
8.	Debt

EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. EQR guarantees the Operating Partnership’s revolving credit facility up to the maximum amount and for the full term of the facility.

Mortgage Notes Payable

As of December 31, 2015, the Company had outstanding mortgage debt of approximately $4.7 billion.

During the year ended December 31, 2015, the Company repaid $368.5 million of mortgage loans.

The Company recorded $0.6 million of write-offs of unamortized deferred financing costs during the year ended December 31, 2015 as additional interest expense related to debt extinguishment of mortgages. The Company also recorded $1.4 million of write-offs of net unamortized premiums during the year ended December 31, 2015 as a reduction of interest expense related to debt extinguishment of mortgages.

As of December 31, 2015, the Company had $668.8 million of secured debt subject to third party credit enhancement.

As of December 31, 2015, scheduled maturities for the Company’s outstanding mortgage indebtedness were at various dates through May 1, 2061. At December 31, 2015, the interest rate range on the Company’s mortgage debt was 0.01% to 7.25%. During the year ended December 31, 2015, the weighted average interest rate on the Company’s mortgage debt was 4.23%.

The historical cost, net of accumulated depreciation, of encumbered properties was $6.0 billion and $6.9 billion at December 31, 2015 and 2014, respectively.

As of December 31, 2014, the Company had outstanding mortgage debt of approximately $5.1 billion.

During the year ended December 31, 2014, the Company:


▪	Repaid $100.7 million of mortgage loans; and


▪	Assumed $28.9 million of mortgage debt on one acquired property.

The Company recorded approximately $0.3 million of prepayment penalties during the year ended December 31, 2014 as additional interest expense related to debt extinguishment of mortgages. The Company also recorded $1.9 million of write-offs of net unamortized premiums during the year ended December 31, 2014 as a reduction of interest expense related to debt extinguishment of mortgages.

As of December 31, 2014, the Company had $700.5 million of secured debt subject to third party credit enhancement.

As of December 31, 2014, scheduled maturities for the Company’s outstanding mortgage indebtedness were at various dates through May 1, 2061. At December 31, 2014, the interest rate range on the Company’s mortgage debt was 0.03% to 7.25%. During the year ended December 31, 2014, the weighted average interest rate on the Company’s mortgage debt was 4.21%.

Notes

The following tables summarize the Company’s unsecured note balances and certain interest rate and maturity date information as of and for the years ended December 31, 2015 and 2014, respectively:



December 31, 2015 (Amounts in thousands)	Net Principal Balance		Interest Rate Ranges	Weighted Average Interest Rate	Maturity Date Ranges
Fixed Rate Public Notes (1)	$	5,423,012	3.00% - 7.57%	5.30%	2016 - 2045
Floating Rate Public Notes (1)	453,340		(1)	0.93%	2019
Totals	$	5,876,352



December 31, 2014 (Amounts in thousands)	Net Principal Balance		Interest Rate Ranges	Weighted Average Interest Rate	Maturity Date Ranges
Fixed Rate Public Notes (1)	$	4,974,154	3.00% - 7.57%	5.45%	2015 - 2044
Floating Rate Public Notes (1)	451,192		(1)	1.15%	2019
Totals	$	5,425,346


(1)	Fair value interest rate swaps convert the $450.0 million 2.375% notes due July 1, 2019 to a floating interest rate of 90-Day LIBOR plus 0.61%.

The Company’s unsecured public debt contains certain financial and operating covenants including, among other things, maintenance of certain financial ratios. The Company was in compliance with its unsecured public debt covenants for both the years ended December 31, 2015 and 2014.

EQR and ERPOP currently have an active universal shelf registration statement for the issuance of equity and debt securities that automatically became effective upon filing with the SEC on July 30, 2013 and expires on July 30, 2016. Per the terms of ERPOP's partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of ERPOP in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis) or preference units (on a one-for-one preferred share per preference unit basis).

During the year ended December 31, 2015, the Company:


▪	Repaid $300.0 million of 6.584% unsecured notes at maturity;


▪	Issued $450.0 million of ten-year 3.375% fixed rate public notes, receiving net proceeds of $447.5 million before underwriting fees, hedge termination costs and other expenses, at an all-in effective interest rate of 3.81% after termination of various forward starting swaps in conjunction with the issuance (see Note 9 for further discussion); and


▪	Issued $300.0 million of thirty-year 4.50% fixed rate public notes, receiving net proceeds of $298.9 million before underwriting fees and other expenses, at an all-in effective interest rate of 4.55%.

During the year ended December 31, 2014, the Company:


▪	Repaid $500.0 million of 5.250% unsecured notes at maturity;


▪	Repaid its $750.0 million unsecured term loan facility in conjunction with the note issuances discussed below and wrote-off approximately $0.6 million of unamortized deferred financing costs as additional interest expense;


▪	Issued $450.0 million of five-year 2.375% fixed rate public notes, receiving net proceeds of $449.6 million before underwriting fees and other expenses, at an all-in effective interest rate of 2.52% and swapped the notes to a floating interest rate in conjunction with the issuance (see Note 9 for further discussion); and


•	Issued $750.0 million of thirty-year 4.50% fixed rate public notes, receiving net proceeds of $744.7 million before underwriting fees, hedge termination costs and other expenses, at an all-in effective interest rate of 4.57% after termination of various forward starting swaps in conjunction with the issuance (see Note 9 for further discussion).

Line of Credit and Commercial Paper

On January 11, 2013, the Company replaced its existing $1.75 billion facility with a $2.5 billion unsecured revolving credit facility maturing April 1, 2018. The Company has the ability to increase available borrowings by an additional $500.0 million by adding additional banks to the facility or obtaining the agreement of existing banks to increase their commitments. The interest rate on advances under the facility will generally be LIBOR plus a spread (currently 0.95%) and the Company pays an annual facility fee (currently 15 basis points). Both the spread and the facility fee are dependent on the credit rating of the Company's long-term debt.

On February 2, 2015 the Company entered into an unsecured commercial paper note program in the United States. The Company may borrow up to a maximum of $500.0 million under this program subject to market conditions. The notes will be sold under customary terms in the United States commercial paper note market and will rank pari passu with all of the Company's other unsecured senior indebtedness. As of December 31, 2015, there was a balance of $387.3 million on the commercial paper program ($387.5 million in principal outstanding net of an unamortized discount of $0.2 million). The notes bear interest at various floating rates with a weighted average of 0.56% for the year ended December 31, 2015 and a weighted average maturity of 19 days as of December 31, 2015.

As of December 31, 2015, the amount available on the revolving credit facility was $2.07 billion (net of $45.1 million which was restricted/dedicated to support letters of credit and net of $387.5 million outstanding on the commercial paper program). During the year ended December 31, 2015, the weighted average interest rate on the revolving credit facility was 1.07%. As of December 31, 2014, the amount available on the revolving credit facility was $2.12 billion (net of $43.8 million which was restricted/dedicated to support letters of credit and net of the $333.0 million outstanding on the revolving credit facility). During the year ended December 31, 2014, the weighted average interest rate on the revolving credit facility was 0.95%.

Other

The following table provides a summary of the aggregate payments of principal on all debt for each of the next five years and thereafter as of December 31, 2015 (amounts in thousands):



Year	Total (1)
2016	$	1,352,813
2017	1,347,846
2018	180,461
2019	1,281,127
2020	1,679,432
Thereafter	5,173,079
Net Unamortized (Discount)	(46,260		)
Total	$	10,968,498


(1)	Premiums and discounts are amortized over the life of the debt. See Note 18 for discussion of the debt amounts repaid subsequent to December 31, 2015.