
|
)
|
Notes, net
|
|
$
|
(2,485
|
)
|
|
$
|
(1,523
|
)
|
Other liabilities
|
|
$
|
12,794
|
|
|
$
|
3,427
|
|
Accumulated other comprehensive income
|
|
$
|
(21,784
|
)
|
|
$
|
8,737
|
|
Acquisition of Archstone, net of cash acquired:
|
|
|
|
|
||||
Investment in real estate, net
|
|
$
|
39,929
|
|
|
$
|
(8,710,242
|
)
|
Investments in unconsolidated entities
|
|
$
|
(33,993
|
)
|
|
$
|
(217,092
|
)
|
Deposits – restricted
|
|
$
|
—
|
|
|
$
|
(474
|
)
|
Escrow deposits – mortgage
|
|
$
|
—
|
|
|
$
|
(35,897
|
)
|
Deferred financing costs, net
|
|
$
|
—
|
|
|
$
|
(25,780
|
)
|
Other assets
|
|
$
|
(2,586
|
)
|
|
$
|
(203,295
|
)
|
Mortgage notes payable
|
|
$
|
—
|
|
|
$
|
3,076,876
|
|
Accounts payable and accrued expenses
|
|
$
|
(146
|
)
|
|
$
|
17,576
|
|
Accrued interest payable
|
|
$
|
—
|
|
|
$
|
11,305
|
|
Other liabilities
|
|
$
|
(3,204
|
)
|
|
$
|
117,068
|
|
Security deposits
|
|
$
|
—
|
|
|
$
|
10,949
|
|
Issuance of Common Shares
|
|
$
|
—
|
|
|
$
|
1,929,868
|
|
Noncontrolling Interests – Partially Owned Properties
|
|
$
|
—
|
|
|
$
|
28,263
|
|
Interest capitalized for real estate and unconsolidated entities under development:
|
|
|
|
|
||||
Investment in real estate, net
|
|
$
|
(38,086
|
)
|
|
$
|
(31,648
|
)
|
Investments in unconsolidated entities
|
|
$
|
(54
|
)
|
|
$
|
(1,298
|
)
|
Investments in unconsolidated entities:
|
|
|
|
|
||||
Investments in unconsolidated entities
|
|
$
|
(5,118
|
)
|
|
$
|
(9,317
|
)
|
Other liabilities
|
|
$
|
(9,450
|
)
|
|
$
|
(50,046
|
)
|
Other:
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
$
|
466
|
|
|
$
|
789
|
|
|
|
Nine Months Ended
|
||
|
|
September 30, 2014
|
||
SHAREHOLDERS’ EQUITY
|
|
|
||
|
|
|
||
PREFERRED SHARES
|
|
|
||
Balance, beginning of year
|
|
$
|
50,000
|
|
Balance, end of period
|
|
$
|
50,000
|
|
|
|
|
||
COMMON SHARES, $0.01 PAR VALUE
|
|
|
||
Balance, beginning of year
|
|
$
|
3,605
|
|
Conversion of OP Units into Common Shares
|
|
1
|
|
|
Exercise of share options
|
|
14
|
|
|
Share-based employee compensation expense:
|
|
|
||
Restricted shares
|
|
2
|
|
|
Balance, end of period
|
|
$
|
3,622
|
|
|
|
|
||
PAID IN CAPITAL
|
|
|
||
Balance, beginning of year
|
|
$
|
8,561,500
|
|
Common Share Issuance:
|
|
|
||
Conversion of OP Units into Common Shares
|
|
1,717
|
|
|
Exercise of share options
|
|
56,540
|
|
|
Employee Share Purchase Plan (ESPP)
|
|
2,728
|
|
|
Share-based employee compensation expense:
|
|
|
||
Restricted shares
|
|
8,392
|
|
|
Share options
|
|
6,326
|
|
|
ESPP discount
|
|
701
|
|
|
Common Shares repurchased and retired
|
|
(1,777
|
)
|
|
Supplemental Executive Retirement Plan (SERP)
|
|
5,664
|
|
|
Acquisition of Noncontrolling Interests – Partially Owned Properties
|
|
(2,308
|
)
|
|
Change in market value of Redeemable Noncontrolling Interests – Operating Partnership
|
|
(69,579
|
)
|
|
Adjustment for Noncontrolling Interests ownership in Operating Partnership
|
|
4,272
|
|
|
Balance, end of period
|
|
$
|
8,574,176
|
|
|
|
|
||
RETAINED EARNINGS
|
|
|
||
Balance, beginning of year
|
|
$
|
2,047,258
|
|
Net income attributable to controlling interests
|
|
413,569
|
|
|
Common Share distributions
|
|
(542,374
|
)
|
|
Preferred Share distributions
|
|
(3,109
|
)
|
|
Balance, end of period
|
|
$
|
1,915,344
|
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
ASSETS
|
|
|
|
|
||||
Investment in real estate
|
|
|
|
|
||||
Land
|
|
$
|
6,329,907
|
|
|
$
|
6,192,512
|
|
Depreciable property
|
|
19,919,609
|
|
|
19,226,047
|
|
||
Projects under development
|
|
1,046,210
|
|
|
988,867
|
|
||
Land held for development
|
|
279,139
|
|
|
393,522
|
|
||
Investment in real estate
|
|
27,574,865
|
|
|
26,800,948
|
|
||
Accumulated depreciation
|
|
(5,314,260
|
)
|
|
(4,807,709
|
)
|
||
Investment in real estate, net
|
|
22,260,605
|
|
|
21,993,239
|
|
||
Cash and cash equivalents
|
|
31,478
|
|
|
53,534
|
|
||
Investments in unconsolidated entities
|
|
128,100
|
|
|
178,526
|
|
||
Deposits – restricted
|
|
84,945
|
|
|
103,567
|
|
||
Escrow deposits – mortgage
|
|
45,995
|
|
|
42,636
|
|
||
Deferred financing costs, net
|
|
60,530
|
|
|
58,486
|
|
||
Other assets
|
|
396,441
|
|
|
404,557
|
|
||
Total assets
|
|
$
|
23,008,094
|
|
|
$
|
22,834,545
|
|
|
|
|
|
|
||||
LIABILITIES AND CAPITAL
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
||||
Mortgage notes payable
|
|
$
|
5,090,960
|
|
|
$
|
5,174,166
|
|
Notes, net
|
|
5,420,646
|
|
|
5,477,088
|
|
||
Lines of credit
|
|
446,000
|
|
|
115,000
|
|
||
Accounts payable and accrued expenses
|
|
203,070
|
|
|
118,791
|
|
||
Accrued interest payable
|
|
86,472
|
|
|
78,309
|
|
||
Other liabilities
|
|
349,371
|
|
|
347,748
|
|
||
Security deposits
|
|
75,738
|
|
|
71,592
|
|
||
Distributions payable
|
|
188,266
|
|
|
243,511
|
|
||
Total liabilities
|
|
11,860,523
|
|
|
11,626,205
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
||||
|
|
|
|
|
||||
Redeemable Limited Partners
|
|
430,149
|
|
|
363,144
|
|
||
Capital:
|
|
|
|
|
||||
Partners' Capital:
|
|
|
|
|
||||
Preference Units
|
|
50,000
|
|
|
50,000
|
|
||
General Partner
|
|
10,493,142
|
|
|
10,612,363
|
|
||
Limited Partners
|
|
213,889
|
|
|
211,412
|
|
||
Accumulated other comprehensive (loss)
|
|
(164,806
|
)
|
|
(155,162
|
)
|
||
Total partners' capital
|
|
10,592,225
|
|
|
10,718,613
|
|
||
Noncontrolling Interests – Partially Owned Properties
|
|
125,197
|
|
|
126,583
|
|
||
Total capital
|
|
10,717,422
|
|
|
10,845,196
|
|
||
Total liabilities and capital
|
|
$
|
23,008,094
|
|
|
$
|
22,834,545
|
|
|
|
Nine Months Ended September 30,
|
|
Quarter Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
|
||||||||
Rental income
|
|
$
|
1,942,492
|
|
|
$
|
1,741,169
|
|
|
$
|
662,001
|
|
|
$
|
624,063
|
|
Fee and asset management
|
|
7,596
|
|
|
7,399
|
|
|
2,077
|
|
|
2,566
|
|
||||
Total revenues
|
|
1,950,088
|
|
|
1,748,568
|
|
|
664,078
|
|
|
626,629
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
EXPENSES
|
|
|
|
|
|
|
|
|
||||||||
Property and maintenance
|
|
361,105
|
|
|
330,812
|
|
|
120,144
|
|
|
118,782
|
|
||||
Real estate taxes and insurance
|
|
245,717
|
|
|
217,753
|
|
|
80,568
|
|
|
75,916
|
|
||||
Property management
|
|
61,080
|
|
|
63,395
|
|
|
18,407
|
|
|
18,875
|
|
||||
Fee and asset management
|
|
4,293
|
|
|
4,739
|
|
|
1,253
|
|
|
1,516
|
|
||||
Depreciation
|
|
565,772
|
|
|
796,233
|
|
|
190,469
|
|
|
276,707
|
|
||||
General and administrative
|
|
41,296
|
|
|
47,017
|
|
|
9,968
|
|
|
14,437
|
|
||||
Total expenses
|
|
1,279,263
|
|
|
1,459,949
|
|
|
420,809
|
|
|
506,233
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income
|
|
670,825
|
|
|
288,619
|
|
|
243,269
|
|
|
120,396
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest and other income
|
|
3,213
|
|
|
1,767
|
|
|
576
|
|
|
1,015
|
|
||||
Other expenses
|
|
(7,161
|
)
|
|
(27,718
|
)
|
|
(4,971
|
)
|
|
(4,368
|
)
|
||||
Interest:
|
|
|
|
|
|
|
|
|
||||||||
Expense incurred, net
|
|
(347,224
|
)
|
|
(437,452
|
)
|
|
(118,251
|
)
|
|
(120,035
|
)
|
||||
Amortization of deferred financing costs
|
|
(8,554
|
)
|
|
(15,636
|
)
|
|
(2,628
|
)
|
|
(4,335
|
)
|
||||
Income (loss) before income and other taxes, (loss) from investments in
unconsolidated entities, net gain (loss) on sales of land parcels, discontinued operations and net gain on sales of real estate properties |
|
311,099
|
|
|
(190,420
|
)
|
|
117,995
|
|
|
(7,327
|
)
|
||||
Income and other tax (expense) benefit
|
|
(1,146
|
)
|
|
(1,325
|
)
|
|
(260
|
)
|
|
(492
|
)
|
||||
(Loss) from investments in unconsolidated entities
|
|
(10,201
|
)
|
|
(57,749
|
)
|
|
(1,176
|
)
|
|
(3,209
|
)
|
||||
Net gain (loss) on sales of land parcels
|
|
1,846
|
|
|
12,179
|
|
|
1,052
|
|
|
(2,437
|
)
|
||||
Income (loss) from continuing operations
|
|
301,598
|
|
|
(237,315
|
)
|
|
117,611
|
|
|
(13,465
|
)
|
||||
Discontinued operations, net
|
|
1,500
|
|
|
2,026,798
|
|
|
(62
|
)
|
|
405,182
|
|
||||
Income before net gain on sales of real estate properties
|
|
303,098
|
|
|
1,789,483
|
|
|
117,549
|
|
|
391,717
|
|
||||
Net gain on sales of real estate properties
|
|
128,544
|
|
|
—
|
|
|
113,641
|
|
|
—
|
|
||||
Net income
|
|
431,642
|
|
|
1,789,483
|
|
|
231,190
|
|
|
391,717
|
|
||||
Net (income) loss attributable to Noncontrolling Interests – Partially
Owned Properties |
|
(1,800
|
)
|
|
1,101
|
|
|
(708
|
)
|
|
311
|
|
||||
Net income attributable to controlling interests
|
|
$
|
429,842
|
|
|
$
|
1,790,584
|
|
|
$
|
230,482
|
|
|
$
|
392,028
|
|
|
|
|
|
|
|
|
|
|
||||||||
ALLOCATION OF NET INCOME:
|
|
|
|
|
|
|
|
|
||||||||
Preference Units
|
|
$
|
3,109
|
|
|
$
|
3,109
|
|
|
$
|
1,037
|
|
|
$
|
1,037
|
|
|
|
|
|
|
|
|
|
|
||||||||
General Partner
|
|
$
|
410,460
|
|
|
$
|
1,716,528
|
|
|
$
|
220,707
|
|
|
$
|
376,155
|
|
Limited Partners
|
|
16,273
|
|
|
70,947
|
|
|
8,738
|
|
|
14,836
|
|
||||
Net income available to Units
|
|
$
|
426,733
|
|
|
$
|
1,787,475
|
|
|
$
|
229,445
|
|
|
$
|
390,991
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per Unit – basic:
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations available to Units
|
|
$
|
1.13
|
|
|
$
|
(0.65
|
)
|
|
$
|
0.61
|
|
|
$
|
(0.04
|
)
|
Net income available to Units
|
|
$
|
1.14
|
|
|
$
|
4.87
|
|
|
$
|
0.61
|
|
|
$
|
1.05
|
|
Weighted average Units outstanding
|
|
374,626
|
|
|
366,150
|
|
|
375,116
|
|
|
373,547
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings per Unit – diluted:
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations available to Units
|
|
$
|
1.13
|
|
|
$
|
(0.65
|
)
|
|
$
|
0.61
|
|
|
$
|
(0.04
|
)
|
Net income available to Units
|
|
$
|
1.13
|
|
|
$
|
4.87
|
|
|
$
|
0.61
|
|
|
$
|
1.05
|
|
Weighted average Units outstanding
|
|
377,228
|
|
|
366,150
|
|
|
377,954
|
|
|
373,547
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Distributions declared per Unit outstanding
|
|
$
|
1.50
|
|
|
$
|
1.20
|
|
|
$
|
0.50
|
|
|
$
|
0.40
|
|
|
|
Nine Months Ended September 30,
|
|
Quarter Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
431,642
|
|
|
$
|
1,789,483
|
|
|
$
|
231,190
|
|
|
$
|
391,717
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income – derivative instruments:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized holding (losses) gains arising during the period
|
|
(21,784
|
)
|
|
8,737
|
|
|
97
|
|
|
(3,600
|
)
|
||||
Losses reclassified into earnings from other comprehensive income
|
|
12,606
|
|
|
16,084
|
|
|
4,271
|
|
|
3,986
|
|
||||
Other comprehensive income (loss) – other instruments:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized holding gains (losses) arising during the period
|
|
—
|
|
|
554
|
|
|
—
|
|
|
(374
|
)
|
||||
(Gains) realized during the period
|
|
—
|
|
|
(830
|
)
|
|
—
|
|
|
(830
|
)
|
||||
Other comprehensive (loss) – foreign currency:
|
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustments arising during the period
|
|
(466
|
)
|
|
(789
|
)
|
|
(2,184
|
)
|
|
(1,730
|
)
|
||||
Other comprehensive (loss) income
|
|
(9,644
|
)
|
|
23,756
|
|
|
2,184
|
|
|
(2,548
|
)
|
||||
Comprehensive income
|
|
421,998
|
|
|
1,813,239
|
|
|
233,374
|
|
|
389,169
|
|
||||
Comprehensive (income) loss attributable to Noncontrolling
Interests – Partially Owned Properties |
|
(1,800
|
)
|
|
1,101
|
|
|
(708
|
)
|
|
311
|
|
||||
Comprehensive income attributable to controlling interests
|
|
$
|
420,198
|
|
|
$
|
1,814,340
|
|
|
$
|
232,666
|
|
|
$
|
389,480
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2014
|
|
2013
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net income
|
|
$
|
431,642
|
|
|
$
|
1,789,483
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation
|
|
565,772
|
|
|
830,097
|
|
||
Amortization of deferred financing costs
|
|
8,554
|
|
|
15,864
|
|
||
Amortization of above/below market leases
|
|
2,376
|
|
|
2,214
|
|
||
Amortization of discounts and premiums on debt
|
|
(8,750
|
)
|
|
(37,612
|
)
|
||
Amortization of deferred settlements on derivative instruments
|
|
12,205
|
|
|
15,683
|
|
||
Write-off of pursuit costs
|
|
2,067
|
|
|
3,969
|
|
||
Loss from investments in unconsolidated entities
|
|
10,201
|
|
|
57,749
|
|
||
Distributions from unconsolidated entities – return on capital
|
|
4,557
|
|
|
1,519
|
|
||
Net (gain) on sales of investment securities
|
|
(57
|
)
|
|
(830
|
)
|
||
Net (gain) on sales of land parcels
|
|
(1,846
|
)
|
|
(12,179
|
)
|
||
Net (gain) on sales of discontinued operations
|
|
(223
|
)
|
|
(1,990,577
|
)
|
||
Net (gain) on sales of real estate properties
|
|
(128,544
|
)
|
|
—
|
|
||
Unrealized (gain) loss on derivative instruments
|
|
(66
|
)
|
|
32
|
|
||
Compensation paid with Company Common Shares
|
|
24,647
|
|
|
29,019
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
(Increase) decrease in deposits – restricted
|
|
(2,223
|
)
|
|
4,152
|
|
||
Decrease in mortgage deposits
|
|
1,638
|
|
|
271
|
|
||
Decrease in other assets
|
|
3,854
|
|
|
7,315
|
|
||
Increase in accounts payable and accrued expenses
|
|
76,331
|
|
|
65,001
|
|
||
Increase (decrease) in accrued interest payable
|
|
8,163
|
|
|
(2,175
|
)
|
||
(Decrease) in other liabilities
|
|
(173
|
)
|
|
(5,427
|
)
|
||
Increase (decrease) in security deposits
|
|
4,146
|
|
|
(6,475
|
)
|
||
Net cash provided by operating activities
|
|
1,014,271
|
|
|
767,093
|
|
||
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
Acquisition of Archstone, net of cash acquired
|
|
—
|
|
|
(4,000,875
|
)
|
||
Investment in real estate – acquisitions
|
|
(404,658
|
)
|
|
(108,308
|
)
|
||
Investment in real estate – development/other
|
|
(380,691
|
)
|
|
(256,965
|
)
|
||
Capital expenditures to real estate
|
|
(133,181
|
)
|
|
(96,866
|
)
|
||
Non-real estate capital additions
|
|
(2,446
|
)
|
|
(3,359
|
)
|
||
Interest capitalized for real estate and unconsolidated entities under development
|
|
(38,140
|
)
|
|
(32,946
|
)
|
||
Proceeds from disposition of real estate, net
|
|
224,538
|
|
|
4,434,708
|
|
||
Investments in unconsolidated entities
|
|
(14,568
|
)
|
|
(59,363
|
)
|
||
Distributions from unconsolidated entities – return of capital
|
|
77,042
|
|
|
25,471
|
|
||
Proceeds from sale of investment securities
|
|
57
|
|
|
828
|
|
||
Decrease in deposits on real estate acquisitions and investments, net
|
|
20,845
|
|
|
147,890
|
|
||
Decrease in mortgage deposits
|
|
560
|
|
|
7,623
|
|
||
Acquisition of Noncontrolling Interests – Partially Owned Properties
|
|
(5,501
|
)
|
|
—
|
|
||
Net cash (used for) provided by investing activities
|
|
(656,143
|
)
|
|
57,838
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2014
|
|
2013
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
||||
Debt financing costs
|
|
$
|
(10,598
|
)
|
|
$
|
(18,254
|
)
|
Mortgage deposits
|
|
(5,557
|
)
|
|
(3,769
|
)
|
||
Mortgage notes payable:
|
|
|
|
|
||||
Proceeds
|
|
—
|
|
|
5,951
|
|
||
Lump sum payoffs
|
|
(63,772
|
)
|
|
(701,762
|
)
|
||
Scheduled principal repayments
|
|
(8,919
|
)
|
|
(9,527
|
)
|
||
Notes, net:
|
|
|
|
|
||||
Proceeds
|
|
1,194,278
|
|
|
1,245,550
|
|
||
Lump sum payoffs
|
|
(1,250,000
|
)
|
|
(400,000
|
)
|
||
Lines of credit:
|
|
|
|
|
||||
Proceeds
|
|
5,324,000
|
|
|
8,413,000
|
|
||
Repayments
|
|
(4,993,000
|
)
|
|
(8,413,000
|
)
|
||
(Payments on) settlement of derivative instruments
|
|
(758
|
)
|
|
(44,013
|
)
|
||
Proceeds from EQR's Employee Share Purchase Plan (ESPP)
|
|
2,728
|
|
|
2,973
|
|
||
Proceeds from exercise of EQR options
|
|
56,554
|
|
|
16,044
|
|
||
OP Units repurchased and retired
|
|
(1,777
|
)
|
|
—
|
|
||
Payment of offering costs
|
|
—
|
|
|
(954
|
)
|
||
Other financing activities, net
|
|
(33
|
)
|
|
(33
|
)
|
||
Contributions – Noncontrolling Interests – Partially Owned Properties
|
|
5,684
|
|
|
11,520
|
|
||
Contributions – Limited Partners
|
|
3
|
|
|
5
|
|
||
Distributions:
|
|
|
|
|
||||
OP Units – General Partner
|
|
(595,564
|
)
|
|
(537,464
|
)
|
||
Preference Units
|
|
(3,109
|
)
|
|
(3,109
|
)
|
||
OP Units – Limited Partners
|
|
(23,582
|
)
|
|
(22,216
|
)
|
||
Noncontrolling Interests – Partially Owned Properties
|
|
(6,762
|
)
|
|
(5,702
|
)
|
||
Net cash (used for) financing activities
|
|
(380,184
|
)
|
|
(464,760
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(22,056
|
)
|
|
360,171
|
|
||
Cash and cash equivalents, beginning of period
|
|
53,534
|
|
|
612,590
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
31,478
|
|
|
$
|
972,761
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2014
|
|
2013
|
||||
SUPPLEMENTAL INFORMATION:
|
|
|
|
|
||||
Cash paid for interest, net of amounts capitalized
|
|
$
|
335,646
|
|
|
$
|
451,495
|
|
Net cash paid for income and other taxes
|
|
$
|
866
|
|
|
$
|
1,064
|
|
Amortization of deferred financing costs:
|
|
|
|
|
||||
Investment in real estate, net
|
|
$
|
—
|
|
|
$
|
(152
|
)
|
Deferred financing costs, net
|
|
$
|
8,554
|
|
|
$
|
16,016
|
|
Amortization of discounts and premiums on debt:
|
|
|
|
|
||||
Mortgage notes payable
|
|
$
|
(10,515
|
)
|
|
$
|
(39,232
|
)
|
Notes, net
|
|
$
|
1,765
|
|
|
$
|
1,620
|
|
Amortization of deferred settlements on derivative instruments:
|
|
|
|
|
||||
Other liabilities
|
|
$
|
(401
|
)
|
|
$
|
(401
|
)
|
Accumulated other comprehensive income
|
|
$
|
12,606
|
|
|
$
|
16,084
|
|
Loss from investments in unconsolidated entities:
|
|
|
|
|
||||
Investments in unconsolidated entities
|
|
$
|
7,684
|
|
|
$
|
51,907
|
|
Other liabilities
|
|
$
|
2,517
|
|
|
$
|
5,842
|
|
Distributions from unconsolidated entities – return on capital:
|
|
|
|
|
||||
Investments in unconsolidated entities
|
|
$
|
4,399
|
|
|
$
|
1,519
|
|
Other liabilities
|
|
$
|
158
|
|
|
$
|
—
|
|
Unrealized (gain) loss on derivative instruments:
|
|
|
|
|
||||
Other assets
|
|
$
|
11,409
|
|
|
$
|
(10,609
|
)
|
Notes, net
|
|
$
|
(2,485
|
)
|
|
$
|
(1,523
|
)
|
Other liabilities
|
|
$
|
12,794
|
|
|
$
|
3,427
|
|
Accumulated other comprehensive income
|
|
$
|
(21,784
|
)
|
|
$
|
8,737
|
|
Acquisition of Archstone, net of cash acquired:
|
|
|
|
|
||||
Investment in real estate, net
|
|
$
|
39,929
|
|
|
$
|
(8,710,242
|
)
|
Investments in unconsolidated entities
|
|
$
|
(33,993
|
)
|
|
$
|
(217,092
|
)
|
Deposits – restricted
|
|
$
|
—
|
|
|
$
|
(474
|
)
|
Escrow deposits – mortgage
|
|
$
|
—
|
|
|
$
|
(35,897
|
)
|
Deferred financing costs, net
|
|
$
|
—
|
|
|
$
|
(25,780
|
)
|
Other assets
|
|
$
|
(2,586
|
)
|
|
$
|
(203,295
|
)
|
Mortgage notes payable
|
|
$
|
—
|
|
|
$
|
3,076,876
|
|
Accounts payable and accrued expenses
|
|
$
|
(146
|
)
|
|
$
|
17,576
|
|
Accrued interest payable
|
|
$
|
—
|
|
|
$
|
11,305
|
|
Other liabilities
|
|
$
|
(3,204
|
)
|
|
$
|
117,068
|
|
Security deposits
|
|
$
|
—
|
|
|
$
|
10,949
|
|
Issuance of OP Units
|
|
$
|
—
|
|
|
$
|
1,929,868
|
|
Noncontrolling Interests – Partially Owned Properties
|
|
$
|
—
|
|
|
$
|
28,263
|
|
Interest capitalized for real estate and unconsolidated entities under development:
|
|
|
|
|
||||
Investment in real estate, net
|
|
$
|
(38,086
|
)
|
|
$
|
(31,648
|
)
|
Investments in unconsolidated entities
|
|
$
|
(54
|
)
|
|
$
|
(1,298
|
)
|
Investments in unconsolidated entities:
|
|
|
|
|
||||
Investments in unconsolidated entities
|
|
$
|
(5,118
|
)
|
|
$
|
(9,317
|
)
|
Other liabilities
|
|
$
|
(9,450
|
)
|
|
$
|
(50,046
|
)
|
Other:
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
$
|
466
|
|
|
$
|
789
|
|
|
Nine Months Ended
|
||
|
September 30, 2014
|
||
PARTNERS' CAPITAL
|
|
||
|
|
||
PREFERENCE UNITS
|
|
||
Balance, beginning of year
|
$
|
50,000
|
|
Balance, end of period
|
$
|
50,000
|
|
|
|
||
GENERAL PARTNER
|
|
||
Balance, beginning of year
|
$
|
10,612,363
|
|
OP Unit Issuance:
|
|
||
Conversion of OP Units held by Limited Partners into OP Units held by General Partner
|
1,718
|
|
|
Exercise of EQR share options
|
56,554
|
|
|
EQR's Employee Share Purchase Plan (ESPP)
|
2,728
|
|
|
Share-based employee compensation expense:
|
|
||
EQR restricted shares
|
8,394
|
|
|
EQR share options
|
6,326
|
|
|
EQR ESPP discount
|
701
|
|
|
OP Units repurchased and retired
|
(1,777
|
)
|
|
Net income available to Units – General Partner
|
410,460
|
|
|
OP Units – General Partner distributions
|
(542,374
|
)
|
|
Supplemental Executive Retirement Plan (SERP)
|
5,664
|
|
|
Acquisition of Noncontrolling Interests – Partially Owned Properties
|
(2,308
|
)
|
|
Change in market value of Redeemable Limited Partners
|
(69,579
|
)
|
|
Adjustment for Limited Partners ownership in Operating Partnership
|
4,272
|
|
|
Balance, end of period
|
$
|
10,493,142
|
|
|
|
||
LIMITED PARTNERS
|
|
||
Balance, beginning of year
|
$
|
211,412
|
|
Issuance of LTIP Units to Limited Partners
|
3
|
|
|
Conversion of OP Units held by Limited Partners into OP Units held by General Partner
|
(1,718
|
)
|
|
Equity compensation associated with Units – Limited Partners
|
11,144
|
|
|
Net income available to Units – Limited Partners
|
16,273
|
|
|
Units – Limited Partners distributions
|
(21,527
|
)
|
|
Change in carrying value of Redeemable Limited Partners
|
2,574
|
|
|
Adjustment for Limited Partners ownership in Operating Partnership
|
(4,272
|
)
|
|
Balance, end of period
|
$
|
213,889
|
|
|
|
||
ACCUMULATED OTHER COMPREHENSIVE (LOSS)
|
|
||
Balance, beginning of year
|
$
|
(155,162
|
)
|
Accumulated other comprehensive (loss) – derivative instruments:
|
|
||
Unrealized holding (losses) arising during the period
|
(21,784
|
)
|
|
Losses reclassified into earnings from other comprehensive income
|
12,606
|
|
|
Accumulated other comprehensive (loss) – foreign currency:
|
|
||
Currency translation adjustments arising during the period
|
(466
|
)
|
|
Balance, end of period
|
$
|
(164,806
|
)
|
|
Nine Months Ended
|
||
|
September 30, 2014
|
||
NONCONTROLLING INTERESTS
|
|
||
|
|
||
NONCONTROLLING INTERESTS – PARTIALLY OWNED PROPERTIES
|
|
||
Balance, beginning of year
|
$
|
126,583
|
|
Net income attributable to Noncontrolling Interests
|
1,800
|
|
|
Contributions by Noncontrolling Interests
|
5,684
|
|
|
Distributions to Noncontrolling Interests
|
(6,795
|
)
|
|
Acquisition of Noncontrolling Interests – Partially Owned Properties
|
(2,244
|
)
|
|
Other
|
169
|
|
|
Balance, end of period
|
$
|
125,197
|
|
1.
|
Business
|
|
|
Properties
|
|
Apartment
Units |
||
Wholly Owned Properties
|
|
368
|
|
|
99,789
|
|
Master-Leased Properties – Consolidated
|
|
3
|
|
|
853
|
|
Partially Owned Properties – Consolidated
|
|
19
|
|
|
3,771
|
|
Partially Owned Properties – Unconsolidated
|
|
4
|
|
|
1,669
|
|
Military Housing
|
|
2
|
|
|
5,005
|
|
|
|
396
|
|
|
111,087
|
|
2.
|
Summary of Significant Accounting Policies
|
3.
|
Equity, Capital and Other Interests
|
|
|
2014
|
|
Common Shares
|
|
|
|
Common Shares outstanding at January 1,
|
|
360,479,260
|
|
Common Shares Issued:
|
|
|
|
Conversion of OP Units
|
|
68,296
|
|
Exercise of share options
|
|
1,476,512
|
|
Employee Share Purchase Plan (ESPP)
|
|
56,945
|
|
Restricted share grants, net
|
|
170,460
|
|
Common Shares Other:
|
|
|
|
Conversion of restricted shares to LTIP Units
|
|
(12,146
|
)
|
Repurchased and retired
|
|
(31,240
|
)
|
Common Shares outstanding at September 30,
|
|
362,208,087
|
|
Units
|
|
|
|
Units outstanding at January 1,
|
|
14,180,376
|
|
LTIP Units, net
|
|
200,840
|
|
Conversion of restricted shares to LTIP Units
|
|
12,146
|
|
Conversion of OP Units to Common Shares
|
|
(68,296
|
)
|
Units outstanding at September 30,
|
|
14,325,066
|
|
Total Common Shares and Units outstanding at September 30,
|
|
376,533,153
|
|
Units Ownership Interest in Operating Partnership
|
|
3.8
|
%
|
|
|
2014
|
||
Balance at January 1,
|
|
$
|
363,144
|
|
Change in market value
|
|
69,579
|
|
|
Change in carrying value
|
|
(2,574
|
)
|
|
Balance at September 30,
|
|
$
|
430,149
|
|
|
|
|
|
|
|
Amounts in thousands
|
||||||||
|
|
Redemption
Date (1) |
|
Annual
Dividend per Share (2) |
|
September 30,
2014 |
|
December 31,
2013 |
||||||
Preferred Shares of beneficial interest, $0.01 par value;
100,000,000 shares authorized: |
|
|
|
|
|
|
|
|
||||||
8.29% Series K Cumulative Redeemable Preferred; liquidation
value $50 per share; 1,000,000 shares issued and outstanding at September 30, 2014 and December 31, 2013 |
|
12/10/26
|
|
|
$4.145
|
|
|
$
|
50,000
|
|
|
$
|
50,000
|
|
|
|
|
|
|
|
$
|
50,000
|
|
|
$
|
50,000
|
|
(1)
|
On or after the redemption date, redeemable preferred shares may be redeemed for cash at the option of the Company, in whole or
|
(2)
|
Dividends on Preferred Shares are payable quarterly.
|
|
|
|
|
|
|
2014
|
|
General and Limited Partner Units
|
|
|
|
General and Limited Partner Units outstanding at January 1,
|
|
374,659,636
|
|
Issued to General Partner:
|
|
|
|
Exercise of EQR share options
|
|
1,476,512
|
|
EQR’s Employee Share Purchase Plan (ESPP)
|
|
56,945
|
|
EQR's restricted share grants, net
|
|
170,460
|
|
Issued to Limited Partners:
|
|
|
|
LTIP Units, net
|
|
200,840
|
|
OP Units Other:
|
|
|
|
Repurchased and retired
|
|
(31,240
|
)
|
General and Limited Partner Units outstanding at September 30,
|
|
376,533,153
|
|
Limited Partner Units
|
|
|
|
Limited Partner Units outstanding at January 1,
|
|
14,180,376
|
|
Limited Partner LTIP Units, net
|
|
200,840
|
|
Conversion of EQR restricted shares to LTIP Units
|
|
12,146
|
|
Conversion of Limited Partner OP Units to EQR Common Shares
|
|
(68,296
|
)
|
Limited Partner Units outstanding at September 30,
|
|
14,325,066
|
|
Limited Partner Units Ownership Interest in Operating Partnership
|
|
3.8
|
%
|
|
|
2014
|
||
Balance at January 1,
|
|
$
|
363,144
|
|
Change in market value
|
|
69,579
|
|
|
Change in carrying value
|
|
(2,574
|
)
|
|
Balance at September 30,
|
|
$
|
430,149
|
|
|
|
|
|
|
|
Amounts in thousands
|
||||||||
|
|
Redemption
Date (1)
|
|
Annual
Dividend per Unit (2) |
|
September 30,
2014 |
|
December 31,
2013 |
||||||
Preference Units:
|
|
|
|
|
|
|
|
|
||||||
8.29% Series K Cumulative Redeemable Preference Units;
liquidation value $50 per unit; 1,000,000 units issued and
outstanding at September 30, 2014 and December 31, 2013
|
|
12/10/26
|
|
|
$4.145
|
|
|
$
|
50,000
|
|
|
$
|
50,000
|
|
|
|
|
|
|
|
$
|
50,000
|
|
|
$
|
50,000
|
|
(1)
|
On or after the redemption date, redeemable preference units may be redeemed for cash at the option of the Operating Partnership, in whole or in part, at a redemption price equal to the liquidation price per unit, plus accrued and unpaid distributions, if any, in conjunction with the concurrent redemption of the corresponding Company Preferred Shares.
|
(2)
|
Dividends on Preference Units are payable quarterly.
|
4.
|
Real Estate and Lease Intangibles
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
Land
|
|
$
|
6,329,907
|
|
|
$
|
6,192,512
|
|
Depreciable property:
|
|
|
|
|
||||
Buildings and improvements
|
|
18,064,739
|
|
|
17,509,609
|
|
||
Furniture, fixtures and equipment
|
|
1,345,371
|
|
|
1,214,220
|
|
||
In-Place lease intangibles
|
|
509,499
|
|
|
502,218
|
|
||
Projects under development:
|
|
|
|
|
||||
Land
|
|
395,402
|
|
|
353,574
|
|
||
Construction-in-progress
|
|
650,808
|
|
|
635,293
|
|
||
Land held for development:
|
|
|
|
|
||||
Land
|
|
228,261
|
|
|
341,389
|
|
||
Construction-in-progress
|
|
50,878
|
|
|
52,133
|
|
||
Investment in real estate
|
|
27,574,865
|
|
|
26,800,948
|
|
||
Accumulated depreciation
|
|
(5,314,260
|
)
|
|
(4,807,709
|
)
|
||
Investment in real estate, net
|
|
$
|
22,260,605
|
|
|
$
|
21,993,239
|
|
Description
|
|
Balance Sheet Location
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
Assets
|
|
|
|
|
|
|
||||
Ground lease intangibles – below market
|
|
Other Assets
|
|
$
|
178,251
|
|
|
$
|
178,251
|
|
Retail lease intangibles – above market
|
|
Other Assets
|
|
1,260
|
|
|
1,260
|
|
||
Lease intangible assets
|
|
|
|
179,511
|
|
|
179,511
|
|
||
Accumulated amortization
|
|
|
|
(7,777
|
)
|
|
(4,364
|
)
|
||
Lease intangible assets, net
|
|
|
|
$
|
171,734
|
|
|
$
|
175,147
|
|
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
||||
Ground lease intangibles – above market
|
|
Other Liabilities
|
|
$
|
2,400
|
|
|
$
|
2,400
|
|
Retail lease intangibles – below market
|
|
Other Liabilities
|
|
5,270
|
|
|
5,500
|
|
||
Lease intangible liabilities
|
|
|
|
7,670
|
|
|
7,900
|
|
||
Accumulated amortization
|
|
|
|
(1,968
|
)
|
|
(1,161
|
)
|
||
Lease intangible liabilities, net
|
|
|
|
$
|
5,702
|
|
|
$
|
6,739
|
|
|
|
Remaining
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ground lease intangibles
|
|
$
|
1,080
|
|
|
$
|
4,321
|
|
|
$
|
4,321
|
|
|
$
|
4,321
|
|
|
$
|
4,321
|
|
|
$
|
4,321
|
|
Retail lease intangibles
|
|
(234
|
)
|
|
(939
|
)
|
|
(896
|
)
|
|
(540
|
)
|
|
(71
|
)
|
|
(71
|
)
|
||||||
Total
|
|
$
|
846
|
|
|
$
|
3,382
|
|
|
$
|
3,425
|
|
|
$
|
3,781
|
|
|
$
|
4,250
|
|
|
$
|
4,250
|
|
|
|
|
||
Land
|
|
$
|
2,239,000
|
|
Depreciable property:
|
|
|
||
Buildings and improvements
|
|
5,765,538
|
|
|
Furniture, fixtures and equipment
|
|
61,470
|
|
|
In-Place lease intangibles
|
|
304,830
|
|
|
Projects under development
|
|
36,583
|
|
|
Land held for development
|
|
244,097
|
|
|
Investments in unconsolidated entities
|
|
230,608
|
|
|
Other assets
|
|
195,260
|
|
|
Other liabilities
|
|
(108,997
|
)
|
|
Net assets acquired
|
|
$
|
8,968,389
|
|
Description
|
|
Balance Sheet Location
|
|
Fair Value
|
||
Ground lease intangibles – below market
|
|
Other Assets
|
|
$
|
178,251
|
|
Retail lease intangibles – above market
|
|
Other Assets
|
|
1,260
|
|
|
|
|
|
|
|
||
Ground lease intangibles – above market
|
|
Other Liabilities
|
|
2,400
|
|
|
Retail lease intangibles – below market
|
|
Other Liabilities
|
|
8,040
|
|
|
|
Nine Months Ended
|
|
Quarter Ended
|
||||
|
|
September 30, 2013
|
|
September 30, 2013
|
||||
|
|
|
|
|||||
Total revenues
|
|
$
|
1,854,509
|
|
|
$
|
629,446
|
|
Income from continuing operations
|
|
132,592
|
|
|
84,978
|
|
||
Discontinued operations, net
|
|
2,024,346
|
|
|
403,181
|
|
||
Net income
|
|
2,156,938
|
|
|
488,159
|
|
||
Net income available to Common Shares
|
|
2,070,153
|
|
|
468,959
|
|
||
Earnings per share - basic:
|
|
|
|
|
||||
Net income available to Common Shares
|
|
$
|
5.76
|
|
|
$
|
1.30
|
|
Weighted average Common Shares outstanding (1)
|
|
359,611
|
|
|
359,811
|
|
||
Earnings per share - diluted:
|
|
|
|
|
||||
Net income available to Common Shares
|
|
$
|
5.74
|
|
|
$
|
1.30
|
|
Weighted average Common Shares outstanding (1)
|
|
375,808
|
|
|
375,883
|
|
(1)
|
Includes an adjustment for Common Shares issued to the public in November/December 2012 and to an affiliate of Lehman Brothers Holdings Inc. in February 2013 as partial consideration for the Archstone Acquisition.
|
|
|
Nine Months Ended
|
|
Quarter Ended
|
||||
|
|
September 30, 2013
|
|
September 30, 2013
|
||||
|
|
|
|
|
||||
Total revenues
|
|
$
|
1,854,509
|
|
|
$
|
629,446
|
|
Income from continuing operations
|
|
132,592
|
|
|
84,978
|
|
||
Discontinued operations, net
|
|
2,024,346
|
|
|
403,181
|
|
||
Net income
|
|
2,156,938
|
|
|
488,159
|
|
||
Net income available to Units
|
|
2,155,736
|
|
|
487,433
|
|
||
Earnings per Unit - basic:
|
|
|
|
|
||||
Net income available to Units
|
|
$
|
5.76
|
|
|
$
|
1.30
|
|
Weighted average Units outstanding (1)
|
|
373,347
|
|
|
373,547
|
|
||
Earnings per Unit - diluted:
|
|
|
|
|
||||
Net income available to Units
|
|
$
|
5.74
|
|
|
$
|
1.30
|
|
Weighted average Units outstanding (1)
|
|
375,808
|
|
|
375,883
|
|
(1)
|
Includes an adjustment for Common Shares issued to the public in November/December 2012 and to an affiliate of Lehman Brothers Holdings Inc. in February 2013 as partial consideration for the Archstone Acquisition. Concurrent with these transactions, ERPOP issued the same number of OP Units to EQR.
|
|
|
Properties
|
|
Apartment Units
|
|
Purchase Price
|
||||
Rental Properties
|
|
4
|
|
|
1,080
|
|
|
$
|
375,610
|
|
Land Parcels (two)
|
|
—
|
|
|
—
|
|
|
28,790
|
|
|
Total
|
|
4
|
|
|
1,080
|
|
|
$
|
404,400
|
|
|
|
Properties
|
|
Apartment Units
|
|
Sales Price
|
||||
Rental Properties
|
|
4
|
|
|
1,317
|
|
|
$
|
197,100
|
|
Land Parcels (two)
|
|
—
|
|
|
—
|
|
|
30,502
|
|
|
Total
|
|
4
|
|
|
1,317
|
|
|
$
|
227,602
|
|
5.
|
Commitments to Acquire/Dispose of Real Estate
|
|
|
Properties
|
|
Apartment Units
|
|
Purchase Price
|
||||
Rental Properties
|
|
1
|
|
|
161
|
|
|
$
|
61,000
|
|
Land Parcel
|
|
—
|
|
|
—
|
|
|
3,300
|
|
|
Total
|
|
1
|
|
|
161
|
|
|
$
|
64,300
|
|
|
|
Properties
|
|
Apartment Units
|
|
Sales Price
|
||||
Rental Properties
|
|
3
|
|
|
529
|
|
|
$
|
124,400
|
|
Land Parcel
|
|
—
|
|
|
—
|
|
|
32,100
|
|
|
Total
|
|
3
|
|
|
529
|
|
|
$
|
156,500
|
|
6.
|
Investments in Partially Owned Entities
|
|
Consolidated
|
|
Unconsolidated
|
||||||||||||||||||||||||
|
Development Projects
|
|
|
|
|
|
Development Projects
|
|
|
|
|
||||||||||||||||
|
Held for
and/or Under Development |
|
|
|
|
|
Held for
and/or Under Development |
|
|
|
Operating
|
|
|
||||||||||||||
|
|
|
|
|
|
|
Completed, Not
Stabilized (3) |
|
|
|
|||||||||||||||||
|
|
Operating
|
|
Total
|
|
|
|
|
Total
|
||||||||||||||||||
Operating information for the nine months
ended 9/30/14 (at 100%): |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating revenue
|
$
|
—
|
|
|
$
|
65,565
|
|
|
$
|
65,565
|
|
|
$
|
—
|
|
|
$
|
6,874
|
|
|
$
|
14,499
|
|
|
$
|
21,373
|
|
Operating expenses
|
—
|
|
|
19,390
|
|
|
19,390
|
|
|
159
|
|
|
2,486
|
|
|
5,442
|
|
|
8,087
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net operating income (loss)
|
—
|
|
|
46,175
|
|
|
46,175
|
|
|
(159
|
)
|
|
4,388
|
|
|
9,057
|
|
|
13,286
|
|
|||||||
Depreciation
|
—
|
|
|
16,202
|
|
|
16,202
|
|
|
—
|
|
|
4,903
|
|
|
6,102
|
|
|
11,005
|
|
|||||||
General and administrative/other
|
1
|
|
|
34
|
|
|
35
|
|
|
—
|
|
|
1
|
|
|
205
|
|
|
206
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Operating (loss) income
|
(1
|
)
|
|
29,939
|
|
|
29,938
|
|
|
(159
|
)
|
|
(516
|
)
|
|
2,750
|
|
|
2,075
|
|
|||||||
Interest and other income
|
—
|
|
|
10
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Other expenses
|
—
|
|
|
(54
|
)
|
|
(54
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Expense incurred, net
|
—
|
|
|
(11,708
|
)
|
|
(11,708
|
)
|
|
—
|
|
|
(3,905
|
)
|
|
(3,422
|
)
|
|
(7,327
|
)
|
|||||||
Amortization of deferred financing costs
|
—
|
|
|
(266
|
)
|
|
(266
|
)
|
|
—
|
|
|
—
|
|
|
(81
|
)
|
|
(81
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(Loss) income before income and other taxes
and (loss) from investments in unconsolidated entities |
(1
|
)
|
|
17,921
|
|
|
17,920
|
|
|
(159
|
)
|
|
(4,421
|
)
|
|
(753
|
)
|
|
(5,333
|
)
|
|||||||
Income and other tax (expense) benefit
|
—
|
|
|
(45
|
)
|
|
(45
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|||||||
(Loss) from investments in unconsolidated
entities |
—
|
|
|
(1,273
|
)
|
|
(1,273
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net (loss) income
|
$
|
(1
|
)
|
|
$
|
16,603
|
|
|
$
|
16,602
|
|
|
$
|
(159
|
)
|
|
$
|
(4,428
|
)
|
|
$
|
(753
|
)
|
|
$
|
(5,340
|
)
|
(1)
|
Project and apartment unit counts exclude all uncompleted development projects until those projects are substantially completed.
|
(2)
|
All debt is non-recourse to the Company with the exception of
50%
of the current
$25.6 million
outstanding debt balance on one unconsolidated development project.
|
(3)
|
Projects included here are substantially complete. However, they may still require additional exterior and interior work for all units to be available for leasing.
|
Note:
|
The above tables exclude the Company's interests in unconsolidated joint ventures entered into with AVB in connection with the Archstone Transaction. These ventures own certain non-core Archstone assets that are held for sale and succeeded to certain residual Archstone liabilities, such as liability for various employment-related matters as well as responsibility for tax protection arrangements and third-party preferred interests in former Archstone subsidiaries. The preferred interests have an aggregate liquidation value of
$73.5 million
at
September 30, 2014
. The ventures are owned
60%
by the Company and
40%
by AVB.
|
•
|
Nexus Sawgrass – This development project was completed and stabilized during the quarter ended
September 30, 2014
. Total project costs were approximately
$78.6 million
and construction was predominantly funded with a long-term, non-recourse secured loan from the partner. The mortgage loan has a maximum debt commitment of
$48.7 million
and a current unconsolidated outstanding balance of
$48.6 million
; the loan bears interest at
5.60%
and matures
January 1, 2021
.
|
•
|
Domain – This development project is substantially complete. Total project costs are expected to be approximately
$155.8 million
and construction was predominantly funded with a long-term, non-recourse secured loan from the partner. The mortgage loan has a maximum debt commitment of
$98.6 million
and a current unconsolidated outstanding balance of
$96.8 million
; the loan bears interest at
5.75%
and matures
January 1, 2022
.
|
7.
|
Deposits – Restricted and Escrow Deposits – Mortgage
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
Tax-deferred (1031) exchange proceeds
|
|
$
|
3,909
|
|
|
$
|
—
|
|
Earnest money on pending acquisitions
|
|
330
|
|
|
4,514
|
|
||
Restricted deposits on real estate investments
|
|
33,201
|
|
|
53,771
|
|
||
Resident security and utility deposits
|
|
47,000
|
|
|
44,777
|
|
||
Other
|
|
505
|
|
|
505
|
|
||
Totals
|
|
$
|
84,945
|
|
|
$
|
103,567
|
|
|
|
September 30,
2014 |
|
December 31,
2013 |
||||
Real estate taxes and insurance
|
|
$
|
2,049
|
|
|
$
|
3,687
|
|
Replacement reserves
|
|
3,669
|
|
|
4,229
|
|
||
Mortgage principal reserves/sinking funds
|
|
39,425
|
|
|
33,868
|
|
||
Other
|
|
852
|
|
|
852
|
|
||
Totals
|
|
$
|
45,995
|
|
|
$
|
42,636
|
|
▪
|
Repaid
$72.7 million
of mortgage loans.
|
▪
|
Repaid
$500.0 million
of
5.250%
unsecured notes at maturity;
|
▪
|
Repaid its
$750.0 million
unsecured term loan facility in conjunction with the note issuances discussed below;
|
▪
|
Issued
$450.0 million
of five-year
2.375%
fixed rate public notes, receiving net proceeds of
$449.6 million
before underwriting fees and other expenses, at an all-in effective interest rate of
2.52%
and swapped the notes to a floating interest rate in conjunction with the issuance (see Note 9 for further discussion); and
|
▪
|
Issued
$750.0 million
of thirty-year
4.50%
fixed rate public notes, receiving net proceeds of
$744.7 million
before underwriting fees, hedge termination costs and other expenses, at an all-in effective interest rate of
4.57%
after termination of various forward starting swaps in conjunction with the issuance (see Note 9 for further discussion).
|
9.
|
Derivative and Other Fair Value Instruments
|
|
|
Fair Value
Hedges (1) |
|
Forward
Starting Swaps (2) |
||||
Current Notional Balance
|
|
$
|
450,000
|
|
|
$
|
200,000
|
|
Lowest Possible Notional
|
|
$
|
450,000
|
|
|
$
|
200,000
|
|
Highest Possible Notional
|
|
$
|
450,000
|
|
|
$
|
200,000
|
|
Lowest Interest Rate
|
|
2.375
|
%
|
|
2.689
|
%
|
||
Highest Interest Rate
|
|
2.375
|
%
|
|
3.191
|
%
|
||
Earliest Maturity Date
|
|
2019
|
|
|
2025
|
|
||
Latest Maturity Date
|
|
2019
|
|
|
2025
|
|
(1)
|
Fair Value Hedges – Converts outstanding fixed rate unsecured notes (
$450.0 million
2.375%
notes due
July 1, 2019
) to a floating interest rate of 90-Day LIBOR plus
0.61%
.
|
(2)
|
Forward Starting Swaps – Designed to partially fix interest rates in advance of a planned future debt issuance. These swaps have mandatory counterparty terminations in 2016, and are targeted to 2015 issuances.
|
•
|
Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
|
•
|
Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
|
•
|
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
Description
|
|
Balance Sheet
Location
|
|
9/30/2014
|
|
Quoted Prices in
Active Markets for
Identical Assets/Liabilities
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Forward Starting Swaps
|
|
Other Assets
|
|
$
|
678
|
|
|
$
|
—
|
|
|
$
|
678
|
|
|
$
|
—
|
|
Supplemental Executive Retirement Plan
|
|
Other Assets
|
|
98,350
|
|
|
98,350
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
99,028
|
|
|
$
|
98,350
|
|
|
$
|
678
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fair Value Hedges
|
|
Other Liabilities
|
|
$
|
2,485
|
|
|
$
|
—
|
|
|
$
|
2,485
|
|
|
$
|
—
|
|
Forward Starting Swaps
|
|
Other Liabilities
|
|
2,927
|
|
|
—
|
|
|
2,927
|
|
|
—
|
|
||||
Supplemental Executive Retirement Plan
|
|
Other Liabilities
|
|
98,350
|
|
|
98,350
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
103,762
|
|
|
$
|
98,350
|
|
|
$
|
5,412
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Redeemable Noncontrolling Interests –
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Partnership/Redeemable
|
|
|
|
|
|
|
|
|
|
|
||||||||
Limited Partners
|
|
Mezzanine
|
|
$
|
430,149
|
|
|
$
|
—
|
|
|
$
|
430,149
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
Description
|
|
Balance Sheet
Location
|
|
12/31/2013
|
|
Quoted Prices in
Active Markets for
Identical Assets/Liabilities
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Forward Starting Swaps
|
|
Other Assets
|
|
$
|
18,710
|
|
|
$
|
—
|
|
|
$
|
18,710
|
|
|
$
|
—
|
|
Supplemental Executive Retirement Plan
|
|
Other Assets
|
|
83,845
|
|
|
83,845
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
102,555
|
|
|
$
|
83,845
|
|
|
$
|
18,710
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||
Supplemental Executive Retirement Plan
|
|
Other Liabilities
|
|
$
|
83,845
|
|
|
$
|
83,845
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
|
|
|
$
|
83,845
|
|
|
$
|
83,845
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Redeemable Noncontrolling Interests –
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Partnership/Redeemable
|
|
|
|
|
|
|
|
|
|
|
||||||||
Limited Partners
|
|
Mezzanine
|
|
$
|
363,144
|
|
|
$
|
—
|
|
|
$
|
363,144
|
|
|
$
|
—
|
|
September 30, 2014
Type of Fair Value Hedge
|
|
Location of
Gain/(Loss)
Recognized in
Income on
Derivative
|
|
Amount of
Gain/(Loss)
Recognized in
Income on
Derivative
|
|
Hedged Item
|
|
Income Statement
Location of
Hedged Item
Gain/(Loss)
|
|
Amount of
Gain/(Loss)
Recognized in
Income
on Hedged Item
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||
Interest Rate Contracts:
|
|
|
|
|
|
|
|
|
|
|
||||
Interest Rate Swaps
|
|
Interest expense
|
|
$
|
(2,485
|
)
|
|
Fixed rate debt
|
|
Interest expense
|
|
$
|
2,485
|
|
Total
|
|
|
|
$
|
(2,485
|
)
|
|
|
|
|
|
$
|
2,485
|
|
September 30, 2013
Type of Fair Value Hedge
|
|
Location of
Gain/(Loss) Recognized in Income on Derivative |
|
Amount of
Gain/(Loss) Recognized in Income on Derivative |
|
Hedged Item
|
|
Income Statement
Location of Hedged Item Gain/(Loss) |
|
Amount of
Gain/(Loss)
Recognized in
Income
on Hedged Item
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||
Interest Rate Contracts:
|
|
|
|
|
|
|
|
|
|
|
||||
Interest Rate Swaps
|
|
Interest expense
|
|
$
|
(1,524
|
)
|
|
Fixed rate debt
|
|
Interest expense
|
|
$
|
1,524
|
|
Total
|
|
|
|
$
|
(1,524
|
)
|
|
|
|
|
|
$
|
1,524
|
|
|
|
Effective Portion
|
|
Ineffective Portion
|
||||||||||||
September 30, 2014
Type of Cash Flow Hedge
|
|
Amount of
Gain/(Loss)
Recognized in OCI
on Derivative
|
|
Location of Gain/
(Loss)
Reclassified from
Accumulated
OCI into Income
|
|
Amount of Gain/
(Loss) Reclassified from Accumulated OCI into Income |
|
Location of
Gain/(Loss)
Recognized in
Income
on Derivative
|
|
Amount of Gain/
(Loss) Reclassified from Accumulated OCI into Income |
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest Rate Contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||
Forward Starting Swaps/Treasury Locks
|
$
|
(21,693
|
)
|
|
Interest expense
|
|
$
|
(12,606
|
)
|
|
Interest expense
|
|
$
|
91
|
|
|
Total
|
|
$
|
(21,693
|
)
|
|
|
|
$
|
(12,606
|
)
|
|
|
|
$
|
91
|
|
|
|
Effective Portion
|
|
Ineffective Portion
|
||||||||||||
September 30, 2013
Type of Cash Flow Hedge
|
|
Amount of
Gain/(Loss)
Recognized in OCI
on Derivative
|
|
Location of Gain/
(Loss)
Reclassified from
Accumulated
OCI into Income
|
|
Amount of Gain/
(Loss) Reclassified from Accumulated OCI into Income |
|
Location of
Gain/(Loss)
Recognized in
Income
on Derivative
|
|
Amount of Gain/
(Loss) Reclassified from Accumulated OCI into Income |
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest Rate Contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||
Forward Starting Swaps/Treasury Locks
|
|
$
|
8,737
|
|
|
Interest expense
|
|
$
|
(16,084
|
)
|
|
N/A
|
|
$
|
—
|
|
Total
|
|
$
|
8,737
|
|
|
|
|
$
|
(16,084
|
)
|
|
|
|
$
|
—
|
|
|
|
Nine Months Ended September 30,
|
|
Quarter Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Numerator for net income per share – basic:
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
|
$
|
301,598
|
|
|
$
|
(237,315
|
)
|
|
$
|
117,611
|
|
|
$
|
(13,465
|
)
|
Allocation to Noncontrolling Interests – Operating Partnership, net
|
|
(16,216
|
)
|
|
9,517
|
|
|
(8,740
|
)
|
|
521
|
|
||||
Net gain on sales of real estate properties
|
|
128,544
|
|
|
—
|
|
|
113,641
|
|
|
—
|
|
||||
Net (income) loss attributable to Noncontrolling Interests – Partially
Owned Properties |
|
(1,800
|
)
|
|
1,101
|
|
|
(708
|
)
|
|
311
|
|
||||
Preferred distributions
|
|
(3,109
|
)
|
|
(3,109
|
)
|
|
(1,037
|
)
|
|
(1,037
|
)
|
||||
Income (loss) from continuing operations available to Common Shares,
net of Noncontrolling Interests |
|
409,017
|
|
|
(229,806
|
)
|
|
220,767
|
|
|
(13,670
|
)
|
||||
Discontinued operations, net of Noncontrolling Interests
|
|
1,443
|
|
|
1,946,334
|
|
|
(60
|
)
|
|
389,825
|
|
||||
Numerator for net income per share – basic
|
|
$
|
410,460
|
|
|
$
|
1,716,528
|
|
|
$
|
220,707
|
|
|
$
|
376,155
|
|
Numerator for net income per share – diluted (1):
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
$
|
301,598
|
|
|
|
|
|
$
|
117,611
|
|
|
|
|||
Net gain on sales of real estate properties
|
|
128,544
|
|
|
|
|
113,641
|
|
|
|
||||||
Net (income) attributable to Noncontrolling Interests – Partially
Owned Properties |
|
(1,800
|
)
|
|
|
|
|
(708
|
)
|
|
|
|||||
Preferred distributions
|
|
(3,109
|
)
|
|
|
|
|
(1,037
|
)
|
|
|
|||||
Income from continuing operations available to Common Shares
|
|
425,233
|
|
|
|
|
|
229,507
|
|
|
|
|||||
Discontinued operations, net
|
|
1,500
|
|
|
|
|
|
(62
|
)
|
|
|
|||||
Numerator for net income per share – diluted (1)
|
|
$
|
426,733
|
|
|
$
|
1,716,528
|
|
|
$
|
229,445
|
|
|
$
|
376,155
|
|
Denominator for net income per share – basic and diluted (1):
|
|
|
|
|
|
|
|
|
||||||||
Denominator for net income per share – basic
|
|
360,900
|
|
|
352,414
|
|
|
361,409
|
|
|
359,811
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
OP Units
|
|
13,726
|
|
|
|
|
13,707
|
|
|
|
||||||
Long-term compensation shares/units
|
|
2,602
|
|
|
|
|
2,838
|
|
|
|
||||||
Denominator for net income per share – diluted (1)
|
|
377,228
|
|
|
352,414
|
|
|
377,954
|
|
|
359,811
|
|
||||
Net income per share – basic
|
|
$
|
1.14
|
|
|
$
|
4.87
|
|
|
$
|
0.61
|
|
|
$
|
1.05
|
|
Net income per share – diluted
|
|
$
|
1.13
|
|
|
$
|
4.87
|
|
|
$
|
0.61
|
|
|
$
|
1.05
|
|
Net income per share – basic:
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations available to Common Shares,
net of Noncontrolling Interests |
|
$
|
1.133
|
|
|
$
|
(0.652
|
)
|
|
$
|
0.611
|
|
|
$
|
(0.038
|
)
|
Discontinued operations, net of Noncontrolling Interests
|
|
0.004
|
|
|
5.523
|
|
|
—
|
|
|
1.083
|
|
||||
Net income per share – basic
|
|
$
|
1.137
|
|
|
$
|
4.871
|
|
|
$
|
0.611
|
|
|
$
|
1.045
|
|
Net income per share – diluted (1):
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations available to Common Shares
|
|
$
|
1.127
|
|
|
$
|
(0.652
|
)
|
|
$
|
0.607
|
|
|
$
|
(0.038
|
)
|
Discontinued operations, net
|
|
0.004
|
|
|
5.523
|
|
|
—
|
|
|
1.083
|
|
||||
Net income per share – diluted
|
|
$
|
1.131
|
|
|
$
|
4.871
|
|
|
$
|
0.607
|
|
|
$
|
1.045
|
|
(1)
|
Potential common shares issuable from the assumed conversion of OP Units and the exercise/vesting of long-term compensation shares/units are automatically anti-dilutive and therefore excluded from the diluted earnings per share calculation as the Company had a loss from continuing operations for the nine months and quarter ended September 30, 2013.
|
|
|
Nine Months Ended September 30,
|
|
Quarter Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Numerator for net income per Unit – basic and diluted (1):
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations
|
|
$
|
301,598
|
|
|
$
|
(237,315
|
)
|
|
$
|
117,611
|
|
|
$
|
(13,465
|
)
|
Net gain on sales of real estate properties
|
|
128,544
|
|
|
—
|
|
|
113,641
|
|
|
—
|
|
||||
Net (income) loss attributable to Noncontrolling Interests – Partially
Owned Properties |
|
(1,800
|
)
|
|
1,101
|
|
|
(708
|
)
|
|
311
|
|
||||
Allocation to Preference Units
|
|
(3,109
|
)
|
|
(3,109
|
)
|
|
(1,037
|
)
|
|
(1,037
|
)
|
||||
Income (loss) from continuing operations available to Units
|
|
425,233
|
|
|
(239,323
|
)
|
|
229,507
|
|
|
(14,191
|
)
|
||||
Discontinued operations, net
|
|
1,500
|
|
|
2,026,798
|
|
|
(62
|
)
|
|
405,182
|
|
||||
Numerator for net income per Unit – basic and diluted (1)
|
|
$
|
426,733
|
|
|
$
|
1,787,475
|
|
|
$
|
229,445
|
|
|
$
|
390,991
|
|
Denominator for net income per Unit – basic and diluted (1):
|
|
|
|
|
|
|
|
|
||||||||
Denominator for net income per Unit – basic
|
|
374,626
|
|
|
366,150
|
|
|
375,116
|
|
|
373,547
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Dilution for Units issuable upon assumed exercise/vesting of the
Company’s long-term compensation shares/units |
|
2,602
|
|
|
|
|
2,838
|
|
|
|
||||||
Denominator for net income per Unit – diluted (1)
|
|
377,228
|
|
|
366,150
|
|
|
377,954
|
|
|
373,547
|
|
||||
Net income per Unit – basic
|
|
$
|
1.14
|
|
|
$
|
4.87
|
|
|
$
|
0.61
|
|
|
$
|
1.05
|
|
Net income per Unit – diluted
|
|
$
|
1.13
|
|
|
$
|
4.87
|
|
|
$
|
0.61
|
|
|
$
|
1.05
|
|
Net income per Unit – basic:
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations available to Units
|
|
$
|
1.133
|
|
|
$
|
(0.652
|
)
|
|
$
|
0.611
|
|
|
$
|
(0.038
|
)
|
Discontinued operations, net
|
|
0.004
|
|
|
5.523
|
|
|
—
|
|
|
1.083
|
|
||||
Net income per Unit – basic
|
|
$
|
1.137
|
|
|
$
|
4.871
|
|
|
$
|
0.611
|
|
|
$
|
1.045
|
|
Net income per Unit – diluted (1):
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations available to Units
|
|
$
|
1.127
|
|
|
$
|
(0.652
|
)
|
|
$
|
0.607
|
|
|
$
|
(0.038
|
)
|
Discontinued operations, net
|
|
0.004
|
|
|
5.523
|
|
|
—
|
|
|
1.083
|
|
||||
Net income per Unit – diluted
|
|
$
|
1.131
|
|
|
$
|
4.871
|
|
|
$
|
0.607
|
|
|
$
|
1.045
|
|
(1)
|
Potential Units issuable from the assumed exercise/vesting of the Company's long-term compensation shares/units are automatically anti-dilutive and therefore excluded from the diluted earnings per Unit calculation as the Operating Partnership had a loss from continuing operations for the nine months and quarter ended September 30, 2013.
|
11.
|
Discontinued Operations
|
|
|
Nine Months Ended September 30,
|
|
Quarter Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
|
||||||||
Rental income
|
|
$
|
1,218
|
|
|
$
|
119,191
|
|
|
$
|
(57
|
)
|
|
$
|
11,235
|
|
Total revenues
|
|
1,218
|
|
|
119,191
|
|
|
(57
|
)
|
|
11,235
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
EXPENSES (1)
|
|
|
|
|
|
|
|
|
||||||||
Property and maintenance
|
|
(125
|
)
|
|
35,571
|
|
|
(84
|
)
|
|
4,122
|
|
||||
Real estate taxes and insurance
|
|
146
|
|
|
11,602
|
|
|
152
|
|
|
735
|
|
||||
Property management
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Depreciation
|
|
—
|
|
|
33,864
|
|
|
—
|
|
|
2,902
|
|
||||
General and administrative
|
|
59
|
|
|
77
|
|
|
8
|
|
|
4
|
|
||||
Total expenses
|
|
80
|
|
|
81,115
|
|
|
76
|
|
|
7,763
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Discontinued operating income (loss)
|
|
1,138
|
|
|
38,076
|
|
|
(133
|
)
|
|
3,472
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest and other income
|
|
152
|
|
|
156
|
|
|
72
|
|
|
66
|
|
||||
Other expenses
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
||||
Interest (2):
|
|
|
|
|
|
|
|
|
||||||||
Expense incurred, net
|
|
—
|
|
|
(1,276
|
)
|
|
—
|
|
|
(18
|
)
|
||||
Amortization of deferred financing costs
|
|
—
|
|
|
(228
|
)
|
|
—
|
|
|
—
|
|
||||
Income and other tax (expense) benefit
|
|
(13
|
)
|
|
(504
|
)
|
|
—
|
|
|
(41
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Discontinued operations
|
|
1,277
|
|
|
36,221
|
|
|
(61
|
)
|
|
3,479
|
|
||||
Net gain on sales of discontinued operations
|
|
223
|
|
|
1,990,577
|
|
|
(1
|
)
|
|
401,703
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Discontinued operations, net
|
|
$
|
1,500
|
|
|
$
|
2,026,798
|
|
|
$
|
(62
|
)
|
|
$
|
405,182
|
|
(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.
|
12.
|
Commitments and Contingencies
|
13.
|
Reportable Segments
|
|
|
Nine Months Ended September 30, 2014
|
|
Nine Months Ended September 30, 2013
|
||||||||||||||||||||
|
|
Rental Income
|
|
Operating Expenses
|
|
NOI
|
|
Rental Income
|
|
Operating Expenses
|
|
NOI
|
||||||||||||
Same store (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Boston
|
|
$
|
188,509
|
|
|
$
|
61,195
|
|
|
$
|
127,314
|
|
|
$
|
182,143
|
|
|
$
|
59,373
|
|
|
$
|
122,770
|
|
Denver
|
|
82,392
|
|
|
23,263
|
|
|
59,129
|
|
|
76,796
|
|
|
23,095
|
|
|
53,701
|
|
||||||
New York
|
|
340,374
|
|
|
129,561
|
|
|
210,813
|
|
|
327,884
|
|
|
124,960
|
|
|
202,924
|
|
||||||
San Francisco
|
|
251,812
|
|
|
79,898
|
|
|
171,914
|
|
|
232,062
|
|
|
81,417
|
|
|
150,645
|
|
||||||
Seattle
|
|
116,581
|
|
|
38,649
|
|
|
77,932
|
|
|
108,789
|
|
|
37,108
|
|
|
71,681
|
|
||||||
South Florida
|
|
143,000
|
|
|
53,347
|
|
|
89,653
|
|
|
136,599
|
|
|
52,238
|
|
|
84,361
|
|
||||||
Southern California
|
|
314,247
|
|
|
104,996
|
|
|
209,251
|
|
|
300,788
|
|
|
104,211
|
|
|
196,577
|
|
||||||
Washington DC
|
|
335,154
|
|
|
108,931
|
|
|
226,223
|
|
|
337,270
|
|
|
107,547
|
|
|
229,723
|
|
||||||
Non-core
|
|
92,660
|
|
|
34,236
|
|
|
58,424
|
|
|
89,791
|
|
|
33,349
|
|
|
56,442
|
|
||||||
Total same store
|
|
1,864,729
|
|
|
634,076
|
|
|
1,230,653
|
|
|
1,792,122
|
|
|
623,298
|
|
|
1,168,824
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-same store/other (2) (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Boston
|
|
2,749
|
|
|
639
|
|
|
2,110
|
|
|
1,900
|
|
|
430
|
|
|
1,470
|
|
||||||
Seattle
|
|
8,608
|
|
|
3,014
|
|
|
5,594
|
|
|
2,855
|
|
|
813
|
|
|
2,042
|
|
||||||
South Florida
|
|
3,687
|
|
|
2,113
|
|
|
1,574
|
|
|
44
|
|
|
364
|
|
|
(320
|
)
|
||||||
Southern California
|
|
28,005
|
|
|
12,737
|
|
|
15,268
|
|
|
9,824
|
|
|
4,554
|
|
|
5,270
|
|
||||||
Washington DC
|
|
17,324
|
|
|
6,005
|
|
|
11,319
|
|
|
9,109
|
|
|
3,276
|
|
|
5,833
|
|
||||||
Other (3)
|
|
17,390
|
|
|
9,318
|
|
|
8,072
|
|
|
17,738
|
|
|
15,954
|
|
|
1,784
|
|
||||||
Total non-same store/other
|
|
77,763
|
|
|
33,826
|
|
|
43,937
|
|
|
41,470
|
|
|
25,391
|
|
|
16,079
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Archstone pre-ownership (4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(92,423
|
)
|
|
(36,729
|
)
|
|
(55,694
|
)
|
||||||
Total
|
|
$
|
1,942,492
|
|
|
$
|
667,902
|
|
|
$
|
1,274,590
|
|
|
$
|
1,741,169
|
|
|
$
|
611,960
|
|
|
$
|
1,129,209
|
|
(1)
|
Same store primarily includes all properties acquired or completed and stabilized prior to January 1, 2013, less properties subsequently sold, which represented
99,686
apartment units. Also includes
18,465
stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company.
|
(2)
|
Non-same store primarily includes properties acquired after January 1, 2013, plus any properties in lease-up and not stabilized as of January 1, 2013, but excludes
18,465
stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company.
|
(3)
|
Other includes development, other corporate operations and operations prior to sale for properties sold in 2014 that do not meet the new discontinued operations criteria.
|
(4)
|
Represents pro forma Archstone pre-ownership results for the period January 1, 2013 to February 27, 2013 that is included in 2013 same store results.
|
|
|
Quarter Ended September 30, 2014
|
|
Quarter Ended September 30, 2013
|
||||||||||||||||||||
|
|
Rental Income
|
|
Operating Expenses
|
|
NOI
|
|
Rental Income
|
|
Operating Expenses
|
|
NOI
|
||||||||||||
Same store (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Boston
|
|
$
|
63,485
|
|
|
$
|
19,781
|
|
|
$
|
43,704
|
|
|
$
|
61,687
|
|
|
$
|
19,721
|
|
|
$
|
41,966
|
|
Denver
|
|
28,269
|
|
|
8,164
|
|
|
20,105
|
|
|
26,303
|
|
|
8,109
|
|
|
18,194
|
|
||||||
New York
|
|
114,968
|
|
|
41,457
|
|
|
73,511
|
|
|
110,588
|
|
|
41,215
|
|
|
69,373
|
|
||||||
San Francisco
|
|
86,468
|
|
|
26,938
|
|
|
59,530
|
|
|
79,602
|
|
|
27,312
|
|
|
52,290
|
|
||||||
Seattle
|
|
41,575
|
|
|
13,428
|
|
|
28,147
|
|
|
38,786
|
|
|
12,992
|
|
|
25,794
|
|
||||||
South Florida
|
|
48,245
|
|
|
17,805
|
|
|
30,440
|
|
|
46,135
|
|
|
17,673
|
|
|
28,462
|
|
||||||
Southern California
|
|
106,974
|
|
|
35,543
|
|
|
71,431
|
|
|
102,422
|
|
|
35,062
|
|
|
67,360
|
|
||||||
Washington DC
|
|
114,478
|
|
|
36,841
|
|
|
77,637
|
|
|
114,793
|
|
|
36,905
|
|
|
77,888
|
|
||||||
Non-core
|
|
31,391
|
|
|
11,387
|
|
|
20,004
|
|
|
30,294
|
|
|
11,092
|
|
|
19,202
|
|
||||||
Total same store
|
|
635,853
|
|
|
211,344
|
|
|
424,509
|
|
|
610,610
|
|
|
210,081
|
|
|
400,529
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-same store/other (2) (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Boston
|
|
931
|
|
|
215
|
|
|
716
|
|
|
747
|
|
|
176
|
|
|
571
|
|
||||||
Seattle
|
|
2,464
|
|
|
645
|
|
|
1,819
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
South Florida
|
|
1,645
|
|
|
736
|
|
|
909
|
|
|
21
|
|
|
218
|
|
|
(197
|
)
|
||||||
Southern California
|
|
11,889
|
|
|
4,653
|
|
|
7,236
|
|
|
4,413
|
|
|
1,962
|
|
|
2,451
|
|
||||||
Washington DC
|
|
4,899
|
|
|
1,654
|
|
|
3,245
|
|
|
2,458
|
|
|
1,003
|
|
|
1,455
|
|
||||||
Other (3)
|
|
4,320
|
|
|
(128
|
)
|
|
4,448
|
|
|
5,814
|
|
|
133
|
|
|
5,681
|
|
||||||
Total non-same store/other
|
26,148
|
|
|
7,775
|
|
|
18,373
|
|
|
13,453
|
|
|
3,492
|
|
|
9,961
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
|
$
|
662,001
|
|
|
$
|
219,119
|
|
|
$
|
442,882
|
|
|
$
|
624,063
|
|
|
$
|
213,573
|
|
|
$
|
410,490
|
|
(1)
|
Same store primarily includes all properties acquired or completed and stabilized prior to July 1, 2013, less properties subsequently sold, which represented
100,196
apartment units. Also includes
18,465
stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company.
|
(2)
|
Non-same store primarily includes properties acquired after July 1, 2013, plus any properties in lease-up and not stabilized as of July 1, 2013, but excludes
18,465
stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company.
|
(3)
|
Other includes development, other corporate operations and operations prior to sale for properties sold in 2014 that do not meet the new discontinued operations criteria.
|
|
|
Nine Months Ended September 30, 2014
|
||||||
|
|
Total Assets
|
|
Capital Expenditures
|
||||
Same store (1)
|
|
|
|
|
|
|
||
Boston
|
|
$
|
1,939,055
|
|
|
$
|
14,656
|
|
Denver
|
|
525,685
|
|
|
3,900
|
|
||
New York
|
|
4,683,104
|
|
|
14,802
|
|
||
San Francisco
|
|
2,736,460
|
|
|
20,234
|
|
||
Seattle
|
|
1,039,100
|
|
|
9,699
|
|
||
South Florida
|
|
1,145,788
|
|
|
11,377
|
|
||
Southern California
|
|
2,955,062
|
|
|
19,125
|
|
||
Washington DC
|
|
4,252,450
|
|
|
30,477
|
|
||
Non-core
|
|
575,000
|
|
|
4,967
|
|
||
Total same store
|
|
19,851,704
|
|
|
129,237
|
|
||
|
|
|
|
|
||||
Non-same store/other (2) (3)
|
|
|
|
|
||||
Boston
|
|
48,570
|
|
|
690
|
|
||
Seattle
|
|
226,023
|
|
|
396
|
|
||
South Florida
|
|
68,528
|
|
|
—
|
|
||
Southern California
|
|
754,384
|
|
|
971
|
|
||
Washington DC
|
|
303,871
|
|
|
1,290
|
|
||
Other (3)
|
|
1,755,014
|
|
|
597
|
|
||
Total non-same store/other
|
|
3,156,390
|
|
|
3,944
|
|
||
Total
|
|
$
|
23,008,094
|
|
|
$
|
133,181
|
|
(1)
|
Same store primarily includes all properties acquired or completed and stabilized prior to January 1, 2013, less properties subsequently sold, which represented
99,686
apartment units. Also includes
18,465
stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company.
|
(2)
|
Non-same store primarily includes properties acquired after January 1, 2013, plus any properties in lease-up and not stabilized as of January 1, 2013, but excludes
18,465
stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company.
|
(3)
|
Other includes development, other corporate operations and capital expenditures for properties sold.
|
|
|
Nine Months Ended September 30,
|
|
Quarter Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Rental income
|
|
$
|
1,942,492
|
|
|
$
|
1,741,169
|
|
|
$
|
662,001
|
|
|
$
|
624,063
|
|
Property and maintenance expense
|
|
(361,105
|
)
|
|
(330,812
|
)
|
|
(120,144
|
)
|
|
(118,782
|
)
|
||||
Real estate taxes and insurance expense
|
|
(245,717
|
)
|
|
(217,753
|
)
|
|
(80,568
|
)
|
|
(75,916
|
)
|
||||
Property management expense
|
|
(61,080
|
)
|
|
(63,395
|
)
|
|
(18,407
|
)
|
|
(18,875
|
)
|
||||
Total operating expenses
|
|
(667,902
|
)
|
|
(611,960
|
)
|
|
(219,119
|
)
|
|
(213,573
|
)
|
||||
Net operating income
|
|
$
|
1,274,590
|
|
|
$
|
1,129,209
|
|
|
$
|
442,882
|
|
|
$
|
410,490
|
|
14.
|
Subsequent Events/Other
|
•
|
Sold
four
properties consisting of
1,424
apartment units for $
199.5 million
; and
|
•
|
Entered into $
100.0 million
of forward starting swaps to hedge changes in interest rates related to future secured or unsecured debt issuances.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
▪
|
We intend to actively acquire, develop and rehab multifamily properties for rental operations as market conditions dictate. We may also acquire multifamily properties that are unoccupied or in the early stages of lease up. We may be unable to lease up these apartment properties on schedule, resulting in decreases in expected rental revenues and/or lower yields due to lower occupancy and rates as well as higher than expected concessions. We may not be able to achieve rents that are consistent with expectations for acquired, developed or rehabbed properties. We may underestimate the costs necessary to bring an acquired property up to standards established for its intended market position, to complete a development property or to complete a rehab. Additionally, we expect that other real estate investors with capital will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development and acquisition efforts. This competition (or lack thereof) may increase (or depress) prices for multifamily properties. We may not be in a position or have the opportunity in the future to make suitable property acquisitions on favorable terms. We have acquired in the past and intend to continue to pursue the acquisition of properties and portfolios of properties, including large portfolios, that could increase our size and result in alterations to our capital structure. The total number of apartment units under development, costs of development and estimated completion dates are subject to uncertainties arising from changing economic conditions (such as the cost of labor and construction materials), competition and local government regulation;
|
▪
|
Debt financing and other capital required by the Company may not be available or may only be available on adverse terms;
|
▪
|
Labor and materials required for maintenance, repair, capital expenditure or development may be more expensive than anticipated;
|
▪
|
Occupancy levels and market rents may be adversely affected by national and local economic and market conditions including, without limitation, new construction and excess inventory of multifamily and single family housing, increasing portions of single family housing stock being converted to rental use, rental housing subsidized by the government, other government programs that favor single family rental housing or owner occupied housing over multifamily rental housing, governmental regulations, slow or negative employment growth and household formation, the availability of low-interest mortgages or the availability of mortgages requiring little or no down payment for single family home buyers, changes in social preferences and the potential for geopolitical instability, all of which are beyond the Company's control; and
|
▪
|
Additional factors as discussed in Part I of the Company’s and the Operating Partnership's Annual Report on Form 10-K, particularly those under “Item 1A.
Risk Factors
”.
|
▪
|
High barriers to entry where, because of land scarcity or government regulation, it is difficult or costly to build new apartment properties, creating limits on new supply;
|
▪
|
High home ownership costs;
|
▪
|
Strong economic growth leading to job growth and household formation, which in turn leads to high demand for our apartments;
|
▪
|
Urban core locations with an attractive quality of life and higher wage job categories leading to high resident demand and retention; and
|
▪
|
Favorable demographics contributing to a larger pool of target residents with a high propensity to rent apartments.
|
▪
|
Acquired two consolidated apartment properties consisting of 738 apartment units for $269.0 million at a weighted cap rate (see definition below) of 4.8% and two land parcels for $28.8 million;
|
▪
|
Acquired two consolidated apartment properties, one that had just completed lease up and the other which was still in lease up, consisting of 342 apartment units for $106.6 million and are expected to stabilize at a 6.4% yield on cost and a 4.9% yield on cost, respectively; and
|
▪
|
Sold four consolidated apartment properties consisting of 1,317 apartments units for $197.1 million at a weighted average cap rate of 6.4% generating an unlevered internal rate of return ("IRR"), inclusive of management costs, of 11.3% and two land parcels for $30.5 million.
|
|
|
Nine Months Ended
|
|
Quarter Ended
|
||||||
|
|
September 30, 2014
|
|
September 30, 2014
|
||||||
|
|
Properties
|
Apartment
Units |
|
Properties
|
Apartment
Units |
||||
Same Store Properties at Beginning of Period
|
|
296
|
|
80,247
|
|
|
374
|
|
100,648
|
|
|
|
|
|
|
|
|
||||
2012 acquisitions
|
|
9
|
|
1,896
|
|
|
—
|
|
—
|
|
2013 acquisitions
|
|
77
|
|
22,103
|
|
|
1
|
|
322
|
|
2013 acquisitions not yet included in same store (1)
|
|
(1
|
)
|
(322
|
)
|
|
—
|
|
—
|
|
2013 acquisitions not yet stabilized (2)
|
|
(2
|
)
|
(613
|
)
|
|
—
|
|
—
|
|
2013 acquisitions not managed by the Company (3)
|
|
(3
|
)
|
(853
|
)
|
|
—
|
|
—
|
|
2013 acquisitions not consolidated
|
|
(1
|
)
|
(336
|
)
|
|
—
|
|
—
|
|
2013 acquisitions disposed of in 2013 (4)
|
|
(3
|
)
|
(1,536
|
)
|
|
—
|
|
—
|
|
2014 dispositions
|
|
(4
|
)
|
(1,317
|
)
|
|
(3
|
)
|
(981
|
)
|
Lease-up properties stabilized
|
|
3
|
|
374
|
|
|
1
|
|
188
|
|
Other
|
|
—
|
|
43
|
|
|
—
|
|
19
|
|
Same Store Properties at September 30, 2014
|
|
371
|
|
99,686
|
|
|
373
|
|
100,196
|
|
|
|
Nine Months Ended
|
|
Quarter Ended
|
||||||
|
|
September 30, 2014
|
|
September 30, 2014
|
||||||
|
|
Properties
|
Apartment
Units |
|
Properties
|
Apartment
Units |
||||
Same Store
|
|
371
|
|
99,686
|
|
|
373
|
|
100,196
|
|
|
|
|
|
|
|
|
||||
Non-Same Store:
|
|
|
|
|
|
|
||||
2014 acquisitions
|
|
2
|
|
738
|
|
|
2
|
|
738
|
|
2014 acquisitions not yet stabilized (2)
|
|
2
|
|
342
|
|
|
2
|
|
342
|
|
2013 acquisitions not yet included in same store (1)
|
|
1
|
|
322
|
|
|
—
|
|
—
|
|
2013 acquisitions not yet stabilized (2)
|
|
2
|
|
613
|
|
|
2
|
|
613
|
|
2013 acquisitions not managed by the Company (3)
|
|
3
|
|
853
|
|
|
3
|
|
853
|
|
2013 acquisitions not consolidated
|
|
1
|
|
336
|
|
|
1
|
|
336
|
|
Lease-up properties not yet stabilized (2)
|
|
11
|
|
3,191
|
|
|
10
|
|
3,003
|
|
Other
|
|
1
|
|
1
|
|
|
1
|
|
1
|
|
Total Non-Same Store
|
|
23
|
|
6,396
|
|
|
21
|
|
5,886
|
|
Military Housing (not consolidated)
|
|
2
|
|
5,005
|
|
|
2
|
|
5,005
|
|
Total Properties and Apartment Units
|
|
396
|
|
111,087
|
|
|
396
|
|
111,087
|
|
(1)
|
Includes one property containing 322 apartment units acquired in 2013 separately from the Archstone Acquisition.
|
(2)
|
Includes properties in various stages of lease-up and properties where lease-up has been completed but the properties were not stabilized for the comparable periods presented.
|
(3)
|
Includes three properties containing 853 apartments units acquired on February 27, 2013 in conjunction with the Archstone Acquisition that are owned by the Company but the entire projects are master leased to a third party corporate housing provider and the Company earns monthly net rental income.
|
(4)
|
Includes three properties containing 1,536 apartment units acquired on February 27, 2013 in conjunction with the Archstone Acquisition that were subsequently sold in 2013.
|
September YTD 2014 vs. September YTD 2013
|
||||||||||||||||||
Same Store Operating Expenses for 99,686 Same Store Apartment Units
|
||||||||||||||||||
$ in thousands
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Actual
YTD 2014 |
|
Actual
YTD 2013 |
|
$
Change |
|
%
Change |
|
% of Actual
YTD 2014 Operating Expenses |
||||||||
Real estate taxes
|
|
$
|
217,227
|
|
|
$
|
205,572
|
|
|
$
|
11,655
|
|
|
5.7
|
%
|
|
34.3
|
%
|
On-site payroll (1)
|
|
134,810
|
|
|
134,225
|
|
|
585
|
|
|
0.4
|
%
|
|
21.3
|
%
|
|||
Utilities (2)
|
|
96,469
|
|
|
91,946
|
|
|
4,523
|
|
|
4.9
|
%
|
|
15.2
|
%
|
|||
Repairs and maintenance (3)
|
|
77,368
|
|
|
77,320
|
|
|
48
|
|
|
0.1
|
%
|
|
12.2
|
%
|
|||
Property management costs (4)
|
|
55,942
|
|
|
59,140
|
|
|
(3,198
|
)
|
|
(5.4
|
%)
|
|
8.8
|
%
|
|||
Insurance
|
|
18,532
|
|
|
18,741
|
|
|
(209
|
)
|
|
(1.1
|
%)
|
|
2.9
|
%
|
|||
Leasing and advertising
|
|
7,862
|
|
|
9,142
|
|
|
(1,280
|
)
|
|
(14.0
|
%)
|
|
1.2
|
%
|
|||
Other on-site operating expenses (5)
|
|
25,866
|
|
|
27,212
|
|
|
(1,346
|
)
|
|
(4.9
|
%)
|
|
4.1
|
%
|
|||
Same store operating expenses
|
|
$
|
634,076
|
|
|
$
|
623,298
|
|
|
$
|
10,778
|
|
|
1.7
|
%
|
|
100.0
|
%
|
(1)
|
On-site payroll – Includes payroll and related expenses for on-site personnel including property managers, leasing consultants and maintenance staff.
|
(2)
|
Utilities – Represents gross expenses prior to any recoveries under the Resident Utility Billing System (“RUBS”). Recoveries are reflected in rental income.
|
(3)
|
Repairs and maintenance – Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs.
|
(4)
|
Property management costs – Includes payroll and related expenses for departments, or portions of departments, that directly support on-site management. These include such departments as regional and corporate property management, property accounting, human resources, training, marketing and revenue management, procurement, real estate tax, property legal services and information technology.
|
(5)
|
Other on-site operating expenses – Includes ground lease costs and administrative costs such as office supplies, telephone and data charges and association and business licensing fees.
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(Amounts in thousands)
|
||||||
Operating income
|
|
$
|
670,825
|
|
|
$
|
288,619
|
|
Adjustments:
|
|
|
|
|
||||
Archstone pre-ownership operating results
|
|
—
|
|
|
55,694
|
|
||
Non-same store operating results
|
|
(43,937
|
)
|
|
(16,079
|
)
|
||
Fee and asset management revenue
|
|
(7,596
|
)
|
|
(7,399
|
)
|
||
Fee and asset management expense
|
|
4,293
|
|
|
4,739
|
|
||
Depreciation
|
|
565,772
|
|
|
796,233
|
|
||
General and administrative
|
|
41,296
|
|
|
47,017
|
|
||
Same store NOI
|
|
$
|
1,230,653
|
|
|
$
|
1,168,824
|
|
▪
|
Development and newly stabilized development properties in lease-up of $12.5 million;
|
▪
|
Operating properties acquired in 2013 and
2014
of $8.5 million (excluding operating properties acquired in the Archstone Acquisition);
|
▪
|
Other miscellaneous properties (including three master-leased properties acquired in the Archstone Acquisition) of $2.1 million; and
|
▪
|
Operating activities from other miscellaneous operations.
|
Third Quarter 2014 vs. Third Quarter 2013
|
||||||||||||||||||
Same Store Operating Expenses for 100,196 Same Store Apartment Units
|
||||||||||||||||||
$ in thousands
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Actual
Q3 2014 |
|
Actual
Q3 2013 |
|
$
Change |
|
%
Change |
|
% of Actual
Q3 2014 Operating Expenses |
||||||||
Real estate taxes
|
|
$
|
72,075
|
|
|
$
|
68,851
|
|
|
$
|
3,224
|
|
|
4.7
|
%
|
|
34.1
|
%
|
On-site payroll (1)
|
|
46,022
|
|
|
44,860
|
|
|
1,162
|
|
|
2.6
|
%
|
|
21.8
|
%
|
|||
Utilities (2)
|
|
30,377
|
|
|
30,778
|
|
|
(401
|
)
|
|
(1.3
|
%)
|
|
14.4
|
%
|
|||
Repairs and maintenance (3)
|
|
27,075
|
|
|
27,393
|
|
|
(318
|
)
|
|
(1.2
|
%)
|
|
12.8
|
%
|
|||
Property management costs (4)
|
|
18,440
|
|
|
20,150
|
|
|
(1,710
|
)
|
|
(8.5
|
%)
|
|
8.7
|
%
|
|||
Insurance
|
|
6,199
|
|
|
6,271
|
|
|
(72
|
)
|
|
(1.1
|
%)
|
|
2.9
|
%
|
|||
Leasing and advertising
|
|
2,861
|
|
|
3,070
|
|
|
(209
|
)
|
|
(6.8
|
%)
|
|
1.4
|
%
|
|||
Other on-site operating expenses (5)
|
|
8,295
|
|
|
8,708
|
|
|
(413
|
)
|
|
(4.7
|
%)
|
|
3.9
|
%
|
|||
Same store operating expenses
|
|
$
|
211,344
|
|
|
$
|
210,081
|
|
|
$
|
1,263
|
|
|
0.6
|
%
|
|
100.0
|
%
|
(1)
|
On-site payroll – Includes payroll and related expenses for on-site personnel including property managers, leasing consultants and maintenance staff.
|
(2)
|
Utilities – Represents gross expenses prior to any recoveries under the Resident Utility Billing System (“RUBS”). Recoveries are reflected in rental income.
|
(3)
|
Repairs and maintenance – Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs.
|
(4)
|
Property management costs – Includes payroll and related expenses for departments, or portions of departments, that directly support on-site management. These include such departments as regional and corporate property management, property accounting, human resources, training, marketing and revenue management, procurement, real estate tax, property legal services and information technology.
|
(5)
|
Other on-site operating expenses – Includes ground lease costs and administrative costs such as office supplies, telephone and data charges and association and business licensing fees.
|
|
|
Quarter Ended September 30,
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(Amounts in thousands)
|
||||||
Operating income
|
|
$
|
243,269
|
|
|
$
|
120,396
|
|
Adjustments:
|
|
|
|
|
||||
Non-same store operating results
|
|
(18,373
|
)
|
|
(9,961
|
)
|
||
Fee and asset management revenue
|
|
(2,077
|
)
|
|
(2,566
|
)
|
||
Fee and asset management expense
|
|
1,253
|
|
|
1,516
|
|
||
Depreciation
|
|
190,469
|
|
|
276,707
|
|
||
General and administrative
|
|
9,968
|
|
|
14,437
|
|
||
Same store NOI
|
|
$
|
424,509
|
|
|
$
|
400,529
|
|
▪
|
Development and newly stabilized development properties in lease-up of $6.2 million;
|
▪
|
Operating properties acquired in 2013 and
2014
of $3.5 million (excluding operating properties acquired in the Archstone Acquisition);
|
▪
|
Partially offset by a decrease in other miscellaneous properties (including three master-leased properties acquired in the Archstone Acquisition) of $0.1 million and a decrease in operating activities from other miscellaneous operations.
|
▪
|
Disposed of four consolidated properties and two land parcels, receiving net proceeds of approximately $224.5 million;
|
▪
|
Issued
$450.0 million
of five-year
2.375%
fixed rate public notes, receiving net proceeds of
$449.6 million
before underwriting fees and other expenses, at an all-in effective interest rate of
2.52%
;
|
▪
|
Issued
$750.0 million
of thirty-year
4.50%
fixed rate public notes, receiving net proceeds of
$744.7 million
before underwriting fees, hedge termination costs and other expenses, at an all-in effective interest rate of
4.57%
;
|
▪
|
Received approximately $77.0 million representing the Company's pro rata share of the proceeds/distributions that have been repatriated to the Residual JV as a result of the disposition of the German portfolio fund, the German management company and the remaining wholly-owned German real estate assets that were acquired by the Residual JV as part of the Archstone Acquisition (see Note 6); and
|
▪
|
Issued approximately
1.5 million
Common Shares related to share option exercises and ESPP purchases and received net proceeds of $59.3 million, which were contributed to the capital of the Operating Partnership in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis).
|
▪
|
Acquire four rental properties, two land parcels and additional development rights at one of its existing land sites for approximately $404.7 million;
|
▪
|
Invest $380.7 million primarily in development projects;
|
▪
|
Repay
$72.7 million
of mortgage loans;
|
▪
|
Repay its
$750.0 million
unsecured term loan facility in conjunction with the note issuances discussed above;
|
▪
|
Repay
$500.0 million
of
5.250%
unsecured notes at maturity; and
|
▪
|
Repurchase 31,240 Common Shares, utilizing cash of $1.8 million (See Note 3).
|
Debt Summary as of September 30, 2014
|
|||||||||||||
(Amounts in thousands)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|||||
|
|
Amounts (1)
|
|
% of Total
|
|
Weighted
Average Rates (1) |
|
Weighted
Average Maturities (years) |
|||||
Secured
|
|
$
|
5,090,960
|
|
|
46.5
|
%
|
|
4.24
|
%
|
|
7.8
|
|
Unsecured
|
|
5,866,646
|
|
|
53.5
|
%
|
|
4.81
|
%
|
|
7.9
|
|
|
Total
|
|
$
|
10,957,606
|
|
|
100.0
|
%
|
|
4.55
|
%
|
|
7.8
|
|
Fixed Rate Debt:
|
|
|
|
|
|
|
|
|
|||||
Secured – Conventional
|
|
$
|
4,356,597
|
|
|
39.8
|
%
|
|
4.86
|
%
|
|
6.2
|
|
Unsecured – Public
|
|
4,973,559
|
|
|
45.3
|
%
|
|
5.47
|
%
|
|
8.6
|
|
|
Fixed Rate Debt
|
|
9,330,156
|
|
|
85.1
|
%
|
|
5.18
|
%
|
|
7.5
|
|
|
Floating Rate Debt:
|
|
|
|
|
|
|
|
|
|||||
Secured – Conventional
|
|
7,985
|
|
|
0.1
|
%
|
|
2.19
|
%
|
|
19.3
|
|
|
Secured – Tax Exempt
|
|
726,378
|
|
|
6.6
|
%
|
|
0.66
|
%
|
|
16.5
|
|
|
Unsecured – Public (2)
|
|
447,087
|
|
|
4.1
|
%
|
|
1.22
|
%
|
|
4.8
|
|
|
Unsecured – Revolving Credit Facility
|
|
446,000
|
|
|
4.1
|
%
|
|
0.99
|
%
|
|
3.5
|
|
|
Floating Rate Debt
|
|
1,627,450
|
|
|
14.9
|
%
|
|
0.97
|
%
|
|
9.7
|
|
|
Total
|
|
$
|
10,957,606
|
|
|
100.0
|
%
|
|
4.55
|
%
|
|
7.8
|
|
(1)
|
Net of the effect of any derivative instruments. Weighted average rates are for the nine months ended
September 30, 2014
.
|
(2)
|
Fair value interest rate swaps convert the $450.0 million 2.375% notes due July 1, 2019 to a floating interest rate of 90-Day LIBOR plus 0.61%.
|
Debt Maturity Schedule as of September 30, 2014
|
|||||||||||||||||||||
(Amounts in thousands)
|
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Year
|
|
Fixed
Rate (1) |
|
Floating
Rate (1) |
|
Total
|
|
% of Total
|
|
Weighted Average
Rates on Fixed Rate Debt (1) |
|
Weighted Average
Rates on Total Debt (1) |
|||||||||
2014
|
|
$
|
2,956
|
|
|
$
|
—
|
|
|
$
|
2,956
|
|
|
0.0
|
%
|
|
5.39
|
%
|
|
5.39
|
%
|
2015
|
|
408,712
|
|
|
—
|
|
|
408,712
|
|
|
3.7
|
%
|
|
6.32
|
%
|
|
6.32
|
%
|
|||
2016
|
|
1,193,107
|
|
|
—
|
|
|
1,193,107
|
|
|
10.9
|
%
|
|
5.34
|
%
|
|
5.34
|
%
|
|||
2017
|
|
1,346,581
|
|
|
456
|
|
|
1,347,037
|
|
|
12.3
|
%
|
|
6.16
|
%
|
|
6.16
|
%
|
|||
2018
|
|
84,197
|
|
|
543,659
|
|
(2)
|
627,856
|
|
|
5.7
|
%
|
|
5.61
|
%
|
|
1.59
|
%
|
|||
2019
|
|
806,471
|
|
|
468,281
|
|
|
1,274,752
|
|
|
11.7
|
%
|
|
5.48
|
%
|
|
3.76
|
%
|
|||
2020
|
|
1,678,413
|
|
|
809
|
|
|
1,679,222
|
|
|
15.3
|
%
|
|
5.49
|
%
|
|
5.49
|
%
|
|||
2021
|
|
1,195,041
|
|
|
856
|
|
|
1,195,897
|
|
|
10.9
|
%
|
|
4.63
|
%
|
|
4.64
|
%
|
|||
2022
|
|
228,716
|
|
|
905
|
|
|
229,621
|
|
|
2.1
|
%
|
|
3.17
|
%
|
|
3.18
|
%
|
|||
2023
|
|
1,302,847
|
|
|
956
|
|
|
1,303,803
|
|
|
11.9
|
%
|
|
3.75
|
%
|
|
3.75
|
%
|
|||
2024+
|
|
1,046,561
|
|
|
674,988
|
|
|
1,721,549
|
|
|
15.7
|
%
|
|
4.99
|
%
|
|
3.22
|
%
|
|||
Premium/(Discount)
|
|
36,554
|
|
|
(63,460
|
)
|
|
(26,906
|
)
|
|
(0.2
|
%)
|
|
N/A
|
|
|
N/A
|
|
|||
Total
|
|
$
|
9,330,156
|
|
|
$
|
1,627,450
|
|
|
$
|
10,957,606
|
|
|
100.0
|
%
|
|
5.14
|
%
|
|
4.46
|
%
|
(1)
|
Net of the effect of any derivative instruments. Weighted average rates are as of September 30, 2014.
|
(2)
|
Includes $446.0 million outstanding on the Company's unsecured revolving credit facility. As of September 30, 2014, there was approximately $2.01 billion available on this facility.
|
Unsecured Debt Summary as of September 30, 2014
|
||||||||||||||||||
(Amounts in thousands)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Coupon
Rate |
|
Due
Date |
|
|
|
Face
Amount |
|
Unamortized
Premium/ (Discount) |
|
Net
Balance |
||||||
Fixed Rate Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
6.584%
|
|
04/13/15
|
|
|
|
$
|
300,000
|
|
|
$
|
(55
|
)
|
|
$
|
299,945
|
|
|
|
5.125%
|
|
03/15/16
|
|
|
|
500,000
|
|
|
(76
|
)
|
|
499,924
|
|
|||
|
|
5.375%
|
|
08/01/16
|
|
|
|
400,000
|
|
|
(340
|
)
|
|
399,660
|
|
|||
|
|
5.750%
|
|
06/15/17
|
|
|
|
650,000
|
|
|
(1,399
|
)
|
|
648,601
|
|
|||
|
|
7.125%
|
|
10/15/17
|
|
|
|
150,000
|
|
|
(197
|
)
|
|
149,803
|
|
|||
|
|
2.375%
|
|
07/01/19
|
|
(1)
|
|
450,000
|
|
|
(428
|
)
|
|
449,572
|
|
|||
Fair Value Derivative Adjustments
|
|
|
|
|
|
(1)
|
|
(450,000
|
)
|
|
428
|
|
|
(449,572
|
)
|
|||
|
|
4.750%
|
|
07/15/20
|
|
|
|
600,000
|
|
|
(2,632
|
)
|
|
597,368
|
|
|||
|
|
4.625%
|
|
12/15/21
|
|
|
|
1,000,000
|
|
|
(2,731
|
)
|
|
997,269
|
|
|||
|
|
3.000%
|
|
04/15/23
|
|
|
|
500,000
|
|
|
(3,782
|
)
|
|
496,218
|
|
|||
|
|
7.570%
|
|
08/15/26
|
|
|
|
140,000
|
|
|
—
|
|
|
140,000
|
|
|||
|
|
4.500%
|
|
07/01/44
|
|
|
|
750,000
|
|
|
(5,229
|
)
|
|
744,771
|
|
|||
|
|
|
|
|
|
|
|
4,990,000
|
|
|
(16,441
|
)
|
|
4,973,559
|
|
|||
Floating Rate Notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
07/01/19
|
|
(1)
|
|
450,000
|
|
|
(428
|
)
|
|
449,572
|
|
|||
Fair Value Derivative Adjustments
|
|
|
|
07/01/19
|
|
(1)
|
|
(2,485
|
)
|
|
—
|
|
|
(2,485
|
)
|
|||
|
|
|
|
|
|
|
|
447,515
|
|
|
(428
|
)
|
|
447,087
|
|
|||
Revolving Credit Facility:
|
|
LIBOR+1.05%
|
|
04/01/18
|
|
(2)(3)
|
|
446,000
|
|
|
—
|
|
|
446,000
|
|
|||
Total Unsecured Debt
|
|
|
|
|
|
|
|
$
|
5,883,515
|
|
|
$
|
(16,869
|
)
|
|
$
|
5,866,646
|
|
(1)
|
Fair value interest rate swaps convert the $450.0 million 2.375% notes due July 1, 2019 to a floating interest rate of 90-Day LIBOR plus 0.61%.
|
(2)
|
Facility is private. All other unsecured debt is public.
|
(3)
|
Represents the Company's $2.5 billion unsecured revolving credit facility maturing April 1, 2018. The interest rate on advances under the credit facility will generally be LIBOR plus a spread (currently 1.05%) and an annual facility fee (currently 15 basis points). Both the spread and the facility fee are dependent on the credit rating of the Company's long-term debt. As of September 30, 2014, there was approximately $2.01 billion available on this facility.
|
Equity Residential
|
|||||||||||||||||
Capital Structure as of September 30, 2014
|
|||||||||||||||||
(Amounts in thousands except for share/unit and per share amounts)
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Secured Debt
|
|
|
|
|
|
$
|
5,090,960
|
|
|
46.5
|
%
|
|
|
||||
Unsecured Debt
|
|
|
|
|
|
5,866,646
|
|
|
53.5
|
%
|
|
|
|||||
Total Debt
|
|
|
|
|
|
10,957,606
|
|
|
100.0
|
%
|
|
32.0
|
%
|
||||
Common Shares (includes Restricted Shares)
|
|
362,208,087
|
|
|
96.2
|
%
|
|
|
|
|
|
|
|||||
Units (includes OP Units and LTIP Units)
|
|
14,325,066
|
|
|
3.8
|
%
|
|
|
|
|
|
|
|||||
Total Shares and Units
|
|
376,533,153
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|||||
Common Share Price at September 30, 2014
|
|
$
|
61.58
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
23,186,912
|
|
|
99.8
|
%
|
|
|
|||||
Perpetual Preferred Equity (see below)
|
|
|
|
|
|
50,000
|
|
|
0.2
|
%
|
|
|
|||||
Total Equity
|
|
|
|
|
|
23,236,912
|
|
|
100.0
|
%
|
|
68.0
|
%
|
||||
Total Market Capitalization
|
|
|
|
|
|
$
|
34,194,518
|
|
|
|
|
100.0
|
%
|
Equity Residential
|
|||||||||||||||||
Perpetual Preferred Equity as of September 30, 2014
|
|||||||||||||||||
(Amounts in thousands except for share and per share amounts)
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Series
|
|
Redemption
Date |
|
Outstanding
Shares |
|
Liquidation
Value |
|
Annual
Dividend Per Share |
|
Annual
Dividend Amount |
|||||||
Preferred Shares:
|
|
|
|
|
|
|
|
|
|
|
|||||||
8.29% Series K
|
|
12/10/26
|
|
1,000,000
|
|
|
$
|
50,000
|
|
|
$
|
4.145
|
|
|
$
|
4,145
|
|
Total Perpetual Preferred Equity
|
|
|
|
1,000,000
|
|
|
$
|
50,000
|
|
|
|
|
$
|
4,145
|
|
ERP Operating Limited Partnership
|
||||||||||||||
Capital Structure as of September 30, 2014
|
||||||||||||||
(Amounts in thousands except for unit and per unit amounts)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||
Secured Debt
|
|
|
|
$
|
5,090,960
|
|
|
46.5
|
%
|
|
|
|||
Unsecured Debt
|
|
|
|
5,866,646
|
|
|
53.5
|
%
|
|
|
||||
Total Debt
|
|
|
|
10,957,606
|
|
|
100.0
|
%
|
|
32.0
|
%
|
|||
Total outstanding Units
|
|
376,533,153
|
|
|
|
|
|
|
|
|||||
Common Share Price at September 30, 2014
|
|
$
|
61.58
|
|
|
|
|
|
|
|
||||
|
|
|
|
23,186,912
|
|
|
99.8
|
%
|
|
|
||||
Perpetual Preference Units (see below)
|
|
|
|
50,000
|
|
|
0.2
|
%
|
|
|
||||
Total Equity
|
|
|
|
23,236,912
|
|
|
100.0
|
%
|
|
68.0
|
%
|
|||
Total Market Capitalization
|
|
|
|
$
|
34,194,518
|
|
|
|
|
100.0
|
%
|
ERP Operating Limited Partnership
|
|||||||||||||||||
Perpetual Preference Units as of September 30, 2014
|
|||||||||||||||||
(Amounts in thousands except for unit and per unit amounts)
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Series
|
|
Redemption
Date |
|
Outstanding
Units |
|
Liquidation
Value |
|
Annual
Dividend Per Unit |
|
Annual
Dividend Amount |
|||||||
Preference Units:
|
|
|
|
|
|
|
|
|
|
|
|||||||
8.29% Series K
|
|
12/10/26
|
|
1,000,000
|
|
|
$
|
50,000
|
|
|
$
|
4.145
|
|
|
$
|
4,145
|
|
Total Perpetual Preference Units
|
|
|
|
1,000,000
|
|
|
$
|
50,000
|
|
|
|
|
$
|
4,145
|
|
▪
|
Replacements
(inside the apartment unit)
. These include:
|
▪
|
flooring such as carpets, hardwood, vinyl or tile;
|
▪
|
appliances;
|
▪
|
mechanical equipment such as individual furnace/air units, hot water heaters, etc;
|
▪
|
furniture and fixtures such as kitchen/bath cabinets, light fixtures, ceiling fans, sinks, tubs, toilets, mirrors, countertops, etc; and
|
▪
|
blinds.
|
▪
|
Building improvements (
outside the apartment unit
). These include:
|
▪
|
roof replacement and major repairs;
|
▪
|
paving or major resurfacing of parking lots, curbs and sidewalks;
|
▪
|
amenities and common areas such as pools, exterior sports and playground equipment, lobbies, clubhouses, laundry rooms, alarm and security systems and offices;
|
▪
|
major building mechanical equipment systems;
|
▪
|
interior and exterior structural repair and exterior painting and siding;
|
▪
|
major landscaping and grounds improvement; and
|
▪
|
vehicles and office and maintenance equipment.
|
Capital Expenditures to Real Estate
|
|||||||||||||||||||||||||||
For the Nine Months Ended September 30, 2014
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Total
Apartment Units (1) |
|
Replacements (2)
|
|
Avg. Per
Apartment Unit |
|
Building
Improvements |
|
Avg. Per
Apartment Unit |
|
Total
|
|
Avg. Per
Apartment Unit |
|||||||||||||
Same Store Properties (3)
|
|
99,686
|
|
|
$
|
63,691
|
|
|
$
|
639
|
|
|
$
|
65,546
|
|
|
$
|
658
|
|
|
$
|
129,237
|
|
|
$
|
1,297
|
|
Non-Same Store Properties (4)
|
|
4,727
|
|
|
182
|
|
|
50
|
|
|
3,165
|
|
|
875
|
|
|
3,347
|
|
|
925
|
|
||||||
Other (5)
|
|
—
|
|
|
408
|
|
|
|
|
189
|
|
|
|
|
597
|
|
|
|
|||||||||
Total
|
|
104,413
|
|
|
$
|
64,281
|
|
|
|
|
$
|
68,900
|
|
|
|
|
$
|
133,181
|
|
|
|
(1)
|
Total Apartment Units – Excludes 1,669 unconsolidated apartment units and 5,005 military housing apartment units for which repairs and maintenance expenses and capital expenditures to real estate are self-funded and do not consolidate into the Company's results.
|
(2)
|
Replacements –
I
ncludes new expenditures inside the apartment units such as appliances, mechanical equipment, fixtures and flooring, including carpeting. Replacements for same store properties also include $37.5 million spent during the nine months ended September 30, 2014 on apartment unit renovations/rehabs (primarily kitchens and baths) on 4,416 same store apartment units (equating to about $8,500 per apartment unit rehabbed) designed to reposition these assets for higher rental levels in their respective markets.
|
(3)
|
Same Store Properties – Primarily includes all properties acquired or completed and stabilized prior to January 1, 2013, less properties subsequently sold. Also includes 18,465 stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company.
|
(4)
|
Non-Same Store Properties – Primarily includes all properties acquired during 2013 and 2014, plus any properties in lease-up and not stabilized as of January 1, 2013, but excludes 18,465 stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company. Per apartment unit amounts are based on a weighted average of 3,618 apartment units.
|
(5)
|
Other – Primarily includes expenditures for properties sold.
|
•
|
Nexus Sawgrass – This development project was completed and stabilized during the quarter ended
September 30, 2014
. Total project costs were approximately
$78.6 million
and construction was predominantly funded with a long-term, non-recourse secured loan from the partner. The mortgage loan has a maximum debt commitment of
$48.7 million
and a current unconsolidated outstanding balance of
$48.6 million
; the loan bears interest at
5.60%
and matures
January 1, 2021
.
|
•
|
Domain – This development project is substantially complete. Total project costs are expected to be approximately
$155.8 million
and construction was predominantly funded with a long-term, non-recourse secured loan from the partner. The mortgage loan has a maximum debt commitment of
$98.6 million
and a current unconsolidated outstanding balance of
$96.8 million
; the loan bears interest at
5.75%
and matures
January 1, 2022
.
|
Funds From Operations and Normalized Funds From Operations
|
||||||||||||||||
(Amounts in thousands)
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Nine Months Ended September 30,
|
|
Quarter Ended September 30,
|
||||||||||||
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Net income
|
|
$
|
431,642
|
|
|
$
|
1,789,483
|
|
|
$
|
231,190
|
|
|
$
|
391,717
|
|
Net (income) loss attributable to Noncontrolling Interests
–
Partially
Owned Properties
|
|
(1,800
|
)
|
|
1,101
|
|
|
(708
|
)
|
|
311
|
|
||||
Preferred distributions
|
|
(3,109
|
)
|
|
(3,109
|
)
|
|
(1,037
|
)
|
|
(1,037
|
)
|
||||
Net income available to Common Shares and Units / Units
|
|
426,733
|
|
|
1,787,475
|
|
|
229,445
|
|
|
390,991
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
|
565,772
|
|
|
796,233
|
|
|
190,469
|
|
|
276,707
|
|
||||
Depreciation – Non-real estate additions
|
|
(3,485
|
)
|
|
(3,626
|
)
|
|
(1,137
|
)
|
|
(1,153
|
)
|
||||
Depreciation – Partially Owned Properties
|
|
(3,211
|
)
|
|
(5,405
|
)
|
|
(1,071
|
)
|
|
(1,855
|
)
|
||||
Depreciation – Unconsolidated Properties
|
|
5,182
|
|
|
2,331
|
|
|
1,746
|
|
|
1,289
|
|
||||
Net (gain) on sales of unconsolidated entities
|
|
—
|
|
|
(16
|
)
|
|
—
|
|
|
(16
|
)
|
||||
Net (gain) on sales of real estate properties
|
|
(128,544
|
)
|
|
—
|
|
|
(113,641
|
)
|
|
—
|
|
||||
Discontinued operations:
|
|
|
|
|
|
|
|
|
||||||||
Depreciation
|
|
—
|
|
|
33,864
|
|
|
—
|
|
|
2,902
|
|
||||
Net (gain) on sales of discontinued operations
|
|
(223
|
)
|
|
(1,990,577
|
)
|
|
1
|
|
|
(401,703
|
)
|
||||
Net incremental gain on sales of condominium units
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||
Gain on sale of Equity Corporate Housing (ECH)
|
|
—
|
|
|
709
|
|
|
—
|
|
|
108
|
|
||||
FFO available to Common Shares and Units / Units (1) (3) (4)
|
|
862,224
|
|
|
620,995
|
|
|
305,812
|
|
|
267,270
|
|
||||
Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Asset impairment and valuation allowances
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Property acquisition costs and write-off of pursuit costs
|
|
8,714
|
|
|
78,694
|
|
|
837
|
|
|
2,578
|
|
||||
Debt extinguishment (gains) losses, including prepayment penalties,
|
|
|
|
|
|
|
|
|
||||||||
preferred share/preference unit redemptions and non-cash convertible
|
|
|
|
|
|
|
|
|
||||||||
debt discounts
|
|
513
|
|
|
78,820
|
|
|
22
|
|
|
—
|
|
||||
(Gains) losses on sales of non-operating assets, net of income and other
tax expense (benefit)
|
|
(1,903
|
)
|
|
(13,725
|
)
|
|
(1,052
|
)
|
|
1,499
|
|
||||
Other miscellaneous non-comparable items
|
|
1,191
|
|
|
3,361
|
|
|
3,581
|
|
|
3,361
|
|
||||
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)
|
|
$
|
870,739
|
|
|
$
|
768,145
|
|
|
$
|
309,200
|
|
|
$
|
274,708
|
|
|
|
|
|
|
|
|
|
|
||||||||
FFO (1) (3)
|
|
$
|
865,333
|
|
|
$
|
624,104
|
|
|
$
|
306,849
|
|
|
$
|
268,307
|
|
Preferred/preference distributions
|
|
(3,109
|
)
|
|
(3,109
|
)
|
|
(1,037
|
)
|
|
(1,037
|
)
|
||||
FFO available to Common Shares and Units / Units (1) (3) (4)
|
|
$
|
862,224
|
|
|
$
|
620,995
|
|
|
$
|
305,812
|
|
|
$
|
267,270
|
|
|
|
|
|
|
|
|
|
|
||||||||
Normalized FFO (2) (3)
|
|
$
|
873,848
|
|
|
$
|
771,254
|
|
|
$
|
310,237
|
|
|
$
|
275,745
|
|
Preferred/preference distributions
|
|
(3,109
|
)
|
|
(3,109
|
)
|
|
(1,037
|
)
|
|
(1,037
|
)
|
||||
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)
|
|
$
|
870,739
|
|
|
$
|
768,145
|
|
|
$
|
309,200
|
|
|
$
|
274,708
|
|
(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 and impairment write-downs of depreciable operating properties, 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 apartment units to condominiums, it simultaneously discontinues depreciation of such property.
|
(2)
|
Normalized funds from operations (“Normalized FFO”) begins with FFO and excludes:
|
▪
|
the impact of any expenses relating to non-operating asset impairment and valuation allowances;
|
▪
|
property acquisition and other transaction costs related to mergers and acquisitions and pursuit cost write-offs;
|
▪
|
gains and losses from early debt extinguishment, including prepayment penalties, preferred share/preference unit redemptions and the cost related to the implied option value of non-cash convertible debt discounts;
|
▪
|
gains and losses on the sales of non-operating assets, including gains and losses from land parcel and condominium sales, net of the effect of income tax benefits or expenses; and
|
▪
|
other miscellaneous non-comparable items.
|
(3)
|
The Company believes that FFO and FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units / Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies. The Company also believes that Normalized FFO and Normalized FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the Company’s operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results. FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units do not represent net income, net income available to Common Shares / Units or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units should not be exclusively considered as alternatives to net income, net income available to Common Shares / Units or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company’s calculation of FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.
|
(4)
|
FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units are calculated on a basis consistent with net income available to Common Shares / Units and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares/preference units in accordance with accounting principles generally accepted in the United States. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the “Noncontrolling Interests – Operating Partnership”. Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
– See the Exhibit Index
|
|
|
|
|
|
|
|
EQUITY RESIDENTIAL
|
||||
|
|
|
|
||
Date:
|
November 6, 2014
|
|
By:
|
|
/s/ Mark J. Parrell
|
|
|
|
|
|
Mark J. Parrell
|
|
|
|
|
|
Executive Vice President and
Chief Financial Officer
|
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
||
|
|
|
|
||
Date:
|
November 6, 2014
|
|
By:
|
|
/s/ Ian S. Kaufman
|
|
|
|
|
|
Ian S. Kaufman
|
|
|
|
|
|
Senior Vice President and
Chief Accounting Officer
|
|
|
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
||
|
ERP OPERATING LIMITED PARTNERSHIP
BY: EQUITY RESIDENTIAL
ITS GENERAL PARTNER
|
||||
|
|
|
|
||
Date:
|
November 6, 2014
|
|
By:
|
|
/s/ Mark J. Parrell
|
|
|
|
|
|
Mark J. Parrell
|
|
|
|
|
|
Executive Vice President and
Chief Financial Officer
|
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
||
|
|
|
|
||
Date:
|
November 6, 2014
|
|
By:
|
|
/s/ Ian S. Kaufman
|
|
|
|
|
|
Ian S. Kaufman
|
|
|
|
|
|
Senior Vice President and
Chief Accounting Officer
|
|
|
|
|
|
(Principal Accounting Officer)
|
Exhibit
|
|
Description
|
|
Location
|
|
|
|
|
|
10.1*
|
|
Fourth Amendment to 2011 Share Incentive Plan.
|
|
Attached herein.
|
|
|
|
|
|
10.2*
|
|
The Equity Residential Supplemental Executive Retirement Plan as Amended and Restated effective July 1, 2014.
|
|
Attached herein.
|
|
|
|
|
|
12
|
|
Computation of Ratio of Earnings to Combined Fixed Charges.
|
|
Attached herein.
|
|
|
|
|
|
31.1
|
|
Equity Residential – Certification of David J. Neithercut, Chief Executive Officer.
|
|
Attached herein.
|
|
|
|
|
|
31.2
|
|
Equity Residential – Certification of Mark J. Parrell, Chief Financial Officer.
|
|
Attached herein.
|
|
|
|
|
|
31.3
|
|
ERP Operating Limited Partnership – Certification of David J. Neithercut, Chief Executive Officer of Registrant’s General Partner.
|
|
Attached herein.
|
|
|
|
|
|
31.4
|
|
ERP Operating Limited Partnership – Certification of Mark J. Parrell, Chief Financial Officer of Registrant’s General Partner.
|
|
Attached herein.
|
|
|
|
|
|
32.1
|
|
Equity Residential – Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of David J. Neithercut, Chief Executive Officer of the Company.
|
|
Attached herein.
|
|
|
|
|
|
32.2
|
|
Equity Residential – Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Mark J. Parrell, Chief Financial Officer of the Company.
|
|
Attached herein.
|
|
|
|
|
|
32.3
|
|
ERP Operating Limited Partnership – Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of David J. Neithercut, Chief Executive Officer of Registrant’s General Partner.
|
|
Attached herein.
|
|
|
|
|
|
32.4
|
|
ERP Operating Limited Partnership – Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Mark J. Parrell, Chief Financial Officer of Registrant’s General Partner.
|
|
Attached herein.
|
|
|
|
|
|
101
|
|
XBRL (Extensible Business Reporting Language). The following materials from Equity Residential’s and ERP Operating Limited Partnership’s Quarterly Report on Form 10-Q for the period ended September 30, 2014, formatted in XBRL: (i) consolidated balance sheets, (ii) consolidated statements of operations and comprehensive income, (iii) consolidated statements of cash flows, (iv) consolidated statement of changes in equity (Equity Residential), (v) consolidated statement of changes in capital (ERP Operating Limited Partnership) and (vi) notes to consolidated financial statements.
|
|
Attached herein.
|
ARTICLE 1
|
INTRODUCTION...................................................................................1
|
1.1
|
Purpose of Plan...............................................................................................1
|
1.2
|
Status of Plan..................................................................................................1
|
1.3
|
Good Faith Compliance.................................................................................1
|
ARTICLE 2
|
DEFINITIONS........................................................................................2
|
2.1
|
Account.........................................................................................................2
|
2.2
|
Code..............................................................................................................2
|
2.3
|
Compensation................................................................................................2
|
2.4
|
Elective Deferral............................................................................................3
|
2.5
|
Eligible Employee.........................................................................................3
|
2.6
|
Eligible Trustee..............................................................................................3
|
2.7
|
Employer.......................................................................................................3
|
2.8
|
Employer Contribution..................................................................................3
|
2.9
|
Enrollment Form............................................................................................3
|
2.10
|
Entry Date......................................................................................................4
|
2.11
|
EQR...............................................................................................................4
|
2.12
|
ERISA...........................................................................................................4
|
2.13
|
Extended Company........................................................................................4
|
2.14
|
Funding Trust.................................................................................................5
|
2.15
|
Funding Trustee.............................................................................................5
|
2.16
|
In-Service Sub-Account.................................................................................5
|
2.17
|
Participant......................................................................................................5
|
2.18
|
Plan................................................................................................................5
|
2.19
|
Plan Administrator.........................................................................................5
|
2.20
|
Plan Year........................................................................................................5
|
2.21
|
Restricted Share.............................................................................................6
|
2.22
|
Retirement Sub-Account...............................................................................6
|
2.23
|
Separation from Service................................................................................6
|
2.24
|
Share..............................................................................................................6
|
2.25
|
Share Deferral...............................................................................................6
|
2.26
|
Share Unit......................................................................................................6
|
2.27
|
Specified Employee......................................................................................6
|
2.28
|
Unforeseeable Emergency.............................................................................7
|
ARTICLE 3
|
PARTICIPATION....................................................................................7
|
3.1
|
Satisfaction of Eligibility Requirements.......................................................7
|
3.2
|
Commencement of Participation...................................................................8
|
3.3
|
Continued Participation.................................................................................8
|
ARTICLE 4
|
ELECTIVE AND SHARE DEFERRALS AND EMPLOYER CONTRIBUTIONS.................................................................................8
|
4.1
|
Elective Deferrals..........................................................................................8
|
4.2
|
Share Deferrals............................................................................................11
|
4.3
|
Enrollment Forms........................................................................................12
|
4.4
|
Employer Contribution................................................................................13
|
ARTICLE 5
|
ACCOUNTS.........................................................................................13
|
5.1
|
Accounts......................................................................................................13
|
5.2
|
Investments..................................................................................................14
|
ARTICLE 6
|
VESTING..............................................................................................16
|
6.1
|
General........................................................................................................16
|
ARTICLE 7
|
PAYMENTS..........................................................................................16
|
7.1
|
Election as to Time and Form of Payment..................................................16
|
7.2
|
Separation from Service..............................................................................19
|
7.3
|
Death...........................................................................................................19
|
7.4
|
Withdrawal Due to Unforeseeable Emergency...........................................19
|
7.5
|
Taxes............................................................................................................20
|
ARTICLE 8
|
PLAN ADMINISTRATOR...................................................................20
|
8.1
|
Plan Administration and Interpretation.......................................................20
|
8.2
|
Powers, Duties, Procedures, Etc..................................................................21
|
8.3
|
Information..................................................................................................21
|
8.4
|
Indemnification of Plan Administrator........................................................21
|
ARTICLE 9
|
CLAIMS PROCEDURES.....................................................................22
|
ARTICLE 10
|
AMENDMENT AND TERMINATION...............................................23
|
10.1
|
Amendment.................................................................................................23
|
10.2
|
Termination of Plan.....................................................................................24
|
10.3
|
Existing Rights............................................................................................24
|
10.4
|
409A............................................................................................................25
|
ARTICLE 11
|
MISCELLANEOUS.............................................................................25
|
11.1
|
No Funding..................................................................................................25
|
11.2
|
Non-assignability.........................................................................................25
|
11.3
|
Limitation of Participant's Rights................................................................26
|
11.4
|
Participants Bound......................................................................................26
|
11.5
|
Receipt and Release....................................................................................26
|
11.6
|
Governing Law............................................................................................27
|
11.7
|
Headings and Subheadings..........................................................................27
|
(i)
|
An Enrollment Form with respect to salary and commissions paid from and after the Entry Date shall be submitted on or before a deadline established by the Plan Administrator, but in no event later than the date that precedes such Entry Date.
|
(ii)
|
Notwithstanding clause (i) in the case of a Participant's Initial Entry Date, the Enrollment Form will be effective with respect to salary and commissions received for services performed after the Enrollment Form is submitted, if it is filed within 30 days after the Participant's Initial Entry Date.
|
(iii)
|
An Enrollment Form with respect to incentive pay which is performance based compensation, within the meaning of Treas. Reg. 1.409A-1(e), shall be submitted on or before July 1 of the Plan Year in which the incentive pay is earned. An enrollment form with respect to incentive pay which is not performance based compensation, within the meaning of Treas. Reg. 1.409A-1(e),
|
(iv)
|
An Enrollment Form with respect to an amount equal to the elective deferrals refunded to such Eligible Employee from the Equity Residential Advantage Retirement Savings Plan shall be submitted before January 1 of the Plan Year in which the elective deferrals from the Equity Residential Advantage Retirement Savings Plan are refunded. Deferrals pursuant to this Plan shall be taken as soon as administratively possible from salary paid in the Plan Year in which the deferrals under the Equity Residential Retirement Savings Plan are refunded. The Employer may, in its discretion, spread the deferrals over more than one pay cycle.
|
(i)
|
lockout periods established by EQR in connection with the quarterly release of earnings results; or
|
(ii)
|
blackout periods (periods during which Participants may not provide investment direction, other than lockout periods established by EQR in connection with the quarterly release of earnings results) with respect to the Equity Residential Advantage Retirement Savings Plan.
|
(i)
|
A single lump-sum payment;
|
(ii)
|
Annual installments over a period elected by the Participant of up to ten (10) years, the amount of each installment to equal the then balance of the Account divided by the number of installments remaining to be paid; or
|
(iii)
|
a combination of (i) and (ii).
|
EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Computation of Ratio of Earnings to Combined Fixed Charges
($ in thousands)
|
||||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||
|
Nine Months Ended September 30,
|
|
Year Ended December 31,
|
|||||||||||||||||||||||||
|
2014
|
|
2013
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|||||||||||||||
Income (loss) from continuing operations
|
$
|
301,598
|
|
|
$
|
(237,315
|
)
|
|
$
|
(168,174
|
)
|
|
$
|
160,298
|
|
|
$
|
(72,941
|
)
|
|
$
|
(204,152
|
)
|
|
$
|
(185,089
|
)
|
|
Interest expense incurred, net
|
347,224
|
|
|
437,452
|
|
|
586,854
|
|
|
455,236
|
|
|
460,172
|
|
|
455,692
|
|
|
481,849
|
|
||||||||
Amortization of deferred financing costs
|
8,554
|
|
|
15,636
|
|
|
22,197
|
|
|
21,295
|
|
|
16,616
|
|
|
9,412
|
|
|
11,870
|
|
||||||||
Earnings before combined fixed charges and preferred distributions
|
657,376
|
|
|
215,773
|
|
|
440,877
|
|
|
636,829
|
|
|
403,847
|
|
|
260,952
|
|
|
308,630
|
|
||||||||
Preferred Share/Preference Unit distributions
|
(3,109
|
)
|
|
(3,109
|
)
|
|
(4,145
|
)
|
|
(10,355
|
)
|
|
(13,865
|
)
|
|
(14,368
|
)
|
|
(14,479
|
)
|
||||||||
Premium on redemption of Preferred Shares/Preference Units
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,152
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Preference Interest and Junior Preference Unit distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
||||||||
Earnings before combined fixed charges
|
$
|
654,267
|
|
|
$
|
212,664
|
|
|
$
|
436,732
|
|
|
$
|
621,322
|
|
|
$
|
389,982
|
|
|
$
|
246,584
|
|
|
$
|
294,142
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest expense incurred, net
|
$
|
347,224
|
|
|
$
|
437,452
|
|
|
$
|
586,854
|
|
|
$
|
455,236
|
|
|
$
|
460,172
|
|
|
$
|
455,692
|
|
|
$
|
481,849
|
|
|
Amortization of deferred financing costs
|
8,554
|
|
|
15,636
|
|
|
22,197
|
|
|
21,295
|
|
|
16,616
|
|
|
9,412
|
|
|
11,870
|
|
||||||||
Interest capitalized for real estate and unconsolidated entities under development
|
38,140
|
|
|
32,946
|
|
|
47,321
|
|
|
22,509
|
|
|
9,108
|
|
|
13,008
|
|
|
34,859
|
|
||||||||
Amortization of deferred financing costs for real estate under development
|
—
|
|
|
152
|
|
|
152
|
|
|
—
|
|
|
—
|
|
|
2,768
|
|
|
3,585
|
|
||||||||
Total combined fixed charges
|
393,918
|
|
|
486,186
|
|
|
656,524
|
|
|
499,040
|
|
|
485,896
|
|
|
480,880
|
|
|
532,163
|
|
||||||||
Preferred Share/Preference Unit distributions
|
3,109
|
|
|
3,109
|
|
|
4,145
|
|
|
10,355
|
|
|
13,865
|
|
|
14,368
|
|
|
14,479
|
|
||||||||
Premium on redemption of Preferred Shares/Preference Units
|
—
|
|
|
—
|
|
|
—
|
|
|
5,152
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Preference Interest and Junior Preference Unit distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||||
Total combined fixed charges and preferred distributions
|
$
|
397,027
|
|
|
$
|
489,295
|
|
|
$
|
660,669
|
|
|
$
|
514,547
|
|
|
$
|
499,761
|
|
|
$
|
495,248
|
|
|
$
|
546,651
|
|
|
Ratio of earnings before combined fixed charges to total combined
fixed charges (1)
|
1.66
|
|
|
—
|
|
|
—
|
|
|
1.25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Ratio of earnings before combined fixed charges and preferred
distributions to total combined fixed charges and preferred
distributions (1)
|
1.66
|
|
|
—
|
|
|
—
|
|
|
1.24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Equity Residential;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ David J. Neithercut
|
|
David J. Neithercut
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Equity Residential;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Mark J. Parrell
|
|
Mark J. Parrell
|
|
Chief Financial Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of ERP Operating Limited Partnership;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ David J. Neithercut
|
|
David J. Neithercut
Chief Executive Officer of
Registrant's General Partner
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of ERP Operating Limited Partnership;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Mark J. Parrell
|
|
Mark J. Parrell
Chief Financial Officer of
Registrant's General Partner
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ David J. Neithercut
|
David J. Neithercut
|
Chief Executive Officer
|
November 6, 2014
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Mark J. Parrell
|
Mark J. Parrell
|
Chief Financial Officer
|
November 6, 2014
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.
|