News Column

Equity Residential Reports Full Year 2013 Results

February 4, 2014

2014 Normalized FFO and Common Share Dividend Expected to Increase 8% CHICAGO --(BUSINESS WIRE)-- Equity Residential (NYSE: EQR) today reported results for the quarter and year ended December 31, 2013 . All per share results are reported as available to common shares on a diluted basis. “2013 was an extraordinary year for Equity Residential during which we delivered 4.5% same store revenue growth while acquiring and seamlessly integrating nearly $9 billion of new assets and selling $4.5 billion of non-core assets,” said David J. Neithercut , Equity Residential’s President and CEO. “2014 represents the first full year of stabilized operations following the successful completion of our multi-year plan to totally transform our property portfolio and we are pleased to expect an 8% increase in our Normalized FFO and dividend.” Fourth Quarter 2013 FFO (Funds from Operations), as defined by the National Association of Real Estate Investment Trusts (NAREIT), for the fourth quarter of 2013 was $0.67 per share compared to $0.94 per share in the fourth quarter of 2012. The difference is due primarily to the $80.0 million Archstone termination fee that the company recognized in the fourth quarter of 2012 as well as the higher debt extinguishment costs incurred in the fourth quarter of 2013 discussed further on page three of this release. For the fourth quarter of 2013, the company reported Normalized FFO of $0.77 per share compared to $0.75 per share in the same period of 2012. The following items impacted Normalized FFO per share in the quarter: the positive impact of approximately $0.03 per share from higher same store net operating income (NOI); the positive impact of approximately $0.28 per share from the Archstone properties, offset by the negative impact of approximately $0.28 per share from 2012 and 2013 disposition activity and common share issuance in connection with the company’s purchase of Archstone; and the negative impact of approximately $0.01 per share from various other items. Normalized FFO begins with FFO and eliminates certain items that by their nature are not comparable from period to period or that tend to obscure the company’s actual operating performance. Merger expenses and prepayment penalties are not included in the company’s Normalized FFO. A reconciliation and definition of Normalized FFO are provided on pages 26 and 28 of this release and the company has included guidance for Normalized FFO on page 27 of this release. For the fourth quarter of 2013, the company reported earnings of $0.30 per share compared to $1.17 per share in the fourth quarter of 2012. The difference is due primarily to higher gains from property sales in the fourth quarter of 2012, as well as the termination fee, debt extinguishment costs and other items described above. Year Ended December 31, 2013 FFO for the year ended December 31, 2013 was $2.35 per share compared to $3.11 per share in the same period of 2012. The difference is due primarily to merger-related expenses and debt extinguishment costs incurred in 2013 in connection with the company’s acquisition of Archstone, as well as $150.0 million in Archstone termination fees the company received in 2012. For the year ended December 31, 2013 , the company reported Normalized FFO of $2.85 per share compared to $2.76 per share in the same period of 2012. For the year ended December 31, 2013 , the company reported earnings of $5.16 per share compared to $2.70 per share in the same period of 2012. The difference is due primarily to higher gains from property sales during 2013, partially offset by higher depreciation as a result of the Archstone acquisition, as well as the termination fee, debt extinguishment costs and other items described above. Same Store Results On a same store fourth quarter to fourth quarter comparison, which includes 82,352 apartment units, revenues increased 4.0%, expenses increased 3.5% and NOI increased 4.3%. On a same store sequential fourth quarter to third quarter comparison, which includes 101,478 apartment units, revenues decreased 0.2%, expenses decreased 4.6% and NOI increased 2.0%. On a same store year to year comparison, which includes 80,247 apartment units, revenues increased 4.5%, expenses increased 3.4% and NOI increased 5.0%. Acquisitions/Dispositions The company did not acquire any properties or land sites in the fourth quarter. During 2013, the company acquired 77 properties, consisting of 22,103 apartment units. In addition, the company acquired 15 land parcels for an aggregate purchase price of approximately $267.2 million . Fourteen of these land parcels were acquired as part of the Archstone transaction and the company intends to develop six of these parcels and has or will sell the remainder. During the fourth quarter, the company sold two apartment properties, consisting of 852 apartment units, for an aggregate sale price of $96.7 million at a weighted average capitalization (cap) rate of 6.3%. These sales generated an unlevered internal rate of return (IRR), inclusive of management costs, of 9.5%. Also during the quarter, the company sold a land parcel, located in Florida , which it acquired as part of the Archstone transaction, for a sale price of $22.0 million . During 2013, the company sold 94 apartment properties, consisting of 29,180 apartment units, for an aggregate sale price of $4.46 billion at a weighted average cap rate of 6.0%. These sales, excluding three Archstone assets that were sold shortly after their acquisition, generated an unlevered IRR, inclusive of management costs, of 10.0%. Also during 2013, the company sold eight land parcels for an aggregate sale price of $126.0 million and one office building for $30.7 million . Please see page nine of this release for comparative portfolio summaries for the end of the fourth quarter 2012 and the end of the fourth quarter 2013. Capital Markets Activities On October 1, 2013 , the company used cash on hand from dispositions to repay a $963.5 million secured loan assumed in conjunction with the Archstone acquisition. This loan was set to mature in November 2014 and carried a cash interest rate of 5.88% and a GAAP interest rate of 3.45% due to the amortization of the Archstone-related debt premium. On October 31, 2013 , the company closed a new $800 million secured loan from a large insurance company. The loan has a 10 year term, is interest only and carries a fixed interest rate of 4.21%. The company used the loan proceeds to repay $825 million of a $1.27 billion secured loan that the company assumed as part of the Archstone transaction. The approximately $440 million balance will remain outstanding, continue to mature in November 2017 and continue to carry a cash interest rate of 6.26% and a GAAP interest rate of 3.58% due to the amortization of the Archstone-related debt premium. The company incurred cash prepayment costs of approximately $151.0 million and a charge to earnings and FFO of approximately $42.9 million in the fourth quarter. The difference is due to the write off of Archstone-related debt premiums. Normalized FFO was not impacted by this charge. Lehman Shares On February 27, 2013 , the company issued approximately 34.5 million common shares, or approximately 9.6% of the company’s outstanding shares at that time, to the seller of the Archstone assets, Lehman Brothers Holdings, Inc. and its affiliates (Lehman). In a recent filing with the U.S. Bankruptcy Court , Lehman disclosed that it has sold much of those shares and has significantly reduced its holdings in EQR. The company believes that Lehman currently holds only approximately 1.5% of its outstanding common shares. First Quarter 2014 Guidance The company has established a Normalized FFO guidance range of $0.68 to $0.72 per share for the first quarter of 2014. The difference between the company’s fourth quarter 2013 Normalized FFO of $0.77 per share and the midpoint of the first quarter 2014 guidance range of $0.70 per share is due primarily to: a negative impact of approximately $0.05 per share from lower NOI primarily as a result of higher operating expenses in the first quarter of 2014; and a negative impact of approximately $0.02 per share from other items. Full Year 2014 Guidance The company has established a Normalized FFO guidance range of $3.03 to $3.13 for the full year 2014. The assumptions underlying this guidance can be found on page 27 of this release. The difference between the company’s full-year 2013 Normalized FFO of $2.85 and the midpoint of the company’s guidance range of $3.08 per share for the full year 2014 Normalized FFO is primarily due to: a positive impact of approximately $0.37 per share from higher NOI from the company’s properties consisting of approximately $0.20 per share from the addition of the Archstone stabilized assets to the company’s same store pool; approximately $0.13 per share from the remaining same store properties and approximately $0.04 per share of NOI from properties in lease-up; a negative impact of approximately $0.23 per share from dilution from 2013 disposition activity and the impact of increased share count resulting from the issuance of common shares in connection with the Archstone transaction; a positive impact of approximately $0.06 per share from lower interest expense; and a positive impact of approximately $0.03 per share from other items including lower general and administrative expenses. The company’s same store guidance provided on page 27 of this release includes all of the stabilized assets acquired in the Archstone transaction that are owned and managed by Equity Residential . 2014 Common Share Dividend As previously announced, beginning in 2014 the company’s dividend policy is to pay 65% of the midpoint of the range of Normalized FFO guidance customarily provided as part of the company’s fourth quarter earnings release. Based on the guidance above, the company expects to pay four quarterly dividends of $0.50 per share for an annual dividend of $2.00 per share in 2014, which represents an 8% increase over the 2013 dividend. All future dividends remain subject to the discretion of the company’s Board of Trustees . First Quarter 2014 Earnings and Conference Call Equity Residential expects to announce first quarter 2014 results on Wednesday, April 30, 2014 and host a conference call to discuss those results at 10:00 a.m. CT on Thursday, May 1, 2014 . Equity Residential is an S&P 500 company focused on the acquisition, development and management of high quality apartment properties in top U.S. growth markets. Equity Residential owns or has investments in 390 properties consisting of 109,855 apartment units. For more information on Equity Residential , please visit our website at www.equityapartments.com . Forward-Looking Statements In addition to historical information, this press release contains forward-looking statements and information within the meaning of the federal securities laws. These statements are based on current expectations, estimates, projections and assumptions made by management. While Equity Residential’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, including, without limitation, changes in general market conditions, including the rate of job growth and cost of labor and construction material, the level of new multifamily construction and development, competition and local government regulation. Other risks and uncertainties are described under the heading “Risk Factors” in our Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityapartments.com . Many of these uncertainties and risks are difficult to predict and beyond management’s control. Forward-looking statements are not guarantees of future performance, results or events. Equity Residential assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. A live web cast of the company’s conference call discussing these results will take place tomorrow, Wednesday, February 5 , at 10:00 a.m. Central. Please visit the Investor section of the company’s web site at www.equityapartments.com for the link. A replay of the web cast will be available for two weeks at this site. Equity Residential Consolidated Statements of Operations (Amounts in thousands except per share data) (Unaudited) Year Ended December 31 , Quarter Ended December 31 , 2013 2012 2013 2012 REVENUES Rental income $ 2,378,004 $ 1,737,929 $ 636,835 $ 450,238 Fee and asset management 9,698 9,573 2,299 2,245 Total revenues 2,387,702 1,747,502 639,134 452,483 EXPENSES Property and maintenance 449,461 332,190 118,649 80,534 Real estate taxes and insurance 293,999 206,723 76,246 53,007 Property management 84,342 81,902 20,947 19,133 Fee and asset management 6,460 4,663 1,721 1,068 Depreciation 978,973 560,669 182,740 140,422 General and administrative 62,179 47,233 15,162 10,072 Total expenses 1,875,414 1,233,380 415,465 304,236 Operating income 512,288 514,122 223,669 148,247 Interest and other income 4,656 150,546 3,336 80,032 Other expenses (9,105 ) (21,692 ) (1,575 ) (3,105 ) Merger expenses (19,864 ) (5,619 ) (123 ) (3,698 ) Interest: Expense incurred, net (586,854 ) (455,236 ) (149,402 ) (109,760 ) Amortization of deferred financing costs (22,197 ) (21,295 ) (6,561 ) (11,030 ) (Loss) income before income and other taxes, (loss) income from investments in unconsolidated entities, net gain (loss) on sales of unconsolidated entities and land parcels and discontinued operations (121,076 ) 160,826 69,344 100,686 Income and other tax (expense) benefit (1,169 ) (514 ) 156 88 (Loss) from investments in unconsolidated entities due to operations (4,159 ) (14 ) (1,175 ) (11 ) (Loss) income from investments in unconsolidated entities due to merger expenses (54,004 ) — 777 — Net gain (loss) on sales of unconsolidated entities 7 — (9 ) — Net gain on sales of land parcels 12,227 — 48 — (Loss) income from continuing operations (168,174 ) 160,298 69,141 100,763 Discontinued operations, net 2,073,527 720,906 46,729 283,636 Net income 1,905,353 881,204 115,870 384,399 Net (income) loss attributable to Noncontrolling Interests: Operating Partnership (75,278 ) (38,641 ) (4,331 ) (16,995 ) Partially Owned Properties 538 (844 ) (563 ) (387 ) Net income attributable to controlling interests 1,830,613 841,719 110,976 367,017 Preferred distributions (4,145 ) (10,355 ) (1,036 ) (1,036 ) Premium on redemption of Preferred Shares — (5,152 ) — (2 ) Net income available to Common Shares $ 1,826,468 $ 826,212 $ 109,940 $ 365,979 Earnings per share – basic: (Loss) income from continuing operations available to Common Shares $ (0.47 ) $ 0.45 $ 0.18 $ 0.31 Net income available to Common Shares $ 5.16 $ 2.73 $ 0.31 $ 1.18 Weighted average Common Shares outstanding 354,305 302,701 359,919 310,398 Earnings per share – diluted: (Loss) income from continuing operations available to Common Shares $ (0.47 ) $ 0.45 $ 0.18 $ 0.30 Net income available to Common Shares $ 5.16 $ 2.70 $ 0.30 $ 1.17 Weighted average Common Shares outstanding 354,305 319,766 375,860 327,108 Distributions declared per Common Share outstanding $ 1.85 1.78 $ 0.65 $ 0.7675 Equity Residential Consolidated Statements of Funds From Operations and Normalized Funds From Operations (Amounts in thousands except per share data) (Unaudited) Year Ended December 31 , Quarter Ended December 31 , 2013 2012 2013 2012 Net income $ 1,905,353 $ 881,204 $ 115,870 $ 384,399 Net loss (income) attributable to Noncontrolling Interests – Partially Owned Properties 538 (844 ) (563 ) (387 ) Preferred distributions (4,145 ) (10,355 ) (1,036 ) (1,036 ) Premium on redemption of Preferred Shares — (5,152 ) — (2 ) Net income available to Common Shares and Units 1,901,746 864,853 114,271 382,974 Adjustments: Depreciation 978,973 560,669 182,740 140,422 Depreciation – Non-real estate additions (4,806 ) (5,346 ) (1,180 ) (1,135 ) Depreciation – Partially Owned and Unconsolidated Properties (2,838 ) (3,193 ) 236 (798 ) Net (gain) loss on sales of unconsolidated entities (7 ) — 9 — Discontinued operations: Depreciation 34,380 124,323 516 27,630 Net (gain) on sales of discontinued operations (2,036,505 ) (548,278 ) (45,928 ) (240,831 ) Net incremental gain (loss) on sales of condominium units 8 (11 ) 1 (60 ) Gain (loss) on sale of Equity Corporate Housing (ECH) 1,470 200 761 (150 ) FFO available to Common Shares and Units (1) (3) (4) 872,421 993,217 251,426 308,052 Adjustments (see page 26 for additional detail): Asset impairment and valuation allowances — — — — Property acquisition costs and write-off of pursuit costs 79,365 21,649 671 6,751 Debt extinguishment (gains) losses, including prepayment penalties, preferred share redemptions and non-cash convertible debt discounts 121,730 16,293 42,910 8,802 (Gains) losses on sales of non-operating assets, net of income and other tax expense (benefit) (17,908 ) (255 ) (4,183 ) 236 Other miscellaneous non-comparable items 1,465 (147,635 ) (1,896 ) (79,948 ) Normalized FFO available to Common Shares and Units (2) (3) (4) $ 1,057,073 $ 883,269 $ 288,928 $ 243,893 FFO (1) (3) $ 876,566 $ 1,008,724 $ 252,462 $ 309,090 Preferred distributions (4,145 ) (10,355 ) (1,036 ) (1,036 ) Premium on redemption of Preferred Shares — (5,152 ) — (2 ) FFO available to Common Shares and Units - basic and diluted (1) (3) (4) $ 872,421 $ 993,217 $ 251,426 $ 308,052 FFO per share and Unit - basic $ 2.37 $ 3.14 $ 0.67 $ 0.95 FFO per share and Unit - diluted $ 2.35 $ 3.11 $ 0.67 $ 0.94 Normalized FFO (2) (3) $ 1,061,218 $ 893,624 $ 289,964 $ 244,929 Preferred distributions (4,145 ) (10,355 ) (1,036 ) (1,036 ) Normalized FFO available to Common Shares and Units - basic and diluted (2) (3) (4) $ 1,057,073 $ 883,269 $ 288,928 $ 243,893 Normalized FFO per share and Unit - basic $ 2.87 $ 2.79 $ 0.77 $ 0.75 Normalized FFO per share and Unit - diluted $ 2.85 $ 2.76 $ 0.77 $ 0.75 Weighted average Common Shares and Units outstanding - basic 368,038 316,554 373,643 324,364 Weighted average Common Shares and Units outstanding - diluted 370,478 319,766 375,860 327,108 Note: See page 26 for additional detail regarding the adjustments from FFO to Normalized FFO. See page 28 for the definitions, the footnotes referenced above and the reconciliations of EPS to FFO and Normalized FFO. Equity Residential Consolidated Balance Sheets (Amounts in thousands except for share amounts) (Unaudited) December 31 , December 31 , 2013 2012 ASSETS Investment in real estate Land $ 6,192,512 $ 4,554,912 Depreciable property 19,226,047 15,711,944 Projects under development 988,867 387,750 Land held for development 393,522 353,823 Investment in real estate 26,800,948 21,008,429 Accumulated depreciation (4,807,709 ) (4,912,221 ) Investment in real estate, net 21,993,239 16,096,208 Cash and cash equivalents 53,534 612,590 Investments in unconsolidated entities 178,526 17,877 Deposits – restricted 103,567 250,442 Escrow deposits – mortgage 42,636 9,129 Deferred financing costs, net 58,486 44,382 Other assets 404,557 170,372 Total assets $ 22,834,545 $ 17,201,000 LIABILITIES AND EQUITY Liabilities: Mortgage notes payable $ 5,174,166 $ 3,898,369 Notes, net 5,477,088 4,630,875 Lines of credit 115,000 — Accounts payable and accrued expenses 118,791 38,372 Accrued interest payable 78,309 76,223 Other liabilities 347,748 304,518 Security deposits 71,592 66,988 Distributions payable 243,511 260,176 Total liabilities 11,626,205 9,275,521 Commitments and contingencies Redeemable Noncontrolling Interests – Operating Partnership 363,144 398,372 Equity: Shareholders’ equity: Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized; 1,000,000 shares issued and outstanding as of December 31, 2013 and December 31, 2012 50,000 50,000 Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 360,479,260 shares issued and outstanding as of December 31, 2013 and 325,054,654 shares issued and outstanding as of December 31, 2012 3,605 3,251 Paid in capital 8,561,500 6,542,355 Retained earnings 2,047,258 887,355 Accumulated other comprehensive (loss) (155,162 ) (193,148 ) Total shareholders’ equity 10,507,201 7,289,813 Noncontrolling Interests: Operating Partnership 211,412 159,606 Partially Owned Properties 126,583 77,688 Total Noncontrolling Interests 337,995 237,294 Total equity 10,845,196 7,527,107 Total liabilities and equity $ 22,834,545 $ 17,201,000 Equity Residential Portfolio Summary as of December 31, 2012 Portfolio Summary as of December 31, 2013 % of Average % of Average Apartment Stabilized Rental Apartment Stabilized Rental Markets/Metro Areas Properties Units NOI (1) Rate (3) Properties Units NOI (2) Rate (3) Core: Washington DC 43 14,425 15.9 % $ 1,992 56 18,275 18.6 % $ 2,223 New York 30 8,047 13.9 % 3,433 38 10,330 17.0 % 3,727 San Francisco 40 9,094 8.6 % 1,902 51 13,210 13.2 % 2,227 Los Angeles 48 9,815 9.9 % 1,879 57 11,960 11.3 % 2,064 Boston 26 5,832 8.2 % 2,560 34 7,816 10.3 % 2,802 South Florida 36 12,253 9.0 % 1,463 35 11,462 7.4 % 1,547 Seattle 38 7,563 6.4 % 1,627 38 7,734 6.4 % 1,778 Denver 24 8,144 5.5 % 1,226 19 6,935 4.5 % 1,321 San Diego 14 4,963 5.0 % 1,851 13 3,505 3.2 % 1,906 Orange County, CA 11 3,490 3.3 % 1,660 11 3,490 3.0 % 1,723 Subtotal – Core 310 83,626 85.7 % 1,941 352 94,717 94.9 % 2,202 Non-Core: Inland Empire, CA 10 3,081 2.4 % 1,491 10 3,081 2.2 % 1,514 Orlando 21 6,413 3.5 % 1,086 10 3,383 1.7 % 1,130 New England (excluding Boston ) 14 2,611 1.3 % 1,174 11 1,965 0.8 % 1,212 Phoenix 25 7,400 3.4 % 946 4 1,260 0.4 % 952 Atlanta 12 3,616 2.0 % 1,157 1 336 0.0 % 1,301 Jacksonville 6 2,117 1.1 % 1,005 — — — — Tacoma, WA 3 1,467 0.6 % 951 — — — — Subtotal – Non-Core 91 26,705 14.3 % 1,099 36 10,025 5.1 % 1,248 Total 401 110,331 100.0 % 1,737 388 104,742 100.0 % 2,110 Military Housing 2 5,039 — — 2 5,113 — — Grand Total 403 115,370 100.0 % $ 1,737 390 109,855 100.0 % $ 2,110 Note: Projects under development are not included in the Portfolio Summary until construction has been completed. (1) % of Stabilized NOI for the 12/31/12 Portfolio Summary includes budgeted 2013 NOI for stabilized properties, budgeted year one ( March 2013 to February 2014 ) NOI for the Archstone properties and projected annual NOI at stabilization (defined as having achieved 90% occupancy for three consecutive months) for properties that are in lease-up. (2) % of Stabilized NOI for the 12/31/13 Portfolio Summary includes budgeted 2014 NOI for stabilized properties (including the Archstone properties) and projected annual NOI at stabilization (defined as having achieved 90% occupancy for three consecutive months) for properties that are in lease-up. (3) Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the last month of the period presented. Equity Residential Portfolio as of December 31, 2013 Apartment Properties Units Wholly Owned Properties 362 98,468 Master-Leased Properties - Consolidated 3 853 Partially Owned Properties - Consolidated 19 3,752 Partially Owned Properties - Unconsolidated 4 1,669 Military Housing 2 5,113 390 109,855 Portfolio Rollforward Q4 2013 ($ in thousands) Apartment Purchase/ Properties Units (Sale) Price Cap Rate 9/30/2013 389 109,795 Dispositions: Consolidated: Rental Properties (2 ) (852 ) $ (96,650 ) 6.3 % Land Parcel (one) — — $ (22,000 ) Completed Developments - Consolidated 1 128 Completed Developments - Unconsolidated 2 832 Configuration Changes — (48 ) 12/31/2013 390 109,855 Portfolio Rollforward 2013 ($ in thousands) Apartment Purchase/ Properties Units (Sale) Price Cap Rate 12/31/2012 403 115,370 Acquisitions: Consolidated: Rental Properties (1) 73 20,914 $ 8,492,662 4.9 % Master-Leased Properties (1) 3 853 $ 250,924 5.6 % Uncompleted Developments (two) — — $ 36,583 Land Parcels (fourteen) (1) — — $ 260,598 Unconsolidated (2): Rental Properties 1 336 $ 5,113 5.8 % Uncompleted Developments (two) (1) — — $ 14,854 Land Parcel (one) (1) — — $ 6,572 Dispositions: Consolidated: Rental Properties (94 ) (29,180 ) $ (4,459,339 ) 6.0 % Land Parcels (seven) — — $ (99,650 ) Other (3) — — $ (30,734 ) Unconsolidated: Land Parcel (one) (4) — — $ (26,350 ) Completed Developments - Consolidated 1 128 Completed Developments - Unconsolidated 3 1,333 Configuration Changes — 101 12/31/2013 390 109,855 (1) Amounts have been adjusted to reflect Q2/Q3/Q4 2013 changes to the purchase price allocation for certain assets which were acquired in the Archstone transaction. (2) EQR owns various equity interests in these unconsolidated rental properties, uncompleted developments and land parcels. Purchase price listed is EQR's net investment price. (3) Represents a 97,000 square foot commercial building adjacent to our Harbor Steps apartment property in downtown Seattle that was acquired in 2011. (4) Sales price listed is the gross sales price. EQR's share of the net sales proceeds approximated 25%. Equity Residential Fourth Quarter 2013 vs. Fourth Quarter 2012 Same Store Results/Statistics for 82,352 Same Store Apartment Units $ in thousands (except for Average Rental Rate) Results Statistics Average Rental Description Revenues Expenses NOI (1) Rate (2) Occupancy Turnover Q4 2013 $ 466,626 $ 154,219 $ 312,407 $ 1,980 95.4 % 12.0 % Q4 2012 $ 448,568 $ 149,019 $ 299,549 $ 1,905 95.4 % 12.4 % Change $ 18,058 $ 5,200 $ 12,858 $ 75 0.0 % (0.4 %) Change 4.0 % 3.5 % 4.3 % 3.9 % Fourth Quarter 2013 vs. Third Quarter 2013 Same Store Results/Statistics for 101,478 Same Store Apartment Units $ in thousands (except for Average Rental Rate) Results Statistics Average Rental Description Revenues Expenses NOI (1) Rate (2) Occupancy Turnover Q4 2013 $ 613,776 $ 202,431 $ 411,345 $ 2,116 95.3 % 12.2 % Q3 2013 $ 615,286 $ 212,132 $ 403,154 $ 2,113 95.7 % 17.1 % Change $ (1,510 ) $ (9,701 ) $ 8,191 $ 3 (0.4 %) (4.9 %) Change (0.2 %) (4.6 %) 2.0 % 0.1 % Note: Sequential same store results/statistics include 18,448 apartment units acquired in the Archstone acquisition. 2013 vs. 2012 Same Store Results/Statistics for 80,247 Same Store Apartment Units $ in thousands (except for Average Rental Rate) Results Statistics Average Rental Description Revenues Expenses NOI (1) Rate (2) Occupancy Turnover 2013 $ 1,769,280 $ 607,243 $ 1,162,037 $ 1,926 95.4 % 55.6 % 2012 $ 1,693,239 $ 587,037 $ 1,106,202 $ 1,846 95.3 % 56.3 % Change $ 76,041 $ 20,206 $ 55,835 $ 80 0.1 % (0.7 %) Change 4.5 % 3.4 % 5.0 % 4.3 % (1) The Company's primary financial measure for evaluating each of its apartment communities is net operating income ("NOI"). NOI represents rental income less property and maintenance expense, real estate tax and insurance expense and property management expense. The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company's apartment communities. See page 28 for reconciliations from operating income. (2) Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period. Equity Residential Fourth Quarter 2013 vs. Fourth Quarter 2012 Same Store Results/Statistics by Market Increase (Decrease) from Prior Year's Quarter Q4 2013 Q4 2013 Q4 2013 % of Average Weighted Average Apartment Actual Rental Average Rental Markets/Metro Areas Units NOI Rate (1) Occupancy % Revenues Expenses NOI Rate (1) Occupancy Core: New York 7,687 15.9 % $ 3,596 96.1 % 3.3 % 0.7 % 4.8 % 3.4 % (0.1 %) Washington DC 11,077 15.3 % 2,131 95.1 % 0.4 % (0.5 %) 0.8 % 0.8 % (0.4 %) Los Angeles 9,095 11.1 % 1,966 95.7 % 4.0 % 5.3 % 3.4 % 4.1 % (0.1 %) San Francisco 8,382 10.4 % 2,018 95.4 % 8.0 % 5.3 % 9.4 % 7.3 % 0.6 % Boston (2) 5,832 9.9 % 2,662 95.9 % 4.8 % 3.7 % 5.3 % 4.5 % 0.2 % South Florida 10,637 9.4 % 1,538 95.3 % 3.8 % 4.7 % 3.2 % 3.5 % 0.2 % Seattle 6,867 7.4 % 1,780 94.7 % 6.6 % 12.0 % 4.1 % 6.8 % (0.2 %) Denver 6,767 5.8 % 1,326 95.3 % 6.4 % 10.1 % 4.9 % 6.6 % (0.1 %) Orange County, CA 3,490 4.1 % 1,729 95.8 % 3.8 % (5.1 %) 7.6 % 4.0 % (0.1 %) San Diego 3,217 3.8 % 1,902 95.9 % 4.6 % 3.3 % 5.2 % 2.7 % 1.6 % Subtotal – Core 73,051 93.1 % 2,072 95.5 % 4.1 % 3.6 % 4.4 % 4.1 % 0.1 % Non-Core: Inland Empire, CA 3,081 2.9 % 1,517 95.8 % 2.9 % 6.6 % 1.3 % 2.0 % 0.8 % Orlando 3,383 2.3 % 1,138 94.8 % 2.9 % 0.7 % 4.1 % 3.6 % (0.7 %) New England (excluding Boston ) 1,965 1.2 % 1,224 95.1 % 1.6 % 1.6 % 1.6 % 2.0 % (0.4 %) Phoenix 872 0.5 % 895 95.5 % 2.2 % (3.3 %) 5.7 % 1.4 % 0.8 % Subtotal – Non-Core 9,301 6.9 % 1,260 95.3 % 2.6 % 2.7 % 2.6 % 2.6 % 0.0 % Total 82,352 100.0 % $ 1,980 95.4 % 4.0 % 3.5 % 4.3 % 3.9 % 0.0 % (1) Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period. (2) Quarter over quarter same store revenues in Boston were positively impacted by non-residential related income. Residential-only same store revenues increased in Boston 4.0% quarter over quarter. Equity Residential Fourth Quarter 2013 vs. Third Quarter 2013 Same Store Results/Statistics by Market Increase (Decrease) from Prior Quarter Q4 2013 Q4 2013 Q4 2013 % of Average Weighted Average Apartment Actual Rental Average Rental Markets/Metro Areas Units NOI Rate (1) Occupancy % Revenues Expenses NOI Rate (1) Occupancy Core: Washington DC 17,724 19.2 % $ 2,230 95.0 % (1.9 %) (9.6 %) 1.8 % (1.3 %) (0.6 %) New York 10,330 17.2 % 3,722 96.0 % (0.1 %) (4.2 %) 2.3 % 0.0 % (0.2 %) San Francisco 12,766 13.0 % 2,199 95.4 % 0.9 % (3.1 %) 3.0 % 1.0 % (0.1 %) Boston (2) 7,722 10.5 % 2,806 95.8 % 0.9 % (4.9 %) 3.6 % 0.8 % 0.1 % Los Angeles 11,139 10.4 % 2,057 95.3 % (0.9 %) (2.9 %) 0.3 % (0.1 %) (0.7 %) South Florida 10,833 7.3 % 1,535 95.3 % (0.1 %) (3.6 %) 2.0 % (0.4 %) 0.2 % Seattle 7,733 6.3 % 1,766 94.7 % 0.0 % (0.8 %) 0.4 % 1.4 % (1.4 %) Denver 6,935 4.6 % 1,329 95.3 % 0.1 % (6.2 %) 2.9 % 0.9 % (0.7 %) San Diego 3,505 3.2 % 1,916 95.7 % 0.2 % 3.7 % (1.4 %) 0.6 % (0.4 %) Orange County, CA 3,490 3.1 % 1,729 95.8 % 0.8 % (10.0 %) 5.6 % 1.0 % (0.1 %) Subtotal – Core 92,177 94.8 % 2,202 95.3 % (0.3 %) (4.7 %) 2.1 % 0.1 % (0.4 %) Non-Core: Inland Empire, CA 3,081 2.2 % 1,517 95.8 % 0.1 % 1.2 % (0.4 %) 0.3 % (0.1 %) Orlando 3,383 1.8 % 1,138 94.8 % (0.7 %) (6.7 %) 2.8 % 0.0 % (0.6 %) New England (excluding Boston ) 1,965 0.9 % 1,224 95.1 % 0.2 % (1.8 %) 1.9 % (0.6 %) 0.7 % Phoenix 872 0.3 % 895 95.5 % (0.2 %) (7.5 %) 4.5 % (1.0 %) 0.8 % Subtotal – Non-Core 9,301 5.2 % 1,260 95.3 % (0.1 %) (2.8 %) 1.4 % (0.1 %) 0.0 % Total 101,478 100.0 % $ 2,116 95.3 % (0.2 %) (4.6 %) 2.0 % 0.1 % (0.4 %) Note: Sequential same store results/statistics include 18,448 apartment units acquired in the Archstone acquisition. (1) Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period. (2) Sequential same store revenues in Boston were positively impacted by non-residential related income. Residential-only same store revenues increased in Boston 0.1% sequentially. Equity Residential 2013 vs. 2012 Same Store Results/Statistics by Market Increase (Decrease) from Prior Year 2013 2013 % of Average 2013 Weighted Average Apartment Actual Rental Average Rental Markets/Metro Areas Units NOI Rate (1) Occupancy % Revenues Expenses NOI Rate (1) Occupancy Core: Washington DC 10,564 15.2 % $ 2,098 95.2 % 2.1 % 0.6 % 2.7 % 2.3 % (0.3 %) New York 7,176 14.8 % 3,475 96.0 % 4.2 % 4.5 % 4.1 % 4.5 % (0.2 %) Los Angeles 8,894 11.3 % 1,926 95.8 % 4.2 % 4.3 % 4.1 % 3.9 % 0.3 % Boston (2) 5,832 10.1 % 2,624 95.4 % 4.1 % 4.3 % 4.1 % 4.1 % 0.1 % South Florida 10,637 9.9 % 1,525 95.2 % 4.3 % 3.1 % 5.1 % 4.0 % 0.2 % San Francisco 7,821 9.8 % 1,936 95.3 % 8.4 % 3.0 % 11.5 % 8.1 % 0.3 % Seattle 6,548 7.4 % 1,727 95.3 % 5.7 % 6.5 % 5.3 % 5.7 % 0.0 % Denver 6,767 6.1 % 1,292 95.7 % 7.3 % 6.5 % 7.7 % 7.1 % 0.1 % Orange County, CA 3,490 4.1 % 1,698 95.7 % 3.9 % 0.6 % 5.4 % 3.8 % 0.0 % San Diego 3,217 4.1 % 1,875 95.6 % 4.0 % 2.8 % 4.6 % 3.0 % 1.0 % Subtotal – Core 70,946 92.8 % 2,015 95.5 % 4.6 % 3.6 % 5.1 % 4.5 % 0.1 % Non-Core: Inland Empire, CA 3,081 3.1 % 1,506 95.4 % 3.3 % 2.4 % 3.7 % 2.7 % 0.5 % Orlando 3,383 2.4 % 1,126 95.5 % 4.0 % (0.3 %) 6.5 % 3.9 % 0.1 % New England (excluding Boston ) 1,965 1.2 % 1,221 94.8 % 2.1 % 4.1 % 0.4 % 2.6 % (0.5 %) Phoenix 872 0.5 % 889 94.9 % 1.4 % (3.7 %) 4.9 % 1.0 % 0.3 % Subtotal – Non-Core 9,301 7.2 % 1,250 95.3 % 3.1 % 1.5 % 4.1 % 3.0 % 0.1 % Total 80,247 100.0 % $ 1,926 95.4 % 4.5 % 3.4 % 5.0 % 4.3 % 0.1 % (1) Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment units for the period. (2) December year-to-date same store revenues in Boston were negatively impacted by non-residential related income. Residential-only same store revenues increased in Boston 4.8% December year-to-date. Equity Residential Fourth Quarter 2013 vs. Fourth Quarter 2012 Same Store Operating Expenses for 82,352 Same Store Apartment Units $ in thousands % of Actual Q4 2013 Actual Actual $ % Operating Q4 2013 Q4 2012 Change Change Expenses Real estate taxes $ 51,799 $ 47,568 $ 4,231 8.9 % 33.6 % On-site payroll (1) 32,534 31,669 865 2.7 % 21.1 % Utilities (2) 22,126 21,119 1,007 4.8 % 14.3 % Repairs and maintenance (3) 20,461 19,779 682 3.4 % 13.3 % Property management costs (4) 14,699 16,821 (2,122 ) (12.6 %) 9.5 % Insurance 5,037 4,742 295 6.2 % 3.3 % Leasing and advertising 2,515 2,462 53 2.2 % 1.6 % Other on-site operating expenses (5) 5,048 4,859 189 3.9 % 3.3 % Same store operating expenses $ 154,219 $ 149,019 $ 5,200 3.5 % 100.0 % 2013 vs. 2012 Same Store Operating Expenses for 80,247 Same Store Apartment Units $ in thousands % of Actual 2013 Actual Actual $ % Operating 2013 2012 Change Change Expenses Real estate taxes $ 200,315 $ 185,646 $ 14,669 7.9 % 33.0 % On-site payroll (1) 129,543 127,198 2,345 1.8 % 21.3 % Utilities (2) 89,941 86,326 3,615 4.2 % 14.8 % Repairs and maintenance (3) 82,280 78,729 3,551 4.5 % 13.6 % Property management costs (4) 58,386 63,496 (5,110 ) (8.0 %) 9.6 % Insurance 19,585 18,427 1,158 6.3 % 3.2 % Leasing and advertising 9,486 9,225 261 2.8 % 1.6 % Other on-site operating expenses (5) 17,707 17,990 (283 ) (1.6 %) 2.9 % Same store operating expenses $ 607,243 $ 587,037 $ 20,206 3.4 % 100.0 % (1) On-site payroll - Includes payroll and related expenses for on-site personnel including property managers, leasing consultants and maintenance staff. (2) Utilities - Represents gross expenses prior to any recoveries under the Resident Utility Billing System ("RUBS"). Recoveries are reflected in rental income. (3) Repairs and maintenance - Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs. (4) Property management costs - Includes payroll and related expenses for departments, or portions of departments, that directly support on-site management. These include such departments as regional and corporate property management, property accounting, human resources, training, marketing and revenue management, procurement, real estate tax, property legal services and information technology. (5) Other on-site operating expenses - Includes ground lease costs and administrative costs such as office supplies, telephone and data charges and association and business licensing fees. Equity Residential Debt Summary as of December 31, 2013 (Amounts in thousands) Weighted Weighted Average Average Maturities Amounts (1) % of Total Rates (1) (years) Secured $ 5,174,166 48.1 % 4.23 % 8.4 Unsecured 5,592,088 51.9 % 4.91 % 4.5 Total $ 10,766,254 100.0 % 4.56 % 6.3 Fixed Rate Debt: Secured – Conventional $ 4,393,341 40.8 % 4.68 % 6.9 Unsecured – Public/Private 4,727,088 43.9 % 5.55 % 5.1 Fixed Rate Debt 9,120,429 84.7 % 5.09 % 5.9 Floating Rate Debt: Secured – Conventional 57,002 0.6 % 2.32 % 0.8 Secured – Tax Exempt 723,823 6.7 % 0.63 % 17.2 Unsecured – Public/Private 750,000 6.9 % 1.58 % 1.0 Unsecured – Revolving Credit Facility 115,000 1.1 % 1.26 % 4.3 Floating Rate Debt 1,645,825 15.3 % 1.20 % 8.5 Total $ 10,766,254 100.0 % 4.56 % 6.3 (1) Net of the effect of any derivative instruments. Weighted average rates are for the year ended December 31, 2013 and do not include $113.6 million of write-offs of unamortized premiums related to the early repayment of $1.8 billion in mortgage notes payable during the quarter ended December 31, 2013 . Note: The Company capitalized interest of approximately $47.3 million and $22.5 million during the years ended December 31, 2013 and 2012, respectively. The Company capitalized interest of approximately $14.4 million and $6.7 million during the quarters ended December 31, 2013 and 2012, respectively. Debt Maturity Schedule as of December 31, 2013 (Amounts in thousands) Weighted Weighted Average Rates Average Fixed Floating on Fixed Rates on Year Rate (1) Rate (1) Total % of Total Rate Debt (1) Total Debt (1) 2014 $ 512,067 $ 49,017 $ 561,084 5.2% 5.25% 5.03% 2015 420,448 750,000 (2) 1,170,448 10.9% 6.28% 3.13% 2016 1,193,251 — 1,193,251 11.1% 5.34% 5.34% 2017 1,346,735 456 1,347,191 12.5% 6.16% 6.16% 2018 84,357 212,659 (3) 297,016 2.8% 5.61% 2.37% 2019 806,639 20,766 827,405 7.7% 5.48% 5.35% 2020 1,678,601 809 1,679,410 15.6% 5.49% 5.49% 2021 1,195,242 856 1,196,098 11.1% 4.63% 4.64% 2022 228,933 905 229,838 2.1% 3.17% 3.18% 2023 1,303,079 956 1,304,035 12.1% 3.75% 3.75% 2024+ 297,923 674,988 972,911 9.0% 6.25% 2.21% Premium/(Discount) 53,154 (65,587) (12,433) (0.1%) N/A N/A Total $ 9,120,429 $ 1,645,825 $ 10,766,254 100.0% 5.20% 4.53% (1) Net of the effect of any derivative instruments. Weighted average rates are as of December 31, 2013 . (2) Includes the Company's senior unsecured $750.0 million delayed draw term loan facility that matures on January 11, 2015 and is subject to a one-year extension option exercisable by the Company. (3) Includes $115.0 million outstanding on the Company's unsecured revolving credit facility. As of December 31, 2013 , there was approximately $2.35 billion available on this facility. Equity Residential Unsecured Debt Summary as of December 31, 2013 (Amounts in thousands) Unamortized Coupon Due Face Premium/ Net Rate Date Amount (Discount) Balance Fixed Rate Notes: 5.250 % 09/15/14 $ 500,000 $ (44 ) $ 499,956 6.584 % 04/13/15 300,000 (138 ) 299,862 5.125 % 03/15/16 500,000 (117 ) 499,883 5.375 % 08/01/16 400,000 (479 ) 399,521 5.750 % 06/15/17 650,000 (1,780 ) 648,220 7.125 % 10/15/17 150,000 (246 ) 149,754 4.750 % 07/15/20 600,000 (2,976 ) 597,024 4.625 % 12/15/21 1,000,000 (3,016 ) 996,984 3.000 % 04/15/23 500,000 (4,116 ) 495,884 7.570 % 08/15/26 140,000 — 140,000 4,740,000 (12,912 ) 4,727,088 Floating Rate Notes: Delayed Draw Term Loan Facility LIBOR+1.20% 01/11/15 (1)(2) 750,000 — 750,000 750,000 — 750,000 Revolving Credit Facility: LIBOR+1.05% 04/01/18 (1)(3) 115,000 — 115,000 Total Unsecured Debt $ 5,605,000 $ (12,912 ) $ 5,592,088 (1) Facilities are private. All other unsecured debt is public. (2) On January 11, 2013 , the Company entered into a senior unsecured $750.0 million delayed draw term loan facility which was fully drawn on February 27, 2013 in connection with the Archstone acquisition. The maturity date of January 11, 2015 is subject to a one-year extension option exercisable by the Company. The interest rate on advances under the term loan facility will generally be LIBOR plus a spread (currently 1.20%), which is dependent on the credit rating of the Company's long-term debt. (3) On January 11, 2013 , the Company replaced its existing $1.75 billion facility with a $2.5 billion unsecured revolving credit facility maturing April 1, 2018 . The interest rate on advances under the new credit facility will generally be LIBOR plus a spread (currently 1.05%) and an annual facility fee (currently 15 basis points). Both the spread and the facility fee are dependent on the credit rating of the Company's long-term debt. As of December 31, 2013 , there was approximately $2.35 billion available on the Company's unsecured revolving credit facility. Equity Residential Selected Unsecured Public Debt Covenants December 31 , September 30 , 2013 2013 Total Debt to Adjusted Total Assets (not to exceed 60%) 40.0 % 42.2 % Secured Debt to Adjusted Total Assets (not to exceed 40%) 19.2 % 22.4 % Consolidated Income Available for Debt Service to Maximum Annual Service Charges (must be at least 1.5 to 1) 3.07 2.65 Total Unsecured Assets to Unsecured Debt 326.9 % 324.6 % (must be at least 150%) These selected covenants relate to ERP Operating Limited Partnership's ("ERPOP") outstanding unsecured public debt. Equity Residential is the general partner of ERPOP. Equity Residential Capital Structure as of December 31, 2013 (Amounts in thousands except for share/unit and per share amounts) Secured Debt $ 5,174,166 48.1 % Unsecured Debt 5,592,088 51.9 % Total Debt 10,766,254 100.0 % 35.6 % Common Shares (includes Restricted Shares) 360,479,260 96.2 % Units (includes OP Units and LTIP Units) 14,180,376 3.8 % Total Shares and Units 374,659,636 100.0 % Common Share Price at December 31, 2013 $ 51.87 19,433,595 99.7 % Perpetual Preferred Equity (see below) 50,000 0.3 % Total Equity 19,483,595 100.0 % 64.4 % Total Market Capitalization $ 30,249,849 100.0 % Perpetual Preferred Equity as of December 31, 2013 (Amounts in thousands except for share and per share amounts) Annual Annual Redemption Outstanding Liquidation Dividend Dividend Series Date Shares Value Per Share Amount Preferred Shares: 8.29% Series K 12/10/26 1,000,000 $ 50,000 $ 4.145 $ 4,145 Total Perpetual Preferred Equity 1,000,000 $ 50,000 $ 4,145 Equity Residential Common Share and Unit Weighted Average Amounts Outstanding 2013 2012 Q413 Q412 Weighted Average Amounts Outstanding for Net Income Purposes: Common Shares - basic 354,305,373 302,700,630 359,918,500 310,397,925 Shares issuable from assumed conversion/vesting of (1): - OP Units — 13,853,526 13,724,142 13,965,627 - long-term compensation shares/units — 3,211,722 2,217,058 2,744,518 Total Common Shares and Units - diluted (1) 354,305,373 319,765,878 375,859,700 327,108,070 Weighted Average Amounts Outstanding for FFO and Normalized FFO Purposes: Common Shares - basic 354,305,373 302,700,630 359,918,500 310,397,925 OP Units - basic 13,733,055 13,853,526 13,724,142 13,965,627 Total Common Shares and OP Units - basic 368,038,428 316,554,156 373,642,642 324,363,552 Shares issuable from assumed conversion/vesting of: - long-term compensation shares/units 2,439,738 3,211,722 2,217,058 2,744,518 Total Common Shares and Units - diluted 370,478,166 319,765,878 375,859,700 327,108,070 Period Ending Amounts Outstanding: Common Shares (includes Restricted Shares) 360,479,260 325,054,654 Units (includes OP Units and LTIP Units) 14,180,376 13,968,758 Total Shares and Units 374,659,636 339,023,412 (1) Potential common shares issuable from the assumed conversion of OP Units and the exercise/vesting of long-term compensation shares/units are automatically anti-dilutive and therefore excluded from the diluted earnings per share calculation as the Company had a loss from continuing operations during the year ended December 31, 2013 . Equity Residential Partially Owned Entities as of December 31, 2013 (Amounts in thousands except for project and apartment unit amounts) Consolidated Unconsolidated Development Projects Development Projects Held for and/or Under Development (4) Operating Total Held for and/or Under Development (5) Completed, Not Stabilized (6) Operating Total Total projects (1) — 19 19 — 3 1 4 Total apartment units (1) — 3,752 3,752 — 1,333 336 1,669 Operating information for the year ended 12/31/13 (at 100%): Operating revenue $ 231 $ 80,968 $ 81,199 $ — $ 6,629 $ 4,597 $ 11,226 Operating expenses 741 24,888 25,629 135 3,554 1,949 5,638 Net operating (loss) income (510 ) 56,080 55,570 (135 ) 3,075 2,648 5,588 Depreciation — 31,824 31,824 — 1,887 4,605 6,492 General and administrative/other 882 93 975 — 53 201 254 Operating (loss) income (1,392 ) 24,163 22,771 (135 ) 1,135 (2,158 ) (1,158 ) Interest and other income 2 3 5 — — 10 10 Other expenses (503 ) (5 ) (508 ) — — — — Interest: Expense incurred, net (2 ) (14,561 ) (14,563 ) — (1,886 ) (941 ) (2,827 ) Amortization of deferred financing costs — (301 ) (301 ) — — (1 ) (1 ) (Loss) income before income and other taxes, (loss) from investments in unconsolidated entities, net (loss) gain on sales of land parcels and discontinued operations (1,895 ) 9,299 7,404 (135 ) (751 ) (3,090 ) (3,976 ) Income and other tax (expense) benefit (11 ) (56 ) (67 ) — — — — (Loss) from investments in unconsolidated entities — (1,387 ) (1,387 ) — — — — Net (loss) on sales of land parcels (17 ) — (17 ) — — — — Net gain on sales of discontinued operations — 26,673 26,673 — — — — Net (loss) income $ (1,923 ) $ 34,529 $ 32,606 $ (135 ) $ (751 ) $ (3,090 ) $ (3,976 ) Debt - Secured (2): EQR Ownership (3) $ — $ 281,938 $ 281,938 $ 569 $ 55,925 $ 6,110 $ 62,604 Noncontrolling Ownership — 78,192 78,192 10,810 116,354 24,440 151,604 Total (at 100%) $ — $ 360,130 $ 360,130 $ 11,379 $ 172,279 $ 30,550 $ 214,208 (1) Project and apartment unit counts exclude all uncompleted development projects until those projects are substantially completed. (2) All debt is non-recourse to the Company with the exception of 50% of the current $11.4 million outstanding debt balance on one unconsolidated development project. (3) Represents the Company's current equity ownership interest. (4) See Projects Under Development - Partially Owned on page 22 for further information. (5) See Projects Under Development - Unconsolidated on page 23 for further information. (6) Projects included here are substantially complete. However, they may still require additional exterior and interior work for all units to be available for leasing. See Projects Under Development - Unconsolidated on page 23 for further information. Note: The above table excludes the Company's interests in unconsolidated joint ventures entered into with AvalonBay ("AVB") in connection with the Archstone transaction. These ventures own certain non-core Archstone assets that are held for sale and succeeded to certain residual Archstone liabilities, such as liability for various employment-related matters as well as responsibility for tax protection arrangements and third-party preferred interests in former Archstone subsidiaries. The preferred interests have an aggregate liquidation value of $89.0 million at December 31, 2013 . The ventures are owned 60% by the Company and 40% by AVB. Equity Residential Consolidated Development and Lease-Up Projects as of December 31, 2013 (Amounts in thousands except for project and apartment unit amounts) Projects Location No. of Apartment Units Total Capital Cost (1) Total Book Value to Date Total Book Value Not Placed in Service Total Debt Percentage Completed Percentage Leased Percentage Occupied Estimated Completion Date Estimated Stabilization Date Projects Under Development - Wholly Owned: 1111 Belle Pre (formerly The Madison) Alexandria, VA 360 $ 115,072 $ 102,310 $ 102,310 $ — 92 % 27 % 17 % Q1 2014 Q2 2015 Jia (formerly Chinatown Gateway) Los Angeles, CA 280 92,920 86,761 86,761 — 99 % 4 % — Q1 2014 Q3 2015 Urbana (formerly Market Street Landing ) Seattle, WA 287 90,024 77,522 77,522 — 88 % 1 % — Q1 2014 Q3 2015 Reserve at Town Center III Mill Creek, WA 95 21,330 18,429 18,429 — 77 % 10 % — Q2 2014 Q4 2014 Residences at Westgate II (formerly Westgate III) Pasadena, CA 88 54,037 31,246 31,246 — 36 % — — Q2 2014 Q1 2015 Residences at Westgate I (formerly Westgate II) Pasadena, CA 252 125,293 101,569 101,569 — 71 % — — Q2 2014 Q2 2015 170 Amsterdam (2) New York, NY 237 110,892 44,799 44,799 — 30 % — — Q1 2015 Q1 2016 Azure (at Mission Bay ) San Francisco, CA 273 189,090 66,268 66,268 — 21 % — — Q3 2015 Q4 2016 West Seattle Seattle, WA 206 67,112 18,719 18,719 — 2 % — — Q4 2015 Q3 2016 Tallman Seattle, WA 303 84,277 23,397 23,397 — 5 % — — Q4 2015 Q2 2017 Village at Howard Hughes Los Angeles, CA 545 193,231 51,728 51,728 — 1 % — — Q2 2016 Q2 2017 Tasman San Jose, CA 554 214,923 49,380 49,380 — 5 % — — Q2 2016 Q2 2018 Projects Under Development - Wholly Owned 3,480 1,358,201 672,128 672,128 — Projects Under Development - Partially Owned: Park Aire (formerly Enclave at Wellington ) (3) Wellington , FL 268 50,000 47,445 47,445 — 96 % 32 % 29 % Q1 2014 Q1 2015 400 Park Avenue South (4) New York, NY 269 251,961 172,523 172,523 — 63 % — — Q2 2015 Q1 2016 Projects Under Development - Partially Owned 537 301,961 219,968 219,968 — Projects Under Development 4,017 1,660,162 892,096 892,096 — Completed Not Stabilized - Wholly Owned (5): Gaithersburg Station (6) (7) Gaithersburg, MD 389 93,000 92,177 — 89,462 91 % 85 % Completed Q2 2014 Breakwater at Marina Del Rey (2) (6) (8) Marina Del Rey, CA 224 90,449 87,590 — 27,000 75 % 70 % Completed Q2 2014 Oasis at Delray Beach II (3) Delray Beach, FL 128 23,739 21,330 — — 47 % 38 % Completed Q2 2014 Projects Completed Not Stabilized - Wholly Owned 741 207,188 201,097 — 116,462 Projects Completed Not Stabilized 741 207,188 201,097 — 116,462 Total Consolidated Projects 4,758 $ 1,867,350 $ 1,093,193 $ 892,096 $ 116,462 Land Held for Development N/A N/A $ 393,522 $ 393,522 $ — NOI CONTRIBUTION FROM CONSOLIDATED DEVELOPMENT PROJECTS Total Capital Cost (1) Q4 2013 NOI Projects Under Development $ 1,660,162 $ (157 ) Completed Not Stabilized 207,188 2,143 Completed and Stabilized During the Quarter — — Total Consolidated Development NOI Contribution $ 1,867,350 $ 1,986 (1) Total capital cost represents estimated cost for projects under development and/or developed and all capitalized costs incurred to date plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP. (2) The land under this development is subject to a long term ground lease. (3) The Company acquired this development project in connection with the Archstone transaction and is continuing/has completed development activities. The Company owns 100% of Oasis at Delray Beach II and has a 95.0% ownership interest in Park Aire. (4) The Company is jointly developing with Toll Brothers (NYSE: TOL) a project at 400 Park Avenue South in New York City with the Company's rental portion on floors 2-22 and Toll's for sale portion on floors 23-40. The total capital cost and total book value to date represent only the Company's portion of the project. Toll Brothers has funded $96.8 million for their allocated share of the project. (5) Properties included here are substantially complete. However, they may still require additional exterior and interior work for all apartment units to be available for leasing. (6) Amounts have been adjusted to reflect Q2/Q3/Q4 2013 changes to the purchase price allocation for these projects which were acquired in the Archstone transaction. (7) The Company acquired this completed development project prior to stabilization in connection with the Archstone transaction and is continuing lease-up activities. This project has a non-recourse loan with a current outstanding balance of $89.5 million , bears interest at 5.24% and matures April 1, 2053 . (8) The Company acquired this property in connection with the Archstone transaction and has completed renovations. The non-recourse loan on this property has a current outstanding balance of $27.0 million , bears interest at LIBOR plus 1.75% and matures September 1, 2014 . Equity Residential Unconsolidated Development and Lease-Up Projects as of December 31, 2013 (Amounts in thousands except for project and apartment unit amounts) Projects Location Percentage Ownership No. of Apartment Units Total Capital Cost (1) Total Book Value to Date Total Book Value Not Placed in Service Total Debt Percentage Completed Percentage Leased Percentage Occupied Estimated Completion Date Estimated Stabilization Date Projects Under Development - Unconsolidated: Parkside at Emeryville (2) (3) Emeryville, CA 5.0 % 176 $ 75,000 $ 45,123 $ 45,123 $ 11,379 50 % — — Q4 2014 Q4 2015 Projects Under Development - Unconsolidated 176 75,000 45,123 45,123 11,379 Projects Under Development 176 75,000 45,123 45,123 11,379 Completed Not Stabilized - Unconsolidated (4): San Norterra (5) Phoenix, AZ 85.0 % 388 56,250 52,899 - 33,030 85 % 78 % Completed Q2 2014 Nexus Sawgrass (formerly Sunrise Village ) (6) Sunrise, FL 20.0 % 501 80,000 78,271 - 47,616 69 % 64 % Completed Q3 2014 Domain (6) San Jose, CA 20.0 % 444 154,570 153,207 - 91,633 48 % 44 % Completed Q4 2015 Projects Completed Not Stabilized - Unconsolidated 1,333 290,820 284,377 - 172,279 Projects Completed Not Stabilized 1,333 290,820 284,377 - 172,279 Total Unconsolidated Projects 1,509 $ 365,820 $ 329,500 $ 45,123 $ 183,658 (1) Total capital cost represents estimated cost for projects under development and/or developed and all capitalized costs incurred to date plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP. (2) The Company acquired this development project in connection with the Archstone transaction. Total project costs are approximately $75.0 million and construction is being partially funded with a construction loan. Parkside at Emeryville has a maximum debt commitment of $39.5 million , the loan bears interest at LIBOR plus 2.25% and matures August 14, 2015 . The Company has given a repayment guaranty on the construction loan of 50% of the outstanding balance, up to a maximum of $19.7 million , and has given certain construction cost overrun guarantees. (3) Amounts have been adjusted to reflect Q2/Q3/Q4 2013 changes to the purchase price allocation for this project which was acquired in the Archstone transaction. (4) Properties included here are substantially complete. However, they may still require additional exterior and interior work for all apartment units to be available for leasing. (5) The Company acquired this development project in connection with the Archstone transaction. Total project costs are approximately $56.3 million and construction was partially funded with a non-recourse construction loan. San Norterra has a maximum debt commitment of $34.8 million , the loan bears interest at LIBOR plus 2.00% and matures January 6, 2015 . (6) These development projects are owned 20% by the Company and 80% by an institutional partner in two separate unconsolidated joint ventures. Total project costs are approximately $234.6 million and construction was predominantly funded with two separate long-term, non-recourse secured loans from the partner. The Company was responsible for constructing the projects and has given certain construction cost overrun guarantees but currently has no further funding obligations. Nexus Sawgrass has a maximum debt commitment of $48.7 million , the loan bears interest at 5.60% and matures January 1, 2021 . Domain has a maximum debt commitment of $98.6 million , the loan bears interest at 5.75% and matures January 1, 2022 . Equity Residential Repairs and Maintenance Expenses and Capital Expenditures to Real Estate For the Year Ended December 31, 2013 (Amounts in thousands except for apartment unit and per apartment unit amounts) Repairs and Maintenance Expenses Capital Expenditures to Real Estate Total Expenditures Total Apartment Units (1) Expense (2) Avg. Per Apartment Unit Payroll (3) Avg. Per Apartment Unit Total Avg. Per Apartment Unit Replacements (4) Avg. Per Apartment Unit Building Improvements (5) Avg. Per Apartment Unit Total Avg. Per Apartment Unit Grand Total Avg. Per Apartment Unit Same Store Properties (6) 80,247 $ 82,280 $ 1,025 $ 64,439 $ 803 $ 146,719 $ 1,828 $ 45,184 $ 563 $ 49,308 $ 615 $ 94,492 $ 1,178 (9) $ 241,211 $ 3,006 Non-Same Store Properties (7) 22,826 21,424 1,099 16,121 827 37,545 1,926 16,668 855 19,246 988 35,914 1,843 73,459 3,769 Other (8) — 7,243 11,338 18,581 3,197 2,213 5,410 23,991 Total 103,073 $ 110,947 $ 91,898 $ 202,845 $ 65,049 $ 70,767 $ 135,816 $ 338,661 (1) Total Apartment Units - Excludes 1,669 unconsolidated apartment units and 5,113 military housing apartment units for which repairs and maintenance expenses and capital expenditures to real estate are self-funded and do not consolidate into the Company's results. (2) Repairs and Maintenance Expenses - Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair costs. (3) Maintenance Payroll - Includes payroll and related expenses for maintenance staff. (4) Replacements - Includes new expenditures inside the apartment units such as appliances, mechanical equipment, fixtures and flooring, including carpeting. Replacements for same store properties also include $19.5 million spent in 2013 on apartment unit renovations/rehabs (primarily kitchens and baths) on 2,560 same store apartment units (equating to about $7,600 per apartment unit rehabbed) designed to reposition these assets for higher rental levels in their respective markets. The Company also completed apartment unit renovations/rehabs (primarily kitchens and baths) on 1,200 non-same store apartment units (primarily Archstone properties), equating to a total cost of approximately $11.9 million . In 2014, the Company expects to spend approximately $45.0 million for all unit renovation/rehab costs (primarily on same store properties) at a weighted average cost of $8,500 per apartment unit rehabbed. (5) Building Improvements - Includes roof replacement, paving, amenities and common areas, building mechanical equipment systems, exterior painting and siding, major landscaping, vehicles and office and maintenance equipment. (6) Same Store Properties - Primarily includes all properties acquired or completed and stabilized prior to January 1, 2012 , less properties subsequently sold. (7) Non-Same Store Properties - Primarily includes all properties acquired during 2012 and 2013, plus any properties in lease-up and not stabilized as of January 1, 2012 . Per apartment unit amounts are based on a weighted average of 19,493 apartment units. Includes approximately ten months of activity for the Archstone properties. (8) Other - Primarily includes expenditures for properties sold during the period. (9) For 2014, the Company estimates that it will spend approximately $1,700 per apartment unit of capital expenditures, inclusive of apartment unit renovation/rehab costs, or $1,250 per apartment unit excluding apartment unit renovation/rehab costs. Equity Residential Discontinued Operations (Amounts in thousands) Year Ended Quarter Ended December 31 , December 31 , 2013 2012 2013 2012 REVENUES Rental income $ 121,942 $ 445,832 $ 2,751 $ 103,124 Total revenues 121,942 445,832 2,751 103,124 EXPENSES (1) Property and maintenance 36,792 103,371 1,221 21,536 Real estate taxes and insurance 11,903 41,208 301 10,692 Property management 1 211 — — Depreciation 34,380 124,323 516 27,630 General and administrative 85 92 8 4 Total expenses 83,161 269,205 2,046 59,862 Discontinued operating income 38,781 176,627 705 43,262 Interest and other income 217 156 61 75 Other expenses (3 ) (170 ) — — Interest (2): Expense incurred, net (1,296 ) (3,811 ) (20 ) (454 ) Amortization of deferred financing costs (228 ) (140 ) — (21 ) Income and other tax (expense) benefit (449 ) (34 ) 55 (57 ) Discontinued operations 37,022 172,628 801 42,805 Net gain on sales of discontinued operations 2,036,505 548,278 45,928 240,831 Discontinued operations, net $ 2,073,527 $ 720,906 $ 46,729 $ 283,636 (1) Includes expenses paid in the current period for properties sold in prior periods related to the Company's period of ownership. (2) Includes only interest expense specific to secured mortgage notes payable for properties sold. Equity Residential Normalized FFO Guidance Reconciliations and Non-Comparable Items (Amounts in thousands except per share data) (All per share data is diluted) Normalized FFO Guidance Reconciliations Normalized FFO Reconciliations Guidance Q4 2013 to Actual Q4 2013 Amounts Per Share Guidance Q4 2013 Normalized FFO - Diluted (2) (3) $ 285,836 $ 0.760 Property NOI 586 0.002 Other 2,506 0.007 Actual Q4 2013 Normalized FFO - Diluted (2) (3) $ 288,928 $ 0.769 Non-Comparable Items – Adjustments from FFO to Normalized FFO (2) (3) Year Ended December 31 , Quarter Ended December 31 , 2013 2012 Variance 2013 2012 Variance Impairment $ — $ — $ — $ — $ — $ — Asset impairment and valuation allowances — — — — — — Archstone merger costs (merger expenses) 19,864 5,619 14,245 123 3,698 (3,575 ) Archstone merger costs (loss from investments in unconsolidated entities due to merger expenses) 54,004 — 54,004 (777 ) — (777 ) Property acquisition costs (other expenses) 313 6,974 (6,661 ) 110 138 (28 ) Write-off of pursuit costs (other expenses) 5,184 9,056 (3,872 ) 1,215 2,915 (1,700 ) Property acquisition costs and write-off of pursuit costs 79,365 21,649 57,716 671 6,751 (6,080 ) Prepayment premiums/penalties (interest expense) 222,415 272 222,143 150,972 — 150,972 Write-off of unamortized deferred financing costs (interest expense) (A) 9,853 10,965 (1,112 ) 5,727 8,854 (3,127 ) Write-off of unamortized (premiums)/discounts/OCI (interest expense) (110,538 ) (96 ) (110,442 ) (113,789 ) (54 ) (113,735 ) Premium on redemption of Preferred Shares (B) — 5,152 (5,152 ) — 2 (2 ) Debt extinguishment (gains) losses, including prepayment penalties, preferred share redemptions and non-cash convertible debt discounts 121,730 16,293 105,437 42,910 8,802 34,108 Net (gain) on sales of land parcels (12,227 ) — (12,227 ) (48 ) — (48 ) Net incremental (gain) loss on sales of condominium units (8 ) 11 (19 ) (1 ) 60 (61 ) Income and other tax expense (benefit) - Condo sales — (66 ) 66 — 26 (26 ) (Gain) loss on sale of Equity Corporate Housing (ECH) (1,470 ) (200 ) (1,270 ) (761 ) 150 (911 ) (Gain) on sale of investment securities (4,203 ) — (4,203 ) (3,373 ) — (3,373 ) (Gains) losses on sales of non-operating assets, net of income and other tax expense (benefit) (17,908 ) (255 ) (17,653 ) (4,183 ) 236 (4,419 ) Write-off of unamortized retail lease intangibles (rental income) (2,146 ) — (2,146 ) (2,146 ) — (2,146 ) Insurance/litigation settlement expense (other expenses) 3,611 4,714 (1,103 ) 250 — 250 Prospect Towers garage insurance proceeds (real estate taxes and insurance) — (3,467 ) 3,467 — — — Archstone termination fees (interest and other income) — (150,000 ) 150,000 — (80,000 ) 80,000 Other (other expenses) — 1,118 (1,118 ) — 52 (52 ) Other miscellaneous non-comparable items 1,465 (147,635 ) 149,100 (1,896 ) (79,948 ) 78,052 Non-comparable items – Adjustments from FFO to Normalized FFO (2) (3) $ 184,652 $ (109,948 ) $ 294,600 $ 37,502 $ (64,159 ) $ 101,661 (A) For the year ended December 31, 2013 , includes $2.5 million of bridge loan costs related to the Archstone transaction. For both the year and quarter ended December 31, 2012 , includes $8.4 million of bridge loan costs related to the Archstone transaction. (B) Includes $5.13 million of original issuance costs previously deferred. Note: See page 28 for the definitions, the footnotes referenced above and the reconciliations of EPS to FFO and Normalized FFO. Equity Residential Normalized FFO Guidance and Assumptions The guidance/projections provided below are based on current expectations and are forward-looking. All guidance is given on a Normalized FFO basis. Therefore, certain items excluded from Normalized FFO, such as debt extinguishment costs/prepayment penalties, property acquisition costs and the write-off of pursuit costs, are not included in the estimates provided on this page. See page 28 for the definitions, the footnotes referenced below and the reconciliations of EPS to FFO and Normalized FFO. 2014 Normalized FFO Guidance (per share diluted) Q1 2014 2014 Expected Normalized FFO (2) (3) $0.68 to $0.72 $3.03 to $3.13 2014 Same Store Assumptions Physical occupancy 95.4 % Revenue change 3.0% to 4.0% Expense change 2.0% to 3.0% NOI change 3.50% to 4.75% (Note: The same store guidance above includes all of the stabilized assets acquired in the Archstone transaction that are owned and managed by the Company. 30 basis point change in NOI percentage = $0.01 per share change in EPS/FFO/Normalized FFO) 2014 Transaction Assumptions Consolidated rental acquisitions $500.0 million Consolidated rental dispositions $500.0 million Capitalization rate spread 100 basis points 2014 Debt Assumptions Weighted average debt outstanding $10.9 billion to $11.2 billion Weighted average interest rate (reduced for capitalized interest) 4.12 % Interest expense $449.1 million to $461.4 million 2014 Other Guidance Assumptions General and administrative expense $50.0 million to $52.0 million Interest and other income $0.5 million Income and other tax expense $1.0 million to $2.0 million Debt offerings $500.0 million Equity ATM share offerings No amounts budgeted Preferred share offerings No amounts budgeted Weighted average Common Shares and Units - Diluted 376.8 million Equity Residential Additional Reconciliations, Definitions and Footnotes (Amounts in thousands except per share data) (All per share data is diluted) The guidance/projections provided below are based on current expectations and are forward-looking. Reconciliations of EPS to FFO and Normalized FFO for Pages 7, 26 and 27 Expected Q4 2013 Expected Expected Q1 2014 2014 Amounts Per Share Per Share Per Share Expected Earnings - Diluted (5) $ 83,778 $ 0.223 $0.23 to $0.27 $1.68 to $1.78 Add: Expected depreciation expense 175,616 0.467 0.45 1.93 Less: Expected net gain on sales (5) (17,864) (0.048) — (0.60) Expected FFO - Diluted (1) (3) 241,530 0.642 0.68 to 0.72 3.01 to 3.11 Asset impairment and valuation allowances — — — — Property acquisition costs and write-off of pursuit costs 2,999 0.008 — 0.02 Debt extinguishment (gains) losses, including prepayment penalties, preferred share redemptions and non-cash convertible debt discounts 43,360 0.115 — — (Gains) losses on sales of non-operating assets, net of income and other tax expense (benefit) (2,053) (0.005) — — Other miscellaneous non-comparable items — — — — Expected Normalized FFO - Diluted (2) (3) $ 285,836 $ 0.760 $0.68 to $0.72 $3.03 to $3.13 Definitions and Footnotes for Pages 7, 26 and 27 (1) The National Association of Real Estate Investment Trusts ("NAREIT") defines funds from operations ("FFO") ( April 2002 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States ("GAAP")), excluding gains (or losses) from sales and impairment write-downs of depreciable operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. The April 2002 White Paper states that gain or loss on sales of property is excluded from FFO for previously depreciated operating properties only. Once the Company commences the conversion of apartment units to condominiums, it simultaneously discontinues depreciation of such property. (2) Normalized funds from operations ("Normalized FFO") begins with FFO and excludes: • the impact of any expenses relating to non-operating asset impairment and valuation allowances; • property acquisition and other transaction costs related to mergers and acquisitions and pursuit cost write-offs; • gains and losses from early debt extinguishment, including prepayment penalties, preferred share redemptions and the cost related to the implied option value of non-cash convertible debt discounts; • gains and losses on the sales of non-operating assets, including gains and losses from land parcel and condominium sales, net of the effect of income tax benefits or expenses; and • other miscellaneous non-comparable items. (3) The Company believes that FFO and FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses related to dispositions of depreciable property and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units can help compare the operating performance of a company's real estate between periods or as compared to different companies. The company also believes that Normalized FFO and Normalized FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the company's operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company's actual operating results. FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units do not represent net income, net income available to Common Shares or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units should not be exclusively considered as alternatives to net income, net income available to Common Shares or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company's calculation of FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies. (4) FFO available to Common Shares and Units and Normalized FFO available to Common Shares and Units are calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares in accordance with accounting principles generally accepted in the United States . The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the "Noncontrolling Interests – Operating Partnership ". Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis. (5) Earnings represents net income per share calculated in accordance with accounting principles generally accepted in the United States . Expected earnings is calculated on a basis consistent with actual earnings. Due to the uncertain timing and extent of property dispositions and the resulting gains/losses on sales, actual earnings could differ materially from expected earnings. Same Store NOI Reconciliation for Page 11 The following tables present reconciliations of operating income per the consolidated statements of operations to NOI for the 2013 and the Fourth Quarter 2013 Same Store Properties : Year Ended December 31 , Quarter Ended December 31 , 2013 2012 2013 2012 Operating income $ 512,288 $ 514,122 $ 223,669 $ 148,247 Adjustments: Non-same store operating results (388,165 ) (10,912 ) (108,586 ) 1,985 Fee and asset management revenue (9,698 ) (9,573 ) (2,299 ) (2,245 ) Fee and asset management expense 6,460 4,663 1,721 1,068 Depreciation 978,973 560,669 182,740 140,422 General and administrative 62,179 47,233 15,162 10,072 Same store NOI $ 1,162,037 $ 1,106,202 $ 312,407 $ 299,549 Equity Residential Marty McKenna , 312-928-1901 Source: Equity Residential


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