Back to GetFilings.com



 

FORM 10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

 

ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

 

For the Fiscal Year Ended DECEMBER 31, 2003

 

OR

 

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 0-24920

 

ERP OPERATING LIMITED PARTNERSHIP

(Exact Name of Registrant as Specified in Its Charter)

 

Illinois

 

36-3894853

(State or Other Jurisdiction of Incorporation or Organization)

 

(I.R.S. Employer Identification No.)

 

 

 

Two North Riverside Plaza, Chicago, Illinois

 

60606

(Address of Principal Executive Offices)

 

(Zip Code)

 

 

 

(312) 474-1300

(Registrant’s Telephone Number, Including Area Code)

 

 

 

http://www.equityapartments.com

(Registrant’s web site)

 

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

7.57% Notes due August 15, 2026

 

New York Stock Exchange

(Title of Class)

 

(Name of Each Exchange on Which Registered)

 

 

 

Securities registered pursuant to Section 12(g) of the Act:

 

 

 

 

Units of Limited Partnership Interest

 

 

(Title of Class)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ý  No  o

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).  Yes  ý  No  o

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

 

 



 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

2



 

ERP OPERATING LIMITED PARTNERSHIP

 

TABLE OF CONTENTS

 

 

 

PAGE

PART I.

 

 

 

 

 

 

 

Item 1.

Business

4

 

Item 2.

The Properties

16

 

Item 3.

Legal Proceedings

19

 

Item 4.

Submission of Matters to a Vote of Security Holders

19

 

 

 

 

PART II.

 

 

 

 

 

 

 

Item 5.

Market for Registrant’s Common Equity and Related Shareholder Matters

20

 

Item 6.

Selected Financial Data

20

 

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

 

Item 7A.

Quantitative and Qualitative Disclosure about Market Risk

38

 

Item 8.

Financial Statements and Supplementary Data

39

 

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

39

 

Item 9A.

Disclosure Controls and Procedures

39

 

 

 

 

PART III.

 

 

 

 

 

 

 

Item 10.

Trustees and Executive Officers of the Registrant

40

 

Item 11.

Executive Compensation

43

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management

50

 

Item 13.

Certain Relationships and Related Transactions

53

 

Item 14.

Principal Accountant Fees and Services

53

 

 

 

 

PART IV.

 

 

 

 

 

 

 

Item 15.

Exhibits, Financial Statement Schedules and Reports on Form 8-K

55

 

3



 

Item 1.  Business

 

General

 

ERP Operating Limited Partnership (“ERPOP”), an Illinois limited partnership, was formed in May 1993 to conduct the multifamily residential property business of Equity Residential (“EQR”).  EQR is a Maryland real estate investment trust (“REIT”) formed in March 1993 and is a fully integrated real estate company engaged in the acquisition, development, ownership, management and operation of multifamily properties.

 

EQR is one of the largest publicly traded REIT’s and is the largest publicly traded REIT owner of multifamily properties (based on the aggregate market value of EQR’s outstanding Common Shares, the number of apartment units wholly owned and total revenues earned).  The Operating Partnership’s corporate headquarters are located in Chicago, Illinois and the Operating Partnership also leases (under operating leases) approximately thirty-five divisional, regional and area property management offices throughout the United States.

 

EQR is the general partner of, and as of December 31, 2003, owned an approximate 92.7% ownership interest in ERPOP. ERPOP is, directly or indirectly, a partner, member or shareholder of numerous partnerships, limited liability companies and corporations which have been established primarily to own fee simple title to multifamily properties or to conduct property management activities and other businesses related to the ownership and operation of multifamily residential real estate.  As used herein, the term “Operating Partnership” includes ERPOP and those entities owned or controlled by it.  As used herein, the term “Company” means EQR and the Operating Partnership.

 

As of December 31, 2003, the Operating Partnership owned or had investments in 968 properties in 34 states consisting of 207,506 units.  The ownership breakdown includes:

 

 

 

Properties

 

Units

 

Wholly Owned Properties

 

849

 

178,150

 

Partially Owned Properties (Consolidated)

 

35

 

6,778

 

Unconsolidated Properties

 

84

 

22,578

 

 

 

968

 

207,506

 

 

The Operating Partnership has approximately 6,000 employees as of March 1, 2004.  An on-site manager, who supervises the on-site employees and is responsible for the day-to-day operations of the property, directs each of the Operating Partnership’s properties.  An assistant manager and/or leasing staff generally assist the manager.  In addition, a maintenance director at each property supervises a maintenance staff and/or contractors whose responsibilities include a variety of tasks, including responding to service requests, preparing vacant apartments for the next resident and performing preventive maintenance procedures year-round.

 

Certain capitalized terms as used herein are defined in the Notes to Consolidated Financial Statements.

 

Business Objectives and Operating Strategies

 

The Operating Partnership seeks to maximize both current income and long-term growth in income, thereby increasing:

 

                  the value of the properties;

                  distributions on a per limited partnership interest (“OP Unit”) basis; and

                  partners’ value.

 

4



 

The Operating Partnership’s strategies for accomplishing these objectives are:

 

                  maintaining and increasing property occupancy while increasing rental rates;

                  controlling expenses, providing regular preventive maintenance, making periodic renovations and enhancing amenities;

                  maintaining a ratio of consolidated debt-to-total market capitalization of less than 50%;

                  strategically acquiring and disposing of properties, with an emphasis on acquiring attractive properties in high barrier to entry markets and on selling properties in low barrier to entry markets;

                  purchasing newly developed, as well as co-investing in the development of, multifamily communities;

                  entering into joint ventures related to the ownership of established properties; and

                  strategically investing in various businesses that will enhance services for the properties.

 

The Operating Partnership is committed to resident satisfaction by striving to anticipate industry trends and implementing strategies and policies consistent with providing quality resident services.  In addition, the Operating Partnership continuously surveys rental rates of competing properties and conducts resident satisfaction surveys to determine the factors they consider most important in choosing a particular apartment unit and/or property.

 

Acquisition and Development Strategies

 

The Operating Partnership anticipates that future property acquisitions and developments will occur within the United States.  Management will continue to use market information to evaluate opportunities.  The Operating Partnership’s market database allows it to review the primary economic indicators of the markets where the Operating Partnership currently owns properties and where it expects to expand its operations.  Acquisitions and developments may be financed from various sources of capital, which may include retained cash flow, issuance of additional equity and debt securities, sales of properties, joint venture agreements and collateralized and uncollateralized borrowings.  In addition, the Operating Partnership may acquire additional properties in transactions that include the issuance of OP Units as consideration for the acquired properties. Such transactions may, in certain circumstances, enable the sellers to defer, in part, the recognition of taxable income or gain, which might otherwise result from the sales.

 

When evaluating potential acquisitions and developments, the Operating Partnership will consider:

 

                  the geographic area and type of community;

                  the location, construction quality, condition and design of the property;

                  the current and projected cash flow of the property and the ability to increase cash flow;

                  the potential for capital appreciation of the property;

                  the terms of resident leases, including the potential for rent increases;

                  income levels and employment growth trends in the relevant market;

                  employment and household growth and net migration of the relevant market’s population;

                  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;

                  barriers to entry that would limit competition (zoning laws, building permit availability, supply of undeveloped or developable real estate, local building costs and construction labor costs among other factors);

 

5



 

                  purchase prices and yields of available existing stabilized communities, if any; and

                  competition from existing multifamily properties, residential properties under development and the potential for the construction of new multifamily properties in the area.

 

Disposition Strategies

 

Management uses market information to evaluate dispositions.  Factors the Operating Partnership considers in deciding whether to dispose of its properties include the following:

 

                  potential increases in new construction;

                  submarkets that will underperform the average performance of the portfolio in the mid and long-term;

                  markets where the Operating Partnership does not intend to establish long-term concentrations; and

                  age or location of a particular property.

 

The Operating Partnership will reinvest the proceeds received from property dispositions primarily to fund property acquisitions as well as fund development activities.  In addition, when feasible, the Operating Partnership may structure these transactions as tax deferred exchanges.

 

Financing Strategies

 

The Operating Partnership’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 2003 is presented in the following table.  The Operating Partnership calculates the equity component of its market capitalization as the sum of (i) the total outstanding OP Units at the equivalent market value of the closing price of EQR’s Common Shares on the New York Stock Exchange; (ii) the “OP Unit Equivalent” of all convertible preference interests/units; and (iii) the liquidation value of all perpetual preference interests/units outstanding.

 

Capitalization as of December 31, 2003

 

Total Debt

 

 

 

$

5,360,488,661

 

 

 

 

 

 

 

OP Units

 

299,551,617

 

 

 

OP Unit Equivalents (see below)

 

3,598,234

 

 

 

Total Outstanding at year-end

 

303,149,851

 

 

 

EQR Common Share Price at December 31, 2003

 

$

29.51

 

 

 

 

 

 

 

8,945,952,103

 

Perpetual Preference Units Liquidation Value

 

 

 

615,000,000

 

Perpetual Preference Interests Liquidation Value

 

 

 

211,500,000

 

Total Market Capitalization

 

 

 

$

15,132,940,764

 

 

 

 

 

 

 

Total Debt/Total Market Capitalization

 

 

 

35

%

 

6



 

Convertible Preference Units, Preference Interests
and Junior Preference Units
as of December 31, 2003

 

 

 

Units

 

Conversion
Ratio

 

OP Unit
Equivalents

 

Preference Units:

 

 

 

 

 

 

 

Series E

 

2,192,490

 

1.1128

 

2,439,803

 

Series H

 

44,028

 

1.4480

 

63,753

 

Preference Interests:

 

 

 

 

 

 

 

Series H

 

190,000

 

1.5108

 

287,052

 

Series I

 

270,000

 

1.4542

 

392,634

 

Series J

 

230,000

 

1.4108

 

324,484

 

Junior Preference Units:

 

 

 

 

 

 

 

Series A

 

20,333

 

4.081600

 

82,991

 

Series B

 

7,367

 

1.020408

 

7,517

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

3,598,234

 

 

The Operating Partnership’s policies are to maintain a ratio of consolidated debt-to-total market capitalization of less than 50% and that EQR shall not incur indebtedness other than short-term trade, employee compensation or similar indebtedness that will be paid in the ordinary course of business.

 

Equity Offerings For the Years Ended December 31, 2003, 2002 and 2001

 

During 2003, EQR contributed all of the net proceeds, as discussed below, to the Operating Partnership in exchange for OP Units or preference units:

 

                  EQR issued 600,000 Series N Cumulative Redeemable Preferred Shares with a liquidation value of $150.0 million and received net proceeds of approximately $145.3 million.

                  EQR issued 3,249,555 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $68.4 million.

                  EQR issued 289,274 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $6.3 million.

 

During 2002, EQR contributed all of the net proceeds, as discussed below, to the Operating Partnership in exchange for OP Units:

 

                  EQR issued 1,435,115 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $29.6 million.

                  EQR issued 324,238 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $7.4 million.

                  EQR issued 31,354 Common Shares pursuant to its Share Purchase - DRIP Plan and received net proceeds of approximately $0.9 million.

                  EQR issued 41,407 Common Shares pursuant to its Dividend Reinvestment – DRIP Plan and received net proceeds of approximately $1.2 million.

                  EQR repurchased 5,092,300 of its Common Shares on the open market at an average price of $22.58 per share.  The purchases were made between October 1 and October 22, 2002.  EQR paid approximately $115.0 million in connection therewith.  These shares were subsequently retired.  Concurrent with this transaction, the Operating Partnership repurchased and retired 5,092,300 OP Units previously issued to EQR.

 

7



 

During 2001, EQR contributed all of the net proceeds, as discussed below, to the Operating Partnership in exchange for OP Units:

 

                  EQR issued 3,187,217 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $65.4 million.

                  EQR issued 310,261 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $6.9 million.

                  EQR issued 33,106 Common Shares pursuant to its Share Purchase - DRIP Plan and received net proceeds of approximately $0.9 million.

                  EQR issued 42,649 Common Shares pursuant to its Dividend Reinvestment – DRIP Plan and received net proceeds of approximately $1.2 million.

 

In February 1998, EQR filed and the SEC declared effective a Form S-3 Registration Statement to register $1.0 billion of equity securities.  In addition, EQR carried over $272.4 million related to a prior registration statement.  As of February 4, 2004, $956.5 million in equity securities remained available for issuance under this registration statement.  Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of the Operating Partnership in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis) or preference units (on a one-for-one preferred share per preference unit basis).

 

Cumulative through December 31, 2003, a subsidiary of ERPOP issued various series of Preference Interests (the “Preference Interests”) with an equity value of $246.0 million receiving net proceeds of $239.9 million.

 

Debt Offerings For the Years Ended December 31, 2003, 2002 and 2001

 

During 2003:

 

                  The Operating Partnership issued $400.0 million of redeemable unsecured fixed rate notes (the “April  2013 Notes”) in a public debt offering in March 2003.  The April 2013 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis.  The April 2013 Notes are due April 1, 2013.  The annual interest rate on the April 2013 Notes is 5.20%, which is payable semiannually in arrears on April 1 and October 1, commencing October 1, 2003.  The Operating Partnership received net proceeds of approximately $397.5 million in connection with this issuance.

 

During 2002:

 

                  The Operating Partnership issued $400.0 million of redeemable unsecured fixed rate notes (the “March 2012 Notes”) in a public debt offering in March 2002.  The March 2012 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis.  The March 2012 Notes are due March 15, 2012.  The annual interest rate on the March 2012 Notes is 6.625%, which is payable semiannually in arrears on September 15 and March 15, commencing September 15, 2002.  The Operating Partnership received net proceeds of approximately $394.5 million in connection with this issuance.

                  The Operating Partnership issued $50.0 million of redeemable unsecured fixed rate notes (the “November 2007 Notes”) in a public debt offering in November 2002.  The November 2007 Notes are due November 30, 2007.  The annual interest rate on the November 2007 Notes is 4.861%, which is payable semiannually in arrears on May 30 and November 30, commencing May 30, 2003.  The Operating Partnership received net proceeds of approximately $49.9 million in connection with this issuance.

 

8



 

During 2001:

 

                  The Operating Partnership issued $300.0 million of redeemable unsecured fixed rate notes (the “March 2011 Notes”) in a public debt offering in March 2001.  The March 2011 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis.  The March 2011 Notes are due March 2, 2011.  The annual interest rate on the March 2011 Notes is 6.95%, which is payable semiannually in arrears on September 2 and March 2, commencing September 2, 2001.  The Operating Partnership received net proceeds of approximately $297.4 million in connection with this issuance.

 

In June 2003, the Operating Partnership filed and the SEC declared effective a Form S-3 registration statement to register $2.0 billion of debt securities.  In addition, the Operating Partnership carried over $280.0 million related to a prior registration statement.  As of February 4, 2004, $2.28 billion in debt securities remained available for issuance under this registration statement.

 

Credit Facilities

 

In May 2002, the Operating Partnership obtained a new three-year $700.0 million unsecured revolving credit facility maturing May 29, 2005.  The new line of credit replaced the $700.0 million unsecured revolving credit facility that was scheduled to expire in August 2002.  The prior existing revolving credit facility was terminated upon the closing of the new facility.  Advances under the new credit facility bear interest at variable rates based upon LIBOR at various interest periods, plus a spread dependent upon the Operating Partnership’s credit rating, or based upon bids received from the lending group.  As of December 31, 2003, $10.0 million was outstanding and $56.7 million was restricted (dedicated to support letters of credit and not available for borrowing) on the line of credit.  During the year ended December 31, 2003, the weighted average interest rate on borrowings under the line of credit was 1.85%.

 

Business Combinations

 

In January 2002, the Company sold the former Globe Business Resources, Inc. (“Globe”) furniture rental business it acquired in July 2000 for approximately $30.0 million in cash, which approximated the net book value at the sale date.  The Company has retained ownership of the former Globe short-term furnished housing business, which is now known as Equity Corporate Housing (“ECH”).

 

For the year ended December 31, 2002, the Company recorded approximately $17.1 million of asset impairment charges related to ECH.  Following the guidance in SFAS No. 142, these charges were the result of the Company’s decision to reduce the carrying value of ECH to $30.0 million, given the continued weakness in the economy and management’s expectations for near-term performance and were determined based upon a discounted cash flow analysis of the business.  This impairment loss is reflected on the consolidated statements of operations as impairment on corporate housing business and on the consolidated balance sheets as a reduction in goodwill, net.

 

Competition

 

All of the properties are located in developed areas that include other multifamily properties.  The number of competitive multifamily properties in a particular area could have a material effect on the Operating Partnership’s ability to lease units at the properties or at any newly acquired properties and on the rents charged.  The Operating Partnership may be competing with other entities that have greater resources than the Operating Partnership and whose managers have more experience than the Operating Partnership’s managers.  In addition, other forms of rental properties and single-family housing provide housing alternatives to potential residents of multifamily properties.  Throughout 2002 and 2003,

 

9



 

historically low mortgage interest rates coupled with increased residential construction and single-family home sales have had an adverse competitive effect on the Operating Partnership.

 

Risk Factors

 

The following Risk Factors may contain defined terms that are different from those used in the other sections of this report.  Unless otherwise indicated, when used in this section, the terms “we” and “us” refer to ERP Operating Limited Partnership, an Illinois limited partnership, and its subsidiaries.  ERP Operating Limited Partnership is controlled by its general partner, Equity Residential, a Maryland real estate investment trust.

 

Set forth below are the risks that we believe are important to investors who purchase or own our preference interests (“Interests”) of a subsidiary of ERP Operating Limited Partnership; preference units (“Units”); or units of limited partnership interest (“OP Units”) of ERP Operating Limited Partnership, which are redeemable on a one-for-one basis for common shares or their cash equivalent.  In this section, we refer to the Interests, Units and the OP Units together as our “securities,” and the investors who own Interests, Units and/or OP Units as our “security holders.”

 

Our Performance and OP Unit Value are Subject to Risks Associated with the Real Estate Industry

 

General

 

Real property investments are subject to varying degrees of risk and are relatively illiquid. Several factors may adversely affect the economic performance and value of our properties.  These factors include changes in the national, regional and local economic climate, local conditions such as an oversupply of multifamily properties or a reduction in demand for our multifamily properties, the attractiveness of our properties to residents, competition from other available multifamily property owners and changes in market rental rates.  Our performance also depends on our ability to collect rent from residents and to pay for adequate maintenance, insurance and other operating costs, including real estate taxes, which could increase over time.  Also, the expenses of owning and operating a property are not necessarily reduced when circumstances such as market factors and competition cause a reduction in income from the property.

 

We May be Unable to Renew Leases or Relet Units as Leases Expire

 

When our residents decide not to renew their leases upon expiration, we may not be able to relet their units.  Even if the residents do renew or we can relet the units, the terms of renewal or reletting may be less favorable than current lease terms.  Because virtually all of our leases are for apartments, they are generally for terms of no more than one year.  If we are unable to promptly renew the leases or relet the units, or if the rental rates upon renewal or reletting are significantly lower than expected rates, then our results of operations and financial condition will be adversely affected.  Consequently, our cash flow and ability to service debt and make distributions to security holders would be reduced.  As a result of general economic conditions and competitive factors discussed above, we have experienced a trend of declining rents and increased concessions when entering into new leases across our portfolio during the last two years.

 

New Acquisitions or Developments May Fail to Perform as Expected and Competition for Acquisitions May Result in Increased Prices for Properties

 

We intend to continue to actively acquire and develop multifamily properties.  Newly acquired or developed properties may fail to perform as expected.  We may underestimate the costs necessary to bring an acquired property up to standards established for its intended market position or to develop a 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

 

10



 

where we focus our development efforts.  This competition may increase 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.  The total number of development units, cost 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.

 

Because Real Estate Investments Are Illiquid, We May Not Be Able To Sell Properties When Appropriate

 

Real estate investments generally cannot be sold quickly.  We may not be able to change our portfolio promptly in response to economic or other conditions.  This inability to respond promptly to changes in the performance of our investments could adversely affect our financial condition and ability to make distributions to our security holders.

 

Changes in Laws Could Affect Our Business

 

We are generally not able to pass through to our residents under existing leases real estate taxes, income taxes or other taxes.  Consequently, any such tax increases may adversely affect our financial condition and limit our ability to make distributions to our security holders.  Similarly, changes that increase our potential liability under environmental laws or our expenditures on environmental compliance would adversely affect our cash flow and ability to make distributions on our securities.

 

Environmental Problems are Possible and can be Costly

 

Federal, state and local laws and regulations relating to the protection of the environment may require a current or previous owner or operator of real estate to investigate and clean up hazardous or toxic substances or petroleum product releases at such property.  The owner or operator may have to pay a governmental entity or third parties for property damage and for investigation and clean-up costs incurred by such parties in connection with the contamination. These laws typically impose clean-up responsibility and liability without regard to whether the owner or operator knew of or caused the presence of the contaminants. Even if more than one person may have been responsible for the contamination each person covered by the environmental laws may be held responsible for all of the clean-up costs incurred.  In addition, third parties may sue the owner or operator of a site for damages and costs resulting from environmental contamination emanating from that site.

 

Substantially all of our properties have been the subject of environmental assessments completed by qualified independent environmental consultant companies.  These environmental assessments have not revealed, nor are we aware of, any environmental liability that our management believes would have a material adverse effect on our business, results of operations, financial condition or liquidity.

 

Over the past three years, there have been an increasing number of lawsuits against owners and managers of multifamily properties other than EQR alleging personal injury and property damage caused by the presence of mold in residential real estate.  Some of these lawsuits have resulted in substantial monetary judgments or settlements.  Insurance carriers have reacted to these liability awards by excluding mold related claims from standard policies and pricing mold endorsements at prohibitively high rates.  We have adopted programs designed to minimize the existence of mold in any of our properties as well as guidelines for promptly addressing and resolving reports of mold to minimize any impact mold might have on residents or the property.

 

We cannot be assured that existing environmental assessments of our properties reveal all environmental liabilities, that any prior owner of any of our properties did not create a material environmental condition not known to us, or that a material environmental condition does not

 

11



 

otherwise exist as to any one or more of our properties.

 

Insurance Policy Deductibles and Exclusions

 

In order to partially mitigate the substantial increase in insurance costs in recent years, management has determined to gradually increase deductible and self-insured retention amounts.  As of December 31, 2003, the Operating Partnership’s property insurance policy (for Wholly Owned Properties) provides for a per occurrence deductible of $250,000 and self insured retention of $5.0 million per occurrence, subject to a maximum annual aggregate self insured retention of $7.5 million.  The Operating Partnership’s liability and worker’s compensation policies at December 31, 2003, provide for a $1.0 million per occurrence deductible.  While higher deductible and self-insured retention amounts expose the Operating Partnership to greater potential uninsured losses, management believes that the savings in insurance premium expense justifies this increased exposure.

 

As a result of the terrorist attacks of September 11, 2001, insurance carriers have created exclusions for losses from terrorism from our “all risk” insurance policies.  While separate terrorism insurance coverage is available in certain instances, premiums for such coverage are generally very expensive, with very high deductibles.  Moreover, the terrorism insurance coverage that are available typically excludes coverage for losses from acts of foreign governments as well as nuclear, biological and chemical attacks.  At the present time, the Operating Partnership has determined that it is not economically prudent to obtain terrorism insurance for its portfolio to the extent otherwise available, especially given the significant risks that are not covered by such insurance.  In the event of a terrorist attack impacting one or more of the properties, we could lose the revenues from the property, our capital investment in the property and possibly face liability claims from residents or others suffering injuries or losses. The Operating Partnership believes, however, that the number and geographic diversity of its portfolio helps to mitigate its exposure to the risks associated with potential terrorist attacks.

 
Debt Financing, Preferred Shares and Preference Interests and Units Could Adversely Affect Our Performance

 

General

 
The Operating Partnership’s total debt summary, as of December 31, 2003, included:

 

Debt Summary

 

 

 

$ Millions *

 

Weighted
Average Rate *

 

Secured

 

$

2,694

 

5.80

%

Unsecured

 

2,666

 

6.38

%

Total

 

$

5,360

 

6.08

%

 

 

 

 

 

 

Fixed Rate

 

$

4,610

 

6.65

%

Floating Rate

 

750

 

2.24

%

Total

 

$

5,360

 

6.08

%

 

 

 

 

 

 

Above Totals Include:

 

 

 

 

 

Tax Exempt:

 

 

 

 

 

Fixed

 

$

343

 

4.38

%

Floating

 

587

 

1.74

%

Total

 

$

930

 

3.01

%

 

 

 

 

 

 

Unsecured Revolving Credit Facility

 

$

10

 

1.85

%

 


* Net of the effect of any derivative instruments.

 

12



 

In addition to debt, the Operating Partnership has issued $919.1 million of combined liquidation value of outstanding preference interests and units, with a weighted average dividend preference of 8.17% per annum, as of December 31, 2003.  Our use of debt and preferred equity financing creates certain risks, including the following:

 

Scheduled Debt Payments Could Adversely Affect Our Financial Condition

 

In the future, our cash flow could be insufficient to meet required payments of principal and interest or to pay distributions on our securities at expected levels.

 

We may not be able to refinance existing debt (which in virtually all cases requires substantial principal payments at maturity) and, if we can, the terms of such refinancing might not be as favorable as the terms of existing indebtedness.  If principal payments due at maturity cannot be refinanced, extended or paid with proceeds of other capital transactions, such as new equity capital, our cash flow will not be sufficient in all years to repay all maturing debt.  As a result, we may be forced to postpone capital expenditures necessary for the maintenance of our properties and may have to dispose of one or more properties on terms that would otherwise be unacceptable to us.  The Operating Partnership’s debt maturity schedule as of December 31, 2003 is as follows:

 

Debt Maturity Schedule

 

Year

 

$ Millions

 

% of Total

 

2004

 

$

515

 

9.6

%

2005(1)

 

605

 

11.3

%

2006(2)

 

490

 

9.1

%

2007

 

333

 

6.2

%

2008

 

495

 

9.2

%

2009

 

246

 

4.6

%

2010

 

196

 

3.7

%

2011

 

688

 

12.8

%

2012

 

424

 

7.9

%

2013+

 

1,368

 

25.6

%

Total

 

$

5,360

 

100.0

%

 


(1) Includes $300 million of unsecured debt with a final maturity of 2015 that is putable/callable in 2005.

(2) Includes $150 million of unsecured debt with a final maturity of 2026 that is putable in 2006.

 

Financial Covenants Could Adversely Affect the Operating Partnership’s Financial Condition

 

If a property we own is mortgaged to secure payment of indebtedness and we are unable to meet the mortgage payments, the holder of the mortgage could foreclose on the property, resulting in loss of income and asset value.  Foreclosure on mortgaged properties or an inability to refinance existing indebtedness would likely have a negative impact on our financial condition and results of operations.  A foreclosure could also result in our recognition of taxable income without our actually receiving cash proceeds from the disposition of the property with which to pay the tax.  This could adversely affect our cash flow and could make it more difficult for EQR to meet its REIT distribution requirements.

 

13



 

The mortgages on our properties may contain customary negative covenants that, among other things, limit our ability, without the prior consent of the lender, to further mortgage the property and to reduce or change insurance coverage.  In addition, our unsecured credit facilities contain certain customary restrictions, requirements and other limitations on our ability to incur indebtedness.  The indentures under which a substantial portion of our debt was issued also contain certain financial and operating covenants including, among other things, maintenance of certain financial ratios, as well as limitations on our ability to incur secured and unsecured indebtedness (including acquisition financing), and to sell all or substantially all of our assets.  Our credit facility and indentures are cross-defaulted and also contain cross default provisions with other material indebtedness.  Our unsecured public debt covenants as of December 31, 2003 and 2002, respectively, are (terms are defined in the indentures):

 

Unsecured Public Debt Covenants

 

 

 

As of
12/31/03

 

As of
12/31/02

 

Total Debt to Adjusted Total Assets (not to exceed 60%)

 

39.1

%

39.8

%

 

 

 

 

 

 

Secured Debt to Adjusted Total Assets (not to exceed 40%)

 

19.6

%

21.1

%

 

 

 

 

 

 

Consolidated Income Available For Debt Service To Maximum Annual Service Charges (must be at least 1.5 to 1)

 

2.90

 

3.18

 

 

 

 

 

 

 

Total Unsecured Assets to Unsecured Debt (must be at least 150%)

 

330.2

%

334.8

%

 

Some of the properties were financed with tax-exempt bonds that contain certain restrictive covenants or deed restrictions.  We have retained an independent outside consultant to monitor compliance with the restrictive covenants and deed restrictions that affect these properties.  If these bond compliance requirements restrict our ability to increase our rental rates to attract low or moderate-income residents, or eligible/qualified residents, then our income from these properties may be limited.

 

Our Degree of Leverage Could Limit Our Ability to Obtain Additional Financing

 

Our Consolidated Debt-to-Total Market Capitalization Ratio was 35% as of December 31, 2003.  We have a policy of incurring indebtedness for borrowed money only through ERPOP and its subsidiaries and only if upon such incurrence our debt to market capitalization ratio would be approximately 50% or less.  Our degree of leverage could have important consequences to security holders.  For example, the degree of leverage could affect our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, development or other general corporate purposes, making us more vulnerable to a downturn in business or the economy in general.

 

Rising Interest Rates Could Adversely Affect Cash Flow

 

Advances under our credit facility bear interest at variable rates based upon LIBOR at various interest periods, plus a spread dependent upon our credit rating, or based upon bids received from the lending group.  Certain public issuances of our senior unsecured debt instruments may also, from time to time, bear interest at floating rates.  We may also borrow additional money with variable interest rates in the future.  Increases in interest rates would increase our interest expenses under these debt instruments and would increase the costs of refinancing existing indebtedness and of issuing new debt.  Accordingly, higher interest rates could adversely affect cash flow and our ability to service our debt and to make distributions to security holders.

 

14



 

We Depend on Our Key Personnel

 

We depend on the efforts of the Chairman of EQR’s Board of Trustees, Samuel Zell, and EQR’s executive officers, particularly Bruce W. Duncan, EQR’s President and Chief Executive Officer and Gerald A. Spector, EQR’s Chief Operating Officer.  If they resign, our operations could be temporarily adversely effected.  Mr. Zell has entered into executive compensation and retirement benefit agreements with the Company.  Mr. Duncan and Mr. Spector have entered into Deferred Compensation Agreements with the Company that under certain conditions could provide both with a salary benefit after their respective termination of employment with the Company.  In addition, Mr. Zell and Mr. Spector have entered into Noncompetition Agreements with the Company and Mr. Duncan’s Employment Agreement contains covenants not to compete in favor of the Company.

 

Control and Influence by Significant OP Unit holders Could be Exercised in a Manner Adverse to Other OP Unit holders

 

The consent of certain affiliates of Mr. Zell is required for certain amendments to ERPOP’s Fifth Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”).  As a result of their security ownership and rights concerning amendments to the Partnership Agreement, Mr. Zell may have substantial influence over ERPOP.  Although these OP Unit holders have not agreed to act together on any matter, they would be in a position to exercise even more influence over ERPOP’s affairs if they were to act together in the future.  This influence might be exercised in a manner that is inconsistent with the interests of other OP Unit holders.

 

Our Success is Dependent on our General Partner’s Compliance With Federal Income Tax Requirements

 

We rely to a significant extent upon our general partner, EQR, as our source of equity capital.  EQR is required to satisfy numerous technical requirements to remain qualified as a REIT for federal income tax purposes.  EQR’s failure to qualify as a REIT could have a material adverse impact upon its, and consequently our, ability to raise equity capital.  Please see the “Risk Factors-Our Success as a REIT is Dependent on Compliance with Federal Income Tax Requirements” and “Federal Income Tax Consideration” sections in EQR’s Annual Report on Form 10-K for a discussion of these federal income tax considerations

 

Our General Partner’s Compliance with REIT Distribution Requirements May Affect Our Financial Condition

 

Distribution Requirements May Increase the Indebtedness of the Operating Partnership

 

We may be required from time to time, under certain circumstances, to accrue as income for tax purposes interest and rent earned but not yet received.  In such event, or upon our repayment of principal on debt, we could have taxable income without sufficient cash to enable our general partner to meet the distribution requirements of a REIT.  Accordingly, we could be required to borrow funds or liquidate investments on adverse terms in order to meet these distribution requirements.

 

Available Information

 

You may access our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and any amendments to any of those reports we file with the SEC free of charge at our website, www.equityapartments.com.  These reports are made available at our website as soon as reasonably practicable after we file them with the SEC.

 

15



 

Item 2.  The Properties

 

As of December 31, 2003, the Operating Partnership owned or had investments in 968 properties in 34 states consisting of 207,506 units.  The Operating Partnership’s properties are more fully described as follows:

 

Type

 

Properties

 

Units

 

Average
Units

 

December 31, 2003
Occupancy

 

Garden

 

614

 

162,828

 

265

 

92.4

%

Mid/High-Rise

 

44

 

12,802

 

291

 

86.4

%

Ranch

 

309

 

28,119

 

91

 

91.1

%

Military Housing

 

1

 

3,757

 

3,757

 

95.4

%

Total

 

968

 

207,506

 

 

 

 

 

 

Resident leases are generally for twelve months in length and typically require security deposits.  The garden-style properties are generally defined as properties with two and/or three story buildings while the mid-rise/high-rise are defined as properties with greater than three story buildings.  These two property types typically provide residents with amenities, which may include a clubhouse, swimming pool, laundry facilities and cable television access. Certain of these properties offer additional amenities such as saunas, whirlpools, spas, sports courts and exercise rooms or other amenities.  The ranch-style properties are defined as single story properties, which do not provide additional amenities for residents other than laundry facilities and cable television access.  The military housing properties are defined as those properties located on military bases.

 

It is management’s role to monitor compliance with property policies and to provide preventive maintenance of the properties including common areas, facilities and amenities.  The Operating Partnership has a dedicated training and education department that creates and coordinates training and strategic implementation for the Operating Partnership’s property management personnel.  The Operating Partnership believes that, due in part to its emphasis on training and employee quality, the properties historically have had high occupancy rates.

 

The distribution of the properties throughout the United States reflects the Operating Partnership’s belief that geographic diversification helps insulate the portfolio from regional and economic influences.  At the same time, the Operating Partnership has sought to create clusters of properties within each of its primary markets in order to achieve economies of scale in management and operation.  The Operating Partnership may nevertheless acquire additional multifamily properties located anywhere in the continental United States.

 

The following tables set forth certain information by type and state relating to the Operating Partnership’s properties at December 31, 2003:

 

16



 

GARDEN-STYLE PROPERTIES

 

State

 

Properties

 

Units

 

Percentage of
Total Units

 

December 31, 2003
Occupancy

 

Alabama

 

5

 

896

 

0.43

%

94.2

%

Arizona

 

45

 

12,735

 

6.14

 

88.7

 

California

 

91

 

23,025

 

11.10

 

93.9

 

Colorado

 

29

 

8,175

 

3.94

 

91.1

 

Connecticut

 

22

 

2,633

 

1.27

 

94.4

 

Florida

 

75

 

22,158

 

10.68

 

93.7

 

Georgia

 

36

 

11,277

 

5.43

 

92.7

 

Illinois

 

7

 

2,360

 

1.14

 

93.2

 

Kansas

 

3

 

1,130

 

0.54

 

90.4

 

Maine

 

5

 

672

 

0.32

 

95.9

 

Maryland

 

23

 

5,419

 

2.61

 

93.7

 

Massachusetts

 

35

 

4,829

 

2.33

 

94.7

 

Michigan

 

8

 

2,388

 

1.15

 

90.9

 

Minnesota

 

17

 

3,819

 

1.84

 

90.9

 

Missouri

 

9

 

1,878

 

0.91

 

91.2

 

Nevada

 

3

 

1,220

 

0.59

 

90.1

 

New Hampshire

 

1

 

390

 

0.19

 

89.9

 

New Jersey

 

2

 

980

 

0.47

 

95.2

 

New Mexico

 

2

 

369

 

0.18

 

90.1

 

New York

 

1

 

300

 

0.14

 

91.9

 

North Carolina

 

31

 

8,299

 

4.00

 

92.9

 

Oklahoma

 

8

 

2,036

 

0.98

 

92.1

 

Oregon

 

10

 

3,604

 

1.74

 

92.5

 

Rhode Island

 

5

 

778

 

0.37

 

95.5

 

Tennessee

 

10

 

3,171

 

1.53

 

91.6

 

Texas

 

73

 

22,816

 

11.00

 

91.3

 

Virginia

 

14

 

4,696

 

2.26

 

93.3

 

Washington

 

41

 

10,089

 

4.86

 

90.4

 

Wisconsin

 

3

 

686

 

0.33

 

87.6

 

 

 

 

 

 

 

 

 

 

 

Total Garden-Style

 

614

 

162,828

 

78.47

%

 

 

Average Garden-Style

 

 

 

265

 

 

 

92.4

%

 

17



 

MID-RISE/HIGH-RISE PROPERTIES

 

State

 

Properties

 

Units

 

Percentage of
Total Units

 

December 31, 2003
Occupancy

 

California

 

3

 

873

 

0.42

%

55.5

%

Colorado

 

1

 

355

 

0.17

 

65.2

 

Connecticut

 

2

 

407

 

0.20

 

93.7

 

Florida

 

3

 

653

 

0.31

 

95.4

 

Georgia

 

1

 

322

 

0.16

 

91.0

 

Illinois

 

1

 

1,083

 

0.52

 

89.3

 

Massachusetts

 

12

 

3,253

 

1.57

 

93.4

 

Minnesota

 

1

 

163

 

0.08

 

94.5

 

New Jersey

 

5

 

1,365

 

0.66

 

87.2

 

Ohio

 

1

 

747

 

0.36

 

70.2

 

Oregon

 

1

 

525

 

0.25

 

88.5

 

Texas

 

3

 

596

 

0.29

 

90.7

 

Virginia

 

5

 

1,660

 

0.80

 

92.4

 

Washington

 

5

 

800

 

0.39

 

93.5

 

 

 

 

 

 

 

 

 

 

 

Total Mid-Rise/High-Rise

 

44

 

12,802

 

6.17

%

 

 

Average Mid-Rise/High-Rise

 

 

 

291

 

 

 

86.4

%

 

RANCH-STYLE PROPERTIES

 

Alabama

 

1

 

69

 

0.03

%

100.0

%

Florida

 

87

 

8,176

 

3.94

 

91.0

 

Georgia

 

53

 

4,428

 

2.13

 

89.6

 

Indiana

 

44

 

4,059

 

1.96

 

90.6

 

Kentucky

 

19

 

1,533

 

0.74

 

90.4

 

Maryland

 

4

 

414

 

0.20

 

96.2

 

Michigan

 

17

 

1,536

 

0.74

 

91.7

 

Ohio

 

75

 

7,102

 

3.42

 

92.2

 

Pennsylvania

 

5

 

469

 

0.23

 

88.3

 

South Carolina

 

2

 

187

 

0.09

 

93.0

 

Tennessee

 

2

 

146

 

0.07

 

93.2

 

 

 

 

 

 

 

 

 

 

 

Total Ranch-Style

 

309

 

28,119

 

13.55

%

 

 

Average Ranch-Style

 

 

 

91

 

 

 

91.1

%

 

MILITARY HOUSING PROPERTIES

 

Washington (Ft. Lewis)

 

1

 

3,757

 

1.81

%

95.4

%

 

 

 

 

 

 

 

 

 

 

Total Military Housing

 

1

 

3,757

 

1.81

%

 

 

Average Military Housing

 

 

 

3,757

 

 

 

95.4

%

 

 

 

 

 

 

 

 

 

 

Total Residential Portfolio

 

968

 

207,506

 

100

%

 

 

 

18



 

The properties currently in various stages of development at December 31, 2003 are included in the following table.

 

DEVELOPMENT PROJECTS as of December 31, 2003

(Amounts in millions except for project and unit amounts)

 

 

 

Location

 

Units

 

Estimated
Development Cost

 

Funded
as of
12/31/2003

 

Estimated
Future
Fundings

 

Total Fundings
(1)

 

Estimated
Completion
Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unconsolidated Projects

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Water Terrace I (Regatta I) (2)

 

Marina Del Rey, CA

 

450

 

$

235.3

 

$

73.0

 

 

$

73.0

 

Completed

 

Watermarke

 

Irvine, CA

 

535

 

120.6

 

35.2

 

 

35.2

 

1Q 2004

 

Bella Vista I&II (Warner Ridge I&II)

 

Woodland Hills, CA

 

315

 

80.9

 

24.5

 

 

24.5

 

1Q 2004

 

Concord Center (2)

 

Concord, CA

 

259

 

52.3

 

13.1

 

 

13.1

 

Completed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2400 M Street

 

Washington, DC

 

333

 

104.2

 

37.2

 

 

37.2

 

2Q 2005

 

1111 25th Street (2440 M St.)

 

Washington, DC

 

140

 

37.5

 

11.3

 

 

11.3

 

4Q 2004

 

1210 Massachusetts Ave.

 

Washington, DC

 

142

 

36.3

 

9.1

 

 

9.1

 

2Q 2004

 

13th & N Street

 

Washington, DC

 

170

 

35.4

 

12.4

 

 

12.4

 

1Q 2004

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North Pier at Harborside (2)

 

Jersey City, NJ

 

297

 

94.2

 

24.0

 

 

24.0

 

Completed

 

City View at the Highlands (Lombard)

 

Lombard, IL

 

403

 

67.1

 

16.8

 

 

16.8

 

1Q 2004

 

Ball Park Lofts (2)

 

Denver, CO

 

355

 

56.4

 

14.1

 

 

14.1

 

Completed

 

City Place (Westport) (2)

 

Kansas City, MO

 

288

 

34.7

 

8.7

 

 

8.7

 

Completed

 

Marina Bay II (2)

 

Quincy, MA

 

108

 

22.8

 

5.7

 

 

5.7

 

Completed

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Projects

 

13

 

3,795

 

$

977.7

 

$

285.1

 

$

0.0

 

$

285.1

 

 

 

 


(1)                   The Operating Partnership generally funds between 25% and 35% of the estimated development cost for the unconsolidated projects (constituting 100% of the equity), with the remaining cost financed through third-party construction mortgages.

(2)                   Properties were substantially complete as of December 31, 2003.  As such, these properties are also included in the outstanding property and unit counts.

 

Item 3.  Legal Proceedings

 

The Operating Partnership is a party to a class action lawsuit in Florida state court alleging that several of the types of fees that the Operating Partnership charged when residents breached their leases were illegal, as were all efforts to collect them.  The Operating Partnership is vigorously contesting the plaintiffs’ claims and has sought immediate appellate review of the 2003 class action certification decision.  Due to the uncertainty of many critical factual and legal issues, including the viability of the case as a class action, it is not possible to determine or predict the outcome.  While no assurances can be given, the Operating Partnership does not believe that this lawsuit, if adversely determined, will have a material adverse effect on the Operating Partnership.

 

The Operating Partnership does not believe there is any other litigation pending or threatened against the Operating Partnership which, individually or in the aggregate, reasonably may be expected to have a material adverse effect on the Company.

 

Item 4.  Submission of Matters to a Vote of Security Holders

 

None.

 

19



 

PART II

 

Item 5.  Market for Registrant’s Common Equity and Related Shareholder Matters

 

There is no established public trading market for the OP Units.

 

The following table sets forth, for the years indicated, the distributions paid on the Operating Partnership’s OP Units:

 

 

 

Distributions

 

 

 

2003

 

2002

 

Fourth Quarter Ended December 31

 

$

0.4325

 

$

0.4325

 

Third Quarter Ended September 30

 

$

0.4325

 

$

0.4325

 

Second Quarter Ended June 30

 

$

0.4325

 

$

0.4325

 

First Quarter Ended March 31

 

$

0.4325

 

$

0.4325

 

 

The number of holders of record of OP Units and Junior Convertible Preference Units in the Operating Partnership at January 31, 2004, were 434 and 26, respectively.  The number of outstanding OP Units and Junior Convertible Preference Units as of January 31, 2004 were 300,201,002 and 27,700 respectively.

 

OP Units Issued in 2003

 

During 2003, the Operating Partnership directly issued 165,628 OP Units having a value of $4.6 million in exchange for direct or indirect interests in multifamily properties in private placement transactions under section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”).  OP Units are generally exchangeable into Common Shares of EQR on a one-for-one basis or, at the option of EQR, the cash equivalent thereof at any time one year after the date of issuance.

 

On October 31, 2003, the Operating Partnership issued 6,201 OP Units to former partners of Glen Meadow Associates, L.P.  This issuance was made in connection with certain contingent “earnout” rights granted to such former partners upon Grove Property Trust’s (“Grove”) acquisition of the Glen Meadow property in 1998.  The Operating Partnership succeeded to Grove’s earnout obligations as a result of the Grove merger in 2000.  No separate consideration was payable upon issuance of these OP Units.  The Operating Partnership relied upon certifications from each such former partner as to his or her status as an “accredited investor” within the meaning of SEC rule 501 to claim an exemption from registration under Securities Act section 4(2).

 

On December 22, 2003, the Operating Partnership issued 148,092 OP Units as a result of the automatic conversion of 36,283 Series A Junior Convertible Preference Units.

 

Item 6.  Selected Financial Data

 

The following table sets forth selected financial and operating information on a historical basis for the Operating Partnership.  The following information should be read in conjunction with all of the financial statements and notes thereto included elsewhere in this Form 10-K.  The historical operating and balance sheet data have been derived from the historical Financial Statements of the Operating Partnership.  All amounts have also been restated in accordance with the discontinued operations provisions of SFAS No. 144.  Certain capitalized terms as used herein are defined in the Notes to Consolidated Financial Statements.

 

20



 

CONSOLIDATED HISTORICAL FINANCIAL INFORMATION

(Financial information in thousands except for per share and property data)

 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

2000

 

1999

 

OPERATING DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues from continuing operations

 

$

1,823,298

 

$

1,809,163

 

$

1,844,003

 

$

1,733,026

 

$

1,508,648

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

246,216

 

$

273,702

 

$

337,074

 

$

302,428

 

$

254,025

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

578,505

 

$

448,175

 

$

506,414

 

$

591,212

 

$

423,417

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income available to OP Units

 

$

461,297

 

$

351,024

 

$

394,971

 

$

479,271

 

$

310,221

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per OP Unit – basic:

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations available to OP Units

 

$

0.44

 

$

0.60

 

$

0.77

 

$

0.67

 

$

0.52

 

Net income available to OP Units

 

$

1.57

 

$

1.19

 

$

1.36

 

$

1.69

 

$

1.15

 

Weighted average OP Units outstanding

 

294,523

 

294,637

 

291,362

 

283,921

 

270,002

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share – diluted:

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations available to OP Units

 

$

0.43

 

$

0.59

 

$

0.76

 

$

0.67

 

$

0.52

 

Net income available to OP Units

 

$

1.55

 

$

1.18

 

$

1.34

 

$

1.67

 

$

1.14

 

Weighted average OP Units outstanding

 

297,041

 

297,969

 

295,213

 

291,266

 

271,310

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per OP Unit outstanding

 

$

1.73

 

$

1.73

 

$

1.68

 

$

1.575

 

$

1.47

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE SHEET DATA (at end of period):

 

 

 

 

 

 

 

 

 

 

 

Real estate, before accumulated depreciation

 

$

12,874,379

 

$

13,046,263

 

$

13,016,183

 

$

12,591,539

 

$

12,238,963

 

Real estate, after accumulated depreciation

 

$

10,578,366

 

$

10,934,246

 

$

11,297,338

 

$

11,239,303

 

$

11,168,476

 

Total assets

 

$

11,466,893

 

$

11,810,917

 

$

12,235,625

 

$

12,263,966

 

$

11,715,689

 

Total debt

 

$

5,360,489

 

$

5,523,699

 

$

5,742,758

 

$

5,706,152

 

$

5,473,868

 

Minority Interests

 

$

9,903

 

$

9,811

 

$

4,078

 

$

2,884

 

$

 

Partners’ capital

 

$

5,606,467

 

$

5,798,615

 

$

6,045,694

 

$

6,229,281

 

$

5,961,913

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER DATA:

 

 

 

 

 

 

 

 

 

 

 

Total properties (at end of period)

 

968

 

1,039

 

1,076

 

1,104

 

1,064

 

Total apartment units (at end of period)

 

207,506

 

223,591

 

224,801

 

227,704

 

226,317

 

 

 

 

 

 

 

 

 

 

 

 

 

Funds from operations available to OP Units (1)(2)

 

$

640,390

 

$

719,265

 

$

706,294

 

$

719,580

 

$

619,152

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flow provided by (used for):

 

 

 

 

 

 

 

 

 

 

 

Operating activities

 

$

747,981

 

$

888,938

 

$

889,668

 

$

841,826

 

$

788,970

 

Investing activities

 

$

330,366

 

$

(49,297

)

$

57,429

 

$

(563,175

)

$

(526,851

)

Financing activities

 

$

(1,058,643

)

$

(861,369

)

$

(919,266

)

$

(283,996

)

$

(236,967

)

 


(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.  FFO has also been adjusted by preferred distributions and premium on redemption of preference units to arrive at FFO available to OP Units.  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 Operating Partnership commences the conversion of units to condominiums, it simultaneously discontinues depreciation of such property.  Accordingly, the Operating Partnership included in FFO its incremental gains or losses from the sale of condominium units to third parties, which represented net gains of $10,280, $1,682 and $0 for the years ended December 31, 2003,  2002 and 2001, respectively.  Effective January 1, 2003, the Operating Partnerhsip no longer adds back

 

21



 

impairment losses when computing FFO in accordance with NAREIT’s definition.  As a result, FFO for the years ended December 31, 2002, 2001 and 2000 have been reduced by $18,284, $71,766 and $1,000, respectively, to conform to the current year presentation.  For the year ended December 31, 2001, FFO has been reduced by $5,324 to reflect the SEC’s clarification of EITF Topic D-42 regarding premiums on redemption of preference units.  See Item 7 for a reconciliation between net income and FFO.

 

(2)             The Operating Partnership 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 Operating Partnership 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 Operating Partnership’s calculation of FFO may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.

 

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Overview

 

The following discussion and analysis of the results of operations and financial condition of the Operating Partnership should be read in connection with the Consolidated Financial Statements and Notes thereto. Due to the Operating Partnership’s ability to control its subsidiaries (other than entities owning interests in the Unconsolidated Properties and certain other entities in which it has investments), each such subsidiary entity has been consolidated for financial reporting purposes.  Capitalized terms used herein and not defined are as defined elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2003.

 

Forward-looking statements in this Item 7 as well as Item 1 of this Annual Report on Form 10-K are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The words “believes”, “estimates”, “expects” and “anticipates” and other similar expressions that are predictions of or indicate future events and trends and which do not relate solely to historical matters identify forward-looking statements.  Such forward-looking statements are subject to risks and uncertainties, which could cause actual results, performance, or achievements of the Operating Partnership to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements.  Factors that might cause such differences include, but are not limited to, the following:

 

                  The total number of development units, cost of development and completion dates as well as anticipated capital expenditures for replacements and building improvements all reflect the Operating Partnership’s best estimates and are subject to uncertainties arising from changing economic conditions (such as the cost of labor and construction materials), competition and local government regulation;

                  Sources of capital to the Operating Partnership or labor and materials required for maintenance, repair, capital expenditure or development are 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 of multifamily housing, slow employment growth, availability of low interest mortgages for single-family home buyers and the potential for geopolitical instability, all of which are beyond the Operating Partnership’s control; and

                  Additional factors as discussed in Part I of this Annual Report on Form 10-K, particularly those under “Risk Factors”.

 

22



 

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  The Operating Partnership undertakes no obligation to publicly release any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.  Forward-looking statements and related uncertainties are also included in Note 7 and 14 to the Notes to Consolidated Financial Statements in this report.

 

Results of Operations

 

The following table summarizes the number of properties and related units for the periods presented:

 

 

 

Properties

 

Units

 

Purchase /
Sale Price
$ Millions

 

At December 31, 2001

 

1,076

 

224,801

 

 

 

2002 Acquisitions

 

12

 

3,634

 

$

289.9

 

Ft. Lewis Military Housing

 

1

 

3,652

 

 

 

2002 Dispositions

 

(58

)

(10,713

)

$

546.2

 

2002 Completed Developments

 

8

 

2,201

 

 

 

Unit Configuration Changes

 

 

16

 

 

 

At December 31, 2002

 

1,039

 

223,591

 

 

 

2003 Acquisitions

 

17

 

5,200

 

$

684.1

 

2003 Dispositions

 

(96

)

(23,486

)

$

1,217.9

 

2003 Completed Developments

 

8

 

2,112

 

 

 

Unit Configuration Changes

 

 

89

 

 

 

At December 31, 2003

 

968

 

207,506

 

 

 

 

Properties that the Operating Partnership owned for all of both 2003 and 2002 (the “2003 Same Store Properties”), which represented 171,841 units, impacted the Operating Partnership’s results of operations.  Properties that the Operating Partnership owned for all of both 2002 and 2001 (the “2002 Same Store Properties”), which represented 188,027 units, also impacted the Operating Partnership’s results of operations.  Both the 2003 Same Store Properties and 2002 Same Store Properties are discussed in the following paragraphs.

 

The Operating Partnership’s acquisition, disposition and completed development activities also impacted overall results of operations for the years ended December 31, 2003 and 2002.  The impacts of these activities are also discussed in greater detail in the following paragraphs.

 

Comparison of the year ended December 31, 2003 to the year ended December 31, 2002

 

For the year ended December 31, 2003, income before allocation to Minority Interests, income (loss) from investments in unconsolidated entities, net gain on sales of unconsolidated entities, discontinued operations and cumulative effect of change in accounting principle decreased by approximately $23.1 million when compared to the year ended December 31, 2002.

 

Revenues from the 2003 Same Store Properties decreased primarily as a result of lower overall physical occupancy, increased concessions and lower rental rates charged to both new and renewal residents.  Property operating expenses from the 2003 Same Store Properties increased primarily due to higher payroll, maintenance, utility, real estate taxes, insurance, leasing and advertising and building costs.  The following tables provide comparative revenue, expense, net operating income (“NOI”) and

 

23



 

weighted average occupancy for the 2003 Same Store Properties (NOI represents rental income less:  property and maintenance expense; real estate taxes and insurance expense; and property management expense):

 

2003 vs. 2002

Year over Year Same-Store Results

$in Millions – 171,841 Same-Store Units

 

Description

 

Revenues

 

Expenses

 

NOI

 

 

 

 

 

 

 

 

 

2003

 

$

1,650.8

 

$

659.0

 

$

991.8

 

2002

 

$

1,689.0

 

$

622.7

 

$

1,066.3

 

Change

 

$

(38.2

)

$

36.3

 

$

(74.5

)

Change

 

(2.3

)%

5.8

%

(7.0

)%

 

Same-Store Occupancy Statistics

 

Year 2003

 

93.0

%

Year 2002

 

93.7

%

Change

 

(0.7

)%

 

The Operating Partnership’s primary financial measure for evaluating each of its apartment communities is NOI.  The Operating Partnership 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 Operating Partnership’s apartment communities.

 

For properties that the Operating Partnership acquired prior to January 1, 2003 and expects to continue to own through December 31, 2004, the Operating Partnership anticipates the following same store results for the full year ending December 31, 2004:

 

2004 Same-Store Assumptions

 

Physical Occupancy

 

93.0%

Revenue Change

 

(0.75% to 1.50%)

Expense Change

 

3.0% to 4.0%

NOI Change

 

(4.0% to 0.5%)

Acquisitions

 

$

800 million

Dispositions

 

$

800 million

 

These 2004 assumptions are based on current expectations and are forward-looking.

 

Rental income from properties other than 2003 Same Store Properties increased by approximately $47.5 million primarily as a result of revenue from newly acquired properties not yet included as 2003 Same Store Properties and additional Partially Owned Properties consolidated in the fourth quarter of 2002 and during the year ended December 31, 2003.

 

Fee and asset management revenues, net of fee and asset management expenses, increased by $4.9 million primarily as a result of additional income allocated from Ft. Lewis. As of December 31, 2003 and 2002, the Operating Partnership managed 18,475 units and 18,965 units, respectively, for third parties and unconsolidated entities.

 

Property management expenses include off-site expenses associated with the self-management of the Operating Partnership’s properties as well as management fees paid to any third party management companies.  These expenses decreased by approximately $4.4 million or 6.0%.  This decrease is primarily

 

24



 

attributable to a reversal of a profit sharing accrual in the first quarter of 2003 related to the 2002 calendar year as the Operating Partnership didn’t achieve its stated goals and management elected not to make a discretionary contribution to the plan.  In addition, the Operating Partnership recorded lower expense in connection with granting less EQR restricted shares and reducing the expense associated with the Operating Partnership’s matched funding of its 401(k) plan during 2003 and not incurring an expense for 2003 discretionary profit sharing contributions.

 

Depreciation expense, which includes depreciation on non-real estate assets, increased $25.3 million primarily as a result of properties acquired after December 31, 2002, many of which had significantly higher per unit acquisition costs than properties previously acquired, and additional depreciation on capital expenditures for all properties owned.

 

General and administrative expenses, which include corporate operating expenses, decreased approximately $7.7 million between the periods under comparison.  This decrease was primarily due to lower expenses recorded in connection with granting less EQR restricted shares to employees during 2003, partially offset by approximately a $2.6 million increase related to EQR’s decision to begin to expense its stock based compensation in accordance with SFAS No. 123 and its amendment (SFAS No. 148).  In addition, lower state income and franchise taxes also contributed to this decrease.

 

The Operating Partnership recorded impairment charges on its technology investments and its corporate housing business of approximately $1.2 million and $18.3 million for the years ended December 31, 2003 and 2002, respectively.  See Note 22 in the Notes to Consolidated Financial Statements for further discussion.

 

Interest and other income increased by approximately $1.4 million, primarily as a result of higher cash balances available for short-term investments throughout 2003.

 

Interest expense, including amortization of deferred financing costs, decreased approximately $6.1 million primarily due to lower variable interest rates and lower overall levels of debt.  During the year ended December 31, 2003, the Operating Partnership capitalized interest costs of approximately $20.6 million as compared to $27.2 million for the year ended December 31, 2002.  This capitalization of interest primarily related to equity investments in unconsolidated entities engaged in development activities.  The effective interest cost on all indebtedness for the year ended December 31, 2003 was 6.36% as compared to 6.54% for the year ended December 31, 2002.

 

Loss from investments in unconsolidated entities increased approximately $6.4 million between the periods under comparison.  This increase is primarily the result of increased operating losses from equity investments partially offset by unrealized gains on derivative instruments.

 

Net gain on sales of discontinued operations increased approximately $206.4 million between the periods under comparison.  This increase is primarily the result of a greater number of properties sold during the year ended December 31, 2003, as well as the fact that several properties had lower net carrying values at sale.

 

Discontinued operations, net, decreased approximately $48.6 million between the periods under comparison.  See Note 16 in the Notes to Consolidated Financial Statements for further discussion.

 

Comparison of the year ended December 31, 2002 to the year ended December 31, 2001

 

For the year ended December 31, 2002, income before allocation to Minority Interests, income (loss) from investments in unconsolidated entities, net gain on sales of unconsolidated entities, discontinued operations and cumulative effect of change in accounting principle decreased by approximately $61.0 million when compared to the year ended December 31, 2001.

 

25



 

Revenues from the 2002 Same Store Properties decreased primarily as a result of lower overall physical occupancy, increased concessions and lower rental rates charged to both new and renewal residents.  Property operating expenses from the 2002 Same Store Properties, which include property and maintenance, real estate taxes and insurance and an allocation of property management expenses, remained relatively stable with increases in real estate taxes and insurance costs offset by a decrease in utility costs.  The following tables provide comparative revenue, expense, NOI and weighted average occupancy for the 2002 Same Store Properties:

 

2002 vs. 2001

Year over Year Same-Store Results

 

$in Millions – 188,027 Same Store Units

 

Description

 

Revenues

 

Expenses

 

NOI

 

 

 

 

 

 

 

 

 

2002

 

$

1,768.0

 

$

663.3

 

$

1,104.7

 

2001

 

$

1,815.9

 

$

658.3

 

$

1,157.6

 

Change

 

$

(47.9

)

$

5.0

 

$

(52.9

)

Change

 

(2.6

)%

0.8

%

(4.6

)%

 

Same-Store Occupancy Statistics

 

Year 2002

 

93.5

%

Year 2001

 

94.5

%

Change

 

(1.0

)%

 

Rental income from properties other than 2002 Same Store Properties increased by approximately $19.8 million primarily as a result of revenue from newly acquired properties not yet included as 2002 Same Store Properties.

 

Fee and asset management revenues, net of fee and asset management expenses, increased by $1.5 million as a result of managing additional units at Fort Lewis, Washington starting in April 2002.  As of December 31, 2002 and 2001, the Operating Partnership managed 18,965 units and 16,539 units, respectively, for third parties and unconsolidated entities.

 

Property management expenses include off-site expenses associated with the self-management of the Operating Partnership’s properties.  These expenses decreased by approximately $4.6 million or 5.9%.  This decrease is primarily attributable to lower amounts accrued for employee bonuses and profit sharing for 2002 and lower headcount in 2002.

 

Depreciation expense, which includes depreciation on non-real estate assets, increased $22.3 million primarily as a result of properties acquired after December 31, 2001, many of which had significantly higher per unit acquisition costs than properties previously acquired, and additional depreciation on capital expenditures for all properties owned.

 

General and administrative expenses, which include corporate operating expenses, increased approximately $11.1 million between the years under comparison.  This increase was primarily due to retirement plan expenses for certain key executives, EQR restricted shares/awards granted to key employees, additional compensation charges and costs associated with EQR’s new President, higher state income taxes in Michigan and New Jersey and income taxes incurred by one of the Company’s taxable REIT subsidiaries which has an ownership interest in properties that in prior periods were classified as Unconsolidated Properties.

 

26



 

The Operating Partnership recorded impairment charges on its technology investments and its corporate housing business of approximately $18.3 million and $11.8 million for the years ended December 31, 2002 and 2001, respectively.  See Note 22 in the Notes to Consolidated Financial Statements for further discussion.

 

Interest and other income decreased by approximately $6.7 million, primarily as a result of lower balances available for investment and related interest rates being earned on short-term investment accounts along with lower balances on deposit in tax-deferred exchange accounts.

 

Interest income – investment in mortgage notes decreased by $8.8 million as a result of the consolidation of previously Unconsolidated Properties in July 2001.  No additional interest income will be recognized on such mortgage notes in future years as the Operating Partnership now consolidates the results related to these previously Unconsolidated Properties.

 

Interest expense, including amortization of deferred financing costs, decreased approximately $11.0 million primarily due to lower variable interest rates and lower overall levels of debt.  During the year ended December 31, 2002, the Operating Partnership capitalized interest costs of approximately $27.2 million as compared to $28.2 million for the year ended December 31, 2001.  This capitalization of interest primarily related to equity investments in unconsolidated entities engaged in development activities.  The effective interest cost on all indebtedness for the year ended December 31, 2002 was 6.54% as compared to 6.89% for the year ended December 31, 2001.

 

Income (loss) from investments in unconsolidated entities decreased approximately $7.5 million between the periods under comparison.  This decrease is primarily the result of increased equity losses and unrealized losses on derivative instruments.

 

Net gain on sales of discontinued operations decreased approximately $44.6 million between the periods under comparison.  This decrease is primarily the result of the properties sold in 2001 having a lower net carrying value at sale, which resulted in higher gain recognition for financial reporting purposes.

 

Discontinued operations, net, increased approximately $48.5 million between the periods under comparison.  This increase is primarily attributable to a one-time $60.0 million impairment on the furniture rental business in 2001, which was subsequently sold in January 2002.  See Note 16 in the Notes to Consolidated Financial Statements for further discussion.

 

Liquidity and Capital Resources

 

For the Year Ended December 31, 2003

 

As of January 1, 2003, the Operating Partnership had approximately $29.9 million of cash and cash equivalents and $499.2 million available under its line of credit (net of $60.8 million which was restricted/dedicated to support letters of credit and not available for borrowing).  After taking into effect the various transactions discussed in the following paragraphs and the net cash provided by operating activities, the Operating Partnership’s cash and cash equivalents balance at December 31, 2003 was approximately $49.6 million and the amount available on the Operating Partnership’s line of credit was $633.3 million (net of $56.7 million which was restricted/dedicated to support letters of credit and not available for borrowing).

 

During the year ended December 31, 2003, the Operating Partnership generated proceeds from various transactions, which included the following:

 

                  Disposed of ninety-six properties (including two Unconsolidated Properties) and received net proceeds of approximately $1.1 billion;

 

27



 

                  Issued $400.0 million of 5.20% fixed rate unsecured debt receiving net proceeds of $397.5 million;

                  Issued $150.0 million of 6.48% Series N Cumulative Redeemable Preference Units and received net proceeds of $145.3 million;

                  Obtained $111.2 million in new mortgage financing; and

                  Issued approximately 3.5 million OP Units and received net proceeds of $74.7 million.

 

During the year ended December 31, 2003, the above proceeds were primarily utilized to:

 

                  Acquire seventeen properties, and two additional units at an existing property, utilizing cash of $595.1 million;

                  Pay OP Unit dividends of $510.7 million ($1.73 per share);

                  Pay preference interest/unit dividends of $99.9 million;

                  Repay $432.9 million of mortgage loans;

                  Repay $130.0 million on its line of credit;

                  Repay $100.0 million of floating rate public notes at maturity;

                  Repay $50.0 million and $40.0 million of 6.65% and 6.875%, respectively, fixed rate public notes at maturity;

                  Repay $4.5 million of other unsecured notes;

                  Redeem $295.3 million of 7.25% Series G Convertible Cumulative Preference Units which included a cash redemption premium of $8.3 million; and

                  Redeem $100.0 million of 7.625% Series L Cumulative Redeemable Preference Units at liquidation value.

 

Depending on its analysis of market prices, economic conditions, and other opportunities for the investment of available capital, the Company may repurchase up to an additional $85.0 million of its Common Shares pursuant to its existing share buyback program authorized by the Board of Trustees.  The Operating Partnership in turn would repurchase $85.0 million of its OP Units held by EQR.  The Operating Partnership did not repurchase any of EQR’s Common Shares during the year ended December 31, 2003.

 

The Operating Partnership’s total debt summary and debt maturity schedule as of December 31, 2003, are as follows:

 

Debt Summary

 

 

 

$ Millions *

 

Weighted
Average Rate *

 

Secured

 

$

2,694

 

5.80

%

Unsecured

 

2,666

 

6.38

%

Total

 

$

5,360

 

6.08

%

 

 

 

 

 

 

Fixed Rate

 

$

4,610

 

6.65

%

Floating Rate

 

750

 

2.24

%

Total

 

$

5,360

 

6.08

%

 

 

 

 

 

 

Above Totals Include:

 

 

 

 

 

Tax Exempt:

 

 

 

 

 

Fixed

 

$

343

 

4.38

%

Floating

 

587

 

1.74

%

Total

 

$

930

 

3.01

%

 

 

 

 

 

 

Unsecured Revolving Credit Facility

 

$

10

 

1.85

%

 


* Net of the effect of any interest rate protection agreements.

 

 

28



 

Debt Maturity Schedule

 

Year

 

$ Millions

 

% of Total

 

2004

 

$

515

 

9.6

%

2005 (1)

 

605

 

11.3

%

2006 (2)

 

490

 

9.1

%

2007

 

333

 

6.2

%

2008

 

495

 

9.2

%

2009

 

246

 

4.6

%

2010

 

196

 

3.7

%

2011

 

688

 

12.8

%

2012

 

424

 

7.9

%

2013+

 

1,368

 

25.6

%

Total

 

$

5,360

 

100.0

%

 


(1) Includes $300 million of unsecured debt with a final maturity of 2015 that is putable/callable in 2005.

 

(2) Includes $150 million of unsecured debt with a final maturity of 2026 that is putable in 2006.

 

In June 2003, the Operating Partnership filed and the SEC declared effective a Form S-3 registration statement to register $2.0 billion of debt securities.  In addition, the Operating Partnership carried over $280.0 million related to a prior registration statement.  As of February 4, 2004, $2.28 billion in debt securities remained available for issuance under this registration statement.

 

The Operating Partnership’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 2003 is presented in the following table.  The Operating Partnership calculates the equity component of its market capitalization as the sum of (i) the total outstanding OP Units at the equivalent market value of the closing price of EQR’s Common Shares on the New York Stock Exchange; (ii) the “OP Unit Equivalent” of all convertible preference interests/units; and (iii) the liquidation value of all perpetual preference interests/units outstanding.

 

Capitalization as of December 31, 2003

 

Total Debt

 

 

 

$

5,360,488,661

 

 

 

 

 

 

 

OP Units

 

299,551,617

 

 

 

OP Unit Equivalents (see below)

 

3,598,234

 

 

 

Total Outstanding at year-end

 

303,149,851

 

 

 

EQR Common Share Price at December 31, 2003

 

$

29.51

 

 

 

 

 

 

 

8,945,952,103

 

Perpetual Preference Units Liquidation Value

 

 

 

615,000,000

 

Perpetual Preference Interests Liquidation Value

 

 

 

211,500,000

 

Total Market Capitalization

 

 

 

$

15,132,940,764

 

 

 

 

 

 

 

Total Debt/Total Market Capitalization

 

 

 

35

%

 

29



 

Convertible Preference Units, Preference Interests

and Junior Preference Units

as of December 31, 2003

 

 

 

Units

 

Conversion Ratio

 

OP Unit
Equivalents

 

Preference Units:

 

 

 

 

 

 

 

Series E

 

2,192,490

 

1.1128

 

2,439,803

 

Series H

 

44,028

 

1.4480

 

63,753

 

Preference Interests:

 

 

 

 

 

 

 

Series H

 

190,000

 

1.5108

 

287,052

 

Series I

 

270,000

 

1.4542

 

392,634

 

Series J

 

230,000

 

1.4108

 

324,484

 

Junior Preference Units:

 

 

 

 

 

 

 

Series A

 

20,333

 

4.081600

 

82,991

 

Series B

 

7,367

 

1.020408

 

7,517

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

3,598,234

 

 

The Operating Partnership’s policy is to maintain a ratio of consolidated debt-to-total market capitalization of less than 50%.

 

From January 1, 2004 through February 4, 2004, the Operating Partnership:

 

                  Acquired four properties (including two additional units at an existing property) consisting of 1,130 units for approximately $151.3 million;

                  Assumed $36.9 million of mortgage debt on one property in connection with its acquisition;

                  Disposed of twelve properties (including one Unconsolidated Property) and various individual condominium units consisting of 2,972 units for approximately $140.9 million;

                  Obtained $16.5 million in new mortgage financing; and

                  Repaid $50.0 million of mortgage loans.

 

Capitalization of Fixed Assets and Improvements to Real Estate

 

Our policy with respect to capital expenditures is generally to capitalize expenditures that improve the value of the property or extend the useful life of the component asset of the property.  We track improvements to real estate in two major categories and several subcategories:

 

             Replacements (inside the unit).  These include:

                  carpets and hardwood floors;

                  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;

                  flooring such as vinyl, linoleum or tile; and

                  blinds/shades.

 

All replacements are depreciated over a five-year estimated useful life.  We expense as incurred all maintenance and turnover costs such as cleaning, interior painting of individual units and the repair of any replacement item noted above.

 

             Building improvements (outside the unit).  These include:

                  roof replacement and major repairs;

 

30



 

                  paving or major resurfacing of parking lots, curbs and sidewalks;

                  amenities and common areas such as pools, exterior sports and playground equipment, lobbies, clubhouses, laundry rooms, alarm and security systems and offices;

                  major building mechanical equipment systems;

                  interior and exterior structural repair and exterior painting and siding;

                  major landscaping and grounds improvement; and

                  vehicles and office and maintenance equipment.

 

All building improvements are depreciated over a five to ten-year estimated useful life.  We expense as incurred all recurring expenditures that do not improve the value of the asset or extend its useful life.

 

For the year ended December 31, 2003, our actual improvements to real estate totaled approximately $181.9 million.  This includes the following detail (amounts in thousands except for unit and per unit amounts):

 

Capitalized Improvements to Real Estate

For the Year Ended December 31, 2003

 

 

 

Total Units
(1)

 

Replacements

 

Avg.
Per
Unit

 

Building
Improvements

 

Avg.
Per
Unit

 

Total

 

Avg.
Per
Unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Established Properties (2)

 

162,477

 

$

57,931

 

$

356

 

$

77,607

 

$

478

 

$

135,538

 

$

834

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Acquisition Properties (3)

 

14,457

 

2,653

 

252

 

5,250

 

498

 

7,903

 

750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (4)

 

7,994

 

13,417

 

 

 

25,090

 

 

 

38,507

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

184,928

 

$

74,001

 

 

 

$

107,947

 

 

 

$

181,948

 

 

 

 


(1)          Total units exclude 22,578 unconsolidated units.

(2)          Wholly Owned Properties acquired prior to January 1, 2001.

(3)          Wholly Owned Properties acquired during 2001, 2002 and 2003.  Per unit amounts are based on a weighted average of 10,533 units.

(4)          Includes properties either Partially Owned or sold during the period, commercial space, condominium conversions and $6.5 million included in building improvements spent on seven specific assets related to major renovations and repositioning of these assets.

 

For the year ended December 31, 2002, our actual improvements to real estate totaled approximately $156.8 million.  This includes the following detail (amounts in thousands except for unit and per unit amounts):

 

Capitalized Improvements to Real Estate

For the Year Ended December 31, 2002

 

 

 

Total Units
(1)

 

Replacements

 

Avg.
Per
Unit

 

Building
Improvements

 

Avg.
Per
Unit

 

Total

 

Avg.
Per
Unit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Established Properties (2)

 

171,913

 

$

49,903

 

$

290

 

$

65,985

 

$

384

 

$

115,888

 

$

674

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New Acquisition Properties (3)

 

22,146

 

5,542

 

285

 

8,691

 

446

 

14,233

 

731

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (4)

 

7,758

 

5,787

 

 

 

20,868

 

 

 

26,655

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

201,817

 

$

61,232

 

 

 

$

95,544

 

 

 

$

156,776

 

 

 

 

31



 


(1)                Total units exclude 21,774 unconsolidated units.

(2)                Wholly Owned Properties acquired prior to January 1, 2000.

(3)                Wholly Owned Properties acquired during 2000, 2001 and 2002.  Per unit amounts are based on a weighted average of 19,478 units.

(4)                Includes properties either Partially Owned or sold during the period, commercial space, condominium conversions and $9.1 million included in building improvements spent on six specific assets related to major renovations and repositioning of these assets.

 

The Operating Partnership expects to fund approximately $160.0 million for capital expenditures for replacements and building improvements for all consolidated properties in 2004.

 

During the year ended December 31, 2003, the Operating Partnership’s total non-real estate capital additions, such as computer software, computer equipment, and furniture and fixtures and leasehold improvements to the Operating Partnership’s property management offices and its corporate offices, was approximately $2.9 million.  The Operating Partnership expects to fund approximately $6.5 million in total additions to non-real estate property in 2004.

 

Improvements to real estate and additions to non-real estate property were funded from net cash provided by operating activities.

 

Derivative Instruments

 

In the normal course of business, the Operating Partnership is exposed to the effect of interest rate changes.  The Operating Partnership limits these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments.

 

The Operating Partnership has a policy of only entering into contracts with major financial institutions based upon their credit ratings and other factors.  When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, the Operating Partnership has not sustained a material loss from those instruments nor does it anticipate any material adverse effect on its net income or financial position in the future from the use of derivatives.

 

See Note 14 in the Notes to Consolidated Financial Statements for additional discussion of derivative instruments at December 31, 2003.

 

Other

 

Total distributions paid in January 2004 amounted to $141.9 million (excluding distributions on Partially Owned Properties), which included certain distributions declared during the fourth quarter ended December 31, 2003.

 

The Operating Partnership expects to meet its short-term liquidity requirements, including capital expenditures related to maintaining its existing properties and certain scheduled unsecured note and mortgage note repayments, generally through its working capital, net cash provided by operating activities and borrowings under its line of credit.  The Operating Partnership considers its cash provided by operating activities to be adequate to meet operating requirements and payments of distributions.  The Operating Partnership also expects to meet its long-term liquidity requirements, such as scheduled unsecured note and mortgage debt maturities, property acquisitions, financing of construction and development activities and capital improvements through the issuance of unsecured notes and equity securities, including additional OP Units, and proceeds received from the disposition of certain properties.  In addition, the Operating Partnership has significant unencumbered properties available to secure additional mortgage borrowings in the event that the public capital markets are unavailable or the cost of alternative sources of capital is too high.  The fair value of and cash flow from these unencumbered

 

32



 

properties are in excess of the requirements the Operating Partnership must maintain in order to comply with covenants under its unsecured notes and line of credit.

 

The Operating Partnership has a revolving credit facility with potential borrowings of up to $700.0 million.  This facility matures in May 2005 and may, among other potential uses, be used to fund property acquisitions, costs for certain properties under development and short term liquidity requirements.  As of March 1, 2004, $255.0 million was outstanding under this facility (and $56.7 was restricted and dedicated to support letters of credit).

 

Off-Balance Sheet Arrangements and Contractual Obligations

 

The Operating Partnership has co-invested in various properties with unrelated third parties that are unconsolidated and accounted for under the equity method of accounting.  Management does not believe these investments have a materially different impact upon the Operating Partnership’s liquidity, capital resources, credit or market risk than its property management and ownership activities generally, except to the extent the development ventures mitigate risk by deploying the skill and expertise of locally based real estate developers.  The nature and business purpose of these ventures are as follows:

 

                  Institutional Ventures - During 2000 and 2001, the Operating Partnership entered into ventures with an unaffiliated partner.  At the respective closing dates, the Operating Partnership sold and/or contributed 45 properties containing 10,846 units to these ventures and retained a 25% ownership interest in the ventures.  The Operating Partnership’s joint venture partner contributed cash equal to 75% of the agreed-upon equity value of the properties comprising the ventures, which was then distributed to the Operating Partnership.  The Operating Partnership’s strategy with respect to these ventures was to reduce its concentration of properties in a variety of markets.

                  Development Ventures - Since 1998, the Operating Partnership has generally engaged in development activities through various joint ventures with third party developers.  The Operating Partnership uses the local expertise of these developers and lowers the overall risks associated with development by grouping various development properties into aggregated pools.  The Operating Partnership generally contributes between 25% and 35% of these projects with the remaining cost financed through third-party construction mortgages.  Voting rights are shared equally between the Operating Partnership and its respective development partners.

 

As of December 31, 2003, the Operating Partnership has 13 projects in various stages of development with estimated completion dates ranging through June 30, 2005.  The three development agreements currently in place have the following key terms:

 

                  The first development partner has the right, at any time following completion of a project, to       stipulate a value for such project and offer to sell its interest in the project to the Operating Partnership based on such value.  If the Operating Partnership chooses not to purchase the interest, it must agree to a sale of the project to an unrelated third party at such value.  The Operating Partnership’s partner must exercise this right as to all projects within five years after the receipt of the final certificate of occupancy on the last developed property.  In connection with this development agreement, the Operating Partnership has an obligation to provide up to $40.0 million in credit enhancements to guarantee a portion of the third party construction financing.  As of February 4, 2004, the Operating Partnership had set-aside $20.0 million towards this credit enhancement.  The Operating Partnership would be required to perform under this agreement only if there was a material default under a third party construction mortgage agreement.  This agreement expires no later than December 31, 2018.  Notwithstanding the termination of the agreement, the Operating Partnership shall have recourse against its development partner for any losses incurred.

 

33



 

                  The second development partner has the right, at any time following completion of a project, to require the Operating Partnership to purchase the partners’ interest in that project at a mutually agreeable price.  If the Operating Partnership and the partner are unable to agree on a price, both parties will obtain appraisals.  If the appraised values vary by more than 10%, both the Operating Partnership and its partner will agree on a third appraiser to determine which original appraisal is closest to its determination of value.  The Operating Partnership may elect at that time not to purchase the property and instead, authorize its partner to sell the project at or above the agreed-upon value to an unrelated third party.  Five years following the receipt of the final certificate of occupancy on the last developed property, the Operating Partnership must purchase, at the agreed-upon price, any projects remaining unsold.

 

                  The third development partner has the exclusive right for six months following stabilization (generally defined as having achieved 90% occupancy for three consecutive months following the substantial completion of a project) to market a project for sale.  Thereafter, either the Operating Partnership or its development partner may market a project for sale.  If the Operating Partnership’s development partner proposes the sale, the Operating Partnership may elect to purchase the project at the price proposed by its partner or defer the sale until two independent appraisers appraise the project.  If the two appraised values vary by more than 5%, a third appraiser will be chosen to determine the fair market value of the property.  Once a value has been determined, the Operating Partnership may elect to purchase the property or authorize its development partner to sell the project at the agreed-upon value.

 

See Note 9 in the Notes to Consolidated Financial Statements for additional discussion regarding the Operating Partnership’s investments in unconsolidated entities.

 

In connection with one of its mergers, the Operating Partnership provided a guaranty of a credit enhancement agreement with respect to certain tax-exempt bonds issued to finance certain public improvements at a multifamily development project.  The Operating Partnership has the obligation to provide this guaranty for a period of eight years from the consummation of the merger or through May 2005.  The Operating Partnership would be required to perform under this guaranty only if there was a draw on the letter of credit issued by the credit enhancement party.  The counterparty has also indemnified the Operating Partnership for any losses suffered.  As of February 4, 2004, this guaranty was still in effect at a commitment amount of $12.7 million and no current outstanding liability.

 

The following table summarizes the Operating Partnership’s contractual obligations for the next five years and thereafter as of December 31, 2003:

 

Payments Due by Year (in thousands)

 

Contractual Obligations

 

2004

 

2005

 

2006

 

2007

 

2008

 

Thereafter

 

Total

 

Debt (a)

 

$

514,591

 

$

605,438

 

$

489,961

 

$

332,583

 

$

494,727

 

$

2,923,189

 

$

5,360,489

 

Operating Leases:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minimum Rent Payments (b)

 

4,835

 

3,915

 

2,852

 

2,376

 

2,243

 

8,365

 

24,586

 

Other Long-Term Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred Compensation (c)

 

831

 

1,376

 

1,411

 

2,215

 

2,270

 

20,972

 

29,075

 

Other (d)

 

1,000

 

 

 

 

 

 

1,000

 

Total

 

$

521,257

 

$

610,729

 

$

494,224

 

$

337,174

 

$

499,240

 

$

2,952,526

 

$

5,415,150

 

 

34



 


(a)          Amounts include aggregate principal payments only.  The Operating Partnership paid $352,391, $365,782 and $380,745 for interest on debt, inclusive of derivate instruments, for the years ended December 31, 2003, 2002 and 2001, respectively.

(b)         Minimum basic rent due for various office space the Operating Partnership leases and fixed base rent due on a ground lease for one property.

(c)          Estimated payments to EQR’s Chairman, former CEO and two other executive officers based on planned retirement dates.

(d)         Promissory note due on one property.

 

Critical Accounting Policies and Estimates

 

The Operating Partnership’s significant accounting policies are described in Note 2 in the Notes to Consolidated Financial Statements.  These policies were followed in preparing the consolidated financial statements at and for the year ended December 31, 2003.

 

The Operating Partnership has identified six significant accounting policies as critical accounting policies.  These critical accounting policies are those that have the most impact on the reporting of our financial condition and those requiring significant judgments and estimates.  With respect to these critical accounting policies, management believes that the application of judgments and assessments is consistently applied and produces financial information that fairly presents the results of operations for all periods presented.  The six critical accounting policies are:

 

Impairment of Long-Lived Assets, Including Goodwill

 

The Operating Partnership periodically evaluates its long-lived assets, including its investments in real estate and goodwill, for indicators of permanent impairment.  The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, expected holding period of each asset and legal and environmental concerns.  Future events could occur which would cause the Operating Partnership to conclude that impairment indicators exist and an impairment loss is warranted.

 

Depreciation of Investment in Real Estate

 

The Operating Partnership depreciates the building component of its investment in real estate over a 30-year estimated useful life, building improvements over a 5-year to 10-year estimated useful life and both the furniture, fixtures and equipment and replacements components over a 5-year estimated useful life, all of which are judgmental determinations.

 

Cost Capitalization

 

See the Capitalization of Fixed Assets and Improvements to Real Estate section for discussion of the policy with respect to capitalization vs. expensing of fixed asset/repair and maintenance costs.  In addition, the Operating Partnership capitalizes the payroll and associated costs of employees directly responsible for and who spend all of their time on the supervision of major capital projects.  These costs are reflected on the balance sheet as an increase to depreciable property.

 

The Operating Partnership follows the guidance in SFAS No. 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects, for all development projects and uses its professional judgment in determining whether such costs meet the criteria for capitalization or must be expensed as incurred.  The Operating Partnership capitalizes interest, real estate taxes and insurance and payroll and associated costs for those individuals directly responsible for and who spend all of their time on development activities.  The Operating Partnership expenses as incurred all payroll costs of employees working directly at our properties, except for costs that are incurred during the initial lease-up phase on

 

35



 

a development project.  An allocated portion of payroll costs is capitalized based upon the occupancy of the project until stabilized occupancy is achieved.  The incremental payroll and associated costs are capitalized to the projects under development based upon the effort directly identifiable with such projects.  These costs are reflected on the balance sheet as either construction in progress or a separate component of investments in unconsolidated entities.  The Operating Partnership ceases the capitalization of such costs as the property becomes substantially complete and ready for its intended use.

 

Fair Value of Financial Instruments, Including Derivative Instruments

 

The valuation of financial instruments under SFAS No. 107 and SFAS No. 133 and its amendments (SFAS Nos. 137/138/149) requires the Operating Partnership to make estimates and judgments that affect the fair value of the instruments.  The Operating Partnership, where possible, bases the fair values of its financial instruments, including its derivative instruments, on listed market prices and third party quotes. Where these are not available, the Operating Partnership bases its estimates on other factors relevant to the financial instruments.

 

Revenue Recognition

 

Rental income attributable to leases is recorded when due from residents and is recognized monthly as it is earned, which is not materially different than on a straight-line basis.  Leases entered into between a resident and a property for the rental of an apartment unit are generally year-to-year, renewable upon consent of both parties on an annual or monthly basis.  Interest income is recorded on an accrual basis.

 

Stock-Based Compensation

 

Prior to 2003, the Company had chosen to account for its stock-based compensation in accordance with APB No. 25, Accounting for Stock Issued to Employees, which resulted in no compensation expense for options issued with an exercise price equal to or exceeding the market value of EQR’s Common Shares on the date of grant (intrinsic method).  The Company has elected to account for its stock-based compensation in accordance with SFAS No. 123 and its amendment (SFAS No. 148), Accounting for Stock Based Compensation, effective in the first quarter of 2003, which resulted in compensation expense being recorded based on the fair value of the stock compensation granted.  Any Common Shares issued pursuant to EQR’s incentive equity compensation and employee share purchase plans will result in the Operating Partnership issuing OP Units to EQR on a one-for-one basis, with the Operating Partnership receiving the net cash proceeds of such issuances.

 

SFAS No. 148 provides three transition methods for entities that adopt the fair value recognition provisions of SFAS No. 123.  The Company has chosen to use the “Prospective Method”.  This method requires that companies apply the recognition provisions of SFAS No. 123 to only employee awards granted or modified after the beginning of the fiscal year in which the recognition provisions are first applied, or January 1, 2003.  Compensation expense under all of the Company’s plans is generally recognized over periods ranging from three months to five years.  Therefore, the cost related to stock-based employee compensation included in the determination of net income for the year ended December 31, 2003 is less than that which would have been recognized if the fair value based method had been applied to all awards since the original effective date of SFAS No. 123.  See Note 2 in the Notes to Consolidated Financial Statements for further discussion and comparative information regarding application of the fair value method to all outstanding employee awards.

 

Funds From Operations

 

For the year ended December 31, 2003, Funds From Operations (“FFO”) available to OP Units decreased $78.9 million, or 11.0%, as compared to the year ended December 31, 2002. For the year

 

36



 

ended December 31, 2002, FFO available to OP Units increased $13.0 million, or 1.8%, as compared to the year ended December 31, 2001.

 

The following is a reconciliation of net income to FFO available to OP Units for the years ended December 31, 2003, 2002 and 2001:

 

Funds From Operations

(Amounts in thousands)

 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

Net income

 

$

578,505

 

$

448,175

 

$

506,414

 

Adjustments:

 

 

 

 

 

 

 

Depreciation

 

444,339

 

419,039

 

396,737

 

Depreciation – Non-real estate additions

 

(7,019

)

(9,213

)

(6,555

)

Depreciation – Partially Owned Properties

 

(8,390

)

(7,706

)

(4,353

)

Depreciation – Unconsolidated Properties

 

28,301

 

19,872

 

13,022

 

Net (gain) on sales of unconsolidated entities

 

(4,942

)

(5,054

)

(387

)

Cumulative effect of change in accounting principle

 

 

 

1,270

 

Discontinued Operations:

 

 

 

 

 

 

 

Depreciation

 

27,230

 

53,917

 

60,495

 

Net gain on sales of depreciable property

 

(300,426

)

(102,614

)

(148,906

)

 

 

 

 

 

 

 

 

FFO (1)(2)

 

757,598

 

816,416

 

817,737

 

 

 

 

 

 

 

 

 

Preferred distributions

 

(96,971

)

(97,151

)

(106,119

)

Premium on redemption of preference units

 

(20,237

)

 

(5,324

)

 

 

 

 

 

 

 

 

FFO available to OP Units

 

$

640,390

 

$

719,265

 

$

706,294

 

 


(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 Operating Partnership commences the conversion of units to condominiums, it simultaneously discontinues depreciation of such property.  Accordingly, the Operating Partnership included in FFO its incremental gains or losses from the sale of condominium units to third parties, which represented net gains of $10,280, $1,682 and $0 for the years ended December 31, 2003, 2002 and 2001, respectively.  Effective January 1, 2003, the Operating Partnership no longer adds back impairment losses when computing FFO in accordance with NAREIT’s definition.  As a result, FFO for the years ended December 31, 2002, 2001 and 2000 have been reduced by $18,284, $71,766 and $1,000, respectively, to conform to the current year presentation.  For the year ended December 31, 2001, FFO has been reduced by $5,324 to reflect the SEC’s clarification of EITF Topic D-42 regarding premiums on redemption of preference units.

 

37



 

(2)                   The Operating Partnership 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 Operating Partnership 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 Operating Partnership’s calculation of FFO may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.

 

Item 7A.  Quantitative and Qualitative Disclosure about Market Risk

 

Market risks relating to the Operating Partnership’s operations result primarily from changes in short-term LIBOR interest rates.  The Operating Partnership does not have any direct foreign exchange or other significant market risk.

 

The Operating Partnership’s exposure to market risk for changes in interest rates relates primarily to the unsecured line of credit.  The Operating Partnership typically incurs fixed rate debt obligations to finance acquisitions and capital expenditures, while it typically incurs floating rate debt obligations to finance working capital needs and as a temporary measure in advance of securing long-term fixed rate financing.  The Operating Partnership continuously evaluates its level of floating rate debt with respect to total debt and other factors, including its assessment of the current and future economic environment.

 

The Operating Partnership also utilizes certain derivative financial instruments to limit market risk.  Interest rate protection agreements are used to convert floating rate debt to a fixed rate basis or vice versa.  Derivatives are used for hedging purposes rather than speculation.  The Operating Partnership does not enter into financial instruments for trading purposes.                               See also Note 14 to the Notes to Consolidated Financial Statements for additional discussion of derivative instruments.

 

The fair values of the Operating Partnership’s financial instruments (including such items in the financial statement captions as cash and cash equivalents, other assets, lines of credit, accounts payable and accrued expenses, rents received in advance and other liabilities) approximate their carrying or contract values based on their nature, terms and interest rates that approximate current market rates.  The fair value of the Operating Partnership’s mortgage notes payable and unsecured notes approximates their carrying value at December 31, 2003.

 

The Operating Partnership had total outstanding floating rate debt of approximately $750.0 million, or 14.0% of total debt at December 31, 2003, net of the effects of any derivative instruments.  If market rates of interest on all of the floating rate debt permanently increased by 22 basis points (a 10% increase from the Operating Partnership’s existing weighted average interest rates), the increase in interest expense on the floating rate debt would decrease future earnings and cash flows by approximately $1.7 million.  If market rates of interest on all of the floating rate debt permanently decreased by 22 basis points (a 10% decrease from the Operating Partnership’s existing weighted average interest rates), the decrease in interest expense on the floating rate debt would increase future earnings and cash flows by approximately $1.7 million.

 

At December 31, 2003, the Operating Partnership had total outstanding fixed rate debt of approximately $4.6 billion, net of the effects of any derivative instruments.  If market rates of interest permanently increased by 67 basis points (a 10% increase from the Operating Partnership’s existing weighted average interest rates), the estimated fair value of the Operating Partnership’s fixed rate debt would be approximately $4.2 billion.  If market rates of interest permanently decreased by 67 basis points (a 10% decrease from the Operating Partnership’s existing weighted average interest rates), the estimated fair value of the Operating Partnership’s fixed rate debt would be approximately $5.1 billion.

 

At December 31, 2003, the Operating Partnership’s consolidated derivative instruments had a net asset fair value of approximately $3.9 million.  If market rates of interest permanently increased by 25 basis points (a 10% increase from the Operating Partnership’s existing weighted average interest rates), the net asset fair value of the Operating Partnership’s consolidated derivative instruments would be approximately $8.0 million.  If market rates of interest permanently decreased by 25 basis points (a 10% decrease from the Operating Partnership’s existing weighted average interest rates), the net liability fair value of the Operating Partnership’s consolidated derivative instruments would be approximately $0.1 million.

 

38



 

At December 31, 2003, the Operating Partnership’s unconsolidated derivative instruments had a net liability fair value of approximately $5.2 million.  If market rates of interest permanently increased by 11 basis points (a 10% increase from the Operating Partnership’s existing weighted average interest rates), the net liability fair value of the Operating Partnership’s unconsolidated derivative instruments would be approximately $5.1 million.  If market rates of interest permanently decreased by 11 basis points (a 10% decrease from the Operating Partnership’s existing weighted average interest rates), the net liability fair value of the Operating Partnership’s unconsolidated derivative instruments would be approximately $5.3 million.

 

These amounts were determined by considering the impact of hypothetical interest rates on the Operating Partnership’s financial instruments.  The foregoing assumptions apply to the entire amount of the Operating Partnership’s debt and derivative instruments and do not differentiate among maturities.  These analyses do not consider the effects of the changes in overall economic activity that could exist in such an environment.  Further, in the event of changes of such magnitude, management would likely take actions to further mitigate its exposure to the changes.  However, due to the uncertainty of the specific actions that would be taken and their possible effects, this analysis assumes no changes in the Operating Partnership’s financial structure or results.

 

The Operating Partnership cannot predict the effect of adverse changes in interest rates on its debt and derivative instruments and, therefore, its exposure to market risk, nor can there be any assurance that long term debt will be available at advantageous pricing.  Consequently, future results may differ materially from the estimated adverse changes discussed above.

 

Item 8.  Financial Statements and Supplementary Data

 

See Index to Consolidated Financial Statements on page F-1 of this Form 10-K.

 

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

None.

 

Item 9A.  Disclosure Controls and Procedures

 

Effective as of December 31, 2003, the Operating Partnership carried out an evaluation, under the supervision and with the participation of the Operating Partnership’s management, including the Chief Executive Officer and Chief Financial Officer of EQR, of the effectiveness of the design and operation of the Operating Partnership’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15.  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective in timely alerting them to material information.  During the fiscal year ended December 31, 2003, there were no changes to the internal controls over financial reporting of the Operating Partnership identified in connection with the Operating Partnership’s evaluation or otherwise that has materially affected, or is reasonably likely to materially affect, the Operating Partnership’s internal controls over financial reporting.

 

39



 

PART III

 

Items 10,11,12, 13 and 14 of this Form 10-K may omit the use of certain defined terms used elsewhere herein and may contain certain defined terms that are different from those used in the other sections of this report.

 

Item 10.                       TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT

 

The Operating Partnership does not have any trustees or executive officers.  The following is a biographical summary, as of March 1, 2004, of the age, experience and position and offices of the trustees and executive officers of EQR, ERPOP’s General Partner.  Officers serve at the pleasure of the Board of Trustees (the “Board”).

 

Trustees

 

All trustees are elected at each annual meeting of EQR’s shareholders.  EQR’s Board of Trustees may appoint trustees to fill vacancies (including vacancies resulting from an increase in the number of trustees) arising between shareholders meetings.

 

John W. Alexander, 56, has been a Trustee of EQR since May 1993 and is the President of Mallard Creek Capital Partners, Inc., an investment company with interests in real estate, development entities and operating companies.  He is also a partner of Meringoff Equities, a real estate investment and development company, and is a member of the International Council of Shopping Centers and the Urban Land Institute.

 

Charles L. Atwood, 55, has been a Trustee of EQR since July 2003.  Mr. Atwood is Senior Vice President and Chief Financial Officer of Harrah’s Entertainment, Inc. (“Harrah’s”), a public owner and operator of gaming facilities.  Mr. Atwood has been with Harrah’s and its predecessor companies since 1979.  He received an M.B.A. in finance from Tulane University and is a member of the American Institute of Certified Public Accountants.

 

Bruce W. Duncan, 52, has been President and a Trustee of EQR since March 2002 and was appointed Chief Executive Officer of EQR in January 2003.  He was a private investor from April 2000 until joining EQR.  Mr. Duncan served as Chairman, President and Chief Executive Officer of The Cadillac Fairview Corporation Limited, a real estate operating company, from December 1995 until its sale in March 2000.  Mr. Duncan is a director of The Rouse Company, a public real estate management and development company, a director of Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”) and a trustee of Starwood Hotels & Resorts, a real estate investment trust and a subsidiary of Starwood.  In addition, Mr. Duncan is on the Executive Committee of the National Multi-Housing Council and the Executive Committee of NAREIT Board of Governors, a member of the Urban Land Institute, and a past trustee of the International Council of Shopping Centers.

 

Stephen O. Evans, 59, has been a Trustee of EQR since December 23, 1997, the date of the merger of Evans Withycombe Residential, Inc. (“Evans”), a public multifamily property company founded by Mr. Evans, into EQR (the “Evans Merger”).  Mr. Evans is President of Evans Realty Associates, a real estate investment company and serves as a director of Biltmore Bank of Arizona.  Mr. Evans also served as an Executive Vice President of Equity Residential from December 1997 to December 1999 and as the Chairman of the Board and Chief Executive Officer of Evans from its formation in May 1994 until the Evans Merger.  Mr. Evans is a member of Lambda Alpha, a national land economics fraternity, and the Urban Land Institute.

 

40



 

James D. Harper, Jr., 70, has been a Trustee of EQR since May 1993.  Mr. Harper is the President of JDH Realty Co., a real estate development and investment company, and is the principal partner in AH Development, S.E., a special limited partnership formed to develop over 400 acres of land in Puerto Rico.  He is a trustee of Equity Office Properties Trust (“EOP”), a public office building company.

 

Boone A. Knox, 67, has been a Trustee of EQR since October 19, 1998, the date of the merger of Merry Land & Investment Company, Inc. (“Merry Land”), a public multifamily property company, into EQR (the “Merry Land Merger”).  Mr. Knox had been a director of Merry Land Properties, Inc. (“MRYP”), a publicly traded diversified real estate company, from its formation as part of the Merry Land Merger through February 2001.  Mr. Knox had been Chairman of the Board of Directors of Merry Land from December 1996 until the Merry Land Merger.  Mr. Knox has served as Chairman of the Board of Directors of Regions Bank, Central Georgia since January 1997, and is a director of Cousins Properties, Incorporated, a public retail and office building company.

 

Desiree G. Rogers, 44, has been a Trustee of the Company since October 2003.  Ms. Rogers joined Peoples Energy Corporation in 1977 and currently serves as Senior Vice President of Peoples Energy Corporation, a publicly diversified energy company.  She received an M.B.A from Harvard Business School.

 

Sheli Z. Rosenberg, 62, has been a Trustee of EQR since March 1993, and Lead Trustee since 2002.  Ms. Rosenberg was Vice Chairman of Equity Group Investments, LLC (“EGI LLC”), an investment company, from January 1, 2000 to March 2003, at which time she retired, and Chief Executive Officer and President of EGI LLC from January 1, 1999 to January 1, 2000.  Ms. Rosenberg is a trustee of EOP and is a director of Capital Trust, Inc. (“Capital Trust”), a specialized finance company, Manufactured Home Communities, Inc. (“MHC”), a public manufactured home community company, Ventas, Inc., a public real estate company focusing on the ownership and acquisition of health care properties, CVS Corporation, a drugstore chain and Cendant Corporation, a provider of business and consumer services primarily within the real estate and travel sectors.

 

Gerald A. Spector, 57, has been a Trustee and Executive Vice President of EQR since March 1993 and Chief Operating Officer of EQR since February 1995.

 

Michael N. Thompson, 55, has been a Trustee of EQR since October 19, 1998, the date of the Merry Land Merger.  Mr. Thompson has been a principal of Merry Land Properties, L.L.C., a private entity performing development activities in the Southeast, since May 2003. Mr. Thompson had been President, Chief Operating Officer and a director of MRYP since its formation as part of the Merry Land Merger until May 2003.  Mr. Thompson served as Executive Vice President and Chief Operating Officer of Merry Land from December 1996 until the Merry Land Merger.

 

B. Joseph White, 56, has been a Trustee of EQR since May 1993.  Mr. White is the Wilbur K. Pierpont Collegiate Professor at the University of Michigan Business School.  In 2003, he served as Managing Director of Fred Alger Management Company, an Asset Management firm.  In 2002, he served as Interim President of the University of Michigan.  From 1991 to 2001 he was dean of the University of Michigan Business School.  Mr. White is a director of Kelly Services, Inc., a temporary services firm, and Kaydon Corporation, a manufacturer of precision engineered metal products.

 

Samuel Zell, 62, has been Chairman of the Board of EQR since March 1993.  Since January 1999, Mr. Zell has been Chairman of EGI LLC.  He is also Chairman of the Board of EOP, MHC, Capital Trust, Anixter International Inc., a provider of integrated network and cabling systems, Angelo & Maxie’s, Inc., an owner and operator of restaurants, Danielson Holding Corporation, a holding company with separate subsidiaries in the insurance and marine transportation industries, and Rewards Network Inc., an administrator of loyalty based consumer rewards programs.

 

41



 

Executive Officers

 

Bruce W. Duncan, Chief Executive Officer, President and a Trustee of EQR.  See biographical information above.

 

Gerald A. Spector, Chief Operating Officer, Executive Vice President and a Trustee of EQR.  See biographical information above.

 

David J. Neithercut, 48, has been Executive Vice President – Corporate Strategy since January 1, 2004, and Executive Vice President and Chief Financial Officer of EQR since February 1995.

 

J. Donald Couvillion, 49, has been Executive Vice President – Development since December 2001.  From December 1997 to November 2001, he was Senior Vice President – Development of EQR. Mr. Couvillion will leave the employ of EQR on or about May 1, 2004, depending upon EQR’s transitional needs.

 

Alan W. George, 46, has been Executive Vice President Chief Investment Officer of EQR since January 2002.  Mr. George was Executive Vice President Acquisitions/Dispositions of EQR from February 1997 to January 2002.

 

Edward J. Geraghty, 54, has been Executive Vice President of EQR since March 1998 and President – Eastern Division since April 1999.

 

Michael J. McHugh, 48, has been Executive Vice President of EQR since January 1998 and Chief Accounting Officer and Treasurer of EQR since February 1995.

 

Gregory H. Smith, 52, has been Executive Vice President – Portfolio Investment of EQR since January 1, 2004, and Executive Vice President since December 1994.  Mr. Smith was also President – Central Division from April 1999 to December 2003.

 

Bruce C. Strohm, 49, has been Executive Vice President and General Counsel of EQR since March 1995 and Secretary of EQR since November 1995.

 

Mark N. Tennison, 43, has been Executive Vice President – Development of EQR since March 2004.  Mr. Tennison served as Senior Vice President and Chief Operating Officer of Pritzker Residential from 1997 through 2003.

 

Frederick C. Tuomi, 49, has been Executive Vice President of EQR since January 1994 and President – Western Division since April 1999.

 

Audit Committee

 

The current members of the Audit Committee of EQR’s Board of Trustees are B. Joseph White (Chair), John W. Alexander, Boone A. Knox, James D. Harper, Jr., and Charles L. Atwood.  The Audit Committee is comprised entirely of trustees who meet the independence and financial literacy requirements of NYSE listing standards.  In addition, the Board has determined that Mr. Atwood qualifies as an “audit committee financial expert” as defined in SEC rules.

 

Code of Ethics and Business Conduct

 

EQR’s Board has adopted a Code of Ethics and Business Conduct that applies to all trustees, officers and employees, including EQR’s principal executive officer, principal financial officers and principal accounting officers.  The purpose of the Code of Ethics and Business Conduct is to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest

 

42



 

between personal and professional relationships to promote full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by EQR; and to promote compliance with all applicable rules and regulations that apply to EQR and its officers and Trustees.  If the Board amends any provisions of the Code of Ethics and Business Conduct that apply to EQR’s chief executive officer or senior financial officers or grants a waiver in favor of any such persons, it will promptly publish the text of the amendment or the specifics of the waiver on its website.  EQR’s Code of Ethics and Business Conduct may be viewed on EQR’s website at www.equityapartments.com under the Investor Relations section.

 

Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Exchange Act requires the Operating Partnership to report whether or not, based on its review of reports to the SEC filed by its more than 10% beneficial owners, about transactions in its OP Units furnished to the Operating Partnership, and the written representation of its more than 10% beneficial owners that any such required reports were not filed or were filed untimely.  There were no such failures to report or late reports during 2003.

 

Item 11.  EXECUTIVE COMPENSATION

 

Compensation Of Trustees

 

The following information is provided for the Board of Trustees of EQR.

 

To link trustee compensation to performance and to more effectively align the Board’s interests with the interests of the shareholders, the Board believes that over 50% of the trustees’ base annual fee (excluding committee or other Board service fees) should be payable in some form of Company equity.  Each of EQR’s trustees, excluding EQR’s Chairman, Mr. Zell, and the employee trustees, Mr. Duncan and Mr. Spector, is entitled to receive an annual cash fee of $45,000 for serving on the Board.  In addition, trustees who serve on the Audit, Compensation, Nominating, Corporate Governance or Executive Committee receive an additional $4,000 per year for each committee on which they serve.  The chair of the Audit Committee receives an additional $11,000 per year and the chairs of the Compensation, Nominating and Corporate Governance Committees each receive an additional $6,000 per year.  Mr. Zell does not receive a fee for acting as Chair of the Executive Committee.  The Lead Trustee receives an additional annual fee of $10,000 for such service. EQR also reimburses the trustees for travel expenses incurred in connection with their activities on behalf of EQR.  As of January 1, 2003, EQR’s Chairman, Mr. Zell, and the employee trustees no longer receive any such annual trustee’s fee and/or long-term incentive grant for their service on the Board.

 

Each trustee of EQR, excluding EQR’s Chairman, Mr. Zell, and the employee trustees, Mr. Duncan and Mr. Spector, is entitled to receive an annual long-term incentive grant of $50,000 of options and restricted shares.  This grant will be allocated between options and restricted shares in the same ratio and utilizing the same valuation criteria as approved by the Board for the annual long-term incentive grants to EQR’s executive officers.  The 2003 and 2004 grants were allocated 25% to options and 75% to restricted shares.  The options granted vest in approximately equal installments of six months, one year and two years from the date of grant.  The restricted shares vest in full on the third anniversary of the grant date.  Distributions are paid on these restricted shares at the same rate as on unrestricted common shares.

 

Trustees who are first appointed or elected to the Board after the beginning of a fiscal year receive prorated cash fees and long-term incentive grants for their first year of service.

 

Because EQR’s financial results were impacted during 2002, the trustees voluntarily agreed to reduce their base annual trustee compensation by approximately ten percent during 2003.  Accordingly, each non-employee trustee’s annual fee for 2003 was reduced from $45,000 to $40,000, and the annual

 

43



 

long-term incentive grant of $50,000 was reduced to $45,000.

 

For trustees retiring from the Board or completing a scheduled term on the Board without re-nomination, vesting of all outstanding options and restricted shares granted as compensation for serving as a trustee is accelerated, and options may be exercised through the expiration of the exercise period (i.e., ten years from the grant date).  Options and restricted share awards issued to Mr. Zell as Chairman are subject to the same vesting restriction upon retirement as other employees of EQR.

 

Mr. Zell receives restricted shares and options for his services as Chairman as described in “Employment Contracts and Change in Control Arrangements” below.

 

EQR has an optional deferred compensation plan in which trustees may participate.  The trustees may defer receipt of any percentage of their annual cash compensation, which amount is then deposited in a supplemental executive retirement savings plan (the “SERP”) on a tax-deferred basis. These deferred funds (as well as any cash trustee fees which are not deferred) may be used to purchase EQR Common Shares under the EQR Employee Share Purchase Plan (the “ESPP”) at the discounted purchase price under the plan.  Each trustee is immediately 100% vested in his or her purchased ESPP shares held in the SERP and is allowed to begin withdrawals over a one to ten year period following termination of his or her trusteeship.  The majority of the trustees have elected to join the deferred compensation plan and defer the taxation of all cash trustee fees.  The trustees may also elect to defer receipt of their restricted shares to the SERP prior to the vesting of the shares.  Non-employee trustees do not participate in EQR’s profit sharing plan or receive any matching contributions on any fees or restricted shares so deferred.

 

Executive Compensation

 

The following tables show the compensation for Bruce W. Duncan, the Chief Executive Officer and President, and the other four most highly compensated executive officers of Equity Residential, the general partner of the Operating Partnership.

 

 

 

 

 

 

 

 

 

Long-Term Compensation

 

 

 

 

 

Annual Compensation

 

Awards

 

Payouts

 

 

 

Name and Principal Position

 

Year

 

Salary(1)

 

Cash
Bonus(1)

 

Restricted
Share
Awards(3)

 

Number
of Options
Granted(4)

 

Long-Term
Incentive
Payouts(5)

 

All Other
Compensation(6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bruce W. Duncan

 

2003

 

$

750,000

 

$

760,000

 

$

839,416

 

168,820

 

$

0

 

$

0

 

Chief Executive Officer &

 

2002

 

388,309

(2)

550,000

(2)

262,907

 

45,361

 

0

 

0

 

President

 

2001

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gerald A. Spector

 

2003

 

$

550,000

 

$

500,000

 

$

2,043,580

 

228,947

 

$

738,580

 

$

8,000

 

Executive Vice President &

 

2002

 

550,000

 

200,000

 

1,960,974

 

170,444

 

1,022,040

 

10,200

 

Chief Operating Officer

 

2001

 

550,000

 

500,000

 

1,594,588

 

364,742

 

716,199

 

11,900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

David J. Neithercut

 

2003

 

$

350,000

 

$

400,000

 

$

785,472

 

100,987

 

$

209,839

 

$

8,000

 

Executive Vice President –

 

2002

 

350,000

 

300,000

 

869,007

 

79,965

 

428,400

 

20,200

 

Corporate Strategy and Chief Financial Officer

 

2001

 

350,000

 

375,000

 

674,299

 

132,704

 

429,740

 

65,900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alan W. George

 

2003

 

$

350,000

 

$

275,000

 

$

616,458

 

71,711

 

$

207,726

 

$

8,000

 

Executive Vice President

 

2002

 

350,000

 

250,000

 

731,852

 

66,176

 

367,200

 

20,200

 

& Chief Investment Officer

 

2001

 

350,000

 

325,000

 

640,953

 

123,030

 

480,271

 

65,900

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Frederick C. Tuomi

 

2003

 

$

350,000

 

$

275,000

 

$

532,264

 

69,079

 

$

138,508

 

$

8,000

 

Executive Vice President &

 

2002

 

350,000

 

250,000

 

668,542

 

54,687

 

367,200

 

20,200

 

President – Western Division

 

2001

 

350,000

 

325,000

 

664,377

 

147,536

 

480,271

 

65,900

 

 

44



 


(1)                 Includes any compensation deferred under EQR’s deferred compensation plan.  Cash bonuses are reported in the year earned, even if paid in a subsequent year.

 

(2)                 Mr. Duncan’s 2002 salary of $388,309 represents time worked from April 8, 2002, his first day of employment, through December 31, 2002.  His annualized base salary for 2002 was $550,000.  Mr. Duncan voluntarily reduced his 2002 bonus from $750,000 to $550,000, with $100,000 of the reduction used to fund employee recognition cash grants.  Mr. Duncan also voluntary reduced his 2003 bonus by $100,000, to be used to fund employee recognition cash grants.

 

(3)                 The dollar amount shown equals the number of restricted shares granted in each year on account of the prior year’s service, multiplied by the fair market value of the common shares on the grant date.  These shares vest upon completion of three years of continuous employment following the grant date, with the exception of restricted shares issued in connection with the termination of the 2000 performance share grants, which vest in equal installments over three years.  The valuations do not take into account the diminution in value attributable to the restrictions applicable to the common shares.  Distributions are paid on restricted shares at the same rate as on unrestricted common shares. The total number of restricted common shares awarded to each named executive officer for 2003, 2002 and 2001, respectively, were: Mr. Duncan 35,644, 9,072 and 0; Mr. Spector 85,462, 71,663 and 60,262; Mr. Neithercut 32,980, 31,743 and 25,626; Mr. George 25,807, 26,736 and 24,350; and Mr. Tuomi 22,355, 24,438 and 25,252.

 

The number and value ($29.51 per share) of the restricted share holdings of each executive officer listed above at December 31, 2003 were as follows:

 

Name

 

Number of Restricted
Common Shares

 

Value at
December 31, 2003

 

Bruce W. Duncan

 

44,716

 

$

1,319,569

 

Gerald A. Spector

 

175,959

 

5,192,550

 

David J. Neithercut

 

72,557

 

2,141,157

 

Alan W. George

 

59,568

 

1,757,852

 

Frederick C. Tuomi

 

54,720

 

1,614,787

 

 

(4)                Shares underlying options are reported in the year granted.

 

(5)                 The dollar amount shown reflects the fair market value of vested shares issued in each year, multiplied by the fair market value of the common shares on the grant date.  These vested shares represent shares issued under EQR’s performance share grants, as further described in “Long-Term Incentive Plan Awards” below, based on EQR’s financial performance during the three calendar years following the date of grant.  Fifty percent of the shares were vested upon issuance with the balance issued as restricted shares vesting equally over two years from the grant date.  These restricted shares are reflected in the Restricted Share Awards column.  The total number of vested shares awarded to each named executive for 2003, 2002 and 2001, respectively, were Mr. Duncan 0, 0 and 0; Mr. Spector 30,048, 37,575 and 27,922; Mr. Neithercut 8,537, 15,750 and 16,754; Mr. George 8,451, 13,500 and 18,724; and Mr. Tuomi 5,635, 13,500 and 18,724.

 

(6)                 Principally includes employer matching and profit-sharing contributions to EQR’s 401(k) Plan.  This column also reflects the dollar value of premiums paid for the purchase of split-dollar life insurance policies for the following executives:  Mr. Neithercut:  2003 - $-0-, 2002 - $10,000 and 2001 - $54,000; Mr. George:  2003 - $-0-, 2002 - $10,000 and 2001 - $54,000; and Mr. Tuomi:  2003 - $-0-, 2002 - $10,000 and 2001 - $54,000.  While the executive is the owner of such policy, upon the executive’s death, EQR will receive from the death benefits all premiums paid by it on the executive’s behalf, plus 10% interest per annum on such premium payments for up to the first 10

 

45



 

years of such payments (collectively, “Company Premiums”), and the executive’s beneficiary will receive the balance of the death benefits.  In addition, the executive is entitled to 50% of the cash surrender value of the policy at age 62, and 50% at age 65.  Upon termination of employment prior to age 62, the executive must borrow against the policy or partially surrender the policy in an amount sufficient to repay the Company Premiums to EQR.  EQR ceased making payment of premiums on these policies in 2003.

 

OPTION GRANTS IN 2003

 

Name

 

Number of
Options
Granted (1)

 

% of Total
Options
Granted to
Employees

 

Exercise
Price Per
Share

 

Expiration
Date

 

Grant Date
Present Value(2)

 

Bruce W. Duncan

 

168,820

 

6.97

%

$

23.55

 

2/7/2013

 

$

320,758

 

Gerald A. Spector

 

228,947

 

9.45

%

23.55

 

2/7/2013

 

434,999

 

David J. Neithercut

 

100,987

 

4.17

%

23.55

 

2/7/2013

 

191,875

 

Alan W. George

 

71,711

 

2.96

%

23.55

 

2/7/2013

 

136,251

 

Frederick C. Tuomi

 

69,079

 

2.85

%

23.55

 

2/7/2013

 

131,250

 

 


(1)                       All options are granted at the fair market value of the common shares at the grant date.  Options granted have a term of not more than ten years from the grant date and vest in equal installments over three years.

 

(2)                       The estimated present value at grant date of option grants in 2003 has been calculated using the Black-Scholes option pricing model based on the following assumptions:  an estimated time until exercise of 5 years, a volatility of 20.8%, a risk-free interest rate of 3.02% and a dividend yield of 6.46%.  The real value of these options depends on the actual performance of EQR’s common shares during the applicable period and on the date or dates when options are exercised.  No gain to the optionee is possible without an increase in common share price, which would benefit all shareholders as well.

 

OPTION EXERCISES IN 2003

AND YEAR-END OPTION VALUES

 

 

 

Number of
Shares
Acquired
Upon
Exercise

 

Value
Realized
Upon
Exercise(1)

 

Number of
Unexercised
Options at
Dec. 31, 2003

 

Value of
Unexercised
Options at
Dec. 31, 2003(2)

 

Name

 

 

 

Exercisable

 

Unexercisable

 

Exercisable

 

Unexercisable

 

Bruce W. Duncan

 

0

 

$

0

 

16,454

 

197,727

 

$

8,721

 

$

1,021,488

 

Gerald A. Spector

 

275,000

 

1,572,306

 

661,148

 

459,157

 

3,046,278

 

1,939,586

 

David J. Neithercut

 

20,000

 

338,750

 

584,652

 

198,532

 

4,796,966

 

849,147

 

Alan W. George

 

120,000

 

1,089,239

 

261,049

 

156,840

 

1,173,434

 

641,609

 

Frederick C. Tuomi

 

0

 

0

 

338,560

 

154,716

 

1,908,744

 

638,172

 

 


(1)                       Represents the market value of a common share on the exercise date less the exercise price of the option.

 

(2)                       Represents the market value of a common share at December 31, 2003 ($29.51) less the exercise price of in-the-money options.

 

46



 

LONG-TERM INCENTIVE PLAN AWARDS

 

The table set forth below identifies the target number of performance units awarded in early 2004 for services rendered during 2003.  The executive officers have the opportunity to earn in common shares an amount as little as 0% to as much as 225% of the target number of performance units.  The owners of performance units have no right to vote, receive dividends or transfer the units until common shares are issued in exchange for the units.  The number of common shares the executive actually receives on the third anniversary of the grant date will depend on the excess, if any, by which EQR’s Average Annual Return (i.e., the average of the common share dividends declared during each year as a percentage of the common share price as of the first business day of January 2004 ($29.53), and the average percentage increase in funds from operations (“FFO”) for each calendar year on a per share basis over the prior year) for the three performance years exceeds the average of the 10-year Treasury Note interest rate as of the first business day in January of each performance year (the “T-Note Rate”).

 

If EQR’s Average Annual Return exceeds the T-Note Rate by:

 

less than 0.99%

 

1-1.99%

 

2%

 

3%

 

4%

 

5%

 

6%

 

greater than 7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Then the executive will receive common shares equal to the target number of units times the following%:

 

0%

 

50%

 

100%

 

115%

 

135%

 

165%

 

190%

 

225%

 

 

Fifty percent of the common shares to which an executive may be entitled under the performance share grants will vest, subject to the executive’s continued employment with EQR, on the third anniversary of the award (which will be the date the common shares are issued); twenty-five percent will vest on the fourth anniversary and the remaining twenty-five percent will vest on the fifth anniversary.  The common shares will also fully vest upon the executive’s death, retirement at or after age 62, disability or upon a change in control of EQR.

 

LONG-TERM INCENTIVE PLAN AWARDS  FOR 2003

 

Name

 

Number of Target Units

 

Performance Period

Bruce W. Duncan

 

15,470

 

1-01-2004 – 12-31-2006

Gerald A. Spector

 

11,750

 

1-01-2004 – 12-31-2006

David J. Neithercut

 

6,837

 

1-01-2004 – 12-31-2006

Alan W. George

 

5,213

 

1-01-2004 – 12-31-2006

Frederick C. Tuomi

 

4,615

 

1-01-2004 – 12-31-2006

 

Employment Contracts And Change In Control Arrangements

 

Employment Contracts.  EQR entered into an Employment Agreement with Mr. Duncan in January 2003 reflecting Mr. Duncan’s appointment as President and Chief Executive Officer as of January 1, 2003.  The term of the agreement is four years from January 1, 2003 until December 31, 2006, with annual one-year extensions thereafter unless terminated by either party upon 90 days notice.  Mr. Duncan’s base annual salary is $750,000, subject to periodic increases in the Board’s discretion.  His target cash bonus is 144% of base salary, or $1,080,000.  His target long-term incentive annual grant of options, restricted shares and performance shares is 246% of annual cash compensation, or $4,500,000.  The “target” criteria for achievement of Mr. Duncan’s bonus and long-term incentive awards will be determined using the same criteria utilized by the Compensation Committee of EQR’s Board for achievement of target bonuses and long-term incentive awards for EQR’s other senior executives.

 

47



 

Mr. Duncan’s employment agreement provides that upon his termination of employment for any reason (other than having left EQR voluntarily without good reason or as a result of termination for cause or a Change in Control (as defined below)), he would receive the following benefits:

 

                  All his options, restricted shares and performance share units would vest in full, with the performance share units vesting at the greater of the 100% level or the performance level achieved through the date of termination.  He would have the balance of the 10-year option period to exercise any vested options.

 

                  He would receive a severance payment equal to two and one-half times his current base annual salary and two and one-half times the average of the prior two years’ cash bonuses (or two and one-half times the 2004 target bonus if termination occurs prior to the payment of the 2004 calendar year bonus), unless his employment is terminated due to his death or disability, in which case he would receive only the proceeds payable under EQR’s standard employee life insurance and disability programs.

 

                  He would receive a prorated cash bonus (based on the number of days in the calendar year worked) equal to the prior year’s bonus, as well as any accrued unpaid base salary, accrued unreimbursed expenses and benefits, and his accrued unpaid bonus, if any, for the prior year.

 

Upon Mr. Duncan’s continuous employment with EQR through December 31, 2006, he will be deemed to have sufficient years of service for retiree eligibility under all EQR incentive and benefit plans (specifically excluding Mr. Duncan’s Deferred Compensation Agreement and his Retirement Benefits Agreement, which will remain in effect thereafter in accordance with their terms), including continued exercisability of share options at the most senior tier upon a termination of employment, but not less than the lesser of five years or the remaining term of the grant.  Mr. Duncan also receives five weeks of vacation and an EQR paid non-golf club membership and may maintain two additional for-profit directorships.  EQR also has agreed to renominate Mr. Duncan for reelection to its Board as long as he is the Chief Executive Officer of EQR.  In accordance with EQR’s policy, Mr. Duncan has agreed to submit his resignation as trustee upon the termination of his employment with EQR for any reason.

 

EQR entered into a Compensation Agreement with Mr. Zell in October 2001 (as amended in March 2003) for services provided by Mr. Zell as Chairman of the Board for the calendar years 2001, 2002 and 2003, which entitles Mr. Zell to an annual long-term incentive grant of $3,250,000 of options and restricted shares.  Mr. Zell is also responsible for his own business related expenses. Subject to Mr. Zell’s continuing service as EQR’s Chairman, his annual long-term incentive grant of $3,250,000 shall be allocated between options and restricted shares in the same ratio as approved by the Board for the annual long-term incentive grants to EQR’s executive officers, utilizing the same valuation criteria described below.  For the 2003 and 2004 grants, the $3,250,000 was allocated 25% to options and 75% to restricted shares.  In January 2004, Mr. Zell was granted 359,518 options at an exercise price of $29.25 per share and 83,333 restricted shares for his contribution during 2003 in his capacity as Chairman of the Board.

 

The number of options granted is determined by dividing the dollar amount allocated to options by the fair market value of each option using the same valuation criteria utilized by EQR’s Compensation Committee in its annual employee option grants made as of the same date.  The options are granted at the fair market value of EQR’s common shares at the date of grant, are granted for a period of ten years and vest over a period of three years at a rate of one third of such grant each year.  The number of restricted shares granted is determined by dividing the dollar amount allocated to restricted shares by the closing price of common shares of EQR on the grant date.  The restricted shares vest in full on the third anniversary of the grant date.  Distributions are paid on these restricted shares at the same rate as on unrestricted common shares.

 

48



 

EQR also entered into a Retirement Benefits Agreement with Mr. Zell in October 2001.  The Retirement Benefits Agreement provides Mr. Zell with a cash retirements benefit after the termination of his service as Chairman of the Board.  If Mr. Zell’s employment as Chairman is terminated for any reason, other than by EQR for cause, he (or his estate in the event of his death) will be entitled to an annual retirement benefit of $500,000 (as increased by a CPI index from January 2002 through the termination date) over a ten year period commencing on the termination date.  Should Mr. Zell be terminated for cause, he would not be entitled to any such retirement benefit.

 

Deferred Compensation Agreements.  EQR has entered into Deferred Compensation Agreements with Messrs. Duncan and Spector.

 

Mr. Duncan’s Deferred Compensation Agreement, entered into in January 2003, provides Mr. Duncan with a salary benefit after the termination of his employment with EQR.  If Mr. Duncan’s employment is terminated by EQR without cause, Mr. Duncan resigns for good reason, or Mr. Duncan resigns for any reason on or after December 31, 2006, he would be entitled to annual deferred compensation for a ten-year period commencing on the termination date (or age 62 if Mr. Duncan resigns without good reason between December 31, 2006 and December 31, 2011) in an amount equal to $750,000 (increased by a CPI Index from January 2003 through the termination date), multiplied by a percentage equal to 10% for each year Mr. Duncan was employed by EQR since March 15, 2002, but not to exceed 100%.  In the event Mr. Duncan’s employment is terminated as a result of his death, permanent disability or incapacity, he would be entitled to a similar amount except that the annual percentage would be 15%, not 10%.  Should Mr. Duncan be terminated for cause or should he choose to leave voluntarily, without good reason, prior to December 31, 2006, he would not be entitled to any deferred compensation.

 

Mr. Spector’s Deferred Compensation Agreement, entered into in 1996, as most recently amended in January 2002, provides Mr. Spector with a salary benefit after the termination of his employment with EQR.  If Mr. Spector’s employment is terminated by EQR without cause, Mr. Spector resigns for good reason, or Mr. Spector resigns for any reason on or after January 1, 2009, he would be entitled to annual deferred compensation for a ten-year period commencing on the termination date in an amount equal to $550,000 (increased by a CPI Index from January 2002 through the termination date), multiplied by a percentage equal to 6.67% for each year Mr. Spector was employed by EQR since December 31, 1993, but not to exceed 100%.  In the event Mr. Spector’s employment is terminated as a result of his death, permanent disability or incapacity, he would be entitled to a similar amount except that the annual percentage would be 10%, not 6.67%.  Should Mr. Spector be terminated for cause or should he choose to leave voluntarily, without good reason, prior to January 1, 2009, he would not be entitled to any deferred compensation.

 

Change in Control Agreements.  EQR has Change in Control/Severance Agreements (the “Agreements”) with the persons named in the Summary Compensation Table and other key employees of EQR that become effective upon either a “Change in Control” or termination of employment within three years following the hiring of a new Chief Executive Officer.  A Change in Control will generally be deemed to have occurred upon a third party’s acquisition of 30% or more of EQR’s common shares, whether through purchase, merger or consolidation or a sale of all or substantially all of the assets of EQR.  In the event that an employee is dismissed without Cause or resigns for Good Reason (as such terms are defined in the Agreements) during the three-year period following either the effective date of the Change in Control or, for all executives other than the Chief Executive Officer, the hiring of a new Chief Executive Officer, he or she will be entitled to all accrued but unpaid compensation and benefits in a lump sum cash payment consisting of the employee’s base salary through the date of termination, and a severance payment equal to a multiple (ranging from 3.0 for the CEO to 2.0 for other executive officers) of the employee’s annual base salary plus the average of the employee’s annual bonus for the last three fiscal years.  The employee is also entitled to continued employee welfare benefits for the remainder of the applicable time period.  Several of EQR’s employment benefit plans also provide for enhanced employee benefits upon a “Change in Control” of EQR.  In general, upon a Change in

 

49



 

Control, all options, restricted shares and performance shares immediately vest.

 

Retirement Benefits Agreements.  EQR has entered into Executive Retirement Benefits Agreements with the persons named in the Summary Compensation Table and other Executive Vice Presidents of EQR.  These agreements provide that, if after reaching age 62 or older, either the executive retires from EQR or is terminated as a result of a Change in Control, the executive will be eligible to receive health and life benefits for the remainder of his or her life as any regular active employee.  These benefits will be offered at the same rates as would be paid by an active employee for like coverage and subject to increase as any other active employee.

 

Compensation Committee Interlocks And Insider Participation

 

The members of the Compensation Committee of EQR’s Board are John W. Alexander (Chair), James D. Harper, Jr. and Sheli Z. Rosenberg.  No member of the Compensation Committee is a past or present officer or employee of EQR.

 

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth information, as of January 31, 2004, regarding the beneficial ownership of the OP Units by each person known by the Operating Partnership to be the beneficial owner of more than five percent of the Operating Partnership’s outstanding OP Units, and in addition, each trustee of EQR, EQR’s five most highly compensated executive officers at year end, and by all trustees and executive officers of EQR as a group.  Each person named in the table has sole voting and investment power with respect to all OP Units shown as beneficially owned by such person, except as otherwise set forth in the notes to the table.  In addition, the table also sets forth information, as of January 31, 2004, regarding each such person’s (other than EQR) beneficial ownership of EQR Common Shares and Common Shares that may be acquired within 60 days through the exercise of options.

 

Name

 

Number of EQR
Common Shares(1)

 

EQR Shares
Upon
Exercise of
Options(2)

 

Percent of EQR
Common Shares(1)

 

Number of
OP Units

 

Percent of
OP Units

 

Equity Residential (2 N. RiversidePlaza, Chicago, IL  60606)

 

 

 

 

278,543,863

 

92.79

%

Samuel Zell

 

6,796,077

(3)

2,243,708

 

3.16

%

4,863,502

 

1.62

%

Bruce W. Duncan

 

164,677

(4)

87,847

 

 

*

44,794

 

 

John W. Alexander

 

62,437

 

75,786

 

 

*

 

 

Charles L. Atwood

 

2,905

 

1,809

 

 

*

 

 

Stephen O. Evans

 

1,294,712

(5)

22,283

 

 

*

1,168,778

 

 

*

James D. Harper, Jr.

 

32,418

 

88,951

 

 

*

 

 

Boone A. Knox

 

3,388,575

(6)

38,948

 

1.23

%

 

 

Desiree G. Rogers

 

1,992

 

 

 

*

 

 

Sheli Z. Rosenberg

 

290,455

(7)

326,432

 

 

*

3,056

 

 

*

Gerald A. Spector

 

789,183

(8)

845,858

 

 

*

218

 

 

*

Michael N. Thompson

 

213,762

(9)

38,948

 

 

*

 

 

B. Joseph White

 

28,638

 

70,948

 

 

*

 

 

Alan W. George

 

176,362

 

326,355

 

 

*

 

 

David J. Neithercut

 

212,799

(10)

667,537

 

 

*

 

 

Frederick C. Tuomi

 

148,166

 

407,327

 

 

*

 

 

Trustees and Executive Officers as a Group (20 persons)

 

14,237,365

 

6,122,961

 

7.00

%

6,080,348

 

2.03

%

 


*                      Less than 1%.

 

50



 

(1)               The number of common shares beneficially owned is based on SEC regulations regarding the beneficial ownership of securities.  On January 31, 2004, a total of 278,543,863 common shares and 21,657,139 OP units were outstanding, including both vested and unvested restricted share awards.  OP Units are exchangeable on a one-for-one basis into common shares.  Percentage ownership amounts are calculated by treating the holders’ options and, in the case of EQR, OP Units, as outstanding EQR Common Shares.  Except as otherwise noted, the persons named in the table have sole voting and investment power over the shares listed.

 

(2)     Reflects EQR Common Shares which may be acquired within 60 days after January 31, 2004.

 

(3)               Includes 4,863,502 OP Units.  Mr. Zell does not have a pecuniary interest in 600 common shares reported above held by the Helen Zell Revocable Trust (“HZRT”), the trustee of which is Helen Zell, Mr. Zell’s spouse.  Mr. Zell also does not have a pecuniary interest in 60,000 common shares held by the Zell Family Foundation, of which Mr. Zell is a director.  The number in the table includes 1,206,968 common shares and 4,462,828 OP Units in which Mr. Zell has a pecuniary interest but does not have voting or dispositive power.  1,206,968 common shares and 3,388,316 OP Units are indirectly held by trusts established for the benefit of Mr. Zell and his family, the trustee of which is Chai Trust Company, L.L.C. (“Chai Trust”).  Mr. Zell is not an officer or director of Chai Trust and does not have voting or dispositive power over such common shares or OP Units.  Additionally, 1,074,512 OP Units are held by EGIL Investments, Inc.  Under a shareholders’ agreement dated December 31, 1999, trusts established for the benefit of the family of Ann and Robert Lurie have the power to vote and to dispose of the common shares and OP Units beneficially owned by EGIL Investments, Inc.  Mr. Zell disclaims beneficial ownership of such 1,206,968 common shares and 4,462,828 OP Units except to the extent of his pecuniary interest therein.

 

(4)               Includes 44,794 OP Units.

 

(5)               Includes 100,000 common shares and 35,550 OP Units beneficially owned by The Evans Family Limited Liability Company, of which Mr. Evans serves as the manager.  Also includes four OP Units beneficially owned by The Evans Family Revocable Trust, of which Mr. Evans serves as the trustee.  As such, Mr. Evans may be deemed the beneficial owner of all the foregoing common shares and OP Units.  Also includes 1,133,224 OP Units beneficially owned by limited partnerships (collectively, the “EW LPs”), of which Mr. Evans serves as a general partner and has a 50% ownership interest.  As such, Mr. Evans may be deemed the beneficial owner of approximately 50% of the common shares and OP Units beneficially owned by the EW LPs.  Mr. Evans disclaims beneficial ownership of the other 50% interest in such common shares and OP Units, which are beneficially owned by other persons.

 

(6)               Includes 2,347,898 common shares beneficially owned by Knox, Ltd., of which Mr. Knox is the general partner, and includes 6,774 common shares beneficially owned by BT Investments, of which Mr. Knox is the managing partner.  Mr. Knox disclaims beneficial ownership of the common shares owned by Knox, Ltd. and BT Investments, except to the extent of his pecuniary interest in 230,232 common shares.  Also includes 6,228 common shares beneficially owned by Mr. Knox’s spouse and 848 common shares beneficially owned by Mr. Knox, not individually, but as custodian for his niece and nephew, as to all of which Mr. Knox disclaims beneficial ownership.  Also includes 359,678 common shares beneficially owned by the Knox Foundation, of which Mr. Knox is the trustee.  Mr. Knox disclaims beneficial ownership of the common shares owned by the Knox Foundation.  Also includes 335,892 common shares beneficially owned by Folkstone Limited Partnership (“FLP”), of which Mr. Knox is a general partner.  Mr. Knox disclaims beneficial ownership of the common shares owned by FLP, except to the extent of his pecuniary interest therein.  Also includes 144,298 common shares, over which Mr. Knox has investment authority, beneficially owned by his sister-in-law.  Mr. Knox disclaims beneficial ownership of these common shares.

 

(7)               Includes 59,342 common shares beneficially owned by Ms. Rosenberg’s spouse, as to which Ms. Rosenberg disclaims beneficial ownership.  Also includes 3,056 OP Units.

 

51



 

(8)               Includes 239,919 common shares beneficially owned by Mr. Spector’s spouse, and 6,328 common shares beneficially owned by Mr. Spector as custodian for his minor children, as to all of which Mr. Spector disclaims beneficial ownership.  Also includes 218 OP Units.

 

(9)               Includes 173,290 common shares beneficially owned by Deep South Investments, Ltd., of which Mr. Thompson is general partner.  Mr. Thompson disclaims beneficial ownership of the shares, except to the extent of his pecuniary interest therein.

 

(10)         Includes 9,974 common shares beneficially owned by Benemi Partners, L.P., of which Mr. Neithercut is general partner.

 

Equity Compensation Plan Information

 

The following table provides information as of December 31, 2003 with respect to EQR’s Common Shares that may be issued under existing equity compensation plans.  Any Common Shares issued pursuant to EQR’s equity compensation plans will result in the Operating Partnership issuing OP Units to EQR on a one-for-one basis.

 

Plan Category

 

Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights

 

Weighted-average
exercise price of
outstanding options,
warrants and rights

 

Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))

 

 

 

(a)(1)(2)

 

(b)(2)

 

(c)(3)

 

Equity compensation plans approved by shareholders

 

12,079,908

 

$

24.27

 

25,474,544

 

 

 

 

 

 

 

 

 

Equity compensation plans not approved by shareholders

 

n/a

 

n/a

 

n/a

 

 


(1)                                  Amount shown includes 21,970 shares reserved for issuance upon exercise of outstanding options assumed by EQR as a result of mergers.

 

(2)                                  The amounts shown in columns (a) and (b) of the above table do not include 1,362,733 outstanding common shares (all of which are restricted and subject to vesting requirements) that were granted under EQR’s Fifth Amended and Restated 1993 Share Option and Share Award Plan (the “1993 Plan”) and EQR’s 2002 Share Incentive Plan (the “2002 Plan”) and outstanding common shares that have been purchased by employees and trustees under EQR’s ESPP.

 

(3)                                  Includes 20,488,513 common shares that may be granted under the 2002 Plan, of which only 25% may be in the form of restricted shares, and 5,046,553 common shares that may be sold to employees and trustees under the ESPP.

 

The aggregate number of securities available for issuance (inclusive of restricted shares previously granted and outstanding and shares underlying outstanding options) under the 2002 Plan equals 7.5% of EQR’s outstanding common shares, calculated on a fully diluted basis, determined annually on the first day of each calendar year.  On January 1, 2004, this amount equaled 22,736,239.

 

52



 

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

(a) Transactions with Management and Others

 

Pursuant to the terms of the partnership agreement for the Operating Partnership, the Operating Partnership is required to reimburse EQR for all expenses incurred by EQR in excess of income earned by EQR through its indirect 1% ownership of various entities.  Amounts paid on behalf of EQR are reflected in the Consolidated Statements of Operations as general and administrative expenses.

 

(b) Certain Business Relationships

 

                  EQR’s management company managed a multifamily residential community owned by an affiliate of Mr. Zell on terms equivalent to a third-party transaction.  The property management fees received from such affiliate were $250,854 for 2003.

 

                  During 2003, the Operating Partnership reimbursed Mr. Spector in the amount of $224,943 for the actual operating costs (excluding acquisition costs) of operating his personal aircraft for himself and other employees on business.

 

                  The Operating Partnership leases its corporate headquarters from an entity controlled by Mr. Zell.  Amounts incurred for such office space and related office facility services in 2003 were $1,733,486.

 

                  Since the Merry Land Merger, the Operating Partnership has leased space in an office building in Augusta, Georgia indirectly owned by Mr. Thompson since May 2003 and directly owned by MRYP from 1998 to 2003.  The Operating Partnership paid $168,822 in annual rent in 2003 for this space.

 

(c) Indebtedness of Management – None

 

(d) Transactions with Promoters – None

 

Item 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

Fees billed to EQR and the Operating Partnership by Ernst & Young for the years ended December 31, 2003 and 2002 were as follows:

 

 

 

2003

 

2002

 

Audit fees(1)

 

$

827,800

 

$

787,150

 

Audit-related fees(2)

 

269,600

 

263,800

 

Tax compliance/preparation fees(3)

 

563,900

 

550,300

 

Tax consulting fees(4)

 

93,141

 

75,122

 

All other fees(5)

 

14,750

 

18,304

 

Total fees

 

$

1,769,191

 

$

1,694,676

 

 


(1)               Audit fees are incurred for the review and audit of EQR’s and the Operating Partnership’s annual financial statements included in their respective Annual Reports on Form 10-K, the review of EQR’s and the Operating Partnership’s interim financial statements included in their Quarterly Reports on Form 10-Q, and for comfort and consent letters related to SEC registration statements and public offerings of registered securities.

 

53



 

(2)               Fees for audit-related services include consultations regarding EQR’s and the Operating Partnership’s internal control documentation, lender required partnership audits and legally required employee benefit plan audits.

 

(3)               Tax compliance/preparation fees are incurred for the preparation of original and amended tax returns for EQR, the Operating Partnership and numerous subsidiaries, claims for refunds and tax payment compliance.

 

(4)               Tax consulting fees relate primarily to tax planning advice incident to acquisitions, dispositions, financings and taxable REIT subsidiaries.

 

(5)               All other fees relate to real estate tax appeal consulting services.

 

Pre-Approval Policies

 

EQR’s Audit Committee, pursuant to its exclusive authority, has reviewed and approved EQR’s engagement of Ernst & Young as the Operating Partnership’s independent auditors, and the incurrence of all of the fees described above, for 2003 and 2002 and has selected Ernst & Young as independent auditor for 2004, subject to review and approval of the final terms of its engagement as such and its audit fees.  The Audit Committee has also adopted Pre-Approval Policies for all other services Ernst & Young may perform for EQR and the Operating Partnership in 2004.  The Pre-Approval Policies detail with specificity the services that are authorized within each of the above-described categories of services and provide for aggregate maximum dollar amounts for such pre-approved services.  Any additional services not described or otherwise exceeding the maximum dollar amounts prescribed by the Pre-Approval Policies for 2004 will require the further advance review and approval of the Audit Committee.  The Audit Committee has delegated the authority to grant any such additional required approval to its Chairman between meetings of the Committee, provided that the Chairman report the details of the exercise of any such delegated authority at the next meeting of the Audit Committee.

 

54



 

PART IV

 

Item 15.  Exhibits, Financial Statements, Schedules and Reports on Form 8-K

 

(a)

(1 & 2) See Index to Financial Statements and Schedules on page F-1 of this Form 10-K.

(3) Exhibits:

 

2.1^

 

Agreement and Plan of Merger among Grove Property Trust, Grove Operating, L.P. and  ERP Operating Limited Partnership dated as of July 17, 2000.

3.1*

 

Fifth Amended and Restated Agreement of Limited Partnership of ERP Operating Limited Partnership.

4.1**

 

Indenture, dated October 1, 1994, between the Operating Partnership, as obligor and The First National Bank of Chicago, as trustee.

10.1+

 

Amended and Restated Master Reimbursement Agreement dated as of November 1, 1996 by and between Federal National Mortgage Association and EQR-Bond Partnership.

10.2

 

Master Amendment to Other Securities Term Sheets and Joinders to Operating Partnership Agreement of ERP Operating Limited Partnership dated December 19, 2003.

10.3

 

Assignment and Assumption Agreement between Equity Residential and ERP Operating Limited Partnership dated December 19, 2003.

10.4++

 

Amended and Restated Limited Partnership Agreement of Lexford Properties, L.P.

10.5+++

 

Revolving Credit Agreement dated as of May 29, 2002 among the Operating Partnership, Bank of America, National Association, as administrative agent, JP Morgan Chase Bank, as syndication agent, and the banks named therein.

10.6+++

 

Guaranty of Payment dated as of May 29, 2002 between Equity Residential and Bank of America, N.A., as administrative agent.

 

 

 

12

 

Computation of Ratio of Earnings to Combined Fixed Charges.

21

 

List of Subsidiaries of ERP Operating Limited Partnership.

23.1

 

Consent of Ernst & Young LLP.

24.1

 

Power of Attorney for John W. Alexander dated March 3, 2004.

24.2

 

Power of Attorney for Stephen O. Evans dated March 5, 2004.

24.3

 

Power of Attorney for Charles L. Atwood dated March 8, 2004.

24.4

 

Power of Attorney for Desiree G. Rogers dated March 9, 2004.

24.5

 

Power of Attorney for B. Joseph White dated March 3, 2004.

24.6

 

Power of Attorney for Sheli Z. Rosenberg dated March 5, 2004.

24.7

 

Power of Attorney for James D. Harper, Jr. dated March 4, 2004.

24.8

 

Power of Attorney for Boone A. Knox dated March 3, 2004.

24.9

 

Power of Attorney for Michael N. Thompson dated March 5, 2004.

24.10

 

Power of Attorney for Samuel Zell dated March 2, 2004.

24.11

 

Power of Attorney for Gerald A. Spector dated March 2, 2004.

31.1

 

Certification of Bruce W. Duncan, Chief Executive Officer of Registrant’s General Partner.

31.2

 

Certification of David J. Neithercut, Chief Financial Officer of Registrant’s General Partner.

32.1

 

Certification Pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to Section 906 of the Sarbanes–Oxley Act of 2002, of Bruce W. Duncan, Chief Executive Officer of Registrant’s General Partner.

32.2

 

Certification Pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to Section 906 of the Sarbanes–Oxley Act of 2002, of David J. Neithercut, Chief Financial Officer of Registrant’s General Partner.

 

55



 


^                                          Included as Appendix A to Equity Residential’s Form S-4 filed on July 23, 2000.

*                                         Included as an exhibit to the Operating Partnership’s Form 8-K/A dated July 23, 1998, filed on August 18, 1998.

**                                  Included as an exhibit to the Operating Partnership’s Form 10/A dated December 12, 1994, File No. 0-24920, and incorporated herein by reference.

+                                         Included as an exhibit to the Operating Partnership’s Form 10-K for the year ended December 31, 1996.

++                                  Included as an exhibit to Equity Residential’s Form 10-K for the year ended December 31, 1999 and incorporated herein by reference.

+++                           Included as an exhibit to the Operating Partnership’s Form 10-Q for the quarterly period ended June 30, 2002 and incorporated herein by reference.

 

(b)  Reports on Form 8-K:  None.

 

(c)  Exhibits:  See Item 15(a)(3) above.

 

(d)  Financial Statement Schedules:  See Index to Financial Statements attached hereto on page F-1 of this Form 10-K.

 

56



 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned thereunto duly authorized.

 

 

ERP

OPERATING LIMITED PARTNERSHIP

 

BY:

EQUITY RESIDENTIAL

 

 

ITS GENERAL PARTNER

 

 

 

 

Date:

 March 12, 2004

 

By:

/s/

Bruce W. Duncan

 

 

 

 

Bruce W. Duncan

 

 

President, Chief Executive Officer,
and Trustee

 

 

 

 

 

 

Date:

 March 12, 2004

 

By:

/s/

David J. Neithercut

 

 

 

 

David J. Neithercut

 

 

Executive Vice President, Corporate
Strategy and Chief Financial Officer

 

 

 

 

 

 

Date:

 March 12, 2004

 

By:

/s/

Michael J. McHugh

 

 

 

 

Michael J. McHugh

 

 

Executive Vice President, Chief Accounting
Officer, Treasurer and *Attorney-in-fact

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of the registrant and in the capacities and on the dates indicated have signed this report below.

 

Date:

March 12, 2004

 

By:

/s/

Samuel Zell*

 

 

 

 

Samuel Zell

 

 

Chairman of the Board of Trustees

 

 

 

 

Date:

March 12, 2004

 

By:

/s/

Gerald A. Spector*

 

 

 

 

Gerald A. Spector

 

 

Executive Vice President, Chief
Operating Officer and Trustee

 

 

 

 

 

 

 

Date:

March 12, 2004

 

By:

/s/

Sheli Z. Rosenberg*

 

 

 

 

Sheli Z. Rosenberg

 

 

 

Trustee

 

 

 

 

 

 

 

 

Date:

March 12, 2004

 

By:

/s/

James D. Harper*

 

 

 

 

James D. Harper

 

 

 

Trustee

 

 

 

 

 

 

 

 

Date:

March 12, 2004

 

By:

/s/

John W. Alexander*

 

 

 

 

John W. Alexander

 

 

 

Trustee

 

57



 

SIGNATURES-CONTINUED

 

 

 

 

 

 

 

 

Date:

March 12, 2004

 

By:

/s/

B. Joseph White*

 

 

 

 

B. Joseph White

 

 

 

Trustee

 

 

 

 

Date:

March 12, 2004

 

By:

/s/

Charles L. Atwood*

 

 

 

 

Charles L Atwood

 

 

 

Trustee

 

 

 

 

Date:

March 12, 2004

 

By:

/s/

Desiree G. Rogers*

 

 

 

 

Desiree G. Rogers

 

 

 

Trustee

 

 

 

 

Date:

March 12, 2004

 

By:

/s/

Stephen O. Evans*

 

 

 

 

Stephen O. Evans

 

 

 

Trustee

 

 

 

 

Date:

March 12, 2004

 

By:

/s/

Boone A. Knox*

 

 

 

 

Boone A. Knox

 

 

 

Trustee

 

 

 

 

Date:

March 12, 2004

 

By:

/s/

Michael N. Thompson*

 

 

 

 

Michael N. Thompson

 

 

 

Trustee

 

 

 

 

 

 

 

 

* By:

/s/  Michael J. McHugh

 

 

 

 

Michael J. McHugh
as Attorney-in-fact

 

 

 

 

58


INDEX TO FINANCIAL STATEMENTS AND SCHEDULE

 

ERP OPERATING LIMITED PARTNERSHIP

 

 

PAGE

FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT

 

 

 

Report of Independent Auditors

F-2

 

 

Consolidated Balance Sheets as of December 31, 2003 and 2002

F-3

 

 

Consolidated Statements of Operations for the years ended December 31, 2003, 2002 and 2001

F-4 to F-5

 

 

Consolidated Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001

F-6 to F-8

 

 

Consolidated Statements of Changes in Partners’ Capital for the years ended December 31, 2003, 2002 and 2001

F-9 to F-10

 

 

Notes to Consolidated Financial Statements

F-11 to F-45

 

 

SCHEDULE FILED AS PART OF THIS REPORT

 

 

 

Schedule III - Real Estate and Accumulated Depreciation

S-1 to S-17

 

All other schedules have been omitted because they are inapplicable, not required or the information is included elsewhere in the consolidated financial statements or notes thereto.

 



 

REPORT TO INDEPENDENT AUDITORS

 

To the Partners

ERP Operating Limited Partnership

 

We have audited the accompanying consolidated balance sheets of ERP Operating Limited Partnership (the “Operating Partnership”) as of December 31, 2003 and 2002 and the related consolidated statements of operations, partners’ capital and cash flows for each of the three years in the period ended December 31, 2003.  Our audits also included the financial statement schedule listed in the accompanying index to financial statements and schedule.  These financial statements and schedule are the responsibility of the Operating Partnership’s management.  Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

 

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of ERP Operating Limited Partnership at December 31, 2003 and 2002, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

 

As discussed in Note 2 to the consolidated financial statements, the Operating Partnership changed its method of accounting for stock-based compensation in 2003, changed its method of accounting for goodwill and discontinued operations in 2002 and changed its method of accounting for derivative instruments in 2001.

 

 

 

/s/ ERNST & YOUNG LLP

 

 

ERNST & YOUNG LLP

 

Chicago, Illinois

February 4, 2004

 

F-2



 

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

 

 

 

December 31,
2003

 

December 31,
2002

 

ASSETS

 

 

 

 

 

Investment in real estate

 

 

 

 

 

Land

 

$

1,853,093

 

$

1,803,577

 

Depreciable property

 

11,018,326

 

11,240,245

 

Construction in progress

 

2,960

 

2,441

 

Investment in real estate

 

12,874,379

 

13,046,263

 

Accumulated depreciation

 

(2,296,013

)

(2,112,017

)

Investment in real estate, net of accumulated depreciation

 

10,578,366

 

10,934,246

 

 

 

 

 

 

 

Cash and cash equivalents

 

49,579

 

29,875

 

Investments in unconsolidated entities

 

473,977

 

509,789

 

Rents receivable

 

426

 

2,926

 

Deposits – restricted

 

133,752

 

141,278

 

Escrow deposits – mortgage

 

41,104

 

50,565

 

Deferred financing costs, net

 

31,135

 

32,144

 

Goodwill, net

 

30,000

 

30,000

 

Other assets

 

128,554

 

80,094

 

Total assets

 

$

11,466,893

 

$

11,810,917

 

 

 

 

 

 

 

LIABILITIES AND PARTNERS’ CAPITAL

 

 

 

 

 

Liabilities:

 

 

 

 

 

Mortgage notes payable

 

$

2,693,815

 

$

2,927,614

 

Notes, net

 

2,656,674

 

2,456,085

 

Line of credit

 

10,000

 

140,000

 

Accounts payable and accrued expenses

 

55,463

 

58,784

 

Accrued interest payable

 

60,334

 

63,151

 

Rents received in advance and other liabilities

 

189,372

 

170,680

 

Security deposits

 

44,670

 

45,333

 

Distributions payable

 

140,195

 

140,844

 

Total liabilities

 

5,850,523

 

6,002,491

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

Minority Interests – Partially Owned Properties

 

9,903

 

9,811

 

 

 

 

 

 

 

Partners’ capital:

 

 

 

 

 

Preference Units

 

670,913

 

946,157

 

Preference Interests

 

246,000

 

246,000

 

Junior Preference Units

 

2,217

 

5,846

 

General Partner

 

4,371,483

 

4,306,873

 

Limited Partners

 

342,809

 

349,646

 

Deferred compensation

 

(3,554

)

(12,118

)

Accumulated other comprehensive loss

 

(23,401

)

(43,789

)

Total partners’ capital

 

5,606,467

 

5,798,615

 

 

 

 

 

 

 

Total liabilities and partners’ capital

 

$

11,466,893

 

$

11,810,917

 

 

See accompanying notes

 

F-3



 

ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands except per OP Unit data)

 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

REVENUES

 

 

 

 

 

 

 

Rental income

 

$

1,808,925

 

$

1,799,581

 

$

1,827,719

 

Fee and asset management

 

14,373

 

9,582

 

7,498

 

Interest income – investment in mortgage notes

 

 

 

8,786

 

Total revenues

 

1,823,298

 

1,809,163

 

1,844,003

 

 

 

 

 

 

 

 

 

EXPENSES

 

 

 

 

 

 

 

Property and maintenance

 

498,608

 

464,981

 

481,497

 

Real estate taxes and insurance

 

196,987

 

181,890

 

168,519

 

Property management

 

68,058

 

72,416

 

76,969

 

Fee and asset management

 

7,819

 

7,885

 

7,345

 

Depreciation

 

444,339

 

419,039

 

396,737

 

General and administrative

 

38,810

 

46,492

 

35,414

 

Impairment on technology investments

 

1,162

 

1,162

 

11,766

 

Impairment on corporate housing business

 

 

17,122

 

 

Amortization of goodwill

 

 

 

2,356

 

Total expenses

 

1,255,783

 

1,210,987

 

1,180,603

 

 

 

 

 

 

 

 

 

Operating income

 

567,515

 

598,176

 

663,400

 

 

 

 

 

 

 

 

 

Interest and other income

 

16,235

 

14,806

 

21,497

 

Interest:

 

 

 

 

 

 

 

Expense incurred, net

 

(326,465

)

(333,152

)

(344,755

)

Amortization of deferred financing costs

 

(6,164

)

(5,617

)

(4,978

)

 

 

 

 

 

 

 

 

Income before allocation to Minority Interests, income (loss) from investments in unconsolidated entities, net gain on sales of unconsolidated entities, discontinued operations and cumulative effect of change in accounting principle

 

251,121

 

274,213

 

335,164

 

Allocation to Minority Interests – Partially Owned Properties

 

271

 

(1,867

)

(2,249

)

Income (loss) from investments in unconsolidated entities

 

(10,118

)

(3,698

)

3,772

 

Net gain on sales of unconsolidated entities

 

4,942

 

5,054

 

387

 

Income from continuing operations

 

246,216

 

273,702

 

337,074

 

Net gain on sales of discontinued operations

 

310,706

 

104,296

 

148,906

 

Discontinued operations, net

 

21,583

 

70,177

 

21,704

 

Income before cumulative effect of change in accounting principle

 

578,505

 

448,175

 

507,684

 

Cumulative effect of change in accounting principle

 

 

 

(1,270

)

Net income

 

$

578,505

 

$

448,175

 

$

506,414

 

 

 

 

 

 

 

 

 

ALLOCATION OF NET INCOME:

 

 

 

 

 

 

 

Preference Units

 

$

76,435

 

$

76,615

 

$

87,504

 

Preference Interests

 

$

20,211

 

$

20,211

 

$

18,263

 

Junior Preference Units

 

$

325

 

$

325

 

$

352

 

Premium on redemption of preference units

 

$

20,237

 

$

 

$

5,324

 

General Partner

 

$

426,639

 

$

324,162

 

$

362,580

 

Limited Partners

 

34,658

 

26,862

 

32,391

 

Net income available to OP Units

 

$

461,297

 

$

351,024

 

$

394,971

 

Earnings per OP Unit – basic

 

 

 

 

 

 

 

Income from continuing operations available to OP Units

 

$

0.44

 

$

0.60

 

$

0.77

 

Net income available to OP Units

 

$

1.57

 

$

1.19

 

$

1.36

 

Weighted average OP Units outstanding

 

294,523

 

294,637

 

291,362

 

Earnings per OP Unit – diluted

 

 

 

 

 

 

 

Income from continuing operations available to OP Units

 

$

0.43

 

$

0.59

 

$

0.76

 

Net income available to OP Units

 

$

1.55

 

$

1.18

 

$

1.34

 

Weighted average OP Units outstanding

 

297,041

 

297,969

 

295,213

 

 

 

 

 

 

 

 

 

Distributions declared per OP Unit outstanding

 

$

1.73

 

$

1.73

 

$

1.68

 

 

See accompanying notes

 

F-4



 

ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)
(Amounts in thousands except per OP Unit data)

 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

 

 

 

 

 

 

 

 

Comprehensive income:

 

 

 

 

 

 

 

Net income

 

$

578,505

 

$

448,175

 

$

506,414

 

Other comprehensive income (loss) – derivative and other instruments:

 

 

 

 

 

 

 

Cumulative effect of change in accounting principle

 

 

 

(5,334

)

Unrealized holding gains (losses) arising during the year

 

11,467

 

(10,905

)

(17,909

)

Equity in unrealized holding gains (losses) arising during the year – unconsolidated entities

 

7,268

 

(689

)

(10,366

)

Losses reclassified into earnings from other comprehensive income

 

1,653

 

845

 

569

 

Comprehensive income

 

$

598,893

 

$

437,426

 

$

473,374

 

 

See accompanying notes

 

F-5



 

ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)

 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net income

 

$

578,505

 

$

448,175

 

$

506,414

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

Allocation to Minority Interests – Partially Owned Properties

 

(271

)

1,867

 

2,249

 

Cumulative effect of change in accounting principle

 

 

 

1,270

 

Depreciation

 

471,569

 

472,956

 

467,942

 

Amortization of deferred financing costs

 

6,702

 

5,754

 

5,189

 

Amortization of discount on investment in mortgage notes

 

 

 

(2,256

)

Amortization of goodwill

 

 

 

3,779

 

Amortization of discounts and premiums on debt

 

(991

)

(822

)

(1,841

)

Amortization of deferred settlements on derivative instruments

 

710

 

(306

)

591

 

Impairment on corporate housing business

 

 

17,122

 

 

Impairment on furniture rental business

 

 

 

60,000

 

Impairment on technology investments

 

1,162

 

1,162

 

11,766

 

Loss (income) from investments in unconsolidated entities

 

10,118

 

3,698

 

(3,772

)

Net (gain) on sales of discontinued operations

 

(310,706

)

(104,296

)

(148,906

)

Net (gain) on sales of unconsolidated entities

 

(4,942

)

(5,054

)

(387

)

Loss on debt extinguishments

 

2,095

 

792

 

208

 

Unrealized (gain) loss on derivative instruments

 

(118

)

328

 

(223

)

Book value of furniture sales and rental buyouts

 

 

 

11,411

 

Compensation paid with Company Common Shares

 

14,883

 

25,796

 

18,164

 

 

 

 

 

 

 

 

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

Decrease (increase) in rents receivable

 

2,234

 

(570

)

(399

)

Decrease (increase) in deposits – restricted

 

4,406

 

9,896

 

(10,468

)

Additions to rental furniture

 

 

 

(18,611

)

(Increase) decrease in other assets

 

(18,940

)

14,531

 

(17,694

)

(Decrease) in accounts payable and accrued expenses

 

(4,682

)

(3,392

)

(633

)

(Decrease) increase in accrued interest payable

 

(2,851

)

406

 

10,293

 

Increase (decrease) in rents received in advance and other liabilities

 

345

 

3,046

 

(4,315

)

(Decrease) in security deposits

 

(1,247

)

(2,151

)

(103

)

Net cash provided by operating activities

 

747,981

 

888,938

 

889,668

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Investment in real estate – acquisitions

 

(595,077

)

(258,269

)

(297,794

)

Investment in real estate – development/other

 

(8,386

)

(109,077

)

(96,245

)

Improvements to real estate

 

(181,948

)

(156,776

)

(150,927

)

Additions to non-real estate property

 

(2,928

)

(7,301

)

(6,920

)

Interest capitalized for real estate under development

 

 

(10,006

)

(8,309

)

Interest capitalized for unconsolidated entities under development

 

(20,647

)

(17,161

)

(19,865

)

Proceeds from disposition of real estate, net

 

1,130,925

 

478,675

 

566,068

 

Proceeds from disposition of furniture rental business

 

 

28,741

 

 

Proceeds from disposition of unconsolidated entities

 

14,136

 

49,862

 

655

 

Proceeds from refinancing of unconsolidated entities

 

6,708

 

4,375

 

24,404

 

Investments in unconsolidated entities

 

(14,038

)

(105,758

)

(142,565

)

Distributions from unconsolidated entities

 

20,515

 

41,656

 

35,668

 

(Increase) decrease in deposits on real estate acquisitions, net

 

(22,656

)

24,845

 

52,340

 

Decrease (increase) in mortgage deposits

 

11,298

 

27,425

 

(1,626

)

Business combinations, net of cash acquired

 

(515

)

(677

)

(8,785

)

 

See accompanying notes

 

F-6



 

ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)

 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

CASH FLOWS FROM INVESTING ACTIVITIES (continued):

 

 

 

 

 

 

 

Consolidation of previously Unconsolidated Properties

 

$

6,879

 

$

(40,113

)

$

52,841

 

Acquisition of Minority Interests – Partially Owned Properties

 

(125

)

 

 

Investment in property and equipment

 

 

 

(2,461

)

Principal receipts on investment in mortgage notes

 

 

 

61,419

 

Other investing activities, net

 

(13,775

)

262

 

(469

)

Net cash provided by (used for) investing activities

 

330,366

 

(49,297

)

57,429

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Loan and bond acquisition costs

 

(6,127

)

(11,233

)

(4,483

)

Mortgage notes payable:

 

 

 

 

 

 

 

Proceeds

 

111,150

 

126,144

 

91,583

 

Lump sum payoffs

 

(401,951

)

(374,983

)

(364,229

)

Scheduled principal repayments

 

(30,919

)

(32,731

)

(32,671

)

Prepayment premiums/fees

 

(2,187

)

(792

)

(208

)

Notes, net:

 

 

 

 

 

 

 

Proceeds

 

398,816

 

447,064

 

299,316

 

Lump sum payoffs

 

(190,000

)

(265,000

)

(150,000

)

Scheduled principal repayments

 

(4,480

)

(4,669

)

(4,774

)

Line of credit:

 

 

 

 

 

 

 

Proceeds

 

182,000

 

776,500

 

738,491

 

Repayments

 

(312,000

)

(831,500

)

(898,953

)

(Payments on) proceeds from settlement of derivative instruments

 

(12,999

)

5,757

 

(7,369

)

Proceeds from sale of OP Units

 

6,324

 

9,411

 

8,991

 

Proceeds from sale of Preference Units

 

150,000

 

 

 

Proceeds from sale of Preference Interests

 

 

 

60,000

 

Proceeds from exercise of EQR options

 

68,400

 

29,578

 

65,411

 

Payment of offering costs

 

(5,304

)

(207

)

(2,223

)

OP Units repurchased and retired

 

 

(115,004

)

 

Redemption of Preference Units

 

(386,989

)

 

(210,500

)

Premium on redemption of preference units

 

(8,345

)

 

 

Distributions:

 

 

 

 

 

 

 

OP Units – General Partner

 

(472,211

)

(473,996

)

(335,534

)

Preference Units

 

(79,341

)

(76,973

)

(91,751

)

Preference Interests

 

(20,211

)

(20,238

)

(18,172

)

Junior Preference Units

 

(324

)

(325

)

(271

)

OP Units – Limited Partners

 

(38,472

)

(39,607

)

(30,067

)

Minority Interests – Partially Owned Properties

 

(3,473

)

(12,608

)

(32,156

)

Principal receipts on employee notes, net

 

 

4,043

 

303

 

Net cash (used for) financing activities

 

(1,058,643

)

(861,369

)

(919,266

)

 

 

 

 

 

 

 

 

Net increase (decrease) in cash and cash equivalents

 

19,704

 

(21,728

)

27,831

 

Cash and cash equivalents, beginning of year

 

29,875

 

51,603

 

23,772

 

Cash and cash equivalents, end of year

 

$

49,579

 

$

29,875

 

$

51,603

 

 

See accompanying notes

 

F-7



 

ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)

 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

SUPPLEMENTAL INFORMATION:

 

 

 

 

 

 

 

Cash paid during the year for interest

 

$

352,391

 

$

365,782

 

$

380,745

 

 

 

 

 

 

 

 

 

Transfers to real estate held for disposition

 

$

 

$

 

$

3,371

 

 

 

 

 

 

 

 

 

Real estate acquisitions/dispositions:

 

 

 

 

 

 

 

Mortgage loans assumed

 

$

89,446

 

$

32,355

 

$

91,623

 

 

 

 

 

 

 

 

 

Valuation of OP Units issued

 

$

105

 

$

 

$

 

 

 

 

 

 

 

 

 

Mortgage loans (assumed) by purchaser

 

$

(53,250

)

$

(9,924

)

$

(30,396

)

 

 

 

 

 

 

 

 

Consolidation of previously Unconsolidated Properties:

 

 

 

 

 

 

 

Mortgage loans assumed

 

$

51,625

 

$

18,100

 

$

301,502

 

 

 

 

 

 

 

 

 

Valuation of OP Units issued

 

$

4,231

 

$

 

$

 

 

 

 

 

 

 

 

 

Minority Interests – Partially Owned Properties

 

$

42

 

$

 

$

31,100

 

 

 

 

 

 

 

 

 

Investments in unconsolidated entities

 

$

34,942

 

$

(312

)

$

18,021

 

 

 

 

 

 

 

 

 

Net (assets) liabilities recorded

 

$

27,152

 

$

44,209

 

$

(38,860

)

 

 

 

 

 

 

 

 

Deconsolidation of previously Wholly Owned Properties:

 

 

 

 

 

 

 

Mortgage loans contributed

 

$

 

$

(118,376

)

$

 

 

See accompanying notes

 

F-8



 

ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL
(Amounts in thousands)

 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

PREFERENCE UNITS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

946,157

 

$

966,671

 

$

1,183,136

 

Redemption of 9 3/8% Series A Cumulative Redeemable

 

 

 

(153,000

)

Conversion of 7.00% Series E Cumulative Convertible

 

(8,891

)

(20,442

)

(5,845

)

Redemption of 9.65% Series F Cumulative Redeemable

 

 

 

(57,500

)

Conversion of 7.25% Series G Convertible Cumulative

 

(29,184

)

(2

)

 

Redemption of 7.25% Series G Convertible Cumulative

 

(286,989

)

 

 

Conversion of 7.00% Series H Cumulative Convertible

 

(180

)

(70

)

(120

)

Redemption of 7.625% Series L Cumulative Redeemable

 

(100,000

)

 

 

Issuance of 6.48% Series N Cumulative Redeemable

 

150,000

 

 

 

Balance, end of year

 

$

670,913

 

$

946,157

 

$

966,671

 

 

 

 

 

 

 

 

 

PREFERENCE INTERESTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

246,000

 

$

246,000

 

$

186,000

 

Issuance of Series G – I

 

 

 

60,000

 

Balance, end of year

 

$

246,000

 

$

246,000

 

$

246,000

 

 

 

 

 

 

 

 

 

JUNIOR PREFERENCE UNITS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

5,846

 

$

5,846

 

$

7,896

 

Conversion of Series A

 

(3,629

)

 

(2,050

)

Balance, end of year

 

$

2,217

 

$

5,846

 

$

5,846

 

 

 

 

 

 

 

 

 

GENERAL PARTNER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

4,306,873

 

$

4,506,097

 

$

4,451,326

 

Issuance of OP Units through conversion of Preference Units into OP Units held by General Partner

 

38,255

 

20,514

 

5,965

 

Conversion of OP Units held by Limited Partners to OP Units held by General Partner

 

10,903

 

14,768

 

29,321

 

Issuance of OP Units through exercise of EQR share options

 

68,400

 

29,578

 

65,411

 

Issuance of OP Units through Employee Share Purchase Plan

 

6,324

 

7,377

 

6,931

 

Issuance of OP Units through Share Purchase – DRIP Plan

 

 

861

 

910

 

Issuance of OP Units through Dividend Reinvestment – DRIP Plan

 

 

1,173

 

1,150

 

Stock-based employee compensation expense:

 

 

 

 

 

 

 

EQR restricted/performance shares

 

2,497

 

12,136

 

29,027

 

EQR share options

 

2,626

 

 

 

EQR ESPP discount

 

1,196

 

 

 

OP Units repurchased and retired

 

 

(115,004

)

 

Offering costs

 

(5,304

)

(207

)

(2,223

)

Principal receipts on employee notes

 

 

4,043

 

303

 

Net income available to OP Units – General Partner

 

426,639

 

324,162

 

362,580

 

Premium on redemption of preference units – original issuance costs

 

11,892

 

 

5,324

 

OP Unit – General Partner distributions

 

(474,702

)

(473,898

)

(452,435

)

Other

 

(24,661

)

(29,017

)

(374

)

Adjustment for Limited Partners ownership in Operating Partnership

 

545

 

4,290

 

2,881

 

Balance, end of year

 

$

4,371,483

 

$

4,306,873

 

$

4,506,097

 

 

See accompanying notes

 

F-9



 

ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL (Continued)
(Amounts in thousands)

 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

LIMITED PARTNERS

 

 

 

 

 

 

 

Balance, beginning of year

 

$

349,646

 

$

379,898

 

$

415,838

 

Issuance of OP Units in connection with mergers and acquisitions

 

4,562

 

1,046

 

2,030

 

Conversion of OP Units held by Limited Partners to OP Units held by General Partner

 

(10,903

)

(14,768

)

(29,321

)

Issuance of OP Units through conversion of Junior Preference Units into OP Units held by Limited Partners

 

3,629

 

 

2,050

 

Net income available to OP Units – Limited Partners

 

34,658

 

26,862

 

32,391

 

OP Unit – Limited Partners distributions

 

(38,238

)

(39,102

)

(40,209

)

Adjustment for Limited Partners ownership in Operating Partnership

 

(545

)

(4,290

)

(2,881

)

Balance, end of year

 

$

342,809

 

$

349,646

 

$

379,898

 

 

 

 

 

 

 

 

 

DEFERRED COMPENSATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

(12,118

)

$

(25,778

)

$

(14,915

)

EQR restricted/performance shares granted, net of cancellations

 

 

(12,136

)

(29,027

)

Amortization to compensation expense – EQR restricted/performance shares

 

8,564

 

25,796

 

18,164

 

Balance, end of year

 

$

(3,554

)

$

(12,118

)

$

(25,778

)

 

 

 

 

 

 

 

 

ACCUMULATED OTHER COMPREHENSIVE LOSS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

(43,789

)

$

(33,040

)

$

 

Accumulated other comprehensive loss – derivative and other instruments:

 

 

 

 

 

 

 

Cumulative effect of change in accounting principle

 

 

 

(5,334

)

Unrealized holding gains (losses) arising during the year

 

11,467

 

(10,905

)

(17,909

)

Equity in unrealized holding gains (losses) arising during the year – unconsolidated entities

 

7,268

 

(689

)

(10,366

)

Losses reclassified into earnings from other comprehensive income

 

1,653

 

845

 

569

 

Balance, end of year

 

$

(23,401

)

$

(43,789

)

$

(33,040

)

 

See accompanying notes

 

F-10



 

ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1.                                      Business

 

ERP Operating Limited Partnership (“ERPOP”), an Illinois limited partnership, was formed in May 1993 to conduct the multifamily residential property business of Equity Residential (“EQR”).  EQR is a Maryland real estate investment trust (“REIT”) formed in March 1993 and is a fully integrated real estate company engaged in the acquisition, development, ownership, management and operation of multifamily properties.

 

EQR is the general partner of, and as of December 31, 2003 owned an approximate 92.7% ownership interest in ERPOP.  ERPOP is, directly or indirectly, a partner, member or shareholder of numerous partnerships, limited liability companies and corporations which have been established primarily to own fee simple title to multifamily properties or to conduct property management activities and other businesses related to the ownership and operation of multifamily residential real estate.  As used herein, the term “Operating Partnership” includes ERPOP and those entities owned or controlled by it.  As used herein, the term “Company” means EQR and the Operating Partnership.

 

As of December 31, 2003, the Operating Partnership owned or had investments in 968 properties in 34 states consisting of 207,506 units.  The ownership breakdown includes:

 

 

 

Properties

 

Units

 

Wholly Owned Properties

 

849

 

178,150

 

Partially Owned Properties (Consolidated)

 

35

 

6,778

 

Unconsolidated Properties

 

84

 

22,578

 

 

 

968

 

207,506

 

 

The “Wholly Owned Properties” are accounted for under the consolidation method of accounting.  The Operating Partnership beneficially owns 100% fee simple title to 842 of the 849 Wholly Owned Properties.  The Operating Partnership owns the building and improvements and leases the land underlying the improvements under a long-term ground lease that expires in 2026 for one property.  This one property is consolidated and reflected as a real estate asset while the ground lease is accounted for as an operating lease in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 13, Accounting for Leases.  The Operating Partnership owns the debt collateralized by two properties and owns an interest in the debt collateralized by the remaining four properties.  The Operating Partnership consolidates its interest in these six properties in accordance with the accounting standards outlined in the AcSEC guidance for real estate acquisition, development and construction arrangements issued in the CPA letter dated February 10, 1986, and as such, reflects these assets as real estate in the consolidated financial statements.

 

The “Partially Owned Properties” are controlled by the Operating Partnership but have partners with minority interests and are accounted for under the consolidation method of accounting.  The “Unconsolidated Properties” are partially owned but not controlled by the Operating Partnership.  With the exception of one property, the Unconsolidated Properties consist of investments in partnership interests and/or subordinated mortgages that are accounted for under the equity method of accounting.  The remaining one property consists of an investment in a limited liability company that, as a result of the terms of the operating agreement, is accounted for as a management contract right with all fees recognized as fee and asset management revenue.  The above table does not include various uncompleted development properties summarized in Note 9.

 

F-11



 

2.                                      Summary of Significant Accounting Policies

 

Basis of Presentation

 

Due to the Operating Partnership’s ability as general partner to control either through ownership or by contract its subsidiaries, other than entities that own controlling interests in the Unconsolidated Properties and certain other entities in which the Operating Partnership has investments, each such subsidiary has been consolidated with the Operating Partnership for financial reporting purposes.  In July 2001, the Operating Partnership acquired 100% of a management company entity, which had a controlling ownership interest in a portfolio of 21 previously Unconsolidated Properties.  Subsequent to this transaction, the Operating Partnership consolidated these 21 properties.  In September 2001, the Operating Partnership acquired the remaining 5% of the preferred stock it did not own and 100% of the voting common stock in two other management company entities.  As a result, the Operating Partnership now wholly-owns these two entities.  The Operating Partnership consolidated the results of these two entities prior to this transaction despite not having legal control, the effects of which were immaterial.

 

Minority interests represented by EQR’s indirect 1% interest in various entities are immaterial and have not been accounted for in the Consolidated Financial Statements.  In addition, certain amounts due from EQR for its 1% interest in various entities have not been reflected in the Consolidated Balance Sheets since such amounts are immaterial.

 

The Company’s mergers and acquisitions were accounted for as purchases in accordance with either Accounting Principles Board  (“APB”) Opinion No. 16, Business Combinations, or SFAS No. 141, Business Combinations.  SFAS No. 141 requires all business combinations initiated after June 30, 2001 be accounted for under the purchase method of accounting. The fair value of the consideration given by the Company in the mergers was used as the valuation basis for each of the combinations.  The accompanying consolidated statements of operations and cash flows include the results of the properties purchased through the mergers and through acquisitions from their respective closing dates.

 

Real Estate Assets and Depreciation of Investment in Real Estate

 

The Operating Partnership allocates the purchase price of properties to net tangible and identified intangible assets acquired based on their fair values in accordance with the provisions of SFAS No. 141.  In making estimates of fair values for purposes of allocating purchase price, the Operating Partnership utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, our own analysis of recently acquired and existing comparable properties in our portfolio, and other market data.  The Operating Partnership also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired.  The Operating Partnership allocates the purchase price of acquired real estate to various components as follows:

 

                  Land – Based on actual purchase price if acquired separately or market research/comparables if acquired with an operating property.

                  Furniture, Fixtures and Equipment – Ranges between $1,500 and $3,000 per apartment unit acquired as an estimate of the fair value of the appliances & fixtures inside a unit.  The per-unit amount applied depends on the type of apartment building acquired.  Depreciation is calculated on the straight-line method over an estimated useful life of five years.

                  In-Place Leases – The Operating Partnership considers the value of acquired in-place leases that meet the definition outlined in SFAS No. 141, paragraph 37.  The amortization period is the remaining term of each respective in-place acquired lease.  Should a resident terminate its lease, the unamortized portion of the deferred in-place lease would be fully expensed.

                  Other Intangible Assets – The Operating Partnership considers whether it has acquired other intangible assets that meet the definition outlined in SFAS No. 141, paragraph 39, including

 

F-12



 

any customer relationship intangibles.  The amortization period is the estimated useful life of the acquired intangible asset.

                  Building – Based on the fair value determined on an “as-if vacant” basis.  Depreciation is calculated on the straight-line method over an estimated useful life of thirty years.

 

Replacements inside a unit such as appliances and carpeting, are depreciated over a five-year estimated useful life.  Expenditures for ordinary maintenance and repairs are expensed to operations as incurred and significant renovations and improvements that improve and/or extend the useful life of the asset are capitalized over their estimated useful life, generally five to ten years.  Initial direct leasing costs are expensed as incurred as such expense approximates the deferral and amortization of initial direct leasing costs over the lease terms.  Property sales or dispositions are recorded when title transfers and sufficient consideration has been received by the Operating Partnership.  Upon disposition, the related costs and accumulated depreciation are removed from the respective accounts.  Any gain or loss on sale is recognized in accordance with accounting principles generally accepted in the United States.

 

The Operating Partnership classifies real estate assets as real estate held for disposition when it is certain a property will be disposed of in accordance with SFAS No. 144 (see further discussion below).

 

The Operating Partnership classifies properties under development and/or expansion and properties in the lease up phase as construction in progress until construction has been completed and all certificates of occupancy permits have been obtained.  The Operating Partnership also classifies land relating to construction in progress as land on its balance sheets.

 

Impairment of Long-Lived Assets, Including Goodwill

 

In June 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible Assets.  SFAS No. 142 prohibits the amortization of goodwill and requires that goodwill be reviewed for impairment at least annually.  In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.  SFAS Nos. 142 and 144 were effective for fiscal years beginning after December 15, 2001.  The Operating Partnership adopted these standards effective January 1, 2002.   See Notes 16 and 22 for further discussion.

 

The Operating Partnership periodically evaluates its long-lived assets, including its investments in real estate and goodwill, for indicators of permanent impairment.  The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions, expected holding period of each asset and legal and environmental concerns.  Future events could occur which would cause the Operating Partnership to conclude that impairment indicators exist and an impairment loss is warranted.

 

For long-lived assets to be held and used, the Operating Partnership compares the expected future undiscounted cash flows for the long-lived asset against the carrying amount of that asset.  If the sum of the estimated undiscounted cash flows is less than the carrying amount of the asset, an impairment loss would be recorded for the difference between the estimated fair value and the carrying amount of the asset.

 

For long-lived assets to be disposed of, an impairment loss is recognized when the estimated fair value of the asset, less the estimated cost to sell, is less than the carrying amount of the asset measured at the time that the Operating Partnership has determined it will sell the asset.  Long-lived assets held for disposition and the related liabilities are separately reported at the lower of their carrying amounts or their estimated fair values, less their costs to sell, and are not depreciated after reclassification to real estate held for disposition.

 

Prior to January 1, 2002, the Operating Partnership followed the guidance in SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of.

 

F-13



 

Prior to 2002, the Operating Partnership amortized goodwill on a straight-line basis over a period of 20 years.  The accumulated amortization of goodwill was $5.5 million at December 31, 2001.  Subsequent to January 1, 2002, goodwill is not amortized but is subject to annual impairment tests.

 

Cost Capitalization

 

See the Real Estate Assets and Depreciation of Investment in Real Estate section for discussion of the policy with respect to capitalization vs. expensing of fixed asset/repair and maintenance costs.  In addition, the Operating Partnership capitalizes the payroll and associated costs of employees directly responsible for and who spend all of their time on the supervision of major capital projects.  These costs are reflected on the balance sheet as an increase to depreciable property.

 

The Operating Partnership follows the guidance in SFAS No. 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects, for all development projects and uses its professional judgment in determining whether such costs meet the criteria for capitalization or must be expensed as incurred.  The Operating Partnership capitalizes interest, real estate taxes and insurance and payroll and associated costs for those individuals directly responsible for and who spend all of their time on development activities.  The Operating Partnership expenses as incurred all payroll costs of employees working directly at our properties, except for costs that are incurred during the initial lease-up phase on a development project.  An allocated portion of payroll costs is capitalized based upon the occupancy of the project until stabilized occupancy is achieved.  The incremental payroll and associated costs are capitalized to the projects under development based upon the effort directly identifiable with such projects.  These costs are reflected on the balance sheet as either construction in progress or a separate component of investments in unconsolidated entities.  The Operating Partnership ceases the capitalization of such costs as the property becomes substantially complete and ready for its intended use.

 

Cash and Cash Equivalents

 

The Operating Partnership considers all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements purchased with a maturity of three months or less, at the date of purchase, to be cash equivalents.  The Operating Partnership maintains its cash and cash equivalents at financial institutions.  The combined account balances at one or more institutions periodically exceed the Federal Depository Insurance Corporation (“FDIC”) insurance coverage, and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage.  The Operating Partnership believes that the risk is not significant, as the Operating Partnership does not anticipate the financial institutions’ non-performance.

 

Deferred Financing Costs

 

Deferred financing costs include fees and costs incurred to obtain the Operating Partnership’s line of credit, long-term financings and costs for certain interest rate protection agreements.  These costs are amortized over the terms of the related debt.  Unamortized financing costs are written-off when debt is retired before the maturity date.  The accumulated amortization of such deferred financing costs was $16.0 million and $15.2 million at December 31, 2003 and 2002, respectively.

 

Fair Value of Financial Instruments, Including Derivative Instruments

 

The valuation of financial instruments under SFAS No. 107, Disclosures about Fair Value of Financial Instruments, and SFAS No. 133 and its amendments (SFAS Nos. 137/138/149), Accounting for Derivative Instruments and Hedging Activities, requires the Operating Partnership to make estimates and judgments that affect the fair value of the instruments.  The Operating Partnership, where possible, bases the fair values of its financial instruments, including its derivative instruments, on listed market prices

 

F-14



 

and third party quotes. Where these are not available, the Operating Partnership bases its estimates on other factors relevant to the financial instruments.

 

In the normal course of business, the Operating Partnership is exposed to the effect of interest rate changes.  The Operating Partnership limits these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments.

 

The Operating Partnership has a policy of only entering into contracts with major financial institutions based upon their credit ratings and other factors.  When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, the Operating Partnership has not sustained a material loss from those instruments nor does it anticipate any material adverse effect on its net income or financial position in the future from the use of derivatives.

 

On January 1, 2001, the Operating Partnership adopted SFAS No. 133 and its amendments (SFAS Nos. 137/138/149), which requires an entity to recognize all derivatives as either assets or liabilities in the statement of financial position and to measure those instruments at fair value.  Additionally, the fair value adjustments will affect either partners’ capital or net income depending on whether the derivative instruments qualify as a hedge for accounting purposes and, if so, the nature of the hedging activity.  When the terms of an underlying transaction are modified, or when the underlying transaction is terminated or completed, all changes in the fair value of the instrument are marked-to-market with changes in value included in net income each period until the instrument matures.  Any derivative instrument used for risk management that does not meet the hedging criteria of SFAS No. 133 is marked-to-market each period.  The Operating Partnership does not use derivatives for trading or speculative purposes.

 

As of January 1, 2001, the adoption of the new standard resulted in derivative instruments reported on the balance sheet as liabilities of approximately $6.6 million; an adjustment of approximately $5.3 million to accumulated other comprehensive loss, which are gains and losses not affecting retained earnings in the consolidated statements of partners’ capital; and a charge of approximately $1.3 million as a cumulative effect of change in accounting principle in the consolidated statements of operations.

 

The fair values of the Operating Partnership’s financial instruments, other than derivative instruments, including cash and cash equivalents, mortgage notes payable, other notes payable, line of credit and other financial instruments, approximate their carrying or contract values.

 

Revenue Recognition

 

Rental income attributable to leases is recorded when due from residents and is recognized monthly as it is earned, which is not materially different than on a straight-line basis.  Interest income is recorded on an accrual basis.  Leases entered into between a resident and a property, for the rental of an apartment unit, are generally year-to-year, renewable upon consent of both parties on an annual or monthly basis.

 

Stock-Based Compensation

 

Prior to 2003, the Company had chosen to account for its stock-based compensation in accordance with APB No. 25, Accounting for Stock Issued to Employees, which resulted in no compensation expense for options issued with an exercise price equal to or exceeding the market value of EQR’s Common Shares on the date of grant (intrinsic method).  The Company has elected to account for its stock-based compensation in accordance with SFAS No. 123 and its amendment (SFAS No. 148), Accounting for Stock Based Compensation, effective in the first quarter of 2003, which resulted in compensation expense being recorded based on the fair value of the stock compensation granted.  Any Common Shares issued pursuant to EQR’s incentive equity compensation and employee share purchase plans will result in the Operating Partnership issuing OP Units to EQR on a one-for-one basis, with the Operating Partnership receiving the net cash proceeds of such issuances.

 

F-15



 

SFAS No. 148 provides three transition methods for entities that adopt the fair value recognition provisions of SFAS No. 123.  The Company has chosen to use the “Prospective Method”.  This method requires that companies apply the recognition provisions of SFAS No. 123 to only employee awards granted or modified after the beginning of the fiscal year in which the recognition provisions are first applied, or January 1, 2003.  Compensation expense under all of the Company’s plans is generally recognized over periods ranging from three months to five years.  Therefore, the cost related to stock-based employee compensation included in the determination of net income for the year ended December 31, 2003 is less than that which would have been recognized if the fair value based method had been applied to all awards since the original effective date of SFAS No. 123.

 

The following table illustrates the effect on net income and earnings per OP Unit if the fair value based method had been applied to all outstanding and unvested awards in each period presented:

 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

 

 

(Amounts in thousands except per OP Unit amounts)

 

 

 

 

 

 

 

 

 

Net income available to OP Units – as reported

 

$

461,297

 

$

351,024

 

$

394,971

 

Add: Stock-based employee compensation expense included in reported net income:

 

 

 

 

 

 

 

EQR’s restricted/performance shares

 

11,043

 

25,839

 

18,271

 

EQR’s share options (1)

 

2,626

 

 

 

EQR’s ESPP discount

 

1,196

 

 

 

Deduct: Stock-based employee compensation expense determined under fair value based method for all awards:

 

 

 

 

 

 

 

EQR’s restricted/performance shares

 

(11,043

)

(25,839

)

(18,271

)

EQR’s share options (1)

 

(6,784

)

(6,249

)

(5,426

)

EQR’s ESPP discount

 

(1,196

)

(1,379

)

(1,302

)

Net income available to OP Units – pro forma

 

$

457,139

 

$

343,396

 

$

388,243

 

Earnings per OP Unit:

 

 

 

 

 

 

 

Basic – as reported

 

$

1.57

 

$

1.19

 

$

1.36

 

Basic – pro forma

 

$

1.55

 

$

1.16

 

$

1.33

 

 

 

 

 

 

 

 

 

Diluted – as reported

 

$

1.55

 

$

1.18

 

$

1.34

 

Diluted – pro forma

 

$

1.54

 

$

1.15

 

$

1.32

 

 


(1)       Share options for the year ended December 31, 2003 included $1.4 million of expense recognition related to options granted in the first quarter of 2003 to EQR’s former chief executive officer.  These options vested immediately upon grant.

 

The fair value of the option grants as computed under SFAS No. 123 would be recognized over the vesting period of the options.  The fair value for the Company’s share options was estimated at the time the share options were granted using the Black Scholes option pricing model with the following weighted-average assumptions:

 

F-16



 

 

 

 

2003

 

2002

 

2001

 

Risk-free interest rate

 

3.02

%

4.55

%

4.43

%

Expected dividend yield

 

6.46

%

6.46

%

6.17

%

Volatility

 

20.8

%

20.8

%

20.4

%

Expected life of the options

 

5 years

 

7 years

 

7 years

 

Fair value of options granted

 

$

1.90

 

$

2.69

 

$

2.76

 

 

 The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable.  In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s share options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its share options.

 

Income Taxes

 

The Operating Partnership generally is not liable for Federal income taxes as the partners recognize their proportionate share of the Operating Partnership’s income or loss in their tax returns; therefore generally no provision for Federal income taxes is made in the financial statements of the Operating Partnership.  However, the Operating Partnership is subject to certain state and local income, excise and franchise taxes.  The aggregate cost of land and depreciable property for federal income tax purposes as of December 31, 2003 and 2002 was approximately $8.5 billion and $8.7 billion, respectively.

 

Effective in 2001, the Operating Partnership has elected Taxable REIT Subsidiary (“TRS”) status for certain of its corporate subsidiaries.  The provisions for federal income taxes for these TRS entities were not material during 2003, 2002 or 2001 and were recognized as general and administrative expenses in the consolidated statements of operations.

 

During the years ended December 31, 2003, 2002 and 2001, the Operating Partnership’s tax treatment of distributions were as follows:

 

 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

Tax treatment of distributions:

 

 

 

 

 

 

 

Ordinary income

 

$

0.799

 

$

1.398

 

$

1.369

 

Qualified dividends

 

0.009

 

 

 

Pre-May 6, 2003 long-term capital gain

 

0.150

 

0.212

 

0.220

 

Post-May 5, 2003 long term capital gain

 

0.315

 

 

 

Unrecaptured section 1250 gain

 

0.251

 

0.120

 

0.091

 

Return of capital

 

0.206

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per OP Unit outstanding

 

$

1.730

 

$

1.730

 

$

1.680

 

 

Partners’ Capital

 

The “Limited Partners” of ERPOP include various individuals and entities that contributed their properties to ERPOP in exchange for units of limited partnership interest in ERPOP (“OP Units”).  The “General Partner” of ERPOP is EQR.  Net income is allocated to the Limited Partners based on their

 

F-17



 

respective ownership percentage of the Operating Partnership.  The ownership percentage is calculated by dividing the number of OP Units held by the Limited Partners by the total OP Units held by the Limited Partners and the General Partner.  Issuance of additional EQR common shares of beneficial interest, $0.01 par value per share (the “Common Shares”), and OP Units changes the ownership interests of both the Limited Partners and EQR.  Such transactions and the proceeds therefrom are treated as capital transactions.

 

Minority Interests

 

The Operating Partnership reflects minority interests in partially owned properties on the balance sheet for the portion of properties consolidated by the Operating Partnership that are not wholly owned by the Operating Partnership.  The earnings or losses from those properties attributable to the minority interests are reflected as minority interests in partially owned properties in the consolidated statements of operations.

 

Use of Estimates

 

In preparation of the Operating Partnership’s financial statements in conformity with accounting principles generally accepted in the United States, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

 

Reclassifications

 

Certain reclassifications considered necessary for a fair presentation have been made to the prior period financial statements in order to conform to the current year presentation.  These reclassifications have not changed the results of operations or partners’ capital.

 

Other

 

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections.  SFAS No. 145, among other items, rescinds the automatic classification of costs incurred on debt extinguishment as extraordinary charges.  Instead, gains and losses from debt extinguishment should only be classified as extraordinary if they meet the “unusual and infrequently occurring” criteria outlined in APB No. 30.  SFAS No. 145 is effective for fiscal years beginning after May 15, 2002.  The Operating Partnership adopted the standard effective January 1, 2003.  Prior period gains/losses have been reclassified to a component of interest expense.

 

In January 2003, the FASB issued Interpretation (“FIN”) No. 46, Consolidation of Variable Interest Entities.  FIN No. 46 requires a variable interest entity to be consolidated if a company is subject to a majority of the risk of loss from the variable interest entity’s activities or entitled to receive a majority of the entity’s residual returns or both.  The Operating Partnership will adopt FIN No. 46 as required effective March 31, 2004.  FASB Staff Position (“FSP”) No. FIN 46-6 deferred the effective date for applying the provisions of FIN No. 46 (for entities created before February 1, 2003) from July 1, 2003 to December 31, 2003.  FIN No. 46-R released in December 2003 further deferred the effective date for the Operating Partnership’s variable interest entities to March 31, 2004.  The Operating Partnership has preliminarily determined that its unconsolidated stabilized development projects and projects under development (see Note 9) are variable interest entities in which the Operating Partnership is the primary beneficiary as of the date of the original formation of the respective joint ventures.  On such respective formation dates, the fair value of the assets, liabilities and non-controlling interests of these development projects approximates carryover basis.  If these development projects had been consolidated as of December 31, 2003, the Operating Partnership’s investment in real estate and mortgage notes payable would have increased by $1.3 billion and $877.7 million, respectively, and investments in unconsolidated entities would have decreased by $465.4 million.  The Operating Partnership does not anticipate that the

 

F-18



 

adoption of FIN No. 46 will have any material effect on net income.

 

In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.  SFAS No. 150 establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity.  On November 7, 2003, the FASB issued FSP No. FAS 150-3, which deferred for an indefinite period the classification and measurement provisions, but not the disclosure provisions (see discussion below), of SFAS No. 150 as it relates to noncontrolling interests that are classified as equity in the financial statements of a subsidiary but would be classified as a liability in the parent’s financial statements under SFAS No. 150 (e.g., minority interests in consolidated limited-life subsidiaries).  The Operating Partnership has determined that it does not have any mandatorily redeemable preferred shares/units that fall within the scope of SFAS No. 150.

 

With regards to the aforementioned disclosure provisions, the Operating Partnership is presently the controlling partner in various consolidated partnerships consisting of 35 properties and 6,778 units having a minority interest book value of $9.9 million at December 31, 2003.  These partnerships contain provisions that require the partnerships to be liquidated through the sale of its assets upon reaching a date specified in each respective partnership agreement.  The Operating Partnership, as controlling partner, has an obligation to cause the property owning partnerships to distribute proceeds of liquidation to the Minority Interests in these Partially Owned Properties only to the extent that the net proceeds received by the partnerships from the sale of its assets warrant a distribution based on the partnership agreements.  As of December 31, 2003, the Operating Partnership estimates the value of Minority Interest distributions would have been approximately $104 million (“Settlement Value”) had the partnerships been liquidated.  This Settlement Value is based on estimated third party consideration realized by the partnerships upon disposition of the Partially Owned Properties and is net of all other assets and liabilities including yield maintenance on the mortgages encumbering the properties that would have been due on December 31, 2003 had those mortgages been prepaid.  Due to, among other things, the inherent uncertainty in the sale of real estate assets, the amount of any potential distribution to the Minority Interests in the Operating Partnership’s Partially Owned Properties is subject to change.  To the extent that the partnerships’ underlying assets are worth less than the underlying liabilities, the Operating Partnership has no obligation to remit any consideration to the Minority Interests in Partially Owned Properties.

 

On July 31, 2003, the SEC clarified its position with respect to Emerging Issues Task Force (“EITF”) Topic D-42, The Effect on the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock.  Under the SEC’s revised interpretation, in connection with the redemption of preferred shares/units, the original issuance costs of these shares/units must be treated in a manner similar to preferred distributions and deducted from net income in arriving at net income available to OP Units.  The clarification of EITF Topic D-42 was required to be adopted effective July 1, 2003 on a retroactive basis by restating prior periods included in the current financial statements.  The adoption of the clarification of EITF Topic D-42 resulted in the retroactive write-off of $5.3 million of original issuance costs related to the Operating Partnership’s redemption of its Series A Preference Units in June 2001.  In addition, the Operating Partnership recorded an $8.3 million cash premium and $11.9 million in original issuance costs related to the redemption of its Series G Preference Units in December 2003.  The Operating Partnership had no recorded original issuance costs associated with, nor did it incur any cash redemption premium upon redemption of, its Series F Preference Units redeemed in 2001 or its Series L Preference Units redeemed in 2003.

 

3.                                      Business Combinations

 

During 2001 and prior to the one-year anniversary of the Globe Business Resources, Inc. (“Globe”) acquisition, the Operating Partnership recorded net increases to goodwill of $9.5 million to reallocate the original purchase price recorded at the acquisition date.  Also during 2001, the Operating Partnership recorded a $60.0 million asset impairment charge related to its furniture rental business.  During 2002, the Operating Partnership recorded a $17.1 million asset impairment charge related to

 

F-19



 

Equity Corporate Housing (“ECH”).  See Notes 16 and 22.

 

On January 11, 2002, the Operating Partnership sold the former Globe furniture rental business for approximately $30.0 million in cash, which approximated the net book value at the sale date.   The Operating Partnership has retained ownership of the former Globe short-term furnished housing business, which is now known as ECH.

 

4.                                      Partners’ Capital

 

The following table presents the changes in the Operating Partnership’s issued and outstanding OP Units for the years ended December 31, 2003, 2002 and 2001:

 

 

 

2003

 

2002

 

2001

 

Operating Partnership’s OP Units outstanding at January 1,

 

293,396,124

 

294,818,566

 

290,090,252

 

 

 

 

 

 

 

 

 

Issued to General Partner:

 

 

 

 

 

 

 

Conversion of Series E Preference Units

 

395,723

 

909,873

 

260,078

 

Conversion of Series G Preference Units

 

996,459

 

70

 

 

Conversion of Series H Preference Units

 

10,424

 

4,050

 

6,972

 

Employee Share Purchase Plan

 

289,274

 

324,238

 

310,261

 

Dividend Reinvestment – DRIP Plan

 

 

41,407

 

42,649

 

Share Purchase – DRIP Plan

 

 

31,354

 

33,106

 

Exercise of EQR options

 

3,249,555

 

1,435,115

 

3,187,530

 

Restricted EQR share grants, net

 

900,555

 

885,967

 

730,982

 

OP Units repurchased and retired

 

 

(5,092,300

)

 

OP Units other

 

(217

)

396

 

(313

)

 

 

 

 

 

 

 

 

Issued to Limited Partners:

 

 

 

 

 

 

 

Issuance through acquisitions

 

165,628

 

37,388

 

73,351

 

Conversion of Series A Junior Preference Units

 

148,092

 

 

83,698

 

Operating Partnership’s OP Units outstanding at December 31,

 

299,551,617

 

293,396,124

 

294,818,566

 

 

In February 1998, EQR filed and the SEC declared effective a Form S-3 Registration Statement to register $1.0 billion of equity securities.  In addition, EQR carried over $272.4 million related to a prior registration statement.  As of December 31, 2003, $956.5 million in equity securities remained available for issuance under this registration statement.  Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of the Operating Partnership in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis) or preference units (on a one-for-one preferred share per preference unit basis).

 

During October 2002, EQR repurchased 5,092,300 of its Common Shares on the open market at an average price of $22.58 per share.  EQR paid approximately $115.0 million for these shares, which were retired subsequent to the repurchase.  Concurrent with this transaction, the Operating Partnership repurchased and retired 5,092,300 OP Units previously issued to EQR.

 

The limited partners of the Operating Partnership as of December 31, 2003 include various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units (“the Limited Partners”) and own an approximate 7.3% ownership interest in ERPOP. Subject to applicable securities law restrictions, the Limited Partners may exchange their OP Units for EQR Common Shares on a one-for-one basis.

 

EQR contributes all net proceeds from its various equity offerings (including proceeds from exercise of options for EQR Common Shares) to the Operating Partnership.  In return for those contributions, EQR receives a number of OP Units in ERPOP equal to the number of Common Shares it has issued in the equity offering (or in the case of a preferred equity offering, a number of preference units in ERPOP equal in number and having the same terms as the preferred shares issued in the equity offering).

 

F-20



 

During 2003, the Operating Partnership issued 313,720 OP Units to various limited partners at an average price of $26.11 per unit.  These OP Units are classified as Limited Partners capital in the accompanying consolidated balance sheets.

 

The following table presents the Operating Partnership’s issued and outstanding “Preference Units” as of December 31, 2003 and 2002:

 

 

 

 

Redemption
Date (1) (2)

 

Conversion
Rate (2)

 

Annual
Dividend
Rate per
Unit (3)

 


Amounts in thousands

 

December
31, 2003

 

December
31, 2002

Preference Units:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9 1/8% Series B Cumulative Redeemable Preference Units; liquidation value $250 per unit; 500,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

10/15/05

 

N/A

 

$

22.81252

 

$

125,000

 

$

125,000

 

 

 

 

 

 

 

 

 

 

 

 

 

9 1/8% Series C Cumulative Redeemable Preference Units; liquidation value $250 per unit; 460,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

9/9/06

 

N/A

 

$

22.81252

 

115,000

 

115,000

 

 

 

 

 

 

 

 

 

 

 

 

 

8.60% Series D Cumulative Redeemable Preference Units; liquidation value $250 per unit; 700,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

7/15/07

 

N/A

 

$

21.50

 

175,000

 

175,000

 

 

 

 

 

 

 

 

 

 

 

 

 

7.00% Series E Cumulative Convertible Preference Units: liquidation value $25 per unit; 2,192,490 and 2,548,114 units issued and outstanding at December 31, 2003 and December 31, 2002, respectively

 

11/1/98

 

1.1128

 

$

1.75

 

54,812

 

63,703

 

 

 

 

 

 

 

 

 

 

 

 

 

7 ¼% Series G Convertible Cumulative Preference Units: liquidation value $250 per unit; 0 and 1,264,692 units issued and outstanding at December 31, 2003 and December 31, 2002, respectively

 

9/15/02

 

8.5360

 

 

(6)

 

316,173

 

 

 

 

 

 

 

 

 

 

 

 

 

7.00% Series H Cumulative Convertible Preference Units; liquidation value $25 per unit; 44,028 and 51,228 units issued and outstanding at December 31, 2003 and December 31, 2002, respectively

 

6/30/98

 

1.4480

 

$

1.75

 

1,101

 

1,281

 

 

 

 

 

 

 

 

 

 

 

 

 

8.29% Series K Cumulative Redeemable Preference Units; liquidation value $50 per unit; 1,000,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

12/10/26

 

N/A

 

$

4.145

 

50,000

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

7.625% Series L Cumulative Redeemable Preference Units; liquidation value $25 per unit; 0 and 4,000,000 units issued and outstanding at December 31, 2003 and December 31, 2002, respectively

 

2/13/03

 

N/A

 

 

(4)

 

100,000

 

 

 

 

 

 

 

 

 

 

 

 

 

6.48% Series N Cumulative Redeemable Preference Units; liquidation value $250 per unit; 600,000 and 0 units issued and outstanding at December 31, 2003 and December 31, 2002, respectively (5)

 

6/19/08

 

N/A

 

$

16.20

 

150,000

 

 

 

 

 

 

 

 

 

 

$

670,913

 

$

946,157

 

 

F-21



 


 

(1)               On or after the redemption date, redeemable preference units (Series B, C, D, K, and N) may be redeemed for cash at the option of the Operating Partnership, in whole or in part, at a redemption price equal to the liquidation price per unit, plus accrued and unpaid distributions, if any, in conjunction with the concurrent redemption of the corresponding EQR Preferred Shares.

 

(2)               On or after the redemption date, convertible preference units (Series E & H) may be redeemed under certain circumstances at the option of the Operating Partnership for cash or OP Units, in whole or in part, at various redemption prices per unit based upon the contractual conversion rate, plus accrued and unpaid distributions, if any, in conjunction with the concurrent redemption/conversion of the corresponding EQR Preferred Shares.

 

(3)               Dividends on all series of Preference Units are payable quarterly at various pay dates.  Dividend rates listed for Series B, C, D and N are Preference Unit rates and the equivalent depositary unit annual dividend rates are $2.281252, $2.281252, $2.15 and $1.62, respectively.

 

(4)               On June 19, 2003, the Operating Partnership redeemed all of its outstanding Series L Cumulative Redeemable Preference Units at liquidation value for total cash consideration of $100.0 million in conjunction with the concurrent redemption of the corresponding EQR Preferred Share.  The Operating Partnership did not incur any original issuance costs as these units were issued by Merry Land and Investment Company, Inc. prior to its merger with the Company.

 

(5)               On June 19, 2003, EQR issued 600,000 Series N Cumulative Redeemable Preferred Shares in a public offering.  The Company received $145.3 million in net proceeds from this offering after payment of the underwriters’ fee.  These net proceeds were contributed by EQR to the Operating Partnership in exchange for 600,000 of the Operating Partnership’s 6.48% Series N Cumulative Redeemable Preference Units.

 

(6)               On December 26, 2003, the Operating Partnership redeemed the remaining outstanding Series G Convertible Cumulative Preference Units for cash consideration of $295.3 million, which included the liquidation value of $287.0 million and a cash redemption premium of $8.3 million.  This redemption was completed in conjunction with the concurrent redemption of the corresponding EQR Preferred Share.  The Operating Partnership recorded the $8.3 million cash redemption premium along with the write-off of $11.9 million in original issuance costs as a premium on redemption of preference units in the accompanying consolidated statements of operations.

 

Cumulative through December 31, 2003, a subsidiary of ERPOP issued various series of Preference Interests with an equity value of $246.0 million receiving net proceeds of $239.9 million.  The following table presents the issued and outstanding Preference Interests as of December 31, 2003 and December 31, 2002:

 

F-22



 

 

 

Redemption
Date (1)(2)

 

Conversion
Rate (2)

 

Annual
Dividend
Rate per
Unit (3)

 


Amounts in thousands

 

December
31, 2003

 

December
31, 2002

Preference Interests:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8.00% Series A Cumulative Redeemable Preference Interests; liquidation value $50 per unit; 800,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

10/01/04

 

N/A

 

$

4.0000

 

$

40,000

 

$

40,000

 

 

 

 

 

 

 

 

 

 

 

 

 

8.50% Series B Cumulative Redeemable Preference Units; liquidation value $50 per unit; 1,100,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

03/03/05

 

N/A

 

$

4.2500

 

55,000

 

55,000

 

 

 

 

 

 

 

 

 

 

 

 

 

8.50% Series C Cumulative Redeemable Preference Units; liquidation value $50 per unit; 220,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

03/23/05

 

N/A

 

$

4.2500

 

11,000

 

11,000

 

 

 

 

 

 

 

 

 

 

 

 

 

8.375% Series D Cumulative Redeemable Preference Units; liquidation value $50 per unit; 420,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

05/01/05

 

N/A

 

$

4.1875

 

21,000

 

21,000

 

 

 

 

 

 

 

 

 

 

 

 

 

8.50% Series E Cumulative Redeemable Preference Units; liquidation value $50 per unit; 1,000,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

08/11/05

 

N/A

 

$

4.2500

 

50,000

 

50,000

 

 

 

 

 

 

 

 

 

 

 

 

 

8.375% Series F Cumulative Redeemable Preference Units; liquidation value $50 per unit; 180,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

05/01/05

 

N/A

 

$

4.1875

 

9,000

 

9,000

 

 

 

 

 

 

 

 

 

 

 

 

 

7.875% Series G Cumulative Redeemable Preference Units; liquidation value $50 per unit; 510,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

03/21/06

 

N/A

 

$

3.9375

 

25,500

 

25,500

 

 

 

 

 

 

 

 

 

 

 

 

 

7.625% Series H Cumulative Convertible Redeemable Preference Units; liquidation value $50 per unit; 190,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

03/23/06

 

1.5108

 

$

3.8125

 

9,500

 

9,500

 

 

 

 

 

 

 

 

 

 

 

 

 

7.625% Series I Cumulative Convertible Redeemable Preference Units; liquidation value $50 per unit; 270,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

06/22/06

 

1.4542

 

$

3.8125

 

13,500

 

13,500

 

 

 

 

 

 

 

 

 

 

 

 

 

7.625% Series J Cumulative Convertible Redeemable Preference Units; liquidation value $50 per unit; 230,000 units issued and outstanding at December 31, 2003 and December 31, 2002

 

12/14/06

 

1.4108

 

$

3.8125

 

11,500

 

11,500

 

 

 

 

 

 

 

 

 

$

246,000

 

$

246,000

 

 


(1)               On or after the fifth anniversary of the respective issuance (the “Redemption Date”), all of the Preference Interests may be redeemed for cash at the option of the Company, in whole or in part, at any time or from time to time, at a redemption price equal to the liquidation preference of $50.00 per unit plus the cumulative amount of accrued and unpaid distributions, if any.

 

(2)               On or after the tenth anniversary of the respective issuance (the “Conversion Date”), all of the Preference Interests are exchangeable at the option of the holder (in whole but not in part) on a one-for-one basis for a respective reserved series of EQR Preferred Shares.  In addition, on or after the Conversion Date, the convertible Preference Interests (Series H, I & J) may be converted under certain circumstances at the option of the holder (in whole but not in part) to Common Shares based upon the contractual conversion rate, plus accrued and unpaid distributions, if any.

 

(3)               Dividends on all series of Preference Interests are payable quarterly on March 25th, June 25th, September 25th, and December 25th of each year.

F-23



 

The following table presents the Operating Partnership’s issued and outstanding Junior Convertible Preference Units (the “Junior Preference Units”) as of December 31, 2003 and December 31, 2002:

 

 

 

Redemption
Date

 

Conversion
Rate

 

Annual
Dividend
Rate per
Unit(3)

 

 

 

Amounts in thousands

December
31, 2003

 

December
31, 2002

Junior Preference Units:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Series A Junior Convertible Preference Units; liquidation value $100 per unit; 20,333 and 56,616 units issued and outstanding at December 31, 2003 and December 31, 2002, respectively

 

 

(1)(4)

4.0816

 

$

5.46934

 

$

2,033

 

$

5,662

 

 

 

 

 

 

 

 

 

 

 

 

 

Series B Junior Convertible Preference Units; liquidation value $25 per unit; 7,367 units issued and outstanding at December 31, 2003 and December 31, 2002

 

 

(2)

 

(2)

$

2.00000

 

184

 

184

 

 

 

 

 

 

 

 

 

$

2,217

 

$

5,846

 

 


(1)               On the fifth anniversary of the respective issuance (the “Redemption Date”), the Series A Junior Preference Units shall be automatically converted into OP Units based upon the conversion rate.  Prior to the Redemption Date, the Operating Partnership or the holders may elect to convert the Series A Junior Preference Units to OP Units under certain circumstances based upon the conversion rate.

 

(2)               On or after the tenth anniversary of the issuance (the “Redemption Date”), the Series B Junior Preference Units may be converted into OP Units at the option of the Operating Partnership based on the contractual conversion rate.  Prior to the Redemption Date, the holders may elect to convert the Series B Junior Preference Units to OP Units under certain circumstances based on the contractual conversion rate.  The contractual conversion rate is based upon a ratio dependent upon the closing price of EQR’s Common Shares.

 

(3)               Dividends on both series of Junior Preference Units are payable quarterly at various pay dates.

 

(4)               On December 22, 2003, 36,283 Series A Junior Preference Units issued on December 22, 1998 automatically converted to 148,092 OP Units.  The remaining 20,333 Series A Junior Preference Units will automatically convert to OP Units on June 29, 2004, if not converted sooner.

 

5.                                      Real Estate Acquisitions

 

The following table summarizes the carrying amounts for investment in real estate (at cost) as of December 31, 2003 and 2002 (Amounts are in thousands):

 

 

 

2003

 

2002

 

Land

 

$

1,845,547

 

$

1,795,771

 

Land Held for Development

 

7,546

 

7,806

 

Buildings and Improvements

 

10,415,679

 

10,643,030

 

Furniture, Fixtures and Equipment

 

602,647

 

597,215

 

Construction in Progress

 

2,960

 

2,441

 

Real Estate

 

12,874,379

 

13,046,263

 

Accumulated Depreciation

 

(2,296,013

)

(2,112,017

)

Real Estate, net

 

$

10,578,366

 

$

10,934,246

 

 

During the year ended December 31, 2003, the Operating Partnership acquired the entire equity interest in seventeen properties containing 5,200 units from unaffiliated parties, inclusive of two additional units at an existing property, for a total purchase price of $684.1 million.

 

F-24



 

During the year ended December 31, 2003, the Operating Partnership acquired the majority of the remaining third party equity interests it did not previously own in eleven properties containing 1,090 units.              These properties were accounted for under the equity method of accounting and subsequent to each purchase were consolidated.  The Operating Partnership recorded $111.1 million in investment in real estate and the following:

 

                  Assumed $51.6 million in mortgage debt;

                  Issued 153,851 OP Units having a value of $4.2 million;

                  Recorded $42,000 of minority interest in partially owned properties;

                  Reduced investments in unconsolidated entities by $34.9 million;

                  Consolidated and/or received net cash of $6.9 million; and

                  Assumed $27.2 million of other liabilities net of other assets acquired.

 

During the year ended December 31, 2002, the Operating Partnership acquired the entire equity interest in twelve properties containing 3,634 units for a total purchase price of $289.9 million.

 

During the fourth quarter of 2002, the Operating Partnership paid $40.1 million in cash and used tax-deferred (1031) exchange proceeds of $42.3 million to acquire the remaining third-party equity interests it did not previously own in two properties containing 826 units.  These properties were accounted for under the equity method of accounting and subsequent to these purchases were consolidated.  Accordingly, the Company recorded an additional $102.1 million in investment in real estate.

 

On December 31, 2002, the Operating Partnership contributed one of its development properties to one of its development partners, retaining a 50% common equity ownership interest.  As a result of this contribution, the Company no longer can exercise sole control over the major decisions (such as sale and/or financing/refinancing) regarding this property.  Effective with the contribution, the Operating Partnership accounted for this project under the equity method of accounting.  No gain or loss on sale was recognized as the contribution was effectuated at carryover basis.  As a result of this transaction, the Operating Partnership reduced investment in real estate by $203.7 million (of which land and construction in progress were reduced by $60.6 million and $143.1 million, respectively), reduced mortgage debt by $118.4 million and increased investments in unconsolidated entities by $80.7 million.

 

6.                                      Real Estate Dispositions

 

During the year ended December 31, 2003, the Operating Partnership disposed of ninety-six properties containing 23,486 units to unaffiliated parties, inclusive of various individual condominium units, for a total sales price of $1.22 billion allocated as follows:

 

                  Wholly Owned Properties – 91 properties containing 22,698 units for a total sales price of $1.19 billion;

                  Partially Owned Properties – 3 properties containing 465 units for a total sales price of $13.6 million; and

                  Unconsolidated Properties – 2 properties containing 323 units for a total sales price of $13.9 million (represents the Operating Partnership’s allocated share of the net disposition proceeds).

 

The Operating Partnership recognized a net gain on sales of discontinued operations of approximately $310.7 million and a net gain on sales of unconsolidated entities of approximately $4.9 million on the above sales.

 

During the year ended December 31, 2002, the Operating Partnership sold fifty-eight properties containing 10,713 units to unaffiliated parties for a total sales price of $546.2 million.  The Operating Partnership recognized a net gain on sales of discontinued operations of approximately $104.3 million and a net gain on sales of unconsolidated entities of approximately $5.1 million.

 

F-25



 

7.                                      Commitments to Acquire/Dispose of Real Estate

 

As of February 4, 2004, in addition to the properties that were subsequently acquired as discussed in Note 24, the Operating Partnership had entered into a separate agreement to acquire one multifamily property containing 540 units from an unaffiliated party.  The Operating Partnership expects a purchase price of approximately $73.0 million.

 

As of February 4, 2004, in addition to the properties that were subsequently disposed of as discussed in Note 24, the Operating Partnership had entered into separate agreements to dispose of eleven multifamily properties containing 3,626 units to unaffiliated parties.  The Operating Partnership expects a combined disposition price of approximately $208.5 million.

 

The closings of these pending transactions are subject to certain contingencies and conditions, therefore, there can be no assurance that these transactions will be consummated or that the final terms thereof will not differ in material respects from those summarized in the preceding paragraphs.

 

8.                                      Investment in Mortgage Notes, Net

 

In 1995, the Operating Partnership invested $89 million in various partnership interests and subordinated mortgages collateralized by 21 properties consisting of 3,896 units.  Prior to the consolidation of these properties, the Operating Partnership received $61.4 million in cash during 2001 as partial repayment of its investment in these mortgage notes.

 

On July 2, 2001, the Operating Partnership acquired an additional ownership interest in the 21 entities that own the Unconsolidated Properties.  As a result of this additional ownership interest, the Operating Partnership now has a controlling interest, and as such, consolidates these properties for financial reporting purposes.

 

During 2001, the Operating Partnership amortized $2.3 million, which represented a portion of the original discount when the notes were purchased.  This discount was being amortized utilizing the effective yield method based on the expected life of the investment.

 

9.                                      Investments in Unconsolidated Entities

 

The Operating Partnership has co-invested in various properties with unrelated third parties.  The following table summarizes the Operating Partnership’s investments in unconsolidated entities as of December 31, 2003 (amounts in thousands except for project and unit amounts):

 

 

 

 

Institutional
Joint
Ventures

 

Stabilized
Development
Projects

 

Projects Under
Development

 

Lexford/
Other

 

Totals

 

Total projects

 

45

 

13

 

13

 

19

 

90

(1)

 

 

 

 

 

 

 

 

 

 

 

 

Total units

 

10,846

 

3,964

 

3,795

 

2,254

 

20,859

(1)

 

 

 

 

 

 

 

 

 

 

 

 

Operating Partnership’s percentage share of outstanding debt

 

25.0

%

100.0

%

100.0

%

11.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Partnership’s share of outstanding debt (3)

 

$

121,200

 

$

375,168

 

$

502,549

(2)

$

4,891

 

$

1,003,808

 

 

F-26



 


(1)               Includes seven projects under development containing 2,038 units, which are not included in the Operating Partnership’s property/unit counts at December 31, 2003.   Totals also exclude Fort Lewis Military Housing consisting of one property and 3,757 units, which is not accounted for under the equity method of accounting. The Fort Lewis Military Housing is included in the Operating Partnership’s property/unit counts as of December 31, 2003.

(2)               A total of $666.6 million is available for funding under this construction debt, of which $502.5 million was funded and outstanding at December 31, 2003.

(3)               As of February 4, 2004, the Operating Partnership has funded $44.0 million as additional collateral on selected debt (see Note 10).  All remaining debt is non-recourse to the Operating Partnership.

 

Investments in unconsolidated entities include the Unconsolidated Properties as well as various development properties under construction or pending construction.  These investments are accounted for utilizing the equity method of accounting.  Under the equity method of accounting, the net equity investment of the Operating Partnership is reflected on the consolidated balance sheets and after the project is completed, the consolidated statements of operations include the Operating Partnership’s share of net income or loss from the unconsolidated entity.  Prior to the project being completed, the Operating Partnership capitalizes interest on its equity contribution in accordance with the provisions of SFAS No. 58, Capitalization of Interest Cost in Financial Statements That Include Investments Accounted for by the Equity Method.  During the years ended December 31, 2003, 2002 and 2001, the Operating Partnership capitalized $20.6 million, $17.2 million and $19.9 million, respectively, in interest cost related to its unconsolidated development projects (which reduced interest expense incurred in the consolidated statements of operations).

 

The Operating Partnership generally contributes between 25% and 35% of the project cost of the unconsolidated projects under development (constituting 100% of the equity), with the remaining cost financed through third-party construction mortgages.  Voting rights are shared equally between the Operating Partnership and its respective development partners.

 

See Note 2 for further discussion regarding FIN No. 46 and its anticipated effect on the Operating Partnership’s unconsolidated development projects.

 

10.                               Deposits - Restricted

 

As of December 31, 2003, deposits-restricted totaled $133.8 million and primarily included the following:

 

                  Deposits in the amount of $44.0 million held in third party escrow accounts to provide collateral for third party construction financing in connection with unconsolidated development projects;

                  Approximately $27.7 million in tax-deferred (1031) exchange proceeds; and

                  Approximately $62.1 million for resident security, utility, and other deposits.

 

As of December 31, 2002, deposits-restricted totaled $141.3 million and primarily included the following:

 

                  Deposits in the amount of $51.0 million held in third party escrow accounts to provide collateral for third party construction financing in connection with unconsolidated development projects;

                  Approximately $25.4 million in tax-deferred (1031) exchange proceeds; and

                  Approximately $64.9 million for resident security, utility, and other deposits.

 

11.                               Mortgage Notes Payable

 

As of December 31, 2003, the Operating Partnership had outstanding mortgage indebtedness of approximately $2.7 billion.

 

F-27



 

During the year ended December 31, 2003, the Operating Partnership:

 

                  Repaid $432.9 million of mortgage loans;

                  Assumed $141.1 million of mortgage debt on certain properties in connection with their acquisitions and/or consolidations;

                  Obtained $111.2 million of mortgage loans on certain properties; and

                  Relinquished $53.3 million of mortgage debt assumed by the purchaser on disposed properties.

 

As of December 31, 2003, scheduled maturities for the Operating Partnership’s outstanding mortgage indebtedness were at various dates through November 1, 2033.  At December 31, 2003, the interest rate range on the Operating Partnership’s mortgage debt was 1.06% to 12.465%.  During the year ended December 31, 2003, the weighted average interest rate on the Operating Partnership’s mortgage debt was 5.80%.

 

The historical cost, net of accumulated depreciation, of encumbered properties was $3.8 billion and $4.1 billion at December 31, 2003 and 2002, respectively.

 

Aggregate payments of principal on mortgage notes payable for each of the next five years and thereafter are as follows (amounts in thousands):

 

Year

 

Total

 

2004

 

 

$

99,503

 

2005

 

 

89,935

 

2006

 

 

285,824

 

2007

 

 

173,529

 

2008

 

 

494,727

 

Thereafter

 

 

1,550,297

 

Total

 

 

$

2,693,815

 

 

As of December 31, 2002, the Operating Partnership had outstanding mortgage indebtedness of approximately $2.9 billion.

 

During the year ended December 31, 2002, the Operating Partnership:

 

                  Repaid $407.7 million of mortgage loans;

                  Assumed $50.5 million of mortgage debt on certain properties in connection with their acquisitions and/or consolidations;

                  Relinquished $128.3 million of mortgage debt assumed by the purchaser on disposed properties and the furniture rental business;

                  Obtained $30.0 million of mortgage loans on certain properties; and

                  Obtained $96.1 million in construction loans on certain properties.

 

As of December 31, 2002, scheduled maturities for the Operating Partnership’s outstanding mortgage indebtedness were at various dates through October 1, 2033.  At December 31, 2002, the interest rate range on the Operating Partnership’s mortgage debt was 1.29% to 12.465%.  During the year ended December 31, 2002, the weighted average interest rate on the Operating Partnership’s mortgage debt was 6.35%.

 

12.                               Notes

 

The following tables summarize the Operating Partnership’s unsecured note balances and certain interest rate and maturity date information as of and for the years ended December 31, 2003 and 2002,

 

F-28



 

respectively:

 

December 31, 2003
(Amounts are in thousands)

 

Net Principal
Balance

 

Interest Rate
Ranges

 

Weighted
Average
Interest Rate

 

Maturity
Date Ranges

 

 

 

 

 

 

 

 

 

 

 

Fixed Rate Public Notes

 

$

2,528,894

 

4.861% - 7.75%

 

6.63

%

2004 - 2026

 

Floating Rate Public Note

 

 

 

(1)

2.01

%

2003

 

Fixed Rate Tax-Exempt Bonds

 

127,780

 

4.75% - 5.20%

 

5.07

%

2028 - 2029

 

 

 

 

 

 

 

 

 

 

 

Totals

 

$

2,656,674

 

 

 

 

 

 

 

 

December 31, 2002
(Amounts are in thousands)

 

Net Principal
Balance

 

Interest Rate
Ranges

 

Weighted
Average
Interest Rate

 

Maturity
Date Ranges

 

 

 

 

 

 

 

 

 

 

 

Fixed Rate Public Notes

 

$

2,228,350

 

4.861% - 7.75%

 

6.63

%

2003 - 2026

 

Floating Rate Public Note

 

99,955

 

 

(1)

2.61

%

2003

 

Fixed Rate Tax-Exempt Bonds

 

127,780

 

4.75% - 5.20%

 

5.07

%

2028 - 2029

 

 

 

 

 

 

 

 

 

 

 

Totals

 

$

2,456,085

 

 

 

 

 

 

 

 


(1)               The interest rate on this note was LIBOR (reset quarterly) plus a spread equal to 0.63% throughout all of 2002 and through August 21, 2003.  On August 21, 2003, these notes matured and were repaid in full.

 

The Operating Partnership’s unsecured public debt contains certain financial and operating covenants including, among other things, maintenance of certain financial ratios.  The Operating Partnership was in compliance with its unsecured public debt covenants for the years ended December 31, 2003 and 2002.

 

In June 2003, the Operating Partnership filed and the SEC declared effective a Form S-3 registration statement to register $2.0 billion of debt securities.  In addition, the Operating Partnership carried over $280.0 million related to a prior registration statement.  As of December 31, 2003, $2.28 billion in debt securities remained available for issuance under this registration statement.

 

During the year ended December 31, 2003, the Operating Partnership:

 

                  Issued $400.0 million of ten-year 5.20% fixed-rate public notes, receiving net proceeds of $397.5 million;

                  Repaid $100.0 million of floating rate public notes at maturity;

                  Repaid $50.0 million and $40.0 million of 6.65% and 6.875%, respectively, fixed rate public notes at maturity; and

                  Repaid $4.5 million of other unsecured notes.

 

During the year ended December 31, 2002, the Operating Partnership:

 

                  Issued $400.0 million of ten-year 6.625% fixed-rate public notes and $50.0 million of five-year 4.861% fixed rate public notes, receiving net proceeds of $444.4 million;

                  Repaid $100.0 million of 9.375% fixed rate public notes at maturity;

                  Repaid $125.0 million of 7.95% fixed rate public notes at maturity; and

                  Repaid $40.0 million of 7.25% fixed rate public notes at maturity.

 

F-29



 

Aggregate payments of principal on unsecured notes payable for each of the next five years and thereafter are as follows (amounts in thousands):

 

Year

 

Total

 

2004

 

 

$

415,088

 

2005 (1)

 

 

505,503

 

2006 (2)

 

 

204,137

 

2007

 

 

159,054

 

2008

 

 

 

Thereafter

 

 

1,372,892

 

Total

 

 

$

2,656,674

 

 


(1)                Includes $300 million with a final maturity of 2015 that is putable/callable in 2005.

(2)                Includes $150 million with a final maturity of 2026 that is putable in 2006.

 

13.                               Line of Credit

 

On May 30, 2002, the Operating Partnership obtained a new three-year $700.0 million unsecured revolving credit facility maturing May 29, 2005.  The new line of credit replaced the $700.0 million unsecured revolving credit facility that was scheduled to expire in August 2002.  The prior existing revolving credit facility was terminated upon the closing of the new facility.  Advances under the new credit facility bear interest at variable rates based upon LIBOR at various interest periods, plus a spread dependent upon the Operating Partnership’s credit rating, or based upon bids received from the lending group.  EQR has guaranteed the Operating Partnership’s line of credit up to the maximum amount and for the full term of the facility.

 

As of December 31, 2003 and 2002, $10.0 million and $140.0 million, respectively, was outstanding and $56.7 million and $60.8 million, respectively, was restricted (dedicated to support letters of credit and not available for borrowing) on the line of credit.  During the years ended December 31, 2003 and 2002, the weighted average interest rate was 1.85% and 2.30%, respectively.

 

14.                               Derivative Instruments

 

The following table summarizes the consolidated derivative instruments at December 31, 2003 (dollar amounts are in thousands):

 

 

 

Cash Flow
Hedges

 

Fair Value
Hedges

 

Forward
Starting
Swaps

 

Interest
Rate Caps

 

Offsetting
Receive
Floating
Swaps/Caps

 

Offsetting
Pay
Floating
Swaps/Caps

 

Current Notional Balance

 

$

150,000

 

$

120,000

 

$

200,000

 

$

37,000

 

$

255,122

 

$

255,122

 

Lowest Possible Notional

 

$

150,000

 

$

120,000

 

$

200,000

 

$

37,000

 

$

125,512

 

$

125,512

 

Highest Possible Notional

 

$

150,000

 

$

120,000

 

$

200,000

 

$

37,000

 

$

293,044

 

$

293,044

 

Lowest Interest Rate

 

3.683

%

7.25

%

4.3425

%

6.50

%

4.528

%

4.458

%

Highest Interest Rate

 

3.683

%

7.25

%

4.8950

%

6.50

%

6.000

%

6.000

%

Earliest Maturity Date

 

2005

 

2005

 

2014

 

2004

 

2004

 

2004

 

Latest Maturity Date

 

2005

 

2005

 

2014

 

2004

 

2007

 

2007

 

Estimated Asset (Liability) Fair Value

 

$

(6,134

)

$

5,954

 

$

4,114

 

$

 

$

552

 

$

(554

)

 

During the year ended December 31, 2003, the Operating Partnership paid approximately $13.0 million to terminate eight forward starting interest rate swaps in conjunction with the issuance of $400.0 million of ten-year unsecured notes.  The $13.0 million payment has been deferred as a component of accumulated other comprehensive loss and will be recognized as additional interest expense over the ten-

 

F-30



 

year life of the unsecured notes.

 

At December 31, 2003, certain unconsolidated development partnerships in which the Operating Partnership invested had entered into swaps to hedge the interest rate risk exposure on unconsolidated floating rate construction mortgage loans.  The Operating Partnership has recorded these hedges on its consolidated balance sheets.  These swaps have been designated as cash flow hedges with a current aggregate notional amount of $277.9 million (notional amounts range from $26.5 million to $285.9 million over the terms of the swaps) at interest rates ranging from 1.78% to 6.94% maturing at various dates ranging from 2004 to 2005 with a net liability fair value of $5.2 million.  During the years ended December 31 2003 and 2002, the Operating Partnership recognized an unrealized gain of $1.5 million and an unrealized loss of $1.1 million, respectively, due to ineffectiveness of certain of these unconsolidated development derivatives (included in loss from investments in unconsolidated entities).

 

On December 31, 2003, the derivative instruments were reported at their fair value as other assets of approximately $10.4 million, as other liabilities of approximately $6.5 million and as a reduction to investments in unconsolidated entities of approximately $5.2 million.  As of December 31, 2003, there were approximately $23.3 million in deferred losses, net, included in accumulated other comprehensive loss.  Based on the estimated fair values of the net derivative instruments at December 31, 2003, the Operating Partnership may recognize an estimated $9.4 million of accumulated other comprehensive loss as additional interest expense ($5.7 million related to its consolidated derivatives) or as additional loss on investments in unconsolidated entities ($3.7 million related to its unconsolidated development partnerships) during the twelve months ending December 31, 2004.

 

15.                               Earnings Per OP Unit

 

The following tables set forth the computation of net income per OP Unit - basic and net income per OP Unit – diluted:

 

F-31



 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

 

 

(Amounts in thousands except per OP Unit amounts)

 

Numerator for net income per OP Unit – basic:

 

 

 

 

 

 

 

Income from continuing operations

 

$

246,216

 

$

273,702

 

$

337,074

 

Allocation to Preference Units

 

(76,435

)

(76,615

)

(87,504

)

Allocation to Preference Interests

 

(20,211

)

(20,211

)

(18,263

)

Allocation to Junior Preference Units

 

(325

)

(325

)

(352

)

Premium on redemption of preference units

 

(20,237

)

 

(5,324

)

 

 

 

 

 

 

 

 

Income from continuing operations available to OP Units

 

129,008

 

176,551

 

225,631

 

Net gain on sales of discontinued operations

 

310,706

 

104,296

 

148,906

 

Discontinued operations, net

 

21,583

 

70,177

 

21,704

 

Cumulative effect of change in accounting principle

 

 

 

(1,270

)

 

 

 

 

 

 

 

 

 

 

 

Numerator for net income per OP Unit – basic

 

$

461,297

 

$

351,024

 

$

394,971

 

 

 

 

 

 

 

 

 

Numerator for net income per OP Unit – diluted:

 

 

 

 

 

 

 

Income from continuing operations

 

$

246,216

 

$

273,702

 

$

337,074

 

Allocation to Preference Units

 

(76,435

)

(76,615

)

(87,504

)

Allocation to Preference Interests

 

(20,211

)

(20,211

)

(18,263

)

Allocation to Junior Preference Units

 

(325

)

(325

)

(352

)

Premium on redemption of preference units

 

(20,237

)

 

(5,324

)

 

 

 

 

 

 

 

 

Income from continuing operations available to OP Units

 

129,008

 

176,551

 

225,631

 

Net gain on sales of discontinued operations

 

310,706

 

104,296

 

148,906

 

Discontinued operations, net

 

21,583

 

70,177

 

21,704

 

Cumulative effect of change in accounting principle

 

 

 

(1,270

)

 

 

 

 

 

 

 

 

 

 

 

Numerator for net income per OP Unit – diluted

 

$

461,297

 

$

351,024

 

$

394,971

 

 

 

 

 

 

 

 

 

Denominator for net income per OP Unit – basic and diluted:

 

 

 

 

 

 

 

Denominator for net income per OP Unit – basic

 

294,523

 

294,637

 

291,362

 

 

 

 

 

 

 

 

 

Effect of dilutive securities:

 

 

 

 

 

 

 

Dilution for OP Units issuable upon assumed exercise/vesting of EQR’s share options/restricted shares

 

2,518

 

3,332

 

3,851

 

 

 

 

 

 

 

 

 

Denominator for net income per OP Unit – diluted

 

297,041

 

297,969

 

295,213

 

 

 

 

 

 

 

 

 

Net income per OP Unit – basic

 

$

1.57

 

$

1.19

 

$

1.36

 

 

 

 

 

 

 

 

 

Net income per OP Unit – diluted

 

$

1.55

 

$

1.18

 

$

1.34

 

 

F-32



 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

 

 

(Amounts in thousands except per OP Unit amounts)

 

 

 

 

 

 

 

 

 

Net income per OP Unit – basic:

 

 

 

 

 

 

 

Income from continuing operations available to OP Units

 

$

0.44

 

$

0.60

 

$

0.77

 

Net gain on sales of discontinued operations

 

1.06

 

0.35

 

0.51

 

Discontinued operations, net

 

0.07

 

0.24

 

0.08

 

Cumulative effect of change in accounting principle

 

 

 

 

Net income per OP Unit – basic

 

$

1.57

 

$

1.19

 

$

1.36

 

 

 

 

 

 

 

 

 

Net income per OP Unit – diluted:

 

 

 

 

 

 

 

Income from continuing operations available to OP Units

 

$

0.43

 

$

0.59

 

$

0.76

 

Net gain on sales of discontinued operations

 

1.05

 

0.35

 

0.51

 

Discontinued operations, net

 

0.07

 

0.24

 

0.07

 

Cumulative effect of change in accounting principle

 

 

 

 

Net income per OP Unit – diluted

 

$

1.55

 

$

1.18

 

$

1.34

 

 

Convertible preference units/interests that could be converted into 14,745,904, 15,335,977 and 15,461,626 weighted average Common Shares (which would be contributed to the Operating Partnership in exchange for OP Units) for the years ended December 31, 2003, 2002 and 2001, respectively, were outstanding but were not included in the computation of diluted earnings per OP Unit because the effects would be anti-dilutive.

 

For additional disclosures regarding the employee share options and restricted shares, see Notes 2 and 17.

 

16.                               Discontinued Operations

 

The Operating Partnership has presented separately as discontinued operations in all periods the results of operations for all wholly owned assets disposed of on or after January 1, 2002 (the date of adoption of SFAS No. 144).

 

The components of discontinued operations are outlined below and include the results of operations for the respective periods that the Operating Partnership owned such assets during each of the years ended December 31, 2003, 2002 and 2001, including the following:

 

                  The ninety-one Wholly Owned Properties and various individual condominium units containing 22,698 units sold during 2003; and

                  The fifty-two Wholly Owned Properties and various individual condominium units containing 9,586 units and the furniture rental business sold during 2002.

 

F-33



 

 

 

Year Ended December 31,

 

 

 

2003

 

2002

 

2001

 

 

 

(Amounts in thousands)

 

REVENUES

 

 

 

 

 

 

 

Rental income

 

$

102,092

 

$

216,607

 

$

247,242

 

Furniture income

 

 

1,361

 

57,499

 

Total revenues

 

102,092

 

217,968

 

304,741

 

 

 

 

 

 

 

 

 

EXPENSES (1)

 

 

 

 

 

 

 

Property and maintenance

 

39,051

 

64,076

 

67,513

 

Real estate taxes and insurance

 

11,107

 

22,155

 

24,079

 

Property management

 

103

 

162

 

163

 

Depreciation

 

27,230

 

53,917

 

60,495

 

Furniture expenses

 

 

1,303

 

58,852

 

Impairment on furniture rental business

 

 

 

60,000

 

Amortization of goodwill

 

 

 

1,423

 

Total expenses

 

77,491

 

141,613

 

272,525

 

 

 

 

 

 

 

 

 

Discontinued operating income

 

24,601

 

76,355

 

32,216

 

 

 

 

 

 

 

 

 

Interest and other income

 

304

 

69

 

402

 

Interest (2):

 

 

 

 

 

 

 

Expense incurred, net

 

(2,784

)

(6,110

)

(10,703

)

Amortization of deferred financing costs

 

(538

)

(137

)

(211

)

Discontinued operations, net

 

$

21,583

 

$

70,177

 

$

21,704

 

 


(1)                     Includes expenses paid in the current period for Wholly Owned Properties sold in prior periods related to the Operating Partnership’s period of ownership.

(2)                     Interest includes only specific amounts from each property sold.

 

For the properties sold during 2003, the investment in real estate, net of accumulated depreciation, and the mortgage notes payable balances at December 31, 2002 were $883.6 million and $89.1, million respectively.

 

During the year ended December 31, 2002, the Operating Partnership disposed of its furniture rental business for $30.0 million and received net proceeds of $28.7 million.  After giving effect to a previously recorded impairment loss, no gain/loss on sale was recognized as the net book value at the sale date approximated the sales price.

 

During the year ended December 31, 2001, the Operating Partnership recorded $60.0 million of asset impairment charges related to its furniture rental business.  These charges were the result of a review of the existing intangible and tangible assets reflected on the consolidated balance sheet as of September 30, 2001.  The Operating Partnership reviewed the current net book value taking into consideration existing business and economic conditions as well as projected cash flows.  The impairment loss includes the write-down of the following assets: a) goodwill of approximately $26.0 million; b) rental furniture, net of approximately $28.6 million; c) property and equipment, net of approximately $4.5 million; and d) other assets of approximately $0.9 million.

 

17.                               Share Incentive Plans

 

Any Common Shares issued pursuant to EQR’s incentive equity compensation and employee

 

F-34



 

share purchase plans will result in the Operating Partnership issuing OP Units to EQR on a one-for-one basis, with the Operating Partnership receiving the net cash proceeds of such issuances.

 

On May 15, 2002, the shareholders of EQR approved the Company’s 2002 Share Incentive Plan.  The maximum aggregate number of awards that may be granted under this plan may not exceed 7.5% of the Company’s outstanding Common Shares calculated on a “fully diluted” basis and determined annually on the first day of each calendar year.  In January 2003, the Company filed a Form S-8 registration statement to register 23,125,828 Common Shares for issuance under this plan.  As of January 1, 2004, 22,736,239 shares were available for issuance under this plan.  No awards may be granted under the 2002 Share Incentive Plan after February 20, 2012.

 

Pursuant to the 2002 Share Incentive Plan and the Fifth Amended and Restated 1993 Share Option and Share Award Plan (collectively the “Share Incentive Plans”), officers, trustees, key employees and consultants of the Company may be offered the opportunity to acquire Common Shares through the grant of share options (“Options”) including non-qualified share options (“NQSOs”), incentive share options (“ISOs”) and share appreciation rights (“SARs”) or may be granted restricted or non-restricted shares.  Additionally, officers and key employees of the Company may be awarded Common Shares, subject to conditions and restrictions as described in the Share Incentive Plans.  Finally, certain executive officers of the Company are subject to the Company’s performance based restricted share plan.  Options, SARs, restricted shares and performance shares are sometimes collectively referred to herein as “Awards”.

 

The Options generally are granted at the fair market value of the Company’s Common Shares at the date of grant, vest over a three year period, are exercisable upon vesting and expire ten years from the date of grant.  The exercise price for all Options under the Share Incentive Plans shall not be less than the fair market value of the underlying Common Shares at the time the Option is granted.  The Fifth Amended and Restated 1993 Share Option and Share Award Plan will terminate at such time as all outstanding Awards have expired or have been exercised/vested.  The Board of Trustees may at any time amend or terminate the Share Incentive Plans, but termination will not affect Awards previously granted.  Any Options, which had vested prior to such a termination, would remain exercisable by the holder thereof.

 

As to the Options that have been granted through December 31, 2003, generally, one-third are exercisable one year after the initial grant, one-third are exercisable two years following the date such Options were granted and the remaining one-third are exercisable three years following the date such Options were granted.

 

As to the restricted shares that have been awarded through December 31, 2003, these shares generally vest three years from the award date.  During the three-year period of restriction, the employee receives quarterly dividend payments on their shares.  The Company’s unvested restricted shareholders receive dividends at the same rate and on the same date as any other Common Share holder.  In addition, the Company’s unvested restricted shareholders have the same voting rights as any other Common Share holder.  As a result, dividends paid on unvested restricted shares are included as a distribution in excess of accumulated earnings and have not been considered in reducing net income available to OP Units in a manner similar to the Operating Partnership’s preference unit dividends for the earnings per OP Unit calculation.  If employment is terminated prior to the lapsing of the restriction, the shares are canceled.

 

In addition, each year the Company’s executive officers receive performance-based awards.  Three years after grant, restricted shares may be issued based upon the total return (Common Share dividends and funds from operations (“FFO”) growth per share) of the Company. One-half of any such restricted shares are then subject to vesting over an additional two-year period.  The performance-based awards generally are expensed over a five-year period based upon the Company’s estimates of the number of shares expected to be awarded.

 

F-35



 

The following table summarizes information regarding both the restricted and performance-based share plans for the three years ended December 31, 2003, 2002 and 2001:

 

Year

 

EQR
Restricted/
Performance
Share Awards
Granted, Net of
Cancellations

 

Weighted
Average
Grant
Price

 

 

 

 

 

Dividends
Incurred

 

Compensation Expense

General and
Administrative

 

Property
Management

2003

 

900,555

 

$

23.58

 

$

5.5 million

 

$

5.6 million

 

$

2.5 million

 

2002

 

885,967

 

$

27.22

 

$

16.2 million

 

$

9.6 million

 

$

2.9 million

 

2001

 

730,982

 

$

25.98

 

$

9.4 million

 

$

8.9 million

 

$

2.4 million

 

 

Prior to 2003, the Company had chosen to account for its stock-based compensation in accordance with APB No. 25, Accounting for Stock Issued to Employees, which resulted in no compensation expense for options issued with an exercise price equal to or exceeding the market value of the Company’s Common Shares on the date of grant (intrinsic method).  The Company has elected to account for its stock-based compensation in accordance with SFAS No. 123 and its amendment (SFAS No. 148), Accounting for Stock Based Compensation, effective in the first quarter of 2003, which resulted in compensation expense being recorded based on the fair value of the stock compensation granted.

 

Compensation expense related to restricted and performance-based share grants was previously recognized in accordance with APB No. 25.  The adoption of SFAS No. 123 does not significantly change the amount of compensation expense recognized for these grants.

 

See Note 2 for additional information regarding the Company’s stock-based compensation.

 

The table below summarizes the Option activity of the Share Incentive Plans and options assumed in connection with mergers (the “Merger Options”) for the three years ended December 31, 2003, 2002 and 2001:

 

F-36



 

 

 

Common Shares
Subject to Options

 

Weighted Average
Exercise Price
Per Option

 

Balance at December 31, 2000

 

12,683,447

 

$

21.12

 

Options granted

 

2,844,838

 

$

26.48

 

Options exercised

 

(3,125,870

)

$

20.31

 

Merger Options exercised

 

(57,660

)

$

15.26

 

Options canceled

 

(167,982

)

$

22.55

 

Merger Options canceled

 

(1,622

)

$

20.17

 

 

 

 

 

 

 

Balance at December 31, 2001

 

12,175,151

 

$

22.59

 

Options granted

 

2,270,220

 

$

27.24

 

Options exercised

 

(1,425,494

)

$

20.36

 

Merger Options exercised

 

(13,621

)

$

19.66

 

Options canceled

 

(177,536

)

$

24.90

 

 

 

 

 

 

 

Balance at December 31, 2002

 

12,828,720

 

$

23.63

 

Options granted (1993 plan)

 

665,304

 

$

23.55

 

Options granted (2002 plan)

 

2,217,124

 

$

23.59

 

Options exercised (1993 plan)

 

(2,696,110

)

$

20.61

 

Options exercised (2002 plan)

 

(500,000

)

$

23.55

 

Merger Options exercised

 

(52,995

)

$

19.55

 

Options canceled (1993 plan)

 

(338,998

)

$

25.06

 

Options canceled (2002 plan)

 

(43,137

)

$

23.55

 

 

 

 

 

 

 

Balance at December 31, 2003

 

12,079,908

 

$

24.27

 

 

The following table summarizes information regarding options outstanding at December 31, 2003:

 

 

 

Options Outstanding

 

 

 

 

 

 

 

Options

 

Weighted
Average
Remaining
Contractual
Life in Years

 

Weighted
Average
Exercise
Price

 

Options Exercisable

 

 

 

 

Options

 

Weighted
Average
Exercise
Price

 

 

 

 

 

 

 

Range of Exercise Prices

 

 

$8.91 to $11.88

 

1,476

 

2.1

 

$

11.04

 

1,476

 

$

11.04

 

$11.89 to $14.85

 

76,268

 

1.3

 

$

14.05

 

76,268

 

$

14.05

 

$14.86 to $17.82

 

424,402

 

2.1

 

$

15.52

 

424,402

 

$

15.52

 

$17.83 to $20.79

 

1,240,925

 

4.3

 

$

20.32

 

1,236,202

 

$

20.33

 

$20.80 to $23.76

 

3,459,811

 

8.0

 

$

22.83

 

1,462,761

 

$

21.86

 

$23.77 to $26.73

 

3,789,365

 

5.3

 

$

25.54

 

3,370,552

 

$

25.50

 

$26.74 to $29.70

 

3,087,661

 

7.9

 

$

27.37

 

1,703,254

 

$

27.42

 

$8.91 to $29.70

 

12,079,908

 

6.5

 

$

24.27

 

8,274,915

 

$

23.86

 

 

F-37



 

As of December 31, 2002 and 2001, 8,252,203 Options (with a weighted average exercise price of $22.25) and 7,291,897 Options (with a weighted average exercise price of $21.62) were exercisable, respectively.

 

18.                               Employee Plans

 

The Company established an Employee Share Purchase Plan (the “ESPP”) to provide employees and EQR trustees the ability to annually acquire up to $100,000 of Common Shares of EQR.  In 2003, EQR’s shareholders approved an increase in the aggregate number of EQR Common Shares available under the ESPP to 7,000,000 (from 2,000,000).  The Common Shares may be purchased quarterly at a price equal to 85% of the lesser of: (a) the closing price for a share on the last day of such quarter; and (b) the greater of: (i) the closing price for a share on the first day of such quarter, and (ii) the average closing price for a share for all the business days in the quarter.  During 2003, EQR issued 289,274 Common Shares at net prices that ranged from $20.64 per share to $24.74 per share and received proceeds of approximately $6.3 million.  During 2002, EQR issued 324,238 Common Shares at net prices that ranged from $21.65 per share to $24.43 per share and received proceeds of approximately $7.4 million.  During 2001, EQR issued 310,261 Common Shares at net prices that ranged from $21.76 per share to $23.69 per share and received proceeds of approximately $6.9 million.  The net proceeds were contributed to the Operating Partnership in exchange for OP Units.

 

The Company established a defined contribution plan (the “401(k) Plan”) to provide retirement benefits for employees that meet minimum employment criteria.  The Operating Partnership, on behalf of the Company, matches dollar for dollar up to the first 2% of eligible compensation that a participant contributes to the 401(k) Plan (4% for 2002 and prior years).  Participants are vested in the Company’s contributions over five years.  The Operating Partnership, on behalf of the Company, made contributions in the amount of $3.5 million and $3.1 million for the years ended December 31, 2002 and 2001, respectively, and expects to make contributions in the amount of approximately $2.7 million for the year ended December 31, 2003.

 

The Operating Partnership, on behalf of the Company, may also elect to make an annual discretionary profit-sharing contribution as a percentage of each individual employee’s eligible compensation under the 401(k) Plan.  The Operating Partnership, on behalf of the Company, made a contribution in the amount of $2.6 million for the year ended December 31, 2001.  The Operating Partnership, on behalf of the Company, did not make a contribution for both the years ended December 31, 2003 and 2002.

 

The Company established a supplemental executive retirement savings plan (the “SERP”) to provide certain officers and EQR trustees an opportunity to defer a portion of their eligible compensation in order to save for retirement and for the education of their children.  The SERP is restricted to investments in EQR Common Shares, certain marketable securities that have been specifically approved, and cash equivalents.  The deferred compensation liability represented in the SERP and the securities issued to fund such deferred compensation liability are consolidated by the Operating Partnership and carried on the Operating Partnership’s balance sheet, and the Company’s Common Shares held in the SERP are accounted for as a reduction to General Partner’s capital.

 

19.                               Distribution Reinvestment and Share Purchase Plan

 

On November 3, 1997, the Company filed with the SEC a Form S-3 Registration Statement to register 14,000,000 Common Shares pursuant to a Distribution Reinvestment and Share Purchase Plan (the “DRIP Plan”).  The registration statement was declared effective on November 25, 1997.

 

The DRIP Plan provides holders of record and beneficial owners of Common Shares and Preferred Shares with a simple and convenient method of investing cash distributions in additional Common Shares

 

F-38



 

(which is referred to herein as the “Dividend Reinvestment - DRIP Plan”).  Common Shares may also be purchased on a monthly basis with optional cash payments made by participants in the DRIP Plan and interested new investors, not currently shareholders of EQR, at the market price of the Common Shares less a discount ranging between 0% and 5%, as determined in accordance with the DRIP Plan (which is referred to herein as the “Share Purchase – DRIP Plan”).  Common Shares purchased under the DRIP Plan may, at the option of EQR, be directly issued by EQR or purchased by EQR’s transfer agent in the open market using participants’ funds.  The net proceeds from any Common Share issuances are contributed to the Operating Partnership in exchange for OP Units.

 

20.                               Transactions with Related Parties

 

Pursuant to the terms of the partnership agreement for the Operating Partnership, the Operating Partnership is required to reimburse EQR for all expenses incurred by EQR in excess of income earned by EQR through its indirect 1% ownership of various entities.  Amounts paid on behalf of EQR are reflected in the consolidated statements of operations as general and administrative expenses.

 

The Operating Partnership provided asset and property management services to certain related entities for properties not owned by the Operating Partnership.  Fees received for providing such services were approximately $0.3 million, $0.7 million and $0.8 million for the years ended December 31, 2003, 2002 and 2001, respectively.

 

The Operating Partnership reimbursed EQR’s Chief Operating Officer for the actual operating costs (excluding acquisition costs) of operating his personal aircraft for himself and other employees on Operating Partnership business.  Amounts incurred were approximately $0.2 million, $0.5 million and $0.2 million for the years ended December 31, 2003, 2002 and 2001, respectively.

 

The Operating Partnership leases its corporate headquarters from an entity controlled by EQR’s Chairman of the Board of Trustees.  Amounts incurred for such office space for the years ended December 31, 2003, 2002 and 2001, respectively, were approximately $1.7 million, $1.6 million and $1.8 million.  The Operating Partnership believes these amounts equal market rates for such space.

 

The Operating Partnership leases space in an office building in Augusta, Georgia indirectly owned by one of EQR’s trustees since May 2003 and directly owned by an entity affiliated with the same EQR trustee from 1998 to 2003.  Amounts incurred for such office space were approximately $0.2 million, $0.1 million and $0.1 million for the years ended December 31, 2003, 2002 and 2001, respectively.  The Operating Partnership believes these amounts equal market rates for such space.

 

In prior years, the Company had the following additional related party transactions:

 

                  Certain executive officers of EQR purchased Common Shares which were financed with loans made by the Company, all of which were repaid in full in 2002;

 

                  The Operating Partnership made consulting payments to two former EQR trustees (individuals were trustees through May 2003) in the approximate amounts of $0.2 million and $0.4 million for the years ended December 31, 2002 and 2001, respectively; and

 

                  The Operating Partnership paid legal fees to a law firm of which one of EQR’s former trustees (individual was a trustee through May 2002) is a partner in the approximate amounts of $0.3 million and $1.7 million for the years ended December 31, 2002 and 2001, respectively.

 

F-39



 

21.                               Commitments and Contingencies

 

The Operating Partnership, as an owner of real estate, is subject to various Federal, state and local environmental laws.  Compliance by the Operating Partnership with existing laws has not had a material adverse effect on the Operating Partnership.  However, the Operating Partnership cannot predict the impact of new or changed laws or regulations on its current properties or on properties that it may acquire in the future.

 

The Operating Partnership is a party to a class action lawsuit in Florida state court alleging that several of the types of fees that the Operating Partnership charged when residents breached their leases were illegal, as were all efforts to collect them.  The Operating Partnership is vigorously contesting the plaintiffs’ claims and has sought immediate appellate review of the 2003 class action certification decision.  Due to the uncertainty of many critical factual and legal issues, including the viability of the case as a class action, it is not possible to determine or predict the outcome.  While no assurances can be given, the Operating Partnership does not believe that this lawsuit, if adversely determined, will have a material adverse effect on the Operating Partnership.

 

The Operating Partnership does not believe there is any other litigation pending or threatened against the Operating Partnership which, individually or in the aggregate, reasonably may be expected to have a material adverse effect on the Operating Partnership.

 

As of December 31, 2003, the Operating Partnership has 13 projects in various stages of development with estimated completion dates ranging through June 30, 2005.  The three development agreements currently in place have the following key terms:

 

                  The first development partner has the right, at any time following completion of a project, to stipulate a value for such project and offer to sell its interest in the project to the Operating Partnership based on such value.  If the Operating Partnership chooses not to purchase the interest, it must agree to a sale of the project to an unrelated third party at such value.  The Operating Partnership’s partner must exercise this right as to all projects within five years after the receipt of the final certificate of occupancy on the last developed property. In connection with this development agreement, the Operating Partnership has an obligation to provide up to $40.0 million in credit enhancements to guarantee a portion of the third party construction financing.  As of February 4, 2004, the Operating Partnership had set-aside $20.0 million towards this credit enhancement.  The Operating Partnership would be required to perform under this agreement only if there was a material default under a third party construction mortgage agreement.  This agreement expires no later than December 31, 2018.  Notwithstanding the termination of the agreement, the Operating Partnership shall have recourse against its development partner for any losses incurred.

 

                        The second development partner has the right, at any time following completion of a project, to require the Operating Partnership to purchase the partners’ interest in that project at a mutually agreeable price.  If the Operating Partnership and the partner are unable to agree on a price, both parties will obtain appraisals.  If the appraised values vary by more than 10%, both the Operating Partnership and its partner will agree on a third appraiser to determine which original appraisal is closest to its determination of value.  The Operating Partnership may elect at that time not to purchase the property and instead, authorize its partner to sell the project at or above the agreed-upon value to an unrelated third party.  Five years following the receipt of the final certificate of occupancy on the last developed property, the Operating Partnership must purchase, at the agreed-upon price, any projects remaining unsold.

 

                  The third development partner has the exclusive right for six months following stabilization (generally defined as having achieved 90% occupancy for three consecutive months following the substantial completion of a project) to market a project for sale.  Thereafter, either the

 

F-40



 

Operating Partnership or its development partner may market a project for sale.  If the Operating Partnership’s development partner proposes the sale, the Operating Partnership may elect to purchase the project at the price proposed by its partner or defer the sale until two independent appraisers appraise the project.  If the two appraised values vary by more than 5%, a third appraiser will be chosen to determine the fair market value of the property.  Once a value has been determined, the Operating Partnership may elect to purchase the property or authorize its development partner to sell the project at the agreed-upon value.

 

In connection with one of its mergers, the Operating Partnership provided a guaranty of a credit enhancement agreement with respect to certain tax-exempt bonds issued to finance certain public improvements at a multifamily development project.  The Operating Partnership has the obligation to provide this guaranty for a period of eight years from the consummation of the merger or through May 2005.  The Operating Partnership would be required to perform under this guaranty only if there was a draw on the letter of credit issued by the credit enhancement party.  The counterparty has also indemnified the Operating Partnership for any losses suffered.  As of December 31, 2003, this guaranty was still in effect at a commitment amount of $12.7 million and no current outstanding liability.

 

During the years ended December 31, 2003, 2002 and 2001, total operating lease payments incurred for office space, including a portion of real estate taxes, insurance, repairs and utilities, aggregated $4,985,899, $4,709,363 and $4,929,018, respectively.

 

The minimum basic aggregate rental commitment under the Operating Partnership’s operating leases, including fixed base rent due on a ground lease for one property, in years following December 31, 2003 is as follows:

 

Year

 

Amount

 

2004

 

$

4,834,842

 

2005

 

3,915,366

 

2006

 

2,852,105

 

2007

 

2,376,432

 

2008

 

2,242,893

 

Thereafter

 

8,364,631

 

Total

 

$

24,586,269

 

 

The Company has entered into a retirement benefits agreement with its Chairman of the Board of Trustees and deferred compensation agreements with two of its executive officers and its former chief executive officer.  During the years ended December 31, 2003, 2002 and 2001, the Operating Partnership recognized compensation expense of $3.0 million, $5.1 million and $3.7 million, respectively, related to these agreements.  The projected commitments under these agreements based on estimated retirement dates are:

 

F-41



 

Year

 

Amount

 

2004

 

$

831,168

 

2005

 

1,376,132

 

2006

 

1,410,536

 

2007

 

2,214,549

 

2008

 

2,269,913

 

Thereafter

 

20,972,730

 

Total

 

$

29,075,028

 

 

22.                               Asset Impairment

 

For the years ended December 31, 2003, 2002 and 2001, the Operating Partnership recorded approximately $1.2 million, $1.2 million and $11.8 million, respectively, of asset impairment charges related to its technology investments. These charges were the result of a review of the existing investments reflected on the consolidated balance sheet.  These impairment losses are reflected on the consolidated statements of operations in total expenses and include the write-down of assets classified as other assets and investments in unconsolidated entities.

 

For the year ended December 31, 2002, the Company recorded approximately $17.1 million of asset impairment charges related to its corporate housing business.  Following the guidance in SFAS No. 142, these charges were the result of the Company’s decision to reduce the carrying value of its corporate housing business to $30.0 million, given the continued weakness in the economy and management’s expectations for near-term performance.  This impairment loss is reflected on the consolidated statements of operations as impairment on corporate housing business and on the consolidated balance sheets as a reduction in goodwill, net.

 

23.                               Reportable Segments

 

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by senior management.  Senior management decides how resources are allocated and assesses performance on a monthly basis.

 

The Operating Partnership’s primary business is owning, managing, and operating multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents and includes ECH.  Senior management evaluates the performance of each of our apartment communities on an individual basis; however, each of our apartment communities has similar economic characteristics, residents, and products and services so they have been aggregated into one reportable segment.  The Operating Partnership’s rental real estate segment comprises approximately 99.2%, 99.5% and 99.1% of total revenues for the years ended December 31, 2003, 2002 and 2001, respectively.  The Operating Partnership’s rental real estate segment comprises approximately 99.7% and 99.7% of total assets at December 31, 2003 and 2002, respectively.

 

The primary financial measure for the Operating Partnership’s rental real estate segment is net operating income (“NOI”), which represents rental income less: 1) property and maintenance expense; 2) real estate taxes and insurance expense; and 3) property management expense (all as reflected in the accompanying statements of operations).  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 Operating Partnership’s apartment communities.  Current year NOI is compared to prior year NOI and current year budgeted NOI as a measure of financial performance.  NOI from our rental real estate totaled approximately $1.0 billion, $1.1 billion, and $1.1 billion for the years ended December 31, 2003, 2002 and 2001, respectively.

 

F-42



 

During the acquisition, development and/or disposition of real estate, the Operating Partnership considers its NOI return on total investment as the primary measure of financial performance.

 

The Operating Partnership’s fee and asset management activity is immaterial and does not meet the threshold requirements of a reportable segment as provided for in SFAS No. 131.

 

All revenues are from external customers and there is no customer who contributed 10% or more of the Operating Partnership’s total revenues during the three years ended December 31, 2003, 2002 or 2001.

 

24.                               Subsequent Events/Other

 

Subsequent to December 31, 2003 and through February 4, 2004, the Operating Partnership:

 

                  Acquired four properties (including two additional units at an existing property) consisting of 1,130 units for approximately $151.3 million;

                  Assumed $36.9 million of mortgage debt on one property in connection with its acquisition;

                  Disposed of twelve properties (including one Unconsolidated Property) and various individual condominium units consisting of 2,972 units for approximately $140.9 million;

                  Obtained $16.5 million in new mortgage financing; and

                  Repaid $50.0 million of mortgage loans.

 

25.                               Quarterly Financial Data (Unaudited)

 

The following unaudited quarterly data has been prepared on the basis of a December 31 year-end.  All amounts have also been restated in accordance with the discontinued operations provisions of SFAS No 144.  Amounts are in thousands, except for per OP Unit amounts.

 

2003

 

Fourth
Quarter
12/31

 

Third
Quarter

9/30

 

Second
Quarter
6/30

 

First
Quarter
3/31

 

Total revenues (1)

 

$

459,521

 

$

459,364

 

$

455,890

 

$

448,523

 

Operating income (1)

 

136,057

 

143,249

 

148,105

 

140,104

 

Income from continuing operations (1)

 

50,273

 

64,405

 

68,005

 

63,533

 

Net gain on sales of discontinued operations

 

91,731

 

77,983

 

70,320

 

70,672

 

Discontinued operations, net (1)

 

56

 

4,038

 

7,237

 

10,252

 

Net income *

 

142,060

 

146,426

 

145,562

 

144,457

 

Net income available to OP Units

 

97,967

 

121,728

 

121,325

 

120,277

 

Earnings per OP Unit – basic:

 

 

 

 

 

 

 

 

 

Net income available to OP Units

 

$

0.33

 

$

0.41

 

$

0.41

 

$

0.41

 

Weighted average OP Units outstanding

 

296,371

 

295,032

 

293,696

 

292,949

 

Earnings per OP Unit – diluted:

 

 

 

 

 

 

 

 

 

Net income available to OP Units

 

$

0.33

 

$

0.41

 

$

0.41

 

$

0.41

 

Weighted average OP Units outstanding

 

299,516

 

297,941

 

299,217

 

297,646

 

 


(1)                                  The amounts presented for the first three quarters of 2003 are not equal to the same amounts previously reported in the respective Form 10-Q’s filed with the SEC for each period as a result of changes in discontinued operations due to additional property sales which occurred throughout 2003.  Below is a reconciliation to the amounts previously reported in the respective Form 10-Q’s:

 

F-43



 

2003

 

Third
Quarter
9/30

 

Second
Quarter
6/30

 

First
Quarter
3/31

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues previously reported in Form 10-Q

 

$

472,976

 

$

479,357

 

$

482,707

 

Total revenues subsequently reclassified to discontinued operations

 

(13,612

)

(23,467

)

(34,184

)

 

 

 

 

 

 

 

 

Total revenues disclosed in Form 10-K

 

$

459,364

 

$

455,890

 

$

448,523

 

 

 

 

 

 

 

 

 

Operating income previously reported in Form 10-Q

 

$

147,635

 

$

155,638

 

$

151,039

 

Operating income subsequently reclassified to discontinued operations

 

(4,386

)

(7,533

)

(10,935

)

 

 

 

 

 

 

 

 

Operating income disclosed in Form 10-K

 

$

143,249

 

$

148,105

 

$

140,104

 

 

 

 

 

 

 

 

 

Income from continuing operations previously reported in Form 10-Q

 

$

68,450

 

$

75,105

 

$

73,369

 

Income from continuing operations subsequently reclassified to discontinued operations

 

(4,045

)

(7,100

)

(9,836

)

 

 

 

 

 

 

 

 

Income from continuing operations disclosed in Form 10-K

 

$

64,405

 

$

68,005

 

$

63,533

 

 

 

 

 

 

 

 

 

Discontinued operations, net previously reported in Form 10-Q

 

$

(7

)

$

137

 

$

416

 

Discontinued operations, net from properties sold subsequent to the respective reporting period

 

4,045

 

7,100

 

9,836

 

 

 

 

 

 

 

 

 

Discontinued operations, net disclosed in Form 10-K

 

$

4,038

 

$

7,237

 

$

10,252

 

 

2002

 

Fourth
Quarter
12/31

 

Third
Quarter
9/30

 

Second
Quarter
6/30

 

First
Quarter
3/31

 

Total revenues (2)

 

$

447,834

 

$

455,218

 

$

454,742

 

$

451,369

 

Operating income (2)

 

145,017

 

135,742

 

159,478

 

157,939

 

Income from continuing operations (2)

 

69,089

 

45,270

 

76,002

 

83,341

 

Net gain on sales of discontinued operations

 

43,087

 

32,763

 

25,630

 

2,816

 

Discontinued operations, net (2)

 

14,096

 

15,911

 

19,008

 

21,162

 

Net income *

 

126,272

 

93,944

 

120,640

 

107,319

 

Net income available to OP Units

 

102,090

 

69,756

 

96,384

 

82,794

 

Earnings per OP Unit – basic:

 

 

 

 

 

 

 

 

 

Net income available to OP Units

 

$

0.35

 

$

0.24

 

$

0.33

 

$

0.28

 

Weighted average OP Units outstanding

 

292,125

 

296,519

 

295,799

 

294,106

 

Earnings per OP Unit – diluted:

 

 

 

 

 

 

 

 

 

Net income available to OP Units

 

$

0.35

 

$

0.23

 

$

0.32

 

$

0.28

 

Weighted average OP Units outstanding

 

294,714

 

299,057

 

299,494

 

297,229

 

 


(2)                                  The amounts presented for the first three quarters of 2002 are not equal to the same amounts previously reported in the respective Form 10-Q’s filed with the SEC for each period as a result of changes in discontinued operations due to additional property sales which occurred throughout 2003 and 2002 and the Operating Partnership’s adoption of SFAS No. 145 related to extraordinary items.  Below is a reconciliation to the amounts previously

 

F-44



 

reported in the respective Form 10-Q’s:

 

2002

 

Third
Quarter
9/30

 

Second
Quarter
6/30

 

First
Quarter
3/31

 

 

 

 

 

 

 

 

 

Total revenues previously reported in Form 10-Q

 

$

504,500

 

$

509,507

 

$

512,094

 

Total revenues subsequently reclassified to discontinued operations

 

(49,282

)

(54,765

)

(60,725

)

 

 

 

 

 

 

 

 

Total revenues disclosed in Form 10-K

 

$

455,218

 

$

454,742

 

$

451,369

 

 

 

 

 

 

 

 

 

Operating income previously reported in Form 10-Q

 

$

152,225

 

$

179,385

 

$

181,325

 

Operating income subsequently reclassified to discontinued operations

 

(16,483

)

(19,907

)

(23,386

)

 

 

 

 

 

 

 

 

Operating income disclosed in Form 10-K

 

$

135,742

 

$

159,478

 

$

157,939

 

 

 

 

 

 

 

 

 

Income from continuing operations previously reported in Form 10-Q

 

$

60,835

 

$

94,846

 

$

104,323

 

Income from continuing operations subsequently reclassified to discontinued operations

 

(15,565

)

(18,473

)

(20,885

)

Extraordinary items for early debt extinguishment reclassified to interest expense

 

 

(371

)

(97

)

Income from continuing operations disclosed in Form 10-K

 

$

45,270

 

$

76,002

 

$

83,341

 

 

 

 

 

 

 

 

 

Discontinued operations, net previously reported in Form 10-Q

 

$

346

 

$

535

 

$

277

 

Discontinued operations, net from properties sold subsequent to the respective reporting period

 

15,565

 

18,473

 

20,885

 

 

 

 

 

 

 

 

 

Discontinued operations, net disclosed in Form 10-K

 

$

15,911

 

$

19,008

 

$

21,162

 

 


* The Operating Partnership did not have any extraordinary items or cumulative effect of change in accounting principle during the years ended December 31, 2003 and 2002.  Therefore, income before extraordinary items and cumulative effect of change in accounting principle is not shown as it was equal to the net income amounts disclosed above.

 

F-45


ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest
Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

2300 Elliott

 

Seattle, WA

 

$

 

$

796,800

 

$

7,173,725

 

$

 

$

4,276,332

 

$

796,800

 

$

11,450,058

 

$

12,246,858

 

$

(3,995,994

)

1992

 

30 Years

 

2900 on First

 

Seattle, WA (G)

 

 

1,177,700

 

10,600,360

 

 

3,002,402

 

1,177,700

 

13,602,762

 

14,780,462

 

(4,148,864

)

1989-91

 

30 Years

 

740 River Drive

 

St. Paul, MN

 

5,862,603

 

1,626,700

 

11,234,943

 

 

2,307,093

 

1,626,700

 

13,542,036

 

15,168,736

 

(3,580,156

)

1962

 

30 Years

 

929 House

 

Cambridge, MA (G)

 

4,613,937

 

3,252,993

 

21,745,595

 

 

908,501

 

3,252,993

 

22,654,096

 

25,907,089

 

(2,563,429

)

1975

 

30 Years

 

Abington Glen

 

Abington, MA

 

 

553,105

 

3,697,396

 

 

208,005

 

553,105

 

3,905,401

 

4,458,507

 

(492,539

)

1968

 

30 Years

 

Acacia Creek

 

Scottsdale, AZ

 

 

4,964,970

 

28,694,155

 

 

1,519,060

 

4,964,970

 

30,213,215

 

35,178,185

 

(6,962,258

)

1988-1994

 

30 Years

 

Acadia Court

 

Bloomington, IN

 

1,961,696

 

257,484

 

2,268,653

 

 

382,335

 

257,484

 

2,650,987

 

2,908,471

 

(503,021

)

1985

 

30 Years

 

Acadia Court II

 

Bloomington, IN

 

 

253,636

 

2,234,632

 

 

224,035

 

253,636

 

2,458,666

 

2,712,302

 

(432,875

)

1986

 

30 Years

 

Adelaide Park

 

Norcross, GA

 

 

2,546,500

 

11,009,666

 

 

1,248,772

 

2,546,500

 

12,258,438

 

14,804,938

 

(2,815,895

)

1972/1976

 

30 Years

 

Alborada

 

Fremont, CA

 

 

24,310,000

 

59,214,129

 

 

760,876

 

24,310,000

 

59,975,005

 

84,285,005

 

(7,843,083

)

1999

 

30 Years

 

Ambergate (FL)

 

W. Palm Beach, FL

 

 

730,000

 

1,687,743

 

 

159,184

 

730,000

 

1,846,927

 

2,576,927

 

(260,406

)

1987

 

30 Years

 

Amberidge

 

Roseville, MI

 

 

130,844

 

1,152,880

 

 

132,592

 

130,844

 

1,285,472

 

1,416,316

 

(223,529

)

1985

 

30 Years

 

Amberton

 

Manassas, VA

 

10,705,000

 

900,600

 

9,072,492

 

 

1,089,029

 

900,600

 

10,161,521

 

11,062,121

 

(3,331,324

)

1986

 

30 Years

 

Amberwood (OH)

 

Massillon, OH

 

813,763

 

126,227

 

1,112,289

 

 

214,821

 

126,227

 

1,327,110

 

1,453,337

 

(240,379

)

1987

 

30 Years

 

Amesbury I

 

Reynoldsbury, OH

 

1,194,940

 

143,039

 

1,260,233

 

 

200,427

 

143,039

 

1,460,660

 

1,603,700

 

(263,441

)

1986

 

30 Years

 

Amesbury II

 

Reynoldsbury, OH

 

 

180,588

 

1,591,229

 

 

180,897

 

180,588

 

1,772,126

 

1,952,714

 

(307,145

)

1987

 

30 Years

 

Amhurst (Tol)

 

Toledo, OH

 

 

161,854

 

1,426,108

 

 

123,143

 

161,854

 

1,549,250

 

1,711,104

 

(252,346

)

1983

 

30 Years

 

Amhurst I (OH)

 

Dayton, OH

 

 

152,574

 

1,344,353

 

 

247,782

 

152,574

 

1,592,135

 

1,744,708

 

(313,523

)

1979

 

30 Years

 

Amhurst II (OH)

 

Dayton, OH

 

 

159,416

 

1,404,632

 

 

166,442

 

159,416

 

1,571,074

 

1,730,491

 

(278,291

)

1981

 

30 Years

 

Andover Court

 

Mt. Vernon, OH

 

 

123,875

 

1,091,272

 

 

193,855

 

123,875

 

1,285,127

 

1,409,002

 

(240,743

)

1982

 

30 Years

 

Annhurst (IN)

 

Indianapolis, IN

 

1,204,270

 

189,235

 

1,667,469

 

 

227,393

 

189,235

 

1,894,862

 

2,084,097

 

(359,205

)

1985

 

30 Years

 

Annhurst (MD) (REIT)

 

Belcamp, MD

 

1,240,881

 

232,575

 

2,093,165

 

 

176,023

 

232,575

 

2,269,188

 

2,501,763

 

(249,373

)

1984

 

30 Years

 

Annhurst (PA)

 

Clairton, PA

 

 

307,952

 

2,713,397

 

 

318,343

 

307,952

 

3,031,739

 

3,339,692

 

(521,912

)

1984

 

30 Years

 

Annhurst II (OH)

 

Gahanna, OH

 

 

116,739

 

1,028,595

 

 

196,057

 

116,739

 

1,224,652

 

1,341,390

 

(233,009

)

1986

 

30 Years

 

Annhurst III (OH)

 

Gahanna, OH

 

 

134,788

 

1,187,629

 

 

131,751

 

134,788

 

1,319,381

 

1,454,169

 

(225,842

)

1988

 

30 Years

 

Apple Ridge I

 

Circleville, OH

 

1,008,377

 

139,300

 

1,227,582

 

 

206,724

 

139,300

 

1,434,306

 

1,573,606

 

(239,599

)

1987

 

30 Years

 

Apple Ridge III

 

Circleville, OH

 

 

72,585

 

639,356

 

 

73,805

 

72,585

 

713,161

 

785,746

 

(116,288

)

1982

 

30 Years

 

Applegate (Col)

 

Columbus, IN

 

 

171,829

 

1,514,002

 

 

97,369

 

171,829

 

1,611,371

 

1,783,200

 

(277,781

)

1982

 

30 Years

 

Applegate I (IN)

 

Muncie, IN

 

877,129

 

138,506

 

1,220,386

 

 

205,064

 

138,506

 

1,425,450

 

1,563,955

 

(250,665

)

1984

 

30 Years

 

Applegate II (IN)

 

Muncie, IN

 

1,202,296

 

180,017

 

1,586,143

 

 

243,480

 

180,017

 

1,829,623

 

2,009,640

 

(306,006

)

1987

 

30 Years

 

Applewood I

 

Deland, FL

 

2,056,168

 

235,230

 

2,072,994

 

 

477,344

 

235,230

 

2,550,338

 

2,785,569

 

(546,007

)

1982

 

30 Years

 

Aragon Woods

 

Indianapolis, IN

 

 

157,791

 

1,390,010

 

 

96,387

 

157,791

 

1,486,397

 

1,644,188

 

(262,387

)

1986

 

30 Years

 

Arbor Glen

 

Ypsilanti, MI

 

6,573,553

 

1,096,064

 

9,887,635

 

 

1,226,299

 

1,096,064

 

11,113,934

 

12,209,998

 

(2,692,814

)

1990

 

30 Years

 

Arbor Terrace

 

Sunnyvale, CA

 

(R)

 

9,057,300

 

18,483,642

 

 

669,641

 

9,057,300

 

19,153,283

 

28,210,583

 

(3,822,766

)

1979

 

30 Years

 

Arboretum (GA)

 

Atlanta, GA

 

 

4,682,300

 

15,913,018

 

 

1,407,580

 

4,682,300

 

17,320,598

 

22,002,898

 

(4,191,166

)

1970

 

30 Years

 

Arboretum (MA)

 

Canton, MA

 

(M)

 

4,685,900

 

10,992,751

 

 

647,767

 

4,685,900

 

11,640,518

 

16,326,418

 

(2,429,558

)

1989

 

30 Years

 

Arboretum at Stonelake

 

Austin, TX

 

 

6,120,000

 

24,068,145

 

 

(800

)

6,120,000

 

24,067,345

 

30,187,345

 

 

1996

 

30 Years

 

Arbors of Brentwood

 

Nashville, TN

 

(K)

 

404,670

 

13,536,367

 

 

2,379,128

 

404,670

 

15,915,494

 

16,320,164

 

(6,059,151

)

1986

 

30 Years

 

Arbors of Hickory Hollow

 

Antioch, TN

 

(K)

 

202,985

 

6,937,209

 

 

2,816,341

 

202,985

 

9,753,550

 

9,956,535

 

(4,389,308

)

1986

 

30 Years

 

Arbors of Las Colinas

 

Irving, TX

 

 

1,663,900

 

14,977,080

 

 

2,568,765

 

1,663,900

 

17,545,845

 

19,209,745

 

(6,758,807

)

1984/85

 

30 Years

 

Artisan Square

 

Northridge, CA

 

 

7,000,000

 

20,562,359

 

 

44,551

 

7,000,000

 

20,606,910

 

27,606,910

 

(787,661

)

2002

 

30 Years

 

Ashford Hill

 

Reynoldsbury, OH

 

1,333,498

 

184,985

 

1,630,021

 

 

272,078

 

184,985

 

1,902,099

 

2,087,085

 

(351,430

)

1986

 

30 Years

 

Ashgrove (IN)

 

Indianapolis, IN

 

 

172,924

 

1,523,549

 

 

132,766

 

172,924

 

1,656,314

 

1,829,238

 

(273,423

)

1983

 

30 Years

 

Ashgrove (KY)

 

Louisville, KY

 

 

171,816

 

1,514,034

 

 

191,913

 

171,816

 

1,705,947

 

1,877,763

 

(285,453

)

1984

 

30 Years

 

Ashgrove (OH)

 

Franklin, OH

 

1,194,739

 

157,535

 

1,387,687

 

 

205,653

 

157,535

 

1,593,340

 

1,750,875

 

(280,186

)

1983

 

30 Years

 

Ashgrove I (MI)

 

Sterling Hts, MI

 

3,078,695

 

403,580

 

3,555,988

 

 

402,134

 

403,580

 

3,958,122

 

4,361,702

 

(641,497

)

1985

 

30 Years

 

Ashgrove II (MI)

 

Sterling Hts, MI

 

2,177,239

 

311,912

 

2,748,287

 

 

238,814

 

311,912

 

2,987,101

 

3,299,014

 

(470,020

)

1987

 

30 Years

 

Ashton, The

 

Corona Hills, CA

 

 

2,594,264

 

33,042,398

 

 

1,659,606

 

2,594,264

 

34,702,004

 

37,296,268

 

(7,835,651

)

1986

 

30 Years

 

Aspen Crossing

 

Silver Spring, MD

 

 

2,880,000

 

8,551,377

 

 

960,995

 

2,880,000

 

9,512,372

 

12,392,372

 

(1,922,936

)

1979

 

30 Years

 

Astorwood (REIT)

 

Stuart, FL

 

1,559,665

 

233,150

 

2,098,338

 

 

272,479

 

233,150

 

2,370,818

 

2,603,968

 

(274,020

)

1983

 

30 Years

 

Audubon Village

 

Tampa, FL

 

 

3,576,000

 

26,121,909

 

 

915,092

 

3,576,000

 

27,037,001

 

30,613,001

 

(5,418,687

)

1990

 

30 Years

 

Autumn Cove

 

Lithonia, GA

 

 

187,220

 

1,649,515

 

 

118,326

 

187,220

 

1,767,841

 

1,955,061

 

(286,946

)

1985

 

30 Years

 

Auvers Village

 

Orlando, FL

 

 

3,840,000

 

29,322,243

 

 

1,882,818

 

3,840,000

 

31,205,060

 

35,045,060

 

(6,125,041

)

1991

 

30 Years

 

Avon Place

 

Avon,CT

 

(P)

 

1,788,943

 

12,323,920

 

 

156,590

 

1,788,943

 

12,480,510

 

14,269,454

 

(1,426,271

)

1973

 

30 Years

 

Balaton Condominium, LLC

 

Seattle, WA

 

 

 

654,550

 

6,073,987

 

 

609,467

 

654,550

 

6,683,454

 

7,338,004

 

(1,447,780

)

1991

 

30 Years

 

Balcones Club

 

Austin, TX

 

 

2,185,500

 

10,119,232

 

 

1,447,896

 

2,185,500

 

11,567,127

 

13,752,627

 

(2,981,654

)

1984

 

30 Years

 

Barcelona Condominium, LLC

 

Scottsdale, AZ

 

 

 

1,156,886

 

6,699,584

 

 

948,140

 

1,156,886

 

7,647,723

 

8,804,609

 

(1,487,393

)

1983

 

30 Years

 

Barrington

 

Clarkston, GA

 

965,951

 

144,459

 

1,272,842

 

 

213,638

 

144,459

 

1,486,480

 

1,630,939

 

(246,965

)

1984

 

30 Years

 

Bay Ridge

 

San Pedro, CA

 

 

2,401,300

 

2,176,963

 

 

332,648

 

2,401,300

 

2,509,611

 

4,910,911

 

(654,454

)

1987

 

30 Years

 

Bayside at the Islands

 

Gilbert, AZ

 

 

3,306,484

 

15,573,006

 

 

1,081,961

 

3,306,484

 

16,654,967

 

19,961,451

 

(3,890,055

)

1989

 

30 Years

 

Beach Club

 

Fort Myers, FL

 

 

2,080,000

 

14,800,928

 

 

1,443,661

 

2,080,000

 

16,244,589

 

18,324,589

 

(3,379,435

)

1990

 

30 Years

 

Beckford Place (IN)

 

New Castle, IN

 

678,878

 

99,046

 

872,702

 

 

140,699

 

99,046

 

1,013,401

 

1,112,447

 

(171,254

)

1984

 

30 Years

 

Beckford Place (Pla)

 

The Plains, OH

 

 

161,161

 

1,420,002

 

 

163,521

 

161,161

 

1,583,523

 

1,744,684

 

(259,990

)

1982

 

30 Years

 

Beckford Place I (OH)

 

N Canton, OH

 

 

168,426

 

1,484,248

 

 

203,219

 

168,426

 

1,687,467

 

1,855,893

 

(283,649

)

1983

 

30 Years

 

Beckford Place II (OH)

 

N Canton, OH

 

 

172,134

 

1,516,691

 

 

133,866

 

172,134

 

1,650,557

 

1,822,691

 

(265,118

)

1985

 

30 Years

 

Bel Aire I

 

Miami, FL

 

 

188,343

 

1,658,995

 

 

230,005

 

188,343

 

1,889,001

 

2,077,343

 

(313,797

)

1985

 

30 Years

 

Bel Aire II

 

Miami, FL

 

 

136,416

 

1,201,075

 

 

178,206

 

136,416

 

1,379,281

 

1,515,698

 

(228,708

)

1986

 

30 Years

 

Bell Road I & II

 

Nashville, TN

 

 

3,100,000

 

1,120,214

 

 

 

3,100,000

 

1,120,214

 

4,220,214

 

 

(F)

 

30 Years

 

Bellevue Meadows

 

Bellevue, WA

 

 

4,507,100

 

12,574,814

 

 

517,895

 

4,507,100

 

13,092,709

 

17,599,809

 

(2,660,846

)

1983

 

30 Years

 

Belmont Crossing

 

Riverdale, GA

 

 

1,580,000

 

18,449,045

 

 

928,857

 

1,580,000

 

19,377,902

 

20,957,902

 

(3,743,496

)

1988

 

30 Years

 

Beneva Place

 

Sarasota, FL

 

8,700,000

 

1,344,000

 

9,665,447

 

 

461,730

 

1,344,000

 

10,127,176

 

11,471,176

 

(2,033,316

)

1986

 

30 Years

 

 

S - 1



 

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest
Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

Bermuda Cove

 

Jacksonville, FL

 

 

1,503,000

 

19,561,896

 

 

1,098,422

 

1,503,000

 

20,660,318

 

22,163,318

 

(4,066,923

)

1989

 

30 Years

 

Berry Pines

 

Milton, FL

 

 

154,086

 

1,299,939

 

 

300,396

 

154,086

 

1,600,334

 

1,754,420

 

(319,237

)

1985

 

30 Years

 

Bishop Park

 

Winter Park, FL

 

 

2,592,000

 

17,990,436

 

 

1,783,145

 

2,592,000

 

19,773,581

 

22,365,581

 

(4,171,714

)

1991

 

30 Years

 

Blue Swan

 

San Antonio, TX

 

 

1,425,500

 

7,591,292

 

 

902,277

 

1,425,500

 

8,493,569

 

9,919,069

 

(2,253,308

)

1985-1994

 

30 Years

 

Blueberry Hill I

 

Leesburg, FL

 

 

140,370

 

1,236,710

 

 

139,490

 

140,370

 

1,376,200

 

1,516,570

 

(250,123

)

1986

 

30 Years

 

Bourbon Square

 

Palatine, IL

 

 

3,899,744

 

35,113,276

 

 

7,105,768

 

3,899,744

 

42,219,044

 

46,118,788

 

(16,733,128

)

1984-87

 

30 Years

 

Bradford Apartments

 

Newington, CT

 

(P)

 

401,091

 

2,681,210

 

 

145,061

 

401,091

 

2,826,271

 

3,227,362

 

(345,758

)

1964

 

30 Years

 

Bramblewood

 

San Jose, CA

 

 

5,190,700

 

9,659,184

 

 

357,254

 

5,190,700

 

10,016,438

 

15,207,138

 

(2,039,368

)

1986

 

30 Years

 

Branchwood

 

Winter Park, FL

 

 

324,069

 

2,855,397

 

 

404,748

 

324,069

 

3,260,145

 

3,584,214

 

(560,089

)

1981

 

30 Years

 

Brandon Court

 

Bloomington, IN

 

 

170,636

 

1,503,487

 

 

328,590

 

170,636

 

1,832,077

 

2,002,712

 

(340,335

)

1984

 

30 Years

 

Brentwood

 

Vancouver, WA

 

 

1,357,221

 

12,202,521

 

 

1,563,872

 

1,357,221

 

13,766,393

 

15,123,615

 

(4,637,448

)

1990

 

30 Years

 

Breton Mill

 

Houston, TX

 

 

212,820

 

8,547,263

 

 

1,467,570

 

212,820

 

10,014,833

 

10,227,653

 

(3,855,528

)

1986

 

30 Years

 

Briar Knoll Apts

 

Vernon, CT

 

5,834,372

 

928,972

 

6,209,988

 

 

304,961

 

928,972

 

6,514,949

 

7,443,921

 

(802,789

)

1986

 

30 Years

 

Briarwood (CA)

 

Sunnyvale, CA

 

13,461,081

 

9,991,500

 

22,247,278

 

 

488,678

 

9,991,500

 

22,735,957

 

32,727,457

 

(4,343,874

)

1985

 

30 Years

 

Bridford Lakes II

 

Greensboro, NC

 

 

1,100,564

 

792,509

 

 

 

1,100,564

 

792,509

 

1,893,073

 

 

(F)

 

30 Years

 

Bridgeport

 

Raleigh, NC

 

 

1,296,700

 

11,666,278

 

 

1,182,417

 

1,296,700

 

12,848,695

 

14,145,395

 

(4,916,622

)

1990

 

30 Years

 

Bridgewater at Wells Crossing

 

Orange Park, FL

 

 

2,160,000

 

13,347,549

 

 

849,503

 

2,160,000

 

14,197,052

 

16,357,052

 

(2,251,321

)

1986

 

30 Years

 

Brierwood

 

Jacksonville, FL

 

 

551,900

 

4,965,856

 

 

1,476,043

 

551,900

 

6,441,899

 

6,993,799

 

(2,244,946

)

1974

 

30 Years

 

Brittany Square

 

Tulsa, OK

 

 

 

625,000

 

4,050,961

 

 

1,546,569

 

625,000

 

5,597,530

 

6,222,530

 

(3,733,120

)

1982

 

30 Years

 

Broadview Oaks (REIT)

 

Pensacola, FL

 

1,809,495

 

201,000

 

1,809,185

 

 

197,489

 

201,000

 

2,006,674

 

2,207,674

 

(245,150

)

1985

 

30 Years

 

Broadway

 

Garland, TX

 

5,808,011

 

1,443,700

 

7,790,989

 

 

1,210,692

 

1,443,700

 

9,001,681

 

10,445,381

 

(2,269,253

)

1983

 

30 Years

 

Brookdale Village

 

Naperville, IL

 

10,820,000

 

3,276,000

 

16,293,471

 

 

1,082,861

 

3,276,000

 

17,376,332

 

20,652,332

 

(2,981,490

)

1986

 

30 Years

 

Brookridge

 

Centreville, VA

 

 

2,521,500

 

16,003,839

 

 

1,029,607

 

2,521,500

 

17,033,446

 

19,554,946

 

(4,016,440

)

1989

 

30 Years

 

Brookside (CO)

 

Boulder, CO

 

 

3,600,400

 

10,211,159

 

 

318,889

 

3,600,400

 

10,530,048

 

14,130,448

 

(2,148,149

)

1993

 

30 Years

 

Brookside (MD)

 

Frederick, MD

 

8,170,000

 

2,736,000

 

7,934,517

 

 

852,542

 

2,736,000

 

8,787,059

 

11,523,059

 

(1,679,672

)

1993

 

30 Years

 

Brookside Crossing I

 

Stockton, CA

 

5,239,175

 

625,000

 

4,656,691

 

 

568,790

 

625,000

 

5,225,481

 

5,850,481

 

(534,805

)

1981

 

30 Years

 

Brookside Crossing II

 

Stockton, CA

 

4,285,825

 

770,000

 

4,210,036

 

 

707,853

 

770,000

 

4,917,889

 

5,687,889

 

(574,762

)

1981

 

30 Years

 

Brookside II (MD)

 

Frederick, MD

 

 

2,450,800

 

6,913,202

 

 

929,490

 

2,450,800

 

7,842,693

 

10,293,493

 

(1,906,744

)

1979

 

30 Years

 

Brooksyde Apts

 

West Hartford, CT

 

(P)

 

594,711

 

3,975,523

 

 

256,282

 

594,711

 

4,231,805

 

4,826,516

 

(515,781

)

1945

 

30 Years

 

Burgundy Studios

 

Middletown, CT

 

(P)

 

395,238

 

2,642,087

 

 

169,797

 

395,238

 

2,811,883

 

3,207,122

 

(371,528

)

1973

 

30 Years

 

Burwick Farms

 

Howell, MI

 

(Q)

 

1,104,600

 

9,932,207

 

 

707,547

 

1,104,600

 

10,639,754

 

11,744,354

 

(2,660,179

)

1991

 

30 Years

 

Cambridge at Hickory Hollow

 

Antioch, TN

 

(J)

 

3,240,800

 

17,900,033

 

 

880,952

 

3,240,800

 

18,780,985

 

22,021,785

 

(4,439,332

)

1997

 

30 Years

 

Cambridge Commons I

 

Indianapolis, IN

 

 

179,139

 

1,578,077

 

 

407,542

 

179,139

 

1,985,619

 

2,164,758

 

(406,646

)

1986

 

30 Years

 

Cambridge Commons II

 

Indianapolis, IN

 

827,229

 

141,845

 

1,249,511

 

 

306,740

 

141,845

 

1,556,251

 

1,698,096

 

(311,842

)

1987

 

30 Years

 

Cambridge Commons III

 

Indianapolis, IN

 

 

98,125

 

864,738

 

 

266,590

 

98,125

 

1,131,328

 

1,229,453

 

(243,765

)

1988

 

30 Years

 

Cambridge Estates

 

Norwich,CT

 

 

590,185

 

3,945,265

 

 

189,836

 

590,185

 

4,135,101

 

4,725,286

 

(503,297

)

1977

 

30 Years

 

Camellero

 

Scottsdale, AZ

 

 

1,924,900

 

17,324,593

 

 

3,796,150

 

1,924,900

 

21,120,743

 

23,045,643

 

(7,795,677

)

1979

 

30 Years

 

Camellia Court I (Col)

 

Columbus, OH

 

 

133,059

 

1,172,393

 

 

180,483

 

133,059

 

1,352,875

 

1,485,934

 

(244,056

)

1981

 

30 Years

 

Camellia Court I (Day)

 

Dayton, OH

 

1,039,326

 

131,858

 

1,162,066

 

 

191,240

 

131,858

 

1,353,305

 

1,485,164

 

(257,012

)

1981

 

30 Years

 

Camellia Court II (Col)

 

Columbus, OH

 

896,525

 

118,421

 

1,043,417

 

 

200,774

 

118,421

 

1,244,191

 

1,362,611

 

(207,478

)

1984

 

30 Years

 

Camellia Court II (Day)

 

Dayton, OH

 

 

131,571

 

1,159,283

 

 

127,075

 

131,571

 

1,286,358

 

1,417,929

 

(222,401

)

1982

 

30 Years

 

Candlelight I

 

Brooksville, FL

 

573,308

 

105,000

 

925,167

 

 

123,316

 

105,000

 

1,048,483

 

1,153,483

 

(188,127

)

1982

 

30 Years

 

Candlelight II

 

Brooksville, FL

 

565,582

 

95,061

 

837,593

 

 

145,385

 

95,061

 

982,978

 

1,078,039

 

(189,738

)

1985

 

30 Years

 

Canterbury

 

Germantown, MD

 

31,680,000

 

2,781,300

 

28,442,498

 

 

2,577,530

 

2,781,300

 

31,020,028

 

33,801,328

 

(10,154,720

)

1986

 

30 Years

 

Canterbury Crossings

 

Lake Mary, FL

 

 

273,671

 

2,411,538

 

 

133,225

 

273,671

 

2,544,762

 

2,818,433

 

(416,515

)

1983

 

30 Years

 

Canyon Creek (CA)

 

San Ramon, CA

 

28,000,000

 

5,425,000

 

16,989,210

 

 

612,263

 

5,425,000

 

17,601,473

 

23,026,473

 

(1,803,650

)

1984

 

30 Years

 

Canyon Crest

 

Santa Clarita, CA

 

 

2,370,000

 

10,141,878

 

 

606,409

 

2,370,000

 

10,748,288

 

13,118,288

 

(1,966,118

)

1993

 

30 Years

 

Canyon Ridge

 

San Diego, CA

 

 

4,869,448

 

11,955,064

 

 

632,380

 

4,869,448

 

12,587,443

 

17,456,891

 

(2,816,007

)

1989

 

30 Years

 

Capital Ridge (REIT)

 

Tallahassee, FL

 

 

177,900

 

1,601,157

 

 

161,004

 

177,900

 

1,762,161

 

1,940,061

 

(204,209

)

1983

 

30 Years

 

Carlyle

 

Dallas, TX

 

8,390,752

 

1,890,000

 

14,148,059

 

 

54,824

 

1,890,000

 

14,202,883

 

16,092,883

 

(165,951

)

1993

 

30 Years

 

Carlyle Mill

 

Alexandria, VA

 

 

10,000,000

 

51,368,058

 

 

30,760

 

10,000,000

 

51,398,819

 

61,398,819

 

(1,041,988

)

2002

 

30 Years

 

Carmel Terrace

 

San Diego, CA

 

 

2,288,300

 

20,596,281

 

 

1,293,270

 

2,288,300

 

21,889,550

 

24,177,850

 

(7,227,950

)

1988-89

 

30 Years

 

Carriage Hill

 

Dublin, GA

 

 

131,911

 

1,162,577

 

 

91,057

 

131,911

 

1,253,634

 

1,385,544

 

(213,594

)

1985

 

30 Years

 

Casa Capricorn

 

San Diego, CA

 

 

1,262,700

 

11,365,093

 

 

1,523,245

 

1,262,700

 

12,888,338

 

14,151,038

 

(3,411,549

)

1981

 

30 Years

 

Casa Ruiz

 

San Diego, CA

 

 

3,922,400

 

9,389,153

 

 

1,416,601

 

3,922,400

 

10,805,755

 

14,728,155

 

(2,564,185

)

1976-1986

 

30 Years

 

Cascade at Landmark

 

Alexandria, VA

 

 

3,603,400

 

19,657,554

 

 

1,915,252

 

3,603,400

 

21,572,805

 

25,176,205

 

(5,242,514

)

1990

 

30 Years

 

Catalina Shores

 

Las Vegas, NV

 

 

1,227,000

 

11,042,867

 

 

1,278,659

 

1,227,000

 

12,321,525

 

13,548,525

 

(4,390,501

)

1989

 

30 Years

 

Cedar Glen

 

Reading, MA

 

3,829,887

 

1,248,505

 

8,346,003

 

 

225,439

 

1,248,505

 

8,571,442

 

9,819,947

 

(984,283

)

1980

 

30 Years

 

Cedar Hill

 

Knoxville, TN

 

1,413,125

 

204,792

 

1,804,444

 

 

167,656

 

204,792

 

1,972,100

 

2,176,892

 

(340,934

)

1986

 

30 Years

 

Cedargate (GA)

 

Lawrenceville, GA

 

 

205,043

 

1,806,656

 

 

117,345

 

205,043

 

1,924,002

 

2,129,045

 

(297,592

)

1983

 

30 Years

 

Cedargate (MI)

 

Michigan City, IN

 

756,761

 

120,378

 

1,060,663

 

 

117,564

 

120,378

 

1,178,226

 

1,298,605

 

(196,786

)

1983

 

30 Years

 

Cedargate (She)

 

Shelbyville, KY

 

1,121,367

 

158,685

 

1,398,041

 

 

210,089

 

158,685

 

1,608,129

 

1,766,815

 

(265,925

)

1984

 

30 Years

 

Cedargate I (Cla)

 

Clayton, OH

 

1,170,576

 

159,599

 

1,406,493

 

 

203,512

 

159,599

 

1,610,005

 

1,769,604

 

(283,582

)

1984

 

30 Years

 

Cedargate I (IN)

 

Bloomington, IN

 

 

191,650

 

1,688,648

 

 

192,915

 

191,650

 

1,881,564

 

2,073,214

 

(329,010

)

1983

 

30 Years

 

Cedargate I (OH)

 

Lancaster, OH

 

2,178,669

 

240,587

 

2,119,432

 

 

335,895

 

240,587

 

2,455,327

 

2,695,914

 

(431,492

)

1982

 

30 Years

 

Cedargate II (IN)

 

Bloomington, IN

 

 

165,041

 

1,454,189

 

 

133,663

 

165,041

 

1,587,851

 

1,752,892

 

(273,753

)

1985

 

30 Years

 

Cedargate II (OH)

 

Lancaster, OH

 

678,066

 

87,618

 

771,912

 

 

107,351

 

87,618

 

879,263

 

966,881

 

(164,259

)

1983

 

30 Years

 

Cedarwood I (FL)

 

Ocala, FL

 

104,000

 

119,470

 

1,052,657

 

 

173,223

 

119,470

 

1,225,880

 

1,345,350

 

(224,513

)

1978

 

30 Years

 

Cedarwood I (IN)

 

Goshen, IN

 

1,813,591

 

251,745

 

2,218,126

 

 

313,959

 

251,745

 

2,532,085

 

2,783,830

 

(438,488

)

1983/84

 

30 Years

 

Cedarwood I (KY)

 

Lexington, KY

 

 

106,681

 

939,874

 

 

177,739

 

106,681

 

1,117,614

 

1,224,294

 

(214,436

)

1984

 

30 Years

 

Cedarwood II (FL)

 

Ocala, FL

 

 

98,372

 

866,769

 

 

74,262

 

98,372

 

941,031

 

1,039,403

 

(165,376

)

1980

 

30 Years

 

Cedarwood II (KY)

 

Lexington, KY

 

969,000

 

106,724

 

940,357

 

 

163,842

 

106,724

 

1,104,198

 

1,210,923

 

(210,795

)

1986

 

30 Years

 

Cedarwood III (KY)

 

Lexington, KY

 

 

102,491

 

902,659

 

 

115,504

 

102,491

 

1,018,163

 

1,120,654

 

(186,443

)

1986

 

30 Years

 

 

S - 2



 

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest
Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

CenterPointe

 

Beaverton, OR

 

 

3,432,000

 

15,708,853

 

 

1,826,461

 

3,432,000

 

17,535,313

 

20,967,313

 

(1,315,782

)

1996

 

30 Years

 

Centre Club

 

Ontario, CA

 

 

5,616,000

 

23,485,891

 

 

925,517

 

5,616,000

 

24,411,408

 

30,027,408

 

(2,895,879

)

1994

 

30 Years

 

Centre Club II

 

Ontario, CA

 

 

1,820,000

 

9,528,898

 

 

17,424

 

1,820,000

 

9,546,322

 

11,366,322

 

(544,431

)

2002

 

30 Years

 

Centre Lake III

 

Miami, FL

 

 

685,601

 

6,039,979

 

 

820,499

 

685,601

 

6,860,478

 

7,546,080

 

(1,133,451

)

1986

 

30 Years

 

Champion Oaks

 

Houston, TX

 

 

931,900

 

8,389,394

 

 

1,192,017

 

931,900

 

9,581,411

 

10,513,311

 

(3,503,621

)

1984

 

30 Years

 

Chandler Court

 

Chandler, AZ

 

 

1,353,100

 

12,175,173

 

 

2,113,107

 

1,353,100

 

14,288,279

 

15,641,379

 

(4,809,590

)

1987

 

30 Years

 

Chantecleer Lakes

 

Naperville, IL

 

(R)

 

6,689,400

 

16,332,279

 

 

1,515,130

 

6,689,400

 

17,847,409

 

24,536,809

 

(4,271,800

)

1986

 

30 Years

 

Charing Cross

 

Bowling Green, OH

 

 

154,584

 

1,362,057

 

 

174,728

 

154,584

 

1,536,785

 

1,691,370

 

(266,181

)

1978

 

30 Years

 

Chartwell Court

 

Houston, TX

 

 

1,215,700

 

12,801,855

 

 

635,765

 

1,215,700

 

13,437,620

 

14,653,320

 

(2,979,623

)

1995

 

30 Years

 

Chatelaine Park

 

Duluth, GA

 

 

1,818,000

 

24,489,671

 

 

652,454

 

1,818,000

 

25,142,125

 

26,960,125

 

(4,748,342

)

1995

 

30 Years

 

Chelsea Square

 

Redmond, WA

 

 

3,397,100

 

9,289,074

 

 

358,099

 

3,397,100

 

9,647,173

 

13,044,273

 

(1,949,277

)

1991

 

30 Years

 

Cherry Creek I,II,&III (TN)

 

Hermitage, TN

 

 

2,942,345

 

45,725,245

 

 

1,039,844

 

2,942,345

 

46,765,088

 

49,707,434

 

(8,082,409

)

1986/96

 

30 Years

 

Cherry Creek IV

 

Hermitage, TN

 

 

 

1,593

 

 

 

 

1,593

 

1,593

 

 

(F)

 

30 Years

 

Cherry Glen I

 

Indianapolis, IN

 

2,976,150

 

335,596

 

2,957,360

 

 

368,624

 

335,596

 

3,325,984

 

3,661,580

 

(607,889

)

1986/87

 

30 Years

 

Cherry Tree

 

Rosedale, MD

 

 

352,003

 

3,101,017

 

 

278,403

 

352,003

 

3,379,420

 

3,731,422

 

(563,128

)

1986

 

30 Years

 

Chestnut Glen

 

Abington, MA

 

5,560,074

 

1,178,965

 

7,881,139

 

 

209,098

 

1,178,965

 

8,090,237

 

9,269,202

 

(959,305

)

1983

 

30 Years

 

Chestnut Hills

 

Puyallup, WA

 

 

756,300

 

6,806,635

 

 

744,202

 

756,300

 

7,550,837

 

8,307,137

 

(1,937,398

)

1991

 

30 Years

 

Chickasaw Crossing

 

Orlando, FL

 

11,673,599

 

2,044,000

 

12,366,832

 

 

723,581

 

2,044,000

 

13,090,414

 

15,134,414

 

(2,622,770

)

1986

 

30 Years

 

Chimneys

 

Charlotte, NC

 

 

907,100

 

8,154,674

 

 

773,008

 

907,100

 

8,927,682

 

9,834,782

 

(2,367,424

)

1974

 

30 Years

 

Cierra Crest

 

Denver, CO

 

(R)

 

4,803,100

 

34,894,898

 

 

1,065,612

 

4,803,100

 

35,960,510

 

40,763,610

 

(7,848,621

)

1996

 

30 Years

 

Cimarron Ridge

 

Aurora, CO

 

 

1,591,100

 

14,320,031

 

 

1,940,643

 

1,591,100

 

16,260,674

 

17,851,774

 

(4,529,297

)

1984

 

30 Years

 

Claire Point

 

Jacksonville, FL

 

 

2,048,000

 

14,649,393

 

 

791,279

 

2,048,000

 

15,440,672

 

17,488,672

 

(3,153,258

)

1986

 

30 Years

 

Clarendon Centre

 

Arlington, VA (G)

 

 

10,500,000

 

52,952,770

 

 

11,059

 

10,500,000

 

52,963,829

 

63,463,829

 

(516,502

)

2003

 

30 Years

 

Clarion

 

Decatur, GA

 

 

1,504,300

 

13,537,919

 

 

731,482

 

1,504,300

 

14,269,401

 

15,773,701

 

(3,246,928

)

1990

 

30 Years

 

Clarys Crossing

 

Columbia, MD

 

 

891,000

 

15,489,721

 

 

753,285

 

891,000

 

16,243,006

 

17,134,006

 

(3,143,442

)

1984

 

30 Years

 

Classic, The

 

Stamford, CT

 

 

2,883,500

 

20,336,721

 

 

1,754,485

 

2,883,500

 

22,091,206

 

24,974,706

 

(5,087,375

)

1990

 

30 Years

 

Clearview I

 

Greenwood, IN

 

12,735

 

182,206

 

1,605,429

 

 

204,412

 

182,206

 

1,809,841

 

1,992,047

 

(330,895

)

1986

 

30 Years

 

Clearview II

 

Greenwood, IN

 

 

226,963

 

1,999,792

 

 

153,835

 

226,963

 

2,153,627

 

2,380,590

 

(370,478

)

1987

 

30 Years

 

Clearwater

 

Eastlake, OH

 

1,008,377

 

128,303

 

1,130,691

 

 

133,246

 

128,303

 

1,263,937

 

1,392,240

 

(210,247

)

1986

 

30 Years

 

Club at Tanasbourne

 

Hillsboro, OR

 

(Q)

 

3,521,300

 

16,257,934

 

 

1,542,767

 

3,521,300

 

17,800,702

 

21,322,002

 

(4,795,926

)

1990

 

30 Years

 

Club at the Green

 

Beaverton, OR

 

 

2,030,950

 

12,616,747

 

 

1,640,750

 

2,030,950

 

14,257,497

 

16,288,447

 

(3,691,780

)

1991

 

30 Years

 

Coach Lantern

 

Scarborough, ME

 

 

452,900

 

4,405,723

 

 

407,354

 

452,900

 

4,813,077

 

5,265,977

 

(1,124,765

)

1971/1981

 

30 Years

 

Coachlight Village

 

Agawam, MA

 

(P)

 

501,726

 

3,353,933

 

 

104,031

 

501,726

 

3,457,964

 

3,959,690

 

(419,501

)

1967

 

30 Years

 

Coachman Trails

 

Plymouth, MN

 

6,186,215

 

1,227,000

 

9,517,381

 

 

685,934

 

1,227,000

 

10,203,314

 

11,430,314

 

(2,190,215

)

1987

 

30 Years

 

Cobblestone Village

 

Fresno, CA

 

6,000,000

 

315,000

 

5,061,625

 

 

644,131

 

315,000

 

5,705,756

 

6,020,756

 

(674,109

)

1983

 

30 Years

 

Coconut Palm Club

 

Coconut Creek, GA

 

 

3,001,700

 

17,678,928

 

 

920,044

 

3,001,700

 

18,598,972

 

21,600,672

 

(3,945,397

)

1992

 

30 Years

 

Colinas Pointe

 

Denver, CO

 

 

1,587,400

 

14,285,902

 

 

817,668

 

1,587,400

 

15,103,570

 

16,690,970

 

(3,732,984

)

1986

 

30 Years

 

Collier Ridge

 

Atlanta, GA

 

 

5,100,000

 

20,425,822

 

 

1,936,841

 

5,100,000

 

22,362,663

 

27,462,663

 

(4,193,363

)

1980

 

30 Years

 

Colonial Village

 

Plainville,CT

 

(P)

 

693,575

 

4,636,410

 

 

372,972

 

693,575

 

5,009,382

 

5,702,957

 

(610,624

)

1968

 

30 Years

 

Concord Square (IN)

 

Kokomo, IN

 

 

123,247

 

1,085,962

 

 

143,899

 

123,247

 

1,229,861

 

1,353,108

 

(208,753

)

1983

 

30 Years

 

Concord Square I (OH)

 

Mansfield, OH

 

 

164,124

 

1,446,313

 

 

224,923

 

164,124

 

1,671,236

 

1,835,361

 

(280,823

)

1981/83

 

30 Years

 

Conway Court

 

Roslindale, MA

 

437,330

 

101,451

 

678,181

 

 

55,713

 

101,451

 

733,893

 

835,345

 

(93,202

)

1920

 

30 Years

 

Conway Station

 

Orlando, FL

 

 

1,936,000

 

10,852,858

 

 

705,999

 

1,936,000

 

11,558,857

 

13,494,857

 

(2,346,079

)

1987

 

30 Years

 

Copper Canyon

 

Highlands Ranch, CO

 

(O)

 

1,443,000

 

16,251,114

 

 

260,957

 

1,443,000

 

16,512,071

 

17,955,071

 

(2,850,931

)

1999

 

30 Years

 

Copper Creek

 

Tempe, AZ

 

 

1,017,400

 

9,148,068

 

 

761,019

 

1,017,400

 

9,909,087

 

10,926,487

 

(2,523,464

)

1984

 

30 Years

 

Copper Terrace

 

Orlando, FL

 

 

1,200,000

 

17,887,868

 

 

1,238,240

 

1,200,000

 

19,126,109

 

20,326,109

 

(3,846,952

)

1989

 

30 Years

 

Country Brook

 

Chandler, AZ

 

 

1,505,219

 

29,542,535

 

 

1,200,948

 

1,505,219

 

30,743,483

 

32,248,702

 

(6,799,223

)

1986-1996

 

30 Years

 

Country Club Place (FL)

 

Pembroke Pines, FL

 

 

912,000

 

10,016,543

 

 

815,674

 

912,000

 

10,832,217

 

11,744,217

 

(2,253,223

)

1987

 

30 Years

 

Country Club Village

 

Mill Creek, WA

 

 

1,150,500

 

10,352,179

 

 

810,551

 

1,150,500

 

11,162,730

 

12,313,230

 

(2,821,696

)

1991

 

30 Years

 

Country Club Woods

 

Mobile, AL (T)

 

4,205,983

 

230,091

 

5,561,464

 

 

612,245

 

230,091

 

6,173,709

 

6,403,799

 

(1,132,172

)

1975

 

30 Years

 

Country Gables

 

Beaverton, OR

 

7,381,733

 

1,580,500

 

14,215,444

 

 

2,287,624

 

1,580,500

 

16,503,067

 

18,083,567

 

(4,375,022

)

1991

 

30 Years

 

Country Gables II

 

Beaverton, OR

 

 

1,200,000

 

4,006

 

 

 

1,200,000

 

4,006

 

1,204,006

 

 

(F)

 

30 Years

 

Country Oaks

 

Agoura Hills, CA

 

29,412,000

 

6,105,000

 

19,963,237

 

 

467,023

 

6,105,000

 

20,430,260

 

26,535,260

 

(2,038,331

)

1985

 

30 Years

 

Country Ridge

 

Farmington Hills, MI

 

(J)

 

1,621,950

 

14,596,964

 

 

1,855,357

 

1,621,950

 

16,452,321

 

18,074,271

 

(4,746,860

)

1986

 

30 Years

 

Countryside I

 

Daytona Beach, FL

 

 

136,665

 

1,204,164

 

 

329,527

 

136,665

 

1,533,691

 

1,670,355

 

(280,401

)

1982

 

30 Years

 

Countryside II

 

Daytona Beach, FL

 

 

234,633

 

2,067,376

 

 

280,028

 

234,633

 

2,347,403

 

2,582,036

 

(393,407

)

1982

 

30 Years

 

Countryside III (REIT)

 

Daytona Beach, FL

 

 

80,000

 

719,868

 

 

95,039

 

80,000

 

814,907

 

894,907

 

(94,339

)

1983

 

30 Years

 

Countryside Manor

 

Douglasville, GA

 

 

298,186

 

2,627,348

 

 

264,826

 

298,186

 

2,892,174

 

3,190,360

 

(497,052

)

1985

 

30 Years

 

Cove at Fishers Landing

 

Vancouver, WA

 

 

2,277,000

 

15,656,887

 

 

213,817

 

2,277,000

 

15,870,703

 

18,147,703

 

(969,356

)

1993

 

30 Years

 

Coventry at Cityview

 

Fort Worth, TX

 

 

2,160,000

 

23,072,847

 

 

893,443

 

2,160,000

 

23,966,290

 

26,126,290

 

(4,602,705

)

1996

 

30 Years

 

Creekside (San Mateo)

 

San Mateo, CA

 

(R)

 

9,606,600

 

21,193,232

 

 

567,483

 

9,606,600

 

21,760,715

 

31,367,315

 

(4,309,404

)

1985

 

30 Years

 

Creekside Homes at Legacy

 

Plano. TX

 

 

4,560,000

 

32,275,748

 

 

716,908

 

4,560,000

 

32,992,656

 

37,552,656

 

(6,191,080

)

1998

 

30 Years

 

Creekside Village

 

Mountlake Terrace, WA

 

 

2,807,600

 

25,270,594

 

 

2,559,414

 

2,807,600

 

27,830,008

 

30,637,608

 

(9,547,510

)

1987

 

30 Years

 

Creekwood

 

Charlotte, NC

 

 

1,861,700

 

16,740,569

 

 

1,496,679

 

1,861,700

 

18,237,248

 

20,098,948

 

(4,405,600

)

1987-1990

 

30 Years

 

Crescent at Cherry Creek

 

Denver, CO

 

(O)

 

2,594,000

 

15,149,470

 

 

682,401

 

2,594,000

 

15,831,871

 

18,425,871

 

(3,584,024

)

1994

 

30 Years

 

Cross Creek

 

Matthews, NC

 

(R)

 

3,151,600

 

20,295,925

 

 

885,015

 

3,151,600

 

21,180,940

 

24,332,540

 

(4,527,753

)

1989

 

30 Years

 

Crosswinds

 

St. Petersburg, FL

 

 

1,561,200

 

5,756,822

 

 

1,082,122

 

1,561,200

 

6,838,944

 

8,400,144

 

(1,964,487

)

1986

 

30 Years

 

Crown Court

 

Scottsdale, AZ

 

(S)

 

3,156,600

 

28,414,599

 

 

2,134,029

 

3,156,600

 

30,548,628

 

33,705,228

 

(7,728,337

)

1987

 

30 Years

 

Crystal Village

 

Attleboro, MA

 

 

1,369,000

 

4,989,028

 

 

780,281

 

1,369,000

 

5,769,309

 

7,138,309

 

(1,439,283

)

1974

 

30 Years

 

Cypress

 

Panama City, FL

 

1,332,324

 

171,882

 

1,514,636

 

 

251,309

 

171,882

 

1,765,945

 

1,937,827

 

(316,059

)

1985

 

30 Years

 

Daniel Court

 

Cincinnati, OH

 

2,204,976

 

334,101

 

2,943,516

 

 

547,769

 

334,101

 

3,491,285

 

3,825,386

 

(663,570

)

1985

 

30 Years

 

Dartmouth Place I

 

Kent, OH

 

 

151,771

 

1,337,422

 

 

245,052

 

151,771

 

1,582,473

 

1,734,244

 

(278,331

)

1982

 

30 Years

 

Dartmouth Place II

 

Kent, OH

 

 

130,102

 

1,146,337

 

 

185,559

 

130,102

 

1,331,896

 

1,461,997

 

(218,901

)

1986

 

30 Years

 

 

S - 3



 

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest
Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

Dartmouth Woods

 

Lakewood, CO

 

(J)

 

1,609,800

 

10,832,754

 

 

759,479

 

1,609,800

 

11,592,233

 

13,202,033

 

(2,889,706

)

1990

 

30 Years

 

Dean Estates

 

Taunton, MA

 

 

498,080

 

3,329,560

 

 

159,846

 

498,080

 

3,489,406

 

3,987,486

 

(410,707

)

1984

 

30 Years

 

Dean Estates II

 

Cranston, RI

 

(P)

 

308,457

 

2,061,971

 

 

177,293

 

308,457

 

2,239,265

 

2,547,722

 

(283,697

)

1970

 

30 Years

 

Deerbrook

 

Jacksonville, FL

 

 

1,008,000

 

8,845,716

 

 

597,039

 

1,008,000

 

9,442,755

 

10,450,755

 

(1,986,256

)

1983

 

30 Years

 

Deerfield

 

Denver, CO

 

9,100,000

 

1,260,000

 

7,747,923

 

 

377,265

 

1,260,000

 

8,125,188

 

9,385,188

 

(936,656

)

1983

 

30 Years

 

Deerwood (Corona)

 

Corona, CA

 

14,015,373

 

4,742,200

 

20,272,892

 

 

1,444,874

 

4,742,200

 

21,717,766

 

26,459,966

 

(5,139,747

)

1992

 

30 Years

 

Deerwood (FL)

 

Eustis, FL

 

819,602

 

114,948

 

1,012,819

 

 

148,798

 

114,948

 

1,161,616

 

1,276,564

 

(211,385

)

1982

 

30 Years

 

Deerwood (SD)

 

San Diego, CA

 

 

2,082,095

 

18,739,815

 

 

4,172,345

 

2,082,095

 

22,912,160

 

24,994,255

 

(9,076,313

)

1990

 

30 Years

 

Defoor Village

 

Atlanta, GA

 

 

2,966,400

 

10,570,210

 

 

292,778

 

2,966,400

 

10,862,988

 

13,829,388

 

(2,210,875

)

1997

 

30 Years

 

Desert Homes

 

Phoenix, AZ

 

 

1,481,050

 

13,390,249

 

 

2,720,235

 

1,481,050

 

16,110,483

 

17,591,533

 

(4,876,686

)

1982

 

30 Years

 

Dogwood Glen I

 

Indianapolis, IN

 

1,702,607

 

240,855

 

2,122,193

 

 

243,047

 

240,855

 

2,365,241

 

2,606,095

 

(409,175

)

1986

 

30 Years

 

Dogwood Glen II

 

Indianapolis, IN

 

1,264,166

 

202,397

 

1,783,336

 

 

184,951

 

202,397

 

1,968,287

 

2,170,684

 

(347,073

)

1987

 

30 Years

 

Dos Caminos

 

Scottsdale, AZ

 

 

1,727,900

 

15,567,778

 

 

1,372,565

 

1,727,900

 

16,940,343

 

18,668,243

 

(4,405,780

)

1983

 

30 Years

 

Dover Place I

 

Eastlake, OH

 

 

244,294

 

2,152,494

 

 

233,535

 

244,294

 

2,386,029

 

2,630,323

 

(400,271

)

1982

 

30 Years

 

Dover Place II

 

Eastlake, OH

 

1,539,714

 

230,895

 

2,034,242

 

 

154,526

 

230,895

 

2,188,768

 

2,419,663

 

(348,537

)

1983

 

30 Years

 

Dover Place III

 

Eastlake, OH

 

729,517

 

119,835

 

1,055,878

 

 

57,939

 

119,835

 

1,113,817

 

1,233,652

 

(171,940

)

1983

 

30 Years

 

Dover Place IV

 

Eastlake, OH

 

1,771,685

 

261,912

 

2,307,730

 

 

127,876

 

261,912

 

2,435,605

 

2,697,517

 

(381,381

)

1986

 

30 Years

 

Driftwood

 

Atlantic Beach, FL

 

346,206

 

126,357

 

1,113,430

 

 

207,864

 

126,357

 

1,321,294

 

1,447,652

 

(249,005

)

1985

 

30 Years

 

Duraleigh Woods

 

Raleigh, NC

 

 

1,629,000

 

19,917,750

 

 

1,838,227

 

1,629,000

 

21,755,976

 

23,384,976

 

(4,514,232

)

1987

 

30 Years

 

Eagle Canyon

 

Chino Hills, CA

 

 

1,808,900

 

16,277,800

 

 

941,816

 

1,808,900

 

17,219,616

 

19,028,516

 

(4,675,780

)

1985

 

30 Years

 

East Pointe

 

Charlotte, NC

 

 

1,365,900

 

12,295,246

 

 

1,767,871

 

1,365,900

 

14,063,117

 

15,429,017

 

(5,474,277

)

1987

 

30 Years

 

Eastbridge

 

Dallas, TX

 

8,778,833

 

3,380,000

 

11,860,382

 

 

330,992

 

3,380,000

 

12,191,373

 

15,571,373

 

(1,089,357

)

1998

 

30 Years

 

Eastbridge II

 

Dallas, TX

 

 

140,000

 

 

 

 

140,000

 

 

140,000

 

 

(F)

 

30 Years

 

Edgewater

 

Bakersfield, CA

 

11,988,000

 

580,000

 

10,443,374

 

 

827,564

 

580,000

 

11,270,938

 

11,850,938

 

(1,308,911

)

1984

 

30 Years

 

Edgewood

 

Woodinville, WA

 

 

1,070,100

 

9,632,980

 

 

1,101,814

 

1,070,100

 

10,734,794

 

11,804,894

 

(3,741,531

)

1986

 

30 Years

 

Elmtree Park I

 

Indianapolis, IN

 

1,395,070

 

157,687

 

1,389,621

 

 

224,558

 

157,687

 

1,614,179

 

1,771,866

 

(304,652

)

1986

 

30 Years

 

Elmtree Park II

 

Indianapolis, IN

 

877,113

 

114,114

 

1,005,455

 

 

168,860

 

114,114

 

1,174,315

 

1,288,429

 

(223,059

)

1987

 

30 Years

 

Elmwood (GA)

 

Marietta, GA

 

 

183,756

 

1,619,095

 

 

209,343

 

183,756

 

1,828,438

 

2,012,194

 

(298,201

)

1984

 

30 Years

 

Elmwood I (FL)

 

W. Palm Beach, FL

 

316,202

 

163,389

 

1,439,632

 

 

118,753

 

163,389

 

1,558,385

 

1,721,774

 

(257,610

)

1984

 

30 Years

 

Elmwood II (FL)

 

W. Palm Beach, FL

 

1,255,588

 

179,743

 

1,582,960

 

 

114,068

 

179,743

 

1,697,029

 

1,876,772

 

(281,088

)

1984

 

30 Years

 

Emerson Place

 

Boston, MA (G)

 

 

14,855,000

 

57,566,636

 

 

10,397,420

 

14,855,000

 

67,964,056

 

82,819,056

 

(14,643,965

)

1962

 

30 Years

 

Emerson Place/CRP II

 

Boston, MA

 

 

 

683,507

 

 

 

 

683,507

 

683,507

 

 

(F)

 

30 Years

 

Enclave at Winston Park

 

Coconut Creek, FL

 

 

5,560,000

 

19,939,324

 

 

379,252

 

5,560,000

 

20,318,575

 

25,878,575

 

(1,300,224

)

1995

 

30 Years

 

Enclave, The

 

Tempe, AZ

 

(O)

 

1,500,192

 

19,281,399

 

 

421,543

 

1,500,192

 

19,702,942

 

21,203,134

 

(4,254,242

)

1994

 

30 Years

 

English Hills

 

Charlotte, NC

 

 

1,260,000

 

12,554,291

 

 

731,493

 

1,260,000

 

13,285,784

 

14,545,784

 

(2,746,260

)

1984

 

30 Years

 

Esprit Del Sol

 

Solana Beach, CA

 

 

5,111,200

 

11,910,438

 

 

652,531

 

5,111,200

 

12,562,969

 

17,674,169

 

(2,563,401

)

1986

 

30 Years

 

Essex Place

 

Overland Park, KS

 

 

1,835,400

 

16,513,586

 

 

3,707,024

 

1,835,400

 

20,220,610

 

22,056,010

 

(7,688,322

)

1970-84

 

30 Years

 

Essex Place (FL)

 

Tampa, FL

 

 

888,000

 

7,106,384

 

 

577,156

 

888,000

 

7,683,540

 

8,571,540

 

(1,599,948

)

1989

 

30 Years

 

Ethans Glen III

 

Kansas City, MO

 

2,364,258

 

246,500

 

2,223,049

 

 

191,659

 

246,500

 

2,414,708

 

2,661,208

 

(605,774

)

1990

 

30 Years

 

Ethans Ridge I

 

Kansas City, MO

 

16,216,607

 

1,948,300

 

17,573,970

 

 

3,774,105

 

1,948,300

 

21,348,075

 

23,296,375

 

(4,989,854

)

1988

 

30 Years

 

Ethans Ridge II

 

Kansas City, MO

 

10,981,324

 

1,468,135

 

13,183,141

 

 

1,123,613

 

1,468,135

 

14,306,755

 

15,774,889

 

(3,327,536

)

1990

 

30 Years

 

Fairfield

 

Stamford, CT (G)

 

 

6,510,200

 

39,690,120

 

 

782,946

 

6,510,200

 

40,473,066

 

46,983,266

 

(8,118,875

)

1996

 

30 Years

 

Fairland Gardens

 

Silver Spring, MD

 

 

6,000,000

 

19,972,183

 

 

1,675,050

 

6,000,000

 

21,647,233

 

27,647,233

 

(4,131,820

)

1981

 

30 Years

 

Farnham Park

 

Houston, TX

 

 

1,512,600

 

14,233,760

 

 

593,117

 

1,512,600

 

14,826,876

 

16,339,476

 

(3,222,268

)

1996

 

30 Years

 

Fernbrook Townhomes

 

Plymouth, MN

 

5,022,121

 

580,100

 

6,683,693

 

 

308,075

 

580,100

 

6,991,768

 

7,571,868

 

(1,373,584

)

1993

 

30 Years

 

Fireside Park

 

Rockville, MD

 

8,105,524

 

4,248,000

 

10,136,320

 

 

917,304

 

4,248,000

 

11,053,624

 

15,301,624

 

(2,166,778

)

1961

 

30 Years

 

Forest Glen

 

Pensacola, FL

 

 

161,548

 

1,423,618

 

 

244,112

 

161,548

 

1,667,730

 

1,829,278

 

(318,625

)

1986

 

30 Years

 

Forest Place

 

Tampa, FL

 

10,442,965

 

1,708,000

 

8,612,029

 

 

713,115

 

1,708,000

 

9,325,144

 

11,033,144

 

(2,042,277

)

1985

 

30 Years

 

Forest Ridge I & II

 

Arlington, TX

 

(S)

 

2,362,700

 

21,263,295

 

 

2,676,329

 

2,362,700

 

23,939,624

 

26,302,324

 

(7,489,196

)

1984/85

 

30 Years

 

Forest Village

 

Macon, GA

 

 

224,022

 

1,973,876

 

 

178,860

 

224,022

 

2,152,736

 

2,376,758

 

(367,493

)

1983

 

30 Years

 

Forsythia Court (KY)

 

Louisville, KY

 

1,806,094

 

279,450

 

2,462,187

 

 

298,343

 

279,450

 

2,760,530

 

3,039,980

 

(470,919

)

1985

 

30 Years

 

Forsythia Court (MD)

 

Abingdon, MD

 

1,978,858

 

251,955

 

2,220,100

 

 

338,493

 

251,955

 

2,558,593

 

2,810,548

 

(442,431

)

1986

 

30 Years

 

Forsythia Court II (MD)

 

Abingdon, MD

 

 

239,834

 

2,113,339

 

 

253,848

 

239,834

 

2,367,187

 

2,607,020

 

(407,886

)

1987

 

30 Years

 

Fountain Place I

 

Eden Prairie, MN

 

24,653,106

 

2,405,068

 

21,694,117

 

 

1,473,851

 

2,405,068

 

23,167,968

 

25,573,036

 

(5,247,718

)

1989

 

30 Years

 

Fountain Place II

 

Eden Prairie, MN

 

12,600,000

 

1,231,350

 

11,095,333

 

 

590,359

 

1,231,350

 

11,685,692

 

12,917,042

 

(2,590,795

)

1989

 

30 Years

 

Fountainhead I

 

San Antonio, TX

 

(M)

 

1,205,816

 

5,200,241

 

 

493,574

 

1,205,816

 

5,693,815

 

6,899,631

 

(3,523,450

)

1985/1987

 

30 Years

 

Fountainhead II

 

San Antonio, TX

 

(M)

 

1,205,817

 

4,529,801

 

 

1,118,976

 

1,205,817

 

5,648,777

 

6,854,594

 

(3,310,704

)

1985/1987

 

30 Years

 

Fountainhead III

 

San Antonio, TX

 

(M)

 

1,205,816

 

4,399,093

 

 

1,119,620

 

1,205,816

 

5,518,712

 

6,724,528

 

(3,024,645

)

1985/1987

 

30 Years

 

Fountains at Flamingo

 

Las Vegas, NV

 

 

3,183,100

 

28,650,076

 

 

2,215,600

 

3,183,100

 

30,865,675

 

34,048,775

 

(10,308,460

)

1989-91

 

30 Years

 

Four Lakes

 

Lisle, IL

 

 

1,271,723

 

7,212,717

 

 

8,731,038

 

1,271,723

 

15,943,755

 

17,215,478

 

(11,222,256

)

1968/1988

 

30 Years

 

Four Lakes 5

 

Lisle, IL

 

(M)

 

600,000

 

19,186,686

 

 

2,175,097

 

600,000

 

21,361,783

 

21,961,783

 

(11,301,501

)

1968/1988

 

30 Years

 

Four Lakes Athletic Club

 

Lisle, IL (G)

 

 

50,000

 

153,489

 

 

5,700

 

50,000

 

159,189

 

209,189

 

(22,923

)

N/A

 

30 Years

 

Four Lakes Condo, LLC Phase II

 

Lisle, IL

 

 

3,326

 

17,748

 

 

57,206

 

3,326

 

74,954

 

78,280

 

(19,629

)

1968/1988

 

30 Years

 

Four Lakes Condo, LLC Phase III

 

Lisle, IL

 

 

64,980

 

345,298

 

 

901,848

 

64,980

 

1,247,146

 

1,312,126

 

(383,491

)

1968/1988

 

30 Years

 

Four Lakes Condo, LLC Phase IV

 

Lisle, IL

 

 

192,826

 

1,006,054

 

 

2,339,103

 

192,826

 

3,345,157

 

3,537,983

 

(1,138,001

)

1968/1988

 

30 Years

 

Four Lakes Leasing Center

 

Lisle, IL (G)

 

 

50,000

 

152,815

 

 

39,397

 

50,000

 

192,212

 

242,212

 

(45,411

)

N/A

 

30 Years

 

Four Winds

 

Fall River, MA

 

(P)

 

1,370,843

 

9,163,804

 

 

333,883

 

1,370,843

 

9,497,687

 

10,868,530

 

(1,141,478

)

1987

 

30 Years

 

Fox Hill Apartments

 

Enfield, CT

 

(P)

 

1,129,018

 

7,547,256

 

 

273,807

 

1,129,018

 

7,821,063

 

8,950,082

 

(961,261

)

1974

 

30 Years

 

Fox Ridge

 

Englewood, CO

 

20,300,000

 

2,490,000

 

17,509,781

 

 

839,076

 

2,490,000

 

18,348,857

 

20,838,857

 

(1,968,797

)

1984

 

30 Years

 

Fox Run (WA)

 

Federal Way, WA

 

 

639,700

 

5,765,018

 

 

945,835

 

639,700

 

6,710,853

 

7,350,553

 

(2,486,554

)

1988

 

30 Years

 

Fox Run II (WA)

 

Federal Way, WA

 

 

80,000

 

1,285,753

 

 

74

 

80,000

 

1,285,828

 

1,365,828

 

(10,005

)

1988

 

30 Years

 

Foxcroft

 

Scarborough, ME

 

 

523,400

 

4,527,409

 

 

417,495

 

523,400

 

4,944,904

 

5,468,304

 

(1,166,433

)

1977/1979

 

30 Years

 

Foxhaven

 

Canton, OH

 

 

256,821

 

2,263,172

 

 

403,260

 

256,821

 

2,666,432

 

2,923,253

 

(467,377

)

1986

 

30 Years

 

 

S - 4



 

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest
Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

Foxton (MI)

 

Monroe, MI

 

 

156,363

 

1,377,824

 

 

150,730

 

156,363

 

1,528,554

 

1,684,916

 

(251,810

)

1983

 

30 Years

 

Foxton II (OH)

 

Dayton, OH

 

 

165,806

 

1,460,832

 

 

123,295

 

165,806

 

1,584,128

 

1,749,933

 

(277,840

)

1983

 

30 Years

 

Gables Grand Plaza

 

Coral Gables, FL (G)

 

 

 

44,550,159

 

 

(2,510

 

)

 

44,547,649

 

44,547,649

 

 

1998

 

30 Years

 

Garden Court

 

Detriot, MI

 

1,999,217

 

351,532

 

3,096,890

 

 

201,687

 

351,532

 

3,298,577

 

3,650,109

 

(528,412

)

1988

 

30 Years

 

Garden Lake

 

Riverdale, GA

 

 

1,466,900

 

13,186,716

 

 

949,830

 

1,466,900

 

14,136,546

 

15,603,446

 

(3,397,944

)

1991

 

30 Years

 

Garden Terrace I

 

Tampa, FL

 

 

93,144

 

820,699

 

 

233,484

 

93,144

 

1,054,183

 

1,147,327

 

(212,935

)

1981

 

30 Years

 

Garden Terrace II

 

Tampa, FL

 

 

97,120

 

855,730

 

 

264,195

 

97,120

 

1,119,925

 

1,217,045

 

(208,244

)

1982

 

30 Years

 

Gatehouse at Pine Lake

 

Pembroke Pines, FL

 

 

1,896,600

 

17,070,795

 

 

1,159,177

 

1,896,600

 

18,229,971

 

20,126,571

 

(4,930,504

)

1990

 

30 Years

 

Gatehouse on the Green

 

Plantation, FL

 

 

2,228,200

 

20,056,270

 

 

1,457,878

 

2,228,200

 

21,514,149

 

23,742,349

 

(5,828,531

)

1990

 

30 Years

 

Gates at Carlson Center

 

Minnetonka, MN

 

(N)

 

4,355,200

 

23,802,817

 

 

4,825,455

 

4,355,200

 

28,628,272

 

32,983,472

 

(5,993,560

)

1989

 

30 Years

 

Gates of Redmond

 

Redmond, WA

 

 

2,306,100

 

12,064,015

 

 

811,035

 

2,306,100

 

12,875,050

 

15,181,150

 

(3,056,854

)

1979

 

30 Years

 

Gateway at Malden Center

 

Malden, MA (G)

 

 

9,209,780

 

25,722,666

 

 

221,491

 

9,209,780

 

25,944,157

 

35,153,937

 

(796,146

)

1988

 

30 Years

 

Gateway Villas

 

Scottsdale, AZ

 

 

1,431,048

 

14,926,833

 

 

428,579

 

1,431,048

 

15,355,411

 

16,786,459

 

(3,339,754

)

1995

 

30 Years

 

Gatewood

 

Pleasanton, CA

 

 

6,796,511

 

20,249,622

 

 

30,273

 

6,796,511

 

20,279,896

 

27,076,407

 

(380,578

)

1985

 

30 Years

 

Geary Court Yard

 

San Francisco, CA

 

17,693,865

 

1,722,400

 

15,471,429

 

 

747,681

 

1,722,400

 

16,219,110

 

17,941,510

 

(3,609,452

)

1990

 

30 Years

 

Georgian Woods Combined (REIT)

 

Wheaton, MD

 

17,730,364

 

5,038,400

 

28,837,369

 

 

3,972,015

 

5,038,400

 

32,809,384

 

37,847,784

 

(10,176,730

)

1967

 

30 Years

 

Glastonbury Center

 

Glastonbury, CT

 

 

852,606

 

5,699,497

 

 

335,777

 

852,606

 

6,035,274

 

6,887,880

 

(740,709

)

1962

 

30 Years

 

Glen Arm Manor

 

Albany, GA

 

1,084,827

 

166,498

 

1,466,883

 

 

200,180

 

166,498

 

1,667,063

 

1,833,562

 

(289,400

)

1986

 

30 Years

 

Glen Grove

 

Wellesley, MA

 

4,384,766

 

1,344,601

 

8,988,383

 

 

261,035

 

1,344,601

 

9,249,418

 

10,594,019

 

(1,055,786

)

1979

 

30 Years

 

Glen Meadow

 

Franklin, MA

 

2,119,554

 

2,339,330

 

15,637,944

 

 

1,232,875

 

2,339,330

 

16,870,819

 

19,210,149

 

(2,136,919

)

1971

 

30 Years

 

GlenGarry Club

 

Bloomingdale, IL

 

(N)

 

3,129,700

 

15,807,889

 

 

1,405,187

 

3,129,700

 

17,213,076

 

20,342,776

 

(3,944,780

)

1989

 

30 Years

 

Glenlake

 

Glendale Heights. IL

 

14,845,000

 

5,041,700

 

16,671,970

 

 

3,753,038

 

5,041,700

 

20,425,007

 

25,466,707

 

(4,895,465

)

1988

 

30 Years

 

Glenwood Village

 

Macon, GA

 

1,028,084

 

167,779

 

1,478,614

 

 

211,635

 

167,779

 

1,690,249

 

1,858,028

 

(294,733

)

1986

 

30 Years

 

Gosnold Grove

 

East Falmouth, MA

 

626,089

 

124,296

 

830,891

 

 

92,695

 

124,296

 

923,585

 

1,047,881

 

(131,431

)

1978

 

30 Years

 

Gramercy Park

 

Houston, TX

 

 

3,957,000

 

22,075,243

 

 

868,722

 

3,957,000

 

22,943,965

 

26,900,965

 

(1,612,126

)

1998

 

30 Years

 

Granada Highlands

 

Malden, MA (G)

 

 

28,210,000

 

99,944,576

 

 

4,979,484

 

28,210,000

 

104,924,061

 

133,134,061

 

(16,150,482

)

1972

 

30 Years

 

Grand Reserve

 

Woodbury, MN

 

 

4,728,000

 

49,541,642

 

 

405,595

 

4,728,000

 

49,947,237

 

54,675,237

 

(5,255,198

)

2000

 

30 Years

 

Grandview I & II

 

Las Vegas, NV

 

 

2,333,300

 

15,527,831

 

 

1,678,550

 

2,333,300

 

17,206,381

 

19,539,681

 

(3,780,143

)

1980

 

30 Years

 

Greenbriar (AL)

 

Montgomery, AL (T)

 

1,955,138

 

94,356

 

2,051,619

 

 

148,611

 

94,356

 

2,200,230

 

2,294,585

 

(399,276

)

1979

 

30 Years

 

Greenbriar Glen

 

Altlanta, GA

 

1,426,032

 

227,701

 

2,006,246

 

 

130,859

 

227,701

 

2,137,105

 

2,364,806

 

(341,705

)

1988

 

30 Years

 

Greenfield Village

 

Rocky Hill , CT

 

 

911,534

 

6,093,418

 

 

118,291

 

911,534

 

6,211,709

 

7,123,243

 

(758,411

)

1965

 

30 Years

 

Greengate (FL)

 

W. Palm Beach, FL

 

 

2,500,000

 

1,615,859

 

 

253,002

 

2,500,000

 

1,868,860

 

4,368,860

 

(288,329

)

1987

 

30 Years

 

Greenglen (Day)

 

Dayton, OH

 

 

204,289

 

1,800,172

 

 

229,297

 

204,289

 

2,029,469

 

2,233,758

 

(351,530

)

1983

 

30 Years

 

Greenglen II (Tol)

 

Toledo, OH

 

 

162,264

 

1,429,719

 

 

116,893

 

162,264

 

1,546,612

 

1,708,876

 

(253,204

)

1982

 

30 Years

 

Greenhaven

 

Union City, CA

 

10,975,000

 

7,507,000

 

15,210,399

 

 

1,087,571

 

7,507,000

 

16,297,969

 

23,804,969

 

(3,369,270

)

1983

 

30 Years

 

Greenhouse - Frey Road

 

Kennesaw, GA

 

(M)

 

2,467,200

 

22,187,443

 

 

2,772,524

 

2,467,200

 

24,959,967

 

27,427,167

 

(8,979,451

)

1985

 

30 Years

 

Greenhouse - Holcomb Bridge

 

Alpharetta, GA

 

(M)

 

2,143,300

 

19,291,427

 

 

2,673,448

 

2,143,300

 

21,964,875

 

24,108,175

 

(8,009,439

)

1985

 

30 Years

 

Greenhouse - Roswell

 

Roswell, GA

 

(M)

 

1,220,000

 

10,974,727

 

 

1,751,899

 

1,220,000

 

12,726,626

 

13,946,626

 

(4,689,647

)

1985

 

30 Years

 

Greentree 1

 

Glen Burnie, MD

 

10,844,013

 

3,912,968

 

11,784,021

 

 

1,728,928

 

3,912,968

 

13,512,949

 

17,425,917

 

(2,661,555

)

1973

 

30 Years

 

Greentree 2

 

Glen Burnie, MD

 

 

2,700,000

 

8,246,737

 

 

839,300

 

2,700,000

 

9,086,037

 

11,786,037

 

(1,694,772

)

1973

 

30 Years

 

Greentree 3

 

Glen Burnie, MD

 

 

2,380,443

 

7,270,294

 

 

667,562

 

2,380,443

 

7,937,856

 

10,318,299

 

(1,497,480

)

1973

 

30 Years

 

Greentree I (GA) (REIT)

 

Thomasville, GA

 

644,781

 

84,750

 

762,659

 

 

72,070

 

84,750

 

834,729

 

919,479

 

(103,197

)

1983

 

30 Years

 

Greentree II (GA) (REIT)

 

Thomasville, GA

 

485,131

 

81,000

 

729,283

 

 

48,938

 

81,000

 

778,221

 

859,221

 

(93,853

)

1984

 

30 Years

 

Greystone

 

Atlanta, GA

 

 

2,252,000

 

5,204,901

 

 

1,753,999

 

2,252,000

 

6,958,900

 

9,210,900

 

(1,886,375

)

1960

 

30 Years

 

Gwinnett Crossing

 

Duluth, GA

 

 

2,632,000

 

32,016,496

 

 

2,051,565

 

2,632,000

 

34,068,061

 

36,700,061

 

(6,923,249

)

1989/90

 

30 Years

 

Hall Place

 

Quincy, MA

 

 

3,150,800

 

5,121,950

 

 

466,108

 

3,150,800

 

5,588,058

 

8,738,858

 

(1,074,481

)

1998

 

30 Years

 

Hammocks Place

 

Miami, FL

 

(L)

 

319,180

 

12,513,467

 

 

1,417,966

 

319,180

 

13,931,433

 

14,250,613

 

(5,321,723

)

1986

 

30 Years

 

Hampshire II

 

Elyria, OH

 

812,292

 

126,231

 

1,112,036

 

 

98,222

 

126,231

 

1,210,257

 

1,336,489

 

(205,745

)

1981

 

30 Years

 

Hamptons

 

Puyallup, WA

 

 

1,119,200

 

10,075,844

 

 

812,564

 

1,119,200

 

10,888,409

 

12,007,609

 

(2,773,542

)

1991

 

30 Years

 

Harbinwood

 

Norcross, GA

 

 

236,761

 

2,086,122

 

 

226,974

 

236,761

 

2,313,096

 

2,549,857

 

(394,496

)

1985

 

30 Years

 

Harborview

 

Rancho Palos Verdes, CA

 

 

6,402,500

 

12,627,347

 

 

848,212

 

6,402,500

 

13,475,559

 

19,878,059

 

(3,409,240

)

1985

 

30 Years

 

Harbour Town

 

Boca Raton, FL

 

 

11,760,000

 

20,190,252

 

 

2,975,951

 

11,760,000

 

23,166,203

 

34,926,203

 

(3,346,788

)

1985

 

30 Years

 

Hartwick

 

Tipton, IN

 

106,072

 

123,791

 

1,090,729

 

 

159,881

 

123,791

 

1,250,610

 

1,374,401

 

(215,222

)

1982

 

30 Years

 

Harvest Grove I

 

Gahanna, OH

 

1,535,294

 

170,334

 

1,500,232

 

 

233,189

 

170,334

 

1,733,421

 

1,903,755

 

(308,630

)

1986

 

30 Years

 

Harvest Grove II

 

Gahanna, OH

 

 

148,792

 

1,310,818

 

 

83,763

 

148,792

 

1,394,581

 

1,543,372

 

(231,708

)

1987

 

30 Years

 

Hatcherway

 

Waycross, GA

 

698,356

 

96,885

 

853,716

 

 

204,092

 

96,885

 

1,057,808

 

1,154,694

 

(212,391

)

1986

 

30 Years

 

Hathaway

 

Long Beach, CA

 

 

2,512,500

 

22,611,912

 

 

2,781,413

 

2,512,500

 

25,393,325

 

27,905,825

 

(7,560,146

)

1987

 

30 Years

 

Hayfield Park

 

Burlington, KY

 

1,534,250

 

261,457

 

2,303,394

 

 

195,969

 

261,457

 

2,499,364

 

2,760,820

 

(417,142

)

1986

 

30 Years

 

Heathmoore (Eva)

 

Evansville, IN

 

1,066,549

 

162,375

 

1,430,747

 

 

236,295

 

162,375

 

1,667,041

 

1,829,416

 

(287,481

)

1984

 

30 Years

 

Heathmoore (KY)

 

Louisville, KY

 

 

156,840

 

1,381,730

 

 

174,412

 

156,840

 

1,556,142

 

1,712,982

 

(268,576

)

1983

 

30 Years

 

Heathmoore (MI)

 

Clinton Twp., MI

 

1,617,149

 

227,105

 

2,001,243

 

 

239,460

 

227,105

 

2,240,702

 

2,467,807

 

(376,528

)

1983

 

30 Years

 

Heathmoore I (IN)

 

Indianapolis, IN

 

1,165,705

 

144,557

 

1,273,702

 

 

194,265

 

144,557

 

1,467,967

 

1,612,524

 

(272,089

)

1983

 

30 Years

 

Heathmoore I (MI)

 

Canton, MI

 

1,521,755

 

232,064

 

2,044,227

 

 

193,800

 

232,064

 

2,238,027

 

2,470,090

 

(378,496

)

1986

 

30 Years

 

Heathmoore II (MI)

 

Canton, MI

 

 

170,433

 

1,501,697

 

 

106,284

 

170,433

 

1,607,981

 

1,778,414

 

(269,136

)

1986

 

30 Years

 

Heritage Green

 

Sturbridge, MA

 

3,077,500

 

835,313

 

5,583,898

 

 

298,147

 

835,313

 

5,882,045

 

6,717,358

 

(702,525

)

1974

 

30 Years

 

Heritage, The

 

Phoenix, AZ

 

 

1,211,205

 

13,136,903

 

 

514,028

 

1,211,205

 

13,650,931

 

14,862,136

 

(3,012,706

)

1995

 

30 Years

 

Heron Cove

 

Coral Springs, FL

 

 

823,000

 

8,114,762

 

 

1,154,249

 

823,000

 

9,269,010

 

10,092,010

 

(3,333,853

)

1987

 

30 Years

 

Heron Pointe

 

Boynton Beach, FL

 

 

1,546,700

 

7,774,676

 

 

874,290

 

1,546,700

 

8,648,966

 

10,195,666

 

(2,414,897

)

1989

 

30 Years

 

Heron Pointe (Atl)

 

Atlantic Beach, FL

 

1,566,550

 

214,332

 

1,888,814

 

 

294,302

 

214,332

 

2,183,116

 

2,397,449

 

(412,181

)

1986

 

30 Years

 

Heron Run

 

Plantation, FL

 

 

917,800

 

9,006,476

 

 

1,156,720

 

917,800

 

10,163,196

 

11,080,996

 

(3,785,135

)

1987

 

30 Years

 

Heronwood (REIT)

 

Ft. Myers, FL

 

1,180,784

 

146,100

 

1,315,211

 

 

74,978

 

146,100

 

1,390,189

 

1,536,289

 

(161,691

)

1982

 

30 Years

 

Hessian Hills

 

Charlottesville, VA (T)

 

5,710,473

 

181,229

 

5,024,415

 

 

324,664

 

181,229

 

5,349,079

 

5,530,308

 

(916,847

)

1966

 

30 Years

 

Hickory Mill

 

Hillard, OH

 

 

161,714

 

1,424,682

 

 

182,415

 

161,714

 

1,607,097

 

1,768,811

 

(290,608

)

1980

 

30 Years

 

 

S - 5



 

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest
Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

Hickory Place

 

Gainesville, FL

 

1,268,144

 

192,453

 

1,695,454

 

 

262,591

 

192,453

 

1,958,045

 

2,150,498

 

(351,557

)

1983

 

30 Years

 

Hidden Acres

 

Sarasota, FL

 

1,601,965

 

253,139

 

2,230,579

 

 

318,423

 

253,139

 

2,549,002

 

2,802,141

 

(421,977

)

1987

 

30 Years

 

Hidden Lake

 

Sacramento, CA

 

15,165,000

 

1,715,000

 

11,776,408

 

 

616,648

 

1,715,000

 

12,393,055

 

14,108,055

 

(1,388,645

)

1985

 

30 Years

 

Hidden Lakes

 

Haltom City, TX

 

 

1,872,000

 

20,242,109

 

 

803,145

 

1,872,000

 

21,045,254

 

22,917,254

 

(4,074,586

)

1996

 

30 Years

 

Hidden Oaks

 

Cary, NC

 

 

1,178,600

 

10,614,135

 

 

1,287,127

 

1,178,600

 

11,901,262

 

13,079,862

 

(3,096,509

)

1988

 

30 Years

 

Hidden Palms

 

Tampa, FL

 

 

2,049,600

 

6,345,885

 

 

1,274,722

 

2,049,600

 

7,620,607

 

9,670,207

 

(2,134,207

)

1986

 

30 Years

 

Hidden Pines

 

Casselberry, FL

 

19,562

 

176,308

 

1,553,565

 

 

319,393

 

176,308

 

1,872,959

 

2,049,267

 

(337,256

)

1981

 

30 Years

 

Hidden Valley Club

 

Ann Arbor, MI

 

 

915,000

 

6,667,098

 

 

3,356,198

 

915,000

 

10,023,296

 

10,938,296

 

(6,876,495

)

1973

 

30 Years

 

High Meadow

 

Ellington, CT

 

4,170,141

 

583,679

 

3,901,774

 

 

180,038

 

583,679

 

4,081,812

 

4,665,491

 

(498,058

)

1975

 

30 Years

 

High Points

 

New Port Richey, FL

 

 

222,308

 

1,958,772

 

 

332,726

 

222,308

 

2,291,498

 

2,513,806

 

(431,757

)

1986

 

30 Years

 

High River

 

Tuscaloosa, AL (T)

 

3,612,197

 

208,108

 

3,663,221

 

 

581,848

 

208,108

 

4,245,069

 

4,453,177

 

(771,146

)

1978

 

30 Years

 

Highland Creste

 

Kent, WA

 

 

935,200

 

8,415,391

 

 

910,177

 

935,200

 

9,325,568

 

10,260,768

 

(2,517,609

)

1989

 

30 Years

 

Highland Glen

 

Westwood, MA

 

 

2,229,095

 

16,828,153

 

 

173,665

 

2,229,095

 

17,001,818

 

19,230,914

 

(1,837,484

)

1979

 

30 Years

 

Highland Glen II

 

Westwood, MA

 

 

603,508

 

225,427

 

 

 

603,508

 

225,427

 

828,935

 

 

(F)

 

30 Years

 

Highland Point

 

Aurora, CO

 

(Q)

 

1,631,900

 

14,684,439

 

 

1,240,766

 

1,631,900

 

15,925,205

 

17,557,105

 

(4,010,545

)

1984

 

30 Years

 

Highline Oaks

 

Denver, CO

 

(M)

 

1,057,400

 

9,340,249

 

 

1,115,704

 

1,057,400

 

10,455,953

 

11,513,353

 

(2,852,695

)

1986

 

30 Years

 

Hillcrest Villas

 

Crestview, FL

 

928,180

 

141,603

 

1,247,677

 

 

167,212

 

141,603

 

1,414,889

 

1,556,492

 

(252,319

)

1985

 

30 Years

 

Hillside Manor

 

Americus, GA

 

 

102,632

 

904,111

 

 

297,971

 

102,632

 

1,202,082

 

1,304,715

 

(227,777

)

1985

 

30 Years

 

Holly Ridge

 

Pembroke Park, FL

 

 

295,596

 

2,603,985

 

 

336,564

 

295,596

 

2,940,549

 

3,236,145

 

(500,104

)

1986

 

30 Years

 

Holly Sands I

 

Ft. Walton Bch.,FL

 

 

190,942

 

1,682,524

 

 

248,871

 

190,942

 

1,931,396

 

2,122,338

 

(355,946

)

1985

 

30 Years

 

Holly Sands II

 

Ft. Walton Bch., FL

 

1,009,375

 

124,578

 

1,098,074

 

 

139,794

 

124,578

 

1,237,868

 

1,362,446

 

(227,442

)

1986

 

30 Years

 

Horizon Place

 

Tampa, FL

 

12,214,972

 

2,128,000

 

12,086,937

 

 

893,829

 

2,128,000

 

12,980,766

 

15,108,766

 

(2,730,785

)

1985

 

30 Years

 

Hunt Club

 

Charlotte, NC

 

 

990,000

 

17,992,887

 

 

803,985

 

990,000

 

18,796,873

 

19,786,873

 

(3,677,311

)

1990

 

30 Years

 

Hunt Club II

 

Charlotte, NC

 

 

100,000

 

 

 

 

100,000

 

 

100,000

 

 

(F)

 

30 Years

 

Hunters Green

 

Fort Worth, TX

 

 

524,300

 

3,653,481

 

 

1,172,900

 

524,300

 

4,826,381

 

5,350,681

 

(2,143,330

)

1981

 

30 Years

 

Hunters Ridge

 

St. Louis, MO

 

10,875,000

 

994,500

 

8,913,997

 

 

1,254,091

 

994,500

 

10,168,087

 

11,162,587

 

(2,771,420

)

1986-1987

 

30 Years

 

Huntington Park

 

Everett, WA

 

 

1,597,500

 

14,367,864

 

 

1,428,118

 

1,597,500

 

15,795,982

 

17,393,482

 

(5,889,740

)

1991

 

30 Years

 

Independence Village

 

Reynoldsbury, OH

 

 

226,988

 

2,000,011

 

 

312,736

 

226,988

 

2,312,747

 

2,539,734

 

(421,523

)

1978

 

30 Years

 

Indian Bend

 

Scottsdale, AZ

 

 

1,075,700

 

9,675,133

 

 

1,760,874

 

1,075,700

 

11,436,007

 

12,511,707

 

(4,609,437

)

1973

 

30 Years

 

Indian Lake I

 

Morrow, GA

 

 

839,669

 

7,398,395

 

 

472,654

 

839,669

 

7,871,049

 

8,710,717

 

(1,271,013

)

1987

 

30 Years

 

Indian Ridge I (REIT)

 

Tallahassee, FL

 

 

135,500

 

1,218,598

 

 

104,014

 

135,500

 

1,322,612

 

1,458,112

 

(158,798

)

1981

 

30 Years

 

Indian Ridge II (REIT)

 

Tallahassee, FL

 

 

94,300

 

849,192

 

 

43,709

 

94,300

 

892,900

 

987,200

 

(105,262

)

1982

 

30 Years

 

Indian Tree

 

Arvada, CO

 

 

881,225

 

4,552,815

 

 

1,467,348

 

881,225

 

6,020,162

 

6,901,387

 

(2,532,785

)

1983

 

30 Years

 

Indigo Springs

 

Kent, WA

 

 

1,270,500

 

11,446,902

 

 

1,668,696

 

1,270,500

 

13,115,598

 

14,386,098

 

(3,721,211

)

1991

 

30 Years

 

Iris Glen

 

Conyers, GA

 

1,690,858

 

270,458

 

2,383,030

 

 

135,392

 

270,458

 

2,518,422

 

2,788,880

 

(413,216

)

1984

 

30 Years

 

Ironwood at the Ranch

 

Wesminster, CO

 

 

1,493,300

 

13,439,305

 

 

1,054,232

 

1,493,300

 

14,493,537

 

15,986,837

 

(3,556,587

)

1986

 

30 Years

 

Isle at Arrowhead Ranch

 

Glendale, AZ

 

 

1,650,237

 

19,593,123

 

 

490,544

 

1,650,237

 

20,083,667

 

21,733,904

 

(4,354,235

)

1996

 

30 Years

 

Isles at Sawgrass

 

Sunrise, FL

 

 

7,360,000

 

18,750,693

 

 

669,222

 

7,360,000

 

19,419,915

 

26,779,915

 

(1,489,544

)

1991-1995

 

30 Years

 

Ivy Place

 

Atlanta, GA 

 

 

802,950

 

7,228,257

 

 

1,002,964

 

802,950

 

8,231,221

 

9,034,171

 

(2,440,111

)

1978

 

30 Years

 

Jaclen Towers

 

Beverly, NJ

 

1,931,232

 

437,072

 

2,921,735

 

 

311,683

 

437,072

 

3,233,418

 

3,670,490

 

(408,530

)

1976

 

30 Years

 

James Street Crossing

 

Kent, WA

 

16,379,123

 

2,081,254

 

18,748,337

 

 

902,580

 

2,081,254

 

19,650,917

 

21,732,171

 

(4,521,418

)

1989

 

30 Years

 

Jefferson Way I

 

Orange Park, FL

 

1,000,621

 

147,799

 

1,302,268

 

 

213,943

 

147,799

 

1,516,211

 

1,664,009

 

(261,167

)

1987

 

30 Years

 

Junipers at Yarmouth

 

Yarmouth, ME

 

 

1,355,700

 

7,860,135

 

 

1,218,108

 

1,355,700

 

9,078,243

 

10,433,943

 

(2,479,976

)

1970

 

30 Years

 

Jupiter Cove I

 

Jupiter, FL

 

1,534,955

 

233,932

 

2,060,900

 

 

340,302

 

233,932

 

2,401,202

 

2,635,134

 

(432,481

)

1987

 

30 Years

 

Jupiter Cove II

 

Jupiter, FL

 

1,510,840

 

1,220,000

 

483,833

 

 

232,546

 

1,220,000

 

716,379

 

1,936,379

 

(124,206

)

1987

 

30 Years

 

Jupiter Cove III

 

Jupiter, FL

 

1,614,862

 

242,010

 

2,131,722

 

 

190,403

 

242,010

 

2,322,124

 

2,564,134

 

(380,555

)

1987

 

30 Years

 

Kempton Downs

 

Gresham, OR

 

 

1,217,349

 

10,943,372

 

 

1,719,024

 

1,217,349

 

12,662,396

 

13,879,745

 

(4,392,810

)

1990

 

30 Years

 

Ketwood

 

Kettering, OH

 

 

266,443

 

2,347,655

 

 

319,934

 

266,443

 

2,667,588

 

2,934,032

 

(468,735

)

1979

 

30 Years

 

Keystone

 

Austin, TX

 

 

498,500

 

4,487,295

 

 

1,189,416

 

498,500

 

5,676,711

 

6,175,211

 

(2,188,810

)

1981

 

30 Years

 

Kings Colony

 

Savannah, GA

 

1,953,145

 

230,149

 

2,027,865

 

 

208,914

 

230,149

 

2,236,779

 

2,466,928

 

(401,102

)

1987

 

30 Years

 

Kingsport

 

Alexandria, VA

 

 

1,262,250

 

12,479,294

 

 

2,184,087

 

1,262,250

 

14,663,381

 

15,925,631

 

(5,196,163

)

1986

 

30 Years

 

Kirby Place

 

Houston, TX

 

 

3,621,600

 

25,896,774

 

 

1,107,079

 

3,621,600

 

27,003,853

 

30,625,453

 

(6,099,623

)

1994

 

30 Years

 

La Costa Brava (ORL)

 

Orlando, FL

 

 

206,626

 

3,652,534

 

 

4,582,120

 

206,626

 

8,234,654

 

8,441,280

 

(5,400,567

)

1967

 

30 Years

 

La Mariposa

 

Mesa, AZ

 

 

2,047,539

 

12,466,128

 

 

920,563

 

2,047,539

 

13,386,691

 

15,434,230

 

(3,215,195

)

1986

 

30 Years

 

La Mirage

 

San Diego, CA

 

 

28,895,200

 

95,567,943

 

 

4,629,747

 

28,895,200

 

100,197,689

 

129,092,889

 

(23,154,151

)

1988/1992

 

30 Years

 

La Mirage IV

 

San Diego, CA

 

 

6,000,000

 

47,449,353

 

 

31,426

 

6,000,000

 

47,480,779

 

53,480,779

 

(3,449,516

)

2001

 

30 Years

 

La Tour Fontaine

 

Houston, TX

 

 

2,916,000

 

15,917,178

 

 

746,660

 

2,916,000

 

16,663,838

 

19,579,838

 

(3,141,090

)

1994

 

30 Years

 

Ladera

 

Phoenix, AZ

 

(Q)

 

2,978,879

 

20,640,453

 

 

553,120

 

2,978,879

 

21,193,573

 

24,172,452

 

(4,569,115

)

1995

 

30 Years

 

Laguna Clara

 

Santa Clara, CA

 

17,218,594

 

13,642,420

 

29,591,154

 

 

 

13,642,420

 

29,591,154

 

43,233,574

 

 

1972

 

30 Years

 

Lakes at Vinings

 

Atlanta, GA

 

21,228,864

 

6,498,000

 

21,832,252

 

 

1,857,222

 

6,498,000

 

23,689,474

 

30,187,474

 

(5,102,363

)

1972/1975

 

30 Years

 

Lakeshore at Preston

 

Plano, TX

 

 

3,325,800

 

15,208,348

 

 

705,863

 

3,325,800

 

15,914,211

 

19,240,011

 

(3,323,759

)

1992

 

30 Years

 

Lakeshore I (GA)

 

Ft. Oglethorpe, GA

 

1,202,296

 

169,375

 

1,492,378

 

 

314,210

 

169,375

 

1,806,588

 

1,975,963

 

(348,809

)

1986

 

30 Years

 

Lakeview

 

Lodi, CA

 

7,286,000

 

950,000

 

5,368,814

 

 

753,391

 

950,000

 

6,122,205

 

7,072,205

 

(667,447

)

1983

 

30 Years

 

Lakeville Resort

 

Petaluma, CA

 

 

2,736,500

 

24,610,651

 

 

2,267,325

 

2,736,500

 

26,877,976

 

29,614,476

 

(7,542,217

)

1984

 

30 Years

 

Lakewood

 

Tulsa, OK

 

5,600,000

 

855,000

 

6,480,729

 

 

544,060

 

855,000

 

7,024,789

 

7,879,789

 

(800,024

)

1985

 

30 Years

 

Lakewood Greens

 

Dallas, TX

 

7,889,779

 

2,019,600

 

9,026,907

 

 

518,134

 

2,019,600

 

9,545,041

 

11,564,641

 

(2,121,180

)

1986

 

30 Years

 

Lakewood Oaks

 

Dallas, TX

 

 

1,631,600

 

14,686,192

 

 

1,785,640

 

1,631,600

 

16,471,832

 

18,103,432

 

(5,859,403

)

1987

 

30 Years

 

Landera

 

San Antonio, TX

 

 

766,300

 

6,896,811

 

 

974,748

 

766,300

 

7,871,559

 

8,637,859

 

(2,174,112

)

1983

 

30 Years

 

Landings at Port Imperial

 

W. New York, NJ

 

 

27,246,045

 

37,741,050

 

 

320,319

 

27,246,045

 

38,061,369

 

65,307,414

 

(4,049,899

)

1999

 

30 Years

 

Lantern Cove

 

Foster City, CA

 

36,403,000

 

6,945,000

 

21,363,313

 

 

493,094

 

6,945,000

 

21,856,407

 

28,801,407

 

(2,094,988

)

1985

 

30 Years

 

Larkspur I (Hil)

 

Hillard, OH

 

 

179,628

 

1,582,519

 

 

237,357

 

179,628

 

1,819,876

 

1,999,505

 

(315,900

)

1983

 

30 Years

 

Larkspur Shores

 

Hillard, OH

 

 

17,107,300

 

31,399,237

 

 

3,408,139

 

17,107,300

 

34,807,376

 

51,914,676

 

(7,616,905

)

1983

 

30 Years

 

Larkspur Woods

 

Sacramento, CA

 

 

5,802,900

 

14,576,106

 

 

956,229

 

5,802,900

 

15,532,336

 

21,335,236

 

(3,688,075

)

1989/1993

 

30 Years

 

 

S - 6



 

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest
Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

LaSalle

 

Beaverton, OR (G)

 

34,457,723

 

7,202,000

 

35,877,612

 

 

540,440

 

7,202,000

 

36,418,052

 

43,620,052

 

(1,469,173

)

1998

 

30 Years

 

Laurel Bay

 

Ypsilanti, MI

 

 

186,004

 

1,639,366

 

 

243,186

 

186,004

 

1,882,552

 

2,068,556

 

(294,196

)

1989

 

30 Years

 

Laurel Glen

 

Acworth, GA

 

1,655,375

 

289,509

 

2,550,891

 

 

125,457

 

289,509

 

2,676,348

 

2,965,857

 

(435,570

)

1986

 

30 Years

 

Laurel Ridge

 

Chapel Hill, NC

 

 

160,000

 

3,206,076

 

 

2,767,295

 

160,000

 

5,973,371

 

6,133,371

 

(3,939,631

)

1975

 

30 Years

 

Laurel Ridge II

 

Chapel Hill, NC

 

 

22,551

 

 

 

 

22,551

 

 

22,551

 

 

(F)

 

30 Years

 

Legends at Preston

 

Morrisville, NC

 

 

3,056,000

 

27,150,721

 

 

161,848

 

3,056,000

 

27,312,569

 

30,368,569

 

(3,074,635

)

2000

 

30 Years

 

Lexford Apartment Homes

 

Miami, FL

 

1,251,771

 

191,986

 

1,691,254

 

 

102,501

 

191,986

 

1,793,755

 

1,985,740

 

(298,469

)

1987

 

30 Years

 

Lexington Farm

 

Alpharetta, GA

 

 

3,521,900

 

22,888,305

 

 

729,469

 

3,521,900

 

23,617,774

 

27,139,674

 

(4,496,160

)

1995

 

30 Years

 

Lexington Glen

 

Atlanta, GA

 

 

5,760,000

 

40,190,507

 

 

1,753,846

 

5,760,000

 

41,944,353

 

47,704,353

 

(7,922,605

)

1990

 

30 Years

 

Lexington Park

 

Orlando, FL

 

 

2,016,000

 

12,346,726

 

 

1,124,523

 

2,016,000

 

13,471,249

 

15,487,249

 

(2,795,260

)

1988

 

30 Years

 

Liberty Park

 

Brain Tree, MA

 

26,500,000

 

5,977,504

 

26,748,835

 

 

41,570

 

5,977,504

 

26,790,404

 

32,767,908

 

(666,101

)

2000

 

30 Years

 

Lincoln Heights

 

Quincy, MA

 

(R)

 

5,928,400

 

33,595,262

 

 

844,350

 

5,928,400

 

34,439,612

 

40,368,012

 

(7,441,230

)

1991

 

30 Years

 

Lindendale

 

Columbus, OH

 

1,278,195

 

209,159

 

1,842,816

 

 

232,857

 

209,159

 

2,075,673

 

2,284,831

 

(364,076

)

1987

 

30 Years

 

Link Terrace

 

Hinesville, GA

 

 

121,839

 

1,073,581

 

 

121,572

 

121,839

 

1,195,153

 

1,316,991

 

(213,471

)

1984

 

30 Years

 

Little Cottonwoods

 

Tempe, AZ

 

 

3,050,133

 

26,991,689

 

 

1,269,107

 

3,050,133

 

28,260,796

 

31,310,929

 

(6,363,126

)

1984

 

30 Years

 

Lodge (OK), The

 

Tulsa, OK

 

 

313,371

 

2,750,936

 

 

1,801,875

 

313,371

 

4,552,811

 

4,866,182

 

(3,450,634

)

1979

 

30 Years

 

Lodge (TX), The

 

San Antonio, TX

 

 

1,363,636

 

7,464,586

 

 

2,647,480

 

1,363,636

 

10,112,066

 

11,475,702

 

(5,609,478

)

1989/1990

 

30 Years

 

Lofton Place

 

Tampa, FL

 

 

2,240,000

 

16,679,214

 

 

1,145,363

 

2,240,000

 

17,824,577

 

20,064,577

 

(3,597,111

)

1988

 

30 Years

 

Longfellow Glen

 

Sudbury, MA

 

4,455,640

 

1,094,273

 

7,314,994

 

 

810,952

 

1,094,273

 

8,125,946

 

9,220,219

 

(943,465

)

1984

 

30 Years

 

Longfellow Place

 

Boston, MA (G)

 

 

53,164,160

 

183,940,619

 

 

17,900,681

 

53,164,160

 

201,841,299

 

255,005,459

 

(32,606,747

)

1975

 

30 Years

 

Longwood

 

Decatur, GA

 

 

1,454,048

 

13,087,837

 

 

1,007,910

 

1,454,048

 

14,095,747

 

15,549,795

 

(5,017,875

)

1992

 

30 Years

 

Longwood (KY)

 

Lexington,KY

 

 

146,309

 

1,289,042

 

 

227,359

 

146,309

 

1,516,401

 

1,662,710

 

(265,061

)

1985

 

30 Years

 

Loomis Manor

 

West Hartford, CT

 

(P)

 

422,350

 

2,823,326

 

 

209,855

 

422,350

 

3,033,180

 

3,455,531

 

(368,682

)

1948

 

30 Years

 

Madison at Cedar Springs

 

Dallas, TX

 

(R)

 

2,470,000

 

33,194,620

 

 

591,474

 

2,470,000

 

33,786,094

 

36,256,094

 

(6,285,987

)

1995

 

30 Years

 

Madison at Chase Oaks

 

Plano, TX

 

 

3,055,000

 

28,932,885

 

 

1,122,355

 

3,055,000

 

30,055,240

 

33,110,240

 

(5,761,731

)

1995

 

30 Years

 

Madison at River Sound

 

Lawrenceville, GA

 

 

3,666,999

 

47,387,106

 

 

875,883

 

3,666,999

 

48,262,989

 

51,929,988

 

(8,971,295

)

1996

 

30 Years

 

Madison at Round Grove

 

Lewisville, TX

 

(Q)

 

2,626,000

 

25,682,373

 

 

852,183

 

2,626,000

 

26,534,556

 

29,160,556

 

(5,141,833

)

1995

 

30 Years

 

Madison at Scofield Farms

 

Austin, TX

 

12,414,810

 

2,080,000

 

14,597,971

 

 

787,658

 

2,080,000

 

15,385,629

 

17,465,629

 

(1,986,745

)

1996

 

30 Years

 

Madison at Stone Creek

 

Austin, TX

 

 

2,535,000

 

22,611,700

 

 

972,558

 

2,535,000

 

23,584,257

 

26,119,257

 

(4,661,613

)

1995

 

30 Years

 

Madison at the Arboretum

 

Austin, TX

 

 

1,046,500

 

9,638,269

 

 

644,716

 

1,046,500

 

10,282,985

 

11,329,485

 

(2,095,876

)

1995

 

30 Years

 

Madison at Walnut Creek

 

Austin, TX

 

 

2,737,600

 

14,623,574

 

 

1,111,692

 

2,737,600

 

15,735,266

 

18,472,866

 

(3,799,889

)

1994

 

30 Years

 

Madison at Wells Branch

 

Austin, TX

 

 

2,377,344

 

16,370,879

 

 

1,024,280

 

2,377,344

 

17,395,159

 

19,772,503

 

(2,280,909

)

1995

 

30 Years

 

Madison on Melrose

 

Richardson, TX

 

 

1,300,000

 

15,096,551

 

 

369,407

 

1,300,000

 

15,465,958

 

16,765,958

 

(2,935,773

)

1995

 

30 Years

 

Madison on the Parkway

 

Dallas, TX

 

 

2,444,000

 

22,505,043

 

 

831,323

 

2,444,000

 

23,336,366

 

25,780,366

 

(4,544,039

)

1995

 

30 Years

 

Magnolia at Whitlock

 

Marietta, GA

 

 

132,979

 

1,526,005

 

 

3,045,874

 

132,979

 

4,571,879

 

4,704,858

 

(2,563,939

)

1971

 

30 Years

 

Mallard Cove at Conway

 

Orlando, FL 

 

 

600,000

 

3,528,927

 

 

4,854,512

 

600,000

 

8,383,439

 

8,983,439

 

(6,723,478

)

1974

 

30 Years

 

Manchester (REIT)

 

Jacksonville, FL

 

1,225,161

 

184,100

 

1,657,194

 

 

177,236

 

184,100

 

1,834,430

 

2,018,530

 

(208,744

)

1985

 

30 Years

 

Marabou Mills I

 

Indianapolis, IN

 

1,309,314

 

224,178

 

1,974,952

 

 

212,941

 

224,178

 

2,187,894

 

2,412,072

 

(395,402

)

1986

 

30 Years

 

Marabou Mills II

 

Indianapolis, IN

 

 

192,186

 

1,693,220

 

 

114,302

 

192,186

 

1,807,523

 

1,999,709

 

(307,394

)

1987

 

30 Years

 

Marabou Mills III

 

Indianapolis, IN

 

1,140,520

 

171,557

 

1,511,602

 

 

96,584

 

171,557

 

1,608,186

 

1,779,743

 

(269,669

)

1987

 

30 Years

 

Mariner Club (FL)

 

Pembroke Pines, FL

 

 

1,824,500

 

20,771,566

 

 

742,678

 

1,824,500

 

21,514,245

 

23,338,745

 

(4,193,912

)

1988

 

30 Years

 

Mariners Wharf

 

Orange Park, FL

 

 

1,861,200

 

16,744,951

 

 

912,236

 

1,861,200

 

17,657,187

 

19,518,387

 

(4,080,948

)

1989

 

30 Years

 

Marks

 

Englewood, CO (G)

 

19,555,000

 

4,928,500

 

44,621,814

 

 

2,830,926

 

4,928,500

 

47,452,740

 

52,381,240

 

(11,526,228

)

1987

 

30 Years

 

Marquessa

 

Corona Hills, CA

 

 

6,888,500

 

21,604,584

 

 

1,178,143

 

6,888,500

 

22,782,727

 

29,671,227

 

(5,356,992

)

1992

 

30 Years

 

Marsh Landing I

 

Brunswick, GA

 

 

133,193

 

1,173,573

 

 

247,645

 

133,193

 

1,421,218

 

1,554,411

 

(267,421

)

1984

 

30 Years

 

Marshlanding II

 

Brunswick, GA

 

897,899

 

111,187

 

979,679

 

 

135,848

 

111,187

 

1,115,527

 

1,226,714

 

(204,497

)

1986

 

30 Years

 

Martha Lake

 

Lynnwood, WA

 

 

821,200

 

7,405,070

 

 

1,064,882

 

821,200

 

8,469,952

 

9,291,152

 

(2,179,816

)

1991

 

30 Years

 

Martins Landing

 

Roswell, GA

 

12,053,837

 

4,802,000

 

12,899,972

 

 

1,323,275

 

4,802,000

 

14,223,247

 

19,025,247

 

(3,138,598

)

1972

 

30 Years

 

McDowell Place

 

Naperville, IL

 

(R)

 

2,580,400

 

23,209,629

 

 

2,025,661

 

2,580,400

 

25,235,290

 

27,815,690

 

(6,941,706

)

1988

 

30 Years

 

Meadow Ridge

 

Norwich, CT

 

4,370,997

 

747,957

 

4,999,937

 

 

140,072

 

747,957

 

5,140,009

 

5,887,965

 

(629,611

)

1987

 

30 Years

 

Meadowland

 

Bogart, GA

 

 

152,395

 

1,342,663

 

 

73,532

 

152,395

 

1,416,195

 

1,568,590

 

(240,286

)

1984

 

30 Years

 

Meadowood (Cin)

 

Cincinnati, OH

 

 

330,734

 

2,913,731

 

 

390,863

 

330,734

 

3,304,594

 

3,635,329

 

(550,138

)

1985

 

30 Years

 

Meadowood (Cuy)

 

Cuyahoga Falls, OH

 

 

201,407

 

1,774,784

 

 

167,838

 

201,407

 

1,942,622

 

2,144,029

 

(320,778

)

1985

 

30 Years

 

Meadowood (Fra)

 

Franklin, IN

 

947,128

 

129,252

 

1,138,733

 

 

174,664

 

129,252

 

1,313,398

 

1,442,649

 

(243,947

)

1983

 

30 Years

 

Meadowood (New)

 

Newburgh, IN

 

919,719

 

131,546

 

1,159,064

 

 

125,546

 

131,546

 

1,284,609

 

1,416,155

 

(229,522

)

1984

 

30 Years

 

Meadowood (Nic)

 

Nicholasville, KY

 

1,328,849

 

173,223

 

1,526,283

 

 

244,499

 

173,223

 

1,770,782

 

1,944,005

 

(313,205

)

1983

 

30 Years

 

Meadowood (Tem)

 

Temperance, MI

 

1,283,716

 

173,675

 

1,530,262

 

 

142,185

 

173,675

 

1,672,448

 

1,846,122

 

(265,125

)

1984

 

30 Years

 

Meadowood Apts. (Man)

 

Mansfield, OH

 

 

118,504

 

1,044,002

 

 

158,963

 

118,504

 

1,202,965

 

1,321,469

 

(213,492

)

1983

 

30 Years

 

Meadowood I (GA)

 

Norcross, GA

 

 

205,468

 

1,810,393

 

 

235,153

 

205,468

 

2,045,546

 

2,251,014

 

(340,338

)

1982

 

30 Years

 

Meadowood I (OH)

 

Columbus, OH

 

 

146,912

 

1,294,458

 

 

273,880

 

146,912

 

1,568,338

 

1,715,251

 

(299,537

)

1984

 

30 Years

 

Meadowood II (GA)

 

Norcross, GA

 

 

176,968

 

1,559,544

 

 

161,838

 

176,968

 

1,721,383

 

1,898,351

 

(287,797

)

1984

 

30 Years

 

Meadowood II (OH)

 

Columbus, OH

 

459,027

 

57,802

 

509,199

 

 

94,716

 

57,802

 

603,914

 

661,716

 

(113,445

)

1985

 

30 Years

 

Meadows I (OH), The

 

Columbus, OH

 

 

150,800

 

1,328,616

 

 

210,077

 

150,800

 

1,538,693

 

1,689,493

 

(279,263

)

1985

 

30 Years

 

Meadows II (OH), The

 

Columbus, OH

 

1,111,775

 

186,636

 

1,644,521

 

 

207,033

 

186,636

 

1,851,553

 

2,038,190

 

(320,475

)

1987

 

30 Years

 

Meldon Place

 

Toledo, OH

 

2,249,605

 

288,434

 

2,541,701

 

 

550,421

 

288,434

 

3,092,121

 

3,380,555

 

(631,049

)

1978

 

30 Years

 

Merrifield

 

Salisbury, MD

 

1,896,952

 

268,712

 

2,367,645

 

 

267,130

 

268,712

 

2,634,774

 

2,903,486

 

(429,408

)

1988

 

30 Years

 

Merrill Creek

 

Lakewood, WA

 

 

814,200

 

7,330,606

 

 

393,087

 

814,200

 

7,723,692

 

8,537,892

 

(1,905,149

)

1994

 

30 Years

 

Merritt at Satellite Place

 

Duluth, GA

 

(S)

 

3,400,000

 

30,115,674

 

 

475,100

 

3,400,000

 

30,590,775

 

33,990,775

 

(4,658,938

)

1999

 

30 Years

 

Mesa Del Oso

 

Albuquerque, NM

 

10,713,135

 

4,305,000

 

12,112,957

 

 

412,694

 

4,305,000

 

12,525,651

 

16,830,651

 

(1,357,722

)

1983

 

30 Years

 

Miguel Place

 

Port Richey, FL

 

1,403,066

 

199,349

 

1,756,482

 

 

358,751

 

199,349

 

2,115,234

 

2,314,583

 

(388,464

)

1987

 

30 Years

 

Mill Creek

 

Milpitas, CA

 

 

12,858,693

 

57,169,503

 

 

210,628

 

12,858,693

 

57,380,131

 

70,238,824

 

(1,269,479

)

1991

 

30 Years

 

Mill Pond

 

Millersville, MD

 

7,300,000

 

2,880,000

 

8,468,462

 

 

808,831

 

2,880,000

 

9,277,293

 

12,157,293

 

(1,990,989

)

1984

 

30 Years

 

Millburn

 

Stow, OH

 

145,715

 

192,062

 

1,692,276

 

 

155,273

 

192,062

 

1,847,549

 

2,039,611

 

(292,721

)

1984

 

30 Years

 

 

S - 7



 

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest
Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

Millburn Court I

 

Centerville, OH

 

 

260,000

 

1,246,757

 

 

108,217

 

260,000

 

1,354,973

 

1,614,973

 

(172,398

)

1979

 

30 Years

 

Millburn Court II

 

Centerville, OH

 

861,778

 

122,870

 

1,082,698

 

 

276,032

 

122,870

 

1,358,730

 

1,481,600

 

(263,079

)

1981

 

30 Years

 

Mira Flores

 

Palm Beach Gardens, FL

 

 

7,040,000

 

22,515,299

 

 

438,429

 

7,040,000

 

22,953,728

 

29,993,728

 

(1,595,208

)

1996

 

30 Years

 

Mission Bay

 

Orlando, FL

 

 

2,432,000

 

21,623,560

 

 

939,384

 

2,432,000

 

22,562,945

 

24,994,945

 

(4,360,176

)

1991

 

30 Years

 

Mission Hills

 

Oceanside, CA

 

10,134,515

 

5,640,000

 

21,130,732

 

 

582,953

 

5,640,000

 

21,713,686

 

27,353,686

 

(2,467,374

)

1984

 

30 Years

 

Misty Woods

 

Cary, NC

 

 

720,790

 

18,063,934

 

 

2,149,310

 

720,790

 

20,213,245

 

20,934,035

 

(4,545,442

)

1984

 

30 Years

 

Montecito

 

Valencia, CA

 

 

8,400,000

 

24,709,146

 

 

334,382

 

8,400,000

 

25,043,527

 

33,443,527

 

(2,665,642

)

1999

 

30 Years

 

Montevista

 

Dallas, TX

 

 

3,931,550

 

19,788,568

 

 

296,953

 

3,931,550

 

20,085,521

 

24,017,071

 

(1,263,755

)

2000

 

30 Years

 

Montgomery Court I (MI)

 

Haslett, MI

 

1,138,082

 

156,298

 

1,377,153

 

 

303,477

 

156,298

 

1,680,631

 

1,836,928

 

(283,780

)

1984

 

30 Years

 

Montgomery Court I (OH)

 

Dublin, OH

 

1,214,586

 

163,755

 

1,442,643

 

 

325,062

 

163,755

 

1,767,705

 

1,931,460

 

(325,104

)

1985

 

30 Years

 

Montgomery Court II (OH)

 

Dublin, OH

 

 

149,734

 

1,319,417

 

 

183,986

 

149,734

 

1,503,403

 

1,653,137

 

(259,673

)

1986

 

30 Years

 

Montierra

 

Scottsdale, AZ

 

 

3,455,000

 

17,266,787

 

 

275,377

 

3,455,000

 

17,542,163

 

20,997,163

 

(3,027,446

)

1999

 

30 Years

 

Montierra (CA)

 

San Diego, CA

 

17,854,489

 

8,160,000

 

29,360,938

 

 

923,201

 

8,160,000

 

30,284,140

 

38,444,140

 

(3,492,052

)

1990

 

30 Years

 

Montrose Square

 

Columbus, OH

 

 

193,266

 

1,703,260

 

 

422,073

 

193,266

 

2,125,333

 

2,318,599

 

(422,489

)

1987

 

30 Years

 

Morgan Trace

 

Union City, GA

 

 

239,102

 

2,105,728

 

 

265,209

 

239,102

 

2,370,937

 

2,610,039

 

(390,908

)

1986

 

30 Years

 

Morningside

 

Scottsdale, AZ

 

 

670,470

 

12,607,976

 

 

607,884

 

670,470

 

13,215,860

 

13,886,330

 

(2,946,762

)

1989

 

30 Years

 

Mosswood I

 

Winter Springs, FL

 

 

163,294

 

1,438,796

 

 

286,405

 

163,294

 

1,725,201

 

1,888,494

 

(290,728

)

1981

 

30 Years

 

Mosswood II

 

Winter Springs, FL

 

1,459,292

 

275,330

 

2,426,158

 

 

393,309

 

275,330

 

2,819,466

 

3,094,796

 

(452,962

)

1982

 

30 Years

 

Mountain Park Ranch

 

Phoenix, AZ

 

(O)

 

1,662,332

 

18,260,276

 

 

701,252

 

1,662,332

 

18,961,528

 

20,623,860

 

(4,314,000

)

1994

 

30 Years

 

Mountain Terrace

 

Stevenson Ranch, CA

 

 

3,966,500

 

35,814,995

 

 

1,542,719

 

3,966,500

 

37,357,714

 

41,324,214

 

(9,452,567

)

1992

 

30 Years

 

Nehoiden Glen

 

Needham, MA

 

1,847,102

 

634,538

 

4,241,755

 

 

223,809

 

634,538

 

4,465,564

 

5,100,102

 

(507,814

)

1978

 

30 Years

 

Newberry I

 

Lansing, MI

 

 

183,509

 

1,616,913

 

 

241,612

 

183,509

 

1,858,526

 

2,042,035

 

(329,531

)

1985

 

30 Years

 

Newberry II

 

Lansing, MI

 

 

142,292

 

1,253,951

 

 

150,661

 

142,292

 

1,404,612

 

1,546,905

 

(246,293

)

1986

 

30 Years

 

Newport Heights

 

Tukwila, WA

 

 

391,200

 

3,522,780

 

 

632,572

 

391,200

 

4,155,352

 

4,546,552

 

(1,519,227

)

1985

 

30 Years

 

Noonan Glen

 

Winchester, MA

 

505,024

 

151,344

 

1,011,700

 

 

97,651

 

151,344

 

1,109,351

 

1,260,695

 

(135,487

)

1983

 

30 Years

 

North Creek (Everett)

 

Evertt, WA

 

 

3,967,500

 

12,387,190

 

 

1,740,126

 

3,967,500

 

14,127,316

 

18,094,816

 

(2,873,005

)

1986

 

30 Years

 

North Hill

 

Atlanta, GA

 

15,121,418

 

2,525,300

 

18,550,989

 

 

4,879,368

 

2,525,300

 

23,430,358

 

25,955,658

 

(7,306,484

)

1984

 

30 Years

 

Northampton 1

 

Largo, MD

 

19,437,031

 

1,843,200

 

17,528,381

 

 

3,242,996

 

1,843,200

 

20,771,377

 

22,614,577

 

(7,849,730

)

1977

 

30 Years

 

Northampton 2

 

Largo, MD

 

 

1,513,500

 

14,246,990

 

 

1,605,977

 

1,513,500

 

15,852,967

 

17,366,467

 

(5,416,200

)

1988

 

30 Years

 

Northglen

 

Valencia, CA

 

14,763,217

 

9,360,000

 

20,778,553

 

 

453,019

 

9,360,000

 

21,231,571

 

30,591,571

 

(2,333,760

)

1988

 

30 Years

 

Northridge

 

Pleasant Hill, CA

 

 

5,527,800

 

14,691,705

 

 

1,723,826

 

5,527,800

 

16,415,530

 

21,943,330

 

(3,582,454

)

1974

 

30 Years

 

Northridge (GA)

 

Carrolton, GA

 

 

238,811

 

2,104,181

 

 

156,121

 

238,811

 

2,260,302

 

2,499,113

 

(379,644

)

1985

 

30 Years

 

Northrup Court I

 

Coraopolis, PA

 

1,303,218

 

189,246

 

1,667,463

 

 

153,310

 

189,246

 

1,820,772

 

2,010,018

 

(310,384

)

1985

 

30 Years

 

Northrup Court II

 

Coraopolis, PA

 

 

157,190

 

1,385,018

 

 

109,719

 

157,190

 

1,494,737

 

1,651,927

 

(255,225

)

1985

 

30 Years

 

Northwoods Village

 

Cary, NC

 

 

1,369,700

 

11,460,337

 

 

1,355,284

 

1,369,700

 

12,815,621

 

14,185,321

 

(3,314,062

)

1986

 

30 Years

 

Norton Glen

 

Norton, MA

 

4,355,502

 

1,012,556

 

6,768,727

 

 

1,419,546

 

1,012,556

 

8,188,273

 

9,200,828

 

(955,948

)

1983

 

30 Years

 

Nova Glen I

 

Daytona Beach, FL

 

 

142,086

 

1,251,930

 

 

417,167

 

142,086

 

1,669,097

 

1,811,182

 

(318,504

)

1984

 

30 Years

 

Nova Glen II

 

Daytona Beach, FL

 

 

175,168

 

1,543,420

 

 

367,494

 

175,168

 

1,910,914

 

2,086,082

 

(329,396

)

1986

 

30 Years

 

Novawood I

 

Daytona Beach, FL

 

149,213

 

122,311

 

1,077,897

 

 

240,064

 

122,311

 

1,317,962

 

1,440,273

 

(231,569

)

1980

 

30 Years

 

Novawood II

 

Daytona Beach, FL

 

 

144,401

 

1,272,484

 

 

166,421

 

144,401

 

1,438,905

 

1,583,306

 

(242,003

)

1980

 

30 Years

 

Oak Gardens

 

Hollywood, FL

 

 

329,968

 

2,907,288

 

 

295,242

 

329,968

 

3,202,529

 

3,532,497

 

(519,339

)

1988

 

30 Years

 

Oak Mill 2

 

Germantown, MD

 

9,600,000

 

854,133

 

9,010,184

 

 

843,223

 

854,133

 

9,853,407

 

10,707,540

 

(3,110,938

)

1985

 

30 Years

 

Oak Park North

 

Agoura Hills, CA

 

(I)

 

1,706,900

 

15,362,666

 

 

659,670

 

1,706,900

 

16,022,336

 

17,729,236

 

(4,707,467

)

1990

 

30 Years

 

Oak Park South

 

Agoura Hills, CA

 

(I)

 

1,683,800

 

15,154,608

 

 

741,287

 

1,683,800

 

15,895,894

 

17,579,694

 

(4,721,882

)

1989

 

30 Years

 

Oak Ridge

 

Clermont, FL

 

1,153,709

 

173,617

 

1,529,936

 

 

303,813

 

173,617

 

1,833,749

 

2,007,366

 

(344,270

)

1985

 

30 Years

 

Oak Shade

 

Orange City, FL

 

 

229,403

 

2,021,290

 

 

154,948

 

229,403

 

2,176,239

 

2,405,642

 

(370,859

)

1985

 

30 Years

 

Oakland Hills

 

Margate, FL

 

 

3,040,000

 

4,930,604

 

 

570,878

 

3,040,000

 

5,501,481

 

8,541,481

 

(775,634

)

1987

 

30 Years

 

Oakley Woods

 

Union City, GA

 

1,060,501

 

165,449

 

1,457,485

 

 

290,857

 

165,449

 

1,748,342

 

1,913,791

 

(316,673

)

1984

 

30 Years

 

Oaks

 

Santa Clarita, CA

 

45,885,102

 

23,400,000

 

61,032,944

 

 

80,506

 

23,400,000

 

61,113,450

 

84,513,450

 

(903,328

)

2000

 

30 Years

 

Oaks (NC)

 

Charlotte, NC

 

 

2,196,744

 

23,601,540

 

 

489,611

 

2,196,744

 

24,091,151

 

26,287,895

 

(4,552,024

)

1996

 

30 Years

 

Oakwood Manor

 

Hollywood, FL

 

 

173,247

 

1,525,973

 

 

89,423

 

173,247

 

1,615,396

 

1,788,643

 

(269,341

)

1986

 

30 Years

 

Oakwood Village (FL)

 

Hudson, FL

 

 

145,547

 

1,282,427

 

 

397,321

 

145,547

 

1,679,747

 

1,825,294

 

(328,895

)

1986

 

30 Years

 

Oakwood Village (FL) II

 

Hudson, FL

 

 

31,734

 

 

 

 

31,734

 

 

31,734

 

 

(F)

 

30 Years

 

Oakwood Village (GA)

 

Augusta, GA

 

 

161,174

 

1,420,119

 

 

169,028

 

161,174

 

1,589,148

 

1,750,322

 

(271,746

)

1985

 

30 Years

 

Ocean Walk

 

Key West, FL

 

21,079,921

 

2,838,749

 

25,545,009

 

 

1,112,037

 

2,838,749

 

26,657,046

 

29,495,794

 

(5,909,184

)

1990

 

30 Years

 

Old Archer Court

 

Gainesville, FL

 

923,110

 

170,323

 

1,500,735

 

 

327,215

 

170,323

 

1,827,950

 

1,998,273

 

(351,237

)

1977

 

30 Years

 

Old Mill Glen

 

Maynard, MA

 

1,831,187

 

396,756

 

2,652,233

 

 

128,430

 

396,756

 

2,780,663

 

3,177,419

 

(338,386

)

1983

 

30 Years

 

Olde Redmond Place

 

Redmond, WA

 

(R)

 

4,807,100

 

14,126,038

 

 

891,340

 

4,807,100

 

15,017,378

 

19,824,478

 

(3,036,528

)

1986

 

30 Years

 

Olivewood (MI)

 

Sterling Hts., MI

 

 

519,167

 

4,574,905

 

 

516,551

 

519,167

 

5,091,455

 

5,610,622

 

(854,737

)

1986

 

30 Years

 

Olivewood I

 

Indianapolis, IN

 

 

184,701

 

1,627,420

 

 

327,312

 

184,701

 

1,954,733

 

2,139,434

 

(362,514

)

1985

 

30 Years

 

Olivewood II

 

Indianapolis, IN

 

1,223,860

 

186,235

 

1,640,571

 

 

230,561

 

186,235

 

1,871,131

 

2,057,366

 

(330,483

)

1986

 

30 Years

 

One Eton Square

 

Tulsa, OK

 

 

1,570,100

 

14,130,937

 

 

2,263,099

 

1,570,100

 

16,394,036

 

17,964,136

 

(4,511,983

)

1985

 

30 Years

 

Orchard Ridge

 

Lynnwood, WA

 

 

480,600

 

4,372,033

 

 

598,676

 

480,600

 

4,970,709

 

5,451,309

 

(1,787,941

)

1988

 

30 Years

 

Overlook

 

San Antonio, TX

 

 

1,100,200

 

9,901,517

 

 

1,591,811

 

1,100,200

 

11,493,327

 

12,593,527

 

(3,307,959

)

1985

 

30 Years

 

Overlook Manor

 

Frederick, MD

 

 

1,299,100

 

3,930,931

 

 

761,988

 

1,299,100

 

4,692,919

 

5,992,019

 

(1,051,944

)

1980/1985

 

30 Years

 

Overlook Manor II

 

Frederick, MD

 

5,380,000

 

2,186,300

 

6,262,597

 

 

231,098

 

2,186,300

 

6,493,695

 

8,679,995

 

(1,397,174

)

1980/1985

 

30 Years

 

Overlook Manor III

 

Frederick, MD

 

 

1,026,300

 

3,027,390

 

 

116,268

 

1,026,300

 

3,143,658

 

4,169,958

 

(657,661

)

1980/1985

 

30 Years

 

Paces Station

 

Atlanta, GA

 

 

4,801,500

 

32,548,053

 

 

3,790,967

 

4,801,500

 

36,339,019

 

41,140,519

 

(9,528,137

)

1984-1988/1989

 

30 Years

 

Palladia

 

Hillsboro, OR

 

 

6,461,000

 

44,888,156

 

 

245,990

 

6,461,000

 

45,134,146

 

51,595,146

 

(3,967,164

)

2000

 

30 Years

 

Palm Place

 

Sarasota. FL

 

 

248,315

 

2,188,339

 

 

404,127

 

248,315

 

2,592,466

 

2,840,781

 

(477,973

)

1984

 

30 Years

 

Palm Side (REIT)

 

Palm Bay, FL

 

1,076,031

 

116,334

 

1,047,004

 

 

1,000

 

116,334

 

1,048,004

 

1,164,338

 

(4,721

)

1986

 

30 Years

 

Panther Ridge

 

Federal Way, WA

 

 

1,055,800

 

9,506,117

 

 

975,397

 

1,055,800

 

10,481,514

 

11,537,314

 

(2,915,051

)

1980

 

30 Years

 

Paradise Pointe

 

Dania, FL

 

 

1,913,414

 

17,417,956

 

 

2,965,441

 

1,913,414

 

20,383,397

 

22,296,811

 

(6,842,742

)

1987-90

 

30 Years

 

 

S - 8



 

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest
Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

Parc Royale

 

Houston, TX

 

 

2,223,000

 

11,936,833

 

 

1,242,498

 

2,223,000

 

13,179,330

 

15,402,330

 

(2,469,925

)

1994

 

30 Years

 

Park Meadow

 

Gilbert, AZ

 

 

835,217

 

15,120,769

 

 

808,119

 

835,217

 

15,928,888

 

16,764,105

 

(3,590,144

)

1986

 

30 Years

 

Park Place (MN)

 

Plymouth, MN

 

 

1,219,900

 

10,964,119

 

 

1,233,329

 

1,219,900

 

12,197,448

 

13,417,348

 

(3,623,151

)

1986

 

30 Years

 

Park Place (TX)

 

Houston, TX

 

 

1,603,000

 

12,054,926

 

 

484,480

 

1,603,000

 

12,539,406

 

14,142,406

 

(2,783,639

)

1996

 

30 Years

 

Park Place II

 

Plymouth, MN

 

 

1,216,100

 

10,951,698

 

 

1,042,608

 

1,216,100

 

11,994,306

 

13,210,406

 

(3,450,815

)

1986

 

30 Years

 

Park Place West (CT)

 

West Hartford, CT

 

 

466,243

 

3,116,742

 

 

143,998

 

466,243

 

3,260,741

 

3,726,984

 

(400,015

)

1961

 

30 Years

 

Park West (CA)

 

Los Angeles, CA

 

 

3,033,500

 

27,302,383

 

 

2,622,629

 

3,033,500

 

29,925,012

 

32,958,512

 

(9,150,400

)

1987/90

 

30 Years

 

Park West (TX)

 

Austin, TX

 

 

648,705

 

4,738,542

 

 

1,097,506

 

648,705

 

5,836,048

 

6,484,753

 

(2,355,186

)

1985

 

30 Years

 

Parkfield

 

Denver, CO

 

 

8,330,000

 

28,667,618

 

 

343,029

 

8,330,000

 

29,010,646

 

37,340,646

 

(3,205,524

)

2000

 

30 Years

 

Parkridge Place

 

Irving, TX

 

 

6,432,900

 

17,094,962

 

 

1,540,563

 

6,432,900

 

18,635,526

 

25,068,426

 

(4,723,279

)

1985

 

30 Years

 

Parkside

 

Union City, CA

 

 

6,246,700

 

11,827,453

 

 

2,542,001

 

6,246,700

 

14,369,454

 

20,616,154

 

(3,260,786

)

1979

 

30 Years

 

Parkview Terrace

 

Redlands, CA

 

 

4,969,200

 

35,653,777

 

 

1,871,619

 

4,969,200

 

37,525,396

 

42,494,596

 

(8,226,300

)

1986

 

30 Years

 

Parkville (Col)

 

Columbus, OH

 

1,689,856

 

150,433

 

1,325,756

 

 

332,921

 

150,433

 

1,658,677

 

1,809,110

 

(345,554

)

1978

 

30 Years

 

Parkville (IN)

 

Gas City, IN

 

706,898

 

103,434

 

911,494

 

 

160,868

 

103,434

 

1,072,362

 

1,175,796

 

(203,752

)

1982

 

30 Years

 

Parkville (Par)

 

Englewood, OH

 

 

127,863

 

1,126,638

 

 

137,437

 

127,863

 

1,264,074

 

1,391,937

 

(218,171

)

1982

 

30 Years

 

Parkway North (REIT)

 

Ft. Meyers, FL

 

1,072,542

 

145,350

 

1,308,115

 

 

119,438

 

145,350

 

1,427,553

 

1,572,903

 

(176,237

)

1984

 

30 Years

 

Parkwood (CT)

 

East Haven, CT

 

 

531,365

 

3,552,064

 

 

123,128

 

531,365

 

3,675,192

 

4,206,556

 

(458,950

)

1975

 

30 Years

 

Pembroke Lake

 

Virginia Beach, VA (T)

 

8,587,685

 

511,947

 

8,889,539

 

 

773,979

 

511,947

 

9,663,518

 

10,175,465

 

(1,651,257

)

1975

 

30 Years

 

Phillips Park

 

Wellesley, MA

 

3,926,574

 

816,922

 

5,460,955

 

 

162,176

 

816,922

 

5,623,131

 

6,440,053

 

(629,818

)

1988

 

30 Years

 

Pine Barrens

 

Jacksonville, FL

 

 

268,303

 

2,364,041

 

 

375,565

 

268,303

 

2,739,605

 

3,007,908

 

(481,687

)

1986

 

30 Years

 

Pine Harbour

 

Orlando, FL

 

 

1,664,300

 

14,970,915

 

 

2,096,382

 

1,664,300

 

17,067,297

 

18,731,597

 

(6,277,034

)

1991

 

30 Years

 

Pine Knoll

 

Jonesboro, GA

 

1,143,985

 

138,052

 

1,216,391

 

 

147,030

 

138,052

 

1,363,420

 

1,501,473

 

(224,622

)

1985

 

30 Years

 

Pine Lake

 

Tampa, FL

 

613,846

 

79,877

 

703,802

 

 

96,652

 

79,877

 

800,453

 

880,330

 

(142,623

)

1982

 

30 Years

 

Pine Meadows I (FL)

 

Ft. Meyers, FL

 

 

152,019

 

1,339,596

 

 

356,708

 

152,019

 

1,696,304

 

1,848,324

 

(351,629

)

1985

 

30 Years

 

Pine Terrace I

 

Callaway, FL

 

2,031,161

 

288,992

 

2,546,426

 

 

554,230

 

288,992

 

3,100,657

 

3,389,649

 

(629,438

)

1983

 

30 Years

 

Pine Tree Club

 

Wildwood, MO

 

 

1,125,000

 

7,017,082

 

 

652,289

 

1,125,000

 

7,669,371

 

8,794,371

 

(1,396,419

)

1986

 

30 Years

 

Pinegrove I (REIT)

 

Roseville, MI

 

1,066,853

 

145,660

 

1,311,019

 

 

 

145,660

 

1,311,019

 

1,456,679

 

 

1983

 

30 Years

 

Pinegrove II (REIT)

 

Roseville, MI

 

670,378

 

99,074

 

891,743

 

 

 

99,074

 

891,743

 

990,817

 

 

1984

 

30 Years

 

Pinellas Pines

 

Pinellas Park, FL

 

5,798

 

174,999

 

1,541,934

 

 

236,424

 

174,999

 

1,778,358

 

1,953,358

 

(307,732

)

1983

 

30 Years

 

Pines of Cloverlane

 

Ypsilanti, MI

 

 

1,907,800

 

16,767,519

 

 

5,847,165

 

1,907,800

 

22,614,684

 

24,522,484

 

(8,572,687

)

1975-79

 

30 Years

 

Pines of Springdale

 

Palm Springs, FL

 

 

473,867

 

4,265,174

 

 

1,092,326

 

473,867

 

5,357,500

 

5,831,367

 

(2,116,245

)

1985/87

 

30 Years

 

Plum Tree

 

Hales Corners, WI

 

(N)

 

1,996,700

 

20,247,195

 

 

1,048,977

 

1,996,700

 

21,296,173

 

23,292,873

 

(4,731,314

)

1989

 

30 Years

 

Plumwood (Che)

 

Chesterfield, IN

 

62,289

 

84,923

 

748,261

 

 

115,852

 

84,923

 

864,112

 

949,035

 

(151,511

)

1980

 

30 Years

 

Plumwood (For)

 

Ft. Wayne, IN

 

 

131,351

 

1,157,244

 

 

161,813

 

131,351

 

1,319,056

 

1,450,407

 

(250,078

)

1981

 

30 Years

 

Plumwood I

 

Columbus, OH

 

1,612,115

 

289,814

 

2,553,597

 

 

347,892

 

289,814

 

2,901,490

 

3,191,304

 

(513,930

)

1978

 

30 Years

 

Plumwood II

 

Columbus, OH

 

 

107,583

 

947,924

 

 

88,385

 

107,583

 

1,036,309

 

1,143,892

 

(171,282

)

1983

 

30 Years

 

Point (NC)

 

Charlotte, NC

 

(S)

 

1,700,000

 

25,417,267

 

 

519,311

 

1,700,000

 

25,936,577

 

27,636,577

 

(4,881,354

)

1996

 

30 Years

 

Pointe at South Mountain

 

Phoenix, AZ

 

 

2,228,800

 

20,059,311

 

 

1,383,161

 

2,228,800

 

21,442,472

 

23,671,272

 

(5,501,033

)

1988

 

30 Years

 

Polos East

 

Orlando, FL

 

 

1,386,000

 

19,058,620

 

 

861,704

 

1,386,000

 

19,920,324

 

21,306,324

 

(3,898,961

)

1991

 

30 Years

 

Port Royale

 

Ft. Lauderdale, FL

 

 

1,754,200

 

15,789,873

 

 

1,742,822

 

1,754,200

 

17,532,695

 

19,286,895

 

(5,933,155

)

1988

 

30 Years

 

Port Royale II

 

Ft. Lauderdale, FL

 

 

1,022,200

 

9,203,166

 

 

1,095,880

 

1,022,200

 

10,299,046

 

11,321,246

 

(3,128,903

)

1988

 

30 Years

 

Port Royale III

 

Ft. Lauderdale, FL

 

 

7,454,900

 

14,725,802

 

 

1,678,106

 

7,454,900

 

16,403,908

 

23,858,808

 

(4,196,008

)

1988

 

30 Years

 

Port Royale IV

 

Ft. Lauderdale, FL

 

 

 

24,645

 

 

 

 

24,645

 

24,645

 

 

 

(F)

 

30 Years

 

Portland Center

 

Portland, OR (G)

 

 

6,032,900

 

43,554,399

 

 

3,967,373

 

6,032,900

 

47,521,772

 

53,554,672

 

(9,738,281

)

1965

 

30 Years

 

Portofino

 

Chino Hills, CA

 

 

3,572,400

 

14,660,994

 

 

544,085

 

3,572,400

 

15,205,078

 

18,777,478

 

(3,368,028

)

1989

 

30 Years

 

Portofino (Val)

 

Valencia, CA

 

14,363,282

 

8,640,000

 

21,487,126

 

 

392,531

 

8,640,000

 

21,879,657

 

30,519,657

 

(2,366,932

)

1989

 

30 Years

 

Portside Towers

 

Jersey City, NJ (G)

 

54,554,220

 

22,455,700

 

96,842,913

 

 

3,308,547

 

22,455,700

 

100,151,460

 

122,607,160

 

(19,387,909

)

1992/1997

 

30 Years

 

Prairie Creek I

 

Richardson, TX

 

(Q)

 

4,067,292

 

38,986,022

 

 

760,498

 

4,067,292

 

39,746,520

 

43,813,811

 

(6,846,869

)

1998/99

 

30 Years

 

Preakness

 

Antioch, TN

 

 

1,561,900

 

7,668,521

 

 

1,719,701

 

1,561,900

 

9,388,222

 

10,950,122

 

(2,623,047

)

1986

 

30 Years

 

Preston at Willowbend

 

Plano, TX

 

 

872,500

 

7,878,915

 

 

2,815,376

 

872,500

 

10,694,291

 

11,566,791

 

(4,277,059

)

1985

 

30 Years

 

Preston Bend

 

Dallas, TX

 

(M)

 

1,085,200

 

9,532,056

 

 

748,868

 

1,085,200

 

10,280,925

 

11,366,125

 

(2,756,873

)

1986

 

30 Years

 

Princeton Court

 

Evansville, IN

 

849,327

 

116,696

 

1,028,219

 

 

220,424

 

116,696

 

1,248,643

 

1,365,339

 

(230,950

)

1985

 

30 Years

 

Promenade (FL)

 

St. Petersburg, FL

 

 

2,124,193

 

25,804,037

 

 

2,379,033

 

2,124,193

 

28,183,070

 

30,307,263

 

(5,228,395

)

1994

 

30 Years

 

Promenade at Aventura

 

Aventura, FL

 

 

13,320,000

 

30,353,748

 

 

517,352

 

13,320,000

 

30,871,100

 

44,191,100

 

(3,152,758

)

1995

 

30 Years

 

Promenade at Wyndham Lakes

 

Coral Springs, FL

 

 

6,640,000

 

26,743,760

 

 

406,378

 

6,640,000

 

27,150,138

 

33,790,138

 

(3,426,479

)

1998

 

30 Years

 

Promenade Terrace

 

Corona, CA

 

14,281,303

 

2,282,800

 

20,546,289

 

 

1,764,968

 

2,282,800

 

22,311,257

 

24,594,057

 

(6,048,819

)

1990

 

30 Years

 

Promontory Pointe I & II

 

Phoenix, AZ

 

 

2,355,509

 

30,421,840

 

 

1,564,538

 

2,355,509

 

31,986,378

 

34,341,887

 

(7,141,084

)

1984/1996

 

30 Years

 

Prospect Towers

 

Hackensack, NJ

 

13,893,886

 

3,926,600

 

27,966,416

 

 

2,221,304

 

3,926,600

 

30,187,720

 

34,114,320

 

(6,365,901

)

1995

 

30 Years

 

Prospect Towers II

 

Hackensack, NJ

 

 

4,500,000

 

33,081,077

 

 

100,643

 

4,500,000

 

33,181,719

 

37,681,719

 

(1,797,865

)

2002

 

30 Years

 

Providence at Kirby

 

Houston, TX

 

18,144,270

 

3,945,000

 

20,587,782

 

 

141,735

 

3,945,000

 

20,729,516

 

24,674,516

 

(1,000,983

)

1999

 

30 Years

 

Quail Call

 

Albany, GA

 

671,497

 

104,723

 

922,728

 

 

165,829

 

104,723

 

1,088,557

 

1,193,280

 

(211,330

)

1984

 

30 Years

 

Ramblewood I (Val)

 

Valdosta, GA

 

 

132,084

 

1,163,801

 

 

101,717

 

132,084

 

1,265,518

 

1,397,602

 

(225,720

)

1983

 

30 Years

 

Ramblewood II (Aug)

 

Augusta, GA

 

 

169,269

 

1,490,783

 

 

321,705

 

169,269

 

1,812,488

 

1,981,757

 

(359,734

)

1986

 

30 Years

 

Ramblewood II (Val)

 

Valdosta, GA

 

 

61,672

 

543,399

 

 

29,870

 

61,672

 

573,269

 

634,941

 

(101,081

)

1983

 

30 Years

 

Ranch at Fossil Creek

 

Haltom City, TX

 

 

1,715,435

 

16,802,469

 

 

 

1,715,435

 

16,802,469

 

18,517,904

 

(58,073

)

2003

 

30 Years

 

Ranchside

 

New Port Richey, FL

 

 

144,692

 

1,274,898

 

 

204,572

 

144,692

 

1,479,470

 

1,624,162

 

(266,807

)

1985

 

30 Years

 

Ranchstone

 

Houston, TX

 

(S)

 

770,000

 

15,371,431

 

 

427,804

 

770,000

 

15,799,235

 

16,569,235

 

(3,012,285

)

1996

 

30 Years

 

Ravens Crest

 

Plainsboro, NJ

 

(R)

 

4,670,850

 

42,080,642

 

 

4,384,824

 

4,670,850

 

46,465,467

 

51,136,317

 

(16,402,539

)

1984

 

30 Years

 

Ravinia

 

Greenfield, WI

 

(N)

 

1,240,100

 

12,055,713

 

 

656,818

 

1,240,100

 

12,712,531

 

13,952,631

 

(2,836,354

)

1991

 

30 Years

 

Red Deer I

 

Fairborn, OH

 

 

204,317

 

1,800,254

 

 

207,008

 

204,317

 

2,007,262

 

2,211,578

 

(335,648

)

1986

 

30 Years

 

Red Deer II

 

Fairborn, OH

 

 

193,852

 

1,708,044

 

 

170,208

 

193,852

 

1,878,252

 

2,072,104

 

(309,664

)

1987

 

30 Years

 

Redan Village I

 

Decatur, GA

 

 

274,294

 

2,416,963

 

 

258,306

 

274,294

 

2,675,270

 

2,949,564

 

(454,960

)

1984

 

30 Years

 

Redan Village II

 

Decatur, GA

 

 

240,605

 

2,119,855

 

 

145,866

 

240,605

 

2,265,721

 

2,506,327

 

(367,769

)

1986

 

30 Years

 

 

S - 9



 

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

Redlands Lawn and Tennis

 

Redlands, CA

 

 

4,822,320

 

26,359,328

 

 

1,741,496

 

4,822,320

 

28,100,825

 

32,923,145

 

(6,446,463

)

1986

 

30 Years

 

Redwood Hollow (REIT)

 

Smyrma, TN

 

1,218,788

 

129,586

 

1,166,522

 

 

4,187

 

129,586

 

1,170,709

 

1,300,295

 

(9,511

)

1986

 

30 Years

 

Regency

 

Charlotte, NC

 

 

890,000

 

11,783,920

 

 

721,377

 

890,000

 

12,505,297

 

13,395,297

 

(2,456,702

)

1986

 

30 Years

 

Regency Palms

 

Huntington Beach, CA

 

 

1,857,400

 

16,713,254

 

 

2,481,773

 

1,857,400

 

19,195,026

 

21,052,426

 

(5,542,741

)

1969

 

30 Years

 

Remington Place

 

Pheonix, AZ

 

 

1,492,750

 

13,377,478

 

 

2,508,863

 

1,492,750

 

15,886,341

 

17,379,091

 

(4,908,802

)

1983

 

30 Years

 

Reserve at Ashley Lake

 

Boynton Beach, FL

 

24,150,000

 

3,520,400

 

23,332,494

 

 

1,365,711

 

3,520,400

 

24,698,204

 

28,218,604

 

(5,701,107

)

1990

 

30 Years

 

Reserve at Eisenhower, The

 

Alexandria, VA

 

 

6,500,000

 

34,585,060

 

 

39,468

 

6,500,000

 

34,624,527

 

41,124,527

 

(1,239,288

)

2002

 

30 Years

 

Reserve at Fairfax Corners

 

Fairfax, VA

 

 

15,804,057

 

63,217,249

 

 

214,173

 

15,804,057

 

63,431,421

 

79,235,478

 

(2,859,812

)

2001

 

30 Years

 

Reserve Square

 

Cleveland, OH (G)

 

 

2,618,852

 

23,582,869

 

 

15,790,336

 

2,618,852

 

39,373,205

 

41,992,057

 

(18,041,793

)

1973

 

30 Years

 

Residences at Little River

 

Haverhill, MA

 

 

6,905,138

 

18,605,818

 

 

46,634

 

6,905,138

 

18,652,453

 

25,557,591

 

(62,816

)

2003

 

30 Years

 

Retreat, The

 

Phoenix, AZ

 

(S)

 

3,475,114

 

27,265,252

 

 

484,764

 

3,475,114

 

27,750,016

 

31,225,130

 

(4,603,143

)

1999

 

30 Years

 

Ribbon Mill

 

Manchester, CT

 

4,361,456

 

787,929

 

5,267,144

 

 

238,449

 

787,929

 

5,505,593

 

6,293,522

 

(656,292

)

1908

 

30 Years

 

Richmond Townhomes

 

Houston, TX

 

 

940,000

 

13,906,905

 

 

566,700

 

940,000

 

14,473,605

 

15,413,605

 

(2,801,331

)

1995

 

30 Years

 

Ridgewood (Lou)

 

Louisville, KY

 

 

163,686

 

1,442,301

 

 

87,968

 

163,686

 

1,530,269

 

1,693,955

 

(252,942

)

1984

 

30 Years

 

Ridgewood (MI)

 

Westland, MI

 

1,142,998

 

176,969

 

1,559,588

 

 

213,326

 

176,969

 

1,772,914

 

1,949,883

 

(306,389

)

1983

 

30 Years

 

Ridgewood I (Bed)

 

Bedford, IN

 

806,388

 

107,120

 

943,843

 

 

165,318

 

107,120

 

1,109,161

 

1,216,281

 

(198,048

)

1984

 

30 Years

 

Ridgewood I (Elk)

 

Elkhart, IN

 

 

159,371

 

1,404,234

 

 

274,132

 

159,371

 

1,678,365

 

1,837,737

 

(304,146

)

1984

 

30 Years

 

Ridgewood I (GA)

 

Decatur, GA

 

 

230,574

 

2,031,610

 

 

213,158

 

230,574

 

2,244,768

 

2,475,342

 

(375,298

)

1984

 

30 Years

 

Ridgewood I (Lex)

 

Lexington, KY

 

 

203,720

 

1,794,792

 

 

157,917

 

203,720

 

1,952,710

 

2,156,429

 

(328,526

)

1984

 

30 Years

 

Ridgewood I (OH)

 

Columbus, OH

 

1,148,723

 

174,066

 

1,534,135

 

 

229,509

 

174,066

 

1,763,644

 

1,937,709

 

(301,336

)

1984

 

30 Years

 

Ridgewood II (Bed)

 

Bedford, IN

 

835,573

 

99,559

 

877,221

 

 

113,606

 

99,559

 

990,827

 

1,090,386

 

(176,136

)

1986

 

30 Years

 

Ridgewood II (Elk)

 

Elkhart, IN

 

 

215,335

 

1,897,333

 

 

313,131

 

215,335

 

2,210,464

 

2,425,799

 

(414,634

)

1986

 

30 Years

 

Ridgewood II (GA)

 

Decatur, GA

 

933,139

 

164,999

 

1,453,626

 

 

119,084

 

164,999

 

1,572,710

 

1,737,709

 

(254,015

)

1986

 

30 Years

 

Ridgewood II (OH)

 

Columbus, OH

 

1,110,433

 

162,914

 

1,435,648

 

 

190,821

 

162,914

 

1,626,468

 

1,789,382

 

(274,995

)

1985

 

30 Years

 

Ridgewood Village

 

San Diego, CA

 

 

5,761,500

 

14,032,511

 

 

172,152

 

5,761,500

 

14,204,663

 

19,966,163

 

(3,044,684

)

1997

 

30 Years

 

Ridgewood Village II

 

San Diego, CA

 

 

6,048,000

 

19,971,537

 

 

38,865

 

6,048,000

 

20,010,402

 

26,058,402

 

(2,219,166

)

1997

 

30 Years

 

Rincon

 

Houston, TX

 

 

4,401,900

 

16,734,746

 

 

851,019

 

4,401,900

 

17,585,765

 

21,987,665

 

(4,287,112

)

1996

 

30 Years

 

River Glen I

 

Reynoldsburg, OH

 

 

171,272

 

1,508,892

 

 

121,673

 

171,272

 

1,630,565

 

1,801,837

 

(272,096

)

1987

 

30 Years

 

River Glen II

 

Reynoldsburg, OH

 

1,096,621

 

158,684

 

1,398,175

 

 

167,520

 

158,684

 

1,565,695

 

1,724,379

 

(256,395

)

1987

 

30 Years

 

River Hill

 

Grand Prairie, TX

 

 

2,004,000

 

19,272,944

 

 

767,194

 

2,004,000

 

20,040,138

 

22,044,138

 

(3,943,997

)

1996

 

30 Years

 

River Oaks (CA)

 

Oceanside, CA

 

10,290,411

 

5,600,000

 

20,673,714

 

 

826,957

 

5,600,000

 

21,500,670

 

27,100,670

 

(2,468,229

)

1984

 

30 Years

 

River Park

 

Fort Worth, TX

 

 

2,245,400

 

8,811,727

 

 

1,902,954

 

2,245,400

 

10,714,681

 

12,960,081

 

(2,701,464

)

1984

 

30 Years

 

River Pointe at Den Rock Park

 

Lawrence, MA

 

18,100,000

 

4,615,702

 

18,440,147

 

 

64,052

 

4,615,702

 

18,504,199

 

23,119,901

 

(704,549

)

2000

 

30 Years

 

River Stone Ranch

 

Austin, TX

 

 

5,376,000

 

27,003,222

 

 

 

5,376,000

 

27,003,222

 

32,379,222

 

 

1998

 

30 Years

 

Rivers Bend (CT)

 

Windsor, CT

 

(P)

 

3,325,517

 

22,357,068

 

 

635,391

 

3,325,517

 

22,992,459

 

26,317,976

 

(2,678,257

)

1973

 

30 Years

 

Rivers Edge

 

Waterbury, CT

 

 

781,900

 

6,561,167

 

 

404,628

 

781,900

 

6,965,796

 

7,747,696

 

(1,485,010

)

1974

 

30 Years

 

Rivers End I

 

Jacksonville, FL

 

1,318,373

 

171,745

 

1,507,065

 

 

272,715

 

171,745

 

1,779,780

 

1,951,525

 

(319,250

)

1986

 

30 Years

 

Rivers End II

 

Jacksonville, FL

 

 

190,688

 

1,680,171

 

 

212,549

 

190,688

 

1,892,720

 

2,083,408

 

(336,055

)

1986

 

30 Years

 

Riverside Park

 

Tulsa, OK

 

 

1,441,400

 

12,371,637

 

 

635,148

 

1,441,400

 

13,006,785

 

14,448,185

 

(3,115,465

)

1994

 

30 Years

 

Riverview Condominiums

 

Norwalk, CT

 

6,043,522

 

2,300,000

 

7,406,730

 

 

1,104,142

 

2,300,000

 

8,510,872

 

10,810,872

 

(1,065,933

)

1991

 

30 Years

 

Roanoke

 

Rochester Hills, MI

 

40,500

 

369,911

 

3,259,270

 

 

221,891

 

369,911

 

3,481,162

 

3,851,073

 

(557,999

)

1985

 

30 Years

 

Rock Creek

 

Corrboro, NC

 

 

895,700

 

8,062,543

 

 

963,172

 

895,700

 

9,025,714

 

9,921,414

 

(2,477,303

)

1986

 

30 Years

 

Rockingham Glen

 

West Roxbury, MA

 

2,302,721

 

1,124,217

 

7,515,160

 

 

261,169

 

1,124,217

 

7,776,329

 

8,900,546

 

(946,338

)

1974

 

30 Years

 

Rolling Green (Amherst)

 

Amherst, MA

 

3,756,907

 

1,340,702

 

8,962,317

 

 

1,597,677

 

1,340,702

 

10,559,995

 

11,900,697

 

(1,228,978

)

1970

 

30 Years

 

Rolling Green (Milford)

 

Milford, MA

 

7,477,524

 

2,012,350

 

13,452,150

 

 

1,148,524

 

2,012,350

 

14,600,674

 

16,613,024

 

(1,920,082

)

1970

 

30 Years

 

Rosecliff

 

Quincy, MA

 

 

5,460,000

 

15,721,570

 

 

75,371

 

5,460,000

 

15,796,940

 

21,256,940

 

(2,478,175

)

1990

 

30 Years

 

Rosecliff II

 

Quincy, MA

 

 

 

1,379

 

 

 

 

1,379

 

1,379

 

 

(F)

 

30 Years

 

Rosehill Pointe

 

Lenexa, KS

 

 

2,093,300

 

18,863,515

 

 

3,682,660

 

2,093,300

 

22,546,175

 

24,639,475

 

(7,276,267

)

1984

 

30 Years

 

Rosewood (KY)

 

Louisville, KY

 

 

253,453

 

2,233,196

 

 

245,327

 

253,453

 

2,478,524

 

2,731,977

 

(413,910

)

1984

 

30 Years

 

Rosewood (OH)

 

Columbus, OH

 

 

212,378

 

1,871,186

 

 

304,752

 

212,378

 

2,175,938

 

2,388,316

 

(377,371

)

1985

 

30 Years

 

Rosewood Commons I

 

Indianapolis, IN

 

1,747,743

 

228,644

 

2,014,652

 

 

243,722

 

228,644

 

2,258,375

 

2,487,019

 

(418,647

)

1986

 

30 Years

 

Rosewood Commons II

 

Indianapolis, IN

 

 

220,463

 

1,942,520

 

 

198,506

 

220,463

 

2,141,025

 

2,361,488

 

(378,901

)

1987

 

30 Years

 

Royal Oak

 

Eagan, MN

 

13,139,491

 

1,602,904

 

14,423,662

 

 

1,151,929

 

1,602,904

 

15,575,591

 

17,178,495

 

(3,570,120

)

1989

 

30 Years

 

Royal Oaks (FL)

 

Jacksonville, FL

 

 

1,988,000

 

13,645,117

 

 

819,130

 

1,988,000

 

14,464,247

 

16,452,247

 

(2,898,261

)

1991

 

30 Years

 

Royale

 

Cranston, RI

 

(P)

 

512,785

 

3,427,866

 

 

302,220

 

512,785

 

3,730,086

 

4,242,872

 

(440,105

)

1976

 

30 Years

 

Sabal Palm at Boot Ranch

 

Palm Harbor, FL

 

 

3,888,000

 

28,923,692

 

 

1,354,186

 

3,888,000

 

30,277,878

 

34,165,878

 

(5,808,924

)

1996

 

30 Years

 

Sabal Palm at Carrollwood Place

 

Tampa, FL

 

 

3,888,000

 

26,911,542

 

 

808,651

 

3,888,000

 

27,720,194

 

31,608,194

 

(5,327,152

)

1995

 

30 Years

 

Sabal Palm at Lake Buena Vista

 

Orlando, FL

 

21,170,000

 

2,800,000

 

23,687,893

 

 

970,061

 

2,800,000

 

24,657,954

 

27,457,954

 

(4,900,247

)

1988

 

30 Years

 

Sabal Palm at Metrowest

 

Orlando, FL

 

 

4,110,000

 

38,394,865

 

 

1,419,984

 

4,110,000

 

39,814,849

 

43,924,849

 

(7,503,616

)

1998

 

30 Years

 

Sabal Palm at Metrowest II

 

Orlando, FL

 

 

4,560,000

 

33,907,283

 

 

640,411

 

4,560,000

 

34,547,694

 

39,107,694

 

(6,519,276

)

1997

 

30 Years

 

Sabal Pointe

 

Coral Springs, FL

 

 

1,951,600

 

17,570,508

 

 

1,947,786

 

1,951,600

 

19,518,293

 

21,469,893

 

(5,474,780

)

1995

 

30 Years

 

Saddle Ridge

 

Ashburn, VA

 

 

1,364,800

 

12,283,616

 

 

1,018,242

 

1,364,800

 

13,301,858

 

14,666,658

 

(3,982,875

)

1989

 

30 Years

 

Sailboat Bay

 

Raleigh, NC

 

 

960,000

 

8,797,580

 

 

526,902

 

960,000

 

9,324,481

 

10,284,481

 

(1,902,426

)

1986

 

30 Years

 

Sandalwood

 

Toledo, OH

 

1,045,804

 

151,926

 

1,338,636

 

 

114,471

 

151,926

 

1,453,107

 

1,605,033

 

(233,610

)

1984

 

30 Years

 

Sandpiper II

 

Fort Pierce, FL

 

 

155,496

 

1,369,987

 

 

329,151

 

155,496

 

1,699,138

 

1,854,633

 

(342,397

)

1982

 

30 Years

 

Sanford Court

 

Sanford, FL

 

1,650,492

 

238,814

 

2,104,212

 

 

376,688

 

238,814

 

2,480,901

 

2,719,715

 

(462,390

)

1976

 

30 Years

 

Savannah Lakes

 

Boynton Beach, FL

 

 

7,000,000

 

30,422,607

 

 

676,786

 

7,000,000

 

31,099,393

 

38,099,393

 

(1,886,885

)

1991

 

30 Years

 

Scarborough Square

 

Rockville, MD

 

4,882,961

 

1,815,000

 

7,608,126

 

 

935,674

 

1,815,000

 

8,543,800

 

10,358,800

 

(1,720,913

)

1967

 

30 Years

 

Schooner Bay I

 

Foster City, CA

 

27,000,000

 

5,345,000

 

16,545,651

 

 

332,419

 

5,345,000

 

16,878,069

 

22,223,069

 

(1,616,661

)

1985

 

30 Years

 

Schooner Bay II

 

Foster City, CA

 

23,760,000

 

4,550,000

 

14,607,259

 

 

243,973

 

4,550,000

 

14,851,232

 

19,401,232

 

(1,412,123

)

1985

 

30 Years

 

Scottsdale Meadows

 

Scottsdale, AZ

 

 

1,512,000

 

11,407,699

 

 

694,323

 

1,512,000

 

12,102,022

 

13,614,022

 

(2,754,573

)

1984

 

30 Years

 

Security Manor

 

Westfield, MA

 

(P)

 

355,456

 

2,376,152

 

 

41,258

 

355,456

 

2,417,411

 

2,772,867

 

(295,586

)

1971

 

30 Years

 

Sedona Springs

 

Austin, TX

 

(S)

 

2,574,000

 

23,477,043

 

 

1,234,129

 

2,574,000

 

24,711,172

 

27,285,172

 

(4,892,712

)

1995

 

30 Years

 

 

S - 10



 

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest
Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

Seeley Lake

 

Lakewood, WA

 

 

2,760,400

 

24,845,286

 

 

1,582,124

 

2,760,400

 

26,427,410

 

29,187,810

 

(6,516,192

)

1990

 

30 Years

 

Seventh & James

 

Seattle, WA

 

 

663,800

 

5,974,803

 

 

1,820,483

 

663,800

 

7,795,286

 

8,459,086

 

(2,051,178

)

1992

 

30 Years

 

Shadetree

 

West Palm Beach, FL

 

 

532,000

 

1,420,721

 

 

283,802

 

532,000

 

1,704,523

 

2,236,523

 

(212,389

)

1982

 

30 Years

 

Shadow Bay I

 

Jacksonville, FL

 

 

123,319

 

1,086,720

 

 

126,827

 

123,319

 

1,213,547

 

1,336,866

 

(227,086

)

1984

 

30 Years

 

Shadow Bay II

 

Jacksonville, FL

 

939,366

 

139,709

 

1,231,134

 

 

130,908

 

139,709

 

1,362,042

 

1,501,751

 

(249,910

)

1985

 

30 Years

 

Shadow Brook

 

Scottsdale, AZ

 

 

3,065,496

 

18,367,686

 

 

1,006,542

 

3,065,496

 

19,374,229

 

22,439,725

 

(4,387,421

)

1984

 

30 Years

 

Shadow Lake

 

Doraville, GA

 

 

1,140,000

 

13,117,277

 

 

499,259

 

1,140,000

 

13,616,536

 

14,756,536

 

(2,659,005

)

1989

 

30 Years

 

Shadow Ridge

 

Tallahassee, FL

 

 

150,327

 

1,324,061

 

 

201,436

 

150,327

 

1,525,497

 

1,675,824

 

(274,341

)

1983

 

30 Years

 

Shadow Trace

 

Stone Mountain, GA

 

 

244,320

 

2,152,729

 

 

275,349

 

244,320

 

2,428,078

 

2,672,399

 

(412,778

)

1984

 

30 Years

 

Shadowood I

 

Sarasota, FL

 

600,000

 

157,661

 

1,389,061

 

 

283,025

 

157,661

 

1,672,086

 

1,829,746

 

(291,389

)

1982

 

30 Years

 

Shadowood II

 

Sarasota, FL

 

1,143,860

 

152,031

 

1,339,469

 

 

172,974

 

152,031

 

1,512,443

 

1,664,474

 

(255,675

)

1983

 

30 Years

 

Sheffield Court

 

Arlington, VA

 

 

3,349,350

 

31,960,800

 

 

2,509,237

 

3,349,350

 

34,470,037

 

37,819,387

 

(10,826,625

)

1986

 

30 Years

 

Sherbrook (IN)

 

Indianapolis, IN

 

1,568,329

 

171,920

 

1,514,707

 

 

164,135

 

171,920

 

1,678,842

 

1,850,763

 

(309,064

)

1986

 

30 Years

 

Sherbrook (OH)

 

Columbus, OH

 

1,052,997

 

163,493

 

1,440,036

 

 

207,270

 

163,493

 

1,647,306

 

1,810,799

 

(299,270

)

1985

 

30 Years

 

Sherbrook (PA)

 

Wexford, PA

 

 

279,665

 

2,464,404

 

 

243,036

 

279,665

 

2,707,439

 

2,987,104

 

(454,366

)

1986

 

30 Years

 

Siena Terrace

 

Lake Forest, CA

 

17,573,920

 

8,900,000

 

24,083,024

 

 

1,130,805

 

8,900,000

 

25,213,829

 

34,113,829

 

(4,481,815

)

1988

 

30 Years

 

Silver Creek

 

Phoenix, AZ

 

 

712,102

 

6,707,496

 

 

449,830

 

712,102

 

7,157,325

 

7,869,427

 

(1,721,253

)

1986

 

30 Years

 

Silver Forest

 

Ocala, FL

 

812,993

 

126,536

 

1,114,917

 

 

90,923

 

126,536

 

1,205,840

 

1,332,376

 

(203,580

)

1985

 

30 Years

 

Silver Springs (FL)

 

Jacksonville, FL

 

 

1,831,100

 

16,474,735

 

 

3,824,222

 

1,831,100

 

20,298,956

 

22,130,056

 

(5,320,279

)

1985

 

30 Years

 

Silverwood

 

Mission, KS

 

(M)

 

1,230,000

 

11,070,904

 

 

1,813,201

 

1,230,000

 

12,884,105

 

14,114,105

 

(4,665,507

)

1986

 

30 Years

 

Sky Ridge

 

Woodstock, GA

 

 

437,373

 

3,853,792

 

 

319,157

 

437,373

 

4,172,949

 

4,610,322

 

(685,089

)

1987

 

30 Years

 

Skycrest

 

Valencia, CA

 

17,869,588

 

10,560,000

 

25,574,457

 

 

501,433

 

10,560,000

 

26,075,891

 

36,635,891

 

(2,792,982

)

1999

 

30 Years

 

Skylark

 

Union City, CA

 

 

1,781,600

 

16,731,916

 

 

634,973

 

1,781,600

 

17,366,889

 

19,148,489

 

(3,412,267

)

1986

 

30 Years

 

Skyview

 

Rancho Santa Margarita, CA

 

 

3,380,000

 

21,953,151

 

 

285,960

 

3,380,000

 

22,239,111

 

25,619,111

 

(3,669,255

)

1999

 

30 Years

 

Slate Run (Hop)

 

Hopkinsville, KY

 

 

91,304

 

804,535

 

 

149,446

 

91,304

 

953,982

 

1,045,286

 

(186,317

)

1984

 

30 Years

 

Slate Run (Ind)

 

Indianapolis, IN

 

1,923,536

 

295,593

 

2,604,497

 

 

376,077

 

295,593

 

2,980,574

 

3,276,167

 

(517,808

)

1984

 

30 Years

 

Slate Run (Leb)

 

Lebanon, IN

 

1,167,498

 

154,061

 

1,357,445

 

 

171,473

 

154,061

 

1,528,918

 

1,682,979

 

(286,855

)

1984

 

30 Years

 

Slate Run (Mia)

 

Miamisburg, OH

 

798,435

 

136,065

 

1,198,879

 

 

131,259

 

136,065

 

1,330,138

 

1,466,202

 

(227,079

)

1985

 

30 Years

 

Slate Run I (Lou)

 

Louisville, KY

 

 

179,766

 

1,583,931

 

 

230,722

 

179,766

 

1,814,653

 

1,994,419

 

(314,463

)

1984

 

30 Years

 

Slate Run II (Lou)

 

Louisville, KY

 

1,106,475

 

167,723

 

1,477,722

 

 

149,520

 

167,723

 

1,627,242

 

1,794,965

 

(268,622

)

1985

 

30 Years

 

Sommerset Place

 

Raleigh, NC

 

 

360,000

 

7,800,206

 

 

557,988

 

360,000

 

8,358,194

 

8,718,194

 

(1,682,993

)

1983

 

30 Years

 

Sonata at Cherry Creek

 

Denver, CO

 

 

5,490,000

 

18,130,479

 

 

203,591

 

5,490,000

 

18,334,070

 

23,824,070

 

(2,047,669

)

1999

 

30 Years

 

Sonoran

 

Phoenix, AZ

 

 

2,361,922

 

31,841,724

 

 

936,180

 

2,361,922

 

32,777,903

 

35,139,825

 

(7,269,557

)

1995

 

30 Years

 

Sonterra at Foothill Ranch

 

Foothill Ranch, CA

 

(R)

 

7,503,400

 

24,048,507

 

 

675,469

 

7,503,400

 

24,723,975

 

32,227,375

 

(5,013,525

)

1997

 

30 Years

 

South Creek

 

Phoenix, AZ

 

 

2,671,300

 

24,042,042

 

 

1,980,737

 

2,671,300

 

26,022,779

 

28,694,079

 

(7,603,070

)

1986-89

 

30 Years

 

South Pointe

 

St. Louis, MO

 

7,110,250

 

961,100

 

8,651,150

 

 

1,496,273

 

961,100

 

10,147,423

 

11,108,523

 

(2,665,618

)

1986

 

30 Years

 

South Shore

 

Stockton, CA

 

6,833,000

 

840,000

 

6,512,941

 

 

432,015

 

840,000

 

6,944,956

 

7,784,956

 

(783,989

)

1979

 

30 Years

 

South Winds

 

Fall River, MA

 

7,488,464

 

2,481,821

 

16,780,359

 

 

1,175,389

 

2,481,821

 

17,955,748

 

20,437,569

 

(2,308,614

)

1971

 

30 Years

 

Southwood

 

Palo Alto, CA

 

 

6,936,600

 

14,324,069

 

 

1,116,794

 

6,936,600

 

15,440,863

 

22,377,463

 

(3,313,616

)

1985

 

30 Years

 

Spicewood

 

Indianapolis, IN

 

984,566

 

128,355

 

1,131,044

 

 

114,620

 

128,355

 

1,245,663

 

1,374,018

 

(213,083

)

1986

 

30 Years

 

Spinnaker Cove

 

Hermitage, TN

 

(M)

 

1,461,731

 

12,770,421

 

 

1,412,292

 

1,461,731

 

14,182,713

 

15,644,445

 

(3,808,274

)

1986

 

30 Years

 

Spring Gate

 

Springfield, FL

 

 

132,951

 

1,171,447

 

 

272,217

 

132,951

 

1,443,664

 

1,576,615

 

(304,908

)

1983

 

30 Years

 

Spring Hill Commons

 

Acton, MA

 

 

1,107,436

 

7,402,980

 

 

300,944

 

1,107,436

 

7,703,924

 

8,811,359

 

(901,028

)

1973

 

30 Years

 

Spring Lake Manor

 

Birmingham, AL (T)

 

3,740,851

 

199,992

 

4,512,048

 

 

1,119,209

 

199,992

 

5,631,257

 

5,831,249

 

(1,071,148

)

1972

 

30 Years

 

Springbrook

 

Anderson, SC

 

1,575,700

 

168,959

 

1,488,611

 

 

267,891

 

168,959

 

1,756,503

 

1,925,461

 

(311,023

)

1986

 

30 Years

 

Springs Colony

 

Altamonte Springs, FL

 

(M)

 

630,411

 

5,852,157

 

 

1,281,317

 

630,411

 

7,133,474

 

7,763,885

 

(2,829,155

)

1986

 

30 Years

 

Springtree (REIT)

 

W. Palm Beach, FL

 

1,149,515

 

183,100

 

1,648,301

 

 

90,966

 

183,100

 

1,739,267

 

1,922,367

 

(202,311

)

1982

 

30 Years

 

Springwood (Col)

 

Columbus, OH

 

1,015,117

 

189,948

 

1,672,889

 

 

245,781

 

189,948

 

1,918,670

 

2,108,617

 

(325,450

)

1983

 

30 Years

 

Springwood (IN)

 

New Haven, IN

 

 

119,199

 

1,050,338

 

 

143,580

 

119,199

 

1,193,918

 

1,313,117

 

(212,714

)

1981

 

30 Years

 

Squaw Peak Condo, LLC

 

Phoenix, AZ

 

 

7,498

 

124,156

 

 

32,825

 

7,498

 

156,981

 

164,479

 

(24,323

)

1990

 

30 Years

 

St. Andrews at Winston Park

 

Coconut Creek, FL

 

 

5,680,000

 

19,812,090

 

 

406,866

 

5,680,000

 

20,218,956

 

25,898,956

 

(1,342,002

)

1997

 

30 Years

 

Steeplechase

 

Charlotte, NC

 

 

1,111,500

 

10,180,750

 

 

613,398

 

1,111,500

 

10,794,148

 

11,905,648

 

(2,281,835

)

1986

 

30 Years

 

Sterling Point

 

Littleton, CO

 

 

935,500

 

8,419,200

 

 

784,268

 

935,500

 

9,203,468

 

10,138,968

 

(2,300,029

)

1979

 

30 Years

 

Stewart Way I

 

Hinesville, GA

 

2,060,800

 

290,773

 

2,562,373

 

 

272,848

 

290,773

 

2,835,222

 

3,125,994

 

(513,877

)

1986

 

30 Years

 

Stillwater

 

Savannah, GA

 

 

151,198

 

1,332,417

 

 

105,348

 

151,198

 

1,437,765

 

1,588,963

 

(239,402

)

1983

 

30 Years

 

Stone Crossing

 

Montgomery, AL (T)

 

1,918,463

 

103,186

 

2,716,316

 

 

405,232

 

103,186

 

3,121,547

 

3,224,733

 

(620,204

)

1973

 

30 Years

 

Stone Oak

 

Houston, TX

 

 

2,544,000

 

17,513,496

 

 

138,398

 

2,544,000

 

17,651,895

 

20,195,895

 

(914,290

)

1998

 

30 Years

 

Stonehenge (Day)

 

Dayton, OH

 

 

202,294

 

1,782,140

 

 

205,640

 

202,294

 

1,987,780

 

2,190,074

 

(346,876

)

1985

 

30 Years

 

Stonehenge (Ind)

 

Indianapolis, IN

 

1,136,910

 

146,810

 

1,293,559

 

 

247,831

 

146,810

 

1,541,390

 

1,688,200

 

(299,613

)

1984

 

30 Years

 

Stonehenge (Jas)

 

Jasper, IN

 

 

78,335

 

690,214

 

 

96,915

 

78,335

 

787,129

 

865,464

 

(137,672

)

1985

 

30 Years

 

Stonehenge (KY)

 

Glasgow, KY

 

752,474

 

111,632

 

983,596

 

 

104,538

 

111,632

 

1,088,134

 

1,199,765

 

(197,328

)

1983

 

30 Years

 

Stonehenge (Mas)

 

Massillon, OH

 

 

145,386

 

1,281,012

 

 

242,405

 

145,386

 

1,523,417

 

1,668,803

 

(267,673

)

1984

 

30 Years

 

Stonehenge I (Ric)

 

Richmond, IN

 

1,064,539

 

156,343

 

1,377,552

 

 

227,939

 

156,343

 

1,605,491

 

1,761,834

 

(303,795

)

1984

 

30 Years

 

Stoney Creek

 

Lakewood, WA

 

 

1,215,200

 

10,938,134

 

 

903,319

 

1,215,200

 

11,841,453

 

13,056,653

 

(2,952,499

)

1990

 

30 Years

 

Stratford Square

 

Winter Park, FL (T)

 

4,872,608

 

391,300

 

3,176,441

 

 

399,583

 

391,300

 

3,576,025

 

3,967,325

 

(704,981

)

1972

 

30 Years

 

Sturbridge Meadows

 

Sturbridge, MA

 

2,192,319

 

702,447

 

4,695,714

 

 

148,370

 

702,447

 

4,844,084

 

5,546,531

 

(589,662

)

1985

 

30 Years

 

Suffolk Grove I

 

Grove City, OH

 

 

214,107

 

1,886,415

 

 

274,437

 

214,107

 

2,160,851

 

2,374,958

 

(361,108

)

1985

 

30 Years

 

Suffolk Grove II

 

Grove City, OH

 

 

167,683

 

1,477,569

 

 

234,035

 

167,683

 

1,711,603

 

1,879,286

 

(276,671

)

1987

 

30 Years

 

Sugartree I

 

New Smyna Beach, FL

 

912,950

 

155,018

 

1,453,696

 

 

269,138

 

155,018

 

1,722,834

 

1,877,852

 

(287,839

)

1984

 

30 Years

 

Sugartree II (REIT)

 

New Smyna Beach, FL

 

1,464,000

 

178,416

 

1,599,476

 

 

4,661

 

178,416

 

1,604,136

 

1,782,552

 

(5,710

)

1985

 

30 Years

 

Summer Chase

 

Denver, CO

 

(Q)

 

1,709,200

 

15,375,008

 

 

2,343,729

 

1,709,200

 

17,718,737

 

19,427,937

 

(5,495,310

)

1983

 

30 Years

 

Summer Creek

 

Plymouth, MN

 

 

579,600

 

3,815,800

 

 

421,752

 

579,600

 

4,237,553

 

4,817,153

 

(969,205

)

1985

 

30 Years

 

Summer Ridge

 

Riverside, CA

 

 

602,400

 

5,422,807

 

 

1,224,153

 

602,400

 

6,646,960

 

7,249,360

 

(1,689,570

)

1985

 

30 Years

 

 

S - 11



 

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest
Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

Summerhill Glen

 

Maynard, MA

 

1,876,560

 

415,812

 

2,779,618

 

 

250,259

 

415,812

 

3,029,877

 

3,445,689

 

(418,281

)

1980

 

30 Years

 

Summerset Village

 

Chatsworth, CA

 

(Q)

 

2,630,700

 

23,670,889

 

 

927,945

 

2,630,700

 

24,598,834

 

27,229,534

 

(6,401,512

)

1985

 

30 Years

 

Summerset Village II

 

Chatsworth, CA

 

 

260,646

 

31,577

 

 

 

260,646

 

31,577

 

292,223

 

 

(F)

 

30 Years

 

Summerwood

 

Hayward, CA

 

 

4,866,600

 

6,942,743

 

 

669,600

 

4,866,600

 

7,612,343

 

12,478,943

 

(1,688,456

)

1982

 

30 Years

 

Summit & Birch Hill

 

Farmington, CT

 

(P)

 

1,757,438

 

11,748,112

 

 

405,302

 

1,757,438

 

12,153,415

 

13,910,853

 

(1,415,404

)

1967

 

30 Years

 

Summit at Lake Union

 

Seattle, WA

 

 

1,424,700

 

12,852,461

 

 

1,093,233

 

1,424,700

 

13,945,694

 

15,370,394

 

(3,453,111

)

1995 - 1997

 

30 Years

 

Summit Center (FL)

 

W. Palm Beach, FL

 

2,154,803

 

670,000

 

1,733,312

 

 

347,200

 

670,000

 

2,080,512

 

2,750,512

 

(329,144

)

1987

 

30 Years

 

Sun Creek

 

Glendale, AZ

 

 

896,929

 

7,066,940

 

 

472,809

 

896,929

 

7,539,749

 

8,436,678

 

(1,781,416

)

1985

 

30 Years

 

Sunforest

 

Davie, FL

 

 

10,000,000

 

32,121,050

 

 

13,424

 

10,000,000

 

32,134,474

 

42,134,474

 

(132,386

)

1989

 

30 Years

 

Sunnyside

 

Tifton, GA

 

1,248,618

 

166,887

 

1,470,612

 

 

192,179

 

166,887

 

1,662,792

 

1,829,679

 

(304,951

)

1984

 

30 Years

 

Sunset Way I

 

Miami, FL

 

 

258,568

 

2,278,539

 

 

321,627

 

258,568

 

2,600,166

 

2,858,734

 

(458,646

)

1987

 

30 Years

 

Sunset Way II

 

Miami, FL

 

2,485,888

 

274,903

 

2,422,546

 

 

245,074

 

274,903

 

2,667,621

 

2,942,524

 

(456,922

)

1988

 

30 Years

 

Suntree

 

West Palm Beach, FL

 

 

469,000

 

1,479,589

 

 

65,394

 

469,000

 

1,544,983

 

2,013,983

 

(164,883

)

1982

 

30 Years

 

Surrey Downs

 

Bellevue, WA

 

 

3,057,100

 

7,848,618

 

 

608,249

 

3,057,100

 

8,456,867

 

11,513,967

 

(1,748,004

)

1986

 

30 Years

 

Sutton Place

 

Dallas, TX

 

 

1,358,400

 

12,227,725

 

 

3,657,746

 

1,358,400

 

15,885,471

 

17,243,871

 

(6,843,178

)

1985

 

30 Years

 

Sutton Place (FL)

 

Lakeland, FL

 

795,540

 

120,887

 

1,065,150

 

 

214,451

 

120,887

 

1,279,601

 

1,400,488

 

(247,679

)

1984

 

30 Years

 

Sweetwater Glen

 

Lawrenceville, GA

 

 

500,000

 

10,469,749

 

 

712,316

 

500,000

 

11,182,065

 

11,682,065

 

(2,244,007

)

1986

 

30 Years

 

Sycamore Creek

 

Scottsdale, AZ

 

 

3,152,000

 

19,083,727

 

 

1,166,835

 

3,152,000

 

20,250,562

 

23,402,562

 

(4,833,680

)

1984

 

30 Years

 

Tabor Ridge

 

Berea, OH

 

 

235,940

 

2,079,290

 

 

385,159

 

235,940

 

2,464,449

 

2,700,389

 

(433,163

)

1986

 

30 Years

 

Talleyrand

 

Tarrytown, NY (M)

 

35,000,000

 

12,000,000

 

49,799,370

 

 

195,526

 

12,000,000

 

49,994,897

 

61,994,897

 

(3,950,421

)

1997-98

 

30 Years

 

Tamarlane

 

Portland, ME

 

 

690,900

 

5,153,633

 

 

377,470

 

690,900

 

5,531,102

 

6,222,002

 

(1,393,532

)

1986

 

30 Years

 

Tanasbourne Terrace

 

Hillsboro, OR

 

(Q)

 

1,876,700

 

16,891,205

 

 

2,170,755

 

1,876,700

 

19,061,959

 

20,938,659

 

(6,911,561

)

1986-89

 

30 Years

 

Tanglewood (RI)

 

West Warwick, RI

 

6,389,150

 

1,141,415

 

7,630,129

 

 

243,111

 

1,141,415

 

7,873,240

 

9,014,655

 

(941,648

)

1973

 

30 Years

 

Tanglewood (VA)

 

Manassas, VA

 

25,110,000

 

2,108,295

 

20,932,971

 

 

2,263,895

 

2,108,295

 

23,196,866

 

25,305,161

 

(7,671,699

)

1987

 

30 Years

 

Terrace Trace

 

Tampa, FL

 

1,534,614

 

193,916

 

1,708,615

 

 

263,210

 

193,916

 

1,971,825

 

2,165,741

 

(348,617

)

1985

 

30 Years

 

Three Chopt West

 

Richmond, VA (T)

 

8,882,073

 

432,957

 

8,256,577

 

 

495,750

 

432,957

 

8,752,327

 

9,185,283

 

(1,459,347

)

1962

 

30 Years

 

Thymewood II

 

Miami, FL

 

 

219,661

 

1,936,463

 

 

166,547

 

219,661

 

2,103,010

 

2,322,671

 

(341,424

)

1986

 

30 Years

 

Tierra Antigua

 

Albuquerque, NM

 

6,330,489

 

1,825,000

 

7,792,856

 

 

252,718

 

1,825,000

 

8,045,574

 

9,870,574

 

(870,271

)

1985

 

30 Years

 

Timber Hollow

 

Chapel Hill, NC

 

 

800,000

 

11,219,537

 

 

1,032,692

 

800,000

 

12,252,229

 

13,052,229

 

(2,414,359

)

1986

 

30 Years

 

Timbercreek

 

Toledo, OH

 

1,445,801

 

203,420

 

1,792,350

 

 

267,464

 

203,420

 

2,059,814

 

2,263,234

 

(339,649

)

1987

 

30 Years

 

Timberwalk

 

Jacksonville, FL

 

 

1,988,000

 

13,204,219

 

 

869,787

 

1,988,000

 

14,074,005

 

16,062,005

 

(2,869,680

)

1987

 

30 Years

 

Timberwood

 

Aurora, CO

 

 

1,518,600

 

14,587,786

 

 

1,334,272

 

1,518,600

 

15,922,058

 

17,440,658

 

(3,615,620

)

1983

 

30 Years

 

Timberwood (GA)

 

Perry, GA

 

 

144,299

 

1,271,305

 

 

94,501

 

144,299

 

1,365,806

 

1,510,105

 

(233,024

)

1985

 

30 Years

 

Toscana

 

Irvine, CA

 

 

39,410,000

 

50,806,072

 

 

1,963,386

 

39,410,000

 

52,769,458

 

92,179,458

 

(5,879,370

)

1991/1993

 

30 Years

 

Town Center (TX)

 

Kingwood, TX

 

 

1,291,300

 

11,530,216

 

 

677,064

 

1,291,300

 

12,207,280

 

13,498,580

 

(3,088,456

)

1994

 

30 Years

 

Town Center II (TX)

 

Kingwood, TX

 

 

1,375,000

 

14,169,656

 

 

92,683

 

1,375,000

 

14,262,339

 

15,637,339

 

(2,129,327

)

1994

 

30 Years

 

Townhomes of Meadowbrook

 

Auburn Hills, MI

 

 

1,382,600

 

12,366,207

 

 

2,031,882

 

1,382,600

 

14,398,089

 

15,780,689

 

(3,311,501

)

1988

 

30 Years

 

Townhouse Park

 

Richmond, VA (T)

 

7,513,063

 

384,176

 

9,599,803

 

 

1,833,117

 

384,176

 

11,432,921

 

11,817,097

 

(2,137,078

)

1966

 

30 Years

 

Trails (CO), The

 

Aurora, CO

 

(Q)

 

1,217,900

 

8,877,205

 

 

2,982,727

 

1,217,900

 

11,859,932

 

13,077,832

 

(4,951,924

)

1986

 

30 Years

 

Trails at Briar Forest

 

Houston, TX

 

12,872,732

 

2,380,000

 

24,911,561

 

 

1,192,701

 

2,380,000

 

26,104,262

 

28,484,262

 

(5,197,725

)

1990

 

30 Years

 

Trails at Dominion Park

 

Houston, TX

 

7,723,516

 

2,531,800

 

35,699,589

 

 

2,910,713

 

2,531,800

 

38,610,302

 

41,142,102

 

(10,183,458

)

1992

 

30 Years

 

Trailway Pond I

 

Burnsville, MN

 

4,909,210

 

479,284

 

4,312,144

 

 

403,791

 

479,284

 

4,715,934

 

5,195,218

 

(1,138,723

)

1988

 

30 Years

 

Trailway Pond II

 

Burnsville, MN

 

11,354,755

 

1,107,288

 

9,961,409

 

 

644,136

 

1,107,288

 

10,605,545

 

11,712,833

 

(2,427,689

)

1988

 

30 Years

 

Turf Club

 

Littleton, CO

 

(S)

 

2,107,300

 

15,478,040

 

 

1,934,901

 

2,107,300

 

17,412,941

 

19,520,241

 

(4,083,126

)

1986

 

30 Years

 

Turkscap I

 

Brandon, FL

 

 

125,766

 

1,108,139

 

 

322,728

 

125,766

 

1,430,867

 

1,556,634

 

(295,788

)

1977

 

30 Years

 

Turkscap III

 

Brandon, FL

 

729,035

 

135,850

 

1,196,987

 

 

258,285

 

135,850

 

1,455,272

 

1,591,122

 

(242,119

)

1982

 

30 Years

 

Tyrone Gardens

 

Randolph, MA

 

 

4,953,000

 

5,799,572

 

 

679,815

 

4,953,000

 

6,479,387

 

11,432,387

 

(1,483,661

)

1961/1965

 

30 Years

 

University Square I

 

Tampa, FL

 

 

197,457

 

1,739,807

 

 

234,450

 

197,457

 

1,974,257

 

2,171,714

 

(332,769

)

1979

 

30 Years

 

Valencia Plantation

 

Orlando, FL

 

 

873,000

 

12,819,377

 

 

384,967

 

873,000

 

13,204,344

 

14,077,344

 

(2,495,796

)

1990

 

30 Years

 

Valley Creek I

 

Woodbury, MN

 

12,815,000

 

1,626,715

 

14,634,831

 

 

1,504,662

 

1,626,715

 

16,139,493

 

17,766,209

 

(3,756,858

)

1989

 

30 Years

 

Valley Creek II

 

Woodbury, MN

 

10,100,000

 

1,232,659

 

11,097,830

 

 

765,938

 

1,232,659

 

11,863,768

 

13,096,428

 

(2,663,664

)

1990

 

30 Years

 

Valleybrook

 

Newnan, GA

 

1,414,495

 

254,490

 

2,242,463

 

 

108,741

 

254,490

 

2,351,204

 

2,605,694

 

(381,531

)

1986

 

30 Years

 

Valleyfield (KY)

 

Lexington, KY

 

1,740,813

 

252,329

 

2,223,757

 

 

260,550

 

252,329

 

2,484,307

 

2,736,636

 

(440,253

)

1985

 

30 Years

 

Valleyfield (PA)

 

Bridgeville, PA

 

 

274,317

 

2,417,029

 

 

307,998

 

274,317

 

2,725,026

 

2,999,343

 

(452,316

)

1985

 

30 Years

 

Valleyfield I

 

Decatur, GA

 

1,514,792

 

252,413

 

2,224,134

 

 

218,107

 

252,413

 

2,442,241

 

2,694,654

 

(411,615

)

1984

 

30 Years

 

Valleyfield II

 

Decatur, GA

 

 

258,320

 

2,276,084

 

 

146,094

 

258,320

 

2,422,178

 

2,680,498

 

(389,016

)

1985

 

30 Years

 

Van Deene Manor

 

West Springfield, MA

 

(P)

 

744,491

 

4,976,771

 

 

96,506

 

744,491

 

5,073,277

 

5,817,768

 

(607,632

)

1970

 

30 Years

 

Versailles

 

Woodland Hills, CA

 

 

12,650,000

 

33,654,342

 

 

3,740

 

12,650,000

 

33,658,082

 

46,308,082

 

(104,004

)

1991

 

30 Years

 

Via Ventura

 

Scottsdale, AZ

 

 

1,486,600

 

13,382,006

 

 

6,335,430

 

1,486,600

 

19,717,436

 

21,204,036

 

(8,393,661

)

1980

 

30 Years

 

Villa Encanto

 

Phoenix, AZ

 

(S)

 

2,884,447

 

22,197,363

 

 

1,704,496

 

2,884,447

 

23,901,859

 

26,786,306

 

(5,833,974

)

1983

 

30 Years

 

Villa Solana

 

Laguna Hills, CA

 

 

1,665,100

 

14,985,678

 

 

2,989,444

 

1,665,100

 

17,975,121

 

19,640,221

 

(6,453,189

)

1984

 

30 Years

 

Village at Bear Creek

 

Lakewood, CO

 

(R)

 

4,519,700

 

40,676,390

 

 

1,301,305

 

4,519,700

 

41,977,695

 

46,497,395

 

(9,802,762

)

1987

 

30 Years

 

Village at Lakewood

 

Phoenix, AZ

 

(O)

 

3,166,411

 

13,859,090

 

 

1,023,827

 

3,166,411

 

14,882,916

 

18,049,327

 

(3,551,056

)

1988

 

30 Years

 

Village Oaks

 

Austin, TX

 

 

1,186,000

 

10,663,736

 

 

1,161,415

 

1,186,000

 

11,825,151

 

13,011,151

 

(3,431,763

)

1984

 

30 Years

 

Village of Newport

 

Kent, WA

 

 

416,300

 

3,756,582

 

 

492,654

 

416,300

 

4,249,236

 

4,665,536

 

(1,559,011

)

1987

 

30 Years

 

Villas at Josey Ranch

 

Carrollton, TX

 

6,410,258

 

1,587,700

 

7,254,727

 

 

818,013

 

1,587,700

 

8,072,740

 

9,660,440

 

(1,844,235

)

1986

 

30 Years

 

Viridian Lake

 

Fort Myers, FL

 

 

960,000

 

17,806,758

 

 

1,458,915

 

960,000

 

19,265,673

 

20,225,673

 

(3,904,845

)

1991

 

30 Years

 

Vista Del Lago

 

Mission Viejo, CA

 

 

4,525,800

 

40,736,293

 

 

4,667,285

 

4,525,800

 

45,403,578

 

49,929,378

 

(16,066,869

)

1986-88

 

30 Years

 

Vista Del Lago (TX)

 

Dallas, TX

 

 

3,552,000

 

20,108,469

 

 

326,945

 

3,552,000

 

20,435,415

 

23,987,415

 

(1,900,962

)

1992

 

30 Years

 

Vista Grove

 

Mesa, AZ

 

 

1,341,796

 

12,157,045

 

 

441,042

 

1,341,796

 

12,598,088

 

13,939,884

 

(2,678,113

)

1997 - 1998

 

30 Years

 

Walden Wood

 

Southfield, MI

 

 

834,700

 

7,513,690

 

 

2,148,370

 

834,700

 

9,662,061

 

10,496,761

 

(3,934,403

)

1972

 

30 Years

 

Warwick Station

 

Westminster, CO

 

8,313,000

 

2,282,000

 

20,543,195

 

 

844,121

 

2,282,000

 

21,387,316

 

23,669,316

 

(5,137,396

)

1986

 

30 Years

 

Waterbury (GA)

 

Athens, GA

 

 

147,450

 

1,299,195

 

 

62,190

 

147,450

 

1,361,385

 

1,508,835

 

(223,205

)

1985

 

30 Years

 

 

S - 12



 

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest
Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

Waterbury (IN)

 

Greenwood, IN

 

781,626

 

105,245

 

927,324

 

 

89,193

 

105,245

 

1,016,517

 

1,121,762

 

(182,911

)

1984

 

30 Years

 

Waterbury (MI)

 

Westland, MI

 

 

331,739

 

2,922,589

 

 

282,527

 

331,739

 

3,205,115

 

3,536,854

 

(549,969

)

1985

 

30 Years

 

Waterbury (OH)

 

Cincinnati, OH

 

 

193,167

 

1,701,834

 

 

284,798

 

193,167

 

1,986,632

 

2,179,799

 

(360,195

)

1985

 

30 Years

 

Waterfield Square I

 

Stockton, CA

 

6,923,000

 

950,000

 

6,297,993

 

 

791,738

 

950,000

 

7,089,731

 

8,039,731

 

(799,951

)

1984

 

30 Years

 

Waterfield Square II

 

Stockton, CA

 

6,595,000

 

845,000

 

5,811,080

 

 

700,016

 

845,000

 

6,511,096

 

7,356,096

 

(732,348

)

1984

 

30 Years

 

Waterford (Jax)

 

Jacksonville, FL

 

 

3,024,000

 

23,662,293

 

 

1,311,729

 

3,024,000

 

24,974,021

 

27,998,021

 

(5,170,094

)

1988

 

30 Years

 

Waterford (Jax) II

 

Jacksonville, FL

 

 

566,923

 

62,373

 

 

 

566,923

 

62,373

 

629,296

 

 

(F)

 

30 Years

 

Waterford at Deerwood

 

Jacksonville, FL

 

10,345,849

 

1,696,000

 

10,659,702

 

 

1,236,077

 

1,696,000

 

11,895,778

 

13,591,778

 

(2,522,798

)

1985

 

30 Years

 

Waterford at Orange Park

 

Orange Park, FL

 

9,540,000

 

1,960,000

 

12,098,784

 

 

1,355,788

 

1,960,000

 

13,454,572

 

15,414,572

 

(3,276,019

)

1986

 

30 Years

 

Waterford at the Lakes

 

Kent, WA

 

 

3,100,200

 

16,140,924

 

 

1,219,276

 

3,100,200

 

17,360,200

 

20,460,400

 

(4,527,302

)

1990

 

30 Years

 

Waterford Village (Palm Beach)

 

Delray Beach, FL

 

 

1,888,000

 

15,358,635

 

 

1,959,339

 

1,888,000

 

17,317,974

 

19,205,974

 

(3,916,570

)

1989

 

30 Years

 

Waterstone Place

 

Federal Way, WA

 

 

2,964,000

 

26,674,599

 

 

4,416,108

 

2,964,000

 

31,090,707

 

34,054,707

 

(12,205,406

)

1990

 

30 Years

 

Webster Green

 

Needham, MA

 

6,187,573

 

1,418,893

 

9,485,006

 

 

206,987

 

1,418,893

 

9,691,993

 

11,110,885

 

(1,098,101

)

1985

 

30 Years

 

Welleby Lake Club

 

Sunrise, FL

 

 

3,648,000

 

17,620,879

 

 

758,136

 

3,648,000

 

18,379,015

 

22,027,015

 

(3,650,445

)

1991

 

30 Years

 

Wellington Hill

 

Manchester, NH

 

(M)

 

1,890,200

 

17,120,662

 

 

3,390,982

 

1,890,200

 

20,511,644

 

22,401,844

 

(7,516,096

)

1987

 

30 Years

 

Wellsford Oaks

 

Tulsa, OK

 

 

1,310,500

 

11,794,290

 

 

857,700

 

1,310,500

 

12,651,989

 

13,962,489

 

(3,192,873

)

1991

 

30 Years

 

Wentworth

 

Roseville, MI

 

 

217,502

 

1,916,232

 

 

281,143

 

217,502

 

2,197,375

 

2,414,877

 

(372,457

)

1985

 

30 Years

 

West Of Eastland

 

Columbus, OH

 

1,906,620

 

234,544

 

2,066,675

 

 

357,042

 

234,544

 

2,423,717

 

2,658,260

 

(441,499

)

1977

 

30 Years

 

Westbrooke Village

 

Manchester, MO

 

 

1,890,000

 

10,606,343

 

 

958,256

 

1,890,000

 

11,564,599

 

13,454,599

 

(2,108,431

)

1984

 

30 Years

 

Westbrooke Village II

 

Manchester, MO

 

 

420,000

 

 

 

 

420,000

 

 

420,000

 

 

(F)

 

30 Years

 

Westridge

 

Tacoma, WA

 

 

3,501,900

 

31,506,082

 

 

2,538,045

 

3,501,900

 

34,044,127

 

37,546,027

 

(8,708,871

)

1987/1991

 

30 Years

 

Westside Villas I

 

Los Angeles, CA

 

 

1,785,000

 

3,233,254

 

 

157,841

 

1,785,000

 

3,391,095

 

5,176,095

 

(394,139

)

1999

 

30 Years

 

Westside Villas II

 

Los Angeles, CA

 

 

1,955,000

 

3,541,435

 

 

11,214

 

1,955,000

 

3,552,649

 

5,507,649

 

(407,762

)

1999

 

30 Years

 

Westside Villas III

 

Los Angeles, CA

 

 

3,060,000

 

5,538,871

 

 

28,120

 

3,060,000

 

5,566,991

 

8,626,991

 

(642,083

)

1999

 

30 Years

 

Westside Villas IV

 

Los Angeles, CA

 

 

3,060,000

 

5,539,390

 

 

11,124

 

3,060,000

 

5,550,515

 

8,610,515

 

(636,260

)

1999

 

30 Years

 

Westside Villas V

 

Los Angeles, CA

 

 

5,100,000

 

9,224,485

 

 

29,547

 

5,100,000

 

9,254,032

 

14,354,032

 

(1,060,105

)

1999

 

30 Years

 

Westside Villas VI

 

Los Angeles, CA

 

 

1,530,000

 

3,024,001

 

 

73,351

 

1,530,000

 

3,097,352

 

4,627,352

 

(328,207

)

1989

 

30 Years

 

Westside Villas VII

 

Los Angeles, CA

 

 

4,505,000

 

10,758,900

 

 

26,912

 

4,505,000

 

10,785,811

 

15,290,811

 

(595,141

)

2001

 

30 Years

 

Westway

 

Brunswick, GA

 

 

168,323

 

1,483,106

 

 

219,049

 

168,323

 

1,702,156

 

1,870,478

 

(303,524

)

1984

 

30 Years

 

Westwood Glen

 

Westwood, MA

 

1,344,978

 

1,616,505

 

10,806,004

 

 

240,450

 

1,616,505

 

11,046,453

 

12,662,958

 

(1,280,878

)

1972

 

30 Years

 

Westwood Pines

 

Tamarac, FL

 

 

1,528,600

 

13,739,616

 

 

959,703

 

1,528,600

 

14,699,319

 

16,227,919

 

(3,423,115

)

1991

 

30 Years

 

Westwynd Apts

 

West Hartford, CT

 

 

308,543

 

2,062,548

 

 

177,601

 

308,543

 

2,240,148

 

2,548,692

 

(275,062

)

1969

 

30 Years

 

Whispering Oaks

 

Walnut Creek, CA

 

 

2,170,800

 

19,539,586

 

 

2,269,117

 

2,170,800

 

21,808,703

 

23,979,503

 

(6,128,186

)

1974

 

30 Years

 

Whispering Pines

 

Fr. Pierce, FL

 

 

384,000

 

621,367

 

 

230,255

 

384,000

 

851,622

 

1,235,622

 

(151,755

)

1986

 

30 Years

 

Whispering Pines II

 

Fr. Pierce, FL

 

 

105,172

 

926,476

 

 

143,521

 

105,172

 

1,069,997

 

1,175,168

 

(191,922

)

1986

 

30 Years

 

Whisperwood

 

Cordele, GA

 

 

84,240

 

742,374

 

 

189,325

 

84,240

 

931,698

 

1,015,939

 

(176,151

)

1985

 

30 Years

 

White Bear Woods

 

White Bear Lake, MN

 

14,172,876

 

1,624,741

 

14,618,490

 

 

1,241,772

 

1,624,741

 

15,860,261

 

17,485,002

 

(3,550,011

)

1989

 

30 Years

 

Wilcrest Woods

 

Savannah, GA

 

1,264,266

 

187,306

 

1,650,373

 

 

144,523

 

187,306

 

1,794,896

 

1,982,202

 

(302,783

)

1986

 

30 Years

 

Wilde Lake

 

Richmond, VA

 

4,440,000

 

947,200

 

8,594,105

 

 

868,379

 

947,200

 

9,462,484

 

10,409,684

 

(2,638,845

)

1989

 

30 Years

 

Wilkins Glen

 

Medfield, MA

 

1,676,372

 

538,483

 

3,599,646

 

 

257,753

 

538,483

 

3,857,399

 

4,395,882

 

(488,351

)

1975

 

30 Years

 

Willow Brook (CA)

 

Pleasant Hill, CA

 

29,000,000

 

5,055,000

 

19,212,153

 

 

499,628

 

5,055,000

 

19,711,781

 

24,766,781

 

(1,924,670

)

1985

 

30 Years

 

Willow Creek

 

Fresno, CA

 

5,112,000

 

275,000

 

5,045,091

 

 

341,634

 

275,000

 

5,386,725

 

5,661,725

 

(592,560

)

1984

 

30 Years

 

Willow Creek I (GA)

 

Griffin, GA

 

 

145,769

 

1,298,973

 

 

119,792

 

145,769

 

1,418,765

 

1,564,534

 

(227,805

)

1985

 

30 Years

 

Willow Lakes

 

Spartanburg, SC

 

1,922,871

 

200,990

 

1,770,937

 

 

227,743

 

200,990

 

1,998,681

 

2,199,670

 

(342,494

)

1986

 

30 Years

 

Willow Run (GA)

 

Stone Mountain, GA

 

1,639,644

 

197,965

 

1,744,287

 

 

211,924

 

197,965

 

1,956,211

 

2,154,176

 

(360,394

)

1983

 

30 Years

 

Willow Run (IN)

 

New Albany, IN

 

1,072,316

 

183,873

 

1,620,119

 

 

160,219

 

183,873

 

1,780,337

 

1,964,210

 

(307,175

)

1984

 

30 Years

 

Willow Run (KY)

 

Madisonville, KY

 

1,068,934

 

141,016

 

1,242,352

 

 

158,180

 

141,016

 

1,400,531

 

1,541,547

 

(248,179

)

1984

 

30 Years

 

Willow Trail

 

Norcross, GA

 

 

1,120,000

 

11,412,982

 

 

658,698

 

1,120,000

 

12,071,680

 

13,191,680

 

(2,402,706

)

1985

 

30 Years

 

Willowick

 

Aurora, CO

 

 

506,900

 

4,157,878

 

 

454,683

 

506,900

 

4,612,562

 

5,119,462

 

(1,056,600

)

1980

 

30 Years

 

Will-O-wisp

 

Kinston, NC (T)

 

3,600,000

 

197,398

 

3,926,972

 

 

436,658

 

197,398

 

4,363,630

 

4,561,028

 

(788,888

)

1970

 

30 Years

 

Willowood East II

 

Indianapolis, IN

 

 

104,918

 

924,590

 

 

150,549

 

104,918

 

1,075,139

 

1,180,057

 

(221,541

)

1985

 

30 Years

 

Willowood I (Gro)

 

Grove City, OH

 

898,012

 

126,045

 

1,110,558

 

 

178,621

 

126,045

 

1,289,179

 

1,415,224

 

(218,533

)

1984

 

30 Years

 

Willowood I (IN)

 

Columbus, OH

 

1,089,790

 

163,896

 

1,444,104

 

 

137,767

 

163,896

 

1,581,871

 

1,745,767

 

(262,795

)

1983

 

30 Years

 

Willowood I (KY)

 

Frankfort, KY

 

961,328

 

138,822

 

1,223,176

 

 

193,445

 

138,822

 

1,416,621

 

1,555,444

 

(239,021

)

1984

 

30 Years

 

Willowood I (Tro) (REIT)

 

Trotwood, OH

 

819,523

 

84,566

 

761,091

 

 

 

84,566

 

761,091

 

845,657

 

 

1985

 

30 Years

 

Willowood I (Woo)

 

Wooster, OH

 

 

117,254

 

1,033,137

 

 

138,027

 

117,254

 

1,171,164

 

1,288,418

 

(197,206

)

1984

 

30 Years

 

Willowood II (Gro)

 

Grove City, OH

 

523,452

 

70,924

 

624,814

 

 

108,479

 

70,924

 

733,294

 

804,217

 

(125,385

)

1985

 

30 Years

 

Willowood II (IN)

 

Columbus, OH

 

1,097,941

 

161,306

 

1,421,284

 

 

126,274

 

161,306

 

1,547,558

 

1,708,864

 

(262,126

)

1986

 

30 Years

 

Willowood II (KY)

 

Frankfort, KY

 

 

120,375

 

1,060,639

 

 

117,577

 

120,375

 

1,178,216

 

1,298,592

 

(193,992

)

1985

 

30 Years

 

Willowood II (Tro)

 

Trotwood, OH

 

 

142,623

 

1,256,667

 

 

146,251

 

142,623

 

1,402,919

 

1,545,542

 

(245,525

)

1987

 

30 Years

 

Willowood II (Woo)

 

Wooster, OH

 

823,533

 

103,199

 

909,398

 

 

159,088

 

103,199

 

1,068,486

 

1,171,685

 

(199,002

)

1986

 

30 Years

 

Willows I (OH), The

 

Columbus, OH

 

 

76,283

 

672,340

 

 

101,305

 

76,283

 

773,645

 

849,928

 

(147,135

)

1987

 

30 Years

 

Willows II (OH), The

 

Columbus, OH

 

 

96,679

 

851,845

 

 

80,858

 

96,679

 

932,703

 

1,029,382

 

(162,305

)

1981

 

30 Years

 

Willows III (OH), The

 

Columbus, OH

 

839,800

 

129,221

 

1,137,783

 

 

112,157

 

129,221

 

1,249,941

 

1,379,162

 

(211,749

)

1987

 

30 Years

 

Wimberly

 

Dallas, TX

 

 

2,232,000

 

27,685,923

 

 

860,822

 

2,232,000

 

28,546,745

 

30,778,745

 

(5,395,683

)

1996

 

30 Years

 

Wimbledon Oaks

 

Arlington, TX

 

7,058,889

 

1,491,700

 

8,843,716

 

 

906,244

 

1,491,700

 

9,749,960

 

11,241,660

 

(2,203,572

)

1985

 

30 Years

 

Winchester Park

 

Riverside, RI

 

 

2,822,618

 

18,868,626

 

 

1,689,373

 

2,822,618

 

20,557,999

 

23,380,617

 

(2,724,575

)

1972

 

30 Years

 

Winchester Wood

 

Riverside, RI

 

2,155,144

 

683,215

 

4,567,154

 

 

115,194

 

683,215

 

4,682,348

 

5,365,564

 

(537,355

)

1989

 

30 Years

 

Windemere

 

Mesa, AZ

 

 

949,300

 

8,659,280

 

 

1,280,197

 

949,300

 

9,939,477

 

10,888,777

 

(2,806,030

)

1986

 

30 Years

 

Windmont

 

Atlanta, GA

 

 

3,204,000

 

7,128,448

 

 

360,810

 

3,204,000

 

7,489,258

 

10,693,258

 

(1,160,639

)

1988

 

30 Years

 

Windridge (CA)

 

Laguna Niguel, CA

 

(I)

 

2,662,900

 

23,985,497

 

 

2,155,552

 

2,662,900

 

26,141,049

 

28,803,949

 

(8,650,892

)

1989

 

30 Years

 

Windwood I (FL)

 

Palm Bay, FL

 

 

113,913

 

1,003,498

 

 

216,185

 

113,913

 

1,219,684

 

1,333,596

 

(242,206

)

1988

 

30 Years

 

Windwood II (FL)

 

Palm Bay, FL

 

190,000

 

118,915

 

1,047,598

 

 

304,477

 

118,915

 

1,352,075

 

1,470,990

 

(273,761

)

1987

 

30 Years

 

 

S - 13



 

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 

Description

 

 

 

Initial Cost to
Company

 

Cost Capitalized
Subsequent to
Acquisition
(Improvements, net) (E)

 

Gross Amount Carried
at Close of
Period 12/31/03

 

 

 

 

 

 

 

Life Used to
Compute
Depreciation
in Latest
Income
Statement (C)

 

Apartment Name

 

Location

 

Encumbrances

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures

 

Land

 

Building &
Fixtures (A)

 

Total (B)

 

Accumulated
Depreciation

 

Date of
Construction

 

 

Wingwood (Orl)

 

Orlando, FL

 

1,389,506

 

236,884

 

2,086,402

 

 

790,651

 

236,884

 

2,877,053

 

3,113,937

 

(486,664

)

1980

 

30 Years

 

Winter Woods I (FL)

 

Winter Garden, FL

 

 

144,921

 

1,276,965

 

 

259,394

 

144,921

 

1,536,359

 

1,681,280

 

(274,289

)

1985

 

30 Years

 

Winter Woods II (FL) (REIT)

 

Winter Garden, FL

 

801,946

 

95,404

 

858,637

 

 

11,174

 

95,404

 

869,811

 

965,215

 

(13,633

)

1986

 

30 Years

 

Winterwood

 

Charlotte, NC

 

 

1,722,000

 

15,501,142

 

 

2,871,679

 

1,722,000

 

18,372,820

 

20,094,820

 

(7,093,969

)

1986

 

30 Years

 

Winthrop Court (KY)

 

Frankfort, KY

 

1,395,104

 

184,709

 

1,627,191

 

 

265,927

 

184,709

 

1,893,118

 

2,077,827

 

(325,666

)

1985

 

30 Years

 

Winthrop Court II (OH)

 

Columbus, OH

 

722,000

 

102,381

 

896,576

 

 

111,028

 

102,381

 

1,007,604

 

1,109,985

 

(171,486

)

1986

 

30 Years

 

Wood Creek (CA)

 

Pleasant Hill, CA

 

 

9,729,900

 

23,009,768

 

 

1,221,431

 

9,729,900

 

24,231,199

 

33,961,099

 

(5,718,995

)

1987

 

30 Years

 

Woodbine (Cuy)

 

Cuyahoga Falls, OH

 

 

185,868

 

1,637,701

 

 

119,869

 

185,868

 

1,757,569

 

1,943,437

 

(282,353

)

1982

 

30 Years

 

Woodbridge

 

Cary, GA

 

4,422,497

 

737,400

 

6,636,870

 

 

584,146

 

737,400

 

7,221,016

 

7,958,416

 

(2,174,904

)

1993-95

 

30 Years

 

Woodbridge (CT)

 

Newington, CT

 

(P)

 

498,377

 

3,331,548

 

 

108,850

 

498,377

 

3,440,398

 

3,938,775

 

(412,430

)

1968

 

30 Years

 

Woodbridge II

 

Cary, GA

 

 

1,244,600

 

11,243,364

 

 

640,211

 

1,244,600

 

11,883,575

 

13,128,175

 

(3,359,251

)

1993-95

 

30 Years

 

Woodcliff I

 

Lilburn, GA

 

 

276,659

 

2,437,667

 

 

270,033

 

276,659

 

2,707,701

 

2,984,360

 

(450,839

)

1984

 

30 Years

 

Woodcliff II

 

Lilburn, GA

 

1,594,517

 

266,449

 

2,347,769

 

 

166,585

 

266,449

 

2,514,355

 

2,780,804

 

(402,558

)

1986

 

30 Years

 

Woodcreek

 

Beaverton, OR

 

 

1,755,800

 

15,816,455

 

 

2,820,282

 

1,755,800

 

18,636,737

 

20,392,537

 

(7,232,864

)

1982-84

 

30 Years

 

Woodcrest I

 

Warner Robins, GA

 

 

115,739

 

1,028,353

 

 

123,714

 

115,739

 

1,152,067

 

1,267,805

 

(192,048

)

1984

 

30 Years

 

Woodlake (WA)

 

Kirkland, WA

 

(R)

 

6,631,400

 

16,735,484

 

 

1,047,419

 

6,631,400

 

17,782,903

 

24,414,303

 

(3,767,762

)

1984

 

30 Years

 

Woodland Hills

 

Decatur, GA

 

 

1,224,600

 

11,010,681

 

 

1,667,330

 

1,224,600

 

12,678,010

 

13,902,610

 

(3,769,875

)

1985

 

30 Years

 

Woodland Meadows

 

Ann Arbor, MI

 

(S)

 

2,006,000

 

18,049,552

 

 

1,423,604

 

2,006,000

 

19,473,156

 

21,479,156

 

(4,608,996

)

1987-1989

 

30 Years

 

Woodlands I (Col)

 

Columbus, OH

 

1,689,392

 

231,996

 

2,044,233

 

 

311,120

 

231,996

 

2,355,353

 

2,587,349

 

(401,621

)

1983

 

30 Years

 

Woodlands I (PA)

 

Zelienople, PA

 

986,507

 

163,192

 

1,437,897

 

 

151,320

 

163,192

 

1,589,216

 

1,752,408

 

(266,741

)

1983

 

30 Years

 

Woodlands I (Str)

 

Streetsboro, OH

 

246,222

 

197,378

 

1,739,112

 

 

207,713

 

197,378

 

1,946,825

 

2,144,203

 

(343,705

)

1984

 

30 Years

 

Woodlands II (Col)

 

Columbus, OH

 

1,464,859

 

192,633

 

1,697,310

 

 

245,339

 

192,633

 

1,942,649

 

2,135,282

 

(332,061

)

1984

 

30 Years

 

Woodlands II (PA)

 

Zelienople, PA

 

 

192,972

 

1,700,297

 

 

135,399

 

192,972

 

1,835,696

 

2,028,668

 

(298,101

)

1987

 

30 Years

 

Woodlands II (Str)

 

Streetsboro, OH

 

1,506,406

 

183,996

 

1,621,205

 

 

192,069

 

183,996

 

1,813,274

 

1,997,270

 

(318,622

)

1985

 

30 Years

 

Woodlands III (Col)

 

Columbus, OH

 

 

230,536

 

2,031,249

 

 

374,057

 

230,536

 

2,405,305

 

2,635,841

 

(419,531

)

1987

 

30 Years

 

Woodlands of Brookfield

 

Brookfield, WI

 

(N)

 

1,484,600

 

13,961,081

 

 

901,813

 

1,484,600

 

14,862,894

 

16,347,494

 

(3,118,400

)

1990

 

30 Years

 

Woodlands of Minnetonka

 

Minnetonka, MN

 

 

2,394,500

 

13,543,076

 

 

1,201,500

 

2,394,500

 

14,744,576

 

17,139,076

 

(3,471,349

)

1988

 

30 Years

 

Woodleaf

 

Campbell, CA

 

(R)

 

8,550,600

 

16,988,183

 

 

626,793

 

8,550,600

 

17,614,976

 

26,165,576

 

(3,487,648

)

1984

 

30 Years

 

Woodmoor

 

Austin, TX

 

 

653,800

 

5,875,968

 

 

2,018,635

 

653,800

 

7,894,603

 

8,548,403

 

(3,194,282

)

1981

 

30 Years

 

Woodridge (CO)

 

Aurora, CO

 

 

2,780,700

 

7,576,972

 

 

1,047,568

 

2,780,700

 

8,624,540

 

11,405,240

 

(1,946,602

)

1980-82

 

30 Years

 

Woodridge (MN)

 

Eagan, MN

 

7,375,018

 

1,602,300

 

10,449,579

 

 

924,058

 

1,602,300

 

11,373,638

 

12,975,938

 

(2,559,675

)

1986

 

30 Years

 

Woodridge II (CO)

 

Aurora, CO

 

 

 

4,148,517

 

 

542,029

 

 

4,690,546

 

4,690,546

 

(1,066,732

)

1980-82

 

30 Years

 

Woodridge III (CO)

 

Aurora, CO

 

 

 

9,130,764

 

 

1,195,613

 

 

10,326,377

 

10,326,377

 

(2,349,211

)

1980-82

 

30 Years

 

Woods of Elm Creek

 

San Antonio, TX

 

 

590,000

 

5,310,328

 

 

750,840

 

590,000

 

6,061,168

 

6,651,168

 

(1,694,894

)

1983

 

30 Years

 

Woods of North Bend

 

Raleigh, NC

 

(S)

 

1,039,500

 

9,305,319

 

 

1,663,425

 

1,039,500

 

10,968,744

 

12,008,244

 

(3,928,153

)

1983

 

30 Years

 

Woodscape

 

Raleigh, NC

 

 

957,300

 

8,607,940

 

 

817,176

 

957,300

 

9,425,116

 

10,382,416

 

(2,739,334

)

1979

 

30 Years

 

Woodside

 

Lorton, VA

 

 

1,326,000

 

12,510,903

 

 

969,332

 

1,326,000

 

13,480,235

 

14,806,235

 

(4,609,312

)

1987

 

30 Years

 

Woodtrail

 

Newnan, GA

 

 

250,895

 

2,210,658

 

 

200,905

 

250,895

 

2,411,563

 

2,662,458

 

(388,636

)

1984

 

30 Years

 

Woodvalley

 

Anniston, AL

 

1,343,079

 

190,188

 

1,675,765

 

 

135,899

 

190,188

 

1,811,664

 

2,001,852

 

(303,441

)

1986

 

30 Years

 

Wyndridge 2

 

Memphis, TN

 

14,135,000

 

1,488,000

 

13,607,636

 

 

1,666,861

 

1,488,000

 

15,274,497

 

16,762,497

 

(4,079,342

)

1988

 

30 Years

 

Wyndridge 3

 

Memphis, TN

 

10,855,000

 

1,502,500

 

13,531,741

 

 

917,667

 

1,502,500

 

14,449,408

 

15,951,908

 

(3,740,550

)

1988

 

30 Years

 

Yarmouth Woods

 

Yarmouth, ME

 

 

692,800

 

6,096,155

 

 

509,500

 

692,800

 

6,605,655

 

7,298,455

 

(1,547,142

)

1971/1978

 

30 Years

 

Yorktowne at Olde Mill

 

Millersville, MD

 

 

216,000

 

2,674,121

 

 

4,491,376

 

216,000

 

7,165,497

 

7,381,497

 

(5,650,992

)

1974

 

30 Years

 

Management Business

 

Chicago, IL

 

 

 

 

 

30,182,866

 

 

30,182,866

 

30,182,866

 

(16,592,741

)

(D)

 

 

 

Operating Partnership

 

Chicago, IL (H)

 

43,792

 

 

9,156

 

 

 

 

9,156

 

9,156

 

 

(F)

 

 

 

Total Investment in Real Estate

 

 

 

$

1,834,621,384

 

$

1,853,093,564

 

$

10,182,887,577

 

$

 

$

838,397,934

 

$

1,853,093,564

 

$

11,021,285,511

 

$

12,874,379,075

 

$

(2,296,013,441

)

 

 

 

 

 

S - 14



 

ERP Operating Limited Partnership

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2003

 


NOTES:

 

(A)  The balance of furniture & fixtures included in the total investment in real estate amount was $602,647,035.02 as of December 31, 2003.

 

(B)  The aggregate cost for Federal Income Tax purposes as of December 31, 2003 was approximately $8.45 billion.

 

(C)  The life to compute depreciation for furniture & fixtures is 5 years.

 

(D)  This asset consists of various acquisition dates and largely represents furniture, fixtures and equipment owned by the Management Business.

 

(E)  Improvements are net of write-off of fully depreciated assets which are no longer in service.

 

(F)  Represents land and/or miscellaneous improvements held for future development.

 

(G)  A portion or all of these properties includes commercial space (retail, parking and/or office space).

 

(H)  The mortgage debt is the balance for a property that was sold, which balance was not collateralized by the property.  The amount was transferred to ERPOP.

 

(I)  These three properties are pledged as additional collateral in connection with a tax-exempt bond financing.

 

(J)  These three properties are pledged as additional collateral in connection with a tax-exempt bond financing.

 

S - 15



 

ERP Operating Limited Partnership

Schedule III - Real Estate and Accumulated Depreciation

Encumbrances Reconciliation

December 31, 2003

 

Entity Encumbrances

 

Number of
Properties
Encumbered By

 

See Properties
With Note:

 

Amount

 

 

 

 

 

 

 

 

 

EQR Arbors Financing LP

 

2

 

(K)

 

$

13,265,000

 

EQR Breton Hammocks Financing LP

 

1

 

(L)

 

15,211,947

 

EQR-Bond Partnership

 

13

 

(M)

 

192,994,000

 

EQR Flatlands LLC

 

5

 

(N)

 

50,000,000

 

EWR, LP

 

5

 

(O)

 

45,258,236

 

GPT-Windsor, LLC

 

16

*

(P)

 

63,000,000

 

EQR-Codelle, LP

 

10

 

(Q)

 

120,163,327

 

EQR-Conner, LP

 

14

 

(R)

 

210,267,676

 

EQR-FANCAP 2000A LP

 

11

 

(S)

 

148,333,000

 

GC Southeast Partners LP (SEP)

 

11

 

(T)

 

700,000

 

 

 

 

 

 

 

 

 

Entity Encumbrances

 

 

 

 

 

859,193,186

 

 

 

 

 

 

 

 

 

Individual Property Encumbrances

 

 

 

 

 

1,834,621,384

 

 

 

 

 

 

 

 

 

Total Encumbrances per Financial Statements

 

 

 

 

 

$

2,693,814,571

 

 


* Collateral also includes $3.1 million invested in U.S. Treasury Securities which is included in Deposits - Restricted in the accompanying consolidated balance sheets at December 21, 2003.

 

S - 16



 

ERP Operating Limited Partnership

Schedule III - Real Estate and Accumulated Depreciation

(Amounts in thousands)

 

 

The changes in total real estate for the years ended December 31, 2003, 2002 and 2001 are as follows:

 

 

 

2003

 

2002

 

2001

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

13,046,263

 

$

13,019,841

 

$

12,650,028

 

Acquisitions and development

 

800,143

 

528,302

 

753,648

 

Improvements

 

184,876

 

164,077

 

157,847

 

Write-off of fully depreciated assets which are no longer in service

 

(31,590

)

 

(149

)

Dispositions and other

 

(1,125,313

)

(665,957

)

(541,533

)

Balance, end of year

 

$

12,874,379

 

$

13,046,263

 

$

13,019,841

 

 

The changes in accumulated depreciation for the years ended December 31, 2003, 2002, and 2001 are as follows:

 

 

 

2003

 

2002

 

2001

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

2,112,017

 

$

1,719,131

 

$

1,359,089

 

Depreciation

 

470,908

 

471,295

 

457,071

 

Write-off of fully depreciated assets which are no longer in service

 

(31,590

)

 

(149

)

Dispositions and other

 

(255,322

)

(78,409

)

(96,880

)

Balance, end of year

 

$

2,296,013

 

$

2,112,017

 

$

1,719,131

 

 

S - 17



 

EXHIBIT INDEX

 

Exhibit

 

Document

 

 

 

10.2

 

Master Amendment to Other Securities Term Sheets and Joinders to Operating Partnership Agreement of ERP Operating Limited Partnership dated December 19, 2003.

 

 

 

10.3

 

Assignment and Assumption Agreement between the Company and ERP Operating Limited Partnership dated December 19, 2003.

 

 

 

12

 

Computation of Ratio of Earnings to Combined Fixed Charges.

 

 

 

21

 

List of Subsidiaries of ERP Operating Limited Partnership.

 

 

 

23.1

 

Consent of Ernst & Young LLP.

 

 

 

24.1

 

Power of Attorney for John W. Alexander dated March 3, 2004.

24.2

 

Power of Attorney for Stephen O. Evans dated March 5, 2004.

24.3

 

Power of Attorney for Charles L. Atwood dated March 8, 2004.

24.4

 

Power of Attorney for Desiree G. Rogers dated March 9, 2004.

24.5

 

Power of Attorney for B. Joseph White dated March 3, 2004.

24.6

 

Power of Attorney for Sheli Z. Rosenberg dated March 5, 2004.

24.7

 

Power of Attorney for James D. Harper, Jr. dated March 4, 2004.

24.8

 

Power of Attorney for Boone A. Knox dated March 3, 2004.

24.9

 

Power of Attorney for Michael N. Thompson dated March 5, 2004.

24.10

 

Power of Attorney for Samuel Zell dated March 2, 2004.

24.11

 

Power of Attorney for Gerald A. Spector dated March 2, 2004.

 

 

 

31.1

 

Certification of Bruce W. Duncan, Chief Executive Officer of Registrant’s General Partner.

31.2

 

Certification of David J. Neithercut, Chief Financial Officer of Registrant’s General Partner.

32.1

 

Certification Pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Bruce W. Duncan, Chief Executive Officer of Registrant’s General Partner.

32.2

 

Certification Pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of David J. Neithercut, Chief Financial Officer of Registrant’s General Partner.