Earnings Release This section provides an overview of Equity Residential's first quarter 2025 financial results, operational highlights, investment activities, and future guidance, along with company information and forward-looking statements First Quarter 2025 Results Overview Equity Residential reported strong first-quarter 2025 results, exceeding guidance expectations. While EPS decreased, FFO and Normalized FFO per share saw positive growth compared to Q1 2024, driven by robust revenue growth in key markets and record-low resident turnover Key Financial Metrics (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | $ Change | % Change | | :----------------------- | :------ | :------ | :------- | :------- | | Earnings Per Share (EPS) | $0.67 | $0.77 | $(0.10) | (13.0%) | | Funds from Operations (FFO) per share | $0.94 | $0.87 | $0.07 | 8.0% | | Normalized FFO (NFFO) per share | $0.95 | $0.93 | $0.02 | 2.2% | - The decrease in EPS is primarily due to lower property sale gains and higher depreciation expense. FFO and NFFO per share increases are attributed to various adjustment items and strong operating performance10 - First quarter revenue growth exceeded expectations, driven by strong performance in New York and Washington, D.C., and improvements in San Francisco and Seattle. Washington, D.C. showed resilient demand despite government job cuts11 Recent Highlights and Operational Performance The company's President and CEO, Mark J. Parrell, expressed encouragement over the Q1 operating performance, positioning the company well for the primary leasing season. Key operational metrics showed positive trends, including same store revenue growth and historically low resident turnover - CEO Mark J. Parrell noted that operating performance exceeded expectations, positioning the company well for the primary leasing season, and anticipates business resilience amidst economic uncertainty due to favorable demand, supply, and lifestyle preferences9 Overall Same Store Operating Statistics | Metric | Q1 2025 vs. Q1 2024 | Q1 2025 vs. Q4 2024 | | :---------------- | :------------------ | :------------------ | | Apartment Units | 75,362 | 80,818 | | Physical Occupancy | 96.5% vs. 96.3% | 96.4% vs. 96.0% | | Revenues | 2.2% | 0.8% |\ | Expenses | 4.1% | 5.7% |\ | NOI | 1.3% | (1.4%) | - Resident Turnover in Q1 2025 was 7.9%, the lowest in the company's history11 Same Store Residential Revenues (Q1 2025 vs. Q1 2024) | Same Store Residential Revenues (Q1 2025 vs. Q1 2024) | | :---------------------------------------------------- | | Lease rates: 1.9% |\ | Vacancy gain (loss): 0.2% |\ | Bad Debt, Net: 0.2% |\ | Other: 0.4% |\ | Total Same Store Residential Revenues: 2.7% | Residential Same Store Operating Statistics Residential same store operating statistics for Q1 2025 showed improved physical occupancy and a higher percentage of residents renewing, while new lease changes remained negative but improved from the prior quarter. Blended rates met expectations and are projected to increase in Q2 2025 Residential Same Store Operating Statistics | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :-------------------------- | :------ | :------ | :------ | | Physical Occupancy | 96.5% | 96.1% | 96.3% | | Percentage of Residents Renewing by quarter | 62.0% | 61.3% | 61.1% | | New Lease Change | (2.2%) | (4.4%) | (2.3%) | | Renewal Rate Achieved | 4.9% | 5.0% | 4.7% | | Blended Rate | 1.8% | 1.0% | 1.5% | - Blended Rate for Q1 2025 met expectations and was consistent with seasonal patterns, while Physical Occupancy exceeded expectations20 - For Q2 2025, the Blended Rate is expected to be between 2.8% and 3.4%20 Investment Activity In Q1 2025, Equity Residential did not acquire any operating properties but sold two properties and one land parcel for a total of approximately $229.9 million. The company also completed three development projects, adding 945 apartment units in New York, Denver, and San Francisco - No operating properties were acquired during Q1 202521 - Sold two properties (546 apartment units) in San Diego and Seattle for approximately $225.6 million at a weighted average Disposition Yield of 5.2%21 - Sold one land parcel for approximately $4.3 million21 - Completed two joint venture development projects in New York and Denver (720 apartment units) for approximately $285.9 million22 - Completed one wholly owned development project in San Francisco (225 apartment units) for approximately $152.6 million22 Second Quarter 2025 Guidance Equity Residential provided guidance for Q2 2025 EPS, FFO per share, and Normalized FFO per share. The company is not revising its annual guidance from the Q4 2024 earnings release Q2 2025 Guidance | Metric | Q2 2025 Guidance | | :----------------------- | :--------------- | | EPS | $0.49 to $0.53 | | FFO per share | $0.95 to $0.99 | | Normalized FFO per share | $0.96 to $1.00 | - The company is not revising its annual operating or other guidance (including EPS, FFO per share, and Normalized FFO per share) provided in the Q4 2024 earnings release23 - The difference in Normalized FFO per share guidance for Q2 2025 compared to Q1 2025 actuals is primarily due to an expected positive impact from Residential same store NOI ($0.03) offset by higher interest expense, net ($(0.01))25 About Equity Residential Equity Residential is an S&P 500 member focused on acquiring, developing, and managing residential properties in dynamic cities that attract affluent long-term renters. The company owns or invests in 312 properties with 84,648 apartment units across established and expanding markets - Equity Residential is an S&P 500 member, focused on acquisition, development, and management of residential properties in and around dynamic cities attracting affluent long-term renters26 - The company owns or has investments in 312 properties, comprising 84,648 apartment units26 - Established presence in Boston, New York, Washington, D.C., Seattle, San Francisco, and Southern California, with an expanding presence in Denver, Atlanta, Dallas/Ft. Worth, and Austin26 Forward-Looking Statements This section highlights that the press release contains forward-looking statements based on management's current expectations, estimates, and projections. These statements are subject to inherent uncertainties and risks, including changes in market conditions, construction, government regulations, and competition, as detailed in the company's SEC filings. Equity Residential disclaims any obligation to update these statements - The press release contains forward-looking statements based on current expectations, estimates, projections, and assumptions made by management27 - Forward-looking information is subject to uncertainties and risks, including changes in general market conditions, job growth, labor/material costs, new multifamily construction, government regulations, and competition27 - Equity Residential assumes no obligation to update or supplement forward-looking statements that become untrue due to subsequent events27 Consolidated Statements of Operations This section presents Equity Residential's consolidated statements of operations, detailing revenues, expenses, and net income for the first quarter of 2025 compared to the prior year Consolidated Statements of Operations Summary Equity Residential reported a decrease in net income for Q1 2025 compared to Q1 2024, primarily due to lower net gain on sales of real estate properties and higher depreciation and interest expenses, despite an increase in rental income Consolidated Statements of Operations | Metric (in thousands) | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :-------------------- | :-------- | :-------- | :-------- | | Rental income | $760,810 | $730,818 | +$29,992 | | Total expenses | $566,542 | $520,430 | +$46,112 | | Net gain on sales of real estate properties | $154,152 | $188,185 | $(34,033) | | Interest expense, net | $(72,114) | $(67,212) | $(4,902) | | Net income | $264,798 | $305,032 | $(40,234) | | Net income available to Common Shares | $256,236 | $293,796 | $(37,560) | | Earnings per share – diluted | $0.67 | $0.77 | $(0.10) | | Distributions declared per Common Share outstanding | $0.6925 | $0.675 | +$0.0175 | - Depreciation expense increased from $225.7 million in Q1 2024 to $256.7 million in Q1 202530 - General and administrative expenses increased from $15.7 million in Q1 2024 to $18.3 million in Q1 202530 Consolidated Statements of Funds From Operations and Normalized Funds From Operations This section outlines Equity Residential's Funds From Operations (FFO) and Normalized FFO, key non-GAAP metrics for real estate investment trusts, for the first quarter of 2025 FFO and Normalized FFO Summary Equity Residential reported an increase in FFO and Normalized FFO for Q1 2025 compared to Q1 2024, primarily driven by adjustments for depreciation and a significant reduction in 'Other miscellaneous items' compared to the prior year Funds From Operations and Normalized Funds From Operations | Metric (in thousands) | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :-------------------- | :-------- | :-------- | :-------- | | Net income | $264,798 | $305,032 | $(40,234) | | FFO available to Common Shares and Units | $368,935 | $338,419 | +$30,516 | | Normalized FFO available to Common Shares and Units | $372,518 | $364,896 | +$7,622 | | FFO per share and Unit – diluted | $0.94 | $0.87 | +$0.07 | | Normalized FFO per share and Unit – diluted | $0.95 | $0.93 | +$0.02 | - Depreciation adjustment for FFO increased from $225.7 million in Q1 2024 to $256.7 million in Q1 202533 - Other miscellaneous items adjustment for Normalized FFO significantly decreased from $30.6 million in Q1 2024 to $1.7 million in Q1 202533 Consolidated Balance Sheets This section provides a summary of Equity Residential's financial position, including assets, liabilities, and equity, as of March 31, 2025, and December 31, 2024 Consolidated Balance Sheets Summary As of March 31, 2025, Equity Residential's total assets slightly decreased compared to December 31, 2024, primarily due to a reduction in investment in real estate, net, and cash. Total liabilities also decreased, driven by lower mortgage notes payable and line of credit balances Consolidated Balance Sheets | Metric (in thousands) | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------- | :------------- | :---------------- | :--------- | | Total assets | $20,562,185 | $20,834,176 | $(271,991) | | Investment in real estate, net | $19,324,541 | $19,558,328 | $(233,787) | | Cash and cash equivalents | $39,849 | $62,302 | $(22,453) | | Total liabilities | $8,973,055 | $9,249,829 | $(276,774) | | Mortgage notes payable, net | $1,593,803 | $1,630,690 | $(36,887) | | Line of credit and commercial paper | $304,000 | $543,679 | $(239,679) | | Total equity | $11,251,431 | $11,245,784 | +$5,647 | - Projects under development decreased from $261.7 million to $144.7 million, reflecting project completions35 - Accounts payable and accrued expenses increased from $99.3 million to $149.3 million35 Portfolio Summary This section offers a comprehensive overview of Equity Residential's property portfolio, categorized by market and detailing key metrics such as unit count, NOI contribution, and average rental rates Portfolio Overview by Market As of March 31, 2025, Equity Residential's portfolio consists of 312 properties and 84,648 apartment units, with a significant concentration in established markets like Southern California, San Francisco, Washington D.C., New York, Boston, and Seattle, which collectively account for over 90% of budgeted NOI Portfolio Summary by Market | Market Category | Properties | Apartment Units | % of Stabilized Budgeted NOI | Average Rental Rate | | :---------------- | :--------- | :-------------- | :--------------------------- | :------------------ | | Established Markets | 267 | 71,017 | 90.2% | $3,259 | | Expansion Markets | 45 | 13,631 | 9.8% | $2,082 | | Total | 312 | 84,648 | 100.0% | $3,072 | - New York has the highest average rental rate at $4,662, followed by San Francisco at $3,41537 - The portfolio includes 294 wholly owned properties (80,010 units), 12 consolidated partially owned properties (2,656 units), and 6 unconsolidated partially owned properties (1,982 units)37 Portfolio Rollforward This section details the changes in Equity Residential's property portfolio during Q1 2025, including dispositions and completed development projects, and their impact on apartment unit count Q1 2025 Portfolio Changes During Q1 2025, Equity Residential's portfolio saw a net increase of 399 apartment units, resulting from the disposition of two consolidated rental properties and one land parcel, offset by the completion of three development projects (one consolidated, two unconsolidated) Portfolio Rollforward Activity | Activity | Properties | Apartment Units | Sales Price (in thousands) | | :-------------------------- | :--------- | :-------------- | :---------- | | Balance as of 12/31/2024 | 311 | 84,249 | | | Dispositions: Consolidated Rental Properties | (2) | (546) | $(225,600) | | Dispositions: Consolidated Land Parcels | — | — | $(4,300) | | Completed Developments – Consolidated | 1 | 225 | | | Completed Developments – Unconsolidated | 2 | 720 | | | Balance as of 3/31/2025 | 312 | 84,648 | | - The two consolidated rental properties were sold at a weighted average Disposition Yield of 5.2%40 Same Store Results This section presents the operating performance of Equity Residential's same store properties, analyzing revenue, expenses, and Net Operating Income (NOI) trends across residential and non-residential segments and by market Overall Same Store Results (Residential and Non-Residential) Equity Residential's same store portfolio (including Residential and Non-Residential) showed revenue growth and improved physical occupancy year-over-year, but a slight decline in NOI quarter-over-quarter due to higher expenses Overall Same Store Operating Statistics | Metric | Q1 2025 vs. Q1 2024 (75,362 units) | Q1 2025 vs. Q4 2024 (80,818 units) | | :---------------- | :--------------------------------- | :--------------------------------- | | Revenues | +2.2% | +0.8% | | Expenses | +4.1% | +5.7% | | NOI | +1.3% | (1.4%) | | Average Rental Rate | +2.4% | +0.3% | | Physical Occupancy | +0.2% | +0.4% | | Turnover | (0.7%) | (1.3%) | - Non-Residential operations reduced quarterly same store revenue growth by 0.50% year-over-year, primarily due to higher reinstatement of straight-line receivable balances in Q1 202445 Same Store Residential Revenues – GAAP to Cash Basis Same Store Residential Revenues on a GAAP basis increased by 2.7% year-over-year and 0.7% quarter-over-quarter. When adjusted for leasing concessions on a cash basis, the year-over-year growth was slightly lower at 2.5%, while quarter-over-quarter remained consistent at 0.7% Same Store Residential Revenues Reconciliation | Metric (in thousands) | Q1 2025 vs. Q1 2024 (75,362 units) (in thousands) | Q1 2025 vs. Q4 2024 (80,818 units) (in thousands) | | :---------------------------------------------------- | :--------------------------------- | :--------------------------------- | | Same Store Residential Revenues (GAAP Basis) | $688,857 vs. $671,039 | $722,351 vs. $717,211 | | Leasing Concessions amortized | $5,176 vs. $5,052 | $5,800 vs. $5,522 | | Leasing Concessions granted | $(5,972) vs. $(4,836) | $(6,977) vs. $(6,619) | | Same Store Residential Revenues with Leasing Concessions on a cash basis | $688,061 vs. $671,255 | $721,174 vs. $716,114 | | % change - GAAP revenue | 2.7% | 0.7% | | % change - cash revenue | 2.5% | 0.7% | Same Store Net Operating Income By Quarter Same store NOI for 75,362 apartment units increased year-over-year in Q1 2025 but saw a sequential decline from Q4 2024, primarily due to higher expenses Same Store Net Operating Income Trends | Metric (in thousands) | Q1 2025 (in thousands) | Q4 2024 (in thousands) | Q3 2024 (in thousands) | Q2 2024 (in thousands) | Q1 2024 (in thousands) | | :-------------------- | :-------- | :-------- | :-------- | :-------- | :-------- | | Same store revenues | $715,800 | $709,646 | $706,976 | $704,060 | $700,443 | | Same store expenses | $235,241 | $221,822 | $226,647 | $219,926 | $225,958 | | Same store NOI | $480,559 | $487,824 | $480,329 | $484,134 | $474,485 | - Same store NOI increased by $6.07 million (1.3%) from Q1 2024 to Q1 2025, but decreased by $7.27 million (1.5%) from Q4 2024 to Q1 2025434550 Same Store Residential Accounts Receivable and Bad Debt Net residential accounts receivable balances remained stable, while bad debt, net, as a percentage of same store residential revenues, improved year-over-year, indicating better collection performance Residential Accounts Receivable Balances | Metric (in thousands) | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | March 31, 2024 (in thousands) | | :-------------------------------- | :------------- | :---------------- | :------------- | | Residential accounts receivable balances | $13,972 | $14,328 | $17,787 | | Allowance for doubtful accounts | $(9,132) | $(9,431) | $(12,885) | | Net receivable balances | $4,840 | $4,897 | $4,902 | Bad Debt Analysis | Metric (in thousands) | Q1 2025 (in thousands) | Q4 2024 (in thousands) | Q1 2024 (in thousands) | | :-------------------------------- | :------- | :------- | :------- | | Bad debts before governmental rental assistance | $7,419 | $7,780 | $8,846 | | Governmental rental assistance received | $(268) | $(367) | $(442) | | Bad Debt, Net | $7,151 | $7,413 | $8,404 | | Bad Debt, Net as a % of Same Store Residential Revenues | 1.0% | 1.1% | 1.3% | - Total same store Residential Leasing Concessions granted in Q1 2025 were approximately $6.0 million52 Same Store Residential Results/Statistics by Market (Q1 2025 vs Q1 2024) Year-over-year, most established markets showed positive NOI growth, with Seattle leading at 4.4% and New York at 3.4%. Denver and Other Expansion Markets experienced NOI decreases, reflecting regional variations in performance Same Store Residential Performance by Market (Q1 2025 vs Q1 2024) | Market/Metro Area | Q1 2025 % of Actual NOI | Q1 2025 Average Rental Rate | Q1 2025 Physical Occupancy % | Q1 2025 Turnover | Revenues Change | Expenses Change | NOI Change | Average Rental Rate Change | Physical Occupancy Change | Turnover Change | | :------------------ | :---------------------- | :-------------------------- | :--------------------------- | :--------------- | :-------------- | :-------------- | :--------- | :------------------------- | :------------------------ | :-------------- | | Los Angeles | 17.7% | $2,956 | 95.7% | 9.0% | 1.4% | 2.6% | 0.9% | 1.2% | 0.2% | (0.6%) | | San Francisco | 16.3% | $3,387 | 96.8% | 8.3% | 3.3% | 3.3% | 3.3% | 3.0% | 0.3% | (1.2%) | | Washington, D.C. | 16.1% | $2,800 | 97.3% | 6.0% | 4.6% | 8.2% | 3.0% | 4.4% | 0.2% | (1.0%) | | New York | 14.5% | $4,710 | 97.6% | 6.3% | 3.2% | 2.9% | 3.4% | 2.6% | 0.6% | (0.2%) | | Boston | 11.2% | $3,657 | 95.8% | 7.1% | 2.9% | 6.2% | 1.5% | 2.8% | 0.1% | (0.3%) | | Seattle | 10.3% | $2,647 | 96.5% | 9.0% | 3.7% | 2.1% | 4.4% | 3.3% | 0.4% | (0.7%) | | Denver | 2.8% | $2,354 | 95.5% | 10.6% | (3.0%) | (0.2%) | (4.3%) | (2.3%) | (0.7%) | 0.1% | | Other Expansion Markets | 2.3% | $1,879 | 95.1% | 9.5% | (4.8%) | 2.8% | (9.9%) | (4.7%) | (0.1%) | (3.7%) | | Total | 100.0% | $3,160 | 96.5% | 7.9% | 2.7% | 4.0% | 2.0% | 2.4% | 0.2% | (0.7%) | Same Store Residential Results/Statistics by Market (Q1 2025 vs Q4 2024) Quarter-over-quarter, most established markets experienced a decline in NOI, primarily due to higher expenses, despite modest revenue growth. Seattle maintained flat NOI, while expansion markets continued to see NOI decreases Same Store Residential Performance by Market (Q1 2025 vs Q4 2024) | Market/Metro Area | Q1 2025 % of Actual NOI | Q1 2025 Average Rental Rate | Q1 2025 Physical Occupancy % | Q1 2025 Turnover | Revenues Change | Expenses Change | NOI Change | Average Rental Rate Change | Physical Occupancy Change | Turnover Change | | :------------------ | :---------------------- | :-------------------------- | :--------------------------- | :--------------- | :-------------- | :-------------- | :--------- | :------------------------- | :------------------------ | :-------------- | | Los Angeles | 16.8% | $2,956 | 95.7% | 9.0% | 0.5% | 5.2% | (1.6%) | 0.6% | (0.1%) | (0.6%) | | San Francisco | 15.9% | $3,387 | 96.8% | 8.3% | 1.7% | 8.0% | (0.8%) | 1.0% | 0.7% | (2.0%) | | Washington, D.C. | 15.7% | $2,798 | 97.3% | 6.1% | 1.1% | 9.3% | (2.5%) | 0.3% | 0.7% | (1.9%) | | New York | 13.9% | $4,710 | 97.6% | 6.3% | 0.7% | 5.1% | (2.4%) | 0.4% | 0.2% | (0.2%) | | Boston | 10.8% | $3,635 | 95.8% | 7.0% | 0.3% | 7.8% | (2.7%) | (0.2%) | 0.5% | (0.8%) | | Seattle | 9.8% | $2,647 | 96.5% | 9.0% | 0.6% | 2.2% | 0.0% | 0.4% | 0.2% | 0.0% | | Denver | 3.7% | $2,319 | 95.1% | 10.8% | (1.5%) | 1.5% | (2.8%) | (1.7%) | 0.2% | (2.1%) | | Other Expansion Markets | 4.9% | $1,922 | 95.4% | 9.2% | (0.5%) | 1.7% | (1.9%) | (1.4%) | 0.8% | (1.6%) | | Total | 100.0% | $3,092 | 96.4% | 7.9% | 0.7% | 5.7% | (1.6%) | 0.3% | 0.4% | (1.3%) | Same Store Residential Net Effective Lease Pricing Statistics In Q1 2025, established markets generally showed improved new lease changes and positive blended rates compared to Q4 2024, with New York having the highest blended rate. Expansion markets continued to experience negative new lease changes and blended rates Same Store Residential Net Effective Lease Pricing | Market/Metro Area | New Lease Change (Q1 2025) | New Lease Change (Q4 2024) | Renewal Rate Achieved (Q1 2025) | Renewal Rate Achieved (Q4 2024) | Blended Rate (Q1 2025) | Blended Rate (Q4 2024) | | :------------------ | :------------------------- | :------------------------- | :------------------------------ | :------------------------------ | :--------------------- | :--------------------- | | Southern California | (2.1%) | (4.9%) | 4.6% | 4.4% | 1.6% | 0.4% | | San Francisco | 0.6% | (2.8%) | 5.4% | 6.6% | 3.3% | 2.5% | | Washington, D.C. | 0.0% | (2.8%) | 5.7% | 5.5% | 3.2% | 1.8% | | New York | 1.4% | (1.6%) | 4.8% | 4.3% | 3.5% | 2.3% | | Boston | (5.3%) | (4.8%) | 4.5% | 4.4% | 0.0% | 1.1% | | Seattle | (3.4%) | (6.0%) | 5.5% | 6.9% | 1.7% | 0.5% | | Subtotal – Established Markets | (1.3%) | (3.8%) | 5.0% | 5.1% | 2.3% | 1.4% | | Denver | (13.1%) | (11.8%) | 3.9% | 3.1% | (6.1%) | (4.7%) | | Other Expansion Markets | (14.7%) | (12.9%) | 1.5% | 1.8% | (8.8%) | (6.3%) | | Total | (2.2%) | (4.4%) | 4.9% | 5.0% | 1.8% | 1.0% | Total Same Store Operating Expenses Total same store operating expenses increased by 4.1% year-over-year in Q1 2025, primarily driven by higher utilities, real estate taxes, and on-site payroll. Leasing and advertising expenses also saw a significant increase Total Same Store Operating Expenses Breakdown | Expense Category | Q1 2025 (in thousands) | Q1 2024 (in thousands) | $ Change (in thousands) | % Change | % of Q1 2025 Operating Expenses | | :------------------------ | :--------------------- | :--------------------- | :------- | :------- | :------------------------------ | | Real estate taxes | $94,556 | $91,907 | $2,649 | 2.9% | 40.2% | | On-site payroll | $43,444 | $42,019 | $1,425 | 3.4% | 18.5% | | Utilities | $39,479 | $36,145 | $3,334 | 9.2% | 16.8% | | Repairs and maintenance | $29,437 | $29,091 | $346 | 1.2% | 12.5% | | Insurance | $9,240 | $9,134 | $106 | 1.2% | 3.9% | | Leasing and advertising | $2,720 | $2,313 | $407 | 17.6% | 1.1% | | Other on-site operating expenses | $16,365 | $15,349 | $1,016 | 6.6% | 7.0% | | Total Same Store Operating Expenses | $235,241 | $225,958 | $9,283 | 4.1% | 100.0% | - Real estate taxes increased due to escalation in rates and assessed values, including a 1 percentage point contribution from 421-a tax abatement burnoffs in New York City66 - Utilities increased primarily due to higher commodity prices for gas and electric, and higher water, sewer, and trash expenses67 - Leasing and advertising expenses increased primarily due to higher advertising expenses and processing fees68 Debt Summary This section provides a detailed overview of Equity Residential's debt profile, including its composition, maturity schedule, and compliance with key debt covenants and credit ratios as of March 31, 2025 Debt Profile as of March 31, 2025 As of March 31, 2025, Equity Residential's total debt stood at $7.85 billion, predominantly unsecured and fixed-rate, with a weighted average interest rate of 3.74% and an average maturity of 7.2 years Debt Profile Summary | Debt Type | Debt Balances (in thousands) | % of Total | Weighted Average Rates | Weighted Average Maturities (years) | | :-------------------------- | :--------------------------- | :--------- | :--------------------- | :---------------------------------- | | Secured | $1,593,803 | 20.3% | 3.77% | 6.6 | | Unsecured | $6,253,081 | 79.7% | 3.74% | 7.4 | | Total | $7,846,884 | 100.0% | 3.74% | 7.2 | | Fixed Rate Debt | $7,350,892 | 93.7% | 3.72% | 7.4 | | Floating Rate Debt | $495,992 | 6.3% | 3.98% | 4.0 | - The weighted average maturity of commercial paper outstanding was 1 day at March 31, 2025, with a weighted average amount outstanding of approximately $390.2 million for the quarter72 - The company capitalized interest of approximately $3.9 million in Q1 2025, up from $3.1 million in Q1 202473 Debt Maturity Schedule Equity Residential has a well-laddered debt maturity schedule, with significant maturities in 2025 and 2030, and a substantial portion of debt maturing in 2035 and beyond. The majority of the debt is fixed-rate Debt Maturity Schedule by Year | Year | Fixed Rate (in thousands) | Floating Rate (in thousands) | Total (in thousands) | % of Total | Weighted Average Coupons on Fixed Rate Debt | Weighted Average Coupons on Total Debt | | :--- | :------------------------ | :--------------------------- | :------------------- | :--------- | :------------------------------------------ | :------------------------------------- | | 2025 | $450,000 | $310,900 | $760,900 | 9.6% | 3.38% | 3.84% | | 2026 | $592,025 | $7,400 | $599,425 | 7.6% | 3.58% | 3.58% | | 2027 | $400,000 | $8,200 | $408,200 | 5.2% | 3.25% | 3.24% | | 2028 | $900,000 | $9,000 | $909,000 | 11.5% | 3.79% | 3.78% | | 2029 | $888,120 | $9,700 | $897,820 | 11.3% | 3.30% | 3.30% | | 2030 | $1,148,462 | $10,800 | $1,159,262 | 14.6% | 2.53% | 2.53% | | 2031 | $528,500 | $37,700 | $566,200 | 7.2% | 1.94% | 2.00% | | 2032 | — | $26,000 | $26,000 | 0.3% | — | 3.09% | | 2033 | $550,000 | — | $550,000 | 6.9% | 5.22% | 5.22% | | 2034 | $600,000 | — | $600,000 | 7.6% | 4.65% | 4.65% | | 2035+ | $1,350,850 | $86,960 | $1,437,810 | 18.2% | 4.39% | 4.22% | | Total | $7,350,892 | $495,992 | $7,846,884 | 100.0% | 3.62% | 3.62% | - The 2025 floating rate debt includes $304.0 million in principal outstanding on the Commercial Paper Program77 Selected Unsecured Public Debt Covenants and Credit Ratios Equity Residential maintained strong compliance with its unsecured public debt covenants as of March 31, 2025, showing improved credit ratios such as lower total and net debt to Normalized EBITDAre and a higher percentage of unencumbered NOI Selected Unsecured Public Debt Covenants | Covenant | March 31, 2025 | December 31, 2024 | | :---------------------------------------------------- | :------------- | :---------------- | | Debt to Adjusted Total Assets (not to exceed 60%) | 26.8% | 27.7% | | Secured Debt to Adjusted Total Assets (not to exceed 40%) | 6.2% | 6.3% | | Consolidated Income Available for Debt Service to Maximum Annual Service Charges (must be at least 1.5 to 1) | 6.00 | 5.67 | | Total Unencumbered Assets to Unsecured Debt (must be at least 125%) | 493.3% | 473.7% | Key Credit Ratios | Credit Ratio | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Total debt to Normalized EBITDAre | 4.25x | 4.43x | | Net debt to Normalized EBITDAre | 4.21x | 4.38x | | Unencumbered NOI as a % of total NOI | 90.5% | 89.7% | - The company was in compliance with its unsecured debt covenants for all periods presented121 Capital Structure This section outlines Equity Residential's capital structure, detailing the composition of its total market capitalization, including debt, common shares, and preferred equity as of March 31, 2025 Capital Structure Overview as of March 31, 2025 As of March 31, 2025, Equity Residential's total market capitalization was approximately $35.89 billion, with equity representing 78.1% and total debt representing 21.9%. Common shares and units constitute the vast majority of the equity Market Capitalization Breakdown | Component | Amount (in thousands) | % of Total Market Capitalization | | :-------------------------- | :-------------------- | :------------------------------- | | Total Debt | $7,846,884 | 21.9% | | Common Shares and Units (Market Value) | $28,028,148 | 78.1% | | Perpetual Preferred Equity | $17,155 | 0.1% | | Total Market Capitalization | $35,892,187 | 100.0% | - Common Shares (including Restricted Shares) represent 97.0% of total shares and units, while Units (including OP Units and Restricted Units) represent 3.0%83 - The common share price at March 31, 2025, was $71.5883 Common Share and Unit Weighted Average Amounts Outstanding This section presents the weighted average common shares and units outstanding for Equity Residential, used in the calculation of per-share metrics for net income, FFO, and Normalized FFO Weighted Average Shares and Units Outstanding Equity Residential's weighted average common shares and units outstanding for diluted EPS, FFO, and Normalized FFO purposes increased slightly year-over-year, reflecting a modest increase in shares issuable from assumed conversions and vesting Weighted Average Shares and Units Outstanding | Metric | Q1 2025 | Q1 2024 | | :---------------------------------------------------- | :------------ | :------------ | | Weighted Average Amounts Outstanding for Net Income Purposes: | | | | Common Shares - basic | 379,207,994 | 378,811,922 | | Total Common Shares and Units - diluted | 391,179,431 | 390,561,185 | | Weighted Average Amounts Outstanding for FFO and Normalized FFO Purposes: | | | | Total Common Shares and OP Units - basic | 389,719,163 | 389,481,268 | | Total Common Shares and Units - diluted | 391,179,431 | 390,561,185 | | Period Ending Amounts Outstanding: | | | | Total Shares and Units | 391,563,950 | 390,672,373 | - Shares issuable from assumed conversion/vesting of OP Units decreased slightly, while long-term compensation shares/units increased86 Partially Owned Properties This section provides an overview of Equity Residential's investments in partially owned properties, detailing their unit count, financial contributions, and associated debt as of March 31, 2025 Overview of Partially Owned Properties As of March 31, 2025, Equity Residential had investments in 18 partially owned properties, totaling 4,638 apartment units. Consolidated properties generated positive NOI, while unconsolidated properties, including projects completed but not yet stabilized, contributed to NOI and incurred interest expenses Partially Owned Properties Summary | Category | Total Properties | Total Apartment Units | Q1 2025 NOI Expense (in thousands) | Q1 2025 Interest Expense (in thousands) | Total Debt (in thousands) | | :------------------------------------ | :--------------- | :-------------------- | :--------------------------------- | :-------------------------------------- | :------------------------ | | CONSOLIDATED: Operating properties (stabilized) | 12 | 2,656 | $16,175 | $255 | $28,312 | | CONSOLIDATED: Projects Under Development | — | — | $(83) | — | — | | UNCONSOLIDATED: Projects Under Development | — | — | $26 | $91 | — | | UNCONSOLIDATED: Projects Completed Not Stabilized | 6 | 1,982 | $2,706 | $3,785 | $339,269 | | Total Partially Owned Properties | 18 | 4,638 | $18,824 | $4,131 | $367,581 | - The company is currently developing one consolidated property (440 units) and two unconsolidated properties (639 units)8889 - Partially owned consolidated and unconsolidated amounts are presented at 100% of the project/property89 Development and Lease-Up Projects This section details Equity Residential's ongoing development and lease-up projects, including apartment unit counts, budgeted costs, and their current operational status and expected stabilization timelines Current Development and Lease-Up Projects As of March 31, 2025, Equity Residential had 3,286 apartment units across various development and lease-up projects, with a total budgeted capital cost of over $1.3 billion. Several projects were completed and in lease-up, while others were under development, contributing a net positive NOI of $2.5 million in Q1 2025 Development and Lease-Up Projects Overview | Project Category | No. of Apartment Units | Total Budgeted Capital Cost (in thousands) | Total Book Value to Date (in thousands) | Total Debt (in thousands) | Q1 2025 NOI (in thousands) | | :------------------------------------ | :--------------------- | :----------------------------------------- | :-------------------------------------- | :------------------------ | :------------------------- | | CONSOLIDATED: Projects Under Development | 440 | $232,172 | $144,706 | — | $(83) | | CONSOLIDATED: Projects Completed Not Stabilized | 225 | $152,621 | $146,406 | — | $(145) | | UNCONSOLIDATED: Projects Under Development | 639 | $307,200 | $124,361 | — | $26 | | UNCONSOLIDATED: Projects Completed Not Stabilized | 1,982 | $623,918 | $612,571 | $339,269 | $2,706 | | Total Development Projects | 3,286 | $1,315,911 | $1,028,044 | $339,269 | $2,504 | - The consolidated project 'The Basin' in Wakefield, MA, is 57% complete and expected to stabilize in Q2 202792 - The unconsolidated project 'Alexan Harrison' in Harrison, NY, is 100% complete, 85% leased, and 78% occupied, with stabilization expected in Q4 202592 - All unconsolidated projects are partially funded with project-specific construction loans that are non-recourse to the Company92 Residential Capital Expenditures to Real Estate This section outlines Equity Residential's residential capital expenditures for Q1 2025, distinguishing between recurring and NOI-enhancing investments across same store and non-same store properties Q1 2025 Residential Capital Expenditures In Q1 2025, Equity Residential invested $59.1 million in total consolidated residential capital expenditures, with $34.8 million allocated to recurring expenditures and $24.3 million to NOI-enhancing projects, including significant renovation expenditures Residential Capital Expenditures (Q1 2025) | Capital Expenditure Type | Same Store Properties (in thousands) | Non-Same Store Properties (in thousands) | Total Consolidated Properties (in thousands) | Same Store Avg. Per Apartment Unit | | :------------------------------------ | :----------------------------------- | :--------------------------------------- | :------------------------------------------- | :--------------------------------- | | Recurring Capital Expenditures | $31,149 | $3,620 | $34,769 | $413 | | NOI-Enhancing Expenditures: Renovation Expenditures | $18,848 | $2,939 | $21,787 | $250 | | NOI-Enhancing Expenditures: Other | $2,105 | $444 | $2,549 | $28 | | Total Capital Expenditures to Real Estate | $52,102 | $7,003 | $59,105 | $691 | - Renovation Expenditures on 608 same store apartment units approximated $31,000 per apartment unit renovated in Q1 202596 - Other NOI-enhancing expenditures include sustainability, property-level technology, and Accessory Dwelling Units (ADU) spend97 Normalized EBITDAre Reconciliations This section provides reconciliations for Normalized EBITDAre, a key non-GAAP financial measure, and related credit ratios, offering insights into Equity Residential's operational cash flow and debt servicing capacity Normalized EBITDAre and Credit Ratios Equity Residential's Normalized EBITDAre for the trailing twelve months ended March 31, 2025, was $1.847 billion, showing a slight increase from the prior year. Key credit ratios, including total and net debt to Normalized EBITDAre, improved, reflecting stronger credit strength Normalized EBITDAre Reconciliation | Metric (in thousands) | Trailing Twelve Months March 31, 2025 (in thousands) | Trailing Twelve Months December 31, 2024 (in thousands) | | :------------------------------------ | :------------------------------------ | :--------------------------------------- | | Net income | $1,030,741 | $1,070,975 | | EBITDA | $2,318,602 | $2,322,503 | | EBITDAre | $1,805,359 | $1,775,191 | | Normalized EBITDAre | $1,847,477 | $1,833,555 | Key Credit Ratios | Credit Ratio | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Total debt to Normalized EBITDAre | 4.25x | 4.43x | | Net debt to Normalized EBITDAre | 4.21x | 4.38x | | Unencumbered NOI as a % of total NOI | 90.5% | 89.7% | - Normalized EBITDAre does not include adjustments for the company's share of partially owned unconsolidated entities or the minority partner's share of partially owned consolidated entities due to their immaterial size101 Adjustments from FFO to Normalized FFO This section details the adjustments made to reconcile Funds From Operations (FFO) to Normalized FFO, highlighting non-recurring or non-operational items impacting the company's core performance metrics Analysis of FFO to Normalized FFO Adjustments Adjustments from FFO to Normalized FFO significantly decreased in Q1 2025 compared to Q1 2024, primarily due to a substantial reduction in insurance/litigation/environmental settlement or reserve expense, which was a major factor in the prior year FFO to Normalized FFO Adjustments | Adjustment Category (in thousands) | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Variance (in thousands) | | :----------------------------------------- | :------- | :------- | :------- | | Write-off of pursuit costs | $1,321 | $548 | $773 | | Debt extinguishment and preferred share redemption (gains) losses | $97 | $1,444 | $(1,347) | | Non-operating asset (gains) losses | $438 | $(6,106) | $6,544 | | Other miscellaneous items | $1,727 | $30,591 | $(28,864)| | Adjustments from FFO to Normalized FFO | $3,583 | $26,477| $(22,894)| - The significant decrease in 'Other miscellaneous items' variance is largely attributable to a reduction in insurance/litigation/environmental settlement or reserve expense, which was $30.48 million in Q1 2024, primarily related to a reserve increase for litigation over late fees104 Normalized FFO Guidance and Assumptions This section presents Equity Residential's Normalized FFO guidance for Q2 and full year 2025, along with key operating, transaction, debt, and capital expenditure assumptions supporting these projections Q2 and Full Year 2025 Normalized FFO Guidance Equity Residential reaffirmed its full-year 2025 Normalized FFO guidance and provided Q2 2025 guidance, anticipating continued same store revenue growth and stable physical occupancy, alongside planned transaction activity and capital expenditures Normalized FFO Guidance and Assumptions | Guidance Metric | Q2 2025 | Full Year 2025 (no change from previous) | | :---------------------------------------------------- | :---------------- | :--------------------------------------- | | Expected Normalized FFO Per Share | $0.96 to $1.00 | $3.90 to $4.00 | | 2025 Same Store Assumptions: | | | | Physical Occupancy | | 96.2% | | Revenue change | | 2.25% to 3.25% | | Expense change | | 3.5% to 4.5% | | NOI change | | 1.4% to 3.0% | | 2025 Transaction Assumptions: | | | | Consolidated rental acquisitions | | $1.5B | | Consolidated rental dispositions | | $1.0B | | Transaction Accretion (Dilution) | | (25 basis points) | | 2025 Debt Assumptions: | | | | Weighted average debt outstanding | | $8.20B to $8.40B | | Interest expense, net (on a Normalized FFO basis) | | $313.5M to $319.5M | | Capitalized interest | | $12.6M to $13.6M | | 2025 Capital Expenditures to Real Estate Assumptions for Residential Same Store Properties: | | | | NOI-Enhancing Capital Expenditures | | $130.0M | | Recurring Capital Expenditures | | $165.0M | | Total Capital Expenditures | | $295.0M | | 2025 Other Guidance Assumptions: | | | | Property management expense | | $139.0M to $141.0M | | General and administrative expense | | $60.0M to $64.0M | | Income (loss) from investments in unconsolidated entities | | $(3.0M) to $1.0M | | Debt offerings | | $500.0M to $1.0B | | Weighted average Common Shares and Units - Diluted | | 391.5M | - The company expects to spend approximately $95.8 million for apartment unit Renovation Expenditures on approximately 2,900 Residential same store apartment units at an average cost of approximately $33,000 per unit renovated in 2025110 - Income (loss) from investments in unconsolidated entities primarily consists of the company's share of Lease-Up NOI and interest expense, net, from recently completed unconsolidated development projects111 Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms This section provides comprehensive definitions and reconciliations for Equity Residential's non-GAAP financial measures and other key industry terms, ensuring clarity and comparability of reported financial performance Non-GAAP Financial Measures and Key Term Definitions This section provides definitions and reconciliations for various non-GAAP financial measures and other key terms used by Equity Residential, including FFO, Normalized FFO, EBITDAre, Normalized EBITDAre, NOI, and specific capital expenditure categories. These measures are presented to offer supplemental insights into the company's operating performance, credit strength, and asset valuation, while acknowledging they are not substitutes for GAAP metrics - Non-GAAP financial measures and other terms are provided to help understand the business, but their definitions and calculations may differ from other REITs and should not be considered alternatives to GAAP measures114 - FFO and Normalized FFO are recognized measures of performance in the real estate industry, useful for comparing operating performance by excluding gains/losses from sales, impairment write-downs, and real estate depreciation136138 - EBITDAre and Normalized EBITDAre are supplemental measures for evaluating the company's ability to incur and service debt, providing a comparison of credit strength between periods or companies by excluding non-comparable items128129 - NOI is the primary financial measure for evaluating apartment properties, defined as rental income less direct property operating expenses, and is helpful as a supplemental measure of operating performance146 Key Financial Metrics Per Share | Metric | Q1 2025 Per Share | Q1 2024 Per Share | Q2 2025 Expected Per Share | 2025 Expected Per Share | | :-------------------------- | :---------------- | :---------------- | :------------------------- | :---------------------- | | EPS – Diluted | $0.67 | $0.77 | $0.49 to $0.53 | $3.00 to $3.10 | | FFO per share – Diluted | $0.94 | $0.87 | $0.95 to $0.99 | $3.87 to $3.97 | | Normalized FFO per share – Diluted | $0.95 | $0.93 | $0.96 to $1.00 | $3.90 to $4.00 |
Equity Residential(EQR) - 2025 Q1 - Quarterly Results