Equity Residential(EQR) - 2025 Q2 - Quarterly Report

Filing Information This section provides details on the Form 10-Q filing, including registrant information and filing status Form 10-Q Details This report is a Quarterly Report on Form 10-Q for June 30, 2025, filed by EQR and ERPOP - The report is a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2] - Equity Residential (EQR) is a large accelerated filer, while ERP Operating Limited Partnership (ERPOP) is a non-accelerated filer[6] Registrant Filing Status | Registrant | Filing Status | | :----------- | :------------ | | Equity Residential | Large accelerated filer | | ERP Operating Limited Partnership | Non-accelerated filer | Registrant Information EQR is a Maryland REIT and ERPOP an Illinois limited partnership, both having filed all required reports - Equity Residential (EQR) is a Maryland entity, and ERP Operating Limited Partnership (ERPOP) is an Illinois entity[3] - Both entities have filed all required reports and submitted every Interactive Data File during the preceding 12 months[4] Trading Information | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------------------------------------ | :---------------- | :---------------------------------------- | | Common Shares of Beneficial Interest, $0.01 Par Value (Equity Residential) | EQR | New York Stock Exchange | | 7.57% Notes due August 15, 2026 (ERP Operating Limited Partnership) | N/A | New York Stock Exchange | Explanatory Note This section clarifies the combined reporting structure of EQR and ERPOP Company Structure and Relationship This report combines EQR and ERPOP Form 10-Q filings, with EQR as general partner holding 97.0% ownership - The report combines Form 10-Q for Equity Residential (EQR) and ERP Operating Limited Partnership (ERPOP)[10] - EQR is the general partner of ERPOP, owning approximately 97.0% interest as of June 30, 2025, and exclusively controls ERPOP's management[12] - The Company operates as an UPREIT, where EQR contributes equity offering proceeds to ERPOP for OP Units, exchangeable for Common Shares on a one-for-one basis[13] Benefits of Combined Reporting Combined reporting enhances investor understanding, streamlines disclosure, and creates time and cost efficiencies - Combined reporting enhances investor understanding by presenting the business as a whole[14] - It eliminates duplicative disclosure, providing a more streamlined and readable presentation[14] - The combined report creates time and cost efficiencies[14] Financial Statement Differences and Presentation EQR's financial statements consolidate ERPOP, with key differences in equity and capital - EQR consolidates ERPOP for financial reporting, with EQR having no material assets or liabilities other than its investment in ERPOP, and all debt incurred by ERPOP[15][20] - Key differences between EQR and ERPOP financial statements are in shareholders' equity, partners' capital, and noncontrolling interests[16] - The report provides separate consolidated financial statements for EQR and ERPOP, a single set of notes, and a combined Management's Discussion and Analysis[17] PART I. FINANCIAL INFORMATION This section presents comprehensive financial statements and disclosures for EQR and ERPOP Item 1. Financial Statements of Equity Residential This section presents EQR's unaudited consolidated financial statements and key financial highlights EQR Consolidated Balance Sheet Highlights (Amounts in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :------------------ | :----- | | Total assets | $21,027,514 | $20,834,176 | +$193,338 | | Total liabilities | $9,501,134 | $9,249,829 | +$251,305 | | Total equity | $11,208,475 | $11,245,784 | -$37,309 | EQR Consolidated Statements of Operations Highlights (Amounts in thousands except per share data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Rental income | $1,529,637 | $1,464,981 | +$64,656 | | Total expenses | $1,109,354 | $1,029,039 | +$80,315 | | Net income available to Common Shares | $448,237 | $470,924 | -$22,687 | | Basic EPS | $1.18 | $1.24 | -$0.06 | | Diluted EPS | $1.18 | $1.24 | -$0.06 | EQR Consolidated Statements of Cash Flows Highlights (Amounts in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Net cash provided by operating activities | $785,070 | $817,968 | -$32,898 | | Net cash used for investing activities | $(518,995) | $(2,357) | -$516,638 | | Net cash used for financing activities | $(294,287) | $(817,185) | +$522,898 | | Cash and cash equivalents and restricted deposits, end of period | $131,954 | $138,421 | -$6,467 | Consolidated Balance Sheets This section presents EQR's consolidated balance sheets as of June 30, 2025, and December 31, 2024 | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Investment in real estate, net | $19,760,201 | $19,558,328 | | Total assets | $21,027,514 | $20,834,176 | | LIABILITIES AND EQUITY (in thousands) | | | | Total liabilities | $9,501,134 | $9,249,829 | | Total shareholders' equity | $11,008,221 | $11,044,560 | | Total equity | $11,208,475 | $11,245,784 | Consolidated Statements of Operations and Comprehensive Income This section presents EQR's consolidated statements of operations and comprehensive income | REVENUES (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | | :---------------------- | :----------------------------- | :----------------------------- | :-------------------------- | :-------------------------- | | Rental income | $1,529,637 | $1,464,981 | $768,827 | $734,163 | | EXPENSES (in thousands) | | | | | | Total expenses | $1,109,354 | $1,029,039 | $542,812 | $508,609 | | Net income | $463,583 | $488,587 | $198,785 | $183,555 | | Net income available to Common Shares | $448,237 | $470,924 | $192,001 | $177,128 | | Earnings per share – basic | $1.18 | $1.24 | $0.51 | $0.47 | | Earnings per share – diluted | $1.18 | $1.24 | $0.50 | $0.47 | | Comprehensive Income (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | | :---------------------------------- | :----------------------------- | :----------------------------- | :-------------------------- | :-------------------------- | | Net income | $463,583 | $488,587 | $198,785 | $183,555 | | Other comprehensive income (loss) | $(2,599) | $1,210 | $(1,781) | $600 | | Comprehensive income | $460,984 | $489,797 | $197,004 | $184,155 | | Comprehensive income attributable to controlling interests | $446,418 | $474,447 | $190,622 | $178,067 | Consolidated Statements of Cash Flows This section presents EQR's consolidated statements of cash flows | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $785,070 | $817,968 | | Net cash provided by (used for) investing activities | $(518,995) | $(2,357) | | Net cash provided by (used for) financing activities | $(294,287) | $(817,185) | | Net increase (decrease) in cash and cash equivalents and restricted deposits | $(28,212) | $(1,574) | | Cash and cash equivalents and restricted deposits, end of period | $131,954 | $138,421 | Consolidated Statements of Changes in Equity This section presents EQR's consolidated statements of changes in equity | Equity Component (in thousands) | Balance, beginning of period (Jan 1, 2025) | Net income attributable to controlling interests | Common Share distributions | Balance, end of period (June 30, 2025) | | :------------------------------ | :--------------------------------------- | :------------------------------------------- | :------------------------- | :------------------------------------- | | Preferred Shares | $17,155 | — | — | $17,155 | | Common Shares, $0.01 par value | $3,795 | — | — | $3,800 | | Paid in capital | $9,611,826 | — | — | $9,656,272 | | Retained earnings | $1,407,570 | $448,948 | $(526,428) | $1,329,379 | | Accumulated other comprehensive income (loss) | $4,214 | — | — | $1,615 | | Total Shareholders' Equity | $11,044,560 | $448,948 | $(526,428) | $11,008,221 | | Noncontrolling Interests (in thousands) | Balance, beginning of period (Jan 1, 2025) | Net income attributable to Noncontrolling Interests | Distributions to Noncontrolling Interests | Balance, end of period (June 30, 2025) | | :------------------------------------ | :--------------------------------------- | :------------------------------------------ | :---------------------------------------- | :------------------------------------- | | Operating Partnership | $201,942 | $12,328 | $(16,159) | $202,717 | | Partially Owned Properties | $(718) | $2,307 | $(4,052) | $(2,463) | | Distributions Declared per Common Share/Unit | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | | :------------------------------------------- | :----------------------------- | :----------------------------- | :-------------------------- | :-------------------------- | | Common Share/Unit | $1.385 | $1.35 | $0.6925 | $0.675 | Financial Statements of ERP Operating Limited Partnership This section provides ERPOP's unaudited consolidated financial statements, consistent with EQR's UPREIT structure ERPOP Consolidated Balance Sheet Highlights (Amounts in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :------------------ | :----- | | Total assets | $21,027,514 | $20,834,176 | +$193,338 | | Total liabilities | $9,501,134 | $9,249,829 | +$251,305 | | Total capital | $11,208,475 | $11,245,784 | -$37,309 | ERPOP Consolidated Statements of Operations Highlights (Amounts in thousands except per Unit data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Rental income | $1,529,637 | $1,464,981 | +$64,656 | | Total expenses | $1,109,354 | $1,029,039 | +$80,315 | | Net income attributable to controlling interests | $461,276 | $486,548 | -$25,272 | | Basic EPU | $1.18 | $1.24 | -$0.06 | | Diluted EPU | $1.18 | $1.24 | -$0.06 | ERPOP Consolidated Statements of Cash Flows Highlights (Amounts in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Net cash provided by operating activities | $785,070 | $817,968 | -$32,898 | | Net cash used for investing activities | $(518,995) | $(2,357) | -$516,638 | | Net cash used for financing activities | $(294,287) | $(817,185) | +$522,898 | | Cash and cash equivalents and restricted deposits, end of period | $131,954 | $138,421 | -$6,467 | Consolidated Balance Sheets This section presents ERPOP's consolidated balance sheets as of June 30, 2025, and December 31, 2024 | ASSETS (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Investment in real estate, net | $19,760,201 | $19,558,328 | | Total assets | $21,027,514 | $20,834,176 | | LIABILITIES AND CAPITAL (in thousands) | | | | Total liabilities | $9,501,134 | $9,249,829 | | Total partners' capital | $11,210,938 | $11,246,502 | | Total capital | $11,208,475 | $11,245,784 | Consolidated Statements of Operations and Comprehensive Income This section presents ERPOP's consolidated statements of operations and comprehensive income | REVENUES (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | | :---------------------- | :----------------------------- | :----------------------------- | :-------------------------- | :-------------------------- | | Rental income | $1,529,637 | $1,464,981 | $768,827 | $734,163 | | EXPENSES (in thousands) | | | | | | Total expenses | $1,109,354 | $1,029,039 | $542,812 | $508,609 | | Net income | $463,583 | $488,587 | $198,785 | $183,555 | | Net income attributable to controlling interests | $461,276 | $486,548 | $197,582 | $182,486 | | Earnings per Unit – basic | $1.18 | $1.24 | $0.51 | $0.47 | | Earnings per Unit – diluted | $1.18 | $1.24 | $0.50 | $0.47 | | Comprehensive Income (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Quarter Ended June 30, 2025 | Quarter Ended June 30, 2024 | | :---------------------------------- | :----------------------------- | :----------------------------- | :-------------------------- | :-------------------------- | | Net income | $463,583 | $488,587 | $198,785 | $183,555 | | Other comprehensive income (loss) | $(2,599) | $1,210 | $(1,781) | $600 | | Comprehensive income | $460,984 | $489,797 | $197,004 | $184,155 | | Comprehensive income attributable to controlling interests | $458,677 | $487,758 | $195,801 | $183,086 | Consolidated Statements of Cash Flows This section presents ERPOP's consolidated statements of cash flows | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $785,070 | $817,968 | | Net cash provided by (used for) investing activities | $(518,995) | $(2,357) | | Net cash provided by (used for) financing activities | $(294,287) | $(817,185) | | Net increase (decrease) in cash and cash equivalents and restricted deposits | $(28,212) | $(1,574) | | Cash and cash equivalents and restricted deposits, end of period | $131,954 | $138,421 | Consolidated Statements of Changes in Capital This section presents ERPOP's consolidated statements of changes in capital | Capital Component (in thousands) | Balance, beginning of period (Jan 1, 2025) | Net income available to Units | Distributions to Limited Partners | Balance, end of period (June 30, 2025) | | :------------------------------- | :--------------------------------------- | :---------------------------- | :-------------------------------- | :------------------------------------- | | Preference Units | $17,155 | — | — | $17,155 | | General Partner | $11,023,191 | $448,237 | $(526,428) | $10,989,451 | | Limited Partners | $201,942 | $12,328 | $(16,159) | $202,717 | | Accumulated other comprehensive income (loss) | $4,214 | — | — | $1,615 | | Total Partners' Capital | $11,246,502 | $460,565 | $(542,587) | $11,210,938 | | Noncontrolling Interests – Partially Owned Properties (in thousands) | Balance, beginning of period (Jan 1, 2025) | Net income attributable to Noncontrolling Interests | Distributions to Noncontrolling Interests | Balance, end of period (June 30, 2025) | | :--------------------------------------------------- | :--------------------------------------- | :------------------------------------------ | :---------------------------------------- | :------------------------------------- | | Partially Owned Properties | $(718) | $2,307 | $(4,052) | $(2,463) | Notes to Consolidated Financial Statements This section provides detailed notes to the consolidated financial statements for EQR and ERPOP 1. Business This note describes EQR's business, focusing on acquiring, developing, and managing residential properties through ERPOP - Equity Residential (EQR) is an S&P 500 company focused on acquiring, developing, and managing residential properties in dynamic cities, with operations conducted by ERP Operating Limited Partnership (ERPOP)[65] - As of June 30, 2025, the Company owned all or a portion of 319 properties, comprising 86,422 apartment units, across 10 states and the District of Columbia[67] Ownership Type | Ownership Type | Properties | Apartment Units | | :------------------------------ | :--------- | :-------------- | | Wholly Owned Properties | 302 | 82,054 | | Partially Owned Properties – Consolidated | 12 | 2,656 | | Partially Owned Properties – Unconsolidated | 5 | 1,712 | | Total | 319 | 86,422 | 2. Summary of Significant Accounting Policies This note outlines significant accounting policies used in preparing the unaudited condensed consolidated financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP for interim financial information and Form 10-Q instructions[68] - EQR is taxed as a REIT, and ERPOP is generally not liable for federal income taxes, while Taxable REIT subsidiaries (TRSs) incur federal and state income taxes[72] - The Company is evaluating the impact of new FASB standards on disaggregation of income statement expenses and SEC climate-related disclosure rules[73][74] 3. Equity, Capital and Other Interests This note details equity, capital, and other interests, including outstanding shares, units, and noncontrolling interests Equity Securities | Equity Securities | June 30, 2025 | June 30, 2024 | | :------------------------------------------ | :------------ | :------------ | | Common Shares outstanding at June 30, | 379,980,440 | 379,086,882 | | Units outstanding at June 30, | 11,606,272 | 11,663,842 | | Total Common Shares and Units outstanding at June 30, | 391,586,712 | 390,750,724 | | Units Ownership Interest in Operating Partnership | 3.0% | 3.0% | - Noncontrolling Interests – Operating Partnership (Limited Partners Capital) can exchange their Units for EQR Common Shares on a one-for-one basis[80] Redeemable Noncontrolling Interests (in thousands) | Redeemable Noncontrolling Interests (in thousands) | 2025 | 2024 | | :------------------------------------------------- | :----- | :----- | | Balance at January 1, | $338,563 | $289,248 | | Change in market value | $(19,568) | $39,058 | | Change in carrying value | $(1,090) | $(665) | | Balance at June 30, | $317,905 | $327,641 | 4. Real Estate This note provides information on the Company's real estate investments, including acquisitions, dispositions, and development projects Investment in Real Estate (in thousands) | Investment in Real Estate (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Investment in real estate, net | $19,760,201 | $19,558,328 | | Land | $5,636,458 | $5,606,531 | | Depreciable property | $24,711,740 | $24,039,412 | | Projects under development | $168,626 | $261,706 | - During the six months ended June 30, 2025, the Company acquired 8 consolidated rental properties (2,064 units) for $533.8 million and disposed of 3 consolidated rental properties (835 units) for $346.6 million, resulting in a net gain of $212.4 million[94][96] - The Company acquired its joint venture partner's 10% interest in a 270-unit apartment property, making it wholly owned, and recorded a real estate basis of $88.4 million[95] 5. Investments in Partially Owned Entities This note details the Company's investments in partially owned entities, including consolidated and unconsolidated joint ventures - The Company consolidates ERPOP and certain joint ventures identified as Variable Interest Entities (VIEs) where EQR is the primary beneficiary[98][99] Consolidated VIEs | Consolidated VIEs | Properties | Apartment Units | | :------------------------ | :--------- | :-------------- | | Operating Properties | 12 | 2,656 | | Projects Under Development | 1 | 440 | Investments in Unconsolidated Entities (in thousands) | Investments in Unconsolidated Entities (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------------------------- | :------------ | :---------------- | | Various Real Estate Holdings (VIE) | $34,615 | $34,510 | | Development and Lease-Up Projects and Land Held for Development (VIE) | $338,984 | $323,998 | | Real Estate Technology Funds/Companies (VIE) | $30,429 | $28,276 | | Total Investments in Unconsolidated Entities | $403,768 | $386,531 | 6. Restricted Deposits This note provides a breakdown of restricted deposits, including mortgage escrow and restricted cash Restricted Deposits (in thousands) | Restricted Deposits (in thousands) | June 30, 2025 | December 31, 2024 | | :--------------------------------- | :------------ | :---------------- | | Mortgage escrow deposits | $36,281 | $31,425 | | Restricted cash | $64,397 | $66,439 | | Total Restricted deposits | $100,678 | $97,864 | 7. Leases This note details the Company's lease activities, including residential and non-residential operating leases - The Company acts as a lessor for residential and non-residential operating leases[109] Lease Income Type (in thousands) | Lease Income Type (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------- | :----------------------------- | :----------------------------- | | Residential and non-residential rent | $1,399,450 | $1,346,918 | | Utility recoveries (RUBS income) | $51,432 | $45,891 | | Parking rent | $24,640 | $23,668 | | Total lease revenue | $1,478,143 | $1,412,979 | | Total other rental income | $51,494 | $52,002 | | Total Rental income | $1,529,637 | $1,464,981 | Residential Bad Debt (in thousands) | Residential Bad Debt (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :----------------------------- | :----------------------------- | | Bad debt, net | $14,990 | $17,139 | | % of residential rental income | 1.0% | 1.2% | 8. Debt This note provides information on the Company's debt structure, including mortgage notes, unsecured notes, and credit facilities - All debt is incurred by the Operating Partnership, not EQR[115] Debt Type (in thousands) | Debt Type (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Mortgage notes payable, net | $1,594,765 | $1,630,690 | | Notes, net | $5,994,914 | $5,947,376 | | Line of credit and commercial paper | $782,147 | $543,679 | | Total liabilities | $9,501,134 | $9,249,829 | - The Company has a $2.5 billion unsecured revolving credit facility maturing October 26, 2027, and a $1.5 billion unsecured commercial paper note program; $1.71 billion was available under the credit facility as of June 30, 2025[120][121][123] 9. Fair Value Measurements This note describes the Company's fair value measurements for financial instruments using a three-level valuation hierarchy - The Company uses a three-level valuation hierarchy for fair value measurements, based on the transparency of inputs[126] Financial Instrument | Financial Instrument | Carrying Value (June 30, 2025) | Estimated Fair Value (Level 2) (June 30, 2025) | | :------------------- | :----------------------------- | :--------------------------------------------- | | Mortgage notes payable, net | $1,594,765 | $1,522,268 | | Unsecured debt, net | $6,777,061 | $6,443,791 | | Total debt, net | $8,371,826 | $7,966,059 | - During the six months ended June 30, 2025, the Company paid $3.5 million to settle five forward starting swaps, with $2.3 million recognized as increased interest expense over the notes' term[129] 10. Earnings Per Share and Earnings Per Unit This note presents the calculation of basic and diluted EPS for EQR and EPU for ERPOP Metric | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net income available to Common Shares (EQR) | $448,237 | $470,924 | | Basic EPS (EQR) | $1.18 | $1.24 | | Diluted EPS (EQR) | $1.18 | $1.24 | | Net income available to Units (ERPOP) | $460,565 | $484,202 | | Basic EPU (ERPOP) | $1.18 | $1.24 | | Diluted EPU (ERPOP) | $1.18 | $1.24 | 11. Commitments and Contingencies This note outlines the Company's commitments for development projects and investments, and significant legal contingencies Projects Under Development | Projects Under Development | Projects | Apartment Units | Total Project Costs Remaining (in thousands) | | :------------------------- | :------- | :-------------- | :----------------------------------------- | | Consolidated | 1 | 440 | $63,546 | | Unconsolidated | 2 | 639 | $150,228 | | Total | 3 | 1,079 | $213,774 | - The Company has remaining commitments of approximately $21.0 million for real estate technology and other real estate fund investments[135] - Litigation accruals were approximately $42.1 million as of June 30, 2025, with the Company defending against antitrust and class action lawsuits[137][138][140] 12. Reportable Segments This note describes the Company's reportable segments, categorized as 'Same store' and 'Non-same store' - The Company's chief operating decision maker evaluates performance geographically by market on a same store basis and in total on a non-same store basis[142] - Reportable segments are defined as 'Same store' (stabilized properties) and 'Non-same store' (acquired, lease-up, or major renovation properties)[146] Metric (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Total NOI | $1,025,306 | $989,355 | | Same store NOI | $971,784 | $955,596 | | Non-same store NOI | $57,832 | $10,653 | | Total assets (June 30, 2025) | $21,027,514 | | | Capital expenditures (Six Months Ended June 30, 2025) | $144,368 | | 13. Subsequent Events This note confirms that no material subsequent events have occurred since June 30, 2025 - There have been no material subsequent events occurring since June 30, 2025[156] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's discussion and analysis of financial condition and results of operations Overview This overview describes EQR's business model and ERPOP's operational role - Equity Residential (EQR) focuses on acquiring, developing, and managing residential properties in dynamic cities, with ERP Operating Limited Partnership (ERPOP) conducting the multifamily property business[159] - EQR is the general partner of ERPOP, holding approximately 97.0% ownership, with all property ownership and business operations conducted through ERPOP[160] - The Company's business objectives and operating/investing strategies remain unchanged from the prior Annual Report on Form 10-K[163] 2025 Transactions This section summarizes the Company's property acquisition and disposition activities during 2025 Portfolio Activity | Portfolio Activity | Properties | Apartment Units | Purchase/Sales Price (in thousands) | | :----------------- | :--------- | :-------------- | :---------------------------------- | | Beginning Balance (12/31/2024) | 311 | 84,249 | | | Acquisitions: Consolidated Rental Properties | 8 | 2,064 | $533,843 | | Dispositions: Consolidated Rental Properties | (3) | (835) | $(346,600) | | Dispositions: Consolidated Land Parcels | — | — | $(4,300) | | Completed Developments – Consolidated | 2 | 495 | | | Completed Developments – Unconsolidated | 1 | 450 | | | Ending Balance (6/30/2025) | 319 | 86,422 | | - Acquired 8 consolidated rental properties in Atlanta for $533.8 million at a 5.1% acquisition cap rate[166] - Disposed of 3 consolidated rental properties and one consolidated land parcel, receiving net proceeds of $343.1 million[168] Comparison of Financial Results This section compares the Company's financial results for periods ended June 30, 2025 Metric | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net income | $463,583 | $488,587 | $(25,004) | (5.1)% | | Total NOI | $1,025,306 | $989,355 | $35,951 | 3.6% | | Rental income | $1,529,637 | $1,464,981 | $64,656 | 4.4% | | Total operating expenses | $504,331 | $475,626 | $28,705 | 6.0% | | Same store NOI | $971,784 | $955,596 | $16,188 | 1.7% | | Non-same store/other NOI | $53,522 | $33,759 | $19,763 | 58.5% | - Diluted EPS/EPU decreased by $0.06 for the six months ended June 30, 2025, primarily due to higher depreciation and lower net gain on property sales[170] - Interest expense increased by $14.4 million (10.8%) due to higher debt balances and rates, while loss from unconsolidated entities increased by $8.0 million (238.3%) due to development property losses[172][182][183] Same Store Results This section analyzes the performance of the Company's same store residential operations - Same store residential operations, representing 75,072 apartment units, performed well due to good demand, modest supply, a constructive job market, and high wage growth[184][187] Market/Metro Area | Market/Metro Area | Average Rental Rate Change (YoY) | Average Physical Occupancy Change (YoY) | Turnover Change (YoY) | | :---------------- | :------------------------------- | :-------------------------------------- | :-------------------- | | Los Angeles | 1.2% | 0.1% | (1.5%) | | San Francisco | 3.1% | 0.7% | (2.7%) | | Washington, D.C. | 4.4% | 0.0% | (0.6%) | | New York | 3.2% | 0.6% | (0.2%) | | Seattle | 3.2% | 0.2% | (1.0%) | | Denver | (2.6%) | (0.8%) | (0.4%) | | Other Expansion Markets | (4.2%) | (0.1%) | (5.2%) | | Total | 2.5% | 0.2% | (1.3%) | - Washington, D.C., New York, and San Francisco were the best-performing markets with strong occupancy, healthy pricing, and low turnover, while Expansion Markets faced challenges due to elevated new supply[187][188] Liquidity and Capital Resources This section discusses the Company's liquidity, capital resources, cash flow activities, and debt structure - The Company has approximately $1.7 billion in readily available liquidity, a strong balance sheet, and well-staggered debt maturities[191] Cash Flow Activity (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Operating activities | $785,070 | $817,968 | | Investing activities | $(518,995) | $(2,357) | | Financing activities | $(294,287) | $(817,185) | - Key financing activities included repaying $37.9 million in mortgage loans and $450.0 million in unsecured notes, receiving $238.5 million net from commercial paper, and issuing $500.0 million in new unsecured notes[200] - The Company declared a quarterly dividend/distribution of $0.6925 per share/unit for Q1 and Q2 2025, an annualized increase of 2.6% over 2024[202] Debt Summary as of June 30, 2025 (in thousands) | Debt Summary as of June 30, 2025 (in thousands) | Balances | % of Total | | :---------------------------------------------- | :------- | :--------- | | Secured Debt | $1,594,765 | 19.0% | | Unsecured Debt | $6,777,061 | 81.0% | | Total Debt | $8,371,826 | 100.0% | | Fixed Rate Debt | $7,397,342 | 88.3% | | Floating Rate Debt | $974,484 | 11.7% | Critical Accounting Policies and Estimates This section confirms critical accounting policies and estimates remain materially unchanged from the prior annual report - The Company's critical accounting policies and estimates have not changed materially from those reported in the Annual Report on Form 10-K for the year ended December 31, 2024[208] Funds From Operations and Normalized Funds From Operations This section provides a reconciliation and explanation of FFO and Normalized FFO Metric (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net income available to Common Shares and Units / Units | $460,565 | $484,202 | | FFO available to Common Shares and Units / Units | $751,568 | $704,767 | | Normalized FFO available to Common Shares and Units / Units | $759,308 | $745,038 | - FFO and Normalized FFO are supplemental measures of operating performance, excluding gains/losses from sales and impairment of depreciable real estate, and depreciation/amortization related to real estate[218] - Normalized FFO further excludes non-operating real estate asset impairment, pursuit cost write-offs, debt extinguishment gains/losses, and non-operating asset gains/losses[211] Item 3. Quantitative and Qualitative Disclosures about Market Risk The Company's and Operating Partnership's market risk profile is unchanged from the prior 10-K - The Company's and Operating Partnership's market risk has not changed materially from the information reported in their Annual Report on Form 10-K for the year ended December 31, 2024[214] Item 4. Controls and Procedures Both EQR and ERPOP concluded their disclosure controls were effective, with no material changes to internal control - Equity Residential's CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[215] - ERP Operating Limited Partnership's management also concluded that its disclosure controls and procedures were effective as of June 30, 2025[217] - No material changes to internal control over financial reporting were identified for either entity during the second quarter of 2025[216][219] PART II. OTHER INFORMATION This section covers other important information, including legal proceedings, risk factors, and equity sales Item 1. Legal Proceedings No changes to legal proceedings, and no pending litigation is expected to materially affect financial condition - No changes to legal proceedings discussed in the Annual Report on Form 10-K[220] - As of June 30, 2025, no pending or threatened litigation is expected to have a material adverse effect on the Company's financial condition[220] Item 1A. Risk Factors No material changes to risk factors previously discussed in the Company's Annual Report on Form 10-K - No material changes to risk factors discussed in the Annual Report on Form 10-K for the year ended December 31, 2024[221] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2025, EQR issued 117,000 Common Shares for OP Units, registered or exempt - During the quarter ended June 30, 2025, EQR issued 117,000 Common Shares in exchange for 117,000 OP Units held by limited partners of ERPOP[222] - These shares were either registered under the Securities Act of 1933 or issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act[222] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities during the reporting period - None[223] Item 4. Mine Safety Disclosures This item is not applicable to the Company - Not applicable[224] Item 5. Other Information No trustee or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement - No trustee or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the quarter ended June 30, 2025[225] Item 6. Exhibits This section lists all exhibits filed as part of this report, including forms of notes, agreements, and certifications - The exhibit index lists various documents filed as part of the report, including forms of notes, distribution agreements, and certifications[229] Signatures This section contains the official signatures for the report from EQR and ERPOP Signatures The report was signed on August 6, 2025, by Robert A. Garechana and Ian S. Kaufman for EQR and ERPOP - The report was signed on August 6, 2025, by Robert A. Garechana (EVP and CFO) and Ian S. Kaufman (SVP and Chief Accounting Officer) for both Equity Residential and ERP Operating Limited Partnership[233]