Explanatory Note This report combines quarterly Form 10-Q filings for Equity Residential (EQR) and ERP Operating Limited Partnership (ERPOP), providing a consolidated view of their UPREIT operations - The report is a combined filing for Equity Residential (EQR) and ERP Operating Limited Partnership (ERPOP), which operate as a single business9 - EQR is a REIT and the general partner of ERPOP, owning approximately 97.0% of the partnership as of March 31, 2025. The remaining 3.0% is held by limited partners11 - All property ownership, development, and debt are held at the Operating Partnership (ERPOP) level. EQR's primary assets are its investment in ERPOP, and it has no material liabilities14 - The main differences in the financial statements between EQR and ERPOP relate to shareholders' equity, partners' capital, and noncontrolling interests15 PART I - FINANCIAL INFORMATION This section presents the unaudited consolidated financial statements and management's discussion and analysis for Equity Residential and ERPOP Item 1. Financial Statements This section presents unaudited consolidated financial statements for EQR and ERPOP, including balance sheets, income statements, cash flows, and detailed notes Financial Statements of Equity Residential EQR reported total assets of $20.56 billion and net income available to common shares of $256.2 million or $0.67 per diluted share for Q1 2025 EQR Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $20,562,185 | $20,834,176 | | Total Liabilities | $8,973,055 | $9,249,829 | | Total Shareholders' Equity | $11,047,330 | $11,044,560 | EQR Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Rental Income | $760,810 | $730,818 | | Net Gain on Sales of Real Estate | $154,152 | $188,185 | | Net Income | $264,798 | $305,032 | | Net Income Available to Common Shares | $256,236 | $293,796 | | Diluted EPS | $0.67 | $0.77 | EQR Consolidated Cash Flow Highlights (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $425,525 | $421,031 | | Net Cash from Investing Activities | $97,341 | $136,006 | | Net Cash used for Financing Activities | ($541,489) | ($500,472) | Financial Statements of ERP Operating Limited Partnership ERPOP's financial statements mirror EQR's, reporting $264.8 million net income for Q1 2025, with key distinctions in the capital section detailing Partners' Capital - ERPOP's total assets and liabilities are identical to EQR's, as EQR consolidates ERPOP and has no other material assets or liabilities1939 ERPOP Capital Structure (in thousands) | Capital Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | General Partner | $11,026,779 | $11,023,191 | | Limited Partners | $207,090 | $201,942 | | Total Partners' Capital | $11,254,420 | $11,246,502 | ERPOP Net Income Allocation (in thousands, except per unit data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $264,798 | $305,032 | | Net Income Available to Units | $263,338 | $302,071 | | Diluted EPU | $0.67 | $0.77 | Notes to Consolidated Financial Statements Notes detail the company's portfolio of 312 properties with 84,648 units, $7.85 billion total debt, 1.3% Same Store NOI growth, and ongoing litigation Property Portfolio as of March 31, 2025 | Ownership Type | Properties | Apartment Units | | :--- | :--- | :--- | | Wholly Owned | 294 | 80,010 | | Partially Owned – Consolidated | 12 | 2,656 | | Partially Owned – Unconsolidated | 6 | 1,982 | | Total | 312 | 84,648 | - In Q1 2025, the company disposed of 2 consolidated rental properties for $225.6 million, realizing a net gain of $154.2 million84 - The company has ongoing litigation, including an antitrust case concerning revenue management software and a class action in California regarding late fees. The company believes the lawsuits are without merit124126 Same Store vs. Non-Same Store NOI (in thousands) | Segment | Q1 2025 NOI | Q1 2024 NOI | % Change | | :--- | :--- | :--- | :--- | | Same Store | $480,559 | $474,485 | 1.3% | | Non-Same Store/Other | $24,526 | $12,776 | 92.0% | | Total NOI | $505,085 | $487,261 | 3.7% | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 performance, highlighting 1.3% Same Store NOI growth, $2.2 billion liquidity, and $0.67 diluted EPS, with Normalized FFO increasing to $0.95 per share Results of Operations Q1 2025 results show 1.3% Same Store NOI growth and 2.2% rental income increase, with diluted EPS declining to $0.67 primarily due to lower property sales gains Diluted EPS/Unit Reconciliation (Q1 2024 vs Q1 2025) | Component | Impact on EPS/Unit | | :--- | :--- | | 2024 Diluted EPS/Unit | $0.77 | | Property NOI | $0.04 | | Net gain/loss on property sales | ($0.09) | | Depreciation expense | ($0.08) | | Other | $0.03 | | 2025 Diluted EPS/Unit | $0.67 | Same Store Operating Performance (Q1 2025 vs Q1 2024) | Metric | % Change | | :--- | :--- | | Rental Income | 2.2% | | Operating Expenses | 4.1% | | NOI | 1.3% | - Operating performance was strong in New York and Washington, D.C., with continued improvement in San Francisco and Seattle. Expansion markets faced challenges from elevated new supply165166 - Same store operating expenses increased 4.1%, driven by higher real estate taxes (including 421-a tax abatement burnoffs in NYC), utilities, and on-site payroll costs161 Liquidity and Capital Resources The company maintains $2.2 billion in available liquidity and $7.85 billion total debt, with 93.7% fixed-rate, and declared a Q1 2025 dividend of $0.6925 per share - The company has approximately $2.2 billion in readily available liquidity as of March 31, 2025, primarily from its unsecured revolving credit facility168174 Debt Summary as of March 31, 2025 (in thousands) | Debt Type | Balance | % of Total | | :--- | :--- | :--- | | Secured | $1,593,803 | 20.3% | | Unsecured | $6,253,081 | 79.7% | | Total | $7,846,884 | 100.0% | | Fixed Rate | $7,350,892 | 93.7% | | Floating Rate | $495,992 | 6.3% | - The company declared a Q1 2025 dividend of $0.6925 per share, representing a 2.6% annualized increase over 2024178 - As of March 31, 2025, 89.9% of the company's real estate investment ($26.9 billion) was unencumbered, providing significant financial flexibility179 Funds From Operations and Normalized Funds From Operations Q1 2025 FFO available to common shares and units was $368.9 million, while Normalized FFO increased to $372.5 million, reflecting improved core operating performance FFO and Normalized FFO Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income Available to Common Shares/Units | $263,338 | $302,071 | | Depreciation | $256,746 | $225,695 | | Net (gain) on sales of real estate | ($154,152) | ($188,185) | | FFO available to Common Shares/Units | $368,935 | $338,419 | | Adjustments for non-recurring items | $3,583 | $26,477 | | Normalized FFO available to Common Shares/Units | $372,518 | $364,896 | - FFO and Normalized FFO are non-GAAP measures used to evaluate the operating performance of real estate companies by excluding items like depreciation and gains/losses on property sales185192 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no material changes to its market risk profile since the 2024 Annual Report on Form 10-K - There have been no material changes to the company's market risk profile since the 2024 year-end 10-K filing188 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures for both EQR and ERPOP were effective as of March 31, 2025189191 - No material changes to internal control over financial reporting occurred during the first quarter of 2025190193 PART II - OTHER INFORMATION This section covers other information including legal proceedings, risk factors, equity security sales, and exhibits Item 1. Legal Proceedings The company reports no material changes to legal proceedings disclosed in its 2024 Annual Report, with no expected material adverse effects - There have been no material changes to previously disclosed legal proceedings194 Item 1A. Risk Factors No material changes to risk factors have occurred since the 2024 Annual Report on Form 10-K filing - No material changes to risk factors have occurred since the 2024 year-end 10-K filing195 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds In Q1 2025, EQR issued 107,399 unregistered Common Shares in exchange for an equal number of OP Units from ERPOP limited partners - In Q1 2025, EQR issued 107,399 Common Shares in exchange for 107,399 OP Units on a one-for-one basis196 Item 6. Exhibits This section indexes exhibits filed with the Form 10-Q, including the 2025 Long-Term Incentive Plan Award Agreement and CEO/CFO certifications - The report includes exhibits such as the 2025 Long-Term Incentive Plan Award Agreement and CEO/CFO certifications203
Equity Residential(EQR) - 2025 Q1 - Quarterly Report