Equity Residential 8K 2009 Other Events | EQR Filing

Exhibit 99.1

Item 6. Selected Financial Data

The following table sets forth selected financial and operating information on a historical basis for the Company. The following information should be read in conjunction with all of the financial statements and notes thereto included elsewhere in this Form 8-K. The historical operating and balance sheet data have been derived from the historical financial statements of the Company. Certain amounts have also been restated in accordance with the guidance on discontinued operations. Certain capitalized terms as used herein are defined in the Notes to Consolidated Financial Statements.

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	$	1,921,047		$	1,952,583		$	1,801,812		$	1,563,623		$	1,283,019


Interest and other income	$	16,684		$	33,515		$	20,037		$	30,785		$	68,220


Income (loss) from continuing operations	$	20,192		$	(21,325	)	$	13,147		$	(13,283	)	$	63,933


Discontinued operations, net	$	361,837		$	457,738		$	1,034,209		$	1,160,900		$	867,313


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	$	0.02		$	(0.13	)	$	(0.06	)	$	(0.19	)	$	—

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	$	0.02		$	(0.13	)	$	(0.06	)	$	(0.19	)	$	—

Net income available to Common Shares	$	1.27		$	1.46		$	3.40		$	3.55		$	2.83

Weighted average Common Shares outstanding		290,105			270,012			279,406			290,019			285,760


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	)


(1)		The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (“FFO”) (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Company commences the conversion of units to condominiums, it simultaneously discontinues depreciation of such property. FFO available to Common Shares and Units is calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares in accordance with accounting principles generally accepted in the United States. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the “Noncontrolling Interests — Operating Partnership”. Subject to certain restrictions, the Noncontrolling Interests — Operating Partnership may exchange their OP Units for EQR Common Shares on a one-for-one basis. See Item 7 for a reconciliation of net income to FFO and FFO available to Common Shares and Units.

(2)		The Company believes that FFO and FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies. FFO and FFO available to Common Shares and Units do not represent net income, net income available to Common Shares or net cash flows from operating activities in accordance with GAAP. Therefore, FFO and FFO available to Common Shares and Units should not be exclusively considered as alternatives to net income, net income available to Common Shares or net cash flows from operating activities as determined by GAAP or as measures of liquidity. The Company’s calculation of FFO and FFO available to Common Shares and Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.

(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 FFO available to Common Shares and Units — basic have all been reduced by approximately $10.6 million, $13.3 million, $10.1 million and $3.6 million for the years ended December 31, 2009, 2008, 2007 and 2006, respectively.

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 should be read in connection with the Consolidated Financial Statements and Notes thereto. Due to the Company’s ability to control the Operating Partnership and its subsidiaries 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. Capitalized terms used herein and not defined are as defined elsewhere in the Annual Report on Form 10-K for the year ended December 31, 2009.

Forward-Looking Statements

Forward-looking statements in this Item 7 as well as elsewhere in the Annual Report on Form 10-K are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates, projections and assumptions made by management. While the Company’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, which could cause actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Forward-looking statements are not guarantees of future performance, results or events. The forward-looking statements contained herein are made as of the date hereof and the Company undertakes no obligation to update or supplement these forward-looking statements. Factors that might cause such differences include, but are not limited to the following:

We intend to actively acquire 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. We may underestimate the costs necessary to bring an acquired property up to standards established for its intended market position or to complete a

development property. Additionally, we expect that other major real estate investors with significant capital will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development efforts. This competition may increase prices for multifamily properties. We may not be in a position or have the opportunity in the future to make suitable property acquisitions on favorable terms. To the extent that we do develop more properties if conditions warrant, we expect to do so ourselves in addition to co-investing with our development partners. The total number of development units, costs of development and estimated completion dates are subject to uncertainties arising from changing economic conditions (such as the cost of labor and construction materials), competition and local government regulation;

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

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

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

	§		Additional factors as discussed in Part I of the 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. EQR has elected to be taxed as a REIT.

The Company is one of the largest 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). The Company’s corporate headquarters are located in Chicago, Illinois and the Company also operates property management offices throughout the United States. As of December 31, 2009, the Company has approximately 4,100 employees who provide 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 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 scale in four critical ways:

	§		Investing in apartment communities located in strategically targeted markets to maximize our total return on an enterprise level;

	§		Meeting the needs of our residents by offering a wide array of product choices and a commitment to service;

	§		Engaging, retaining and attracting the best employees by providing them with the education, resources and opportunities to succeed; and

	§		Sharing resources and best practices in 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 customer service by our employees and by providing various value-added services.

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

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, joint venture agreements and collateralized and uncollateralized borrowings. 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. EQR may also acquire land parcels to hold and/or sell based on market opportunities.

When evaluating potential acquisitions, developments and dispositions, the Company generally considers the following factors:

	§		strategically targeted markets;

	§		income levels and employment growth trends in the relevant market;

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

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

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

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

	§		the potential for capital appreciation of the property;

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

	§		the potential for economic growth and the tax and regulatory environment of the community in which the property is located;

	§		the occupancy and demand by residents for properties of a similar type in the vicinity (the overall market and submarket);

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

	§		the benefits of integration into existing operations;

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

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

	§		opportunistic selling based on demand and price of high quality assets, 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 maturities and debt and equity repurchase activities. In addition, when feasible, the Company may structure these transactions as tax-deferred exchanges.

Current Environment

The slowdown in the economy, which accelerated in the fourth quarter of 2008 and continued into 2009, coupled with continued job losses and/or lack of job growth leads us 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, the Company may continue 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, since the first quarter of 2009 and began to show improvement 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 2009 as compared to 2008. Quarter over quarter revenue declines are 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 in the second half of 2010. Our revenues are also impacted by our resident turnover rates, 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), the Company anticipates that 2010 same store expenses will increase between 1.0% and 2.0% primarily due to cost pressures from non-controllable areas such as real estate taxes and utilities. The combination of expected declines in revenues and moderately increasing expense levels will have a negative impact on the Company’s results of operations 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 sold in 2008 and 2009 were financed for the purchaser by one of these agencies. Furthermore, Fannie Mae 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 reduce our access to debt capital and/or increase borrowing costs and would significantly reduce our sales of assets.

In response to the recession and liquidity issues prevalent 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 only 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 60 properties consisting of 12,489 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 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. While we believe these sales of non-core assets better positions us for future success, they have resulted and will continue to result in dilution, particularly when the net sales proceeds are initially not reinvested in activities generating equivalent income such as acquisition of rental properties or repayment of debt. Additionally, we have significantly reduced our development activities, starting only two new projects 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 we will undertake in the future and took a $116.4 million impairment charge in 2008 to reduce the value of five assets that we no longer plan 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 we currently have access to multiple sources of capital allowing us a less cautious posture with respect to pre-funding our maturing debt obligations. As a result of the improved credit environment, in late 2009, we utilized $366.2 million of cash on hand to repurchase certain unsecured notes 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.

We believe that cash and cash equivalents, securities readily convertible to cash, current availability on our revolving credit facility and disposition proceeds for 2010 will provide sufficient liquidity to meet our funding obligations relating to asset acquisitions, debt retirement and existing development projects through 2010. We expect that our remaining longer-term funding requirements will be met through some combination of new borrowings, equity issuances (including the Company’s ATM share offering program), property dispositions and cash generated from operations.

Despite the challenging conditions noted above, we believe that the Company is well-positioned notwithstanding the slow economic recovery. Our properties are geographically diverse and were approximately 94% occupied as of December 31, 2009, little new multifamily rental supply has been added to most of our markets and the long-term demographic picture is positive.

We believe we are well-positioned with a strong balance sheet and sufficient liquidity to cover debt maturities and development fundings in the near term, which should allow us to take advantage of investment opportunities in the future. When economic conditions improve, the short-term nature of our leases and the limited supply of new rental housing being constructed should allow us to quickly realize revenue growth and improvement in our operating results.

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, 2009 and December 31, 2008. In summary, we:

Year Ended December 31, 2009:

	§		Acquired $145.0 million of apartment properties consisting 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), as well as 62 condominium units for $12.0 million, the majority of which was in exit or less desirable markets.

Year Ended December 31, 2008:

	§		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’s primary financial measure for evaluating each of its apartment communities is net operating income (“NOI”). NOI represents rental income less property and maintenance expense, real estate tax and insurance expense and property management expense. The Company believes that NOI is helpful to investors as a supplemental measure of the operating performance of a real estate company because it is a direct measure of the actual operating results of the Company’s apartment communities.

Properties that the Company owned for all of both 2009 and 2008 (the “2009 Same Store Properties”), which represented 113,598 units, impacted the Company’s results of operations. Properties that the Company owned for all of

both 2008 and 2007 (the “2008 Same Store Properties”), which represented 115,051 units, also impacted the Company’s results of operations. Both the 2009 Same Store Properties and 2008 Same Store Properties are discussed in the following paragraphs.

The Company’s acquisition, disposition and completed development activities also impacted overall results of operations for the years ended December 31, 2009 and 2008. Dilution, as a result of the Company’s net asset sales, negatively impacts property net operating income. The impacts of these activities are discussed in greater detail in the following paragraphs.

Comparison of the year ended December 31, 2009 to the year ended December 31, 2008

For the year ended December 31, 2009, the Company reported diluted earnings per share of $1.27 compared to $1.46 per share for the year ended December 31, 2008. The difference is primarily due to the following:

	§		$57.6 million in lower net gains on sales of discontinued operations in 2009 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, partially offset by higher NOI contributions from lease-up properties; and

	§		Partially offset by $105.3 million in lower impairment losses in 2009 vs. 2008.

For the year ended December 31, 2009, income from continuing operations increased approximately $41.5 million when compared to the year ended December 31, 2008. The increase in continuing operations is discussed below.

Revenues from the 2009 Same Store Properties decreased $52.4 million primarily as a result of a decrease in average rental rates charged to residents and a decrease in occupancy. Expenses from the 2009 Same Store Properties decreased $0.8 million primarily due to lower property management costs, partially offset by higher real estate taxes and utility costs. The following tables provide comparative same store results and statistics for the 2009 Same Store Properties:

2009 vs. 2008
Same Store Results/Statistics
$ in thousands (except for Average Rental Rate) — 113,598 Same Store Units


	Results									Statistics
										Average
										Rental
Description	Revenues			Expenses			NOI			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	%)


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

The following table provides comparative same store operating expenses for the 2009 Same Store Properties:

2009 vs. 2008
Same Store Operating Expenses
$ in thousands — 113,598 Same Store Units


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


(1)		On-site payroll — Includes payroll and related expenses for on-site personnel including property managers, leasing consultants and maintenance staff.

(2)		Utilities — Represents gross expenses prior to any recoveries under the Resident Utility Billing System (“RUBS”). Recoveries are reflected in rental income.

(3)		Repairs and maintenance — Includes general maintenance costs, unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs.

(4)		Property management costs — Includes payroll and related expenses for departments, or portions of departments, that directly support on-site management. These include such departments as regional and corporate property management, property accounting, human resources, training, marketing and revenue management, procurement, real estate tax, property legal services and information technology.

(5)		Other operating expenses — Includes administrative costs such as office supplies, telephone and data charges and association and business licensing fees.

The following table presents a reconciliation of operating income per the consolidated statements of operations included in the original Form 10-K to NOI for the 2009 Same Store Properties (table has not been updated to reflect discontinued operations treatment for properties sold in the first six months of 2010).


	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

For properties that the Company acquired prior to January 1, 2009 and expects to continue to own through December 31, 2010, the Company anticipates the following same store results for the full year ending December 31, 2010:


2010 Same Store Assumptions
Physical occupancy		94.3%
Revenue change		(3.0%) to (1.0%)
Expense change		1.0% to 2.0%
NOI change		(6.0%) to (2.0%)

These 2010 assumptions are based on current expectations and are forward-looking.

Non-same store operating results increased approximately $34.3 million or 79.4% and consist primarily of properties acquired in calendar years 2008 and 2009, as well as operations from the Company’s completed development properties and corporate housing business. While the operations of the non-same store assets have been negatively impacted during the year ended December 31, 2009 similar to the same store assets, the non-same store assets have contributed a greater percentage of total NOI to the Company’s overall operating results primarily due to increasing occupancy for properties in lease-up and a longer ownership period in 2009 than 2008. This increase primarily resulted from:

	§		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 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 $0.1 million or 3.4% primarily due to an increase in revenue 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 management 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 in the number of properties in the Company’s portfolio, as well as decreases in temporary help/contractors, telecommunications and travel expenses.

Depreciation expense from continuing operations, which includes depreciation on non-real estate assets, increased approximately $22.8 million or 4.1% primarily as a result of additional depreciation expense on properties acquired in 2008 and 2009, development properties placed in service and capital expenditures for all properties owned.

General and administrative expenses from continuing operations, which include corporate operating expenses, decreased approximately $6.0 million or 13.3% primarily due 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 $2.9 million decrease in severance related costs in 2009 and a decrease in tax consulting costs. The Company anticipates that general and administrative expenses will approximate $38.0 million to $40.0 million for the year ending December 31, 2010. 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 decreased approximately $16.8 million or 50.2% primarily as a result of an $18.7 million gain recognized during 2008 related to the partial debt extinguishment of the Company’s notes compared to a $4.5 million gain recognized in 2009 (see Note 9). In addition, interest earned on cash and cash equivalents decreased due to a decrease in interest rates and because the Company received less insurance/litigation settlement proceeds and forfeited deposits in 2009, partially offset by a $4.9 million gain on the sale of investment securities realized in 2009. The Company anticipates that interest and other income will approximate $1.0 million to $3.0 million for the year ending December 31, 2010. The above assumption is based on current expectations and is forward-looking.

Other expenses from continuing operations increased approximately $0.7 million or 12.6% primarily due to an increase in transaction costs incurred in conjunction with the Company’s acquisition of two properties consisting of 566 units from unaffiliated parties, as well as expensing transaction costs associated with the Company’s acquisition of all 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-offs as a result of the Company’s decision to significantly reduce its development activities in 2009. The Company anticipates that other expenses will approximate $9.0 million to $12.0 million for the year ending December 31, 2010. The above assumption is based on current expectations and is forward-looking.

Interest expense from continuing operations, including amortization of deferred financing costs, increased approximately $17.3 million or 3.5% primarily as a result of an increase in debt extinguishment costs and lower capitalized interest. During the year ended December 31, 2009, the Company capitalized interest costs of approximately $34.9 million as compared to $60.1 million for the year ended December 31, 2008. This capitalization of interest primarily relates to consolidated projects under development. The effective interest cost on all indebtedness for the year ended December 31, 2009 was 5.62% as compared to 5.56% 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 $95.9 million or 21.0% 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 $34.5 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
										Average
										Rental
Description	Revenues			Expenses			NOI			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 $28.1 million or 5.4% 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 $0.1 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 million primarily due to a change in the estimate for Texas state taxes and an increase in franchise taxes.

Loss from investments in unconsolidated entities increased approximately $0.4 million between the periods under comparison. This increase is primarily due to income received in 2007 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 on 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 $576.5 million or 55.7% 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, 2008 compared to the same period in 2007, as well as the mix of properties sold in each year. See Note 13 in the Notes to Consolidated Financial Statements for further discussion.

Liquidity and Capital Resources

For the Year Ended December 31, 2009

As of January 1, 2009, the Company had approximately $890.8 million of cash and cash equivalents and $1.29 billion available under its revolving credit facility (net of $130.0 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). 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, 2009 was approximately $193.3 million, its restricted 1031 exchange proceeds totaled $244.3 million and the amount available on the Company’s revolving 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). 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, 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;

	§		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, the above proceeds were primarily utilized to:

	§		Invest $330.6 million primarily in development projects;

	§		Acquire three rental properties (including the Company’s buyout 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 47,450 Common Shares, utilizing cash of $1.1 million (see Note 3);

	§		Repurchase $652.1 million of fixed rate public notes;

	§		Repay $122.2 million of fixed rate public notes at maturity;

	§		Repurchase $75.8 million of fixed rate tax-exempt notes;

	§		Repay $956.8 million of mortgage loans; and

	§		Acquire $77.8 million of investment securities.

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. The Company 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. Actual sales will depend on a variety of factors to be determined by the Company from time to time, including (among others) market conditions, the trading price of the Company’s Common Shares and determinations of the appropriate sources of funding for the Company. 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 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.

Depending on its analysis of market prices, economic conditions, and other opportunities for the investment of available capital, the Company 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 Company had authorization to repurchase an additional $466.5 million of its shares. 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, 2009 are as follows:

Debt Summary as of December 31, 2009
(Amounts in thousands)


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


(1)		Net of the effect of any derivative instruments. Weighted average rates are for the year ended December 31, 2009.

Note: The Company capitalized interest of approximately $34.9 million and $60.1 million during the years ended December 31, 2009 and 2008, respectively.

Debt Maturity Schedule as of December 31, 2009
(Amounts in thousands)


												Weighted Average			Weighted Average
	Fixed			Floating								Rates on Fixed			Rates on
Year	Rate (1)			Rate (1)			Total		% of Total			Rate Debt (1)			Total Debt (1)
2010	$	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	%


(1)		Net of the effect of any derivative instruments. Weighted average rates are as of December 31, 2009.

(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:

Unsecured Debt Summary as of December 31, 2009
(Amounts in thousands)


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

(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 fair value interest rate swaps converts a portion 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)		Notes are 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)		As of December 31, 2009, there was no amount outstanding and approximately $1.37 billion available on the Company’s unsecured revolving credit facility.

As of February 25, 2010, 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 February 25, 2010, 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).

The Company’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 2009 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; (ii) the “Common Share Equivalent” of all convertible preferred shares; and (iii) the liquidation value of all perpetual preferred shares outstanding.

Capital Structure as of December 31, 2009
(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	%

Convertible Preferred Equity as of December 31, 2009
(Amounts in thousands except for share and per share amounts)


							Annual		Annual		Weighted					Common
	Redemption		Outstanding		Liquidation		Dividend		Dividend		Average			Conversion		Share
Series	Date		Shares		Value		Per Share		Amount		Rate			Ratio		Equivalents
Preferred Shares:
7.00% Series E		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 Preferred Equity as of December 31, 2009
(Amounts in thousands except for share and per share amounts)


							Annual		Annual		Weighted
	Redemption		Outstanding		Liquidation		Dividend		Dividend		Average
Series	Date		Shares		Value		Per Share		Amount		Rate
Preferred Shares:
8.29% Series K		12/10/26		1,000,000	$	50,000	$	4.145	$	4,145
6.48% Series N		6/19/08		600,000		150,000		16.20		9,720

Total Perpetual Preferred Equity				1,600,000	$	200,000			$	13,865		6.93	%

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 its 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. However, there may be times when the Company experiences shortfalls in its coverage of distributions, which may cause the Company to consider reducing its distributions and/or using the proceeds from property dispositions or additional financing transactions to make up the difference. Should these shortfalls occur for lengthy periods of time or be material in nature, the Company’s financial condition may be adversely affected and it may not be able to maintain its current distribution levels. The Company 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 2010 operating cash flow is 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 disposition of certain properties as well as 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 billion in investment in real estate on the Company’s balance sheet at December 31, 2009, $11.2 billion or 60.9%, 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 credit ratings from Standard & Poors (“S&P”), Moody’s and Fitch are BBB+, Baal and A-, respectively. As of the date of this filing, the Company’s preferred equity ratings from S&P, Moody’s and Fitch are BBB-, Baa2 and BBB, respectively. During the third quarter of 2009, Moody’s and Fitch placed both the Company and the Operating Partnership on negative outlook.

The Operating Partnership has a $1.5 billion long-term revolving credit facility with available borrowings as of February 19, 2010 of $1.36 billion (net of $65.2 million which was restricted/dedicated to support letters of 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). This facility may, among other potential uses, be used to fund property acquisitions, costs for certain properties under development and short-term liquidity requirements. As of February 19, 2010, $180.0 million was outstanding under this facility. The Company expects to repay essentially all of the outstanding balance under the line as dispositions close and restricted 1031 proceeds are released from escrow.

See Note 21 in the Notes to Consolidated Financial Statements for discussion of the events which occurred subsequent to December 31, 2009.

Capitalization of Fixed Assets and Improvements to Real Estate

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

Replacements(inside the unit). These include:

	§		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.

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

Building improvements(outside the unit). These include:

	§		roof replacement and major repairs;

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

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

	§		major building mechanical equipment systems;

	§		interior and exterior structural repair and exterior painting and siding;

	§		major landscaping and grounds improvement; and

	§		vehicles and office and maintenance equipment.

All building improvements are depreciated over a five to ten-year estimated useful life. We 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, our actual improvements to real estate totaled approximately $123.9 million. This includes the following (amounts in thousands except for unit and per unit amounts):

Capital Expenditures to Real Estate
For the Year Ended December 31, 2009


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


(1)		Total Units — Excludes 8,086 unconsolidated units and 4,595 military housing units, for which capital expenditures to real estate are self-funded and do not consolidate into the Company’s results.

(2)		Replacements — For same store properties includes $28.0 million spent on various assets related to unit renovations/rehabs (primarily kitchens and baths) designed to reposition these assets for higher rental levels in their respective markets.

(3)		Same Store Properties — Primarily includes all properties acquired or completed and stabilized prior to January 1, 2008, less properties subsequently sold.

(4)		Non-Same Store Properties — Primarily includes all properties acquired during 2008 and 2009, plus any properties in lease-up and not stabilized as of January 1, 2008. Per unit amounts are based on a weighted average of 9,823 units.

(5)		Other — Primarily includes expenditures for properties sold during the period.

For the year ended December 31, 2008, our actual improvements to real estate totaled approximately $169.8 million. This includes the following (amounts in thousands except for unit and per unit amounts):

Capital Expenditures to Real Estate
For the Year Ended December 31, 2008


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


(1)		Total Units — Excludes 9,776 unconsolidated units and 4,709 military housing units, for which capital expenditures to real estate are self-funded and do not consolidate into the Company’s results.

(2)		Established Properties — Wholly Owned Properties acquired prior to January 1, 2006.

(3)		New Acquisition Properties — Wholly Owned Properties acquired during 2006, 2007 and 2008. Per unit amounts are based on a weighted average of 18,983 units.

(4)		Other — Includes 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.

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, the Company estimates that it will spend approximately $1,075 per unit of capital expenditures for its same store properties inclusive of unit renovation/rehab costs, or $825 per unit excluding unit renovation/rehab costs. The above assumptions are based on current expectations and are forward-looking.

During the year ended December 31, 2009, 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 million. The Company expects to fund approximately $1.6 million in total additions to non-real estate property in 2010. 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 limit 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 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 11 in the Notes to Consolidated Financial Statements for additional discussion of derivative instruments at December 31, 2009.

Other

Total distributions paid in January 2010 amounted to $100.7 million (excluding distributions on Partially Owned Properties), which included certain distributions declared during the fourth quarter ended December 31, 2009.

Off-Balance Sheet Arrangements and Contractual Obligations

The Company has co-invested in various properties that are unconsolidated and accounted for under the equity method of accounting. Management does not believe these investments have a materially different impact upon the Company’s liquidity, cash flows, capital resources, credit or market risk than its property management and ownership 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% 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, the Company has four projects totaling 1,700 units in various stages of development with estimated completion dates ranging through June 30, 2011. The development agreements currently in place are discussed in detail in Note 18 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


(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.

(b)		Amounts include interest expected to be incurred on the Company’s secured and unsecured debt based on obligations outstanding at December 31, 2009 and inclusive of capitalized interest. For floating rate debt, the current rate in effect for the most recent payment through December 31, 2009 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 four properties/parcels.

(d)		Estimated payments to the Company’s Chairman, Vice Chairman and two former CEO’s based on 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, 2009 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.

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

Cost Capitalization

See the Capitalization of Fixed Assets and Improvements to Real Estate section for 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 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.

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

For the year ended December 31, 2009, Funds From Operations (“FFO”) available to Common Shares and Units decreased $2.9 million, or 0.5%, 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.

The following is a reconciliation of net income to FFO available to Common Shares and Units for each of the five years ended December 31, 2009:

Funds 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			576,156			553,352			525,234			445,995			330,698
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			24,219			49,556			91,180			146,522			198,049
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


(1)		The National Association of Real Estate Investment Trusts (“NAREIT”) defines funds from operations (“FFO”) (April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“GAAP”)), excluding gains (or losses) from sales of depreciable property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Company commences the conversion of units to condominiums, it simultaneously discontinues depreciation of such property. FFO available to Common Shares and Units is calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares in accordance with accounting principles generally accepted in the United States. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the “Noncontrolling Interests — Operating Partnership”. Subject to certain restrictions, the Noncontrolling Interests — Operating Partnership may exchange their OP Units for EQR Common Shares on a one-for-one basis.

(2)		The Company believes that FFO and FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies. FFO and FFO available to Common Shares and Units do not represent net income, net income available to Common Shares or net cash flows from operating activities in accordance with GAAP. Therefore, FFO and FFO available to Common Shares and Units should not be exclusively considered as alternatives to net income, net income available to Common Shares or net cash flows from operating activities as determined by GAAP or as measures of liquidity. The Company’s calculation of FFO and FFO available to Common Shares and Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.

(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 FFO available to Common Shares and Units have all been reduced by approximately $10.6 million, $13.3 million, $10.1 million and $3.6 million for the years ended December 31, 2009, 2008, 2007 and 2006, respectively.

Item 8. Financial Statements and Supplementary Data

See Index to Consolidated Financial Statements on page F-1.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

EQUITY RESIDENTIAL


	PAGE
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT

Report of Independent Registered Public Accounting Firm		F-2

Consolidated Balance Sheets as of December 31, 2009 and 2008		F-3

Consolidated Statements of Operations for the years ended December 31, 2009, 2008 and 2007	F-4 to F-5

Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007	F-6 to F-8

Consolidated Statements of Changes in Equity for the years ended December 31, 2009, 2008 and 2007	F-9 to F-10

Notes to Consolidated Financial Statements	F-11 to F-47

SCHEDULE FILED AS PART OF THIS REPORT

Schedule III — Real Estate and Accumulated Depreciation	S-1 to S-11

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders
Equity Residential

We have audited the accompanying consolidated balance sheets of Equity Residential (the “Company”) as of December 31, 2009 and 2008 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. 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, 2009 and 2008 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, 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, 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, 2010 (not provided herein) expressed an unqualified opinion thereon.



	/s/ ERNST & YOUNG LLP
	ERNST & YOUNG LLP

Chicago, Illinois
February 25, 2010, except for Notes 12, 13 and 20,
as to which the date is September 14, 2010

F-2

EQUITY RESIDENTIAL
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands except for share amounts)


	December 31,			December 31,
	2009			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

See accompanying notes

F-3

EQUITY RESIDENTIAL
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands except per share data)


	Year Ended December 31,
	2009			2008			2007
REVENUES
Rental income	$	1,910,701		$	1,941,868		$	1,792,629
Fee and asset management		10,346			10,715			9,183

Total revenues		1,921,047			1,952,583			1,801,812


EXPENSES
Property and maintenance		480,840			501,824			466,835
Real estate taxes and insurance		213,211			201,505			179,827
Property management		71,938			77,063			87,476
Fee and asset management		7,519			7,981			8,412
Depreciation		576,156			553,352			525,234
General and administrative		38,994			44,951			46,767
Impairment		11,124			116,418			—

Total expenses		1,399,782			1,503,094			1,314,551


Operating income		521,265			449,489			487,261

Interest and other income		16,684			33,515			20,037
Other expenses		(6,487	)		(5,760	)		(1,827	)
Interest:
Expense incurred, net		(503,542	)		(489,349	)		(489,054	)
Amortization of deferred financing costs		(12,794	)		(9,681	)		(10,073	)



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		15,126			(21,786	)		6,344
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		20,192			(21,325	)		13,147
Discontinued operations, net		361,837			457,738			1,034,209

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	$	0.02		$	(0.13	)	$	(0.06	)

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	$	0.02		$	(0.13	)	$	(0.06	)

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

See accompanying notes

F-4

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

See accompanying notes

F-5

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	)

See accompanying notes

F-6

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

See accompanying notes

F-7

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	)

See accompanying notes

F-8

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

See accompanying notes

F-9

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

See accompanying notes

F-10

EQUITY RESIDENTIAL
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business

As of December 31, 2009, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 495 properties in 23 states and the District of Columbia consisting of 137,007 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

The “Wholly Owned Properties” are accounted for under the consolidation method of accounting. The Company beneficially owns 100% fee simple title to 429 of the 432 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 and 2101 for the three operating properties, respectively, and 2104 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

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. The consolidated financial statements also include all variable interest entities for which the Company is the primary beneficiary.

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.

F-11

	§		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 a unit such as appliances and carpeting are depreciated over a five-year estimated useful life. Expenditures for ordinary maintenance and repairs are expensed to operations as incurred and significant renovations and improvements that improve and/or extend the useful life of the asset are capitalized over their estimated useful life, generally five to ten years. Initial direct leasing costs are expensed as incurred as such expense approximates the deferral and amortization of initial direct leasing costs over the lease terms. Property sales or dispositions are recorded when title transfers 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

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. 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.

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

F-12

Cost Capitalization

See theReal Estate Assets and Depreciation of Investment in Real Estatesection 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 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.

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.

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 million and $31.4 million at December 31, 2009 and 2008, respectively.

Fair Value of Financial Instruments, Including Derivative Instruments

The Company recognizes all derivatives as either assets or liabilities in the statement of financial position and measures those instruments at fair value. In addition, fair value adjustments will affect either shareholders’ equity or net

F-13

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. The fair value of the option grants are recognized over the vesting period of the options. The fair value for the Company’s share options was estimated at the time the share options were granted using the Black-Scholes option pricing model with the following weighted average assumptions:


	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


(1)		Expected volatility — Estimated based on the historical volatility of EQR’s share price, on a monthly basis, for a period matching the expected life of each grant.

(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. 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 may be significantly different.

Income and Other Taxes

Due to the structure of the Company 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. 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.

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Deferred tax assets and liabilities 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 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, the Company has recorded a deferred tax asset of approximately $42.5 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, 2008 and 2007 (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	)


(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 provision 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’ have approximately $46.7 million of NOL carryforwards available as of January 1, 2010 that will expire in 2028 and 2029.

During the years ended December 31, 2009, 2008 and 2007, 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

The cost of land and depreciable property, net of accumulated depreciation, for federal income tax purposes as of December 31, 2009 and 2008 was approximately $10.4 billion and $10.7 billion, respectively.

Noncontrolling Interests

Effective January 1, 2009, a noncontrolling interest in a subsidiary (minority interest) is in most cases an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements and separate from the parent company’s equity. In addition, consolidated net income is required to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest and the amount of consolidated net income attributable to the parent and the noncontrolling interest are required to be disclosed on the face of the Consolidated 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

F-15

percentage of the Operating Partnership. The ownership percentage is calculated by dividing the number of units of limited partnership interest (“OP 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”), 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.

Redeemable Noncontrolling Interests — Operating Partnership: The Company classifies Redeemable Noncontrolling Interests — Operating Partnership in the mezzanine section of the balance sheet for the portion of OP Units that the Company 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 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.

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 adopted the codification as required, effective for the quarter ended September 30, 2009. The adoption 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 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). 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.

F-16

The Company is required to make certain disclosures regarding noncontrolling interests in consolidated limited-life subsidiaries. The Company is presently the controlling partner in various consolidated partnerships consisting of 27 properties and 5,530 units and various uncompleted development properties having a noncontrolling interest book value of $11.1 million at December 31, 2009. Some of these 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, the Company estimates the value of Noncontrolling Interest distributions would have been approximately $45.5 million (“Settlement Value”) had the partnerships been liquidated. This Settlement Value is based on estimated third party consideration realized by the partnerships upon disposition of the Partially Owned Properties and is net of all other assets and liabilities, including yield maintenance on the mortgages encumbering the properties, that would have been due on December 31, 2009 had those mortgages been prepaid. Due to, among other things, the inherent uncertainty in the sale of real estate assets, the amount of any potential distribution to the Noncontrolling Interests in the Company’s Partially Owned Properties is subject to change. To the extent that the partnerships’ underlying assets are worth less than the underlying liabilities, the Company has no obligation to remit any consideration to the Noncontrolling Interests in these Partially Owned Properties.

Effective January 1, 2008, the rules governing fair value measurements changed. These rules established a comprehensive framework for measuring fair value in accordance with accounting principles generally accepted in the United States 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 certain financial instruments. The Fair Value Option 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. 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 will 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 well as the valuation techniques and inputs used in determining the fair value of assets or liabilities classified as Level 2 or 3. The Company does not expect this will have a material effect on its consolidated results of operations or financial position.

Effective January 1, 2011, companies will be required to separately disclose purchases, sales, issuances and settlements on a gross basis in the reconciliation of recurring Level 3 measurements. 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.

F-17

Effective January 1, 2009, issuers of certain convertible debt instruments that may be settled in cash on conversion are required to separately account for the liability and equity components of the instrument in a manner that reflects each issuer’s nonconvertible debt borrowing rate. As the Company is required to apply this retrospectively, the accounting for the Operating Partnership’s $650.0 million ($482.5 million outstanding at December 31, 2009) 3.85% convertible unsecured notes that were issued in August 2006 and mature in August 2026 is affected. The Company recognized $20.6 million, $24.4 million and $25.0 million in interest expense related to the stated coupon of 3.85% for the years ended December 31, 2009, 2008 and 2007, 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 million and is being amortized to interest expense over the expected life of the convertible notes (through the first put date on August 18, 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 million or $0.04 per share for the year ended December 31, 2009 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 by $27.0 million, decreased the January 1, 2009 balance of notes by $17.3 million and increased the January 1, 2009 balance of paid in capital by $44.3 million. Due to the required retrospective application, it resulted in a reduction to earnings of approximately $13.3 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 was $44.3 million at both December 31, 2009 and 2008. The unamortized cash and conversion option discounts totaled $12.8 million and $23.4 million at December 31, 2009 and 2008, respectively.

3. Equity and Redeemable Noncontrolling Interests

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, 2008 and 2007:

F-18


	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).

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

F-19

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.

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 is based on the proportional relationship between the carrying values of equity associated with EQR’s Common Shares relative to that of the Noncontrolling Interests — Operating Partnership. 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 to any and all holders of Noncontrolling Interests — Operating Partnership Units requesting an exchange from 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. 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 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, 2009 and 2008.

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, the Redeemable Noncontrolling Interests — Operating Partnership have a redemption value of approximately $258.3 million, which represents the value of EQR Common Shares that would be issued in exchange with the Redeemable Noncontrolling Interests — Operating Partnership Units.

F-20

The following table presents the changes in the redemption value of the Redeemable Noncontrolling Interests — Operating Partnership for the years ended December 31, 2009, 2008 and 2007, 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

Net proceeds from the Company’s Common Share and Preferred Share (see definition below) offerings are contributed by the Company to the Operating Partnership. In return for those contributions, EQR receives a number of OP Units in the Operating Partnership 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 Partnership 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.

The Company’s declaration of trust authorizes the Company to issue up to 100,000,000 preferred shares of beneficial interest, $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, 2009 and 2008:


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


(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.

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(3)		Dividends on all series of Preferred Shares are payable quarterly at various pay dates. The dividend listed for Series N is a Preferred Share rate and the equivalent Depositary Share annual dividend is $1.62 per share.

(4)		The Series N Preferred Shares have a corresponding depositary share that consists of ten times the number of shares and one-tenth the liquidation value and dividend per share.

During the year ended December 31, 2007, the Company redeemed for cash all 700,000 shares of its 8.60% Series D Preferred Shares with a liquidation value of $175.0 million. The Company recorded the write-off of approximately $6.1 million in original issuance costs as a premium on redemption of Preferred Shares in the accompanying consolidated statements of operations.

During the year ended December 31, 2007, the Company issued an irrevocable notice 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:


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

During the year ended December 31, 2009, the Company acquired all of its partners’ interests in five partially owned properties consisting of 1,587 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 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 by $1.5 million and Noncontrolling Interests — Partially Owned Properties by $11.7 million.

During the year ended December 31, 2008, the Company acquired all of its partners’ interests in one 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, partially funded through the issuance of 19,017 OP Units valued at $0.8 million.

4. Real Estate

The following table summarizes the carrying amounts for the Company’s investment in real estate (at cost) as of December 31, 2009 and 2008 (amounts in thousands):

F-22


	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

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


					Purchase
	Properties		Units		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.

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


					Purchase
	Properties		Units		Price
Rental Properties		7		2,141	$	380,683
Uncompleted Developments		—		—		31,705
Military Housing (1)		1		978		—

Total		8		3,119	$	412,388


(1)		The Company assumed management of 978 housing units (828 units as of December 31, 2009) at McChord Air Force Base in Washington state and invested $2.4 million towards its redevelopment. McChord AFB adjoins Ft. Lewis, a U.S. Army base at which the Company already manages 3,731 units (3,767 units as of December 31, 2009).

During the year ended December 31, 2009, 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.

F-23

The Company recognized a net gain on sales of discontinued operations of approximately $335.3 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, 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


(1)		The Company owned a 25% interest in these unconsolidated rental properties. Sales price listed is the gross sales price.

The Company recognized a net gain on sales of discontinued operations of approximately $392.9 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 million on the above sales.

5. Commitments to Acquire/Dispose of Real Estate

As of the date of this filing, in addition to the properties that were subsequently acquired as discussed in Note 21, the Company had entered into separate agreements to acquire two rental properties consisting of 852 units for $309.7 million.

As of the date of this filing, in addition to the properties that were subsequently disposed of as discussed in Note 21, the Company had 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

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

6. Investments in Partially Owned Entities

The Company has co-invested in various properties with unrelated third parties which are either consolidated or accounted for under the equity method of accounting (unconsolidated). The following table summarizes the Company’s investments in partially owned entities as of December 31, 2009 (amounts in thousands except for project and unit amounts):

F-24


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


(1)		Project and unit counts exclude all uncompleted development projects until those projects are 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.

(3)		Represents the Company’s current economic 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.

(5)		Unconsolidated debt maturities and rates for institutional joint ventures are as follows: $112.6 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 aside from the net proceeds of property sales. During the third quarter of 2009, the Company acquired its partner’s interest in one of the previously unconsolidated properties containing 250 units for $18.5 million and as a result, the project is now consolidated and wholly owned.

7. Deposits — Restricted

The following table presents the Company’s restricted deposits as of December 31, 2009 and 2008 (amounts in thousands):


	December 31,		December 31,
	2009		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


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

8. Mortgage Notes Payable

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

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

	§		Repaid $956.8 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;

F-25

	§		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 million and wrote-off approximately $1.1 million of unamortized deferred financing costs; and

	§		Was released from $17.3 million of mortgage debt assumed by the purchaser on two disposed properties.

As of December 31, 2009, scheduled maturities for the Company’s outstanding mortgage indebtedness were at various dates through September 1, 2048. At December 31, 2009, the interest rate range on the Company’s mortgage debt was 0.20% to 12.465%. During the year ended December 31, 2009, the weighted average interest rate on the Company’s mortgage debt was 4.89%.

The historical cost, net of accumulated depreciation, of encumbered properties was $5.8 billion and $6.5 billion at December 31, 2009 and 2008, 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, the Company had outstanding mortgage debt of approximately $5.0 billion.

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

	§		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 of prepayment penalties and write-offs of unamortized deferred financing costs, respectively, as additional interest related to debt extinguishment of mortgages during the year ended December 31, 2008.

As of December 31, 2008, scheduled maturities for the Company’s outstanding mortgage indebtedness were at various dates through September 1, 2048. At December 31, 2008, the interest rate range on the Company’s mortgage debt was 0.60% to 12.465%. During the year ended December 31, 2008, the weighted average interest rate on the Company’s mortgage debt was 5.18%.

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, 2009 and 2008, respectively:

F-26


	Net		Interest			Weighted			Maturity
December 31, 2009	Principal		Rate			Average			Date
(Amounts are in thousands)	Balance		Ranges			Interest Rate			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


	Net		Interest			Weighted			Maturity
December 31, 2008	Principal		Rate			Average			Date
(Amounts are in thousands)	Balance		Ranges			Interest Rate			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


(1)		At December 31, 2009, $300.0 million in fair value interest rate swaps converts a portion of the $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, 2009 and 2008.

As of December 31, 2009, 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).

During the year ended December 31, 2009, 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

F-27

of 88.4% of par and recognized a gain on early debt extinguishment of $2.0 million and wrote-off approximately $0.1 million of unamortized deferred financing costs and approximately $0.8 million of unamortized discounts on notes payable; and

Repurchased at par $48.5 million of its 3.85% convertible fixed rate public notes due August 15, 2026 pursuant to a cash tender offer announced on December 2, 2009 and wrote-off approximately $0.3 million of unamortized deferred financing costs and approximately $1.5 million of unamortized discounts on notes payable.

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 Partnership closed on a $500.0 million senior unsecured term loan. 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 bear interest at variable rates based upon LIBOR plus a spread (currently 0.50%) dependent upon the current credit rating on the Operating Partnership’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 Partnership issued $650.0 million of exchangeable senior notes that mature on August 15, 2026. Following the repurchases discussed above, the notes had a face value of $482.5 million at December 31, 2009. The notes bear interest at a fixed rate of 3.85%. The notes are 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 principal amount of notes (equivalent to an initial exchange price of $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, the Operating Partnership will settle any amounts up to the principal amount of 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. See Note 2 for more information on the change in the recognition of interest expense for the exchangeable senior notes.

On or after August 18, 2011, the Operating Partnership may redeem the notes at 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

F-28


(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.

10. Lines of Credit

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 0.50%) 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). The Company did not draw and had no balance outstanding on its revolving credit facility at any time during the year ended December 31, 2009. 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). During the year ended December 31, 2008, the weighted average interest rate was 4.31%.

11. Derivative and Other Fair Value Instruments

The carrying values of the Company’s mortgage notes payable and unsecured notes were approximately $4.8 billion and $4.6 billion, respectively, at December 31, 2009. The fair values of the Company’s mortgage notes payable and unsecured notes were approximately $4.6 billion and $4.7 billion, respectively, at December 31, 2009. The carrying values of the Company’s mortgage notes payable and unsecured notes were approximately $5.0 billion and $5.4 billion, respectively, at December 31, 2008. The fair values of the Company’s mortgage notes payable and unsecured notes were approximately $5.0 billion and $4.7 billion, respectively, at December 31, 2008. The fair values of the Company’s financial instruments, other than mortgage notes payable, unsecured notes, derivative instruments and investment securities, including cash and cash equivalents, lines of credit and other financial instruments, approximate their carrying or contract values.

The following table summarizes the Company’s consolidated derivative instruments at December 31, 2009 (dollar amounts are in thousands):

F-29


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


(1)		Fair Value Hedges — Convert 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, 2013 and 2014.

(3)		Development Cash Flow Hedges — Convert outstanding floating rate debt to a fixed interest rate.

The following tables provide 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
	Balance Sheet			Balance Sheet
December 31, 2009	Location	Fair Value		Location	Fair Value
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Fair Value Hedges	Other assets	$	5,186	Other liabilities	$	—
Forward Starting Swaps	Other assets		23,630	Other liabilities		—
Development Cash Flow Hedges	Other assets		—	Other liabilities		(3,577	)

Total		$	28,816		$	(3,577	)


	Asset Derivatives			Liability Derivatives
	Balance Sheet			Balance Sheet
December 31, 2008	Location	Fair Value		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):

Location of Gain/(Loss)

Amount of Gain/(Loss)

Income Statement

Amount of Gain/(Loss)

December 31, 2009

Recognized in Income

Location of Hedged

Recognized in Income

Type of Fair Value Hedge

on Derivative

Hedged Item

Item Gain/(Loss)

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

F-30

Location of Gain/(Loss)

Amount of Gain/(Loss)

Income Statement

Amount of Gain/(Loss)

December 31, 2008

Recognized in Income

Location of Hedged

Recognized in Income

Type of Fair Value Hedge

on Derivative

Hedged Item

Item Gain/(Loss)

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 of 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

Amount of

Location of Gain/(Loss)

Amount of Gain/(Loss)

Location of

Amount of Gain/(Loss)

Gain/(Loss)

Reclassified from

Gain/(Loss)

Reclassified from

December 31, 2009

Recognized in OCI

Accumulated OCI

Recognized in Income

Accumulated OCI

Type of Cash Flow Hedge

on Derivative

into Income

on Derivative

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
	Amount of			Location of Gain/(Loss)	Amount of Gain/(Loss)			Location of		Amount of Gain/(Loss)
	Gain/(Loss)			Reclassified from	Reclassified from			Gain/(Loss)		Reclassified from
December 31, 2008	Recognized in OCI			Accumulated OCI	Accumulated OCI			Recognized in Income		Accumulated OCI
Type of Cash Flow Hedge	on Derivative			into Income	into Income			on Derivative		into Income
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Forward Starting Swaps/Treasury Locks	$	(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

F-31

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		Amortized		Unrealized		Unrealized		Book/		Interest and
Security	Maturity	Cost		Gains		Losses		Fair Value		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		Amortized		Unrealized		Unrealized		Book/		Interest and
Security	Maturity	Cost		Gains		Losses		Fair Value		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

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:

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 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, 2009 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.

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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 Partnership are valued using the quoted market price of EQR Common Shares and are classified within Level 2 of the valuation hierarchy.

The Company’s real estate asset impairment charge was the result of an analysis of the parcel’s fair value (determined using internally developed models that were based on market assumptions and comparable sales data) (Level 3) compared to its current capitalized carrying value. The valuation technique used to measure fair value is consistent with how similar assets were measured in prior periods. See Note 19 for further discussion.

12. Earnings Per Share

The following tables set forth the computation of net income per share — basic and net income per share — diluted (amounts in thousands except per share amounts):

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	Year Ended December 31,
	2009			2008			2007
Numerator for net income per share — basic:
Income (loss) from continuing operations	$	20,192		$	(21,325	)	$	13,147
Allocation to Noncontrolling Interests — Operating Partnership, net		(331	)		2,391			1,145
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		5,931			(36,106	)		(17,295	)
Discontinued operations, net of Noncontrolling Interests		341,863			429,221			968,537


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	$	20,192
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		6,262
Discontinued operations, net		361,837
							��

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	$	0.022		$	(0.134	)	$	(0.062	)
Discontinued operations, net of Noncontrolling Interests		1.249			1.590			3.467


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	$	0.022		$	(0.134	)	$	(0.062	)
Discontinued operations, net		1.247			1.590			3.467


Net income per share — diluted	$	1.269		$	1.456		$	3.405

Potential common shares issuable from the assumed conversion 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.

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Convertible preferred shares/units that could be converted into 402,501, 427,090 and 652,534 weighted average Common Shares for the years ended December 31, 2009, 2008 and 2007, 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 $650.0 million ($482.5 million outstanding at December 31, 2009) exchangeable senior notes 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.

13. 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. Results are reflective of dispositions through June 30, 2010.

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, 2008, and 2007 (amounts in thousands).


	Year Ended December 31,
	2009			2008			2007
REVENUES
Rental income	$	95,487		$	196,329		$	345,376

Total revenues		95,487			196,329			345,376


EXPENSES (1)
Property and maintenance		33,057			59,009			108,351
Real estate taxes and insurance		11,101			21,930			42,377
Property management		—			(62	)		266
Depreciation		24,219			49,556			91,180
General and administrative		34			29			15

Total expenses		68,411			130,462			242,189


Discontinued operating income		27,076			65,867			103,187

Interest and other income		21			249			328
Other expenses		(1	)		—			(3	)
Interest (2):
Expense incurred, net		(1,390	)		(3,061	)		(7,847	)
Amortization of deferred financing costs		(333	)		(20	)		(1,776	)
Income and other tax benefit (expense)		1,165			1,846			7,307


Discontinued operations		26,538			64,881			101,196
Net gain on sales of discontinued operations		335,299			392,857			933,013


Discontinued operations, net	$	361,837		$	457,738		$	1,034,209


(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 and the first six months of 2010 (excluding condominium conversion properties), the investment in real estate, net of accumulated depreciation, and the mortgage notes payable balances at December 31, 2008 were $662.2 million and $38.9 million, respectively. For the properties sold during the first six months of 2010 (excluding condominium conversion properties), the investment in real estate, net of accumulated depreciation, and the mortgage notes payable balances at December 31, 2009 were $85.3 million and $40.0 million, respectively.

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The net real estate basis 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 $11.8 million and $24.1 million at December 31, 2009 and 2008, respectively.

14. Share Incentive Plans

On May 15, 2002, the shareholders of EQR approved the Company’s 2002 Share Incentive Plan. The maximum aggregate number of awards that may be granted under this plan may not exceed 7.5% of the Company’s outstanding Common Shares calculated on a “fully diluted” basis and determined annually on the first day of each calendar year. As of January 1, 2010, this amount equaled 22,091,629, of which 6,295,992 shares were available for future issuance. No awards may be granted under the 2002 Share Incentive Plan, as restated, after February 20, 2012.

Pursuant to 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, 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-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 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 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, 2009 generally vest three years from the award date. In addition, the Company’s unvested restricted shareholders have the same voting rights as any other Common Share holder. During the three-year period of restriction, the Company’s unvested restricted shareholders receive quarterly dividend payments on their shares at the same rate and on the same date as any other Common Share holder. As a result, dividends paid on unvested restricted shares are included as a component of retained earnings and have not been considered in reducing net income available to Common Shares in a manner similar to the Company’s preferred share dividends for the earnings per share calculation. If employment is terminated prior to the lapsing of the restriction, the shares are generally canceled.

In December 2008, the Company’s 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. 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, officers of the Company were allowed to choose, on a one-for-one basis, between restricted shares and 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 Partnership and have not been considered in reducing net income available to Common Shares in a manner similar to the Company’s preferred share dividends for the earnings per share 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.

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

F-36

Incentive Plans. For employees hired prior to January 1, 2009, retirement generally will mean 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 mean the termination of employment (other than for cause) after meeting the requirements of the Rule of 70.

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 retirement in 2009 as he turned 62. Frederick C. Tuomi, President — Property Management, became eligible for retirement under the Rule of 70 in 2009. The following 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, Chief Executive Officer and President — 2011.

For employees hired prior to January 1, 2009, who retire at or after age 62, such employee’s unvested restricted shares 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 was provided under the Share Incentive Plans prior to the adoption of the Rule of 70. 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 new definition of retirement of employees, such employee’s unvested restricted shares 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 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, 2008 and 2007 (amounts in thousands):


	Year Ended December 31, 2009
	Compensation		Compensation		Compensation		Dividends
	Expense		Capitalized		Equity		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			Compensation		Compensation			Dividends
	Expense			Capitalized		Equity			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

F-37


	Year Ended December 31, 2007
	Compensation		Compensation		Compensation		Dividends
	Expense		Capitalized		Equity		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

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, 2009 is $18.7 million, which is expected to be recognized over a weighted average term of 1.3 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, 2008 and 2007:


				Weighted					Weighted					Weighted
	Common			Average					Average Fair					Average Fair
	Shares Subject			Exercise Price		Restricted			Value per		LTIP			Value per
	to Options			per Option		Shares			Restricted Share		Units			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


(1)		The weighted average grant date fair value for Options granted during the years ended December 31, 2009, 2008 and 2007 was $3.38 per share, $4.08 per share and $6.26 per share, respectively.

(2)		The aggregate intrinsic value of options exercised during the years ended December 31, 2009, 2008 and 2007 was $2.8 million, $15.6 million and $13.7 million, respectively. These values were calculated as the difference between the strike price of the underlying awards and the per share price at which each respective award was exercised.

(3)		The fair value of restricted shares vested during the years ended December 31, 2009, 2008 and 2007 was $8.0 million, $23.9 million and $25.5 million, respectively.

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The following table summarizes information regarding options outstanding and exercisable at December 31, 2009:


	Options Outstanding (1)						Options Exercisable (2)
			Weighted
			Average		Weighted				Weighted
			Remaining		Average				Average
			Contractual		Exercise				Exercise
Range of Exercise Prices	Options		Life in Years		Price		Options		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


(1)		The aggregate intrinsic value of both options outstanding and options vested and expected to vest as of December 31, 2009 is $49.9 million.

(2)		The aggregate intrinsic value and weighted average remaining contractual life in years of options exercisable as of December 31, 2009 is $29.3 million and 4.3 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 per share on December 31, 2009 and the strike price of the underlying awards.

As of December 31, 2008 and 2007, 7,522,344 Options (with a weighted average exercise price of $31.58) and 7,000,222 Options (with a weighted average exercise price of $28.45) were exercisable, respectively.

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 of Common Shares of the Company. In 2003, the Company’s shareholders approved an increase in the aggregate number of Common Shares available under the ESPP to 7,000,000 (from 2,000,000). The Company has 3,561,333 Common Shares available for purchase under the ESPP at December 31, 2009. 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

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 million, $3.8 million and $4.2 million for the years ended December 31, 2009, 2008 and 2007, respectively.

F-39

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.

16. Distribution Reinvestment and Share Purchase Plan

On November 3, 1997, the Company filed with the SEC a Form S-3 Registration Statement to register 14,000,000 Common Shares pursuant to a Distribution Reinvestment and Share Purchase Plan (the “DRIP Plan”). The registration statement was declared effective on November 25, 1997. The remaining shares available for issuance under the 1997 registration lapsed in December 2008.

On December 16, 2008, the Company filed with the SEC a Form S-3 Registration Statement to register 5,000,000 Common Shares under the DRIP Plan. The registration statement was automatically declared effective the same day and expires at the earlier of the date in which all 5,000,000 shares have been issued or December 15, 2011. The Company has 4,932,533 Common Shares available for issuance under the DRIP Plan at December 31, 2009.

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, 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, be directly issued by the Company or purchased by the Company’s transfer agent in the open market using participants’ funds.

17. Transactions with Related Parties

The Company provided asset 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.

The Company leases its corporate headquarters from an entity controlled by EQR’s Chairman of the Board of Trustees. The lease terminates on July 31, 2011. Amounts incurred for such office space for the years ended December 31, 2009, 2008 and 2007, respectively, were approximately $3.0 million, $2.9 million and $2.9 million. The Company believes these amounts equal market rates for such rental space.

18. Commitments and Contingencies

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

The Company is party to a housing discrimination lawsuit brought by a non-profit civil rights organization in April 2006 in the U.S. District Court for the District of Maryland. The suit alleges that the Company designed and built approximately 300 of its properties in violation of the accessibility requirements of the Fair Housing Act and Americans With Disabilities Act. The suit seeks actual and punitive damages, injunctive relief (including modification of non-compliant properties), costs and attorneys’ fees. The Company believes it has a number of viable defenses, including that a majority of the named properties were completed before the operative dates of the statutes in question and/or were not designed or built by the Company. Accordingly, the Company is defending the suit vigorously. Due to the pendency of the Company’s defenses and the uncertainty of many other critical factual and legal issues, it is not possible to determine or predict the

F-40

outcome of the suit and as a result, no amounts have been accrued at December 31, 2009. 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 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), 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 four projects totaling 1,700 units in various stages of development with estimated completion dates ranging through June 30, 2011. Some of the projects are developed solely by the Company, while others are co-developed with various third party development partners. 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 partner is most often the “general” or “managing” partner of the development venture. 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 interest in the project at fair market value upon the expiration of a negotiated time period (typically two to five years after substantial completion of the project).

During the years ended December 31, 2009, 2008 and 2007, total operating lease payments incurred for office space, including a portion of real estate taxes, insurance, repairs and utilities, and including rent due under three ground leases, aggregated $8.4 million, $8.3 million and $7.6 million, respectively.

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, 2009 and 2007, the Company recognized compensation expense of $1.2 million and $0.7 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


(a)		Minimum basic rent due for various office space the Company leases and fixed base rent due on ground leases for four properties/parcels.

(b)		Estimated payments to the Company’s Chairman, Vice Chairman and two former CEO’s based on 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.

F-41

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

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

The Company’s primary business is owning, managing and operating multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents. Senior management evaluates the performance of each of our apartment communities individually and geographically, 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. The Company’s operating segments have been aggregated by geography in a manner identical to that which is provided to its chief operating decision maker.

The Company’s fee and asset management, development (including its partially owned properties), condominium conversion and corporate housing (Equity Corporate Housing or “ECH”) activities are immaterial and do not individually meet the threshold requirements of a reportable segment and as such, have been aggregated in the “Other” segment 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, or 2007.

The primary financial measure for the Company’s rental real estate properties 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 the operating performance of a real estate company because it is a direct measure of the actual operating results of the Company’s apartment communities. 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, 2008 and 2007, respectively, as well as total assets for the years ended December 31, 2009 and 2008, respectively (amounts in thousands):

F-42


	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
Properties sold — June YTD 2010 (4)		—		—		—		—		(22,664	)		(22,664	)

Total rental income		607,829		376,749		408,487		454,270		63,366			1,910,701

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
Properties sold — June YTD 2010 (4)		—		—		—		—		(8,415	)		(8,415	)

Total operating expenses		229,745		137,370		168,761		162,000		68,113			765,989

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
Properties sold — June YTD 2010 (4)		—		—		—		—		(14,249	)		(14,249	)

Total NOI	$	378,084	$	239,379	$	239,726	$	292,270	$	(4,747	)	$	1,144,712


Total assets	$	5,042,017	$	2,591,361	$	2,757,701	$	2,774,666	$	2,251,770		$	15,417,515


(1)		Same store includes properties owned for all of both 2009 and 2008 which represented 113,598 units.

(2)		Non-same store includes properties acquired after January 1, 2008.

(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.

(4)		Properties sold — June YTD 2010 reflects discontinued operations for properties sold during the first six months of 2010.


	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
Properties sold — June YTD 2010 (4)		—		—		—		—		(23,086	)		(23,086	)

Total rental income		590,712		390,544		413,961		467,803		78,848			1,941,868

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
Properties sold — June YTD 2010 (4)		—		—		—		—		(8,301	)		(8,301	)

Total operating expenses		216,479		136,112		169,017		165,343		93,441			780,392

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
Properties sold — June YTD 2010 (4)		—		—		—		—		(14,785	)		(14,785	)

Total NOI	$	374,233	$	254,432	$	244,944	$	302,460	$	(14,593	)	$	1,161,476


Total assets	$	5,039,670	$	2,653,018	$	2,857,703	$	2,865,069	$	3,119,650		$	16,535,110


(1)		Same store includes properties owned for all of both 2009 and 2008 which represented 113,598 units.

(2)		Non-same store includes properties acquired after January 1, 2008.

(3)		Other includes ECH, development, condominium conversion overhead of $2.8 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.

(4)		Properties sold — June YTD 2010 reflects discontinued operations for properties sold during the first six months of 2010.

F-43


	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	)
Properties sold — June YTD 2010 (5)		—		—		—		—		(22,234	)		(22,234	)

Total rental income		548,862		369,305		428,818		486,520		(40,876	)		1,792,629

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	)
Properties sold — June YTD 2010 (5)		—		—		—		—		(8,124	)		(8,124	)

Total operating expenses		206,943		133,383		172,867		174,430		46,515			734,138

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	)
Properties sold — June YTD 2010 (5)		—		—		—		—		(14,110	)		(14,110	)

Total NOI	$	341,919	$	235,922	$	255,951	$	312,090	$	(87,391	)	$	1,058,491


(1)		Same store includes properties owned for all of both 2008 and 2007 which represented 115,051 units.

(2)		Non-same store includes properties acquired after January 1, 2007.

(3)		Other includes ECH, development, condominium conversion overhead of $4.8 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.

(5)		Properties sold — June YTD 2010 reflects discontinued operations for properties sold during the first six months of 2010.

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.

The following table presents a reconciliation of NOI from our rental real estate specific to continuing operations for the years ended December 31, 2009, 2008 and 2007, respectively:


	Year Ended December 31,
	2009			2008			2007
	(Amounts in thousands)
Rental income	$	1,910,701		$	1,941,868		$	1,792,629
Property and maintenance expense		(480,840	)		(501,824	)		(466,835	)
Real estate taxes and insurance expense		(213,211	)		(201,505	)		(179,827	)
Property management expense		(71,938	)		(77,063	)		(87,476	)

Total operating expenses		(765,989	)		(780,392	)		(734,138	)

Net operating income	$	1,144,712		$	1,161,476		$	1,058,491

21. Subsequent Events/Other

Subsequent Events

Subsequent to December 31, 2009 and up until the time of this filing, the Company:

Acquired five apartment properties consisting of 1,174 units for $495.6 million;

F-44

Sold four consolidated apartment properties consisting of 1,025 units for $94.9 million (excluding condominium units) and one unconsolidated apartment property consisting of 268 units for $13.4 million (sales price listed is the gross sales price);

Assumed $10.4 million of mortgage debt in conjunction with the acquisition of one property;

Was released from $40.0 million of mortgage debt assumed by the purchaser 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 million under the Company’s ATM share offering program.

Other

During the years ended December 31, 2008 and 2007, the Company recognized $0.7 million and $0.3 million, respectively, of forfeited deposits for various terminated transactions, which are included in interest and other income. In addition, during 2009, 2008 and 2007, the Company received $0.2 million, $1.7 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 years ended December 31, 2009, 2008 and 2007, in addition to the amounts discussed below for its former Chief Financial Officer (“CFO”) and one other former executive vice president, the Company recorded approximately $1.4 million, $4.3 million and $0.5 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.

During the year ended December 31, 2007, the Company entered into resignation/release agreements with its former CFO and one other former executive vice president. The Company recorded approximately $3.4 million of additional general and administrative expense during the year ended December 31, 2007 related to cash severance and accelerated vesting of share options and restricted/performance shares.

The Company recorded a reduction to general and administrative expense of approximately $1.7 million during the year ended December 31, 2007 due to the successful resolution of a certain lawsuit in Florida, resulting in the reversal 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 million during the year ended December 31, 2006 due to the recovery of insurance proceeds related to the same lawsuit.

During the year ended December 31, 2007, the Company received $1.2 million related to its 7.075% ownership interest in Wellsford Park Highlands Corporation (“WPHC”), an entity which owns a condominium development in Denver, Colorado. The Company recorded a gain of approximately $0.7 million as income from investments in unconsolidated entities and has no further ownership interest in WPHC.

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 June 30, 2010. Amounts are in thousands, except for per share amounts.

F-45


	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
2009	3/31		6/30		9/30		12/31
Total revenues (1)	$	482,475	$	480,333	$	480,874	$	477,365
Operating income (1)		132,245		126,944		128,837		133,239
Income (loss) from continuing operations (1)		11,948		12,339		9,051		(13,146	)
Discontinued operations, net (1)		73,473		93,593		134,314		60,457
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


(1)		The amounts presented for 2009 are not equal to the same amounts previously reported in the Form 10-K filed with the SEC on February 25, 2010 as a result of changes in discontinued operations due to additional property sales which occurred throughout the first six months of 2010. Below is a reconciliation to the amounts previously reported in the Form 10-K:


	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
2009	3/31			6/30			9/30			12/31
Total revenues previously reported in 2009 Form 10-K	$	488,238		$	485,954		$	486,532		$	482,987
Total revenues subsequently reclassified to discontinued operations		(5,763	)		(5,621	)		(5,658	)		(5,622	)

Total revenues disclosed in Form 8-K	$	482,475		$	480,333		$	480,874		$	477,365


Operating income previously reported in 2009 Form 10-K	$	134,320		$	129,002		$	130,798		$	135,270
Operating income subsequently reclassified to discontinued operations		(2,075	)		(2,058	)		(1,961	)		(2,031	)

Operating income disclosed in Form 8-K	$	132,245		$	126,944		$	128,837		$	133,239


Income from continuing operations previously reported in 2009 Form 10-K	$	14,023		$	14,397		$	11,012		$	(11,401	)
Income from continuing operations subsequently reclassified to discontinued operations		(2,075	)		(2,058	)		(1,961	)		(1,745	)

Income from continuing operations disclosed in Form 8-K	$	11,948		$	12,339		$	9,051		$	(13,146	)


Discontinued operations, net previously reported in 2009 Form 10-K	$	71,398		$	91,535		$	132,353		$	58,712
Discontinued operations, net from properties sold subsequent to the respective reporting period		2,075			2,058			1,961			1,745

Discontinued operations, net disclosed in Form 8-K	$	73,473		$	93,593		$	134,314		$	60,457


	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
2008	3/31		6/30		9/30		12/31
Total revenues (2)	$	470,343	$	488,052	$	498,958	$	495,230
Operating income (2)		127,462		149,038		143,845		29,144
Income (loss) from continuing operations (2)		6,434		30,125		22,052		(79,936	)
Discontinued operations, net (2)		141,094		109,868		165,073		41,703
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

F-46


(2)		The amounts presented for 2008 are not equal to the same amounts previously reported in the Form 10-K filed with the SEC on February 25, 2010 as a result of changes in discontinued operations due to additional property sales which occurred throughout the first six months of 2010. Below is a reconciliation to the amounts previously reported in the Form 10-K:


	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter
2008	3/31			6/30			9/30			12/31
Total revenues previously reported in 2009 Form 10-K	$	476,035		$	493,778		$	504,737		$	501,119
Total revenues subsequently reclassified to discontinued operations		(5,692	)		(5,726	)		(5,779	)		(5,889	)

Total revenues disclosed in Form 8-K	$	470,343		$	488,052		$	498,958		$	495,230


Operating income previously reported in 2009 Form 10-K	$	129,593		$	151,215		$	145,954		$	31,396
Operating income subsequently reclassified to discontinued operations		(2,131	)		(2,177	)		(2,109	)		(2,252	)

Operating income disclosed in Form 8-K	$	127,462		$	149,038		$	143,845		$	29,144


Income (loss) from continuing operations previously reported in 2009 Form 10-K	$	8,504		$	32,239		$	24,118		$	(77,684	)
Income from continuing operations subsequently reclassified to discontinued operations		(2,070	)		(2,114	)		(2,066	)		(2,252	)

Income (loss) from continuing operations disclosed in Form 8-K	$	6,434		$	30,125		$	22,052		$	(79,936	)


Discontinued operations, net previously reported in 2009 Form 10-K	$	139,024		$	107,754		$	163,007		$	39,451
Discontinued operations, net from properties sold subsequent to the respective reporting period		2,070			2,114			2,066			2,252

Discontinued operations, net disclosed in Form 8-K	$	141,094		$	109,868		$	165,073		$	41,703


*		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. 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-47

EQUITY RESIDENTIAL

Real Estate and Accumulated Depreciation Encumbrances Reconciliation

Schedule III — Real Estate and Accumulated Depreciation
Overall Summary

December 31, 2009


	Properties				Investment in Real		Accumulated			Investment in Real
	(H)		Units (H)		Estate, Gross		Depreciation			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


(1)		See attached Encumbrances Reconciliation.

S-1

EQUITY RESIDENTIAL
Schedule III — Real Estate and Accumulated Depreciation
Encumbrances Reconciliation
December 31, 2009


	Number of
	Properties	See Properties
Portfolio/Entity Encumbrances	Encumbered by	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

S-2

EQUITY RESIDENTIAL
Schedule III — Real Estate and Accumulated Depreciation
(Amounts in thousands)

The changes in total real estate for the years ended December 31, 2009, 2008 and 2007 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

The changes in accumulated depreciation for the years ended December 31, 2009, 2008, and 2007 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

S-3

EQUITY RESIDENTIAL
Schedule III — Real Estate and Accumulated Depreciation
December 31, 2009


									Cost Capitalized
									Subsequent to					Gross Amount Carried
					Initial Cost to				Acquisition					at Close of
Description					Company				(Improvements, net) (E)					Period 12/31/09
		Date of					Building &				Building &					Building &				Accumulated			Investment in Real
Apartment Name	Location	Construction	Units (H)		Land		Fixtures		Land		Fixtures			Land		Fixtures (A)		Total (B)		Depreciation (C)			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		—

S-4

EQUITY RESIDENTIAL
Schedule III — Real Estate and Accumulated Depreciation
December 31, 2009


									Cost Capitalized
									Subsequent to					Gross Amount Carried
					Initial Cost to				Acquisition					at Close of
Description					Company				(Improvements, net) (E)					Period 12/31/09
		Date of					Building &					Building &				Building &				Accumulated			Investment in Real
Apartment Name	Location	Construction	Units (H)			Land	Fixtures		Land			Fixtures			Land	Fixtures (A)		Total (B)		Depreciation (C)			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		—

S-5

EQUITY RESIDENTIAL
Schedule III — Real Estate and Accumulated Depreciation
December 31, 2009


									Cost Capitalized
									Subsequent to				Gross Amount Carried
					Initial Cost to				Acquisition				at Close of
Description					Company				(Improvements, net) (E)				Period 12/31/09
		Date of					Building &				Building &				Building &				Accumulated			Investment in Real
Apartment Name	Location	Construction	Units (H)			Land	Fixtures		Land		Fixtures			Land	Fixtures (A)		Total (B)		Depreciation (C)			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		—

S-6

EQUITY RESIDENTIAL
Schedule III — Real Estate and Accumulated Depreciation
December 31, 2009


									Cost Capitalized
									Subsequent to				Gross Amount Carried
					Initial Cost to				Acquisition				at Close of
Description					Company				(Improvements, net) (E)				Period 12/31/09
		Date of					Building &				Building &				Building &				Accumulated			Investment in Real
Apartment Name	Location	Construction	Units (H)			Land	Fixtures		Land		Fixtures			Land	Fixtures (A)		Total (B)		Depreciation (C)			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

S-7

EQUITY RESIDENTIAL
Schedule III — Real Estate and Accumulated Depreciation
December 31, 2009


										Cost Capitalized
										Subsequent to				Gross Amount Carried
					Initial Cost to					Acquisition				at Close of
Description					Company					(Improvements, net) (E)				Period 12/31/09
		Date of					Building &					Building &				Building &				Accumulated			Investment in Real
Apartment Name	Location	Construction	Units (H)			Land	Fixtures			Land		Fixtures			Land	Fixtures (A)		Total (B)		Depreciation (C)			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

S-8

EQUITY RESIDENTIAL
Schedule III — Real Estate and Accumulated Depreciation
December 31, 2009


									Cost Capitalized
									Subsequent to				Gross Amount Carried
					Initial Cost to				Acquisition				at Close of
Description					Company				(Improvements, net) (E)				Period 12/31/09
		Date of					Building &				Building &				Building &				Accumulated			Investment in Real
Apartment Name	Location	Construction	Units (H)			Land	Fixtures		Land		Fixtures			Land	Fixtures (A)		Total (B)		Depreciation (C)			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

S-9

EQUITY RESIDENTIAL
Schedule III — Real Estate and Accumulated Depreciation
December 31, 2009


									Cost Capitalized
									Subsequent to					Gross Amount Carried
					Initial Cost to				Acquisition					at Close of
Description					Company				(Improvements, net) (E)					Period 12/31/09
		Date of					Building &				Building &					Building &				Accumulated			Investment in Real
Apartment Name	Location	Construction	Units (H)			Land	Fixtures		Land		Fixtures				Land	Fixtures (A)		Total (B)		Depreciation (C)			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


(1)		See attached Encumbrances Reconciliation

S-10

EQUITY RESIDENTIAL
Schedule III — Real Estate and Accumulated Depreciation
December 31, 2009

NOTES:

(A)		The balance of furniture & fixtures included in the total investment in real estate amount was $1,111,978,037 as of December 31, 2009.

(B)		The cost, net of accumulated depreciation, for Federal Income Tax purposes as of December 31, 2009 was approximately $10.4 billion.

(C)		The life to compute depreciation for building is 30 years, for building improvements ranges from 5 to 10 years, for furniture & fixtures and replacements is 5 years, and for in-place leases is the average remaining term of each respective lease.

(D)		This asset consists of various acquisition dates and largely represents furniture, fixtures and equipment, leasehold improvements and capitalized software costs owned by the Management Business, which are generally depreciated over periods ranging from 3 to 7 years.

(E)		Primarily represents capital expenditures for major maintenance and replacements incurred subsequent to each property’s acquisition date.

(F)		Represents land and/or construction-in-progress on projects either held for future development or projects currently under development.

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

(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 two properties and 4,595 units.

(I)		through (L) See Encumbrances Reconciliation schedule.

S-11

Equity Residential (EQR) 8-K2009 FY Other Events