Item 16. Form 10-K Summary.

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Item 16. Form 10-K Summary.

None.

EXHIBIT INDEX

The exhibits listed below are filed as part of this report. References to exhibits or other filings under the caption “Location” indicate that the exhibit or other filing has been filed, that the indexed exhibit and the exhibit referred to are the same and that the exhibit referred to is incorporated by reference. The Commission file numbers for our Exchange Act filings referenced below are 1-12252 (Equity Residential) and 0-24920 (ERP Operating Limited Partnership).

ExhibitDescriptionLocation
3.1Articles of Restatement of Declaration of Trust of Equity Residential dated December 9, 2004.Included as Exhibit 3.1 to Equity Residential’s Form 10-K for the year ended December 31, 2004.
3.2Eighth Amended and Restated Bylaws of Equity Residential, effective as of October 1, 2015.Included as Exhibit 3.1 to Equity Residential's Form 8-K dated and filed on October 1, 2015.
3.3First Amendment to Eighth Amended and Restated Bylaws of Equity Residential, dated November 20, 2017.Included as Exhibit 3.1 to Equity Residential's Form 8-K dated and filed on November 20, 2017.
3.4Sixth Amended and Restated Agreement of Limited Partnership for ERP Operating Limited Partnership dated as of March 12, 2009.Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated March 12, 2009, filed on March 18, 2009.
4.1Indenture, dated October 1, 1994, between the Operating Partnership and The Bank of New York Mellon Trust Company, N.A., as successor trustee (“Indenture”).Included as Exhibit 4(a) to ERP Operating Limited Partnership’s Form S-3 filed on October 7, 1994. **
4.2First Supplemental Indenture to Indenture, dated as of September 9, 2004.Included as Exhibit 4.2 to ERP Operating Limited Partnership’s Form 8-K, filed on September 10, 2004.
4.3Second Supplemental Indenture to Indenture, dated as of August 23, 2006.Included as Exhibit 4.1 to ERP Operating Limited Partnership’s Form 8-K dated August 16, 2006, filed on August 23, 2006.
4.4Third Supplemental Indenture to Indenture, dated as of June 4, 2007.Included as Exhibit 4.1 to ERP Operating Limited Partnership’s Form 8-K dated May 30, 2007, filed on June 1, 2007.
4.5Fourth Supplemental Indenture to Indenture, dated as of December 12, 2011.Included as Exhibit 4.2 to ERP Operating Limited Partnership's Form 8-K dated December 7, 2011, filed on December 9, 2011.
4.6Fifth Supplemental Indenture to Indenture, dated as of February 1, 2016.Included as Exhibit 4.6 to Equity Residential's and ERP Operating Limited Partnership's Form 10-K for the year ended December 31, 2015.
4.7Form of 2.375% Note due July 1, 2019.Included as Exhibit 4.1 to ERP Operating Limited Partnership's Form 8-K dated June 16, 2014, filed on June 18, 2014.
4.8Form of 4.75% Note due July 15, 2020.Included as Exhibit 4.1 to ERP Operating Limited Partnership’s Form 8-K dated July 12, 2010, filed on July 15, 2010.
4.9Form of 4.625% Note due December 15, 2021.Included as Exhibit 4.1 to ERP Operating Limited Partnership's Form 8-K dated December 7, 2011, filed on December 9, 2011.
4.10Form of 3.00% Note due April 15, 2023.Included as Exhibit 4.1 to ERP Operating Limited Partnership's Form 8-K dated April 3, 2013, filed on April 8, 2013.
4.11Form of 3.375% Note due June 1, 2025.Included as Exhibit 4.1 to ERP Operating Limited Partnership's Form 8-K dated May 11, 2015, filed on May 13, 2015.
4.12Terms Agreement regarding 7.57% Notes due August 15, 2026.Included as Exhibit 1 to ERP Operating Limited Partnership’s Form 8-K, filed on August 13, 1996.
4.13Form of 2.850% Note due November 1, 2026.Included as Exhibit 4.1 to ERP Operating Limited Partnership's Form 8-K dated October 4, 2016, filed on October 7, 2016.
4.14Form of 3.250% Note due August 1, 2027.Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated July 31, 2017, filed on August 2, 2017.
4.15Form of 3.500% Note due March 1, 2028.Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 1, 2018, filed on February 6, 2018.
4.16Form of 4.150% Note due December 1, 2028.Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated November 28, 2018, filed on November 29, 2018.
4.17Form of 4.500% Note due July 1, 2044.Included as Exhibit 4.2 to ERP Operating Limited Partnership's Form 8-K dated June 16, 2014, filed on June 18, 2014.
4.18Form of 4.500% Note due June 1, 2045.Included as Exhibit 4.2 to ERP Operating Limited Partnership's Form 8-K dated May 11, 2015, filed on May 13, 2015.
4.19Form of 4.000% Note due August 1, 2047.Included as Exhibit 4.2 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated July 31, 2017, filed on August 2, 2017.
10.1*Noncompetition Agreement (Zell).Included as an exhibit to Equity Residential's Form S-11 Registration Statement, File No. 33-63158. **
10.2*Noncompetition Agreement (Spector).Included as an exhibit to Equity Residential's Form S-11 Registration Statement, File No. 33-63158. **
10.3*Form of Noncompetition Agreement (other officers).Included as an exhibit to Equity Residential's Form S-11 Registration Statement, File No. 33-63158. **
10.4Revolving Credit Agreement dated as of November 3, 2016 among ERP Operating Limited Partnership, Bank of America, N.A., as Administrative Agent, Wells Fargo Bank, National Association, and JPMorgan Chase Bank, N.A., as Co-Syndication Agents, Wells Fargo Securities, LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and J.P. Morgan Securities LLC, as Joint Lead Arrangers and Joint Bookrunners, and a syndicate of other banks (the “Credit Agreement”).Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated and filed November 3, 2016.
10.5Guaranty of Payment made as of November 3, 2016 between Equity Residential and Bank of America, N.A., as administrative agent for the banks party to the Credit Agreement.Included as Exhibit 10.2 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated and filed November 3, 2016.
10.6Amended and Restated Limited Partnership Agreement of Lexford Properties, L.P.Included as Exhibit 10.16 to Equity Residential's Form 10-K for the year ended December 31, 1999.
10.7*Equity Residential 2011 Share Incentive Plan.Included as Exhibit 99.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated June 16, 2011, filed on June 22, 2011.
10.8*First Amendment to 2011 Share Incentive Plan.Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2012.
10.9*Second Amendment to 2011 Share Incentive Plan.Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2013.
10.10*Third Amendment to 2011 Share Incentive Plan.Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended March 31, 2014.
10.11*Fourth Amendment to 2011 Share Incentive Plan.Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2014.
10.12*Fifth Amendment to 2011 Share Incentive Plan.Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2016.
10.13*Sixth Amendment to 2011 Share Incentive Plan.Included as Exhibit 10.18 to Equity Residential's and ERP Operating Limited Partnership's Form 10-K for the year ended December 31, 2016.
10.14*Seventh Amendment to 2011 Share Incentive Plan.Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2017.
10.15*Equity Residential Second Restated 2002 Share Incentive Plan dated December 10, 2008.Included as Exhibit 10.15 to Equity Residential's Form 10-K for the year ended December 31, 2008.
10.16*First Amendment to Second Restated 2002 Share Incentive Plan.Included as Exhibit 10.1 to Equity Residential's Form 10-Q for the quarterly period ended September 30, 2010.
10.17*Second Amendment to Second Restated 2002 Share Incentive Plan.Included as Exhibit 10.3 to Equity Residential's Form 10-Q for the quarterly period ended June 30, 2011.
10.18*Third Amendment to Second Restated 2002 Share Incentive Plan.Included as Exhibit 10.2 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2012.
10.19*Fourth Amendment to Second Restated 2002 Share Incentive Plan.Included as Exhibit 10.2 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2013.
10.20*Form of 2015 Performance Award Agreement.Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended March 31, 2015.
10.21*Form of 2018 Long-Term Incentive Plan Award Agreement.Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended March 31, 2018.
10.22*Form of Change in Control/Severance Agreement between the Company and other executive officers.Included as Exhibit 10.13 to Equity Residential's Form 10-K for the year ended December 31, 2001.
10.23*Form of First Amendment to Amended and Restated Change in Control/Severance Agreement with each executive officer.Included as Exhibit 10.1 to Equity Residential's Form 10-Q for the quarterly period ended March 31, 2009.
10.24*Form of Indemnification Agreement between the Company and each trustee and executive officer.Included as Exhibit 10.18 to Equity Residential's Form 10-K for the year ended December 31, 2003.
10.25*Form of Letter Agreement between Equity Residential and each of David J. Neithercut, Alan W. George and Bruce C. Strohm.Included as Exhibit 10.3 to Equity Residential's Form 10-Q for the quarterly period ended September 30, 2008.
10.26*Form of Executive Retirement Benefits Agreement.Included as Exhibit 10.24 to Equity Residential's Form 10-K for the year ended December 31, 2006.
10.27*Retirement Benefits Agreement between Samuel Zell and the Company dated October 18, 2001.Included as Exhibit 10.18 to Equity Residential's Form 10-K for the year ended December 31, 2001.
10.28*Rule of 70 Retirement Agreement, dated February 28, 2018, by and between Equity Residential and David S. Santee.Included as Exhibit 10.2 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended March 31, 2018.
10.29*Age 62 Retirement Agreement, dated September 4, 2018, by and between Equity Residential and David J. Neithercut.Included as Exhibit 10.1 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended September 30, 2018.
10.30*Amended and Restated Deferred Compensation Agreement between the Company and Gerald A. Spector dated January 1, 2002.Included as Exhibit 10.17 to Equity Residential's Form 10-K for the year ended December 31, 2001.
10.31*The Equity Residential Supplemental Executive Retirement Plan as Amended and Restated effective April 1, 2017.Included as Exhibit 10.2 to Equity Residential's and ERP Operating Limited Partnership's Form 10-Q for the quarterly period ended June 30, 2017.
10.32*The Equity Residential Grandfathered Supplemental Executive Retirement Plan as Amended and Restated effective January 1, 2005.Included as Exhibit 10.2 to Equity Residential's Form 10-Q for the quarterly period ended March 31, 2008.
10.33Distribution Agreement, dated June 29, 2016, among the Company, the Operating Partnership, J.P. Morgan Securities LLC, Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, BNY Mellon Capital Markets, LLC, Morgan Stanley & Co. LLC, Mitsubishi UFJ Securities (USA), Inc., Scotia Capital (USA) Inc. and UBS Securities LLC.Included as Exhibit 1.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated and filed on June 29, 2016.
10.34Archstone Residual JV, LLC Limited Liability Company Agreement.Included as Exhibit 10.3 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.
10.35Archstone Parallel Residual JV, LLC Limited Liability Company Agreement.Included as Exhibit 10.4 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.
10.36Archstone Parallel Residual JV 2, LLC Limited Liability Company Agreement.Included as Exhibit 10.5 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.
10.37Legacy Holdings JV, LLC Limited Liability Company Agreement.Included as Exhibit 10.6 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated February 27, 2013, filed on February 28, 2013.
21List of Subsidiaries of Equity Residential and ERP Operating Limited Partnership.Attached herein.
23.1Consent of Ernst & Young LLP - Equity Residential.Attached herein.
23.2Consent of Ernst & Young LLP - ERP Operating Limited Partnership.Attached herein.
24Power of Attorney.See the signature page to this report.
31.1Equity Residential - Certification of Mark J. Parrell, Chief Executive Officer.Attached herein.
31.2Equity Residential - Certification of Robert A. Garechana, Chief Financial Officer.Attached herein.
31.3ERP Operating Limited Partnership - Certification of Mark J. Parrell, Chief Executive Officer of Registrant's General Partner.Attached herein.
31.4ERP Operating Limited Partnership - Certification of Robert A. Garechana, Chief Financial Officer of Registrant's General Partner.Attached herein.
32.1Equity Residential - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Mark J. Parrell, Chief Executive Officer of the Company.Attached herein.
32.2Equity Residential - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Robert A. Garechana, Chief Financial Officer of the Company.Attached herein.
32.3ERP Operating Limited Partnership - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Mark J. Parrell, Chief Executive Officer of Registrant's General Partner.Attached herein.
32.4ERP Operating Limited Partnership - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Robert A. Garechana, Chief Financial Officer of Registrant's General Partner.Attached herein.
101XBRL (Extensible Business Reporting Language). The following materials from Equity Residential’s and ERP Operating Limited Partnership's Annual Report on Form 10-K for the year ended December 31, 2018, formatted in XBRL: (i) consolidated balance sheets, (ii) consolidated statements of operations and comprehensive income, (iii) consolidated statements of cash flows, (iv) consolidated statements of changes in equity (Equity Residential), (v) consolidated statements of changes in capital (ERP Operating Limited Partnership) and (vi) notes to consolidated financial statements.Attached herein.

*Management contracts and compensatory plans or arrangements filed as exhibits to this report are identified by an asterisk.

**Filed on paper – hyperlink is not required pursuant to Rule 105 of Regulation S-T.

SIGNATURES

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

EQUITY RESIDENTIAL
By:/s/ Mark J. Parrell
Mark J. Parrell President and Chief Executive Officer (Principal Executive Officer)
Date:February 21, 2019
ERP OPERATING LIMITED PARTNERSHIP BY: EQUITY RESIDENTIAL ITS GENERAL PARTNER
By:/s/ Mark J. Parrell
Mark J. Parrell President and Chief Executive Officer (Principal Executive Officer)
Date:February 21, 2019

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

POWER OF ATTORNEY

KNOW ALL MEN/WOMEN BY THESE PRESENTS, that each person whose signature appears below, hereby constitutes and appoints Mark J. Parrell, Robert A. Garechana and Ian S. Kaufman, or any of them, his or her attorneys-in-fact and agents, with full power of substitution and resubstitution for him or her in any and all capacities, to do all acts and things which said attorneys and agents, or any of them, deem advisable to enable the company to comply with the Securities Exchange Act of 1934, as amended, and any requirements or regulations of the Securities and Exchange Commission in respect thereof, in connection with the company’s filing of an annual report on Form 10-K for the company’s fiscal year 2018, including specifically, but without limitation of the general authority hereby granted, the power and authority to sign his or her name as a trustee or officer, or both, of the company, as indicated below opposite his or her signature, to the Form 10-K, and any amendment thereto; and each of the undersigned does hereby fully ratify and confirm all that said attorneys and agents, or any of them, or the substitute of any of them, shall do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of each registrant and in the capacities set forth below and on the dates indicated:

NameTitleDate
/s/ Mark J. ParrellPresident, Chief Executive Officer and TrusteeFebruary 21, 2019
Mark J. Parrell(Principal Executive Officer)
/s/ Robert A. GarechanaExecutive Vice President and Chief Financial OfficerFebruary 21, 2019
Robert A. Garechana(Principal Financial Officer)
/s/ Ian S. KaufmanSenior Vice President and Chief Accounting OfficerFebruary 21, 2019
Ian S. Kaufman(Principal Accounting Officer)
/s/ Charles L. AtwoodTrusteeFebruary 21, 2019
Charles L. Atwood
/s/ Raymond BennettTrusteeFebruary 21, 2019
Raymond Bennett
/s/ Linda Walker BynoeTrusteeFebruary 21, 2019
Linda Walker Bynoe
/s/ Connie K. DuckworthTrusteeFebruary 21, 2019
Connie K. Duckworth
/s/ Mary Kay HabenTrusteeFebruary 21, 2019
Mary Kay Haben
/s/ Bradley A. KeywellTrusteeFebruary 21, 2019
Bradley A. Keywell
/s/ John E. NealTrusteeFebruary 21, 2019
John E. Neal
/s/ David J. NeithercutTrusteeFebruary 21, 2019
David J. Neithercut
/s/ Mark S. ShapiroTrusteeFebruary 21, 2019
Mark S. Shapiro
/s/ Stephen E. SterrettTrusteeFebruary 21, 2019
Stephen E. Sterrett
/s/ Gerald A. SpectorVice Chairman of the Board of TrusteesFebruary 21, 2019
Gerald A. Spector
/s/ Samuel ZellChairman of the Board of TrusteesFebruary 21, 2019
Samuel Zell

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

PAGE
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT
Report of Independent Registered Public Accounting Firm on the Financial Statements (Equity Residential)F-2
Report of Independent Registered Public Accounting Firm on the Financial Statements (ERP Operating Limited Partnership)F-3
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting (Equity Residential)F-4
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting (ERP Operating Limited Partnership)F-5
Financial Statements of Equity Residential:
Consolidated Balance Sheets as of December 31, 2018 and 2017F-6
Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2018, 2017 and 2016F-7 to F-8
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016F-9 to F-12
Consolidated Statements of Changes in Equity for the years ended December 31, 2018, 2017 and 2016F-13 to F-14
Financial Statements of ERP Operating Limited Partnership:
Consolidated Balance Sheets as of December 31, 2018 and 2017F-15
Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2018, 2017 and 2016F-16 to F-17
Consolidated Statements of Cash Flows for the years ended December 31, 2018, 2017 and 2016F-18 to F-21
Consolidated Statements of Changes in Capital for the years ended December 31, 2018, 2017 and 2016F-22 to F-23
Notes to Consolidated Financial Statements of Equity Residential and ERP Operating Limited PartnershipF-24 to F-58
SCHEDULE FILED AS PART OF THIS REPORT
Schedule III – Real Estate and Accumulated Depreciation of Equity Residential and ERP Operating Limited PartnershipS-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 Shareholders and Board of Trustees

Equity Residential

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Equity Residential (the Company) as of December 31, 2018 and 2017, the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 21, 2019 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
We have served as the Company’s auditor since 1996.
Chicago, Illinois
February 21, 2019

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

ERP Operating Limited Partnership

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of ERP Operating Limited Partnership (the Operating Partnership) as of December 31, 2018 and 2017, the related consolidated statements of operations and comprehensive income, changes in capital and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Operating Partnership at December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Operating Partnership’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 21, 2019 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on the Operating Partnership’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
We have served as the Operating Partnership’s auditor since 1996.
Chicago, Illinois
February 21, 2019

F-3

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Trustees

Equity Residential

Opinion on Internal Control over Financial Reporting

We have audited Equity Residential’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Equity Residential (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2018 and 2017, the related consolidated statements of operations and comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 21, 2019 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and trustees of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
February 21, 2019

F-4

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners

ERP Operating Limited Partnership

Opinion on Internal Control over Financial Reporting

We have audited ERP Operating Limited Partnership’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, ERP Operating Limited Partnership (the Operating Partnership) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Operating Partnership as of December 31, 2018 and 2017, the related consolidated statements of operations and comprehensive income, changes in capital and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 21, 2019 expressed an unqualified opinion thereon.

Basis for Opinion

The Operating Partnership’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and trustees of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Chicago, Illinois
February 21, 2019

F-5

EQUITY RESIDENTIAL

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands except for share amounts)

December 31,December 31,
20182017
ASSETS
Land$5,875,803$5,996,024
Depreciable property20,435,90119,768,362
Projects under development109,409163,547
Land held for development89,90998,963
Investment in real estate26,511,02226,026,896
Accumulated depreciation(6,696,281)(6,040,378)
Investment in real estate, net19,814,74119,986,518
Investments in unconsolidated entities58,34958,254
Cash and cash equivalents47,44250,647
Restricted deposits68,87150,115
Other assets404,806425,065
Total assets$20,394,209$20,570,599
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net$2,385,470$3,618,722
Notes, net5,933,2865,038,812
Line of credit and commercial paper499,183299,757
Accounts payable and accrued expenses102,471114,766
Accrued interest payable62,62258,035
Other liabilities358,563341,852
Security deposits67,25865,009
Distributions payable206,601192,828
Total liabilities9,615,4549,729,781
Commitments and contingencies
Redeemable Noncontrolling Interests – Operating Partnership379,106366,955
Equity:
Shareholders’ equity:
Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized; 745,600 shares issued and outstanding as of December 31, 2018 and December 31, 201737,28037,280
Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 369,405,161 shares issued and outstanding as of December 31, 2018 and 368,018,082 shares issued and outstanding as of December 31, 20173,6943,680
Paid in capital8,935,4538,886,586
Retained earnings1,261,7631,403,530
Accumulated other comprehensive income (loss)(64,986)(88,612)
Total shareholders’ equity10,173,20410,242,464
Noncontrolling Interests:
Operating Partnership228,738226,691
Partially Owned Properties(2,293)4,708
Total Noncontrolling Interests226,445231,399
Total equity10,399,64910,473,863
Total liabilities and equity$20,394,209$20,570,599

See accompanying notes

F-6

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands except per share data)

Year Ended December 31,
201820172016
REVENUES
Rental income$2,577,681$2,470,689$2,422,233
Fee and asset management7537173,567
Total revenues2,578,4342,471,4062,425,800
EXPENSES
Property and maintenance429,335405,281406,823
Real estate taxes and insurance357,814335,495317,387
Property management92,48585,49382,015
General and administrative53,81352,22457,840
Depreciation785,725743,749705,649
Impairment7021,693—
Total expenses1,719,8741,623,9351,569,714
Operating income858,560847,471856,086
Interest and other income15,3176,13665,773
Other expenses(17,267)(5,186)(10,368)
Interest:
Expense incurred, net(413,360)(383,890)(482,246)
Amortization of deferred financing costs(11,310)(8,526)(12,633)
Income before income and other taxes, income (loss) from investments in unconsolidated entities, net gain (loss) on sales of real estate properties and land parcels and discontinued operations431,940456,005416,612
Income and other tax (expense) benefit(878)(478)(1,613)
Income (loss) from investments in unconsolidated entities(3,667)(3,370)4,801
Net gain (loss) on sales of real estate properties256,810157,0574,044,055
Net gain (loss) on sales of land parcels98719,16715,731
Income from continuing operations685,192628,3814,479,586
Discontinued operations, net——518
Net income685,192628,3814,480,104
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership(24,939)(22,604)(171,511)
Partially Owned Properties(2,718)(2,323)(16,430)
Net income attributable to controlling interests657,535603,4544,292,163
Preferred distributions(3,090)(3,091)(3,091)
Net income available to Common Shares$654,445$600,363$4,289,072
Earnings per share – basic:
Income from continuing operations available to Common Shares$1.78$1.64$11.75
Net income available to Common Shares$1.78$1.64$11.75
Weighted average Common Shares outstanding368,052366,968365,002
Earnings per share – diluted:
Income from continuing operations available to Common Shares$1.77$1.63$11.68
Net income available to Common Shares$1.77$1.63$11.68
Weighted average Common Shares outstanding383,695382,678381,992

See accompanying notes

F-7

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)

(Amounts in thousands except per share data)

Year Ended December 31,
201820172016
Comprehensive income:
Net income$685,192$628,381$4,480,104
Other comprehensive income (loss):
Other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the year5,1746,439(3,915)
Losses reclassified into earnings from other comprehensive income18,45218,85841,758
Other comprehensive income (loss) – foreign currency:
Currency translation adjustments arising during the year——264
Other comprehensive income (loss)23,62625,29738,107
Comprehensive income708,818653,6784,518,211
Comprehensive (income) attributable to Noncontrolling Interests(28,526)(25,845)(189,411)
Comprehensive income attributable to controlling interests$680,292$627,833$4,328,800

See accompanying notes

F-8

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

Year Ended December 31,
201820172016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$685,192$628,381$4,480,104
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation785,725743,749705,649
Amortization of deferred financing costs11,3108,52612,633
Amortization of above/below market lease intangibles4,3923,8283,426
Amortization of discounts and premiums on debt22,7813,536(17,986)
Amortization of deferred settlements on derivative instruments18,44018,84741,680
Impairment7021,693—
Write-off of pursuit costs4,4503,1064,092
(Income) loss from investments in unconsolidated entities3,6673,370(4,801)
Distributions from unconsolidated entities – return on capital2,4922,6322,863
Net (gain) loss on sales of investment securities and other investments——(58,409)
Net (gain) loss on sales of real estate properties(256,810)(157,057)(4,044,055)
Net (gain) loss on sales of land parcels(987)(19,167)(15,731)
Net (gain) loss on sales of discontinued operations——(43)
Net (gain) loss on debt extinguishment22,11012,258114,666
Realized/unrealized (gain) loss on derivative instruments50—74
Compensation paid with Company Common Shares27,13224,99730,530
Changes in assets and liabilities:
(Increase) decrease in other assets4,097(449)31,147
Increase (decrease) in accounts payable and accrued expenses(1,862)11,532(6,061)
Increase (decrease) in accrued interest payable4,587(2,911)(24,275)
Increase (decrease) in other liabilities16,578(23,468)(26,422)
Increase (decrease) in security deposits2,2492,385(14,958)
Net cash provided by operating activities1,356,2951,265,7881,214,123
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate – acquisitions(708,092)(466,394)(205,880)
Investment in real estate – development/other(154,431)(276,382)(566,825)
Capital expenditures to real estate(188,501)(202,607)(172,177)
Non-real estate capital additions(4,505)(1,506)(5,731)
Interest capitalized for real estate under development(6,260)(26,290)(51,451)
Proceeds from disposition of real estate, net691,526384,5836,824,659
Investments in unconsolidated entities(6,571)(6,034)(5,266)
Distributions from unconsolidated entities – return of capital—33413,798
Proceeds from sale of investment securities and other investments——72,815
Net cash provided by (used for) investing activities(376,834)(594,296)5,903,942

See accompanying notes

F-9

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

Year Ended December 31,
201820172016
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt financing costs$(8,583)$(6,289)$(13,305)
Mortgage notes payable, net:
Proceeds96,935——
Lump sum payoffs(1,347,939)(493,420)(583,122)
Scheduled principal repayments(6,629)(10,704)(8,544)
Net gain (loss) on debt extinguishment(22,110)(12,258)(31,732)
Notes, net:
Proceeds896,294692,466496,705
Lump sum payoffs—(497,975)(1,500,000)
Net gain (loss) on debt extinguishment——(82,934)
Line of credit and commercial paper:
Line of credit proceeds3,805,0001,845,000426,000
Line of credit repayments(3,805,000)(1,845,000)(426,000)
Commercial paper proceeds14,030,9265,066,5091,760,194
Commercial paper repayments(13,831,500)(4,786,750)(2,127,472)
Proceeds from (payments on) settlement of derivative instruments18,1181,295(4,662)
Proceeds from Employee Share Purchase Plan (ESPP)3,8793,7443,686
Proceeds from exercise of options30,65531,59635,833
Payment of offering costs(27)(51)(314)
Other financing activities, net(78)(63)(49)
Acquisition of Noncontrolling Interests – Partially Owned Properties(13)——
Contributions – Noncontrolling Interests – Partially Owned Properties125125—
Contributions – Noncontrolling Interests – Operating Partnership1—1
Distributions:
Common Shares(782,122)(739,375)(4,771,725)
Preferred Shares(3,863)(3,091)(2,318)
Noncontrolling Interests – Operating Partnership(28,226)(27,291)(188,115)
Noncontrolling Interests – Partially Owned Properties(9,753)(8,286)(36,219)
Net cash provided by (used for) financing activities(963,910)(789,818)(7,054,092)
Net increase (decrease) in cash and cash equivalents and restricted deposits15,551(118,326)63,973
Cash and cash equivalents and restricted deposits, beginning of year100,762219,088155,115
Cash and cash equivalents and restricted deposits, end of year$116,313$100,762$219,088
Cash and cash equivalents and restricted deposits, end of year
Cash and cash equivalents$47,442$50,647$77,207
Restricted deposits68,87150,115141,881
Total cash and cash equivalents and restricted deposits, end of year$116,313$100,762$219,088

See accompanying notes

F-10

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

Year Ended December 31,
201820172016
SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized$358,156$360,273$482,152
Net cash paid for income and other taxes$853$640$1,494
Real estate acquisitions/dispositions/other:
Mortgage loans assumed$—$—$43,400
Amortization of deferred financing costs:
Other assets$2,412$2,412$3,366
Mortgage notes payable, net$4,792$2,493$3,978
Notes, net$4,106$3,621$5,289
Amortization of discounts and premiums on debt:
Mortgage notes payable, net$20,144$1,172$(21,158)
Notes, net$2,637$2,364$3,172
Amortization of deferred settlements on derivative instruments:
Other liabilities$(12)$(11)$(78)
Accumulated other comprehensive income$18,452$18,858$41,758
Write-off of pursuit costs:
Investment in real estate, net$4,364$2,965$3,586
Other assets$53$17$402
Accounts payable and accrued expenses$33$124$104
(Income) loss from investments in unconsolidated entities:
Investments in unconsolidated entities$2,304$1,955$(6,327)
Other liabilities$1,363$1,415$1,526
Realized/unrealized (gain) loss on derivative instruments:
Other assets$(14,977)$(4,582)$1,798
Notes, net$(680)$(3,454)$(1,798)
Other liabilities$10,533$1,597$3,989
Accumulated other comprehensive income$5,174$6,439$(3,915)
Investments in unconsolidated entities:
Investments in unconsolidated entities$(4,891)$(3,034)$(2,326)
Other liabilities$(1,680)$(3,000)$(2,940)

See accompanying notes

F-11

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

Year Ended December 31,
201820172016
SUPPLEMENTAL INFORMATION (continued):
Distributions from unconsolidated entities - return of capital:
Investments in unconsolidated entities$—$334$14,014
Other assets$—$—$(216)
Debt financing costs:
Other assets$(145)$—$(8,553)
Mortgage notes payable, net$(555)$—$(507)
Notes, net$(7,883)$(6,289)$(4,245)
Proceeds from (payments on) settlement of derivative instruments:
Other assets$18,118$1,295$—
Other liabilities$—$—$(4,662)
Other:
Foreign currency translation adjustments$—$—$(264)

See accompanying notes

F-12

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in thousands)

Year Ended December 31,
201820172016
SHAREHOLDERS’ EQUITY
PREFERRED SHARES
Balance, beginning of year$37,280$37,280$37,280
Balance, end of year$37,280$37,280$37,280
COMMON SHARES, $0.01 PAR VALUE
Balance, beginning of year$3,680$3,659$3,648
Conversion of OP Units into Common Shares1111
Exercise of share options1188
Employee Share Purchase Plan (ESPP)111
Share-based employee compensation expense:
Restricted shares111
Balance, end of year$3,694$3,680$3,659
PAID IN CAPITAL
Balance, beginning of year$8,886,586$8,758,422$8,572,365
Common Share Issuance:
Conversion of OP Units into Common Shares4,09715,8893,725
Exercise of share options30,64431,58835,825
Employee Share Purchase Plan (ESPP)3,8783,7433,685
Share-based employee compensation expense:
Restricted shares8,2579,77615,015
Share options9,7346,8353,432
ESPP discount767747650
Offering costs(27)(51)(314)
Supplemental Executive Retirement Plan (SERP)(454)(594)748
Change in market value of Redeemable Noncontrolling Interests – Operating Partnership(13,922)41,916115,093
Adjustment for Noncontrolling Interests ownership in Operating Partnership5,89318,3158,198
Balance, end of year$8,935,453$8,886,586$8,758,422
RETAINED EARNINGS
Balance, beginning of year$1,403,530$1,543,626$2,009,091
Net income attributable to controlling interests657,535603,4544,292,163
Common Share distributions(796,212)(740,459)(4,754,537)
Preferred Share distributions(3,090)(3,091)(3,091)
Balance, end of year$1,261,763$1,403,530$1,543,626
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance, beginning of year$(88,612)$(113,909)$(152,016)
Accumulated other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the year5,1746,439(3,915)
Losses reclassified into earnings from other comprehensive income18,45218,85841,758
Accumulated other comprehensive income (loss) – foreign currency:
Currency translation adjustments arising during the year——264
Balance, end of year$(64,986)$(88,612)$(113,909)

See accompanying notes

F-13

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)

(Amounts in thousands)

Year Ended December 31,
201820172016
NONCONTROLLING INTERESTS
OPERATING PARTNERSHIP
Balance, beginning of year$226,691$221,297$221,379
Issuance of restricted units to Noncontrolling Interests1—1
Conversion of OP Units held by Noncontrolling Interests into OP Units held by General Partner(4,098)(15,900)(3,726)
Equity compensation associated with Noncontrolling Interests14,00910,52318,180
Net income attributable to Noncontrolling Interests24,93922,604171,511
Distributions to Noncontrolling Interests(28,682)(26,739)(187,448)
Change in carrying value of Redeemable Noncontrolling Interests – Operating Partnership1,77133,2219,598
Adjustment for Noncontrolling Interests ownership in Operating Partnership(5,893)(18,315)(8,198)
Balance, end of year$228,738$226,691$221,297
PARTIALLY OWNED PROPERTIES
Balance, beginning of year$4,708$10,609$4,608
Net income attributable to Noncontrolling Interests2,7182,32316,430
Acquisitions of Noncontrolling Interests – Partially Owned Properties(13)——
Contributions by Noncontrolling Interests125125—
Distributions to Noncontrolling Interests(9,831)(8,349)(36,268)
Other——25,839
Balance, end of year$(2,293)$4,708$10,609

See accompanying notes

F-14

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

December 31,December 31,
20182017
ASSETS
Land$5,875,803$5,996,024
Depreciable property20,435,90119,768,362
Projects under development109,409163,547
Land held for development89,90998,963
Investment in real estate26,511,02226,026,896
Accumulated depreciation(6,696,281)(6,040,378)
Investment in real estate, net19,814,74119,986,518
Investments in unconsolidated entities58,34958,254
Cash and cash equivalents47,44250,647
Restricted deposits68,87150,115
Other assets404,806425,065
Total assets$20,394,209$20,570,599
LIABILITIES AND CAPITAL
Liabilities:
Mortgage notes payable, net$2,385,470$3,618,722
Notes, net5,933,2865,038,812
Line of credit and commercial paper499,183299,757
Accounts payable and accrued expenses102,471114,766
Accrued interest payable62,62258,035
Other liabilities358,563341,852
Security deposits67,25865,009
Distributions payable206,601192,828
Total liabilities9,615,4549,729,781
Commitments and contingencies
Redeemable Limited Partners379,106366,955
Capital:
Partners’ Capital:
Preference Units37,28037,280
General Partner10,200,91010,293,796
Limited Partners228,738226,691
Accumulated other comprehensive income (loss)(64,986)(88,612)
Total partners’ capital10,401,94210,469,155
Noncontrolling Interests – Partially Owned Properties(2,293)4,708
Total capital10,399,64910,473,863
Total liabilities and capital$20,394,209$20,570,599

See accompanying notes

F-15

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands except per Unit data)

Year Ended December 31,
201820172016
REVENUES
Rental income$2,577,681$2,470,689$2,422,233
Fee and asset management7537173,567
Total revenues2,578,4342,471,4062,425,800
EXPENSES
Property and maintenance429,335405,281406,823
Real estate taxes and insurance357,814335,495317,387
Property management92,48585,49382,015
General and administrative53,81352,22457,840
Depreciation785,725743,749705,649
Impairment7021,693—
Total expenses1,719,8741,623,9351,569,714
Operating income858,560847,471856,086
Interest and other income15,3176,13665,773
Other expenses(17,267)(5,186)(10,368)
Interest:
Expense incurred, net(413,360)(383,890)(482,246)
Amortization of deferred financing costs(11,310)(8,526)(12,633)
Income before income and other taxes, income (loss) from investments in unconsolidated entities, net gain (loss) on sales of real estate properties and land parcels and discontinued operations431,940456,005416,612
Income and other tax (expense) benefit(878)(478)(1,613)
Income (loss) from investments in unconsolidated entities(3,667)(3,370)4,801
Net gain (loss) on sales of real estate properties256,810157,0574,044,055
Net gain (loss) on sales of land parcels98719,16715,731
Income from continuing operations685,192628,3814,479,586
Discontinued operations, net——518
Net income685,192628,3814,480,104
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties(2,718)(2,323)(16,430)
Net income attributable to controlling interests$682,474$626,058$4,463,674
ALLOCATION OF NET INCOME:
Preference Units$3,090$3,091$3,091
General Partner$654,445$600,363$4,289,072
Limited Partners24,93922,604171,511
Net income available to Units$679,384$622,967$4,460,583
Earnings per Unit – basic:
Income from continuing operations available to Units$1.78$1.64$11.75
Net income available to Units$1.78$1.64$11.75
Weighted average Units outstanding380,921379,869378,829
Earnings per Unit – diluted:
Income from continuing operations available to Units$1.77$1.63$11.68
Net income available to Units$1.77$1.63$11.68
Weighted average Units outstanding383,695382,678381,992

See accompanying notes

F-16

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)

(Amounts in thousands except per Unit data)

Year Ended December 31,
201820172016
Comprehensive income:
Net income$685,192$628,381$4,480,104
Other comprehensive income (loss):
Other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the year5,1746,439(3,915)
Losses reclassified into earnings from other comprehensive income18,45218,85841,758
Other comprehensive income (loss) – foreign currency:
Currency translation adjustments arising during the year——264
Other comprehensive income (loss)23,62625,29738,107
Comprehensive income708,818653,6784,518,211
Comprehensive (income) attributable to Noncontrolling Interests – Partially Owned Properties(2,718)(2,323)(16,430)
Comprehensive income attributable to controlling interests$706,100$651,355$4,501,781

See accompanying notes

F-17

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

Year Ended December 31,
201820172016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$685,192$628,381$4,480,104
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation785,725743,749705,649
Amortization of deferred financing costs11,3108,52612,633
Amortization of above/below market lease intangibles4,3923,8283,426
Amortization of discounts and premiums on debt22,7813,536(17,986)
Amortization of deferred settlements on derivative instruments18,44018,84741,680
Impairment7021,693—
Write-off of pursuit costs4,4503,1064,092
(Income) loss from investments in unconsolidated entities3,6673,370(4,801)
Distributions from unconsolidated entities – return on capital2,4922,6322,863
Net (gain) loss on sales of investment securities and other investments——(58,409)
Net (gain) loss on sales of real estate properties(256,810)(157,057)(4,044,055)
Net (gain) loss on sales of land parcels(987)(19,167)(15,731)
Net (gain) loss on sales of discontinued operations——(43)
Net (gain) loss on debt extinguishment22,11012,258114,666
Realized/unrealized (gain) loss on derivative instruments50—74
Compensation paid with Company Common Shares27,13224,99730,530
Changes in assets and liabilities:
(Increase) decrease in other assets4,097(449)31,147
Increase (decrease) in accounts payable and accrued expenses(1,862)11,532(6,061)
Increase (decrease) in accrued interest payable4,587(2,911)(24,275)
Increase (decrease) in other liabilities16,578(23,468)(26,422)
Increase (decrease) in security deposits2,2492,385(14,958)
Net cash provided by operating activities1,356,2951,265,7881,214,123
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate – acquisitions(708,092)(466,394)(205,880)
Investment in real estate – development/other(154,431)(276,382)(566,825)
Capital expenditures to real estate(188,501)(202,607)(172,177)
Non-real estate capital additions(4,505)(1,506)(5,731)
Interest capitalized for real estate under development(6,260)(26,290)(51,451)
Proceeds from disposition of real estate, net691,526384,5836,824,659
Investments in unconsolidated entities(6,571)(6,034)(5,266)
Distributions from unconsolidated entities – return of capital—33413,798
Proceeds from sale of investment securities and other investments——72,815
Net cash provided by (used for) investing activities(376,834)(594,296)5,903,942

See accompanying notes

F-18

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

Year Ended December 31,
201820172016
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt financing costs$(8,583)$(6,289)$(13,305)
Mortgage notes payable, net:
Proceeds96,935——
Lump sum payoffs(1,347,939)(493,420)(583,122)
Scheduled principal repayments(6,629)(10,704)(8,544)
Net gain (loss) on debt extinguishment(22,110)(12,258)(31,732)
Notes, net:
Proceeds896,294692,466496,705
Lump sum payoffs—(497,975)(1,500,000)
Net gain (loss) on debt extinguishment——(82,934)
Line of credit and commercial paper:
Line of credit proceeds3,805,0001,845,000426,000
Line of credit repayments(3,805,000)(1,845,000)(426,000)
Commercial paper proceeds14,030,9265,066,5091,760,194
Commercial paper repayments(13,831,500)(4,786,750)(2,127,472)
Proceeds from (payments on) settlement of derivative instruments18,1181,295(4,662)
Proceeds from EQR’s Employee Share Purchase Plan (ESPP)3,8793,7443,686
Proceeds from exercise of EQR options30,65531,59635,833
Payment of offering costs(27)(51)(314)
Other financing activities, net(78)(63)(49)
Acquisition of Noncontrolling Interests – Partially Owned Properties(13)——
Contributions – Noncontrolling Interests – Partially Owned Properties125125—
Contributions – Limited Partners1—1
Distributions:
OP Units – General Partner(782,122)(739,375)(4,771,725)
Preference Units(3,863)(3,091)(2,318)
OP Units – Limited Partners(28,226)(27,291)(188,115)
Noncontrolling Interests – Partially Owned Properties(9,753)(8,286)(36,219)
Net cash provided by (used for) financing activities(963,910)(789,818)(7,054,092)
Net increase (decrease) in cash and cash equivalents and restricted deposits15,551(118,326)63,973
Cash and cash equivalents and restricted deposits, beginning of year100,762219,088155,115
Cash and cash equivalents and restricted deposits, end of year$116,313$100,762$219,088
Cash and cash equivalents and restricted deposits, end of year
Cash and cash equivalents$47,442$50,647$77,207
Restricted deposits68,87150,115141,881
Total cash and cash equivalents and restricted deposits, end of year$116,313$100,762$219,088

See accompanying notes

F-19

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

Year Ended December 31,
201820172016
SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized$358,156$360,273$482,152
Net cash paid for income and other taxes$853$640$1,494
Real estate acquisitions/dispositions/other:
Mortgage loans assumed$—$—$43,400
Amortization of deferred financing costs:
Other assets$2,412$2,412$3,366
Mortgage notes payable, net$4,792$2,493$3,978
Notes, net$4,106$3,621$5,289
Amortization of discounts and premiums on debt:
Mortgage notes payable, net$20,144$1,172$(21,158)
Notes, net$2,637$2,364$3,172
Amortization of deferred settlements on derivative instruments:
Other liabilities$(12)$(11)$(78)
Accumulated other comprehensive income$18,452$18,858$41,758
Write-off of pursuit costs:
Investment in real estate, net$4,364$2,965$3,586
Other assets$53$17$402
Accounts payable and accrued expenses$33$124$104
(Income) loss from investments in unconsolidated entities:
Investments in unconsolidated entities$2,304$1,955$(6,327)
Other liabilities$1,363$1,415$1,526
Realized/unrealized (gain) loss on derivative instruments:
Other assets$(14,977)$(4,582)$1,798
Notes, net$(680)$(3,454)$(1,798)
Other liabilities$10,533$1,597$3,989
Accumulated other comprehensive income$5,174$6,439$(3,915)
Investments in unconsolidated entities:
Investments in unconsolidated entities$(4,891)$(3,034)$(2,326)
Other liabilities$(1,680)$(3,000)$(2,940)

See accompanying notes

F-20

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

Year Ended December 31,
201820172016
SUPPLEMENTAL INFORMATION (continued):
Distributions from unconsolidated entities - return of capital:
Investments in unconsolidated entities$—$334$14,014
Other assets$—$—$(216)
Debt financing costs:
Other assets$(145)$—$(8,553)
Mortgage notes payable, net$(555)$—$(507)
Notes, net$(7,883)$(6,289)$(4,245)
Proceeds from (payments on) settlement of derivative instruments:
Other assets$18,118$1,295$—
Other liabilities$—$—$(4,662)
Other:
Foreign currency translation adjustments$—$—$(264)

See accompanying notes

F-21

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL

(Amounts in thousands)

Year Ended December 31,
201820172016
PARTNERS’ CAPITAL
PREFERENCE UNITS
Balance, beginning of year$37,280$37,280$37,280
Balance, end of year$37,280$37,280$37,280
GENERAL PARTNER
Balance, beginning of year$10,293,796$10,305,707$10,585,104
OP Unit Issuance:
Conversion of OP Units held by Limited Partners into OP Units held by General Partner4,09815,9003,726
Exercise of EQR share options30,65531,59635,833
EQR’s Employee Share Purchase Plan (ESPP)3,8793,7443,686
Share-based employee compensation expense:
EQR restricted shares8,2589,77715,016
EQR share options9,7346,8353,432
EQR ESPP discount767747650
Net income available to Units – General Partner654,445600,3634,289,072
OP Units – General Partner distributions(796,212)(740,459)(4,754,537)
Offering costs(27)(51)(314)
Supplemental Executive Retirement Plan (SERP)(454)(594)748
Change in market value of Redeemable Limited Partners(13,922)41,916115,093
Adjustment for Limited Partners ownership in Operating Partnership5,89318,3158,198
Balance, end of year$10,200,910$10,293,796$10,305,707
LIMITED PARTNERS
Balance, beginning of year$226,691$221,297$221,379
Issuance of restricted units to Limited Partners1—1
Conversion of OP Units held by Limited Partners into OP Units held by General Partner(4,098)(15,900)(3,726)
Equity compensation associated with Units – Limited Partners14,00910,52318,180
Net income available to Units – Limited Partners24,93922,604171,511
Units – Limited Partners distributions(28,682)(26,739)(187,448)
Change in carrying value of Redeemable Limited Partners1,77133,2219,598
Adjustment for Limited Partners ownership in Operating Partnership(5,893)(18,315)(8,198)
Balance, end of year$228,738$226,691$221,297
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance, beginning of year$(88,612)$(113,909)$(152,016)
Accumulated other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the year5,1746,439(3,915)
Losses reclassified into earnings from other comprehensive income18,45218,85841,758
Accumulated other comprehensive income (loss) – foreign currency:
Currency translation adjustments arising during the year——264
Balance, end of year$(64,986)$(88,612)$(113,909)

See accompanying notes

F-22

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (Continued)

(Amounts in thousands)

Year Ended December 31,
201820172016
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS – PARTIALLY OWNED PROPERTIES
Balance, beginning of year$4,708$10,609$4,608
Net income attributable to Noncontrolling Interests2,7182,32316,430
Acquisitions of Noncontrolling Interests – Partially Owned Properties(13)——
Contributions by Noncontrolling Interests125125—
Distributions to Noncontrolling Interests(9,831)(8,349)(36,268)
Other——25,839
Balance, end of year$(2,293)$4,708$10,609

See accompanying notes

F-23

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.Business

Equity Residential (“EQR”) is an S&P 500 company focused on the acquisition, development and management of rental apartment properties located in urban and high-density suburban markets, a business that is conducted on its behalf by ERP Operating Limited Partnership (“ERPOP”). EQR is a Maryland real estate investment trust (“REIT”) formed in March 1993 and ERPOP is an Illinois limited partnership formed in May 1993. References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP. Unless otherwise indicated, the notes to consolidated financial statements apply to both the Company and the Operating Partnership.

EQR is the general partner of, and as of December 31, 2018 owned an approximate 96.4% ownership interest in, ERPOP. All of the Company’s property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR issues public equity from time to time, the net proceeds of which it is obligated to contribute to ERPOP, but does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company’s ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity.

As of December 31, 2018, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 307 properties located in 11 states and the District of Columbia consisting of 79,482 apartment units. The ownership breakdown includes (table does not include various uncompleted development properties):

PropertiesApartment Units
Wholly Owned Properties28774,840
Master-Leased Property – Consolidated1162
Partially Owned Properties – Consolidated173,535
Partially Owned Properties – Unconsolidated2945
30779,482

Note: Effective February 1, 2018 and April 2, 2018, the Company took over management of two of its Master-Leased properties containing 94 apartment units and 597 apartment units located in Boston and Los Angeles, respectively.

The “Wholly Owned Properties” are accounted for under the consolidation method of accounting. The “Master-Leased Property – Consolidated” is wholly owned by the Company but the entire project is leased to a third party corporate housing provider. This property is consolidated and reflected as a real estate asset while the master lease is accounted for as an operating lease. 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 and qualify as variable interest entities. The “Partially Owned Properties – Unconsolidated” are controlled by the Company’s partners but the Company has noncontrolling interests and are accounted for under the equity method of accounting.

The Company maintains long-term ground leases for 14 operating properties. The Company owns the building and improvements and leases the land underlying the improvements under long-term ground leases. The expiration dates for these leases range from 2042 through 2113. These properties are consolidated and reflected as real estate assets while the ground leases are accounted for as operating leases. See Note 2 for additional discussion regarding the new leases standard.

2.Summary of Significant Accounting Policies

Basis of Presentation

Due to the Company’s ability as general partner to control either through ownership or by contract the Operating Partnership and its subsidiaries, the Operating Partnership and each such subsidiary has been consolidated with the Company for financial reporting purposes, except for our unconsolidated properties/entities.

F-24

Real Estate Assets and Depreciation of Investment in Real Estate

Effective January 1, 2017 with the adoption of the new standard which clarified the definition of a business (discussed below in Recently Adopted Accounting Pronouncements), the Company expects that substantially all of its transactions will be accounted for as asset acquisitions. In an asset acquisition, the Company is required to capitalize transaction costs and allocate the purchase price on a relative fair value basis. For the year ended December 31, 2018, all acquisitions were considered asset acquisitions.

For asset acquisitions, the Company allocates the purchase price of the net tangible and identified intangible assets on a relative fair value basis. In making estimates of relative 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 relative fair value of the tangible and intangible assets/liabilities acquired. The Company allocates the purchase price of acquired real estate to various components as follows:

•Land – Based on actual purchase price adjusted to an allocation of the relative fair value (as necessary) if acquired separately or market research/comparables if acquired with an operating property.
•Furniture, Fixtures and Equipment – Ranges between $10,000 and $35,000 per apartment unit acquired as an estimate of the allocation of the relative fair value of the appliances and fixtures inside an apartment unit. The per-apartment unit amount applied depends on the economic age of the apartment building acquired. Depreciation is calculated on the straight-line method over an estimated useful life of five to ten years.
•Lease Intangibles – The Company considers the value of acquired in-place leases and above/below market leases and the amortization period is the average remaining term of each respective acquired lease. In-place residential leases’ average term at acquisition approximates six months. In-place retail leases’ term at acquisition approximates the average remaining term of all acquired retail leases. See Note 4 for more information on above and below market leases.
•Other Intangible Assets – The Company considers whether it has acquired other intangible assets, including any customer relationship intangibles and the amortization period is the estimated useful life of the acquired intangible asset.
•Building – Based on the allocation of the relative fair value determined on an “as-if vacant” basis. Depreciation is calculated on the straight-line method over an estimated useful life of thirty years.
•Site Improvements – Based on replacement cost, which approximates the allocation of the relative fair value. Depreciation is calculated on the straight-line method over an estimated useful life of eight years.
•Long-Term Debt – The Company calculates the allocation of the relative fair value by discounting the remaining contractual cash flows on each instrument at the current market rate for those borrowings.

Replacements inside an apartment unit such as appliances and carpeting are depreciated over an estimated useful life of five to ten years. Renovation 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 fifteen 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 control 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 sale when it is probable a property will be disposed of (see below for further discussion).

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 certificates of occupancy permits have been obtained.

F-25

Impairment of Long-Lived Assets

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

•For long-lived operating assets to be held and used, the Company compares the expected future undiscounted cash flows for the long-lived asset against the carrying amount of that asset. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the asset, the Company would record an impairment loss for the difference between the estimated fair value and the carrying amount of the asset.
•For long-lived non-operating assets (projects under development and land held for development), management evaluates major cost overruns, market conditions that could affect lease-up projections, intent and ability to hold the asset and any other indicators of impairment. If any of the indicators were to suggest impairment was present, the carrying value of the asset would be adjusted accordingly to fair value.
•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 sale 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 sale.

Cost Capitalization

See the Real Estate Assets and Depreciation of Investment in Real Estate section for a discussion of the Company’s policy with respect to capitalization vs. expensing of fixed asset/repair and maintenance costs. In addition, the Company capitalizes an allocation of the payroll and associated costs of employees directly responsible for and who spend their time on the execution and supervision of major capital and/or renovation projects. These costs are reflected on the balance sheets as increases to depreciable property.

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

During the years ended December 31, 2018, 2017 and 2016, the Company capitalized $13.2 million, $14.7 million and $18.7 million, respectively, of payroll and associated costs of employees directly responsible for and who spend their time on the execution and supervision of development activities as well as major capital and/or renovation projects.

Cash and Cash Equivalents

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

F-26

Fair Value of Financial Instruments, Including Derivative Instruments

The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, where possible, bases the fair values of its financial instruments, including its derivative instruments, on listed market prices and third party quotes. Where these are not available, the Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.

In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company seeks to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments. The Company may also use derivatives to manage commodity prices in the daily operations of the business.

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

The Company recognizes all derivatives as either assets or liabilities in the consolidated balance sheets and measures those instruments at fair value. In addition, fair value adjustments will affect either shareholders’ equity/partners’ capital or net income depending on whether the derivative instruments qualify as a hedge for accounting purposes and, if so, the nature of the hedging activity. When the terms of an underlying transaction are modified, or when the underlying transaction is terminated or completed, all changes in the fair value of the instrument are marked-to-market with changes in value included in net income each period until the instrument matures. Any derivative instrument used for risk management that does not meet the hedging criteria is marked-to-market each period. The Company does not use derivatives for trading or speculative purposes.

Revenue Recognition

Rental income attributable to residential leases is recorded on a straight-line basis, which is not materially different than if it were recorded when due from residents and recognized monthly as it was earned. Leases entered into between a resident and a property for the rental of an apartment unit are generally year-to-year, renewable upon consent of both parties on an annual or monthly basis. Rental income attributable to retail/commercial leases is also recorded on a straight-line basis. Retail/commercial leases generally have five to ten year lease terms with market based renewal options. Fee and asset management revenue and interest income are recorded on an accrual basis.

Share-Based Compensation

The Company expenses share-based compensation such as restricted shares, restricted units and share options. Any common share of beneficial interest, $0.01 par value per share (the “Common Shares”) issued pursuant to EQR’s incentive equity compensation and employee share purchase plans will result in ERPOP issuing units of partnership interest (“OP Units”) to EQR on a one-for-one basis, with ERPOP receiving the net cash proceeds of such issuances. See Note 12 for further discussion.

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

201820172016
Expected volatility (1)14.8%15.3%26.3%
Expected life (2)5 years5 years5 years
Expected dividend yield (3)3.09%3.08%3.04%
Risk-free interest rate (4)2.52%1.93%1.27%
Option valuation per share$6.15$5.86$13.02
(1)Expected volatility – For the 2018 and 2017 grants, estimated based on the historical five-year volatility (the period matching the expected life) of EQR’s share price measured on a monthly basis. For the 2016 grant, estimated based on the historical ten-year volatility of EQR’s share price measured on a monthly basis. This change in estimate reflects the Company’s belief that the historical five-year period provides a better estimate of the expected volatility in EQR shares over the expected life of the options.
(2)Expected life – Approximates the actual weighted average life of all share options granted since the Company went public in 1993.
(3)Expected dividend yield – Calculated by averaging the historical annual yield on EQR shares for a period matching the expected life of each grant, with the annual yield calculated by dividing actual regular dividends (excluding any special 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.

F-27

The valuation method and assumptions are the same as those the Company used in accounting for option expense in its consolidated financial statements. The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. This model is only one method of valuing options. Because the Company’s share options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, the actual value of the options to the recipient may be significantly different.

Income and Other Taxes

Due to the structure of EQR as a REIT and the nature of the operations of its operating properties, no provision for federal income taxes has been made at the EQR level. In addition, ERPOP generally is not liable for federal income taxes as the partners recognize their proportionate share of income or loss in their tax returns; therefore no provision for federal income taxes has been made at the ERPOP level. Historically, the Company has generally only incurred certain state and local income, excise and franchise taxes. The Company has elected taxable REIT subsidiary (“TRS”) status for certain of its corporate subsidiaries and as a result, these entities will incur both federal and state income taxes on any taxable income of such entities after consideration of any net operating losses.

Deferred tax assets and liabilities were recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases in the comparable periods. These assets and liabilities were measured using enacted tax rates for which the temporary differences were expected to be recovered or settled. The effects of changes in tax rates on deferred tax assets and liabilities were recognized in earnings in the period enacted. The Company’s deferred tax assets were generally the result of tax affected suspended interest deductions, net operating losses, differing depreciable lives on capitalized assets and the timing of expense recognition for certain accrued liabilities. The Company elected REIT status for its primary TRS upon filing the 2016 tax return in the third quarter of 2017, with the election retroactive to January 1, 2016. As a result, the Company wrote-off its deferred tax assets, which were fully reserved, in the third quarter of 2017.

In December 2017, the President signed into law H.R. 1, informally titled the Tax Cuts and Jobs Act (the “Tax Act”). As of December 31, 2018, the Tax Act did not have a material impact on our REIT or subsidiary entities, our ability to continue to qualify as a REIT or on our results of operations.

The Company provided for income, franchise and excise taxes allocated as follows in the consolidated statements of operations and comprehensive income for the years ended December 31, 2018, 2017 and 2016 (amounts in thousands):

Year Ended December 31,
201820172016
Income and other tax expense (benefit) (1)$878$478$1,613
Discontinued operations, net (2)——12
Provision for income, franchise and excise taxes (3)$878$478$1,625
(1)Primarily includes state and local income, excise and franchise taxes.
(2)Primarily represents state and local income, excise and franchise taxes on operating properties sold prior to January 1, 2014 and included in discontinued operations. The amounts included in discontinued operations for the year ended December 31, 2016 represent trailing activity for properties sold in 2013 and prior years. None of the properties sold during the years ended December 31, 2018, 2017 and 2016 met the criteria for reporting discontinued operations.
(3)All provisions for income tax amounts are current and none are deferred.

During the years ended December 31, 2018, 2017 and 2016, the Company’s tax treatment of dividends and distributions were as follows (unaudited):

Year Ended December 31,
2018 (1)2017 (2)2016
Tax treatment of dividends and distributions:
Ordinary dividends$1.84454$1.22126$0.722
Long-term capital gain0.214230.189599.176
Unrecaptured section 1250 gain0.064980.100403.117
Dividends and distributions per
Common Share/Unit outstanding$2.12375$1.51125$13.015

F-28

(1)The Company’s fourth quarter 2018 dividends and distributions of $0.54 per Common Share/Unit outstanding will be included as taxable income in calendar year 2019.
(2)The Company’s fourth quarter 2017 dividends and distributions of $0.50375 per Common Share/Unit outstanding will be included as taxable income in calendar year 2018.

The unaudited cost of land and depreciable property, net of accumulated depreciation, for federal income tax purposes as of December 31, 2018 and 2017 was approximately $14.0 billion and $14.8 billion, respectively.

Noncontrolling Interests

A noncontrolling interest in a subsidiary (minority interest) is 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 and comprehensive income. See Note 3 for further discussion.

Operating Partnership: Net income is allocated to noncontrolling interests based on their respective ownership percentage of the Operating Partnership. The ownership percentage is calculated by dividing the number of OP Units held by the noncontrolling interests by the total OP Units held by the noncontrolling interests and EQR. Issuance of additional Common Shares and OP Units changes the ownership interests of both the noncontrolling interests and EQR. Such transactions and the related proceeds are treated as capital transactions.

Partially Owned Properties: The Company reflects noncontrolling interests in partially owned properties on the balance sheet for the portion of properties consolidated by the Company that are not wholly owned by the Company. The earnings or losses from those properties attributable to the noncontrolling interests are generally based on ownership percentage and are reflected as noncontrolling interests in partially owned properties in the consolidated statements of operations and comprehensive income.

Partners’ Capital

The “Limited Partners” of ERPOP include various individuals and entities that contributed their properties to ERPOP in exchange for OP Units. The “General Partner” of ERPOP is EQR. Net income is allocated to the Limited Partners based on their respective ownership percentage of ERPOP. The ownership percentage is calculated by dividing the number of OP Units held by the Limited Partners by the total OP Units held by the Limited Partners and the General Partner. Issuance of additional Common Shares and OP Units changes the ownership interests of both the Limited Partners and EQR. Such transactions and the related proceeds are treated as capital transactions.

Redeemable Noncontrolling Interests – Operating Partnership / Redeemable Limited Partners

The Company classifies Redeemable Noncontrolling Interests – Operating Partnership / Redeemable Limited Partners in the mezzanine section of the consolidated balance sheets for the portion of OP Units that EQR is required, either by contract or securities law, to deliver registered Common Shares to the exchanging OP Unit holder. The redeemable noncontrolling interest units / redeemable limited partner units are adjusted to the greater of carrying value or fair market value based on the Common Share price of EQR at the end of each respective reporting period. See Note 3 for further discussion.

Use of Estimates

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

Reclassifications

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

F-29

Recently Issued Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued a new leases standard which sets out principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessors and lessees). The new standard requires the following:

•Lessors – Leases are accounted for using an approach that is substantially equivalent to existing guidance for operating, sales-type and financing leases, but aligned with the new revenue recognition standard. Lessors are required to allocate lease payments to separate lease and non-lease components of each lease agreement, with the non-lease components evaluated under the new revenue recognition standard.
•Lessees – Leases are accounted for using a dual approach, classifying leases as either operating or finance based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification determines whether the lease expense is recognized on a straight-line basis over the term of the lease (for operating leases) or based on an effective interest method (for finance leases). A lessee is also required to record a right-of-use asset and a lease liability on its balance sheet for all leases with a term of greater than 12 months regardless of their classification as operating or finance leases. Leases with a term of 12 months or less are accounted for similar to existing guidance for operating leases.

The new standard was effective for the Company effective January 1, 2019. The new standard was adopted using a modified retrospective method and the Company applied the new guidance as of the adoption date and elected certain practical expedients as described below.

The Company is the lessor for its residential and retail/commercial leases and these leases will continue to be accounted for as operating leases under the new standard. Therefore, the Company did not have significant changes in the accounting for its lease revenues.

The Company is the lessee under various corporate office and ground leases, which will be recognized as right of use assets and related lease liabilities on its consolidated balance sheets in the first quarter of 2019. The Company’s corporate office leases where it is the lessee will continue to be accounted for as operating leases under the new standard. Based on its election of the practical expedients, the Company was not required to reassess the classification of existing ground leases and therefore these leases will continue to be accounted for as operating leases. However, in the event we materially modify existing ground leases and/or enter into new ground leases after adoption of the new standard, such leases will likely be classified as finance leases. The Company will record right of use assets and related lease liabilities to its opening balance sheet upon adoption of the new standard on January 1, 2019 that will approximate $300.0 million. The Company has determined the approximate discount rate ranges of 3.3% to 3.9% for corporate office leases and 4.4% to 5.5% for ground leases. The discount rates were determined using the Company’s borrowing rates (actual pricing through 30 years and other long-term market rates).

In July 2018, the FASB issued an amendment to the new leases standard, which includes a practical expedient that provides lessors an option not to separate lease and non-lease components when certain criteria are met and instead account for those components as a single component under the new leases standard. The amendment also provides a transition option that permits the application of the new guidance as of the adoption date rather than to all periods presented. The Company elected the practical expedient to account for both its lease and non-lease components as a single component under the leases standard and elected the new transition option as of the date of adoption effective January 1, 2019.

In June 2016, the FASB issued a new standard which requires companies to adopt a new approach for estimating credit losses on certain types of financial instruments, such as trade and other receivables and loans. The standard requires entities to estimate a lifetime expected credit loss for most financial instruments, including trade receivables. In November 2018, the FASB issued an amendment excluding operating lease receivables accounted for under the new leases standard from the scope of the new credit losses standard. The new standard will be effective for the Company beginning on January 1, 2020, with early adoption permitted beginning January 1, 2019. The Company is currently evaluating the impact of adopting the new standard on its consolidated results of operations and financial position.

In August 2017, the FASB issued a final standard which makes changes to the hedge accounting model to enable entities to better portray their risk management activities in the financial statements. The new standard expands an entity’s ability to hedge nonfinancial and financial risk components, reduces complexity in fair value hedges of interest rate risk and eases certain documentation and assessment requirements. The new standard also eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of any hedging instrument to be presented in the same income statement line as the hedged instrument. The Company adopted this new standard as required effective January 1, 2019 and it did not have a material effect on its consolidated results of operations or financial position.

F-30

Recently Adopted Accounting Pronouncements

In May 2014, the FASB issued a comprehensive new revenue recognition standard entitled Revenue from Contracts with Customers that superseded nearly all existing revenue recognition guidance. The new standard specifically excludes lease revenue. The new standard’s core principle is that a company recognizes revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Companies will likely need to use more judgment and make more estimates than under previous revenue recognition guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration, if any, to include in the transaction price and allocating the transaction price to each separate performance obligation. The new standard may be applied retrospectively to each prior period presented or prospectively with the cumulative effect, if any, recognized as of the date of adoption. The Company selected the modified retrospective transition method as of the date of adoption as required effective January 1, 2018. Approximately 94% of rental income consists of revenue from leasing arrangements, which is specifically excluded from the standard (included as leasing revenue in the table below). The Company analyzed its remaining revenue streams, inclusive of fee and asset management and gains and losses on sales, and concluded these revenue streams have the same timing and pattern of revenue recognition under the new guidance, and therefore the Company had no changes in revenue recognition with the adoption of the new standard. As such, adoption of the standard did not result in a cumulative adjustment recognized as of January 1, 2018, and the standard did not have a material impact on the Company’s consolidated financial position, results of operations, equity/capital or cash flows.

For the remaining approximately 6% of rental income that is subject to the new revenue recognition standard, the Company’s disaggregated revenue streams are disclosed in the table below for the year ended December 31, 2018. These revenue streams have the same timing and pattern of revenue recognition across our reportable segments, with consistent allocations between the leasing and revenue recognition standards. The revenue streams and percentages are comparable with the percentage of rental income for the years ended December 31, 2017 and 2016.

The following table presents the disaggregation of revenue streams of our rental income for the year ended December 31, 2018 (amounts in thousands):

Year Ended December 31, 2018
Revenue StreamApplicable StandardAmount of Rental IncomePercentage of Rental Income
Leasing revenueLeases$2,418,16893.8%
Utility recoveries (“RUBS”)Revenue Recognition63,2182.5%
Parking revenueRevenue Recognition26,7431.0%
Other revenueRevenue Recognition69,5522.7%
Rental income$2,577,681100.0%

Additionally, as part of the new revenue recognition standard, the FASB issued amendments related to partial sales of real estate. Adoption of the new partial sales standard did not result in a change of accounting for the Company related to its disposition process. We concluded that the Company’s typical dispositions will continue to meet the criteria for sale and associated profit recognition under both new standards.

In January 2016, the FASB issued a new standard which requires companies to measure all equity securities with readily determinable fair values at fair value on the balance sheet, with changes in fair value recognized in net income. The Company adopted this new standard as required effective January 1, 2018 and it did not have a material effect on its consolidated results of operations or financial position.

In August 2016 and October 2016, the FASB issued new standards to clarify how specific transactions are classified and presented on the statement of cash flows. Among other clarifications, the new standards specifically provide guidance for the following items within the statement of cash flows which have required significant judgment in the past:

•Cash payments related to debt prepayments or extinguishment costs are to be classified within financing activities;
•The portion of the cash payment made to settle a zero-coupon bond or a bond with an insignificant cash coupon attributable to accreted interest related to a debt discount is to be classified as a cash outflow within operating activities, and the portion attributable to the principal is to be classified within financing activities;
•Insurance settlement proceeds are to be classified based on the nature of the loss;
•Companies must elect to classify distributions received from equity method investees using either a cumulative earnings approach or a look-through approach and the election must be disclosed; and

F-31

•Restricted cash will be included with cash and cash equivalents on the statement of cash flows. Total cash and cash equivalents and restricted cash are to be reconciled to the related line items on the balance sheet.

The new standards were applied retrospectively to all periods presented in the consolidated financial statements. The Company adopted the standard in the fourth quarter of 2017 and continued to apply the look-through approach for distributions received from equity method investees. While overall cash flows did not change, there were changes between cash flow classifications due primarily to the debt prepayment penalties that the Company had incurred in comparative periods.

In January 2017, the FASB issued a new standard which clarified the definition of a business. The standard added additional guidance that assists companies in determining whether transactions should be accounted for as an asset acquisition or a business combination. The new standard first requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set is not a business. If this threshold is not met, the entity next evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. Among other differences, transaction costs associated with asset acquisitions are capitalized while those associated with business combinations are expensed as incurred. In addition, purchase price in an asset acquisition is allocated on a relative fair value basis while in a business combination it is generally measured at fair value. The new standard is applied prospectively to any transactions occurring within the period of adoption. The Company early adopted the new standard as allowed effective January 1, 2017. The Company anticipates that substantially all of its transactions will now be accounted for as asset acquisitions, which means transaction costs will largely be capitalized as noted above.

Other

The Company is the controlling partner in various consolidated partnerships owning 17 properties consisting of 3,535 apartment units having a noncontrolling interest deficit balance of $2.3 million at December 31, 2018. The Company is required to make certain disclosures regarding noncontrolling interests in consolidated limited-life subsidiaries. Of the consolidated entities described above, the Company is the controlling partner in limited-life partnerships owning four properties having a noncontrolling interest deficit balance of $9.6 million. These four 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, 2018 the Company estimates the value of Noncontrolling Interest distributions for these four properties would have been approximately $70.4 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 four 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, 2018 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.

F-32

3.Equity, Capital and Other Interests

Equity and Redeemable Noncontrolling Interests of Equity Residential

The following tables present the changes in the Company’s issued and outstanding Common Shares and “Units” (which includes OP Units and restricted units) for the years ended December 31, 2018, 2017 and 2016:

201820172016
Common Shares
Common Shares outstanding at January 1,368,018,082365,870,924364,755,444
Common Shares Issued:
Conversion of OP Units131,4771,149,28488,838
Exercise of share options1,056,388846,137815,044
Employee Share Purchase Plan (ESPP)75,41468,28663,909
Restricted share grants, net123,80083,451147,689
Common Shares outstanding at December 31,369,405,161368,018,082365,870,924
Units
Units outstanding at January 1,13,768,43814,626,07514,427,164
Restricted unit grants, net267,074291,647287,749
Conversion of OP Units to Common Shares(131,477)(1,149,284)(88,838)
Units outstanding at December 31,13,904,03513,768,43814,626,075
Total Common Shares and Units outstanding at December 31,383,309,196381,786,520380,496,999
Units Ownership Interest in Operating Partnership3.6%3.6%3.8%

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 restricted units, are collectively referred to as the “Noncontrolling Interests – Operating Partnership”. Subject to certain exceptions (including the “book-up” requirements of restricted units), the Noncontrolling Interests – Operating Partnership may exchange their Units with EQR for Common Shares on a one-for-one basis. The carrying value of the Noncontrolling Interests – Operating Partnership (including redeemable interests) is allocated based on the number of Noncontrolling Interests – Operating Partnership Units in total in proportion to the number of Noncontrolling Interests – Operating Partnership Units in total plus the number of Common Shares. Net income is allocated to the Noncontrolling Interests – Operating Partnership based on the weighted average ownership percentage during the period.

The Operating Partnership has the right but not the obligation to make a cash payment instead of issuing Common Shares to any and all holders of Noncontrolling Interests – Operating Partnership Units requesting an exchange of their OP Units with EQR. Once the Operating Partnership elects not to redeem the Noncontrolling Interests – Operating Partnership Units for cash, EQR is obligated to deliver Common Shares to the exchanging holder of the Noncontrolling Interests – Operating Partnership Units.

The Noncontrolling Interests – Operating Partnership Units are classified as either mezzanine equity or permanent equity. If EQR is required, either by contract or securities law, to deliver registered Common Shares, such Noncontrolling Interests – Operating Partnership are differentiated and referred to as “Redeemable Noncontrolling Interests – Operating Partnership”. Instruments that require settlement in registered shares cannot 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 Common Shares for the remaining portion of the Noncontrolling Interests – Operating Partnership Units that are classified in permanent equity at December 31, 2018 and 2017.

F-33

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, 2018, the Redeemable Noncontrolling Interests – Operating Partnership have a redemption value of approximately $379.1 million, which represents the value of Common Shares that would be issued in exchange for the Redeemable Noncontrolling Interests – Operating Partnership Units.

The following table presents the changes in the redemption value of the Redeemable Noncontrolling Interests – Operating Partnership for the years ended December 31, 2018, 2017 and 2016, respectively (amounts in thousands):

201820172016
Balance at January 1,$366,955$442,092$566,783
Change in market value13,922(41,916)(115,093)
Change in carrying value(1,771)(33,221)(9,598)
Balance at December 31,$379,106$366,955$442,092

Net proceeds from EQR Common Share and Preferred Share (see definition below) offerings are contributed by EQR to ERPOP. In return for those contributions, EQR receives a number of OP Units in ERPOP equal to the number of Common Shares it has issued in the equity offering (or in the case of a preferred equity offering, a number of preference units in ERPOP equal in number and having the same terms as the Preferred Shares issued in the equity offering). As a result, the net offering proceeds from Common Shares and Preferred Shares are allocated between shareholders’ equity and Noncontrolling Interests – Operating Partnership to account for the change in their respective percentage ownership of the underlying equity of ERPOP.

The Company’s declaration of trust authorizes it to issue up to 100,000,000 preferred shares of beneficial interest, $0.01 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, 2018 and 2017:

Amounts in thousands
Annual
CallDividend PerDecember 31,December 31,
Date (1)Share (2)20182017
Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized:
8.29% Series K Cumulative Redeemable Preferred; liquidation value $50 per share; 745,600 shares issued and outstanding as of December 31, 2018 and 201712/10/26$4.145$37,280$37,280
$37,280$37,280
(1)On or after the call date, redeemable preferred shares may be redeemed for cash at the option of the Company, in whole or in part, at a redemption price equal to the liquidation price per share, plus accrued and unpaid distributions, if any.
(2)Dividends on Preferred Shares are payable quarterly.

F-34

Capital and Redeemable Limited Partners of ERP Operating Limited Partnership

The following tables present the changes in the Operating Partnership’s issued and outstanding Units and in the limited partners’ Units for the years ended December 31, 2018, 2017 and 2016:

201820172016
General and Limited Partner Units
General and Limited Partner Units outstanding at January 1,381,786,520380,496,999379,182,608
Issued to General Partner:
Exercise of EQR share options1,056,388846,137815,044
EQR’s Employee Share Purchase Plan (ESPP)75,41468,28663,909
EQR’s restricted share grants, net123,80083,451147,689
Issued to Limited Partners:
Restricted unit grants, net267,074291,647287,749
General and Limited Partner Units outstanding at December 31,383,309,196381,786,520380,496,999
Limited Partner Units
Limited Partner Units outstanding at January 1,13,768,43814,626,07514,427,164
Limited Partner restricted unit grants, net267,074291,647287,749
Conversion of Limited Partner OP Units to EQR Common Shares(131,477)(1,149,284)(88,838)
Limited Partner Units outstanding at December 31,13,904,03513,768,43814,626,075
Limited Partner Units Ownership Interest in Operating Partnership3.6%3.6%3.8%

The Limited Partners of the Operating Partnership as of December 31, 2018 include various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units, as well as the equity positions of the holders of restricted units. Subject to certain exceptions (including the “book-up” requirements of restricted units), Limited Partners may exchange their Units with EQR for Common Shares on a one-for-one basis. The carrying value of the Limited Partner Units (including redeemable interests) is allocated based on the number of Limited Partner Units in total in proportion to the number of Limited Partner Units in total plus the number of General Partner Units. Net income is allocated to the Limited Partner Units based on the weighted average ownership percentage during the period.

The Operating Partnership has the right but not the obligation to make a cash payment instead of issuing Common Shares to any and all holders of Limited Partner Units requesting an exchange of their OP Units with EQR. Once the Operating Partnership elects not to redeem the Limited Partner Units for cash, EQR is obligated to deliver Common Shares to the exchanging limited partner.

The Limited Partner Units are classified as either mezzanine equity or permanent equity. If EQR is required, either by contract or securities law, to deliver registered Common Shares, such Limited Partner Units are differentiated and referred to as “Redeemable Limited Partner Units”. Instruments that require settlement in registered shares cannot be classified in permanent equity as it is not always completely within an issuer’s control to deliver registered shares. Therefore, settlement in cash is assumed and that responsibility for settlement in cash is deemed to fall to the Operating Partnership as the primary source of cash for EQR, resulting in presentation in the mezzanine section of the balance sheet. The Redeemable Limited Partner Units are adjusted to the greater of carrying value or fair market value based on the Common Share price of EQR at the end of each respective reporting period. EQR has the ability to deliver unregistered Common Shares for the remaining portion of the Limited Partner Units that are classified in permanent equity at December 31, 2018 and 2017.

The carrying value of the Redeemable Limited Partner Units is allocated based on the number of Redeemable Limited Partner Units in proportion to the number of Limited Partner Units in total. Such percentage of the total carrying value of Limited Partner Units which is ascribed to the Redeemable Limited Partner Units is then adjusted to the greater of carrying value or fair market value as described above. As of December 31, 2018, the Redeemable Limited Partner Units have a redemption value of approximately $379.1 million, which represents the value of Common Shares that would be issued in exchange for the Redeemable Limited Partner Units.

The following table presents the changes in the redemption value of the Redeemable Limited Partners for the years ended December 31, 2018, 2017 and 2016, respectively (amounts in thousands):

201820172016
Balance at January 1,$366,955$442,092$566,783
Change in market value13,922(41,916)(115,093)
Change in carrying value(1,771)(33,221)(9,598)
Balance at December 31,$379,106$366,955$442,092

F-35

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

The following table presents the Operating Partnership’s issued and outstanding “Preference Units” as of December 31, 2018 and 2017:

Amounts in thousands
Annual
CallDividend PerDecember 31,December 31,
Date (1)Unit (2)20182017
Preference Units:
8.29% Series K Cumulative Redeemable Preference Units; liquidation value $50 per unit; 745,600 units issued and outstanding as of December 31, 2018 and 201712/10/26$4.145$37,280$37,280
$37,280$37,280
(1)On or after the call date, redeemable preference units may be redeemed for cash at the option of the Operating Partnership, in whole or in part, at a redemption price equal to the liquidation price per unit, plus accrued and unpaid distributions, if any, in conjunction with the concurrent redemption of the corresponding Company Preferred Shares.
(2)Dividends on Preference Units are payable quarterly.

Other

EQR and ERPOP currently have an active universal shelf registration statement for the issuance of equity and debt securities that automatically became effective upon filing with the SEC on June 28, 2016 and expires on June 28, 2019. Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of ERPOP in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis) or preference units (on a one-for-one preferred share per preference unit basis).

In September 2009, the Company announced the establishment of an At-The-Market (“ATM”) share offering program which would allow EQR to sell Common Shares from time to time into the existing trading market at current market prices as well as through negotiated transactions. Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds from all equity offerings to the capital of ERPOP in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis). The program currently has a maturity of June 28, 2019. EQR has the authority to issue 13.0 million shares but has not issued any shares under this program since September 2012.

The Company may repurchase up to 13.0 million Common Shares under its share repurchase program. No open market repurchases have occurred since 2008 and no repurchases of any kind have occurred since February 2014. As of December 31, 2018, EQR has remaining authorization to repurchase up to 13.0 million of its shares under the repurchase program.

F-36

  1. Real Estate and Lease Intangibles

The following table summarizes the carrying amounts for the Company’s investment in real estate (at cost) as of December 31, 2018 and 2017 (amounts in thousands):

20182017
Land$5,875,803$5,996,024
Depreciable property:
Buildings and improvements18,232,62517,743,042
Furniture, fixtures and equipment1,722,2311,548,961
In-Place lease intangibles481,045476,359
Projects under development:
Land25,42943,226
Construction-in-progress83,980120,321
Land held for development:
Land61,03862,538
Construction-in-progress28,87136,425
Investment in real estate26,511,02226,026,896
Accumulated depreciation(6,696,281)(6,040,378)
Investment in real estate, net$19,814,741$19,986,518

The following table summarizes the carrying amounts for the Company’s above and below market ground and retail lease intangibles as of December 31, 2018 and 2017 (amounts in thousands):

DescriptionBalance Sheet Location20182017
Assets
Ground lease intangibles – below marketOther Assets$191,918$191,918
Retail lease intangibles – above marketOther Assets1,2601,260
Lease intangible assets193,178193,178
Accumulated amortization(26,947)(22,434)
Lease intangible assets, net$166,231$170,744
Liabilities
Ground lease intangibles – above marketOther Liabilities$2,400$2,400
Retail lease intangibles – below marketOther Liabilities1,7105,270
Lease intangible liabilities4,1107,670
Accumulated amortization(1,704)(5,143)
Lease intangible liabilities, net$2,406$2,527

The following table provides a summary of the effect of the amortization for above and below market ground and retail lease intangibles on the Company’s accompanying consolidated statements of operations and comprehensive income for the years ended December 31, 2018, 2017 and 2016 (amounts in thousands):

DescriptionIncome Statement Location201820172016
Ground lease intangible amortizationProperty and Maintenance$(4,463)$(4,369)$(4,321)
Retail lease intangible amortizationRental Income71541895
Total amortization of above/below market lease intangibles$(4,392)$(3,828)$(3,426)

The following table provides a summary of the aggregate amortization for above and below market ground and retail lease intangibles for each of the next five years (amounts in thousands):

20192020202120222023
Ground lease intangibles$(4,463)$(4,463)$(4,463)$(4,463)$(4,463)
Retail lease intangibles7171712719
Total$(4,392)$(4,392)$(4,392)$(4,436)$(4,444)

F-37

Acquisitions and Dispositions

During the year ended December 31, 2018, the Company acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands):

PropertiesApartment UnitsPurchase Price
Rental Properties – Consolidated (1)51,478$707,005
Total51,478$707,005
(1)Purchase price includes an allocation of approximately $113.7 million to land and $594.4 million to depreciable property (inclusive of capitalized closing costs).

During the year ended December 31, 2017, the Company acquired the entire equity interest in the following from unaffiliated parties (purchase price in thousands):

PropertiesApartment UnitsPurchase Price
Rental Properties – Consolidated (1)4947$468,050
Total4947$468,050
(1)Purchase price includes an allocation of approximately $68.3 million to land, $386.2 million to depreciable property (inclusive of capitalized closing costs) and $13.7 million to ground lease intangible (included in other assets). For one of the property acquisitions, the Company owns the building and improvements and leases the land underlying the improvements under a long-term ground lease that expires in 2113. This property is consolidated and reflected as a real estate asset while the ground lease is accounted for as an operating lease.

During the year ended December 31, 2018, the Company disposed of the following to unaffiliated parties (sales price in thousands):

PropertiesApartment UnitsSales Price
Rental Properties – Consolidated51,292$706,120
Land Parcels (one)——2,700
Total51,292$708,820

The Company recognized a net gain on sales of real estate properties of approximately $256.8 million and a net gain on sales of land parcels of approximately $1.0 million on the above sales.

During the year ended December 31, 2017, the Company disposed of the following to unaffiliated parties (sales price in thousands):

PropertiesApartment UnitsSales Price
Rental Properties – Consolidated51,194$354,950
Land Parcels (one)——33,450
Total51,194$388,400

The Company recognized a net gain on sales of real estate properties of approximately $157.1 million and a net gain on sales of land parcels of approximately $19.2 million on the above sales.

Impairment

During the year ended December 31, 2018, the Company recorded an approximate $0.7 million non-cash asset impairment charge on a property located in the San Francisco market due to physical property damage as a result of a fire at one of the buildings at the property.

During the year ended December 31, 2017, the Company recorded an approximate $1.7 million non-cash asset impairment charge on a land parcel that was being marketed for sale, which is included in land held for development on the consolidated balance sheets and included in the non-same store/other segment discussed in Note 17. The charge was the result of an analysis of the parcel’s estimated fair value (determined using internally developed models based on market assumptions and potential sales data from the marketing process) compared to its current capitalized carrying value. The parcel now has a carrying value of $0.2 million.

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5.Commitments to Acquire/Dispose of Real Estate

The Company has not entered into any separate agreements to acquire rental properties or land parcels as of the date of this filing.

The Company has entered into separate agreements to dispose of the following (sales price in thousands):

PropertiesApartment UnitsSales Price
Rental Properties - Consolidated1266$237,500
Land Parcels (one)——1,900
Total1266$239,400

The closing 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 above. See Note 18 for discussion of the properties acquired or disposed of, if any, subsequent to December 31, 2018.

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).

Consolidated Variable Interest Entities (“VIEs”)

In accordance with accounting standards for consolidation of VIEs, the Company consolidates ERPOP on EQR’s financial statements. As the sole general partner of ERPOP, EQR has exclusive control of ERPOP’s day-to-day management. The limited partners are not able to exercise substantive kick-out or participating rights. As a result, ERPOP qualifies as a VIE. EQR has a controlling financial interest in ERPOP and, thus, is ERPOP’s primary beneficiary. EQR has the power to direct the activities of ERPOP that most significantly impact ERPOP’s economic performance as well as the obligation to absorb losses or the right to receive benefits from ERPOP that could potentially be significant to ERPOP.

The Company has various equity interests in certain joint ventures owning 17 properties containing 3,535 apartment units. The Company is the general partner or managing member of these joint ventures and is responsible for managing the operations and affairs of the joint ventures as well as making all decisions regarding the businesses of the joint ventures. The limited partners or non-managing members are not able to exercise substantive kick-out or participating rights. As a result, the joint ventures qualify as VIEs. The Company has a controlling financial interest in the VIEs and, thus, is the VIEs’ primary beneficiary. The Company has both the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance as well as the obligation to absorb losses or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. As a result, the joint ventures are required to be consolidated on the Company’s financial statements. The consolidated assets and liabilities related to the joint ventures were approximately $713.6 million and $313.9 million, respectively, at December 31, 2018 and approximately $518.9 million and $307.0 million, respectively, at December 31, 2017.

Investments in Unconsolidated Entities

The following table and information summarizes the Company’s investments in unconsolidated entities, which are accounted for under the equity method of accounting as the requirements for consolidation are not met, as of December 31, 2018 and December 31, 2017 (amounts in thousands except for ownership percentage):

December 31, 2018December 31, 2017Ownership Percentage
Investments in Unconsolidated Entities:
Wisconsin Place Developer (VIE) (1)$42,365$44,45133.3%
Operating Properties (Non-VIE) (2)10,49412,36720.0%
Other5,4901,436Varies
Investments in Unconsolidated Entities$58,349$58,254

F-39

(1)Represents an unconsolidated interest in an entity that owns the land underlying one of the consolidated joint venture properties noted above and owns and operates a related parking facility. The joint venture, as a limited partner, does not have substantive kick-out or participating rights in the entity. As a result, the entity qualifies as a VIE. The joint venture does not have a controlling financial interest in the VIE and is not the VIE’s primary beneficiary. The joint venture does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance or the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. As a result, the entity that owns the land and owns and operates the parking facility is unconsolidated and recorded using the equity method of accounting.
(2)Includes two joint ventures under separate agreements with the same partner totaling 945 apartment units.
7.Restricted Deposits

The following table presents the Company’s restricted deposits as of December 31, 2018 and 2017 (amounts in thousands):

December 31, 2018December 31, 2017
Mortgage escrow deposits:
Real estate taxes and insurance$876$845
Replacement reserves8,6418,347
Mortgage principal reserves/sinking funds9,7543,167
Other852852
Mortgage escrow deposits20,12313,211
Restricted cash:
Earnest money on pending acquisitions5,000750
Restricted deposits on real estate investments54058
Resident security and utility deposits35,65935,183
Other7,549913
Restricted cash48,74836,904
Restricted deposits$68,871$50,115
8.Debt

EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. EQR guarantees the Operating Partnership’s revolving credit facility up to the maximum amount and for the full term of the facility. Weighted average interest rates noted below for the years ended December 31, 2018 and 2017 are net of the effect of any derivative instruments.

Mortgage Notes Payable

As of December 31, 2018, the Company had outstanding mortgage debt of approximately $2.4 billion.

During the year ended December 31, 2018, the Company:

•Repaid $550.0 million of 6.08% mortgage debt held in a Fannie Mae loan pool maturing in 2020 and incurred a prepayment penalty of approximately $22.1 million;
•Repaid $500.0 million of 5.19% mortgage debt held in a Freddie Mac loan pool at par prior to the October 1, 2019 maturity date;
•Repaid $43.7 million of conventional fixed-rate mortgage loans maturing in 2018;
•Repaid $254.2 million of various tax-exempt mortgage bonds maturing in 2028 through 2042;
•Repaid $6.6 million of scheduled principal repayments on various mortgage debt; and
•Reissued $96.9 million of floating rate tax-exempt mortgage bonds which mature on April 1, 2042, remarket weekly and are guaranteed by ERPOP.

The Company recorded $3.0 million of write-offs of unamortized deferred financing costs during the year ended December 31, 2018 as additional interest expense related to debt extinguishment of mortgages. The Company also recorded $16.3 million of write-offs of net unamortized discounts during the year ended December 31, 2018 as additional interest expense related to debt extinguishment of mortgages.

As of December 31, 2018, the Company had $440.7 million of secured debt (primarily tax-exempt bonds) subject to third party credit enhancement.

F-40

As of December 31, 2018, scheduled maturities for the Company’s outstanding mortgage indebtedness were at various dates through May 28, 2061. At December 31, 2018, the interest rate range on the Company’s mortgage debt was 0.10% to 6.90%. During the year ended December 31, 2018, the weighted average interest rate on the Company’s mortgage debt was 4.15%.

The historical cost, net of accumulated depreciation, of encumbered properties was $3.2 billion and $4.4 billion at December 31, 2018 and 2017, respectively.

As of December 31, 2017, the Company had outstanding mortgage debt of approximately $3.6 billion.

During the year ended December 31, 2017, the Company:

•Repaid $300.0 million of 5.987% mortgage debt held in a Fannie Mae loan pool maturing in 2019 and incurred a prepayment penalty of approximately $10.8 million;
•Repaid $193.4 million of conventional fixed-rate mortgage loans maturing in 2017 through 2048 and incurred prepayment penalties of approximately $1.5 million; and
•Repaid $10.7 million of scheduled principal repayments on various mortgage debt.

The Company recorded $0.3 million of write-offs of unamortized deferred financing costs during the year ended December 31, 2017 as additional interest expense related to debt extinguishment of mortgages. The Company also recorded $0.7 million of write-offs of net unamortized premiums during the year ended December 31, 2017 as a reduction of interest expense related to debt extinguishment of mortgages.

As of December 31, 2017, the Company had $598.6 million of secured debt (primarily tax-exempt bonds) subject to third party credit enhancement.

As of December 31, 2017, scheduled maturities for the Company’s outstanding mortgage indebtedness were at various dates through May 28, 2061. At December 31, 2017, the interest rate range on the Company’s mortgage debt was 0.10% to 6.90%. During the year ended December 31, 2017, the weighted average interest rate on the Company’s mortgage debt was 4.33%.

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, 2018 and 2017, respectively:

December 31, 2018 (Amounts in thousands)Net Principal BalanceInterest Rate RangesWeighted Average Interest RateMaturity Date Ranges
Fixed Rate Public Notes (1)$5,485,8842.85% - 7.57%4.37%2020-2047
Floating Rate Public Notes (1)447,402(1)2.84%2019
Totals$5,933,2864.25%
December 31, 2017 (Amounts in thousands)Net Principal BalanceInterest Rate RangesWeighted Average Interest RateMaturity Date Ranges
Fixed Rate Public Notes (1)$4,591,3732.85% - 7.57%4.61%2020-2047
Floating Rate Public Notes (1)447,439(1)1.82%2019
Totals$5,038,8124.35%
(1)Fair value interest rate swaps convert the $450.0 million 2.375% notes due July 1, 2019 to a floating interest rate of 90-Day LIBOR plus 0.61%.

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, 2018 and 2017.

EQR and ERPOP currently have an active universal shelf registration statement for the issuance of equity and debt securities that automatically became effective upon filing with the SEC on June 28, 2016 and expires on June 28, 2019.

F-41

During the year ended December 31, 2018, the Company:

•Issued $500.0 million of ten-year 3.50% unsecured notes, receiving net proceeds of approximately $497.0 million before underwriting fees, hedge termination costs and other expenses, at an all-in effective interest rate of 3.61%; and
•Issued $400.0 million of ten-year 4.15% unsecured notes, receiving net proceeds of approximately $399.3 million before underwriting fees, hedge termination costs and other expenses, at an all-in effective interest rate of approximately 3.85%.

During the year ended December 31, 2017, the Company:

•Repaid $394.1 million of 5.75% unsecured notes at maturity;
•Repaid $103.9 million of 7.125% unsecured notes at maturity;
•Issued $400.0 million of ten-year 3.25% unsecured notes, receiving net proceeds of approximately $399.3 million before underwriting fees, hedge termination costs and other expenses, at an all-in effective interest rate of 3.32% after termination of four forward starting swaps in conjunction with the issuance (see Note 9 for further discussion); and
•Issued $300.0 million of thirty-year 4.00% unsecured notes, receiving net proceeds of approximately $293.2 million before underwriting fees and other expenses, at an all-in effective interest rate of 4.11%.

Line of Credit and Commercial Paper

In November 2016, the Company replaced its existing $2.5 billion facility with a $2.0 billion unsecured revolving credit facility maturing January 10, 2022. The Company has the ability to increase available borrowings by an additional $750.0 million by adding additional banks to the facility or obtaining the agreement of existing banks to increase their commitments. The interest rate on advances under the facility will generally be LIBOR plus a spread (currently 0.825%), or based on bids received from the lending group, and the Company pays an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating.

In February 2015, the Company entered into an unsecured commercial paper note program in the United States. The Company may borrow up to a maximum of $500.0 million under this program subject to market conditions. The notes will be sold under customary terms in the United States commercial paper note market and will rank pari passu with all of the Company’s other unsecured senior indebtedness. As of December 31, 2018, there was a balance of $499.2 million outstanding on the commercial paper program ($500.0 million in principal outstanding net of an unamortized discount of $0.8 million). As of December 31, 2017, there was a balance of $299.8 million outstanding on the commercial paper program ($300.0 million in principal outstanding net of an unamortized discount of $0.2 million). The notes bear interest at various floating rates with a weighted average of 2.35% and 1.41% for the years ended December 31, 2018 and 2017, respectively, and a weighted average maturity of 22 days and 18 days as of December 31, 2018 and 2017, respectively.

As of December 31, 2018, there were no borrowings outstanding under the revolving credit facility and $6.7 million was restricted/dedicated to support letters of credit. In addition, the Company limits its utilization of the facility in order to maintain liquidity to support its $500.0 million commercial paper program along with certain other obligations. As a result, the Company had approximately $1.40 billion available under the facility at December 31, 2018. During the year ended December 31, 2018, the weighted average interest rate on the revolving credit facility was 2.97%.

As of December 31, 2017, there were no borrowings outstanding under the revolving credit facility and $6.6 million was restricted/dedicated to support letters of credit. In addition, the Company limits its utilization of the facility in order to maintain liquidity to support its $500.0 million commercial paper program. As a result, the Company had approximately $1.69 billion available under the facility at December 31, 2017. During the year ended December 31, 2017, the weighted average interest rate on the revolving credit facility was 2.00%.

F-42

Other

In 2017, the Company executed a letter of credit facility with a third party financial institution which is not backed or collateralized by borrowings on the Company’s unsecured revolving credit facility. As of both December 31, 2018 and 2017, there was $9.0 million in letters of credit outstanding on this facility.

The following table provides a summary of the aggregate payments of principal on all debt for each of the next five years and thereafter as of December 31, 2018 (amounts in thousands):

YearTotal
2019$974,954
20201,129,292
2021928,106
2022266,141
20231,331,600
Thereafter4,282,668
Subtotal8,912,761
Deferred Financing Costs and Unamortized (Discount)(94,822)
Total$8,817,939
9.Derivative and Other Fair Value Instruments

The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, where possible, bases the fair values of its financial instruments, including its derivative instruments, on listed market prices and third party quotes. Where these are not available, the Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.

In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company seeks to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments. The Company may also use derivatives to manage commodity prices in the daily operations of the business.

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 applied internally by the Company that use as their inputs readily observable market parameters (such as forward yield curves and credit default swap data). Employee holdings other than Common Shares within the supplemental executive retirement plan (the “SERP”) are valued using quoted market prices for identical assets and are included in other assets and other liabilities on the consolidated balance sheets. Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners are valued using the quoted market price of Common Shares. The fair values disclosed for mortgage notes payable and unsecured debt (including its commercial paper and line of credit, if applicable) were calculated using indicative rates provided by lenders of similar loans in the case of mortgage notes payable and the private unsecured debt (including its commercial paper and line of credit, if applicable) and quoted market prices for each underlying issuance in the case of the public unsecured notes.

The fair values of the Company’s financial instruments (other than mortgage notes payable, unsecured notes, commercial paper, line of credit and derivative instruments), including cash and cash equivalents and other financial instruments, approximate their carrying or contract value. The following table provides a summary of the carrying and fair values for the Company’s mortgage notes payable and unsecured debt (including its commercial paper and line of credit, if applicable) at December 31, 2018 and 2017, respectively (amounts in thousands):

F-43

December 31, 2018December 31, 2017
Carrying ValueEstimated Fair Value (Level 2)Carrying ValueEstimated Fair Value (Level 2)
Mortgage notes payable, net$2,385,470$2,352,502$3,618,722$3,615,384
Unsecured debt, net6,432,4696,481,4265,338,5695,619,744
Total debt, net$8,817,939$8,833,928$8,957,291$9,235,128

The following table summarizes the Company’s consolidated derivative instruments at December 31, 2018 (dollar amounts are in thousands):

Fair Value Hedges (1)Forward Starting Swaps (2)
Current Notional Balance$450,000$500,000
Lowest Interest Rate2.375%2.2665%
Highest Interest Rate2.375%3.1163%
Maturity Date20192029
(1)Fair Value Hedges – Converts outstanding fixed rate unsecured notes ($450.0 million 2.375% notes due July 1, 2019) to a floating interest rate of 90-Day LIBOR plus 0.61%.
(2)Forward Starting Swaps – Designed to partially fix interest rates in advance of planned future debt issuances. These swaps have mandatory counterparty terminations in 2020 and are targeted for certain 2019 debt issuances.

The following tables provide a summary of the fair value measurements for each major category of assets and liabilities measured at fair value on a recurring basis and the location within the accompanying consolidated balance sheets at December 31, 2018 and 2017, respectively (amounts in thousands):

Fair Value Measurements at Reporting Date Using
DescriptionBalance Sheet Location12/31/2018Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Assets
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Forward Starting SwapsOther Assets$2,000$—$2,000$—
Supplemental Executive Retirement PlanOther Assets134,088134,088——
Total$136,088$134,088$2,000$—
Liabilities
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Fair Value HedgesOther Liabilities$2,277$—$2,277$—
Forward Starting SwapsOther Liabilities9,851—9,851—
Supplemental Executive Retirement PlanOther Liabilities134,088134,088——
Total$146,216$134,088$12,128$—
Redeemable Noncontrolling Interests –
Operating Partnership/Redeemable
Limited PartnersMezzanine$379,106$—$379,106$—

F-44

Fair Value Measurements at Reporting Date Using
DescriptionBalance Sheet Location12/31/2017Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Assets
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Forward Starting SwapsOther Assets$5,143$—$5,143$—
Supplemental Executive Retirement PlanOther Assets140,159140,159——
Total$145,302$140,159$5,143$—
Liabilities
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Fair Value HedgesOther Liabilities$1,597$—$1,597$—
Supplemental Executive Retirement PlanOther Liabilities140,159140,159——
Total$141,756$140,159$1,597$—
Redeemable Noncontrolling Interests –
Operating Partnership/Redeemable
Limited PartnersMezzanine$366,955$—$366,955$—

The following tables provide a summary of the effect of fair value hedges on the Company’s accompanying consolidated statements of operations and comprehensive income for the years ended December 31, 2018, 2017 and 2016, respectively (amounts in thousands):

December 31, 2018 Type of Fair Value HedgeLocation of Gain/(Loss) Recognized in Income on DerivativeAmount of Gain/(Loss) Recognized in Income on DerivativeHedged ItemIncome Statement Location of Hedged Item Gain/(Loss)Amount of Gain/(Loss) Recognized in Income on Hedged Item
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Interest Rate SwapsInterest expense$(680)Fixed rate debtInterest expense$680
Total$(680)$680
December 31, 2017 Type of Fair Value HedgeLocation of Gain/(Loss) Recognized in Income on DerivativeAmount of Gain/(Loss) Recognized in Income on DerivativeHedged ItemIncome Statement Location of Hedged Item Gain/(Loss)Amount of Gain/(Loss) Recognized in Income on Hedged Item
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Interest Rate SwapsInterest expense$(3,454)Fixed rate debtInterest expense$3,454
Total$(3,454)$3,454
December 31, 2016 Type of Fair Value HedgeLocation of Gain/(Loss) Recognized in Income on DerivativeAmount of Gain/(Loss) Recognized in Income on DerivativeHedged ItemIncome Statement Location of Hedged Item Gain/(Loss)Amount of Gain/(Loss) Recognized in Income on Hedged Item
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Interest Rate SwapsInterest expense$(1,798)Fixed rate debtInterest expense$1,798
Total$(1,798)$1,798

F-45

The following tables provide a summary of the effect of cash flow hedges on the Company’s accompanying consolidated statements of operations and comprehensive income for the years ended December 31, 2018, 2017 and 2016, respectively (amounts in thousands):

Effective PortionIneffective Portion
December 31, 2018 Type of Cash Flow HedgeAmount of Gain/(Loss) Recognized in OCI on DerivativeLocation of Gain/(Loss) Reclassified from Accumulated OCI into IncomeAmount of Gain/(Loss) Reclassified from Accumulated OCI into IncomeLocation of Gain/(Loss) Recognized in Income on DerivativeAmount of Gain/(Loss) Reclassified from Accumulated OCI into Income
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Forward Starting Swaps$5,124Interest expense$(18,452)Interest expense$—
Total$5,124$(18,452)$—
Effective PortionIneffective Portion
December 31, 2017 Type of Cash Flow HedgeAmount of Gain/(Loss) Recognized in OCI on DerivativeLocation of Gain/(Loss) Reclassified from Accumulated OCI into IncomeAmount of Gain/(Loss) Reclassified from Accumulated OCI into IncomeLocation of Gain/(Loss) Recognized in Income on DerivativeAmount of Gain/(Loss) Reclassified from Accumulated OCI into Income
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Forward Starting Swaps$6,439Interest expense$(18,858)Interest expense$—
Total$6,439$(18,858)$—
Effective PortionIneffective Portion
December 31, 2016 Type of Cash Flow HedgeAmount of Gain/(Loss) Recognized in OCI on DerivativeLocation of Gain/(Loss) Reclassified from Accumulated OCI into IncomeAmount of Gain/(Loss) Reclassified from Accumulated OCI into IncomeLocation of Gain/(Loss) Recognized in Income on DerivativeAmount of Gain/(Loss) Reclassified from Accumulated OCI into Income
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Forward Starting Swaps$(3,989)Interest expense$(41,758)Interest expense$(74)
Total$(3,989)$(41,758)$(74)

As of December 31, 2018 and 2017, there were approximately $65.0 million and $88.6 million in deferred losses, net, included in accumulated other comprehensive income (loss), respectively, related to derivative instruments. Based on the estimated fair values of the net derivative instruments at December 31, 2018, the Company may recognize an estimated $20.9 million of accumulated other comprehensive income (loss) as additional interest expense during the year ending December 31, 2019.

In November 2018, the Company received approximately $16.4 million to settle six forward starting swaps in conjunction with the issuance of $400.0 million of ten-year unsecured public notes. The accrued interest of approximately $120,000 was recorded as an increase to interest expense. The remaining $16.5 million will be deferred as a component of accumulated other comprehensive income (loss) and will be recognized as a decrease to interest expense over the first nine years and nine months of the notes.

In February 2018, the Company received approximately $1.6 million to settle two forward starting swaps in conjunction with the issuance of $500.0 million of ten-year unsecured public notes. The entire $1.6 million was initially deferred as a component of accumulated other comprehensive income (loss) and will be recognized as a decrease to interest expense over the ten-year term of the notes.

In August 2017, the Company received $1.3 million to settle four forward starting swaps in conjunction with the issuance of $400.0 million of ten-year fixed rate public notes. The entire $1.3 million was initially deferred as a component of accumulated other comprehensive income (loss) and will be recognized as a decrease to interest expense over the ten-year term of the notes.

In October 2016, the Company paid $4.7 million to settle a forward starting swap in conjunction with the issuance of $500.0 million of ten-year fixed rate public notes. The ineffective portion of approximately $74,000 and accrued interest of approximately $9,000 were recorded as increases to interest expense. The remaining amount of approximately $4.6 million will be deferred as a component of accumulated other comprehensive income (loss) and recognized as an increase to interest expense over the approximate term of the notes.

F-46

10.Earnings Per Share and Earnings Per Unit

Equity Residential

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

Year Ended December 31,
201820172016
Numerator for net income per share – basic:
Income from continuing operations$685,192$628,381$4,479,586
Allocation to Noncontrolling Interests – Operating Partnership, net(24,939)(22,604)(171,491)
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties(2,718)(2,323)(16,430)
Preferred distributions(3,090)(3,091)(3,091)
Income from continuing operations available to Common Shares, net of Noncontrolling Interests654,445600,3634,288,574
Discontinued operations, net of Noncontrolling Interests——498
Numerator for net income per share – basic$654,445$600,363$4,289,072
Numerator for net income per share – diluted:
Income from continuing operations$685,192$628,381$4,479,586
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties(2,718)(2,323)(16,430)
Preferred distributions(3,090)(3,091)(3,091)
Income from continuing operations available to Common Shares679,384622,9674,460,065
Discontinued operations, net——518
Numerator for net income per share – diluted$679,384$622,967$4,460,583
Denominator for net income per share – basic and diluted:
Denominator for net income per share – basic368,052366,968365,002
Effect of dilutive securities:
OP Units12,86912,90113,827
Long-term compensation shares/units2,7742,8093,163
Denominator for net income per share – diluted383,695382,678381,992
Net income per share – basic$1.78$1.64$11.75
Net income per share – diluted$1.77$1.63$11.68
Net income per share – basic:
Income from continuing operations available to Common Shares, net of Noncontrolling Interests$1.78$1.64$11.75
Discontinued operations, net of Noncontrolling Interests———
Net income per share – basic$1.78$1.64$11.75
Net income per share – diluted:
Income from continuing operations available to Common Shares$1.77$1.63$11.68
Discontinued operations, net———
Net income per share – diluted$1.77$1.63$11.68
Distributions declared per Common Share outstanding$2.16$2.015$13.015

F-47

ERP Operating Limited Partnership

The following tables set forth the computation of net income per Unit – basic and net income per Unit – diluted for the Operating Partnership (amounts in thousands except per Unit amounts):

Year Ended December 31,
201820172016
Numerator for net income per Unit – basic and diluted:
Income from continuing operations$685,192$628,381$4,479,586
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties(2,718)(2,323)(16,430)
Allocation to Preference Units(3,090)(3,091)(3,091)
Income from continuing operations available to Units679,384622,9674,460,065
Discontinued operations, net——518
Numerator for net income per Unit – basic and diluted$679,384$622,967$4,460,583
Denominator for net income per Unit – basic and diluted:
Denominator for net income per Unit – basic380,921379,869378,829
Effect of dilutive securities:
Dilution for Units issuable upon assumed exercise/vesting of the Company’s long-term compensation shares/units2,7742,8093,163
Denominator for net income per Unit – diluted383,695382,678381,992
Net income per Unit – basic$1.78$1.64$11.75
Net income per Unit – diluted$1.77$1.63$11.68
Net income per Unit – basic:
Income from continuing operations available to Units$1.78$1.64$11.75
Discontinued operations, net———
Net income per Unit – basic$1.78$1.64$11.75
Net income per Unit – diluted:
Income from continuing operations available to Units$1.77$1.63$11.68
Discontinued operations, net———
Net income per Unit – diluted$1.77$1.63$11.68
Distributions declared per Unit outstanding$2.16$2.015$13.015
11.Individually Significant Dispositions

The Company executed an agreement with controlled affiliates of Starwood Capital Group (“Starwood”) on October 23, 2015 to sell a portfolio of 72 operating properties consisting of 23,262 apartment units located in five markets across the United States for $5.365 billion (the “Starwood Transaction” or “Starwood Portfolio”). The Starwood Portfolio included substantially all of the assets in the Company’s South Florida and Denver (primarily suburban portfolio) markets and certain suburban assets in the Washington D.C., Seattle and Los Angeles markets. The sale of the Starwood Portfolio represented the continuation of the Company’s strategy, which started over ten years ago, to focus on the urban and high-density suburban markets where we do business today. On January 26 and 27, 2016, the Company closed on the sale of the entire portfolio described above.

The Company concluded that the Starwood Transaction did not qualify for discontinued operations reporting as it did not represent a strategic shift that had a major effect on the Company’s operations and financial results. However, the Company concluded that the Starwood Transaction did qualify as an individually significant component of the Company as the amount received upon disposal exceeded 10% of total assets, and NOI (see definition in Note 17) represented approximately 1.2% of consolidated NOI (for the approximate one-month period owned in 2016) for the year ended December 31, 2016. As a result, the following table summarizes the results of operations attributable to the Starwood Transaction for the year ended December 31, 2016 (amounts in thousands):

F-48

Year Ended December 31,
2016
REVENUES
Rental income$30,785
Total revenues30,785
EXPENSES
Property and maintenance7,838
Real estate taxes and insurance2,912
Property management2
General and administrative23
Depreciation—
Total expenses10,775
Operating income20,010
Interest and other income21
Other expenses—
Interest:
Expense incurred, net(380)
Amortization of deferred financing costs(707)
Income and other tax (expense) benefit(1)
Net gain (loss) on sales of real estate properties3,161,097
Income from operations attributable to controlling interests – Operating Partnership3,180,040
Income from operations attributable to Noncontrolling Interests – Operating Partnership(122,152)
Income from operations attributable to controlling interests – Company$3,057,888
12.Share Incentive Plans

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

On June 16, 2011, the shareholders of EQR approved the Company’s 2011 Share Incentive Plan, as amended (the “2011 Plan”). The 2011 Plan originally reserved 12,980,741 Common Shares for issuance, which was subsequently adjusted to 14,725,321 Common Shares in accordance with the provisions of the 2011 Plan as a result of the option adjustments required for the special dividends paid in conjunction with the Starwood Transaction. In conjunction with the approval of the 2011 Plan, no further awards may be granted under the 2002 Share Incentive Plan. The 2011 Plan expires on June 16, 2021. As of December 31, 2018, 4,835,914 shares were available for future issuance.

Pursuant to the 2011 Plan and the 2002 Share Incentive Plan, as restated and 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/units (including long-term incentive plan awards), subject to conditions and restrictions as described in the Share Incentive Plans. Options, SARs, restricted shares (including long-term incentive plan awards) and restricted units (including long-term incentive plan awards) are sometimes collectively referred to herein as “Awards”. The 2002 Share Incentive Plan, as restated and 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.

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

Restricted shares are granted at the fair market value of the Company’s Common Shares at the date of grant. Restricted shares that have been awarded through December 31, 2018 generally vest three years from the award date. In addition, the Company’s unvested restricted shareholders generally have the same voting rights as any other Common Share holder. During the three-year

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period of restriction, the Company’s unvested restricted shareholders receive quarterly dividend payments on their shares at the same rate and on the same date as any other Common Share holder. As a result, dividends paid on unvested restricted shares are included as a component of retained earnings (included in general partner’s capital in the Operating Partnership’s financial statements) and have not been considered in reducing net income available to Common Shares/Units in a manner similar to the Company’s preferred share/preference unit dividends for the earnings per share/Unit calculation. If employment is terminated prior to the lapsing of the restriction, the shares are generally canceled.

Restricted units are a class of partnership interests that under certain conditions, including vesting, are convertible by the holder into an equal number of OP Units, which are exchangeable by the holder for Common Shares on a one-for-one basis or the cash value of such shares at the option of the Company. In connection with the grant of long-term incentive compensation for services provided during a year, officers of the Company are allowed to choose between restricted shares and restricted units. Restricted units are generally granted at varying discount rates to the fair market value of the Company’s Common Shares at the date of grant due to the book-up risk associated with restricted units (see below for more details) and the liquidity risk associated with various hold period restrictions and generally vest three years from the award date. In addition, restricted unit holders receive quarterly dividend payments on their restricted units at the same rate and on the same date as any other OP Unit holder (except as noted below). As a result, dividends paid on restricted units are included as a component of Noncontrolling Interests – Operating Partnership/Limited Partners’ capital and have not been considered in reducing net income available to Common Shares/Units in a manner similar to the Company’s preferred share/preference unit dividends for the earnings per share/Unit calculation. If employment is terminated prior to vesting, the restricted units are generally canceled. A restricted unit will automatically convert to an OP Unit when the capital account of each restricted unit increases (“books-up”) to a specified target. If the capital target is not attained within ten years following the date of issuance, the restricted unit will automatically be canceled and no compensation will be payable to the holder of such canceled restricted unit.

The Company also allows eligible employees the ability to receive immediately vested Options and allows officers the ability to receive immediately vested restricted units (subject to the book-up provisions described above and a two-year hold restriction) in-lieu of any percentage of their annual cash bonus.

In January 2015, the Company revised its executive compensation program for the Chairman, Chief Executive Officer and certain other Executive Officers. In the latest iteration of the program, the long-term portion of the plan will allow these individuals to earn from 0% to 200% of the target number of long-term incentive (“LTI”) awards, payable in the form of restricted shares and/or restricted units, as determined by the Company’s relative and absolute Total Shareholder Return (“TSR”) and Normalized Funds from Operations (“FFO”) results over a forward-looking three-year performance period. The Company’s TSR and Normalized FFO performance will be compared to pre-established quantitative performance metrics. In connection with the grant of LTI plan awards, the individuals are allowed to choose between restricted shares and restricted units. The grant date fair value of the awards is estimated using a Monte Carlo model for the TSR portion of the awards and the resulting expense is recorded regardless of whether the TSR performance measures are achieved, if the required service is delivered. The grant date fair value of the awards is estimated similarly to the restricted share and restricted unit discussion above for the Normalized FFO component and the resulting expense is adjusted based on the final achievement obtained. These awards generally vest three years from the award date. The grant date fair value is amortized into expense over the service period. If the executive is retirement-eligible, the grant date fair value is amortized into expense over the first year. All other awards are amortized into expense over the three year performance/vesting period.

In addition, the LTI awards granted as restricted units will receive quarterly partial dividend payments equal to 10% of any common share dividend on the same date as any other OP Unit holder during the three-year performance period. As a result, dividends paid on restricted units are included as a component of Noncontrolling Interests – Operating Partnership/Limited Partners’ capital and have not been considered in reducing net income available to Common Shares/Units in a manner similar to the Company’s preferred share/preference unit dividends for the earnings per share/Unit calculation. The awards granted as restricted shares will not receive dividends during the three-year performance period. At the end of the three-year performance period, cumulative dividends will be paid for the three-year performance period for any restricted shares or restricted units actually earned, less any dividends already paid on the restricted units. If employment is terminated prior to vesting, the restricted shares and restricted units are generally canceled. Once the Company’s absolute and relative TSR and Normalized FFO performance is calculated at the end of the three-year performance period, the executive will earn a certain number of restricted shares and/or restricted units. No payout would be made for any return below 50% of the target performance metric.

All Trustees, with the exception of the Company’s non-executive Chairman and employee Trustees, are granted options, restricted shares and/or restricted units that vest one-year from the grant date that corresponds to the term for which he or she has been elected to serve. Since 2016, the non-executive Chairman has only received awards under the LTI plan (see further discussion above).

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

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retirement generally means the termination of employment (other than for cause) after meeting the requirements of the Rule of 70. For Trustees, retirement generally means termination of service on the Board (other than for cause) on or after age 72.

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

Under the Company’s definitions of retirement, some of its executive officers and its non-executive Chairman are retirement eligible.

For employees hired prior to January 1, 2009 who retire at or after age 62 (or for Trustees who retire at or after age 72), such employee’s or Trustee’s unvested restricted shares, restricted units and share options would immediately vest, and share options would continue to be exercisable for the balance of the applicable ten-year option period, as is provided under the Share Incentive Plans. For all other employees (those hired after January 1, 2009 and those hired before such date who choose to retire prior to age 62), upon such retirement under the Rule of 70 definition of retirement of employees, such employee’s unvested restricted shares, restricted units and share options would continue to vest per the original vesting schedule (subject to immediate vesting upon the occurrence of a subsequent change in control of the Company or the employee’s death), and options would continue to be exercisable for the balance of the applicable ten-year option period, subject to the employee’s compliance with the non-competition and employee non-solicitation provisions. The Rule of 70 does not apply to Trustees. For the individuals mentioned above who receive awards under the LTI plan and retire at or after age 62 (age 72 for the Chairman of the Board) or under the Rule of 70, the award would be prorated in proportion to the number of days worked in the first year of the three-year performance period. The individual would not receive any payout of shares or units until the final payout is determined at the end of the three-year performance period. If an employee violates the non-competition and employee non-solicitation provisions after such retirement, all unvested restricted shares, unvested restricted units and unvested and vested share options at the time of the violation would be void, unless otherwise determined by the Compensation Committee of the Board of Trustees.

The following tables summarize compensation information regarding the restricted shares, restricted units, share options and Employee Share Purchase Plan (“ESPP”) for the three years ended December 31, 2018, 2017 and 2016 (amounts in thousands):

Year Ended December 31, 2018
Compensation ExpenseCompensation CapitalizedRestricted Units/Options In-Lieu of Bonus (1)Compensation EquityDividends Incurred
Restricted shares (2)$7,406$852$—$8,258$754
Restricted units (2)12,310361,66314,009963
Share options6,6832962,7559,734—
ESPP discount73334—767—
Total$27,132$1,218$4,418$32,768$1,717
Year Ended December 31, 2017
Compensation ExpenseCompensation CapitalizedRestricted Units/Options In-Lieu of Bonus (1)Compensation EquityDividends Incurred
Restricted shares (2)$9,209$568$—$9,777$761
Restricted units (2)10,21411919010,523741
Share options4,8933231,6196,835—
ESPP discount68166—747—
Total$24,997$1,076$1,809$27,882$1,502
Year Ended December 31, 2016
Compensation ExpenseCompensation CapitalizedRestricted Units In-Lieu of Bonus (1)Compensation EquityDividends Incurred
Restricted shares (2)$13,539$1,477$—$15,016$6,494
Restricted units (2)13,5675914,02218,1807,762
Share options2,839593—3,432—
ESPP discount58565—650—
Total$30,530$2,726$4,022$37,278$14,256
(1)The Company allows officers the ability to receive immediately vested restricted units (subject to the book-up provisions described above and a two-year hold restriction) in-lieu of any percentage of their annual cash bonus. Beginning in 2017, the Company allows eligible employees the ability to receive immediately vested share options in-lieu of any percentage of their annual cash bonus.
(2)Includes LTI plan awards granted under the executive compensation program.

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Compensation expense is generally recognized for Awards as follows:

•Restricted shares, restricted units and share options – Straight-line method over the vesting period of the options, shares or units regardless of cliff or ratable vesting distinctions.
•LTI plan awards – Target amount is recognized under the straight-line method over the vesting period of the shares or units regardless of cliff or ratable vesting distinctions.
•ESPP discount – Immediately upon the purchase of common shares each quarter.

The Company accelerates the recognition of compensation expense for all Awards for those individuals approaching or meeting the retirement age criteria discussed above. The total compensation expense related to Awards not yet vested at December 31, 2018 is $7.5 million (excluding the accelerated expenses for individuals approaching or meeting the retirement age criteria discussed above), which is expected to be recognized over a weighted average term of 1.31 years.

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

The table below summarizes the Award activity of the Share Incentive Plans for the three years ended December 31, 2018, 2017 and 2016:

Common Shares Subject to OptionsWeighted Average Exercise Price per OptionRestricted SharesWeighted Average Fair Value per Restricted ShareRestricted UnitsWeighted Average Fair Value per Restricted Unit
Balance at December 31, 20155,734,365$48.04522,150$63.67888,725$63.91
Awards granted (1) (5)154,016$64.99154,296$75.19289,273$81.05
Awards exercised/vested (2) (3) (4)(815,044)$38.01(217,805)$57.75(374,217)$52.73
Awards forfeited(10,512)$63.43(6,607)$70.73(1,524)$86.35
Awards expired(710)$68.40————
Special dividend adjustment (6)960,986N/A————
Balance at December 31, 20166,023,101$42.05452,034$70.35802,257$75.26
Awards granted (1) (5)1,337,898$60.8893,867$61.94291,921$68.57
Awards exercised/vested (2) (3) (4)(846,137)$37.26(165,744)$58.04(192,644)$54.16
Awards forfeited(27,547)$61.85(10,416)$72.44(274)$75.50
Awards expired(3,483)$65.91————
Balance at December 31, 20176,483,832$46.46369,741$73.67901,260$77.61
Awards granted (1) (5)1,730,942$60.40129,303$62.25267,074$61.60
Awards exercised/vested (2) (3) (4)(1,056,388)$29.05(194,116)$77.32(28,486)$55.50
Awards forfeited(38,133)$60.74(5,503)$65.77—$—
Awards expired(8,018)$59.70————
Balance at December 31, 20187,112,235$52.35299,425$66.521,139,848$71.07
(1)The weighted average grant date fair value for Options granted during the years ended December 31, 2018, 2017 and 2016 was $6.17 per share, $5.86 per share and $11.09 per share, respectively.
(2)The aggregate intrinsic value of options exercised during the years ended December 31, 2018, 2017 and 2016 was $42.9 million, $25.6 million and $26.2 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, 2018, 2017 and 2016 was $11.5 million, $10.2 million and $15.6 million, respectively.
(4)The fair value of restricted units vested during the years ended December 31, 2018, 2017 and 2016 was $1.8 million, $11.7 million and $27.2 million, respectively.
(5)Includes LTI plan awards granted under the executive compensation program.
(6)In addition to the regular quarterly dividends, the Company paid two special dividends to its shareholders and holders of OP Units of $11.00 per share/unit in the aggregate in 2016. Option holders were not entitled to these special dividends, but pursuant to the terms of the Share Incentive Plans are due equitable adjustments of additional options. The special dividend adjustment’s weighted average exercise price per option is reflected in the activity for 2016 for the awards granted, awards exercised/vested, and awards forfeited and the balance at December 31, 2016.

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The following table summarizes information regarding options outstanding and exercisable at December 31, 2018 (aggregate intrinsic value is in thousands):

OptionsWeighted Average Remaining Contractual Life in YearsWeighted Average Exercise PriceAggregate Intrinsic Value (1)
Options Outstanding7,112,2355.58$52.35$97,633
Options Exercisable5,328,0204.52$49.57$88,031
Vested and expected to vest7,096,2435.57$52.33$97,543
(1)The aggregate intrinsic values were calculated as the excess, if any, between the Company’s closing share price of $66.01 per share on December 31, 2018 and the strike price of the underlying awards.

As of December 31, 2017 and 2016, 5,336,043 Options (with a weighted average exercise price of $43.24) and 5,610,677 Options (with a weighted average exercise price of $40.91) were exercisable, respectively.

13.Employee Plans

The Company established an Employee Share Purchase Plan to provide each employee and trustee the ability to annually acquire up to $100,000 of Common Shares of EQR. The Company registered 7,000,000 Common Shares under the ESPP, of which 2,762,463 Common Shares remained available for purchase at December 31, 2018. The Common Shares may be purchased quarterly at a price equal to 85% of the lesser of: (a) the closing price for a share on the last day of such quarter; and (b) the greater of: (i) the closing price for a share on the first day of such quarter, and (ii) the average closing price for a share for all the business days in the quarter. The following table summarizes information regarding the Common Shares issued under the ESPP (the net proceeds noted below were contributed to ERPOP in exchange for OP Units):

Year Ended December 31,
201820172016
(Amounts in thousands except share and per share amounts)
Shares issued75,41468,28663,909
Issuance price ranges$47.80 – $57.09$52.79 – $58.06$51.85 – $63.37
Issuance proceeds$3,879$3,744$3,686

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 4% of eligible compensation that a participant contributes to the 401(k) Plan for all employees except those defined as highly compensated employees, whose match is 3%. Participants are vested in the Company’s contributions over five years. The Company recognized an expense in the amount of $4.9 million, $4.6 million and $4.9 million for the years ended December 31, 2018, 2017 and 2016, respectively.

The Company established the SERP to provide certain officers and trustees an opportunity to defer a portion of their eligible compensation in order to save for retirement. The SERP is restricted to investments in Common Shares, certain marketable securities that have been specifically approved and cash equivalents. The deferred compensation liability represented in the SERP and the securities issued to fund such deferred compensation liability are consolidated by the Company and carried on the Company’s balance sheets, and the Company’s Common Shares held in the SERP are accounted for as a reduction to paid in capital (included in general partner’s capital in the Operating Partnership’s financial statements).

14.Distribution Reinvestment Plan

On September 30, 2014, the Company filed with the SEC a Form S-3 Registration Statement to register 4,790,000 Common Shares pursuant to a Distribution Reinvestment Plan (the “2014 DRIP”), which included the remaining shares available for issuance under a previous registration. The registration was automatically declared effective the same day and will expire when all 4,790,000 shares have been issued. The Company has 4,676,606 Common Shares available for issuance under the 2014 DRIP at December 31, 2018.

The 2014 DRIP provides holders of record and beneficial owners of Common Shares and Preferred Shares with a simple and convenient method of reinvesting cash dividends/distributions in additional Common Shares. Common Shares purchased under the 2014 DRIP may, at the option of EQR, be directly issued by EQR or purchased by EQR’s transfer agent in the open market using participants’ funds. The net proceeds from any Common Share issuances are contributed to ERPOP in exchange for OP Units.

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15.Transactions with Related Parties

The Company leases its corporate headquarters from an entity controlled by EQR’s Chairman of the Board of Trustees. The lease terminates on January 31, 2022. Amounts incurred for such office space for the years ended December 31, 2018, 2017 and 2016, respectively, were approximately $2.5 million, $2.8 million and $2.7 million. The Company believes these amounts equal market rates for such rental space.

16.Commitments and Contingencies

The Company, as an owner of real estate, is subject to various Federal, state and local environmental laws. Compliance by the Company with existing laws has not had a material adverse effect on the Company. However, the Company cannot predict the impact of new or changed laws or regulations on its current properties or on properties that it may acquire in the future. As of December 31, 2018, the Company does have environmental reserves totaling approximately $4.5 million related to three of its properties.

The Company had established a reserve related to various litigation matters associated with its Massachusetts properties and periodically assessed the adequacy of the reserve and made adjustments as necessary. As of December 31, 2018, the matters were resolved for a total payout of $0.9 million and no reserve remains outstanding.

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

As of December 31, 2018, the Company has three wholly owned projects totaling 690 apartment units in various stages of development with remaining commitments to fund of approximately $414.1 million and estimated completion dates ranging through September 30, 2021, as well as other completed development projects that are in various stages of lease-up or are stabilized.

As of December 31, 2018, the Company has two unconsolidated operating properties that are owned with the same third party joint venture partner under separate agreements. The joint venture agreements with this partner are primarily deal-specific regarding profit-sharing, equity contributions, returns on investment, buy-sell agreements and other customary provisions. The buy-sell arrangements contain provisions that provide the right, but not the obligation, for the Company to acquire the partner’s interests or sell its interests at any time following the occurrence of certain pre-defined events described in the joint venture agreements.

During the years ended December 31, 2018, 2017 and 2016, total operating lease expense for ground leases and office space, including a portion of real estate taxes, insurance, repairs and utilities, aggregated $27.8 million, $26.6 million and $26.2 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 one former chief executive officer. During the years ended December 31, 2018, 2017 and 2016, the Company recognized compensation expense of $0.3 million, $0.4 million and $0.3 million, respectively, related to these agreements.

The following table summarizes the Company’s contractual obligations for minimum rent payments under operating leases and deferred compensation for the next five years and thereafter as of December 31, 2018:

(Payments)/Receipts Due by Year (in thousands)
20192020202120222023ThereafterTotal
Operating Leases:
Minimum Rent Payments (a)$(16,718)$(16,726)$(16,665)$(14,500)$(14,339)$(953,001)$(1,031,949)
Minimum Rent Receipts (b)$64,790$61,409$57,326$53,193$46,016$172,694$455,428
Other Long-Term Liabilities:
Deferred Compensation (c)$(803)$(1,100)$(1,100)$(1,100)$(975)$(3,810)$(8,888)
(a)Minimum basic rent due for various office space the Company leases and fixed base rent due on ground leases for 12 properties.
(b)Minimum basic rent receipts due for various retail/commercial space where the Company is the lessor.
(c)Estimated payments to the Company’s Chairman, Vice Chairman and one former CEO based on actual and estimated retirement dates.
17.Reportable Segments

Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses and about which discrete financial information is available that is evaluated regularly by the chief

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operating decision maker. The chief operating decision maker decides how resources are allocated and assesses performance on a recurring basis at least quarterly.

The Company’s primary business is the acquisition, development and management of multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents. The chief operating decision maker evaluates the Company’s operating performance geographically by market and both on a same store and non-same store basis. The Company’s geographic same store operating segments located in urban and high density suburban markets represent its reportable segments (the two Denver properties acquired in the third quarter of 2018 are currently included in non–same store). The Company’s operating segments located in its other markets (Phoenix) that are not material have also been included in the tables presented below.

The Company’s fee and asset management and development activities are other business activities that do not constitute an operating segment and as such, have been aggregated in the “Other” category in the tables presented below.

All revenues are from external customers and there is no customer who contributed 10% or more of the Company’s total revenues during the three years ended December 31, 2018, 2017 and 2016.

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 and 2) real estate taxes and insurance expense (all as reflected in the accompanying consolidated statements of operations and comprehensive income). The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company’s apartment properties. Revenues for all leases are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.

The following table presents a reconciliation of NOI from our rental real estate specific to continuing operations for the years ended December 31, 2018, 2017 and 2016, respectively (amounts in thousands):

Year Ended December 31,
201820172016
Rental income$2,577,681$2,470,689$2,422,233
Property and maintenance expense(429,335)(405,281)(406,823)
Real estate taxes and insurance expense(357,814)(335,495)(317,387)
Total operating expenses(787,149)(740,776)(724,210)
Net operating income$1,790,532$1,729,913$1,698,023

The following tables present NOI for each segment from our rental real estate specific to continuing operations for the years ended December 31, 2018, 2017 and 2016, respectively, as well as total assets and capital expenditures at December 31, 2018 and 2017, respectively (amounts in thousands):

Year Ended December 31, 2018Year Ended December 31, 2017Year Ended December 31, 2016
Rental IncomeOperating ExpensesNOIRental IncomeOperating ExpensesNOIRental IncomeOperating ExpensesNOI
Same store (1)
Los Angeles$416,688$119,473$297,215$402,192$114,055$288,137$382,425$111,055$271,370
Orange County91,65022,07169,57988,52721,54466,98384,59020,60063,990
San Diego91,97124,02367,94888,50723,07365,43484,64622,36662,280
Subtotal - Southern California600,309165,567434,742579,226158,672420,554551,661154,021397,640
San Francisco442,773105,686337,087430,501108,689321,812371,63390,393281,240
Washington D.C.434,545134,427300,118430,060129,720300,340424,350126,154298,196
New York458,366181,040277,326454,945170,064284,881456,664159,302297,362
Boston229,07963,348165,731223,59560,931162,664225,01462,650162,364
Seattle196,47955,165141,314191,07452,470138,604168,97546,255122,720
Other Markets1,9406571,2831,8396521,1871,7975671,230
Total same store2,363,491705,8901,657,6012,311,240681,1981,630,0422,200,094639,3421,560,752
Non-same store/other (2) (3)
Non-same store190,81463,907126,90795,01630,74264,274117,14341,87775,266
Other (3)23,37617,3526,02464,43328,83635,597104,99642,99162,005
Total non-same store/other214,19081,259132,931159,44959,57899,871222,13984,868137,271
Totals$2,577,681$787,149$1,790,532$2,470,689$740,776$1,729,913$2,422,233$724,210$1,698,023

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(1)For the years ended December 31, 2018 and 2017, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2017, less properties subsequently sold, which represented 71,721 apartment units. For the year ended December 31, 2016, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2016, less properties subsequently sold, which represented 70,117 apartment units.
(2)For the years ended December 31, 2018 and 2017, non-same store primarily includes properties acquired after January 1, 2017, plus any properties in lease-up and not stabilized as of January 1, 2017. For the year ended December 31, 2016, non-same store primarily includes properties acquired after January 1, 2016, plus any properties in lease-up and not stabilized as of January 1, 2016.
(3)Other includes development, other corporate operations and operations prior to disposition for properties sold.
Year Ended December 31, 2018Year Ended December 31, 2017
Total AssetsCapital ExpendituresTotal AssetsCapital Expenditures
Same store (1)
Los Angeles$2,608,347$28,306$2,692,602$26,921
Orange County318,4728,192328,5939,237
San Diego405,4494,525421,2674,922
Subtotal - Southern California3,332,26841,0233,442,46241,080
San Francisco2,967,73544,8373,039,55238,618
Washington D.C.3,702,36829,6163,803,18535,423
New York4,063,56823,4724,160,60330,403
Boston1,589,00024,6231,636,92528,687
Seattle1,277,86517,8251,316,67821,646
Other Markets12,78116312,768103
Total same store16,945,585181,55917,412,173195,960
Non-same store/other (2) (3)
Non-same store2,940,7706,6652,276,3123,704
Other (3)507,854277882,1142,943
Total non-same store/other3,448,6246,9423,158,4266,647
Totals$20,394,209$188,501$20,570,599$202,607
(1)Same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2017, less properties subsequently sold, which represented 71,721 apartment units.
(2)Non-same store primarily includes properties acquired after January 1, 2017, plus any properties in lease-up and not stabilized as of January 1, 2017.
(3)Other includes development, other corporate operations and capital expenditures for properties sold.
18.Subsequent Events/Other

Subsequent Events

Subsequent to December 31, 2018, the Company:

•Acquired three properties consisting of 579 apartment units for approximately $258.7 million; and
•Obtained $288.1 million in 3.94% fixed rate mortgage debt held in a Fannie Mae loan pool maturing on March 1, 2029.

Other

During the year ended December 31, 2016, the Company sold its entire interest in the management contracts and related rights associated with the military housing ventures at Joint Base Lewis McChord consisting of 5,161 apartment units for approximately $63.3 million and recognized a gain on sale of approximately $52.4 million, which is included in interest and other income in the accompanying consolidated statements of operations and comprehensive income.

F-56

19.Quarterly Financial Data (Unaudited)

Equity Residential

The following unaudited quarterly data has been prepared on the basis of a December 31 year-end. Amounts are in thousands, except for per share amounts.

First QuarterSecond QuarterThird QuarterFourth Quarter
20183/316/309/3012/31
Total revenues$633,016$639,808$652,867$652,743
Operating income196,869217,654224,731219,306
Net income *220,548118,410223,846122,388
Net income available to Common Shares211,036112,830214,164116,415
Earnings per share – basic:
Net income available to Common Shares$0.57$0.31$0.58$0.32
Weighted average Common Shares outstanding367,800367,930368,028368,445
Earnings per share – diluted:
Net income available to Common Shares$0.57$0.31$0.58$0.31
Weighted average Common Shares outstanding383,018383,423383,884384,296
First QuarterSecond QuarterThird QuarterFourth Quarter
20173/316/309/3012/31
Total revenues$604,100$612,480$624,122$630,704
Operating income204,371210,550217,786214,764
Net income *149,941204,160144,196130,084
Net income available to Common Shares142,969195,268137,457124,669
Earnings per share – basic:
Net income available to Common Shares$0.39$0.53$0.37$0.34
Weighted average Common Shares outstanding366,605366,820366,996367,442
Earnings per share – diluted:
Net income available to Common Shares$0.39$0.53$0.37$0.34
Weighted average Common Shares outstanding382,280382,692382,945383,105
  • The Company did not have any discontinued operations, extraordinary items or cumulative effect of change in accounting principle during the years ended December 31, 2018 and 2017. Therefore, income from continuing operations and income before extraordinary items and cumulative effect of change in accounting principle are not shown as they were both equal to the net income amounts disclosed above.

ERP Operating Limited Partnership

The following unaudited quarterly data has been prepared on the basis of a December 31 year-end. Amounts are in thousands, except for per Unit amounts.

First QuarterSecond QuarterThird QuarterFourth Quarter
20183/316/309/3012/31
Total revenues$633,016$639,808$652,867$652,743
Operating income196,869217,654224,731219,306
Net income *220,548118,410223,846122,388
Net income available to Units219,095117,129222,323120,837
Earnings per Unit – basic:
Net income available to Units$0.57$0.31$0.58$0.32
Weighted average Units outstanding380,663380,795380,912381,306
Earnings per Unit – diluted:
Net income available to Units$0.57$0.31$0.58$0.31
Weighted average Units outstanding383,018383,423383,884384,296

F-57

First QuarterSecond QuarterThird QuarterFourth Quarter
20173/316/309/3012/31
Total revenues$604,100$612,480$624,122$630,704
Operating income204,371210,550217,786214,764
Net income *149,941204,160144,196130,084
Net income available to Units148,380202,622142,623129,342
Earnings per Unit – basic:
Net income available to Units$0.39$0.53$0.37$0.34
Weighted average Units outstanding379,504379,733379,906380,325
Earnings per Unit – diluted:
Net income available to Units$0.39$0.53$0.37$0.34
Weighted average Units outstanding382,280382,692382,945383,105
  • The Operating Partnership did not have any discontinued operations, extraordinary items or cumulative effect of change in accounting principle during the years ended December 31, 2018 and 2017. Therefore, income from continuing operations and income before extraordinary items and cumulative effect of change in accounting principle are not shown as they were both equal to the net income amounts disclosed above.

F-58

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

Overall Summary

December 31, 2018

Properties (H)Apartment Units (H)Investment in Real Estate, GrossAccumulated DepreciationInvestment in Real Estate, NetEncumbrances (1)
Wholly Owned Unencumbered24062,862$21,609,130,732$(5,400,484,879)$16,208,645,853$—
Wholly Owned Encumbered4812,1404,023,117,169(1,039,436,780)2,983,680,3892,081,887,149
Wholly Owned Properties28875,00225,632,247,901(6,439,921,659)19,192,326,2422,081,887,149
Partially Owned Unencumbered91,847516,719,235(116,736,579)399,982,656—
Partially Owned Encumbered81,688362,054,538(139,622,501)222,432,037303,583,335
Partially Owned Properties173,535878,773,773(256,359,080)622,414,693303,583,335
Total Unencumbered Properties24964,70922,125,849,967(5,517,221,458)16,608,628,509—
Total Encumbered Properties5613,8284,385,171,707(1,179,059,281)3,206,112,4262,385,470,484
Total Consolidated Investment in Real Estate30578,537$26,511,021,674$(6,696,280,739)$19,814,740,935$2,385,470,484
(1)See attached Encumbrances Reconciliation.

S-1

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

Encumbrances Reconciliation

December 31, 2018

Portfolio/Entity EncumbrancesNumber of Properties Encumbered bySee Properties With Note:Amount
Archstone Master Property Holdings LLC13I$797,768,476
Portfolio/Entity Encumbrances13797,768,476
Individual Property Encumbrances1,587,702,008
Total Encumbrances per Financial Statements$2,385,470,484

S-2

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III – Real Estate and Accumulated Depreciation

(Amounts in thousands)

The changes in total real estate for the years ended December 31, 2018, 2017 and 2016 are as follows:

201820172016
Balance, beginning of year$26,026,896$25,386,425$28,542,697
Acquisitions and development855,254710,960832,803
Improvements192,661204,113174,981
Dispositions and other(563,789)(274,602)(4,164,056)
Balance, end of year$26,511,022$26,026,896$25,386,425

The changes in accumulated depreciation for the years ended December 31, 2018, 2017 and 2016 are as follows:

201820172016
Balance, beginning of year$6,040,378$5,360,389$6,084,616
Depreciation785,725743,749705,649
Dispositions and other(129,822)(63,760)(1,429,876)
Balance, end of year$6,696,281$6,040,378$5,360,389

S-3

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2018

DescriptionInitial Cost to CompanyCost Capitalized Subsequent to Acquisition (Improvements, net) (E)Gross Amount Carried at Close of Period 12/31/18
Apartment NameLocationRetail/ Commercial SpaceDate of ConstructionApartment Units (H)LandBuilding & FixturesBuilding & FixturesLandBuilding & Fixtures (A)Total (B)Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/18Encumbrances
Wholly Owned Unencumbered:
100 K Apartments (fka 100K Street)Washington, D.C.—2018222$15,600,000$69,516,265$—$15,600,000$69,516,265$85,116,265$(270,039)$84,846,226$—
140 Riverside BoulevardNew York, NYG2003354103,539,10094,082,7259,479,410103,539,100103,562,135207,101,235(48,691,122)158,410,113—
160 Riverside BoulevardNew York, NYG2001455139,933,500190,964,74515,656,370139,933,500206,621,115346,554,615(96,815,700)249,738,915—
170 AmsterdamNew York, NYG2015236—112,096,955235,580—112,332,535112,332,535(16,016,094)96,316,441—
175 KentBrooklyn, NYG201111322,037,83153,962,1691,701,93622,037,83155,664,10577,701,936(16,317,361)61,384,575—
180 Montague (fka Brooklyn Heights)Brooklyn, NYG200019332,400,00092,675,2283,859,38132,400,00096,534,609128,934,609(23,584,176)105,350,433—
180 Riverside BoulevardNew York, NYG1998516144,968,250138,346,68113,831,031144,968,250152,177,712297,145,962(72,790,895)224,355,067—
1111 Belle Pre (fka The Madison)Alexandria, VAG201436018,937,70294,758,679278,92818,937,70295,037,607113,975,309(22,340,533)91,634,776—
1210 MassWashington, D.C.G20041449,213,51236,559,1892,537,3989,213,51239,096,58748,310,099(18,478,163)29,831,936—
1401 E. MadisonSeattle, WAG(F)—10,401,95824,121,307—10,401,95824,121,30734,523,265—34,523,265—
1500 Mass AveWashington, D.C.G195155654,638,29840,361,70215,209,80754,638,29855,571,509110,209,807(26,934,077)83,275,730—
1800 Oak (fka Rosslyn)Arlington, VAG200331431,400,000109,005,7346,217,21831,400,000115,222,952146,622,952(28,057,310)118,565,642—
2201 Pershing DriveArlington, VAG201218811,321,19849,674,1752,567,69011,321,19852,241,86563,563,063(13,457,087)50,105,976—
2201 WilsonArlington, VAG200021921,900,00078,724,6633,697,72721,900,00082,422,390104,322,390(20,152,746)84,169,644—
2400 M StWashington, D.C.G200635930,006,593114,013,7854,562,28930,006,593118,576,074148,582,667(53,570,540)95,012,127—
249 Third Street (fka Kendall Square II)Cambridge, MAG(F)—4,603,32621,564,301—4,603,32621,564,30126,167,627—26,167,627—
315 on ABoston, MAG201320214,450,070115,824,930766,89614,450,070116,591,826131,041,896(18,672,172)112,369,724—
340 Fremont (fka Rincon Hill)San Francisco, CA—201634842,000,000247,811,08292,82942,000,000247,903,911289,903,911(23,751,926)266,151,985—
3003 Van Ness (fka Van Ness)Washington, D.C.—197062556,300,000141,191,5806,576,25656,300,000147,767,836204,067,836(38,475,875)165,591,961—
45 Worthington (CityView II)Boston, MA—(F)——2,644,777——2,644,7772,644,777—2,644,777—
425 MassWashington, D.C.G200955928,150,000138,600,0004,379,55128,150,000142,979,551171,129,551(48,799,382)122,330,169—
455 Eye StreetWashington, D.C.G201717411,941,40661,395,79720,85611,941,40661,416,65373,358,059(3,530,514)69,827,545—
4701 WillardChevy Chase, MDG196651776,921,130153,947,68230,602,14776,921,130184,549,829261,470,959(58,855,681)202,615,278—
4885 Edgemoor LaneBethesda, MD—(F)——3,766,336——3,766,3363,766,336—3,766,336—
4th and HillLos Angeles, CA—(F)—13,131,45614,133,106—13,131,45614,133,10627,264,562—27,264,562—
600 WashingtonNew York, NYG200413532,852,00043,140,5511,100,41032,852,00044,240,96177,092,961(20,829,342)56,263,619—
660 Washington (fka Boston Common)Boston, MAG2006420106,100,000166,311,6793,523,700106,100,000169,835,379275,935,379(41,138,920)234,796,459—
70 GreeneJersey City, NJG201048028,108,899236,763,5532,269,83328,108,899239,033,386267,142,285(73,802,320)193,339,965—
71 BroadwayNew York, NYG199723822,611,60077,492,17115,001,27522,611,60092,493,446115,105,046(47,229,499)67,875,547—
77 BluxomeSan Francisco, CA—20071025,249,12418,609,876443,6225,249,12419,053,49824,302,622(5,793,095)18,509,527—
77 Park Avenue (fka Hoboken)Hoboken, NJG200030127,900,000168,992,4406,604,70927,900,000175,597,149203,497,149(41,358,995)162,138,154—
777 SixthNew York, NYG200229465,352,70665,747,2944,014,06165,352,70669,761,355135,114,061(28,362,079)106,751,982—
88 HillsideDaly City, CAG2011957,786,80031,587,3253,069,5617,786,80034,656,88642,443,686(10,033,292)32,410,394—
855 BrannanSan Francisco, CAG201844941,363,921280,655,90932,06541,363,921280,687,974322,051,895(12,233,138)309,818,757—
AcappellaPasadena, CA—20021435,839,54829,360,4522,165,2665,839,54831,525,71837,365,266(11,163,153)26,202,113—
Acton CourtyardBerkeley, CAG2003715,550,00015,785,509303,3735,550,00016,088,88221,638,882(7,089,343)14,549,539—
Alban TowersWashington, D.C.—193422918,900,00089,794,2014,895,34418,900,00094,689,545113,589,545(22,245,031)91,344,514—
AlboradaFremont, CA—199944224,310,00059,214,1299,293,81824,310,00068,507,94792,817,947(41,761,182)51,056,765—
Altitude (fka Village at Howard Hughes, The (Lots 1 & 2))Los Angeles, CA—201654543,783,485148,378,972123,00643,783,485148,501,978192,285,463(14,509,419)177,776,044—
Alton, The (fka Millikan)Irvine, CA—201734411,049,02795,898,79527,03811,049,02795,925,833106,974,860(7,393,177)99,581,683—
Arbor TerraceSunnyvale, CA—19791759,057,30018,483,6429,866,6469,057,30028,350,28837,407,588(16,398,864)21,008,724—
Arches, TheSunnyvale, CA—197441026,650,00062,850,0002,142,60826,650,00064,992,60891,642,608(22,783,366)68,859,242—
Artech BuildingBerkeley, CAG2002271,642,0009,152,5182,118,5041,642,00011,271,02212,913,022(4,123,265)8,789,757—
Artisan on SecondLos Angeles, CA—20081188,000,40036,074,6001,046,3718,000,40037,120,97145,121,371(11,684,515)33,436,856—
Artistry Emeryville (fka Emeryville)Emeryville, CA—199426712,300,00061,466,2676,802,55512,300,00068,268,82280,568,822(17,833,191)62,735,631—
AtelierBrooklyn, NYG201512032,401,68047,135,432313,73732,401,68047,449,16979,850,849(6,648,014)73,202,835—

S-4

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2018

DescriptionInitial Cost to CompanyCost Capitalized Subsequent to Acquisition (Improvements, net) (E)Gross Amount Carried at Close of Period 12/31/18
Apartment NameLocationRetail/ Commercial SpaceDate of ConstructionApartment Units (H)LandBuilding & FixturesBuilding & FixturesLandBuilding & Fixtures (A)Total (B)Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/18Encumbrances
AvantiAnaheim, CA—198716212,960,00018,497,6833,876,99612,960,00022,374,67935,334,679(10,360,476)24,974,203—
Avenue TwoRedwood City, CA—19721237,995,00018,005,0002,385,2847,995,00020,390,28428,385,284(6,758,825)21,626,459—
Azure (fka Mission Bay-Block 13)San Francisco, CA—201527332,855,115152,628,044201,96232,855,115152,830,006185,685,121(19,304,541)166,380,580—
Bay HillLong Beach, CA—20021607,600,00027,437,2393,501,4567,600,00030,938,69538,538,695(15,493,308)23,045,387—
Beatrice, TheNew York, NY—2010302114,351,405165,648,5951,583,190114,351,405167,231,785281,583,190(46,223,187)235,360,003—
Belle Arts Condominium Homes, LLCBellevue, WA—2000163,158236,1572,09863,158238,255301,413(83,348)218,065—
Belle FontaineMarina Del Rey, CA—20031029,098,80828,701,1921,277,6049,098,80829,978,79639,077,604(8,865,592)30,212,012—
Breakwater at Marina Del ReyMarina Del Rey, CA—1964-1969224—73,189,2622,103,728—75,292,99075,292,990(19,870,053)55,422,937—
Briarwood (CA)Sunnyvale, CA—19851929,991,50022,247,2784,121,5299,991,50026,368,80736,360,307(17,956,685)18,403,622—
Bridford Lakes IIGreensboro, NC—(F)—200,000——200,000—200,000—200,000—
Brooklyner, The (fka 111 Lawrence)Brooklyn, NYG201049040,099,922221,438,6313,760,04940,099,922225,198,680265,298,602(61,813,037)203,485,565—
C on PicoLos Angeles, CA—20149417,125,76628,074,234192,53517,125,76628,266,76945,392,535(3,822,366)41,570,169—
Carlyle MillAlexandria, VA—200231710,000,00051,367,9138,584,02310,000,00059,951,93669,951,936(32,763,420)37,188,516—
Carmel TerraceSan Diego, CA—1988-19893842,288,30020,596,28112,173,0352,288,30032,769,31635,057,616(27,594,760)7,462,856—
CascadeSeattle, WAG201747723,751,564148,150,3091,10923,751,564148,151,418171,902,982(8,307,229)163,595,753—
Centennial (fka Centennial Court & Centennial Tower)Seattle, WAG1991/20014089,700,00070,080,37812,240,9249,700,00082,321,30292,021,302(40,391,210)51,630,092—
Centre Club CombinedOntario, CA—1994 & 20024127,436,00033,014,7899,207,5017,436,00042,222,29049,658,290(24,948,636)24,709,654—
ChloeSeattle, WAG201011714,835,57139,359,650628,87914,835,57139,988,52954,824,100(2,779,352)52,044,748—
Church CornerCambridge, MAG1987855,220,00016,744,6433,104,3585,220,00019,849,00125,069,001(10,167,185)14,901,816—
City Gate at Cupertino (fka Cupertino)Cupertino, CA—199831140,400,00095,937,0467,410,55240,400,000103,347,598143,747,598(25,436,921)118,310,677—
City PointeFullerton, CAG20041836,863,79236,476,2082,047,7046,863,79238,523,91245,387,704(14,150,420)31,237,284—
City Square Bellevue (fka Bellevue)Bellevue, WAG199819115,100,00041,876,2573,476,52515,100,00045,352,78260,452,782(11,624,754)48,828,028—
CityView at LongwoodBoston, MAG197029514,704,89879,195,10213,594,83014,704,89892,789,932107,494,830(33,266,169)74,228,661—
Clarendon, TheArlington, VAG200529230,400,340103,824,6602,390,10730,400,340106,214,767136,615,107(33,551,922)103,063,185—
Cleo, TheLos Angeles, CA—1989926,615,46714,829,3353,945,6396,615,46718,774,97425,390,441(9,223,334)16,167,107—
Connecticut HeightsWashington, D.C.—197451827,600,000114,002,2959,236,60427,600,000123,238,899150,838,899(29,100,080)121,738,819—
Corcoran House at DuPont Circle (fka DuPont Circle)Washington, D.C.G196113813,500,00026,913,1131,945,26813,500,00028,858,38142,358,381(7,970,206)34,388,175—
Courthouse PlazaArlington, VAG1990396—87,386,0245,810,948—93,196,97293,196,972(25,008,039)68,188,933—
Creekside (San Mateo)San Mateo, CA—19851929,606,60021,193,2314,714,2949,606,60025,907,52535,514,125(17,827,109)17,687,016—
Cronins LandingWaltham, MAG199828132,300,00085,119,3249,986,94132,300,00095,106,265127,406,265(23,112,933)104,293,332—
Crystal PlaceArlington, VA—198618117,200,00047,918,9753,799,78017,200,00051,718,75568,918,755(13,497,731)55,421,024—
Deerwood (SD)San Diego, CA—19903162,082,09518,739,81515,328,5422,082,09534,068,35736,150,452(29,457,997)6,692,455—
Del Mar RidgeSan Diego, CA—19981817,801,82436,948,1763,997,6637,801,82440,945,83948,747,663(16,173,191)32,574,472—
Eagle CanyonChino Hills, CA—19852521,808,90016,274,36110,216,9621,808,90026,491,32328,300,223(19,595,575)8,704,648—
Edgemont at Bethesda MetroBethesda, MD—198912213,092,55243,907,4481,570,42013,092,55245,477,86858,570,420(13,558,521)45,011,899—
ElevéGlendale, CAG201320814,080,56056,419,440741,17314,080,56057,160,61371,241,173(12,317,955)58,923,218—
Emerson PlaceBoston, MAG196244414,855,00057,566,63631,456,25014,855,00089,022,886103,877,886(59,097,457)44,780,429—
Encore at Sherman Oaks, TheSherman Oaks, CA—19881748,700,00025,446,0032,240,5568,700,00027,686,55936,386,559(9,771,700)26,614,859—
Fountains at Emerald Park (fka Emerald Park)Dublin, CA—200032425,900,00083,986,2172,547,78825,900,00086,534,005112,434,005(22,068,994)90,365,011—
Fremont CenterFremont, CAG200232225,800,00078,753,1144,235,68125,800,00082,988,795108,788,795(21,299,475)87,489,320—
Gallery, TheHermosa Beach, CA—197116918,144,00046,567,9412,905,70718,144,00049,473,64867,617,648(23,145,881)44,471,767—
Gateway at Malden CenterMalden, MAG19882039,209,78025,722,66615,394,6189,209,78041,117,28450,327,064(24,990,335)25,336,729—
Geary Court YardSan Francisco, CA—19901641,722,40015,471,4295,447,8191,722,40020,919,24822,641,648(14,374,505)8,267,143—
GirardBoston, MAG2016160—102,450,328792,675—103,243,003103,243,003(7,551,227)95,691,776—
Hampshire PlaceLos Angeles, CA—198925910,806,00030,335,3306,750,49310,806,00037,085,82347,891,823(18,306,144)29,585,679—
Harbor StepsSeattle, WAG200075859,403,601158,829,43235,187,52559,403,601194,016,957253,420,558(88,466,202)164,954,356—
Heights on Capitol HillSeattle, WAG20061045,425,00021,138,0281,757,7395,425,00022,895,76728,320,767(9,916,225)18,404,542—
Helios (fka 2nd+Pine)Seattle, WAG201739818,061,674206,297,14414,83118,061,674206,311,975224,373,649(11,942,676)212,430,973—

S-5

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2018

DescriptionInitial Cost to CompanyCost Capitalized Subsequent to Acquisition (Improvements, net) (E)Gross Amount Carried at Close of Period 12/31/18
Apartment NameLocationRetail/ Commercial SpaceDate of ConstructionApartment Units (H)LandBuilding & FixturesBuilding & FixturesLandBuilding & Fixtures (A)Total (B)Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/18Encumbrances
Heritage at Stone RidgeBurlington, MA—200518010,800,00031,808,3352,560,25610,800,00034,368,59145,168,591(16,558,111)28,610,480—
Heritage RidgeLynwood, WA—19991976,895,00018,983,5974,341,5516,895,00023,325,14830,220,148(10,981,639)19,238,509—
HesbyNorth Hollywood, CA—201330823,299,892102,700,1081,045,44323,299,892103,745,551127,045,443(21,321,630)105,723,813—
Highlands at South PlainfieldSouth Plainfield, NJ—200025210,080,00037,526,9122,174,17210,080,00039,701,08449,781,084(18,721,344)31,059,740—
HikariLos Angeles, CAG20071289,435,76032,564,240924,0319,435,76033,488,27142,924,031(10,500,837)32,423,194—
Hudson CrossingNew York, NYG200325923,420,00069,977,6992,641,74223,420,00072,619,44196,039,441(35,972,698)60,066,743—
Hudson PointeJersey City, NJ—20031825,350,00041,114,0746,559,2555,350,00047,673,32953,023,329(24,093,676)28,929,653—
Hunt Club IICharlotte, NC—(F)—100,000——100,000—100,000—100,000—
Ivory WoodBothell, WA—20001442,732,80013,888,2821,470,1902,732,80015,358,47218,091,272(7,954,981)10,136,291—
Jia (fka Chinatown Gateway)Los Angeles, CAG201428014,791,83177,708,868400,96714,791,83178,109,83592,901,666(19,685,769)73,215,897—
Junction 47 (fka West Seattle)Seattle, WAG201520611,726,30556,246,557110,85211,726,30556,357,40968,083,714(7,480,950)60,602,764—
Kelvin, The (fka Modera)Irvine, CA—201519415,521,55264,853,448520,48515,521,55265,373,93380,895,485(10,153,159)70,742,326—
Kenwood MewsBurbank, CA—199114114,100,00024,662,8834,006,94414,100,00028,669,82742,769,827(13,857,402)28,912,425—
Laguna ClaraSanta Clara, CA—197226413,642,42028,128,2605,050,29013,642,42033,178,55046,820,970(18,704,128)28,116,842—
Landings at Port ImperialW. New York, NJ—199927627,246,04537,741,05012,850,24327,246,04550,591,29377,837,338(31,145,964)46,691,374—
Liberty TowerArlington, VAG200823516,382,82283,817,0782,105,71516,382,82285,922,793102,305,615(28,986,710)73,318,905—
Lincoln HeightsQuincy, MA—19913365,928,40033,595,26214,626,7115,928,40048,221,97354,150,373(36,031,322)18,119,051—
Lindley ApartmentsEncino, CA—20041295,805,00025,705,0001,577,5135,805,00027,282,51333,087,513(9,306,827)23,780,686—
Lofts 590Arlington, VA—200521220,100,00067,909,023732,96320,100,00068,641,98688,741,986(16,094,383)72,647,603—
Lofts at Kendall Square (fka Kendall Square)Cambridge, MA—199818618,696,67478,445,6576,554,45218,696,67485,000,109103,696,783(20,874,720)82,822,063—
Longacre HouseNew York, NYG200029373,170,04553,962,5103,845,83373,170,04557,808,343130,978,388(24,364,056)106,614,332—
Longfellow PlaceBoston, MAG197571038,264,917132,175,91582,037,08738,264,917214,213,002252,477,919(143,886,095)108,591,824—
Longview PlaceWaltham, MA—200434820,880,00090,255,5097,188,62520,880,00097,444,134118,324,134(45,368,039)72,956,095—
MantenaNew York, NYG20129822,346,51361,501,158942,45622,346,51362,443,61484,790,127(15,923,495)68,866,632—
Marina 41 (fka Marina Del Rey)Marina Del Rey, CA—1973623—168,842,4428,397,509—177,239,951177,239,951(47,146,998)130,092,953—
Mariposa at Playa Del Rey (fka Playa Del Rey)Playa Del Rey, CA—200435460,900,00089,311,4825,580,20660,900,00094,891,688155,791,688(24,699,526)131,092,162—
Market Street VillageSan Diego, CA—200622913,740,00040,757,3012,328,66413,740,00043,085,96556,825,965(19,556,103)37,269,862—
Metro on FirstSeattle, WAG20021028,540,00012,209,9812,362,3698,540,00014,572,35023,112,350(6,573,840)16,538,510—
Milano LoftsLos Angeles, CAG1925/2006998,125,21627,378,7842,883,9918,125,21630,262,77538,387,991(8,050,414)30,337,577—
Montierra (CA)San Diego, CA—19902728,160,00029,360,9388,205,1078,160,00037,566,04545,726,045(25,291,041)20,435,004—
Mosaic at MetroHyattsville, MD—2008260—59,580,8981,270,920—60,851,81860,851,818(21,513,518)39,338,300—
Mountain View RedevelopmentMountain View, CA—(F)——160,996——160,996160,996—160,996—
Mozaic at Union StationLos Angeles, CA—20072728,500,00052,529,4462,384,5788,500,00054,914,02463,414,024(24,082,672)39,331,352—
Murray Hill Tower (fka Murray Hill)New York, NYG197427075,800,000102,705,4019,551,10775,800,000112,256,508188,056,508(30,064,769)157,991,739—
North Pier at HarborsideJersey City, NJ—20032974,000,15994,290,5904,743,8364,000,15999,034,426103,034,585(49,673,731)53,360,854—
NorthglenValencia, CA—19882349,360,00020,778,5535,764,4199,360,00026,542,97235,902,972(15,274,806)20,628,166—
NorthparkBurlingame, CA—197251038,607,00077,472,21714,751,58538,607,00092,223,802130,830,802(36,348,320)94,482,482—
NorthridgePleasant Hill, CA—19742215,524,00014,691,70511,428,4025,524,00026,120,10731,644,107(19,830,954)11,813,153—
Oak Park CombinedAgoura Hills, CA—1989 & 19904443,390,70030,517,27410,707,9303,390,70041,225,20444,615,904(31,925,485)12,690,419—
OaksSanta Clarita, CA—200052023,400,00061,020,4386,184,21523,400,00067,204,65390,604,653(36,500,570)54,104,083—
Oakwood Crystal CityArlington, VA—198716215,400,00035,474,3364,071,71915,400,00039,546,05554,946,055(10,060,766)44,885,289—
Ocean CrestSolana Beach, CA—19861465,111,20011,910,4384,523,1285,111,20016,433,56621,544,766(11,149,744)10,395,022—
Odin (fka Tallman)Seattle, WA—201530116,807,51963,651,39443,18616,807,51963,694,58080,502,099(8,420,800)72,081,299—
Old Town LoftsRedmond, WAG20141497,740,46744,146,181802,9667,740,46744,949,14752,689,614(6,895,004)45,794,610—
One Henry AdamsSan Francisco, CAG201624130,224,393138,212,56810,36630,224,393138,222,934168,447,327(10,939,933)157,507,394—
One India Street (fka Oakwood Boston)Boston, MAG19019422,200,00028,672,9793,346,23522,200,00032,019,21454,219,214(8,203,480)46,015,734—
Pacific PlaceLos Angeles, CA—200843032,250,000110,750,0001,796,63232,250,000112,546,632144,796,632(27,949,911)116,846,721—

S-6

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2018

DescriptionInitial Cost to CompanyCost Capitalized Subsequent to Acquisition (Improvements, net) (E)Gross Amount Carried at Close of Period 12/31/18
Apartment NameLocationRetail/ Commercial SpaceDate of ConstructionApartment Units (H)LandBuilding & FixturesBuilding & FixturesLandBuilding & Fixtures (A)Total (B)Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/18Encumbrances
Packard BuildingSeattle, WAG2010615,911,04119,954,959691,3635,911,04120,646,32226,557,363(3,017,526)23,539,837—
Parc 77New York, NYG190313740,504,00018,025,6796,345,23240,504,00024,370,91164,874,911(13,224,242)51,650,669—
Parc CameronNew York, NYG192716637,600,0009,855,5977,488,87537,600,00017,344,47254,944,472(11,104,877)43,839,595—
Parc ColiseumNew York, NYG191017752,654,00023,045,7519,179,11252,654,00032,224,86384,878,863(18,199,716)66,679,147—
Parc East TowersNew York, NYG1977324102,163,000108,989,40210,892,394102,163,000119,881,796222,044,796(52,426,236)169,618,560—
Parc on Powell (fka Parkside at Emeryville)Emeryville, CAG201517316,667,05965,073,509212,58016,667,05965,286,08981,953,148(9,333,810)72,619,338—
Park at Pentagon Row (fka Pentagon City)Arlington, VAG199029828,300,00078,838,1842,436,69528,300,00081,274,879109,574,879(20,074,236)89,500,643—
Park ConnecticutWashington, D.C.—200014213,700,00059,087,5191,663,39413,700,00060,750,91374,450,913(14,438,751)60,012,162—
Park Hacienda (fka Hacienda)Pleasanton, CA—200054043,200,000128,753,3594,858,18443,200,000133,611,543176,811,543(34,884,871)141,926,672—
Park West (CA)Los Angeles, CA—1987/19904443,033,50027,302,38311,262,2033,033,50038,564,58641,598,086(29,343,622)12,254,464—
ParksideUnion City, CA—19792086,246,70011,827,4537,163,4516,246,70018,990,90425,237,604(12,327,804)12,909,800—
Pearl, The (WA)Seattle, WAG2008806,972,58526,527,415999,5096,972,58527,526,92434,499,509(3,981,489)30,518,020—
Pearl MDR (fka Oakwood Marina Del Rey)Marina Del Rey, CAG1969597—120,795,3594,778,318—125,573,677125,573,677(33,800,305)91,773,372—
PegasusLos Angeles, CAG1949/200332218,094,05281,905,9486,080,34518,094,05287,986,293106,080,345(29,282,736)76,797,609—
Playa PacificaHermosa Beach, CA—197228535,100,00033,473,82223,015,28135,100,00056,489,10391,589,103(28,347,617)63,241,486—
PortofinoChino Hills, CA—19891763,572,40014,660,9943,777,3923,572,40018,438,38622,010,786(13,473,788)8,536,998—
Portofino (Val)Valencia, CA—19892168,640,00021,487,1265,637,0288,640,00027,124,15435,764,154(16,434,227)19,329,927—
Portside TowersJersey City, NJG1992-199752722,487,00696,842,91323,175,33922,487,006120,018,252142,505,258(84,850,599)57,654,659—
Potrero 1010San Francisco, CAG201645340,830,011179,509,834120,10540,830,011179,629,939220,459,950(18,869,635)201,590,315—
Prado (fka Glendale)Glendale, CA—1988264—67,977,3134,453,741—72,431,05472,431,054(18,216,430)54,214,624—
Prime, TheArlington, VA—200227334,625,00077,879,7401,499,00534,625,00079,378,745114,003,745(30,036,655)83,967,090—
Prism at Park Avenue South (fka 400 Park Avenue South)New York, NYG201526976,292,169171,558,177127,66576,292,169171,685,842247,978,011(25,554,087)222,423,924—
Promenade at Town Center I & IIValencia, CA—200156428,200,00069,795,9159,741,25428,200,00079,537,169107,737,169(41,393,133)66,344,036—
ProvidenceBothell, WA—20002003,573,62119,055,5053,095,2943,573,62122,150,79925,724,420(11,070,038)14,654,382—
Quarry HillsQuincy, MA—200631626,900,00084,411,1622,829,89026,900,00087,241,052114,141,052(22,257,122)91,883,930—
Radius UptownDenver, CO—201737213,644,960121,899,03293,77413,644,960121,992,806135,637,766(3,902,658)131,735,108—
Red 160 (fka Redmond Way)Redmond, WAG201125015,546,37665,320,0101,306,82215,546,37666,626,83282,173,208(18,309,824)63,863,384—
Redmond CourtBellevue, WA—197720610,300,00033,488,7451,106,97210,300,00034,595,71744,895,717(9,833,862)35,061,855—
Regency PalmsHuntington Beach, CA—19693101,857,40016,713,2546,506,4171,857,40023,219,67125,077,071(18,325,451)6,751,620—
Renaissance VillasBerkeley, CAG1998342,458,0004,542,000200,8432,458,0004,742,8437,200,843(2,002,770)5,198,073—
Reserve at Clarendon Centre, TheArlington, VAG200325210,500,00052,812,9354,759,25810,500,00057,572,19368,072,193(30,673,683)37,398,510—
Reserve at Eisenhower, TheAlexandria, VA—20022266,500,00034,585,0604,515,7996,500,00039,100,85945,600,859(20,712,491)24,888,368—
Reserve at Empire LakesRancho Cucamonga, CA—200546716,345,00073,080,6703,320,03116,345,00076,400,70192,745,701(36,394,123)56,351,578—
Reserve at Mountain View (fka Mountain View)Mountain View, CA—196518027,000,00033,029,6057,621,47827,000,00040,651,08367,651,083(10,869,571)56,781,512—
Reserve at Potomac YardAlexandria, VA—200258811,918,91768,862,64115,256,45711,918,91784,119,09896,038,015(42,003,388)54,034,627—
Reserve at Town Center I-III (WA)Mill Creek, WAG2001, 2009, 201458416,768,70577,511,5235,623,36016,768,70583,134,88399,903,588(33,572,969)66,330,619—
Residences at Westgate I (fka Westgate II)Pasadena, CAG201425217,859,785109,259,858353,39817,859,785109,613,256127,473,041(22,357,191)105,115,850—
Residences at Westgate II (fka Westgate III)Pasadena, CAG20158812,118,24840,449,02860,08512,118,24840,509,11352,627,361(5,850,705)46,776,656—
Rianna I & IISeattle, WAG2000/20021564,430,00029,298,0961,133,3354,430,00030,431,43134,861,431(11,522,763)23,338,668—
Ridgewood Village I&IISan Diego, CA—199740811,809,50034,004,0485,830,81111,809,50039,834,85951,644,359(26,215,341)25,429,018—
Riva Terra I (fka Redwood Shores)Redwood City, CA—198630434,963,35584,587,6584,579,23334,963,35589,166,891124,130,246(23,808,487)100,321,759—
Riva Terra II (fka Harborside)Redwood City, CA—198614917,136,64540,536,5312,273,23717,136,64542,809,76859,946,413(10,623,659)49,322,754—
RiverparkRedmond, WAG200932114,355,00080,894,0493,905,45014,355,00084,799,49999,154,499(24,557,962)74,596,537—
Rivington, TheHoboken, NJ—199924034,340,640112,110,289524,73134,340,640112,635,020146,975,660(6,937,992)140,037,668—
Rosecliff IIQuincy, MA—20051304,922,84030,202,1601,342,5884,922,84031,544,74836,467,588(10,069,250)26,398,338—

S-7

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2018

DescriptionInitial Cost to CompanyCost Capitalized Subsequent to Acquisition (Improvements, net) (E)Gross Amount Carried at Close of Period 12/31/18
Apartment NameLocationRetail/ Commercial SpaceDate of ConstructionApartment Units (H)LandBuilding & FixturesBuilding & FixturesLandBuilding & Fixtures (A)Total (B)Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/18Encumbrances
Sakura CrossingLos Angeles, CAG200923014,641,99042,858,0101,440,82214,641,99044,298,83258,940,822(14,646,231)44,294,591—
Seventh & JamesSeattle, WAG199296663,8005,974,8034,466,962663,80010,441,76511,105,565(7,764,932)3,340,633—
Sheffield CourtArlington, VA—19865973,342,38131,337,33215,840,9213,342,38147,178,25350,520,634(37,713,141)12,807,493—
Siena TerraceLake Forest, CA—19883568,900,00024,083,0247,343,4778,900,00031,426,50140,326,501(21,400,131)18,926,370—
SkycrestValencia, CA—199926410,560,00025,574,4575,774,66710,560,00031,349,12441,909,124(18,371,799)23,537,325—
Skyhouse DenverDenver, COG201735413,562,331126,360,12998,23113,562,331126,458,360140,020,691(3,622,426)136,398,265—
SkylarkUnion City, CA—19861741,781,60016,731,9165,618,5771,781,60022,350,49324,132,093(14,414,952)9,717,141—
Skyline TerraceBurlingame, CA—1967 & 198713816,836,00035,414,0008,156,47116,836,00043,570,47160,406,471(15,013,850)45,392,621—
Skyline TowersFalls Church, VAG197193978,278,20091,485,59145,016,30378,278,200136,501,894214,780,094(77,594,870)137,185,224—
SkyviewRancho Santa Margarita, CA—19992603,380,00021,952,8635,500,9933,380,00027,453,85630,833,856(17,769,582)13,064,274—
SoMa IISan Francisco, CA—(F)—29,406,6065,741,605—29,406,6065,741,60535,148,211—35,148,211—
Sonterra at Foothill RanchFoothill Ranch, CA—19973007,503,40024,048,5076,018,2507,503,40030,066,75737,570,157(19,961,454)17,608,703—
South City Station (fka South San Francisco)San Francisco, CAG200736868,900,00079,476,8614,611,76668,900,00084,088,627152,988,627(21,524,365)131,464,262—
SouthwoodPalo Alto, CA—19851006,936,60014,324,0696,760,0166,936,60021,084,08528,020,685(12,852,392)15,168,293—
Springbrook EstatesRiverside, CA—(F)—18,200,0001,145,000—18,200,0001,145,00019,345,000—19,345,000—
SpringlineSeattle, WAG20161369,163,66747,910,981390,6999,163,66748,301,68057,465,347(4,533,798)52,931,549—
Summerset Village IIChatsworth, CA—(F)—260,646——260,646—260,646—260,646—
Summit at Sausalito (fka Sausalito)Sausalito, CA—197819826,000,00028,435,0249,140,86226,000,00037,575,88663,575,886(11,439,522)52,136,364—
Ten23 (fka 500 West 23rd Street)New York, NYG2011111—58,881,873337,851—59,219,72459,219,724(14,245,570)44,974,154—
Terraces, TheSan Francisco, CAG197511714,087,61016,314,1511,758,32114,087,61018,072,47232,160,082(6,415,798)25,744,284—
Third SquareCambridge, MAG2008/200947126,767,171218,822,7287,870,44326,767,171226,693,171253,460,342(78,218,773)175,241,569—
Three20Seattle, WAG20131347,030,76629,005,762756,4727,030,76629,762,23436,793,000(6,893,992)29,899,008—
ToscanaIrvine, CA—1991/199356339,410,00050,806,07220,588,73239,410,00071,394,804110,804,804(40,974,164)69,830,640—
Town Square at Mark Center I (fka Millbrook I)Alexandria, VA—199640624,360,00086,178,7148,490,37824,360,00094,669,092119,029,092(44,377,201)74,651,891—
Town Square at Mark Center IIAlexandria, VA—200127215,568,46455,029,6074,433,41715,568,46459,463,02475,031,488(21,151,199)53,880,289—
Troy BostonBoston, MAG201537834,641,051181,602,575101,57334,641,051181,704,148216,345,199(6,623,226)209,721,973—
Urbana (fka Market Street Landing)Seattle, WAG201428712,542,41875,800,0901,262,29812,542,41877,062,38889,604,806(17,836,404)71,768,402—
Uwajimaya VillageSeattle, WA—20021768,800,00022,188,2882,039,0138,800,00024,227,30133,027,301(11,748,837)21,278,464—
Vantage PointeSan Diego, CAG20096799,403,960190,596,04010,163,1299,403,960200,759,169210,163,129(66,454,004)143,709,125—
VeloceRedmond, WAG200932215,322,72476,176,5941,429,92515,322,72477,606,51992,929,243(20,521,554)72,407,689—
Verde Condominium Homes (fka Mission Verde, LLC)San Jose, CA—19861085,190,7009,679,1094,455,6245,190,70014,134,73319,325,433(10,358,163)8,967,270—
Veridian (fka Silver Spring)Silver Spring, MDG200945718,539,817130,407,3653,510,35418,539,817133,917,719152,457,536(43,822,971)108,634,565—
Versailles (K-Town)Los Angeles, CA—200822510,590,97544,409,0251,665,10910,590,97546,074,13456,665,109(17,179,349)39,485,760—
Victor on VeniceLos Angeles, CAG2,00611510,350,00035,433,4371,003,07610,350,00036,436,51346,786,513(15,908,114)30,878,399—
Villa SolanaLaguna Hills, CA—19842721,665,10014,985,67810,741,6081,665,10025,727,28627,392,386(20,635,508)6,756,878—
Village at Del Mar Heights, The (fka Del Mar Heights)San Diego, CA—198616815,100,00040,859,3961,925,88615,100,00042,785,28257,885,282(11,360,058)46,525,224—
VintageOntario, CA—2005-20073007,059,23047,677,7621,539,5557,059,23049,217,31756,276,547(21,895,611)34,380,936—
Virginia SquareArlington, VAG2002231—85,940,0035,670,439—91,610,44291,610,442(22,371,237)69,239,205—
Vista 99 (fka Tasman)San Jose, CA—201655427,709,329176,040,861230,94127,709,329176,271,802203,981,131(19,667,441)184,313,690—
Vista Del LagoMission Viejo, CA—1986-19886084,525,80040,736,29317,318,9364,525,80058,055,22962,581,029(48,290,527)14,290,502—
Vista on CourthouseArlington, VA—2,00822015,550,26069,449,7402,389,56315,550,26071,839,30387,389,563(25,840,645)61,548,918—
Walden ParkCambridge, MA—1,96623212,448,88852,044,4484,411,29512,448,88856,455,74368,904,631(19,527,545)49,377,086—
Water Park TowersArlington, VA—1,98936234,400,000108,485,85910,053,79034,400,000118,539,649152,939,649(30,280,723)122,658,926—
Watertown SquareWatertown, MAG200513416,800,00034,074,0561,559,27016,800,00035,633,32652,433,326(8,944,170)43,489,156—
West 96thNew York, NYG198720784,800,00067,055,5025,705,81484,800,00072,761,316157,561,316(20,616,675)136,944,641—
West End Apartments (fka Emerson Place/CRP II)Boston, MAG2008310469,546163,123,0223,668,190469,546166,791,212167,260,758(61,427,741)105,833,017—
West End Tower (fka Garden Garage)Boston, MA—(F)—10,424,00038,294,331—10,424,00038,294,33148,718,331—48,718,331—
Westchester at RockvilleRockville, MD—200919210,600,00044,135,207884,69510,600,00045,019,90255,619,902(11,209,736)44,410,166—

S-8

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2018

DescriptionInitial Cost to CompanyCost Capitalized Subsequent to Acquisition (Improvements, net) (E)Gross Amount Carried at Close of Period 12/31/18
Apartment NameLocationRetail/ Commercial SpaceDate of ConstructionApartment Units (H)LandBuilding & FixturesBuilding & FixturesLandBuilding & Fixtures (A)Total (B)Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/18Encumbrances
WestmontNew York, NYG198616364,900,00061,143,2594,398,85264,900,00065,542,111130,442,111(16,741,081)113,701,030—
WestsideLos Angeles, CA—200420434,200,00056,962,6303,066,08834,200,00060,028,71894,228,718(14,822,757)79,405,961—
Westside Barrington (fka Westside Villas III)Los Angeles, CA—1999363,060,0005,538,8711,111,2613,060,0006,650,1329,710,132(3,887,667)5,822,465—
Westside Barry (Westside Villas VI)Los Angeles, CA—1989181,530,0003,023,523648,1191,530,0003,671,6425,201,642(2,196,161)3,005,481—
Westside Beloit (fka Westside Villas I)Los Angeles, CA—1999211,785,0003,233,254736,2651,785,0003,969,5195,754,519(2,392,392)3,362,127—
Westside Bundy (fka Westside Villas II)Los Angeles, CA—1999231,955,0003,541,435660,0891,955,0004,201,5246,156,524(2,501,347)3,655,177—
Westside Butler (fka Westside Villas IV)Los Angeles, CA—1999363,060,0005,539,3901,003,4683,060,0006,542,8589,602,858(3,890,635)5,712,223—
Westside Villas (fka Westside Villas V &VII)Los Angeles, CA—1999 & 20011139,605,00019,983,3852,720,0739,605,00022,703,45832,308,458(13,177,962)19,130,496—
Windridge (CA)Laguna Niguel, CA—19893442,662,90023,985,49712,358,1982,662,90036,343,69539,006,595(27,568,039)11,438,556—
Wood Creek IPleasant Hill, CA—19872569,729,90023,009,7689,340,8149,729,90032,350,58242,080,482(23,075,720)19,004,762—
Management BusinessChicago, IL—(D)———117,010,784—117,010,784117,010,784(96,891,265)20,119,519—
Operating PartnershipChicago, IL—(F)——10,278,996——10,278,99610,278,996—10,278,996—
OtherN/A—————74,341—74,34174,341(29,979)44,362—
Wholly Owned Unencumbered62,8624,900,861,38715,320,429,0091,387,840,3364,900,861,38716,708,269,34521,609,130,732(5,400,484,879)16,208,645,853—
Wholly Owned Encumbered:
1401 Joyce on Pentagon RowArlington, VA—20043269,780,00089,668,1655,209,2629,780,00094,877,427104,657,427(34,814,020)69,843,40757,384,106
2501 PorterWashington, D.C.—198820213,000,00075,271,1796,617,63713,000,00081,888,81694,888,816(20,177,043)74,711,773(I)
300 East 39th (fka East 39th)New York, NYG200125448,900,00096,174,6394,927,49948,900,000101,102,138150,002,138(25,417,391)124,584,74761,139,469
303 East 83rd (fka Camargue)New York, NYG197626179,400,00079,122,6246,389,68979,400,00085,512,313164,912,313(22,235,813)142,676,500(I)
425 BroadwaySanta Monica, CAG200110112,600,00034,394,7723,606,78612,600,00038,001,55850,601,558(9,639,353)40,962,205(I)
55 West Fifth I & II (fka Townhouse Plaza and Gardens)San Mateo, CA—1964/197224121,041,71071,931,32313,082,23721,041,71085,013,560106,055,270(25,342,170)80,713,10025,456,082
800 Sixth Ave (fka Chelsea)New York, NYG200326659,900,000155,861,6052,551,09359,900,000158,412,698218,312,698(38,237,590)180,075,10878,599,339
929 Mass (fka 929 House)Cambridge, MAG19751273,252,99321,745,5957,292,1883,252,99329,037,78332,290,776(18,665,226)13,625,550119,684
Academy VillageNorth Hollywood, CA—198924825,000,00023,593,1948,913,53225,000,00032,506,72657,506,726(19,215,717)38,291,00919,985,389
AlcyoneSeattle, WAG200416211,379,49749,360,5031,103,68011,379,49750,464,18361,843,680(9,767,220)52,076,46027,756,919
Artisan SquareNorthridge, CA—20021407,000,00020,537,3591,670,9567,000,00022,208,31529,208,315(12,312,121)16,896,19422,766,586
Avenir ApartmentsBoston, MAG2009241—114,321,6193,484,463—117,806,082117,806,082(28,125,723)89,680,35987,221,511
Bella Vista I, II, III CombinedWoodland Hills, CA—2003-200757931,682,754121,095,7868,186,19031,682,754129,281,976160,964,730(58,472,749)102,491,98157,966,537
BerkeleyanBerkeley, CAG1998564,377,00016,022,110673,9014,377,00016,696,01121,073,011(7,235,667)13,837,3448,100,556
Calvert WoodleyWashington, D.C.—196213612,600,00043,527,3792,208,01112,600,00045,735,39058,335,390(11,663,122)46,672,268(I)
Chelsea SquareRedmond, WA—19911133,397,1009,289,0742,730,5683,397,10012,019,64215,416,742(8,256,357)7,160,3859,234,049
Citrus SuitesSanta Monica, CA—1978709,000,00016,950,3262,094,9699,000,00019,045,29528,045,295(4,826,188)23,219,107(I)
Cleveland HouseWashington, D.C.—195321418,300,00066,392,4144,858,25418,300,00071,250,66889,550,668(17,799,363)71,751,305(I)
Columbia CrossingArlington, VA—199124723,500,00053,045,0732,877,50723,500,00055,922,58079,422,580(14,794,273)64,628,307(I)
Estancia at Santa Clara (fka Santa Clara)Santa Clara, CA—2000450—123,759,8041,657,294—125,417,098125,417,098(32,083,921)93,333,177(I)
FairchaseFairfax, VA—200739223,500,00087,722,3211,210,92523,500,00088,933,246112,433,246(21,595,734)90,837,512(I)
FairfieldStamford, CTG19962636,510,20039,690,1208,602,3596,510,20048,292,47954,802,679(34,338,783)20,463,89631,348,151
Fine Arts BuildingBerkeley, CAG20041007,817,00026,462,772880,9667,817,00027,343,73835,160,738(11,703,908)23,456,83015,772,690
Flats at DuPont CircleWashington, D.C.—196730635,200,000108,768,1983,179,20935,200,000111,947,407147,147,407(25,978,612)121,168,795(I)
Gaia BuildingBerkeley, CAG2000917,113,00025,623,826400,1527,113,00026,023,97833,136,978(11,264,581)21,872,39714,310,309
Gaithersburg StationGaithersburg, MDG201338917,500,00074,678,9171,136,62517,500,00075,815,54293,315,542(17,882,838)75,432,70494,150,066
GloLos Angeles, CAG200820116,047,02248,650,9633,425,04916,047,02252,076,01268,123,034(15,990,887)52,132,14732,199,417
HathawayLong Beach, CA—19873852,512,50022,611,91210,753,0542,512,50033,364,96635,877,466(25,621,271)10,256,19546,495,108
Kelvin Court (fka Alta Pacific)Irvine, CA—200813210,752,14534,628,115656,46010,752,14535,284,57546,036,720(13,177,993)32,858,72726,234,062
La Terrazza at Colma StationColma, CAG2005155—41,251,0442,304,807—43,555,85143,555,851(18,264,493)25,291,35824,997,955
Liberty ParkBraintree, MA—20002025,977,50426,749,1116,765,7825,977,50433,514,89339,492,397(18,532,044)20,960,35324,966,238
Mill CreekMilpitas, CA—199151612,858,69357,168,50314,775,23912,858,69371,943,74284,802,435(36,507,386)48,295,04969,282,256
ModaSeattle, WAG200925112,649,22836,842,0121,379,25112,649,22838,221,26350,870,491(13,657,076)37,213,415(J)

S-9

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2018

DescriptionInitial Cost to CompanyCost Capitalized Subsequent to Acquisition (Improvements, net) (E)Gross Amount Carried at Close of Period 12/31/18
Apartment NameLocationRetail/ Commercial SpaceDate of ConstructionApartment Units (H)LandBuilding & FixturesBuilding & FixturesLandBuilding & Fixtures (A)Total (B)Accumulated Depreciation (C)Investment in Real Estate, Net at 12/31/18Encumbrances
Olympus TowersSeattle, WAG200032814,752,03473,335,4259,447,96814,752,03482,783,39397,535,427(43,130,107)54,405,32049,823,673
Park Place at San Mateo (fka San Mateo)San Mateo, CAG200157571,900,000211,907,14113,040,03771,900,000224,947,178296,847,178(56,244,011)240,603,167(I)
Reserve at Fairfax CornerFairfax, VA—200165215,804,05763,129,05111,739,96215,804,05774,869,01390,673,070(41,689,916)48,983,15484,717,832
SoMa Square Apartments (fka South Market)San Francisco, CAG198641079,900,000177,316,97712,766,99279,900,000190,083,969269,983,969(45,375,257)224,608,712(I)
Square OneSeattle, WA—20141127,222,54426,277,45674,5627,222,54426,352,01833,574,562(5,408,769)28,165,793(J)
Summerset VillageChatsworth, CA—19852802,629,80423,670,8898,181,0142,629,80431,851,90334,481,707(23,765,883)10,715,82438,020,343
TeresinaChula Vista, CA—200044028,600,00061,916,6706,795,44828,600,00068,712,11897,312,118(31,806,076)65,506,04237,940,000
Touriel BuildingBerkeley, CAG2004352,736,0007,810,027199,9652,736,0008,009,99210,745,992(3,570,951)7,175,0414,874,236
Vantage HollywoodLos Angeles, CA—198729842,580,32656,014,6741,203,27142,580,32657,217,94599,798,271(10,415,693)89,382,57840,501,067
VersaillesWoodland Hills, CA—199125312,650,00033,656,2927,510,84412,650,00041,167,13653,817,136(22,859,119)30,958,01730,357,682
Vintage at 425 Broadway (fka Promenade)Santa Monica, CAG1934/2001609,000,00013,961,5231,763,6969,000,00015,725,21924,725,219(4,182,605)20,542,614(I)
West 54thNew York, NYG200122260,900,00048,193,8373,801,22860,900,00051,995,065112,895,065(14,869,327)98,025,73848,175,896
Westgate (fka Westgate I)Pasadena, CA—201048022,898,848133,467,1582,575,07122,898,848136,042,229158,941,077(37,281,584)121,659,49396,386,296
WoodleafCampbell, CA—19841788,550,60016,988,1835,181,2988,550,60022,169,48130,720,081(15,240,849)15,479,23217,835,169
Portfolio/Entity Encumbrances (1)—————————797,768,476
Wholly Owned Encumbered12,140932,672,5592,860,557,660229,886,950932,672,5593,090,444,6104,023,117,169(1,039,436,780)2,983,680,3892,081,887,149
Partially Owned Unencumbered:
2300 ElliottSeattle, WAG199292796,8007,173,7256,928,668796,80014,102,39314,899,193(11,358,634)3,540,559—
Canyon RidgeSan Diego, CA—19891624,869,44811,955,0644,016,2064,869,44815,971,27020,840,718(11,185,103)9,655,615—
Country OaksAgoura Hills, CA—19852566,105,00029,561,8656,941,4776,105,00036,503,34242,608,342(21,079,355)21,528,987—
Harrison Square (fka Elliot Bay)Seattle, WAG19921667,600,00035,844,3455,487,0997,600,00041,331,44448,931,444(11,150,395)37,781,049—
Radius KoreatownLos Angeles, CA—2014/201630132,494,15484,645,202224,05932,494,15484,869,261117,363,415(8,194,532)109,168,883—
RosecliffQuincy, MA—19901565,460,00015,721,5703,822,5195,460,00019,544,08925,004,089(13,068,617)11,935,472—
Strayhorse at Arrowhead RanchGlendale, AZ—19981364,400,00012,968,002966,1074,400,00013,934,10918,334,109(6,624,197)11,709,912—
Venn at MainBellevue, WAG201635026,626,498151,652,048160,76126,626,498151,812,809178,439,307(10,307,620)168,131,687—
Wood Creek II (fka Willow Brook (CA))Pleasant Hill, CA—19852285,055,00038,388,6726,854,9465,055,00045,243,61850,298,618(23,768,126)26,530,492—
Partially Owned Unencumbered1,84793,406,900387,910,49335,401,84293,406,900423,312,335516,719,235(116,736,579)399,982,656—
Partially Owned Encumbered:
Bellevue MeadowsBellevue, WA—19831804,507,10012,574,8145,634,2094,507,10018,209,02322,716,123(13,322,710)9,393,41316,515,951
Canyon Creek (CA)San Ramon, CA—19842685,425,00018,812,1217,726,6195,425,00026,538,74031,963,740(17,263,363)14,700,37728,150,731
Lantern CoveFoster City, CA—19852326,945,00023,064,9766,896,6056,945,00029,961,58136,906,581(18,556,525)18,350,05636,425,025
Schooner Bay IFoster City, CA—19851685,345,00020,390,6185,636,4685,345,00026,027,08631,372,086(16,017,984)15,354,10228,839,869
Schooner Bay IIFoster City, CA—19851444,550,00018,064,7645,074,7514,550,00023,139,51527,689,515(14,268,541)13,420,97426,144,881
Surrey DownsBellevue, WA—19861223,057,1007,848,6183,347,6143,057,10011,196,23214,253,332(7,873,885)6,379,4479,819,750
Virgil SquareLos Angeles, CA—19791425,500,00015,216,6133,070,1405,500,00018,286,75323,786,753(9,309,905)14,476,8489,885,805
Wisconsin PlaceChevy Chase, MD—2009432—172,089,3551,277,053—173,366,408173,366,408(43,009,588)130,356,820147,801,323
Partially Owned Encumbered1,68835,329,200288,061,87938,663,45935,329,200326,725,338362,054,538(139,622,501)222,432,037303,583,335
Total Consolidated Investment in Real Estate78,537$5,962,270,046$18,856,959,041$1,691,792,587$5,962,270,046$20,548,751,628$26,511,021,674$(6,696,280,739)$19,814,740,935$2,385,470,484
(1)See attached Encumbrances Reconciliation.

S-10

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Schedule III - Real Estate and Accumulated Depreciation

December 31, 2018

NOTES:

(A)The balance of furniture & fixtures included in the total investment in real estate amount was $1,722,231,029 as of December 31, 2018.
(B)The cost, net of accumulated depreciation, for Federal Income Tax purposes as of December 31, 2018 was approximately $14.0 billion (unaudited).
(C)The life to compute depreciation for building is 30 years, for building improvements ranges from 5 to 15 years, for furniture & fixtures, replacements and renovations is 5 to 10 years and for lease intangibles is the average remaining term of each respective lease.
(D)This asset consists of various acquisition dates and largely represents furniture, fixtures and equipment, leasehold improvements and computer equipment and 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 building improvements, replacements and renovations incurred subsequent to each property’s acquisition date.
(F)Primarily represents land and/or construction-in-progress on projects either held for future development or projects currently under development.
(G)A portion of these properties includes and/or will include retail/commercial space (including parking garages).
(H)Total properties and apartment units exclude two unconsolidated properties containing 945 apartment units.
(I)See Encumbrances Reconciliation schedule.
(J)Boot property for Bond Partnership mortgage pool.

S-11

Previous: Item 15. Exhibits, Financial Statement Schedules.