Equity Residential Reports Second Quarter 2023 Results

Rhea-AI Summary

Equity Residential reports Q2 2023 results, with a decrease in EPS but increases in FFO and NFFO per share. Same store revenue and expense growth in line with guidance. Company updates full year 2023 guidance.

Positive

• Same store revenue increased 5.5% in Q2 2023 compared to Q2 2022. Full year same store revenue growth guidance midpoint raised to 5.875%. Company locked interest rate on secured loans totaling $530.0 million at approximately 4.7%. Lower same store expenses expected in second half of the year. Company revised guidance for full year 2023 EPS, FFO per share, and NFFO per share.

Negative

• EPS decreased by 37.3% in Q2 2023 compared to Q2 2022.

Guidance Updated as Coastal Markets Experience Continued Strong Demand and Limited New Supply

CHICAGO--(BUSINESS WIRE)-- Equity Residential (NYSE: EQR) today reported results for the quarter and six months ended June 30, 2023.

Second Quarter 2023 Results

All per share results are reported as available to common shares/units on a diluted basis.

			Quarter Ended June 30,
			2023				2022				$ Change				% Change
	Earnings Per Share (EPS)		$	0.37			$	0.59			$	(0.22	)			(37.3	%)
	Funds from Operations (FFO) per share		$	0.93			$	0.89			$	0.04				4.5	%
	Normalized FFO (NFFO) per share		$	0.94			$	0.89			$	0.05				5.6	%

			Six Months Ended June 30,
			2023				2022				$ Change				% Change
	Earnings Per Share (EPS)		$	0.92			$	0.78			$	0.14				17.9	%
	Funds from Operations (FFO) per share		$	1.78			$	1.66			$	0.12				7.2	%
	Normalized FFO (NFFO) per share		$	1.82			$	1.66			$	0.16				9.6	%

“Same store revenue performance remains strong and in line with our May 2023 guidance increase. The supply picture in the coastal markets where we predominantly operate remains favorable, demand is steady and we see continued progress in mitigating delinquency in Southern California,” said Mark J. Parrell, Equity Residential’s President and CEO. “We also are pleased to again update our guidance as a result of pending favorable refinancing activity as well as second half same store expenses that we anticipate will be lower than previously expected.”

Recent Highlights

• Same store revenue increased 5.5% for the second quarter of 2023 compared to the second quarter of 2022. The Company increased its 2023 annual same store revenue growth guidance midpoint to 5.875% in May 2023.
• Same store expense growth for the second quarter of 2023 compared to the second quarter of 2022 was 5.5%. The Company expects lower same store expense growth in the second half of the year and has lowered its full year same store expense guidance midpoint down 25 basis points to 4.25% from 4.5%.
• The Company lowered its EPS guidance and increased its FFO and Normalized FFO per share guidance as described on page 2.
• In July 2023, the Company locked the interest rate on secured loans totaling $530.0 million, which, subject to customary conditions, are anticipated to close in September 2023. After the effect of the Company’s hedges, the economic rate on these ten-year loans will be approximately 4.7%. The proceeds from these loans will be used, along with funding from the Company’s Commercial Paper Program, to paydown the $800.0 million secured debt pool that matures in November 2023 and carries an interest rate of 4.21%. After this paydown, the Company will have no significant debt maturities, other than commercial paper, until June 2025.
• During the second quarter of 2023, the Company began the lease up of its new 312-unit development in Washington, D.C. The property is expected to stabilize in the third quarter of 2024 at a Development Yield of 5.7%.

Full Year 2023 Guidance

The Company has revised its guidance for its full year 2023 same store operating performance, EPS, FFO per share and Normalized FFO per share as listed below:

		Revised		Previous (1)		Change at Midpoint
Same Store (includes Residential and Non-Residential):
Physical Occupancy		96.0%		96.0%		0.0%
Revenue change		5.5% to 6.25%		5.5% to 6.25%		0.0%
Expense change		4.0% to 4.5%		4.0% to 5.0%		(0.25%)
Net Operating Income (NOI) change		6.3% to 7.0%		6.0% to 7.0%		0.15%
EPS		$1.95 to $2.01		$2.02 to $2.12		$(0.09)
FFO per share		$3.72 to $3.78		$3.69 to $3.79		$0.01
Normalized FFO per share		$3.77 to $3.83		$3.73 to $3.83		$0.02
(1) Represents the updated guidance provided in the Company's May 30, 2023 press release.

The change in the full year 2023 EPS guidance range is due primarily to higher expected depreciation expense, lower expected property sale gains and the items described below.

The change in the full year 2023 FFO per share guidance range is due primarily to higher expected other expenses and the items described below.

The change in the full year 2023 Normalized FFO per share guidance range is due primarily to:

		Positive/(Negative) Impact
		Revised Full Year 2023 vs. Previous Full Year 2023
Residential same store NOI		$	0.01
Interest expense, net			0.02
Other items			(0.01	)
Net		$	0.02

The Company has a glossary of defined terms and related reconciliations of Non-GAAP financial measures on pages 29 through 34 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 7, 31 and 32 of this release.

Results Per Share

The changes in EPS for the quarter and six months ended June 30, 2023 compared to the same periods of 2022 are due primarily to lower property sale gains and lower depreciation expense in the current period, the various adjustment items listed on page 27 of this release and the items described below.

The per share changes in FFO for the quarter and six months ended June 30, 2023 compared to the same periods of 2022 are due primarily to the various adjustment items listed on page 27 of this release and the items described below.

The per share changes in Normalized FFO are due primarily to:

		Positive/(Negative) Impact
		Second Quarter 2023 vs. Second Quarter 2022				June YTD 2023 vs. June YTD 2022
Residential same store NOI		$	0.06			$	0.17
Lease-Up NOI			0.01				0.02
2023 and 2022 transaction activity impact on NOI, net			(0.01	)			(0.02	)
Interest expense, net			0.01				0.03
Corporate overhead (1)			(0.02	)			(0.01	)
Other items (2)		–					(0.03	)
Net		$	0.05			$	0.16

(1)		Corporate overhead includes property management and general and administrative expenses.
(2)		Primarily represents the negative impact from property damage associated with the California rain storms that occurred earlier this year.

Same Store Results

The following table shows the total same store results for the periods presented.

		Second Quarter 2023 vs. Second Quarter 2022		Second Quarter 2023 vs. First Quarter 2023		June YTD 2023 vs. June YTD 2022
Apartment Units		77,545		78,531		76,952
Physical Occupancy		95.9% vs. 96.7%		95.9% vs. 95.9%		95.9% vs. 96.6%
Revenues		5.5%		1.7%		7.3%
Expenses		5.5%		(4.3%)		6.4%
NOI		5.4%		4.7%		7.7%

On page 11 of this release, the Company has provided a breakout of Residential and Non-Residential same store results with definitions that can be found on page 33 of this release. Non-Residential operations account for approximately 3.8% of total revenues for the six months ended June 30, 2023.

The following table reflects the detail of the change in Same Store Residential Revenues, which is presented on a GAAP basis showing Leasing Concessions on a straight-line basis.

		Second Quarter 2023 vs. Second Quarter 2022				Second Quarter 2023 vs. First Quarter 2023				June YTD 2023 vs. June YTD 2022
		% Change				% Change				% Change
Same Store Residential Revenues-
comparable period
Lease rates			7.3	%			1.1	%			8.2	%
Leasing Concessions			(0.1	%)			(0.1	%)			0.1	%
Vacancy gain (loss)			(0.9	%)			(0.1	%)			(0.8	%)
Bad Debt, Net (1)			(1.6	%)			0.3	%			(0.9	%)
Other (2)			0.8	%			0.6	%			0.7	%
Same Store Residential Revenues-
current period			5.5	%			1.8	%			7.3	%

(1)		Change in rental income due to bad debt write-offs and reserves, net of amounts (including governmental rental assistance payments) collected on previously written-off or reserved accounts. Comparable period changes in quarterly Bad Debt, Net will be volatile throughout 2023 primarily due to the timing of governmental rental assistance received in 2022. See page 13 for more detail.
(2)		Includes ancillary income, utility recoveries, early lease termination income, miscellaneous income and other items.

See page 12 for detail and reconciliations of Same Store Residential Revenues on a GAAP basis to Same Store Residential Revenues with Leasing Concessions on a cash basis.

Residential Same Store Operating Statistics

The following table includes select operating metrics for Residential Same Store Properties (for 76,952 same store apartment units):

		July 2023 (1)		Q2 2023		Q1 2023
Physical Occupancy		95.8%		95.9%		95.9%
Percentage of Residents Renewing by quarter/month		54.0%		57.0%		59.0%
New Lease Change		2.2%		2.3%		1.3%
Renewal Rate Achieved		5.9%		5.9%		6.1%
Blended Rate		4.2%		4.3%		3.9%
(1) July 2023 results are preliminary.

Investment Activity

The Company acquired two operating properties during the second quarter of 2023 - a recently completed 262-unit apartment property in Atlanta, which is currently in lease up, for approximately $78.6 million at a stabilized Acquisition Cap Rate of 6.6% (5.7% when removing certain real estate tax benefits that will reduce over time) and a 287-unit property in suburban Denver built in 2022, for approximately $108.0 million at an Acquisition Cap Rate of 5.0%. The Company did not acquire any properties during the first quarter of 2023.

The Company did not sell any properties during the second quarter of 2023. During the first quarter of 2023, the Company sold a small portfolio of seven properties in Los Angeles with an average age of 25 years, consisting of 247 apartment units, for an aggregate sale price of approximately $135.3 million at a weighted average Disposition Yield of 5.3%, generating an Unlevered IRR of 8.7%.

Capital Markets Activity

In July 2023, the Company locked the interest rate on secured loans totaling $530.0 million, which, subject to customary conditions, are anticipated to close in September 2023. After the effect of the Company’s hedges, the economic rate on these ten-year loans will be approximately 4.7%. The proceeds from these loans will be used, along with funding from the Company’s Commercial Paper Program, to paydown the $800.0 million secured debt pool that matures in November 2023 and carries an interest rate of 4.21%. After this paydown, the Company will have no significant debt maturities, other than commercial paper supported by its revolving credit facility due in 2027, until June 2025.

Third Quarter 2023 Guidance

The Company has established guidance ranges for the third quarter of 2023 EPS, FFO per share and Normalized FFO per share as listed below:

		Q3 2023 Guidance
EPS		$0.59 to $0.63
FFO per share		$0.94 to $0.98
Normalized FFO per share		$0.95 to $0.99

The difference between the second quarter of 2023 actual EPS of $0.37 and the third quarter of 2023 EPS guidance midpoint of $0.61 is due primarily to higher expected property sale gains and the items described below.

The difference between the second quarter of 2023 actual FFO of $0.93 per share and the third quarter of 2023 FFO guidance midpoint of $0.96 per share is due primarily to the items described below.

The difference between the second quarter of 2023 actual Normalized FFO of $0.94 per share and the third quarter of 2023 Normalized FFO guidance midpoint of $0.97 per share is due primarily to:

		Positive/(Negative) Impact
		Third Quarter 2023 vs. Second Quarter 2023
Residential same store NOI		$	0.01
Corporate overhead			0.02
Net		$	0.03

About Equity Residential

Equity Residential is committed to creating communities where people thrive. The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract affluent long-term renters. Equity Residential owns or has investments in 304 properties consisting of 80,212 apartment units, with an established presence in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin. For more information on Equity Residential, please visit our website at www.equityapartments.com.

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements and information within the meaning of the federal securities laws. These statements are based on current expectations, estimates, projections and assumptions made by management. While Equity Residential’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, including, without limitation, changes in general market conditions, including the rate of job growth and cost of labor and construction material, the level of new multifamily construction and development, government regulations and competition. These and other risks and uncertainties are described under the heading “Risk Factors” in our Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityapartments.com. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Forward-looking statements are not guarantees of future performance, results or events. Equity Residential assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

A live web cast of the Company’s conference call discussing these results will take place tomorrow, Friday, July 28, 2023 at 10:00 a.m. CT. Please visit the Investor section of the Company’s website at www.equityapartments.com for the webcast link.

Equity Residential Consolidated Statements of Operations (Amounts in thousands except per share data) (Unaudited)
		Six Months Ended June 30,								Quarter Ended June 30,
		2023				2022				2023				2022
REVENUES
Rental income		$	1,422,397			$	1,340,378			$	717,309			$	687,030
EXPENSES
Property and maintenance			262,350				241,229				124,771				116,355
Real estate taxes and insurance			209,749				202,538				103,080				101,850
Property management			62,145				57,306				30,679				26,559
General and administrative			35,041				33,661				18,876				16,423
Depreciation			437,185				453,767				221,355				223,806
Total expenses			1,006,470				988,501				498,761				484,993
Net gain (loss) on sales of real estate properties			100,122				107,795				(87	)			107,897
Operating income			516,049				459,672				218,461				309,934
Interest and other income			3,669				4,124				2,131				596
Other expenses			(15,559	)			(5,436	)			(6,564	)			(2,380	)
Interest:
Expense incurred, net			(131,991	)			(144,681	)			(65,590	)			(71,889	)
Amortization of deferred financing costs			(3,996	)			(4,201	)			(2,017	)			(2,124	)
Income before income and other taxes, income (loss) from
investments in unconsolidated entities and net gain (loss)
on sales of land parcels			368,172				309,478				146,421				234,137
Income and other tax (expense) benefit			(634	)			(573	)			(336	)			(291	)
Income (loss) from investments in unconsolidated entities			(2,605	)			(2,429	)			(1,223	)			(1,168	)
Net income			364,933				306,476				144,862				232,678
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership			(11,613	)			(10,027	)			(4,554	)			(7,633	)
Partially Owned Properties			(2,082	)			(1,583	)			(1,105	)			(944	)
Net income attributable to controlling interests			351,238				294,866				139,203				224,101
Preferred distributions			(1,545	)			(1,545	)			(773	)			(773	)
Net income available to Common Shares		$	349,693			$	293,321			$	138,430			$	223,328
Earnings per share – basic:
Net income available to Common Shares		$	0.92			$	0.78			$	0.37			$	0.59
Weighted average Common Shares outstanding			378,492				375,640				378,642				375,769
Earnings per share – diluted:
Net income available to Common Shares		$	0.92			$	0.78			$	0.37			$	0.59
Weighted average Common Shares outstanding			391,063				389,463				391,187				389,363
Distributions declared per Common Share outstanding		$	1.325			$	1.25			$	0.6625			$	0.625

Equity Residential Consolidated Statements of Funds From Operations and Normalized Funds From Operations (Amounts in thousands except per share and Unit data) (Unaudited)
		Six Months Ended June 30,								Quarter Ended June 30,
		2023				2022				2023				2022
Net income		$	364,933			$	306,476			$	144,862			$	232,678
Net (income) loss attributable to Noncontrolling Interests – Partially
Owned Properties			(2,082	)			(1,583	)			(1,105	)			(944	)
Preferred distributions			(1,545	)			(1,545	)			(773	)			(773	)
Net income available to Common Shares and Units			361,306				303,348				142,984				230,961
Adjustments:
Depreciation			437,185				453,767				221,355				223,806
Depreciation – Non-real estate additions			(2,259	)			(2,114	)			(1,103	)			(1,062	)
Depreciation – Partially Owned Properties			(1,055	)			(1,554	)			(510	)			(661	)
Depreciation – Unconsolidated Properties			1,226				1,240				594				620
Net (gain) loss on sales of unconsolidated entities - operating
assets			—				(9	)			—				—
Net (gain) loss on sales of real estate properties			(100,122	)			(107,795	)			87				(107,897	)
FFO available to Common Shares and Units			696,281				646,883				363,407				345,767
Adjustments (see note for additional detail):
Write-off of pursuit costs			1,993				2,515				661				1,052
Debt extinguishment and preferred share redemption (gains)
losses			47				469				47				469
Non-operating asset (gains) losses			1,031				(1,330	)			317				312
Other miscellaneous items			11,343				(185	)			5,051				186
Normalized FFO available to Common Shares and Units		$	710,695			$	648,352			$	369,483			$	347,786
FFO		$	697,826			$	648,428			$	364,180			$	346,540
Preferred distributions			(1,545	)			(1,545	)			(773	)			(773	)
FFO available to Common Shares and Units		$	696,281			$	646,883			$	363,407			$	345,767
FFO per share and Unit – basic		$	1.79			$	1.67			$	0.93			$	0.89
FFO per share and Unit – diluted		$	1.78			$	1.66			$	0.93			$	0.89
Normalized FFO		$	712,240			$	649,897			$	370,256			$	348,559
Preferred distributions			(1,545	)			(1,545	)			(773	)			(773	)
Normalized FFO available to Common Shares and Units		$	710,695			$	648,352			$	369,483			$	347,786
Normalized FFO per share and Unit – basic		$	1.82			$	1.67			$	0.95			$	0.90
Normalized FFO per share and Unit – diluted		$	1.82			$	1.66			$	0.94			$	0.89
Weighted average Common Shares and Units outstanding – basic			389,942				387,531				390,032				387,664
Weighted average Common Shares and Units outstanding – diluted			391,063				389,463				391,187				389,363

Note: See Adjustments from FFO to Normalized FFO for additional detail regarding the adjustments from FFO to Normalized FFO. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for the definitions of non-GAAP financial measures and other terms as well as the reconciliations of EPS to FFO per share and Normalized FFO per share.

Equity Residential Consolidated Balance Sheets (Amounts in thousands except for share amounts) (Unaudited)
		June 30,				December 31,
		2023				2022
ASSETS
Land		$	5,579,211			$	5,580,878
Depreciable property			22,697,597				22,334,369
Projects under development			50,916				112,940
Land held for development			61,334				60,567
Investment in real estate			28,389,058				28,088,754
Accumulated depreciation			(9,428,549	)			(9,027,850	)
Investment in real estate, net			18,960,509				19,060,904
Investments in unconsolidated entities1			304,710				279,024
Cash and cash equivalents			35,701				53,869
Restricted deposits			88,941				83,303
Right-of-use assets			463,704				462,956
Other assets			292,164				278,206
Total assets		$	20,145,729			$	20,218,262
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net		$	1,913,069			$	1,953,438
Notes, net			5,345,373				5,342,329
Line of credit and commercial paper			184,474				129,955
Accounts payable and accrued expenses			118,316				96,028
Accrued interest payable			66,238				66,310
Lease liabilities			313,866				308,748
Other liabilities			294,263				306,941
Security deposits			69,427				68,940
Distributions payable			258,841				244,621
Total liabilities			8,563,867				8,517,310
Commitments and contingencies
Redeemable Noncontrolling Interests – Operating Partnership			355,319				318,273
Equity:
Shareholders' equity:
Preferred Shares of beneficial interest, $0.01 par value;
100,000,000 shares authorized; 745,600 shares issued and
outstanding as of June 30, 2023 and December 31, 2022			37,280				37,280
Common Shares of beneficial interest, $0.01 par value;
1,000,000,000 shares authorized; 379,032,722 shares issued
and outstanding as of June 30, 2023 and 378,429,708
shares issued and outstanding as of December 31, 2022			3,790				3,784
Paid in capital			9,472,628				9,476,085
Retained earnings			1,506,460				1,658,837
Accumulated other comprehensive income (loss)			3,708				(2,547	)
Total shareholders’ equity			11,023,866				11,173,439
Noncontrolling Interests:
Operating Partnership			207,405				209,961
Partially Owned Properties			(4,728	)			(721	)
Total Noncontrolling Interests			202,677				209,240
Total equity			11,226,543				11,382,679
Total liabilities and equity		$	20,145,729			$	20,218,262
1 Includes $242.4 million and $218.0 million in unconsolidated development projects as of June 30, 2023 and December 31, 2022, respectively. See Development and Lease-Up Projects for additional detail on unconsolidated projects.

Equity Residential Portfolio Summary As of June 30, 2023

										% of Stabilized				Average
						Apartment				Budgeted				Rental
Markets/Metro Areas		Properties				Units				NOI				Rate
Established Markets:
Los Angeles			59				15,012				17.7	%		$	2,876
Orange County			13				4,028				5.2	%			2,787
San Diego			12				2,878				4.0	%			2,997
Subtotal – Southern California			84				21,918				26.9	%			2,875
San Francisco			44				11,790				15.8	%			3,285
Washington, D.C.			48				15,028				15.6	%			2,592
New York			34				8,536				13.9	%			4,488
Boston			27				7,170				11.5	%			3,477
Seattle			46				9,526				11.0	%			2,587
Subtotal – Established Markets			283				73,968				94.7	%			3,092
Expansion Markets:
Denver			9				2,785				2.8	%			2,417
Atlanta			5				1,477				1.4	%			2,196
Dallas/Ft. Worth			4				1,241				0.7	%			1,875
Austin			3				741				0.4	%			1,831
Subtotal – Expansion Markets			21				6,244				5.3	%			2,189
Total			304				80,212				100.0	%		$	3,022

		Properties		Apartment Units
Wholly Owned Properties		289		76,986
Partially Owned Properties – Consolidated		15		3,226
		304		80,212
Note: Projects under development are not included in the Portfolio Summary until construction has been completed.

Equity Residential

Portfolio Rollforward Q2 2023 ($ in thousands)
		Properties				Apartment Units				Purchase Price				Acquisition Cap Rate
	3/31/2023		301				79,351
Acquisitions:
Consolidated Rental Properties			1				287			$	108,000				5.0	%
Consolidated Rental Properties – Not Stabilized (1)			1				262			$	78,600				6.6	%
Completed Developments – Consolidated			1				312
	6/30/2023		304				80,212

Portfolio Rollforward 2023 ($ in thousands)
		Properties				Apartment Units				Purchase Price				Acquisition Cap Rate
	12/31/2022		308				79,597
Acquisitions:
Consolidated Rental Properties			1				287			$	108,000				5.0	%
Consolidated Rental Properties – Not Stabilized (1)			1				262			$	78,600				6.6	%
										Sales Price				Disposition Yield
Dispositions:
Consolidated Rental Properties			(7	)			(247	)		$	(135,300	)			(5.3	%)
Completed Developments – Consolidated			1				312
Configuration Changes			—				1
	6/30/2023		304				80,212

(1)

The Company acquired one property in the Atlanta market in the second quarter of 2023 that is in lease-up and is expected to stabilize in its second year of ownership at the Acquisition Cap Rate listed above (5.7% when removing certain real estate tax benefits that will reduce over time).

Equity Residential

Second Quarter 2023 vs. Second Quarter 2022 Same Store Results/Statistics Including 77,545 Same Store Apartment Units ($ in thousands except for Average Rental Rate)
Second Quarter 2023																				Second Quarter 2022
		Residential				% Change		Non- Residential				% Change		Total				% Change				Residential				Non- Residential				Total
Revenues		$	672,595		(1)	5.5%		$	24,849			4.3%		$	697,444			5.5%		Revenues		$	637,547			$	23,827			$	661,374
Expenses		$	212,114			5.3%		$	6,920			14.2%		$	219,034			5.5%		Expenses		$	201,520			$	6,058			$	207,578
NOI		$	460,481			5.6%		$	17,929			0.9%		$	478,410			5.4%		NOI		$	436,027			$	17,769			$	453,796
Average Rental Rate		$	3,017			6.4%														Average Rental Rate		$	2,836
Physical Occupancy			95.9	%		(0.8%)														Physical Occupancy			96.7	%
Turnover			11.6	%		0.4%														Turnover			11.2	%

Second Quarter 2023 vs. First Quarter 2023 Same Store Results/Statistics Including 78,531 Same Store Apartment Units ($ in thousands except for Average Rental Rate)
Second Quarter 2023																				First Quarter 2023
		Residential				% Change		Non- Residential				% Change		Total				% Change				Residential				Non- Residential				Total
Revenues		$	683,155		(1)	1.8%		$	26,456			(1.8%)		$	709,611			1.7%		Revenues		$	670,793			$	26,951			$	697,744
Expenses		$	215,239			(4.5%)		$	7,368			2.3%		$	222,607			(4.3%)		Expenses		$	225,376			$	7,202			$	232,578
NOI		$	467,916			5.1%		$	19,088			(3.3%)		$	487,004			4.7%		NOI		$	445,417			$	19,749			$	465,166
Average Rental Rate		$	3,026			1.8%														Average Rental Rate		$	2,972
Physical Occupancy			95.9	%		0.0%														Physical Occupancy			95.9	%
Turnover			11.6	%		2.5%														Turnover			9.1	%

June YTD 2023 vs. June YTD 2022 Same Store Results/Statistics Including 76,952 Same Store Apartment Units ($ in thousands except for Average Rental Rate)
June YTD 2023																				June YTD 2022
		Residential				% Change		Non- Residential				% Change		Total				% Change				Residential				Non- Residential				Total
Revenues		$	1,324,993		(1)	7.3%		$	50,085			7.0%		$	1,375,078			7.3%		Revenues		$	1,235,134			$	46,813			$	1,281,947
Expenses		$	430,638			6.2%		$	13,613			11.6%		$	444,251			6.4%		Expenses		$	405,484			$	12,202			$	417,686
NOI		$	894,355			7.8%		$	36,472			5.4%		$	930,827			7.7%		NOI		$	829,650			$	34,611			$	864,261
Average Rental Rate		$	2,995			8.0%														Average Rental Rate		$	2,772
Physical Occupancy			95.9	%		(0.7%)														Physical Occupancy			96.6	%
Turnover			20.6	%		0.4%														Turnover			20.2	%

(1)

See page 12 for Same Store Residential Revenues with Leasing Concessions reflected on a cash basis. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional detail.

Equity Residential

Same Store Residential Revenues – GAAP to Cash Basis (1) ($ in thousands)
	Second Quarter 2023 vs. Second Quarter 2022								Second Quarter 2023 vs. First Quarter 2023								June YTD 2023 vs. June YTD 2022
	77,545 Same Store Apartment Units								78,531 Same Store Apartment Units								76,952 Same Store Apartment Units
	Q2 2023				Q2 2022				Q2 2023				Q1 2023				June YTD 2023				June YTD 2022
Same Store Residential Revenues (GAAP Basis)	$	672,595			$	637,547			$	683,155			$	670,793			$	1,324,993			$	1,235,134
Leasing Concessions amortized		2,705				2,156				3,256				2,846				4,744				6,005
Leasing Concessions granted		(3,921	)			(1,503	)			(4,125	)			(4,241	)			(7,766	)			(3,057	)
Same Store Residential Revenues with Leasing
Concessions on a cash basis	$	671,379			$	638,200			$	682,286			$	669,398			$	1,321,971			$	1,238,082
% change - GAAP revenue		5.5	%							1.8	%							7.3	%
% change - cash revenue		5.2	%							1.9	%							6.8	%
(1) See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional detail.

Same Store Net Operating Income By Quarter Including 76,952 Same Store Apartment Units ($ in thousands)
		Q2 2023				Q1 2023				Q4 2022				Q3 2022				Q2 2022
Same store revenues		$	693,403			$	681,675			$	676,011			$	671,160			$	657,582
Same store expenses			217,461				226,790				210,795				214,495				206,152
Same store NOI (includes Residential and Non-Residential)		$	475,942			$	454,885			$	465,216			$	456,665			$	451,430

Equity Residential

Same Store Resident/Tenant Accounts Receivable Balances Including 76,952 Same Store Apartment Units ($ in thousands)
		Residential								Non-Residential
Balance Sheet (Other assets):		June 30, 2023				March 31, 2023				June 30, 2023				March 31, 2023
Resident/tenant accounts receivable balances		$	26,628			$	32,408			$	2,389			$	2,414
Allowance for doubtful accounts			(22,335	)			(28,430	)			(1,383	)			(1,500	)
Net receivable balances		$	4,293			$	3,978			$	1,006			$	914
Straight-line receivable balances		$	6,067		(1)	$	4,861			$	13,546			$	13,607

(1)		Total same store Residential Leasing Concessions granted in the second quarter of 2023 were approximately $3.9 million. The straight-line receivable balance of $6.1 million reflects Residential Leasing Concessions that the Company expects will be primarily recognized as a reduction of rental revenues in the remainder of 2023 and the first half of 2024.

Same Store Residential Bad Debt Including 76,952 Same Store Apartment Units ($ in thousands)
Income Statement (Rental income):		Q2 2023				Q1 2023				Q2 2022
Bad debts before governmental rental assistance		$	9,504			$	11,866			$	13,287
Governmental rental assistance received			(655	)			(1,167	)			(14,398	)
Bad Debt, Net		$	8,849			$	10,699			$	(1,111	)
Bad Debt, Net as a % of Same Store Residential Revenues			1.3	%			1.6	%			(0.2	%)

Equity Residential Second Quarter 2023 vs. Second Quarter 2022 Same Store Residential Results/Statistics by Market

																						Increase (Decrease) from Prior Year's Quarter
Markets/Metro Areas		Apartment Units				Q2 2023 % of Actual NOI				Q2 2023 Average Rental Rate				Q2 2023 Weighted Average Physical Occupancy %				Q2 2023 Turnover				Revenues				Expenses				NOI				Average Rental Rate				Physical Occupancy				Turnover
Los Angeles			14,415				17.8	%		$	2,861				95.0	%			11.2	%			(0.2	%)	(1)		8.5	%			(3.5	%)			1.8	%			(1.9	%)			2.0	%
Orange County			4,028				5.5	%			2,787				95.9	%			10.4	%			3.4	%	(1)		10.9	%			1.5	%			4.8	%			(1.3	%)			1.6	%
San Diego			2,878				4.1	%			2,997				95.8	%			9.9	%			7.6	%			10.2	%			6.9	%			9.2	%			(1.5	%)			0.2	%
Subtotal – Southern California			21,321				27.4	%			2,865				95.3	%			10.9	%			1.5	%			9.0	%			(1.1	%)			3.4	%			(1.7	%)			1.7	%
San Francisco			11,368				16.4	%			3,288				95.6	%			10.9	%			3.1	%	(1)		6.7	%			1.6	%			4.3	%			(1.1	%)			1.5	%
Washington, D.C.			14,400				15.9	%			2,578				96.8	%			10.6	%			6.3	%			1.4	%			8.9	%			6.3	%			0.0	%			(0.8	%)
New York			8,536				14.2	%			4,488				97.1	%			10.1	%			13.3	%			3.6	%			21.2	%			13.4	%			0.0	%			(1.8	%)
Seattle			9,525				10.9	%			2,587				95.1	%			14.4	%			4.2	%			3.7	%			4.4	%			4.4	%			(0.2	%)			(0.2	%)
Boston			6,700				10.3	%			3,405				96.5	%			11.3	%			8.3	%			3.4	%			10.4	%			8.7	%			(0.3	%)			(0.7	%)
Denver			2,498				2.7	%			2,420				96.2	%			17.2	%			5.7	%			6.0	%			5.5	%			6.2	%			(0.5	%)			(0.5	%)
Other Expansion Markets			3,197				2.2	%			1,990				94.9	%			14.6	%			5.1	%			12.7	%			(0.4	%)			7.0	%			(1.9	%)			2.5	%
Total			77,545				100.0	%		$	3,017				95.9	%			11.6	%			5.5	%			5.3	%			5.6	%			6.4	%			(0.8	%)			0.4	%

(1)

Excluding Bad Debt, Net, which includes the positive impact of governmental rental assistance in the second quarter of 2022, same store revenue growth would have been 5.6%, 6.9% and 4.6% for Los Angeles, Orange County and San Francisco, respectively.

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.2% of total revenues for the six months ended June 30, 2023.

Equity Residential Second Quarter 2023 vs. First Quarter 2023 Same Store Residential Results/Statistics by Market

																						Increase (Decrease) from Prior Quarter
Markets/Metro Areas		Apartment Units				Q2 2023 % of Actual NOI				Q2 2023 Average Rental Rate				Q2 2023 Weighted Average Physical Occupancy %				Q2 2023 Turnover				Revenues				Expenses				NOI				Average Rental Rate				Physical Occupancy				Turnover
Los Angeles			14,415				17.5	%		$	2,861				95.0	%			11.2	%			2.5	%			(5.3	%)			6.3	%			3.1	%			(0.5	%)			1.3	%
Orange County			4,028				5.3	%			2,787				95.9	%			10.4	%			2.3	%			0.0	%			3.0	%			2.6	%			(0.3	%)			3.1	%
San Diego			2,878				4.1	%			2,997				95.8	%			9.9	%			2.5	%			(1.3	%)			3.7	%			2.1	%			0.4	%			0.2	%
Subtotal – Southern California			21,321				26.9	%			2,865				95.3	%			10.9	%			2.5	%			(4.1	%)			5.2	%			2.9	%			(0.3	%)			1.5	%
San Francisco			11,568				16.4	%			3,283				95.5	%			10.9	%			1.3	%			(5.4	%)			4.4	%			1.3	%			(0.1	%)			1.3	%
Washington, D.C.			14,716				16.1	%			2,587				96.8	%			10.6	%			2.2	%			(4.7	%)			5.7	%			1.9	%			0.2	%			3.2	%
New York			8,536				14.0	%			4,488				97.1	%			10.1	%			1.6	%			(3.9	%)			5.8	%			1.3	%			0.3	%			2.6	%
Seattle			9,525				10.7	%			2,587				95.1	%			14.4	%			0.3	%			2.8	%			(0.7	%)			0.3	%			0.0	%			3.3	%
Boston			7,170				11.1	%			3,477				96.5	%			11.6	%			3.0	%			(9.2	%)			8.8	%			2.0	%			1.0	%			3.6	%
Denver			2,498				2.7	%			2,420				96.2	%			17.2	%			1.4	%			(9.1	%)			6.2	%			1.5	%			(0.1	%)			6.1	%
Other Expansion Markets			3,197				2.1	%			1,990				94.9	%			14.6	%			1.0	%			(7.3	%)			9.1	%			1.0	%			0.0	%			2.2	%
Total			78,531				100.0	%		$	3,026				95.9	%			11.6	%			1.8	%			(4.5	%)			5.1	%			1.8	%			0.0	%			2.5	%

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.2% of total revenues for the six months ended June 30, 2023.

Equity Residential June YTD 2023 vs. June YTD 2022 Same Store Residential Results/Statistics by Market

																						Increase (Decrease) from Prior Year
Markets/Metro Areas		Apartment Units				June YTD 23 % of Actual NOI				June YTD 23 Average Rental Rate				June YTD 23 Weighted Average Physical Occupancy %				June YTD 23 Turnover				Revenues				Expenses				NOI				Average Rental Rate				Physical Occupancy				Turnover
Los Angeles			14,415				17.8	%		$	2,818				95.2	%			21.1	%			2.8	%	(1)		9.6	%			0.0	%			4.6	%			(1.7	%)			3.5	%
Orange County			4,028				5.5	%			2,752				96.1	%			17.8	%			6.5	%	(1)		10.5	%			5.4	%			7.7	%			(1.1	%)			2.7	%
San Diego			2,706				3.9	%			2,931				95.6	%			19.1	%			7.2	%			7.7	%			7.0	%			8.8	%			(1.5	%)			0.7	%
Subtotal – Southern California			21,149				27.2	%			2,820				95.4	%			20.2	%			4.1	%			9.5	%			2.0	%			5.7	%			(1.6	%)			2.9	%
San Francisco			11,368				16.5	%			3,265				95.6	%			20.4	%			4.8	%	(1)		7.0	%			3.9	%			5.9	%			(1.0	%)			1.6	%
Washington, D.C.			14,400				16.0	%			2,555				96.7	%			17.9	%			6.6	%			3.7	%			8.0	%			6.7	%			(0.1	%)			(1.7	%)
New York			8,536				14.3	%			4,459				96.9	%			17.6	%			16.2	%			3.7	%			27.5	%			16.4	%			(0.2	%)			(2.5	%)
Seattle			9,525				11.3	%			2,583				95.1	%			25.6	%			6.3	%			3.3	%			7.6	%			6.2	%			0.1	%			(0.3	%)
Boston			6,700				10.2	%			3,374				96.1	%			19.2	%			9.0	%			5.4	%			10.6	%			9.3	%			(0.2	%)			(0.5	%)
Denver			2,498				2.7	%			2,402				96.3	%			28.3	%			6.8	%			12.1	%			4.7	%			6.7	%			0.0	%			0.0	%
Other Expansion Markets			2,776				1.8	%			1,984				94.7	%			25.4	%			5.2	%			17.5	%			(4.0	%)			7.0	%			(1.9	%)			1.1	%
Total			76,952				100.0	%		$	2,995				95.9	%			20.6	%			7.3	%			6.2	%			7.8	%			8.0	%			(0.7	%)			0.4	%

(1)

Excluding Bad Debt, Net, which includes the positive impact of governmental rental assistance in the six months ended June 30, 2022, same store revenue growth would have been 6.1%, 7.7% and 5.4% for Los Angeles, Orange County and San Francisco, respectively.

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.2% of total revenues for the six months ended June 30, 2023.

Equity Residential

Same Store Residential Net Effective Lease Pricing Statistics For 76,952 Same Store Apartment Units
		New Lease Change (1)								Renewal Rate Achieved (1)								Blended Rate (1)
Markets/Metro Areas		Q2 2023				Q1 2023				Q2 2023				Q1 2023				Q2 2023				Q1 2023
Southern California			3.5	%			4.6	%			6.9	%			6.2	%			5.4	%			5.4	%
San Francisco			1.4	%			2.0	%			6.0	%			6.1	%			3.8	%			4.3	%
Washington, D.C.			4.8	%			2.4	%			6.5	%			6.0	%			5.7	%			4.4	%
New York			4.2	%			2.4	%			5.1	%			6.3	%			4.7	%			4.6	%
Seattle			(3.8	%)			(5.8	%)			4.5	%			5.6	%			0.4	%			(0.2	%)
Boston			4.4	%			0.6	%			6.1	%			6.9	%			5.4	%			3.8	%
Denver			0.9	%			(2.4	%)			5.0	%			5.8	%			2.6	%			0.8	%
Other Expansion Markets			(4.8	%)			(5.3	%)			4.4	%			5.5	%			(0.8	%)			(0.8	%)
Total			2.3	%			1.3	%			5.9	%			6.1	%			4.3	%			3.9	%

(1)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for definitions. See page 4 for July 2023 preliminary data.

Equity Residential

Second Quarter 2023 vs. Second Quarter 2022 Total Same Store Operating Expenses Including 77,545 Same Store Apartment Units ($ in thousands)
		Q2 2023				Q2 2022				$ Change (1)				% Change				% of Q2 2023 Operating Expenses
Real estate taxes		$	90,898			$	88,963			$	1,935				2.2	%			41.5	%
On-site payroll			42,504				39,022				3,482				8.9	%			19.4	%
Utilities			31,578				31,501				77				0.2	%			14.4	%
Repairs and maintenance			31,233				27,421				3,812				13.9	%			14.3	%
Insurance			8,455				7,397				1,058				14.3	%			3.9	%
Leasing and advertising			2,528				2,619				(91	)			(3.5	%)			1.1	%
Other on-site operating expenses			11,838				10,655				1,183				11.1	%			5.4	%
Total Same Store Operating Expenses (2) (includes Residential and Non-Residential)		$	219,034			$	207,578			$	11,456				5.5	%			100.0	%

June YTD 2023 vs. June YTD 2022 Total Same Store Operating Expenses Including 76,952 Same Store Apartment Units ($ in thousands)
		YTD 2023				YTD 2022				$ Change (1)				% Change				% of YTD 2023 Operating Expenses
Real estate taxes		$	180,521			$	176,328			$	4,193				2.4	%			40.6	%
On-site payroll			84,629				80,021				4,608				5.8	%			19.1	%
Utilities			69,925				65,520				4,405				6.7	%			15.7	%
Repairs and maintenance			61,120				53,077				8,043				15.2	%			13.8	%
Insurance			16,830				14,719				2,111				14.3	%			3.8	%
Leasing and advertising			5,003				4,949				54				1.1	%			1.1	%
Other on-site operating expenses			26,223				23,072				3,151				13.7	%			5.9	%
Total Same Store Operating Expenses (2) (includes Residential and Non-Residential)		$	444,251			$	417,686			$	26,565				6.4	%			100.0	%

(1)		The quarter-over-quarter and year-over-year changes were primarily driven by the following factors:
		Real estate taxes – Increase due to modest escalation in rates and assessed values.
		On-site payroll – Increase due primarily to challenging comparable period and elevated employee benefit costs, partially offset by the impact of innovation initiatives.
		Utilities – Moderation in the quarter-over-quarter rate of increase is primarily driven by lower commodity prices for gas and electric. Year-over-year increase primarily driven by higher commodity prices for gas and electric and higher trash expense.
		Repairs and maintenance – Quarter-over-quarter increase primarily driven by continued wage pressure, particularly due to higher minimum wage on contracted services. Year-over-year increase was also impacted by increased outsourcing due to higher internal staffing utilization to address issues from California rain storms that occurred earlier this year.
		Insurance – Increase due to higher premiums on property insurance renewal due to challenging conditions in the insurance market.
		Other on-site operating expenses – Increase primarily driven by higher property-related legal expenses.
(2)		See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

Equity Residential

Debt Summary as of June 30, 2023 ($ in thousands)
		Debt Balances (1)				% of Total				Weighted Average Rates (1)				Weighted Average Maturities (years)
Secured		$	1,913,069				25.7	%			3.63	%			4.4
Unsecured			5,529,847				74.3	%			3.59	%			9.0
Total		$	7,442,916				100.0	%			3.60	%			7.8
Fixed Rate Debt:
Secured – Conventional		$	1,609,298				21.6	%			3.45	%			3.4
Unsecured – Public			5,345,373				71.8	%			3.54	%			9.3
Fixed Rate Debt			6,954,671				93.4	%			3.52	%			8.0
Floating Rate Debt:
Secured – Conventional			66,863				0.9	%			7.17	%			2.0
Secured – Tax Exempt			236,908				3.2	%			3.47	%			11.0
Unsecured – Revolving Credit Facility			—				—				—				4.3
Unsecured – Commercial Paper Program (2)			184,474				2.5	%			5.12	%			—
Floating Rate Debt			488,245				6.6	%			4.71	%			5.8
Total		$	7,442,916				100.0	%			3.60	%			7.8

(1)		See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.
(2)		At June 30, 2023, the weighted average maturity of commercial paper outstanding was 26 days. The weighted average amount outstanding for the six months ended June 30, 2023 was approximately $164.5 million.

Note: The Company capitalized interest of approximately $7.0 million and $2.3 million during the six months ended June 30, 2023 and 2022, respectively. The Company capitalized interest of approximately $3.6 million and $1.3 million during the quarters ended June 30, 2023 and 2022, respectively.

Equity Residential

Debt Maturity Schedule as of June 30, 2023 ($ in thousands)
Year		Fixed Rate				Floating Rate				Total				% of Total				Weighted Average Coupons on Fixed Rate Debt (1)				Weighted Average Coupons on Total Debt (1)
2023 (2)		$	800,000			$	188,487		(3)	$	988,487				13.2	%			4.21	%			4.45	%
2024			—				6,200				6,200				0.1	%		N/A					3.86	%
2025			450,000				75,976				525,976				7.0	%			3.38	%			3.96	%
2026			592,025				9,000				601,025				8.0	%			3.58	%			3.58	%
2027			400,000				9,800				409,800				5.4	%			3.25	%			3.26	%
2028			900,000				10,700				910,700				12.1	%			3.79	%			3.79	%
2029			888,120				11,500				899,620				12.0	%			3.30	%			3.31	%
2030			1,095,000				12,700				1,107,700				14.7	%			2.55	%			2.56	%
2031			528,500				39,800				568,300				7.6	%			1.94	%			2.08	%
2032			—				28,000				28,000				0.4	%		N/A					3.64	%
2033+			1,350,850				110,900				1,461,750				19.5	%			4.39	%			4.28	%
Subtotal			7,004,495				503,063				7,507,558				100.0	%			3.48	%			3.57	%
Deferred Financing Costs and Unamortized (Discount)			(49,824	)			(14,818	)			(64,642	)		N/A				N/A				N/A
Total		$	6,954,671			$	488,245			$	7,442,916				100.0	%			3.48	%			3.57	%

(1)		See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.
(2)		As of June 30, 2023, the Company had $450.0 million of ten-year forward starting SOFR swaps outstanding at a weighted average rate of 2.90% (currently equivalent to a ten-year U.S. Treasury of approximately 3.15%) to hedge the U.S. Treasury risk for the refinancing of 2023 maturities. See the Capital Markets Activity on page 4 of this release for details of subsequent activity related to these swaps.
(3)		Includes $185.2 million in principal outstanding on the Company's Commercial Paper Program.

Equity Residential

Selected Unsecured Public Debt Covenants
		June 30,		March 31,
		2023		2023
Debt to Adjusted Total Assets (not to exceed 60%)		26.9%		26.7%
Secured Debt to Adjusted Total Assets (not to exceed 40%)		7.7%		8.0%
Consolidated Income Available for Debt Service to
Maximum Annual Service Charges
(must be at least 1.5 to 1)		6.21		6.30
Total Unencumbered Assets to Unsecured Debt
(must be at least 125%)		518.6%		528.9%
Note: These selected covenants represent the most restrictive financial covenants relating to ERP Operating Limited Partnership's ("ERPOP") outstanding public debt securities. Equity Residential is the general partner of ERPOP.

Selected Credit Ratios
		June 30,		March 31,
		2023		2023
Total debt to Normalized EBITDAre		4.30x		4.27x
Net debt to Normalized EBITDAre		4.27x		4.17x
Unencumbered NOI as a % of total NOI		88.5%		88.3%
Note: See Normalized EBITDAre Reconciliations for detail.

Equity Residential

Capital Structure as of June 30, 2023 (Amounts in thousands except for share/unit and per share amounts)
Secured Debt										$	1,913,069				25.7	%
Unsecured Debt											5,529,847				74.3	%
Total Debt											7,442,916				100.0	%			22.3	%
Common Shares (includes Restricted Shares)			379,032,722				96.8	%
Units (includes OP Units and Restricted Units)			12,415,452				3.2	%
Total Shares and Units			391,448,174				100.0	%
Common Share Price at June 30, 2023		$	65.97
											25,823,836				99.9	%
Perpetual Preferred Equity (see below)											37,280				0.1	%
Total Equity											25,861,116				100.0	%			77.7	%
Total Market Capitalization										$	33,304,032								100.0	%

Perpetual Preferred Equity as of June 30, 2023 (Amounts in thousands except for share and per share amounts)
Series		Call Date		Outstanding Shares				Liquidation Value				Annual Dividend Per Share				Annual Dividend Amount
Preferred Shares:
8.29% Series K		12/10/26			745,600			$	37,280			$	4.145			$	3,091

Equity Residential Common Share and Unit Weighted Average Amounts Outstanding

		June YTD 2023				June YTD 2022				Q2 2023				Q2 2022
Weighted Average Amounts Outstanding for Net Income Purposes:
Common Shares - basic			378,492,171				375,639,505				378,641,804				375,768,632
Shares issuable from assumed conversion/vesting of:
- OP Units			11,449,790				11,891,583				11,390,569				11,895,086
- long-term compensation shares/units			1,121,169				1,862,666				1,155,127				1,697,634
- ATM forward sales			—				68,823				—				1,470
Total Common Shares and Units - diluted			391,063,130				389,462,577				391,187,500				389,362,822
Weighted Average Amounts Outstanding for FFO and Normalized FFO Purposes:
Common Shares - basic			378,492,171				375,639,505				378,641,804				375,768,632
OP Units - basic			11,449,790				11,891,583				11,390,569				11,895,086
Total Common Shares and OP Units - basic			389,941,961				387,531,088				390,032,373				387,663,718
Shares issuable from assumed conversion/vesting of:
- long-term compensation shares/units			1,121,169				1,862,666				1,155,127				1,697,634
- ATM forward sales			—				68,823				—				1,470
Total Common Shares and Units - diluted			391,063,130				389,462,577				391,187,500				389,362,822
Period Ending Amounts Outstanding:
Common Shares (includes Restricted Shares)			379,032,722				376,118,433
Units (includes OP Units and Restricted Units)			12,415,452				12,851,180
Total Shares and Units			391,448,174				388,969,613

Equity Residential Development and Lease-Up Projects as of June 30, 2023 (Amounts in thousands except for project and apartment unit amounts)

																								Estimated/Actual
Projects		Location		Ownership Percentage		No. of Apartment Units				Total Budgeted Capital Cost				Total Book Value to Date				Total Debt (1)				Percentage Completed		Start Date		Initial Occupancy		Completion Date		Stabilization Date		Percentage Leased / Occupied
CONSOLIDATED:
Projects Under Development:
Laguna Clara II		Santa Clara, CA		100%			225			$	152,621			$	50,916			$	—			31%		Q2 2022		Q4 2024		Q1 2025		Q4 2025		– / –
Projects Under Development - Consolidated							225				152,621				50,916				—
Projects Completed Not Stabilized:
Reverb (fka 9th and W) (2)		Washington, D.C.		92%			312				108,027				103,675				66,863			99%		Q3 2021		Q2 2023		Q2 2023		Q3 2024		47% / 39%
Projects Completed Not Stabilized - Consolidated							312				108,027				103,675				66,863
UNCONSOLIDATED:
Projects Under Development:
Alloy Sunnyside		Denver, CO		80%			209				66,004				52,878				19,028			79%		Q3 2021		Q4 2023		Q2 2024		Q1 2025		– / –
Alexan Harrison		Harrison, NY		62%			450				198,664				140,799				38,549			69%		Q3 2021		Q1 2024		Q4 2024		Q2 2026		– / –
Solana Beeler Park		Denver, CO		90%			270				81,206				42,820				7,263			44%		Q4 2021		Q4 2023		Q2 2024		Q1 2025		– / –
Remy (Toll)		Frisco, TX		75%			357				96,937				61,366				18,338			58%		Q1 2022		Q1 2024		Q4 2024		Q3 2025		– / –
Settler (Toll)		Fort Worth, TX		75%			362				81,775				41,518				955			48%		Q2 2022		Q2 2024		Q3 2024		Q3 2025		– / –
Lyle (Toll) (2)		Dallas, TX		75%			334				86,332				28,244				7,680			34%		Q3 2022		Q4 2024		Q2 2025		Q1 2026		– / –
Projects Under Development - Unconsolidated							1,982				610,918				367,625				91,813
Total Development Projects - Consolidated							537				260,648				154,591				66,863
Total Development Projects - Unconsolidated							1,982				610,918				367,625				91,813
Total Development Projects							2,519			$	871,566			$	522,216			$	158,676

NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS	Total Budgeted Capital Cost				Q2 2023 NOI
Projects Under Development - Consolidated	$	152,621			$	—
Projects Completed Not Stabilized - Consolidated		108,027				(16	)
Projects Under Development - Unconsolidated		610,918				—
	$	871,566			$	(16	)

(1)		All non-wholly owned projects are being partially funded with project-specific construction loans. None of these loans are recourse to the Company.
(2)		The land parcels under these projects are subject to long-term ground leases.

Equity Residential Capital Expenditures to Real Estate For the Six Months Ended June 30, 2023 (Amounts in thousands except for apartment unit and per apartment unit amounts)

		Same Store Properties				Non-Same Store Properties/Other				Total				Same Store Avg. Per Apartment Unit
Total Apartment Units			76,952				3,260				80,212
Building Improvements		$	53,622			$	4,626		(2)	$	58,248			$	697
Renovation Expenditures			31,400		(1)		11,241		(2)		42,641				408
Replacements			33,474				884				34,358				435
Capital Expenditures to Real Estate (3)		$	118,496			$	16,751			$	135,247			$	1,540

(1)		Renovation Expenditures on 1,050 same store apartment units for the six months ended June 30, 2023 approximated $29,904 per apartment unit renovated.
(2)		Includes expenditures for two properties that have been removed from same store while undergoing major renovations requiring a significant number of apartment units to be vacated to accommodate the extensive planned improvements. The renovations are expected to continue through at least the end of 2023 at both properties.
(3)		See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

Equity Residential

Normalized EBITDAre Reconciliations

(Amounts in thousands)

		Trailing Twelve Months								2023								2022
		June 30, 2023				March 31, 2023				Q2				Q1				Q4				Q3				Q2
Net income		$	865,452			$	953,268			$	144,862			$	220,071			$	165,354			$	335,165			$	232,678
Interest expense incurred, net			270,230				276,529				65,590				66,401				65,827				72,412				71,889
Amortization of deferred financing costs			8,524				8,631				2,017				1,979				2,308				2,220				2,124
Amortization of above/below market lease intangibles			4,464				4,464				1,116				1,116				1,116				1,116				1,116
Depreciation			865,586				868,037				221,355				215,830				214,272				214,129				223,806
Income and other tax expense (benefit)			961				916				336				298				175				152				291
EBITDA			2,015,217				2,111,845				435,276				505,695				449,052				625,194				531,904
Net (gain) loss on sales of real estate properties			(296,652	)			(404,636	)			87				(100,209	)			21				(196,551	)			(107,897	)
EBITDAre			1,718,565				1,707,209				435,363				405,486				449,073				428,643				424,007
Write-off of pursuit costs (other expenses)			4,258				4,649				661				1,332				1,484				781				1,052
(Income) loss from investments in unconsolidated entities - operations			5,207				5,152				1,223				1,382				1,575				1,027				1,168
Realized (gain) loss on investment securities (interest and other income)			3,315				3,317				—				87				3,225				3				2
Insurance/litigation settlement or reserve income (interest and other income)			(1,105	)			(1,223	)			(193	)			(800	)			(12	)			(100	)			(311	)
Insurance/litigation/environmental settlement or reserve expense (other expenses)			9,257				5,744				3,513				4,999				745				—				—
Advocacy contributions (other expenses)			1,097				1,344				320				7				50				720				567
Data transformation project (other expenses)			4,605				3,200				1,405				2,080				1,120				—				—
Real estate tax transaction adjustment (real estate taxes)			(18,072	)			(18,072	)			—				—				(18,072	)			—				—
Other			1,845				1,769				6				6				436				1,397				(70	)
Normalized EBITDAre		$	1,728,972			$	1,713,089			$	442,298			$	414,579			$	439,624			$	432,471			$	426,415
Balance Sheet Items:		June 30, 2023				March 31, 2023
Total debt		$	7,442,916			$	7,312,094
Cash and cash equivalents			(35,701	)			(133,460	)
Mortgage principal reserves/sinking funds			(28,802	)			(27,017	)
Net debt		$	7,378,413			$	7,151,617

Note: EBITDA, EBITDAre and Normalized EBITDAre do not include any adjustments for the Company’s share of partially owned unconsolidated entities or the minority partner’s share of partially owned consolidated entities due to the immaterial size of the Company’s partially owned portfolio.

Equity Residential

Adjustments from FFO to Normalized FFO

(Amounts in thousands)

		Six Months Ended June 30,												Quarter Ended June 30,
		2023				2022				Variance				2023				2022				Variance
Impairment – non-operating real estate assets		$	—			$	—			$	—			$	—			$	—			$	—
Write-off of pursuit costs (other expenses)			1,993				2,515				(522	)			661				1,052				(391	)
Write-off of unamortized deferred financing costs (interest expense)			47				92				(45	)			47				92				(45	)
Write-off of unamortized (premiums)/discounts/OCI (interest expense)			—				377				(377	)			—				377				(377	)
Debt extinguishment and preferred share redemption (gains) losses			47				469				(422	)			47				469				(422	)
(Income) loss from investments in unconsolidated entities ─ non-operating assets			944				734				210				317				310				7
Realized (gain) loss on investment securities (interest and other income)			87				(2,064	)			2,151				—				2				(2	)
Non-operating asset (gains) losses			1,031				(1,330	)			2,361				317				312				5
Insurance/litigation settlement or reserve income (interest and other income)			(993	)			(1,538	)			545				(193	)			(311	)			118
Insurance/litigation/environmental settlement or reserve expense (other expenses)			8,512				750				7,762				3,513				—				3,513
Advocacy contributions (other expenses)			327				742				(415	)			320				567				(247	)
Data transformation project (other expenses)			3,485				—				3,485				1,405				—				1,405
Other			12				(139	)			151				6				(70	)			76
Other miscellaneous items			11,343				(185	)			11,528				5,051				186				4,865
Adjustments from FFO to Normalized FFO		$	14,414			$	1,469			$	12,945			$	6,076			$	2,019			$	4,057

Note: See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for the definitions of non-GAAP financial measures and other terms as well as the reconciliations of EPS to FFO per share and Normalized FFO per share.

Equity Residential Normalized FFO Guidance and Assumptions

The guidance/projections provided below are based on current expectations and are forward-looking. All guidance is given on a Normalized FFO basis. Therefore, certain items excluded from Normalized FFO, such as debt extinguishment costs/prepayment penalties and the write-off of pursuit costs, are not included in the estimates provided on this page. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for the definitions of non-GAAP financial measures and other terms as well as the reconciliations of EPS to FFO per share and Normalized FFO per share.
		Q3 2023		Revised Full Year 2023		Previous Full Year 2023
2023 Normalized FFO Guidance (per share diluted)
Expected Normalized FFO Per Share		$0.95 to $0.99		$3.77 to $3.83		$3.73 to $3.83 (3)
2023 Same Store Assumptions (includes Residential and Non-Residential)
Physical Occupancy				96.0%		96.0% (3)
Revenue change				5.5% to 6.25%		5.5% to 6.25% (3)
Expense change				4.0% to 4.5%		4.0% to 5.0% (3)
NOI change (1)				6.3% to 7.0%		6.0% to 7.0% (3)
2023 Transaction Assumptions
Consolidated rental acquisitions				$300.0M		$300.0M
Consolidated rental dispositions				$300.0M		$300.0M
Transaction Accretion (Dilution)				–		–
2023 Debt Assumptions
Weighted average debt outstanding				$7.35B to $7.55B		$7.375B to $7.575B
Interest expense, net (on a Normalized FFO basis)				$265.5M to $271.5M		$274.5M to $280.5M
Capitalized interest				$11.0M to $14.0M		$10.0M to $14.0M
2023 Capital Expenditures to Real Estate Assumptions for Same Store Properties (2)
Capital Expenditures to Real Estate for Same Store Properties				$255.0M		$240.0M
Capital Expenditures to Real Estate per Same Store Apartment Unit				$3,315		$3,100
2023 Other Guidance Assumptions
Property management expense				$116.5M to $119.5M		$119.0M to $122.0M
General and administrative expense				$59.5M to $63.5M		$55.5M to $59.5M
Debt offerings				$530.0M		$400.0M to $600.0M
Weighted average Common Shares and Units - Diluted				391.3M		391.3M

(1)		Approximately 20 basis point change in NOI percentage = $0.01 per share change in EPS/FFO per share/Normalized FFO per share.
(2)		During 2023, the Company expects to spend approximately $75.0 million for apartment unit Renovation Expenditures on approximately 2,500 same store apartment units at an average cost of approximately $30,000 per apartment unit renovated, which is included in the Capital Expenditures to Real Estate assumptions noted above.
(3)		Represents the updated guidance provided in the Company's May 30, 2023 press release. All other Previous Full Year 2023 items represent the guidance provided in the Company's first quarter 2023 earnings release.

Equity Residential Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms (Amounts in thousands except per share and per apartment unit data) (All per share data is diluted)

This Earnings Release and Supplemental Financial Information includes certain non-GAAP financial measures and other terms that management believes are helpful in understanding our business. The definitions and calculations of these non-GAAP financial measures and other terms may differ from the definitions and methodologies used by other real estate investment trusts (“REIT”) and, accordingly, may not be comparable. These non-GAAP financial measures should not be considered as an alternative to net earnings or any other measurement of performance computed in accordance with accounting principles generally accepted in the United States (“GAAP”) or as an alternative to cash flows from specific operating, investing or financing activities. Furthermore, these non-GAAP financial measures are not intended to be a measure of cash flow or liquidity.

Acquisition Capitalization Rate or Cap Rate – NOI that the Company anticipates receiving in the next 12 months (or the year two or three stabilized NOI for properties that are in lease-up at acquisition) less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $100-$450 per apartment unit depending on the age and condition of the asset) divided by the gross purchase price of the asset. The weighted average Acquisition Cap Rate for acquired properties is weighted based on the projected NOI streams and the relative purchase price for each respective property.

Average Rental Rate – Total Residential rental revenues reflected on a straight-line basis in accordance with GAAP divided by the weighted average occupied apartment units for the reporting period presented.

Bad Debt, Net – Change in rental income due to bad debt write-offs and reserves, net of amounts collected on previously written-off or reserved accounts.

Blended Rate – The weighted average of New Lease Change and Renewal Rate Achieved.

Capital Expenditures to Real Estate:

Building Improvements – Includes roof replacement, paving, building mechanical equipment systems, exterior siding and painting, major landscaping, furniture, fixtures and equipment for amenities and common areas, vehicles and office and maintenance equipment.

Renovation Expenditures – Apartment unit renovation costs (primarily kitchens and baths) designed to reposition these units for higher rental levels in their respective markets.

Replacements – Includes appliances, mechanical equipment, fixtures and flooring (including hardwood and carpeting).

Debt Balances:

Commercial Paper Program – The Company may borrow up to a maximum of $1.0 billion under its Commercial Paper Program subject to market conditions. The notes bear interest at various floating rates.

Revolving Credit Facility – The Company’s $2.5 billion unsecured revolving credit facility matures October 26, 2027. The interest rate on advances under the facility will generally be SOFR plus a spread (currently 0.725%), or based on bids received from the lending group, and an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating. In addition, the Company limits its utilization of the facility in order to maintain liquidity to support its $1.0 billion Commercial Paper Program along with certain other obligations. The following table presents the availability on the Company’s unsecured revolving credit facility:

		June 30, 2023
Unsecured revolving credit facility commitment		$	2,500,000
Commercial paper balance outstanding			(185,187	)
Unsecured revolving credit facility balance outstanding			—
Other restricted amounts			(3,484	)
Unsecured revolving credit facility availability		$	2,311,329

Debt Covenant Compliance – Our unsecured debt includes certain financial and operating covenants including, among other things, maintenance of certain financial ratios. These provisions are contained in the indentures applicable to each notes payable or the credit agreement for our line of credit. The Debt Covenant Compliance ratios that are provided show the Company's compliance with certain covenants governing our public unsecured debt. These covenants generally reflect our most restrictive financial covenants. The Company was in compliance with its unsecured debt covenants for all periods presented.

Development Yield – NOI that the Company anticipates receiving in the next 12 months following stabilization less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $50-$150 per apartment unit depending on the type of asset) divided by the Total Budgeted Capital Cost of the asset. The weighted average Development Yield for development properties is weighted based on the projected NOI streams and the relative Total Budgeted Capital Cost for each respective property.

Disposition Yield – NOI that the Company anticipates giving up in the next 12 months less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $150-$450 per apartment unit depending on the age and condition of the asset) divided by the gross sales price of the asset. The weighted average Disposition Yield for sold properties is weighted based on the projected NOI streams and the relative sales price for each respective property.

Earnings Per Share ("EPS") – Net income per share calculated in accordance with GAAP. Expected EPS is calculated on a basis consistent with actual EPS. Due to the uncertain timing and extent of property dispositions and the resulting gains/losses on sales, actual EPS could differ materially from expected EPS.

EBITDA for Real Estate and Normalized EBITDA for Real Estate:

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) – The National Association of Real Estate Investment Trusts (“Nareit”) defines EBITDAre (September 2017 White Paper) as net income (computed in accordance with GAAP) before interest expense, income taxes, depreciation and amortization expense, and further adjusted for gains and losses from sales of depreciated operating properties, impairment write-downs of depreciated operating properties, impairment write-downs of investments in unconsolidated entities caused by a decrease in value of depreciated operating properties within the joint venture and adjustments to reflect the Company’s share of EBITDAre of investments in unconsolidated entities.

The Company believes that EBITDAre is useful to investors, creditors and rating agencies as a supplemental measure of the Company’s ability to incur and service debt because it is a recognized measure of performance by the real estate industry, and by excluding gains or losses related to sales or impairment of depreciated operating properties, EBITDAre can help compare the Company’s credit strength between periods or as compared to different companies.

Normalized Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“Normalized EBITDAre”) – Represents net income (computed in accordance with GAAP) before interest expense, income taxes, depreciation and amortization expense, and further adjusted for non-comparable items. Normalized EBITDAre, total debt to Normalized EBITDAre and net debt to Normalized EBITDAre are important metrics in evaluating the credit strength of the Company and its ability to service its debt obligations. The Company believes that Normalized EBITDAre, total debt to Normalized EBITDAre, and net debt to Normalized EBITDAre are useful to investors, creditors and rating agencies because they allow investors to compare the Company’s credit strength to prior reporting periods and to other companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual credit quality.

Economic Gain (Loss) – Economic Gain (Loss) is calculated as the net gain (loss) on sales of real estate properties in accordance with GAAP, excluding accumulated depreciation. The Company generally considers Economic Gain (Loss) to be an appropriate supplemental measure to net gain (loss) on sales of real estate properties in accordance with GAAP because it is one indication of the gross value created by the Company's acquisition, development, renovation, management and ultimate sale of a property and because it helps investors to understand the relationship between the cash proceeds from a sale and the cash invested in the sold property. The following table presents a reconciliation of net gain (loss) on sales of real estate properties in accordance with GAAP to Economic Gain (Loss):

		Six Months Ended June 30, 2023				Quarter Ended June 30, 2023
Net Gain (Loss) on Sales of Real Estate Properties		$	100,122			$	(87	)
Accumulated Depreciation Gain			(36,486	)			—
Economic Gain (Loss)		$	63,636			$	(87	)

Forecasted Embedded Growth – The positive or negative contribution to growth implied by annualizing total lease income anticipated for the last month of the current year (without regard to vacancy) compared to anticipated actual full year lease income for the current year (without regard to vacancy) and excluding the impact of Leasing Concessions and other income. This metric is a helpful data point in that it captures the impact of leases in existence at the end of the current year and their impact on rental income for the following year.

FFO and Normalized FFO:

Funds From Operations (“FFO”) – Nareit defines FFO (December 2018 White Paper) as net income (computed in accordance with GAAP), excluding gains or losses from sales and impairment write-downs of depreciable real estate and land when connected to the main business of a REIT, impairment write-downs of investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity and depreciation and amortization related to real estate. Adjustments for partially owned consolidated and unconsolidated partnerships and joint ventures are calculated to reflect FFO on the same basis. Expected FFO per share is calculated on a basis consistent with actual FFO per share and is considered an appropriate supplemental measure of expected operating performance when compared to expected EPS.

The Company believes that FFO and FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company, because they are recognized measures of performance by the real estate industry and by excluding gains or losses from sales and impairment write-downs of depreciable real estate and excluding depreciation related to real estate (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO available to Common Shares and Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies.

Normalized Funds From Operations ("Normalized FFO" or "NFFO") – Normalized FFO begins with FFO and excludes:

• the impact of any expenses relating to non-operating real estate asset impairment;
• pursuit cost write-offs;
• gains and losses from early debt extinguishment and preferred share redemptions;
• gains and losses from non-operating assets; and
• other miscellaneous items.

Expected Normalized FFO per share is calculated on a basis consistent with actual Normalized FFO per share and is considered an appropriate supplemental measure of expected operating performance when compared to expected EPS.

The Company believes that Normalized FFO and Normalized FFO available to Common Shares and Units are helpful to investors as supplemental measures of the operating performance of a real estate company because they allow investors to compare the Company's operating performance to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company's actual operating results.

FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units do not represent net income, net income available to Common Shares or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units should not be exclusively considered as alternatives to net income, net income available to Common Shares or net cash flows from operating activities as determined by GAAP or as a measure of liquidity. The Company's calculation of FFO, FFO available to Common Shares and Units, Normalized FFO and Normalized FFO available to Common Shares and Units may differ from other real estate companies due to, among other items, variations in cost capitalization policies for capital expenditures and, accordingly, may not be comparable to such other real estate companies.

FFO available to Common Shares and Units and Normalized FFO available to Common Shares and Units are calculated on a basis consistent with net income available to Common Shares and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares in accordance with GAAP. The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units are collectively referred to as the "Noncontrolling Interests – Operating Partnership". Subject to certain restrictions, the Noncontrolling Interests – Operating Partnership may exchange their OP Units for Common Shares on a one-for-one basis.

The following table presents reconciliations of EPS to FFO per share and Normalized FFO per share for Consolidated Statements of Funds From Operations and Normalized Funds From Operations.

		Actual June				Actual June				Actual			Actual				Expected				Expected
		YTD 2023				YTD 2022				Q2 2023			Q2 2022				Q3 2023				2023
		Per Share				Per Share				Per Share			Per Share				Per Share				Per Share
EPS – Diluted		$	0.92			$	0.78			$	0.37		$	0.59			$0.59 to $0.63				$1.95 to $2.01
Depreciation expense			1.11				1.16				0.56			0.58				0.56				2.23
Net (gain) loss on sales			(0.25	)			(0.28	)			—			(0.28	)			(0.21	)			(0.46	)
Impairment – operating real estate assets		—					—				—			—				—				—
FFO per share – Diluted			1.78				1.66				0.93			0.89			0.94 to 0.98				3.72 to 3.78
Impairment – non-operating real estate assets			—				—				—			—				—				—
Write-off of pursuit costs			0.01				—				—			—				—				0.01
Debt extinguishment and preferred share
redemption (gains) losses			—				—				—			—				—				—
Non-operating asset (gains) losses			—				—				—			—				—				—
Other miscellaneous items			0.03				—				0.01			—				0.01				0.04
Normalized FFO per share – Diluted		$	1.82			$	1.66			$	0.94		$	0.89			$0.95 to $0.99				$3.77 to $3.83

Lease-Up NOI – Represents NOI for development properties: (i) in various stages of lease-up; and (ii) where lease-up has been completed but the properties were not stabilized (defined as having achieved 90% occupancy for three consecutive months) for all of the current and comparable periods presented.

Leasing Concessions – Reflects upfront discounts on both new move-in and renewal leases on a straight-line basis.

Net Operating Income (“NOI”) – NOI is the Company’s primary financial measure for evaluating each of its apartment properties. NOI is defined as rental income less direct property operating expenses (including real estate taxes and insurance). The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company's apartment properties. NOI does not include an allocation of property management expenses either in the current or comparable periods. Rental income for all leases and operating expense for ground leases (for both same store and non-same store properties) are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.

The following tables present reconciliations of operating income per the consolidated statements of operations to NOI, along with rental income, operating expenses and NOI per the consolidated statements of operations allocated between same store and non-same store/other results (see Same Store Results):

		Six Months Ended June 30,								Quarter Ended June 30,
		2023				2022				2023				2022
Operating income		$	516,049			$	459,672			$	218,461			$	309,934
Adjustments:
Property management			62,145				57,306				30,679				26,559
General and administrative			35,041				33,661				18,876				16,423
Depreciation			437,185				453,767				221,355				223,806
Net (gain) loss on sales of real estate
properties			(100,122	)			(107,795	)			87				(107,897	)
Total NOI		$	950,298			$	896,611			$	489,458			$	468,825
Rental income:
Same store		$	1,375,078			$	1,281,947			$	697,444			$	661,374
Non-same store/other			47,319				58,431				19,865				25,656
Total rental income			1,422,397				1,340,378				717,309				687,030
Operating expenses:
Same store			444,251				417,686				219,034				207,578
Non-same store/other			27,848				26,081				8,817				10,627
Total operating expenses			472,099				443,767				227,851				218,205
NOI:
Same store			930,827				864,261				478,410				453,796
Non-same store/other			19,471				32,350				11,048				15,029
Total NOI		$	950,298			$	896,611			$	489,458			$	468,825

New Lease Change – The net effective change in rent (inclusive of Leasing Concessions) for a lease with a new or transferring resident compared to the rent for the prior lease of the identical apartment unit, regardless of lease term.

Non-Residential – Consists of revenues and expenses from retail and public parking garage operations.

Non-Same Store Properties – For annual comparisons, primarily includes all properties acquired during 2022 and 2023, plus any properties in lease-up and not stabilized as of January 1, 2022.

Percentage of Residents Renewing – Leases renewed expressed as a percentage of total renewal offers extended during the reporting period.

Physical Occupancy – The weighted average occupied apartment units for the reporting period divided by the average of total apartment units available for rent for the reporting period.

Pricing Trend – Weighted average of 12-month base rent including amenity amount less Leasing Concessions on 12-month signed leases for the reporting period.

Renewal Rate Achieved – The net effective change in rent (inclusive of Leasing Concessions) for a new lease on an apartment unit where the lease has been renewed as compared to the rent for the prior lease of the identical apartment unit, regardless of lease term.

Residential – Consists of multifamily apartment revenues and expenses.

Same Store Operating Expenses:

On-site Payroll – Includes payroll and related expenses for on-site personnel including property managers, leasing consultants and maintenance staff.

Other On-site Operating Expenses – Includes ground lease costs and administrative costs such as office supplies, telephone and data charges and association and business licensing fees.

Repairs and Maintenance – Includes general maintenance costs, apartment unit turnover costs including interior painting, routine landscaping, security, exterminating, fire protection, snow removal, elevator, roof and parking lot repairs and other miscellaneous building repair and maintenance costs.

Utilities – Represents gross expenses prior to any recoveries under the Resident Utility Billing System (“RUBS”). Recoveries are reflected in rental income.

Same Store Properties – For annual comparisons, primarily includes all properties acquired or completed that are stabilized prior to January 1, 2022, less properties subsequently sold. Properties are included in Same Store when they are stabilized for all of the current and comparable periods presented.

Same Store Residential Revenues – Revenues from our Same Store Properties presented on a GAAP basis which reflects the impact of Leasing Concessions on a straight-line basis.

Same Store Residential Revenues with Leasing Concessions on a cash basis is presented in Same Store Results and is considered by the Company to be a supplemental measure to Same Store Residential Revenues in conformity with GAAP to help investors evaluate the impact of both current and historical Leasing Concessions on GAAP-based Same Store Residential Revenues and to more readily enable comparisons to revenue as reported by other companies. Same Store Residential Revenues with Leasing Concessions on a cash basis reflects the impact of Leasing Concessions used in the period and allows an investor to understand the historical trend in cash Leasing Concessions.

% of Stabilized Budgeted NOI – Represents original budgeted 2023 NOI for stabilized properties and projected annual NOI at stabilization (defined as having achieved 90% occupancy for three consecutive months) for properties that are in lease-up.

Total Budgeted Capital Cost – Estimated remaining cost for projects under development and/or developed plus all capitalized costs incurred to date, including land acquisition costs, construction costs, capitalized real estate taxes and insurance, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees, plus any estimates of costs remaining to be funded for all projects, all in accordance with GAAP. Amounts for partially owned consolidated and unconsolidated properties are presented at 100% of the project.

Total Market Capitalization – The aggregate of the market value of the Company’s outstanding common shares, including restricted shares, the market value of the Company’s operating partnership units outstanding, including restricted units (based on the market value of the Company’s common shares) and the outstanding principal balance of debt. The Company believes this is a useful measure of a real estate operating company’s long-term liquidity and balance sheet strength, because it shows an approximate relationship between a company’s total debt and the current total market value of its assets based on the current price at which the Company’s common shares trade. However, because this measure of leverage changes with fluctuations in the Company’s share price, which occur regularly, this measure may change even when the Company’s earnings, interest and debt levels remain stable.

Traffic – Consists of an expression of interest in an apartment by completing an in-person tour, self-guided tour or virtual tour that may result in an application to lease.

Transaction Accretion (Dilution) – Represents the spread between the Acquisition Cap Rate and the Disposition Yield.

Turnover – Total Residential move-outs (including inter-property and intra-property transfers) divided by total Residential apartment units.

Unencumbered NOI % – Represents NOI generated by consolidated real estate assets unencumbered by outstanding secured debt as a percentage of total NOI generated by all of the Company's consolidated real estate assets.

Unlevered Internal Rate of Return (“IRR”) – The Unlevered IRR on sold properties is the compound annual rate of return calculated by the Company based on the timing and amount of: (i) the gross purchase price of the property plus any direct acquisition costs incurred by the Company; (ii) total revenues earned during the Company’s ownership period; (iii) total direct property operating expenses (including real estate taxes and insurance) incurred during the Company’s ownership period; (iv) capital expenditures incurred during the Company’s ownership period; and (v) the gross sales price of the property net of selling costs.

The calculation of the Unlevered IRR does not include an adjustment for the Company’s property management expense, general and administrative expense or interest expense (including loan assumption costs and other loan-related costs). Therefore, the Unlevered IRR is not a substitute for net income as a measure of our performance. Management believes that the Unlevered IRR achieved during the period a property is owned by the Company is useful because it is one indication of the gross value created by the Company’s acquisition, development, renovation, management and ultimate sale of a property, before the impact of Company overhead. The Unlevered IRR achieved on the properties as cited in this release should not be viewed as an indication of the gross value created with respect to other properties owned by the Company, and the Company does not represent that it will achieve similar Unlevered IRRs upon the disposition of other properties. The weighted average Unlevered IRR for sold properties is weighted based on all cash flows over the investment period for each respective property, including net sales proceeds.

Weighted Average Coupons – Contractual interest rate for each debt instrument weighted by principal balances as of June 30, 2023. In case of debt for which fair value hedges are in place, the rate payable under the corresponding derivatives is used in lieu of the contractual interest rate.

Weighted Average Rates – Interest expense for each debt instrument for the six months ended June 30, 2023 weighted by its average principal balance for the same period. Interest expense includes amortization of premiums, discounts and other comprehensive income on debt and related derivative instruments. In case of debt for which derivatives are in place, the income or expense recognized under the corresponding derivatives is included in the total interest expense for the period.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230727298360/en/

Marty McKenna

312-928-1901

mmckenna@eqr.com

Source: Equity Residential

FAQ

What was the change in same store revenue in Q2 2023 compared to Q2 2022?

Same store revenue increased by 5.5% in Q2 2023 compared to Q2 2022.

What is the revised full year 2023 same store revenue growth guidance midpoint?

The revised full year 2023 same store revenue growth guidance midpoint is 5.875%.

What is the interest rate on the secured loans the company locked?

The interest rate on the secured loans the company locked is approximately 4.7%.

What is the company's revised guidance for full year 2023 EPS, FFO per share, and NFFO per share?

The company revised its guidance for full year 2023 EPS to $1.95 to $2.01, FFO per share to $3.72 to $3.78, and NFFO per share to $3.77 to $3.83.