-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rsu33GKLB4F+5CMT23etL9S+ogiCCn7tIDT9F3bY4E1d1gePoLW4vFoJtf+4L3Vi QswazT1gNNhObQN47HKy3Q== 0001157523-03-006289.txt : 20031105 0001157523-03-006289.hdr.sgml : 20031105 20031105095931 ACCESSION NUMBER: 0001157523-03-006289 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031104 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031105 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EQUITY RESIDENTIAL CENTRAL INDEX KEY: 0000906107 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 363877868 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12252 FILM NUMBER: 03978008 BUSINESS ADDRESS: STREET 1: EQUITY RESIDENTIAL STREET 2: 2 N RIVERSIDE PLAZA, STE 400 CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129281178 MAIL ADDRESS: STREET 1: TWO N RIVERSIDE PLAZA STREET 2: SUITE 450 CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: EQUITY RESIDENTIAL PROPERTIES TRUST DATE OF NAME CHANGE: 19930524 8-K 1 a4507814.txt EQUITY RESIDENTIAL 8-K As filed with the Securities and Exchange Commission on November 5, 2003 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): November 4, 2003 EQUITY RESIDENTIAL (Exact Name of Registrant as Specified in its Charter) Maryland 1-12252 13-3675988 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation or organization) File Number) Identification No.) Two North Riverside Plaza, Suite 400 Chicago, Illinois 60606 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (312) 474-1300 Not applicable (Former Name or Former Address, if Changed Since Last Report) ITEM 7. Financial Statements, Pro forma Financial Information and Exhibits Exhibit Number Exhibit - ----------- ------------------------------------------------------------- 99.1 Press Release dated November 4, 2003, announcing the results of operations and financial condition of Equity Residential as of September 30, 2003 and for the nine months and quarter then ended. ITEM 12. Results of Operations and Financial Condition On November 4, 2003, Equity Residential issued a press release announcing its results of operations and financial condition as of September 30, 2003 and for the nine months and quarter then ended. The press release is attached hereto as Exhibit 99.1. The information contained in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished and shall not be deemed "filed" with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by Equity Residential under the Securities Act of 1933, as amended. 2 - -------------------------------------------------------------------------------- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. EQUITY RESIDENTIAL Date: November 5, 2003 By: /s/ MICHAEL J. McHUGH ------------------------- Name: Michael J. McHugh ------------------------- Its: Executive Vice President, Chief Accounting Officer and Treasurer ------------------------- 3 EX-99 3 a4507814ex991.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Equity Residential Reports Third Quarter Results CHICAGO--(BUSINESS WIRE)--Nov. 4, 2003--Equity Residential (NYSE:EQR) today reported results for the quarter and nine months ended September 30, 2003. All per share results are reported on a fully diluted basis. "We are encouraged by signs of an economic recovery," said Bruce W. Duncan, Equity Residential's President and CEO. "However, until we reach the point that we have sustained job growth, we do not anticipate much improvement in our business." Third Quarter 2003 For the quarter ended September 30, 2003, the Company reported earnings of $0.41 per share compared to $0.23 per share in the third quarter of 2002. The quarterly increase is primarily attributable to higher gains on property sales. Funds from Operations (FFO) for the quarter were $167.3 million, or $0.56 per share, compared to $162.9 million, or $0.54 per share, in the same period of 2002. Effective January 1, 2003, the Company no longer adds back impairment losses when computing FFO in accordance with NAREIT's definition. As a result, third quarter 2002 FFO per share of $0.54 reflects a $17.4 million, or $0.06 per share, charge that the Company took at that time as an impairment on the value of its corporate housing business and technology investments. Total revenues from continuing operations for the quarter were $473.0 million compared to $469.0 million in the third quarter of 2002. Nine Months Ended September 30, 2003 For the nine months ended September 30, 2003, the Company reported earnings of $1.23 per share compared to $0.83 per share in the same period of 2002. The nine- month increase is primarily attributable to higher gains on property sales. FFO were $504.9 million, or $1.70 per share, compared to $544.7 million, or $1.81 per share, for the nine months ended September 30, 2002. As noted in the section of this release regarding Third Quarter 2003 results, effective January 1, 2003, the Company no longer adds back impairment losses when computing FFO in accordance with NAREIT's definition. As a result, the nine-month 2002 FFO per share of $1.81 reflects an $18.0 million, or $0.06 per share, charge that the Company took in the third quarter 2002 as an impairment on the value of its corporate housing business and technology investments. Total revenues from continuing operations remained constant at $1.4 billion for the nine months ended September 30, 2003 and September 30, 2002, respectively. "Same-Store" Results On a "same-store" third quarter to third quarter comparison, which includes 181,656 units, revenues decreased 1.9 percent, expenses increased 4.3 percent and net operating income (NOI) decreased 5.7 percent. On a sequential "same-store" comparison for these same 181,656 units from second quarter 2003 to third quarter 2003, revenues remained flat, expenses increased 3.1 percent and NOI decreased 1.9 percent. On a "same-store" nine-month to nine-month comparison, which includes 179,233 units, revenues decreased 2.8 percent, expenses increased 5.4 percent and NOI decreased 7.5 percent. Acquisitions/Dispositions During the third quarter of 2003, the Company acquired two properties, consisting of 720 units, for an aggregate purchase price of $112.0 million at an average capitalization (cap) rate of 6.2 percent. Also during the quarter, the Company sold 19 properties, consisting of 5,688 units, for an aggregate sale price of $304.8 million at an average cap rate of 7.4 percent. During the first nine months of 2003, the Company acquired eight properties, consisting of 2,678 units, for an aggregate purchase price of $389.7 million at an average cap rate of 6.6 percent and sold 63 properties, consisting of 15,996 units, for an aggregate sale price of $803.2 million at an average cap rate of 7.5 percent. Fourth Quarter/Year End 2003 Results Equity Residential expects to announce fourth quarter/year end 2003 results on Wednesday, February 4, 2004 and host a conference call to discuss those results at 10:00 a.m. CT that day. Equity Residential is the largest publicly traded apartment company in America. Nationwide, Equity Residential owns or has investments in 990 properties in 34 states consisting of 212,147 units. For more information on Equity Residential, please visit our website at www.equityapartments.com. Forward-Looking Statements The Company lists parameters for 2003 and 2004 results in the final page of this release. 2003 and 2004 results will depend upon a slowdown in multifamily starts and economic recovery and job growth. The forward-looking statements contained in this news release regarding 2003 and 2004 results are further subject to certain risks and uncertainties including, without limitation, the risks described under the heading "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityapartments.com. This news release also contains forward-looking statements concerning development properties. The total number of units and cost of development and completion dates reflect the Company's best estimates and are subject to uncertainties arising from changing economic conditions (such as costs of labor and construction materials), completion and local government regulation. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. A live web cast of the Company's conference call discussing these results and outlook for 2003 and 2004 will take place today at 1:00 p.m. Central. Please visit the Investor Information section of the Company's web site at www.equityapartments.com for the link. A replay of the web cast will be available for two weeks at this site. EQUITY RESIDENTIAL CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands except per share data) (Unaudited) Nine Months Ended Quarter Ended September 30, September 30, ----------------------- ------------------- 2003 2002 2003 2002 ----------------------- ------------------- REVENUES Rental income $1,393,278 $1,396,069 $469,893 $466,379 Fee and asset management 10,961 6,957 3,083 2,647 ----------- ----------- --------- --------- Total revenues 1,404,239 1,403,026 472,976 469,026 ----------- ----------- --------- --------- EXPENSES Property and maintenance 384,772 358,252 132,406 123,887 Real estate taxes and insurance 149,202 141,624 50,008 47,087 Property management 48,827 56,101 16,633 18,438 Fee and asset management 5,556 5,409 1,949 1,789 Depreciation 341,723 322,615 115,346 109,331 General and administrative 28,854 33,000 8,708 10,673 Impairment on technology investments 872 872 291 291 Impairment on corporate housing business - 17,122 - 17,122 ----------- ----------- --------- --------- Total expenses 959,806 934,995 325,341 328,618 ----------- ----------- --------- --------- Operating income 444,433 468,031 147,635 140,408 Interest and other income 13,740 11,526 6,612 2,231 Interest: Expense incurred, net (246,793) (252,892) (82,792) (83,141) Amortization of deferred financing costs (4,406) (4,267) (1,319) (1,344) ----------- ----------- --------- --------- Income before allocation to Minority Interests, income (loss) from investments in unconsolidated entities, net gain (loss) on sales of unconsolidated entities and discontinued operations 206,974 222,398 70,136 58,154 Allocation to Minority Interests: Operating Partnership (27,434) (19,067) (9,153) (5,283) Partially Owned Properties (77) (1,584) 166 (259) Income (loss) from investments in unconsolidated entities (3,594) (1,746) (1,850) (1,979) Net gain (loss) on sales of unconsolidated entities 4,673 (626) (2) (5,872) ----------- ----------- --------- --------- Income from continuing operations 180,542 199,375 59,297 44,761 Net gain on sales of discontinued operations 218,975 61,209 77,983 32,763 Discontinued operations, net 9,494 42,252 (7) 11,137 ----------- ----------- --------- --------- Net income 409,011 302,836 137,273 88,661 Preferred distributions (73,115) (72,969) (24,698) (24,188) ----------- ----------- --------- --------- Net income available to Common Shares $335,896 $229,867 $112,575 $64,473 =========== =========== ========= ========= Earnings per share - basic: Income from continuing operations available to Common Shares $0.46 $0.49 $0.15 $0.09 =========== =========== ========= ========= Net income available to Common Shares $1.24 $0.84 $0.41 $0.24 =========== =========== ========= ========= Weighted average Common Shares outstanding 271,622 272,738 272,787 273,943 =========== =========== ========= ========= Earnings per share - diluted: Income from continuing operations available to Common Shares $0.46 $0.49 $0.15 $0.08 =========== =========== ========= ========= Net income available to Common Shares $1.23 $0.83 $0.41 $0.23 =========== =========== ========= ========= Weighted average Common Shares outstanding 296,184 298,690 297,941 299,057 =========== =========== ========= ========= Distributions declared per Common Share outstanding $1.2975 $1.2975 $0.4325 $0.4325 =========== =========== ========= ========= EQUITY RESIDENTIAL CONSOLIDATED STATEMENTS OF FUNDS FROM OPERATIONS (Amounts in thousands except per share data) (Unaudited) Nine Months Ended Quarter Ended September 30, September 30, ------------------- ------------------- 2003 2002 2003 2002 ------------------- ------------------- Net income $409,011 $302,836 $137,273 $88,661 Net income allocation to Minority Interests-Operating Partnership 27,434 19,067 9,153 5,283 Adjustments: Depreciation 341,723 322,615 115,346 109,331 Depreciation - Non-real estate additions (6,524) (6,823) (1,926) (2,250) Depreciation - Partially Owned Properties (6,240) (5,710) (2,124) (1,959) Depreciation - Unconsolidated Properties 15,618 14,468 5,468 5,563 Net (gain) loss on sales of unconsolidated entities (4,673) 626 2 5,872 Discontinued Operations: Depreciation 13,175 30,591 2,160 9,029 Net gain on sales of depreciable property (211,488) (60,011) (73,383) (32,435) --------- --------- --------- --------- FFO (1)(2) 578,036 617,659 191,969 187,095 Preferred distributions (73,115) (72,969) (24,698) (24,188) --------- --------- --------- --------- FFO available to Common Shares and OP Units - basic $504,921 $544,690 $167,271 $162,907 ========= ========= ========= ========= FFO available to Common Shares and OP Units - diluted $525,750 $566,146 $174,206 $169,914 ========= ========= ========= ========= FFO per share and OP Unit - basic $1.72 $1.84 $0.57 $0.55 ========= ========= ========= ========= FFO per share and OP Unit - diluted $1.70 $1.81 $0.56 $0.54 ========= ========= ========= ========= Weighted average Common Shares and OP Units outstanding - basic 293,900 295,483 295,032 296,519 ========= ========= ========= ========= Weighted average Common Shares and OP Units outstanding - diluted 310,112 313,148 311,848 313,148 ========= ========= ========= ========= (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), excluding gains (or losses) from sales of 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. Accordingly, the Company included in FFO its incremental gains or losses from the sale of condominium units to third parties, which represented net gains of $7,487 and $1,198 for the nine months ended September 30, 2003 and 2002, respectively, and $4,600 and $328 for the quarters ended September 30, 2003 and 2002, respectively. Effective January 1, 2003, the Company no longer adds back impairment losses when computing FFO in accordance with NAREIT's definition. As a result, FFO for the nine months and quarter ended September 30, 2002 have been reduced by $17,994 and $17,413, respectively, to conform to the current year presentation. (2) The Company believes that FFO is helpful to investors as a supplemental measure of the operating performance of a real estate company because it provides investors an understanding of the ability of the Company to incur and service debt and to make capital expenditures. FFO in and of itself does not represent net income or net cash flows from operating activities in accordance with GAAP. Therefore, FFO should not be exclusively considered as an alternative to net income or to net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company's calculation of FFO may differ from other real estate companies due to variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies. EQUITY RESIDENTIAL CONSOLIDATED BALANCE SHEETS (Amounts in thousands except for share amounts) (Unaudited) September December 30, 31, 2003 2002 ------------ ------------ ASSETS Investment in real estate Land $1,816,571 $1,803,577 Depreciable property 11,062,709 11,240,245 Construction in progress 2,617 2,441 ------------ ------------ Investment in real estate 12,881,897 13,046,263 Accumulated depreciation (2,303,479) (2,112,017) ------------ ------------ Investment in real estate, net of accumulated depreciation 10,578,418 10,934,246 Cash and cash equivalents 372,586 29,875 Investments in unconsolidated entities 521,750 509,789 Rents receivable 1,038 2,926 Deposits - restricted 287,838 141,278 Escrow deposits - mortgage 44,648 50,565 Deferred financing costs, net 31,616 32,144 Goodwill, net 30,000 30,000 Other assets 122,204 80,094 ------------ ------------ Total assets $11,990,098 $11,810,917 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Mortgage notes payable $2,818,321 $2,927,614 Notes, net 2,748,345 2,456,085 Line of credit - 140,000 Accounts payable and accrued expenses 89,545 64,369 Accrued interest payable 71,767 63,151 Rents received in advance and other liabilities 178,280 165,095 Security deposits 44,987 45,333 Distributions payable 145,214 140,844 ------------ ------------ Total liabilities 6,096,459 6,002,491 ------------ ------------ Commitments and contingencies Minority Interests: Operating Partnership 344,766 349,646 Preference Interests 246,000 246,000 Junior Preference Units 5,846 5,846 Partially Owned Properties 8,034 9,811 ------------ ------------ Total Minority Interests 604,646 611,303 ------------ ------------ Shareholders' equity: Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized; 7,064,210 shares issued and outstanding as of September 30, 2003 and 10,524,034 shares issued and outstanding as of December 31, 2002 994,661 946,157 Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 275,197,181 shares issued and outstanding as of September 30, 2003 and 271,095,481 shares issued and outstanding as of December 31, 2002 2,752 2,711 Paid in capital 4,885,823 4,844,542 Deferred compensation (5,535) (12,118) Distributions in excess of accumulated earnings (559,446) (540,380) Accumulated other comprehensive loss (29,262) (43,789) ------------ ------------ Total shareholders' equity 5,288,993 5,197,123 ------------ ------------ Total liabilities and shareholders' equity $11,990,098 $11,810,917 ============ ============ September YTD 2003 vs. September YTD 2002 YTD over YTD Same-Store Results $ in Millions - 179,233 Same-Store Units Description Revenues Expenses NOI(b) ----------- --------- -------- --------- YTD 2003 $1,279.4 $508.7 $770.7 YTD 2002 $1,316.2 $482.6 $833.6 --------- -------- --------- Change $(36.8) $26.1 $(62.9) ========= ======== ========= Change (2.8%) 5.4% (7.5%) Third Quarter 2003 vs. Third Quarter 2002 Quarter over Quarter Same-Store Results $ in Millions - 181,656 Same-Store Units Description Revenues Expenses NOI(b) ----------- --------- -------- --------- Q3 2003 $433.8 $176.3 $257.5 Q3 2002 $442.2 $169.1 $273.1 --------- -------- --------- Change $(8.4) $7.2 $(15.6) ========= ======== ========= Change (1.9%) 4.3% (5.7%) Third Quarter 2003 vs. Second Quarter 2003 Sequential Quarter over Quarter Same-Store Results $ in Millions - 181,656 Same-Store Units(a) Description Revenues Expenses NOI(b) ----------- --------- -------- --------- Q3 2003 $433.8 $176.3 $257.5 Q2 2003 $433.5 $171.1 $262.4 --------- -------- --------- Change $0.3 $5.2 $(4.9) ========= ======== ========= Change 0.1% 3.1% (1.9%) (a) Includes the same units as the Third Quarter 2003 vs. Third Quarter 2002 Same Store results for comparability purposes. Same-Store Occupancy Statistics YTD 2003 93.0% Q3 2003 93.5% Q3 2003 93.5% YTD 2002 94.0% Q3 2002 93.9% Q2 2003 93.1% ------------ --------- ----- Change (1.0%) Change (0.4%) Change 0.4% (b) The Company's primary financial measure for evaluating each of its apartment communities is net operating income ("NOI"). NOI represents rental income less property and maintenance expense, real estate tax and insurance expense, and property management expense. The Company believes that NOI is helpful to investors as a supplemental measure of the operating performance of a real estate company because it is a direct measure of the actual operating results of the Company's apartment communities. September YTD 2003 vs. September YTD 2002 Same-Store Results by Market Sep YTD Sep YTD % of Weighted Actual Average Markets Units NOI Occupancy % -------------------------- ---------- --------------- ------------ 1 Boston 5,352 6.9% 94.9% 2 Atlanta 12,111 5.4% 91.8% 3 San Francisco Bay Area 5,010 5.1% 95.1% 4 South Florida 8,345 4.9% 94.0% 5 Phoenix 10,533 4.6% 88.8% 6 Los Angeles 4,073 4.3% 95.2% 7 Dallas/Ft Worth 9,229 4.1% 93.2% 8 Denver 7,523 4.0% 92.3% 9 New England (excl Boston) 6,112 3.9% 95.9% 10 DC Suburban Maryland 5,525 3.7% 94.9% 11 San Diego 3,708 3.7% 94.9% 12 Seattle 5,872 3.2% 93.2% 13 Orlando 6,461 3.1% 93.6% 14 Orange Co 3,013 3.0% 94.9% 15 New York Metro Area 2,306 2.8% 94.8% 16 North Florida 6,222 2.7% 93.8% 17 Inland Empire, CA 3,404 2.7% 94.8% 18 Tampa/Ft Myers 5,417 2.2% 92.9% 19 Minn/St Paul 3,826 2.1% 91.1% 20 DC Suburban Virginia 2,631 2.1% 95.7% ---------- --------------- ------------ Top 20 Markets 116,673 74.5% 93.3% All Other Markets 62,560 25.5% 92.5% ---------- --------------- ------------ Total 179,233 100.0% 93.0% ========== =============== ============ Increase (Decrease) from Prior Year --------------------------------------- Markets Revenues Expenses NOI Occupancy --------------------------- ---------- ---------- ------- --------- 1 Boston (0.9%) 10.8% (5.8%) (1.6%) 2 Atlanta (7.3%) 3.2% (13.8%) (1.7%) 3 San Francisco Bay Area (7.9%) 5.1% (13.0%) (0.7%) 4 South Florida 0.0% 7.9% (4.9%) (0.8%) 5 Phoenix (4.4%) 4.9% (10.3%) (1.3%) 6 Los Angeles 2.6% 6.5% 1.0% (0.9%) 7 Dallas/Ft Worth (6.5%) 1.5% (12.6%) (1.6%) 8 Denver (8.3%) 5.5% (14.6%) (0.8%) 9 New England (excl Boston) 3.7% 10.7% (0.6%) (0.5%) 10 DC Suburban Maryland 1.9% 12.3% (2.8%) (0.9%) 11 San Diego 1.2% 6.1% (0.8%) (0.9%) 12 Seattle (4.6%) 3.2% (9.1%) 0.0% 13 Orlando (2.5%) 5.7% (7.4%) (1.1%) 14 Orange Co 1.7% 3.6% 0.9% 0.0% 15 New York Metro Area (5.1%) 6.6% (10.4%) (0.2%) 16 North Florida 2.6% 5.8% 0.6% 0.6% 17 Inland Empire, CA 3.0% 4.3% 2.4% (1.1%) 18 Tampa/Ft Myers (1.1%) 5.3% (6.0%) (0.7%) 19 Minn/St Paul (8.4%) 2.3% (15.9%) (3.2%) 20 DC Suburban Virginia (0.8%) 15.1% (7.3%) 0.8% ---------- ---------- ------- --------- Top 20 Markets (2.6%) 6.0% (7.1%) (0.9%) All Other Markets (3.4%) 4.1% (8.7%) (1.1%) ---------- ---------- ------- --------- Total (2.8%) 5.4% (7.5%) (1.0%) ========== ========== ======= ========= Third Quarter 2003 vs. Third Quarter 2002 Same-Store Results by Market 3Q03 3Q03 % of Weighted Actual Average Markets Units NOI Occupancy % ------------------------- ---------- --------------- ------------- 1 Boston 5,352 7.0% 96.2% 2 South Florida 9,627 5.5% 93.9% 3 Atlanta 12,111 5.2% 91.9% 4 San Francisco Bay Area 5,010 4.9% 95.7% 5 Los Angeles 4,126 4.4% 95.8% 6 Phoenix 10,533 4.3% 89.4% 7 San Diego 4,048 4.2% 96.6% 8 New England (excl Boston) 6,112 4.0% 95.7% 9 Dallas/Ft Worth 9,229 3.9% 93.6% 10 Denver 7,523 3.8% 92.0% 11 DC Suburban Maryland 5,525 3.7% 94.8% 12 Seattle 5,872 3.2% 93.2% 13 Orlando 6,461 3.1% 94.1% 14 Orange Co 3,013 3.0% 95.6% 15 New York Metro Area 2,306 2.8% 95.9% 16 North Florida 6,222 2.8% 94.4% 17 Inland Empire, CA 3,504 2.8% 94.0% 18 Tampa/Ft Myers 5,417 2.1% 93.0% 19 DC Suburban Virginia 2,631 2.1% 96.0% 20 Minn/St Paul 3,826 2.0% 92.4% ---------- --------------- ------------- Top 20 Markets 118,448 74.7% 93.7% All Other Markets 63,208 25.3% 93.1% ---------- --------------- ------------- Total 181,656 100.0% 93.5% ========== =============== ============= Increase (Decrease) from Prior Quarter --------------------------------------- Markets Revenues Expenses NOI Occupancy -------------------------- ---------- ---------- ------- --------- 1 Boston (0.9%) 7.2% (4.3%) (0.5%) 2 South Florida 1.3% 4.6% (1.0%) (0.0%) 3 Atlanta (6.4%) 4.1% (13.4%) (1.4%) 4 San Francisco Bay Area (6.4%) 8.4% (12.6%) 0.1% 5 Los Angeles 2.5% 5.1% 1.5% (0.2%) 6 Phoenix (2.2%) 5.5% (7.9%) 0.7% 7 San Diego 1.5% 9.3% (1.6%) 0.4% 8 New England (excl Boston) 3.5% 11.0% (0.9%) (0.1%) 9 Dallas/Ft Worth (5.7%) (0.2%) (10.4%) (1.1%) 10 Denver (6.0%) 3.1% (11.0%) (0.2%) 11 DC Suburban Maryland 1.2% 15.1% (5.1%) (0.6%) 12 Seattle (3.3%) 2.5% (6.9%) 0.3% 13 Orlando (1.9%) 2.0% (4.5%) (1.1%) 14 Orange Co 2.9% 2.8% 2.9% 0.2% 15 New York Metro Area (3.1%) 5.1% (7.0%) (0.1%) 16 North Florida 3.5% 3.7% 3.4% 1.1% 17 Inland Empire, CA 1.5% (1.3%) 2.9% (2.1%) 18 Tampa/Ft Myers (0.9%) 5.0% (5.5%) (0.7%) 19 DC Suburban Virginia 0.7% 13.1% (4.7%) 1.6% 20 Minn/St Paul (8.5%) (1.0%) (14.2%) (1.8%) ---------- ---------- ------- --------- Top 20 Markets (1.7%) 5.0% (5.5%) (0.3%) All Other Markets (2.5%) 2.7% (6.4%) (0.5%) ---------- ---------- ------- --------- Total (1.9%) 4.3% (5.7%) (0.4%) ========== ========== ======= ========= Third Quarter 2003 vs. Second Quarter 2003(a) Sequential Same-Store Results by Market 3Q03 3Q03 % of Weighted Actual Average Markets Units NOI Occupancy % ------------------------- ---------- --------------- ------------- 1 Boston 5,352 7.0% 96.2% 2 South Florida 9,627 5.5% 93.9% 3 Atlanta 12,111 5.2% 91.9% 4 San Francisco Bay Area 5,010 4.9% 95.7% 5 Los Angeles 4,126 4.4% 95.8% 6 Phoenix 10,533 4.3% 89.4% 7 San Diego 4,048 4.2% 96.6% 8 New England (excl Boston) 6,112 4.0% 95.7% 9 Dallas/Ft Worth 9,229 3.9% 93.6% 10 Denver 7,523 3.8% 92.0% 11 DC Suburban Maryland 5,525 3.7% 94.8% 12 Seattle 5,872 3.2% 93.2% 13 Orlando 6,461 3.1% 94.1% 14 Orange Co 3,013 3.0% 95.6% 15 New York Metro Area 2,306 2.8% 95.9% 16 North Florida 6,222 2.8% 94.4% 17 Inland Empire, CA 3,504 2.8% 94.0% 18 Tampa/Ft Myers 5,417 2.1% 93.0% 19 DC Suburban Virginia 2,631 2.1% 96.0% 20 Minn/St Paul 3,826 2.0% 92.4% ---------- --------------- ------------- Top 20 Markets 118,448 74.7% 93.7% All Other Markets 63,208 25.3% 93.1% ---------- --------------- ------------- Total 181,656 100.0% 93.5% ========== =============== ============= Increase (Decrease) from Prior Quarter --------------------------------------- Markets Revenues Expenses NOI Occupancy ------------------------- ---------- ---------- ------- --------- 1 Boston 0.8% 0.6% 0.9% 1.4% 2 South Florida (0.1%) 2.6% (2.0%) 0.4% 3 Atlanta (1.1%) 5.1% (5.6%) 0.0% 4 San Francisco Bay Area (1.2%) 6.7% (4.9%) 0.7% 5 Los Angeles 2.3% 4.2% 1.5% 1.1% 6 Phoenix (0.9%) 8.0% (7.4%) 1.1% 7 San Diego 3.2% 10.8% 0.1% 1.7% 8 New England (excl Boston) 1.1% 1.8% 0.6% (0.5%) 9 Dallas/Ft Worth (1.4%) 1.5% (4.0%) 0.2% 10 Denver (1.4%) 4.9% (5.0%) (0.4%) 11 DC Suburban Maryland 0.1% 5.9% (2.9%) (0.2%) 12 Seattle (1.0%) 5.7% (5.1%) (0.4%) 13 Orlando 0.7% 2.3% (0.4%) 0.4% 14 Orange Co 2.8% 5.6% 1.6% 1.2% 15 New York Metro Area (1.0%) (0.0%) (1.5%) 0.1% 16 North Florida 1.0% (3.2%) 3.9% 0.8% 17 Inland Empire, CA (1.3%) 4.7% (4.1%) (1.6%) 18 Tampa/Ft Myers 0.0% 3.0% (2.4%) (0.2%) 19 DC Suburban Virginia 0.1% 4.5% (2.1%) (0.4%) 20 Minn/St Paul 0.5% (1.1%) 1.8% 2.2% ---------- ---------- ------- --------- Top 20 Markets 0.1% 3.6% (2.1%) 0.4% All Other Markets 0.2% 1.9% (1.2%) 0.6% ---------- ---------- ------- --------- Total 0.1% 3.1% (1.9%) 0.4% ========== ========== ======= ========= (a) Includes the same units as the Third Quarter 2003 vs. Third Quarter 2002 Same Store results for comparability purposes. Portfolio Rollforward 2003 Cap Properties Units $ Millions Rate ------------ -------- ----------- ------ 12/31/2002 1,039 223,591 Acquisitions 8 2,678 $389.7 6.6% Dispositions (63) (15,996) $803.2 7.5% Completed Developments 6 1,745 Unit Configuration Changes - 129 ------------ -------- 9/30/2003 990 212,147 Portfolio Rollforward 2003 Q3 Cap Properties Units $ Millions Rate ------------ -------- ----------- ------ 6/30/2003 1,005 216,644 Acquisitions 2 720 $112.0 6.2% Dispositions (19) (5,688) $304.8 7.4% Completed Developments 2 471 ------------ -------- 9/30/2003 990 212,147 Portfolio as of September 30, 2003 Properties Units ------------ -------- Wholly Owned Properties 867 182,163 Partially Owned Properties (Consolidated) 36 6,931 Unconsolidated Properties 87 23,053 ------------ -------- 9/30/2003 990 212,147 Portfolio Summary As of September 30, 2003 % of 2003 % of NOI Market Properties Units Units Budget Boston 33 6,241 2.9% 6.0% New York Metro Area 11 3,144 1.5% 3.9% New England (excluding Boston) 45 6,114 2.9% 3.6% DC Northern Virginia 13 4,704 2.2% 3.6% DC Suburban Maryland 27 5,833 2.7% 3.4% Richmond 7 1,998 0.9% 0.8% ----------- -------- --------- -------- Atlantic Region 136 28,034 13.2% 21.2% South Florida 51 10,702 5.0% 5.4% Orlando 31 6,448 3.0% 2.7% North Florida 50 7,075 3.3% 2.4% Tampa/Ft Myers 35 6,399 3.0% 2.1% ----------- -------- --------- -------- Florida Region 167 30,624 14.4% 12.6% Charlotte 14 4,195 2.0% 1.2% Raleigh/Durham 16 3,917 1.8% 1.2% Greensboro 5 1,581 0.7% 0.6% Greenville 6 1,021 0.5% 0.3% ----------- -------- --------- -------- Carolina Region 41 10,714 5.1% 3.2% Atlanta 68 14,714 6.9% 5.7% Birmingham 4 705 0.3% 0.1% ----------- -------- --------- -------- Georgia Region 72 15,419 7.3% 5.8% Minneapolis/St Paul 18 3,982 1.9% 2.1% Chicago 8 3,509 1.7% 1.7% Southeastern Michigan 24 3,867 1.8% 1.6% Nashville 12 2,964 1.4% 1.0% Northern Ohio 26 2,771 1.3% 1.0% Columbus 31 3,415 1.6% 0.9% Kansas City 8 2,490 1.2% 0.9% Indianapolis 29 3,056 1.4% 0.8% Tulsa 8 2,036 1.0% 0.4% Southern Ohio 22 1,865 0.9% 0.4% St Louis 5 984 0.5% 0.4% Milwaukee 3 686 0.3% 0.4% Lexington 9 1,076 0.5% 0.3% Louisville 8 608 0.3% 0.2% Memphis 1 568 0.3% 0.2% ----------- -------- --------- -------- Midwest Region 212 33,877 16.0% 12.3% Lexford Other 54 4,916 2.3% 1.1% Dallas/Ft Worth 35 11,009 5.2% 3.9% Houston 18 5,525 2.6% 2.6% Austin 11 3,011 1.4% 0.8% San Antonio 9 2,989 1.4% 0.8% ----------- -------- --------- -------- Texas Region 73 22,534 10.6% 8.2% Phoenix 43 12,180 5.7% 4.5% Las Vegas 7 2,078 1.0% 0.8% Tucson 2 558 0.3% 0.1% Albuquerque 2 369 0.2% 0.1% ----------- -------- --------- -------- Arizona Region 54 15,185 7.2% 5.5% Denver 30 8,530 4.0% 4.3% ----------- -------- --------- -------- Colorado Region 30 8,530 4.0% 4.3% Los Angeles 25 5,236 2.5% 4.7% San Diego 13 4,048 1.9% 3.9% Inland Empire, CA 11 3,504 1.7% 2.6% Orange County, CA 8 3,013 1.4% 2.6% ----------- -------- --------- -------- Southern Cal Region 57 15,801 7.4% 13.7% San Francisco Bay Area 25 5,990 2.8% 4.7% Central Valley CA 10 1,595 0.8% 0.5% ----------- -------- --------- -------- Northern Cal Region 35 7,585 3.6% 5.2% Seattle 38 8,110 3.8% 3.5% Portland OR 13 4,678 2.2% 2.1% Tacoma 7 2,341 1.1% 1.0% ----------- -------- --------- -------- Washington Region 58 15,129 7.1% 6.6% ----------- -------- --------- -------- Total 989 208,348 98.2% 100.0% Ft. Lewis - Military Housing 1 3,799 1.8% 0.0% ----------- -------- --------- -------- Grand Total 990 212,147 100.0% 100.0% Debt Summary For the Nine Months Ended 9/30/03 As of 9/30/03 Weighted $ Millions(1) Average Rate(1) ------------------ --------------- Secured $2,819 5.84% Unsecured 2,748 6.39% ------------------ --------------- Total $5,567 6.11% Fixed Rate $4,835 6.64% Floating Rate 732 2.25% ------------------ --------------- Total $5,567 6.11% Above Totals Include: - ----------------------------------- Tax Exempt: Fixed $383 4.31% Floating 568 1.83% ------------------ --------------- Total $951 3.02% Unsecured Revolving Credit Facility $ - 1.85% (1) Net of the effect of any derivative instruments. Debt Maturity Schedule as of September 30, 2003 Year $ Millions % of Total ------ ------------------ ------------ 2003 $ 121 2.2% 2004 600 10.8% 2005 (2) 594 10.7% 2006 (3) 490 8.8% 2007 297 5.3% 2008 488 8.8% 2009 247 4.4% 2010 197 3.5% 2011 689 12.4% 2012+ 1,844 33.1% ------------------ ------------ Total $5,567 100.0% (2)Includes $300 million of unsecured debt with a final maturity of 2015 that is putable/callable in 2005. (3)Includes $150 million of unsecured debt with a final maturity of 2026 that is putable/callable in 2006. Unsecured Public Debt Covenants September 30, 2003 ----------------------- Total Debt to Adjusted Total Assets (not to exceed 60%) 39.1% Secured Debt to Adjusted Total Assets (not to exceed 40%) 19.8% Consolidated Income Available For Debt Service To Maximum Annual Service Charges (must be at least 1.5 to 1) 2.98 Total Unsecured Assets to Unsecured Debt (must be at least 150%) 332.3% These covenants relate to ERP Operating Limited Partnership's outstanding unsecured public debt. Equity Residential is the general partner of ERP Operating Limited Partnership. The terms are defined in the indentures. Capitalization as of September 30, 2003 Total Debt $5,566,665,932 Common Shares & OP Units 297,291,121 Common Share Equivalents 14,881,326 ------------ Total Outstanding at quarter-end 312,172,447 Common Share Price at September 30, 2003 $29.28 ------------ 9,140,409,248 Perpetual Preferred Shares Liquidation Value 615,000,000 Perpetual Preference Interests Liquidation Value 211,500,000 ----------------- Total Market Capitalization $15,533,575,180 Debt/Total Market Capitalization 36% Weighted Average Amounts Outstanding YTD 3Q03 YTD 3Q02 3Q03 3Q02 ------------ ------------ ------------ ----------- Weighted Average Amounts Outstanding for Net Income Purposes: Common Shares - basic 271,622,491 272,738,043 272,786,814 273,943,104 Shares issuable from assumed conversion/vesting of: - OP Units 22,277,751 22,745,327 22,245,483 22,575,907 - convertible preferred shares/units - - - - - share options/restricted shares 2,283,531 3,206,605 2,908,547 2,537,627 ------------ ------------ ------------ ----------- Total Common Shares and OP Units - diluted 296,183,773 298,689,975 297,940,844 299,056,638 Weighted Average Amounts Outstanding for FFO Purposes: OP Units - basic 22,277,751 22,745,327 22,245,483 22,575,907 Common Shares - basic 271,622,491 272,738,043 272,786,814 273,943,104 ------------ ------------ ------------ ----------- Total Common Shares and OP Units - basic 293,900,242 295,483,370 295,032,297 296,519,011 Shares issuable from assumed conversion/vesting of: - convertible preferred shares/units 13,927,899 14,457,685 13,906,988 14,091,406 - share options/restricted shares 2,283,531 3,206,605 2,908,547 2,537,627 ------------ ------------ ------------ ----------- Total Common Shares and OP Units - diluted 310,111,672 313,147,660 311,847,832 313,148,044 Period Ending Amounts Outstanding: OP Units 22,093,940 Common Shares 275,197,181 ------------ Total Common Shares and OP Units 297,291,121 Unconsolidated Entities as of September 30, 2003 (Amounts in thousands except for project and unit amounts) Institutional Stabilized Projects Joint Development Under Ventures Projects(1) Development -------------- ------------ ------------ Total projects 45 12 16 -------------- ------------ ------------ Total units 10,846 3,812 4,336 -------------- ------------ ------------ Company's percentage share of outstanding debt 25.0% 100.0% 100.0% Company's share of outstanding debt (4) $121,200 $331,063 $559,201 (3) -------------- ------------ ------------ Operating information for the nine months ended 09/30/03 (at 100%): Revenue $66,777 $36,540 N/A Operating expenses 29,948 15,152 N/A -------------- ------------ ------------ Net operating income 36,829 21,388 N/A Interest expense 28,083 13,228 N/A Depreciation 14,560 13,312 N/A Amortization 463 878 N/A Other 370 275 N/A ------------- ----------- --------- Net income/(loss) $(6,647) $(6,305) N/A ============= =========== ========= Company's Funds from Operations (FFO) $1,978 $8,532 $12,629 (5) ============= =========== ========= Lexford / Other Totals -------------------- ---------------- Total projects 22 95(2) ------------------ ---------------- Total units 2,616 21,610(2) ------------------ ---------------- Company's percentage share of outstanding debt 11.0% Company's share of outstanding debt (4) $5,089 $1,016,553 ------------------ ---------------- Operating information for the nine months ended 09/30/03 (at 100%): Revenue $11,790 $115,107 Operating expenses 6,018 51,118 ------------------ ---------------- Net operating income 5,772 63,989 Interest expense 2,970 44,281 Depreciation 2,366 30,238 Amortization 179 1,520 Other - 645 ------------------ ---------------- Net income/(loss) $257 $(12,695) ================== ================ Company's Funds from Operations (FFO) $525 $23,664 ================== ================ (1) The Company determines a project to be stabilized once it has maintained an average physical occupancy of 90% or more for a three-month period. (2) Includes nine projects under development containing 2,356 units, which are not included in the Company's property/unit counts at September 30, 2003. Totals exclude Fort Lewis Military Housing consisting of one property and 3,799 units, which is not accounted for under the equity method of accounting. The Fort Lewis Military Housing is included in the Company's property/unit counts as of September 30, 2003. (3) A total of $706.3 million is available for funding under this construction debt, of which $559.2 million was funded and outstanding at September 30, 2003. (4) As of November 4, 2003, the Company has funded $44.0 million as additional collateral on selected debt. All remaining debt is non-recourse to the Company. (5) Represents capitalized interest on the Company's invested capital. Development Projects as of September 30, 2003 (Amounts in millions except for project and unit amounts) Unconsolidated Location No. of Estimated EQR Funded Projects Units Development as of Cost 09/30/2003 --------------------------------------------------------------------- Water Terrace Marina Del Rey, CA I (Regatta I) 450 $235.3 $73.0 Watermarke Irvine, CA 535 120.6 35.2 Bella Vista Woodland Hills, CA I&II (Warner Ridge I&II) 315 80.9 23.6 Concord Center Concord, CA 259 52.3 13.1 1111 25th Washington, DC Street (2440 M St.) 140 37.5 11.3 1210 Washington, DC Massachusetts Ave. 142 36.3 9.1 13th & N Washington, DC Street 170 35.4 12.4 Maples at Haverhill, MA Little River 174 28.0 7.0 Marina Bay II Quincy, MA 108 22.8 5.7 North Pier at Jersey City, NJ Harborside 297 94.2 24.0 Hudson Pointe Jersey City, NJ 181 45.5 11.7 Bella Terra Mukilteo, WA (Village Green at Harbour Pointe) 235 32.7 8.2 City View at Lombard, IL the Highlands (Lombard) 403 67.1 16.8 Ball Park Denver, CO Lofts 355 56.4 14.1 City Place Kansas City, MO (Westport) 288 34.7 8.7 Westbridge Carrollton, TX (Carrollton) 284 21.9 5.5 -------------------------------- Total Projects 16 4,336 $1,001.6 $279.4 ================================== Unconsolidated Location Estimated Total EQR Estimated Projects EQR Fundings Completion Future Date Fundings (1) --------------------------------------------- ----------------------- Water Terrace Marina Del Rey, CA Completed I (Regatta I) $73.0 Watermarke Irvine, CA 35.2 1Q 2004 Bella Vista Woodland Hills, CA 1Q 2004 I&II (Warner Ridge I&II) 23.6 Concord Center Concord, CA 13.1 4Q 2003 1111 25th Washington, DC 4Q 2004 Street (2440 M St.) 11.3 1210 Washington, DC 2Q 2004 Massachusetts Ave. 9.1 13th & N Washington, DC 1Q 2004 Street 12.4 Maples at Haverhill, MA Completed Little River 7.0 Marina Bay II Quincy, MA 5.7 4Q 2003 North Pier at Jersey City, NJ Completed Harborside 24.0 Hudson Pointe Jersey City, NJ 11.7 Completed Bella Terra Mukilteo, WA Completed (Village Green at Harbour Pointe) 8.2 City View at Lombard, IL 4Q 2003 the Highlands (Lombard) 16.8 Ball Park Denver, CO Completed Lofts 14.1 City Place Kansas City, MO Completed (Westport) 8.7 Westbridge Carrollton, TX 4Q 2003 (Carrollton) 5.5 -------- --------- Total Projects 16 $0.0 $279.4 ======== ========= (1) EQR generally funds between 25% and 35% of the estimated development cost for the unconsolidated projects. Maintenance Expenses and Capitalized Improvements to Real Estate For the Nine Months Ended September 30, 2003 (Amounts in thousands except for unit and per unit amounts) ------------------------------------------------- Maintenance Expenses ------------------------------------------------- Total Avg. Avg. Avg. Units Expense Per Payroll Per Per (1) (2) Unit (3) Unit Total Unit -------- -------------- -------------- ------------------- Established Properties (6) 169,402 $72,726 $429 $61,579 $364 $134,305 $793 New Acquisition Properties (7) 11,447 4,645 468 3,123 314 7,768 782 Other (8) 8,245 10,730 8,658 19,388 -------- -------- -------- --------- Total 189,094 $88,101 $73,360 $161,461 ======== ======== ======== ========= ------------------------------------------------------- Capitalized Improvements to Real Estate ------------------------------------------------------- Avg. Building Avg. Avg. Replacements Per Improvements Per Per (4) Unit (5) Unit Total Unit ------------- ------ ------------ ----- --------- ----- Established Properties (6) $44,960 $265 $53,768 $317 $98,728 $582 New Acquisition Properties (7) 1,786 180 3,520 354 5,306 534 Other (8) 8,833 15,612 24,445 ------------- ------------ --------- Total $55,579 $72,900 $128,479 ============= ============ ========= --------------------------------------- Total Expenditures --------------------------------------- Grand Total Avg. Per Unit --------------------------------------- Established Properties (6) $233,033 $1,375 New Acquisition Properties (7) 13,074 1,316 Other (8) 43,833 -------------------- Total $289,940 ==================== (1) Total units exclude 23,053 unconsolidated units. (2) Maintenance expenses include general maintenance costs, unit turnover costs including interior painting, regularly scheduled landscaping and tree trimming costs, security, exterminating, fire protection, snow and ice removal, elevator repairs, and other miscellaneous building repair costs. (3) Maintenance payroll includes employee costs for maintenance, cleaning, housekeeping, and landscaping. (4) Replacements include new expenditures inside the units such as carpets, appliances, mechanical equipment, fixtures and vinyl flooring. (5) Building improvements include roof replacement, paving, amenities and common areas, building mechanical equipment systems, exterior painting and siding, major landscaping, vehicles and office and maintenance equipment. (6) Wholly Owned Properties acquired prior to January 1, 2001. (7) Wholly Owned Properties acquired during 2001, 2002 and 2003. Per unit amounts are based on a weighted average of 9,931 units. (8) Includes properties either Partially Owned or sold during the period, commercial space, condominium conversions and $3.6 million included in building improvements spent on five specific assets related to major renovations and repositioning of these assets. Discontinued Operations (Amounts in thousands) (Unaudited) Nine Months Ended Quarter Ended September 30, September 30, ----------------------------------- 2003 2002 2003 2002 ------------------ ---------------- REVENUES Rental income $51,306 $127,964 $8,050 $37,069 Furniture income - 1,361 - - -------- --------- ------- -------- Total revenues 51,306 129,325 8,050 37,069 -------- --------- ------- -------- EXPENSES (1) Property and maintenance 20,639 37,680 4,345 12,031 Real estate taxes and insurance 5,994 13,504 777 3,745 Property management 103 123 (9) 40 Depreciation 13,175 30,591 2,160 9,029 Furniture expenses - 1,303 - - -------- --------- ------- -------- Total expenses 39,911 83,201 7,273 24,845 -------- --------- ------- -------- Discontinued operating income 11,395 46,124 777 12,224 Interest and other income 175 26 53 - Interest: Expense incurred, net (1,938) (3,815) (722) (1,069) Amortization of deferred financing costs (138) (83) (115) (18) -------- --------- ------- -------- Discontinued operations, net $9,494 $42,252 $(7) $11,137 ======== ========= ======= ======== (1) Includes expenses paid in the current period for Wholly Owned Properties sold in prior periods related to the Company's period of ownership. EQUITY RESIDENTIAL - ---------------------------------------------------------------------- As a result of the Securities and Exchange Commission's Regulation FD, the Company will provide earnings guidance in its quarterly earnings release. These projections are based on current expectations and are forward-looking. Earnings Guidance (per share diluted) ------------------------------------- Q4 2003 2003 2004 -------------- -------------- -------------- Expected EPS (1) $0.45 to $0.46 $1.68 to $1.69 $1.18 to $1.32 Add: Expected depreciation expense 0.40 1.61 1.62 Less: Expected net gain on sales (1) (0.33) (1.07) (0.68) -------------- -------------- -------------- Expected FFO (2) $0.52 to $0.53 $2.22 to $2.23 $2.12 to $2.26 ============== ============== ============== Same-Store Operating Assumptions -------------------------------- 2003 2004 -------------- --------------- Physical occupancy 93.0% 93.0% Revenue change (2.3%) (0.75%) to 1.50% Expense change 5.2% 3.0% to 4.0% NOI change (6.7%) (4.0%) to 0.5% Dispositions $1.0 to $1.2 billion $800 million - ---------------------------------------------------------------------- (1) Earnings per share ("EPS") represents net income per share calculated in accordance with accounting principles generally accepted in the United States. Expected EPS is calculated on a basis consistent with actual EPS. Due to the uncertain timing and extent of property dispositions and the resulting gains/losses on sales, actual EPS could differ materially from expected EPS. (2) The National Association of Real Estate Investment Trusts ("NAREIT") defines funds from operations ("FFO") (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. Expected FFO is calculated on a basis consistent with actual FFO. CONTACT: Equity Residential Marty McKenna, 312-928-1901 -----END PRIVACY-ENHANCED MESSAGE-----