EQUITY RESIDENTIAL (EQR)

Interest and other income from continuing operations increased $1.9 million primarily as a result of interest earned on 1031 exchange and earnest money deposits and other short term investments.

Interest expense from continuing operations, including amortization of deferred financing costs, increased approximately $20.8 million primarily as a result of higher overall debt levels outstanding due to the Company’s share repurchase activity as well as the timing of acquisitions and dispositions, partially offset by lower overall effective interest rates.  During the quarter ended June 30, 2007, the Company capitalized interest costs related to development activity of approximately $10.0 million as compared to $3.8 million for the quarter ended June 30, 2006.  The effective interest cost on all indebtedness for the quarter ended June 30, 2007 was 6.10% as compared to 6.14% for the quarter ended June 30, 2006.

Loss from investments in unconsolidated entities was consistent between the periods under comparison.

Net gain on sales of unconsolidated entities was consistent between the periods under comparison.

Net gain on sales of land parcels increased $4.3 million primarily as a result of the sale of one vacant land parcel during the quarter ended June 30, 2007.

Discontinued operations, net of minority interests, increased approximately $121.9 million between the periods under comparison.  This increase is primarily due to an increase in the number of properties sold and the mix of those properties sold during the quarter ended June 30, 2007 as compared to the quarter ended June 30, 2006. See Note 13 in the Notes to Consolidated Financial Statements for further discussion.