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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K
x

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

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended DECEMBER 31, 20092012

OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

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

For the transition period fromto

Commission File Number: 1-12252

(Equity Residential)

Commission File Number: 0-24920 (ERP Operating Limited Partnership)

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP
(Exact Namename of Registrantregistrant as Specifiedspecified in Its Charter)

its charter)
Maryland13-3675988

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

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 6060660606(312) 474-1300
(Address (Address of Principal Executive Offices)principal executive offices) (Zip Code)(Zip Code)Registrant's telephone number, including area code)

(312) 474-1300

(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
(Title of Each Class)(Name of Each Exchange on Which Registered)
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)each class)(Name of Each Exchangeeach exchange on Which Registered)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.    Yes  x    No  ¨

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. Yes  ¨    No  x

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. Yes  x    No  ¨

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). Yes  x    No  ¨

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 filerx
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). Yes  ¨    No  x

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 $5.9$18.4 billion based upon the closing price on June 30, 20092012 of $22.23$62.36 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 19, 201015, 2013 was 281,884,878.

325,462,816.





























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DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates by reference certain information tothat will be contained in the Company’s definitive proxy statement,Equity Residential's Proxy Statement relating to its 2013 Annual Meeting of Shareholders, which the Company anticipates will be filedEquity Residential intends to file no later than April 15, 2010,120 days after the end of its fiscal year ended December 31, 2012, 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% 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, 2012 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, 2012 owned an approximate 95.9% ownership interest in ERPOP. The remaining 4.1% 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, Item 4. 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. 
Business
7

Item 1.

1A.		 

BusinessRisk Factors

11
Item 1B. 4

Item 1A.

Risk Factors

8

Item 1B.

Unresolved Staff Comments

31
Item 2. 22
Properties
32

Item 2.

3.		 

PropertiesLegal Proceedings

34
Item 4. 23
Mine Safety Disclosures
35

Item 3.

PART II.		 

Legal Proceedings

Item 5. 26

Item 4.

Submission of Matters to a Vote of Security Holders

26

PART II.

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities

36
Item 6. 27

Item 6.

Selected Financial Data

37
Item 7. 28

Item 7.

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

40
Item 7A. 30

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

63
Item 8. 50

Item 8.

Financial Statements and Supplementary Data

64
Item 9. 51

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
64

Item 9A. 51

Item 9A.

Controls and Procedures

64
Item 9B. 51
Other Information
65

Item 9B.

PART III.		 

Other Information

Item 10. 52

PART III.

Item 10.

Trustees, Executive Officers and Corporate Governance

66
Item 11. 53
Executive Compensation
66

Item 11.

12.		 

Executive Compensation

53

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
66

Item 13. 53

Item 13.

Certain Relationships and Related Transactions, and Trustee Independence

66
Item 14. 53

Item 14.

Principal Accounting Fees and Services

66
PART IV. 53

PART IV.

Item 15.		 

Item 15.

Exhibits and Financial Statement Schedules

67
EX-10.34
 
54
 EX-12
 EX-21
 EX-23.1
 EX-23.2
 EX-31.1
 EX-31.2
 EX-31.3
 EX 31.4
 EX-32.1
 EX-32.2
 EX-32.3
 EX-32.4
 EX-101 INSTANCE DOCUMENT
 EX-101 SCHEMA DOCUMENT
 EX-101 CALCULATION LINKBASE DOCUMENT
 EX-101 LABELS LINKBASE DOCUMENT
 EX-101 PRESENTATION LINKBASE DOCUMENT
 EX-101 DEFINITION LINKBASE DOCUMENT


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PART I

Item 1.Business


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.

The Company is one of References to the largest publicly traded real estate companies“Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and isthose entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the largest publicly traded owner of multifamily properties in the United States (based on the aggregate market value of its outstanding Common Shares, the number of apartment units wholly“Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned and total revenues earned). The Company’s corporate headquarters are located in Chicago, Illinois and the Company also operates property management offices throughout the United States.

or controlled by ERPOP.

EQR is the general partner of, and as of December 31, 20092012 owned an approximate 95.2%95.9% ownership interest in ERP Operating Limited Partnership, an Illinois limited partnership (the “Operating Partnership”). The Company is structured as an umbrella partnership REIT (“UPREIT”) under which allERPOP. 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 subsidiaries. Referencesinvestment in ERPOP. EQR issues public equity from time to the “Company” include EQR, the Operating Partnership and those entities owned or controlledtime but does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership and/or EQR.

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, 2009,2012, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 495403 properties located in 2313 states and the District of Columbia consisting of 137,007115,370 apartment units. The ownership breakdown includes (table does not include various uncompleted development properties):

   Properties  Units

Wholly Owned Properties

  432  118,796

Partially Owned Properties:

    

Consolidated

  27  5,530

Unconsolidated

  34  8,086

Military Housing

  2  4,595
      
  495  137,007


  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 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, 2009,2012, the Company hashad approximately 4,1003,600 employees who provideprovided 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.

Business Objectives and Operating and Investing Strategies

The Company seeks to maximize current income, capital appreciation of each property and the total return for its shareholders. The Company’s strategy for accomplishing these objectives includes:

Leveraging our size and scaleinvests in four critical ways:

Investing inhigh 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 appreciation. We are focused primarily on the six core coastal, high barrier to entry markets of Boston, New York, Washington DC, Southern California, San Francisco and Seattle. These markets generally feature one or more of the following characteristics that allow us to increase rents:
▪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 household formation and job growth, which in turn leads to high demand

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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 totalrevenue while exercising tight cost control to generate the highest possible return on an enterprise level;

Meetingto 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 needscustomer 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 by offering a wide array of product choicesutilize our web-based resident portal which allows them to sign their leases, review their accounts and a commitment to service;

Engaging, retainingmake payments, provide feedback and attracting the best employees by providing them with the education, resources and opportunities to succeed; and

Sharing resources and best practices in both property management and across the enterprise.

Owning a highly diversified portfolio in our target markets. Target markets are defined by a combination of the following criteria:

High barrier-to-entry markets where because of land scarcity or government regulation it is difficult or costly to build new apartment complexes leading to low supply;

Strong economic growth leading to high demand for apartments; and

Markets with an attractive quality of life leading to high demand and retention.

Giving residents reasons to stay with the Company by providing a range of product choices available in our diversified portfolio and by enhancing their experience with us through meticulous customermake service by our employees and by providing various value-added services.

requests on-line.

Being open and responsive to changes in the market in order to take advantage of investment opportunities that align with our long-term vision.

Acquisition, Development and Disposition Strategies

The Company anticipates that future property acquisitions, developments and dispositions will occur within the United States. Acquisitions and developments may be financed from various sources of capital, which may include retained cash flow, issuance of additional equity and debt, securities, sales of properties and joint venture agreements and collateralized and uncollateralized borrowings.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. EQRThe Company may also acquire land parcels to hold and/or sell based on market opportunities.

When evaluating potential acquisitions, developments 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 dispositions,sold them as condominiums but is not currently active in this line of business.

Over the past several years, the Company generally considershas 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 133,000 apartment units primarily in its non-core markets for an aggregate sales price of approximately $11.1 billion, acquired over 44,000 apartment units in its core markets for approximately $10.3 billion and began approximately $3.0 billion of development projects in its core markets. We are currently seeking to acquire and develop assets primarily in the following factors:

strategically targeted markets;

income levelsmetropolitan areas (our core markets): Boston, New York, Washington DC, Southern California, San Francisco and employment growth trendsSeattle. We also have investments (in the aggregate about 15.8% of our NOI at December 31, 2012) in other markets including South Florida, Denver and New England (excluding Boston) but do not currently intend to acquire or develop new assets in these markets. Further, we are in the relevant market;

employmentprocess of exiting Atlanta, Phoenix, Orlando and household growthJacksonville as we raise capital to complete the Archstone transaction.

As part of its strategy, the Company purchases completed and net migrationfully occupied apartment properties, partially completed or partially occupied properties or 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, no single metropolitan area accounted for more than 15.9% of our NOI, though no guarantee can be made that NOI concentration may not increase in the relevant market’s population;

future.

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

retain the location, construction quality, age, conditionbest employees by providing them with the education, resources and design of the property;

the currentopportunities to succeed. We provide many classroom and projected cash flow ofon-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 property 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 abilityenvironmental impacts of our business activities. 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 in pedestrian-friendly urban locations near public transportation. When developing and renovating our properties, we strive to increase cash flow;

reduce energy and water usage by investing in energy saving technology while positively impacting the potential for capital appreciationexperience of the property;

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

the potential for economic growthour residents and the taxvalue of our assets. We continue to implement a combination of irrigation, lighting, HVAC and regulatory environment of the community in which the property is located;

the occupancyrenewable energy improvements at our properties that will reduce energy and demand by residents for properties of a similar type in the vicinity (the overall market and submarket);

water consumption.

the prospects for liquidity through sale, financing or refinancing of the property;

Competition

the benefits of integration into existing operations;

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

competition from existing multifamily properties, comparably priced single family homes or rentals, residential properties under development and the potential for the construction of new multifamily properties in the area; and

opportunistic selling based on demand and price of high quality assets, including condominium conversions.

The Company generally reinvests the proceeds received from property dispositions primarily to achieve its acquisition, development and rehab strategies and at times to fund its debt and equity repurchase activities. In addition, when feasible, the Company may structure these transactions as tax-deferred exchanges.

See also Note 20 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s segment disclosures.

Debt and Equity Activity

Please refer to Item 7,Management’s Discussion and Analysis of Financial Condition and Results of Operations, for the Company’s Capital Structure chart as of December 31, 2009.

Major Debt and Equity Activities for the Years Ended December 31, 2009, 2008 and 2007

During 2009:

The Operating Partnership obtained $500.0 million of mortgage loan proceeds through the issuance of an 11 year (stated maturity date of July 1, 2020) cross-collateralized loan with an all-in fixed interest rate for 10 years at approximately 5.6% secured by 13 properties.

The Company issued 422,713 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $9.1 million.

The Company issued 324,394 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $5.3 million.

The Company issued 3,497,300 Common Shares at an average price of $35.38 per share for total consideration of $123.7 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 repurchased and retired 47,450 of its Common Shares at an average price of $23.69 per share for total consideration of $1.1 million. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.

The Company repurchased $75.8 million of its 5.20% fixed rate tax-exempt notes.

The Company repurchased at par $105.2 million of its 4.75% fixed rate public notes due June 15, 2009. In addition, the Company repaid the remaining $122.2 million of its 4.75% fixed rate public notes at maturity. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.

The Company repurchased $185.2 million at par and $21.7 million at a price of 106% of par of its 6.95% fixed rate public notes due March 2, 2011. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.

The Company repurchased $146.1 million of its 6.625% fixed rate public notes due March 15, 2012 at a price of 108% of par. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.

The Company repurchased $127.9 million of its 5.50% fixed rate public notes due October 1, 2012 at a price of 107% of par. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.

The Company repurchased $17.5 million of its 3.85% convertible fixed rate public notes due August 15, 2026 (putable in 2011) at a price of 88.4% of par. In addition, the Company repurchased $48.5 million of these notes at par. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.

During 2008:

The Operating Partnership obtained $500.0 million of mortgage loan proceeds through the issuance of an 11.5 year (stated maturity date of October 1, 2019) cross-collateralized loan with a fixed stated interest rate for 10.5 years at 5.19% secured by 13 properties.

The Operating Partnership obtained $550.0 million of mortgage loan proceeds through the issuance of an 11.5 year (stated maturity date of March 1, 2020) cross-collateralized loan with a fixed stated interest rate for 10.5 years at approximately 6% secured by 15 properties.

The Operating Partnership obtained $543.0 million of mortgage loan proceeds through the issuance of an 8 year (stated maturity date of January 1, 2017) cross-collateralized loan with a fixed stated interest rate for 7 years at approximately 6% secured by 18 properties.

The Company issued 995,129 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $24.6 million.

The Company issued 195,961 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $6.2 million.

The Company repurchased and retired 220,085 of its Common Shares at an average price of $35.93 per share for total consideration of $7.9 million. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.

The Company repurchased $72.6 million of its 4.75% fixed rate public notes due June 15, 2009 at a price of 99.0% of par. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.

The Company repurchased $101.4 million of its 3.85% convertible fixed rate public notes due August 15, 2026 (putable in 2011) at a price of 82.3% of par. See Note 9 in the Notes to Consolidated Financial Statements for further discussion.

During 2007:

The Operating Partnership issued $350.0 million of five-year 5.50% fixed rate notes (the “October 2012 Notes”) in a public debt offering in May/June 2007. The October 2012 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis. The October 2012 Notes are due October 1, 2012 with interest payable semiannually in arrears on January 15 and July 15, commencing January 15, 2008. The Operating Partnership received net proceeds of approximately $346.1 million in connection with this issuance.

The Operating Partnership issued $650.0 million of ten-year 5.75% fixed rate notes (the “June 2017 Notes”) in a public debt offering in May/June 2007. The June 2017 Notes were issued at a discount, which is being amortized over the life of the notes on a straight-line basis. The June 2017 Notes are due June 15, 2017 with interest payable semiannually in arrears on January 15 and July 15, commencing January 15, 2008. The Operating Partnership received net proceeds of approximately $640.6 million in connection with this issuance.

The Operating Partnership obtained a three-year (subject to two one-year extension options) $500.0 million senior unsecured credit facility (term loan) which generally incurs a variable interest rate of LIBOR plus a spread dependent upon the current credit rating on the Operating Partnership’s long-term unsecured debt. The Operating Partnership paid $1.1 million in upfront costs, which will be deferred and amortized over the three-year term. EQR has guaranteed the Operating Partnership’s term loan facility up to the maximum amount and for the full term of the facility.

The Company issued 1,040,765 Common Shares pursuant to its Share Incentive Plans and received net proceeds of approximately $28.8 million.

The Company issued 189,071 Common Shares pursuant to its Employee Share Purchase Plan and received net proceeds of approximately $7.2 million.

The Company repurchased and retired 27,484,346 of its Common Shares at an average price of $44.62 per share for total consideration of $1.2 billion.

During the first quarter of 2010 through February 19, 2010, the Company has issued approximately 1.1 million Common Shares at an average price of $33.87 per share for total consideration of approximately $35.8 million through the ATM share offering program.

As of the date of this filing, an unlimited amount of debt securities remains available for issuance by the Operating Partnership under a registration statement that became automatically effective upon filing with the SEC in December 2008 (under SEC regulations enacted in 2005, the registration statement automatically expires on December 21, 2011 and does not contain a maximum issuance amount). As of the date of this filing, an unlimited amount of equity securities remains available for issuance by the Company under a registration statement the SEC declared effective in December 2008 (under SEC regulations enacted in 2005, the registration statement automatically expires on December 15, 2011 and does not contain a maximum issuance amount).

In May 2002, the Company’s shareholders approved the Company’s 2002 Share Incentive Plan. In January 2003, the Company filed a Form S-8 registration statement to register 23,125,828 Common Shares under this plan. As of January 1, 2010, 22,091,629 shares are the maximum shares issuable under this plan. See Note 14 in the Notes to Consolidated Financial Statements for further discussion.

Credit Facilities

The Operating Partnership has a $1.5 billion unsecured revolving credit facility maturing on February 28, 2012, with 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. Advances under the credit facility bear interest at variable rates based upon LIBOR at various interest periods plus a spread (currently 0.5%) dependent upon the Operating Partnership’s credit rating or based on bids received from the lending group. EQR has guaranteed the Operating Partnership’s credit facility up to the maximum amount and for the full term of the facility.

During the year ended December 31, 2008, one of the providers of the Operating Partnership’s unsecured revolving credit facility declared bankruptcy. Under the existing terms of the credit facility, the provider’s share is up to $75.0 million of potential borrowings. As a result, the Operating Partnership’s borrowing capacity under the unsecured revolving credit facility has, in essence, been permanently reduced to $1.425 billion of potential borrowings. The obligation to fund by all of the other providers has not changed.

As of December 31, 2009, the amount available on the credit facility was $1.37 billion (net of $56.7 million which was restricted/dedicated to support letters of credit and net of the $75.0 million discussed above). As of December 31, 2008, the amount available on the credit facility was $1.29 billion (net of $130.0 million which was restricted/dedicated to support letters of credit and net of the $75.0 million discussed above). The Company did not draw on its revolving credit facility and had no balance outstanding at any time during the year ended December 31, 2009. During the year ended December 31, 2008, the weighted average interest rate was 4.31%.

Competition

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


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units at the properties or at any newly acquiredits 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’sCompany'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 Factors for additional information with respect to competition.

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.

Major Debt and Equity Activities for the Years Ended December 31, 2012, 2011 and 2010
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.
The Company issued 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. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.
▪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 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.
▪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 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 2010 and expires on October 15, 2013. However, as of February 15, 2013, issuances under the ATM share offering program are limited to 6.0 million additional shares. 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's revolving credit facility up to the maximum amount and for the full term of the facility.

In July 2011, the Company replaced its then existing $1.425 billion unsecured revolving credit facility which was scheduled to mature in February 2012 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 Company had 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. On January 6, 2012, the Company amended this credit facility to increase available borrowings by an additional $500.0 million to $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%) 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 Company 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.
As of February 15, 2012, the amount available on the $2.5 billion credit facility was $2.47 billion (net of $30.2 million which was restricted/dedicated to support letters of credit) and there was no amount outstanding. As of December 31, 2012, the amount available on the $1.75 billion credit facility was $1.72 billion (net of $30.2 million which was restricted/dedicated to support letters of credit) and there was no amount outstanding. During the year ended December 31, 2012, the weighted average interest rate was 1.35%. As of December 31, 2011, the amount available on the $1.25 billion credit facility was $1.22 billion (net of $31.8 million which was restricted/dedicated to support letters of credit) and there was no amount outstanding. During the year ended December 31, 2011, the weighted average interest rate was 1.42%.



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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 Factors for information concerning the potential effects of environmental regulations on our operations.


Item 1A.
Risk Factors

General

The following Risk Factors may contain defined terms that are different from those used in the other sections of this report.

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 “we”“Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and “us” refer to Equity Residentialthose entities/subsidiaries owned or controlled by EQR and/or ERPOP and its the term “Operating Partnership” means collectively ERPOP and those entities/subsidiaries including ERP Operating Limited Partnership.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, Long-Term Incentive Plan Units (“LTIP Units”) and limited partnership interests in the Operating Partnership (“OP Units”).our public unsecured debt. In this section, we refer to the Shares, and thepreference units, OP Units, LTIP Units and public unsecured debt together as our “securities” and the investors who own Shares and/or OP Shares/Units, OP/LTIP Units and public unsecured debt as our “security holders”.

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

General

Real property investments are subject to varying degrees of risk and are relatively illiquid. SeveralNumerous factors may adversely affect the economic performance and value of our properties.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 available multifamily property ownersproperties 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. 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 us to consider reducing our distributions and/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 Units as Leases Expire

When our residents decide to leave our apartments, whether because they decide not to renew their leases uponor 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. Because virtually all of our leases are for apartments, they are generally for terms of no more than one year. If we are unable to promptly renew the leases or relet the 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, rental housing subsidized by the government, other government programs that favor single family rental housing or owner occupied housing over multifamily rental housing, slow or negative employment growth and household formation, the availability of low interest mortgages for single family home buyers, changes in social preferences and the potential for geopolitical instability, all of which are beyond the Company’sCompany's control. In addition, various state and local municipalities are considering and may continue to consider rent control legislation which could limit our ability to raise rents. Finally, the federal government is considering and may continue to considergovernment's policies, many of which may encourage home ownership, thus increasingcan increase competition and possibly limitinglimit our ability to raise rents. Consequently, our cash flow and ability to service debt and make distributions to security holders could be reduced.

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

We intend to actively acquire and/or develop multifamily properties for rental operations as market conditions dictate. The Company also develops projects and currently has several properties under development. We may begin new development activities if conditions warrant.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 major real estate investors with significant capital will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development 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. ToWe have acquired in the extentpast and intend to continue to pursue the acquisition of properties and portfolios of properties, including large portfolios, that we do develop more properties if conditions warrant, we expectcould increase our size and result in alterations to do so ourselves in addition to co-investing with our development partners.capital structure. The total number of apartment units under development, units, costs of development and estimated completion dates are subject to uncertainties arising from changing economic conditions (such as the cost of labor and construction materials), competition and local government regulation.

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 Acts,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 Ventures
We have in the past and may in the future develop and acquire properties in joint ventures with other persons or entities when we believe circumstances warrant the use of such structures. Joint venture investments involve risks, including the possibility that our partners might refuse to make capital contributions when due; that we may be responsible to our partners for indemnifiable losses; that our partners might at any time have business or economic goals which are inconsistent with ours; and that our partners may be in a position to take action or withhold consent contrary to our instructions or requests. 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, joint venture partners may have competing interests 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, we may be adversely

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affected.
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 respondreallocate our capital promptly to changes in the performance of our investments could adversely affect our financial condition and ability to make distributions to our security holders.

The Value of Investment Securities Could Result In Losses to the Company

From time to time, the Company holds investment securities and/or cash investments that have a highervarious levels of repayment and liquidity risk, profile than theincluding government obligations and bond funds, money market funds or bank deposits in which we generally invest.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 resulting in risk to the Company of loss of funds if these banks or institutions fail.

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. 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 Business

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 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.
Environmental Problems Are Possible and Can Be Costly

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

Substantially all of our properties have been the subject of environmental assessments completed by qualified independent environmental 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.

Over the past several years, there

There have been an increasing 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. WeWhile 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.

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.

Climate Change

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, developmentschanges 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, Exclusions and ExclusionsCounterparties

In order to manage insurance costs, management has gradually increased deductible and self-insured retention amounts.

As of December 31, 2009,2012, the Company’sCompany's property insurance policy provides for a per occurrence deductible of $250,000 and self-insured retention of $5.0 million per occurrence, subject to a maximum annual aggregate self-insured retention of $7.5 million, with approximately 80% of any excess losses being covered by insurance. 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 and are not subject to the aggregate self-insured retention. The Company’sCompany's general liability and worker’sworker's compensation policies at December 31, 20092012 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 uninsured losses, but management has reviewed its claims history over the years and believes the savings in insurance premium expense justify this potential increased exposure over the long-term. However, the potential impact of climate change and increased severe weather 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, 2009,2012, under a separate terrorism insurance policy, the Company was

insured for $500.0 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 believes, however, that the number of properties in and geographic diversity ofhas 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, the Company's cyber liability insurance policy provides for a per occurrence deductible of $250,000 and its terrorisma $5.0 million general limit. Cyber liability insurance coverage help to mitigate its exposure to the risksgenerally covers costs associated with potential terrorist attacks.

Debt Financingthe 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 Preferred Sharesother 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 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 Financing and Preferred Shares/Preference Units Could Adversely Affect Our Performance
General

General

Please refer to Item 7,Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations, for the Company’sCompany's total debt and unsecured debt summaries as of December 31, 2009.2012

.

In addition to debt, we have $208.8 million of combineda liquidation value of $50.0 million of outstanding preferred shares of beneficial interestinterest/preference units with a weighted average dividend preference of 6.94%8.29% per annum as of December 31, 2009.2012. Our use of debt and preferred equity financing creates certain risks, including the following:

Disruptions in the Financial Markets Could Adversely Affect Our Ability to Obtain Debt Financing and Impact our Acquisitions and Dispositions

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. Disruptions in the floating rate tax-exempt bond market (where interest rates reset weekly) and in the credit market’s perception of Fannie Mae and Freddie Mac, which guarantee and provide liquidity for 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 Fannie Mae or Freddie Mac 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. Furthermore, while we believe Fannie Mae and Freddie Mac will continue to provide liquidity to our sector, should they discontinue doing so, have their mandates changed or reduced or be disbanded or reorganized by the government, it would significantly reduce our access to debt capital and/or increase borrowing costs and would significantly reduce our sales of assets. 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 Common Sharessecurities to fluctuate significantly and/or to decline.

Potential Reforms to Fannie Mae and Freddie Mac Could Adversely Affect Our Performance
There is significant uncertainty surrounding the futures of Fannie Mae and Freddie Mac (the "Government Sponsored

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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. Should the GSEs have their mandates changed or reduced, materially change their lending terms, lose key personnel, be disbanded or reorganized by the government 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/or the values realized upon sale. 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-Performance by Our 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 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. One of the financial institutions, with a commitment of $75.0 million, declared bankruptcy in 2008 and it is unlikely that they will honor their financial commitment. Our borrowing capacity under the credit facility has in essence been permanently reduced to $1.425 billion.

The Company also has severaldeveloped assets under development 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. Further, the Company’s joint venture partners may experience financial distress and to the extent they do not meet their obligations to us or our joint ventures with them, we may be adversely affected. In addition, 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.

A Significant Downgrade in Our 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 facilityfacilities and impact our ability to borrow secured and unsecured debt, by increasing borrowing costs, 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.

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 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.

If a property we own is mortgaged to secure debt and we are unable to meet the mortgage payments, the holder of the mortgage could foreclose on the property, resulting in loss of income and asset value. Foreclosure on mortgaged properties or an inability to refinance existing indebtedness would likely have a negative impact on our financial condition and results of operations.

Please refer to Item 7,Management’sManagement's Discussion and Analysis of Financial Condition and Results of Operations, for the Company’sCompany's debt maturity schedule as of December 31, 2009.2012

.

Financial Covenants Could Adversely Affect the Company’sCompany's Financial 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 contain 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 facilities and indentures are cross-defaulted and also contain cross default provisions with other material debt. TheWhile the Company believes it was in compliance with its unsecured public debt covenants for both the years ended December 31, 20092012 and 2008.

2011, 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 thator otherwise contain certain restrictive covenants or deed restrictions. We have retained an independent outside consultantrestrictions, 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 bond 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. Generally,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.

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.

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

Our consolidated debt-to-total market capitalization ratio was 48.1% as of December 31, 2009.

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% as of December 31, 2012. In addition, our most restrictive unsecured public debt covenants are as follows:

  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 Flow

Advances under our credit facilities bear interest at variable rates based upon LIBOR at various interest periods, plus a spread dependent upon the Operating Partnership’sPartnership'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. 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 Flow

In the normal course of business, we use derivatives to hedgemanage 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 Depend on Our 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 Influence by Significant ShareholdersSecurity Holders Could Be Exercised in a Manner Adverse to Other Shareholders

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’sCompany'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’sCompany'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 the Company’sEquity Residential's definitive proxy statement.

Shareholders’

Shareholders' Ability to Effect Changes in Control of the Company is Limited

Provisions of Our Declaration of Trust and Bylaws Could Inhibit Changes in Control

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 sharesshares/preference units do not have these provisions, any future series of preferred sharesshares/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. In 2008, we adopted amendments to ourOur Bylaws to expand therequire certain information required 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 amendmentsrequirements could delay or prevent a change in control or other transactions that might otherwise be in the interest of our security holders.

We Have a Share Ownership Limit for REIT Tax 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 the 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’sholder'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’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, in 2004 the Company amended theCompany's Ownership Limit to require,requires, rather than permit,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’sCompany's status as a REIT.

Our Preferred Shares May Affect Changes in Control

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 Changes in Control

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’sCompany'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 Success as a REIT Is Dependent on Compliance with Federal Income Tax Requirements

Our Failure to Qualify as a REIT Would Have Serious Adverse Consequences to Our 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, however, are highly technical and complex. We cannot, therefore, guarantee that we have qualified or will qualify in the future as a REIT. 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 ERPthe Operating Limited Partnership and its subsidiaries 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. Furthermore,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. In addition, Congress and the IRS have recently liberalized the REIT qualification rules to permit REITs in certain circumstances to pay a monetary penalty for inadvertent mistakes rather than lose 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, our corporate housingvarious business and condominium conversion business,activities which generate income that is not qualifying income for a REIT are conducted through taxable REIT subsidiaries generallyand will be subject to federal and state income tax at regular corporate rates to the extent they havegenerate taxable income.

We Could Be Disqualified as a REIT or Have to Pay Taxes if Our Merger Partners Did Not Qualify as REITs

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 “C“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 “C“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 Condition

Distribution Requirements May Increase the Indebtedness of the Company

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 Liquidity of the Company

During 2008 and 2009, we did make, 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 REIT tax code,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

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 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’sshareholder'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 Taxation


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 condominium conversion and sale activities. As a result, we will be subject to federal income taxes for activities performed by 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 ade 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.


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 subsidiaries”subsidiary” or “TRSs”“TRS”, whichprovided 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, investmentsinterest on obligations secured by mortgages on real property or on interests in real estate and/property, gain from the sale or other disposition of non-dealer real estate mortgages,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 any combination of incomesources qualifying under the 75% test anddescribed 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 thede 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.

Asset Tests. In general, aton the closelast 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 be represented byconsist 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 be represented byconsist 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’sissuer'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 be represented byconsist 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 ade minimis change which does not exceed the greater of 1/4 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’sissuer'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 isde 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 thede 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.

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 Subject to U.S. Tax
General

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 andshareholders. These qualified dividends are currently (for the 2010 tax year) 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’sshareholder's common shares by the amount of the distribution so treated. To the extent such distributions cumulatively exceed a taxable domestic shareholder’sshareholder'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’sREIT'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, we will classify a portion of our designated capital gain dividends as a 15% rate gain distribution and the remaining portion as an unrecaptured Section 1250 gain distribution. A 15% rate gain distribution wouldwill 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 15% (which 15% rate is currently scheduled to increase to 20% for taxable years beginning on and afteras of January 1, 2011). An2013 for individual taxpayers in the highest tax bracket) and unrecaptured Section 1250 gain distribution would bedistributions (which are taxable to taxable domestic shareholders that are individuals, estates or trusts at a maximum rate of 25%).


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 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’sshareholder'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 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 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 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’sshareholder's common shares. Instead, the

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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’sshareholder'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’sshareholder'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’sshareholder'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’sindividual'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’sshareholder'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.

Foreign Shareholders’Shareholders' Sales of Common Shares.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’sshareholder'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
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(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’sindividual'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 Requirement and Backup 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’sperson'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 Institutions and Non-U.S. Shareholders

The Foreign Account Tax Compliance Act of 2009 may impose withholding taxes on certain types of payments made to “foreign financial institutions” and certain other non-U.S. shareholders. Under this legislation, the failure to comply with additional certification, information reporting and other specified requirements could result in 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 made with respect to our capital stock until January 1, 2014, and with respect to payments such as gross proceeds from sales or exchanges of our capital stock until January 1, 2015.

Item 1B. Unresolved Staff Comments

None.



31

Item 2. Properties
Item 1B.
Unresolved Staff Comments

None.

Item 2.Properties

As of December 31, 2009,2012, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 495403 properties located in 2313 states and the District of Columbia consisting of 137,007115,370 apartment units. The Company’s properties are summarized by building type in the following table:

Type

  Properties  Units  Average
Units

Garden

  413  112,961  274

Mid/High-Rise

  80  19,451  243

Military Housing

  2  4,595  2,298
        

Total

  495  137,007  
        

Type Properties Apartment Units 
Average
Apartment Units
Garden 279
 80,288
 288
Mid/High-Rise 122
 30,043
 246
Military Housing 2
 5,039
 2,520
Total 403
 115,370
  
The Company’s properties are summarized by ownership type in the following table:

   Properties  Units

Wholly Owned Properties

  432  118,796

Partially Owned Properties:

    

Consolidated

  27  5,530

Unconsolidated

  34  8,086

Military Housing

  2  4,595
      
  495  137,007
      

  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 following table sets forth certain information by market relating to the Company’s properties at December 31, 2009:

2012:


PORTFOLIO SUMMARY

  

Markets

  Properties  Units  % of
Total Units		  % of 2010
Stabilized
NOI		  Average
Rental
Rate (1)

  1

 DC Northern Virginia  27  9,107  6.6%  10.1%  $1,643

  2

 New York Metro Area  23  6,410  4.7%  9.5%   2,493

  3

 South Florida  39  13,013  9.5%  9.2%   1,262

  4

 Boston  36  6,503  4.7%  8.4%   2,057

  5

 Los Angeles  36  7,463  5.4%  7.9%   1,666

  6

 Seattle/Tacoma  47  10,645  7.8%  6.6%   1,234

  7

 San Francisco Bay Area  33  6,239  4.6%  5.7%   1,611

  8

 Phoenix  41  11,769  8.6%  5.2%   840

  9

 San Diego  14  4,491  3.3%  5.0%   1,610

10

 Denver  23  7,963  5.8%  4.9%   1,002

11

 Suburban Maryland  22  6,088  4.4%  4.8%   1,283

12

 Orlando  26  8,042  5.9%  4.4%   968

13

 Inland Empire, CA  14  4,519  3.3%  3.6%   1,301

14

 Orange County, CA  10  3,307  2.4%  3.3%   1,482

15

 Atlanta  23  7,157  5.2%  3.1%   904

16

 New England (excluding Boston)  19  3,477  2.5%  2.0%   1,120

17

 Jacksonville  12  3,951  2.9%  1.8%   851

18

 Portland, OR  10  3,417  2.5%  1.6%   924

19

 Tampa  9  2,878  2.1%  1.2%   893

20

 Raleigh/Durham  6  1,584  1.2%  0.6%   734
                 
 Top 20 Total  470  128,023  93.4%  98.9%   1,316

21

 Central Valley, CA  5  804  0.6%  0.4%   984

22

 Dallas/Ft. Worth  4  843  0.6%  0.1%   722

23

 Other EQR  12  2,739  2.0%  0.6%   873
                 
 Total  491  132,409  96.6%  100.0%   1,301
 Condominium Conversion  2  3  —     —      —  
 Military Housing  2  4,595  3.4%  —      —  
                 
 Grand Total  495  137,007  100.0%  100.0%  $1,301
                 


  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

(1)% of Stabilized NOI includes budgeted 2013 NOI for 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 month of December 2009.2012.

(3)All Other Markets – Each individual market is less than 1.5% of stabilized NOI.

Note: Projects under development are not included in the Portfolio Summary until construction has been completed.
The Company’s properties had an average occupancy of approximately 93.9%94.3% (95.0% on a same store basis) at

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December 31, 2009.2012. 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 include a clubhouse, swimming pool, laundry facilities and cable television access. Certain of these properties offer additional amenities such as saunas, whirlpools, spas, sports courts and exercise rooms or other amenities. 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 and economic influences. At the same time, the Company has sought to create clusters of properties within each of its primary markets in order to achieve economies of scale in management and operation. The Company may nevertheless acquire additional multifamily properties located anywhere in the United States.

States and internationally.

The properties currently in various stages of development and lease-up at December 31, 20092012 are included in the following table:

Consolidated Development Projects as



33
Table of December 31, 2009

(Amounts in thousands except for project and unit amounts)

Projects

 Location No. of
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:

           

70 Greene (a.k.a. 77 Hudson)

 Jersey City, NJ 480 $269,958 $264,663 $264,663 $—     98%  57%  53%  Q1 2010 Q1 2011

Red 160 (a.k.a. Redmond Way)

 Redmond, WA 250  84,382  51,920  51,920  —     62%  —     —     Q1 2011 Q1 2012
                     

Projects Under Development – Wholly Owned

  730  354,340  316,583  316,583  —         

Projects Under Development – Partially Owned:

           

The Brooklyner (a.k.a. 111 Lawrence St.)

 Brooklyn, NY 490  283,968  227,882  227,882  105,217   85%  13%  2%  Q3 2010 Q3 2011

Westgate

 Pasadena, CA 480  170,558  124,514  124,514  163,160 (2)  70%  11%  5%  Q2 2011 Q2 2012
                     

Projects Under Development – Partially Owned

  970  454,526  352,396  352,396  268,377       
                     

Projects Under Development

  1,700  808,866  668,979  668,979  268,377 (3)      
                     

Completed Not Stabilized – Wholly Owned (4):

           

Third Square (a.k.a. 303 Third) (5)

 Cambridge, MA 482  257,457  256,263  —    —      81%  78%  Completed Q3 2010

Reserve at Town Center II

 Mill Creek, WA 100  24,464  20,591  —    —      69%  60%  Completed Q3 2010

Reunion at Redmond Ridge

 Redmond, WA 321  53,175  53,151  —    —      54%  52%  Completed Q1 2011
                     

Projects Completed Not Stabilized – Wholly Owned

  903  335,096  330,005  —    —         

Completed Not Stabilized – Partially Owned (4):

           

Veridian (a.k.a. Silver Spring)

 Silver Spring,
MD		 457  149,962  149,289  —    113,282    97%  95%  Completed Q1 2010

Montclair Metro

 Montclair, NJ 163  48,730  45,076  —    33,434    49%  40%  Completed Q3 2010

Red Road Commons

 South
Miami, FL		 404  128,816  125,460  —    72,249    82%  78%  Completed Q4 2010
                     

Projects Completed Not Stabilized – Partially Owned

  1,024  327,508  319,825  —    218,965       
                     

Projects Completed Not Stabilized

  1,927  662,604  649,830  —    218,965       
                     

Completed and Stabilized During the Quarter – Wholly Owned:

           

Mosaic at Metro

 Hyattsville, MD 260  59,733  59,643  —    45,418    96%  95%  Completed Stabilized
                     

Projects Completed and Stabilized During the Quarter – Wholly Owned

  260  59,733  59,643  —    45,418       

Completed and Stabilized During the Quarter – Partially Owned:

           

1401 S. State (a.k.a. City Lofts)

 Chicago, IL 278  68,923  68,455  —    52,125    93%  91%  Completed Stabilized
                     

Projects Completed and Stabilized During the Quarter – Partially Owned

  278  68,923  68,455  —    52,125       
                     

Projects Completed and Stabilized During the Quarter

  538  128,656  128,098  —    97,543       
                     

Total Projects

 4,165 $1,600,126 $1,446,907 $668,979 $584,885       
                     

Land Held for Development

  N/A  N/A $252,320 $252,320 $34,876       
                     

Contents

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
          

(1)Total capital cost represents estimated development 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)DebtThe Company is primarily tax-exempt bonds that are entirely outstandingjointly developing with $47.4Toll 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 held in escrow byfor their allocated share of the lender and released as draw requests are made. This escrowed amount is classified as “Deposits – restricted” in the consolidated balance sheets at December 31, 2009.project.
(3)Of the approximately $139.9 million of capital cost remaining to be funded at December 31, 2009 for projects under development, $102.1 million will be funded by fully committed third party bank loans and the remaining $37.8 million will be funded by cash on hand.
(4)(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)Ten23 - The land under this development is subject to a long term ground lease.
(5)Third Square – BothThese development projects are owned 20% by the percentage leasedCompany and percentage occupied reflect80% 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 full 482 units included in phases Ipartner. The Company is responsible for constructing the projects and II. Phase I is 96% leasedhas 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 94% occupied. Phase II is 58% leaseda current unconsolidated outstanding balance of $29.8 million; the loan bears interest at 5.60% and 53% occupied.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


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
Table of Contents

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 and asor a result,possible loss or a range of loss, and no amounts have been accrued at December 31, 2009.2012. 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 may be expected to have a material adverse effect on the Company.

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

None.


Item 4. Mine Safety Disclosures

Not applicable.


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PART II

Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities


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

2009

        

Fourth Quarter Ended December 31, 2009

  $36.38  $27.54  $33.78  $0.3375

Third Quarter Ended September 30, 2009

  $33.06  $18.80  $30.70  $0.3375

Second Quarter Ended June 30, 2009

  $26.24  $17.73  $22.23  $0.4825

First Quarter Ended March 31, 2009

  $29.87  $15.68  $18.35  $0.4825

2008

        

Fourth Quarter Ended December 31, 2008

  $43.76  $21.27  $29.82  $0.4825

Third Quarter Ended September 30, 2008

  $49.00  $36.84  $44.41  $0.4825

Second Quarter Ended June 30, 2008

  $44.89  $37.76  $38.27  $0.4825

First Quarter Ended March 31, 2008

  $43.78  $31.07  $41.49  $0.4825


  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

The number of record holders of Common Shares at February 19, 201015, 2013 was approximately 3,400.3,000. The number of outstanding Common Shares as of February 19, 201015, 2013 was 281,884,878.

325,462,816.

OP Unit Dividends (ERP Operating Limited Partnership)
There is no established public market for the OP Units.
The following table sets forth, for the years indicated, the distributions on the Operating Partnership's OP Units.
  Distributions
  2012 2011
Fourth Quarter Ended December 31, $0.7675
 $0.5675
Third Quarter Ended September 30, $0.3375
 $0.3375
Second Quarter Ended June 30, $0.3375
 $0.3375
First Quarter Ended March 31, $0.3375
 $0.3375
The number of record holders of OP Units in the Operating Partnership at February 15, 2013 was 501. The number of outstanding OP Units as of February 15, 2013 was 339,571,824.
Unregistered Common Shares Issued in the Quarter Ended December 31, 20092012

(Equity Residential)

During the quarter ended December 31, 2009, the Company2012, EQR issued 234,973431,032 Common Shares in exchange for 234,973431,032 OP Units held by various limited partners of the Operating Partnership. OP Units are generally exchangeable into Common Shares of EQR 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. SomeThese shares were either registered under the Securities Act of these shares were1933, as amended (the “Securities Act”), or issued in reliance on exemptionsan exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, 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 the CompanyEQR from the limited partners in connection with these transactions, the CompanyEQR believes it may rely on these exemptions.


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Equity Compensation Plan Information

The following table provides information as of December 31, 20092012 with respect to the Company’sCompany's Common Shares that may be issued under its existing equity compensation plans.

Plan Category

  Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights		  Weighted average
exercise price of
outstanding
options, warrants
and rights		  Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities in
column (a))
   (a) (1)  (b) (1)  (c) (2)

Equity compensation plans approved by shareholders

  11,349,750  $32.03  9,857,325

Equity compensation plans not approved by shareholders

  N/A   N/A  N/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)
Equity compensation plans
     approved by shareholders
 8,115,255 $41.31 14,278,690
Equity compensation plans not
     approved by shareholders
 N/A N/A N/A

(1)

The amounts shown in columns (a) and (b) of the above table do not include 954,366524,953 outstanding Common Shares (all of which are restricted and subject to vesting requirements) that were granted under the Company’sCompany's Amended and Restated 1993 Share Option and Share Award Plan, as amended (the “1993

Plan”"1993 Plan") and, the Company’sCompany'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’sCompany's ESPP.

(2)Includes 6,295,99211,097,881 Common Shares that may be issued under the 20022011 Plan, of which only 25%33% may be in the form of restricted shares, and 3,561,3333,180,809 Common Shares that may be sold to employees and trustees under the ESPP.

The aggregate number


On June 16, 2011, the shareholders of securities available for issuance (inclusive of restricted shares previously grantedEQR approved the Company's 2011 Plan and outstanding and shares underlying outstanding options) under the 2002 Plan equals 7.5% of the Company’s outstandingCompany filed a Form S-8 registration statement to register 12,980,741 Common Shares calculated on a fully diluted basis, determined annually on the first dayunder this plan. As of each calendar year. On January 1, 2010, this amount equaled 22,091,629, of which 6,295,992December 31, 2012, 11,097,881 shares were available for future issuance. NoIn conjunction with the approval of the 2011 Plan, no further awards may be granted under the 2002 Plan. The 2011 Plan after February 20, 2012.

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 table setstables set forth selected financial and operating information on a historical basis for the Company.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.Company and the Operating Partnership. All amounts have also been restated in accordance with the guidance on discontinued operations, noncontrolling interests and convertible debt.operations. Certain capitalized terms as used herein are defined in the Notes to Consolidated Financial Statements.

CONSOLIDATED HISTORICAL FINANCIAL INFORMATION

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

   Year Ended December 31, 
   2009 (3)  2008 (3)  2007 (3)  2006 (3)  2005 

OPERATING DATA:

      

Total revenues from continuing operations

  $1,943,711   $1,975,669   $1,824,046   $1,584,944   $1,303,188  
                     

Interest and other income

  $16,684   $33,515   $20,037   $30,785   $68,220  
                     

Income (loss) from continuing operations

  $28,031   $(12,823)  $21,053   $(5,937)  $70,458  
                     

Discontinued operations, net

  $353,998   $449,236   $1,026,303   $1,153,554   $860,788  
                     

Net income

  $382,029   $436,413   $1,047,356   $1,147,617   $931,246  
                     

Net income available to Common Shares

  $347,794   $393,115   $951,242   $1,028,381   $807,792  
                     

Earnings per share – basic:

      

Income (loss) from continuing operations available to Common Shares

  $0.05   $(0.10)  $(0.04)  $(0.17)  $0.02  
                     

Net income available to Common Shares

  $1.27   $1.46   $3.40   $3.55   $2.83  
                     

Weighted average Common Shares outstanding

   273,609    270,012    279,406    290,019    285,760  
                     

Earnings per share – diluted:

      

Income (loss) from continuing operations available to Common Shares

  $0.05   $(0.10)  $(0.04)  $(0.17)  $0.02  
                     

Net income available to Common Shares

  $1.27   $1.46   $3.40   $3.55   $2.79  
                     

Weighted average Common Shares outstanding

   290,105    270,012    279,406    290,019    310,785  
                     

Distributions declared per Common Share outstanding

  $1.64   $1.93   $1.87   $1.79   $1.74  
                     

BALANCE SHEET DATA (at end of period):

      

Real estate, before accumulated depreciation

  $18,465,144   $18,690,239   $18,333,350   $17,235,175   $16,590,370  

Real estate, after accumulated depreciation

  $14,587,580   $15,128,939   $15,163,225   $14,212,695   $13,702,230  

Total assets

  $15,417,515   $16,535,110   $15,689,777   $15,062,219   $14,108,751  

Total debt

  $9,392,570   $10,483,942   $9,478,157   $8,017,008   $7,591,073  

Redeemable Noncontrolling Interests - Operating Partnership

  $258,280   $264,394   $345,165   $509,310   $433,927  

Total Noncontrolling Interests

  $127,174   $163,349   $188,605   $224,783   $234,815  

Total Shareholders’ equity

  $5,047,339   $4,905,356   $4,917,370   $5,602,236   $5,148,781  

OTHER DATA:

      

Total properties (at end of period)

   495    548    579    617    926  

Total apartment units (at end of period)

   137,007    147,244    152,821    165,716    197,404  

Funds from operations available to Common Shares and Units – basic (1) (2)

  $615,505   $618,372   $713,412   $712,524   $784,625  

Cash flow provided by (used for):

      

Operating activities

  $672,462   $755,252   $793,232   $755,774   $698,531  

Investing activities

  $103,579   $(344,028)  $(200,749)  $(259,780)  $(592,201) 

Financing activities

  $(1,473,547)  $428,739   $(801,929)  $(324,545)  $(101,007) 


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Equity Residential
CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
(Financial information in thousands except for per share and property data)
   
  Year Ended December 31,
  2012 2011 2010 2009 2008
OPERATING DATA:  
  
  
  
  
Total revenues from continuing operations $2,123,715
 $1,883,491
 $1,674,709
 $1,548,264
 $1,543,817
Interest and other income $150,547
 $7,965
 $5,118
 $16,520
 $33,192
Income (loss) from continuing operations $311,555
 $57,794
 $(103,108) $(80,394) $(132,946)
Discontinued operations, net $569,649
 $877,403
 $399,091
 $462,423
 $569,359
Net income $881,204
 $935,197
 $295,983
 $382,029
 $436,413
Net income available to Common Shares $826,212
 $879,720
 $269,242
 $347,794
 $393,115
Earnings per share – basic:  
  
  
  
  
Income (loss) from continuing operations
    available to Common Shares
 $0.93
 $0.14
 $(0.39) $(0.33) $(0.52)
Net income available to Common Shares $2.73
 $2.98
 $0.95
 $1.27
 $1.46
Weighted average Common Shares outstanding 302,701
 294,856
 282,888
 273,609
 270,012
Earnings per share – diluted:  
  
  
  
  
Income (loss) from continuing operations
    available to Common Shares
 $0.92
 $0.14
 $(0.39) $(0.33) $(0.52)
Net income available to Common Shares $2.70
 $2.95
 $0.95
 $1.27
 $1.46
Weighted average Common Shares outstanding 319,766
 312,065
 282,888
 273,609
 270,012
Distributions declared per Common Share
    outstanding
 $1.78
 $1.58
 $1.47
 $1.64
 $1.93
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
Real estate, after accumulated depreciation $16,096,208
 $15,868,363
 $15,365,014
 $14,587,580
 $15,128,939
Total assets $17,201,000
 $16,659,303
 $16,184,194
 $15,417,515
 $16,535,110
Total debt $8,529,244
 $9,721,061
 $9,948,076
 $9,392,570
 $10,483,942
Redeemable Noncontrolling Interests –
   Operating Partnership
 $398,372
 $416,404
 $383,540
 $258,280
 $264,394
Total shareholders’ equity $7,289,813
 $5,669,015
 $5,090,186
 $5,047,339
 $4,905,356
Total Noncontrolling Interests $237,294
 $193,842
 $118,390
 $127,174
 $163,349
OTHER DATA:  
  
  
  
  
Total properties (at end of period) 403
 427
 451
 495
 548
Total apartment units (at end of period) 115,370
 121,974
 129,604
 137,007
 147,244
Funds from operations available to Common
   Shares and Units – basic (1) (3) (4)
 $993,217
 $752,153
 $622,786
 $615,505
 $618,372
Normalized funds from operations available to
   Common Shares and Units – basic (2) (3) (4)
 $883,269
 $759,665
 $682,422
 $661,542
 $735,062
Cash flow provided by (used for):  
  
  
  
  
Operating activities $1,046,251
 $798,334
 $726,037
 $670,812
 $755,027
Investing activities $(261,049) $(194,828) $(639,458) $105,229
 $(343,803)
Financing activities $(556,533) $(650,993) $151,541
 $(1,473,547) $428,739

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ERP Operating Limited Partnership
CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
(Financial information in thousands except for per Unit and property data)
           
  Year Ended December 31,
  2012 2011 2010 2009 2008
OPERATING DATA:  
  
  
  
  
Total revenues from continuing operations $2,123,715
 $1,883,491
 $1,674,709
 $1,548,264
 $1,543,817
Interest and other income $150,547
 $7,965
 $5,118
 $16,520
 $33,192
Income (loss) from continuing operations $311,555
 $57,794
 $(103,108) $(80,394) $(132,946)
Discontinued operations, net $569,649
 $877,403
 $399,091
 $462,423
 $569,359
Net income $881,204
 $935,197
 $295,983
 $382,029
 $436,413
Net income available to Units $864,853
 $920,500
 $282,341
 $368,099
 $419,241
Earnings per Unit – basic:  
  
  
  
  
Income (loss) from continuing operations
   available to Units
 $0.93
 $0.14
 $(0.39) $(0.33) $(0.52)
Net income available to Units $2.73
 $2.98
 $0.95
 $1.27
 $1.46
Weighted average Units outstanding 316,554
 308,062
 296,527
 289,167
 287,631
Earnings per Unit – diluted:  
  
  
  
  
Income (loss) from continuing operations
   available to Units
 $0.92
 $0.14
 $(0.39) $(0.33) $(0.52)
Net income available to Units $2.70
 $2.95
 $0.95
 $1.27
 $1.46
Weighted average Units outstanding 319,766
 312,065
 296,527
 289,167
 287,631
Distributions declared per Unit outstanding $1.78
 $1.58
 $1.47
 $1.64
 $1.93
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
Real estate, after accumulated depreciation $16,096,208
 $15,868,363
 $15,365,014
 $14,587,580
 $15,128,939
Total assets $17,201,000
 $16,659,303
 $16,184,194
 $15,417,515
 $16,535,110
Total debt $8,529,244
 $9,721,061
 $9,948,076
 $9,392,570
 $10,483,942
Redeemable Limited Partners $398,372
 $416,404
 $383,540
 $258,280
 $264,394
Total partners' capital $7,449,419
 $5,788,551
 $5,200,585
 $5,163,459
 $5,043,185
Noncontrolling Interests – Partially Owned
   Properties
 $77,688
 $74,306
 $7,991
 $11,054
 $25,520
OTHER DATA:  
  
  
  
  
Total properties (at end of period) 403
 427
 451
 495
 548
Total apartment units (at end of period) 115,370
 121,974
 129,604
 137,007
 147,244
Funds from operations available to Units –
   basic (1) (3) (4)
 $993,217
 $752,153
 $622,786
 $615,505
 $618,372
Normalized funds from operations available to
   Units – basic (2) (3) (4)
 $883,269
 $759,665
 $682,422
 $661,542
 $735,062
Cash flow provided by (used for):  
  
  
  
  
Operating activities $1,046,251
 $798,334
 $726,037
 $670,812
 $755,027
Investing activities $(261,049) $(194,828) $(639,458) $105,229
 $(343,803)
Financing activities $(556,533) $(650,993) $151,541
 $(1,473,547) $428,739

(1)

(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 property,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. FFO available to Common Shares and Units is calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares in accordance with accounting principles generally accepted in the United States. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the


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“Noncontrolling Interests – Operating Partnership”. Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for EQR Common Shares on a one-for-one basis. See Item 7 for a reconciliation of net income to

(2)Normalized funds from operations (“Normalized FFO”) begins with FFO and FFO available to Common Shares and Units.

excludes:
(2)
▪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);
▪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, and 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 measuresa measure of liquidity. The Company’s calculation of FFO, and 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.
(3)Effective January 1, 2009, companies are required to retrospectively expense certain implied costs of the option value related to convertible debt. As a result, net income, net income available to Common Shares and
(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 – basic have all been reduced by approximately $10.6 million, $13.3 million, $10.1 million and $3.6 millionOperating Partnership”. Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for the years ended December 31, 2009, 2008, 2007 and 2006, respectively.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’sCompany's ability to control the Operating Partnership and its subsidiaries, other than entities owning interests in the Partially Owned Properties – Unconsolidated and certain other entities in which the Company has investments, the Operating Partnership and each such subsidiary entity has been consolidated with the Company for financial reporting purposes.purposes, except for two unconsolidated developments 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, 2009.

2012.


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’sCompany'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’smanagement'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:


▪We intend to actively acquire and/or develop multifamily properties for rental operations as market conditions dictate.

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We may also acquire multifamily properties for rental operations as market conditions dictate. The Company also develops projects and currently has several properties under development.that are unoccupied or in the early stages of lease up. We may begin new development activities if conditions warrant.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 major real estate investors with significant capital will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development 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. ToWe have acquired in the extentpast and intend to continue to pursue the acquisition of properties and portfolios of properties, including large portfolios, that we do develop more properties if conditions warrant, we expectcould increase our size and result in alterations to do so ourselves in addition to co-investing with our development partners.capital structure. The total number of apartment units under development, units, costs of development and estimated completion dates are subject to uncertainties arising from changing economic conditions (such as the cost of labor and construction materials), competition and local government regulation;

Debt financing and other capital required by the Company may not be available or may only be available on adverse terms;

Labor and materials required for maintenance, repair, capital expenditure or development may be more expensive than anticipated;

Occupancy levels and market rents may be adversely affected by national and local economic and market conditions including, without limitation, new construction and excess inventory of multifamily housing and single family housing, slow or negative employment growth, availability of low interest mortgages for single family home buyers and the potential for geopolitical instability, all of which are beyond the Company’s control; and

•
▪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, rental housing subsidized by the government, other government programs that favor single family rental housing or owner occupied housing over multifamily rental housing, slow or negative employment growth and household formation, the availability of low-interest mortgages 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 Notes 2, 5, 11 and 18 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.

The Company 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 onethe general partner of, and as of December 31, 2012 owned an approximate 95.9% ownership interest in ERPOP. All of the largestCompany'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 real estate companies and is the largest publicly traded owner of multifamily properties in the United States (based on the aggregate market value of its outstanding Common Shares, the number of apartment units wholly owned and total revenues earned). equity.

The Company’sCompany's corporate headquarters are located in Chicago, Illinois and the Company also operates property management offices throughout the United States.in each of its markets. As of December 31, 2009,2012, the Company hashad approximately 4,1003,600 employees who provideprovided real estate operations, leasing, legal, financial, accounting, acquisition, disposition, development and other support functions.

EQR is the general partner of, and as of December 31, 2009 owned an approximate 95.2% ownership interest in, ERP Operating Limited Partnership, an Illinois limited partnership (the “Operating Partnership”). The Company is structured as an umbrella partnership REIT (“UPREIT”) under which all property ownership and related business operations are conducted through the Operating Partnership and its subsidiaries. References to the “Company” include EQR, the Operating Partnership and those entities owned or controlled by the Operating Partnership and/or EQR.


Business Objectives and Operating and Investing Strategies

The Company seeks to maximize current income, capital appreciation of each property and the total return for its shareholders. The Company’s strategy for accomplishing these objectives includes:

Leveraging our size and scaleinvests in four critical ways:

Investing inhigh 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 appreciation. We are focused primarily on the six core coastal, high barrier to entry markets of Boston, New York, Washington DC, Southern California, 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 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 totalrevenue while exercising tight cost control to generate the highest possible return on an enterprise level;

Meetingto 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 needscustomer 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 by offering a wide array of product choicesutilize our web-based resident portal which allows them to sign their leases, review their accounts and a commitment to service;

Engaging, retainingmake payments, provide feedback and attracting the best employees by providing them with the education, resources and opportunities to succeed; and

Sharing resources and best practices in both property management and across the enterprise.

Owning a highly diversified portfolio in our target markets. Target markets are defined by a combination of the following criteria:

High barrier-to-entry markets where because of land scarcity or government regulation it is difficult or costly to build new apartment complexes leading to low supply;

Strong economic growth leading to high demand for apartments; and

Markets with an attractive quality of life leading to high demand and retention.

Giving residents reasons to stay with the Company by providing a range of product choices available in our diversified portfolio and by enhancing their experience with us through meticulous customermake service by our employees and by providing various value-added services.

requests on-line.

Being open and responsive to changes in the market in order to take advantage of investment opportunities that align with our long-term vision.

Acquisition, Development and Disposition Strategies

The Company anticipates that future property acquisitions, developments and dispositions will occur within the United States. Acquisitions and developments may be financed from various sources of capital, which may include retained cash flow, issuance of additional equity and debt, securities, sales of properties and joint venture agreements and collateralized and uncollateralized borrowings.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. EQRThe Company may also acquire land parcels to hold and/or sell based on market opportunities.

When evaluating potential acquisitions, developments 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 dispositions,sold them as condominiums but is not currently active in this line of business.

Over the past several years, the Company generally considershas 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 133,000 apartment units primarily in its non-core markets for an aggregate sales price of approximately $11.1 billion, acquired over 44,000 apartment units in its core markets for approximately $10.3 billion and began approximately $3.0 billion of development projects in its core markets. We are currently seeking to acquire and develop assets primarily in the following factors:

strategically targeted markets;

income levelsmetropolitan areas (our core markets): Boston, New York, Washington DC, Southern California, San Francisco and employment growth trendsSeattle. We also have investments (in the aggregate about 15.8% of our NOI at December 31, 2012) in other markets including South Florida, Denver and New England (excluding Boston) but do not currently intend to acquire or develop new assets in these markets. Further, we are in the relevant market;

employmentprocess of exiting Atlanta, Phoenix, Orlando and household growthJacksonville as we raise capital to complete the Archstone transaction.

As part of its strategy, the Company purchases completed and net migrationfully occupied apartment properties, partially completed or partially occupied properties or 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, no single metropolitan area accounted for more than 15.9% of our NOI, though no guarantee can be made that NOI concentration may not increase in the relevant market’s population;

future.

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

retain the location, construction quality, age, conditionbest employees by providing them with the education, resources and design of the property;

the currentopportunities to succeed. We provide many classroom and projected cash flow ofon-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 property 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 abilityenvironmental impacts of our business activities. 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 increase cash flow;

reduce energy and water usage by investing in energy saving technology while positively impacting the potential for capital appreciationexperience of our residents and the property;

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.


Current Environment

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 resident leases, including the potential for rent increases;

agreement, the potential for economic growthCompany will acquire approximately 60% of Archstone's assets and the taxliabilities and regulatory environmentAvalonBay will acquire approximately 40% of the community in which the property is located;

the occupancyArchstone's assets and demand by residents forliabilities. The Company will acquire approximately 75 operating properties, of a similar type in the vicinity (the overall market and submarket);

the prospects for liquidity through sale, financing or refinancing of the property;

the benefits of integration into existing operations;

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

competition from existing multifamily properties, comparably priced single family homes or rentals, residentialfour 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 potential forassumption of the constructionCompany's portion of new multifamily properties in the area;liabilities related to the Archstone assets (other than certain liabilities owed to Lehman and

opportunistic selling based on demand and price of high quality assets, including condominium conversions.

certain transaction expenses). The Company generally reinvests the proceeds received from property dispositions primarilyalso expects to achieve its acquisition, development and rehab strategies and at times to fund its debt maturities and debt and equity repurchase activities.assume approximately $3 billion of consolidated Archstone debt. In addition, when feasible, the Company may structure these transactions as tax-deferred exchanges.

Current Environment

The slowdownand AvalonBay will acquire certain assets of Archstone, including Archstone’s interests in the economy, which acceleratedcertain joint ventures, interests in the fourth quartera portfolio of 2008properties located in Germany and continued into 2009, coupled with continued job losses and/or lackcertain development land parcels, and will become subject to approximately $179.9 million in preferred interests of job growth leads usArchstone unitholders through various unconsolidated joint ventures expected to be cautious regarding expected performance for 2010. Since the fourth quarter of 2008 and continuing into the fourth quarter of 2009, our revenue has declined in comparison to the prior year in most of our major markets as the economic slowdown continues to impact existing and prospective residents. Markets with little employment loss have performed better than markets with larger employment issues. Although all of our markets experienced job losses in 2009, the pace of those losses appears to have begun to slow. While the job market is likely to remain weak in 2010, beginning late in the fourth quarter of 2009, household spending was reported to have increased and the deterioration in the labor market showed signs of abating. Despite a generally improving credit environment and better general economic conditions,owned 60% by the Company may continueand 40% by AvalonBay. The transaction is expected to experience a period of declining revenues, which would adversely impact the Company’s results of operations. The vast majority of our leases are for terms of 12 months or less. As a result, we quickly feel the impact of an economic downturn which limits our ability to raise rents or causes us to lower rents on turnover units and lease renewals. During late 2008 and early 2009, our rental rates declined on average between 9% and 10% for new residents but on average less than 1% for renewing residents. Rental rates have not declined, on average, sinceclose in the first quarter of 20092013.


We expect continued growth in 2013 same store revenue (anticipated increase ranging from 4.0% to 5.0%) and began2013 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 improvementa decrease in the latter part of the year. However, since our rental rates increased during most of 2008, our quarter over quarter revenue declines worsened each quarter in 2009turnover as compared to 2008. Quarter over quarter revenue declines are2012. Although occupancy is higher than anticipated for this time of the year, it is expected to continue in 2010 (although they should be less negative in 2010 vs. 2009 than when comparing 2009 vs. 2008). Given the roll-down in lease rates that occurred throughout 2009, the full year comparison to 2010 will continue to show declining revenue even if quarter over quarter revenue improvement begins

remain consistent with last year. Despite slow growth in the second halfoverall economy, our business continues to perform well because of 2010. Our revenues are also impacted by our resident turnover rates,the combined forces of demographics, household formations and the continued aversion to home ownership, all of which have generally declined, and our occupancy rates, which began to rise in the fourth quarter of 2009. After three consecutive years of excellent expense control (same store expenses declined 0.1% between 2009 and 2008 and grew 2.2% between 2008 and 2007 and 2.1% between 2007 and 2006), theshould ensure a continued strong demand for rental housing.


The Company anticipates that 20102013 same store expenses will increase between 1.0% and 2.0%2.5% to 3.5% primarily due to cost pressures from non-controllable areas such asincreases in real estate taxes, which are expected to increase over 6% in 2013. This is primarily due to rate and utilities.value increases in certain states and municipalities, reflecting those states' and municipalities' continued economic challenges and the dramatic improvement in apartment fundamentals. The combinationother key driver of expected declinesthis increase is the burn off of 421a tax abatements in revenues and moderately increasingNew York City. Very good expense levels will have a negative impact oncontrol in the Company’s resultscore 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 operationssame store annual expense growth below 3.0%.

While competition for 2010.

The strained credit environment has negatively impacted the availability and pricing of debt capital. However, during this time, the multifamily residential sector has benefited from the continued liquidity provided by Fannie Mae and Freddie Mac. A vast majority of the properties we soldare interested in 2008acquiring is significant due to continued strength in market fundamentals, we are focusing our attention in 2013 on closing the Archstone acquisition and 2009 were financed for the purchaser by one of these agencies. Furthermore, Fannie Maeintegrating its properties and Freddie Mac provided us with approximately $1.6 billion of secured mortgage financing in 2008 and $500.0 million in 2009 at attractive rates when compared to other sources of credit at that time. While unsecured credit markets improved in the latter part of 2009 and the Company currently has unsecured lending options available to it at attractive rates, should the agencies discontinue providing liquidity to our sector, have their mandates changed or reduced or be disbanded or reorganized by the government, it would significantly reduceoperations. We believe our access to debt capital, and/or increase borrowing costsour ability to execute large, complex transactions and would significantly reduce our sales of assets.

In responseability to the recession and liquidity issues prevalentefficiently stabilize large scale lease up properties provide us with a competitive advantage, which is demonstrated in the debt markets, we took a number of steps to better position ourselves. In early 2008, we began pre-funding our maturing debt obligations with approximately $1.6 billion in secured mortgage financing obtained from Fannie Mae and Freddie Mac. We also significantly reduced our acquisition activity. During the second half of 2008 and through the fourth quarter of 2009, we onlypending Archstone transaction. The Company acquired four properties (one of which was the buyout of our partner in an unconsolidated asset) and a long-term leasehold interest in a land parcel while we continued selling non-core assets. During the year ended December 31, 2009, the Company sold 60nine consolidated properties consisting of 12,4891,896 apartment units for $1.0 billion, as well as 62 condominium units for $12.0 million. The Company acquired two properties consisting of 566 units for $145.0$906.3 million one previously unconsolidated property consisting of 250 units for $18.5 million from its institutional joint venture partner and a long-term leasehold interest in a land parcel for $11.5 million during the year ended December 31, 2009. While2012. The Company did not budget for any acquisitions to occur outside of Archstone during the year ending December 31, 2013.


The Company also acquired six land parcels for $141.2 million during the year ended December 31, 2012. The Company started construction on two projects (inclusive of the Company's co-development with Toll Brothers to develop 400 Park Avenue South in New York City) representing 357 apartment units totaling approximately $306.0 million of development costs during the year ended December 31, 2012. The Company currently anticipates starting between $500.0 million and $700.0 million of new developments in 2013, some of which were delayed from 2012 as we worked on funding for the Archstone transaction.

The Company continues to sell non-core assets and reduce its exposure to non-core markets as we believe these salesassets 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 non-coreSection 1031 tax deferred exchanges. The

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Company sold 35 consolidated properties consisting of 9,012 apartment units for $1.1 billion during the year ended December 31, 2012. These dispositions combined with reinvestment of the cash proceeds in assets better positions us for future success, they have resulted and will continuewith lower cap rates (see definition below) were dilutive to result inour per share results. The Company defines dilution particularly whenfrom transactions as the netlost NOI from sales proceeds are initiallythat were not reinvested in activities generating equivalent income such as acquisition of rentalother apartment properties or repaymentwere reinvested in properties with a lower cap rate. The Company anticipates consolidated dispositions of debt. Additionally, we have significantly reduced our development activities, starting only two new projectsapproximately $4.0 billion during the year ending December 31, 2013. The Company plans to fund a portion of 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 occur in the first half of 2008 and none in the second half of the year or during 2009. We also reduced the number of planned development projects we2013. While this accelerated disposition program will undertake in the future and took a $116.4 million impairment charge in 2008be dilutive to our per share results, it should reduce the value of five assets that we no longer planexecution risk on pursuing. We took an additional $11.1 million impairment charge in 2009 to reduce the value of one asset. The Company reduced its quarterly common share dividend beginning with the dividend for the third quarter of 2009, from $0.4825 per share (an annual rate of $1.93 per share) to $0.3375 per share (an annual rate of $1.35 per share).

The credit environment improved throughout mid and late 2009 and weArchstone transaction.


We currently have access to multiple sources of capital allowing usincluding the equity markets as well as both the secured and unsecured debt markets. In December 2012, the Company raised $1.2 billion in equity in a less cautious posturepublic offering of 21,850,000 Common Shares priced at $54.75 per share. We also raised $192.3 million under our ATM program in 2012. On January 11, 2013, the Company replaced its existing $1.75 billion credit facility with respect to pre-funding oura new $2.5 billion unsecured revolving credit facility maturing debt obligations. AsApril 1, 2018. The Company believes that the new facility contains a resultdiversified and strong bank group which increases its balance sheet flexibility going forward. On January 11, 2013, the Company also 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. With the completion of the improved credit environment, in late 2009, we utilized $366.2 million ofthese financing activities, along with cash on hand, the Company believes it has sufficient capital available to repurchase certain unsecured notesfund its portion of the Archstone acquisition cash price, transaction costs and convertible notes in public tender offers. Concurrently, beginning in the fourth quarter of 2009, we began to see an increase in the availability of attractive acquisition opportunities. We expect to revert from a net seller of assets during 2009 to a net buyer of assets in 2010. During 2010, we expect that property dispositions will be more a funding source for attractive acquisition opportunities that we may identify than for providing needed capital to protect the Company’s financial position. Our access to capital and our ability to execute large, complex transactions should be competitive advantages in 2010. However, should a double-dip recession materialize or credit/equity markets deteriorate, we may seek to take steps similar to what we did in 2008 and early 2009 to increase liquidity and better position ourselves.

Our specific current expectations regarding our results for 2010 and certain items that will affect them are set forth under Results of Operations below.

required debt paydowns.


We believe that cash and cash equivalents, securities readily convertible to cash, current availability on our revolving credit facility and delayed draw term loan facility and disposition proceeds for 20102013 will provide sufficient liquidity to meet our funding obligations relating to asset acquisitions (including Archstone), debt retirementmaturities and existing development projects through 2010.2013. We expect that our remaining longer-term funding requirements will be met through some combination of new borrowings, equity issuances (including the Company’sEQR's ATM shareCommon Share offering program), property dispositions, joint ventures and cash generated from operations.

Despite


There is significant uncertainty surrounding the challenging conditions noted above,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, 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. Such changes may also provide an advantage to us by making the cost of financing single family home ownership more expensive and provide us a competitive advantage given the size of our balance sheet and the multiple sources of capital to which we have access.
We believe that the Company is well-positioned notwithstanding the slow economic recovery. Ouras of December 31, 2012 because our properties are geographically diverse, and were approximately 94%94.3% occupied as of December 31, 2009, little new multifamily rental supply has been added to most of our markets(95.0% on a same store basis) and the long-term demographic picture is positive.

With the exception of the Washington, D.C. and Seattle market areas and the San Jose sub-market area of San Francisco, little new multifamily rental supply will be added to our core markets over the next several years. We believe we are well-positioned with aour strong balance sheet and sufficientample liquidity will allow us to coverfund our debt maturities and development fundingscosts in the near term, whichand should also allow us to take advantage of investment opportunities in the future. WhenAs 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 quickly 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 or recycle its capital investment in apartment properties located in strategically targeted markets during the years ended December 31, 20092012 and December 31, 2008.2011. In summary, we:

Year Ended December 31, 2009:

2012:
▪
Acquired $906.3 million of apartment properties consisting of nine consolidated properties and 1,896 apartment units at a weighted average cap rate (see definition below) of 4.7% and acquired six 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

Acquired $145.0 million

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weighted average cap rate of two properties and 566 units (excluding the Company’s buyout of its partner’s interest in one previously unconsolidated property) and a long-term leasehold interest in a land parcel for $11.5 million, all of which we deem to be in our strategic targeted markets; and

Sold $1.0 billion of apartment properties consisting of 60 properties and 12,489 units (excluding the Company’s buyout of its partner’s interest in one previously unconsolidated property)6.2%, as well as 62 condominium units for $12.0 million, the majority of which waswere 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, 2008:

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 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, consisting of contributions by the Company and Toll Brothers of approximately $76.1 million and $57.9 million, respectively, for future development;
▪Acquired one unoccupied property in the San Francisco Bay Area in the third quarter of 2011 for $39.5 million consisting of 95 apartment units that is expected to stabilize at a 6.3% yield on cost;
▪Acquired a 97,000 square foot commercial building adjacent to our Harbor Steps apartment property in downtown Seattle for $11.8 million for potential redevelopment; and
▪Sold $1.5 billion of consolidated apartment properties consisting of 47 properties and 14,345 apartment units at a weighted average cap rate of 6.5% generating an unlevered internal rate of return (IRR), inclusive of management costs, of 11.1% and one land parcel for $22.8 million, the majority of which were in exit or less desirable markets.    

Acquired $380.7 million of apartment properties consisting of 7 properties and 2,141 units and an uncompleted development property for $31.7 million and invested $2.4 million to obtain the management contract rights and towards the redevelopment of a military housing project consisting of 978 units, all of which we deem to be in our strategic targeted markets; and

Sold $896.7 million of apartment properties consisting of 41 properties and 10,127 units, as well as 130 condominium units for $26.1 million and a land parcel for $3.3 million, the majority of which was in exit or less desirable markets.

The Company’sCompany'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 theits operating performance of a real estate company because it is a direct measure of the actual operating results of the Company’sCompany's apartment communities.

The cap rate is generally the first year NOI yield (net of replacements) on the Company's investment.

Properties that the Company owned and were stabilized (see definition below) for all of both 20092012 and 20082011 (the “2009“2012 Same Store Properties”), which represented 113,59898,577 apartment units, impacted the Company’sCompany's results of operations. Properties that the Company owned for all of both 20082011 and 20072010 (the “2008“2011 Same Store Properties”), which represented 115,051101,312 apartment units, also impacted the Company’sCompany's results of operations. Both the 20092012 Same Store Properties and 20082011 Same Store Properties are discussed in the following paragraphs.

The Company’sfollowing 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, 2012:

 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


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 Year Ended
 December 31, 2012
 Properties
Apartment
Units
Same Store359
98,577
   
Non-Same Store:  
2012 acquisitions9
1,896
   2011 acquisitions21
6,198
   Lease-up properties not yet
      stabilized (2)
11
3,656
   Other1
4
Total Non-Same Store42
11,754
Military Housing (not consolidated)2
5,039
   
Total Properties and Apartment Units403
115,370
   
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.

(1)In 2010, the Company consolidated seven properties containing 1,811 apartment units that had previously been categorized as unconsolidated. Of these properties, one containing 208 apartment units was sold in 2010, two containing 560 apartment units were sold in 2011 and two containing 542 apartment units were sold in 2012.
(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.
The Company's acquisition, disposition and completed development activities also impacted overall results of operations for the years ended December 31, 20092012 and 2008. Dilution, as a result of the Company’s net asset sales, negatively impacts property net operating income.2011. The impacts of these activities are discussed in greater detail in the following paragraphs.

Comparison of the year ended December 31, 20092012 to the year ended December 31, 20082011

For the year ended December 31, 2009,2012, the Company reported diluted earnings per share of $1.27$2.70 compared to $1.46$2.95 per share for the year ended December 31, 2008.2011. The difference is primarily due to the following:

$57.6 millionhigher gains from property sales in lower net gains on sales of discontinued operations in 20092011 vs. 2008;

$84.0 million in lower property NOI in 2009 vs. 2008, primarily driven by $51.6 million in lower same store NOI and dilution from transaction activities,2012, partially offset by higher NOI contributions fromtotal property net operating income driven by the positive impact of the Company’s same store and lease-up properties;activity and

Partially offset by $105.3 the Company's recognition of $150.0 million in lower impairment lossestermination fees related to our pursuit of Archstone (see Note 18 in 2009 vs. 2008.

the Notes to Consolidated Financial Statements for further discussion).


For the year ended December 31, 2009,2012, income from continuing operations increased approximately $40.9$253.8 million when compared to the year ended December 31, 2008.2011. The increase in continuing operations is discussed below.


Revenues from the 20092012 Same Store Properties decreased $52.4increased $97.5 million primarily as a result of a decreasean increase in average rental rates charged to residents and a decrease in occupancy.slightly higher occupancy, partially offset by increased turnover. Expenses from the 20092012 Same Store Properties decreased $0.8increased $11.2 million primarily due to lower property management costs, partially offset by higherincreases in real estate taxes and utility costs.insurance, partially offset by a decrease in utilities. The following tables provide comparative same store results and statistics for the 20092012 Same Store Properties:

2009 vs. 2008

Same Store Results/Statistics

$ in thousands (except for Average Rental Rate) – 113,598 Same Store Units

   Results  Statistics 

Description

  Revenues  Expenses  NOI  Average
Rental
Rate (1)		  Occupancy  Turnover 

2009

  $1,725,774   $644,294   $1,081,480   $1,352   93.8%  61.0% 

2008

  $1,778,183   $645,123   $1,133,060   $1,383   94.5%  63.7% 
                       

Change

  $(52,409)  $(829)  $(51,580)  $(31)  (0.7)%  (2.7)% 
                       

Change

   (2.9)%   (0.1)%   (4.6)%   (2.2)%   



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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%    

(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 20092012 Same Store Properties:

2009 vs. 2008

Same Store Operating Expenses

$ in thousands – 113,598 Same Store Units

   Actual
2009		  Actual
2008		  $
Change		  %
Change		  % of Actual
2009
Operating
Expenses		 

Real estate taxes

  $173,113  $171,234  $1,879   1.1%  26.9% 

On-site payroll (1)

   155,912   156,601   (689)  (0.4)%  24.2% 

Utilities (2)

   100,184   99,045   1,139   1.1%  15.5% 

Repairs and maintenance (3)

   94,556   95,142   (586)  (0.6)%  14.7% 

Property management costs (4)

   63,854   67,126   (3,272)  (4.9)%  9.9% 

Insurance

   21,689   20,890   799   3.8%  3.4% 

Leasing and advertising

   15,664   15,043   621   4.1%  2.4% 

Other operating expenses (5)

   19,322   20,042   (720)  (3.6)%  3.0% 
                   

Same store operating expenses

  $644,294  $645,123  $(829)  (0.1)%  100.0% 
                   


2012 vs. 2011
Same Store Operating Expenses
$ in thousands – 98,577 Same Store Apartment Units
          % of Actual
2012
Operating
Expenses
          
  Actual
2012		 Actual
2011		 $
Change		 %
Change		 
      
Real estate taxes $197,316
 $184,773
 $12,543
 6.8% 30.3%
On-site payroll (1) 146,637
 145,979
 658
 0.5% 22.5%
Utilities (2) 97,313
 98,572
 (1,259) (1.3%) 15.0%
Repairs and maintenance (3) 88,931
 89,152
 (221) (0.2%) 13.7%
Property management costs (4) 70,084
 70,858
 (774) (1.1%) 10.8%
Insurance 20,629
 19,257
 1,372
 7.1% 3.2%
Leasing and advertising 10,812
 11,798
 (986) (8.4%) 1.7%
Other on-site operating expenses (5) 18,192
 18,282
 (90) (0.5%) 2.8%
Same store operating expenses $649,914
 $638,671
 $11,243
 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 administrative costs such as office supplies, telephone and data charges, and association and business licensing fees.fees and ground lease costs.

The following table presents a reconciliation of operating income per the consolidated statements of operations to NOI for the 20092012 Same Store Properties.

   Year Ended December 31, 
   2009  2008 
   (Amounts in thousands) 

Operating income

  $529,390   $458,158  

Adjustments:

   

Non-same store operating results

   (77,481)   (43,201) 

Fee and asset management revenue

   (10,346)   (10,715) 

Fee and asset management expense

   7,519    7,981  

Depreciation

   582,280    559,468  

General and administrative

   38,994    44,951  

Impairment

   11,124    116,418  
         

Same store NOI

  $1,081,480   $1,133,060  
         

Properties:



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  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, 20092012 and expects to continue to own through December 31, 2010,2013 (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, 2010:

2013:

20102013 Same Store Assumptions

Physical occupancy

 94.3% 95.3%

Revenue change

 (3.0)%4.0% to (1.0)% 5.0%

Expense change

 1.0%2.5% to 2.0% 3.5%

NOI change

 (6.0)%4.5% to (2.0)% 6.0%

The Company anticipates no consolidated rental acquisitions outside of Archstone and consolidated rental dispositions of $4.0 billion and expects that acquisitions will have a 1.00% lower cap rate than dispositions for the full year ending December 31, 2013.
These 20102013 assumptions are based on current expectations and are forward-looking.

Non-same store operating results increased approximately $34.3$95.0 million or 79.4% and consist primarily of properties acquired in calendar years 20082011 and 2009,2012, as well as operations from the Company’s completed development properties and corporate housing business. Whileproperties. Although the operations of both the non-same store assets and the same store assets have been negativelypositively impacted during the year ended December 31, 2009 similar to the same store assets,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 20092012 than 2008.2011. This increase primarily resulted from:

▪Development and other miscellaneous properties in lease-up of $12.3 million;
▪
Properties acquired in 2011 and 2012 of $75.1 million; and
▪Newly stabilized development and other miscellaneous properties of $5.9 million.

Development and other miscellaneous properties in lease-up of $22.4 million;

Newly stabilized development and other miscellaneous properties of $1.6 million;

Properties acquired in 2008 and 2009 of $11.9 million; and

Partially offset by operating activities from other miscellaneous operations.

See also Note 2017 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 $0.1$0.2 million or 3.4% primarily due to an increase in revenueas a result of fees earned on management of the Company’s unconsolidated development joint ventures, partially offset by lower revenues earned on management of the Company's military housing ventures at Fort Lewis and McChord Air Force Base as well as a decrease in asset managementand higher expenses. As of December 31, 2009 and 2008, the Company managed 12,681 units and 14,485 units, respectively, primarily for unconsolidated entities and its military housing ventures at Fort Lewis and McChord.

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 decreased approximately $5.1 million or 6.7%. This decrease is primarily attributable to lower overall payroll-related costs as a result of a decrease inwere consistent between the number of properties in the Company’s portfolio, as well as

decreases in temporary help/contractors, telecommunications and travel expenses.

periods under comparison.

Depreciation expense from continuing operations, which includes depreciation on non-real estate assets, increased approximately $22.8$51.5 million or 4.1%8.4% primarily as a result of additional depreciation expense on properties acquired in 20082011 and 2009,2012, development properties placed in service and capital expenditures for all properties owned.

owned, partially offset by a decrease in the amortization of both in-place leases and furniture, fixtures and equipment that were fully depreciated.

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

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approximately $6.0$3.6 million or 13.3%8.4% primarily due to lower overallan increase in payroll-related costs, aswhich is largely a result of the acceleration of long-term compensation expense for retirement eligible employees, partially offset by a decrease in the number of properties in the Company’s portfolio, as well as a $2.9 million decrease in severance related costs in 2009 and a decrease in tax consulting costs.office rent. The Company anticipates that general and administrative expenses will approximate $38.0$55.0 million to $40.0$58.0 million for the year ending December 31, 2010.2013. The above assumption is based on current expectations and is forward-looking.

Impairment from continuing operations decreased approximately $105.3 million due to an $11.1 million impairment charge taken during 2009 on a land parcel held for development compared to a $116.4 million impairment charge taken in the fourth quarter of 2008 on land held for development related to five potential development projects that are no longer being pursued. See Note 19 in the Notes to Consolidated Financial Statements for further discussion.

Interest and other income from continuing operations decreasedincreased approximately $16.8$142.6 million or 50.2% primarily as a result of an $18.7due to the Company recognizing $150.0 million gain recognized during 2008in termination fees related to our pursuit of Archstone during the partial debt extinguishment of the Company’s notes compared to a $4.5 million gain recognized in 2009 (see Note 9). In addition,year ended December 31, 2012, partially offset by lower interest earned on cash and cash equivalents decreased due to a decreaselower overall cash invested 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 interest ratesLRO/Rainmaker (a revenue management system) and because the Company received less insurance/litigation settlement proceeds that all occurred during the year ended December 31, 2011 and forfeited deposits in 2009, partially offset by a $4.9 million gain ondid not reoccur during the sale of investment securities realized in 2009.year ended December 31, 2012. The Company anticipates that interest and other income will approximate $1.0$0.5 million to $3.0$1.5 million for the year ending December 31, 2010.2013. The above assumption is based on current expectations and is forward-looking.

Other expenses from continuing operations increased approximately $0.7$13.1 million or 12.6%91.4% primarily due to the settlement of a dispute with the owners of a land parcel, an increase in transactionthe 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 acquisition of two properties consisting of 566 units from unaffiliated parties, as well as expensingCompany's 2012 acquisitions and transaction costs associated withrelated to the Company’s acquisitionpursuit of allArchstone.
Interest expense from continuing operations, including amortization of its partners’ interests in five previously partially owned properties consisting of 1,587 units in 2009. This was partially offset by a decrease in pursuit cost write-offsdeferred financing costs, decreased approximately $2.0 million or 0.4% primarily as a result of lower interest expense on mortgage notes payable due to lower balances during the Company’s decisionyear ended December 31, 2012 as compared to significantly reduce its development activitiesthe same period in 2009.2011, 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. During the year ended December 31, 2012, the Company capitalized interest costs of approximately $22.5 million as compared to $9.1 million for the year ended December 31, 2011. This capitalization of interest primarily relates to consolidated projects under development. The effective interest cost on all indebtedness for the year ended December 31, 2012 was 5.37% as compared to 5.30% for the year ended December 31, 2011. The Company anticipates that other expensesinterest expense from continuing operations will approximate $9.0$477.3 million to $12.0$498.8 million (excluding debt extinguishment costs) for the year ending December 31, 2010.2013. The above assumption is based on current expectations and is forward-looking.

Income and other tax expense from continuing operations decreased approximately $0.2 million or 26.0% primarily due to decreases in all other taxes. The Company anticipates that income and other tax expense will approximate $1.5 million to $2.5 million for the year ending December 31, 2013. The above assumption is based on current expectations and is forward-looking.
Loss from investments in unconsolidated entities increased as a result of the start of operations at one of the Company's unconsolidated development joint ventures.
Net gain on sales of land parcels decreased approximately $4.2 million due to the gain on sale of a land parcel located in suburban Washington, D.C. during the year ended December 31, 2011 as compared to no land sales during the year ended December 31, 2012.
Discontinued operations, net decreased approximately $307.8 million or 35.1% between the periods under comparison. This decrease is primarily due to higher gains on sales from dispositions during the year ended December 31, 2011 compared to the same period in 2012. Properties sold in 2012 reflect operations for a partial period in 2012 in contrast to a full period in 2011. See Note 11 in the Notes to Consolidated Financial Statements for further discussion.
Comparison of the year ended December 31, 2011 to the year ended December 31, 2010
For the year ended December 31, 2011, the Company reported diluted earnings per share of $2.95 compared to $0.95 per share for the year ended December 31, 2010. The difference is primarily due to higher gains from property sales in 2011 vs. 2010, 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, partially offset by dilution as a result of the net impact of the Company's 2010 and 2011 acquisition and disposition activities.
For the year ended December 31, 2011, income from continuing operations increased approximately $160.9 million when compared to the year ended December 31, 2010. The increase in continuing operations is discussed below.
Revenues from the 2011 Same Store Properties increased $81.9 million primarily as a result of an increase in average rental rates charged to residents and an increase in occupancy. Expenses from the 2011 Same Store Properties increased $3.5 million primarily due to increases in property management costs, real estate taxes and utilities, partially offset by decreases in leasing and advertising costs and insurance. The following tables provide comparative same store results and statistics for the 2011 Same Store Properties:

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Table of Contents


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%  
  

(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 2011 Same Store Properties:

2011 vs. 2010
Same Store Operating Expenses
$ in thousands – 101,312 Same Store Apartment Units
           
  Actual
2011		 Actual
2010		 $
Change		 %
Change		 % of Actual
2011
Operating
Expenses
Real estate taxes $169,432
 $166,675
 $2,757
 1.7% 27.4%
On-site payroll (1) 144,346
 144,878
 (532) (0.4%) 23.4%
Utilities (2) 96,702
 95,083
 1,619
 1.7 % 15.7%
Repairs and maintenance (3) 89,549
 89,128
 421
 0.5 % 14.5%
Property management costs (4) 68,497
 65,219
 3,278
 5.0 % 11.1%
Insurance 19,394
 20,605
 (1,211) (5.9%) 3.1%
Leasing and advertising 11,515
 14,266
 (2,751) (19.3%) 1.9%
Other on-site operating expenses (5) 18,277
 18,356
 (79) (0.4%) 2.9%
Same store operating expenses $617,712
 $614,210
 $3,502
 0.6 % 100.0%

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

Non-same store operating results increased approximately $110.7 million and consist primarily of properties acquired in calendar years 2010 and 2011, as well as operations from the Company'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, the non-same store assets have contributed a greater percentage of total NOI to the Company's overall operating results primarily due to 2010 and 2011 acquisitions, increasing occupancy for properties in lease-up and a longer ownership period in 2011 than 2010. This increase primarily resulted from:

▪
Development and other miscellaneous properties in lease-up of $39.1 million;

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▪
Properties acquired in 2010 and 2011 of $53.1 million; and
▪
Newly stabilized development and other miscellaneous properties of $3.0 million.
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 $0.3 million or 6.0% primarily due to revenues earned on management of the Company's unconsolidated development joint ventures, an increase in 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 the unwinding of four institutional joint ventures during 2010.

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 increased approximately $2.0 million or 2.5%. This increase is primarily attributable to an increase in payroll-related costs, which is largely a result of the creation of the Company's central business group, which moved administrative functions off-site, and increases in legal and professional fees and education/conference expenses.

Depreciation expense from continuing operations, which includes depreciation on non-real estate assets, increased approximately $31.1 million or 5.4% primarily as a result of additional depreciation expense on properties acquired in 2011, 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.

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

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 $2.8 million or 55.6% 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 period 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 occurred during the year ended December 31, 2010 and did not reoccur during the year ended December 31, 2011.

Other expenses from continuing operations increased approximately $2.5 million or 21.2% primarily due to an increase in property acquisition costs incurred in conjunction with the Company's 2011 acquisitions as well as transaction costs related to the pursuit of Archstone.

Interest expense from continuing operations, including amortization of deferred financing costs, increased approximately $17.4$10.7 million or 3.5%2.3% primarily as a result of an increasea full year of interest expense on the $600.0 million of unsecured notes that closed in debt extinguishment costsJuly 2010 and interest expense on forward starting swaps terminated in conjunction with the issuance of $1.0 billion of unsecured notes, partially offset by lower capitalized interest.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. During the year ended December 31, 2009,2011, the Company capitalized interest costs of approximately $34.9$9.1 million as compared to $60.1$13.0 million for the year ended December 31, 2008.2010. This capitalization of interest primarily relates to consolidated projects under development. The effective interest cost on all indebtedness for the year ended December 31, 20092011 was 5.62%5.30% as compared to 5.56%5.14% for the year ended December 31, 2008. The Company anticipates that interest expense will approximate $466.0 million to $476.0 million for the year ending December 31, 2010. The above assumption is based on current expectations and is forward-looking.

Income and other tax expense from continuing operations decreased approximately $2.5 million or 46.9% primarily due to a change in the estimate for Texas state taxes and lower overall state income taxes, partially offset by an increase in business taxes for Washington, D.C. The Company anticipates that income and other tax expense will approximate $1.0 million to $2.0 million for the year ending December 31, 2010. The above assumption is based on current expectations and is forward-looking.

Loss from investments in unconsolidated entities increased approximately $2.7 million as compared to the year ended December 31, 2008 primarily due to the Company’s $1.8 million share of defeasance costs incurred in conjunction with the extinguishment of cross-collateralized mortgage debt on one of the Company’s partially owned unconsolidated joint ventures as well as a decline in the operating performance of these properties.

Net gain on sales of unconsolidated entities increased approximately $7.8 million as the Company sold seven unconsolidated properties in 2009 (inclusive of the one property where the Company acquired its partner’s interest) compared to three unconsolidated properties in 2008.

Net gain on sales of land parcels decreased approximately $3.0 million due to the sale of vacant land located in Florida during the year ended December 31, 2008 versus no land sales in 2009.

Discontinued operations, net decreased approximately $95.2 million or 21.2% between the periods under comparison. This decrease is primarily due to lower gains from property sales during the year ended December 31, 2009 compared to the same period in 2008 and the operations of those properties. In addition, properties sold in 2009 reflect operations for a partial period in 2009 in contrast to a full period in 2008. See Note 13 in the Notes to Consolidated Financial Statements for further discussion.

Comparison of the year ended December 31, 2008 to the year ended December 31, 2007

For the year ended December 31, 2008, loss from continuing operations increased approximately $33.9 million when compared to the year ended December 31, 2007. The decrease in continuing operations is discussed below.

Revenues from the 2008 Same Store Properties increased $53.8 million primarily as a result of higher rental rates charged to residents. Expenses from the 2008 Same Store Properties increased $13.5 million primarily due to higher real estate taxes, utility costs and payroll. The following tables provide comparative same store results and statistics for the 2008 Same Store Properties:

2008 vs. 2007

Same Store Results/Statistics

$ in thousands (except for Average Rental Rate) – 115,051 Same Store Units

   Results  Statistics 

Description

  Revenues  Expenses  NOI  Average
Rental
Rate (1)		  Occupancy  Turnover 

2008

  $1,739,004   $632,366   $1,106,638   $1,334   94.5%  63.5% 

2007

  $1,685,196   $618,882   $1,066,314   $1,292   94.6%  63.6% 
                       

Change

  $53,808   $13,484   $40,324   $42   (0.1)%  (0.1)% 
                       

Change

   3.2%   2.2%   3.8%   3.3%   

(1)Average rental rate is defined as total rental revenues divided by the weighted average occupied units for the period.

Non-same store operating results increased approximately $66.1 million or 79.8% and consist primarily of properties acquired in calendar years 2008 and 2007, as well as operations from completed development properties and our corporate housing business.

See also Note 20 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 $2.0 million primarily due to an increase in revenue earned on management of the Company’s military housing venture at Fort Lewis along with the addition of McChord Air Force Base, as well as a decrease in asset management expenses. As of December 31, 2008 and 2007, the Company managed 14,485 units and 14,472 units, respectively, primarily for unconsolidated entities and its military housing ventures at Fort Lewis and McChord.

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 decreased approximately $10.4 million or 11.9%. This decrease is primarily attributable to lower overall payroll-related costs as a result of a decrease in the number of properties in the Company’s portfolio, as well as a decrease in legal and professional fees.

Depreciation expense from continuing operations, which includes depreciation on non-real estate assets, increased approximately $28.3 million or 5.3% primarily as a result of additional depreciation expense on properties acquired in 2007 and 2008 and capital expenditures for all properties owned.

General and administrative expenses from continuing operations, which include corporate operating expenses, decreased approximately $1.8 million or 3.9% primarily as a result of a $2.2 million decrease in profit sharing expense and lower overall payroll-related costs, partially offset by an increase in legal and professional fees due to a $1.7

million expense recovery recorded for the year ended December 31, 2007 related to a certain lawsuit in Florida (see Note 21).

Impairment from continuing operations increased approximately $116.4 million due to an impairment charge taken in the fourth quarter of 2008 on land held for development related to five potential development projects that will no longer be pursued. See Note 19 in the Notes to Consolidated Financial Statements for further discussion.

Interest and other income from continuing operations increased approximately $13.5 million or 67.3% primarily as a result of an $18.7 million gain recognized during the year ended December 31, 2008 related to the partial debt extinguishment of the Company’s June 2009 and August 2026 public notes (see Note 9), as well as an increase in short-term investments. This was partially offset by a $7.3 million decrease in interest earned on 1031 exchange and earnest money deposits due primarily to the decline in the Company’s transaction activities.

Other expenses from continuing operations increased approximately $3.9 million primarily due to an increase in the write-off of various pursuit and out-of-pocket costs for terminated development transactions and halted condominium conversion properties during 2008 compared to the year ended December 31, 2007.

Interest expense from continuing operations, including amortization of deferred financing costs, decreased approximately $0.2 million as a result of lower overall effective interest rates and a reduction in debt extinguishment costs, offset by higher overall debt levels outstanding due to the Company’s 2007 share repurchase activity and its pre-funding of its 2008 and 2009 debt maturities. During the year ended December 31, 2008, the Company capitalized interest costs of approximately $60.1 million as compared to $45.1 million for the year ended December 31, 2007. This capitalization of interest primarily relates to consolidated projects under development. The effective interest cost on all indebtedness for the year ended December 31, 2008 was 5.56% as compared to 5.96% for the year ended December 31, 2007.


Income and other tax expense from continuing operations increased approximately $2.8$0.4 million primarily due to a changeTennessee and Texas franchise tax refunds received during the year ended December 31, 2010 that did not reoccur during the year ended December 31, 2011, partially offset by decreases in the estimate for Texas state taxes and an increase in franchiseall 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

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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.

Net gain on sales of land parcels increased approximately $0.4$5.6 million primarily due to the gain on sale of a land parcel located in suburban Washington, D.C. during the year ended December 31, 2011 and a loss on sale of a land parcel during the same period in 2010.

Discontinued operations, net increased approximately $478.3 million between the periods under comparison. This increase is primarily due to income received in 2007higher gains from the sale of the Company’s 7.075% ownership interest in Wellsford Park Highlands Corporation, an entity which owns a condominium development in Denver, Colorado.

Net gain onproperty sales of unconsolidated entities increased approximately $0.2 million primarily due to a $2.9 million gain on the sale of three unconsolidated institutional joint venture properties realized in 2008 compared to a gain of $2.6 million realized in 2007 on the sale of one property.

Net gain on sales of land parcels decreased approximately $3.4 million primarily as a result of higher net gains realized in 2007 on the sale of two land parcels compared to the net gain realized in 2008 on the sale of one land parcel.

Discontinued operations, net decreased approximately $577.1 million or 56.2% between the periods under comparison. This decrease is primarily due to a significant decrease in the number of properties sold during the year ended December 31, 20082011 compared to the same period in 2007, as well as the mix of2010, partially offset by properties sold in each year.2011 which reflect operations for none of or a partial period in 2011 in contrast to a full or partial period in 2010. See Note 1311 in the Notes to Consolidated Financial Statements for further discussion.


Liquidity and Capital Resources

For the Year Ended December 31, 20092012

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, 2009,2012, the Company had approximately $890.8$383.9 million of cash and cash equivalents, its restricted 1031 exchange proceeds totaled $53.7 millionand $1.29it had $1.22 billion available under its revolving credit facility (net of $130.0$31.8 million which was restricted/dedicated to support letters of credit and $75.0 million which had been committed by a now bankrupt financial institution and is not available for borrowing)credit). 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, 20092012 was approximately $193.3$612.6 million, its restricted 1031 exchange proceeds totaled $244.3$152.2 million and the amount available on the Company’sits revolving credit facility was $1.37$1.72 billion (net of $56.7$30.2 million which was restricted/dedicated to support letters of credit and net of the $75.0 million discussed above)credit). In 2008, the Company built a significant cash and cash equivalents balance as a direct result of its decision to pre-fund its 2008 and 2009 debt maturities with the closing of three secured mortgage loan pools totaling $1.6 billion. The decline in the Company’s cash and cash

equivalents balance since December 31, 2008 is a direct result of the application of the pre-funded cash on hand towards the Company’s debt maturity, tender and repurchase activities, partially offset by the closing of a $500.0 million secured mortgage loan pool during 2009. See Notes 8 through 10 in the Notes to Consolidated Financial Statements for further discussion.


During the year ended December 31, 2009,2012, the Company generated proceeds from various transactions, which included the following:

Disposed of 61 properties (including the Company’s buyout of its partner’s interest in one unconsolidated property) and 62 condominium units, receiving net proceeds of $893.6 million;


▪
Disposed of 35 consolidated properties, receiving net proceeds of approximately $1.0 billion;
▪Obtained $26.5 million in new mortgage financing;
▪
Issued approximately 26.7 million Common Shares (including Common Shares issued in a public equity offering in November/December 2012 and under the ATM program – see further discussion below) and received net proceeds of $1.4 billion, 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.

Obtained $540.0 million in new mortgage financing and terminated six treasury locks, receiving $10.8 million;


Obtained an additional $198.8 million of new mortgage loans on development properties;

Received $215.8 million from maturing or sold investment securities; and

Issued approximately 4.2 million Common Shares and received net proceeds of $100.6 million.

During the year ended December 31, 2009,2012, the above proceeds were primarily utilized to:

Invest $330.6 million primarily in development projects;


▪
Acquire nine rental properties and six land parcels for approximately $844.0 million;
▪Invest $180.4 million primarily in development projects;
▪
Repay $364.3 million of mortgage loans and $976.0 million of unsecured notes; and
▪Redeem its Series N Preferred Shares at its liquidation value of $150.0 million.

Acquire three rental properties (including

On November 28, 2012, EQR priced the Company’s buyoutissuance of its partner’s interest in one unconsolidated property) and a long-term leasehold interest in a land parcel, utilizing cash of $175.5 million;

Repurchase 47,45021,850,000 Common Shares utilizing cashat a price of $1.1 million (see Note 3);

Repurchase $652.1 million$54.75 per share for total consideration of fixed rate public notes;

Repay $122.2 millionapproximately $1.2 billion, after deducting underwriting commissions of fixed rate public notes at maturity;

Repurchase $75.8 million$35.9 million. Concurrent with the closing of fixed rate tax-exempt notes;

this transaction, ERPOP issued 21,850,000 OP Units to EQR.

Repay $956.8 million of mortgage loans; and

Acquire $77.8 million of investment securities.

In September 2009, the CompanyEQR announced the creationestablishment of an At-The-Market (“ATM”) share offering program which would allow the CompanyEQR to sell up to 17.0 million Common 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. The CompanyPer 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 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 the Company.EQR. Actual sales will depend on a variety of factors to be determined by the CompanyEQR from time to time, including (among others) market conditions, the trading price of the Company’sEQR's Common Shares and determinations of the appropriate sources of funding for the Company.EQR. During the year ended December 31, 2009, the Company2012, EQR issued approximately 3.53.2 million Common Shares at an average price of $60.59 per share for total consideration of approximately $192.3 million through the ATM program. During the year ended

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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. 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. Through February 15, 2013, EQR has cumulatively issued approximately 16.7 million Common Shares at an average price of $35.38$48.53 per share for total consideration of approximately $123.7$809.9 million. EQR has 6.0 million through the ATM share offering program. In addition, during the first quarter of 2010 through February 19, 2010, the Company has issued approximately 1.1 million Common Shares at an average price of $33.87 per share for total consideration of approximately $35.8 million. Cumulative to date, the Company has issued approximately 4.6 million Common Shares at an average price of $35.03 for total consideration of approximately $159.5 million. As of February 19, 2010, the Company had 12.4 million Common Shares remaining available for issuance under the ATM program.

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, the CompanyEQR may repurchase its Common Shares pursuant to its existing share repurchase program authorized by the Board of Trustees. The Company repurchased $1.1 million (47,450 shares at an average price per share of $23.69) of its Common Shares during the year ended December 31, 2009. As of December 31, 2009, the CompanyFebruary 15, 2013, EQR had authorization to repurchase an additional $466.5$464.6 million 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, 20092012 are as follows:

Debt Summary as of December 31, 20092012

(Amounts in thousands)

   Amounts (1)  % of Total  Weighted
Average
Rates (1)		  Weighted
Average
Maturities
(years)

Secured

  $4,783,446  50.9%  4.89%  8.9

Unsecured

   4,609,124  49.1%  5.31%  4.9
             

Total

  $9,392,570  100.0%  5.11%  6.9
             

Fixed Rate Debt:

      

Secured – Conventional

  $3,773,008  40.2%  5.89%  7.6

Unsecured – Public/Private

   3,771,700  40.1%  5.93%  5.4
             

Fixed Rate Debt

   7,544,708  80.3%  5.91%  6.5
             

Floating Rate Debt:

      

Secured – Conventional

   382,939  4.0%  2.18%  4.2

Secured – Tax Exempt

   627,499  6.7%  0.65%  20.5

Unsecured – Public/Private

   801,824  8.6%  1.37%  1.7

Unsecured – Tax Exempt

   35,600  0.4%  0.37%  19.0

Unsecured – Revolving Credit Facility

   —    —     —     2.2
             

Floating Rate Debt

   1,847,862  19.7%  1.28%  8.7
             

Total

  $9,392,570  100.0%  5.11%  6.9
             


  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, 2009.2012.


Note: The Company capitalized interest of approximately $34.9$22.5 million and $60.1$9.1 million during the years ended December 31, 20092012 and 2008,2011, respectively.












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Debt Maturity Schedule as of December 31, 20092012

(Amounts in thousands)

Year

  Fixed
Rate (1)		  Floating
Rate (1)		  Total  % of Total  Weighted Average
Rates on Fixed
Rate Debt (1)		  Weighted Average
Rates on
Total Debt (1)		 

2010

  $34,123   $568,310 (2)  $602,433  6.4%  7.61%  1.36% 

2011

   1,066,274 (3)   261,805    1,328,079  14.1%  5.52%  4.83% 

2012

   739,469    3,362    742,831  7.9%  5.48%  5.48% 

2013

   266,347    301,824    568,171  6.1%  6.76%  4.89% 

2014

   517,443    —      517,443  5.5%  5.28%  5.28% 

2015

   355,632    —      355,632  3.8%  6.41%  6.41% 

2016

   1,089,236    39,999    1,129,235  12.0%  5.32%  5.25% 

2017

   1,346,553    456    1,347,009  14.3%  5.87%  5.87% 

2018

   336,086    44,677    380,763  4.1%  5.95%  5.57% 

2019

   502,244    20,766    523,010  5.6%  5.19%  5.01% 

2020+

   1,291,301    606,663    1,897,964  20.2%  6.11%  5.07% 
                      

Total

  $7,544,708   $1,847,862   $9,392,570  100.0%  5.85%  5.03% 
                      

  
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  
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%
2016 1,190,538
 —
 1,190,538
 14.0% 5.34% 5.34%
2017 1,446,120
 456
 1,446,576
 17.0% 5.95% 5.95%
2018 81,450
 724
 82,174
 1.0% 5.70% 5.70%
2019 802,640
 20,766
 823,406
 9.6% 5.49% 5.36%
2020 1,672,482
 809
 1,673,291
 19.6% 5.50% 5.50%
2021 1,188,905
 856
 1,189,761
 13.9% 4.64% 4.64%
2022 2,401
 905
 3,306
 —
 5.81% 5.74%
2023+ 231,464
 337,699
 569,163
 6.7% 6.76% 3.29%
Premium/(Discount) 24,234
 (3,650) 20,584
 0.2% N/A
 N/A
             
Total $7,846,625
 $682,619
 $8,529,244
 100.0% 5.54% 5.25%

(1)
Net of the effect of any derivative instruments. Weighted average rates are as of December 31, 2009.2012.
(2)Includes the Company’s $500.0 million floating rate term loan facility, which matures on October 5, 2010, subject to two one-year extension options exercisable by the Company.
(3)Includes $482.5 million face value of 3.85% convertible unsecured debt with a final maturity of 2026. The notes are callable by the Company on or after August 18, 2011. The notes are putable by the holders on August 18, 2011, August 15, 2016 and August 15, 2021.

The following table provides a summary of the Company’s unsecured debt as of December 31, 2009:

2012:


Unsecured Debt Summary as of December 31, 20092012

(Amounts in thousands)

   Coupon
Rate		  Due
Date		  Face
Amount		  Unamortized
Premium/
(Discount)		  Net
Balance		 

Fixed Rate Notes:

      
  6.950%  03/02/11 (1)  $93,096   $990   $94,086  
  6.625%  03/15/12 (2)   253,858    (412)   253,446  
  5.500%  10/01/12 (3)   222,133    (602)   221,531  
  5.200%  04/01/13 (4)   400,000    (385)   399,615  
  5.250%  09/15/14    500,000    (289)   499,711  
  6.584%  04/13/15    300,000    (590)   299,410  
  5.125%  03/15/16    500,000    (332)   499,668  
  5.375%  08/01/16    400,000    (1,221)   398,779  
  5.750%  06/15/17    650,000    (3,815)   646,185  
  7.125%  10/15/17    150,000    (505)   149,495  
  7.570%  08/15/26    140,000    —      140,000  
  3.850%  08/15/26 (5)   482,545    (12,771)   469,774  

Fair Value Derivative Adjustments

        (4)   (300,000)   —      (300,000) 
               
     3,791,632    (19,932)   3,771,700  
               

Floating Rate Tax Exempt Notes:

      
  7-Day SIFMA   12/15/28 (6)   35,600    —      35,600  
               

Floating Rate Notes:

      
   04/01/13 (4)   300,000    —      300,000  

Fair Value Derivative Adjustments

        (4)   1,824    —      1,824  

Term Loan Facility

  LIBOR+0.50%   10/05/10 (6)(7)   500,000    —      500,000  
               
     801,824    —      801,824  

Revolving Credit Facility:

  LIBOR+0.50%   02/28/12 (8)   —      —      —    
               

Total Unsecured Debt

    $4,629,056   $(19,932)  $4,609,124  
               

Note: SIFMA stands for the Securities Industry and Financial Markets Association and is the tax-exempt index equivalent of LIBOR.


  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
Fair Value Derivative Adjustments       (1)(300,000) —
 (300,000)
  5.250% 09/15/14 500,000
 (105) 499,895
  6.584% 04/13/15 300,000
 (248) 299,752
  5.125% 03/15/16 500,000
 (170) 499,830
  5.375% 08/01/16 400,000
 (665) 399,335
  5.750% 06/15/17 650,000
 (2,289) 647,711
  7.125% 10/15/17 150,000
 (311) 149,689
  4.750% 07/15/20 600,000
 (3,433) 596,567
  4.625% 12/15/21 1,000,000
 (3,397) 996,603
  7.570% 08/15/26 140,000
 —
 140,000
      4,340,000
 (10,648) 4,329,352
Floating Rate Notes:          
    04/01/13(1)300,000
 —
 300,000
Fair Value Derivative Adjustments       (1)1,523
 —
 1,523
      301,523
 —
 301,523
Revolving Credit Facility: LIBOR+1.15% 7/13/2014(2)(3) —
 —
 —
Total Unsecured Debt     $4,641,523
 $(10,648) $4,630,875

(1)On January 27, 2009, the Company repurchased $185.2 million of these notes at par pursuant to a cash tender offer announced on January 16, 2009. On December 10, 2009, the Company repurchased $21.7 million of these notes at a price of 106% of par pursuant to a cash tender offer announced on December 2, 2009.
(2)On December 10, 2009, the Company repurchased $146.1 million of these notes at a price of 108% of par pursuant to a cash tender offer announced on December 2, 2009.
(3)On December 10, 2009, the Company repurchased $127.9 million of these notes at a price of 107% of par pursuant to a cash tender offer announced on December 2, 2009.
(4)$300.0 million in fairFair value interest rate swaps converts a portionconvert $300.0 million of the 5.200% notes due April 1, 2013 to a floating interest rate.
(5)Convertible notes mature on August 15, 2026. The notes are callable by the Company on or after August 18, 2011. The notes are putable by the holders on August 18, 2011, August 15, 2016 and August 15, 2021. During the quarter ended March 31, 2009, the Company repurchased $17.5 million of these notes at a price of 88.4% of par. On December 31, 2009, the Company repurchased $48.5 million of these notes at par pursuant to a cash tender offer announced on December 2, 2009. Effective January 1, 2009, companies are required to expense the implied option value inherent in convertible debt. In conjunction with this requirement, the Company recorded an adjustment of $17.3 million to the beginning balance of the discount on its convertible notes.
(6)(2)Notes areFacility is private. All other unsecured debt is public.
(7)Represents the Company’s $500.0 million term loan facility, which matures on October 5, 2010, subject to two one-year extension options exercisable by the Company.
(8)(3)As of December 31, 2009,2012, there was no amount outstanding and approximately $1.37$1.72 billion available on the Company’sCompany'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


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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. As of February 25, 2010, anJanuary 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 amount of equity and debt securities remains available for issuance by the Operating PartnershipEQR and ERPOP under a universal shelf registration statement that automatically became automatically effective upon filing with the SEC in December 2008 (under SEC regulations enacted in 2005, the registration statement automaticallyOctober 2010 and expires on December 21, 2011 and does not contain a maximum issuance amount). AsOctober 15, 2013. However, as of February 25, 2010, an unlimited amount15, 2013, issuances under the ATM share offering program are limited to 6.0 million additional shares. Per the terms of ERPOP's partnership agreement, EQR contributes the net proceeds of all equity securities remains availableofferings to the capital of ERPOP in exchange for issuance by the Company underadditional OP Units (on a registration statement the SEC declared effective in December 2008 (under SEC regulations enacted in 2005, the registration statement automatically expires on December 15, 2011 and does not containone-for-one Common Share per OP Unit basis) or preference units (on a maximum issuance amount)one-for-one preferred share per preference unit basis).

The Company’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 20092012 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;Exchange and (ii) the “Common Share Equivalent” of all convertible preferred shares; and (iii) the liquidation value of all perpetual preferred shares outstanding.


Equity Residential
Capital Structure as of December 31, 20092012

(Amounts in thousands except for share/unit and per share amounts)

Secured Debt

     $4,783,446  50.9%  

Unsecured Debt

      4,609,124  49.1%  
            

Total Debt

      9,392,570  100.0%  48.1% 

Common Shares (includes Restricted Shares)

   279,959,048  95.2%     

Units

   14,197,969  4.8%     
            

Total Shares and Units

   294,157,017  100.0%     

Common Share Equivalents (see below)

   398,038      
          

Total outstanding at quarter-end

   294,555,055      

Common Share Price at December 31, 2009

  $33.78      
          
      9,950,070  98.0%  

Perpetual Preferred Equity (see below)

      200,000  2.0%  
            

Total Equity

      10,150,070  100.0%  51.9% 

Total Market Capitalization

     $19,542,640   100.0% 

Secured Debt  
  
 $3,898,369
 45.7%  
Unsecured Debt  
  
 4,630,875
 54.3%  
Total Debt  
  
 8,529,244
 100.0% 30.7%
Common Shares (includes Restricted Shares) 325,054,654
 95.9%  
  
  
Units (includes OP Units and LTIP Units) 13,968,758
 4.1%  
  
  
Total Shares and Units 339,023,412
 100.0%  
  
  
Common Share Price at December 31, 2012 $56.67
    
  
  
   
  
 19,212,457
 99.7%  
Perpetual Preferred Equity (see below)  
  
 50,000
 0.3%  
Total Equity  
  
 19,262,457
 100.0% 69.3%
Total Market Capitalization  
  
 $27,791,701
   100.0%

Equity Residential
ConvertiblePerpetual Preferred Equity as of December 31, 20092012

(Amounts in thousands except for share and per share amounts)

Series

 Redemption
Date		 Outstanding
Shares		 Liquidation
Value		 Annual
Dividend
Per Share		 Annual
Dividend
Amount		 Weighted
Average
Rate		  Conversion
Ratio		 Common
Share
Equivalents

Preferred Shares:

        

7.00% Series E

 11/1/98 328,466 $8,212 $1.75 $575  1.1128 365,517

7.00% Series H

 6/30/98 22,459  561  1.75  39  1.4480 32,521
              

Total Convertible Preferred Equity

  350,925 $8,773  $614 7.00%   398,038

Perpetual

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 EquityShares 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's “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 20092012

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's Common Shares on the New York Stock Exchange and (ii) the liquidation value of all perpetual preference units outstanding.







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ERP Operating Limited Partnership
Capital Structure as of December 31, 2012
(Amounts in thousands except for shareunit and per shareunit amounts)
Secured Debt  
   $3,898,369
 45.7%  
Unsecured Debt  
   4,630,875
 54.3%  
Total Debt  
   8,529,244
 100.0% 30.7%
Total outstanding Units 339,023,412
    
  
  
Common Share Price at December 31, 2012 $56.67
    
  
  
   
   19,212,457
 99.7%  
Perpetual Preference Units (see below)  
   50,000
 0.3%  
Total Equity  
   19,262,457
 100.0% 69.3%
Total Market Capitalization  
   $27,791,701
   100.0%

ERP Operating Limited Partnership
Perpetual Preference Units as of

Series

  Redemption
Date		  Outstanding
Shares		  Liquidation
Value		  Annual
Dividend
Per Share		  Annual
Dividend
Amount		  Weighted
Average
Rate		 

Preferred Shares:

            

8.29% Series K

  12/10/26  1,000,000  $50,000  $4.145  $4,145  

6.48% Series N

  6/19/08  600,000   150,000   16.20   9,720  
                 

Total Perpetual Preferred Equity

    1,600,000  $200,000    $13,865  6.93% 

December 31, 2012

(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 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.
The Company generally expects to meet its short-term liquidity requirements, including capital expenditures related to maintaining its existing properties and certain scheduled unsecured note and mortgage note repayments, through its working capital, net cash provided by operating activities and borrowings under itsthe Company's revolving credit facility. 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 Company announced a new 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. The Company intends to pay an annual cash dividend equal to approximately 65% of Normalized FFO for the year. During the year ended December 31, 2012, the Company paid $0.3375 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. 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 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’sCompany's financial condition may be adversely affected and it may not be able to maintain its current distribution levels. The Company reduced its quarterly common share dividend beginning with the dividend for the third quarter of 2009, from $0.4825 per share (an annual rate of $1.93 per share) to $0.3375 per share (an annual rate of $1.35 per share). The Company believes that its expected 20102013 operating cash flow iswill be sufficient to cover capital expenditures and distributions.

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

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disposition of certain properties as well asand joint ventures. 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 $18.5$21.0 billion in investment in real estate on the Company’s balance sheet at December 31, 2009, $11.22012, $15.1 billion or 60.9%,71.6% 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.

As of the date of this filing, the Operating Partnership’s senior debt

ERPOP's credit ratings from Standard & PoorsPoor’s (“S&P”), Moody’s and Fitch for its outstanding senior debt are BBB+, Baal and A-BBB+, respectively. As of the date of this filing, the Company’s preferredEQR's equity ratings from S&P, Moody’s and Fitch for its outstanding preferred equity are BBB-BBB+, Baa2 and BBB,BBB-, respectively. DuringFollowing the third quarterannouncement of 2009, Moody’s andthe Archstone transaction in November 2012, Fitch placed bothEQR's and ERPOP's ratings on negative watch.
In July 2011, the Company and the Operating Partnership on negative outlook.

The Operating Partnership has a $1.5 billion long-termreplaced 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 asby $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 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. As of February 19, 201015, 2013, there was available borrowings of $1.36$2.47 billion (net of $65.2$30.2 million which was restricted/dedicated to support letters of credit) on the new revolving credit and net of a $75.0 million commitment from a now bankrupt financial institution) that matures in February 2012 (See Note 10 in the Notes to Consolidated Financial Statements for further discussion).facility. 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. As

In 2010, a portion of February 19,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, $180.0the Company received approximately $4.0 million was outstanding underin 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 facility.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 expects to repay essentially alldoes 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 outstanding balance under the line as dispositions close and restricted 1031 proceeds are released from escrow.

amounts referenced above impact same store results.

See Note 2118 in the Notes to Consolidated Financial Statements for discussion of the events which occurred subsequent to December 31, 2009.

2012.

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:

flooring such as carpets, hardwood, vinyl linoleum or tile;

appliances;

mechanical equipment such as individual furnace/air units, hot water heaters, etc;

furniture and fixtures such as kitchen/bath cabinets, light fixtures, ceiling fans, sinks, tubs, toilets, mirrors, countertops, etc; and

blinds/shades.

blinds.


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All replacements are depreciated over a five-yearfive 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 ten-yearfifteen-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, 2009,2012, our actual improvements to real estate totaled approximately $123.9 million.$152.8 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, 20092012

   Total
Units (1)		  Replacements (2)  Avg.
Per Unit		  Building
Improvements		  Avg.
Per Unit		  Total  Avg.
Per Unit

Same Store Properties (3)

  113,598  $69,808  $614  $44,611  $393  $114,419  $1,007

Non-Same Store Properties (4)

  10,728   2,361   240   3,675   374   6,036   614

Other (5)

  —     2,130     1,352     3,482  
                     

Total

  124,326  $74,299    $49,638    $123,937  
                     

  
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
Non-Same Store Properties (4) 11,754
 7,599
 706
 21,788
 2,026
 29,387
 2,732
Other (5) —
 1,723
  
 1,131
  
 2,854
  
Total 110,331
 $74,812
  
 $78,016
  
 $152,828
  

(1)Total Apartment Units – Excludes 8,086 unconsolidated units and 4,5955,039 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 – ForIncludes new expenditures inside the apartment units such as appliances, mechanical equipment, fixtures and flooring, including carpeting. Replacements for same store properties includes $28.0also include $33.0 million spent in 2012 on various assets related toapartment unit renovations/rehabs (primarily kitchens and baths) on 4,427 apartment units (equating to about $7,500 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, 2008,2011, less properties subsequently sold.
(4)Non-Same Store Properties – Primarily includes all properties acquired during 20082011 and 2009,2012, plus any properties in lease-up and not stabilized as of January 1, 2008.2011. Per apartment unit amounts are based on a weighted average of 9,82310,754 apartment units.
(5)Other – Primarily includes expenditures for properties sold during the period.

For the year ended December 31, 2008,2011, our actual improvements to real estate totaled approximately $169.8$144.5 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, 20082011

   Total
Units (1)		  Replacements  Avg.
Per Unit		  Building
Improvements		  Avg.
Per Unit		  Total  Avg.
Per Unit

Established Properties (2)

  105,607  $38,003  $360  $53,195  $504  $91,198  $864

New Acquisition Properties (3)

  20,665   5,409   285   18,243   961   23,652   1,246

Other (4)

  6,487   43,497     11,491     54,988  
                     

Total

  132,759  $86,909    $82,929    $169,838  
                     

  
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
Non-Same Store Properties (4) 15,761
 7,505
 658
 13,827
 1,211
 21,332
 1,869
Other (5) —
 2,147
  
 362
  
 2,509
  
Total 117,073
 $80,589
  
 $63,863
  
 $144,452
  

(1)Total Apartment Units – Excludes 9,776 unconsolidated units and 4,7094,901 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)EstablishedReplacements – 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 million spent in 2011 on apartment unit renovations/

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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 – Wholly Owned PropertiesPrimarily includes all properties acquired or completed and stabilized prior to January 1, 2006.2010, less properties subsequently sold.
(3)New Acquisition
(4)Non-Same Store Properties – Wholly Owned PropertiesPrimarily includes all properties acquired during 2006, 20072010 and 2008.2011, plus any properties in lease-up and not stabilized as of January 1, 2010. Per apartment unit amounts are based on a weighted average of 18,98311,414 apartment units.
(4)
(5)Other – IncludesPrimarily includes expenditures for properties either partially owned or sold during the period, commercial space, corporate housing and condominium conversions. Also includes $34.2 million included in replacements spent on various assets related to major renovations and repositioning of these assets.period.

The Company incurred less in capital expenditures in 2009 primarily due to continued efforts to limit the scope of projects and greater cost controls on vendors.

For 2010,2013, the Company estimates that it will spend approximately $1,075$1,500 per apartment unit of capital expenditures for the approximately 80,000 apartment units that the Company expects to have in its annual same store propertiesset after the completion of its planned 2013 dispositions, inclusive of apartment unit renovation/rehab costs, or $825$1,150 per apartment unit excluding apartment unit renovation/rehab costs. For 2013, the Company estimates that it will spend $40.8 million rehabbing 5,000 apartment units (equating to about $8,150 per apartment unit rehabbed). The above assumptions are based on current expectations and are forward-looking.

During the year ended December 31, 2009,2012, 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 $2.0$8.8 million. The Company expects to fund approximately $1.6$4.2 million in total additions to non-real estate property in 2010.2013. The above assumption is based on current expectations and is forward-looking.

Improvements to real estate and additions to non-real estate property 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 limitmanage 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.

See Note 119 in the Notes to Consolidated Financial Statements for additional discussion of derivative instruments at December 31, 2009.

2012.

Other

Total distributions paid in January 20102013 amounted to $100.7$260.2 million (excluding distributions on Partially Owned Properties), which included certain distributions declared during the fourth quarter ended December 31, 2009.

2012.


Off-Balance Sheet Arrangements and Contractual Obligations


The Company admitted an 80% institutional partner to two separate entities/transactions (one in December 2010 and the other in August 2011), each owning a developable land parcel, in exchange for $40.1 million in cash and retained a 20% equity interest in both of these entities. These land parcels are now unconsolidated. 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. While the Company is the managing member of both of the joint ventures, is responsible for constructing both of the projects and has co-investedgiven certain construction cost overrun guarantees, all major decisions are made jointly, the large majority of funding is provided by the partner and the partner has significant involvement in various properties that are unconsolidated and accounted for underoversight of the equity methodongoing 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 accounting. Managementthe properties. However, management does not believe that these investments have a materially different impact upon the Company’sCompany's liquidity, cash flows, capital resources, credit or market risk than its property management and ownershipother consolidated development activities. During 2000 and 2001, the Company entered into institutional ventures with an unaffiliated partner. At the respective closing dates, the Company sold and/or contributed 45 properties containing 10,846 units to these ventures and retained a 25% ownership interest in the ventures. The Company’s joint venture partner contributed cash equal to 75%
As of the agreed-upon equity value of the properties comprising the ventures, which was then distributed to the Company. The Company’s strategy with respect to these ventures was to reduce its concentration of properties in a variety of markets. The Company sold seven properties consisting of 1,684 units (including one property containing 250 units which was acquired by the Company), three properties consisting of 670 units and one property consisting of 400 units during the years ended December 31, 2009, 2008 and 2007, respectively. The Company and its joint venture partner currently intend to wind up these investments over the next few years by selling the related assets, which may involve refinancing the assets as a majority of the debt encumbering them matures in 2010 and early 2011. The Company cannot estimate what, if any, profit it will receive from these dispositions or if the Company will in fact receive its equity back.

As of December 31, 2009,2012, the Company has foursix consolidated projects (including 400 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 1,700945 apartment units in various stages of development with estimated completion dates ranging through June 30, 2011.2015, as well as other completed 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 1816 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, 2009:

Payments Due by Year (in thousands)

Contractual Obligations

 2010 2011 2012 2013 2014 Thereafter Total

Debt:

       

Principal (a)

 $602,433 $1,328,079 $742,831 $568,171 $517,443 $5,633,613 $9,392,570

Interest (b)

  473,872  434,333  381,128  342,044  321,272  1,398,538  3,351,187

Operating Leases:

       

Minimum Rent Payments (c)

  6,520  4,661  2,468  2,194  1,824  306,365  324,032

Other Long-Term Liabilities:

       

Deferred Compensation (d)

  1,457  2,070  2,070  1,472  1,664  9,841  18,574
                     

Total

 $  1,084,282 $  1,769,143 $  1,128,497 $  913,881 $  842,203 $  7,348,357 $  13,086,363
                     

2012:

Payments Due by Year (in thousands)
Contractual Obligations 2013 2014 2015 2016 2017 Thereafter Total
Debt:  
  
  
  
  
  
  
Principal (a) $526,310
 $586,323
 $417,812
 $1,190,538
 $1,446,576
 $4,361,685
 $8,529,244
Interest (b) 432,884
 409,840
 371,992
 322,266
 246,237
 751,660
 2,534,879
Operating Leases:  
  
  
  
  
  
  
Minimum Rent Payments (c) 7,462
 8,862
 9,501
 9,462
 9,415
 691,304
 736,006
Other Long-Term Liabilities:  
  
  
  
  
  
  
Deferred Compensation (d) 1,179
 1,691
 1,691
 1,691
 1,692
 6,529
 14,473
Total $967,835
 $1,006,716
 $800,996
 $1,523,957
 $1,703,920
 $5,811,178
 $11,814,602

(a)Amounts include aggregate principal payments only and includes in 2010 a $500.0 million term loan that the Company has the right to extend to 2012.only.
(b)
Amounts include interest expected to be incurred on the Company’s secured and unsecured debt based on obligations outstanding at December 31, 20092012 and inclusive of capitalized interest. For floating rate debt, the current rate in effect for the most recent payment through December 31, 20092012 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 fourfive properties/parcels.
(d)Estimated payments to the Company’sCompany's Chairman, Vice Chairman and two former CEO’s 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, 20092012 and are consistent with the year ended December 31, 2008, except with respect to noncontrolling interests and convertible debt as further described in Note 2.

2011.

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 permanent 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 10-year15-year estimated useful life and both the furniture, fixtures and equipment and replacements components over a 5-year to 10-year estimated useful life, all of which are judgmental determinations.

Cost Capitalization

See theCapitalization 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 all of their time on the supervision of major capital and/or renovation projects. These costs are reflected on the balance sheet as an increase 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 all of 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 sheet 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, 2011 and 2010, the Company capitalized $14.3 million, $11.6 million and $10.7 million, respectively, of payroll and associated costs of employees directly responsible for and who spend their time on the 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.


Funds From Operations

and Normalized Funds From Operations

For the year ended December 31, 2009,2012, Funds From Operations (“FFO”) available to Common Shares and Units decreased $2.9/ Units and Normalized FFO available to Common Shares and Units / Units increased $241.1 million, or 0.5%32.0%, and $123.6 million, or 16.3%, respectively, as compared to the year ended December 31, 2011. For the year ended December 31, 2011, FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units increased $129.4 million, or 20.8%, and $77.2 million, or 11.3%, respectively, as compared to the year ended December 31, 2008. For the year ended December 31, 2008, FFO available to Common Shares and Units decreased $95.0 million, or 13.3%, as compared to the year ended December 31, 2007.

2010.

The following is athe 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, 2009:

2012Funds From Operations:

(Amounts in thousands)

   Year Ended December 31, 
   2009 (3)  2008 (3)  2007 (3)  2006 (3)  2005 

Net income

  $382,029   $436,413   $1,047,356   $1,147,617   $931,246  

Adjustments:

      

Net (income) loss attributable to Noncontrolling Interests:

      

Preference Interests and Units

   (9)   (15)   (441)   (2,002)   (7,606) 

Partially Owned Properties

   558    (2,650)   (2,200)   (3,132)   801  

Premium on redemption of Preference Interests

   —      —      —      (684)   (4,134) 

Depreciation

   582,280    559,468    531,178    451,719    336,364  

Depreciation – Non-real estate additions

   (7,355)   (8,269)   (8,279)   (7,840)   (5,541) 

Depreciation – Partially Owned and Unconsolidated Properties

   759    4,157    4,379    4,338    2,487  

Net (gain) on sales of unconsolidated entities

   (10,689)   (2,876)   (2,629)   (370)   (1,330) 

Discontinued operations:

      

Depreciation

   18,095    43,440    85,236    140,798    192,383  

Net (gain) on sales of discontinued operations

   (335,299)   (392,857)   (933,013)   (1,025,803)   (706,405) 

Net incremental (loss) gain on sales of condominium units

   (385)   (3,932)   20,771    48,961    100,361  
                     

FFO (1) (2)

   629,984    632,879    742,358    753,602    838,626  

Preferred distributions

   (14,479)   (14,507)   (22,792)   (37,113)   (49,642) 

Premium on redemption of Preferred Shares

   —      —      (6,154)   (3,965)   (4,359) 
                     

FFO available to Common Shares and Units (1) (2)

  $615,505   $618,372   $713,412   $712,524   $784,625  
                     



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Funds From Operations and Normalized Funds From Operations
(Amounts in thousands)
   
  Year Ended December 31,
  2012 2011 2010 2009 2008
Net income$881,204
 $935,197
 $295,983
 $382,029
 $436,413
Net (income) attributable to Noncontrolling Interests:         
Preference Interests and Units—
 —
 —
 (9) (15)
Partially Owned Properties(844) (832) 726
 558
 (2,650)
Preferred/preference distributions(10,355) (13,865) (14,368) (14,479) (14,507)
Premium on redemption of Preferred Shares/Preference Units(5,152) —
 —
 —
 —
Net income available to Common Shares and Units / Units864,853
 920,500
 282,341
 368,099
 419,241
Adjustments:         
    Depreciation664,082
 612,579
 581,469
 491,935
 470,657
Depreciation – Non-real estate additions(5,346) (5,519) (6,566) (7,122) (8,034)
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)
Discontinued operations:         
    Depreciation20,910
 50,949
 91,712
 108,207
 132,016
    Net (gain) on sales of discontinued operations(548,278) (826,489) (297,956) (335,299) (392,857)
Net incremental (loss) gain on sales of condominium units(11) 1,993
 1,506
 (385) (3,932)
Gain on sale of Equity Corporate Housing (ECH)200
 1,202
 —
 —
 —
FFO available to Common Shares and Units / Units (1) (3) (4)993,217
 752,153
 622,786
 615,505
 618,372
Adjustments:         
    Asset impairment and valuation allowances—
 —
 45,380
 11,124
 116,418
Property acquisition costs and write-off of pursuit costs (other expenses)21,649
 14,557
 11,928
 6,488
 5,760
Debt extinguishment (gains) losses, including prepayment penalties, preferred share/         
    preference unit redemptions and non-cash convertible debt discounts16,293
 12,300
 8,594
 34,333
 (2,784)
(Gains) losses on sales of non-operating assets, net of income and other tax expense         
    (benefit)(255) (6,976) (80) (5,737) (979)
    Other miscellaneous non-comparable items(147,635) (12,369) (6,186) (171) (1,725)
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)$883,269
 $759,665
 $682,422
 $661,542
 $735,062
           
FFO (1) (3)$1,008,724
 $766,018
 $637,154
 $629,984
 $632,879
Preferred/preference distributions(10,355) (13,865) (14,368) (14,479) (14,507)
Premium on redemption of Preferred Shares/Preference Units(5,152) —
 —
 —
 —
FFO available to Common Shares and Units / Units (1) (3) (4)$993,217
 $752,153
 $622,786
 $615,505
 $618,372
           
Normalized FFO (2) (3)$893,624
 $773,530
 $696,790
 $676,021
 $749,569
Preferred/preference distributions(10,355) (13,865) (14,368) (14,479) (14,507)
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)$883,269
 $759,665
 $682,422
 $661,542
 $735,062

(1)

(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 property,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. FFO available

(2) Normalized funds from operations (“Normalized FFO”) begins with FFO and excludes:
▪the impact of any expenses relating to Common Sharesnon-operating asset impairment and Units is calculated on a basis consistent with net income available to Common Shares and

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

valuation allowances;
(2)
▪property acquisition and other transaction costs related to mergers and acquisitions and pursuit cost write-offs (other expenses);
▪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 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, and 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 measuresa measure of liquidity. The Company’s calculation of FFO, and 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.

(3)Effective January 1, 2009, companies are required to retrospectively expense certain implied costs of the option value related to convertible debt. As a result, net income, FFO and
(4)FFO available to Common Shares and Units have all been reduced by approximately $10.6 million, $13.3 million, $10.1 million/ Units and $3.6 millionNormalized 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 years ended December 31, 2009, 2008, 2007United States. The equity positions of various individuals and 2006, respectively.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


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 SIFMASecurities Industry and Financial Markets Association ("SIFMA") index for tax-exempt debt. TheIf the Archstone transaction is consummated, the Company does notwill have any direct foreign exchange or other significant market risk.

exposure related to interests in German residential real estate.

The Company’s exposure to market risk for changes in interest rates relates primarily to the unsecured revolving and term creditloan facilities 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 as it did at December 31, 2008, 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 limitmanage 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 119 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 notes were approximately $4.6$4.3 billion and $4.7$5.2 billion, respectively, at December 31, 2009.

2012.

At December 31, 2009,2012, the Company had total outstanding floating rate debt of approximately $1.8$0.7 billion, or 19.7%8.0% 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 1314 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 $2.4$0.9 million. If market rates of interest on all of the floating rate debt permanently decreased by 1314 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 $2.4$0.9 million.

At December 31, 2009,2012, the Company had total outstanding fixed rate debt of approximately $7.5$7.8 billion, or 80.3%92.0% of total debt, net of the effects of any derivative instruments. If market rates of interest permanently increased by 5956 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 $6.9$7.1 billion. If market rates of interest permanently decreased by 5956 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 $8.4$8.7 billion.

At December 31, 2009,2012, the Company’s derivative instruments had a net assetliability fair value of approximately $25.2$42.5 million. If market rates of interest permanently increased by 204 basis points (a 10% increase from the Company’s existing weighted average interest rates), the net assetliability fair value of the Company’s derivative instruments would be approximately $35.5$40.9 million. If market rates of interest permanently decreased by 204 basis points (a 10% decrease from the Company’s existing weighted average interest rates), the net assetliability fair value of the Company’s derivative instruments would be approximately $15.9$44.2 million.

At December 31, 2008,2011, the Company had total outstanding floating rate debt of approximately $1.9$1.3 billion, or 18.3%13.8% 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 3414 basis points (a 10% increase from the Company’sCompany'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 $6.5 $1.8million. If market rates of interest on all of the floating rate debt permanently decreased by 3414 basis points (a 10% decrease from the Company’sCompany'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 $6.5 $1.8million.


At December 31, 2008,2011, the Company had total outstanding fixed rate debt of approximately $8.6$8.4 billion, or 81.7%86.2% of total debt, net of the effects of any derivative instruments. If market rates of interest permanently increased by 5857 basis points (a 10% increase from the Company’sCompany's existing weighted average interest rates), the estimated fair value of the Company’sCompany's fixed rate debt would be approximately $7.8$7.6 billion. If market rates of interest permanently decreased by 58

57 basis points (a 10% decrease from the Company’sCompany's existing weighted average interest rates), the estimated fair value of the Company’sCompany's fixed rate debt would be approximately $9.5$9.3 billion.


At December 31, 2008,2011, the Company’sCompany's derivative instruments had a net liability fair value of approximately $19,000.$23.3 million. If market rates of interest permanently increased by 158 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 $1.7 million. If market rates of interest permanently decreased by 15 basis points (a 10% decrease from the Company’sCompany's existing weighted average interest rates), the net liability fair value of the Company’sCompany's derivative instruments would be approximately $1.8$20.8 million.

If market rates of interest permanently decreased by 8 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 $25.9 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


Item 8. Financial Statements and Supplementary Data
See Index to Consolidated Financial Statements and Schedule on page F-1 of this Form 10-K.

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


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

Item 9A.Controls and Procedures


Item 9A. Controls and Procedures

Equity Residential
(a)  Evaluation of Disclosure Controls and Procedures:

Effective as of December 31, 2009,2012, 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.

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, 2009.2012. Our internal control over financial reporting has been audited as of December 31, 20092012 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 20092012 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, 2012, 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.

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, 2012. Our internal control over financial reporting has been audited as of December 31, 2012 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 2012 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

Item 9B.Other Information
Items 10, 11, 12, 13 and 14.

None.

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, the Company’s definitive proxy statement,Equity Residential's Proxy Statement, which the Company anticipates will be filedintends to file no later than April 15, 2010,120 days after the end of its fiscal year ended December 31, 2012, 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% owner of ERP Operating Limited Partnership.



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PART IV

Item 15.Exhibits and Financial Statement Schedules.


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, theeach 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, 2013


By: /S/     DAVID J. NEITHERCUT        
ERP OPERATING LIMITED PARTNERSHIP
BY: EQUITY RESIDENTIAL
ITS GENERAL PARTNER
 
By: /s/ David J. Neithercut President and
 
David J. Neithercut,
President and Chief Executive Officer
(Principal Executive Officer)
Date:February 25, 201021, 2013



Table of Contents

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 2009,2012, 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 theeach registrant and in the capacities set forth below and on the dates indicated:


Name

 

Title

 

Date

/S/    DAVID J. NEITHERCUT        

s/ David J. Neithercut

 President, Chief Executive Officer and Trustee 

February 25, 2010

21, 2013
David J. Neithercut(Principal Executive Officer)

/S/    MARK J. PARRELL        

s/ Mark J. Parrell

 Executive Vice President and Chief Financial Officer 

February 25, 2010

21, 2013
Mark J. Parrell(Principal Financial Officer)

/S/    IAN S. KAUFMAN        

s/ Ian S. Kaufman

 Senior Vice President and Chief Accounting Officer 

February 25, 2010

21, 2013
Ian S. Kaufman(Principal Accounting Officer)

/S/    JOHN W. ALEXANDER        

s/ John W. Alexander

 Trustee 

February 25, 2010

21, 2013
John W. Alexander

/S/    CHARLES L. ATWOOD        

s/ Charles L. Atwood

 Trustee 

February 25, 2010

21, 2013
Charles L. Atwood

/S/    LINDA WALKER BYNOE        

s/ Linda Walker Bynoe

 Trustee 

February 25, 2010

21, 2013
Linda Walker Bynoe

/S/    BOONE A. KNOX        

Boone A. Knox

s/ Mary Kay Haben		 Trustee 

February 25, 2010

21, 2013
Mary Kay Haben

/S/    JOHN E. NEAL        

John E. Neal

s/ Bradley A. Keywell		 Trustee 

February 25, 2010

21, 2013
Bradley A. Keywell

/S/    SHELI Z. ROSENBERG        

Sheli Z. Rosenberg

s/ John E. Neal		 Trustee 

February 25, 2010

21, 2013
John E. Neal

/S/    MARK S. SHAPIRO        

s/ Mark S. Shapiro

 Trustee 

February 25, 2010

21, 2013
Mark S. Shapiro

/S/    B. JOSEPH WHITE        

s/ B. Joseph White

 Trustee 

February 25, 2010

21, 2013
B. Joseph White

/S/    GERALD A. SPECTOR        

s/ Gerald A. Spector

 Vice Chairman of the Board of Trustees 

February 25, 2010

21, 2013
Gerald A. Spector

/S/    SAMUEL ZELL        

s/ Samuel Zell

 Chairman of the Board of Trustees 

February 25, 2010

21, 2013
Samuel Zell



Table of Contents

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)		 F-2

Report of Independent Registered Public Accounting Firm (ERP Operating Limited Partnership)

F-3
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial
    Reporting

(Equity Residential)
 F-3F-4

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial
    Reporting (ERP Operating Limited Partnership)
F-5
Financial Statements of Equity Residential:
Consolidated Balance Sheets as of December 31, 20092012 and 2008

2011		 F-4F-6

Consolidated Statements of Operations for the years ended
      December 31, 2009, 20082012, 2011 and 2007

2010
 F-5F-7 to F-6F-8

Consolidated Statements of Cash Flows for the years ended
      December 31, 2009, 20082012, 2011 and 2007

2010
 F-7F-9 to F-9F-11

Consolidated Statements of Changes in Equity for the years ended
      December 31, 2009, 20082012, 2011 and 2007

2010
 F-10F-12 to F-11F-13

Financial Statements of ERP Operating Limited Partnership:

  Consolidated Balance Sheets as of December 31, 2012 and 2011F-14
  Consolidated Statements of Operations for the years ended
      December 31, 2012, 2011 and 2010
F-15 to F-16
  Consolidated Statements of Cash Flows for the years ended
      December 31, 2012, 2011 and 2010
F-17 to F-19
  Consolidated Statements of Changes in Capital for the years ended
      December 31, 2012, 2011 and 2010
F-20 to F-21
Notes to Consolidated Financial Statements

of Equity Residential and ERP Operating
     Limited Partnership
 F-12F-22 to F-45F-62

SCHEDULE FILED AS PART OF THIS REPORT

 

Schedule III – Real Estate and Accumulated Depreciation

of Equity Residential and ERP Operating
     Limited Partnership
 S-1 to S-11S-14


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, 20092012 and 20082011 and the related consolidated statements of operations, changes in equity and cash flows for each of the three years in the period ended December 31, 2009.2012. 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, 20092012 and 20082011 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2009,2012, 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, Equity Residential changed its method of accounting for convertible debt instruments and noncontrolling interests upon the adoption of new accounting pronouncements, effective January 1, 2009 and applied retrospectively.

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, 2009,2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 201021, 2013 expressed an unqualified opinion thereon.


/s/  ERNST & YOUNG LLP

ERNST & YOUNG LLP
Chicago, Illinois
February 21, 2013

Chicago, Illinois

February 25, 2010



F-2
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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, 2012 and 2011 and the related consolidated statements of operations, changes in capital and cash flows for each of the three years in the period ended December 31, 2012. 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, 2012 and 2011 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2012, 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.
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, 2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21, 2013 expressed an unqualified opinion thereon.

/s/  ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
February 21, 2013



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, 2009,2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (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, 2009,2012, 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, 20092012 and 20082011 and the related consolidated statements of operations, changes in equity and cash flows for each of the three years in the period ended December 31, 20092012 of Equity Residential and our report dated February 25, 2010,21, 2013, expressed an unqualified opinion thereon.


/s/  ERNST & YOUNG LLP

ERNST & YOUNG LLP
Chicago, Illinois
February 21, 2013

Chicago, Illinois



F-4
Table of Contents


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, 2012, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (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, 2012, 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, 2012 and 2011 and the related consolidated statements of operations, changes in capital and cash flows for each of the three years in the period ended December 31, 2012 of ERP Operating Limited Partnership and our report dated February 25, 2010

21, 2013, expressed an unqualified opinion thereon.


/s/  ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
February 21, 2013


F-5
Table of Contents

EQUITY RESIDENTIAL

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands except for share amounts)

   December 31,
2009		  December 31,
2008		 

ASSETS

   

Investment in real estate

   

Land

  $3,650,324   $3,671,299  

Depreciable property

   13,893,521    13,908,594  

Projects under development

   668,979    855,473  

Land held for development

   252,320    254,873  
         

Investment in real estate

   18,465,144    18,690,239  

Accumulated depreciation

   (3,877,564)   (3,561,300) 
         

Investment in real estate, net

   14,587,580    15,128,939  

Cash and cash equivalents

   193,288    890,794  

Investments in unconsolidated entities

   6,995    5,795  

Deposits – restricted

   352,008    152,732  

Escrow deposits – mortgage

   17,292    19,729  

Deferred financing costs, net

   46,396    53,817  

Other assets

   213,956    283,304  
         

Total assets

  $15,417,515   $16,535,110  
         

LIABILITIES AND EQUITY

   

Liabilities:

   

Mortgage notes payable

  $4,783,446   $5,036,930  

Notes, net

   4,609,124    5,447,012  

Lines of credit

   —      —    

Accounts payable and accrued expenses

   58,537    108,463  

Accrued interest payable

   101,849    113,846  

Other liabilities

   272,236    289,562  

Security deposits

   59,264    64,355  

Distributions payable

   100,266    141,843  
         

Total liabilities

   9,984,722    11,202,011  
         

Commitments and contingencies

   

Redeemable Noncontrolling Interests – Operating Partnership

   258,280    264,394  
         

Equity:

   

Shareholders’ equity:

   

Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized; 1,950,925 shares issued and outstanding as of December 31, 2009 and 1,951,475 shares issued and outstanding as of December 31, 2008

   208,773    208,786  

Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 279,959,048 shares issued and outstanding as of December 31, 2009 and 272,786,760 shares issued and outstanding as of December 31, 2008

   2,800    2,728  

Paid in capital

   4,477,426    4,273,489  

Retained earnings

   353,659    456,152  

Accumulated other comprehensive income (loss)

   4,681    (35,799) 
         

Total shareholders’ equity

   5,047,339    4,905,356  

Noncontrolling Interests:

   

Operating Partnership

   116,120    137,645  

Preference Interests and Units

   —      184  

Partially Owned Properties

   11,054    25,520  
         

Total Noncontrolling Interests

   127,174    163,349  
         

Total equity

   5,174,513    5,068,705  
         

Total liabilities and equity

  $15,417,515   $16,535,110  
         

  December 31, 2012 December 31, 2011
ASSETS    
Investment in real estate  
  
Land $4,554,912
 $4,367,816
Depreciable property 15,711,944
 15,554,740
Projects under development 387,750
 160,190
Land held for development 353,823
 325,200
Investment in real estate 21,008,429
 20,407,946
Accumulated depreciation (4,912,221) (4,539,583)
Investment in real estate, net 16,096,208
 15,868,363
Cash and cash equivalents 612,590
 383,921
Investments in unconsolidated entities 17,877
 12,327
Deposits – restricted 250,442
 152,237
Escrow deposits – mortgage 9,129
 10,692
Deferred financing costs, net 44,382
 44,608
Other assets 170,372
 187,155
Total assets $17,201,000
 $16,659,303
     
LIABILITIES AND EQUITY    
Liabilities:    
Mortgage notes payable $3,898,369
 $4,111,487
Notes, net 4,630,875
 5,609,574
Lines of credit —
 —
Accounts payable and accrued expenses 38,372
 35,206
Accrued interest payable 76,223
 88,121
Other liabilities 304,518
 291,289
Security deposits 66,988
 65,286
Distributions payable 260,176
 179,079
Total liabilities 9,275,521
 10,380,042
     
Commitments and contingencies    
     
Redeemable Noncontrolling Interests – Operating Partnership 398,372
 416,404
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
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
Paid in capital 6,542,355
 5,047,186
Retained earnings 887,355
 615,572
Accumulated other comprehensive (loss) (193,148) (196,718)
Total shareholders’ equity 7,289,813
 5,669,015
Noncontrolling Interests:    
Operating Partnership 159,606
 119,536
Partially Owned Properties 77,688
 74,306
Total Noncontrolling Interests 237,294
 193,842
Total equity 7,527,107
 5,862,857
Total liabilities and equity $17,201,000
 $16,659,303

See accompanying notes

F-6

Table of Contents

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands except per share data)

   Year Ended December 31, 
   2009  2008  2007 

REVENUES

    

Rental income

  $1,933,365   $1,964,954   $1,814,863  

Fee and asset management

   10,346    10,715    9,183  
             

Total revenues

   1,943,711    1,975,669    1,824,046  
             

EXPENSES

    

Property and maintenance

   487,216    508,048    472,899  

Real estate taxes and insurance

   215,250    203,582    181,887  

Property management

   71,938    77,063    87,476  

Fee and asset management

   7,519    7,981    8,412  

Depreciation

   582,280    559,468    531,178  

General and administrative

   38,994    44,951    46,767  

Impairment

   11,124    116,418    —    
             

Total expenses

   1,414,321    1,517,511    1,328,619  
             

Operating income

   529,390    458,158    495,427  

Interest and other income

   16,684    33,515    20,037  

Other expenses

   (6,487)   (5,760)   (1,827) 

Interest:

    

Expense incurred, net

   (503,828)   (489,513)   (489,310) 

Amortization of deferred financing costs

   (12,794)   (9,684)   (10,077) 
             

Income (loss) before income and other taxes, (loss) income from investments in unconsolidated entities, net gain on sales of unconsolidated entities and land parcels and discontinued operations

   22,965    (13,284)   14,250  

Income and other tax (expense) benefit

   (2,808)   (5,284)   (2,518) 

(Loss) income from investments in unconsolidated entities

   (2,815)   (107)   332  

Net gain on sales of unconsolidated entities

   10,689    2,876    2,629  

Net gain on sales of land parcels

   —      2,976    6,360  
             

Income (loss) from continuing operations

   28,031    (12,823)   21,053  

Discontinued operations, net

   353,998    449,236    1,026,303  
             

Net income

   382,029    436,413    1,047,356  

Net (income) loss attributable to Noncontrolling Interests:

    

Operating Partnership

   (20,305)   (26,126)   (64,527) 

Preference Interests and Units

   (9)   (15)   (441) 

Partially Owned Properties

   558    (2,650)   (2,200) 
             

Net income attributable to controlling interests

   362,273    407,622    980,188  

Preferred distributions

   (14,479)   (14,507)   (22,792) 

Premium on redemption of Preferred Shares

   —      —      (6,154) 
             

Net income available to Common Shares

  $347,794   $393,115   $951,242  
             

Earnings per share – basic:

    

Income (loss) from continuing operations available to Common Shares

  $0.05   $(0.10)  $(0.04) 
             

Net income available to Common Shares

  $1.27   $1.46   $3.40  
             

Weighted average Common Shares outstanding

   273,609    270,012    279,406  
             

Earnings per share – diluted:

    

Income (loss) from continuing operations available to Common Shares

  $0.05   $(0.10)  $(0.04) 
             

Net income available to Common Shares

  $1.27   $1.46   $3.40  
             

Weighted average Common Shares outstanding

   290,105    270,012    279,406  
             

Distributions declared per Common Share outstanding

  $1.64   $1.93   $1.87  
             

  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:  
  
  
Operating Partnership (38,641) (40,780) (13,099)
Partially Owned Properties (844) (832) 726
Net income attributable to controlling interests 841,719
 893,585
 283,610
Preferred distributions (10,355) (13,865) (14,368)
Premium on redemption of Preferred Shares (5,152) —
 —
Net income available to Common Shares $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)
Net income available to Common Shares $2.73
 $2.98
 $0.95
Weighted average Common Shares outstanding 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)
Net income available to Common Shares $2.70
 $2.95
 $0.95
Weighted average Common Shares outstanding 319,766
 312,065
 282,888


See accompanying notes

F-7

Table of Contents

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS (Continued)

(Amounts in thousands except per share data)

   Year Ended December 31, 
   2009  2008  2007 

Comprehensive income:

    

Net income

  $382,029   $436,413   $1,047,356  

Other comprehensive income (loss) – derivative instruments:

    

Unrealized holding gains (losses) arising during the year

   37,676    (23,815)   (3,853) 

Losses reclassified into earnings from other comprehensive income

   3,724    2,696    1,954  

Other

   449    —      —    

Other comprehensive income (loss) – other instruments:

    

Unrealized holding gains arising during the year

   3,574    1,202    27  

(Gains) realized during the year

   (4,943)   —      —    
             

Comprehensive income

   422,509    416,496    1,045,484  

Comprehensive (income) attributable to Noncontrolling Interests

   (19,756)   (28,791)   (67,168) 
             

Comprehensive income attributable to controlling interests

  $402,753   $387,705   $978,316  
             


  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






























See accompanying notes

F-8

Table of Contents

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

   Year Ended December 31, 
   2009  2008  2007 

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net income

  $382,029   $436,413   $1,047,356  

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

    

Depreciation

   600,375    602,908    616,414  

Amortization of deferred financing costs

   13,127    9,701    11,849  

Amortization of discounts on investment securities

   (1,661)   (365)   —    

Amortization of discounts and premiums on debt

   5,857    9,730    5,082  

Amortization of deferred settlements on derivative instruments

   2,228    1,317    575  

Impairment

   11,124    116,418    —    

Write-off of pursuit costs

   4,838    5,535    1,726  

Transaction costs

   1,650    225    104  

Loss (income) from investments in unconsolidated entities

   2,815    107    (332) 

Distributions from unconsolidated entities – return on capital

   153    116    102  

Net (gain) on sales of investment securities

   (4,943)   —      —    

Net (gain) on sales of unconsolidated entities

   (10,689)   (2,876)   (2,629) 

Net (gain) on sales of land parcels

   —      (2,976)   (6,360) 

Net (gain) on sales of discontinued operations

   (335,299)   (392,857)   (933,013) 

Loss (gain) on debt extinguishments

   17,525    (18,656)   3,339  

Unrealized (gain) loss on derivative instruments

   (3)   500    (1) 

Compensation paid with Company Common Shares

   17,843    22,311    21,631  

Other operating activities, net

   —      —      (19) 

Changes in assets and liabilities:

    

Decrease (increase) in deposits – restricted

   3,117    (1,903)   2,927  

Decrease (increase) in other assets

   11,768    (1,488)   (4,873) 

(Decrease) in accounts payable and accrued expenses

   (34,524)   (821)   (9,760) 

(Decrease) increase in accrued interest payable

   (11,997)   (10,871)   33,545  

Increase (decrease) in other liabilities

   2,220    (19,412)   1,482  

(Decrease) increase in security deposits

   (5,091)   2,196    4,087  
             

Net cash provided by operating activities

   672,462    755,252    793,232  
             

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Investment in real estate – acquisitions

   (175,531)   (388,083)   (1,680,074) 

Investment in real estate – development/other

   (330,623)   (521,546)   (480,184) 

Improvements to real estate

   (123,937)   (169,838)   (252,675) 

Additions to non-real estate property

   (2,028)   (2,327)   (7,696) 

Interest capitalized for real estate under development

   (34,859)   (60,072)   (45,107) 

Proceeds from disposition of real estate, net

   887,055    887,576    2,012,939  

Investments in unconsolidated entities

   —      —      (191) 

Distributions from unconsolidated entities – return of capital

   6,521    3,034    122  

Purchase of investment securities

   (77,822)   (158,367)   —    

Proceeds from sale of investment securities

   215,753    —      —    

Transaction costs

   (1,650)   (225)   (104) 

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

   (250,257)   65,395    245,667  

Decrease in mortgage deposits

   2,437    445    5,354  

Acquisition of Noncontrolling Interests – Partially Owned Properties

   (11,480)   (20)   —    

Other investing activities, net

   —      —      1,200  
       ��     

Net cash provided by (used for) investing activities

   103,579    (344,028)   (200,749) 
             


  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-9

Table of Contents

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

   Year Ended December 31, 
   2009  2008  2007 

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Loan and bond acquisition costs

  $(9,291)  $(9,233)  $(26,257) 

Mortgage notes payable:

    

Proceeds

   738,798    1,841,453    827,831  

Restricted cash

   46,664    37,262    (113,318) 

Lump sum payoffs

   (939,022)   (411,391)   (523,299) 

Scheduled principal repayments

   (17,763)   (24,034)   (24,732) 

Gain (loss) on debt extinguishments

   2,400    (81)   (3,339) 

Notes, net:

    

Proceeds

   —      —      1,493,030  

Lump sum payoffs

   (850,115)   (304,043)   (150,000) 

Scheduled principal repayments

   —      —      (4,286) 

(Loss) gain on debt extinguishments

   (19,925)   18,737    —    

Lines of credit:

    

Proceeds

   —      841,000    17,536,000  

Repayments

   —      (980,000)   (17,857,000) 

Proceeds from (payments on) settlement of derivative instruments

   11,253    (26,781)   2,370  

Proceeds from sale of Common Shares

   86,184    —      —    

Proceeds from Employee Share Purchase Plan (ESPP)

   5,292    6,170    7,165  

Proceeds from exercise of options

   9,136    24,634    28,760  

Common Shares repurchased and retired

   (1,124)   (12,548)   (1,221,680) 

Redemption of Preferred Shares

   —      —      (175,000) 

Premium on redemption of Preferred Shares

   —      —      (24) 

Payment of offering costs

   (2,536)   (102)   (175) 

Other financing activities, net

   (16)   (16)   (14) 

Contributions – Noncontrolling Interests – Partially Owned Properties

   893    2,083    10,267  

Contributions – Noncontrolling Interests – Operating Partnership

   78    —      —    

Distributions:

    

Common Shares

   (488,604)   (522,195)   (526,281) 

Preferred Shares

   (14,479)   (14,521)   (27,008) 

Preference Interests and Units

   (12)   (15)   (453) 

Noncontrolling Interests – Operating Partnership

   (28,935)   (34,584)   (35,543) 

Noncontrolling Interests – Partially Owned Properties

   (2,423)   (3,056)   (18,943) 
             

Net cash (used for) provided by financing activities

   (1,473,547)   428,739    (801,929) 
             

Net (decrease) increase in cash and cash equivalents

   (697,506)   839,963    (209,446) 

Cash and cash equivalents, beginning of year

   890,794    50,831    260,277  
             

Cash and cash equivalents, end of year

  $193,288   $890,794   $50,831  
             

  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 Common Shares 1,417,040
 173,484
 329,452
Proceeds from Employee Share Purchase Plan (ESPP) 5,399
 5,262
 5,112
Proceeds from exercise of options 49,039
 95,322
 71,596
Common Shares repurchased and retired —
 —
 (1,887)
Redemption of Preferred Shares (150,000) —
 (877)
Premium on redemption of Preferred Shares (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 – Noncontrolling Interests – Operating Partnership 5
 —
 —
Distributions:  
  
  
Common Shares (473,451) (432,023) (379,969)
Preferred Shares (13,416) (12,829) (14,471)
Noncontrolling Interests – Operating Partnership (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











See accompanying notes

F-10

Table of Contents

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

   Year Ended December 31, 
   2009  2008  2007 

SUPPLEMENTAL INFORMATION:

    

Cash paid for interest, net of amounts capitalized

  $508,847   $491,803   $457,700  
             

Net cash paid (received) for income and other taxes

  $3,968   $(1,252)  $(1,587) 
             

Real estate acquisitions/dispositions/other:

    

Mortgage loans assumed

  $—     $24,946   $226,196  
             

Valuation of OP Units issued

  $1,034   $849   $—    
             

Mortgage loans (assumed) by purchaser

  $(17,313)  $—     $(76,744) 
             

Amortization of deferred financing costs:

    

Investment in real estate, net

  $(3,585)  $(1,986)  $(1,521) 
             

Deferred financing costs, net

  $16,712   $11,687   $13,370  
             

Amortization of discounts and premiums on debt:

    

Investment in real estate, net

  $(3)  $(6)  $—    
             

Mortgage notes payable

  $(6,097)  $(6,287)  $(6,252) 
             

Notes, net

  $11,957   $16,023   $11,334  
             

Amortization of deferred settlements on derivative instruments:

    

Other liabilities

  $(1,496)  $(1,379)  $(1,379) 
             

Accumulated other comprehensive income (loss)

  $3,724   $2,696   $1,954  
             

Unrealized (gain) loss on derivative instruments:

    

Other assets

  $(33,261)  $(6,680)  $(2,347) 
             

Mortgage notes payable

  $(1,887)  $6,272   $7,492  
             

Notes, net

  $719   $1,846   $4,323  
             

Other liabilities

  $(3,250)  $22,877   $(5,616) 
             

Accumulated other comprehensive income (loss)

  $37,676   $(23,815)  $(3,853) 
             

Proceeds from (payments on) settlement of derivative instruments:

    

Other assets

  $11,253   $(98)  $2,375  
             

Other liabilities

  $—     $(26,683)  $(5) 
             

  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





See accompanying notes

F-11

Table of Contents

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in thousands)

   Year Ended December 31, 
   2009  2008  2007 
SHAREHOLDERS’ EQUITY    

PREFERRED SHARES

    

Balance, beginning of year

  $208,786   $209,662   $386,574  

Redemption of 8.60% Series D Cumulative Redeemable

   —      —      (175,000) 

Conversion of 7.00% Series E Cumulative Convertible

   (13)   (828)   (1,818) 

Conversion of 7.00% Series H Cumulative Convertible

   —      (48)   (94) 
             

Balance, end of year

  $208,773   $208,786   $209,662  
             

COMMON SHARES, $0.01 PAR VALUE

    

Balance, beginning of year

  $2,728   $2,696   $2,936  

Conversion of Preferred Shares into Common Shares

   —      —      1  

Conversion of Preference Interests into Common Shares

   —      —      3  

Conversion of OP Units into Common Shares

   27    17    15  

Issuance of Common Shares

   35    —      —    

Exercise of share options

   4    10    10  

Employee Share Purchase Plan (ESPP)

   3    2    2  

Share-based employee compensation expense:

    

Restricted/performance shares

   3    5    4  

Common Shares repurchased and retired

   —      (2)   (275) 
             

Balance, end of year

  $2,800   $2,728   $2,696  
             

PAID IN CAPITAL

    

Balance, beginning of year

  $4,273,489   $4,134,209   $5,070,593  

Common Share Issuance:

    

Conversion of Preferred Shares into Common Shares

   13    876    1,911  

Conversion of Preference Interests into Common Shares

   —      —      11,497  

Conversion of OP Units into Common Shares

   48,776    49,884    32,430  

Issuance of Common Shares

   123,699    —      —    

Exercise of share options

   9,132    24,624    28,750  

Employee Share Purchase Plan (ESPP)

   5,289    6,168    7,163  

Share-based employee compensation expense:

    

Performance shares

   179    (8)   1,278  

Restricted shares

   11,129    17,273    15,226  

Share options

   5,996    5,846    5,345  

ESPP discount

   1,303    1,289    1,701  

Common Shares repurchased and retired

   (1,124)   (7,906)   (1,226,045) 

Offering costs

   (2,536)   (102)   (175) 

Premium on redemption of Preferred Shares – original issuance costs

   —      —      6,130  

Supplemental Executive Retirement Plan (SERP)

   27,809    (7,304)   (6,709) 

Acquisition of Noncontrolling Interests – Partially Owned Properties

   (1,496)   —      —    

Change in market value of Redeemable Noncontrolling Interests – Operating Partnership

   (14,544)   65,524    146,284  

Adjustment for Noncontrolling Interests ownership in Operating Partnership

   (9,688)   (16,884)   38,830  
             

Balance, end of year

  $4,477,426   $4,273,489   $4,134,209  
             


  Year Ended December 31,
SHAREHOLDERS’ EQUITY 2012 2011 2010
       
PREFERRED SHARES  
  
  
Balance, beginning of year $200,000
 $200,000
 $208,773
Redemption of 6.48% Series N Cumulative Redeemable (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
       
COMMON SHARES, $0.01 PAR VALUE  
  
  
Balance, beginning of year $2,975
 $2,902
 $2,800
Conversion of Preferred Shares into Common Shares —
 —
 3
Conversion of OP Units into Common Shares 7
 3
 9
Issuance of Common Shares 250
 39
 61
Exercise of share options 16
 29
 25
Employee Share Purchase Plan (ESPP) 1
 1
 2
Conversion of restricted shares to LTIP Units —
 (1) —
Share-based employee compensation expense:  
  
  
Restricted shares 2
 2
 2
Balance, end of year $3,251
 $2,975
 $2,902
       
PAID IN CAPITAL  
  
  
Balance, beginning of year $5,047,186
 $4,741,521
 $4,477,426
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
Issuance of Common Shares 1,388,333
 201,903
 291,841
Exercise of share options 49,023
 95,293
 71,571
Employee Share Purchase Plan (ESPP) 5,398
 5,261
 5,110
Conversion of restricted shares to LTIP Units —
 (3,933) —
Share-based employee compensation expense:  
  
  
Restricted shares 8,934
 9,100
 9,779
Share options 11,752
 9,545
 7,421
ESPP discount 965
 1,194
 1,290
Common Shares repurchased and retired —
 —
 (1,887)
Offering costs (39,359) (3,596) (4,657)
Premium on redemption of Preferred Shares – original issuance costs 5,129

—

—
Supplemental Executive Retirement Plan (SERP) 282
 10,765
 8,559
Acquisition of Noncontrolling Interests – Partially Owned Properties 1,293
 (4,784) (16,888)
Change in market value of Redeemable Noncontrolling Interests – Operating
   Partnership
 38,734
 (22,714) (129,918)
Adjustment for Noncontrolling Interests ownership in Operating Partnership 5,763
 (946) (5,775)
Balance, end of year $6,542,355
 $5,047,186
 $4,741,521




See accompanying notes

F-12

Table of Contents

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)

(Amounts in thousands)

   Year Ended December 31, 
   2009  2008  2007 

SHAREHOLDERS’ EQUITY (continued)

    

RETAINED EARNINGS

    

Balance, beginning of year

  $456,152   $586,685   $156,143  

Net income attributable to controlling interests

   362,273    407,622    980,188  

Common Share distributions

   (450,287)   (523,648)   (520,700) 

Preferred Share distributions

   (14,479)   (14,507)   (22,792) 

Premium on redemption of Preferred Shares – cash charge

   —      —      (24) 

Premium on redemption of Preferred Shares – original issuance costs

   —      —      (6,130) 
             

Balance, end of year

  $353,659   $456,152   $586,685  
             

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

    

Balance, beginning of year

  $(35,799)  $(15,882)  $(14,010) 

Accumulated other comprehensive income (loss) – derivative instruments:

    

Unrealized holding gains (losses) arising during the year

   37,676    (23,815)   (3,853) 

Losses reclassified into earnings from other comprehensive income

   3,724    2,696    1,954  

Other

   449    —      —    

Accumulated other comprehensive income (loss) – other instruments:

    

Unrealized holding gains arising during the year

   3,574    1,202    27  

(Gains) realized during the year

   (4,943)   —      —    
             

Balance, end of year

  $4,681   $(35,799)  $(15,882) 
             

NONCONTROLLING INTERESTS

    

OPERATING PARTNERSHIP

    

Balance, beginning of year

  $137,645   $162,185   $186,285  

Issuance of OP Units to Noncontrolling Interests

   1,034    849    —    

Issuance of LTIP Units to Noncontrolling Interests

   78    —      —    

Conversion of OP Units held by Noncontrolling Interests into OP Units held by General Partner

   (48,803)   (49,901)   (32,445) 

Equity compensation associated with Noncontrolling Interests

   1,194    —      —    

Net income attributable to Noncontrolling Interests

   20,305    26,126    64,527  

Distributions to Noncontrolling Interests

   (25,679)   (33,745)   (35,213) 

Change in carrying value of Redeemable Noncontrolling Interests – Operating Partnership

   20,658    15,247    17,861  

Adjustment for Noncontrolling Interests ownership in Operating Partnership

   9,688    16,884    (38,830) 
             

Balance, end of year

  $116,120   $137,645   $162,185  
             

PREFERENCE INTERESTS AND UNITS

    

Balance, beginning of year

  $184   $184   $11,684  

Conversion of 7.625% Series J Preference Interests

   —      —      (11,500) 

Conversion of Series B Junior Preference Units

   (184)   —      —    
             

Balance, end of year

  $—     $184   $184  
             

PARTIALLY OWNED PROPERTIES

    

Balance, beginning of year

  $25,520   $26,236   $26,814  

Net (loss) income attributable to Noncontrolling Interests

   (558)   2,650    2,200  

Contributions by Noncontrolling Interests

   893    2,083    10,267  

Distributions to Noncontrolling Interests

   (2,439)   (3,072)   (18,957) 

Other

   (657)   (500)   5,912  

Acquisition of additional ownership interest by Operating Partnership

   (11,705)   (1,877)   —    
             

Balance, end of year

  $11,054   $25,520   $26,236  
             

  Year Ended December 31,
SHAREHOLDERS’ EQUITY (continued) 2012 2011 2010
       
RETAINED EARNINGS  
  
  
Balance, beginning of year $615,572
 $203,581
 $353,659
Net income attributable to controlling interests 841,719
 893,585
 283,610
Common Share distributions (554,429) (467,729) (419,320)
Preferred Share distributions (10,355) (13,865) (14,368)
Premium on redemption of Preferred Shares – cash charge
(23)
—

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

—
Balance, end of year $887,355
 $615,572
 $203,581
       
ACCUMULATED OTHER COMPREHENSIVE (LOSS)  
  
  
Balance, beginning of year $(196,718) $(57,818) $4,681
Accumulated 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
Accumulated other comprehensive income – other instruments:  
  
  
Unrealized holding gains arising during the year 664
 355
 57
Balance, end of year $(193,148) $(196,718) $(57,818)
       
NONCONTROLLING INTERESTS  
  
  
       
OPERATING PARTNERSHIP  
  
  
Balance, beginning of year $119,536
 $110,399
 $116,120
Issuance of OP Units to Noncontrolling Interests 66,606
 —
 8,245
Issuance of LTIP Units to Noncontrolling Interests 5
 —
 —
Conversion of OP Units held by Noncontrolling Interests into OP Units held by
   General Partner
 (18,929) (8,580) (19,722)
Conversion of restricted shares to LTIP Units —
 3,934
 —
Equity compensation associated with Noncontrolling Interests 5,307
 3,641
 2,524
Net income attributable to Noncontrolling Interests 38,641
 40,780
 13,099
Distributions to Noncontrolling Interests (25,095) (21,434) (20,300)
Change in carrying value of Redeemable Noncontrolling Interests – Operating
   Partnership
 (20,702) (10,150) 4,658
Adjustment for Noncontrolling Interests ownership in Operating Partnership (5,763) 946
 5,775
Balance, end of year $159,606
 $119,536
 $110,399
       
PARTIALLY OWNED PROPERTIES  
  
  
Balance, beginning of year $74,306
 $7,991
 $11,054
Net income (loss) attributable to Noncontrolling Interests 844
 832
 (726)
Contributions by Noncontrolling Interests 8,221
 75,911
 222
Distributions to Noncontrolling Interests (5,131) (1,163) (2,952)
Acquisition of Noncontrolling Interests – Partially Owned Properties (1,306) (8,025) 175
Other 754
 (1,240) 218
Balance, end of year $77,688
 $74,306
 $7,991

See accompanying notes

F-13

Table of Contents

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

  December 31, 2012 December 31, 2011
ASSETS
Investment in real estate  
  
Land $4,554,912
 $4,367,816
Depreciable property 15,711,944
 15,554,740
Projects under development 387,750
 160,190
Land held for development 353,823
 325,200
Investment in real estate 21,008,429
 20,407,946
Accumulated depreciation (4,912,221) (4,539,583)
Investment in real estate, net 16,096,208
 15,868,363
Cash and cash equivalents 612,590
 383,921
Investments in unconsolidated entities 17,877
 12,327
Deposits – restricted 250,442
 152,237
Escrow deposits – mortgage 9,129
 10,692
Deferred financing costs, net 44,382
 44,608
Other assets 170,372
 187,155
Total assets $17,201,000
 $16,659,303
     
LIABILITIES AND CAPITAL
Liabilities:  
  
Mortgage notes payable $3,898,369
 $4,111,487
Notes, net 4,630,875
 5,609,574
Lines of credit —
 —
Accounts payable and accrued expenses 38,372
 35,206
Accrued interest payable 76,223
 88,121
Other liabilities 304,518
 291,289
Security deposits 66,988
 65,286
Distributions payable 260,176
 179,079
Total liabilities 9,275,521
 10,380,042
     
Commitments and contingencies  
  
     
Redeemable Limited Partners 398,372
 416,404
Capital:  
  
Partners' Capital:  
  
Preference Units 50,000
 200,000
General Partner 7,432,961
 5,665,733
Limited Partners 159,606
 119,536
Accumulated other comprehensive (loss) (193,148) (196,718)
Total partners' capital 7,449,419
 5,788,551
Noncontrolling Interests – Partially Owned Properties 77,688
 74,306
Total capital 7,527,107
 5,862,857
Total liabilities and capital $17,201,000
 $16,659,303









See accompanying notes
F-14

Table of Contents


ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
(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





























See accompanying notes
F-16

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












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



See accompanying notes
F-19

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ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
(Amounts in thousands)
  Year Ended December 31,
PARTNERS' CAPITAL 2012 2011 2010
       
PREFERENCE UNITS  
  
  
Balance, beginning of year $200,000
 $200,000
 $208,773
Redemption of 6.48% Series N Cumulative Redeemable (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
       
GENERAL PARTNER  
  
  
Balance, beginning of year $5,665,733
 $4,948,004
 $4,833,885
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
Issuance of OP Units 1,388,583
 201,942
 291,902
Exercise of EQR share options 49,039
 95,322
 71,596
EQR's Employee Share Purchase Plan (ESPP) 5,399
 5,262
 5,112
Conversion of EQR restricted shares to LTIP Units —
 (3,934) —
Share-based employee compensation expense:  
  
  
EQR restricted shares 8,936
 9,102
 9,781
EQR share options 11,752
 9,545
 7,421
EQR ESPP discount 965
 1,194
 1,290
OP Units repurchased and retired —
 —
 (1,887)
Offering costs (39,359) (3,596) (4,657)
Premium on redemption of Preference Units – original issuance costs 5,129
 —
 —
Net income available to Units – General Partner 826,212
 879,720
 269,242
OP Units – General Partner distributions (554,429) (467,729) (419,320)
Supplemental Executive Retirement Plan (SERP) 282
 10,765
 8,559
Acquisition of Noncontrolling Interests – Partially Owned Properties 1,293
 (4,784) (16,888)
Change in market value of Redeemable Limited Partners 38,734
 (22,714) (129,918)
Adjustment for Limited Partners ownership in Operating Partnership 5,763
 (946) (5,775)
Balance, end of year $7,432,961
 $5,665,733
 $4,948,004
       
LIMITED PARTNERS      
Balance, beginning of year $119,536
 $110,399
 $116,120
Issuance of OP Units to Limited Partners 66,606
 —
 8,245
Issuance of LTIP Units to Limited Partners 5
 —
 —
Conversion of OP Units held by Limited Partners into OP Units held by
   General Partner
 (18,929) (8,580) (19,722)
Conversion of EQR restricted shares to LTIP Units —
 3,934
 —
Equity compensation associated with Units – Limited Partners 5,307
 3,641
 2,524
Net income available to Units – Limited Partners 38,641
 40,780
 13,099
Units – Limited Partners distributions (25,095) (21,434) (20,300)
Change in carrying value of Redeemable Limited Partners (20,702) (10,150) 4,658
Adjustment for Limited Partners ownership in Operating Partnership (5,763) 946
 5,775
Balance, end of year $159,606
 $119,536
 $110,399

See accompanying notes
F-20

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ERP OPERATING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (Continued)
(Amounts in thousands)
  Year Ended December 31,
PARTNERS' CAPITAL (continued) 2012 2011 2010
       
ACCUMULATED OTHER COMPREHENSIVE (LOSS)  
  
  
Balance, beginning of year $(196,718) $(57,818) $4,681
Accumulated 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
Accumulated other comprehensive income – other instruments:  
  
  
Unrealized holding gains arising during the year 664
 355
 57
Balance, end of year $(193,148) $(196,718) $(57,818)
       
NONCONTROLLING INTERESTS  
  
  
       
NONCONTROLLING INTERESTS – PARTIALLY OWNED PROPERTIES  
  
  
Balance, beginning of year $74,306
 $7,991
 $11,054
Net income (loss) attributable to Noncontrolling Interests 844
 832
 (726)
Contributions by Noncontrolling Interests 8,221
 75,911
 222
Distributions to Noncontrolling Interests (5,131) (1,163) (2,952)
Acquisition of Noncontrolling Interests – Partially Owned Properties (1,306) (8,025) 175
Other 754
 (1,240) 218
Balance, end of year $77,688
 $74,306
 $7,991





See accompanying notes
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EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business


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, 20092012 owned an approximate 95.2%95.9% ownership interest in, ERP Operating Limited Partnership, an Illinois limited partnership (the “Operating Partnership”). The Company is structured as an umbrella partnership REIT (“UPREIT”) under which allERPOP. 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 subsidiaries. Referencesinvestment in ERPOP. EQR issues public equity from time to the “Company” include EQR, the Operating Partnership and those entities owned or controlledtime but does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership and/or EQR.

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, 2009,2012, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 495403 properties located in 2313 states and the District of Columbia consisting of 137,007115,370 apartment units. The ownership breakdown includes (table does not include various uncompleted development properties):

   Properties  Units

Wholly Owned Properties

  432  118,796

Partially Owned Properties:

    

Consolidated

  27  5,530

Unconsolidated

  34  8,086

Military Housing

  2  4,595
      
  495  137,007

  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 429378 of the 432382 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 21012104 for the threefour operating properties, respectively, and 21042110 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 “Partially Owned Properties – Unconsolidated” are partially owned but not controlled by the Company and consist of investments in partnership interests that 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.

2. Summary of Significant Accounting Policies


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, other than entities that own controlling interests in the Partially Owned Properties – Unconsolidated and certain other entities in which the Company has investments, the Operating Partnership and each such subsidiary has been consolidated with the Company for financial reporting purposes.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.

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Real Estate Assets and Depreciation 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. Due to the Company’s limited acquisition activities in 2009, this has not had a material effect on the Company’s consolidated results of operations or financial position. Should the Company increase its acquisition activities, the effect could become material.

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:

▪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 $8,000 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.
▪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.

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

Furniture, Fixtures and Equipment – Ranges between $8,000 and $13,000 per apartment unit acquired as an estimate of the fair value of the appliances and fixtures inside a unit. The per-unit amount applied depends on the type of apartment building acquired. Depreciation is calculated on the straight-line method over an estimated useful life of five years.

In-Place Leases – The Company considers the value of acquired in-place leases and the amortization period is the average remaining term of each respective in-place acquired lease.

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.

Replacements inside aan apartment unit such as appliances and carpeting are depreciated over a five-yearan estimated useful life.life of five 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 the useful life of the asset are capitalized over their estimated useful life, generally five to tenfifteen years. Initial direct leasing costs are expensed as incurred as such expense approximates the deferral and amortization of initial direct leasing costs over the lease terms. Property sales or dispositions are recorded when title transfers 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 loss on sale is recognized in accordance with accounting principles generally accepted in the United States.

The Company classifies real estate assets as real estate held for 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 permanent 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 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 further analyzes each individual asset for other temporary or permanent indicators of impairment. Anwould record an impairment loss would be recorded for the difference between the estimated fair value and the carrying amount of the asset if the Company deems this difference to be permanent.

asset.

For long-lived assets to be disposed of, an impairment loss is recognized when the estimated fair value of the asset, less

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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 theReal 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 all of their time on the supervision of major capital and/or renovation projects. These costs are reflected on the balance sheet as an increase 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 all of 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 sheet 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, 2011 and 2010, the Company capitalized $14.3 million, $11.6 million and $10.7 million, respectively, of payroll and associated costs of employees directly responsible for and who spend their time on the 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 income (loss), a separate component of shareholders’ equity.

equity/partners' capital.

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 $34.6$32.2 million and $31.4$37.7 million at December 31, 20092012 and 2008,2011, 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 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 limitmanage 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.


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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.

The Company recognizes all derivatives as either assets or liabilities in the statement of financial positionconsolidated balance sheets and measures those instruments at fair value. In addition, fair value adjustments will affect either shareholders’ equityequity/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. 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 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’sCompany'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:

   2009  2008  2007 

Expected volatility (1)

   26.8%   20.3%   18.9% 

Expected life (2)

   5 years    5 years    5 years  

Expected dividend yield (3)

   4.68%   4.95%   5.41% 

Risk-free interest rate (4)

   1.89%   2.67%   4.74% 

Option valuation per share

  $3.38   $4.08   $6.26  


  2012 2011 2010
Expected volatility (1) 27.4% 27.1% 32.4%
Expected life (2) 5 years 5 years 5 years
Expected dividend yield (3) 4.35% 4.56% 4.85%
Risk-free interest rate (4) 0.71% 2.27% 2.29%
Option valuation per share $8.54 $8.36 $6.18

(1)Expected volatility – EstimatedFor 2012 and 2011, estimated 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’sEQR'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 and the Company’s use of this model should not be interpreted as an endorsement of its accuracy.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, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its share options and the actual value of the options to the recipient may be significantly different.

Income and Other Taxes

Due to the structure of the CompanyEQR 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

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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 primarily those entities engaged in condominium conversion and corporate housing activities 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, differing depreciable lives on capitalized assets

and the timing of expense recognition for certain accrued liabilities. As of December 31, 2009,2012, the Company has recorded a deferred tax asset of approximately $42.5$36.1 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 for the years ended December 31, 2009, 20082012, 2011 and 20072010 (amounts in thousands):

   Year Ended December 31, 
   2009  2008  2007 

Income and other tax expense (benefit) (1)

  $2,808   $5,284   $2,518  

Discontinued operations, net (2)

   (1,165)   (1,846)   (7,307) 
             

Provision (benefit) for income, franchise and excise taxes (3)

  $1,643   $3,438   $(4,789) 
             


  Year Ended December 31,
  2012 2011 2010
Income and other tax expense (benefit) (1) $539
 $728
 $291
Discontinued operations, net (2) 9
 (243) 87
Provision for income, franchise and excise taxes (3) $548
 $485
 $378

(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 and included in discontinued operations.
(3)All provisionprovisions for income tax amounts are current and none are deferred.

The Company’s TRS’ carried back approximately $7.3 million and $13.9 million of net operating losses (“NOL”) during the years ended December 31, 2008 and 2007, respectively, and none were carried back in 2009. The Company’s TRS’TRSs have approximately $46.7$76.4 million of NOL carryforwards available as of January 1, 20102013 that will expire in between 2028 and 2029.

2031.

During the years ended December 31, 2009, 20082012, 2011 and 2007,2010, the Company’s tax treatment of dividends and distributions were as follows:

   Year Ended December 31,
   2009  2008  2007

Tax treatment of dividends and distributions:

      

Ordinary dividends

  $0.807  $0.699  $—  

Qualified dividends

   —     —     —  

Long-term capital gain

   0.558   0.755   1.426

Unrecaptured section 1250 gain

   0.275   0.476   0.444
            

Dividends and distributions declared per Common Share outstanding

  $1.640  $1.930  $1.870
            



 Year Ended December 31,
  2012 2011 2010
Tax treatment of dividends and distributions:  
  
  
Ordinary dividends $1.375
 $0.667
 $0.607
Long-term capital gain 0.253
 0.629
 0.622
Unrecaptured section 1250 gain 0.152
 0.284
 0.241
Dividends and distributions declared per  
  
  
Common Share/Unit outstanding $1.780
 $1.580
 $1.470
The cost of land and depreciable property, net of accumulated depreciation, for federal income tax purposes as of December 31, 20092012 and 20082011 was approximately $10.4$11.2 billion and $10.7$11.4 billion, respectively.

Noncontrolling Interests

Effective January 1, 2009, a

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’scompany'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 Statements of Operations. Other than modifications to allocations and presentation, this does not have a material effect on the Company’s consolidated results of operations or financial position. See Note 3 for further discussion.

Operating Partnership: Net income is allocated to noncontrolling interests based on their respective ownership percentage

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of the Operating Partnership. The ownership percentage is calculated by dividing the number of units of limited partnership interest (“OP Units”)Units held by the noncontrolling interests by the total OP Units held by the noncontrolling interests and EQR. Issuance of additional common shares of beneficial interest, $0.01 par value per share (the “Common Shares”),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.

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: Partnership / Redeemable Limited Partners
The Company classifies Redeemable Noncontrolling Interests – Operating Partnership / Redeemable Limited Partners in the mezzanine section of the consolidated balance sheetsheets for the portion of OP Units that the CompanyEQR is required, either by contract or securities law, to deliver registered EQR 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.

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.

equity/capital.

Other

Other

In June 2009, the FASB issuedThe FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, which superseded all then-existing non-SEC accounting and reporting standards and became the source of authoritative U.S. generally accepted accounting principles recognized by the FASB to be applied by non-governmental entities. The Company adoptedis the codification as required, effective for the quarter ended September 30, 2009. The adoptioncontrolling partner in various consolidated partnerships owning 19 properties and 3,475 apartment units and various completed and uncompleted development properties having a noncontrolling interest book value of the codification has no impact on the Company’s consolidated results of operations or financial position but changed the way we refer to accounting literature in reports beginning with the quarter ended September 30, 2009.

Effective $77.7 million at December 31, 2008, public companies were required to provide additional disclosures about transfers of financial assets. In addition, public enterprises, including sponsors that have a variable interest in a Variable Interest Entity (“VIE”), were required to provide additional disclosures about their involvement with VIEs. For the Company, this includes only its development partnerships as the Company provides substantially all of the capital for these ventures (other than third party mortgage debt, if any)2012. These requirements affected only disclosures and had no impact on the Company’s consolidated results of operations or financial position.

Effective January 1, 2010, companies will be required to provide more information about transfers of financial assets, including securitization transactions and where companies have continuing exposure to the risks related to transferred financial assets. The concept of a qualifying special-purpose entity will be eliminated, the requirements for derecognizing financial assets will change and additional disclosures will be required. The Company does not expect this will have a material effect on its consolidated results of operations or financial position.

Effective January 1, 2010, the way in which a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar) rights should be consolidated will change. The determination of whether a company is required to consolidate an entity will be based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance. The Company does not expect this will have a material effect on its consolidated results of operations or financial position.

The Company is required to make certain disclosures regarding noncontrolling interests in consolidated limited-life subsidiaries. TheOf the consolidated entities described above, the Company is presently the controlling partner in various consolidatedlimited-life partnerships consisting of 27 properties and 5,530 units and various uncompleted developmentowning six properties having a noncontrolling interest book valuedeficit balance of $11.1$7.4 million at December 31, 2009. Some of these. 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 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, 2009,2012, the Company estimates the value of Noncontrolling Interest distributions for these six properties would have been approximately $45.5$34.2 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 thesix 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, 20092012 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’sCompany's Partially Owned Properties is subject to change. To the extent that the partnerships’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


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Partially Owned Properties.

Effective January 1, 2008,2010, 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 rules governing fair value measurements changed. These rules establishedconcept of a comprehensive framework“qualifying special-purpose entity” and special guidance for measuring fair value in accordance with accounting principles generally accepted in the United Statesguaranteed mortgage securitizations are eliminated, other sale-accounting criteria is clarified and required expanded disclosures about fair value measurements. This did not have a material effect on the Company’s consolidated results of operations or financial position. See Note 11 for further discussion.

Effective January 1, 2008, companies were permitted to elect a “Fair Value Option” under which a company may irrevocably elect fair value as the initial and subsequent measurement attribute for certainof a transferor’s interest in transferred financial instruments. The Fair Value Optionassets is available on a contract-by-contract basis with changes in fair value recognized in earnings as those changes occur. The Company has not adopted this optional standard.

Effective for the quarter ended June 30, 2009, disclosures about fair value of financial instruments are required for interim reporting periods in summarized financial information for publicly traded companies as well as in annual financial statements.changed. This does not have a material effect on the Company’s consolidated results of operations or financial position. See Note 11 for further discussion.

Effective January 1, 2010, companies willthe 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 required to discuss the reasons for transfers into or out of Level 3 of the fair value hierarchy and, if significant, disclose these transfers on a gross basis. Companies will also be required to disclose significant transfers between Level 1 and Level 2 and the reasons for these transfers. In addition, companies should provide fair value disclosures by each class rather than major category of assets and liabilities as wellidentified as the valuation techniquesparty that both (a) has the power to direct the activities of a VIE that most significantly impact its economic performance and inputs used in determining(b) has an obligation to absorb losses or a right to receive benefits that could potentially be significant to the fair value of assets or liabilities classified as Level 2 or 3. TheVIE. For the Company, does not expect this will have a material effectthese requirements affected only disclosures and had no impact on itsthe Company’s consolidated results of operations or financial position.

See Note 6 for further discussion.

Effective January 1, 2011, companies will beare 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 Note 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 will 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. The Company does not expect this will have a material effect on its consolidated results of operations or financial position.

Effective January 1, 2009, in an effort to improve financial standards for derivative instruments and hedging activities, companies are required to enhance disclosures to enable investors to better understand their effects on an entity’s financial position, financial performance and cash flows. Among other requirements, entities are required to provide enhanced disclosures about: (1) how and why an entity uses derivative instruments; (2) how derivative instruments and related hedged items are accounted for; and (3) how derivative instruments and related hedged items affect an entity’s financial position, financial performance and cash flows. Other than the enhanced disclosure requirements, this does not have a material effect on the Company’s consolidated financial statements. See Note 11 for further discussion.

Effective for the quarter ended June 30, 2009, companies are required to disclose the date through which an entity has evaluated subsequent events in accordance with general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. For public companies, this is the date the financial statements are issued. This does not have a material effect on the Company’s consolidated results of operations or financial position.


Effective January 1, 2009, issuers of certain convertible debt instruments that may be settled in cash on conversion arewere required to separately account for the liability and equity components of the instrument in a manner that reflects each issuer’sissuer's nonconvertible debt borrowing rate. As the Company iswas required to apply this retrospectively, the accounting for the Operating Partnership’s $650.0its $650.0 million ($482.5 million outstanding at December 31, 2009) 3.85% 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 mature in August 2026 is affected.no premium was paid. The Company recognized $20.6$11.8 million $24.4 and $18.6 million and $25.0 million in interest expense related to the stated coupon rate of 3.85% for the years ended December 31, 2009, 20082011 and 2007,2010, respectively. The amount of the conversion option as of the date of issuance calculated by the Company using a 5.80% effective interest rate was $44.3$44.3 million and is beingwas amortized to interest expense over the expected life of the convertible notes (through the first put date on August 18, 2011)2011). Total

amortization of the cash discount and conversion option discount on the unsecured notes resulted in a reduction to earnings of approximately $10.6$5.0 million and $7.8 million, respectively, or $0.04$0.02 per shareshare/Unit and $0.03 per share/Unit, respectively, for the yearyears ended December 31, 20092011 and is anticipated to result in a reduction to earnings of approximately $7.8 million or $0.03 per share for the year ended December 31, 2010 assuming the Company does not repurchase any additional amounts of this debt.. 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$27.0 million, decreased the January 1, 2009 balance of notes by $17.3$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. Due to the required retrospective application, it resulted in a reduction to earnings of approximately $13.3$44.3 million or $0.05 per share for the year ended December 31, 2008 and approximately $10.1 million or $0.04 per share for the year ended December 31, 2007.. 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$44.3 million at both December 31, 2009 and 2008.2011. The unamortized cash and conversion option discounts totaled $12.8 million and $23.4 millionwere fully amortized at December 31, 2009 and 2008, respectively.

3. 2011.







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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 Long-Term Incentive Plan (“LTIP”) Units) for the years ended December 31, 2009, 20082012, 2011 and 2007:

   2009  2008  2007 

Common Shares

    

Common Shares outstanding at January 1,

   272,786,760    269,554,661   293,551,633  

Common Shares Issued:

    

Conversion of Series E Preferred Shares

   612    36,830   80,895  

Conversion of Series H Preferred Shares

   —      2,750   5,463  

Conversion of Preference Interests

   —      —     324,484  

Conversion of OP Units

   2,676,002    1,759,560   1,494,263  

Issuance of Common Shares

   3,497,300    —     —    

Exercise of share options

   422,713    995,129   1,040,765  

Employee Share Purchase Plan (ESPP)

   324,394    195,961   189,071  

Restricted share grants, net

   298,717    461,954   352,433  

Common Shares Other:

    

Repurchased and retired

   (47,450)   (220,085)  (27,484,346) 
            

Common Shares outstanding at December 31,

   279,959,048    272,786,760   269,554,661  
            

Units

    

Units outstanding at January 1,

   16,679,777    18,420,320   19,914,583  

LTIP Units, net

   154,616    —     —    

OP Units issued through acquisitions/consolidations

   32,061    19,017   —    

Conversion of Series B Junior Preference Units

   7,517    —     —    

Conversion of OP Units to Common Shares

   (2,676,002)   (1,759,560)  (1,494,263) 
            

Units outstanding at December 31,

   14,197,969    16,679,777   18,420,320  
            

Total Common Shares and Units outstanding at December 31,

   294,157,017    289,466,537   287,974,981  
            

Units Ownership Interest in Operating Partnership

   4.8%   5.8%  6.4% 

LTIP Units Issued:

    

Issuance – per unit

  $0.50    —     —    

Issuance – contribution valuation

  $0.1 million    —     —    

OP Units Issued:

    

Acquisitions/consolidations – per unit

  $26.50   $44.64   —    

Acquisitions/consolidations – valuation

  $0.8 million   $0.8 million   —    

Conversion of Series B Junior Preference Units – per unit

  $24.50    —     —    

Conversion of Series B Junior Preference Units – valuation

  $0.2 million    —     —    

As of December 31, 2009, an unlimited amount of equity securities remains available for issuance by the Company under a registration statement the SEC declared effective in December 2008 (under SEC regulations enacted in 2005, the registration statement automatically expires on December 15, 2011 and does not contain a maximum issuance amount).

In September 2009, the Company announced the creation of an At-The-Market (“ATM”) share offering program which would allow the Company to sell up to 17.0 million Common Shares from time to time over the next three years into the existing trading market at current market prices as well as through negotiated transactions. During the year ended December 31, 2009, the Company issued approximately 3.5 million Common Shares at an average price of $35.38 per share for total consideration of approximately $123.7 million through the ATM program. As of December 31, 2009, transactions to issue approximately 1.1 million of the 3.5 million Common Shares had not yet settled. As of December 31, 2009, the Company has increased the number of Common Shares issued and outstanding by this amount and recorded a receivable of approximately $37.6 million included in other assets on the consolidated balance sheets. EQR has authorization to issue an additional 13.5 million of its shares as of December 31, 2009.

During the year ended December 31, 2007, the Board of Trustees approved increases totaling $1.2 billion to the Company’s authorized share repurchase program. Considering the additional authorizations and the repurchase activity for the year ended December 31, 2009, EQR has authorization to repurchase an additional $466.5 million of its shares as of December 31, 2009.

During the year ended December 31, 2009, the Company repurchased 47,450 of its Common Shares at an average price of $23.69 per share for total consideration of $1.1 million. These shares were retired subsequent to the repurchases. All of the shares repurchased during the year ended December 31, 2009 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.

During the year ended December 31, 2008, the Company repurchased 220,085 of its Common Shares at an average price of $35.93 per share for total consideration of $7.9 million. These shares were retired subsequent to the repurchases. Of the total shares repurchased, 120,085 shares were repurchased from employees at an average price of $36.10 per share (the average of the then current market prices) to cover the minimum statutory tax withholding obligations related to the vesting of employees’ restricted shares. The remaining 100,000 shares were repurchased in the open market at an average price of $35.74 per share. The Company also funded $4.6 million in January 2008 for the settlement of 125,000 Common Shares that were repurchased in December 2007 and recorded as other liabilities at December 31, 2007.

During the year ended December 31, 2007, the Company repurchased 27,484,346 of its Common Shares at an average price of $44.62 per share for total consideration of $1.2 billion. These shares were retired subsequent to the repurchases. Of the total shares repurchased, 84,046 shares were repurchased from employees at an average price of $53.85 per share (the average of the then current market prices) to cover the minimum statutory tax withholding obligations related to the vesting of employees’ restricted shares. The remaining 27,400,300 shares were repurchased in the open market at an average price of $44.59 per share. As of December 31, 2007, transactions to repurchase 125,000 of the 27,484,346 Common Shares had not yet settled. As of December 31, 2007, the Company has reduced the number of Common Shares issued and outstanding by this amount and recorded a liability of $4.6 million included in other liabilities on the consolidated balance sheets.

2010:


  2012 2011 2010
Common Shares  
  
  
Common Shares outstanding at January 1, 297,508,185
 290,197,242
 279,959,048
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
Issuance of Common Shares 25,023,919
 3,866,666
 6,151,198
Exercise of share options 1,608,427
 2,945,948
 2,506,645
Employee Share Purchase Plan (ESPP) 110,054
 113,107
 157,363
Restricted share grants, net 128,252
 145,616
 235,767
Common Shares Other:  
  
  
Conversion of restricted shares to LTIP Units —
 (101,988) —
Repurchased and retired —
 —
 (58,130)
Common Shares outstanding at December 31, 325,054,654
 297,508,185
 290,197,242
Units  
  
  
Units outstanding at January 1, 13,492,543
 13,612,037
 14,197,969
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
 —
Conversion of OP Units to Common Shares (675,817) (341,594) (884,472)
Units outstanding at December 31, 13,968,758
 13,492,543
 13,612,037
Total Common Shares and Units outstanding at December 31, 339,023,412
 311,000,728
 303,809,279
Units Ownership Interest in Operating Partnership 4.1% 4.3% 4.5%
OP Units Issued:  
  
  
Acquisitions/consolidations – per unit 
$61.57
 —
 $40.09
Acquisitions/consolidations – valuation $66.6 million
 —
 $8.2 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, are collectively referred to as the “Noncontrolling Interests – Operating Partnership”. Subject to certain exceptions (including the “book-up” requirements of LTIP Units), the Noncontrolling Interests – Operating Partnership may exchange their Units with EQR for EQR 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 proportional relationship between the carrying valuesnumber of equity associated with EQR’s Common Shares relative to that of the Noncontrolling Interests – Operating Partnership.Partnership Units in total in proportion to the number 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.

A portion of the Noncontrolling Interests – Operating Partnership Units are classified as mezzanine equity as they do not meet the requirements for permanent equity classification.

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 fromof 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 EQR 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 EQR 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 EQR Common Shares for the remaining portion of the Noncontrolling Interests – Operating Partnership Units that are classified in permanent equity at December 31, 20092012 and 2008.

2011.

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, 2009,2012, the Redeemable Noncontrolling Interests – Operating Partnership have a redemption value of approximately $258.3$398.4 million, which represents the value of EQR 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, 2009, 20082012, 2011 and 2007,2010, respectively (amounts in thousands):

   2009  2008  2007 

Balance at January 1,

  $264,394   $345,165   $509,310  

Change in market value

   14,544    (65,524)   (146,284) 

Change in carrying value

   (20,658)   (15,247)   (17,861) 
             

Balance at December 31,

  $258,280   $264,394   $345,165  
             


  2012 2011 2010
Balance at January 1, $416,404
 $383,540
 $258,280
Change in market value (38,734) 22,714
 129,918
Change in carrying value 20,702
 10,150
 (4,658)
Balance at December 31, $398,372
 $416,404
 $383,540
Net proceeds from the Company’sEQR Common Share and Preferred Share (see definition below) offerings are contributed by the CompanyEQR to the Operating Partnership.ERPOP. In return for those contributions, EQR receives a number of OP Units in the Operating PartnershipERPOP 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 the Operating PartnershipERPOP 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 the Operating Partnership.

ERPOP.

The Company’s declaration of trust authorizes the Companyit 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, 20092012 and 2008:

        Amounts in thousands
  Redemption
Date (1) (2)		 Conversion
Rate (2)		 Annual
Dividend per
Share (3)		 December 31,
2009		 December 31,
2008

Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized:

     

7.00% Series E Cumulative Convertible Preferred; liquidation value $25 per share; 328,466 and 329,016 shares issued and outstanding at December 31, 2009 and December 31, 2008, respectively

 11/1/98 1.1128 $1.75 $8,212 $8,225

7.00% Series H Cumulative Convertible Preferred; liquidation value $25 per share; 22,459 shares issued and outstanding at December 31, 2009 and December 31, 2008

 6/30/98 1.4480 $1.75  561  561

8.29% Series K Cumulative Redeemable Preferred; liquidation value $50 per share; 1,000,000 shares issued and outstanding at December 31, 2009 and December 31, 2008

 12/10/26 N/A $4.145  50,000  50,000

6.48% Series N Cumulative Redeemable Preferred; liquidation value $250 per share; 600,000 shares issued and outstanding at December 31, 2009 and December 31, 2008 (4)

 6/19/08 N/A $16.20  150,000  150,000
         
    $208,773 $208,786
         

2011:
      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

(1)On or after the redemption date, redeemable preferred shares (Series K and N) may be redeemed for cash at the option of the Company, in whole or in part, at a redemption price equal to the liquidation price per share, plus accrued and unpaid distributions, if any.
(2)On or after the redemption date, convertible preferred shares (Series E & H) may be redeemed under certain circumstances at the option of the Company for cash (in the case of Series E) or Common Shares (in the case of Series H), in whole or in part, at various redemption prices per share based upon the contractual conversion rate, plus accrued and unpaid distributions, if any.
(3)
Dividends on all series of Preferred Shares are payable quarterly at various pay dates. The dividend listed for Series N is a Preferred Share rate and the equivalent Depositary Share annual dividend is $1.62$1.62 per share.
(4)
(3)The Series N Preferred Shares havehad a corresponding depositary share that consistsconsisted of ten times the number of shares and one-tenth the liquidation value and dividend per share.

During the year ended December 31, 2007, the Company redeemed for cash all 700,000 shares
(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

F-30
Table of its 8.60% Series D Preferred Shares with a liquidation value of $175.0 million. The Company recorded the write-off of Contents

approximately $6.1$5.1 million in original issuance costs as a premium on the redemption of Preferred SharesShares.
Capital and Redeemable Limited Partners of ERP Operating Limited Partnership
The following tables present the changes in the accompanying consolidated statementsOperating Partnership's issued and outstanding Units and in the limited partners' Units for the years ended December 31, 2012, 2011 and 2010:
  2012 2011 2010
General and Limited Partner Units  
  
  
General and Limited Partner Units outstanding at January 1, 311,000,728
 303,809,279
 294,157,017
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
Exercise of EQR share options 1,608,427
 2,945,948
 2,506,645
EQR's Employee Share Purchase Plan (ESPP) 110,054
 113,107
 157,363
EQR's restricted share grants, net 128,252
 145,616
 235,767
Issued to Limited Partners:      
LTIP Units, net 70,235
 120,112
 92,892
OP Units issued through acquisitions/consolidations 1,081,797
 —
 205,648
OP Units Other:  
  
  
Repurchased and retired —
 —
 (58,130)
General and Limited Partner Units outstanding at December 31, 339,023,412
 311,000,728
 303,809,279
Limited Partner Units  
  
  
Limited Partner Units outstanding at January 1, 13,492,543
 13,612,037
 14,197,969
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
 —
Conversion of Limited Partner OP Units to EQR Common Shares (675,817) (341,594) (884,472)
Limited Partner Units outstanding at December 31, 13,968,758
 13,492,543
 13,612,037
Limited Partner Units Ownership Interest in Operating Partnership 4.1% 4.3% 4.5%
Limited Partner OP Units Issued:  
  
  
Acquisitions/consolidations – per unit 
$61.57
 —
 $40.09
Acquisitions/consolidations – valuation $66.6 million
 —
 $8.2 million
The Limited Partners of operations.

the Operating Partnership as of December 31, 2012 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. Subject to certain exceptions (including the “book-up” requirements of LTIP 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 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, 2012 and 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, 2012, the Redeemable Limited Partner Units have a redemption value of approximately $398.4 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, 2012, 2011 and 2010, respectively (amounts in thousands):

  2012 2011 2010
Balance at January 1, $416,404
 $383,540
 $258,280
Change in market value (38,734) 22,714
 129,918
Change in carrying value 20,702
 10,150
 (4,658)
Balance at December 31, $398,372
 $416,404
 $383,540
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, 2012 and 2011:
      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

(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.
Other
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 2010 and expires on October 15, 2013. As of December 31, 2012, issuances under the ATM (see definition below) share offering program are limited to 6.0 million additional shares. 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

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units (on a one-for-one preferred share per preference unit basis).
On November 28, 2012, 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 million Common 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 issuance under the ATM program as of December 31, 2012.
During the year ended December 31, 2007,2012, 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 CompanyATM program. Concurrent with these transactions, ERPOP issued an irrevocable noticeapproximately 3.2 million OP Units to redeem for cash all 230,000 units of its 7.625% Series J Preference Interests with a liquidation value of $11.5 million. This notice triggered the holder’s accelerated conversion right, which they exercised. As a result, the 230,000 units were converted into 324,484 Common Shares.

The following table presents the Operating Partnership’s issued and outstanding Junior Convertible Preference Units (the “Junior Preference Units”) as of December 31, 2009 and 2008:

         Amounts in thousands
  Redemption
Date		 Conversion
Rate		 Annual
Dividend
per Unit (1)		  December 31,
2009		 December 31,
2008

Junior Preference Units:

     

Series B Junior Convertible Preference Units; liquidation value $25 per unit; 0 and 7,367 units issued and outstanding at December 31, 2009 and December 31, 2008, respectively

 7/29/09 1.020408 $2.00 (2)  $—   $184
         
    $—   $184
         

(1)Dividends on the Junior Preference Units were payable quarterly at various pay dates.
(2)On July 30, 2009, the Operating Partnership elected to convert all 7,367 Series B Junior Preference Units into 7,517 OP Units. The actual preference unit dividends declared for the period outstanding in 2009 was $1.17 per unit.

EQR. During the year ended December 31, 2009,2011, 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, EQR repurchased 58,130 of its Common Shares at an average price of $32.46 per share for total consideration of $1.9 million. These shares were retired subsequent to the repurchases. Concurrent with these transactions, ERPOP repurchased and retired 58,130 OP Units previously issued to EQR. All of the shares repurchased during the year ended December 31, 2010 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.
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 31, 2010, the Operating Partnership issued 188,571 OP Units at a price of $39.15 per OP Unit for total valuation of $7.4 million as partial consideration for the acquisition of one rental property.
During the year ended December 31, 2012, the Company acquired all of its partners’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 fivethree consolidated partially owned properties consisting of 1,5871,351 apartment units for $9.2 million. In addition, the Company also acquired a portion of the outside partner interests in two partially owned properties, one funded using cash of $2.1$12.8 million and the other funded through the issuance of 32,061 OP Units valued at $0.8 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 $1.5$4.8 million and Noncontrolling Interests – Partially Owned Properties by $11.7 million.

$8.0 million.

During the year ended December 31, 2008,2010, the Company acquired all of its partners’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 consisting of 144 units for $5.9 million and three partially owned land parcels for $1.6 million. In addition, the Company made an additional payment of $1.3 million related to an April 2006 acquisition of a partner’s interest in a now wholly owned property, partiallybuyouts was funded through the issuance of 19,0171,129 OP Units valued at $0.8 million.

4. Real Estate$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.


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Table of Contents


4.Real Estate
The following table summarizes the carrying amounts for the Company’s investment in real estate (at cost) as of December 31, 20092012 and 20082011 (amounts in thousands):

   2009  2008 

Land

  $3,650,324   $3,671,299  

Depreciable property:

   

Buildings and improvements

   12,781,543    12,836,310  

Furniture, fixtures and equipment

   1,111,978    1,072,284  

Projects under development:

   

Land

   106,716    175,355  

Construction-in-progress

   562,263    680,118  

Land held for development:

   

Land

   181,430    205,757  

Construction-in-progress

   70,890    49,116  
         

Investment in real estate

   18,465,144    18,690,239  

Accumulated depreciation

   (3,877,564)   (3,561,300) 
         

Investment in real estate, net

  $14,587,580   $15,128,939  
         


  2012 2011
Land $4,554,912
 $4,367,816
Depreciable property:  
  
Buildings and improvements 14,368,179
 14,262,616
Furniture, fixtures and equipment 1,343,765
 1,292,124
Projects under development:  
  
Land 210,632
 75,646
Construction-in-progress 177,118
 84,544
Land held for development:  
  
Land 294,868
 299,096
Construction-in-progress 58,955
 26,104
Investment in real estate 21,008,429
 20,407,946
Accumulated depreciation (4,912,221) (4,539,583)
Investment in real estate, net $16,096,208
 $15,868,363

During the year ended December 31, 2009,2012, the Company acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands):

   Properties  Units  Purchase
Price

Rental Properties

  2  566  $145,036

Land Parcel (one)

  —    —     11,500
          

Total

  2  566  $156,536
          

The Company also acquired the 75% equity interest in one previously unconsolidated property it did not already own consisting of 250 units with a gross sales price of $18.5 million from its institutional joint venture partner.


 Properties Apartment Units Purchase Price
Rental Properties – Consolidated9
 1,896
 $906,305
Land Parcels (six)—
 —
 141,240
Total9
 1,896
 $1,047,545

During the year ended December 31, 2008,2011, the Company acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands):

   Properties  Units  Purchase
Price

Rental Properties

  7  2,141  $380,683

Uncompleted Developments

  —    —     31,705

Military Housing (1)

  1  978   —  
          

Total

  8  3,119  $412,388
          


 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)The Company assumed management of 978 housing units (828 units as of December 31, 2009)
Includes a vacant land parcel at McChord Air Force Base400 Park Avenue South in Washington state and invested $2.4 million towards its redevelopment. McChord AFB adjoins Ft. Lewis, a U.S. Army base at whichNew York City acquired jointly by the Company already manages 3,731 units (3,767 units asand Toll Brothers (NYSE: TOL). The Company's and Toll Brothers' allocated portions of December 31, 2009)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, 2009,2012, the Company disposed of the following to unaffiliated parties (sales price in thousands):

   Properties  Units  Sales Price

Rental Properties:

      

Consolidated

  54  11,055  $905,219

Unconsolidated (1)

  6  1,434   96,018

Condominium Conversion Properties

  1  62   12,021
          

Total

  61  12,551  $1,013,258
          

(1)The Company owned a 25% interest in these unconsolidated rental properties. Sales price listed is the gross sales price. The Company’s buyout of its partner’s interest in one previously unconsolidated property is not included in the above totals.


 Properties Apartment Units Sales Price
Rental Properties – Consolidated35
 9,012
 $1,061,334
Total35
 9,012
 $1,061,334

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Table of Contents

The Company recognized a net gain on sales of discontinued operations of approximately $335.3$548.3 million and a net gain on sales of unconsolidated entities of approximately $10.7 million on the above sales.


During the year ended December 31, 2008,2011, the Company disposed of the following to unaffiliated parties (sales price in thousands):

   Properties  Units  Sales Price

Rental Properties:

      

Consolidated

  38  9,457  $862,099

Unconsolidated (1)

  3  670   34,600

Condominium Conversion Properties

  4  130   26,101

Land Parcel (one)

  —    —     3,300
          

Total

  45  10,257  $926,100
          


 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)TheRepresents the sale of a land parcel, on which the Company owned a 25% interestno longer planned to develop, in these unconsolidated rental properties. Sales price listed is the gross sales price.suburban Washington, D.C.

The Company recognized a net gain on sales of discontinued operations of approximately $392.9$826.5 million a net gain on sales of unconsolidated entities of approximately $2.9 million and a net gain on sales of land parcels of approximately $3.0$4.2 million on the above sales.

5.Commitments to Acquire/Dispose of Real Estate
5. CommitmentsThe Company and AvalonBay Communities, Inc. (NYSE: AVB) entered into an agreement to Acquire/Disposeacquire the assets and liabilities of Real Estate

AsArchstone Enterprise LP, of the date of this filing, in addition to the properties that were subsequently acquired as discussed in Note 21,which the Company hadwill 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 two rental properties consisting of 852 units for $309.7 million.

As of the date of this filing,following (purchase price in thousands):

 Properties Apartment Units Purchase Price
Land Parcels (three)—
 —
 $45,500
Total—
 —
 $45,500
In addition to the properties that were subsequently disposed of as discussed in Note 21,18, the Company hadhas entered into separate agreements to dispose of the following (sales price in thousands):

   Properties  Units  Sales Price

Rental Properties:

      

Consolidated

  18  2,268  $191,501

Unconsolidated

  1  216   10,700
          

Total

  19  2,484  $202,201
          

 Properties Apartment Units Sales Price
Rental Properties50
 13,772
 $1,983,960
Land Parcel (one)—
 —
 29,000
Total50
 13,772
 $2,012,960
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
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 table summarizestables and information summarize the Company’s investments in partially owned entities as of December 31, 20092012 (amounts in thousands except for project and apartment unit amounts):

   Consolidated  Unconsolidated
   Development Projects         
   Held for
and/or
Under
Development		  Completed,
Not
Stabilized (4)		  Completed
and
Stabilized		  Other  Total  Institutional
Joint
Ventures (5)

Total projects (1)

   —     3   3   21   27   34
                        

Total units (1)

   —     1,024   710   3,796   5,530   8,086
                        

Debt – Secured (2):

            

EQR Ownership (3)

  $303,253  $218,965  $113,385  $219,136  $854,739  $101,809

Noncontrolling Ownership

   —     —     —     82,732   82,732   305,426
                        

Total (at 100%)

  $303,253  $218,965  $113,385  $301,868  $937,471  $407,235
                        



F-35
Table of Contents

  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


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Table of Contents

  Consolidated Unconsolidated
  Development Projects      
  
Held for
and/or Under
Development (4)
 Other Total Institutional Joint Ventures (5)
Operating information for the year
ended 12/31/12 (at 100%):
  
  
  
  
Operating revenue $—
 $62,405
 $62,405
 $7
Operating expenses 170
 19,480
 19,650
 244
Net operating (loss) income (170) 42,925
 42,755
 (237)
Depreciation —
 15,346
 15,346
 —
General and administrative/other 213
 157
 370
 —
Operating (loss) income (383) 27,422
 27,039
 (237)
Interest and other income 2
 100
 102
 —
Other expenses (264) —
 (264) —
Interest:        
Expense incurred, net —
 (9,386) (9,386) —
Amortization of deferred financing costs —
 (160) (160) —
(Loss) income before income and other taxes and net
    gain on sales of discontinued operations
 (645) 17,976
 17,331
 (237)
Income and other tax (expense) benefit (25) (75) (100) —
Net gain on sales of discontinued operations 15
 —
 15
 —
Net (loss) income $(655) $17,901
 $17,246
 $(237)

(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 with the exception of $42.2 million in mortgage debt on various development projects. In addition, $66.0 million in mortgage debt on one development project will become recourse to the Company upon completion of that project.Company.
(3)Represents the Company’sCompany’s/Operating Partnership's current economicequity ownership interest.
(4)Projects included here are substantially complete. However, they may still require additional exterior and interior work for all units to be available for leasing.Includes 400 Park Avenue South in New York City which the Company is jointly developing with Toll Brothers.
(5)Unconsolidated debt maturities
These development projects (Nexus Sawgrass and rates forDomain) are owned 20% by the Company and 80% by an institutional partner in two separate unconsolidated joint venturesventures. Total project costs are as follows: $112.6approximately $232.8 million May 1, 2010, 8.33%; $121.0 million, December 1, 2010, 7.54%; $143.8 million, March 1, 2011, 6.95%; and $29.8 million, July 1, 2019, 5.305%. A portion of this mortgage debt is also partially collateralized by $42.6 million in unconsolidated restricted cash set asideconstruction will be predominantly funded with two separate long-term, non-recourse secured loans from the net proceedspartner. 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 property sales. During$48.7 million and a current unconsolidated outstanding balance of $29.8 million; the third quarterloan bears interest at 5.60% and matures January 1, 2021. Domain has a maximum debt commitment of 2009,$98.6 million and a current unconsolidated outstanding balance of $46.9 million; the Company acquired its partner’sloan bears interest in one of the previously unconsolidated properties containing 250 units for $18.5 millionat 5.75% and as a result, the project is now consolidated and wholly owned.matures January 1, 2022.

7. Deposits – RestrictedDuring 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.

The Company is the controlling partner in various consolidated partnership properties and development properties having a noncontrolling interest book value of $77.7 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. The Company does not have any unconsolidated VIEs.

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 million and $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). 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 million and $75.7 million, respectively, which included the land purchase noted above, restricted deposits and taxes and fees. As of December 31, 2012, the Company's and Toll Brothers' consolidated contributions to the joint venture were approximately $203.5 million, of which Toll Brothers' noncontrolling interest balance totaled $84.0 million.

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

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other in August 2011), each owning a developable land parcel, in exchange for $40.1 million in cash and retained a 20% equity interest in both of these entities. These land parcels are now unconsolidated. 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. While the Company is the managing member of both of the joint ventures, is 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 the partner has significant involvement in and oversight of the ongoing projects, neither of which is a VIE. The Company currently has no further funding obligations related to these projects.

7.
Deposits –Restricted
The following table presents the Company’s restricted deposits as of December 31, 20092012 and 20082011 (amounts in thousands):

   December 31,
2009		  December 31,
2008

Tax–deferred (1031) exchange proceeds

  $244,257  $—  

Earnest money on pending acquisitions

   6,000   1,200

Restricted deposits on debt (1)

   49,565   96,229

Resident security and utility deposits

   39,361   41,478

Other

   12,825   13,825
        

Totals

  $352,008  $152,732
        


  December 31, 2012 December 31, 2011
Tax – deferred (1031) exchange proceeds $152,182
 $53,668
Earnest money on pending acquisitions 5,613
 7,882
Restricted deposits on debt —
 2,370
Restricted deposits on real estate investments 44,209
 43,970
Resident security and utility deposits 44,199
 40,403
Other 4,239
 3,944
Totals $250,442
 $152,237

(1)Primarily represents amounts held in escrow by the lender and released as draw requests are made on fully funded development mortgage loans.
8.Debt

8. 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's revolving credit facility up to the maximum amount and for the full term of the facility.

Mortgage Notes Payable

As of December 31, 2009,2012, the Company had outstanding mortgage debt of approximately $4.8 billion.

$3.9 billion.

During the year ended December 31, 2009,2012, the Company:

▪
Repaid $364.3 million of mortgage loans;
▪
Obtained $26.5 million of new mortgage loan proceeds; and
▪
Assumed $137.6 million of mortgage debt on two acquired properties.

Repaid $956.8The Company recorded approximately $0.3 million and $1.6 million of mortgage loans;

Obtained $500.0 million of mortgage loan proceeds through the issuance of an 11-year cross-collateralized loan with an all-in fixed interest rate for 10 years at approximately 5.6% secured by 13 properties;

Obtained $40.0 million of new mortgage loans to accommodate the delayed sale of two properties that closed in January 2010;

Obtained $198.8 million of new mortgage loans on development properties;

Recognized a gain on early debt extinguishment of $2.4 millionprepayment penalties and wrote-off approximately $1.1 millionwrite-offs of unamortized deferred financing costs; and

Was released from $17.3 millioncosts, respectively, during the year ended December 31, 2012 as additional interest expense related to debt extinguishment of mortgage debt assumed by the purchaser on two disposed properties.

mortgages.

As of December 31, 2009,2012, the Company had $362.2 million of secured debt subject to third party credit enhancement.
As of December 31, 2012, scheduled maturities for the Company’s outstanding mortgage indebtedness were at various dates through September 1, 2048.June 15, 2051. At December 31, 2009,2012, the interest rate range on the Company’s mortgage debt was 0.20%0.11% to 12.465%11.25%. During the year ended December 31, 2009,2012, the weighted average interest rate on the Company’s mortgage debt was 4.89%4.96%.

The historical cost, net of accumulated depreciation, of encumbered properties was $5.8$4.4 billion and $6.5$4.9 billion at December 31, 20092012 and 2008,2011, respectively.

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

Year

    Total
2010   $110,817
2011    758,850
2012    268,146
2013    167,361
2014    18,409
Thereafter    3,459,863
     
Total   $4,783,446
     

As of December 31, 2008,2011, the Company had outstanding mortgage debt of approximately $5.0 billion.

$4.1 billion.


During the year ended December 31, 2008,2011, the Company:

▪
Repaid $991.7 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.

Repaid $435.4 million of mortgage loans;

Assumed $24.9 million of mortgage debt on an uncompleted development property in connection with its acquisition;

Obtained $500.0 million of mortgage loan proceeds through the issuance of an 11.5 year cross-collateralized loan with a fixed stated interest rate for 10.5 years at 5.19% secured by 13 properties;

Obtained $550.0 million of mortgage loan proceeds through the issuance of an 11.5 year cross-collateralized loan with a fixed stated interest rate for 10.5 years at approximately 6% secured by 15 properties;

Obtained $543.0 million of mortgage loan proceeds through the issuance of an 8 year cross-collateralized loan with a fixed stated interest rate for 7 years at approximately 6% secured by 18 properties; and

Obtained an additional $248.5 million of new mortgage loans primarily on development properties.

The Company recorded approximately $81,000 and $131,000$4.4 million of prepayment penalties and write-offs of unamortized deferred financing costs respectively,during the year

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ended December 31, 2011 as additional interest expense related to debt extinguishment of mortgages during the year ended mortgages.
As of December 31, 2008.

2011, the Company had $455.6 million of secured debt subject to third party credit enhancement.

As of December 31, 2008,2011, scheduled maturities for the Company’s outstanding mortgage indebtedness were at various dates through September 1, 2048.2048. At December 31, 2008,2011, the interest rate range on the Company’s mortgage debt was 0.60%0.05% to 12.465%11.25%. During the year ended December 31, 2008,2011, the weighted average interest rate on the Company’s mortgage debt was 5.18%4.84%.


Notes
9. 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, 20092012 and 2008,2011, respectively:

December 31, 2009

(Amounts are in thousands)

  Net
Principal
Balance		  Interest
Rate
Ranges		 Weighted
Average
Interest Rate		 Maturity
Date
Ranges

Fixed Rate Public/Private Notes (1)

  $3,771,700  3.85% - 7.57% 5.93% 2011 - 2026

Floating Rate Public/Private Notes (1)

   801,824  (1) 1.37% 2010 - 2013

Floating Rate Tax-Exempt Bonds

   35,600  (2) 0.37% 2028
        

Totals

  $4,609,124    
        

December 31, 2008

(Amounts are in thousands)

  Net
Principal
Balance		  Interest
Rate
Ranges		 Weighted
Average
Interest Rate		 Maturity
Date
Ranges

Fixed Rate Public/Private Notes (1)

  $4,684,068  3.85% - 7.57% 5.69% 2009 - 2026

Floating Rate Public/Private Notes (1)

   651,554  (1) 3.89% 2009 - 2010

Fixed Rate Tax-Exempt Bonds

   75,790  5.20% 5.07% 2029

Floating Rate Tax-Exempt Bonds

   35,600  (2) 1.05% 2028
        

Totals

  $5,447,012    
        

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, 2011
(Amounts are 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
Floating Rate Public/Private Notes (1) 806,383
 (1) 1.67% 2012 - 2013
Totals $5,609,574
      

(1)
At December 31, 2009, $300.02012 and 2011, $300.0 million in fair value interest rate swaps converts a portion of the $400.0$400.0 million face value 5.200% notes due April 1, 2013 to a floating interest rate. At December 31, 2008, $150.0 million in fair value interest rate swaps converted a portion of the $227.4 million face value 4.750% notes due June 15, 2009 to a floating interest rate.
(2)The floating interest rate is based on the 7-Day Securities Industry and Financial Markets Association (“SIFMA”) rate, which is the tax-exempt index equivalent of LIBOR. The interest rate is 0.27% and 0.75% at December 31, 2009 and 2008, respectively.

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, 20092012 and 2008.

As of December 31, 2009, an2011.

An unlimited amount of equity and debt securities remains available for issuance by the Operating PartnershipEQR and ERPOP under a universal shelf registration statement that became automatically effective upon filing with the SEC in December 2008 (under SEC regulations enacted in 2005, the registration statement automaticallyOctober 2010 and expires on December 21, 2011 and does not containOctober 15, 2013. 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 maximum issuance amount)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, 2009,2012, the Company:

Repurchased at par $105.2 million of its 4.75% fixed rate public notes due June 15, 2009 pursuant to a cash tender offer announced on January 16, 2009 and wrote-off approximately $79,000 of unamortized deferred financing costs and approximately $46,000 of unamortized discounts on notes payable;

Repaid the remaining $122.2 million of its 4.75% fixed rate public notes at maturity;

Repurchased at par $185.2 million of its 6.95% fixed rate public notes due March 2, 2011 pursuant to a cash tender offer announced on January 16, 2009 and wrote-off approximately $0.4 million of unamortized deferred financing costs and approximately $1.0 million of unamortized discounts on notes payable;

Repurchased $21.7 million of its 6.95% fixed rate public notes due March 2, 2011 at a price of 106% of par pursuant to a cash tender offer announced on December 2, 2009, recognized a loss on early debt extinguishment of $1.3 million and wrote-off approximately $0.2 million of unamortized net premiums on notes payable;

Repurchased $146.1 million of its 6.625% fixed rate public notes due March 15, 2012 at a price of 108% of par pursuant to a cash tender offer announced on December 2, 2009, recognized a loss on early debt extinguishment of $11.7 million and wrote-off approximately $0.3 million of unamortized deferred financing costs and approximately $0.2 million of unamortized net discounts on notes payable;

Repurchased $127.9 million of its 5.50% fixed rate public notes due October 1, 2012 at a price of 107% of par pursuant to a cash tender offer announced on December 2, 2009, recognized a loss on early debt extinguishment of $9.0 million and wrote-off approximately $0.5 million of unamortized deferred financing costs and approximately $0.4 million of unamortized discounts on notes payable;

Repurchased $75.8 million of its 5.20% fixed rate tax-exempt notes and wrote-off approximately $0.7 million of unamortized deferred financing costs;

Repurchased $17.5 million of its 3.85% convertible fixed rate public notes due August 15, 2026 at a price of 88.4% of par and recognized a gain on early debt extinguishment of $2.0 million and wrote-off

▪
Repaid $253.9 million of 6.625% unsecured notes at maturity;
▪
Repaid $222.1 million of 5.500% unsecured notes at maturity;
▪
Repaid its $500.0 million term loan facility at maturity; and
▪
Entered into a new senior unsecured $500.0 million delayed draw term loan facility that could have been drawn anytime on or before July 4, 2012. The Company elected not to draw on this facility and subject to the terms of the agreement, the facility expired undrawn. The Company recorded approximately $0.1$1.0 million of write-offs of unamortized deferred financing costs and approximately $0.8 million of unamortized discounts on notes payable; and

at termination.

Repurchased at par $48.5During 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 resulting in a maturity date of October 5, 2012;
▪
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

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Table of its 3.85% convertible fixed rate public notes due August 15, 2026 pursuantContents

6.2% after termination of various forward starting swaps in conjunction with the issuance (see Note 9 for further discussion).
On 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 billion to finance the acquisition of 60% of the assets and liabilities of Archstone Enterprise LP ("Archstone"), a cash tender offer announcedprivately-held owner, operator and developer of multifamily apartment properties (see Note 18 for further discussion). The Company incurred fees totaling $16.3 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 2, 2009 and wrote-off approximately $0.32011, 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 of unamortized to structure this facility, which were recorded as deferred financing costs and approximately $1.5amortized in 2011. On January 6, 2012, the Company terminated this $1.0 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 of unamortized discounts on notes payable.

 delayed draw term loan facility discussed above.

During the year ended December 31, 2008, the Company:

Repurchased $72.6 million of its 4.75% fixed rate public notes due June 15, 2009 at a price of 99.0% of par and recognized debt extinguishment gains of $0.7 million and wrote-off approximately $0.1 million of unamortized deferred financing costs;

Repurchased $101.4 million of its 3.85% convertible fixed rate public notes due August 15, 2026 at a price of 82.3% of par and recognized debt extinguishment gains of $18.0 million and wrote-off approximately $0.8 million of unamortized deferred financing costs; and

Repaid $130.0 million of fixed rate private notes at maturity.

On October 11, 2007, the Operating PartnershipCompany closed on a $500.0$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. The Company paid off this term loan at maturity. The loan matures on October 5, 2010, subject to two one-year extension options exercisable by the Operating Partnership. The Operating Partnership has the ability to increase available borrowings by an additional $250.0 million under certain circumstances. Advances under the loan bearbore interest at variable rates based upon LIBOR plus a spread (currently (0.50%) dependent upon the current credit rating on the Operating Partnership’sCompany’s long-term senior unsecured debt. EQR has guaranteed the Operating Partnership’s term loan up to the maximum amount and for the full term of the loan.


On August 23, 2006, the Operating PartnershipCompany issued $650.0$650.0 million of exchangeable senior notes that were to mature on August 15, 2026. Following the repurchases discussed above, the notes had a face value of $482.5 million at December 31, 2009.2026. The notes bearbore interest at a fixed rate of 3.85%. The notes arewere exchangeable into EQR Common Shares, at the option of the holders, under specific circumstances or on or after August 15, 2025, at an initial exchange rate of 16.3934 shares per $1,000$1,000 principal amount of notes (equivalent to an initial exchange price of $61.00$61.00 per share). The initial exchange rate is subject to adjustment in certain circumstances, including upon an increase in the Company’s dividend rate. Upon an exchange of the notes,On August 18, 2011 (the "Redemption Date"), the Operating Partnership will settle any amounts upredeemed 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 notes in cash and the remaining exchange value, if any, will be settled, at the Operating Partnership’s option, in cash, EQR Common Shares or a combination of both.Redemption Date. See Note 2 for more information on the change in the recognition of interest expense for the exchangeable seniorthese notes.

On or after August 18,


Lines of Credit

In July 2011, the Operating Partnership may redeem the notes atCompany replaced its then existing unsecured revolving credit facility with a redemption price equal to the principal amount of the notes plus any accrued and unpaid interest thereon. Upon notice of redemption by the Operating Partnership, the holders may elect to exercise their exchange rights. In addition, on August 18, 2011, August 15, 2016 and August 15, 2021 or following the occurrence of certain change in control transactions prior to August 18, 2011, note holders may require the Operating Partnership to repurchase the notes for an amount equal to the principal amount of the notes plus any accrued and unpaid interest thereon.

Note holders may also require an exchange of the notes should the closing sale price of Common Shares exceed 130% of the exchange price for a certain period of time or should the trading price on the notes be less than 98% of the product of the closing sales price of Common Shares multiplied by the applicable exchange rate for a certain period of time.

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

Year

     Total (1)
      2010 (2)   $491,616
      2011 (3)    569,229
2012    474,685
2013    400,810
2014    499,034
Thereafter    2,173,750
     
Total   $4,609,124
     

(1)Principal payments on unsecured notes include amortization of any discounts or premiums related to the notes. Premiums and discounts are amortized over the life of the unsecured notes.

(2)Includes the $500.0 million term loan, which matures on October 5, 2010, subject to two one-year extension options exercisable by the Operating Partnership.
(3)Includes $482.5 million face value of 3.85% convertible unsecured debt with a final maturity of 2026.

new 10. Lines of Credit$1.25 billion

The Operating Partnership has a $1.5 billion unsecured revolving credit facility maturing on February 28, 2012, withJuly 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. AdvancesOn January 6, 2012, the Company amended this credit facility to increase available borrowings by an additional $500.0 million to $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 bear interest at variable rates based uponwas generally LIBOR at various interest periods plus a spread (currently 0.50%(1.15%) and the Company paid an annual facility fee of 0.2%. Both the spread and the facility fee were dependent uponon the Operating Partnership’s credit rating or based on bids received from the lending group. EQR has guaranteed the Operating Partnership’s credit facility up to the maximum amount and for the full term of the facility.

DuringCompany's long-term debt. See Note 18 for discussion on the year ended December 31, 2008, oneCompany's replacement of the providers of the Operating Partnership’sthis unsecured revolving credit facility. The facility declared bankruptcy. Underhad replaced the existing terms ofCompany's previous $1.425 billion facility which was scheduled to mature in February 2012. The Company wrote-off $0.2 million in unamortized deferred financing costs related to the credit facility, the provider’s share is up to $75.0 million of potential borrowings. As a result, the Operating Partnership’s borrowing capacity under the unsecured revolving credit facility has, in essence, been permanently reduced to $1.425 billion of potential borrowings. The obligation to fund by all of the other providers has not changed.

old facility.


As of December 31, 2009,2012, the amount available on the credit facility was $1.37$1.72 billion (net of $56.7$30.2 million which was restricted/dedicated to support letters of creditcredit) and net ofthere was no amount outstanding. See Note 18 for amounts available on the $75.0 million discussed above). The Company did not draw and had no balance outstanding on its revolving credit facility at any time duringCompany's replacement facility. During the year ended December 31, 2009.2012, the weighted average interest rate was 1.35%. As of December 31, 2008,2011, the amount available on the credit facility was $1.29$1.22 billion (net of $130.0$31.8 million which was restricted/dedicated to support letters of creditcredit) and net of the $75.0 million discussed above).there was no amount outstanding. During the year ended December 31, 2008,2011, the weighted average interest rate was 4.31%1.42%.


Other

11. DerivativeThe following table provides a summary of the aggregate payments of principal on all debt for each of the next five years and Other Fair Value Instrumentsthereafter (amounts in thousands):


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Table of Contents

Year Total (1)
2013 $526,310
2014 586,323
2015 417,812
2016 1,190,538
2017 1,446,576
Thereafter 4,341,101
Net Unamortized Premium 20,584
Total $8,529,244

(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 $4.8$3.9 billion and $4.6$4.6 billion, respectively, at December 31, 2009.2012. The fair values of the Company’s mortgage notes payable and unsecured notes were approximately $4.6$4.3 billion (Level 2) and $4.7$5.2 billion (Level 2), respectively, at December 31, 2009.2012. The carrying values of the Company’s mortgage notes payable and unsecured notes were approximately $5.0$4.1 billion and $5.4$5.6 billion, respectively, at December 31, 2008.2011. The fair values of the Company’s mortgage notes payable and unsecured notes were approximately $5.0$4.3 billion (Level 2) and $4.7$6.0 billion (Level 2), respectively, at December 31, 2008.2011. The fair values of the Company’s financial instruments other(other than mortgage notes payable, unsecured notes, derivative instruments and investment securities,securities), including cash and cash equivalents lines of credit 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 limitmanage 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, 20092012 (dollar amounts are in thousands):

   Fair Value
Hedges (1)		  Forward
Starting
Swaps (2)		  Development
Cash Flow
Hedges (3)		 

Current Notional Balance

  $315,693   $700,000   $58,367  

Lowest Possible Notional

  $315,693   $700,000   $3,020  

Highest Possible Notional

  $317,694   $700,000   $91,343  

Lowest Interest Rate

   2.009%   4.005%   4.059% 

Highest Interest Rate

   4.800%   4.695%   4.059% 

Earliest Maturity Date

   2012    2021    2011  

Latest Maturity Date

   2013    2023    2011  

 
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 – ConvertConverts 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 2012,2014, and are targeted to 2013 and 2014.issuances.
(3)Development Cash Flow Hedges – Convert outstanding floating rate debt to a fixed interest rate.

The following tables provide

In June 2011, the location of the Company’s derivative instruments within the accompanying Consolidated Balance Sheets and their fair market values as of December 31, 2009 and 2008, respectively (amounts in thousands):

   Asset Derivatives  Liability Derivatives 

December 31, 2009

  Balance Sheet
Location		  Fair Value  Balance Sheet
Location		  Fair Value 

Derivatives designated as hedging instruments:

        

Interest Rate Contracts:

        

Fair Value Hedges

  Other assets  $5,186  Other liabilities  $—    

Forward Starting Swaps

  Other assets   23,630  Other liabilities   —    

Development Cash Flow Hedges

  Other assets   —    Other liabilities   (3,577) 
             

Total

    $28,816    $(3,577) 
             
   Asset Derivatives  Liability Derivatives 

December 31, 2008

  Balance Sheet
Location		  Fair Value  Balance Sheet
Location		  Fair Value 

Derivatives designated as hedging instruments:

        

Interest Rate Contracts:

        

Fair Value Hedges

  Other assets  $6,802  Other liabilities  $—    

Forward Starting Swaps

  Other assets   —    Other liabilities   —    

Development Cash Flow Hedges

  Other assets   5  Other liabilities   (6,826) 
             

Total

    $6,807    $(6,826) 
             

The following tables provide a summary of the effect of fair value hedges on the Company’s accompanying Consolidated Statements of Operations for the years ended December 31, 2009 and 2008, respectively (amounts in thousands):

December 31, 2009

Type of Fair Value Hedge

  Location of Gain/(Loss)
Recognized in Income
on Derivative		  Amount of Gain/(Loss)
Recognized in Income
on Derivative		  Hedged Item  Income Statement
Location of Hedged
Item Gain/(Loss)		  Amount of Gain/(Loss)
Recognized in Income
on Hedged Item		 

Derivatives designated as hedging instruments:

         

Interest Rate Contracts:

         

Interest Rate Swaps

  Interest expense  $(1,167)  Fixed rate debt  Interest expense  $1,167  
               

Total

    $(1,167)      $1,167  
               

December 31, 2008

Type of Fair Value Hedge

  Location of Gain/(Loss)
Recognized in Income
on Derivative		  Amount of Gain/(Loss)
Recognized in Income
on Derivative		  Hedged Item  Income Statement
Location of Hedged
Item Gain/(Loss)		  Amount of Gain/(Loss)
Recognized in Income
on Hedged Item		 

Derivatives designated as hedging instruments:

         

Interest Rate Contracts:

         

Interest Rate Swaps

  Interest expense  $8,117   Fixed rate debt  Interest expense  $(8,117) 
               

Total

    $8,117       $(8,117) 
               

The following tables provide a summary of the effect ofCompany's remaining development cash flow hedges on the Company’s accompanying Consolidated Statements of Operations for the years ended December 31, 2009 and 2008, respectively (amounts in thousands):

   Effective Portion  Ineffective Portion 

December 31, 2009

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

  $34,432   Interest expense  $(3,724)  N/A  $—    

Development Interest Rate Swaps/Caps

   3,244   Interest expense   —     N/A   —    
                 

Total

  $37,676     $(3,724)    $—    
                 
   Effective Portion  Ineffective Portion 

December 31, 2008

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 ashedging instruments:

        

Interest Rate Contracts:

        

Forward Starting Swaps/Treasury Locks

  $(19,216)  Interest expense  $(2,696)  N/A  $(371) 

Development Interest Rate Swaps/Caps

   (4,971)  Interest expense   (29)  N/A   —    
                 

Total

  $(24,187)    $(2,725)    $(371) 
                 

As of December 31, 2009, there were approximately $4.2 million in deferred gains, net, included in accumulated other comprehensive income. Based on the estimated fair values of the net derivative instruments at December 31, 2009, the Company may recognize an estimated $5.8 million of accumulated other comprehensive income as additional interest expense during the year ending December 31, 2010.

In January 2009, the Company received approximately $0.4 million to terminate a fair value hedge of interest rates in conjunction with the public tender of the Company’s 4.75% fixed rate public notes due June 15, 2009. Approximately $0.2 million of the settlement received was deferred and recognized as a reduction of interest expense through the maturity on June 15, 2009.

In April and May 2009, the Company received approximately $10.8 million to terminate six treasury locks in conjunction with the issuance of a $500.0 million 11-year mortgage loan. The entire amount was deferred as a component of accumulated other comprehensive income and is recognized as a reduction of interest expense over the first ten years of the mortgage loan.

In February 2008, the Company paid approximately $13.2 million to terminate three forward starting swaps in conjunction with the issuance of a $500.0 million 11.5-year mortgage loan. The entire amount was deferred as a component of accumulated other comprehensive loss and is recognized as an increase to interest expense over the first ten years of the mortgage loan.

In November 2008, the Company paid approximately $13.5 million to terminate six forward starting swaps in conjunction with the issuance of a $543.0 million 8-year mortgage loan. Approximately $13.1 million of the settlement payment was deferred as a component of accumulated other comprehensive loss and is recognized as an increase to interest expense over the life of the underlying hedged item.

The Company has invested in various investment securities in an effort to increase the amounts earned on the significant amount of unrestricted cash on hand throughout 2008 and 2009. During the year ended December 31, 2009, the Company sold a majority of its investment securities, receiving proceeds of approximately $215.8 million, and recorded a $4.9 million realized gain on sale (specific identification) which is included in interest and other income. 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, 2009 and 2008, respectively (amounts in thousands):

      Other Assets   

December 31, 2009

Security

  Maturity  Amortized
Cost		  Unrealized
Gains		  Unrealized
Losses		  Book/
Fair Value		  Interest and
Other Income

Held-to-Maturity

            

FDIC-insured promissory notes

  Less than one year  $—    $—    $—    $—    $458
                      

Total Held-to-Maturity

     —     —     —     —     458

Available-for-Sale

            

FDIC-insured certificates of deposit

  Less than one year   25,000   93   —     25,093   491

Other

  Between one and five years or N/A   675   370   —     1,045   7,754
                      

Total Available-for-Sale

     25,675   463   —     26,138   8,245
                      

Grand Total

    $25,675  $463  $—    $26,138  $8,703
                      
      Other Assets   

December 31, 2008

Security

  Maturity  Amortized
Cost		  Unrealized
Gains		  Unrealized
Losses		  Book/
Fair Value		  Interest and
Other Income

Held-to-Maturity

            

FDIC-insured promissory notes

  Less than one year  $75,000  $—    $—    $75,000  $21
                      

Total Held-to-Maturity

     75,000   —     —     75,000   21

Available-for-Sale

            

FDIC-insured certificates of deposit

  Less than one year   54,000   301   —     54,301   305

Other

  Between one and five years or N/A   28,001   1,531   —     29,532   638
                      

Total Available-for-Sale

     82,001   1,832   —     83,833   943
                      

Grand Total

    $157,001  $1,832  $—    $158,833  $964
                      

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
Table of Contents

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) and are classified within Level 2 of the valuation hierarchy. In addition, employee. Employee holdings other than EQR Common Shares within the supplemental executive retirement plan (the “SERP”) have a fair value of $61.1 million as of December 31, 2009are valued using quoted market prices for identical assets and are included in other assets and other liabilities on the consolidated balance sheet. These SERP investments are valued using quoted market prices for identical assets and are classified within Level 1 of the valuation hierarchy.

The Company’s investment securities are valued using quoted market prices or readily available market interest rate data. The quoted market prices are classified within Level 1 of the valuation hierarchy and the market interest rate data are classified within Level 2 of the valuation hierarchy. Redeemable Noncontrolling Interests – Operating PartnershipPartnership/Redeemable Limited Partners are valued using the quoted market price of EQR Common SharesShares. The fair values disclosed for mortgage notes payable and are classified within Level 2unsecured notes were calculated using indicative rates provided by lenders of similar loans in the case of mortgage notes payable and the private unsecured notes and quoted market prices for each underlying issuance in the case of the valuation hierarchy.

public unsecured notes.

The Company’s real estate asset impairment charge was the result of an analysisfollowing tables provide a summary of the parcel’s fair value (determined using internally developed models that were based on market assumptionsmeasurements for each major category of assets and comparable sales data) (Level

3) compared to its current capitalized carrying value. The valuation technique used to measureliabilities measured at fair value on a recurring basis and the location within the accompanying Consolidated Balance Sheets at December 31, 2012 and 2011, 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-42
Table of Contents

      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 12/31/2011 (Level 1) (Level 2) (Level 3)
Assets          
Derivatives designated as hedging instruments:         
   Interest Rate Contracts:         
      Fair Value Hedges Other Assets $8,972
 $—
 $8,972
 $—
Supplemental Executive Retirement PlanOther Assets 71,426
 71,426
 —
 —
Available-for-Sale Investment SecuritiesOther Assets 1,550
 1,550
 —
 —
Total   $81,948
 $72,976
 $8,972
 $—
           
Liabilities          
Derivatives designated as hedging instruments:         
   Interest Rate Contracts:         
      Forward Starting SwapsOther Liabilities $32,278
 $—
 $32,278
 $—
Supplemental Executive Retirement PlanOther Liabilities 71,426
 71,426
 —
 —
Total   $103,704
 $71,426
 $32,278
 $—
           
Redeemable Noncontrolling Interests –         
   Operating Partnership/Redeemable         
      Limited PartnersMezzanine $416,404
 $—
 $416,404
 $—
The following tables provide a summary of the effect of fair value hedges on the Company’s accompanying Consolidated Statements of Operations for the years ended December 31, 2012, 2011 and 2010, 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-43
Table of Contents


The following tables provide a summary of the effect of cash flow hedges on the Company’s accompanying Consolidated Statements of Operations for the years ended December 31, 2012, 2011 and 2010, respectively (amounts in thousands):

  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
Type of Cash Flow Hedge     
Derivatives designated as hedging instruments:  
    
    
Interest Rate Contracts:  
    
    
Forward Starting Swaps/Treasury Locks $(11,772) Interest expense $(14,678) N/A $—
Total $(11,772)   $(14,678)   $—

  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
Type of Cash Flow Hedge     
Derivatives designated as hedging instruments:          
Interest Rate Contracts:          
Forward Starting Swaps/Treasury Locks $(145,090) Interest expense $(4,343) Interest expense $(170)
Development Interest Rate Swaps/Caps 1,322
 Interest expense —
 N/A —
Total $(143,768)   $(4,343)   $(170)

  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
Type of Cash Flow Hedge     
Derivatives designated as hedging instruments:          
Interest Rate Contracts:          
Forward Starting Swaps/Treasury Locks $(68,149) Interest expense $(3,338) N/A $—
Development Interest Rate Swaps/Caps 2,255
 Interest expense —
 N/A —
Total $(65,894)   $(3,338)   $—
As of December 31, 2012 and 2011, there were approximately $194.7 million and $197.6 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, 2012, the Company may recognize an estimated $18.9 million of accumulated other comprehensive (loss) as additional interest expense during the year ending December 31, 2013.
In December 2011, the Company paid approximately $153.2 million to settle various forward starting swaps in conjunction with the issuance of $1.0 billion of ten-year fixed rate public notes. The ineffective portion of $0.2 million and accrued interest of $5.9 million were recorded as interest expense. The remaining amount of $147.1 million will be deferred as a component of accumulated other comprehensive (loss) and is consistentrecognized as an increase to interest expense over the approximate term of the notes.
In July 2010, the Company paid approximately $10.0 million to settle a forward starting swap in conjunction with how similar assets were measuredthe 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 prior periods. See Note 19 for further discussion.

12. Earnings Per Sharethousands):


F-44
Table of Contents

    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):

   Year Ended December 31, 
   2009  2008  2007 

Numerator for net income per share – basic:

    

Income (loss) from continuing operations

  $28,031   $(12,823)  $21,053  

Allocation to Noncontrolling Interests – Operating Partnership, net

   (764)   1,861    643  

Net loss (income) attributable to Noncontrolling Interests – Partially Owned Properties

   558    (2,650)   (2,200) 

Net income attributable to Preference Interests and Units

   (9)   (15)   (441) 

Preferred distributions

   (14,479)   (14,507)   (22,792) 

Premium on redemption of Preferred Shares

   —      —      (6,154) 
             

Income (loss) from continuing operations available to Common Shares, net of Noncontrolling Interests

   13,337    (28,134)   (9,891) 

Discontinued operations, net of Noncontrolling Interests

   334,457    421,249    961,133  
             

Numerator for net income per share – basic

  $347,794   $393,115   $951,242  
             

Numerator for net income per share – diluted:

    

Income (loss) from continuing operations

  $28,031    

Net loss (income) attributable to Noncontrolling Interests – Partially Owned Properties

   558    

Net income attributable to Preference Interests and Units

   (9)   

Preferred distributions

   (14,479)   
       

Income (loss) from continuing operations available to Common Shares

   14,101    

Discontinued operations, net

   353,998    
       

Numerator for net income per share – diluted

  $368,099   $393,115   $951,242  
             

Denominator for net income per share – basic and diluted:

    

Denominator for net income per share – basic

   273,609    270,012    279,406  

Effect of dilutive securities:

    

OP Units

   15,558    

Long-term compensation award shares/units

   938    
       

Denominator for net income per share – diluted

   290,105    270,012    279,406  
             

Net income per share – basic

  $1.27   $1.46   $3.40  
             

Net income per share – diluted

  $1.27   $1.46   $3.40  
             

Net income per share – basic:

    

Income (loss) from continuing operations available to Common Shares, net of Noncontrolling Interests

  $0.049   $(0.104)  $(0.035) 

Discontinued operations, net of Noncontrolling Interests

   1.222    1.560    3.440  
             

Net income per share – basic

  $1.271   $1.456   $3.405  
             

Net income per share – diluted:

    

Income (loss) from continuing operations available to Common Shares

  $0.049   $(0.104)  $(0.035) 

Discontinued operations, net

   1.220    1.560    3.440  
             

Net income per share – diluted

  $1.269   $1.456   $3.405  
             

Potential common shares issuable from the assumed conversion



F-45
Table of OP Units and the exercise/vesting of long-term compensation award 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 years ended December 31, 2008 and 2007, respectively.

Contents


 Year Ended December 31,
 2012 2011 2010
Numerator for net income per share – basic: 
  
  
Income (loss) from continuing operations$311,555
 $57,794
 $(103,108)
Allocation to Noncontrolling Interests – Operating Partnership, net(13,178) (1,912) 5,419
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties(844) (832) 726
Preferred distributions(10,355) (13,865) (14,368)
Premium on redemption of Preferred Shares(5,152) —
 —
Income (loss) from continuing operations available to Common Shares, net of
  Noncontrolling Interests
282,026
 41,185
 (111,331)
Discontinued operations, net of Noncontrolling Interests544,186
 838,535
 380,573
Numerator for net income per share – basic$826,212
 $879,720
 $269,242
Numerator for net income per share – diluted (1):     
Income from continuing operations$311,555
 $57,794
  
Net (income) attributable to Noncontrolling Interests – Partially Owned Properties(844) (832)  
Preferred distributions(10,355) (13,865)  
Premium on redemption of Preferred Shares(5,152) —
  
Income from continuing operations available to Common Shares295,204
 43,097
  
Discontinued operations, net569,649
 877,403
  
Numerator for net income per share – diluted (1)$864,853
 $920,500
 $269,242
Denominator for net income per share – basic and diluted (1):     
Denominator for net income per share – basic302,701
 294,856
 282,888
Effect of dilutive securities:     
OP Units13,853
 13,206
  
Long-term compensation shares/units3,212
 4,003
  
Denominator for net income per share – diluted (1)319,766
 312,065
 282,888
Net income per share – basic$2.73
 $2.98
 $0.95
Net income per share – diluted$2.70
 $2.95
 $0.95
Net income per share – basic: 
  
  
Income (loss) from continuing operations available to Common Shares, net of
  Noncontrolling Interests
$0.932
 $0.140
 $(0.393)
Discontinued operations, net of Noncontrolling Interests1.797
 2.844
 1.345
Net income per share – basic$2.729
 $2.984
 $0.952
Net income per share – diluted (1): 
  
  
Income (loss) from continuing operations available to Common Shares$0.923
 $0.138
 $(0.393)
Discontinued operations, net1.782
 2.812
 1.345
Net income per share – diluted$2.705
 $2.950
 $0.952
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.
Convertible preferred shares/units that could be converted into 402,501, 427,0900, 0 and 652,534325,103 weighted average Common Shares for the years ended December 31, 2009, 20082012, 2011 and 2007,2010, 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 Operating Partnership’s $650.0Company’s $650.0 million ($482.5 million outstanding at December 31, 2009) 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 14.

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):

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 Year Ended December 31,
 2012 2011 2010
Numerator for net income per Unit – basic and diluted (1): 
  
  
Income (loss) from continuing operations$311,555
 $57,794
 $(103,108)
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties(844) (832) 726
Allocation to Preference Units(10,355) (13,865) (14,368)
Allocation to premium on redemption of Preference Units(5,152) —
 —
Income (loss) from continuing operations available to Units295,204
 43,097
 (116,750)
Discontinued operations, net569,649
 877,403
 399,091
Numerator for net income per Unit – basic and diluted (1)$864,853
 $920,500
 $282,341
Denominator for net income per Unit – basic and diluted (1):     
Denominator for net income per Unit – basic316,554
 308,062
 296,527
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
  
Denominator for net income per Unit – diluted (1)319,766
 312,065
 296,527
Net income per Unit – basic$2.73
 $2.98
 $0.95
Net income per Unit – diluted$2.70
 $2.95
 $0.95
Net income per Unit – basic: 
  
  
Income (loss) from continuing operations available to Units$0.932
 $0.140
 $(0.393)
Discontinued operations, net1.797
 2.844
 1.345
Net income per Unit – basic$2.729
 $2.984
 $0.952
Net income per Unit – diluted (1): 
  
  
Income (loss) from continuing operations available to Units$0.923
 $0.138
 $(0.393)
Discontinued operations, net1.782
 2.812
 1.345
Net income per Unit – diluted$2.705
 $2.950
 $0.952
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.
13. Discontinued OperationsConvertible 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 all operations related to active condominium conversion properties effective upon their respective transfer into a TRS and all properties held for sale, if any.

The components of discontinued operations are outlined below and include the results of operations for the respective periods that the Company owned such assets during each of the years ended December 31, 2009, 20082012, 2011 and 20072010 (amounts in thousands).

   Year Ended December 31, 
   2009  2008  2007 

REVENUES

    

Rental income

  $72,823   $173,243   $323,142  
             

Total revenues

   72,823    173,243    323,142  
             

EXPENSES (1)

    

Property and maintenance

   26,681    52,785    102,287  

Real estate taxes and insurance

   9,062    19,853    40,317  

Property management

   —      (62)   266  

Depreciation

   18,095    43,440    85,236  

General and administrative

   34    29    15  
             

Total expenses

   53,872    116,045    228,121  
             

Discontinued operating income

   18,951    57,198    95,021  

Interest and other income

   21    249    328  

Other expenses

   (1)   —      (3) 

Interest (2):

    

Expense incurred, net

   (1,104)   (2,897)   (7,591) 

Amortization of deferred financing costs

   (333)   (17)   (1,772) 

Income and other tax benefit (expense)

   1,165    1,846    7,307  
             

Discontinued operations

   18,699    56,379    93,290  

Net gain on sales of discontinued operations

   335,299    392,857    933,013  
             

Discontinued operations, net

  $353,998   $449,236   $1,026,303  
             



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 Year Ended December 31,
 2012 2011 2010
REVENUES 
  
  
Rental income$69,619
 $202,128
 $388,480
Total revenues69,619
 202,128
 388,480
      
EXPENSES (1) 
  
  
Property and maintenance19,575
 76,727
 143,158
Real estate taxes and insurance6,055
 17,061
 34,148
Property management211
 266
 230
Depreciation20,910
 51,037
 91,934
General and administrative77
 54
 42
Total expenses46,828
 145,145
 269,512
      
Discontinued operating income22,791
 56,983
 118,968
      
Interest and other income155
 196
 848
Other expenses(120) (265) (136)
Interest (2): 
  
  
Expense incurred, net(1,381) (5,163) (17,628)
Amortization of deferred financing costs(65) (1,080) (830)
Income and other tax (expense) benefit(9) 243
 (87)
      
Discontinued operations21,371
 50,914
 101,135
Net gain on sales of discontinued operations548,278
 826,489
 297,956
      
Discontinued operations, net$569,649
 $877,403
 $399,091

(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.

For the properties sold during 2009 (excluding condominium conversion properties)2012, the investment in real estate, net of accumulated depreciation, and the mortgage notes payable balances at December 31, 20082011 were $572.5$516.0 million and $38.9$87.4 million, respectively.

The


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 real estate basiscash proceeds of the Company’s active condominium conversion properties owned by the TRS and included in discontinued operations (excludes the Company’s halted conversions as they are now held for use), which were included in investment in real estate, net in the consolidated balance sheets, was $0.8 million and $12.6 million at December 31, 2009 and 2008, respectively.

such issuances.

14. Share Incentive Plans

On May 15, 2002,June 16, 2011, the shareholders of EQR approved the Company’s 2002 Share IncentiveCompany's 2011 Plan. The maximum aggregate number of awards that may be granted under this plan may not exceed 7.5%2011 Plan reserved 12,980,741 Common Shares for issuance. In conjunction with the approval of the Company’s outstanding Common Shares calculated on a “fully diluted” basis and determined annually on the first day of each calendar year. As of January 1, 2010, this amount equaled 22,091,629, of which 6,295,992 shares were available for future issuance. No2011 Plan, no further awards may be granted under the 2002 Share Incentive Plan. The 2011 Plan as restated, after February 20, 2012.

expires on June 16, 2021. As of December 31, 2012, 11,097,881 shares were available for future issuance.

Pursuant to the 2011 Plan, 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 shares (including performance-based awards), subject to conditions and restrictions as described in the Share Incentive Plans. In addition, each year prior to 2007, certain executive officers of the Company participated in the Company’s performance-based restricted share plan. Effective January 1, 2007, the Company elected to discontinue the award of new performance-based award grants. Options, SARs, restricted shares, 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. 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 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

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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.

Restricted shares that have been awarded through December 31, 20092012 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-yearthree-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 SharesShares/Units in a manner similar to the Company’s preferred shareshare/preference unit dividends for the earnings per shareshare/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 long-term incentive plan units (“LTIP 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 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 EQR 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 February 2009 grant of long-term incentive compensation for services provided during 2008,a year, officers of the Company wereare allowed to choose, on a one-for-one basis, between restricted shares and LTIP Units. In January 2011, certain holders of restricted shares converted these shares into LTIP Units. Similar to restricted shares, LTIP Units generally vest three years from the award date. In addition, LTIP Unit holders receive quarterly dividend payments on their LTIP Units at the same rate and on the same date as any other OP Unit holder. As a result, dividends paid on LTIP Units are included as a component of Noncontrolling Interests – Operating PartnershipPartnership/Limited Partners' capital and have not been considered in reducing net income available to Common SharesShares/Units in a manner similar to the Company’s preferred shareshare/preference unit dividends for the earnings per shareshare/Unit calculation. If employment is terminated prior to vesting, the LTIP Units are generally canceled. An LTIP Unit will automatically convert to an OP Unit when the capital account of each LTIP 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 Unit will automatically be canceled and no compensation will be payable to the holder of such canceled LTIP 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-year from the grant date that corresponds to the term for which he or she has been elected to serve. The Company’snon-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 at or after age 62. As of November 4, 2008, but effective as of January 1, 2009, the Company changed the definition of retirement for employees (including all officers but not non-employee members of the Company’s Board of Trustees) under its Share Incentive Plans.retirement. For employees hired prior to January 1, 2009, retirement generally will meanmeans 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 will meanmeans 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. John Powers, Executive Vice President – Human Resources, became eligible for

Under the Company's definitions of retirement, in 2009 as he turned 62. Frederick C. Tuomi, President – Property Management, became eligible for retirement under the Ruleseveral of 70 in 2009. The followingits executive officers, of the Company will become eligible for retirement under the Rule of 70 in the next two years: Bruce C. Strohm, Executive Vice President and General Counsel – 2010 and David J. Neithercut,including its Chief Executive Officer, and President – 2011.

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 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 wasis provided under the Share Incentive Plans prior to the adoption of the Rule of 70.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 newRule of 70 definition of retirement of employees, such employee’s unvested restricted shares, LTIP 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 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 Company’s Board of Trustees.

The following tables summarize compensation information regarding the performance shares, restricted shares, LTIP Units, share options and Employee Share Purchase Plan (“ESPP”) for the three years ended December 31, 2009, 20082012, 2011 and 20072010 (amounts in thousands):

   Year Ended December 31, 2009
   Compensation
Expense		  Compensation
Capitalized		  Compensation
Equity		  Dividends
Incurred

Performance shares

  $103   $76  $179   $—  

Restricted shares

   10,065    1,067   11,132    1,627

LTIP Units

   1,036    158   1,194    254

Share options

   5,458    538   5,996    —  

ESPP discount

   1,181    122   1,303    —  
                

Total

  $17,843   $1,961  $19,804   $1,881
                
   Year Ended December 31, 2008
   Compensation
Expense		  Compensation
Capitalized		  Compensation
Equity		  Dividends
Incurred

Performance shares

  $(8)  $—    $(8)  $—  

Restricted shares

   15,761    1,517   17,278    2,175

Share options

   5,361    485   5,846    —  

ESPP discount

   1,197    92   1,289    —  
                

Total

  $22,311   $2,094  $24,405   $2,175
                
   Year Ended December 31, 2007
   Compensation
Expense		  Compensation
Capitalized		  Compensation
Equity		  Dividends
Incurred

Performance shares

  $1,278   $—    $1,278   $—  

Restricted shares

   13,816    1,414   15,230    2,296

Share options

   4,922    423   5,345    —  

ESPP discount

   1,615    86   1,701    —  
                

Total

  $21,631   $1,923  $23,554   $2,296
                


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Table of Contents

 Year Ended December 31, 2012
 
Compensation
Expense
 
Compensation
Capitalized
 
Compensation
Equity
 
Dividends
Incurred
Restricted shares$8,014
 $922
 $8,936
 $949
LTIP Units5,004
 303
 5,307
 234
Share options10,970
 782
 11,752
 —
ESPP discount844
 121
 965
 —
Total$24,832
 $2,128
 $26,960
 $1,183

 Year Ended December 31, 2011
 
Compensation
Expense
 
Compensation
Capitalized
 
Compensation
Equity
 
Dividends
Incurred
Restricted shares$8,041
 $1,061
 $9,102
 $1,121
LTIP Units3,344
 297
 3,641
 199
Share options8,711
 834
 9,545
 —
ESPP discount1,081
 113
 1,194
 —
Total$21,177
 $2,305
 $23,482
 $1,320

 Year Ended December 31, 2010
 
Compensation
Expense
 
Compensation
Capitalized
 
Compensation
Equity
 
Dividends
Incurred
Restricted shares$8,603
 $1,178
 $9,781
 $1,334
LTIP Units2,334
 190
 2,524
 138
Share options6,707
 714
 7,421
 —
ESPP discount1,231
 59
 1,290
 —
Total$18,875
 $2,141
 $21,016
 $1,472
Compensation expense is generally recognized for Awards as follows:

Restricted shares, LTIP Units and share options – Straight-line method over the vesting period of the options or shares regardless of cliff or ratable vesting distinctions.

Performance shares – Accelerated method with each vesting tranche valued as a separate award, with a separate vesting date, consistent with the estimated value of the award at each period end.

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, 20092012 is $18.7$18.6 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 1.32.12 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, 2009, 20082012, 2011 and 2007:

  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

Balance at December 31, 2006

 9,415,787   $29.71 1,302,757   $34.85  

Awards granted (1)

 1,030,935   $53.46 453,580   $52.56  

Awards exercised/vested (2) (3)

 (1,040,765)  $27.00 (477,002)  $31.78  

Awards forfeited

 (166,585)  $44.88 (101,147)  $41.92  

Awards expired

 (54,231)  $36.45 —      —    
              

Balance at December 31, 2007

 9,185,141   $32.37 1,178,188   $42.30  

Awards granted (1)

 1,436,574   $38.46 524,983   $38.29  

Awards exercised/vested (2) (3)

 (995,129)  $24.75 (644,131)  $35.99  

Awards forfeited

 (113,786)  $43.95 (63,029)  $44.87  

Awards expired

 (39,541)  $35.91 —      —    
              

Balance at December 31, 2008

 9,473,259   $33.94 996,011   $44.16 —      —  

Awards granted (1)

 2,541,005   $23.08 362,997   $22.62 155,189   $21.11

Awards exercised/vested (2) (3)

 (422,713)  $21.62 (340,362)  $42.67 —      —  

Awards forfeited

 (146,151)  $30.07 (64,280)  $35.28 (573)  $21.11

Awards expired

 (95,650)  $32.21 —      —   —      —  
                  

Balance at December 31, 2009

 11,349,750   $32.03 954,366   $37.10 154,616   $21.11
                  

2010:

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Table of Contents

 
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
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
Awards granted (1)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
Awards forfeited(23,795) 
$51.55
 (12,728) 
$46.25
 —
 —
Awards expired(11,029) 
$35.53
 —
 —
 —
 —
Balance at December 31, 20128,115,255
 
$41.31
 524,953
 
$46.81
 285,034
 
$48.41

(1)
The weighted average grant date fair value for Options granted during the years ended December 31, 2009, 20082012, 2011 and 20072010 was $3.38$8.55 per share, $4.08$8.18 per share and $6.26$6.18 per share, respectively.
(2)
The aggregate intrinsic value of options exercised during the years ended December 31, 2009, 20082012, 2011 and 20072010 was $2.8$46.7 million $15.6, $74.8 million and $13.7$39.6 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, 2009, 20082012, 2011 and 20072010 was $8.0$18.0 million $23.9, $14.0 million  and $25.5$9.1 million, respectively.

(4)
The fair value of LTIP Units vested during the year ended December 31, 2012 and 2011 was $9.1 million and $5.5 million, respectively.

The following table summarizes information regarding options outstanding and exercisable at December 31, 2009:

   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

$16.05 to $21.40

  5,031  0.07  $21.06  5,031  $21.06

$21.41 to $26.75

  3,719,303  6.79  $23.48  1,290,389  $24.26

$26.76 to $32.10

  3,992,533  3.64  $29.55  3,992,533  $29.55

$32.11 to $37.45

  29,831  5.26  $32.56  25,982  $32.50

$37.46 to $42.80

  2,718,309  6.72  $40.41  2,005,249  $41.05

$42.81 to $48.15

  4,308  6.64  $45.21  4,097  $45.29

$48.16 to $53.50

  880,435  6.75  $53.50  651,534  $53.50
                 

$16.05 to $53.50

  11,349,750  5.66  $32.03  7,974,815  $33.55
                 

Vested and expected to vest as of December 31, 2009

  10,772,282  5.63  $32.40    
              

2012:

  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
$18.70 to $24.93 1,516,051
 5.20 
$23.14
 1,516,051
 
$23.14
$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
$37.40 to $43.62 1,389,121
 4.20 
$40.46
 1,389,121
 
$40.46
$43.63 to $49.86 61,187
 7.55 
$48.41
 3,992
 
$45.33
$49.87 to $56.09 1,983,188
 7.07 
$53.52
 891,250
 
$53.58
$56.10 to $62.32 1,197,541
 9.08 
$60.18
 48,545
 
$59.33
$18.70 to $62.32 8,115,255
 5.92 
$41.31
 5,385,907
 
$35.40
Vested and expected to vest
as of December 31, 2012		 7,801,412
 5.82 
$40.66
  
  

(1)
The aggregate intrinsic value of both options outstanding and optionsthat are vested and expected to vest as of December 31, 20092012 is $49.9 million.$128.4 million.
(2)
The aggregate intrinsic value and weighted average remaining contractual life in years of options exercisable as of December 31, 20092012 is $29.3$114.7 million and 4.34.6 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 $33.78$56.67 per share on December 31, 20092012 and the strike price of the underlying awards.


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As of December 31, 20082011 and 2007, 7,522,3442010, 5,415,550 Options (with a weighted average exercise price of $31.58)$34.64) and 7,000,2226,786,651 Options (with a weighted average exercise price of $28.45)$34.89) were exercisable, respectively.


13.Employee Plans
15. 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$100,000 of Common Shares of the Company.EQR. In 2003, the Company’sEQR's shareholders approved an increase in the aggregate number of Common Shares available under the ESPP to 7,000,000 (from 2,000,000)2,000,000). The Company has 3,561,3333,180,809 Common Shares available for purchase under the ESPP at December 31, 2009.2012. 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:

   Year Ended December 31,
   2009  2008  2007
   (Amounts in thousands except share and per share amounts)

Shares issued

   324,394   195,961   189,071

Issuance price ranges

  $14.21 – $24.84  $23.51 – $37.61  $31.38 – $43.17

Issuance proceeds

  $5,292  $6,170  $7,165

ESPP (the net proceeds noted below were contributed to ERPOP in exchange for OP Units):

 Year Ended December 31,
 2012 2011 2010
 (Amounts in thousands except share and per share amounts)
Shares issued110,054 113,107 157,363
Issuance price ranges$46.33 – $51.78 $44.04 – $51.19 $28.26 – $41.16
Issuance proceeds$5,399 $5,262 $5,112

The Company established a defined contribution plan (the “401(k) Plan”) to provide retirement benefits for employees that meet minimum employment criteria. The Company matches dollar for dollar up to the first 3% of eligible compensation that a participant contributes to the 401(k) Plan. Participants are vested in the Company’s contributions over five years. The Company recognized an expense in the amount of $3.5$4.4 million $3.8, $3.7 million and $4.2$4.0 million for the years ended December 31, 2009, 20082012, 2011 and 2007,2010, respectively.

The Company may also elect to make an annual discretionary profit-sharing contribution as a percentage of each individual employee’s eligible compensation under the 401(k) Plan. The Company did not make a contribution for the years ended December 31, 2009 and 2008 and as such, no expense was recognized in either year. The Company recognized an expense of approximately $1.5 million for the year ended December 31, 2007.

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 Company 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.

capital (included in general partner's capital in the Operating Partnership's financial statements).


14.Distribution Reinvestment and Share Purchase Plan
16. Distribution Reinvestment and Share Purchase Plan

On November 3, 1997,December 16, 2008, the Company filed with the SEC a Form S-3 Registration Statement to register 14,000,0005,000,000 Common Shares pursuant to a Distribution Reinvestment and Share Purchase Plan (the “DRIP Plan”"DRIP Plan"). The registration statement was automatically declared effective the same day and was to expire at the earlier of the date on November 25, 1997. The remainingwhich all 5,000,000 shares available for issuance under the 1997 registration lapsed in December 2008.

Onhad been issued or December 16, 2008,2011. On November 18, 2011, the Company filed with the SEC a Form S-3 Registration Statement to register 5,000,0004,850,000 Common Shares under the DRIP Plan.Plan, which included the remaining shares available for issuance under the 2008 registration, which terminated as of such date. The registration statement was automatically declared effective the same day and expires at the earlier of the date inon which all 5,000,0004,850,000 shares have been issued or December 15, 2011.November 18, 2014. The Company has 4,932,5334,833,763 Common Shares available for issuance under the DRIP Plan at December 31, 2009.

2012.

The DRIP Plan provides holders of record and beneficial owners of Common Shares and Preferred Shares with a simple and convenient method of investing cash distributions in additional Common Shares (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 the Company,EQR, at the market price of the Common Shares less a discount ranging between 0% and 5%, as determined in accordance with the DRIP Plan (which is referred to herein as the “Share Purchase – DRIP Plan”). Common Shares purchased under the DRIP Plan may, at the option of the Company,EQR, be directly issued by the CompanyEQR or purchased by the Company’sEQR's transfer agent in the open market using participants’ funds.

17. Transactions with Related Parties

The Company provided assetnet proceeds from any Common Share issuances are contributed to ERPOP in exchange for OP Units.


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

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for all expenses incurred by EQR in excess of income earned by EQR through its indirect 1% ownership of various entities. Amounts paid on behalf of EQR are reflected in the consolidated statements of operations as general and property management services to certain related entities for properties not owned by the Company, which terminated in December 2008. Fees received for providing such services were approximately $0.3 million for both the years ended December 31, 2008 and 2007.

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 JulyJanuary 31, 2011.2022. Amounts incurred for such office space for the years ended December 31, 2009, 20082012, 2011 and 2007,2010, respectively, were approximately $3.0$1.3 million $2.9, $2.2 million and $2.9 million.$2.7 million. The Company believes these amounts equal market rates for such rental space.

18. Commitments and Contingencies


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’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’sCompany'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 and asor a result,possible loss or a range of loss, and no amounts have been accrued at December 31, 2009.2012. 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.

The Company has established a reserve and recorded a corresponding reduction to its net gain on sales


As of discontinued operations related to potential liabilities associated with its condominium conversion activities. The reserve covers potential product liability related to each conversion. The Company periodically assesses the adequacy of the reserve and makes adjustments as necessary. During the year ended December 31, 2009, the Company recorded additional reserves of approximately $3.3 million (primarily related to an insurance settlement)2012, paid approximately $4.7 million in claims and released approximately $2.2 million of remaining reserves for settled claims. As a result, the Company had total reserves of approximately $6.7 million at December 31, 2009. While no assurances can be given, the Company does not believe that the ultimate resolution of these potential liabilities, if adversely determined, would have a material adverse effect on the Company.

As of December 31, 2009, the Company has foursix consolidated projects (including 400 Park Avenue South in New York City which the Company is jointly developing with Toll Brothers – see further discussion below) totaling 1,7001,536 apartment units in various stages of development with commitments to fund of approximately $406.0 million and estimated completion dates ranging through June 30, 2011. Some2015, as well as other completed development projects that are in various stages of thelease up or are stabilized. Five of these projects under development are being developed solely by the Company while others areand one is being co-developed with variousa third party development partners.partner.


As of December 31, 2012, the Company has two unconsolidated projects totaling 945 apartment units under development with estimated completion dates ranging through December 31, 2013. The development venture agreements with partners are primarily deal-specific, with differing terms regarding profit-sharing, equity contributions, returns on investment, buy-sell agreements and other customary provisions. The partnerCompany currently has no further funding obligations related to these projects. While the Company is most often the “general” or “managing” partnermanaging member of both of the development venture.joint ventures, is responsible for constructing both 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 the partner has significant involvement in and oversight of the ongoing projects. The typical buy-sell arrangements contain appraisal rights and provisions that provide the right, but not the obligation, for the Company to acquire the partner’s interestpartner's interests or sell its interests at any time following the occurrence of certain pre-defined events (including at stabilization) described in the projectdevelopment venture agreements.

In December 2011, the Company and Toll Brothers (NYSE: TOL) jointly acquired a vacant land parcel at fair market value upon the expiration of a negotiated time period (typically two to five years after substantial completion400 Park Avenue South in New York City. The Company's and Toll Brothers' allocated portions of the project)purchase price were approximately $76.1 million and $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 million and $75.7 million, respectively, which included the land purchase noted above, restricted deposits and taxes and fees. As of December 31, 2012, the Company's and Toll Brothers' consolidated contributions to the joint venture were approximately $203.5 million, of which Toll Brothers' noncontrolling interest balance totaled $84.0 million.

During the years ended December 31, 2009, 20082012, 2011 and 2007,2010, total operating lease payments incurredexpensed for office space, including a portion of real estate taxes, insurance, repairs and utilities, and including rent due under threefour ground leases, aggregated $8.4$8.1 million $8.3, $7.1 million and $7.6$7.6 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. During the years ended December 31, 20092012, 2011 and 2007,2010, the Company recognized compensation expense of $1.2$1.0 million, $1.0 million and $0.7$0.9 million, respectively, related to these agreements. During the year ended December 31, 2008, the Company reduced compensation expense by $0.4 million 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, 2009:

Payments Due by Year (in thousands)

  2010 2011 2012 2013 2014 Thereafter Total

Operating Leases:

       

Minimum Rent Payments (a)

 $6,520 $4,661 $2,468 $2,194 $1,824 $306,365 $324,032

Other Long-Term Liabilities:

       

Deferred Compensation (b)

  1,457  2,070  2,070  1,472  1,664  9,841  18,574

2012:
Payments Due by Year (in thousands)
  2013 2014 2015 2016 2017 Thereafter Total
Operating Leases:  
  
  
  
  
  
  
Minimum Rent Payments (a) $7,462
 $8,862
 $9,501
 $9,462
 $9,415
 $691,304
 $736,006
Other Long-Term Liabilities:  
  
  
  
  
  
  
Deferred Compensation (b) 1,179
 1,691
 1,691
 1,691
 1,692
 6,529
 14,473

(a)
Minimum basic rent due for various office space the Company leases and fixed base rent due on ground leases for fourfive properties/parcels.
(b)Estimated payments to the Company’sEQR's Chairman, Vice Chairman and two former CEO’s based on actual and planned retirement dates.

19. Impairment and Other Expenses

During the year ended December 31, 2009, the Company recorded an approximate $11.1 million non-cash asset impairment charge on a parcel of land held for development. During the year ended December 31, 2008, the Company recorded approximately $116.4 million of non-cash asset impairment charges on land held for development related to five potential development projects that will no longer be pursued. These charges were the result of an analysis of each parcel’s estimated fair value (determined using internally developed models based on market assumptions and comparable sales data) compared to its current capitalized carrying value and management’s decision to reduce the number of planned development projects the Company will undertake.

During the years ended December 31, 2009, 2008 and 2007, the Company incurred charges of $6.5 million, $5.8 million and $1.8 million, respectively, related to the write-off of various pursuit and out-of-pocket costs for terminated acquisition, disposition (including halted condominium conversions) and development transactions and related to transaction closing costs, such as survey, title and legal fees, on the acquisition of operating properties and are included in other expenses on the Consolidated Statements of Operations.

20. Reportable Segments


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 separatediscrete financial information is available that is evaluated regularly by senior management. Senior managementthe chief operating decision maker. The chief operating decision maker decides how resources are allocated and assesses performance on a monthly basis.

recurring basis at least quarterly.


The Company’s primary business is owning, managingthe acquisition, development and operatingmanagement of multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents. Senior managementThe chief operating decision maker evaluates the Company's operating performance of each of our apartment communities individually and geographically by market and both on a same store and non-same store basis; however, each of our apartment communities generally has similar economic characteristics, residents, products and services.basis. The Company’s operating segments (geographic markets) have been aggregated by geographyinto four reportable segments based upon the geographic region in a manner identical to that which is provided to its chief operating decision maker.

they are located.


The Company’s fee and asset management and development (including its partially owned properties), condominium conversion and corporate housing (Equity Corporate Housing or “ECH”) activities are immaterial andother business activities that do not individually meet the threshold requirements of a reportableconstitute an operating segment and as such, have been aggregated in the “Other” segment"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, 2009, 2008,2012, 2011 or 2007.

2010.

The primary financial measure for the Company’s rental real estate propertiessegment 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). The Company believes that NOI is helpful to investors as a supplemental measure of theits operating performance of a real estate company 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, 2009, 20082012, 2011 and 2007,2010, respectively, as well as total assets for the years ended and capital expenditures at December 31, 20092012 and 2008,2011, respectively (amounts in thousands):

   Year Ended December 31, 2009
   Northeast  Northwest  Southeast  Southwest  Other (3)  Total

Rental income:

            

Same store (1)

  $544,166  $358,718  $395,014  $427,876  $—    $1,725,774

Non-same store/other (2) (3)

   63,663   18,031   13,473   26,394   86,030   207,591
                        

Total rental income

   607,829   376,749   408,487   454,270   86,030   1,933,365

Operating expenses:

            

Same store (1)

   203,061   129,144   163,473   148,616   —     644,294

Non-same store/other (2) (3)

   26,684   8,226   5,288   13,384   76,528   130,110
                        

Total operating expenses

   229,745   137,370   168,761   162,000   76,528   774,404

NOI:

            

Same store (1)

   341,105   229,574   231,541   279,260   —     1,081,480

Non-same store/other (2) (3)

   36,979   9,805   8,185   13,010   9,502   77,481
                        

Total NOI

  $378,084  $239,379  $239,726  $292,270  $9,502  $1,158,961
                        

Total assets

  $5,042,017  $2,591,361  $2,757,701  $2,774,666  $2,251,770  $15,417,515
                        



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 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

(1)
Same store primarily includes all properties owned for all of both 2009acquired or completed and 2008stabilized prior to January 1, 2011, less properties subsequently sold, which represented 113,59898,577 apartment units.
(2)
Non-same store primarily includes properties acquired after January 1, 2008.2011, plus any properties in lease-up and not stabilized as of January 1, 2011.
(3)Other includes ECH, development condominium conversion overhead of $1.4 million and other corporate operations. Also reflects a $9.6 million elimination of rental income recorded in Northeast, Northwest, Southeast and Southwest operating segments related to ECH.

   Year Ended December 31, 2008
   Northeast  Northwest  Southeast  Southwest  Other (3)  Total

Rental income:

            

Same store (1)

  $553,712  $372,197  $407,871  $444,403  $—    $1,778,183

Non-same store/other (2) (3)

   37,000   18,347   6,090   23,400   101,934   186,771
                        

Total rental income

   590,712   390,544   413,961   467,803   101,934   1,964,954

Operating expenses:

            

Same store (1)

   199,673   128,448   166,022   150,980   —     645,123

Non-same store/other (2) (3)

   16,806   7,664   2,995   14,363   101,742   143,570
                        

Total operating expenses

   216,479   136,112   169,017   165,343   101,742   788,693

NOI:

            

Same store (1)

   354,039   243,749   241,849   293,423   —     1,133,060

Non-same store/other (2) (3)

   20,194   10,683   3,095   9,037   192   43,201
                        

Total NOI

  $374,233  $254,432  $244,944  $302,460  $192  $1,176,261
                        

Total assets

  $5,039,670  $2,653,018  $2,857,703  $2,865,069  $3,119,650  $16,535,110
                        


 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 owned for all of both 2009acquired or completed and 2008stabilized prior to January 1, 2011, less properties subsequently sold, which represented 113,59898,577 apartment units.
(2)Non-same store primarily includes properties acquired after January 1, 2008.2011, plus any properties in lease-up and not stabilized as of January 1, 2011.
(3)
Other includes ECH, development, condominium conversion overhead of $2.8$0.4 million and other corporate operations. Also reflects a $13.6 million elimination of rental income recorded in Northeast, Northwest, Southeast and Southwest operating segments related to ECH.

   Year Ended December 31, 2007 
   Northeast  Northwest  Southeast  Southwest  Other (3)  Total 

Rental income:

           

Same store (1)

  $502,221  $351,925  $379,978  $451,072  $—     $1,685,196  

Non-same store/other (2) (3)

   46,641   17,380   48,840   35,448   104,369    252,678  

Properties sold in 2009 (4)

   —     —     —     —     (123,011)   (123,011) 
                         

Total rental income

   548,862   369,305   428,818   486,520   (18,642)   1,814,863  

Operating expenses:

           

Same store (1)

   184,287   126,161   153,734   154,700   —      618,882  

Non-same store/other (2) (3)

   22,656   7,222   19,133   19,730   101,111    169,852  

Properties sold in 2009 (4)

   —     —     —     —     (46,472)   (46,472) 
                         

Total operating expenses

   206,943   133,383   172,867   174,430   54,639    742,262  

NOI:

           

Same store (1)

   317,934   225,764   226,244   296,372   —      1,066,314  

Non-same store/other (2) (3)

   23,985   10,158   29,707   15,718   3,258    82,826  

Properties sold in 2009 (4)

   —     —     —     —     (76,539)   (76,539) 
                         

Total NOI

  $341,919  $235,922  $255,951  $312,090  $(73,281)  $1,072,601  
                         


F-55
Table of Contents

 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 owned for all of both 2008acquired or completed and 2007stabilized prior to January 1, 2010, less properties subsequently sold, which represented 115,051101,312 apartment units.
(2)
Non-same store primarily includes properties acquired after January 1, 2007.2010, plus any properties in lease-up and not stabilized as of January 1, 2010.
(3)
Other includes ECH, development, condominium conversion overhead of $4.8$0.6 million and other corporate operations. Also reflects a $16.6 million elimination of rental income recorded in Northeast, Northwest, Southeast and Southwest operating segments related to ECH.
(4)Reflects discontinued operations for properties sold during 2009.2012.

Note: Markets included in the above geographic segments are as follows:

(a)Northeast – New England (excluding Boston), Boston, New York Metro, DC Northern Virginia and Suburban Maryland.
(b)Northwest – Central Valley, Denver, Portland, San Francisco Bay Area and Seattle/Tacoma.
(c)Southeast – Atlanta, Jacksonville, Orlando, Raleigh/Durham, South Florida and Tampa.
(d)Southwest – Albuquerque, Dallas/Ft. Worth, Inland Empire, Los Angeles, Orange County, Phoenix, San Diego and Tulsa.

(a) Northeast – 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.

The following table presents a reconciliation of NOI from our rental real estate specific to continuing operations for the years ended December 31, 2009, 20082012, 2011 and 2007, respectively:

   Year Ended December 31, 
   2009  2008  2007 
   (Amounts in thousands) 

Rental income

  $1,933,365   $1,964,954   $1,814,863  

Property and maintenance expense

   (487,216)   (508,048)   (472,899) 

Real estate taxes and insurance expense

   (215,250)   (203,582)   (181,887) 

Property management expense

   (71,938)   (77,063)   (87,476) 
             

Total operating expenses

   (774,404)   (788,693)   (742,262) 
             

Net operating income

  $1,158,961   $1,176,261   $1,072,601  
             

21. Subsequent Events/Other2010

, respectively (amounts in thousands):


 Year Ended December 31,
 2012 2011 2010
Rental income$2,114,142
 $1,874,465
 $1,665,233
Property and maintenance expense(415,986) (387,968) (374,135)
Real estate taxes and insurance expense(241,876) (211,518) (200,779)
Property management expense(81,902) (81,867) (79,857)
Total operating expenses(739,764) (681,353) (654,771)
Net operating income$1,374,378
 $1,193,112
 $1,010,462

18.Subsequent Events/Other
Subsequent Events

Subsequent to December 31, 2009 and up until2012, the time of this filing, the Company:

Acquired five apartment

Sold 16 properties consisting of 1,1744,798 apartment units for $495.6 million;

$779.7 million;

Sold four consolidated apartment

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 1,0252,911 apartment units for $94.9$557.8 million (excluding condominium units) and one unconsolidated apartment property consisting of 268 units for $13.4 million (sales price listed is that are included in the gross sales price);

bullet above;

Assumed $10.4 million of mortgage debt

Terminated its $2.5 billion bridge loan commitment in conjunctionconnection with the acquisitionexecution of one property;

the new revolving credit


Was released from $40.0 million

F-56
Table of mortgage debt assumedContents

facility and term loan facility discussed below;
Replaced its existing $1.75 billion facility with a new $2.5 billion unsecured revolving credit facility maturing April 1, 2018, with an interest rate on advances under the facility of LIBOR plus a spread (currently 1.05%) and an annual facility fee (currently 15 basis points), which are dependent on the credit rating of the Company's long-term debt. 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; 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 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 purchaserCompany. The interest rate on two disposed properties;

Repaid $24.2 million of mortgage loans;

Entered into $200.0 million of forward starting swaps to hedge changes in interest rates related to future secured or unsecured debt issuances;

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 from employees to cover the minimum statutory tax withholding obligations related to the vesting of employees’ restricted shares; and

Issued 1.1 million Common Shares at an average price of $33.87 per share for total consideration of $35.8 millionadvances under the Company’s ATM share offering program.

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.

Other

During the years ended December 31, 20082012, 2011 and 2007,2010, the Company recognized $0.7incurred charges of $12.6 million, $9.5 million and $0.3$6.6 million, respectively, related to property acquisition costs, such as survey, title and legal fees, on the acquisition of forfeited depositsoperating properties and $9.0 million, $5.1 million and $5.3 million, respectively, related to the write-off of various pursuit and out-of-pocket costs for various terminated transactions,acquisition, disposition and development transactions. These costs, totaling $21.6 million, $14.6 million and $11.9 million, respectively, are included in other expenses in the accompanying consolidated statements of operations.
During the year ended December 31, 2012, the Company settled a dispute with the owners of a land parcel for $4.2 million, which areis included in other expenses in the accompanying consolidated statements of operations.

During the year ended December 31, 2011, the Company received $4.5 million for the termination of its royalty participation in LRO/Rainmaker, a revenue management system, which is included in interest and other income.income in 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 $1.7 million to the listing and marketing agent related to 38 potential condo sales at one of the Company’s properties. In addition, during 2009, 20082011 and 2007,2010, the Company received $0.2$0.8 million $1.7 and $5.2 million and $4.1 million,, respectively, for the settlement of litigation/insurance claims, which are included in interest and other income in the accompanying consolidated statements of operations.


During the year ended December 31, 2011, the Company disposed of its corporate housing business for a sales price of approximately $4.0 million, of which the Company provided $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 years ended December 31, 2009, 20082012 and 2007,2011, the Company collected $0.3 million and $0.2 million, respectively, on this note receivable and has recognized a cumulative net gain on the sale of approximately $1.4 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 additionmajor 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 amounts discussed below for its former Chief Financial Officer (“CFO”)Archstone assets (other than certain liabilities owed to Lehman and one other former executive vice president,certain transaction expenses). The Company also expects to assume approximately $3 billion of consolidated Archstone debt. In addition, the Company recordedand 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 $1.4$179.9 million $4.3 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-57
Table of Contents

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 $0.5other income in July 2012 and recognized the remaining $80.0 million of additional general and administrative expense, respectively, and $1.6 million, $0.8 million and $1.6 million of additional property management expense, respectively, related primarily to cash severance for various employees.

in October 2012.


During the year ended December 31, 2007,2010, the Company entered into resignation/release agreements with its former CFO and one other former executive vice president.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 recorded approximately $3.4 millionplanned 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 additional generalan analysis of each parcel’s estimated fair value (determined using internally developed models that were based on market assumptions and administrative expense duringcomparable 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, 20072012, 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 cash severancethe collapse (both expensed and accelerated vestingcapitalized), including providing for residents’ interim needs, lost revenue and garage reconstruction, were approximately $22.8 million, before insurance reimbursements of share options$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 restricted/performance shares.

The Companylegal costs, reduced earnings as they were incurred. Generally, insurance proceeds were recorded a reductionas increases to general and administrative expense of approximately $1.7 million duringearnings as they were received. During the year ended December 31, 2007 due to2012, the successful resolutionCompany received approximately $3.5 million in insurance proceeds (included in real estate taxes and insurance on the consolidated statements of a certain lawsuit in Florida, resulting in the reversaloperations), which represented its final reimbursement of the majority of a previously established litigation reserve. The Company had previously recorded a reduction to general and administrative expense of approximately $2.8$13.6 million during in cumulative insurance proceeds. During the year ended December 31, 2006 due to2011, the recovery ofCompany received approximately $6.1 million in insurance proceeds relatedwhich offset expenses of $1.7 million that were recorded relating to this loss and are included in real estate taxes and insurance on the same lawsuit.

consolidated statements of operations. During the year ended December 31, 2007,2010, the Company received $1.2approximately $4.0 million related in insurance proceeds which fully offset the impairment charge recognized to its 7.075% ownership interestwrite-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 Wellsford Park Highlands Corporation (“WPHC”), an entity which owns a condominium development in Denver, Colorado. The Company recorded a gainreal estate taxes and insurance on the consolidated statements of approximately $0.7 million as income from investments in unconsolidated entities and has no further ownership interest in WPHC.

operations.


19.Quarterly Financial Data (Unaudited)

Equity Residential
22. Quarterly Financial Data (Unaudited)

The following unaudited quarterly data has been prepared on the basis of a December 31 year-end. All amounts have also been restated in accordance with the guidance on discontinued operations noncontrolling interests and convertible debt, and reflect dispositions and/or properties held for sale through December 31, 2009.2012. Amounts are in thousands, except for per share amounts.

2009

  First
Quarter
3/31		  Second
Quarter
6/30		  Third
Quarter
9/30		  Fourth
Quarter
12/31		 

Total revenues (1)

  $488,238  $485,954  $486,532  $482,987  

Operating income (1)

   134,320   129,002   130,798   135,270  

Income (loss) from continuing operations (1)

   14,023   14,397   11,012   (11,401) 

Discontinued operations, net (1)

   71,398   91,535   132,353   58,712  

Net income *

   85,421   105,932   143,365   47,311  

Net income available to Common Shares

   77,175   96,585   132,362   41,672  

Earnings per share – basic:

        

Net income available to Common Shares

  $0.28  $0.35  $0.48  $0.15  

Weighted average Common Shares outstanding

   272,324   272,901   273,658   275,519  

Earnings per share – diluted:

        

Net income available to Common Shares

  $0.28  $0.35  $0.48  $0.15  

Weighted average Common Shares outstanding

   288,853   289,338   290,215   275,519  


F-58
Table of Contents

  
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 Common Shares 141,833
 99,797
 218,603
 365,979
Earnings per share – basic:  
  
  
  
Net income available to Common Shares $0.47
 $0.33
 $0.73
 $1.18
Weighted average Common Shares outstanding 298,805
 300,193
 301,336
 310,398
Earnings per share – diluted:  
  
  
  
Net income available to Common Shares $0.47
 $0.33
 $0.72
 $1.17
Weighted average Common Shares outstanding 315,230
 317,648
 318,773
 327,108

(1)
The amounts presented for the first three quarters of 20092012 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 2009.2012. Below is a reconciliation to the amounts previously reported:

2009

  First
Quarter
3/31		  Second
Quarter
6/30		  Third
Quarter
9/30		 

Total revenues previously reported in Form 10-Q

  $515,144   $505,150   $492,757  

Total revenues subsequently reclassified to discontinued operations

   (26,906)   (19,196)   (6,225) 
             

Total revenues disclosed in Form 10-K

  $488,238   $485,954   $486,532  
             

Operating income previously reported in Form 10-Q

  $144,181   $135,962   $133,096  

Operating income subsequently reclassified to discontinued operations

   (9,861)   (6,960)   (2,298) 
             

Operating income disclosed in Form 10-K

  $134,320   $129,002   $130,798  
             

Income from continuing operations previously reported in Form 10-Q

  $23,487   $21,158   $12,824  

Income from continuing operations subsequently reclassified to discontinued operations

   (9,464)   (6,761)   (1,812) 
             

Income from continuing operations disclosed in Form 10-K

  $14,023   $14,397   $11,012  
             

Discontinued operations, net previously reported in Form 10-Q

  $61,934   $84,774   $130,541  

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

   9,464    6,761    1,812  
             

Discontinued operations, net disclosed in Form 10-K

  $71,398   $91,535   $132,353  
             

2008

  First
Quarter
3/31		  Second
Quarter
6/30		  Third
Quarter
9/30		  Fourth
Quarter
12/31		 

Total revenues (2)

  $476,035  $493,778  $504,737  $501,119  

Operating income (2)

   129,593   151,215   145,954   31,396  

Income (loss) from continuing operations (1)

   8,504   32,239   24,118   (77,684) 

Discontinued operations, net (1)

   139,024   107,754   163,007   39,451  

Net income (loss) *

   147,528   139,993   187,125   (38,233) 

Net income (loss) available to Common Shares

   134,490   126,625   172,246   (40,246) 

Earnings per share – basic:

        

Net income (loss) available to Common Shares

  $0.50  $0.47  $0.64  $(0.15) 

Weighted average Common Shares outstanding

   268,784   269,608   270,345   271,293  

Earnings per share – diluted:

        

Net income (loss) available to Common Shares

  $0.50  $0.46  $0.63  $(0.15) 

Weighted average Common Shares outstanding

   289,317   290,445   290,795   271,293  


  
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

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Table of Contents

  
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 20082011 are not equal to the same amounts previously reported in either the respective 2009 Form 10-Q’s filed with the SEC (for the first three quarters of 2008) or in the Form 10-K8-K filed with the SEC on February 26, 2009June 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 2008) primarily2011) 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 2009 as well as changes in accounting for noncontrolling interests and convertible debt.2012. Below is a reconciliation to the amounts previously reported:

2008

  First
Quarter
3/31		  Second
Quarter
6/30		  Third
Quarter
9/30		  Fourth
Quarter
12/31		 

Total revenues previously reported in Form 10-Q/Form 10-K

  $502,641   $513,283   $511,006   $533,345  

Total revenues subsequently reclassified to discontinued operations

   (26,606)   (19,505)   (6,269)   (32,226) 
                 

Total revenues disclosed in Form 10-K

  $476,035   $493,778   $504,737   $501,119  
                 

Operating income previously reported in Form 10-Q/Form 10-K

  $139,509   $158,356   $148,175   $41,056  

Operating income subsequently reclassified to discontinued operations

   (9,916)   (7,141)   (2,221)   (12,489) 

Other expenses reclassification from impairment

   —      —      —      2,829  
                 

Operating income disclosed in Form 10-K

  $129,593   $151,215   $145,954   $31,396  
                 

Income (loss) from continuing operations previously reported in Form 10-Q/Form 10-K

  $17,934   $39,148   $26,094   $(57,232) 

Income from continuing operations subsequently reclassified to discontinued operations

   (9,430)   (6,909)   (1,976)   (11,850) 

Convertible debt discount adjustment

   —      —      —      (5,718) 

Noncontrolling Interest allocations

   —      —      —      (2,884) 
                 

Income (loss) from continuing operations disclosed in Form 10-K

  $8,504   $32,239   $24,118   $(77,684) 
                 

Discontinued operations, net previously reported in Form 10-Q/Form 10-K

  $129,594   $100,845   $161,031   $25,989  

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

   9,430    6,909    1,976    11,850  

Noncontrolling Interest allocation

   —      —      —      1,612  
                 

Discontinued operations, net disclosed in Form 10-K

  $139,024   $107,754   $163,007   $39,451  
                 

*The Company did not have any extraordinary items or cumulative effect of change in accounting principle during the years ended December 31, 2009 and 2008.

  
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
* The Company did not have any extraordinary items or cumulative effect of change in accounting principle during the years ended December 31, 2012 and 2011. 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.

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 net incomesame amounts disclosed above.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-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
* The Operating Partnership did not have any extraordinary items or cumulative effect of change in accounting principle during the years ended December 31, 2012 and 2011. 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-62




EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation

Overall Summary

December 31, 20092012

   Properties
(H)		  Units (H)  Investment in Real
Estate, Gross		  Accumulated
Depreciation		  Investment in Real
Estate, Net		  Encumbrances

Wholly Owned Unencumbered

  281  76,487  $11,112,317,728  $(2,477,548,347)  $8,634,769,381  $—  

Wholly Owned Encumbered

  151  42,309   5,903,435,223   (1,272,390,073)   4,631,045,150   2,441,648,706

Portfolio/Entity Encumbrances (1)

  —    —     —     —      —     1,404,327,000
                      

Wholly Owned Properties

  432  118,796   17,015,752,951   (3,749,938,420)   13,265,814,531   3,845,975,706

Partially Owned Unencumbered

  —    —     125,900,815   (740,000)   125,160,815   —  

Partially Owned Encumbered

  27  5,530   1,323,490,147   (126,885,454)   1,196,604,693   937,470,654
                      

Partially Owned Properties

  27  5,530   1,449,390,962   (127,625,454)   1,321,765,508   937,470,654

Total Unencumbered Properties

  281  76,487   11,238,218,543   (2,478,288,347)   8,759,930,196   —  

Total Encumbered Properties

  178  47,839   7,226,925,370   (1,399,275,527)   5,827,649,843   4,783,446,360
                      

Total Consolidated Investment in Real Estate

  459  124,326  $18,465,143,913  $(3,877,563,874)  $14,587,580,039  $4,783,446,360
                      

 Properties (H) Units (H) Investment in Real Estate, Gross 
Accumulated
Depreciation
 Investment in Real Estate, Net Encumbrances
Wholly Owned Unencumbered269
 73,732
 $14,676,449,487
 $(3,266,454,538) $11,409,994,949
 $—
Wholly Owned Encumbered113
 33,124
 5,716,925,544
 (1,486,115,893) 4,230,809,651
 2,392,135,994
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
            
Partially Owned Unencumbered9
 1,639
 375,326,934
 (72,825,847) 302,501,087
 —
Partially Owned Encumbered10
 1,836
 239,727,289
 (86,824,773) 152,902,516
 200,337,000
Partially Owned Properties19
 3,475
 615,054,223
 (159,650,620) 455,403,603
 200,337,000
            
Total Unencumbered Properties278
 75,371
 15,051,776,421
 (3,339,280,385) 11,712,496,036
 —
Total Encumbered Properties123
 34,960
 5,956,652,833
 (1,572,940,666) 4,383,712,167
 3,898,368,701
Total Consolidated Investment in Real Estate401
 110,331
 $21,008,429,254
 $(4,912,221,051) $16,096,208,203
 $3,898,368,701

(1)See attached Encumbrances Reconciliation.


S-1


EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation

Encumbrances Reconciliation

December 31, 20092012

Portfolio/Entity Encumbrances

  Number of
Properties
Encumbered by		�� See Properties
With Note:		  Amount

EQR-Bond Partnership

  10  I  $88,189,000

EQR-Fanwell 2007 LP

  7  J   223,138,000

EQR-Wellfan 2008 LP (R)

  15  K   550,000,000

EQR-SOMBRA 2008 LP

  19  L   543,000,000
        

Portfolio/Entity Encumbrances

  51     1,404,327,000

Individual Property Encumbrances

       3,379,119,360
        

Total Encumbrances per Financial Statements

      $4,783,446,360
        

Portfolio/Entity Encumbrances 
Number of
Properties Encumbered by
 See Properties With Note: Amount 
EQR-Fanwell 2007 LP 6 I $212,895,707
 
EQR-Wellfan 2008 LP (R) 15 J 550,000,000
 
EQR-SOMBRA 2008 LP 16 K 543,000,000
 
Portfolio/Entity Encumbrances 37   1,305,895,707
 
Individual Property Encumbrances     2,592,472,994
 
Total Encumbrances per Financial Statements     $3,898,368,701
 



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, 2009, 20082012, 2011 and 20072010 are as follows:

   2009  2008  2007 

Balance, beginning of year

  $18,690,239   $18,333,350   $17,235,175  

Acquisitions and development

   512,977    995,026    2,456,495  

Improvements

   125,965    172,165    260,371  

Dispositions and other

   (864,037)   (810,302)   (1,618,691) 
             

Balance, end of year

  $18,465,144   $18,690,239   $18,333,350  
             

 2012 2011 2010
Balance, beginning of year$20,407,946
 $19,702,371
 $18,465,144
Acquisitions and development1,250,633
 1,721,895
 1,789,948
Improvements161,460
 151,476
 141,199
Dispositions and other(811,610) (1,167,796) (693,920)
Balance, end of year$21,008,429
 $20,407,946
 $19,702,371

The changes in accumulated depreciation for the years ended December 31, 2009, 2008,2012, 2011 and 20072010 are as follows:

   2009  2008  2007 

Balance, beginning of year

  $3,561,300   $3,170,125   $3,022,480  

Depreciation

   600,375    602,908    616,414  

Dispositions and other

   (284,111)   (211,733)   (468,769) 
             

Balance, end of year

  $3,877,564   $3,561,300   $3,170,125  
             

 2012 2011 2010
Balance, beginning of year$4,539,583
 $4,337,357
 $3,877,564
Depreciation684,992
 663,616
 673,403
Dispositions and other(312,354) (461,390) (213,610)
Balance, end of year$4,912,221
 $4,539,583
 $4,337,357



S-3

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation

December 31, 20092012

Description

     Initial Cost to
Company		   Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)		    Gross
Amount
Carried at
Close of
Period
12/31/09		           

Apartment Name

 

Location

 Date of
Construction		 Units (H) Land Building &
Fixtures		 Land Building &
Fixtures		  Land Building &
Fixtures (A)		 Total (B) Accumulated
Depreciation
(C)		  Investment
in Real
Estate, Net
at 12/31/09
(B)		 Encumbrances

EQR Wholly Owned Unencumbered:

           

10 Chelsea

 New York, NY (F) —   $—   $12,373,942 $—   $—     $—   $12,373,942 $12,373,942 $—     $12,373,942 $—  

1210 Mass

 Washington, D.C. (G) 2004 144  9,213,512  36,559,189  —    220,857    9,213,512  36,780,046  45,993,558  (6,423,703)   39,569,855  —  

1401 Joyce on Pentagon Row

 Arlington, VA 2004 326  9,780,000  89,680,000  —    5,931    9,780,000  89,685,931  99,465,931  (1,233,242)   98,232,689  —  

1660 Peachtree

 Atlanta, GA 1999 355  7,924,126  23,602,563  —    1,894,957    7,924,126  25,497,520  33,421,646  (6,182,090)   27,239,556  —  

2400 M St

 Washington, D.C. (G) 2006 359  30,006,593  113,763,785  —    558,625    30,006,593  114,322,410  144,329,003  (17,133,520)   127,195,483  —  

420 East 80th Street

 New York, NY 1961 155  39,277,000  23,026,984  —    2,113,716    39,277,000  25,140,700  64,417,700  (4,602,918)   59,814,782  —  

600 Washington

 New York, NY (G) 2004 135  32,852,000  43,140,551  —    134,302    32,852,000  43,274,853  76,126,853  (7,763,293)   68,363,560  —  

70 Greene

 Jersey City, NJ (F) —    28,170,659  236,492,172  —    17,660    28,170,659  236,509,832  264,680,491  (239)   264,680,252  —  

71 Broadway

 New York, NY (G) 1997 238  22,611,600  77,492,171  —    1,834,887    22,611,600  79,327,058  101,938,658  (15,158,734)   86,779,924  —  

Abington Glen

 Abington, MA 1968 90  553,105  3,697,396  —    2,248,042    553,105  5,945,438  6,498,543  (2,417,588)   4,080,955  —  

Acacia Creek

 Scottsdale, AZ 1988-1994 304  3,663,473  21,172,386  —    2,568,227    3,663,473  23,740,613  27,404,086  (10,266,173)   17,137,913  —  

Arden Villas

 Orlando, FL 1999 336  5,500,000  28,600,796  —    2,974,514    5,500,000  31,575,310  37,075,310  (6,643,466)   30,431,844  —  

Agliano

 Tampa, FL (F) —    5,000,000  —    —    —      5,000,000  —    5,000,000  —      5,000,000  —  

Arrington Place Condominium Homes, LLC

 Issaquah, WA 1988 2  115,341  277,636  —    137,956    115,341  415,592  530,933  —      530,933  —  

Ashton, The

 Corona Hills, CA 1986 492  2,594,264  33,042,398  —    5,567,898    2,594,264  38,610,296  41,204,560  (17,184,686)   24,019,874  —  

Audubon Village

 Tampa, FL 1990 447  3,576,000  26,121,909  —    3,392,307    3,576,000  29,514,216  33,090,216  (12,008,137)   21,082,079  —  

Auvers Village

 Orlando, FL 1991 480  3,808,823  29,322,243  —    5,885,011    3,808,823  35,207,254  39,016,077  (14,394,028)   24,622,049  ��  

Avenue Royale

 Jacksonville, FL 2001 200  5,000,000  17,785,388  —    793,671    5,000,000  18,579,059  23,579,059  (3,838,016)   19,741,043  —  

Avon Place

 Avon, CT 1973 163  1,788,943  12,440,003  —    1,458,517    1,788,943  13,898,520  15,687,463  (4,694,409)   10,993,054  —  

Ball Park Lofts

 Denver, CO (G) 2003 339  5,481,556  51,658,740  —    1,923,728    5,481,556  53,582,468  59,064,024  (10,882,774)   48,181,250  —  

Barrington Place

 Oviedo, FL 1998 233  6,990,000  15,740,825  —    2,422,739    6,990,000  18,163,564  25,153,564  (4,675,275)   20,478,289  —  

Bay Hill

 Long Beach, CA 2002 160  7,600,000  27,437,239  —    681,288    7,600,000  28,118,527  35,718,527  (6,036,077)   29,682,450  —  

Bayside at the Islands

 Gilbert, AZ 1989 272  3,306,484  15,573,006  —    2,634,844    3,306,484  18,207,850  21,514,334  (8,304,288)   13,210,046  —  

Bella Terra I

 Mukilteo, WA (G) 2002 235  5,686,861  26,070,540  —    482,536    5,686,861  26,553,076  32,239,937  (6,384,335)   25,855,602  —  

Bella Vista

 Phoenix, AZ 1995 248  2,978,879  20,641,333  —    3,306,763    2,978,879  23,948,096  26,926,975  (10,482,003)   16,444,972  —  

Bella Vista I, II, III Combined

 Woodland Hills, CA 2003-2007 579  31,682,754  121,095,785  —    1,226,679    31,682,754  122,322,464  154,005,218  (19,518,553)   134,486,665  —  

Belle Arts Condominium Homes, LLC

 Bellevue, WA 2000 1  63,158  248,929  —    (5,541)   63,158  243,388  306,546  —      306,546  —  

Bellevue Meadows

 Bellevue, WA 1983 180  4,507,100  12,574,814  —    3,907,130    4,507,100  16,481,944  20,989,044  (6,521,606)   14,467,438  —  

Beneva Place

 Sarasota, FL 1986 192  1,344,000  9,665,447  —    1,647,177    1,344,000  11,312,624  12,656,624  (4,801,902)   7,854,722  —  

Bermuda Cove

 Jacksonville, FL 1989 350  1,503,000  19,561,896  —    4,272,602    1,503,000  23,834,498  25,337,498  (10,254,068)   15,083,430  —  

Bishop Park

 Winter Park, FL 1991 324  2,592,000  17,990,436  —    3,308,263    2,592,000  21,298,699  23,890,699  (9,523,006)   14,367,693  —  

Bradford Apartments

 Newington, CT 1964 64  401,091  2,681,210  —    530,656    401,091  3,211,866  3,612,957  (1,158,262)   2,454,695  —  

Briar Knoll Apts

 Vernon, CT 1986 150  928,972  6,209,988  —    1,191,279    928,972  7,401,267  8,330,239  (2,695,671)   5,634,568  —  

Bridford Lakes II

 Greensboro, NC (F) —    1,100,564  792,509  —    —      1,100,564  792,509  1,893,073  —      1,893,073  —  

Bridgewater at Wells Crossing

 Orange Park, FL 1986 288  2,160,000  13,347,549  —    1,873,730    2,160,000  15,221,279  17,381,279  (5,912,232)   11,469,047  —  

Brookside II (MD)

 Frederick, MD 1979 204  2,450,800  6,913,202  —    2,447,010    2,450,800  9,360,212  11,811,012  (4,509,419)   7,301,593  —  

Camellero

 Scottsdale, AZ 1979 348  1,924,900  17,324,593  —    5,273,017    1,924,900  22,597,610  24,522,510  (13,069,472)   11,453,038  —  

Carlyle Mill

 Alexandria, VA 2002 317  10,000,000  51,367,913  —    3,451,440    10,000,000  54,819,353  64,819,353  (13,315,143)   51,504,210  —  

Center Pointe

 Beaverton, OR 1996 264  3,421,535  15,708,853  —    2,492,166    3,421,535  18,201,019  21,622,554  (6,246,724)   15,375,830  —  

Centre Club

 Ontario, CA 1994 312  5,616,000  23,485,891  —    2,383,588    5,616,000  25,869,479  31,485,479  (8,827,536)   22,657,943  —  

Centre Club II

 Ontario, CA 2002 100  1,820,000  9,528,898  —    477,327    1,820,000  10,006,225  11,826,225  (2,805,581)   9,020,644  —  

Chandler Court

 Chandler, AZ 1987 316  1,353,100  12,175,173  —    4,100,225    1,353,100  16,275,398  17,628,498  (8,644,695)   8,983,803  —  

Chatelaine Park

 Duluth, GA 1995 303  1,818,000  24,489,671  —    1,699,278    1,818,000  26,188,949  28,006,949  (10,446,917)   17,560,032  —  

Chesapeake Glen Apts (fka Greentree I, II & III)

 Glen Burnie, MD 1973 796  8,993,411  27,301,052  —    20,079,780    8,993,411  47,380,832  56,374,243  (19,508,708)   36,865,535  —  

Chestnut Hills

 Puyallup, WA 1991 157  756,300  6,806,635  —    1,262,115    756,300  8,068,750  8,825,050  (3,911,078)   4,913,972  —  

Chickasaw Crossing

 Orlando, FL 1986 292  2,044,000  12,366,832  —    1,599,289    2,044,000  13,966,121  16,010,121  (5,954,605)   10,055,516  —  

Chinatown Gateway

 Los Angeles, CA (F) —    14,791,831  10,623,522  —    —      14,791,831  10,623,522  25,415,353  —      25,415,353  —  

Citrus Falls

 Tampa, FL 2003 273  8,190,000  28,894,280  —    301,445    8,190,000  29,195,725  37,385,725  (4,341,859)   33,043,866  —  

City View (GA)

 Atlanta, GA (G) 2003 202  6,440,800  19,993,460  —    1,055,835    6,440,800  21,049,295  27,490,095  (4,334,939)   23,155,156  —  

Clarys Crossing

 Columbia, MD 1984 198  891,000  15,489,721  —    1,883,522    891,000  17,373,243  18,264,243  (7,362,993)   10,901,250  —  

Cleo, The

 Los Angeles, CA 1989 92  6,615,467  14,829,335  —    3,628,567    6,615,467  18,457,902  25,073,369  (2,371,221)   22,702,148  —  

Club at the Green

 Beaverton, OR 1991 254  2,030,950  12,616,747  —    2,247,596    2,030,950  14,864,343  16,895,293  (7,238,462)   9,656,831  —  

Club at Tanasbourne

 Hillsboro, OR 1990 352  3,521,300  16,257,934  —    2,926,855    3,521,300  19,184,789  22,706,089  (9,167,126)   13,538,963  —  

Coconut Palm Club

 Coconut Creek, GA 1992 300  3,001,700  17,678,928  —    2,358,855    3,001,700  20,037,783  23,039,483  (8,501,236)   14,538,247  —  

Cortona at Dana Park

 Mesa, AZ 1986 222  2,028,939  12,466,128  —    2,177,104    2,028,939  14,643,232  16,672,171  (6,687,671)   9,984,500  —  

Country Gables

 Beaverton, OR 1991 288  1,580,500  14,215,444  —    3,310,770    1,580,500  17,526,214  19,106,714  (8,770,854)   10,335,860  —  

Cove at Boynton Beach I

 Boynton Beach, FL 1996 252  12,600,000  31,469,651  —    1,963,116    12,600,000  33,432,767  46,032,767  (7,568,562)   38,464,205  —  

Cove at Boynton Beach II

 Boynton Beach, FL 1998 296  14,800,000  37,874,719  —    —      14,800,000  37,874,719  52,674,719  (8,265,424)   44,409,295  —  

Cove at Fishers Landing

 Vancouver, WA 1993 253  2,277,000  15,656,887  —    1,046,913    2,277,000  16,703,800  18,980,800  (5,093,467)   13,887,333  —  

Creekside Village

 Mountlake Terrace, WA 1987 512  2,807,600  25,270,594  —    4,346,358    2,807,600  29,616,952  32,424,552  (16,225,928)   16,198,624  —  

Crosswinds

 St. Petersburg, FL 1986 208  1,561,200  5,756,822  —    1,975,140    1,561,200  7,731,962  9,293,162  (3,908,038)   5,385,124  —  

Crown Court

 Scottsdale, AZ 1987 416  3,156,600  28,414,599  —    6,606,348    3,156,600  35,020,947  38,177,547  (15,991,526)   22,186,021  —  

Crowntree Lakes

 Orlando, FL 2008 352  12,009,630  44,407,977  —    69,018    12,009,630  44,476,995  56,486,625  (3,012,893)   53,473,732  —  

Cypress Lake at Waterford

 Orlando, FL 2001 316  7,000,000  27,654,816  —    1,266,819    7,000,000  28,921,635  35,921,635  (6,802,739)   29,118,896  —  

Dartmouth Woods

 Lakewood, CO 1990 201  1,609,800  10,832,754  —    1,667,117    1,609,800  12,499,871  14,109,671  (5,954,496)   8,155,175  —  

Dean Estates

 Taunton, MA 1984 58  498,080  3,329,560  —    596,754    498,080  3,926,314  4,424,394  (1,502,150)   2,922,244  —  

Deerwood (Corona)

 Corona, CA 1992 316  4,742,200  20,272,892  —    3,560,107    4,742,200  23,832,999  28,575,199  (10,749,018)   17,826,181  —  

Defoor Village

 Atlanta, GA 1997 156  2,966,400  10,570,210  —    1,925,681    2,966,400  12,495,891  15,462,291  (5,325,571)   10,136,720  —  

Desert Homes

 Phoenix, AZ 1982 412  1,481,050  13,390,249  —    4,286,304    1,481,050  17,676,553  19,157,603  (9,476,519)   9,681,084  —  

Eagle Canyon

 Chino Hills, CA 1985 252  1,808,900  16,274,361  —    4,785,265    1,808,900  21,059,626  22,868,526  (9,574,088)   13,294,438  —  

Ellipse at Government Center

 Fairfax, VA 1989 404  19,433,000  56,816,266  —    1,568,670    19,433,000  58,384,936  77,817,936  (5,297,483)   72,520,453  —  

Emerson Place

 Boston, MA (G) 1962 444  14,855,000  57,566,636  —    14,682,314    14,855,000  72,248,950  87,103,950  (34,480,864)   52,623,086  —  

Enclave at Lake Underhill

 Orlando, FL 1989 312  9,359,750  29,539,650  —    1,294,961    9,359,750  30,834,611  40,194,361  (5,637,816)   34,556,545  —  

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
Wholly Owned Unencumbered:                       
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
 $—
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
 —
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
 —
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
 —
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
 —
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
 —
200 N Lemon StreetAnaheim, CA (F) —
 5,865,235
 1,101,382
 —
 5,865,235
 1,101,382
 6,966,617
 —
 6,966,617
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
Belle Arts Condominium Homes, LLCBellevue, 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
 —
Berkeley LandBerkeley, CA (F) —
 13,908,910
 3,695,312
 —
 13,908,910
 3,695,312
 17,604,222
 —
 17,604,222
 —
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
 —
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, 20092012

Description

       Initial Cost to
Company		     Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)		     Gross
Amount
Carried at
Close of
Period
12/31/09		               

Apartment Name

  

Location

  Date of
Construction		 Units (H)  Land  Building &
Fixtures		  Land  Building
&
Fixtures		  Land  Building &
Fixtures (A)		  Total (B)  Accumulated
Depreciation
(C)		  Investment
in Real
Estate, Net
at 12/31/09
(B)		  Encumbrances

Enclave at Waterways

  

Deerfield Beach, FL

  1998 300  15,000,000  33,194,576  —    781,184  15,000,000  33,975,760  48,975,760  (6,419,142)  42,556,618  —  

Enclave at Winston Park

  

Coconut Creek, FL

  1995 278  5,560,000  19,939,324  —    1,897,894  5,560,000  21,837,218  27,397,218  (6,622,424)  20,774,794  —  

Enclave, The

  

Tempe, AZ

  1994 204  1,500,192  19,281,399  —    1,262,402  1,500,192  20,543,801  22,043,993  (8,743,207)  13,300,786  —  

Estates at Phipps

  

Atlanta, GA

  1996 234  9,360,000  29,705,236  —    3,470,867  9,360,000  33,176,103  42,536,103  (7,729,561)  34,806,542  —  

Estates at Wellington Green

  

Wellington, FL

  2003 400  20,000,000  64,790,850  —    1,403,085  20,000,000  66,193,935  86,193,935  (12,261,007)  73,932,928  —  

Fairfield

  

Stamford, CT (G)

  1996 263  6,510,200  39,690,120  —    4,765,044  6,510,200  44,455,164  50,965,364  (18,051,848)  32,913,516  —  

Fairland Gardens

  

Silver Spring, MD

  1981 400  6,000,000  19,972,183  —    5,715,278  6,000,000  25,687,461  31,687,461  (11,518,636)  20,168,825  —  

Four Winds

  

Fall River, MA

  1987 168  1,370,843  9,163,804  —    1,794,370  1,370,843  10,958,174  12,329,017  (3,800,504)  8,528,513  —  

Fox Hill Apartments

  

Enfield, CT

  1974 168  1,129,018  7,547,256  —    1,194,353  1,129,018  8,741,609  9,870,627  (3,077,153)  6,793,474  —  

Fox Run (WA)

  

Federal Way, WA

  1988 144  626,637  5,765,018  —    1,582,816  626,637  7,347,834  7,974,471  (4,183,905)  3,790,566  —  

Fox Run II (WA)

  

Federal Way, WA

  1988 18  80,000  1,286,139  —    53,086  80,000  1,339,225  1,419,225  (344,614)  1,074,611  —  

Gables Grand Plaza

  

Coral Gables, FL (G)

  1998 195  —    44,601,000  —    2,848,050  —    47,449,050  47,449,050  (10,729,673)  36,719,377  —  

Gallery, The

  

Hermosa Beach,CA

  1971 168  18,144,000  46,565,936  —    1,653,572  18,144,000  48,219,508  66,363,508  (7,430,603)  58,932,905  —  

Gatehouse at Pine Lake

  

Pembroke Pines, FL

  1990 296  1,896,600  17,070,795  —    3,051,027  1,896,600  20,121,822  22,018,422  (9,575,033)  12,443,389  —  

Gatehouse on the Green

  

Plantation, FL

  1990 312  2,228,200  20,056,270  —    5,634,556  2,228,200  25,690,826  27,919,026  (11,367,821)  16,551,205  —  

Gates of Redmond

  

Redmond, WA

  1979 180  2,306,100  12,064,015  —    4,544,531  2,306,100  16,608,546  18,914,646  (6,658,911)  12,255,735  —  

Gatewood

  

Pleasanton, CA

  1985 200  6,796,511  20,249,392  —    3,006,599  6,796,511  23,255,991  30,052,502  (5,921,073)  24,131,429  —  

Glen Grove

  

Wellesley, MA

  1979 125  1,344,601  8,988,383  —    1,053,731  1,344,601  10,042,114  11,386,715  (3,460,902)  7,925,813  —  

Governors Green

  

Bowie, MD

  1999 478  19,845,000  73,335,916  —    318,081  19,845,000  73,653,997  93,498,997  (7,109,168)  86,389,829  —  

Greenfield Village

  

Rocky Hill, CT

  1965 151  911,534  6,093,418  —    596,950  911,534  6,690,368  7,601,902  (2,402,735)  5,199,167  —  

Hamilton Villas

  

Beverly Hills, CA

  1990 35  7,772,000  16,864,269  —    977,701  7,772,000  17,841,970  25,613,970  (1,311,689)  24,302,281  —  

Hammocks Place

  

Miami, FL

  1986 296  319,180  12,513,467  —    2,935,606  319,180  15,449,073  15,768,253  (8,983,699)  6,784,554  —  

Hamptons

  

Puyallup, WA

  1991 230  1,119,200  10,075,844  —    1,638,725  1,119,200  11,714,569  12,833,769  (5,534,580)  7,299,189  —  

Heritage Ridge

  

Lynwood, WA

  1999 197  6,895,000  18,983,597  —    366,008  6,895,000  19,349,605  26,244,605  (4,056,716)  22,187,889  —  

Heritage, The

  

Phoenix, AZ

  1995 204  1,209,705  13,136,903  —    1,281,489  1,209,705  14,418,392  15,628,097  (6,251,691)  9,376,406  —  

Heron Pointe

  

Boynton Beach, FL

  1989 192  1,546,700  7,774,676  —    1,771,988  1,546,700  9,546,664  11,093,364  (4,639,319)  6,454,045  —  

Hidden Oaks

  

Cary, NC

  1988 216  1,178,600  10,614,135  —    2,476,030  1,178,600  13,090,165  14,268,765  (6,307,228)  7,961,537  —  

High Meadow

  

Ellington, CT

  1975 100  583,679  3,901,774  —    696,440  583,679  4,598,214  5,181,893  (1,587,808)  3,594,085  —  

Highland Glen

  

Westwood, MA

  1979 180  2,229,095  16,828,153  —    2,005,767  2,229,095  18,833,920  21,063,015  (6,234,341)  14,828,674  —  

Highland Glen II

  

Westwood, MA

  2007 102  —    19,875,857  —    44,875  —    19,920,732  19,920,732  (1,992,465)  17,928,267  —  

Highlands, The

  

Scottsdale, AZ

  1990 272  11,823,840  31,990,970  —    2,708,673  11,823,840  34,699,643  46,523,483  (6,040,555)  40,482,928  —  

Hudson Crossing

  

New York, NY (G)

  2003 259  23,420,000  70,086,976  —    697,517  23,420,000  70,784,493  94,204,493  (13,757,398)  80,447,095  —  

Hudson Pointe

  

Jersey City, NJ

  2003 182  5,148,500  41,145,919  —    549,664  5,148,500  41,695,583  46,844,083  (8,757,283)  38,086,800  —  

Hunt Club II

  

Charlotte, NC

  (F) —    100,000  —    —    —    100,000  —    100,000  —     100,000  —  

Huntington Park

  

Everett, WA

  1991 381  1,597,500  14,367,864  —    3,365,663  1,597,500  17,733,527  19,331,027  (10,099,086)  9,231,941  —  

Indian Bend

  

Scottsdale, AZ

  1973 278  1,075,700  9,800,330  —    2,932,003  1,075,700  12,732,333  13,808,033  (7,600,280)  6,207,753  —  

Iron Horse Park

  

Pleasant Hill, CA

  1973 252  15,000,000  24,335,549  —    7,666,475  15,000,000  32,002,024  47,002,024  (6,129,079)  40,872,945  —  

Isle at Arrowhead Ranch

  

Glendale, AZ

  1996 256  1,650,237  19,593,123  —    1,489,397  1,650,237  21,082,520  22,732,757  (9,056,274)  13,676,483  —  

Kempton Downs

  

Gresham, OR

  1990 278  1,217,349  10,943,372  —    2,591,825  1,217,349  13,535,197  14,752,546  (7,484,322)  7,268,224  —  

Kenwood Mews

  

Burbank, CA

  1991 141  14,100,000  24,662,883  —    1,083,935  14,100,000  25,746,818  39,846,818  (4,004,773)  35,842,045  —  

Key Isle at Windermere

  

Ocoee, FL

  2000 282  8,460,000  31,761,470  —    1,065,103  8,460,000  32,826,573  41,286,573  (5,594,683)  35,691,890  —  

Key Isle at Windermere II

  

Ocoee, FL

  2008 165  3,306,286  24,519,643  —    21,532  3,306,286  24,541,175  27,847,461  (1,128,376)  26,719,085  —  

Kings Colony (FL)

  

Miami, FL

  1986 480  19,200,000  48,379,586  —    2,166,770  19,200,000  50,546,356  69,746,356  (9,764,478)  59,981,878  —  

La Mirage

  

San Diego, CA

  1988/1992 1,070  28,895,200  95,567,943  —    11,944,873  28,895,200  107,512,816  136,408,016  (47,505,193)  88,902,823  —  

La Mirage IV

  

San Diego, CA

  2001 340  6,000,000  47,449,353  —    2,281,163  6,000,000  49,730,516  55,730,516  (14,335,799)  41,394,717  —  

Laguna Clara

  

Santa Clara, CA

  1972 264  13,642,420  29,707,475  —    2,734,032  13,642,420  32,441,507  46,083,927  (7,744,190)  38,339,737  —  

Lake Buena Vista Combined

  

Orlando, FL

  2000/2002 672  23,520,000  75,068,206  —    3,308,158  23,520,000  78,376,364  101,896,364  (14,053,589)  87,842,775  —  

Landings at Pembroke Lakes

  

Pembroke Pines, FL

  1989 358  17,900,000  24,460,989  —    4,685,147  17,900,000  29,146,136  47,046,136  (5,719,019)  41,327,117  —  

Landings at Port Imperial

  

W. New York, NJ

  1999 276  27,246,045  37,741,050  —    6,181,520  27,246,045  43,922,570  71,168,615  (13,437,378)  57,731,237  —  

Las Colinas at Black Canyon

  

Phoenix, AZ

  2008 304  9,000,000  35,917,811  —    44,291  9,000,000  35,962,102  44,962,102  (2,585,056)  42,377,046  —  

Laurel Ridge II

  

Chapel Hill, NC

  (F) —    22,551  —    —    —    22,551  —    22,551  —     22,551  —  

Legacy Park Central

  

Concord, CA

  2003 259  6,469,230  46,745,854  —    251,005  6,469,230  46,996,859  53,466,089  (9,193,887)  44,272,202  —  

Legends at Preston

  

Morrisville, NC

  2000 382  3,055,906  27,150,092  —    1,175,737  3,055,906  28,325,829  31,381,735  (9,518,337)  21,863,398  —  

Lexington Farm

  

Alpharetta, GA

  1995 352  3,521,900  22,888,305  —    2,317,314  3,521,900  25,205,619  28,727,519  (10,196,908)  18,530,611  —  

Lexington Park

  

Orlando, FL

  1988 252  2,016,000  12,346,726  —    2,324,817  2,016,000  14,671,543  16,687,543  (6,466,654)  10,220,889  —  

Little Cottonwoods

  

Tempe, AZ

  1984 379  3,050,133  26,991,689  —    3,226,961  3,050,133  30,218,650  33,268,783  (13,335,382)  19,933,401  —  

Longfellow Place

  

Boston, MA (G)

  1975 710  53,164,160  183,940,619  —    39,573,010  53,164,160  223,513,629  276,677,789  (87,210,195)  189,467,594  —  

Longwood

  

Decatur, GA

  1992 268  1,454,048  13,087,393  —    1,879,528  1,454,048  14,966,921  16,420,969  (8,242,200)  8,178,769  —  

Mariners Wharf

  

Orange Park, FL

  1989 272  1,861,200  16,744,951  —    3,076,406  1,861,200  19,821,357  21,682,557  (8,833,950)  12,848,607  —  

Marquessa

  

Corona Hills, CA

  1992 336  6,888,500  21,604,584  —    2,594,899  6,888,500  24,199,483  31,087,983  (10,949,316)  20,138,667  —  

Martha Lake

  

Lynnwood, WA

  1991 155  821,200  7,405,070  —    1,849,271  821,200  9,254,341  10,075,541  (4,575,580)  5,499,961  —  

Merritt at Satellite Place

  

Duluth, GA

  1999 424  3,400,000  30,115,674  —    2,356,486  3,400,000  32,472,160  35,872,160  (11,768,290)  24,103,870  —  

Martine, The

  

Bellevue, WA

  1984 67  3,200,000  9,616,264  —    2,566,663  3,200,000  12,182,927  15,382,927  (1,206,954)  14,175,973  —  

Miramar Lakes

  

Miramar, FL

  2003 344  17,200,000  51,487,235  —    1,102,487  17,200,000  52,589,722  69,789,722  (8,773,404)  61,016,318  —  

Mira Flores

  

Palm Beach Gardens, FL

  1996 352  7,039,313  22,515,299  —    1,983,657  7,039,313  24,498,956  31,538,269  (7,479,514)  24,058,755  —  

Mission Bay

  

Orlando, FL

  1991 304  2,432,000  21,623,560  —    2,399,486  2,432,000  24,023,046  26,455,046  (9,868,906)  16,586,140  —  

Mission Verde, LLC

  

San Jose, CA

  1986 108  5,190,700  9,679,109  —    3,096,413  5,190,700  12,775,522  17,966,222  (4,872,692)  13,093,530  —  

Morningside

  

Scottsdale, AZ

  1989 160  670,470  12,607,976  —    1,505,060  670,470  14,113,036  14,783,506  (6,186,636)  8,596,870  —  

Mosaic at Largo Station

  

Hyattsville, MD

  2008 240  4,120,800  41,454,841  —    10,342  4,120,800  41,465,183  45,585,983  (158,486)  45,427,497  —  

Mozaic at Union Station

  

Los Angeles, CA

  2007 272  8,500,000  53,033,269  —    331,846  8,500,000  53,365,115  61,865,115  (6,727,845)  55,137,270  —  

Nehoiden Glen

  

Needham, MA

  1978 61  634,538  4,241,755  —    774,820  634,538  5,016,575  5,651,113  (1,782,807)  3,868,306  —  

New River Cove

  

Davie, FL

  1999 316  15,800,000  46,142,895  —    957,689  15,800,000  47,100,584  62,900,584  (7,998,770)  54,901,814  —  

Northglen

  

Valencia, CA

  1988 234  9,360,000  20,778,553  —    1,602,779  9,360,000  22,381,332  31,741,332  (7,395,933)  24,345,399  —  

Northampton 1

  

Largo, MD

  1977 344  1,843,200  17,528,381  —    5,444,653  1,843,200  22,973,034  24,816,234  (13,289,953)  11,526,281  —  

Northampton 2

  

Largo, MD

  1988 276  1,513,500  14,246,990  —    3,369,035  1,513,500  17,616,025  19,129,525  (9,812,176)  9,317,349  —  

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
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
 —
Bridford Lakes IIGreensboro, NC (F) —
 1,100,564
 792,509
 —
 1,100,564
 792,509
 1,893,073
 —
 1,893,073
 —
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
 —
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
 —
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
 —
CascadeSeattle, WA (F) —
 12,198,278
 1,602,237
 —
 12,198,278
 1,602,237
 13,800,515
 —
 13,800,515
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —



S-5

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation

December 31, 20092012

Description

       Initial Cost to
Company		     Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)		     Gross
Amount
Carried at
Close of
Period
12/31/09		               

Apartment Name

  

Location

  Date of
Construction		 Units (H)  Land  Building &
Fixtures		  Land  Building &
Fixtures		  Land  Building &
Fixtures (A)		  Total (B)  Accumulated
Depreciation
(C)		  Investment
in Real
Estate, Net
at 12/31/09
(B)		  Encumbrances

Northlake (MD)

  Germantown, MD  1985 304  15,000,000  23,142,302  —    9,697,260  15,000,000  32,839,562  47,839,562  (7,891,239)  39,948,323  —  

Northridge

  Pleasant Hill, CA  1974 221  5,527,800  14,691,705  —    7,715,193  5,527,800  22,406,898  27,934,698  (8,425,802)  19,508,896  —  

Northwoods Village

  Cary, NC  1986 228  1,369,700  11,460,337  —    2,610,237  1,369,700  14,070,574  15,440,274  (6,752,161)  8,688,113  —  

Oaks at Falls Church

  Falls Church, VA  1966 176  20,240,000  20,152,616  —    3,394,318  20,240,000  23,546,934  43,786,934  (4,408,080)  39,378,854  —  

Ocean Crest

  Solana Beach, CA  1986 146  5,111,200  11,910,438  —    1,947,033  5,111,200  13,857,471  18,968,671  (5,897,647)  13,071,024  —  

Ocean Walk

  Key West, FL  1990 297  2,838,749  25,545,009  —    3,098,120  2,838,749  28,643,129  31,481,878  (12,439,731)  19,042,147  —  

Olympus Towers

  Seattle, WA (G)  2000 328  14,752,034  73,335,425  —    1,849,065  14,752,034  75,184,490  89,936,524  (16,755,783)  73,180,741  —  

Orchard Ridge

  Lynnwood, WA  1988 104  480,600  4,372,033  —    1,004,299  480,600  5,376,332  5,856,932  (3,079,942)  2,776,990  —  

Overlook Manor

  Frederick, MD  1980/1985 108  1,299,100  3,930,931  —    1,966,419  1,299,100  5,897,350  7,196,450  (2,971,040)  4,225,410  —  

Overlook Manor II

  Frederick, MD  1980/1985 182  2,186,300  6,262,597  —    1,068,523  2,186,300  7,331,120  9,517,420  (3,190,682)  6,326,738  —  

Paces Station

  Atlanta, GA  1984-1989 610  4,801,500  32,548,053  —    7,451,186  4,801,500  39,999,239  44,800,739  (19,151,572)  25,649,167  —  

Palm Trace Landings

  Davie, FL  1995 768  38,400,000  105,693,432  —    2,255,576  38,400,000  107,949,008  146,349,008  (18,165,757)  128,183,251  —  

Panther Ridge

  Federal Way, WA  1980 260  1,055,800  9,506,117  —    1,749,644  1,055,800  11,255,761  12,311,561  (5,441,588)  6,869,973  —  

Parc 77

  New York, NY (G)  1903 137  40,504,000  18,025,679  —    3,834,198  40,504,000  21,859,877  62,363,877  (3,483,681)  58,880,196  —  

Parc Cameron

  New York, NY (G)  1927 166  37,600,000  9,855,597  —    4,598,285  37,600,000  14,453,882  52,053,882  (2,690,596)  49,363,286  —  

Parc Coliseum

  New York, NY (G)  1910 177  52,654,000  23,045,751  —    6,544,183  52,654,000  29,589,934  82,243,934  (4,544,383)  77,699,551  —  

Park at Turtle Run, The

  Coral Springs, FL  2001 257  15,420,000  36,064,629  —    845,589  15,420,000  36,910,218  52,330,218  (7,548,286)  44,781,932  —  

Park West (CA)

  Los Angeles, CA  1987/1990 444  3,033,500  27,302,383  —    5,240,630  3,033,500  32,543,013  35,576,513  (16,609,126)  18,967,387  —  

Parkside

  Union City, CA  1979 208  6,246,700  11,827,453  —    3,117,566  6,246,700  14,945,019  21,191,719  (7,161,870)  14,029,849  —  

Parkview Terrace

  Redlands, CA  1986 558  4,969,200  35,653,777  —    11,145,688  4,969,200  46,799,465  51,768,665  (20,005,489)  31,763,176  —  

Phillips Park

  Wellesley, MA  1988 49  816,922  5,460,955  —    922,418  816,922  6,383,373  7,200,295  (2,187,540)  5,012,755  —  

Pine Harbour

  Orlando, FL  1991 366  1,664,300  14,970,915  —    3,397,750  1,664,300  18,368,665  20,032,965  (10,499,000)  9,533,965  —  

Playa Pacifica

  Hermosa Beach, CA  1972 285  35,100,000  33,473,822  —    7,033,511  35,100,000  40,507,333  75,607,333  (8,295,185)  67,312,148  —  

Pointe at South Mountain

  Phoenix, AZ  1988 364  2,228,800  20,059,311  —    3,062,291  2,228,800  23,121,602  25,350,402  (10,925,588)  14,424,814  —  

Polos East

  Orlando, FL  1991 308  1,386,000  19,058,620  —    1,985,856  1,386,000  21,044,476  22,430,476  (8,749,587)  13,680,889  —  

Port Royale

  Ft. Lauderdale, FL (G)  1988 252  1,754,200  15,789,873  —    7,046,148  1,754,200  22,836,021  24,590,221  (11,433,671)  13,156,550  —  

Port Royale II

  Ft. Lauderdale, FL (G)  1988 161  1,022,200  9,203,166  —    4,361,815  1,022,200  13,564,981  14,587,181  (6,425,531)  8,161,650  —  

Port Royale III

  Ft. Lauderdale, FL (G)  1988 324  7,454,900  14,725,802  —    8,250,546  7,454,900  22,976,348  30,431,248  (10,185,647)  20,245,601  —  

Port Royale IV

  Ft. Lauderdale, FL  (F) —    —    142,528  —    —    —    142,528  142,528  —     142,528  —  

Portofino

  Chino Hills, CA  1989 176  3,572,400  14,660,994  —    1,641,168  3,572,400  16,302,162  19,874,562  (7,223,146)  12,651,416  —  

Portofino (Val)

  Valencia, CA  1989 216  8,640,000  21,487,126  —    2,208,725  8,640,000  23,695,851  32,335,851  (7,807,751)  24,528,100  —  

Portside Towers

  Jersey City, NJ (G)  1992-1997 527  22,487,006  96,842,913  —    11,875,240  22,487,006  108,718,153  131,205,159  (42,913,617)  88,291,542  —  

Preserve at Deer Creek

  Deerfield Beach, FL  1997 540  13,500,000  60,011,208  —    2,557,136  13,500,000  62,568,344  76,068,344  (14,375,360)  61,692,984  —  

Prime, The

  Arlington, VA  2002 256  32,000,000  64,436,539  —    522,323  32,000,000  64,958,862  96,958,862  (9,409,731)  87,549,131  —  

Promenade (FL)

  St. Petersburg, FL  1994 334  2,124,193  25,804,037  —    3,774,704  2,124,193  29,578,741  31,702,934  (12,495,571)  19,207,363  —  

Promenade at Aventura

  Aventura, FL  1995 296  13,320,000  30,353,748  —    3,374,189  13,320,000  33,727,937  47,047,937  (10,875,031)  36,172,906  —  

Promenade at Town Center I

  Valencia, CA  2001 294  14,700,000  35,390,279  —    2,555,285  14,700,000  37,945,564  52,645,564  (8,819,478)  43,826,086  —  

Promenade at Wyndham Lakes

  Coral Springs, FL  1998 332  6,640,000  26,743,760  —    2,106,433  6,640,000  28,850,193  35,490,193  (9,789,644)  25,700,549  —  

Promenade Terrace

  Corona, CA  1990 330  2,272,800  20,546,289  —    4,316,282  2,272,800  24,862,571  27,135,371  (12,475,798)  14,659,573  —  

Promontory Pointe I & II

  Phoenix, AZ  1984/1996 424  2,355,509  30,421,840  —    3,542,728  2,355,509  33,964,568  36,320,077  (15,008,498)  21,311,579  —  

Prospect Towers

  Hackensack, NJ  1995 157  3,926,600  27,966,416  —    2,794,496  3,926,600  30,760,912  34,687,512  (13,584,344)  21,103,168  —  

Prospect Towers II

  Hackensack, NJ  2002 203  4,500,000  33,104,733  —    1,488,208  4,500,000  34,592,941  39,092,941  (9,533,531)  29,559,410 ��—  

Ravens Crest

  Plainsboro, NJ  1984 704  4,670,850  42,080,642  —    11,462,120  4,670,850  53,542,762  58,213,612  (29,187,236)  29,026,376  —  

Redlands Lawn and Tennis

  Redlands, CA  1986 496  4,822,320  26,359,328  —    4,161,437  4,822,320  30,520,765  35,343,085  (13,646,850)  21,696,235  —  

Redmond Ridge

  Redmond, WA  2008 321  6,975,705  46,175,001  —    45,624  6,975,705  46,220,625  53,196,330  (2,843,477)  50,352,853  —  

Redmond Way

  Redmond, WA  (F) —    15,546,376  36,373,555  —    —    15,546,376  36,373,555  51,919,931  —     51,919,931  —  

Regency Palms

  Huntington Beach, CA  1969 310  1,857,400  16,713,254  —    3,712,651  1,857,400  20,425,905  22,283,305  (10,614,152)  11,669,153  —  

Regency Park

  Centreville, VA  1989 252  2,521,500  16,200,666  —    7,636,375  2,521,500  23,837,041  26,358,541  (10,358,549)  15,999,992  —  

Remington Place

  Phoenix, AZ  1983 412  1,492,750  13,377,478  —    4,275,847  1,492,750  17,653,325  19,146,075  (9,565,200)  9,580,875  —  

Reserve at Town Center

  Loudon, VA  2002 290  3,144,056  27,669,121  —    627,250  3,144,056  28,296,371  31,440,427  (6,416,926)  25,023,501  —  

Reserve at Town Center II (WA)

  Mill Creek, WA  2009 100  4,310,417  16,280,257  —    —    4,310,417  16,280,257  20,590,674  —     20,590,674  —  

Residences at Little River

  Haverhill, MA  2003 174  6,905,138  19,172,747  —    444,129  6,905,138  19,616,876  26,522,014  (4,698,067)  21,823,947  —  

Retreat, The

  Phoenix, AZ  1999 480  3,475,114  27,265,252  —    2,167,531  3,475,114  29,432,783  32,907,897  (11,185,912)  21,721,985  —  

Ridgewood Village I&II

  San Diego, CA  1997 408  11,809,500  34,004,048  —    1,624,481  11,809,500  35,628,529  47,438,029  (12,773,079)  34,664,950  —  

Riverview Condominiums

  Norwalk, CT  1991 92  2,300,000  7,406,730  —    1,712,052  2,300,000  9,118,782  11,418,782  (3,779,661)  7,639,121  —  

Rivers Bend (CT)

  Windsor, CT  1973 373  3,325,517  22,573,826  —    2,602,203  3,325,517  25,176,029  28,501,546  (8,625,745)  19,875,801  —  

Rosecliff

  Quincy, MA  1990 156  5,460,000  15,721,570  —    1,295,669  5,460,000  17,017,239  22,477,239  (6,067,378)  16,409,861  —  

Royal Oaks (FL)

  Jacksonville, FL  1991 284  1,988,000  13,645,117  —    3,269,729  1,988,000  16,914,846  18,902,846  (6,963,204)  11,939,642  —  

Sabal Palm at Boot Ranch

  Palm Harbor, FL  1996 432  3,888,000  28,923,692  —    3,083,909  3,888,000  32,007,601  35,895,601  (13,001,205)  22,894,396  —  

Sabal Palm at Carrollwood Place

  Tampa, FL  1995 432  3,888,000  26,911,542  —    2,387,547  3,888,000  29,299,089  33,187,089  (11,825,739)  21,361,350  —  

Sabal Palm at Lake Buena Vista

  Orlando, FL  1988 400  2,800,000  23,687,893  —    2,974,366  2,800,000  26,662,259  29,462,259  (11,110,613)  18,351,646  —  

Sabal Palm at Metrowest

  Orlando, FL  1998 411  4,110,000  38,394,865  —    3,337,848  4,110,000  41,732,713  45,842,713  (16,831,065)  29,011,648  —  

Sabal Palm at Metrowest II

  Orlando, FL  1997 456  4,560,000  33,907,283  —    2,360,731  4,560,000  36,268,014  40,828,014  (14,449,667)  26,378,347  —  

Sabal Pointe

  Coral Springs, FL  1995 275  1,951,600  17,570,508  —    3,777,034  1,951,600  21,347,542  23,299,142  (10,648,877)  12,650,265  —  

Saddle Ridge

  Ashburn, VA  1989 216  1,364,800  12,283,616  —    1,990,344  1,364,800  14,273,960  15,638,760  (7,367,887)  8,270,873  —  

Sage Condominium Homes, LLC

  Everett, WA  2002 123  2,500,000  12,021,256  —    376,058  2,500,000  12,397,314  14,897,314  (1,840,905)  13,056,409  —  

Savannah at Park Place

  Atlanta, GA  2001 416  7,696,095  34,114,542  —    2,525,953  7,696,095  36,640,495  44,336,590  (8,703,451)  35,633,139  —  

Scarborough Square

  Rockville, MD  1967 121  1,815,000  7,608,126  —    2,261,643  1,815,000  9,869,769  11,684,769  (4,450,136)  7,234,633  —  

Sedona Ridge

  Phoenix, AZ  1989 250  3,750,000  14,750,000  —    18,442  3,750,000  14,768,442  18,518,442  (544,735)  17,973,707  —  

Savoy III

  Aurora, CO  (F) —    659,165  2,166,017  —    —    659,165  2,166,017  2,825,182  —     2,825,182  —  

Seeley Lake

  Lakewood, WA  1990 522  2,760,400  24,845,286  —    3,617,319  2,760,400  28,462,605  31,223,005  (13,264,730)  17,958,275  —  

Seventh & James

  Seattle, WA  1992 96  663,800  5,974,803  —    2,468,264  663,800  8,443,067  9,106,867  (4,448,122)  4,658,745  —  

Shadow Creek

  Winter Springs, FL  2000 280  6,000,000  21,719,768  —    1,194,699  6,000,000  22,914,467  28,914,467  (5,452,780)  23,461,687  —  

Sheridan Lake Club

  Dania Beach, FL  2001 240  12,000,000  23,170,580  —    778,994  12,000,000  23,949,574  35,949,574  (3,663,655)  32,285,919  —  

Sheridan Ocean Club combined

  Dania Beach, FL  1991 648  18,313,414  47,091,593  —    12,407,259  18,313,414  59,498,852  77,812,266  (17,823,519)  59,988,747  —  

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
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
Highland Glen IIWestwood, MA 2007 102
 —
 19,875,857
 127,705
 —
 20,003,562
 20,003,562
 (4,417,064) 15,586,498
 —
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
 —
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
 —
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
 —
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
 —
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
 —
Hunt Club IICharlotte, 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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —


S-6

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation

December 31, 20092012

Description

       Initial Cost to
Company		     Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)		     Gross
Amount
Carried at
Close of
Period
12/31/09		                

Apartment Name

  

Location

  Date of
Construction		 Units (H)  Land  Building &
Fixtures		  Land  Building &
Fixtures		  Land  Building &
Fixtures (A)		  Total (B)  Accumulated
Depreciation
(C)		  Investment
in Real
Estate, Net
at 12/31/09
(B)		  Encumbrances 

Siena Terrace

  Lake Forest, CA  1988 356  8,900,000  24,083,024  —    2,547,877  8,900,000  26,630,901  35,530,901  (10,596,345)  24,934,556  —    

Silver Springs (FL)

  Jacksonville, FL  1985 432  1,831,100  16,474,735  —    5,408,626  1,831,100  21,883,361  23,714,461  (11,412,359)  12,302,102  —    

Skycrest

  Valencia, CA  1999 264  10,560,000  25,574,457  —    1,758,054  10,560,000  27,332,511  37,892,511  (8,945,189)  28,947,322  —    

Skylark

  Union City, CA  1986 174  1,781,600  16,731,916  —    1,499,502  1,781,600  18,231,418  20,013,018  (7,468,722)  12,544,296  —    

Skyview

  Rancho Santa Margarita, CA  1999 260  3,380,000  21,952,863  —    1,507,829  3,380,000  23,460,692  26,840,692  (8,732,779)  18,107,913  —    

Sonoran

  Phoenix, AZ  1995 429  2,361,922  31,841,724  —    2,524,732  2,361,922  34,366,456  36,728,378  (14,770,068)  21,958,310  —    

Southwood

  Palo Alto, CA  1985 100  6,936,600  14,324,069  —    1,782,759  6,936,600  16,106,828  23,043,428  (6,885,238)  16,158,190  —    

Springbrook Estates

  Riverside, CA  (F) —    18,200,000  —    —    —    18,200,000  —    18,200,000  —     18,200,000  —    

St. Andrews at Winston Park

  Coconut Creek, FL  1997 284  5,680,000  19,812,090  —    1,942,381  5,680,000  21,754,471  27,434,471  (6,624,247)  20,810,224  —    

Stoney Creek

  Lakewood, WA  1990 231  1,215,200  10,938,134  —    2,121,875  1,215,200  13,060,009  14,275,209  (6,132,019)  8,143,190  —    

Summerset Village II

  Chatsworth, CA  (F) —    260,646  —    —    —    260,646  —    260,646  —     260,646  —    

Summerwood

  Hayward, CA  1982 162  4,810,644  6,942,743  —    1,996,377  4,810,644  8,939,120  13,749,764  (3,817,956)  9,931,808  —    

Summit & Birch Hill

  Farmington, CT  1967 186  1,757,438  11,748,112  —    2,822,425  1,757,438  14,570,537  16,327,975  (5,015,197)  11,312,778  —    

Summit at Lake Union

  Seattle, WA  1995-1997 150  1,424,700  12,852,461  —    2,626,761  1,424,700  15,479,222  16,903,922  (7,048,726)  9,855,196  —    

Sunforest II

  Davie, FL  (F) —    —    122,455    —    —    122,455  122,455  —     122,455  —    

Surrey Downs

  Bellevue, WA  1986 122  3,057,100  7,848,618  —    1,671,867  3,057,100  9,520,485  12,577,585  (3,884,938)  8,692,647  —    

Sycamore Creek

  Scottsdale, AZ  1984 350  3,152,000  19,083,727  —    2,905,652  3,152,000  21,989,379  25,141,379  (10,075,700)  15,065,679  —    

Tanasbourne Terrace

  Hillsboro, OR  1986-1989 373  1,876,700  16,891,205  —    3,652,548  1,876,700  20,543,753  22,420,453  (11,647,285)  10,773,168  —    

Third Square

  Cambridge, MA (G)  2008/2009 482  27,812,384  228,450,904  —    35,771  27,812,384  228,486,675  256,299,059  (7,382,758)  248,916,301  —    

Timber Hollow

  Chapel Hill, NC  1986 198  800,000  11,219,537  —    1,766,324  800,000  12,985,861  13,785,861  (5,485,923)  8,299,938  —    

Tortuga Bay

  Orlando, FL  2004 314  6,280,000  32,121,779  —    906,989  6,280,000  33,028,768  39,308,768  (6,712,448)  32,596,320  —    

Toscana

  Irvine, CA  1991/1993 563  39,410,000  50,806,072  —    5,964,389  39,410,000  56,770,461  96,180,461  (19,353,127)  76,827,334  —    

Townes at Herndon

  Herndon, VA  2002 218  10,900,000  49,216,125  —    479,074  10,900,000  49,695,199  60,595,199  (8,314,817)  52,280,382  —    

Trump Place, 140 Riverside

  New York, NY (G)  2003 354  103,539,100  94,082,725  —    1,147,155  103,539,100  95,229,880  198,768,980  (16,744,933)  182,024,047  —    

Trump Place, 160 Riverside

  New York, NY (G)  2001 455  139,933,500  190,964,745  —    2,786,715  139,933,500  193,751,460  333,684,960  (32,180,526)  301,504,434  —    

Trump Place, 180 Riverside

  New York, NY (G)  1998 516  144,968,250  138,346,681  —    3,748,129  144,968,250  142,094,810  287,063,060  (25,082,865)  261,980,195  —    

Uwajimaya Village

  Seattle, WA  2002 176  8,800,000  22,188,288  —    92,029  8,800,000  22,280,317  31,080,317  (4,706,104)  26,374,213  —    

Valencia Plantation

  Orlando, FL  1990 194  873,000  12,819,377  —    1,921,044  873,000  14,740,421  15,613,421  (5,774,560)  9,838,861  —    

Victor on Venice

  Los Angeles, CA (G)  2006 115  10,350,000  35,431,742  —    88,033  10,350,000  35,519,775  45,869,775  (4,843,395)  41,026,380  —    

View Pointe

  Riverside, CA  1998 208  10,400,000  26,315,150  —    1,200,000  10,400,000  27,515,150  37,915,150  (5,030,516)  32,884,634  —    

Villa Encanto

  Phoenix, AZ  1983 385  2,884,447  22,197,363  —    3,276,624  2,884,447  25,473,987  28,358,434  (11,669,028)  16,689,406  —    

Villa Solana

  Laguna Hills, CA  1984 272  1,665,100  14,985,678  —    4,647,822  1,665,100  19,633,500  21,298,600  (11,446,894)  9,851,706  —    

Village at Bear Creek

  Lakewood, CO  1987 472  4,519,700  40,676,390  —    3,446,379  4,519,700  44,122,769  48,642,469  (19,617,360)  29,025,109  —    

Virgil Square

  Los Angeles, CA  1979 142  5,500,000  15,216,613  —    1,194,964  5,500,000  16,411,577  21,911,577  (3,276,237)  18,635,340  —    

Vista Del Lago

  Mission Viejo, CA  1986-1988 608  4,525,800  40,736,293  —    9,202,410  4,525,800  49,938,703  54,464,503  (28,141,470)  26,323,033  —    

Vista Grove

  Mesa, AZ  1997/1998 224  1,341,796  12,157,045  —    1,158,364  1,341,796  13,315,409  14,657,205  (5,725,705)  8,931,500  —    

Waterford at Deerwood

  Jacksonville, FL  1985 248  1,496,913  10,659,702  —    3,166,991  1,496,913  13,826,693  15,323,606  (6,052,132)  9,271,474  —    

Waterford at Orange Park

  Orange Park, FL  1986 280  1,960,000  12,098,784  —    2,721,636  1,960,000  14,820,420  16,780,420  (6,819,468)  9,960,952  —    

Waterford Place (CO)

  Thornton, CO  1998 336  5,040,000  29,733,022  —    1,152,921  5,040,000  30,885,943  35,925,943  (7,873,544)  28,052,399  —    

Waterside

  Reston, VA  1984 276  20,700,000  27,474,388  —    7,037,810  20,700,000  34,512,198  55,212,198  (7,063,776)  48,148,422  —    

Webster Green

  Needham, MA  1985 77  1,418,893  9,485,006  —    851,893  1,418,893  10,336,899  11,755,792  (3,455,161)  8,300,631  —    

Welleby Lake Club

  Sunrise, FL  1991 304  3,648,000  17,620,879  —    2,896,482  3,648,000  20,517,361  24,165,361  (8,470,303)  15,695,058  —    

West End Apartments (fka Emerson Place/CRP II)

  Boston, MA (G)  2008 310  469,546  163,121,700  —    300,299  469,546  163,421,999  163,891,545  (9,456,706)  154,434,839  —    

Westerly at Worldgate

  Herndon, VA  1995 320  14,568,000  43,620,057  —    859,340  14,568,000  44,479,397  59,047,397  (4,062,187)  54,985,210  —    

Westfield Village

  Centerville, VA  1988 228  7,000,000  23,245,834  —    4,437,615  7,000,000  27,683,449  34,683,449  (7,013,888)  27,669,561  —    

Westridge

  Tacoma, WA  1987-1991 714  3,501,900  31,506,082  —    6,129,283  3,501,900  37,635,365  41,137,265  (17,640,937)  23,496,328  —    

Westside Villas I

  Los Angeles, CA  1999 21  1,785,000  3,233,254  —    248,083  1,785,000  3,481,337  5,266,337  (1,205,850)  4,060,487  —    

Westside Villas II

  Los Angeles, CA  1999 23  1,955,000  3,541,435  —    121,761  1,955,000  3,663,196  5,618,196  (1,172,721)  4,445,475  —    

Westside Villas III

  Los Angeles, CA  1999 36  3,060,000  5,538,871  —    175,353  3,060,000  5,714,224  8,774,224  (1,839,758)  6,934,466  —    

Westside Villas IV

  Los Angeles, CA  1999 36  3,060,000  5,539,389  —    183,800  3,060,000  5,723,189  8,783,189  (1,829,435)  6,953,754  —    

Westside Villas V

  Los Angeles, CA  1999 60  5,100,000  9,224,485  —    321,252  5,100,000  9,545,737  14,645,737  (3,065,130)  11,580,607  —    

Westside Villas VI

  Los Angeles, CA  1989 18  1,530,000  3,023,523  —    217,852  1,530,000  3,241,375  4,771,375  (1,059,794)  3,711,581  —    

Westside Villas VII

  Los Angeles, CA  2001 53  4,505,000  10,758,900  —    319,584  4,505,000  11,078,484  15,583,484  (2,980,705)  12,602,779  —    

Whispering Oaks

  Walnut Creek, CA  1974 316  2,170,800  19,539,586  —    4,514,721  2,170,800  24,054,307  26,225,107  (11,707,288)  14,517,819  —    

Wimberly at Deerwood

  Jacksonville, FL  2000 322  8,000,000  30,057,214  —    1,290,981  8,000,000  31,348,195  39,348,195  (5,763,793)  33,584,402  —    

Winchester Park

  Riverside, RI  1972 416  2,822,618  18,868,626  —    4,975,882  2,822,618  23,844,508  26,667,126  (9,209,494)  17,457,632  —    

Winchester Wood

  Riverside, RI  1989 62  683,215  4,567,154  —    734,109  683,215  5,301,263  5,984,478  (1,778,201)  4,206,277  —    

Windsor at Fair Lakes

  Fairfax, VA  1988 250  10,000,000  28,587,109  —    4,899,725  10,000,000  33,486,834  43,486,834  (7,949,681)  35,537,153  —    

Winston, The (FL)

  Pembroke Pines, FL  2001/2003 464  18,561,000  49,527,569  —    1,164,016  18,561,000  50,691,585  69,252,585  (5,608,757)  63,643,828  —    

Wood Creek (CA)

  Pleasant Hill, CA  1987 256  9,729,900  23,009,768  —    3,159,727  9,729,900  26,169,495  35,899,395  (11,565,594)  24,333,801  —    

Woodbridge

  Cary, GA  1993-1995 128  737,400  6,636,870  —    1,292,934  737,400  7,929,804  8,667,204  (4,074,182)  4,593,022  —    

Woodbridge (CT)

  Newington, CT  1968 73  498,377  3,331,548  —    753,387  498,377  4,084,935  4,583,312  (1,441,100)  3,142,212  —    

Woodbridge II

  Cary, GA  1993-1995 216  1,244,600  11,243,364  —    1,835,231  1,244,600  13,078,595  14,323,195  (6,554,435)  7,768,760  —    

Woodleaf

  Campbell, CA  1984 178  8,550,600  16,988,183  —    1,356,904  8,550,600  18,345,087  26,895,687  (7,467,411)  19,428,276  —    

Woodside

  Lorton, VA  1987 252  1,326,000  12,510,903  —    5,750,181  1,326,000  18,261,084  19,587,084  (9,793,094)  9,793,990  —    

Management Business

  Chicago, IL  (D) —    —    —    —    76,743,332  —    76,743,332  76,743,332  (54,322,005)  22,421,327  —    

Operating Partnership

  Chicago, IL  (F) —    —    590,461  —    —    —    590,461  590,461  —     590,461  —    
                                     

EQR Wholly Owned Unencumbered

 76,487  2,392,106,041  7,868,101,520  —    852,110,167  2,392,106,041  8,720,211,687  11,112,317,728  (2,477,548,347)  8,634,769,381  —    
                                     

EQR Wholly Owned Encumbered:

                    

929 House

  Cambridge, MA (G)  1975 127  3,252,993  21,745,595  —    2,647,004  3,252,993  24,392,599  27,645,592  (8,100,075)  19,545,517  3,327,985  

Academy Village

  North Hollywood, CA  1989 248  25,000,000  23,593,194  —    5,321,205  25,000,000  28,914,399  53,914,399  (6,806,094)  47,108,305  20,000,000  

Acton Courtyard

  Berkeley, CA (G)  2003 71  5,550,000  15,785,509  —    27,579  5,550,000  15,813,088  21,363,088  (2,130,743)  19,232,345  9,920,000  

Alborada

  Fremont, CA  1999 442  24,310,000  59,214,129  —    2,086,983  24,310,000  61,301,112  85,611,112  (20,968,744)  64,642,368  (J) 

Alexander on Ponce

  Atlanta, GA  2003 330  9,900,000  35,819,022  —    1,469,623  9,900,000  37,288,645  47,188,645  (6,674,733)  40,513,912  28,880,000  

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
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —


EQUITY RESIDENTIAL


S-7

ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation

December 31, 20092012

Description

       Initial Cost to
Company		     Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)		     Gross
Amount
Carried
at Close of
Period
12/31/09		                

Apartment Name

  Location Date of
Construction		  Units (H)  Land  Building &
Fixtures		  Land  Building &
Fixtures		  Land  Building &
Fixtures (A)		  

Total (B)

  Accumulated
Depreciation
(C)		  Investment
in Real
Estate, Net
at 12/31/09
(B)		  Encumbrances 

Amberton

  Manassas,
VA		 1986  190  900,600  11,921,815  —    2,297,650  900,600  14,219,465  15,120,065  (6,787,096)  8,332,969  10,705,000  

Arbor Terrace

  Sunnyvale,
CA		 1979  174  9,057,300  18,483,642  —    2,004,829  9,057,300  20,488,471  29,545,771  (8,378,022)  21,167,749  (L) 

Arboretum (MA)

  Canton, MA 1989  156  4,685,900  10,992,751  —    1,681,995  4,685,900  12,674,746  17,360,646  (5,480,095)  11,880,551  (I) 

Artech Building

  Berkeley,
CA (G)		 2002  21  1,642,000  9,152,518  —    25,677  1,642,000  9,178,195  10,820,195  (1,082,845)  9,737,350  3,200,000  

Artisan Square

  Northridge,
CA		 2002  140  7,000,000  20,537,359  —    658,434  7,000,000  21,195,793  28,195,793  (5,485,402)  22,710,391  22,779,715  

Avanti

  Anaheim,
CA		 1987  162  12,960,000  18,495,974  —    908,613  12,960,000  19,404,587  32,364,587  (3,174,529)  29,190,058  19,850,000  

Azure Creek

  Phoenix, AZ 2001  160  8,778,000  17,840,790  —    645,782  8,778,000  18,486,572  27,264,572  (3,804,488)  23,460,084  9,329,362  

Bachenheimer Building

  Berkeley,
CA (G)		 2004  44  3,439,000  13,866,379  —    25,217  3,439,000  13,891,596  17,330,596  (1,733,831)  15,596,765  8,585,000  

Bella Vista Apartments at Boca Del Mar

  Boca Raton,
FL		 1985  392  11,760,000  20,190,252  —    12,000,632  11,760,000  32,190,884  43,950,884  (11,456,010)  32,494,874  26,134,010  

Bellagio Apartment Homes

  Scottsdale,
AZ		 1995  202  2,626,000  16,025,041  —    831,149  2,626,000  16,856,190  19,482,190  (3,908,319)  15,573,871  (L) 

Berkeleyan

  Berkeley,
CA (G)		 1998  56  4,377,000  16,022,110  —    229,734  4,377,000  16,251,844  20,628,844  (2,057,935)  18,570,909  8,290,089  

Bradley Park

  Puyallup,
WA		 1999  155  3,813,000  18,313,645  —    324,387  3,813,000  18,638,032  22,451,032  (4,004,134)  18,446,898  11,473,193  

Briarwood (CA)

  Sunnyvale,
CA		 1985  192  9,991,500  22,247,278  —    1,261,336  9,991,500  23,508,614  33,500,114  (9,412,408)  24,087,706  12,800,000  

Brookside (CO)

  Boulder, CO 1993  144  3,600,400  10,211,159  —    901,499  3,600,400  11,112,658  14,713,058  (4,627,474)  10,085,584  (L) 

Brookside (MD)

  Frederick,
MD		 1993  228  2,736,000  7,934,069  —    2,002,739  2,736,000  9,936,808  12,672,808  (4,365,449)  8,307,359  8,170,000  

Canterbury

  Germantown,
MD		 1986  544  2,781,300  32,942,531  —    13,494,938  2,781,300  46,437,469  49,218,769  (22,204,128)  27,014,641  31,680,000  

Cape House I

  Jacksonville,
FL		 1998  240  4,800,000  22,484,240  —    322,184  4,800,000  22,806,424  27,606,424  (3,188,882)  24,417,542  13,942,549  

Cape House II

  Jacksonville,
FL		 1998  240  4,800,000  22,229,836  —    1,478,065  4,800,000  23,707,901  28,507,901  (3,335,397)  25,172,504  13,580,843  

Carmel Terrace

  San Diego,
CA		 1988-1989  384  2,288,300  20,596,281  —    9,824,689  2,288,300  30,420,970  32,709,270  (14,800,220)  17,909,050  (K) 

Casa Capricorn

  San Diego,
CA		 1981  192  1,262,700  11,365,093  —    3,323,279  1,262,700  14,688,372  15,951,072  (7,377,415)  8,573,657  26,668,000  

Casa Ruiz

  San Diego,
CA		 1976-1986  196  3,922,400  9,389,153  —    3,241,003  3,922,400  12,630,156  16,552,556  (6,137,987)  10,414,569  13,331,000  

Cascade at Landmark

  Alexandria,
VA		 1990  277  3,603,400  19,657,554  —    5,923,020  3,603,400  25,580,574  29,183,974  (11,584,038)  17,599,936  31,921,089  

Cedar Glen

  Reading, MA 1980  114  1,248,505  8,346,003  —    1,203,443  1,248,505  9,549,446  10,797,951  (3,326,979)  7,470,972  250,352  

Centennial Court

  Seattle,
WA (G)		 2001  187  3,800,000  21,280,039  —    302,377  3,800,000  21,582,416  25,382,416  (4,275,020)  21,107,396  16,113,616  

Centennial Tower

  Seattle,
WA (G)		 1991  221  5,900,000  48,800,339  —    1,715,813  5,900,000  50,516,152  56,416,152  (9,561,788)  46,854,364  25,992,480  

Chelsea Square

  Redmond,
WA		 1991  113  3,397,100  9,289,074  —    1,012,005  3,397,100  10,301,079  13,698,179  (4,144,272)  9,553,907  (L) 

Chestnut Glen

  Abington,
MA		 1983  130  1,178,965  7,881,139  —    781,795  1,178,965  8,662,934  9,841,899  (3,026,591)  6,815,308  1,566,045  

Church Corner

  Cambridge,
MA (G)		 1987  85  5,220,000  16,744,643  —    1,006,504  5,220,000  17,751,147  22,971,147  (3,549,926)  19,421,221  12,000,000  

Cierra Crest

  Denver, CO 1996  480  4,803,100  34,894,898  —    4,108,061  4,803,100  39,002,959  43,806,059  (16,621,707)  27,184,352  (L) 

Colorado Pointe

  Denver, CO 2006  193  5,790,000  28,815,766  —    286,326  5,790,000  29,102,092  34,892,092  (5,020,730)  29,871,362  (K) 

Conway Court

  Roslindale,
MA		 1920  28  101,451  710,524  —    202,001  101,451  912,525  1,013,976  (348,221)  665,755  291,461  

Copper Canyon

  Highlands
Ranch, CO		 1999  222  1,442,212  16,251,114  —    1,060,302  1,442,212  17,311,416  18,753,628  (6,663,419)  12,090,209  (K) 

Country Brook

  Chandler,
AZ		 1986-1996  396  1,505,219  29,542,535  —    3,173,494  1,505,219  32,716,029  34,221,248  (14,208,856)  20,012,392  (K) 

Country Club Lakes

  Jacksonville,
FL		 1997  555  15,000,000  41,055,786  —    3,409,114  15,000,000  44,464,900  59,464,900  (9,259,567)  50,205,333  32,650,097  

Creekside (San Mateo)

  San Mateo,
CA		 1985  192  9,606,600  21,193,232  —    1,342,448  9,606,600  22,535,680  32,142,280  (9,138,978)  23,003,302  (L) 

Crescent at Cherry Creek

  Denver, CO 1994  216  2,594,000  15,149,470  —    1,628,146  2,594,000  16,777,616  19,371,616  (7,365,717)  12,005,899  (K) 

Deerwood (SD)

  San Diego,
CA		 1990  316  2,082,095  18,739,815  —    12,650,658  2,082,095  31,390,473  33,472,568  (16,199,425)  17,273,143  (K) 

Estates at Maitland Summit

  Orlando, FL 1998  272  9,520,000  28,352,160  —    575,347  9,520,000  28,927,507  38,447,507  (5,679,623)  32,767,884  (L) 

Estates at Tanglewood    

  Westminster,
CO		 2003  504  7,560,000  51,256,538  —    1,517,575  7,560,000  52,774,113  60,334,113  (10,321,182)  50,012,931  (J) 

Fine Arts Building

  Berkeley,
CA (G)		 2004  100 ��7,817,000  26,462,772  —    32,870  7,817,000  26,495,642  34,312,642  (3,411,363)  30,901,279  16,215,000  

Gaia Building

  Berkeley,
CA (G)		 2000  91  7,113,000  25,623,826  —    69,290  7,113,000  25,693,116  32,806,116  (3,288,778)  29,517,338  14,630,000  

Gateway at Malden Center

  Malden,
MA (G)		 1988  203  9,209,780  25,722,666  —    6,685,173  9,209,780  32,407,839  41,617,619  (8,946,922)  32,670,697  14,970,000  

Geary Court Yard

  San
Francisco,
CA		 1990  164  1,722,400  15,471,429  —    1,808,391  1,722,400  17,279,820  19,002,220  (7,569,095)  11,433,125  19,055,297  

Glen Meadow

  Franklin,
MA		 1971  288  2,339,330  16,133,588  —    3,246,048  2,339,330  19,379,636  21,718,966  (7,183,798)  14,535,168  870,950  

Gosnold Grove

  East
Falmouth,
MA		 1978  33  124,296  830,891  —    309,656  124,296  1,140,547  1,264,843  (451,196)  813,647  410,033  

Grandeville at River Place

  Oviedo, FL 2002  280  6,000,000  23,114,693  —    1,425,629  6,000,000  24,540,322  30,540,322  (5,961,733)  24,578,589  28,890,000  

Greenhaven

  Union City,
CA		 1983  250  7,507,000  15,210,399  —    2,796,765  7,507,000  18,007,164  25,514,164  (7,666,748)  17,847,416  10,975,000  

Greenhouse - Frey Road

  Kennesaw,
GA		 1985  489  2,467,200  22,187,443  —    4,703,192  2,467,200  26,890,635  29,357,835  (15,127,566)  14,230,269  (I) 

Greenhouse - Roswell

  Roswell, GA 1985  236  1,220,000  10,974,727  —    2,702,794  1,220,000  13,677,521  14,897,521  (7,807,800)  7,089,721  (I) 

Greenwood Park

  Centennial,
CO		 1994  291  4,365,000  38,372,440  —    945,517  4,365,000  39,317,957  43,682,957  (5,005,729)  38,677,228  (L) 

Greenwood Plaza

  Centennial,
CO		 1996  266  3,990,000  35,846,708  —    1,400,524  3,990,000  37,247,232  41,237,232  (4,744,885)  36,492,347  (L) 

Hampshire Place

  Los Angeles,
CA		 1989  259  10,806,000  30,335,330  —    1,658,206  10,806,000  31,993,536  42,799,536  (6,904,845)  35,894,691  16,616,685  

Harbor Steps

  Seattle,
WA (G)		 2000  730  59,900,000  158,829,432  —    4,362,716  59,900,000  163,192,148  223,092,148  (28,705,384)  194,386,764  130,391,465  

Hathaway

  Long Beach,
CA		 1987  385  2,512,500  22,611,912  —    6,186,435  2,512,500  28,798,347  31,310,847  (14,483,088)  16,827,759  46,517,800  

Heights on Capitol Hill

  Seattle,
WA (G)		 2006  104  5,425,000  21,138,028  —    44,441  5,425,000  21,182,469  26,607,469  (3,030,756)  23,576,713  19,320,000  

Heritage at Stone Ridge

  Burlington,
MA		 2005  180  10,800,000  31,808,335  —    546,652  10,800,000  32,354,987  43,154,987  (5,798,391)  37,356,596  28,427,439  

Heritage Green

  Sturbridge,
MA		 1974  130  835,313  5,583,898  —    1,098,415  835,313  6,682,313  7,517,626  (2,546,935)  4,970,691  693,516  

Heronfield

  Kirkland,
WA		 1990  202  9,245,000  27,018,110  —    1,101,752  9,245,000  28,119,862  37,364,862  (4,006,964)  33,357,898  (K) 

Highlands at Cherry Hill

  Cherry Hills,
NJ		 2002  170  6,800,000  21,459,108  —    538,174  6,800,000  21,997,282  28,797,282  (4,069,030)  24,728,252  15,484,048  

Highlands at South Plainfield

  South
Plainfield,
NJ		 2000  252  10,080,000  37,526,912  —    663,395  10,080,000  38,190,307  48,270,307  (6,490,163)  41,780,144  21,323,880  

Ivory Wood

  Bothell, WA 2000  144  2,732,800  13,888,282  —    482,417  2,732,800  14,370,699  17,103,499  (3,275,680)  13,827,819  8,020,000  

Jaclen Towers

  Beverly, MA 1976  100  437,072  2,921,735  —    1,074,452  437,072  3,996,187  4,433,259  (1,646,562)  2,786,697  1,323,710  

La Terrazza at Colma Station

  Colma,
CA (G)		 2005  153  —    41,249,346  —    410,660  —    41,660,006  41,660,006  (4,992,231)  36,667,775  25,940,000  

LaSalle

  Beaverton,
OR (G)		 1998  554  7,202,000  35,877,612  —    2,229,769  7,202,000  38,107,381  45,309,381  (10,809,605)  34,499,776  29,458,651  

Legacy at Highlands Ranch

  Highlands
Ranch, CO		 1999  422  6,330,000  37,557,013  —    1,216,526  6,330,000  38,773,539  45,103,539  (8,414,463)  36,689,076  20,745,845  

Liberty Park

  Brain Tree,
MA		 2000  202  5,977,504  26,749,111  —    1,729,777  5,977,504  28,478,888  34,456,392  (7,463,150)  26,993,242  24,980,280  

Lincoln Heights

  Quincy, MA 1991  336  5,928,400  33,595,262  —    10,275,301  5,928,400  43,870,563  49,798,963  (17,233,220)  32,565,743  (L) 

Longfellow Glen

  Sudbury,
MA		 1984  120  1,094,273  7,314,994  —    2,445,056  1,094,273  9,760,050  10,854,323  (3,841,977)  7,012,346  2,516,426  

Longview Place

  Waltham,
MA		 2004  348  20,880,000  90,255,509  —    655,229  20,880,000  90,910,738  111,790,738  (15,161,254)  96,629,484  57,029,000  

Market Street Village

  San Diego,
CA		 2006  229  13,740,000  40,757,300  —    324,266  13,740,000  41,081,566  54,821,566  (5,723,977)  49,097,589  (K) 

Marks

  Englewood,
CO (G)		 1987  616  4,928,500  44,622,314  —    6,618,651  4,928,500  51,240,965  56,169,465  (22,816,866)  33,352,599  19,195,000  

Metro on First

  Seattle,
WA (G)		 2002  102  8,540,000  12,209,981  —    211,798  8,540,000  12,421,779  20,961,779  (2,299,199)  18,662,580  16,650,000  

Mill Creek

  Milpitas, CA 1991  516  12,858,693  57,168,503  —    2,033,999  12,858,693  59,202,502  72,061,195  (15,011,304)  57,049,891  69,312,259  

Mill Pond

  Millersville,
MD		 1984  240  2,880,000  8,468,014  —    2,513,878  2,880,000  10,981,892  13,861,892  (4,961,115)  8,900,777  7,300,000  

Millbrook Apartments Phase I

  Alexandria,
VA		 1996  406  24,360,000  86,178,714  —    2,289,889  24,360,000  88,468,603  112,828,603  (15,524,271)  97,304,332  64,680,000  

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
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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 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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
Springbrook EstatesRiverside, 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
 —
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
 —
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
 —

S-8


EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation

December 31, 20092012

Description

        Initial Cost
to Company		     Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) ( E)		     Gross
Amount
Carried at
Close of
Period
12/31/09		                

Apartment Name

  

Location

  Date of
Construction		  Units (H)  Land  Building &
Fixtures		  Land  Building &
Fixtures		  Land  Building &
Fixtures (A)		  Total (B)  Accumulated
Depreciation
(C)		  Investment
in Real
Estate, Net at
12/31/09 (B)		  Encumbrances 

Missions at Sunbow

  

Chula Vista, CA

  2003  336  28,560,000  59,287,595  —    1,047,827  28,560,000  60,335,422  88,895,422  (12,025,167)  76,870,255  55,091,000  

Monte Viejo

  

Phoneix, AZ

  2004  480  12,700,000  45,926,784  —    838,810  12,700,000  46,765,594  59,465,594  (8,623,568)  50,842,026  40,950,654  

Montecito

  

Valencia, CA

  1999  210  8,400,000  24,709,146  —    1,619,229  8,400,000  26,328,375  34,728,375  (8,540,320)  26,188,055  (K) 

Montierra

  

Scottsdale, AZ

  1999  249  3,455,000  17,266,787  —    1,333,781  3,455,000  18,600,568  22,055,568  (7,147,233)  14,908,335  17,858,854  

Montierra (CA)

  

San Diego, CA

  1990  272  8,160,000  29,360,938  —    6,316,570  8,160,000  35,677,508  43,837,508  (12,394,537)  31,442,971  (K) 

Mosaic at Metro

  

Hyattsville, MD

  2008  260  —    59,642,561  —    7,150  —    59,649,711  59,649,711  (1,742,735)  57,906,976  45,417,616  

Mountain Park Ranch

  

Phoenix, AZ

  1994  240  1,662,332  18,260,276  —    1,607,657  1,662,332  19,867,933  21,530,265  (8,696,270)  12,833,995  (J) 

Mountain Terrace

  

Stevenson Ranch, CA

  1992  510  3,966,500  35,814,995  —    10,964,196  3,966,500  46,779,191  50,745,691  (19,089,347)  31,656,344  57,428,472  

Noonan Glen

  

Winchester, MA

  1983  18  151,344  1,011,700  —    390,373  151,344  1,402,073  1,553,417  (544,584)  1,008,833  186,674  

North Pier at Harborside

  

Jersey City, NJ (J)

  2003  297  4,000,159  94,348,092  —    1,135,100  4,000,159  95,483,192  99,483,351  (19,002,975)  80,480,376  76,862,000  

Norton Glen

  

Norton, MA

  1983  150  1,012,556  6,768,727  —    3,537,621  1,012,556  10,306,348  11,318,904  (4,021,072)  7,297,832  2,178,056  

Oak Mill I

  

Germantown, MD

  1984  208  10,000,000  13,155,522  —    7,164,307  10,000,000  20,319,829  30,319,829  (4,895,219)  25,424,610  12,892,091  

Oak Mill II

  

Germantown, MD

  1985  192  854,133  10,233,947  —    5,449,900  854,133  15,683,847  16,537,980  (7,553,991)  8,983,989  9,600,000  

Oak Park North

  

Agoura Hills, CA

  1990  220  1,706,900  15,362,666  —    2,256,276  1,706,900  17,618,942  19,325,842  (8,850,257)  10,475,585  (I) 

Oak Park South

  

Agoura Hills, CA

  1989  224  1,683,800  15,154,608  —    2,391,313  1,683,800  17,545,921  19,229,721  (8,848,189)  10,381,532  (I) 

Oaks

  

Santa Clarita, CA

  2000  520  23,400,000  61,020,438  —    2,370,068  23,400,000  63,390,506  86,790,506  (15,683,148)  71,107,358  41,984,858  

Old Mill Glen

  

Maynard, MA

  1983  50  396,756  2,652,233  —    515,357  396,756  3,167,590  3,564,346  (1,165,446)  2,398,900  967,243  

Olde Redmond Place

  

Redmond, WA

  1986  192  4,807,100  14,126,038  —    3,944,352  4,807,100  18,070,390  22,877,490  (7,686,459)  15,191,031  (L) 

Palladia

  

Hillsboro, OR

  2000  497  6,461,000  44,888,156  —    1,092,675  6,461,000  45,980,831  52,441,831  (14,093,043)  38,348,788  40,546,418  

Parc East Towers

  

New York, NY (G)

  1977  324  102,163,000  109,013,628  —    4,959,310  102,163,000  113,972,938  216,135,938  (13,568,922)  202,567,016  17,844,797  

Park Meadow

  

Gilbert, AZ

  1986  225  835,217  15,120,769  —    2,153,205  835,217  17,273,974  18,109,191  (7,701,918)  10,407,273  (L) 

Parkfield

  

Denver, CO

  2000  476  8,330,000  28,667,618  —    1,882,710  8,330,000  30,550,328  38,880,328  (10,062,830)  28,817,498  23,275,000  

Preston Bend

  

Dallas, TX

  1986  255  1,075,200  9,532,056  —    2,169,998  1,075,200  11,702,054  12,777,254  (5,653,580)  7,123,674  (I) 

Promenade at Peachtree

  

Chamblee, GA

  2001  406  10,150,000  31,219,739  —    1,489,507  10,150,000  32,709,246  42,859,246  (7,525,343)  35,333,903  (K) 

Promenade at Town Center II

  

Valencia, CA

  2001  270  13,500,000  34,405,636  —    262,201  13,500,000  34,667,837  48,167,837  (8,202,224)  39,965,613  33,436,786  

Providence

  

Bothell, WA

  2000  200  3,573,621  19,055,505  —    493,407  3,573,621  19,548,912  23,122,533  (4,675,288)  18,447,245  (J) 

Reserve at Ashley Lake

  

Boynton Beach, FL

  1990  440  3,520,400  23,332,494  —    4,346,738  3,520,400  27,679,232  31,199,632  (12,247,964)  18,951,668  24,150,000  

Reserve at Clarendon Centre, The

  

Arlington, VA (G)

  2003  252  10,500,000  52,812,935  —    1,639,953  10,500,000  54,452,888  64,952,888  (12,314,571)  52,638,317  (K) 

Reserve at Eisenhower, The

  

Alexandria, VA

  2002  226  6,500,000  34,585,060  —    622,182  6,500,000  35,207,242  41,707,242  (8,822,804)  32,884,438  (K) 

Reserve at Empire Lakes

  

Rancho Cucamonga, CA

  2005  467  16,345,000  73,080,670  —    1,101,951  16,345,000  74,182,621  90,527,621  (12,802,984)  77,724,637  (J) 

Reserve at Fairfax Corners

  

Fairfax, VA

  2001  652  15,804,057  63,129,051  —    2,286,017  15,804,057  65,415,068  81,219,125  (17,577,613)  63,641,512  84,778,876  

Reserve at Moreno Valley Ranch

  

Moreno Valley, CA

  2005  176  8,800,000  26,151,298  —    342,466  8,800,000  26,493,764  35,293,764  (4,168,933)  31,124,831  (L) 

Reserve at Potomac Yard

  

Alexandria, VA

  2002  588  11,918,917  68,976,484  —    1,957,938  11,918,917  70,934,422  82,853,339  (15,249,588)  67,603,751  66,470,000  

Reserve at Town Center (WA)

  

Mill Creek, WA

  2001  389  10,369,400  41,172,081  —    1,198,290  10,369,400  42,370,371  52,739,771  (9,345,431)  43,394,340  29,160,000  

River Pointe at Den Rock Park

  

Lawrence, MA

  2000  174  4,615,702  18,440,147  —    1,011,209  4,615,702  19,451,356  24,067,058  (5,360,525)  18,706,533  18,100,000  

Rockingham Glen

  

West Roxbury, MA

  1974  143  1,124,217  7,515,160  —    1,310,185  1,124,217  8,825,345  9,949,562  (3,343,015)  6,606,547  1,590,161  

Rolling Green (Amherst)

  

Amherst, MA

  1970  204  1,340,702  8,962,317  —    2,991,273  1,340,702  11,953,590  13,294,292  (4,689,478)  8,604,814  2,479,599  

Rolling Green (Milford)

  

Milford, MA

  1970  304  2,012,350  13,452,150  —    3,285,373  2,012,350  16,737,523  18,749,873  (6,519,241)  12,230,632  5,129,267  

San Marcos Apartments

  

Scottsdale, AZ

  1995  320  20,000,000  31,261,609  —    949,904  20,000,000  32,211,513  52,211,513  (5,657,487)  46,554,026  32,900,000  

Savannah Lakes

  

Boynton Beach, FL

  1991  466  7,000,000  30,263,310  —    3,072,926  7,000,000  33,336,236  40,336,236  (10,225,779)  30,110,457  36,610,000  

Savannah Midtown

  

Atlanta, GA

  2000  322  7,209,873  29,433,507  —    2,402,472  7,209,873  31,835,979  39,045,852  (7,282,012)  31,763,840  17,800,000  

Savoy I

  

Aurora, CO

  2001  444  5,450,295  38,765,670  —    1,683,113  5,450,295  40,448,783  45,899,078  (9,477,058)  36,422,020  (L) 

Sheffield Court

  

Arlington, VA

  1986  597  3,342,381  31,337,332  —    6,705,855  3,342,381  38,043,187  41,385,568  (19,936,164)  21,449,404  (L) 

Skyline Towers

  

Falls Church, VA (G)

  1971  939  78,278,200  91,485,591  —    27,128,644  78,278,200  118,614,235  196,892,435  (24,165,942)  172,726,493  88,466,750  

Sonata at Cherry Creek

  

Denver, CO

  1999  183  5,490,000  18,130,479  —    1,034,165  5,490,000  19,164,644  24,654,644  (6,230,736)  18,423,908  19,190,000  

Sonterra at Foothill Ranch

  

Foothill Ranch, CA

  1997  300  7,503,400  24,048,507  —    1,392,704  7,503,400  25,441,211  32,944,611  (10,576,704)  22,367,907  (L) 

South Winds

  

Fall River, MA

  1971  404  2,481,821  16,780,359  —    3,324,184  2,481,821  20,104,543  22,586,364  (7,788,993)  14,797,371  4,951,885  

Springs Colony

  

Altamonte Springs, FL

  1986  188  630,411  5,852,157  —    2,213,828  630,411  8,065,985  8,696,396  (4,784,420)  3,911,976  (I) 

Stonegate (CO)

  

Broomfield, CO

  2003  350  8,750,000  32,998,775  —    2,500,402  8,750,000  35,499,177  44,249,177  (7,257,879)  36,991,298  (J) 

Stoneleigh at Deerfield

  

Alpharetta, GA

  2003  370  4,810,000  29,999,596  —    774,400  4,810,000  30,773,996  35,583,996  (6,581,699)  29,002,297  16,800,000  

Stoney Ridge

  

Dale City, VA

  1985  264  8,000,000  24,147,091  —    5,177,149  8,000,000  29,324,240  37,324,240  (6,285,305)  31,038,935  15,507,124  

Stonybrook

  

Boynton Beach, FL

  2001  264  10,500,000  24,967,638  —    843,142  10,500,000  25,810,780  36,310,780  (5,213,760)  31,097,020  21,544,804  

Summerhill Glen

  

Maynard, MA

  1980  120  415,812  3,000,816  —    696,793  415,812  3,697,609  4,113,421  (1,454,744)  2,658,677  1,295,873  

Summerset Village

  

Chatsworth, CA

  1985  280  2,629,804  23,670,889  —    3,546,057  2,629,804  27,216,946  29,846,750  (12,524,477)  17,322,273  38,039,912  

Sunforest

  

Davie, FL

  1989  494  10,000,000  32,124,850  —    3,447,067  10,000,000  35,571,917  45,571,917  (9,673,114)  35,898,803  (L) 

Talleyrand

  

Tarrytown, NY (I)

  1997-1998  300  12,000,000  49,838,160  —    3,581,752  12,000,000  53,419,912  65,419,912  (15,851,535)  49,568,377  35,000,000  

Tanglewood (VA)

  

Manassas, VA

  1987  432  2,108,295  24,619,495  —    8,145,739  2,108,295  32,765,234  34,873,529  (16,470,599)  18,402,930  25,110,000  

Teresina

  

Chula Vista, CA

  2000  440  28,600,000  61,916,670  —    1,502,160  28,600,000  63,418,830  92,018,830  (9,935,988)  82,082,842  44,728,551  

Touriel Building

  

Berkeley, CA (G)

  2004  35  2,736,000  7,810,027  —    17,968  2,736,000  7,827,995  10,563,995  (1,056,325)  9,507,670  5,050,000  

Tradition at Alafaya

  

Oviedo, FL

  2006  253  7,590,000  31,881,505  —    210,897  7,590,000  32,092,402  39,682,402  (6,103,387)  33,579,015  (K) 

Tuscany at Lindbergh

  

Atlanta, GA

  2001  324  9,720,000  40,874,023  —    1,491,656  9,720,000  42,365,679  52,085,679  (9,111,182)  42,974,497  32,360,000  

Uptown Square

  

Denver, CO (G)

  1999/2001  696  17,492,000  100,696,541  —    1,911,642  17,492,000  102,608,183  120,100,183  (18,901,173)  101,199,010  88,550,000  

Versailles

  

Woodland Hills, CA

  1991  253  12,650,000  33,656,292  —    3,414,358  12,650,000  37,070,650  49,720,650  (9,725,946)  39,994,704  30,372,953  

Via Ventura

  

Scottsdale, AZ

  1980  328  1,351,785  13,382,006  —    7,812,073  1,351,785  21,194,079  22,545,864  (13,667,119)  8,878,745  (K) 

Village at Lakewood

  

Phoenix, AZ

  1988  240  3,166,411  13,859,090  —    1,860,247  3,166,411  15,719,337  18,885,748  (7,145,715)  11,740,033  (L) 

Warwick Station

  

Westminster, CO

  1986  332  2,274,121  21,113,974  —    2,823,008  2,274,121  23,936,982  26,211,103  (10,524,427)  15,686,676  8,355,000  

Wellington Hill

  

Manchester, NH

  1987  390  1,890,200  17,120,662  —    7,340,948  1,890,200  24,461,610  26,351,810  (13,771,374)  12,580,436  (I) 

Westwood Glen

  

Westwood, MA

  1972  156  1,616,505  10,806,004  —    889,256  1,616,505  11,695,260  13,311,765  (3,872,020)  9,439,745  551,970  

Whisper Creek

  

Denver, CO

  2002  272  5,310,000  22,998,558  —    748,042  5,310,000  23,746,600  29,056,600  (5,163,036)  23,893,564  13,580,000  

Wilkins Glen

  

Medfield, MA

  1975  103  538,483  3,629,943  —    1,350,731  538,483  4,980,674  5,519,157  (1,819,875)  3,699,282  1,131,292  

Windridge (CA)

  

Laguna Niguel, CA

  1989  344  2,662,900  23,985,497  —    4,179,384  2,662,900  28,164,881  30,827,781  (15,301,859)  15,525,922  (I) 

Woodlake (WA)

  

Kirkland, WA

  1984  288  6,631,400  16,735,484  —    2,318,719  6,631,400  19,054,203  25,685,603  (8,261,891)  17,423,712  (L) 
                                      

EQR Wholly Owned Encumbered

      42,309  1,202,440,561  4,307,244,445  —    393,750,217  1,202,440,561  4,700,994,662  5,903,435,223  (1,272,390,073)  4,631,045,150  2,441,648,706  
                                      

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
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —
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
 —



S-9

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation

December 31, 20092012

Description

     Initial
Cost to
Company		   Cost
Capitalized
Subsequent to
Acquisition
(Improvements,
net) (E)		    Gross
Amount
Carried at
Close of
Period
12/31/09		           

Apartment Name

 

Location

 Date of
Construction		 Units (H) Land Building &
Fixtures		 Land Building &
Fixtures		  Land Building &
Fixtures (A)		 Total (B) Accumulated
Depreciation
(C)		  Investment
in Real
Estate, Net
at
12/31/09
(B)		 Encumbrances

EQR

Partially

Owned

Unencumbered:

             

Butterfield Ranch

 Chino Hills, CA (F) —    15,617,709  4,439,711  —    —      15,617,709  4,439,711  20,057,420  —      20,057,420  —  

Hudson Crossing II

 New York, NY (F) —    11,923,324  1,936,172  —    —      11,923,324  1,936,172  13,859,496  —      13,859,496  —  

Vista Montana - Residential

 

San Jose,

CA

 (F) —    31,468,209  9,543,448  —    —      31,468,209  9,543,448  41,011,657  —      41,011,657  —  

Vista Montana - Townhomes

 

San Jose,

CA

 (F) —    33,432,829  13,232,698  —    —      33,432,829  13,232,698  46,665,527  (740,000)   45,925,527  —  

Westgate

 Pasadena, CA (F) —    —    3,915,902  —    —      —    3,915,902  3,915,902  —      3,915,902  —  

Westgate Pasadena and Green

 Pasadena, CA (F) —    —    390,813  —    —      —    390,813  390,813  —      390,813  —  
                                    

EQR

Partially

Owned

Unencumbered

   —    92,442,071  33,458,744  —    —      92,442,071  33,458,744  125,900,815  (740,000)   125,160,815  —  
                                    

EQR

Partially

Owned

Encumbered:

             

111 Lawrence Street

 Brooklyn, NY (F) —    40,099,922  187,782,726  —    —      40,099,922  187,782,726  227,882,648  —      227,882,648  105,217,286

2300 Elliott

 

Seattle,

WA

 1992 92  796,800  7,173,725  —    5,082,501    796,800  12,256,226  13,053,026  (7,481,390)   5,571,636  6,833,000

Alta Pacific

 

Irvine,

CA

 2008 132  10,752,145  34,628,114  —    (542)   10,752,145  34,627,572  45,379,717  (2,193,785)   43,185,932  28,260,000

Brookside Crossing I

 Stockton, CA 1981 90  625,000  4,663,298  —    1,633,109    625,000  6,296,407  6,921,407  (2,667,005)   4,254,402  4,658,000

Brookside Crossing II

 Stockton, CA 1981 128  770,000  5,967,676  —    1,544,719    770,000  7,512,395  8,282,395  (2,917,911)   5,364,484  4,867,000

Canyon Creek (CA)

 San Ramon, CA 1984 268  5,425,000  18,812,121  —    4,061,876    5,425,000  22,873,997  28,298,997  (7,147,795)   21,151,202  28,000,000

Canyon Ridge

 San Diego, CA 1989 162  4,869,448  11,955,064  —    1,679,497    4,869,448  13,634,561  18,504,009  (5,979,422)   12,524,587  15,165,000

City Lofts

 

Chicago,

IL

 2008 278  6,882,467  61,572,955  —    24,199    6,882,467  61,597,154  68,479,621  (3,487,591)   64,992,030  52,124,564

Copper Creek

 

Tempe,

AZ

 1984 144  1,017,400  9,158,260  —    1,766,370    1,017,400  10,924,630  11,942,030  (5,139,430)   6,802,600  5,112,000

Country Oaks

 Agoura Hills, CA 1985 256  6,105,000  29,561,865  —    3,024,619    6,105,000  32,586,484  38,691,484  (9,367,734)   29,323,750  29,412,000

Edgewater

 Bakersfield, CA 1984 258  580,000  17,710,063  —    2,171,940    580,000  19,882,003  20,462,003  (6,090,765)   14,371,238  11,988,000

EDS Dulles

 Herndon, VA (F) —    18,875,631  —    —    —      18,875,631  —    18,875,631  —      18,875,631  17,697,033

Fox Ridge

 Englewood, CO 1984 300  2,490,000  17,522,114  —    3,061,972    2,490,000  20,584,086  23,074,086  (7,276,319)   15,797,767  20,300,000

Lakewood

 Tulsa, OK 1985 152  855,000  6,480,774  —    1,295,691    855,000  7,776,465  8,631,465  (2,977,591)   5,653,874  5,600,000

Lantern Cove

 Foster City, CA 1985 232  6,945,000  23,332,206  —    2,029,712    6,945,000  25,361,918  32,306,918  (7,990,305)   24,316,613  36,403,000

Mesa Del Oso

 Albuquerque, NM 1983 221  4,305,000  12,160,419  —   ��1,225,218    4,305,000  13,385,637  17,690,637  (4,675,831)   13,014,806  9,731,457

Montclair Metro

 Montclair, NJ 2009 163  2,400,887  42,675,459  —    —      2,400,887  42,675,459  45,076,346  (435,374)   44,640,972  33,434,384

Monterra in Mill Creek

 Mill Creek, WA 2003 139  2,800,000  13,255,123  —    206,463    2,800,000  13,461,586  16,261,586  (2,770,579)   13,491,007  7,286,000

Preserve at Briarcliff

 Atlanta, GA 1994 182  6,370,000  17,766,322  —    458,718    6,370,000  18,225,040  24,595,040  (2,871,609)   21,723,431  6,000,000

Red Road Commons

 Miami, FL 2009 404  27,383,547  98,076,524  —    —      27,383,547  98,076,524  125,460,071  —      125,460,071  72,249,167

Schooner Bay I

 Foster City, CA 1985 168  5,345,000  20,509,239  —    2,260,552    5,345,000  22,769,791  28,114,791  (6,788,066)   21,326,725  27,000,000

Schooner Bay II

 Foster City, CA 1985 144  4,550,000  18,142,163  —    2,284,018    4,550,000  20,426,181  24,976,181  (6,101,251)   18,874,930  23,760,000

Scottsdale Meadows

 Scottsdale, AZ 1984 168  1,512,000  11,423,349  —    1,539,893    1,512,000  12,963,242  14,475,242  (5,746,507)   8,728,735  9,100,000

Silver Spring

 Silver Spring, MD 2009 457  18,539,817  130,749,141  —    (1,798)   18,539,817  130,747,343  149,287,160  (2,308,685)   146,978,475  113,281,546

Strayhorse at Arrowhead Ranch

 Glendale, AZ 1998 136  4,400,000  12,968,002  —    130,202    4,400,000  13,098,204  17,498,204  (1,678,427)   15,819,777  8,134,797

Vintage

 Ontario, CA 2005-2007 300  7,059,230  47,677,762  —    126,003    7,059,230  47,803,765  54,862,995  (6,285,713)   48,577,282  33,000,000

Waterfield Square I

 Stockton, CA 1984 170  950,000  9,300,249  —    2,074,439    950,000  11,374,688  12,324,688  (4,150,255)   8,174,433  6,923,000

Waterfield Square II

 Stockton, CA 1984 158  845,000  8,657,988  —    1,657,156    845,000  10,315,144  11,160,144  (3,527,864)   7,632,280  6,595,000

Westgate Pasadena Apartments

 Pasadena, CA (F) —    22,898,848  97,699,060  —    —      22,898,848  97,699,060  120,597,908  —      120,597,908  163,160,000

Westgate Pasadena Condos

 Pasadena, CA (F) —    29,977,725  15,275,786  —    —      29,977,725  15,275,786  45,253,511  —      45,253,511  17,178,420

Willow Brook (CA)

 

Pleasant

Hill,

CA

 1985 228  5,055,000  38,388,672  —    1,626,534    5,055,000  40,015,206  45,070,206  (8,828,250)   36,241,956  29,000,000
                                    

EQR

Partially

Owned

Encumbered

   5,530  251,480,867  1,031,046,219  —    40,963,061    251,480,867  1,072,009,280  1,323,490,147  (126,885,454)   1,196,604,693  937,470,654
                                    

Portfolio/Entity Encumbrances (1)

   —    —    —    —    —      —    —    —    —      —    1,404,327,000

Total

Consolidated

Investment

in Real

Estate

   124,326 $3,938,469,540 $13,239,850,928 $—   $1,286,823,445   $3,938,469,540 $14,526,674,373 $18,465,143,913 $(3,877,563,874)  $14,587,580,039 $4,783,446,360
                                    

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
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
 —
Management BusinessChicago, IL (D) —
 —
 —
 93,750,517
 —
 93,750,517
 93,750,517
 (70,059,419) 23,691,098
 —
Operating PartnershipChicago, IL (F) —
 —
 4,528,494
 —
 —
 4,528,494
 4,528,494
 —
 4,528,494
 —
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
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
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
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
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
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
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)
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)
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
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
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
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
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
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
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)
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
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)
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)
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
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
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
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)
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)
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)
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
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

S-10

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
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
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
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
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
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
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)
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
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
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
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
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
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
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
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)
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
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
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
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)
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
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)
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
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
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
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
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
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
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
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)
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)
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)
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)
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)
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
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
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
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
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



S-11


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
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
 —


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-13


EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP
Schedule III - Real Estate and Accumulated Depreciation

December 31, 20092012

NOTES:

(A)
The balance of furniture & fixtures included in the total investment in real estate amount was $1,111,978,037$1,343,765,180 as of December 31, 2009.2012.

(B)
The cost, net of accumulated depreciation, for Federal Income Tax purposes as of December 31, 20092012 was approximately $10.4 billion.$11.2 billion.

(C)
The life to compute depreciation for building is 30 years, for building improvements ranges from 5 to 1015 years, for furniture & fixtures and replacements is 5 to 10 years, and for in-place leaseslease 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'sproperty’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).

(H)
Total properties and units exclude both the Partially Owned Properties—Unconsolidated consisting of 34 properties and 8,086 units, and the Military Housing consisting of two2 properties and 4,5955,039 units.

(I)through (L)(K) See Encumbrances Reconciliation schedule.

(L)Boot property for Freddie Mac mortgage pool.
(M)Boot Property for Bond Partnership mortgage pool.




S-14

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 numbernumbers for our Exchange Act filings referenced below is 1-12252.

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 the Company’sEquity Residential’s Form 10-K for the year ended December 31, 2004.

3.2

 SixthSeventh Amended and Restated Bylaws of Equity Residential, effective as adopted on September 10, 2008.of December 14, 2010. Included as Exhibit 3.1 to the Company’sEquity Residential's Form 8-K dated September 10, 2008,and filed on September 16, 2008.December 14, 2010.
3.3Sixth 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.

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 theERP 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 theERP 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 theERP 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 theERP Operating Limited Partnership’s Form 8-K dated May 30, 2007, filed on June 1, 2007.

4.5

 Terms Agreement regarding 6.95% Notes due March 2,Fourth Supplemental Indenture to Indenture, dated as of December 12, 2011.Included as Exhibit 1 to the Operating Partnership’s Form 8-K, filed on March 2, 2001.

  4.6

Terms Agreement regarding 6.625% Notes due March 15, 2012.Included as Exhibit 1 to the Operating Partnership’s Form 8-K, filed on March 14, 2002.

  4.7

Form of 5.50% Note due October 1, 2012. Included as Exhibit 4.2 to theERP Operating Partnership’sLimited Partnership's Form 8-K dated May 30, 2007,December 7, 2011, filed on June 1, 2007.December 9, 2011.

  4.8

4.6		 Form of 5.2% Note due April 1, 2013. Included as Exhibit 4 to theERP Operating Limited Partnership’s Form 8-K, filed on March 19, 2003.

  4.9

4.7		 Form of 5.25% Note due September 15, 2014. Included as Exhibit 4.1 to theERP Operating Limited Partnership’s Form 8-K, filed on September 10, 2004.

  4.10

4.8		 Terms Agreement regarding 6.63% (subsequently remarketed to a 6.584% fixed rate) Notes due April 13, 2015. Included as Exhibit 1 to theERP Operating Limited Partnership’s Form 8-K, filed on April 13, 1998.

  4.11

4.9		 Terms Agreement regarding 5.125% Notes due March 15, 2016. Included as Exhibit 1.1 to theERP Operating Limited Partnership’s Form 8-K, filed on September 13, 2005.

  4.12

4.10		 Form of 5.375% Note due August 1, 2016. Included as Exhibit 4.1 to theERP Operating Limited Partnership’s Form 8-K dated January 11, 2006, filed on January 18, 2006.

  4.13

4.11		 Form of 5.75% Note due June 15, 2017. Included as Exhibit 4.3 to theERP Operating Limited Partnership’s Form 8-K dated May 30, 2007, filed on June 1, 2007.

Exhibit

4.12		 

Description

Location

  4.14

Terms Agreement regarding 71/8% Notes due October 15, 2017.
 Included as Exhibit 1 to theERP Operating Limited Partnership’s Form 8-K, filed on October 9, 1997.
4.13Form 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.

4.14

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.
4.15

 Terms Agreement regarding 7.57% Notes due August 15, 2026. Included as Exhibit 1 to theERP Operating Limited Partnership’s Form 8-K, filed on August 13, 1996.
10.1

  4.16

Form of 3.85% Exchangeable Senior Note due August 15, 2026.Included as Exhibit 4.2 to the Operating Partnership’s Form 8-K dated August 16, 2006, filed on August 23, 2006.

10.1

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 the Company’s Form 8-K dated March 12, 2009, filed on March 18, 2009.

10.2

Master Amendment to Other Securities Term Sheets and Joinders to Operating Partnership Agreement of ERP Operating Limited Partnership dated December 19, 2003.Included as Exhibit 10.2 to the Company’s Form 10-K for the year ended December 31, 2003.

10.3*

*Noncompetition Agreement (Zell). Included as an exhibit to the Company’sEquity Residential's Form S-11 Registration Statement, File No. 33-63158.
10.2

10.4*

*Noncompetition Agreement (Spector). Included as an exhibit to the Company’sEquity Residential's Form S-11 Registration Statement, File No. 33-63158.
10.3

10.5*

*Form of Noncompetition Agreement (other officers). Included as an exhibit to the Company’sEquity Residential's Form S-11 Registration Statement, File No. 33-63158.



10.6

Exhibit		 Amended and Restated Master Reimbursement Agreement, dated as of November 1, 1996 by and between Federal National Mortgage Association and EQR-Bond Partnership.Description Included as an exhibit to the Company’s Form S-11 Registration Statement, File No. 33-63158.Location

10.7

10.4		 Revolving Credit Agreement dated as of February 28, 2007January 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.
10.5Guaranty of Payment made as of January 11, 2013 between Equity Residential and Bank of America, N.A., as administrative agent JP Morganfor 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.
10.6Revolving Credit Agreement dated as of July 13, 2011 among ERP Operating Limited Partnership, Bank of America, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., as syndication agent, Banc of America Securities LLC andSyndication Agent, J.P. Morgan Securities Inc.,LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Wells Fargo Securities, LLC, as joint lead arrangersJoint Lead Arrangers and joint book runners,Joint Book Runners, Suntrust Bank, WachoviaU.S. Bank National Association, and Wells Fargo Bank, N.A., LaSalle Bank National Association, The Royal Bank of Scotland plc, and US Bank, National Association, as co-documentation agents,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 (the “Credit Agreement”). Included as Exhibit 10.1 to the Company’sEquity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 28, 2007,July 13, 2011, filed on March 5, 2007.July 14, 2011.

10.8

10.7		 Guaranty of Payment made as of February 28, 2007July 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 the Company’sEquity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 28, 2007,July 13, 2011, filed on March 5, 2007.July 14, 2011.

10.9

10.8		 Amendment No.1 to Revolving Credit Agreement.Included as Exhibit 10.1 to the Company’s Form 10-Q for the quarterly period ended March 31, 2007.

10.10

Credit Agreement dated as of October 5, 2007January 6, 2012 among ERP Operating Limited Partnership, Bank of America, N.A., as administrative agent,Administrative Agent, JPMorgan Chase Bank, N.A., as syndication agent, Banc of AmericaSyndication Agent, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Wells Fargo Securities, LLC, as joint lead arrangerJoint Lead Arrangers and joint book runner, J.P. Morgan Securities Inc.,Joint Book Runners, Suntrust Bank, U.S. Bank National Association, and Wells Fargo Bank, National Association, as joint lead arrangerDocumentation Agents, and joint book runner, Citicorp North America Inc.Citibank, N.A., Deutsche Bank Securities Inc., Regions Bank, The Royaland 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.
10.9Term Loan Agreement dated as of January 11, 2013 among ERP Operating Limited Partnership, Bank of Scotland plc,America, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A. and U.S.Wells Fargo Bank, National Association, as documentation agents,Co-Syndication Agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Wells Fargo Securities, LLC and J.P. Morgan Securities LLC, as Joint Lead Arrangers and Joint Book Runners, and a syndicate of other banks (the “Term Loan Agreement”). Included as Exhibit 10.110.3 to the Company’sEquity Residential's and ERP Operating Limited Partnership's Form 8-K dated October 5, 2007,January 11, 2013, filed on October 11, 2007.

January 15, 2013.

Exhibit

Description

Location

10.11

10.10		 Guaranty of Payment made as of October 5, 2007January 11, 2013 between Equity Residential and Bank of America, N.A., as administrative agent for the lendersbanks party to the Term Loan Agreement. Included as Exhibit 10.210.4 to the Company’sEquity Residential's and ERP Operating Limited Partnership's Form 8-K dated October 5, 2007,January 11, 2013, filed on October 11, 2007.January 15, 2013.

10.12

10.11		 Amended and Restated Limited Partnership Agreement of Lexford Properties, L.P. Included as Exhibit 10.16 to the Company’sEquity 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.



10.13*

Exhibit		 DescriptionLocation
10.14*Equity Residential Second Restated 2002 Share Incentive Plan dated December 10, 2008. Included as Exhibit 10.15 to the Company’sEquity Residential's Form 10-K for the year ended December 31, 2008.
10.15*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.

10.14*

10.16		*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.
10.17*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 the Company’sEquity Residential's Form 10-K for the year ended December 31, 2001.
10.19

10.15*

*First Amendment to Equity Residential 1993 Share Option and Share Award Plan. Included as Exhibit 10.1 to the Company’sEquity Residential's Form 10-Q for the quarterly period ended June 30, 2003.
10.20

10.16*

*Second Amendment to Equity Residential 1993 Share Option and Share Award Plan. Included as Exhibit 10.20 to the Company’sEquity Residential's Form 10-K for the year ended December 31, 2006.
10.21

10.17*

*Third Amendment to Equity Residential 1993 Share Option and Share Award Plan. Included as Exhibit 10.1 to the Company’sEquity Residential's Form 10-Q for the quarterly period ended June 30, 2007.
10.22

10.18*

*Fourth Amendment to Equity Residential 1993 Share Option and Share Award Plan. Included as Exhibit 10.2 to the Company’sEquity Residential's Form 10-Q for the quarterly period ended September 30, 2008.
10.23

10.19*

*Fifth Amendment to Equity Residential 1993 Share Option and Share Award Plan dated December 10, 2008. Included as Exhibit 10.21 to the Company’sEquity Residential's Form 10-K for the year ended December 31, 2008.
10.24

10.20*

Form of Equity Residential Performance Based Unit Award Grant Agreement.Included as Exhibit 10.18 to the Company’s Form 10-K for the year ended December 31, 2004.

10.21*

*Form of Change in Control Agreement between the Company and other executive officers. Included as Exhibit 10.13 to the Company’sEquity Residential's Form 10-K for the year ended December 31, 2001.
10.25

10.22*

*Form of First Amendment to Amended and Restated Change in Control/Severance Agreement with each executive officer. Included as Exhibit 10.1 to the Company’sEquity Residential's Form 10-Q for the quarterly period ended March 31, 2009.
10.26

10.23*

*Form of Indemnification Agreement between the Company and each trustee and executive officer. Included as Exhibit 10.18 to the Company’sEquity Residential's Form 10-K for the year ended December 31, 2003.
10.27

10.24*

*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 the Company’sEquity Residential's Form 10-Q for the quarterly period ended September 30, 2008.
10.28

10.25*

*Form of Executive Retirement Benefits Agreement. Included as Exhibit 10.24 to the Company’sEquity Residential's Form 10-K for the year ended December 31, 2006.

10.29

Exhibit

Description

Location

10.26*

*Retirement Benefits Agreement between Samuel Zell and the Company dated October 18, 2001. Included as Exhibit 10.18 to the Company’sEquity Residential's Form 10-K for the year ended December 31, 2001.
10.30

10.27*

*Amended and Restated Deferred Compensation Agreement between the Company and Gerald A. Spector dated January 1, 2002. Included as Exhibit 10.17 to the Company’sEquity Residential's Form 10-K for the year ended December 31, 2001.
10.31

10.28*

*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 the Company’sEquity Residential's and ERP Operating Limited Partnership's Form 8-K dated March 12, 2009, filed on March 18, 2009.
10.32*

10.29*

Summary of Changes to Trustee Compensation.Separation Agreement, dated August 28, 2012, by and between Equity Residential and Frederick C. Tuomi. Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the Company’s Form 8-K datedquarterly period ended September 21, 2005, filed on September 27, 2005.30, 2012.
10.33

10.30*

*The Equity Residential Supplemental Executive Retirement Plan as Amended and Restated effective NovemberJanuary 1, 2008.2012. Included as Exhibit 10.410.31 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 Company’s Form 10-Q for the quarterly period ended September 30, 2008.Equity Residential Supplemental Executive Retirement Plan.Attached herein.
10.35

10.31*

*The Equity Residential Grandfathered Supplemental Executive Retirement Plan as Amended and Restated effective January 1, 2005. Included as Exhibit 10.2 to the Company’sEquity Residential's Form 10-Q for the quarterly period ended March 31, 2008.

10.32

10.36		 Amended and Restated Sales Agency Financing Agreement, dated September 28, 2009,February 3, 2011, among the Company, the Operating Partnership and Merrill Lynch, Pierce, Fenner & Smith Incorporated. Included as Exhibit 1.1 to the Company’sEquity Residential's and ERP Operating Limited Partnership's Form 8-K dated September 28, 2009,and filed on September 29, 2009.February 3, 2011.
10.37

10.33


 Sales Agency Financing Agreement, dated September 28, 2009,February 3, 2011, 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.



ExhibitDescriptionLocation
10.38Amended and Restated Sales Agency Financing Agreement, dated February 3, 2011, among the Company, the Operating Partnership and J.P. Morgan Securities Inc.LLC. Included as Exhibit 1.21.3 to the Company’sEquity Residential's and ERP Operating Limited Partnership's Form 8-K dated September 28, 2009,and filed on September 29, 2009.February 3, 2011.

10.34

10.39		 Amended and Restated Sales Agency Financing Agreement, dated September 28, 2009,February 3, 2011, among the Company, the Operating Partnership and Morgan Stanley & Co. Incorporated. Included as Exhibit 1.31.4 to the Company’sEquity Residential's and ERP Operating Limited Partnership's Form 8-K dated September 28, 2009,and filed on September 29, 2009.February 3, 2011.
10.40Interest Purchase 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 2.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated December 2, 2011, filed on December 5, 2011.

10.41

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 Interest Agreement, dated February 17, 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 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 17, 2012, filed on February 21, 2012.
10.43Second Amendment to Other Interest Agreement, dated April 18, 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 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 2.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated May 24, 2012, filed on May 25, 2012.
10.45Asset Purchase Agreement, dated November 26, 2012, by and among ERP Operating Limited Partnership, Equity Residential, AvalonBay Communities, Inc., Lehman Brothers Holding Inc. and Archstone Enterprise LP.Included as Exhibit 2.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated and filed on November 26, 2012.
10.46Real Estate Sale Agreement, dated as of January 3, 2013 (executed January 4, 2013), by and among certain subsidiaries of ERP Operating Limited Partnership and GSG Residential Portfolio LLC.Included as Exhibit 2.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated January 4, 2013, filed January 7, 2013.
12

 Computation of Ratio of Earnings to Combined Fixed Charges. Attached herein.

21

 List of Subsidiaries of Equity Residential.Residential and ERP Operating Limited Partnership. Attached herein.

23.1

 Consent of Ernst & Young LLP.LLP - Equity Residential. Attached herein.
23.2Consent 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.

32.1

31.3		 ERP Operating Limited Partnership - Certification of David J. Neithercut, Chief Executive Officer of Registrant's General Partner.Attached herein.
31.4ERP Operating Limited Partnership - Certification of Mark J. Parrell, Chief Financial Officer of Registrant's General Partner.Attached herein.
32.1Equity Residential - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of David J. Neithercut, Chief Executive Officer of the Company. Attached herein.


32.2

Exhibit		 DescriptionLocation
32.2Equity 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.
32.3ERP 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, 2009,2012, formatted in XBRL: (i) consolidated balance sheets, (ii) consolidated statements of operations, (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 (v)(vi) notes to consolidated financial statements. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934. Attached herein.

*Management contracts and compensatory plans or arrangements filed as exhibits to this report are identified by an asterisk.



*Management contracts and compensatory plans or arrangements filed as exhibits to this report are identified by an asterisk.