EX-12 2 eqr-ex12_13.htm EX-12

Exhibit 12

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

Computation of Ratio of Earnings to Combined Fixed Charges

($ in thousands)

|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |  |  | 2014 |  |  | 2013 |
Income (loss) from continuing operations |  | $ | 628,381 |  |  | $ | 4,479,586 |  |  | $ | 907,621 |  |  | $ | 657,101 |  |  | $ | (168,174 | )
Interest expense incurred, net |  |  | 383,890 |  |  |  | 482,246 |  |  |  | 444,487 |  |  |  | 457,460 |  |  |  | 587,141 |
Amortization of deferred financing costs |  |  | 8,526 |  |  |  | 12,633 |  |  |  | 10,801 |  |  |  | 11,088 |  |  |  | 22,197 |
Earnings before combined fixed charges and preferred distributions |  |  | 1,020,797 |  |  |  | 4,974,465 |  |  |  | 1,362,909 |  |  |  | 1,125,649 |  |  |  | 441,164 |
Preferred Share/Preference Unit distributions |  |  | (3,091 | ) |  |  | (3,091 | ) |  |  | (3,357 | ) |  |  | (4,145 | ) |  |  | (4,145 | )
Premium on redemption of Preferred Shares/Preference Units |  |  | — |  |  |  | — |  |  |  | (3,486 | ) |  |  | — |  |  |  | — |
Earnings before combined fixed charges |  | $ | 1,017,706 |  |  | $ | 4,971,374 |  |  | $ | 1,356,066 |  |  | $ | 1,121,504 |  |  | $ | 437,019 |
Interest expense incurred, net |  | $ | 383,890 |  |  | $ | 482,246 |  |  | $ | 444,487 |  |  | $ | 457,460 |  |  | $ | 587,141 |
Amortization of deferred financing costs |  |  | 8,526 |  |  |  | 12,633 |  |  |  | 10,801 |  |  |  | 11,088 |  |  |  | 22,197 |
Interest capitalized for real estate and unconsolidated entities under development |  |  | 26,290 |  |  |  | 51,451 |  |  |  | 59,885 |  |  |  | 52,782 |  |  |  | 47,321 |
Amortization of deferred financing costs for real estate under development |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 152 |
Total combined fixed charges |  |  | 418,706 |  |  |  | 546,330 |  |  |  | 515,173 |  |  |  | 521,330 |  |  |  | 656,811 |
Preferred Share/Preference Unit distributions |  |  | 3,091 |  |  |  | 3,091 |  |  |  | 3,357 |  |  |  | 4,145 |  |  |  | 4,145 |
Premium on redemption of Preferred Shares/Preference Units |  |  | — |  |  |  | — |  |  |  | 3,486 |  |  |  | — |  |  |  | — |
Total combined fixed charges and preferred distributions |  | $ | 421,797 |  |  | $ | 549,421 |  |  | $ | 522,016 |  |  | $ | 525,475 |  |  | $ | 660,956 |
Ratio of earnings before combined fixed charges to total combined fixed charges (1) (2) |  |  | 2.43 |  |  |  | 9.10 |  |  |  | 2.63 |  |  |  | 2.15 |  |  |  | — |
Ratio of earnings before combined fixed charges and preferred distributions to total combined fixed charges and preferred distributions (1) (2) |  |  | 2.42 |  |  |  | 9.05 |  |  |  | 2.61 |  |  |  | 2.14 |  |  |  | — |

Note: The Company was in compliance with its unsecured public debt covenants for all periods presented.

(1) | For the years ended December 31, 2017, 2016, 2015 and 2014, 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 accounting standard effective January 1, 2014.

(2) | For the year ended December 31, 2013, the coverage deficiency approximated $219.8 million. The 2013 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 premiums on the redemption of Preferred Shares/Preference Units.