Maryland (Equity Residential)
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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
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(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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June 30,
2016 |
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December 31,
2015 |
||||
ASSETS
|
|
|
|
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||||
Investment in real estate
|
|
|
|
|
||||
Land
|
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$
|
5,835,195
|
|
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$
|
5,864,046
|
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Depreciable property
|
|
18,474,391
|
|
|
18,037,087
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Projects under development
|
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799,947
|
|
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1,122,376
|
|
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Land held for development
|
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138,221
|
|
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158,843
|
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Investment in real estate
|
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25,247,754
|
|
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25,182,352
|
|
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Accumulated depreciation
|
|
(5,119,342
|
)
|
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(4,905,406
|
)
|
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Investment in real estate, net
|
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20,128,412
|
|
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20,276,946
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Real estate held for sale
|
|
—
|
|
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2,181,135
|
|
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Cash and cash equivalents
|
|
497,843
|
|
|
42,276
|
|
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Investments in unconsolidated entities
|
|
65,952
|
|
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68,101
|
|
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Deposits – restricted
|
|
77,587
|
|
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55,893
|
|
||
Escrow deposits – mortgage
|
|
61,711
|
|
|
56,946
|
|
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Other assets
|
|
398,417
|
|
|
428,899
|
|
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Total assets
|
|
$
|
21,229,922
|
|
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$
|
23,110,196
|
|
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||||
LIABILITIES AND EQUITY
|
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||||
Liabilities:
|
|
|
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|
||||
Mortgage notes payable, net
|
|
$
|
4,147,999
|
|
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$
|
4,685,134
|
|
Notes, net
|
|
4,362,995
|
|
|
5,848,956
|
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Line of credit and commercial paper
|
|
—
|
|
|
387,276
|
|
||
Accounts payable and accrued expenses
|
|
186,629
|
|
|
187,124
|
|
||
Accrued interest payable
|
|
58,175
|
|
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85,221
|
|
||
Other liabilities
|
|
333,551
|
|
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366,387
|
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Security deposits
|
|
64,242
|
|
|
77,582
|
|
||
Distributions payable
|
|
191,403
|
|
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209,378
|
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Total liabilities
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9,344,994
|
|
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11,847,058
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Commitments and contingencies
|
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||||
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Redeemable Noncontrolling Interests – Operating Partnership
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478,324
|
|
|
566,783
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Equity:
|
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Shareholders’ equity:
|
|
|
|
|
||||
Preferred Shares of beneficial interest, $0.01 par value;
100,000,000 shares authorized; 745,600 shares issued and outstanding as of June 30, 2016 and December 31, 2015 |
|
37,280
|
|
|
37,280
|
|
||
Common Shares of beneficial interest, $0.01 par value;
1,000,000,000 shares authorized; 365,550,636 shares issued and outstanding as of June 30, 2016 and 364,755,444 shares issued and outstanding as of December 31, 2015 |
|
3,656
|
|
|
3,648
|
|
||
Paid in capital
|
|
8,718,365
|
|
|
8,572,365
|
|
||
Retained earnings
|
|
2,524,788
|
|
|
2,009,091
|
|
||
Accumulated other comprehensive (loss)
|
|
(123,511
|
)
|
|
(152,016
|
)
|
||
Total shareholders’ equity
|
|
11,160,578
|
|
|
10,470,368
|
|
||
Noncontrolling Interests:
|
|
|
|
|
||||
Operating Partnership
|
|
241,748
|
|
|
221,379
|
|
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Partially Owned Properties
|
|
4,278
|
|
|
4,608
|
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||
Total Noncontrolling Interests
|
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246,026
|
|
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225,987
|
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Total equity
|
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11,406,604
|
|
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10,696,355
|
|
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Total liabilities and equity
|
|
$
|
21,229,922
|
|
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$
|
23,110,196
|
|
|
|
Six Months Ended June 30,
|
|
Quarter Ended June 30,
|
||||||||||||
|
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2016
|
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2015
|
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2016
|
|
2015
|
||||||||
REVENUES
|
|
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||||||||
Rental income
|
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$
|
1,211,104
|
|
|
$
|
1,341,114
|
|
|
$
|
594,939
|
|
|
$
|
676,508
|
|
Fee and asset management
|
|
3,133
|
|
|
4,369
|
|
|
215
|
|
|
2,604
|
|
||||
Total revenues
|
|
1,214,237
|
|
|
1,345,483
|
|
|
595,154
|
|
|
679,112
|
|
||||
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||||||||
EXPENSES
|
|
|
|
|
|
|
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|
||||||||
Property and maintenance
|
|
205,472
|
|
|
242,565
|
|
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96,307
|
|
|
118,005
|
|
||||
Real estate taxes and insurance
|
|
157,611
|
|
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169,551
|
|
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77,415
|
|
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83,119
|
|
||||
Property management
|
|
44,486
|
|
|
44,557
|
|
|
20,991
|
|
|
21,792
|
|
||||
General and administrative
|
|
35,013
|
|
|
35,421
|
|
|
18,296
|
|
|
15,659
|
|
||||
Depreciation
|
|
349,012
|
|
|
388,803
|
|
|
176,127
|
|
|
194,282
|
|
||||
Total expenses
|
|
791,594
|
|
|
880,897
|
|
|
389,136
|
|
|
432,857
|
|
||||
|
|
|
|
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|
|
|
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||||||||
Operating income
|
|
422,643
|
|
|
464,586
|
|
|
206,018
|
|
|
246,255
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest and other income
|
|
59,583
|
|
|
6,650
|
|
|
56,525
|
|
|
6,481
|
|
||||
Other expenses
|
|
(4,060
|
)
|
|
(1,700
|
)
|
|
(1,504
|
)
|
|
(1,770
|
)
|
||||
Interest:
|
|
|
|
|
|
|
|
|
||||||||
Expense incurred, net
|
|
(299,964
|
)
|
|
(219,648
|
)
|
|
(86,472
|
)
|
|
(110,866
|
)
|
||||
Amortization of deferred financing costs
|
|
(7,739
|
)
|
|
(5,127
|
)
|
|
(2,345
|
)
|
|
(2,538
|
)
|
||||
Income before income and other taxes, (loss) income from investments in
unconsolidated entities, net gain (loss) on sales of real estate properties and land parcels and discontinued operations |
|
170,463
|
|
|
244,761
|
|
|
172,222
|
|
|
137,562
|
|
||||
Income and other tax (expense) benefit
|
|
(763
|
)
|
|
(369
|
)
|
|
(413
|
)
|
|
(326
|
)
|
||||
(Loss) income from investments in unconsolidated entities
|
|
(1,904
|
)
|
|
15,429
|
|
|
(800
|
)
|
|
12,466
|
|
||||
Net gain on sales of real estate properties
|
|
3,780,835
|
|
|
228,753
|
|
|
57,356
|
|
|
148,802
|
|
||||
Net gain (loss) on sales of land parcels
|
|
11,722
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Income from continuing operations
|
|
3,960,353
|
|
|
488,573
|
|
|
228,365
|
|
|
298,504
|
|
||||
Discontinued operations, net
|
|
(122
|
)
|
|
269
|
|
|
35
|
|
|
114
|
|
||||
Net income
|
|
3,960,231
|
|
|
488,842
|
|
|
228,400
|
|
|
298,618
|
|
||||
Net (income) attributable to Noncontrolling Interests:
|
|
|
|
|
|
|
|
|
||||||||
Operating Partnership
|
|
(152,089
|
)
|
|
(18,413
|
)
|
|
(8,780
|
)
|
|
(11,354
|
)
|
||||
Partially Owned Properties
|
|
(1,545
|
)
|
|
(1,487
|
)
|
|
(781
|
)
|
|
(844
|
)
|
||||
Net income attributable to controlling interests
|
|
3,806,597
|
|
|
468,942
|
|
|
218,839
|
|
|
286,420
|
|
||||
Preferred distributions
|
|
(1,545
|
)
|
|
(1,724
|
)
|
|
(772
|
)
|
|
(833
|
)
|
||||
Premium on redemption of Preferred Shares
|
|
—
|
|
|
(2,789
|
)
|
|
—
|
|
|
—
|
|
||||
Net income available to Common Shares
|
|
$
|
3,805,052
|
|
|
$
|
464,429
|
|
|
$
|
218,067
|
|
|
$
|
285,587
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share – basic:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations available to Common Shares
|
|
$
|
10.43
|
|
|
$
|
1.28
|
|
|
$
|
0.60
|
|
|
$
|
0.79
|
|
Net income available to Common Shares
|
|
$
|
10.43
|
|
|
$
|
1.28
|
|
|
$
|
0.60
|
|
|
$
|
0.79
|
|
Weighted average Common Shares outstanding
|
|
364,820
|
|
|
363,288
|
|
|
365,047
|
|
|
363,476
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share – diluted:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations available to Common Shares
|
|
$
|
10.36
|
|
|
$
|
1.27
|
|
|
$
|
0.59
|
|
|
$
|
0.78
|
|
Net income available to Common Shares
|
|
$
|
10.36
|
|
|
$
|
1.27
|
|
|
$
|
0.59
|
|
|
$
|
0.78
|
|
Weighted average Common Shares outstanding
|
|
382,012
|
|
|
380,346
|
|
|
382,065
|
|
|
380,491
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Distributions declared per Common Share outstanding
|
|
$
|
9.0075
|
|
|
$
|
1.105
|
|
|
$
|
0.50375
|
|
|
$
|
0.5525
|
|
|
|
Six Months Ended June 30,
|
|
Quarter Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
3,960,231
|
|
|
$
|
488,842
|
|
|
$
|
228,400
|
|
|
$
|
298,618
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income – derivative instruments:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized holding (losses) gains arising during the period
|
|
(4,467
|
)
|
|
(112
|
)
|
|
(1,561
|
)
|
|
11,676
|
|
||||
Losses reclassified into earnings from other comprehensive income
|
|
32,922
|
|
|
8,911
|
|
|
4,268
|
|
|
4,573
|
|
||||
Other comprehensive income (loss) – foreign currency:
|
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustments arising during the period
|
|
50
|
|
|
(502
|
)
|
|
(25
|
)
|
|
(82
|
)
|
||||
Other comprehensive income
|
|
28,505
|
|
|
8,297
|
|
|
2,682
|
|
|
16,167
|
|
||||
Comprehensive income
|
|
3,988,736
|
|
|
497,139
|
|
|
231,082
|
|
|
314,785
|
|
||||
Comprehensive (income) attributable to Noncontrolling Interests
|
|
(154,734
|
)
|
|
(20,219
|
)
|
|
(9,664
|
)
|
|
(12,817
|
)
|
||||
Comprehensive income attributable to controlling interests
|
|
$
|
3,834,002
|
|
|
$
|
476,920
|
|
|
$
|
221,418
|
|
|
$
|
301,968
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net income
|
|
$
|
3,960,231
|
|
|
$
|
488,842
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation
|
|
349,012
|
|
|
388,803
|
|
||
Amortization of deferred financing costs
|
|
7,739
|
|
|
5,127
|
|
||
Amortization of above/below market leases
|
|
1,708
|
|
|
1,691
|
|
||
Amortization of discounts and premiums on debt
|
|
(19,010
|
)
|
|
(5,611
|
)
|
||
Amortization of deferred settlements on derivative instruments
|
|
32,850
|
|
|
8,751
|
|
||
Write-off of pursuit costs
|
|
2,563
|
|
|
1,651
|
|
||
Loss (income) from investments in unconsolidated entities
|
|
1,904
|
|
|
(15,429
|
)
|
||
Distributions from unconsolidated entities – return on capital
|
|
1,482
|
|
|
2,193
|
|
||
Net (gain) on sales of investment securities and other investments
|
|
(55,156
|
)
|
|
(387
|
)
|
||
Net (gain) on sales of real estate properties
|
|
(3,780,835
|
)
|
|
(228,753
|
)
|
||
Net (gain) loss on sales of land parcels
|
|
(11,722
|
)
|
|
1
|
|
||
Net (gain) on sales of discontinued operations
|
|
(15
|
)
|
|
—
|
|
||
Realized/unrealized loss on derivative instruments
|
|
—
|
|
|
51
|
|
||
Compensation paid with Company Common Shares
|
|
20,729
|
|
|
24,017
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Decrease (increase) in deposits – restricted
|
|
9,121
|
|
|
(288
|
)
|
||
(Increase) in mortgage deposits
|
|
(840
|
)
|
|
(382
|
)
|
||
Decrease (increase) in other assets
|
|
29,944
|
|
|
(4,553
|
)
|
||
Increase in accounts payable and accrued expenses
|
|
7,837
|
|
|
22,350
|
|
||
(Decrease) in accrued interest payable
|
|
(27,046
|
)
|
|
(2,409
|
)
|
||
(Decrease) in other liabilities
|
|
(42,080
|
)
|
|
(11,097
|
)
|
||
(Decrease) increase in security deposits
|
|
(13,340
|
)
|
|
479
|
|
||
Net cash provided by operating activities
|
|
475,076
|
|
|
675,047
|
|
||
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
Investment in real estate – acquisitions
|
|
(160,680
|
)
|
|
(136,995
|
)
|
||
Investment in real estate – development/other
|
|
(312,853
|
)
|
|
(324,343
|
)
|
||
Capital expenditures to real estate
|
|
(74,450
|
)
|
|
(81,962
|
)
|
||
Non-real estate capital additions
|
|
(3,259
|
)
|
|
(1,955
|
)
|
||
Interest capitalized for real estate under development
|
|
(28,386
|
)
|
|
(30,432
|
)
|
||
Proceeds from disposition of real estate, net
|
|
6,415,181
|
|
|
379,863
|
|
||
Investments in unconsolidated entities
|
|
(1,829
|
)
|
|
(4,786
|
)
|
||
Distributions from unconsolidated entities – return of capital
|
|
524
|
|
|
26,147
|
|
||
Proceeds from sale of investment securities and other investments
|
|
68,528
|
|
|
387
|
|
||
(Increase) in deposits on real estate acquisitions and investments, net
|
|
(30,815
|
)
|
|
(31,247
|
)
|
||
Decrease (increase) in mortgage deposits
|
|
46
|
|
|
(226
|
)
|
||
Net cash provided by (used for) investing activities
|
|
5,872,007
|
|
|
(205,549
|
)
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
||||
Debt financing costs
|
|
$
|
(437
|
)
|
|
$
|
(6,352
|
)
|
Mortgage deposits
|
|
(3,971
|
)
|
|
(4,169
|
)
|
||
Mortgage notes payable, net:
|
|
|
|
|
||||
Lump sum payoffs
|
|
(556,499
|
)
|
|
(121,488
|
)
|
||
Scheduled principal repayments
|
|
(4,740
|
)
|
|
(5,028
|
)
|
||
Notes, net:
|
|
|
|
|
||||
Proceeds
|
|
—
|
|
|
746,391
|
|
||
Lump sum payoffs
|
|
(1,500,000
|
)
|
|
(300,000
|
)
|
||
Line of credit and commercial paper:
|
|
|
|
|
||||
Line of credit proceeds
|
|
246,000
|
|
|
3,553,000
|
|
||
Line of credit repayments
|
|
(246,000
|
)
|
|
(3,886,000
|
)
|
||
Commercial paper proceeds
|
|
1,324,784
|
|
|
2,266,924
|
|
||
Commercial paper repayments
|
|
(1,712,472
|
)
|
|
(2,267,500
|
)
|
||
(Payments on) settlement of derivative instruments
|
|
—
|
|
|
(13,938
|
)
|
||
Proceeds from Employee Share Purchase Plan (ESPP)
|
|
2,023
|
|
|
2,610
|
|
||
Proceeds from exercise of options
|
|
26,141
|
|
|
33,984
|
|
||
Redemption of Preferred Shares
|
|
—
|
|
|
(9,820
|
)
|
||
Premium on redemption of Preferred Shares
|
|
—
|
|
|
(2,789
|
)
|
||
Payment of offering costs
|
|
—
|
|
|
(40
|
)
|
||
Other financing activities, net
|
|
(33
|
)
|
|
(33
|
)
|
||
Contributions – Noncontrolling Interests – Operating Partnership
|
|
1
|
|
|
1
|
|
||
Distributions:
|
|
|
|
|
||||
Common Shares
|
|
(3,306,704
|
)
|
|
(382,441
|
)
|
||
Preferred Shares
|
|
(1,545
|
)
|
|
(1,724
|
)
|
||
Noncontrolling Interests – Operating Partnership
|
|
(130,383
|
)
|
|
(15,062
|
)
|
||
Noncontrolling Interests – Partially Owned Properties
|
|
(27,681
|
)
|
|
(3,995
|
)
|
||
Net cash (used for) financing activities
|
|
(5,891,516
|
)
|
|
(417,469
|
)
|
||
Net increase in cash and cash equivalents
|
|
455,567
|
|
|
52,029
|
|
||
Cash and cash equivalents, beginning of period
|
|
42,276
|
|
|
40,080
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
497,843
|
|
|
$
|
92,109
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
SUPPLEMENTAL INFORMATION:
|
|
|
|
|
||||
Cash paid for interest, net of amounts capitalized
|
|
$
|
313,480
|
|
|
$
|
218,965
|
|
Net cash paid for income and other taxes
|
|
$
|
1,166
|
|
|
$
|
895
|
|
Real estate acquisitions/dispositions/other:
|
|
|
|
|
||||
Mortgage loans assumed
|
|
$
|
43,400
|
|
|
$
|
—
|
|
Amortization of deferred financing costs:
|
|
|
|
|
||||
Other assets
|
|
$
|
1,527
|
|
|
$
|
1,527
|
|
Mortgage notes payable, net
|
|
$
|
2,617
|
|
|
$
|
1,607
|
|
Notes, net
|
|
$
|
3,595
|
|
|
$
|
1,993
|
|
Amortization of discounts and premiums on debt:
|
|
|
|
|
||||
Mortgage notes payable, net
|
|
$
|
(21,476
|
)
|
|
$
|
(7,420
|
)
|
Notes, net
|
|
$
|
2,054
|
|
|
$
|
1,233
|
|
Line of credit and commercial paper
|
|
$
|
412
|
|
|
$
|
576
|
|
Amortization of deferred settlements on derivative instruments:
|
|
|
|
|
||||
Other liabilities
|
|
$
|
(72
|
)
|
|
$
|
(160
|
)
|
Accumulated other comprehensive income
|
|
$
|
32,922
|
|
|
$
|
8,911
|
|
Write-off of pursuit costs:
|
|
|
|
|
||||
Investment in real estate, net
|
|
$
|
2,072
|
|
|
$
|
1,260
|
|
Deposits – restricted
|
|
$
|
—
|
|
|
$
|
330
|
|
Other assets
|
|
$
|
390
|
|
|
$
|
61
|
|
Accounts payable and accrued expenses
|
|
$
|
101
|
|
|
$
|
—
|
|
Loss (income) from investments in unconsolidated entities:
|
|
|
|
|
||||
Investments in unconsolidated entities
|
|
$
|
1,122
|
|
|
$
|
(16,767
|
)
|
Other liabilities
|
|
$
|
782
|
|
|
$
|
1,338
|
|
Distributions from unconsolidated entities – return on capital:
|
|
|
|
|
||||
Investments in unconsolidated entities
|
|
$
|
1,482
|
|
|
$
|
2,125
|
|
Other liabilities
|
|
$
|
—
|
|
|
$
|
68
|
|
Realized/unrealized loss on derivative instruments:
|
|
|
|
|
||||
Other assets
|
|
$
|
(8,390
|
)
|
|
$
|
(3,873
|
)
|
Notes, net
|
|
$
|
8,390
|
|
|
$
|
2,358
|
|
Other liabilities
|
|
$
|
4,467
|
|
|
$
|
1,678
|
|
Accumulated other comprehensive income
|
|
$
|
(4,467
|
)
|
|
$
|
(112
|
)
|
Investments in unconsolidated entities:
|
|
|
|
|
||||
Investments in unconsolidated entities
|
|
$
|
(929
|
)
|
|
$
|
(1,291
|
)
|
Other liabilities
|
|
$
|
(900
|
)
|
|
$
|
(3,495
|
)
|
Debt financing costs:
|
|
|
|
|
||||
Mortgage notes payable, net
|
|
$
|
(437
|
)
|
|
$
|
—
|
|
Notes, net
|
|
$
|
—
|
|
|
$
|
(6,352
|
)
|
Other:
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
$
|
(50
|
)
|
|
$
|
502
|
|
|
|
Six Months Ended
|
||
|
|
June 30, 2016
|
||
SHAREHOLDERS’ EQUITY
|
|
|
||
|
|
|
||
PREFERRED SHARES
|
|
|
||
Balance, beginning of year
|
|
$
|
37,280
|
|
Balance, end of period
|
|
$
|
37,280
|
|
|
|
|
||
COMMON SHARES, $0.01 PAR VALUE
|
|
|
||
Balance, beginning of year
|
|
$
|
3,648
|
|
Exercise of share options
|
|
6
|
|
|
Share-based employee compensation expense:
|
|
|
||
Restricted shares
|
|
2
|
|
|
Balance, end of period
|
|
$
|
3,656
|
|
|
|
|
||
PAID IN CAPITAL
|
|
|
||
Balance, beginning of year
|
|
$
|
8,572,365
|
|
Common Share Issuance:
|
|
|
||
Conversion of OP Units into Common Shares
|
|
271
|
|
|
Exercise of share options
|
|
26,135
|
|
|
Employee Share Purchase Plan (ESPP)
|
|
2,023
|
|
|
Share-based employee compensation expense:
|
|
|
||
Restricted shares
|
|
9,625
|
|
|
Share options
|
|
2,733
|
|
|
ESPP discount
|
|
357
|
|
|
Supplemental Executive Retirement Plan (SERP)
|
|
801
|
|
|
Change in market value of Redeemable Noncontrolling Interests – Operating Partnership
|
|
99,190
|
|
|
Adjustment for Noncontrolling Interests ownership in Operating Partnership
|
|
4,865
|
|
|
Balance, end of period
|
|
$
|
8,718,365
|
|
|
|
|
||
RETAINED EARNINGS
|
|
|
||
Balance, beginning of year
|
|
$
|
2,009,091
|
|
Net income attributable to controlling interests
|
|
3,806,597
|
|
|
Common Share distributions
|
|
(3,289,355
|
)
|
|
Preferred Share distributions
|
|
(1,545
|
)
|
|
Balance, end of period
|
|
$
|
2,524,788
|
|
|
|
|
||
ACCUMULATED OTHER COMPREHENSIVE (LOSS)
|
|
|
||
Balance, beginning of year
|
|
$
|
(152,016
|
)
|
Accumulated other comprehensive (loss) income – derivative instruments:
|
|
|
||
Unrealized holding (losses) arising during the period
|
|
(4,467
|
)
|
|
Losses reclassified into earnings from other comprehensive income
|
|
32,922
|
|
|
Accumulated other comprehensive income – foreign currency:
|
|
|
||
Currency translation adjustments arising during the period
|
|
50
|
|
|
Balance, end of period
|
|
$
|
(123,511
|
)
|
|
|
Six Months Ended
|
||
|
|
June 30, 2016
|
||
NONCONTROLLING INTERESTS
|
|
|
||
|
|
|
||
OPERATING PARTNERSHIP
|
|
|
||
Balance, beginning of year
|
|
$
|
221,379
|
|
Issuance of restricted units to Noncontrolling Interests
|
|
1
|
|
|
Conversion of OP Units held by Noncontrolling Interests into OP Units held by General Partner
|
|
(271
|
)
|
|
Equity compensation associated with Noncontrolling Interests
|
|
13,903
|
|
|
Net income attributable to Noncontrolling Interests
|
|
152,089
|
|
|
Distributions to Noncontrolling Interests
|
|
(129,757
|
)
|
|
Change in carrying value of Redeemable Noncontrolling Interests – Operating Partnership
|
|
(10,731
|
)
|
|
Adjustment for Noncontrolling Interests ownership in Operating Partnership
|
|
(4,865
|
)
|
|
Balance, end of period
|
|
$
|
241,748
|
|
|
|
|
||
PARTIALLY OWNED PROPERTIES
|
|
|
||
Balance, beginning of year
|
|
$
|
4,608
|
|
Net income attributable to Noncontrolling Interests
|
|
1,545
|
|
|
Distributions to Noncontrolling Interests
|
|
(27,714
|
)
|
|
Other
|
|
25,839
|
|
|
Balance, end of period
|
|
$
|
4,278
|
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
ASSETS
|
|
|
|
|
||||
Investment in real estate
|
|
|
|
|
||||
Land
|
|
$
|
5,835,195
|
|
|
$
|
5,864,046
|
|
Depreciable property
|
|
18,474,391
|
|
|
18,037,087
|
|
||
Projects under development
|
|
799,947
|
|
|
1,122,376
|
|
||
Land held for development
|
|
138,221
|
|
|
158,843
|
|
||
Investment in real estate
|
|
25,247,754
|
|
|
25,182,352
|
|
||
Accumulated depreciation
|
|
(5,119,342
|
)
|
|
(4,905,406
|
)
|
||
Investment in real estate, net
|
|
20,128,412
|
|
|
20,276,946
|
|
||
Real estate held for sale
|
|
—
|
|
|
2,181,135
|
|
||
Cash and cash equivalents
|
|
497,843
|
|
|
42,276
|
|
||
Investments in unconsolidated entities
|
|
65,952
|
|
|
68,101
|
|
||
Deposits – restricted
|
|
77,587
|
|
|
55,893
|
|
||
Escrow deposits – mortgage
|
|
61,711
|
|
|
56,946
|
|
||
Other assets
|
|
398,417
|
|
|
428,899
|
|
||
Total assets
|
|
$
|
21,229,922
|
|
|
$
|
23,110,196
|
|
|
|
|
|
|
||||
LIABILITIES AND CAPITAL
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
||||
Mortgage notes payable, net
|
|
$
|
4,147,999
|
|
|
$
|
4,685,134
|
|
Notes, net
|
|
4,362,995
|
|
|
5,848,956
|
|
||
Line of credit and commercial paper
|
|
—
|
|
|
387,276
|
|
||
Accounts payable and accrued expenses
|
|
186,629
|
|
|
187,124
|
|
||
Accrued interest payable
|
|
58,175
|
|
|
85,221
|
|
||
Other liabilities
|
|
333,551
|
|
|
366,387
|
|
||
Security deposits
|
|
64,242
|
|
|
77,582
|
|
||
Distributions payable
|
|
191,403
|
|
|
209,378
|
|
||
Total liabilities
|
|
9,344,994
|
|
|
11,847,058
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
||||
|
|
|
|
|
||||
Redeemable Limited Partners
|
|
478,324
|
|
|
566,783
|
|
||
Capital:
|
|
|
|
|
||||
Partners' Capital:
|
|
|
|
|
||||
Preference Units
|
|
37,280
|
|
|
37,280
|
|
||
General Partner
|
|
11,246,809
|
|
|
10,585,104
|
|
||
Limited Partners
|
|
241,748
|
|
|
221,379
|
|
||
Accumulated other comprehensive (loss)
|
|
(123,511
|
)
|
|
(152,016
|
)
|
||
Total partners' capital
|
|
11,402,326
|
|
|
10,691,747
|
|
||
Noncontrolling Interests – Partially Owned Properties
|
|
4,278
|
|
|
4,608
|
|
||
Total capital
|
|
11,406,604
|
|
|
10,696,355
|
|
||
Total liabilities and capital
|
|
$
|
21,229,922
|
|
|
$
|
23,110,196
|
|
|
|
Six Months Ended June 30,
|
|
Quarter Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
|
||||||||
Rental income
|
|
$
|
1,211,104
|
|
|
$
|
1,341,114
|
|
|
$
|
594,939
|
|
|
$
|
676,508
|
|
Fee and asset management
|
|
3,133
|
|
|
4,369
|
|
|
215
|
|
|
2,604
|
|
||||
Total revenues
|
|
1,214,237
|
|
|
1,345,483
|
|
|
595,154
|
|
|
679,112
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
EXPENSES
|
|
|
|
|
|
|
|
|
||||||||
Property and maintenance
|
|
205,472
|
|
|
242,565
|
|
|
96,307
|
|
|
118,005
|
|
||||
Real estate taxes and insurance
|
|
157,611
|
|
|
169,551
|
|
|
77,415
|
|
|
83,119
|
|
||||
Property management
|
|
44,486
|
|
|
44,557
|
|
|
20,991
|
|
|
21,792
|
|
||||
General and administrative
|
|
35,013
|
|
|
35,421
|
|
|
18,296
|
|
|
15,659
|
|
||||
Depreciation
|
|
349,012
|
|
|
388,803
|
|
|
176,127
|
|
|
194,282
|
|
||||
Total expenses
|
|
791,594
|
|
|
880,897
|
|
|
389,136
|
|
|
432,857
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income
|
|
422,643
|
|
|
464,586
|
|
|
206,018
|
|
|
246,255
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest and other income
|
|
59,583
|
|
|
6,650
|
|
|
56,525
|
|
|
6,481
|
|
||||
Other expenses
|
|
(4,060
|
)
|
|
(1,700
|
)
|
|
(1,504
|
)
|
|
(1,770
|
)
|
||||
Interest:
|
|
|
|
|
|
|
|
|
||||||||
Expense incurred, net
|
|
(299,964
|
)
|
|
(219,648
|
)
|
|
(86,472
|
)
|
|
(110,866
|
)
|
||||
Amortization of deferred financing costs
|
|
(7,739
|
)
|
|
(5,127
|
)
|
|
(2,345
|
)
|
|
(2,538
|
)
|
||||
Income before income and other taxes, (loss) income from investments in
unconsolidated entities, net gain (loss) on sales of real estate properties and land parcels and discontinued operations |
|
170,463
|
|
|
244,761
|
|
|
172,222
|
|
|
137,562
|
|
||||
Income and other tax (expense) benefit
|
|
(763
|
)
|
|
(369
|
)
|
|
(413
|
)
|
|
(326
|
)
|
||||
(Loss) income from investments in unconsolidated entities
|
|
(1,904
|
)
|
|
15,429
|
|
|
(800
|
)
|
|
12,466
|
|
||||
Net gain on sales of real estate properties
|
|
3,780,835
|
|
|
228,753
|
|
|
57,356
|
|
|
148,802
|
|
||||
Net gain (loss) on sales of land parcels
|
|
11,722
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Income from continuing operations
|
|
3,960,353
|
|
|
488,573
|
|
|
228,365
|
|
|
298,504
|
|
||||
Discontinued operations, net
|
|
(122
|
)
|
|
269
|
|
|
35
|
|
|
114
|
|
||||
Net income
|
|
3,960,231
|
|
|
488,842
|
|
|
228,400
|
|
|
298,618
|
|
||||
Net (income) attributable to Noncontrolling Interests – Partially Owned Properties
|
|
(1,545
|
)
|
|
(1,487
|
)
|
|
(781
|
)
|
|
(844
|
)
|
||||
Net income attributable to controlling interests
|
|
$
|
3,958,686
|
|
|
$
|
487,355
|
|
|
$
|
227,619
|
|
|
$
|
297,774
|
|
|
|
|
|
|
|
|
|
|
||||||||
ALLOCATION OF NET INCOME:
|
|
|
|
|
|
|
|
|
||||||||
Preference Units
|
|
$
|
1,545
|
|
|
$
|
1,724
|
|
|
$
|
772
|
|
|
$
|
833
|
|
Premium on redemption of Preference Units
|
|
$
|
—
|
|
|
$
|
2,789
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
General Partner
|
|
$
|
3,805,052
|
|
|
$
|
464,429
|
|
|
$
|
218,067
|
|
|
$
|
285,587
|
|
Limited Partners
|
|
152,089
|
|
|
18,413
|
|
|
8,780
|
|
|
11,354
|
|
||||
Net income available to Units
|
|
$
|
3,957,141
|
|
|
$
|
482,842
|
|
|
$
|
226,847
|
|
|
$
|
296,941
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per Unit – basic:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations available to Units
|
|
$
|
10.43
|
|
|
$
|
1.28
|
|
|
$
|
0.60
|
|
|
$
|
0.79
|
|
Net income available to Units
|
|
$
|
10.43
|
|
|
$
|
1.28
|
|
|
$
|
0.60
|
|
|
$
|
0.79
|
|
Weighted average Units outstanding
|
|
378,612
|
|
|
376,880
|
|
|
378,934
|
|
|
377,063
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings per Unit – diluted:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations available to Units
|
|
$
|
10.36
|
|
|
$
|
1.27
|
|
|
$
|
0.59
|
|
|
$
|
0.78
|
|
Net income available to Units
|
|
$
|
10.36
|
|
|
$
|
1.27
|
|
|
$
|
0.59
|
|
|
$
|
0.78
|
|
Weighted average Units outstanding
|
|
382,012
|
|
|
380,346
|
|
|
382,065
|
|
|
380,491
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Distributions declared per Unit outstanding
|
|
$
|
9.0075
|
|
|
$
|
1.105
|
|
|
$
|
0.50375
|
|
|
$
|
0.5525
|
|
|
|
Six Months Ended June 30,
|
|
Quarter Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
3,960,231
|
|
|
$
|
488,842
|
|
|
$
|
228,400
|
|
|
$
|
298,618
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive (loss) income – derivative instruments:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized holding (losses) gains arising during the period
|
|
(4,467
|
)
|
|
(112
|
)
|
|
(1,561
|
)
|
|
11,676
|
|
||||
Losses reclassified into earnings from other comprehensive income
|
|
32,922
|
|
|
8,911
|
|
|
4,268
|
|
|
4,573
|
|
||||
Other comprehensive income (loss) – foreign currency:
|
|
|
|
|
|
|
|
|
||||||||
Currency translation adjustments arising during the period
|
|
50
|
|
|
(502
|
)
|
|
(25
|
)
|
|
(82
|
)
|
||||
Other comprehensive income
|
|
28,505
|
|
|
8,297
|
|
|
2,682
|
|
|
16,167
|
|
||||
Comprehensive income
|
|
3,988,736
|
|
|
497,139
|
|
|
231,082
|
|
|
314,785
|
|
||||
Comprehensive (income) attributable to Noncontrolling Interests –
Partially Owned Properties |
|
(1,545
|
)
|
|
(1,487
|
)
|
|
(781
|
)
|
|
(844
|
)
|
||||
Comprehensive income attributable to controlling interests
|
|
$
|
3,987,191
|
|
|
$
|
495,652
|
|
|
$
|
230,301
|
|
|
$
|
313,941
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net income
|
|
$
|
3,960,231
|
|
|
$
|
488,842
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation
|
|
349,012
|
|
|
388,803
|
|
||
Amortization of deferred financing costs
|
|
7,739
|
|
|
5,127
|
|
||
Amortization of above/below market leases
|
|
1,708
|
|
|
1,691
|
|
||
Amortization of discounts and premiums on debt
|
|
(19,010
|
)
|
|
(5,611
|
)
|
||
Amortization of deferred settlements on derivative instruments
|
|
32,850
|
|
|
8,751
|
|
||
Write-off of pursuit costs
|
|
2,563
|
|
|
1,651
|
|
||
Loss (income) from investments in unconsolidated entities
|
|
1,904
|
|
|
(15,429
|
)
|
||
Distributions from unconsolidated entities – return on capital
|
|
1,482
|
|
|
2,193
|
|
||
Net (gain) on sales of investment securities and other investments
|
|
(55,156
|
)
|
|
(387
|
)
|
||
Net (gain) on sales of real estate properties
|
|
(3,780,835
|
)
|
|
(228,753
|
)
|
||
Net (gain) loss on sales of land parcels
|
|
(11,722
|
)
|
|
1
|
|
||
Net (gain) on sales of discontinued operations
|
|
(15
|
)
|
|
—
|
|
||
Realized/unrealized loss on derivative instruments
|
|
—
|
|
|
51
|
|
||
Compensation paid with Company Common Shares
|
|
20,729
|
|
|
24,017
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Decrease (increase) in deposits – restricted
|
|
9,121
|
|
|
(288
|
)
|
||
(Increase) in mortgage deposits
|
|
(840
|
)
|
|
(382
|
)
|
||
Decrease (increase) in other assets
|
|
29,944
|
|
|
(4,553
|
)
|
||
Increase in accounts payable and accrued expenses
|
|
7,837
|
|
|
22,350
|
|
||
(Decrease) in accrued interest payable
|
|
(27,046
|
)
|
|
(2,409
|
)
|
||
(Decrease) in other liabilities
|
|
(42,080
|
)
|
|
(11,097
|
)
|
||
(Decrease) increase in security deposits
|
|
(13,340
|
)
|
|
479
|
|
||
Net cash provided by operating activities
|
|
475,076
|
|
|
675,047
|
|
||
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
||||
Investment in real estate – acquisitions
|
|
(160,680
|
)
|
|
(136,995
|
)
|
||
Investment in real estate – development/other
|
|
(312,853
|
)
|
|
(324,343
|
)
|
||
Capital expenditures to real estate
|
|
(74,450
|
)
|
|
(81,962
|
)
|
||
Non-real estate capital additions
|
|
(3,259
|
)
|
|
(1,955
|
)
|
||
Interest capitalized for real estate under development
|
|
(28,386
|
)
|
|
(30,432
|
)
|
||
Proceeds from disposition of real estate, net
|
|
6,415,181
|
|
|
379,863
|
|
||
Investments in unconsolidated entities
|
|
(1,829
|
)
|
|
(4,786
|
)
|
||
Distributions from unconsolidated entities – return of capital
|
|
524
|
|
|
26,147
|
|
||
Proceeds from sale of investment securities and other investments
|
|
68,528
|
|
|
387
|
|
||
(Increase) in deposits on real estate acquisitions and investments, net
|
|
(30,815
|
)
|
|
(31,247
|
)
|
||
Decrease (increase) in mortgage deposits
|
|
46
|
|
|
(226
|
)
|
||
Net cash provided by (used for) investing activities
|
|
5,872,007
|
|
|
(205,549
|
)
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
||||
Debt financing costs
|
|
$
|
(437
|
)
|
|
$
|
(6,352
|
)
|
Mortgage deposits
|
|
(3,971
|
)
|
|
(4,169
|
)
|
||
Mortgage notes payable, net:
|
|
|
|
|
||||
Lump sum payoffs
|
|
(556,499
|
)
|
|
(121,488
|
)
|
||
Scheduled principal repayments
|
|
(4,740
|
)
|
|
(5,028
|
)
|
||
Notes, net:
|
|
|
|
|
||||
Proceeds
|
|
—
|
|
|
746,391
|
|
||
Lump sum payoffs
|
|
(1,500,000
|
)
|
|
(300,000
|
)
|
||
Line of credit and commercial paper:
|
|
|
|
|
||||
Line of credit proceeds
|
|
246,000
|
|
|
3,553,000
|
|
||
Line of credit repayments
|
|
(246,000
|
)
|
|
(3,886,000
|
)
|
||
Commercial paper proceeds
|
|
1,324,784
|
|
|
2,266,924
|
|
||
Commercial paper repayments
|
|
(1,712,472
|
)
|
|
(2,267,500
|
)
|
||
(Payments on) settlement of derivative instruments
|
|
—
|
|
|
(13,938
|
)
|
||
Proceeds from EQR's Employee Share Purchase Plan (ESPP)
|
|
2,023
|
|
|
2,610
|
|
||
Proceeds from exercise of EQR options
|
|
26,141
|
|
|
33,984
|
|
||
Redemption of Preference Units
|
|
—
|
|
|
(9,820
|
)
|
||
Premium on redemption of Preference Units
|
|
—
|
|
|
(2,789
|
)
|
||
Payment of offering costs
|
|
—
|
|
|
(40
|
)
|
||
Other financing activities, net
|
|
(33
|
)
|
|
(33
|
)
|
||
Contributions – Limited Partners
|
|
1
|
|
|
1
|
|
||
Distributions:
|
|
|
|
|
||||
OP Units – General Partner
|
|
(3,306,704
|
)
|
|
(382,441
|
)
|
||
Preference Units
|
|
(1,545
|
)
|
|
(1,724
|
)
|
||
OP Units – Limited Partners
|
|
(130,383
|
)
|
|
(15,062
|
)
|
||
Noncontrolling Interests – Partially Owned Properties
|
|
(27,681
|
)
|
|
(3,995
|
)
|
||
Net cash (used for) financing activities
|
|
(5,891,516
|
)
|
|
(417,469
|
)
|
||
Net increase in cash and cash equivalents
|
|
455,567
|
|
|
52,029
|
|
||
Cash and cash equivalents, beginning of period
|
|
42,276
|
|
|
40,080
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
497,843
|
|
|
$
|
92,109
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
SUPPLEMENTAL INFORMATION:
|
|
|
|
|
||||
Cash paid for interest, net of amounts capitalized
|
|
$
|
313,480
|
|
|
$
|
218,965
|
|
Net cash paid for income and other taxes
|
|
$
|
1,166
|
|
|
$
|
895
|
|
Real estate acquisitions/dispositions/other:
|
|
|
|
|
||||
Mortgage loans assumed
|
|
$
|
43,400
|
|
|
$
|
—
|
|
Amortization of deferred financing costs:
|
|
|
|
|
||||
Other assets
|
|
$
|
1,527
|
|
|
$
|
1,527
|
|
Mortgage notes payable, net
|
|
$
|
2,617
|
|
|
$
|
1,607
|
|
Notes, net
|
|
$
|
3,595
|
|
|
$
|
1,993
|
|
Amortization of discounts and premiums on debt:
|
|
|
|
|
||||
Mortgage notes payable, net
|
|
$
|
(21,476
|
)
|
|
$
|
(7,420
|
)
|
Notes, net
|
|
$
|
2,054
|
|
|
$
|
1,233
|
|
Line of credit and commercial paper
|
|
$
|
412
|
|
|
$
|
576
|
|
Amortization of deferred settlements on derivative instruments:
|
|
|
|
|
||||
Other liabilities
|
|
$
|
(72
|
)
|
|
$
|
(160
|
)
|
Accumulated other comprehensive income
|
|
$
|
32,922
|
|
|
$
|
8,911
|
|
Write-off of pursuit costs:
|
|
|
|
|
||||
Investment in real estate, net
|
|
$
|
2,072
|
|
|
$
|
1,260
|
|
Deposits – restricted
|
|
$
|
—
|
|
|
$
|
330
|
|
Other assets
|
|
$
|
390
|
|
|
$
|
61
|
|
Accounts payable and accrued expenses
|
|
$
|
101
|
|
|
$
|
—
|
|
Loss (income) from investments in unconsolidated entities:
|
|
|
|
|
||||
Investments in unconsolidated entities
|
|
$
|
1,122
|
|
|
$
|
(16,767
|
)
|
Other liabilities
|
|
$
|
782
|
|
|
$
|
1,338
|
|
Distributions from unconsolidated entities – return on capital:
|
|
|
|
|
||||
Investments in unconsolidated entities
|
|
$
|
1,482
|
|
|
$
|
2,125
|
|
Other liabilities
|
|
$
|
—
|
|
|
$
|
68
|
|
Realized/unrealized loss on derivative instruments:
|
|
|
|
|
||||
Other assets
|
|
$
|
(8,390
|
)
|
|
$
|
(3,873
|
)
|
Notes, net
|
|
$
|
8,390
|
|
|
$
|
2,358
|
|
Other liabilities
|
|
$
|
4,467
|
|
|
$
|
1,678
|
|
Accumulated other comprehensive income
|
|
$
|
(4,467
|
)
|
|
$
|
(112
|
)
|
Investments in unconsolidated entities:
|
|
|
|
|
||||
Investments in unconsolidated entities
|
|
$
|
(929
|
)
|
|
$
|
(1,291
|
)
|
Other liabilities
|
|
$
|
(900
|
)
|
|
$
|
(3,495
|
)
|
Debt financing costs:
|
|
|
|
|
||||
Mortgage notes payable, net
|
|
$
|
(437
|
)
|
|
$
|
—
|
|
Notes, net
|
|
$
|
—
|
|
|
$
|
(6,352
|
)
|
Other:
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
$
|
(50
|
)
|
|
$
|
502
|
|
|
|
Six Months Ended
|
||
|
|
June 30, 2016
|
||
PARTNERS' CAPITAL
|
|
|
||
|
|
|
||
PREFERENCE UNITS
|
|
|
||
Balance, beginning of year
|
|
$
|
37,280
|
|
Balance, end of period
|
|
$
|
37,280
|
|
|
|
|
||
GENERAL PARTNER
|
|
|
||
Balance, beginning of year
|
|
$
|
10,585,104
|
|
OP Unit Issuance:
|
|
|
||
Conversion of OP Units held by Limited Partners into OP Units held by General Partner
|
|
271
|
|
|
Exercise of EQR share options
|
|
26,141
|
|
|
EQR's Employee Share Purchase Plan (ESPP)
|
|
2,023
|
|
|
Share-based employee compensation expense:
|
|
|
||
EQR restricted shares
|
|
9,627
|
|
|
EQR share options
|
|
2,733
|
|
|
EQR ESPP discount
|
|
357
|
|
|
Net income available to Units – General Partner
|
|
3,805,052
|
|
|
OP Units – General Partner distributions
|
|
(3,289,355
|
)
|
|
Supplemental Executive Retirement Plan (SERP)
|
|
801
|
|
|
Change in market value of Redeemable Limited Partners
|
|
99,190
|
|
|
Adjustment for Limited Partners ownership in Operating Partnership
|
|
4,865
|
|
|
Balance, end of period
|
|
$
|
11,246,809
|
|
|
|
|
||
LIMITED PARTNERS
|
|
|
||
Balance, beginning of year
|
|
$
|
221,379
|
|
Issuance of restricted units to Limited Partners
|
|
1
|
|
|
Conversion of OP Units held by Limited Partners into OP Units held by General Partner
|
|
(271
|
)
|
|
Equity compensation associated with Units – Limited Partners
|
|
13,903
|
|
|
Net income available to Units – Limited Partners
|
|
152,089
|
|
|
Units – Limited Partners distributions
|
|
(129,757
|
)
|
|
Change in carrying value of Redeemable Limited Partners
|
|
(10,731
|
)
|
|
Adjustment for Limited Partners ownership in Operating Partnership
|
|
(4,865
|
)
|
|
Balance, end of period
|
|
$
|
241,748
|
|
|
|
|
||
ACCUMULATED OTHER COMPREHENSIVE (LOSS)
|
|
|
||
Balance, beginning of year
|
|
$
|
(152,016
|
)
|
Accumulated other comprehensive (loss) income – derivative instruments:
|
|
|
||
Unrealized holding (losses) arising during the period
|
|
(4,467
|
)
|
|
Losses reclassified into earnings from other comprehensive income
|
|
32,922
|
|
|
Accumulated other comprehensive income – foreign currency:
|
|
|
||
Currency translation adjustments arising during the period
|
|
50
|
|
|
Balance, end of period
|
|
$
|
(123,511
|
)
|
|
|
Six Months Ended
|
||
|
|
June 30, 2016
|
||
NONCONTROLLING INTERESTS
|
|
|
||
|
|
|
||
NONCONTROLLING INTERESTS – PARTIALLY OWNED PROPERTIES
|
|
|
||
Balance, beginning of year
|
|
$
|
4,608
|
|
Net income attributable to Noncontrolling Interests
|
|
1,545
|
|
|
Distributions to Noncontrolling Interests
|
|
(27,714
|
)
|
|
Other
|
|
25,839
|
|
|
Balance, end of period
|
|
$
|
4,278
|
|
1.
|
Business
|
|
|
Properties
|
|
Apartment Units
|
||
Wholly Owned Properties
|
|
291
|
|
|
73,853
|
|
Master-Leased Properties – Consolidated
|
|
3
|
|
|
853
|
|
Partially Owned Properties – Consolidated
|
|
18
|
|
|
3,471
|
|
Partially Owned Properties – Unconsolidated
|
|
3
|
|
|
1,281
|
|
|
|
315
|
|
|
79,458
|
|
2.
|
Summary of Significant Accounting Policies
|
|
|
December 31, 2015
|
||||||||||
|
|
As Originally
Presented |
|
Reclassification
Adjustments |
|
As Presented
Herein |
||||||
Deferred financing costs, net
|
|
$
|
54,004
|
|
|
$
|
(54,004
|
)
|
|
$
|
—
|
|
Other assets
|
|
$
|
422,027
|
|
|
$
|
6,872
|
|
|
$
|
428,899
|
|
Mortgage notes payable, net
|
|
$
|
4,704,870
|
|
|
$
|
(19,736
|
)
|
|
$
|
4,685,134
|
|
Notes, net
|
|
$
|
5,876,352
|
|
|
$
|
(27,396
|
)
|
|
$
|
5,848,956
|
|
3.
|
Equity, Capital and Other Interests
|
|
|
2016
|
|
Common Shares
|
|
|
|
Common Shares outstanding at January 1,
|
|
364,755,444
|
|
Common Shares Issued:
|
|
|
|
Conversion of OP Units
|
|
9,840
|
|
Exercise of share options
|
|
599,634
|
|
Employee Share Purchase Plan (ESPP)
|
|
33,065
|
|
Restricted share grants, net
|
|
152,653
|
|
Common Shares outstanding at June 30,
|
|
365,550,636
|
|
Units
|
|
|
|
Units outstanding at January 1,
|
|
14,427,164
|
|
Restricted unit grants, net
|
|
289,273
|
|
Conversion of OP Units to Common Shares
|
|
(9,840
|
)
|
Units outstanding at June 30,
|
|
14,706,597
|
|
Total Common Shares and Units outstanding at June 30,
|
|
380,257,233
|
|
Units Ownership Interest in Operating Partnership
|
|
3.9
|
%
|
|
|
2016
|
||
Balance at January 1,
|
|
$
|
566,783
|
|
Change in market value
|
|
(99,190
|
)
|
|
Change in carrying value
|
|
10,731
|
|
|
Balance at June 30,
|
|
$
|
478,324
|
|
|
|
|
|
|
|
Amounts in thousands
|
||||||||
|
|
Redemption
Date (1) |
|
Annual
Dividend per Share (2) |
|
June 30,
2016 |
|
December 31,
2015 |
||||||
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; 745,600 shares issued and outstanding at June 30, 2016 and December 31, 2015 |
|
12/10/26
|
|
|
$4.145
|
|
|
$
|
37,280
|
|
|
$
|
37,280
|
|
|
|
|
|
|
|
$
|
37,280
|
|
|
$
|
37,280
|
|
(1)
|
On or after the redemption date, redeemable preferred shares may be redeemed for cash at the option of the Company, in whole or in part, at a redemption price equal to the liquidation price per share, plus accrued and unpaid distributions, if any.
|
(2)
|
Dividends on Preferred Shares are payable quarterly.
|
|
|
2016
|
|
General and Limited Partner Units
|
|
|
|
General and Limited Partner Units outstanding at January 1,
|
|
379,182,608
|
|
Issued to General Partner:
|
|
|
|
Exercise of EQR share options
|
|
599,634
|
|
EQR’s Employee Share Purchase Plan (ESPP)
|
|
33,065
|
|
EQR's restricted share grants, net
|
|
152,653
|
|
Issued to Limited Partners:
|
|
|
|
Restricted unit grants, net
|
|
289,273
|
|
General and Limited Partner Units outstanding at June 30,
|
|
380,257,233
|
|
Limited Partner Units
|
|
|
|
Limited Partner Units outstanding at January 1,
|
|
14,427,164
|
|
Limited Partner restricted unit grants, net
|
|
289,273
|
|
Conversion of Limited Partner OP Units to EQR Common Shares
|
|
(9,840
|
)
|
Limited Partner Units outstanding at June 30,
|
|
14,706,597
|
|
Limited Partner Units Ownership Interest in Operating Partnership
|
|
3.9
|
%
|
|
|
2016
|
||
Balance at January 1,
|
|
$
|
566,783
|
|
Change in market value
|
|
(99,190
|
)
|
|
Change in carrying value
|
|
10,731
|
|
|
Balance at June 30,
|
|
$
|
478,324
|
|
|
|
|
|
|
|
Amounts in thousands
|
||||||||
|
|
Redemption
Date (1)
|
|
Annual
Dividend per Unit (2) |
|
June 30,
2016 |
|
December 31,
2015 |
||||||
Preference Units:
|
|
|
|
|
|
|
|
|
||||||
8.29% Series K Cumulative Redeemable Preference Units;
liquidation value $50 per unit; 745,600 units issued and outstanding at June 30, 2016 and December 31, 2015 |
|
12/10/26
|
|
|
$4.145
|
|
|
$
|
37,280
|
|
|
$
|
37,280
|
|
|
|
|
|
|
|
$
|
37,280
|
|
|
$
|
37,280
|
|
(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, Real Estate Held for Sale and Lease Intangibles
|
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
Land
|
|
$
|
5,835,195
|
|
|
$
|
5,864,046
|
|
Depreciable property:
|
|
|
|
|
||||
Buildings and improvements
|
|
16,735,299
|
|
|
16,346,829
|
|
||
Furniture, fixtures and equipment
|
|
1,269,413
|
|
|
1,207,098
|
|
||
In-Place lease intangibles
|
|
469,679
|
|
|
483,160
|
|
||
Projects under development:
|
|
|
|
|
||||
Land
|
|
188,563
|
|
|
284,995
|
|
||
Construction-in-progress
|
|
611,384
|
|
|
837,381
|
|
||
Land held for development:
|
|
|
|
|
||||
Land
|
|
98,549
|
|
|
120,007
|
|
||
Construction-in-progress
|
|
39,672
|
|
|
38,836
|
|
||
Investment in real estate
|
|
25,247,754
|
|
|
25,182,352
|
|
||
Accumulated depreciation
|
|
(5,119,342
|
)
|
|
(4,905,406
|
)
|
||
Investment in real estate, net
|
|
$
|
20,128,412
|
|
|
$
|
20,276,946
|
|
Description
|
|
Balance Sheet Location
|
|
June 30, 2016
|
|
December 31, 2015
|
||||
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
|
|
|
|
(15,712
|
)
|
|
(13,451
|
)
|
||
Lease intangible assets, net
|
|
|
|
$
|
163,799
|
|
|
$
|
166,060
|
|
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
||||
Ground lease intangibles – above market
|
|
Other Liabilities
|
|
$
|
2,400
|
|
|
$
|
2,400
|
|
Retail lease intangibles – below market
|
|
Other Liabilities
|
|
5,270
|
|
|
5,270
|
|
||
Lease intangible liabilities
|
|
|
|
7,670
|
|
|
7,670
|
|
||
Accumulated amortization
|
|
|
|
(3,967
|
)
|
|
(3,414
|
)
|
||
Lease intangible liabilities, net
|
|
|
|
$
|
3,703
|
|
|
$
|
4,256
|
|
|
|
Remaining
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Ground lease intangibles
|
|
$
|
2,161
|
|
|
$
|
4,321
|
|
|
$
|
4,321
|
|
|
$
|
4,321
|
|
|
$
|
4,321
|
|
|
$
|
4,321
|
|
Retail lease intangibles
|
|
(444
|
)
|
|
(540
|
)
|
|
(71
|
)
|
|
(71
|
)
|
|
(71
|
)
|
|
(67
|
)
|
||||||
Total
|
|
$
|
1,717
|
|
|
$
|
3,781
|
|
|
$
|
4,250
|
|
|
$
|
4,250
|
|
|
$
|
4,250
|
|
|
$
|
4,254
|
|
|
|
Properties
|
|
Apartment Units
|
|
Purchase Price
|
||||
Rental Properties – Consolidated (1)
|
|
3
|
|
|
479
|
|
|
$
|
204,134
|
|
Total
|
|
3
|
|
|
479
|
|
|
$
|
204,134
|
|
(1)
|
Purchase price includes an allocation of approximately
$80.9 million
to land and
$123.2 million
to depreciable property.
|
|
|
Properties
|
|
Apartment Units
|
|
Sales Price
|
||||
Rental Properties – Consolidated (1)
|
|
83
|
|
|
26,890
|
|
|
$
|
6,427,403
|
|
Land Parcels – Consolidated
|
|
—
|
|
|
—
|
|
|
27,455
|
|
|
Total
|
|
83
|
|
|
26,890
|
|
|
$
|
6,454,858
|
|
(1)
|
Includes the Starwood Portfolio sale (see further discussion below) representing
72
operating properties consisting of
23,262
apartment units for
$5.365 billion
.
|
|
|
December 31, 2015
|
||
Land
|
|
$
|
602,737
|
|
Depreciable property:
|
|
|
||
Buildings and improvements
|
|
2,386,489
|
|
|
Furniture, fixtures and equipment
|
|
335,565
|
|
|
In-Place lease intangibles
|
|
35,554
|
|
|
Real estate held for sale before accumulated depreciation
|
|
3,360,345
|
|
|
Accumulated depreciation
|
|
(1,179,210
|
)
|
|
Real estate held for sale
|
|
$
|
2,181,135
|
|
Markets/Metro Areas
|
|
Properties
|
|
Apartment Units
|
||
South Florida
|
|
33
|
|
|
10,742
|
|
Denver
|
|
18
|
|
|
6,635
|
|
Washington D.C.
|
|
10
|
|
|
3,020
|
|
Seattle
|
|
8
|
|
|
1,721
|
|
Los Angeles
|
|
3
|
|
|
1,144
|
|
Total
|
|
72
|
|
|
23,262
|
|
5.
|
Commitments to Acquire/Dispose of Real Estate
|
|
|
Properties
|
|
Apartment Units
|
|
Sales Price
|
||||
Rental Properties
|
|
9
|
|
|
1,344
|
|
|
$
|
191,680
|
|
Land Parcels (two)
|
|
—
|
|
|
—
|
|
|
36,150
|
|
|
Total
|
|
9
|
|
|
1,344
|
|
|
$
|
227,830
|
|
6.
|
Investments in Partially Owned Entities
|
|
|
Consolidated
|
|
Unconsolidated
|
||||||||||||
|
|
(VIE)
|
|
(Non-VIE)
|
|
(VIE) (1)
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Total properties
|
|
18
|
|
|
2
|
|
|
1
|
|
|
3
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total apartment units
|
|
3,471
|
|
|
945
|
|
|
336
|
|
|
1,281
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Balance sheet information at 6/30/16 (at 100%):
|
|
|
|
|
|
|
|
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
|
||||||||
Investment in real estate
|
|
$
|
667,414
|
|
|
$
|
234,807
|
|
|
$
|
229,685
|
|
|
$
|
464,492
|
|
Accumulated depreciation
|
|
(214,810
|
)
|
|
(27,615
|
)
|
|
(51,053
|
)
|
|
(78,668
|
)
|
||||
Investment in real estate, net
|
|
452,604
|
|
|
207,192
|
|
|
178,632
|
|
|
385,824
|
|
||||
Cash and cash equivalents
|
|
17,860
|
|
|
6,860
|
|
|
1,068
|
|
|
7,928
|
|
||||
Investments in unconsolidated entities
|
|
48,127
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Deposits – restricted
|
|
353
|
|
|
262
|
|
|
47
|
|
|
309
|
|
||||
Other assets
|
|
25,658
|
|
|
448
|
|
|
913
|
|
|
1,361
|
|
||||
Total assets
|
|
$
|
544,602
|
|
|
$
|
214,762
|
|
|
$
|
180,660
|
|
|
$
|
395,422
|
|
|
|
|
|
|
|
|
|
|
||||||||
LIABILITIES AND EQUITY/CAPITAL
|
|
|
|
|
|
|
|
|
||||||||
Mortgage notes payable, net (2)
|
|
$
|
318,114
|
|
|
$
|
145,423
|
|
|
$
|
29,123
|
|
|
$
|
174,546
|
|
Accounts payable & accrued expenses
|
|
1,966
|
|
|
1,239
|
|
|
351
|
|
|
1,590
|
|
||||
Accrued interest payable
|
|
1,085
|
|
|
691
|
|
|
—
|
|
|
691
|
|
||||
Other liabilities
|
|
754
|
|
|
312
|
|
|
541
|
|
|
853
|
|
||||
Security deposits
|
|
1,959
|
|
|
488
|
|
|
155
|
|
|
643
|
|
||||
Total liabilities
|
|
323,878
|
|
|
148,153
|
|
|
30,170
|
|
|
178,323
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Noncontrolling Interests – Partially Owned Properties/Partners' equity
|
|
4,278
|
|
|
62,282
|
|
|
104,272
|
|
|
166,554
|
|
||||
Company equity/General and Limited Partners' Capital
|
|
216,446
|
|
|
4,327
|
|
|
46,218
|
|
|
50,545
|
|
||||
Total equity/capital
|
|
220,724
|
|
|
66,609
|
|
|
150,490
|
|
|
217,099
|
|
||||
Total liabilities and equity/capital
|
|
$
|
544,602
|
|
|
$
|
214,762
|
|
|
$
|
180,660
|
|
|
$
|
395,422
|
|
|
|
Consolidated
|
|
Unconsolidated
|
||||||||||||
|
|
(VIE)
|
|
(Non-VIE)
|
|
(VIE) (1)
|
|
Total
|
||||||||
Operating information for the six months ended 6/30/16 (at 100%):
|
|
|
|
|
|
|
|
|
||||||||
Operating revenue
|
|
$
|
46,331
|
|
|
$
|
13,139
|
|
|
$
|
5,794
|
|
|
$
|
18,933
|
|
Operating expenses
|
|
11,319
|
|
|
4,348
|
|
|
2,337
|
|
|
6,685
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net operating income
|
|
35,012
|
|
|
8,791
|
|
|
3,457
|
|
|
12,248
|
|
||||
Property management
|
|
1,633
|
|
|
383
|
|
|
38
|
|
|
421
|
|
||||
General and administrative/other
|
|
40
|
|
|
1
|
|
|
165
|
|
|
166
|
|
||||
Depreciation
|
|
10,755
|
|
|
5,246
|
|
|
3,716
|
|
|
8,962
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
|
22,584
|
|
|
3,161
|
|
|
(462
|
)
|
|
2,699
|
|
||||
Interest and other income
|
|
37
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Interest:
|
|
|
|
|
|
|
|
|
||||||||
Expense incurred, net
|
|
(7,549
|
)
|
|
(4,145
|
)
|
|
(545
|
)
|
|
(4,690
|
)
|
||||
Amortization of deferred financing costs
|
|
(218
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income and other taxes and (loss) from
investments in unconsolidated entities |
|
14,854
|
|
|
(984
|
)
|
|
(1,007
|
)
|
|
(1,991
|
)
|
||||
Income and other tax (expense) benefit
|
|
(44
|
)
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
||||
(Loss) from investments in unconsolidated entities
|
|
(731
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
14,079
|
|
|
$
|
(997
|
)
|
|
$
|
(1,007
|
)
|
|
$
|
(2,004
|
)
|
(1)
|
Includes the company's unconsolidated interest in an entity that owns the land underlying our Wisconsin Place apartment property and owns and operates the parking facility. This entity is excluded from the property and apartment unit count.
|
(2)
|
All debt is non-recourse to the Company.
|
7.
|
Deposits – Restricted and Escrow Deposits – Mortgage
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Tax-deferred (1031) exchange proceeds
|
|
$
|
34,032
|
|
|
$
|
—
|
|
Earnest money on pending acquisitions
|
|
—
|
|
|
1,000
|
|
||
Restricted deposits on real estate investments
|
|
3,860
|
|
|
6,077
|
|
||
Resident security and utility deposits
|
|
39,336
|
|
|
48,458
|
|
||
Other
|
|
359
|
|
|
358
|
|
||
Totals
|
|
$
|
77,587
|
|
|
$
|
55,893
|
|
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Real estate taxes and insurance
|
|
$
|
2,817
|
|
|
$
|
1,977
|
|
Replacement reserves
|
|
3,916
|
|
|
3,962
|
|
||
Mortgage principal reserves/sinking funds
|
|
54,126
|
|
|
50,155
|
|
||
Other
|
|
852
|
|
|
852
|
|
||
Totals
|
|
$
|
61,711
|
|
|
$
|
56,946
|
|
8.
|
Debt
|
•
|
Repaid
$440.8 million
of
6.256%
mortgage debt held in a Fannie Mae loan pool maturing in
2017
and incurred a prepayment penalty of approximately
$29.3 million
;
|
•
|
Repaid
$57.8 million
of various tax-exempt mortgage bonds maturing in
2026
through
2037
and incurred a prepayment penalty of approximately
$0.2 million
;
|
•
|
Repaid
$57.9 million
of conventional fixed-rate mortgage loans;
|
•
|
Repaid
$4.7 million
of scheduled principal repayments on various mortgage debt; and
|
•
|
Assumed
$43.4 million
of mortgage debt on
one
acquired property.
|
•
|
Repaid
$228.9 million
of
5.125%
unsecured notes maturing in
2016
and incurred a prepayment penalty of approximately
$1.4 million
and repaid the remaining
$271.1 million
of
5.125%
unsecured notes at maturity;
|
•
|
Repaid
$400.0 million
of
5.375%
unsecured notes maturing in
2016
and incurred a prepayment penalty of approximately
$9.5 million
;
|
•
|
Repaid
$255.9 million
of
5.750%
unsecured notes maturing in
2017
and incurred a prepayment penalty of approximately
$16.5 million
;
|
•
|
Repaid
$46.1 million
of
7.125%
unsecured notes maturing in
2017
and incurred a prepayment penalty of approximately
$4.6 million
;
|
•
|
Repaid
$250.0 million
of
4.625%
unsecured notes maturing in
2021
and incurred a prepayment penalty of approximately
$31.6 million
; and
|
•
|
Repaid
$48.0 million
of
7.570%
unsecured notes maturing in
2026
and incurred a prepayment penalty of approximately
$19.3 million
.
|
9.
|
Derivative and Other Fair Value Instruments
|
•
|
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
Hedges (1) |
|
Forward
Starting Swaps (2) |
||||
Current Notional Balance
|
|
$
|
450,000
|
|
|
$
|
50,000
|
|
Indicative Interest Rate
|
|
2.375
|
%
|
|
2.500
|
%
|
||
Maturity Date
|
|
2019
|
|
|
2026
|
|
(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. This swap has a mandatory counterparty termination in 2017, and is targeted to a 2016 issuance.
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
Description
|
|
Balance Sheet
Location
|
|
6/30/2016
|
|
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:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fair Value Hedges
|
|
Other Assets
|
|
$
|
12,045
|
|
|
$
|
—
|
|
|
$
|
12,045
|
|
|
$
|
—
|
|
Supplemental Executive Retirement Plan
|
|
Other Assets
|
|
116,287
|
|
|
116,287
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
128,332
|
|
|
$
|
116,287
|
|
|
$
|
12,045
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Forward Starting Swaps
|
|
Other Liabilities
|
|
$
|
5,140
|
|
|
$
|
—
|
|
|
$
|
5,140
|
|
|
$
|
—
|
|
Supplemental Executive Retirement Plan
|
|
Other Liabilities
|
|
116,287
|
|
|
116,287
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
121,427
|
|
|
$
|
116,287
|
|
|
$
|
5,140
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Redeemable Noncontrolling Interests –
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Partnership/Redeemable
|
|
|
|
|
|
|
|
|
|
|
||||||||
Limited Partners
|
|
Mezzanine
|
|
$
|
478,324
|
|
|
$
|
—
|
|
|
$
|
478,324
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
Description
|
|
Balance Sheet
Location
|
|
12/31/2015
|
|
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:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fair Value Hedges
|
|
Other Assets
|
|
$
|
3,655
|
|
|
$
|
—
|
|
|
$
|
3,655
|
|
|
$
|
—
|
|
Supplemental Executive Retirement Plan
|
|
Other Assets
|
|
105,942
|
|
|
105,942
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
109,597
|
|
|
$
|
105,942
|
|
|
$
|
3,655
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Contracts:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Forward Starting Swaps
|
|
Other Liabilities
|
|
$
|
673
|
|
|
$
|
—
|
|
|
$
|
673
|
|
|
$
|
—
|
|
Supplemental Executive Retirement Plan
|
|
Other Liabilities
|
|
105,942
|
|
|
105,942
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
|
|
$
|
106,615
|
|
|
$
|
105,942
|
|
|
$
|
673
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Redeemable Noncontrolling Interests –
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating Partnership/Redeemable
|
|
|
|
|
|
|
|
|
|
|
||||||||
Limited Partners
|
|
Mezzanine
|
|
$
|
566,783
|
|
|
$
|
—
|
|
|
$
|
566,783
|
|
|
$
|
—
|
|
June 30, 2016
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
|
|
$
|
8,390
|
|
|
Fixed rate debt
|
|
Interest expense
|
|
$
|
(8,390
|
)
|
Total
|
|
|
|
$
|
8,390
|
|
|
|
|
|
|
$
|
(8,390
|
)
|
June 30, 2015
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
|
|
$
|
2,358
|
|
|
Fixed rate debt
|
|
Interest expense
|
|
$
|
(2,358
|
)
|
Total
|
|
|
|
$
|
2,358
|
|
|
|
|
|
|
$
|
(2,358
|
)
|
|
|
Effective Portion
|
|
Ineffective Portion
|
||||||||||||
June 30, 2016
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
|
$
|
(4,467
|
)
|
|
Interest expense
|
|
$
|
(32,922
|
)
|
|
N/A
|
|
$
|
—
|
|
|
Total
|
|
$
|
(4,467
|
)
|
|
|
|
$
|
(32,922
|
)
|
|
|
|
$
|
—
|
|
|
|
Effective Portion
|
|
Ineffective Portion
|
||||||||||||
June 30, 2015
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
|
|
$
|
(142
|
)
|
|
Interest expense
|
|
$
|
(8,911
|
)
|
|
Interest expense
|
|
$
|
(30
|
)
|
Total
|
|
$
|
(142
|
)
|
|
|
|
$
|
(8,911
|
)
|
|
|
|
$
|
(30
|
)
|
10.
|
Earning Per Share and Earnings Per Unit
|
|
|
Six Months Ended June 30,
|
|
Quarter Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Numerator for net income per share – basic:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
$
|
3,960,353
|
|
|
$
|
488,573
|
|
|
$
|
228,365
|
|
|
$
|
298,504
|
|
Allocation to Noncontrolling Interests – Operating Partnership, net
|
|
(152,093
|
)
|
|
(18,403
|
)
|
|
(8,779
|
)
|
|
(11,350
|
)
|
||||
Net (income) attributable to Noncontrolling Interests – Partially Owned Properties
|
|
(1,545
|
)
|
|
(1,487
|
)
|
|
(781
|
)
|
|
(844
|
)
|
||||
Preferred distributions
|
|
(1,545
|
)
|
|
(1,724
|
)
|
|
(772
|
)
|
|
(833
|
)
|
||||
Premium on redemption of Preferred Shares
|
|
—
|
|
|
(2,789
|
)
|
|
—
|
|
|
—
|
|
||||
Income from continuing operations available to Common Shares, net of
Noncontrolling Interests |
|
3,805,170
|
|
|
464,170
|
|
|
218,033
|
|
|
285,477
|
|
||||
Discontinued operations, net of Noncontrolling Interests
|
|
(118
|
)
|
|
259
|
|
|
34
|
|
|
110
|
|
||||
Numerator for net income per share – basic
|
|
$
|
3,805,052
|
|
|
$
|
464,429
|
|
|
$
|
218,067
|
|
|
$
|
285,587
|
|
Numerator for net income per share – diluted:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
$
|
3,960,353
|
|
|
$
|
488,573
|
|
|
$
|
228,365
|
|
|
$
|
298,504
|
|
Net (income) attributable to Noncontrolling Interests – Partially Owned Properties
|
|
(1,545
|
)
|
|
(1,487
|
)
|
|
(781
|
)
|
|
(844
|
)
|
||||
Preferred distributions
|
|
(1,545
|
)
|
|
(1,724
|
)
|
|
(772
|
)
|
|
(833
|
)
|
||||
Premium on redemption of Preferred Shares
|
|
—
|
|
|
(2,789
|
)
|
|
—
|
|
|
—
|
|
||||
Income from continuing operations available to Common Shares
|
|
3,957,263
|
|
|
482,573
|
|
|
226,812
|
|
|
296,827
|
|
||||
Discontinued operations, net
|
|
(122
|
)
|
|
269
|
|
|
35
|
|
|
114
|
|
||||
Numerator for net income per share – diluted
|
|
$
|
3,957,141
|
|
|
$
|
482,842
|
|
|
$
|
226,847
|
|
|
$
|
296,941
|
|
Denominator for net income per share – basic and diluted:
|
|
|
|
|
|
|
|
|
||||||||
Denominator for net income per share – basic
|
|
364,820
|
|
|
363,288
|
|
|
365,047
|
|
|
363,476
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
OP Units
|
|
13,792
|
|
|
13,592
|
|
|
13,887
|
|
|
13,587
|
|
||||
Long-term compensation shares/units
|
|
3,400
|
|
|
3,466
|
|
|
3,131
|
|
|
3,428
|
|
||||
Denominator for net income per share – diluted
|
|
382,012
|
|
|
380,346
|
|
|
382,065
|
|
|
380,491
|
|
||||
Net income per share – basic
|
|
$
|
10.43
|
|
|
$
|
1.28
|
|
|
$
|
0.60
|
|
|
$
|
0.79
|
|
Net income per share – diluted
|
|
$
|
10.36
|
|
|
$
|
1.27
|
|
|
$
|
0.59
|
|
|
$
|
0.78
|
|
Net income per share – basic:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations available to Common Shares, net of
Noncontrolling Interests |
|
$
|
10.43
|
|
|
$
|
1.28
|
|
|
$
|
0.60
|
|
|
$
|
0.79
|
|
Discontinued operations, net of Noncontrolling Interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income per share – basic
|
|
$
|
10.43
|
|
|
$
|
1.28
|
|
|
$
|
0.60
|
|
|
$
|
0.79
|
|
Net income per share – diluted:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations available to Common Shares
|
|
$
|
10.36
|
|
|
$
|
1.27
|
|
|
$
|
0.59
|
|
|
$
|
0.78
|
|
Discontinued operations, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income per share – diluted
|
|
$
|
10.36
|
|
|
$
|
1.27
|
|
|
$
|
0.59
|
|
|
$
|
0.78
|
|
|
|
Six Months Ended June 30,
|
|
Quarter Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Numerator for net income per Unit – basic and diluted:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
$
|
3,960,353
|
|
|
$
|
488,573
|
|
|
$
|
228,365
|
|
|
$
|
298,504
|
|
Net (income) attributable to Noncontrolling Interests – Partially Owned Properties
|
|
(1,545
|
)
|
|
(1,487
|
)
|
|
(781
|
)
|
|
(844
|
)
|
||||
Allocation to Preference Units
|
|
(1,545
|
)
|
|
(1,724
|
)
|
|
(772
|
)
|
|
(833
|
)
|
||||
Allocation to premium on redemption of Preference Units
|
|
—
|
|
|
(2,789
|
)
|
|
—
|
|
|
—
|
|
||||
Income from continuing operations available to Units
|
|
3,957,263
|
|
|
482,573
|
|
|
226,812
|
|
|
296,827
|
|
||||
Discontinued operations, net
|
|
(122
|
)
|
|
269
|
|
|
35
|
|
|
114
|
|
||||
Numerator for net income per Unit – basic and diluted
|
|
$
|
3,957,141
|
|
|
$
|
482,842
|
|
|
$
|
226,847
|
|
|
$
|
296,941
|
|
Denominator for net income per Unit – basic and diluted:
|
|
|
|
|
|
|
|
|
||||||||
Denominator for net income per Unit – basic
|
|
378,612
|
|
|
376,880
|
|
|
378,934
|
|
|
377,063
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
||||||||
Dilution for Units issuable upon assumed exercise/vesting of the Company’s
long-term compensation shares/units |
|
3,400
|
|
|
3,466
|
|
|
3,131
|
|
|
3,428
|
|
||||
Denominator for net income per Unit – diluted
|
|
382,012
|
|
|
380,346
|
|
|
382,065
|
|
|
380,491
|
|
||||
Net income per Unit – basic
|
|
$
|
10.43
|
|
|
$
|
1.28
|
|
|
$
|
0.60
|
|
|
$
|
0.79
|
|
Net income per Unit – diluted
|
|
$
|
10.36
|
|
|
$
|
1.27
|
|
|
$
|
0.59
|
|
|
$
|
0.78
|
|
Net income per Unit – basic:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations available to Units
|
|
$
|
10.43
|
|
|
$
|
1.28
|
|
|
$
|
0.60
|
|
|
$
|
0.79
|
|
Discontinued operations, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income per Unit – basic
|
|
$
|
10.43
|
|
|
$
|
1.28
|
|
|
$
|
0.60
|
|
|
$
|
0.79
|
|
Net income per Unit – diluted:
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations available to Units
|
|
$
|
10.36
|
|
|
$
|
1.27
|
|
|
$
|
0.59
|
|
|
$
|
0.78
|
|
Discontinued operations, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income per Unit – diluted
|
|
$
|
10.36
|
|
|
$
|
1.27
|
|
|
$
|
0.59
|
|
|
$
|
0.78
|
|
11.
|
Individually Significant Dispositions and Discontinued Operations
|
|
|
Six Months Ended June 30,
|
|
Quarter Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
|
|
|
||||||
Rental income
|
|
$
|
30,421
|
|
|
$
|
209,911
|
|
|
$
|
304
|
|
|
$
|
106,202
|
|
Total revenues
|
|
30,421
|
|
|
209,911
|
|
|
304
|
|
|
106,202
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
EXPENSES (1)
|
|
|
|
|
|
|
|
|
|
|
||||||
Property and maintenance
|
|
7,923
|
|
|
38,702
|
|
|
33
|
|
|
19,616
|
|
||||
Real estate taxes and insurance
|
|
2,932
|
|
|
24,624
|
|
|
60
|
|
|
12,477
|
|
||||
Property management
|
|
2
|
|
|
6
|
|
|
—
|
|
|
3
|
|
||||
General and administrative
|
|
15
|
|
|
25
|
|
|
14
|
|
|
24
|
|
||||
Depreciation
|
|
—
|
|
|
52,432
|
|
|
—
|
|
|
26,238
|
|
||||
Total expenses
|
|
10,872
|
|
|
115,789
|
|
|
107
|
|
|
58,358
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income
|
|
19,549
|
|
|
94,122
|
|
|
197
|
|
|
47,844
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest and other income
|
|
11
|
|
|
—
|
|
|
9
|
|
|
—
|
|
||||
Interest (2):
|
|
|
|
|
|
|
|
|
||||||||
Expense incurred, net
|
|
(374
|
)
|
|
(342
|
)
|
|
(46
|
)
|
|
(178
|
)
|
||||
Amortization of deferred financing costs
|
|
(707
|
)
|
|
(49
|
)
|
|
—
|
|
|
(25
|
)
|
||||
Income and other tax (expense) benefit
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Net gain (loss) on sales of real estate properties
|
|
3,161,200
|
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income from operations attributable to controlling interests – Operating
Partnership
|
|
3,179,678
|
|
|
93,730
|
|
|
138
|
|
|
47,640
|
|
||||
Income from operations attributable to Noncontrolling Interests – Operating
Partnership
|
|
(122,138
|
)
|
|
(3,574
|
)
|
|
(6
|
)
|
|
(1,820
|
)
|
||||
Income from operations attributable to controlling interests – Company
|
|
$
|
3,057,540
|
|
|
$
|
90,156
|
|
|
$
|
132
|
|
|
$
|
45,820
|
|
(1)
|
Includes expenses paid in the current period for properties held for sale.
|
(2)
|
Includes only interest expense specific to secured mortgage notes payable for properties held for sale which was repaid at or before closing.
|
|
|
Six Months Ended June 30,
|
|
Quarter Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
REVENUES
|
|
|
|
|
|
|
|
|
||||||||
Rental income
|
|
$
|
217
|
|
|
$
|
338
|
|
|
$
|
99
|
|
|
$
|
177
|
|
Total revenues
|
|
217
|
|
|
338
|
|
|
99
|
|
|
177
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
EXPENSES (1)
|
|
|
|
|
|
|
|
|
||||||||
Property and maintenance
|
|
(5
|
)
|
|
(67
|
)
|
|
(2
|
)
|
|
—
|
|
||||
Real estate taxes and insurance
|
|
2
|
|
|
53
|
|
|
1
|
|
|
1
|
|
||||
General and administrative
|
|
66
|
|
|
71
|
|
|
62
|
|
|
65
|
|
||||
Total expenses
|
|
63
|
|
|
57
|
|
|
61
|
|
|
66
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Discontinued operating income
|
|
154
|
|
|
281
|
|
|
38
|
|
|
111
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Interest and other income
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Other expenses
|
|
(280
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Income and other tax (expense) benefit
|
|
(11
|
)
|
|
(15
|
)
|
|
(3
|
)
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Discontinued operations
|
|
(137
|
)
|
|
269
|
|
|
35
|
|
|
114
|
|
||||
Net gain on sales of discontinued operations
|
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Discontinued operations, net
|
|
$
|
(122
|
)
|
|
$
|
269
|
|
|
$
|
35
|
|
|
$
|
114
|
|
(1)
|
Includes expenses paid in the current period for properties sold in prior periods related to the Company’s period of ownership.
|
12.
|
Commitments and Contingencies
|
13.
|
Reportable Segments
|
|
|
Six Months Ended June 30,
|
|
Quarter Ended June 30,
|
||||||||||||
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Rental income
|
|
$
|
1,211,104
|
|
|
$
|
1,341,114
|
|
|
$
|
594,939
|
|
|
$
|
676,508
|
|
Property and maintenance expense
|
|
(205,472
|
)
|
|
(242,565
|
)
|
|
(96,307
|
)
|
|
(118,005
|
)
|
||||
Real estate taxes and insurance expense
|
|
(157,611
|
)
|
|
(169,551
|
)
|
|
(77,415
|
)
|
|
(83,119
|
)
|
||||
Total operating expenses
|
|
(363,083
|
)
|
|
(412,116
|
)
|
|
(173,722
|
)
|
|
(201,124
|
)
|
||||
Net operating income
|
|
$
|
848,021
|
|
|
$
|
928,998
|
|
|
$
|
421,217
|
|
|
$
|
475,384
|
|
|
|
Six Months Ended June 30, 2016
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||||
|
|
Rental
Income |
|
Operating
Expenses |
|
NOI
|
|
Rental
Income |
|
Operating
Expenses |
|
NOI
|
||||||||||||
Same store (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Los Angeles
|
|
$
|
181,849
|
|
|
$
|
52,847
|
|
|
$
|
129,002
|
|
|
$
|
171,169
|
|
|
$
|
52,082
|
|
|
$
|
119,087
|
|
San Diego
|
|
43,306
|
|
|
11,696
|
|
|
31,610
|
|
|
40,874
|
|
|
11,417
|
|
|
29,457
|
|
||||||
Orange County
|
|
39,116
|
|
|
9,332
|
|
|
29,784
|
|
|
36,922
|
|
|
9,327
|
|
|
27,595
|
|
||||||
Subtotal – Southern California
|
|
264,271
|
|
|
73,875
|
|
|
190,396
|
|
|
248,965
|
|
|
72,826
|
|
|
176,139
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
New York
|
|
227,736
|
|
|
78,629
|
|
|
149,107
|
|
|
222,210
|
|
|
77,223
|
|
|
144,987
|
|
||||||
Washington D.C.
|
|
210,416
|
|
|
62,296
|
|
|
148,120
|
|
|
208,247
|
|
|
62,646
|
|
|
145,601
|
|
||||||
San Francisco
|
|
182,485
|
|
|
44,428
|
|
|
138,057
|
|
|
168,047
|
|
|
42,909
|
|
|
125,138
|
|
||||||
Boston
|
|
123,890
|
|
|
34,272
|
|
|
89,618
|
|
|
120,294
|
|
|
36,320
|
|
|
83,974
|
|
||||||
Seattle
|
|
75,565
|
|
|
21,392
|
|
|
54,173
|
|
|
71,250
|
|
|
19,868
|
|
|
51,382
|
|
||||||
All Other Markets
|
|
14,754
|
|
|
5,992
|
|
|
8,762
|
|
|
14,104
|
|
|
6,374
|
|
|
7,730
|
|
||||||
Total same store
|
|
1,099,117
|
|
|
320,884
|
|
|
778,233
|
|
|
1,053,117
|
|
|
318,166
|
|
|
734,951
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-same store/other (2) (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Los Angeles
|
|
16,460
|
|
|
5,726
|
|
|
10,734
|
|
|
13,825
|
|
|
4,766
|
|
|
9,059
|
|
||||||
Orange County
|
|
2,358
|
|
|
685
|
|
|
1,673
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Subtotal – Southern California
|
|
18,818
|
|
|
6,411
|
|
|
12,407
|
|
|
13,825
|
|
|
4,766
|
|
|
9,059
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
New York
|
|
15,714
|
|
|
7,533
|
|
|
8,181
|
|
|
1,291
|
|
|
1,453
|
|
|
(162
|
)
|
||||||
Washington D.C.
|
|
1,818
|
|
|
346
|
|
|
1,472
|
|
|
2,062
|
|
|
380
|
|
|
1,682
|
|
||||||
San Francisco
|
|
13,328
|
|
|
4,710
|
|
|
8,618
|
|
|
640
|
|
|
615
|
|
|
25
|
|
||||||
Boston
|
|
5,542
|
|
|
1,415
|
|
|
4,127
|
|
|
3,375
|
|
|
782
|
|
|
2,593
|
|
||||||
Seattle
|
|
12,584
|
|
|
3,035
|
|
|
9,549
|
|
|
4,003
|
|
|
1,090
|
|
|
2,913
|
|
||||||
Other (3)
|
|
44,183
|
|
|
18,749
|
|
|
25,434
|
|
|
262,801
|
|
|
84,864
|
|
|
177,937
|
|
||||||
Total non-same store/other
|
|
111,987
|
|
|
42,199
|
|
|
69,788
|
|
|
287,997
|
|
|
93,950
|
|
|
194,047
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
|
$
|
1,211,104
|
|
|
$
|
363,083
|
|
|
$
|
848,021
|
|
|
$
|
1,341,114
|
|
|
$
|
412,116
|
|
|
$
|
928,998
|
|
(1)
|
Same store primarily includes all properties acquired or completed that are stabilized prior to January 1, 2015, less properties subsequently sold, which represented
72,494
apartment units.
|
(2)
|
Non-same store primarily includes properties acquired after January 1, 2015, plus any properties in lease-up and not stabilized as of January 1, 2015.
|
(3)
|
Other includes development, other corporate operations and operations prior to sale for properties sold from 2014 through 2016 that do not meet the new discontinued operations criteria.
|
|
|
Quarter Ended June 30, 2016
|
|
Quarter Ended June 30, 2015
|
||||||||||||||||||||
|
|
Rental
Income |
|
Operating
Expenses |
|
NOI
|
|
Rental
Income |
|
Operating
Expenses |
|
NOI
|
||||||||||||
Same store (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Los Angeles
|
|
$
|
91,699
|
|
|
$
|
26,489
|
|
|
$
|
65,210
|
|
|
$
|
86,515
|
|
|
$
|
25,893
|
|
|
$
|
60,622
|
|
San Diego
|
|
21,877
|
|
|
5,861
|
|
|
16,016
|
|
|
20,643
|
|
|
5,756
|
|
|
14,887
|
|
||||||
Orange County
|
|
19,802
|
|
|
4,599
|
|
|
15,203
|
|
|
18,601
|
|
|
4,639
|
|
|
13,962
|
|
||||||
Subtotal – Southern California
|
|
133,378
|
|
|
36,949
|
|
|
96,429
|
|
|
125,759
|
|
|
36,288
|
|
|
89,471
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
New York
|
|
114,532
|
|
|
38,487
|
|
|
76,045
|
|
|
111,885
|
|
|
37,716
|
|
|
74,169
|
|
||||||
Washington D.C.
|
|
106,148
|
|
|
30,871
|
|
|
75,277
|
|
|
104,907
|
|
|
30,609
|
|
|
74,298
|
|
||||||
San Francisco
|
|
91,811
|
|
|
22,230
|
|
|
69,581
|
|
|
85,224
|
|
|
21,390
|
|
|
63,834
|
|
||||||
Boston
|
|
62,272
|
|
|
16,848
|
|
|
45,424
|
|
|
60,467
|
|
|
17,470
|
|
|
42,997
|
|
||||||
Seattle
|
|
40,401
|
|
|
11,344
|
|
|
29,057
|
|
|
38,103
|
|
|
10,564
|
|
|
27,539
|
|
||||||
All Other Markets
|
|
7,480
|
|
|
2,840
|
|
|
4,640
|
|
|
7,137
|
|
|
2,849
|
|
|
4,288
|
|
||||||
Total same store
|
|
556,022
|
|
|
159,569
|
|
|
396,453
|
|
|
533,482
|
|
|
156,886
|
|
|
376,596
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-same store/other (2) (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Los Angeles
|
|
9,198
|
|
|
3,021
|
|
|
6,177
|
|
|
6,505
|
|
|
2,382
|
|
|
4,123
|
|
||||||
Orange County
|
|
1,201
|
|
|
350
|
|
|
851
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Subtotal – Southern California
|
|
10,399
|
|
|
3,371
|
|
|
7,028
|
|
|
6,505
|
|
|
2,382
|
|
|
4,123
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
New York
|
|
8,628
|
|
|
3,898
|
|
|
4,730
|
|
|
1,006
|
|
|
1,021
|
|
|
(15
|
)
|
||||||
Washington D.C.
|
|
859
|
|
|
166
|
|
|
693
|
|
|
1,017
|
|
|
183
|
|
|
834
|
|
||||||
San Francisco
|
|
8,043
|
|
|
2,647
|
|
|
5,396
|
|
|
524
|
|
|
394
|
|
|
130
|
|
||||||
Boston
|
|
2,909
|
|
|
698
|
|
|
2,211
|
|
|
2,433
|
|
|
580
|
|
|
1,853
|
|
||||||
Seattle
|
|
4,827
|
|
|
1,164
|
|
|
3,663
|
|
|
68
|
|
|
88
|
|
|
(20
|
)
|
||||||
Other (3)
|
|
3,252
|
|
|
2,209
|
|
|
1,043
|
|
|
131,473
|
|
|
39,590
|
|
|
91,883
|
|
||||||
Total non-same store/other
|
|
38,917
|
|
|
14,153
|
|
|
24,764
|
|
|
143,026
|
|
|
44,238
|
|
|
98,788
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
|
$
|
594,939
|
|
|
$
|
173,722
|
|
|
$
|
421,217
|
|
|
$
|
676,508
|
|
|
$
|
201,124
|
|
|
$
|
475,384
|
|
(1)
|
Same store primarily includes all properties acquired or completed that are stabilized prior to April 1, 2015, less properties subsequently sold, which represented
72,781
apartment units.
|
(2)
|
Non-same store primarily includes properties acquired after April 1, 2015, plus any properties in lease-up and not stabilized as of April 1, 2015.
|
(3)
|
Other includes development, other corporate operations and operations prior to sale for properties sold from 2014 through 2016 that do not meet the new discontinued operations criteria.
|
|
|
Six Months Ended June 30, 2016
|
||||||
|
|
Total Assets
|
|
Capital Expenditures
|
||||
Same store (1)
|
|
|
|
|
|
|
||
Los Angeles
|
|
$
|
2,550,146
|
|
|
$
|
11,718
|
|
San Diego
|
|
480,150
|
|
|
2,465
|
|
||
Orange County
|
|
265,300
|
|
|
3,741
|
|
||
Subtotal – Southern California
|
|
3,295,596
|
|
|
17,924
|
|
||
|
|
|
|
|
||||
New York
|
|
4,314,790
|
|
|
9,838
|
|
||
Washington D.C.
|
|
3,965,195
|
|
|
13,191
|
|
||
San Francisco
|
|
2,501,535
|
|
|
10,250
|
|
||
Boston
|
|
1,789,339
|
|
|
8,285
|
|
||
Seattle
|
|
1,045,598
|
|
|
4,800
|
|
||
All Other Markets
|
|
78,771
|
|
|
594
|
|
||
Total same store
|
|
16,990,824
|
|
|
64,882
|
|
||
|
|
|
|
|
||||
Non-same store/other (2) (3)
|
|
|
|
|
||||
Los Angeles
|
|
455,857
|
|
|
5,803
|
|
||
Orange County
|
|
76,337
|
|
|
26
|
|
||
Subtotal – Southern California
|
|
532,194
|
|
|
5,829
|
|
||
|
|
|
|
|
||||
New York
|
|
436,213
|
|
|
33
|
|
||
Washington D.C.
|
|
45,869
|
|
|
308
|
|
||
San Francisco
|
|
951,966
|
|
|
261
|
|
||
Boston
|
|
169,544
|
|
|
357
|
|
||
Seattle
|
|
331,810
|
|
|
432
|
|
||
Other (3)
|
|
1,771,502
|
|
|
2,348
|
|
||
Total non-same store/other
|
|
4,239,098
|
|
|
9,568
|
|
||
Total
|
|
$
|
21,229,922
|
|
|
$
|
74,450
|
|
(1)
|
Same store primarily includes all properties acquired or completed that are stabilized prior to January 1, 2015, less properties subsequently sold, which represented
72,494
apartment units.
|
(2)
|
Non-same store primarily includes properties acquired after January 1, 2015, plus any properties in lease-up and not stabilized as of January 1, 2015.
|
(3)
|
Other includes development, other corporate operations and capital expenditures for properties sold.
|
14.
|
Subsequent Events/Other
|
•
|
Sold
one
wholly-owned property consisting of
44
apartment units for
$22.0 million
;
|
•
|
Sold
one
land parcel for approximately
$30.0 million
;
|
•
|
Sold
one
unconsolidated partially owned property (Waterton Tenside) consisting of
336
apartment units for
$74.5 million
, paid off
$29.1 million
of mortgage debt at closing and the Company received approximately
$11.9 million
for its share of the net sales proceeds; and
|
•
|
Repaid
$8.6 million
of mortgage debt.
|
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 or higher than expected operating expenses. 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 owned housing/condominiums, increasing portions of owned housing/condominium 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 typically more 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 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
three
consolidated apartment properties consisting of
479
apartment units for
$204.1 million
at a weighted average Acquisition Cap Rate (see definition below) of
4.9%
;
|
•
|
Sold
83
consolidated apartment properties consisting of
26,890
apartment units for
$6.4 billion
, which includes the sale of the Starwood Portfolio consisting of 72 consolidated rental properties containing 23,262 apartment units for $5.365 billion, at a weighted average Disposition Yield (see definition below) of
5.3%
and generating an Unlevered IRR (see definition below) of
11.8%
; and
|
•
|
Sold its entire interest in the management contracts and related rights associated with the military housing ventures at Joint Base Lewis McChord consisting of 5,161 apartment units for approximately $63.3 million.
|
•
|
Acquisition Cap Rate – NOI that the Company anticipates receiving in the next 12 months (or the year two or three stabilized NOI for properties that are in lease-up at acquisition) less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $100-$450 per apartment unit depending on the age and condition of the asset) divided by the gross purchase price of the asset. The weighted average Acquisition Cap Rate for acquired properties is weighted based on the projected NOI streams and the relative purchase price for each respective property.
|
•
|
Disposition Yield – NOI that the Company anticipates giving up in the next 12 months less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $100-$450 per apartment unit depending on the age and condition of the asset) divided by the gross sale price of the asset. The weighted average Disposition Yield for sold properties is weighted based on the projected NOI streams and the relative sales price for each respective property.
|
•
|
Unlevered Internal Rate of Return (“IRR”) – The Unlevered IRR on sold properties refers to the internal rate of return calculated by the Company based on the timing and amount of (i) total revenue earned during the period owned by the Company and (ii) the gross sales price net of selling costs, offset by (iii) the undepreciated capital cost of the properties at the time of sale and (iv) total direct property operating expenses (including real estate taxes and insurance) incurred during the period owned by the Company. Each of the items (i), (ii), (iii) and (iv) is calculated in accordance with GAAP.
|
|
|
Six Months Ended
|
|
Quarter Ended
|
||||||||
|
|
June 30, 2016
|
|
June 30, 2016
|
||||||||
|
|
Properties
|
|
Apartment
Units |
|
Properties
|
|
Apartment
Units |
||||
Same Store Properties at Beginning of Period
|
|
358
|
|
|
96,286
|
|
|
291
|
|
|
73,222
|
|
2014 acquisitions
|
|
4
|
|
|
1,011
|
|
|
—
|
|
|
—
|
|
2016 dispositions
|
|
(83
|
)
|
|
(26,890
|
)
|
|
(3
|
)
|
|
(728
|
)
|
2016 dispositions not yet included in same store
|
|
2
|
|
|
396
|
|
|
—
|
|
|
—
|
|
Lease-up properties stabilized
|
|
7
|
|
|
1,690
|
|
|
1
|
|
|
287
|
|
Other
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
Same Store Properties at June 30, 2016
|
|
288
|
|
|
72,494
|
|
|
289
|
|
|
72,781
|
|
|
|
Six Months Ended
|
|
Quarter Ended
|
||||||||
|
|
June 30, 2016
|
|
June 30, 2016
|
||||||||
|
|
Properties
|
|
Apartment
Units |
|
Properties
|
|
Apartment
Units |
||||
Same Store
|
|
288
|
|
|
72,494
|
|
|
289
|
|
|
72,781
|
|
|
|
|
|
|
|
|
|
|
||||
Non-Same Store:
|
|
|
|
|
|
|
|
|
||||
2016 acquisitions
|
|
3
|
|
|
479
|
|
|
3
|
|
|
479
|
|
2015 acquisitions
|
|
4
|
|
|
625
|
|
|
4
|
|
|
625
|
|
Master-Leased properties (1)
|
|
3
|
|
|
853
|
|
|
3
|
|
|
853
|
|
Lease-up properties not yet stabilized (2)
|
|
12
|
|
|
3,440
|
|
|
11
|
|
|
3,153
|
|
Properties removed from same store (3)
|
|
1
|
|
|
285
|
|
|
1
|
|
|
285
|
|
Other
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
Total Non-Same Store
|
|
24
|
|
|
5,683
|
|
|
23
|
|
|
5,396
|
|
Unconsolidated properties
|
|
3
|
|
|
1,281
|
|
|
3
|
|
|
1,281
|
|
Total Properties and Apartment Units
|
|
315
|
|
|
79,458
|
|
|
315
|
|
|
79,458
|
|
(1)
|
Includes three properties containing 853 apartment units 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.
|
(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)
|
Represents one property containing 285 apartment units (Playa Pacifica in Hermosa Beach, California) which was removed from the same store portfolio in 2015 due to a major renovation in which significant portions of the property were taken offline for extended time periods. As of
June 30, 2016
, the property had an occupancy of only
56.0%
. This property will not return to the same store portfolio until it is stabilized for all of the current and comparable periods presented.
|
June YTD 2016 vs. June YTD 2015
|
||||||||||||||||||||||
Same Store Results/Statistics for 72,494 Same Store Apartment Units
|
||||||||||||||||||||||
$ in thousands (except for Average Rental Rate)
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Results
|
|
Statistics
|
||||||||||||||||||
|
|
|
|
|
|
|
|
Average
Rental
Rate (1)
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
Physical
Occupancy (2) |
|
|
|||||||||||
Description
|
|
Revenues
|
|
Expenses
|
|
NOI
|
|
|
|
Turnover (3)
|
||||||||||||
YTD 2016
|
|
$
|
1,099,117
|
|
|
$
|
320,884
|
|
|
$
|
778,233
|
|
|
$
|
2,529
|
|
|
96.1
|
%
|
|
25.5
|
%
|
YTD 2015
|
|
$
|
1,053,117
|
|
|
$
|
318,166
|
|
|
$
|
734,951
|
|
|
$
|
2,425
|
|
|
96.1
|
%
|
|
25.0
|
%
|
Change
|
|
$
|
46,000
|
|
|
$
|
2,718
|
|
|
$
|
43,282
|
|
|
$
|
104
|
|
|
0.0
|
%
|
|
0.5
|
%
|
Change
|
|
4.4
|
%
|
|
0.9
|
%
|
|
5.9
|
%
|
|
4.3
|
%
|
|
|
|
|
(1)
|
Average Rental Rate – Total residential rental revenues divided by the weighted average occupied apartment units for the reporting period presented.
|
(2)
|
Physical Occupancy – The weighted average occupied apartment units for the reporting period divided by the average of total apartment units available for rent for the reporting period.
|
(3)
|
Turnover – Total residential move-outs divided by total residential apartment units, including inter-property and intra-property transfers.
|
June YTD 2016 vs. June YTD 2015
|
||||||||||||||||||
Same Store Operating Expenses for 72,494 Same Store Apartment Units
|
||||||||||||||||||
$ in thousands
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Actual
YTD 2016
|
|
Actual
YTD 2015 |
|
$
Change |
|
%
Change |
|
% of Actual
YTD 2016 Operating Expenses |
||||||||
Real estate taxes
|
|
$
|
132,938
|
|
|
$
|
126,017
|
|
|
$
|
6,921
|
|
|
5.5
|
%
|
|
41.4
|
%
|
On-site payroll (1)
|
|
71,975
|
|
|
71,752
|
|
|
223
|
|
|
0.3
|
%
|
|
22.4
|
%
|
|||
Utilities (2)
|
|
45,281
|
|
|
49,277
|
|
|
(3,996
|
)
|
|
(8.1
|
%)
|
|
14.1
|
%
|
|||
Repairs and maintenance (3)
|
|
40,924
|
|
|
41,402
|
|
|
(478
|
)
|
|
(1.2
|
%)
|
|
12.8
|
%
|
|||
Insurance
|
|
8,673
|
|
|
8,354
|
|
|
319
|
|
|
3.8
|
%
|
|
2.7
|
%
|
|||
Leasing and advertising
|
|
4,228
|
|
|
4,211
|
|
|
17
|
|
|
0.4
|
%
|
|
1.3
|
%
|
|||
Other on-site operating expenses (4)
|
|
16,865
|
|
|
17,153
|
|
|
(288
|
)
|
|
(1.7
|
%)
|
|
5.3
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Same store operating expenses
|
|
$
|
320,884
|
|
|
$
|
318,166
|
|
|
$
|
2,718
|
|
|
0.9
|
%
|
|
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 and maintenance costs.
|
(4)
|
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.
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(Amounts in thousands)
|
||||||
Rental income:
|
|
|
|
|
||||
Same store
|
|
$
|
1,099,117
|
|
|
$
|
1,053,117
|
|
Non-same store
|
|
111,987
|
|
|
287,997
|
|
||
Total rental income
|
|
1,211,104
|
|
|
1,341,114
|
|
||
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
||||
Same store
|
|
320,884
|
|
|
318,166
|
|
||
Non-same store
|
|
42,199
|
|
|
93,950
|
|
||
Total operating expenses
|
|
363,083
|
|
|
412,116
|
|
||
|
|
|
|
|
||||
NOI:
|
|
|
|
|
||||
Same store
|
|
778,233
|
|
|
734,951
|
|
||
Non-same store
|
|
69,788
|
|
|
194,047
|
|
||
Total NOI
|
|
848,021
|
|
|
928,998
|
|
||
|
|
|
|
|
||||
Adjustments:
|
|
|
|
|
||||
Fee and asset management revenue
|
|
3,133
|
|
|
4,369
|
|
||
Property management
|
|
(44,486
|
)
|
|
(44,557
|
)
|
||
General and administrative
|
|
(35,013
|
)
|
|
(35,421
|
)
|
||
Depreciation
|
|
(349,012
|
)
|
|
(388,803
|
)
|
||
Operating income
|
|
$
|
422,643
|
|
|
$
|
464,586
|
|
•
|
The lost NOI from 2015 and 2016 dispositions of $151.5 million;
|
•
|
A decrease in operating activities from other miscellaneous properties (including three master-leased properties) of $1.7 million;
|
•
|
A decrease in operating activities from other miscellaneous operations; and
|
•
|
A partial offset from development and newly stabilized development properties in lease-up of $22.9 million and operating properties acquired in 2015 and 2016 of $7.7 million.
|
Second Quarter 2016 vs. Second Quarter 2015
|
||||||||||||||||||||||
Same Store Results/Statistics for 72,781 Same Store Apartment Units
|
||||||||||||||||||||||
$ in thousands (except for Average Rental Rate)
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Results
|
|
Statistics
|
||||||||||||||||||
|
|
|
|
|
|
|
|
Average
Rental
Rate (1)
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
Physical
Occupancy (2) |
|
|
|||||||||||
Description
|
|
Revenues
|
|
Expenses
|
|
NOI
|
|
|
|
Turnover (3)
|
||||||||||||
Q2 2016
|
|
$
|
556,022
|
|
|
$
|
159,569
|
|
|
$
|
396,453
|
|
|
$
|
2,544
|
|
|
96.3
|
%
|
|
14.8
|
%
|
Q2 2015
|
|
$
|
533,482
|
|
|
$
|
156,886
|
|
|
$
|
376,596
|
|
|
$
|
2,445
|
|
|
96.2
|
%
|
|
14.1
|
%
|
Change
|
|
$
|
22,540
|
|
|
$
|
2,683
|
|
|
$
|
19,857
|
|
|
$
|
99
|
|
|
0.1
|
%
|
|
0.7
|
%
|
Change
|
|
4.2
|
%
|
|
1.7
|
%
|
|
5.3
|
%
|
|
4.0
|
%
|
|
|
|
|
(1)
|
Average Rental Rate – Total residential rental revenues divided by the weighted average occupied apartment units for the reporting period presented.
|
(2)
|
Physical Occupancy – The weighted average occupied apartment units for the reporting period divided by the average of total apartment units available for rent for the reporting period.
|
(3)
|
Turnover – Total residential move-outs divided by total residential apartment units, including inter-property and intra-property transfers.
|
Second Quarter 2016 vs. Second Quarter 2015
|
||||||||||||||||||
Same Store Operating Expenses for 72,781 Same Store Apartment Units
|
||||||||||||||||||
$ in thousands
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Actual
Q2 2016
|
|
Actual
Q2 2015 |
|
$
Change |
|
%
Change |
|
% of Actual
Q2 2016 Operating Expenses |
||||||||
Real estate taxes
|
|
$
|
66,655
|
|
|
$
|
63,237
|
|
|
$
|
3,418
|
|
|
5.4
|
%
|
|
41.8
|
%
|
On-site payroll (1)
|
|
35,667
|
|
|
35,401
|
|
|
266
|
|
|
0.8
|
%
|
|
22.3
|
%
|
|||
Utilities (2)
|
|
21,317
|
|
|
22,888
|
|
|
(1,571
|
)
|
|
(6.9
|
%)
|
|
13.4
|
%
|
|||
Repairs and maintenance (3)
|
|
21,798
|
|
|
21,010
|
|
|
788
|
|
|
3.8
|
%
|
|
13.7
|
%
|
|||
Insurance
|
|
4,350
|
|
|
4,191
|
|
|
159
|
|
|
3.8
|
%
|
|
2.7
|
%
|
|||
Leasing and advertising
|
|
2,111
|
|
|
2,145
|
|
|
(34
|
)
|
|
(1.6
|
%)
|
|
1.3
|
%
|
|||
Other on-site operating expenses (4)
|
|
7,671
|
|
|
8,014
|
|
|
(343
|
)
|
|
(4.3
|
%)
|
|
4.8
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Same store operating expenses
|
|
$
|
159,569
|
|
|
$
|
156,886
|
|
|
$
|
2,683
|
|
|
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 and maintenance costs.
|
(4)
|
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 June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
|
|
(Amounts in thousands)
|
||||||
Rental income:
|
|
|
|
|
||||
Same store
|
|
$
|
556,022
|
|
|
$
|
533,482
|
|
Non-same store
|
|
38,917
|
|
|
143,026
|
|
||
Total rental income
|
|
594,939
|
|
|
676,508
|
|
||
|
|
|
|
|
||||
Operating expenses:
|
|
|
|
|
||||
Same store
|
|
159,569
|
|
|
156,886
|
|
||
Non-same store
|
|
14,153
|
|
|
44,238
|
|
||
Total operating expenses
|
|
173,722
|
|
|
201,124
|
|
||
|
|
|
|
|
||||
NOI:
|
|
|
|
|
||||
Same store
|
|
396,453
|
|
|
376,596
|
|
||
Non-same store
|
|
24,764
|
|
|
98,788
|
|
||
Total NOI
|
|
421,217
|
|
|
475,384
|
|
||
|
|
|
|
|
||||
Adjustments:
|
|
|
|
|
||||
Fee and asset management revenue
|
|
215
|
|
|
2,604
|
|
||
Property management
|
|
(20,991
|
)
|
|
(21,792
|
)
|
||
General and administrative
|
|
(18,296
|
)
|
|
(15,659
|
)
|
||
Depreciation
|
|
(176,127
|
)
|
|
(194,282
|
)
|
||
Operating income
|
|
$
|
206,018
|
|
|
$
|
246,255
|
|
•
|
The lost NOI from 2015 and 2016 dispositions of $86.5 million;
|
•
|
A decrease in operating activities from other miscellaneous operations; and
|
•
|
A partial offset from development and newly stabilized development properties in lease-up of $12.6 million and operating properties acquired in 2015 and 2016 of $4.4 million.
|
•
|
Disposed of 83 consolidated rental properties (including the Starwood Portfolio) and two land parcels, receiving net proceeds of approximately
$6.4 billion
;
|
•
|
Disposed of its entire interest in the management contracts and related rights associated with the military housing ventures at Joint Base Lewis McChord along with the sale of certain other investments, receiving net proceeds of approximately $68.5 million; and
|
•
|
Issued approximately
0.6 million
Common Shares related to share option exercises and ESPP purchases and received net proceeds of
$28.2 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 three consolidated rental properties for approximately
$160.7 million
in cash;
|
•
|
Invest
$312.9 million
primarily in development projects;
|
•
|
Pay a special dividend of $8.00 per share/unit (approximately $3.0 billion) on March 10, 2016 to shareholders/unitholders of record as of March 3, 2016;
|
•
|
Repay
$561.2 million
of mortgage loans and incur a prepayment penalty of approximately $29.5 million;
|
•
|
Repay
$500.0 million
of
5.125%
unsecured notes maturing in
2016
and incur a prepayment penalty of approximately
$1.4 million
;
|
•
|
Repay
$400.0 million
of
5.375%
unsecured notes maturing in
2016
and incur a prepayment penalty of approximately
$9.5 million
;
|
•
|
Repay
$255.9 million
of
5.750%
unsecured notes maturing in
2017
and incur a prepayment penalty of approximately
$16.5 million
;
|
•
|
Repay
$46.1 million
of
7.125%
unsecured notes maturing in
2017
and incur a prepayment penalty of approximately
$4.6 million
;
|
•
|
Repay
$250.0 million
of
4.625%
unsecured notes maturing in
2021
and incur a prepayment penalty of approximately
$31.6 million
; and
|
•
|
Repay
$48.0 million
of
7.570%
unsecured notes maturing in
2026
and incur a prepayment penalty of approximately
$19.3 million
.
|
Debt Summary as of June 30, 2016
|
|||||||||||||
(Amounts in thousands)
|
|||||||||||||
|
|
Amounts (1)
|
|
% of Total
|
|
Weighted
Average Rates (1) |
|
Weighted
Average Maturities (years) |
|||||
Secured
|
|
$
|
4,147,999
|
|
|
48.7
|
%
|
|
4.34
|
%
|
|
6.9
|
|
Unsecured
|
|
4,362,995
|
|
|
51.3
|
%
|
|
4.55
|
%
|
|
10.6
|
|
|
Total
|
|
$
|
8,510,994
|
|
|
100.0
|
%
|
|
4.45
|
%
|
|
8.8
|
|
|
|
|
|
|
|
|
|
|
|||||
Fixed Rate Debt:
|
|
|
|
|
|
|
|
|
|||||
Secured – Conventional
|
|
$
|
3,505,691
|
|
|
41.2
|
%
|
|
4.97
|
%
|
|
5.4
|
|
Unsecured – Public
|
|
3,902,878
|
|
|
45.9
|
%
|
|
4.99
|
%
|
|
11.4
|
|
|
Fixed Rate Debt
|
|
7,408,569
|
|
|
87.1
|
%
|
|
4.98
|
%
|
|
8.6
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Floating Rate Debt:
|
|
|
|
|
|
|
|
|
|||||
Secured – Conventional
|
|
7,894
|
|
|
0.1
|
%
|
|
0.47
|
%
|
|
16.0
|
|
|
Secured – Tax Exempt
|
|
634,414
|
|
|
7.4
|
%
|
|
0.88
|
%
|
|
14.8
|
|
|
Unsecured – Public (2)
|
|
460,117
|
|
|
5.4
|
%
|
|
1.21
|
%
|
|
3.1
|
|
|
Unsecured – Revolving Credit Facility
|
|
—
|
|
|
—
|
|
|
1.34
|
%
|
|
1.8
|
|
|
Unsecured – Commercial Paper Program (3)
|
|
—
|
|
|
—
|
|
|
0.96
|
%
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Floating Rate Debt
|
|
1,102,425
|
|
|
12.9
|
%
|
|
1.01
|
%
|
|
10.2
|
|
|
Total
|
|
$
|
8,510,994
|
|
|
100.0
|
%
|
|
4.45
|
%
|
|
8.8
|
|
(1)
|
Net of the effect of any derivative instruments. Weighted average rates are for the six months ended
June 30, 2016
.
|
(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%.
|
(3)
|
As of
June 30, 2016
, there was no commercial paper outstanding.
|
Debt Maturity Schedule as of June 30, 2016
|
|||||||||||||||||||||
(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) |
|||||||||
2016
|
|
$
|
3,842
|
|
|
$
|
—
|
|
|
$
|
3,842
|
|
|
0.1
|
%
|
|
4.69
|
%
|
|
4.69
|
%
|
2017
|
|
605,397
|
|
|
456
|
|
|
605,853
|
|
|
7.1
|
%
|
|
6.19
|
%
|
|
6.18
|
%
|
|||
2018
|
|
83,695
|
|
|
97,660
|
|
|
181,355
|
|
|
2.1
|
%
|
|
5.57
|
%
|
|
3.58
|
%
|
|||
2019
|
|
807,680
|
|
|
482,811
|
|
|
1,290,491
|
|
|
15.2
|
%
|
|
5.47
|
%
|
|
3.86
|
%
|
|||
2020
|
|
1,679,590
|
|
|
809
|
|
|
1,680,399
|
|
|
19.8
|
%
|
|
5.49
|
%
|
|
5.49
|
%
|
|||
2021
|
|
946,257
|
|
|
856
|
|
|
947,113
|
|
|
11.1
|
%
|
|
4.63
|
%
|
|
4.63
|
%
|
|||
2022
|
|
266,447
|
|
|
905
|
|
|
267,352
|
|
|
3.2
|
%
|
|
3.27
|
%
|
|
3.26
|
%
|
|||
2023
|
|
1,327,965
|
|
|
956
|
|
|
1,328,921
|
|
|
15.6
|
%
|
|
3.74
|
%
|
|
3.74
|
%
|
|||
2024
|
|
2,498
|
|
|
1,010
|
|
|
3,508
|
|
|
0.0
|
%
|
|
4.97
|
%
|
|
3.67
|
%
|
|||
2025
|
|
452,625
|
|
|
1,069
|
|
|
453,694
|
|
|
5.3
|
%
|
|
3.38
|
%
|
|
3.38
|
%
|
|||
2026+
|
|
1,271,816
|
|
|
582,898
|
|
|
1,854,714
|
|
|
21.8
|
%
|
|
4.76
|
%
|
|
3.41
|
%
|
|||
Deferred Financing Costs
|
|
(31,712
|
)
|
|
(9,645
|
)
|
|
(41,357
|
)
|
|
(0.5
|
%)
|
|
N/A
|
|
|
N/A
|
|
|||
Premium/(Discount)
|
|
(7,531
|
)
|
|
(57,360
|
)
|
|
(64,891
|
)
|
|
(0.8
|
%)
|
|
N/A
|
|
|
N/A
|
|
|||
Total
|
|
$
|
7,408,569
|
|
|
$
|
1,102,425
|
|
|
$
|
8,510,994
|
|
|
100.0
|
%
|
|
4.79
|
%
|
|
4.26
|
%
|
(1)
|
Net of the effect of any derivative instruments. Weighted average rates are as of
June 30, 2016
.
|
Unsecured Debt Summary as of June 30, 2016
|
||||||||
(Amounts in thousands)
|
||||||||
|
|
|
|
|
|
|
||
|
|
Interest
Rate
|
|
Due
Date |
|
Amount
|
||
Fixed Rate Notes:
|
|
|
|
|
|
|
||
|
|
5.750%
|
|
06/15/17
|
|
$
|
394,077
|
|
|
|
7.125%
|
|
10/15/17
|
|
103,898
|
|
|
|
|
4.750%
|
|
07/15/20
|
|
600,000
|
|
|
|
|
4.625%
|
|
12/15/21
|
|
750,000
|
|
|
|
|
3.000%
|
|
04/15/23
|
|
500,000
|
|
|
|
|
3.375%
|
|
06/01/25
|
|
450,000
|
|
|
|
|
7.570%
|
|
08/15/26
|
|
92,025
|
|
|
|
|
4.500%
|
|
07/01/44
|
|
750,000
|
|
|
|
|
4.500%
|
|
06/01/45
|
|
300,000
|
|
|
Deferred Financing Costs and Unamortized (Discount)
|
|
|
|
|
|
(37,122
|
)
|
|
|
|
|
|
|
|
3,902,878
|
|
|
Floating Rate Notes:
|
|
|
|
|
|
|
||
|
|
(1)
|
|
07/01/19
|
|
450,000
|
|
|
Fair Value Derivative Adjustments
|
|
(1)
|
|
07/01/19
|
|
12,045
|
|
|
Deferred Financing Costs and Unamortized (Discount)
|
|
|
|
|
|
(1,928
|
)
|
|
|
|
|
|
|
|
460,117
|
|
|
|
|
|
|
|
|
|
||
Line of Credit and Commercial Paper:
|
|
|
|
|
|
|
||
Revolving Credit Facility (2) (3)
|
|
LIBOR+0.95%
|
|
04/01/18
|
|
—
|
|
|
Commercial Paper Program (2) (4)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
||
Total Unsecured Debt
|
|
|
|
|
|
$
|
4,362,995
|
|
(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/program is private. All other unsecured debt is public.
|
(3)
|
The interest rate on advances under the $2.5 billion revolving credit facility maturing April 1, 2018 will generally be LIBOR plus a spread (currently 0.95%) 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
June 30, 2016
, there was approximately
$2.48 billion
available on this facility (net of
$24.6 million
which was restricted/dedicated to support letters of credit).
|
(4)
|
The Company may borrow up to a maximum of
$500.0 million
on the commercial paper program subject to market conditions. The notes bear interest at various floating rates with a weighted average of
0.96%
for the six months ended
June 30, 2016
. No amounts were outstanding at
June 30, 2016
.
|
Equity Residential
|
|||||||||||||||||
Capital Structure as of June 30, 2016
|
|||||||||||||||||
(Amounts in thousands except for share/unit and per share amounts)
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||
Secured Debt
|
|
|
|
|
|
$
|
4,147,999
|
|
|
48.7
|
%
|
|
|
||||
Unsecured Debt
|
|
|
|
|
|
4,362,995
|
|
|
51.3
|
%
|
|
|
|||||
Total Debt
|
|
|
|
|
|
8,510,994
|
|
|
100.0
|
%
|
|
24.5
|
%
|
||||
Common Shares (includes Restricted Shares)
|
|
365,550,636
|
|
|
96.1
|
%
|
|
|
|
|
|
|
|||||
Units (includes OP Units and Restricted Units)
|
|
14,706,597
|
|
|
3.9
|
%
|
|
|
|
|
|
|
|||||
Total Shares and Units
|
|
380,257,233
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|||||
Common Share Price at June 30, 2016
|
|
$
|
68.88
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
26,192,118
|
|
|
99.9
|
%
|
|
|
|||||
Perpetual Preferred Equity (see below)
|
|
|
|
|
|
37,280
|
|
|
0.1
|
%
|
|
|
|||||
Total Equity
|
|
|
|
|
|
26,229,398
|
|
|
100.0
|
%
|
|
75.5
|
%
|
||||
Total Market Capitalization
|
|
|
|
|
|
$
|
34,740,392
|
|
|
|
|
100.0
|
%
|
Equity Residential
|
|||||||||||||||||
Perpetual Preferred Equity as of June 30, 2016
|
|||||||||||||||||
(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
|
|
745,600
|
|
|
$
|
37,280
|
|
|
$
|
4.145
|
|
|
$
|
3,091
|
|
Total Perpetual Preferred Equity
|
|
|
|
745,600
|
|
|
$
|
37,280
|
|
|
|
|
$
|
3,091
|
|
ERP Operating Limited Partnership
|
||||||||||||||
Capital Structure as of June 30, 2016
|
||||||||||||||
(Amounts in thousands except for unit and per unit amounts)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||
Secured Debt
|
|
|
|
$
|
4,147,999
|
|
|
48.7
|
%
|
|
|
|||
Unsecured Debt
|
|
|
|
4,362,995
|
|
|
51.3
|
%
|
|
|
||||
Total Debt
|
|
|
|
8,510,994
|
|
|
100.0
|
%
|
|
24.5
|
%
|
|||
Total outstanding Units
|
|
380,257,233
|
|
|
|
|
|
|
|
|||||
Common Share Price at June 30, 2016
|
|
$
|
68.88
|
|
|
|
|
|
|
|
||||
|
|
|
|
26,192,118
|
|
|
99.9
|
%
|
|
|
||||
Perpetual Preference Units (see below)
|
|
|
|
37,280
|
|
|
0.1
|
%
|
|
|
||||
Total Equity
|
|
|
|
26,229,398
|
|
|
100.0
|
%
|
|
75.5
|
%
|
|||
Total Market Capitalization
|
|
|
|
$
|
34,740,392
|
|
|
|
|
100.0
|
%
|
ERP Operating Limited Partnership
|
|||||||||||||||||
Perpetual Preference Units as of June 30, 2016
|
|||||||||||||||||
(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
|
|
745,600
|
|
|
$
|
37,280
|
|
|
$
|
4.145
|
|
|
$
|
3,091
|
|
Total Perpetual Preference Units
|
|
|
|
745,600
|
|
|
$
|
37,280
|
|
|
|
|
$
|
3,091
|
|
|
|
Standard & Poor's
|
|
Moody's
|
|
Fitch
|
ERPOP's long-term senior debt rating
|
|
A-
|
|
Baa1 (1)
|
|
A-
|
|
|
|
|
|
|
|
ERPOP's short-term commercial paper rating
|
|
A-2
|
|
P-2
|
|
F-2
|
|
|
|
|
|
|
|
EQR's long-term preferred equity rating
|
|
BBB
|
|
Baa2 (2)
|
|
BBB
|
(1)
|
Moody's rated ERPOP's long-term senior debt with a positive outlook.
|
(2)
|
Moody's rated EQR's long-term preferred equity with a positive outlook.
|
•
|
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 Six Months Ended June 30, 2016
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Total
Apartment Units (1) |
|
Replacements
(2) |
|
Avg. Per
Apartment Unit |
|
Building
Improvements (3) |
|
Avg. Per
Apartment Unit |
|
Total
|
|
Avg. Per
Apartment Unit |
|||||||||||||
Same Store Properties (4)
|
|
72,494
|
|
|
$
|
33,251
|
|
|
$
|
459
|
|
|
$
|
31,631
|
|
|
$
|
436
|
|
|
$
|
64,882
|
|
|
$
|
895
|
|
Non-Same Store Properties (5)
|
|
5,683
|
|
|
2,616
|
|
|
621
|
|
|
4,604
|
|
|
1,092
|
|
|
7,220
|
|
|
1,713
|
|
||||||
Other (6)
|
|
—
|
|
|
1,689
|
|
|
|
|
659
|
|
|
|
|
2,348
|
|
|
|
|||||||||
Total
|
|
78,177
|
|
|
$
|
37,556
|
|
|
|
|
$
|
36,894
|
|
|
|
|
$
|
74,450
|
|
|
|
(1)
|
Total Apartment Units – Excludes 1,281 unconsolidated apartment units for which capital expenditures to real estate are self-funded and do not consolidate into the Company's results.
|
(2)
|
Replacements – Includes new expenditures inside the apartment units such as appliances, mechanical equipment, fixtures and flooring, including carpeting. Replacements for same store properties also include $20.7 million spent during the six months ended
June 30, 2016
on apartment unit renovations/rehabs (primarily kitchens and baths) on 1,806 same store apartment units (equating to approximately $11,400 per apartment unit rehabbed) designed to reposition these assets for higher rental levels in their respective markets.
|
(3)
|
Building Improvements – Includes roof replacement, paving, amenities and common areas, building mechanical equipment systems, exterior painting and siding, major landscaping, vehicles and office and maintenance equipment.
|
(4)
|
Same Store Properties – Primarily includes all properties acquired or completed that are stabilized prior to January 1, 2015, less properties subsequently sold.
|
(5)
|
Non-Same Store Properties – Primarily includes all properties acquired during 2015 and 2016, plus any properties in lease-up and not stabilized as of January 1, 2015. Per apartment unit amounts are based on a weighted average of 4,214 apartment units.
|
(6)
|
Other – Primarily includes expenditures for properties sold and properties under development.
|
Payments Due by Year (in thousands)
|
||||||||||||||||||||||||||||||||
Contractual Obligations
|
|
Remaining 2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||||
Debt:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Principal (a)
|
|
$
|
3,842
|
|
|
$
|
605,853
|
|
|
$
|
181,355
|
|
|
$
|
1,290,491
|
|
|
$
|
1,680,399
|
|
|
$
|
947,113
|
|
|
$
|
3,801,941
|
|
|
$
|
8,510,994
|
|
Interest (b)
|
|
183,277
|
|
|
350,578
|
|
|
318,138
|
|
|
266,079
|
|
|
207,415
|
|
|
173,948
|
|
|
1,401,772
|
|
|
2,901,207
|
|
||||||||
Operating Leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Minimum Rent Payments (c)
|
|
7,904
|
|
|
15,748
|
|
|
15,740
|
|
|
15,594
|
|
|
15,185
|
|
|
14,943
|
|
|
825,162
|
|
|
910,276
|
|
||||||||
Other Long-Term Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Deferred Compensation (d)
|
|
525
|
|
|
1,387
|
|
|
1,722
|
|
|
1,128
|
|
|
1,079
|
|
|
1,079
|
|
|
4,383
|
|
|
11,303
|
|
||||||||
Total
|
|
$
|
195,548
|
|
|
$
|
973,566
|
|
|
$
|
516,955
|
|
|
$
|
1,573,292
|
|
|
$
|
1,904,078
|
|
|
$
|
1,137,083
|
|
|
$
|
6,033,258
|
|
|
$
|
12,333,780
|
|
(a)
|
Amounts include aggregate principal payments only.
|
(b)
|
Amounts include interest expected to be incurred on the Company’s secured and unsecured debt based on obligations outstanding at
June 30, 2016
and inclusive of capitalized interest. For floating rate debt, the current rate in effect for the most recent payment through
June 30, 2016
is assumed to be in effect through the respective maturity date of each instrument.
|
(c)
|
Minimum basic rent due for various office space the Company leases and fixed base rent due on ground leases for 11 properties.
|
(d)
|
Estimated payments to the Company's Chairman, Vice Chairman and one former CEO based on actual and planned retirement dates.
|
Funds From Operations and Normalized Funds From Operations
|
|||||||||||||||||
(Amounts in thousands)
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Six Months Ended June 30,
|
|
Quarter Ended June 30,
|
||||||||||||
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income
|
|
$
|
3,960,231
|
|
|
$
|
488,842
|
|
|
$
|
228,400
|
|
|
$
|
298,618
|
|
|
Net (income) attributable to Noncontrolling Interests – Partially Owned Properties
|
|
(1,545
|
)
|
|
(1,487
|
)
|
|
(781
|
)
|
|
(844
|
)
|
|||||
Preferred/preference distributions
|
|
(1,545
|
)
|
|
(1,724
|
)
|
|
(772
|
)
|
|
(833
|
)
|
|||||
Premium on redemption of Preferred Shares/Preference Units
|
|
—
|
|
|
(2,789
|
)
|
|
—
|
|
|
—
|
|
|||||
Net income available to Common Shares and Units / Units
|
|
3,957,141
|
|
|
482,842
|
|
|
226,847
|
|
|
296,941
|
|
|||||
|
|
|
|
|
|
|
|
|
|||||||||
Adjustments:
|
|
|
|
|
|
|
|
|
|||||||||
Depreciation
|
|
349,012
|
|
|
388,803
|
|
|
176,127
|
|
|
194,282
|
|
|||||
Depreciation – Non-real estate additions
|
|
(2,635
|
)
|
|
(2,524
|
)
|
|
(1,227
|
)
|
|
(1,263
|
)
|
|||||
Depreciation – Partially Owned Properties
|
|
(1,943
|
)
|
|
(2,162
|
)
|
|
(949
|
)
|
|
(1,083
|
)
|
|||||
Depreciation – Unconsolidated Properties
|
|
2,467
|
|
|
2,457
|
|
|
1,234
|
|
|
1,229
|
|
|||||
Net (gain) on sales of real estate properties
|
|
(3,780,835
|
)
|
|
(228,753
|
)
|
|
(57,356
|
)
|
|
(148,802
|
)
|
|||||
Discontinued operations:
|
|
|
|
|
|
|
|
|
|||||||||
Net (gain) on sales of discontinued operations
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
FFO available to Common Shares and Units / Units (1) (3) (4)
|
|
523,192
|
|
|
640,663
|
|
|
344,676
|
|
|
341,304
|
|
|||||
Adjustments:
|
|
|
|
|
|
|
|
|
|||||||||
Asset impairment and valuation allowances
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Property acquisition costs and write-off of pursuit costs
|
|
4,259
|
|
|
(14,890
|
)
|
|
1,175
|
|
|
(10,065
|
)
|
|||||
Debt extinguishment (gains) losses, including prepayment penalties, preferred
|
|
|
|
|
|
|
|
|
|||||||||
share/preference unit redemptions and non-cash convertible debt discounts
|
|
120,164
|
|
|
1,469
|
|
|
67
|
|
|
(4
|
)
|
|||||
(Gains) losses on sales of non-operating assets, net of income and other tax expense (benefit)
|
|
(66,878
|
)
|
|
(800
|
)
|
|
(54,600
|
)
|
|
(2,458
|
)
|
|||||
Other miscellaneous items
|
|
(897
|
)
|
|
(2,179
|
)
|
|
(959
|
)
|
|
(3,516
|
)
|
|||||
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)
|
|
$
|
579,840
|
|
|
$
|
624,263
|
|
|
$
|
290,359
|
|
|
$
|
325,261
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
FFO (1) (3)
|
|
$
|
524,737
|
|
|
$
|
645,176
|
|
|
$
|
345,448
|
|
|
$
|
342,137
|
|
|
Preferred/preference distributions
|
|
(1,545
|
)
|
|
(1,724
|
)
|
|
(772
|
)
|
|
(833
|
)
|
|||||
Premium on redemption of Preferred Shares/Preference Units
|
|
—
|
|
|
(2,789
|
)
|
|
—
|
|
|
—
|
|
|||||
FFO available to Common Shares and Units / Units (1) (3) (4)
|
|
$
|
523,192
|
|
|
$
|
640,663
|
|
|
$
|
344,676
|
|
|
$
|
341,304
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Normalized FFO (2) (3)
|
|
$
|
581,385
|
|
|
$
|
625,987
|
|
|
$
|
291,131
|
|
|
$
|
326,094
|
|
|
Preferred/preference distributions
|
|
(1,545
|
)
|
|
(1,724
|
)
|
|
(772
|
)
|
|
(833
|
)
|
|||||
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)
|
|
$
|
579,840
|
|
|
$
|
624,263
|
|
|
$
|
290,359
|
|
|
$
|
325,261
|
|
(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.
|
(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 sales, net of the effect of income tax benefits or expenses; and
|
•
|
other miscellaneous 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 GAAP. 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 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:
|
August 4, 2016
|
|
By:
|
|
/s/ Mark J. Parrell
|
|
|
|
|
|
Mark J. Parrell
|
|
|
|
|
|
Executive Vice President and
Chief Financial Officer
|
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
||
|
|
|
|
||
Date:
|
August 4, 2016
|
|
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:
|
August 4, 2016
|
|
By:
|
|
/s/ Mark J. Parrell
|
|
|
|
|
|
Mark J. Parrell
|
|
|
|
|
|
Executive Vice President and
Chief Financial Officer
|
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
||
|
|
|
|
||
Date:
|
August 4, 2016
|
|
By:
|
|
/s/ Ian S. Kaufman
|
|
|
|
|
|
Ian S. Kaufman
|
|
|
|
|
|
Senior Vice President and
Chief Accounting Officer
|
|
|
|
|
|
(Principal Accounting Officer)
|
Exhibit
|
|
Description
|
|
Location
|
|
|
|
|
|
10.1
|
|
Fifth Amendment to 2011 Share Incentive Plan.
|
|
Attached herein.
|
|
|
|
|
|
10.2
|
|
Distribution Agreement, dated June 29, 2016, among Equity Residential, ERP Operating Limited Partnership, J.P. Morgan Securities LLC, Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, BNY Mellon Capital Markets, LLC, Morgan Stanley & Co. LLC, Mitsubishi UFJ Securities (USA), Inc., Scotia Capital (USA) Inc. and UBS Securities LLC.
|
|
Included as Exhibit 1.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated and filed on June 29, 2016.
|
|
|
|
|
|
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 June 30, 2016, 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.
|
EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Computation of Ratio of Earnings to Combined Fixed Charges
($ in thousands)
|
||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Six Months Ended June 30,
|
|
Year Ended December 31,
|
|||||||||||||||||||||||||
|
2016
|
|
2015
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|||||||||||||||
Income (loss) from continuing operations
|
$
|
3,960,353
|
|
|
$
|
488,573
|
|
|
$
|
907,621
|
|
|
$
|
657,101
|
|
|
$
|
(168,174
|
)
|
|
$
|
160,298
|
|
|
$
|
(72,941
|
)
|
|
Interest expense incurred, net
|
299,964
|
|
|
219,648
|
|
|
444,069
|
|
|
457,191
|
|
|
586,854
|
|
|
455,236
|
|
|
460,172
|
|
||||||||
Amortization of deferred financing costs
|
7,739
|
|
|
5,127
|
|
|
10,801
|
|
|
11,088
|
|
|
22,197
|
|
|
21,295
|
|
|
16,616
|
|
||||||||
Earnings before combined fixed charges and preferred distributions
|
4,268,056
|
|
|
713,348
|
|
|
1,362,491
|
|
|
1,125,380
|
|
|
440,877
|
|
|
636,829
|
|
|
403,847
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Preferred Share/Preference Unit distributions
|
(1,545
|
)
|
|
(1,724
|
)
|
|
(3,357
|
)
|
|
(4,145
|
)
|
|
(4,145
|
)
|
|
(10,355
|
)
|
|
(13,865
|
)
|
||||||||
Premium on redemption of Preferred Shares/Preference Units
|
—
|
|
|
(2,789
|
)
|
|
(3,486
|
)
|
|
—
|
|
|
—
|
|
|
(5,152
|
)
|
|
—
|
|
||||||||
Earnings before combined fixed charges
|
$
|
4,266,511
|
|
|
$
|
708,835
|
|
|
$
|
1,355,648
|
|
|
$
|
1,121,235
|
|
|
$
|
436,732
|
|
|
$
|
621,322
|
|
|
$
|
389,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Interest expense incurred, net
|
$
|
299,964
|
|
|
$
|
219,648
|
|
|
$
|
444,069
|
|
|
$
|
457,191
|
|
|
$
|
586,854
|
|
|
$
|
455,236
|
|
|
$
|
460,172
|
|
|
Amortization of deferred financing costs
|
7,739
|
|
|
5,127
|
|
|
10,801
|
|
|
11,088
|
|
|
22,197
|
|
|
21,295
|
|
|
16,616
|
|
||||||||
Interest capitalized for real estate and unconsolidated entities under development
|
28,386
|
|
|
30,432
|
|
|
59,885
|
|
|
52,782
|
|
|
47,321
|
|
|
22,509
|
|
|
9,108
|
|
||||||||
Amortization of deferred financing costs for real estate under development
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
152
|
|
|
—
|
|
|
—
|
|
||||||||
Total combined fixed charges
|
336,089
|
|
|
255,207
|
|
|
514,755
|
|
|
521,061
|
|
|
656,524
|
|
|
499,040
|
|
|
485,896
|
|
||||||||
Preferred Share/Preference Unit distributions
|
1,545
|
|
|
1,724
|
|
|
3,357
|
|
|
4,145
|
|
|
4,145
|
|
|
10,355
|
|
|
13,865
|
|
||||||||
Premium on redemption of Preferred Shares/Preference Units
|
—
|
|
|
2,789
|
|
|
3,486
|
|
|
—
|
|
|
—
|
|
|
5,152
|
|
|
—
|
|
||||||||
Total combined fixed charges and preferred distributions
|
$
|
337,634
|
|
|
$
|
259,720
|
|
|
$
|
521,598
|
|
|
$
|
525,206
|
|
|
$
|
660,669
|
|
|
$
|
514,547
|
|
|
$
|
499,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Ratio of earnings before combined fixed charges to total combined
fixed charges (1) (2)
|
12.69
|
|
|
2.78
|
|
|
2.63
|
|
|
2.15
|
|
|
—
|
|
|
1.25
|
|
|
—
|
|
||||||||
Ratio of earnings before combined fixed charges and preferred
distributions to total combined fixed charges and preferred
distributions (1) (2)
|
12.64
|
|
|
2.75
|
|
|
2.61
|
|
|
2.14
|
|
|
—
|
|
|
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
|
August 4, 2016
|
(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
|
August 4, 2016
|
(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.
|