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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended DECEMBER 31, 20122014
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                to                
Commission File Number: 1-12252 (Equity Residential)
Commission File Number: 0-24920 (ERP Operating Limited Partnership)

EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Maryland (Equity Residential)13-3675988 (Equity Residential)
Illinois (ERP Operating Limited Partnership)36-3894853 (ERP Operating Limited Partnership)
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
  
Two North Riverside Plaza, Chicago, Illinois 60606(312) 474-1300
 (Address of principal executive offices) (Zip Code)(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Common Shares of Beneficial Interest, $0.01 Par Value (Equity Residential)New York Stock Exchange
Preferred Shares of Beneficial Interest, $0.01 Par Value (Equity Residential)New York Stock Exchange
7.57% Notes due August 15, 2026 (ERP Operating Limited Partnership)New York Stock Exchange
(Title of each class)(Name of each exchange on which registered)

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

None (Equity Residential)
Units of Limited Partnership Interest (ERP Operating Limited Partnership)
(Title of each class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Equity Residential Yes x    No ¨
ERP Operating Limited Partnership Yes x      No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. 
Equity Residential Yes ¨    No x
ERP Operating Limited Partnership Yes ¨      No x

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. 
Equity Residential Yes x    No ¨
ERP Operating Limited Partnership Yes x      No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 
Equity Residential Yes x    No ¨
ERP Operating Limited Partnership Yes x      No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of 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.
Equity Residential x
ERP Operating Limited Partnership x




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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Equity Residential: 
Large accelerated filer x
Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)
Smaller reporting company ¨
ERP Operating Limited Partnership: 
Large accelerated filer ¨
Accelerated filer ¨
Non-accelerated filer x (Do not check if a smaller reporting company)
Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). 
Equity Residential Yes ¨    No x
ERP Operating Limited Partnership Yes ¨        No x 
The aggregate market value of Common Shares held by non-affiliates of the Registrant was approximately $18.4$22.3 billion based upon the closing price on June 30, 20122014 of $62.36$63.00 using beneficial ownership of shares rules adopted pursuant to Section 13 of the Securities Exchange Act of 1934 to exclude voting shares owned by Trustees and Executive Officers, some of who may not be held to be affiliates upon judicial determination.
The number of Common Shares of Beneficial Interest, $0.01 par value, outstanding on February 15, 201320, 2015 was 325,462,816.363,798,297.




























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DOCUMENTS INCORPORATED BY REFERENCE
Part III incorporates by reference certain information that will be contained in Equity Residential's Proxy Statement relating to its 20132015 Annual Meeting of Shareholders, which Equity Residential intends to file no later than 120 days after the end of its fiscal year ended December 31, 20122014, and thus these items have been omitted in accordance with General Instruction G(3) to Form 10-K. Equity Residential is the general partner and 95.9%96.2% owner of ERP Operating Limited Partnership.


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EXPLANATORY NOTE

This report combines the annual reports on Form 10-K for the year ended December 31, 20122014 of Equity Residential and ERP Operating Limited Partnership. Unless stated otherwise or the context otherwise requires, references to “EQR” mean Equity Residential, a Maryland real estate investment trust (“REIT”), and references to “ERPOP” mean ERP Operating Limited Partnership, an Illinois limited partnership. References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP. The following chart illustrates the Company's and the Operating Partnership's corporate structure:


EQR is the general partner of, and as of December 31, 20122014 owned an approximate 95.9%96.2% ownership interest in, ERPOP. The remaining 4.1%3.8% interest is owned by limited partners. As the sole general partner of ERPOP, EQR has exclusive control of ERPOP's day-to-day management.

The Company is structured as an umbrella partnership REIT (“UPREIT”) and contributes all net proceeds from its various equity offerings to the Operating Partnership. In return for those contributions, the Company receives a number of OP Units (see definition below) in the Operating Partnership equal to the number of Common Shares it has issued in the equity offering. Contributions of properties to the Company can be structured as tax-deferred transactions through the issuance of OP Units in the Operating Partnership, which is one of the reasons why the Company is structured in the manner shown above. Based on the terms of ERPOP's partnership agreement, OP Units can be exchanged with Common Shares on a one-for-one basis. The Company maintains a one-for-one relationship between the OP Units of the Operating Partnership issued to EQR and the Common Shares.
    
The Company believes that combining the reports on Form 10-K of EQR and ERPOP into this single report provides the following benefits:

enhances investors' understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and

creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

Management operates the Company and the Operating Partnership as one business. The management of EQR consists of the same members as the management of ERPOP.

The Company believes it is important to understand the few differences between EQR and ERPOP in the context of how EQR and ERPOP operate as a consolidated company. All of the Company's property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR's primary function is acting as the general partner of ERPOP. EQR also issues equity from time to time and guarantees certain debt of ERPOP, as disclosed in this report. EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company's ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by the Company, which are contributed

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to the capital of the Operating Partnership in exchange for additional limited partnership interests in the Operating Partnership (“OP Units”) (on a one-for-one Common Share per OP Unit basis), the Operating Partnership generates all remaining capital required by the Company's business. These sources include the Operating Partnership's working capital, net cash provided by operating activities, borrowings under its revolving credit facility, the issuance of secured and unsecured debt and equity securities and proceeds received from disposition of certain properties and joint ventures.

Shareholders' equity, partners' capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership. The limited partners of the Operating Partnership are accounted for as partners' capital in the Operating Partnership's financial statements and as noncontrolling interests in the Company's financial statements. The noncontrolling interests in the Operating Partnership's financial statements include the interests of unaffiliated partners in various consolidated partnerships and development joint venture partners. The noncontrolling interests in the Company's financial statements include the same noncontrolling interests at the Operating Partnership level and limited partner OP Unit holders of the Operating Partnership. The differences between shareholders' equity and partners' capital result from differences in the equity issued at the Company and Operating Partnership levels.

To help investors understand the significant differences between the Company and the Operating Partnership, this report provides separate consolidated financial statements for the Company and the Operating Partnership; a single set of consolidated notes to such financial statements that includes separate discussions of each entity's debt, noncontrolling interests and shareholders' equity or partners' capital, as applicable; and a combined Management's Discussion and Analysis of Financial Condition and Results of Operations section that includes discrete information related to each entity.

This report also includes separate Part I,II, Item 4.9A. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of the Company and the Operating Partnership in order to establish that the requisite certifications have been made and that the Company and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.

 
In order to highlight the differences between the Company and the Operating Partnership, the separate sections in this report for the Company and the Operating Partnership specifically refer to the Company and the Operating Partnership. In the sections that combine disclosure of the Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the Company is one business and the Company operates that business through the Operating Partnership.

 
As general partner with control of the Operating Partnership, the Company consolidates the Operating Partnership for financial reporting purposes, and EQR essentially has no assets or liabilities other than its investment in ERPOP. Therefore, the assets and liabilities of the Company and the Operating Partnership are the same on their respective financial statements. The separate discussions of the Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.



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EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
TABLE OF CONTENTS
   PAGE
PART I.   
Item 1. 
Item 1A. 
Item 1B. 
Item 2. 
Item 3. 
Item 4. 
PART II.   
Item 5. 
Item 6. 
Item 7. 
Item 7A. 
Item 8. 
Item 9. 
Item 9A. 
Item 9B. 
PART III.   
Item 10. 
Item 11. 
Item 12. 
Item 13. 
Item 14. 
PART IV.   
Item 15. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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PART I

Item 1. Business
General
Equity Residential (“EQR”), a Maryland real estate investment trust (“REIT”) formed in March 1993, is an S&P 500 company focused on the acquisition, development and management of high quality apartment properties in top United States growth markets. 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 has elected to be taxed as a REIT. References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP.

EQR is the general partner of, and as of December 31, 20122014 owned an approximate 95.9%96.2% ownership interest in, ERPOP. All of the Company's property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR issues public equity from time to time but does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company's ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity.

As of December 31, 2012,2014, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 403391 properties located in 1312 states and the District of Columbia consisting of 115,370109,225 apartment units. The ownership breakdown includes (table does not include various uncompleted development properties):

 Properties Apartment Units Properties Apartment Units
Wholly Owned Properties 382
 106,856
 364
 98,287
Master-Leased Properties – Consolidated 3
 853
Partially Owned Properties – Consolidated 19
 3,475
 19
 3,771
Partially Owned Properties – Unconsolidated 3
 1,281
Military Housing 2
 5,039
 2
 5,033
 403
 115,370
 391
 109,225

The Company's corporate headquarters are located in Chicago, Illinois and the Company also operates property management offices in each of its core markets. As of December 31, 20122014, the Company had approximately 3,6003,500 employees who provided real estate operations, leasing, legal, financial, accounting, acquisition, disposition, development and other support functions.

Certain capitalized terms used herein are defined in the Notes to Consolidated Financial Statements. See also Note 17 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s segment disclosures.
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.equityresidential.com. These reports are made available at our website as soon as reasonably practicable after we file them with the SEC. The information contained on our website, including any information referred to in this report as being available on our website, is not a part of or incorporated into this report.
Business Objectives and Operating and Investing Strategies
The Company invests in high quality apartment communities located in strategically targeted markets with the goal of maximizing our risk adjusted total return (operating income plus capital appreciation) on invested capital.

We seek to maximize the income and capital appreciation of our properties by investing in markets (our core markets) that are characterized by conditions favorable to multifamily property operations and appreciation. We are focused primarily on the six core coastal, high barrier to entry markets of Boston, New York, Washington DC, Southern California (including Los Angeles, Orange County and San Diego), San Francisco and Seattle. These markets generally feature one or more of the following characteristics that allow us to increase rents:

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High barriers to entry where, because of land scarcity or government regulation, it is difficult or costly to build new apartment properties, creating limits on new supply;
High home ownership costs;
Strong economic growth leading to job growth and household formation, and job growth, which in turn leads to high demand for our apartments;

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for our apartments;
Urban core locations with an attractive quality of life and higher wage job categories leading to high resident demand and retention; and
Favorable demographics contributing to a larger pool of target residents with a high propensity to rent apartments.
Our operating focus is on balancing occupancy and rental rates to maximize our revenue while exercising tight cost control to generate the highest possible return to our shareholders. Revenue is maximized by attracting qualified prospects to our properties, cost-effectively converting these prospects into new residents and keeping our residents satisfied so they will renew their leases upon expiration. While we believe that it is our high-quality, well-located assets that bring our customers to us, it is the customer service and superior value provided by our on-site personnel that keeps them renting with us and recommending us to their friends.

We use technology to engage our customers in the way that they want to be engaged. Many of our residents utilize our web-based resident portal which allows them to sign and renew their leases, review their accounts and make payments, provide feedback and make service requests on-line.

Acquisitions and developments may be financed from various sources of capital, which may include retained cash flow, issuance of additional equity and debt, sales of properties and joint venture agreements. In addition, the Company may acquire properties in transactions that include the issuance of limited partnership interests in the Operating Partnership (“OP Units”) as consideration for the acquired properties. Such transactions may, in certain circumstances, enable the sellers to defer, in whole or in part, the recognition of taxable income or gain that might otherwise result from the sales. The Company may acquire land parcels to hold and/or sell based on market opportunities.opportunities as well as options to buy more land in the future. The Company may also seek to acquire properties by purchasing defaulted or distressed debt that encumbers desirable properties in the hope of obtaining title to property through foreclosure or deed-in-lieu of foreclosure proceedings. The Company has also, in the past, converted some of its properties and sold them as condominiums but is not currently active in this line of business.

Over the past several years, the Company has done an extensive repositioning of its portfolio from low barrier to entry/non-core markets to high barrier to entry/core markets. Since 2005, the Company has sold over 133,000166,000 apartment units primarily in its non-core markets for an aggregate sales price of approximately $11.1$16.1 billion, acquired over 44,00067,000 apartment units primarily in its core markets for approximately $10.3$19.5 billion and began approximately $3.0$5.3 billion of development projects primarily in its core markets. We are currently seeking to acquire and develop assets primarily in the following targetedsix core coastal metropolitan areas (our core markets):areas: Boston, New York, Washington DC,D.C., Southern California, San Francisco and Seattle. We also have investments (in the aggregate about 15.8%12.1% of our NOI at December 31, 2012)2014) in otherthe two core markets includingof South Florida Denver and New England (excluding Boston)Denver but do not currently intend to acquire or develop new assets in these markets. Further, we are in the process of exiting Atlanta, Phoenix and Orlando and Jacksonville as we raise capitalwill use sales proceeds from these markets to complete the Archstone transaction.acquire and/or develop new assets and for other corporate purposes.

As part of its strategy, the Company purchases completed and fully occupied apartment properties, partially completed or partially occupied properties and takes options on land or acquires land on which apartment properties can be constructed. We intend to hold a diversified portfolio of assets across our target markets. As of December 31, 2012,2014, no single market/metropolitan area accounted for more than 15.9%17.5% of our NOI, though no guarantee can be made that NOI concentration may not increase in the future.

We endeavor to attract and retain the best employees by providing them with the education, resources and opportunities to succeed. We provide many classroom and on-line training courses to assist our employees in interacting with prospects and residents as well as extensively train our customer service specialists in maintaining the propertyour properties and its improvements, equipment and appliances. We actively promote from within and many senior corporate and property leaders have risen from entry level or junior positions. We monitor our employees' engagement by surveying them annually and have consistently received high engagement scores.

We have a commitment to sustainability and consider the environmental impacts of our business activities. Sustainability and social responsibility are key drivers of our focus on creating the best apartment communities for residents to live, work and play. We have a dedicated in-house team that initiates and applies sustainable practices in all aspects of our business, including investment activities, development, property operations and property management activities. With its high density, multifamily housing is, by its nature, an environmentally friendly property type. Our recent acquisition and development activities have been

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primarily concentrated in pedestrian-friendly urban locations near public transportation. When developing and renovating our properties, we strive to reduce energy and water usage by investing in energy saving technology while positively impacting the experience of our residents and the value of our assets. We continue to implement a combination of irrigation, lighting, HVAC and renewable energy improvements at our properties that will reduce energy and water consumption. The Company was recently named as the 2014 North American Residential – Large Cap Sector Leader by the Global Real Estate Sustainability Benchmark ("GRESB") survey, a globally recognized analysis of the sustainability indicators of approximately 650 real estate portfolios worldwide. For additional information regarding our sustainability efforts, see our December 2014 Corporate Social Responsibility and Sustainability Report at our website, www.equityresidential.com.

Competition

All of the Company's 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 Company's ability to lease apartment

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units at its properties and on the rents charged. The Company may be competing with other entities that have greater resources than the Company and whose managers have more experience than the Company's managers. In addition, other forms of rental properties and single family housing provide housing alternatives to potential residents of multifamily properties. See Item 1A. Risk Factorsfor additional information with respect to competition.

Archstone Transaction

On February 27, 2013, the Company, AvalonBay Communities, Inc. (“AVB”) and certain of their respective subsidiaries completed their previously announced acquisition (the “Archstone Acquisition” or the "Archstone Transaction") from Archstone Enterprise LP (“Enterprise”) (which subsequently changed its name to Jupiter Enterprise LP), an affiliate of Lehman Brothers Holdings Inc. (“Lehman”) and its affiliates, of all of the assets of Enterprise (including interests in various entities affiliated with Enterprise), constituting a portfolio of apartment properties and other assets (the “Archstone Portfolio”). As a result of the Archstone Acquisition, the Company owns assets representing approximately 60% of the Archstone Portfolio. The consideration paid by the Company in connection with the Archstone Acquisition consisted of cash of approximately $4.0 billion (inclusive of $2.0 billion of Archstone secured mortgage principal paid off in conjunction with the closing), 34,468,085 Common Shares (which shares had a total value of $1.9 billion based on the February 27, 2013 closing price of EQR common shares of $55.99 per share) issued to the seller and the assumption of approximately $3.1 billion of mortgage debt (inclusive of a net mark-to-market premium of $127.9 million) and approximately 60% of all of the other assets and liabilities related to the Archstone Portfolio. See Note 4 in the Notes to Consolidated Financial Statements for further discussion.

Debt and Equity Activity

EQR issues public equity from time to time and guarantees certain debt of ERPOP. EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. In addition, ERPOP issues OP Units and preference interests ("Preference Units") from time to time.

Please refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations,, for the Company’s and the Operating Partnership's Capital Structure charts as of December 31, 2012.2014.

Major Debt and Equity Activities for the Years Ended December 31, 2014, 2013 and 2012
,During 20112014 and 2010:
The Company assumed $28.9 million of mortgage debt on one property.
The Company repaid $100.7 million of mortgage debt.
The Company repaid $500.0 million of 5.250% unsecured notes at maturity.
The Company repaid its $750.0 million unsecured term loan facility in conjunction with the note issuances discussed below.
The Company issued $450.0 million of five-year 2.375% fixed rate public notes, receiving net proceeds of $449.6 million before underwriting fees and other expenses, at an all-in effective interest rate of 2.52% and swapped the notes to a floating interest rate in conjunction with the issuance (see Note 9 in the Notes to Consolidated Financial Statements for further discussion).

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The Company issued $750.0 million of thirty-year 4.50% fixed rate public notes, receiving net proceeds of $744.7 million before underwriting fees, hedge termination costs and other expenses, at an all-in effective interest rate of 4.57% after termination of various forward starting swaps in conjunction with the issuance (see Note 9 in the Notes to Consolidated Financial Statements for further discussion).
The Company issued 2,086,380 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $82.6 million.
The Company issued 68,807 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $3.4 million.
The Company repurchased and retired 31,240 of its Common Shares at a price of $56.87 per share for total consideration of $1.8 million (all related to the vesting of employee restricted shares). See Note 3 in the Notes to Consolidated Financial Statements for further discussion.
During 2013:
The Company assumed as part of the Archstone Transaction $2.2 billion of mortgage debt held in two Fannie Mae loan pools, consisting of $1.2 billion collateralized by 16 properties with an interest rate of 6.256% and a maturity date of November 1, 2017 ("Pool 3") and $963.5 million collateralized by 15 properties with an interest rate of 5.883% and a maturity date of November 1, 2014 ("Pool 4").
The Company paid down $825.0 million of Pool 3 mortgage debt and repaid $963.5 million of Pool 4 mortgage debt.
The Company assumed as part of the Archstone Transaction $346.6 million of tax-exempt bonds on four properties with interest rates ranging from SIFMA plus 0.860% to SIFMA plus 1.402% and maturity dates through November 15, 2036.
The Company assumed as part of the Archstone Transaction $339.0 million of other mortgage debt on three properties with fixed interest rates ranging from 0.100% to 5.240% and maturity dates through May 1, 2061.
The Company assumed as part of the Archstone Transaction $34.1 million of other mortgage debt on one property with a variable rate of LIBOR plus 1.75% and a maturity date of September 1, 2014.
The Company obtained an $800.0 million secured loan from a large insurance company which matures on November 10, 2023, is interest only and carries a fixed interest rate of 4.21% and was used in part to pay down Pool 3.
The Company repaid $400.0 million of 5.200% unsecured notes at maturity.
The Company issued $500.0 million of ten-year 3.00% fixed rate public notes, receiving net proceeds of $495.6 million before underwriting fees and other expenses, at an all-in effective interest rate of 3.998%.
The Company entered into a senior unsecured $750.0 million delayed draw term loan facility which was fully drawn on February 27, 2013 in connection with the Archstone Acquisition. The maturity date of January 11, 2015 was subject to a one-year extension option exercisable by the Company. The interest rate on advances under the term loan facility generally was LIBOR plus a spread (1.20%), which was dependent on the credit rating of the Company's long-term debt. The facility was paid off in the second quarter of 2014.
The Company issued 34,468,085 Common Shares to an affiliate of Lehman having a value of $1.9 billion (based on the February 27, 2013 closing price of EQR Common Shares of $55.99 per share) as partial consideration for the portion of the Archstone Portfolio acquired by the Company. Lehman has since sold all of these Common Shares.
The Company issued 586,017 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $17.3 million.
The Company issued 73,468 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $3.4 million.
During 2012:
The Company repaid $253.9 million of 6.625% unsecured notes and $222.1 million of 5.500% unsecured notes, both at maturity.
The Company repaid its $500.0 million term loan at maturity.
TheIn connection with the Archstone Transaction, the Company issued 21,850,000 Common Shares at a price of $54.75$54.75 per share for total consideration of approximately $1.2$1.2 billion,, after deducting underwriting commissions of $35.9 million.$35.9 million. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.

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The Company issued 3,173,919 Common Shares at an average price of $60.59 per share for total consideration of $192.3 million pursuant to its At-The-Market (“ATM”) share offering program. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.
The Company issued 1,608,427 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $49.0 million.
The Company issued 1,081,797 OP Units having a value of $66.6$66.6 million (based on the closing price for Common Shares of $61.57$61.57 on such date) as partial consideration for the acquisition of one rental property.
The Company issued 110,054 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $5.4 million.
The Company redeemed its Series N Cumulative Redeemable Preferred Shares for cash consideration of $150.0 million plus accrued dividends through the redemption date.
During 2011:
The Company redeemed $482.5 million of its 3.85% unsecured notes with a final maturity of 2026 at par and no premium was paid and repaid $93.1 million of 6.95% unsecured notes at maturity.
The Company issued $1.0 billion of ten-year 4.625% fixed rate public notes in a public offering, receiving net proceeds of $996.2 million before underwriting fees and other expenses. The notes have an all-in effective interest rate of approximately 6.2% after termination of various forward starting swaps in conjunction with
EQR and ERPOP currently have an active universal shelf registration statement for the issuance (see Note 8 in the Notes to Consolidated Financial Statements for further discussion).
The Company issued 3,866,666 Common Shares at an average price of $52.23 per share for total consideration of $201.9 million pursuant to its ATM share offering program. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.
The Company issued 2,945,948 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $95.3 million.
The Company issued 113,107 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $5.3 million.


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During 2010:
The Company issued $600.0 million of ten-year 4.75% fixed rate public notes in a public offering at an all-in effective interest rate of 5.09%, receiving net proceeds of $595.4 million before underwriting fees and other expenses.
The Company issued 6,151,198 Common Shares at an average price of $47.45 per share for total consideration of $291.9 million pursuant to its ATM share offering program. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.
The Company issued 2,506,645 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $71.6 million.
The Company issued 157,363 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $5.1 million.
The Company repurchased and retired 58,130 of its Common Shares at an average price of $32.46 per share for total consideration of $1.9 million (all related to the vesting of employee restricted shares). See Note 3 in the Notes to Consolidated Financial Statements for further discussion.
EQR contributed all of the net proceeds of the above equity offerings to ERPOP in exchange for OP Units or Preference Units.
An unlimited amount of equity and debt securities remains available for issuance by EQR and ERPOP under a universal shelf registration statement that automatically became effective upon filing with the SEC in October 2010on July 30, 2013 and expires on October 15, 2013. However, asJuly 30, 2016. In July 2013, the Board of February 15, 2013, issuancesTrustees also approved an increase to the amount of shares which may be offered under the ATM share offering program are limited to 6.013.0 million additional shares.Common Shares and extended the program maturity to July 2016. Per the terms of ERPOP's partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of ERPOP 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).
On June 16, 2011, the shareholders of EQR approved the Company's 2011 Share Incentive Plan, as amended (the "2011 Plan") and the Company filed a Form S-8 registration statement to register 12,980,741 Common Shares under this plan. As of December 31, 2012, 11,097,881 shares were available for future issuance. See Note 12 in the Notes to Consolidated Financial Statements for further discussion.
Credit Facilities

EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. EQR guarantees the Operating Partnership'sPartnership’s revolving credit facility up to the maximum amount and for the full term of the facility.

On January 11, 2013, the Company replaced its existing $1.75 billion facility with a $2.5 billion unsecured revolving credit facility maturing April 1, 2018. The Company has the ability to increase available borrowings by an additional $500.0 million by adding additional banks to the facility or obtaining the agreement of existing banks to increase their commitments. The interest rate on advances under the facility will generally be LIBOR plus a spread (currently 1.05%) and the Company pays an annual facility fee (currently 15 basis points). Both the spread and the facility fee are dependent on the credit rating of the Company's long-term debt.

In July 2011, the Company replaced its then existing $1.425 billionunsecured revolving credit facility which was scheduled to mature in February 2012with a new $1.25$1.25 billion unsecured revolving credit facility maturing on July 13, 2014,, subject to a one-year extension option exercisable by the Company. The Company had the ability to increase available borrowings by an additional $500.0$500.0 million by adding additional banks to the facility or obtaining the agreement of existing banks to increase their commitments. On January 6, 2012, the Company amended this credit facility to increase available borrowings by an additional $500.0$500.0 million to $1.75$1.75 billion with all other terms, including the July 13, 2014 maturity date, remaining the same. The interest rate on advances under the credit facility was generally LIBOR plus a spread (1.15%(1.15%) and the Company paid an annual facility fee of 0.2%. Both the spread and the facility fee were dependent on the credit rating of the Company's long-term debt. On January 11, 2013, the CompanyThe facility had replaced its existing $1.75 billion credit facility with a new $2.5 billion unsecured revolving credit facility maturing April 1, 2018. The interest rate on advances under the new credit facility will be LIBOR plus a spread (currently 1.05%) and an annual facility fee (currently 15 basis points). Both the spread and the facility fee are dependent on the credit rating of the Company's long-term debt.previous $1.425 billion facility which was scheduled to mature in February 2012.
   
As of February 15, 2012,20, 2015, the amount available on the $2.5 billion credit facility was $2.47$1.94 billion (net of $30.2$43.8 million which was restricted/dedicated to support letters of credit)credit, net of $300.0 million outstanding on the credit facility and there was no amount outstanding.net of $220.0 million outstanding on the commercial paper program) (see Note 18 in the Notes to Consolidated Financial Statements for additional discussion of the commercial paper program). As of December 31, 2012,2014, the amount available on the $1.75 billion credit facility was $1.72$2.12 billion (net of $30.2$43.8 million which was restricted/dedicated to support letters of credit)credit and there was no amount outstanding.net of $333.0 million outstanding). During the year ended December 31, 2012,2014, the weighted average interest rate was 1.35%0.95%. As of December 31, 2011,2013, the amount available on the $1.25 billion credit facility was $1.22$2.35 billion (net of $31.8$34.9 million which was restricted/dedicated to support letters of credit)credit and there was no amount outstanding.net of $115.0 million outstanding). During the year ended December 31, 2011,2013, the weighted average interest rate was 1.42%1.26%.



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Archstone Transaction

On November 26, 2012, the Company and AvalonBay Communities, Inc. ("AvalonBay" or "AVB") (NYSE:AVB) entered into a contract with Lehman Brothers Holdings Inc. ("Lehman") to acquire the assets and liabilities of Archstone Enterprise LP ("Archstone"), which consists principally of a portfolio of high-quality apartment properties in major markets in the United States. Under the terms of the agreement, the Company will acquire approximately 60% of Archstone's assets and liabilities and AvalonBay will acquire approximately 40% of Archstone's assets and liabilities. The Company will acquire approximately 75 operating properties, four properties under development and several land parcels to be held for future development for approximately $8.9 billion which will consist of cash of approximately $2.0 billion, 34,468,085 Common Shares and the assumption of the Company's portion of the liabilities related to the Archstone assets (other than certain liabilities owed to Lehman and certain transaction expenses). The Company also expects to assume approximately $3 billion of consolidated Archstone debt. In addition, the Company and AvalonBay will acquire certain assets of Archstone, including Archstone’s interests in certain joint ventures, interests in a portfolio of properties located in Germany and certain development land parcels, and will become subject to approximately $179.9 million in preferred interests of Archstone unitholders through various unconsolidated joint ventures expected to be owned 60% by the Company and 40% by AvalonBay. The transaction is expected to close in the first quarter of 2013.
Environmental Considerations
See Item 1A. Risk Factorsfor information concerning the potential effects of environmental regulations on our operations.


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Item 1A. Risk Factors
General
References to "EQR" mean Equity Residential, a Maryland real estate investment trust ("REIT"), and references to "ERPOP" mean ERP Operating Limited Partnership, an Illinois limited partnership. Unless otherwise indicated, when used in this section, the terms “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP and the term “Operating Partnership” means collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP. This Item 1A. includes forward-looking statements. You should refer to our discussion of the qualifications and limitations on forward-looking statements included in Item 7.
The occurrence of the events discussed in the following risk factors could adversely affect, possibly in a material manner, our business, financial condition or results of operations, which could adversely affect the value of our common shares of beneficial interest or preferred shares of beneficial interest (which we refer to collectively as “Shares”), Preference Units, OP Units, restricted units (formerly known as Long-Term Incentive Plan Units (“LTIP Units”("LTIP") Units) and our public unsecured debt. In this section, we refer to the Shares, preference units,Preference Units, OP Units, LTIP Unitsrestricted units and public unsecured debt together as our “securities” and the investors who own Shares/Units, OP/LTIP Units and public unsecured debtsuch securities as our “security holders”.
Our Performanceperformance and Securities Valuesecurities value are Subjectsubject to Risks Associatedrisks associated with the Real Estate Industryreal estate industry.
General
Real property investments are subject to varying degrees of risk and are relatively illiquid. Numerous factors may adversely affect the economic performance and value of our properties and the ability to realize that value. These factors include changes in the global, national, regional and local economic climates, 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 multifamily properties and single family homes 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, all of which could increase over time. These operating expenses could rise faster than our revenues causing our income to decline. Sources of labor and materials required for maintenance, repair, capital expenditure or development may be more expensive than anticipated. 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 Not Have Sufficient Cash Flows From Operations After Capital Expenditures to Cover Our Distributions and Our Dividend Policy May Lead to Quicker Dividend Reductions
We generally consider our cash flows provided by operating activities after capital expenditures to be adequate to meet operating requirements and payment of distributions to our security holders. However, there may be times when we experience shortfalls in our coverage of distributions, which may cause usunable to consider reducing our distributions and/renew leases or using the proceeds

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from property dispositions or additional financing transactions to make up the difference. Should these shortfalls occur for lengthy periods of time or be material in nature, our financial condition may be adversely affected and we may not be able to maintain our current distribution levels. While our dividend policy makes it less likely we will over distribute, it will also lead to a dividend reduction more quickly than a fixed dividend policy should operating results deteriorate. See Item 7 for additional discussion regarding our dividend policy.
We May Be Unable to Renew Leases or Relet Apartment Unitsrelet units as Leases Expireleases expire.
When our residents decide to leave our apartments, whether because they decide not to renew their leases or they leave prior to their lease expiration date, we may not be able to relet their apartment units. Even if the residents do renew or we can relet the apartment units, the terms of renewal or reletting may be less favorable than current lease terms. If we are unable to promptly renew the leases or relet the apartment 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. If residents do not experience increases in their income, we may be unable to increase rent and/or delinquencies may increase. Occupancy levels and market rents may be adversely affected by national and local economic and market conditions including, without limitation, new construction and excess inventory of multifamily and single family housing, increasing portions of single family housing stock being converted to rental use, rental housing subsidized by the government, other government programs that favor single family rental housing or owner occupied housing over multifamily rental housing, governmental regulations, slow or negative employment growth and household formation, the availability of low interestlow-interest mortgages or the availability of mortgages requiring little or no down payment for single family home buyers, changes in social preferences and the potential for geopolitical instability, all of which are beyond the Company's control. In addition, various state and local municipalities are considering and may continue to consider rent control legislation or take other actions which could limit our ability to raise rents. Finally, the federal government's policies, many of which may encourage home ownership, can increase competition and possibly limit our ability to raise rents. Consequently, our cash flow and ability to service debt and make distributions to security holders could be reduced.
The retail/commercial space at our properties primarily serves as an additional amenity for our residents. The long term nature of our retail/commercial leases (generally five to ten years with market based renewal options) and the characteristics of many of our tenants (generally small, local businesses) may subject us to certain risks. We may not be able to lease new space for rents that are consistent with our projections or for market rates. Also, when leases for our existing retail/commercial space expire, the space may not be relet or the terms of reletting, including the cost of allowances and concessions to tenants, may be less favorable than the current lease terms. Our properties compete with other properties with retail/commercial space. The presence

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of competitive alternatives may affect our ability to lease space and the level of rents we can obtain. If our retail/commercial tenants experience financial distress or bankruptcy, they may fail to comply with their contractual obligations, seek concessions in order to continue operations or cease their operations which could adversely impact our results of operations and financial condition. The revenues from our retail/commercial space represent approximately 4% of our total rental income.
We have increased our concentration of properties in certain core markets, which could have an adverse effect on our operations if a particular market is adversely affected by economic or other conditions.

We have increased our concentration of properties in certain core markets as a result of our strategy to reposition our portfolio from low barrier to entry/non-core markets to high barrier to entry/core markets. If any one or more of our core markets (Boston, New AcquisitionsYork, Washington D.C., Southern California, San Francisco, Seattle, South Florida and Denver) is adversely affected by local or regional economic conditions (such as business layoffs, industry slowdowns, changing demographics and other factors) or local real estate conditions (such as oversupply of or reduced demand for multifamily properties), such conditions may have an increased adverse impact on our results of operations than if our portfolio was more geographically diverse.
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 reconfigure our portfolio promptly in response to economic or other conditions. This inability to reallocate our capital promptly could adversely affect our financial condition and ability to make distributions to our security holders.
New acquisitions, development projects and/or Development Projects May Failrehabs may fail to Performperform as Expectedexpected and Competitioncompetition for Acquisitions May Resultacquisitions may result in Increased Pricesincreased prices for Propertiesproperties.
We intend to actively acquire, and/or develop and rehab multifamily properties for rental operations as market conditions dictate. We may also acquire multifamily properties that are unoccupied or in the early stages of lease up. We may be unable to lease up these apartment properties on schedule, resulting in decreases in expected rental revenues and/or lower yields due to lower occupancy and rates as well as higher than expected concessions.concessions or higher than expected operating expenses. We may not be able to achieve rents that are consistent with expectations for acquired, developed or rehabbed properties. We may underestimate the costs necessary to bring an acquired property up to standards established for its intended market position, to complete a development property or to complete a development property.rehab. Additionally, we expect that other real estate investors with capital will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development and acquisition efforts. This competition (or lack thereof) may increase (or depress) prices for multifamily properties. We may not be in a position or have the opportunity in the future to make suitable property acquisitions on favorable terms. We have acquired in the past and intend to continue to pursue the acquisition of properties and portfolios of properties, including large portfolios, that could increase our size and result in alterations to our capital structure. The total number of apartment units under development, costs of development and estimated completion dates are subject to uncertainties arising from changing economic conditions (such as the cost of labor and construction materials), competition and local government regulation.
In connection with such government regulation, we may incur liability if our properties are not constructed and operated in compliance with the accessibility provisions of the Americans with Disabilities Act, the Fair Housing Act or other federal, state or local requirements. Noncompliance could result in fines, subject us to lawsuits and require us to remediate or repair the noncompliance.
Risks Involved in Real Estate Activity Through Joint VenturesDevelopment and construction risks could affect our profitability.
We intend to continue to develop multifamily properties. These activities can include long planning and entitlement timelines and can involve complex and costly activities, including significant environmental remediation or construction work in high-density urban areas. We may abandon opportunities that we have already begun to explore for a number of reasons, including changes in local market conditions or increases in construction or financing costs, and, as a result, we may fail to recover expenses already incurred in exploring those opportunities. The occupancy rates and rents at a property may fail to meet our original expectations for a number of reasons, including changes in market and economic conditions beyond our control and the pastdevelopment by competitors of competing properties. We may be unable to obtain, or experience delays in obtaining, necessary zoning, occupancy, or other required governmental or third party permits and authorizations, which could result in increased costs or the delay or abandonment of opportunities.


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Our investments in joint ventures could be adversely affected by our lack of sole decision-making authority regarding major decisions, our reliance on our joint venture partners' financial condition, any disputes that may arise between us and our joint venture partners and our exposure to potential losses from the actions of our joint venture partners.
We currently do and may continue in the future to develop and acquire properties in joint ventures with other persons or entities when we believe circumstances warrant the use of such structures. A portion of the assets acquired in the Archstone Transaction were acquired through joint ventures with AVB that neither we nor AVB control solely. We have several joint ventures with other real estate investors. Joint venture investments, including the joint ventures with AVB, involve risks not present with respect to our wholly owned properties, including the possibility that following:
our joint venture partners might refuseexperience financial distress, become bankrupt or fail to makefund their share of required capital contributions, when due; that which may delay construction or development of a property or increase our financial commitment to the joint venture;
we may be responsible to our partners for indemnifiable losses; that
our joint venture partners might at any timemay have business interests or economicgoals with respect to a property that conflict with our business interests and goals, which could increase the likelihood of disputes regarding the ownership, management or disposition of the property;
we may be unable to take actions that are inconsistent with ours;opposed by our joint venture partners under arrangements that require us to share decision-making authority over major decisions affecting the ownership or operation of the joint venture and that any property owned by the joint venture, such as the sale or financing of the property or the making of additional capital contributions for the benefit of the property;
our joint venture partners may betake actions that we oppose;
our ability to sell or transfer our interest in a positionjoint venture to take actiona third party may be restricted without prior consent of our joint venture partners;
we may disagree with our joint venture partners about decisions affecting a property or withhold consent contrarythe joint venture, which could result in litigation or arbitration that increases our expenses, distracts our officers and disrupts the day-to-day operations of the property, including by delaying important decisions until the dispute is resolved; and
we may suffer losses as a result of actions taken by our joint venture partners with respect to our instructions or requests. joint venture investments.
At times we have entered into agreements providing for joint and several liability with our partners. Frequently, we and our partners may each have the right to trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partners' interest, at a time when we otherwise would not have initiated such a transaction. In some instances,Any of these risks could materially and adversely affect our ability to generate and recognize attractive returns on our joint venture partners mayinvestments, which could have competinga material adverse effect on our results of operations, financial condition and distributions to our shareholders.
Several of the assets we acquired in the Archstone Transaction along with certain preferred interests acquired in our markets that could create conflicts of interest. Further, the Company's joint venture partners may experience financial distress, including bankruptcy, and to the extent they do not meet their obligations to us or our joint ventures with them,AVB as part of the Archstone Transaction are subject to tax protection agreements, which could limit our flexibility with respect to our ownership of such assets or cause us to incur material costs.

Several of the assets we acquired in the Archstone Transaction were contributed to Archstone subject to various agreements limiting the ability of the owner of the property to take actions that would trigger income tax liability for the contributing owner of the property, including a taxable disposition of the property. In addition, we will also be required to maintain a certain amount of qualified nonrecourse financing on the tax protected properties during their respective restricted periods. Our obligations relating to the tax protected properties may affect the way in which we conduct our business, including whether, when and under what circumstances we sell properties or interests therein and the timing and nature of our financings and refinancing transactions. As a result, we may not be able to dispose of or refinance the tax protected properties when to do so may have otherwise been favorable to us and our shareholders, which could have a material adverse effect on our results of operations and financial condition. Certain preferred interests acquired in joint ventures with AVB as part of the Archstone Transaction have complex tax requirements that, if violated, may cause us to be required to indemnify the preferred stockholders for certain tax protection costs.
Changes in market conditions and volatility of share prices could adversely affect the market price of our Common Shares.
The stock markets, including the New York Stock Exchange, on which we list our Common Shares, have experienced significant price and volume fluctuations over time. As a result, the market price of our Common Shares could be similarly volatile, and investors in our Common Shares may experience a decrease in the value of their shares, including decreases unrelated to our

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affected.operating performance or prospects. The market price of our Common Shares may decline or fluctuate significantly in response to many factors, including but not limited to the following:
Because Real Estate Investments Are Illiquid, general market and economic conditions;
actual or anticipated variations in our guidance, quarterly operating results or dividends;
changes in our funds from operations, normalized funds from operations or earnings estimates;
difficulties or inability to access capital or extend or refinance debt;
large portfolio acquisitions or dispositions;
decreasing (or uncertainty in) real estate valuations;
rising crime rates in markets where our increasingly urban portfolio is concentrated;
a change in analyst and/or credit ratings;
adverse market reaction to any additional debt we incur in the future;
governmental regulatory action, including changes or proposed changes to the mandates of Fannie Mae or Freddie Mac, and changes in tax laws;
the issuance of additional Common Shares, or the perception that such issuances might occur, including under EQR's ATM program; and
the resale of substantial amounts of our common shares, or the anticipation of the resale of such shares, by large holders of our securities.
We May Not Be Ablemay not have sufficient cash flows from operations after capital expenditures to Sell Properties When Appropriatecover our distributions and our dividend policy may lead to quicker dividend reductions.
Real estate investmentsWe generally cannotconsider our cash flows provided by operating activities after capital expenditures to be sold quickly. Weadequate to meet operating requirements and payment of distributions to our security holders. However, there may be times when we experience shortfalls in our coverage of distributions, which may cause us to consider reducing our distributions and/or using the proceeds from property dispositions or additional financing transactions to make up the difference. Should these shortfalls occur for lengthy periods of time or be material in nature, our financial condition may be adversely affected and we may not be able to reconfiguremaintain our portfolio promptly in responsecurrent distribution levels. While our current dividend policy makes it less likely we will over distribute, it will also lead to economic or other conditions. This inability to reallocatea dividend reduction more quickly should operating results deteriorate. See Item 7 for additional discussion regarding our capital promptly could adversely affect our financial condition and ability to make distributions to our security holders.dividend policy.
The Valuevalue of Investment Securities Could Result In Lossesinvestment securities could result in losses to the CompanyCompany.
From time to time, the Company holds investment securities and/or cash investments that have various levels of repayment and liquidity risk, including government obligations and bond funds, money market funds or bank deposits. On occasion we also may purchase securities of companies in our own industry as a means to invest funds. There may be times when we experience declines in the value of these investment securities, which may result in losses to the Company and our financial condition or results of operations could be adversely affected. Sometimes the cash we deposit at a bank substantially exceeds the FDIC insurance limit or we invest cash in money market or similar type funds with investment management institutions that may be subject to, now or in the future, liquidity restrictions, resulting in risk to the Company of loss or lack of immediate availability of funds if these banks or institutions fail.fail to meet their obligations.
Any weaknesses identified in our internal control over financial reporting could have an adverse effect on our share price.
Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluate and report on our internal control over financial reporting. If we identify one or more material weaknesses in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which in turn could have an adverse effect on our share price.


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The occurrence of cyber incidents, or a deficiency in our cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our reputation and business relationships, all of which could negatively impact our financial results.
A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. More specifically, a cyber incident is an intentional attack or an unintentional event that can include gaining unauthorized access to systems to disrupt operations, corrupt data or steal confidential information, including information regarding our residents and employees. As our reliance on technology has increased, so have the risks posed to our systems, both internal and those we have outsourced to third party service providers. In addition, information security risks have generally increased in recent years due to the rise in new technologies and the increased sophistication and activities of perpetrators of cyber attacks. Our primary risks that could directly result from the occurrence of a cyber incident include operational interruption, damage to our reputation, damage to our business relationships with our residents/tenants and private data exposure. We have implemented processes, procedures and controls to help mitigate these risks, but these measures, as well as our increased awareness of a risk of a cyber incident, do not guarantee that our financial results will not be negatively impacted by such an incident.
Changes in Market Conditionslaws and Volatility of Share Prices Could Adversely Affect the Market Price of Our Common Shares
The stock markets, including the New York Stock Exchange, on which we listlitigation risk could affect our Common Shares, have experienced significant price and volume fluctuations. As a result, the market price of our Common Shares could be similarly volatile, and investors in our Common Shares may experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. The market price of our Common Shares may decline or fluctuate significantly in response to many factors, including but not limited to the following:
general market and economic conditions;
actual or anticipated variations in our guidance, quarterly operating results or dividends;
changes in our funds from operations, normalized funds from operations or earnings estimates;
difficulties or inability to access capital or extend or refinance debt;
large portfolio acquisitions or dispositions;
decreasing (or uncertainty in) real estate valuations;
rising crime rates in markets where our increasingly urban portfolio is concentrated;
a change in analyst ratings;
adverse market reaction to any additional debt we incur in the future;
governmental regulatory action, including changes or proposed changes to the mandates of Fannie Mae or Freddie Mac, and changes in tax laws;
the issuance of additional Common Shares, or the perception that such issuances might occur, including under EQR's ATM program; and
the resale of substantial amounts of our common shares, or the anticipation of the resale of such shares, by large holders of our securities.
Changes in Laws and Litigation Risk Could Affect Our Businessbusiness.
We are generally not able to pass through to our residents under existing leases any real estate or other federal, state or local taxes. Consequently, any such tax increases may adversely affect our financial condition and limit our ability to make distributions to our security holders.
We may become involved in legal proceedings, including but not limited to, proceedings related to consumer, shareholder, employment, environmental, development, condominium conversion, tort and commercial legal issues that, if decided adversely to or settled by us, could result in liability material to our financial condition or results of operations.

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Any Weaknesses Identified in Our Internal Control Over Financial Reporting Could Have an Adverse Effect on Our Share Price
Section 404 of the Sarbanes-Oxley Act of 2002 requires us to evaluateEnvironmental problems are possible and report on our internal control over financial reporting. If we identify one or more material weaknesses in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which in turn could have an adverse effect on our share price.
Environmental Problems Are Possible and Can Be Costlycan 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 consulting companies. While 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, there can be no assurance that we will not incur such liabilities in the future.
We are aware that some of our properties have lead paint and have implemented an operations and maintenance program at each of those properties. While we do not currently anticipate that we will incur any material liabilities as a result of the presence of lead paint at our properties, there can be no assurance that we will not incur such liabilities in the future.
There have been an increasinga number of lawsuits against owners and managers of multifamily properties alleging personal injury and property damage caused by the presence of mold in residential real estate. As some of these lawsuits have resulted in substantial monetary judgments or settlements, insurance carriers have reacted by excluding mold-related claims from standard policies and pricing mold endorsements at prohibitively high rates. While 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 our residents or the property, should mold become an issue in the future, our financial condition or results of operations may be adversely affected.
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 otherwise exist as to any of our properties.



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Climate Changechange
To the extent that climate change does occur, we may experience extreme weather and changes in precipitation and temperature, all of which may result in physical damage or a decrease in demand for properties located in these areas or affected by these conditions. Should the impact of climate change be material in nature, including destruction of our properties, or occur for lengthy periods of time, our financial condition or results of operations may be adversely affected.
In addition, changes in federal and state legislation and regulation on climate change could result in increased capital expenditures to improve the energy efficiency of our existing properties and could also require us to spend more on our new development properties without a corresponding increase in revenue.
Insurance Policy Deductibles, Exclusionspolicy deductibles, exclusions and Counterpartiescounterparties
As of December 31, 2012,2014, the Company's property insurance policy providespolicies provide 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, with approximately 80% of any excess losses being covered by insurance.$250,000. Any earthquake and named windstorm losses in critical areas are subject to a deductible of 5% of the values of the buildings involved in the losses. The Company also typically self-insures a substantial portion of the first $50 million of a property loss in excess of these base deductibles. Should a claim exceed these amounts, it would be 100% covered by insurance. Furthermore, the Company purchased additional coverage in the event that the Company suffers multiple non-catastrophic occurrences with losses and are not subjectfrom $25 million to $50 million within the aggregate self-insured retention.same policy year. The Company's general liability and worker's compensation policies at December 31, 20122014 provide for a $2.0 million and $1.0 million per occurrence deductible, respectively. These higher deductible and self-insured retention amounts do expose the Company to greater potential for uninsured losses. The Company also has become more susceptible to large losses but managementas it has reviewedtransformed its claims historyportfolio, becoming more concentrated in fewer, more valuable assets over the years and believes the savings in insurance premium expense justify this potential increased exposure over the long-term. However,a smaller geographical footprint. Furthermore, the potential impact of climate change, and increased severe weather or earthquakes could cause a significant increase in insurance premiums and

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deductibles, particularly for our coastal properties, or a decrease in the availability of coverage, either of which could expose the Company to even greater uninsured losses which may adversely affect our financial condition or results of operations.
As a result of the terrorist attacks of September 11, 2001, property insurance carriers created exclusions for losses from terrorism from our “all risk” property insurance policies. As of December 31, 2012, under a separate terrorism insurance policy, the
The Company was insured for $500.0also has $750.0 million in terrorism insurance coverage, with a $100,000 deductible. This coverage excludes losses from nuclear, biological and chemical attacks. In the event of a terrorist attack impacting one or more of our 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 Company has become more susceptible to large losses as it has transformed its portfolio, becoming more concentrated in fewer, more valuable assets over a smaller geographical footprint.

As of December 31, 2012,2014, the Company's cyber liability insurance policy provides for a $5.0 million general limit and a per occurrence deductible of $250,000 and a $5.0 million general limit.$250,000. Cyber liability insurance generally covers costs associated with the wrongful release, through inadvertent breach or network attack, of personally identifiable information such as social security or credit card numbers. This cyber policy would cover the cost of victim notification, credit monitoring and other crisis response expenses.

The Company relies on third party insurance providers for its property, general liability and worker's compensation insurance. While there has yet to be any non-performance by these major insurance providers, should any of them experience liquidity issues or other financial distress, it could negatively impact the Company. In addition, the Company annually assesses its insurance needs based on the cost of coverage and other factors. We may choose to self insure a greater portion of this risk in the future or may choose to have higher deductibles or lesser policy terms.
Non-Performance
The inability of Lehman to fulfill its indemnification obligations to us under the purchase agreement for the Archstone Transaction could increase our liabilities and adversely affect our results of operations and financial condition.
In addition to certain indemnification obligations of each party to the purchase agreement for the Archstone Transaction relating to breaches of fundamental representations and warranties and breaches of covenants and certain other specified matters, we negotiated as a term in the purchase agreement that Lehman retain responsibility for and indemnify us against damages resulting from certain third-party claims or other liabilities. These third-party claims and other liabilities include, without limitation, costs associated with various litigation matters. Lehman filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code in September 2008 and is currently in the process of post-petition liquidation. If Lehman completes its liquidation prior to the termination of their indemnity obligations to us under the purchase agreement, or otherwise distributes substantially all of its assets to its creditors prior to such time, Lehman may not be able to satisfy its obligations with respect to claims and retained liabilities covered by Our Operating Counterparties Could Adversely Affect Our Performancethe purchase agreement. The failure of Lehman to satisfy such obligations could have a material adverse effect on our results of operations and financial condition because claimants may successfully assert that we are liable for those claims and/or retained liabilities. In addition, we expect that certain obligations of Lehman to indemnify us will terminate upon expiration of the applicable indemnification period (generally no more than three years following the closing). The assertion of third-party

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claims after the expiration of the applicable indemnification period, or the failure of Lehman to satisfy its indemnification obligations, could have a material adverse effect on our results of operations and financial condition. 
Non-performance by our operating counterparties could adversely affect our performance.
We have relationships with and, from time to time, we execute transactions with or receive services from many counterparties. As a result, defaults by counterparties could result in services not being provided, or volatility in the financial markets could affect counterparties' ability to complete transactions with us as intended, both of which could result in disruptions to our operations that may adversely affect our business and results of operations.
Debt Financingfinancing and Preferred Shares/Preference Units Could Adversely Affect Our Performancepreferred shares/preference units could adversely affect our performance.
General
Please refer to Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, for the Company's total debt and unsecured debt summaries as of December 31, 20122014.
In addition to debt, we have a liquidation value of $50.0 million of outstanding preferred shares of beneficial interest/preference units with a dividend preference of 8.29% per annum as of December 31, 20122014. Our use of debt and preferred equity financing creates certain risks, including the following:
Disruptions in the Financial Markets Could Adversely Affect Our Abilityfinancial markets could adversely affect our ability to Obtain Debt Financingobtain debt financing and Impactimpact our Acquisitionsacquisitions and Dispositionsdispositions.
Dislocations and liquidity disruptions in capital and credit markets could impact liquidity in the debt markets, resulting in financing terms that are less attractive to us and/or the unavailability of certain types of debt financing. Should the capital and credit markets experience volatility and the availability of funds again become limited, or be available only on unattractive terms, we will incur increased costs associated with issuing debt instruments. In addition, it is possible that our ability to access the capital and credit markets may be limited or precluded by these or other factors at a time when we would like, or need, to do so, which would adversely impact our ability to refinance maturing debt and/or react to changing economic and business conditions. Uncertainty in the credit markets could negatively impact our ability to make acquisitions and make it more difficult or not possible for us to sell properties or may adversely affect the price we receive for properties that we do sell, as prospective buyers may experience increased costs of debt financing or difficulties in obtaining debt financing. Potential continued disruptions in the financial markets could also have other unknown adverse effects on us or the economy generally and may cause the price of our securities to fluctuate significantly and/or to decline.

Potential Reformsreforms to Fannie Mae and Freddie Mac Could Adversely Affect Our Performancecould adversely affect our performance.

There is significant uncertainty surrounding the futures of Fannie Mae and Freddie Mac (the "Government“Government Sponsored

15


Enterprises" Enterprises” or "GSEs"“GSEs”). Through their lender originator networks, the GSEs are significant lenders both to the Company and to buyers of the Company's properties. ShouldThe GSEs have a mandate to support multifamily housing through their financing activities. Any changes to their mandates, further reductions in their size or the scale of their activities or loss of key personnel could have a significant impact on the Company and may, among other things, lead to lower values for our assets and higher interest rates on our borrowings. The GSE's regulator has set overall volume limits on most of the lending activities of the GSEs. For 2015, these activities are generally consistent with historical requirements and are not anticipated to materially impact the GSEs' overall multifamily lending activity. However, going forward the regulator could require the GSEs have their mandates changed or reduced, materially changeto focus more of their lending terms, lose key personnel, be disbandedactivities on small borrowers or reorganized byproperties that the governmentregulator deems affordable, which may or otherwise discontinue providing liquidity to our sector, it would significantly reduce our access to secured debt capital and/or increase borrowing costs and would significantly reduce our sales of assets and/ormay not include the values realized upon sale.Company's assets. Disruptions in the floating rate tax-exempt bond market (where interest rates reset weekly) and in the credit market's perception of the GSEs, which guarantee and provide liquidity for many of these bonds, have been experienced in the past and may be experienced in the future and could result in an increase in interest rates on these debt obligations. These bonds could also be put to our consolidated subsidiaries if the GSEs fail to satisfy their guaranty obligations. While this obligation is in almost all cases non-recourse to us, this could cause the Company to have to repay these obligations on short notice or risk foreclosure actions on the collateralized assets.

Non-PerformanceNon-performance by Our Financial Counterparties Could Adversely Affect Our Performanceour financial counterparties could adversely affect our performance.
Although we have not experienced any material counterparty non-performance, disruptions in financial and credit markets could, among other things, impede the ability of our counterparties to perform on their contractual obligations. There are multiple

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financial institutions that are individually committed to lend us varying amounts as part of our revolving credit facility and delayed draw term loan facility. Should any of these institutions fail to fund their committed amounts when contractually required, our financial condition could be adversely affected. Should several of these institutions fail to fund, we could experience significant financial distress.
The Company also has developed assets with joint venture partners which were financed by financial institutions that have experienced varying degrees of distress in the past and could experience similar distress as economic conditions change. If one or more of these lenders fail to fund when contractually required, the Company or its joint venture partner may be unable to complete construction of its development properties.
A Significant Downgradesignificant downgrade in Our Credit Ratings Could Adversely Affect Our Performanceour credit ratings could adversely affect our performance.
A significant downgrade in our credit ratings, while not affecting our ability to draw proceeds under the revolving credit facility, and delayed draw term loan facility, would cause our borrowing costs to increase under the facilities andrevolving credit facility, impact our ability to borrow secured and unsecured debt, impair our ability to access the commercial paper market or otherwise limit our access to capital. In addition, a downgrade below investment grade would require us to post cash collateral and/or letters of credit in favor of some of our secured lenders to cover our self-insured property and liability insurance deductibles or to obtain lower deductible insurance compliant with the lenders' requirements at the lower ratings level.
Scheduled Debt Payments Could Adversely Affect Our Financial Conditiondebt 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, including joint venture indebtedness (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 operating cash flow will not be sufficient in all years to repay all maturing debt. As a result, certain of our other debt may cross default, we may be forced to postpone capital expenditures necessary for the maintenance of our properties, we may have to dispose of one or more properties on terms that would otherwise be unacceptable to us or we may be forced to allow the mortgage holder to foreclose on a property. 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.
Please refer to Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, for the Company's debt maturity schedule as of December 31, 20122014.
Financial Covenants Could Adversely Affectcovenants could adversely affect the Company's Financial Conditionfinancial condition.
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 containfacility contains certain restrictions, requirements and other limitations on our ability to incur debt. The indentures under which a substantial portion of our unsecured 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

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unsecured debt (including acquisition financing), and to sell all or substantially all of our assets. Our credit facilitiesfacility and indentures are cross-defaulted and also contain cross default provisions with other material debt. While the Company believes it was in compliance with its unsecured public debt covenants for both the years ended December 31, 20122014 and 20112013, should it fall out of compliance, it would likely have a negative impact on our financial condition and results of operations.
Some of the properties were financed with tax-exempt bonds or otherwise contain certain restrictive covenants or deed restrictions, including affordability requirements. The Company, and from time to time its consultants, monitor compliance with the restrictive covenants and deed restrictions that affect these properties. If these compliance requirements restrict our ability to increase our rental rates to low or moderate-income residents, or eligible/qualified residents, then our income from these properties may be limited. While we generally believe that the interest rate benefit attendant to properties with tax-exempt bonds more than outweighs any loss of income due to restrictive covenants or deed restrictions, this may not always be the case. Some of these requirements are complex and our failure to comply with them may subject us to material fines or liabilities.



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Our Degreedegree of Leverage Could Limit Our Abilityleverage could limit our ability to Obtain Additional Financingobtain additional financing.
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. Our consolidated debt-to-total market capitalization ratio was 30.7%28.5% as of December 31, 20122014. In addition, our most restrictive unsecured public debt covenants are as follows:
  December 31,
2014
 December 31,
2013
Total Debt to Adjusted Total Assets (not to exceed 60%) 39.2% 40.0%
Secured Debt to Adjusted Total Assets (not to exceed 40%) 18.4% 19.2%
Consolidated Income Available for Debt Service to  
  
Maximum Annual Service Charges  
  
(must be at least 1.5 to 1) 3.38
 3.07
Total Unsecured Assets to Unsecured Debt  
  
(must be at least 150%) 336.5% 326.9%
  December 31,
2012
 December 31,
2011
Total Debt to Adjusted Total Assets (not to exceed 60%) 38.6% 46.0%
Secured Debt to Adjusted Total Assets (not to exceed 40%) 17.6% 19.4%
Consolidated Income Available for Debt Service to  
  
Maximum Annual Service Charges  
  
(must be at least 1.5 to 1) 3.00
 2.59
Total Unsecured Assets to Unsecured Debt  
  
(must be at least 150%) 346.3% 259.9%
Rising Interest Rates Could Adversely Affect Cash Flowinterest rates could adversely affect cash flow.
Advances under our credit facilities bearfacility bears interest at a variable ratesrate 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. Certain public issuances of our senior unsecured debt instruments may also, from time to time, bear interest at floating rates.rates or be swapped to a floating rate of interest. We may also borrow additional money with variable interest rates in the future. Increases in interest rates would increase our interest expense under these debt instruments and would increase the costs of refinancing existing debt and of issuing new debt. Accordingly, higher interest rates could adversely affect cash flow and our ability to service our debt and make distributions to security holders.
Derivatives and Hedging Activity Could Adversely Affect Cash Flowhedging activity could adversely affect cash flow.
In the normal course of business, we use derivatives to manage our exposure to interest rate volatility on debt instruments, including hedging for future debt issuances. At other times we may utilize derivatives to increase our exposure to floating interest rates. We may also use derivatives to manage our exposure to foreign exchange rates or manage commodity prices in the daily operations of our business. There can be no assurance that these hedging arrangements will have the desired beneficial impact. These arrangements, which can include a number of counterparties, may expose us to additional risks, including failure of any of our counterparties to perform under these contracts, and may involve extensive costs, such as transaction fees or breakage costs, if we terminate them. No strategy can completely insulate us from the risks associated with interest rate, foreign exchange or commodity pricing fluctuations.
We Dependdepend on Our Key Personnelour key personnel.
We depend on the efforts of the Chairman of our Board of Trustees, Samuel Zell, and our executive officers, particularly David J. Neithercut, our President and Chief Executive Officer (“CEO”). If they resign or otherwise cease to be employed by us, our operations could be temporarily adversely affected. Mr. Zell has entered into retirement benefit and noncompetition agreements with the Company.

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Control and Influenceinfluence by Significant Security Holders Could Be Exercisedsignificant security holders could be exercised in a Manner Adversemanner adverse to Other Security Holdersother security holders.
The consent of certain affiliates of Mr. Zell is required for certain amendments to the Sixth Amended and Restated Agreement of Limited Partnership of the Operating Partnership (the “Partnership Agreement”). As a result of their security ownership and rights concerning amendments to the Partnership Agreement, the security holders referred to herein may have influence over the Company. Although to the Company's knowledge these security holders have not agreed to act together on any matter, they would be in a position to exercise even more influence over the Company's affairs if they were to act together in the future. This influence could conceivably be exercised in a manner that is inconsistent with the interests of other security holders. For additional information regarding the security ownership of our trustees, including Mr. Zell, and our executive officers, see Equity Residential's definitive proxy statement.

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Shareholders' Abilityability to Effect Changeseffect changes in Controlcontrol of the Company is Limitedlimited.
Provisions of Our Declarationour declaration of Trusttrust and Bylaws Could Inhibit Changesbylaws could inhibit changes in Controlcontrol.
Certain provisions of our Declaration of Trust and Bylaws may delay or prevent a change in control of the Company or other transactions that could provide the security holders with a premium over the then-prevailing market price of their securities or which might otherwise be in the best interest of our security holders. This includes the 5% Ownership Limit described below. While our existing preferred shares/preference units do not have these provisions, any future series of preferred shares/preference units may have certain voting provisions that could delay or prevent a change in control or other transactions that might otherwise be in the interest of our security holders. Our Bylaws require certain information to be provided by any security holder, or persons acting in concert with such security holder, who proposes business or a nominee at an annual meeting of shareholders, including disclosure of information related to hedging activities and investment strategies with respect to our securities. These requirements could delay or prevent a change in control or other transactions that might otherwise be in the interest of our security holders.
We Havehave a Share Ownership Limitshare ownership limit for REIT Tax Purposestax purposes.
To remain qualified as a REIT for federal income tax purposes, not more than 50% in value of our outstanding Shares may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of any year. To facilitate maintenance of our REIT qualification, our Declaration of Trust, subject to certain exceptions, prohibits ownership by any single shareholder of more than 5% of the lesser of the number or value of theany outstanding class of common or preferred shares. We refer to this restriction as the “Ownership Limit.” Absent any exemption or waiver granted by our Board of Trustees, securities acquired or held in violation of the Ownership Limit will be transferred to a trust for the exclusive benefit of a designated charitable beneficiary, and the security holder's rights to distributions and to vote would terminate. A transfer of Shares may be void if it causes a person to violate the Ownership Limit. The Ownership Limit could delay or prevent a change in control and, therefore, could adversely affect our security holders' ability to realize a premium over the then-prevailing market price for their Shares. To reduce the ability of the Board to use the Ownership Limit as an anti-takeover device, the Company's Ownership Limit requires, rather than permits, the Board to grant a waiver of the Ownership Limit if the individual seeking a waiver demonstrates that such ownership would not jeopardize the Company's status as a REIT. We have issued several of these waivers in the past.
Our Preferred Shares May Affect Changespreferred shares may affect changes in Controlcontrol.
Our Declaration of Trust authorizes the Board of Trustees to issue up to 100 million preferred shares, and to establish the preferences and rights (including the right to vote and the right to convert into common shares) of any preferred shares issued. The Board of Trustees may use its powers to issue preferred shares and to set the terms of such securities to delay or prevent a change in control of the Company, even if a change in control were in the interest of security holders.
Inapplicability of Maryland Law Limiting Certain Changeslaw limiting certain changes in Controlcontrol.
Certain provisions of Maryland law applicable to real estate investment trusts prohibit “business combinations” (including certain issuances of equity securities) with any person who beneficially owns ten percent or more of the voting power of outstanding securities, or with an affiliate who, at any time within the two-year period prior to the date in question, was the beneficial owner of ten percent or more of the voting power of the Company's outstanding voting securities (an “Interested Shareholder”), or with an affiliate of an Interested Shareholder. These prohibitions last for five years after the most recent date on which the Interested Shareholder became an Interested Shareholder. After the five-year period, a business combination with an Interested Shareholder must be approved by two super-majority shareholder votes unless, among other conditions, holders of common shares receive a minimum price for their shares and the consideration is received in cash or in the same form as previously paid by the Interested Shareholder for its common shares. As permitted by Maryland law, however, the Board of Trustees of the Company has opted out

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of these restrictions with respect to any business combination involving Mr. Zell and certain of his affiliates and persons acting in concert with them. Consequently, the five-year prohibition and the super-majority vote requirements will not apply to a business combination involving us and/or any of them. Such business combinations may not be in the best interest of our security holders.

The Archstone transaction is the largest such transaction in the Company's history and exposes us to significant additional risk.

We plan to fund a portion of the cash purchase price of the Archstone transaction as well as repay indebtedness incurred or assumed in connection with the Archstone transaction with capital raised through significant dispositions of assets. If we are unable to consummate such dispositions in a timely manner, on attractive terms, or at all, we will likely have to incur greater indebtedness and/or issue additional equity securities.

We currently expect to finance a portion of the cash purchase price of the Archstone transaction and to ultimately refinance indebtedness assumed or incurred in connection with the Archstone transaction with proceeds generated from the disposition of certain Archstone assets and of our assets that we believe are not consistent with our ongoing business strategy or that may be in markets in which we intend to reduce our current presence. The amount of such proposed dispositions is significant. We can provide no assurance that we will in fact be able to consummate such dispositions at all, at a time necessary to apply the proceeds to the Archstone transaction or the refinancing of debt, or at prices that we would otherwise expect to achieve. Factors that could limit our ability to successfully dispose of assets include:

the possible lack of financing available to potential buyers, in particular if prevailing interest rates rise or if the GSEs increase their interest rates on their lending, make their underwriting criteria more restrictive, or if the lending activities of the GSEs are curtailed or ultimately terminated;
our operational ability to successfully execute a disposition plan that is more significant than any disposition plan that we have previously executed;
other sellers marketing competing properties; and
the fact that potential purchasers will perceive that we are more likely to sell on less favorable terms to us due to the Archstone transaction and our related financing needs.

Failure to timely achieve a material portion of our anticipated dispositions would likely require us to incur greater indebtedness to fund the Archstone transaction or seek other methods to refinance the debt incurred or assumed in connection with the Archstone transaction, which involves the risk described herein, or issue more equity securities, which is subject to execution and pricing risk. The failure to successfully execute a material portion of our disposition plan could have a material adverse effect on our financial condition, liquidity, results of operations and distributions to our shareholders.

In addition, we plan to defer the taxable gain on certain of our dispositions as exchanges made in connection with the Archstone transaction pursuant to Section 1031 of the Internal Revenue Code. The requirements for qualification under Section 1031 are technical and complex. To the extent we are unable to defer such gains to the extent anticipated, the benefits of such dispositions will be reduced, and we could recognize significant taxable gains as a result of such dispositions, which would require us to make distributions in excess of our expectations, which would have a material adverse effect on our financial condition.

There can be no assurance that the Archstone transaction will be consummated in accordance with the anticipated timing or at all.

Although we expect to close the Archstone transaction in the first quarter of 2013, there can be no assurance that the Archstone transaction will be completed in accordance with the anticipated timing or at all. The purchase agreement contains closing conditions, which may not be satisfied or waived, in which case the Company and AVB and/or Lehman will not be obligated to complete the Archstone transaction. In addition, under circumstances specified in the purchase agreement, the Company and AVB or Lehman may terminate the purchase agreement.

We expect to incur significant additional indebtedness, including significant floating rate debt and significant amounts of indebtedness with maturity dates in 2014, in order to consummate the Archstone transaction, which may have a material adverse effect on our financial condition, results of operations and distributions to our shareholders.

We may raise additional funds to finance our portion of the Archstone transaction cash purchase price through one or more methods, including, without limitation, from borrowings under our revolving credit facility and delayed draw term loan facility, proceeds from asset dispositions, bank term debt or unsecured debt or equity offerings. Depending on market conditions, we may increase or decrease the anticipated sources of debt financing. Our obligations under the purchase agreement are not conditioned upon the consummation of any financing transactions.

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In connection with the Archstone transaction, we will also assume significant indebtedness, including a significant amount of secured mortgage indebtedness. Taking into account our existing indebtedness, the assumption of indebtedness in the Archstone transaction, and possible financing plans to fund our portion of the Archstone transaction cash purchase price, our consolidated indebtedness will materially increase after giving effect to the Archstone transaction. We may not be able to repay or otherwise refinance such indebtedness when it becomes due and payable, which would have a material adverse effect on our results of operations, liquidity and financial condition. If we default under a mortgage loan, we may lose the properties securing these loans.

Further, because a significant amount of the assets we expect to acquire from Archstone are secured by mortgage indebtedness, and because we intend to dispose of significant amounts of our properties that are currently unencumbered, our unencumbered asset pool will be reduced significantly. This may increase our costs of raising additional unsecured indebtedness and could significantly limit our financial flexibility.

In addition, a significant amount of the indebtedness we expect to incur and assume in connection with the Archstone transaction will have floating interest rates rather than fixed interest rates or matures in 2014. To the extent that interest rates increase and we are unable to successfully hedge against rising interest rates, our interest expense could increase substantially.

Our indebtedness could have additional significant adverse consequences on our business, such as:
having our long-term debt downgraded or put on a watch list by one or more rating agencies;
requiring us to use a substantial portion of our cash flow from operations to service our indebtedness, which would reduce the available cash flow to fund working capital, capital expenditures, development projects and other general corporate purposes and reduce cash for distributions;
limiting our ability to obtain additional financing to fund our working capital needs, acquisitions, capital expenditures or other debt service requirements or for other purposes;
increasing our exposure to floating interest rates;
limiting our ability to compete with other companies who are not as highly leveraged, as we may be less capable of responding to adverse economic and industry conditions;
restricting us from making strategic acquisitions, developing properties or exploiting business opportunities;
restricting the way in which we conduct our business because of financial and operating covenants in the agreements governing our and our subsidiaries' existing and future indebtedness, including, in the case of certain indebtedness of subsidiaries, certain covenants that restrict the ability of subsidiaries to pay dividends or make other distributions to us;
exposing us to potential events of default (if not cured or waived) under financial and operating covenants contained in our or our subsidiaries' debt instruments that could have a material adverse effect on our business, financial condition and operating results;
increasing our vulnerability to a downturn in general economic conditions;
limiting our ability to react to changing market conditions in our industry and in our tenants' and borrowers' industries; and
substantial prepayment penalties as we refinance this debt.

The impact of any of the potential adverse consequences could have a material adverse effect on our results of operations, financial condition, liquidity and distributions to our shareholders.

The Archstone transaction is expected to be dilutive initially to our earnings and earnings per share.
As a result of the issuance of our common shares to Lehman as part of the consideration paid in the Archstone transaction and the sale of our Common Shares in 2012 to finance the Archstone transaction, as well as a result of the expected dispositions necessary to enable us to finance the Archstone transaction, the Archstone transaction is expected to be dilutive to our operating results, both on an absolute basis and on a per share basis. However, the amount of any dilution will depend on a number of factors, including the pace of our planned asset sales, as discussed above and the ultimate mix of sources used to finance the Archstone transaction. For example, if our disposition plan occurs at a faster pace than anticipated, as we currently expect, such dispositions will result in more dilution to our revenues, net income, NOI, funds from operations and normalized funds from operations.



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We will incur substantial expenses and payments even if the Archstone transaction is not completed.
We have incurred substantial legal, accounting, financial advisory and other costs and our management has devoted considerable time and effort in connection with the Archstone transaction. If the Archstone transaction is not completed, we will bear certain fees and expenses associated with the Archstone transaction without realizing the benefits of the Archstone transaction. The fees and expenses may be significant and could have an adverse impact on our results of operations.
The purchase agreement provides for a break-up fee payable by the Company and AVB of $800.0 million if the purchase agreement is terminated under certain circumstances, including as a result of a breach by the Company and AVB of any covenant or agreement under the purchase agreement. Any payment of the break-up fees would have a material adverse impact on our results of operations and our liquidity.
Our obligations under the purchase agreement entered into in the Archstone transaction are joint and several with AVB. The failure of AVB to perform its obligations could cause the purchase agreement to be terminated and could have a material adverse effect on our results of operations and financial condition.
Although we have agreed to purchase approximately 60% of the Archstone assets in the Archstone transaction and AVB has agreed to acquire approximately 40% of the Archstone assets, our obligations under the purchase agreement are joint and several with AVB. If AVB determines not to consummate the Archstone transaction, we do not have the right to consummate the transaction alone. In addition, although we expect to be liable only for our pro rata share of any break-up fee or other obligations arising under the purchase agreement (approximately 60%) pursuant to arrangements with AVB, in the event AVB fails to pay its pro rata share of any such obligations, we will be responsible for paying 100% of such obligations. As a result, the failure of AVB to perform its obligations under the purchase agreement would have a material adverse effect on our results of operations, financial condition, liquidity and distributions to our shareholders.
Several of the assets we expect to acquire in the Archstone transaction are subject to tax protection agreements, which could limit our flexibility with respect to our ownership of such assets.
Several of the assets we expect to acquire in the Archstone transaction were contributed to Archstone subject to various agreements limiting the ability of the owner of the property to take actions that would trigger income tax liability for the contributing owner of the property, including a taxable disposition of the property. In addition, we will also be required to maintain a certain amount of qualified nonrecourse financing on the tax protected properties during their respective restricted periods. Our obligations relating to the tax protected properties may affect the way in which we conduct our business, including whether, when and under what circumstances we sell properties or interests therein and the timing and nature of our financings and refinancing transactions. As a result, we may not be able to dispose of or refinance the tax protected properties when to do so may have otherwise been favorable to us and our shareholders, which could have a material adverse effect on our results of operations and financial condition.

Our business and the market price of our Common Shares may be adversely affected if the Archstone transaction is not completed.
The Archstone transaction is subject to customary and other closing conditions. If the Archstone transaction is not completed, we could be subject to a number of risks that may adversely affect our business and the market price of our Common Shares, including:

our management's attention may be diverted from our day-to-day business and our employees and our relationships with customers may be disrupted as a result of efforts relating to attempting to consummate the Archstone transaction;
the market price of our Common Shares may decline to the extent that the current market price reflects a market assumption that the Archstone transaction will be completed;
we must pay certain costs related to the Archstone transaction, such as legal and accounting fees and expenses, regardless of whether the Archstone transaction is consummated; and
we would not realize the benefits we expect to realize from consummating the Archstone transaction.

The intended benefits of the Archstone transaction may not be realized, which could have a negative impact on our results of operations, financial conditions, the market price of our Common Shares and our distributions to our shareholders.
We may be subject to additional risks and may not be able to achieve the anticipated benefits of the Archstone transaction if the transaction is consummated. Upon completion of the Archstone transaction, we will need to integrate the properties and

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other assets we acquire from Archstone (the "Archstone Portfolio") with our existing operations. The Archstone transaction represents the largest acquisition by dollar amount of a property portfolio ever attempted by us. We may not be able to accomplish the integration of the Archstone Portfolio smoothly, successfully or within the anticipated costs. The diversion of our management's attention from our current operations to integration efforts and any difficulties encountered could prevent us from realizing the full benefits anticipated to result from the Archstone transaction and could adversely affect our business and the price of our Common Shares. Additional risks include, among others:

inability to successfully integrate the operations or information technology of the acquired company, maintain consistent standards, controls, policies and procedures, or realize the anticipated benefits of the acquisitions within the anticipated timeframe or at all;
inability to effectively monitor and manage our expanded portfolio of properties, retain key employees or attract highly qualified new employees;
increased costs or increases in taxable income due to restructuring or other steps required in connection with the integration of the Archstone Portfolio;
projections of estimated future revenues, cost savings or operating metrics that we develop during the due diligence and integration planning process might be inaccurate;
the value of acquired assets or the market price of our Common Shares may decline;
the impact of the Archstone Portfolio on our internal controls and compliance with the regulatory requirements under the Sarbanes-Oxley Act of 2002;
unanticipated issues, expenses and liabilities, including but not limited to, an investment in a portfolio of assets in Germany;
diversion of our management's attention away from other business concerns;
exposure to any undisclosed or unknown potential liabilities or litigation relating to the Archstone Portfolio; and
potential underinsured losses on the Archstone Portfolio.

We cannot assure you that we would be able to integrate the Archstone Portfolio without encountering difficulties or that any such difficulties will not have a material adverse effect on us. Failure to realize the intended benefits of the Archstone transaction could have a material adverse effect on our results of operations, financial condition, the market price of our Common Shares and our distributions to our shareholders.

We will increase our concentration of properties in certain core markets as a result of the Archstone transaction, which could have an adverse effect on our operations if a particular market is adversely affected by economic or other conditions.

As a result of the Archstone transaction, we will increase our concentration of properties in certain core markets as a result of our strategy to reposition our portfolio from low barrier to entry/non-core markets to high barrier to entry/core markets. If any one or more of such core markets, such as Washington D.C., Southern California, New York or San Francisco, is adversely affected by local or regional economic conditions (such as business layoffs, industry slowdowns, changing demographics and other factors) or local real estate conditions (such as oversupply of or reduced demand for multifamily properties), such conditions may have an increased adverse impact on our results of operations than if our portfolio was more geographically diverse.

Our investments in joint ventures could be adversely affected by our lack of sole decision-making authority regarding major decisions, our reliance on our joint venture partners' financial condition, any disputes that may arise between us and our joint venture partners and our exposure to potential losses from the actions of our joint venture partners.
A portion of the assets we are acquiring in the Archstone transaction are being acquired through joint ventures with AVB that neither we nor AVB will control solely. Joint ventures, including our proposed joint ventures with AVB, involve risks not present with respect to our wholly owned properties, including the following:

We may be unable to take actions that are opposed by our joint venture partners under arrangements that require us to share decision-making authority over major decisions affecting the ownership or operation of the joint venture and any property owned by the joint venture, such as the sale or financing of the property or the making of additional capital contributions for the benefit of the property;
Our joint venture partners may take actions that we oppose;
Our ability to sell or transfer our interest in a joint venture to a third party may be restricted without prior consent of our joint venture partners;

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Our joint venture partners might become bankrupt or fail to fund their share of required capital contributions, which may delay construction or development of a property or increase our financial commitment to the joint venture;
Our joint venture partners may have business interests or goals with respect to a property that conflict with our business interests and goals, which could increase the likelihood of disputes regarding the ownership, management or disposition of the property;
We may disagree with our joint venture partners about decisions affecting a property or the joint venture, which could result in litigation or arbitration that increases our expenses, distracts our officers and directors and disrupts the day-to-day operations of the property, including by delaying important decisions until the dispute is resolved; and
We may suffer losses as a result of actions taken by our joint venture partners with respect to our joint venture investments.

Any of these risks could materially and adversely affect our ability to generate and recognize attractive returns on our joint venture investments, which could have a material adverse effect on our results of operations, financial condition and distributions to our shareholders.
Shares eligible for future resale by Lehman may depress our share price.
We have agreed to issue 34,468,085 of our Common Shares to Lehman in connection with the Archstone transaction. We have agreed to enter into a registration rights agreement at the closing of the Archstone transaction to cover resales of such shares. The resale of substantial amounts of our Common Shares by Lehman in the public markets, or even the anticipation of the resale of such shares, could have a material adverse effect on the market price of our Common Shares. Such an adverse effect on the market price of our Common Shares would make it more difficult for us to sell our shares in the future at prices which we deem appropriate or to use our shares as currency for future acquisitions.
The inability of Lehman to fulfill its indemnification obligations to us under the purchase agreement could increase our liabilities and adversely affect our results of operations and financial condition.
In addition to certain indemnification obligations of each party to the purchase agreement relating to breaches of fundamental representations and warranties and breaches of covenants and certain other specified matters, we have negotiated as a term in the purchase agreement that Lehman retain responsibility for and indemnify us against damages resulting from certain third-party claims or other liabilities. These third-party claims and other liabilities include, without limitation, costs associated with various litigation matters. Lehman filed for bankruptcy protection under Chapter 11 of the Bankruptcy Code in September 2008 and is currently in the process of post-petition liquidation. If Lehman completes its liquidation prior to the termination of their indemnity obligations to us under the purchase agreement, or otherwise distributes substantially all of its assets to its creditors prior to such time, Lehman may not be able to satisfy its obligations with respect to claims and retained liabilities covered by the purchase agreement. The failure of Lehman to satisfy such obligations could have a material adverse effect on our results of operations and financial condition because claimants may successfully assert that we are liable for those claims and/or retained liabilities. In addition, we expect that certain obligations of Lehman to indemnify us will terminate upon expiration of the applicable indemnification period (generally no more than three years following the closing). The assertion of third-party claims after the expiration of the applicable indemnification period, or the failure of Lehman to satisfy its indemnification obligations, could have a material adverse effect on our results of operations and financial condition. 
Our Successsuccess as a REIT Is Dependentis dependent on Compliancecompliance with Federal Income Tax Requirementsfederal income tax requirements.
Our Failurefailure to Qualifyqualify as a REIT Would Have Serious Adverse Consequenceswould have serious adverse consequences to Our Security Holdersour security holders.
We believe that we have qualified for taxation as a REIT for federal income tax purposes since our taxable year ended December 31, 1992 based, in part, upon opinions of tax counsel received whenever we have issued equity securities or engaged in significant merger transactions. We plan to continue to meet the requirements for taxation as a REIT. Many of these requirements,

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however, are highly technical and complex. We cannot, therefore, guarantee that we have qualified or will qualify as a REIT in the future as a REIT.future. The determination that we are a REIT requires an analysis of various factual matters that may not be totally within our control. For example, to qualify as a REIT, our gross income must generally come from rental and other real estate or passive related sources that are itemized in the REIT tax laws. We are also required to distribute to security holders at least 90% of our REIT taxable income excluding net capital gains. The fact that we hold our assets through the Operating Partnership further complicates the application of the REIT requirements. Even a technical or inadvertent mistake could jeopardize our REIT status; however, the REIT qualification rules permit REITs in certain circumstances to pay a monetary penalty for inadvertent mistakes rather than lose REIT status. There is also risk that Congress and the IRS might make changes to the tax laws and regulations, and

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the courts might issue new rulings that make it more difficult, or impossible, for us to remain qualified as a REIT. We do not believe, however, that any pending or proposed tax law changes would jeopardize our REIT status.

If we fail to qualify as a REIT, we would be subject to federal income tax at regular corporate rates. Also, unless the IRS granted us relief under certain statutory provisions, we would remain disqualified from taxation as a REIT for four years following the year in which we failed to qualify as a REIT. If we fail to qualify as a REIT, we would have to pay significant income taxes. We therefore would have less money available for investments or for distributions to security holders. This would likely have a significant adverse effect on the value of our securities. In addition, we would no longer be required to make any distributions to security holders. Even if we qualify as a REIT, we are and will continue to be subject to certain federal, state and local taxes on our income and property. In addition, various business activities which generate income that is not qualifying income for a REIT are conducted through taxable REIT subsidiaries and will be subject to federal and state income tax at regular corporate rates to the extent they generate taxable income.
We Could Be Disqualifiedcould be disqualified as a REIT or Havehave to Pay Taxespay taxes if Our Merger Partners Did Not Qualifyour merger partners did not qualify as REITsREITs.
If any of our prior merger partners had failed to qualify as a REIT throughout the duration of their existence, then they might have had undistributed “Subchapter C corporation earnings and profits” at the time of their merger with us. If that was the case and we did not distribute those earnings and profits prior to the end of the year in which the merger took place, we might not qualify as a REIT. We believe, based in part upon opinions of legal counsel received pursuant to the terms of our merger agreements as well as our own investigations, among other things, that each of our prior merger partners qualified as a REIT and that, in any event, none of them had any undistributed “Subchapter C corporation earnings and profits” at the time of their merger with us. If any of our prior merger partners failed to qualify as a REIT, an additional concern would be that they could have been required to recognize taxable gain at the time they merged with us. We would be liable for the tax on such gain. We also could have to pay corporate income tax on any gain existing at the time of the applicable merger on assets acquired in the merger if the assets are sold within ten years of the merger.
Compliance with REIT Distribution Requirements May Affect Our Financial Conditiondistribution requirements may affect our financial condition.
Distribution Requirements May Increaserequirements may increase the Indebtednessindebtedness of the CompanyCompany.
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 us 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.
Tax Elections Regarding Distributions May Impact Future Liquidityelections regarding distributions may impact future liquidity of the CompanyCompany.
During 2008 and 2009,In past years we did make,have made, and under certain circumstances may consider making again in the future, a tax election to treat future distributions to shareholders as distributions in the current year. This election, which is provided for in the Internal Revenue Code, may allow us to avoid increasing our dividends or paying additional income taxes in the current year. However, this could result in a constraint on our ability to decrease our dividends in future years without creating risk of either violating the REIT distribution requirements or generating additional income tax liability.
Federal Income Tax Considerations
General
The following discussion summarizes the federal income tax considerations material to a holder of common shares. It is not exhaustive of all possible tax considerations. For example, it does not give a detailed discussion of any state, local or foreign tax considerations. The following discussion also does not address all tax matters that may be relevant to prospective shareholders

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in light of their particular circumstances. Moreover, it does not address all tax matters that may be relevant to shareholders who are subject to special treatment under the tax laws, such as insurance companies, tax-exempt entities, financial institutions or broker-dealers, foreign corporations, persons who are not citizens or residents of the United States and persons who own shares through a partnership or other entity treated as a flow-through entity for federal income tax purposes.

The specific tax attributes of a particular shareholder could have a material impact on the tax considerations associated with the purchase, ownership and disposition of common shares. Therefore, it is essential that each prospective shareholder consult

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with his or her own tax advisors with regard to the application of the federal income tax laws to the shareholder's personal tax situation, as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.

The information in this section is based on the current Internal Revenue Code, current, temporary and proposed Treasury regulations, the legislative history of the Internal Revenue Code, current administrative interpretations and practices of the Internal Revenue Service, including its practices and policies as set forth in private letter rulings, which are not binding on the Internal Revenue Service, and existing court decisions. Future legislation, regulations, administrative interpretations and court decisions could change current law or adversely affect existing interpretations of current law. Any change could apply retroactively. Thus, it is possible that the Internal Revenue Service could challenge the statements in this discussion, which do not bind the Internal Revenue Service or the courts, and that a court could agree with the Internal Revenue Service.
Our Taxationtaxation

We elected REIT status beginning with the year that ended December 31, 1992. In any year in which we qualify as a REIT, we generally will not be subject to federal income tax on the portion of our REIT taxable income or capital gain that we distribute to our shareholders. This treatment substantially eliminates the double taxation that applies to most corporations, which pay a tax on their income and then distribute dividends to shareholders who are in turn taxed on the amount they receive. We elected taxable REIT subsidiary status for certain of our corporate subsidiaries primarily those engaged in activities which cannot be performed directly by a REIT, such as condominium conversion and sale activities. As a result, we will be subject to federal income taxes fortax on the taxable income generated by these activities performed byin our taxable REIT subsidiaries.

We will be subject to federal income tax at regular corporate rates upon our REIT taxable income or capital gains that we do not distribute to our shareholders. In addition, we will be subject to a 4% excise tax if we do not satisfy specific REIT distribution requirements. We could also be subject to the “alternative minimum tax” on our items of tax preference. In addition, any net income from “prohibited transactions” (i.e., dispositions of property, other than property held by a taxable REIT subsidiary, held primarily for sale to customers in the ordinary course of business) will be subject to a 100% tax. We could also be subject to a 100% penalty tax on certain payments received from or on certain expenses deducted by a taxable REIT subsidiary if any such transaction is not respected by the Internal Revenue Service. If we fail to satisfy the 75% gross income test or the 95% gross income test (described below) but have maintained our qualification as a REIT because we satisfied certain other requirements, we will still generally be subject to a 100% penalty tax on the taxable income attributable to the gross income that caused the income test failure. If we fail to satisfy any of the REIT asset tests (described below) by more than a de minimis amount, due to reasonable cause, and we nonetheless maintain our REIT qualification because of specified cure provisions, we will be required to pay a tax equal to the greater of $50,000 or the highest marginal corporate tax rate multiplied by the net income generated by the non-qualifying assets. If we fail to satisfy any provision of the Internal Revenue Code that would result in our failure to qualify as a REIT (other than a violation of the REIT gross income or asset tests described below) and the violation is due to reasonable cause, we may retain our REIT qualification but we will be required to pay a penalty of $50,000 for each such failure. Moreover, we may be subject to taxes in certain situations and on certain transactions that we do not presently contemplate.
We believe that we have qualified as a REIT for all of our taxable years beginning with 1992. We also believe that our current structure and method of operation is such that we will continue to qualify as a REIT. However, given the complexity of the REIT qualification requirements, we cannot provide any assurance that the actual results of our operations have satisfied or will satisfy the requirements under the Internal Revenue Code for a particular year.
If we fail to qualify for taxation as a REIT in any taxable year and the relief provisions described herein do not apply, we will be subject to tax on our taxable income at regular corporate rates. We also may be subject to the corporate “alternative minimum tax.” As a result, our failure to qualify as a REIT would significantly reduce the cash we have available to distribute to our shareholders. Unless entitled to statutory relief, we would not be able to re-elect to be taxed as a REIT until our fifth taxable year after the year of disqualification. It is not possible to state whether we would be entitled to statutory relief.


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Our qualification and taxation as a REIT depend on our ability to satisfy various requirements under the Internal Revenue Code. We are required to satisfy these requirements on a continuing basis through actual annual operating and other results. Accordingly, there can be no assurance that we will be able to continue to operate in a manner so as to remain qualified as a REIT.

Ownership of Taxable REIT Subsidiaries by Us. The Internal Revenue Code provides that REITs may own greater than ten percent of the voting power and value of the securities of a “taxable REIT subsidiary” or “TRS”, provided that the aggregate value of all of the TRS securities held by the REIT does not exceed 25% of the REIT's total asset value. TRSs are corporations subject to tax as a regular “C” corporation that have elected, jointly with a REIT, to be a TRS. Generally, a taxable REIT subsidiary may own assets that cannot otherwise be owned by a REIT and can perform impermissible tenant services (discussed below), which would otherwise taint our rental income under the REIT income tests. However, the REIT will be obligated to pay a 100%

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penalty tax on some payments that we receive or on certain expenses deducted by our TRSs if the economic arrangements between us, our tenants and the TRS are not comparable to similar arrangements among unrelated parties. A TRS may also receive income from prohibited transactions without incurring the 100% federal income tax liability imposed on REITs. Income from prohibited transactions may include the purchase and sale of land, the purchase and sale of completed development properties and the sale of condominium units.

TRSs pay federal and state income tax at the full applicable corporate rates. The amount of taxes paid on impermissible tenant services income and the sale of real estate held primarily for sale to customers in the ordinary course of business may be material in amount. The TRSs will attempt to reduce, if possible, the amount of these taxes, but we cannot guarantee whether, or the extent to which, measures taken to reduce these taxes will be successful. To the extent that these companies are required to pay taxes, less cash may be available for distributions to shareholders.

Share Ownership Test and Organizational Requirement. In order to qualify as a REIT, our shares of beneficial interest must be held by a minimum of 100 persons for at least 335 days of a taxable year that is 12 months, or during a proportionate part of a taxable year of less than 12 months. Also, not more than 50% in value of our shares of beneficial interest may be owned directly or indirectly by applying certain constructive ownership rules, by five or fewer individuals during the last half of each taxable year. In addition, we must meet certain other organizational requirements, including, but not limited to, that (i) the beneficial ownership in us is evidenced by transferable shares and (ii) we are managed by one or more trustees. We believe that we have satisfied all of these tests and all other organizational requirements and that we will continue to do so in the future. In order to ensure compliance with the 100 person test and the 50% share ownership test discussed above, we have placed certain restrictions on the transfer of our shares that are intended to prevent further concentration of share ownership. However, such restrictions may not prevent us from failing these requirements, and thereby failing to qualify as a REIT.

Gross Income Tests. To qualify as a REIT, we must satisfy two gross income tests:

(1)At least 75% of our gross income for each taxable year must generally be derived directly or indirectly from rents from real property, interest on obligations secured by mortgages on real property or on interests in real property, gain from the sale or other disposition of non-dealer real property and shares of REIT stock, dividends paid by another REIT and from some types of temporary investments (excluding certain hedging income).
(2)At least 95% of our gross income for each taxable year must generally be derived from sources qualifying under the 75% test described in (1) above, non-REIT dividends, non-real estate mortgage interest and gain from the sale or disposition of non-REIT stock or securities (excluding certain hedging income).

To qualify as rents from real property for the purpose of satisfying the gross income tests, rental payments must generally be received from unrelated persons and not be based on the net income of the resident. Also, the rent attributable to personal property must not exceed 15% of the total rent. We may generally provide services to residents without “tainting” our rental income only if such services are “usually or customarily rendered” in connection with the rental of real property and not otherwise considered “impermissible services”. If such services are impermissible, then we may generally provide them only if they are considered de minimis in amount, or are provided through an independent contractor from whom we derive no revenue and that meets other requirements, or through a taxable REIT subsidiary. We believe that services provided to residents by us either are usually or customarily rendered in connection with the rental of real property and not otherwise considered impermissible, or, if considered impermissible services, will meet the de minimis test or will be provided by an independent contractor or taxable REIT subsidiary. However, we cannot provide any assurance that the Internal Revenue Service will agree with these positions.

If we fail to satisfy one or both of the gross income tests for any taxable year, we may nevertheless qualify as a REIT for the year if we are entitled to relief under certain provisions of the Internal Revenue Code. In this case, a penalty tax would still be applicable as discussed above. Generally, it is not possible to state whether in all circumstances we would be entitled to the benefit of these relief provisions and in the event these relief provisions do not apply, we will not qualify as a REIT.

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Asset Tests. In general, on the last day of each quarter of our taxable year, we must satisfy four tests relating to the nature of our assets:

(1)At least 75% of the value of our total assets must consist of real estate assets (which include for this purpose shares in other real estate investment trusts) and certain cash related items;
(2)Not more than 25% of the value of our total assets may consist of securities other than those in the 75% asset class;
(3)Except for securities included in item 1 above, equity investments in other REITs, qualified REIT subsidiaries (i.e., corporations owned 100% by a REIT that are not TRSs or REITs), or taxable REIT subsidiaries: (a) the value of any one issuer's securities owned by us may not exceed 5% of the value of our total assets and (b) we may not own securities representing more than 10% of the voting power or value of the outstanding securities of any one issuer; and

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securities representing more than 10% of the voting power or value of the outstanding securities of any one issuer; and
(4)Not more than 25% of the value of our total assets may consist of securities of one or more taxable REIT subsidiaries.
The 10% value test described in clause (3)(b) above does not apply to certain securities that fall within a safe harbor under the Code. Under the safe harbor, the following are not considered “securities” held by us for purposes of this 10% value test: (i) straight debt securities, (ii) any loan of an individual or an estate, (iii) certain rental agreements for the use of tangible property, (iv) any obligation to pay rents from real property, (v) any security issued by a state or any political subdivision thereof, foreign government or Puerto Rico only if the determination of any payment under such security is not based on the profits of another entity or payments on any obligation issued by such other entity, or (vi) any security issued by a REIT. The timing and payment of interest or principal on a security qualifying as straight debt may be subject to a contingency provided that (A) such contingency does not change the effective yield to maturity, not considering a de minimis change which does not exceed the greater of ¼ of 1% or 5% of the annual yield to maturity or we own $1,000,000 or less of the aggregate issue price or value of the particular issuer's debt and not more than 12 months of unaccrued interest can be required to be prepaid or (B) the contingency is consistent with commercial practice and the contingency is effective upon a default or the exercise of a prepayment right by the issuer of the debt. If we hold indebtedness from any issuer, including a REIT, the indebtedness will be subject to, and may cause a violation of, the asset tests, unless it is a qualifying real estate asset or otherwise satisfies the above safe harbor. We currently own equity interests in certain entities that have elected to be taxed as REITs for federal income tax purposes and are not publicly traded. If any such entity were to fail to qualify as a REIT, we would not meet the 10% voting stock limitation and the 10% value limitation and we would, unless certain relief provisions applied, fail to qualify as a REIT. We believe that we and each of the REITs we own an interest in have and will comply with the foregoing asset tests for REIT qualification. However, we cannot provide any assurance that the Internal Revenue Service will agree with our determinations.
If we fail to satisfy the 5% or 10% asset tests described above after a 30-day cure period provided in the Internal Revenue Code, we will be deemed to have met such tests if the value of our non-qualifying assets is de minimis (i.e., does not exceed the lesser of 1% of the total value of our assets at the end of the applicable quarter or $10,000,000) and we dispose of the non-qualifying assets within six months after the last day of the quarter in which the failure to satisfy the asset tests is discovered. For violations due to reasonable cause and not willful neglect that are in excess of the de minimis exception described above, we may avoid disqualification as a REIT under any of the asset tests, after the 30-day cure period, by disposing of sufficient assets to meet the asset test within such six month period, paying a tax equal to the greater of $50,000 or the highest corporate tax rate multiplied by the net income generated by the non-qualifying assets and disclosing certain information to the Internal Revenue Service. If we cannot avail ourselves of these relief provisions, or if we fail to timely cure any noncompliance with the asset tests, we would cease to qualify as a REIT.
Annual Distribution Requirements. To qualify as a REIT, we are generally required to distribute dividends, other than capital gain dividends, to our shareholders each year in an amount at least equal to 90% of our REIT taxable income. These distributions must be paid either in the taxable year to which they relate, or in the following taxable year if declared before we timely file our tax return for the prior year and if paid with or before the first regular dividend payment date after the declaration is made. We intend to make timely distributions sufficient to satisfy our annual distribution requirements. To the extent that we do not distribute all of our net capital gain or distribute at least 90%, but less than 100% of our REIT taxable income, as adjusted, we are subject to tax on these amounts at regular corporate rates. We will be subject to a 4% excise tax on the excess of the required distribution over the sum of amounts actually distributed and amounts retained for which federal income tax was paid, if we fail to distribute during each calendar year at least the sum of: (1) 85% of our REIT ordinary income for the year; (2) 95% of our REIT capital gain net income for the year; and (3) any undistributed taxable income from prior taxable years. A REIT may elect to retain rather than distribute all or a portion of its net capital gains and pay the tax on the gains. In that case, a REIT may elect to have its shareholders include their proportionate share of the undistributed net capital gains in income as long-term capital gains and receive a credit for their share of the tax paid by the REIT. For purposes of the 4% excise tax described above, any retained amounts would be treated as having been distributed.

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Ownership of Partnership Interests By Us. As a result of our ownership of the Operating Partnership, we will be considered to own and derive our proportionate share of the assets and items of income of the Operating Partnership, respectively, for purposes of the REIT asset and income tests, including its share of assets and items of income of any subsidiaries that are partnerships or limited liability companies.
State and Local Taxes. We may be subject to state or local taxation in various jurisdictions, including those in which we transact business or reside. Generally REITs have seen increases in state and local taxes in recent years. Our state and local tax treatment may not conform to the federal income tax treatment discussed above. Consequently, prospective shareholders should consult their own tax advisors regarding the effect of state and local tax laws on an investment in common shares.

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Taxation of Domestic Shareholders Subjectdomestic shareholders subject to U.S. Taxtax
General. If we qualify as a REIT, distributions made to our taxable domestic shareholders with respect to their common shares, other than capital gain distributions and distributions attributable to taxable REIT subsidiaries, will be treated as ordinary income to the extent that the distributions come out of earnings and profits. These distributions will not be eligible for the dividends received deduction for shareholders that are corporations nor will they constitute “qualified dividend income” under the Internal Revenue Code, meaning that such dividends will be taxed at marginal rates applicable to ordinary income rather than the special capital gain rates currently applicable to qualified dividend income distributed to shareholders who satisfy applicable holding period requirements. In determining whether distributions are out of earnings and profits, we will allocate our earnings and profits first to preferred shares and second to the common shares. The portion of ordinary dividends which represent ordinary dividends we receive from a TRS, will be designated as “qualified dividend income” to REIT shareholders. These qualified dividends are eligible for preferential tax rates if paid to our non-corporate shareholders.

To the extent we make distributions to our taxable domestic shareholders in excess of our earnings and profits, such distributions will be considered a return of capital. Such distributions will be treated as a tax-free distribution and will reduce the tax basis of a shareholder's common shares by the amount of the distribution so treated. To the extent such distributions cumulatively exceed a taxable domestic shareholder's tax basis, such distributions are taxable as gain from the sale of shares. Shareholders may not include in their individual income tax returns any of our net operating losses or capital losses.

Dividends declared by a REIT in October, November, or December are deemed to have been paid by the REIT and received by its shareholders on December 31 of that year, so long as the dividends are actually paid during January of the following year. However, this treatment only applies to the extent of the REIT's earnings and profits existing on December 31. To the extent the shareholder distribution paid in January exceeds available earnings and profits as of December 31, the excess will be treated as a distribution taxable to shareholders in the year paid. As such, for tax reporting purposes, January distributions paid to our shareholders may be split between two tax years.

Distributions made by us that we properly designate as capital gain dividends will be taxable to taxable domestic shareholders as gain from the sale or exchange of a capital asset held for more than one year. This treatment applies only to the extent that the designated distributions do not exceed our actual net capital gain for the taxable year. It applies regardless of the period for which a domestic shareholder has held his or her common shares. Despite this general rule, corporate shareholders may be required to treat up to 20% of certain capital gain dividends as ordinary income.

Generally, our designated capital gain dividends will be broken out into net capital gains distributions (which are taxable to taxable domestic shareholders that are individuals, estates or trusts at a maximum rate of 20% as of January 1, 2013 for individual taxpayers in the highest tax bracket) and unrecaptured Section 1250 gain distributions (which are taxable to taxable domestic shareholders that are individuals, estates or trusts at a maximum rate of 25%).

Certain U.S. shareholders that are taxed as individuals, estates or trusts may also be required to pay an additional 3.8% tax on, among other things, dividends on and capital gains from the sale or other disposition of shares.

If, for any taxable year, we elect to designate as capital gain dividends any portion of the dividends paid or made available for the year to holders of all classes of shares of beneficial interest, then the portion of the capital gains dividends that will be allocable to the holders of common shares will be the total capital gain dividends multiplied by a fraction. The numerator of the fraction will be the total dividends paid or made available to the holders of the common shares for the year. The denominator of the fraction will be the total dividends paid or made available to holders of all classes of shares of beneficial interest.

We may elect to retain (rather than distribute as is generally required) net capital gain for a taxable year and pay the income tax on that gain. If we make this election, shareholders must include in income, as long-term capital gain, their proportionate

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share of the undistributed net capital gain. Shareholders will be treated as having paid their proportionate share of the tax paid by us on these gains. Accordingly, they will receive a tax credit or refund for the amount. Shareholders will increase the basis in their common shares by the difference between the amount of capital gain included in their income and the amount of the tax they are treated as having paid. Our earnings and profits will be adjusted appropriately.
In general, a shareholder will recognize gain or loss for federal income tax purposes on the sale or other disposition of common shares in an amount equal to the difference between:

(a)the amount of cash and the fair market value of any property received in the sale or other disposition; and
(b)the shareholder's adjusted tax basis in the common shares.
    
The gain or loss will be capital gain or loss if the common shares were held as a capital asset. Generally, the capital gain or loss will be long-term capital gain or loss if the common shares were held for more than one year.

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In general, a loss recognized by a shareholder upon the sale of common shares that were held for six months or less, determined after applying certain holding period rules, will be treated as long-term capital loss to the extent that the shareholder received distributions that were treated as long-term capital gains. For shareholders who are individuals, trusts and estates, the long-term capital loss will be apportioned among the applicable long-term capital gain rates to the extent that distributions received by the shareholder were previously so treated.
Taxation of Domestic Tax-Exempt Shareholdersdomestic tax-exempt shareholders
Most tax-exempt organizations are not subject to federal income tax except to the extent of their unrelated business taxable income, which is often referred to as UBTI. Unless a tax-exempt shareholder holds its common shares as debt financed property or uses the common shares in an unrelated trade or business, distributions to the shareholder should not constitute UBTI. Similarly, if a tax-exempt shareholder sells common shares, the income from the sale should not constitute UBTI unless the shareholder held the shares as debt financed property or used the shares in a trade or business.

However, for tax-exempt shareholders that are social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts, and qualified group legal services plans, income from owning or selling common shares will constitute UBTI unless the organization is able to properly deduct amounts set aside or placed in reserve so as to offset the income generated by its investment in common shares. These shareholders should consult their own tax advisors concerning these set aside and reserve requirements which are set forth in the Internal Revenue Code.

In addition, certain pension trusts that own more than 10% of a “pension-held REIT” must report a portion of the distributions that they receive from the REIT as UBTI. We have not been and do not expect to be treated as a pension-held REIT for purposes of this rule.
Taxation of Foreign Shareholdersforeign shareholders
The following is a discussion of certain anticipated United States federal income tax consequences of the ownership and disposition of common shares applicable to a foreign shareholder. For purposes of this discussion, a “foreign shareholder” is any person other than:

(a)a citizen or resident of the United States;
(b)a corporation or partnership created or organized in the United States or under the laws of the United States or of any state thereof; or
(c)an estate or trust whose income is includable in gross income for United States federal income tax purposes regardless of its source.
Distributions by Us. Distributions by us to a foreign shareholder that are neither attributable to gain from sales or exchanges by us of United States real property interests nor designated by us as capital gains dividends will be treated as dividends of ordinary income to the extent that they are made out of our earnings and profits. These distributions ordinarily will be subject to withholding of United States federal income tax on a gross basis at a 30% rate, or a lower treaty rate, unless the dividends are treated as effectively connected with the conduct by the foreign shareholder of a United States trade or business. Please note that under certain treaties lower withholding rates generally applicable to dividends do not apply to dividends from REITs. Dividends that are effectively connected with a United States trade or business will be subject to tax on a net basis at graduated rates, and are generally not subject to withholding. Certification and disclosure requirements must be satisfied before a dividend is exempt

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from withholding under this exemption. A foreign shareholder that is a corporation also may be subject to an additional branch profits tax at a 30% rate or a lower treaty rate.

We expect to withhold United States income tax at the rate of 30% on any such distributions made to a foreign shareholder unless:

(a)a lower treaty rate applies and any required form or certification evidencing eligibility for that reduced rate is filed with us; or
(b)the foreign shareholder files an IRS Form W-8ECI with us claiming that the distribution is effectively connected income.

If such distribution is in excess of our current or accumulated earnings and profits, it will not be taxable to a foreign shareholder to the extent that the distribution does not exceed the adjusted basis of the shareholder's common shares. Instead, the

29


distribution will reduce the adjusted basis of the common shares. To the extent that the distribution exceeds the adjusted basis of the common shares, it will give rise to gain from the sale or exchange of the shareholder's common shares. The tax treatment of this gain is described below.

We intend to withhold at a rate of 30%, or a lower applicable treaty rate, on the entire amount of any distribution not designated as a capital gain distribution. In such event, a foreign shareholder may seek a refund of the withheld amount from the IRS if it is subsequently determined that the distribution was, in fact, in excess of our earnings and profits, and the amount withheld exceeded the foreign shareholder's United States tax liability with respect to the distribution.

Any capital gain dividend with respect to any class of our stock which is “regularly traded” on an established securities market, will be treated as an ordinary dividend described above, if the foreign shareholder did not own more than 5% of such class of stock at any time during the one year period ending on the date of the distribution. Foreign shareholders generally will not be required to report such distributions received from us on U.S. federal income tax returns and all distributions treated as dividends for U.S. federal income tax purposes, including any capital gain dividends, will be subject to a 30% U.S. withholding tax (unless reduced or eliminated under an applicable income tax treaty), as described above. In addition, the branch profits tax will no longer apply to such distributions.

Distributions to a foreign shareholder that we designate at the time of the distributions as capital gain dividends, other than those arising from the disposition of a United States real property interest, generally will not be subject to United States federal income taxation unless:
(a)the investment in the common shares is effectively connected with the foreign shareholder's United States trade or business, in which case the foreign shareholder will be subject to the same treatment as domestic shareholders, except that a shareholder that is a foreign corporation may also be subject to the branch profits tax, as discussed above; or
(b)the foreign shareholder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and has a “tax home” in the United States, in which case the nonresident alien individual will be subject to a 30% tax on the individual's capital gains.
Under the Foreign Investment in Real Property Tax Act, which is known as FIRPTA, distributions to a foreign shareholder that are attributable to gain from sales or exchanges of United States real property interests will cause the foreign shareholder to be treated as recognizing the gain as income effectively connected with a United States trade or business. This rule applies whether or not a distribution is designated as a capital gain dividend. Accordingly, foreign shareholders generally would be taxed on these distributions at the same rates applicable to U.S. shareholders, subject to a special alternative minimum tax in the case of nonresident alien individuals. In addition, a foreign corporate shareholder might be subject to the branch profits tax discussed above, as well as U.S. federal income tax return filing requirements. We are required to withhold 35% of these distributions. The withheld amount can be credited against the foreign shareholder's United States federal income tax liability.

Although the law is not entirely clear on the matter, it appears that amounts we designate as undistributed capital gains in respect of the common shares held by U.S. shareholders would be treated with respect to foreign shareholders in the same manner as actual distributions of capital gain dividends. Under that approach, foreign shareholders would be able to offset as a credit against their United States federal income tax liability their proportionate share of the tax paid by us on these undistributed capital gains. In addition, if timely requested, foreign shareholders might be able to receive from the IRS a refund to the extent their proportionate share of the tax paid by us were to exceed their actual United States federal income tax liability.

28



Foreign Shareholders' Sales of Common Shares. Gain recognized by a foreign shareholder upon the sale or exchange of common shares generally will not be subject to United States taxation unless the shares constitute a “United States real property interest” within the meaning of FIRPTA. The common shares will not constitute a United States real property interest so long as we are a domestically controlled REIT. A domestically controlled REIT is a REIT in which at all times during a specified testing period less than 50% in value of its stock is held directly or indirectly by foreign shareholders. We believe that we are a domestically controlled REIT. Therefore, we believe that the sale of common shares will not be subject to taxation under FIRPTA. However, because common shares and preferred shares are publicly traded, we cannot guarantee that we will continue to be a domestically controlled REIT. In any event, gain from the sale or exchange of common shares not otherwise subject to FIRPTA will be subject to U.S. tax, if either:

(a)the investment in the common shares is effectively connected with the foreign shareholder's United States trade or business, in which case the foreign shareholder will be subject to the same treatment as domestic shareholders with respect to the gain; or

30


(b)the foreign shareholder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and has a tax home in the United States, in which case the nonresident alien individual will be subject to a 30% tax on the individual's capital gains.
Even if we do not qualify as or cease to be a domestically controlled REIT, gain arising from the sale or exchange by a foreign shareholder of common shares still would not be subject to United States taxation under FIRPTA as a sale of a United States real property interest if:

(a)the class or series of shares being sold is “regularly traded,” as defined by applicable IRS regulations, on an established securities market such as the New York Stock Exchange; and
(b)the selling foreign shareholder owned 5% or less of the value of the outstanding class or series of shares being sold throughout the five-year period ending on the date of the sale or exchange.
    
If gain on the sale or exchange of common shares were subject to taxation under FIRPTA, the foreign shareholder would be subject to regular United States income tax with respect to the gain in the same manner as a taxable U.S. shareholder, subject to any applicable alternative minimum tax, a special alternative minimum tax in the case of nonresident alien individuals and the possible application of the branch profits tax in the case of foreign corporations. The purchaser of the common shares would be required to withhold and remit to the IRS 10% of the purchase price.
    
Information Reporting Requirementreporting requirement and Backup Withholdingbackup withholding

We will report to our domestic shareholders and the Internal Revenue Service the amount of distributions paid during each calendar year and the amount of tax withheld, if any. Under certain circumstances, domestic shareholders may be subject to backup withholding. Backup withholding will apply only if such domestic shareholder fails to furnish certain information to us or the Internal Revenue Service. Backup withholding will not apply with respect to payments made to certain exempt recipients, such as corporations and tax-exempt organizations. Domestic shareholders should consult their own tax advisors regarding their qualification for exemption from backup withholding and the procedure for obtaining such an exemption. Backup withholding is not an additional tax. Rather, the amount of any backup withholding with respect to a payment to a domestic shareholder will be allowed as a credit against such person's United States federal income tax liability and may entitle such person to a refund, provided that the required information is timely furnished to the Internal Revenue Service.

Medicare Tax on Unearned Income

The Health Care and Education Reconciliation Act of 2010 requires certain U.S. shareholders that are taxed as individuals, estates or trusts to pay an additional 3.8% tax on, among other things, dividends on and capital gains from the sale or other disposition of shares for taxable years beginning after December 31, 2012.

Withholding on Foreign Financial Institutionsforeign financial institutions and Non-U.S. Shareholdersnon-U.S. shareholders

The Foreign Account Tax Compliance Act (“FATCA”) is contained in Sections 1471 through 1474 of 2009 maythe Internal Revenue Code (and the Treasury Regulations thereunder) and was originally enacted in 2010 as part of the Hiring Incentives to Restore Employment Act. FATCA will impose a U.S. withholding taxestax at a 30% rate on certain typesdividends paid after June 30, 2014 and on proceeds from the sale of payments madeour shares paid after December 31, 2016 to “foreign financial institutions” (as defined under FATCA) and certain other foreign entities if certain due diligence and disclosure requirements related to U.S. accounts with, or ownership of, such entities are not satisfied or an exemption does not apply. If FATCA withholding is imposed, non-U.S. shareholders. Under this legislation, the failure to comply with additional certification, information reporting and other specified requirements could result inbeneficial owners that are otherwise eligible for an exemption from, or a reduction of, U.S. withholding tax being imposed on payments of dividends and sales proceeds to U.S. shareholders that own their shares through foreign accounts or foreign intermediaries and certain non-U.S. shareholders. The legislation imposes a 30% withholding tax on dividends on, and gross proceeds from the sale or other disposition of, our shares paid to a foreign financial institution or to a foreign non-financial entity, unless (i) the foreign financial institution undertakes certain diligence and reporting obligations or (ii) the foreign non-financial entity either certifies it does not have any substantial U.S. owners or furnishes identifying information regarding each substantial U.S. owner. In addition, if the payee is a foreign financial institution, it generally must enter into an agreement with the U.S. Treasury that requires, among other things, that it undertake to identify accounts held by certain U.S. persons or U.S.-owned foreign entities, annually report certain information about such accounts and withhold 30% on payments to certain other account holders. Proposed Regulations have delayed implementation of these rules with respect to payments such as distributions and sale proceeds would be required to seek a refund from the Internal Revenue Service to obtain the benefit of such exemption or reduction. Any payment made with respectby us that is subject to our capital stock until January 1, 2014, and with respectwithholding under FATCA or otherwise will be net of the amount required to payments such as gross proceeds from sales or exchanges of our capital stock until January 1, 2015.be withheld.

Item 1B. Unresolved Staff Comments

None.



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Item 2. Properties
As of December 31, 20122014, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 403391 properties located in 1312 states and the District of Columbia consisting of 115,370109,225 apartment units. The Company’s properties are summarized by building type in the following table:
Type Properties Apartment Units 
Average
Apartment Units
 Properties Apartment Units 
Average
Apartment Units
Garden 279
 80,288
 288
 207
 57,140
 276
Mid/High-Rise 122
 30,043
 246
 182
 47,052
 259
Military Housing 2
 5,039
 2,520
 2
 5,033
 2,517
Total 403
 115,370
  
 391
 109,225
  
The Company’s properties are summarized by ownership type in the following table:
 Properties Apartment Units Properties Apartment Units
Wholly Owned Properties 382
 106,856
 364
 98,287
Master-Leased Properties – Consolidated 3
 853
Partially Owned Properties – Consolidated 19
 3,475
 19
 3,771
Partially Owned Properties – Unconsolidated 3
 1,281
Military Housing 2
 5,039
 2
 5,033
 403
 115,370
 391
 109,225
The following table sets forth certain information by market relating to the Company’sCompany's properties at December 31, 2012:2014:

PORTFOLIO SUMMARY

  Markets Properties Apartment Units 
% of Total
Apartment Units
 
% of
Stabilized
NOI (1)
 
Average
Rental
Rate (2)
1
 New York Metro Area 30
 8,047
 7.0% 13.9% $3,433
2
 DC Northern Virginia 27
 9,569
 8.3% 11.5% 2,136
3
 Los Angeles 48
 9,815
 8.5% 9.9% 1,879
4
 South Florida 36
 12,253
 10.6% 9.0% 1,463
5
 San Francisco Bay Area 40
 9,094
 7.9% 8.6% 1,902
6
 Boston 26
 5,832
 5.0% 8.2% 2,560
7
 Seattle/Tacoma 40
 9,029
 7.8% 7.0% 1,520
8
 Denver 24
 8,144
 7.1% 5.5% 1,226
9
 San Diego 14
 4,963
 4.3% 5.0% 1,851
10
 Suburban Maryland 16
 4,856
 4.2% 4.4% 1,711
11
 Orlando 21
 6,413
 5.6% 3.5% 1,086
12
 Phoenix 25
 7,400
 6.4% 3.4% 946
13
 Orange County, CA 11
 3,490
 3.0% 3.3% 1,660
14
 Inland Empire, CA 10
 3,081
 2.7% 2.4% 1,491
15
 Atlanta 12
 3,616
 3.1% 2.0% 1,157
16
 All Other Markets (3) 21
 4,729
 4.1% 2.4% 1,098
  Total 401
 110,331
 95.6% 100.0% 1,737
  Military Housing 2
 5,039
 4.4% 
 
  Grand Total 403
 115,370
 100.0% 100.0% $1,737
Markets/Metro Areas Properties Apartment Units 
% of
Stabilized
NOI (1)
 
Average
Rental
Rate (2)
Core:        
Washington DC 57
 18,652
 17.5% $2,196
New York 38
 10,330
 16.3% 3,863
San Francisco 51
 13,208
 14.3% 2,403
Los Angeles 61
 13,403
 13.0% 2,208
Boston 34
 7,816
 10.1% 2,889
South Florida 35
 11,434
 7.4% 1,629
Seattle 43
 8,542
 7.2% 1,896
Denver 19
 6,935
 4.7% 1,438
San Diego 13
 3,505
 3.1% 1,982
Orange County, CA 11
 3,490
 2.9% 1,790
Subtotal – Core 362
 97,315
 96.5% 2,291
Non-Core:        
Inland Empire, CA 10
 3,081
 2.1% 1,570
Orlando 3
 827
 0.4% 1,218
All Other Markets 14
 2,969
 1.0% 1,178
Subtotal – Non-Core 27
 6,877
 3.5% 1,357
Total 389
 104,192
 100.0% 2,229
Military Housing 2
 5,033
 
 
Grand Total 391
 109,225
 100.0% $2,229

(1)% of Stabilized NOI includes budgeted 20132015 NOI for stabilized properties that are stabilized and projected annual NOI at stabilization (defined as having achieved 90% occupancy for three consecutive months) for properties that are in lease-up.
(2)
Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the last month of December 2012.
(3)All Other Markets – Each individual market is less than 1.5% of stabilized NOI.the period presented.
Note: Projects under development are not included in the Portfolio Summary until construction has been completed.

30

Table of Contents


The Company’s properties had an average occupancy of approximately 94.3% (95.0%95.1% (95.7% on a same store basis) at

32


December 31, 20122014. Certain of the Company’s properties are encumbered by mortgages and additional detail can be found on Schedule III – Real Estate and Accumulated Depreciation. Resident leases are generally for twelve months in length and can 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 includesuch as a clubhouse and swimming pool, laundry facilities and cable television access.pool. Certain of these properties offer additional amenities such as saunas, whirlpools, spas, sports courts and exercise rooms or other amenities. In addition, many of our urban properties have parking garage and/or retail components. The military housing properties are defined as those properties located on military bases.
The distribution of the properties throughout the United States reflects the Company’s belief that geographic diversification helps insulate the portfolio from regional influences. At the same time, the Company has sought to create clusters of properties within each of its primarycore markets in order to achieve economies of scale in management and operation. The Company may nevertheless acquire additional multifamily properties located anywhere in the United States and internationally.
The properties currently in various stages of development and lease-up at December 31, 20122014 are included in the following table:tables:
Consolidated Development and Lease-Up Projects as of December 31, 2014
(Amounts in thousands except for project and apartment unit amounts)
ProjectsLocation 
No. of
Apartment
Units
 
Total
Capital
Cost (1)
 
Total
Book Value
to Date
 
Total Book
Value Not
Placed in
Service
 
Total
Debt
 
Percentage
Completed
 
Percentage
Leased
 
Percentage
Occupied
 
Estimated
Completion
Date
 
Estimated
Stabilization
Date
                       
Projects Under Development - Wholly Owned:                     
Residences at Westgate II (formerly Westgate III) Pasadena, CA 88
 $55,037
 $45,661
 $45,661
 $
 86% 
 
 Q1 2015 Q3 2015
170 Amsterdam (2) New York, NY 236
 110,892
 97,372
 97,372
 
 88% 
 
 Q1 2015 Q1 2016
Parc on Powell (formerly 1333 Powell) (3) Emeryville, CA 176
 87,500
 71,765
 71,765
 
 85% 13% 
 Q2 2015 Q4 2015
Azure (at Mission Bay) San Francisco, CA 273
 189,090
 146,609
 146,609
 
 75% 
 
 Q3 2015 Q4 2016
Junction 47 (formerly West Seattle) Seattle, WA 206
 67,112
 44,514
 44,514
 
 62% 
 
 Q4 2015 Q3 2016
Tallman Seattle, WA 303
 84,277
 55,794
 55,794
 
 62% 
 
 Q4 2015 Q2 2017
Village at Howard Hughes Los Angeles, CA 545
 193,231
 86,642
 86,642
 
 26% 
 
 Q2 2016 Q2 2017
Potrero San Francisco, CA 453
 224,474
 72,354
 72,354
 
 14% 
 
 Q2 2016 Q3 2017
Millikan Irvine, CA 344
 102,331
 41,367
 41,367
 
 13% 
 
 Q2 2016 Q3 2017
Tasman San Jose, CA 554
 214,923
 119,554
 119,554
 
 46% 
 
 Q2 2016 Q2 2018
340 Fremont (formerly Rincon Hill) San Francisco, CA 348
 287,454
 106,972
 106,972
 
 24% 
 
 Q3 2016 Q1 2018
One Henry Adams San Francisco, CA 241
 164,434
 39,923
 39,923
 
 1% 
 
 Q4 2016 Q4 2017
Cascade Seattle, WA 483
 158,494
 34,543
 34,543
 
 1% 
 
 Q2 2017 Q1 2019
2nd & Pine (4) Seattle, WA 398
 214,742
 40,122
 40,122
 
 4% 
 
 Q3 2017 Q2 2019
Projects Under Development - Wholly Owned   4,648
 2,153,991
 1,003,192
 1,003,192
 
          
Projects Under Development - Partially Owned:                     
Prism at Park Avenue South (5) New York, NY 269
 251,961
 226,959
 226,959
 
 91% 5% 3% Q2 2015 Q1 2016
Projects Under Development - Partially Owned   269
 251,961
 226,959
 226,959
 
          
                       
Projects Under Development  4,917
 2,405,952
 1,230,151
 1,230,151
 
          
Completed Not Stabilized - Wholly Owned (6):                     
Jia (formerly Chinatown Gateway) Los Angeles, CA 280
 92,920
 89,611
 
 
   98% 97% Completed Q1 2015
1111 Belle Pre (formerly The Madison) Alexandria, VA 360
 112,072
 111,433
 
 
   97% 96% Completed Q1 2015
Park Aire (formerly Enclave at Wellington) Wellington, FL 268
 49,000
 48,917
 
 
   95% 93% Completed Q1 2015
Urbana (formerly Market Street Landing) Seattle, WA 287
 88,774
 86,789
 
 
   90% 86% Completed Q2 2015
Residences at Westgate I (formerly Westgate II) Pasadena, CA 252
 127,292
 124,606
 
 
   68% 67% Completed Q2 2015
Projects Completed Not Stabilized - Wholly Owned   1,447
 470,058
 461,356
 
 
          
                       
Projects Completed Not Stabilized  1,447
 470,058
 461,356
 
 
          
Completed and Stabilized During the Quarter - Wholly Owned:                    
Elevé (7) Glendale, CA 208
 70,500
 70,500
 
 
   99% 96% Completed Stabilized
Reserve at Town Center III Mill Creek, WA 95
 21,280
 21,264
 
 
   95% 94% Completed Stabilized
Projects Completed and Stabilized During the Quarter - Wholly Owned 303
 91,780
 91,764
 
 
          
                       
Projects Completed and Stabilized During the Quarter  303
 91,780
 91,764
 
 
          
                       
Total Consolidated Projects  6,667
 $2,967,790
 $1,783,271
 $1,230,151
 $
          
                       
Land Held for Development  N/A N/A $184,556
 $184,556
 $
          

(1)Total capital cost represents estimated cost for projects under development and/or developed and all capitalized costs incurred to date plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP.

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(2)170 Amsterdam – The land under this project is subject to a long term ground lease.
(3)Parc on Powell – During the fourth quarter of 2014, the Company acquired its partner's 95% interest in this unconsolidated development project which was valued at $87.5 million  In conjunction with the buyout, the outstanding construction loan of $27.2 million was paid off. The project is now wholly-owned.
(4)2nd & Pine – Includes an adjacent land parcel on which certain improvements including a portion of a parking structure will be constructed as part of the development of this project. The Company may eventually construct an additional apartment tower on this site or sell a portion of the garage and the related air rights.
(5)Prism at Park Avenue South – The Company is jointly developing with Toll Brothers (NYSE: TOL) a project at 400 Park Avenue South in New York City with the Company's rental portion on floors 2-22 and Toll's for sale portion on floors 23-40.The total capital cost and total book value to date represent only the Company's portion of the project. Toll Brothers has funded $113.8 million for their allocated share of the project.
(6)Properties included here are substantially complete. However, they may still require additional exterior and interior work for all apartment units to be available for leasing.
(7)Elevé – The Company acquired this project during the second quarter of 2014, prior to stabilization, and has completed lease-up activities.

Development and Lease-Up Projects as of December 31, 2012
(Amounts in thousands except for project and apartment unit amounts)
                        
Projects Location No. of
Apartment
Units
 Total
Capital
Cost (1)
 Total
Book Value
to Date
 Total Book
Value Not
Placed in
Service
 Total
Debt
 Percentage
Completed
 Percentage
Leased
 Percentage
Occupied
 Estimated
Completion
Date
 Estimated
Stabilization
Date
                        
Consolidated                      
                        
Projects Under Development - Wholly Owned:                      
Jia (formerly Chinatown Gateway) Los Angeles, CA 280
 $92,920
 $52,995
 $52,995
 $
 47%   Q3 2013 Q2 2015
Westgate II Pasadena, CA 252
 125,293
 61,947
 61,947
 
 25%   Q1 2014 Q1 2015
1111 Belle Pre (formerly The Madison) Alexandria, VA 360
 115,072
 56,815
 56,815
 
 42%   Q1 2014 Q2 2015
Market Street Landing Seattle, WA 287
 90,024
 38,320
 38,320
 
 35%   Q1 2014 Q3 2015
Westgate III Pasadena, CA 88
 54,037
 20,853
 20,853
 
 2%   Q2 2014 Q1 2015
Projects Under Development - Wholly Owned   1,267
 477,346
 230,930
 230,930
 
          
                        
Projects Under Development - Partially Owned:                      
400 Park Avenue South (2) New York, NY 269
 251,961
 92,374
 92,374
 
 12%   Q2 2015 Q1 2016
Projects Under Development - Partially Owned   269
 251,961
 92,374
 92,374
 
          
                        
Projects Under Development   1,536
 729,307
 323,304
 323,304
 
          
                        
Completed Not Stabilized - Wholly Owned (3):                      
The Savoy at Dayton Station III (formerly Savoy III) Aurora, CO 168
 22,356
 21,460
 
 
   93% 91% Completed Q1 2013
2201 Pershing Drive Arlington, VA 188
 63,242
 56,087
 
 
   72% 67% Completed Q3 2013
Projects Completed Not Stabilized - Wholly Owned   356
 85,598
 77,547
 
 
          
                        
Projects Completed Not Stabilized   356
 85,598
 77,547
 
 
          
                        
Completed and Stabilized During the Quarter - Wholly Owned:                    
Ten23 (formerly 500 West 23rd Street) (4) New York, NY 111
 55,113
 55,095
 
 
   97% 97% Completed Stabilized
Projects Completed and Stabilized During the Quarter - Wholly Owned 111
 55,113
 55,095
 
 
          
                        
Projects Completed and Stabilized During the Quarter   111
 55,113
 55,095
 
 
          
                        
Total Consolidated Projects   2,003
 $870,018
 $455,946
 $323,304
 $
          
                        
Land Held for Development   N/A N/A $353,823
 $353,823
 $
          
                        
Unconsolidated                      
                        
Projects Under Development - Unconsolidated:                      
Nexus Sawgrass (formerly Sunrise Village) (5) Sunrise, FL 501
 $78,212
 $61,901
 $61,901
 $29,769
 80% 9% 2% Q3 2013 Q3 2014
Domain (5) San Jose, CA 444
 154,570
 109,141
 109,141
 46,865
 67%   Q4 2013 Q4 2015
Projects Under Development - Unconsolidated   945
 232,782
 171,042
 171,042
 76,634
          
                        
Projects Under Development   945
 232,782
 171,042
 171,042
 76,634
          
                        
Total Unconsolidated Projects   945
 $232,782
 $171,042
 $171,042
 $76,634
          
Unconsolidated Development and Lease-Up Projects as of December 31, 2014
(Amounts in thousands except for project and apartment unit amounts)
                          
Projects Location Percentage Ownership No. of
Apartment
Units
 Total
Capital
Cost (1)
 Total
Book Value
to Date
 Total Book
Value Not
Placed in
Service
 Total
Debt
 Percentage
Completed
 Percentage
Leased
 Percentage
Occupied
 Estimated
Completion
Date
 Estimated
Stabilization
Date
                          
Completed Not Stabilized - Unconsolidated (2):                      
Domain (3) San Jose, CA 20.0% 444
 $155,820
 $155,274
 $
 $96,793
   93% 91% Completed Q1 2015
Projects Completed Not Stabilized - Unconsolidated 444
 155,820
 155,274
 
 96,793
          
                         
Projects Completed Not Stabilized   444
 155,820
 155,274
 
 96,793
          
                          
Total Unconsolidated Projects   444
 $155,820
 $155,274
 $
 $96,793
          

(1)Total capital cost represents estimated cost for projects under development and/or developed and all capitalized costs incurred to date plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP.
(2)The Company is jointly developing with Toll Brothers (NYSE: TOL) a vacant land parcel at 400 Park Avenue South in New York City with the Company's rental portion on floors 2-22 and Toll's for sale portion on floors 23-40. The total capital cost and total book value to date represent only the Company's portion of the project. Toll Brothers has funded $64.4 million for their allocated share of the project.
(3)Properties included here are substantially complete. However, they may still require additional exterior and interior work for all apartment units to be available for leasing.
(4)(3)Ten23 - The land under thisDomain – This development project is subject to a long term ground lease.
(5)These development projects are owned 20% by the Company and 80% by an institutional partner in two separatean unconsolidated joint ventures.venture. Total project costs arecost is approximately $232.8$155.8 million and construction will bewas predominantly funded with two separatea long-term, non-recourse secured loansloan from the partner. The Company iswas responsible for constructing the projectsproject and hashad given certain construction cost overrun guarantees but currently has no further funding obligations. Nexus Sawgrass has a maximum debt commitment of $48.7 million and a current unconsolidated outstanding balance of $29.8 million; the loan bears interest at 5.60% and matures January 1, 2021. Domain has a maximum debt commitment of $98.6 million, and a current unconsolidated outstanding balance of $46.9 million; the loan bears interest at 5.75% and matures January 1, 2022.

Item 3. Legal Proceedings
The Company is party to a housing discrimination lawsuit brought by a non-profit civil rights organization in April 2006

34


in the U.S. District Court for the District of Maryland. The suit alleges that the Company designed and built approximately 300 of its properties in violation of the accessibility requirements of the Fair Housing Act and Americans With Disabilities Act. The suit seeks actual and punitive damages, injunctive relief (including modification of non-compliant properties), costs and attorneys’ fees. The Company believes it has a number of viable defenses, including that a majority of the named properties were completed before the operative dates of the statutes in question and/or were not designed or built by the Company. Accordingly, the Company is defending the suit vigorously. Due to the pendency of the Company’s defenses and the uncertainty of many other critical factual and legal issues, it is not possible to determine or predict the outcome of the suit or a possible loss or a range of loss, and no amounts have been accrued at December 31, 20122014. While no assurances can be given, the Company does not believe that the suit, if adversely determined, would have a material adverse effect on the Company.
The Company does not believe there is any other litigation pending or threatened against it that, individually or in the aggregate, may reasonably be expected to have a material adverse effect on the Company.

Item 4. Mine Safety Disclosures

Not applicable.


3532



PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Common Share Market Prices and Dividends (Equity Residential)
The following table sets forth, for the years indicated, the high, low and closing sales prices for and the distributions declared on the Company’s Common Shares, which trade on the New York Stock Exchange under the trading symbol EQR.

  Sales Price  
  High Low Closing Distributions
2012  
  
  
  
Fourth Quarter Ended December 31, 2012 $59.61
 $53.25
 $56.67
 $0.7675
Third Quarter Ended September 30, 2012 $65.72
 $56.76
 $57.53
 $0.3375
Second Quarter Ended June 30, 2012 $63.84
 $58.67
 $62.36
 $0.3375
First Quarter Ended March 31, 2012 $62.79
 $53.56
 $62.62
 $0.3375
         
2011  
  
  
  
Fourth Quarter Ended December 31, 2011 $60.32
 $48.46
 $57.03
 $0.5675
Third Quarter Ended September 30, 2011 $63.86
 $50.38
 $51.87
 $0.3375
Second Quarter Ended June 30, 2011 $61.86
 $55.31
 $60.00
 $0.3375
First Quarter Ended March 31, 2011 $56.43
 $49.60
 $56.41
 $0.3375
  Sales Price  
  High Low Closing Distributions
2014  
  
  
  
Fourth Quarter Ended December 31, 2014 $74.72
 $61.47
 $71.84
 $0.5000
Third Quarter Ended September 30, 2014 $67.91
 $60.44
 $61.58
 $0.5000
Second Quarter Ended June 30, 2014 $63.54
 $57.19
 $63.00
 $0.5000
First Quarter Ended March 31, 2014 $59.41
 $51.55
 $57.99
 $0.5000
         
2013  
  
  
  
Fourth Quarter Ended December 31, 2013 $56.06
 $50.08
 $51.87
 $0.6500
Third Quarter Ended September 30, 2013 $59.40
 $50.24
 $53.57
 $0.4000
Second Quarter Ended June 30, 2013 $60.97
 $52.71
 $58.06
 $0.4000
First Quarter Ended March 31, 2013 $58.81
 $53.64
 $55.06
 $0.4000

The number of record holders of Common Shares at February 15, 201320, 2015 was approximately 3,000.2,700. The number of outstanding Common Shares as of February 15, 201320, 2015 was 325,462,816.363,798,297.
OP Unit Dividends (ERP Operating Limited Partnership)
There is no established public market for the OP Units.Units (OP Units and restricted units).
The following table sets forth, for the years indicated, the distributions on the Operating Partnership's OP Units.
 Distributions Distributions
 2012 2011 2014 2013
Fourth Quarter Ended December 31, $0.7675
 $0.5675
 $0.5000
 $0.6500
Third Quarter Ended September 30, $0.3375
 $0.3375
 $0.5000
 $0.4000
Second Quarter Ended June 30, $0.3375
 $0.3375
 $0.5000
 $0.4000
First Quarter Ended March 31, $0.3375
 $0.3375
 $0.5000
 $0.4000
The number of record holders of OP Units in the Operating Partnership at February 15, 201320, 2015 was 501.approximately 500. The number of outstanding OP Units as of February 15, 201320, 2015 was 339,571,824.378,285,425.
Unregistered Common Shares Issued in the Quarter Ended December 31, 20122014 (Equity Residential)
During the quarter ended December 31, 20122014, EQR issued 431,03226,375 Common Shares in exchange for 431,03226,375 OP Units held by various limited partners of the Operating Partnership. OP Units are generally exchangeable into Common Shares on a one-for-one basis or, at the option of the Operating Partnership, the cash equivalent thereof, at any time one year after the date of issuance. These shares were either registered under the Securities Act of 1933, as amended (the “Securities Act”), or issued in reliance on an exemption from registration under Section 4(2) of the Securities Act and the rules and regulations promulgated thereunder, as these were transactions by an issuer not involving a public offering. In light of the manner of the sale and information obtained by EQR from the limited partners in connection with these transactions, EQR believes it may rely on these exemptions.

3633



Equity Compensation Plan Information
The following table provides information as of December 31, 20122014 with respect to the Company's Common Shares that may be issued under its existing equity compensation plans.

 
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
in column (a))
 
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
in column (a))
Plan Category  
 (a) (1) (b) (1) (c) (2) (a) (1) (b) (1) (c) (2)
Equity compensation plans
approved by shareholders
 8,115,255 $41.31 14,278,690 7,030,620 $46.16 11,555,468
Equity compensation plans not
approved by shareholders
 N/A N/A N/A N/A N/A N/A

(1)
The amounts shown in columns (a) and (b) of the above table do not include 524,953482,466 outstanding Common Shares (all of which are restricted and subject to vesting requirements) that were granted under the Company's Amended and Restated 1993 Share Option and Share Award Plan, as amended (the "1993 Plan"), the Company's 2002 Share Incentive Plan, as restated (the “2002 Plan”) and the Company's 2011 Share Incentive Plan, as amended (the "2011 Plan") and outstanding Common Shares that have been purchased by employees and trustees under the Company's ESPP.
(2)Includes 11,097,8818,516,934 Common Shares that may be issued under the 2011 Plan, of which only 33% may be in the form of restricted shares, and 3,180,8093,038,534 Common Shares that may be sold to employees and trustees under the ESPP.

On June 16, 2011, the shareholders of EQR approved the Company's 2011 Plan and the Company filed a Form S-8 registration statement to register 12,980,741 Common Shares under this plan. As of December 31, 2012, 11,097,881 shares were available for future issuance. In conjunction with the approval of the 2011 Plan, no further awards may be granted under the 2002 Plan. The 2011 Plan expires on June 16, 2021.

Any Common Shares issued pursuant to EQR's incentive equity compensation and employee share purchase plans will result in ERPOP issuing OP Units to EQR on a one-for-one basis, with ERPOP receiving the net cash proceeds of such issuances.

Item 6.Selected Financial Data
The following tables set forth selected financial and operating information on a historical basis for the Company and 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 Company and the Operating Partnership. All amounts have also been restated in accordance with the guidance on discontinued operations. Certain capitalized terms as used herein are defined in the Notes to Consolidated Financial Statements.

3734



Equity Residential
EQUITY RESIDENTIALEQUITY RESIDENTIAL
CONSOLIDATED HISTORICAL FINANCIAL INFORMATION(Financial information in thousands except for per share and property data)
            
 Year Ended December 31, Year Ended December 31,
 2012 2011 2010 2009 2008 2014 2013 2012 2011 2010
OPERATING DATA:  
  
  
  
  
  
  
  
  
  
Total revenues from continuing operations $2,123,715
 $1,883,491
 $1,674,709
 $1,548,264
 $1,543,817
 $2,614,748
 $2,387,702
 $1,747,502
 $1,525,220
 $1,334,418
Interest and other income $150,547
 $7,965
 $5,118
 $16,520
 $33,192
 $4,462
 $5,283
 $151,060
 $8,413
 $4,877
Net gain on sales of real estate properties $212,685
 $
 $
 $
 $
Income (loss) from continuing operations $311,555
 $57,794
 $(103,108) $(80,394) $(132,946) $657,101
 $(168,174) $160,298
 $(72,941) $(204,152)
Discontinued operations, net $569,649
 $877,403
 $399,091
 $462,423
 $569,359
 $1,582
 $2,073,527
 $720,906
 $1,008,138
 $500,135
Net income $881,204
 $935,197
 $295,983
 $382,029
 $436,413
 $658,683
 $1,905,353
 $881,204
 $935,197
 $295,983
Net income available to Common Shares $826,212
 $879,720
 $269,242
 $347,794
 $393,115
 $627,163
 $1,826,468
 $826,212
 $879,720
 $269,242
Earnings per share – basic:  
  
  
  
  
  
  
  
  
  
Income (loss) from continuing operations
available to Common Shares
 $0.93
 $0.14
 $(0.39) $(0.33) $(0.52) $1.73
 $(0.47) $0.45
 $(0.28) $(0.73)
Net income available to Common Shares $2.73
 $2.98
 $0.95
 $1.27
 $1.46
 $1.74
 $5.16
 $2.73
 $2.98
 $0.95
Weighted average Common Shares outstanding 302,701
 294,856
 282,888
 273,609
 270,012
 361,181
 354,305
 302,701
 294,856
 282,888
Earnings per share – diluted:  
  
  
  
  
  
  
  
  
  
Income (loss) from continuing operations
available to Common Shares
 $0.92
 $0.14
 $(0.39) $(0.33) $(0.52) $1.72
 $(0.47) $0.45
 $(0.28) $(0.73)
Net income available to Common Shares $2.70
 $2.95
 $0.95
 $1.27
 $1.46
 $1.73
 $5.16
 $2.70
 $2.98
 $0.95
Weighted average Common Shares outstanding 319,766
 312,065
 282,888
 273,609
 270,012
 377,735
 354,305
 319,766
 294,856
 282,888
Distributions declared per Common Share
outstanding
 $1.78
 $1.58
 $1.47
 $1.64
 $1.93
 $2.00
 $1.85
 $1.78
 $1.58
 $1.47
BALANCE SHEET DATA (at end of period):
  
  
  
  
  
  
  
  
  
  
Real estate, before accumulated depreciation $21,008,429
 $20,407,946
 $19,702,371
 $18,465,144
 $18,690,239
 $27,675,383
 $26,800,948
 $21,008,429
 $20,407,946
 $19,702,371
Real estate, after accumulated depreciation $16,096,208
 $15,868,363
 $15,365,014
 $14,587,580
 $15,128,939
 $22,242,578
 $21,993,239
 $16,096,208
 $15,868,363
 $15,365,014
Total assets $17,201,000
 $16,659,303
 $16,184,194
 $15,417,515
 $16,535,110
 $22,950,614
 $22,834,545
 $17,201,000
 $16,659,303
 $16,184,194
Total debt $8,529,244
 $9,721,061
 $9,948,076
 $9,392,570
 $10,483,942
 $10,844,861
 $10,766,254
 $8,529,244
 $9,721,061
 $9,948,076
Redeemable Noncontrolling Interests –
Operating Partnership
 $398,372
 $416,404
 $383,540
 $258,280
 $264,394
 $500,733
 $363,144
 $398,372
 $416,404
 $383,540
Total shareholders’ equity $7,289,813
 $5,669,015
 $5,090,186
 $5,047,339
 $4,905,356
 $10,368,456
 $10,507,201
 $7,289,813
 $5,669,015
 $5,090,186
Total Noncontrolling Interests $237,294
 $193,842
 $118,390
 $127,174
 $163,349
 $339,320
 $337,995
 $237,294
 $193,842
 $118,390
OTHER DATA:  
  
  
  
  
  
  
  
  
  
Total properties (at end of period) 403
 427
 451
 495
 548
 391
 390
 403
 427
 451
Total apartment units (at end of period) 115,370
 121,974
 129,604
 137,007
 147,244
 109,225
 109,855
 115,370
 121,974
 129,604
Funds from operations available to Common
Shares and Units – basic (1) (3) (4)
 $993,217
 $752,153
 $622,786
 $615,505
 $618,372
 $1,190,915
 $872,421
 $993,217
 $752,153
 $622,786
Normalized funds from operations available to
Common Shares and Units – basic (2) (3) (4)
 $883,269
 $759,665
 $682,422
 $661,542
 $735,062
 $1,196,446
 $1,057,073
 $883,269
 $759,665
 $682,422
Cash flow provided by (used for):  
  
  
  
  
  
  
  
  
  
Operating activities $1,046,251
 $798,334
 $726,037
 $670,812
 $755,027
 $1,324,073
 $868,916
 $1,046,155
 $800,467
 $726,037
Investing activities $(261,049) $(194,828) $(639,458) $105,229
 $(343,803) $(644,666) $(6,977) $(261,155) $(197,208) $(639,458)
Financing activities $(556,533) $(650,993) $151,541
 $(1,473,547) $428,739
 $(692,861) $(1,420,995) $(556,331) $(650,746) $151,541

3835



ERP Operating Limited Partnership
ERP OPERATING LIMITED PARTNERSHIPERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED HISTORICAL FINANCIAL INFORMATION(Financial information in thousands except for per Unit and property data)
                    
 Year Ended December 31, Year Ended December 31,
 2012 2011 2010 2009 2008 2014 2013 2012 2011 2010
OPERATING DATA:  
  
  
  
  
  
  
  
  
  
Total revenues from continuing operations $2,123,715
 $1,883,491
 $1,674,709
 $1,548,264
 $1,543,817
 $2,614,748
 $2,387,702
 $1,747,502
 $1,525,220
 $1,334,418
Interest and other income $150,547
 $7,965
 $5,118
 $16,520
 $33,192
 $4,462
 $5,283
 $151,060
 $8,413
 $4,877
Net gain on sales of real estate properties $212,685
 $
 $
 $
 $
Income (loss) from continuing operations $311,555
 $57,794
 $(103,108) $(80,394) $(132,946) $657,101
 $(168,174) $160,298
 $(72,941) $(204,152)
Discontinued operations, net $569,649
 $877,403
 $399,091
 $462,423
 $569,359
 $1,582
 $2,073,527
 $720,906
 $1,008,138
 $500,135
Net income $881,204
 $935,197
 $295,983
 $382,029
 $436,413
 $658,683
 $1,905,353
 $881,204
 $935,197
 $295,983
Net income available to Units $864,853
 $920,500
 $282,341
 $368,099
 $419,241
 $651,994
 $1,901,746
 $864,853
 $920,500
 $282,341
Earnings per Unit – basic:  
  
  
  
  
  
  
  
  
  
Income (loss) from continuing operations
available to Units
 $0.93
 $0.14
 $(0.39) $(0.33) $(0.52) $1.73
 $(0.47) $0.45
 $(0.28) $(0.73)
Net income available to Units $2.73
 $2.98
 $0.95
 $1.27
 $1.46
 $1.74
 $5.16
 $2.73
 $2.98
 $0.95
Weighted average Units outstanding 316,554
 308,062
 296,527
 289,167
 287,631
 374,899
 368,038
 316,554
 308,062
 296,527
Earnings per Unit – diluted:  
  
  
  
  
  
  
  
  
  
Income (loss) from continuing operations
available to Units
 $0.92
 $0.14
 $(0.39) $(0.33) $(0.52) $1.72
 $(0.47) $0.45
 $(0.28) $(0.73)
Net income available to Units $2.70
 $2.95
 $0.95
 $1.27
 $1.46
 $1.73
 $5.16
 $2.70
 $2.98
 $0.95
Weighted average Units outstanding 319,766
 312,065
 296,527
 289,167
 287,631
 377,735
 368,038
 319,766
 308,062
 296,527
Distributions declared per Unit outstanding $1.78
 $1.58
 $1.47
 $1.64
 $1.93
 $2.00
 $1.85
 $1.78
 $1.58
 $1.47
BALANCE SHEET DATA (at end of period):
  
  
  
  
  
  
  
  
  
  
Real estate, before accumulated depreciation $21,008,429
 $20,407,946
 $19,702,371
 $18,465,144
 $18,690,239
 $27,675,383
 $26,800,948
 $21,008,429
 $20,407,946
 $19,702,371
Real estate, after accumulated depreciation $16,096,208
 $15,868,363
 $15,365,014
 $14,587,580
 $15,128,939
 $22,242,578
 $21,993,239
 $16,096,208
 $15,868,363
 $15,365,014
Total assets $17,201,000
 $16,659,303
 $16,184,194
 $15,417,515
 $16,535,110
 $22,950,614
 $22,834,545
 $17,201,000
 $16,659,303
 $16,184,194
Total debt $8,529,244
 $9,721,061
 $9,948,076
 $9,392,570
 $10,483,942
 $10,844,861
 $10,766,254
 $8,529,244
 $9,721,061
 $9,948,076
Redeemable Limited Partners $398,372
 $416,404
 $383,540
 $258,280
 $264,394
 $500,733
 $363,144
 $398,372
 $416,404
 $383,540
Total partners' capital $7,449,419
 $5,788,551
 $5,200,585
 $5,163,459
 $5,043,185
 $10,582,867
 $10,718,613
 $7,449,419
 $5,788,551
 $5,200,585
Noncontrolling Interests – Partially Owned
Properties
 $77,688
 $74,306
 $7,991
 $11,054
 $25,520
 $124,909
 $126,583
 $77,688
 $74,306
 $7,991
OTHER DATA:  
  
  
  
  
  
  
  
  
  
Total properties (at end of period) 403
 427
 451
 495
 548
 391
 390
 403
 427
 451
Total apartment units (at end of period) 115,370
 121,974
 129,604
 137,007
 147,244
 109,225
 109,855
 115,370
 121,974
 129,604
Funds from operations available to Units –
basic (1) (3) (4)
 $993,217
 $752,153
 $622,786
 $615,505
 $618,372
 $1,190,915
 $872,421
 $993,217
 $752,153
 $622,786
Normalized funds from operations available to
Units – basic (2) (3) (4)
 $883,269
 $759,665
 $682,422
 $661,542
 $735,062
 $1,196,446
 $1,057,073
 $883,269
 $759,665
 $682,422
Cash flow provided by (used for):  
  
  
  
  
  
  
  
  
  
Operating activities $1,046,251
 $798,334
 $726,037
 $670,812
 $755,027
 $1,324,073
 $868,916
 $1,046,155
 $800,467
 $726,037
Investing activities $(261,049) $(194,828) $(639,458) $105,229
 $(343,803) $(644,666) $(6,977) $(261,155) $(197,208) $(639,458)
Financing activities $(556,533) $(650,993) $151,541
 $(1,473,547) $428,739
 $(692,861) $(1,420,995) $(556,331) $(650,746) $151,541

(1)The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (“FFO”) (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales and impairment write-downs of depreciable operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Company commences the conversion of apartment units to condominiums, it simultaneously discontinues depreciation of such property.

3936



or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Company commences the conversion of apartment units to condominiums, it simultaneously discontinues depreciation of such property.
(2)Normalized funds from operations (“Normalized FFO”) begins with FFO and excludes:
the impact of any expenses relating to non-operating asset impairment and valuation allowances;
property acquisition and other transaction costs related to mergers and acquisitions and pursuit cost write-offs (other expenses);write-offs;
gains and losses from early debt extinguishment, including prepayment penalties, preferred share/preference unit redemptions and the cost related to the implied option value of non-cash convertible debt discounts;
gains and losses on the sales of non-operating assets, including gains and losses from land parcel and condominium sales, net of the effect of income tax benefits or expenses; and
other miscellaneous non-comparable items.

(3)The Company believes that FFO and FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units / Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies. The companyCompany also believes that Normalized FFO and Normalized FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the company’sCompany’s operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results. FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units do not represent net income, net income available to Common Shares / Units or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units should not be exclusively considered as alternatives to net income, net income available to Common Shares / Units or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company’s calculation of FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.
(4)FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units are calculated on a basis consistent with net income available to Common Shares / Units and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares/preference units in accordance with accounting principles generally accepted in the United States. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the “Noncontrolling Interests – Operating Partnership”. Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis.
Note: See Item 7 for a reconciliation of net income to FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units.

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the results of operations and financial condition of the Company and the Operating Partnership should be read in connection with the Consolidated Financial Statements and Notes thereto. Due to the Company's ability to control the Operating Partnership and its subsidiaries, the Operating Partnership and each such subsidiary entity has been consolidated with the Company for financial reporting purposes, except for twothree unconsolidated developmentsoperating properties and our military housing properties. 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, 20122014.

Forward-Looking Statements
Forward-looking statements in this Item 7 as well as elsewhere in 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. These statements are based on current expectations, estimates, projections and assumptions made by management. While the Company's management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, which could cause actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Many of these uncertainties and risks are difficult to predict and beyond management's control. Forward-looking statements are not guarantees of future performance, results or events. The forward-looking statements contained herein are made as of the date hereof and the Company undertakes no obligation to update or supplement these forward-looking statements. Factors that might cause such differences include, but are not limited to the following:

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We intend to actively acquire, and/or develop and rehab multifamily properties for rental operations as market conditions dictate. We may also acquire multifamily properties that are unoccupied or in the early stages of lease up. We may be unable to lease up these apartment properties on schedule, resulting in decreases in expected rental revenues and/or lower yields due to lower occupancy and rates as well as higher than expected concessions or higher than expected operating expenses. We may not be able to achieve rents that are consistent with expectations for acquired, developed or rehabbed properties. We may underestimate the costs necessary to bring an acquired property up to standards established for its intended market position, to complete a development property or to complete a rehab. Additionally, we expect that other real estate investors with capital will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development and acquisition efforts. This competition (or lack thereof) may increase (or depress) prices for multifamily properties. We may not be in a position or have the opportunity in the future to make suitable property acquisitions on favorable terms. We have acquired in the past and intend to continue to pursue the acquisition of properties and portfolios of properties, including large portfolios, that could increase our size and result in alterations to our capital structure. The total number of apartment units under development, costs of development and estimated completion dates are subject to uncertainties arising from changing economic conditions (such as the cost of labor and construction materials), competition and local government regulation;

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We may also acquire multifamily properties that are unoccupied or in the early stages of lease up. We may be unable to lease up these apartment properties on schedule, resulting in decreases in expected rental revenues and/or lower yields due to lower occupancy and rates as well as higher than expected concessions. We may underestimate the costs necessary to bring an acquired property up to standards established for its intended market position or to complete a development property. Additionally, we expect that other real estate investors with capital will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development and acquisition efforts. This competition (or lack thereof) may increase (or depress) prices for multifamily properties. We may not be in a position or have the opportunity in the future to make suitable property acquisitions on favorable terms. We have acquired in the past and intend to continue to pursue the acquisition of properties and portfolios of properties, including large portfolios, that could increase our size and result in alterations to our capital structure. The total number of apartment units under development, costs of development and estimated completion dates are subject to uncertainties arising from changing economic conditions (such as the cost of labor and construction materials), competition and local government regulation;
Debt financing and other capital required by the Company may not be available or may only be available on adverse terms;
Labor and materials required for maintenance, repair, capital expenditure or development may be more expensive than anticipated;
Occupancy levels and market rents may be adversely affected by national and local economic and market conditions including, without limitation, new construction and excess inventory of multifamily and single family housing, increasing portions of single family housing stock being converted to rental use, rental housing subsidized by the government, other government programs that favor single family rental housing or owner occupied housing over multifamily rental housing, governmental regulations, slow or negative employment growth and household formation, the availability of low-interest mortgages or the availability of mortgages requiring little or no down payment for single family home buyers, changes in social preferences and the potential for geopolitical instability, all of which are beyond the Company's control; and
Additional factors as discussed in Part I of this Annual Report on Form 10-K, particularly those under “Item 1A. Risk Factors”.
Forward-looking statements and related uncertainties are also included in the Notes to Consolidated Financial Statements in this report.

Overview

Equity Residential (“EQR”), a Maryland real estate investment trust (“REIT”) formed in March 1993, is an S&P 500 company focused on the acquisition, development and management of high quality apartment properties in top United States growth markets. 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 has elected to be taxed as a REIT. References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP.

EQR is the general partner of, and as of December 31, 20122014 owned an approximate 95.9%96.2% ownership interest in, ERPOP. All of the Company's property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR issues public equity from time to time but does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company's ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity.

The Company's corporate headquarters are located in Chicago, Illinois and the Company also operates property management offices in each of its markets. As of December 31, 2012,2014, the Company had approximately 3,6003,500 employees who provided real estate operations, leasing, legal, financial, accounting, acquisition, disposition, development and other support functions.




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Business Objectives and Operating and Investing Strategies

The Company invests in high quality apartment communities located in strategically targeted markets with the goal of maximizing our risk adjusted total return (operating income plus capital appreciation) on invested capital.

We seek to maximize the income and capital appreciation of our properties by investing in markets (our core markets) that are characterized by conditions favorable to multifamily property operations and appreciation. We are focused primarily on the six core coastal, high barrier to entry markets of Boston, New York, Washington DC, Southern California (including Los Angeles, Orange County and San Diego), San Francisco and Seattle. These markets generally feature one or more of the following characteristics that allow us to increase rents:

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High barriers to entry where, because of land scarcity or government regulation, it is difficult or costly to build new apartment properties, creating limits on new supply;
High home ownership costs;
Strong economic growth leading to job growth and household formation, and job growth, which in turn leads to high demand for our apartments;
Urban core locations with an attractive quality of life and higher wage job categories leading to high resident demand and retention; and
Favorable demographics contributing to a larger pool of target residents with a high propensity to rent apartments.

Our operating focus is on balancing occupancy and rental rates to maximize our revenue while exercising tight cost control to generate the highest possible return to our shareholders. Revenue is maximized by attracting qualified prospects to our properties, cost-effectively converting these prospects into new residents and keeping our residents satisfied so they will renew their leases upon expiration. While we believe that it is our high-quality, well-located assets that bring our customers to us, it is the customer service and superior value provided by our on-site personnel that keeps them renting with us and recommending us to their friends.

We use technology to engage our customers in the way that they want to be engaged. Many of our residents utilize our web-based resident portal which allows them to sign and renew their leases, review their accounts and make payments, provide feedback and make service requests on-line.

Acquisitions and developments may be financed from various sources of capital, which may include retained cash flow, issuance of additional equity and debt, sales of properties and joint venture agreements. In addition, the Company may acquire properties in transactions that include the issuance of limited partnership interests in the Operating Partnership (“OP Units”) as consideration for the acquired properties. Such transactions may, in certain circumstances, enable the sellers to defer, in whole or in part, the recognition of taxable income or gain that might otherwise result from the sales. The Company may acquire land parcels to hold and/or sell based on market opportunities.opportunities as well as options to buy more land in the future. The Company may also seek to acquire properties by purchasing defaulted or distressed debt that encumbers desirable properties in the hope of obtaining title to property through foreclosure or deed-in-lieu of foreclosure proceedings. The Company has also, in the past, converted some of its properties and sold them as condominiums but is not currently active in this line of business.
Over the past several years, the Company has done an extensive repositioning of its portfolio from low barrier to entry/non-core markets to high barrier to entry/core markets. Since 2005, the Company has sold over 133,000166,000 apartment units primarily in its non-core markets for an aggregate sales price of approximately $11.1$16.1 billion, acquired over 44,00067,000 apartment units primarily in its core markets for approximately $10.3$19.5 billion and began approximately $3.0$5.3 billion of development projects primarily in its core markets. We are currently seeking to acquire and develop assets primarily in the following targetedsix core coastal metropolitan areas (our core markets):areas: Boston, New York, Washington DC,D.C., Southern California, San Francisco and Seattle. We also have investments (in the aggregate about 15.8%12.1% of our NOI at December 31, 2012)2014) in otherthe two core markets includingof South Florida Denver and New England (excluding Boston)Denver but do not currently intend to acquire or develop new assets in these markets. Further, we are in the process of exiting Atlanta, Phoenix and Orlando and Jacksonville as we raise capitalwill use sales proceeds from these markets to complete the Archstone transaction.acquire and/or develop new assets and for other corporate purposes.

As part of its strategy, the Company purchases completed and fully occupied apartment properties, partially completed or partially occupied properties and takes options on land or acquires land on which apartment properties can be constructed. We intend to hold a diversified portfolio of assets across our target markets. As of December 31, 2012,2014, no single market/metropolitan area accounted for more than 15.9%17.5% of our NOI, though no guarantee can be made that NOI concentration may not increase in the future.


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We endeavor to attract and retain the best employees by providing them with the education, resources and opportunities to succeed. We provide many classroom and on-line training courses to assist our employees in interacting with prospects and residents as well as extensively train our customer service specialists in maintaining the propertyour properties and its improvements, equipment and appliances. We actively promote from within and many senior corporate and property leaders have risen from entry level or junior positions. We monitor our employees' engagement by surveying them annually and have consistently received high engagement scores.

We have a commitment to sustainability and consider the environmental impacts of our business activities. Sustainability and social responsibility are key drivers of our focus on creating the best apartment communities for residents to live, work and play. We have a dedicated in-house team that initiates and applies sustainable practices in all aspects of our business, including investment activities, development, property operations and property management activities. With its high density, multifamily housing is, by its nature, an environmentally friendly property type. Our recent acquisition and development activities have been primarily concentrated

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in pedestrian-friendly urban locations near public transportation. When developing and renovating our properties, we strive to reduce energy and water usage by investing in energy saving technology while positively impacting the experience of our residents and the value of our assets. We continue to implement a combination of irrigation, lighting, HVAC and renewable energy improvements at our properties that will reduce energy and water consumption. The Company was recently named as the 2014 North American Residential – Large Cap Sector Leader by the Global Real Estate Sustainability Benchmark ("GRESB") survey, a globally recognized analysis of the sustainability indicators of approximately 650 real estate portfolios worldwide. For additional information regarding our sustainability efforts, see our December 2014 Corporate Social Responsibility and Sustainability Report at our website, www.equityresidential.com.

Current Environment

On November 26, 2012,During the year ended December 31, 2014, the Company acquired six consolidated rental properties consisting of 1,353 apartment units for $469.9 million and AvalonBay Communities, Inc. ("AvalonBay" or "AVB") (NYSE:AVB) entered into a contract with Lehman Brothers Holdings Inc. ("Lehman") to acquire the assets and liabilities of Archstone Enterprise LP ("Archstone"), which consists principally of a portfolio of high-quality apartment properties in major markets in the United States. Under the terms of the agreement, the Company will acquire approximately 60% of Archstone's assets and liabilities and AvalonBay will acquire approximately 40% of Archstone's assets and liabilities. The Company will acquire approximately 75 operating properties, four properties under development and severaltwo land parcels to be held for future development for approximately $8.9 billion which will consist of cash of approximately $2.0 billion, 34,468,085 Common Shares and the assumption of the Company's portion of the liabilities related to the Archstone assets (other than certain liabilities owed to Lehman and certain transaction expenses). The Company also expects to assume approximately $3 billion of consolidated Archstone debt. In addition, the Company and AvalonBay will acquire certain assets of Archstone, including Archstone’s interests in certain joint ventures, interests in a portfolio of properties located in Germany and certain development land parcels, and will become subject to approximately $179.9 million in preferred interests of Archstone unitholders through various unconsolidated joint ventures expected to be owned 60% by the Company and 40% by AvalonBay. The transaction is expected to close in the first quarter of 2013.

We expect continued growth in 2013 same store revenue (anticipated increase ranging from 4.0% to 5.0%) and 2013 NOI (anticipated increase ranging from 4.5% to 6.0%) and are optimistic that the strength in fundamentals realized in the past couple of years and so far in 2013 will be sustained for the foreseeable future. We believe the key drivers behind the anticipated increase in revenue are base rent pricing for new residents, renewal pricing for existing residents, resident turnover and physical occupancy. Thus far in 2013, base rents are higher as compared with the same period last year and are gradually increasing from normal seasonal lows. We expect base rent growth to average 4.0% to 4.5% with higher growth during the peak leasing season. Renewal rates remain strong and are expected to exceed 5.0% on average throughout the year. The significant disposition activity discussed below, including exiting certain of our non-core markets, will leave a same store set expected to show a decrease in turnover as compared to 2012. Although occupancy is higher than anticipated for this time of the year, it is expected to remain consistent with last year. Despite slow growth in the overall economy, our business continues to perform well because of the combined forces of demographics, household formations and the continued aversion to home ownership, all of which should ensure a continued strong demand for rental housing.

The Company anticipates that 2013 same store expenses will increase 2.5% to 3.5% primarily due to increases in real estate taxes, which are expected to increase over 6% in 2013. This is primarily due to rate and value increases in certain states and municipalities, reflecting those states' and municipalities' continued economic challenges and the dramatic improvement in apartment fundamentals. The other key driver of this increase is the burn off of 421a tax abatements in New York City. Very good expense control in the core property level expenses (excluding real estate taxes) continues as the Company leverages technology to lower costs, which should partially offset the increase in real estate taxes. This exceptional expense control has allowed the Company to realize over five years of same store annual expense growth below 3.0%.

While competition for the properties we are interested in acquiring is significant due to continued strength in market fundamentals, we are focusing our attention in 2013 on closing the Archstone acquisition and integrating its properties and operations.$28.8 million. We believe our access to capital, our ability to execute large, complex transactions and our ability to efficiently stabilize large scale lease up properties provide us with a competitive advantage, which iswas demonstrated in the pending Archstone transaction.Transaction that closed in 2013. The Company acquired ninecurrently budgets consolidated properties consistingrental acquisitions of 1,896 apartment units for $906.3approximately $500.0 million during the year ended December 31, 2012. The Company did not budget for any acquisitions to occur outside of Archstone during the year ending December 31, 20132015 to be funded with proceeds from rental dispositions (see discussion below).

The Company also acquired six land parcels for $141.2 million during the year ended December 31, 2012. The Company started construction on twosix projects (inclusive of the Company's co-development with Toll Brothers to develop 400 Park Avenue South in New York City) representing 3572,267 apartment units totaling approximately $306.0 million$1.2 billion of development costs during the year ended December 31, 2012.2014. The Company significantly increased its development starts in 2014 as compared to the past few years and while construction activity will remain elevated in 2015, starts should return to more normalized levels. The Company has budgeted approximately $1.0 billion of combined new apartment construction starts on land currently anticipates starting between $500.0owned during the years ending December 31, 2015 and 2016, with approximately $400.0 million occurring in 2015 and the balance occurring in 2016. We currently budget spending approximately $700.0 million of new developmentson development costs during the year ending December 31, 2015. This capital will be primarily sourced with excess operating cash flow, expected debt offerings in 2013, some of which were delayed from 2012 as we worked2015 and borrowings on funding for the Archstone transaction.our revolving credit facility and/or commercial paper program.

The Company continuesexpects to continue to sell non-core assets and reduce its exposure to non-core markets as we believe these assets will have lower long-term returns and we can sell them for prices that we believe are favorable. The Archstone transaction provides an opportunity to accelerate this strategy and do so efficiently through the use of Section 1031 tax deferred exchanges. The

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Company sold 35ten consolidated rental properties consisting of 9,0123,092 apartment units for $1.1 billion$467.0 million, one unconsolidated rental property consisting of 388 apartment units for $62.5 million (sales price for the unconsolidated rental property is the gross sales price and EQR owned an 85% interest) and three land parcels for $62.6 million during the year ended December 31, 2012. These dispositions combined with reinvestment of the cash proceeds in assets with lower cap rates (see definition below) were dilutive to our per share results.2014. The Company defines dilution from transactions as the lost NOI from sales proceeds that were not reinvested in other apartment properties or were reinvested in properties with a lower cap rate. The Company anticipatescurrently budgets consolidated rental dispositions of approximately $4.0 billion$500.0 million during the year ending December 31, 2013. The Company plans to fund a portion of2015, which includes the cash purchase price of the Archstone transaction with capital raised through these significant dispositions of assets. The Company currently anticipates that $3.5 billion of the projected $4.0 billion of dispositions for 2013 will occurCompany's three remaining properties in the first half of 2013. While this accelerated disposition program will be dilutive to our per share results, it should reduce the execution risk on the Archstone transaction.Orlando market.

We currently have access to multiple sources of capital including the equity markets as well as both the secured and unsecured debt markets. In December 2012,June 2014, the Company raised $1.2 billion in equity incompleted a public$450.0 million unsecured five year note offering with a coupon of 21,850,000 Common Shares priced at $54.75 per share. We also raised $192.32.375% and an all-in effective interest rate of approximately 2.52% as well as a $750.0 million under our ATM program in 2012. Onunsecured thirty year note offering with a coupon of 4.5% and an all-in effective interest rate of approximately 4.57%. The Company used the proceeds from these offerings to repay its $750.0 million unsecured term loan facility that was scheduled to mature on January 11, 2013,2015 and to repay the Company replacedoutstanding balance on its existing $1.75 billion credit facility with a new $2.5 billion unsecured revolving credit facility maturing April 1, 2018. The Company believes that the new facility contains a diversified and strong bank group which increases its balance sheet flexibility going forward. On January 11, 2013,facility. In February 2015, the Company also entered into a new senior unsecured $750.0$500.0 million delayed draw term loan facilitycommercial paper program, which is currently undrawn and may be drawn anytime onwill allow for daily, weekly, or before July 11, 2013. With the completionmonthly borrowing at low floating rates of these financing activities, along with cash on hand,interest. We believe this commercial paper program will allow the Company believes it has sufficientto continue to reduce its already low cost of capital availableand expect to fund itsuse the program to replace a portion of the Archstone acquisition cash price, transaction costs and requiredamount that we would otherwise have outstanding under our revolving line of credit. The Company has budgeted $950.0 million of secured or unsecured debt paydowns.offerings during 2015, excluding usage of the commercial paper program.


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We believe that cash and cash equivalents, securities readily convertible to cash, current availability on our revolving credit facility and delayed draw term loan facilitycommercial paper program, expected debt offerings and disposition proceeds for 20132015 will provide sufficient liquidity to meet our funding obligations relating to asset acquisitions, (including Archstone), debt maturities and existing development projects through 2013.2015. We expect that our remaining longer-term funding requirements will be met through some combination of new borrowings, equity issuances, (including EQR's ATM Common Share offering program), property dispositions, joint ventures and cash generated from operations.

There is significant uncertainty surrounding the futures of Fannie Mae and Freddie Mac (the “Government Sponsored Enterprises” or “GSEs”). Through their lender originator networks, the GSEs are significant lenders both to the Company and to buyers of the Company's properties. The GSEs have a mandate to support multifamily housing through their financing activities. Any changes to their mandates, further reductions in their size or the scale of their activities or loss of key personnel could have a significant impact on the Company and may, among other things, lead to lower values for our disposition assets and higher interest rates on our borrowings. The GSE's regulator has set overall volume limits on most of the lending activities of the GSEs. For 2015, these activities are generally consistent with historical requirements and are not anticipated to materially impact the GSEs' overall multifamily lending activity. However, going forward the regulator could require the GSEs to focus more of their lending activities on small borrowers or properties that the regulator deems affordable, which may or may not include the Company's assets. For 2015, the GSE’s regulator imposed a limit of $60 billion in multifamily lending volume which excluded certain affordable housing loans, loans to small multifamily properties, and loans to manufactured housing communities. This limit along with the exclusion of certain types of lending activity reflects a modest increase to 2014 levels. While no reductions are currently anticipated, there can be no assurances that the GSEs regulator does not mandate reductions or increases in loan pricing in the future. Such changes may alsoreductions in GSE activity or increases in GSE loan pricing could provide ana competitive advantage to us by making the cost of financing multifamily properties more expensive for other multifamily owners while the Company continues to have access to cheaper capital in the public and private debt and equity markets. Over time, we expect that other lenders, including banks, the commercial mortgage-backed securities market and life insurance companies, will become larger sources of debt capital to the multifamily market because multifamily properties are attractive to lenders due to their relatively stable cash flows.
Same store revenues increased 4.3% during the year ended December 31, 2014 as compared to the same period in 2013, which was above the high end of our original guidance range of 3.0% to 4.0% that we provided in February 2014. Strong demand and continued strength in occupancy levels drove the outperformance during 2014, which should continue into 2015. In addition, improving labor markets, robust household formation and declining single family home ownership more expensivelevels should keep demand for rental housing high and provide us a competitive advantage given the sizeproduce above trend growth for 2015. We anticipate same store revenue increases ranging from 3.75% to 4.50% and same store NOI increases ranging from 4.0% to 5.5% for 2015 as compared to 2014.

All of our balance sheetmarkets are generally performing well, except for Washington D.C. As noted above, demand for our apartments has been strong, with high occupancy and low turnover due in part to declines in move outs to buy new homes. In general, new supply continues to be absorbed in an orderly fashion with lease-ups occurring faster than expected and only minimal impact on rents at nearby stabilized assets. During 2015, we currently anticipate three groupings of same store revenue growth, with San Francisco, Seattle, Denver and Orange County producing 5% or higher, New York, Los Angeles, San Diego, South Florida and Boston producing 3% to 5% (although Boston might be in the high 2% range) and Washington D.C. producing flat to slightly positive growth. Washington D.C., which is our largest market, has seen record absorption despite anemic job growth in 2014. However, Washington D.C. continues to show signs of stress as substantial new supply and the multiple sourcesimpact of capitalgovernment budget constraints and cutbacks have dampened the metro area economy. Despite slow growth in the overall economy and the issues noted in Washington D.C., our business continues to perform well because of the combined forces of demographics, household formations and increasing consumer preference for the flexibility of rental housing, all of which should ensure a continued strong demand for rental housing.

Same store expenses increased 1.8% during the year ended December 31, 2014 as compared to the same period in 2013, which was below the low end of our original guidance range of 2.0% to 3.0% that we have access.provided in February 2014. By leveraging the integration of the Archstone Portfolio through lower onsite payroll and a more efficient property management company, we were able to offset 5.6% and 5.0% increases in same store real estate taxes and utilities, respectively. Same store expense growth in the controllable property level expenses (excluding real estate taxes and utilities) declined 1.5% during 2014 as compared to 2013. The Company anticipates that 2015 same store expenses will increase 2.5% to 3.5%, with increases in real estate taxes expected to approximate 5.0% for the full year 2015. The increase in real estate taxes is primarily due to rate and value increases in certain states and municipalities, reflecting those states' and municipalities' continued economic challenges and the dramatic improvement in apartment values and fundamentals as well as the continued burn off of 421a tax abatements in New York City. We expect full year utility costs to decline approximately 1.0% due to significant declines in natural gas and heating oil, partially offset by higher costs for electricity, water, sewer and trash. With an improving labor market and the Archstone Portfolio staffing fully optimized, we anticipate same store payroll costs to grow 2.0% to 3.0% in 2015 over 2014.

    

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We believe that the Company is well-positioned as of December 31, 20122014 because our properties are geographically diverse, were approximately 94.3%95.1% occupied (95.0%(95.7% on a same store basis) and the long-term demographic picture is positive. With the exception of theWe believe certain market areas, especially Washington D.C., downtown Boston and Cambridge and Seattle, market areas and the San Jose sub-market area of San Francisco, littlewill see substantial near term multifamily supply; yet total new multifamily rental supply will be added tolevels for our core markets remain within historical ranges. We believe over the next several years.longer term that our core markets will absorb future supply without material marketwide disruption because of the high occupancy levels we currently experience and increasing household formations. We have seen evidence of this in Seattle as supply has been absorbed and rental rates continue to grow. We believe our strong balance sheet and ample liquidity will allow us to fund our debt maturities and development costs in the near term, and should also allow us to take advantage of investment opportunities in the future. As economic conditions continue to improve, the short-term nature of our leases and the limited supply of new rental housing being constructed, along with the customer service and superior value provided by our on-site personnel, should allow us to realize even more revenue growth and improvement in our operating results.

The current environment information presented above is based on current expectations and is forward-looking.

Results of Operations
In conjunction with our business objectives and operating strategy, the Company continued to invest primarily in apartment properties located in strategically targetedour high barrier to entry/core markets and primarily sell properties in our low barrier to entry/non-core markets during the years ended December 31, 20122014 and December 31, 20112013. In summary, we:
Year Ended December 31, 20122014:
Acquired $906.3four consolidated apartment properties consisting of 1,011 apartment units for $363.2 million at a weighted cap rate (see definition below) of 4.8% and two land parcels for $28.8 million;
Acquired two consolidated apartment properties, one that had just completed lease up and the other which was still in lease up, consisting of 342 apartment units for $106.6 million and are expected to stabilize at a 6.4% yield on cost and a 4.9% yield on cost, respectively;
Acquired the 95% equity interest it did not own in one previously unconsolidated development project with an anticipated stabilized real estate value of $87.5 million at completion and an adjusted purchase price of $64.2 million;
Sold ten consolidated apartment properties consisting of 3,092 apartments units for $467.0 million at a weighted average cap rate of 6.1% generating an unlevered internal rate of return ("IRR"), inclusive of management costs, of 8.9% and three land parcels for $62.6 million; and
Sold one unconsolidated property for $62.5 million (sales price listed is the gross sales price and EQR owned an 85% interest).
Year Ended December 31, 2013:
Acquired $8.5 billion of apartment properties consisting of nine73 consolidated properties and 1,89620,914 apartment units (inclusive of eight long-term ground leases) at a weighted average cap rate (see definition below) of 4.7%4.9% and acquired six14 consolidated land parcels for $141.2 million, all of which we deem to be in our strategic targeted markets; and
Sold $1.1 billion of consolidated apartment properties consisting of 35 properties and 9,012 apartment units at a

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weighted average cap rate of 6.2%, the majority of which were in exit or less desirable markets. These sales, excluding two leveraged partially-owned assets sold during the third quarter, generated an unlevered internal rate of return (IRR), inclusive of management costs, of 10.6%.
Year Ended December 31, 2011:
Acquired $1.3 billion of apartment properties consisting of 20 consolidated properties and 6,103 apartment units at a weighted average cap rate (see definition below) of 5.2% and acquired five land parcels and entered into a long-term ground lease on one land parcel located in New York City for a total of $68.3$260.6 million, all of which we deem to be in our strategic targeted markets;
Acquired one vacant land parcel in New York City in a joint venture with Toll Brothers for $134.0 million,three consolidated master-leased properties consisting of contributions by the Company and Toll Brothers853 apartment units (inclusive of approximately $76.1one long-term ground lease) for $249.6 million and $57.9 million, respectively, at a weighted average cap rate of 5.6%;
Acquired two consolidated uncompleted developments for future development;$36.6 million;
Acquired one unoccupiedunconsolidated apartment property in the San Francisco Bay Area in the third quarter of 2011 for $39.5 million consisting of 95336 apartment units that is expected to stabilizefor $5.1 million at a 6.3% yield on cost;weighted average cap rate of 5.8% and one unconsolidated land parcel for $6.6 million;
Acquired a 97,000 square foot commercial building adjacent to our Harbor Steps apartment property in downtown Seattletwo unconsolidated uncompleted developments for $11.8 million for potential redevelopment; and$14.9 million;
Sold $1.5$4.5 billion of consolidated apartment properties consisting of 4794 properties and 14,34529,180 apartment units at a weighted average cap rate of 6.5%6.0% generating an unlevered internal rate of return (IRR),IRR, inclusive of management costs, of 11.1% and one land parcel for $22.8 million,10.0% (excluding the sale of three Archstone assets), the majority of which were in exit or less desirable markets.    markets;
Sold seven consolidated land parcels and one consolidated commercial building for $130.4 million; and
Sold one unconsolidated land parcel for $26.4 million (sales price is the gross sales price and EQR's share of the net sales proceeds approximated 25%).
The Company's primary financial measure for evaluating each of its apartment communities is net operating income (“NOI”). NOI represents rental income less property and maintenance expense, real estate tax and insurance expense and property management expense. The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company's apartment communities. The cap rate is generally the first year NOI yield (net of replacements) on the Company's investment.


42



Properties that the Company owned and were stabilized (see definition below) for all of both 20122014 and 20112013 as well as the 18,465 stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company (the “20122014 Same Store Properties”), which represented 98,57797,911 apartment units, impacted the Company's results of operations. Properties that the Company owned for all of both 20112013 and 20102012 (the “20112013 Same Store Properties”), which represented 101,31280,247 apartment units, also impacted the Company's results of operations. Both the 20122014 Same Store Properties and 20112013 Same Store Properties are discussed in the following paragraphs.
The following tables provide a rollforward of the apartment units included in Same Store Properties and a reconciliation of apartment units included in Same Store Properties to those included in Total Properties for the year ended December 31, 20122014:

 Year Ended
 December 31, 2012
 Properties
Apartment
Units
Same Store Properties at December 31, 2011370
101,312
   
2010 acquisitions16
4,445
2010 acquisitions not stabilized(2)(1,238)
2012 dispositions(35)(9,012)
2012 dispositions not stabilized2
441
2012 dispositions not yet included in same store (1)2
542
Consolidation of previously
   unconsolidated properties
   in 2010 (1)
2
501
Lease-up properties stabilized4
1,570
Other
16
   
Same Store Properties at December 31, 2012359
98,577
 Year Ended
 December 31, 2014
 Properties
Apartment
Units
Same Store Properties at December 31, 2013296
80,247
   
2012 acquisitions9
1,896
2013 acquisitions77
22,103
2013 acquisitions not yet included in same store (1)(1)(322)
2013 acquisitions not yet stabilized (2)(2)(613)
2013 acquisitions not managed by the Company (3)(3)(853)
2013 acquisitions not consolidated(1)(336)
2013 acquisitions disposed of in 2013 (4)(3)(1,536)
2014 dispositions(10)(3,092)
Lease-up properties stabilized3
374
Other
43
Same Store Properties at December 31, 2014365
97,911


45


Year EndedYear Ended
December 31, 2012December 31, 2014
Properties
Apartment
Units
Properties
Apartment
Units
Same Store359
98,577
365
97,911
  
Non-Same Store:  
2012 acquisitions9
1,896
2011 acquisitions21
6,198
2014 acquisitions4
1,011
2014 acquisitions not yet stabilized (2)2
342
2013 acquisitions not yet included in same store (1)1
322
2013 acquisitions not yet stabilized (2)2
613
2013 acquisitions not managed by the Company (3)3
853
2013 acquisitions not consolidated1
336
Lease-up properties not yet
stabilized (2)
11
3,656
10
2,803
Other1
4
1
1
Total Non-Same Store42
11,754
24
6,281
Military Housing (not consolidated)2
5,039
2
5,033
 
Total Properties and Apartment Units403
115,370
391
109,225
 

Note: Properties are considered "stabilized" when they have achieved 90% occupancy for three consecutive months. Properties are included in Same Store when they are stabilized for all of the current and comparable periods presented. Same store includes the 18,465 stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company, with pro forma pre-ownership results for the period January 1, 2013 to February 27, 2013.

(1)In 2010, the Company consolidated seven propertiesIncludes one property containing 1,811322 apartment units that had previously been categorized as unconsolidated. Of these properties, one containing 208 apartment units was soldacquired in 2010, two containing 560 apartment units were sold in 2011 and two containing 542 apartment units were sold in 2012.2013 separately from the Archstone Acquisition.

43



(2)Includes properties in various stages of lease-up and properties where lease-up has been completed but the properties were not stabilized for the comparable periods presented.
(3)Includes three properties containing 853 apartments units acquired on February 27, 2013 in conjunction with the Archstone Acquisition that are owned by the Company but the entire projects are master leased to a third party corporate housing provider and the Company earns monthly net rental income.
(4)Includes three properties containing 1,536 apartment units acquired on February 27, 2013 in conjunction with the Archstone Acquisition that were subsequently sold in 2013.
The Company's acquisition, disposition and completed development activities also impacted overall results of operations for the years ended December 31, 20122014 and 20112013. The impacts of these activities are discussed in greater detail in the following paragraphs.
    
Comparison of the year ended December 31, 20122014 to the year ended December 31, 20112013
    
For the year ended December 31, 20122014, the Company reported diluted earnings per shareshare/unit of $2.70$1.73 compared to $2.95$5.16 per shareshare/unit for the year ended December 31, 20112013. The difference is primarily due to approximately $1.8 billion in higher gains fromon property sales in 20112013 vs. 2012,2014, partially offset by $69.6 million of higher total property net operating income driven bymerger-related expenses incurred in 2013 vs. 2014 in connection with the positive impactArchstone Acquisition, $122.8 million of the Company’s same store and lease-up activity andhigher debt extinguishment costs incurred in 2013 vs. 2014 in connection with early debt extinguishment of existing mortgage notes payable to manage the Company's recognitionpost Archstone 2017 maturities profile and higher depreciation in 2013 as a direct result of $150.0 million in termination fees related to our pursuit of Archstone (see Note 18in-place residential lease intangibles acquired in the Notes to Consolidated Financial Statements for further discussion).Archstone Transaction.

For the year ended December 31, 20122014, income from continuing operations increased approximately $253.8$825.3 million when compared to the year ended December 31, 20112013. The increase in continuing operations is discussed below.

Revenues from the 20122014 Same Store Properties increased $97.5$101.6 million primarily as a result of an increase in average rental rates charged to residents, and slightly higher occupancy partially offset by increasedand a decrease in turnover. Expenses from the 20122014 Same Store Properties increased $11.2$14.8 million primarily due to increases in real estate taxes and insurance,utilities, partially offset by a decrease in utilities.lower property management costs. The following tables provide comparative same store results and statistics for the 20122014 Same Store Properties:


46


2012 vs. 2011
Same Store Results/Statistics
$ in thousands (except for Average Rental Rate) – 98,577 Same Store Apartment Units
             
  Results Statistics
        
Average
Rental
Rate (1)
    
Description Revenues Expenses NOI  Occupancy Turnover
2012 $1,868,918
 $649,914
 $1,219,004
 $1,658
 95.4% 58.2%
2011 $1,771,449
 $638,671
 $1,132,778
 $1,575
 95.2% 57.3%
Change $97,469
 $11,243
 $86,226
 $83
 0.2% 0.9%
Change 5.5% 1.8% 7.6% 5.3%    
2014 vs. 2013
Same Store Results/Statistics for 97,911 Same Store Apartment Units
$ in thousands (except for Average Rental Rate)
             
  Results Statistics
        
Average
Rental
Rate (1)
    
Description Revenues Expenses NOI  Occupancy Turnover
2014 $2,475,933
 $830,697
 $1,645,236
 $2,202
 95.8% 55.0%
2013 $2,374,350
 $815,865
 $1,558,485
 $2,119
 95.4% 55.5%
Change $101,583
 $14,832
 $86,751
 $83
 0.4% (0.5%)
Change 4.3% 1.8% 5.6% 3.9%    

(1)Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period.
Note: Same store results/statistics include the stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company.

(1)Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period.
The following table provides comparative same store operating expenses for the 20122014 Same Store Properties:

44



2012 vs. 2011
Same Store Operating Expenses
$ in thousands – 98,577 Same Store Apartment Units
2014 vs. 20132014 vs. 2013
Same Store Operating Expenses for 97,911 Same Store Apartment UnitsSame Store Operating Expenses for 97,911 Same Store Apartment Units
$ in thousands$ in thousands
         % of Actual
2012
Operating
Expenses
         % of Actual
2014
Operating
Expenses
                  
 Actual
2012
 Actual
2011
 $
Change
 %
Change
  Actual
2014
 Actual
2013
 $
Change
 %
Change
 
  
Real estate taxes $197,316
 $184,773
 $12,543
 6.8% 30.3% $287,214
 $271,888
 $15,326
 5.6% 34.6%
On-site payroll (1) 146,637
 145,979
 658
 0.5% 22.5% 174,273
 174,589
 (316) (0.2%) 21.0%
Utilities (2) 97,313
 98,572
 (1,259) (1.3%) 15.0% 125,235
 119,253
 5,982
 5.0% 15.1%
Repairs and maintenance (3) 88,931
 89,152
 (221) (0.2%) 13.7% 100,496
 100,319
 177
 0.2% 12.1%
Property management costs (4) 70,084
 70,858
 (774) (1.1%) 10.8% 74,278
 78,354
 (4,076) (5.2%) 8.9%
Insurance 20,629
 19,257
 1,372
 7.1% 3.2% 24,354
 24,626
 (272) (1.1%) 2.9%
Leasing and advertising 10,812
 11,798
 (986) (8.4%) 1.7% 10,802
 12,072
 (1,270) (10.5%) 1.3%
Other on-site operating expenses (5) 18,192
 18,282
 (90) (0.5%) 2.8% 34,045
 34,764
 (719) (2.1%) 4.1%
Same store operating expenses $649,914
 $638,671
 $11,243
 1.8 % 100.0% $830,697
 $815,865
 $14,832
 1.8 % 100.0%

(1)On-site payroll – Includes payroll and related expenses for on-site personnel including property managers, leasing consultants and maintenance staff.
(2)Utilities – Represents gross expenses prior to any recoveries under the Resident Utility Billing System (“RUBS”). Recoveries are reflected in rental income.
(3)Repairs and maintenance – Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs.
(4)Property management costs – Includes payroll and related expenses for departments, or portions of departments, that directly support on-site management. These include such departments as regional and corporate property management, property accounting, human resources, training, marketing and revenue management, procurement, real estate tax, property legal services and information technology.
(5)Other on-site operating expenses – Includes ground lease costs and administrative costs such as office supplies, telephone and data charges and association and business licensing fees and ground lease costs.fees.
The following table presents a reconciliation of operating income per the consolidated statements of operations and comprehensive income to NOI for the 20122014 Same Store Properties:

  Year Ended December 31,
  2014 2013
  (Amounts in thousands)
Operating income $921,375
 $512,322
Adjustments:    
Archstone pre-ownership operating results 
 55,694
Non-same store operating results (81,940) (47,445)
Fee and asset management revenue (9,437) (9,698)
Fee and asset management expense 5,429
 6,460
Depreciation 758,861
 978,973
General and administrative 50,948
 62,179
Same store NOI $1,645,236
 $1,558,485






4745



  Year Ended December 31,
  2012 2011
  (Amounts in thousands)
Operating income $667,958
 $541,675
Adjustments:    
Non-same store operating results (155,374) (60,334)
Fee and asset management revenue (9,573) (9,026)
Fee and asset management expense 4,663
 4,279
Depreciation 664,082
 612,579
General and administrative 47,248
 43,605
Same store NOI $1,219,004
 $1,132,778
For properties that the Company acquired prior to January 1, 20122014 and expects to continue to own through December 31, 20132015 (which is computed based on the portfolio of approximately 80,000 apartment units that the Company expects to have in its annual same store set after the completion of its planned 2013 dispositions), the Company anticipates the following same store results for the full year ending December 31, 20132015:

20132015 Same Store Assumptions
Physical occupancy 95.3%95.8%
Revenue change 4.0%3.75% to 5.0%4.5%
Expense change 2.5% to 3.5%
NOI change 4.5%4.0% to 6.0%5.5%
The Company anticipates no consolidated rental acquisitions outside of Archstone$500.0 million and consolidated rental dispositions of $4.0 billion$500.0 million and expects that acquisitions will have a 1.00% lower cap rate than dispositions for the full year ending December 31, 2013.2015.
These 20132015 assumptions are based on current expectations and are forward-looking.

Non-same store operating results increased approximately $95.0$34.5 million and consist primarily of properties acquired in calendar years 20112013 and 20122014, as well as operations from the Company’s completed development properties. Althoughproperties, but exclude the operations of both18,465 stabilized apartment units acquired in the non-same store assetsArchstone Acquisition that are owned and managed by the same store assets have been positively impacted during the year ended December 31, 2012, the non-same store assets have contributed a greater percentage of total NOI to the Company’s overall operating results primarily due to 2011 and 2012 acquisitions, increasing occupancy for properties in lease-up and a longer ownership period in 2012 than 2011.Company. This increase primarily resulted from:

Development and other miscellaneousnewly stabilized development properties in lease-up of $12.3$20.6 million;
PropertiesOperating properties acquired in 2013 and 2014 of $13.8 million 2011(excluding operating properties acquired in the Archstone Acquisition) and 2012 of $75.1 million; and;
Newly stabilized developmentOther miscellaneous properties (including three master-leased properties acquired in the Archstone Acquisition) of $1.7 million; and
Partially offset by a decrease in operating activities from other miscellaneous properties of $5.9 million.operations.

See also Note 17 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s segment disclosures.

Fee and asset management revenues, net of fee and asset management expenses, increased approximately $0.2$0.8 million or 3.4%23.8% primarily as a result of fees earned on management of the Company’s unconsolidated development joint ventures, partially offset by lower revenueshigher revenue earned on management of the Company's military housing ventures at Fort Lewis and McChord Air Force Basebase and higher expenses.lower expenses, partially offset by lower fees earned on management of the Company’s unconsolidated development joint ventures.

Property management expenses from continuing operations include off-site expenses associated with the self-management of the Company’s properties as well as management fees paid to any third party management companies. These expenses were consistent between the periods under comparison.decreased approximately $4.7 million or 5.6%. This decrease is primarily attributable to a decrease in payroll-related costs, office rent, education/conferences and legal and professional fees.

Depreciation expense from continuing operations, which includes depreciation on non-real estate assets, increaseddecreased approximately $51.5$220.1 million or 8.4%22.5% primarily as a result of in-place residential lease intangibles which are generally amortized over a six month period and can significantly elevate depreciation expense following an acquisition, especially during 2013 as a direct result of the Archstone Acquisition, partially offset by additional depreciation expense on properties acquired in 2011 and 2012,2014, development properties placed in service and capital expenditures for all properties owned, partially offset by a decrease in the amortization of both in-place leases and furniture, fixtures and equipment that were fully depreciated.owned.

General and administrative expenses from continuing operations, which include corporate operating expenses, increased

48


decreased approximately $3.6$11.2 million or 8.4%18.1% primarily due to an increasea decrease in payroll-related costs which is largely a result of the acceleration of long-term compensation expense for retirement eligible employees, partially offset by a decrease inand office rent. The Company anticipates that general and administrative expenses will approximate $55.0$51.0 million to $58.0$53.0 million for the year ending December 31, 2013.2015, excluding approximately $9.7 million in duplicative costs related to the Company's revised executive compensation program. The above assumption is based on current expectations and is forward-looking.

Interest and other income from continuing operations increaseddecreased approximately $142.6$0.8 million or 15.5% primarily due to proceeds received from the Company recognizing $150.0 million in termination fees related to our pursuitsale of Archstonecertain investment securities during the year ended December 31, 2012,2013 that did not reoccur in 2014, partially offset by lower interest earned on cash and cash equivalents due to lower overall cash investedproceeds received from various insurance/litigation settlements totaling $2.8 million during the year ended December 31, 2012 as well as forfeited deposits for terminated disposition transactions, proceeds received from the Company’s final royalty participation in LRO/Rainmaker (a revenue management system) and litigation settlement proceeds2014 that all occurred during the year ended December 31, 2011 and did not reoccur during the year ended December 31, 2012.occur in 2013. The Company anticipates that interest and other income will approximate $0.5$0.5 million to $1.5 million for the year ending December 31, 2013.2015. The above assumption is based on current expectations and is forward-looking.

46



Other expenses from continuing operations increaseddecreased approximately $13.1$20.6 million or 91.4%69.4% primarily due to the settlementclosing of a dispute with the owners of a land parcel, an increaseArchstone Acquisition during the year ended December 31, 2013 and the significant decline in transaction activity during the expensing of overhead (pursuit costs write-offs) as a result of a more active focus on sourcing new development opportunities, an increase in property acquisition costs incurred in conjunction with the Company's 2012 acquisitions and transaction costs related to the pursuit of Archstone.year ended December 31, 2014.

Interest expense from continuing operations, including amortization of deferred financing costs, decreased approximately $2.0$140.8 million or 0.4%23.1% primarily as a result of lower interest expense$122.8 million of higher debt extinguishment costs incurred on mortgage notes payable dueearly debt prepayments and write-offs of unamortized deferred financing costs in 2013 vs. 2014 related to lower balances duringmanaging the year ended December 31, 2012 as compared to the same period in 2011,Company's post Archstone 2017 maturities profile and higher capitalized interest in 2012, the redemption of the Company's $650.0 million of unsecured notes in August 2011 and the repayment of $253.9 million of 6.625% unsecured notes in March 2012, partially offset by interest expense on the $1.0 billion of unsecured notes that closed in December 2011.2014. During the year ended December 31, 20122014, the Company capitalized interest costs of approximately $22.5$52.8 million as compared to $9.1$47.3 million for the year ended December 31, 20112013. This capitalization of interest primarily relates to consolidated projects under development. The effective interest cost on all indebtedness for the year ended December 31, 20122014 was 5.37%4.74% as compared to 5.30%4.91% (excluding $107.6 million in net debt extinguishment costs) for the year ended December 31, 2011.2013. The Company anticipates that interest expense from continuing operations will approximate $477.3$442.8 million to $498.8$455.1 million (excluding debt extinguishment costs) for the year ending December 31, 20132015. The above assumption is based on current expectations and is forward-looking.

Income and other tax expense from continuing operations decreasedincreased approximately $0.2 million or 26.0%19.2% primarily due to decreasesincreases in estimated taxes related to properties sold by the Company's TRS in 2014 vs. 2013, partially offset by a reduction and timing of all other taxes. The Company anticipates that income and other tax expense will approximate $1.5$1.0 million to $2.5$1.5 million for the year ending December 31, 20132015. The above assumption is based on current expectations and is forward-looking.

Loss from investments in unconsolidated entities decreased by $50.2 million or 86.3% primarily due to indirect costs incurred in 2013 from the Archstone Acquisition through the Company's joint ventures with AVB such as severance and retention bonuses that have significantly decreased in 2014.

Net gain on sales of real estate properties increased $212.7 million as a result of the startsale of operations at one often consolidated apartment properties during the Company's unconsolidated development joint ventures.year ended December 31, 2014 that did not meet the new criteria for reporting discontinued operations. See Notes 2 and 11 in the Notes to Consolidated Financial Statements for further discussion.

Net gain on sales of land parcels decreased approximately $4.2$7.0 million or 56.8% due to the gain on sale of athree land parcel located in suburban Washington, D.C.parcels during the year ended December 31, 20112014 as compared to noseven land sales during the year ended December 31, 2012.2013.

Discontinued operations, net decreased approximately $307.8 million$2.1 billion or 35.1%99.9% between the periods under comparison. This decrease is primarily due to substantially higher gains on sales from dispositionsvolume during the year ended December 31, 20112013 compared to the same period in 2012. Properties sold in 2012 reflect2014 and due to the Company's adoption of the new discontinued operations for a partial period in 2012 in contrast to a full period in 2011.standard effective January 1, 2014. See Note 11 in the Notes to Consolidated Financial Statements for further discussion.
Comparison of the year ended December 31, 20112013 to the year ended December 31, 20102012
For the year ended December 31, 20112013, the Company reported diluted earnings per share of $2.95$5.16 compared to $0.95$2.70 per share for the year ended December 31, 20102012. The difference is primarily due to higher gains from property sales in 20112013 vs. 2010,2012 and higher total property net operating income driven by the positive impact of the Company's same store and lease-up activity and $45.4 million in impairment losses in 2010 that did not reoccur in 2011,stabilized Archstone properties, partially offset by dilution$73.9 million of merger-related expenses incurred in connection with the Archstone Acquisition, $121.7 million of costs incurred in connection with early debt extinguishment of existing mortgage notes payable to manage the Company's post Archstone 2017 maturities profile, higher depreciation as a direct result of the net impactArchstone Transaction, the issuance of Common Shares to the public in December 2012 and to an affiliate of Lehman Brothers Holdings Inc. in February 2013 as partial consideration for the Archstone Acquisition and the Company's 2010 and 2011 acquisition and disposition activities.recognition of $150.0 million in Archstone-related termination fees in 2012.

For the year ended December 31, 20112013, incomeloss from continuing operations increased approximately $160.9$328.5 million when compared to the year ended December 31, 20102012. The increasedecrease in continuing operations is discussed below.

Revenues from the 20112013 Same Store Properties increased $81.9$76.0 million primarily as a result of an increase in average rental rates charged to residents, slightly higher occupancy and an increasea decrease in occupancy.turnover. Expenses from the 20112013 Same Store Properties increased $3.5$20.2 million primarily due to increases in property management costs, real estate taxes, utilities and utilities,repairs and maintenance costs, partially offset by decreases in leasing and advertising costs and insurance.lower property management costs. The following tables provide comparative same store results and statistics for the 20112013 Same Store Properties:


4947




2011 vs. 2010
Same Store Results/Statistics
$ in thousands (except for Average Rental Rate) – 101,312 Same Store Apartment Units
             
  Results Statistics
        
Average
Rental
Rate (1)
    
Description Revenues Expenses NOI  Occupancy Turnover
2011 $1,712,428
 $617,712
 $1,094,716
 $1,481
 95.2% 57.8%
2010 $1,630,482
 $614,210
 $1,016,272
 $1,417
 94.8% 56.9%
Change $81,946
 $3,502
 $78,444
 $64
 0.4% 0.9%
Change 5.0% 0.6% 7.7% 4.5%  
  
2013 vs. 2012
Same Store Results/Statistics for 80,247 Same Store Apartment Units
$ in thousands (except for Average Rental Rate)
             
  Results Statistics
        
Average
Rental
Rate (1)
    
Description Revenues Expenses NOI  Occupancy Turnover
2013 $1,769,280
 $607,243
 $1,162,037
 $1,926
 95.4% 55.6%
2012 $1,693,239
 $587,037
 $1,106,202
 $1,846
 95.3% 56.3%
Change $76,041
 $20,206
 $55,835
 $80
 0.1% (0.7%)
Change 4.5% 3.4% 5.0% 4.3%    

(1)Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period.
The following table provides comparative same store operating expenses for the 20112013 Same Store Properties:

2011 vs. 2010
Same Store Operating Expenses
$ in thousands – 101,312 Same Store Apartment Units
2013 vs. 20122013 vs. 2012
Same Store Operating Expenses for 80,247 Same Store Apartment UnitsSame Store Operating Expenses for 80,247 Same Store Apartment Units
$ in thousands$ in thousands
         % of Actual
2013
Operating
Expenses
         
           Actual
2013
 Actual
2012
 $
Change
 %
Change
 
 Actual
2011
 Actual
2010
 $
Change
 %
Change
 % of Actual
2011
Operating
Expenses
 
Real estate taxes $169,432
 $166,675
 $2,757
 1.7% 27.4% $200,315
 $185,646
 $14,669
 7.9% 33.0%
On-site payroll (1) 144,346
 144,878
 (532) (0.4%) 23.4% 129,543
 127,198
 2,345
 1.8% 21.3%
Utilities (2) 96,702
 95,083
 1,619
 1.7 % 15.7% 89,941
 86,326
 3,615
 4.2% 14.8%
Repairs and maintenance (3) 89,549
 89,128
 421
 0.5 % 14.5% 82,280
 78,729
 3,551
 4.5% 13.6%
Property management costs (4) 68,497
 65,219
 3,278
 5.0 % 11.1% 58,386
 63,496
 (5,110) (8.0%) 9.6%
Insurance 19,394
 20,605
 (1,211) (5.9%) 3.1% 19,585
 18,427
 1,158
 6.3% 3.2%
Leasing and advertising 11,515
 14,266
 (2,751) (19.3%) 1.9% 9,486
 9,225
 261
 2.8% 1.6%
Other on-site operating expenses (5) 18,277
 18,356
 (79) (0.4%) 2.9% 17,707
 17,990
 (283) (1.6%) 2.9%
Same store operating expenses $617,712
 $614,210
 $3,502
 0.6 % 100.0% $607,243
 $587,037
 $20,206
 3.4 % 100.0%

(1)On-site payroll – Includes payroll and related expenses for on-site personnel including property managers, leasing consultants and maintenance staff.
(2)Utilities – Represents gross expenses prior to any recoveries under the Resident Utility Billing System (“RUBS”). Recoveries are reflected in rental income.
(3)Repairs and maintenance – Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs.
(4)Property management costs – Includes payroll and related expenses for departments, or portions of departments, that directly support on-site management. These include such departments as regional and corporate property management, property accounting, human resources, training, marketing and revenue management, procurement, real estate tax, property legal services and information technology.
(5)Other on-site operating expenses – Includes ground lease costs and administrative costs such as office supplies, telephone and data charges and association and business licensing fees.

Non-same store operating results increased approximately $110.7$377.3 million and consist primarily of properties acquired in calendar years 20102012 and 2011,2013, as well as operations from the Company'sCompany’s completed development properties. Although the operations of both the non-same store assets and the same store assets have been positively impacted during the year ended December 31, 2011,2013, the non-same store assets have contributed a greater percentage of total NOI to the Company'sCompany’s overall operating results primarily due to 20102012 and 20112013 acquisitions, increasing occupancy for properties in lease-up and a longer ownership period in 20112013 than 2010.2012. This increase primarily resulted from:

Development and other miscellaneous properties in lease-up of $39.1 million;
$7.2 million;
Operating properties acquired in 2013 as part of the Archstone Transaction of $346.0 million;
Other properties acquired in 2012 and 2013 of $23.7 million;

5048



Properties acquired in 2010 and 2011 of $53.1 million; and
Newly stabilized development and other miscellaneous properties of $3.0 million.
$5.5 million; and
Partially offset by an allocation of property management costs not included in same store results and operating activities from other miscellaneous operations.
See also Note 17 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company's segment disclosures.

Fee and asset management revenues, net of fee and asset management expenses, increaseddecreased approximately $0.3$1.7 million or 6.0%34.1% primarily due to revenues earned on managementas a result of the Company's unconsolidated development joint ventures, an increase inhigher expenses and lower revenue earned on management of the Company's military housing ventures at Fort Lewis and McChord Air Force Base, and lower expenses, partially offset by fees earned on management of the unwinding of four institutionalCompany’s unconsolidated development joint ventures during 2010.ventures.

Property management expenses from continuing operations include off-site expenses associated with the self-management of the Company'sCompany’s properties as well as management fees paid to any third party management companies. These expenses increased approximately $2.0$2.4 million or 2.5%3.0%. This increase is primarily attributable to an increase in payroll-related costs which is largely a resultand an increase in computer operations due to the modernization of employee technology, partially offset by the creationtiming of the Company's central business group, which moved administrative functions off-site, and increases in legal and professional fees and education/conference expenses.fees.

Depreciation expense from continuing operations, which includes depreciation on non-real estate assets, increased approximately $31.1$418.3 million or 5.4%74.6% primarily as a result of additional depreciation expense on properties acquired in 20112013 (including the Archstone properties), development properties placed in service and capital expenditures for all properties owned, partially offset by a decrease in the amortization of furniture, fixtures and equipment that were fully depreciated. In-place residential lease intangibles are generally amortized over a six month period and can significantly elevate depreciation expense following an acquisition, especially during 2013 as a direct result of the Archstone Acquisition.

General and administrative expenses from continuing operations, which include corporate operating expenses, increased approximately $3.7$14.9 million or 9.3%31.6% primarily due to an increase in payroll-related costs, which is largely a result of the acceleration ofhigher and accelerated long-term compensation expense for retirement eligible employees.employees and higher compensation related to the Archstone Transaction, as well as an increase in office rent.

Impairment from continuing operations decreased approximately $45.4 million due to an impairment charge taken during the fourth quarter of 2010 on land held for development related to two potential development projects that did not reoccur in 2011. See Note 18 in the Notes to Consolidated Financial Statements for further discussion.

Interest and other income from continuing operations increased approximately $2.8decreased $145.8 million or 55.6%96.5% primarily as a result of interest earned on cash and cash equivalents due to larger overall cash balances during the year ended December 31, 2011 as compared to the same periodCompany recognizing $150.0 million in 2010, forfeited deposits for terminated disposition transactions and proceeds received from the Company's final royalty participation in LRO/Rainmaker (a revenue management system), partially offset by insurance/litigation settlement proceeds that occurredArchstone-related termination fees during the year ended December 31, 20102012, partially offset by proceeds received from the sale of investment securities and did not reoccurtechnology investments during the year ended December 31, 2011.2013.

Other expenses from continuing operations, which includes direct costs incurred from the Archstone Acquisition such as investment banking and legal/accounting costs, increased approximately $2.5$1.8 million or 21.2% primarily due to an increase in6.6% as a result of the closing of the Archstone Acquisition during the year ended December 31, 2013, partially offset by lower property acquisitionpursuit costs incurred in conjunction withas the Company's 2011 acquisitions as well as transaction costs related to theCompany focused on its pursuit of Archstone.

Interest expense from continuing operations, including amortization of deferred financing costs, increased approximately $10.7$132.5 million or 2.3%27.8% primarily as a result of a full yearthe following:

$121.7 million of costs incurred on early debt extinguishments in 2013 on existing mortgage notes payable to manage the Company's post Archstone 2017 maturities profile;
Interest expense on the Company's $750.0 million delayed draw term loan facility which was fully drawn on February 27, 2013; and
Interest expense on $500.0 million of unsecured notes that closed in April 2013.
The above increases to interest expense on the $600.0 million of unsecured notes that closed in July 2010 and interest expense on forward starting swaps terminated in conjunction with the issuance of $1.0 billion of unsecured notes,were partially offset by lower interest expense on mortgage notes payable due to lower balances during the year ended December 31, 2011 as compared to the same period in 2010. following:
Higher capitalized interest in 2013 (see below);
The repayment of $253.9 million of 6.625% unsecured notes in March 2012;
The repayment of $221.1 million of 5.500% unsecured notes in October 2012;
The repayment of a $543.0 million mortgage pool in March 2013;
The repayment of $400.0 million of 5.200% unsecured notes in April 2013;
The repayment of $963.5 million of 5.883% Pool 4 mortgage debt in October 2013; and
The partial paydown of $825.0 million of 6.256% Pool 3 mortgage debt in October 2013.

During the year ended December 31, 2011,2013, the Company capitalized interest costs of approximately $9.1$47.3 million as compared to $13.0$22.5 million for the year ended December 31, 2010.2012. This capitalization of interest primarily relates to consolidated

49



projects under development. The effective interest cost on all indebtedness for the year ended December 31, 20112013 was 5.30%4.91% (excluding $107.6 million in net debt extinguishment costs) as compared to 5.14%5.37% for the year ended December 31, 2010.2012.

Income and other tax expense from continuing operations increased approximately $0.4$0.7 million primarily due to Tennesseeincreases in taxes related to land parcel sales owned by the Company's TRS as well as increases in all other taxes.

Loss from investments in unconsolidated entities, which includes indirect costs incurred from the Archstone Acquisition through the Company's joint ventures with AVB, increased by $58.1 million primarily as a result of severance obligations and Texas franchise tax refunds receivedretention bonuses in connection with the Archstone Acquisition through our 60% interest in unconsolidated joint ventures as well as the gain on sale of one unconsolidated land parcel during the year ended December 31, 2010 that did not reoccur2013 as compared to no sales during the year ended December 31, 2011, partially offset by decreases in all other taxes.

Loss from investments in unconsolidated entities decreased approximately $0.7 million compared to the year ended December 31, 2010 primarily due to the unwinding of four institutional joint ventures during 2010.

Net gain on sales of unconsolidated entities decreased approximately $28.1 million primarily due to the gain on sale and revaluation of seven previously unconsolidated properties that were acquired from the Company's joint venture partner and the

51


gain on sale for 27 unconsolidated properties that occurred during the year ended December 31, 2010 that did not reoccur during the year ended December 31, 2011.2012.

Net gain on sales of land parcels increased approximately $5.6$12.2 million primarily due to the gain on sale of aseven land parcel located in suburban Washington, D.C.parcels during the year ended December 31, 2011 and a loss on sale of a2013 as compared to no land parcelsales during the same period in 2010.year ended December 31, 2012.

Discontinued operations, net increased approximately $478.3 million$1.4 billion between the periods under comparison. This increase is primarily due to higher gains on sales from property salesdispositions during the year ended December 31, 20112013 compared to the same period in 2010,2012, partially offset by properties sold in 2011 which2013 that reflect operations for none of or a partial period in 20112013 in contrast to a full or partial period in 2010.2012. See Note 11 in the Notes to Consolidated Financial Statements for further discussion.

Liquidity and Capital Resources
For the Year Ended December 31, 2012
EQR issues public equity from time to time and guarantees certain debt of ERPOP. EQR does not have any indebtedness as all debt is incurred by the Operating Partnership.
As of January 1, 20122014, the Company had approximately $383.953.5 million of cash and cash equivalents its restricted 1031 exchange proceeds totaled $53.7 millionand it had $1.22$2.35 billion available under its revolving credit facility (net of $31.8$34.9 million which was restricted/dedicated to support letters of credit)credit and net of $115.0 million outstanding). After taking into effect the various transactions discussed in the following paragraphs and the net cash provided by operating activities, the Company’s cash and cash equivalents balance at December 31, 20122014 was approximately $612.6$40.1 million, its restricted 1031 exchange proceeds totaled $152.2 million and the amount available on its revolving credit facility was $1.72$2.12 billion (net of $30.2$43.8 million which was restricted/dedicated to support letters of credit)credit and net of $333.0 million outstanding).

During the year ended December 31, 20122014, the Company generated proceeds from various transactions, which included the following:

Disposed of 35ten consolidated properties and three land parcels, receiving net proceeds of approximately $1.0 billion;
$522.6 million;
Obtained $26.5Issued $450.0 million in new mortgage financing;of five-year 2.375% fixed rate public notes, receiving net proceeds of $449.6 million before underwriting fees and other expenses, at an all-in effective interest rate of 2.52%;
Issued $750.0 million of thirty-year 4.50% fixed rate public notes, receiving net proceeds of $744.7 million before underwriting fees, hedge termination costs and other expenses, at an all-in effective interest rate of 4.57%;
Received approximately $79.6 million representing the Company's pro rata share of the proceeds/distributions that have been repatriated to the Residual JV as a result of the disposition of the German portfolio fund, the German management company and the remaining wholly-owned German real estate assets that were acquired by the Residual JV as part of the Archstone Acquisition (see Note 6);
Received approximately $20.3 million for the sale of one unconsolidated property in which the Company had an 85% interest; and
Issued approximately 26.72.2 million Common Shares (including Common Shares issued in a public equity offering in November/December 2012related to share option exercises and under the ATM program – see further discussion below)ESPP purchases and received net proceeds of $1.4 billion,$86.0 million, which were contributed to the capital of the Operating Partnership in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis); and
Collected $150.0 million in termination fees relating to the pursuit of Archstone..

During the year ended December 31, 20122014, the above proceeds along with net cash flow from operations and availability on the Company's revolving line of credit were primarily utilized to:

Acquire ninesix rental properties, and sixtwo land parcels and additional development rights at one of its existing land sites for approximately $844.0$470.0 million;
Acquire its partner's 95% interest in one previously unconsolidated property for cash consideration of approximately $44.8 million;
Invest $180.4$530.4 million primarily in development projects;

50



Repay $100.7 million of mortgage loans;
Repay $364.3its $750.0 million of mortgage loans and $976.0 million of unsecured notes; and
term loan facility in conjunction with the note issuances discussed above;
Redeem its Series N PreferredRepay $500.0 million of 5.250% unsecured notes at maturity; and
Repurchase 31,240 Common Shares, at its liquidation valueutilizing cash of $150.0 million.$1.8 million (see Note 3).

On November 28, 2012, EQR pricedFebruary 27, 2013, the issuance of 21,850,000Company issued 34,468,085 Common Shares atto an affiliate of Lehman Brothers Holdings Inc. as partial consideration for the portion of the Archstone Portfolio acquired by the Company. The shares had a total value of $1.9 billion based on the February 27, 2013 closing price of $54.75EQR Common Shares of $55.99 per share for total consideration of approximately $1.2 billion, after deducting underwriting commissions of $35.9 million.share. Concurrent with the closing of this transaction, ERPOP issued 21,850,00034,468,085 OP Units to EQR. On March 7, 2013, EQR filed a shelf registration statement relating to the resale of these shares by the selling shareholders. Lehman has since sold all of these Common Shares.

In September 2009, EQR announced the establishment of an At-The-Market (“ATM”) share offering program which would allow EQR to sell up to 17.0 millionCommon Shares from time to time over the next three years (later increased by 5.7 million Common Shares and extended to February 2014) into the existing trading market at current market prices as well as through negotiated transactions. Per the terms of ERPOP'sERPOP’s partnership agreement, EQR contributes the net proceeds from all equity offerings to the capital of ERPOP in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis). EQR may, but shall have no obligation to, sell Common Shares through the ATM share offering program in amounts and at times to be determined by EQR. Actual sales will depend on a variety of factors to be determined by EQR from time to time, including (among others) market conditions, the trading price of EQR'sEQR’s Common Shares and determinations of the appropriate sources of funding for EQR. DuringOn July 30, 2013, the year ended December 31, 2012, EQR issued approximately 3.2Board of Trustees approved an increase to the amount of shares which be may offered under the ATM program to 13.0 million Common Shares at an average price of $60.59 per share for total consideration of approximately $192.3 million throughand extended the ATM program. During the year ended

52


December 31, 2011,program maturity to July 2016. EQR has not issued approximately 3.9 million Common Shares at an average price of $52.23 per share for total consideration of approximately $201.9 million through the ATM program. During the year ended December 31, 2010, EQR issued approximately 6.2 million Common Shares at an average price of $47.45 per share for total consideration of approximately $291.9 million through the ATM program.any shares under this program since September 14, 2012.  Through February 15, 2013,20, 2015, EQR has cumulatively issued approximately 16.7 million Common Shares at an average price of $48.53 per share for total consideration of approximately $809.9 million. EQR has 6.0 million Common Shares remaining available for issuance under the ATM program as of February 15, 2013.
On June 16, 2011, the shareholders of EQR approved the Company's 2011 Share Incentive Plan, as amended (the “2011 Plan”). The 2011 Plan reserved 12,980,741 Common Shares for issuance. In conjunction with the approval of the 2011 Plan, no further awards may be granted under the 2002 Share Incentive Plan. The 2011 Plan expires on June 16, 2021. See Note 12 in the Notes to Consolidated Financial Statements for further discussion.
Depending on its analysis of market prices, economic conditions and other opportunities for the investment of available capital, EQR may repurchase its Common Shares pursuant to its existing share repurchase program authorized by the Board of Trustees. Effective July 30, 2013, the Board of Trustees approved an increase and modification to the Company's share repurchase program to allow for the potential repurchase of up to 13.0 million shares. EQR repurchased approximately $1.8 million (31,240 shares at a price of $56.87 per share) of its Common Shares (all related to the vesting of employees' restricted shares) during the year ended December 31, 2014. No open market repurchases have occurred since 2008. As of February 15, 2013,20, 2015, EQR hadhas remaining authorization to repurchase an additional $464.6 million12,968,760 of its shares. No shares were repurchased during 2012. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.

Depending on its analysis of prevailing market conditions, liquidity requirements, contractual restrictions and other factors, the Company may from time to time seek to repurchase and retire its outstanding debt in open market or privately negotiated transactions.

The Company’s total debt summary and debt maturity schedules as of December 31, 20122014 are as follows:
Debt Summary as of December 31, 2012
(Amounts in thousands)

  Amounts (1) % of Total 
Weighted
Average
Rates (1)
 
Weighted
Average
Maturities
(years)
Secured $3,898,369
 45.7% 4.96% 7.3
Unsecured 4,630,875
 54.3% 5.10% 5.1
Total $8,529,244
 100.0% 5.04% 6.1
Fixed Rate Debt:  
  
  
  
Secured – Conventional $3,517,273
 41.2% 5.49% 6.2
Unsecured – Public/Private 4,329,352
 50.8% 5.70% 5.4
Fixed Rate Debt 7,846,625
 92.0% 5.61% 5.8
Floating Rate Debt:  
  
  
  
Secured – Conventional 30,516
 0.4% 3.25% 1.8
Secured – Tax Exempt 350,580
 4.1% 0.23% 19.7
Unsecured – Public/Private 301,523
 3.5% 1.83% 0.2
Unsecured – Revolving Credit Facility 
 
 1.35% 1.5
Floating Rate Debt 682,619
 8.0% 1.35% 9.8
Total $8,529,244
 100.0% 5.04% 6.1

(1)
Net of the effect of any derivative instruments. Weighted average rates are for the year ended December 31, 2012.

Note: The Company capitalized interest of approximately $22.5 million and $9.1 million during the years ended December 31, 2012 and 2011, respectively.











5351




Debt Summary as of December 31, 2014
(Amounts in thousands)
  Amounts (1) % of Total 
Weighted
Average
Rates (1)
 
Weighted
Average
Maturities
(years)
Secured $5,086,515
 46.9% 4.21% 7.5
Unsecured 5,758,346
 53.1% 4.79% 7.7
Total $10,844,861
 100.0% 4.52% 7.6
Fixed Rate Debt:  
  
    
Secured – Conventional $4,351,301
 40.1% 4.82% 5.9
Unsecured – Public 4,974,154
 45.9% 5.45% 8.3
Fixed Rate Debt 9,325,455
 86.0% 5.15% 7.2
Floating Rate Debt:  
  
  
  
Secured – Conventional 7,985
 0.1% 2.08% 19.1
Secured – Tax Exempt 727,229
 6.7% 0.66% 16.2
Unsecured – Public (2) 451,192
 4.1% 1.15% 4.5
Unsecured – Revolving Credit Facility 333,000
 3.1% 0.95% 3.3
Floating Rate Debt 1,519,406
 14.0% 0.92% 9.9
Total $10,844,861
 100.0% 4.52% 7.6

(1)Net of the effect of any derivative instruments. Weighted average rates are for the year ended December 31, 2014.
(2)Fair value interest rate swaps convert the $450.0 million 2.375% notes due July 1, 2019 to a floating interest rate of 90-Day LIBOR plus 0.61%.
Note: The Company capitalized interest of approximately $52.8 million and $47.3 million during the years ended December 31, 2014 and 2013, respectively.

Debt Maturity Schedule as of December 31, 20122014
(Amounts in thousands)
 
Fixed
Rate (1)
 
Floating
Rate (1)
     
Weighted Average Rates
on Fixed
 Rate Debt (1)
 
Weighted Average
Rates on
 Total Debt (1)
 
Fixed
Rate (1)
 
Floating
Rate (1)
     
Weighted Average Rates
on Fixed
 Rate Debt (1)
 
Weighted Average
Rates on
 Total Debt (1)
Year  Total % of Total   Total % of Total 
2013 $224,277
 $302,033

$526,310
 6.2% 6.93% 4.79%
2014 564,302
 22,021
  586,323
 6.9% 5.31% 5.24%
2015 417,812
 

417,812
 4.9% 6.30% 6.30% $408,420
 $
 $408,420
 3.8% 6.32% 6.32%
2016 1,190,538
 
 1,190,538
 14.0% 5.34% 5.34% 1,192,798
 
 1,192,798
 11.0% 5.34% 5.34%
2017 1,446,120
 456
 1,446,576
 17.0% 5.95% 5.95% 1,346,252
 456
 1,346,708
 12.4% 6.16% 6.16%
2018 81,450
 724
 82,174
 1.0% 5.70% 5.70% 83,851
 430,659
(2)514,510
 4.7% 5.61% 1.72%
2019 802,640
 20,766
 823,406
 9.6% 5.49% 5.36% 806,106
 472,363
 1,278,469
 11.8% 5.48% 3.76%
2020 1,672,482
 809
 1,673,291
 19.6% 5.50% 5.50% 1,678,020
 809
 1,678,829
 15.5% 5.49% 5.49%
2021 1,188,905
 856
 1,189,761
 13.9% 4.64% 4.64% 1,194,624
 856
 1,195,480
 11.0% 4.63% 4.63%
2022 2,401
 905
 3,306
 
 5.81% 5.74% 228,273
 905
 229,178
 2.1% 3.16% 3.17%
2023+ 231,464
 337,699
 569,163
 6.7% 6.76% 3.29%
2023 1,331,497
 956
 1,332,453
 12.3% 3.74% 3.74%
2024 2,497
 1,011
 3,508
 
 4.97% 5.14%
2025+ 1,022,417
 673,977
 1,696,394
 15.7% 4.97% 3.17%
Premium/(Discount) 24,234
 (3,650) 20,584
 0.2% N/A
 N/A
 30,700
 (62,586) (31,886) (0.3%) N/A
 N/A
                        
Total $7,846,625
 $682,619
 $8,529,244
 100.0% 5.54% 5.25% $9,325,455
 $1,519,406
 $10,844,861
 100.0% 5.13% 4.49%

(1)
Net of the effect of any derivative instruments. Weighted average rates are as of December 31, 20122014.
(2)Includes $333.0 million outstanding on the Company's unsecured revolving credit facility. As of December 31, 2014, there was approximately $2.12 billion available on this facility.
The following table provides a summary of the Company’s unsecured debt as of December 31, 20122014:





52



Unsecured Debt Summary as of December 31, 20122014
(Amounts in thousands)

 Coupon
Rate
 Due
Date
 Face
Amount
 Unamortized
Premium/
(Discount)
 Net
Balance
 Coupon
Rate
 Due
Date
 Face
Amount
 Unamortized
Premium/
(Discount)
 Net
Balance
Fixed Rate Notes:                    
 5.200% 04/01/13(1)$400,000
 $(30) $399,970
 6.584% 04/13/15 $300,000
 $(27) $299,973
Fair Value Derivative Adjustments     (1)(300,000) 
 (300,000)
 5.250% 09/15/14 500,000
 (105) 499,895
 5.125% 03/15/16 500,000
 (63) 499,937
 6.584% 04/13/15 300,000
 (248) 299,752
 5.375% 08/01/16 400,000
 (294) 399,706
 5.125% 03/15/16 500,000
 (170) 499,830
 5.750% 06/15/17 650,000
 (1,272) 648,728
 5.375% 08/01/16 400,000
 (665) 399,335
 7.125% 10/15/17 150,000
 (181) 149,819
 2.375% 07/01/19(1)450,000
 (405) 449,595
Fair Value Derivative Adjustments (1)(450,000) 405
 (449,595)
 5.750% 06/15/17 650,000
 (2,289) 647,711
 4.750% 07/15/20 600,000
 (2,518) 597,482
 7.125% 10/15/17 150,000
 (311) 149,689
 4.625% 12/15/21 1,000,000
 (2,635) 997,365
 4.750% 07/15/20 600,000
 (3,433) 596,567
 3.000% 04/15/23 500,000
 (3,671) 496,329
 4.625% 12/15/21 1,000,000
 (3,397) 996,603
 7.570% 08/15/26 140,000
 
 140,000
 7.570% 08/15/26 140,000
 
 140,000
 4.500% 07/01/44 750,000
 (5,185) 744,815
 4,340,000
 (10,648) 4,329,352
 4,990,000
 (15,846) 4,974,154
Floating Rate Notes:            
 04/01/13(1)300,000
 
 300,000
 07/01/19(1)450,000
 (405) 449,595
Fair Value Derivative Adjustments     (1)1,523
 
 1,523
 07/01/19(1)1,597
 
 1,597
 301,523
 
 301,523
 451,597
 (405) 451,192
Revolving Credit Facility: LIBOR+1.15% 7/13/2014(2)(3) 
 
 
 LIBOR+1.05% 04/01/18(2)(3) 333,000
 
 333,000
Total Unsecured Debt $4,641,523
 $(10,648) $4,630,875
 $5,774,597
 $(16,251) $5,758,346

(1)Fair value interest rate swaps convert $300.0the $450.0 million of the 5.200%2.375% notes due AprilJuly 1, 20132019 to a floating interest rate.rate of 90-Day LIBOR plus 0.61%.
(2)Facility is private. All other unsecured debt is public.
(3)As of December 31, 2012, there was approximately $1.72 billion available onRepresents the Company's unsecured revolving credit facility. On January 11, 2013, the Company replaced its existing $1.75 billion facility with a new $2.5 billion unsecured revolving credit facility maturing April 1, 2018. The interest rate on advances under the credit facility will generally be LIBOR plus a spread (currently 1.05%) and an annual facility fee (currently 15 basis points). Both the spread and the facility fee are dependent on the credit rating of the Company's long-term debt. As of December 31, 2014, there was approximately $2.12 billion available on this facility.

54


maturing April 1, 2018. The interest rate on advances underEQR and ERPOP currently have an active universal shelf registration statement for the new credit facility will be LIBOR plus a spread (currently 1.05%) and an annual facility fee (currently 15 basis points). Both the spread and the facility fee are dependent on the credit rating of the Company's long-term debt. As of January 31, 2013, there was approximately $2.47 billion available on the Company's unsecured revolving credit facility.

Note: In October 2012, the Company paid off the $222.1 million outstanding of its 5.500% public notes and its $500.0 million term loan facility, both at maturity.
An unlimited amountissuance of equity and debt securities remains available for issuance by EQR and ERPOP under a universal shelf registration statement that automatically became effective upon filing with the SEC in October 2010on July 30, 2013 and expires on October 15, 2013. However, asJuly 30, 2016. In July 2013, the Board of February 15, 2013, issuancesTrustees also approved an increase to the amount of shares which may be offered under the ATM share offering program are limited to 6.013.0 million additional shares. Common Shares and extended the program maturity to July 2016. Per the terms of ERPOP'sERPOP’s partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of ERPOP 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).
The Company’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 20122014 is presented in the following table. The Company calculates the equity component of its market capitalization as the sum of (i) the total outstanding Common Shares and assumed conversion of all Units at the equivalent market value of the closing price of the Company’s Common Shares on the New York Stock Exchange and (ii) the liquidation value of all perpetual preferred shares outstanding.
















53



Equity Residential
Capital Structure as of December 31, 20122014
(Amounts in thousands except for share/unit and per share amounts)
Secured Debt  
  
 $3,898,369
 45.7%  
  
  
 $5,086,515
 46.9%  
Unsecured Debt  
  
 4,630,875
 54.3%  
  
  
 5,758,346
 53.1%  
Total Debt  
  
 8,529,244
 100.0% 30.7%  
  
 10,844,861
 100.0% 28.5%
Common Shares (includes Restricted Shares) 325,054,654
 95.9%  
  
  
 362,855,454
 96.2%  
  
  
Units (includes OP Units and LTIP Units) 13,968,758
 4.1%  
  
  
Units (includes OP Units and restricted units) 14,298,691
 3.8%  
  
  
Total Shares and Units 339,023,412
 100.0%  
  
  
 377,154,145
 100.0%  
  
  
Common Share Price at December 31, 2012 $56.67
    
  
  
Common Share Price at December 31, 2014 $71.84
    
  
  
  
  
 19,212,457
 99.7%  
  
  
 27,094,754
 99.8%  
Perpetual Preferred Equity (see below)  
  
 50,000
 0.3%  
  
  
 50,000
 0.2%  
Total Equity  
  
 19,262,457
 100.0% 69.3%  
  
 27,144,754
 100.0% 71.5%
Total Market Capitalization  
  
 $27,791,701
   100.0%  
  
 $37,989,615
   100.0%

Equity Residential
Perpetual Preferred Equity as of December 31, 20122014
(Amounts in thousands except for share and per share amounts)
Series 
Redemption
Date
 
Outstanding
 Shares
 
Liquidation
Value
 
Annual
Dividend
 Per Share
 
Annual
Dividend
 Amount
     
Preferred Shares:          
8.29% Series K 12/10/26 1,000,000
 $50,000
 $4.145
 $4,145
Total Perpetual Preferred Equity   1,000,000
 $50,000
   $4,145

On August 20, 2012, the Company redeemed its Series N Cumulative Redeemable Preferred Shares for cash consideration of $150.0 million plus accrued dividends through the redemption date. As a result of this redemption, the Company recorded the write-off of approximately $5.1 million in original issuance costs as a premium on the redemption of Preferred Shares.

The Operating Partnership'sPartnership’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 20122014 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 Units at the equivalent market value of the closing price of the Company'sCompany’s Common Shares on the New York Stock Exchange and (ii) the liquidation value of all perpetual preference units outstanding.






55





ERP Operating Limited Partnership
Capital Structure as of December 31, 20122014
(Amounts in thousands except for unit and per unit amounts)
Secured Debt  
   $3,898,369
 45.7%  
  
   $5,086,515
 46.9%  
Unsecured Debt  
   4,630,875
 54.3%  
  
   5,758,346
 53.1%  
Total Debt  
   8,529,244
 100.0% 30.7%  
   10,844,861
 100.0% 28.5%
Total outstanding Units 339,023,412
  
  
  
 377,154,145
  
  
  
Common Share Price at December 31, 2012 $56.67
    
  
  
Common Share Price at December 31, 2014 $71.84
    
  
  
  
   19,212,457
 99.7%  
  
   27,094,754
 99.8%  
Perpetual Preference Units (see below)  
   50,000
 0.3%  
  
   50,000
 0.2%  
Total Equity  
   19,262,457
 100.0% 69.3%  
   27,144,754
 100.0% 71.5%
Total Market Capitalization  
   $27,791,701
   100.0%  
   $37,989,615
   100.0%


ERP Operating Limited Partnership
Perpetual Preference Units as of December 31, 20122014
(Amounts in thousands except for unit and per unit amounts)
Series 
Redemption
 Date
 
Outstanding
 Units
 Liquidation Value 
Annual
Dividend
 Per Unit
 
Annual
Dividend
 Amount
     
Preference Units:    
  
  
  
8.29% Series K 12/10/26 1,000,000
 $50,000
 $4.145
 $4,145
Total Perpetual Preference Units   1,000,000
 $50,000
   $4,145


On August 20, 2012, the Operating Partnership redeemed its Series N Cumulative Redeemable Preference Units for cash consideration
54



The Company generally expects to meet its short-term liquidity requirements, including capital expenditures related to maintaining its existing properties and scheduled unsecured note and mortgage note repayments, through its working capital, net cash provided by operating activities and borrowings under the Company'sCompany’s revolving credit facility.facility and commercial paper program. Under normal operating conditions, the Company considers its cash provided by operating activities to be adequate to meet operating requirements and payments of distributions.
During the fourth quarter of 2010, the
The Company announcedhas a newflexible dividend policy which it believes will generate payouts more closely aligned with the actual annual operating results of the Company’s core business and provide transparency to investors. Beginning in 2014, the Company began paying its annual dividend based on 65% of the midpoint of the range of Normalized FFO guidance customarily provided as part of the Company's fourth quarter earnings release. The Company's 2014 annual dividend payout was $2.00 per share and the Company paid four quarterly dividends of $0.50 per share in 2014. The Company expects the 2015 annual dividend payout will be $2.21 per share and the Company intends to pay an annual cash dividend equal to approximately 65%four quarterly dividends of Normalized FFO for the year. During the year ended December 31, 2012, the Company paid $0.3375$0.5525 per share for each of the first three quarters and $0.7675 per share for the fourth quarter to bring the total payment for the year (an annual rate of $1.78 per share) to approximately 65% of Normalized FFO. The Company expects to pay $0.40 per share for each of the first three quarters of 2013. This represents an increase from the $0.3375 per share paid in each of the first three quarters of 2012. The Company anticipates the expected dividend payout will range from $1.82 to $1.89 per share ($0.40 per share for each of the first three quarters with the balance for the fourth quarter) for the year ending December 31, 2013.2015. All future dividends remain subject to the discretion of the Board of Trustees. The above assumption is based on current expectations and is forward-looking. While our current dividend policy makes it less likely we will over distribute, it will also lead to a dividend reduction more quickly than a fixed dividend policy should operating results deteriorate. However, whether due to changes in the dividend policy or otherwise, there may be times when the Company experiences shortfalls in its coverage of distributions, which may cause the Company to consider reducing its distributions and/or using the proceeds from property dispositions or additional financing transactions to make up the difference. Should these shortfalls occur for lengthy periods of time or be material in nature, the Company's financial condition may be adversely affected and it may not be able to maintain its current distribution levels. The Company believes that its expected 20132015 operating cash flow will be sufficient to cover capital expenditures and distributions.

The Company also expects to meet its long-term liquidity requirements, such as scheduledlump sum unsecured note and mortgage debt maturities, property acquisitions, financing of construction and development activities and capital improvements through the issuance of secured and unsecured debt and equity securities, including additional OP Units, and proceeds received from the

56


disposition of certain properties and joint ventures.ventures and cash generated from operations after all distributions. In addition, the Company 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 properties are in excess of the requirements the Company must maintain in order to comply with covenants under its unsecured notes and line of credit. Of the $21.0$27.7 billion in investment in real estate on the Company’s balance sheet at December 31, 2012, $15.12014, $19.1 billion or 71.6%69.1% was unencumbered. However, there can be no assurances that these sources of capital will be available to the Company in the future on acceptable terms or otherwise.
ERPOP's
As of February 20, 2015, ERPOP’s long-term credit ratings from Standard & Poor’s (“S&P”), Moody’s and Fitch for its outstanding senior debt arewas BBB+ (positive outlook), BaalBaa1 (positive outlook) and BBB+, respectively. EQR'sAs of February 20, 2015, EQR’s long-term equity ratings from S&P, Moody’s and Fitch for its outstanding preferred equity arewas BBB+ (positive outlook), Baa2 (positive outlook) and BBB-, respectively. Following the announcementAs of the Archstone transaction in November 2012,February 20, 2015, ERPOP's short-term credit ratings from S&P, Moody's and Fitch placed EQR'sfor its outstanding commercial paper was A-2, P-2 and ERPOP's ratings on negative watch.F-2, respectively. EQR does not have short-term credit ratings.
In July 2011, the Company replaced its then existing unsecured revolving credit facility with a new $1.25 billion unsecured revolving credit facility maturing on July 13, 2014, subject to a one-year extension option exercisable by the Company. The interest rate on advances under the credit facility was generally LIBOR plus a spread (1.15%) and the Company paid an annual facility fee of 0.2%. Both the spread and the facility fee were dependent on the credit rating of the Company's long term debt. Effective January 6, 2012, the Company amended this facility to increase available borrowings by $500.0 million to $1.75 billion. The terms did not change, including the July 13, 2014 maturity date.
On January 11, 2013, the Company replaced its existing $1.75 billion credit facility with a new $2.5 billion unsecured revolving credit facility maturing April 1, 2018. The Company has the ability to increase available borrowings by an additional $500.0 million by adding additional banks to the facility or obtaining the agreement of existing banks to increase their commitments. The interest rate on advances under the new credit facility will generally be LIBOR plus a spread (currently 1.05%) and the Company pays an annual facility fee (currently 15 basis points). Both the spread and the facility fee are dependent on the credit rating of the Company'sCompany’s long-term debt. As of February 15, 2013,20, 2015, there was available borrowings of $2.47$1.94 billion on the revolving credit facility (net of $30.2$43.8 million which was restricted/dedicated to support letters of credit)credit, net of $300.0 million outstanding on the new revolving credit facility.facility and net of $220.0 million outstanding on the commercial paper program) (see Note 18 in the Notes to Consolidated Financial Statements for additional discussion of the commercial paper program). This facility may, among other potential uses, be used to fund property acquisitions, (including Archstone), costs for certain properties under development and short-term liquidity requirements.
In 2010, a portion of the parking garage collapsed at one of the Company’s rental properties (Prospect Towers in Hackensack, New Jersey). The costs related to the collapse (both expensed and capitalized), including providing for residents' interim needs, lost revenue and garage reconstruction, were approximately $22.8 million, before insurance reimbursements of $13.6 million. The garage has been rebuilt with cumulative costs approximating $13.3 million capitalized as incurred. Other costs approximating $9.5 million, like those to accommodate displaced residents, lost revenue due to a portion of the property being temporarily unavailable for occupancy and legal costs, reduced earnings as they were incurred. Generally, insurance proceeds were recorded as increases to earnings as they were received. During the year ended December 31, 2012, the Company received approximately $3.5 million in insurance proceeds (included in real estate taxes and insurance on the consolidated statements of operations), which represented its final reimbursement of the $13.6 million in cumulative insurance proceeds. During the year ended December 31, 2011, the Company received approximately $6.1 million in insurance proceeds which offset expenses of $1.7 million. During the year ended December 31, 2010, the Company received approximately $4.0 million in insurance proceeds which fully offset the impairment charge recognized to write-off the net book value of the collapsed garage and partially offset expenses of $5.5 million that were recorded relating to this loss. In addition, the Company estimates that its lost revenues approximated $0.7 million and $1.6 million during the years ended December 31, 2011 and 2010, respectively, as a result of lost occupancy in the high-rise tower following the collapse. The Company does not anticipate any remaining costs or additional lost revenues as the project has been stabilized and the garage reconstruction has been completed. None of the amounts referenced above impact same store results.
See Note 18 in the Notes to Consolidated Financial Statements for discussion of the events which occurred subsequent to December 31, 20122014.
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 apartment unit). These include:

55



flooring such as carpets, hardwood, vinyl or tile;
appliances;
mechanical equipment such as individual furnace/air units, hot water heaters, etc;
furniture and fixtures such as kitchen/bath cabinets, light fixtures, ceiling fans, sinks, tubs, toilets, mirrors, countertops, etc; and
blinds.

57


All replacements are depreciated over a five to ten-year estimated useful life. We expense as incurred all make-ready maintenance and turnover costs such as cleaning, interior painting of individual apartment units and the repair of any replacement item noted above.
Building improvements (outside the apartment unit). These include:
roof replacement and major repairs;
paving or major resurfacing of parking lots, curbs and sidewalks;
amenities and common areas such as pools, exterior sports and playground equipment, lobbies, clubhouses, laundry rooms, alarm and security systems and offices;
major building mechanical equipment systems;
interior and exterior structural repair and exterior painting and siding;
major landscaping and grounds improvement; and
vehicles and office and maintenance equipment.

All building improvements are depreciated over a five to fifteen-year estimated useful life. We capitalize building improvements and upgrades only if the item: (i) exceeds $2,500 (selected projects must exceed $10,000); (ii) extends the useful life of the asset; and (iii) improves the value of the asset.

For the year ended December 31, 2012,2014, our actual improvements to real estate totaled approximately $152.8 million.$186.0 million. This includes the following (amounts in thousands except for apartment unit and per apartment unit amounts):

Capital Expenditures to Real Estate
For the Year Ended December 31, 20122014
 
Total
Apartment
Units (1)
 Replacements (2) 
Avg. Per
Apartment
Unit
 
Building
Improvements
 
Avg. Per
Apartment
Unit
 Total 
Avg. Per
Apartment
Unit
 
Total
Apartment
Units (1)
 Replacements (2) 
Avg. Per
Apartment
Unit
 
Building
Improvements
 
Avg. Per
Apartment
Unit
 Total 
Avg. Per
Apartment
Unit
Same Store Properties (3) 98,577
 $65,490
 $664
 $55,097
 $559
 $120,587
 $1,223
 97,911
 $85,045
 $869
 $93,988
 $960
 $179,033
 $1,829
Non-Same Store Properties (4) 11,754
 7,599
 706
 21,788
 2,026
 29,387
 2,732
 5,000
 236
 60
 5,513
 1,410
 5,749
 1,470
Other (5) 
 1,723
  
 1,131
  
 2,854
  
 
 920
  
 255
  
 1,175
  
Total 110,331
 $74,812
  
 $78,016
  
 $152,828
  
 102,911
 $86,201
  
 $99,756
  
 $185,957
  

(1)Total Apartment Units – Excludes 5,0391,281 unconsolidated apartment units and 5,033 military housing apartment units for which repairs and maintenance expenses and capital expenditures to real estate are self-funded and do not consolidate into the Company’s results.
(2)Replacements – Includes new expenditures inside the apartment units such as appliances, mechanical equipment, fixtures and flooring, including carpeting. Replacements for same store properties also include $33.0$51.4 million spent in 20122014 on apartment unit renovations/rehabs (primarily kitchens and baths) on 4,4276,111 same store apartment units (equating to about $7,500$8,400 per apartment unit rehabbed) designed to reposition these assets for higher rental levels in their respective markets.
(3)Same Store Properties – Primarily includes all properties acquired or completed and stabilized prior to January 1, 2011,2013, less properties subsequently sold. Also includes 18,465 stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company.
(4)Non-Same Store Properties – Primarily includes all properties acquired during 20112013 and 2012,2014, plus any properties in lease-up and not stabilized as of January 1, 2011.2013, but excludes 18,465 stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company. Per apartment unit amounts are based on a weighted average of 10,7543,911 apartment units.
(5)Other – Primarily includes expenditures for properties sold during the period.sold.
For the year ended December 31, 20112013, our actual improvements to real estate totaled approximately $144.5$135.8 million. This includes the following (amounts in thousands except for apartment unit and per apartment unit amounts):




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Capital Expenditures to Real Estate
For the Year Ended December 31, 20112013
 
Total
Apartment
Units (1)
 Replacements (2) 
Avg. Per
Apartment
Unit
 
Building
Improvements
 
Avg. Per
Apartment
Unit
 Total 
Avg. Per
Apartment
Unit
 
Total
Apartment
Units (1)
 Replacements (2) 
Avg. Per
Apartment
Unit
 
Building
Improvements
 
Avg. Per
Apartment
Unit
 Total 
Avg. Per
Apartment
Unit
Same Store Properties (3) 101,312
 $70,937
 $700
 $49,674
 $490
 $120,611
 $1,190
 80,247
 $45,184
 $563
 $49,308
 $615
 $94,492
 $1,178
Non-Same Store Properties (4) 15,761
 7,505
 658
 13,827
 1,211
 21,332
 1,869
 22,826
 16,668
 855
 19,246
 988
 35,914
 1,843
Other (5) 
 2,147
  
 362
  
 2,509
  
 
 3,197
  
 2,213
  
 5,410
  
Total 117,073
 $80,589
  
 $63,863
  
 $144,452
  
 103,073
 $65,049
  
 $70,767
  
 $135,816
  

(1)Total Apartment Units – Excludes 4,9011,669 unconsolidated apartment units and 5,113 military housing apartment units for which repairs and maintenance expenses and capital expenditures to real estate are self-funded and do not consolidate into the Company’s results.
(2)Replacements – Includes new expenditures inside the apartment units such as appliances, mechanical equipment, fixtures and flooring, including carpeting. Replacements for same store properties also include $38.1$19.5 million spent in 20112013 on apartment unit renovations/rehabs (primarily kitchens and baths) on 2,560 same store apartment units (equating to about $7,600 per apartment unit rehabbed) designed to reposition these assets for higher rental levels in their respective markets. The Company also completed apartment unit renovations/ rehabs (primarily kitchens and baths) on 1,200 non-same store apartment units (primarily Archstone properties), equating to a total cost of approximately $11.9 million.

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rehabs (primarily kitchens and baths) on 5,416 apartment units (equating to about $7,000 per apartment unit rehabbed) designed to reposition these assets for higher rental levels in their respective markets.
(3)Same Store Properties – Primarily includes all properties acquired or completed and stabilized prior to January 1, 2010,2012, less properties subsequently sold.
(4)Non-Same Store Properties – Primarily includes all properties acquired during 20102012 and 2011,2013, plus any properties in lease-up and not stabilized as of January 1, 2010.2012. Per apartment unit amounts are based on a weighted average of 11,41419,493 apartment units. Includes approximately ten months of activity for the Archstone properties.
(5)Other – Primarily includes expenditures for properties sold during the period.sold.    
For
In 2014, the Company spent $1,829 per apartment unit of capital expenditures, inclusive of apartment unit renovation/rehab costs, or $1,304 per apartment unit excluding apartment unit renovation/rehab costs on its same store properties. These amounts represented an increase in the cost per unit over 2013,, which was primarily driven by increases in building improvement costs (i.e roofs, mechanical systems and siding) for the Archstone assets as well as certain large building improvement projects the Company had planned to complete in 2013 but were delayed and instead completed in 2014. The Company also accelerated its renovation/rehab efforts in 2014.

In 2015, the Company estimates that it will spend approximately $1,500$1,850 per apartment unit of capital expenditures, for the approximately 80,000 apartment units that the Company expects to have in its annual same store set after the completion of its planned 2013 dispositions, inclusive of apartment unit renovation/rehab costs, or $1,150$1,250 per apartment unit excluding apartment unit renovation/rehab costs. For 2013,costs on its same store properties. In 2015, the Company estimates that it willexpects to spend $40.8approximately $60.0 million rehabbing 5,000 apartment units (equating to about $8,150for all unit renovation/rehab costs (primarily on same store properties) at a weighted average cost of $9,000 per apartment unit rehabbed).rehabbed. These anticipated amounts represent an increase in the cost per unit over 2014, which is primarily driven by increases in planned renovation/rehab efforts in 2015 with plans to continue to create value from our properties by doing those rehabs that meet our investment parameters. The above assumptions are based on current expectations and are forward-looking.
During the year ended December 31, 2012,2014, the Company’s total non-real estate capital additions, such as computer software, computer equipment, and furniture and fixtures and leasehold improvements to the Company’s property management offices and its corporate offices, were approximately $8.8$5.3 million. The Company expects to fund approximately $4.2$4.8 million in total additions to non-real estate propertycapital additions in 2013.2015. The above assumption is based on current expectations and is forward-looking.
ImprovementsCapital expenditures to real estate and additions to non-real estate propertycapital additions are generally funded from net cash provided by operating activities and from investment cash flow.
Derivative Instruments

In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company seeks to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments. The Company may also use derivatives to manage its exposure to foreign exchange rates (should the Archstone transaction close) or manage commodity prices in the daily operations of the business.

The Company 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 Company has not sustained a material loss from these instruments nor does it anticipate any material adverse effect on its net income or financial position in the future from the use of derivatives it currently has in place.


57



See Note 9 in the Notes to Consolidated Financial Statements for additional discussion of derivative instruments at December 31, 20122014.
Other
Total distributions paid in January 20132015 amounted to $260.2$188.6 million (excluding distributions on Partially Owned Properties), which included certain distributions declared during the fourth quarter ended December 31, 20122014.

Off-Balance Sheet Arrangements and Contractual Obligations

Archstone Acquisition    

On February 27, 2013, in conjunction with the Archstone Acquisition, the Company acquired unconsolidated interests in certain joint ventures. The Company does not believe that these investments have a materially different impact upon its liquidity, cash flows, capital resources, credit or market risk than its other consolidated operating and/or development activities. Details of these interests follow by project:

Waterton Tenside – This venture was formed to develop and operate a 336 unit apartment property located in Atlanta, Georgia. The Company has a 20% equity interest with an initial basis of $5.1 million. The partner is the managing member and developed the project. The project is encumbered by a non-recourse mortgage loan that has a current outstanding balance of $30.0 million, bears interest at 3.66% and matures December 1, 2018. The Company does not have substantive kick-out or participating rights. As a result, the entity is unconsolidated and recorded using the equity method of accounting.
On February 27, 2013, in connection with the Archstone Acquisition, subsidiaries of the Company and AVB entered into three limited liability company agreements (collectively, the “Residual JV”). The Residual JV owns certain non-core Archstone assets, such as interests in a four property portfolio of apartment buildings and succeeded to certain residual Archstone liabilities, such as liability for various employment-related matters. The Residual JV is owned 60% by the Company and 40% by AVB and the Company's initial investment was $147.6 million. The Residual JV is managed by a Management Committee consisting of two members from each of the Company and AVB. Both partners have equal participation in the Management Committee and all significant participating rights are shared by both partners. As a result, the Residual JV is unconsolidated and recorded using the equity method of accounting.

During the year ended December 31, 2014, the Company closed on the sale of its unconsolidated interest in the German portfolio fund, the German management company and the remaining wholly-owned German real estate assets. With these sales, all German real estate assets that were acquired by the Residual JV as part of the Archstone Acquisition have now been sold. The Company's pro rata share of the proceeds/distributions that have been repatriated to the Residual JV and received by the Company as a result of the German dispositions was approximately $79.6 million during the year ended December 31, 2014 and $98.5 million cumulatively since the closing of the Archstone Acquisition.

On February 27, 2013, in connection with the Archstone Acquisition, a subsidiary of the Company and AVB entered into a limited liability company agreement (the “Legacy JV”), through which they assumed obligations of Archstone in the form of preferred interests, some of which are governed by tax protection arrangements. During the year ended December 31, 2013, the Company purchased with AVB $65.0 million (of which the Company's 60% share was $39.0 million) of the preferred interests assumed by the Legacy JV. At December 31, 2014, the remaining preferred interests have an aggregate liquidation value of $74.6 million, our share of which is included in other liabilities in the accompanying consolidated balance sheets. Obligations of the Legacy JV are borne 60% by the Company and 40% by AVB. The Legacy JV is managed by a Management Committee consisting of two members from each of the Company and AVB. Both partners have equal participation in the Management Committee and all significant participating rights are shared by both partners. As a result, the Legacy JV is unconsolidated and recorded using the equity method of accounting.

Other

The Company admitted an 80% institutional partner to two separate entities/transactions (one(Nexus Sawgrass in December 2010 and the otherDomain in August 2011), each owning a developable land parcel, in exchange for $40.1$40.1 million in cash and retained a 20% equity interest in both of these entities. These land parcelsprojects are now unconsolidated. Details of these projects follow:

Nexus Sawgrass – This development project was completed and stabilized during the quarter ended September 30, 2014. Total project costs were approximately $78.6 million and construction was predominantly funded with a long-term, non-

58



recourse secured loan from the partner. The mortgage loan has a maximum debt commitment of $48.7 million and a current unconsolidated outstanding balance of $48.6 million; the loan bears interest at 5.60% and matures January 1, 2021.
Domain – This development project is substantially complete. Total project costs are expected to be approximately $232.8$155.8 million and construction will bewas predominantly funded with two separatea long-term, non-recourse secured loansloan from the partner. The mortgage loan has a maximum debt commitment of $98.6 million and a current unconsolidated outstanding balance of $96.8 million; the loan bears interest at 5.75% and matures January 1, 2022.

While the Company is the managing member of both of the joint ventures, iswas responsible for constructing both of the projects and has given certain construction cost overrun guarantees, all major decisions are made jointly, the large majority of funding is provided by the partner and thejoint venture partner has significant participating rights and has active involvement in and oversight of the ongoing projects. The Company currently has no further funding obligations related to these projects. The Company's strategy with respect to these ventures was to reduce its financial risk related to the development of the properties. However, management does not believe that these investments have a materially different impact upon the Company's liquidity, cash flows, capital resources, credit or market risk than its other consolidated development activities.

As of December 31, 20122014, the Company has six15 consolidated projects (including 400Prism at Park Avenue South in New York City, which the Company is jointly developing with Toll Brothers – see Note 16 in the Notes to Consolidated Financial Statements for further discussion) totaling 1,536 apartment units and two unconsolidated projects totaling 9454,917 apartment units in various stages of development with estimated completion dates ranging through JuneSeptember 30, 2015,2017, as well as other completed consolidated and unconsolidated development projects that are in various stages of lease up or are stabilized. The development agreements currently in place are discussed in

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detail in Note 16 of the Company’s Consolidated Financial Statements.

See also Notes 2 and 6 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s investments in partially owned entities.

The following table summarizes the Company’s contractual obligations for the next five years and thereafter as of December 31, 20122014:

Payments Due by Year (in thousands)
Contractual Obligations 2013 2014 2015 2016 2017 Thereafter Total 2015 2016 2017 2018 2019 Thereafter Total
Debt:  
  
  
  
  
  
  
  
  
  
  
  
  
  
Principal (a) $526,310
 $586,323
 $417,812
 $1,190,538
 $1,446,576
 $4,361,685
 $8,529,244
 $408,420
 $1,192,798
 $1,346,708
 $514,510
 $1,278,469
 $6,103,956
 $10,844,861
Interest (b) 432,884
 409,840
 371,992
 322,266
 246,237
 751,660
 2,534,879
 473,737
 424,032
 373,894
 337,493
 286,335
 1,410,656
 3,306,147
Operating Leases:  
  
  
  
  
  
  
  
  
  
  
  
  
  
Minimum Rent Payments (c) 7,462
 8,862
 9,501
 9,462
 9,415
 691,304
 736,006
 15,268
 15,385
 15,318
 15,298
 15,224
 860,071
 936,564
Other Long-Term Liabilities:  
  
  
  
  
  
  
  
  
  
  
    
  
Deferred Compensation (d) 1,179
 1,691
 1,691
 1,691
 1,692
 6,529
 14,473
 1,382
 1,714
 1,714
 1,714
 1,120
 5,149
 12,793
Total $967,835
 $1,006,716
 $800,996
 $1,523,957
 $1,703,920
 $5,811,178
 $11,814,602
 $898,807
 $1,633,929
 $1,737,634
 $869,015
 $1,581,148
 $8,379,832
 $15,100,365

(a)Amounts include aggregate principal payments only.
(b)
Amounts include interest expected to be incurred on the Company’s secured and unsecured debt based on obligations outstanding at December 31, 20122014 and inclusive of capitalized interest. For floating rate debt, the current rate in effect for the most recent payment through December 31, 20122014 is assumed to be in effect through the respective maturity date of each instrument.
(c)Minimum basic rent due for various office space the Company leases and fixed base rent due on ground leases for five14 properties/parcels.
(d)Estimated payments to the Company's Chairman, Vice Chairman and twoone former CEO’sCEO based on actual and planned retirement dates.

Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to use judgment in the application of accounting policies, including making estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different or different assumptions were made, it is possible that different accounting policies would have been applied, resulting in different financial results or different presentation of our financial statements.
The Company’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, 20122014 and are consistent with the year ended December 31, 20112013.

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The Company has identified five 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 estimates is consistently applied and produces financial information that fairly presents the results of operations for all periods presented. The five critical accounting policies are:
Acquisition of Investment Properties
The Company allocates the purchase price of properties to net tangible and identified intangible assets acquired based on their fair values. In making estimates of fair values for purposes of allocating purchase price, the Company 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 Company 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.
Impairment of Long-Lived Assets
The Company periodically evaluates its long-lived assets, including its investments in real estate, for indicators of impairment. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions and legal and environmental concerns, as well as the Company’s ability to hold and its intent with regard to each asset. Future events could occur which would cause the Company to conclude that impairment indicators exist and an

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impairment loss is warranted.
Depreciation of Investment in Real Estate
The Company depreciates the building component of its investment in real estate over a 30-year estimated useful life, building improvements over a 5-year to 15-year estimated useful life and both the furniture, fixtures and equipment and replacementsreplacement components over a 5-year to 10-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 a discussion of the Company’s policy with respect to capitalization vs. expensing of fixed asset/repair and maintenance costs. In addition, the Company capitalizes an allocation of the payroll and associated costs of employees directly responsible for and who spend their time on the execution and supervision of major capital and/or renovation projects. These costs are reflected on the balance sheetsheets as an increaseincreases to depreciable property.

For all development projects, the Company uses its professional judgment in determining whether such costs meet the criteria for capitalization or must be expensed as incurred. The Company capitalizes interest, real estate taxes and insurance and payroll and associated costs for those individuals directly responsible for and who spend their time on development activities, with capitalization ceasing no later than 90 days following issuance of the certificate of occupancy. These costs are reflected on the balance sheetsheets as construction-in-progress for each specific property. The Company expenses as incurred all payroll costs of on-site employees working directly at our properties, except as noted above on our development properties prior to certificate of occupancy issuance and on specific major renovations at selected properties when additional incremental employees are hired.

During the years ended December 31, 2012, 20112014, 2013 and 2010,2012, the Company capitalized $14.322.4 million, $11.616.5 million and $10.714.3 million, respectively, of payroll and associated costs of employees directly responsible for and who spend their time on the execution and supervision of development activities as well as major capital and/or renovation projects.
Fair Value of Financial Instruments, Including Derivative Instruments
The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, 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 Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.




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Funds From Operations and Normalized Funds From Operations
For the year ended December 31, 20122014, Funds From Operations (“FFO”) available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units increased $241.1$318.5 million, or 32.0%36.5%, and $123.6increased $139.4 million, or 16.3%13.2%, respectively, as compared to the year ended December 31, 2011.2013. For the year ended December 31, 2011,2013, FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units increased $129.4decreased $120.8 million, or 20.8%12.2%, and $77.2increased $173.8 million, or 11.3%19.7%, respectively, as compared to the year ended December 31, 2010.2012.
The following is the Company's and the Operating Partnership's reconciliation of net income to FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units for each of the five years ended December 31, 20122014:


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Funds From Operations and Normalized Funds From Operations(Amounts in thousands)
    
 Year Ended December 31, Year Ended December 31,
 2012 2011 2010 2009 2008 2014 2013 2012 2011 2010
Net incomeNet income$881,204
 $935,197
 $295,983
 $382,029
 $436,413
Net income$658,683
 $1,905,353
 $881,204
 $935,197
 $295,983
Net (income) attributable to Noncontrolling Interests:         
Preference Interests and Units
 
 
 (9) (15)
Partially Owned Properties(844) (832) 726
 558
 (2,650)
Net (income) loss attributable to Noncontrolling Interests – Partially Owned PropertiesNet (income) loss attributable to Noncontrolling Interests – Partially Owned Properties(2,544) 538
 (844) (832) 726
Preferred/preference distributionsPreferred/preference distributions(10,355) (13,865) (14,368) (14,479) (14,507)Preferred/preference distributions(4,145) (4,145) (10,355) (13,865) (14,368)
Premium on redemption of Preferred Shares/Preference UnitsPremium on redemption of Preferred Shares/Preference Units(5,152) 
 
 
 
Premium on redemption of Preferred Shares/Preference Units
 
 (5,152) 
 
Net income available to Common Shares and Units / UnitsNet income available to Common Shares and Units / Units864,853
 920,500
 282,341
 368,099
 419,241
Net income available to Common Shares and Units / Units651,994
 1,901,746
 864,853
 920,500
 282,341
Adjustments:Adjustments:         Adjustments:         
Depreciation Depreciation664,082
 612,579
 581,469
 491,935
 470,657
Depreciation758,861
 978,973
 560,669
 506,175
 470,593
Depreciation – Non-real estate additionsDepreciation – Non-real estate additions(5,346) (5,519) (6,566) (7,122) (8,034)Depreciation – Non-real estate additions(4,643) (4,806) (5,346) (5,519) (6,566)
Depreciation – Partially Owned and Unconsolidated Properties(3,193) (3,062) (1,619) 759
 4,157
Net (gain) on sales of unconsolidated entities
 
 (28,101) (10,689) (2,876)
Depreciation – Partially Owned PropertiesDepreciation – Partially Owned Properties(4,285) (6,499) (3,193) (3,062) (3,532)
Depreciation – Unconsolidated PropertiesDepreciation – Unconsolidated Properties6,754
 3,661
 
 
 1,913
Net (gain) on sales of unconsolidated entities – operating assetsNet (gain) on sales of unconsolidated entities – operating assets(4,902) (7) 
 
 (28,101)
Net (gain) on sales of real estate propertiesNet (gain) on sales of real estate properties(212,685) 
 
 
 
Discontinued operations:Discontinued operations:         Discontinued operations:         
Depreciation Depreciation20,910
 50,949
 91,712
 108,207
 132,016
Depreciation
 34,380
 124,323
 157,353
 202,588
Net (gain) on sales of discontinued operations Net (gain) on sales of discontinued operations(548,278) (826,489) (297,956) (335,299) (392,857) Net (gain) on sales of discontinued operations(179) (2,036,505) (548,278) (826,489) (297,956)
Net incremental (loss) gain on sales of condominium units(11) 1,993
 1,506
 (385) (3,932)
Net incremental gain (loss) on sales of condominium unitsNet incremental gain (loss) on sales of condominium units
 8
 (11) 1,993
 1,506
Gain on sale of Equity Corporate Housing (ECH)Gain on sale of Equity Corporate Housing (ECH)200
 1,202
 
 
 
Gain on sale of Equity Corporate Housing (ECH)
 1,470
 200
 1,202
 
FFO available to Common Shares and Units / Units (1) (3) (4)FFO available to Common Shares and Units / Units (1) (3) (4)993,217
 752,153
 622,786
 615,505
 618,372
FFO available to Common Shares and Units / Units (1) (3) (4)1,190,915
 872,421
 993,217
 752,153
 622,786
Adjustments:Adjustments:         Adjustments:         
Asset impairment and valuation allowances Asset impairment and valuation allowances
 
 45,380
 11,124
 116,418
Asset impairment and valuation allowances
 
 
 
 45,380
Property acquisition costs and write-off of pursuit costs (other expenses)21,649
 14,557
 11,928
 6,488
 5,760
Property acquisition costs and write-off of pursuit costsProperty acquisition costs and write-off of pursuit costs8,248
 79,365
 21,649
 14,557
 11,928
Debt extinguishment (gains) losses, including prepayment penalties, preferred share/Debt extinguishment (gains) losses, including prepayment penalties, preferred share/         Debt extinguishment (gains) losses, including prepayment penalties, preferred share/         
preference unit redemptions and non-cash convertible debt discounts preference unit redemptions and non-cash convertible debt discounts16,293
 12,300
 8,594
 34,333
 (2,784) preference unit redemptions and non-cash convertible debt discounts(1,110) 121,730
 16,293
 12,300
 8,594
(Gains) losses on sales of non-operating assets, net of income and other tax expense(Gains) losses on sales of non-operating assets, net of income and other tax expense         (Gains) losses on sales of non-operating assets, net of income and other tax expense         
(benefit) (benefit)(255) (6,976) (80) (5,737) (979) (benefit)(1,866) (17,908) (255) (6,976) (80)
Other miscellaneous non-comparable items Other miscellaneous non-comparable items(147,635) (12,369) (6,186) (171) (1,725) Other miscellaneous non-comparable items259
 1,465
 (147,635) (12,369) (6,186)
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)Normalized FFO available to Common Shares and Units / Units (2) (3) (4)$883,269
 $759,665
 $682,422
 $661,542
 $735,062
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)$1,196,446
 $1,057,073
 $883,269
 $759,665
 $682,422
                    
FFO (1) (3)FFO (1) (3)$1,008,724
 $766,018
 $637,154
 $629,984
 $632,879
FFO (1) (3)$1,195,060
 $876,566
 $1,008,724
 $766,018
 $637,154
Preferred/preference distributionsPreferred/preference distributions(10,355) (13,865) (14,368) (14,479) (14,507)Preferred/preference distributions(4,145) (4,145) (10,355) (13,865) (14,368)
Premium on redemption of Preferred Shares/Preference UnitsPremium on redemption of Preferred Shares/Preference Units(5,152) 
 
 
 
Premium on redemption of Preferred Shares/Preference Units
 
 (5,152) 
 
FFO available to Common Shares and Units / Units (1) (3) (4)FFO available to Common Shares and Units / Units (1) (3) (4)$993,217
 $752,153
 $622,786
 $615,505
 $618,372
FFO available to Common Shares and Units / Units (1) (3) (4)$1,190,915
 $872,421
 $993,217
 $752,153
 $622,786
                    
Normalized FFO (2) (3)Normalized FFO (2) (3)$893,624
 $773,530
 $696,790
 $676,021
 $749,569
Normalized FFO (2) (3)$1,200,591
 $1,061,218
 $893,624
 $773,530
 $696,790
Preferred/preference distributionsPreferred/preference distributions(10,355) (13,865) (14,368) (14,479) (14,507)Preferred/preference distributions(4,145) (4,145) (10,355) (13,865) (14,368)
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)Normalized FFO available to Common Shares and Units / Units (2) (3) (4)$883,269
 $759,665
 $682,422
 $661,542
 $735,062
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)$1,196,446
 $1,057,073
 $883,269
 $759,665
 $682,422

(1)The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (“FFO”) (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales and impairment write-downs of depreciable operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Company commences the conversion of apartment units to condominiums, it simultaneously discontinues depreciation of such property.

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calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Company commences the conversion of apartment units to condominiums, it simultaneously discontinues depreciation of such property.

(2) Normalized funds from operations (“Normalized FFO”) begins with FFO and excludes:
the impact of any expenses relating to non-operating asset impairment and valuation allowances;
property acquisition and other transaction costs related to mergers and acquisitions and pursuit cost write-offs (other expenses);write-offs;
gains and losses from early debt extinguishment, including prepayment penalties, preferred share/preference unit redemptions and the cost related to the implied option value of non-cash convertible debt discounts;
gains and losses on the sales of non-operating assets, including gains and losses from land parcel and condominium sales, net of the effect of income tax benefits or expenses; and
other miscellaneous non-comparable items.


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(3)The Company believes that FFO and FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units / Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies. The companyCompany also believes that Normalized FFO and Normalized FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the company’sCompany’s operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results. FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units do not represent net income, net income available to Common Shares / Units or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units should not be exclusively considered as alternatives to net income, net income available to Common Shares / Units or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company’s calculation of FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.

(4)FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units are calculated on a basis consistent with net income available to Common Shares / Units and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares/preference units in accordance with accounting principles generally accepted in the United States. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the “Noncontrolling Interests – Operating Partnership”. Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Market risks relating to the Company’s financial instruments result primarily from changes in short-term LIBOR interest rates and changes in the Securities Industry and Financial Markets Association ("SIFMA") index for tax-exempt debt. If the Archstone transaction is consummated, theThe Company will havealso has foreign exchange exposure related to undistributed cash remaining after the sale of its interests in German residential real estate.estate that were acquired as part of the Archstone Transaction.

The Company’s exposure to market risk for changes in interest rates relates primarily to the unsecured revolving and term loan facilitiescredit facility as well as floating rate tax-exempt debt. The Company typically incurs fixed rate debt obligations to finance acquisitions 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 Company 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. To the extent the Company carries substantial cash balances, this will tend to partially counterbalance any increase or decrease in interest rates.

The Company also utilizes certain derivative financial instruments to manage market risk. Interest rate protection agreements are used to convert floating rate debt to a fixed rate basis or vice versa as well as to partially lock in rates on future debt issuances. The Company may utilize derivative financial instruments to manage foreign exchange rate risk related to interests in German residential real estate if the Archstone transaction closes. Derivatives are used for hedging purposes rather than speculation. The Company does not enter into financial instruments for trading purposes. See also Note 9 to the Notes to Consolidated Financial Statements for additional discussion of derivative instruments.

The fair values of the Company’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 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 Company’s mortgage notes payable and unsecured notesdebt (including its line of credit) were approximately $4.3$5.1 billion and $5.2$6.1 billion,,

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respectively, at December 31, 2012.2014.

At December 31, 2012,2014, the Company had total outstanding floating rate debt of approximately $0.7$1.5 billion, or 8.0%14.0% of total debt, net of the effects of any derivative instruments. If market rates of interest on all of the floating rate debt permanently increased by 149 basis points (a 10% increase from the Company’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 $0.9$1.4 million. If market rates of interest on all of the floating rate debt permanently decreased by 149 basis points (a 10% decrease from the Company’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 $0.9$1.4 million.

At December 31, 2012,2014, the Company had total outstanding fixed rate debt of approximately $7.8$9.3 billion, or 92.0%86.0% of total debt, net of the effects of any derivative instruments. If market rates of interest permanently increased by 5652 basis points (a 10% increase from the Company’s existing weighted average interest rates), the estimated fair value of the Company’s fixed rate debt would be approximately $7.1$8.5 billion. If market rates of interest permanently decreased by 5652 basis points (a 10% decrease

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from the Company’s existing weighted average interest rates), the estimated fair value of the Company’s fixed rate debt would be approximately $8.7$10.4 billion.

At December 31, 2012,2014, the Company’s derivative instruments had a net liability fair value of approximately $42.5$12.2 million. If market rates of interest permanently increased by 424 basis points (a 10% increase from the Company’s existing weighted average interest rates), the net liability fair value of the Company’s derivative instruments would be approximately $40.9$7.2 million. If market rates of interest permanently decreased by 424 basis points (a 10% decrease from the Company’s existing weighted average interest rates), the net liability fair value of the Company’s derivative instruments would be approximately $44.2$17.4 million.
    
At December 31, 20112013, the Company had total outstanding floating rate debt of approximately $1.3$1.6 billion, or 13.8%15.3% of total debt, net of the effects of any derivative instruments. If market rates of interest on all of the floating rate debt permanently increased by 1412 basis points (a 10% increase from the Company'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 $1.8$2.0 million. If market rates of interest on all of the floating rate debt permanently decreased by 1412 basis points (a 10% decrease from the Company'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 $1.8$2.0 million.

At December 31, 20112013, the Company had total outstanding fixed rate debt of approximately $8.4$9.1 billion, or 86.2%84.7% of total debt, net of the effects of any derivative instruments. If market rates of interest permanently increased by 5751 basis points (a 10% increase from the Company's existing weighted average interest rates), the estimated fair value of the Company's fixed rate debt would be approximately $7.6$8.3 billion. If market rates of interest permanently decreased by 5751 basis points (a 10% decrease from the Company's existing weighted average interest rates), the estimated fair value of the Company's fixed rate debt would be approximately $9.3$10.1 billion.

At December 31, 20112013, the Company's derivative instruments had a net liabilityasset fair value of approximately $23.3$18.7 million. If market rates of interest permanently increased by 833 basis points (a 10% increase from the Company's existing weighted average interest rates), the net liabilityasset fair value of the Company's derivative instruments would be approximately $20.8$28.0 million. If market rates of interest permanently decreased by 833 basis points (a 10% decrease from the Company's existing weighted average interest rates), the net liabilityasset fair value of the Company's derivative instruments would be approximately $25.9$9.4 million.

These amounts were determined by considering the impact of hypothetical interest rates on the Company’s financial instruments. The foregoing assumptions apply to the entire amount of the Company’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 Company’s financial structure or results.

The Company 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 and Schedule on page F-1 of this Form 10-K.


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Item 9.     Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    None.

Item 9A. Controls and Procedures

Equity Residential
(a)  Evaluation of Disclosure Controls and Procedures:
Effective as of December 31, 20122014, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’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 to ensure that information required to be disclosed by the Company in its Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

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(b)  Management’s Report on Internal Control over Financial Reporting:
Equity Residential’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.Commission (2013 framework).
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation.
Based on the Company’s evaluation under the framework in Internal Control – Integrated Framework, management concluded that its internal control over financial reporting was effective as of December 31, 20122014. Our internal control over financial reporting has been audited as of December 31, 20122014 by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.
(c)   Changes in Internal Control over Financial Reporting:
There were no changes to the internal control over financial reporting of the Company identified in connection with the Company’s evaluation referred to above that occurred during the fourth quarter of 20122014 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ERP Operating Limited Partnership
(a)  Evaluation of Disclosure Controls and Procedures:
Effective as of December 31, 20122014, 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 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 to ensure that information required to be disclosed by the Operating Partnership in its Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.
(b)  Management’s Report on Internal Control over Financial Reporting:
ERP Operating Limited Partnership's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of the Operating Partnership's general partner, management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.Commission (2013 framework).

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation.

Based on the Operating Partnership's evaluation under the framework in Internal Control – Integrated Framework, management concluded that its internal control over financial reporting was effective as of December 31, 20122014. Our internal control

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over financial reporting has been audited as of December 31, 20122014 by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.

(c)  Changes in Internal Control over Financial Reporting:
There were no changes to the internal control over financial reporting of the Operating Partnership identified in connection with the Operating Partnership's evaluation referred to above that occurred during the fourth quarter of 20122014 that have materially affected, or are reasonably likely to materially affect, the Operating Partnership's internal control over financial reporting.

Item 9B. Other Information
None.


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PART III

Items 10, 11, 12, 13 and 14.
Trustees, Executive Officers and Corporate Governance; Executive Compensation; Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters; Certain Relationships and Related Transactions, and Trustee Independence; and Principal Accounting Fees and Services.
The information required by Item 10, Item 11, Item 12, Item 13 and Item 14 is incorporated by reference to, and will be contained in, Equity Residential's Proxy Statement, which the Company intends to file no later than 120 days after the end of its fiscal year ended December 31, 20122014, and thus these items have been omitted in accordance with General Instruction G(3) to Form 10-K. Equity Residential is the general partner and 95.9%96.2% owner of ERP Operating Limited Partnership.


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PART IV

Item 15. Exhibits and Financial Statement Schedules.
(a)  The following documents are filed as part of this Report:
(1)Financial Statements: See Index to Consolidated Financial Statements and Schedule on page F-1 of this Form 10-K.
(2)Exhibits: See the Exhibit Index.
(3)Financial Statement Schedules: See Index to Consolidated Financial Statements and Schedule on page F-1 of this Form 10-K.


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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
                                                                                           
  EQUITY RESIDENTIAL
    
  By: /s/ David J. Neithercut
   
David J. Neithercut
President and Chief Executive Officer
(Principal Executive Officer)
  Date:February 21, 201326, 2015


                                                                                                 
  
ERP OPERATING LIMITED PARTNERSHIP
BY: EQUITY RESIDENTIAL
ITS GENERAL PARTNER
    
  By: /s/ David J. Neithercut
   
David J. Neithercut
President and Chief Executive Officer
(Principal Executive Officer)
  Date:February 21, 201326, 2015



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EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP

POWER OF ATTORNEY
KNOW ALL MEN/WOMEN BY THESE PRESENTS, that each person whose signature appears below, hereby constitutes and appoints David J. Neithercut, Mark J. Parrell and Ian S. Kaufman, or any of them, his or her attorneys-in-fact and agents, with full power of substitution and resubstitution for him or her in any and all capacities, to do all acts and things which said attorneys and agents, or any of them, deem advisable to enable the company to comply with the Securities Exchange Act of 1934, as amended, and any requirements or regulations of the Securities and Exchange Commission in respect thereof, in connection with the company’s filing of an annual report on Form 10-K for the company’s fiscal year 20122014, including specifically, but without limitation of the general authority hereby granted, the power and authority to sign his or her name as a trustee or officer, or both, of the company, as indicated below opposite his or her signature, to the Form 10-K, and any amendment thereto; and each of the undersigned does hereby fully ratify and confirm all that said attorneys and agents, or any of them, or the substitute of any of them, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of each registrant and in the capacities set forth below and on the dates indicated:

Name Title Date
     
/s/ David J. Neithercut President, Chief Executive Officer and Trustee February 21, 201326, 2015
David J. Neithercut (Principal Executive Officer)  
     
/s/ Mark J. Parrell Executive Vice President and Chief Financial Officer February 21, 201326, 2015
Mark J. Parrell (Principal Financial Officer)  
     
/s/ Ian S. Kaufman Senior Vice President and Chief Accounting Officer February 21, 201326, 2015
Ian S. Kaufman (Principal Accounting Officer)  
     
/s/ John W. Alexander Trustee February 21, 201326, 2015
John W. Alexander    
     
/s/ Charles L. Atwood Trustee February 21, 201326, 2015
Charles L. Atwood    
     
/s/ Linda Walker Bynoe Trustee February 21, 201326, 2015
Linda Walker Bynoe    
     
/s/ Mary Kay Haben Trustee February 21, 201326, 2015
Mary Kay Haben    
     
/s/ Bradley A. Keywell Trustee February 21, 201326, 2015
Bradley A. Keywell    
     
/s/ John E. Neal Trustee February 21, 201326, 2015
John E. Neal    
     
/s/ Mark S. Shapiro Trustee February 21, 201326, 2015
Mark S. Shapiro
/s/ Stephen E. SterrettTrusteeFebruary 26, 2015
Stephen E. Sterrett    
     
/s/ B. Joseph White Trustee February 21, 201326, 2015
B. Joseph White    
     
/s/ Gerald A. Spector Vice Chairman of the Board of Trustees February 21, 201326, 2015
Gerald A. Spector    
     
/s/ Samuel Zell Chairman of the Board of Trustees February 21, 201326, 2015
Samuel Zell    



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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP

  PAGE
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT  
   
Report of Independent Registered Public Accounting Firm (Equity Residential) 
   
Report of Independent Registered Public Accounting Firm (ERP Operating Limited Partnership) 
   
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial
    Reporting (Equity Residential)
    
 
   
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial
    Reporting (ERP Operating Limited Partnership)
    
 
   
Financial Statements of Equity Residential:  
   
  Consolidated Balance Sheets as of December 31, 20122014 and 20112013 
   
  Consolidated Statements of Operations and Comprehensive Income
for the years ended
December 31, 2012, 20112014, 2013 and 20102012
 
   
  Consolidated Statements of Cash Flows for the years ended
      December 31, 2012, 20112014, 2013 and 20102012
 
   
  Consolidated Statements of Changes in Equity for the years ended
      December 31, 2012, 20112014, 2013 and 20102012
 F-12
   
Financial Statements of ERP Operating Limited Partnership:  
   
  Consolidated Balance Sheets as of December 31, 20122014 and 20112013 F-14
   
  Consolidated Statements of Operations and Comprehensive Income
for the years ended
December 31, 2012, 20112014, 2013 and 20102012
 F-15
   
  Consolidated Statements of Cash Flows for the years ended
      December 31, 2012, 20112014, 2013 and 20102012
 F-17
   
  Consolidated Statements of Changes in Capital for the years ended
      December 31, 2012, 20112014, 2013 and 20102012
 F-20
   
Notes to Consolidated Financial Statements of Equity Residential and ERP Operating
     Limited Partnership
 F-22
   
SCHEDULE FILED AS PART OF THIS REPORT  
   
Schedule III – Real Estate and Accumulated Depreciation of Equity Residential and ERP Operating
     Limited Partnership
 

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.



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders
Equity Residential
We have audited the accompanying consolidated balance sheets of Equity Residential (the “Company”) as of December 31, 20122014 and 20112013 and the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 20122014. Our audits also included the financial statement schedule listed in the accompanying index to the consolidated financial statements and schedule. These financial statements and schedule are the responsibility of the Company’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 the standards of the Public Company Accounting Oversight Board (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 Equity Residential at December 31, 20122014 and 20112013 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 20122014, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated 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 Company changed its method for reporting discontinued operations as a result of the adoption of Accounting Standards Update No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity," effective January 1, 2014.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Equity Residential’s internal control over financial reporting as of December 31, 20122014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 21, 201326, 2015 expressed an unqualified opinion thereon.

 /s/  ERNST & YOUNG LLP
 ERNST & YOUNG LLP
  
Chicago, Illinois 
February 21, 201326, 2015 


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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, 20122014 and 20112013 and the related consolidated statements of operations and comprehensive income, changes in capital and cash flows for each of the three years in the period ended December 31, 20122014. Our audits also included the financial statement schedule listed in the accompanying index to the consolidated 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 the standards of the Public Company Accounting Oversight Board (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, 20122014 and 20112013 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 20122014, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated 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 for reporting discontinued operations as a result of the adoption of Accounting Standards Update No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity," effective January 1, 2014.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), ERP Operating Limited Partnership's internal control over financial reporting as of December 31, 20122014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 21, 201326, 2015 expressed an unqualified opinion thereon.

 /s/  ERNST & YOUNG LLP
 ERNST & YOUNG LLP
  
Chicago, Illinois 
February 21, 201326, 2015 



F-3

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To the Board of Trustees and Shareholders
Equity Residential
We have audited Equity Residential’s (the “Company”) internal control over financial reporting as of December 31, 20122014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO Criteria”). Equity Residential’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Equity Residential maintained, in all material respects, effective internal control over financial reporting as of December 31, 20122014, based on the COSO Criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Equity Residential as of December 31, 20122014 and 20112013 and the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 20122014 of Equity Residential and our report dated February 21, 201326, 2015, expressed an unqualified opinion thereon.

 /s/  ERNST & YOUNG LLP
 ERNST & YOUNG LLP
  
Chicago, Illinois 
February 21, 201326, 2015 


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To the Partners
ERP Operating Limited Partnership
We have audited ERP Operating Limited Partnership's (the “Operating Partnership”) internal control over financial reporting as of December 31, 20122014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO Criteria”). ERP Operating Limited Partnership's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the effectiveness of the Operating Partnership's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, ERP Operating Limited Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 20122014, based on the COSO Criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of ERP Operating Limited Partnership as of December 31, 20122014 and 20112013 and the related consolidated statements of operations and comprehensive income, changes in capital and cash flows for each of the three years in the period ended December 31, 20122014 of ERP Operating Limited Partnership and our report dated February 21, 201326, 2015, expressed an unqualified opinion thereon.

 /s/  ERNST & YOUNG LLP
 ERNST & YOUNG LLP
  
Chicago, Illinois 
February 21, 201326, 2015 


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EQUITY RESIDENTIAL
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except for share amounts)
 December 31, 2012 December 31, 2011 December 31, 2014 December 31, 2013
ASSETS        
Investment in real estate  
  
  
  
Land $4,554,912
 $4,367,816
 $6,295,404
 $6,192,512
Depreciable property 15,711,944
 15,554,740
 19,851,504
 19,226,047
Projects under development 387,750
 160,190
 1,343,919
 988,867
Land held for development 353,823
 325,200
 184,556
 393,522
Investment in real estate 21,008,429
 20,407,946
 27,675,383
 26,800,948
Accumulated depreciation (4,912,221) (4,539,583) (5,432,805) (4,807,709)
Investment in real estate, net 16,096,208
 15,868,363
 22,242,578
 21,993,239
Cash and cash equivalents 612,590
 383,921
 40,080
 53,534
Investments in unconsolidated entities 17,877
 12,327
 105,434
 178,526
Deposits – restricted 250,442
 152,237
 72,303
 103,567
Escrow deposits – mortgage 9,129
 10,692
 48,085
 42,636
Deferred financing costs, net 44,382
 44,608
 58,380
 58,486
Other assets 170,372
 187,155
 383,754
 404,557
Total assets $17,201,000
 $16,659,303
 $22,950,614
 $22,834,545
        
LIABILITIES AND EQUITY        
Liabilities:    
    
Mortgage notes payable $3,898,369
 $4,111,487
 $5,086,515
 $5,174,166
Notes, net 4,630,875
 5,609,574
 5,425,346
 5,477,088
Lines of credit 
 
 333,000
 115,000
Accounts payable and accrued expenses 38,372
 35,206
 153,590
 118,791
Accrued interest payable 76,223
 88,121
 89,540
 78,309
Other liabilities 304,518
 291,289
 389,915
 347,748
Security deposits 66,988
 65,286
 75,633
 71,592
Distributions payable 260,176
 179,079
 188,566
 243,511
Total liabilities 9,275,521
 10,380,042
 11,742,105
 11,626,205
        
Commitments and contingencies        
        
Redeemable Noncontrolling Interests – Operating Partnership 398,372
 416,404
 500,733
 363,144
Equity:    
    
Shareholders’ equity:    
    
Preferred Shares of beneficial interest, $0.01 par value;    
    
100,000,000 shares authorized; 1,000,000 shares issued
and outstanding as of December 31, 2012 and 1,600,000
shares issued and outstanding as of December 31, 2011
 50,000
 200,000
100,000,000 shares authorized; 1,000,000 shares issued and
outstanding as of December 31, 2014 and December 31, 2013
 50,000
 50,000
Common Shares of beneficial interest, $0.01 par value;    
    
1,000,000,000 shares authorized; 325,054,654 shares issued
and outstanding as of December 31, 2012 and 297,508,185
shares issued and outstanding as of December 31, 2011
 3,251
 2,975
1,000,000,000 shares authorized; 362,855,454 shares issued
and outstanding as of December 31, 2014 and 360,479,260
shares issued and outstanding as of December 31, 2013
 3,629
 3,605
Paid in capital 6,542,355
 5,047,186
 8,536,340
 8,561,500
Retained earnings 887,355
 615,572
 1,950,639
 2,047,258
Accumulated other comprehensive (loss) (193,148) (196,718) (172,152) (155,162)
Total shareholders’ equity 7,289,813
 5,669,015
 10,368,456
 10,507,201
Noncontrolling Interests:        
Operating Partnership 159,606
 119,536
 214,411
 211,412
Partially Owned Properties 77,688
 74,306
 124,909
 126,583
Total Noncontrolling Interests 237,294
 193,842
 339,320
 337,995
Total equity 7,527,107
 5,862,857
 10,707,776
 10,845,196
Total liabilities and equity $17,201,000
 $16,659,303
 $22,950,614
 $22,834,545

See accompanying notes
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EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Amounts in thousands except per share data)
 Year Ended December 31, Year Ended December 31,
 2012 2011 2010 2014 2013 2012
REVENUES  
  
  
  
  
  
Rental income $2,114,142
 $1,874,465
 $1,665,233
 $2,605,311
 $2,378,004
 $1,737,929
Fee and asset management 9,573
 9,026
 9,476
 9,437
 9,698
 9,573
Total revenues 2,123,715
 1,883,491
 1,674,709
 2,614,748
 2,387,702
 1,747,502
            
EXPENSES      
      
Property and maintenance 415,986
 387,968
 374,135
 473,098
 449,427
 332,219
Real estate taxes and insurance 241,876
 211,518
 200,779
 325,401
 293,999
 206,723
Property management 81,902
 81,867
 79,857
 79,636
 84,342
 81,902
Fee and asset management 4,663
 4,279
 4,998
 5,429
 6,460
 4,663
Depreciation 664,082
 612,579
 581,469
 758,861
 978,973
 560,669
General and administrative 47,248
 43,605
 39,881
 50,948
 62,179
 47,233
Impairment 
 
 45,380
Total expenses 1,455,757
 1,341,816
 1,326,499
 1,693,373
 1,875,380
 1,233,409
            
Operating income 667,958
 541,675
 348,210
 921,375
 512,322
 514,093
            
Interest and other income 150,547
 7,965
 5,118
 4,462
 5,283
 151,060
Other expenses (27,361) (14,292) (11,792) (9,073) (29,630) (27,796)
Interest:  
  
  
  
  
  
Expense incurred, net (457,666) (464,277) (460,748) (457,191) (586,854) (455,236)
Amortization of deferred financing costs (21,370) (16,766) (9,576) (11,088) (22,197) (21,295)
Income (loss) before income and other taxes, (loss) from investments in
unconsolidated entities, net gain (loss) on sales of unconsolidated entities and
land parcels and discontinued operations
 312,108
 54,305
 (128,788)
Income (loss) before income and other taxes, (loss) from investments
in unconsolidated entities, net gain on sales of real estate properties and
land parcels and discontinued operations
 448,485
 (121,076) 160,826
Income and other tax (expense) benefit (539) (728) (291) (1,394) (1,169) (514)
(Loss) from investments in unconsolidated entities (14) 
 (735) (7,952) (58,156) (14)
Net gain on sales of unconsolidated entities 
 
 28,101
Net gain (loss) on sales of land parcels 
 4,217
 (1,395)
Net gain on sales of real estate properties 212,685
 
 
Net gain on sales of land parcels 5,277
 12,227
 
Income (loss) from continuing operations 311,555
 57,794
 (103,108) 657,101
 (168,174) 160,298
Discontinued operations, net 569,649
 877,403
 399,091
 1,582
 2,073,527
 720,906
Net income 881,204
 935,197
 295,983
 658,683
 1,905,353
 881,204
Net (income) loss attributable to Noncontrolling Interests:  
  
  
  
  
  
Operating Partnership (38,641) (40,780) (13,099) (24,831) (75,278) (38,641)
Partially Owned Properties (844) (832) 726
 (2,544) 538
 (844)
Net income attributable to controlling interests 841,719
 893,585
 283,610
 631,308
 1,830,613
 841,719
Preferred distributions (10,355) (13,865) (14,368) (4,145) (4,145) (10,355)
Premium on redemption of Preferred Shares (5,152) 
 
 
 
 (5,152)
Net income available to Common Shares $826,212
 $879,720
 $269,242
 $627,163
 $1,826,468
 $826,212
            
Earnings per share – basic:  
  
  
  
  
  
Income (loss) from continuing operations available to Common Shares $0.93
 $0.14
 $(0.39) $1.73
 $(0.47) $0.45
Net income available to Common Shares $2.73
 $2.98
 $0.95
 $1.74
 $5.16
 $2.73
Weighted average Common Shares outstanding 302,701
 294,856
 282,888
 361,181
 354,305
 302,701
            
Earnings per share – diluted:  
  
  
  
  
  
Income (loss) from continuing operations available to Common Shares $0.92
 $0.14
 $(0.39) $1.72
 $(0.47) $0.45
Net income available to Common Shares $2.70
 $2.95
 $0.95
 $1.73
 $5.16
 $2.70
Weighted average Common Shares outstanding 319,766
 312,065
 282,888
 377,735
 354,305
 319,766
      
Distributions declared per Common Share outstanding $2.00
 $1.85
 $1.78

See accompanying notes
F-7


Table of Contents


EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)
(Amounts in thousands except per share data)

  Year Ended December 31,
  2012 2011 2010
Comprehensive income:  
  
  
Net income $881,204
 $935,197
 $295,983
Other comprehensive income (loss):      
Other comprehensive income (loss) – derivative instruments:  
  
  
Unrealized holding (losses) arising during the year (11,772) (143,598) (65,894)
Losses reclassified into earnings from other comprehensive income 14,678
 4,343
 3,338
Other comprehensive income – other instruments:  
  
  
Unrealized holding gains arising during the year 664
 355
 57
Other comprehensive income (loss) 3,570
 (138,900) (62,499)
Comprehensive income 884,774
 796,297
 233,484
Comprehensive (income) attributable to Noncontrolling Interests (39,485) (41,612) (12,373)
Comprehensive income attributable to controlling interests $845,289
 $754,685
 $221,111




























  Year Ended December 31,
  2014 2013 2012
Comprehensive income:  
  
  
Net income $658,683
 $1,905,353
 $881,204
Other comprehensive (loss) income:      
Other comprehensive (loss) income – derivative instruments:  
  
  
Unrealized holding (losses) gains arising during the year (33,306) 18,771
 (11,772)
Losses reclassified into earnings from other comprehensive income 16,868
 20,141
 14,678
Other comprehensive income (loss) – other instruments:  
  
  
Unrealized holding gains arising during the year 
 583
 664
(Gains) realized during the year 
 (2,122) 
Other comprehensive (loss) income – foreign currency:      
Currency translation adjustments arising during the year (552) 613
 
Other comprehensive (loss) income (16,990) 37,986
 3,570
Comprehensive income 641,693
 1,943,339
 884,774
Comprehensive (income) attributable to Noncontrolling Interests (26,728) (76,204) (39,624)
Comprehensive income attributable to controlling interests $614,965
 $1,867,135
 $845,150


See accompanying notes
F-8


Table of Contents


EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)

 Year Ended December 31, Year Ended December 31,
 2012 2011 2010 2014 2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:  
  
  
  
  
  
Net income $881,204
 $935,197
 $295,983
 $658,683
 $1,905,353
 $881,204
Adjustments to reconcile net income to net cash provided by operating activities:  
  
  
  
  
  
Depreciation 684,992
 663,616
 673,403
 758,861
 1,013,353
 684,992
Amortization of deferred financing costs 21,435
 17,846
 10,406
 11,088
 22,425
 21,435
Amortization of above/below market leases 3,222
 898
 
Amortization of discounts and premiums on debt (8,181) (1,478) (471) (13,520) (156,439) (8,181)
Amortization of deferred settlements on derivative instruments 14,144
 3,808
 2,804
 16,334
 19,607
 14,144
Impairment 
 
 45,380
Write-off of pursuit costs 9,056
 5,075
 5,272
 3,607
 5,184
 9,056
Income from technology investments 
 (4,537) 
Loss from investments in unconsolidated entities 14
 
 735
 7,952
 58,156
 14
Distributions from unconsolidated entities – return on capital 575
 319
 61
 5,570
 2,481
 575
Net (gain) on sales of unconsolidated entities 
 
 (28,101)
Net (gain) loss on sales of land parcels 
 (4,217) 1,395
Net (gain) on sales of investment securities (57) (4,203) 
Net (gain) on sales of real estate properties (212,685) 
 
Net (gain) on sales of land parcels (5,277) (12,227) 
Net (gain) on sales of discontinued operations (548,278) (826,489) (297,956) (179) (2,036,505) (548,278)
Loss on debt extinguishments 272
 
 2,457
Unrealized (gain) loss on derivative instruments (1) 186
 1
 (60) 70
 (1)
Compensation paid with Company Common Shares 24,832
 21,177
 18,875
 27,543
 35,474
 24,832
Changes in assets and liabilities:  
  
  
  
  
  
(Increase) decrease in deposits – restricted (4,091) 4,523
 3,316
 (1,740) 3,684
 (4,091)
(Increase) in other assets (20,411) (2,743) (9,048)
(Decrease) increase in accounts payable and accrued expenses (2,102) 332
 (5,454)
(Decrease) in accrued interest payable (11,898) (10,510) (4,000)
Increase (decrease) in other liabilities 2,987
 (8,245) 9,972
Increase in security deposits 1,702
 4,474
 1,007
Decrease in mortgage deposits 1,452
 1,813
 176
Decrease (increase) in other assets 21,773
 3,742
 (20,411)
Increase (decrease) in accounts payable and accrued expenses 17,797
 6,229
 (2,102)
Increase (decrease) in accrued interest payable 11,231
 (9,219) (11,898)
Increase in other liabilities 8,437
 15,401
 2,987
Increase (decrease) in security deposits 4,041
 (6,361) 1,702
Net cash provided by operating activities 1,046,251
 798,334
 726,037
 1,324,073
 868,916
 1,046,155
            
CASH FLOWS FROM INVESTING ACTIVITIES:  
  
  
  
  
  
Acquisition of Archstone, net of cash acquired 
 (4,000,875) 
Investment in real estate – acquisitions (843,976) (1,441,599) (1,189,210) (469,989) (108,308) (843,976)
Investment in real estate – development/other (180,409) (120,741) (131,301) (530,387) (377,442) (180,409)
Improvements to real estate (152,828) (144,452) (138,208)
Additions to non-real estate property (8,821) (7,110) (2,991)
Capital expenditures to real estate (185,957) (135,816) (152,828)
Non-real estate capital additions (5,286) (4,134) (8,821)
Interest capitalized for real estate and unconsolidated entities under development (22,509) (9,108) (13,008) (52,782) (47,321) (22,509)
Proceeds from disposition of real estate, net 1,049,219
 1,500,583
 672,700
 522,647
 4,551,454
 1,049,219
Investments in unconsolidated entities (5,291) (2,021) 
 (15,768) (66,471) (5,291)
Distributions from unconsolidated entities – return of capital 
 
 26,924
 103,793
 25,471
 
Proceeds from sale of investment securities 
 
 25,000
 57
 4,878
 
Proceeds from technology investments 
 4,537
 
(Increase) decrease in deposits on real estate acquisitions and investments, net (97,984) 7,631
 137,106
Decrease (increase) in deposits on real estate acquisitions and investments, net 33,004
 143,694
 (97,984)
Decrease in mortgage deposits 1,563
 1,901
 4,699
 798
 7,893
 1,444
Consolidation of previously unconsolidated properties 
 
 (26,854) (44,796) 
 
Deconsolidation of previously consolidated properties 
 28,360
 11,708
Acquisition of Noncontrolling Interests – Partially Owned Properties (13) (12,809) (16,023)
Net cash (used for) investing activities (261,049) (194,828) (639,458) (644,666) (6,977) (261,155)

See accompanying notes
F-9


Table of Contents


EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
 Year Ended December 31, Year Ended December 31,
 2012 2011 2010 2014 2013 2012
CASH FLOWS FROM FINANCING ACTIVITIES:  
  
  
  
  
  
Loan and bond acquisition costs $(21,209) $(20,421) $(8,811)
Debt financing costs $(10,982) $(16,526) $(21,209)
Mortgage deposits (7,699) (5,631) (57)
Mortgage notes payable:  
  
  
  
  
  
Proceeds 26,495
 190,905
 173,561
 
 902,886
 26,495
Restricted cash 2,370
 16,596
 73,232
 
 
 2,370
Lump sum payoffs (350,247) (974,956) (635,285) (88,788) (2,532,682) (350,247)
Scheduled principal repayments (14,088) (16,726) (16,769) (11,869) (12,658) (14,088)
(Loss) on debt extinguishments (272) 
 (2,457)
Notes, net:  
  
  
  
  
  
Proceeds 
 996,190
 595,422
 1,194,277
 1,245,550
 
Lump sum payoffs (975,991) (575,641) 
 (1,250,000) (400,000) (975,991)
Lines of credit:  
  
  
  
  
  
Proceeds 5,876,000
 1,455,000
 5,513,125
 7,167,000
 9,832,000
 5,876,000
Repayments (5,876,000) (1,455,000) (5,513,125) (6,949,000) (9,717,000) (5,876,000)
(Payments on) settlement of derivative instruments 
 (147,306) (10,040) (758) (44,063) 
Proceeds from sale of Common Shares 1,417,040
 173,484
 329,452
 
 
 1,417,040
Proceeds from Employee Share Purchase Plan (ESPP) 5,399
 5,262
 5,112
 3,392
 3,401
 5,399
Proceeds from exercise of options 49,039
 95,322
 71,596
 82,573
 17,252
 49,039
Common Shares repurchased and retired 
 
 (1,887) (1,777) 
 
Redemption of Preferred Shares (150,000) 
 (877) 
 
 (150,000)
Premium on redemption of Preferred Shares (23) 
 
 
 
 (23)
Payment of offering costs (39,359) (3,596) (4,657) (41) (1,047) (39,359)
Other financing activities, net (48) (48) (48) (49) (48) (48)
Acquisition of Noncontrolling Interests – Partially Owned Properties (5,501) 
 (13)
Contributions – Noncontrolling Interests – Partially Owned Properties 8,221
 75,911
 222
 5,684
 27,660
 8,221
Contributions – Noncontrolling Interests – Operating Partnership 5
 
 
 3
 5
 5
Distributions:  
  
  
  
  
  
Common Shares (473,451) (432,023) (379,969) (776,659) (681,610) (473,451)
Preferred Shares (13,416) (12,829) (14,471) (4,145) (4,145) (13,416)
Noncontrolling Interests – Operating Partnership (21,915) (20,002) (18,867) (30,744) (27,897) (21,915)
Noncontrolling Interests – Partially Owned Properties (5,083) (1,115) (2,918) (7,778) (6,442) (5,083)
Net cash (used for) provided by financing activities (556,533) (650,993) 151,541
Net increase (decrease) in cash and cash equivalents 228,669
 (47,487) 238,120
Net cash (used for) financing activities (692,861) (1,420,995) (556,331)
Net (decrease) increase in cash and cash equivalents (13,454) (559,056) 228,669
Cash and cash equivalents, beginning of year 383,921
 431,408
 193,288
 53,534
 612,590
 383,921
Cash and cash equivalents, end of year $612,590
 $383,921
 $431,408
 $40,080
 $53,534
 $612,590










See accompanying notes
F-10


Table of Contents


EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2012 2011 2010
SUPPLEMENTAL INFORMATION:  
  
  
Cash paid for interest, net of amounts capitalized $464,937
 $477,434
 $475,374
Net cash paid (received) for income and other taxes $673
 $645
 $(2,740)
Real estate acquisitions/dispositions/other:  
  
  
Mortgage loans assumed $137,644
 $158,240
 $359,082
Valuation of OP Units issued $66,606
 $
 $8,245
Mortgage loans (assumed) by purchaser $
 $
 $(39,999)
Amortization of deferred financing costs:  
  
  
Investment in real estate, net $
 $
 $(2,768)
Deferred financing costs, net $21,435
 $17,846
 $13,174
Amortization of discounts and premiums on debt:  
  
  
Mortgage notes payable $(10,333) $(8,260) $(9,208)
Notes, net $2,152
 $6,782
 $8,737
Amortization of deferred settlements on derivative instruments:  
  
  
Other liabilities $(534) $(535) $(534)
Accumulated other comprehensive income $14,678
 $4,343
 $3,338
Unrealized (gain) loss on derivative instruments:  
  
  
Other assets $7,448
 $6,826
 $13,019
Mortgage notes payable $(2,589) $(612) $(163)
Notes, net $(4,860) $(2,937) $7,497
Other liabilities $11,772
 $140,507
 $45,542
Accumulated other comprehensive income $(11,772) $(143,598) $(65,894)
Interest capitalized for real estate and unconsolidated entities under development:      
Investment in real estate, net $(21,661) $(8,785) $(13,008)
Investments in unconsolidated entities $(848) $(323) $
Consolidation of previously unconsolidated properties:  
  
  
Investment in real estate, net $
 $
 $(105,065)
Investments in unconsolidated entities $
 $
 $7,376
Deposits – restricted $
 $
 $(42,633)
Mortgage notes payable $
 $
 $112,631
Net other assets recorded $
 $
 $837
Deconsolidation of previously consolidated properties:  
  
  
Investment in real estate, net $
 $35,495
 $14,875
Investments in unconsolidated entities $
 $(7,135) $(3,167)
(Payments on) settlement of derivative instruments:  
  
  
Other liabilities $
 $(147,306) $(10,040)
Other:  
  
  
Receivable on sale of Common Shares $28,457
 $
 $37,550
Transfer from notes, net to mortgage notes payable $
 $
 $35,600




  Year Ended December 31,
  2014 2013 2012
SUPPLEMENTAL INFORMATION:  
  
  
Cash paid for interest, net of amounts capitalized $443,125
 $722,963
 $464,785
Net cash paid for income and other taxes $1,517
 $1,152
 $673
Real estate acquisitions/dispositions/other:  
  
  
Mortgage loans assumed $28,910
 $
 $137,644
Valuation of OP Units issued $
 $
 $66,606
Amortization of deferred financing costs:  
  
  
Investment in real estate, net $
 $(152) $
Deferred financing costs, net $11,088
 $22,577
 $21,435
Amortization of discounts and premiums on debt:  
  
  
Mortgage notes payable $(15,904) $(158,625) $(10,333)
Notes, net $2,384
 $2,186
 $2,152
Amortization of deferred settlements on derivative instruments:  
  
  
Other liabilities $(534) $(534) $(534)
Accumulated other comprehensive income $16,868
 $20,141
 $14,678
Loss from investments in unconsolidated entities:      
Investments in unconsolidated entities $4,610
 $53,066
 $14
Other liabilities $3,342
 $5,090
 $
Distributions from unconsolidated entities – return on capital:      
Investments in unconsolidated entities $5,360
 $2,448
 $575
Other liabilities $210
 $33
 $
Unrealized (gain) loss on derivative instruments:  
  
  
Other assets $10,160
 $(17,139) $7,448
Mortgage notes payable $
 $
 $(2,589)
Notes, net $1,597
 $(1,523) $(4,860)
Other liabilities $21,489
 $(39) $11,772
Accumulated other comprehensive income $(33,306) $18,771
 $(11,772)
Acquisition of Archstone, net of cash acquired:      
Investment in real estate, net $39,929
 $(8,687,355) $
Investments in unconsolidated entities $(33,993) $(225,568) $
Deposits – restricted $
 $(528) $
Escrow deposits – mortgage $
 $(37,582) $
Deferred financing costs, net $
 $(25,780) $
Other assets $(2,586) $(215,622) $
Mortgage notes payable $
 $3,076,876
 $
Accounts payable and accrued expenses $(146) $16,984
 $
Accrued interest payable $
 $11,305
 $
Other liabilities $(3,204) $117,299
 $
Security deposits $
 $10,965
 $
Issuance of Common Shares $
 $1,929,868
 $
Noncontrolling Interests – Partially Owned Properties $
 $28,263
 $
Interest capitalized for real estate and unconsolidated entities under development:      
Investment in real estate, net $(52,717) $(45,533) $(21,661)
Investments in unconsolidated entities $(65) $(1,788) $(848)
Investments in unconsolidated entities:      
Investments in unconsolidated entities $(6,318) $(13,656) $(5,291)
Other liabilities $(9,450) $(52,815) $
Consolidation of previously unconsolidated properties:      
Investment in real estate, net $(64,319) $
 $
Investments in unconsolidated entities $(847) $
 $
Accounts payable and accrued expenses $1,987
 $
 $
Other liabilities $18,383
 $
 $

See accompanying notes
F-11


Table of Contents


EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
SUPPLEMENTAL INFORMATION (continued):      
(Payments on) settlement of derivative instruments:  
  
  
Other assets $6,623
 $(50) $
Other liabilities $(7,381) $(44,013) $
Other:  
  
  
Receivable on sale of Common Shares $
 $
 $28,457
Foreign currency translation adjustments $552
 $(613) $


See accompanying notes
F-12


Table of Contents


EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands)

 Year Ended December 31, Year Ended December 31,
SHAREHOLDERS’ EQUITY 2012 2011 2010 2014 2013 2012
            
PREFERRED SHARES  
  
  
  
  
  
Balance, beginning of year $200,000
 $200,000
 $208,773
 $50,000
 $50,000
 $200,000
Redemption of 6.48% Series N Cumulative Redeemable (150,000)



 
 
 (150,000)
Redemption of 7.00% Series E Cumulative Convertible 
 
 (834)
Conversion of 7.00% Series E Cumulative Convertible 
 
 (7,378)
Conversion of 7.00% Series H Cumulative Convertible 
 
 (561)
Balance, end of year $50,000
 $200,000
 $200,000
 $50,000
 $50,000
 $50,000
            
COMMON SHARES, $0.01 PAR VALUE  
  
  
  
  
  
Balance, beginning of year $2,975
 $2,902
 $2,800
 $3,605
 $3,251
 $2,975
Conversion of Preferred Shares into Common Shares 
 
 3
Conversion of OP Units into Common Shares 7
 3
 9
 1
 1
 7
Issuance of Common Shares 250
 39
 61
 
 345
 250
Exercise of share options 16
 29
 25
 21
 5
 16
Employee Share Purchase Plan (ESPP) 1
 1
 2
 
 1
 1
Conversion of restricted shares to LTIP Units 
 (1) 
Share-based employee compensation expense:  
  
  
  
  
  
Restricted shares 2
 2
 2
 2
 2
 2
Balance, end of year $3,251
 $2,975
 $2,902
 $3,629
 $3,605
 $3,251
            
PAID IN CAPITAL  
  
  
  
  
  
Balance, beginning of year $5,047,186
 $4,741,521
 $4,477,426
 $8,561,500
 $6,542,355
 $5,047,186
Common Share Issuance:  
  
  
  
  
  
Conversion of Preferred Shares into Common Shares 
 
 7,936
Conversion of OP Units into Common Shares 18,922
 8,577
 19,713
 2,364
 1,698
 18,922
Issuance of Common Shares 1,388,333
 201,903
 291,841
 
 1,929,523
 1,388,333
Exercise of share options 49,023
 95,293
 71,571
 82,552
 17,247
 49,023
Employee Share Purchase Plan (ESPP) 5,398
 5,261
 5,110
 3,392
 3,400
 5,398
Conversion of restricted shares to LTIP Units 
 (3,933) 
Share-based employee compensation expense:  
  
  
  
  
  
Restricted shares 8,934
 9,100
 9,779
 9,902
 13,262
 8,934
Share options 11,752
 9,545
 7,421
 7,349
 10,514
 11,752
ESPP discount 965
 1,194
 1,290
 859
 632
 965
Common Shares repurchased and retired 
 
 (1,887) (1,777) 
 
Offering costs (39,359) (3,596) (4,657) (41) (1,047) (39,359)
Premium on redemption of Preferred Shares – original issuance costs 5,129




 
 
 5,129
Supplemental Executive Retirement Plan (SERP) 282
 10,765
 8,559
 7,374
 (422) 282
Acquisition of Noncontrolling Interests – Partially Owned Properties 1,293
 (4,784) (16,888) (2,308) 
 1,293
Change in market value of Redeemable Noncontrolling Interests – Operating
Partnership
 38,734
 (22,714) (129,918) (139,818) 79,667
 38,734
Adjustment for Noncontrolling Interests ownership in Operating Partnership 5,763
 (946) (5,775) 4,992
 (35,329) 5,763
Balance, end of year $6,542,355
 $5,047,186
 $4,741,521
 $8,536,340
 $8,561,500
 $6,542,355




See accompanying notes
F-12F-13


Table of Contents


EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
(Amounts in thousands)
 Year Ended December 31, Year Ended December 31,
SHAREHOLDERS’ EQUITY (continued) 2012 2011 2010 2014 2013 2012
            
RETAINED EARNINGS  
  
  
  
  
  
Balance, beginning of year $615,572
 $203,581
 $353,659
 $2,047,258
 $887,355
 $615,572
Net income attributable to controlling interests 841,719
 893,585
 283,610
 631,308
 1,830,613
 841,719
Common Share distributions (554,429) (467,729) (419,320) (723,782) (666,565) (554,429)
Preferred Share distributions (10,355) (13,865) (14,368) (4,145) (4,145) (10,355)
Premium on redemption of Preferred Shares – cash charge
(23)



 
 
 (23)
Premium on redemption of Preferred Shares – original issuance costs
(5,129)



 
 
 (5,129)
Balance, end of year $887,355
 $615,572
 $203,581
 $1,950,639
 $2,047,258
 $887,355
            
ACCUMULATED OTHER COMPREHENSIVE (LOSS)  
  
  
  
  
  
Balance, beginning of year $(196,718) $(57,818) $4,681
 $(155,162) $(193,148) $(196,718)
Accumulated other comprehensive income (loss) – derivative instruments:  
  
  
Unrealized holding (losses) arising during the year (11,772) (143,598) (65,894)
Accumulated other comprehensive (loss) income – derivative instruments:  
  
  
Unrealized holding (losses) gains arising during the year (33,306) 18,771
 (11,772)
Losses reclassified into earnings from other comprehensive income 14,678
 4,343
 3,338
 16,868
 20,141
 14,678
Accumulated other comprehensive income – other instruments:  
  
  
Accumulated other comprehensive income (loss) – other instruments:  
  
  
Unrealized holding gains arising during the year 664
 355
 57
 
 583
 664
(Gains) realized during the year 
 (2,122) 
Accumulated other comprehensive (loss) income – foreign currency:      
Currency translation adjustments arising during the year (552) 613
 
Balance, end of year $(193,148) $(196,718) $(57,818) $(172,152) $(155,162) $(193,148)
            
NONCONTROLLING INTERESTS  
  
  
  
  
  
            
OPERATING PARTNERSHIP  
  
  
  
  
  
Balance, beginning of year $119,536
 $110,399
 $116,120
 $211,412
 $159,606
 $119,536
Issuance of OP Units to Noncontrolling Interests 66,606
 
 8,245
 
 
 66,606
Issuance of LTIP Units to Noncontrolling Interests 5
 
 
Issuance of restricted units to Noncontrolling Interests 3
 5
 5
Conversion of OP Units held by Noncontrolling Interests into OP Units held by
General Partner
 (18,929) (8,580) (19,722) (2,365) (1,699) (18,929)
Conversion of restricted shares to LTIP Units 
 3,934
 
Equity compensation associated with Noncontrolling Interests 5,307
 3,641
 2,524
 11,969
 13,609
 5,307
Net income attributable to Noncontrolling Interests 38,641
 40,780
 13,099
 24,831
 75,278
 38,641
Distributions to Noncontrolling Interests (25,095) (21,434) (20,300) (28,676) (26,277) (25,095)
Change in carrying value of Redeemable Noncontrolling Interests – Operating
Partnership
 (20,702) (10,150) 4,658
 2,229
 (44,439) (20,702)
Adjustment for Noncontrolling Interests ownership in Operating Partnership (5,763) 946
 5,775
 (4,992) 35,329
 (5,763)
Balance, end of year $159,606
 $119,536
 $110,399
 $214,411
 $211,412
 $159,606
            
PARTIALLY OWNED PROPERTIES  
  
  
  
  
  
Balance, beginning of year $74,306
 $7,991
 $11,054
 $126,583
 $77,688
 $74,306
Net income (loss) attributable to Noncontrolling Interests 844
 832
 (726) 2,544
 (538) 844
Contributions by Noncontrolling Interests 8,221
 75,911
 222
 5,684
 27,660
 8,221
Distributions to Noncontrolling Interests (5,131) (1,163) (2,952) (7,827) (6,490) (5,131)
Acquisition of Archstone 
 28,263
 
Acquisition of Noncontrolling Interests – Partially Owned Properties (1,306) (8,025) 175
 (2,244) 
 (1,306)
Other 754
 (1,240) 218
 169
 
 754
Balance, end of year $77,688
 $74,306
 $7,991
 $124,909
 $126,583
 $77,688

See accompanying notes
F-13F-14


Table of Contents


ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

 December 31, 2012 December 31, 2011 December 31, 2014 December 31, 2013
ASSETSASSETS    
Investment in real estate  
  
  
  
Land $4,554,912
 $4,367,816
 $6,295,404
 $6,192,512
Depreciable property 15,711,944
 15,554,740
 19,851,504
 19,226,047
Projects under development 387,750
 160,190
 1,343,919
 988,867
Land held for development 353,823
 325,200
 184,556
 393,522
Investment in real estate 21,008,429
 20,407,946
 27,675,383
 26,800,948
Accumulated depreciation (4,912,221) (4,539,583) (5,432,805) (4,807,709)
Investment in real estate, net 16,096,208
 15,868,363
 22,242,578
 21,993,239
Cash and cash equivalents 612,590
 383,921
 40,080
 53,534
Investments in unconsolidated entities 17,877
 12,327
 105,434
 178,526
Deposits – restricted 250,442
 152,237
 72,303
 103,567
Escrow deposits – mortgage 9,129
 10,692
 48,085
 42,636
Deferred financing costs, net 44,382
 44,608
 58,380
 58,486
Other assets 170,372
 187,155
 383,754
 404,557
Total assets $17,201,000
 $16,659,303
 $22,950,614
 $22,834,545
        
LIABILITIES AND CAPITALLIABILITIES AND CAPITAL    
Liabilities:  
  
  
  
Mortgage notes payable $3,898,369
 $4,111,487
 $5,086,515
 $5,174,166
Notes, net 4,630,875
 5,609,574
 5,425,346
 5,477,088
Lines of credit 
 
 333,000
 115,000
Accounts payable and accrued expenses 38,372
 35,206
 153,590
 118,791
Accrued interest payable 76,223
 88,121
 89,540
 78,309
Other liabilities 304,518
 291,289
 389,915
 347,748
Security deposits 66,988
 65,286
 75,633
 71,592
Distributions payable 260,176
 179,079
 188,566
 243,511
Total liabilities 9,275,521
 10,380,042
 11,742,105
 11,626,205
        
Commitments and contingencies  
  
  
  
        
Redeemable Limited Partners 398,372
 416,404
 500,733
 363,144
Capital:  
  
  
  
Partners' Capital:  
  
  
  
Preference Units 50,000
 200,000
 50,000
 50,000
General Partner 7,432,961
 5,665,733
 10,490,608
 10,612,363
Limited Partners 159,606
 119,536
 214,411
 211,412
Accumulated other comprehensive (loss) (193,148) (196,718) (172,152) (155,162)
Total partners' capital 7,449,419
 5,788,551
 10,582,867
 10,718,613
Noncontrolling Interests – Partially Owned Properties 77,688
 74,306
 124,909
 126,583
Total capital 7,527,107
 5,862,857
 10,707,776
 10,845,196
Total liabilities and capital $17,201,000
 $16,659,303
 $22,950,614
 $22,834,545









See accompanying notes
F-14F-15


Table of Contents



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

  Year Ended December 31,
  2012 2011 2010
REVENUES  
    
Rental income $2,114,142
 $1,874,465
 $1,665,233
Fee and asset management 9,573
 9,026
 9,476
Total revenues 2,123,715
 1,883,491
 1,674,709
       
EXPENSES  
  
  
Property and maintenance 415,986
 387,968
 374,135
Real estate taxes and insurance 241,876
 211,518
 200,779
Property management 81,902
 81,867
 79,857
Fee and asset management 4,663
 4,279
 4,998
Depreciation 664,082
 612,579
 581,469
General and administrative 47,248
 43,605
 39,881
Impairment 
 
 45,380
Total expenses 1,455,757
 1,341,816
 1,326,499
       
Operating income 667,958
 541,675
 348,210
       
Interest and other income 150,547
 7,965
 5,118
Other expenses (27,361) (14,292) (11,792)
Interest:  
  
  
Expense incurred, net (457,666) (464,277) (460,748)
Amortization of deferred financing costs (21,370) (16,766) (9,576)
Income (loss) before income and other taxes, (loss) from investments in
unconsolidated entities, net gain (loss) on sales of unconsolidated entities and
land parcels and discontinued operations
 312,108
 54,305
 (128,788)
Income and other tax (expense) benefit (539) (728) (291)
(Loss) from investments in unconsolidated entities (14) 
 (735)
Net gain on sales of unconsolidated entities 
 
 28,101
Net gain (loss) on sales of land parcels 
 4,217
 (1,395)
Income (loss) from continuing operations 311,555
 57,794
 (103,108)
Discontinued operations, net 569,649
 877,403
 399,091
Net income 881,204
 935,197
 295,983
Net (income) loss attributable to Noncontrolling Interests –  
  
  
Partially Owned Properties (844) (832) 726
Net income attributable to controlling interests $880,360
 $934,365
 $296,709
       
ALLOCATION OF NET INCOME:      
Preference Units $10,355
 $13,865
 $14,368
Premium on redemption of Preference Units $5,152
 $
 $
       
General Partner $826,212
 $879,720
 $269,242
Limited Partners 38,641
 40,780
 13,099
Net income available to Units $864,853
 $920,500
 $282,341
       
Earnings per Unit – basic:  
  
  
Income (loss) from continuing operations available to Units $0.93
 $0.14
 $(0.39)
Net income available to Units $2.73
 $2.98
 $0.95
Weighted average Units outstanding 316,554
 308,062
 296,527
       
Earnings per Unit – diluted:  
  
  
Income (loss) from continuing operations available to Units $0.92
 $0.14
 $(0.39)
Net income available to Units $2.70
 $2.95
 $0.95
Weighted average Units outstanding 319,766
 312,065
 296,527


See accompanying notes
F-15


Table of Contents

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

  Year Ended December 31,
  2012 2011 2010
Comprehensive income:  
  
  
Net income $881,204
 $935,197
 $295,983
Other comprehensive income (loss):      
Other comprehensive income (loss) – derivative instruments:  
  
  
Unrealized holding (losses) arising during the year (11,772) (143,598) (65,894)
Losses reclassified into earnings from other comprehensive income 14,678
 4,343
 3,338
Other comprehensive income – other instruments:  
  
  
Unrealized holding gains arising during the year 664
 355
 57
Other comprehensive income (loss) 3,570
 (138,900) (62,499)
Comprehensive income 884,774
 796,297
 233,484
Comprehensive (income) loss attributable to Noncontrolling Interests –
   Partially Owned Properties
 (844) (832) 726
Comprehensive income attributable to controlling interests $883,930
 $795,465
 $234,210



























  Year Ended December 31,
  2014 2013 2012
REVENUES  
    
Rental income $2,605,311
 $2,378,004
 $1,737,929
Fee and asset management 9,437
 9,698
 9,573
Total revenues 2,614,748
 2,387,702
 1,747,502
       
EXPENSES  
  
  
Property and maintenance 473,098
 449,427
 332,219
Real estate taxes and insurance 325,401
 293,999
 206,723
Property management 79,636
 84,342
 81,902
Fee and asset management 5,429
 6,460
 4,663
Depreciation 758,861
 978,973
 560,669
General and administrative 50,948
 62,179
 47,233
Total expenses 1,693,373
 1,875,380
 1,233,409
       
Operating income 921,375
 512,322
 514,093
       
Interest and other income 4,462
 5,283
 151,060
Other expenses (9,073) (29,630) (27,796)
Interest:  
  
  
Expense incurred, net (457,191) (586,854) (455,236)
Amortization of deferred financing costs (11,088) (22,197) (21,295)
Income (loss) before income and other taxes, (loss) from investments
in unconsolidated entities, net gain on sales of real estate properties and
land parcels and discontinued operations
 448,485
 (121,076) 160,826
Income and other tax (expense) benefit (1,394) (1,169) (514)
(Loss) from investments in unconsolidated entities (7,952) (58,156) (14)
Net gain on sales of real estate properties 212,685
 
 
Net gain on sales of land parcels 5,277
 12,227
 
Income (loss) from continuing operations 657,101
 (168,174) 160,298
Discontinued operations, net 1,582
 2,073,527
 720,906
Net income 658,683
 1,905,353
 881,204
Net (income) loss attributable to Noncontrolling Interests – Partially
Owned Properties
��(2,544) 538
 (844)
Net income attributable to controlling interests $656,139
 $1,905,891
 $880,360
       
ALLOCATION OF NET INCOME:      
Preference Units $4,145
 $4,145
 $10,355
Premium on redemption of Preference Units $
 $
 $5,152
       
General Partner $627,163
 $1,826,468
 $826,212
Limited Partners 24,831
 75,278
 38,641
Net income available to Units $651,994
 $1,901,746
 $864,853
       
Earnings per Unit – basic:  
  
  
Income (loss) from continuing operations available to Units $1.73
 $(0.47) $0.45
Net income available to Units $1.74
 $5.16
 $2.73
Weighted average Units outstanding 374,899
 368,038
 316,554
       
Earnings per Unit – diluted:  
  
  
Income (loss) from continuing operations available to Units $1.72
 $(0.47) $0.45
Net income available to Units $1.73
 $5.16
 $2.70
Weighted average Units outstanding 377,735
 368,038
 319,766
       
Distributions declared per Unit outstanding $2.00
 $1.85
 $1.78


See accompanying notes
F-16


Table of Contents


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

  Year Ended December 31,
  2014 2013 2012
Comprehensive income:  
  
  
Net income $658,683
 $1,905,353
 $881,204
Other comprehensive (loss) income:      
Other comprehensive (loss) income – derivative instruments:  
  
  
Unrealized holding (losses) gains arising during the year (33,306) 18,771
 (11,772)
Losses reclassified into earnings from other comprehensive income 16,868
 20,141
 14,678
Other comprehensive income (loss) – other instruments:  
  
  
Unrealized holding gains arising during the year 
 583
 664
(Gains) realized during the year 
 (2,122) 
Other comprehensive (loss) income – foreign currency:      
Currency translation adjustments arising during the year (552) 613
 
Other comprehensive (loss) income (16,990) 37,986
 3,570
Comprehensive income 641,693
 1,943,339
 884,774
Comprehensive (income) loss attributable to Noncontrolling Interests –
Partially Owned Properties
 (2,544) 538
 (844)
Comprehensive income attributable to controlling interests $639,149
 $1,943,877
 $883,930




See accompanying notes
F-17


Table of Contents


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

  Year Ended December 31,
  2012 2011 2010
CASH FLOWS FROM OPERATING ACTIVITIES:  
  
  
Net income $881,204
 $935,197
 $295,983
Adjustments to reconcile net income to net cash provided by operating activities:  
  
  
Depreciation 684,992
 663,616
 673,403
Amortization of deferred financing costs 21,435
 17,846
 10,406
Amortization of discounts and premiums on debt (8,181) (1,478) (471)
Amortization of deferred settlements on derivative instruments 14,144
 3,808
 2,804
Impairment 
 
 45,380
Write-off of pursuit costs 9,056
 5,075
 5,272
Income from technology investments 
 (4,537) 
Loss from investments in unconsolidated entities 14
 
 735
Distributions from unconsolidated entities – return on capital 575
 319
 61
Net (gain) on sales of unconsolidated entities 
 
 (28,101)
Net (gain) loss on sales of land parcels 
 (4,217) 1,395
Net (gain) on sales of discontinued operations (548,278) (826,489) (297,956)
Loss on debt extinguishments 272
 
 2,457
Unrealized (gain) loss on derivative instruments (1) 186
 1
Compensation paid with Company Common Shares 24,832
 21,177
 18,875
Changes in assets and liabilities:  
  
  
(Increase) decrease in deposits – restricted (4,091) 4,523
 3,316
(Increase) in other assets (20,411) (2,743) (9,048)
(Decrease) increase in accounts payable and accrued expenses (2,102) 332
 (5,454)
(Decrease) in accrued interest payable (11,898) (10,510) (4,000)
Increase (decrease) in other liabilities 2,987
 (8,245) 9,972
Increase in security deposits 1,702
 4,474
 1,007
Net cash provided by operating activities 1,046,251
 798,334
 726,037
       
CASH FLOWS FROM INVESTING ACTIVITIES:  
  
  
Investment in real estate – acquisitions (843,976) (1,441,599) (1,189,210)
Investment in real estate – development/other (180,409) (120,741) (131,301)
Improvements to real estate (152,828) (144,452) (138,208)
Additions to non-real estate property (8,821) (7,110) (2,991)
Interest capitalized for real estate and unconsolidated entities under development (22,509) (9,108) (13,008)
Proceeds from disposition of real estate, net 1,049,219
 1,500,583
 672,700
Investments in unconsolidated entities (5,291) (2,021) 
Distributions from unconsolidated entities – return of capital 
 
 26,924
Proceeds from sale of investment securities 
 
 25,000
Proceeds from technology investments 
 4,537
 
(Increase) decrease in deposits on real estate acquisitions and investments, net (97,984) 7,631
 137,106
Decrease in mortgage deposits 1,563
 1,901
 4,699
Consolidation of previously unconsolidated properties 
 
 (26,854)
Deconsolidation of previously consolidated properties 
 28,360
 11,708
Acquisition of Noncontrolling Interests – Partially Owned Properties (13) (12,809) (16,023)
Net cash (used for) investing activities (261,049) (194,828) (639,458)





See accompanying notes
F-17


Table of Contents

ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2012 2011 2010
CASH FLOWS FROM FINANCING ACTIVITIES:  
  
  
Loan and bond acquisition costs $(21,209) $(20,421) $(8,811)
Mortgage notes payable:  
  
  
Proceeds 26,495
 190,905
 173,561
Restricted cash 2,370
 16,596
 73,232
Lump sum payoffs (350,247) (974,956) (635,285)
Scheduled principal repayments (14,088) (16,726) (16,769)
(Loss) on debt extinguishments (272) 
 (2,457)
Notes, net:  
  
  
Proceeds 
 996,190
 595,422
Lump sum payoffs (975,991) (575,641) 
Lines of credit:  
  
  
Proceeds 5,876,000
 1,455,000
 5,513,125
Repayments (5,876,000) (1,455,000) (5,513,125)
(Payments on) settlement of derivative instruments 
 (147,306) (10,040)
Proceeds from sale of OP Units 1,417,040
 173,484
 329,452
Proceeds from EQR's Employee Share Purchase Plan (ESPP) 5,399
 5,262
 5,112
Proceeds from exercise of EQR options 49,039
 95,322
 71,596
OP Units repurchased and retired 
 
 (1,887)
Redemption of Preference Units (150,000) 
 (877)
Premium on redemption of Preference Units (23) 
 
Payment of offering costs (39,359) (3,596) (4,657)
Other financing activities, net (48) (48) (48)
Contributions – Noncontrolling Interests – Partially Owned Properties 8,221
 75,911
 222
Contributions – Limited Partners 5
 
 
Distributions:  
  
  
OP Units – General Partner (473,451) (432,023) (379,969)
Preference Units (13,416) (12,829) (14,471)
OP Units – Limited Partners (21,915) (20,002) (18,867)
Noncontrolling Interests – Partially Owned Properties (5,083) (1,115) (2,918)
Net cash (used for) provided by financing activities (556,533) (650,993) 151,541
Net increase (decrease) in cash and cash equivalents 228,669
 (47,487) 238,120
Cash and cash equivalents, beginning of year 383,921
 431,408
 193,288
Cash and cash equivalents, end of year $612,590
 $383,921
 $431,408





  Year Ended December 31,
  2014 2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:  
  
  
Net income $658,683
 $1,905,353
 $881,204
Adjustments to reconcile net income to net cash provided by operating activities:  
  
  
Depreciation 758,861
 1,013,353
 684,992
Amortization of deferred financing costs 11,088
 22,425
 21,435
Amortization of above/below market leases 3,222
 898
 
Amortization of discounts and premiums on debt (13,520) (156,439) (8,181)
Amortization of deferred settlements on derivative instruments 16,334
 19,607
 14,144
Write-off of pursuit costs 3,607
 5,184
 9,056
Loss from investments in unconsolidated entities 7,952
 58,156
 14
Distributions from unconsolidated entities – return on capital 5,570
 2,481
 575
Net (gain) on sales of investment securities (57) (4,203) 
Net (gain) on sales of real estate properties (212,685) 
 
Net (gain) on sales of land parcels (5,277) (12,227) 
Net (gain) on sales of discontinued operations (179) (2,036,505) (548,278)
Unrealized (gain) loss on derivative instruments (60) 70
 (1)
Compensation paid with Company Common Shares 27,543
 35,474
 24,832
Changes in assets and liabilities:  
  
  
(Increase) decrease in deposits – restricted (1,740) 3,684
 (4,091)
Decrease in mortgage deposits 1,452
 1,813
 176
Decrease (increase) in other assets 21,773
 3,742
 (20,411)
Increase (decrease) in accounts payable and accrued expenses 17,797
 6,229
 (2,102)
Increase (decrease) in accrued interest payable 11,231
 (9,219) (11,898)
Increase in other liabilities 8,437
 15,401
 2,987
Increase (decrease) in security deposits 4,041
 (6,361) 1,702
Net cash provided by operating activities 1,324,073
 868,916
 1,046,155
       
CASH FLOWS FROM INVESTING ACTIVITIES:  
  
  
Acquisition of Archstone, net of cash acquired 
 (4,000,875) 
Investment in real estate – acquisitions (469,989) (108,308) (843,976)
Investment in real estate – development/other (530,387) (377,442) (180,409)
Capital expenditures to real estate (185,957) (135,816) (152,828)
Non-real estate capital additions (5,286) (4,134) (8,821)
Interest capitalized for real estate and unconsolidated entities under development (52,782) (47,321) (22,509)
Proceeds from disposition of real estate, net 522,647
 4,551,454
 1,049,219
Investments in unconsolidated entities (15,768) (66,471) (5,291)
Distributions from unconsolidated entities – return of capital 103,793
 25,471
 
Proceeds from sale of investment securities 57
 4,878
 
Decrease (increase) in deposits on real estate acquisitions and investments, net 33,004
 143,694
 (97,984)
Decrease in mortgage deposits 798
 7,893
 1,444
Consolidation of previously unconsolidated properties (44,796) 
 
Net cash (used for) investing activities (644,666) (6,977) (261,155)







See accompanying notes
F-18


Table of Contents


ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2012 2011 2010
SUPPLEMENTAL INFORMATION:  
  
  
Cash paid for interest, net of amounts capitalized $464,937
 $477,434
 $475,374
Net cash paid (received) for income and other taxes $673
 $645
 $(2,740)
Real estate acquisitions/dispositions/other:  
  
  
Mortgage loans assumed $137,644
 $158,240
 $359,082
Valuation of OP Units issued $66,606
 $
 $8,245
Mortgage loans (assumed) by purchaser $
 $
 $(39,999)
Amortization of deferred financing costs:  
  
  
Investment in real estate, net $
 $
 $(2,768)
Deferred financing costs, net $21,435
 $17,846
 $13,174
Amortization of discounts and premiums on debt:  
  
  
Mortgage notes payable $(10,333) $(8,260) $(9,208)
Notes, net $2,152
 $6,782
 $8,737
Amortization of deferred settlements on derivative instruments:  
  
  
Other liabilities $(534) $(535) $(534)
Accumulated other comprehensive income $14,678
 $4,343
 $3,338
Unrealized (gain) loss on derivative instruments:  
  
  
Other assets $7,448
 $6,826
 $13,019
Mortgage notes payable $(2,589) $(612) $(163)
Notes, net $(4,860) $(2,937) $7,497
Other liabilities $11,772
 $140,507
 $45,542
Accumulated other comprehensive income $(11,772) $(143,598) $(65,894)
Interest capitalized for real estate and unconsolidated entities under development:      
Investment in real estate, net $(21,661) $(8,785) $(13,008)
Investments in unconsolidated entities $(848) $(323) $
Consolidation of previously unconsolidated properties:  
  
  
Investment in real estate, net $
 $
 $(105,065)
Investments in unconsolidated entities $
 $
 $7,376
Deposits – restricted $
 $
 $(42,633)
Mortgage notes payable $
 $
 $112,631
Net other assets recorded $
 $
 $837
Deconsolidation of previously consolidated properties: 

  
  
Investment in real estate, net $
 $35,495
 $14,875
Investments in unconsolidated entities $
 $(7,135) $(3,167)
(Payments on) settlement of derivative instruments:  
  
  
Other liabilities $
 $(147,306) $(10,040)
Other:  
  
  
Receivable on sale of OP Units $28,457
 $
 $37,550
Transfer from notes, net to mortgage notes payable $
 $
 $35,600
  Year Ended December 31,
  2014 2013 2012
CASH FLOWS FROM FINANCING ACTIVITIES:  
  
  
Debt financing costs $(10,982) $(16,526) $(21,209)
Mortgage deposits (7,699) (5,631) (57)
Mortgage notes payable:  
  
  
Proceeds 
 902,886
 26,495
Restricted cash 
 
 2,370
Lump sum payoffs (88,788) (2,532,682) (350,247)
Scheduled principal repayments (11,869) (12,658) (14,088)
Notes, net:  
  
  
Proceeds 1,194,277
 1,245,550
 
Lump sum payoffs (1,250,000) (400,000) (975,991)
Lines of credit:  
  
  
Proceeds 7,167,000
 9,832,000
 5,876,000
Repayments (6,949,000) (9,717,000) (5,876,000)
(Payments on) settlement of derivative instruments (758) (44,063) 
Proceeds from sale of OP Units 
 
 1,417,040
Proceeds from EQR's Employee Share Purchase Plan (ESPP) 3,392
 3,401
 5,399
Proceeds from exercise of EQR options 82,573
 17,252
 49,039
OP units repurchased and retired (1,777) 
 
Redemption of Preference Units 
 
 (150,000)
Premium on redemption of Preference Units 
 
 (23)
Payment of offering costs (41) (1,047) (39,359)
Other financing activities, net (49) (48) (48)
Acquisition of Noncontrolling Interests – Partially Owned Properties (5,501) 
 (13)
Contributions – Noncontrolling Interests – Partially Owned Properties 5,684
 27,660
 8,221
Contributions – Limited Partners 3
 5
 5
Distributions:  
  
  
OP Units – General Partner (776,659) (681,610) (473,451)
Preference Units (4,145) (4,145) (13,416)
OP Units – Limited Partners (30,744) (27,897) (21,915)
Noncontrolling Interests – Partially Owned Properties (7,778) (6,442) (5,083)
Net cash (used for) financing activities (692,861) (1,420,995) (556,331)
Net (decrease) increase in cash and cash equivalents (13,454) (559,056) 228,669
Cash and cash equivalents, beginning of year 53,534
 612,590
 383,921
Cash and cash equivalents, end of year $40,080
 $53,534
 $612,590










See accompanying notes
F-19


Table of Contents


ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
SUPPLEMENTAL INFORMATION:  
  
  
Cash paid for interest, net of amounts capitalized $443,125
 $722,963
 $464,785
Net cash paid for income and other taxes $1,517
 $1,152
 $673
Real estate acquisitions/dispositions/other:  
  
  
Mortgage loans assumed $28,910
 $
 $137,644
Valuation of OP Units issued $
 $
 $66,606
Amortization of deferred financing costs:  
  
  
Investment in real estate, net $
 $(152) $
Deferred financing costs, net $11,088
 $22,577
 $21,435
Amortization of discounts and premiums on debt:  
  
  
Mortgage notes payable $(15,904) $(158,625) $(10,333)
Notes, net $2,384
 $2,186
 $2,152
Amortization of deferred settlements on derivative instruments:  
  
  
Other liabilities $(534) $(534) $(534)
Accumulated other comprehensive income $16,868
 $20,141
 $14,678
Loss from investments in unconsolidated entities:      
Investments in unconsolidated entities $4,610
 $53,066
 $14
Other liabilities $3,342
 $5,090
 $
Distributions from unconsolidated entities – return on capital:      
Investments in unconsolidated entities $5,360
 $2,448
 $575
Other liabilities $210
 $33
 $
Unrealized (gain) loss on derivative instruments:  
  
  
Other assets $10,160
 $(17,139) $7,448
Mortgage notes payable $
 $
 $(2,589)
Notes, net $1,597
 $(1,523) $(4,860)
Other liabilities $21,489
 $(39) $11,772
Accumulated other comprehensive income $(33,306) $18,771
 $(11,772)
Acquisition of Archstone, net of cash acquired:      
Investment in real estate, net $39,929
 $(8,687,355) $
Investments in unconsolidated entities $(33,993) $(225,568) $
Deposits – restricted $
 $(528) $
Escrow deposits – mortgage $
 $(37,582) $
Deferred financing costs, net $
 $(25,780) $
Other assets $(2,586) $(215,622) $
Mortgage notes payable $
 $3,076,876
 $
Accounts payable and accrued expenses $(146) $16,984
 $
Accrued interest payable $
 $11,305
 $
Other liabilities $(3,204) $117,299
 $
Security deposits $
 $10,965
 $
Issuance of OP Units $
 $1,929,868
 $
Noncontrolling Interests – Partially Owned Properties $
 $28,263
 $
Interest capitalized for real estate and unconsolidated entities under development:      
Investment in real estate, net $(52,717) $(45,533) $(21,661)
Investments in unconsolidated entities $(65) $(1,788) $(848)
Investments in unconsolidated entities:      
Investments in unconsolidated entities $(6,318) $(13,656) $(5,291)
Other liabilities $(9,450) $(52,815) $
Consolidation of previously unconsolidated properties:      
Investment in real estate, net $(64,319) $
 $
Investments in unconsolidated entities $(847) $
 $
Accounts payable and accrued expenses $1,987
 $
 $
Other liabilities $18,383
 $
 $

See accompanying notes
F-20


Table of Contents


ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
SUPPLEMENTAL INFORMATION (continued):      
(Payments on) settlement of derivative instruments:      
Other assets $6,623
 $(50) $
Other liabilities $(7,381) $(44,013) $
Other:      
Receivable on sale of OP Units $
 $
 $28,457
Foreign currency translation adjustments $552
 $(613) $


See accompanying notes
F-21


Table of Contents


ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
(Amounts in thousands)
 Year Ended December 31, Year Ended December 31,
PARTNERS' CAPITAL 2012 2011 2010 2014 2013 2012
            
PREFERENCE UNITS  
  
  
  
  
  
Balance, beginning of year $200,000
 $200,000
 $208,773
 $50,000
 $50,000
 $200,000
Redemption of 6.48% Series N Cumulative Redeemable (150,000) 
 
 
 
 (150,000)
Redemption of 7.00% Series E Cumulative Convertible 
 
 (834)
Conversion of 7.00% Series E Cumulative Convertible 
 
 (7,378)
Conversion of 7.00% Series H Cumulative Convertible 
 
 (561)
Balance, end of year $50,000
 $200,000
 $200,000
 $50,000
 $50,000
 $50,000
            
GENERAL PARTNER  
  
  
  
  
  
Balance, beginning of year $5,665,733
 $4,948,004
 $4,833,885
 $10,612,363
 $7,432,961
 $5,665,733
OP Unit Issuance:  
  
  
  
  
  
Conversion of Preference Units into OP Units held by General Partner 
 
 7,939
Conversion of OP Units held by Limited Partners into OP Units held by      
General Partner 18,929
 8,580
 19,722
Conversion of OP Units held by Limited Partners into OP Units held by
General Partner
 2,365
 1,699
 18,929
Issuance of OP Units 1,388,583
 201,942
 291,902
 
 1,929,868
 1,388,583
Exercise of EQR share options 49,039
 95,322
 71,596
 82,573
 17,252
 49,039
EQR's Employee Share Purchase Plan (ESPP) 5,399
 5,262
 5,112
 3,392
 3,401
 5,399
Conversion of EQR restricted shares to LTIP Units 
 (3,934) 
Share-based employee compensation expense:  
  
  
  
  
  
EQR restricted shares 8,936
 9,102
 9,781
 9,904
 13,264
 8,936
EQR share options 11,752
 9,545
 7,421
 7,349
 10,514
 11,752
EQR ESPP discount 965
 1,194
 1,290
 859
 632
 965
OP Units repurchased and retired 
 
 (1,887) (1,777) 
 
Offering costs (39,359) (3,596) (4,657) (41) (1,047) (39,359)
Premium on redemption of Preference Units – original issuance costs 5,129
 
 
 
 
 5,129
Net income available to Units – General Partner 826,212
 879,720
 269,242
 627,163
 1,826,468
 826,212
OP Units – General Partner distributions (554,429) (467,729) (419,320) (723,782) (666,565) (554,429)
Supplemental Executive Retirement Plan (SERP) 282
 10,765
 8,559
 7,374
 (422) 282
Acquisition of Noncontrolling Interests – Partially Owned Properties 1,293
 (4,784) (16,888) (2,308) 
 1,293
Change in market value of Redeemable Limited Partners 38,734
 (22,714) (129,918) (139,818) 79,667
 38,734
Adjustment for Limited Partners ownership in Operating Partnership 5,763
 (946) (5,775) 4,992
 (35,329) 5,763
Balance, end of year $7,432,961
 $5,665,733
 $4,948,004
 $10,490,608
 $10,612,363
 $7,432,961
            
LIMITED PARTNERS            
Balance, beginning of year $119,536
 $110,399
 $116,120
 $211,412
 $159,606
 $119,536
Issuance of OP Units to Limited Partners 66,606
 
 8,245
 
 
 66,606
Issuance of LTIP Units to Limited Partners 5
 
 
Issuance of restricted units to Limited Partners 3
 5
 5
Conversion of OP Units held by Limited Partners into OP Units held by
General Partner
 (18,929) (8,580) (19,722) (2,365) (1,699) (18,929)
Conversion of EQR restricted shares to LTIP Units 
 3,934
 
Equity compensation associated with Units – Limited Partners 5,307
 3,641
 2,524
 11,969
 13,609
 5,307
Net income available to Units – Limited Partners 38,641
 40,780
 13,099
 24,831
 75,278
 38,641
Units – Limited Partners distributions (25,095) (21,434) (20,300) (28,676) (26,277) (25,095)
Change in carrying value of Redeemable Limited Partners (20,702) (10,150) 4,658
 2,229
 (44,439) (20,702)
Adjustment for Limited Partners ownership in Operating Partnership (5,763) 946
 5,775
 (4,992) 35,329
 (5,763)
Balance, end of year $159,606
 $119,536
 $110,399
 $214,411
 $211,412
 $159,606

See accompanying notes
F-20F-22


Table of Contents


ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (Continued)
(Amounts in thousands)
 Year Ended December 31, Year Ended December 31,
PARTNERS' CAPITAL (continued) 2012 2011 2010 2014 2013 2012
            
ACCUMULATED OTHER COMPREHENSIVE (LOSS)  
  
  
  
  
  
Balance, beginning of year $(196,718) $(57,818) $4,681
 $(155,162) $(193,148) $(196,718)
Accumulated other comprehensive income (loss) – derivative instruments:  
  
  
Unrealized holding (losses) arising during the year (11,772) (143,598) (65,894)
Accumulated other comprehensive (loss) income – derivative instruments:  
  
  
Unrealized holding (losses) gains arising during the year (33,306) 18,771
 (11,772)
Losses reclassified into earnings from other comprehensive income 14,678
 4,343
 3,338
 16,868
 20,141
 14,678
Accumulated other comprehensive income – other instruments:  
  
  
Accumulated other comprehensive income (loss) – other instruments:  
  
  
Unrealized holding gains arising during the year 664
 355
 57
 
 583
 664
(Gains) realized during the year 
 (2,122) 
Accumulated other comprehensive (loss) income – foreign currency:      
Currency translation adjustments arising during the year (552) 613
 
Balance, end of year $(193,148) $(196,718) $(57,818) $(172,152) $(155,162) $(193,148)
            
NONCONTROLLING INTERESTS  
  
  
  
  
  
            
NONCONTROLLING INTERESTS – PARTIALLY OWNED PROPERTIES  
  
  
  
  
  
Balance, beginning of year $74,306
 $7,991
 $11,054
 $126,583
 $77,688
 $74,306
Net income (loss) attributable to Noncontrolling Interests 844
 832
 (726) 2,544
 (538) 844
Contributions by Noncontrolling Interests 8,221
 75,911
 222
 5,684
 27,660
 8,221
Distributions to Noncontrolling Interests (5,131) (1,163) (2,952) (7,827) (6,490) (5,131)
Acquisition of Archstone 
 28,263
 
Acquisition of Noncontrolling Interests – Partially Owned Properties (1,306) (8,025) 175
 (2,244) 
 (1,306)
Other 754
 (1,240) 218
 169
 
 754
Balance, end of year $77,688
 $74,306
 $7,991
 $124,909
 $126,583
 $77,688





See accompanying notes
F-21F-23


Table of Contents


EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSImpairment of Long-Lived Assets
The Company periodically evaluates its long-lived assets, including its investments in real estate, for indicators of impairment. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions and legal and environmental concerns, as well as the Company’s ability to hold and its intent with regard to each asset. Future events could occur which would cause the Company to conclude that impairment indicators exist and an impairment loss is warranted.
Depreciation of Investment in Real Estate
The Company depreciates the building component of its investment in real estate over a 30-year estimated useful life, building improvements over a 5-year to 15-year estimated useful life and both the furniture, fixtures and equipment and replacement components over a 5-year to 10-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 a discussion of the Company’s policy with respect to capitalization vs. expensing of fixed asset/repair and maintenance costs. In addition, the Company capitalizes an allocation of the payroll and associated costs of employees directly responsible for and who spend their time on the execution and supervision of major capital and/or renovation projects. These costs are reflected on the balance sheets as increases to depreciable property.

For all development projects, the Company uses its professional judgment in determining whether such costs meet the criteria for capitalization or must be expensed as incurred. The Company capitalizes interest, real estate taxes and insurance and payroll and associated costs for those individuals directly responsible for and who spend their time on development activities, with capitalization ceasing no later than 90 days following issuance of the certificate of occupancy. These costs are reflected on the balance sheets as construction-in-progress for each specific property. The Company expenses as incurred all payroll costs of on-site employees working directly at our properties, except as noted above on our development properties prior to certificate of occupancy issuance and on specific major renovations at selected properties when additional incremental employees are hired.

During the years ended December 31, 2014, 2013 and 2012, the Company capitalized $22.4 million, $16.5 million and $14.3 million, respectively, of payroll and associated costs of employees directly responsible for and who spend their time on the execution and supervision of development activities as well as major capital and/or renovation projects.
Fair Value of Financial Instruments, Including Derivative Instruments
The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, 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 Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.




60

Table of Contents


Funds From Operations and Normalized Funds From Operations
For the year ended December 31, 2014, Funds From Operations (“FFO”) available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units increased $318.5 million, or 36.5%, and increased $139.4 million, or 13.2%, respectively, as compared to the year ended December 31, 2013. For the year ended December 31, 2013, FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units decreased $120.8 million, or 12.2%, and increased $173.8 million, or 19.7%, respectively, as compared to the year ended December 31, 2012.
The following is the Company's and the Operating Partnership's reconciliation of net income to FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units for each of the five years ended December 31, 2014:

Funds From Operations and Normalized Funds From Operations
(Amounts in thousands)
   
  Year Ended December 31,
  2014 2013 2012 2011 2010
Net income$658,683
 $1,905,353
 $881,204
 $935,197
 $295,983
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties(2,544) 538
 (844) (832) 726
Preferred/preference distributions(4,145) (4,145) (10,355) (13,865) (14,368)
Premium on redemption of Preferred Shares/Preference Units
 
 (5,152) 
 
Net income available to Common Shares and Units / Units651,994
 1,901,746
 864,853
 920,500
 282,341
Adjustments:         
    Depreciation758,861
 978,973
 560,669
 506,175
 470,593
Depreciation – Non-real estate additions(4,643) (4,806) (5,346) (5,519) (6,566)
Depreciation – Partially Owned Properties(4,285) (6,499) (3,193) (3,062) (3,532)
Depreciation – Unconsolidated Properties6,754
 3,661
 
 
 1,913
Net (gain) on sales of unconsolidated entities – operating assets(4,902) (7) 
 
 (28,101)
Net (gain) on sales of real estate properties(212,685) 
 
 
 
Discontinued operations:         
    Depreciation
 34,380
 124,323
 157,353
 202,588
    Net (gain) on sales of discontinued operations(179) (2,036,505) (548,278) (826,489) (297,956)
Net incremental gain (loss) on sales of condominium units
 8
 (11) 1,993
 1,506
Gain on sale of Equity Corporate Housing (ECH)
 1,470
 200
 1,202
 
FFO available to Common Shares and Units / Units (1) (3) (4)1,190,915
 872,421
 993,217
 752,153
 622,786
Adjustments:         
    Asset impairment and valuation allowances
 
 
 
 45,380
Property acquisition costs and write-off of pursuit costs8,248
 79,365
 21,649
 14,557
 11,928
Debt extinguishment (gains) losses, including prepayment penalties, preferred share/         
    preference unit redemptions and non-cash convertible debt discounts(1,110) 121,730
 16,293
 12,300
 8,594
(Gains) losses on sales of non-operating assets, net of income and other tax expense         
    (benefit)(1,866) (17,908) (255) (6,976) (80)
    Other miscellaneous non-comparable items259
 1,465
 (147,635) (12,369) (6,186)
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)$1,196,446
 $1,057,073
 $883,269
 $759,665
 $682,422
           
FFO (1) (3)$1,195,060
 $876,566
 $1,008,724
 $766,018
 $637,154
Preferred/preference distributions(4,145) (4,145) (10,355) (13,865) (14,368)
Premium on redemption of Preferred Shares/Preference Units
 
 (5,152) 
 
FFO available to Common Shares and Units / Units (1) (3) (4)$1,190,915
 $872,421
 $993,217
 $752,153
 $622,786
           
Normalized FFO (2) (3)$1,200,591
 $1,061,218
 $893,624
 $773,530
 $696,790
Preferred/preference distributions(4,145) (4,145) (10,355) (13,865) (14,368)
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)$1,196,446
 $1,057,073
 $883,269
 $759,665
 $682,422

(1)The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (“FFO”) (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales and impairment write-downs of depreciable operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be

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calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Company commences the conversion of apartment units to condominiums, it simultaneously discontinues depreciation of such property.

(2) Normalized funds from operations (“Normalized FFO”) begins with FFO and excludes:
the impact of any expenses relating to non-operating asset impairment and valuation allowances;
property acquisition and other transaction costs related to mergers and acquisitions and pursuit cost write-offs;
gains and losses from early debt extinguishment, including prepayment penalties, preferred share/preference unit redemptions and the cost related to the implied option value of non-cash convertible debt discounts;
gains and losses on the sales of non-operating assets, including gains and losses from land parcel and condominium sales, net of the effect of income tax benefits or expenses; and
other miscellaneous non-comparable items.

(3)The Company believes that FFO and FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units / Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies. The Company also believes that Normalized FFO and Normalized FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the Company’s operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results. FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units do not represent net income, net income available to Common Shares / Units or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units should not be exclusively considered as alternatives to net income, net income available to Common Shares / Units or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company’s calculation of FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.

(4)FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units are calculated on a basis consistent with net income available to Common Shares / Units and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares/preference units in accordance with accounting principles generally accepted in the United States. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the “Noncontrolling Interests – Operating Partnership”. Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Market risks relating to the Company’s financial instruments result primarily from changes in short-term LIBOR interest rates and changes in the Securities Industry and Financial Markets Association ("SIFMA") index for tax-exempt debt. The Company also has foreign exchange exposure related to undistributed cash remaining after the sale of its interests in German residential real estate that were acquired as part of the Archstone Transaction.

The Company’s exposure to market risk for changes in interest rates relates primarily to the unsecured revolving credit facility as well as floating rate tax-exempt debt. The Company typically incurs fixed rate debt obligations to finance acquisitions 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 Company 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. To the extent the Company carries substantial cash balances, this will tend to partially counterbalance any increase or decrease in interest rates.

The Company also utilizes certain derivative financial instruments to manage market risk. Interest rate protection agreements are used to convert floating rate debt to a fixed rate basis or vice versa as well as to partially lock in rates on future debt issuances. Derivatives are used for hedging purposes rather than speculation. The Company does not enter into financial instruments for trading purposes. See also Note 9 to the Notes to Consolidated Financial Statements for additional discussion of derivative instruments.

The fair values of the Company’s financial instruments (including such items in the financial statement captions as cash and cash equivalents, other assets, accounts payable and accrued expenses 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 Company’s mortgage notes payable and unsecured debt (including its line of credit) were approximately $5.1 billion and $6.1 billion,

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respectively, at December 31, 2014.

At December 31, 2014, the Company had total outstanding floating rate debt of approximately $1.5 billion, or 14.0% of total debt, net of the effects of any derivative instruments. If market rates of interest on all of the floating rate debt permanently increased by 9 basis points (a 10% increase from the Company’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 $1.4 million. If market rates of interest on all of the floating rate debt permanently decreased by 9 basis points (a 10% decrease from the Company’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 $1.4 million.

At December 31, 2014, the Company had total outstanding fixed rate debt of approximately $9.3 billion, or 86.0% of total debt, net of the effects of any derivative instruments. If market rates of interest permanently increased by 52 basis points (a 10% increase from the Company’s existing weighted average interest rates), the estimated fair value of the Company’s fixed rate debt would be approximately $8.5 billion. If market rates of interest permanently decreased by 52 basis points (a 10% decrease from the Company’s existing weighted average interest rates), the estimated fair value of the Company’s fixed rate debt would be approximately $10.4 billion.

At December 31, 2014, the Company’s derivative instruments had a net liability fair value of approximately $12.2 million. If market rates of interest permanently increased by 24 basis points (a 10% increase from the Company’s existing weighted average interest rates), the net liability fair value of the Company’s derivative instruments would be approximately $7.2 million. If market rates of interest permanently decreased by 24 basis points (a 10% decrease from the Company’s existing weighted average interest rates), the net liability fair value of the Company’s derivative instruments would be approximately $17.4 million.
At December 31, 2013, the Company had total outstanding floating rate debt of approximately $1.6 billion, or 15.3% of total debt, net of the effects of any derivative instruments. If market rates of interest on all of the floating rate debt permanently increased by 12 basis points (a 10% increase from the Company'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 $2.0million. If market rates of interest on all of the floating rate debt permanently decreased by 12 basis points (a 10% decrease from the Company'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 $2.0million.

At December 31, 2013, the Company had total outstanding fixed rate debt of approximately $9.1 billion, or 84.7% of total debt, net of the effects of any derivative instruments. If market rates of interest permanently increased by 51 basis points (a 10% increase from the Company's existing weighted average interest rates), the estimated fair value of the Company's fixed rate debt would be approximately $8.3 billion. If market rates of interest permanently decreased by 51 basis points (a 10% decrease from the Company's existing weighted average interest rates), the estimated fair value of the Company's fixed rate debt would be approximately $10.1 billion.

At December 31, 2013, the Company's derivative instruments had a net asset fair value of approximately $18.7 million. If market rates of interest permanently increased by 33 basis points (a 10% increase from the Company's existing weighted average interest rates), the net asset fair value of the Company's derivative instruments would be approximately $28.0 million. If market rates of interest permanently decreased by 33 basis points (a 10% decrease from the Company's existing weighted average interest rates), the net asset fair value of the Company's derivative instruments would be approximately $9.4 million.

These amounts were determined by considering the impact of hypothetical interest rates on the Company’s financial instruments. The foregoing assumptions apply to the entire amount of the Company’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 Company’s financial structure or results.

The Company 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 and Schedule on page F-1 of this Form 10-K.


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Item 9.     Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    None.
Item 9A. Controls and Procedures
Equity Residential
(a)  Evaluation of Disclosure Controls and Procedures:
Effective as of December 31, 2014, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’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 to ensure that information required to be disclosed by the Company in its Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
(b)  Management’s Report on Internal Control over Financial Reporting:
Equity Residential’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation.
Based on the Company’s evaluation under the framework in Internal Control – Integrated Framework, management concluded that its internal control over financial reporting was effective as of December 31, 2014. Our internal control over financial reporting has been audited as of December 31, 2014 by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.
(c)   Changes in Internal Control over Financial Reporting:
There were no changes to the internal control over financial reporting of the Company identified in connection with the Company’s evaluation referred to above that occurred during the fourth quarter of 2014 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ERP Operating Limited Partnership
(a)  Evaluation of Disclosure Controls and Procedures:
Effective as of December 31, 2014, 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 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 to ensure that information required to be disclosed by the Operating Partnership in its Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.
(b)  Management’s Report on Internal Control over Financial Reporting:
ERP Operating Limited Partnership's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of the Operating Partnership's general partner, management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation.

Based on the Operating Partnership's evaluation under the framework in Internal Control – Integrated Framework, management concluded that its internal control over financial reporting was effective as of December 31, 2014. Our internal control

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over financial reporting has been audited as of December 31, 2014 by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.

(c)  Changes in Internal Control over Financial Reporting:
There were no changes to the internal control over financial reporting of the Operating Partnership identified in connection with the Operating Partnership's evaluation referred to above that occurred during the fourth quarter of 2014 that have materially affected, or are reasonably likely to materially affect, the Operating Partnership's internal control over financial reporting.

Item 9B. Other Information
None.


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PART III

1.Items 10, 11, 12, 13 and 14.Business
Trustees, Executive Officers and Corporate Governance; Executive Compensation; Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters; Certain Relationships and Related Transactions, and Trustee Independence; and Principal Accounting Fees and Services.
The information required by Item 10, Item 11, Item 12, Item 13 and Item 14 is incorporated by reference to, and will be contained in, Equity Residential (“EQR”), a Maryland real estate investment trust (“REIT”) formed in March 1993, is an S&P 500 company focused on the acquisition, development and management of high quality apartment properties in top United States growth markets. 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 has elected to be taxed as a REIT. References to the "Company," "we," "us" or "our" mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the "Operating Partnership" mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP. Unless otherwise indicated, the notes to consolidated financial statements apply to bothResidential's Proxy Statement, which the Company intends to file no later than 120 days after the end of its fiscal year ended December 31, 2014, and the Operating Partnership.
EQRthus these items have been omitted in accordance with General Instruction G(3) to Form 10-K. Equity Residential is the general partner and 96.2% owner of and as of December 31, 2012 owned an approximate 95.9% ownership interest in, ERPOP. All of the Company's property ownership, development and related business operations are conducted through theERP Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR issues public equity from time to time but does not have any indebtedness as all debt is incurred by the OperatingLimited Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company's ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity.
As of December 31, 2012, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 403 properties located in 13 states and the District of Columbia consisting of 115,370 apartment units. The ownership breakdown includes (table does not include various uncompleted development properties):
  Properties Apartment Units
Wholly Owned Properties 382
 106,856
Partially Owned Properties – Consolidated 19
 3,475
Military Housing 2
 5,039
  403
 115,370
The “Wholly Owned Properties” are accounted for under the consolidation method of accounting. The Company beneficially owns 100% fee simple title to 378 of the 382 Wholly Owned Properties and all but one of its wholly owned development properties and land parcels. The Company owns the building and improvements and leases the land underlying the improvements under long-term ground leases that expire in 2026, 2077, 2101 and 2104 for the four operating properties, respectively, and 2110 for one land parcel. These properties are consolidated and reflected as real estate assets while the ground leases are accounted for as operating leases.
The “Partially Owned Properties – Consolidated” are controlled by the Company but have partners with noncontrolling interests and are accounted for under the consolidation method of accounting. The “Military Housing” properties consist of investments in limited liability companies that, as a result of the terms of the operating agreements, are accounted for as management contract rights with all fees recognized as fee and asset management revenue.

2.Summary of Significant Accounting Policies
Basis of Presentation
Due to the Company’s ability as general partner to control either through ownership or by contract the Operating Partnership and its subsidiaries, the Operating Partnership and each such subsidiary has been consolidated with the Company for financial reporting purposes, except for two unconsolidated developments and our military housing properties. The consolidated financial statements also include all variable interest entities for which the Company is the primary beneficiary.
Noncontrolling interests represented by EQR's indirect 1% interest in various entities are immaterial and have not been accounted for in the Consolidated Financial Statements of the Operating Partnership. In addition, certain amounts due from EQR for its 1% interest in various entities have not been reflected in the Consolidated Balance Sheets of the Operating Partnership since such amounts are immaterial.

F-2266



Real Estate AssetsPART IV

Item 15. Exhibits and DepreciationFinancial Statement Schedules.
(a)  The following documents are filed as part of Investment in Real Estate
Effective for business combinations on or after January 1, 2009, an acquiring entity is required to recognize all assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. In addition, an acquiring entity is required to expense acquisition-related costs as incurred (amounts are included in the other expenses line item in the consolidated statements of operations), value noncontrolling interests at fair value at the acquisition date and expense restructuring costs associated with an acquired business.
The Company allocates the purchase price of properties to net tangible and identified intangible assets acquired based on their fair values. In making estimates of fair values for purposes of allocating purchase price, the Company 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 Company 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 Company allocates the purchase price of acquired real estate to various components as follows:this Report:
(1)Land – BasedFinancial Statements: See Index to Consolidated Financial Statements and Schedule on actual purchase price adjusted to fair value (as necessary) if acquired separately or market research/comparables if acquired with an operating property.page F-1 of this Form 10-K.
(2)
Furniture, Fixtures and Equipment – Ranges between $8,000 and $13,000 per apartment unit acquired as an estimate ofExhibits: See the fair value of the appliances and fixtures inside an apartment unit. The per-apartment 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 to ten years.
Exhibit Index.
(3)Lease Intangibles – The Company considers the valueFinancial Statement Schedules: See Index to Consolidated Financial Statements and Schedule on page F-1 of acquired in-place leases and above/below market leases and the amortization period is the average remaining term of each respective acquired lease.this Form 10-K.


67



SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
EQUITY RESIDENTIAL
By: /s/ David J. Neithercut
David J. Neithercut
President and Chief Executive Officer
(Principal Executive Officer)
Date:February 26, 2015


ERP OPERATING LIMITED PARTNERSHIP
BY: EQUITY RESIDENTIAL
ITS GENERAL PARTNER
By: /s/ David J. Neithercut
David J. Neithercut
President and Chief Executive Officer
(Principal Executive Officer)
Date:February 26, 2015





EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP

POWER OF ATTORNEY
KNOW ALL MEN/WOMEN BY THESE PRESENTS, that each person whose signature appears below, hereby constitutes and appoints David J. Neithercut, Mark J. Parrell and Ian S. Kaufman, or any of them, his or her attorneys-in-fact and agents, with full power of substitution and resubstitution for him or her in any and all capacities, to do all acts and things which said attorneys and agents, or any of them, deem advisable to enable the company to comply with the Securities Exchange Act of 1934, as amended, and any requirements or regulations of the Securities and Exchange Commission in respect thereof, in connection with the company’s filing of an annual report on Form 10-K for the company’s fiscal year 2014, including specifically, but without limitation of the general authority hereby granted, the power and authority to sign his or her name as a trustee or officer, or both, of the company, as indicated below opposite his or her signature, to the Form 10-K, and any amendment thereto; and each of the undersigned does hereby fully ratify and confirm all that said attorneys and agents, or any of them, or the substitute of any of them, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of each registrant and in the capacities set forth below and on the dates indicated:

NameTitleDate
/s/ David J. NeithercutPresident, Chief Executive Officer and TrusteeFebruary 26, 2015
David J. Neithercut(Principal Executive Officer)
/s/ Mark J. ParrellExecutive Vice President and Chief Financial OfficerFebruary 26, 2015
Mark J. Parrell(Principal Financial Officer)
/s/ Ian S. KaufmanSenior Vice President and Chief Accounting OfficerFebruary 26, 2015
Ian S. Kaufman(Principal Accounting Officer)
/s/ John W. AlexanderTrusteeFebruary 26, 2015
John W. Alexander
/s/ Charles L. AtwoodTrusteeFebruary 26, 2015
Charles L. Atwood
/s/ Linda Walker BynoeTrusteeFebruary 26, 2015
Linda Walker Bynoe
/s/ Mary Kay HabenTrusteeFebruary 26, 2015
Mary Kay Haben
/s/ Bradley A. KeywellTrusteeFebruary 26, 2015
Bradley A. Keywell
/s/ John E. NealTrusteeFebruary 26, 2015
John E. Neal
/s/ Mark S. ShapiroTrusteeFebruary 26, 2015
Mark S. Shapiro
/s/ Stephen E. SterrettTrusteeFebruary 26, 2015
Stephen E. Sterrett
/s/ B. Joseph WhiteTrusteeFebruary 26, 2015
B. Joseph White
/s/ Gerald A. SpectorVice Chairman of the Board of TrusteesFebruary 26, 2015
Gerald A. Spector
/s/ Samuel ZellChairman of the Board of TrusteesFebruary 26, 2015
Samuel Zell




INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP

PAGE
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT
Report of Independent Registered Public Accounting Firm (Equity Residential)
Report of Independent Registered Public Accounting Firm (ERP Operating Limited Partnership)
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial
    Reporting (Equity Residential)
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial
    Reporting (ERP Operating Limited Partnership)
Financial Statements of Equity Residential:
  Consolidated Balance Sheets as of December 31, 2014 and 2013
  Consolidated Statements of Operations and Comprehensive Income
      for the years ended December 31, 2014, 2013 and 2012
  Consolidated Statements of Cash Flows for the years ended
      December 31, 2014, 2013 and 2012
  Consolidated Statements of Changes in Equity for the years ended
      December 31, 2014, 2013 and 2012
Financial Statements of ERP Operating Limited Partnership:
  Consolidated Balance Sheets as of December 31, 2014 and 2013
  Consolidated Statements of Operations and Comprehensive Income
      for the years ended December 31, 2014, 2013 and 2012
  Consolidated Statements of Cash Flows for the years ended
      December 31, 2014, 2013 and 2012
  Consolidated Statements of Changes in Capital for the years ended
      December 31, 2014, 2013 and 2012
Notes to Consolidated Financial Statements of Equity Residential and ERP Operating
     Limited Partnership
SCHEDULE FILED AS PART OF THIS REPORT
Schedule III – Real Estate and Accumulated Depreciation of Equity Residential and ERP Operating
     Limited Partnership

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 OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders
Equity Residential
We have audited the accompanying consolidated balance sheets of Equity Residential (the “Company”) as of December 31, 2014 and 2013 and the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2014. Our audits also included the financial statement schedule listed in the accompanying index to the consolidated financial statements and schedule. These financial statements and schedule are the responsibility of the Company’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 the standards of the Public Company Accounting Oversight Board (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 Equity Residential at December 31, 2014 and 2013 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated 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 Company changed its method for reporting discontinued operations as a result of the adoption of Accounting Standards Update No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity," effective January 1, 2014.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Equity Residential’s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 2015 expressed an unqualified opinion thereon.

Other Intangible Assets – The Company considers whether it has acquired other intangible assets, including any customer relationship intangibles and the amortization period is the estimated useful life of the acquired intangible asset./s/  ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
February 26, 2015


F-2



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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, 2014 and 2013 and the related consolidated statements of operations and comprehensive income, changes in capital and cash flows for each of the three years in the period ended December 31, 2014. Our audits also included the financial statement schedule listed in the accompanying index to the consolidated 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 the standards of the Public Company Accounting Oversight Board (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, 2014 and 2013 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated 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 for reporting discontinued operations as a result of the adoption of Accounting Standards Update No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity," effective January 1, 2014.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), ERP Operating Limited Partnership's internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 2015 expressed an unqualified opinion thereon.

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.
/s/  ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
February 26, 2015



F-3



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To the Board of Trustees and Shareholders
Equity Residential
Replacements inside an apartment unit suchWe have audited Equity Residential’s (the “Company”) internal control over financial reporting as appliances and carpeting are depreciated over an estimated useful life of fiveDecember 31, 2014 to ten years. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred and significant renovations and improvements that improve and/or extend, based on criteria established in Internal Control – Integrated Framework issued by the useful lifeCommittee of Sponsoring Organizations of the asset are capitalizedTreadway Commission (2013 framework) (the “COSO Criteria”). Equity Residential’s management is responsible for maintaining effective internal control over their estimated useful life, generally fivefinancial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to fifteen years. Initial direct leasing costs are expensed as incurred as such expense approximatesexpress an opinion on the deferral and amortization of initial direct leasing costsCompany’s internal control over the lease terms. Property sales or dispositions are recorded when title transfers to unrelated third parties, contingencies have been removed and sufficient cash consideration has been received by the Company. Upon disposition, the related costs and accumulated depreciation are removed from the respective accounts. Any gain or lossfinancial reporting based on sale is recognizedour audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Equity Residential maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the COSO Criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Equity Residential as of December 31, 2014 and 2013 and the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2014 of Equity Residential and our report dated February 26, 2015 expressed an unqualified opinion thereon.

/s/  ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
February 26, 2015


F-4




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To the Partners
ERP Operating Limited Partnership
We have audited ERP Operating Limited Partnership's (the “Operating Partnership”) internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO Criteria”). ERP Operating Limited Partnership's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, ERP Operating Limited Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the COSO Criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of ERP Operating Limited Partnership as of December 31, 2014 and 2013 and the related consolidated statements of operations and comprehensive income, changes in capital and cash flows for each of the three years in the United States.period ended December 31, 2014 of ERP Operating Limited Partnership and our report dated February 26, 2015 expressed an unqualified opinion thereon.
The Company classifies real estate assets as real estate held
/s/  ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
February 26, 2015


F-5



EQUITY RESIDENTIAL
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except for disposition when it is certain a property will be disposedshare amounts)
  December 31, 2014 December 31, 2013
ASSETS    
Investment in real estate  
  
Land $6,295,404
 $6,192,512
Depreciable property 19,851,504
 19,226,047
Projects under development 1,343,919
 988,867
Land held for development 184,556
 393,522
Investment in real estate 27,675,383
 26,800,948
Accumulated depreciation (5,432,805) (4,807,709)
Investment in real estate, net 22,242,578
 21,993,239
Cash and cash equivalents 40,080
 53,534
Investments in unconsolidated entities 105,434
 178,526
Deposits – restricted 72,303
 103,567
Escrow deposits – mortgage 48,085
 42,636
Deferred financing costs, net 58,380
 58,486
Other assets 383,754
 404,557
Total assets $22,950,614
 $22,834,545
     
LIABILITIES AND EQUITY    
Liabilities:    
Mortgage notes payable $5,086,515
 $5,174,166
Notes, net 5,425,346
 5,477,088
Lines of credit 333,000
 115,000
Accounts payable and accrued expenses 153,590
 118,791
Accrued interest payable 89,540
 78,309
Other liabilities 389,915
 347,748
Security deposits 75,633
 71,592
Distributions payable 188,566
 243,511
Total liabilities 11,742,105
 11,626,205
     
Commitments and contingencies    
     
Redeemable Noncontrolling Interests – Operating Partnership 500,733
 363,144
Equity:    
Shareholders’ equity:    
Preferred Shares of beneficial interest, $0.01 par value;    
100,000,000 shares authorized; 1,000,000 shares issued and
outstanding as of December 31, 2014 and December 31, 2013
 50,000
 50,000
Common Shares of beneficial interest, $0.01 par value;    
1,000,000,000 shares authorized; 362,855,454 shares issued
and outstanding as of December 31, 2014 and 360,479,260
shares issued and outstanding as of December 31, 2013
 3,629
 3,605
Paid in capital 8,536,340
 8,561,500
Retained earnings 1,950,639
 2,047,258
Accumulated other comprehensive (loss) (172,152) (155,162)
Total shareholders’ equity 10,368,456
 10,507,201
Noncontrolling Interests:    
Operating Partnership 214,411
 211,412
Partially Owned Properties 124,909
 126,583
Total Noncontrolling Interests 339,320
 337,995
Total equity 10,707,776
 10,845,196
Total liabilities and equity $22,950,614
 $22,834,545

See accompanying notes
F-6


The Company classifies properties under development and/or expansion and properties

EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Amounts in the lease-up phase (including land) as construction-in-progress until construction has been completed and all certificatesthousands except per share data)
  Year Ended December 31,
  2014 2013 2012
REVENUES  
  
  
Rental income $2,605,311
 $2,378,004
 $1,737,929
Fee and asset management 9,437
 9,698
 9,573
Total revenues 2,614,748
 2,387,702
 1,747,502
       
EXPENSES      
Property and maintenance 473,098
 449,427
 332,219
Real estate taxes and insurance 325,401
 293,999
 206,723
Property management 79,636
 84,342
 81,902
Fee and asset management 5,429
 6,460
 4,663
Depreciation 758,861
 978,973
 560,669
General and administrative 50,948
 62,179
 47,233
Total expenses 1,693,373
 1,875,380
 1,233,409
       
Operating income 921,375
 512,322
 514,093
       
Interest and other income 4,462
 5,283
 151,060
Other expenses (9,073) (29,630) (27,796)
Interest:  
  
  
Expense incurred, net (457,191) (586,854) (455,236)
Amortization of deferred financing costs (11,088) (22,197) (21,295)
Income (loss) before income and other taxes, (loss) from investments
in unconsolidated entities, net gain on sales of real estate properties and
land parcels and discontinued operations
 448,485
 (121,076) 160,826
Income and other tax (expense) benefit (1,394) (1,169) (514)
(Loss) from investments in unconsolidated entities (7,952) (58,156) (14)
Net gain on sales of real estate properties 212,685
 
 
Net gain on sales of land parcels 5,277
 12,227
 
Income (loss) from continuing operations 657,101
 (168,174) 160,298
Discontinued operations, net 1,582
 2,073,527
 720,906
Net income 658,683
 1,905,353
 881,204
Net (income) loss attributable to Noncontrolling Interests:  
  
  
Operating Partnership (24,831) (75,278) (38,641)
Partially Owned Properties (2,544) 538
 (844)
Net income attributable to controlling interests 631,308
 1,830,613
 841,719
Preferred distributions (4,145) (4,145) (10,355)
Premium on redemption of Preferred Shares 
 
 (5,152)
Net income available to Common Shares $627,163
 $1,826,468
 $826,212
       
Earnings per share – basic:  
  
  
Income (loss) from continuing operations available to Common Shares $1.73
 $(0.47) $0.45
Net income available to Common Shares $1.74
 $5.16
 $2.73
Weighted average Common Shares outstanding 361,181
 354,305
 302,701
       
Earnings per share – diluted:  
  
  
Income (loss) from continuing operations available to Common Shares $1.72
 $(0.47) $0.45
Net income available to Common Shares $1.73
 $5.16
 $2.70
Weighted average Common Shares outstanding 377,735
 354,305
 319,766
       
Distributions declared per Common Share outstanding $2.00
 $1.85
 $1.78

See accompanying notes
F-7




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)
(Amounts in thousands except per share data)

  Year Ended December 31,
  2014 2013 2012
Comprehensive income:  
  
  
Net income $658,683
 $1,905,353
 $881,204
Other comprehensive (loss) income:      
Other comprehensive (loss) income – derivative instruments:  
  
  
Unrealized holding (losses) gains arising during the year (33,306) 18,771
 (11,772)
Losses reclassified into earnings from other comprehensive income 16,868
 20,141
 14,678
Other comprehensive income (loss) – other instruments:  
  
  
Unrealized holding gains arising during the year 
 583
 664
(Gains) realized during the year 
 (2,122) 
Other comprehensive (loss) income – foreign currency:      
Currency translation adjustments arising during the year (552) 613
 
Other comprehensive (loss) income (16,990) 37,986
 3,570
Comprehensive income 641,693
 1,943,339
 884,774
Comprehensive (income) attributable to Noncontrolling Interests (26,728) (76,204) (39,624)
Comprehensive income attributable to controlling interests $614,965
 $1,867,135
 $845,150


See accompanying notes
F-8




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)

  Year Ended December 31,
  2014 2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:  
  
  
Net income $658,683
 $1,905,353
 $881,204
Adjustments to reconcile net income to net cash provided by operating activities:  
  
  
Depreciation 758,861
 1,013,353
 684,992
Amortization of deferred financing costs 11,088
 22,425
 21,435
Amortization of above/below market leases 3,222
 898
 
Amortization of discounts and premiums on debt (13,520) (156,439) (8,181)
Amortization of deferred settlements on derivative instruments 16,334
 19,607
 14,144
Write-off of pursuit costs 3,607
 5,184
 9,056
Loss from investments in unconsolidated entities 7,952
 58,156
 14
Distributions from unconsolidated entities – return on capital 5,570
 2,481
 575
Net (gain) on sales of investment securities (57) (4,203) 
Net (gain) on sales of real estate properties (212,685) 
 
Net (gain) on sales of land parcels (5,277) (12,227) 
Net (gain) on sales of discontinued operations (179) (2,036,505) (548,278)
Unrealized (gain) loss on derivative instruments (60) 70
 (1)
Compensation paid with Company Common Shares 27,543
 35,474
 24,832
Changes in assets and liabilities:  
  
  
(Increase) decrease in deposits – restricted (1,740) 3,684
 (4,091)
Decrease in mortgage deposits 1,452
 1,813
 176
Decrease (increase) in other assets 21,773
 3,742
 (20,411)
Increase (decrease) in accounts payable and accrued expenses 17,797
 6,229
 (2,102)
Increase (decrease) in accrued interest payable 11,231
 (9,219) (11,898)
Increase in other liabilities 8,437
 15,401
 2,987
Increase (decrease) in security deposits 4,041
 (6,361) 1,702
Net cash provided by operating activities 1,324,073
 868,916
 1,046,155
       
CASH FLOWS FROM INVESTING ACTIVITIES:  
  
  
Acquisition of Archstone, net of cash acquired 
 (4,000,875) 
Investment in real estate – acquisitions (469,989) (108,308) (843,976)
Investment in real estate – development/other (530,387) (377,442) (180,409)
Capital expenditures to real estate (185,957) (135,816) (152,828)
Non-real estate capital additions (5,286) (4,134) (8,821)
Interest capitalized for real estate and unconsolidated entities under development (52,782) (47,321) (22,509)
Proceeds from disposition of real estate, net 522,647
 4,551,454
 1,049,219
Investments in unconsolidated entities (15,768) (66,471) (5,291)
Distributions from unconsolidated entities – return of capital 103,793
 25,471
 
Proceeds from sale of investment securities 57
 4,878
 
Decrease (increase) in deposits on real estate acquisitions and investments, net 33,004
 143,694
 (97,984)
Decrease in mortgage deposits 798
 7,893
 1,444
Consolidation of previously unconsolidated properties (44,796) 
 
Net cash (used for) investing activities (644,666) (6,977) (261,155)

See accompanying notes
F-9




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
CASH FLOWS FROM FINANCING ACTIVITIES:  
  
  
Debt financing costs $(10,982) $(16,526) $(21,209)
Mortgage deposits (7,699) (5,631) (57)
Mortgage notes payable:  
  
  
Proceeds 
 902,886
 26,495
Restricted cash 
 
 2,370
Lump sum payoffs (88,788) (2,532,682) (350,247)
Scheduled principal repayments (11,869) (12,658) (14,088)
Notes, net:  
  
  
Proceeds 1,194,277
 1,245,550
 
Lump sum payoffs (1,250,000) (400,000) (975,991)
Lines of credit:  
  
  
Proceeds 7,167,000
 9,832,000
 5,876,000
Repayments (6,949,000) (9,717,000) (5,876,000)
(Payments on) settlement of derivative instruments (758) (44,063) 
Proceeds from sale of Common Shares 
 
 1,417,040
Proceeds from Employee Share Purchase Plan (ESPP) 3,392
 3,401
 5,399
Proceeds from exercise of options 82,573
 17,252
 49,039
Common Shares repurchased and retired (1,777) 
 
Redemption of Preferred Shares 
 
 (150,000)
Premium on redemption of Preferred Shares 
 
 (23)
Payment of offering costs (41) (1,047) (39,359)
Other financing activities, net (49) (48) (48)
Acquisition of Noncontrolling Interests – Partially Owned Properties (5,501) 
 (13)
Contributions – Noncontrolling Interests – Partially Owned Properties 5,684
 27,660
 8,221
Contributions – Noncontrolling Interests – Operating Partnership 3
 5
 5
Distributions:  
  
  
Common Shares (776,659) (681,610) (473,451)
Preferred Shares (4,145) (4,145) (13,416)
Noncontrolling Interests – Operating Partnership (30,744) (27,897) (21,915)
Noncontrolling Interests – Partially Owned Properties (7,778) (6,442) (5,083)
Net cash (used for) financing activities (692,861) (1,420,995) (556,331)
Net (decrease) increase in cash and cash equivalents (13,454) (559,056) 228,669
Cash and cash equivalents, beginning of year 53,534
 612,590
 383,921
Cash and cash equivalents, end of year $40,080
 $53,534
 $612,590










See accompanying notes
F-10




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
SUPPLEMENTAL INFORMATION:  
  
  
Cash paid for interest, net of amounts capitalized $443,125
 $722,963
 $464,785
Net cash paid for income and other taxes $1,517
 $1,152
 $673
Real estate acquisitions/dispositions/other:  
  
  
Mortgage loans assumed $28,910
 $
 $137,644
Valuation of OP Units issued $
 $
 $66,606
Amortization of deferred financing costs:  
  
  
Investment in real estate, net $
 $(152) $
Deferred financing costs, net $11,088
 $22,577
 $21,435
Amortization of discounts and premiums on debt:  
  
  
Mortgage notes payable $(15,904) $(158,625) $(10,333)
Notes, net $2,384
 $2,186
 $2,152
Amortization of deferred settlements on derivative instruments:  
  
  
Other liabilities $(534) $(534) $(534)
Accumulated other comprehensive income $16,868
 $20,141
 $14,678
Loss from investments in unconsolidated entities:      
Investments in unconsolidated entities $4,610
 $53,066
 $14
Other liabilities $3,342
 $5,090
 $
Distributions from unconsolidated entities – return on capital:      
Investments in unconsolidated entities $5,360
 $2,448
 $575
Other liabilities $210
 $33
 $
Unrealized (gain) loss on derivative instruments:  
  
  
Other assets $10,160
 $(17,139) $7,448
Mortgage notes payable $
 $
 $(2,589)
Notes, net $1,597
 $(1,523) $(4,860)
Other liabilities $21,489
 $(39) $11,772
Accumulated other comprehensive income $(33,306) $18,771
 $(11,772)
Acquisition of Archstone, net of cash acquired:      
Investment in real estate, net $39,929
 $(8,687,355) $
Investments in unconsolidated entities $(33,993) $(225,568) $
Deposits – restricted $
 $(528) $
Escrow deposits – mortgage $
 $(37,582) $
Deferred financing costs, net $
 $(25,780) $
Other assets $(2,586) $(215,622) $
Mortgage notes payable $
 $3,076,876
 $
Accounts payable and accrued expenses $(146) $16,984
 $
Accrued interest payable $
 $11,305
 $
Other liabilities $(3,204) $117,299
 $
Security deposits $
 $10,965
 $
Issuance of Common Shares $
 $1,929,868
 $
Noncontrolling Interests – Partially Owned Properties $
 $28,263
 $
Interest capitalized for real estate and unconsolidated entities under development:      
Investment in real estate, net $(52,717) $(45,533) $(21,661)
Investments in unconsolidated entities $(65) $(1,788) $(848)
Investments in unconsolidated entities:      
Investments in unconsolidated entities $(6,318) $(13,656) $(5,291)
Other liabilities $(9,450) $(52,815) $
Consolidation of previously unconsolidated properties:      
Investment in real estate, net $(64,319) $
 $
Investments in unconsolidated entities $(847) $
 $
Accounts payable and accrued expenses $1,987
 $
 $
Other liabilities $18,383
 $
 $

See accompanying notes
F-11




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
SUPPLEMENTAL INFORMATION (continued):      
(Payments on) settlement of derivative instruments:  
  
  
Other assets $6,623
 $(50) $
Other liabilities $(7,381) $(44,013) $
Other:  
  
  
Receivable on sale of Common Shares $
 $
 $28,457
Foreign currency translation adjustments $552
 $(613) $


See accompanying notes
F-12




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands)

  Year Ended December 31,
SHAREHOLDERS’ EQUITY 2014 2013 2012
       
PREFERRED SHARES  
  
  
Balance, beginning of year $50,000
 $50,000
 $200,000
Redemption of 6.48% Series N Cumulative Redeemable 
 
 (150,000)
Balance, end of year $50,000
 $50,000
 $50,000
       
COMMON SHARES, $0.01 PAR VALUE  
  
  
Balance, beginning of year $3,605
 $3,251
 $2,975
Conversion of OP Units into Common Shares 1
 1
 7
Issuance of Common Shares 
 345
 250
Exercise of share options 21
 5
 16
Employee Share Purchase Plan (ESPP) 
 1
 1
Share-based employee compensation expense:  
  
  
Restricted shares 2
 2
 2
Balance, end of year $3,629
 $3,605
 $3,251
       
PAID IN CAPITAL  
  
  
Balance, beginning of year $8,561,500
 $6,542,355
 $5,047,186
Common Share Issuance:  
  
  
Conversion of OP Units into Common Shares 2,364
 1,698
 18,922
Issuance of Common Shares 
 1,929,523
 1,388,333
Exercise of share options 82,552
 17,247
 49,023
Employee Share Purchase Plan (ESPP) 3,392
 3,400
 5,398
Share-based employee compensation expense:  
  
  
Restricted shares 9,902
 13,262
 8,934
Share options 7,349
 10,514
 11,752
ESPP discount 859
 632
 965
Common Shares repurchased and retired (1,777) 
 
Offering costs (41) (1,047) (39,359)
Premium on redemption of Preferred Shares – original issuance costs 
 
 5,129
Supplemental Executive Retirement Plan (SERP) 7,374
 (422) 282
Acquisition of Noncontrolling Interests – Partially Owned Properties (2,308) 
 1,293
Change in market value of Redeemable Noncontrolling Interests – Operating
Partnership
 (139,818) 79,667
 38,734
Adjustment for Noncontrolling Interests ownership in Operating Partnership 4,992
 (35,329) 5,763
Balance, end of year $8,536,340
 $8,561,500
 $6,542,355




See accompanying notes
F-13




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
(Amounts in thousands)
  Year Ended December 31,
SHAREHOLDERS’ EQUITY (continued) 2014 2013 2012
       
RETAINED EARNINGS  
  
  
Balance, beginning of year $2,047,258
 $887,355
 $615,572
Net income attributable to controlling interests 631,308
 1,830,613
 841,719
Common Share distributions (723,782) (666,565) (554,429)
Preferred Share distributions (4,145) (4,145) (10,355)
Premium on redemption of Preferred Shares – cash charge 
 
 (23)
Premium on redemption of Preferred Shares – original issuance costs 
 
 (5,129)
Balance, end of year $1,950,639
 $2,047,258
 $887,355
       
ACCUMULATED OTHER COMPREHENSIVE (LOSS)  
  
  
Balance, beginning of year $(155,162) $(193,148) $(196,718)
Accumulated other comprehensive (loss) income – derivative instruments:  
  
  
Unrealized holding (losses) gains arising during the year (33,306) 18,771
 (11,772)
Losses reclassified into earnings from other comprehensive income 16,868
 20,141
 14,678
Accumulated other comprehensive income (loss) – other instruments:  
  
  
Unrealized holding gains arising during the year 
 583
 664
(Gains) realized during the year 
 (2,122) 
Accumulated other comprehensive (loss) income – foreign currency:      
Currency translation adjustments arising during the year (552) 613
 
Balance, end of year $(172,152) $(155,162) $(193,148)
       
NONCONTROLLING INTERESTS  
  
  
       
OPERATING PARTNERSHIP  
  
  
Balance, beginning of year $211,412
 $159,606
 $119,536
Issuance of OP Units to Noncontrolling Interests 
 
 66,606
Issuance of restricted units to Noncontrolling Interests 3
 5
 5
Conversion of OP Units held by Noncontrolling Interests into OP Units held
by General Partner
 (2,365) (1,699) (18,929)
Equity compensation associated with Noncontrolling Interests 11,969
 13,609
 5,307
Net income attributable to Noncontrolling Interests 24,831
 75,278
 38,641
Distributions to Noncontrolling Interests (28,676) (26,277) (25,095)
Change in carrying value of Redeemable Noncontrolling Interests – Operating
Partnership
 2,229
 (44,439) (20,702)
Adjustment for Noncontrolling Interests ownership in Operating Partnership (4,992) 35,329
 (5,763)
Balance, end of year $214,411
 $211,412
 $159,606
       
PARTIALLY OWNED PROPERTIES  
  
  
Balance, beginning of year $126,583
 $77,688
 $74,306
Net income (loss) attributable to Noncontrolling Interests 2,544
 (538) 844
Contributions by Noncontrolling Interests 5,684
 27,660
 8,221
Distributions to Noncontrolling Interests (7,827) (6,490) (5,131)
Acquisition of Archstone 
 28,263
 
Acquisition of Noncontrolling Interests – Partially Owned Properties (2,244) 
 (1,306)
Other 169
 
 754
Balance, end of year $124,909
 $126,583
 $77,688

See accompanying notes
F-14




ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

  December 31, 2014 December 31, 2013
ASSETS    
Investment in real estate  
  
Land $6,295,404
 $6,192,512
Depreciable property 19,851,504
 19,226,047
Projects under development 1,343,919
 988,867
Land held for development 184,556
 393,522
Investment in real estate 27,675,383
 26,800,948
Accumulated depreciation (5,432,805) (4,807,709)
Investment in real estate, net 22,242,578
 21,993,239
Cash and cash equivalents 40,080
 53,534
Investments in unconsolidated entities 105,434
 178,526
Deposits – restricted 72,303
 103,567
Escrow deposits – mortgage 48,085
 42,636
Deferred financing costs, net 58,380
 58,486
Other assets 383,754
 404,557
Total assets $22,950,614
 $22,834,545
     
LIABILITIES AND CAPITAL    
Liabilities:  
  
Mortgage notes payable $5,086,515
 $5,174,166
Notes, net 5,425,346
 5,477,088
Lines of credit 333,000
 115,000
Accounts payable and accrued expenses 153,590
 118,791
Accrued interest payable 89,540
 78,309
Other liabilities 389,915
 347,748
Security deposits 75,633
 71,592
Distributions payable 188,566
 243,511
Total liabilities 11,742,105
 11,626,205
     
Commitments and contingencies  
  
     
Redeemable Limited Partners 500,733
 363,144
Capital:  
  
Partners' Capital:  
  
Preference Units 50,000
 50,000
General Partner 10,490,608
 10,612,363
Limited Partners 214,411
 211,412
Accumulated other comprehensive (loss) (172,152) (155,162)
Total partners' capital 10,582,867
 10,718,613
Noncontrolling Interests – Partially Owned Properties 124,909
 126,583
Total capital 10,707,776
 10,845,196
Total liabilities and capital $22,950,614
 $22,834,545









See accompanying notes
F-15




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

  Year Ended December 31,
  2014 2013 2012
REVENUES  
    
Rental income $2,605,311
 $2,378,004
 $1,737,929
Fee and asset management 9,437
 9,698
 9,573
Total revenues 2,614,748
 2,387,702
 1,747,502
       
EXPENSES  
  
  
Property and maintenance 473,098
 449,427
 332,219
Real estate taxes and insurance 325,401
 293,999
 206,723
Property management 79,636
 84,342
 81,902
Fee and asset management 5,429
 6,460
 4,663
Depreciation 758,861
 978,973
 560,669
General and administrative 50,948
 62,179
 47,233
Total expenses 1,693,373
 1,875,380
 1,233,409
       
Operating income 921,375
 512,322
 514,093
       
Interest and other income 4,462
 5,283
 151,060
Other expenses (9,073) (29,630) (27,796)
Interest:  
  
  
Expense incurred, net (457,191) (586,854) (455,236)
Amortization of deferred financing costs (11,088) (22,197) (21,295)
Income (loss) before income and other taxes, (loss) from investments
in unconsolidated entities, net gain on sales of real estate properties and
land parcels and discontinued operations
 448,485
 (121,076) 160,826
Income and other tax (expense) benefit (1,394) (1,169) (514)
(Loss) from investments in unconsolidated entities (7,952) (58,156) (14)
Net gain on sales of real estate properties 212,685
 
 
Net gain on sales of land parcels 5,277
 12,227
 
Income (loss) from continuing operations 657,101
 (168,174) 160,298
Discontinued operations, net 1,582
 2,073,527
 720,906
Net income 658,683
 1,905,353
 881,204
Net (income) loss attributable to Noncontrolling Interests – Partially
Owned Properties
��(2,544) 538
 (844)
Net income attributable to controlling interests $656,139
 $1,905,891
 $880,360
       
ALLOCATION OF NET INCOME:      
Preference Units $4,145
 $4,145
 $10,355
Premium on redemption of Preference Units $
 $
 $5,152
       
General Partner $627,163
 $1,826,468
 $826,212
Limited Partners 24,831
 75,278
 38,641
Net income available to Units $651,994
 $1,901,746
 $864,853
       
Earnings per Unit – basic:  
  
  
Income (loss) from continuing operations available to Units $1.73
 $(0.47) $0.45
Net income available to Units $1.74
 $5.16
 $2.73
Weighted average Units outstanding 374,899
 368,038
 316,554
       
Earnings per Unit – diluted:  
  
  
Income (loss) from continuing operations available to Units $1.72
 $(0.47) $0.45
Net income available to Units $1.73
 $5.16
 $2.70
Weighted average Units outstanding 377,735
 368,038
 319,766
       
Distributions declared per Unit outstanding $2.00
 $1.85
 $1.78


See accompanying notes
F-16




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

  Year Ended December 31,
  2014 2013 2012
Comprehensive income:  
  
  
Net income $658,683
 $1,905,353
 $881,204
Other comprehensive (loss) income:      
Other comprehensive (loss) income – derivative instruments:  
  
  
Unrealized holding (losses) gains arising during the year (33,306) 18,771
 (11,772)
Losses reclassified into earnings from other comprehensive income 16,868
 20,141
 14,678
Other comprehensive income (loss) – other instruments:  
  
  
Unrealized holding gains arising during the year 
 583
 664
(Gains) realized during the year 
 (2,122) 
Other comprehensive (loss) income – foreign currency:      
Currency translation adjustments arising during the year (552) 613
 
Other comprehensive (loss) income (16,990) 37,986
 3,570
Comprehensive income 641,693
 1,943,339
 884,774
Comprehensive (income) loss attributable to Noncontrolling Interests –
Partially Owned Properties
 (2,544) 538
 (844)
Comprehensive income attributable to controlling interests $639,149
 $1,943,877
 $883,930




See accompanying notes
F-17




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

  Year Ended December 31,
  2014 2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:  
  
  
Net income $658,683
 $1,905,353
 $881,204
Adjustments to reconcile net income to net cash provided by operating activities:  
  
  
Depreciation 758,861
 1,013,353
 684,992
Amortization of deferred financing costs 11,088
 22,425
 21,435
Amortization of above/below market leases 3,222
 898
 
Amortization of discounts and premiums on debt (13,520) (156,439) (8,181)
Amortization of deferred settlements on derivative instruments 16,334
 19,607
 14,144
Write-off of pursuit costs 3,607
 5,184
 9,056
Loss from investments in unconsolidated entities 7,952
 58,156
 14
Distributions from unconsolidated entities – return on capital 5,570
 2,481
 575
Net (gain) on sales of investment securities (57) (4,203) 
Net (gain) on sales of real estate properties (212,685) 
 
Net (gain) on sales of land parcels (5,277) (12,227) 
Net (gain) on sales of discontinued operations (179) (2,036,505) (548,278)
Unrealized (gain) loss on derivative instruments (60) 70
 (1)
Compensation paid with Company Common Shares 27,543
 35,474
 24,832
Changes in assets and liabilities:  
  
  
(Increase) decrease in deposits – restricted (1,740) 3,684
 (4,091)
Decrease in mortgage deposits 1,452
 1,813
 176
Decrease (increase) in other assets 21,773
 3,742
 (20,411)
Increase (decrease) in accounts payable and accrued expenses 17,797
 6,229
 (2,102)
Increase (decrease) in accrued interest payable 11,231
 (9,219) (11,898)
Increase in other liabilities 8,437
 15,401
 2,987
Increase (decrease) in security deposits 4,041
 (6,361) 1,702
Net cash provided by operating activities 1,324,073
 868,916
 1,046,155
       
CASH FLOWS FROM INVESTING ACTIVITIES:  
  
  
Acquisition of Archstone, net of cash acquired 
 (4,000,875) 
Investment in real estate – acquisitions (469,989) (108,308) (843,976)
Investment in real estate – development/other (530,387) (377,442) (180,409)
Capital expenditures to real estate (185,957) (135,816) (152,828)
Non-real estate capital additions (5,286) (4,134) (8,821)
Interest capitalized for real estate and unconsolidated entities under development (52,782) (47,321) (22,509)
Proceeds from disposition of real estate, net 522,647
 4,551,454
 1,049,219
Investments in unconsolidated entities (15,768) (66,471) (5,291)
Distributions from unconsolidated entities – return of capital 103,793
 25,471
 
Proceeds from sale of investment securities 57
 4,878
 
Decrease (increase) in deposits on real estate acquisitions and investments, net 33,004
 143,694
 (97,984)
Decrease in mortgage deposits 798
 7,893
 1,444
Consolidation of previously unconsolidated properties (44,796) 
 
Net cash (used for) investing activities (644,666) (6,977) (261,155)







See accompanying notes
F-18




ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
CASH FLOWS FROM FINANCING ACTIVITIES:  
  
  
Debt financing costs $(10,982) $(16,526) $(21,209)
Mortgage deposits (7,699) (5,631) (57)
Mortgage notes payable:  
  
  
Proceeds 
 902,886
 26,495
Restricted cash 
 
 2,370
Lump sum payoffs (88,788) (2,532,682) (350,247)
Scheduled principal repayments (11,869) (12,658) (14,088)
Notes, net:  
  
  
Proceeds 1,194,277
 1,245,550
 
Lump sum payoffs (1,250,000) (400,000) (975,991)
Lines of credit:  
  
  
Proceeds 7,167,000
 9,832,000
 5,876,000
Repayments (6,949,000) (9,717,000) (5,876,000)
(Payments on) settlement of derivative instruments (758) (44,063) 
Proceeds from sale of OP Units 
 
 1,417,040
Proceeds from EQR's Employee Share Purchase Plan (ESPP) 3,392
 3,401
 5,399
Proceeds from exercise of EQR options 82,573
 17,252
 49,039
OP units repurchased and retired (1,777) 
 
Redemption of Preference Units 
 
 (150,000)
Premium on redemption of Preference Units 
 
 (23)
Payment of offering costs (41) (1,047) (39,359)
Other financing activities, net (49) (48) (48)
Acquisition of Noncontrolling Interests – Partially Owned Properties (5,501) 
 (13)
Contributions – Noncontrolling Interests – Partially Owned Properties 5,684
 27,660
 8,221
Contributions – Limited Partners 3
 5
 5
Distributions:  
  
  
OP Units – General Partner (776,659) (681,610) (473,451)
Preference Units (4,145) (4,145) (13,416)
OP Units – Limited Partners (30,744) (27,897) (21,915)
Noncontrolling Interests – Partially Owned Properties (7,778) (6,442) (5,083)
Net cash (used for) financing activities (692,861) (1,420,995) (556,331)
Net (decrease) increase in cash and cash equivalents (13,454) (559,056) 228,669
Cash and cash equivalents, beginning of year 53,534
 612,590
 383,921
Cash and cash equivalents, end of year $40,080
 $53,534
 $612,590










See accompanying notes
F-19




ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
SUPPLEMENTAL INFORMATION:  
  
  
Cash paid for interest, net of amounts capitalized $443,125
 $722,963
 $464,785
Net cash paid for income and other taxes $1,517
 $1,152
 $673
Real estate acquisitions/dispositions/other:  
  
  
Mortgage loans assumed $28,910
 $
 $137,644
Valuation of OP Units issued $
 $
 $66,606
Amortization of deferred financing costs:  
  
  
Investment in real estate, net $
 $(152) $
Deferred financing costs, net $11,088
 $22,577
 $21,435
Amortization of discounts and premiums on debt:  
  
  
Mortgage notes payable $(15,904) $(158,625) $(10,333)
Notes, net $2,384
 $2,186
 $2,152
Amortization of deferred settlements on derivative instruments:  
  
  
Other liabilities $(534) $(534) $(534)
Accumulated other comprehensive income $16,868
 $20,141
 $14,678
Loss from investments in unconsolidated entities:      
Investments in unconsolidated entities $4,610
 $53,066
 $14
Other liabilities $3,342
 $5,090
 $
Distributions from unconsolidated entities – return on capital:      
Investments in unconsolidated entities $5,360
 $2,448
 $575
Other liabilities $210
 $33
 $
Unrealized (gain) loss on derivative instruments:  
  
  
Other assets $10,160
 $(17,139) $7,448
Mortgage notes payable $
 $
 $(2,589)
Notes, net $1,597
 $(1,523) $(4,860)
Other liabilities $21,489
 $(39) $11,772
Accumulated other comprehensive income $(33,306) $18,771
 $(11,772)
Acquisition of Archstone, net of cash acquired:      
Investment in real estate, net $39,929
 $(8,687,355) $
Investments in unconsolidated entities $(33,993) $(225,568) $
Deposits – restricted $
 $(528) $
Escrow deposits – mortgage $
 $(37,582) $
Deferred financing costs, net $
 $(25,780) $
Other assets $(2,586) $(215,622) $
Mortgage notes payable $
 $3,076,876
 $
Accounts payable and accrued expenses $(146) $16,984
 $
Accrued interest payable $
 $11,305
 $
Other liabilities $(3,204) $117,299
 $
Security deposits $
 $10,965
 $
Issuance of OP Units $
 $1,929,868
 $
Noncontrolling Interests – Partially Owned Properties $
 $28,263
 $
Interest capitalized for real estate and unconsolidated entities under development:      
Investment in real estate, net $(52,717) $(45,533) $(21,661)
Investments in unconsolidated entities $(65) $(1,788) $(848)
Investments in unconsolidated entities:      
Investments in unconsolidated entities $(6,318) $(13,656) $(5,291)
Other liabilities $(9,450) $(52,815) $
Consolidation of previously unconsolidated properties:      
Investment in real estate, net $(64,319) $
 $
Investments in unconsolidated entities $(847) $
 $
Accounts payable and accrued expenses $1,987
 $
 $
Other liabilities $18,383
 $
 $

See accompanying notes
F-20




ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
SUPPLEMENTAL INFORMATION (continued):      
(Payments on) settlement of derivative instruments:      
Other assets $6,623
 $(50) $
Other liabilities $(7,381) $(44,013) $
Other:      
Receivable on sale of OP Units $
 $
 $28,457
Foreign currency translation adjustments $552
 $(613) $


See accompanying notes
F-21




ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
(Amounts in thousands)
  Year Ended December 31,
PARTNERS' CAPITAL 2014 2013 2012
       
PREFERENCE UNITS  
  
  
Balance, beginning of year $50,000
 $50,000
 $200,000
Redemption of 6.48% Series N Cumulative Redeemable 
 
 (150,000)
Balance, end of year $50,000
 $50,000
 $50,000
       
GENERAL PARTNER  
  
  
Balance, beginning of year $10,612,363
 $7,432,961
 $5,665,733
OP Unit Issuance:  
  
  
Conversion of OP Units held by Limited Partners into OP Units held by
General Partner
 2,365
 1,699
 18,929
Issuance of OP Units 
 1,929,868
 1,388,583
Exercise of EQR share options 82,573
 17,252
 49,039
EQR's Employee Share Purchase Plan (ESPP) 3,392
 3,401
 5,399
Share-based employee compensation expense:  
  
  
EQR restricted shares 9,904
 13,264
 8,936
EQR share options 7,349
 10,514
 11,752
EQR ESPP discount 859
 632
 965
OP Units repurchased and retired (1,777) 
 
Offering costs (41) (1,047) (39,359)
Premium on redemption of Preference Units – original issuance costs 
 
 5,129
Net income available to Units – General Partner 627,163
 1,826,468
 826,212
OP Units – General Partner distributions (723,782) (666,565) (554,429)
Supplemental Executive Retirement Plan (SERP) 7,374
 (422) 282
Acquisition of Noncontrolling Interests – Partially Owned Properties (2,308) 
 1,293
Change in market value of Redeemable Limited Partners (139,818) 79,667
 38,734
Adjustment for Limited Partners ownership in Operating Partnership 4,992
 (35,329) 5,763
Balance, end of year $10,490,608
 $10,612,363
 $7,432,961
       
LIMITED PARTNERS      
Balance, beginning of year $211,412
 $159,606
 $119,536
Issuance of OP Units to Limited Partners 
 
 66,606
Issuance of restricted units to Limited Partners 3
 5
 5
Conversion of OP Units held by Limited Partners into OP Units held by
General Partner
 (2,365) (1,699) (18,929)
Equity compensation associated with Units – Limited Partners 11,969
 13,609
 5,307
Net income available to Units – Limited Partners 24,831
 75,278
 38,641
Units – Limited Partners distributions (28,676) (26,277) (25,095)
Change in carrying value of Redeemable Limited Partners 2,229
 (44,439) (20,702)
Adjustment for Limited Partners ownership in Operating Partnership (4,992) 35,329
 (5,763)
Balance, end of year $214,411
 $211,412
 $159,606

See accompanying notes
F-22




ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (Continued)
(Amounts in thousands)
  Year Ended December 31,
PARTNERS' CAPITAL (continued) 2014 2013 2012
       
ACCUMULATED OTHER COMPREHENSIVE (LOSS)  
  
  
Balance, beginning of year $(155,162) $(193,148) $(196,718)
Accumulated other comprehensive (loss) income – derivative instruments:  
  
  
Unrealized holding (losses) gains arising during the year (33,306) 18,771
 (11,772)
Losses reclassified into earnings from other comprehensive income 16,868
 20,141
 14,678
Accumulated other comprehensive income (loss) – other instruments:  
  
  
Unrealized holding gains arising during the year 
 583
 664
(Gains) realized during the year 
 (2,122) 
Accumulated other comprehensive (loss) income – foreign currency:      
Currency translation adjustments arising during the year (552) 613
 
Balance, end of year $(172,152) $(155,162) $(193,148)
       
NONCONTROLLING INTERESTS  
  
  
       
NONCONTROLLING INTERESTS – PARTIALLY OWNED PROPERTIES  
  
  
Balance, beginning of year $126,583
 $77,688
 $74,306
Net income (loss) attributable to Noncontrolling Interests 2,544
 (538) 844
Contributions by Noncontrolling Interests 5,684
 27,660
 8,221
Distributions to Noncontrolling Interests (7,827) (6,490) (5,131)
Acquisition of Archstone 
 28,263
 
Acquisition of Noncontrolling Interests – Partially Owned Properties (2,244) 
 (1,306)
Other 169
 
 754
Balance, end of year $124,909
 $126,583
 $77,688





See accompanying notes
F-23




EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Impairment of Long-Lived Assets
The Company periodically evaluates its long-lived assets, including its investments in real estate, for indicators of impairment. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions and legal and environmental concerns, as well as the Company’s ability to hold and its intent with regard to each asset. Future events could occur which would cause the Company to conclude that impairment indicators exist and an impairment loss is warranted.
For long-lived assetsDepreciation of Investment in Real Estate
The Company depreciates the building component of its investment in real estate over a 30-year estimated useful life, building improvements over a 5-year to be held15-year estimated useful life and used,both the furniture, fixtures and equipment and replacement components over a 5-year to 10-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 a discussion of the Company’s policy with respect to capitalization vs. expensing of fixed asset/repair and maintenance costs. In addition, the Company comparescapitalizes an allocation of the expectedpayroll and associated costs of employees directly responsible for and who spend their time on the execution and supervision of major capital and/or renovation projects. These costs are reflected on the balance sheets as increases to depreciable property.

For all development projects, the Company uses its professional judgment in determining whether such costs meet the criteria for capitalization or must be expensed as incurred. The Company capitalizes interest, real estate taxes and insurance and payroll and associated costs for those individuals directly responsible for and who spend their time on development activities, with capitalization ceasing no later than 90 days following issuance of the certificate of occupancy. These costs are reflected on the balance sheets as construction-in-progress for each specific property. The Company expenses as incurred all payroll costs of on-site employees working directly at our properties, except as noted above on our development properties prior to certificate of occupancy issuance and on specific major renovations at selected properties when additional incremental employees are hired.

During the years ended December 31, 2014, 2013 and 2012, the Company capitalized $22.4 million, $16.5 million and $14.3 million, respectively, of payroll and associated costs of employees directly responsible for and who spend their time on the execution and supervision of development activities as well as major capital and/or renovation projects.
Fair Value of Financial Instruments, Including Derivative Instruments
The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, 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 Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.




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Funds From Operations and Normalized Funds From Operations
For the year ended December 31, 2014, Funds From Operations (“FFO”) available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units increased $318.5 million, or 36.5%, and increased $139.4 million, or 13.2%, respectively, as compared to the year ended December 31, 2013. For the year ended December 31, 2013, FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units decreased $120.8 million, or 12.2%, and increased $173.8 million, or 19.7%, respectively, as compared to the year ended December 31, 2012.
The following is the Company's and the Operating Partnership's reconciliation of net income to FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units for each of the five years ended December 31, 2014:

Funds From Operations and Normalized Funds From Operations
(Amounts in thousands)
   
  Year Ended December 31,
  2014 2013 2012 2011 2010
Net income$658,683
 $1,905,353
 $881,204
 $935,197
 $295,983
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties(2,544) 538
 (844) (832) 726
Preferred/preference distributions(4,145) (4,145) (10,355) (13,865) (14,368)
Premium on redemption of Preferred Shares/Preference Units
 
 (5,152) 
 
Net income available to Common Shares and Units / Units651,994
 1,901,746
 864,853
 920,500
 282,341
Adjustments:         
    Depreciation758,861
 978,973
 560,669
 506,175
 470,593
Depreciation – Non-real estate additions(4,643) (4,806) (5,346) (5,519) (6,566)
Depreciation – Partially Owned Properties(4,285) (6,499) (3,193) (3,062) (3,532)
Depreciation – Unconsolidated Properties6,754
 3,661
 
 
 1,913
Net (gain) on sales of unconsolidated entities – operating assets(4,902) (7) 
 
 (28,101)
Net (gain) on sales of real estate properties(212,685) 
 
 
 
Discontinued operations:         
    Depreciation
 34,380
 124,323
 157,353
 202,588
    Net (gain) on sales of discontinued operations(179) (2,036,505) (548,278) (826,489) (297,956)
Net incremental gain (loss) on sales of condominium units
 8
 (11) 1,993
 1,506
Gain on sale of Equity Corporate Housing (ECH)
 1,470
 200
 1,202
 
FFO available to Common Shares and Units / Units (1) (3) (4)1,190,915
 872,421
 993,217
 752,153
 622,786
Adjustments:         
    Asset impairment and valuation allowances
 
 
 
 45,380
Property acquisition costs and write-off of pursuit costs8,248
 79,365
 21,649
 14,557
 11,928
Debt extinguishment (gains) losses, including prepayment penalties, preferred share/         
    preference unit redemptions and non-cash convertible debt discounts(1,110) 121,730
 16,293
 12,300
 8,594
(Gains) losses on sales of non-operating assets, net of income and other tax expense         
    (benefit)(1,866) (17,908) (255) (6,976) (80)
    Other miscellaneous non-comparable items259
 1,465
 (147,635) (12,369) (6,186)
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)$1,196,446
 $1,057,073
 $883,269
 $759,665
 $682,422
           
FFO (1) (3)$1,195,060
 $876,566
 $1,008,724
 $766,018
 $637,154
Preferred/preference distributions(4,145) (4,145) (10,355) (13,865) (14,368)
Premium on redemption of Preferred Shares/Preference Units
 
 (5,152) 
 
FFO available to Common Shares and Units / Units (1) (3) (4)$1,190,915
 $872,421
 $993,217
 $752,153
 $622,786
           
Normalized FFO (2) (3)$1,200,591
 $1,061,218
 $893,624
 $773,530
 $696,790
Preferred/preference distributions(4,145) (4,145) (10,355) (13,865) (14,368)
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)$1,196,446
 $1,057,073
 $883,269
 $759,665
 $682,422

(1)The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (“FFO”) (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales and impairment write-downs of depreciable operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be

61



calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Company commences the conversion of apartment units to condominiums, it simultaneously discontinues depreciation of such property.

(2) Normalized funds from operations (“Normalized FFO”) begins with FFO and excludes:
the impact of any expenses relating to non-operating asset impairment and valuation allowances;
property acquisition and other transaction costs related to mergers and acquisitions and pursuit cost write-offs;
gains and losses from early debt extinguishment, including prepayment penalties, preferred share/preference unit redemptions and the cost related to the implied option value of non-cash convertible debt discounts;
gains and losses on the sales of non-operating assets, including gains and losses from land parcel and condominium sales, net of the effect of income tax benefits or expenses; and
other miscellaneous non-comparable items.

(3)The Company believes that FFO and FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units / Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies. The Company also believes that Normalized FFO and Normalized FFO available to Common Shares and Units / Units are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the Company’s operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results. FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units do not represent net income, net income available to Common Shares / Units or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units should not be exclusively considered as alternatives to net income, net income available to Common Shares / Units or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company’s calculation of FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.

(4)FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units are calculated on a basis consistent with net income available to Common Shares / Units and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares/preference units in accordance with accounting principles generally accepted in the United States. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the “Noncontrolling Interests – Operating Partnership”. Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Market risks relating to the Company’s financial instruments result primarily from changes in short-term LIBOR interest rates and changes in the Securities Industry and Financial Markets Association ("SIFMA") index for tax-exempt debt. The Company also has foreign exchange exposure related to undistributed cash remaining after the sale of its interests in German residential real estate that were acquired as part of the Archstone Transaction.

The Company’s exposure to market risk for changes in interest rates relates primarily to the unsecured revolving credit facility as well as floating rate tax-exempt debt. The Company typically incurs fixed rate debt obligations to finance acquisitions 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 Company continuously evaluates its level of floating rate debt with respect to total debt and other factors, including its assessment of the current and future undiscountedeconomic environment. To the extent the Company carries substantial cash balances, this will tend to partially counterbalance any increase or decrease in interest rates.

The Company also utilizes certain derivative financial instruments to manage market risk. Interest rate protection agreements are used to convert floating rate debt to a fixed rate basis or vice versa as well as to partially lock in rates on future debt issuances. Derivatives are used for hedging purposes rather than speculation. The Company does not enter into financial instruments for trading purposes. See also Note 9 to the Notes to Consolidated Financial Statements for additional discussion of derivative instruments.

The fair values of the Company’s financial instruments (including such items in the financial statement captions as cash and cash equivalents, other assets, accounts payable and accrued expenses 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 Company’s mortgage notes payable and unsecured debt (including its line of credit) were approximately $5.1 billion and $6.1 billion,

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respectively, at December 31, 2014.

At December 31, 2014, the Company had total outstanding floating rate debt of approximately $1.5 billion, or 14.0% of total debt, net of the effects of any derivative instruments. If market rates of interest on all of the floating rate debt permanently increased by 9 basis points (a 10% increase from the Company’s existing weighted average interest rates), the increase in interest expense on the floating rate debt would decrease future earnings and cash flows for the long-lived asset against the carrying amountby approximately $1.4 million. If market rates of that asset. If the suminterest on all of the estimated undiscountedfloating rate debt permanently decreased by 9 basis points (a 10% decrease from the Company’s existing weighted average interest rates), the decrease in interest expense on the floating rate debt would increase future earnings and cash flows is less thanby approximately $1.4 million.

At December 31, 2014, the carrying amountCompany had total outstanding fixed rate debt of approximately $9.3 billion, or 86.0% of total debt, net of the asset,effects of any derivative instruments. If market rates of interest permanently increased by 52 basis points (a 10% increase from the Company would record an impairment loss 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 whenCompany’s existing weighted average interest rates), the estimated fair value of the Company’s fixed rate debt would be approximately $8.5 billion. If market rates of interest permanently decreased by 52 basis points (a 10% decrease from the Company’s existing weighted average interest rates), the estimated fair value of the Company’s fixed rate debt would be approximately $10.4 billion.

At December 31, 2014, the Company’s derivative instruments had a net liability fair value of approximately $12.2 million. If market rates of interest permanently increased by 24 basis points (a 10% increase from the Company’s existing weighted average interest rates), the net liability fair value of the Company’s derivative instruments would be approximately $7.2 million. If market rates of interest permanently decreased by 24 basis points (a 10% decrease from the Company’s existing weighted average interest rates), the net liability fair value of the Company’s derivative instruments would be approximately $17.4 million.
At December 31, 2013, the Company had total outstanding floating rate debt of approximately $1.6 billion, or 15.3% of total debt, net of the effects of any derivative instruments. If market rates of interest on all of the floating rate debt permanently increased by 12 basis points (a 10% increase from the Company'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 $2.0million. If market rates of interest on all of the floating rate debt permanently decreased by 12 basis points (a 10% decrease from the Company'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 $2.0million.

At December 31, 2013, the Company had total outstanding fixed rate debt of approximately $9.1 billion, or 84.7% of total debt, net of the effects of any derivative instruments. If market rates of interest permanently increased by 51 basis points (a 10% increase from the Company's existing weighted average interest rates), the estimated fair value of the Company's fixed rate debt would be approximately $8.3 billion. If market rates of interest permanently decreased by 51 basis points (a 10% decrease from the Company's existing weighted average interest rates), the estimated fair value of the Company's fixed rate debt would be approximately $10.1 billion.

At December 31, 2013, the Company's derivative instruments had a net asset lessfair value of approximately $18.7 million. If market rates of interest permanently increased by 33 basis points (a 10% increase from the Company's existing weighted average interest rates), the net asset fair value of the Company's derivative instruments would be approximately $28.0 million. If market rates of interest permanently decreased by 33 basis points (a 10% decrease from the Company's existing weighted average interest rates), the net asset fair value of the Company's derivative instruments would be approximately $9.4 million.

These amounts were determined by considering the impact of hypothetical interest rates on the Company’s financial instruments. The foregoing assumptions apply to the entire amount of the Company’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 Company’s financial structure or results.

The Company 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 and Schedule on page F-1 of this Form 10-K.


F-2363



Item 9.     Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    None.
Item 9A. Controls and Procedures
Equity Residential
(a)  Evaluation of Disclosure Controls and Procedures:
Effective as of December 31, 2014, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’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 to ensure that information required to be disclosed by the Company in its Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
(b)  Management’s Report on Internal Control over Financial Reporting:
Equity Residential’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation.
Based on the Company’s evaluation under the framework in Internal Control – Integrated Framework, management concluded that its internal control over financial reporting was effective as of December 31, 2014. Our internal control over financial reporting has been audited as of December 31, 2014 by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.
(c)   Changes in Internal Control over Financial Reporting:
There were no changes to the internal control over financial reporting of the Company identified in connection with the Company’s evaluation referred to above that occurred during the fourth quarter of 2014 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ERP Operating Limited Partnership
(a)  Evaluation of Disclosure Controls and Procedures:
Effective as of December 31, 2014, 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 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 to ensure that information required to be disclosed by the Operating Partnership in its Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.
(b)  Management’s Report on Internal Control over Financial Reporting:
ERP Operating Limited Partnership's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of the Operating Partnership's general partner, management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial statement preparation and presentation.

Based on the Operating Partnership's evaluation under the framework in Internal Control – Integrated Framework, management concluded that its internal control over financial reporting was effective as of December 31, 2014. Our internal control

64



over financial reporting has been audited as of December 31, 2014 by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein.

(c)  Changes in Internal Control over Financial Reporting:
There were no changes to the internal control over financial reporting of the Operating Partnership identified in connection with the Operating Partnership's evaluation referred to above that occurred during the fourth quarter of 2014 that have materially affected, or are reasonably likely to materially affect, the Operating Partnership's internal control over financial reporting.

Item 9B. Other Information
None.


65



PART III

Items 10, 11, 12, 13 and 14.
Trustees, Executive Officers and Corporate Governance; Executive Compensation; Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters; Certain Relationships and Related Transactions, and Trustee Independence; and Principal Accounting Fees and Services.
The information required by Item 10, Item 11, Item 12, Item 13 and Item 14 is incorporated by reference to, and will be contained in, Equity Residential's Proxy Statement, which the Company intends to file no later than 120 days after the end of its fiscal year ended December 31, 2014, and thus these items have been omitted in accordance with General Instruction G(3) to Form 10-K. Equity Residential is the general partner and 96.2% owner of ERP Operating Limited Partnership.


66



PART IV

Item 15. Exhibits and Financial Statement Schedules.
(a)  The following documents are filed as part of this Report:
(1)Financial Statements: See Index to Consolidated Financial Statements and Schedule on page F-1 of this Form 10-K.
(2)Exhibits: See the Exhibit Index.
(3)Financial Statement Schedules: See Index to Consolidated Financial Statements and Schedule on page F-1 of this Form 10-K.


67



SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
EQUITY RESIDENTIAL
By: /s/ David J. Neithercut
David J. Neithercut
President and Chief Executive Officer
(Principal Executive Officer)
Date:February 26, 2015


ERP OPERATING LIMITED PARTNERSHIP
BY: EQUITY RESIDENTIAL
ITS GENERAL PARTNER
By: /s/ David J. Neithercut
David J. Neithercut
President and Chief Executive Officer
(Principal Executive Officer)
Date:February 26, 2015





EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP

POWER OF ATTORNEY
KNOW ALL MEN/WOMEN BY THESE PRESENTS, that each person whose signature appears below, hereby constitutes and appoints David J. Neithercut, Mark J. Parrell and Ian S. Kaufman, or any of them, his or her attorneys-in-fact and agents, with full power of substitution and resubstitution for him or her in any and all capacities, to do all acts and things which said attorneys and agents, or any of them, deem advisable to enable the company to comply with the Securities Exchange Act of 1934, as amended, and any requirements or regulations of the Securities and Exchange Commission in respect thereof, in connection with the company’s filing of an annual report on Form 10-K for the company’s fiscal year 2014, including specifically, but without limitation of the general authority hereby granted, the power and authority to sign his or her name as a trustee or officer, or both, of the company, as indicated below opposite his or her signature, to the Form 10-K, and any amendment thereto; and each of the undersigned does hereby fully ratify and confirm all that said attorneys and agents, or any of them, or the substitute of any of them, shall do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of each registrant and in the capacities set forth below and on the dates indicated:

NameTitleDate
/s/ David J. NeithercutPresident, Chief Executive Officer and TrusteeFebruary 26, 2015
David J. Neithercut(Principal Executive Officer)
/s/ Mark J. ParrellExecutive Vice President and Chief Financial OfficerFebruary 26, 2015
Mark J. Parrell(Principal Financial Officer)
/s/ Ian S. KaufmanSenior Vice President and Chief Accounting OfficerFebruary 26, 2015
Ian S. Kaufman(Principal Accounting Officer)
/s/ John W. AlexanderTrusteeFebruary 26, 2015
John W. Alexander
/s/ Charles L. AtwoodTrusteeFebruary 26, 2015
Charles L. Atwood
/s/ Linda Walker BynoeTrusteeFebruary 26, 2015
Linda Walker Bynoe
/s/ Mary Kay HabenTrusteeFebruary 26, 2015
Mary Kay Haben
/s/ Bradley A. KeywellTrusteeFebruary 26, 2015
Bradley A. Keywell
/s/ John E. NealTrusteeFebruary 26, 2015
John E. Neal
/s/ Mark S. ShapiroTrusteeFebruary 26, 2015
Mark S. Shapiro
/s/ Stephen E. SterrettTrusteeFebruary 26, 2015
Stephen E. Sterrett
/s/ B. Joseph WhiteTrusteeFebruary 26, 2015
B. Joseph White
/s/ Gerald A. SpectorVice Chairman of the Board of TrusteesFebruary 26, 2015
Gerald A. Spector
/s/ Samuel ZellChairman of the Board of TrusteesFebruary 26, 2015
Samuel Zell




INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP

PAGE
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT
Report of Independent Registered Public Accounting Firm (Equity Residential)
Report of Independent Registered Public Accounting Firm (ERP Operating Limited Partnership)
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial
    Reporting (Equity Residential)
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial
    Reporting (ERP Operating Limited Partnership)
Financial Statements of Equity Residential:
  Consolidated Balance Sheets as of December 31, 2014 and 2013
  Consolidated Statements of Operations and Comprehensive Income
      for the years ended December 31, 2014, 2013 and 2012
  Consolidated Statements of Cash Flows for the years ended
      December 31, 2014, 2013 and 2012
  Consolidated Statements of Changes in Equity for the years ended
      December 31, 2014, 2013 and 2012
Financial Statements of ERP Operating Limited Partnership:
  Consolidated Balance Sheets as of December 31, 2014 and 2013
  Consolidated Statements of Operations and Comprehensive Income
      for the years ended December 31, 2014, 2013 and 2012
  Consolidated Statements of Cash Flows for the years ended
      December 31, 2014, 2013 and 2012
  Consolidated Statements of Changes in Capital for the years ended
      December 31, 2014, 2013 and 2012
Notes to Consolidated Financial Statements of Equity Residential and ERP Operating
     Limited Partnership
SCHEDULE FILED AS PART OF THIS REPORT
Schedule III – Real Estate and Accumulated Depreciation of Equity Residential and ERP Operating
     Limited Partnership

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 OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees and Shareholders
Equity Residential
We have audited the accompanying consolidated balance sheets of Equity Residential (the “Company”) as of December 31, 2014 and 2013 and the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2014. Our audits also included the financial statement schedule listed in the accompanying index to the consolidated financial statements and schedule. These financial statements and schedule are the responsibility of the Company’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 the standards of the Public Company Accounting Oversight Board (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 Equity Residential at December 31, 2014 and 2013 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated 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 Company changed its method for reporting discontinued operations as a result of the adoption of Accounting Standards Update No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity," effective January 1, 2014.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Equity Residential’s internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 2015 expressed an unqualified opinion thereon.

/s/  ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
February 26, 2015


F-2



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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, 2014 and 2013 and the related consolidated statements of operations and comprehensive income, changes in capital and cash flows for each of the three years in the period ended December 31, 2014. Our audits also included the financial statement schedule listed in the accompanying index to the consolidated 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 the standards of the Public Company Accounting Oversight Board (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, 2014 and 2013 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated 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 for reporting discontinued operations as a result of the adoption of Accounting Standards Update No. 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity," effective January 1, 2014.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), ERP Operating Limited Partnership's internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 26, 2015 expressed an unqualified opinion thereon.

/s/  ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
February 26, 2015



F-3



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To the Board of Trustees and Shareholders
Equity Residential
We have audited Equity Residential’s (the “Company”) internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO Criteria”). Equity Residential’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Equity Residential maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the COSO Criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Equity Residential as of December 31, 2014 and 2013 and the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2014 of Equity Residential and our report dated February 26, 2015 expressed an unqualified opinion thereon.

/s/  ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
February 26, 2015


F-4




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON INTERNAL CONTROL OVER FINANCIAL REPORTING
To the Partners
ERP Operating Limited Partnership
We have audited ERP Operating Limited Partnership's (the “Operating Partnership”) internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the “COSO Criteria”). ERP Operating Limited Partnership's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, ERP Operating Limited Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the COSO Criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of ERP Operating Limited Partnership as of December 31, 2014 and 2013 and the related consolidated statements of operations and comprehensive income, changes in capital and cash flows for each of the three years in the period ended December 31, 2014 of ERP Operating Limited Partnership and our report dated February 26, 2015 expressed an unqualified opinion thereon.

/s/  ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
February 26, 2015


F-5



EQUITY RESIDENTIAL
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except for share amounts)
  December 31, 2014 December 31, 2013
ASSETS    
Investment in real estate  
  
Land $6,295,404
 $6,192,512
Depreciable property 19,851,504
 19,226,047
Projects under development 1,343,919
 988,867
Land held for development 184,556
 393,522
Investment in real estate 27,675,383
 26,800,948
Accumulated depreciation (5,432,805) (4,807,709)
Investment in real estate, net 22,242,578
 21,993,239
Cash and cash equivalents 40,080
 53,534
Investments in unconsolidated entities 105,434
 178,526
Deposits – restricted 72,303
 103,567
Escrow deposits – mortgage 48,085
 42,636
Deferred financing costs, net 58,380
 58,486
Other assets 383,754
 404,557
Total assets $22,950,614
 $22,834,545
     
LIABILITIES AND EQUITY    
Liabilities:    
Mortgage notes payable $5,086,515
 $5,174,166
Notes, net 5,425,346
 5,477,088
Lines of credit 333,000
 115,000
Accounts payable and accrued expenses 153,590
 118,791
Accrued interest payable 89,540
 78,309
Other liabilities 389,915
 347,748
Security deposits 75,633
 71,592
Distributions payable 188,566
 243,511
Total liabilities 11,742,105
 11,626,205
     
Commitments and contingencies    
     
Redeemable Noncontrolling Interests – Operating Partnership 500,733
 363,144
Equity:    
Shareholders’ equity:    
Preferred Shares of beneficial interest, $0.01 par value;    
100,000,000 shares authorized; 1,000,000 shares issued and
outstanding as of December 31, 2014 and December 31, 2013
 50,000
 50,000
Common Shares of beneficial interest, $0.01 par value;    
1,000,000,000 shares authorized; 362,855,454 shares issued
and outstanding as of December 31, 2014 and 360,479,260
shares issued and outstanding as of December 31, 2013
 3,629
 3,605
Paid in capital 8,536,340
 8,561,500
Retained earnings 1,950,639
 2,047,258
Accumulated other comprehensive (loss) (172,152) (155,162)
Total shareholders’ equity 10,368,456
 10,507,201
Noncontrolling Interests:    
Operating Partnership 214,411
 211,412
Partially Owned Properties 124,909
 126,583
Total Noncontrolling Interests 339,320
 337,995
Total equity 10,707,776
 10,845,196
Total liabilities and equity $22,950,614
 $22,834,545

See accompanying notes
F-6




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Amounts in thousands except per share data)
  Year Ended December 31,
  2014 2013 2012
REVENUES  
  
  
Rental income $2,605,311
 $2,378,004
 $1,737,929
Fee and asset management 9,437
 9,698
 9,573
Total revenues 2,614,748
 2,387,702
 1,747,502
       
EXPENSES      
Property and maintenance 473,098
 449,427
 332,219
Real estate taxes and insurance 325,401
 293,999
 206,723
Property management 79,636
 84,342
 81,902
Fee and asset management 5,429
 6,460
 4,663
Depreciation 758,861
 978,973
 560,669
General and administrative 50,948
 62,179
 47,233
Total expenses 1,693,373
 1,875,380
 1,233,409
       
Operating income 921,375
 512,322
 514,093
       
Interest and other income 4,462
 5,283
 151,060
Other expenses (9,073) (29,630) (27,796)
Interest:  
  
  
Expense incurred, net (457,191) (586,854) (455,236)
Amortization of deferred financing costs (11,088) (22,197) (21,295)
Income (loss) before income and other taxes, (loss) from investments
in unconsolidated entities, net gain on sales of real estate properties and
land parcels and discontinued operations
 448,485
 (121,076) 160,826
Income and other tax (expense) benefit (1,394) (1,169) (514)
(Loss) from investments in unconsolidated entities (7,952) (58,156) (14)
Net gain on sales of real estate properties 212,685
 
 
Net gain on sales of land parcels 5,277
 12,227
 
Income (loss) from continuing operations 657,101
 (168,174) 160,298
Discontinued operations, net 1,582
 2,073,527
 720,906
Net income 658,683
 1,905,353
 881,204
Net (income) loss attributable to Noncontrolling Interests:  
  
  
Operating Partnership (24,831) (75,278) (38,641)
Partially Owned Properties (2,544) 538
 (844)
Net income attributable to controlling interests 631,308
 1,830,613
 841,719
Preferred distributions (4,145) (4,145) (10,355)
Premium on redemption of Preferred Shares 
 
 (5,152)
Net income available to Common Shares $627,163
 $1,826,468
 $826,212
       
Earnings per share – basic:  
  
  
Income (loss) from continuing operations available to Common Shares $1.73
 $(0.47) $0.45
Net income available to Common Shares $1.74
 $5.16
 $2.73
Weighted average Common Shares outstanding 361,181
 354,305
 302,701
       
Earnings per share – diluted:  
  
  
Income (loss) from continuing operations available to Common Shares $1.72
 $(0.47) $0.45
Net income available to Common Shares $1.73
 $5.16
 $2.70
Weighted average Common Shares outstanding 377,735
 354,305
 319,766
       
Distributions declared per Common Share outstanding $2.00
 $1.85
 $1.78

See accompanying notes
F-7




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)
(Amounts in thousands except per share data)

  Year Ended December 31,
  2014 2013 2012
Comprehensive income:  
  
  
Net income $658,683
 $1,905,353
 $881,204
Other comprehensive (loss) income:      
Other comprehensive (loss) income – derivative instruments:  
  
  
Unrealized holding (losses) gains arising during the year (33,306) 18,771
 (11,772)
Losses reclassified into earnings from other comprehensive income 16,868
 20,141
 14,678
Other comprehensive income (loss) – other instruments:  
  
  
Unrealized holding gains arising during the year 
 583
 664
(Gains) realized during the year 
 (2,122) 
Other comprehensive (loss) income – foreign currency:      
Currency translation adjustments arising during the year (552) 613
 
Other comprehensive (loss) income (16,990) 37,986
 3,570
Comprehensive income 641,693
 1,943,339
 884,774
Comprehensive (income) attributable to Noncontrolling Interests (26,728) (76,204) (39,624)
Comprehensive income attributable to controlling interests $614,965
 $1,867,135
 $845,150


See accompanying notes
F-8




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)

  Year Ended December 31,
  2014 2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:  
  
  
Net income $658,683
 $1,905,353
 $881,204
Adjustments to reconcile net income to net cash provided by operating activities:  
  
  
Depreciation 758,861
 1,013,353
 684,992
Amortization of deferred financing costs 11,088
 22,425
 21,435
Amortization of above/below market leases 3,222
 898
 
Amortization of discounts and premiums on debt (13,520) (156,439) (8,181)
Amortization of deferred settlements on derivative instruments 16,334
 19,607
 14,144
Write-off of pursuit costs 3,607
 5,184
 9,056
Loss from investments in unconsolidated entities 7,952
 58,156
 14
Distributions from unconsolidated entities – return on capital 5,570
 2,481
 575
Net (gain) on sales of investment securities (57) (4,203) 
Net (gain) on sales of real estate properties (212,685) 
 
Net (gain) on sales of land parcels (5,277) (12,227) 
Net (gain) on sales of discontinued operations (179) (2,036,505) (548,278)
Unrealized (gain) loss on derivative instruments (60) 70
 (1)
Compensation paid with Company Common Shares 27,543
 35,474
 24,832
Changes in assets and liabilities:  
  
  
(Increase) decrease in deposits – restricted (1,740) 3,684
 (4,091)
Decrease in mortgage deposits 1,452
 1,813
 176
Decrease (increase) in other assets 21,773
 3,742
 (20,411)
Increase (decrease) in accounts payable and accrued expenses 17,797
 6,229
 (2,102)
Increase (decrease) in accrued interest payable 11,231
 (9,219) (11,898)
Increase in other liabilities 8,437
 15,401
 2,987
Increase (decrease) in security deposits 4,041
 (6,361) 1,702
Net cash provided by operating activities 1,324,073
 868,916
 1,046,155
       
CASH FLOWS FROM INVESTING ACTIVITIES:  
  
  
Acquisition of Archstone, net of cash acquired 
 (4,000,875) 
Investment in real estate – acquisitions (469,989) (108,308) (843,976)
Investment in real estate – development/other (530,387) (377,442) (180,409)
Capital expenditures to real estate (185,957) (135,816) (152,828)
Non-real estate capital additions (5,286) (4,134) (8,821)
Interest capitalized for real estate and unconsolidated entities under development (52,782) (47,321) (22,509)
Proceeds from disposition of real estate, net 522,647
 4,551,454
 1,049,219
Investments in unconsolidated entities (15,768) (66,471) (5,291)
Distributions from unconsolidated entities – return of capital 103,793
 25,471
 
Proceeds from sale of investment securities 57
 4,878
 
Decrease (increase) in deposits on real estate acquisitions and investments, net 33,004
 143,694
 (97,984)
Decrease in mortgage deposits 798
 7,893
 1,444
Consolidation of previously unconsolidated properties (44,796) 
 
Net cash (used for) investing activities (644,666) (6,977) (261,155)

See accompanying notes
F-9




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
CASH FLOWS FROM FINANCING ACTIVITIES:  
  
  
Debt financing costs $(10,982) $(16,526) $(21,209)
Mortgage deposits (7,699) (5,631) (57)
Mortgage notes payable:  
  
  
Proceeds 
 902,886
 26,495
Restricted cash 
 
 2,370
Lump sum payoffs (88,788) (2,532,682) (350,247)
Scheduled principal repayments (11,869) (12,658) (14,088)
Notes, net:  
  
  
Proceeds 1,194,277
 1,245,550
 
Lump sum payoffs (1,250,000) (400,000) (975,991)
Lines of credit:  
  
  
Proceeds 7,167,000
 9,832,000
 5,876,000
Repayments (6,949,000) (9,717,000) (5,876,000)
(Payments on) settlement of derivative instruments (758) (44,063) 
Proceeds from sale of Common Shares 
 
 1,417,040
Proceeds from Employee Share Purchase Plan (ESPP) 3,392
 3,401
 5,399
Proceeds from exercise of options 82,573
 17,252
 49,039
Common Shares repurchased and retired (1,777) 
 
Redemption of Preferred Shares 
 
 (150,000)
Premium on redemption of Preferred Shares 
 
 (23)
Payment of offering costs (41) (1,047) (39,359)
Other financing activities, net (49) (48) (48)
Acquisition of Noncontrolling Interests – Partially Owned Properties (5,501) 
 (13)
Contributions – Noncontrolling Interests – Partially Owned Properties 5,684
 27,660
 8,221
Contributions – Noncontrolling Interests – Operating Partnership 3
 5
 5
Distributions:  
  
  
Common Shares (776,659) (681,610) (473,451)
Preferred Shares (4,145) (4,145) (13,416)
Noncontrolling Interests – Operating Partnership (30,744) (27,897) (21,915)
Noncontrolling Interests – Partially Owned Properties (7,778) (6,442) (5,083)
Net cash (used for) financing activities (692,861) (1,420,995) (556,331)
Net (decrease) increase in cash and cash equivalents (13,454) (559,056) 228,669
Cash and cash equivalents, beginning of year 53,534
 612,590
 383,921
Cash and cash equivalents, end of year $40,080
 $53,534
 $612,590










See accompanying notes
F-10




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
SUPPLEMENTAL INFORMATION:  
  
  
Cash paid for interest, net of amounts capitalized $443,125
 $722,963
 $464,785
Net cash paid for income and other taxes $1,517
 $1,152
 $673
Real estate acquisitions/dispositions/other:  
  
  
Mortgage loans assumed $28,910
 $
 $137,644
Valuation of OP Units issued $
 $
 $66,606
Amortization of deferred financing costs:  
  
  
Investment in real estate, net $
 $(152) $
Deferred financing costs, net $11,088
 $22,577
 $21,435
Amortization of discounts and premiums on debt:  
  
  
Mortgage notes payable $(15,904) $(158,625) $(10,333)
Notes, net $2,384
 $2,186
 $2,152
Amortization of deferred settlements on derivative instruments:  
  
  
Other liabilities $(534) $(534) $(534)
Accumulated other comprehensive income $16,868
 $20,141
 $14,678
Loss from investments in unconsolidated entities:      
Investments in unconsolidated entities $4,610
 $53,066
 $14
Other liabilities $3,342
 $5,090
 $
Distributions from unconsolidated entities – return on capital:      
Investments in unconsolidated entities $5,360
 $2,448
 $575
Other liabilities $210
 $33
 $
Unrealized (gain) loss on derivative instruments:  
  
  
Other assets $10,160
 $(17,139) $7,448
Mortgage notes payable $
 $
 $(2,589)
Notes, net $1,597
 $(1,523) $(4,860)
Other liabilities $21,489
 $(39) $11,772
Accumulated other comprehensive income $(33,306) $18,771
 $(11,772)
Acquisition of Archstone, net of cash acquired:      
Investment in real estate, net $39,929
 $(8,687,355) $
Investments in unconsolidated entities $(33,993) $(225,568) $
Deposits – restricted $
 $(528) $
Escrow deposits – mortgage $
 $(37,582) $
Deferred financing costs, net $
 $(25,780) $
Other assets $(2,586) $(215,622) $
Mortgage notes payable $
 $3,076,876
 $
Accounts payable and accrued expenses $(146) $16,984
 $
Accrued interest payable $
 $11,305
 $
Other liabilities $(3,204) $117,299
 $
Security deposits $
 $10,965
 $
Issuance of Common Shares $
 $1,929,868
 $
Noncontrolling Interests – Partially Owned Properties $
 $28,263
 $
Interest capitalized for real estate and unconsolidated entities under development:      
Investment in real estate, net $(52,717) $(45,533) $(21,661)
Investments in unconsolidated entities $(65) $(1,788) $(848)
Investments in unconsolidated entities:      
Investments in unconsolidated entities $(6,318) $(13,656) $(5,291)
Other liabilities $(9,450) $(52,815) $
Consolidation of previously unconsolidated properties:      
Investment in real estate, net $(64,319) $
 $
Investments in unconsolidated entities $(847) $
 $
Accounts payable and accrued expenses $1,987
 $
 $
Other liabilities $18,383
 $
 $

See accompanying notes
F-11




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
SUPPLEMENTAL INFORMATION (continued):      
(Payments on) settlement of derivative instruments:  
  
  
Other assets $6,623
 $(50) $
Other liabilities $(7,381) $(44,013) $
Other:  
  
  
Receivable on sale of Common Shares $
 $
 $28,457
Foreign currency translation adjustments $552
 $(613) $


See accompanying notes
F-12




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Amounts in thousands)

  Year Ended December 31,
SHAREHOLDERS’ EQUITY 2014 2013 2012
       
PREFERRED SHARES  
  
  
Balance, beginning of year $50,000
 $50,000
 $200,000
Redemption of 6.48% Series N Cumulative Redeemable 
 
 (150,000)
Balance, end of year $50,000
 $50,000
 $50,000
       
COMMON SHARES, $0.01 PAR VALUE  
  
  
Balance, beginning of year $3,605
 $3,251
 $2,975
Conversion of OP Units into Common Shares 1
 1
 7
Issuance of Common Shares 
 345
 250
Exercise of share options 21
 5
 16
Employee Share Purchase Plan (ESPP) 
 1
 1
Share-based employee compensation expense:  
  
  
Restricted shares 2
 2
 2
Balance, end of year $3,629
 $3,605
 $3,251
       
PAID IN CAPITAL  
  
  
Balance, beginning of year $8,561,500
 $6,542,355
 $5,047,186
Common Share Issuance:  
  
  
Conversion of OP Units into Common Shares 2,364
 1,698
 18,922
Issuance of Common Shares 
 1,929,523
 1,388,333
Exercise of share options 82,552
 17,247
 49,023
Employee Share Purchase Plan (ESPP) 3,392
 3,400
 5,398
Share-based employee compensation expense:  
  
  
Restricted shares 9,902
 13,262
 8,934
Share options 7,349
 10,514
 11,752
ESPP discount 859
 632
 965
Common Shares repurchased and retired (1,777) 
 
Offering costs (41) (1,047) (39,359)
Premium on redemption of Preferred Shares – original issuance costs 
 
 5,129
Supplemental Executive Retirement Plan (SERP) 7,374
 (422) 282
Acquisition of Noncontrolling Interests – Partially Owned Properties (2,308) 
 1,293
Change in market value of Redeemable Noncontrolling Interests – Operating
Partnership
 (139,818) 79,667
 38,734
Adjustment for Noncontrolling Interests ownership in Operating Partnership 4,992
 (35,329) 5,763
Balance, end of year $8,536,340
 $8,561,500
 $6,542,355




See accompanying notes
F-13




EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)
(Amounts in thousands)
  Year Ended December 31,
SHAREHOLDERS’ EQUITY (continued) 2014 2013 2012
       
RETAINED EARNINGS  
  
  
Balance, beginning of year $2,047,258
 $887,355
 $615,572
Net income attributable to controlling interests 631,308
 1,830,613
 841,719
Common Share distributions (723,782) (666,565) (554,429)
Preferred Share distributions (4,145) (4,145) (10,355)
Premium on redemption of Preferred Shares – cash charge 
 
 (23)
Premium on redemption of Preferred Shares – original issuance costs 
 
 (5,129)
Balance, end of year $1,950,639
 $2,047,258
 $887,355
       
ACCUMULATED OTHER COMPREHENSIVE (LOSS)  
  
  
Balance, beginning of year $(155,162) $(193,148) $(196,718)
Accumulated other comprehensive (loss) income – derivative instruments:  
  
  
Unrealized holding (losses) gains arising during the year (33,306) 18,771
 (11,772)
Losses reclassified into earnings from other comprehensive income 16,868
 20,141
 14,678
Accumulated other comprehensive income (loss) – other instruments:  
  
  
Unrealized holding gains arising during the year 
 583
 664
(Gains) realized during the year 
 (2,122) 
Accumulated other comprehensive (loss) income – foreign currency:      
Currency translation adjustments arising during the year (552) 613
 
Balance, end of year $(172,152) $(155,162) $(193,148)
       
NONCONTROLLING INTERESTS  
  
  
       
OPERATING PARTNERSHIP  
  
  
Balance, beginning of year $211,412
 $159,606
 $119,536
Issuance of OP Units to Noncontrolling Interests 
 
 66,606
Issuance of restricted units to Noncontrolling Interests 3
 5
 5
Conversion of OP Units held by Noncontrolling Interests into OP Units held
by General Partner
 (2,365) (1,699) (18,929)
Equity compensation associated with Noncontrolling Interests 11,969
 13,609
 5,307
Net income attributable to Noncontrolling Interests 24,831
 75,278
 38,641
Distributions to Noncontrolling Interests (28,676) (26,277) (25,095)
Change in carrying value of Redeemable Noncontrolling Interests – Operating
Partnership
 2,229
 (44,439) (20,702)
Adjustment for Noncontrolling Interests ownership in Operating Partnership (4,992) 35,329
 (5,763)
Balance, end of year $214,411
 $211,412
 $159,606
       
PARTIALLY OWNED PROPERTIES  
  
  
Balance, beginning of year $126,583
 $77,688
 $74,306
Net income (loss) attributable to Noncontrolling Interests 2,544
 (538) 844
Contributions by Noncontrolling Interests 5,684
 27,660
 8,221
Distributions to Noncontrolling Interests (7,827) (6,490) (5,131)
Acquisition of Archstone 
 28,263
 
Acquisition of Noncontrolling Interests – Partially Owned Properties (2,244) 
 (1,306)
Other 169
 
 754
Balance, end of year $124,909
 $126,583
 $77,688

See accompanying notes
F-14




ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

  December 31, 2014 December 31, 2013
ASSETS    
Investment in real estate  
  
Land $6,295,404
 $6,192,512
Depreciable property 19,851,504
 19,226,047
Projects under development 1,343,919
 988,867
Land held for development 184,556
 393,522
Investment in real estate 27,675,383
 26,800,948
Accumulated depreciation (5,432,805) (4,807,709)
Investment in real estate, net 22,242,578
 21,993,239
Cash and cash equivalents 40,080
 53,534
Investments in unconsolidated entities 105,434
 178,526
Deposits – restricted 72,303
 103,567
Escrow deposits – mortgage 48,085
 42,636
Deferred financing costs, net 58,380
 58,486
Other assets 383,754
 404,557
Total assets $22,950,614
 $22,834,545
     
LIABILITIES AND CAPITAL    
Liabilities:  
  
Mortgage notes payable $5,086,515
 $5,174,166
Notes, net 5,425,346
 5,477,088
Lines of credit 333,000
 115,000
Accounts payable and accrued expenses 153,590
 118,791
Accrued interest payable 89,540
 78,309
Other liabilities 389,915
 347,748
Security deposits 75,633
 71,592
Distributions payable 188,566
 243,511
Total liabilities 11,742,105
 11,626,205
     
Commitments and contingencies  
  
     
Redeemable Limited Partners 500,733
 363,144
Capital:  
  
Partners' Capital:  
  
Preference Units 50,000
 50,000
General Partner 10,490,608
 10,612,363
Limited Partners 214,411
 211,412
Accumulated other comprehensive (loss) (172,152) (155,162)
Total partners' capital 10,582,867
 10,718,613
Noncontrolling Interests – Partially Owned Properties 124,909
 126,583
Total capital 10,707,776
 10,845,196
Total liabilities and capital $22,950,614
 $22,834,545









See accompanying notes
F-15




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

  Year Ended December 31,
  2014 2013 2012
REVENUES  
    
Rental income $2,605,311
 $2,378,004
 $1,737,929
Fee and asset management 9,437
 9,698
 9,573
Total revenues 2,614,748
 2,387,702
 1,747,502
       
EXPENSES  
  
  
Property and maintenance 473,098
 449,427
 332,219
Real estate taxes and insurance 325,401
 293,999
 206,723
Property management 79,636
 84,342
 81,902
Fee and asset management 5,429
 6,460
 4,663
Depreciation 758,861
 978,973
 560,669
General and administrative 50,948
 62,179
 47,233
Total expenses 1,693,373
 1,875,380
 1,233,409
       
Operating income 921,375
 512,322
 514,093
       
Interest and other income 4,462
 5,283
 151,060
Other expenses (9,073) (29,630) (27,796)
Interest:  
  
  
Expense incurred, net (457,191) (586,854) (455,236)
Amortization of deferred financing costs (11,088) (22,197) (21,295)
Income (loss) before income and other taxes, (loss) from investments
in unconsolidated entities, net gain on sales of real estate properties and
land parcels and discontinued operations
 448,485
 (121,076) 160,826
Income and other tax (expense) benefit (1,394) (1,169) (514)
(Loss) from investments in unconsolidated entities (7,952) (58,156) (14)
Net gain on sales of real estate properties 212,685
 
 
Net gain on sales of land parcels 5,277
 12,227
 
Income (loss) from continuing operations 657,101
 (168,174) 160,298
Discontinued operations, net 1,582
 2,073,527
 720,906
Net income 658,683
 1,905,353
 881,204
Net (income) loss attributable to Noncontrolling Interests – Partially
Owned Properties
��(2,544) 538
 (844)
Net income attributable to controlling interests $656,139
 $1,905,891
 $880,360
       
ALLOCATION OF NET INCOME:      
Preference Units $4,145
 $4,145
 $10,355
Premium on redemption of Preference Units $
 $
 $5,152
       
General Partner $627,163
 $1,826,468
 $826,212
Limited Partners 24,831
 75,278
 38,641
Net income available to Units $651,994
 $1,901,746
 $864,853
       
Earnings per Unit – basic:  
  
  
Income (loss) from continuing operations available to Units $1.73
 $(0.47) $0.45
Net income available to Units $1.74
 $5.16
 $2.73
Weighted average Units outstanding 374,899
 368,038
 316,554
       
Earnings per Unit – diluted:  
  
  
Income (loss) from continuing operations available to Units $1.72
 $(0.47) $0.45
Net income available to Units $1.73
 $5.16
 $2.70
Weighted average Units outstanding 377,735
 368,038
 319,766
       
Distributions declared per Unit outstanding $2.00
 $1.85
 $1.78


See accompanying notes
F-16




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

  Year Ended December 31,
  2014 2013 2012
Comprehensive income:  
  
  
Net income $658,683
 $1,905,353
 $881,204
Other comprehensive (loss) income:      
Other comprehensive (loss) income – derivative instruments:  
  
  
Unrealized holding (losses) gains arising during the year (33,306) 18,771
 (11,772)
Losses reclassified into earnings from other comprehensive income 16,868
 20,141
 14,678
Other comprehensive income (loss) – other instruments:  
  
  
Unrealized holding gains arising during the year 
 583
 664
(Gains) realized during the year 
 (2,122) 
Other comprehensive (loss) income – foreign currency:      
Currency translation adjustments arising during the year (552) 613
 
Other comprehensive (loss) income (16,990) 37,986
 3,570
Comprehensive income 641,693
 1,943,339
 884,774
Comprehensive (income) loss attributable to Noncontrolling Interests –
Partially Owned Properties
 (2,544) 538
 (844)
Comprehensive income attributable to controlling interests $639,149
 $1,943,877
 $883,930




See accompanying notes
F-17




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

  Year Ended December 31,
  2014 2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:  
  
  
Net income $658,683
 $1,905,353
 $881,204
Adjustments to reconcile net income to net cash provided by operating activities:  
  
  
Depreciation 758,861
 1,013,353
 684,992
Amortization of deferred financing costs 11,088
 22,425
 21,435
Amortization of above/below market leases 3,222
 898
 
Amortization of discounts and premiums on debt (13,520) (156,439) (8,181)
Amortization of deferred settlements on derivative instruments 16,334
 19,607
 14,144
Write-off of pursuit costs 3,607
 5,184
 9,056
Loss from investments in unconsolidated entities 7,952
 58,156
 14
Distributions from unconsolidated entities – return on capital 5,570
 2,481
 575
Net (gain) on sales of investment securities (57) (4,203) 
Net (gain) on sales of real estate properties (212,685) 
 
Net (gain) on sales of land parcels (5,277) (12,227) 
Net (gain) on sales of discontinued operations (179) (2,036,505) (548,278)
Unrealized (gain) loss on derivative instruments (60) 70
 (1)
Compensation paid with Company Common Shares 27,543
 35,474
 24,832
Changes in assets and liabilities:  
  
  
(Increase) decrease in deposits – restricted (1,740) 3,684
 (4,091)
Decrease in mortgage deposits 1,452
 1,813
 176
Decrease (increase) in other assets 21,773
 3,742
 (20,411)
Increase (decrease) in accounts payable and accrued expenses 17,797
 6,229
 (2,102)
Increase (decrease) in accrued interest payable 11,231
 (9,219) (11,898)
Increase in other liabilities 8,437
 15,401
 2,987
Increase (decrease) in security deposits 4,041
 (6,361) 1,702
Net cash provided by operating activities 1,324,073
 868,916
 1,046,155
       
CASH FLOWS FROM INVESTING ACTIVITIES:  
  
  
Acquisition of Archstone, net of cash acquired 
 (4,000,875) 
Investment in real estate – acquisitions (469,989) (108,308) (843,976)
Investment in real estate – development/other (530,387) (377,442) (180,409)
Capital expenditures to real estate (185,957) (135,816) (152,828)
Non-real estate capital additions (5,286) (4,134) (8,821)
Interest capitalized for real estate and unconsolidated entities under development (52,782) (47,321) (22,509)
Proceeds from disposition of real estate, net 522,647
 4,551,454
 1,049,219
Investments in unconsolidated entities (15,768) (66,471) (5,291)
Distributions from unconsolidated entities – return of capital 103,793
 25,471
 
Proceeds from sale of investment securities 57
 4,878
 
Decrease (increase) in deposits on real estate acquisitions and investments, net 33,004
 143,694
 (97,984)
Decrease in mortgage deposits 798
 7,893
 1,444
Consolidation of previously unconsolidated properties (44,796) 
 
Net cash (used for) investing activities (644,666) (6,977) (261,155)







See accompanying notes
F-18




ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
CASH FLOWS FROM FINANCING ACTIVITIES:  
  
  
Debt financing costs $(10,982) $(16,526) $(21,209)
Mortgage deposits (7,699) (5,631) (57)
Mortgage notes payable:  
  
  
Proceeds 
 902,886
 26,495
Restricted cash 
 
 2,370
Lump sum payoffs (88,788) (2,532,682) (350,247)
Scheduled principal repayments (11,869) (12,658) (14,088)
Notes, net:  
  
  
Proceeds 1,194,277
 1,245,550
 
Lump sum payoffs (1,250,000) (400,000) (975,991)
Lines of credit:  
  
  
Proceeds 7,167,000
 9,832,000
 5,876,000
Repayments (6,949,000) (9,717,000) (5,876,000)
(Payments on) settlement of derivative instruments (758) (44,063) 
Proceeds from sale of OP Units 
 
 1,417,040
Proceeds from EQR's Employee Share Purchase Plan (ESPP) 3,392
 3,401
 5,399
Proceeds from exercise of EQR options 82,573
 17,252
 49,039
OP units repurchased and retired (1,777) 
 
Redemption of Preference Units 
 
 (150,000)
Premium on redemption of Preference Units 
 
 (23)
Payment of offering costs (41) (1,047) (39,359)
Other financing activities, net (49) (48) (48)
Acquisition of Noncontrolling Interests – Partially Owned Properties (5,501) 
 (13)
Contributions – Noncontrolling Interests – Partially Owned Properties 5,684
 27,660
 8,221
Contributions – Limited Partners 3
 5
 5
Distributions:  
  
  
OP Units – General Partner (776,659) (681,610) (473,451)
Preference Units (4,145) (4,145) (13,416)
OP Units – Limited Partners (30,744) (27,897) (21,915)
Noncontrolling Interests – Partially Owned Properties (7,778) (6,442) (5,083)
Net cash (used for) financing activities (692,861) (1,420,995) (556,331)
Net (decrease) increase in cash and cash equivalents (13,454) (559,056) 228,669
Cash and cash equivalents, beginning of year 53,534
 612,590
 383,921
Cash and cash equivalents, end of year $40,080
 $53,534
 $612,590










See accompanying notes
F-19




ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
SUPPLEMENTAL INFORMATION:  
  
  
Cash paid for interest, net of amounts capitalized $443,125
 $722,963
 $464,785
Net cash paid for income and other taxes $1,517
 $1,152
 $673
Real estate acquisitions/dispositions/other:  
  
  
Mortgage loans assumed $28,910
 $
 $137,644
Valuation of OP Units issued $
 $
 $66,606
Amortization of deferred financing costs:  
  
  
Investment in real estate, net $
 $(152) $
Deferred financing costs, net $11,088
 $22,577
 $21,435
Amortization of discounts and premiums on debt:  
  
  
Mortgage notes payable $(15,904) $(158,625) $(10,333)
Notes, net $2,384
 $2,186
 $2,152
Amortization of deferred settlements on derivative instruments:  
  
  
Other liabilities $(534) $(534) $(534)
Accumulated other comprehensive income $16,868
 $20,141
 $14,678
Loss from investments in unconsolidated entities:      
Investments in unconsolidated entities $4,610
 $53,066
 $14
Other liabilities $3,342
 $5,090
 $
Distributions from unconsolidated entities – return on capital:      
Investments in unconsolidated entities $5,360
 $2,448
 $575
Other liabilities $210
 $33
 $
Unrealized (gain) loss on derivative instruments:  
  
  
Other assets $10,160
 $(17,139) $7,448
Mortgage notes payable $
 $
 $(2,589)
Notes, net $1,597
 $(1,523) $(4,860)
Other liabilities $21,489
 $(39) $11,772
Accumulated other comprehensive income $(33,306) $18,771
 $(11,772)
Acquisition of Archstone, net of cash acquired:      
Investment in real estate, net $39,929
 $(8,687,355) $
Investments in unconsolidated entities $(33,993) $(225,568) $
Deposits – restricted $
 $(528) $
Escrow deposits – mortgage $
 $(37,582) $
Deferred financing costs, net $
 $(25,780) $
Other assets $(2,586) $(215,622) $
Mortgage notes payable $
 $3,076,876
 $
Accounts payable and accrued expenses $(146) $16,984
 $
Accrued interest payable $
 $11,305
 $
Other liabilities $(3,204) $117,299
 $
Security deposits $
 $10,965
 $
Issuance of OP Units $
 $1,929,868
 $
Noncontrolling Interests – Partially Owned Properties $
 $28,263
 $
Interest capitalized for real estate and unconsolidated entities under development:      
Investment in real estate, net $(52,717) $(45,533) $(21,661)
Investments in unconsolidated entities $(65) $(1,788) $(848)
Investments in unconsolidated entities:      
Investments in unconsolidated entities $(6,318) $(13,656) $(5,291)
Other liabilities $(9,450) $(52,815) $
Consolidation of previously unconsolidated properties:      
Investment in real estate, net $(64,319) $
 $
Investments in unconsolidated entities $(847) $
 $
Accounts payable and accrued expenses $1,987
 $
 $
Other liabilities $18,383
 $
 $

See accompanying notes
F-20




ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Amounts in thousands)
  Year Ended December 31,
  2014 2013 2012
SUPPLEMENTAL INFORMATION (continued):      
(Payments on) settlement of derivative instruments:      
Other assets $6,623
 $(50) $
Other liabilities $(7,381) $(44,013) $
Other:      
Receivable on sale of OP Units $
 $
 $28,457
Foreign currency translation adjustments $552
 $(613) $


See accompanying notes
F-21




ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
(Amounts in thousands)
  Year Ended December 31,
PARTNERS' CAPITAL 2014 2013 2012
       
PREFERENCE UNITS  
  
  
Balance, beginning of year $50,000
 $50,000
 $200,000
Redemption of 6.48% Series N Cumulative Redeemable 
 
 (150,000)
Balance, end of year $50,000
 $50,000
 $50,000
       
GENERAL PARTNER  
  
  
Balance, beginning of year $10,612,363
 $7,432,961
 $5,665,733
OP Unit Issuance:  
  
  
Conversion of OP Units held by Limited Partners into OP Units held by
General Partner
 2,365
 1,699
 18,929
Issuance of OP Units 
 1,929,868
 1,388,583
Exercise of EQR share options 82,573
 17,252
 49,039
EQR's Employee Share Purchase Plan (ESPP) 3,392
 3,401
 5,399
Share-based employee compensation expense:  
  
  
EQR restricted shares 9,904
 13,264
 8,936
EQR share options 7,349
 10,514
 11,752
EQR ESPP discount 859
 632
 965
OP Units repurchased and retired (1,777) 
 
Offering costs (41) (1,047) (39,359)
Premium on redemption of Preference Units – original issuance costs 
 
 5,129
Net income available to Units – General Partner 627,163
 1,826,468
 826,212
OP Units – General Partner distributions (723,782) (666,565) (554,429)
Supplemental Executive Retirement Plan (SERP) 7,374
 (422) 282
Acquisition of Noncontrolling Interests – Partially Owned Properties (2,308) 
 1,293
Change in market value of Redeemable Limited Partners (139,818) 79,667
 38,734
Adjustment for Limited Partners ownership in Operating Partnership 4,992
 (35,329) 5,763
Balance, end of year $10,490,608
 $10,612,363
 $7,432,961
       
LIMITED PARTNERS      
Balance, beginning of year $211,412
 $159,606
 $119,536
Issuance of OP Units to Limited Partners 
 
 66,606
Issuance of restricted units to Limited Partners 3
 5
 5
Conversion of OP Units held by Limited Partners into OP Units held by
General Partner
 (2,365) (1,699) (18,929)
Equity compensation associated with Units – Limited Partners 11,969
 13,609
 5,307
Net income available to Units – Limited Partners 24,831
 75,278
 38,641
Units – Limited Partners distributions (28,676) (26,277) (25,095)
Change in carrying value of Redeemable Limited Partners 2,229
 (44,439) (20,702)
Adjustment for Limited Partners ownership in Operating Partnership (4,992) 35,329
 (5,763)
Balance, end of year $214,411
 $211,412
 $159,606

See accompanying notes
F-22




ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (Continued)
(Amounts in thousands)
  Year Ended December 31,
PARTNERS' CAPITAL (continued) 2014 2013 2012
       
ACCUMULATED OTHER COMPREHENSIVE (LOSS)  
  
  
Balance, beginning of year $(155,162) $(193,148) $(196,718)
Accumulated other comprehensive (loss) income – derivative instruments:  
  
  
Unrealized holding (losses) gains arising during the year (33,306) 18,771
 (11,772)
Losses reclassified into earnings from other comprehensive income 16,868
 20,141
 14,678
Accumulated other comprehensive income (loss) – other instruments:  
  
  
Unrealized holding gains arising during the year 
 583
 664
(Gains) realized during the year 
 (2,122) 
Accumulated other comprehensive (loss) income – foreign currency:      
Currency translation adjustments arising during the year (552) 613
 
Balance, end of year $(172,152) $(155,162) $(193,148)
       
NONCONTROLLING INTERESTS  
  
  
       
NONCONTROLLING INTERESTS – PARTIALLY OWNED PROPERTIES  
  
  
Balance, beginning of year $126,583
 $77,688
 $74,306
Net income (loss) attributable to Noncontrolling Interests 2,544
 (538) 844
Contributions by Noncontrolling Interests 5,684
 27,660
 8,221
Distributions to Noncontrolling Interests (7,827) (6,490) (5,131)
Acquisition of Archstone 
 28,263
 
Acquisition of Noncontrolling Interests – Partially Owned Properties (2,244) 
 (1,306)
Other 169
 
 754
Balance, end of year $124,909
 $126,583
 $77,688





See accompanying notes
F-23




EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.Business
Equity Residential (“EQR”), a Maryland real estate investment trust (“REIT”) formed in March 1993, is an S&P 500 company focused on the acquisition, development and management of high quality apartment properties in top United States growth markets. 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 has elected to be taxed as a REIT. References to the "Company," "we," "us" or "our" mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the "Operating Partnership" mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP. Unless otherwise indicated, the notes to consolidated financial statements apply to both the Company and the Operating Partnership.
EQR is the general partner of, and as of December 31, 2014 owned an approximate 96.2% ownership interest in, ERPOP. All of the Company's property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR issues public equity from time to time but does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company's ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity.
As of December 31, 2014, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 391 properties located in 12 states and the District of Columbia consisting of 109,225 apartment units. The ownership breakdown includes (table does not include various uncompleted development properties):
  Properties Apartment Units
Wholly Owned Properties 364
 98,287
Master-Leased Properties – Consolidated 3
 853
Partially Owned Properties – Consolidated 19
 3,771
Partially Owned Properties – Unconsolidated 3
 1,281
Military Housing 2
 5,033
  391
 109,225
The “Wholly Owned Properties” are accounted for under the consolidation method of accounting. The "Master-Leased Properties – Consolidated" are wholly owned by the Company but the entire project is leased to a third party corporate housing provider. These properties are consolidated and reflected as real estate assets while the master leases are accounted for as operating leases. The “Partially Owned Properties – Consolidated” are controlled by the Company but have partners with noncontrolling interests and are accounted for under the consolidation method of accounting. The “Partially Owned Properties – Unconsolidated” are controlled by the Company's partners but the Company has noncontrolling interests and are accounted for under the equity method of accounting. The “Military Housing” properties consist of investments in limited liability companies that, as a result of the terms of the operating agreements, are accounted for as management contract rights with all fees recognized as fee and asset management revenue.

The Company maintains long-term ground leases for 13 operating properties and one of its wholly owned development properties and land parcels. The Company owns the building and improvements and leases the land underlying the improvements under long-term ground leases. The leases expire beginning in 2026 and running through 2110. These properties are consolidated and reflected as real estate assets while the ground leases are accounted for as operating leases.

2.Summary of Significant Accounting Policies
Basis of Presentation
Due to the Company’s ability as general partner to control either through ownership or by contract the Operating Partnership and its subsidiaries, the Operating Partnership and each such subsidiary has been consolidated with the Company for financial reporting purposes, except for three unconsolidated operating properties and our military housing properties.

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Real Estate Assets and Depreciation of Investment in Real Estate
An acquiring entity is required to recognize all assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. In addition, an acquiring entity is required to expense acquisition-related costs as incurred, value noncontrolling interests at fair value at the acquisition date and expense restructuring costs associated with an acquired business.

The Company allocates the purchase price of properties to net tangible and identified intangible assets acquired based on their fair values. In making estimates of fair values for purposes of allocating purchase price, the Company 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 Company 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/liabilities acquired. The Company allocates the purchase price of acquired real estate to various components as follows:

Land – Based on actual purchase price adjusted to fair value (as necessary) if acquired separately or market research/comparables if acquired with an operating property.
Furniture, Fixtures and Equipment – Ranges between $3,000 and $13,000 per apartment unit acquired as an estimate of the fair value of the appliances and fixtures inside an apartment unit. The per-apartment 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 to ten years.
Lease Intangibles – The Company considers the value of acquired in-place leases and above/below market leases and the amortization period is the average remaining term of each respective acquired lease. In-place residential leases' average term at acquisition approximates six months. See Note 4 for more information on above and below market leases.
Other Intangible Assets – The Company considers whether it has acquired other intangible assets, including any customer relationship intangibles and 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.
Site Improvements – Based on replacement cost, which approximates fair value. Depreciation is calculated on the straight-line method over an estimated useful life of eight years.
Long-Term Debt – The Company calculates the fair value by discounting the remaining contractual cash flows on each instrument at the current market rate for those borrowings.
Replacements inside an apartment unit such as appliances and carpeting are depreciated over an estimated useful life of fiveto sell, is less thanten years. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred and significant renovations and improvements that improve and/or extend the carrying amountuseful life of the asset measured atare capitalized over their estimated useful life, generally five to fifteen years. Initial direct leasing costs are expensed as incurred as such expense approximates the time thatdeferral and amortization of initial direct leasing costs over the Companylease terms. Property sales or dispositions are recorded when title transfers to unrelated third parties, contingencies have been removed and sufficient cash consideration has determined it will sellbeen received by the asset. Long-lived assets held forCompany. Upon disposition, and the related liabilitiescosts and accumulated depreciation are separately reported,removed from the respective accounts. Any gain or loss on sale is recognized in accordance with accounting principles generally accepted in the long-livedUnited States.
The Company classifies real estate assets reported at the lower of their carrying amounts or their estimated fair values, less their costs to sell, and are not depreciated after reclassification toas real estate held for disposition.disposition when it is certain a property will be disposed of (see further discussion below).
The Company classifies properties under development and/or expansion and properties in the lease-up phase (including land) as construction-in-progress until construction has been completed and all certificates of occupancy permits have been obtained.

Impairment of Long-Lived Assets

The Company periodically evaluates its long-lived assets, including its investments in real estate, for indicators of impairment. The judgments regarding the existence of impairment indicators are based on factors such as operational performance, market conditions and legal and environmental concerns, as well as the Company’s ability to hold and its intent with regard to each asset. Future events could occur which would cause the Company to conclude that impairment indicators exist and an impairment loss is warranted. If impairment indicators exist, the Company performs the following:



F-25



For long-lived assets to be held and used, the Company 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, the Company would record an impairment loss 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 Company has determined it will sell the asset. Long-lived assets held for disposition and the related liabilities are separately reported, with the long-lived assets 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.
Cost Capitalization
See the Real Estate Assets and Depreciation of Investment in Real Estate section for a discussion of the Company’s policy with respect to capitalization vs. expensing of fixed asset/repair and maintenance costs. In addition, the Company capitalizes an allocation of the payroll and associated costs of employees directly responsible for and who spend their time on the execution and supervision of major capital and/or renovation projects. These costs are reflected on the balance sheetsheets as an increaseincreases to depreciable property.
For all development projects, the Company uses its professional judgment in determining whether such costs meet the criteria for capitalization or must be expensed as incurred. The Company capitalizes interest, real estate taxes and insurance and payroll and associated costs for those individuals directly responsible for and who spend their time on development activities, with capitalization ceasing no later than 90 days following issuance of the certificate of occupancy. These costs are reflected on the balance sheetsheets as construction-in-progress for each specific property. The Company expenses as incurred all payroll costs of on-site employees working directly at our properties, except as noted above on our development properties prior to certificate of occupancy issuance and on specific major renovations at selected properties when additional incremental employees are hired.
During the years ended December 31, 2012, 20112014, 2013 and 2010,2012, the Company capitalized $14.3$22.4 million,, $11.6 $16.5 million and $10.7$14.3 million,, respectively, of payroll and associated costs of employees directly responsible for and who spend their time on the execution and supervision of development activities as well as major capital and/or renovation projects.
Cash and Cash Equivalents
The Company 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 Company maintains its cash and cash equivalents at financial institutions. The combined account balances at one or more institutions typically 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 Company believes that the risk is not significant, as the Company does not anticipate the financial institutions’ non-performance.
Investment Securities
Investment securities are included in other assets in the consolidated balance sheets. These securities are classified as held-to-maturity and carried at amortized cost if management has the positive intent and ability to hold the securities to maturity. Otherwise, the securities are classified as available-for-sale and carried at estimated fair value with unrealized gains and losses included in accumulated other comprehensive (loss), a separate component of shareholders’ equity/partners' capital. As of December 31, 2014 and 2013, the Company did not hold any investment securities.
Deferred Financing Costs
Deferred financing costs include fees and costs incurred to obtain the Company’s lines of credit and long-term financings. 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 $32.237.7 million and $37.733.4 million at December 31, 20122014 and 20112013, respectively.
Fair Value of Financial Instruments, Including Derivative Instruments
The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, 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 Company bases its estimates on

F-26



current instruments with similar terms and maturities or on other factors relevant to the financial instruments.
In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company seeks to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments. The Company may also use derivatives to manage its exposure to foreign exchange rates (should the Archstone transaction close) or manage commodity prices in the daily operations of the business.

F-24


The Company 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 Company has not sustained a material loss from these instruments nor does it anticipate any material adverse effect on its net income or financial position in the future from the use of derivatives.derivatives it currently has in place.
The Company recognizes all derivatives as either assets or liabilities in the consolidated balance sheets and measures those instruments at fair value. In addition, fair value adjustments will affect either shareholders’ equity/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 is marked-to-market each period. The Company does not use derivatives for trading or speculative purposes.

Revenue Recognition
Rental income attributable to residential leases is recorded on a straight-line basis, which is not materially different than if it were recorded when due from residents and recognized monthly as it was earned. 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. Retail/commercial leases generally have five to ten year lease terms with market based renewal options. Fee and asset management revenue and interest income are recorded on an accrual basis.
Share-Based Compensation
The Company expenses share-based compensation such as restricted shares, restricted units and share options. Any common share of beneficial interest, $0.01 par value per share (the "Common Shares") issued pursuant to EQR's incentive equity compensation and employee share purchase plans will result in ERPOP issuing units of limited partnership interest ("OP Units") to EQR on a one-for-one basis, with ERPOP receiving the net cash proceeds of such issuances.
The fair value of the option grants are recognized over the requisite service/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 primary grant in each year having the following weighted average assumptions:

    
 2012 2011 2010 2014 2013 2012
Expected volatility (1) 27.4% 27.1% 32.4% 27.0% 26.9% 27.4%
Expected life (2) 5 years 5 years 5 years 5 years 5 years 5 years
Expected dividend yield (3) 4.35% 4.56% 4.85% 3.78% 4.12% 4.35%
Risk-free interest rate (4) 0.71% 2.27% 2.29% 1.50% 0.84% 0.71%
Option valuation per share $8.54 $8.36 $6.18 $9.12 $7.90 $8.54

(1)Expected volatility – For 2012 and 2011, estimatedEstimated based on the historical ten-year volatility of EQR’s share price measured on a monthly basis. Prior to 2011, estimated based on the historical volatility of EQR's share price, on a monthly basis, for a period matching the expected life of each grant. This change in estimate reflects the Company's belief that the historical ten-year period provides a better estimate of the expected volatility in EQR shares over the expected life of the options.
(2)Expected life – Approximates the actual weighted average life of all share options granted since the Company went public in 1993.
(3)Expected dividend yield – Calculated by averaging the historical annual yield on EQR shares for a period matching the expected life of each grant, with the annual yield calculated by dividing actual dividends by the average price of EQR’s shares in a given year.
(4)Risk-free interest rate – The most current U.S. Treasury rate available prior to the grant date for a period matching the expected life of each grant.
The valuation method and assumptions are the same as those the Company used in accounting for option expense in its consolidated financial statements. 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. This model is only one method of valuing options. 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, the actual value of the options to the recipient may be significantly different.

F-27



Income and Other Taxes
Due to the structure of EQR as a REIT and the nature of the operations of its operating properties, no provision for federal income taxes has been made at the EQR level. In addition, ERPOP generally is not liable for federal income taxes as the partners

F-25


recognize their proportionate share of income or loss in their tax returns; therefore no provision for federal income taxes has been made at the ERPOP level. Historically, the Company has generally only incurred certain state and local income, excise and franchise taxes. The Company has elected Taxable REIT Subsidiary (“TRS”) status for certain of its corporate subsidiaries and as a result, these entities will incur both federal and state income taxes on any taxable income of such entities after consideration of any net operating losses.
Deferred tax assets and liabilities applicable to the TRS are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates for which the temporary differences are expected to be recovered or settled. The effects of changes in tax rates on deferred tax assets and liabilities are recognized in earnings in the period enacted. The Company’s deferred tax assets are generally the result of tax affected amortization of goodwill,suspended interest deductions, net operating losses, differing depreciable lives on capitalized assets and the timing of expense recognition for certain accrued liabilities. As of December 31, 20122014, the Company has recorded a deferred tax asset of approximately $36.146.7 million, which is fully offset by a valuation allowance due to the uncertainty in forecasting future TRS taxable income.
The Company provided for income, franchise and excise taxes allocated as follows in the consolidated statements of operations and comprehensive income for the years ended December 31, 20122014, 20112013 and 20102012 (amounts in thousands):

    
 Year Ended December 31, Year Ended December 31,
 2012 2011 2010 2014 2013 2012
Income and other tax expense (benefit) (1) $539
 $728
 $291
 $1,394
 $1,169
 $514
Discontinued operations, net (2) 9
 (243) 87
 8
 449
 34
Provision for income, franchise and excise taxes (3) $548
 $485
 $378
 $1,402
 $1,618
 $548

(1)Primarily includes state and local income, excise and franchise taxes.
(2)Primarily represents federal income taxes (recovered) on the gains on sales of condominium units owned by a TRS and included in discontinued operations. Also represents state and local income, excise and franchise taxes on operating properties sold prior to January 1, 2014 and included in discontinued operations. The amounts included in discontinued operations for the year ending December 31, 2014 represent trailing activity for properties sold in 2013 and prior years. None of the properties sold during the year ended December 31, 2014 met the new criteria for reporting discontinued operations.
(3)All provisions for income tax amounts are current and none are deferred.
The Company’s TRSs have approximately $76.4$35.1 million of NOLnet operating loss ("NOL") carryforwards available as of January 1, 20132015 that will expire between 20282029 and 20312032.
During the years ended December 31, 20122014, 20112013 and 20102012, the Company’s tax treatment of dividends and distributions were as follows:

    

 Year Ended December 31, Year Ended December 31,
 2012 2011 2010 2014 2013 2012
Tax treatment of dividends and distributions:  
  
  
  
  
  
Ordinary dividends $1.375
 $0.667
 $0.607
 $1.475
 $0.662
 $1.375
Qualified dividends 0.088
 0.050
 
Long-term capital gain 0.253
 0.629
 0.622
 0.280
 0.870
 0.253
Unrecaptured section 1250 gain 0.152
 0.284
 0.241
 0.157
 0.268
 0.152
Dividends and distributions declared per  
  
  
  
  
  
Common Share/Unit outstanding $1.780
 $1.580
 $1.470
 $2.000
 $1.850
 $1.780

The cost of land and depreciable property, net of accumulated depreciation, for federal income tax purposes as of December 31, 20122014 and 20112013 was approximately $11.2$16.7 billion and $11.415.2 billion, respectively.


F-28



Noncontrolling Interests
A noncontrolling interest in a subsidiary (minority interest) is in most cases an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements and separate from the parent company's equity. In addition, consolidated net income is required to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest and the amount of consolidated net income attributable to the parent and the noncontrolling interest are required to be disclosed on the face of the Consolidated Statementsconsolidated statements of Operations.operations and comprehensive income. See Note 3 for further discussion.
Operating Partnership: Net income is allocated to noncontrolling interests based on their respective ownership percentage

F-26


of the Operating Partnership. The ownership percentage is calculated by dividing the number of OP Units held by the noncontrolling interests by the total OP Units held by the noncontrolling interests and EQR. Issuance of additional Common Shares and OP Units changes the ownership interests of both the noncontrolling interests and EQR. Such transactions and the related proceeds are treated as capital transactions.
Partially Owned Properties: The Company reflects noncontrolling interests in partially owned properties on the balance sheet for the portion of properties consolidated by the Company that are not wholly owned by the Company. The earnings or losses from those properties attributable to the noncontrolling interests are reflected as noncontrolling interests in partially owned properties in the consolidated statements of operations.operations and comprehensive income.
Partners' Capital
The "Limited Partners" of ERPOP include various individuals and entities that contributed their properties to ERPOP in exchange for OP Units. The "General Partner" of ERPOP is EQR. Net income is allocated to the Limited Partners based on their 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 Common Shares and OP Units changes the ownership interests of both the Limited Partners and EQR. Such transactions and the related proceeds are treated as capital transactions.
Redeemable Noncontrolling Interests – Operating Partnership / Redeemable Limited Partners
The Company classifies Redeemable Noncontrolling Interests – Operating Partnership / Redeemable Limited Partners in the mezzanine section of the consolidated balance sheets for the portion of OP Units that EQR is required, either by contract or securities law, to deliver registered Common Shares to the exchanging OP Unit holder. The redeemable noncontrolling interest units / redeemable limited partner units are adjusted to the greater of carrying value or fair market value based on the Common Share price of EQR at the end of each respective reporting period. See Note 3 for further discussion.
Use of Estimates
In preparation of the Company’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 equity/capital.
Other

The Company is the controlling partner in various consolidated partnerships owning 19 properties and 3,4753,771 apartment units and various completed and uncompleted development properties having a noncontrolling interest book value of $77.7$124.9 million at December 31, 20122014. The Company is required to make certain disclosures regarding noncontrolling interests in consolidated limited-life subsidiaries. Of the consolidated entities described above, the Company is the controlling partner in limited-life partnerships owning six properties having a noncontrolling interest deficit balance of $7.4 million.$10.9 million. These six partnership agreements contain provisions that require the partnerships to be liquidated through the sale of their assets upon reaching a date specified in each respective partnership agreement. The Company, as controlling partner, has an obligation to

F-29



cause the property owning partnerships to distribute the proceeds of liquidation to the Noncontrolling Interests in these Partially Owned Properties only to the extent that the net proceeds received by the partnerships from the sale of their assets warrant a distribution based on the partnership agreements. As of December 31, 20122014, the Company estimates the value of Noncontrolling Interest distributions for these six properties would have been approximately $34.2$62.9 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 six 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, 20122014 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 Noncontrolling Interests in the Company's Partially Owned Properties is subject to change. To the extent that the partnerships' underlying assets are worth less than the underlying liabilities, the Company has no obligation to remit any consideration to the Noncontrolling Interests in these

F-27


Partially Owned Properties.
Effective January 1, 2010, in an effort to improve financial standards for transfers of financial assets, more stringent conditions for reporting a transfer of a portion of a financial asset as a sale (e.g. loan participations) are required, the concept of a “qualifying special-purpose entity” and special guidance for guaranteed mortgage securitizations are eliminated, other sale-accounting criteria is clarified and the initial measurement of a transferor’s interest in transferred financial assets is changed. This does not have a material effect on the Company’s consolidated results of operations or financial position.
Effective January 1, 2010, the analysis for identifying the primary beneficiary of a Variable Interest Entity (“VIE”) has been simplified by replacing the previous quantitative-based analysis with a framework that is based more on qualitative judgments. The analysis requires the primary beneficiary of a VIE to be identified as the party that both (a) has the power to direct the activities of a VIE that most significantly impact its economic performance and (b) has an obligation to absorb losses or a right to receive benefits that could potentially be significant to the VIE. For the Company, these requirements affected only disclosures and had no impact on the Company’s consolidated results of operations or financial position. See Note 6 for further discussion.
Effective January 1, 2011, companies are required to separately disclose purchases, sales, issuances and settlements on a gross basis in the reconciliation of recurring Level 3 fair value measurements. This does not have a material effect on the Company’s consolidated results of operations or financial position. See Note 9 for further discussion.

Effective January 1, 2012, companies are required to separately disclose the amounts and reasons for any transfers of assets and liabilities into and out of Level 1 and Level 2 of the fair value hierarchy. For fair value measurements using significant unobservable inputs (Level 3), companies are required to disclose quantitative information about the significant unobservable inputs used for all Level 3 measurements and a description of the Company's valuation processes in determining fair value. In addition, companies are required to provide a qualitative discussion about the sensitivity of recurring Level 3 measurements to changes in the unobservable inputs disclosed, including the interrelationship between inputs. Companies are also required to disclose information about when the current use of a non-financial asset measured at fair value differs from its highest and best use and the hierarchy classification for items whose fair value is not recorded on the balance sheet but is disclosed in the notes. This does not have a material effect on the Company's consolidated results of operations or financial position. See NoteNotes 4 and 9 for further discussion.

Effective January 1, 2013, companies are required to report, in one place, information about reclassifications out of accumulated other comprehensive income ("AOCI"). Companies willare also be required to report changes in AOCI balances. For significant items reclassified out of AOCI to net income in their entirety in the same reporting period, reporting is required about the effect of the reclassifications on the respective line items in the statement where net income is presented. For items that are not reclassified to net income in their entirety in the same reporting period, a cross reference to other disclosures currently required under US GAAP is required in the notes. This does not have a material effect on the Company's consolidated results of operations or financial position. See Note 9 for further discussion.

In April 2014, the Financial Accounting Standards Board (the "FASB") issued new guidance for reporting discontinued operations. Only disposals representing a strategic shift in operations that has a major effect on a company’s operations and financial results will be presented as discontinued operations. Companies will be required to expand their disclosures about discontinued operations to provide more information on the assets, liabilities, income and expenses of the discontinued operations. Companies will also be required to disclose the pre-tax income attributable to a disposal of a significant part of a company that does not qualify for discontinued operations reporting. Application of this guidance is prospective from the date of adoption and early adoption is permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued. The new standard is effective January 1, 2015, but the Company early adopted it as allowed effective January 1, 2014. Adoption of this standard resulted in and will likely continue to result in substantially fewer of the Company's dispositions meeting the discontinued operations qualifications. See Note 11 for further discussion.
In May 2014, the FASB issued a comprehensive new revenue recognition standard entitled Revenue from Contracts with Customers that will supersede nearly all existing revenue recognition guidance. The new standard specifically excludes lease contracts. The new standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Companies will likely need to use more judgment and make more estimates than under current revenue recognition guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration, if any, to include in the transaction price and allocating the transaction price to each separate performance obligation. The new standard will be effective for the Company beginning on January 1, 2017 and early adoption is not permitted. The new standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company has not yet selected a transition method and is currently evaluating the impact of adopting the new standard on its consolidated results of operations and financial position.

In August 2014, the FASB issued a new standard that will explicitly require management to assess an entity's ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. In connection with each annual and interim period, management will assess whether there is substantial doubt about an entity's ability to continue as a going concern within one year after the issuance date. Disclosures will be required if conditions give rise to substantial doubt, however to determine the specific disclosures, management will need to assess whether its plans will alleviate substantial doubt. The new

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standard is effective for the annual period ending after December 15, 2016. The Company does not expect that this will have a material effect on its consolidated results of operations or financial position.

EffectiveIn February 2015, the FASB issued new consolidation guidance which makes changes to both the variable interest model and the voting model. Among other changes, the new standard specifically eliminates the presumption in the current voting model that a general partner controls a limited partnership or similar entity unless that presumption can be overcome. Generally, only a single limited partner that is able to exercise substantive kick-out rights will consolidate. The new standard will be effective for the Company beginning on January 1, 2009, issuers of certain convertible debt instruments that may2016 and early adoption is permitted, including adoption in an interim period. The new standard must be settled in cash on conversion were requiredapplied using a modified retrospective approach by recording a cumulative-effect adjustment to separately account for the liability and equity components of the instrument in a manner that reflects each issuer's nonconvertible debt borrowing rate. As the Company was required to apply this retrospectively, the accounting for its $650.0 million3.85% convertible unsecured notes that were issued in August 2006 with a final maturity in August 2026 was affected. On August 18, 2011, the Company redeemed these notes at par ($482.5 million was outstanding on August 18, 2011) and no premium was paid. The Company recognized $11.8 million and $18.6 million in interest expense related to the stated coupon rate of 3.85% for the years ended December 31, 2011 and 2010, respectively. The amount of the conversion optionequity/capital as of the date of issuance calculated by the Company using a 5.80% effective interest rate was $44.3 million and was amortized to interest expense over the expected lifebeginning of the convertible notes (throughperiod of adoption or retrospectively to each period presented. The Company has not yet selected a transition method and is currently evaluating the first put dateimpact of adopting the new standard on August 18, 2011). Total amortizationits consolidated results of the cash discountoperations and conversion option discount on the unsecured notes resulted in a reduction to earnings of approximately $5.0 million and $7.8 million, respectively, or $0.02 per share/Unit and $0.03 per share/Unit, respectively, for the years ended December 31, 2011 and 2010. In addition, the Company decreased the January 1, 2009 balance of retained earnings (included in general partner's capital in the Operating Partnership's financial statements) by $27.0 million, decreased the January 1, 2009 balance of notes by $17.3 million and increased the January 1, 2009 balance of paid in capital (included in general partner's capital in the Operating Partnership's financial statements) by $44.3 million. The carrying amount of the conversion option remaining in paid in capital (included in general partner's capital in the Operating Partnership's financial statements) was $44.3 million at December 31, 2011. The cash and conversion option discounts were fully amortized at December 31, 2011.position.






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3.Equity, Capital and Other Interests

Equity and Redeemable Noncontrolling Interests of Equity Residential
The following tables present the changes in the Company’s issued and outstanding Common Shares and “Units” (which includes OP Units and restricted units (formerly known as Long-Term Incentive Plan (“LTIP”("LTIP") Units)) for the years ended December 31, 20122014, 20112013 and 20102012:

    
 2012 2011 2010 2014 2013 2012
Common Shares  
  
  
  
  
  
Common Shares outstanding at January 1, 297,508,185
 290,197,242
 279,959,048
 360,479,260
 325,054,654
 297,508,185
Common Shares Issued:  
  
  
  
  
  
Conversion of Series E Preferred Shares 
 
 328,363
Conversion of Series H Preferred Shares 
 
 32,516
Conversion of OP Units 675,817
 341,594
 884,472
 94,671
 67,939
 675,817
Issuance of Common Shares 25,023,919
 3,866,666
 6,151,198
 
 34,468,085
 25,023,919
Exercise of share options 1,608,427
 2,945,948
 2,506,645
 2,086,380
 586,017
 1,608,427
Employee Share Purchase Plan (ESPP) 110,054
 113,107
 157,363
 68,807
 73,468
 110,054
Restricted share grants, net 128,252
 145,616
 235,767
 169,722
 229,097
 128,252
Common Shares Other:  
  
  
  
  
  
Conversion of restricted shares to LTIP Units 
 (101,988) 
Conversion of restricted shares to restricted units (12,146) 
 
Repurchased and retired 
 
 (58,130) (31,240) 
 
Common Shares outstanding at December 31, 325,054,654
 297,508,185
 290,197,242
 362,855,454
 360,479,260
 325,054,654
Units  
  
  
  
  
  
Units outstanding at January 1, 13,492,543
 13,612,037
 14,197,969
 14,180,376
 13,968,758
 13,492,543
LTIP Units, net 70,235
 120,112
 92,892
OP Units issued through acquisitions/consolidations 1,081,797
 
 205,648
Conversion of restricted shares to LTIP Units 
 101,988
 
Restricted units, net 200,840
 279,557
 70,235
OP Units issued through acquisitions 
 
 1,081,797
Conversion of restricted shares to restricted units 12,146
 
 
Conversion of OP Units to Common Shares (675,817) (341,594) (884,472) (94,671) (67,939) (675,817)
Units outstanding at December 31, 13,968,758
 13,492,543
 13,612,037
 14,298,691
 14,180,376
 13,968,758
Total Common Shares and Units outstanding at December 31, 339,023,412
 311,000,728
 303,809,279
 377,154,145
 374,659,636
 339,023,412
Units Ownership Interest in Operating Partnership 4.1% 4.3% 4.5% 3.8% 3.8% 4.1%
OP Units Issued:  
  
  
  
  
  
Acquisitions/consolidations – per unit 
$61.57
 
 $40.09
Acquisitions/consolidations – valuation $66.6 million
 
 $8.2 million
Acquisitions – per unit 
 
 $61.57
Acquisitions – valuation 
 
 $66.6 million

The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units, as well as the equity positions of the holders of LTIP Units,restricted units, are collectively referred to as the “Noncontrolling Interests – Operating Partnership”. Subject to certain exceptions (including the “book-up” requirements of LTIP Units)restricted units), the Noncontrolling Interests – Operating Partnership may exchange their Units with EQR for Common Shares on a one-for-one basis. The carrying value of the Noncontrolling Interests – Operating Partnership (including redeemable interests) is allocated based on the number of Noncontrolling Interests – Operating Partnership Units in total in proportion to the number

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of Noncontrolling Interests – Operating Partnership Units in total plus the number of Common Shares. Net income is allocated to the Noncontrolling Interests – Operating Partnership based on the weighted average ownership percentage during the period.
The Operating Partnership has the right but not the obligation to make a cash payment instead of issuing Common Shares to any and all holders of Noncontrolling Interests – Operating Partnership Units requesting an exchange of their OP Units with EQR. Once the Operating Partnership elects not to redeem the Noncontrolling Interests – Operating Partnership Units for cash, EQR is obligated to deliver Common Shares to the exchanging holder of the Noncontrolling Interests – Operating Partnership Units.
The Noncontrolling Interests – Operating Partnership Units are classified as either mezzanine equity or permanent equity. If EQR is required, either by contract or securities law, to deliver registered Common Shares, such Noncontrolling Interests – Operating Partnership are differentiated and referred to as “Redeemable Noncontrolling Interests – Operating Partnership”. Instruments that require settlement in registered shares can not be classified in permanent equity as it is not always completely

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within an issuer’s control to deliver registered shares. Therefore, settlement in cash is assumed and that responsibility for settlement in cash is deemed to fall to the Operating Partnership as the primary source of cash for EQR, resulting in presentation in the mezzanine section of the balance sheet. The Redeemable Noncontrolling Interests – Operating Partnership are adjusted to the greater of carrying value or fair market value based on the Common Share price of EQR at the end of each respective reporting period. EQR has the ability to deliver unregistered Common Shares for the remaining portion of the Noncontrolling Interests – Operating Partnership Units that are classified in permanent equity at December 31, 20122014 and 2011.2013.
The carrying value of the Redeemable Noncontrolling Interests – Operating Partnership is allocated based on the number of Redeemable Noncontrolling Interests – Operating Partnership Units in proportion to the number of Noncontrolling Interests – Operating Partnership Units in total. Such percentage of the total carrying value of Units which is ascribed to the Redeemable Noncontrolling Interests – Operating Partnership is then adjusted to the greater of carrying value or fair market value as described above. As of December 31, 20122014, the Redeemable Noncontrolling Interests – Operating Partnership have a redemption value of approximately $398.4$500.7 million,, which represents the value of Common Shares that would be issued in exchange with the Redeemable Noncontrolling Interests – Operating Partnership Units.
The following table presents the changes in the redemption value of the Redeemable Noncontrolling Interests – Operating Partnership for the years ended December 31, 20122014, 20112013 and 20102012, respectively (amounts in thousands):

        
 2012 2011 2010 2014 2013 2012
Balance at January 1, $416,404
 $383,540
 $258,280
 $363,144
 $398,372
 $416,404
Change in market value (38,734) 22,714
 129,918
 139,818
 (79,667) (38,734)
Change in carrying value 20,702
 10,150
 (4,658) (2,229) 44,439
 20,702
Balance at December 31, $398,372
 $416,404
 $383,540
 $500,733
 $363,144
 $398,372
Net proceeds from EQR Common Share and Preferred Share (see definition below) offerings are contributed by EQR to ERPOP. 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). As a result, the net offering proceeds from Common Shares and Preferred Shares are allocated between shareholders’ equity and Noncontrolling Interests – Operating Partnership to account for the change in their respective percentage ownership of the underlying equity of ERPOP.
The Company’s declaration of trust authorizes it to issue up to 100,000,000 preferred shares of beneficial interest, $0.01$0.01 par value per share (the “Preferred Shares”), with specific rights, preferences and other attributes as the Board of Trustees may determine, which may include preferences, powers and rights that are senior to the rights of holders of the Company’s Common Shares.
The following table presents the Company’s issued and outstanding Preferred Shares as of December 31, 20122014 and 20112013:

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      Amounts in thousands
  
Redemption
Date (1)
 
Annual
Dividend per
Share (2)
 
December 31,
2012
 
December 31,
2011
Preferred Shares of beneficial interest, $0.01 par value;
  100,000,000 shares authorized
        
8.29% Series K Cumulative Redeemable Preferred; liquidation
  value $50 per share; 1,000,000 shares issued and outstanding
  at December 31, 2012 and December 31, 2011

 12/10/26 
$4.145
 $50,000
 $50,000
6.48% Series N Cumulative Redeemable Preferred; liquidation
  value $250 per share; 0 and 600,000 shares issued and outstanding
  at December 31, 2012 and December 31, 2011, respectively (3) (4)

 06/19/08 
$16.20
 
 150,000
      $50,000
 $200,000
      Amounts in thousands
  Redemption
Date (1)
 Annual
Dividend per
Share (2)
 December 31, 2014 December 31, 2013
Preferred Shares of beneficial interest, $0.01 par value;
100,000,000 shares authorized:
        
8.29% Series K Cumulative Redeemable Preferred; liquidation
value $50 per share; 1,000,000 shares issued and outstanding
at December 31, 2014 and December 31, 2013
 12/10/26 
$4.145
 $50,000
 $50,000
      $50,000
 $50,000

(1)
On or after the redemption date, redeemable preferred shares (Series K and N) may be redeemed for cash at the option of the Company, in whole or in part, at a redemption price equal to the liquidation price per share, plus accrued and unpaid distributions, if any.
(2)
Dividends on all series of Preferred Shares are payable quarterly at various pay dates. The dividend listed for Series N is a Preferred Share rate and the equivalent Depositary Share annual dividend is $1.62 per share.
quarterly.
(3)The Series N Preferred Shares had a corresponding depositary share that consisted of ten times the number of shares and one-tenth the liquidation value and dividend per share.
(4)
On August 20, 2012, the Company redeemed its Series N Cumulative Redeemable Preferred Shares for cash consideration of $150.0 million plus accrued dividends through the redemption date. As a result of this redemption, the Company recorded the write-off of

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approximately $5.1 million in original issuance costs as a premium on the redemption of Preferred Shares.
Capital and Redeemable Limited Partners of ERP Operating Limited Partnership
The following tables present the changes in the Operating Partnership's issued and outstanding Units and in the limited partners' Units for the years ended December 31, 20122014, 20112013 and 20102012:
    
 2012 2011 2010 2014 2013 2012
General and Limited Partner Units  
  
  
  
  
  
General and Limited Partner Units outstanding at January 1, 311,000,728
 303,809,279
 294,157,017
 374,659,636
 339,023,412
 311,000,728
Issued to General Partner: 

 

 

      
Conversion of Series E Preference Units 
 
 328,363
Conversion of Series H Preference Units 
 
 32,516
Issuance of OP Units 25,023,919
 3,866,666
 6,151,198
 
 34,468,085
 25,023,919
Exercise of EQR share options 1,608,427
 2,945,948
 2,506,645
 2,086,380
 586,017
 1,608,427
EQR's Employee Share Purchase Plan (ESPP) 110,054
 113,107
 157,363
 68,807
 73,468
 110,054
EQR's restricted share grants, net 128,252
 145,616
 235,767
 169,722
 229,097
 128,252
Issued to Limited Partners:            
LTIP Units, net 70,235
 120,112
 92,892
OP Units issued through acquisitions/consolidations 1,081,797
 
 205,648
Restricted units, net 200,840
 279,557
 70,235
OP Units issued through acquisitions 
 
 1,081,797
OP Units Other:  
  
  
      
Repurchased and retired 
 
 (58,130) (31,240) 
 
General and Limited Partner Units outstanding at December 31, 339,023,412
 311,000,728
 303,809,279
 377,154,145
 374,659,636
 339,023,412
Limited Partner Units  
  
  
  
  
  
Limited Partner Units outstanding at January 1, 13,492,543
 13,612,037
 14,197,969
 14,180,376
 13,968,758
 13,492,543
Limited Partner LTIP Units, net 70,235
 120,112
 92,892
Limited Partner OP Units issued through acquisitions/consolidations 1,081,797
 
 205,648
Conversion of EQR restricted shares to LTIP Units 
 101,988
 
Limited Partner restricted units, net 200,840
 279,557
 70,235
Limited Partner OP Units issued through acquisitions 
 
 1,081,797
Conversion of EQR restricted shares to restricted units 12,146
 
 
Conversion of Limited Partner OP Units to EQR Common Shares (675,817) (341,594) (884,472) (94,671) (67,939) (675,817)
Limited Partner Units outstanding at December 31, 13,968,758
 13,492,543
 13,612,037
 14,298,691
 14,180,376
 13,968,758
Limited Partner Units Ownership Interest in Operating Partnership 4.1% 4.3% 4.5% 3.8% 3.8% 4.1%
Limited Partner OP Units Issued:  
  
  
  
  
  
Acquisitions/consolidations – per unit 
$61.57
 
 $40.09
Acquisitions/consolidations – valuation $66.6 million
 
 $8.2 million
Acquisitions – per unit 
 
 
$61.57
Acquisitions – valuation 
 
 $66.6 million
The Limited Partners of the Operating Partnership as of December 31, 20122014 include various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units, as well as the equity positions of the holders of LTIP Units.restricted units. Subject to certain exceptions (including the “book-up” requirements of LTIP Units)restricted units), Limited Partners may exchange their Units with EQR for Common Shares on a one-for-one basis. The carrying value of the Limited Partner Units (including redeemable interests) is allocated based on the number of Limited Partner Units in total in proportion to the number of Limited Partner Units in total plus the number of General Partner Units. Net income is allocated to the Limited Partner Units based on the weighted average ownership percentage during the period.

The Operating Partnership has the right but not the obligation to make a cash payment instead of issuing Common Shares to any and all holders of Limited Partner Units requesting an exchange of their OP Units with EQR. Once the Operating Partnership

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elects not to redeem the Limited Partner Units for cash, EQR is obligated to deliver Common Shares to the exchanging limited partner.

The Limited Partner Units are classified as either mezzanine equity or permanent equity. If EQR is required, either by contract or securities law, to deliver registered Common Shares, such Limited Partner Units are differentiated and referred to as “Redeemable Limited Partner Units”. Instruments that require settlement in registered shares can not be classified in permanent equity as it is not always completely within an issuer's control to deliver registered shares. Therefore, settlement in cash is assumed and that responsibility for settlement in cash is deemed to fall to the Operating Partnership as the primary source of cash for EQR, resulting in presentation in the mezzanine section of the balance sheet. The Redeemable Limited Partner Units are adjusted to the greater of carrying value or fair market value based on the Common Share price of EQR at the end of each respective reporting period. EQR has the ability to deliver unregistered Common Shares for the remaining portion of the Limited Partner Units that

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are classified in permanent equity at December 31, 20122014 and 2013.2011.

The carrying value of the Redeemable Limited Partner Units is allocated based on the number of Redeemable Limited Partner Units in proportion to the number of Limited Partner Units in total. Such percentage of the total carrying value of Limited Partner Units which is ascribed to the Redeemable Limited Partner Units is then adjusted to the greater of carrying value or fair market value as described above. As of December 31, 20122014, the Redeemable Limited Partner Units have a redemption value of approximately $398.4$500.7 million,, which represents the value of Common Shares that would be issued in exchange with the Redeemable Limited Partner Units.
The following table presents the changes in the redemption value of the Redeemable Limited Partners for the years ended December 31, 20122014, 20112013 and 20102012, respectively (amounts in thousands):

        
 2012 2011 2010 2014 2013 2012
Balance at January 1, $416,404
 $383,540
 $258,280
 $363,144
 $398,372
 $416,404
Change in market value (38,734) 22,714
 129,918
 139,818
 (79,667) (38,734)
Change in carrying value 20,702
 10,150
 (4,658) (2,229) 44,439
 20,702
Balance at December 31, $398,372
 $416,404
 $383,540
 $500,733
 $363,144
 $398,372
EQR contributes all net proceeds from its various equity offerings (including proceeds from exercise of options for Common Shares) to ERPOP. 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).
The following table presents the Operating Partnership's issued and outstanding “Preference Units” as of December 31, 20122014 and 20112013:
      Amounts in thousands
  
Redemption
Date (1)
 
Annual
Dividend per
Unit (2)
 
December 31,
2012
 
December 31,
2011
Preference Units:    
  
  
8.29% Series K Cumulative Redeemable Preference Units;
  liquidation value $50 per unit; 1,000,000 units issued and
  outstanding at December 31, 2012 and December 31, 2011
 12/10/26 
$4.145
 $50,000
 $50,000
6.48% Series N Cumulative Redeemable Preference Units;
  liquidation value $250 per unit; 0 and 600,000 units issued and
  outstanding at December 31, 2012 and December 31, 2011,
  respectively (3) (4)
 06/19/08 
$16.20
 
 150,000
     
 $50,000
 $200,000
      Amounts in thousands
  Redemption
Date (1)
 Annual
Dividend per
Unit (2)
 December 31, 2014 December 31, 2013
Preference Units:    
  
  
8.29% Series K Cumulative Redeemable Preference Units;
liquidation value $50 per unit; 1,000,000 units issued and
outstanding at December 31, 2014 and December 31, 2013
 12/10/26 
$4.145
 $50,000
 $50,000
     
 $50,000
 $50,000

(1)
On or after the redemption date, redeemable preference units (Series 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 Company Preferred Shares.
(2)
Dividends on all series of Preference Units are payable quarterly at various pay dates. The dividend listed for Series N is a Preference Unit rate and the equivalent depositary unit annual dividend is $1.62 per unit.
(3)The Series N Preference Units had a corresponding depositary unit that consisted of ten times the number of units and one-tenth the liquidation value and dividend per unit.
(4)
On August 20, 2012, the Operating Partnership redeemed its Series N Cumulative Redeemable Preference Units for cash consideration of $150.0 million plus accrued dividends through the redemption date, in conjunction with the concurrent redemption of the corresponding Company Preferred Shares. As a result of this redemption, the Operating Partnership recorded the write-off of approximately $5.1 million in original issuance costs as a premium on the redemption of Preference Units.
quarterly.
Other
An unlimited amountEQR and ERPOP currently have an active universal shelf registration statement for the issuance of equity and debt securities remains available for issuance by EQR and ERPOP under a universal shelf registration statement that automatically became effective upon filing with the SEC in October 2010on July 30, 2013 and expires on October 15, 2013. AsJuly 30, 2016. In July 2013, the Board of December 31, 2012, issuancesTrustees also approved an increase to the amount of shares which may be offered under the ATM (see definition below) share offering program are limited to 6.013.0 million additional shares. Common Shares and extended the program maturity to July 2016. Per the terms of ERPOP's

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partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of ERPOP in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis) or preference

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units (on a one-for-one preferred share per preference unit basis).

On February 27, 2013, the Company issued 34,468,085 Common Shares to an affiliate of Lehman Brothers Holdings Inc. as partial consideration for the portion of the Archstone Portfolio acquired by the Company (as discussed in Note 4 below). The shares had a total value of $1.9 billion based on the February 27, 2013 closing price of EQR Common Shares of $55.99 per share. Concurrent with this transaction, ERPOP issued 34,468,085 OP Units to EQR. On March 7, 2013, EQR filed a shelf registration statement relating to the resale of these shares by the selling shareholders.

On November 28, 2012, as a partial source of funding for the Archstone Acquisition (see definition below), EQR priced the issuance of 21,850,000 Common Shares at a price of $54.75 per share for total consideration of approximately $1.2 billion, after deducting underwriting commissions of $35.9 million. Concurrent with this transaction, ERPOP issued 21,850,000 OP Units to EQR.

In September 2009, the Company announced the establishment of an At-The-Market (“ATM”) share offering program which would allow EQR to sell up to 17.0 millionCommon Shares from time to time over the next three years (later increased by 5.7 million Common Shares and extended to February 2014) into the existing trading market at current market prices as well as through negotiated transactions. Per the terms of ERPOP's partnership agreement, EQR contributes the net proceeds from all equity offerings to the capital of ERPOP in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis). EQR has 6.0 million Common Shares remaining available for issuanceOn July 30, 2013, the Board of Trustees approved an increase to the amount of shares which may be offered under the ATM program as of December 31, 2012.to 13.0 million Common Shares and extended the program maturity to July 2016. EQR has not issued any shares under this program since September 14, 2012.

During the year ended December 31, 2012, EQR issued approximately 3.2 million Common Shares at an average price of $60.59 per share for total consideration of approximately $192.3 million through the ATM program. Concurrent with these transactions, ERPOP issued approximately 3.2 million OP Units to EQR.

Effective July 30, 2013, the Board of Trustees approved an increase and modification to the Company's share repurchase program to allow for the potential repurchase of up to 13.0 million Common Shares. Considering the repurchase activity for the year ended December 31, 2014 (see discussion below), EQR has remaining authorization to repurchase an additional 12,968,760 of its shares as of December 31, 2014.

During the year ended December 31, 2011, EQR issued approximately 3.9 million Common Shares at an average price of $52.23 per share for total consideration of approximately $201.9 million through the ATM program. Concurrent with these transactions, ERPOP issued approximately 3.9 million OP Units to EQR. As of December 31, 2011, transactions to issue approximately 0.5 million of the 3.9 million Common Shares had not yet settled. As of December 31, 2011, the Company increased the number of Common Shares issued and outstanding by this amount and recorded a receivable of approximately $28.5 million included in other assets on the consolidated balance sheets. During the year ended December 31, 2010, EQR issued approximately 6.2 million Common Shares at an average price of $47.45 per share for total consideration of approximately $291.9 million through the ATM program. Concurrent with these transactions, ERPOP issued approximately 6.2 million OP Units to EQR.
On June 16, 2011, the shareholders of EQR approved the Company's 2011 Share Incentive Plan, as amended (the “2011 Plan”). The 2011 Plan reserved 12,980,741 Common Shares for issuance. In conjunction with the approval of the 2011 Plan, no further awards may be granted under the 2002 Share Incentive Plan. The 2011 Plan expires on June 16, 2021. See Note 12 for further discussion.
EQR has a share repurchase program authorized by the Board of Trustees under which it has authorization to repurchase up to $464.6 million of its shares as of December 31, 2012. No shares were repurchased during the years ended December 31, 2012 and 2011. During the year ended December 31, 2010,2014, EQR repurchased 58,13031,240 of its Common Shares at an average price of $32.46$56.87 per share for total consideration of $1.9 million.$1.8 million. These shares were retired subsequent to the repurchases. Concurrent with these transactions, ERPOP repurchased and retired 58,13031,240 OP Units previously issued to EQR. All of the shares repurchased during the year ended December 31, 20102014 were repurchased from employees at the then current market prices to cover the minimum statutory tax withholding obligations related to the vesting of employees' restricted shares. No shares were repurchased during the years ended December 31, 2013 and 2012.

On August 20, 2012, the Company redeemed its Series N Cumulative Redeemable Preferred Shares for cash consideration of $150.0 million plus accrued dividends through the redemption date. Concurrent with this transaction, the Operating Partnership redeemed its corresponding Series N Preference Units. The Company recorded the write-off of approximately $5.1 million in original issuance costs as a premium on the redemption of Preferred Shares/Preference Units.

On April 18, 2012, the Operating Partnership issued 1,081,797 OP Units having a value of $66.6 million (based on the closing price for Common Shares of $61.57 on such date) as partial consideration for the acquisition of one rental property.
On March
During the year ended December 31, 2010,2014, the Company acquired all of its partners' interests in one consolidated partially owned property consisting of 268 apartment units and one consolidated partially owned land parcel for $5.5 million. In conjunction with these transactions, the Company reduced paid in capital (included in general partner's capital in the Operating Partnership issued 188,571 OP Units at a price of $39.15 per OP Unit for total valuation of $7.4Partnership's financial statements) by $2.3 million, as partial consideration for the acquisition of one rental property. Noncontrolling Interests – Partially Owned Properties by $2.2 million and other liabilities by $1.0 million.

During the year ended December 31, 2012, the Company acquired all of its partner's interest in one consolidated partially owned land parcel for no cash consideration. In conjunction with this transaction, the Company increased paid in capital (included in general partner's capital in the Operating Partnership's financial statements) by $1.3 million and reduced Noncontrolling Interests – Partially Owned Properties by $1.3 million.

During the year ended December 31, 2011, the Company acquired all of its partners' interests in three consolidated partially owned properties consisting of 1,351 apartment units for $12.8 million. In conjunction with these transactions, the Company reduced paid in capital (included in general partner's capital in2014, the Operating Partnership's financial statements) by $4.8 million and Noncontrolling Interests – Partially Owned Properties by $8.0 million.
DuringPartnership issued the year ended December 31, 2010, the Company acquired all of its partners' interests in two consolidated partially owned properties consisting of 432 apartment units, one consolidated partially owned development project and one consolidated partially owned land parcel for $0.7 million. One of these partially owned property buyouts was funded through the issuance of 1,129 OP Units valued at $50,000. The Company also increased its ownership in three consolidated partially owned properties through the buyout of certain equity interests which were funded through the issuance of 15,948 OP Units valued at $0.8 million and cash payments of $15.3 million. In conjunction with these transactions, the Company reduced paid in capital (included in general partner's capital in the Operating Partnership's financial statements) by $16.9 million and other liabilities by $0.2 million and increased Noncontrolling Interests – Partially Owned Properties by $0.2 million.3.00% Series P Cumulative Redeemable

F-33F-35



Preference Units with a liquidation value of approximately $18.4 million in conjunction with the buyout of its partner's 95% interest in a previously unconsolidated development property. The Series P Preference Units are classified as a liability due in part to the fact that the holder can put the units back to the Operating Partnership for cash. Dividends are paid quarterly on the Series P Preference Units. See Note 4 for further discussion of the buyout.

See Note 6 for a discussion of the Noncontrolling Interests assumed in conjunction with the acquisition of Archstone.

4.Real Estate and Lease Intangibles
The following table summarizes the carrying amounts for the Company’s investment in real estate (at cost) as of December 31, 20122014 and 20112013 (amounts in thousands):

 2012 2011 2014 2013
Land $4,554,912
 $4,367,816
 $6,295,404
 $6,192,512
Depreciable property:  
  
  
  
Buildings and improvements 14,368,179
 14,262,616
 17,974,337
 17,509,609
Furniture, fixtures and equipment 1,343,765
 1,292,124
 1,365,276
 1,214,220
In-Place lease intangibles 511,891
 502,218
Projects under development:  
  
  
  
Land 210,632
 75,646
 466,764
 353,574
Construction-in-progress 177,118
 84,544
 877,155
 635,293
Land held for development:  
  
  
  
Land 294,868
 299,096
 145,366
 341,389
Construction-in-progress 58,955
 26,104
 39,190
 52,133
Investment in real estate 21,008,429
 20,407,946
 27,675,383
 26,800,948
Accumulated depreciation (4,912,221) (4,539,583) (5,432,805) (4,807,709)
Investment in real estate, net $16,096,208
 $15,868,363
 $22,242,578
 $21,993,239

The following table summarizes the carrying amounts for the Company's above and below market ground and retail lease intangibles as of December 31, 2014 and 2013 (amounts in thousands):
Description Balance Sheet Location 2014 2013
Assets      
Ground lease intangibles – below market Other Assets $178,251
 $178,251
Retail lease intangibles – above market Other Assets 1,260
 1,260
Lease intangible assets   179,511
 179,511
Accumulated amortization   (8,913) (4,364)
Lease intangible assets, net   $170,598
 $175,147
       
Liabilities      
Ground lease intangibles – above market Other Liabilities $2,400
 $2,400
Retail lease intangibles – below market Other Liabilities 5,270
 5,500
Lease intangible liabilities   7,670
 7,900
Accumulated amortization   (2,258) (1,161)
Lease intangible liabilities, net   $5,412
 $6,739

During the years ended December 31, 2014 and 2013, the Company amortized approximately $4.3 million and $3.6 million, respectively, of above and below market ground lease intangibles which is included (net increase) in property and maintenance expense in the accompanying consolidated statements of operations and comprehensive income and approximately $1.1 million and $2.7 million, respectively, of above and below market retail lease intangibles which is included (net increase) in rental income in the accompanying consolidated statements of operations and comprehensive income.


F-36



The weighted average amortization period for above and below market ground lease intangibles and retail lease intangibles is 49.8 years and 2.8 years, respectively.

The following table provides a summary of the aggregate amortization expense for above and below market ground lease intangibles and retail lease intangibles for each of the next five years (amounts in thousands):
  2015 2016 2017 2018 2019
           
Ground lease intangibles $4,321
 $4,321
 $4,321
 $4,321
 $4,321
Retail lease intangibles (939) (896) (540) (71) (71)
Total $3,382
 $3,425
 $3,781
 $4,250
 $4,250
Archstone Acquisition
On February 27, 2013, the Company, AvalonBay Communities, Inc. (“AVB”) and certain of their respective subsidiaries completed their previously announced acquisition (the “Archstone Acquisition” or the "Archstone Transaction") from Archstone Enterprise LP (“Enterprise”) (which subsequently changed its name to Jupiter Enterprise LP), an affiliate of Lehman Brothers Holdings Inc. (“Lehman”) and its affiliates, of all of the assets of Enterprise (including interests in various entities affiliated with Enterprise), constituting a portfolio of apartment properties and other assets (the “Archstone Portfolio”).

The Company acquired assets representing approximately 60% of the Archstone Portfolio which consisted principally of high-quality apartment properties in major markets in the United States. The acquisition allowed the Company to accelerate the completion of its strategic shift into coastal apartment markets. Pursuant to the Archstone Transaction, the Company acquired directly or indirectly, 71 wholly owned, stabilized properties consisting of 20,160 apartment units, one partially owned and consolidated stabilized property consisting of 432 apartment units, one partially owned and unconsolidated stabilized property consisting of 336 apartment units, three consolidated master-leased properties consisting of 853 apartment units, four projects in various stages of construction (two consolidated and two unconsolidated) for 964 apartment units and fourteen land sites for approximately $9.0 billion. During the year ended December 31, 2013, the Company recorded revenues and net operating income ("NOI") of $514.7 million and $352.8 million, respectively, from the acquired assets.

The consideration paid by the Company in connection with the Archstone Acquisition consisted of cash of approximately $4.0 billion (inclusive of $2.0 billion of Archstone secured mortgage principal paid off in conjunction with the closing), 34,468,085 Common Shares (which shares had a total value of $1.9 billion based on the February 27, 2013 closing price of EQR common shares of $55.99 per share) issued to the seller and the assumption of approximately $3.1 billion of mortgage debt (inclusive of a net mark-to-market premium of $127.9 million) and approximately 60% of all of the other assets and liabilities related to the Archstone Portfolio. The cash consideration was funded with proceeds from the issuance of 21,850,000 Common Shares (which shares had a total value of approximately $1.2 billion based on a price of $54.75 per share) in the November/December 2012 public equity offering, asset sales of approximately $4.5 billion that were completed during the year ended December 31, 2013, the Company's $750.0 million unsecured term loan facility (which was subsequently paid off in the second quarter of 2014) and the Company's revolving credit facility.

The Company owns the building and improvements and leases the land underlying the improvements under long-term ground leases that expire beginning in 2042 and running through 2103 for nine of the operating properties acquired and discussed above. These properties are consolidated and reflected as real estate assets while the ground leases are accounted for as operating leases. The Company also leases the three master-leased properties discussed above to third party operators and earns monthly net rental income.

The Company accounted for the acquisition under the acquisition method in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations (“ASC 805”), and the accounting for this business combination is complete and final. The following table summarizes the acquisition date fair values of the assets acquired and liabilities assumed, which the Company determined using Level 1, Level 2 and Level 3 inputs (amounts in thousands):


F-37



   
Land $2,239,000
Depreciable property:  
Buildings and improvements 5,765,538
Furniture, fixtures and equipment 61,470
In-Place lease intangibles 304,830
Projects under development 36,583
Land held for development 244,097
Investments in unconsolidated entities 230,608
Other assets 195,260
Other liabilities (108,997)
Net assets acquired $8,968,389

The allocation of fair values of the assets acquired and liabilities assumed has changed from the allocation reported in “Note 4 – Real Estate and Lease Intangibles” in the Notes to Consolidated Financial Statements included in Part II of our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the SEC on February 27, 2014. The changes to our valuation assumptions were based on more accurate information concerning the subject assets and liabilities and resulted from information not readily available at the acquisition date, final purchase price settlement with our partner in accordance with the terms of the purchase agreement and reclassification adjustments for presentation. None of these changes had a material impact on our Consolidated Financial Statements. The Company's assessment of the fair values and the allocation of the purchase price to the identified tangible and intangible assets/liabilities at March 31, 2014 was its final and best estimate of fair value. As a result, the Company did not make any changes to its allocation of fair values of the assets acquired and liabilities assumed subsequent to the allocation reported in "Note 4 – Real Estate and Lease Intangibles" in the Notes to Consolidated Financial Statements included in Part I of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 filed with the SEC on May 8, 2014.

The fair values of investment in real estate were determined using internally developed models that were based on market assumptions and comparable sales data as well as external valuations performed by unrelated third parties. The market assumptions used as inputs to the Company’s fair value model include construction costs, leasing assumptions, growth rates, discount rates, terminal capitalization rates and development yields. The Company used data on its existing portfolio of properties and its recent acquisition and development properties, as well as similar market data from third party sources, when available, in determining these inputs (Level 2 and 3). The fair value of Noncontrolling Interests was calculated similar to the investment in real estate described above. The fair value of mortgage debt was calculated using indicative rates, leverage and coverage provided by lenders of similar loans (Level 2). The Common Shares issued to an affiliate of Lehman Brothers Holdings Inc. were valued using the quoted market price of Common Shares (Level 1).

The following table summarizes the acquisition date fair values of the above and below market ground and retail lease intangibles, which we determined using Level 2 and Level 3 inputs (amounts in thousands):
Description Balance Sheet Location Fair Value
Ground lease intangibles – below market Other Assets $178,251
Retail lease intangibles – above market Other Assets 1,260
     
Ground lease intangibles – above market Other Liabilities 2,400
Retail lease intangibles – below market Other Liabilities 8,040

As of December 31, 2014, the Company has incurred cumulative Archstone-related expenses of approximately $99.0 million, of which approximately $13.5 million of this total was financing-related and approximately $85.5 million was merger costs. During the year ended December 31, 2014, the Company expensed nominal amounts of direct merger costs. During the years ended December 31, 2013 and 2012, the Company expensed $19.9 million and $5.6 million, respectively, of direct merger costs primarily related to investment banking and legal/accounting fees, which were included in other expenses in the accompanying consolidated statements of operations and comprehensive income. During the years ended December 31, 2014 and 2013, the Company also expensed $4.3 million and $54.0 million, respectively, of indirect merger costs primarily related to severance and retention obligations, office leases and German operations/sales that were incurred through our 60% interest in unconsolidated joint ventures with AVB, which were included in (loss) from investments in unconsolidated entities in the accompanying

F-38



consolidated statements of operations and comprehensive income. Finally, during the years ended December 31, 2013 and 2012, the Company expensed $2.5 million and $8.4 million, respectively, of financing-related costs, which were included in interest expense in the accompanying consolidated statements of operations and comprehensive income.

Unaudited Pro Forma Financial Information

Equity Residential

The following table illustrates the effect on net income, earnings per share – basic and earnings per share – diluted as if the Company had consummated the Archstone Acquisition as of January 1, 2012 (amounts in thousands, except per share amounts):

  Year Ended December 31,
  2013 2012
  
Total revenues $2,485,438
 $2,317,699
Income (loss) from continuing operations (1) 203,286
 (54,940)
Discontinued operations, net 2,074,072
 720,361
Net income 2,277,358
 665,421
Net income available to Common Shares 2,183,756
 622,424
Earnings per share - basic:    
Net income available to Common Shares $6.07
 $1.74
Weighted average Common Shares outstanding (2) 359,688
 356,984
Earnings per share - diluted (1):    
Net income available to Common Shares $6.05
 $1.74
Weighted average Common Shares outstanding (2) 375,861
 356,984

(1)Potential common shares issuable from the assumed conversion of OP Units and the exercise/vesting of long-term compensation shares/units are automatically anti-dilutive and therefore excluded from the diluted earnings per share calculation as the Company had a pro forma loss from continuing operations for the year ended December 31, 2012.
(2)Includes an adjustment for Common Shares issued to the public in November/December 2012 and to an affiliate of Lehman Brothers Holdings Inc. in February 2013 as partial consideration for the Archstone Acquisition.

ERP Operating Limited Partnership

The following table illustrates the effect on net income, earnings per Unit – basic and earnings per Unit – diluted as if the Operating Partnership had consummated the Archstone Acquisition as of January 1, 2012 (amounts in thousands, except per Unit amounts):

F-39



  Year Ended December 31,
  2013 2012
   
Total revenues $2,485,438
 $2,317,699
Income (loss) from continuing operations (1) 203,286
 (54,940)
Discontinued operations, net 2,074,072
 720,361
Net income 2,277,358
 665,421
Net income available to Units 2,273,798
 651,548
Earnings per Unit - basic:    
Net income available to Units $6.07
 $1.74
Weighted average Units outstanding (2) 373,421
 370,837
Earnings per Unit - diluted (1):    
Net income available to Units $6.05
 $1.74
Weighted average Units outstanding (2) 375,861
 370,837

(1)Potential Units issuable from the assumed exercise/vesting of the Company's long-term compensation shares/units are automatically anti-dilutive and therefore excluded from the diluted earnings per Unit calculation as the Operating Partnership had a pro forma loss from continuing operations for the year ended December 31, 2012.
(2)Includes an adjustment for Common Shares issued to the public in November/December 2012 and to an affiliate of Lehman Brothers Holdings Inc. in February 2013 as partial consideration for the Archstone Acquisition. Concurrent with these transactions, ERPOP issued the same number of OP Units to EQR.

For the years ended December 2013 and 2012, acquisition costs of $19.9 million and $5.6 million, respectively, and severance/retention and other costs of $54.1 million and none, respectively, related to the Archstone Acquisition are not expected to have a continuing impact on the Company's financial results and therefore have been excluded from these pro forma results. The pro forma results also do not include the impact of any synergies or lower borrowing costs that the Company has or may achieve as a result of the acquisition or any strategies that management has or may consider in order to more efficiently manage the Company's operations, nor do they give pro forma effect to any other acquisitions, dispositions or capital markets transactions (excluding the equity offering in November/December 2012 which proceeds were used for the Archstone Acquisition) that the Company completed during the periods presented. These pro forma results are not necessarily indicative of the operating results that would have been obtained had the Archstone Acquisition occurred at the beginning of the periods presented, nor are they necessarily indicative of future operating results.

Other

During the year ended December 31, 2014, the Company acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands):
  Properties Apartment Units Purchase Price
Rental Properties – Consolidated 6
 1,353
 $469,850
Land Parcels (two) 
 
 28,790
Total 6
 1,353
 $498,640

The Company also acquired the 95% equity interest it did not previously own in one unconsolidated development project with an anticipated stabilized real estate value of $87.5 million at completion and an adjusted purchase price of $64.2 million. The Company paid cash of approximately $44.8 million and issued the Series P Preference Units with a liquidation value of approximately $18.4 million to complete the buyout (see Note 3). The Company recognized a revaluation loss of approximately $3.5 million, which is included in loss from investments in unconsolidated entities in the accompanying consolidated statements of operations and comprehensive income, in conjunction with this buyout.

In addition to the Archstone Acquisition described above, during the year ended December 31, 20122013, the Company acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands):

F-40



Properties Apartment Units Purchase Price Properties Apartment Units Purchase Price
Rental Properties – Consolidated9
 1,896
 $906,305
 1
 322
 $91,500
Land Parcels (six)
 
 141,240
Land Parcel (one) 
 
 16,500
Total9
 1,896
 $1,047,545
 1
 322
 $108,000

During the year ended December 31, 2011, the Company acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands):

 Properties Apartment Units Purchase Price
Rental Properties – Consolidated21
 6,198
 $1,383,048
Land Parcels (seven) (1) (2)
 
 202,313
Other (3)
 
 11,750
Total21
 6,198
 $1,597,111

(1)
Includes a vacant land parcel at 400 Park Avenue South in New York City acquired jointly by the Company and Toll Brothers (NYSE: TOL). The Company's and Toll Brothers' allocated portions of the purchase price were approximately $76.1 million and $57.9 million, respectively. Until the core and shell of the building is complete, the building and land will be owned jointly and are required to be consolidated on the Company's balance sheet. Thereafter, the Company will solely own and control the rental portion of the building (floors 2-22) and Toll Brothers will solely own and control the for sale portion of the building (floors 23-40). Once the core and shell are complete, the Toll Brothers' portion of the property will be deconsolidated from the Company's balance sheet.
(2)Includes entry into a long-term ground lease for a land parcel at 170 Amsterdam Avenue in New York City.
(3)Represents the acquisition of a 97,000 square foot commercial building adjacent to our Harbor Steps apartment property in downtown Seattle for potential redevelopment.
During the year ended December 31, 2012,2014, the Company disposed of the following to unaffiliated parties (sales price in thousands):

Properties Apartment Units Sales Price Properties Apartment Units Sales Price
Rental Properties – Consolidated35
 9,012
 $1,061,334
Consolidated:      
Rental Properties 10
 3,092
 $466,968
Land Parcels (three) 
 
 62,602
Unconsolidated:      
Rental Properties (1) 1
 388
 62,500
Total35
 9,012
 $1,061,334
 11
 3,480
 $592,070

(1) The Company owned an 85% interest in this unconsolidated rental property. Sale price listed is the gross sale price.

The Company recognized a net gain on sales of real estate properties of approximately $212.7 million, a net gain on sales of unconsolidated entities of approximately $4.9 million (included in loss from investments in unconsolidated entities in the accompanying consolidated statements of operations and comprehensive income) and a net gain on sales of land parcels of approximately $5.3 million on the above sales.

During the year ended December 31, 2013, the Company disposed of the following to unaffiliated parties (sales price in thousands):
F-34

  Properties Apartment Units Sales Price
Consolidated:      
Rental Properties 94
 29,180
 $4,459,339
Land Parcels (seven) 
 
 99,650
Other (1) 
 
 30,734
Unconsolidated:      
Land Parcel (one) (2) 
 
 26,350
Total 94
 29,180
 $4,616,073
Table
(1) Represents a 97,000 square foot commercial building adjacent to our Harbor Steps apartment property in downtown Seattle that was acquired in 2011.
(2) Sales price listed is the gross sales price. EQR's share of Contentsthe net sales proceeds approximated 25%.


The Company recognized a net gain on sales of discontinued operations of approximately $548.3 million on the above sales.

During the year ended December 31, 2011, the Company disposed of the following to unaffiliated parties (sales price in thousands):

 Properties Apartment Units Sales Price
Rental Properties – Consolidated47
 14,345
 $1,482,239
Land Parcel (one) (1)
 
 22,786
Total47
 14,345
 $1,505,025

(1)Represents the sale of a land parcel, on which the Company no longer planned to develop, in suburban Washington, D.C.
The Company recognized a net gain on sales of discontinued operations of approximately $826.5 million$2.0 billion and a net gain on sales of land parcels of approximately $4.2$12.2 million on the above sales.

5.Commitments to Acquire/Dispose of Real Estate
The Company and AvalonBay Communities, Inc. (NYSE: AVB) entered into an agreement to acquire the assets and liabilities of Archstone Enterprise LP, of which the Company will acquire approximately 60%, which includes approximately 75 operating properties, four properties under development and several land parcels for approximately $8.9 billion.    
In addition, the Company has entered into separate agreements to acquire the following (purchase price in thousands):
        
Properties Apartment Units Purchase PriceProperties Apartment Units Purchase Price
Land Parcels (three)
 
 $45,500
Rental Properties1
 202
 $131,250
Land Parcels (four)
 
 31,100
Total
 
 $45,500
1
 202
 $162,350
In addition to the properties that were subsequently disposed of as discussed in Note 18, the Company has entered into separate agreements to dispose of the following (sales price in thousands):

F-41



        
Properties Apartment Units Sales PriceProperties Apartment Units Sales Price
Rental Properties(1)50
 13,772
 $1,983,960
1
 150
 $169,800
Land Parcel (one)
 
 29,000
Total50
 13,772
 $2,012,960
1
 150
 $169,800

(1) Includes a 193,230 square foot office building under contract to be sold for approximately $123.3 million which is adjacent to our Longfellow Place property located in Boston and acquired in 1999.    

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

6.Investments in Partially Owned Entities
The Company has co-invested in various properties with unrelated third parties which are either consolidated or accounted for under the equity method of accounting (unconsolidated). The following tables and information summarize the Company’s investments in partially owned entities as of December 31, 20122014 (amounts in thousands except for project and apartment unit amounts):

 Consolidated Unconsolidated
 Development Projects     Development Projects    
 Held for
and/or Under
Development
 Operating Total  Completed, Not Stabilized (3) Operating Total
             
Total projects (1)
 19
 19
  1
 2
 3
             
Total apartment units (1)
 3,771
 3,771
  444
 837
 1,281
             
Balance sheet information at 12/31/14 (at 100%):            
ASSETS            
Investment in real estate$340,740
 $682,374
 $1,023,114
  $155,376
 $134,669
 $290,045
Accumulated depreciation
 (194,481) (194,481)  (6,921) (11,391) (18,312)
Investment in real estate, net340,740
 487,893
 828,633
  148,455
 123,278
 271,733
Cash and cash equivalents
 19,338
 19,338
  2,684
 3,172
 5,856
Investments in unconsolidated entities
 51,979
 51,979
  
 
 
Deposits – restricted22,706
 300
 23,006
  
 214
 214
Deferred financing costs, net
 2,141
 2,141
  
 8
 8
Other assets6,658
 26,609
 33,267
  529
 691
 1,220
       Total assets$370,104
 $588,260
 $958,364
  $151,668
 $127,363
 $279,031
             
LIABILITIES AND EQUITY/CAPITAL            
Mortgage notes payable (2)$
 $360,479
 $360,479
  $96,793
 $78,628
 $175,421
Accounts payable & accrued expenses13,307
 1,611
 14,918
  769
 259
 1,028
Accrued interest payable
 1,283
 1,283
  464
 227
 691
Other liabilities69
 885
 954
  294
 671
 965
Security deposits25
 1,954
 1,979
  173
 300
 473
       Total liabilities13,401
 366,212
 379,613
  98,493
 80,085
 178,578
             
Noncontrolling Interests – Partially Owned
Properties/Partners' equity
117,350
 7,559
 124,909
  47,223
 43,655
 90,878
Company equity/General and Limited
Partners' Capital
239,353
 214,489
 453,842
  5,952
 3,623
 9,575
       Total equity/capital356,703
 222,048
 578,751
  53,175
 47,278
 100,453
       Total liabilities and equity/capital$370,104
 $588,260
 $958,364
  $151,668
 $127,363
 $279,031



F-35F-42


  Consolidated Unconsolidated
  Development Projects      
  
Held for
and/or Under
Development (4)
 Other Total Institutional Joint Ventures (5)
         
Total projects (1) 
 19
 19
 

 
 
 
  
Total apartment units (1) 
 3,475
 3,475
 

 
 
 
  
Balance sheet information at 12/31/12 (at 100%): 
 
 
  
ASSETS 
 
 
  
Investment in real estate $161,820
 $453,235
 $615,055
 $171,041
Accumulated depreciation 
 (159,651) (159,651) 
Investment in real estate, net 161,820
 293,584
 455,404
 171,041
Cash and cash equivalents 3,884
 17,221
 21,105
 214
Deposits – restricted 43,609
 5
 43,614
 
Deferred financing costs, net 
 1,019
 1,019
 6
Other assets 5,839
 171
 6,010
 22
       Total assets $215,152
 $312,000
 $527,152
 $171,283

 
 
 
  
LIABILITIES AND EQUITY/CAPITAL 
 
 
  
Mortgage notes payable $
 $200,337
 $200,337
 $76,634
Accounts payable & accrued expenses 686
 693
 1,379
 6,550
Accrued interest payable 
 782
 782
 342
Other liabilities 1,238
 1,096
 2,334
 108
Security deposits 
 1,483
 1,483
 3
       Total liabilities 1,924
 204,391
 206,315
 83,637

 
 
 
  
Noncontrolling Interests – Partially Owned Properties 85,006
 (7,318) 77,688
 70,428
Company equity/General and Limited Partners' Capital 128,222
 114,927
 243,149
 17,218
       Total equity/capital 213,228
 107,609
 320,837
 87,646
       Total liabilities and equity/capital $215,152
 $312,000
 $527,152
 $171,283

 
 
 
  
Debt – Secured (2): 
 
 
  
       Company/Operating Partnership Ownership (3) $
 $159,068
 $159,068
 $15,327
       Noncontrolling Ownership 
 41,269
 41,269
 61,307
Total (at 100%) $

$200,337

$200,337
 $76,634


F-36


 Consolidated UnconsolidatedConsolidated Unconsolidated
 Development Projects      Development Projects     Development Projects    
 
Held for
and/or Under
Development (4)
 Other Total Institutional Joint Ventures (5)Held for
and/or Under
Development
       Operating  
Operating information for the year
ended 12/31/12 (at 100%):
  
  
  
  
     Completed, Not Stabilized (3)  
Held for
and/or Under
Development
 Operating Total TotalOperatingTotal
Operating information for the year ended 12/31/14 (at 100%):        
Operating revenue $
 $62,405
 $62,405
 $7
 $88,157
 $88,179
 $10,182
 $15,160
Operating expenses 170
 19,480
 19,650
 244
91
 25,674
 25,765
 3,781
 6,818
 10,599
           
Net operating (loss) income (170) 42,925
 42,755
 (237)(69) 62,483
 62,414
 6,401
 8,342
 14,743
Depreciation 
 15,346
 15,346
 

 21,679
 21,679
 6,512
 5,800
 12,312
General and administrative/other 213
 157
 370
 
1
 116
 117
 1
 209
 210
           
Operating (loss) income (383) 27,422
 27,039
 (237)(70) 40,688
 40,618
 (112) 2,333
 2,221
Interest and other income 2
 100
 102
 

 11
 11
 
 
 
Other expenses (264) 
 (264) 

 (54) (54) 
 
 
Interest:                   
Expense incurred, net 
 (9,386) (9,386) 

 (15,626) (15,626) (5,296) (3,831) (9,127)
Amortization of deferred financing costs 
 (160) (160) 

 (355) (355) 
 (2) (2)
(Loss) income before income and other taxes and net
gain on sales of discontinued operations
 (645) 17,976
 17,331
 (237)
           
(Loss) income before income and other taxes and (loss)
from investments in unconsolidated entities
(70) 24,664
 24,594
 (5,408) (1,500) (6,908)
Income and other tax (expense) benefit (25) (75) (100) 

 (36) (36) (7) 
 (7)
Net gain on sales of discontinued operations 15
 
 15
 
(Loss) from investments in unconsolidated entities

 (1,593) (1,593) 
 
 
           
Net (loss) income $(655) $17,901
 $17,246
 $(237)$(70) $23,035
 $22,965
 $(5,415) $(1,500) $(6,915)

(1)Project and apartment unit counts exclude all uncompleted development projects until those projects are substantially completed.
(2)All debt is non-recourse to the Company.
(3)Represents the Company’s/Operating Partnership's current equity ownership interest.Projects included here are substantially complete. However, they may still require additional exterior and interior work for all units to be available for leasing.

(4)Includes 400 Park Avenue South in New York City which the Company is jointly developing with Toll Brothers.
(5)Note:
The above tables exclude the Company's interests in unconsolidated joint ventures entered into with AVB in connection with the Archstone Transaction. These development projects (Nexus Sawgrassventures own certain non-core Archstone assets that are held for sale and Domain)succeeded to certain residual Archstone liabilities, such as liability for various employment-related matters as well as responsibility for tax protection arrangements and third-party preferred interests in former Archstone subsidiaries. The preferred interests have an aggregate liquidation value of $74.6 million at December 31, 2014. The ventures are owned 20%60% by the Company and 80%40% by an institutional partner in two separate unconsolidated joint ventures. Total project costs are approximately $232.8 million and construction will be predominantly funded with two separate long-term, non-recourse secured loans from the partner. The Company is responsible for constructing the projects and has given certain construction cost overrun guarantees but currently has no further funding obligations. Nexus Sawgrass has a maximum debt commitment of $48.7 million and a current unconsolidated outstanding balance of $29.8 million; the loan bears interest at 5.60% and matures January 1, 2021. Domain has a maximum debt commitment of $98.6 million and a current unconsolidated outstanding balance of $46.9 million; the loan bears interest at 5.75% and matures January 1, 2022.AVB.

During the year ended December 31, 2014, the Company and its joint venture partners sold one consolidated partially owned land parcel and recognized a net gain on the sale of approximately $1.1 million as well as one unconsolidated partially owned property consisting of 388 apartment units and recognized a net gain on the sale of approximately $4.9 million.

During the year ended December 31, 2012, the Company and its joint venture partner sold two consolidated partially owned properties consisting of 441 apartment units and recognized a net gain on the sales of approximately $21.3 million.$21.3 million.

The Company is the controlling partner in various consolidated partnership properties and development properties having a noncontrolling interest book value of $77.7$124.9 million at December 31, 2012. The Company has identified one development partnership, consisting of a land parcel with a book value of $5.0 million, as a VIE.2014. The Company does not have any unconsolidated VIEs.

Archstone Acquisition

On February 27, 2013, in conjunction with the Archstone Acquisition, the Company acquired interests in certain joint ventures. Details of these interests follow by project:

Wisconsin Place – This project contains a mixed-use site located in Chevy Chase, Maryland consisting of residential, retail, office and accessory uses, including underground parking facilities. The Company has a 75% equity interest with an initial basis of $198.5 million in the 432 unit residential component. The Company is the managing member, was responsible for constructing the residential project and its partner does not have substantive kick-out or participating rights. As a result, the entity that owns the residential component of this mixed-use site is required to be consolidated on the Company's balance sheet. Such entity also retains an unconsolidated interest in an entity that owns the land underlying the entire project and owns and operates the parking facility. The initial fair value of this investment is $56.5 million. The Company does not have any ownership interest

F-43



in the retail and office components.

Waterton Tenside – This venture was formed to develop and operate a 336 unit apartment property located in Atlanta, Georgia. The Company has a 20% equity interest with an initial basis of $5.1 million. The partner is the managing member and developed the project. The project is encumbered by a non-recourse mortgage loan that has a current outstanding balance of $30.0 million, bears interest at 3.66% and matures December 1, 2018. The Company does not have substantive kick-out or participating rights. As a result, the entity is unconsolidated and recorded using the equity method of accounting.

On February 27, 2013, in connection with the Archstone Acquisition, subsidiaries of the Company and AVB entered into three limited liability company agreements (collectively, the “Residual JV”). The Residual JV owns certain non-core Archstone assets, such as interests in a four property portfolio of apartment buildings and succeeded to certain residual Archstone liabilities, such as liability for various employment-related matters. The Residual JV is owned 60% by the Company and 40% by AVB and the Company's initial investment was $147.6 million. The Residual JV is managed by a Management Committee consisting of two members from each of the Company and AVB. Both partners have equal participation in the Management Committee and all significant participating rights are shared by both partners. As a result, the Residual JV is unconsolidated and recorded using the equity method of accounting.

During the year ended December 31, 2014, the Company closed on the sale of its unconsolidated interest in the German portfolio fund, the German management company and the remaining wholly-owned German real estate assets. With these sales, all German real estate assets that were acquired by the Residual JV as part of the Archstone Acquisition have now been sold. The Company's pro rata share of the proceeds/distributions that have been repatriated to the Residual JV and received by the Company as a result of the German dispositions was approximately $79.6 million during the year ended December 31, 2014 and $98.5 million cumulatively since the closing of the Archstone Acquisition.

On February 27, 2013, in connection with the Archstone Acquisition, a subsidiary of the Company and AVB entered into a limited liability company agreement (the “Legacy JV”), through which they assumed obligations of Archstone in the form of preferred interests, some of which are governed by tax protection arrangements. During the year ended December 31, 2013, the Company purchased with AVB $65.0 million (of which the Company's 60% share was $39.0 million) of the preferred interests assumed by the Legacy JV. At December 31, 2014, the remaining preferred interests have an aggregate liquidation value of $74.6 million, our share of which is included in other liabilities in the accompanying consolidated balance sheets. Obligations of the Legacy JV are borne 60% by the Company and 40% by AVB. The Legacy JV is managed by a Management Committee consisting of two members from each of the Company and AVB. Both partners have equal participation in the Management Committee and all significant participating rights are shared by both partners. As a result, the Legacy JV is unconsolidated and recorded using the equity method of accounting.

Other

In December 2011, the Company and Toll Brothers (NYSE: TOL) jointly acquired a vacant land parcel at 400 Park Avenue South in New York City. The Company's and Toll Brothers' allocated portions of the purchase price were approximately $76.1$76.1 million and $57.9$57.9 million,, respectively. The Company is the managing member and Toll Brothers does not have substantive kick-out or participating rights. Until the core and shell of the building is complete, the building and land will be owned jointly and are required to be consolidated on the Company's balance sheet (not a VIE).sheet. Thereafter, the Company will solely own and control the rental portion of the building (floors 2-22) and Toll Brothers will solely own and control the for sale portion of the building (floors 23-40). Once the core and shell are complete, the Toll Brothers' portion of the property will be deconsolidated from the Company's balance sheet. The acquisition was financed through contributions by the Company and Toll Brothers of approximately $102.5$102.5 million and $75.7$75.7 million,, respectively, which included the land purchase noted above, restricted deposits and taxes and fees. As of December 31, 2012,2014, the Company's and Toll Brothers' consolidated contributions to the joint venture were approximately $203.5$336.9 million,, of which Toll Brothers' noncontrolling interest balance totaled $84.0 million.$117.4 million.

The Company admitted an 80% institutional partner to two separate entities/transactions (one(Nexus Sawgrass in December 2010 and the

F-37


otherDomain in August 2011), each owning a developable land parcel, in exchange for $40.1$40.1 million in cash and retained a 20% equity interest in both of these entities. These land parcelsprojects are now unconsolidated. Details of these projects follow:

Nexus Sawgrass – This development project was completed and stabilized during the quarter ended September 30, 2014. Total project costs were approximately $78.6 million and construction was predominantly funded with a long-term, non-recourse secured loan from the partner. The mortgage loan has a maximum debt commitment of $48.7 million and a current unconsolidated outstanding balance of $48.6 million; the loan bears interest at 5.60% and matures January 1, 2021.
Domain – This development project is substantially complete. Total project costs are expected to be approximately $232.8 $155.8

F-44



million and construction will bewas predominantly funded with two separatea long-term, non-recourse secured loansloan from the partner. The mortgage loan has a maximum debt commitment of $98.6 million and a current unconsolidated outstanding balance of $96.8 million; the loan bears interest at 5.75% and matures January 1, 2022.

While the Company is the managing member of both of the joint ventures, iswas responsible for constructing both of the projects and has given certain construction cost overrun guarantees, all major decisions are made jointly, the large majority of funding is provided by the partner and thejoint venture partner has significant participating rights and has active involvement in and oversight of the ongoing projects, neither of which is a VIE.projects. The Company currently has no further funding obligations related to these projects.

7.
Deposits – Restricted and Escrow Deposits – Mortgage
The following table presents the Company’s restricted deposits as of December 31, 20122014 and 20112013 (amounts in thousands):

 December 31, 2012 December 31, 2011 December 31,
2014
 December 31,
2013
Tax – deferred (1031) exchange proceeds $152,182
 $53,668
Earnest money on pending acquisitions 5,613
 7,882
 $580
 $4,514
Restricted deposits on debt 
 2,370
Restricted deposits on real estate investments 44,209
 43,970
 24,701
 53,771
Resident security and utility deposits 44,199
 40,403
 46,516
 44,777
Other 4,239
 3,944
 506
 505
Totals $250,442
 $152,237
 $72,303
 $103,567

The following table presents the Company’s escrow deposits as of December 31, 2014 and 2013 (amounts in thousands):
  December 31,
2014
 December 31,
2013
Real estate taxes and insurance $2,235
 $3,687
Replacement reserves 3,431
 4,229
Mortgage principal reserves/sinking funds 41,567
 33,868
Other 852
 852
Totals $48,085
 $42,636


8.Debt

EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. EQR guaranteed the Operating Partnership's $500.0 million unsecured senior term loan, which was repaid at maturity on October 5, 2012, and also guarantees the Operating Partnership'sPartnership’s revolving credit facility up to the maximum amount and for the full term of the facility.

Mortgage Notes Payable

As of December 31, 2014, the Company had outstanding mortgage debt of approximately $5.1 billion.

During the year ended December 31, 2014, the Company:

Repaid $100.7 million of mortgage loans; and
Assumed $28.9 million of mortgage debt on one acquired property.

The Company recorded approximately $0.3 million of prepayment penalties during the year ended December 31, 2014 as additional interest expense related to debt extinguishment of mortgages. The Company also recorded $1.9 million of write-offs of net unamortized premiums during the year ended December 31, 2014 as a reduction of interest expense related to debt extinguishment of mortgages.

As of December 31, 2014, the Company had $700.5 million of secured debt subject to third party credit enhancement.

As of December 31, 2014, scheduled maturities for the Company’s outstanding mortgage indebtedness were at various dates through May 1, 2061. At December 31, 2014, the interest rate range on the Company’s mortgage debt was 0.03% to 7.25% . During the year ended December 31, 2014, the weighted average interest rate on the Company’s mortgage debt was 4.21% .



F-45



The historical cost, net of accumulated depreciation, of encumbered properties was $6.9 billion and $7.3 billion at December 31, 2014 and 2013, respectively.

As of December 31, 20122013, the Company had outstanding mortgage debt of approximately $3.9 billion.$5.2 billion.
During the year ended December 31, 20122013, the Company:

Repaid $364.3 millionAssumed as part of the Archstone Transaction $2.2 billion of mortgage loans;
debt held in two Fannie Mae loan pools, consisting of $1.2 billion collateralized by 16 properties with an interest rate of 6.256% and a maturity date of November 1, 2017 ("Pool 3") and $963.5 million collateralized by 15 properties with an interest rate of 5.883% and a maturity date of November 1, 2014 ("Pool 4");
Obtained $26.5Repaid $2.5 billion of mortgage loans, which includes the partial paydown of $825.0 million of newPool 3 mortgage loan proceeds;debt and
the payoff of $963.5 million of Pool 4 mortgage debt;
Assumed $137.6as part of the Archstone Transaction $346.6 million of tax-exempt bonds on four properties with interest rates ranging from SIFMA plus 0.860% to SIFMA plus 1.402% and maturity dates through November 15, 2036;
Assumed as part of the Archstone Transaction $339.0 million of other mortgage debt on two acquired properties.three properties with fixed interest rates ranging from 0.100% to 5.240% and maturity dates through May 1, 2061;
Assumed as part of the Archstone Transaction $34.1 million of other mortgage debt on one property with a variable rate of LIBOR plus 1.75% and a maturity date of September 1, 2014;
Recorded $127.9 million of net mark-to-market premiums on the Archstone Transaction mortgage debt described above; and
Obtained $902.9 million of new mortgage loan proceeds, inclusive of an $800.0 million secured loan from a large insurance company which matures on November 10, 2023, is interest only and carries a fixed interest rate of 4.21%.

The Company recorded approximately $0.3$222.4 million and $1.6$7.4 million of prepayment penalties and write-offs of unamortized deferred financing costs, respectively, during the year ended December 31, 20122013 as additional interest expense related to debt extinguishment of mortgages. The Company also recorded $110.5 million of write-offs of net unamortized premiums during the year ended December 31, 2013 as a reduction of interest expense related to debt extinguishment of mortgages.

As of December 31, 2012,2013, the Company had $362.2$700.5 million of secured debt subject to third party credit enhancement.

As of December 31, 2012,2013, scheduled maturities for the Company’s outstanding mortgage indebtedness were at various dates through June 15, 2051.May 1, 2061. At December 31, 2012,2013, the interest rate range on the Company’s mortgage debt was 0.11%0.03% to 11.25%7.25%. During the year ended December 31, 2012,2013, the weighted average interest rate on the Company’s mortgage debt was 4.96%.
The historical cost, net of accumulated depreciation, of encumbered properties was $4.4 billion and $4.9 billion at December 31, 2012 and 2011, respectively.
As of December 31, 2011, the Company had outstanding mortgage debt of approximately $4.1 billion.

During the year ended December 31, 2011, the Company:
Repaid $991.74.23% (excludes $113.6 million of mortgage loans;
Obtained $190.9 million of new mortgage loan proceeds; and
Assumed $158.2 million of mortgage debt on five acquired properties.
The Company recorded approximately $4.4 million of write-offs of unamortized deferred financing costs during the year

F-38


ended December 31, 2011 as additional interest expensepremiums related to debt extinguishment of mortgages.
As of December 31, 2011, the Company had $455.6 million of secured debt subject to third party credit enhancement.
As of December 31, 2011, scheduled maturities for the Company’s outstanding mortgage indebtedness were at various dates through September 1, 2048mortgages). At December 31, 2011, the interest rate range on the Company’s mortgage debt was 0.05% to 11.25%. During the year ended December 31, 2011, the weighted average interest rate on the Company’s mortgage debt was 4.84%.

Notes
The following tables summarize the Company’s unsecured note balances and certain interest rate and maturity date information as of and for the years ended December 31, 20122014 and 20112013, respectively:
December 31, 2012
 (Amounts are in thousands)
 Net Principal Balance Interest Rate Ranges Weighted Average Interest Rate Maturity Date Ranges
Fixed Rate Public/Private Notes (1) $4,329,352
 4.625% - 7.57% 5.70% 2013 - 2026
Floating Rate Public/Private Notes (1) 301,523
 (1) 1.83% 2013
Totals $4,630,875
      
December 31, 2014
 (Amounts in thousands)
 Net Principal Balance Interest Rate Ranges Weighted Average Interest Rate Maturity Date Ranges
Fixed Rate Public Notes (1) $4,974,154
 3.00% - 7.57% 5.45% 2015 - 2044
Floating Rate Public Notes (1) 451,192
 (1) 1.15% 2019
Totals $5,425,346
      

December 31, 2011
(Amounts are in thousands)
 Net Principal Balance Interest Rate Ranges Weighted Average Interest Rate Maturity Date Ranges
December 31, 2013
(Amounts in thousands)
 Net Principal Balance Interest Rate Ranges Weighted Average Interest Rate Maturity Date Ranges
Fixed Rate Public/Private Notes (1) $4,803,191
 4.625% - 7.57% 5.84% 2012 - 2026 $4,727,088
 3.00% - 7.57% 5.55% 2014 - 2026
Floating Rate Public/Private Notes (1)(2) 806,383
 (1) 1.67% 2012 - 2013 750,000
 (2) 1.58% 2015
Totals $5,609,574
       $5,477,088
      

(1)
At December 31, 2012 and 2011, $300.0 million in fairFair value interest rate swaps converts a portion ofconvert the $400.0$450.0 million face value 5.200% 2.375% notes due AprilJuly 1, 20132019 to a floating interest rate.
rate of 90-Day LIBOR plus 0.61%.
(2)Includes the Company's senior unsecured $750.0 million term loan facility that was to mature on January 11, 2015 and was paid off in the second quarter of 2014. The interest rate on advances under the term loan facility was generally LIBOR plus a spread (1.20%), which was dependent on the credit rating of the Company's long-term debt.

F-46



The Company’s unsecured public debt contains certain financial and operating covenants including, among other things, maintenance of certain financial ratios. The Company was in compliance with its unsecured public debt covenants for both the years ended December 31, 20122014 and 20112013.
An unlimited amount
EQR and ERPOP currently have an active universal shelf registration statement for the issuance of equity and debt securities remains available for issuance by EQR and ERPOP under a universal shelf registration statement that automatically became automatically effective upon filing with the SEC in October 2010on July 30, 2013 and expires on October 15, 2013.July 30, 2016. Per the terms of ERPOP's partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of ERPOP 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 the year ended December 31, 2014, the Company:
Repaid $500.0 million of 5.250% unsecured notes at maturity;
Repaid its $750.0 million unsecured term loan facility in conjunction with the note issuances discussed below and wrote-off approximately $0.6 million of unamortized deferred financing costs as additional interest expense;
Issued $450.0 million of five-year 2.375% fixed rate public notes, receiving net proceeds of $449.6 million before underwriting fees and other expenses, at an all-in effective interest rate of 2.52% and swapped the notes to a floating interest rate in conjunction with the issuance (see Note 9 for further discussion); and
Issued $750.0 million of thirty-year 4.50% fixed rate public notes, receiving net proceeds of $744.7 million before underwriting fees, hedge termination costs and other expenses, at an all-in effective interest rate of 4.57% after termination of various forward starting swaps in conjunction with the issuance (see Note 9 for further discussion).

During the year ended December 31, 20122013, the Company:
Repaid $253.9$400.0 million of 6.625%5.200% unsecured notes at maturity;
Repaid $222.1Issued $500.0 million of 5.500% unsecuredten-year 3.00% fixed rate public notes, receiving net proceeds of $495.6 million before underwriting fees, hedge termination costs and other expenses, at maturity;
an all-in effective interest rate of 3.998%; and
Repaid its $500.0 million term loan facility at maturity; and
Entered into a new senior unsecured $500.0$750.0 million delayed draw term loan facility that could have beenwhich was fully drawn anytime on or before July 4, 2012.February 27, 2013 in connection with the Archstone Acquisition. The Company elected not to draw on this facility andmaturity date of January 11, 2015 was subject to a one-year extension option exercisable by the terms ofCompany. The interest rate on advances under the agreement, the facility expired undrawn. The Company recorded approximately $1.0 million of write-offs of unamortized deferred financing costs at termination.
During the year ended December 31, 2011, the Company:
Repaid $93.1 million of 6.95% unsecured notes at maturity;
Exercised the second of its twoone-year extension options for its $500.0 million term loan facility resultingwas generally LIBOR plus a spread (1.20%), which was dependent on the credit rating of the Company's long-term debt. This facility was paid off in a maturity datethe second quarter of October 5, 2012;
2014.
Redeemed $482.5 million of its 3.85% unsecured notes with a final maturity of 2026 at par and no premium was paid; and
Issued $1.0 billion of ten-year 4.625% fixed rate public notes in a public offering, receiving net proceeds of $996.2 million before underwriting fees and other expenses. The notes are at an all-in effective interest rate of approximately

F-39


6.2% after termination of various forward starting swaps in conjunction with the issuance (see Note 9 for further discussion).
    
OnIn November 26, 2012, the Company obtained a commitment for a senior unsecured bridge loan facility in an aggregate principal amount not to exceed $2.5$2.5 billion to finance the acquisition of 60% of the assetsArchstone and liabilities of Archstone Enterprise LP ("Archstone"), a privately-held owner, operatorto pay fees and developer of multifamily apartment properties (see Note 18 for further discussion).expenses relating to this transaction. The Company incurred fees totaling $16.310.9 million to structure this facility, of which $8.4 million was written off in 2012 in conjunction with additional capital raising activities which curtailed amounts available on this facility. See Note 18 for discussion on the cancellation of this facility.
In December 2011, the Company obtained a commitment for a senior unsecured bridge loan facility in an aggregate principal amount not to exceed $1.0 billion to finance the potential acquisition of an ownership interest in Archstone. The Company paid fees of $2.6 million to structure this facility, which were recorded as deferred financing costs and amortized in 2011. On January 6, 2012,11, 2013, the Company terminated this $1.0$2.5 billion bridge loan facility in connection with an amendment to the Company's revolving credit facility (see below for further discussion) and the execution of the $500.0 million delayed draw term loan facility discussed above.
On October 11, 2007,above and the Company closed on a $500.0 million senior unsecured term loan. Effective April 5, 2011, the Company exercised the second of its twoone-year extension options, resulting in a maturity date of October 5, 2012.new revolving credit facility discussed below. The Company paidwrote off this term loan at maturity. The loan boreapproximately $2.5 million of unamortized deferred financing costs during the year ended December 31, 2013 as additional interest at variable rates based upon LIBOR plus a spread (0.50%) dependent upon the credit rating on the Company’s long-term senior unsecured debt.expense.

On August 23, 2006, the Company issued $650.0 million of exchangeable notes that were to mature on August 15, 2026. The notes bore interest at a fixed rate of 3.85%. The notes were exchangeable into Common Shares, at the option of the holders, under specific circumstances or on or after August 15, 2025, at an exchange rate of 16.3934 shares per $1,000 principal amount of notes (equivalent to an exchange price of $61.00 per share). On August 18, 2011 (the "Redemption Date"), the Operating Partnership redeemed all of the outstanding notes for $482.5 million in cash, which was equal to 100% of the principal amount of such notes, plus accrued and unpaid interest up to but excluding the Redemption Date. See Note 2 for more information on the change in the recognition of interest expense for these notes.

Lines of Credit

On January 11, 2013, the Company replaced its existing $1.75 billion facility with a $2.5 billion unsecured revolving credit facility maturing April 1, 2018. The Company has the ability to increase available borrowings by an additional $500.0 million by adding additional banks to the facility or obtaining the agreement of existing banks to increase their commitments. The interest rate on advances under the facility will generally be LIBOR plus a spread (currently 1.05%) and the Company pays an annual facility fee (currently 15 basis points). Both the spread and the facility fee are dependent on the credit rating of the Company's long-term debt.

In July 2011, the Company replaced its then existing unsecured revolving credit facility with a new $1.25$1.25 billion unsecured revolving credit facility maturing on July 13, 2014,, subject to a one-year extension option exercisable by the Company. The Company had the ability to increase available borrowings by an additional $500.0$500.0 million by adding additional banks to the facility or obtaining the agreement of existing banks to increase their commitments. On January 6, 2012, the Company amended this credit facility to increase available borrowings by an additional $500.0$500.0 million to $1.75$1.75 billion with all other terms, including the July 13, 2014 maturity date, remaining the same. The interest rate on advances under the credit facility was generally LIBOR

F-47



plus a spread (1.15%(1.15%) and the Company paid an annual facility fee of 0.2%. Both the spread and the facility fee were dependent on the credit rating of the Company's long-term debt. See Note 18 for discussion on the Company's replacement of this unsecured revolving credit facility. The facility had replaced the Company's previous $1.425$1.425 billion facility which was scheduled to mature in February 2012.2012. The Company wrote-off $0.2$0.2 million in unamortized deferred financing costs related to the old facility.

As of December 31, 20122014, the amount available on the credit facility was $1.72$2.12 billion (net of $30.2$43.8 million which was restricted/dedicated to support letters of credit)credit and there was no amount outstanding. See Note 18 for amounts available on the Company's replacement facility.net of $333.0 million outstanding). During the year ended December 31, 20122014, the weighted average interest rate was 1.35%0.95%. As of December 31, 20112013, the amount available on the credit facility was $1.22$2.35 billion (net of $31.8$34.9 million which was restricted/dedicated to support letters of credit)credit and there was no amount outstanding.net of $115.0 million outstanding). During the year ended December 31, 20112013, the weighted average interest rate was 1.42%1.26%.

Other

The following table provides a summary of the aggregate payments of principal on all debt for each of the next five years and thereafter (amounts in thousands):

F-40


Year Total (1) Total (1)
2013 $526,310
2014 586,323
2015 417,812
 $408,420
2016 1,190,538
 1,192,798
2017 1,446,576
 1,346,708
2018 514,510
2019 1,278,469
Thereafter 4,341,101
 6,135,842
Net Unamortized Premium 20,584
Net Unamortized (Discount) (31,886)
Total $8,529,244
 $10,844,861

(1)Premiums and discounts are amortized over the life of the debt.

9.Derivative and Other Fair Value Instruments

The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, 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 Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.
The carrying values of the Company’s mortgage notes payable and unsecured notes were approximately $3.9 billion and $4.6 billion, respectively, at December 31, 2012. The fair values of the Company’s mortgage notes payable and unsecured notes were approximately $4.3 billion (Level 2) and $5.2 billion (Level 2), respectively, at December 31, 2012. The carrying values of the Company’s mortgage notes payable and unsecured notes were approximately $4.1 billion and $5.6 billion, respectively, at December 31, 2011. The fair values of the Company’s mortgage notes payable and unsecured notes were approximately $4.3 billion (Level 2) and $6.0 billion (Level 2), respectively, at December 31, 2011. The fair values of the Company’s financial instruments (other than mortgage notes payable, unsecured notes, derivative instruments and investment securities), including cash and cash equivalents and other financial instruments, approximate their carrying or contract values.
In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company seeks to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments. The Company may also use derivatives to manage its exposure to foreign exchange rates (should the Archstone transaction close) or manage commodity prices in the daily operations of the business.
The following table summarizes the Company’s consolidated derivative instruments at December 31, 2012 (dollar amounts are in thousands):
 
Fair Value
Hedges (1)
 
Forward
Starting
Swaps (2)
Current Notional Balance$300,000
 $200,000
Lowest Possible Notional$300,000
 $200,000
Highest Possible Notional$300,000
 $200,000
Lowest Interest Rate2.009% 3.478%
Highest Interest Rate2.637% 4.695%
Earliest Maturity Date2013
 2023
Latest Maturity Date2013
 2023

(1)Fair Value Hedges – Converts outstanding fixed rate debt to a floating interest rate.
(2)Forward Starting Swaps – Designed to partially fix the interest rate in advance of a planned future debt issuance. These swaps have mandatory counterparty terminations in 2014, and are targeted to 2013 issuances.
In June 2011, the Company's remaining development cash flow hedge matured.
A three-level valuation hierarchy exists for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:


F-41


Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The Company’s derivative positions are valued using models developed by the respective counterparty as well as models developed internally by the Company that use as their basis readily observable market parameters (such as forward yield curves and credit default swap data). Employee holdings other than Common Shares within the supplemental executive retirement plan (the

F-48



(the “SERP”) are valued using quoted market prices for identical assets and are included in other assets and other liabilities on the consolidated balance sheet. The Company’s investment securities are valued using quoted market prices or readily available market interest rate data.sheets. Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners are valued using the quoted market price of Common Shares. The fair values disclosed for mortgage notes payable and unsecured notesdebt (including its line of credit) were calculated using indicative rates provided by lenders of similar loans in the case of mortgage notes payable and the private unsecured notesdebt (including its line of credit) and quoted market prices for each underlying issuance in the case of the public unsecured notes.

The carrying values of the Company’s mortgage notes payable and unsecured debt (including its line of credit) were approximately $5.1 billion and $5.8 billion, respectively, at December 31, 2014. The fair values of the Company’s mortgage notes payable and unsecured debt (including its line of credit) were approximately $5.1 billion (Level 2) and $6.1 billion (Level 2), respectively, at December 31, 2014. The carrying values of the Company’s mortgage notes payable and unsecured debt (including its line of credit) were approximately $5.2 billion and $5.6 billion, respectively, at December 31, 2013. The fair values of the Company’s mortgage notes payable and unsecured debt (including its line of credit) were approximately $5.1 billion (Level 2) and $5.9 billion (Level 2), respectively, at December 31, 2013. The fair values of the Company’s financial instruments (other than mortgage notes payable, unsecured notes, lines of credit and derivative instruments), including cash and cash equivalents and other financial instruments, approximate their carrying or contract values.

The following table summarizes the Company’s consolidated derivative instruments at December 31, 2014 (dollar amounts are in thousands):
 Fair Value
Hedges (1)
Forward
Starting
Swaps (2)
Current Notional Balance$450,000
$400,000
Lowest Possible Notional$450,000
$400,000
Highest Possible Notional$450,000
$400,000
Lowest Interest Rate2.375%2.274%
Highest Interest Rate2.375%3.191%
Earliest Maturity Date2019
2025
Latest Maturity Date2019
2025

(1)
Fair Value Hedges – Converts outstanding fixed rate unsecured notes ($450.0 million 2.375%notes due July 1, 2019) to a floating interest rate of 90-Day LIBOR plus 0.61%.
(2)Forward Starting Swaps – Designed to partially fix interest rates in advance of a planned future debt issuance. These swaps have mandatory counterparty terminations in 2016, and are targeted to 2015 issuances.

The following tables provide a summary of the fair value measurements for each major category of assets and liabilities measured at fair value on a recurring basis and the location within the accompanying Consolidated Balance Sheetsconsolidated balance sheets at December 31, 20122014 and 20112013, respectively (amounts in thousands):
      Fair Value Measurements at Reporting Date Using
      Quoted Prices in    
      Active Markets for Significant Other Significant
  Balance Sheet   Identical Assets/Liabilities Observable Inputs Unobservable Inputs
Description Location 12/31/2012 (Level 1) (Level 2) (Level 3)
Assets          
Derivatives designated as hedging instruments:         
   Interest Rate Contracts:         
      Fair Value Hedges Other Assets $1,524
 $
 $1,524
 $
Supplemental Executive Retirement PlanOther Assets 70,655
 70,655
 
 
Available-for-Sale Investment SecuritiesOther Assets 2,214
 2,214
 
 
Total   $74,393
 $72,869
 $1,524
 $
           
Liabilities          
Derivatives designated as hedging instruments:         
   Interest Rate Contracts:         
      Forward Starting SwapsOther Liabilities $44,050
 $
 $44,050
 $
Supplemental Executive Retirement PlanOther Liabilities 70,655
 70,655
 
 
Total   $114,705
 $70,655
 $44,050
 $
           
Redeemable Noncontrolling Interests –         
   Operating Partnership/Redeemable         
      Limited PartnersMezzanine $398,372
 $
 $398,372
 $



F-42F-49



   Fair Value Measurements at Reporting Date Using   Fair Value Measurements at Reporting Date Using
   Quoted Prices in       Quoted Prices in    
   Active Markets for Significant Other Significant   Active Markets for Significant Other Significant
 Balance Sheet   Identical Assets/Liabilities Observable Inputs Unobservable Inputs Balance Sheet   Identical Assets/Liabilities Observable Inputs Unobservable Inputs
Description Location 12/31/2011 (Level 1) (Level 2) (Level 3) Location 12/31/2014 (Level 1) (Level 2) (Level 3)
Assets                
Derivatives designated as hedging instruments:Derivatives designated as hedging instruments:        Derivatives designated as hedging instruments:        
Interest Rate Contracts: Interest Rate Contracts:         Interest Rate Contracts:        
Fair Value Hedges Other Assets $8,972
 $
 $8,972
 $
Fair Value HedgesOther Assets $1,597
 $
 $1,597
 $
Forward Starting Swaps Other Assets 332
 
 332
 
Supplemental Executive Retirement PlanSupplemental Executive Retirement PlanOther Assets 71,426
 71,426
 
 
Supplemental Executive Retirement PlanOther Assets 104,463
 104,463
 
 
Available-for-Sale Investment SecuritiesOther Assets 1,550
 1,550
 
 
Total $81,948
 $72,976
 $8,972
 $
 $106,392
 $104,463
 $1,929
 $
                
Liabilities                
Derivatives designated as hedging instruments:Derivatives designated as hedging instruments:        Derivatives designated as hedging instruments:        
Interest Rate Contracts: Interest Rate Contracts:         Interest Rate Contracts:        
Forward Starting Swaps Forward Starting SwapsOther Liabilities $32,278
 $
 $32,278
 $
Forward Starting SwapsOther Liabilities $14,104
 $
 $14,104
 $
Supplemental Executive Retirement PlanSupplemental Executive Retirement PlanOther Liabilities 71,426
 71,426
 
 
Supplemental Executive Retirement PlanOther Liabilities 104,463
 104,463
 
 
Total $103,704
 $71,426
 $32,278
 $
 $118,567
 $104,463
 $14,104
 $
                
Redeemable Noncontrolling Interests –Redeemable Noncontrolling Interests –        Redeemable Noncontrolling Interests –        
Operating Partnership/Redeemable Operating Partnership/Redeemable         Operating Partnership/Redeemable        
Limited Partners Limited PartnersMezzanine $416,404
 $
 $416,404
 $
Limited PartnersMezzanine $500,733
 $
 $500,733
 $

      Fair Value Measurements at Reporting Date Using
      Quoted Prices in    
      Active Markets for Significant Other Significant
  Balance Sheet   Identical Assets/Liabilities Observable Inputs Unobservable Inputs
Description Location 12/31/2013 (Level 1) (Level 2) (Level 3)
Assets          
Derivatives designated as hedging instruments:         
   Interest Rate Contracts:         
Forward Starting Swaps Other Assets $18,710
 $
 $18,710
 $
Supplemental Executive Retirement PlanOther Assets 83,845
 83,845
 
 
Total   $102,555
 $83,845
 $18,710
 $
           
Liabilities          
Supplemental Executive Retirement PlanOther Liabilities $83,845
 $83,845
 $
 $
Total   $83,845
 $83,845
 $
 $
           
Redeemable Noncontrolling Interests –         
   Operating Partnership/Redeemable         
      Limited PartnersMezzanine $363,144
 $
 $363,144
 $

The following tables provide a summary of the effect of fair value hedges on the Company’s accompanying Consolidated Statementsconsolidated statements of Operationsoperations and comprehensive income for the years ended December 31, 20122014, 20112013 and 2010,2012, respectively (amounts in thousands):




December 31, 2012

 
Location of Gain/(Loss) Recognized in Income
on Derivative
 
Amount of Gain/(Loss) Recognized in Income
on Derivative
   
Income Statement Location of Hedged
Item Gain/(Loss)
 
Amount of Gain/(Loss)Recognized in Income
on Hedged Item
Type of Fair Value Hedge   Hedged Item  
Derivatives designated as hedging instruments:    
      
Interest Rate Contracts:    
      
Interest Rate Swaps Interest expense $(7,448) Fixed rate debt Interest expense $7,448
Total   $(7,448)     $7,448




December 31, 2011

 
Location of Gain/(Loss) Recognized in Income
on Derivative
 
Amount of Gain/(Loss) Recognized in Income
on Derivative
   
Income Statement Location of Hedged
Item Gain/(Loss)
 
Amount of Gain/(Loss)Recognized in Income
on Hedged Item
Type of Fair Value Hedge   Hedged Item  
Derivatives designated as hedging instruments:    
      
Interest Rate Contracts:    
      
Interest Rate Swaps Interest expense $(3,549) Fixed rate debt Interest expense $3,549
Total   $(3,549)     $3,549




December 31, 2010

 
Location of Gain/(Loss) Recognized in Income
on Derivative
 
Amount of Gain/(Loss) Recognized in Income
on Derivative
   
Income Statement Location of Hedged
Item Gain/(Loss)
 
Amount of Gain/(Loss)Recognized in Income
on Hedged Item
Type of Fair Value Hedge   Hedged Item  
Derivatives designated as hedging instruments:    
      
Interest Rate Contracts:    
      
Interest Rate Swaps Interest expense $7,335
 Fixed rate debt Interest expense $(7,335)
Total   $7,335
     $(7,335)

F-43F-50



December 31, 2014 Location of Gain/(Loss) Recognized in Income on Derivative Amount of Gain/(Loss) Recognized in Income on Derivative   Income Statement Location of Hedged Item Gain/(Loss) Amount of Gain/(Loss)Recognized in Income
on Hedged Item
Type of Fair Value Hedge   Hedged Item  
Derivatives designated as hedging instruments:    
      
Interest Rate Contracts:    
      
Interest Rate Swaps Interest expense $1,597
 Fixed rate debt Interest expense $(1,597)
Total   $1,597
     $(1,597)

December 31, 2013 Location of Gain/(Loss) Recognized in Income on Derivative Amount of Gain/(Loss) Recognized in Income on Derivative   Income Statement Location of Hedged Item Gain/(Loss) Amount of Gain/(Loss)Recognized in Income
on Hedged Item
Type of Fair Value Hedge   Hedged Item  
Derivatives designated as hedging instruments:    
      
Interest Rate Contracts:    
      
Interest Rate Swaps Interest expense $(1,523) Fixed rate debt Interest expense $1,523
Total   $(1,523)     $1,523

December 31, 2012 Location of Gain/(Loss) Recognized in Income on Derivative Amount of Gain/(Loss) Recognized in Income on Derivative   Income Statement Location of Hedged Item Gain/(Loss) Amount of Gain/(Loss)Recognized in Income
on Hedged Item
Type of Fair Value Hedge   Hedged Item  
Derivatives designated as hedging instruments:    
      
Interest Rate Contracts:    
      
Interest Rate Swaps Interest expense $(7,448) Fixed rate debt Interest expense $7,448
Total   $(7,448)     $7,448

The following tables provide a summary of the effect of cash flow hedges on the Company’s accompanying Consolidated Statementsconsolidated statements of Operationsoperations and comprehensive income for the years ended December 31, 20122014, 20112013 and 2010,2012, respectively (amounts in thousands):

 Effective Portion Ineffective Portion Effective Portion Ineffective Portion
December 31, 2012 
Amount of
Gain/(Loss) Recognized in OCI
on Derivative
 
Location of Gain/(Loss)
Reclassified from Accumulated OCI
into Income
 
Amount of Gain/(Loss)
Reclassified from Accumulated OCI
into Income
 
Location of
Gain/(Loss) Recognized in Income
on Derivative
 
Amount of Gain/(Loss)
Reclassified from Accumulated OCI
into Income
December 31, 2014 Amount of
Gain/(Loss) Recognized in OCI on Derivative
 Location of Gain/(Loss)
Reclassified from Accumulated OCI into Income
 Amount of Gain/(Loss)
Reclassified from Accumulated OCI into Income
 Location of
Gain/(Loss) Recognized in Income on Derivative
 Amount of Gain/(Loss)
Reclassified from Accumulated OCI into Income
Type of Cash Flow Hedge 
Amount of
Gain/(Loss) Recognized in OCI
on Derivative
 
Location of Gain/(Loss)
Reclassified from Accumulated OCI
into Income
 
Amount of Gain/(Loss)
Reclassified from Accumulated OCI
into Income
 
Location of
Gain/(Loss) Recognized in Income
on Derivative
 
Amount of Gain/(Loss)
Reclassified from Accumulated OCI
into Income
 
Derivatives designated as hedging instruments:   
    
    
Interest Rate Contracts:  
    
    
  
    
    
Forward Starting Swaps/Treasury Locks $(11,772) Interest expense $(14,678) N/A $
Forward Starting Swaps $(33,215) Interest expense $(16,868) Interest expense $91
Total $(11,772)   $(14,678)   $
 $(33,215)   $(16,868)   $91
 Effective Portion Ineffective Portion Effective Portion Ineffective Portion
December 31, 2011 
Amount of
Gain/(Loss) Recognized in OCI
on Derivative
 
Location of Gain/(Loss)
Reclassified from Accumulated
OCI
into Income
 
Amount of Gain/(Loss)
Reclassified from Accumulated
OCI
into Income
 
Location of
Gain/(Loss) Recognized in Income
on Derivative
 
Amount of Gain/(Loss)
Reclassified from Accumulated
OCI
into Income
December 31, 2013 Amount of
Gain/(Loss) Recognized in OCI on Derivative
 Location of Gain/(Loss)
Reclassified from Accumulated OCI into Income
 Amount of Gain/(Loss)
Reclassified from Accumulated OCI into Income
 Location of
Gain/(Loss) Recognized in Income on Derivative
 Amount of Gain/(Loss)
Reclassified from Accumulated OCI into Income
Type of Cash Flow Hedge 
Amount of
Gain/(Loss) Recognized in OCI
on Derivative
 
Location of Gain/(Loss)
Reclassified from Accumulated
OCI
into Income
 
Amount of Gain/(Loss)
Reclassified from Accumulated
OCI
into Income
 
Location of
Gain/(Loss) Recognized in Income
on Derivative
 
Amount of Gain/(Loss)
Reclassified from Accumulated
OCI
into Income
 
Derivatives designated as hedging instruments:           
Interest Rate Contracts:                    
Forward Starting Swaps/Treasury Locks $(145,090) Interest expense $(4,343) Interest expense $(170) $18,771
 Interest expense $(20,141) N/A $
Development Interest Rate Swaps/Caps 1,322
 Interest expense 
 N/A 
Total $(143,768)   $(4,343)   $(170) $18,771
   $(20,141)   $


F-51



 Effective Portion Ineffective Portion Effective Portion Ineffective Portion
December 31, 2010 
Amount of
Gain/(Loss) Recognized in OCI
on Derivative
 
Location of Gain/(Loss)
Reclassified from Accumulated
OCI
into Income
 
Amount of Gain/(Loss)
Reclassified from Accumulated
OCI
into Income
 
Location of
Gain/(Loss) Recognized in Income
on Derivative
 
Amount of Gain/(Loss)
Reclassified from Accumulated
OCI
into Income
December 31, 2012 Amount of
Gain/(Loss) Recognized in OCI on Derivative
 Location of Gain/(Loss)
Reclassified from Accumulated OCI into Income
 Amount of Gain/(Loss)
Reclassified from Accumulated OCI into Income
 Location of
Gain/(Loss) Recognized in Income on Derivative
 Amount of Gain/(Loss)
Reclassified from Accumulated OCI into Income
Type of Cash Flow Hedge 
Amount of
Gain/(Loss) Recognized in OCI
on Derivative
 
Location of Gain/(Loss)
Reclassified from Accumulated
OCI
into Income
 
Amount of Gain/(Loss)
Reclassified from Accumulated
OCI
into Income
 
Location of
Gain/(Loss) Recognized in Income
on Derivative
 
Amount of Gain/(Loss)
Reclassified from Accumulated
OCI
into Income
 
Derivatives designated as hedging instruments:           
Interest Rate Contracts:                    
Forward Starting Swaps/Treasury Locks $(68,149) Interest expense $(3,338) N/A $
 $(11,772) Interest expense $(14,678) N/A $
Development Interest Rate Swaps/Caps 2,255
 Interest expense 
 N/A 
Total $(65,894)   $(3,338)   $
 $(11,772)   $(14,678)   $
As of December 31, 20122014 and 20112013, there were approximately $194.7172.2 million and $197.6$155.8 million in deferred losses, net, included in accumulated other comprehensive (loss), respectively, related to derivative instruments. Based on the estimated fair values of the net derivative instruments at December 31, 20122014, the Company may recognize an estimated $18.922.0 million of accumulated other comprehensive (loss) as additional interest expense during the year ending December 31, 20132015.
In December 2011,June 2014, the Company paid approximately $153.2a net $2.0 million to settle variousseven forward starting ten-year swaps in conjunction with the issuance of $1.0 billion$750.0 million of ten-yearthirty-year fixed rate public notes. The ineffective portion of $0.2approximately $0.1 million was recorded as a decrease to interest expense and accrued interest of $5.9approximately $1.3 million were was recorded as an increase to interest expense. The remaining amount of $147.1approximately $0.8 million will be deferred as a component of accumulated other comprehensive (loss) and isrecognized as an increase to interest expense over the first nine years and ten months of the notes.

In April 2013, the Company paid approximately $44.7 million to settle three forward starting swaps in conjunction with the issuance of $500.0 million of ten-year fixed rate public notes. The accrued interest of $0.7 million was recorded as interest expense. The remaining amount of $44.0 million will be deferred as a component of accumulated other comprehensive (loss) and recognized as an increase to interest expense over the approximate term of the notes.
In July 2010,During the year ended December 31, 2013, the Company paidsold all of its investment securities, receiving proceeds of approximately $10.0$2.8 million, to settle and recorded a forward starting swap$2.1 million realized gain on sale (specific identification) which is included in conjunction with the issuance of $600.0 million of ten-year fixed rate public notes. The entire amount was deferred as a component of accumulated other comprehensive (loss) and is being recognized as an increase to interest expense over the term of the notes.
The following tables set forth the maturity, amortized cost, gross unrealized gains and losses, book/fair value and interest and other income of the various investment securities held as of December 31, 2012 and 2011, respectively (amounts in thousands):income.


F-44F-52


    Other Assets  
December 31, 2012

 Maturity 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Book/
Fair Value
 
Interest and
Other Income
Security      
Available-for-Sale Investment Securities N/A $675
 $1,539
 $
 $2,214
 $
Total   $675
 $1,539
 $
 $2,214
 $

    Other Assets  
December 31, 2011

 Maturity 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Book/
Fair Value
 
Interest and
Other Income
Security      
Available-for-Sale Investment Securities N/A $675
 $875
 $
 $1,550
 $
Total   $675
 $875
 $
 $1,550
 $

10.Earnings Per Share and Earnings Per Unit

Equity Residential
The following tables set forth the computation of net income per share – basic and net income per share – diluted for the Company (amounts in thousands except per share amounts):


F-45


Year Ended December 31,Year Ended December 31,
2012 2011 20102014 2013 2012
Numerator for net income per share – basic: 
  
  
 
  
  
Income (loss) from continuing operations$311,555
 $57,794
 $(103,108)$657,101
 $(168,174) $160,298
Allocation to Noncontrolling Interests – Operating Partnership, net(13,178) (1,912) 5,419
(24,771) 6,834
 (6,417)
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties(844) (832) 726
(2,544) 538
 (844)
Preferred distributions(10,355) (13,865) (14,368)(4,145) (4,145) (10,355)
Premium on redemption of Preferred Shares(5,152) 
 

 
 (5,152)
Income (loss) from continuing operations available to Common Shares, net of
Noncontrolling Interests
282,026
 41,185
 (111,331)625,641
 (164,947) 137,530
Discontinued operations, net of Noncontrolling Interests544,186
 838,535
 380,573
1,522
 1,991,415
 688,682
Numerator for net income per share – basic$826,212
 $879,720
 $269,242
$627,163
 $1,826,468
 $826,212
Numerator for net income per share – diluted (1):          
Income from continuing operations$311,555
 $57,794
  $657,101
   $160,298
Net (income) attributable to Noncontrolling Interests – Partially Owned Properties(844) (832)  (2,544)   (844)
Preferred distributions(10,355) (13,865)  (4,145)   (10,355)
Premium on redemption of Preferred Shares(5,152) 
  
   (5,152)
Income from continuing operations available to Common Shares295,204
 43,097
  650,412
   143,947
Discontinued operations, net569,649
 877,403
  1,582
   720,906
Numerator for net income per share – diluted (1)$864,853
 $920,500
 $269,242
$651,994
 $1,826,468
 $864,853
Denominator for net income per share – basic and diluted (1):          
Denominator for net income per share – basic302,701
 294,856
 282,888
361,181
 354,305
 302,701
Effect of dilutive securities:          
OP Units13,853
 13,206
  13,718
   13,853
Long-term compensation shares/units3,212
 4,003
  2,836
   3,212
Denominator for net income per share – diluted (1)319,766
 312,065
 282,888
377,735
 354,305
 319,766
Net income per share – basic$2.73
 $2.98
 $0.95
$1.74
 $5.16
 $2.73
Net income per share – diluted$2.70
 $2.95
 $0.95
$1.73
 $5.16
 $2.70
Net income per share – basic: 
  
  
 
  
  
Income (loss) from continuing operations available to Common Shares, net of
Noncontrolling Interests
$0.932
 $0.140
 $(0.393)$1.732
 $(0.466) $0.454
Discontinued operations, net of Noncontrolling Interests1.797
 2.844
 1.345
0.004
 5.621
 2.275
Net income per share – basic$2.729
 $2.984
 $0.952
$1.736
 $5.155
 $2.729
Net income per share – diluted (1): 
  
  
 
  
  
Income (loss) from continuing operations available to Common Shares$0.923
 $0.138
 $(0.393)$1.722
 $(0.466) $0.450
Discontinued operations, net1.782
 2.812
 1.345
0.004
 5.621
 2.255
Net income per share – diluted$2.705
 $2.950
 $0.952
$1.726
 $5.155
 $2.705
Distributions declared per Common Share outstanding$1.78
 $1.58
 $1.47

(1)
Potential common shares issuable from the assumed conversion of OP Units and the exercise/vesting of long-term compensation shares/units are automatically anti-dilutive and therefore excluded from the diluted earnings per share calculation as the Company had a loss from continuing operations for the year ended December 31, 2010.
2013.
Convertible preferred shares/units that could be converted into 0, 0 and 325,103 weighted average Common Shares for the years ended December 31, 2012, 2011 and 2010, respectively, were outstanding but were not included in the computation of diluted earnings per share because the effects would be anti-dilutive. In addition, the effect of the Common Shares that could ultimately be issued upon the conversion/exchange of the Company’s $650.0 million exchangeable senior notes ($482.5 million outstanding were redeemed on August 18, 2011) was not included in the computation of diluted earnings per share because the effects would be anti-dilutive.
For additional disclosures regarding the employee share options and restricted shares, see Notes 2 and 12.
ERP Operating Limited Partnership
The following tables set forth the computation of net income per Unit – basic and net income per Unit – diluted for the Operating Partnership (amounts in thousands except per Unit amounts):

F-46F-53




Year Ended December 31,Year Ended December 31,
2012 2011 20102014 2013 2012
Numerator for net income per Unit – basic and diluted (1): 
  
  
 
  
  
Income (loss) from continuing operations$311,555
 $57,794
 $(103,108)$657,101
 $(168,174) $160,298
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties(844) (832) 726
(2,544) 538
 (844)
Allocation to Preference Units(10,355) (13,865) (14,368)(4,145) (4,145) (10,355)
Allocation to premium on redemption of Preference Units(5,152) 
 

 
 (5,152)
Income (loss) from continuing operations available to Units295,204
 43,097
 (116,750)650,412
 (171,781) 143,947
Discontinued operations, net569,649
 877,403
 399,091
1,582
 2,073,527
 720,906
Numerator for net income per Unit – basic and diluted (1)$864,853
 $920,500
 $282,341
$651,994
 $1,901,746
 $864,853
Denominator for net income per Unit – basic and diluted (1):          
Denominator for net income per Unit – basic316,554
 308,062
 296,527
374,899
 368,038
 316,554
Effect of dilutive securities:          
Dilution for Units issuable upon assumed exercise/vesting of the Company's
long-term compensation shares/units
3,212
 4,003
  2,836
 

 3,212
Denominator for net income per Unit – diluted (1)319,766
 312,065
 296,527
377,735
 368,038
 319,766
Net income per Unit – basic$2.73
 $2.98
 $0.95
$1.74
 $5.16
 $2.73
Net income per Unit – diluted$2.70
 $2.95
 $0.95
$1.73
 $5.16
 $2.70
Net income per Unit – basic: 
  
  
 
  
  
Income (loss) from continuing operations available to Units$0.932
 $0.140
 $(0.393)$1.732
 $(0.466) $0.454
Discontinued operations, net1.797
 2.844
 1.345
0.004
 5.621
 2.275
Net income per Unit – basic$2.729
 $2.984
 $0.952
$1.736
 $5.155
 $2.729
Net income per Unit – diluted (1): 
  
  
 
  
  
Income (loss) from continuing operations available to Units$0.923
 $0.138
 $(0.393)$1.722
 $(0.466) $0.450
Discontinued operations, net1.782
 2.812
 1.345
0.004
 5.621
 2.255
Net income per Unit – diluted$2.705
 $2.950
 $0.952
$1.726
 $5.155
 $2.705
Distributions declared per Unit outstanding$1.78
 $1.58
 $1.47

(1)
Potential Units issuable from the assumed exercise/vesting of the Company's long-term compensation shares/units are automatically anti-dilutive and therefore excluded from the diluted earnings per Unit calculation as the Operating Partnership had a loss from continuing operations for the year ended December 31, 2010.
2013.
Convertible preference interests/units that could be converted into 0, 0 and 325,103 weighted average Common Shares (which would be contributed to the Operating Partnership in exchange for OP Units) for the years ended December 31, 2012, 2011 and 2010, respectively, were outstanding but were not included in the computation of diluted earnings per Unit because the effects would be anti-dilutive. In addition, the effect of the Common Shares/OP Units that could ultimately be issued upon the conversion/exchange of the Company's $650.0 million exchangeable senior notes ($482.5 million outstanding were redeemed on August 18, 2011) was not included in the computation of diluted earnings per Unit because the effects would be anti-dilutive.
For additional disclosures regarding the employee share options and restricted shares, see Notes 2 and 12.

11.Discontinued Operations

The Company has presented separately as discontinued operations in all periods the results of operations for all consolidated assets disposed of and all properties held for sale, if any.any, for properties sold in 2013 and prior years. The amounts included in discontinued operations for the year ended December 31, 2014 represent trailing activity for properties sold in 2013 and prior years. None of the properties sold during the year ended December 31, 2014 met the new criteria for reporting discontinued operations. See Note 2 for further discussion.

The components of discontinued operations are outlined below and include the results of operations for the respective periods that the Company owned such assets for properties sold in 2013 and prior years during each of the years ended December 31, 20122014, 20112013 and 20102012 (amounts in thousands).


F-47F-54



Year Ended December 31,Year Ended December 31,
2012 2011 20102014 2013 2012
REVENUES 
  
  
 
  
  
Rental income$69,619
 $202,128
 $388,480
$1,309
 $121,942
 $445,832
Total revenues69,619
 202,128
 388,480
1,309
 121,942
 445,832
          
EXPENSES (1) 
  
  
 
  
  
Property and maintenance19,575
 76,727
 143,158
(141) 36,792
 103,371
Real estate taxes and insurance6,055
 17,061
 34,148
267
 11,903
 41,208
Property management211
 266
 230

 1
 211
Depreciation20,910
 51,037
 91,934

 34,380
 124,323
General and administrative77
 54
 42
89
 85
 92
Total expenses46,828
 145,145
 269,512
215
 83,161
 269,205
          
Discontinued operating income22,791
 56,983
 118,968
1,094
 38,781
 176,627
          
Interest and other income155
 196
 848
317
 217
 156
Other expenses(120) (265) (136)
 (3) (170)
Interest (2): 
  
   
  
  
Expense incurred, net(1,381) (5,163) (17,628)
 (1,296) (3,811)
Amortization of deferred financing costs(65) (1,080) (830)
 (228) (140)
Income and other tax (expense) benefit(9) 243
 (87)(8) (449) (34)
          
Discontinued operations21,371
 50,914
 101,135
1,403
 37,022
 172,628
Net gain on sales of discontinued operations548,278
 826,489
 297,956
179
 2,036,505
 548,278
          
Discontinued operations, net$569,649
 $877,403
 $399,091
$1,582
 $2,073,527
 $720,906

(1)Includes expenses paid in the current period for properties sold or held for sale in prior periods related to the Company’s period of ownership.
(2)Includes only interest expense specific to secured mortgage notes payable for properties sold and/or held for sale.sold.
For the properties sold during 2012, the investment in real estate, net of accumulated depreciation, and the mortgage notes payable balances at December 31, 2011 were $516.0 million and $87.4 million, respectively.

11.
12.Share Incentive Plans

Any Common Shares issued pursuant to EQR's incentive equity compensation and employee share purchase plans will result in ERPOP issuing OP Units to EQR on a one-for-one basis with ERPOP receiving the net cash proceeds of such issuances.

On June 16, 2011, the shareholders of EQR approved the Company's 2011 Plan.Share Incentive Plan, as amended (the "2011 Plan"). The 2011 Plan reserved 12,980,741 Common Shares for issuance. In conjunction with the approval of the 2011 Plan, no further awards may be granted under the 2002 Share Incentive Plan. The 2011 Plan expires on June 16, 2021. As of December 31, 2012, 11,097,8812014, 8,516,934 shares were available for future issuance.

Pursuant to the 2011 Plan and the 2002 Share Incentive Plan, as restated and the Amended and Restated 1993 Share Option and Share Award Plan, as amended (collectively the “Share Incentive Plans”), officers, trustees and key employees of the Company may be granted share options to acquire Common Shares (“Options”) including non-qualified share options (“NQSOs”), incentive share options (“ISOs”) and share appreciation rights (“SARs”), or may be granted restricted or non-restricted sharesshares/units (including performance-based awards), subject to conditions and restrictions as described in the Share Incentive Plans. Options, SARs, restricted shares, restricted units and performance shares and LTIP Units (see discussion below) are sometimes collectively referred to herein as “Awards”.

The Options are generally granted at the fair market value of the Company’s Common Shares at the date of grant, vest in three equal installments over a three-yearthree-year period, are exercisable upon vesting and expire ten years from the date of grant.grant (see additional valuation discussion in Note 2). The exercise price for all Options under the Share Incentive Plans is equal to the fair market value of the underlying Common Shares at the time the Option is granted. Options exercised result in new Common Shares being issued on the open market. The 2002 Share Incentive Plan, as restated and the Amended and Restated 1993 Share Option and Share Award Plan, as amended, 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

F-48


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.


F-55



Restricted shares are generally granted at the fair market value of the Company's Common Shares at the date of grant. Restricted shares that have been awarded through December 31, 20122014 generally vest three years from the award date. In addition, the Company’s unvested restricted shareholders have the same voting rights as any other Common Share holder. During the three-year period of restriction, the Company’s unvested restricted shareholders receive quarterly dividend payments on their shares at the same rate and on the same date as any other Common Share holder. As a result, dividends paid on unvested restricted shares are included as a component of retained earnings (included in general partner's capital in the Operating Partnership's financial statements) and have not been considered in reducing net income available to Common Shares/Units in a manner similar to the Company’s preferred share/preference unit dividends for the earnings per share/Unit calculation. If employment is terminated prior to the lapsing of the restriction, the shares are generally canceled.

In December 2008, the Company’s then existing 2002 Share Incentive Plan was amended to allow for the issuance of restricted units (formerly known as long-term incentive plan units (“LTIP Units”)units) to officers of the Company as an alternative to the Company’s restricted shares. The 2011 Plan also allows for the issuance of LTIP Units. LTIP Unitsrestricted units. Restricted units are a class of partnership interests that under certain conditions, including vesting, are convertible by the holder into an equal number of OP Units, which are redeemable by the holder for Common Shares on a one-for-one basis or the cash value of such shares at the option of the Company. In connection with the grant of long-term incentive compensation for services provided during a year, officers of the Company are allowed to choose, on a one-for-one basis, between restricted shares and LTIP Units.restricted units. In January 2011 and March 2014, certain holders of restricted shares converted these shares into LTIP Units.restricted units. Similar to restricted shares, LTIP Unitsrestricted units are generally granted at the fair market value of the Company's Common Shares at the date of grant and generally vest three years from the award date. In addition, LTIP Unitrestricted unit holders receive quarterly dividend payments on their LTIP Unitsrestricted units at the same rate and on the same date as any other OP Unit holder. As a result, dividends paid on LTIP Unitsrestricted units are included as a component of Noncontrolling Interests – Operating Partnership/Limited Partners' capital and have not been considered in reducing net income available to Common Shares/Units in a manner similar to the Company’s preferred share/preference unit dividends for the earnings per share/Unit calculation. If employment is terminated prior to vesting, the LTIP Unitsrestricted units are generally canceled. An LTIP UnitA restricted unit will automatically convert to an OP Unit when the capital account of each LTIP Unitrestricted unit increases (“books-up”) to a specified target. If the capital target is not attained within ten years following the date of issuance, the LTIP Unitrestricted unit will automatically be canceled and no compensation will be payable to the holder of such canceled LTIP Unit.restricted unit.

All Trustees, with the exception of the Company's non-executive Chairman and employee Trustees, are granted options and restricted shares that vest one-yearone-year from the grant date that corresponds to the term for which he or she has been elected to serve. The non-executive Chairman's grants vest over the same term or period as all other employees.

The Company's Share Incentive Plans provide for certain benefits upon retirement. For employees hired prior to January 1, 2009, retirement generally means the termination of employment (other than for cause): (i) on or after age 62; or (ii) prior to age 62 after meeting the requirements of the Rule of 70 (described below). For employees hired after January 1, 2009, retirement generally means the termination of employment (other than for cause) after meeting the requirements of the Rule of 70. For Trustees, retirement generally means termination of service on the Board (other than for cause) on or after age 72.

The Rule of 70 is met when an employee’s years of service with the Company (which must be at least 15 years) plus his or her age (which must be at least 55 years) on the date of termination equals or exceeds 70 years. In addition, the employee must give the Company at least 6 months’ advance written notice of his or her intention to retire and sign a release upon termination of employment, releasing the Company from customary claims and agreeing to ongoing non-competition and employee non-solicitation provisions.

Under the Company's definitions of retirement, several of its executive officers, including its Chief Executive Officer, and its non-executive Chairman, are retirement eligible. The Company's non-executive Chairman is retirement eligible in 2013.

For employees hired prior to January 1, 2009 who retire at or after age 62 or for Trustees who retire at or after age 72, such employee’s or Trustee's unvested restricted shares, LTIP Unitsrestricted units and share options would immediately vest, and share options would continue to be exercisable for the balance of the applicable ten-year option period, as is provided under the Share Incentive Plans. For all other employees (those hired after January 1, 2009 and those hired before such date who choose to retire prior to age 62), upon such retirement under the Rule of 70 definition of retirement of employees, such employee’s unvested restricted shares, LTIP Unitsrestricted units and share options would continue to vest per the original vesting schedule (subject to immediate vesting upon the occurrence of a subsequent change in control of the Company or the employee’s death), and options would continue to be exercisable for the balance of the applicable ten-year option period, subject to the employee’s compliance with the non-competition and employee non-solicitation provisions. If an employee violates these provisions after such retirement, all unvested restricted shares, unvested LTIP Unitsrestricted units and unvested and vested share options at the time of the violation would be void, unless otherwise determined by the Compensation Committee of the Board of Trustees.


F-56



The following tables summarize compensation information regarding the restricted shares, LTIP Units,restricted units, share options and Employee Share Purchase Plan (“ESPP”) for the three years ended December 31, 20122014, 20112013 and 20102012 (amounts in thousands):

F-49


Year Ended December 31, 2012Year Ended December 31, 2014
Compensation
Expense
 
Compensation
Capitalized
 
Compensation
Equity
 
Dividends
Incurred
Compensation
Expense
 
Compensation
Capitalized
 
Compensation
Equity
 
Dividends
Incurred
Restricted shares$8,014
 $922
 $8,936
 $949
$9,244
 $660
 $9,904
 $1,012
LTIP Units5,004
 303
 5,307
 234
Restricted units11,049
 920
 11,969
 1,248
Share options10,970
 782
 11,752
 
6,453
 896
 7,349
 
ESPP discount844
 121
 965
 
797
 62
 859
 
Total$24,832
 $2,128
 $26,960
 $1,183
$27,543
 $2,538
 $30,081
 $2,260

Year Ended December 31, 2011Year Ended December 31, 2013
Compensation
Expense
 
Compensation
Capitalized
 
Compensation
Equity
 
Dividends
Incurred
Compensation
Expense
 
Compensation
Capitalized
 
Compensation
Equity
 
Dividends
Incurred
Restricted shares$8,041
 $1,061
 $9,102
 $1,121
$12,185
 $1,079
 $13,264
 $967
LTIP Units3,344
 297
 3,641
 199
Restricted units13,108
 501
 13,609
 520
Share options8,711
 834
 9,545
 
9,569
 945
 10,514
 
ESPP discount1,081
 113
 1,194
 
612
 20
 632
 
Total$21,177
 $2,305
 $23,482
 $1,320
$35,474
 $2,545
 $38,019
 $1,487

Year Ended December 31, 2010Year Ended December 31, 2012
Compensation
Expense
 
Compensation
Capitalized
 
Compensation
Equity
 
Dividends
Incurred
Compensation
Expense
 
Compensation
Capitalized
 
Compensation
Equity
 
Dividends
Incurred
Restricted shares$8,603
 $1,178
 $9,781
 $1,334
$8,014
 $922
 $8,936
 $949
LTIP Units2,334
 190
 2,524
 138
Restricted units5,004
 303
 5,307
 234
Share options6,707
 714
 7,421
 
10,970
 782
 11,752
 
ESPP discount1,231
 59
 1,290
 
844
 121
 965
 
Total$18,875
 $2,141
 $21,016
 $1,472
$24,832
 $2,128
 $26,960
 $1,183
Compensation expense is generally recognized for Awards as follows:

Restricted shares, LTIP Unitsrestricted units and share options – Straight-line method over the vesting period of the options or shares regardless of cliff or ratable vesting distinctions.
ESPP discount – Immediately upon the purchase of common shares each quarter.
The Company accelerates the recognition of compensation expense for all Awards for those individuals approaching or meeting the retirement age criteria discussed above. The total compensation expense related to Awards not yet vested at December 31, 20122014 is $18.6$13.5 million, (excluding the accelerated expenses for individuals approaching or meeting the retirement age criteria discussed above), which is expected to be recognized over a weighted average term of 2.121.31 years.

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

The table below summarizes the Award activity of the Share Incentive Plans for the three years ended December 31, 2012, 20112014, 2013 and 2010:2012:

F-50F-57



Common
Shares Subject
to Options
 
Weighted
Average
Exercise Price
per Option
 
Restricted
Shares
 
Weighted
Average Fair
Value per
Restricted Share
 
LTIP
Units
 
Weighted
Average Fair
Value per
LTIP Unit
Common
Shares Subject
to Options
 
Weighted
Average
Exercise Price
per Option
 
Restricted
Shares
 
Weighted
Average Fair
Value per
Restricted Share
 Restricted
Units
 Weighted
Average Fair
Value per
Restricted Unit
Balance at December 31, 200911,349,750
 
$32.03
 954,366
 
$37.10
 154,616
 
$21.11
Awards granted (1)1,436,115
 
$33.59
 270,805
 
$34.85
 94,096
 
$32.97
Awards exercised/vested (2) (3)(2,506,645) 
$28.68
 (278,183) 
$52.25
 
 
Awards forfeited(76,275) 
$29.43
 (35,038) 
$30.84
 (1,204) 
$21.11
Awards expired(96,457) 
$42.69
 
 
 
 
Balance at December 31, 201010,106,488
 
$33.00
 911,950
 
$32.05
 247,508
 
$25.62
Awards granted (1)1,491,311
 
$53.70
 170,588
 
$53.99
 223,452
 
$46.64
Awards exercised/vested (2) (3) (4)(2,945,950) 
$32.27
 (258,068) 
$38.32
 (101,988) 
$38.57
Awards forfeited(41,559) 
$35.14
 (126,960) 
$37.19
 (1,352) 
$27.79
Awards expired(16,270) 
$44.13
 
 
 
 
Balance at December 31, 20118,594,020
 
$36.81
 697,510
 
$34.17
 367,620
 
$34.80
8,594,020
 
$36.81
 697,510
 
$34.17
 367,620
 
$34.80
Awards granted (1)1,164,484
 
$60.22
 140,980
 
$60.20
 70,235
 
$57.24
1,164,484
 
$60.22
 140,980
 
$60.20
 70,235
 
$57.24
Awards exercised/vested (2) (3) (4)(1,608,425) 
$30.87
 (300,809) 
$23.79
 (152,821) 
$21.11
(1,608,425) 
$30.87
 (300,809) 
$23.79
 (152,821) 
$21.11
Awards forfeited(23,795) 
$51.55
 (12,728) 
$46.25
 
 
(23,795) 
$51.55
 (12,728) 
$46.25
 
 
Awards expired(11,029) 
$35.53
 
 
 
 
(11,029) 
$35.53
 
 
 
 
Balance at December 31, 20128,115,255
 
$41.31
 524,953
 
$46.81
 285,034
 
$48.41
8,115,255
 
$41.31
 524,953
 
$46.81
 285,034
 
$48.41
Awards granted (1)1,006,444
 
$55.07
 246,731
 
$55.37
 281,931
 
$52.73
Awards exercised/vested (2) (3) (4)(586,017) 
$29.34
 (253,816) 
$36.81
 (93,335) 
$32.97
Awards forfeited(47,819) 
$56.16
 (17,634) 
$55.74
 (2,374) 
$56.72
Awards expired(17,331) 
$47.51
 
 
 
 
Balance at December 31, 20138,470,532
 
$43.67
 500,234
 
$55.79
 471,256
 
$55.67
Awards granted (1)667,877
 
$56.72
 176,457
 
$56.56
 201,507
 
$53.82
Awards exercised/vested (2) (3) (4)(2,086,380) 
$39.34
 (175,344) 
$53.44
 (60,294) 
$53.71
Awards forfeited(19,022) 
$56.32
 (6,735) 
$56.57
 (667) 
$52.08
Awards expired(2,387) 
$55.24
 
 
 
 
Conversion of restricted shares
to restricted units

 
 (12,146) 
 12,146
 
Balance at December 31, 20147,030,620
 
$46.16
 482,466
 
$56.89
 623,948
 
$53.38

(1)
The weighted average grant date fair value for Options granted during the years ended December 31, 20122014, 20112013 and 20102012 was $8.559.21 per share, $8.187.97 per share and $6.188.55 per share, respectively.
(2)
The aggregate intrinsic value of options exercised during the years ended December 31, 20122014, 20112013 and 20102012 was $46.750.8 million, $74.816.7 million and $39.646.7 million, respectively. These values were calculated as the difference between the strike price of the underlying awards and the per share price at which each respective award was exercised.
(3)
The fair value of restricted shares vested during the years ended December 31, 20122014, 20112013 and 20102012 was $18.010.2 million, $14.013.9 million  and $9.118.0 million, respectively.
(4)
The fair value of LTIP Unitsrestricted units vested during the yearyears ended December 31, 20122014, 2013 and 20112012 was $9.13.2 million, $5.1 million and $5.5$9.1 million,, respectively.
The following table summarizes information regarding options outstanding and exercisable at December 31, 20122014:

 Options Outstanding (1) Options Exercisable (2) Options Outstanding (1) Options Exercisable (2)
Range of Exercise Prices Options 
Weighted
Average
Remaining
Contractual Life in Years
 
Weighted
Average
Exercise Price
 Options 
Weighted
Average
Exercise Price
 Options 
Weighted
Average
Remaining
Contractual Life in Years
 
Weighted
Average
Exercise Price
 Options 
Weighted
Average
Exercise Price
$18.70 to $24.93 1,516,051
 5.20 
$23.14
 1,516,051
 
$23.14
 988,826
 4.09 
$23.07
 988,826
 
$23.07
$24.94 to $31.16 408,342
 1.07 
$29.21
 408,342
 
$29.21
$31.17 to $37.39 1,559,825
 5.50 
$32.59
 1,128,606
 
$32.45
 1,091,358
 3.61 
$32.61
 1,091,358
 
$32.61
$37.40 to $43.62 1,389,121
 4.20 
$40.46
 1,389,121
 
$40.46
 702,568
 2.36 
$40.12
 702,568
 
$40.12
$43.63 to $49.86 61,187
 7.55 
$48.41
 3,992
 
$45.33
 24,628
 5.83 
$48.63
 24,628
 
$48.63
$49.87 to $56.09 1,983,188
 7.07 
$53.52
 891,250
 
$53.58
 2,343,836
 6.21 
$53.93
 1,387,110
 
$53.85
$56.10 to $62.32 1,197,541
 9.08 
$60.18
 48,545
 
$59.33
 1,879,404
 7.87 
$58.72
 817,294
 
$59.84
$18.70 to $62.32 8,115,255
 5.92 
$41.31
 5,385,907
 
$35.40
 7,030,620
 5.57 
$46.16
 5,011,784
 
$42.18
Vested and expected to vest
as of December 31, 2012
 7,801,412
 5.82 
$40.66
  
  
Vested and expected to vest
as of December 31, 2014
 6,590,486
 5.34 
$45.50
  
  

(1)
The aggregate intrinsic value of options outstanding that are vested and expected to vest as of December 31, 20122014 is $128.4180.5 million.
(2)
The aggregate intrinsic value and weighted average remaining contractual life in years of options exercisable as of December 31, 20122014 is $114.7148.7 million and 4.6 years, respectively.
Note: The aggregate intrinsic values in Notes (1) and (2) above were both calculated as the excess, if any, between the Company’s closing share price of $56.6771.84 per share on December 31, 20122014 and the strike price of the underlying awards.

F-51F-58



As of December 31, 20112013 and 20102012, 5,415,5506,046,489 Options (with a weighted average exercise price of $34.6438.76) and 6,786,6515,385,907 Options (with a weighted average exercise price of $34.8935.40) were exercisable, respectively.

13.Employee Plans
The Company established an Employee Share Purchase Plan to provide each employee and trustee 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 Common Shares available under the ESPP to 7,000,000 (from 2,000,000). The Company has 3,180,8093,038,534 Common Shares available for purchase under the ESPP at December 31, 20122014. 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. The following table summarizes information regarding the Common Shares issued under the ESPP (the net proceeds noted below were contributed to ERPOP in exchange for OP Units):
Year Ended December 31,Year Ended December 31,
2012 2011 20102014 2013 2012
(Amounts in thousands except share and per share amounts)(Amounts in thousands except share and per share amounts)
Shares issued110,054 113,107 157,36368,807 73,468 110,054
Issuance price ranges$46.33 – $51.78 $44.04 – $51.19 $28.26 – $41.16$45.90 – $55.95 $44.26 – $48.17 $46.33 – $51.78
Issuance proceeds$5,399 $5,262 $5,112$3,392 $3,401 $5,399

The Company established a defined contribution plan (the “401(k) Plan”) to provide retirement benefits for employees that meet minimum employment criteria. ThePrior to 2014, the Company matchesmatched dollar for dollar up to the first 3% of eligible compensation that a participant contributed to the 401(k) Plan. Beginning January 1, 2014, the Company increased its match to 4% of eligible compensation that a participant contributes to the 401(k) Plan.Plan for all employees except those defined as highly compensated employees, whose match remains at 3%. Participants are vested in the Company’s contributions over five years. The Company recognized an expense in the amount of $5.2 million, $4.4 million, $3.74.2 million and $4.04.4 million for the years ended December 31, 20122014, 20112013 and 20102012, respectively.

The Company established a supplemental executive retirement plan (the “SERP”) to provide certain officers and trustees an opportunity to defer a portion of their eligible compensation in order to save for retirement. The SERP is restricted to investments in 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 Company and carried on the Company’s balance sheet, and the Company’s Common Shares held in the SERP are accounted for as a reduction to paid in capital (included in general partner's capital in the Operating Partnership's financial statements).

14.Distribution Reinvestment and Share Purchase Plan
On December 16, 2008,November 18, 2011, the Company filed with the SEC a Form S-3 Registration Statement to register 5,000,0004,850,000 Common Shares pursuant to a Distribution Reinvestment and Share Purchase Plan (the "DRIP Plan""2011 DRIP")., which included the remaining shares available for issuance under a 2008 registration, which terminated as of such date. The registration statement was automatically declared effective the same day and was to expire at the earlier of the date on which all 5,000,0004,850,000 shares hadhave been issued or December 16, 2011. On November 18, 2011,2014. On September 30, 2014, the Company filed with the SEC a Form S-3 Registration Statement to register 4,850,0004,790,000 Common Shares under the DRIPan amended Distribution Reinvestment Plan (the "2014 DRIP"), which included the remaining shares available for issuance under the 2008 registration,2011 DRIP, which terminated as of such date. The registration statement was automatically declared effective the same day and expires at the earlier of the date on whichwill expire when all 4,850,0004,790,000 shares have been issued or November 18, 2014.issued. The Company has 4,833,7634,786,788 Common Shares available for issuance under the 2014 DRIP Plan at December 31, 2012.2014.

The 2014 DRIP Plan provides holders of record and beneficial owners of Common Shares and Preferred Shares with a simple and convenient method of investingreinvesting cash dividends/distributions in additional Common Shares (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”).Shares. Common Shares purchased under the 2014 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’participants' funds. The net proceeds from any Common Share issuances are contributed to ERPOP in exchange for OP Units.


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15.Transactions with Related Parties
Pursuant to the terms of the partnership agreement for the Operating Partnership, ERPOP is required to reimburse EQR

F-52


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 and comprehensive income as general and administrative expenses.

The Company leases its corporate headquarters from an entity controlled by EQR’s Chairman of the Board of Trustees. The lease terminates on January 31, 2022. Amounts incurred for such office space for the years ended December 31, 20122014, 20112013 and 20102012, respectively, were approximately $1.32.5 million, $2.21.7 million and $2.71.3 million. The Company believes these amounts equal market rates for such rental space.

16.Commitments and Contingencies

The Company, as an owner of real estate, is subject to various Federal, state and local environmental laws. Compliance by the Company with existing laws has not had a material adverse effect on the Company. However, the Company 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 Company is party to a housing discrimination lawsuit brought by a non-profit civil rights organization in April 2006 in the U.S. District Court for the District of Maryland. The suit alleges that the Company designed and built approximately 300 of its properties in violation of the accessibility requirements of the Fair Housing Act and Americans With Disabilities Act. The suit seeks actual and punitive damages, injunctive relief (including modification of non-compliant properties), costs and attorneys' fees. The Company believes it has a number of viable defenses, including that a majority of the named properties were completed before the operative dates of the statutes in question and/or were not designed or built by the Company. Accordingly, the Company is defending the suit vigorously. Due to the pendency of the Company's defenses and the uncertainty of many other critical factual and legal issues, it is not possible to determine or predict the outcome of the suit or a possible loss or a range of loss, and no amounts have been accrued at December 31, 20122014. While no assurances can be given, the Company does not believe that the suit, if adversely determined, would have a material adverse effect on the Company.

The Company has established a reserve related to various litigation matters associated with its Massachusetts properties and periodically assesses the adequacy of the reserve and makes adjustments as necessary. During the year ended December 31, 2014, the Company recorded additional reserves relating to these matters of approximately $4.0 million, resulting in total reserves of approximately $6.0 million at December 31, 2014. While no assurances can be given, the Company does not believe that the ultimate resolution of these litigation matters, if adversely determined, would have a material adverse effect on the Company.

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

As of December 31, 20122014, the Company has six15 consolidated projects (including 400Prism at Park Avenue South in New York City, which the Company is jointly developing with Toll Brothers – see further discussionas discussed below) totaling 1,5364,917 apartment units in various stages of development with commitments to fund of approximately $406.0 million$1.2 billion and estimated completion dates ranging through JuneSeptember 30, 2015,2017, as well as other completed development projects that are in various stages of lease up or are stabilized. FiveSome of thesethe projects under development are being developed solely by the Company, and one iswhile others are being co-developed with avarious third party development partner.partners. The development venture agreements with these partners are primarily deal-specific, with differing terms regarding profit-sharing, equity contributions, returns on investment, buy-sell agreements and other customary provisions. The Company is the "general" or "managing" partner of the development ventures.

As of December 31, 20122014, the Company has twoone completed unconsolidated development project that is currently in lease up as well as one other completed development project that is stabilized. Both projects totaling 945 apartment units underwere co-developed with the same third party development partner in different ventures. The development venture agreements with estimated completion dates ranging through December 31, 2013.this partner are primarily deal-specific regarding profit-sharing, equity contributions, returns on investment, buy-sell agreements and other customary provisions. The Company currently has no further funding obligations related to these projects. While the Company is the managing member of both of the joint ventures, iswas responsible for constructing both of the projects and has given certain construction cost overrun guarantees, all major decisions are made jointly, the large majority of funding is provided by the partner and thejoint venture partner has significant participating rights and has active involvement in and oversight of the ongoing projects. The buy-sell arrangements contain provisions that provide the right, but not the obligation, for the Company to acquire the partner'spartner’s interests or sell its interests at any time following the occurrence of certain pre-defined events (including at stabilization) described in the development venture agreements.

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In December 2011, the Company and Toll Brothers (NYSE: TOL) jointly acquired a vacant land parcel at 400 Park Avenue South in New York City. The Company's and Toll Brothers' allocated portions of the purchase price were approximately $76.1$76.1 million and $57.9$57.9 million,, respectively. The Company is the managing member and Toll Brothers does not have substantive kick-out or participating rights. Until the core and shell of the building is complete, the building and land will be owned jointly and are required to be consolidated on the Company's balance sheet. Thereafter, the Company will solely own and control the rental portion of the building (floors 2-22) and Toll Brothers will solely own and control the for sale portion of the building (floors 23-40). Once the core and shell are complete, the Toll Brothers' portion of the property will be deconsolidated from the Company's balance sheet. The acquisition was financed through contributions by the Company and Toll Brothers of approximately $102.5$102.5 million and $75.7$75.7 million,, respectively, which included the land purchase noted above, restricted deposits and taxes and fees. As of December 31, 2012,2014, the Company's and Toll Brothers' consolidated contributions to the joint venture were approximately $203.5$336.9 million,, of which Toll Brothers' noncontrolling interest balance totaled $84.0 million.$117.4 million.

During the years ended December 31, 2012, 20112014, 2013 and 2010,2012, total operating lease payments expensed for office space, including a portion of real estate taxes, insurance, repairs and utilities, and including rent due under four13 ground leases, aggregated $8.1$14.7 million,, $7.1 $13.2 million and $7.6$8.1 million,, respectively.

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The Company has entered into a retirement benefits agreement with its Chairman of the Board of Trustees and deferred compensation agreements with its Vice Chairman and two former chief executive officers.officers (one of which was fully paid out in January 2013). During the years ended December 31, 2012, 20112014, 2013 and 2010,2012, the Company recognized compensation expense of $1.0$0.5 million,, $1.0 $0.5 million and $0.9$1.0 million,, respectively, related to these agreements.

The following table summarizes the Company’s contractual obligations for minimum rent payments under operating leases and deferred compensation for the next five years and thereafter as of December 31, 20122014:
Payments Due by Year (in thousands)
(Payments)/Receipts Due by Year (in thousands)(Payments)/Receipts Due by Year (in thousands)
 2013 2014 2015 2016 2017 Thereafter Total 2015 2016 2017 2018 2019 Thereafter Total
Operating Leases:  
  
  
  
  
  
  
  
  
  
  
    
  
Minimum Rent Payments (a) $7,462
 $8,862
 $9,501
 $9,462
 $9,415
 $691,304
 $736,006
 $(15,268) $(15,385) $(15,318) $(15,298) $(15,224) $(860,071) $(936,564)
Minimum Rent Receipts (b) 65,087
 58,860
 53,448
 43,987
 37,545
 192,455
 451,382
Other Long-Term Liabilities:  
  
  
  
  
  
  
  
  
  
  
    
  
Deferred Compensation (b) 1,179
 1,691
 1,691
 1,691
 1,692
 6,529
 14,473
Deferred Compensation (c) (1,382) (1,714) (1,714) (1,714) (1,120) (5,149) (12,793)

(a)
Minimum basic rent due for various office space the Company leases and fixed base rent due on ground leases for five14 properties/parcels.
(b)Minimum basic rent receipts due for various retail/commercial space where the Company is the lessor.
(c)Estimated payments to EQR'sthe Company's Chairman, Vice Chairman and twoone former CEO’sCEO based on actual and planned retirement dates.

17.Reportable Segments
Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses and about which discrete financial information is available that is evaluated regularly by the chief operating decision maker. The chief operating decision maker decides how resources are allocated and assesses performance on a recurring basis at least quarterly.

The Company’s primary business is the acquisition, development and management of multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents. The chief operating decision maker evaluates the Company's operating performance geographically by market and both on a same store and non-same store basis. The Company’s operating segments (geographic markets)located in its core markets represent its reportable segments (with the aggregation of Los Angeles, Orange County and San Diego into the Southern California reportable segment). The Company's operating segments located in its non-core markets that are not material have also been aggregated into four reportable segments based uponin the geographic region in which they are located.tables presented below.

The Company’s fee and asset management and development (including its partially owned properties) activities are other business activities that do not constitute an operating segment and as such, have been aggregated in the "Other" category in the tables presented below.

All revenues are from external customers and there is no customer who contributed 10% or more of the Company’s total revenues during the three years ended December 31, 2012, 20112014, 2013 or 2010.2012.


F-61



The primary financial measure for the Company’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 consolidated statements of operations)operations and comprehensive income). The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company’s apartment communities. Current year NOI is compared to prior year NOI and current year budgeted NOI as a measure of financial performance. The following tables present NOI for each segment from our rental real estate specific to continuing operations for the years ended December 31, 20122014, 20112013 and 20102012, respectively, as well as total assets and capital expenditures at December 31, 20122014 and 20112013, respectively (amounts in thousands):


F-54


 Year Ended December 31, 2012
 Northeast Northwest Southeast Southwest Other (3) Total
Rental income: 
  
  
  
  
  
Same store (1)$708,009
 $386,813
 $332,185
 $441,911
 $
 $1,868,918
Non-same store/other (2) (3)110,060
 54,414
 19,853
 60,962
 (65) 245,224
Total rental income818,069
 441,227
 352,038
 502,873
 (65) 2,114,142
Operating expenses: 
  
  
  
  
  
Same store (1)251,538
 127,213
 127,279
 143,884
 
 649,914
Non-same store/other (2) (3)33,423
 24,755
 7,550
 20,837
 3,285
 89,850
Total operating expenses284,961
 151,968
 134,829
 164,721
 3,285
 739,764
NOI: 
  
  
  
  
  
Same store (1)456,471
 259,600
 204,906
 298,027
 
 1,219,004
Non-same store/other (2) (3)76,637
 29,659
 12,303
 40,125
 (3,350) 155,374
Total NOI$533,108
 $289,259
 $217,209
 $338,152
 $(3,350) $1,374,378
            
Total assets$6,972,992
 $2,953,700
 $2,268,805
 $3,191,403
 $1,814,100
 $17,201,000
            
Capital expenditures$58,298
 $35,650
 $27,521
 $28,505
 $2,854
 $152,828
  Year Ended December 31, 2014 Year Ended December 31, 2013 Year Ended December 31, 2012
  Rental Income Operating Expenses NOI Rental Income Operating Expenses NOI Rental Income Operating Expenses NOI
Same store (1)  
  
  
  
  
  
  
  
  
  Boston $253,032
 $80,680
 $172,352
 $244,370
 $78,249
 $166,121
 $168,063
 $54,888
 $113,175
  Denver 111,190
 30,812
 80,378
 103,124
 30,567
 72,557
 93,571
 28,204
 65,367
  New York 455,598
 171,336
 284,262
 438,366
 165,329
 273,037
 274,683
 109,667
 165,016
  San Francisco 340,251
 106,424
 233,827
 312,345
 108,218
 204,127
 159,535
 57,373
 102,162
  Seattle 156,714
 51,293
 105,421
 146,109
 49,169
 96,940
 122,267
 41,041
 81,226
  South Florida 191,729
 70,296
 121,433
 182,620
 69,475
 113,145
 177,675
 67,811
 109,864
  Southern California 420,565
 138,605
 281,960
 401,516
 137,667
 263,849
 320,749
 103,925
 216,824
  Washington DC 446,122
 143,800
 302,322
 448,520
 140,708
 307,812
 247,880
 75,580
 172,300
  Non-core 100,732
 37,451
 63,281
 97,380
 36,483
 60,897
 128,816
 48,548
 80,268
Total same store 2,475,933
 830,697
 1,645,236
 2,374,350
 815,865
 1,558,485
 1,693,239
 587,037
 1,106,202
                   
Non-same store/other (2) (3)                
  Boston 3,635
 848
 2,787
 2,728
 651
 2,077
 
 
 
  Denver 
 
 
 
 
 
 1,325
 429
 896
  New York 
 
 
 
 
 
 14,611
 5,988
 8,623
  San Francisco 
 
 
 
 
 
 7,268
 3,022
 4,246
  Seattle 13,507
 4,421
 9,086
 4,387
 1,336
 3,051
 4,747
 1,510
 3,237
  South Florida 5,475
 2,743
 2,732
 390
 810
 (420) 
 
 
  Southern California 43,118
 17,755
 25,363
 15,016
 6,846
 8,170
 3,040
 1,179
 1,861
  Washington DC 24,193
 7,936
 16,257
 13,562
 4,086
 9,476
 13,124
 3,984
 9,140
  Other (3) 39,450
 13,735
 25,715
 59,994
 34,903
 25,091
 575
 17,695
 (17,120)
Total non-same store/
other
129,378
 47,438
 81,940
 96,077
 48,632
 47,445
 44,690
 33,807
 10,883
                   
Archstone pre-
ownership (4)
 
 
 
 (92,423) (36,729) (55,694) 
 
 
Total $2,605,311
 $878,135
 $1,727,176
 $2,378,004
 $827,768
 $1,550,236
 $1,737,929
 $620,844
 $1,117,085

(1)
For the years ended December 31, 2014 and 2013, same store primarily includes all properties acquired or completed and stabilized prior to January 1, 2013, less properties subsequently sold, which represented 97,911 apartment units. Also includes 18,465 stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company. For the year ended December 31, 2012, same store primarily includes all properties acquired or completed and stabilized prior to January 1, 2012, less properties subsequently sold, which represented 80,247 apartment units.
(2)
For the years ended December 31, 2014 and 2013, non-same store primarily includes properties acquired after January 1, 2013, plus any properties in lease-up and not stabilized as of January 1, 2013, but excludes 18,465 stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company. For the year December 31, 2012, non-same store primarily includes properties acquired after January 1, 2012, plus any properties in lease-up and not stabilized as of January 1, 2012.
(3)Other includes development, other corporate operations and operations prior to sale for properties sold in 2014 that do not meet the new discontinued operations criteria.
(4)Represents pro forma Archstone pre-ownership results for the period January 1, 2013 to February 27, 2013 that is included in 2013 same store results.


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  Year Ended December 31, 2014 Year Ended December 31, 2013
  Total Assets Capital Expenditures Total Assets Capital Expenditures
Same store (1)  
  
  
  
  Boston $1,923,540
 $19,575
 $1,984,745
 $17,625
  Denver 520,537
 5,863
 541,480
 5,384
  New York 4,647,269
 22,118
 4,771,001
 12,006
  San Francisco 2,718,174
 26,995
 2,793,390
 21,756
  Seattle 1,032,140
 14,570
 1,061,118
 7,940
  South Florida 1,135,552
 14,335
 1,170,931
 14,351
  Southern California 2,910,934
 26,975
 3,010,786
 19,852
  Washington DC 4,223,590
 42,927
 4,339,246
 24,506
  Non-core 408,486
 5,675
 427,108
 3,528
Total same store 19,520,222
 179,033
 20,099,805
 126,948

        
Non-same store/other (2) (3)        
  Boston 48,323
 699
 49,372
 102
  Seattle 318,488
 1,115
 182,745
 55
  South Florida 67,833
 8
 68,987
 1
  Southern California 747,438
 1,780
 411,302
 648
  Washington DC 301,902
 2,147
 301,623
 439
  Other (3) 1,946,408
 1,175
 1,720,711
 7,623
Total non-same store/other 3,430,392
 6,924
 2,734,740
 8,868
Total $22,950,614
 $185,957
 $22,834,545
 $135,816

(1)
Same store primarily includes all properties acquired or completed and stabilized prior to January 1, 20112013, less properties subsequently sold, which represented 98,57797,911 apartment units. Also includes 18,465 stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company.
(2)
Non-same store primarily includes properties acquired after January 1, 20112013, plus any properties in lease-up and not stabilized as of January 1, 20112013., but excludes 18,465 stabilized apartment units acquired in the Archstone Acquisition that are owned and managed by the Company.
(3)
Other includes development, and other corporate operations.operations and capital expenditures for properties sold.

 Year Ended December 31, 2011
 Northeast Northwest Southeast Southwest Other (3) Total
Rental income: 
  
  
  
  
  
Same store (1)$671,633
 $356,822
 $317,205
 $425,789
 $
 $1,771,449
Non-same store/other (2) (3)51,566
 9,900
 14,488
 30,539
 (3,477) 103,016
Total rental income723,199
 366,722
 331,693
 456,328
 (3,477) 1,874,465
Operating expenses: 
  
  
  
  
  
Same store (1)245,166
 125,008
 123,720
 144,777
 
 638,671
Non-same store/other (2) (3)14,101
 3,946
 5,165
 12,144
 7,326
 42,682
Total operating expenses259,267
 128,954
 128,885
 156,921
 7,326
 681,353
NOI: 
  
  
  
  
  
Same store (1)426,467
 231,814
 193,485
 281,012
 
 1,132,778
Non-same store/other (2) (3)37,465
 5,954
 9,323
 18,395
 (10,803) 60,334
Total NOI$463,932
 $237,768
 $202,808
 $299,407
 $(10,803) $1,193,112
            
Total assets$6,550,979
 $2,816,078
 $2,340,902
 $3,238,164
 $1,713,180
 $16,659,303
            
Capital expenditures$51,203
 $32,522
 $24,813
 $27,792
 $8,122
 $144,452

(1)
Same store primarily includes all properties acquired or completed and stabilized prior to January 1, 2011, less properties subsequently sold, which represented 98,577 apartment units.
(2)Non-same store primarily includes properties acquired after January 1, 2011, plus any properties in lease-up and not stabilized as of January 1, 2011.
(3)
Other includes development, condominium conversion overhead of $0.4 million and other corporate operations.

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 Year Ended December 31, 2010
 Northeast Northwest Southeast Southwest Other (3) Total
Rental income: 
  
  
  
  
  
Same store (1)$553,561
 $322,427
 $342,080
 $412,414
 $
 $1,630,482
Non-same store/other (2) (3)95,493
 18,825
 9,009
 13,587
 (3,604) 133,310
Properties sold in 2012 (4)
 
 
 
 (98,559) (98,559)
Total rental income649,054
 341,252
 351,089
 426,001
 (102,163) 1,665,233
Operating expenses: 
  
  
  
  
  
Same store (1)207,131
 119,797
 139,550
 147,732
 
 614,210
Non-same store/other (2) (3)48,119
 8,300
 3,729
 7,198
 12,230
 79,576
Properties sold in 2012 (4)
 
 
 
 (39,015) (39,015)
Total operating expenses255,250
 128,097
 143,279
 154,930
 (26,785) 654,771
NOI: 
  
  
  
  
  
Same store (1)346,430
 202,630
 202,530
 264,682
 
 1,016,272
Non-same store/other (2) (3)47,374
 10,525
 5,280
 6,389
 (15,834) 53,734
Properties sold in 2012 (4)
 
 
 
 (59,544) (59,544)
Total NOI$393,804
 $213,155
 $207,810
 $271,071
 $(75,378) $1,010,462

(1)
Same store primarily includes all properties acquired or completed and stabilized prior to January 1, 2010, less properties subsequently sold, which represented 101,312 apartment units.
(2)
Non-same store primarily includes properties acquired after January 1, 2010, plus any properties in lease-up and not stabilized as of January 1, 2010.
(3)
Other includes development, condominium conversion overhead of $0.6 million and other corporate operations.
(4)Reflects discontinued operations for properties sold during 2012.
Note: MarketsMarkets/Metro Areas included in the above geographicSouthern California and Non-core segments are as follows:
(a) NortheastSouthern California Los Angeles, Orange County and San Diego.
(b) Non-core – Inland Empire, CA, New England (excluding Boston), Boston, New York Metro, DC Northern Virginia and Suburban Maryland.
(b) Northwest – Denver, San Francisco Bay Area and Seattle/Tacoma.
(c) Southeast – Atlanta, Jacksonville, Orlando and South Florida.
(d) Southwest – Inland Empire, Los Angeles, Orange County, Phoenix and San Diego.Phoenix.

The following table presents a reconciliation of NOI from our rental real estate specific to continuing operations for the years ended December 31, 20122014, 20112013 and 20102012, respectively (amounts in thousands):

Year Ended December 31, Year Ended December 31,
2012 2011 2010 2014 2013 2012
Rental income$2,114,142
 $1,874,465
 $1,665,233
 $2,605,311
 $2,378,004
 $1,737,929
Property and maintenance expense(415,986) (387,968) (374,135) (473,098) (449,427) (332,219)
Real estate taxes and insurance expense(241,876) (211,518) (200,779) (325,401) (293,999) (206,723)
Property management expense(81,902) (81,867) (79,857) (79,636) (84,342) (81,902)
Total operating expenses(739,764) (681,353) (654,771) (878,135) (827,768) (620,844)
Net operating income$1,374,378
 $1,193,112
 $1,010,462
 $1,727,176
 $1,550,236
 $1,117,085


F-63



18.Subsequent Events/Other
Subsequent Events
Subsequent to December 31, 20122014, the Company:
Sold 16three properties consisting of 4,798550 apartment units for $145.4 million;
Repaid $779.761.5 million; in mortgage loans;
Entered into an agreement to sell a portfolio of assets including 8,010 units to a joint venture of Greystar and Goldman Sachs for $1.5 billion, of which the Company has sold ten properties, consisting of 2,911 apartment units for $557.850.0 million that are includedof forward starting swaps to hedge changes in the bullet above;interest rates related to future secured or unsecured debt issuances; and
Terminated itsRepurchased and retired $2.5 billion196,400 bridge loan commitment in connection with the execution of the new revolving credit

F-56


facility and term loan facility discussed below;
Replaced its existing $1.75 billion facilitySeries K Preferred Shares with a newpar value of $2.5 billion9.82 million unsecured revolving credit facility maturing April 1, 2018, with an interest rate on advances under the facilityfor total cash consideration of LIBOR plusapproximately $12.7 million, incurring a spread (currentlycash charge of approximately 1.05%$2.8 million) and an annual facility fee (currently 15 basis points), which are dependentwill be recorded as a premium on the credit ratingredemption of preferred shares.
On February 2, 2015, the Company's long-term debt. The Company hasOperating Partnership entered into an unsecured commercial paper note program in the abilityUnited States. Under the terms of this program, the Operating Partnership may issue, from time to increase available borrowings by an additionaltime, unsecured commercial paper notes up to a maximum aggregate outstanding of $500.0 million by adding additional banks to. The notes will be sold under customary terms in the facility or obtaining the agreement of existing banks to increase their commitments;United States commercial paper note market and
Entered into a new senior unsecured $750.0 million delayed draw term loan facility which is currently undrawn and may be drawn anytime on or before July 11, 2013. If the Company elects to draw on this facility, the full amount will rank pari passu with all of the principal will be funded in a single borrowing and the maturity date will be January 11, 2015, subject to a one-year extension option exercisable by the Company. The interest rate on advances under the new term loan facility will generally be LIBOR plus a spread (currently 1.20%), which is dependent on the credit rating of the Company's long-term debt.Operating Partnership's other unsecured senior indebtedness.
Other
During the years ended December 31, 20122014, 20112013 and 20102012, the Company incurred charges of $12.60.4 million, $9.50.3 million and $6.67.0 million, respectively, related to property acquisition costs, such as survey, title and legal fees, on the acquisition of operating properties (excluding the Archstone Transaction) and $9.03.6 million, $5.15.2 million and $5.39.0 million, respectively, related to the write-off of various pursuit and out-of-pocket costs for terminated acquisition, disposition and development transactions. These costs, totaling $21.64.0 million, $14.65.5 million and $11.916.0 million, respectively, are included in other expenses in the accompanying consolidated statements of operations.operations and comprehensive income. See Note 4 for details on the property acquisition costs related to the Archstone Transaction.

During the year ended December 31, 2014, the Company received $2.8 million for the settlement of various litigation/insurance claims, which are included in interest and other income in the accompanying consolidated statements of operations and comprehensive income.

During the year ended December 31, 2013, the Company sold a technology investment it had previously written off, receiving proceeds of $2.1 million that were recorded as a realized gain on sale and are included in interest and other income in the accompanying consolidated statements of operations and comprehensive income.

During the year ended December 31, 2012,, the Company settled a dispute with the owners of a land parcel for $4.2 million, which is included in other expenses in the accompanying consolidated statements of operations.operations and comprehensive income.

During the year ended December 31, 2011,In June 2012, the Company received $4.5$150.0 million for in Archstone-related termination fees subject to certain contingencies. Consistent with the terminationresolution of its royalty participation in LRO/Rainmaker, a revenue management system, which is included inthese contingencies, the Company recognized $70.0 million of these fees as interest and other income in July 2012 and recognized the accompanying consolidated statements of operations. During the year ended December 31, 2010, an arbitration panel awarded commissions, interest and costs in the amount of $1.7remaining $80.0 million to the listing and marketing agent related to 38 potential condo sales at one of the Company’s properties. In addition, during 2011 and 2010, the Company received $0.8 million and $5.2 million, respectively, for the settlement of litigation/insurance claims, which are included in as interest and other income in the accompanying consolidated statements of operations.October 2012.

During the year ended December 31, 2011, the Company disposed of its corporate housing business for a sales price of approximately $4.0$4.0 million,, of which the Company provided $2.0$2.0 million of seller financing to the buyer. At the time of sale, the full amount of the seller financing was reserved against and the related gain was deferred. During the yearsyear ended December 31, 2013, the Company collected $1.5 million, which represented its final reimbursement of the $2.0 million of seller financing. During the year ended December 31, 2012, and 2011, the Company collected $0.3 million and $0.2 million, respectively, on thisthe note receivable andreceivable. The Company has recognized a cumulative net gain on the sale of approximately $1.42.9 million.

On November 26, 2012, the Company and AvalonBay Communities, Inc. ("AvalonBay" or "AVB") (NYSE:AVB) entered into a contract with Lehman Brothers Holdings Inc. ("Lehman") to acquire the assets and liabilities of Archstone Enterprise LP ("Archstone"), which consists principally of a portfolio of high-quality apartment properties in major markets in the United States. Under the terms of the agreement, the Company will acquire approximately 60% of Archstone's assets and liabilities and AvalonBay will acquire approximately 40% of Archstone's assets and liabilities. The Company will acquire approximately 75 operating properties, four properties under development and several land parcels to be held for future development for approximately $8.9 billion which will consist of cash of approximately $2.0 billion, 34,468,085 Common Shares and the assumption of the Company's portion of the liabilities related to the Archstone assets (other than certain liabilities owed to Lehman and certain transaction expenses). The Company also expects to assume approximately $3 billion of consolidated Archstone debt. In addition, the Company and AvalonBay will acquire certain assets of Archstone, including Archstone’s interests in certain joint ventures, interests in a portfolio of properties located in Germany and certain development land parcels, and will become subject to approximately $179.9 million in preferred interests of Archstone unitholders through various unconsolidated joint ventures expected to be owned 60% by the Company and 40% by AvalonBay. The transaction is expected to close in the first quarter of 2013.

On December 2, 2011, the Company entered into a contract with affiliates of Bank of America and Barclays PLC to acquire, for $1.325 billion, half of their interests - an approximately 26.5% interest overall - in Archstone, a privately-held owner, operator and developer of multifamily apartment properties. On January 20, 2012, Lehman, the other owner of Archstone, acquired this 26.5% interest pursuant to a right of first offer and as a result, the Company's contract with the sellers was terminated. The Company had the exclusive right, exercisable on or before May 24, 2012, to contract to purchase the remaining 26.5% interest in

F-57F-64


Archstone owned by the same sellers for a price, determined by the Company, equal to $1.5 billion or higher. On May 24, 2012, the Company entered into a contract to purchase the remaining 26.5% interest in Archstone for $1.58 billion and Lehman exercised its right of first offer and acquired this 26.5% interest for $1.58 billion on June 6, 2012. As a result, the Company's contract was terminated and by the terms of the contract, the Company received $150.0 million in termination fees subject to certain contingencies. Consistent with the resolution of these contingencies, the Company recognized $70.0 million of these fees as interest and other income in July 2012 and recognized the remaining $80.0 million in October 2012.

During the year ended December 31, 2010, the Company recorded a $45.4 million non-cash asset impairment charge on two parcels of land held for development as a result of changes in the Company’s future plans for those parcels. The Company planned to sell one parcel in the near term and contemplated a joint venture structure for the other, necessitating this impairment charge. This charge was the result of an analysis of each parcel’s estimated fair value (determined using internally developed models that were based on market assumptions and comparable sales data) compared to its current capitalized carrying value. The market assumptions used as inputs to the Company’s fair value model include construction costs, leasing assumptions, growth rates, discount rates, terminal capitalization rates and development yields, along with the Company’s current plans for each individual asset. The Company uses data on its existing portfolio of properties and its recent acquisition and development properties, as well as similar market data from third party sources, when available, in determining these inputs. The valuation techniques used to measure fair value are consistent with how similar assets were measured in prior periods.

During the year ended December 31, 2012, the Company incurred Archstone-related expenses of approximately $14.0 million. Cumulative to date, the Company incurred Archstone-related expenses of approximately $18.4 million, of which approximately $11.0 million of this total was financing-related and $7.4 million was pursuit costs.
In 2010, a portion of the parking garage collapsed at one of the Company’s rental properties (Prospect Towers in Hackensack, New Jersey). The costs related to the collapse (both expensed and capitalized), including providing for residents’ interim needs, lost revenue and garage reconstruction, were approximately $22.8 million, before insurance reimbursements of $13.6 million. The garage has been rebuilt with costs capitalized as incurred. Other costs, like those to accommodate displaced residents, lost revenue due to a portion of the property being temporarily unavailable for occupancy and legal costs, reduced earnings as they were incurred. Generally, insurance proceeds were recorded as increases to earnings as they were received. During the year ended December 31, 2012, the Company received approximately $3.5 million in insurance proceeds (included in real estate taxes and insurance on the consolidated statements of operations), which represented its final reimbursement of the $13.6 million in cumulative insurance proceeds. During the year ended December 31, 2011, the Company received approximately $6.1 million in insurance proceeds which offset expenses of $1.7 million that were recorded relating to this loss and are included in real estate taxes and insurance on the consolidated statements of operations. During the year ended December 31, 2010, the Company received approximately $4.0 million in insurance proceeds which fully offset the impairment charge recognized to write-off the net book value of the collapsed garage and partially offset expenses of $5.5 million that were recorded relating to this loss and are included in real estate taxes and insurance on the consolidated statements of operations.

19.Quarterly Financial Data (Unaudited)

Equity Residential
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 guidance on discontinued operations and reflect dispositions and/or properties held for sale through December 31, 2012. Amounts are in thousands, except for per share amounts.

F-58


 
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
 First
Quarter
 Second
Quarter
 Third
Quarter
 Fourth
Quarter
2012 3/31 6/30 9/30 12/31
2014 3/31 6/30 9/30 12/31
Total revenues (1) $505,761
 $525,630
 $544,674
 $547,650
 $633,442
 $652,568
 $664,078
 $664,660
Operating income (1) 140,889
 158,988
 179,867
 188,214
 199,259
 228,310
 243,274
 250,532
Income from continuing operations (1) 12,654
 30,213
 128,433
 140,255
 81,680
 117,210
 231,252
 226,959
Discontinued operations, net (1) 139,513
 78,102
 107,890
 244,144
 1,052
 510
 (62) 82
Net income * 152,167
 108,315
 236,323
 384,399
 82,732
 117,720
 231,190
 227,041
Net income available to Common Shares 141,833
 99,797
 218,603
 365,979
 78,099
 111,654
 220,707
 216,703
Earnings per share – basic:  
  
  
  
        
Net income available to Common Shares $0.47
 $0.33
 $0.73
 $1.18
 $0.22
 $0.31
 $0.61
 $0.60
Weighted average Common Shares outstanding 298,805
 300,193
 301,336
 310,398
 360,470
 360,809
 361,409
 362,018
Earnings per share – diluted:  
  
  
  
        
Net income available to Common Shares $0.47
 $0.33
 $0.72
 $1.17
 $0.22
 $0.31
 $0.61
 $0.59
Weighted average Common Shares outstanding 315,230
 317,648
 318,773
 327,108
 376,384
 377,118
 377,954
 378,886

(1)
The amounts presented for the first three quarters of 2012 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 2012. Below is a reconciliation to the amounts previously reported:

  
First
Quarter
 
Second
Quarter
 
Third
Quarter
2012 3/31 6/30 9/30
Total revenues previously reported in Form 10-Q $527,659
 $543,781
 $556,144
Total revenues subsequently reclassified to discontinued operations (21,898) (18,151) (11,470)
Total revenues disclosed in Form 10-K $505,761
 $525,630
 $544,674
       
Operating income previously reported in Form 10-Q $146,152
 $165,711
 $184,127
Operating income subsequently reclassified to discontinued operations (5,263) (6,723) (4,260)
Operating income disclosed in Form 10-K $140,889
 $158,988
 $179,867
       
Income from continuing operations previously reported in Form 10-Q $17,389
 $36,558
 $132,681
Income from continuing operations subsequently reclassified to discontinued
   operations
 (4,735) (6,345) (4,248)
Income from continuing operations disclosed in Form 10-K $12,654
 $30,213
 $128,433
       
Discontinued operations, net previously reported in Form 10-Q $134,778
 $71,757
 $103,642
Discontinued operations, net from properties sold subsequent to the respective
   reporting period
 4,735
 6,345
 4,248
Discontinued operations, net disclosed in Form 10-K $139,513
 $78,102
 $107,890

F-59


  
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
2011 3/31 6/30 9/30 12/31
Total revenues (2) $445,408
 $462,881
 $482,852
 $492,350
Operating income (2) 110,042
 134,130
 142,781
 154,722
(Loss) income from continuing operations (2) (13,322) 10,336
 28,274
 32,506
Discontinued operations, net (2) 146,388
 571,417
 84,703
 74,895
Net income * 133,066
 581,753
 112,977
 107,401
Net income available to Common Shares 123,865
 552,457
 104,382
 99,016
Earnings per share – basic:  
  
  
  
Net income available to Common Shares $0.42
 $1.88
 $0.35
 $0.33
Weighted average Common Shares outstanding 292,895
 294,663
 295,831
 295,990
Earnings per share – diluted:  
  
  
  
Net income available to Common Shares $0.42
 $1.85
 $0.35
 $0.33
Weighted average Common Shares outstanding 292,895
 312,199
 312,844
 312,731

(2)
The amounts presented for the four quarters of 2011 are not equal to the same amounts previously reported in the Form 8-K filed with the SEC on June 13, 2012 (for the first and fourth quarters of 2011), the second quarter 2012 Form 10-Q filed with the SEC on August 2, 2012 (for the second quarter of 2011) and the third quarter 2012 Form 10-Q filed with the SEC on November 1, 2012 (for the third quarter of 2011) as a result of changes in discontinued operations due to additional property sales which occurred throughout 2012. Below is a reconciliation to the amounts previously reported:

  
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
2011 3/31 6/30 9/30 12/31
Total revenues previously reported in June 2012 Form 8-K/Form 10-Q $466,356
 $480,367
 $493,872
 $514,127
Total revenues subsequently reclassified to discontinued operations (20,948) (17,486) (11,020) (21,777)
Total revenues disclosed in Form 10-K $445,408
 $462,881
 $482,852
 $492,350
         
Operating income previously reported in June 2012 Form 8-K/Form
   10-Q
 $115,953
 $139,857
 $144,814
 $159,953
Operating income subsequently reclassified to discontinued
   operations
 (5,911) (5,727) (2,033) (5,231)
Operating income disclosed in Form 10-K $110,042
 $134,130
 $142,781
 $154,722
         
(Loss) income from continuing operations previously reported in
    June 2012 Form 8-K/Form 10-Q
 $(8,913) $15,126
 $30,217
 $36,771
Income from continuing operations subsequently reclassified to
    discontinued operations
 (4,409) (4,790) (1,943) (4,265)
(Loss) income from continuing operations disclosed in Form 10-K $(13,322) $10,336
 $28,274
 $32,506
         
Discontinued operations, net previously reported in June 2012
    Form 8-K/Form 10-Q
 $141,979
 $566,627
 $82,760
 $70,630
Discontinued operations, net from properties sold subsequent to the
    respective reporting period
 4,409
 4,790
 1,943
 4,265
Discontinued operations, net disclosed in Form 10-K $146,388
 $571,417
 $84,703
 $74,895
  First
Quarter
 Second
Quarter
 Third
Quarter
 Fourth
Quarter
2013 3/31 6/30 9/30 12/31
Total revenues $504,722
 $617,217
 $626,629
 $639,134
Operating income 104,254
 63,986
 120,405
 223,677
(Loss) income from continuing operations (165,339) (58,511) (13,465) 69,141
Discontinued operations, net 1,226,373
 395,243
 405,182
 46,729
Net income * 1,061,034
 336,732
 391,717
 115,870
Net income available to Common Shares 1,016,650
 323,723
 376,155
 109,940
Earnings per share – basic:        
Net income available to Common Shares $3.01
 $0.90
 $1.05
 $0.31
Weighted average Common Shares outstanding 337,532
 359,653
 359,811
 359,919
Earnings per share – diluted:        
Net income available to Common Shares $3.01
 $0.90
 $1.05
 $0.30
Weighted average Common Shares outstanding 337,532
 359,653
 359,811
 375,860
* The Company did not have any extraordinary items or cumulative effect of change in accounting principle during the years ended December 31, 20122014 and 20112013. 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-65



ERP Operating Limited Partnership

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 guidance on discontinued operations and reflect dispositions and/or properties held for sale through December 31, 2012. Amounts are in thousands, except for per Unit amounts.


F-60


  
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
2012 3/31 6/30 9/30 12/31
Total revenues (1) $505,761
 $525,630
 $544,674
 $547,650
Operating income (1) 140,889
 158,988
 179,867
 188,214
Income from continuing operations (1) 12,654
 30,213
 128,433
 140,255
Discontinued operations, net (1) 139,513
 78,102
 107,890
 244,144
Net income * 152,167
 108,315
 236,323
 384,399
Net income available to Units 148,251
 104,529
 229,099
 382,974
Earnings per Unit – basic:  
  
  
  
Net income available to Units $0.47
 $0.33
 $0.73
 $1.18
Weighted average Units outstanding 312,011
 314,255
 315,513
 324,364
Earnings per Unit – diluted:  
 

  
  
Net income available to Units $0.47
 $0.33
 $0.72
 $1.17
Weighted average Units outstanding 315,230
 317,648
 318,773
 327,108

(1)
The amounts presented for the first three quarters of 2012 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 2012. Below is a reconciliation to the amounts previously reported:

  
First
Quarter
 
Second
Quarter
 
Third
Quarter
2012 3/31 6/30 9/30
Total revenues previously reported in Form 10-Q $527,659
 $543,781
 $556,144
Total revenues subsequently reclassified to discontinued operations (21,898) (18,151) (11,470)
Total revenues disclosed in Form 10-K $505,761
 $525,630
 $544,674
       
Operating income previously reported in Form 10-Q $146,152
 $165,711
 $184,127
Operating income subsequently reclassified to discontinued operations (5,263) (6,723) (4,260)
Operating income disclosed in Form 10-K $140,889
 $158,988
 $179,867
       
Income from continuing operations previously reported in Form 10-Q $17,389
 $36,558
 $132,681
Income from continuing operations subsequently reclassified to discontinued
   operations
 (4,735) (6,345) (4,248)
Income from continuing operations disclosed in Form 10-K $12,654
 $30,213
 $128,433
       
Discontinued operations, net previously reported in Form 10-Q $134,778
 $71,757
 $103,642
Discontinued operations, net from properties sold subsequent to the respective
   reporting period
 4,735
 6,345
 4,248
Discontinued operations, net disclosed in Form 10-K $139,513
 $78,102
 $107,890
  First
Quarter
 Second
Quarter
 Third
Quarter
 Fourth
Quarter
2014 3/31 6/30 9/30 12/31
Total revenues $633,442
 $652,568
 $664,078
 $664,660
Operating income 199,259
 228,310
 243,274
 250,532
Income from continuing operations 81,680
 117,210
 231,252
 226,959
Discontinued operations, net 1,052
 510
 (62) 82
Net income * 82,732
 117,720
 231,190
 227,041
Net income available to Units 81,192
 116,096
 229,445
 225,261
Earnings per Unit – basic:  
  
  
  
Net income available to Units $0.22
 $0.31
 $0.61
 $0.60
Weighted average Units outstanding 374,201
 374,551
 375,116
 375,711
Earnings per Unit – diluted:  
    
  
Net income available to Units $0.22
 $0.31
 $0.61
 $0.59
Weighted average Units outstanding 376,384
 377,118
 377,954
 378,886

F-61


  
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
2011 3/31 6/30 9/30 12/31
Total revenues (2) $445,408
 $462,881
 $482,852
 $492,350
Operating income (2) 110,042
 134,130
 142,781
 154,722
(Loss) income from continuing operations (2) (13,322) 10,336
 28,274
 32,506
Discontinued operations, net (2) 146,388
 571,417
 84,703
 74,895
Net income * 133,066
 581,753
 112,977
 107,401
Net income available to Units 129,640
 578,215
 109,124
 103,521
Earnings per Unit – basic:  
  
  
  
Net income available to Units $0.42
 $1.88
 $0.35
 $0.33
Weighted average Units outstanding 306,248
 307,954
 308,884
 309,120
Earnings per Unit – diluted:  
  
  
  
Net income available to Units $0.42
 $1.85
 $0.35
 $0.33
Weighted average Units outstanding 306,248
 312,199
 312,844
 312,731

(2)
The amounts presented for the four quarters of 2011 are not equal to the same amounts previously reported in the Form 8-K filed with the SEC on June 13, 2012 (for the first and fourth quarters of 2011), the second quarter 2012 Form 10-Q filed with the SEC on August 2, 2012 (for the second quarter of 2011) and the third quarter 2012 Form 10-Q filed with the SEC on November 1, 2012 (for the third quarter of 2011) as a result of changes in discontinued operations due to additional property sales which occurred throughout 2012. Below is a reconciliation to the amounts previously reported:
  
First
Quarter
 
Second
Quarter
 
Third
Quarter
 
Fourth
Quarter
2011 3/31 6/30 9/30 12/31
Total revenues previously reported in June 2012 Form 8-K/Form
   10-Q
 $466,356
 $480,367
 $493,872
 $514,127
Total revenues subsequently reclassified to discontinued operations (20,948) (17,486) (11,020) (21,777)
Total revenues disclosed in Form 10-K $445,408
 $462,881
 $482,852
 $492,350
         
Operating income previously reported in June 2012 Form 8-K/Form
   10-Q
 $115,953
 $139,857
 $144,814
 $159,953
Operating income subsequently reclassified to discontinued
   operations
 (5,911) (5,727) (2,033) (5,231)
Operating income disclosed in Form 10-K $110,042
 $134,130
 $142,781
 $154,722
         
(Loss) income from continuing operations previously reported in
    June 2012 Form 8-K/Form 10-Q
 $(8,913) $15,126
 $30,217
 $36,771
Income from continuing operations subsequently reclassified to
    discontinued operations
 (4,409) (4,790) (1,943) (4,265)
(Loss) income from continuing operations disclosed in Form 10-K $(13,322) $10,336
 $28,274
 $32,506
         
Discontinued operations, net previously reported in June 2012 Form
   8-K/Form 10-Q
 $141,979
 $566,627
 $82,760
 $70,630
Discontinued operations, net from properties sold subsequent to the
    respective reporting period
 4,409
 4,790
 1,943
 4,265
Discontinued operations, net disclosed in Form 10-K $146,388
 $571,417
 $84,703
 $74,895
  First
Quarter
 Second
Quarter
 Third
Quarter
 Fourth
Quarter
2013 3/31 6/30 9/30 12/31
Total revenues $504,722
 $617,217
 $626,629
 $639,134
Operating income 104,254
 63,986
 120,405
 223,677
(Loss) income from continuing operations (165,339) (58,511) (13,465) 69,141
Discontinued operations, net 1,226,373
 395,243
 405,182
 46,729
Net income * 1,061,034
 336,732
 391,717
 115,870
Net income available to Units 1,059,973
 336,511
 390,991
 114,271
Earnings per Unit – basic:  
  
  
  
Net income available to Units $3.01
 $0.90
 $1.05
 $0.31
Weighted average Units outstanding 351,255
 373,403
 373,547
 373,643
Earnings per Unit – diluted:  
  
  
  
Net income available to Units $3.01
 $0.90
 $1.05
 $0.30
Weighted average Units outstanding 351,255
 373,403
 373,547
 375,860
* The Operating Partnership did not have any extraordinary items or cumulative effect of change in accounting principle during the years ended December 31, 20122014 and 20112013. 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-62F-66





EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation
Overall Summary
December 31, 20122014
Properties (H) Units (H) Investment in Real Estate, Gross 
Accumulated
Depreciation
 Investment in Real Estate, Net EncumbrancesProperties (H) Units (H) Investment in Real Estate, Gross 
Accumulated
Depreciation
 Investment in Real Estate, Net Encumbrances (1)
Wholly Owned Unencumbered269
 73,732
 $14,676,449,487
 $(3,266,454,538) $11,409,994,949
 $
263
 69,217
 $18,538,492,146
 $(3,650,524,741) $14,887,967,405
 $
Wholly Owned Encumbered113
 33,124
 5,716,925,544
 (1,486,115,893) 4,230,809,651
 2,392,135,994
104
 29,923
 8,113,776,123
 (1,587,799,207) 6,525,976,916
 4,726,035,749
Portfolio/Entity Encumbrances (1)
 
 
 
 
 1,305,895,707
Wholly Owned Properties382
 106,856
 20,393,375,031
 (4,752,570,431) 15,640,804,600
 3,698,031,701
367
 99,140
 26,652,268,269
 (5,238,323,948) 21,413,944,321
 4,726,035,749
                      
Partially Owned Unencumbered9
 1,639
 375,326,934
 (72,825,847) 302,501,087
 
8
 1,505
 575,092,221
 (77,534,358) 497,557,863
 
Partially Owned Encumbered10
 1,836
 239,727,289
 (86,824,773) 152,902,516
 200,337,000
11
 2,266
 448,022,434
 (116,947,029) 331,075,405
 360,479,262
Partially Owned Properties19
 3,475
 615,054,223
 (159,650,620) 455,403,603
 200,337,000
19
 3,771
 1,023,114,655
 (194,481,387) 828,633,268
 360,479,262
                      
Total Unencumbered Properties278
 75,371
 15,051,776,421
 (3,339,280,385) 11,712,496,036
 
271
 70,722
 19,113,584,367
 (3,728,059,099) 15,385,525,268
 
Total Encumbered Properties123
 34,960
 5,956,652,833
 (1,572,940,666) 4,383,712,167
 3,898,368,701
115
 32,189
 8,561,798,557
 (1,704,746,236) 6,857,052,321
 5,086,515,011
Total Consolidated Investment in Real Estate401
 110,331
 $21,008,429,254
 $(4,912,221,051) $16,096,208,203
 $3,898,368,701
386
 102,911
 $27,675,382,924
 $(5,432,805,335) $22,242,577,589
 $5,086,515,011

(1)See attached Encumbrances Reconciliation.























S-1




EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation
Encumbrances Reconciliation
December 31, 20122014
Portfolio/Entity Encumbrances 
Number of
Properties Encumbered by
 See Properties With Note: Amount  
Number of
Properties Encumbered by
 See Properties With Note: Partially Owned Encumbrances Wholly Owned Encumbrances Total Amount
EQR-Fanwell 2007 LP 6 I $212,895,707
  5 I $
 $300,000,000
 $300,000,000
EQR-Wellfan 2008 LP (R) 15 J 550,000,000
  12 J 
 550,000,000
 550,000,000
EQR-SOMBRA 2008 LP 16 K 543,000,000
 
ASN-Fannie Mae 3 5 K 24,840,581
 449,338,962
 474,179,543
Archstone Master Property Holdings LLC 13 L 
 800,000,000
 800,000,000
Portfolio/Entity Encumbrances 37   1,305,895,707
  35   24,840,581
 2,099,338,962
 2,124,179,543
Individual Property Encumbrances     2,592,472,994
      335,638,681
 2,626,696,787
 2,962,335,468
Total Encumbrances per Financial Statements     $3,898,368,701
      $360,479,262
 $4,726,035,749
 $5,086,515,011



























S-2




EQUITY RESIDENTIAL
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, 20122014, 20112013 and 20102012 are as follows:
2012 2011 20102014 2013 2012
Balance, beginning of year$20,407,946
 $19,702,371
 $18,465,144
$26,800,948
 $21,008,429
 $20,407,946
Acquisitions and development1,250,633
 1,721,895
 1,789,948
1,121,423
 9,273,492
 1,250,633
Improvements161,460
 151,476
 141,199
191,243
 139,950
 161,460
Dispositions and other(811,610) (1,167,796) (693,920)(438,231) (3,620,923) (811,610)
Balance, end of year$21,008,429
 $20,407,946
 $19,702,371
$27,675,383
 $26,800,948
 $21,008,429

The changes in accumulated depreciation for the years ended December 31, 20122014, 20112013 and 20102012 are as follows:
2012 2011 20102014 2013 2012
Balance, beginning of year$4,539,583
 $4,337,357
 $3,877,564
$4,807,709
 $4,912,221
 $4,539,583
Depreciation684,992
 663,616
 673,403
758,861
 1,013,353
 684,992
Dispositions and other(312,354) (461,390) (213,610)(133,765) (1,117,865) (312,354)
Balance, end of year$4,912,221
 $4,539,583
 $4,337,357
$5,432,805
 $4,807,709
 $4,912,221



S-3



EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation
December 31, 20122014
DescriptionDescription   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/12        Description   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/14        
Apartment NameLocation  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/12 (B)EncumbrancesLocation Retail/Commercial Space (G)  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/14 (B)Encumbrances
Wholly Owned Unencumbered:                                        
100 K StreetWashington, D.C.  (F) 
 $15,600,000
 $1,949,701
 $
 $15,600,000
 $1,949,701
 $17,549,701
 $
 $17,549,701
 $
1111 Belle Pre (fka The Madison)Alexandria, VA (F) 
 $18,937,702
 $37,877,314
 $
 $18,937,702
 $37,877,314
 $56,815,016
 $
 $56,815,016
 $
Alexandria, VA Y 2014 360
 18,937,702
 92,495,595
 17,838
 18,937,702
 92,513,433
 111,451,135
 (3,422,538) 108,028,597
 
1210 MassWashington, D.C. (G) 2004 144
 9,213,512
 36,559,189
 369,571
 9,213,512
 36,928,760
 46,142,272
 (10,194,139) 35,948,133
 
Washington, D.C. Y 2004 144
 9,213,512
 36,559,189
 610,534
 9,213,512
 37,169,723
 46,383,235
 (12,689,430) 33,693,805
 
1401 Joyce on Pentagon RowArlington, VA 2004 326
 9,780,000
 89,668,165
 342,173
 9,780,000
 90,010,338
 99,790,338
 (15,192,413) 84,597,925
 
1401 E. MadisonSeattle, WA  (F) 
 10,322,187
 1,019,404
 
 10,322,187
 1,019,404
 11,341,591
 
 11,341,591
 
1500 Mass AveWashington, D.C. (G) 1951 556
 54,638,298
 40,361,702
 8,795,872
 54,638,298
 49,157,574
 103,795,872
 (7,649,140) 96,146,732
 
Washington, D.C. Y 1951 556
 54,638,298
 40,361,702
 13,296,439
 54,638,298
 53,658,141
 108,296,439
 (14,670,887) 93,625,552
 
1660 PeachtreeAtlanta, GA 1999 355
 7,924,126
 23,533,831
 2,389,186
 7,924,126
 25,923,017
 33,847,143
 (9,230,807) 24,616,336
 
170 AmsterdamNew York, NY (F) 
 
 13,963,833
 
 
 13,963,833
 13,963,833
 
 13,963,833
 
New York, NY Y (F) 
 
 97,371,663
 
 
 97,371,663
 97,371,663
 
 97,371,663
 
175 KentBrooklyn, NY (G) 2011 113
 22,037,831
 53,962,169
 243,898
 22,037,831
 54,206,067
 76,243,898
 (4,216,749) 72,027,149
 
Brooklyn, NY Y 2011 113
 22,037,831
 53,962,169
 1,072,648
 22,037,831
 55,034,817
 77,072,648
 (8,337,345) 68,735,303
 
180 Montague (fka Brooklyn Heights)Brooklyn, NY Y 2000 193
 32,400,000
 92,675,228
 946,790
 32,400,000
 93,622,018
 126,022,018
 (10,067,159) 115,954,859
 
1800 Oak (fka Rosslyn)Arlington, VA Y 2003 314
 31,400,000
 109,005,734
 1,424,829
 31,400,000
 110,430,563
 141,830,563
 (11,550,245) 130,280,318
 
200 N Lemon StreetAnaheim, CA (F) 
 5,865,235
 1,101,382
 
 5,865,235
 1,101,382
 6,966,617
 
 6,966,617
 
Anaheim, CA  (F) 
 5,865,235
 2,802,003
 
 5,865,235
 2,802,003
 8,667,238
 
 8,667,238
 
204-206 Pine Street/1610 2nd AvenueSeattle, WA (F) 
 22,106,464
 649,599
 
 22,106,464
 649,599
 22,756,063
 
 22,756,063
 
Seattle, WA  (F) 
 22,106,465
 18,015,203
 
 22,106,465
 18,015,203
 40,121,668
 
 40,121,668
 
2201 Pershing DriveArlington, VA (G) 2012 188
 11,321,198
 44,765,635
 
 11,321,198
 44,765,635
 56,086,833
 (450,254) 55,636,579
 
Arlington, VA Y 2012 188
 11,321,198
 49,316,482
 2,018,023
 11,321,198
 51,334,505
 62,655,703
 (4,704,104) 57,951,599
 
2201 WilsonArlington, VA Y 2000 219
 21,900,000
 78,724,663
 1,155,814
 21,900,000
 79,880,477
 101,780,477
 (8,243,035) 93,537,442
 
2400 M StWashington, D.C. (G) 2006 359
 30,006,593
 114,013,785
 1,000,694
 30,006,593
 115,014,479
 145,021,072
 (29,680,867) 115,340,205
 
Washington, D.C. Y 2006 359
 30,006,593
 114,013,785
 3,170,237
 30,006,593
 117,184,022
 147,190,615
 (37,361,925) 109,828,690
 
340 Fremont (fka Rincon Hill)San Francisco, CA  (F) 
 42,000,000
 64,972,143
 
 42,000,000
 64,972,143
 106,972,143
 
 106,972,143
 
420 East 80th StreetNew York, NY 1961 155
 39,277,000
 23,026,984
 3,147,355
 39,277,000
 26,174,339
 65,451,339
 (8,443,786) 57,007,553
 
New York, NY  1961 155
 39,277,000
 23,026,984
 3,746,938
 39,277,000
 26,773,922
 66,050,922
 (10,547,486) 55,503,436
 
425 MassWashington, D.C. (G) 2009 559
 28,150,000
 138,600,000
 2,576,004
 28,150,000
 141,176,004
 169,326,004
 (17,049,061) 152,276,943
 
Washington, D.C. Y 2009 559
 28,150,000
 138,600,000
 3,341,423
 28,150,000
 141,941,423
 170,091,423
 (29,744,846) 140,346,577
 
51 UniversitySeattle, WA (G) 1918 
 3,640,000
 8,110,000
 2,701,350
 3,640,000
 10,811,350
 14,451,350
 (712,398) 13,738,952
 
443 - 459 Eye StreetWashington, D.C.  (F) 
 12,671,446
 7,660,628
 
 12,671,446
 7,660,628
 20,332,074
 
 20,332,074
 
4885 Edgemoor LaneBethesda, MD  (F) 
 
 520,879
 
 
 520,879
 520,879
 
 520,879
 
4th and HillLos Angeles, CA  (F) 
 13,131,456
 1,242,358
 
 13,131,456
 1,242,358
 14,373,814
 
 14,373,814
 
600 WashingtonNew York, NY (G) 2004 135
 32,852,000
 43,140,551
 265,843
 32,852,000
 43,406,394
 76,258,394
 (12,277,937) 63,980,457
 
New York, NY Y 2004 135
 32,852,000
 43,140,551
 394,984
 32,852,000
 43,535,535
 76,387,535
 (15,049,427) 61,338,108
 
660 Washington (fka Boston Common)Boston, MA Y 2006 420
 106,100,000
 166,311,679
 785,303
 106,100,000
 167,096,982
 273,196,982
 (18,440,877) 254,756,105
 
70 GreeneJersey City, NJ (G) 2010 480
 28,108,899
 236,965,465
 354,235
 28,108,899
 237,319,700
 265,428,599
 (24,275,876) 241,152,723
 
Jersey City, NJ Y 2010 480
 28,108,899
 236,941,402
 648,362
 28,108,899
 237,589,764
 265,698,663
 (41,945,093) 223,753,570
 
71 BroadwayNew York, NY (G) 1997 238
 22,611,600
 77,492,171
 9,556,159
 22,611,600
 87,048,330
 109,659,930
 (24,557,822) 85,102,108
 
New York, NY Y 1997 238
 22,611,600
 77,492,171
 11,705,700
 22,611,600
 89,197,871
 111,809,471
 (32,081,951) 79,727,520
 
77 BluxomeSan Francisco, CA 2007 102
 5,249,124
 18,609,876
 3,000
 5,249,124
 18,612,876
 23,862,000
 (800,641) 23,061,359
 
San Francisco, CA  2007 102
 5,249,124
 18,609,876
 91,584
 5,249,124
 18,701,460
 23,950,584
 (2,715,377) 21,235,207
 
777 SixthNew York, NY (G) 2002 294
 65,352,706
 65,747,294
 963,284
 65,352,706
 66,710,578
 132,063,284
 (14,064,378) 117,998,906
 
New York, NY Y 2002 294
 65,352,706
 65,747,294
 1,569,464
 65,352,706
 67,316,758
 132,669,464
 (19,832,874) 112,836,590
 
801 BrannanSan Francisco, CA  (F) 
 42,367,171
 10,605,097
 
 42,367,171
 10,605,097
 52,972,268
 
 52,972,268
 
88 HillsideDaly City, CA (G) 2011 95
 7,786,800
 31,587,325
 1,199,160
 7,786,800
 32,786,485
 40,573,285
 (1,729,297) 38,843,988
 
Daly City, CA Y 2011 95
 7,786,800
 31,587,325
 1,440,789
 7,786,800
 33,028,114
 40,814,914
 (4,524,720) 36,290,194
 
Abington GlenAbington, MA 1968 90
 553,105
 3,697,396
 2,451,825
 553,105
 6,149,221
 6,702,326
 (3,503,755) 3,198,571
 
Abington, MA  1968 90
 553,105
 3,697,396
 2,640,482
 553,105
 6,337,878
 6,890,983
 (4,166,796) 2,724,187
 
Acacia CreekScottsdale, AZ 1988-1994 304
 3,663,473
 21,172,386
 3,212,070
 3,663,473
 24,384,456
 28,047,929
 (13,038,183) 15,009,746
 
Agoura HillsAgoura Hills, CA  1985 178
 16,700,000
 30,103,716
 199,116
 16,700,000
 30,302,832
 47,002,832
 (4,124,770) 42,878,062
 
Alban TowersWashington, D.C.  1934 229
 18,900,000
 89,794,201
 209,270
 18,900,000
 90,003,471
 108,903,471
 (9,591,406) 99,312,065
 
Arbor TerraceSunnyvale, CA  1979 175
 9,057,300
 18,483,642
 2,555,686
 9,057,300
 21,039,328
 30,096,628
 (12,373,084) 17,723,544
 
Arboretum (MA)Canton, MA 1989 156
 4,685,900
 10,992,751
 2,314,573
 4,685,900
 13,307,324
 17,993,224
 (7,050,395) 10,942,829
 
Canton, MA  1989 156
 4,685,900
 10,992,751
 3,419,397
 4,685,900
 14,412,148
 19,098,048
 (8,193,657) 10,904,391
 
Arches, TheSunnyvale, CA 1974 410
 26,650,000
 62,850,000
 260,963
 26,650,000
 63,110,963
 89,760,963
 (6,891,107) 82,869,856
 
Arden VillasOrlando, FL 1999 336
 5,500,000
 28,600,796
 3,597,034
 5,500,000
 32,197,830
 37,697,830
 (10,746,048) 26,951,782
 
Artisan on SecondLos Angeles, CA 2008 118
 8,000,400
 36,074,600
 82,421
 8,000,400
 36,157,021
 44,157,421
 (3,559,876) 40,597,545
 
Los Angeles, CA  2008 118
 8,000,400
 36,074,600
 389,768
 8,000,400
 36,464,368
 44,464,768
 (6,430,450) 38,034,318
 
Artistry Emeryville (fka Emeryville)Emeryville, CA  1994 261
 12,300,000
 61,466,267
 1,320,923
 12,300,000
 62,787,190
 75,087,190
 (7,113,391) 67,973,799
 
Ashton, TheCorona Hills, CA 1986 492
 2,594,264
 33,042,398
 6,518,162
 2,594,264
 39,560,560
 42,154,824
 (21,978,074) 20,176,750
 
Corona Hills, CA  1986 492
 2,594,264
 33,042,397
 6,987,399
 2,594,264
 40,029,796
 42,624,060
 (24,912,155) 17,711,905
 
Auvers VillageOrlando, FL 1991 480
 3,808,823
 29,322,243
 6,786,446
 3,808,823
 36,108,689
 39,917,512
 (19,110,881) 20,806,631
 
Avenue RoyaleJacksonville, FL 2001 200
 5,000,000
 17,785,388
 1,124,183
 5,000,000
 18,909,571
 23,909,571
 (5,937,852) 17,971,719
 
Avenue TwoRedwood City, CA 1972 123
 7,995,000
 18,005,000
 489,020
 7,995,000
 18,494,020
 26,489,020
 (1,575,938) 24,913,082
 
Redwood City, CA  1972 123
 7,995,000
 18,005,000
 1,462,589
 7,995,000
 19,467,589
 27,462,589
 (3,258,935) 24,203,654
 
Azure (fka Mission Bay-Block 13)San Francisco, CA  (F) 
 32,855,115
 113,753,727
 
 32,855,115
 113,753,727
 146,608,842
 
 146,608,842
 
Ball Park LoftsDenver, CO (G) 2003 352
 5,481,556
 51,658,741
 3,893,128
 5,481,556
 55,551,869
 61,033,425
 (17,157,845) 43,875,580
 
Denver, CO Y 2003 354
 5,481,556
 51,658,741
 4,682,528
 5,481,556
 56,341,269
 61,822,825
 (21,540,968) 40,281,857
 
Barrington PlaceOviedo, FL 1998 233
 6,990,000
 15,740,825
 2,730,072
 6,990,000
 18,470,897
 25,460,897
 (7,843,278) 17,617,619
 
Oviedo, FL  1998 233
 6,990,000
 15,740,825
 3,018,496
 6,990,000
 18,759,321
 25,749,321
 (9,212,819) 16,536,502
 
Bay HillLong Beach, CA 2002 160
 7,600,000
 27,437,239
 865,963
 7,600,000
 28,303,202
 35,903,202
 (9,024,015) 26,879,187
 
Long Beach, CA  2002 160
 7,600,000
 27,437,239
 963,706
 7,600,000
 28,400,945
 36,000,945
 (10,977,611) 25,023,334
 
Beatrice, TheNew York, NY 2010 302
 114,351,405
 165,648,595
 62,962
 114,351,405
 165,711,557
 280,062,962
 (11,236,427) 268,826,535
 
New York, NY  2010 302
 114,351,405
 165,648,595
 593,292
 114,351,405
 166,241,887
 280,593,292
 (23,101,995) 257,491,297
 
Bella Terra IMukilteo, WA (G) 2002 235
 5,686,861
 26,070,540
 857,703
 5,686,861
 26,928,243
 32,615,104
 (9,102,006) 23,513,098
 
Bella VistaPhoenix, AZ 1995 248
 2,978,879
 20,641,333
 3,502,271
 2,978,879
 24,143,604
 27,122,483
 (13,556,807) 13,565,676
 
Bella Vista I, II, III CombinedWoodland Hills, CA 2003-2007 579
 31,682,754
 121,095,786
 1,958,281
 31,682,754
 123,054,067
 154,736,821
 (32,592,195) 122,144,626
 
Bellagio Apartment HomesScottsdale, AZ 1995 202
 2,626,000
 16,025,041
 1,187,110
 2,626,000
 17,212,151
 19,838,151
 (5,794,129) 14,044,022
 
Bella TerraMukilteo, WA Y 2002 235
 5,686,861
 26,070,540
 1,142,423
 5,686,861
 27,212,963
 32,899,824
 (10,954,172) 21,945,652
 
Belle Arts Condominium Homes, LLCBellevue, WA 2000 1
 63,158
 248,929
 (5,320) 63,158
 243,609
 306,767
 
 306,767
 
Bellevue, WA  2000 1
 63,158
 248,929
 (5,320) 63,158
 243,609
 306,767
 
 306,767
 
Belle FontaineMarina del Ray, CA 2003 102
 9,098,808
 28,701,192
 99,785
 9,098,808
 28,800,977
 37,899,785
 (2,069,640) 35,830,145
 
Marina Del Rey, CA  2003 102
 9,098,808
 28,701,192
 236,115
 9,098,808
 28,937,307
 38,036,115
 (4,398,214) 33,637,901
 
Berkeley LandBerkeley, CA (F) 
 13,908,910
 3,695,312
 
 13,908,910
 3,695,312
 17,604,222
 
 17,604,222
 
Berkeley, CA  (F) 
 13,908,910
 8,409,958
 
 13,908,910
 8,409,958
 22,318,868
 
 22,318,868
 
Bishop ParkWinter Park, FL 1991 324
 2,592,000
 17,990,436
 3,865,598
 2,592,000
 21,856,034
 24,448,034
 (11,979,910) 12,468,124
 
Bradford ApartmentsNewington, CT 1964 64
 401,091
 2,681,210
 683,876
 401,091
 3,365,086
 3,766,177
 (1,585,948) 2,180,229
 
Newington, CT  1964 64
 401,091
 2,681,210
 904,877
 401,091
 3,586,087
 3,987,178
 (1,902,145) 2,085,033
 
Briar Knoll AptsVernon, CT 1986 150
 928,972
 6,209,988
 1,520,407
 928,972
 7,730,395
 8,659,367
 (3,687,102) 4,972,265
 

S-4



EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation
December 31, 20122014
DescriptionDescription   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/12        Description   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/14        
Apartment NameLocation  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/12 (B)EncumbrancesLocation Retail/Commercial Space (G)  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/14 (B)Encumbrances
Breakwater at Marina Del ReyMarina Del Rey, CA  1964/2013 224
 
 73,040,897
 390,829
 
 73,431,726
 73,431,726
 (8,397,690) 65,034,036
 
Briar Knoll AptsVernon, CT  1986 150
 928,972
 6,209,988
 2,440,679
 928,972
 8,650,667
 9,579,639
 (4,376,105) 5,203,534
 
Briarwood (CA)Sunnyvale, CA 1985 192
 9,991,500
 22,247,278
 1,938,816
 9,991,500
 24,186,094
 34,177,594
 (11,992,871) 22,184,723
 
Sunnyvale, CA  1985 192
 9,991,500
 22,247,278
 3,407,674
 9,991,500
 25,654,952
 35,646,452
 (13,931,009) 21,715,443
 
Bridford Lakes IIGreensboro, NC (F) 
 1,100,564
 792,509
 
 1,100,564
 792,509
 1,893,073
 
 1,893,073
 
Greensboro, NC  (F) 
 1,100,564
 792,508
 
 1,100,564
 792,508
 1,893,072
 
 1,893,072
 
Bridgewater at Wells CrossingOrange Park, FL 1986 288
 2,160,000
 13,347,549
 2,603,916
 2,160,000
 15,951,465
 18,111,465
 (7,851,493) 10,259,972
 
Brooklyner (fka 111 Lawrence)Brooklyn, NY (G) 2010 490
 40,099,922
 221,419,489
 189,673
 40,099,922
 221,609,162
 261,709,084
 (15,391,373) 246,317,711
 
Brooklyn, NY Y 2010 490
 40,099,922
 221,438,631
 785,785
 40,099,922
 222,224,416
 262,324,338
 (30,934,466) 231,389,872
 
Butterfield RanchChino Hills, CA (F) 
 15,617,709
 4,506,944
 
 15,617,709
 4,506,944
 20,124,653
 
 20,124,653
 
CamelleroScottsdale, AZ 1979 348
 1,924,900
 17,324,593
 5,915,408
 1,924,900
 23,240,001
 25,164,901
 (15,447,692) 9,717,209
 
Brookside (CO)Boulder, CO  1993 144
 3,600,400
 10,211,159
 2,708,411
 3,600,400
 12,919,570
 16,519,970
 (7,278,630) 9,241,340
 
Cambridge ParkCambridge, MA Y 2002 312
 31,200,000
 106,048,587
 1,280,508
 31,200,000
 107,329,095
 138,529,095
 (11,557,359) 126,971,736
 
Carlyle MillAlexandria, VA 2002 317
 10,000,000
 51,367,913
 4,229,928
 10,000,000
 55,597,841
 65,597,841
 (19,536,666) 46,061,175
 
Alexandria, VA  2002 317
 10,000,000
 51,367,913
 5,851,009
 10,000,000
 57,218,922
 67,218,922
 (23,791,982) 43,426,940
 
CascadeSeattle, WA (F) 
 12,198,278
 1,602,237
 
 12,198,278
 1,602,237
 13,800,515
 
 13,800,515
 
Seattle, WA  (F) 
 23,751,564
 10,791,356
 
 23,751,564
 10,791,356
 34,542,920
 
 34,542,920
 
Cascade IISeattle, WA (F) 
 11,553,286
 772,881
 
 11,553,286
 772,881
 12,326,167
 
 12,326,167
 
Centennial CourtSeattle, WA (G) 2001 187
 3,800,000
 21,280,039
 452,440
 3,800,000
 21,732,479
 25,532,479
 (6,504,886) 19,027,593
 
Centennial TowerSeattle, WA (G) 1991 221
 5,900,000
 48,800,339
 4,069,977
 5,900,000
 52,870,316
 58,770,316
 (15,340,520) 43,429,796
 
Centennial (fka Centennial Court & Centennial Tower)Seattle, WA Y 1991/2001 408
 9,700,000
 70,080,378
 6,937,805
 9,700,000
 77,018,183
 86,718,183
 (27,564,879) 59,153,304
 
Centre ClubOntario, CA 1994 312
 5,616,000
 23,485,891
 2,851,599
 5,616,000
 26,337,490
 31,953,490
 (11,942,486) 20,011,004
 
Ontario, CA  1994 312
 5,616,000
 23,485,891
 3,450,905
 5,616,000
 26,936,796
 32,552,796
 (13,897,951) 18,654,845
 
Centre Club IIOntario, CA 2002 100
 1,820,000
 9,528,898
 627,661
 1,820,000
 10,156,559
 11,976,559
 (3,957,095) 8,019,464
 
Ontario, CA  2002 100
 1,820,000
 9,528,898
 819,747
 1,820,000
 10,348,645
 12,168,645
 (4,700,524) 7,468,121
 
Chandlers BayKent, WA 1980 293
 3,700,000
 18,961,895
 486,234
 3,700,000
 19,448,129
 23,148,129
 (4,202,932) 18,945,197
 
Chatelaine ParkDuluth, GA 1995 303
 1,818,000
 24,489,671
 2,215,846
 1,818,000
 26,705,517
 28,523,517
 (13,461,549) 15,061,968
 
Chesapeake Glen Apts (fka Greentree I, II & III)Glen Burnie, MD 1973 796
 8,993,411
 27,301,052
 21,983,212
 8,993,411
 49,284,264
 58,277,675
 (28,112,967) 30,164,708
 
City View (GA)Atlanta, GA (G) 2003 202
 6,440,800
 19,993,460
 1,357,198
 6,440,800
 21,350,658
 27,791,458
 (6,775,978) 21,015,480
 
Church CornerCambridge, MA Y 1987 85
 5,220,000
 16,744,643
 1,800,805
 5,220,000
 18,545,448
 23,765,448
 (7,065,181) 16,700,267
 
Cierra CrestDenver, CO  1996 480
 4,803,100
 34,894,898
 5,414,548
 4,803,100
 40,309,446
 45,112,546
 (24,419,410) 20,693,136
 
City Gate at Cupertino (fka Cupertino)Cupertino, CA  1998 311
 40,400,000
 95,937,046
 1,779,973
 40,400,000
 97,717,019
 138,117,019
 (10,309,105) 127,807,914
 
City PointeFullerton, CA Y 2004 183
 6,863,792
 36,476,208
 721,681
 6,863,792
 37,197,889
 44,061,681
 (9,178,639) 34,883,042
 
City Square Bellevue (fka Bellevue)Bellevue, WA Y 1998 191
 15,100,000
 41,876,257
 2,050,569
 15,100,000
 43,926,826
 59,026,826
 (4,422,723) 54,604,103
 
Cleo, TheLos Angeles, CA 1989 92
 6,615,467
 14,829,335
 3,732,712
 6,615,467
 18,562,047
 25,177,514
 (5,799,503) 19,378,011
 
Los Angeles, CA  1989 92
 6,615,467
 14,829,335
 3,773,750
 6,615,467
 18,603,085
 25,218,552
 (7,103,987) 18,114,565
 
Coconut Palm ClubCoconut Creek, FL 1992 301
 3,001,700
 17,678,928
 3,500,954
 3,001,700
 21,179,882
 24,181,582
 (11,053,062) 13,128,520
 
Coconut Creek, FL  1992 301
 3,001,700
 17,678,928
 4,041,006
 3,001,700
 21,719,934
 24,721,634
 (12,873,552) 11,848,082
 
Country Club LakesJacksonville, FL 1997 555
 15,000,000
 41,055,786
 5,887,825
 15,000,000
 46,943,611
 61,943,611
 (15,159,712) 46,783,899
 
Colorado PointeDenver, CO  2006 193
 5,790,000
 28,815,607
 752,433
 5,790,000
 29,568,040
 35,358,040
 (10,517,365) 24,840,675
 
Copper CanyonHighlands Ranch, CO  1999 222
 1,442,212
 16,251,114
 1,772,671
 1,442,212
 18,023,785
 19,465,997
 (9,990,871) 9,475,126
 
Corcoran House at DuPont Circle (fka DuPont Circle)Washington, D.C. Y 1961 137
 13,500,000
 26,913,113
 791,502
 13,500,000
 27,704,615
 41,204,615
 (3,669,329) 37,535,286
 
Courthouse PlazaArlington, VA Y 1990 396
 
 87,386,024
 3,025,937
 
 90,411,961
 90,411,961
 (11,097,765) 79,314,196
 
Cove at Boynton Beach IBoynton Beach, FL 1996 252
 12,600,000
 31,469,651
 3,957,990
 12,600,000
 35,427,641
 48,027,641
 (12,461,783) 35,565,858
 
Boynton Beach, FL  1996 252
 12,600,000
 31,469,651
 4,584,960
 12,600,000
 36,054,611
 48,654,611
 (15,408,055) 33,246,556
 
Cove at Boynton Beach IIBoynton Beach, FL 1998 296
 14,800,000
 37,874,719
 
 14,800,000
 37,874,719
 52,674,719
 (12,409,067) 40,265,652
 
Boynton Beach, FL  1998 296
 14,800,000
 37,874,719
 
 14,800,000
 37,874,719
 52,674,719
 (14,615,674) 38,059,045
 
Crown CourtScottsdale, AZ 1987 416
 3,156,600
 28,414,599
 10,072,349
 3,156,600
 38,486,948
 41,643,548
 (20,831,754) 20,811,794
 
Crowntree LakesOrlando, FL 2008 352
 12,009,630
 44,407,977
 305,763
 12,009,630
 44,713,740
 56,723,370
 (9,115,128) 47,608,242
 
Cypress Lake at WaterfordOrlando, FL 2001 316
 7,000,000
 27,654,816
 1,953,814
 7,000,000
 29,608,630
 36,608,630
 (10,070,172) 26,538,458
 
Creekside (San Mateo)San Mateo, CA  1985 192
 9,606,600
 21,193,232
 3,609,414
 9,606,600
 24,802,646
 34,409,246
 (13,787,401) 20,621,845
 
Cronins LandingWaltham, MA Y 1998 281
 32,300,000
 85,119,324
 1,108,920
 32,300,000
 86,228,244
 118,528,244
 (9,629,005) 108,899,239
 
Crystal PlaceArlington, VA  1986 181
 17,200,000
 47,918,975
 822,173
 17,200,000
 48,741,148
 65,941,148
 (5,368,053) 60,573,095
 
Dartmouth WoodsLakewood, CO 1990 201
 1,609,800
 10,832,754
 2,181,749
 1,609,800
 13,014,503
 14,624,303
 (7,463,095) 7,161,208
 
Lakewood, CO  1990 201
 1,609,800
 10,832,754
 2,497,430
 1,609,800
 13,330,184
 14,939,984
 (8,473,402) 6,466,582
 
Dean EstatesTaunton, MA 1984 58
 498,080
 3,329,560
 726,694
 498,080
 4,056,254
 4,554,334
 (1,974,667) 2,579,667
 
Taunton, MA  1984 58
 498,080
 3,329,560
 809,096
 498,080
 4,138,656
 4,636,736
 (2,275,545) 2,361,191
 
Deerwood (Corona)Corona, CA 1992 316
 4,742,200
 20,272,892
 4,131,619
 4,742,200
 24,404,511
 29,146,711
 (13,644,933) 15,501,778
 
Corona, CA  1992 316
 4,742,200
 20,272,892
 4,430,978
 4,742,200
 24,703,870
 29,446,070
 (15,468,543) 13,977,527
 
Defoor VillageAtlanta, GA 1997 156
 2,966,400
 10,570,210
 2,070,269
 2,966,400
 12,640,479
 15,606,879
 (6,901,037) 8,705,842
 
Del Mar RidgeSan Diego, CA 1998 181
 7,801,824
 36,948,176
 2,986,046
 7,801,824
 39,934,222
 47,736,046
 (6,689,182) 41,046,864
 
Eagle CanyonChino Hills, CA 1985 252
 1,808,900
 16,274,361
 6,999,462
 1,808,900
 23,273,823
 25,082,723
 (12,868,469) 12,214,254
 
Chino Hills, CA  1985 252
 1,808,900
 16,274,361
 7,553,015
 1,808,900
 23,827,376
 25,636,276
 (15,121,257) 10,515,019
 
Edgemont at Bethesda MetroBethesda, MD 1989 122
 13,092,552
 43,907,448
 179,743
 13,092,552
 44,087,191
 57,179,743
 (3,377,214) 53,802,529
 
Bethesda, MD  1989 122
 13,092,552
 43,907,448
 525,086
 13,092,552
 44,432,534
 57,525,086
 (6,807,362) 50,717,724
 
ElementMiami, FL (F) 
 11,723,423
 2,155,330
 
 11,723,423
 2,155,330
 13,878,753
 
 13,878,753
 
Ellipse at Government CenterFairfax, VA 1989 404
 19,433,000
 56,816,266
 4,717,129
 19,433,000
 61,533,395
 80,966,395
 (13,750,349) 67,216,046
 
ElevéGlendale, CA Y 2013 208
 14,080,560
 56,419,440
 79,091
 14,080,560
 56,498,531
 70,579,091
 (2,964,122) 67,614,969
 
Emerson PlaceBoston, MA (G) 1962 444
 14,855,000
 57,566,636
 15,786,843
 14,855,000
 73,353,479
 88,208,479
 (42,084,610) 46,123,869
 
Boston, MA Y 1962 444
 14,855,000
 57,566,636
 16,797,224
 14,855,000
 74,363,860
 89,218,860
 (47,115,657) 42,103,203
 
Enclave at Lake UnderhillOrlando, FL 1989 312
 9,359,750
 29,539,650
 3,076,979
 9,359,750
 32,616,629
 41,976,379
 (10,291,752) 31,684,627
 
Encinitas Heights (fka Encinitas)Encinitas, CA Y 2002 120
 12,000,000
 29,207,497
 211,769
 12,000,000
 29,419,266
 41,419,266
 (3,528,264) 37,891,002
 
Enclave at WaterwaysDeerfield Beach, FL 1998 300
 15,000,000
 33,194,576
 1,293,880
 15,000,000
 34,488,456
 49,488,456
 (11,250,991) 38,237,465
 
Deerfield Beach, FL  1998 300
 15,000,000
 33,194,576
 2,023,348
 15,000,000
 35,217,924
 50,217,924
 (13,576,836) 36,641,088
 
Enclave at Winston ParkCoconut Creek, FL 1995 278
 5,560,000
 19,939,324
 3,400,119
 5,560,000
 23,339,443
 28,899,443
 (9,389,059) 19,510,384
 
Coconut Creek, FL  1995 278
 5,560,000
 19,939,324
 5,124,830
 5,560,000
 25,064,154
 30,624,154
 (11,489,835) 19,134,319
 
Enclave, TheTempe, AZ 1994 204
 1,500,192
 19,281,399
 1,516,466
 1,500,192
 20,797,865
 22,298,057
 (10,989,851) 11,308,206
 
Encore at Sherman Oaks, TheSherman Oaks, CA 1988 174
 8,700,000
 25,446,003
 389,062
 8,700,000
 25,835,065
 34,535,065
 (2,648,575) 31,886,490
 
Sherman Oaks, CA  1988 174
 8,700,000
 25,446,003
 985,534
 8,700,000
 26,431,537
 35,131,537
 (5,201,465) 29,930,072
 
Estates at TanglewoodWestminster, CO  2003 504
 7,560,000
 51,256,538
 2,870,210
 7,560,000
 54,126,748
 61,686,748
 (20,000,446) 41,686,302
 
Estates at Wellington GreenWellington, FL 2003 400
 20,000,000
 64,790,850
 2,115,788
 20,000,000
 66,906,638
 86,906,638
 (20,447,332) 66,459,306
 
Wellington, FL  2003 400
 20,000,000
 64,790,850
 2,415,710
 20,000,000
 67,206,560
 87,206,560
 (24,828,948) 62,377,612
 
Eye StreetWashington, D.C. (F) 
 13,530,054
 4,444,434
 
 13,530,054
 4,444,434
 17,974,488
 
 17,974,488
 
Four WindsFall River, MA 1987 168
 1,370,843
 9,163,804
 2,158,526
 1,370,843
 11,322,330
 12,693,173
 (5,314,789) 7,378,384
 
Fountains at Emerald Park (fka Emerald Park)Dublin, CA  2000 324
 25,900,000
 83,986,217
 329,083
 25,900,000
 84,315,300
 110,215,300
 (9,418,800) 100,796,500
 
Fox Hill ApartmentsEnfield, CT 1974 168
 1,129,018
 7,547,256
 1,701,722
 1,129,018
 9,248,978
 10,377,996
 (4,262,702) 6,115,294
 
Enfield, CT  1974 168
 1,129,018
 7,547,256
 2,038,591
 1,129,018
 9,585,847
 10,714,865
 (5,061,024) 5,653,841
 
Fox Run (WA)Federal Way, WA 1988 144
 626,637
 5,765,018
 1,914,735
 626,637
 7,679,753
 8,306,390
 (5,103,904) 3,202,486
 
Fox Run II (WA)Federal Way, WA 1988 18
 80,000
 1,286,139
 53,086
 80,000
 1,339,225
 1,419,225
 (480,480) 938,745
 
Fremont CenterFremont, CA Y 2002 322
 25,800,000
 78,753,114
 1,138,054
 25,800,000
 79,891,168
 105,691,168
 (8,436,511) 97,254,657
 
Gables Grand PlazaCoral Gables, FL (G) 1998 195
 
 44,601,000
 6,506,000
 
 51,107,000
 51,107,000
 (16,603,792) 34,503,208
 
Coral Gables, FL Y 1998 195
 
 44,601,000
 7,243,495
 
 51,844,495
 51,844,495
 (20,895,735) 30,948,760
 
Gallery, TheHermosa Beach,CA 1971 169
 18,144,000
 46,567,941
 1,988,058
 18,144,000
 48,555,999
 66,699,999
 (13,251,854) 53,448,145
 
Hermosa Beach, CA  1971 169
 18,144,000
 46,567,941
 2,170,023
 18,144,000
 48,737,964
 66,881,964
 (16,524,852) 50,357,112
 
Gatehouse at Pine LakePembroke Pines, FL  1990 296
 1,896,600
 17,070,795
 7,050,209
 1,896,600
 24,121,004
 26,017,604
 (14,398,441) 11,619,163
 
Gatehouse on the GreenPlantation, FL  1990 312
 2,228,200
 20,056,270
 8,529,397
 2,228,200
 28,585,667
 30,813,867
 (17,655,268) 13,158,599
 

S-5



EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation
December 31, 20122014
DescriptionDescription   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/12        Description   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/14        
Apartment NameLocation  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/12 (B)EncumbrancesLocation Retail/Commercial Space (G)  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/14 (B)Encumbrances
Gatehouse at Pine LakePembroke Pines, FL 1990 296
 1,896,600
 17,070,795
 5,831,636
 1,896,600
 22,902,431
 24,799,031
 (12,299,850) 12,499,181
 
Gatehouse on the GreenPlantation, FL 1990 312
 2,228,200
 20,056,270
 7,415,699
 2,228,200
 27,471,969
 29,700,169
 (15,076,225) 14,623,944
 
Gates of RedmondRedmond, WA 1979 180
 2,306,100
 12,064,015
 4,790,524
 2,306,100
 16,854,539
 19,160,639
 (9,066,338) 10,094,301
 
Redmond, WA  1979 180
 2,306,100
 12,064,015
 5,008,026
 2,306,100
 17,072,041
 19,378,141
 (10,668,500) 8,709,641
 
GatewoodPleasanton, CA 1985 200
 6,796,511
 20,249,392
 4,458,452
 6,796,511
 24,707,844
 31,504,355
 (9,049,646) 22,454,709
 
Geary Court YardSan Francisco, CA 1990 164
 1,722,400
 15,471,429
 2,259,837
 1,722,400
 17,731,266
 19,453,666
 (9,678,667) 9,774,999
 
San Francisco, CA  1990 164
 1,722,400
 15,471,429
 3,464,405
 1,722,400
 18,935,834
 20,658,234
 (11,005,136) 9,653,098
 
Glen MeadowFranklin, MA  1971 288
 2,339,330
 16,133,588
 3,991,967
 2,339,330
 20,125,555
 22,464,885
 (11,374,011) 11,090,874
 
Governors GreenBowie, MD 1999 478
 19,845,000
 73,335,916
 860,934
 19,845,000
 74,196,850
 94,041,850
 (17,692,561) 76,349,289
 
Bowie, MD  1999 478
 19,845,000
 73,335,916
 1,412,260
 19,845,000
 74,748,176
 94,593,176
 (23,032,994) 71,560,182
 
Greenfield VillageRocky Hill , CT 1965 151
 911,534
 6,093,418
 682,573
 911,534
 6,775,991
 7,687,525
 (3,145,760) 4,541,765
 
Rocky Hill , CT  1965 151
 911,534
 6,093,418
 773,225
 911,534
 6,866,643
 7,778,177
 (3,622,365) 4,155,812
 
Hamilton VillasBeverly Hills, CA 1990 35
 7,772,000
 16,864,269
 1,314,747
 7,772,000
 18,179,016
 25,951,016
 (3,695,640) 22,255,376
 
Greenwood ParkCentennial, CO  1994 291
 4,365,000
 38,372,440
 2,833,754
 4,365,000
 41,206,194
 45,571,194
 (13,229,764) 32,341,430
 
Greenwood PlazaCentennial, CO  1996 266
 3,990,000
 35,846,708
 2,744,839
 3,990,000
 38,591,547
 42,581,547
 (12,762,175) 29,819,372
 
Hammocks PlaceMiami, FL 1986 296
 319,180
 12,513,467
 4,001,341
 319,180
 16,514,808
 16,833,988
 (11,158,128) 5,675,860
 
Miami, FL  1986 296
 319,180
 12,513,467
 5,338,503
 319,180
 17,851,970
 18,171,150
 (12,636,539) 5,534,611
 
Hampshire PlaceLos Angeles, CA 1989 259
 10,806,000
 30,335,330
 2,061,399
 10,806,000
 32,396,729
 43,202,729
 (10,534,087) 32,668,642
 
Los Angeles, CA  1989 259
 10,806,000
 30,335,330
 3,447,199
 10,806,000
 33,782,529
 44,588,529
 (12,995,633) 31,592,896
 
Harbor StepsSeattle, WA Y 2000 758
 59,387,158
 158,829,432
 14,399,390
 59,387,158
 173,228,822
 232,615,980
 (59,958,870) 172,657,110
 
Heritage at Stone RidgeBurlington, MA  2005 180
 10,800,000
 31,808,335
 1,240,736
 10,800,000
 33,049,071
 43,849,071
 (11,857,633) 31,991,438
 
Heritage RidgeLynwood, WA 1999 197
 6,895,000
 18,983,597
 692,162
 6,895,000
 19,675,759
 26,570,759
 (6,788,252) 19,782,507
 
Lynwood, WA  1999 197
 6,895,000
 18,983,597
 885,040
 6,895,000
 19,868,637
 26,763,637
 (8,025,318) 18,738,319
 
Heritage, ThePhoenix, AZ 1995 204
 1,209,705
 13,136,903
 1,533,783
 1,209,705
 14,670,686
 15,880,391
 (7,898,088) 7,982,303
 
Heron PointeBoynton Beach, FL 1989 192
 1,546,700
 7,774,676
 2,257,726
 1,546,700
 10,032,402
 11,579,102
 (5,862,536) 5,716,566
 
Boynton Beach, FL  1989 192
 1,546,700
 7,774,676
 2,523,556
 1,546,700
 10,298,232
 11,844,932
 (6,663,332) 5,181,600
 
HesbyNorth Hollywood, CA  2013 308
 23,299,892
 102,700,108
 53,278
 23,299,892
 102,753,386
 126,053,278
 (3,116,198) 122,937,080
 
High MeadowEllington, CT 1975 100
 583,679
 3,901,774
 1,090,107
 583,679
 4,991,881
 5,575,560
 (2,211,945) 3,363,615
 
Ellington, CT  1975 100
 583,679
 3,901,774
 1,204,674
 583,679
 5,106,448
 5,690,127
 (2,657,575) 3,032,552
 
Highland GlenWestwood, MA 1979 180
 2,229,095
 16,828,153
 2,582,562
 2,229,095
 19,410,715
 21,639,810
 (8,691,869) 12,947,941
 
Westwood, MA  1979 180
 2,229,095
 16,828,153
 2,784,639
 2,229,095
 19,612,792
 21,841,887
 (10,224,890) 11,616,997
 
Highland Glen IIWestwood, MA 2007 102
 
 19,875,857
 127,705
 
 20,003,562
 20,003,562
 (4,417,064) 15,586,498
 
Westwood, MA  2007 102
 
 19,875,857
 168,257
 
 20,044,114
 20,044,114
 (5,731,936) 14,312,178
 
Highlands at Cherry HillCherry Hills, NJ 2002 170
 6,800,000
 21,459,108
 721,505
 6,800,000
 22,180,613
 28,980,613
 (6,430,879) 22,549,734
 
Cherry Hills, NJ  2002 170
 6,800,000
 21,459,108
 908,619
 6,800,000
 22,367,727
 29,167,727
 (8,000,482) 21,167,245
 
Highlands at South PlainfieldSouth Plainfield, NJ 2000 252
 10,080,000
 37,526,912
 838,515
 10,080,000
 38,365,427
 48,445,427
 (10,558,268) 37,887,159
 
South Plainfield, NJ  2000 252
 10,080,000
 37,526,912
 1,066,617
 10,080,000
 38,593,529
 48,673,529
 (13,169,823) 35,503,706
 
Highlands, TheScottsdale, AZ 1990 272
 11,823,840
 31,990,970
 2,979,673
 11,823,840
 34,970,643
 46,794,483
 (10,411,726) 36,382,757
 
HikariLos Angeles, CA (G) 2007 128
 9,435,760
 32,564,240
 88,324
 9,435,760
 32,652,564
 42,088,324
 (2,734,058) 39,354,266
 
Los Angeles, CA Y 2007 128
 9,435,760
 32,564,240
 226,353
 9,435,760
 32,790,593
 42,226,353
 (5,483,065) 36,743,288
 
Hudson CrossingNew York, NY (G) 2003 259
 23,420,000
 70,086,976
 1,319,280
 23,420,000
 71,406,256
 94,826,256
 (21,008,820) 73,817,436
 
New York, NY Y 2003 259
 23,420,000
 69,977,699
 1,911,448
 23,420,000
 71,889,147
 95,309,147
 (25,933,022) 69,376,125
 
Hudson Crossing IINew York, NY  (F) 
 10,599,286
 361,404
 
 10,599,286
 361,404
 10,960,690
 
 10,960,690
 
Hudson PointeJersey City, NJ 2003 182
 5,350,000
 41,114,074
 1,815,270
 5,350,000
 42,929,344
 48,279,344
 (13,426,393) 34,852,951
 
Jersey City, NJ  2003 182
 5,350,000
 41,114,074
 2,675,247
 5,350,000
 43,789,321
 49,139,321
 (16,766,304) 32,373,017
 
Hunt Club IICharlotte, NC (F) 
 100,000
 
 
 100,000
 
 100,000
 
 100,000
 
Charlotte, NC  (F) 
 100,000
 
 
 100,000
 
 100,000
 
 100,000
 
Huntington ParkEverett, WA 1991 381
 1,597,500
 14,367,864
 4,453,829
 1,597,500
 18,821,693
 20,419,193
 (12,472,448) 7,946,745
 
Everett, WA  1991 381
 1,597,500
 14,367,864
 5,321,606
 1,597,500
 19,689,470
 21,286,970
 (14,109,888) 7,177,082
 
Indian BendScottsdale, AZ 1973 278
 1,075,700
 9,900,330
 3,365,023
 1,075,700
 13,265,353
 14,341,053
 (8,998,786) 5,342,267
 
Iron Horse ParkPleasant Hill, CA 1973 252
 15,000,000
 24,335,549
 7,833,581
 15,000,000
 32,169,130
 47,169,130
 (11,452,261) 35,716,869
 
Jia (fka Chinatown Gateway)Los Angeles, CA (G) (F) 
 14,791,831
 38,203,310
 
 14,791,831
 38,203,310
 52,995,141
 
 52,995,141
 
Los Angeles, CA Y 2014 280
 14,791,831
 74,818,783
 92,185
 14,791,831
 74,910,968
 89,702,799
 (3,493,876) 86,208,923
 
Junction 47 (fka West Seattle)Seattle, WA Y (F) 
 11,726,305
 32,787,325
 
 11,726,305
 32,787,325
 44,513,630
 
 44,513,630
 
Kenwood MewsBurbank, CA 1991 141
 14,100,000
 24,662,883
 2,326,483
 14,100,000
 26,989,366
 41,089,366
 (7,360,534) 33,728,832
 
Burbank, CA  1991 141
 14,100,000
 24,662,883
 3,139,424
 14,100,000
 27,802,307
 41,902,307
 (9,416,490) 32,485,817
 
Key Isle at WindermereOcoee, FL 2000 282
 8,460,000
 31,761,470
 1,584,992
 8,460,000
 33,346,462
 41,806,462
 (10,598,954) 31,207,508
 
Key Isle at Windermere IIOcoee, FL 2008 165
 3,306,286
 24,519,644
 21,547
 3,306,286
 24,541,191
 27,847,477
 (3,843,424) 24,004,053
 
Kings Colony (FL)Miami, FL 1986 480
 19,200,000
 48,379,586
 3,358,871
 19,200,000
 51,738,457
 70,938,457
 (16,535,050) 54,403,407
 
Miami, FL  1986 480
 19,200,000
 48,379,586
 5,959,307
 19,200,000
 54,338,893
 73,538,893
 (20,308,990) 53,229,903
 
La MirageSan Diego, CA 1988/1992 1,070
 28,895,200
 95,567,943
 17,187,998
 28,895,200
 112,755,941
 141,651,141
 (60,753,002) 80,898,139
 
La Mirage IVSan Diego, CA 2001 340
 6,000,000
 47,449,353
 3,967,334
 6,000,000
 51,416,687
 57,416,687
 (20,107,727) 37,308,960
 
Laguna ClaraSanta Clara, CA 1972 264
 13,642,420
 29,707,475
 3,986,277
 13,642,420
 33,693,752
 47,336,172
 (11,877,090) 35,459,082
 
Lake Buena Vista CombinedOrlando, FL 2000/2002 672
 23,520,000
 75,068,206
 4,377,399
 23,520,000
 79,445,605
 102,965,605
 (23,051,890) 79,913,715
 
Landings at Pembroke LakesPembroke Pines, FL 1989 358
 17,900,000
 24,460,989
 5,250,659
 17,900,000
 29,711,648
 47,611,648
 (10,597,498) 37,014,150
 
Pembroke Pines, FL  1989 358
 17,900,000
 24,460,989
 5,417,847
 17,900,000
 29,878,836
 47,778,836
 (13,049,614) 34,729,222
 
Landings at Port ImperialW. New York, NJ 1999 276
 27,246,045
 37,741,050
 6,986,943
 27,246,045
 44,727,993
 71,974,038
 (19,275,613) 52,698,425
 
W. New York, NJ  1999 276
 27,246,045
 37,741,050
 7,383,017
 27,246,045
 45,124,067
 72,370,112
 (23,206,569) 49,163,543
 
Las Colinas at Black CanyonPhoenix, AZ 2008 304
 9,000,000
 35,917,811
 407,802
 9,000,000
 36,325,613
 45,325,613
 (8,178,418) 37,147,195
 
Legacy at Highlands RanchHighlands Ranch, CO 1999 422
 6,330,000
 37,557,013
 2,030,961
 6,330,000
 39,587,974
 45,917,974
 (12,636,413) 33,281,561
 
Highlands Ranch, CO  1999 422
 6,330,000
 37,557,013
 2,638,356
 6,330,000
 40,195,369
 46,525,369
 (15,555,886) 30,969,483
 
Legacy Park CentralConcord, CA 2003 259
 6,469,230
 46,745,854
 1,113,450
 6,469,230
 47,859,304
 54,328,534
 (14,033,317) 40,295,217
 
Lexington FarmAlpharetta, GA 1995 352
 3,521,900
 22,888,305
 2,738,949
 3,521,900
 25,627,254
 29,149,154
 (13,144,265) 16,004,889
 
Little CottonwoodsTempe, AZ 1984 379
 3,049,133
 26,991,689
 5,116,785
 3,049,133
 32,108,474
 35,157,607
 (16,979,333) 18,178,274
 
Lincoln HeightsQuincy, MA  1991 336
 5,928,400
 33,595,262
 11,650,955
 5,928,400
 45,246,217
 51,174,617
 (27,775,700) 23,398,917
 
Lofts 590Arlington, VA  2005 212
 20,100,000
 67,909,023
 103,786
 20,100,000
 68,012,809
 88,112,809
 (6,942,600) 81,170,209
 
Lofts at Kendall Square (fka Kendall Square)Cambridge, MA  1998 186
 23,300,000
 78,445,657
 2,018,131
 23,300,000
 80,463,788
 103,763,788
 (8,212,576) 95,551,212
 
Longacre HouseNew York, NY (G) 2000 293
 73,170,045
 53,962,510
 1,002,447
 73,170,045
 54,964,957
 128,135,002
 (12,370,230) 115,764,772
 
New York, NY Y 2000 293
 73,170,045
 53,962,510
 1,359,584
 73,170,045
 55,322,094
 128,492,139
 (17,329,569) 111,162,570
 
Longfellow PlaceBoston, MA (G) 1975 710
 53,164,160
 185,610,210
 68,694,424
 53,164,160
 254,304,634
 307,468,794
 (119,111,846) 188,356,948
 
Boston, MA Y 1975 710
 53,164,160
 186,182,421
 79,837,257
 53,164,160
 266,019,678
 319,183,838
 (143,763,840) 175,419,998
 
LongwoodDecatur, GA 1992 268
 1,454,048
 13,087,393
 2,124,966
 1,454,048
 15,212,359
 16,666,407
 (9,987,844) 6,678,563
 
MantenaNew York, NY (G) 2012 98
 22,346,513
 61,653,487
 5,835
 22,346,513
 61,659,322
 84,005,835
 (1,532,832) 82,473,003
 
New York, NY Y 2012 98
 22,346,513
 61,501,158
 261,029
 22,346,513
 61,762,187
 84,108,700
 (6,972,870) 77,135,830
 
Mariners WharfOrange Park, FL 1989 272
 1,861,200
 16,744,951
 3,664,192
 1,861,200
 20,409,143
 22,270,343
 (11,393,039) 10,877,304
 
Market Street LandingSeattle, WA (F) 
 12,542,418
 25,777,026
 
 12,542,418
 25,777,026
 38,319,444
 
 38,319,444
 
Marina 41 (fka Marina Del Rey)Marina Del Rey, CA  1973 623
 
 168,842,442
 3,512,278
 
 172,354,720
 172,354,720
 (20,885,949) 151,468,771
 
Mariposa at Playa Del Rey (fka Playa Del Rey)Playa Del Rey, CA  2004 354
 60,900,000
 89,311,482
 2,751,781
 60,900,000
 92,063,263
 152,963,263
 (10,307,910) 142,655,353
 
MarquessaCorona Hills, CA 1992 336
 6,888,500
 21,604,584
 2,936,753
 6,888,500
 24,541,337
 31,429,837
 (13,567,993) 17,861,844
 
Corona Hills, CA  1992 336
 6,888,500
 21,604,584
 3,638,093
 6,888,500
 25,242,677
 32,131,177
 (15,261,218) 16,869,959
 
Martine, TheBellevue, WA  1984 67
 3,200,000
 9,616,264
 3,168,293
 3,200,000
 12,784,557
 15,984,557
 (4,645,681) 11,338,876
 
Milano LoftsLos Angeles, CA Y 1925/2006 99
 8,125,216
 27,378,784
 337,583
 8,125,216
 27,716,367
 35,841,583
 (3,549,329) 32,292,254
 
MillikanIrvine, CA  (F) 
 11,049,027
 30,318,032
 
 11,049,027
 30,318,032
 41,367,059
 
 41,367,059
 
Miramar LakesMiramar, FL  2003 344
 17,200,000
 51,487,235
 2,246,702
 17,200,000
 53,733,937
 70,933,937
 (19,418,255) 51,515,682
 
Mosaic at Largo StationHyattsville, MD  2008 242
 4,120,800
 42,477,297
 543,227
 4,120,800
 43,020,524
 47,141,324
 (11,883,141) 35,258,183
 
Mozaic at Union StationLos Angeles, CA  2007 272
 8,500,000
 52,529,446
 1,415,603
 8,500,000
 53,945,049
 62,445,049
 (16,666,145) 45,778,904
 
Murray Hill Tower (fka Murray Hill)New York, NY Y 1974 270
 75,800,000
 102,705,401
 2,298,858
 75,800,000
 105,004,259
 180,804,259
 (14,081,429) 166,722,830
 


S-6



EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation
December 31, 20122014
DescriptionDescription   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/12        Description   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/14        
Apartment NameLocation  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/12 (B)EncumbrancesLocation Retail/Commercial Space (G)  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/14 (B)Encumbrances
Martine, TheBellevue, WA 1984 67
 3,200,000
 9,616,264
 2,695,117
 3,200,000
 12,311,381
 15,511,381
 (3,472,519) 12,038,862
 
Midtown 24Plantation, FL (G) 2010 247
 10,129,900
 58,770,100
 973,238
 10,129,900
 59,743,338
 69,873,238
 (5,787,079) 64,086,159
 
Milano LoftsLos Angeles, CA (G) 1925/2006 99
 8,125,216
 27,378,784
 41,701
 8,125,216
 27,420,485
 35,545,701
 (967,630) 34,578,071
 
MillikanIrvine, CA (F) 
 10,743,027
 2,579,535
 
 10,743,027
 2,579,535
 13,322,562
 
 13,322,562
 
Mission BayOrlando, FL 1991 304
 2,432,000
 21,623,560
 3,212,827
 2,432,000
 24,836,387
 27,268,387
 (12,760,346) 14,508,041
 
Mission Bay-Block 13San Francisco, CA (F) 
 32,855,115
 8,197,322
 
 32,855,115
 8,197,322
 41,052,437
 
 41,052,437
 
Mission Verde, LLCSan Jose, CA 1986 108
 5,190,700
 9,679,109
 3,291,432
 5,190,700
 12,970,541
 18,161,241
 (7,127,846) 11,033,395
 
MorningsideScottsdale, AZ 1989 160
 670,470
 12,607,976
 1,848,593
 670,470
 14,456,569
 15,127,039
 (7,837,012) 7,290,027
 
Mosaic at Largo StationHyattsville, MD 2008 242
 4,120,800
 42,477,297
 460,542
 4,120,800
 42,937,839
 47,058,639
 (8,013,492) 39,045,147
 
Mozaic at Union StationLos Angeles, CA 2007 272
 8,500,000
 52,529,446
 1,195,354
 8,500,000
 53,724,800
 62,224,800
 (13,012,582) 49,212,218
 
New River CoveDavie, FL 1999 316
 15,800,000
 46,142,895
 1,343,769
 15,800,000
 47,486,664
 63,286,664
 (14,262,218) 49,024,446
 
Northampton 1Largo, MD 1977 344
 1,843,200
 17,518,161
 6,276,106
 1,843,200
 23,794,267
 25,637,467
 (16,077,097) 9,560,370
 
Northampton 2Largo, MD 1988 276
 1,513,500
 14,257,210
 4,037,606
 1,513,500
 18,294,816
 19,808,316
 (12,066,075) 7,742,241
 
NorthglenValencia, CA 1988 234
 9,360,000
 20,778,553
 1,888,759
 9,360,000
 22,667,312
 32,027,312
 (9,931,177) 22,096,135
 
Valencia, CA  1988 234
 9,360,000
 20,778,553
 2,130,660
 9,360,000
 22,909,213
 32,269,213
 (11,564,178) 20,705,035
 
Northlake (MD)Germantown, MD 1985 304
 15,000,000
 23,142,302
 10,139,271
 15,000,000
 33,281,573
 48,281,573
 (13,418,251) 34,863,322
 
Germantown, MD  1985 304
 15,000,000
 23,142,302
 10,324,900
 15,000,000
 33,467,202
 48,467,202
 (16,634,313) 31,832,889
 
NorthridgePleasant Hill, CA 1974 221
 5,527,800
 14,691,705
 9,627,638
 5,527,800
 24,319,343
 29,847,143
 (12,360,184) 17,486,959
 
Pleasant Hill, CA  1974 221
 5,527,800
 14,691,705
 10,017,139
 5,527,800
 24,708,844
 30,236,644
 (14,954,766) 15,281,878
 
Oak Mill IGermantown, MD 1984 208
 10,000,000
 13,155,522
 7,424,527
 10,000,000
 20,580,049
 30,580,049
 (8,600,153) 21,979,896
 
Germantown, MD  1984 208
 10,000,000
 13,155,522
 7,666,964
 10,000,000
 20,822,486
 30,822,486
 (10,690,161) 20,132,325
 
Oak Park NorthAgoura Hills, CA 1990 220
 1,706,900
 15,362,666
 3,868,037
 1,706,900
 19,230,703
 20,937,603
 (11,198,439) 9,739,164
 
Agoura Hills, CA  1990 220
 1,706,900
 15,362,666
 4,313,705
 1,706,900
 19,676,371
 21,383,271
 (12,773,791) 8,609,480
 
Oak Park SouthAgoura Hills, CA 1989 224
 1,683,800
 15,154,608
 3,913,374
 1,683,800
 19,067,982
 20,751,782
 (11,171,569) 9,580,213
 
Agoura Hills, CA  1989 224
 1,683,800
 15,154,608
 4,367,145
 1,683,800
 19,521,753
 21,205,553
 (12,723,696) 8,481,857
 
Oaks at Falls ChurchFalls Church, VA 1966 176
 20,240,000
 20,152,616
 3,675,805
 20,240,000
 23,828,421
 44,068,421
 (7,774,342) 36,294,079
 
Falls Church, VA  1966 176
 20,240,000
 20,152,616
 3,918,112
 20,240,000
 24,070,728
 44,310,728
 (9,576,777) 34,733,951
 
Oakwood BostonBoston, MA Y 1901 94
 22,200,000
 28,672,979
 803,040
 22,200,000
 29,476,019
 51,676,019
 (3,687,255) 47,988,764
 
Oakwood Crystal CityArlington, VA  1987 162
 15,400,000
 35,474,336
 320,085
 15,400,000
 35,794,421
 51,194,421
 (4,189,805) 47,004,616
 
Oakwood Marina Del ReyMarina Del Rey, CA  1969 597
 
 120,795,359
 1,287,912
 
 122,083,271
 122,083,271
 (14,413,937) 107,669,334
 
Oasis at Delray Beach IDelray Beach, FL  1999 196
 5,900,000
 25,150,766
 793,145
 5,900,000
 25,943,911
 31,843,911
 (3,587,721) 28,256,190
 
Oasis at Delray Beach IIDelray Beach, FL  2013 128
 3,840,000
 18,144,377
 1,844
 3,840,000
 18,146,221
 21,986,221
 (1,077,031) 20,909,190
 
Ocean CrestSolana Beach, CA 1986 146
 5,111,200
 11,910,438
 2,279,108
 5,111,200
 14,189,546
 19,300,746
 (7,615,611) 11,685,135
 
Solana Beach, CA  1986 146
 5,111,200
 11,910,438
 2,935,597
 5,111,200
 14,846,035
 19,957,235
 (8,670,106) 11,287,129
 
Ocean WalkKey West, FL 1990 297
 2,838,749
 25,545,009
 3,492,832
 2,838,749
 29,037,841
 31,876,590
 (15,788,732) 16,087,858
 
Olde Redmond PlaceRedmond, WA  1986 192
 4,807,100
 14,126,038
 4,477,139
 4,807,100
 18,603,177
 23,410,277
 (11,824,788) 11,585,489
 
One Henry AdamsSan Francisco, CA  (F) 
 30,952,393
 8,970,233
 
 30,952,393
 8,970,233
 39,922,626
 
 39,922,626
 
Orchard RidgeLynnwood, WA 1988 104
 480,600
 4,372,033
 1,416,465
 480,600
 5,788,498
 6,269,098
 (3,731,392) 2,537,706
 
Lynnwood, WA  1988 104
 480,600
 4,372,033
 1,640,650
 480,600
 6,012,683
 6,493,283
 (4,200,950) 2,292,333
 
Pacific PlaceLos Angeles, CA  2008 430
 32,250,000
 110,750,000
 572,991
 32,250,000
 111,322,991
 143,572,991
 (9,391,616) 134,181,375
 
Palm Trace LandingsDavie, FL 1995 768
 38,400,000
 105,693,432
 3,667,268
 38,400,000
 109,360,700
 147,760,700
 (32,542,144) 115,218,556
 
Davie, FL  1995 768
 38,400,000
 105,693,432
 4,412,321
 38,400,000
 110,105,753
 148,505,753
 (39,754,320) 108,751,433
 
Panther RidgeFederal Way, WA 1980 260
 1,055,800
 9,506,117
 2,140,710
 1,055,800
 11,646,827
 12,702,627
 (6,713,735) 5,988,892
 
Parc 77New York, NY (G) 1903 137
 40,504,000
 18,025,679
 4,589,070
 40,504,000
 22,614,749
 63,118,749
 (7,304,745) 55,814,004
 
New York, NY Y 1903 137
 40,504,000
 18,025,679
 5,211,253
 40,504,000
 23,236,932
 63,740,932
 (9,380,110) 54,360,822
 
Parc CameronNew York, NY (G) 1927 166
 37,600,000
 9,855,597
 5,715,000
 37,600,000
 15,570,597
 53,170,597
 (6,182,777) 46,987,820
 
New York, NY Y 1927 166
 37,600,000
 9,855,597
 6,069,564
 37,600,000
 15,925,161
 53,525,161
 (7,957,659) 45,567,502
 
Parc ColiseumNew York, NY (G) 1910 177
 52,654,000
 23,045,751
 7,389,493
 52,654,000
 30,435,244
 83,089,244
 (9,968,139) 73,121,105
 
New York, NY Y 1910 177
 52,654,000
 23,045,751
 7,981,026
 52,654,000
 31,026,777
 83,680,777
 (12,833,483) 70,847,294
 
Parc East TowersNew York, NY (G) 1977 324
 102,163,000
 108,989,402
 6,303,791
 102,163,000
 115,293,193
 217,456,193
 (27,730,132) 189,726,061
 
New York, NY Y 1977 324
 102,163,000
 108,989,402
 7,888,302
 102,163,000
 116,877,704
 219,040,704
 (35,905,223) 183,135,481
 
Parc on Powell (fka Parkside at Emeryville)Emeryville, CA Y (F) 
 16,657,467
 55,107,488
 
 16,657,467
 55,107,488
 71,764,955
 
 71,764,955
 
Park AireWellington, FL  2014 268
 8,000,000
 40,917,239
 7,790
 8,000,000
 40,925,029
 48,925,029
 (1,877,464) 47,047,565
 
Park at Pentagon Row (fka Pentagon City)Arlington, VA Y 1990 298
 28,300,000
 78,838,184
 313,935
 28,300,000
 79,152,119
 107,452,119
 (8,734,530) 98,717,589
 
Park at Turtle Run, TheCoral Springs, FL 2001 257
 15,420,000
 36,064,629
 1,138,034
 15,420,000
 37,202,663
 52,622,663
 (12,013,061) 40,609,602
 
Coral Springs, FL  2001 257
 15,420,000
 36,064,629
 1,328,323
 15,420,000
 37,392,952
 52,812,952
 (14,395,758) 38,417,194
 
Park ConnecticutWashington, D.C.  2000 142
 13,700,000
 59,087,519
 438,263
 13,700,000
 59,525,782
 73,225,782
 (5,926,288) 67,299,494
 
Park Hacienda (fka Hacienda)Pleasanton, CA  2000 540
 43,200,000
 128,753,359
 418,551
 43,200,000
 129,171,910
 172,371,910
 (15,002,224) 157,369,686
 
Park West (CA)Los Angeles, CA 1987/1990 444
 3,033,500
 27,302,383
 5,986,542
 3,033,500
 33,288,925
 36,322,425
 (20,597,273) 15,725,152
 
Los Angeles, CA  1987/1990 444
 3,033,500
 27,302,383
 8,693,445
 3,033,500
 35,995,828
 39,029,328
 (23,298,739) 15,730,589
 
ParkfieldDenver, CO 2000 476
 8,330,000
 28,667,617
 2,635,179
 8,330,000
 31,302,796
 39,632,796
 (13,637,129) 25,995,667
 
Denver, CO  2000 476
 8,330,000
 28,667,618
 3,305,900
 8,330,000
 31,973,518
 40,303,518
 (16,037,171) 24,266,347
 
ParksideUnion City, CA 1979 208
 6,246,700
 11,827,453
 3,773,395
 6,246,700
 15,600,848
 21,847,548
 (8,946,852) 12,900,696
 
Union City, CA  1979 208
 6,246,700
 11,827,453
 3,900,616
 6,246,700
 15,728,069
 21,974,769
 (10,008,760) 11,966,009
 
PegasusLos Angeles, CA (G) 1949/2003 322
 18,094,052
 81,905,948
 1,010,419
 18,094,052
 82,916,367
 101,010,419
 (8,883,859) 92,126,560
 
Los Angeles, CA Y 1949/2003 322
 18,094,052
 81,905,948
 2,301,007
 18,094,052
 84,206,955
 102,301,007
 (16,114,037) 86,186,970
 
Phillips ParkWellesley, MA 1988 49
 816,922
 5,460,955
 1,006,754
 816,922
 6,467,709
 7,284,631
 (3,029,012) 4,255,619
 
Wellesley, MA  1988 49
 816,922
 5,460,955
 1,092,085
 816,922
 6,553,040
 7,369,962
 (3,527,505) 3,842,457
 
Playa PacificaHermosa Beach,CA 1972 285
 35,100,000
 33,473,822
 7,816,545
 35,100,000
 41,290,367
 76,390,367
 (14,648,914) 61,741,453
 
Hermosa Beach, CA  1972 285
 35,100,000
 33,473,822
 8,205,881
 35,100,000
 41,679,703
 76,779,703
 (18,071,577) 58,708,126
 
PortofinoChino Hills, CA 1989 176
 3,572,400
 14,660,994
 3,163,077
 3,572,400
 17,824,071
 21,396,471
 (9,213,621) 12,182,850
 
Chino Hills, CA  1989 176
 3,572,400
 14,660,994
 3,469,722
 3,572,400
 18,130,716
 21,703,116
 (10,641,056) 11,062,060
 
Portofino (Val)Valencia, CA 1989 216
 8,640,000
 21,487,126
 2,535,302
 8,640,000
 24,022,428
 32,662,428
 (10,638,272) 22,024,156
 
Valencia, CA  1989 216
 8,640,000
 21,487,126
 2,770,117
 8,640,000
 24,257,243
 32,897,243
 (12,417,735) 20,479,508
 
Portside TowersJersey City, NJ (G) 1992-1997 527
 22,487,006
 96,842,913
 17,976,757
 22,487,006
 114,819,670
 137,306,676
 (56,764,558) 80,542,118
 
Jersey City, NJ Y 1992-1997 527
 22,487,006
 96,842,913
 19,411,866
 22,487,006
 116,254,779
 138,741,785
 (66,421,447) 72,320,338
 
PotreroSan Francisco, CA Y (F) 
 40,830,011
 31,523,663
 
 40,830,011
 31,523,663
 72,353,674
 
 72,353,674
 
Prado (fka Glendale)Glendale, CA  1988 264
 
 67,977,313
 1,102,967
 
 69,080,280
 69,080,280
 (7,364,217) 61,716,063
 
Preserve at Deer CreekDeerfield Beach, FL 1997 540
 13,500,000
 60,011,208
 7,352,553
 13,500,000
 67,363,761
 80,863,761
 (21,754,541) 59,109,220
 
Deerfield Beach, FL  1997 540
 13,500,000
 60,011,208
 11,156,351
 13,500,000
 71,167,559
 84,667,559
 (27,613,392) 57,054,167
 
Prime, TheArlington, VA 2002 256
 32,000,000
 64,436,539
 793,019
 32,000,000
 65,229,558
 97,229,558
 (16,925,622) 80,303,936
 
Arlington, VA  2002 256
 32,000,000
 64,436,539
 1,229,561
 32,000,000
 65,666,100
 97,666,100
 (21,188,390) 76,477,710
 
Promenade at AventuraAventura, FL 1995 296
 13,320,000
 30,353,748
 5,730,061
 13,320,000
 36,083,809
 49,403,809
 (15,402,153) 34,001,656
 
Aventura, FL  1995 296
 13,320,000
 30,353,748
 6,987,572
 13,320,000
 37,341,320
 50,661,320
 (18,578,470) 32,082,850
 
Promenade at Town Center IValencia, CA 2001 294
 14,700,000
 35,390,279
 2,077,005
 14,700,000
 37,467,284
 52,167,284
 (12,733,454) 39,433,830
 
Valencia, CA  2001 294
 14,700,000
 35,390,279
 2,630,025
 14,700,000
 38,020,304
 52,720,304
 (15,471,823) 37,248,481
 
Promenade at Town Center IIValencia, CA 2001 270
 13,500,000
 34,405,636
 1,866,780
 13,500,000
 36,272,416
 49,772,416
 (12,208,570) 37,563,846
 
Valencia, CA  2001 270
 13,500,000
 34,405,636
 2,374,656
 13,500,000
 36,780,292
 50,280,292
 (14,862,278) 35,418,014
 
Promenade at Wyndham LakesCoral Springs, FL 1998 332
 6,640,000
 26,743,760
 4,847,063
 6,640,000
 31,590,823
 38,230,823
 (13,633,783) 24,597,040
 
Coral Springs, FL  1998 332
 6,640,000
 26,743,760
 5,169,866
 6,640,000
 31,913,626
 38,553,626
 (16,302,998) 22,250,628
 
Promenade TerraceCorona, CA 1990 330
 2,272,800
 20,546,289
 5,449,007
 2,272,800
 25,995,296
 28,268,096
 (15,684,738) 12,583,358
 
Corona, CA  1990 330
 2,272,800
 20,546,289
 5,975,907
 2,272,800
 26,522,196
 28,794,996
 (17,641,430) 11,153,566
 
Promontory Pointe I & IIPhoenix, AZ 1984/1996 424
 2,355,509
 30,421,840
 4,007,789
 2,355,509
 34,429,629
 36,785,138
 (18,808,607) 17,976,531
 
Quarry HillsQuincy, MA  2006 316
 26,900,000
 84,411,162
 417,784
 26,900,000
 84,828,946
 111,728,946
 (9,818,230) 101,910,716
 
Red 160 (fka Redmond Way)Redmond, WA Y 2011 250
 15,546,376
 65,320,010
 761,676
 15,546,376
 66,081,686
 81,628,062
 (8,975,666) 72,652,396
 


EQUITY RESIDENTIAL

S-7



EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation
December 31, 20122014
DescriptionDescription   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/12        Description   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/14        
Apartment NameLocation  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/12 (B)EncumbrancesLocation Retail/Commercial Space (G)  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/14 (B)Encumbrances
Prospect TowersHackensack, NJ 1995 157
 3,926,600
 31,674,675
 4,376,379
 3,926,600
 36,051,054
 39,977,654
 (16,205,927) 23,771,727
 
Prospect Towers IIHackensack, NJ 2002 203
 4,500,000
 40,617,715
 3,929,623
 4,500,000
 44,547,338
��49,047,338
 (14,091,202) 34,956,136
 
Red 160 (fka Redmond Way)Redmond , WA (G) 2011 250
 15,546,376
 65,320,310
 346,281
 15,546,376
 65,666,591
 81,212,967
 (4,144,236) 77,068,731
 
Red Road CommonsMiami, FL (G) 2009 404
 27,383,547
 99,656,440
 559,718
 27,383,547
 100,216,158
 127,599,705
 (10,565,079) 117,034,626
 
Miami, FL Y 2009 404
 27,383,547
 99,656,440
 2,120,113
 27,383,547
 101,776,553
 129,160,100
 (18,087,040) 111,073,060
 
Redmond CourtBellevue, WA  1977 206
 10,300,000
 33,488,745
 607,648
 10,300,000
 34,096,393
 44,396,393
 (3,981,275) 40,415,118
 
Regency PalmsHuntington Beach, CA 1969 310
 1,857,400
 16,713,254
 5,000,624
 1,857,400
 21,713,878
 23,571,278
 (13,274,225) 10,297,053
 
Huntington Beach, CA  1969 310
 1,857,400
 16,713,254
 5,435,303
 1,857,400
 22,148,557
 24,005,957
 (15,007,785) 8,998,172
 
RegistryNorthglenn, CO 1986 208
 2,000,000
 10,925,007
 259,859
 2,000,000
 11,184,866
 13,184,866
 (2,566,137) 10,618,729
 
Renaissance VillasBerkeley, CA (G) 1998 34
 2,458,000
 4,542,000
 100,280
 2,458,000
 4,642,280
 7,100,280
 (997,805) 6,102,475
 
Berkeley, CA Y 1998 34
 2,458,000
 4,542,000
 140,950
 2,458,000
 4,682,950
 7,140,950
 (1,389,449) 5,751,501
 
Reserve at Ashley LakeBoynton Beach, FL 1990 440
 3,520,400
 23,332,494
 6,350,302
 3,520,400
 29,682,796
 33,203,196
 (16,035,666) 17,167,530
 
Boynton Beach, FL  1990 440
 3,520,400
 23,332,494
 6,923,362
 3,520,400
 30,255,856
 33,776,256
 (18,742,933) 15,033,323
 
Reserve at Mountain View (fka Mountian View)Mountain View, CA  1965 180
 27,000,000
 33,029,605
 242,910
 27,000,000
 33,272,515
 60,272,515
 (4,243,783) 56,028,732
 
Reserve at Town Center II (WA)Mill Creek, WA 2009 100
 4,310,418
 17,165,442
 38,373
 4,310,418
 17,203,815
 21,514,233
 (1,876,908) 19,637,325
 
Mill Creek, WA  2009 100
 4,310,417
 17,165,142
 84,183
 4,310,417
 17,249,325
 21,559,742
 (3,154,760) 18,404,982
 
Reserve at Town Center IIIMill Creek, WA (F) 
 2,089,388
 3,490,084
 
 2,089,388
 3,490,084
 5,579,472
 
 5,579,472
 
Mill Creek, WA Y 2014 95
 2,089,388
 19,174,300
 1,431
 2,089,388
 19,175,731
 21,265,119
 (736,100) 20,529,019
 
Residences at BayviewPompano Beach, FL (G) 2004 225
 5,783,545
 39,334,455
 752,433
 5,783,545
 40,086,888
 45,870,433
 (5,299,161) 40,571,272
 
Pompano Beach, FL Y 2004 225
 5,783,545
 39,334,455
 1,213,792
 5,783,545
 40,548,247
 46,331,792
 (9,079,046) 37,252,746
 
Retreat, ThePhoenix, AZ 1999 480
 3,475,114
 27,265,252
 2,976,118
 3,475,114
 30,241,370
 33,716,484
 (14,672,647) 19,043,837
 
Reunion at Redmond Ridge (fka Remond Ridge)Redmond, WA 2008 321
 6,975,705
 46,175,001
 184,695
 6,975,705
 46,359,696
 53,335,401
 (8,224,105) 45,111,296
 
Residences at Westgate I (fka Westgate II)Pasadena, CA Y 2014 252
 17,859,785
 106,746,558
 
 17,859,785
 106,746,558
 124,606,343
 (1,278,424) 123,327,919
 
Residences at Westgate II (fka Westgate III)Pasadena, CA Y (F) 
 12,118,061
 33,542,963
 
 12,118,061
 33,542,963
 45,661,024
 
 45,661,024
 
Reunion at Redmond Ridge (fka Redmond Ridge)Redmond, WA  2008 321
 6,975,705
 46,175,001
 300,070
 6,975,705
 46,475,071
 53,450,776
 (11,417,545) 42,033,231
 
Rianna ISeattle, WA (G) 2000 78
 2,268,160
 14,864,482
 191,086
 2,268,160
 15,055,568
 17,323,728
 (2,529,256) 14,794,472
 
Seattle, WA Y 2000 78
 2,268,160
 14,864,482
 425,331
 2,268,160
 15,289,813
 17,557,973
 (3,897,325) 13,660,648
 
Ridgewood Village I&IISan Diego, CA 1997 408
 11,809,500
 34,004,048
 3,421,687
 11,809,500
 37,425,735
 49,235,235
 (16,980,968) 32,254,267
 
San Diego, CA  1997 408
 11,809,500
 34,004,048
 4,650,898
 11,809,500
 38,654,946
 50,464,446
 (19,997,912) 30,466,534
 
Riva Terra I (fka Redwood Shores)Redwood City, CA  1986 304
 34,963,355
 84,587,658
 957,762
 34,963,355
 85,545,420
 120,508,775
 (9,986,376) 110,522,399
 
Riva Terra II (fka Harborside)Redwood City, CA  1986 149
 17,136,645
 40,536,531
 1,331,562
 17,136,645
 41,868,093
 59,004,738
 (4,516,747) 54,487,991
 
River TowerNew York, NY (G) 1982 323
 118,669,441
 98,880,559
 2,622,133
 118,669,441
 101,502,692
 220,172,133
 (20,197,403) 199,974,730
 
New York, NY Y 1982 323
 118,669,441
 98,880,559
 5,781,678
 118,669,441
 104,662,237
 223,331,678
 (28,053,948) 195,277,730
 
RiverparkRedmond, WA (G) 2009 319
 14,355,000
 80,894,049
 67,518
 14,355,000
 80,961,567
 95,316,567
 (5,035,285) 90,281,282
 
Redmond, WA Y 2009 319
 14,355,000
 80,894,049
 625,094
 14,355,000
 81,519,143
 95,874,143
 (11,733,102) 84,141,041
 
Rivers Bend (CT)Windsor, CT 1973 373
 3,325,517
 22,573,825
 2,927,622
 3,325,517
 25,501,447
 28,826,964
 (11,668,318) 17,158,646
 
Windsor, CT  1973 373
 3,325,517
 22,573,826
 3,186,964
 3,325,517
 25,760,790
 29,086,307
 (13,537,132) 15,549,175
 
Riverview CondominiumsNorwalk, CT 1991 92
 2,300,000
 7,406,730
 2,296,446
 2,300,000
 9,703,176
 12,003,176
 (4,819,131) 7,184,045
 
Norwalk, CT  1991 92
 2,300,000
 7,406,730
 2,467,328
 2,300,000
 9,874,058
 12,174,058
 (5,541,526) 6,632,532
 
Rolling Green (Milford)Milford, MA  1970 304
 2,012,350
 13,452,150
 5,922,309
 2,012,350
 19,374,459
 21,386,809
 (10,707,965) 10,678,844
 
Rosecliff IIQuincy, MA 2005 130
 4,922,840
 30,202,160
 309,921
 4,922,840
 30,512,081
 35,434,921
 (2,615,953) 32,818,968
 
Quincy, MA  2005 130
 4,922,840
 30,202,160
 477,564
 4,922,840
 30,679,724
 35,602,564
 (5,256,770) 30,345,794
 
Sabal Palm at Lake Buena VistaOrlando, FL 1988 400
 2,800,000
 23,687,893
 6,464,030
 2,800,000
 30,151,923
 32,951,923
 (14,714,652) 18,237,271
 
Sabal Palm at Metrowest IIOrlando, FL 1997 456
 4,560,000
 33,907,283
 3,163,494
 4,560,000
 37,070,777
 41,630,777
 (18,621,155) 23,009,622
 
Sabal PointeCoral Springs, FL 1995 275
 1,951,600
 17,570,508
 5,371,496
 1,951,600
 22,942,004
 24,893,604
 (13,656,091) 11,237,513
 
Coral Springs, FL  1995 276
 1,951,600
 17,570,508
 7,140,842
 1,951,600
 24,711,350
 26,662,950
 (15,728,545) 10,934,405
 
SageEverett, WA 2002 123
 2,500,000
 12,021,256
 509,255
 2,500,000
 12,530,511
 15,030,511
 (3,881,499) 11,149,012
 
Everett, WA  2002 123
 2,500,000
 12,021,256
 632,845
 2,500,000
 12,654,101
 15,154,101
 (4,686,644) 10,467,457
 
Sakura CrossingLos Angeles, CA (G) 2009 230
 14,641,990
 42,858,010
 67,668
 14,641,990
 42,925,678
 57,567,668
 (4,308,500) 53,259,168
 
Los Angeles, CA Y 2009 230
 14,641,990
 42,858,010
 445,099
 14,641,990
 43,303,109
 57,945,099
 (8,084,997) 49,860,102
 
Savannah at Park PlaceAtlanta, GA 2001 416
 7,696,095
 34,034,000
 3,030,294
 7,696,095
 37,064,294
 44,760,389
 (12,902,641) 31,857,748
 
Savoy at Dayton Station I & II (fka Savoy I)Aurora, CO  2001 444
 5,450,295
 38,765,670
 3,405,215
 5,450,295
 42,170,885
 47,621,180
 (17,320,767) 30,300,413
 
Savoy at Dayton Station III (fka Savoy III)Aurora, CO 2012 168
 659,165
 20,801,301
 4,871
 659,165
 20,806,172
 21,465,337
 (493,651) 20,971,686
 
Aurora, CO  2012 168
 659,165
 21,274,302
 79,142
 659,165
 21,353,444
 22,012,609
 (2,539,418) 19,473,191
 
Scarborough SquareRockville, MD 1967 121
 1,815,000
 7,608,125
 2,636,140
 1,815,000
 10,244,265
 12,059,265
 (5,777,402) 6,281,863
 
Rockville, MD  1967 121
 1,815,000
 7,608,126
 2,968,824
 1,815,000
 10,576,950
 12,391,950
 (6,577,786) 5,814,164
 
Sedona RidgePhoenix, AZ 1989 250
 3,750,000
 14,750,000
 594,723
 3,750,000
 15,344,723
 19,094,723
 (3,754,639) 15,340,084
 
Seeley LakeLakewood, WA 1990 522
 2,760,400
 24,845,286
 4,919,610
 2,760,400
 29,764,896
 32,525,296
 (16,810,786) 15,714,510
 
Seventh & JamesSeattle, WA 1992 96
 663,800
 5,974,803
 3,169,294
 663,800
 9,144,097
 9,807,897
 (5,556,778) 4,251,119
 
Seattle, WA  1992 96
 663,800
 5,974,803
 3,665,212
 663,800
 9,640,015
 10,303,815
 (6,286,805) 4,017,010
 
Shadow CreekWinter Springs, FL 2000 280
 6,000,000
 21,719,768
 1,723,693
 6,000,000
 23,443,461
 29,443,461
 (8,121,736) 21,321,725
 
Winter Springs, FL  2000 280
 6,000,000
 21,719,768
 2,299,111
 6,000,000
 24,018,879
 30,018,879
 (9,913,377) 20,105,502
 
Sheffield CourtArlington, VA  1986 597
 3,342,381
 31,337,332
 13,400,936
 3,342,381
 44,738,268
 48,080,649
 (29,786,965) 18,293,684
 
Sheridan Lake ClubDania Beach, FL 2001 240
 12,000,000
 23,170,580
 1,577,555
 12,000,000
 24,748,135
 36,748,135
 (7,699,328) 29,048,807
 
Dania Beach, FL  2001 240
 12,000,000
 23,170,580
 1,964,151
 12,000,000
 25,134,731
 37,134,731
 (9,437,897) 27,696,834
 
Sheridan Ocean Club combinedDania Beach, FL 1991 648
 18,313,414
 47,091,594
 15,399,729
 18,313,414
 62,491,323
 80,804,737
 (27,296,479) 53,508,258
 
Siena TerraceLake Forest, CA 1988 356
 8,900,000
 24,083,024
 4,002,133
 8,900,000
 28,085,157
 36,985,157
 (13,747,923) 23,237,234
 
Sheridan Ocean Club CombinedDania Beach, FL  1991 648
 18,313,414
 47,091,594
 17,651,928
 18,313,414
 64,743,522
 83,056,936
 (32,954,888) 50,102,048
 
SkycrestValencia, CA 1999 264
 10,560,000
 25,574,457
 2,123,434
 10,560,000
 27,697,891
 38,257,891
 (12,044,811) 26,213,080
 
Valencia, CA  1999 264
 10,560,000
 25,574,457
 2,362,878
 10,560,000
 27,937,335
 38,497,335
 (14,051,911) 24,445,424
 
SkylarkUnion City, CA 1986 174
 1,781,600
 16,731,916
 1,791,961
 1,781,600
 18,523,877
 20,305,477
 (9,490,193) 10,815,284
 
Union City, CA  1986 174
 1,781,600
 16,731,916
 2,659,208
 1,781,600
 19,391,124
 21,172,724
 (10,873,674) 10,299,050
 
Skyline TerraceBurlingame, CA 1967 & 1987 138
 16,836,000
 35,414,000
 2,475,480
 16,836,000
 37,889,480
 54,725,480
 (4,706,514) 50,018,966
 
Burlingame, CA  1967 & 1987 138
 16,836,000
 35,414,000
 4,187,335
 16,836,000
 39,601,335
 56,437,335
 (8,225,224) 48,212,111
 
Skyline TowersFalls Church, VA (G) 1971 939
 78,278,200
 91,485,591
 29,934,636
 78,278,200
 121,420,227
 199,698,427
 (43,347,611) 156,350,816
 
Falls Church, VA Y 1971 939
 78,278,200
 91,485,591
 32,273,806
 78,278,200
 123,759,397
 202,037,597
 (54,795,726) 147,241,871
 
SkyviewRancho Santa Margarita, CA 1999 260
 3,380,000
 21,952,863
 2,009,739
 3,380,000
 23,962,602
 27,342,602
 (11,496,938) 15,845,664
 
SonoranPhoenix, AZ 1995 429
 2,361,922
 31,841,724
 3,264,621
 2,361,922
 35,106,345
 37,468,267
 (18,709,220) 18,759,047
 
Sonterra at Foothill RanchFoothill Ranch, CA  1997 300
 7,503,400
 24,048,507
 2,564,362
 7,503,400
 26,612,869
 34,116,269
 (15,189,055) 18,927,214
 
South City Station (fka South San Francisco)San Francisco, CA Y 2007 360
 68,900,000
 79,476,861
 1,392,508
 68,900,000
 80,869,369
 149,769,369
 (9,849,234) 139,920,135
 
South WindsFall River, MA  1971 404
 2,481,821
 16,780,359
 5,195,897
 2,481,821
 21,976,256
 24,458,077
 (12,085,135) 12,372,942
 
SouthwoodPalo Alto, CA 1985 100
 6,936,600
 14,324,069
 2,939,857
 6,936,600
 17,263,926
 24,200,526
 (8,779,798) 15,420,728
 
Palo Alto, CA  1985 100
 6,936,600
 14,324,069
 3,085,293
 6,936,600
 17,409,362
 24,345,962
 (10,084,791) 14,261,171
 
Springbrook EstatesRiverside, CA (F) 
 18,200,000
 
 
 18,200,000
 
 18,200,000
 
 18,200,000
 
Riverside, CA  (F) 
 18,200,000
 
 
 18,200,000
 
 18,200,000
 
 18,200,000
 
Springs ColonyAltamonte Springs, FL 1986 188
 630,411
 5,852,157
 2,551,306
 630,411
 8,403,463
 9,033,874
 (5,810,262) 3,223,612
 
Square OneSeattle, WA  2014 112
 7,222,544
 26,277,456
 (4) 7,222,544
 26,277,452
 33,499,996
 (93,215) 33,406,781
 
St. Andrews at Winston ParkCoconut Creek, FL 1997 284
 5,680,000
 19,812,090
 3,443,096
 5,680,000
 23,255,186
 28,935,186
 (9,387,233) 19,547,953
 
Coconut Creek, FL  1997 284
 5,680,000
 19,812,090
 5,167,806
 5,680,000
 24,979,896
 30,659,896
 (11,483,152) 19,176,744
 
Stoney CreekLakewood, WA 1990 231
 1,215,200
 10,938,134
 2,533,940
 1,215,200
 13,472,074
 14,687,274
 (7,802,275) 6,884,999
 
StonybrookBoynton Beach, FL 2001 264
 10,500,000
 24,967,638
 1,476,723
 10,500,000
 26,444,361
 36,944,361
 (8,081,289) 28,863,072
 
Summerset Village IIChatsworth, CA (F) 
 260,646
 
 
 260,646
 
 260,646
 
 260,646
 
Chatsworth, CA  (F) 
 260,646
 
 
 260,646
 
 260,646
 ���
 260,646
 
Summit & Birch HillFarmington, CT  1967 186
 1,757,438
 11,748,112
 3,477,936
 1,757,438
 15,226,048
 16,983,486
 (8,409,730) 8,573,756
 
Summit at Lake UnionSeattle, WA  1995 -1997 150
 1,424,700
 12,852,461
 4,489,502
 1,424,700
 17,341,963
 18,766,663
 (10,565,888) 8,200,775
 
Summit at Sausalito (fka Sausalito)Sausalito, CA  1978 198
 26,000,000
 28,435,024
 1,373,534
 26,000,000
 29,808,558
 55,808,558
 (4,476,616) 51,331,942
 

S-8




EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation
December 31, 20122014
DescriptionDescription   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/12        Description   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/14        
Apartment NameLocation  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/12 (B)EncumbrancesLocation Retail/Commercial Space (G)  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/14 (B)Encumbrances
Summit & Birch HillFarmington, CT 1967 186
 1,757,438
 11,748,112
 3,150,829
 1,757,438
 14,898,941
 16,656,379
 (7,116,571) 9,539,808
 
Sycamore CreekScottsdale, AZ 1984 350
 3,152,000
 19,083,727
 3,524,641
 3,152,000
 22,608,368
 25,760,368
 (12,645,066) 13,115,302
 
TallmanSeattle, WA  (F) 
 16,842,249
 38,951,437
 
 16,842,249
 38,951,437
 55,793,686
 
 55,793,686
 
Tasman (fka Vista Montana - Residential)San Jose, CA  (F) 
 27,709,329
 91,844,910
 
 27,709,329
 91,844,910
 119,554,239
 
 119,554,239
 
Ten23 (fka 500 West 23rd Street)New York, NY (G) 2011 111
 
 55,094,616
 73,313
 
 55,167,929
 55,167,929
 (1,930,538) 53,237,391
 
New York, NY Y 2011 111
 
 58,856,293
 109,788
 
 58,966,081
 58,966,081
 (6,036,550) 52,929,531
 
Terraces, TheSan Francisco, CA (G) 1975 117
 14,087,610
 16,321,570
 339,496
 14,087,610
 16,661,066
 30,748,676
 (1,669,806) 29,078,870
 
San Francisco, CA Y 1975 117
 14,087,610
 16,314,151
 698,702
 14,087,610
 17,012,853
 31,100,463
 (3,403,077) 27,697,386
 
Third SquareCambridge, MA (G) 2008/2009 471
 26,767,171
 218,745,109
 2,565,835
 26,767,171
 221,310,944
 248,078,115
 (31,817,136) 216,260,979
 
Cambridge, MA Y 2008/2009 471
 26,767,171
 218,822,728
 3,859,006
 26,767,171
 222,681,734
 249,448,905
 (46,866,757) 202,582,148
 
Three20Seattle, WA Y 2013 134
 7,030,766
 29,078,811
 324,200
 7,030,766
 29,403,011
 36,433,777
 (1,679,563) 34,754,214
 
Tortuga BayOrlando, FL 2004 314
 6,280,000
 32,121,779
 1,197,577
 6,280,000
 33,319,356
 39,599,356
 (10,233,609) 29,365,747
 
Orlando, FL  2004 314
 6,280,000
 32,121,779
 1,652,231
 6,280,000
 33,774,010
 40,054,010
 (12,539,818) 27,514,192
 
ToscanaIrvine, CA 1991/1993 563
 39,410,000
 50,806,072
 7,320,599
 39,410,000
 58,126,671
 97,536,671
 (26,096,607) 71,440,064
 
Townes at HerndonHerndon, VA 2002 218
 10,900,000
 49,216,125
 776,855
 10,900,000
 49,992,980
 60,892,980
 (14,084,769) 46,808,211
 
Town Center South Commercial TractSt. Charles, MD  (F) 
 1,500,000
 5,499
 
 1,500,000
 5,499
 1,505,499
 
 1,505,499
 
Town Square at Mark Center IIAlexandria, VA  2001 272
 15,568,464
 55,029,607
 674,851
 15,568,464
 55,704,458
 71,272,922
 (12,914,649) 58,358,273
 
Trump Place, 140 RiversideNew York, NY (G) 2003 354
 103,539,100
 94,082,725
 2,566,988
 103,539,100
 96,649,713
 200,188,813
 (26,637,468) 173,551,345
 
New York, NY Y 2003 354
 103,539,100
 94,082,725
 4,343,151
 103,539,100
 98,425,876
 201,964,976
 (33,587,819) 168,377,157
 
Trump Place, 160 RiversideNew York, NY (G) 2001 455
 139,933,500
 190,964,745
 7,898,524
 139,933,500
 198,863,269
 338,796,769
 (52,832,992) 285,963,777
 
New York, NY Y 2001 455
 139,933,500
 190,964,745
 10,315,504
 139,933,500
 201,280,249
 341,213,749
 (67,180,501) 274,033,248
 
Trump Place, 180 RiversideNew York, NY (G) 1998 516
 144,968,250
 138,346,681
 6,980,980
 144,968,250
 145,327,661
 290,295,911
 (40,639,020) 249,656,891
 
New York, NY Y 1998 516
 144,968,250
 138,346,681
 8,758,301
 144,968,250
 147,104,982
 292,073,232
 (50,963,924) 241,109,308
 
Urbana (fka Market Street Landing)Seattle, WA Y 2014 287
 12,542,418
 74,247,060
 592,913
 12,542,418
 74,839,973
 87,382,391
 (2,706,973) 84,675,418
 
Uwajimaya VillageSeattle, WA 2002 176
 8,800,000
 22,188,288
 320,211
 8,800,000
 22,508,499
 31,308,499
 (7,306,208) 24,002,291
 
Seattle, WA  2002 176
 8,800,000
 22,188,288
 463,663
 8,800,000
 22,651,951
 31,451,951
 (8,690,210) 22,761,741
 
Valencia PlantationOrlando, FL 1990 194
 873,000
 12,819,377
 2,264,564
 873,000
 15,083,941
 15,956,941
 (7,679,299) 8,277,642
 
Vantage PointeSan Diego, CA (G) 2009 679
 9,403,960
 190,596,040
 3,629,681
 9,403,960
 194,225,721
 203,629,681
 (19,966,728) 183,662,953
 
San Diego, CA Y 2009 679
 9,403,960
 190,596,040
 6,068,618
 9,403,960
 196,664,658
 206,068,618
 (37,027,336) 169,041,282
 
VeloceRedmond, WA Y 2009 322
 15,322,724
 76,176,594
 253,112
 15,322,724
 76,429,706
 91,752,430
 (7,951,300) 83,801,130
 
Verde Condominium Homes (fka Mission Verde, LLC)San Jose, CA  1986 108
 5,190,700
 9,679,109
 3,659,737
 5,190,700
 13,338,846
 18,529,546
 (8,271,659) 10,257,887
 
Veridian (fka Silver Spring)Silver Spring, MD (G) 2009 457
 18,539,817
 130,407,365
 440,675
 18,539,817
 130,848,040
 149,387,857
 (16,158,435) 133,229,422
 
Silver Spring, MD Y 2009 457
 18,539,817
 130,407,365
 1,187,628
 18,539,817
 131,594,993
 150,134,810
 (25,425,869) 124,708,941
 
Versailles (K-Town)Los Angeles, CA 2008 225
 10,590,975
 44,409,025
 239,807
 10,590,975
 44,648,832
 55,239,807
 (6,926,468) 48,313,339
 
Victor on VeniceLos Angeles, CA (G) 2006 115
 10,350,000
 35,433,437
 237,130
 10,350,000
 35,670,567
 46,020,567
 (8,859,582) 37,160,985
 
Villa SolanaLaguna Hills, CA 1984 272
 1,665,100
 14,985,677
 8,132,584
 1,665,100
 23,118,261
 24,783,361
 (14,288,430) 10,494,931
 
Laguna Hills, CA  1984 272
 1,665,100
 14,985,678
 9,004,790
 1,665,100
 23,990,468
 25,655,568
 (16,477,170) 9,178,398
 
Village at Bear CreekLakewood, CO 1987 472
 4,519,700
 40,676,390
 4,997,870
 4,519,700
 45,674,260
 50,193,960
 (24,795,219) 25,398,741
 
Lakewood, CO  1987 472
 4,519,700
 40,676,390
 5,730,669
 4,519,700
 46,407,059
 50,926,759
 (28,337,074) 22,589,685
 
Village at Howard Hughes (Lots 1 & 2/3 & 4)Los Angeles, CA (F) 
 79,140,504
 759,769
 
 79,140,504
 759,769
 79,900,273
 
 79,900,273
 
Village at LakewoodPhoenix, AZ 1988 240
 3,166,411
 13,859,090
 2,489,757
 3,166,411
 16,348,847
 19,515,258
 (8,961,390) 10,553,868
 
Vista Del LargoMission Viejo, CA 1986-1988 608
 4,525,800
 40,736,293
 14,798,953
 4,525,800
 55,535,246
 60,061,046
 (34,665,902) 25,395,144
 
Vista Montana - ResidentialSan Jose, CA (F) 
 27,410,280
 1,199,671
 
 27,410,280
 1,199,671
 28,609,951
 
 28,609,951
 
Vista on CourthouseArlington, VA 2008 220
 15,550,260
 69,449,740
 397,975
 15,550,260
 69,847,715
 85,397,975
 (10,744,482) 74,653,493
 
Village at Del Mar Heights, The (fka Del Mar Heights)San Diego, CA  1986 168
 15,100,000
 40,859,396
 252,027
 15,100,000
 41,111,423
 56,211,423
 (4,661,947) 51,549,476
 
Village at Howard Hughes, The (Lots 1 & 2)Los Angeles, CA  (F) 
 43,783,485
 42,858,234
 
 43,783,485
 42,858,234
 86,641,719
 
 86,641,719
 
Virginia SquareArlington, VA Y 2002 231
 
 85,940,003
 1,862,631
 
 87,802,634
 87,802,634
 (9,021,044) 78,781,590
 
Vista Del LagoMission Viejo, CA  1986-1988 608
 4,525,800
 40,736,293
 15,509,600
 4,525,800
 56,245,893
 60,771,693
 (39,353,877) 21,417,816
 
Walden ParkCambridge, MA 1966 232
 12,448,888
 52,044,448
 1,594,732
 12,448,888
 53,639,180
 66,088,068
 (5,239,651) 60,848,417
 
Cambridge, MA  1966 232
 12,448,888
 52,044,448
 3,585,931
 12,448,888
 55,630,379
 68,079,267
 (10,279,717) 57,799,550
 
Waterford Place (CO)Thornton, CO 1998 336
 5,040,000
 29,946,419
 1,637,326
 5,040,000
 31,583,745
 36,623,745
 (11,886,541) 24,737,204
 
Thornton, CO  1998 336
 5,040,000
 29,946,419
 1,892,852
 5,040,000
 31,839,271
 36,879,271
 (13,850,610) 23,028,661
 
WatersideReston, VA 1984 276
 20,700,000
 27,474,387
 8,220,602
 20,700,000
 35,694,989
 56,394,989
 (12,496,308) 43,898,681
 
Watertown SquareWatertown, MA Y 2005 134
 16,800,000
 34,074,056
 273,661
 16,800,000
 34,347,717
 51,147,717
 (3,888,131) 47,259,586
 
Webster GreenNeedham, MA 1985 77
 1,418,893
 9,485,006
 1,114,670
 1,418,893
 10,599,676
 12,018,569
 (4,715,170) 7,303,399
 
Needham, MA  1985 77
 1,418,893
 9,485,006
 1,311,268
 1,418,893
 10,796,274
 12,215,167
 (5,513,744) 6,701,423
 
Welleby Lake ClubSunrise, FL 1991 304
 3,648,000
 17,620,879
 5,597,514
 3,648,000
 23,218,393
 26,866,393
 (11,549,224) 15,317,169
 
Sunrise, FL  1991 304
 3,648,000
 17,620,879
 6,006,733
 3,648,000
 23,627,612
 27,275,612
 (13,651,141) 13,624,471
 
West 96thNew York, NY Y 1987 207
 84,800,000
 67,055,502
 1,691,019
 84,800,000
 68,746,521
 153,546,521
 (10,502,306) 143,044,215
 
West End Apartments (fka Emerson Place/ CRP II)Boston, MA (G) 2008 310
 469,546
 163,123,022
 494,911
 469,546
 163,617,933
 164,087,479
 (27,681,291) 136,406,188
 
Boston, MA Y 2008 310
 469,546
 163,123,022
 1,657,912
 469,546
 164,780,934
 165,250,480
 (38,899,184) 126,351,296
 
West SeattleSeattle, WA (F) 
 11,726,305
 2,490,247
 
 11,726,305
 2,490,247
 14,216,552
 
 14,216,552
 
Westerly at WorldgateHerndon, VA 1995 320
 14,568,000
 43,620,057
 1,427,763
 14,568,000
 45,047,820
 59,615,820
 (10,109,303) 49,506,517
 
Westgate I (fka Westgate Pasadena Apartments)Pasadena, CA 2010 480
 22,898,848
 133,521,009
 119,567
 22,898,848
 133,640,576
 156,539,424
 (9,242,093) 147,297,331
 
Westgate II (fka Westgate Block 2)Pasadena, CA (F) 
 17,859,785
 44,087,554
 
 17,859,785
 44,087,554
 61,947,339
 
 61,947,339
 
Westgate III (fka Westgate Block 1)Pasadena, CA (F) 
 12,118,061
 8,735,107
 
 12,118,061
 8,735,107
 20,853,168
 
 20,853,168
 
WestridgeTacoma, WA 1987 -1991 714
 3,501,900
 31,506,082
 7,594,870
 3,501,900
 39,100,952
 42,602,852
 (22,336,808) 20,266,044
 
Westchester at PavilionsWaldorf, MD Y 2009 491
 11,900,000
 89,612,465
 454,376
 11,900,000
 90,066,841
 101,966,841
 (8,949,050) 93,017,791
 
Westchester at RockvilleRockville, MD  2009 192
 10,600,000
 44,135,207
 277,296
 10,600,000
 44,412,503
 55,012,503
 (5,009,486) 50,003,017
 
WestmontNew York, NY Y 1986 163
 64,900,000
 61,143,259
 761,971
 64,900,000
 61,905,230
 126,805,230
 (7,967,408) 118,837,822
 
WestsideLos Angeles, CA  2004 204
 34,200,000
 56,962,630
 1,269,381
 34,200,000
 58,232,011
 92,432,011
 (6,264,171) 86,167,840
 
Westside Villas ILos Angeles, CA 1999 21
 1,785,000
 3,233,254
 292,332
 1,785,000
 3,525,586
 5,310,586
 (1,566,348) 3,744,238
 
Los Angeles, CA  1999 21
 1,785,000
 3,233,254
 357,453
 1,785,000
 3,590,707
 5,375,707
 (1,813,481) 3,562,226
 
Westside Villas IILos Angeles, CA 1999 23
 1,955,000
 3,541,435
 179,368
 1,955,000
 3,720,803
 5,675,803
 (1,581,322) 4,094,481
 
Los Angeles, CA  1999 23
 1,955,000
 3,541,435
 250,691
 1,955,000
 3,792,126
 5,747,126
 (1,850,426) 3,896,700
 
Westside Villas IIILos Angeles, CA 1999 36
 3,060,000
 5,538,871
 265,521
 3,060,000
 5,804,392
 8,864,392
 (2,460,640) 6,403,752
 
Los Angeles, CA  1999 36
 3,060,000
 5,538,871
 377,157
 3,060,000
 5,916,028
 8,976,028
 (2,880,318) 6,095,710
 
Westside Villas IVLos Angeles, CA 1999 36
 3,060,000
 5,539,390
 273,968
 3,060,000
 5,813,358
 8,873,358
 (2,464,903) 6,408,455
 
Los Angeles, CA  1999 36
 3,060,000
 5,539,390
 385,604
 3,060,000
 5,924,994
 8,984,994
 (2,887,551) 6,097,443
 
Westside Villas VLos Angeles, CA 1999 60
 5,100,000
 9,224,485
 471,533
 5,100,000
 9,696,018
 14,796,018
 (4,123,174) 10,672,844
 
Los Angeles, CA  1999 60
 5,100,000
 9,224,485
 657,592
 5,100,000
 9,882,077
 14,982,077
 (4,823,944) 10,158,133
 
Westside Villas VILos Angeles, CA 1989 18
 1,530,000
 3,023,523
 262,936
 1,530,000
 3,286,459
 4,816,459
 (1,430,776) 3,385,683
 
Los Angeles, CA  1989 18
 1,530,000
 3,023,523
 318,754
 1,530,000
 3,342,277
 4,872,277
 (1,665,408) 3,206,869
 
Westside Villas VIILos Angeles, CA 2001 53
 4,505,000
 10,758,900
 452,331
 4,505,000
 11,211,231
 15,716,231
 (4,173,724) 11,542,507
 
Los Angeles, CA  2001 53
 4,505,000
 10,758,900
 616,684
 4,505,000
 11,375,584
 15,880,584
 (4,960,551) 10,920,033
 
Wimberly at DeerwoodJacksonville, FL 2000 322
 8,000,000
 30,057,214
 1,762,941
 8,000,000
 31,820,155
 39,820,155
 (9,410,511) 30,409,644
 
Winchester ParkRiverside, RI 1972 416
 2,822,618
 18,868,626
 7,266,563
 2,822,618
 26,135,189
 28,957,807
 (13,008,087) 15,949,720
 
Winchester WoodRiverside, RI 1989 62
 683,215
 4,567,154
 1,011,098
 683,215
 5,578,252
 6,261,467
 (2,491,362) 3,770,105
 
Westwood GlenWestwood, MA  1972 156
 1,616,505
 10,806,004
 2,225,649
 1,616,505
 13,031,653
 14,648,158
 (6,710,710) 7,937,448
 
Windridge (CA)Laguna Niguel, CA 1989 344
 2,662,900
 23,985,497
 7,370,121
 2,662,900
 31,355,618
 34,018,518
 (18,946,445) 15,072,073
 
Laguna Niguel, CA  1989 344
 2,662,900
 23,985,497
 8,684,076
 2,662,900
 32,669,573
 35,332,473
 (21,637,211) 13,695,262
 
Winston, The (FL)Pembroke Pines, FL  2001/2003 464
 18,561,000
 49,527,569
 2,852,872
 18,561,000
 52,380,441
 70,941,441
 (18,475,139) 52,466,302
 
Wood Creek IPleasant Hill, CA  1987 256
 9,729,900
 23,009,768
 6,555,668
 9,729,900
 29,565,436
 39,295,336
 (17,862,164) 21,433,172
 
Woodbridge (CT)Newington, CT  1968 73
 498,377
 3,331,548
 1,266,343
 498,377
 4,597,891
 5,096,268
 (2,465,999) 2,630,269
 
Woodlake (WA)Kirkland, WA  1984 288
 6,631,400
 16,735,484
 3,790,078
 6,631,400
 20,525,562
 27,156,962
 (12,057,883) 15,099,079
 


S-9



EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation
December 31, 20122014
DescriptionDescription   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/12        Description   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/14        
Apartment NameLocation  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/12 (B)EncumbrancesLocation Retail/Commercial Space (G)  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/14 (B)Encumbrances
Windsor at Fair LakesFairfax, VA 1988 250
 10,000,000
 28,587,109
 6,701,806
 10,000,000
 35,288,915
 45,288,915
 (12,650,207) 32,638,708
 
Winston, The (FL)Pembroke Pines, FL 2001/2003 464
 18,561,000
 49,527,569
 2,297,064
 18,561,000
 51,824,633
 70,385,633
 (14,329,842) 56,055,791
 
Wood Creek (CA)Pleasant Hill, CA 1987 256
 9,729,900
 23,009,768
 6,108,839
 9,729,900
 29,118,607
 38,848,507
 (15,172,018) 23,676,489
 
Woodbridge (CT)Newington, CT 1968 73
 498,377
 3,331,548
 1,021,950
 498,377
 4,353,498
 4,851,875
 (2,034,470) 2,817,405
 
Woodland ParkEast Palo Alto, CA (G) 1953 1,812
 72,314,518
 57,267,661
 4,000,424
 72,314,518
 61,268,085
 133,582,603
 (14,050,014) 119,532,589
 
East Palo Alto, CA Y 1953 1,809
 72,627,418
 57,649,069
 9,382,472
 72,627,418
 67,031,541
 139,658,959
 (24,058,784) 115,600,175
 
Management BusinessChicago, IL (D) 
 
 
 93,750,517
 
 93,750,517
 93,750,517
 (70,059,419) 23,691,098
 
Chicago, IL  (D) 
 
 
 103,392,322
 
 103,392,322
 103,392,322
 (79,507,853) 23,884,469
 
Operating PartnershipChicago, IL (F) 
 
 4,528,494
 
 
 4,528,494
 4,528,494
 
 4,528,494
 
Chicago, IL  (F) 
 
 1,434,910
 
 
 1,434,910
 1,434,910
 
 1,434,910
 
Wholly Owned Unencumbered 73,732
 3,731,343,610
 9,953,052,315
 992,053,562
 3,731,343,610
 10,945,105,877
 14,676,449,487
 (3,266,454,538) 11,409,994,949
 
Wholly Owned Encumbered:                    
4701 Willard AveChevy Chase, MD (G) 1966 512
 76,921,130
 153,947,682
 1,061,755
 76,921,130
 155,009,437
 231,930,567
 (11,597,683) 220,332,884
 104,556,923
EQR Wholly Owned Unencumbered
 
 
 69,217
 4,798,437,902
 12,737,799,082
 1,002,255,162
 4,798,437,902
 13,740,054,244
 18,538,492,146
 (3,650,524,741) 14,887,967,405
 
EQR Wholly Owned Encumbered:
 
 
 

 

 

 

 

 

 

 

 

 

101 West EndNew York, NY Y 2000 506
 190,600,000
 131,374,708
 1,868,722
 190,600,000
 133,243,430
 323,843,430
 (19,903,961) 303,939,469
 104,781,651
1401 Joyce on Pentagon RowArlington, VA  2004 326
 9,780,000
 89,668,165
 793,393
 9,780,000
 90,461,558
 100,241,558
 (22,366,104) 77,875,454
 57,428,472
2501 PorterWashington, D.C.  1988 202
 13,000,000
 75,271,179
 1,555,253
 13,000,000
 76,826,432
 89,826,432
 (7,789,697) 82,036,735
  (L)
300 East 39th (fka East 39th)New York, NY Y 2001 254
 48,900,000
 96,174,639
 868,920
 48,900,000
 97,043,559
 145,943,559
 (11,236,211) 134,707,348
 59,449,107
3003 Van Ness (fka Van Ness)Washington, D.C.  1970 625
 56,300,000
 141,191,580
 2,514,645
 56,300,000
 143,706,225
 200,006,225
 (16,968,210) 183,038,015
  (K)
303 East 83rd (fka Camargue)New York, NY Y 1976 261
 79,400,000
 79,122,624
 738,175
 79,400,000
 79,860,799
 159,260,799
 (10,706,970) 148,553,829
  (L)
425 BroadwaySanta Monica, CA Y 2001 101
 12,600,000
 34,394,772
 680,943
 12,600,000
 35,075,715
 47,675,715
 (3,569,288) 44,106,427
  (L)
4701 WillardChevy Chase, MD Y 1966 513
 76,921,130
 153,947,682
 20,688,968
 76,921,130
 174,636,650
 251,557,780
 (24,386,428) 227,171,352
 98,427,692
55 West Fifth I & II (fka Townhouse Plaza and Gardens)San Mateo, CA 1964/1972 241
 21,041,710
 71,931,323
 215,831
 21,041,710
 72,147,154
 93,188,864
 (2,686,429) 90,502,435
 30,778,664
San Mateo, CA  1964/1972 241
 21,041,710
 71,931,323
 8,114,511
 21,041,710
 80,045,834
 101,087,544
 (9,767,221) 91,320,323
 29,128,487
77 Park Avenue (fka Hoboken)Hoboken, NJ Y 2000 301
 27,900,000
 168,992,440
 1,559,417
 27,900,000
 170,551,857
 198,451,857
 (16,271,604) 182,180,253
  (K)
800 Sixth Ave (fka Chelsea)New York, NY Y 2003 266
 59,900,000
 155,861,605
 218,240
 59,900,000
 156,079,845
 215,979,845
 (16,645,847) 199,333,998
 76,680,282
929 HouseCambridge, MA (G) 1975 127
 3,252,993
 21,745,595
 4,792,140
 3,252,993
 26,537,735
 29,790,728
 (11,377,564) 18,413,164
 2,464,147
Cambridge, MA Y 1975 127
 3,252,993
 21,745,595
 5,861,409
 3,252,993
 27,607,004
 30,859,997
 (13,677,315) 17,182,682
 1,784,337
Academy VillageNorth Hollywood, CA 1989 248
 25,000,000
 23,593,194
 6,492,522
 25,000,000
 30,085,716
 55,085,716
 (11,470,719) 43,614,997
 20,000,000
North Hollywood, CA  1989 248
 25,000,000
 23,593,194
 7,244,947
 25,000,000
 30,838,141
 55,838,141
 (14,131,888) 41,706,253
 20,000,000
AcappellaPasadena, CA 2002 143
 5,839,548
 29,360,452
 277,755
 5,839,548
 29,638,207
 35,477,755
 (3,824,665) 31,653,090
 20,389,637
Pasadena, CA  2002 143
 5,839,548
 29,360,452
 902,132
 5,839,548
 30,262,584
 36,102,132
 (6,456,855) 29,645,277
 19,842,607
Acton CourtyardBerkeley, CA (G) 2003 71
 5,550,000
 15,785,509
 126,430
 5,550,000
 15,911,939
 21,461,939
 (4,051,110) 17,410,829
 9,920,000
Berkeley, CA Y 2003 71
 5,550,000
 15,785,509
 174,547
 5,550,000
 15,960,056
 21,510,056
 (5,066,680) 16,443,376
 9,920,000
AlboradaFremont, CA 1999 442
 24,310,000
 59,214,129
 2,626,742
 24,310,000
 61,840,871
 86,150,871
 (27,444,903) 58,705,968
  (I)
Fremont, CA  1999 442
 24,310,000
 59,214,129
 3,040,631
 24,310,000
 62,254,760
 86,564,760
 (31,791,543) 54,773,217
  (I)
Alexander on PonceAtlanta, GA 2003 330
 9,900,000
 35,819,022
 1,617,126
 9,900,000
 37,436,148
 47,336,148
 (10,925,726) 36,410,422
 30,889,928
Arbor TerraceSunnyvale, CA 1979 175
 9,057,300
 18,483,642
 2,414,658
 9,057,300
 20,898,300
 29,955,600
 (10,784,419) 19,171,181
  (K)
AlcyoneSeattle, WA Y 2004 161
 11,379,497
 49,360,503
 (9) 11,379,497
 49,360,494
 60,739,991
 
 60,739,991
 28,910,000
Arches, TheSunnyvale, CA  1974 410
 26,650,000
 62,850,000
 851,025
 26,650,000
 63,701,025
 90,351,025
 (12,837,616) 77,513,409
  (J)
Artech BuildingBerkeley, CA (G) 2002 21
 1,642,000
 9,152,518
 108,579
 1,642,000
 9,261,097
 10,903,097
 (2,117,964) 8,785,133
 3,200,000
Berkeley, CA Y 2002 21
 1,642,000
 9,152,518
 260,646
 1,642,000
 9,413,164
 11,055,164
 (2,729,697) 8,325,467
 3,200,000
Artisan SquareNorthridge, CA 2002 140
 7,000,000
 20,537,359
 805,318
 7,000,000
 21,342,677
 28,342,677
 (7,724,759) 20,617,918
 22,779,715
Northridge, CA  2002 140
 7,000,000
 20,537,359
 1,064,325
 7,000,000
 21,601,684
 28,601,684
 (9,217,575) 19,384,109
 22,779,715
AvantiAnaheim, CA 1987 162
 12,960,000
 18,497,683
 1,168,149
 12,960,000
 19,665,832
 32,625,832
 (5,822,854) 26,802,978
 18,169,458
Anaheim, CA  1987 162
 12,960,000
 18,497,683
 1,314,548
 12,960,000
 19,812,231
 32,772,231
 (7,174,217) 25,598,014
 18,169,458
AvenirBoston, MA Y 2009 241
 
 114,321,619
 551,758
 
 114,873,377
 114,873,377
 (12,259,457) 102,613,920
 94,465,696
Bachenheimer BuildingBerkeley, CA (G) 2004 44
 3,439,000
 13,866,379
 76,376
 3,439,000
 13,942,755
 17,381,755
 (3,327,186) 14,054,569
 8,585,000
Berkeley, CA Y 2004 44
 3,439,000
 13,866,379
 124,166
 3,439,000
 13,990,545
 17,429,545
 (4,228,536) 13,201,009
 8,585,000
Bella Vista Apartments at Boca Del MarBoca Raton, FL 1985 392
 11,760,000
 20,190,252
 14,210,692
 11,760,000
 34,400,944
 46,160,944
 (17,113,970) 29,046,974
 26,134,010
Bella Vista I, II, III CombinedWoodland Hills, CA  2003-2007 579
 31,682,754
 121,095,786
 2,885,108
 31,682,754
 123,980,894
 155,663,648
 (40,957,341) 114,706,307
 58,055,099
BerkeleyanBerkeley, CA (G) 1998 56
 4,377,000
 16,022,110
 301,952
 4,377,000
 16,324,062
 20,701,062
 (4,008,100) 16,692,962
 8,290,000
Berkeley, CA Y 1998 56
 4,377,000
 16,022,110
 321,597
 4,377,000
 16,343,707
 20,720,707
 (5,080,620) 15,640,087
 8,290,000
Brookside (CO)Boulder, CO 1993 144
 3,600,400
 10,211,159
 2,457,688
 3,600,400
 12,668,847
 16,269,247
 (6,141,451) 10,127,796
  (K)
Calvert WoodleyWashington, D.C.  1962 136
 12,600,000
 43,527,379
 733,195
 12,600,000
 44,260,574
 56,860,574
 (5,010,638) 51,849,936
  (L)
CanterburyGermantown, MD 1986 544
 2,781,300
 32,942,531
 14,663,505
 2,781,300
 47,606,036
 50,387,336
 (29,231,534) 21,155,802
 31,680,000
Germantown, MD  1986 544
 2,781,300
 32,942,531
 15,098,222
 2,781,300
 48,040,753
 50,822,053
 (33,408,506) 17,413,547
 31,680,000
Cape House IJacksonville, FL 1998 240
 4,800,000
 22,484,240
 699,067
 4,800,000
 23,183,307
 27,983,307
 (7,222,093) 20,761,214
 13,325,916
Cape House IIJacksonville, FL 1998 240
 4,800,000
 22,229,836
 1,882,338
 4,800,000
 24,112,174
 28,912,174
 (7,720,133) 21,192,041
 12,705,475
Carmel TerraceSan Diego, CA 1988-1989 384
 2,288,300
 20,596,281
 10,197,424
 2,288,300
 30,793,705
 33,082,005
 (19,654,063) 13,427,942
  (J)
San Diego, CA  1988-1989 384
 2,288,300
 20,596,281
 10,568,110
 2,288,300
 31,164,391
 33,452,691
 (22,658,333) 10,794,358
  (J)
Cascade at LandmarkAlexandria, VA 1990 277
 3,603,400
 19,657,554
 8,058,058
 3,603,400
 27,715,612
 31,319,012
 (15,450,921) 15,868,091
 31,921,089
Chelsea SquareRedmond, WA 1991 113
 3,397,100
 9,289,074
 1,650,412
 3,397,100
 10,939,486
 14,336,586
 (5,456,865) 8,879,721
  (K)
Redmond, WA  1991 113
 3,397,100
 9,289,074
 1,788,938
 3,397,100
 11,078,012
 14,475,112
 (6,337,147) 8,137,965
 9,270,000
Church CornerCambridge, MA (G) 1987 85
 5,220,000
 16,744,643
 1,461,569
 5,220,000
 18,206,212
 23,426,212
 (5,666,620) 17,759,592
 12,000,000
Cierra CrestDenver, CO 1996 480
 4,803,100
 34,894,898
 4,883,250
 4,803,100
 39,778,148
 44,581,248
 (21,390,229) 23,191,019
  (K)
City PointeFullerton, CA (G) 2004 183
 6,863,792
 36,476,208
 549,414
 6,863,792
 37,025,622
 43,889,414
 (5,887,612) 38,001,802
 22,530,961
Citrus SuitesSanta Monica, CA  1978 70
 9,000,000
 16,950,326
 123,388
 9,000,000
 17,073,714
 26,073,714
 (1,867,465) 24,206,249
  (L)
CityView at LongwoodBoston, MA (G) 1970 295
 14,704,898
 79,195,102
 6,560,442
 14,704,898
 85,755,544
 100,460,442
 (9,856,238) 90,604,204
 25,604,094
Boston, MA Y 1970 295
 14,704,898
 79,195,102
 9,272,973
 14,704,898
 88,468,075
 103,172,973
 (17,874,351) 85,298,622
 23,780,076
Clarendon, TheArlington, VA (G) 2005 292
 30,400,340
 103,824,660
 992,382
 30,400,340
 104,817,042
 135,217,382
 (10,223,134) 124,994,248
 45,588,729
Arlington, VA Y 2005 292
 30,400,340
 103,824,660
 1,980,446
 30,400,340
 105,805,106
 136,205,446
 (18,582,643) 117,622,803
 40,376,421
Colorado PointeDenver, CO 2006 193
 5,790,000
 28,815,607
 520,224
 5,790,000
 29,335,831
 35,125,831
 (8,636,396) 26,489,435
  (J)
Copper CanyonHighlands Ranch, CO 1999 222
 1,442,212
 16,251,114
 1,458,531
 1,442,212
 17,709,645
 19,151,857
 (8,646,200) 10,505,657
  (J)
Country BrookChandler, AZ 1986-1996 396
 1,505,219
 29,542,535
 6,179,246
 1,505,219
 35,721,781
 37,227,000
 (18,250,640) 18,976,360
  (J)
Creekside (San Mateo)San Mateo, CA 1985 192
 9,606,600
 21,193,232
 3,217,228
 9,606,600
 24,410,460
 34,017,060
 (11,822,291) 22,194,769
  (K)
Crescent at Cherry CreekDenver, CO 1994 216
 2,594,000
 15,149,470
 3,570,821
 2,594,000
 18,720,291
 21,314,291
 (9,687,890) 11,626,401
  (J)
Cleveland HouseWashington, D.C.  1953 214
 18,300,000
 66,392,414
 1,085,128
 18,300,000
 67,477,542
 85,777,542
 (7,336,935) 78,440,607
  (L)
Columbia CrossingArlington, VA  1991 247
 23,500,000
 53,045,073
 1,524,626
 23,500,000
 54,569,699
 78,069,699
 (6,390,653) 71,679,046
  (L)
Connecticut HeightsWashington, D.C.  1974 518
 27,600,000
 114,002,295
 523,868
 27,600,000
 114,526,163
 142,126,163
 (12,120,961) 130,005,202
  (K)
Deerwood (SD)San Diego, CA 1990 316
 2,082,095
 18,739,815
 13,582,795
 2,082,095
 32,322,610
 34,404,705
 (20,753,292) 13,651,413
  (J)
San Diego, CA  1990 316
 2,082,095
 18,739,815
 14,095,827
 2,082,095
 32,835,642
 34,917,737
 (23,757,806) 11,159,931
  (J)
Estates at Maitland SummitOrlando, FL 1998 272
 9,520,000
 28,352,160
 1,081,473
 9,520,000
 29,433,633
 38,953,633
 (9,786,728) 29,166,905
  (K)
Estates at TanglewoodWestminster, CO 2003 504
 7,560,000
 51,256,538
 2,353,728
 7,560,000
 53,610,266
 61,170,266
 (16,136,747) 45,033,519
  (I)
Del Mar RidgeSan Diego, CA  1998 181
 7,801,824
 36,948,176
 3,108,004
 7,801,824
 40,056,180
 47,858,004
 (10,328,077) 37,529,927
 23,789,381
Estancia at Santa Clara (fka Santa Clara)Santa Clara, CA  2000 450
 
 123,759,804
 526,676
 
 124,286,480
 124,286,480
 (13,537,262) 110,749,218
  (L)
FairchaseFairfax, VA  2007 392
 23,500,000
 87,722,321
 269,692
 23,500,000
 87,992,013
 111,492,013
 (9,395,216) 102,096,797
  (L)
FairfieldStamford, CT (G) 1996 263
 6,510,200
 39,690,120
 5,842,540
 6,510,200
 45,532,660
 52,042,860
 (23,653,659) 28,389,201
 34,595,000
Stamford, CT Y 1996 263
 6,510,200
 39,690,120
 6,459,297
 6,510,200
 46,149,417
 52,659,617
 (27,466,826) 25,192,791
 34,595,000
Fine Arts BuildingBerkeley, CA (G) 2004 100
 7,817,000
 26,462,772
 126,659
 7,817,000
 26,589,431
 34,406,431
 (6,531,190) 27,875,241
 16,215,000
Berkeley, CA Y 2004 100
 7,817,000
 26,462,772
 302,689
 7,817,000
 26,765,461
 34,582,461
 (8,237,485) 26,344,976
 16,215,000
Flats at DuPont CircleWashington, D.C.  1967 306
 35,200,000
 108,768,198
 504,057
 35,200,000
 109,272,255
 144,472,255
 (11,204,638) 133,267,617
  (L)
Gaia BuildingBerkeley, CA Y 2000 91
 7,113,000
 25,623,826
 225,339
 7,113,000
 25,849,165
 32,962,165
 (7,962,885) 24,999,280
 14,630,000

S-10



EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation
December 31, 20122014
DescriptionDescription   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/12        Description   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/14        
Apartment NameLocation  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/12 (B)EncumbrancesLocation Retail/Commercial Space (G)  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/14 (B)Encumbrances
Gaia BuildingBerkeley, CA (G) 2000 91
 7,113,000
 25,623,826
 182,302
 7,113,000
 25,806,128
 32,919,128
 (6,314,824) 26,604,304
 14,630,000
Gaithersburg StationGaithersburg, MD Y 2013 389
 17,500,000
 74,556,144
 231,854
 17,500,000
 74,787,998
 92,287,998
 (6,934,203) 85,353,795
 98,884,291
Gateway at Malden CenterMalden, MA (G) 1988 203
 9,209,780
 25,722,666
 8,897,576
 9,209,780
 34,620,242
 43,830,022
 (14,086,455) 29,743,567
 14,970,000
Malden, MA Y 1988 203
 9,209,780
 25,722,666
 12,495,969
 9,209,780
 38,218,635
 47,428,415
 (17,530,227) 29,898,188
 14,970,000
Glen MeadowFranklin, MA 1971 288
 2,339,330
 16,133,588
 3,738,664
 2,339,330
 19,872,252
 22,211,582
 (9,797,743) 12,413,839
 73,023
GloLos Angeles, CA (G) 2008 201
 16,047,022
 48,650,963
 79,365
 16,047,022
 48,730,328
 64,777,350
 (3,923,877) 60,853,473
 31,639,508
Los Angeles, CA Y 2008 201
 16,047,023
 48,650,963
 394,064
 16,047,023
 49,045,027
 65,092,050
 (8,010,461) 57,081,589
 31,938,525
Grandeville at River PlaceOviedo, FL 2002 280
 6,000,000
 23,114,693
 2,003,967
 6,000,000
 25,118,660
 31,118,660
 (8,753,388) 22,365,272
 23,789,381
Greenwood ParkCentennial, CO 1994 291
 4,365,000
 38,372,440
 1,506,405
 4,365,000
 39,878,845
 44,243,845
 (10,442,337) 33,801,508
  (K)
Greenwood PlazaCentennial, CO 1996 266
 3,990,000
 35,846,708
 2,104,789
 3,990,000
 37,951,497
 41,941,497
 (10,056,365) 31,885,132
  (K)
Harbor StepsSeattle, WA (G) 2000 738
 59,900,000
 158,829,432
 10,108,872
 59,900,000
 168,938,304
 228,838,304
 (47,176,332) 181,661,972
 116,707,586
HathawayLong Beach, CA 1987 385
 2,512,500
 22,611,912
 6,999,887
 2,512,500
 29,611,799
 32,124,299
 (18,254,266) 13,870,033
 46,517,800
Long Beach, CA  1987 385
 2,512,500
 22,611,912
 7,849,296
 2,512,500
 30,461,208
 32,973,708
 (20,670,436) 12,303,272
 46,517,800
Heights on Capitol HillSeattle, WA (G) 2006 104
 5,425,000
 21,138,028
 156,462
 5,425,000
 21,294,490
 26,719,490
 (5,561,995) 21,157,495
 28,180,585
Seattle, WA Y 2006 104
 5,425,000
 21,138,028
 265,813
 5,425,000
 21,403,841
 26,828,841
 (6,924,808) 19,904,033
 28,180,585
Heritage at Stone RidgeBurlington, MA 2005 180
 10,800,000
 31,808,335
 811,286
 10,800,000
 32,619,621
 43,419,621
 (9,708,789) 33,710,832
 27,554,850
HeronfieldKirkland, WA 1990 202
 9,245,000
 27,017,749
 1,390,613
 9,245,000
 28,408,362
 37,653,362
 (7,709,518) 29,943,844
  (J)
Kirkland, WA  1990 202
 9,245,000
 27,017,749
 2,262,931
 9,245,000
 29,280,680
 38,525,680
 (9,728,197) 28,797,483
  (J)
Ivory WoodBothell, WA 2000 144
 2,732,800
 13,888,282
 623,037
 2,732,800
 14,511,319
 17,244,119
 (4,834,547) 12,409,572
 8,020,000
Bothell, WA  2000 144
 2,732,800
 13,888,282
 751,887
 2,732,800
 14,640,169
 17,372,969
 (5,844,211) 11,528,758
 8,020,000
Kelvin Court (fka Alta Pacific)Irvine, CA 2008 132
 10,752,145
 34,647,190
 120,472
 10,752,145
 34,767,662
 45,519,807
 (5,995,083) 39,524,724
 26,495,000
Irvine, CA  2008 132
 10,752,145
 34,649,929
 248,840
 10,752,145
 34,898,769
 45,650,914
 (8,359,653) 37,291,261
 26,495,000
La Terrazza at Colma StationColma, CA (G) 2005 153
 
 41,251,044
 527,066
 
 41,778,110
 41,778,110
 (10,146,352) 31,631,758
 25,175,000
Colma, CA Y 2005 153
 
 41,251,044
 642,535
 
 41,893,579
 41,893,579
 (12,830,190) 29,063,389
 25,175,000
Laguna ClaraSanta Clara, CA  1972 264
 13,642,420
 29,707,475
 4,256,707
 13,642,420
 33,964,182
 47,606,602
 (14,568,252) 33,038,350
  (J)
Liberty ParkBrain Tree, MA 2000 202
 5,977,504
 26,749,111
 2,460,232
 5,977,504
 29,209,343
 35,186,847
 (10,761,276) 24,425,571
 24,980,280
Braintree, MA  2000 202
 5,977,504
 26,749,111
 3,730,323
 5,977,504
 30,479,434
 36,456,938
 (13,021,186) 23,435,752
 24,980,280
Liberty TowerArlington, VA (G) 2008 235
 16,382,822
 83,817,078
 742,901
 16,382,822
 84,559,979
 100,942,801
 (10,769,392) 90,173,409
 48,013,044
Arlington, VA Y 2008 235
 16,382,822
 83,817,078
 1,124,478
 16,382,822
 84,941,556
 101,324,378
 (17,478,810) 83,845,568
 46,865,218
Lincoln HeightsQuincy, MA 1991 336
 5,928,400
 33,595,262
 10,858,842
 5,928,400
 44,454,104
 50,382,504
 (23,578,128) 26,804,376
  (K)
LindleyEncino, CA 2004 129
 5,805,000
 25,705,000
 514,251
 5,805,000
 26,219,251
 32,024,251
 (2,872,823) 29,151,428
 21,774,431
Lindley ApartmentsEncino, CA  2004 129
 5,805,000
 25,705,000
 681,636
 5,805,000
 26,386,636
 32,191,636
 (5,246,707) 26,944,929
 20,382,643
Longview PlaceWaltham, MA 2004 348
 20,880,000
 90,255,509
 2,585,682
 20,880,000
 92,841,191
 113,721,191
 (24,878,084) 88,843,107
 60,073,423
Waltham, MA  2004 348
 20,880,000
 90,255,509
 3,770,380
 20,880,000
 94,025,889
 114,905,889
 (31,602,144) 83,303,745
 60,073,423
Market Street VillageSan Diego, CA 2006 229
 13,740,000
 40,757,301
 663,637
 13,740,000
 41,420,938
 55,160,938
 (10,928,473) 44,232,465
  (J)
San Diego, CA  2006 229
 13,740,000
 40,757,301
 1,480,272
 13,740,000
 42,237,573
 55,977,573
 (13,620,631) 42,356,942
  (J)
MarksEnglewood, CO (G) 1987 616
 4,928,500
 44,622,314
 10,289,760
 4,928,500
 54,912,074
 59,840,574
 (29,539,822) 30,300,752
 19,195,000
Englewood, CO Y 1987 616
 4,928,500
 44,622,314
 11,548,101
 4,928,500
 56,170,415
 61,098,915
 (34,206,804) 26,892,111
 19,195,000
Metro on FirstSeattle, WA (G) 2002 102
 8,540,000
 12,209,981
 355,218
 8,540,000
 12,565,199
 21,105,199
 (3,611,780) 17,493,419
 22,843,410
Seattle, WA Y 2002 102
 8,540,000
 12,209,981
 452,229
 8,540,000
 12,662,210
 21,202,210
 (4,480,929) 16,721,281
 22,843,410
Midtown 24Plantation, FL Y 2010 247
 10,129,900
 58,770,100
 1,401,853
 10,129,900
 60,171,953
 70,301,853
 (10,913,036) 59,388,817
  (J)
Mill CreekMilpitas, CA 1991 516
 12,858,693
 57,168,503
 3,411,695
 12,858,693
 60,580,198
 73,438,891
 (21,470,962) 51,967,929
 69,312,259
Milpitas, CA  1991 516
 12,858,693
 57,168,503
 5,442,026
 12,858,693
 62,610,529
 75,469,222
 (25,958,217) 49,511,005
 69,312,259
Miramar LakesMiramar, FL 2003 344
 17,200,000
 51,487,235
 1,841,780
 17,200,000
 53,329,015
 70,529,015
 (15,869,408) 54,659,607
  (L)
Missions at SunbowChula Vista, CA 2003 336
 28,560,000
 59,287,595
 1,474,195
 28,560,000
 60,761,790
 89,321,790
 (18,989,124) 70,332,666
 49,466,827
ModaSeattle, WA (G) 2009 251
 12,649,228
 36,842,012
 575,003
 12,649,228
 37,417,015
 50,066,243
 (4,262,856) 45,803,387
  (M)
Seattle, WA Y 2009 251
 12,649,228
 36,842,012
 751,889
 12,649,228
 37,593,901
 50,243,129
 (7,947,470) 42,295,659
  (M)
Monte ViejoPhoenix, AZ 2004 480
 12,700,000
 45,926,784
 1,167,397
 12,700,000
 47,094,181
 59,794,181
 (15,568,004) 44,226,177
 40,046,245
Phoenix, AZ  2004 480
 12,700,000
 45,926,784
 1,356,649
 12,700,000
 47,283,433
 59,983,433
 (18,448,547) 41,534,886
 38,998,007
MontecitoValencia, CA 1999 210
 8,400,000
 24,709,146
 1,943,224
 8,400,000
 26,652,370
 35,052,370
 (11,538,714) 23,513,656
  (J)
Montierra (CA)San Diego, CA 1990 272
 8,160,000
 29,360,938
 6,924,642
 8,160,000
 36,285,580
 44,445,580
 (17,100,722) 27,344,858
  (J)
San Diego, CA  1990 272
 8,160,000
 29,360,938
 7,349,217
 8,160,000
 36,710,155
 44,870,155
 (20,207,547) 24,662,608
  (J)
Mosaic at MetroHyattsville, MD 2008 260
 
 59,582,698
 225,848
 
 59,808,546
 59,808,546
 (8,905,855) 50,902,691
 44,242,551
Hyattsville, MD  2009 260
 
 59,580,898
 396,392
 
 59,977,290
 59,977,290
 (13,426,350) 46,550,940
 43,349,098
Mountain TerraceStevenson Ranch, CA 1992 510
 3,966,500
 35,814,995
 11,880,404
 3,966,500
 47,695,399
 51,661,899
 (26,027,707) 25,634,192
 57,428,472
New River CoveDavie, FL  1999 316
 15,800,000
 46,142,895
 2,112,295
 15,800,000
 48,255,190
 64,055,190
 (17,348,296) 46,706,894
  (J)
North Pier at HarborsideJersey City, NJ (I) 2003 297
 4,000,159
 94,290,590
 2,270,783
 4,000,159
 96,561,373
 100,561,532
 (29,127,561) 71,433,971
 87,104,293
Jersey City, NJ  2003 297
 4,000,159
 94,290,590
 2,508,073
 4,000,159
 96,798,663
 100,798,822
 (35,934,228) 64,864,594
  (I)
NorthparkBurlingame, CA 1972 510
 38,607,000
 77,477,449
 8,188,935
 38,607,000
 85,666,384
 124,273,384
 (12,263,687) 112,009,697
 66,848,062
Burlingame, CA  1972 510
 38,607,000
 77,477,449
 11,535,799
 38,607,000
 89,013,248
 127,620,248
 (21,086,248) 106,534,000
 62,833,873
Oak Mill IIGermantown, MD 1985 192
 854,133
 10,233,947
 6,407,089
 854,133
 16,641,036
 17,495,169
 (10,175,811) 7,319,358
 9,600,000
Germantown, MD  1985 192
 854,133
 10,233,947
 6,614,557
 854,133
 16,848,504
 17,702,637
 (11,657,281) 6,045,356
 9,600,000
OaksSanta Clarita, CA 2000 520
 23,400,000
 61,020,438
 3,172,779
 23,400,000
 64,193,217
 87,593,217
 (22,524,758) 65,068,459
 39,300,896
Santa Clarita, CA  2000 520
 23,400,000
 61,020,438
 4,140,268
 23,400,000
 65,160,706
 88,560,706
 (27,139,584) 61,421,122
 37,159,525
Olde Redmond PlaceRedmond, WA 1986 192
 4,807,100
 14,126,038
 4,272,420
 4,807,100
 18,398,458
 23,205,558
 (10,211,706) 12,993,852
  (K)
Olympus TowersSeattle, WA (G) 2000 328
 14,752,034
 73,335,425
 3,733,218
 14,752,034
 77,068,643
 91,820,677
 (24,854,720) 66,965,957
 49,875,780
Seattle, WA Y 2000 328
 14,752,034
 73,335,425
 5,446,206
 14,752,034
 78,781,631
 93,533,665
 (30,519,078) 63,014,587
 49,875,780
Promenade at PeachtreeChamblee, GA 2001 406
 10,120,250
 31,219,739
 1,879,804
 10,120,250
 33,099,543
 43,219,793
 (11,135,840) 32,083,953
  (J)
Park Place at San Mateo (fka San Mateo)San Mateo, CA Y 2001 575
 71,900,000
 211,907,141
 2,736,590
 71,900,000
 214,643,731
 286,543,731
 (22,552,999) 263,990,732
  (L)
ProvidenceBothell, WA 2000 200
 3,573,621
 19,055,505
 649,064
 3,573,621
 19,704,569
 23,278,190
 (6,712,762) 16,565,428
  (I)
Bothell, WA  2000 200
 3,573,621
 19,055,505
 908,245
 3,573,621
 19,963,750
 23,537,371
 (8,060,429) 15,476,942
  (I)
Reserve at Clarendon Centre, TheArlington, VA (G) 2003 252
 10,500,000
 52,812,935
 3,274,267
 10,500,000
 56,087,202
 66,587,202
 (18,267,935) 48,319,267
  (J)
Arlington, VA Y 2003 252
 10,500,000
 52,812,935
 3,852,271
 10,500,000
 56,665,206
 67,165,206
 (22,423,199) 44,742,007
  (J)
Reserve at Eisenhower, TheAlexandria, VA 2002 226
 6,500,000
 34,585,060
 1,269,401
 6,500,000
 35,854,461
 42,354,461
 (12,633,606) 29,720,855
  (J)
Alexandria, VA  2002 226
 6,500,000
 34,585,060
 1,407,205
 6,500,000
 35,992,265
 42,492,265
 (15,227,463) 27,264,802
  (J)
Reserve at Empire LakesRancho Cucamonga, CA 2005 467
 16,345,000
 73,080,670
 1,720,059
 16,345,000
 74,800,729
 91,145,729
 (20,699,538) 70,446,191
  (I)
Rancho Cucamonga, CA  2005 467
 16,345,000
 73,080,670
 2,097,816
 16,345,000
 75,178,486
 91,523,486
 (25,847,398) 65,676,088
  (I)
Reserve at Fairfax CornerFairfax, VA 2001 652
 15,804,057
 63,129,051
 3,830,832
 15,804,057
 66,959,883
 82,763,940
 (24,763,444) 58,000,496
 84,778,875
Fairfax, VA  2001 652
 15,804,057
 63,129,050
 6,733,306
 15,804,057
 69,862,356
 85,666,413
 (29,870,640) 55,795,773
 84,778,876
Reserve at Potomac YardAlexandria, VA 2002 588
 11,918,917
 68,862,641
 5,048,808
 11,918,917
 73,911,449
 85,830,366
 (23,292,875) 62,537,491
 66,470,000
Alexandria, VA  2002 588
 11,918,917
 68,862,641
 6,341,718
 11,918,917
 75,204,359
 87,123,276
 (28,902,316) 58,220,960
 66,470,000
Reserve at Town Center (WA)Mill Creek, WA 2001 389
 10,369,400
 41,172,081
 1,984,196
 10,369,400
 43,156,277
 53,525,677
 (13,983,352) 39,542,325
 29,160,000
Mill Creek, WA  2001 389
 10,369,400
 41,172,081
 2,404,316
 10,369,400
 43,576,397
 53,945,797
 (17,140,399) 36,805,398
 29,160,000
Rianna IISeattle, WA (G) 2002 78
 2,161,840
 14,433,614
 63,293
 2,161,840
 14,496,907
 16,658,747
 (2,395,149) 14,263,598
 10,102,987
Seattle, WA Y 2002 78
 2,161,840
 14,433,614
 219,336
 2,161,840
 14,652,950
 16,814,790
 (3,719,806) 13,094,984
 9,664,461
Rockingham GlenWest Roxbury, MA 1974 143
 1,124,217
 7,515,160
 1,873,296
 1,124,217
 9,388,456
 10,512,673
 (4,475,844) 6,036,829
 1,110,388
West Roxbury, MA  1974 143
 1,124,217
 7,515,160
 2,127,798
 1,124,217
 9,642,958
 10,767,175
 (5,189,711) 5,577,464
 732,326
Siena TerraceLake Forest, CA  1988 356
 8,900,000
 24,083,024
 6,513,124
 8,900,000
 30,596,148
 39,496,148
 (16,196,382) 23,299,766
 38,440,808
SkyviewRancho Santa Margarita, CA  1999 260
 3,380,000
 21,952,863
 2,762,747
 3,380,000
 24,715,610
 28,095,610
 (13,314,866) 14,780,744
 30,889,928
SoMa Square Apartments (fka South Market)San Francisco, CA Y 1986 410
 79,900,000
 177,316,977
 2,711,818
 79,900,000
 180,028,795
 259,928,795
 (19,032,108) 240,896,687
  (L)
Stonegate (CO)Broomfield, CO  2003 350
 8,750,000
 32,950,375
 3,208,246
 8,750,000
 36,158,621
 44,908,621
 (13,931,379) 30,977,242
  (I)
Stoney RidgeDale City, VA  1985 264
 8,000,000
 24,147,091
 5,813,599
 8,000,000
 29,960,690
 37,960,690
 (13,117,254) 24,843,436
 13,414,254
Summerset VillageChatsworth, CA  1985 280
 2,629,804
 23,670,889
 6,735,640
 2,629,804
 30,406,529
 33,036,333
 (18,638,374) 14,397,959
 38,039,912
TalleyrandTarrytown, NY  1997-1998 300
 12,000,000
 49,838,160
 4,373,570
 12,000,000
 54,211,730
 66,211,730
 (25,824,997) 40,386,733
 35,000,000
TeresinaChula Vista, CA  2000 440
 28,600,000
 61,916,670
 2,524,216
 28,600,000
 64,440,886
 93,040,886
 (23,028,983) 70,011,903
 41,153,983
ToscanaIrvine, CA  1991/1993 563
 39,410,000
 50,806,072
 8,065,576
 39,410,000
 58,871,648
 98,281,648
 (30,358,453) 67,923,195
 71,243,194



S-11




EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation
December 31, 20122014
Description   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/12        
Apartment NameLocation  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/12 (B)Encumbrances
Rolling Green (Amherst)Amherst, MA 1970 204
 1,340,702
 8,962,317
 3,729,768
 1,340,702
 12,692,085
 14,032,787
 (6,558,871) 7,473,916
 1,820,672
Rolling Green (Milford)Milford, MA 1970 304
 2,012,350
 13,452,150
 4,991,894
 2,012,350
 18,444,044
 20,456,394
 (8,987,510) 11,468,884
 2,136,972
Savannah LakesBoynton Beach, FL 1991 466
 7,000,000
 30,263,310
 6,874,423
 7,000,000
 37,137,733
 44,137,733
 (14,707,744) 29,429,989
 38,440,808
Savannah MidtownAtlanta, GA 2000 322
 7,209,873
 29,371,164
 2,886,793
 7,209,873
 32,257,957
 39,467,830
 (11,031,647) 28,436,183
 17,800,000
Savoy at Dayton Station I & II (fka Savoy I)Aurora, CO 2001 444
 5,450,295
 38,765,670
 2,866,964
 5,450,295
 41,632,634
 47,082,929
 (14,134,433) 32,948,496
  (K)
Sheffield CourtArlington, VA 1986 597
 3,342,381
 31,337,332
 11,837,473
 3,342,381
 43,174,805
 46,517,186
 (25,591,749) 20,925,437
  (K)
Sonata at Cherry CreekDenver, CO 1999 183
 5,490,000
 18,130,479
 1,441,097
 5,490,000
 19,571,576
 25,061,576
 (8,409,698) 16,651,878
 21,776,367
Sonterra at Foothill RanchFoothill Ranch, CA 1997 300
 7,503,400
 24,048,507
 1,768,695
 7,503,400
 25,817,202
 33,320,602
 (13,328,413) 19,992,189
  (K)
South WindsFall River, MA 1971 404
 2,481,821
 16,780,359
 4,484,858
 2,481,821
 21,265,217
 23,747,038
 (10,380,323) 13,366,715
 3,315,913
Stonegate (CO)Broomfield, CO 2003 350
 8,750,000
 32,950,375
 2,950,758
 8,750,000
 35,901,133
 44,651,133
 (11,460,761) 33,190,372
  (I)
Stoney RidgeDale City, VA 1985 264
 8,000,000
 24,147,091
 5,550,155
 8,000,000
 29,697,246
 37,697,246
 (10,749,305) 26,947,941
 14,329,477
Summerset VillageChatsworth, CA 1985 280
 2,629,804
 23,670,889
 5,392,452
 2,629,804
 29,063,341
 31,693,145
 (16,036,741) 15,656,404
 38,039,912
Summit at Lake UnionSeattle, WA 1995 -1997 150
 1,424,700
 12,852,461
 4,033,614
 1,424,700
 16,886,075
 18,310,775
 (9,120,808) 9,189,967
  (K)
SunforestDavie, FL 1989 494
 10,000,000
 32,124,850
 4,773,222
 10,000,000
 36,898,072
 46,898,072
 (14,182,647) 32,715,425
  (K)
Sunforest IIDavie, FL (F) 
 
 355,718
 
 
 355,718
 355,718
 
 355,718
  (K)
TalleyrandTarrytown, NY 1997-1998 300
 12,000,000
 49,838,160
 3,921,135
 12,000,000
 53,759,295
 65,759,295
 (21,857,136) 43,902,159
 35,000,000
TeresinaChula Vista, CA 2000 440
 28,600,000
 61,916,670
 2,124,429
 28,600,000
 64,041,099
 92,641,099
 (18,916,638) 73,724,461
 42,711,912
Touriel BuildingBerkeley, CA (G) 2004 35
 2,736,000
 7,810,027
 146,325
 2,736,000
 7,956,352
 10,692,352
 (2,017,170) 8,675,182
 5,050,000
Town Square at Mark Center I (fka Millbrook I)Alexandria, VA 1996 406
 24,360,000
 86,178,714
 2,656,749
 24,360,000
 88,835,463
 113,195,463
 (25,894,801) 87,300,662
 77,353,222
Town Square at Mark Center Phase IIAlexandria, VA 2001 272
 15,568,464
 55,029,607
 362,128
 15,568,464
 55,391,735
 70,960,199
 (8,064,284) 62,895,915
 44,328,445
Tradition at AlafayaOviedo, FL 2006 253
 7,590,000
 31,881,505
 509,046
 7,590,000
 32,390,551
 39,980,551
 (10,140,996) 29,839,555
  (J)
Tuscany at LindberghAtlanta, GA 2001 324
 9,720,000
 40,874,023
 2,004,881
 9,720,000
 42,878,904
 52,598,904
 (14,424,459) 38,174,445
 29,826,475
Uptown SquareDenver, CO (G) 1999/2001 696
 17,492,000
 100,696,541
 2,796,860
 17,492,000
 103,493,401
 120,985,401
 (31,715,087) 89,270,314
 99,190,116
VersaillesWoodland Hills, CA 1991 253
 12,650,000
 33,656,292
 4,596,760
 12,650,000
 38,253,052
 50,903,052
 (14,048,807) 36,854,245
 30,372,953
Via VenturaScottsdale, AZ 1980 328
 1,351,786
 13,382,006
 8,275,544
 1,351,786
 21,657,550
 23,009,336
 (15,714,893) 7,294,443
  (J)
VintageOntario, CA 2005-2007 300
 7,059,230
 47,677,762
 317,138
 7,059,230
 47,994,900
 55,054,130
 (12,659,564) 42,394,566
 33,000,000
Warwick StationWestminster, CO 1986 332
 2,274,121
 21,113,974
 3,260,943
 2,274,121
 24,374,917
 26,649,038
 (13,454,735) 13,194,303
 8,355,000
Westwood GlenWestwood, MA 1972 156
 1,616,505
 10,806,004
 1,944,100
 1,616,505
 12,750,104
 14,366,609
 (5,538,830) 8,827,779
 45,194
Whisper CreekDenver, CO 2002 272
 5,310,000
 22,998,558
 1,153,349
 5,310,000
 24,151,907
 29,461,907
 (7,741,554) 21,720,353
 13,580,000
Woodlake (WA)Kirkland, WA 1984 288
 6,631,400
 16,735,484
 3,050,123
 6,631,400
 19,785,607
 26,417,007
 (10,524,036) 15,892,971
 (K)
WoodleafCampbell, CA 1984 178
 8,550,600
 16,988,183
 3,462,069
 8,550,600
 20,450,252
 29,000,852
 (9,684,687) 19,316,165
 17,858,854
Wholly Owned Encumbered    33,124
 1,111,832,021
 4,225,841,241
 379,252,282
 1,111,832,021
 4,605,093,523
 5,716,925,544
 (1,486,115,893) 4,230,809,651
 2,392,135,994
Partially Owned Unencumbered:                       
2300 ElliottSeattle, WA 1992 92
 796,800
 7,173,725
 6,092,622
 796,800
 13,266,347
 14,063,147
 (8,767,366) 5,295,781
 
400 Park Avenue South (EQR)New York, NY (F) 
 76,292,169
 16,082,096
 
 76,292,169
 16,082,096
 92,374,265
 
 92,374,265
 
400 Park Avenue South (Toll)New York, NY (F) 
 58,090,357
 6,354,921
 
 58,090,357
 6,354,921
 64,445,278
 
 64,445,278
 
Canyon RidgeSan Diego, CA 1989 162
 4,869,448
 11,955,063
 1,901,202
 4,869,448
 13,856,265
 18,725,713
 (7,602,815) 11,122,898
 
Copper CreekTempe, AZ 1984 144
 1,017,400
 9,158,259
 2,047,476
 1,017,400
 11,205,735
 12,223,135
 (6,469,568) 5,753,567
 
Country OaksAgoura Hills, CA 1985 256
 6,105,000
 29,561,865
 3,379,334
 6,105,000
 32,941,199
 39,046,199
 (13,229,506) 25,816,693
 
Fox RidgeEnglewood, CO 1984 300
 2,490,000
 17,522,114
 3,894,256
 2,490,000
 21,416,370
 23,906,370
 (9,920,955) 13,985,415
 
Hudson Crossing IINew York, NY (F) 
 5,000,000
 
 
 5,000,000
 
 5,000,000
 
 5,000,000
 
Monterra in Mill CreekMill Creek, WA 2003 139
 2,800,000
 13,255,122
 338,019
 2,800,000
 13,593,141
 16,393,141
 (4,144,398) 12,248,743
 
Preserve at BriarcliffAtlanta, GA 1994 182
 6,370,000
 17,766,322
 830,627
 6,370,000
 18,596,949
 24,966,949
 (5,411,770) 19,555,179
 
Strayhorse at Arrowhead RanchGlendale, AZ 1998 136
 4,400,000
 12,968,002
 313,368
 4,400,000
 13,281,370
 17,681,370
 (3,953,471) 13,727,899
 
Willow Brook (CA)Pleasant Hill, CA 1985 228
 5,055,000
 38,388,672
 3,057,695
 5,055,000
 41,446,367
 46,501,367
 (13,325,998) 33,175,369
 
Partially Owned Unencumbered   1,639
 173,286,174
 180,186,161
 21,854,599
 173,286,174
 202,040,760
 375,326,934
 (72,825,847) 302,501,087
 
Description   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/14        
Apartment NameLocation Retail/Commercial Space (G)  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/14 (B)Encumbrances
Touriel BuildingBerkeley, CA Y 2004 35
 2,736,000
 7,810,027
 173,049
 2,736,000
 7,983,076
 10,719,076
 (2,537,090) 8,181,986
 5,050,000
Town Square at Mark Center I (fka Millbrook I)Alexandria, VA  1996 406
 24,360,000
 86,178,714
 3,101,186
 24,360,000
 89,279,900
 113,639,900
 (31,779,511) 81,860,389
 77,353,222
Uptown SquareDenver, CO Y 1999/2001 696
 17,492,000
 100,696,541
 4,323,125
 17,492,000
 105,019,666
 122,511,666
 (38,387,874) 84,123,792
 99,190,116
VersaillesWoodland Hills, CA  1991 253
 12,650,000
 33,656,292
 5,439,447
 12,650,000
 39,095,739
 51,745,739
 (16,887,476) 34,858,263
 30,372,953
Versailles (K-Town)Los Angeles, CA  2008 225
 10,590,975
 44,409,025
 1,089,480
 10,590,975
 45,498,505
 56,089,480
 (10,851,277) 45,238,203
 29,826,475
Victor on VeniceLos Angeles, CA Y 2006 115
 10,350,000
 35,433,437
 493,945
 10,350,000
 35,927,382
 46,277,382
 (11,164,686) 35,112,696
  (J)
VintageOntario, CA  2005-2007 300
 7,059,230
 47,677,762
 418,205
 7,059,230
 48,095,967
 55,155,197
 (15,673,129) 39,482,068
 33,000,000
Vintage at 425 Broadway (fka Promenade)Santa Monica, CA Y 1934/2001 58
 9,000,000
 13,961,523
 354,858
 9,000,000
 14,316,381
 23,316,381
 (1,915,005) 21,401,376
  (L)
Vista on CourthouseArlington, VA  2008 220
 15,550,260
 69,449,740
 1,100,172
 15,550,260
 70,549,912
 86,100,172
 (16,370,415) 69,729,757
 31,380,000
Water Park TowersArlington, VA  1989 362
 34,400,000
 108,485,859
 3,570,221
 34,400,000
 112,056,080
 146,456,080
 (12,141,171) 134,314,909
  (K)
West 54thNew York, NY Y 2001 222
 60,900,000
 48,193,837
 320,475
 60,900,000
 48,514,312
 109,414,312
 (7,362,247) 102,052,065
 46,859,227
Westgate (fka Westgate I)Pasadena, CA  2010 480
 22,898,848
 133,553,692
 348,871
 22,898,848
 133,902,563
 156,801,411
 (18,556,819) 138,244,592
 96,935,000
WoodleafCampbell, CA  1984 178
 8,550,600
 16,988,183
 4,312,027
 8,550,600
 21,300,210
 29,850,810
 (11,452,912) 18,397,898
 17,858,854
Portfolio/Entity Encumbrances (1)                        2,099,338,962
EQR Wholly Owned Encumbered      29,923
 1,889,558,099
 5,894,004,795
 330,213,229
 1,889,558,099
 6,224,218,024
 8,113,776,123
 (1,587,799,207) 6,525,976,916
 4,726,035,749
EQR Partially Owned Unencumbered:
 
 
 

 

 

 

 

 

 

 

 

 

2300 ElliottSeattle, WA  1992 92
 796,800
 7,173,725
 6,244,167
 796,800
 13,417,892
 14,214,692
 (9,635,532) 4,579,160
 
400 Park Avenue South (Toll)New York, NY  (F) 
 58,090,357
 55,679,496
 
 58,090,357
 55,679,496
 113,769,853
 
 113,769,853
 
Canyon RidgeSan Diego, CA  1989 162
 4,869,448
 11,955,064
 2,794,600
 4,869,448
 14,749,664
 19,619,112
 (8,662,269) 10,956,843
 
Country OaksAgoura Hills, CA  1985 256
 6,105,000
 29,561,865
 4,053,877
 6,105,000
 33,615,742
 39,720,742
 (15,662,969) 24,057,773
 
Fox RidgeEnglewood, CO  1984 300
 2,490,000
 17,522,114
 4,601,407
 2,490,000
 22,123,521
 24,613,521
 (11,718,055) 12,895,466
 
Monterra in Mill CreekMill Creek, WA  2003 139
 2,800,000
 13,255,123
 670,037
 2,800,000
 13,925,160
 16,725,160
 (5,104,802) 11,620,358
 
Prism at Park Avenue South (fka 400 Park Avenue South (EQR))New York, NY Y (F) 
 76,292,169
 150,666,648
 11,603
 76,292,169
 150,678,251
 226,970,420
 
 226,970,420
 
Strayhorse at Arrowhead RanchGlendale, AZ  1998 136
 4,400,000
 12,968,002
 443,437
 4,400,000
 13,411,439
 17,811,439
 (4,853,154) 12,958,285
 
Via Ventura (CA) (fka Ventura)Ventura, CA  2002 192
 8,600,000
 44,308,202
 406,230
 8,600,000
 44,714,432
 53,314,432
 (5,214,735) 48,099,697
 
Wood Creek II (fka Willow Brook (CA))Pleasant Hill, CA  1985 228
 5,055,000
 38,388,672
 4,889,178
 5,055,000
 43,277,850
 48,332,850
 (16,682,842) 31,650,008
 
EQR Partially Owned Unencumbered
 
 
 1,505
 169,498,774
 381,478,911
 24,114,536
 169,498,774
 405,593,447
 575,092,221
 (77,534,358) 497,557,863
 
EQR Partially Owned Encumbered:                         
Bellevue MeadowsBellevue, WA  1983 180
 4,507,100
 12,574,814
 4,524,770
 4,507,100
 17,099,584
 21,606,684
 (10,473,761) 11,132,923
 16,538,000
Canyon Creek (CA)San Ramon, CA  1984 268
 5,425,000
 18,812,121
 6,427,590
 5,425,000
 25,239,711
 30,664,711
 (12,764,001) 17,900,710
 28,200,000
Harrison Square (fka Elliot Bay)Seattle, WA Y 1992 166
 7,600,000
 35,844,345
 3,159,773
 7,600,000
 39,004,118
 46,604,118
 (3,837,725) 42,766,393
  (K)
Isle at Arrowhead RanchGlendale, AZ  1996 256
 1,650,237
 19,593,123
 2,216,333
 1,650,237
 21,809,456
 23,459,693
 (13,005,000) 10,454,693
 17,700,000
Lantern CoveFoster City, CA  1985 232
 6,945,000
 23,064,976
 5,705,946
 6,945,000
 28,770,922
 35,715,922
 (13,736,832) 21,979,090
 36,455,000
RosecliffQuincy, MA  1990 156
 5,460,000
 15,721,570
 2,561,718
 5,460,000
 18,283,288
 23,743,288
 (9,854,030) 13,889,258
 17,400,000
Schooner Bay IFoster City, CA  1985 168
 5,345,000
 20,390,618
 4,756,784
 5,345,000
 25,147,402
 30,492,402
 (12,000,181) 18,492,221
 28,870,000
Schooner Bay IIFoster City, CA  1985 144
 4,550,000
 18,064,764
 4,275,408
 4,550,000
 22,340,172
 26,890,172
 (10,806,797) 16,083,375
 26,175,000
Surrey DownsBellevue, WA  1986 122
 3,057,100
 7,848,618
 2,407,669
 3,057,100
 10,256,287
 13,313,387
 (6,009,471) 7,303,916
 9,829,000
Virgil SquareLos Angeles, CA  1979 142
 5,500,000
 15,216,613
 2,175,257
 5,500,000
 17,391,870
 22,891,870
 (6,559,144) 16,332,726
 9,900,000
Wisconsin PlaceChevy Chase, MD  2009 432
 
 172,089,355
 550,832
 
 172,640,187
 172,640,187
 (17,900,087) 154,740,100
 144,571,681
Portfolio/Entity Encumbrances (1)                        24,840,581
EQR Partially Owned Encumbered
 
 
 2,266
 50,039,437
 359,220,917
 38,762,080
 50,039,437
 397,982,997
 448,022,434
 (116,947,029) 331,075,405
 360,479,262
                          
Total Consolidated Investment in Real Estate      102,911
 $6,907,534,212
 $19,372,503,705
 $1,395,345,007
 $6,907,534,212
 $20,767,848,712
 $27,675,382,924
 $(5,432,805,335) $22,242,577,589
 $5,086,515,011


S-12


EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation
December 31, 2012
Description   Initial Cost to Company  Cost Capitalized Subsequent to Acquisition(Improvements, net) (E) Gross Amount Carried at Close of Period 12/31/12        
Apartment NameLocation  Date of Construction Units (H) Land  Building & Fixtures  Building & Fixtures Land  Building & Fixtures (A) Total (B) Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/12 (B)Encumbrances
Partially Owned Encumbered:                       
Bellevue MeadowsBellevue, WA 1983 180
 4,507,100
 12,574,814
 4,203,115
 4,507,100
 16,777,929
 21,285,029
 (8,891,561) 12,393,468
 16,538,000
Canyon Creek (CA)San Ramon, CA 1984 268
 5,425,000
 18,812,121
 6,276,196
 5,425,000
 25,088,317
 30,513,317
 (10,527,427) 19,985,890
 28,200,000
Isle at Arrowhead RanchGlendale, AZ 1996 256
 1,650,237
 19,593,123
 1,918,104
 1,650,237
 21,511,227
 23,161,464
 (11,451,766) 11,709,698
 17,700,000
Lantern CoveFoster City, CA 1985 232
 6,945,000
 23,064,976
 4,671,523
 6,945,000
 27,736,499
 34,681,499
 (11,224,944) 23,456,555
 36,455,000
RosecliffQuincy, MA 1990 156
 5,460,000
 15,721,570
 2,123,007
 5,460,000
 17,844,577
 23,304,577
 (8,282,174) 15,022,403
 17,400,000
Schooner Bay IFoster City, CA 1985 168
 5,345,000
 20,390,618
 4,297,996
 5,345,000
 24,688,614
 30,033,614
 (9,829,193) 20,204,421
 28,870,000
Schooner Bay IIFoster City, CA 1985 144
 4,550,000
 18,064,764
 3,954,034
 4,550,000
 22,018,798
 26,568,798
 (8,871,676) 17,697,122
 26,175,000
Scottsdale MeadowsScottsdale, AZ 1984 168
 1,512,000
 11,423,349
 1,769,044
 1,512,000
 13,192,393
 14,704,393
 (7,271,988) 7,432,405
 9,270,000
Surrey DownsBellevue, WA 1986 122
 3,057,100
 7,848,618
 2,247,834
 3,057,100
 10,096,452
 13,153,552
 (5,160,232) 7,993,320
 9,829,000
Virgil SquareLos Angeles, CA 1979 142
 5,500,000
 15,216,613
 1,604,433
 5,500,000
 16,821,046
 22,321,046
 (5,313,812) 17,007,234
 9,900,000
Partially Owned Encumbered    1,836
 43,951,437
 162,710,566
 33,065,286
 43,951,437
 195,775,852
 239,727,289
 (86,824,773) 152,902,516
 200,337,000
Portfolio/Entity Encumbrances (1)                     1,305,895,707
Total Consolidated Investment in Real Estate    110,331
 $5,060,413,242
 $14,521,790,283
 $1,426,225,729
 $5,060,413,242
 $15,948,016,012
 $21,008,429,254
 $(4,912,221,051) $16,096,208,203
 $3,898,368,701
(1)See attached Encumbrances Reconciliation



S-13S-12




EQUITY RESIDENTIAL
ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation
December 31, 20122014
NOTES:
(A)
The balance of furniture & fixtures included in the total investment in real estate amount was $1,343,765,1801,365,276,528 as of December 31, 20122014.
(B)
The cost, net of accumulated depreciation, for Federal Income Tax purposes as of December 31, 20122014 was approximately $11.216.7 billion.
(C)
The life to compute depreciation for building is 30 years, for building improvements ranges from 5 to 15 years, for furniture & fixtures and replacements is 5 to 10 years, and for lease intangibles is the average remaining term of each respective lease.
(D)
This asset consists of various acquisition dates and largely represents furniture, fixtures and equipment, leasehold improvements and capitalized software costs owned by the Management Business, which are generally depreciated over periods ranging from 3 to 7 years.
(E)Primarily represents capital expenditures for major maintenance and replacements incurred subsequent to each property’s acquisition date.
(F)Represents land and/or construction-in-progress on projects either held for future development or projects currently under development.
(G)A portion or all of these properties includes commercial space (retail, parking and/or office space).will include retail/commercial space.
(H)
Total properties and units exclude thethree unconsolidated properties containing 1,281 apartment units and two Military Housing consisting of 2properties and 5,039containing 5,033 units.
(I)through (K)(L) See Encumbrances Reconciliation schedule.
(L)Boot property for Freddie Mac mortgage pool.
(M)Boot Property for Bond Partnership mortgage pool.



S-14S-13



EXHIBIT INDEX
The exhibits listed below are filed as part of this report. References to exhibits or other filings under the caption “Location” indicate that the exhibit or other filing has been filed, that the indexed exhibit and the exhibit referred to are the same and that the exhibit referred to is incorporated by reference. The Commission file numbers for our Exchange Act filings referenced below are 1-12252 (Equity Residential) and 0-24920 (ERP Operating Limited Partnership).
Exhibit Description Location
3.1 Articles of Restatement of Declaration of Trust of Equity Residential dated December 9, 2004. Included as Exhibit 3.1 to Equity Residential’s Form 10-K for the year ended December 31, 2004.
3.2 Seventh Amended and Restated Bylaws of Equity Residential, effective as of December 14, 2010. Included as Exhibit 3.1 to Equity Residential's Form 8-K dated and filed on December 14, 2010.
3.3 Sixth Amended and Restated Agreement of Limited Partnership for ERP Operating Limited Partnership dated as of March 12, 2009. Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated March 12, 2009, filed on March 18, 2009.
3.4Form of Preference Units Term Sheet for 3.00% Series P Cumulative Redeemable Preference Units.Included as Exhibit 3.1 to ERP Operating Limited Partnership's Form 8-K dated November 26, 2014, filed on December 2, 2014.
4.1 Indenture, dated October 1, 1994, between the Operating Partnership and The Bank of New York Mellon Trust Company, N.A., as successor trustee (“Indenture”). Included as Exhibit 4(a) to ERP Operating Limited Partnership’s Form S-3 filed on October 7, 1994.
4.2 First Supplemental Indenture to Indenture, dated as of September 9, 2004. Included as Exhibit 4.2 to ERP Operating Limited Partnership’s Form 8-K, filed on September 10, 2004.
4.3 Second Supplemental Indenture to Indenture, dated as of August 23, 2006. Included as Exhibit 4.1 to ERP Operating Limited Partnership’s Form 8-K dated August 16, 2006, filed on August 23, 2006.
4.4 Third Supplemental Indenture to Indenture, dated as of June 4, 2007. Included as Exhibit 4.1 to ERP Operating Limited Partnership’s Form 8-K dated May 30, 2007, filed on June 1, 2007.
4.5 Fourth Supplemental Indenture to Indenture, dated as of December 12, 2011. Included as Exhibit 4.2 to ERP Operating Limited Partnership's Form 8-K dated December 7, 2011, filed on December 9, 2011.
4.6 Form of 5.2% Note due April 1, 2013.Included as Exhibit 4 to ERP Operating Limited Partnership’s Form 8-K, filed on March 19, 2003.
4.7Form of 5.25% Note due September 15, 2014.Included as Exhibit 4.1 to ERP Operating Limited Partnership’s Form 8-K, filed on September 10, 2004.
4.8Terms Agreement regarding 6.63% (subsequently remarketed to a 6.584% fixed rate) Notes due April 13, 2015. Included as Exhibit 1 to ERP Operating Limited Partnership’sPartnership's Form 8-K, filed on April 13, 1998.
4.94.7 Terms Agreement regarding 5.125% Notes due March 15, 2016. Included as Exhibit 1.1 to ERP Operating Limited Partnership’s Form 8-K, filed on September 13, 2005.
4.104.8 Form of 5.375% Note due August 1, 2016. Included as Exhibit 4.1 to ERP Operating Limited Partnership’s Form 8-K dated January 11, 2006, filed on January 18, 2006.
4.114.9 Form of 5.75% Note due June 15, 2017. Included as Exhibit 4.3 to ERP Operating Limited Partnership’s Form 8-K dated May 30, 2007, filed on June 1, 2007.
4.124.10 
Terms Agreement regarding 71/8% Notes due October 15, 2017.
 Included as Exhibit 1 to ERP Operating Limited Partnership’s Form 8-K, filed on October 9, 1997.
4.134.11Form of 2.375% Note due July 1, 2019.Included as Exhibit 4.1 to ERP Operating Limited Partnership's Form 8-K dated June 16, 2014, filed on June 18, 2014.
4.12 Form of 4.75% Note due July 15, 2020. Included as Exhibit 4.1 to ERP Operating Limited Partnership’s Form 8-K dated July 12, 2010, filed on July 15, 2010.
4.144.13 Form of 4.625% Note due December 15, 2021. Included as Exhibit 4.1 to ERP Operating Limited Partnership's Form 8-K dated December 7, 2011, filed on December 9, 2011.
4.14Form of 3.00% Note due April 15, 2023.Included as Exhibit 4.1 to ERP Operating Limited Partnership's Form 8-K dated April 3, 2013, filed on April 8, 2013.
4.15 Terms Agreement regarding 7.57% Notes due August 15, 2026. Included as Exhibit 1 to ERP Operating Limited Partnership’s Form 8-K, filed on August 13, 1996.
4.16Form of 4.500% Note due July 1, 2044.Included as Exhibit 4.2 to ERP Operating Limited Partnership's Form 8-K dated June 16, 2014, filed on June 18, 2014.





ExhibitDescriptionLocation
10.1*Noncompetition Agreement (Zell). Included as an exhibit to Equity Residential's Form S-11 Registration Statement, File No. 33-63158.
10.2*Noncompetition Agreement (Spector). Included as an exhibit to Equity Residential's Form S-11 Registration Statement, File No. 33-63158.
10.3*Form of Noncompetition Agreement (other officers). Included as an exhibit to Equity Residential's Form S-11 Registration Statement, File No. 33-63158.




ExhibitDescriptionLocation
10.4 Revolving Credit Agreement dated as of January 11, 2013 among ERP Operating Limited Partnership, Bank of America, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as Co-Syndication Agents, J.P. Morgan Securities LLC, Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arrangers and Joint Book Runners, and a syndicate of other banks (the “Revolving Credit Agreement”). Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated January 11, 2013, filed January 15, 2013.
10.5 Guaranty of Payment made as of January 11, 2013 between Equity Residential and Bank of America, N.A., as administrative agent for the banks party to the Revolving Credit Agreement. Included as Exhibit 10.2 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated January 11, 2013, filed January 15, 2013.
10.6 Amendment No. 1 to Revolving Credit Agreement dated as of July 13, 2011January 16, 2015 among ERP Operating Limited Partnership, the Banks party thereto, Bank of America, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Wells Fargo Securities, LLC, as Joint Lead Arrangers and Joint Book Runners, Suntrust Bank, U.S. Bank National Association, and Wells Fargo Bank, National Association, as DocumentationCo-Syndication Agents, and Citibank, N.A., Deutsche Bank Securities Inc., and Morgan Stanley Senior Funding, Inc., as Co-Documentationthe other Agents and a syndicate of other banks (the “Credit Agreement”).named therein. Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated July 13, 2011, filed on July 14, 2011.Attached herein.
10.7Guaranty of Payment made as of July 13, 2011 between Equity Residential and Bank of America, N.A., as administrative agent for the banks party to the Credit Agreement.Included as Exhibit 10.2 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated July 13, 2011, filed on July 14, 2011.
10.8Amendment No.1 to Revolving Credit Agreement dated as of January 6, 2012 among ERP Operating Limited Partnership, Bank of America, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Wells Fargo Securities, LLC, as Joint Lead Arrangers and Joint Book Runners, Suntrust Bank, U.S. Bank National Association, and Wells Fargo Bank, National Association, as Documentation Agents, and Citibank, N.A., Deutsche Bank Securities Inc., and Morgan Stanley Senior Funding, Inc., as Co-Documentation Agents, and a syndicate of other banks.Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated January 6, 2012, filed on January 9, 2012.
10.9 Term Loan Agreement dated as of January 11, 2013 among ERP Operating Limited Partnership, Bank of America, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association as Co-Syndication Agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC and J.P. MorganJ.P.Morgan Securities LLC, as Joint Lead Arrangers and Joint Book Runners, and a syndicate of other banks (the “Term"Term Loan Agreement”Agreement"). Included as Exhibit 10.3 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated January 11, 2013, filed January 15, 2013.
10.1010.8 Guaranty of Payment made as of January 11, 2013 between Equity Residential and Bank of America, N.A., as administrative agent for the banks party to the Term Loan Agreement. Included as Exhibit 10.4 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated January 11, 2013, filed January 15, 2013.
10.9Master Credit Facility Agreement, dated February 27, 2013, by and among Federal National Mortgage Association and ASN Santa Monica LLC, et al.Included as Exhibit 10.7 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.
10.10Amended and Restated Fixed Loan Note (Collateral Pool 3), dated February 27, 2013, executed by ASN Santa Monica LLC, et al. in favor of Federal National Mortgage Association.Included as Exhibit 10.8 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.
10.11 Amended and Restated Limited Partnership Agreement of Lexford Properties, L.P. Included as Exhibit 10.16 to Equity Residential's Form 10-K for the year ended December 31, 1999.
10.12*Equity Residential 2011 Share Incentive Plan. Included as Exhibit 99.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated June 16, 2011, filed on June 22, 2011.
10.13*First Amendment to 2011 Share Incentive Plan. Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2012.
10.14*Second Amendment to 2011 Share Incentive Plan. Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2013.
10.15*Third Amendment to 2011 Share Incentive Plan. Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended March 31, 2014.
10.16*Fourth Amendment to 2011 Share Incentive Plan.Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2014.





Exhibit Description Location
10.1410.17*Equity Residential Second Restated 2002 Share Incentive Plan dated December 10, 2008. Included as Exhibit 10.15 to Equity Residential's Form 10-K for the year ended December 31, 2008.
10.1510.18*First Amendment to Second Restated 2002 Share Incentive Plan. Included as Exhibit 10.1 to Equity Residential's Form 10-Q for the quarterly period ended September 30, 2010.
10.1610.19*Second Amendment to Second Restated 2002 Share Incentive Plan. Included as Exhibit 10.3 to Equity Residential's Form 10-Q for the quarterly period ended June 30, 2011.
10.1710.20*Third Amendment to Second Restated 2002 Share Incentive Plan. Included as Exhibit 10.2 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2012.
10.18*Equity Residential Amended and Restated 1993 Share Option and Share Award Plan.Included as Exhibit 10.11 to Equity Residential's Form 10-K for the year ended December 31, 2001.
10.19*First Amendment to Equity Residential 1993 Share Option and Share Award Plan.Included as Exhibit 10.1 to Equity Residential's Form 10-Q for the quarterly period ended June 30, 2003.
10.20*Second Amendment to Equity Residential 1993 Share Option and Share Award Plan.Included as Exhibit 10.20 to Equity Residential's Form 10-K for the year ended December 31, 2006.
10.21*Third Amendment to Equity Residential 1993 Share Option and Share Award Plan.Included as Exhibit 10.1 to Equity Residential's Form 10-Q for the quarterly period ended June 30, 2007.
10.22*Fourth Amendment to Equity Residential 1993Second Restated 2002 Share Option and Share AwardIncentive Plan. Included as Exhibit 10.2 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2008.2013.
10.23*Fifth Amendment to Equity Residential 1993 Share Option and Share Award Plan dated December 10, 2008.Included as Exhibit 10.21 to Equity Residential's Form 10-K for the year ended December 31, 2008.
10.2410.22*Form of Change in Control Agreement between the Company and other executive officers. Included as Exhibit 10.13 to Equity Residential's Form 10-K for the year ended December 31, 2001.
10.2510.23*Form of First Amendment to Amended and Restated Change in Control/Severance Agreement with each executive officer. Included as Exhibit 10.1 to Equity Residential's Form 10-Q for the quarterly period ended March 31, 2009.
10.2610.24*Form of Indemnification Agreement between the Company and each trustee and executive officer. Included as Exhibit 10.18 to Equity Residential's Form 10-K for the year ended December 31, 2003.
10.2710.25*Form of Letter Agreement between Equity Residential and each of David J. Neithercut, Frederick C. Tuomi, Alan W. George and Bruce C. Strohm. Included as Exhibit 10.3 to Equity Residential's Form 10-Q for the quarterly period ended September 30, 2008.
10.2810.26*Form of Executive Retirement Benefits Agreement. Included as Exhibit 10.24 to Equity Residential's Form 10-K for the year ended December 31, 2006.
10.2910.27*Retirement Benefits Agreement between Samuel Zell and the Company dated October 18, 2001. Included as Exhibit 10.18 to Equity Residential's Form 10-K for the year ended December 31, 2001.
10.3010.28*Amended and Restated Deferred Compensation Agreement between the Company and Gerald A. Spector dated January 1, 2002. Included as Exhibit 10.17 to Equity Residential's Form 10-K for the year ended December 31, 2001.
10.3110.29*Change in Control Agreement dated as of March 13, 2009 by and between Equity Residential and Mark J. Parrell, Executive Vice President and Chief Financial Officer. Included as Exhibit 10.2 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated March 12, 2009, filed on March 18, 2009.
10.3210.30*Separation Agreement, dated August 28, 2012, by and betweenThe Equity Residential Supplemental Executive Retirement Plan as Amended and Frederick C. Tuomi.Restated effective July 1, 2014. Included as Exhibit 10.110.2 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2012.2014.
10.33*The Equity Residential Supplemental Executive Retirement Plan as Amended and Restated effective January 1, 2012.Included as Exhibit 10.31 to Equity Residential's and ERP Operating Limited Partnership's Form 10-K for the year ended December 31, 2011.
10.34*Amendment to the Equity Residential Supplemental Executive Retirement Plan.Attached herein.
10.35*The Equity Residential Grandfathered Supplemental Executive Retirement Plan as Amended and Restated effective January 1, 2005. Included as Exhibit 10.2 to Equity Residential's Form 10-Q for the quarterly period ended March 31, 2008.
10.3610.32 Second Amended and Restated Sales Agency Financing Agreement, dated February 3, 2011,July 31, 2013, among the Company, the Operating Partnership and Merrill Lynch, Pierce, Fenner & Smith Incorporated. Included as Exhibit 1.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated and filed on February 3, 2011.July 31, 2013.
10.37
10.33
 Amended and Restated Sales Agency Financing Agreement, dated February 3, 2011,July 31, 2013, among the Company, the Operating Partnership and BNY Mellon Capital Markets, LLC. Included as Exhibit 1.2 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated and filed on February 3, 2011.




July 31, 2013.
Exhibit10.34 DescriptionLocation
10.38Second Amended and Restated Sales Agency Financing Agreement, dated February 3, 2011,July 31, 2013, among the Company, the Operating Partnership and J.P. Morgan Securities LLC. Included as Exhibit 1.3 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated and filed on February 3, 2011.July 31, 2013.
10.3910.35 Second Amended and Restated Sales Agency Financing Agreement, dated February 3, 2011,July 31, 2013, among the Company, the Operating Partnership and Morgan Stanley & Co. Incorporated.LLC. Included as Exhibit 1.4 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated and filed on February 3, 2011.July 31, 2013.
10.4010.36 Interest PurchaseSales Agency Financing Agreement, dated December 2, 2011, byJuly 31, 2013, among the Company, the Operating Partnership and among ERP Operating Limited Partnership, BIH ASN LLC, Archstone Equity Holdings Inc., Bank of America, N.A. and Banc of America Strategic Ventures,Scotia Capital (USA) Inc. Included as Exhibit 2.11.5 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated December 2, 2011,and filed on December 5, 2011.July 31, 2013.
10.4110.37 Other Interest Agreement, dated December 2, 2011, by and among ERP Operating Limited Partnership, BIH ASN LLC, Archstone Equity Holdings Inc., Bank of America, N.A. and Banc of America Strategic Ventures, Inc.Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated December 2, 2011, filed on December 5, 2011.
10.42First Amendment to Other InterestRegistration Rights Agreement, dated February 17, 2012,27, 2013, by and among ERP Operating Limited Partnership, BIH ASN LLC,between Equity Residential, Archstone EquityEnterprise LP (which subsequently changed its name to Jupiter Enterprise LP) and Lehman Brothers Holdings Inc., Bank of America, N.A. and Banc of America Strategic Ventures, Inc. Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 17, 2012,27, 2013, filed on February 21, 2012.28, 2013.







10.43
Exhibit Second Amendment to Other InterestDescriptionLocation
10.38Shareholders Agreement, dated April 18, 2012,February 27, 2013, by and among ERP Operating Limited Partnership, BIH ASN LLC,Equity Residential, Archstone EquityEnterprise LP (which subsequently changed its name to Jupiter Enterprise LP) and Lehman Brothers Holdings Inc., Bank of America, N.A. and Banc of America Strategic Ventures, Inc. Included as Exhibit 10.1 Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated April 18, 2012, filed on April 19, 2012.
10.44Interest Purchase Agreement, dated May 24, 2012, by and among ERP Operating Limited Partnership, BIH ASN LLC, Archstone Equity Holdings, Inc., Bank of America, N.A. and Banc of America Strategic Ventures, Inc.Included as Exhibit 2.110.2 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated May 24, 2012,February 27, 2013, filed on May 25, 2012.February 28, 2013.
10.4510.39 Asset Purchase Agreement, dated November 26, 2012, by and among ERP OperatingArchstone Residual JV, LLC Limited Partnership, Equity Residential, AvalonBay Communities, Inc., Lehman Brothers Holding Inc. and Archstone Enterprise LP.Liability Company Agreement. Included as Exhibit 2.110.3 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated andFebruary 27, 2013, filed on November 26, 2012.February 28, 2013.
10.4610.40 Real Estate Sale Agreement, dated as of January 3, 2013 (executed January 4, 2013), by and among certain subsidiaries of ERP OperatingArchstone Parallel Residual JV, LLC Limited Partnership and GSG Residential Portfolio LLC.Liability Company Agreement. Included as Exhibit 2.110.4 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated January 4,February 27, 2013, filed January 7,on February 28, 2013.
10.41Archstone Parallel Residual JV 2, LLC Limited Liability Company Agreement.Included as Exhibit 10.5 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.
10.42Legacy Holdings JV, LLC Limited Liability Company Agreement.Included as Exhibit 10.6 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.
12 Computation of Ratio of Earnings to Combined Fixed Charges. Attached herein.
21 List of Subsidiaries of Equity Residential and ERP Operating Limited Partnership. Attached herein.
23.1 Consent of Ernst & Young LLP - Equity Residential. Attached herein.
23.2 Consent of Ernst & Young LLP - ERP Operating Limited Partnership. Attached herein.
24 Power of Attorney. See the signature page to this report.
31.1 Equity Residential - Certification of David J. Neithercut, Chief Executive Officer. Attached herein.
31.2 Equity Residential - Certification of Mark J. Parrell, Chief Financial Officer. Attached herein.
31.3 ERP Operating Limited Partnership - Certification of David J. Neithercut, Chief Executive Officer of Registrant's General Partner. Attached herein.
31.4 ERP Operating Limited Partnership - Certification of Mark J. Parrell, Chief Financial Officer of Registrant's General Partner. Attached herein.
32.1 Equity Residential - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of David J. Neithercut, Chief Executive Officer of the Company. Attached herein.



ExhibitDescriptionLocation
32.2 Equity Residential - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Mark J. Parrell, Chief Financial Officer of the Company. Attached herein.
32.3 ERP Operating Limited Partnership - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of David J. Neithercut, Chief Executive Officer of Registrant's General Partner. Attached herein.
32.4 ERP Operating Limited Partnership - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Mark J. Parrell, Chief Financial Officer of Registrant's General Partner. Attached herein.
101 
XBRL (Extensible Business Reporting Language). The following materials from Equity Residential’s and ERP Operating Limited Partnership's Annual Report on Form 10-K for the year ended December 31, 2012,2014, formatted in XBRL: (i) consolidated balance sheets, (ii) consolidated statements of operations and comprehensive income, (iii) consolidated statements of cash flows, (iv) consolidated statements of changes in equity (Equity Residential), (v) consolidated statements of changes in capital (ERP Operating Limited Partnership) and (vi) notes to consolidated financial statements.
 Attached herein.





*Management contracts and compensatory plans or arrangements filed as exhibits to this report are identified by an asterisk.