EQUITY RESIDENTIAL (EQR)

First Quarter and Full Year 2008 Earnings Guidance

The company has established an FFO guidance range of $0.56 to $0.60 per share for the first quarter of 2008. The difference between the company’s actual fourth quarter 2007 FFO of $0.67 per share to the midpoint of the first quarter 2008 FFO guidance range is primarily a result of the following items:

• Lower first quarter same-store NOI of approximately $7.0 million. While revenues are expected to modestly increase sequentially, operating expenses, primarily utilities, will be higher consistent with the seasonality of the company’s business;
• Dilution of approximately $2.0 million resulting from property transactions in the first quarter of 2008;
• Lower interest expense of approximately $5.0 million in the first quarter of 2008 due to lower rates;
• Lower condominium income and interest income from 1031 accounts of approximately $4.0 million; and
• The insurance recoveries and reserve adjustments, insurance settlement and income tax refunds, which are all described above, as well as other items listed on page 27 of this release, which are all non-comparable items recorded in the fourth quarter of 2007.

The company has established an FFO guidance range for full year 2008 of $2.45 to $2.60 per share. The assumptions used to determine this guidance range are listed on page 28 of this release.

The difference between the company’s actual 2007 FFO of $2.39 per share and the midpoint of the company’s 2008 FFO guidance range is attributable to the following factors:

• Higher same-store NOI of approximately $30.0 to $50.0 million;
• The positive impact of the lease up of development and former condominium properties of approximately $25.0 to $30.0 million;
• Lower interest expense of approximately $10.0 million;
• Lower preferred share distributions of approximately $9.0 million;
• The reduced number of shares outstanding due to the company’s share repurchase activity in 2007;
• Non-comparable items that had an approximately $17.0 million positive effect in 2007;
• Dilution from property sale and purchase activity of approximately $30.0 million;
• Lower income from condominium activity of approximately $7.0 million; and
• Lower interest income from 1031 accounts and other items amounting to approximately $12.0 million.

Please note that the reduced share count benefit of approximately $0.10 per share that the company anticipates for 2008 is entirely offset by increased interest expense (i.e. interest expense would have been approximately $40.0 million lower instead of approximately $10.0 million lower in 2008 if not for share buybacks in 2007.