Fourth Quarter 2025 Results Table of Contents | Earnings Release | 1 - 5 | | --- | --- | | Consolidated Statements of Operations | 6 | | Consolidated Statements of Funds From Operations and Normalized | | | Funds From Operations | 7 | | Consolidated Balance Sheets | 8 | | Portfolio Summary | 9 | | Portfolio Rollforward | 10 | | Same Store Results 11 - 18 | | | Debt Summary 19 - 21 | | | Capital Structure | 22 | | Common Share and Unit Weighted Average Amounts Outstanding | 23 | | Partially Owned Properties ...

Financial Performance - For the quarter ended December 2025, Equity Residential (EQR) reported revenue of $781.91 million, which is a 2% increase compared to the same period last year [1] - The earnings per share (EPS) for the quarter was $1.03, down from $1.10 in the year-ago quarter [1] - The reported revenue was a surprise of -0.94% compared to the Zacks Consensus Estimate of $789.34 million, and the EPS surprise was -0.74% against the consensus estimate of $1.04 [1] Key Metrics - The physical occupancy rate was 96.2%, slightly below the four-analyst average estimate of 96.3% [4] - Total apartment units stood at 78,921, which is lower than the three-analyst average estimate of 85,764 [4] - The change in same-store revenue growth was 2.5%, compared to the average estimate of 3.2% based on two analysts [4] - Rental income from same-store properties was $743.54 million, exceeding the average estimate of $734.51 million by two analysts, representing a 4.2% increase year-over-year [4] - Net earnings per share (diluted) was reported at $1.00, significantly higher than the average estimate of $0.41 based on six analysts [4] Stock Performance - Shares of Equity Residential have returned +1.8% over the past month, outperforming the Zacks S&P 500 composite's +0.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it may perform in line with the broader market in the near term [3]

Core Viewpoint - Equity Residential (EQR) reported quarterly funds from operations (FFO) of $1.03 per share, slightly missing the Zacks Consensus Estimate of $1.04 per share, but showing an increase from $1 per share a year ago [1] Financial Performance - The company posted revenues of $781.91 million for the quarter ended December 2025, which was below the Zacks Consensus Estimate by 0.94%, compared to $766.78 million in the same quarter last year [2] - Over the last four quarters, Equity Residential has surpassed consensus FFO estimates only once [2] Stock Performance and Outlook - Equity Residential shares have increased by approximately 0.1% since the beginning of the year, while the S&P 500 has gained 0.5% [3] - The future performance of the stock will largely depend on management's commentary during the earnings call and the company's FFO outlook [4][6] Estimate Revisions and Industry Context - The current consensus FFO estimate for the upcoming quarter is $0.99 on revenues of $789.64 million, and for the current fiscal year, it is $4.13 on revenues of $3.21 billion [7] - The Zacks Industry Rank indicates that the REIT and Equity Trust - Residential sector is currently in the bottom 36% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Financial Performance - For the full year of 2025, same store revenues increased by 2.6%, while same store expenses rose by 3.7%, resulting in a same store Net Operating Income (NOI) growth of 2.2%[10] - In Q4 2025, the company reported an Earnings Per Share (EPS) of $1.00, a decrease of 9.1% compared to Q4 2024, while the Funds from Operations (FFO) per share remained stable at $0.97[8] - The full year 2026 EPS guidance is set between $1.44 and $1.56, reflecting a significant decrease from the 2025 actual EPS of $2.94[12] - Total revenues for 2025 were $3.09 billion, an increase from $2.98 billion in 2024, with rental income contributing $3.09 billion[37] - Net income for 2025 was $1.15 billion, up from $1.07 billion in 2024, with net income attributable to common shares at $1.12 billion[37] - Funds from Operations (FFO) available to Common Shares and Units for 2025 was $1,538,580,000, up 4.7% from $1,469,710,000 in 2024[40] - Normalized FFO available to Common Shares and Units for 2025 was $1,558,403,000, compared to $1,521,606,000 in 2024, reflecting a growth of 2.4%[40] - Net income for the year ended December 31, 2025, was $1,151,949,000, an increase of 7.5% from $1,070,975,000 in 2024[40] - The actual EPS for Q4 2025 was $1.00, with a projected decrease to a midpoint of $0.31 for Q1 2026 primarily due to lower expected property sale gains[31] - The actual FFO for Q4 2025 was $0.97 per share, with a projected decrease to a midpoint of $0.95 for Q1 2026 due to lower expected other expenses[32] Shareholder Returns - The company returned approximately $1.38 billion to shareholders through share repurchases and dividend payments over the past year[10] - The annual common share dividend for 2025 was $2.77 per share, amounting to over $1.0 billion[29] - The company repurchased approximately 3.4 million common shares at an average price of $61.06 per share, totaling around $205.7 million in Q4 2025[10] - The Company repurchased approximately 4.8 million common shares in 2025, representing 1.3% of outstanding shares, at an average price of $62.03, totaling approximately $300.0 million[27] - The company plans to invest approximately $200 million in share repurchases in the first half of 2026[131] Property Transactions - The company sold 11 properties for approximately $1.1 billion in 2025, while acquiring nine properties for about $636.8 million, indicating a net asset sale[10] - The company disposed of 6 consolidated rental properties for a sales price of $527,611,000, with a yield of -5.6%[47] - The company disposed of 11 consolidated rental properties for a total sales price of $1,122,061, yielding a 5.4%[50] - The company acquired a 25% interest in two previously unconsolidated properties in the Dallas/Ft. Worth market for approximately $18.8 million in cash and contributed $101.6 million for the repayment of construction loans[44] Development and Occupancy - The company completed a development project in San Francisco and Denver, totaling 495 apartment units at a cost of approximately $237.8 million in 2025[26] - The physical occupancy rate for the full year 2025 was reported at 96.4%, an increase from 96.2% in 2024[19] - The company completed 2 consolidated developments in Q4 2025, adding 495 units[50] - The occupancy rate for completed projects was reported at 100% for several properties, indicating strong demand[111] - Total same store residential units increased to 81,780 in Q4 2025, with an average rental rate of $3,111 and occupancy rate of 96.1%[71] Revenue and Expense Trends - Total same store revenues for 2025 were $2,821,804, a 2.6% increase from $2,749,354 in 2024[57] - Same store NOI for 2025 was $1,916,917, reflecting a 2.2% increase from $1,876,555 in 2024[57] - Total operating expenses for 2025 were $1.02 billion, an increase from $961.83 million in 2024, with Q4 2025 operating expenses at $254.37 million compared to $245.03 million in Q4 2024[168] - Operating expenses for Q4 2025 totaled $234.69 million, reflecting a 2.9% increase from Q4 2024[83] - Total Same Store Operating Expenses increased by 3.7% year-over-year to $904,887,000 in YTD 2025 from $872,799,000 in YTD 2024[85] Debt and Capital Structure - The Company entered into a new $2.5 billion unsecured revolving credit agreement, maturing in December 2030, replacing the previous facility[28] - Total debt as of December 31, 2025, was $8,175,010,000, with a weighted average interest rate of 3.76%[90] - The company’s debt to adjusted total assets ratio was 27.4%, well below the 60% limit[98] - Secured debt accounted for 19.4% of total debt, while unsecured debt made up 80.6%[90] - The Company has a $2.5 billion unsecured revolving credit facility, with $1,909,127 available as of December 31, 2025, after accounting for outstanding commercial paper and other restricted amounts[140] Future Outlook - The company expects 2026 same store revenue growth to be between 1.2% and 3.2%, with same store expense growth projected between 3.0% and 4.0%[10] - The company anticipates continued growth in rental revenues and NOI, driven by market expansion and new developments[66] - The company is focusing on market expansion and new product development to enhance its portfolio and drive future growth[169] - The company plans to enhance NOI through sustainability initiatives and property-level technology investments, alongside renovation expenditures[137] - The company anticipates normalized FFO per share for Q1 2026 to be between $1.44 and $1.56, indicating a positive outlook for future performance[163]

Core Insights - The current reporting cycle for real estate investment trusts (REITs) is active, with several earnings releases scheduled for this week [1] U.S. Apartment Market in Q4 - The U.S. apartment sector experienced a shift in Q4 2025, with net move-outs returning for the first time in three years, resulting in a loss of approximately 40,400 net units [3] - Annual absorption was just over 365,900 units, the lowest since mid-2024, indicating a return to long-term averages [3] - Approximately 409,500 units were completed in 2025, with 89,400 in Q4, marking a fourth consecutive quarterly decline in completions [4] - Occupancy rates dipped to 94.8% at year-end, and effective asking rents fell by 1.7% in Q4, with annual rents down 0.6%, the largest annual decline since early 2021 [5] - Over 23% of units offered concessions averaging 7%, reflecting landlords' focus on occupancy over rent growth [5] - Market segmentation showed steep rent declines in supply-heavy Sun Belt metros, while coastal and tech-oriented markets saw modest rent gains [6] Earnings Outlook for Residential REITs - AvalonBay Communities is expected to report moderated Q4 results, with a Zacks Consensus Estimate of $768.33 million for revenues, indicating a 3.75% year-over-year increase [7][8] - Essex Property Trust is projected to benefit from its West Coast exposure, with a revenue estimate of $476.57 million, reflecting a 4.86% increase year-over-year [11][12] - Mid-America Apartment Communities anticipates a revenue of $557.79 million, suggesting a 1.45% rise from the previous year [15][16] - Equity Residential's revenue estimate stands at $789.34 million, indicating a 2.94% year-over-year increase, supported by portfolio diversification [17][18] - Camden Property Trust expects revenues of $394.65 million, implying a growth of 2.15% from the year-ago figure [20][21]

Key Takeaways Equity Residential is expected to report year-over-year growth in Q4 revenues and normalized FFO per share.EQR likely to benefit from higher same-store revenues and occupancy despite softer demand and supply pressure.The company is expected to report Q4 normalized FFO per share within its projected $1.02-$1.06 range.Equity Residential (EQR) is slated to report fourth-quarter and full-year 2025 results after the closing bell on Feb. 5. The company’s quarterly results are likely to reflect growt ...

Distribution Summary - The total distribution per share for common shares is $2.752500, with ordinary dividends amounting to $2.065372 and capital gain distributions of $0.000000 [2][4] - For preferred shares Series K, the total distribution per share is $4.145000, with ordinary dividends of $3.110252 and capital gain distributions of $0.000000 [3][4] Dividend Breakdown - The ordinary dividends for common shares include $0.675000 on January 2, 2025, and $0.692500 on March 31, 2025, among others [1][2] - Preferred shares Series K have dividends of $1.036250 on March 21, 2025, and similar amounts on subsequent dates [3][4] Tax Reporting - The distributions are reported in accordance with IRS regulations, including specific disclosures for capital gains and dividends [4][5] - The amounts reported in Box 2a for capital gains are relevant for holders of applicable partnership interests under Section 1061 of the Internal Revenue Code [4][5]

Core Viewpoint - Equity Residential (EQR) shares have underperformed over the past year, losing over 11% of their value despite reasonable company performance [1] Company Performance - EQR's performance has been reasonable, indicating that the company's fundamentals may not align with market sentiment [1] Market Sentiment - There is increasing pessimism regarding the trajectory of rental inflation, which has negatively impacted EQR's stock performance [1]

Core Viewpoint - Equity Residential (EQR) shares have underperformed over the past year, losing over 11% of their value despite reasonable company performance [1] Company Performance - EQR's performance has been reasonable, indicating that the company's fundamentals may not align with market sentiment [1] Market Sentiment - There is increasing pessimism regarding the trajectory of rental inflation, which has negatively impacted EQR's stock performance [1]

Core Viewpoint - Equity Residential (NYSE:EQR) is identified as one of the best depressed stocks to buy currently, with varying analyst ratings and price targets reflecting differing outlooks for the company and the broader real estate investment trust (REIT) sector [1][3]. Group 1: Analyst Ratings and Price Targets - Barclays analyst Richard Hightower raised the price target for Equity Residential to $78 from $77 while maintaining an "Overweight" rating, indicating a positive outlook for the company [1]. - Conversely, BMO Capital downgraded Equity Residential's stock to "Market Perform" from "Outperform," with a reduced price target of $68, down from $70, reflecting concerns about the company's fundamentals in key coastal markets [3]. - Barclays has a neutral stance on overall REITs for 2026, indicating a cautious approach towards the sector despite the positive outlook for apartments, storage, and single-family rentals [2]. Group 2: Market Conditions and Company Fundamentals - The outlook for Equity Residential is influenced by a lackluster job market and stretched affordability, which are expected to soften the company's fundamentals in its key coastal markets [3]. - The company owns and manages rental properties in dynamic metro areas across the US, positioning it within a competitive real estate landscape [4].