Equity Residential (EQR) 10-Q 6 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010	Apr. 30, 2010
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31
Trading Symbol	EQR
Entity Registrant Name	EQUITY RESIDENTIAL
Entity Central Index Key	0000906107
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		282,941,881

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands	3 Months Ended Mar. 31, 2010	12 Months Ended Dec. 31, 2009
Investment in real estate
Land	$3,948,967	$3,650,324
Depreciable property	14,387,262	13,893,521
Projects under development	429,444	668,979
Land held for development	266,287	252,320
Investment in real estate	19,031,960	18,465,144
Accumulated depreciation	(3,972,022)	(3,877,564)
Investment in real estate, net	15,059,938	14,587,580
Cash and cash equivalents	60,186	193,288
Investments in unconsolidated entities	5,645	6,995
Deposits - restricted	163,378	352,008
Escrow deposits - mortgage	20,675	17,292
Deferred financing costs, net	44,034	46,396
Other assets	164,557	213,956
Total assets	15,518,413	15,417,515
Liabilities:
Mortgage notes payable	4,825,356	4,783,446
Notes, net	4,578,377	4,609,124
Lines of credit	91,000
Accounts payable and accrued expenses	95,046	58,537
Accrued interest payable	68,895	101,849
Other liabilities	251,970	272,236
Security deposits	62,637	59,264
Distributions payable	102,106	100,266
Total liabilities	10,075,387	9,984,722
Commitments and contingencies
Redeemable Noncontrolling Interests - Operating Partnership	295,985	258,280
Shareholders' equity:
Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized; 1,950,425 shares issued and outstanding as of March 31, 2010 and 1,950,925 shares issued and outstanding as of December 31, 2009	208,761	208,773
Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 282,404,498 shares issued and outstanding as of March 31, 2010 and 279,959,048 shares issued and outstanding as of December 31, 2009	2,824	2,800
Paid in capital	4,508,322	4,477,426
Retained earnings	310,276	353,659
Accumulated other comprehensive (loss) income	(8,255)	4,681
Total shareholders' equity	5,021,928	5,047,339
Noncontrolling Interests:
Operating Partnership	114,714	116,120
Partially Owned Properties	10,399	11,054
Total Noncontrolling Interests	125,113	127,174
Total equity	5,147,041	5,174,513
Total liabilities and equity	$15,518,413	$15,417,515

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
	Mar. 31, 2010	Dec. 31, 2009
Consolidated Balance Sheets (Parenthetical)
Preferred Shares of beneficial interest, par value	0.01	0.01
Preferred Shares of beneficial interest, shares authorized	100,000,000	100,000,000
Preferred Shares of beneficial interest, shares issued	1,950,425	1,950,925
Preferred Shares of beneficial interest, shares outstanding	1,950,425	1,950,925
Common Shares of beneficial interest, par value	0.01	0.01
Common Shares of beneficial interest, shares authorized	1,000,000,000	1,000,000,000
Common Shares of beneficial interest, shares issued	282,404,498	279,959,048
Common Shares of beneficial interest, shares outstanding	282,404,498	279,959,048

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
REVENUES
Rental income	$486,268	$480,215
Fee and asset management	2,422	2,863
Total revenues	488,690	483,078
EXPENSES
Property and maintenance	126,753	124,932
Real estate taxes and insurance	57,607	52,539
Property management	20,680	19,014
Fee and asset management	2,014	2,003
Depreciation	152,319	141,809
General and administrative	10,721	10,394
Total expenses	370,094	350,691
Operating income	118,596	132,387
Interest and other income	2,225	6,017
Other expenses	(4,383)	(292)
Interest:
Expense incurred, net	(115,297)	(123,502)
Amortization of deferred financing costs	(3,197)	(2,962)
(Loss) Income before income and other taxes, (loss) from investments in unconsolidated entities, net gain on sales of unconsolidated entities and discontinued operations	(2,056)	11,648
Income and other tax (expense) benefit	(166)	(2,128)
(Loss) from investments in unconsolidated entities	(464)	(195)
Net gain on sales of unconsolidated entities	478	2,765
(Loss) income from continuing operations	(2,208)	12,090
Discontinued operations, net	60,064	73,331
Net income	57,856	85,421
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership	(2,623)	(4,691)
Preference Interests and Units		(4)
Partially Owned Properties	250	69
Net income attributable to controlling interests	55,483	80,795
Preferred distributions	(3,620)	(3,620)
Net income available to Common Shares	$51,863	$77,175
Earnings per share - basic:
(Loss) income from continuing operations available to Common Shares	-0.02	0.03
Net income available to Common Shares	0.18	0.28
Weighted average Common Shares outstanding	280,645	272,324
Earnings per share - diluted:
(Loss) income from continuing operations available to Common Shares	-0.02	0.03
Net income available to Common Shares	0.18	0.28
Weighted average Common Shares outstanding	280,645	288,853
Distributions declared per Common Share outstanding	0.3375	0.4825

1_CONSOLIDATED STATEMENTS OF OP

CONSOLIDATED STATEMENTS OF OPERATIONS (Continued) (USD $)
In Thousands	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Comprehensive income:
Net income	$57,856	$85,421
Other comprehensive (loss) income - derivative instruments:
Unrealized holding (losses) gains arising during the period	(13,503)	2,660
Losses reclassified into earnings from other comprehensive income	726	1,493
Other		449
Other comprehensive (loss) income - other instruments:
Unrealized holding (losses) gains arising during the period	(159)	1,908
Comprehensive income	44,920	91,931
Comprehensive (income) attributable to Noncontrolling Interests	(2,373)	(4,626)
Comprehensive income attributable to controlling interests	$42,547	$87,305

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$57,856	$85,421
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	152,734	150,488
Amortization of deferred financing costs	3,197	2,997
Amortization of discounts on investment securities		(1,096)
Amortization of discounts and premiums on debt	565	1,706
Amortization of deferred settlements on derivative instruments	593	1,148
Write-off of pursuit costs	1,046	192
Property acquisition costs	3,337	100
Loss from investments in unconsolidated entities	464	195
Distributions from unconsolidated entities - return on capital	61	59
Net (gain) on sales of unconsolidated entities	(478)	(2,765)
Net (gain) on sales of discontinued operations	(60,036)	(61,871)
(Gain) on debt extinguishments		(1,985)
Unrealized loss on derivative instruments	1
Compensation paid with Company Common Shares	5,757	4,920
Changes in assets and liabilities:
(Increase) decrease in deposits - restricted	(1,000)	1,039
Decrease in other assets	1,798	6,763
Increase in accounts payable and accrued expenses	39,148	19,026
(Decrease) in accrued interest payable	(32,954)	(38,578)
(Decrease) in other liabilities	(20,005)	(24,437)
Increase (decrease) in security deposits	3,373	(871)
Net cash provided by operating activities	155,457	142,451
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate - acquisitions	(498,272)
Investment in real estate - development/other	(31,347)	(82,171)
Improvements to real estate	(25,691)	(26,644)
Additions to non-real estate property	(353)	(712)
Interest capitalized for real estate under development	(4,365)	(10,617)
Proceeds from disposition of real estate, net	105,071	133,154
Distributions from unconsolidated entities - return of capital	1,303	110
Purchase of investment securities		(52,822)
Proceeds from sale of investment securities		15,000
Property acquisition costs	(3,337)	(100)
Decrease (increase) in deposits on real estate acquisitions, net	182,203	(43,020)
(Increase) decrease in mortgage deposits	(3,383)	246
Acquisition of Noncontrolling Interests - Partially Owned Properties		(2,823)
Net cash (used for) investing activities	(278,171)	(70,399)
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan and bond acquisition costs	(1,435)	(6,096)
Mortgage notes payable:
Proceeds	55,664	57,713
Restricted cash	7,427	7,177
Lump sum payoffs	(149,409)	(141,132)
Scheduled principal repayments	(4,059)	(5,111)
(Loss) on debt extinguishments		(35)
Notes, net:
Lump sum payoffs		(307,820)
Gain on debt extinguishments		2,020
Lines of credit:
Proceeds	1,469,125
Repayments	(1,378,125)
Proceeds from settlement of derivative instruments		449
Proceeds from sale of Common Shares	73,356
Proceeds from Employee Share Purchase Plan (ESPP)	2,478	2,787
Proceeds from exercise of options	19,215	105
Common Shares repurchased and retired	(1,887)	(1,124)
Payment of offering costs	(604)	(121)
Contributions - Noncontrolling Interests - Partially Owned Properties	222	522
Contributions - Noncontrolling Interests - Operating Partnership		78
Distributions:
Common Shares	(93,317)	(131,567)
Preferred Shares	(3,620)	(3,620)
Preference Interests and Units		(4)
Noncontrolling Interests - Operating Partnership	(4,794)	(8,000)
Noncontrolling Interests - Partially Owned Properties	(625)	(471)
Net cash (used for) financing activities	(10,388)	(534,250)
Net (decrease) in cash and cash equivalents	(133,102)	(462,198)
Cash and cash equivalents, beginning of period	193,288	890,794
Cash and cash equivalents, end of period	60,186	428,596
SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized	144,902	159,656
Net cash (received) paid for income and other taxes	(1,850)	564
Real estate acquisitions/dispositions/other:
Mortgage loans assumed	145,660
Valuation of OP Units	7,383
Mortgage loans (assumed) by purchaser	(39,999)	(4,387)
Amortization of deferred financing costs:
Investment in real estate, net	(600)	(1,011)
Deferred financing costs, net	3,797	4,008
Amortization of discounts and premiums on debt:
Investment in real estate, net		(4)
Mortgage notes payable	(1,563)	(1,550)
Notes, net	2,128	3,260
Amortization of deferred settlements on derivative instruments:
Other liabilities	(133)	(345)
Accumulated other comprehensive loss	726	1,493
Unrealized loss (gain) on derivative instruments:
Other assets	7,579	(379)
Mortgage notes payable	16	(1,186)
Notes, net	2,725	(645)
Other liabilities	3,184	(450)
Accumulated other comprehensive (loss) income	(13,503)	2,660
Proceeds from settlement of derivative instruments:
Other assets		449
Other
Receivable on sale of Common Shares	37,550
Transfer from notes, net to mortgage notes payable	$35,600

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (USD $)
In Thousands	PREFERRED SHARES	COMMON SHARES, $0.01 PAR VALUE	PAID IN CAPITAL	RETAINED EARNINGS	ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME	OPERATING PARTNERSHIP	PARTIALLY OWNED PROPERTIES	Total
Balance, beginning of year at Dec. 31, 2009	$208,773	$2,800	$4,477,426	$353,659	$4,681	$116,120	$11,054	$5,174,513
Common Share Issuance:
Conversion of Preferred Shares into Common Shares			12					12
Issuance of OP Units to Noncontrolling Interests						7,383		7,383
Accumulated other comprehensive (loss) - derivative instruments
Unrealized holding (losses) arising during the period					(13,503)			(13,503)
Losses reclassified into earnings from other comprehensive income					726			726
Accumulated other comprehensive (loss) - other instruments:
Unrealized holding (losses) arising during the period					(159)			(159)
Conversion of 7.00% Series E Cumulative Convertible	(12)							(12)
Conversion of OP Units into Common Shares		4	8,003					8,007
Conversion of OP Units held by Noncontrolling Interests into OP Units held by General Partner						(8,007)		(8,007)
Issuance of Common Shares		10	35,796					35,806
Equity compensation associated with Noncontrolling Interests						788		788
Exercise of share options		7	19,208					19,215
Net income attributable to controlling interests				55,483				55,483
Net income (loss) attributable to Noncontrolling Interests						2,623	(250)	2,373
Employee Share Purchase Plan (ESPP)		1	2,477					2,478
Contributions by Noncontrolling Interests							222	222
Common Share distributions				(95,246)				(95,246)
Share-based employee compensation expense:
Restricted shares		2	2,645					2,647
Share options			2,205					2,205
ESPP discount			687					687
Distributions to Noncontrolling Interests						(4,704)	(625)	(5,329)
Preferred Share distributions				(3,620)				(3,620)
Common Shares repurchased and retired			(1,887)					(1,887)
Change in carrying value of Redeemable Noncontrolling Interests - Operating Partnership						2,280		2,280
Other							(2)	(2)
Offering costs			(604)					(604)
Supplemental Executive Retirement Plan (SERP)			570					570
Change in market value of Redeemable Noncontrolling Interests - Operating Partnership			(39,985)					(39,985)
Adjustment for Noncontrolling Interests ownership in Operating Partnership			1,769			(1,769)
Balance, end of period at Mar. 31, 2010	$208,761	$2,824	$4,508,322	$310,276	($8,255)	$114,714	$10,399	$5,147,041

Business

Business
	3 Months Ended Mar. 31, 2010
Business	1. Business Equity Residential ("EQR"), a Maryland real estate investment trust ("REIT") formed in March 1993, is an SP 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. EQR is the general partner of, and as of March 31, 2010 owned an approximate 95.3% 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. As of March 31, 2010, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 491 properties located in 23 states and the District of Columbia consisting of 136,470 units. The ownership breakdown includes (table does not include various uncompleted development properties): Properties Units Wholly Owned Properties 430 118,732 Partially Owned Properties: Consolidated 27 5,530 Unconsolidated 32 7,602 Military Housing 2 4,606 491 136,470

Summary of Significant Accounti

Summary of Significant Accounting Policies
	3 Months Ended Mar. 31, 2010
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X promulgated under the Securities Act of 1933, as amended. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and certain reclassifications considered necessary for a fair presentation have been included. Certain reclassifications have been made to the prior period financial statements in order to conform to the current year presentation. Operating results for the quarter ended March 31, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010. 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. The balance sheet at December 31, 2009 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, including definitions of capitalized terms not defined herein, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 2009. 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. 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 changes in tax rates on deferred tax assets and liabilitie

Equity and Redeemable Noncontro

Equity and Redeemable Noncontrolling Interests
	3 Months Ended Mar. 31, 2010
Equity and Redeemable Noncontrolling Interests	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 quarter ended March 31, 2010: 2010 Common Shares Common Shares outstanding at January1, 279,959,048 Common Shares Issued: Conversion of Series E Preferred Shares 556 Conversion of OP Units 409,850 Issuance of Common Shares 1,057,304 Exercise of share options 717,482 Employee Share Purchase Plan (ESPP) 87,680 Restricted share grants, net 230,708 Common Shares Other: Repurchased and retired (58,130 ) Common Shares outstanding at March31, 282,404,498 Units Units outstanding at January1, 14,197,969 Issuance of LTIP Units 94,096 OP Units issued through acquisitions 188,571 Conversion of OP Units to Common Shares (409,850 ) Units outstanding at March31, 14,070,786 Total Common Shares and Units outstanding at March31, 296,475,284 Units Ownership Interest in Operating Partnership 4.7 % In September 2009, the Company announced the establishment of an At-The-Market ("ATM") share offering program which would allow the Company to sell up to 17.0 million Common Shares from time to time over the next three years into the existing trading market at current market prices as well as through negotiated transactions. During the quarter ended March 31, 2010, the Company issued approximately 1.1 million Common Shares at an average price of $33.87 per share for total consideration of approximately $35.8 million through the ATM program. EQR has authorization to issue an additional 12.4 million of its shares as of March 31, 2010. On March 31, 2010, the Operating Partnership issued 188,571 OP Units at a price of $39.15 per OP Unit for total valuation of $7.4 million as partial consideration for the acquisition of one rental property. As the value of the OP Units issued was agreed by contract to be $35.00 per OP Unit, the difference between the contracted value and fair value (the closing price of Common Shares on the closing date) was recorded as an increase to the purchase price. During the quarter ended March 31, 2010, the Company repurchased 58,130 of its Common Shares at an average price of $32.46 per share for total consideration of $1.9 million. These shares were retired subsequent to the repurchases. All of the shares repurchased during the quarter ended March 31, 2010 were repurchased from employees at the then current market prices to cover the minimum statutory tax withholding obligations related to the vesting of employees' restricted shares. EQR has authorization to repurchase an additional $464.6 million of its shares as of March 31, 2010. 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". Subjec

Real Estate

Real Estate
	3 Months Ended Mar. 31, 2010
Real Estate	4. Real Estate The following table summarizes the carrying amounts for the Company's investment in real estate (at cost) as of March 31, 2010 and December 31, 2009 (amounts in thousands): March31, December31, 2010 2009 Land $ 3,948,967 $ 3,650,324 Depreciable property: Buildings and improvements 13,245,764 12,781,543 Furniture, fixtures and equipment 1,141,498 1,111,978 Projects under development: Land 78,545 106,716 Construction-in-progress 350,899 562,263 Land held for development: Land 193,201 181,430 Construction-in-progress 73,086 70,890 Investment in real estate 19,031,960 18,465,144 Accumulated depreciation (3,972,022 ) (3,877,564 ) Investment in real estate, net $ 15,059,938 $ 14,587,580 During the quarter ended March 31, 2010, the Company acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands): Properties Units PurchasePrice Rental Properties 6 1,467 $ 639,261 Land Parcel (one) - - 12,000 Total 6 1,467 $ 651,261 During the quarter ended March 31, 2010, the Company disposed of the following to unaffiliated parties (sales price in thousands): Properties Units SalesPrice Rental Properties: Consolidated 8 2,011 $ 145,940 Unconsolidated (1) 2 484 24,100 Condominium Conversion Properties 1 2 360 Total 11 2,497 $ 170,400 (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 $60.0 million and a net gain on sales of unconsolidated entities of approximately $0.5 million on the above sales.

Commitments to Acquire/Dispose

Commitments to Acquire/Dispose of Real Estate
	3 Months Ended Mar. 31, 2010
Commitments to Acquire/Dispose of Real Estate	5. Commitments to Acquire/Dispose of Real Estate In addition to the properties that were subsequently acquired as discussed in Note 16, the Company had entered into separate agreements to acquire one rental property consisting of 183 units for $43.5 million and one land parcel for $13.5 million. The Company had entered into separate agreements to dispose of 14 properties consisting of 1,282 units for $133.0 million. 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.

Investments in Partially Owned

Investments in Partially Owned Entities
	3 Months Ended Mar. 31, 2010
Investments in Partially Owned Entities	6. Investments in Partially Owned Entities The Company has co-invested in various properties with unrelated third parties which are either consolidated or accounted for under the equity method of accounting (unconsolidated). The following table summarizes the Company's investments in partially owned entities as of March 31, 2010 (amounts in thousands except for project and unit amounts): Consolidated Unconsolidated Development Projects (VIEs) Other Total InstitutionalJointVentures (5) Held forand/orUnderDevelopment Completed,NotStabilized(4) CompletedandStabilized Total projects (1) - 2 4 21 27 32 Total units (1) - 567 1,167 3,796 5,530 7,602 Balance sheet information at 3/31/10 (at 100%): ASSETS Investment in real estate $ 556,375 $ 171,931 $ 318,036 $ 423,521 $ 1,469,863 $ 553,306 Accumulated depreciation (740 ) (1,745 ) (16,912 ) (115,882 ) (135,279 ) (175,403 ) Investment in real estate, net 555,635 170,186 301,124 307,639 1,334,584 377,903 Cash and cash equivalents 2,616 3,068 4,135 12,998 22,817 10,832 Deposits restricted 41,293 2,826 382 9 44,510 42,666 Escrow deposits mortgage - - 42 3,583 3,625 - Deferred financing costs, net 6,530 233 965 296 8,024 375 Other assets 95 13 282 85 475 2,821 Total assets $ 606,169 $ 176,326 $ 306,930 $ 324,610 $ 1,414,035 $ 434,597 LIABILITIES AND EQUITY Mortgage notes payable $ 316,421 $ 106,162 $ 226,523 $ 301,778 $ 950,884 $ 389,277 Accounts payable accrued expenses 15,673 2,698 2,697 2,572 23,640 2,707 Accrued interest payable 2,411 158 252 1,677 4,498 2,424 Other liabilities 5,991 231 1,263 849 8,334 2,074 Security deposits 402 659 321 1,635 3,017 2,077 Total liabilities 340,898 109,908 231,056 308,511 990,373 398,559 Noncontrolling Interests Partially Owned Properties 8,944 1,076 3,878 (3,499 ) 10,399 - Accumulated other comprehensive (loss) (3,429 ) - - - (3,429 ) - Partner's equity - - - - - 27,029 EQR equity 259,756 65,342 71,996 19,598 416,

Deposits - Restricted

Deposits - Restricted
	3 Months Ended Mar. 31, 2010
Deposits - Restricted	7. Deposits Restricted The following table presents the Company's restricted deposits as of March 31, 2010 and December 31, 2009 (amounts in thousands): March31,2010 December31,2009 Taxdeferred (1031)exchange proceeds $ 51,549 $ 244,257 Earnest money on pending acquisitions 16,505 6,000 Restricted deposits on debt (1) 42,138 49,565 Resident security and utility deposits 41,660 39,361 Other 11,526 12,825 Totals $ 163,378 $ 352,008 (1) Primarily represents amounts held in escrow by the lender and released as draw requests are made on fully funded development mortgage loans.

Mortgage Notes Payable

Mortgage Notes Payable
	3 Months Ended Mar. 31, 2010
Mortgage Notes Payable	8. Mortgage Notes Payable As of March 31, 2010, the Company had outstanding mortgage debt of approximately $4.8 billion. During the quarter ended March 31, 2010, the Company: * Repaid $153.5 million of mortgage loans; * Obtained $55.7 million of new mortgage loan proceeds; * Assumed $145.7 million of mortgage debt on two acquired properties; and * Was released from $40.0 million of mortgage debt assumed by the purchaser on two disposed properties. The Company recorded approximately $900,000 and $700,000 of write-offs of unamortized deferred financing costs during the quarters ended March 31, 2010 and 2009, respectively, as additional interest related to debt extinguishment of mortgages. As of March 31, 2010, scheduled maturities for the Company's outstanding mortgage indebtedness were at various dates through September 1, 2048. At March 31, 2010, the interest rate range on the Company's mortgage debt was 0.17% to 12.465%. During the quarter ended March 31, 2010, the weighted average interest rate on the Company's mortgage debt was 4.84%.

Notes

Notes
	3 Months Ended Mar. 31, 2010
Notes	9. Notes As of March 31, 2010, the Company had outstanding unsecured notes of approximately $4.6 billion. As of March 31, 2010, scheduled maturities for the Company's outstanding notes were at various dates through 2026. At March 31, 2010, the interest rate range on the Company's notes was 0.54% to 7.57%. During the quarter ended March 31, 2010, the weighted average interest rate on the Company's notes was 5.09%.

Lines of Credit

Lines of Credit
	3 Months Ended Mar. 31, 2010
Lines of Credit	10. Lines of Credit The Operating Partnership has a $1.425 billion (net of $75.0 million which had been committed by a now bankrupt financial institution and is not available for borrowing) 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. As of March 31, 2010, the amount available on the credit facility was $1.28 billion (net of $58.2 million which was restricted/dedicated to support letters of credit, net of $91.0 million outstanding and net of the $75.0 million discussed above). During the quarter ended March 31, 2010, the weighted average interest rate was 0.59%.

Derivative and Other Fair Value

Derivative and Other Fair Value Instruments
	3 Months Ended Mar. 31, 2010
Derivative and Other Fair Value Instruments	11. Derivative and Other Fair Value Instruments The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, where possible, bases the fair values of its financial instruments, including its derivative instruments, on listed market prices and third party quotes. Where these are not available, the Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments. The carrying values of the Company's mortgage notes payable and unsecured notes (including its line of credit) were approximately $4.8 billion and $4.7 billion, respectively, at March 31, 2010. The fair values of the Company's mortgage notes payable and unsecured notes (including its line of credit) were approximately $4.7 billion and $4.9 billion, respectively, at March 31, 2010. The fair values of the Company's financial instruments (other than mortgage notes payable, unsecured notes, lines of credit, derivative instruments and investment securities) including cash and cash equivalents and other financial instruments, approximate their carrying or contract values. In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company seeks to 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 following table summarizes the Company's consolidated derivative instruments at March 31, 2010 (dollar amounts are in thousands): FairValueHedges(1) ForwardStartingSwaps(2) DevelopmentCash FlowHedges (3) Current Notional Balance $ 315,693 $ 900,000 $ 69,660 Lowest Possible Notional $ 315,693 $ 900,000 $ 3,020 Highest Possible Notional $ 317,694 $ 900,000 $ 91,343 Lowest Interest Rate 2.009% 4.005% 4.059% Highest Interest Rate 4.800% 4.695% 4.059% Earliest Maturity Date 2012 2020 2011 Latest Maturity Date 2013 2023 2011 (1) Fair Value Hedges Converts outstanding fixed rate debt to a floating interest rate. (2) Forward Starting Swaps Designed to partially fix the interest rate in advance of a planned future debt issuance. These swaps have mandatory counterparty terminations from 2011 through 2014. (3) Development Cash Flow Hedges Converts 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 March 31, 2010 and December 31, 2009, respectively (amounts in thousands): Asset Derivatives Liability Derivatives March31, 2010 BalanceSheetLocation FairValue BalanceSheetLocation FairValue Derivatives designated as hedging instruments: Interest Rate Contracts: Fair Value Hedges Otherassets $ 7,928 Otherliabilities $ - Forward Starting Swaps Othe

Earnings Per Share

Earnings Per Share
	3 Months Ended Mar. 31, 2010
Earnings Per Share	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): QuarterEndedMarch31, 2010 2009 Numerator for net income per share basic: (Loss) income from continuing operations $ (2,208 ) $ 12,090 Allocation to Noncontrolling Interests Operating Partnership, net 266 (489 ) Net loss attributable to Noncontrolling Interests Partially Owned Properties 250 69 Net income attributable to Preference Interests and Units - (4 ) Preferred distributions (3,620 ) (3,620 ) (Loss) income from continuing operations available to Common Shares, net of Noncontrolling Interests (5,312 ) 8,046 Discontinued operations, net of Noncontrolling Interests 57,175 69,129 Numerator for net income per share basic $ 51,863 $ 77,175 Numerator for net income per share diluted: Income from continuing operations $ 12,090 Net loss attributable to Noncontrolling Interests Partially Owned Properties 69 Net income attributable to Preference Interests and Units (4 ) Preferred distributions (3,620 ) Income from continuing operations available to Common Shares 8,535 Discontinued operations, net 73,331 Numerator for net income per share diluted $ 51,863 $ 81,866 Denominator for net income per share basic and diluted: Denominator for net income per share basic 280,645 272,324 Effect of dilutive securities: OP Units 16,386 Long-term compensation award shares/units 143 Denominator for net income per share diluted 280,645 288,853 Net income per share basic $ 0.18 $ 0.28 Net income per share diluted $ 0.18 $ 0.28 Net income per share basic: (Loss) income from continuing operations available to Common Shares, net of Noncontrolling Interests $ (0.019 ) $ 0.029 Discontinued operations, net of Noncontrolling Interests 0.204 0.254 Net income per share basic $ 0.185 $ 0.283 Net income per share diluted: (Loss) income from continuing operations available to Common Shares $ (0.019 ) $ 0.029 Discontinued operations, net 0.204 0.254 Net income per share diluted $ 0.185 $ 0.283 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 quarter ended March 31, 2010.

Discontinued Operations

Discontinued Operations
	3 Months Ended Mar. 31, 2010
Discontinued Operations	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 condominium conversion properties effective upon their respective transfer into a TRS and all properties held for sale, if any. The components of discontinued operations are outlined below and include the results of operations for the respective periods that the Company owned such assets during the quarters ended March 31, 2010 and 2009 (amounts in thousands). QuarterEndedMarch31, 2010 2009 REVENUES Rental income $ 2,278 $ 36,011 Total revenues 2,278 36,011 EXPENSES (1) Property and maintenance 1,281 11,407 Real estate taxes and insurance 501 3,953 Depreciation 415 8,679 General and administrative 3 5 Total expenses 2,200 24,044 Discontinued operating income 78 11,967 Interest and other income 1 7 Interest (2): Expense incurred, net (22 ) (430 ) Amortization of deferred financing costs - (35 ) Income and other tax (expense) benefit (29 ) (49 ) Discontinued operations 28 11,460 Net gain on sales of discontinued operations 60,036 61,871 Discontinued operations, net $ 60,064 $ 73,331 (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 the quarter ended March 31, 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. The net real estate basis of the Company's condominium conversion properties owned by the TRS and included in discontinued operations (excludes the Company's halted conversions as they are now held for use), which were included in investment in real estate, net in the consolidated balance sheets, was $0.3 million and $0.8 million at March 31, 2010 and December 31, 2009, respectively.

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Mar. 31, 2010
Commitments and Contingencies	14. Commitments and Contingencies The Company, as an owner of real estate, is subject to various Federal, state and local environmental laws. Compliance by the Company with existing laws has not had a material adverse effect on the Company. However, the Company cannot predict the impact of new or changed laws or regulations on its current properties or on properties that it may acquire in the future. The Company is party to a housing discrimination lawsuit brought by a non-profit civil rights organization in April 2006 in the U.S. District Court for the District of Maryland. The suit alleges that the Company designed and built approximately 300 of its properties in violation of the accessibility requirements of the Fair Housing Act and Americans With Disabilities Act. The suit seeks actual and punitive damages, injunctive relief (including modification of non-compliant properties), costs and attorneys' fees. The Company believes it has a number of viable defenses, including that a majority of the named properties were completed before the operative dates of the statutes in question and/or were not designed or built by the Company. Accordingly, the Company is defending the suit vigorously. Due to the pendency of the Company's defenses and the uncertainty of many other critical factual and legal issues, it is not possible to determine or predict the outcome of the suit and as a result, no amounts have been accrued at March 31, 2010. 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 quarter ended March 31, 2010, the Company recorded additional reserves of approximately $0.7 million, paid approximately $0.7 million in claims and legal fees and released approximately $0.2 million of remaining reserves for settled claims. As a result, the Company had total reserves of approximately $6.5 million at March 31, 2010. 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 March 31, 2010, the Company has three projects totaling 1,220 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-s

Reportable Segments

Reportable Segments
	3 Months Ended Mar. 31, 2010
Reportable Segments	15. 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 quarters ended March 31, 2010 and 2009, respectively. The primary financial measure for the Company's rental real estate segment is net operating income ("NOI"), which represents rental income less: 1) property and maintenance expense; 2) real estate taxes and insurance expense; and 3) property management expense (all as reflected in the accompanying consolidated statements of operations). 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 quarters ended March 31, 2010 and 2009, respectively, as well as total assets for the quarter ended March 31, 2010 (amounts in thousands): Quarter Ended March31, 2010 Northeast Northwest Southeast Southwest Other(3) Total Rental income: Same store (1) $ 147,207 $ 91,612 $ 97,523 $ 107,355 $ - $ 443,697 Non-same store/other (2)(3) 16,630 1,446 1,111 3,859 19,525 42,571 Total rental income 163,837 93,058 98,634 111,214 19,525 486,268 Operating expenses: Same store (1) 60,074 35,206 42,370 39,197 - 176,847 Non-same store/other (2)(3) 7,045 753 454 1,826

Subsequent Events/Other

Subsequent Events/Other
	3 Months Ended Mar. 31, 2010
Subsequent Events/Other	16. Subsequent Events/Other Subsequent Events Subsequent to March 31, 2010, the Company: * Acquired its joint venture partner's interest in one development property for $0.1 million; * Acquired one apartment property consisting of 559 units for $166.8 million; * Exercised the first of its two one-year extension options related to the Company's $500.0 million term loan facility, which originally matured on October5, 2010 but now matures on October5, 2011 and has one remaining one-year extension option exercisable by the Company; * Repaid $102.2 million in mortgage loans on various properties; and * Acquired the 75% equity interest it did not previously own in seven of the unconsolidated properties containing 1,811 units in exchange for an approximate $30.0 million payment to its partner. In addition, the Company repaid the $112.6 million mortgage loan, which was to mature on May1, 2010, concurrent with closing using $70.0 million drawn from the Company's line of credit and $42.6 million in proceeds held by the lender from four property sales in 2009. Other During the quarters ended March 31, 2010 and 2009, the Company incurred charges of $4.4 million and $0.3 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 ($1.0 million and $0.2 million, respectively) and related to property acquisition costs, such as survey, title and legal fees, on the acquisition of operating properties ($3.4 million and $0.1 million, respectively). These costs are included in other expenses in the accompanying consolidated statements of operations. During the quarters ended March 31, 2010 and 2009, the Company received $2.0 million and $0.2 million, respectively, for the settlement of insurance/litigation claims, which are included in interest and other income in the accompanying consolidated statements of operations.