Equity Residential Reports First Quarter 2021 Results

By: Equity Residential via Business Wire

April 27, 2021 at 16:15 PM EDT

Full Year Guidance Ranges Raised as Broad-Based Recovery Continues

Equity Residential (NYSE: EQR) today reported results for the quarter ended March 31, 2021 and has posted a Q1 2021 Management Presentation to its website as referenced below.

First Quarter 2021 Results

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


	Quarter Ended March 31,
	2021		2020		$ Change			% Change
Earnings Per Share (EPS)	$	0.15	$	0.83	$	(0.68	)		(81.9	%)
Funds from Operations (FFO) per share	$	0.67	$	0.86	$	(0.19	)		(22.1	%)
Normalized FFO per share	$	0.68	$	0.87	$	(0.19	)		(21.8	%)

“While the first quarter’s results reflect the significant impact of the pandemic on our business, we continue to see substantial signs of improvement as cities begin to reopen and affluent renters return. We are producing occupancy and pricing trends better than our original expectations and are therefore pleased to raise our full year same store revenue guidance range by 100 basis points to -6.0% to -8.0%,” said Mark J. Parrell, Equity Residential’s President and CEO. “As we head into the seasonally highest demand period of the year, we see considerable positive momentum in our operations and we expect to further reduce concessions and increase rental rates in light of the strong demand we see across our markets.”

Highlights

The Company has seen a 1.6% improvement in same store Physical Occupancy since the end of the fourth quarter 2020 (94.4% on December 31, 2020 to 96.0% on April 22, 2021).
Pricing Trends continue to improve across all markets with an approximately 14% sequential improvement portfolio-wide from December 2020 through April 2021. See the Management Presentation for details.
The Company collected approximately 97% of its expected Residential revenues in the first quarter of 2021.
The Company expanded its efforts to improve access to affordable housing with a $5.0 million commitment to a fund dedicated to preserving affordable housing.

Results Per Share

The change in EPS for the quarter ended March 31, 2021 compared to the same period of 2020 is due primarily to lower property sale gains in the first quarter of 2021, the various adjustment items listed on page 23 of this release and the items described below.

The per share change in FFO for the quarter ended March 31, 2021 compared to the same period of 2020, is due primarily to the various adjustment items listed on page 23 of this release and the items described below.

The per share change in Normalized FFO is due primarily to:

	Positive/(Negative) Impact
	First Quarter 2021 vs. First Quarter 2020
Residential same store Net Operating Income (NOI)	$	(0.20	)
2020 transaction activity impact on NOI, net		(0.03	)
Interest expense, net		0.05
Other items		(0.01	)
Net	$	(0.19	)

The Company has a glossary of defined terms and related reconciliations of Non-GAAP financial measures on pages 25 through 30 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 6, 27 and 28 of this release.

Same Store Results

The Company has provided a breakout of Residential and Non-Residential same store results on page 9 of this release with definitions that can be found on page 29 of this release. Non-Residential operations account for approximately 3.8% of total revenues for the quarter ended March 31, 2021. The table below reflects same store Residential only results for the first quarter 2021 to first quarter 2020 comparison, which includes 77,060 apartment units, as well as for the first quarter 2021 to fourth quarter 2020 comparison, which includes 77,281 apartment units. The Company’s Physical Occupancy was 95.0% for the first quarter of 2021 compared to 94.2% for the fourth quarter of 2020 and 96.4% for the first quarter of 2020.

	First Quarter 2021 vs. First Quarter 2020	First Quarter 2021 vs. Fourth Quarter 2020
Revenues	(10.6%)	(2.3%)
Expenses	3.9%	5.6%
NOI	(17.1%)	(6.2%)

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. See page 10 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.

	First Quarter 2021 vs. First Quarter 2020			First Quarter 2021 vs. Fourth Quarter 2020
	% Change			% Change
Same Store Residential Revenues-
comparable period
Lease rates		(6.6	%)		(2.3	%)
Leasing Concessions ⁽¹⁾		(1.6	%)		(0.6	%)
Vacancy loss		(1.0	%)		1.1	%
Bad Debt, Net ⁽²⁾		(1.6	%)		(0.1	%)
Other ⁽³⁾		0.2	%		(0.4	%)
Same Store Residential Revenues-
current period		(10.6	%)		(2.3	%)

(1)		Reflects upfront discounts on both new move-in and renewal leases on a straight-line basis.
(2)		Reduction in rental income due to bad debt write-offs and reserves, net of amounts collected on previously written-off or reserved accounts.
(3)		Includes ancillary income, utility recoveries, early lease termination income, miscellaneous income and other items.

Residential Same Store Operating Statistics

The following table includes select operating metrics for Residential Same Store Properties:

	Q4 2020	Q1 2021	April 2021 (1)
Physical Occupancy ⁽²⁾	94.4%	95.6%	96.0%
Percentage of Residents Renewing by quarter/month	51.0%	53.0%	56.0%

New Lease Change	(20.5%)	(17.7%)	(11.4%)
Renewal Rate Achieved	(3.4%)	(5.1%)	(2.1%)
Blended Rate	(13.0%)	(12.1%)	(7.2%)

(1)		April 2021 results are preliminary.
(2)		Physical Occupancy is as of month-end December for Q4 2020, month-end March for Q1 2021 and as of April 22 for April 2021.

Investment Activity

The Company did not acquire or sell any assets during the first quarter of 2021.

Second Quarter 2021 Guidance

The Company has established guidance ranges for the second quarter of 2021 EPS, FFO per share and Normalized FFO per share as listed below:

		Q2 2021 Guidance
EPS		$0.66 to $0.70
FFO per share		$0.66 to $0.70
Normalized FFO per share		$0.67 to $0.71

The difference between the first quarter 2021 actual EPS of $0.15 and the second quarter of 2021 EPS guidance midpoint of $0.68 is due primarily to higher expected property sale gains and lower expected corporate overhead.

The difference between the first quarter 2021 actual FFO of $0.67 per share and the second quarter of 2021 FFO guidance midpoint of $0.68 per share is due primarily to lower expected corporate overhead.

The difference between the first quarter 2021 actual Normalized FFO of $0.68 per share and the second quarter of 2021 Normalized FFO guidance midpoint of $0.69 per share is due primarily to lower expected corporate overhead.

Full Year 2021 Guidance

The Company has revised its guidance for its full year 2021 same store operating performance as well as EPS, FFO per share and Normalized FFO per share as listed below:

	Revised	Previous
Same Store (includes Residential and Non-Residential):
Physical Occupancy	95.0% to 96.0%	94.8% to 95.8%
Revenue change	(8.0%) to (6.0%)	(9.0%) to (7.0%)
Expense change	3.0% to 4.0%	3.0% to 4.0%
NOI change	(13.0%) to (11.0%)	(15.0%) to (12.0%)

EPS	$2.57 to $2.67	$2.55 to $2.75
FFO per share	$2.67 to $2.77	$2.58 to $2.78
Normalized FFO per share	$2.70 to $2.80	$2.60 to $2.80

The change in the full year 2021 EPS guidance range is due primarily to lower expected property sale gains and higher expected same store NOI.

The change in the full year 2021 FFO per share guidance range is due primarily to higher expected same store NOI.

The change in the full year 2021 Normalized FFO per share guidance range is due primarily to higher expected same store NOI.

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 high quality long-term renters. Equity Residential owns or has investments in 304 properties consisting of 77,889 apartment units, located in Boston, New York, Washington, D.C., Seattle, San Francisco, Southern California and Denver. 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, competition and government regulation. In addition, these forward-looking statements are subject to risks related to the COVID-19 pandemic, many of which are unknown, including the duration and severity of the pandemic, the extent of the adverse health impact on the general population and on our residents, customers and employees in particular, its impact on the employment rate and the economy and the corresponding impact on our residents’ and tenants’ ability to pay their rent on time or at all, the extent and impact of governmental responses, the rollout and effectiveness of vaccines and the impact of operational changes we have implemented and may implement in response to the pandemic. 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, Wednesday, April 28, 2021 at 10:00 a.m. CT. In connection with the conference call, the Company is also providing a Management Presentation on its website. Please visit the Investor section of the Company’s website at www.equityapartments.com for the web cast link and the presentation.

Equity Residential Consolidated Statements of Operations (Amounts in thousands except per share data) (Unaudited)

	Quarter Ended March 31,
	2021			2020
REVENUES
Rental income	$	597,602		$	682,305

EXPENSES
Property and maintenance		117,054			115,816
Real estate taxes and insurance		103,470			97,732
Property management		26,130			27,709
General and administrative		15,383			14,518
Depreciation		199,962			212,422
Total expenses		461,999			468,197

Net gain (loss) on sales of real estate properties		(43	)		207,977

Operating income		135,560			422,085

Interest and other income		216			1,960
Other expenses		(4,110	)		(2,533	)
Interest:
Expense incurred, net		(67,358	)		(85,590	)
Amortization of deferred financing costs		(2,185	)		(2,041	)
Income before income and other taxes, income (loss) from
investments in unconsolidated entities and net gain (loss)
on sales of land parcels		62,123			333,881
Income and other tax (expense) benefit		(153	)		(53	)
Income (loss) from investments in unconsolidated entities		(1,611	)		(1,157	)
Net gain (loss) on sales of land parcels		5			—
Net income		60,364			332,671
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership		(2,143	)		(11,535	)
Partially Owned Properties		(682	)		(12,530	)
Net income attributable to controlling interests		57,539			308,606
Preferred distributions		(773	)		(773	)
Net income available to Common Shares	$	56,766		$	307,833

Earnings per share – basic:
Net income available to Common Shares	$	0.15		$	0.83
Weighted average Common Shares outstanding		372,280			371,582

Earnings per share – diluted:
Net income available to Common Shares	$	0.15		$	0.83
Weighted average Common Shares outstanding		386,916			386,949

Distributions declared per Common Share outstanding	$	0.6025		$	0.6025

Equity Residential Consolidated Statements of Funds From Operations and Normalized Funds From Operations (Amounts in thousands except per share data) (Unaudited)

	Quarter Ended March 31,
	2021			2020
Net income	$	60,364		$	332,671
Net (income) loss attributable to Noncontrolling Interests – Partially
Owned Properties		(682	)		(12,530	)
Preferred distributions		(773	)		(773	)
Net income available to Common Shares and Units		58,909			319,368

Adjustments:
Depreciation		199,962			212,422
Depreciation – Non-real estate additions		(1,100	)		(1,287	)
Depreciation – Partially Owned Properties		(828	)		(856	)
Depreciation – Unconsolidated Properties		617			613
Net (gain) loss on sales of unconsolidated entities - operating
assets		(4	)		—
Net (gain) loss on sales of real estate properties		43			(207,977	)
Noncontrolling Interests share of gain (loss) on sales
of real estate properties		—			11,655
FFO available to Common Shares and Units		257,599			333,938

Adjustments (see note for additional detail):
Impairment – non-operating assets		—			—
Write-off of pursuit costs		1,331			1,627
Debt extinguishment and preferred share redemption (gains)
losses		264			—
Non-operating asset (gains) losses		854			441
Other miscellaneous items		2,242			(918	)
Normalized FFO available to Common Shares and Units	$	262,290		$	335,088

FFO	$	258,372		$	334,711
Preferred distributions		(773	)		(773	)
FFO available to Common Shares and Units	$	257,599		$	333,938
FFO per share and Unit – basic	$	0.67		$	0.87
FFO per share and Unit – diluted	$	0.67		$	0.86

Normalized FFO	$	263,063		$	335,861
Preferred distributions		(773	)		(773	)
Normalized FFO available to Common Shares and Units	$	262,290		$	335,088
Normalized FFO per share and Unit – basic	$	0.68		$	0.87
Normalized FFO per share and Unit – diluted	$	0.68		$	0.87

Weighted average Common Shares and Units outstanding – basic		385,330			384,586
Weighted average Common Shares and Units outstanding – diluted		386,916			386,949

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)
	March 31,			December 31,
	2021			2020
ASSETS
Land	$	5,785,367		$	5,785,367
Depreciable property		20,952,067			20,920,654
Projects under development		476,010			411,134
Land held for development		88,360			86,170
Investment in real estate		27,301,804			27,203,325
Accumulated depreciation		(8,059,619	)		(7,859,657	)
Investment in real estate, net		19,242,185			19,343,668
Investments in unconsolidated entities		53,274			52,782
Cash and cash equivalents		35,453			42,591
Restricted deposits		62,383			57,137
Right-of-use assets		484,999			499,287
Other assets		290,721			291,426
Total assets	$	20,169,015		$	20,286,891

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,270,700		$	2,293,890
Notes, net		5,337,103			5,335,536
Line of credit and commercial paper		429,753			414,830
Accounts payable and accrued expenses		168,028			107,366
Accrued interest payable		55,489			65,896
Lease liabilities		316,838			329,130
Other liabilities		335,664			345,064
Security deposits		60,939			60,480
Distributions payable		232,737			232,262
Total liabilities		9,207,251			9,184,454

Commitments and contingencies

Redeemable Noncontrolling Interests – Operating Partnership		409,523			338,951
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 March 31, 2021 and December 31, 2020		37,280			37,280
Common Shares of beneficial interest, $0.01 par value;
1,000,000,000 shares authorized; 372,917,413 shares issued
and outstanding as of March 31, 2021 and 372,302,000
shares issued and outstanding as of December 31, 2020		3,729			3,723
Paid in capital		9,083,346			9,128,599
Retained earnings		1,231,808			1,399,715
Accumulated other comprehensive income (loss)		(41,363	)		(43,666	)
Total shareholders’ equity		10,314,800			10,525,651
Noncontrolling Interests:
Operating Partnership		234,969			233,162
Partially Owned Properties		2,472			4,673
Total Noncontrolling Interests		237,441			237,835
Total equity		10,552,241			10,763,486
Total liabilities and equity	$	20,169,015		$	20,286,891

Equity Residential Portfolio Summary As of March 31, 2021

					% of
					Stabilized			Average
			Apartment		Budgeted			Rental
Markets/Metro Areas	Properties		Units		NOI			Rate

Los Angeles		72		16,603		21.5	%	$	2,424
Orange County		13		4,028		5.4	%		2,205
San Diego		11		2,706		3.8	%		2,376
Subtotal – Southern California		96		23,337		30.7	%		2,380

San Francisco		48		12,707		18.3	%		2,903
Washington DC		47		14,731		17.2	%		2,325
Seattle		46		9,454		11.4	%		2,242
New York		37		9,606		11.3	%		3,464
Boston		25		6,430		9.4	%		2,853
Denver		5		1,624		1.7	%		1,984

Total		304		77,889		100.0	%	$	2,597


	Properties		Apartment Units

Wholly Owned Properties		287		74,328
Master-Leased Properties – Consolidated		1		162
Partially Owned Properties – Consolidated		16		3,399

		304		77,889

Note: Projects under development are not included in the Portfolio Summary until construction has been completed.

Note: The Company did not acquire or sell any assets during the first quarter of 2021.

Equity Residential

First Quarter 2021 vs. First Quarter 2020 Same Store Results/Statistics Including 77,060 Same Store Apartment Units $ in thousands (except for Average Rental Rate)

First Quarter 2021													First Quarter 2020
	Residential				% Change	Non- Residential			% Change	Total		% Change		Residential			Non- Residential		Total

Revenues	$	570,927		(1)	(10.6%)	$	21,861	(2)	(6.3%)	$	592,788	(10.5%)	Revenues	$	638,683		$	23,338	$	662,021
Expenses	$	205,959			3.9%	$	6,093		3.4%	$	212,052	3.8%	Expenses	$	198,306		$	5,895	$	204,201
NOI	$	364,968			(17.1%)	$	15,768		(9.6%)	$	380,736	(16.8%)	NOI	$	440,377		$	17,443	$	457,820

Average Rental Rate	$	2,601			(9.3%)								Average Rental Rate	$	2,867
Physical Occupancy		95.0	%		(1.4%)								Physical Occupancy		96.4	%
Turnover		9.9	%		0.2%								Turnover		9.7	%


First Quarter 2021 vs. Fourth Quarter 2020 Same Store Results/Statistics Including 77,281 Same Store Apartment Units $ in thousands (except for Average Rental Rate)

First Quarter 2021													Fourth Quarter 2020
	Residential				% Change	Non- Residential			% Change	Total		% Change		Residential			Non- Residential		Total

Revenues	$	572,443		(1)	(2.3%)	$	21,861	(2)	9.4%	$	594,304	(1.9%)	Revenues	$	585,699		$	19,982	$	605,681
Expenses	$	206,342			5.6%	$	6,095		9.2%	$	212,437	5.7%	Expenses	$	195,347		$	5,583	$	200,930
NOI	$	366,101			(6.2%)	$	15,766		9.5%	$	381,867	(5.7%)	NOI	$	390,352		$	14,399	$	404,751

Average Rental Rate	$	2,600			(3.1%)								Average Rental Rate	$	2,683
Physical Occupancy		95.0	%		0.8%								Physical Occupancy		94.2	%
Turnover		10.0	%		(3.4%)								Turnover		13.4	%

(1)		See page 10 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.

(2)		Changes in same store Non-Residential revenues for the periods presented are driven by the following:
		• First Quarter 2021 vs. First Quarter 2020 – Primarily deferral/abatement of rents, higher bad debt and lower parking income.
		• First Quarter 2021 vs. Fourth Quarter 2020 – Primarily higher receipts from retail tenants, lower bad debt and higher parking income.

Equity Residential

Same Store Residential Revenues – GAAP to Cash Basis (1) $ in thousands

	First Quarter 2021 vs. First Quarter 2020						First Quarter 2021 vs. Fourth Quarter 2020
	77,060 Same Store Apartment Units						77,281 Same Store Apartment Units
	Q1 2021			Q1 2020			Q1 2021			Q4 2020
Same Store Residential Revenues (GAAP Basis)	$	570,927		$	638,683		$	572,443		$	585,699
Leasing Concessions amortized		11,640			1,147			11,703			8,302
Leasing Concessions granted ⁽²⁾		(16,989	)		(1,904	)		(17,038	)		(16,762	)
Same Store Residential Revenues with Leasing
Concessions on a cash basis	$	565,578		$	637,926		$	567,108		$	577,239

% change - GAAP revenue		(10.6	%)					(2.3	%)

% change - cash revenue		(11.3	%)					(1.8	%)

(1)		See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional detail.

(2)		Monthly Leasing Concessions granted began to decline in March 2021. Leasing Concessions granted in February, March and April (preliminary) 2021 are $6.1 million, $4.9 million and $3.6 million, respectively.


Same Store Resident/Tenant Accounts Receivable Balances Including 77,060 Same Store Apartment Units $ in thousands

	Residential							Non-Residential
Balance Sheet (Other assets):	March 31, 2021				December 31, 2020			March 31, 2021			December 31, 2020
Resident/tenant accounts receivable balances	$	37,590			$	31,180		$	6,554		$	7,340
Allowance for doubtful accounts		(31,596	)			(23,873	)		(5,724	)		(6,527	)
Net receivable balances	$	5,994		(1)	$	7,307		$	830		$	813

Straight-line receivable balances	$	25,096		(2)	$	19,747		$	13,392		$	13,399

(1)		The Company held same store Residential security deposits approximating 31.9% of the net receivable balance at March 31, 2021.

(2)		Total same store Residential Leasing Concessions granted in the first quarter of 2021 were approximately $17.0 million. The straight-line receivable balance of $25.1 million reflects Residential Leasing Concessions that the Company expects will be primarily recognized as a reduction of rental revenues for the remainder of 2021 and the first quarter of 2022.

Same Store Residential Bad Debt Including 77,060 Same Store Apartment Units $ in thousands

Income Statement (Rental income):	Q1 2021			Q4 2020			Q1 2020
Bad Debt, Net	$	13,689		$	13,199		$	3,687
% of Same Store Residential Revenues		2.4	%		2.3	%		0.6	%

Equity Residential First Quarter 2021 vs. First Quarter 2020 Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Year's Quarter
Markets/Metro Areas	Apartment Units		Q1 2021 % of Actual NOI			Q1 2021 Average Rental Rate		Q1 2021 Weighted Average Physical Occupancy %			Q1 2021 Turnover			Revenues				Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover

Los Angeles		16,533		20.9	%	$	2,423		95.8	%		10.1	%		(8.1	%)			1.1	%		(12.2	%)		(7.9	%)		(0.2	%)		(1.0	%)
Orange County		4,028		5.3	%		2,205		97.0	%		7.8	%		(3.2	%)			2.7	%		(4.9	%)		(3.3	%)		0.2	%		(1.2	%)
San Diego		2,706		3.9	%		2,376		97.2	%		10.5	%		(0.2	%)			1.2	%		(0.6	%)		(0.6	%)		0.4	%		(0.8	%)
Subtotal – Southern California		23,267		30.1	%		2,380		96.2	%		9.7	%		(6.5	%)			1.3	%		(9.6	%)		(6.4	%)		(0.1	%)		(1.1	%)

San Francisco		12,707		19.5	%		2,903		93.8	%		11.4	%		(15.7	%)			4.7	%		(22.6	%)		(13.1	%)		(2.9	%)		1.7	%
Washington DC		14,569		17.6	%		2,325		95.9	%		9.7	%		(5.5	%)			4.0	%		(9.6	%)		(5.2	%)		(0.3	%)		1.1	%
New York		9,606		11.0	%		3,464		91.4	%		8.3	%		(16.9	%)			4.4	%		(34.0	%)		(12.2	%)		(5.3	%)		1.1	%
Seattle		8,941		10.7	%		2,258		95.7	%		11.1	%		(10.3	%)			6.0	%		(16.5	%)		(9.0	%)		(1.4	%)		0.0	%
Boston		6,346		9.4	%		2,852		95.3	%		8.9	%		(10.8	%)			4.9	%		(17.2	%)		(10.3	%)		(0.5	%)		(0.2	%)
Denver		1,624		1.7	%		1,984		96.1	%		12.3	%		(2.7	%)			9.5	%		(7.7	%)		(3.4	%)		0.6	%		(2.1	%)

Total		77,060		100.0	%	$	2,601		95.0	%		9.9	%		(10.6	%)	(1)		3.9	%		(17.1	%)		(9.3	%)		(1.4	%)		0.2	%

(1)

With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues decreased 11.3% in the first quarter of 2021 compared to the first quarter of 2020. See page 10 for additional detail and reconciliations.

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.2% of total revenues for the quarter ended March 31, 2021.

Equity Residential First Quarter 2021 vs. Fourth Quarter 2020 Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Quarter
Markets/Metro Areas	Apartment Units		Q1 2021 % of Actual NOI			Q1 2021 Average Rental Rate		Q1 2021 Weighted Average Physical Occupancy %			Q1 2021 Turnover			Revenues				Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover

Los Angeles		16,533		20.8	%	$	2,423		95.8	%		10.1	%		(1.4	%)			3.5	%		(3.7	%)		(1.4	%)		0.0	%		(3.6	%)
Orange County		4,028		5.3	%		2,205		97.0	%		7.8	%		(0.6	%)			5.5	%		(2.4	%)		(0.8	%)		0.2	%		(2.9	%)
San Diego		2,706		3.9	%		2,376		97.2	%		10.5	%		0.0	%			3.3	%		(1.0	%)		0.1	%		(0.1	%)		(0.9	%)
Subtotal – Southern California		23,267		30.0	%		2,380		96.2	%		9.7	%		(1.1	%)			3.7	%		(3.1	%)		(1.1	%)		0.1	%		(3.2	%)

San Francisco		12,707		19.4	%		2,903		93.8	%		11.4	%		(3.7	%)			6.6	%		(7.8	%)		(4.9	%)		1.1	%		(4.3	%)
Washington DC		14,569		17.6	%		2,325		95.9	%		9.7	%		(2.1	%)			6.1	%		(5.8	%)		(2.6	%)		0.5	%		(3.1	%)
New York		9,606		11.0	%		3,464		91.4	%		8.3	%		(2.4	%)			5.8	%		(11.3	%)		(4.2	%)		1.6	%		(3.5	%)
Seattle		9,078		10.8	%		2,255		95.7	%		11.1	%		(3.4	%)			5.6	%		(7.2	%)		(4.6	%)		1.2	%		(3.0	%)
Boston		6,430		9.5	%		2,853		95.3	%		8.9	%		(2.1	%)			6.8	%		(6.1	%)		(3.6	%)		1.4	%		(4.0	%)
Denver		1,624		1.7	%		1,984		96.1	%		12.3	%		0.1	%			11.6	%		(4.6	%)		(0.9	%)		1.0	%		(3.6	%)

Total		77,281		100.0	%	$	2,600		95.0	%		10.0	%		(2.3	%)	(1)		5.6	%		(6.2	%)		(3.1	%)		0.8	%		(3.4	%)

(1)

With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues decreased 1.8% in the first quarter of 2021 compared to the fourth quarter of 2020. See page 10 for additional detail and reconciliations.

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.2% of total revenues for the quarter ended March 31, 2021.

Equity Residential Same Store Residential Net Effective Lease Pricing Statistics For 77,060 Same Store Apartment Units

	New Lease Change (1)						Renewal Rate Achieved (1)						Blended Rate (1)
Markets/Metro Areas	Q1 2021			Q4 2020			Q1 2021			Q4 2020			Q1 2021			Q4 2020

Los Angeles		(7.6	%)		(8.9	%)		(0.2	%)		(0.5	%)		(4.0	%)		(4.6	%)
Orange County		0.1	%		(2.8	%)		3.0	%		2.1	%		1.7	%		0.0	%
San Diego		2.1	%		(0.1	%)		3.9	%		2.5	%		3.1	%		1.4	%
Subtotal – Southern California		(5.5	%)		(7.3	%)		0.8	%		0.3	%		(2.3	%)		(3.3	%)

San Francisco		(22.0	%)		(26.8	%)		(9.9	%)		(7.2	%)		(17.3	%)		(19.1	%)
Washington DC		(14.4	%)		(18.6	%)		(2.9	%)		(1.9	%)		(9.0	%)		(11.5	%)
New York		(28.0	%)		(27.1	%)		(9.3	%)		(6.5	%)		(20.5	%)		(18.5	%)
Seattle		(20.7	%)		(26.8	%)		(10.1	%)		(6.6	%)		(15.9	%)		(19.2	%)
Boston		(20.4	%)		(27.0	%)		(7.6	%)		(5.0	%)		(14.8	%)		(18.3	%)
Denver		(7.1	%)		(10.4	%)		3.5	%		1.6	%		(3.5	%)		(6.2	%)

Total		(17.7	%)		(20.5	%)		(5.1	%)		(3.4	%)		(12.1	%)		(13.0	%)

(1)

See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for definitions. See page 3 for April 2021 preliminary data.

Equity Residential

First Quarter 2021 vs. First Quarter 2020 Total Same Store Operating Expenses Including 77,060 Same Store Apartment Units $ in thousands

	Q1 2021		Q1 2020		$ Change (1)			% Change			% of Q1 2021 Operating Expenses

Real estate taxes	$	90,767	$	88,323	$	2,444			2.8	%		42.8	%
On-site payroll		42,993		43,009		(16	)		0.0	%		20.3	%
Utilities		29,945		27,674		2,271			8.2	%		14.1	%
Repairs and maintenance		25,835		23,439		2,396			10.2	%		12.2	%
Insurance		7,040		6,321		719			11.4	%		3.3	%
Leasing and advertising		2,803		2,337		466			19.9	%		1.3	%
Other on-site operating expenses		12,669		13,098		(429	)		(3.3	%)		6.0	%

Total Same Store Operating Expenses (2) (includes Residential and Non-Residential)	$	212,052	$	204,201	$	7,851			3.8	%		100.0	%

(1)		The quarter-over-quarter changes were primarily affected by the following factors:

		Real estate taxes – Increase is lower than prior expectations due to lower rates and assessed values.

		On-site payroll – Improved sales and service staff utilization from various technology initiatives offset other general payroll pressures.

		Utilities – Increase driven by higher usage of water, sewer and trash.

		Repairs and maintenance – Increase primarily driven by non-comparable items like greater snowfall on the East Coast and higher turnover expense from accelerated leasing as well as increases in minimum wage on contract services.

		Insurance – Increase due to higher premiums on property insurance renewal due to challenging conditions in the insurance market.

		Leasing and advertising – Increase due primarily to increased digital advertising and selective use of outside broker fees on targeted leasing activity.

		Other on-site operating expenses – Decrease primarily driven by lower ground lease costs due to a lease modification at one property.

(2)		See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

Equity Residential

Debt Summary as of March 31, 2021 ($ in thousands)

	Debt Balances (1)		% of Total			Weighted Average Rates (1)			Weighted Average Maturities (years)

Secured	$	2,270,700		28.3	%		3.18	%		6.1
Unsecured		5,766,856		71.7	%		3.49	%		10.0

Total	$	8,037,556		100.0	%		3.40	%		8.9
Fixed Rate Debt:
Secured – Conventional	$	1,899,917		23.7	%		3.70	%		4.7
Unsecured – Public		5,337,103		66.4	%		3.77	%		10.8

Fixed Rate Debt		7,237,020		90.1	%		3.75	%		9.1

Floating Rate Debt:
Secured – Conventional		40,546		0.5	%		2.38	%		1.2
Secured – Tax Exempt		330,237		4.1	%		0.45	%		15.4
Unsecured – Revolving Credit Facility		—		—			—			3.6
Unsecured – Commercial Paper Program (2)		429,753		5.3	%		0.30	%		—

Floating Rate Debt		800,536		9.9	%		0.45	%		6.7

Total	$	8,037,556		100.0	%		3.40	%		8.9

(1)		See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.
(2)		At March 31, 2021, the weighted average maturity of commercial paper outstanding was 69 days. The weighted average amount outstanding for the quarter ended March 31, 2021 was approximately $457.3 million.

Note: The Company capitalized interest of approximately $3.8 million and $1.8 million during the quarters ended March 31, 2021 and 2020, respectively.

Equity Residential

Debt Maturity Schedule as of March 31, 2021 ($ 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)

2021	$	5,593		$	430,000		(2)	$	435,593			5.4	%		3.27	%		0.32	%
2022		264,185			40,846				305,031			3.8	%		3.25	%		3.12	%
2023		1,325,588			3,500				1,329,088			16.4	%		3.74	%		3.73	%
2024		—			6,100				6,100			0.1	%	N/A				0.06	%
2025		450,000			8,200				458,200			5.6	%		3.38	%		3.32	%
2026		592,025			9,000				601,025			7.4	%		3.58	%		3.53	%
2027		400,000			9,800				409,800			5.0	%		3.25	%		3.17	%
2028		900,000			10,700				910,700			11.2	%		3.79	%		3.75	%
2029		888,120			11,500				899,620			11.1	%		3.30	%		3.26	%
2030		1,095,000			12,600				1,107,600			13.6	%		2.55	%		2.52	%
2031+		1,379,350			275,535				1,654,885			20.4	%		4.37	%		3.66	%
Subtotal		7,299,861			817,781				8,117,642			100.0	%		3.55	%		3.23	%
Deferred Financing Costs and Unamortized (Discount)		(62,841	)		(17,245	)			(80,086	)	N/A			N/A			N/A

Total	$	7,237,020		$	800,536			$	8,037,556			100.0	%		3.55	%		3.23	%

(1)		See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.
(2)		Represents principal outstanding on the Company’s commercial paper program.

Equity Residential

Selected Unsecured Public Debt Covenants

	March 31,	December 31,
	2021	2020
Debt to Adjusted Total Assets (not to exceed 60%)	30.4%	30.5%

Secured Debt to Adjusted Total Assets (not to exceed 40%)	9.4%	9.6%

Consolidated Income Available for Debt Service to
Maximum Annual Service Charges
(must be at least 1.5 to 1)	5.30	5.42

Total Unencumbered Assets to Unsecured Debt
(must be at least 125%)	454.1%	458.3%

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

	March 31,	December 31,
	2021	2020
Total debt to Normalized EBITDAre	5.29x	4.99x

Net debt to Normalized EBITDAre	5.25x	4.96x

Unencumbered NOI as a % of total NOI	87.5%	86.6%

Note: See Normalized EBITDAre Reconciliations for detail.

Equity Residential

Capital Structure as of March 31, 2021 (Amounts in thousands except for share/unit and per share amounts)

Secured Debt					$	2,270,700	28.3	%
Unsecured Debt						5,766,856	71.7	%

Total Debt						8,037,556	100.0	%	22.5	%

Common Shares (includes Restricted Shares)		372,917,413	96.4	%
Units (includes OP Units and Restricted Units)		14,042,374	3.6	%

Total Shares and Units		386,959,787	100.0	%
Common Share Price at March 31, 2021	$	71.63
						27,717,930	99.9	%
Perpetual Preferred Equity (see below)						37,280	0.1	%

Total Equity						27,755,210	100.0	%	77.5	%

Total Market Capitalization					$	35,792,766			100.0	%


Perpetual Preferred Equity as of March 31, 2021 (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

	Q1 2021		Q1 2020

Weighted Average Amounts Outstanding for Net Income Purposes:
Common Shares - basic		372,279,711		371,582,086
Shares issuable from assumed conversion/vesting of:
- OP Units		13,050,142		13,003,900
- long-term compensation shares/units		1,586,077		2,363,095

Total Common Shares and Units - diluted		386,915,930		386,949,081

Weighted Average Amounts Outstanding for FFO and Normalized FFO Purposes:
Common Shares - basic		372,279,711		371,582,086
OP Units - basic		13,050,142		13,003,900

Total Common Shares and OP Units - basic		385,329,853		384,585,986
Shares issuable from assumed conversion/vesting of:
- long-term compensation shares/units		1,586,077		2,363,095

Total Common Shares and Units - diluted		386,915,930		386,949,081

Period Ending Amounts Outstanding:
Common Shares (includes Restricted Shares)		372,917,413		372,104,054
Units (includes OP Units and Restricted Units)		14,042,374		13,932,433

Total Shares and Units		386,959,787		386,036,487

Equity Residential Development and Lease-Up Projects as of March 31, 2021 (Amounts in thousands except for project and apartment unit amounts)

		No. of		Total Budgeted		Total Book		Total Book Value Not						Estimated/Actual
Projects	Location	Apartment Units		Capital Cost		Value to Date		Placed in Service		Total Debt		Percentage Completed		Initial Occupancy			Completion Date	Stabilization Date	Percentage Leased		Percentage Occupied

Projects Under Development - Wholly Owned:
Alcott Apartments (fka West End Tower)	Boston, MA		470	$	409,749	$	310,132	$	310,132	$	—	78%		Q3 2021			Q4 2021	Q1 2023		—		—
The Edge (fka 4885 Edgemoor Lane) (A)	Bethesda, MD		154		75,271		62,007		62,007		—	86%		Q3 2021			Q3 2021	Q3 2022		—		—

Projects Under Development - Wholly Owned			624		485,020		372,139		372,139		—

Projects Under Development - Partially Owned:
Aero Apartments (B)	Alameda, CA		200		117,794		103,871		103,871		40,546	92%		Q2 2021			Q2 2021	Q2 2022	3%			—

Projects Under Development - Partially Owned			200		117,794		103,871		103,871		40,546

Total Projects Under Development			824	$	602,814	$	476,010	$	476,010	$	40,546

Land Held for Development		N/A		N/A		$	88,360	$	88,360	$	—

NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS												Total Budgeted Capital Cost		Q1 2021 NOI
Projects Under Development												$	602,814	$	(57	)

(A)		The Edge – The land under this project is subject to a long-term ground lease. This project is adjacent to an existing apartment property owned by the Company.

(B)		Aero Apartments – This development project is owned 90% by the Company and 10% by a third party partner in a joint venture consolidated by the Company. Construction is being partially funded with a construction loan that is non-recourse to the Company. The joint venture partner has funded $4.7 million for its allocated share of the project equity and serves as the developer of the project.

Equity Residential Capital Expenditures to Real Estate For the Quarter Ended March 31, 2021 (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		77,060		829		77,889

Building Improvements	$	15,976	$	38	$	16,014	$	207

Renovation Expenditures (1)		5,261		—		5,261		68

Replacements		7,381		23		7,404		96

Capital Expenditures to Real Estate (2)	$	28,618	$	61	$	28,679	$	371

(1)		Renovation Expenditures on 222 same store apartment units for the quarter ended March 31, 2021 approximated $23,701 per apartment unit renovated.

(2)		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						2021			2020
	March 31, 2021			December 31, 2020			Q1			Q4			Q3			Q2			Q1
Net income	$	690,194		$	962,501		$	60,364		$	262,984		$	95,365		$	271,481		$	332,671
Interest expense incurred, net		346,841			365,073			67,358			116,724			80,874			81,885			85,590
Amortization of deferred financing costs		9,083			8,939			2,185			2,686			2,101			2,111			2,041
Amortization of above/below market lease intangibles		4,392			4,391			1,098			1,098			1,098			1,098			1,097
Depreciation		808,372			820,832			199,962			201,829			200,605			205,976			212,422
Income and other tax expense (benefit)		952			852			153			350			262			187			53

EBITDA		1,859,834			2,162,588			331,120			585,671			380,305			562,738			633,874

Net (gain) loss on sales of real estate properties		(323,787	)		(531,807	)		43			(179,589	)		25			(144,266	)		(207,977	)
Net (gain) loss on sales of unconsolidated entities - operating assets		(1,640	)		(1,636	)		(4	)		(636	)		(1,000	)		—			—

EBITDAre		1,534,407			1,629,145			331,159			405,446			379,330			418,472			425,897

West Point, MS (39773)

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Equity Residential Reports First Quarter 2021 Results