Exhibit 99.1

Item 6. Selected Financial Data

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

CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
(Financial information in thousands except for per Unit and property data)

		Year Ended December 31,
		2009 (3)				2008 (3)				2007 (3)				2006 (3)				2005
OPERATING DATA:
Total revenues from continuing operations		$	1,921,047			$	1,952,583			$	1,801,812			$	1,563,623			$	1,283,019
Interest and other income		$	16,684			$	33,515			$	20,037			$	30,785			$	68,220
Income (loss) from continuing operations		$	20,192			$	(21,325	)		$	13,147			$	(13,283	)		$	63,933
Discontinued operations, net		$	361,837			$	457,738			$	1,034,209			$	1,160,900			$	867,313
Net income		$	382,029			$	436,413			$	1,047,356			$	1,147,617			$	931,246
Net income available to Units		$	368,099			$	419,241			$	1,015,769			$	1,100,721			$	866,306
Earnings per Unit – basic:
Income (loss) from continuing operations available to Units		$	0.02			$	(0.13	)		$	(0.06	)		$	(0.19	)		$	—
Net income available to Units		$	1.27			$	1.46			$	3.40			$	3.55			$	2.83
Weighted average Units outstanding			289,167				287,631				298,392				310,452				306,579
Earnings per Unit – diluted:
Income (loss) from continuing operations available to Units		$	0.02			$	(0.13	)		$	(0.06	)		$	(0.19	)		$	—
Net income available to Units		$	1.27			$	1.46			$	3.40			$	3.55			$	2.83
Weighted average Units outstanding			290,105				287,631				298,392				310,452				306,579
Distributions declared per Unit outstanding		$	1.64			$	1.93			$	1.87			$	1.79			$	1.74
BALANCE SHEET DATA (at end of period):
Real estate, before accumulated depreciation		$	18,465,144			$	18,690,239			$	18,333,350			$	17,235,175			$	16,590,370
Real estate, after accumulated depreciation		$	14,587,580			$	15,128,939			$	15,163,225			$	14,212,695			$	13,702,230
Total assets		$	15,417,515			$	16,535,110			$	15,689,777			$	15,062,219			$	14,108,751
Total debt		$	9,392,570			$	10,483,942			$	9,478,157			$	8,017,008			$	7,591,073
Redeemable Limited Partners		$	258,280			$	264,394			$	345,165			$	509,310			$	433,927
Noncontrolling Interests – Partially Owned Properties		$	11,054			$	25,520			$	26,236			$	26,814			$	16,965
Total Partners’ capital		$	5,163,459			$	5,043,185			$	5,079,739			$	5,800,205			$	5,366,631
OTHER DATA:
Total properties (at end of period)			495				548				579				617				926
Total apartment units (at end of period)			137,007				147,244				152,821				165,716				197,404
Funds from operations available to Units – basic (1) (2)		$	615,505			$	618,372			$	713,412			$	712,524			$	784,625
Cash flow provided by (used for):
Operating activities		$	672,462			$	755,252			$	793,232			$	755,774			$	698,531
Investing activities		$	103,579			$	(344,028	)		$	(200,749	)		$	(259,780	)		$	(592,201	)
Financing activities		$	(1,473,547	)		$	428,739			$	(801,929	)		$	(324,545	)		$	(101,007	)

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following discussion and analysis of the results of operations and financial condition of the Operating Partnership should be read in connection with the Consolidated Financial Statements and Notes thereto. Due to the Operating Partnership’s ability to control its subsidiaries other than entities owning interests in the Partially Owned Properties – Unconsolidated and certain other entities in which it has investments, each such subsidiary entity has been consolidated with the Operating Partnership for financial reporting purposes. Capitalized terms used herein and not defined are as defined elsewhere in the Annual Report on Form 10-K for the year ended December 31, 2009.

Forward-Looking Statements

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

§

We intend to actively acquire multifamily properties for rental operations as market conditions dictate. The Operating Partnership also develops projects and currently has several properties under development. We may begin new development activities if conditions warrant. We may underestimate the costs necessary to bring an acquired property up to standards established for its intended market position or to complete a development property. Additionally, we expect that other major real estate investors with significant capital will compete with us for attractive investment opportunities or may also develop properties in markets where we focus our development efforts. This competition may increase prices for multifamily properties. We may not be in a position or have the opportunity in the future to make suitable property acquisitions on favorable terms. To the extent that we do develop more properties if conditions warrant, we expect to do so ourselves in addition to co-investing with our development partners. The total number of development units, costs of development and estimated completion dates are subject to uncertainties arising from changing economic conditions (such as the cost of labor and construction

			materials), competition and local government regulation;
	§		Debt financing and other capital required by the Operating Partnership may not be available or may only be available on adverse terms;
	§		Labor and materials required for maintenance, repair, capital expenditure or development may be more expensive than anticipated;
	§		Occupancy levels and market rents may be adversely affected by national and local economic and market conditions including, without limitation, new construction and excess inventory of multifamily housing and single family housing, slow or negative employment growth, availability of low interest mortgages for single family home buyers and the potential for geopolitical instability, all of which are beyond the Operating Partnership’s control; and
	§		Additional factors as discussed in Part I of the Annual Report on Form 10-K, particularly those under “Item 1A. Risk Factors”.

     Forward-looking statements and related uncertainties are also included in Notes 2, 5, 11 and 18 in the Notes to Consolidated Financial Statements in this report.

Overview

     ERP Operating Limited Partnership (“ERPOP”), an Illinois limited partnership, was formed in May 1993 to conduct the multifamily residential property business of Equity Residential (“EQR”). EQR, a Maryland real estate investment trust (“REIT”) formed in March 1993, is an S&P 500 company focused on the acquisition, development and management of high quality apartment properties in top United States growth markets. EQR has elected to be taxed as a REIT.

     EQR is one of the largest publicly traded real estate companies and is the largest publicly traded owner of multifamily properties in the United States (based on the aggregate market value of its outstanding Common Shares, the number of apartment units wholly owned and total revenues earned). The Operating Partnership’s corporate headquarters are located in Chicago, Illinois and the Operating Partnership also operates property management offices throughout the United States. As of December 31, 2009, the Operating Partnership has approximately 4,100 employees who provide real estate operations, leasing, legal, financial, accounting, acquisition, disposition, development and other support functions.

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

     Business Objectives and Operating Strategies

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

§

Leveraging our size and scale in four critical ways:

	§		Investing in apartment communities located in strategically targeted markets to maximize our total return on an enterprise level;
	§		Meeting the needs of our residents by offering a wide array of product choices and a commitment to service;
	§		Engaging, retaining and attracting the best employees by providing them with the education, resources and opportunities to succeed; and
	§		Sharing resources and best practices in both property management and across the enterprise.

§

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

	§		High barrier-to-entry markets where because of land scarcity or government regulation it is difficult or costly to build new apartment complexes leading to low supply;
	§		Strong economic growth leading to high demand for apartments; and
	§		Markets with an attractive quality of life leading to high demand and retention.

	§		Giving residents reasons to stay with the Operating Partnership by providing a range of product choices available in our diversified portfolio and by enhancing their experience with us through meticulous customer service by our employees and by providing various value-added services.
	§		Being open and responsive to changes in the market in order to take advantage of investment opportunities that align with our long-term vision.

     Acquisition, Development and Disposition Strategies

     The Operating Partnership anticipates that future property acquisitions, developments and dispositions will occur within the United States. Acquisitions and developments may be financed from various sources of capital, which may include retained cash flow, issuance of additional equity and debt securities, sales of properties, joint venture agreements and collateralized and uncollateralized borrowings. In addition, the Operating Partnership may acquire properties in transactions that include the issuance of limited partnership interests in the Operating Partnership (“OP Units”) as consideration for the acquired properties. Such transactions may, in certain circumstances, enable the sellers to defer, in whole or in part, the recognition of taxable income or gain that might otherwise result from the sales. ERPOP may also acquire land parcels to hold and/or sell based on market opportunities.

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

	§		strategically targeted markets;
	§		income levels and employment growth trends in the relevant market;
	§		employment and household growth and net migration in the relevant market’s population;
	§		barriers to entry that would limit competition (zoning laws, building permit availability, supply of undeveloped or developable real estate, local building costs and construction costs, among other factors);
	§		the location, construction quality, age, condition and design of the property;
	§		the current and projected cash flow of the property and the ability to increase cash flow;
	§		the potential for capital appreciation of the property;
	§		the terms of resident leases, including the potential for rent increases;
	§		the potential for economic growth and the tax and regulatory environment of the community in which the property is located;
	§		the occupancy and demand by residents for properties of a similar type in the vicinity (the overall market and submarket);
	§		the prospects for liquidity through sale, financing or refinancing of the property;
	§		the benefits of integration into existing operations;
	§		purchase prices and yields of available existing stabilized properties, if any;
	§		competition from existing multifamily properties, comparably priced single family homes or rentals, residential properties under development and the potential for the construction of new multifamily properties in the area; and
	§		opportunistic selling based on demand and price of high quality assets, including condominium conversions.

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

     Current Environment

     The slowdown in the economy, which accelerated in the fourth quarter of 2008 and continued into 2009, coupled with continued job losses and/or lack of job growth leads us to be cautious regarding expected performance for 2010. Since the fourth quarter of 2008 and continuing into the fourth quarter of 2009, our revenue has declined in comparison to the prior year in most of our major markets as the economic slowdown continues to impact existing and prospective residents. Markets with little employment loss have performed better than markets with larger employment issues. Although all of our markets experienced job losses in 2009, the pace of those losses appears to have begun to slow. While the job market is likely to remain weak in 2010, beginning late in the fourth quarter of 2009, household spending was reported to have increased and the deterioration in the labor market showed signs of abating. Despite a generally improving credit environment and better general economic conditions, the Operating Partnership may continue to experience a period of declining revenues, which would adversely impact the Operating Partnership’s

results of operations. The vast majority of our leases are for terms of 12 months or less. As a result, we quickly feel the impact of an economic downturn which limits our ability to raise rents or causes us to lower rents on turnover units and lease renewals. During late 2008 and early 2009, our rental rates declined on average between 9% and 10% for new residents but on average less than 1% for renewing residents. Rental rates have not declined, on average, since the first quarter of 2009 and began to show improvement in the latter part of the year. However, since our rental rates increased during most of 2008, our quarter over quarter revenue declines worsened each quarter in 2009 as compared to 2008. Quarter over quarter revenue declines are expected to continue in 2010 (although they should be less negative in 2010 vs. 2009 than when comparing 2009 vs. 2008). Given the roll-down in lease rates that occurred throughout 2009, the full year comparison to 2010 will continue to show declining revenue even if quarter over quarter revenue improvement begins in the second half of 2010. Our revenues are also impacted by our resident turnover rates, which have generally declined, and our occupancy rates, which began to rise in the fourth quarter of 2009. After three consecutive years of excellent expense control (same store expenses declined 0.1% between 2009 and 2008 and grew 2.2% between 2008 and 2007 and 2.1% between 2007 and 2006), the Operating Partnership anticipates that 2010 same store expenses will increase between 1.0% and 2.0% primarily due to cost pressures from non-controllable areas such as real estate taxes and utilities. The combination of expected declines in revenues and moderately increasing expense levels will have a negative impact on the Operating Partnership’s results of operations for 2010.

     The strained credit environment has negatively impacted the availability and pricing of debt capital. However, during this time, the multifamily residential sector has benefited from the continued liquidity provided by Fannie Mae and Freddie Mac. A vast majority of the properties we sold in 2008 and 2009 were financed for the purchaser by one of these agencies. Furthermore, Fannie Mae and Freddie Mac provided us with approximately $1.6 billion of secured mortgage financing in 2008 and $500.0 million in 2009 at attractive rates when compared to other sources of credit at that time. While unsecured credit markets improved in the latter part of 2009 and the Operating Partnership currently has unsecured lending options available to it at attractive rates, should the agencies discontinue providing liquidity to our sector, have their mandates changed or reduced or be disbanded or reorganized by the government, it would significantly reduce our access to debt capital and/or increase borrowing costs and would significantly reduce our sales of assets.

     In response to the recession and liquidity issues prevalent in the debt markets, we took a number of steps to better position ourselves. In early 2008, we began pre-funding our maturing debt obligations with approximately $1.6 billion in secured mortgage financing obtained from Fannie Mae and Freddie Mac. We also significantly reduced our acquisition activity. During the second half of 2008 and through the fourth quarter of 2009, we only acquired four properties (one of which was the buyout of our partner in an unconsolidated asset) and a long-term leasehold interest in a land parcel while we continued selling non-core assets. During the year ended December 31, 2009, the Operating Partnership sold 60 properties consisting of 12,489 units for $1.0 billion, as well as 62 condominium units for $12.0 million. The Operating Partnership acquired two properties consisting of 566 units for $145.0 million, one previously unconsolidated property consisting of 250 units for $18.5 million from its institutional joint venture partner and a long-term leasehold interest in a land parcel for $11.5 million during the year ended December 31, 2009. While we believe these sales of non-core assets better positions us for future success, they have resulted and will continue to result in dilution, particularly when the net sales proceeds are initially not reinvested in activities generating equivalent income such as acquisition of rental properties or repayment of debt. Additionally, we have significantly reduced our development activities, starting only two new projects in the first half of 2008 and none in the second half of the year or during 2009. We also reduced the number of planned development projects we will undertake in the future and took a $116.4 million impairment charge in 2008 to reduce the value of five assets that we no longer plan on pursuing. We took an additional $11.1 million impairment charge in 2009 to reduce the value of one asset. The Operating Partnership reduced its quarterly OP Unit dividend beginning with the dividend for the third quarter of 2009, from $0.4825 per Unit (an annual rate of $1.93 per Unit) to $0.3375 per Unit (an annual rate of $1.35 per Unit).

     The credit environment improved throughout mid and late 2009 and we currently have access to multiple sources of capital allowing us a less cautious posture with respect to pre-funding our maturing debt obligations. As a result of the improved credit environment, in late 2009, we utilized $366.2 million of cash on hand to repurchase certain unsecured notes and convertible notes in public tender offers. Concurrently, beginning in the fourth quarter of 2009, we began to see an increase in the availability of attractive acquisition opportunities. We expect to revert from a net seller of assets during 2009 to a net buyer of assets in 2010. During 2010, we expect that property dispositions will be more a funding source for attractive acquisition opportunities that we may identify than for providing needed capital to protect the Operating Partnership’s financial position. Our access to capital and our ability to execute large, complex transactions should be competitive advantages in 2010. However, should a double-dip recession materialize or credit/equity markets deteriorate, we may seek to take steps similar to what we did in 2008 and early 2009 to increase liquidity and better position ourselves.

     Our specific current expectations regarding our results for 2010 and certain items that will affect them are set

forth under Results of Operations below.

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

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

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

Results of Operations

     In conjunction with our business objectives and operating strategy, the Operating Partnership continued to invest or recycle its capital investment in apartment properties located in strategically targeted markets during the years ended December 31, 2009 and December 31, 2008. In summary, we:

     Year Ended December 31, 2009:

	§		Acquired $145.0 million of apartment properties consisting of two properties and 566 units (excluding the Operating Partnership’s buyout of its partner’s interest in one previously unconsolidated property) and a long-term leasehold interest in a land parcel for $11.5 million, all of which we deem to be in our strategic targeted markets; and
	§		Sold $1.0 billion of apartment properties consisting of 60 properties and 12,489 units (excluding the Operating Partnership’s buyout of its partner’s interest in one previously unconsolidated property), as well as 62 condominium units for $12.0 million, the majority of which was in exit or less desirable markets.

     Year Ended December 31, 2008:

	§		Acquired $380.7 million of apartment properties consisting of 7 properties and 2,141 units and an uncompleted development property for $31.7 million and invested $2.4 million to obtain the management contract rights and towards the redevelopment of a military housing project consisting of 978 units, all of which we deem to be in our strategic targeted markets; and
	§		Sold $896.7 million of apartment properties consisting of 41 properties and 10,127 units, as well as 130 condominium units for $26.1 million and a land parcel for $3.3 million, the majority of which was in exit or less desirable markets.

     The Operating Partnership’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 Operating Partnership believes that NOI is helpful to investors as a supplemental measure of the operating performance of a real estate company because it is a direct measure of the actual operating results of the Operating Partnership’s apartment communities.

     Properties that the Operating Partnership owned for all of both 2009 and 2008 (the “2009 Same Store Properties”), which represented 113,598 units, impacted the Operating Partnership’s results of operations. Properties that the Operating Partnership owned for all of both 2008 and 2007 (the “2008 Same Store Properties”), which represented 115,051 units, also impacted the Operating Partnership’s results of operations. Both the 2009 Same Store Properties and 2008 Same Store Properties are discussed in the following paragraphs.

     The Operating Partnership’s acquisition, disposition and completed development activities also impacted overall results of operations for the years ended December 31, 2009 and 2008. Dilution, as a result of the Operating

Partnership’s net asset sales, negatively impacts property net operating income. The impacts of these activities are discussed in greater detail in the following paragraphs.

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

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

	§		$57.6 million in lower net gains on sales of discontinued operations in 2009 vs. 2008;
	§		$84.0 million in lower property NOI in 2009 vs. 2008, primarily driven by $51.6 million in lower same store NOI and dilution from transaction activities, partially offset by higher NOI contributions from lease-up properties; and
	§		Partially offset by $105.3 million in lower impairment losses in 2009 vs. 2008.

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

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

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

		Results												Statistics
														Average
														Rental
Description		Revenues				Expenses				NOI				Rate (1)				Occupancy				Turnover
2009		$	1,725,774			$	644,294			$	1,081,480			$	1,352				93.8	%			61.0	%
2008		$	1,778,183			$	645,123			$	1,133,060			$	1,383				94.5	%			63.7	%
Change		$	(52,409	)		$	(829	)		$	(51,580	)		$	(31	)			(0.7	%)			(2.7	%)
Change			(2.9	%)			(0.1	%)			(4.6	%)			(2.2	%)

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

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

																		% of Actual
																		2009
		Actual				Actual				$				%				Operating
		2009				2008				Change				Change				Expenses
Real estate taxes		$	173,113			$	171,234			$	1,879				1.1	%			26.9	%
On-site payroll (1)			155,912				156,601				(689	)			(0.4	%)			24.2	%
Utilities (2)			100,184				99,045				1,139				1.1	%			15.5	%
Repairs and maintenance (3)			94,556				95,142				(586	)			(0.6	%)			14.7	%
Property management costs (4)			63,854				67,126				(3,272	)			(4.9	%)			9.9	%
Insurance			21,689				20,890				799				3.8	%			3.4	%
Leasing and advertising			15,664				15,043				621				4.1	%			2.4	%
Other operating expenses (5)			19,322				20,042				(720	)			(3.6	%)			3.0	%
Same store operating expenses		$	644,294			$	645,123			$	(829	)			(0.1	%)			100.0	%

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

		Year Ended December 31,
		2009				2008
		(Amounts in thousands)
Operating income		$	529,390			$	458,158
Adjustments:
Non-same store operating results			(77,481	)			(43,201	)
Fee and asset management revenue			(10,346	)			(10,715	)
Fee and asset management expense			7,519				7,981
Depreciation			582,280				559,468
General and administrative			38,994				44,951
Impairment			11,124				116,418
Same store NOI		$	1,081,480			$	1,133,060

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

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

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

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

	§		Development and other miscellaneous properties in lease-up of $22.4 million;
	§		Newly stabilized development and other miscellaneous properties of $1.6 million;
	§		Properties acquired in 2008 and 2009 of $11.9 million; and
	§		Partially offset by operating activities from other miscellaneous operations.

     See also Note 20 in the Notes to Consolidated Financial Statements for additional discussion regarding the

Operating Partnership’s segment disclosures.

     Fee and asset management revenues, net of fee and asset management expenses, increased approximately $0.1 million or 3.4% primarily due to an increase in revenue earned on management of the Operating Partnership’s military housing ventures at Fort Lewis and McChord Air Force Base, as well as a decrease in asset management expenses. As of December 31, 2009 and 2008, the Operating Partnership managed 12,681 units and 14,485 units, respectively, primarily for unconsolidated entities and its military housing ventures at Fort Lewis and McChord.

     Property management expenses from continuing operations include off-site expenses associated with the self-management of the Operating Partnership’s properties as well as management fees paid to any third party management companies. These expenses decreased approximately $5.1 million or 6.7%. This decrease is primarily attributable to lower overall payroll-related costs as a result of a decrease in the number of properties in the Operating Partnership’s portfolio, as well as decreases in temporary help/contractors, telecommunications and travel expenses.

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

     General and administrative expenses from continuing operations, which include corporate operating expenses, decreased approximately $6.0 million or 13.3% primarily due to lower overall payroll-related costs as a result of a decrease in the number of properties in the Operating Partnership’s portfolio, as well as a $2.9 million decrease in severance related costs in 2009 and a decrease in tax consulting costs. The Operating Partnership anticipates that general and administrative expenses will approximate $38.0 million to $40.0 million for the year ending December 31, 2010. The above assumption is based on current expectations and is forward-looking.

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

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

     Other expenses from continuing operations increased approximately $0.7 million or 12.6% primarily due to an increase in transaction costs incurred in conjunction with the Operating Partnership’s acquisition of two properties consisting of 566 units from unaffiliated parties, as well as expensing transaction costs associated with the Operating Partnership’s acquisition of all of its partners’ interests in five previously partially owned properties consisting of 1,587 units in 2009. This was partially offset by a decrease in pursuit cost write-offs as a result of the Operating Partnership’s decision to significantly reduce its development activities in 2009. The Operating Partnership anticipates that other expenses will approximate $9.0 million to $12.0 million for the year ending December 31, 2010. The above assumption is based on current expectations and is forward-looking.

     Interest expense from continuing operations, including amortization of deferred financing costs, increased approximately $17.3 million or 3.5% primarily as a result of an increase in debt extinguishment costs and lower capitalized interest. During the year ended December 31, 2009, the Operating Partnership capitalized interest costs of approximately $34.9 million as compared to $60.1 million for the year ended December 31, 2008. This capitalization of interest primarily relates to consolidated projects under development. The effective interest cost on all indebtedness for the year ended December 31, 2009 was 5.62% as compared to 5.56% for the year ended December 31, 2008. The Operating Partnership anticipates that interest expense will approximate $466.0 million to $476.0 million for the year ending December 31, 2010. The above assumption is based on current expectations and is forward-looking.

     Income and other tax expense from continuing operations decreased approximately $2.5 million or 46.9% primarily due to a change in the estimate for Texas state taxes and lower overall state income taxes, partially offset by an increase in business taxes for Washington, D.C. The Operating Partnership anticipates that income and other tax

expense will approximate $1.0 million to $2.0 million for the year ending December 31, 2010. The above assumption is based on current expectations and is forward-looking.

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

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

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

     Discontinued operations, net decreased approximately $95.9 million or 21.0% between the periods under comparison. This decrease is primarily due to lower gains from property sales during the year ended December 31, 2009 compared to the same period in 2008 and the operations of those properties. In addition, properties sold in 2009 reflect operations for a partial period in 2009 in contrast to a full period in 2008. See Note 13 in the Notes to Consolidated Financial Statements for further discussion.

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

     For the year ended December 31, 2008, loss from continuing operations increased approximately $34.5 million when compared to the year ended December 31, 2007. The decrease in continuing operations is discussed below.

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

2008 vs. 2007
Same Store Results/Statistics
$ in thousands (except for Average Rental Rate) – 115,051 Same Store Units

		Results												Statistics
														Average
														Rental
Description		Revenues				Expenses				NOI				Rate (1)				Occupancy				Turnover
2008		$	1,739,004			$	632,366			$	1,106,638			$	1,334				94.5	%			63.5	%
2007		$	1,685,196			$	618,882			$	1,066,314			$	1,292				94.6	%			63.6	%
Change		$	53,808			$	13,484			$	40,324			$	42				(0.1	%)			(0.1	%)
Change			3.2	%			2.2	%			3.8	%			3.3	%

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

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

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

     Property management expenses from continuing operations include off-site expenses associated with the self-

management of the Operating Partnership’s properties as well as management fees paid to any third party management companies. These expenses decreased approximately $10.4 million or 11.9%. This decrease is primarily attributable to lower overall payroll-related costs as a result of a decrease in the number of properties in the Operating Partnership’s portfolio, as well as a decrease in legal and professional fees.

     Depreciation expense from continuing operations, which includes depreciation on non-real estate assets, increased approximately $28.1 million or 5.4% primarily as a result of additional depreciation expense on properties acquired in 2007 and 2008 and capital expenditures for all properties owned.

     General and administrative expenses from continuing operations, which include corporate operating expenses, decreased approximately $1.8 million or 3.9% primarily as a result of a $2.2 million decrease in profit sharing expense and lower overall payroll-related costs, partially offset by an increase in legal and professional fees due to a $1.7 million expense recovery recorded for the year ended December 31, 2007 related to a certain lawsuit in Florida (see Note 21).

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

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

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

     Interest expense from continuing operations, including amortization of deferred financing costs, decreased approximately $0.1 million as a result of lower overall effective interest rates and a reduction in debt extinguishment costs, offset by higher overall debt levels outstanding due to the Company’s 2007 share repurchase activity and the Operating Partnership’s pre-funding of its 2008 and 2009 debt maturities. During the year ended December 31, 2008, the Operating Partnership capitalized interest costs of approximately $60.1 million as compared to $45.1 million for the year ended December 31, 2007. This capitalization of interest primarily relates to consolidated projects under development. The effective interest cost on all indebtedness for the year ended December 31, 2008 was 5.56% as compared to 5.96% for the year ended December 31, 2007.

     Income and other tax expense from continuing operations increased approximately $2.8 million primarily due to a change in the estimate for Texas state taxes and an increase in franchise taxes.

     Loss from investments in unconsolidated entities increased approximately $0.4 million between the periods under comparison. This increase is primarily due to income received in 2007 from the sale of the Operating Partnership’s 7.075% ownership interest in Wellsford Park Highlands Corporation, an entity which owns a condominium development in Denver, Colorado.

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

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

     Discontinued operations, net decreased approximately $576.5 million or 55.7% between the periods under comparison. This decrease is primarily due to a significant decrease in the number of properties sold during the year ended December 31, 2008 compared to the same period in 2007, as well as the mix of properties sold in each year. See Note 13 in the Notes to Consolidated Financial Statements for further discussion.

Liquidity and Capital Resources

For the Year Ended December 31, 2009

     As of January 1, 2009, the Operating Partnership had approximately $890.8 million of cash and cash equivalents and $1.29 billion available under its revolving credit facility (net of $130.0 million which was restricted/dedicated to support letters of credit and $75.0 million which had been committed by a now bankrupt financial institution and is not available for borrowing). After taking into effect the various transactions discussed in the following paragraphs and the net cash provided by operating activities, the Operating Partnership’s cash and cash equivalents balance at December 31, 2009 was approximately $193.3 million, its restricted 1031 exchange proceeds totaled $244.3 million and the amount available on the Operating Partnership’s revolving credit facility was $1.37 billion (net of $56.7 million which was restricted/dedicated to support letters of credit and net of the $75.0 million discussed above). In 2008, the Operating Partnership built a significant cash and cash equivalents balance as a direct result of its decision to pre-fund its 2008 and 2009 debt maturities with the closing of three secured mortgage loan pools totaling $1.6 billion. The decline in the Operating Partnership’s cash and cash equivalents balance since December 31, 2008 is a direct result of the application of the pre-funded cash on hand towards the Operating Partnership’s debt maturity, tender and repurchase activities, partially offset by the closing of a $500.0 million secured mortgage loan pool during 2009. See Notes 8 through 10 in the Notes to Consolidated Financial Statements for further discussion.

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

	§		Disposed of 61 properties (including the Operating Partnership’s buyout of its partner’s interest in one unconsolidated property) and 62 condominium units, receiving net proceeds of $893.6 million;
	§		Obtained $540.0 million in new mortgage financing and terminated six treasury locks, receiving $10.8 million;
	§		Obtained an additional $198.8 million of new mortgage loans on development properties;
	§		Received $215.8 million from maturing or sold investment securities; and
	§		Issued approximately 4.2 million Units and received net proceeds of $100.6 million.
			During the year ended December 31, 2009, the above proceeds were primarily utilized to:
	§		Invest $330.6 million primarily in development projects;
	§		Acquire three rental properties (including the Operating Partnership’s buyout of its partner’s interest in one unconsolidated property) and a long-term leasehold interest in a land parcel, utilizing cash of $175.5 million;
	§		Repurchase 47,450 OP Units, utilizing cash of $1.1 million (see Note 3);
	§		Repurchase $652.1 million of fixed rate public notes;
	§		Repay $122.2 million of fixed rate public notes at maturity;
	§		Repurchase $75.8 million of fixed rate tax-exempt notes;
	§		Repay $956.8 million of mortgage loans; and
	§		Acquire $77.8 million of investment securities.

     In September 2009, EQR announced the creation of an At-The-Market (“ATM”) share offering program which would allow EQR to sell up to 17.0 million Common Shares from time to time over the next three years 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 the Operating Partnership in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis). EQR may, but shall have no obligation to, sell Common Shares through the ATM share offering program in amounts and at times to be determined by EQR. Actual sales will depend on a variety of factors to be determined by EQR from time to time, including (among others) market conditions, the trading price of EQR’s Common Shares and determinations of the appropriate sources of funding for EQR. During the year ended December 31, 2009, EQR issued approximately 3.5 million Common Shares at an average price of $35.38 per share for total consideration of approximately $123.7 million through the ATM share offering program. In addition, during the first quarter of 2010 through February 19, 2010, EQR has issued approximately 1.1 million Common Shares at an average price of $33.87 per share for total consideration of approximately $35.8 million. Cumulative to date, EQR has issued approximately 4.6 million Common Shares at an average price of $35.03 per share for total consideration of approximately $159.5 million. As of February 19, 2010, EQR had 12.4 million Common Shares remaining available for issuance under the ATM program.

     Depending on its analysis of market prices, economic conditions, and other opportunities for the investment of available capital, EQR may repurchase its Common Shares pursuant to its existing share repurchase program authorized by the Board of Trustees. EQR repurchased $1.1 million (47,450 shares at an average price per share of $23.69) of its

Common Shares during the year ended December 31, 2009. Concurrent with these transactions, the Operating Partnership repurchased and retired 47,450 OP Units previously issued to EQR. As of December 31, 2009, EQR had authorization to repurchase an additional $466.5 million of its shares. See Note 3 in the Notes to Consolidated Financial Statements for further discussion.

     Depending on its analysis of prevailing market conditions, liquidity requirements, contractual restrictions and other factors, the Operating Partnership may from time to time seek to repurchase and retire its outstanding debt in open market or privately negotiated transactions.

     The Operating Partnership’s total debt summary and debt maturity schedules as of December 31, 2009 are as follows:

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

														Weighted
										Weighted				Average
										Average				Maturities
		Amounts (1)				% of Total				Rates (1)				(years)
Secured		$	4,783,446				50.9	%			4.89	%			8.9
Unsecured			4,609,124				49.1	%			5.31	%			4.9
Total		$	9,392,570				100.0	%			5.11	%			6.9
Fixed Rate Debt:
Secured – Conventional		$	3,773,008				40.2	%			5.89	%			7.6
Unsecured – Public/Private			3,771,700				40.1	%			5.93	%			5.4
Fixed Rate Debt			7,544,708				80.3	%			5.91	%			6.5
Floating Rate Debt:
Secured – Conventional			382,939				4.0	%			2.18	%			4.2
Secured – Tax Exempt			627,499				6.7	%			0.65	%			20.5
Unsecured – Public/Private			801,824				8.6	%			1.37	%			1.7
Unsecured – Tax Exempt			35,600				0.4	%			0.37	%			19.0
Unsecured – Revolving Credit Facility			—				—				—				2.2
Floating Rate Debt			1,847,862				19.7	%			1.28	%			8.7
Total		$	9,392,570				100.0	%			5.11	%			6.9

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

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

																		Weighted Average				Weighted Average
		Fixed				Floating												Rates on Fixed				Rates on
Year		Rate (1)				Rate (1)				Total				% of Total				Rate Debt (1)				Total Debt (1)
2010		$	34,123			$	568,310	(2)		$	602,433				6.4	%			7.61	%			1.36	%
2011			1,066,274	(3)			261,805				1,328,079				14.1	%			5.52	%			4.83	%
2012			739,469				3,362				742,831				7.9	%			5.48	%			5.48	%
2013			266,347				301,824				568,171				6.1	%			6.76	%			4.89	%
2014			517,443				—				517,443				5.5	%			5.28	%			5.28	%
2015			355,632				—				355,632				3.8	%			6.41	%			6.41	%
2016			1,089,236				39,999				1,129,235				12.0	%			5.32	%			5.25	%
2017			1,346,553				456				1,347,009				14.3	%			5.87	%			5.87	%
2018			336,086				44,677				380,763				4.1	%			5.95	%			5.57	%
2019			502,244				20,766				523,010				5.6	%			5.19	%			5.01	%
2020+			1,291,301				606,663				1,897,964				20.2	%			6.11	%			5.07	%
Total		$	7,544,708			$	1,847,862			$	9,392,570				100.0	%			5.85	%			5.03	%

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

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

														Unamortized
		Coupon				Due				Face				Premium/				Net
		Rate				Date				Amount				(Discount)				Balance
Fixed Rate Notes:
			6.950	%			03/02/11	(1)		$	93,096			$	990			$	94,086
			6.625	%			03/15/12	(2)			253,858				(412	)			253,446
			5.500	%			10/01/12	(3)			222,133				(602	)			221,531
			5.200	%			04/01/13	(4)			400,000				(385	)			399,615
			5.250	%			09/15/14				500,000				(289	)			499,711
			6.584	%			04/13/15				300,000				(590	)			299,410
			5.125	%			03/15/16				500,000				(332	)			499,668
			5.375	%			08/01/16				400,000				(1,221	)			398,779
			5.750	%			06/15/17				650,000				(3,815	)			646,185
			7.125	%			10/15/17				150,000				(505	)			149,495
			7.570	%			08/15/26				140,000				—				140,000
			3.850	%			08/15/26	(5)			482,545				(12,771	)			469,774
Fair Value Derivative Adjustments								(4)			(300,000	)			—				(300,000	)
											3,791,632				(19,932	)			3,771,700
Floating Rate Tax Exempt Notes:
		7-Day SIFMA					12/15/28	(6)			35,600				—				35,600
Floating Rate Notes:
							04/01/13	(4)			300,000				—				300,000
Fair Value Derivative Adjustments								(4)			1,824				—				1,824
Term Loan Facility		LIBOR+0.50%					10/05/10	(6) (7)			500,000				—				500,000
											801,824				—				801,824
Revolving Credit Facility:		LIBOR+0.50%					02/28/12	(8)			—				—				—
Total Unsecured Debt										$	4,629,056			$	(19,932	)		$	4,609,124

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

     As of February 25, 2010, an unlimited amount of debt securities remains available for issuance by the Operating Partnership under a registration statement that became automatically effective upon filing with the SEC in December 2008 (under SEC regulations enacted in 2005, the registration statement automatically expires on December

21, 2011 and does not contain a maximum issuance amount). As of February 25, 2010, an unlimited amount of equity securities remains available for issuance by EQR under a registration statement the SEC declared effective in December 2008 (under SEC regulations enacted in 2005, the registration statement automatically expires on December 15, 2011 and does not contain a maximum issuance amount). Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of the Operating Partnership 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).

     The Operating Partnership’s “Consolidated Debt-to-Total Market Capitalization Ratio” as of December 31, 2009 is presented in the following table. The Operating Partnership calculates the equity component of its market capitalization as the sum of (i) the total outstanding Units at the equivalent market value of the closing price of EQR’s Common Shares on the New York Stock Exchange; (ii) the “OP Unit Equivalent” of all convertible preference units; and (iii) the liquidation value of all perpetual preference units outstanding.

Capital Structure as of December 31, 2009
(Amounts in thousands except for unit and per unit amounts)

Secured Debt						$	4,783,446				50.9	%
Unsecured Debt							4,609,124				49.1	%
Total Debt							9,392,570				100.0	%			48.1	%
Units			294,157,017
OP Unit Equivalents (see below)			398,038
Total outstanding at quarter-end			294,555,055
EQR Common Share Price at December 31, 2009		$	33.78
							9,950,070				98.0	%
Perpetual Preference Units (see below)							200,000				2.0	%
Total Equity							10,150,070				100.0	%			51.9	%
Total Market Capitalization						$	19,542,640								100.0	%

Convertible Preference Units as of December 31, 2009
(Amounts in thousands except for unit and per unit amounts)

														Annual				Annual				Weighted
		Redemption				Outstanding				Liquidation				Dividend				Dividend				Average				Conversion				OP Unit
Series		Date				Units				Value				Per Unit				Amount				Rate				Ratio				Equivalents
Preference Units:
7.00% Series E			11/1/98				328,466			$	8,212			$	1.75			$	575								1.1128				365,517
7.00% Series H			6/30/98				22,459				561				1.75				39								1.4480				32,521
Total Convertible Preference Units							350,925			$	8,773							$	614				7.00	%							398,038

Perpetual Preference Units as of December 31, 2009
(Amounts in thousands except for unit and per unit amounts)

														Annual				Annual				Weighted
		Redemption				Outstanding				Liquidation				Dividend				Dividend				Average
Series		Date				Units				Value				Per Unit				Amount				Rate
Preference Units:
8.29% Series K			12/10/26				1,000,000			$	50,000			$	4.145			$	4,145
6.48% Series N			6/19/08				600,000				150,000				16.20				9,720
Total Perpetual Preference Units							1,600,000			$	200,000							$	13,865				6.93	%

     The Operating Partnership generally expects to meet its short-term liquidity requirements, including capital expenditures related to maintaining its existing properties and certain scheduled unsecured note and mortgage note repayments, through its working capital, net cash provided by operating activities and borrowings under its revolving

credit facility. Under normal operating conditions, the Operating Partnership considers its cash provided by operating activities to be adequate to meet operating requirements and payments of distributions. However, there may be times when the Operating Partnership experiences shortfalls in its coverage of distributions, which may cause the Operating Partnership to consider reducing its distributions and/or using the proceeds from property dispositions or additional financing transactions to make up the difference. Should these shortfalls occur for lengthy periods of time or be material in nature, the Operating Partnership’s financial condition may be adversely affected and it may not be able to maintain its current distribution levels. The Operating Partnership reduced its quarterly OP Unit dividend beginning with the dividend for the third quarter of 2009, from $0.4825 per Unit (an annual rate of $1.93 per Unit) to $0.3375 per Unit (an annual rate of $1.35 per Unit). The Operating Partnership believes that its expected 2010 operating cash flow is sufficient to cover capital expenditures and distributions.

     The Operating Partnership also expects to meet its long-term liquidity requirements, such as scheduled unsecured note and mortgage debt maturities, property acquisitions, financing of construction and development activities and capital improvements through the issuance of secured and unsecured debt and equity securities, including additional OP Units, and proceeds received from the disposition of certain properties as well as joint ventures. In addition, the Operating Partnership has significant unencumbered properties available to secure additional mortgage borrowings in the event that the public capital markets are unavailable or the cost of alternative sources of capital is too high. The fair value of and cash flow from these unencumbered properties are in excess of the requirements the Operating Partnership must maintain in order to comply with covenants under its unsecured notes and line of credit. Of the $18.5 billion in investment in real estate on the Operating Partnership’s balance sheet at December 31, 2009, $11.2 billion or 60.9%, was unencumbered. However, there can be no assurances that these sources of capital will be available to the Operating Partnership in the future on acceptable terms or otherwise.

     As of the date of this filing, the Operating Partnership’s senior debt credit ratings from Standard & Poors (“S&P”), Moody’s and Fitch are BBB+, Baal and A-, respectively. As of the date of this filing, EQR’s preferred equity ratings from S&P, Moody’s and Fitch are BBB-, Baa2 and BBB, respectively. During the third quarter of 2009, Moody’s and Fitch placed both EQR and the Operating Partnership on negative outlook.

     The Operating Partnership has a $1.5 billion long-term revolving credit facility with available borrowings as of February 19, 2010 of $1.36 billion (net of $65.2 million which was restricted/dedicated to support letters of credit and net of a $75.0 million commitment from a now bankrupt financial institution) that matures in February 2012 (See Note 10 in the Notes to Consolidated Financial Statements for further discussion). This facility may, among other potential uses, be used to fund property acquisitions, costs for certain properties under development and short-term liquidity requirements. As of February 19, 2010, $180.0 million was outstanding under this facility. The Operating Partnership expects to repay essentially all of the outstanding balance under the line as dispositions close and restricted 1031 proceeds are released from escrow.

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

     Capitalization of Fixed Assets and Improvements to Real Estate

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

§

Replacements (inside the unit). These include:

	§		flooring such as carpets, hardwood, vinyl, linoleum or tile;
	§		appliances;
	§		mechanical equipment such as individual furnace/air units, hot water heaters, etc;
	§		furniture and fixtures such as kitchen/bath cabinets, light fixtures, ceiling fans, sinks, tubs, toilets, mirrors, countertops, etc; and
	§		blinds/shades.

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

§

Building improvements (outside the unit). These include:

§

roof replacement and major repairs;

	§		paving or major resurfacing of parking lots, curbs and sidewalks;
	§		amenities and common areas such as pools, exterior sports and playground equipment, lobbies, clubhouses, laundry rooms, alarm and security systems and offices;
	§		major building mechanical equipment systems;
	§		interior and exterior structural repair and exterior painting and siding;
	§		major landscaping and grounds improvement; and
	§		vehicles and office and maintenance equipment.

     All building improvements are depreciated over a five to ten-year estimated useful life. We capitalize building improvements and upgrades only if the item: (i) exceeds $2,500 (selected projects must exceed $10,000); (ii) extends the useful life of the asset; and (iii) improves the value of the asset.

     For the year ended December 31, 2009, our actual improvements to real estate totaled approximately $123.9 million. This includes the following (amounts in thousands except for unit and per unit amounts):

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

		Total								Avg.				Building				Avg.								Avg.
		Units (1)				Replacements (2)				Per Unit				Improvements				Per Unit				Total				Per Unit
Same Store Properties (3)			113,598			$	69,808			$	614			$	44,611			$	393			$	114,419			$	1,007
Non-Same Store Properties (4)			10,728				2,361				240				3,675				374				6,036				614
Other (5)			—				2,130								1,352								3,482
Total			124,326			$	74,299							$	49,638							$	123,937

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

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

		Total								Avg.				Building				Avg.								Avg.
		Units (1)				Replacements				Per Unit				Improvements				Per Unit				Total				Per Unit
Established Properties (2)			105,607			$	38,003			$	360			$	53,195			$	504			$	91,198			$	864
New Acquisition Properties (3)			20,665				5,409				285				18,243				961				23,652				1,246
Other (4)			6,487				43,497								11,491								54,988
Total			132,759			$	86,909							$	82,929							$	169,838

     The Operating Partnership incurred less in capital expenditures in 2009 primarily due to continued efforts to limit the scope of projects and greater cost controls on vendors. For 2010, the Operating Partnership estimates that it will spend approximately $1,075 per unit of capital expenditures for its same store properties inclusive of unit renovation/rehab costs, or $825 per unit excluding unit renovation/rehab costs. The above assumptions are based on current expectations and are forward-looking.

     During the year ended December 31, 2009, the Operating Partnership’s total non-real estate capital additions, such as computer software, computer equipment, and furniture and fixtures and leasehold improvements to the Operating Partnership’s property management offices and its corporate offices, were approximately $2.0 million. The Operating Partnership expects to fund approximately $1.6 million in total additions to non-real estate property in 2010. The above assumption is based on current expectations and is forward-looking.

     Improvements to real estate and additions to non-real estate property are generally funded from net cash provided by operating activities and from investment cash flow.

     Derivative Instruments

     In the normal course of business, the Operating Partnership is exposed to the effect of interest rate changes. The Operating Partnership seeks to limit these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments.

     The Operating Partnership 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 Operating Partnership has not sustained a material loss from these instruments nor does it anticipate any material adverse effect on its net income or financial position in the future from the use of derivatives it currently has in place.

     See Note 11 in the Notes to Consolidated Financial Statements for additional discussion of derivative instruments at December 31, 2009.

     Other

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

Off-Balance Sheet Arrangements and Contractual Obligations

     The Operating Partnership has co-invested in various properties that are unconsolidated and accounted for under the equity method of accounting. Management does not believe these investments have a materially different impact upon the Operating Partnership’s liquidity, cash flows, capital resources, credit or market risk than its property management and ownership activities. During 2000 and 2001, the Operating Partnership entered into institutional ventures with an unaffiliated partner. At the respective closing dates, the Operating Partnership sold and/or contributed 45 properties containing 10,846 units to these ventures and retained a 25% ownership interest in the ventures. The Operating Partnership’s joint venture partner contributed cash equal to 75% of the agreed-upon equity value of the properties comprising the ventures, which was then distributed to the Operating Partnership. The Operating Partnership’s strategy with respect to these ventures was to reduce its concentration of properties in a variety of markets. The Operating Partnership sold seven properties consisting of 1,684 units (including one property containing 250 units which was acquired by the Operating Partnership), three properties consisting of 670 units and one property consisting of 400 units during the years ended December 31, 2009, 2008 and 2007, respectively. The Operating Partnership and its joint venture partner currently intend to wind up these investments over the next few years by selling the related assets, which may involve refinancing the assets as a majority of the debt encumbering them matures in 2010 and early 2011. The Operating Partnership cannot estimate what, if any, profit it will receive from these dispositions or if the Operating Partnership will in fact receive its equity back.

     As of December 31, 2009, the Operating Partnership has four projects totaling 1,700 units in various stages of development with estimated completion dates ranging through June 30, 2011. The development agreements currently in place are discussed in detail in Note 18 of the Operating Partnership’s Consolidated Financial Statements.

     See also Notes 2 and 6 in the Notes to Consolidated Financial Statements for additional discussion regarding

the Operating Partnership’s investments in partially owned entities.

     The following table summarizes the Operating Partnership’s contractual obligations for the next five years and thereafter as of December 31, 2009:

Payments Due by Year (in thousands)
Contractual Obligations		2010				2011				2012				2013				2014				Thereafter				Total
Debt:
Principal (a)		$	602,433			$	1,328,079			$	742,831			$	568,171			$	517,443			$	5,633,613			$	9,392,570
Interest (b)			473,872				434,333				381,128				342,044				321,272				1,398,538				3,351,187
Operating Leases:
Minimum Rent Payments (c)			6,520				4,661				2,468				2,194				1,824				306,365				324,032
Other Long-Term Liabilities:
Deferred Compensation (d)			1,457				2,070				2,070				1,472				1,664				9,841				18,574
Total		$	1,084,282			$	1,769,143			$	1,128,497			$	913,881			$	842,203			$	7,348,357			$	13,086,363

Critical Accounting Policies and Estimates

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to use judgment in the application of accounting policies, including making estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different or different assumptions were made, it is possible that different accounting policies would have been applied, resulting in different financial results or different presentation of our financial statements.

     The Operating Partnership’s significant accounting policies are described in Note 2 in the Notes to Consolidated Financial Statements. These policies were followed in preparing the consolidated financial statements at and for the year ended December 31, 2009 and are consistent with the year ended December 31, 2008, except with respect to noncontrolling interests and convertible debt as further described in Note 2.

     The Operating Partnership has identified five significant accounting policies as critical accounting policies. These critical accounting policies are those that have the most impact on the reporting of our financial condition and those requiring significant judgments and estimates. With respect to these critical accounting policies, management believes that the application of judgments and estimates is consistently applied and produces financial information that fairly presents the results of operations for all periods presented. The five critical accounting policies are:

     Acquisition of Investment Properties

     The Operating Partnership allocates the purchase price of properties to net tangible and identified intangible assets acquired based on their fair values. In making estimates of fair values for purposes of allocating purchase price, the Operating Partnership 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 Operating Partnership also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired.

     Impairment of Long-Lived Assets

     The Operating Partnership periodically evaluates its long-lived assets, including its investments in real estate, for indicators of permanent impairment. The judgments regarding the existence of impairment indicators are based on

factors such as operational performance, market conditions and legal and environmental concerns, as well as the Operating Partnership’s ability to hold and its intent with regard to each asset. Future events could occur which would cause the Operating Partnership to conclude that impairment indicators exist and an impairment loss is warranted.

     Depreciation of Investment in Real Estate

     The Operating Partnership depreciates the building component of its investment in real estate over a 30-year estimated useful life, building improvements over a 5-year to 10-year estimated useful life and both the furniture, fixtures and equipment and replacements components over a 5-year estimated useful life, all of which are judgmental determinations.

     Cost Capitalization

     See the Capitalization of Fixed Assets and Improvements to Real Estate section for a discussion of the Operating Partnership’s policy with respect to capitalization vs. expensing of fixed asset/repair and maintenance costs. In addition, the Operating Partnership capitalizes the payroll and associated costs of employees directly responsible for and who spend all of their time on the supervision of major capital and/or renovation projects. These costs are reflected on the balance sheet as an increase to depreciable property.

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

     Fair Value of Financial Instruments, Including Derivative Instruments

     The valuation of financial instruments requires the Operating Partnership to make estimates and judgments that affect the fair value of the instruments. The Operating Partnership, 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 Operating Partnership bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.

Funds From Operations

     For the year ended December 31, 2009, Funds From Operations (“FFO”) available to Units decreased $2.9 million, or 0.5%, as compared to the year ended December 31, 2008. For the year ended December 31, 2008, FFO available to Units decreased $95.0 million, or 13.3%, as compared to the year ended December 31, 2007.

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

Funds From Operations
(Amounts in thousands)

		Year Ended December 31,
		2009 (3)				2008 (3)				2007 (3)				2006 (3)				2005
Net income		$	382,029			$	436,413			$	1,047,356			$	1,147,617			$	931,246
Adjustments:
Net loss (income) attributable to Noncontrolling Interests — Partially Owned Properties			558				(2,650	)			(2,200	)			(3,132	)			801
Depreciation			576,156				553,352				525,234				445,995				330,698
Depreciation — Non-real estate additions			(7,355	)			(8,269	)			(8,279	)			(7,840	)			(5,541	)
Depreciation — Partially Owned and Unconsolidated Properties			759				4,157				4,379				4,338				2,487
Net (gain) on sales of unconsolidated entities			(10,689	)			(2,876	)			(2,629	)			(370	)			(1,330	)
Discontinued operations:
Depreciation			24,219				49,556				91,180				146,522				198,049
Net (gain) on sales of discontinued operations			(335,299	)			(392,857	)			(933,013	)			(1,025,803	)			(706,405	)
Net incremental (loss) gain on sales of condominium units			(385	)			(3,932	)			20,771				48,961				100,361
FFO (1) (2)			629,993				632,894				742,799				756,288				850,366
Preferred distributions			(14,488	)			(14,522	)			(23,233	)			(39,115	)			(57,248	)
Premium on redemption of preference units/interests			—				—				(6,154	)			(4,649	)			(8,493	)
FFO available to Units (1) (2)		$	615,505			$	618,372			$	713,412			$	712,524			$	784,625

Item 8. Financial Statements and Supplementary Data

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

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

ERP OPERATING LIMITED PARTNERSHIP

		PAGE
FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2009 and 2008		F-3
Consolidated Statements of Operations for the years ended December 31, 2009, 2008 and 2007		F-4 to F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007		F-6 to F-8
Consolidated Statements of Changes in Capital for the years ended December 31, 2009, 2008 and 2007		F-9 to F-10
Notes to Consolidated Financial Statements		F-11 to F-47
SCHEDULE FILED AS PART OF THIS REPORT
Schedule III — Real Estate and Accumulated Depreciation		S-1 to S-11

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners
ERP Operating Limited Partnership

We have audited the accompanying consolidated balance sheets of ERP Operating Limited Partnership (the “Operating Partnership”) as of December 31, 2009 and 2008 and the related consolidated statements of operations, changes in capital and cash flows for each of the three years in the period ended December 31, 2009. Our audits also included the financial statement schedule listed in the accompanying index to the consolidated financial statements and schedule. These financial statements and schedule are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of ERP Operating Limited Partnership at December 31, 2009 and 2008 and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2009, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, ERP Operating Limited Partnership changed its method of accounting for convertible debt instruments and noncontrolling interests upon the adoption of new accounting pronouncements, effective January 1, 2009 and applied retrospectively.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), ERP Operating Limited Partnership’s internal control over financial reporting as of December 31, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2010 (not provided herein) expressed an unqualified opinion thereon.

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

F-2

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

		December 31,				December 31,
		2009				2008
ASSETS
Investment in real estate
Land		$	3,650,324			$	3,671,299
Depreciable property			13,893,521				13,908,594
Projects under development			668,979				855,473
Land held for development			252,320				254,873
Investment in real estate			18,465,144				18,690,239
Accumulated depreciation			(3,877,564	)			(3,561,300	)
Investment in real estate, net			14,587,580				15,128,939
Cash and cash equivalents			193,288				890,794
Investments in unconsolidated entities			6,995				5,795
Deposits — restricted			352,008				152,732
Escrow deposits — mortgage			17,292				19,729
Deferred financing costs, net			46,396				53,817
Other assets			213,956				283,304
Total assets		$	15,417,515			$	16,535,110
LIABILITIES AND CAPITAL
Liabilities:
Mortgage notes payable		$	4,783,446			$	5,036,930
Notes, net			4,609,124				5,447,012
Lines of credit			—				—
Accounts payable and accrued expenses			58,537				108,463
Accrued interest payable			101,849				113,846
Other liabilities			272,236				289,562
Security deposits			59,264				64,355
Distributions payable			100,266				141,843
Total liabilities			9,984,722				11,202,011
Commitments and contingencies
Redeemable Limited Partners			258,280				264,394
Capital:
Partners’ capital:
Preference Units			208,773				208,786
Preference Interests and Junior Preference Units			—				184
General Partner			4,833,885				4,732,369
Limited Partners			116,120				137,645
Accumulated other comprehensive income (loss)			4,681				(35,799	)
Total partners’ capital			5,163,459				5,043,185
Noncontrolling Interests — Partially Owned Properties			11,054				25,520
Total capital			5,174,513				5,068,705
Total liabilities and capital		$	15,417,515			$	16,535,110