EQUITY RESIDENTIAL (EQR)

As previously noted, the Company adopted EITF Issue No. 04-05, as required for existing limited partnership arrangements, effective January 1, 2006. The adoption required the consolidation of the Lexford syndicated portfolio consisting of 20 separate partnerships (10 properties) containing 1,272 units. The Company recorded $24.6 million in investment in real estate and the following:

·                  Consolidated $22.5 million in mortgage debt;

·                  Reduced investments in unconsolidated entities by $2.6 million;

·                  Consolidated $0.9 million of other liabilities net of other assets acquired; and

·                  Consolidated $1.4 million of cash.

During the six months ended June 30, 2005, the Company acquired additional ownership interests in eleven Partially Owned Properties, all of which remain partially owned.  The acquisition was funded using $18.2 million in cash and through the issuance of 544,732 OP Units valued at $18.2 million, with $35.3 million recorded as additional building basis and $1.1 million recorded as a reduction of Minority Interests – Partially Owned Properties.  The Company also acquired the majority of the remaining third party equity interests it did not previously own in two properties, consisting of 120 units. The properties were previously accounted for under the equity method of accounting and subsequent to the purchase were consolidated.

During the six months ended June 30, 2005, the Company disposed of the following to unaffiliated parties (including two land parcels and various individual condominium units) (sales price in thousands):

The Company recognized a net gain on sales of discontinued operations of approximately $259.8 million on the above sales.

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