UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, ~~2020~~2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

Commission File Number: 1-12252 (Equity Residential)

Commission File Number: 0-24920 (ERP Operating Limited Partnership)

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

Maryland (Equity Residential)		13-3675988 (Equity Residential)
Illinois (ERP Operating Limited Partnership)		36-3894853 (ERP Operating Limited Partnership)
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Two North Riverside Plaza, Chicago, Illinois 60606		(312) 474-1300
(Address of principal executive offices) (Zip Code)		(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares of Beneficial Interest, $0.01 Par Value (Equity Residential)	EQR	New York Stock Exchange
7.57% Notes due August 15, 2026 (ERP Operating Limited Partnership)	N/A	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Equity Residential Yes ☒ No ☐	ERP Operating Limited Partnership Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Equity Residential Yes ☒ No ☐	ERP Operating Limited Partnership Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Equity Residential:

ERP Operating Limited Partnership:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


Equity Residential ☐	ERP Operating Limited Partnership ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Equity Residential Yes ☐ No ☒	ERP Operating Limited Partnership Yes ☐ No ☒

The number of EQR Common Shares of Beneficial Interest, $0.01 par value, outstanding on July ~~28, 2020~~23, 2021 was ~~372,210,138.~~374,457,337.

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EXPLANATORY NOTE

This report combines the reports on Form 10-Q for the quarterly period ended June 30, ~~2020~~2021 of Equity Residential and ERP Operating Limited Partnership. Unless stated otherwise or the context otherwise requires, references to “EQR” mean Equity Residential, a Maryland real estate investment trust (“REIT”), and references to “ERPOP” mean ERP Operating Limited Partnership, an Illinois limited partnership. References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP. The following chart illustrates the Company’s and the Operating Partnership’s corporate structure:

EQR is the general partner of, and as of June 30, ~~2020~~2021 owned an approximate ~~96.4%~~96.7% ownership interest in, ERPOP. The remaining ~~3.6%~~3.3% interest is owned by limited partners. As the sole general partner of ERPOP, EQR has exclusive control of ERPOP’s day-to-day management. Management operates the Company and the Operating Partnership as one business. The management of EQR consists of the same members as the management of ERPOP.

The Company is structured as an umbrella partnership REIT (“UPREIT”) and EQR contributes all net proceeds from its various equity offerings to ERPOP. In return for those contributions, EQR receives a number of OP Units (see definition below) in ERPOP equal to the number of Common Shares it has issued in the equity offering. The Company may acquire properties in transactions that include the issuance of OP Units as consideration for the acquired properties. Such transactions may, in certain circumstances, enable the sellers to defer in whole or in part, the recognition of taxable income or gain that might otherwise result from the sales. This is one of the reasons why the Company is structured in the manner shown above. Based on the terms of ERPOP’s partnership agreement, OP Units can be exchanged with Common Shares on a one-for-one basis because the Company maintains a one-for-one relationship between the OP Units of ERPOP issued to EQR and the outstanding Common Shares.

The Company believes that combining the reports on Form 10-Q of EQR and ERPOP into this single report provides the following benefits:

•

enhances investors’ understanding of the Company and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

•

eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both the Company and the Operating Partnership; and

•

creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

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The Company believes it is important to understand the few differences between EQR and ERPOP in the context of how EQR and ERPOP operate as a consolidated company. All of the Company’s property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR’s primary function is acting as the general partner of ERPOP. EQR also issues equity from time to time, the net proceeds of which it is obligated to contribute to ERPOP. EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company’s ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by EQR (which are contributed to the capital of ERPOP in exchange for additional partnership interests in ERPOP (“OP Units”) (on a one-for-one Common Share per OP Unit basis) or additional preference units in ERPOP (on a one-for-one preferred share per preference unit basis)), the Operating Partnership generates all remaining capital required by the Company’s business. These sources include the Operating Partnership’s working capital, net cash provided by operating activities, borrowings under its revolving credit facility and/or commercial paper program, the issuance of secured and unsecured debt and partnership interests, and proceeds received from disposition of certain properties and joint venture interests.

Shareholders’ equity, partners’ capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership. The limited partners of the Operating Partnership are accounted for as partners’ capital in the Operating Partnership’s financial statements and as noncontrolling interests in the Company’s financial statements. The noncontrolling interests in the Operating Partnership’s financial statements include the interests of unaffiliated partners in various consolidated partnerships. The noncontrolling interests in the Company’s financial statements include the same noncontrolling interests at the Operating Partnership level and limited partner OP Unit holders of the Operating Partnership. The differences between shareholders’ equity and partners’ capital result from differences in the equity issued at the Company and Operating Partnership levels.

To help investors understand the differences between the Company and the Operating Partnership, this report provides separate consolidated financial statements for the Company and the Operating Partnership; a single set of consolidated notes to such financial statements that includes separate discussions of each entity’s debt, noncontrolling interests and shareholders’ equity or partners’ capital, as applicable; and a combined Management’s Discussion and Analysis of Financial Condition and Results of Operations section that includes discrete information related to each entity.

This report also includes separate Part I, Item 4, Controls and Procedures, sections and separate Exhibits 31 and 32 certifications for each of the Company and the Operating Partnership in order to establish that the requisite certifications have been made and that the Company and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18 U.S.C. §1350.

In order to highlight the differences between the Company and the Operating Partnership, the separate sections in this report for the Company and the Operating Partnership specifically refer to the Company and the Operating Partnership. In the sections that combine disclosure of the Company and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and joint ventures and holds assets and debt, reference to the Company is appropriate because the Company is one business and the Company operates that business through the Operating Partnership.

As general partner with control of ERPOP, EQR consolidates ERPOP for financial reporting purposes, and EQR essentially has no assets or liabilities other than its investment in ERPOP. Therefore, the assets and liabilities of the Company and the Operating Partnership are the same on their respective financial statements. The separate discussions of the Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.

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TABLE OF CONTENTS

	PAGE

PART I.

Item 1. Financial Statements of Equity Residential:

Consolidated Balance Sheets as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020	2

Consolidated Statements of Operations and Comprehensive Income for the six months and quarters ended June 30, ~~2020~~2021 and ~~2019~~2020	3

Consolidated Statements of Cash Flows for the six months ended June 30, ~~2020~~2021 and ~~2019~~2020	5

Consolidated Statements of Changes in Equity for the six months and quarters ended June 30, ~~2020~~2021 and ~~2019~~2020	8

Financial Statements of ERP Operating Limited Partnership:

Consolidated Balance Sheets as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020	10

Consolidated Statements of Operations and Comprehensive Income for the six months and quarters ended June 30, ~~2020~~2021 and ~~2019~~2020	11

Consolidated Statements of Cash Flows for the six months ended June 30, ~~2020~~2021 and ~~2019~~2020	13

Consolidated Statements of Changes in Capital for the six months and quarters ended June 30, ~~2020~~2021 and ~~2019~~2020	16

Notes to Consolidated Financial Statements of Equity Residential and ERP Operating Limited Partnership	18

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3635

Item 3. Quantitative and Qualitative Disclosures about Market Risk	52

Item 4. Controls and Procedures	52

PART II.

Item 1. Legal Proceedings	53

Item 1A. Risk Factors	53

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	5453

Item 3. Defaults Upon Senior Securities	5553

Item 4. Mine Safety Disclosures	5553

Item 5. Other Information	5553

Item 6. Exhibits	5553

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EQUITY RESIDENTIAL

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands except for share amounts)

(Unaudited)

	June 30,			December 31,			June 30,			December 31,
	2020			2019			2021			2020
ASSETS
Land	$	5,789,307		$	5,936,188		$	5,780,705		$	5,785,367
Depreciable property		20,997,903			21,319,101			21,161,984			20,920,654
Projects under development		274,825			181,630			372,243			411,134
Land held for development		102,361			96,688			90,446			86,170
Investment in real estate		27,164,396			27,533,607			27,405,378			27,203,325
Accumulated depreciation		(7,537,713	)		(7,276,786	)		(8,164,287	)		(7,859,657	)
Investment in real estate, net		19,626,683			20,256,821			19,241,091			19,343,668
Investments in unconsolidated entities		55,310			52,238			53,364			52,782
Cash and cash equivalents		187,416			45,753			39,492			42,591
Restricted deposits		58,117			71,246			353,009			57,137
Right-of-use assets		505,077			512,774			480,671			499,287
Other assets		282,348			233,937			296,719			291,426
Total assets	$	20,714,951		$	21,172,769		$	20,464,346		$	20,286,891

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,340,757		$	1,941,610		$	2,280,251		$	2,293,890
Notes, net		6,081,102			6,077,513			5,338,671			5,335,536
Line of credit and commercial paper		—			1,017,833			631,770			414,830
Accounts payable and accrued expenses		109,776			94,350			114,288			107,366
Accrued interest payable		67,589			66,852			65,814			65,896
Lease liabilities		330,135			331,334			314,379			329,130
Other liabilities		315,208			346,963			341,817			345,064
Security deposits		64,005			70,062			62,228			60,480
Distributions payable		232,208			218,326			232,958			232,262
Total liabilities		9,540,780			10,164,843			9,382,176			9,184,454

Commitments and contingencies

Redeemable Noncontrolling Interests – Operating Partnership		336,695			463,400			440,123			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 June 30, 2020 and December 31, 2019		37,280			37,280
Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 372,209,012 shares issued and outstanding as of June 30, 2020 and 371,670,884 shares issued and outstanding as of December 31, 2019		3,722			3,717
Preferred Shares of beneficial interest, $0.01 par value; 100,000,000 shares authorized; 745,600 shares issued and outstanding as of June 30, 2021 and December 31, 2020								37,280			37,280
Common Shares of beneficial interest, $0.01 par value; 1,000,000,000 shares authorized; 374,354,830 shares issued and outstanding as of June 30, 2021 and 372,302,000 shares issued and outstanding as of December 31, 2020								3,744			3,723
Paid in capital		9,118,332			8,965,577			9,110,121			9,128,599
Retained earnings		1,505,694			1,386,495			1,321,875			1,399,715
Accumulated other comprehensive income (loss)		(67,355	)		(77,563	)		(39,029	)		(43,666	)
Total shareholders’ equity		10,597,673			10,315,506			10,433,991			10,525,651
Noncontrolling Interests:
Operating Partnership		235,169			227,837			205,691			233,162
Partially Owned Properties		4,634			1,183			2,365			4,673
Total Noncontrolling Interests		239,803			229,020			208,056			237,835
Total equity		10,837,476			10,544,526			10,642,047			10,763,486
Total liabilities and equity	$	20,714,951		$	21,172,769		$	20,464,346		$	20,286,891

See accompanying notes

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EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands except per share data)

(Unaudited)

	Six Months Ended June 30,						Quarter Ended June 30,						Six Months Ended June 30,						Quarter Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
REVENUES
Rental income	$	1,335,837		$	1,331,676		$	653,532		$	669,374		$	1,195,661		$	1,335,837		$	598,059		$	653,532

EXPENSES
Property and maintenance		220,268			223,531			104,452			108,461			224,800			220,268			107,746			104,452
Real estate taxes and insurance		192,770			182,888			95,038			91,446			200,871			192,770			97,401			95,038
Property management		51,317			50,765			23,608			24,369			50,585			51,317			24,455			23,608
General and administrative		26,353			29,710			11,835			14,329			30,061			26,353			14,678			11,835
Depreciation		418,398			404,723			205,976			200,508			400,635			418,398			200,673			205,976
Total expenses		909,106			891,617			440,909			439,113			906,952			909,106			444,953			440,909

Net gain (loss) on sales of real estate properties		352,243			138,835			144,266			138,856			223,695			352,243			223,738			144,266

Operating income		778,974			578,894			356,889			369,117			512,404			778,974			376,844			356,889

Interest and other income		3,471			1,925			1,511			1,152			24,320			3,471			24,104			1,511
Other expenses		(4,227	)		(8,392	)		(1,694	)		(5,117	)		(7,452	)		(4,227	)		(3,342	)		(1,694	)
Interest:
Expense incurred, net		(167,475	)		(203,840	)		(81,885	)		(108,902	)		(134,482	)		(167,475	)		(67,124	)		(81,885	)
Amortization of deferred financing costs		(4,152	)		(5,783	)		(2,111	)		(3,647	)		(4,124	)		(4,152	)		(1,939	)		(2,111	)
Income before income and other taxes, income (loss) from investments in unconsolidated entities and net gain (loss) on sales of land parcels		606,591			362,804			272,710			252,603			390,666			606,591			328,543			272,710
Income and other tax (expense) benefit		(240	)		(484	)		(187	)		(246	)		(395	)		(240	)		(242	)		(187	)
Income (loss) from investments in unconsolidated entities		(2,199	)		68,058			(1,042	)		68,765			(1,872	)		(2,199	)		(261	)		(1,042	)
Net gain (loss) on sales of land parcels		—			178			—			177			5			—			—			—
Net income		604,152			430,556			271,481			321,299			388,404			604,152			328,040			271,481
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership		(21,248	)		(15,429	)		(9,713	)		(11,510	)		(13,056	)		(21,248	)		(10,913	)		(9,713	)
Partially Owned Properties		(13,410	)		(1,620	)		(880	)		(821	)		(1,423	)		(13,410	)		(741	)		(880	)
Net income attributable to controlling interests		569,494			413,507			260,888			308,968			373,925			569,494			316,386			260,888
Preferred distributions		(1,545	)		(1,545	)		(772	)		(772	)		(1,545	)		(1,545	)		(772	)		(772	)
Net income available to Common Shares	$	567,949		$	411,962		$	260,116		$	308,196		$	372,380		$	567,949		$	315,614		$	260,116

Earnings per share – basic:
Net income available to Common Shares	$	1.53		$	1.11		$	0.70		$	0.83		$	1.00		$	1.53		$	0.84		$	0.70
Weighted average Common Shares outstanding		371,689			369,952			371,795			370,342			373,050			371,689			373,812			371,795

Earnings per share – diluted:
Net income available to Common Shares	$	1.53		$	1.11		$	0.70		$	0.83		$	1.00		$	1.53		$	0.84		$	0.70
Weighted average Common Shares outstanding		386,272			385,644			385,913			386,107			387,367			386,272			387,820			385,913

See accompanying notes

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EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)

(Amounts in thousands except per share data)

(Unaudited)

	Six Months Ended June 30,						Quarter Ended June 30,						Six Months Ended June 30,						Quarter Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Comprehensive income:
Net income	$	604,152		$	430,556		$	271,481		$	321,299		$	388,404		$	604,152		$	328,040		$	271,481
Other comprehensive income (loss):
Other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the period		(1,190	)		(33,765	)		(223	)		(19,345	)		—			(1,190	)		—			(223	)
Losses reclassified into earnings from other comprehensive income		11,398			8,902			5,764			4,509			4,637			11,398			2,334			5,764
Other comprehensive income (loss)		10,208			(24,863	)		5,541			(14,836	)		4,637			10,208			2,334			5,541
Comprehensive income		614,360			405,693			277,022			306,463			393,041			614,360			330,374			277,022
Comprehensive (income) attributable to Noncontrolling Interests		(35,026	)		(16,150	)		(10,792	)		(11,797	)		(14,641	)		(35,026	)		(11,732	)		(10,792	)
Comprehensive income attributable to controlling interests	$	579,334		$	389,543		$	266,230		$	294,666		$	378,400		$	579,334		$	318,642		$	266,230

See accompanying notes

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EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Six Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	604,152		$	430,556		$	388,404		$	604,152
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		418,398			404,723			400,635			418,398
Amortization of deferred financing costs		4,152			5,783			4,124			4,152
Amortization of above/below market lease intangibles		(35	)		(35	)		(154	)		(35	)
Amortization of discounts and premiums on debt		2,553			17,795			2,593			2,553
Amortization of deferred settlements on derivative instruments		11,392			8,896			4,631			11,392
Amortization of right-of-use assets		5,892			6,952			7,308			5,892
Write-off of pursuit costs		3,278			2,987			2,647			3,278
(Income) loss from investments in unconsolidated entities		2,199			(68,058	)		1,872			2,199
Distributions from unconsolidated entities – return on capital		100			2,387			—			100
Net (gain) loss on sales of real estate properties		(352,243	)		(138,835	)		(223,695	)		(352,243	)
Net (gain) loss on sales of land parcels		—			(178	)		(5	)		—
Realized/unrealized (gain) loss on derivative instruments		25			—			—			25
Realized (gain) loss on sale of investment securities								(23,432	)		—
Compensation paid with Company Common Shares		13,475			16,782			16,077			13,475
Other operating activities, net		1,805			—			—			1,805
Changes in assets and liabilities:
(Increase) decrease in other assets		(61,422	)		1,610			(4,462	)		(61,422	)
Increase (decrease) in accounts payable and accrued expenses		5,954			22,435			6,514			5,954
Increase (decrease) in accrued interest payable		737			1,536			(82	)		737
Increase (decrease) in lease liabilities		(1,199	)		(1,171	)		(3,211	)		(1,199	)
Increase (decrease) in other liabilities		(18,070	)		(25,161	)		(5,387	)		(18,070	)
Increase (decrease) in security deposits		(6,057	)		1,769			1,748			(6,057	)
Net cash provided by operating activities		635,086			690,773			576,125			635,086
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate – acquisitions		—			(653,132	)		(281,426	)		—
Investment in real estate – development/other		(95,215	)		(93,210	)		(125,156	)		(95,215	)
Capital expenditures to real estate		(61,265	)		(81,528	)		(66,443	)		(61,265	)
Non-real estate capital additions		(15,536	)		(1,466	)		(1,042	)		(15,536	)
Interest capitalized for real estate under development		(4,102	)		(2,679	)		(8,176	)		(4,102	)
Proceeds from disposition of real estate, net		747,600			393,439			406,922			747,600
Investments in unconsolidated entities		(5,626	)		(8,572	)		(4,491	)		(5,626	)
Distributions from unconsolidated entities – return of capital		—			78,262			4			—
Purchase of investment securities and other investments		(509	)		(269	)		(166,945	)		(509	)
Proceeds from sale of investment securities								191,398			—
Net cash provided by (used for) investing activities		565,347			(369,155	)		(55,355	)		565,347

See accompanying notes

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EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Six Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2021			2020
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt financing costs	$	(2,907	)	$	(6,069	)	$	(362	)	$	(2,907	)
Mortgage notes payable, net:
Proceeds		495,145			295,620			47,759			495,145
Lump sum payoffs		(91,500	)		(95,500	)		(59,880	)		(91,500	)
Scheduled principal repayments		(3,873	)		(3,110	)		(3,713	)		(3,873	)
Notes, net:
Proceeds		—			597,480
Line of credit and commercial paper:
Line of credit proceeds		1,870,000			1,995,000			—			1,870,000
Line of credit repayments		(1,890,000	)		(1,995,000	)		—			(1,890,000	)
Commercial paper proceeds		6,726,167			7,775,817			2,819,940			6,726,167
Commercial paper repayments		(7,724,000	)		(8,275,000	)		(2,603,000	)		(7,724,000	)
Proceeds from (payments on) settlement of derivative instruments		(1,215	)		(41,616	)		—			(1,215	)
Finance ground lease principal payments								(232	)		—
Proceeds from Employee Share Purchase Plan (ESPP)		2,359			1,652			2,667			2,359
Proceeds from exercise of options		11,322			48,487			39,623			11,322
Payment of offering costs		—			(155	)
Other financing activities, net		(31	)		(49	)		(31	)		(31	)
Contributions – Noncontrolling Interests – Partially Owned Properties		341			4,594			—			341
Contributions – Noncontrolling Interests – Operating Partnership		12			—			—			12
Distributions:
Common Shares		(435,427	)		(409,943	)		(448,983	)		(435,427	)
Preferred Shares		(1,545	)		(773	)		(1,545	)		(1,545	)
Noncontrolling Interests – Operating Partnership		(16,478	)		(14,728	)		(16,540	)		(16,478	)
Noncontrolling Interests – Partially Owned Properties		(10,269	)		(5,170	)		(3,700	)		(10,269	)
Net cash provided by (used for) financing activities		(1,071,899	)		(128,463	)		(227,997	)		(1,071,899	)
Net increase (decrease) in cash and cash equivalents and restricted deposits		128,534			193,155			292,773			128,534
Cash and cash equivalents and restricted deposits, beginning of period		116,999			116,313			99,728			116,999
Cash and cash equivalents and restricted deposits, end of period	$	245,533		$	309,468		$	392,501		$	245,533

Cash and cash equivalents and restricted deposits, end of period
Cash and cash equivalents	$	187,416		$	251,273		$	39,492		$	187,416
Restricted deposits		58,117			58,195			353,009			58,117
Total cash and cash equivalents and restricted deposits, end of period	$	245,533		$	309,468		$	392,501		$	245,533

See accompanying notes

Table of Contents

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Six Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2021			2020
SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized	$	148,164		$	171,116		$	126,742		$	148,164
Net cash paid (received) for income and other taxes	$	428		$	754		$	888		$	428
Amortization of deferred financing costs:
Investment in real estate, net	$	(120	)	$	—		$	(100	)	$	(120	)
Other assets	$	1,169		$	1,206		$	1,169		$	1,169
Mortgage notes payable, net	$	876		$	2,344		$	1,139		$	876
Notes, net	$	2,227		$	2,233		$	1,916		$	2,227
Amortization of discounts and premiums on debt:
Mortgage notes payable, net	$	1,191		$	16,426		$	1,374		$	1,191
Notes, net	$	1,362		$	1,369		$	1,219		$	1,362
Amortization of deferred settlements on derivative instruments:
Other liabilities	$	(6	)	$	(6	)	$	(6	)	$	(6	)
Accumulated other comprehensive income	$	11,398		$	8,902		$	4,637		$	11,398
Write-off of pursuit costs:
Investment in real estate, net	$	3,122		$	2,947		$	2,314		$	3,122
Other assets	$	140		$	37		$	317		$	140
Accounts payable and accrued expenses	$	16		$	3		$	16		$	16
(Income) loss from investments in unconsolidated entities:
Investments in unconsolidated entities	$	1,554		$	(68,735	)	$	1,216		$	1,554
Other liabilities	$	645		$	677		$	656		$	645
Realized/unrealized (gain) loss on derivative instruments:
Other assets	$	—		$	2,002
Notes, net	$	—		$	2,253
Other liabilities	$	1,215		$	29,510		$	—		$	1,215
Accumulated other comprehensive income	$	(1,190	)	$	(33,765	)	$	—		$	(1,190	)
Investments in unconsolidated entities:
Investments in unconsolidated entities	$	(4,726	)	$	(6,472	)	$	(3,231	)	$	(4,726	)
Other liabilities	$	(900	)	$	(2,100	)	$	(1,260	)	$	(900	)
Debt financing costs:
Other assets	$	(215	)	$	145		$	(44	)	$	(215	)
Mortgage notes payable, net	$	(2,692	)	$	(2,237	)	$	(318	)	$	(2,692	)
Notes, net	$	—		$	(5,213	)
Other liabilities	$	—		$	1,236
Right-of-use assets and lease liabilities initial measurement and reclassifications:
Right-of-use assets	$	—		$	(438,705	)	$	11,308		$	—
Lease liabilities							$	(11,308	)	$	—
Non-cash share distribution from unconsolidated entities:
Investments in unconsolidated entities							$	1,429		$	—
Other assets	$	—		$	184,116		$	(1,429	)	$	—
Lease liabilities	$	—		$	282,791
Other liabilities	$	—		$	(28,202	)

See accompanying notes

Table of Contents

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in thousands except per share data)

(Unaudited)

	Six Months Ended June 30,						Quarter Ended June 30,						Six Months Ended June 30,						Quarter Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
SHAREHOLDERS’ EQUITY
PREFERRED SHARES
Balance, beginning of period	$	37,280		$	37,280		$	37,280		$	37,280		$	37,280		$	37,280		$	37,280		$	37,280
Balance, end of period	$	37,280		$	37,280		$	37,280		$	37,280		$	37,280		$	37,280		$	37,280		$	37,280
COMMON SHARES, $0.01 PAR VALUE
Balance, beginning of period	$	3,717		$	3,694		$	3,721		$	3,705		$	3,723		$	3,717		$	3,729		$	3,721
Conversion of OP Units into Common Shares		1			2			1			—			11			1			11			1
Exercise of share options		2			10			—			3			8			2			3			—
Employee Share Purchase Plan (ESPP)														1			—			1			—
Share-based employee compensation expense:
Restricted shares		2			2			—			—			1			2			—			—
Balance, end of period	$	3,722		$	3,708		$	3,722		$	3,708		$	3,744		$	3,722		$	3,744		$	3,722
PAID IN CAPITAL
Balance, beginning of period	$	8,965,577		$	8,935,453		$	9,092,441		$	8,925,882		$	9,128,599		$	8,965,577		$	9,083,346		$	9,092,441
Common Share Issuance:
Conversion of OP Units into Common Shares		3,855			4,869			2,011			84			66,649			3,855			66,649			2,011
Exercise of share options		11,320			48,477			171			18,624			39,615			11,320			16,738			171
Employee Share Purchase Plan (ESPP)		2,359			1,652			1,490			526			2,666			2,359			935			1,490
Share-based employee compensation expense:
Restricted shares		7,252			7,980			3,231			3,404			4,813			7,252			2,540			3,231
Share options		1,293			1,682			623			889			1,976			1,293			988			623
ESPP discount		416			365			263			98			633			416			189			263
Offering costs		—			(155	)		—			(155	)
Supplemental Executive Retirement Plan (SERP)		(506	)		(1,539	)		(655	)		(937	)		(2,057	)		(506	)		(828	)		(655	)
Change in market value of Redeemable Noncontrolling Interests – Operating Partnership		128,753			(56,974	)		17,304			(1,953	)		(101,966	)		128,753			(29,010	)		17,304
Adjustment for Noncontrolling Interests ownership in Operating Partnership		(1,987	)		7,771			1,453			3,119			(30,807	)		(1,987	)		(31,426	)		1,453
Balance, end of period	$	9,118,332		$	8,949,581		$	9,118,332		$	8,949,581		$	9,110,121		$	9,118,332		$	9,110,121		$	9,118,332
RETAINED EARNINGS
Balance, beginning of period	$	1,386,495		$	1,261,763		$	1,469,821		$	1,155,032		$	1,399,715		$	1,386,495		$	1,231,808		$	1,469,821
Net income attributable to controlling interests		569,494			413,507			260,888			308,968			373,925			569,494			316,386			260,888
Common Share distributions		(448,750	)		(420,916	)		(224,243	)		(210,419	)		(450,220	)		(448,750	)		(225,547	)		(224,243	)
Preferred Share distributions		(1,545	)		(1,545	)		(772	)		(772	)		(1,545	)		(1,545	)		(772	)		(772	)
Balance, end of period	$	1,505,694		$	1,252,809		$	1,505,694		$	1,252,809		$	1,321,875		$	1,505,694		$	1,321,875		$	1,505,694
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance, beginning of period	$	(77,563	)	$	(64,986	)	$	(72,896	)	$	(75,013	)	$	(43,666	)	$	(77,563	)	$	(41,363	)	$	(72,896	)
Accumulated other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the period		(1,190	)		(33,765	)		(223	)		(19,345	)		—			(1,190	)		—			(223	)
Losses reclassified into earnings from other comprehensive income		11,398			8,902			5,764			4,509			4,637			11,398			2,334			5,764
Balance, end of period	$	(67,355	)	$	(89,849	)	$	(67,355	)	$	(89,849	)	$	(39,029	)	$	(67,355	)	$	(39,029	)	$	(67,355	)

DISTRIBUTIONS
Distributions declared per Common Share outstanding	$	1.205		$	1.135		$	0.6025		$	0.5675		$	1.205		$	1.205		$	0.6025		$	0.6025

See accompanying notes

Table of Contents

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)

(Amounts in thousands except per share data)

(Unaudited)

	Six Months Ended June 30,						Quarter Ended June 30,						Six Months Ended June 30,						Quarter Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
NONCONTROLLING INTERESTS
OPERATING PARTNERSHIP
Balance, beginning of period	$	227,837		$	228,738		$	235,580		$	225,081		$	233,162		$	227,837		$	234,969		$	235,580
Issuance of restricted units to Noncontrolling Interests		12			—			—			—			—			12			—			—
Conversion of OP Units held by Noncontrolling Interests into OP Units held by General Partner		(3,856	)		(4,871	)		(2,012	)		(84	)		(66,660	)		(3,856	)		(66,660	)		(2,012	)
Equity compensation associated with Noncontrolling Interests		7,026			10,829			1,959			2,926			10,531			7,026			4,043			1,959
Net income attributable to Noncontrolling Interests		21,248			15,429			9,713			11,510			13,056			21,248			10,913			9,713
Distributions to Noncontrolling Interests		(17,037	)		(15,079	)		(7,961	)		(7,474	)		(15,999	)		(17,037	)		(7,410	)		(7,961	)
Change in carrying value of Redeemable Noncontrolling Interests – Operating Partnership		(2,048	)		45			(657	)		(1,520	)		794			(2,048	)		(1,590	)		(657	)
Adjustment for Noncontrolling Interests ownership in Operating Partnership		1,987			(7,771	)		(1,453	)		(3,119	)		30,807			1,987			31,426			(1,453	)
Balance, end of period	$	235,169		$	227,320		$	235,169		$	227,320		$	205,691		$	235,169		$	205,691		$	235,169
PARTIALLY OWNED PROPERTIES
Balance, beginning of period	$	1,183		$	(2,293	)	$	4,739		$	(5,462	)	$	4,673		$	1,183		$	2,472		$	4,739
Net income attributable to Noncontrolling Interests		13,410			1,620			880			821			1,423			13,410			741			880
Contributions by Noncontrolling Interests		341			4,594			—			4,594			—			341			—			—
Distributions to Noncontrolling Interests		(10,300	)		(5,219	)		(985	)		(1,251	)		(3,731	)		(10,300	)		(848	)		(985	)
Balance, end of period	$	4,634		$	(1,298	)	$	4,634		$	(1,298	)	$	2,365		$	4,634		$	2,365		$	4,634

See accompanying notes

Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

	June 30,			December 31,			June 30,			December 31,
	2020			2019			2021			2020
ASSETS
Land	$	5,789,307		$	5,936,188		$	5,780,705		$	5,785,367
Depreciable property		20,997,903			21,319,101			21,161,984			20,920,654
Projects under development		274,825			181,630			372,243			411,134
Land held for development		102,361			96,688			90,446			86,170
Investment in real estate		27,164,396			27,533,607			27,405,378			27,203,325
Accumulated depreciation		(7,537,713	)		(7,276,786	)		(8,164,287	)		(7,859,657	)
Investment in real estate, net		19,626,683			20,256,821			19,241,091			19,343,668
Investments in unconsolidated entities		55,310			52,238			53,364			52,782
Cash and cash equivalents		187,416			45,753			39,492			42,591
Restricted deposits		58,117			71,246			353,009			57,137
Right-of-use assets		505,077			512,774			480,671			499,287
Other assets		282,348			233,937			296,719			291,426
Total assets	$	20,714,951		$	21,172,769		$	20,464,346		$	20,286,891

LIABILITIES AND CAPITAL
Liabilities:
Mortgage notes payable, net	$	2,340,757		$	1,941,610		$	2,280,251		$	2,293,890
Notes, net		6,081,102			6,077,513			5,338,671			5,335,536
Line of credit and commercial paper		—			1,017,833			631,770			414,830
Accounts payable and accrued expenses		109,776			94,350			114,288			107,366
Accrued interest payable		67,589			66,852			65,814			65,896
Lease liabilities		330,135			331,334			314,379			329,130
Other liabilities		315,208			346,963			341,817			345,064
Security deposits		64,005			70,062			62,228			60,480
Distributions payable		232,208			218,326			232,958			232,262
Total liabilities		9,540,780			10,164,843			9,382,176			9,184,454

Commitments and contingencies

Redeemable Limited Partners		336,695			463,400			440,123			338,951
Capital:
Partners’ Capital:
Preference Units		37,280			37,280			37,280			37,280
General Partner		10,627,748			10,355,789			10,435,740			10,532,037
Limited Partners		235,169			227,837			205,691			233,162
Accumulated other comprehensive income (loss)		(67,355	)		(77,563	)		(39,029	)		(43,666	)
Total partners’ capital		10,832,842			10,543,343			10,639,682			10,758,813
Noncontrolling Interests – Partially Owned Properties		4,634			1,183			2,365			4,673
Total capital		10,837,476			10,544,526			10,642,047			10,763,486
Total liabilities and capital	$	20,714,951		$	21,172,769		$	20,464,346		$	20,286,891

See accompanying notes

Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands except per Unit data)

(Unaudited)

	Six Months Ended June 30,						Quarter Ended June 30,						Six Months Ended June 30,						Quarter Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
REVENUES
Rental income	$	1,335,837		$	1,331,676		$	653,532		$	669,374		$	1,195,661		$	1,335,837		$	598,059		$	653,532

EXPENSES
Property and maintenance		220,268			223,531			104,452			108,461			224,800			220,268			107,746			104,452
Real estate taxes and insurance		192,770			182,888			95,038			91,446			200,871			192,770			97,401			95,038
Property management		51,317			50,765			23,608			24,369			50,585			51,317			24,455			23,608
General and administrative		26,353			29,710			11,835			14,329			30,061			26,353			14,678			11,835
Depreciation		418,398			404,723			205,976			200,508			400,635			418,398			200,673			205,976
Total expenses		909,106			891,617			440,909			439,113			906,952			909,106			444,953			440,909

Net gain (loss) on sales of real estate properties		352,243			138,835			144,266			138,856			223,695			352,243			223,738			144,266

Operating income		778,974			578,894			356,889			369,117			512,404			778,974			376,844			356,889

Interest and other income		3,471			1,925			1,511			1,152			24,320			3,471			24,104			1,511
Other expenses		(4,227	)		(8,392	)		(1,694	)		(5,117	)		(7,452	)		(4,227	)		(3,342	)		(1,694	)
Interest:
Expense incurred, net		(167,475	)		(203,840	)		(81,885	)		(108,902	)		(134,482	)		(167,475	)		(67,124	)		(81,885	)
Amortization of deferred financing costs		(4,152	)		(5,783	)		(2,111	)		(3,647	)		(4,124	)		(4,152	)		(1,939	)		(2,111	)
Income before income and other taxes, income (loss) from investments in unconsolidated entities and net gain (loss) on sales of land parcels		606,591			362,804			272,710			252,603			390,666			606,591			328,543			272,710
Income and other tax (expense) benefit		(240	)		(484	)		(187	)		(246	)		(395	)		(240	)		(242	)		(187	)
Income (loss) from investments in unconsolidated entities		(2,199	)		68,058			(1,042	)		68,765			(1,872	)		(2,199	)		(261	)		(1,042	)
Net gain (loss) on sales of land parcels		—			178			—			177			5			—			—			—
Net income		604,152			430,556			271,481			321,299			388,404			604,152			328,040			271,481
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties		(13,410	)		(1,620	)		(880	)		(821	)		(1,423	)		(13,410	)		(741	)		(880	)
Net income attributable to controlling interests	$	590,742		$	428,936		$	270,601		$	320,478		$	386,981		$	590,742		$	327,299		$	270,601
ALLOCATION OF NET INCOME:
Preference Units	$	1,545		$	1,545		$	772		$	772		$	1,545		$	1,545		$	772		$	772

General Partner	$	567,949		$	411,962		$	260,116		$	308,196		$	372,380		$	567,949		$	315,614		$	260,116
Limited Partners		21,248			15,429			9,713			11,510			13,056			21,248			10,913			9,713
Net income available to Units	$	589,197		$	427,391		$	269,829		$	319,706		$	385,436		$	589,197		$	326,527		$	269,829

Earnings per Unit – basic:
Net income available to Units	$	1.53		$	1.11		$	0.70		$	0.83		$	1.00		$	1.53		$	0.84		$	0.70
Weighted average Units outstanding		384,702			382,854			384,818			383,227			385,594			384,702			385,856			384,818

Earnings per Unit – diluted:
Net income available to Units	$	1.53		$	1.11		$	0.70		$	0.83		$	1.00		$	1.53		$	0.84		$	0.70
Weighted average Units outstanding		386,272			385,644			385,913			386,107			387,367			386,272			387,820			385,913

See accompanying notes

Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)

(Amounts in thousands except per Unit data)

(Unaudited)

	Six Months Ended June 30,						Quarter Ended June 30,						Six Months Ended June 30,						Quarter Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Comprehensive income:
Net income	$	604,152		$	430,556		$	271,481		$	321,299		$	388,404		$	604,152		$	328,040		$	271,481
Other comprehensive income (loss):
Other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the period		(1,190	)		(33,765	)		(223	)		(19,345	)		—			(1,190	)		—			(223	)
Losses reclassified into earnings from other comprehensive income		11,398			8,902			5,764			4,509			4,637			11,398			2,334			5,764
Other comprehensive income (loss)		10,208			(24,863	)		5,541			(14,836	)		4,637			10,208			2,334			5,541
Comprehensive income		614,360			405,693			277,022			306,463			393,041			614,360			330,374			277,022
Comprehensive (income) attributable to Noncontrolling Interests – Partially Owned Properties		(13,410	)		(1,620	)		(880	)		(821	)		(1,423	)		(13,410	)		(741	)		(880	)
Comprehensive income attributable to controlling interests	$	600,950		$	404,073		$	276,142		$	305,642		$	391,618		$	600,950		$	329,633		$	276,142

See accompanying notes

Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Six Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	604,152		$	430,556		$	388,404		$	604,152
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		418,398			404,723			400,635			418,398
Amortization of deferred financing costs		4,152			5,783			4,124			4,152
Amortization of above/below market lease intangibles		(35	)		(35	)		(154	)		(35	)
Amortization of discounts and premiums on debt		2,553			17,795			2,593			2,553
Amortization of deferred settlements on derivative instruments		11,392			8,896			4,631			11,392
Amortization of right-of-use assets		5,892			6,952			7,308			5,892
Write-off of pursuit costs		3,278			2,987			2,647			3,278
(Income) loss from investments in unconsolidated entities		2,199			(68,058	)		1,872			2,199
Distributions from unconsolidated entities – return on capital		100			2,387			—			100
Net (gain) loss on sales of real estate properties		(352,243	)		(138,835	)		(223,695	)		(352,243	)
Net (gain) loss on sales of land parcels		—			(178	)		(5	)		—
Realized/unrealized (gain) loss on derivative instruments		25			—			—			25
Realized (gain) loss on sale of investment securities								(23,432	)		—
Compensation paid with Company Common Shares		13,475			16,782			16,077			13,475
Other operating activities, net		1,805			—			—			1,805
Changes in assets and liabilities:
(Increase) decrease in other assets		(61,422	)		1,610			(4,462	)		(61,422	)
Increase (decrease) in accounts payable and accrued expenses		5,954			22,435			6,514			5,954
Increase (decrease) in accrued interest payable		737			1,536			(82	)		737
Increase (decrease) in lease liabilities		(1,199	)		(1,171	)		(3,211	)		(1,199	)
Increase (decrease) in other liabilities		(18,070	)		(25,161	)		(5,387	)		(18,070	)
Increase (decrease) in security deposits		(6,057	)		1,769			1,748			(6,057	)
Net cash provided by operating activities		635,086			690,773			576,125			635,086
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate – acquisitions		—			(653,132	)		(281,426	)		—
Investment in real estate – development/other		(95,215	)		(93,210	)		(125,156	)		(95,215	)
Capital expenditures to real estate		(61,265	)		(81,528	)		(66,443	)		(61,265	)
Non-real estate capital additions		(15,536	)		(1,466	)		(1,042	)		(15,536	)
Interest capitalized for real estate under development		(4,102	)		(2,679	)		(8,176	)		(4,102	)
Proceeds from disposition of real estate, net		747,600			393,439			406,922			747,600
Investments in unconsolidated entities		(5,626	)		(8,572	)		(4,491	)		(5,626	)
Distributions from unconsolidated entities – return of capital		—			78,262			4			—
Purchase of investment securities and other investments		(509	)		(269	)		(166,945	)		(509	)
Proceeds from sale of investment securities								191,398			—
Net cash provided by (used for) investing activities		565,347			(369,155	)		(55,355	)		565,347

See accompanying notes

Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Six Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2021			2020
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt financing costs	$	(2,907	)	$	(6,069	)	$	(362	)	$	(2,907	)
Mortgage notes payable, net:
Proceeds		495,145			295,620			47,759			495,145
Lump sum payoffs		(91,500	)		(95,500	)		(59,880	)		(91,500	)
Scheduled principal repayments		(3,873	)		(3,110	)		(3,713	)		(3,873	)
Notes, net:
Proceeds		—			597,480
Line of credit and commercial paper:
Line of credit proceeds		1,870,000			1,995,000			—			1,870,000
Line of credit repayments		(1,890,000	)		(1,995,000	)		—			(1,890,000	)
Commercial paper proceeds		6,726,167			7,775,817			2,819,940			6,726,167
Commercial paper repayments		(7,724,000	)		(8,275,000	)		(2,603,000	)		(7,724,000	)
Proceeds from (payments on) settlement of derivative instruments		(1,215	)		(41,616	)		—			(1,215	)
Finance ground lease principal payments								(232	)		—
Proceeds from EQR’s Employee Share Purchase Plan (ESPP)		2,359			1,652			2,667			2,359
Proceeds from exercise of EQR options		11,322			48,487			39,623			11,322
Payment of offering costs		—			(155	)
Other financing activities, net		(31	)		(49	)		(31	)		(31	)
Contributions – Noncontrolling Interests – Partially Owned Properties		341			4,594			—			341
Contributions – Limited Partners		12			—			—			12
Distributions:
OP Units – General Partner		(435,427	)		(409,943	)		(448,983	)		(435,427	)
Preference Units		(1,545	)		(773	)		(1,545	)		(1,545	)
OP Units – Limited Partners		(16,478	)		(14,728	)		(16,540	)		(16,478	)
Noncontrolling Interests – Partially Owned Properties		(10,269	)		(5,170	)		(3,700	)		(10,269	)
Net cash provided by (used for) financing activities		(1,071,899	)		(128,463	)		(227,997	)		(1,071,899	)
Net increase (decrease) in cash and cash equivalents and restricted deposits		128,534			193,155			292,773			128,534
Cash and cash equivalents and restricted deposits, beginning of period		116,999			116,313			99,728			116,999
Cash and cash equivalents and restricted deposits, end of period	$	245,533		$	309,468		$	392,501		$	245,533

Cash and cash equivalents and restricted deposits, end of period
Cash and cash equivalents	$	187,416		$	251,273		$	39,492		$	187,416
Restricted deposits		58,117			58,195			353,009			58,117
Total cash and cash equivalents and restricted deposits, end of period	$	245,533		$	309,468		$	392,501		$	245,533

See accompanying notes

Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Six Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2021			2020
SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized	$	148,164		$	171,116		$	126,742		$	148,164
Net cash paid (received) for income and other taxes	$	428		$	754		$	888		$	428
Amortization of deferred financing costs:
Investment in real estate, net	$	(120	)	$	—		$	(100	)	$	(120	)
Other assets	$	1,169		$	1,206		$	1,169		$	1,169
Mortgage notes payable, net	$	876		$	2,344		$	1,139		$	876
Notes, net	$	2,227		$	2,233		$	1,916		$	2,227
Amortization of discounts and premiums on debt:
Mortgage notes payable, net	$	1,191		$	16,426		$	1,374		$	1,191
Notes, net	$	1,362		$	1,369		$	1,219		$	1,362
Amortization of deferred settlements on derivative instruments:
Other liabilities	$	(6	)	$	(6	)	$	(6	)	$	(6	)
Accumulated other comprehensive income	$	11,398		$	8,902		$	4,637		$	11,398
Write-off of pursuit costs:
Investment in real estate, net	$	3,122		$	2,947		$	2,314		$	3,122
Other assets	$	140		$	37		$	317		$	140
Accounts payable and accrued expenses	$	16		$	3		$	16		$	16
(Income) loss from investments in unconsolidated entities:
Investments in unconsolidated entities	$	1,554		$	(68,735	)	$	1,216		$	1,554
Other liabilities	$	645		$	677		$	656		$	645
Realized/unrealized (gain) loss on derivative instruments:
Other assets	$	—		$	2,002
Notes, net	$	—		$	2,253
Other liabilities	$	1,215		$	29,510		$	—		$	1,215
Accumulated other comprehensive income	$	(1,190	)	$	(33,765	)	$	—		$	(1,190	)
Investments in unconsolidated entities:
Investments in unconsolidated entities	$	(4,726	)	$	(6,472	)	$	(3,231	)	$	(4,726	)
Other liabilities	$	(900	)	$	(2,100	)	$	(1,260	)	$	(900	)
Debt financing costs:
Other assets	$	(215	)	$	145		$	(44	)	$	(215	)
Mortgage notes payable, net	$	(2,692	)	$	(2,237	)	$	(318	)	$	(2,692	)
Notes, net	$	—		$	(5,213	)
Other liabilities	$	—		$	1,236
Right-of-use assets and lease liabilities initial measurement and reclassifications:
Right-of-use assets	$	—		$	(438,705	)	$	11,308		$	—
Lease liabilities							$	(11,308	)	$	—
Non-cash share distribution from unconsolidated entities:
Investments in unconsolidated entities							$	1,429		$	—
Other assets	$	—		$	184,116		$	(1,429	)	$	—
Lease liabilities	$	—		$	282,791
Other liabilities	$	—		$	(28,202	)

See accompanying notes

Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL

(Amounts in thousands except per Unit data)

(Unaudited)

	Six Months Ended June 30,						Quarter Ended June 30,						Six Months Ended June 30,						Quarter Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
PARTNERS’ CAPITAL
PREFERENCE UNITS
Balance, beginning of period	$	37,280		$	37,280		$	37,280		$	37,280		$	37,280		$	37,280		$	37,280		$	37,280
Balance, end of period	$	37,280		$	37,280		$	37,280		$	37,280		$	37,280		$	37,280		$	37,280		$	37,280
GENERAL PARTNER
Balance, beginning of period	$	10,355,789		$	10,200,910		$	10,565,983		$	10,084,619		$	10,532,037		$	10,355,789		$	10,318,883		$	10,565,983
OP Unit Issuance:
Conversion of OP Units held by Limited Partners into OP Units held by General Partner		3,856			4,871			2,012			84			66,660			3,856			66,660			2,012
Exercise of EQR share options		11,322			48,487			171			18,627			39,623			11,322			16,741			171
EQR’s Employee Share Purchase Plan (ESPP)		2,359			1,652			1,490			526			2,667			2,359			936			1,490
Share-based employee compensation expense:
EQR restricted shares		7,254			7,982			3,231			3,404			4,814			7,254			2,540			3,231
EQR share options		1,293			1,682			623			889			1,976			1,293			988			623
EQR ESPP discount		416			365			263			98			633			416			189			263
Net income available to Units – General Partner		567,949			411,962			260,116			308,196			372,380			567,949			315,614			260,116
OP Units – General Partner distributions		(448,750	)		(420,916	)		(224,243	)		(210,419	)		(450,220	)		(448,750	)		(225,547	)		(224,243	)
Offering costs		—			(155	)		—			(155	)
Supplemental Executive Retirement Plan (SERP)		(506	)		(1,539	)		(655	)		(937	)		(2,057	)		(506	)		(828	)		(655	)
Change in market value of Redeemable Limited Partners		128,753			(56,974	)		17,304			(1,953	)		(101,966	)		128,753			(29,010	)		17,304
Adjustment for Limited Partners ownership in Operating Partnership		(1,987	)		7,771			1,453			3,119			(30,807	)		(1,987	)		(31,426	)		1,453
Balance, end of period	$	10,627,748		$	10,206,098		$	10,627,748		$	10,206,098		$	10,435,740		$	10,627,748		$	10,435,740		$	10,627,748
LIMITED PARTNERS
Balance, beginning of period	$	227,837		$	228,738		$	235,580		$	225,081		$	233,162		$	227,837		$	234,969		$	235,580
Issuance of restricted units to Limited Partners		12			—			—			—			—			12			—			—
Conversion of OP Units held by Limited Partners into OP Units held by General Partner		(3,856	)		(4,871	)		(2,012	)		(84	)		(66,660	)		(3,856	)		(66,660	)		(2,012	)
Equity compensation associated with Units – Limited Partners		7,026			10,829			1,959			2,926			10,531			7,026			4,043			1,959
Net income available to Units – Limited Partners		21,248			15,429			9,713			11,510			13,056			21,248			10,913			9,713
Units – Limited Partners distributions		(17,037	)		(15,079	)		(7,961	)		(7,474	)		(15,999	)		(17,037	)		(7,410	)		(7,961	)
Change in carrying value of Redeemable Limited Partners		(2,048	)		45			(657	)		(1,520	)		794			(2,048	)		(1,590	)		(657	)
Adjustment for Limited Partners ownership in Operating Partnership		1,987			(7,771	)		(1,453	)		(3,119	)		30,807			1,987			31,426			(1,453	)
Balance, end of period	$	235,169		$	227,320		$	235,169		$	227,320		$	205,691		$	235,169		$	205,691		$	235,169
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance, beginning of period	$	(77,563	)	$	(64,986	)	$	(72,896	)	$	(75,013	)	$	(43,666	)	$	(77,563	)	$	(41,363	)	$	(72,896	)
Accumulated other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the period		(1,190	)		(33,765	)		(223	)		(19,345	)		—			(1,190	)		—			(223	)
Losses reclassified into earnings from other comprehensive income		11,398			8,902			5,764			4,509			4,637			11,398			2,334			5,764
Balance, end of period	$	(67,355	)	$	(89,849	)	$	(67,355	)	$	(89,849	)	$	(39,029	)	$	(67,355	)	$	(39,029	)	$	(67,355	)

DISTRIBUTIONS
Distributions declared per Unit outstanding	$	1.205		$	1.135		$	0.6025		$	0.5675		$	1.205		$	1.205		$	0.6025		$	0.6025

See accompanying notes

Table of Contents

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (Continued)

(Amounts in thousands except per Unit data)

(Unaudited)

	Six Months Ended June 30,						Quarter Ended June 30,						Six Months Ended June 30,						Quarter Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS – PARTIALLY OWNED PROPERTIES
Balance, beginning of period	$	1,183		$	(2,293	)	$	4,739		$	(5,462	)	$	4,673		$	1,183		$	2,472		$	4,739
Net income attributable to Noncontrolling Interests		13,410			1,620			880			821			1,423			13,410			741			880
Contributions by Noncontrolling Interests		341			4,594			—			4,594			—			341			—			—
Distributions to Noncontrolling Interests		(10,300	)		(5,219	)		(985	)		(1,251	)		(3,731	)		(10,300	)		(848	)		(985	)
Balance, end of period	$	4,634		$	(1,298	)	$	4,634		$	(1,298	)	$	2,365		$	4,634		$	2,365		$	4,634

See accompanying notes

Table of Contents

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Business

Equity Residential (“EQR”) is an S&P 500 company focused on the acquisition, development and management of ~~rental apartment~~residential properties located in ~~urban~~ and ~~high-density suburban communities,~~around dynamic cities that attract high quality long-term renters, a business that is conducted on its behalf by ERP Operating Limited Partnership (“ERPOP”). EQR is a Maryland real estate investment trust (“REIT”) formed in March 1993 and ERPOP is an Illinois limited partnership formed in May 1993. References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP. Unless otherwise indicated, the notes to consolidated financial statements apply to both the Company and the Operating Partnership.

EQR is the general partner of, and as of June 30, ~~2020~~2021 owned an approximate ~~96.4%~~96.7% ownership interest in, ERPOP. All of the Company’s property ownership, development and related business operations are conducted through the Operating Partnership and EQR has no material assets or liabilities other than its investment in ERPOP. EQR issues equity from time to time, the net proceeds of which it is obligated to contribute to ERPOP, but does not have any indebtedness as all debt is incurred by the Operating Partnership. The Operating Partnership holds substantially all of the assets of the Company, including the Company’s ownership interests in its joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly tradedequity.

As of June 30, ~~2020,~~2021, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of ~~304~~303 properties located in 9 states and the District of Columbia consisting of ~~78,410~~78,107 apartment units. The ownership breakdown includes (table does not include various uncompleted development properties):

	Properties		Apartment Units		Properties		Apartment Units
Wholly Owned Properties		287		74,849		286		74,468
Master-Leased Property – Consolidated		1		162		1		162
Partially Owned Properties – Consolidated		16		3,399		16		3,477
		304		78,410		303		78,107

COVID-19 Pandemic

The Company continues to monitor the effects of and take various actions in response to the novel coronavirus (“COVID-19”) pandemic and its accompanying variants. Its duration, severity and the extent of the adverse health impact on the general population, our residents and employees, the rate of vaccine distribution and effectiveness of vaccinations, the overall reopening progress in the cities in which we operate and the potential long-term changes in customer preferences for living in our communities, are among the many unknowns that have had and could continue to have a significant future impact on the Company. These, among other items, have impacted the economy, the unemployment rate and our operations and could materially affect our future consolidated results of operations, financial condition, liquidity, investments and overall performance. There have been no material changes to the overall COVID-19 disclosures that were discussed in the notes to the consolidated financial statements of the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2020.

2.	Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) and certain reclassifications considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, ~~2020~~2021 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2020.~~2021.

Table of Contents

In preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. In response to the ~~novel coronavirus (“COVID-19”)~~COVID-19 pandemic, management evaluated whether its estimates, such as lease collectibility ~~(see discussion below)~~(discussed below in Recently Adopted Accounting Pronouncements) and impairment, required revised approaches and generally concluded that no revisions were necessary at this time.

The balance sheets at December 31, ~~2019~~2020 have been derived from the audited financial statements at that date but do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements.

~~Table of Contents~~

For further information, including definitions of capitalized terms not defined herein, refer to the consolidated financial statements and footnotes thereto included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Income and Other Taxes

EQR has elected to be taxed as a REIT. This, along with the nature of the operations of its operating properties, resulted in 0 provision for federal income taxes at the EQR level. In addition, ERPOP generally is not liable for federal income taxes as the partners recognize their allocable share of income or loss in their tax returns; therefore no provision for federal income taxes has been made at the ERPOP level. Historically, the Company has generally only incurred certain state and local income, excise and franchise taxes. The Company has elected taxable REIT subsidiary (“TRS”) status for certain of its corporate subsidiaries and, as a result, these entities will incur both federal and state income taxes on any taxable income of such entities after consideration of any net operating losses.

On March 27, 2020, the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). ~~The CARES Act was enacted to provide economic relief to companies and individuals in response to the COVID-19 pandemic.~~ Included in the CARES Act ~~are~~were tax provisions which ~~increase~~increased allowable interest expense deductions for 2019 and 2020 and ~~increase~~increased the ability for taxpayers to use net operating losses. ~~While we do~~These provisions did not ~~expect these provisions to~~ result in a material impact to the Company’s taxable income or tax ~~liabilities, the Company will continue to analyze the provisions of the CARES Act and related guidance as it is published.~~ liabilities.

The CARES Act also allows corporations to request accelerated refunds of their alternative minimum tax (“AMT”) credit. Prior to enactment of this provision, the remaining credits would have been refunded in installments in 2020, 2021 and 2022. We have filed a claim and expect to receive a refund of our remaining $1.6 million of AMT credit in 2020.

Recently Issued Accounting Pronouncements

In ~~March~~August 2020, the Financial Accounting Standards Board (“FASB”) issued an amendment to the debt and equity financial instruments standards which simplifies the accounting for convertible instruments and accounting for contracts in an entity’s own equity. Instead of being required to assess whether an equity contract permits settlement in unregistered shares, which may require a legal analysis under the securities laws, entities will only analyze whether cash settlements are explicitly required when registered shares are unavailable. As a result, such contracts may be classified in permanent rather than mezzanine equity, which may affect the way the Company’s OP Units are presented on its financial statements. The update is effective for the Company beginning on January 1, 2022 as the Company did not early adopt the standard as allowed on January 1, 2021. The Company is currently evaluating the impact of adopting the new standard on its consolidated results of operations and financial position.

In March 2020, the FASB issued an amendment to the reference rate reform standard which provides the option for a limited period of time to ease the potential burden in accounting for, or recognizing the effects of, reference rate reform on contract modifications and hedge accounting. An example of such reform is the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. Entities that make this optional expedient election would not have to remeasure the contracts at the modification date or reassess the accounting treatment if certain criteria are met and would continue applying hedge accounting for relationships affected by reference rate reform. The new standard was effective for the Company upon issuance and elections can be made through December 31, 2022. The Company is currently evaluating its options with regards to existing contracts and hedging relationships and the impact of adopting this update on its consolidated results of operations and financial position.

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Recently Adopted Accounting Pronouncements

In April 2020, a FASB staff question and answer document was issued which intended to reduce the challenges of evaluating the enforceable rights and obligations of leases for concessions granted to lessees in response to the COVID-19 pandemic. We elected not to evaluate whether qualifying concessions provided by the Company in response to the COVID-19 pandemic are a lease modification, subject to the criteria that the total payments under the amended lease cannot result in a substantial increase in the rights of the lessor or obligations of the lessee. We also elected to treat the concessions as though they were contemplated as part of the existing contracts and therefore will not apply lease modification rules to the qualifying lease concession amendments. As such, deferrals deemed collectible are recorded as rental receivables with no change to timing of rental revenues and deferrals deemed non-collectible and abatements reduce rental revenues in the deferral/abatement period and cause rental revenues to effectively follow a cash basis related to the changes. The accounting elections provided by the FASB mainly apply to the Company’s non-residential leases and the majority of the amendments will not require a straight-line adjustment. ~~During the quarter ended June 30, 2020, we have granted rent payment deferrals/abatements to our non-residential tenants of $4.5 million, of which $4.1 million reduced rental revenues.~~See Note 8 for additional discussion.

In June 2016, the FASBissued a standard which requires companies to adopt a new approach for estimating credit losses on certain types of financial instruments, such as trade and other receivables and loans. The standard requires entities to estimate a lifetime expected credit loss for most financial instruments, including trade receivables. In November 2018, the FASB issued an amendment excluding operating lease receivables accounted for under the ~~leases~~lease standard from the scope of the credit losses standard. The Company adopted this standard as required effective January 1, 2020 and it did not have a material effect on its consolidated results of operations and financial position.

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In~~February2016,~~the FASB issued a lease standard which sets out principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessors and lessees). The Company adopted this standard as required effective January 1, 2019 using a modified retrospective method and the Company applied the guidance as of the adoption date and elected certain practical expedients, as described below. The standard impacted our consolidated balance sheets but did not impact our consolidated statements of operations. Right-of-use (“ROU”) assets and lease liabilities where the Company is the lessee were recognized for various corporate office leases and ground leases. The Company recorded ROU assets and related lease liabilities to its opening balance sheet upon adoption on January 1, 2019 of $434.2 million and $278.3 million, respectively.

The Company elected the practical expedient to not reassess the classification of existing operating leases. As of January 1, 2019, any new or modified ground leases may be classified as financing leases unless they meet certain conditions. When there is a material lease modification, the Company is required to reassess the classification and remeasure the lease liability. The Company also elected the practical expedient to account for both its lease and non-lease components as a single component under the leases standard. See Note 8 for additional discussion regarding the lease standard.

In August 2017, the FASB issued a final standard which makes changes to the hedge accounting model to enable entities to better portray their risk management activities in the financial statements. The standard expands an entity’s ability to hedge nonfinancial and financial risk components, reduces complexity in fair value hedges of interest rate risk and eases certain documentation and assessment requirements. The standard also eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of any hedging instrument to be presented in the same income statement line as the hedged instrument. The Company adopted this standard as required effective January 1, 2019 and it did not have a material effect on its consolidated results of operations and financial position.

3.	Equity, Capital and OtherInterests

The Company refers to “Common Shares” and “Units” (which refer to both OP Units and restricted units) as equity securities for EQR and “General Partner Units” and “Limited Partner Units” as equity securities for ERPOP. To provide a streamlined and more readable presentation of the disclosures for the Company and the Operating Partnership, several sections below refer to the respective terminology for each with the same financial information and separate sections are provided, where needed, to further distinguish any differences in financial information and terminology.

The following table presents the changes in the Company’s issued and outstanding Common Shares and Units for the six months ended June 30, ~~2020~~2021 and ~~2019:~~

2020:

	2020			2019			2021			2020
Common Shares
Common Shares outstanding at January 1,		371,670,884			369,405,161			372,302,000			371,670,884
Common Shares Issued:
Conversion of OP Units		97,363			188,406			1,084,023			97,363
Exercise of share options		217,935			1,059,674			833,669			217,935
Employee Share Purchase Plan (ESPP)		44,110			27,131			47,761			44,110
Restricted share grants, net		178,720			158,438			87,377			178,720
Common Shares outstanding at June 30,		372,209,012			370,838,810			374,354,830			372,209,012
Units
Units outstanding at January 1,		13,731,315			13,904,035			13,858,073			13,731,315
Restricted unit grants, net		245,999			140,055			155,638			245,999
Conversion of OP Units to Common Shares		(97,363	)		(188,406	)		(1,084,023	)		(97,363	)
Units outstanding at June 30,		13,879,951			13,855,684			12,929,688			13,879,951
Total Common Shares and Units outstanding at June 30,		386,088,963			384,694,494			387,284,518			386,088,963
Units Ownership Interest in Operating Partnership		3.6	%		3.6	%		3.3	%		3.6	%

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The following table presents the changes in the Operating Partnership’s issued and outstanding General Partner Units and Limited Partner Units for the six months ended June 30, ~~2020~~2021 and ~~2019:~~2020:

	2020			2019			2021			2020
General and Limited Partner Units
General and Limited Partner Units outstanding at January 1,		385,402,199			383,309,196			386,160,073			385,402,199
Issued to General Partner:
Exercise of EQR share options		217,935			1,059,674			833,669			217,935
EQR’s Employee Share Purchase Plan (ESPP)		44,110			27,131			47,761			44,110
EQR’s restricted share grants, net		178,720			158,438			87,377			178,720
Issued to Limited Partners:
Restricted unit grants, net		245,999			140,055			155,638			245,999
General and Limited Partner Units outstanding at June 30,		386,088,963			384,694,494			387,284,518			386,088,963
Limited Partner Units
Limited Partner Units outstanding at January 1,		13,731,315			13,904,035			13,858,073			13,731,315
Limited Partner restricted unit grants, net		245,999			140,055			155,638			245,999
Conversion of Limited Partner OP Units to EQR Common Shares		(97,363	)		(188,406	)		(1,084,023	)		(97,363	)
Limited Partner Units outstanding at June 30,		13,879,951			13,855,684			12,929,688			13,879,951
Limited Partner Units Ownership Interest in Operating Partnership		3.6	%		3.6	%		3.3	%		3.6	%

The equity positions of various individuals and entities that contributed their properties to the Operating Partnership in exchange for OP Units, as well as the equity positions of the holders of restricted units, are collectively referred to as the “Noncontrolling Interests – Operating Partnership” and “Limited Partners Capital,” respectively, for the Company and the Operating Partnership. Subject to certain exceptions (including the “book-up” requirements of restricted units), the Noncontrolling Interests – Operating Partnership/Limited Partners Capital may exchange their Units with EQR for Common Shares on a one-for-one basis. The carrying value of the Noncontrolling Interests – Operating Partnership/Limited Partners Capital (including redeemable interests) is allocated based on the number of Noncontrolling Interests – Operating Partnership/Limited Partners Capital in total in proportion to the number of Noncontrolling Interests – Operating Partnership/Limited Partners Capital in total plus the total number of Common Shares/General Partner Units. Net income is allocated to the Noncontrolling Interests – Operating Partnership/Limited Partners Capital based on the weighted average ownership percentage during the period.

The Operating Partnership has the right but not the obligation to make a cash payment instead of issuing Common Shares to any and all holders of Noncontrolling Interests – Operating Partnership/Limited Partners Capital requesting an exchange of their Noncontrolling Interests – Operating Partnership/Limited Partners Capital with EQR. Once the Operating Partnership elects not to redeem the Noncontrolling Interests – Operating Partnership/Limited Partners Capital for cash, EQR is obligated to deliver Common Shares to the exchanging holder of the Noncontrolling Interests – Operating Partnership/Limited Partners Capital.

The Noncontrolling Interests – Operating Partnership/Limited Partners Capital are classified as either mezzanine equity or permanent equity. If EQR is required, either by contract or securities law, to deliver registered Common Shares, such Noncontrolling Interests – Operating Partnership/Limited Partners Capital are differentiated and referred to as “Redeemable Noncontrolling Interests – Operating Partnership” and “Redeemable Limited Partners,” respectively. Instruments that require settlement in registered shares cannot be classified in permanent equity as it is not always completely within an issuer’s control to deliver registered shares. Therefore, settlement in cash is assumed and that responsibility for settlement in cash is deemed to fall to the Operating Partnership as the primary source of cash for EQR, resulting in presentation in the mezzanine section of the balance sheet. The Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners are adjusted to the greater of carrying value or fair market value based on the Common Share price of EQR at the end of each respective reporting period. EQR has the ability to deliver unregistered Common Shares for the remaining portion of the Noncontrolling Interests – Operating Partnership/Limited Partners Capital that are classified in permanent equity at June 30, ~~2020~~2021 and December 31, ~~2019.~~2020.

The carrying value of the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners is allocated based on the number of Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners in proportion to the number of Noncontrolling Interests – Operating Partnership/Limited Partners Capital in total. Such percentage of the total carrying value of Units/Limited Partner Units which is ascribed to the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners is then adjusted to the greater of carrying value or fair market value as described above. As of June 30, ~~2020~~2021 and ~~2019,~~2020, the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners have a redemption value of approximately $~~336.7~~440.1 million and ~~$436.0~~$336.7 million, respectively, which represents the value of Common Shares that would be issued in exchange for the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners.

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The following table presents the changes in the redemption value of the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners for the six months ended June 30, 2021 and 2020, ~~and 2019~~respectively (amounts in thousands):

	2020			2019			2021			2020
Balance at January 1,	$	463,400		$	379,106		$	338,951		$	463,400
Change in market value		(128,753	)		56,974			101,966			(128,753	)
Change in carrying value		2,048			(45	)		(794	)		2,048
Balance at June 30,	$	336,695		$	436,035		$	440,123		$	336,695

Net proceeds from EQR Common Share and Preferred Share (see definition below) offerings and proceeds from exercise of options for Common Shares are contributed by EQR to ERPOP. In return for those contributions, EQR receives a number of OP Units in ERPOP equal to the number of Common Shares it has issued in the equity offering (or in the case of a preferred equity offering, a number of preference units in ERPOP equal in number and having the same terms as the Preferred Shares issued in the equity offering). As a result, the net proceeds from Common Shares and Preferred Shares are allocated for the Company between shareholders’ equity and Noncontrolling Interests – Operating Partnership and for the Operating Partnership between General Partner’s Capital and Limited Partners Capital to account for the change in their respective percentage ownership of the underlying equity.

The Company’s declaration of trust authorizes it to issue up to 100,000,000 preferred shares of beneficial interest, $0.01 par value per share (the “Preferred Shares”), with specific rights, preferences and other attributes as the Board of Trustees may determine, which may include preferences, powers and rights that are senior to the rights of holders of the Company’s Common Shares.

The following table presents the Company’s issued and outstanding Preferred Shares/Preference Units as of June 30, ~~2020~~2021 andDecember 31, ~~2019~~2020:

				Amounts in thousands							Amounts in thousands
		Annual							Annual
	Call	Dividend Per		June 30,		December 31,		Call	Dividend Per		June 30,		December 31,
	Date (1)	Share/Unit (2)		2020		2019		Date (1)	Share/Unit (2)		2021		2020
Preferred Shares/Preference Units of beneficial interest, $0.01 par value; 100,000,000 shares authorized:
8.29% Series K Cumulative Redeemable Preferred Shares/Preference Units; liquidation value $50 per share/unit; 745,600 shares/units issued and outstanding as of June 30, 2020 and December 31, 2019	12/10/26	$	4.145	$	37,280	$	37,280
8.29% Series K Cumulative Redeemable Preferred Shares/Preference Units; liquidation value $50 per share/unit; 745,600 shares/units issued and outstanding as of June 30, 2021 and December 31, 2020								12/10/26	$	4.145	$	37,280	$	37,280
				$	37,280	$	37,280				$	37,280	$	37,280

(1)

On or after the call date, redeemable Preferred Shares/Preference Units may be redeemed for cash at the option of the Company or the Operating Partnership, respectively, in whole or in part, at a redemption price equal to the liquidation price per share/unit, plus accrued and unpaid distributions, if any.

(2)	Dividends on Preferred Shares/Preference Units are payable quarterly.

Other

EQR and ERPOP currently have an active universal shelf registration statement for the issuance of equity and debt securities that automatically became effective upon filing with the SEC in June 2019 and expires in June 2022. Per the terms of ERPOP’s partnership agreement, EQR contributes the net proceeds of all equity offerings to the capital of ERPOP in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis) or preference units (on a one-for-one preferred share per preference unit basis).

The Company has an At-The-Market (“ATM”) share offering program which allows EQR to sell Common Shares from time to time into the existing trading market at current market prices as well as through negotiated transactions. In June 2019, the Company extended the program maturity to June 2022. In connection with the extension, the Company may now also sell Common Shares under forward sale agreements. The use of a forward sale agreement would allow the Company to lock in a price on the sale of Common Shares at the time the agreement is executed, but defer receiving the proceeds from the sale until a later date. EQR has the authority to issue 13.0 million shares but has not issued any shares under this program since September 2012.

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The Company may repurchase up to 13.0 million Common Shares under its share repurchase program. NaN open market repurchases have occurred since 2008, and 0 repurchases of any kind have occurred since February 2014. As of June 30, ~~2020,~~2021, EQR

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has remaining authorization to repurchase up to 13.0 million of its shares.

4.	Real Estate

The following table summarizes the carrying amounts for the Company’s investment in real estate (at cost) as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020 (amounts in thousands):

	June 30, 2020			December 31, 2019			June 30, 2021			December 31, 2020
Land	$	5,789,307		$	5,936,188		$	5,780,705		$	5,785,367
Depreciable property:
Buildings and improvements		18,574,877			18,904,686			18,637,974			18,464,484
Furniture, fixtures and equipment		1,936,039			1,916,458			2,031,407			1,970,033
In-Place lease intangibles		486,987			497,957			492,603			486,137
Projects under development:
Land		23,531			23,531			10,424			23,531
Construction-in-progress		251,294			158,099			361,819			387,603
Land held for development:
Land		64,460			64,460			46,160			46,160
Construction-in-progress		37,901			32,228			44,286			40,010
Investment in real estate		27,164,396			27,533,607			27,405,378			27,203,325
Accumulated depreciation		(7,537,713	)		(7,276,786	)		(8,164,287	)		(7,859,657	)
Investment in real estate, net	$	19,626,683		$	20,256,821		$	19,241,091		$	19,343,668

During the six months ended June 30, ~~2020,~~2021, the Company acquired the following from unaffiliated parties (purchase price in thousands):

	Properties		Apartment Units		Purchase Price
Rental Properties – Consolidated (1)		3		813	$	280,200
Total		3		813	$	280,200

(1)	Purchase price includes an allocation of approximately $30.8 million to land and $250.6 million to depreciable property (inclusive of capitalized closing costs).

During the six months ended June 30, 2021, the Company disposed of the following to unaffiliated parties (sales price in thousands):

	Properties		Apartment Units		Sales Price		Properties		Apartment Units		Sales Price
Rental Properties – Consolidated		5		1,552	$	754,361		5		795	$	409,500
Total		5		1,552	$	754,361		5		795	$	409,500

The Company recognized a net gain on sales of real estate properties of approximately ~~$352.2~~$223.7 million on the above sales.

5.	Commitments to Acquire/Dispose of Real Estate

The Company has not entered into any agreements to acquire rental properties or land parcels as of the date of filing.

The Company has entered into separate agreements to dispose of the following (sales price and net book value in thousands):

	Properties		Apartment Units		Sales Price		Net Book Value		Properties		Apartment Units		Sales Price		Net Book Value at June 30, 2021
Land Parcels (two)		—		—	$	55,150	$	19,445
Rental Properties - Consolidated										2		454	$	275,000	$	98,033
Total		—		—	$	55,150	$	19,445		2		454	$	275,000	$	98,033

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The closing of pending transactions is subject to certain conditions and restrictions; therefore, there can be no assurance that the transactions will be consummated or that the final terms will not differ in material respects from any agreements summarized above. See Note 14 for discussion of the properties acquired or disposed of, if any, subsequent to June 30, ~~2020.~~

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2021.

6.	Investments in Partially Owned Entities

The Company has ~~co-invested~~invested in various properties with unrelated third parties which are either consolidated or accounted for under the equity method of accounting (unconsolidated).

Consolidated Variable Interest Entities (“VIEs”)

In accordance with accounting standards for consolidation of VIEs, the Company consolidates ERPOP on EQR’s financial statements. As the sole general partner of ERPOP, EQR has exclusive control of ERPOP’s day-to-day management. The limited partners are not able to exercise substantive kick-out or participating rights. As a result, ERPOP qualifies as a VIE. EQR has a controlling financial interest in ERPOP and, thus, is ERPOP’s primary beneficiary. EQR has the power to direct the activities of ERPOP that most significantly impact ERPOP’s economic performance as well as the obligation to absorb losses or the right to receive benefits from ERPOP that could potentially be significant to ERPOP.

The Company has various equity interests in certain joint ventures owning 16 properties containing ~~3,399~~3,477 apartment units. The Company ~~is the general partner or managing member of~~has determined that these joint ventures and is responsible for managing the operations and affairs of the joint ventures as well as making all decisions regarding the businesses of the joint ventures. The limited partners or non-managing members are ~~not able to exercise substantive kick-out or participating rights. As a result, the joint ventures qualify as VIEs. The Company has a controlling financial interest in the~~ VIEs and ~~thus,~~the Company is the VIEs’ primary beneficiary. The Company has both the power to direct the activities of the VIEs that most significantly impact the VIEs’ economic performance as well as the obligation to absorb losses or the right to receive benefits from the VIEs that could potentially be significant to the VIEs. As a result, the joint ventures are required to be consolidated on the Company’s financial statements.

The Company also has ~~entered into two~~a separate consolidated joint ~~ventures~~venture which ~~each own~~leases a land ~~parcels~~parcel that ~~are being/~~will be developed into a multifamily rental ~~properties. These~~property. This joint ~~ventures have~~venture has been deemed to be ~~VIEs~~a VIE and ~~are~~is consolidated due to the Company being the primary beneficiary.

The consolidated assets and liabilities related to the VIEs discussed above were approximately ~~$753.7~~$778.6 million and ~~$236.6~~$242.0 million, respectively, at June 30, ~~2020~~2021 and approximately ~~$754.7~~$784.1 million and ~~$323.1~~$224.0 million, respectively, at December 31, ~~2019.~~2020.

Investments in Unconsolidated Entities

The following table and information summarizes the Company’s investments in unconsolidated entities, which are accounted for under the equity method of accounting as the requirements for consolidation are not met, as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020 (amounts in thousands except for ownership percentage):

	June 30, 2020		December 31, 2019		Ownership Percentage	June 30, 2021			December 31, 2020			Ownership Percentage
Investments in Unconsolidated Entities:
Operating Property (VIE) (1)	$	39,385	$	40,361	33.3%	$	37,204		$	38,288		33.3%
Real Estate Technology/Other		15,925		11,877	Varies
Real Estate Technology (2)							16,609			14,866		Varies
Other							(449	)		(372	)	Varies
Investments in Unconsolidated Entities	$	55,310	$	52,238		$	53,364		$	52,782

(1)

Represents an unconsolidated interest in an entity that owns the land underlying one of the consolidated joint venture properties noted above and owns and operates a related parking facility. The joint venture, as a limited partner, does not have substantive kick-out or participating rights in the entity. As a result, the entity qualifies as a VIE. The joint venture does not have a controlling financial interest in the VIE and is not the VIE’s primary beneficiary. The joint venture does not have the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance or the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. As a result, the entity that owns the land and owns and operates the parking facility is unconsolidated and recorded using the equity method of accounting.

(2)	Represents unconsolidated investments in 5 separate real estate technology funds/companies.

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7.	Restricted Deposits

The following table presents the Company’s restricted deposits as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020 (amounts in thousands):

	June 30, 2020		December 31, 2019		June 30, 2021		December 31, 2020
Mortgage escrow deposits:
Replacement reserves	$	9,233	$	8,543	$	10,497	$	9,877
Mortgage principal reserves/sinking funds		11,895		9,689		16,580		14,168
Mortgage escrow deposits		21,128		18,232		27,077		24,045
Restricted cash:
Tax-deferred (1031) exchange proceeds		—		14,232		285,147		—
Earnest money on pending acquisitions						6,250		—
Restricted deposits on real estate investments		747		658		296		307
Resident security and utility deposits		34,869		37,140		32,405		31,412
Other		1,373		984		1,834		1,373
Restricted cash		36,989		53,014		325,932		33,092
Restricted deposits	$	58,117	$	71,246	$	353,009	$	57,137

Leases

Lessor Accounting

The Company is the lessor for its residential and non-residential leases and these leases will continue to be accounted for as operating leases under the ~~standard as described in Note 2.~~ lease standard.

For the six months ended June 30, ~~2020,~~2021, approximately ~~97.6%~~97% of the Company’s total lease revenue is generated from residential apartment leases that are generally twelve months or less in length. The residential apartment leases may include lease income related to such items as utility recoveries, parking, storage and pet rent that the Company treats as a single lease component because the amenities cannot be leased on their own and the timing and pattern of revenue recognition are the same. The collection of lease payments at lease commencement is probable and therefore the Company subsequently recognizes lease income over the lease term on a straight-line basis. Residential leases are renewable upon consent of both parties on an annual or monthly basis.

For the six months ended June 30, ~~2020,~~2021, approximately ~~2.4%~~3% of the Company’s total lease revenue is generated by non-residential leases that are generally for terms ranging between five to ten years. The non-residential leases generally consist of ground floor retail spaces and master-leased parking garages that serve as additional amenities for our residents. The non-residential leases may include lease income related to such items as utility recoveries, parking rent and storage rent that the Company treats as a single lease component because the amenities cannot be leased on their own and the timing and pattern of revenue recognition are the same. The collection of lease payments at lease commencement is probable and therefore the Company subsequently recognizes lease income over the lease term on a straight-line basis. Non-residential leases are renewable with market-based renewal options.

The following table presents the lease income types relating to lease payments for residential and non-residential leases along with the total other rental income for the six months ~~and quarter~~ ended June 30, 2021 and 2020 (amounts in thousands):

	Six Months Ended June 30, 2020						Quarter Ended June 30, 2020						Six Months Ended June 30, 2021								Six Months Ended June 30, 2020
Income Type	Residential Leases		Non-Residential Leases		Total		Residential Leases		Non-Residential Leases		Total		Residential Leases			Non-Residential Leases		Total			Residential Leases			Non-Residential Leases			Total
Residential and non-residential rent	$	1,207,106	$	30,221	$	1,237,327	$	594,626	$	12,127	$	606,753	$	1,078,304		$	31,237	$	1,109,541		$	1,207,106		$	30,221		$	1,237,327
Utility recoveries (RUBS income) (1)		35,232		375		35,607		17,814		147		17,961		36,533			330		36,863			35,232			375			35,607
Parking rent		19,460		223		19,683		9,627		126		9,753		19,890			362		20,252			19,460			223			19,683
Storage rent		1,913		40		1,953		951		21		972
Pet rent		5,740		—		5,740		2,839		—		2,839
Other lease revenue (2)														(18,970	)		1,138		(17,832	)		(6,273	)		(1,231	)		(7,504	)
Total lease revenue	$	1,269,451	$	30,859		1,300,310	$	625,857	$	12,421		638,278	$	1,115,757		$	33,067		1,148,824		$	1,255,525		$	29,588			1,285,113
Total other rental income (2)						35,527						15,254
Parking revenue																			11,572									11,312
Other revenue																			35,265									39,412
Total other rental income (3)																			46,837									50,724
Rental income					$	1,335,837					$	653,532						$	1,195,661								$	1,335,837

(1)	RUBS income primarily consists of variable payments representing the recovery of utility costs from residents.

(2)	Other lease revenue consists of the revenue adjustment related to bad debtand other miscellaneous lease revenue.

(3)	Other rental income is accounted for under the revenue recognition standard.

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The following table presents the lease income types relating to lease payments for residential and non-residential leases along with the total other rental income for the ~~six months and quarter~~quarters ended June 30, ~~2019~~2021 and 2020 (amounts in thousands):

	Six Months Ended June 30, 2019						Quarter Ended June 30, 2019							Quarter Ended June 30, 2021								Quarter Ended June 30, 2020
Income Type	Residential Leases		Non-Residential Leases		Total		Residential Leases		Non-Residential Leases			Total		Residential Leases			Non-Residential Leases		Total			Residential Leases			Non-Residential Leases			Total
Residential and non-residential rent	$	1,190,729	$	36,163	$	1,226,892	$	598,209	$	17,693		$	615,902	$	538,649		$	15,398	$	554,047		$	594,626		$	12,127		$	606,753
Utility recoveries (RUBS income) (1)		33,303		412		33,715		16,858		209			17,067		18,579			152		18,731			17,814			147			17,961
Parking rent		18,469		159		18,628		9,332		87			9,419		10,156			95		10,251			9,627			126			9,753
Storage rent		1,856		32		1,888		937		(12	)		925
Pet rent		5,798		—		5,798		2,911		—			2,911
Other lease revenue (2)															(8,708	)		529		(8,179	)		(6,060	)		(951	)		(7,011	)
Total lease revenue	$	1,250,155	$	36,766		1,286,921	$	628,247	$	17,977			646,224	$	558,676		$	16,174		574,850		$	616,007		$	11,449			627,456
Total other rental income (2)						44,755							23,150
Parking revenue																				6,139									4,529
Other revenue																				17,070									21,547
Total other rental income (3)																				23,209									26,076
Rental income					$	1,331,676						$	669,374						$	598,059								$	653,532

(1)	RUBS income primarily consists of variable payments representing the recovery of utility costs from residents.

(2)	Other lease revenue consists of the revenue adjustment related to bad debtand other miscellaneous lease revenue.

(3)	Other rental income is accounted for under the revenue recognition standard.

The economic impact of the pandemic on a subset of our residents and tenants has led to elevated levels of bad debt. We continue to work with our residents and tenants on payment plans and collections and our bad debt allowance policies remain consistent.

The following table presents residential and non-residential accounts receivable and straight-line receivable balances for the Company’s properties as of June 30, 2021 and December 31, 2020 (amounts in thousands):

	Residential							Non-Residential
Balance Sheet (Other assets):	June 30, 2021				December 31, 2020			June 30, 2021			December 31, 2020
Resident/tenant accounts receivable balances	$	43,415			$	30,856		$	6,122		$	7,598
Allowance for doubtful accounts		(39,014	)			(24,021	)		(5,232	)		(6,527	)
Net receivable balances	$	4,401		(1)	$	6,835		$	890		$	1,071

Straight-line receivable balances	$	20,487			$	19,992		$	12,801		$	13,413

(1)	The Company held residential security deposits approximating 48.7% of the net receivable balance at June 30, 2021.

The following table presents residential bad debt for the Company’s properties for the six months and quarters ended June 30, 2021 and 2020 (amounts in thousands):

	Six Months Ended June 30,						Quarter Ended June 30,
Income Statement (Rental income):		2021			2020			2021			2020
Bad debt, net	$	25,772		$	13,348		$	12,079		$	9,564
% of rental income		2.2	%		1.0	%		2.1	%		1.5	%

Debt

EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. Weighted average interest rates noted below for the six months ended June 30, ~~2020~~2021 include the effect of any derivative instruments and amortization of premiums/discounts/OCI (other comprehensive income) on debt and derivatives.

Mortgage Notes Payable

The following table summarizes the Company’s mortgage notes payable activity for the six months ended June 30, ~~2020~~2021 (amounts in thousands):

Mortgage notes
payable, net as of
December 31, 2019

Proceeds

Lump sum
payoffs

Scheduled
principal
repayments

Amortization
of premiums/
discounts

Amortization
of deferred
financing
costs, net (1)

Mortgage notes
payable, net as of
June 30, 2020

Fixed Rate Debt:

Secured – Conventional

$
1,574,699

$
495,000

(2)
$
(91,500
)

$
(3,873
)

$
571

$
(2,035
)

$
1,972,862

Floating Rate Debt:

Secured – Conventional

7,050

145

—

—

—

120

7,315

Secured – Tax Exempt

359,861

—

—

—

620

99

360,580

Floating Rate Debt

366,911

145

—

—

620

219

367,895

Total

$
1,941,610

$
495,145

$
(91,500
)

$
(3,873
)

$
1,191

$
(1,816
)

$
2,340,757

Table of Contents

	Mortgage notes payable, net as of December 31, 2020		Proceeds			Lump sum payoffs			Scheduled principal repayments			Amortization of premiums/ discounts		Amortization of deferred financing costs, net (1)		Mortgage notes payable, net as of June 30, 2021
Fixed Rate Debt:
Secured – Conventional	$	1,901,091	$	28,500	(2)	$	(28,200	)	$	(3,713	)	$	758	$	354	$	1,898,790
Floating Rate Debt:
Secured – Conventional		31,494		19,259			—			—			—		120		50,873
Secured – Tax Exempt		361,305		—			(31,680	)		—			616		347		330,588
Floating Rate Debt		392,799		19,259			(31,680	)		—			616		467		381,461
Total	$	2,293,890	$	47,759		$	(59,880	)	$	(3,713	)	$	1,374	$	821	$	2,280,251

(1)	Represents amortization of deferred financing costs, net of debt financing costs.

(2)	Obtained ~~a 2.60%~~3.58% fixed rate mortgage ~~loan pool~~debt maturing on ~~May~~March 1, ~~2030.~~

~~The following table summarizes the Company’s debt extinguishment costs on mortgages recorded as additional interest expense during the six months ended June 30, 2020 (amounts in thousands):~~

Description

Amount

Write-offs of unamortized deferred financing costs

$
32

~~The following table summarizes certain interest rate and maturity date information as of and for the six months ended June 30, 2020:~~

		~~June 30, 2020~~
~~Interest Rate Ranges~~		~~0.07% - 5.29%~~
~~Weighted Average Interest Rate~~		~~3.51%~~
~~Maturity Date Ranges~~		~~2020-2061~~

~~Table of Contents~~

~~As of June 30, 2020, the Company had $281.7 million of secured debt (primarily tax-exempt bonds) subject to third party credit enhancement.~~

~~Notes~~

~~The following table summarizes the Company’s notes activity for the six months ended June 30, 2020 (amounts in thousands):~~

Notes, net as of
December 31, 2019

Proceeds

Lump sum
payoffs

Amortization
of premiums/
discounts

Amortization
of deferred
financing
costs, net (1)

Notes, net as of
June 30, 2020

Fixed Rate Debt:

Unsecured – Public

$
6,077,513

$
—

$
—

$
1,362

$
2,227

$
6,081,102

~~(1)~~

~~Represents amortization of deferred financing costs, net of debt financing costs.~~2031.

The following table summarizes certain interest rate and maturity date information as of and for the six months ended June 30, ~~2020:~~2021:

		June 30, ~~2020~~2021
Interest Rate Ranges		0.03% - 4.21%
Weighted Average Interest Rate		3.17%
Maturity Date Ranges		2022-2061

As of June 30, 2021, the Company had $250.0 million of secured debt (primarily tax-exempt bonds) subject to third-party credit enhancement.

Notes

The following table summarizes the Company’s notes activity for the six months ended June 30, 2021 (amounts in thousands):

Notes, net as of

December 31, 2020

Proceeds

Lump sum

payoffs

Realized/unrealized

(gain) loss on

derivative

instruments

Amortization

of premiums/

discounts

Amortization

of deferred

financing

costs, net (1)

Notes, net as of

June 30, 2021

Fixed Rate Debt:

Unsecured – Public

5,335,536

—

1,219

1,916

5,338,671

(1)	Represents amortization of deferred financing costs, net of debt financing costs.

The following table summarizes certain interest rate and maturity date information as of and for the six months ended June 30, 2021:

		June 30, 2021
Interest Rate Ranges		2.50% - 7.57%
Weighted Average Interest Rate		~~4.06%~~3.75%
Maturity Date Ranges		~~2021-2047~~2023-2047

The Company’s unsecured public notes contain certain financial and operating covenants including, among other things, maintenance of certain financial ratios. The Company was in compliance with its unsecured public debt covenants for the six months ended June 30, ~~2020.~~2021.

Line of Credit and Commercial Paper

~~On November 1, 2019, the~~The Company ~~replaced its existing $2.0 billion facility with~~has a $2.5 billion unsecured revolving credit facility maturing November 1, 2024. The Company has the ability to increase available borrowings by an additional $750.0 million by adding lenders to the facility, obtaining the agreement of existing lenders to increase their commitments or incurring one or more term loans. The interest rate on advances under the facility will generally be LIBOR plus a spread (currently 0.775%), or based on bids received from the lending group, and the Company pays an

Table of Contents

annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating. The ~~weighted average interest rate on the~~Company did 0t borrow any amounts under its revolving credit facility ~~was 1.47% for~~during the six months ended June 30, ~~2020.~~2021.

The Company has an unsecured commercial paper note program in ~~the United States. On November 4, 2019, the Company increased the~~which it may borrow up to a maximum ~~aggregate amount outstanding for the commercial paper program from $500.0 million~~of $1.0 billion subject to ~~$1.0 billion.~~market conditions. The notes will be sold under customary terms in the United States commercial paper note market ~~subject to market conditions~~ and will rank pari passu with all of the Company’s other unsecured senior indebtedness. The notes bear interest at various floating rates with a weighted average interest rate of ~~1.81%~~0.29% for the six months ended June 30, ~~2020.~~2021 and a weighted average maturity of 46 days as of June 30, 2021. The weighted average amount outstanding for the six months ended June 30, ~~2020~~2021 was approximately ~~$522.7~~$585.1 million.

The Company limits its utilization of the revolving credit 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 as of June 30, ~~2020~~2021 (amounts in thousands):

	June 30, 2020			June 30, 2021
Unsecured revolving credit facility commitment	$	2,500,000		$	2,500,000
Commercial paper balance outstanding		—			(632,000	)
Unsecured revolving credit facility balance outstanding		—			—
Other restricted amounts		(100,949	)		(100,699	)
Unsecured revolving credit facility availability	$	2,399,051		$	1,767,301

Other

The following table summarizes the Company’s total debt extinguishment costs recorded as additional interest expense during the six months ended June 30, 2021 (amounts in thousands):

~~Table of Contents~~

		June 30, 2021
Write-offs of unamortized deferred financing costs		$	264

10.	~~Derivative and Other~~ Fair Value Measurements~~Instruments~~

The valuation of financial instruments requires the Company to make estimates and judgments that affect the fair value of the instruments. The Company, where possible, bases the fair values of its financial instruments ~~including its derivative instruments,~~ on listed market prices and ~~third party~~third-party quotes. Where these are not available, the Company bases its estimates on current instruments with similar terms and maturities or on other factors relevant to the financial instruments.

In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company may seek to manage these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments. The Company may also use derivatives to manage commodity prices in the daily operations of the business.

During the six months ended June 30, 2021, the Company purchased and sold investment securities and recognized a net gain on sale of $23.4 million, which is included in interest and other income in the consolidated statements of operations. The Company did 0t own any of these investment securities at June 30, 2021.

A three-level valuation hierarchy exists for disclosure of fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels are defined as follows:

•

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•

Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

•

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Table of Contents

The ~~Company’s derivative positions are valued using models developed by~~following table summarizes the ~~respective counterparty as well as models applied internally by~~inputs to the Company that use as their inputs readily observable market parameters (such as forward yield curves and credit default swap data). Employee holdings other than Common Shares within the supplemental executive retirement plan (the “SERP”) are valued using quoted market prices for identical assets and are included in other assets and other liabilities on the consolidated balance sheets. Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners are valued using the quoted market price of Common Shares. The fair values disclosed for mortgage notes payable and unsecured debt (including its commercial paper and line of credit, if applicable) were calculated using indicative rates provided by lenders of similar loans in the case of mortgage notes payable and the private unsecured debt (including its commercial paper and line of credit, if applicable) and quoted market pricesvaluations for each ~~underlying issuance in the case~~type of ~~the public unsecured notes.~~fair value measurement:

Fair Value Measurement Type		Valuation Inputs
Employee holdings (other than Common Shares) within the supplemental executive retirement plan (the “SERP”)		Quoted market prices for identical assets. These holdings are included in other assets and other liabilities on the consolidated balance sheets.
Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners		Quoted market price of Common Shares.
Mortgage notes payable and private unsecured debt (including its commercial paper and line of credit, if applicable)		Indicative rates provided by lenders of similar loans.
Public unsecured notes		Quoted market prices for each underlying issuance.

The fair values of the Company’s financial instruments (other than mortgage notes payable, unsecured notes, commercial paper, line of credit and derivative instruments), including cash and cash equivalents and other financial instruments, approximate their carrying or contract value. The following table provides a summary of the carrying and fair values for the Company’s mortgage notes payable and unsecured debt (including its commercial paper and line of credit, if applicable) at June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively (amounts in thousands):

June 30, 2020

December 31, 2019

Carrying Value

Estimated Fair
Value (Level 2)

Carrying Value

Estimated Fair
Value (Level 2)

Mortgage notes payable, net

$
2,340,757

$
2,370,036

$
1,941,610

$
1,930,710

Unsecured debt, net

6,081,102

7,012,755

7,095,346

7,677,289

Total debt, net

$
8,421,859

$
9,382,791

$
9,036,956

$
9,607,999

~~Table of Contents~~

	June 30, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value (Level 2)		Carrying Value		Estimated Fair Value (Level 2)
Mortgage notes payable, net	$	2,280,251	$	2,308,025	$	2,293,890	$	2,313,263
Unsecured debt, net		5,970,441		6,688,195		5,750,366		6,686,612
Total debt, net	$	8,250,692	$	8,996,220	$	8,044,256	$	8,999,875

The following tables provide a summary of the fair value measurements for each major category of assets and liabilities measured at fair value on a recurring basis and the location within the accompanying consolidated balance sheets at June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively (amounts in thousands):

				Fair Value Measurements at Reporting Date Using									Fair Value Measurements at Reporting Date Using
Description	Balance Sheet Location	6/30/2020		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance Sheet Location	6/30/2021		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Supplemental Executive Retirement Plan	Other Assets	$	139,649	$	139,649	$	—	$	—	Other Assets	$	162,179	$	162,179	$	0	$	0

Liabilities
Supplemental Executive Retirement Plan	Other Liabilities	$	139,649	$	139,649	$	—	$	—	Other Liabilities	$	162,179	$	162,179	$	0	$	0

Redeemable Noncontrolling Interests –
Operating Partnership/Redeemable
Limited Partners	Mezzanine	$	336,695	$	—	$	336,695	$	—	Mezzanine	$	440,123	$	0	$	440,123	$	0

Fair Value Measurements at Reporting Date Using

Description

Balance Sheet
Location

12/31/2019

Quoted Prices in
Active Markets for
Identical Assets/Liabilities
(Level 1)

Significant Other
Observable Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Assets

Supplemental Executive Retirement Plan

Other Assets

$
151,889

$
151,889

$
—

$
—

Liabilities

Supplemental Executive Retirement Plan

Other Liabilities

$
151,889

$
151,889

$
—

$
—

Redeemable Noncontrolling Interests –

Operating Partnership/Redeemable

Limited Partners

Mezzanine

$
463,400

$
—

$
463,400

$
—

~~Thefollowingtablesprovide~~a~~summary~~of~~theeffect~~of~~fairvaluehedges ontheCompany’saccompanyingconsolidated statements of operations and comprehensive income for the six months ended June 30, 2020 and 2019, respectively (amounts in thousands):~~

~~June 30, 2020~~

~~Type of Fair Value Hedge~~

~~Location of~~

~~Gain/(Loss)~~

~~Recognized in~~

~~Income on~~

~~Derivative~~

~~Amount of~~

~~Gain/(Loss)~~

~~Recognized in~~

~~Income on~~

~~Derivative~~

~~Hedged Item~~

~~Income Statement~~

~~Location of~~

~~Hedged Item~~

~~Gain/(Loss)~~

~~Amount of~~

~~Gain/(Loss)~~

~~Recognized in~~

~~Income~~

~~on Hedged Item~~

~~Derivatives designated as hedging instruments:~~

~~Interest Rate Contracts:~~

~~Interest Rate Swaps~~

~~N/A~~

—

~~N/A~~

—

~~Total~~

—

June 30, 2019
Type of Fair Value Hedge

Location of
Gain/(Loss)
Recognized in
Income on
Derivative

Amount of
Gain/(Loss)
Recognized in
Income on
Derivative

Hedged Item

Income Statement
Location of
Hedged Item
Gain/(Loss)

Amount of
Gain/(Loss)
Recognized in
Income
on Hedged Item

Derivatives designated as hedging instruments:

Interest Rate Contracts:

Interest Rate Swaps

Interest expense

$
2,253

Fixed rate debt

Interest expense

$
(2,253
)
Total

$
2,253

$
(2,253
)

				Fair Value Measurements at Reporting Date Using
Description	Balance Sheet Location	12/31/2020		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Supplemental Executive Retirement Plan	Other Assets	$	160,293	$	160,293	$	0	$	0

Liabilities
Supplemental Executive Retirement Plan	Other Liabilities	$	160,293	$	160,293	$	0	$	0

Redeemable Noncontrolling Interests –
Operating Partnership/Redeemable
Limited Partners	Mezzanine	$	338,951	$	0	$	338,951	$	0

Table of Contents

The following tables provide a summary of the effect of cash flow hedges on the Company’s accompanying consolidated statements of operations and comprehensive income for the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively (amounts in thousands):

	Effective Portion							Effective Portion
June 30, 2020 Type of Cash Flow Hedge	Amount of Gain/(Loss) Recognized in OCI on Derivative			Location of Gain/(Loss) Reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income
June 30, 2021 Type of Cash Flow Hedge								Amount of Gain/(Loss) Recognized in OCI on Derivative		Location of Gain/(Loss) Reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Forward Starting Swaps	$	(1,190	)	Interest expense	$	(11,398	)	$	0	Interest expense	$	(4,637	)
Total	$	(1,190	)		$	(11,398	)	$	0		$	(4,637	)

	Effective Portion							Effective Portion
June 30, 2019 Type of Cash Flow Hedge	Amount of Gain/(Loss) Recognized in OCI on Derivative			Location of Gain/(Loss) Reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income
June 30, 2020 Type of Cash Flow Hedge								Amount of Gain/(Loss) Recognized in OCI on Derivative			Location of Gain/(Loss) Reclassified from Accumulated OCI into Income	Amount of Gain/(Loss) Reclassified from Accumulated OCI into Income
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Forward Starting Swaps	$	(33,765	)	Interest expense	$	(8,902	)	$	(1,190	)	Interest expense	$	(11,398	)
Total	$	(33,765	)		$	(8,902	)	$	(1,190	)		$	(11,398	)

As of June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, there were approximately $~~67.4~~39.0 million and $~~77.6~~43.7 million in deferred losses, net, included in accumulated other comprehensive income (loss), respectively, related to derivative instruments, of which an estimated ~~$25.7~~$10.4 million may be recognized as additional interest expense during the twelve months ending June 30, ~~2021.~~

~~In April 2020, the Company paid approximately $1.2 million to settle 2 forward starting swaps in conjunction with the issuance of $495.0 million of~~ ~~ten-year~~ secured conventional mortgage notes. The entire $1.2 million was initially deferred as a component of accumulated other comprehensive income (loss) and will be recognized as an increase to interest expense over the first five years of the mortgage notes.

~~Table of Contents~~

2022.

11.	Earnings Per Share and Earnings Per Unit

Equity Residential

The following tables set forth the computation of net income per share – basic and net income per share – diluted for the Company (amounts in thousands except per share amounts):

	Six Months Ended June 30,						Quarter Ended June 30,						Six Months Ended June 30,						Quarter Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Numerator for net income per share – basic:
Net income	$	604,152		$	430,556		$	271,481		$	321,299		$	388,404		$	604,152		$	328,040		$	271,481
Allocation to Noncontrolling Interests – Operating Partnership		(21,248	)		(15,429	)		(9,713	)		(11,510	)		(13,056	)		(21,248	)		(10,913	)		(9,713	)
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties		(13,410	)		(1,620	)		(880	)		(821	)		(1,423	)		(13,410	)		(741	)		(880	)
Preferred distributions		(1,545	)		(1,545	)		(772	)		(772	)		(1,545	)		(1,545	)		(772	)		(772	)
Numerator for net income per share – basic	$	567,949		$	411,962		$	260,116		$	308,196		$	372,380		$	567,949		$	315,614		$	260,116
Numerator for net income per share – diluted:
Net income	$	604,152		$	430,556		$	271,481		$	321,299		$	388,404		$	604,152		$	328,040		$	271,481
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties		(13,410	)		(1,620	)		(880	)		(821	)		(1,423	)		(13,410	)		(741	)		(880	)
Preferred distributions		(1,545	)		(1,545	)		(772	)		(772	)		(1,545	)		(1,545	)		(772	)		(772	)
Numerator for net income per share – diluted	$	589,197		$	427,391		$	269,829		$	319,706		$	385,436		$	589,197		$	326,527		$	269,829
Denominator for net income per share – basic and diluted:
Denominator for net income per share – basic		371,689			369,952			371,795			370,342			373,050			371,689			373,812			371,795
Effect of dilutive securities:
OP Units		13,013			12,902			13,023			12,885			12,544			13,013			12,044			13,023
Long-term compensation shares/units		1,570			2,790			1,095			2,880			1,773			1,570			1,964			1,095
Denominator for net income per share – diluted		386,272			385,644			385,913			386,107			387,367			386,272			387,820			385,913
Net income per share – basic	$	1.53		$	1.11		$	0.70		$	0.83		$	1.00		$	1.53		$	0.84		$	0.70
Net income per share – diluted	$	1.53		$	1.11		$	0.70		$	0.83		$	1.00		$	1.53		$	0.84		$	0.70

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ERP Operating Limited Partnership

The following tables set forth the computation of net income per Unit – basic and net income per Unit – diluted for the Operating Partnership (amounts in thousands except per Unit amounts):

Six Months Ended June 30,

Quarter Ended June 30,

2020

2019

2020

2019

Numerator for net income per Unit – basic and diluted:

Net income

$
604,152

$
430,556

$
271,481

$
321,299

Net (income) loss attributable to Noncontrolling
Interests – Partially Owned Properties

(13,410
)

(1,620
)

(880
)

(821
)
Allocation to Preference Units

(1,545
)

(1,545
)

(772
)

(772
)
Numerator for net income per Unit – basic and diluted

$
589,197

$
427,391

$
269,829

$
319,706

Denominator for net income per Unit – basic and diluted:

Denominator for net income per Unit – basic

384,702

382,854

384,818

383,227

Effect of dilutive securities:

Dilution for Units issuable upon assumed exercise/vesting
of the Company’s long-term compensation shares/units

1,570

2,790

1,095

2,880

Denominator for net income per Unit – diluted

386,272

385,644

385,913

386,107

Net income per Unit – basic

$
1.53

$
1.11

$
0.70

$
0.83

Net income per Unit – diluted

$
1.53

$
1.11

$
0.70

$
0.83

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	Six Months Ended June 30,						Quarter Ended June 30,
	2021			2020			2021			2020
Numerator for net income per Unit – basic and diluted:
Net income	$	388,404		$	604,152		$	328,040		$	271,481
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties		(1,423	)		(13,410	)		(741	)		(880	)
Allocation to Preference Units		(1,545	)		(1,545	)		(772	)		(772	)
Numerator for net income per Unit – basic and diluted	$	385,436		$	589,197		$	326,527		$	269,829
Denominator for net income per Unit – basic and diluted:
Denominator for net income per Unit – basic		385,594			384,702			385,856			384,818
Effect of dilutive securities:
Dilution for Units issuable upon assumed exercise/vesting of the Company’s long-term compensation shares/units		1,773			1,570			1,964			1,095
Denominator for net income per Unit – diluted		387,367			386,272			387,820			385,913
Net income per Unit – basic	$	1.00		$	1.53		$	0.84		$	0.70
Net income per Unit – diluted	$	1.00		$	1.53		$	0.84		$	0.70

12.	Commitments and Contingencies

The Company, as an owner of real estate, is subject to various Federal, state and local laws, including, but not limited to, rent regulations and environmental laws. Compliance by the Company with existing laws has not had a material adverse effect on the Company. However, the Company cannot predict the impact of new or changed laws or regulations, whether related to COVID-19 or otherwise, on its current properties or on properties that it may acquire in the future.

The Company does not believe there is any litigation pending or threatened against it that, individually or in the aggregate, may reasonably be expected to have a material adverse effect on the Company.

As of June 30, ~~2020,~~2021, the Company has 2 wholly owned projects ~~and 1 partially owned project~~ totaling ~~824~~624 apartment units in various stages of development with remaining commitments to fund of approximately ~~$328.0~~$60.5 million ~~(inclusive of applicable construction mortgage and joint venture partner obligations)~~ and estimated completion dates ranging through ~~September~~December 31, 2021, as well as 1 completed partially owned development project that is in lease-up.

As of June 30, ~~2021. Estimated completion dates and budgeted capital costs for projects under development currently remain unchanged from~~2021, the ~~Company’s estimates in the fourth quarter of 2019. The Company will reevaluate these dates and costs as the impact of COVID-19 becomes clearer. The~~ Company has 2 ~~projects that were~~consolidated joint venture agreements with third-party partners for the development of multifamily rental properties, 1 of which was substantially completed ~~and stabilized~~ during the quarter ended June 30, ~~2020.~~

As of June 30, 2020, the Company has 2 joint venture agreements with third party partners for the consolidated development of multifamily rental properties, one of which is currently under construction as noted above. The development commitment to fund the project under construction is included in the development funding totals above for one of the joint ventures.2021. The joint venture agreements with each partner include a buy-sell provision that provides the right, but not the obligation, for the Company to acquire each respective partner’s interests or sell its interests at any time following the occurrence of certain pre-defined events described in the joint venture agreements. See Note 6 for additional discussion.

13.	Reportable Segments

Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses and about which discrete financial information is available that is evaluated regularly by the chief operating decision maker. The chief operating decision maker decides how resources are allocated and assesses performance on a recurring basis at least quarterly.

The Company’s primary business is the acquisition, development and management of multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents. The chief operating decision maker evaluates the Company’s operating performance geographically by market and both on a same store and non-same store basis. While the Company does maintain a non-residential presence, it ~~historically has accounted~~accounts for approximately ~~4.0%~~3.8% of total revenues for the six months ended June 30, 2021 and is designed as an amenity for our residential residents. The chief operating decision maker evaluates the performance of each property on a consolidated residential and non-residential basis. The Company’s geographic consolidated same store operating segments ~~located in urban and high-density suburban communities~~ represent its reportable segments.

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The Company’s development activities are other business activities that do not constitute an operating segment and as such, have been aggregated in the “Other” category in the tables presented below.

All revenues are from external customers and there is 0 customer who contributed 10% or more of the Company’s total revenues during the six months and quarters ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively.

The primary financial measure for the Company’s rental real estate segment is net operating income (“NOI”), which represents rental income less: 1) property and maintenance expense and 2) real estate taxes and insurance expense (all as reflected in the accompanying consolidated statements of operations and comprehensive income). 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. Revenues for all leases are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.

~~Table of Contents~~

The following table presents a reconciliation of NOI from our rental real estate for the six months and quarters ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively (amounts in thousands):

	Six Months Ended June 30,						Quarter Ended June 30,						Six Months Ended June 30,						Quarter Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Rental income	$	1,335,837		$	1,331,676		$	653,532		$	669,374		$	1,195,661		$	1,335,837		$	598,059		$	653,532
Property and maintenance expense		(220,268	)		(223,531	)		(104,452	)		(108,461	)		(224,800	)		(220,268	)		(107,746	)		(104,452	)
Real estate taxes and insurance expense		(192,770	)		(182,888	)		(95,038	)		(91,446	)		(200,871	)		(192,770	)		(97,401	)		(95,038	)
Total operating expenses		(413,038	)		(406,419	)		(199,490	)		(199,907	)		(425,671	)		(413,038	)		(205,147	)		(199,490	)
Net operating income	$	922,799		$	925,257		$	454,042		$	469,467		$	769,990		$	922,799		$	392,912		$	454,042

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The following tables present NOI for each segment from our rental real estate for the six months and quarters ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, as well as total assets and capital expenditures at June 30, ~~2020~~2021 (amounts in thousands):

	Six Months Ended June 30, 2020						Six Months Ended June 30, 2019						Six Months Ended June 30, 2021							Six Months Ended June 30, 2020
	Rental Income		Operating Expenses		NOI		Rental Income		Operating Expenses		NOI		Rental Income		Operating Expenses		NOI			Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	239,914	$	71,930	$	167,984	$	240,751	$	72,145	$	168,606	$	226,592	$	74,889	$	151,703		$	241,570	$	73,626	$	167,944
Orange County		53,013		12,167		40,846		51,887		12,142		39,745		52,510		12,458		40,052			53,013		12,083		40,930
San Diego		47,848		12,417		35,431		47,023		12,126		34,897		37,928		9,185		28,743			37,365		9,033		28,332
Subtotal - Southern California		340,775		96,514		244,261		339,661		96,413		243,248		317,030		96,532		220,498			331,948		94,742		237,206

San Francisco		236,580		59,313		177,267		234,514		57,629		176,885		209,617		65,034		144,583			246,209		62,389		183,820
Washington D.C.		196,601		59,331		137,270		195,453		59,389		136,064		198,147		64,973		133,174			207,958		62,819		145,139
New York		227,179		98,581		128,598		230,808		96,067		134,741		196,304		102,288		94,016			226,532		98,230		128,302
Seattle		127,073		35,440		91,633		124,029		34,634		89,395		120,831		38,720		82,111			133,338		37,070		96,268
Boston		123,673		35,144		88,529		124,671		35,639		89,032		113,714		37,719		75,995			123,673		35,275		88,398
Denver		8,944		2,419		6,525		9,125		2,417		6,708		18,920		5,674		13,246			19,074		5,427		13,647
Total same store		1,260,825		386,742		874,083		1,258,261		382,188		876,073		1,174,563		410,940		763,623			1,288,732		395,952		892,780

Non-same store/other (2) (3)
Non-same store		58,629		17,748		40,881		14,374		4,423		9,951		10,499		3,506		6,993			7,374		1,611		5,763
Other (3)		16,383		8,548		7,835		59,041		19,808		39,233		10,599		11,225		(626	)		39,731		15,475		24,256
Total non-same store/other		75,012		26,296		48,716		73,415		24,231		49,184		21,098		14,731		6,367			47,105		17,086		30,019

Totals	$	1,335,837	$	413,038	$	922,799	$	1,331,676	$	406,419	$	925,257	$	1,195,661	$	425,671	$	769,990		$	1,335,837	$	413,038	$	922,799

(1)	For the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, ~~2019,~~2020, less properties subsequently sold, which represented ~~74,264~~76,335 apartment units.

(2)	For the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, non-same store primarily includes properties acquired after January 1, ~~2019,~~2020, plus any properties in lease-up and not stabilized as of January 1, ~~2019.~~2020.

(3)	Other includes development, other corporate operations and operations prior to disposition for properties sold.

	Quarter Ended June 30, 2021						Quarter Ended June 30, 2020
	Rental Income		Operating Expenses		NOI		Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	113,639	$	36,769	$	76,870	$	118,686	$	35,841	$	82,845
Orange County		26,669		6,122		20,547		26,318		5,910		20,408
San Diego		19,188		4,545		14,643		18,587		4,447		14,140
Subtotal - Southern California		159,496		47,436		112,060		163,591		46,198		117,393

San Francisco		104,285		31,759		72,526		121,106		30,593		90,513
Washington D.C.		99,030		31,651		67,379		103,241		30,717		72,524
New York		98,271		49,834		48,437		110,230		47,908		62,322
Seattle		60,574		19,372		41,202		66,096		18,778		47,318
Boston		57,777		18,512		39,265		60,711		17,087		43,624
Denver		9,575		2,643		6,932		9,418		2,639		6,779
Total same store		589,008		201,207		387,801		634,393		193,920		440,473

Non-same store/other (2) (3)
Non-same store		4,589		1,755		2,834		2,190		298		1,892
Other (3)		4,462		2,185		2,277		16,949		5,272		11,677
Total non-same store/other		9,051		3,940		5,111		19,139		5,570		13,569

Totals	$	598,059	$	205,147	$	392,912	$	653,532	$	199,490	$	454,042

(1)	For the quarters ended June 30, 2021 and 2020, same store primarily includes all properties acquired or completed that were stabilized prior to April 1, 2020, less properties subsequently sold, which represented 76,556 apartmentunits.

(2)	For the quarters ended June 30, 2021 and 2020, non-same store primarily includes properties acquired after April 1, 2020, plus any properties in lease-up and not stabilized as of April 1,2020.

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Quarter Ended June 30, 2020

Quarter Ended June 30, 2019

Rental
Income

Operating
Expenses

NOI

Rental
Income

Operating
Expenses

NOI

Same store (1)

Los Angeles

$
117,994

$
35,013

$
82,981

$
121,216

$
35,688

$
85,528

Orange County

26,318

5,953

20,365

26,058

5,966

20,092

San Diego

23,706

6,100

17,606

23,720

5,978

17,742

Subtotal - Southern California

168,018

47,066

120,952

170,994

47,632

123,362

San Francisco

116,303

29,045

87,258

118,044

28,528

89,516

Washington D.C.

97,527

28,680

68,847

98,571

29,409

69,162

New York

111,949

48,130

63,819

117,457

47,626

69,831

Seattle

63,378

18,383

44,995

63,695

17,853

45,842

Boston

59,990

16,984

43,006

62,751

17,398

45,353

Denver

6,110

1,733

4,377

6,403

1,831

4,572

Total same store

623,275

190,021

433,254

637,915

190,277

447,638

Non-same store/other (2) (3)

Non-same store

24,631

7,212

17,419

4,000

1,124

2,876

Other (3)

5,626

2,257

3,369

27,459

8,506

18,953

Total non-same store/other

30,257

9,469

20,788

31,459

9,630

21,829

Totals

$
653,532

$
199,490

$
454,042

$
669,374

$
199,907

$
469,467

~~(1)~~

For the quarters ended June 30, 2020 and 2019, same store primarily includes all properties acquired or completed that were stabilized prior to April 1, 2019, less properties subsequently sold, which represented 74,843 apartment~~units.~~

~~(2)~~

~~For the quarters ended June 30, 2020 and 2019, non-same store primarily includes properties acquired after April 1, 2019, plus any properties in lease-up and not stabilized as of April 1,2019.~~

(3)	Other includes development, other corporate operations and operations prior to disposition for properties sold.

	Six Months Ended June 30, 2020				Six Months Ended June 30, 2021
	Total Assets		Capital Expenditures		Total Assets		Capital Expenditures
Same store (1)
Los Angeles	$	3,064,404	$	13,070	$	3,052,015	$	8,232
Orange County		397,148		3,458		380,069		2,372
San Diego		382,082		1,993		237,670		1,427
Subtotal - Southern California		3,843,634		18,521		3,669,754		12,031

San Francisco		3,288,932		6,940		3,442,539		10,443
Washington D.C.		3,120,074		10,534		3,291,944		13,108
New York		4,001,050		10,429		3,951,560		13,956
Seattle		1,838,484		4,334		1,987,663		6,723
Boston		1,790,996		8,631		1,726,284		9,067
Denver		251,427		245		502,062		615
Total same store		18,134,597		59,634		18,571,806		65,943

Non-same store/other (2) (3)
Non-same store		1,642,289		1,129		663,201		288
Other (3)		938,065		502		1,229,339		212
Total non-same store/other		2,580,354		1,631		1,892,540		500

Totals	$	20,714,951	$	61,265	$	20,464,346	$	66,443

(1)	Same store primarily includes all properties acquired or completed that were stabilized prior to January 1, ~~2019,~~2020, less properties subsequently sold, which represented ~~74,264~~76,335 apartment units.

(2)	Non-same store primarily includes properties acquired after January 1, ~~2019,~~2020, plus any properties in lease-up and not stabilized as of January 1, ~~2019.~~2020.

(3)	Other includes development, other corporate operations and capital expenditures for properties sold.

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14.	Subsequent Events

The continued rapid development and fast-changing nature of the COVID-19 pandemic creates many unknowns that could have a future material impact on the Company. Its duration and severity and the extent of the adverse health impact on the general population, our residents and our employees, as well as the potential changes in customer preferences for living in the urban and dense suburban locations in which many of the Company’s properties are located, are among the unknowns. These, among other items, will likely impact the economy, the unemployment rate and our operations and could materially affect our future consolidated results of operations, financial condition, liquidity, investments and overall performance.

Subsequent to June 30, ~~2020,~~2021, the Company:

•

~~Repaid $19.7 million~~Acquired 4 properties consisting of ~~mortgage debt at par prior to maturity.~~1,081 apartment units for $365.5 million;

•

Sold 2 properties consisting of 395 apartment units for $215.3 million; and

•

Contributed $3.3 million for 1 unconsolidated land parcel acquisition as part of the formation of a joint venture with a third-party.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

For further information including definitions for capitalized terms not defined herein, refer to the consolidated financial statements and footnotes thereto included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. In addition, please refer to the Definitions section below for various capitalized terms not immediately defined in this Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

Forward-looking statements are intended to be made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates, projections and assumptions made by management. While the Company’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, which could cause actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements. Many of these uncertainties and risks are difficult to predict and beyond management’s control, such as the current novel coronavirus (“COVID-19”) pandemic (see below for further discussion). Forward-looking statements are not guarantees of future performance, results or events. The forward-looking statements contained herein are made as of the date hereof and the Company undertakes no obligation to update or supplement these forward-looking statements.

In addition, these forward-looking statements are subject to risks related to the COVID-19 pandemic and its accompanying variants, many of which are unknown, including the duration, ~~and~~ severity ~~of the pandemic,~~and the extent of the adverse health impact on the general population, ~~and on~~ our residents ~~customers~~ and employees, the rate of vaccine distribution and effectiveness of vaccinations, the overall reopening progress in ~~particular, its impact on~~ the ~~employment rate and~~cities in which we operate, the ~~economy and the corresponding impact on~~potential long-term changes in customer preferences for living in our ~~residents’ and tenants’ ability to pay their rent on time or at all, the extent and impact of governmental responses~~communities and the impact of operational changes we have implemented and may implement in response to the pandemic.

~~Factors~~Additional factors that might cause such differences are discussed in Part I of the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, particularly those under Item 1A, Risk Factors.~~Additional factors are also included in Part II, Item 1A,~~ ~~Risk Factors, of this Quarterly Report on Form 10-Q.~~

Forward-looking statements and related uncertainties are also included in the Notes to Consolidated Financial Statements in this report.

~~Due to the inherent uncertainty surrounding the social~~ The 2021 guidance assumptions disclosed throughout this Item 2 are based on current expectations and economic disruption resulting from the COVID-19 pandemic, the Company withdrew its full-year 2020 guidance earlier this year. The Company is also suspending issuing guidance in future periods until there is greater certainty surrounding the impact of the ongoing pandemic.are forward-looking.

Overview

Equity Residential (“EQR”) 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 ~~rental apartment~~residential properties located in ~~urban~~ and ~~high-density suburban communities where today’s renters want to live, work and play.~~around dynamic cities that attract high quality long-term renters. ERP Operating Limited Partnership (“ERPOP”) is focused on conducting the multifamily property business of EQR. EQR is a Maryland real estate investment trust (“REIT”) formed in March 1993 and ERPOP is an Illinois limited partnership formed in May 1993. References to the “Company,” “we,” “us” or “our” mean collectively EQR, ERPOP and those entities/subsidiaries owned or controlled by EQR and/or ERPOP. References to the “Operating Partnership” mean collectively ERPOP and those entities/subsidiaries owned or controlled by ERPOP.

The Company’s corporate headquarters is located in Chicago, Illinois and the Company also operates regional property management offices in ~~each~~most of its markets. As of June 30, 2020, the Company had approximately 2,600 employees who provided real estate operations, leasing, legal, financial, accounting, acquisition, disposition, development and other support functions.

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Available Information

You may access our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, our proxy statements and any amendments to any of those ~~reports~~reports/statements we file with the Securities and Exchange Commission (“SEC”) free of charge on our website, www.equityapartments.com. These ~~reports~~reports/statements are made available on our website as soon as reasonably practicable after we file them with the SEC. The information contained on our website, including any information referred to in this report as being available on our website, is not a part of or incorporated into this report.

Business Objectives and Operating and Investing Strategies

The Company’s and the Operating Partnership’s overall business objectives and operating and investing strategies have not changed from the information included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, ~~2019, though the Company and the Operating Partnership will continue to be focused on its response to the COVID-19 pandemic in the near-term.~~2020. As more fully discussed in the Company’s and the Operating Partnership’s Annual Report on Form 10-K, it continues to be the Company’s intention over time, through varying degrees of both acquisitions and new wholly-owned and joint venture development projects, to further diversify its portfolio into select new expansion markets that ~~have~~share similar characteristics ~~similar to~~as its current established markets and to optimize the mix of the Company’s properties located in urban vs. dense suburban ~~submarkets.~~submarketswithin its markets.

COVID-19 Impact

~~On March 11, 2020,~~The Company's and the ~~World Health Organization declared the outbreak of COVID-19 a pandemic. The continued rapid development and fast-changing nature of~~Operating Partnership's overall impact from the COVID-19 pandemic ~~creates many unknowns that could have a future material impact on~~has not changed materially from the ~~Company. Its duration and severity~~information included in the Company's and the ~~extent of~~Operating Partnership's Annual Report on Form 10-K for the ~~adverse health impact on the general population, our residents and our employees, as well as the potential changes in customer preferences for living~~year ended December 31, 2020. As more fully discussed in the ~~urban~~Company's and ~~dense suburban locations in which many~~the Operating Partnership's Annual Report on Form 10-K, despite the impact of the Company’s properties are located, are among the unknowns. These, among other items, will likely impact the economy, the unemployment rate and our operations and could materially affect our future consolidated results of operations, financial condition, liquidity, investments and overall performance. For additional details, see Item 1A, ~~Risk Factors~~.

~~The Company continues to support its residents and employees during the~~ COVID-19, pandemic. The Company is utilizing technology to allow our property teams to interact remotely with current and prospective residents, including a touchless new leasing process and a service process designed to limit contact. The Company also successfully implemented changes to the physical layout of its properties and remains focused on further enhancing its existing commitment to health and safety during the pandemic. We alsowe continue to ~~provide additional paid leave for employees impacted by~~believe that the pandemic and paid special bonuses to certain on-site employees during the second quarter of 2020 in recognition of their significant efforts. In addition, the Company continues to support its corporate and regional employees by allowing them to work remotely during the pandemic. Among other resident support efforts, we have an extensive outreach process for residents financially impacted by the pandemic and have created payment plans to assist them.

~~We see good demand~~long-term prospects for our ~~apartments, both urban and suburban, but with increased customer price sensitivity, especially in~~business remain strong. See the ~~urban cores~~ Results of ~~New York City, San Francisco and Boston/Cambridge, MA. Looking forward, we believe~~Operations discussion below for additional information on how the ~~rate of improvement in our business will be dictated by how effectively~~ongoing recovery from the COVID-19 pandemic ~~can be controlled~~is currently impacting our markets and more normal economic activity restored. In the meantime, we believe our strong balance sheet, state of the art operating platform and opportunistic mindset leaves us well positioned to weather the storm and to take advantage should conditions allow.operations.

~~During the second quarter of 2020, the Company also:~~

•

~~Experienced a recovery in demand by late May 2020. Initial leads, Traffic and applications continue to be in-line with the same time last year;~~

•

~~Collected on average 97% of its total monthly Residential rental income. July 2020 collections continue to trend on a similar pace to prior months; and~~

•

~~Had the highest resident retention for the second quarter in the Company’s history.~~

~~Table of Contents~~

Results of Operations

~~2020~~2021 Transactions

In conjunction with our business objectives and operating ~~strategy,~~and investing strategies, the Company continued to invest in apartment properties located primarily in our urban and high-density suburban communities and sell apartment properties that we believe will have inferior long-term returns. The following table provides a rollforward of the transactions that occurred during the six months ended June 30, ~~2020:~~2021:

Portfolio Rollforward

($ in thousands)

	Properties			Apartment Units			Sales Price			Disposition Yield			Properties			Apartment Units			Purchase Price			Acquisition Cap Rate
12/31/2019		309			79,962
12/31/2020														304			77,889
Acquisitions:
Consolidated Rental Properties														2			533		$	185,000			3.9	%
Consolidated Rental Properties – Not Stabilized (1)														1			280		$	95,200			4.1	%
																			Sales Price			Disposition Yield
Dispositions:
Consolidated Rental Properties		(5	)		(1,552	)	$	(754,361	)		(4.7	)%		(5	)		(795	)	$	(409,500	)		(3.7	)%
6/30/2020		304			78,410
Completed Developments – Consolidated														1			200
6/30/2021														303			78,107

(1)	The Company acquired one property in the Denver market in the second quarter of 2021 that is in lease-up and is expected to stabilize in its second year of ownership at the Acquisition Cap Rate listed above.

The consolidated properties acquired were located in the Denver, Washington D.C. and Atlanta markets. The Atlanta acquisition marked the Company’s re-entry into the Atlanta market. The consolidated properties disposed of were located in the ~~Phoenix, San Francisco~~New York, Los Angeles and ~~Washington D.C.~~Seattle markets and the sales generated an Unlevered IRR of ~~10.8%~~8.8%. The consolidated property development completion was located in the San Francisco market. See Note 4 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s real estate transactions.

Table of Contents

The Company’s guidance assumes consolidated rental acquisitions of $1.5 billion and consolidated rental dispositions of $1.5 billion and expects that the Acquisition Cap Rate will be approximately equal to the Disposition Yield for the full year ending December 31, 2021. We currently ~~budget~~anticipate spending approximately ~~$225.0~~$260.0 million on development costs during the year ending December 31, ~~2020,~~2021, of which approximately ~~$95.2~~$125.2 million was spent during the six months ended June 30, ~~2020,~~2021, primarily for properties currently under construction. Certain of these costs ~~will~~are expected to be funded by ~~third party construction mortgages and~~ joint venture partner ~~obligations.~~obligations and third-party construction mortgages. Work at all of our development ~~project in Boston resumed after a nine-week suspension~~projects continues with no material delays or cost overruns notwithstanding some brief disruptions from governmental construction moratoriums due to the city’s COVID-19-related temporary construction moratorium, and our projects in Bethesda, MD and Alameda, CA continue under construction. The expected spending noted above could change as a result of COVID-19 related impacts.COVID-19.

Same Store Results

Properties that the Company owned and were stabilized (see definition below) for all of both of the six months ended June 30, ~~2020~~2021 and ~~2019~~2020 (the “Six-Month ~~2020~~2021 Same Store Properties”), which represented ~~74,264~~76,335 apartment units, ~~impacted~~drove the Company’s results of operations. The Six-Month ~~2020~~2021 Same Store Properties are discussed in the following paragraphs.

The Company’s primary financial measure for evaluating each of its apartment communities is net operating income (“NOI”). NOI represents 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.

The following tables provide a rollforward of the apartment units included in Same Store Properties and a reconciliation of apartment units included in Same Store Properties to those included in Total Properties for the six months ended June 30, ~~2020:~~2021:

Six Months Ended June 30, 2020

Properties

Apartment
Units

Same Store Properties at December 31, 2019

279

71,830

2017 acquisitions

2

510

2018 acquisitions

5

1,461

2019 acquisitions

—

—

2020 dispositions

(5
)

(1,552
)
Lease-up properties stabilized

5

2,015

Same Store Properties at June 30, 2020

286

74,264

~~Table of Contents~~

	Six Months Ended June 30, 2021
	Properties			Apartment Units
Same Store Properties at December 31, 2020		285			73,585
2019 acquisitions stabilized		12			3,323
2021 dispositions		(5	)		(795	)
Lease-up properties stabilized		1			222
Same Store Properties at June 30, 2021		293			76,335

	Six Months Ended June 30, 2020				Six Months Ended June 30, 2021
	Properties		Apartment Units		Properties		Apartment Units
Same Store		286		74,264		293		76,335
Non-Same Store:
2019 acquisitions		13		3,540
2021 acquisitions						3		813
2020 acquisitions						1		158
2019 acquisitions not yet stabilized						1		217
Master-Leased properties (1)		1		162		1		162
Lease-up properties not yet stabilized (2)		3		443		3		421
Other		1		1		1		1
Total Non-Same Store		18		4,146		10		1,772
Total Properties and Apartment Units		304		78,410		303		78,107

Note: Properties are considered “stabilized” when they have achieved 90% occupancy for three consecutive months. Properties are included in same store when they are stabilized for all of the current and comparable periods presented.

(1)	Consists of one property containing 162 apartment units that is wholly owned by the Company where the entire project is master-leased to a ~~third party~~third-party corporate housing provider.

(2)	Consists of properties in various stages of lease-up and properties where lease-up has been completed but the properties were not stabilized for the comparable periods presented.

Table of Contents

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 results (amounts in thousands):

Six Months Ended June 30,

2020

2019

Operating income

$
778,974

$
578,894

Adjustments:

Property management

51,317

50,765

General and administrative

26,353

29,710

Depreciation

418,398

404,723

Net (gain) loss on sales of real estate properties

(352,243
)

(138,835
)
Total NOI

$
922,799

$
925,257

Rental income:

Same store

$
1,260,825

$
1,258,261

Non-same store/other

75,012

73,415

Total rental income

1,335,837

1,331,676

Operating expenses:

Same store

386,742

382,188

Non-same store/other

26,296

24,231

Total operating expenses

413,038

406,419

NOI:

Same store

874,083

876,073

Non-same store/other

48,716

49,184

Total NOI

$
922,799

$
925,257

~~Table of Contents~~

	Six Months Ended June 30,
	2021				2020
Operating income	$	512,404			$	778,974
Adjustments:
Property management		50,585				51,317
General and administrative		30,061				26,353
Depreciation		400,635				418,398
Net (gain) loss on sales of real estate properties		(223,695	)			(352,243	)
Total NOI	$	769,990			$	922,799
Rental income:
Same store	$	1,174,563			$	1,288,732
Non-same store/other		21,098				47,105
Total rental income		1,195,661				1,335,837
Operating expenses:
Same store		410,940				395,952
Non-same store/other		14,731				17,086
Total operating expenses		425,671				413,038
NOI:
Same store		763,623		��		892,780
Non-same store/other		6,367				30,019
Total NOI	$	769,990			$	922,799

The following table provides comparative total same store results and statistics for the Six-Month ~~2020~~2021 Same Store Properties:

June YTD ~~2020~~2021 vs. June YTD ~~2019~~2020

Same Store Results/Statistics Including ~~74,264~~76,335 Same Store Apartment Units

$ in thousands (except for Average Rental Rate)

June YTD 2020																		June YTD 2019
June YTD 2021																										June YTD 2021																		June YTD 2020
	Residential			% Change			Non- Residential			% Change			Total		% Change				Residential			Non- Residential		Total			Residential			% Change			Non- Residential			% Change			Total		% Change				Residential			Non- Residential		Total
Revenues	$	1,223,361			1.0	%	$	37,464	(1)		(20.4	%)	$	1,260,825		0.2	%	Revenues	$	1,211,210		$	47,051	$	1,258,261		$	1,131,724			(9.5	%)	$	42,839	(1)		13.3	%	$	1,174,563		(8.9	%)	Revenues	$	1,250,911		$	37,821	$	1,288,732
Expenses	$	375,710			1.1	%	$	11,032			3.4	%	$	386,742		1.2	%	Expenses	$	371,517		$	10,671	$	382,188		$	398,834			3.6	%	$	12,106			10.2	%	$	410,940		3.8	%	Expenses	$	384,969		$	10,983	$	395,952
NOI	$	847,651			0.9	%	$	26,432			(27.3	%)	$	874,083		(0.2	%)	NOI	$	839,693		$	36,380	$	876,073		$	732,890			(15.4	%)	$	30,733			14.5	%	$	763,623		(14.5	%)	NOI	$	865,942		$	26,838	$	892,780

Average Rental Rate	$	2,871			1.8	%												Average Rental Rate	$	2,821							$	2,588			(9.4	%)												Average Rental Rate	$	2,857
Physical Occupancy		95.7	%		(0.7	%)												Physical Occupancy		96.4	%							95.5	%		(0.1	%)												Physical Occupancy		95.6	%
Turnover		21.4	%		(1.9	%)												Turnover		23.3	%							21.3	%		(0.3	%)												Turnover		21.6	%

Note: Same store revenues for all leases are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.

(1)

~~Non-Residential operations have been more significantly impacted by the COVID-19 pandemic than the Company’s core Residential business. The decline~~Changes in same store Non-Residential revenues isare primarily driven by lower ~~public parking income, deferral/abatement of rent~~bad debt and higher ~~bad debt expense.~~parking income.

Table of Contents

The following table provides results and statistics related to our Residential same store operations for the six months ended June 30, ~~2020~~2021 and ~~2019:~~2020:

June YTD ~~2020~~2021 vs. June YTD ~~2019~~2020

Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Year																															Increase (Decrease) from Prior Year
Markets/Metro Areas	Apartment Units		June YTD 2020 % of Actual NOI			June YTD 2020 Average Rental Rate		June YTD 2020 Weighted Average Physical Occupancy %			June YTD 2020 Turnover			Revenues			Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover			Apartment Units		June YTD 2021 % of Actual NOI			June YTD 2021 Average Rental Rate		June YTD 2021 Weighted Average Physical Occupancy %			June YTD 2021 Turnover			Revenues			Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover
Los Angeles		15,968		19.7	%	$	2,615		95.3	%		23.2	%		0.1	%		(0.3	%)		0.2	%		1.0	%		(0.9	%)		(2.6	%)		16,193		20.4	%	$	2,402		96.1	%		20.7	%		(6.5	%)		1.8	%		(10.2	%)		(7.3	%)		0.7	%		(2.4	%)
Orange County		4,028		4.8	%		2,272		96.6	%		18.8	%		2.2	%		0.2	%		2.8	%		2.0	%		0.2	%		(5.4	%)		4,028		5.5	%		2,230		97.4	%		16.1	%		(1.0	%)		3.1	%		(2.2	%)		(1.8	%)		0.8	%		(2.7	%)
San Diego		3,385		4.2	%		2,435		96.4	%		23.7	%		1.9	%		2.1	%		1.9	%		2.0	%		0.0	%		(2.7	%)		2,706		3.9	%		2,392		97.7	%		20.5	%		1.5	%		1.7	%		1.5	%		0.5	%		1.0	%		(1.2	%)
Subtotal – Southern California		23,381		28.7	%		2,529		95.7	%		22.5	%		0.7	%		0.1	%		0.9	%		1.3	%		(0.6	%)		(3.1	%)		22,927		29.8	%		2,370		96.5	%		19.9	%		(4.7	%)		1.9	%		(7.4	%)		(5.5	%)		0.8	%		(2.3	%)

San Francisco		12,183		20.7	%		3,334		95.8	%		21.1	%		1.1	%		2.9	%		0.5	%		1.7	%		(0.6	%)		(1.9	%)		12,707		19.4	%		2,864		94.6	%		22.8	%		(15.1	%)		4.3	%		(21.6	%)		(14.0	%)		(1.2	%)		1.4	%
Washington DC		13,711		16.0	%		2,463		95.9	%		19.8	%		1.3	%		(0.1	%)		1.9	%		2.1	%		(0.7	%)		(0.8	%)
Washington D.C.																																	14,569		17.8	%		2,320		96.1	%		21.6	%		(5.1	%)		3.5	%		(8.9	%)		(5.5	%)		0.3	%		1.7	%
New York		9,475		14.0	%		3,930		95.4	%		18.7	%		(0.3	%)		2.4	%		(2.4	%)		1.1	%		(1.3	%)		0.4	%		9,343		11.2	%		3,453		93.2	%		18.4	%		(15.1	%)		4.0	%		(30.4	%)		(13.2	%)		(2.1	%)		(0.6	%)
Seattle		8,442		10.2	%		2,469		96.3	%		22.9	%		3.8	%		2.7	%		4.2	%		3.9	%		(0.1	%)		(5.1	%)		8,819		10.5	%		2,244		95.7	%		24.7	%		(10.3	%)		4.4	%		(16.0	%)		(9.8	%)		(0.5	%)		1.8	%
Boston		6,346		9.7	%		3,178		94.7	%		22.7	%		1.0	%		(1.9	%)		2.2	%		2.6	%		(1.4	%)		1.2	%		6,346		9.5	%		2,839		95.6	%		20.6	%		(9.7	%)		5.0	%		(15.5	%)		(10.7	%)		0.9	%		(2.1	%)
Denver		726		0.7	%		2,133		94.5	%		30.6	%		(1.2	%)		(0.3	%)		(1.5	%)		0.6	%		(1.9	%)		0.0	%		1,624		1.8	%		2,000		96.6	%		27.5	%		(0.6	%)		5.3	%		(3.0	%)		(2.5	%)		1.8	%		(4.0	%)

Total		74,264		100.0	%	$	2,871		95.7	%		21.4	%		1.0	%		1.1	%		0.9	%		1.8	%		(0.7	%)		(1.9	%)		76,335		100.0	%	$	2,588		95.5	%		21.3	%		(9.5	%)		3.6	%		(15.4	%)		(9.4	%)		(0.1	%)		(0.3	%)

Note: The above table reflects Residential same store results ~~only, which historically~~only. Residential operations account for approximately ~~96.0%~~96.2% of total ~~revenues.~~

~~Table of Contents~~

~~We continue to work with our residents and tenants on payment plans and collections and our allowance policies remain consistent. We expect our reserves and bad debt charge-offs to remain elevated~~revenues for the ~~remainder of this year.~~ six months ended June 30, 2021.

The following table ~~provides~~includes select operating metrics for Residential ~~and Non-Residential accounts receivable and straight-line receivable balances for the Company’s same store properties as of June 30, 2020 and March 31, 2020 (amounts in thousands):~~

Same Store ~~Resident/Tenant Accounts Receivable Balances~~

~~Including 74,264 Same Store Apartment Units~~

~~$ in thousands~~Properties:

Residential

Non-Residential

June 30, 2020

March 31, 2020

June 30, 2020

March 31, 2020

Resident/tenant accounts receivable balances

$
18,175

$
5,358

$
4,815

$
2,270

Allowance for doubtful accounts

(6,518
)

(1,850
)

(2,416
)

(1,532
)
Net receivable balances

$
11,657

(1)
$
3,508

$
2,399

$
738

Straight-line receivable balances

$
2,990

$
1,633

$
24,161

$
26,154

	Q1 2021			Q2 2021			July 2021 (1)
Physical Occupancy (2)		95.6	%		96.3	%		96.4	%
Percentage of Residents Renewing by quarter/month		52.9	%		53.2	%		55.0	%

New Lease Change		(17.7	%)		(5.3	%)		6.3	%
Renewal Rate Achieved		(5.2	%)		0.2	%		3.6	%
Blended Rate		(12.2	%)		(2.7	%)		4.8	%

(1)	~~The Company held Residential security deposits approximating 20%~~July 2021 results are preliminary.

(2)	Physical Occupancy is as of ~~the net receivable balance at~~month-end March for Q1 2021, month-end June ~~30, 2020.~~for Q2 2021 and as of July 22nd for July 2021.

The following table provides ~~preliminary information related to Residential~~guidance for our expected full year 2021 same store ~~operations for the month ended July 2020 compared to the actuals for the quarter ended June 30, 2020.~~ operating performance (includes Residential and Non-Residential):

July 2020

Second Quarter 2020

New Lease Change

(8.3
%)

(7.0
%)
Renewal Rate Achieved

(0.9
%)

0.7
%
Blended Rate (1)

(4.5
%)

(2.7
%)
Physical Occupancy

95.0
%

94.9
%

~~(1)~~	~~Blended Rate after applying the effect of new move-in and renewal concessions is approximately (5.5%~~	Revised Full Year 2021	Previous Full Year 2021
Physical Occupancy		95.3% to 96.3%	95.0% to 96.0%
Revenue change		(5.0%) ~~and (3.5%~~to (4.0%)	(8.0%) ~~for July 2020 and the second quarter of 2020, respectively, driven by higher usage in the urban cores of New York, San Francisco and Boston.~~to (6.0%)
Expense change		2.75% to 3.25%	3.0% to 4.0%
NOI change		(8.5%) to (7.5%)	(13.0%) to (11.0%)

~~The July 2020 results listed above are approximately equal to~~

Despite the ~~Company's June 2020~~significant impact from the pandemic on our business reflected in the results for ~~New Lease Change, Renewal Rate Achieved~~the six months ended June 30, 2021, the pace of the recovery across our portfolio continues to exceed our expectations. The accelerating economy and ~~Blended Rate. Concession use~~reopening of cities is ~~higher~~driving our operations to recover rapidly with robust demand for our apartments in ~~July 2020 than in June 2020.~~

~~We expected the negative impact on~~all our markets, leading to high Physical Occupancy, ~~to be most pronounced~~increased pricing power and a significant reduction in the second quarter and then stabilize at a new base level, which currently appears to be the case. The story is more mixed as it relates to Average Rental Rates, which remains more challenged in the urban cores of New York City, San Francisco and Boston/Cambridge, MA. Use of new lease concessions during the second quarter of 2020 was concentrated in the submarkets noted above. Traffic and application activity improved throughout the quarter as Average Rental Rates were reduced in these submarkets. Meanwhile the rest of the portfolio is showing more stability in Average Rental Rates, though those rates are still lower than last year.

~~As a result of the differing impact that the COVID-19 pandemic is currently having on the~~Leasing Concessions. Key operating ~~performance of our markets and submarkets, we believe it is most helpful to discuss our portfolio as follows:~~ drivers for this recovery include:

•

~~First, our suburban properties, which represent approximately 45%~~Demand and Physical Occupancy – Strong demand is driving both improved Physical Occupancy in all of our ~~portfolio, have been more resilient during the pandemic with~~markets and a return of pricing power. Across most of our markets, Physical Occupancy ~~declining to a low point of 95.2% during the second quarter of 2020 but since recovering fully to levels~~has recovered and stabilized at or above ~~the prior year. By the middle~~pre-pandemic levels and is currently at 96.4% as of July 2020, Physical Occupancy for this category of properties stood at 96.6%. The percentage of suburban leases renewing was very strong at 65% and continues to trend well above the prior year. Average Rental Rates have slowly recovered since early May with limited concession use, though those rates are still below the prior year level.

•

Second, our properties that are located in the urban cores of New York City, San Francisco and Boston/Cambridge, MA, which represent about 25% of our portfolio, have Physical Occupancy of 90.9% by the middle of July 2020. This group of properties has the highest use of concessions (about 50% of all new leases) and the most pressure on Average Rental Rates. For the second quarter of 2020, these urban properties renewed 58% of residents, which was 500 basis points lower than the second quarter of 2019 and was trending down throughout the quarter, ending at 53% in June 2020. We believe these properties have the highest risk of volatility in operations for the balance of the year.22, 2021.

Table of Contents

•

~~Our third category consists~~Renewal Rates, Percentage of ~~urban properties~~Residents Renewing and Pricing – Portfolio-wide Renewal Rate Achieved turned positive in our other markets, such as Washington D.C., Seattle and Southern California, and constitutes about 30% of our portfolio. These properties reached a low point in Physical Occupancy of 94.0% in the middle of May 2020, but quickly rebounded and had Physical Occupancy of 95.2% by the middle of July 2020. Average Rental Rates have been stable since the middle of May, though they are down year-over-year, and concessions are being used on about 15% of our new leases. During the second quarter of 2021. The Percentage of Residents Renewing steadily improved since the end of the third quarter of 2020 ~~57% of residents renewed~~and has now stabilized at ~~these properties,~~approximately 55%, which is ~~300 basis points better than~~in line with historical averages but still below elevated 2019 and early 2020 levels. There has also been significant improvement in pricing (net of Leasing Concessions) since the ~~second~~end of the fourth quarter of ~~2019.~~ ~~Overall, this group~~2020. Portfolio-wide pricing now exceeds pre-pandemic levels. We continue to test price sensitivity in every market by raising rents and reducing both the value and quantity of ~~urban properties has had consistent operations for~~Leasing Concessions being granted.

•

Leasing Concessions – Monthly Leasing Concessions granted continue to decline significantly. Leasing Concessions granted in June and July (preliminary) 2021 are $2.0 million and $1.5 million, respectively, which are down from their peak of $6.1 million per month in February 2021. At the ~~past two months, with a slight increase~~end of the first quarter of 2021, about 20% of applications were receiving on average four weeks in ~~Physical Occupancy in the last couple of weeks~~Leasing Concessions. As of July ~~2020.~~2021, less than 3% of our applications received on average just over two weeks with further declines expected.

The following table provides Physical Occupancy by geographic market for the Six-Month 2021 Same Store Properties as of the dates listed:

Markets/Metro Areas	As of March 31, 2021			As of June 30, 2021			As of July 22, 2021
Boston		95.5	%		95.3	%		95.7	%
New York		93.9	%		96.3	%		96.5	%
Washington D.C.		95.9	%		96.2	%		96.3	%
Seattle		95.5	%		95.8	%		96.0	%
San Francisco		95.0	%		95.4	%		95.2	%
Los Angeles		96.1	%		96.9	%		97.4	%
Orange County		97.6	%		98.4	%		97.9	%
San Diego		97.7	%		97.9	%		97.9	%
Denver		96.5	%		97.0	%		96.7	%
Total		95.6	%		96.3	%		96.4	%

In summary, the positive trends and favorable forward operating indicators described have positioned our portfolio well, driving the revision upward to our same store revenue and NOI guidance for the full year 2021. See below for specific discussion on operating performance by geographic market:

•

Boston – Boston has performed strongly during the second quarter and into July 2021. Physical Occupancy is currently below expectations but improvement is expected in the third quarter of 2021. Pricing continues to improve and is now above pre-pandemic March 2020 levels.

•

New York – New York experienced a surge of demand at the beginning of the leasing season with nine consecutive weeks of record application volume. The use of Leasing Concessions in this market has declined significantly with only 3% of July 2021 applications receiving a concession at an average of two weeks compared to about 40% of applications in May 2021 receiving an average concession of six weeks. Physical Occupancy and pricing continue to improve into July 2021 with pricing crossing over pre-pandemic peaks from July 2019.

•

Washington, D.C. – Washington, D.C. has shown relatively steady performance with good momentum through the second quarter and into July 2021. Physical Occupancy has been relatively stable and pricing has continued to improve.

•

Seattle – This market continues to improve with more clarity from large employers regarding the return to office. Physical Occupancy is stable while pricing has demonstrated strength in the second quarter of 2021 and is now above peak 2019 levels.

•

San Francisco – San Francisco’s pace of recovery is steady and better than originally anticipated but still lags the recovery in other markets likely due to more uncertainty around the return to office from large technology employers and a delayed re-opening of the city. Leasing Concession use continues to decline with about 5% of July 2021 applications receiving an average concession of less than two weeks, down from 15% in May 2021 receiving an average concession of four weeks. Physical Occupancy is stable and pricing continues to recover but remains below pre-pandemic levels.

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•

Los Angeles – Los Angeles has been one of the best performing markets in our portfolio during the pandemic. This market has shown resilience and signs of strengthening as Physical Occupancy and pricing have been relatively stable throughout the pandemic. Leasing Concession use is limited and primarily at urban assets. Bad debt in this market remains the most elevated in our portfolio and we continue to work with our residents to apply for federally sponsored rental assistance.

•

Orange County and San Diego – Both markets, which are largely suburban, continue to stand out in terms of performance, providing additional pricing opportunities. Physical Occupancy and pricing are performing well above pre-pandemic levels.

•

Denver – While still a relatively small market for the Company, this portfolio continues to deliver solid performance. Both Physical Occupancy and pricing showed strong growth during the second quarter and into July 2021. Demand remains strong across the market.

Despite strong rent collections throughout the pandemic, the financial impact from a small subset of our residents and Non-Residential tenants not paying has led to higher levels of bad debt than we have historically experienced. We continue to work with our residents, including assisting them in applying for federally sponsored rental assistance, and Non-Residential tenants on meeting their financial obligations and our bad debt allowance policies remain consistent with those in place before the pandemic. During the second quarter of 2021, we received our first payments from federally sponsored rental assistance and expect this activity to increase over the remainder of the year. However, we still expect our reserves and bad debt expense to remain elevated in 2021. See Note 8 in the Notes to Consolidated Financial Statements for additional discussion of leases at June 30, 2021.

The following table provides comparative ~~total~~ same store operating expenses for the Six-Month ~~2020~~2021 Same Store Properties:

June YTD ~~2020~~2021 vs. June YTD ~~2019~~2020

Total Same Store Operating Expenses Including ~~74,264~~76,335 Same Store Apartment Units

$ in thousands

											% of Actual
											YTD 2020
	Actual		Actual		$			%			Operating
	YTD 2020		YTD 2019		Change (5)			Change			Expenses			June YTD 2021		June YTD 2020		$ Change (5)			% Change			% of June YTD 2021 Operating Expenses
Real estate taxes	$	170,416	$	164,075	$	6,341			3.9	%		44.1	%	$	178,082	$	174,980	$	3,102			1.8	%		43.3	%
On-site payroll (1)		81,249		81,757		(508	)		(0.6	)%		21.0	%		82,689		83,137		(448	)		(0.5	)%		20.1	%
Utilities (2)		50,654		49,787		867			1.7	%		13.1	%		56,575		51,786		4,789			9.2	%		13.8	%
Repairs and maintenance (3)		44,497		48,027		(3,530	)		(7.4	)%		11.5	%		51,107		45,472		5,635			12.4	%		12.4	%
Insurance		12,187		10,365		1,822			17.6	%		3.2	%		13,758		12,510		1,248			10.0	%		3.4	%
Leasing and advertising		4,385		4,917		(532	)		(10.8	)%		1.1	%		5,522		4,453		1,069			24.0	%		1.3	%
Other on-site operating expenses (4)		23,354		23,260		94			0.4	%		6.0	%		23,207		23,614		(407	)		(1.7	)%		5.7	%
Total Same Store Operating Expenses (includes Residential and Non-Residential)	$	386,742	$	382,188	$	4,554			1.2	%		100.0	%	$	410,940	$	395,952	$	14,988			3.8	%		100.0	%

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

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

(3)	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.

(4)	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.

(5)	Theyear-to-date over year-to-date changes ~~are due~~were primarily ~~to:~~driven by the following factors:

•

Real estate taxes – ~~Higher~~Increase is lower than prior expectations due to lower rates and assessed values continue to drive real estate tax growth across most markets with a slight improvement from previous expectations caused by successful appeals activity and lower than expected rate growth in New York.values.

•

On-site payroll – ~~Results better than expectations due to faster than anticipated progress in transition to enhanced operating platform,~~Improved sales and service staff utilization from various technology initiatives, lower than expected employee benefit-related costs and ~~less overtime, partially offset by one-time frontline worker bonuses.~~higher than usual staffing vacancies during the current period.

•

Utilities – ~~Growth lower than expected due to warmer winter weather and energy rate decreases.~~

•

~~Repairs and maintenance – Decrease primarily~~Increase driven by ~~deferral~~rate increases and ~~cancellation~~higher usage of ~~some projects as a result of COVID-19-related delays.~~

•

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

•

~~Leasing~~water, sewer, trash, electric and ~~advertising – Decrease greater than expectations due in part to suspension of resident activities.~~gas.

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•

Repairs and maintenance – Increase was driven by low comparable period expense due to the pandemic along with greater snowfall on the East Coast and higher turnover expense from accelerated leasing in 2021.

•

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 low comparable period expense due to the pandemic, increased digital advertising and selective use of outside broker fees of approximately $0.4 million for the six months ended June 30, 2021, primarily in the New York market.

•

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

The Company now anticipates same store NOI to decline for the full year 2021 by approximately 8.5% to 7.5% (previously was anticipated to decline by approximately 13.0% to 11.0%) primarily driven by the expected improvement in same store revenues discussed above. We now anticipate same store expenses to increase between 2.75% to 3.25% (previously was anticipated to increase between 3.0% to 4.0%) for 2021 as compared to 2020, primarily driven by lower real estate taxes and on-site payroll. Given the continued uncertainty resulting from the COVID-19 pandemic, we anticipate the possibility of greater variability around the midpoint, up or down, within these ranges than we would typically experience.

See also Note 13 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s segment disclosures.

Non-Same Store/Other Results

Non-same store/other NOI results for the six months ended June 30, ~~2020~~2021 decreased approximately ~~$0.5~~$23.7 million compared to the same period of ~~2019 and~~2020. These results consist primarily of properties acquired in calendar ~~year 2019,~~years 2020 and 2021, operations from the Company’s development properties and operations prior to disposition from ~~2019~~2020 and ~~2020~~2021 sold properties. This difference is due primarily to:

•

A ~~positive~~negative impact of ~~higher~~lower NOI from development and newly stabilized development properties in lease-up of ~~$3.4~~$0.5 million;

•

A positive impact of higher NOI from non-stabilized properties acquired in 2019, 2020 and 2021 of ~~$27.6~~$1.9 million;

•

A negative impact of lower NOI from other non-same store properties (including one master-leased property) of $0.2 million; and

•

A negative impact of lost NOI from ~~2019~~2020 and ~~2020~~2021 dispositions of ~~$29.5~~$21.5 million.

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Comparison of the six months and quarter ended June 30, ~~2020~~2021 to the six months and quarter ended June 30, ~~2019~~2020

The following table presents a reconciliation of diluted earnings per share/unit for the six months and quarter ended June 30, ~~2020~~2021 as compared to the same ~~period~~periods in ~~2019:~~2020:

	Six Months Ended June 30			Quarter Ended June 30			Six Months Ended June 30			Quarter Ended June 30
Diluted earnings per share/unit for period ended 2019	$	1.11		$	0.83
Diluted earnings per share/unit for period ended 2020							$	1.53		$	0.70
Property NOI		(0.01	)		(0.04	)		(0.38	)		(0.16	)
Interest expense		0.06			0.03			0.08			0.04
Debt extinguishment costs		0.04			0.04
Non-operating asset gains/losses								0.06			0.06
Net gain/loss on property sales		0.34			(0.17	)		(0.30	)		0.21
Other		(0.01	)		0.01			0.01			(0.01	)
Diluted earnings per share/unit for period ended 2020	$	1.53		$	0.70
Diluted earnings per share/unit for period ended 2021							$	1.00		$	0.84

The decrease in consolidated NOI is primarily a result of the Company’s lower NOI from same store properties, largely due to the economic impact from the COVID-19 pandemic. The following table presents the changes in the components of consolidated NOI for the six months and quarter ended June 30, ~~2020~~2021 as compared to the same periods in ~~2019:~~2020:

	Six Months Ended June 30, 2020			Quarter Ended June 30, 2020			Six Months Ended June 30, 2021			Quarter Ended June 30, 2021
Consolidated rental income		0.3	%		(2.4	%)		(10.5	%)		(8.5	%)
Consolidated operating expenses (1)		1.6	%		(0.2	%)		3.1	%		2.8	%
Consolidated NOI		(0.3	%)		(3.3	%)		(16.6	%)		(13.5	%)

(1)	Consolidated operating expenses are comprised of property and maintenance and real estate taxes and insurance.

Property management expenses include off-site expenses associated with the self-management of the Company’s properties as well as management fees paid to any ~~third party~~third-party management companies. These expenses ~~increased~~decreased approximately ~~$0.6~~$0.7 million or ~~1.1%~~1.4% for the six months ended June 30, ~~2020~~2021 as compared to the prior year period. ~~The increase~~This decrease is primarily attributable to decreases in payroll-related costs, travel costs, legal and professional fees and temporary help/contractors, partially offset by increases in information technology related costs specifically for various operating initiatives such as sales-focused improvements and service ~~enhancements, partially offset by decreases in payroll-related costs, travel costs and training/conference costs.~~enhancements. These expenses ~~decreased~~increased approximately $0.8 million or ~~3.1%~~3.6% for the quarter ended June 30, ~~2020~~2021 as compared to the prior year period, primarily due to ~~a decrease~~increases in payroll-related costs, ~~travel~~legal and professional fees and information technology related costs specifically for various operating initiatives such as sales-focused improvements and ~~training/conference costs.~~service enhancements. The Company ~~suspended~~anticipates that property management expenses will approximate $96.5 million to $98.5 million for the ~~majority of all travel and training/conference activities as a result of the COVID-19 pandemic.~~year ending December 31, 2021.

General and administrative expenses, which include corporate operating expenses, ~~decreased~~increased approximately ~~$3.4~~$3.7 million or ~~11.3%~~14.1% and approximately ~~$2.5~~$2.8 million or ~~17.4%~~24.0% for the six months and quarter ended June 30, ~~2020,~~2021, respectively, as compared to the prior year periods, primarily due to ~~decreases~~increases in payroll-related costs, partially offset by decreases in office rent as a result of the consolidation of space at the Company’s ~~executive changes over~~corporate headquarters. The Company anticipates that general and administrative expenses will approximate $55.0 million to $57.0 million for the ~~past two years.~~year ending December 31, 2021.

Depreciation expense, which includes depreciation on non-real estate assets, decreased approximately $17.8 million or 4.2% and approximately $5.3 million or 2.6% for the six months and quarter ended June 30, 2021, respectively, as compared to the prior year periods. These decreases are primarily due to in-place leases for 2019 acquisitions being fully depreciated as of December 31, 2020 and the Company being a net seller during 2020, which resulted in lower depreciation in the current period, offset by additional depreciation expense on properties acquired in 2020 and 2021 and a development property placed in service during 2021.

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~~Depreciation expense, which includes depreciation~~Net gain on ~~non-real~~sales of real estate ~~assets, increased~~properties decreased approximately ~~$13.7~~$128.5 million or ~~3.4% and approximately $5.5 million or 2.7%~~36.5% for the six months ~~and quarter~~ ended June 30, ~~2020, respectively,~~2021 as compared to the prior year ~~periods,~~period, primarily as a result of ~~additional depreciation expense on~~the sale of five consolidated apartment properties ~~acquired~~for a lower gain in ~~2019 and development~~2021 as compared to the sale of five consolidated apartment properties ~~placed~~ in ~~service during 2019, offset by lower depreciation from properties sold~~the same period in ~~2019 and~~ 2020.

Net gain on sales of real estate properties increased ~~approximately $213.4~~$79.5 million or 55.1% for the ~~six months~~quarter ended June 30, ~~2020~~2021 as compared to the prior year period, primarily as a result of a higher sales volume with the sale of five consolidated apartment properties ~~during~~in the ~~first half~~second quarter of ~~2020~~2021 as compared to the sale of two consolidated apartment properties during the first half of 2019. Net gain on sales of real estate properties increased approximately $5.4 million or 3.9% for the quarter ended June 30, 2020 as compared to the prior year period, primarily as a result of the sale of two consolidated apartment properties sold for a higher gain in the second quarter of 2020 as compared to the sale of two consolidated properties in the same period in ~~2019.~~2020.

Interest and other income increased approximately ~~$1.5~~$20.8 million ~~or 80.3%~~ and approximately ~~$0.4~~$22.6 million ~~or 31.2%~~ for the six months and quarter ended June 30, ~~2020,~~2021, respectively, as compared to the prior year periods. These increases are primarily due to ~~higher~~a gain of $23.4 million on the sale of various investment securities that occurred during 2021 but not during 2020, partially offset by decreases in insurance/litigation settlement proceeds received during 2020 that did not occur in ~~2019, partially offset by decreases in short-term investment income on cash and restricted deposit accounts in 2020 as compared to 2019 due to a lower rate environment and lower overall balances.~~2021.

Other expenses ~~decreased~~increased approximately ~~$4.2~~$3.2 million or ~~49.6%~~76.3% and approximately ~~$3.4~~$1.6 million or ~~66.9%~~97.3% for the six months and quarter ended June 30, ~~2020,~~2021, respectively, as compared to the prior year periods, primarily due to ~~decreases in~~a $2.2 million construction defect reserve and other various ~~consulting costs related to a data analytics project which was completed last year and~~ litigation and environmental settlements, partially offset by ~~increases~~a decrease in advocacy ~~contributions in 2020 as compared to 2019.~~contributions.

Interest expense, including amortization of deferred financing costs, decreased approximately ~~$38.0~~$33.0 million or ~~18.1%~~19.2% and approximately ~~$28.6~~$14.9 million or ~~25.4%~~17.8% for the six months and quarter ended June 30, ~~2020,~~2021, respectively, as compared to the prior year periods. ~~The decrease is~~These decreases are primarily due ~~primarily~~ to ~~lower debt extinguishment costs,~~ lower overall debt balances outstanding ~~between~~as compared to the prior year periods, ~~as a result of deploying disposition proceeds to repay debt,~~ as well as lower overall interest rates. The effective interest cost on all indebtedness, excluding debt extinguishment costs/prepayment penalties, for the six months ended June 30, ~~2020~~2021 was ~~3.95%~~3.54% as compared to ~~4.34%~~3.95% for the prior year period, and for the quarter ended June 30, ~~2020~~2021 was ~~3.96%~~3.48% as compared to ~~4.34%~~3.96% for the prior year period. The Company capitalized interest of approximately ~~$4.1~~$8.2 million and ~~$2.7~~$4.1 million during the six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$2.3~~$4.4 million and ~~$1.5~~$2.3 million during the quarters ended June 30, 2021 and 2020, ~~and 2019,~~ respectively.

~~Income from investments in unconsolidated entities decreased approximately $70.3~~ The Company anticipates that interest expense, excluding debt extinguishment costs/prepayment penalties, will approximate $270.0 million to $276.5 million and ~~$69.8~~capitalized interest will approximate $16.5 million to $17.5 million for the ~~six months and quarter ended June 30, 2020, respectively, as compared to the prior~~ year ~~periods, primarily as a result of a $69.5 million gain on the sale of two unconsolidated properties in 2019 that did not occur in the same periods in 2020.~~ending December 31, 2021.

Net (income) loss attributable to Noncontrolling Interests in partially owned properties ~~decreased~~increased approximately ~~$11.8~~$12.0 million or 89.4% for the six months ended June 30, ~~2020,~~2021, as compared to the prior year period, primarily as a result of noncontrolling interest allocations related to the sale of one partially owned apartment property in the first quarter of 2020 as compared to no sales in the same period in ~~2019.~~2021.

Liquidity and Capital Resources

~~The Company believes its current liquidity position is strong despite the impact of the COVID-19 pandemic.~~ With approximately ~~$2.4~~$1.8 billion in readily available liquidity, limited near-term maturities, very strong credit metrics and ample access to capital markets at ~~historically~~ low rates, the Company believes it is well positioned to meet its future obligations. See further discussion below.

Short-Term Liquidity and Cash Proceeds

The Company generally expects to meet its short-term liquidity requirements, including capital expenditures related to maintaining its existing properties and scheduled unsecured note and mortgage note repayments, through its working capital, net cash provided by operating activities and borrowings under the Company’s revolving credit facility and commercial paper program. Currently, the Company considers its cash provided by operating activities to be adequate to meet operating requirements and payments of distributions.

The following table presents the Company’s balances for cash and cash equivalents, restricted deposits and the available borrowing capacity on its revolving credit facility as of June 30, ~~2020~~2021 and December 31, ~~2019~~2020 (amounts in thousands):

	June 30, 2021		December 31, 2020
Cash and cash equivalents	$	39,492	$	42,591
Restricted deposits	$	353,009	$	57,137
Unsecured revolving credit facility availability	$	1,767,301	$	1,984,051

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June 30,
2020

December 31,
2019

Cash and cash equivalents

$
187,416

$
45,753

Restricted deposits

$
58,117

$
71,246

Unsecured revolving credit facility availability

$
2,399,051

$
1,379,071

During the six months ended June 30, ~~2020,~~2021, the Company generated proceeds from various transactions, which included the following:

•

Disposed of five consolidated rental properties, receiving net proceeds of approximately ~~$747.6~~$406.9 million;

•

Obtained ~~$495.0~~$28.5 million in ~~a 2.60%~~3.58% fixed rate mortgage ~~loan pool~~debt maturing on ~~May~~March 1, ~~2030; and~~2031;

•

Issued Common Shares related to share option exercises and ESPP purchases and received net proceeds of ~~$13.7~~$42.3 million, which were contributed to the capital of the Operating Partnership in exchange for additional OP Units (on a one-for-one Common Share per OP Unit basis).; and

•

Sold various investment securities, receiving net proceeds of $191.4 million.

During the six months ended June 30, ~~2020,~~2021, the above proceeds along with net cash flow from operations and borrowings from the Company’s revolving line of credit and commercial paper program were primarily utilized to:

•

Acquire three consolidated rental properties for approximately $281.4 million in cash;

•

Invest ~~$95.2~~$125.2 million primarily in development projects; ~~and~~

•

Repay ~~$95.4~~$63.6 million of mortgage loans (inclusive of scheduled principal repayments).; and

Subsequent to June 30, 2020, the Company prepaid at par $19.7 million of the $23.7 million in debt maturities remaining in 2020. The Company has debt maturities of $834.9 million in 2021, $750.0 million of which is due on December 15, 2021.

•

Purchase $166.9 million of various investment securities and other investments.

Credit Facility and Commercial Paper Program

The Company has a $2.5 billion unsecured revolving credit facility maturing November 1, 2024. The Company has the ability to increase available borrowings by an additional $750.0 million by adding lenders to the facility, obtaining the agreement of existing lenders to increase their commitments or incurring one or more term loans. The interest rate on advances under the facility will generally be LIBOR plus a spread (currently 0.775%), or based on bids received from the lending group, and the Company pays an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating.

The unsecured revolving credit agreement contains provisions that establish a process for entering into an amendment to replace LIBOR under certain circumstances, such as the anticipated phase-out of LIBOR by the end of 2021. At this time, it cannot be determined with certainty what interest rate(s) may succeed LIBOR, if any, and how any successor or alternative rates for LIBOR may affect borrowing costs or the availability of variable interest rate borrowings.

The Company ~~has an unsecured commercial paper note program in the United States. The Company~~ may borrow up to a maximum of $1.0 billion under ~~this~~its commercial paper program subject to market conditions. The notes will be sold under customary terms in the United States commercial paper note market and will rank pari passu with all of the Company’s other unsecured senior indebtedness.While the COVID-19 pandemic caused a temporary disruption in the commercial paper market in March 2020, the Company has maintained access to such market and expects to continue to be able to do so in the future.

July 28, 2020

Unsecured revolving credit facility commitment

$
2,500,000

Commercial paper balance outstanding

—

Unsecured revolving credit facility balance outstanding

—

Other restricted amounts

(100,949
)
Unsecured revolving credit facility availability

$
2,399,051

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	July 23, 2021
Unsecured revolving credit facility commitment	$	2,500,000
Commercial paper balance outstanding		(882,000	)
Unsecured revolving credit facility balance outstanding		—
Other restricted amounts		(100,442	)
Unsecured revolving credit facility availability	$	1,517,558

Dividend Policy

The Company determines its dividends/distributions based on actual and projected financial conditions, the Company’s actual and projected liquidity and operating results, the Company’s projected cash needs for capital expenditures and other investment activities and such other factors as the Company’s Board of Trustees deems relevant. The Company declared a dividend/distribution for the first and second quarters of ~~2020~~2021 of $0.6025 per share/unit in each quarter, ~~an annualized increase of 6.2% over~~consistent with the amount paid in ~~2019.~~2020. All future dividends/distributions remain subject to the discretion of the Company’s Board of Trustees.

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Total dividends/distributions paid in July ~~2020~~2021 amounted to ~~$232.2~~$233.0 million (excluding distributions on Partially Owned Properties), which consisted of certain distributions declared during the quarter ended June 30, ~~2020.~~2021.

Long-Term Financing and Capital Needs

The Company expects to meet its long-term liquidity requirements, such as lump sum unsecured note and mortgage debt maturities, property acquisitions and financing of development activities, through the issuance of secured and unsecured debt and equity securities (including additional OP Units), proceeds received from the disposition of certain properties and joint ventures, along with cash generated from operations after all distributions. The Company has a significant number of unencumbered properties available to secure additional mortgage borrowings should unsecured capital be unavailable or the cost of alternative sources of capital be too high. The value of and cash flow from these unencumbered properties are in excess of the requirements the Company must maintain in order to comply with covenants under its unsecured notes and line of credit. Of the ~~$27.2~~$27.4 billion in investment in real estate on the Company’s balance sheet at June 30, ~~2020, $23.0~~2021, $23.4 billion or ~~84.7%~~85.6% was unencumbered. However, there can be no assurances that these sources of capital will be available to the Company in the future on acceptable terms or otherwise.

EQR issues equity and guarantees certain debt of the Operating Partnership from time to time. EQR does not have any indebtedness as all debt is incurred by the Operating Partnership.

The Company’s total debt summary and debt maturity schedules as of June 30, ~~2020~~2021 are as follows:

Debt Summary as of June 30, ~~2020~~2021

($ in thousands)

									Weighted										Weighted
						Weighted			Average							Weighted			Average
	Debt					Average			Maturities		Debt					Average			Maturities
	Balances		% of Total			Rates			(years)		Balances		% of Total			Rates			(years)
Secured	$	2,340,757		27.8	%		3.51	%		7.0	$	2,280,251		27.6	%		3.17	%		5.9
Unsecured		6,081,102		72.2	%		3.85	%		10.3		5,970,441		72.4	%		3.41	%		9.4
Total	$	8,421,859		100.0	%		3.77	%		9.4	$	8,250,692		100.0	%		3.34	%		8.4
Fixed Rate Debt:
Secured – Conventional	$	1,972,862		23.4	%		3.94	%		5.4	$	1,898,790		23.0	%		3.68	%		4.4
Unsecured – Public		6,081,102		72.2	%		4.06	%		10.3		5,338,671		64.7	%		3.75	%		10.5
Fixed Rate Debt		8,053,964		95.6	%		4.03	%		9.1		7,237,461		87.7	%		3.73	%		8.9
Floating Rate Debt:
Secured – Conventional		7,315		0.1	%		3.35	%		2.0		50,873		0.6	%		2.36	%		1.0
Secured – Tax Exempt		360,580		4.3	%		1.49	%		15.5		330,588		4.0	%		0.46	%		15.1
Unsecured – Revolving Credit Facility		—		—			1.47	%		4.3		—		—			—			3.3
Unsecured – Commercial Paper Program		—		—			1.81	%		—		631,770		7.7	%		0.29	%		—
Floating Rate Debt		367,895		4.4	%		1.68	%		15.2		1,013,231		12.3	%		0.44	%		5.2
Total	$	8,421,859		100.0	%		3.77	%		9.4	$	8,250,692		100.0	%		3.34	%		8.4

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Debt Maturity Schedule as of June 30, ~~2020~~2021

($ in thousands)

Year	Fixed Rate				Floating Rate			Total			% of Total			Weighted Average Coupons on Fixed Rate Debt			Weighted Average Coupons on Total Debt			Fixed Rate			Floating Rate				Total			% of Total			Weighted Average Coupons on Fixed Rate Debt			Weighted Average Coupons on Total Debt
2020	$	23,669			$	—		$	23,669			0.3	%		4.75	%		4.75	%
2021		834,904		(1)		—			834,904			9.8	%		4.63	%		4.63	%	$	3,752		$	632,000		(1)	$	635,752			7.6	%		3.27	%		0.29	%
2022		264,185				7,796			271,981			3.2	%		3.25	%		3.22	%		264,185			51,113				315,298			3.8	%		3.25	%		3.09	%
2023		1,325,588				3,500			1,329,088			15.6	%		3.74	%		3.73	%		1,325,588			3,500				1,329,088			16.0	%		3.74	%		3.73	%
2024		—				6,100			6,100			0.1	%	N/A				0.15	%		—			6,100				6,100			0.1	%	N/A				0.05	%
2025		450,000				8,200			458,200			5.4	%		3.38	%		3.32	%		450,000			8,200				458,200			5.5	%		3.38	%		3.32	%
2026		592,025				9,000			601,025			7.0	%		3.58	%		3.53	%		592,025			9,000				601,025			7.2	%		3.58	%		3.53	%
2027		400,000				9,800			409,800			4.8	%		3.25	%		3.18	%		400,000			9,800				409,800			4.9	%		3.25	%		3.17	%
2028		900,000				42,380			942,380			11.1	%		3.79	%		3.62	%		900,000			10,700				910,700			10.9	%		3.79	%		3.74	%
2029		888,120				11,500			899,620			10.6	%		3.30	%		3.26	%		888,120			11,500				899,620			10.8	%		3.30	%		3.26	%
2030+		2,445,850				288,135			2,733,985			32.1	%		3.56	%		3.21	%
2030																					1,095,000			12,600				1,107,600			13.3	%		2.55	%		2.52	%
2031+																					1,379,350			275,535				1,654,885			19.9	%		4.37	%		3.66	%
Subtotal		8,124,341				386,411			8,510,752			100.0	%		3.67	%		3.51	%		7,298,020			1,030,048				8,328,068			100.0	%		3.55	%		3.15	%
Deferred Financing Costs and Unamortized (Discount)		(70,377	)			(18,516	)		(88,893	)	N/A			N/A			N/A				(60,559	)		(16,817	)			(77,376	)	N/A			N/A			N/A
Total	$	8,053,964			$	367,895		$	8,421,859			100.0	%		3.67	%		3.51	%	$	7,237,461		$	1,013,231			$	8,250,692			100.0	%		3.55	%		3.15	%

(1)	~~$750.0 million of 4.625% unsecured notes will mature~~Represents principal outstanding on ~~December 15, 2021.~~the Company’s commercial paper program.

See Note 9 in the Notes to Consolidated Financial Statements for additional discussion of debt at June 30, ~~2020.~~2021.

ERPOP’s long-term senior debt ratings and short-term commercial paper ratings, as well as EQR’s long-term preferred equity ratings, have ~~recently~~ been reaffirmed during the COVID-19 pandemic by all three rating agencies listed below and all continue to maintain a stable outlook. As of July ~~28, 2020,~~23, 2021, the ratings are as follows:

	Standard & Poor’s	Moody’s	Fitch
ERPOP’s long-term senior debt rating	A-	A3	A
ERPOP’s short-term commercial paper rating	A-2	P-2	F-1
EQR’s long-term preferred equity rating	BBB	Baa1	BBB+

See Note 14 in the Notes to Consolidated Financial Statements for discussion of the events, if any, which occurred subsequent to June 30, ~~2020.~~2021.

Debt Covenants

The Company’s 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 note payable or the credit agreement for our line of credit. The Company was in compliance with its unsecured debt covenants for all periods presented. The following table presents the Company’s selected unsecured public debt covenants as of June 30, ~~2020, March 31, 2020~~2021 and December 31, ~~2019~~2020:

	June 30, 2020	March 31, 2020	December 31, 2019	June 30, 2021		December 31, 2020
Debt to Adjusted Total Assets (not to exceed 60%)	31.8%	32.5%	33.8%	30.7%		30.5%
Secured Debt to Adjusted Total Assets (not to exceed 40%)	9.7%	8.2%	8.2%	9.3%		9.6%
Consolidated Income Available for Debt Service to Maximum Annual Service Charges (must be at least 1.5 to 1)	4.96	5.09	5.07		5.10	5.42
Total Unencumbered Assets to Unsecured Debt (must be at least 125%)	439.5%	408.3%	386.1%	442.1%		458.3%

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Note: These selected covenants represent the most restrictive financial covenants relating to ERPOP’s outstanding public debt securities and are defined in the indenture relating to such securities. The Company maintains substantial additional borrowing capacity and, as reflected by the above selected covenant information, believes it could currently incur substantial additional debt before it would breach any of its debt covenants.

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Capitalization of Fixed Assets and Improvements to Real Estate

The Company’s and the Operating Partnership’s capital expenditures policy has not changed from the information included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020.

For the six months ended June 30, ~~2020,~~2021, our actual capital expenditures to real estate included the following (amounts in thousands except for apartment unit and per apartment unit amounts):

Capital Expenditures to Real Estate

For the Six Months Ended June 30, ~~2020~~2021

	Same Store Properties (4)		Non-Same Store Properties/Other (5)		Total		Same Store Avg. Per Apartment Unit		Same Store Properties (4)		Non-Same Store Properties/Other (5)		Total		Same Store Avg. Per Apartment Unit
Total Apartment Units		74,264		4,146		78,410				76,335		1,772		78,107

Building Improvements (1)	$	29,657	$	1,387	$	31,044	$	399	$	38,991	$	148	$	39,139	$	511
Renovation Expenditures (2)		15,022		6		15,028		202		11,880		—		11,880		156
Replacements (3)		14,955		238		15,193		202		15,072		352		15,424		197
Total Capital Expenditures to Real Estate	$	59,634	$	1,631	$	61,265	$	803	$	65,943	$	500	$	66,443	$	864

(1)	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.

(2)	Renovation Expenditures – Apartment unit renovation costs (primarily kitchens and baths) designed to reposition these units for higher rental levels in their respective markets. Amounts for ~~658~~549 same store apartment units approximated ~~$22,830~~$21,639 per apartment unit renovated.

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

(4)	Same Store Properties – Primarily includes all properties acquired or completed that are stabilized prior to January 1, ~~2019,~~2020, less properties subsequently sold. ~~Properties are included in Same Store when they are stabilized for all of the current and comparable periods presented.~~

(5)	Non-Same Store Properties/Other – Primarily includes all properties acquired during ~~2019~~2020 and ~~2020,~~2021, plus any properties in lease-up and not stabilized as of January 1, ~~2019.~~2020. Also includes capital expenditures for properties sold.

The ~~COVID-19 pandemic has led us to temporarily slow our~~Company estimates that during 2021 it will spend approximately $1,950 per same store apartment unit or $150.0 million of total capital expenditures ~~including our~~to real estate for same store properties. Included in these total expected expenditures are approximately $25.0 million for apartment unit renovation ~~activities,~~expenditures on approximately 1,250 same store apartment units at an average cost of approximately $20,000 per apartment unit renovated. The anticipated total capital expenditures to ~~those deemed essential. Governmental movement restrictions, social distancing requirements,~~real estate for same store properties represent a higher absolute and ~~in some cases, difficulty in procuring materials make continuing these activities~~per unit dollar amount as compared to 2020 but a lower absolute and per unit dollar amount as compared to 2019, as the Company anticipates slowly returning its capital expenditure activity to more ~~difficult.~~normalized pre-COVID-19 levels.

During the six months ended June 30, 2020, the Company’s total non-real estate capital additions, such as computer software, computer equipment, and furniture and fixtures and leasehold improvements to the Company’s property management offices and its corporate offices, were approximately $15.5 million. The Company expects to fund approximately $6.2 million in total non-real estate capital additions for the remainder of 2020. These year-to-date and anticipated fundings are significantly higher than 2019 and are primarily driven by corporate office renovations during 2020.

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Derivative Instruments

The Company has a policy of only entering into derivative contracts with major financial institutions based upon their credit ratings and other factors. When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, the Company has not sustained a material loss from these instruments nor does it anticipate any material adverse effect on its net income or financial position in the future from the use of derivatives it currently has in place.

The Company has no derivative instruments outstanding at June 30, 2021. See Note 10 in the Notes to Consolidated Financial Statements for additional discussion of the impact of derivative instruments atduring the periods ended June 30, 2021 and 2020.

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Definitions

The definition of certain terms described above or below are as follows:

•

Acquisition 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.

•

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

•

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 $100-$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.

•

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

•

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 and without concessions or discounts being applied.~~term.

•

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

•

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.

•

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 and without concessions or discounts being applied.~~term.

•

Residential – Consists of multifamily apartment revenues and expenses.


~~Table~~•	Same Store Residential Revenues – Revenues from our same store properties presented on a GAAP basis which reflects the impact of ~~Contents~~Leasing Concessions on a straight-line basis.

•

% of Stabilized Budgeted NOI – Represents original budgeted ~~2020~~2021 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.

•

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.

•

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

•

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

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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.

•

Weighted Average Coupons – Contractual interest rate for each debt instrument weighted by principal balances as of June 30, ~~2020.~~2021. 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, ~~2020~~2021 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.

Off-Balance Sheet Arrangements and Contractual Obligations

The Company has various unconsolidated interests in certain joint ventures. The Company does not believe that these unconsolidated investments have a materially different impact on its liquidity, cash flows, capital resources, credit or market risk than its consolidated operating and/or other activities. See also Note 6 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s investments in partially owned entities. See also Note 12 in the Notes to Consolidated Financial Statements for discussion regarding the Company’s development projects.

The Company’s contractual obligations for the next five years and thereafter have not changed materially from the amounts and disclosures included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. See the updated debt maturity schedule included in Liquidity and Capital Resources for further discussion.

Critical Accounting Policies and Estimates

The Company’s and the Operating Partnership’s critical accounting policies and estimates have not changed from the information included in the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, ~~2019~~.2020.

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Funds From Operations and Normalized Funds From Operations

The following is the Company’s and the Operating Partnership’s reconciliation of net income to FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units for the six months and quarters ended June 30, ~~2020~~2021 and ~~2019:~~2020:

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Funds From Operations and Normalized Funds From Operations

(Amounts in thousands)

	Six Months Ended June 30,						Quarter Ended June 30,						Six Months Ended June 30,						Quarter Ended June 30,
	2020			2019			2020			2019			2021			2020			2021			2020
Net income	$	604,152		$	430,556		$	271,481		$	321,299		$	388,404		$	604,152		$	328,040		$	271,481
Net (income) loss attributable to Noncontrolling Interests – Partially Owned Properties		(13,410	)		(1,620	)		(880	)		(821	)		(1,423	)		(13,410	)		(741	)		(880	)
Preferred/preference distributions		(1,545	)		(1,545	)		(772	)		(772	)		(1,545	)		(1,545	)		(772	)		(772	)
Net income available to Common Shares and Units / Units		589,197			427,391			269,829			319,706			385,436			589,197			326,527			269,829
Adjustments:
Depreciation		418,398			404,723			205,976			200,508			400,635			418,398			200,673			205,976
Depreciation – Non-real estate additions		(2,307	)		(2,303	)		(1,020	)		(1,121	)		(2,176	)		(2,307	)		(1,076	)		(1,020	)
Depreciation – Partially Owned Properties		(1,686	)		(1,802	)		(830	)		(899	)		(1,682	)		(1,686	)		(854	)		(830	)
Depreciation – Unconsolidated Properties		1,224			1,772			611			850			1,233			1,224			616			611
Net (gain) loss on sales of unconsolidated entities - operating assets		—			(69,522	)		—			(69,522	)		(4	)		—			—			—
Net (gain) loss on sales of real estate properties		(352,243	)		(138,835	)		(144,266	)		(138,856	)		(223,695	)		(352,243	)		(223,738	)		(144,266	)
Noncontrolling Interests share of gain (loss) on sales of real estate properties		11,655			—			—			—			—			11,655			—			—
FFO available to Common Shares and Units / Units (1) (3) (4)		664,238			621,424			330,300			310,666			559,747			664,238			302,148			330,300
Adjustments:
Impairment – non-operating assets		—			—			—			—			—			—			—			—
Write-off of pursuit costs		3,278			2,987			1,651			1,539			2,647			3,278			1,316			1,651
Debt extinguishment and preferred share redemption (gains) losses		32			16,647			32			16,647			264			32			—			32
Non-operating asset (gains) losses		670			252			229			23			(23,308	)		670			(24,162	)		229
Other miscellaneous items		(2,310	)		4,418			(1,392	)		2,843			3,341			(2,310	)		1,099			(1,392	)
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)	$	665,908		$	645,728		$	330,820		$	331,718		$	542,691		$	665,908		$	280,401		$	330,820

FFO (1) (3)	$	665,783		$	622,969		$	331,072		$	311,438		$	561,292		$	665,783		$	302,920		$	331,072
Preferred/preference distributions		(1,545	)		(1,545	)		(772	)		(772	)		(1,545	)		(1,545	)		(772	)		(772	)
FFO available to Common Shares and Units / Units (1) (3) (4)	$	664,238		$	621,424		$	330,300		$	310,666		$	559,747		$	664,238		$	302,148		$	330,300

Normalized FFO (2) (3)	$	667,453		$	647,273		$	331,592		$	332,490		$	544,236		$	667,453		$	281,173		$	331,592
Preferred/preference distributions		(1,545	)		(1,545	)		(772	)		(772	)		(1,545	)		(1,545	)		(772	)		(772	)
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)	$	665,908		$	645,728		$	330,820		$	331,718		$	542,691		$	665,908		$	280,401		$	330,820

(1)

The National Association of Real Estate Investment Trusts (“Nareit”) defines funds from operations (“FFO”) (December 2018 White Paper) as net income (computed in accordance with accounting principles generally accepted in the United States (“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 funds from operations on the same basis.

(2)	Normalized funds from operations (“Normalized FFO”) begins with FFO and excludes:

•

the impact of any expenses relating to non-operating 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.

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(3)

The Company believes that FFO and FFO available to Common Shares and Units / 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 / Units can help compare the operating performance of a company’s real estate between periods or as compared to different companies. The Company also believes that Normalized FFO and Normalized FFO available to Common Shares and Units / 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 / Units, Normalized FFO and Normalized FFO

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available to Common Shares and Units / Units do not represent net income, net income available to Common Shares / Units or net cash flows from operating activities in accordance with GAAP. Therefore, FFO, FFO available to Common Shares and Units / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / Units should not be exclusively considered as alternatives to net income, net income available to Common Shares / Units 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 / Units, Normalized FFO and Normalized FFO available to Common Shares and Units / 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.

(4)

FFO available to Common Shares and Units / Units and Normalized FFO available to Common Shares and Units / Units are calculated on a basis consistent with net income available to Common Shares / Units and reflects adjustments to net income for preferred distributions and premiums on redemption of preferred shares/preference units 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company’s and the Operating Partnership’s market risk has not changed materially from the amounts and information reported in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, to the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. See Note 10 in the Notes to Consolidated Financial Statements for additional discussion of ~~derivative and other~~ fair value ~~instruments.~~measurements.

Item 4. Controls and Procedures

Equity Residential

(a)

Evaluation of Disclosure Controls and Procedures:

Effective as of June 30, ~~2020,~~2021, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in its Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

(b)

Changes in Internal Control over Financial Reporting:

There were no changes to the internal control over financial reporting of the Company identified in connection with the Company’s evaluation referred to above that occurred during the second quarter of ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ERP Operating Limited Partnership

(a)

Evaluation of Disclosure Controls and Procedures:

Effective as of June 30, ~~2020,~~2021, the Operating Partnership carried out an evaluation, under the supervision and with the participation of the Operating Partnership’s management, including the Chief Executive Officer and Chief Financial Officer of EQR, of the effectiveness of the Operating Partnership’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures are effective to ensure that information required to be disclosed by the Operating Partnership in its Exchange Act filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

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(b)

Changes in Internal Control over Financial Reporting:

There were no changes to the internal control over financial reporting of the Operating Partnership identified in connection with the Operating Partnership’s evaluation referred to above that occurred during the second quarter of ~~2020~~2021 that have materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

As of June 30, ~~2020,~~2021, the Company does not believe there is any litigation pending or threatened against it that, individually or in the aggregate, may reasonably be expected to have a material adverse effect on the Company.

Item 1A. Risk Factors

~~The Company’s~~There have been no material changes to the risk ~~factor disclosures~~factors that were discussed in Part I, Item 1A of the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, ~~2019 are hereby supplemented as follows:~~

~~Risk of Pandemics or Other Health Crisis.~~

A pandemic, epidemic or other health crisis, similar to the recent outbreak of COVID-19, affecting areas where our properties, corporate/regional offices or major service providers are located could have an adverse effect on our business, results of operations, cash flows and financial condition.

~~The ongoing COVID-19 pandemic and measures intended to prevent its spread could have a material adverse effect on our business, results of operations, cash flows and financial condition.~~

In December 2019, COVID-19 was first reported in Wuhan, China, and in March 2020, the World Health Organization declared COVID-19 a pandemic. The outbreak has led governments and other authorities around the world, including federal, state and local authorities in the United States, to impose measures intended to control its spread, including restrictions on movement and business operations such as travel bans, border closings, business closures, quarantines, social distancing and shelter-in-place orders. The COVID-19 pandemic has also caused, and is likely to continue to cause, severe economic, market and other disruptions worldwide. We cannot assure you conditions will not continue to deteriorate as a result of the pandemic.

The impact of the COVID-19 pandemic and measures to prevent its spread could materially negatively impact our business, results of operations, financial condition and liquidity in a number of ways, including:

•

~~A decrease in our rental revenues or increase in related reserves and write-offs as a potential result of:~~

•

O~~ur residents’ and tenants’ ability to pay their rent on time or at all and the demand for multifamily properties within our markets;~~

•

O~~ur geographic concentrations, especially in our dense urban submarkets~~which often makes social distancing more difficult, may experience longer periods of economic disruption due to delays in business re-openings and/or required re-closures, as a result of which we may be more susceptible to the impact of COVID-19;

•

Changes in resident preferences, including changes due to increased employer flexibility to work from home, making them less likely to want to live in dense urban centers where we own many of our properties or to want to live in denser forms of multifamily housing like the high-rise or mid-rise housing the Company owns;

•

T~~he concessions made, and those that continue to be made, to residents’ rent obligations, which may not be on terms as favorable to us as those currently in place;~~

•

T~~he deterioration of global economic conditions as a result of the pandemic may ultimately decrease occupancy levels and pricing across our portfolio as residents reduce or defer their spending;~~

•

~~Resident or tenant~~ ~~nonpayment, default or bankruptcy, as a result of which we may incur costs in protecting our investment and releasing our property;~~

•

T~~he risk that local and national authorities may expand or extend certain measures imposing restrictions on our ability to enforce residents’ or tenants’ contractual rental obligationsand limiting our ability to raise rents;~~

•

T~~he risk that local and national authorities may not extendor may reduce the government stimulus and relief~~

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~~programs which may be providing benefits to our residents (or employers of our residents) and tenants;~~

•

Restrictions inhibiting our employees’ ability to meet with existing and potential residents has disrupted and could in the future further disrupt our ability to lease apartments which could adversely impact our rental rate and occupancy levels; and

•

Ground floor retail and parking garage operations in our apartment buildings are vulnerable to the effects from the COVID-19 pandemic, which we expect may adversely impact our retail tenants' and parking garage operations and, in turn, could result in an increase in tenant/garage operator defaults, rent deferrals/abatements and rent reductions.

•

The risk that our access to capital at attractive terms may be diminished due to, among other factors: (i) potential disruptions in the long-term debt and commercial paper markets; (ii) the risk that a prolonged economic slowdown or recession could negatively impact our lending counterparties; and (iii) reductions in the Company’s credit ratings as a result of a protracted increase in unemployment or reduced income of our residents and tenants;

•

~~The risk that we may lose our ability to borrow under our commercial paper program if our credit ratings were to fall below investment grade;~~

•

The risk of a prolonged outbreak and/or second wave of an outbreak causing long-term damage to economic conditions, which in turn could cause material declines in the fair value of our assets, leading to asset impairment charges;

•

A general decline in the real estate market or demand for real estate transactions could hinder our ability to acquire or dispose of properties, including through our joint ventures. Also, a possible increase in distressed sales of real estate due to the impact of COVID-19 could decrease real estate values in our markets and limit our ability to sell our properties at advantageous prices or at all;

•

The risk of delays in our development and renovation projects due to construction moratoriums (such as what occurred with our Boston development project), governmental movement restrictions, social distancing requirements, the closure of many permitting and inspection agencies and disruptions in the supply of construction materials due to problems in the supply chain or otherwise;

•

~~A possible further decline in the price of our common shares due to a prolonged economic recession or other impacts described herein;~~

•

~~The risk of a prolonged outbreak which could cause an adverse impact on our future financial results, cash flows and financial condition and therefore our ability to pay dividends;~~

•

~~Increased risks of potential cyber attacks due to an increased reliance on remote working and other interactions with our current and prospective residents; and~~

•

Potential inability to maintain adequate staffing at our properties and corporate/regional offices due to shelter-in-place orders, an outbreak at one or more of our properties or corporate/regional offices and/or the continued duration or expansion of the pandemic.

The extent of the COVID-19 pandemic’s effect on our operational and financial performance will depend on future developments including the duration, spread and intensity of the outbreak, all of which are uncertain and difficult to predict. Due to the speed with which the situation is continuing to develop, we are not able at this time to estimate the effect of these factors on our business, but the adverse impact on our business, results of operations, cash flows and financial condition could be material.2020.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~(a) Unregistered Common Shares Issued in the Quarter Ended June 30, 2020 - Equity Residential~~

During the quarter ended June 30, ~~2020,~~2021, EQR issued ~~55,418~~1,084,023 Common Shares in exchange for ~~55,418~~1,084,023 OP Units held by various limited partners of ERPOP. OP Units are generally exchangeable into Common Shares on a one-for-one basis or, at the optionofERPOP,thecashequivalentthereof,atanytimeoneyearafterthedateofissuance. Theseshareswereeitherregistered undertheSecuritiesActof1933,asamended~~(the“Securities~~ (the “Securities Act”),orissuedinrelianceonanexemptionfromregistrationunder Section 4(a)(2) of the Securities Act and the rules and regulations promulgated thereunder, as these were transactions by an issuer not involving a public offering. In light of the manner of the sale and information obtained by EQR from the limited partners in connection with these transactions, EQR believes it may rely on theseexemptions.

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Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits – See the Exhibit Index.

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EXHIBIT INDEX

The exhibits listed below are filed as part of this report. References to exhibits or other filings under the caption “Location” indicate that the exhibit or other filing has been filed, that the indexed exhibit and the exhibit referred to are the same and that the exhibit referred to is incorporated by reference. The Commission file numbers for our Exchange Act filings referenced below are 1-12252 (Equity Residential) and 0-24920 (ERP Operating Limited Partnership).

Exhibit		Description	Location
~~3.1~~		~~Second Amendment to Eighth Amended and Restated Bylaws of Equity Residential, effective as of May 4, 2020.~~	~~Included as Exhibit 3.1 to Equity Residential's Form 8-K dated May 4, 2020, filed on May 8, 2020.~~

~~10.1~~	*	~~Amendment to the Equity Residential Supplemental Executive Retirement Plan, effective as of June 1, 2020.~~	~~Attached herein.~~

31.1		Equity Residential – Certification of Mark J. Parrell, Chief Executive Officer.	Attached herein.

31.2		Equity Residential – Certification of Robert A. Garechana, Chief Financial Officer.	Attached herein.

31.3		ERP Operating Limited Partnership – Certification of Mark J. Parrell, Chief Executive Officer of Registrant’s General Partner.	Attached herein.

31.4		ERP Operating Limited Partnership – Certification of Robert A. Garechana, Chief Financial Officer of Registrant’s General Partner.	Attached herein.

32.1		Equity Residential – Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Mark J. Parrell, Chief Executive Officer of the Company.	Attached herein.

32.2		Equity Residential – Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Robert A. Garechana, Chief Financial Officer of the Company.	Attached herein.

32.3		ERP Operating Limited Partnership – Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Mark J. Parrell, Chief Executive Officer of Registrant’s General Partner.	Attached herein.

32.4		ERP Operating Limited Partnership – Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Robert A. Garechana, Chief Financial Officer of Registrant’s General Partner.	Attached herein.

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

*Management contracts and compensatory plans or arrangements filed as exhibits to this report are identified by an asterisk.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		EQUITY RESIDENTIAL

Date:	~~August 3, 2020~~July 30, 2021	By:	/s/ Robert A. Garechana
			Robert A. Garechana
			Executive Vice President and Chief Financial Officer
			(Principal Financial Officer)

Date:	~~August 3, 2020~~July 30, 2021	By:	/s/ Ian S. Kaufman
			Ian S. Kaufman
			Senior Vice President and Chief Accounting Officer
			(Principal Accounting Officer)

		ERP OPERATING LIMITED PARTNERSHIP BY: EQUITY RESIDENTIAL ITS GENERAL PARTNER

Date:	~~August 3, 2020~~July 30, 2021	By:	/s/ Robert A. Garechana
			Robert A. Garechana
			Executive Vice President and Chief Financial Officer
			(Principal Financial Officer)

Date:	~~August 3, 2020~~July 30, 2021	By:	/s/ Ian S. Kaufman
			Ian S. Kaufman
			Senior Vice President and Chief Accounting Officer
			(Principal Accounting Officer)

Description		Amount
Write-offs of unamortized deferred financing costs		$	32

June 30, 2019 Type of Fair Value Hedge	Location of Gain/(Loss) Recognized in Income on Derivative	Amount of Gain/(Loss) Recognized in Income on Derivative		Hedged Item	Income Statement Location of Hedged Item Gain/(Loss)	Amount of Gain/(Loss) Recognized in Income on Hedged Item
Derivatives designated as hedging instruments:
Interest Rate Contracts:
Interest Rate Swaps	Interest expense	$	2,253	Fixed rate debt	Interest expense	$	(2,253	)
Total		$	2,253			$	(2,253	)

	July 2020			Second Quarter 2020
New Lease Change		(8.3	%)		(7.0	%)
Renewal Rate Achieved		(0.9	%)		0.7	%
Blended Rate (1)		(4.5	%)		(2.7	%)
Physical Occupancy		95.0	%		94.9	%

	July 28, 2020
Unsecured revolving credit facility commitment	$	2,500,000
Commercial paper balance outstanding		—
Unsecured revolving credit facility balance outstanding		—
Other restricted amounts		(100,949	)
Unsecured revolving credit facility availability	$	2,399,051

Large accelerated filer

Accelerated filer

Non-accelerated filer

~~Small~~Smaller reporting company

Emerging growth company