EX-12 3 eqr-exhibit12x2q16.htm EX-12
Exhibit 12

| EQUITY RESIDENTIAL ERP OPERATING LIMITED PARTNERSHIP Computation of Ratio of Earnings to Combined Fixed Charges ($ in thousands)
|  | Six Months Ended June 30, |  | Year Ended December 31,
|  | 2016 |  | 2015 |  | 2015 |  | 2014 |  | 2013 |  | 2012 |  | 2011
| Income (loss) from continuing operations | $ | 3,960,353 |  |  | $ | 488,573 |  |  | $ | 907,621 |  |  | $ | 657,101 |  |  | $ | (168,174 | ) |  | $ | 160,298 |  |  | $ | (72,941 | )
| Interest expense incurred, net | 299,964 |  |  | 219,648 |  |  | 444,069 |  |  | 457,191 |  |  | 586,854 |  |  | 455,236 |  |  | 460,172 |
| Amortization of deferred financing costs | 7,739 |  |  | 5,127 |  |  | 10,801 |  |  | 11,088 |  |  | 22,197 |  |  | 21,295 |  |  | 16,616 |
| Earnings before combined fixed charges and preferred distributions | 4,268,056 |  |  | 713,348 |  |  | 1,362,491 |  |  | 1,125,380 |  |  | 440,877 |  |  | 636,829 |  |  | 403,847 |
| Preferred Share/Preference Unit distributions | (1,545 | ) |  | (1,724 | ) |  | (3,357 | ) |  | (4,145 | ) |  | (4,145 | ) |  | (10,355 | ) |  | (13,865 | )
| Premium on redemption of Preferred Shares/Preference Units | — |  |  | (2,789 | ) |  | (3,486 | ) |  | — |  |  | — |  |  | (5,152 | ) |  | — |
| Earnings before combined fixed charges | $ | 4,266,511 |  |  | $ | 708,835 |  |  | $ | 1,355,648 |  |  | $ | 1,121,235 |  |  | $ | 436,732 |  |  | $ | 621,322 |  |  | $ | 389,982 |
| Interest expense incurred, net | $ | 299,964 |  |  | $ | 219,648 |  |  | $ | 444,069 |  |  | $ | 457,191 |  |  | $ | 586,854 |  |  | $ | 455,236 |  |  | $ | 460,172 |
| Amortization of deferred financing costs | 7,739 |  |  | 5,127 |  |  | 10,801 |  |  | 11,088 |  |  | 22,197 |  |  | 21,295 |  |  | 16,616 |
| Interest capitalized for real estate and unconsolidated entities under development | 28,386 |  |  | 30,432 |  |  | 59,885 |  |  | 52,782 |  |  | 47,321 |  |  | 22,509 |  |  | 9,108 |
| Amortization of deferred financing costs for real estate under development | — |  |  | — |  |  | — |  |  | — |  |  | 152 |  |  | — |  |  | — |
| Total combined fixed charges | 336,089 |  |  | 255,207 |  |  | 514,755 |  |  | 521,061 |  |  | 656,524 |  |  | 499,040 |  |  | 485,896 |
| Preferred Share/Preference Unit distributions | 1,545 |  |  | 1,724 |  |  | 3,357 |  |  | 4,145 |  |  | 4,145 |  |  | 10,355 |  |  | 13,865 |
| Premium on redemption of Preferred Shares/Preference Units | — |  |  | 2,789 |  |  | 3,486 |  |  | — |  |  | — |  |  | 5,152 |  |  | — |
| Total combined fixed charges and preferred distributions | $ | 337,634 |  |  | $ | 259,720 |  |  | $ | 521,598 |  |  | $ | 525,206 |  |  | $ | 660,669 |  |  | $ | 514,547 |  |  | $ | 499,761 |
| Ratio of earnings before combined fixed charges to total combined fixed charges (1) (2) | 12.69 |  |  | 2.78 |  |  | 2.63 |  |  | 2.15 |  |  | — |  |  | 1.25 |  |  | — |
| Ratio of earnings before combined fixed charges and preferred distributions to total combined fixed charges and preferred distributions (1) (2) | 12.64 |  |  | 2.75 |  |  | 2.61 |  |  | 2.14 |  |  | — |  |  | 1.24 |  |  | — |

(1) For the years ended December 31, 2015 and 2014 and the six months ended June 30, 2016 and 2015, the ratios have been increased primarily due to gains on the sales of real estate properties that were not included in discontinued operations as a result of the Company's adoption of the new accounting standard effective January 1, 2014. See Note 11 in the Notes to Consolidated Financial Statements for additional discussion.
(2) For the years ended December 31, 2013 and 2011, the coverage deficiencies approximated $219.8 million and $95.9 million, respectively. All 2013 and prior year ratios have been reduced due to the disposition of properties which resulted in the inclusion of those properties in discontinued operations. The ratios have been further reduced due to non-cash depreciation expense and impairment charges and premiums on the redemption of Preferred Shares/Preference Units. The Company was in compliance with its unsecured public debt covenants for all periods presented.