EQUITY RESIDENTIAL (EQR)

Interest expense, including amortization of deferred financing costs, increased approximately $16.1 million primarily as a result of higher overall debt balances as well as higher variable interest rates.  During the quarter ended September 30, 2005, the Company capitalized interest costs of approximately $3.3 million as compared to $3.4 million for the quarter ended September 30, 2004.  This capitalization of interest related specifically to our consolidated projects under development.  The effective interest cost on all indebtedness for the quarter ended September 30, 2005 was 6.28% as compared to 5.69% for the quarter ended September 30, 2004.

Loss from investments in unconsolidated entities increased approximately $0.6 million between the periods under comparison.  This increase is primarily the result of increased equity losses at selected unconsolidated properties for the third quarter of 2005 as compared to the third quarter of 2004.

Net gain on sales of discontinued operations increased approximately $195.8 million between the periods under comparison.  This increase is primarily the result of higher per unit sales prices and lower real estate net book values for properties sold during the quarter ended September 30, 2005 as compared to the same period in 2004.

Discontinued operations, net, decreased approximately $3.9 million between the periods under comparison.  The decrease in revenues and expenses between periods results from the timing, size and number of properties sold.  Any property sold after September 30, 2004 will include a full quarter’s results in the third quarter of 2004 but minimal to no results in the third quarter of 2005.  See Note 13 in the Notes to Consolidated Financial Statements for further discussion.

Interest expense, including amortization of deferred financing costs, increased approximately $11.7 million primarily as a result of higher overall debt balances as well as higher variable interest rates.  During the quarter ended June 30, 2005, the Company capitalized interest costs of approximately $2.9 million as compared to $4.2 million for the quarter ended June 30, 2004.  This capitalization of interest related specifically to our consolidated projects under development.  The effective interest cost on all indebtedness for the quarter ended June 30, 2005 was 6.20% as compared to 5.80% for the quarter ended June 30, 2004.

Loss from investments in unconsolidated entities decreased approximately $0.2 million between the periods under comparison.  This decrease is primarily the result of improved operations at the respective unconsolidated properties.

Net gain on sales of discontinued operations increased approximately $30.8 million between the periods under comparison.  This increase is primarily the result of higher per unit sales prices and lower real estate net book values for properties sold during the quarter ended June 30, 2005 as compared to the same period in 2004.

Discontinued operations, net, decreased approximately $7.0 million between the periods under comparison.  The decrease in revenues and expenses between periods results from the timing, size and number of properties sold.  Any property sold after June 30, 2004 will include a full quarter’s results in the second quarter of 2004 but minimal to no results in the second quarter of 2005.  See Note 13 in the Notes to Consolidated Financial Statements for further discussion.