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þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland
(State or Other Jurisdiction of Incorporation or Organization) |
13-3675988
(I.R.S. Employer Identification No.) |
|
Two North Riverside Plaza, Chicago, Illinois
(Address of Principal Executive Offices) |
60606
(Zip Code) |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
ASSETS
|
||||||||
Investment in real estate
|
||||||||
Land
|
$ | 4,093,508 | $ | 3,650,324 | ||||
Depreciable property
|
15,161,007 | 13,893,521 | ||||||
Projects under development
|
499,037 | 668,979 | ||||||
Land held for development
|
290,819 | 252,320 | ||||||
|
||||||||
Investment in real estate
|
20,044,371 | 18,465,144 | ||||||
Accumulated depreciation
|
(4,313,502 | ) | (3,877,564 | ) | ||||
|
||||||||
Investment in real estate, net
|
15,730,869 | 14,587,580 | ||||||
|
||||||||
Cash and cash equivalents
|
43,660 | 193,288 | ||||||
Investments in unconsolidated entities
|
— | 6,995 | ||||||
Deposits — restricted
|
109,608 | 352,008 | ||||||
Escrow deposits — mortgage
|
19,632 | 17,292 | ||||||
Deferred financing costs, net
|
44,488 | 46,396 | ||||||
Other assets
|
138,572 | 213,956 | ||||||
|
||||||||
Total assets
|
$ | 16,086,829 | $ | 15,417,515 | ||||
|
||||||||
|
||||||||
LIABILITIES AND EQUITY
|
||||||||
Liabilities:
|
||||||||
Mortgage notes payable
|
$ | 4,845,244 | $ | 4,783,446 | ||||
Notes, net
|
5,185,283 | 4,609,124 | ||||||
Lines of credit
|
146,000 | — | ||||||
Accounts payable and accrued expenses
|
111,121 | 58,537 | ||||||
Accrued interest payable
|
71,374 | 101,849 | ||||||
Other liabilities
|
341,209 | 272,236 | ||||||
Security deposits
|
62,549 | 59,264 | ||||||
Distributions payable
|
102,653 | 100,266 | ||||||
|
||||||||
Total liabilities
|
10,865,433 | 9,984,722 | ||||||
|
||||||||
|
||||||||
Commitments and contingencies
|
||||||||
|
||||||||
Redeemable Noncontrolling Interests — Operating Partnership
|
357,702 | 258,280 | ||||||
|
||||||||
|
||||||||
Equity:
|
||||||||
Shareholders’ equity:
|
||||||||
Preferred Shares of beneficial interest, $0.01 par value;
100,000,000 shares authorized; 1,946,125 shares issued
and outstanding as of September 30, 2010 and 1,950,925
shares issued and outstanding as of December 31, 2009
|
208,653 | 208,773 | ||||||
Common Shares of beneficial interest, $0.01 par value;
1,000,000,000 shares authorized; 283,971,112 shares issued
and outstanding as of September 30, 2010 and 279,959,048
shares issued and outstanding as of December 31, 2009
|
2,840 | 2,800 | ||||||
Paid in capital
|
4,503,250 | 4,477,426 | ||||||
Retained earnings
|
150,344 | 353,659 | ||||||
Accumulated other comprehensive (loss) income
|
(116,464 | ) | 4,681 | |||||
|
||||||||
Total shareholders’ equity
|
4,748,623 | 5,047,339 | ||||||
Noncontrolling Interests:
|
||||||||
Operating Partnership
|
106,531 | 116,120 | ||||||
Partially Owned Properties
|
8,540 | 11,054 | ||||||
|
||||||||
Total Noncontrolling Interests
|
115,071 | 127,174 | ||||||
|
||||||||
Total equity
|
4,863,694 | 5,174,513 | ||||||
|
||||||||
Total liabilities and equity
|
$ | 16,086,829 | $ | 15,417,515 | ||||
|
2
Nine Months Ended September 30, | Quarter Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
REVENUES
|
||||||||||||||||
Rental income
|
$ | 1,517,302 | $ | 1,433,865 | $ | 525,228 | $ | 477,588 | ||||||||
Fee and asset management
|
7,596 | 7,928 | 2,128 | 2,653 | ||||||||||||
|
||||||||||||||||
Total revenues
|
1,524,898 | 1,441,793 | 527,356 | 480,241 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
EXPENSES
|
||||||||||||||||
Property and maintenance
|
386,518 | 363,354 | 135,000 | 122,305 | ||||||||||||
Real estate taxes and insurance
|
175,491 | 158,306 | 61,189 | 54,579 | ||||||||||||
Property management
|
60,548 | 56,457 | 19,401 | 18,725 | ||||||||||||
Fee and asset management
|
4,364 | 5,916 | 704 | 1,931 | ||||||||||||
Depreciation
|
500,173 | 428,751 | 173,642 | 144,165 | ||||||||||||
General and administrative
|
31,035 | 30,476 | 10,224 | 9,881 | ||||||||||||
Impairment
|
— | 11,124 | — | — | ||||||||||||
|
||||||||||||||||
Total expenses
|
1,158,129 | 1,054,384 | 400,160 | 351,586 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Operating income
|
366,769 | 387,409 | 127,196 | 128,655 | ||||||||||||
|
||||||||||||||||
Interest and other income
|
5,325 | 15,850 | 208 | 3,214 | ||||||||||||
Other expenses
|
(9,513 | ) | (2,228 | ) | (3,487 | ) | (1,922 | ) | ||||||||
Interest:
|
||||||||||||||||
Expense incurred, net
|
(353,652 | ) | (360,021 | ) | (122,854 | ) | (121,166 | ) | ||||||||
Amortization of deferred financing costs
|
(7,970 | ) | (9,311 | ) | (2,457 | ) | (3,101 | ) | ||||||||
|
||||||||||||||||
|
||||||||||||||||
Income
(loss) before income and other taxes, (loss) income from investments
in unconsolidated entities, net gain (loss) on sales of unconsolidated entities and land parcels and discontinued operations
|
959 | 31,699 | (1,394 | ) | 5,680 | |||||||||||
Income and other tax (expense) benefit
|
(311 | ) | (2,844 | ) | (293 | ) | (459 | ) | ||||||||
(Loss) income from investments in unconsolidated entities
|
(735 | ) | (2,372 | ) | 188 | (151 | ) | |||||||||
Net gain on sales of unconsolidated entities
|
28,101 | 6,718 | 22,544 | 3,959 | ||||||||||||
Net (loss) on sales of land parcels
|
(1,161 | ) | — | (1,161 | ) | — | ||||||||||
|
||||||||||||||||
Income from continuing operations
|
26,853 | 33,201 | 19,884 | 9,029 | ||||||||||||
Discontinued operations, net
|
70,918 | 301,517 | 9,942 | 134,336 | ||||||||||||
|
||||||||||||||||
Net income
|
97,771 | 334,718 | 29,826 | 143,365 | ||||||||||||
Net (income) loss attributable to Noncontrolling Interests:
|
||||||||||||||||
Operating Partnership
|
(4,167 | ) | (18,119 | ) | (1,231 | ) | (7,699 | ) | ||||||||
Preference Interests and Units
|
— | (9 | ) | — | (2 | ) | ||||||||||
Partially Owned Properties
|
623 | 391 | 188 | 317 | ||||||||||||
|
||||||||||||||||
Net income attributable to controlling interests
|
94,227 | 316,981 | 28,783 | 135,981 | ||||||||||||
Preferred distributions
|
(10,855 | ) | (10,859 | ) | (3,617 | ) | (3,619 | ) | ||||||||
|
||||||||||||||||
Net income available to Common Shares
|
$ | 83,372 | $ | 306,122 | $ | 25,166 | $ | 132,362 | ||||||||
|
||||||||||||||||
|
||||||||||||||||
Earnings per share — basic:
|
||||||||||||||||
Income from continuing operations available to Common Shares
|
$ | 0.06 | $ | 0.08 | $ | 0.06 | $ | 0.02 | ||||||||
|
||||||||||||||||
Net income available to Common Shares
|
$ | 0.30 | $ | 1.12 | $ | 0.09 | $ | 0.48 | ||||||||
|
||||||||||||||||
Weighted average Common Shares outstanding
|
281,867 | 272,966 | 282,717 | 273,658 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Earnings per share — diluted:
|
||||||||||||||||
Income from continuing operations available to Common Shares
|
$ | 0.06 | $ | 0.08 | $ | 0.05 | $ | 0.02 | ||||||||
|
||||||||||||||||
Net income available to Common Shares
|
$ | 0.29 | $ | 1.12 | $ | 0.09 | $ | 0.48 | ||||||||
|
||||||||||||||||
Weighted average Common Shares outstanding
|
299,031 | 289,518 | 300,379 | 290,215 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Distributions declared per Common Share outstanding
|
$ | 1.0125 | $ | 1.3025 | $ | 0.3375 | $ | 0.3375 | ||||||||
|
3
Nine Months Ended September 30, | Quarter Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Comprehensive (loss) income:
|
||||||||||||||||
|
||||||||||||||||
Net income
|
$ | 97,771 | $ | 334,718 | $ | 29,826 | $ | 143,365 | ||||||||
Other comprehensive (loss) income — derivative instruments:
|
||||||||||||||||
Unrealized holding (losses) gains arising during the period
|
(123,472 | ) | 12,193 | (37,726 | ) | (462 | ) | |||||||||
Losses reclassified into earnings from other comprehensive income
|
2,379 | 3,014 | 914 | 709 | ||||||||||||
Other
|
— | 449 | — | — | ||||||||||||
Other comprehensive (loss) income — other instruments:
|
||||||||||||||||
Unrealized holding (losses) gains arising during the period
|
(52 | ) | 3,450 | 14 | 339 | |||||||||||
(Gains) realized during the period
|
— | (4,943 | ) | — | — | |||||||||||
|
||||||||||||||||
Comprehensive (loss) income
|
(23,374 | ) | 348,881 | (6,972 | ) | 143,951 | ||||||||||
Comprehensive (income) attributable to Noncontrolling Interests
|
(3,544 | ) | (17,737 | ) | (1,043 | ) | (7,384 | ) | ||||||||
|
||||||||||||||||
Comprehensive (loss) income attributable to controlling interests
|
$ | (26,918 | ) | $ | 331,144 | $ | (8,015 | ) | $ | 136,567 | ||||||
|
4
Nine Months Ended September 30, | ||||||||
2010 | 2009 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net income
|
$ | 97,771 | $ | 334,718 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation
|
501,695 | 451,487 | ||||||
Amortization of deferred financing costs
|
7,981 | 9,646 | ||||||
Amortization of discounts on investment securities
|
— | (1,661 | ) | |||||
Amortization of discounts and premiums on debt
|
1,454 | 3,346 | ||||||
Amortization of deferred settlements on derivative instruments
|
1,978 | 2,003 | ||||||
Impairment
|
— | 11,124 | ||||||
Write-off of pursuit costs
|
3,512 | 1,973 | ||||||
Property acquisition costs
|
6,001 | 255 | ||||||
Loss from investments in unconsolidated entities
|
735 | 2,372 | ||||||
Distributions from unconsolidated entities — return on capital
|
61 | 129 | ||||||
Net (gain) on sales of investment securities
|
— | (4,943 | ) | |||||
Net (gain) on sales of unconsolidated entities
|
(28,101 | ) | (6,718 | ) | ||||
Net loss on sales of land parcels
|
1,161 | — | ||||||
Net (gain) on sales of discontinued operations
|
(69,538 | ) | (274,933 | ) | ||||
Loss (gain) on debt extinguishments
|
158 | (4,420 | ) | |||||
Unrealized loss (gain) on derivative instruments
|
1 | (2 | ) | |||||
Compensation paid with Company Common Shares
|
14,716 | 13,975 | ||||||
|
||||||||
Changes in assets and liabilities:
|
||||||||
Decrease in deposits — restricted
|
75 | 4,890 | ||||||
(Increase) decrease in other assets
|
(6,385 | ) | 4,353 | |||||
Increase in accounts payable and accrued expenses
|
66,070 | 35,555 | ||||||
(Decrease) in accrued interest payable
|
(31,257 | ) | (40,876 | ) | ||||
(Decrease) in other liabilities
|
(4,150 | ) | (6,167 | ) | ||||
Increase (decrease) in security deposits
|
2,744 | (3,838 | ) | |||||
|
||||||||
Net cash provided by operating activities
|
566,682 | 532,268 | ||||||
|
||||||||
|
||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Investment in real estate — acquisitions
|
(1,108,014 | ) | (18,500 | ) | ||||
Investment in real estate — development/other
|
(98,282 | ) | (268,213 | ) | ||||
Improvements to real estate
|
(98,959 | ) | (93,049 | ) | ||||
Additions to non-real estate property
|
(1,022 | ) | (1,315 | ) | ||||
Interest capitalized for real estate under development
|
(10,196 | ) | (28,704 | ) | ||||
Proceeds from disposition of real estate, net
|
134,603 | 729,153 | ||||||
Distributions from unconsolidated entities — return of capital
|
26,924 | 5,396 | ||||||
Purchase of investment securities
|
— | (52,822 | ) | |||||
Proceeds from sale of investment securities
|
25,000 | 215,753 | ||||||
Property acquisition costs
|
(6,001 | ) | (255 | ) | ||||
Decrease (increase) in deposits on real estate acquisitions, net
|
248,547 | (246,835 | ) | |||||
(Increase) decrease in mortgage deposits
|
(2,340 | ) | 775 | |||||
Consolidation of previously unconsolidated properties
|
(26,854 | ) | — | |||||
Acquisition of Noncontrolling Interests — Partially Owned Properties
|
(1,936 | ) | (11,480 | ) | ||||
|
||||||||
Net cash (used for) provided by investing activities
|
(918,530 | ) | 229,904 | |||||
|
5
Nine Months Ended September 30, | ||||||||
2010 | 2009 | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Loan and bond acquisition costs
|
$ | (7,897 | ) | $ | (9,203 | ) | ||
Mortgage notes payable:
|
||||||||
Proceeds
|
124,020 | 657,785 | ||||||
Restricted cash
|
36,411 | 34,655 | ||||||
Lump sum payoffs
|
(491,100 | ) | (774,481 | ) | ||||
Scheduled principal repayments
|
(12,508 | ) | (13,701 | ) | ||||
(Loss) gain on debt extinguishments
|
(158 | ) | 2,400 | |||||
Notes, net:
|
||||||||
Proceeds
|
595,422 | — | ||||||
Lump sum payoffs
|
— | (505,849 | ) | |||||
Gain on debt extinguishments
|
— | 2,020 | ||||||
Lines of credit:
|
||||||||
Proceeds
|
4,375,125 | — | ||||||
Repayments
|
(4,229,125 | ) | — | |||||
(Payments on) proceeds from settlement of derivative instruments
|
(10,040 | ) | 11,253 | |||||
Proceeds from sale of Common Shares
|
73,356 | — | ||||||
Proceeds from Employee Share Purchase Plan (ESPP)
|
4,251 | 4,698 | ||||||
Proceeds from exercise of options
|
57,933 | 7,420 | ||||||
Common Shares repurchased and retired
|
(1,887 | ) | (1,124 | ) | ||||
Payment of offering costs
|
(730 | ) | (463 | ) | ||||
Other financing activities, net
|
(33 | ) | (8 | ) | ||||
Contributions — Noncontrolling Interests — Partially Owned Properties
|
222 | 893 | ||||||
Contributions — Noncontrolling Interests — Operating Partnership
|
— | 78 | ||||||
Distributions:
|
||||||||
Common Shares
|
(284,185 | ) | (395,786 | ) | ||||
Preferred Shares
|
(10,858 | ) | (10,859 | ) | ||||
Preference Interests and Units
|
— | (11 | ) | |||||
Noncontrolling Interests — Operating Partnership
|
(14,187 | ) | (23,736 | ) | ||||
Noncontrolling Interests — Partially Owned Properties
|
(1,812 | ) | (1,359 | ) | ||||
|
||||||||
Net cash provided by (used for) financing activities
|
202,220 | (1,015,378 | ) | |||||
|
||||||||
Net (decrease) in cash and cash equivalents
|
(149,628 | ) | (253,206 | ) | ||||
Cash and cash equivalents, beginning of period
|
193,288 | 890,794 | ||||||
|
||||||||
Cash and cash equivalents, end of period
|
$ | 43,660 | $ | 637,588 | ||||
|
6
Nine Months Ended September 30, | ||||||||
2010 | 2009 | |||||||
SUPPLEMENTAL INFORMATION:
|
||||||||
Cash paid for interest, net of amounts capitalized
|
$ | 377,467 | $ | 396,922 | ||||
|
||||||||
|
||||||||
Net cash (received) paid for income and other taxes
|
$ | (2,892 | ) | $ | 4,047 | |||
|
||||||||
|
||||||||
Real estate acquisitions/dispositions/other:
|
||||||||
Mortgage loans assumed
|
$ | 338,196 | $ | — | ||||
|
||||||||
|
||||||||
Valuation of OP Units
|
$ | 7,433 | $ | 1,034 | ||||
|
||||||||
|
||||||||
Mortgage loans (assumed) by purchaser
|
$ | (39,999 | ) | $ | (4,387 | ) | ||
|
||||||||
|
||||||||
Amortization of deferred financing costs:
|
||||||||
Investment in real estate, net
|
$ | (1,824 | ) | $ | (2,936 | ) | ||
|
||||||||
|
||||||||
Deferred financing costs, net
|
$ | 9,805 | $ | 12,582 | ||||
|
||||||||
|
||||||||
Amortization of discounts and premiums on debt:
|
||||||||
Investment in real estate, net
|
$ | — | $ | (3 | ) | |||
|
||||||||
|
||||||||
Mortgage notes payable
|
$ | (5,048 | ) | $ | (4,631 | ) | ||
|
||||||||
|
||||||||
Notes, net
|
$ | 6,502 | $ | 7,980 | ||||
|
||||||||
|
||||||||
Amortization of deferred settlements on derivative instruments:
|
||||||||
Other liabilities
|
$ | (401 | ) | $ | (1,011 | ) | ||
|
||||||||
|
||||||||
Accumulated other comprehensive loss
|
$ | 2,379 | $ | 3,014 | ||||
|
||||||||
|
||||||||
Unrealized loss (gain) on derivative instruments:
|
||||||||
Other assets
|
$ | 13,788 | $ | (9,910 | ) | |||
|
||||||||
|
||||||||
Mortgage notes payable
|
$ | 6 | $ | (1,755 | ) | |||
|
||||||||
|
||||||||
Notes, net
|
$ | 9,835 | $ | 866 | ||||
|
||||||||
|
||||||||
Other liabilities
|
$ | 99,844 | $ | (1,396 | ) | |||
|
||||||||
|
||||||||
Accumulated other comprehensive (loss) income
|
$ | (123,472 | ) | $ | 12,193 | |||
|
||||||||
|
||||||||
(Payments on) proceeds from settlement of derivative instruments:
|
||||||||
Other assets
|
$ | — | $ | 11,253 | ||||
|
||||||||
|
||||||||
Other liabilities
|
$ | (10,040 | ) | $ | — | |||
|
||||||||
|
||||||||
Consolidation of previously unconsolidated properties:
|
||||||||
Investment in real estate, net
|
$ | (105,065 | ) | $ | — | |||
|
||||||||
|
||||||||
Investments in unconsolidated entities
|
$ | 7,376 | $ | — | ||||
|
||||||||
|
||||||||
Deposits — restricted
|
$ | (42,633 | ) | $ | — | |||
|
||||||||
|
||||||||
Mortgage notes payable
|
$ | 112,631 | $ | — | ||||
|
||||||||
|
||||||||
Net other assets recorded
|
$ | 837 | $ | — | ||||
|
||||||||
|
||||||||
Other
|
||||||||
Receivable on sale of Common Shares
|
$ | 37,550 | $ | — | ||||
|
||||||||
|
||||||||
Transfer from notes, net to mortgage notes payable
|
$ | 35,600 | $ | — | ||||
|
7
Nine Months Ended | ||||
SHAREHOLDERS’ EQUITY | September 30, 2010 | |||
PREFERRED SHARES
|
||||
Balance, beginning of year
|
$ | 208,773 | ||
Conversion of 7.00% Series E Cumulative Convertible
|
(120 | ) | ||
|
||||
Balance, end of period
|
$ | 208,653 | ||
|
||||
|
||||
COMMON SHARES, $0.01 PAR VALUE
|
||||
Balance, beginning of year
|
$ | 2,800 | ||
Conversion of OP Units into Common Shares
|
6 | |||
Issuance of Common Shares
|
10 | |||
Exercise of share options
|
20 | |||
Employee Share Purchase Plan (ESPP)
|
2 | |||
Share-based employee compensation expense:
|
||||
Restricted shares
|
2 | |||
|
||||
Balance, end of period
|
$ | 2,840 | ||
|
||||
|
||||
PAID IN CAPITAL
|
||||
Balance, beginning of year
|
$ | 4,477,426 | ||
Common Share Issuance:
|
||||
Conversion of Preferred Shares into Common Shares
|
120 | |||
Conversion of OP Units into Common Shares
|
13,272 | |||
Issuance of Common Shares
|
35,796 | |||
Exercise of share options
|
57,913 | |||
Employee Share Purchase Plan (ESPP)
|
4,249 | |||
Share-based employee compensation expense:
|
||||
Restricted shares
|
7,346 | |||
Share options
|
5,807 | |||
ESPP discount
|
1,122 | |||
Common Shares repurchased and retired
|
(1,887 | ) | ||
Offering costs
|
(730 | ) | ||
Supplemental Executive Retirement Plan (SERP)
|
7,657 | |||
Acquisition of Noncontrolling Interests — Partially Owned Properties
|
(1,313 | ) | ||
Change in market value of Redeemable Noncontrolling Interests — Operating Partnership
|
(108,576 | ) | ||
Adjustment for Noncontrolling Interests ownership in Operating Partnership
|
5,048 | |||
|
||||
Balance, end of period
|
$ | 4,503,250 | ||
|
||||
|
||||
RETAINED EARNINGS
|
||||
Balance, beginning of year
|
$ | 353,659 | ||
Net income attributable to controlling interests
|
94,227 | |||
Common Share distributions
|
(286,687 | ) | ||
Preferred Share distributions
|
(10,855 | ) | ||
|
||||
Balance, end of period
|
$ | 150,344 | ||
|
||||
|
||||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
|
||||
Balance, beginning of year
|
$ | 4,681 | ||
Accumulated other comprehensive (loss) — derivative instruments:
|
||||
Unrealized holding (losses) arising during the period
|
(123,472 | ) | ||
Losses reclassified into earnings from other comprehensive income
|
2,379 | |||
Accumulated other comprehensive (loss) — other instruments:
|
||||
Unrealized holding (losses) arising during the period
|
(52 | ) | ||
|
||||
Balance, end of period
|
$ | (116,464 | ) | |
|
8
Nine Months Ended | ||||
NONCONTROLLING INTERESTS | September 30, 2010 | |||
OPERATING PARTNERSHIP
|
||||
Balance, beginning of year
|
$ | 116,120 | ||
Issuance of OP Units to Noncontrolling Interests
|
7,433 | |||
Conversion of OP Units held by Noncontrolling Interests into OP Units held by General Partner
|
(13,278 | ) | ||
Equity compensation associated with Noncontrolling Interests
|
2,058 | |||
Net income attributable to Noncontrolling Interests
|
4,167 | |||
Distributions to Noncontrolling Interests
|
(14,075 | ) | ||
Change in carrying value of Redeemable Noncontrolling Interests — Operating Partnership
|
9,154 | |||
Adjustment for Noncontrolling Interests ownership in Operating Partnership
|
(5,048 | ) | ||
|
||||
Balance, end of period
|
$ | 106,531 | ||
|
||||
|
||||
PARTIALLY OWNED PROPERTIES
|
||||
Balance, beginning of year
|
$ | 11,054 | ||
Net (loss) attributable to Noncontrolling Interests
|
(623 | ) | ||
Contributions by Noncontrolling Interests
|
222 | |||
Distributions to Noncontrolling Interests
|
(1,831 | ) | ||
Acquisition of Noncontrolling Interests — Partially Owned Properties
|
(500 | ) | ||
Other
|
218 | |||
|
||||
Balance, end of period
|
$ | 8,540 | ||
|
9
Properties | Units | |||||||
Wholly Owned Properties
|
445 | 123,327 | ||||||
Partially Owned Properties —
Consolidated
|
24 | 5,022 | ||||||
Military Housing
|
2 | 4,680 | ||||||
|
||||||||
|
471 | 133,029 |
10
11
2010 | ||||
Common Shares
|
||||
Common Shares outstanding at January 1,
|
279,959,048 | |||
|
||||
Common Shares Issued:
|
||||
Conversion of Series E Preferred Shares
|
5,340 | |||
Conversion of OP Units
|
622,321 | |||
Issuance of Common Shares
|
1,057,304 | |||
Exercise of share options
|
2,035,178 | |||
Employee Share Purchase Plan (ESPP)
|
136,453 | |||
Restricted share grants, net
|
213,598 | |||
|
||||
Common Shares Other:
|
||||
Repurchased and retired
|
(58,130 | ) | ||
|
||||
Common Shares outstanding at September 30,
|
283,971,112 | |||
|
||||
|
||||
Units
|
||||
Units outstanding at January 1,
|
14,197,969 | |||
Issuance of LTIP Units
|
94,096 | |||
OP Units issued through acquisitions
|
189,700 | |||
Conversion of OP Units to Common Shares
|
(622,321 | ) | ||
|
||||
Units outstanding at September 30,
|
13,859,444 | |||
|
||||
Total Common Shares and Units outstanding at September 30,
|
297,830,556 | |||
|
||||
Units Ownership Interest in Operating Partnership
|
4.7 | % |
12
13
2010 | ||||
Balance at January 1,
|
$ | 258,280 | ||
Change in market value
|
108,576 | |||
Change in carrying value
|
(9,154 | ) | ||
|
||||
Balance at September 30,
|
$ | 357,702 | ||
|
Annual | Amounts in thousands | |||||||||||||||||||
Redemption | Conversion | Dividend per | September 30, | December 31, | ||||||||||||||||
Date (1) (2) | Rate (2) | Share (3) | 2010 | 2009 | ||||||||||||||||
Preferred Shares of beneficial interest, $0.01 par value;
100,000,000 shares authorized:
|
||||||||||||||||||||
7.00% Series E Cumulative Convertible Preferred;
liquidation value $25 per
share; 323,666 and 328,466
shares issued and outstanding
at September 30, 2010 and
December 31, 2009,
respectively
|
11/1/98 | 1.1128 | $ | 1.75 | $ | 8,091 | $ | 8,211 | ||||||||||||
7.00% Series H Cumulative Convertible Preferred;
liquidation value $25 per
share; 22,459 shares issued
and outstanding at September
30, 2010 and December 31,
2009
|
6/30/98 | 1.4480 | $ | 1.75 | 562 | 562 | ||||||||||||||
8.29% Series K Cumulative Redeemable Preferred;
liquidation value $50 per
share; 1,000,000 shares
issued and outstanding at
September 30, 2010 and
December 31, 2009
|
12/10/26 | N/A | $ | 4.145 | 50,000 | 50,000 | ||||||||||||||
6.48% Series N Cumulative Redeemable Preferred;
liquidation value $250 per
share; 600,000 shares issued
and outstanding at September
30, 2010 and December 31,
2009 (4)
|
6/19/08 | N/A | $ | 16.20 | 150,000 | 150,000 | ||||||||||||||
|
||||||||||||||||||||
|
$ | 208,653 | $ | 208,773 | ||||||||||||||||
|
(1) | On or after the redemption date, redeemable preferred shares (Series K and N) 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) | On or after the redemption date, convertible preferred shares (Series E & H) may be redeemed under certain circumstances at the option of the Company for cash (in the case of Series E) or Common Shares (in the case of Series H), in whole or in part, at various redemption prices per share based upon the contractual conversion rate, plus accrued and unpaid distributions, if any. See Note 16 regarding the redemption of the Series E & H Preferred Shares. | |
(3) | Dividends on all series of Preferred Shares are payable quarterly at various pay dates. The dividend listed for Series N is a Preferred Share rate and the equivalent Depositary Share annual dividend is $1.62 per share. | |
(4) | The Series N Preferred Shares have a corresponding depositary share that consists of ten times the number of shares and one-tenth the liquidation value and dividend per share. |
14
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
Land
|
$ | 4,093,508 | $ | 3,650,324 | ||||
Depreciable property:
|
||||||||
Buildings and improvements
|
13,927,990 | 12,781,543 | ||||||
Furniture, fixtures and
equipment
|
1,233,017 | 1,111,978 | ||||||
Projects under development:
|
||||||||
Land
|
79,204 | 106,716 | ||||||
Construction-in-progress
|
419,833 | 562,263 | ||||||
Land held for development:
|
||||||||
Land
|
228,091 | 181,430 | ||||||
Construction-in-progress
|
62,728 | 70,890 | ||||||
|
||||||||
Investment in real estate
|
20,044,371 | 18,465,144 | ||||||
Accumulated depreciation
|
(4,313,502 | ) | (3,877,564 | ) | ||||
|
||||||||
Investment in real estate, net
|
$ | 15,730,869 | $ | 14,587,580 | ||||
|
Properties | Units | Purchase Price | ||||||||||
Rental Properties
|
14 | 4,164 | $ | 1,398,251 | ||||||||
Land Parcels (four)
|
— | — | 54,300 | |||||||||
|
||||||||||||
Total
|
14 | 4,164 | $ | 1,452,551 | ||||||||
|
Properties | Units | Sales Price | ||||||||||
Rental Properties:
|
||||||||||||
Consolidated
|
11 | 2,437 | $ | 171,990 | ||||||||
Unconsolidated (1)
|
27 | 6,275 | 417,779 | |||||||||
Land Parcel (one)
|
— | — | 4,000 | |||||||||
Condominium Conversion Properties
|
1 | 2 | 360 | |||||||||
|
||||||||||||
Total
|
39 | 8,714 | $ | 594,129 | ||||||||
|
(1) | The Company owned a 25% interest in these unconsolidated rental properties. Sales price listed is the gross sales price. |
15
Properties | Units | Purchase Price | ||||||||||
Rental Properties
|
3 | 993 | $ | 221,600 | ||||||||
|
||||||||||||
Total
|
3 | 993 | $ | 221,600 | ||||||||
|
Properties | Units | Sales Price | ||||||||||
Rental Properties
|
18 | 2,589 | $ | 282,650 | ||||||||
|
||||||||||||
Total
|
18 | 2,589 | $ | 282,650 | ||||||||
|
16
Consolidated | Unconsolidated | |||||||||||||||||||
Development Projects (VIEs) | ||||||||||||||||||||
Held for | Completed | Institutional | ||||||||||||||||||
and/or Under | and | Joint | ||||||||||||||||||
Development | Stabilized | Other | Total | Ventures (4) | ||||||||||||||||
Total projects (1)
|
— | 4 | 20 | 24 | — | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Total units (1)
|
— | 1,302 | 3,720 | 5,022 | — | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Balance sheet information at 9/30/10 (at 100%):
|
||||||||||||||||||||
ASSETS
|
||||||||||||||||||||
Investment in real estate
|
$ | 306,433 | $ | 390,435 | $ | 433,456 | $ | 1,130,324 | $ | — | ||||||||||
Accumulated depreciation
|
— | (15,406 | ) | (121,017 | ) | (136,423 | ) | — | ||||||||||||
|
||||||||||||||||||||
Investment in real estate, net
|
306,433 | 375,029 | 312,439 | 993,901 | — | |||||||||||||||
Cash and cash equivalents
|
3,511 | 6,732 | 15,379 | 25,622 | — | |||||||||||||||
Deposits — restricted
|
1,887 | 3,086 | 8 | 4,981 | — | |||||||||||||||
Escrow deposits — mortgage
|
— | 704 | 3,631 | 4,335 | — | |||||||||||||||
Deferred financing costs, net
|
3,393 | 403 | 260 | 4,056 | — | |||||||||||||||
Other assets
|
365 | 383 | 215 | 963 | — | |||||||||||||||
|
||||||||||||||||||||
Total assets
|
$ | 315,589 | $ | 386,337 | $ | 331,932 | $ | 1,033,858 | $ | — | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
LIABILITIES AND EQUITY
|
||||||||||||||||||||
Mortgage notes payable
|
$ | 154,324 | $ | 275,600 | $ | 301,969 | $ | 731,893 | $ | — | ||||||||||
Accounts payable & accrued expenses
|
5,244 | 2,376 | 2,717 | 10,337 | — | |||||||||||||||
Accrued interest payable
|
1,565 | 585 | 1,622 | 3,772 | — | |||||||||||||||
Other liabilities
|
3,961 | 399 | 1,226 | 5,586 | — | |||||||||||||||
Security deposits
|
860 | 941 | 1,566 | 3,367 | — | |||||||||||||||
|
||||||||||||||||||||
Total liabilities
|
165,954 | 279,901 | 309,100 | 754,955 | — | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Noncontrolling Interests — Partially Owned Properties
|
8,443 | 4,464 | (4,367 | ) | 8,540 | — | ||||||||||||||
Accumulated other comprehensive (loss)
|
(2,141 | ) | — | — | (2,141 | ) | — | |||||||||||||
EQR equity
|
143,333 | 101,972 | 27,199 | 272,504 | — | |||||||||||||||
|
||||||||||||||||||||
Total equity
|
149,635 | 106,436 | 22,832 | 278,903 | — | |||||||||||||||
|
||||||||||||||||||||
Total liabilities and equity
|
$ | 315,589 | $ | 386,337 | $ | 331,932 | $ | 1,033,858 | $ | — | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Debt — Secured (2):
|
||||||||||||||||||||
EQR Ownership (3)
|
$ | 154,324 | $ | 275,600 | $ | 221,858 | $ | 651,782 | $ | — | ||||||||||
Noncontrolling Ownership
|
— | — | 80,111 | 80,111 | — | |||||||||||||||
|
||||||||||||||||||||
Total (at 100%)
|
$ | 154,324 | $ | 275,600 | $ | 301,969 | $ | 731,893 | $ | — | ||||||||||
|
17
Consolidated | Unconsolidated | |||||||||||||||||||
Development Projects (VIEs) | ||||||||||||||||||||
Held for | Institutional | |||||||||||||||||||
and/or Under | Completed | Joint | ||||||||||||||||||
Development | and Stabilized | Other | Total | Ventures (4) | ||||||||||||||||
Operating information for the nine months
ended 9/30/10 (at 100%):
|
||||||||||||||||||||
Operating revenue
|
$ | 3,507 | $ | 18,946 | $ | 41,885 | $ | 64,338 | $ | 44,179 | ||||||||||
Operating expenses
|
3,032 | 7,069 | 14,974 | 25,075 | 22,036 | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Net operating income
|
475 | 11,877 | 26,911 | 39,263 | 22,143 | |||||||||||||||
Depreciation
|
— | 9,174 | 11,125 | 20,299 | 11,189 | |||||||||||||||
General and administrative/other
|
52 | 107 | 34 | 193 | 141 | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Operating income
|
423 | 2,596 | 15,752 | 18,771 | 10,813 | |||||||||||||||
Interest and other income
|
21 | 8 | 20 | 49 | 73 | |||||||||||||||
Other expenses
|
(342 | ) | — | (493 | ) | (835 | ) | — | ||||||||||||
Interest:
|
||||||||||||||||||||
Expense incurred, net
|
(2,382 | ) | (4,804 | ) | (15,258 | ) | (22,444 | ) | (16,482 | ) | ||||||||||
Amortization of deferred financing costs
|
— | (566 | ) | (172 | ) | (738 | ) | (573 | ) | |||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
(Loss) before income and other taxes
and discontinued operations
|
(2,280 | ) | (2,766 | ) | (151 | ) | (5,197 | ) | (6,169 | ) | ||||||||||
Income and other tax (expense) benefit
|
(30 | ) | — | (24 | ) | (54 | ) | (153 | ) | |||||||||||
Net gain on sales of discontinued operations
|
711 | — | 7,997 | 8,708 | 9,967 | |||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Net (loss) income
|
$ | (1,599 | ) | $ | (2,766 | ) | $ | 7,822 | $ | 3,457 | $ | 3,645 | ||||||||
|
(1) | Project and unit counts exclude all uncompleted development projects until those projects are substantially completed. | |
(2) | All debt is non-recourse to the Company with the exception of $14.0 million in mortgage debt on various development projects. | |
(3) | Represents the Company’s current economic ownership interest. | |
(4) | On April 30, 2010, the Company acquired the 75% equity interest it did not own in seven previously unconsolidated properties containing 1,811 units in exchange for an approximate $30.0 million payment to its partner. In addition, the Company repaid the net $70.0 million mortgage loan, which was to mature on May 1, 2010, concurrent with closing using proceeds drawn from the Company’s line of credit. During the third quarter of 2010, the Company sold its 25% equity interest in the remaining 24 unconsolidated properties containing 5,635 units in exchange for an approximate $25.4 million payment from its partner and the related $264.8 million in non-recourse mortgage debt was extinguished by the partner at closing. As of September 30, 2010, the Company no longer held an interest in these unconsolidated institutional joint ventures. |
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
Tax—deferred (1031) exchange proceeds
|
$ | — | $ | 244,257 | ||||
Earnest money on pending acquisitions
|
1,710 | 6,000 | ||||||
Restricted deposits on debt (1)
|
55,746 | 49,565 | ||||||
Resident security and utility deposits
|
41,606 | 39,361 | ||||||
Other
|
10,546 | 12,825 | ||||||
|
||||||||
Totals
|
$ | 109,608 | $ | 352,008 | ||||
|
(1) | Primarily represents amounts held in escrow by the lender and released as draw requests are made on fully funded development mortgage loans. |
18
• | Repaid $503.6 million of mortgage loans; | ||
• | Obtained $124.0 million of new mortgage loan proceeds; | ||
• | Assumed $338.2 million of mortgage debt on six acquired properties; | ||
• | Was released from $40.0 million of mortgage debt assumed by the purchaser on two disposed properties; and | ||
• | Assumed $112.6 million of mortgage debt on seven previously unconsolidated properties and repaid the net $70.0 million mortgage loan (net of $42.6 million of cash collateral held by the lender) concurrent with closing using proceeds drawn from the Company’s line of credit. |
19
Forward | Development | |||||||||||
Fair Value | Starting | Cash Flow | ||||||||||
Hedges (1) | Swaps (2) | Hedges (3) | ||||||||||
Current Notional Balance
|
$ | 315,693 | $ | 850,000 | $ | 91,343 | ||||||
Lowest Possible Notional
|
$ | 315,693 | $ | 850,000 | $ | 3,020 | ||||||
Highest Possible Notional
|
$ | 317,694 | $ | 850,000 | $ | 91,343 | ||||||
Lowest Interest Rate
|
2.009 | % | 3.478 | % | 4.059 | % | ||||||
Highest Interest Rate
|
4.800 | % | 4.695 | % | 4.059 | % | ||||||
Earliest Maturity Date
|
2012 | 2021 | 2011 | |||||||||
Latest Maturity Date
|
2013 | 2023 | 2011 |
(1) | Fair Value Hedges — Converts outstanding fixed rate debt to a floating interest rate. | |
(2) | Forward Starting Swaps — Designed to partially fix the interest rate in advance of a planned future debt issuance. These swaps have mandatory counterparty terminations from 2012 through 2014, and $300.0 million, $400.0 million and $150.0 million are designated for 2011, 2012 and 2013 maturities, respectively. | |
(3) | Development Cash Flow Hedges — Converts outstanding floating rate debt to a fixed interest rate. |
Asset Derivatives | Liability Derivatives | |||||||||||||||
Balance Sheet | Balance Sheet | |||||||||||||||
September 30, 2010 | Location | Fair Value | Location | Fair Value | ||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||
Interest Rate Contracts:
|
||||||||||||||||
Fair Value Hedges
|
Other assets | $ | 15,029 | Other liabilities | $ | — | ||||||||||
Forward Starting Swaps
|
Other assets | — | Other liabilities | (91,239 | ) | |||||||||||
Development Cash Flow Hedges
|
Other assets | — | Other liabilities | (2,141 | ) | |||||||||||
|
||||||||||||||||
Total
|
$ | 15,029 | $ | (93,380 | ) | |||||||||||
|
Asset Derivatives | Liability Derivatives | |||||||||||||||
Balance Sheet | Balance Sheet | |||||||||||||||
December 31, 2009 | Location | Fair Value | Location | Fair Value | ||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||
Interest Rate Contracts:
|
||||||||||||||||
Fair Value Hedges
|
Other assets | $ | 5,186 | Other liabilities | $ | — | ||||||||||
Forward Starting Swaps
|
Other assets | 23,630 | Other liabilities | — | ||||||||||||
Development Cash Flow Hedges
|
Other assets | — | Other liabilities | (3,577 | ) | |||||||||||
|
||||||||||||||||
Total
|
$ | 28,816 | $ | (3,577 | ) | |||||||||||
|
20
Location of Gain/(Loss) | Amount of Gain/(Loss) | Income Statement | Amount of Gain/(Loss) | |||||||||||||||||
September 30, 2010 | Recognized in Income | Recognized in Income | Location of Hedged | Recognized in Income | ||||||||||||||||
Type of Fair Value Hedge | on Derivative | on Derivative | Hedged Item | Item Gain/(Loss) | on Hedged Item | |||||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||||||
Interest Rate Contracts:
|
||||||||||||||||||||
Interest Rate Swaps
|
Interest expense | $ | 9,842 | Fixed rate debt | Interest expense | $ | (9,842 | ) | ||||||||||||
|
||||||||||||||||||||
Total
|
$ | 9,842 | $ | (9,842 | ) | |||||||||||||||
|
Location of Gain/(Loss) | Amount of Gain/(Loss) | Income Statement | Amount of Gain/(Loss) | |||||||||||||||||
September 30, 2009 | Recognized in Income | Recognized in Income | Location of Hedged | Recognized in Income | ||||||||||||||||
Type of Fair Value Hedge | on Derivative | on Derivative | Hedged Item | Item Gain/(Loss) | on Hedged Item | |||||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||||||
Interest Rate Contracts:
|
||||||||||||||||||||
Interest Rate Swaps
|
Interest expense | $ | (890 | ) | Fixed rate debt | Interest expense | $ | 890 | ||||||||||||
|
||||||||||||||||||||
Total
|
$ | (890 | ) | $ | 890 | |||||||||||||||
|
Effective Portion | Ineffective Portion | |||||||||||||||||||
Amount of | Location of Gain/(Loss) | Amount of Gain/(Loss) | Location of | Amount of Gain/(Loss) | ||||||||||||||||
Gain/(Loss) | Reclassified from | Reclassified from | Gain/(Loss) | Reclassified from | ||||||||||||||||
September 30, 2010 | Recognized in OCI | Accumulated OCI | Accumulated OCI | Recognized in Income | Accumulated OCI | |||||||||||||||
Type of Cash Flow Hedge | on Derivative | into Income | into Income | on Derivative | into Income | |||||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||||||
Interest Rate Contracts:
|
||||||||||||||||||||
Forward Starting Swaps/Treasury Locks
|
$ | (124,908 | ) | Interest expense | $ | (2,379 | ) | N/A | $ | — | ||||||||||
Development Interest Rate Swaps/Caps
|
1,436 | Interest expense | — | N/A | — | |||||||||||||||
|
||||||||||||||||||||
Total
|
$ | (123,472 | ) | $ | (2,379 | ) | $ | — | ||||||||||||
|
Effective Portion | Ineffective Portion | |||||||||||||||||||
Amount of | Location of Gain/(Loss) | Amount of Gain/(Loss) | Location of | Amount of Gain/(Loss) | ||||||||||||||||
Gain/(Loss) | Reclassified from | Reclassified from | Gain/(Loss) | Reclassified from | ||||||||||||||||
September 30, 2009 | Recognized in OCI | Accumulated OCI | Accumulated OCI | Recognized in Income | Accumulated OCI | |||||||||||||||
Type of Cash Flow Hedge | on Derivative | into Income | into Income | on Derivative | into Income | |||||||||||||||
Derivatives designated as hedging instruments:
|
||||||||||||||||||||
Interest Rate Contracts:
|
||||||||||||||||||||
Forward Starting Swaps/Treasury Locks
|
$ | 9,370 | Interest expense | $ | (3,014 | ) | N/A | $ | — | |||||||||||
Development Interest Rate Swaps/Caps
|
2,823 | Interest expense | — | N/A | — | |||||||||||||||
|
||||||||||||||||||||
Total
|
$ | 12,193 | $ | (3,014 | ) | $ | — | |||||||||||||
|
21
Other Assets | ||||||||||||||||||||||||
Amortized | Unrealized | Unrealized | Book/ | Interest and | ||||||||||||||||||||
Security | Maturity | Cost | Gains | Losses | Fair Value | Other Income | ||||||||||||||||||
Available-for-Sale
|
||||||||||||||||||||||||
FDIC-insured certificates of deposit
|
Less than one year | $ | — | $ | — | $ | — | $ | — | $ | 61 | |||||||||||||
Other
|
N/A | 675 | 411 | — | 1,086 | — | ||||||||||||||||||
|
||||||||||||||||||||||||
Total
|
$ | 675 | $ | 411 | $ | — | $ | 1,086 | $ | 61 | ||||||||||||||
|
• | 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. |
22
Nine Months Ended September 30, | Quarter Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Numerator for net income per share — basic:
|
||||||||||||||||
Income from continuing operations
|
$ | 26,853 | $ | 33,201 | $ | 19,884 | $ | 9,029 | ||||||||
Allocation to Noncontrolling Interests — Operating Partnership, net
|
(791 | ) | (1,264 | ) | (767 | ) | (311 | ) | ||||||||
Net loss attributable to Noncontrolling Interests — Partially Owned Properties
|
623 | 391 | 188 | 317 | ||||||||||||
Net income attributable to Preference Interests and Units
|
— | (9 | ) | — | (2 | ) | ||||||||||
Preferred distributions
|
(10,855 | ) | (10,859 | ) | (3,617 | ) | (3,619 | ) | ||||||||
|
||||||||||||||||
|
||||||||||||||||
Income from continuing operations available to Common Shares,
net of Noncontrolling Interests
|
15,830 | 21,460 | 15,688 | 5,414 | ||||||||||||
Discontinued operations, net of Noncontrolling Interests
|
67,542 | 284,662 | 9,478 | 126,948 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Numerator for net income per share — basic
|
$ | 83,372 | $ | 306,122 | $ | 25,166 | $ | 132,362 | ||||||||
|
||||||||||||||||
|
||||||||||||||||
Numerator for net income per share — diluted:
|
||||||||||||||||
Income from continuing operations
|
$ | 26,853 | $ | 33,201 | $ | 19,884 | $ | 9,029 | ||||||||
Net loss attributable to Noncontrolling Interests — Partially Owned Properties
|
623 | 391 | 188 | 317 | ||||||||||||
Net income attributable to Preference Interests and Units
|
— | (9 | ) | — | (2 | ) | ||||||||||
Preferred distributions
|
(10,855 | ) | (10,859 | ) | (3,617 | ) | (3,619 | ) | ||||||||
|
||||||||||||||||
|
||||||||||||||||
Income from continuing operations available to Common Shares
|
16,621 | 22,724 | 16,455 | 5,725 | ||||||||||||
Discontinued operations, net
|
70,918 | 301,517 | 9,942 | 134,336 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Numerator for net income per share — diluted
|
$ | 87,539 | $ | 324,241 | $ | 26,397 | $ | 140,061 | ||||||||
|
||||||||||||||||
|
||||||||||||||||
Denominator for net income per share — basic and diluted:
|
||||||||||||||||
Denominator for net income per share — basic
|
281,867 | 272,966 | 282,717 | 273,658 | ||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
OP Units
|
13,705 | 16,024 | 13,631 | 15,604 | ||||||||||||
Long-term compensation award shares/units
|
3,459 | 528 | 4,031 | 953 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Denominator for net income per share — diluted
|
299,031 | 289,518 | 300,379 | 290,215 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Net income per share — basic
|
$ | 0.296 | $ | 1.121 | $ | 0.089 | $ | 0.484 | ||||||||
|
||||||||||||||||
|
||||||||||||||||
Net income per share — diluted
|
$ | 0.293 | $ | 1.120 | $ | 0.088 | $ | 0.483 | ||||||||
|
||||||||||||||||
|
||||||||||||||||
Net income per share — basic:
|
||||||||||||||||
Income from continuing operations available to Common Shares,
net of Noncontrolling Interests
|
$ | 0.056 | $ | 0.078 | $ | 0.055 | $ | 0.020 | ||||||||
Discontinued operations, net of Noncontrolling Interests
|
0.240 | 1.043 | 0.034 | 0.464 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Net income per share — basic
|
$ | 0.296 | $ | 1.121 | $ | 0.089 | $ | 0.484 | ||||||||
|
||||||||||||||||
|
||||||||||||||||
Net income per share — diluted:
|
||||||||||||||||
Income from continuing operations available to Common Shares
|
$ | 0.056 | $ | 0.078 | $ | 0.055 | $ | 0.020 | ||||||||
Discontinued operations, net
|
0.237 | 1.042 | 0.033 | 0.463 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Net income per share — diluted
|
$ | 0.293 | $ | 1.120 | $ | 0.088 | $ | 0.483 | ||||||||
|
23
Nine Months Ended September 30, | Quarter Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
REVENUES
|
||||||||||||||||
Rental income
|
$ | 7,296 | $ | 90,113 | $ | 1,914 | $ | 21,018 | ||||||||
|
||||||||||||||||
Total revenues
|
7,296 | 90,113 | 1,914 | 21,018 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
EXPENSES (1)
|
||||||||||||||||
Property and maintenance
|
2,942 | 29,420 | 310 | 7,456 | ||||||||||||
Real estate taxes and insurance
|
1,078 | 9,565 | 223 | 2,209 | ||||||||||||
Depreciation
|
1,522 | 22,736 | 377 | 5,487 | ||||||||||||
General and administrative
|
26 | 29 | 10 | 4 | ||||||||||||
|
||||||||||||||||
Total expenses
|
5,568 | 61,750 | 920 | 15,156 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Discontinued operating income
|
1,728 | 28,363 | 994 | 5,862 | ||||||||||||
|
||||||||||||||||
Interest and other income
|
360 | 16 | — | 3 | ||||||||||||
Interest (2):
|
||||||||||||||||
Expense incurred, net
|
(659 | ) | (1,372 | ) | (318 | ) | (352 | ) | ||||||||
Amortization of deferred financing costs
|
(11 | ) | (335 | ) | (8 | ) | (293 | ) | ||||||||
Income and other tax (expense) benefit
|
(38 | ) | (88 | ) | (11 | ) | (19 | ) | ||||||||
|
||||||||||||||||
|
||||||||||||||||
Discontinued operations
|
1,380 | 26,584 | 657 | 5,201 | ||||||||||||
Net gain on sales of discontinued operations
|
69,538 | 274,933 | 9,285 | 129,135 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Discontinued operations, net
|
$ | 70,918 | $ | 301,517 | $ | 9,942 | $ | 134,336 | ||||||||
|
(1) | Includes expenses paid in the current period for properties sold or held for sale in prior periods related to the Company’s period of ownership. | |
(2) | Includes only interest expense specific to secured mortgage notes payable for properties sold and/or held for sale. |
24
25
Nine Months Ended September 30, 2010 | ||||||||||||||||||||||||
Northeast | Northwest | Southeast | Southwest | Other (3) | Total | |||||||||||||||||||
Rental income:
|
||||||||||||||||||||||||
Same store (1)
|
$ | 442,774 | $ | 276,585 | $ | 293,921 | $ | 325,379 | $ | — | $ | 1,338,659 | ||||||||||||
Non-same store/other (2) (3)
|
73,979 | 10,272 | 6,323 | 19,924 | 68,145 | 178,643 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total rental income
|
516,753 | 286,857 | 300,244 | 345,303 | 68,145 | 1,517,302 | ||||||||||||||||||
|
||||||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Same store (1)
|
168,263 | 105,642 | 122,853 | 118,791 | — | 515,549 | ||||||||||||||||||
Non-same store/other (2) (3)
|
37,055 | 4,330 | 2,795 | 8,071 | 54,757 | 107,008 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total operating expenses
|
205,318 | 109,972 | 125,648 | 126,862 | 54,757 | 622,557 | ||||||||||||||||||
|
||||||||||||||||||||||||
NOI:
|
||||||||||||||||||||||||
Same store (1)
|
274,511 | 170,943 | 171,068 | 206,588 | — | 823,110 | ||||||||||||||||||
Non-same store/other (2) (3)
|
36,924 | 5,942 | 3,528 | 11,853 | 13,388 | 71,635 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total NOI
|
$ | 311,435 | $ | 176,885 | $ | 174,596 | $ | 218,441 | $ | 13,388 | $ | 894,745 | ||||||||||||
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||
Total assets
|
$ | 6,054,555 | $ | 2,723,175 | $ | 2,672,806 | $ | 3,141,662 | $ | 1,494,631 | $ | 16,086,829 | ||||||||||||
|
(1) | Same store primarily includes all properties acquired or completed and stabilized prior to January 1, 2009, less properties subsequently sold, which represented 116,775 units. | |
(2) | Non-same store primarily includes properties acquired after January 1, 2009, plus any properties in lease-up and not stabilized as of January 1, 2009. | |
(3) | Other includes ECH, development, condominium conversion overhead of $0.4 million and other corporate operations. Also reflects a $8.0 million elimination of rental income recorded in Northeast, Northwest, Southeast and Southwest operating segments related to ECH. |
Nine Months Ended September 30, 2009 | ||||||||||||||||||||||||
Northeast | Northwest | Southeast | Southwest | Other (3) | Total | |||||||||||||||||||
Rental income:
|
||||||||||||||||||||||||
Same store (1)
|
$ | 439,673 | $ | 284,260 | $ | 295,435 | $ | 332,420 | $ | — | $ | 1,351,788 | ||||||||||||
Non-same store/other (2) (3)
|
13,369 | 1,283 | 3,144 | 12,299 | 51,982 | 82,077 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total rental income
|
453,042 | 285,543 | 298,579 | 344,719 | 51,982 | 1,433,865 | ||||||||||||||||||
|
||||||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Same store (1)
|
164,288 | 102,778 | 123,769 | 116,075 | — | 506,910 | ||||||||||||||||||
Non-same store/other (2) (3)
|
8,126 | 1,358 | 1,303 | 6,685 | 53,735 | 71,207 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total operating expenses
|
172,414 | 104,136 | 125,072 | 122,760 | 53,735 | 578,117 | ||||||||||||||||||
|
||||||||||||||||||||||||
NOI:
|
||||||||||||||||||||||||
Same store (1)
|
275,385 | 181,482 | 171,666 | 216,345 | — | 844,878 | ||||||||||||||||||
Non-same store/other (2) (3)
|
5,243 | (75 | ) | 1,841 | 5,614 | (1,753 | ) | 10,870 | ||||||||||||||||
|
||||||||||||||||||||||||
Total NOI
|
$ | 280,628 | $ | 181,407 | $ | 173,507 | $ | 221,959 | $ | (1,753 | ) | $ | 855,748 | |||||||||||
|
(1) | Same store primarily includes all properties acquired or completed and stabilized prior to January 1, 2009, less properties subsequently sold, which represented 116,775 units. | |
(2) | Non-same store primarily includes properties acquired after January 1, 2009, plus any properties in lease-up and not stabilized as of January 1, 2009. | |
(3) | Other includes ECH, development, condominium conversion overhead of $1.6 million and other corporate operations. Also reflects a $7.4 million elimination of rental income recorded in Northeast, Northwest, Southeast and Southwest operating segments related to ECH. |
26
Quarter Ended September 30, 2010 | ||||||||||||||||||||||||
Northeast | Northwest | Southeast | Southwest | Other (3) | Total | |||||||||||||||||||
Rental income:
|
||||||||||||||||||||||||
Same store (1)
|
$ | 150,296 | $ | 93,705 | $ | 100,284 | $ | 109,775 | $ | — | $ | 454,060 | ||||||||||||
Non-same store/other (2) (3)
|
28,740 | 5,351 | 1,810 | 7,612 | 27,655 | 71,168 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total rental income
|
179,036 | 99,056 | 102,094 | 117,387 | 27,655 | 525,228 | ||||||||||||||||||
|
||||||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Same store (1)
|
55,008 | 36,118 | 41,434 | 40,491 | — | 173,051 | ||||||||||||||||||
Non-same store/other (2) (3)
|
17,242 | 2,146 | 903 | 2,685 | 19,563 | 42,539 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total operating expenses
|
72,250 | 38,264 | 42,337 | 43,176 | 19,563 | 215,590 | ||||||||||||||||||
|
||||||||||||||||||||||||
NOI:
|
||||||||||||||||||||||||
Same store (1)
|
95,288 | 57,587 | 58,850 | 69,284 | — | 281,009 | ||||||||||||||||||
Non-same store/other (2) (3)
|
11,498 | 3,205 | 907 | 4,927 | 8,092 | 28,629 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total NOI
|
$ | 106,786 | $ | 60,792 | $ | 59,757 | $ | 74,211 | $ | 8,092 | $ | 309,638 | ||||||||||||
|
(1) | Same store primarily includes all properties acquired or completed and stabilized prior to July 1, 2009, less properties subsequently sold, which represented 117,286 units. | |
(2) | Non-same store primarily includes properties acquired after July 1, 2009, plus any properties in lease-up and not stabilized as of July 1, 2009. | |
(3) | Other includes ECH, development, condominium conversion overhead of $0.1 million and other corporate operations. Also reflects a $3.2 million elimination of rental income recorded in Northeast, Northwest, Southeast and Southwest operating segments related to ECH. |
Quarter Ended September 30, 2009 | ||||||||||||||||||||||||
Northeast | Northwest | Southeast | Southwest | Other (3) | Total | |||||||||||||||||||
Rental income:
|
||||||||||||||||||||||||
Same store (1)
|
$ | 146,157 | $ | 93,551 | $ | 98,961 | $ | 109,740 | $ | — | $ | 448,409 | ||||||||||||
Non-same store/other (2) (3)
|
5,932 | 500 | — | 3,742 | 19,005 | 29,179 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total rental income
|
152,089 | 94,051 | 98,961 | 113,482 | 19,005 | 477,588 | ||||||||||||||||||
|
||||||||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Same store (1)
|
53,287 | 35,377 | 41,530 | 39,621 | — | 169,815 | ||||||||||||||||||
Non-same store/other (2) (3)
|
3,386 | 457 | 10 | 1,812 | 20,129 | 25,794 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total operating expenses
|
56,673 | 35,834 | 41,540 | 41,433 | 20,129 | 195,609 | ||||||||||||||||||
|
||||||||||||||||||||||||
NOI:
|
||||||||||||||||||||||||
Same store (1)
|
92,870 | 58,174 | 57,431 | 70,119 | — | 278,594 | ||||||||||||||||||
Non-same store/other (2) (3)
|
2,546 | 43 | (10 | ) | 1,930 | (1,124 | ) | 3,385 | ||||||||||||||||
|
||||||||||||||||||||||||
Total NOI
|
$ | 95,416 | $ | 58,217 | $ | 57,421 | $ | 72,049 | $ | (1,124 | ) | $ | 281,979 | |||||||||||
|
(1) | Same store primarily includes all properties acquired or completed and stabilized prior to July 1, 2009, less properties subsequently sold, which represented 117,286 units. | |
(2) | Non-same store primarily includes properties acquired after July 1, 2009, plus any properties in lease-up and not stabilized as of July 1, 2009. | |
(3) | Other includes ECH, development, condominium conversion overhead of $0.6 million and other corporate operations. Also reflects a $2.8 million elimination of rental income recorded in Northeast, Northwest, Southeast and Southwest operating segments related to ECH. |
(a) | Northeast — New England (excluding Boston), Boston, New York Metro, DC Northern Virginia and Suburban Maryland. |
(b) | Northwest — Central Valley, Denver, Portland, San Francisco Bay Area and Seattle/Tacoma. |
(c) | Southeast — Atlanta, Jacksonville, Orlando, South Florida, Tampa and Tulsa. |
(d) | Southwest — Albuquerque, Inland Empire, Los Angeles, Orange County, Phoenix and San Diego. |
27
Nine Months Ended September 30, | Quarter Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Rental income
|
$ | 1,517,302 | $ | 1,433,865 | $ | 525,228 | $ | 477,588 | ||||||||
Property and maintenance expense
|
(386,518 | ) | (363,354 | ) | (135,000 | ) | (122,305 | ) | ||||||||
Real estate taxes and insurance expense
|
(175,491 | ) | (158,306 | ) | (61,189 | ) | (54,579 | ) | ||||||||
Property management expense
|
(60,548 | ) | (56,457 | ) | (19,401 | ) | (18,725 | ) | ||||||||
|
||||||||||||||||
Total operating expenses
|
(622,557 | ) | (578,117 | ) | (215,590 | ) | (195,609 | ) | ||||||||
|
||||||||||||||||
Net operating income
|
$ | 894,745 | $ | 855,748 | $ | 309,638 | $ | 281,979 | ||||||||
|
• | Repaid $75.2 million in mortgage loans; | ||
• | Redeemed its Series E and Series H Cumulative Convertible Preferred Shares for cash consideration of $0.8 million and 355,581 Common Shares (inclusive of any shares converted after September 30, 2010 and prior to the redemption); | ||
• | Acquired one operating property containing 138 units for $52.3 million and two land parcels for $14.6 million; | ||
• | Sold one property containing 152 units for $11.1 million; and | ||
• | Filed a universal shelf registration statement for an unlimited amount of equity and debt securities for issuance by the Company and the Operating Partnership that was automatically effective upon filing with the SEC in October 2010 (under SEC regulations enacted in 2005, the registration statement automatically expires on October 14, 2013 and does not contain a maximum issuance amount). |
28
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
• | We intend to actively acquire and/or develop multifamily properties for rental operations as market conditions dictate. We may underestimate the costs necessary to bring an acquired property up to standards established for its intended market position or to complete a development property. Additionally, we expect that other major real estate investors with significant capital will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development 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 expect to develop properties ourselves in addition to co-investing with our development partners. The total number of development units, 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 housing and single family housing, slow or negative employment growth, availability of low interest mortgages for single family home buyers 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 Annual Report on Form 10-K, particularly those under “Item 1A. Risk Factors”. |
29
• | Leveraging our size and scale in four critical ways: |
• | Investing in apartment communities located in strategically targeted markets to maximize our total risk-adjusted return on invested capital; | ||
• | Meeting the needs of our residents by offering a wide array of product choices and a commitment to service; | ||
• | Engaging, retaining and attracting the best employees by providing them with the education, resources and opportunities to succeed; and | ||
• | Sharing resources and best practices in property management across the enterprise. |
• | Owning a highly diversified portfolio in our target markets. Target markets are defined by a combination of the following criteria: |
• | High barrier-to-entry markets where, because of land scarcity or government regulation, it is difficult or costly to build new apartment complexes leading to low supply; | ||
• | Markets with high single family housing prices making our apartments a more economical housing choice and allowing us to more readily increase rents; | ||
• | Strong economic growth leading to household formation and job growth, which in turn leads to high demand for our apartments; and | ||
• | Markets with an attractive quality of life leading to high demand and retention. |
• | Giving residents reasons to continue living in properties owned by the Company by providing a range of product choices available in our diversified portfolio and by enhancing their experience with us through meticulous customer service by our employees and by providing various value-added services. | ||
• | Being open and responsive to changes in the market in order to take advantage of investment opportunities that align with our long-term vision. |
• | strategically targeted markets; | ||
• | income levels and employment growth trends in the relevant market; | ||
• | employment and household growth and net migration in the relevant market’s population; | ||
• | barriers to entry that would limit competition (zoning laws, building permit availability, supply of undeveloped or developable real estate, local building costs and construction costs, among other factors); | ||
• | the location, construction quality, age, condition and design of the property; | ||
• | the current and projected cash flow of the property and the ability to increase cash flow; |
30
• | the potential for capital appreciation of the property; | ||
• | the terms of resident leases, including the potential for rent increases; | ||
• | the potential for economic growth and the tax and regulatory environment of the community in which the property is located; | ||
• | the occupancy and demand by residents for properties of a similar type in the vicinity (the overall market and submarket); | ||
• | the prospects for liquidity through sale, financing or refinancing of the property; | ||
• | the benefits of integration into existing operations; | ||
• | purchase prices and yields of available existing stabilized properties, if any; | ||
• | competition from existing multifamily properties, comparably priced single family homes or rentals, residential properties under development and the potential for the construction of new multifamily properties in the area; and | ||
• | opportunistic selling based on demand and price of high quality assets. |
31
• | Acquired $1.0 billion of apartment properties consisting of 12 properties and 2,926 units at a weighted average capitalization (“cap”) rate (see definition below) of 5.5% and four land parcels for $54.3 million, all of which we deem to be in our strategic targeted markets; | ||
• | Acquired one unoccupied property in the second quarter of 2010 (425 Mass) for $166.8 million consisting of 559 units that is expected to stabilize in its third year of ownership at an 8.5% yield on cost and one property in the third quarter of 2010 (Vantage Pointe) for $200.0 million consisting of 679 units that was in the early stages of lease up and is expected to stabilize in its third year of ownership at a 7.0% yield on cost; | ||
• | Acquired the 75% equity interest it did not own in seven previously unconsolidated properties consisting of 1,811 units at an implied cap rate of 8.4% in exchange for an approximate $30.0 million payment to its joint venture partner; | ||
• | Sold $172.0 million of consolidated apartment properties consisting of 11 properties and 2,437 units at a weighted average cap rate of 7.5%, 2 condominium units for $0.4 million and one land parcel for $4.0 million, the majority of which was in exit or less desirable markets; and | ||
• | Sold the last of its 25% equity interests in an institutional joint venture consisting of 27 unconsolidated properties containing 6,275 apartment units. These properties were valued in their entirety at $417.8 million which results in an implied weighted average cap rate of 7.5% (generating cash to the Company, net of debt repayments, of $26.9 million). |
32
Results | Statistics | |||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Description | Revenues | Expenses | NOI | Rental Rate (1) | Occupancy | Turnover | ||||||||||||||||||
YTD 2010
|
$ | 1,338,659 | $ | 515,549 | $ | 823,110 | $ | 1,344 | 94.9% | 43.7% | ||||||||||||||
YTD 2009
|
$ | 1,351,788 | $ | 506,910 | $ | 844,878 | $ | 1,375 | 93.7% | 47.2% | ||||||||||||||
|
||||||||||||||||||||||||
Change
|
$ | (13,129 | ) | $ | 8,639 | $ | (21,768 | ) | $ | (31 | ) | 1.2% | (3.5% | ) | ||||||||||
|
||||||||||||||||||||||||
Change
|
(1.0% | ) | 1.7% | (2.6% | ) | (2.3% | ) |
(1) | Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period. |
33
% of Actual | ||||||||||||||||||||
YTD 2010 | ||||||||||||||||||||
Actual | Actual | $ | % | Operating | ||||||||||||||||
YTD 2010 | YTD 2009 | Change | Change | Expenses | ||||||||||||||||
Real estate taxes
|
$ | 135,169 | $ | 137,170 | $ | (2,001 | ) | (1.5% | ) | 26.2% | ||||||||||
On-site payroll (1)
|
125,363 | 122,276 | 3,087 | 2.5% | 24.3% | |||||||||||||||
Utilities (2)
|
80,692 | 79,099 | 1,593 | 2.0% | 15.7% | |||||||||||||||
Repairs and maintenance (3)
|
77,346 | 74,262 | 3,084 | 4.2% | 15.0% | |||||||||||||||
Property management costs (4)
|
53,814 | 50,016 | 3,798 | 7.6% | 10.4% | |||||||||||||||
Insurance
|
16,785 | 16,774 | 11 | 0.1% | 3.3% | |||||||||||||||
Leasing and advertising
|
11,823 | 12,240 | (417 | ) | (3.4% | ) | 2.3% | |||||||||||||
Other operating expenses (5)
|
14,557 | 15,073 | (516 | ) | (3.4% | ) | 2.8% | |||||||||||||
|
||||||||||||||||||||
Same store operating expenses
|
$ | 515,549 | $ | 506,910 | $ | 8,639 | 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, unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs. | |
(4) | Property management costs — Includes payroll and related expenses for departments, or portions of departments, that directly support on-site management. These include such departments as regional and corporate property management, property accounting, human resources, training, marketing and revenue management, procurement, real estate tax, property legal services and information technology. | |
(5) | Other operating expenses — Includes administrative costs such as office supplies, telephone and data charges and association and business licensing fees. |
Nine Months Ended September 30, | ||||||||
2010 | 2009 | |||||||
(Amounts in thousands) | ||||||||
Operating income
|
$ | 366,769 | $ | 387,409 | ||||
Adjustments:
|
||||||||
Non-same store operating results
|
(71,635 | ) | (10,870 | ) | ||||
Fee and asset management revenue
|
(7,596 | ) | (7,928 | ) | ||||
Fee and asset management expense
|
4,364 | 5,916 | ||||||
Depreciation
|
500,173 | 428,751 | ||||||
General and administrative
|
31,035 | 30,476 | ||||||
Impairment
|
— | 11,124 | ||||||
|
||||||||
|
||||||||
Same store NOI
|
$ | 823,110 | $ | 844,878 | ||||
|
2010 Same Store Assumptions | ||||
Physical occupancy
|
94.9 | % | ||
Revenue change
|
(0.25 | %) | ||
Expense change
|
1.50 | % | ||
NOI change
|
(1.25 | %) |
34
• | Development and other miscellaneous properties in lease-up of $25.3 million; | ||
• | Newly stabilized development and other miscellaneous properties of $2.6 million; | ||
• | Properties acquired in 2009 and 2010 of $37.6 million; and | ||
• | Partially offset by an allocation of property management costs not included in same store results and operating activities from other miscellaneous operations, such as the Company’s corporate housing business. |
35
36
Results | Statistics | |||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Rental | ||||||||||||||||||||||||
Description | Revenues | Expenses | NOI | Rate (1) | Occupancy | Turnover | ||||||||||||||||||
Q3 2010
|
$ | 454,060 | $ | 173,051 | $ | 281,009 | $ | 1,360 | 95.0% | 17.6% | ||||||||||||||
Q3 2009
|
$ | 448,409 | $ | 169,815 | $ | 278,594 | $ | 1,362 | 93.7% | 18.5% | ||||||||||||||
|
||||||||||||||||||||||||
Change
|
$ | 5,651 | $ | 3,236 | $ | 2,415 | $ | (2 | ) | 1.3% | (0.9% | ) | ||||||||||||
|
||||||||||||||||||||||||
Change
|
1.3% | 1.9% | 0.9% | (0.1% | ) |
(1) | Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period. |
% of Actual | ||||||||||||||||||||
Q3 2010 | ||||||||||||||||||||
Actual | Actual | $ | % | Operating | ||||||||||||||||
Q3 2010 | Q3 2009 | Change | Change | Expenses | ||||||||||||||||
Real estate taxes
|
$ | 43,973 | $ | 45,936 | $ | (1,963 | ) | (4.3% | ) | 25.4% | ||||||||||
On-site payroll (1)
|
42,324 | 40,414 | 1,910 | 4.7% | 24.4% | |||||||||||||||
Utilities (2)
|
26,954 | 26,050 | 904 | 3.5% | 15.6% | |||||||||||||||
Repairs and maintenance (3)
|
26,974 | 25,866 | 1,108 | 4.3% | 15.6% | |||||||||||||||
Property management costs (4)
|
18,253 | 16,591 | 1,662 | 10.0% | 10.5% | |||||||||||||||
Insurance
|
5,637 | 5,634 | 3 | 0.1% | 3.3% | |||||||||||||||
Leasing and advertising
|
4,460 | 4,694 | (234 | ) | (5.0% | ) | 2.6% | |||||||||||||
Other operating expenses (5)
|
4,476 | 4,630 | (154 | ) | (3.3% | ) | 2.6% | |||||||||||||
|
||||||||||||||||||||
Same store operating expenses
|
$ | 173,051 | $ | 169,815 | $ | 3,236 | 1.9% | 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, unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs. | |
(4) | Property management costs — Includes payroll and related expenses for departments, or portions of departments, that directly support on-site management. These include such departments as regional and corporate property management, property accounting, human resources, training, marketing and revenue management, procurement, real estate tax, property legal services and information technology. | |
(5) | Other operating expenses — Includes administrative costs such as office supplies, telephone and data charges and association and business licensing fees. |
37
Quarter Ended September 30, | ||||||||
2010 | 2009 | |||||||
(Amounts in thousands) | ||||||||
Operating income
|
$ | 127,196 | $ | 128,655 | ||||
Adjustments:
|
||||||||
Non-same store operating results
|
(28,629 | ) | (3,385 | ) | ||||
Fee and asset management revenue
|
(2,128 | ) | (2,653 | ) | ||||
Fee and asset management expense
|
704 | 1,931 | ||||||
Depreciation
|
173,642 | 144,165 | ||||||
General and administrative
|
10,224 | 9,881 | ||||||
|
||||||||
|
||||||||
Same store NOI
|
$ | 281,009 | $ | 278,594 | ||||
|
• | Development and other miscellaneous properties in lease-up of $9.3 million; | ||
• | Properties acquired in 2009 and 2010 of $16.7 million; and | ||
• | Partially offset by an allocation of property management costs not included in same store results and operating activities from other miscellaneous operations, such as the Company’s corporate housing business. |
38
• | Disposed of 11 consolidated properties, 27 unconsolidated properties, 2 condominium units and one land parcel, receiving net proceeds of approximately $161.5 million; | ||
• | Obtained $124.0 million in new mortgage financing; | ||
• | Issued $600.0 million of unsecured notes receiving net proceeds of $595.4 million before underwriting fees and other expenses; and | ||
• | Issued approximately 3.2 million Common Shares and received net proceeds of $98.0 million. | ||
During the nine months ended September 30, 2010, the above proceeds were primarily utilized to: | |||
• | Acquire 14 rental properties and four land parcels for approximately $1.1 billion; | ||
• | Acquire the 75% equity interest it did not own in seven previously unconsolidated properties consisting of 1,811 units in exchange for an approximate $26.9 million payment to its joint venture partner (net of $3.1 million in cash acquired); | ||
• | Invest $98.3 million primarily in development projects; | ||
• | Repurchase 58,130 Common Shares, utilizing cash of $1.9 million (see Note 3); | ||
• | Repay $503.6 million of mortgage loans; and | ||
• | Settle a forward starting swap, utilizing cash of $10.0 million. |
39
Weighted | ||||||||||||||||
Weighted | Average | |||||||||||||||
Average | Maturities | |||||||||||||||
Amounts (1) | % of Total | Rates (1) | (years) | |||||||||||||
Secured
|
$ | 4,845,244 | 47.6 | % | 4.84 | % | 8.4 | |||||||||
Unsecured
|
5,331,283 | 52.4 | % | 4.95 | % | 4.7 | ||||||||||
|
||||||||||||||||
Total
|
$ | 10,176,527 | 100.0 | % | 4.90 | % | 6.4 | |||||||||
|
||||||||||||||||
|
||||||||||||||||
Fixed Rate Debt:
|
||||||||||||||||
Secured — Conventional
|
$ | 3,885,690 | 38.2 | % | 5.75 | % | 7.0 | |||||||||
Unsecured — Public/Private
|
4,373,624 | 43.0 | % | 5.80 | % | 5.3 | ||||||||||
|
||||||||||||||||
Fixed Rate Debt
|
8,259,314 | 81.2 | % | 5.77 | % | 6.1 | ||||||||||
|
||||||||||||||||
|
||||||||||||||||
Floating Rate Debt:
|
||||||||||||||||
Secured — Conventional
|
353,892 | 3.5 | % | 2.50 | % | 3.5 | ||||||||||
Secured — Tax Exempt
|
605,662 | 5.9 | % | 0.50 | % | 20.6 | ||||||||||
Unsecured — Public/Private
|
811,659 | 8.0 | % | 1.73 | % | 1.6 | ||||||||||
Unsecured — Revolving Credit Facility
|
146,000 | 1.4 | % | 0.67 | % | 1.4 | ||||||||||
|
||||||||||||||||
Floating Rate Debt
|
1,917,213 | 18.8 | % | 1.39 | % | 7.7 | ||||||||||
|
||||||||||||||||
|
||||||||||||||||
Total
|
$ | 10,176,527 | 100.0 | % | 4.90 | % | 6.4 | |||||||||
|
(1) | Net of the effect of any derivative instruments. Weighted average rates are for the nine months ended September 30, 2010. |
40
Weighted Average | Weighted Average | |||||||||||||||||||||||
Fixed | Floating | Rates on Fixed | Rates on | |||||||||||||||||||||
Year | Rate (1) | Rate (1) | Total | % of Total | Rate Debt (1) | Total Debt (1) | ||||||||||||||||||
2010
|
$ | 4,087 | $ | 17,812 | $ | 21,899 | 0.2 | % | 7.35 | % | 3.39 | % | ||||||||||||
2011
|
999,622 | (2) | 741,382 | (3) | 1,741,004 | 17.1 | % | 5.43 | % | 3.69 | % | |||||||||||||
2012
|
774,807 | 184,537 | (4) | 959,344 | 9.4 | % | 5.68 | % | 4.85 | % | ||||||||||||||
2013
|
270,415 | 312,160 | 582,575 | 5.7 | % | 6.75 | % | 4.91 | % | |||||||||||||||
2014
|
562,456 | 22,054 | 584,510 | 5.8 | % | 5.32 | % | 5.25 | % | |||||||||||||||
2015
|
358,167 | — | 358,167 | 3.5 | % | 6.40 | % | 6.40 | % | |||||||||||||||
2016
|
1,150,352 | — | 1,150,352 | 11.3 | % | 5.35 | % | 5.35 | % | |||||||||||||||
2017
|
1,355,863 | 456 | 1,356,319 | 13.4 | % | 5.87 | % | 5.87 | % | |||||||||||||||
2018
|
80,782 | 44,677 | 125,459 | 1.2 | % | 5.73 | % | 4.28 | % | |||||||||||||||
2019
|
801,786 | 20,766 | 822,552 | 8.1 | % | 5.49 | % | 5.37 | % | |||||||||||||||
2020+
|
1,900,977 | 573,369 | 2,474,346 | 24.3 | % | 5.68 | % | 4.54 | % | |||||||||||||||
|
||||||||||||||||||||||||
Total
|
$ | 8,259,314 | $ | 1,917,213 | $ | 10,176,527 | 100.0 | % | 5.77 | % | 4.88 | % | ||||||||||||
|
(1) | Net of the effect of any derivative instruments. Weighted average rates are as of September 30, 2010. | |
(2) | Includes $482.5 million face value of 3.85% convertible unsecured debt with a final maturity of 2026. The notes are callable by the Company on or after August 18, 2011. The notes are putable by the holders on August 18, 2011, August 15, 2016 and August 15, 2021. | |
(3) | Includes the Company’s $500.0 million term loan facility, which originally matured on October 5, 2010. Effective April 12, 2010, the Company exercised the first of its two one-year extension options. As a result, the maturity date is now October 5, 2011 and there is one remaining one-year extension option exercisable by the Company. | |
(4) | Includes $146.0 million outstanding on the Company’s unsecured revolving credit facility. As of September 30, 2010, there was approximately $1.2 billion available on this facility. |
41
Unamortized | ||||||||||||||||||||
Coupon | Due | Face | Premium/ | Net | ||||||||||||||||
Rate | Date | Amount | (Discount) | Balance | ||||||||||||||||
Fixed Rate Notes:
|
||||||||||||||||||||
|
6.950 | % | 03/02/11 | $ | 93,096 | $ | 404 | $ | 93,500 | |||||||||||
|
6.625 | % | 03/15/12 | 253,858 | (275 | ) | 253,583 | |||||||||||||
|
5.500 | % | 10/01/12 | 222,133 | (438 | ) | 221,695 | |||||||||||||
|
5.200 | % | 04/01/13 | (1) | 400,000 | (296 | ) | 399,704 | ||||||||||||
Fair Value Derivative Adjustments
|
(1) | (300,000 | ) | — | (300,000 | ) | ||||||||||||||
|
5.250 | % | 09/15/14 | 500,000 | (244 | ) | 499,756 | |||||||||||||
|
6.584 | % | 04/13/15 | 300,000 | (496 | ) | 299,504 | |||||||||||||
|
5.125 | % | 03/15/16 | 500,000 | (291 | ) | 499,709 | |||||||||||||
|
5.375 | % | 08/01/16 | 400,000 | (1,082 | ) | 398,918 | |||||||||||||
|
5.750 | % | 06/15/17 | 650,000 | (3,433 | ) | 646,567 | |||||||||||||
|
7.125 | % | 10/15/17 | 150,000 | (457 | ) | 149,543 | |||||||||||||
|
4.750 | % | 07/15/20 | 600,000 | (4,464 | ) | 595,536 | |||||||||||||
|
7.570 | % | 08/15/26 | 140,000 | — | 140,000 | ||||||||||||||
|
3.850 | % | 08/15/26 | (2) | 482,545 | (6,936 | ) | 475,609 | ||||||||||||
|
||||||||||||||||||||
|
4,391,632 | (18,008 | ) | 4,373,624 | ||||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Floating Rate Notes:
|
||||||||||||||||||||
|
||||||||||||||||||||
|
04/01/13 | (1) | 300,000 | — | 300,000 | |||||||||||||||
Fair Value Derivative Adjustments
|
(1) | 11,659 | — | 11,659 | ||||||||||||||||
Term Loan Facility
|
LIBOR+0.50% | 10/05/11 | (3) (4) | 500,000 | — | 500,000 | ||||||||||||||
|
||||||||||||||||||||
|
811,659 | — | 811,659 | |||||||||||||||||
|
||||||||||||||||||||
Revolving Credit Facility:
|
LIBOR+0.50% | 02/28/12 | (3) (5) | 146,000 | — | 146,000 | ||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Total Unsecured Debt
|
$ | 5,349,291 | $ | (18,008 | ) | $ | 5,331,283 | |||||||||||||
|
(1) | $300.0 million in fair value interest rate swaps converts a portion of the 5.200% notes due April 1, 2013 to a floating interest rate. | |
(2) | Convertible notes mature on August 15, 2026. The notes are callable by the Company on or after August 18, 2011. The notes are putable by the holders on August 18, 2011, August 15, 2016 and August 15, 2021. | |
(3) | Facilities are private. All other unsecured debt is public. | |
(4) | Represents the Company’s $500.0 million term loan facility, which originally matured on October 5, 2010. Effective April 12, 2010, the Company exercised the first of its two one-year extension options. As a result, the maturity date is now October 5, 2011 and there is one remaining one-year extension option exercisable by the Company. | |
(5) | Represents amount outstanding on the Company’s unsecured revolving credit facility which matures on February 28, 2012. As of September 30, 2010, there was approximately $1.2 billion available on this facility. |
42
Secured Debt
|
$ | 4,845,244 | 47.6 | % | ||||||||||||||||
Unsecured Debt
|
5,331,283 | 52.4 | % | |||||||||||||||||
|
||||||||||||||||||||
Total Debt
|
10,176,527 | 100.0 | % | 41.4 | % | |||||||||||||||
|
||||||||||||||||||||
Common Shares (includes Restricted Shares)
|
283,971,112 | 95.3 | % | |||||||||||||||||
Units (includes OP Units and LTIP Units)
|
13,859,444 | 4.7 | % | |||||||||||||||||
|
||||||||||||||||||||
Total Shares and Units
|
297,830,556 | 100.0 | % | |||||||||||||||||
Common Share Equivalents (see below)
|
392,697 | |||||||||||||||||||
|
||||||||||||||||||||
Total outstanding at quarter-end
|
298,223,253 | |||||||||||||||||||
Common Share Price at September 30, 2010
|
$ | 47.57 | ||||||||||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
|
14,186,480 | 98.6 | % | |||||||||||||||||
Perpetual Preferred Equity (see below)
|
200,000 | 1.4 | % | |||||||||||||||||
|
||||||||||||||||||||
Total Equity
|
14,386,480 | 100.0 | % | 58.6 | % | |||||||||||||||
|
||||||||||||||||||||
Total Market Capitalization
|
$ | 24,563,007 | 100.0 | % |
Annual | Annual | Weighted | Common | |||||||||||||||||||||||||||||
Redemption | Outstanding | Liquidation | Dividend | Dividend | Average | Conversion | Share | |||||||||||||||||||||||||
Series | Date | Shares | Value | Per Share | Amount | Rate | Ratio | Equivalents | ||||||||||||||||||||||||
Preferred Shares:
|
||||||||||||||||||||||||||||||||
7.00% Series E (1)
|
11/1/98 | 323,666 | $ | 8,091 | $ | 1.75 | $ | 567 | 1.1128 | 360,176 | ||||||||||||||||||||||
7.00% Series H (1)
|
6/30/98 | 22,459 | 562 | 1.75 | 39 | 1.4480 | 32,521 | |||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Total Convertible Preferred Equity
|
346,125 | $ | 8,653 | $ | 606 | 7.00 | % | 392,697 |
(1) | Both the Series E and the Series H Preferred Shares have been called for redemption effective November 1, 2010. |
Annual | Annual | Weighted | ||||||||||||||||||||||
Redemption | Outstanding | Liquidation | Dividend | Dividend | Average | |||||||||||||||||||
Series | Date | Shares | Value | Per Share | Amount | Rate | ||||||||||||||||||
Preferred Shares:
|
||||||||||||||||||||||||
8.29% Series K
|
12/10/26 | 1,000,000 | $ | 50,000 | $ | 4.145 | $ | 4,145 | ||||||||||||||||
6.48% Series N
|
6/19/08 | 600,000 | 150,000 | 16.20 | 9,720 | |||||||||||||||||||
|
||||||||||||||||||||||||
Total Perpetual Preferred Equity
|
1,600,000 | $ | 200,000 | $ | 13,865 | 6.93 | % |
43
• | Replacements (inside the unit) . These include: |
• | flooring such as carpets, hardwood, vinyl, linoleum 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/shades. |
• | Building improvements ( outside the 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; |
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• | 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. |
Total | Avg. | Building | Avg. | Avg. | ||||||||||||||||||||||||
Units (1) | Replacements (2) | Per Unit | Improvements | Per Unit | Total | Per Unit | ||||||||||||||||||||||
Same Store Properties (3)
|
116,775 | $ | 54,840 | $ | 469 | $ | 37,577 | $ | 322 | $ | 92,417 | $ | 791 | |||||||||||||||
|
||||||||||||||||||||||||||||
Non-Same Store Properties (4)
|
11,574 | 2,409 | 289 | 3,595 | 431 | 6,004 | 720 | |||||||||||||||||||||
|
||||||||||||||||||||||||||||
Other (5)
|
— | 292 | 246 | 538 | ||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total
|
128,349 | $ | 57,541 | $ | 41,418 | $ | 98,959 | |||||||||||||||||||||
|
(1) | Total Units — Excludes 4,680 military housing units, for which repairs and maintenance expenses and capital expenditures to real estate are self-funded and do not consolidate into the Company’s results. | |
(2) | Replacements — Includes new expenditures inside the units such as appliances, mechanical equipment, fixtures and flooring, including carpeting. Replacements for same store properties also include $23.0 million spent on various assets related to unit renovations/rehabs (primarily kitchens and baths) designed to reposition these assets for higher rental levels in their respective markets. | |
(3) | Same Store Properties — Primarily includes all properties acquired or completed and stabilized prior to January 1, 2009, less properties subsequently sold. | |
(4) | Non-Same Store Properties — Primarily includes all properties acquired during 2009 and 2010, plus any properties in lease-up and not stabilized as of January 1, 2009. Per unit amounts are based on a weighted average of 8,336 units. | |
(5) | Other — Primarily includes expenditures for properties sold during the period. |
45
46
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Nine Months Ended September 30, | Quarter Ended September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Net income
|
$ | 97,771 | $ | 334,718 | $ | 29,826 | $ | 143,365 | ||||||||
Adjustments:
|
||||||||||||||||
Net (income) loss attributable to Noncontrolling Interests:
|
||||||||||||||||
Preference Interests and Units
|
— | (9 | ) | — | (2 | ) | ||||||||||
Partially Owned Properties
|
623 | 391 | 188 | 317 | ||||||||||||
Depreciation
|
500,173 | 428,751 | 173,642 | 144,165 | ||||||||||||
Depreciation — Non-real estate additions
|
(5,009 | ) | (5,569 | ) | (1,640 | ) | (1,777 | ) | ||||||||
Depreciation — Partially Owned and Unconsolidated Properties
|
(849 | ) | 656 | (856 | ) | 225 | ||||||||||
Net (gain) on sales of unconsolidated entities
|
(28,101 | ) | (6,718 | ) | (22,544 | ) | (3,959 | ) | ||||||||
Discontinued operations:
|
||||||||||||||||
Depreciation
|
1,522 | 22,736 | 377 | 5,487 | ||||||||||||
Net (gain) on sales of discontinued operations
|
(69,538 | ) | (274,933 | ) | (9,285 | ) | (129,135 | ) | ||||||||
Net incremental gain (loss) on sales of condominium units
|
619 | (450 | ) | (12 | ) | (785 | ) | |||||||||
|
||||||||||||||||
FFO (1) (2)
|
497,211 | 499,573 | 169,696 | 157,901 | ||||||||||||
Preferred distributions
|
(10,855 | ) | (10,859 | ) | (3,617 | ) | (3,619 | ) | ||||||||
|
||||||||||||||||
|
||||||||||||||||
FFO available to Common Shares and Units (1) (2)
|
$ | 486,356 | $ | 488,714 | $ | 166,079 | $ | 154,282 | ||||||||
|
(1) | The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (“FFO”) (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Company commences the conversion of units to condominiums, it simultaneously discontinues depreciation of such property. FFO available to Common Shares and Units is calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares in accordance with accounting principles generally accepted in the United States. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the “Noncontrolling Interests — Operating Partnership”. Subject to certain restrictions, the Noncontrolling Interests — Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis. | |
(2) | The Company believes that FFO and FFO available to Common Shares and 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 can help compare the operating performance of a company’s real estate between periods or as compared to different companies. FFO and FFO available to Common Shares and Units do not represent net income, net income available to Common Shares or net cash flows from operating activities in accordance with GAAP. Therefore, FFO and FFO available to Common Shares and Units should not be exclusively considered as alternatives to net income, net income available to Common Shares or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company’s calculation of FFO and FFO available to Common Shares and 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. |
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49
50
EQUITY RESIDENTIAL
|
||||
Date: November 4, 2010 | By: | /s/ Mark J. Parrell | ||
Mark J. Parrell | ||||
Executive Vice President and
Chief Financial Officer |
||||
Date: November 4, 2010 | By: | /s/ Ian S. Kaufman | ||
Ian S. Kaufman | ||||
Senior Vice President and
Chief Accounting Officer |
||||
51
Exhibit | Description | Location | ||
10.1*
|
First Amendment to Second Restated 2002 Share Incentive Plan. | Attached herein. | ||
|
||||
31.1
|
Certification of David J. Neithercut, Chief Executive Officer. | Attached herein. | ||
|
||||
31.2
|
Certification of Mark J. Parrell, Chief Financial Officer. | Attached herein. | ||
|
||||
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted | Attached herein. | ||
|
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of | |||
|
David J. Neithercut, Chief Executive Officer of the Company. | |||
|
||||
32.2
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted | Attached herein. | ||
|
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of | |||
|
Mark J. Parrell, Chief Financial Officer of the Company. | |||
|
||||
101
|
XBRL (Extensible Business Reporting Language). The following | Attached herein. | ||
|
materials from Equity Residential’s Quarterly Report on Form | |||
|
10-Q for the period ended September 30, 2010, formatted in | |||
|
XBRL: (i) consolidated balance sheets, (ii) consolidated | |||
|
statements of operations, (iii) consolidated statements of | |||
|
cash flows, (iv) consolidated statement of changes in equity | |||
|
and (v) notes to consolidated financial statements. As | |||
|
provided in Rule 406T of Regulation S-T, this information is | |||
|
furnished and not filed for purpose of Sections 11 and 12 of | |||
|
the Securities Act of 1933 and Section 18 of the Securities | |||
|
Exchange Act of 1934. |
* | Management contracts and compensatory plans or arrangements filed as exhibits to this report are identified by an asterisk. |
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
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DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
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No information found
No Customers Found
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
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