Equity Residential (EQR) 10-Q 2024 Q3 Quarterly report

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 September 30, 2024

OR

☐ 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:

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

l

ERP Operating Limited Partnership:

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐

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 October 28, 2024 was 379,429,476.

EXPLANATORY NOTE

This report combines the reports on Form 10-Q for the quarterly period ended September 30, 2024 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 September 30, 2024 owned an approximate 97.0% ownership interest in, ERPOP. The remaining 3.0% 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.

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.

TABLE OF CONTENTS

	PAGE
PART I.
Item 1. Financial Statements of Equity Residential:
Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	2
Consolidated Statements of Operations and Comprehensive Income for the nine months and quarters ended September 30, 2024 and 2023	3
Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	5
Consolidated Statements of Changes in Equity for the nine months and quarters ended September 30, 2024 and 2023	9
Financial Statements of ERP Operating Limited Partnership:
Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	11
Consolidated Statements of Operations and Comprehensive Income for the nine months and quarters ended September 30, 2024 and 2023	12
Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023	14
Consolidated Statements of Changes in Capital for the nine months and quarters ended September 30, 2024 and 2023	18
Notes to Consolidated Financial Statements of Equity Residential and ERP Operating Limited Partnership	20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	38
Item 3. Quantitative and Qualitative Disclosures about Market Risk	48
Item 4. Controls and Procedures	48
PART II.
Item 1. Legal Proceedings	49
Item 1A. Risk Factors	49
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3. Defaults Upon Senior Securities	49
Item 4. Mine Safety Disclosures	49
Item 5. Other Information	49
Item 6. Exhibits	49

1

EQUITY RESIDENTIAL

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands except for share amounts)

(Unaudited)

	September 30,			December 31,
	2024			2023
ASSETS
Land	$	5,675,037		$	5,581,876
Depreciable property		24,148,043			22,938,426
Projects under development		222,055			78,036
Land held for development		65,113			114,300
Investment in real estate		30,110,248			28,712,638
Accumulated depreciation		(10,386,783	)		(9,810,337	)
Investment in real estate, net		19,723,465			18,902,301
Investments in unconsolidated entities		359,810			282,049
Cash and cash equivalents		28,610			50,743
Restricted deposits		97,949			89,252
Right-of-use assets		458,673			457,266
Other assets		257,314			252,953
Total assets	$	20,925,821		$	20,034,564
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	1,633,414		$	1,632,902
Notes, net		5,945,670			5,348,417
Line of credit and commercial paper		786,561			409,131
Accounts payable and accrued expenses		165,787			87,377
Accrued interest payable		50,633			65,716
Lease liabilities		306,119			311,640
Other liabilities		294,543			272,596
Security deposits		74,350			69,178
Distributions payable		263,425			259,231
Total liabilities		9,520,502			8,456,188
Commitments and contingencies
Redeemable Noncontrolling Interests – Operating Partnership		351,803			289,248
Equity:
Shareholders' equity:
Preferred Shares of beneficial interest, $0.01 par value;    100,000,000 shares authorized; 343,100 shares issued and    outstanding as of September 30, 2024 and 745,600 shares issued    and outstanding as of December 31, 2023		17,155			37,280
Common Shares of beneficial interest, $0.01 par value;    1,000,000,000 shares authorized; 379,354,738 shares issued    and outstanding as of September 30, 2024 and 379,291,417    shares issued and outstanding as of December 31, 2023		3,794			3,793
Paid in capital		9,584,539			9,601,866
Retained earnings		1,244,953			1,437,185
Accumulated other comprehensive income (loss)		3,534			5,704
Total shareholders’ equity		10,853,975			11,085,828
Noncontrolling Interests:
Operating Partnership		199,206			202,306
Partially Owned Properties		335			994
Total Noncontrolling Interests		199,541			203,300
Total equity		11,053,516			11,289,128
Total liabilities and equity	$	20,925,821		$	20,034,564

See accompanying notes

2

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands except per share data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2024			2023			2024			2023
REVENUES
Rental income	$	2,213,329		$	2,146,464		$	748,348		$	724,067
EXPENSES
Property and maintenance		396,349			391,437			135,221			129,087
Real estate taxes and insurance		320,452			312,607			105,954			102,858
Property management		100,381			90,314			31,412			28,169
General and administrative		48,902			49,135			14,551			14,094
Depreciation		688,041			661,921			237,948			224,736
Total expenses		1,554,125			1,505,414			525,086			498,944
Net gain (loss) on sales of real estate properties		227,829			127,034			(165	)		26,912
Interest and other income		26,501			11,296			15,844			7,627
Other expenses		(59,094	)		(20,517	)		(13,971	)		(4,958	)
Interest:
Expense incurred, net		(205,762	)		(200,882	)		(72,722	)		(68,891	)
Amortization of deferred financing costs		(5,784	)		(7,023	)		(1,948	)		(3,027	)
Income before income and other taxes, income (loss) from    investments in unconsolidated entities and net gain (loss)    on sales of land parcels		642,894			550,958			150,300			182,786
Income and other tax (expense) benefit		(925	)		(892	)		(290	)		(258	)
Income (loss) from investments in unconsolidated entities		(4,865	)		(3,847	)		(1,493	)		(1,242	)
Net income		637,104			546,219			148,517			181,286
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership		(17,290	)		(17,174	)		(4,012	)		(5,561	)
Partially Owned Properties		(3,098	)		(5,299	)		(1,059	)		(3,217	)
Net income attributable to controlling interests		616,716			523,746			143,446			172,508
Preferred distributions		(1,258	)		(2,318	)		(356	)		(773	)
Premium on redemption of Preferred Shares		(1,444	)		—			—			—
Net income available to Common Shares	$	614,014		$	521,428		$	143,090		$	171,735
Earnings per share – basic:
Net income available to Common Shares	$	1.62		$	1.38		$	0.38		$	0.45
Weighted average Common Shares outstanding		378,718			378,614			378,756			378,853
Earnings per share – diluted:
Net income available to Common Shares	$	1.62		$	1.38		$	0.38		$	0.45
Weighted average Common Shares outstanding		390,688			391,135			391,026			391,351

See accompanying notes

3

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)

(Amounts in thousands except per share data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2024			2023			2024			2023
Comprehensive income:
Net income	$	637,104		$	546,219		$	148,517		$	181,286
Other comprehensive income (loss):
Other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the period		(3,989	)		4,514			(3,989	)		460
Losses reclassified into earnings from other comprehensive    income		1,819			3,132			609			931
Other comprehensive income (loss)		(2,170	)		7,646			(3,380	)		1,391
Comprehensive income		634,934			553,865			145,137			182,677
Comprehensive (income) attributable to Noncontrolling Interests		(20,330	)		(22,712	)		(4,980	)		(8,822	)
Comprehensive income attributable to controlling interests	$	614,604		$	531,153		$	140,157		$	173,855

See accompanying notes

4

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	637,104		$	546,219
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		688,041			661,921
Amortization of deferred financing costs		5,784			7,023
Amortization of discounts and premiums on debt		3,823			2,815
Amortization of deferred settlements on derivative instruments		1,811			3,123
Amortization of right-of-use assets		11,320			9,572
Write-off of pursuit costs		1,905			2,739
(Income) loss from investments in unconsolidated entities		4,865			3,847
Distributions from unconsolidated entities – return on capital		446			436
Net (gain) loss on sales of real estate properties		(227,829	)		(127,034	)
Realized (gain) loss on investment securities		1,316			(1,511	)
Unrealized (gain) loss on investment securities		(19,880	)		(4,461	)
Compensation paid with Company Common Shares		26,781			26,948
Changes in assets and liabilities:
(Increase) decrease in other assets		5,551			11,887
Increase (decrease) in accounts payable and accrued expenses		71,360			71,334
Increase (decrease) in accrued interest payable		(15,083	)		(18,791	)
Increase (decrease) in lease liabilities		(3,363	)		(1,077	)
Increase (decrease) in other liabilities		20,258			(7,024	)
Increase (decrease) in security deposits		5,172			558
Net cash provided by operating activities		1,219,382			1,188,524
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate – acquisitions		(1,320,592	)		(324,497	)
Investment in real estate – development/other		(90,718	)		(60,179	)
Capital expenditures to real estate		(230,107	)		(229,763	)
Non-real estate capital additions		(1,572	)		(1,457	)
Interest capitalized for real estate and unconsolidated entities under development		(10,697	)		(9,579	)
Proceeds from disposition of real estate, net		360,850			191,718
Investments in unconsolidated entities – acquisitions		(31,286	)		(989	)
Investments in unconsolidated entities – development/other		(48,360	)		(34,076	)
Distributions from unconsolidated entities – return of capital		1,409			15
Purchase of investment securities and other investments		—			(2,500	)
Proceeds from sale of investment securities		7,457			2,952
Net cash provided by (used for) investing activities		(1,363,616	)		(468,355	)

See accompanying notes

5

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2024			2023
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt financing costs	$	(5,307	)	$	(4,106	)
Mortgage notes payable, net:
Proceeds		—			572,896
Lump sum payoffs		—			(932,598	)
Scheduled principal repayments		(2,400	)		(554	)
Notes, net:
Proceeds		597,954			—
Line of credit and commercial paper:
Line of credit proceeds		198,000			—
Line of credit repayments		(198,000	)		—
Commercial paper proceeds		8,610,430			4,393,568
Commercial paper repayments		(8,233,000	)		(4,025,887	)
Proceeds from (payments on) settlement of derivative instruments		(3,989	)		25,169
Finance ground lease principal payments		(2,158	)		(1,995	)
Proceeds from Employee Share Purchase Plan (ESPP)		2,830			2,591
Proceeds from exercise of options		17,315			11,474
Common Shares repurchased and retired		(38,474	)		—
Redemption of Preferred Shares		(20,125	)		—
Premium on redemption of Preferred Shares		(1,444	)		—
Other financing activities, net		(52	)		(37	)
Acquisition of Noncontrolling Interests – Partially Owned Properties		—			(3,737	)
Contributions – Noncontrolling Interests – Partially Owned Properties		458			9
Contributions – Noncontrolling Interests – Operating Partnership		2			1
Distributions:
Common Shares		(762,990	)		(738,584	)
Preferred Shares		(2,031	)		(2,319	)
Noncontrolling Interests – Operating Partnership		(23,058	)		(22,969	)
Noncontrolling Interests – Partially Owned Properties		(3,163	)		(3,536	)
Net cash provided by (used for) financing activities		130,798			(730,614	)
Net increase (decrease) in cash and cash equivalents and restricted deposits		(13,436	)		(10,445	)
Cash and cash equivalents and restricted deposits, beginning of period		139,995			137,172
Cash and cash equivalents and restricted deposits, end of period	$	126,559		$	126,727
Cash and cash equivalents and restricted deposits, end of period
Cash and cash equivalents	$	28,610		$	39,250
Restricted deposits		97,949			87,477
Total cash and cash equivalents and restricted deposits, end of period	$	126,559		$	126,727

See accompanying notes

6

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2024			2023
SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized	$	197,587		$	206,080
Net cash paid (received) for income and other taxes	$	1,097		$	1,035
Real estate acquisitions/dispositions/other:
Mortgage loans assumed	$	—		$	42,256
Amortization of deferred financing costs:
Investment in real estate, net	$	—		$	(211	)
Other assets	$	2,089		$	2,089
Mortgage notes payable, net	$	786		$	2,265
Notes, net	$	2,909		$	2,880
Amortization of discounts and premiums on debt:
Mortgage notes payable, net	$	2,126		$	1,129
Notes, net	$	1,697		$	1,686
Amortization of deferred settlements on derivative instruments:
Other liabilities	$	(8	)	$	(9	)
Accumulated other comprehensive income	$	1,819		$	3,132
Write-off of pursuit costs:
Investment in real estate, net	$	401		$	421
Investments in unconsolidated entities	$	1,292		$	1,667
Other assets	$	212		$	651
(Income) loss from investments in unconsolidated entities:
Investments in unconsolidated entities	$	3,927		$	2,909
Other liabilities	$	938		$	938
Realized/unrealized (gain) loss on derivative instruments:
Other assets	$	—		$	(3,749	)
Other liabilities	$	3,989		$	(765	)
Accumulated other comprehensive income	$	(3,989	)	$	4,514
Investment in real estate – acquisitions:
Investment in real estate, net	$	(1,307,865	)	$	(324,497	)
Right-of-use assets	$	(12,727	)	$	—
Interest capitalized for real estate and unconsolidated entities under development:
Investment in real estate, net	$	(4,308	)	$	(3,468	)
Investments in unconsolidated entities	$	(6,389	)	$	(6,111	)
Investments in unconsolidated entities – development/other:
Investments in unconsolidated entities	$	(47,160	)	$	(32,667	)
Other liabilities	$	(1,200	)	$	(1,409	)
Debt financing costs:
Mortgage notes payable, net	$	—		$	(4,106	)
Notes, net	$	(5,307	)	$	—
Proceeds from (payments on) settlement of derivative instruments:
Other assets	$	—		$	25,613
Other liabilities	$	(3,989	)	$	(444	)
Right-of-use assets and lease liabilities initial measurement and reclassifications:
Right-of-use assets	$	—		$	(7,105	)
Lease liabilities	$	—		$	7,105
Non-cash share distribution and other transfers from unconsolidated entities:
Investments in unconsolidated entities	$	—		$	539
Other assets	$	—		$	(539	)

See accompanying notes

7

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2024			2023
Non-cash change in Supplemental Executive Retirement Plan (SERP) balances:
Other assets	$	(1,362	)	$	33,970
Other liabilities	$	1,959		$	(66,048	)
Paid in capital	$	(597	)	$	32,078

See accompanying notes

8

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Amounts in thousands except per share data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2024			2023			2024			2023
SHAREHOLDERS’ EQUITY
PREFERRED SHARES
Balance, beginning of period	$	37,280		$	37,280		$	17,155		$	37,280
Partial redemption of 8.29% Series K Cumulative Redeemable		(20,125	)		—			—			—
Balance, end of period	$	17,155		$	37,280		$	17,155		$	37,280
COMMON SHARES, $0.01 PAR VALUE
Balance, beginning of period	$	3,793		$	3,784		$	3,791		$	3,790
Conversion of OP Units into Common Shares		2			9			1			7
Exercise of share options		3			2			2			—
Employee Share Purchase Plan (ESPP)		1			—			—			—
Common Shares repurchased and retired		(7	)		—			—			—
Share-based employee compensation expense:
Restricted shares		2			2			—			—
Balance, end of period	$	3,794		$	3,797		$	3,794		$	3,797
PAID IN CAPITAL
Balance, beginning of period	$	9,601,866		$	9,476,085		$	9,590,105		$	9,472,628
Common Share Issuance:
Conversion of OP Units into Common Shares		8,232			13,907			3,185			9,250
Exercise of share options		17,312			11,472			10,833			116
Employee Share Purchase Plan (ESPP)		2,829			2,591			381			467
Share-based employee compensation expense:
Restricted shares		11,753			10,292			2,372			2,349
Share options		2,973			3,904			466			779
ESPP discount		589			481			88			83
Supplemental Executive Retirement Plan (SERP)		(597	)		32,078			1			31,930
Acquisition of Noncontrolling Interests – Partially Owned Properties		—			(900	)		—			—
Change in market value of Redeemable Noncontrolling Interests –    Operating Partnership		(64,541	)		18,613			(25,483	)		57,736
Adjustment for Noncontrolling Interests ownership in Operating    Partnership		4,123			20,534			2,591			13,719
Balance, end of period	$	9,584,539		$	9,589,057		$	9,584,539		$	9,589,057
RETAINED EARNINGS
Balance, beginning of period	$	1,437,185		$	1,658,837		$	1,357,922		$	1,506,460
Net income attributable to controlling interests		616,716			523,746			143,446			172,508
Common Share distributions		(767,779	)		(753,633	)		(256,059	)		(251,563	)
Preferred Share distributions		(1,258	)		(2,318	)		(356	)		(773	)
Premium on redemption of Preferred Shares – cash charge		(1,444	)		—			—			—
Common Shares repurchased and retired		(38,467	)		—			—			—
Balance, end of period	$	1,244,953		$	1,426,632		$	1,244,953		$	1,426,632
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance, beginning of period	$	5,704		$	(2,547	)	$	6,914		$	3,708
Accumulated other comprehensive income (loss) – derivative    instruments:
Unrealized holding gains (losses) arising during the period		(3,989	)		4,514			(3,989	)		460
Losses reclassified into earnings from other comprehensive    income		1,819			3,132			609			931
Balance, end of period	$	3,534		$	5,099		$	3,534		$	5,099
DISTRIBUTIONS
Distributions declared per Common Share outstanding	$	2.025		$	1.9875		$	0.675		$	0.6625

See accompanying notes

9

EQUITY RESIDENTIAL

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Continued)

(Amounts in thousands except per share data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2024			2023			2024			2023
NONCONTROLLING INTERESTS
OPERATING PARTNERSHIP
Balance, beginning of period	$	202,306		$	209,961		$	204,032		$	207,405
Issuance of restricted units to Noncontrolling Interests		2			1			—			—
Conversion of OP Units held by Noncontrolling Interests into OP    Units held by General Partner		(8,234	)		(13,916	)		(3,186	)		(9,257	)
Equity compensation associated with Noncontrolling Interests		13,215			14,205			2,979			3,338
Net income attributable to Noncontrolling Interests		17,290			17,174			4,012			5,561
Distributions to Noncontrolling Interests		(23,236	)		(22,924	)		(7,361	)		(7,284	)
Change in carrying value of Redeemable Noncontrolling Interests –    Operating Partnership		1,986			21,878			1,321			19,801
Adjustment for Noncontrolling Interests ownership in Operating    Partnership		(4,123	)		(20,534	)		(2,591	)		(13,719	)
Balance, end of period	$	199,206		$	205,845		$	199,206		$	205,845
PARTIALLY OWNED PROPERTIES
Balance, beginning of period	$	994		$	(721	)	$	(295	)	$	(4,728	)
Net income attributable to Noncontrolling Interests		3,098			5,299			1,059			3,217
Contributions by Noncontrolling Interests		458			9			—			—
Distributions to Noncontrolling Interests		(3,215	)		(3,573	)		(429	)		(312	)
Acquisition of Noncontrolling Interests – Partially Owned Properties		—			(2,837	)		—			—
Other		(1,000	)		—			—			—
Balance, end of period	$	335		$	(1,823	)	$	335		$	(1,823	)

See accompanying notes

10

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

	September 30,			December 31,
	2024			2023
ASSETS
Land	$	5,675,037		$	5,581,876
Depreciable property		24,148,043			22,938,426
Projects under development		222,055			78,036
Land held for development		65,113			114,300
Investment in real estate		30,110,248			28,712,638
Accumulated depreciation		(10,386,783	)		(9,810,337	)
Investment in real estate, net		19,723,465			18,902,301
Investments in unconsolidated entities		359,810			282,049
Cash and cash equivalents		28,610			50,743
Restricted deposits		97,949			89,252
Right-of-use assets		458,673			457,266
Other assets		257,314			252,953
Total assets	$	20,925,821		$	20,034,564
LIABILITIES AND CAPITAL
Liabilities:
Mortgage notes payable, net	$	1,633,414		$	1,632,902
Notes, net		5,945,670			5,348,417
Line of credit and commercial paper		786,561			409,131
Accounts payable and accrued expenses		165,787			87,377
Accrued interest payable		50,633			65,716
Lease liabilities		306,119			311,640
Other liabilities		294,543			272,596
Security deposits		74,350			69,178
Distributions payable		263,425			259,231
Total liabilities		9,520,502			8,456,188
Commitments and contingencies
Redeemable Limited Partners		351,803			289,248
Capital:
Partners’ Capital:
Preference Units		17,155			37,280
General Partner		10,833,286			11,042,844
Limited Partners		199,206			202,306
Accumulated other comprehensive income (loss)		3,534			5,704
Total partners’ capital		11,053,181			11,288,134
Noncontrolling Interests – Partially Owned Properties		335			994
Total capital		11,053,516			11,289,128
Total liabilities and capital	$	20,925,821		$	20,034,564

See accompanying notes

11

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands except per Unit data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2024			2023			2024			2023
REVENUES
Rental income	$	2,213,329		$	2,146,464		$	748,348		$	724,067
EXPENSES
Property and maintenance		396,349			391,437			135,221			129,087
Real estate taxes and insurance		320,452			312,607			105,954			102,858
Property management		100,381			90,314			31,412			28,169
General and administrative		48,902			49,135			14,551			14,094
Depreciation		688,041			661,921			237,948			224,736
Total expenses		1,554,125			1,505,414			525,086			498,944
Net gain (loss) on sales of real estate properties		227,829			127,034			(165	)		26,912
Interest and other income		26,501			11,296			15,844			7,627
Other expenses		(59,094	)		(20,517	)		(13,971	)		(4,958	)
Interest:
Expense incurred, net		(205,762	)		(200,882	)		(72,722	)		(68,891	)
Amortization of deferred financing costs		(5,784	)		(7,023	)		(1,948	)		(3,027	)
Income before income and other taxes, income (loss) from    investments in unconsolidated entities and net gain (loss)    on sales of land parcels		642,894			550,958			150,300			182,786
Income and other tax (expense) benefit		(925	)		(892	)		(290	)		(258	)
Income (loss) from investments in unconsolidated entities		(4,865	)		(3,847	)		(1,493	)		(1,242	)
Net income		637,104			546,219			148,517			181,286
Net (income) loss attributable to Noncontrolling Interests – Partially Owned    Properties		(3,098	)		(5,299	)		(1,059	)		(3,217	)
Net income attributable to controlling interests	$	634,006		$	540,920		$	147,458		$	178,069
ALLOCATION OF NET INCOME:
Preference Units	$	1,258		$	2,318		$	356		$	773
Premium on redemption of Preference Units	$	1,444		$	—		$	—		$	—
General Partner	$	614,014		$	521,428		$	143,090		$	171,735
Limited Partners		17,290			17,174			4,012			5,561
Net income available to Units	$	631,304		$	538,602		$	147,102		$	177,296
Earnings per Unit – basic:
Net income available to Units	$	1.62		$	1.38		$	0.38		$	0.45
Weighted average Units outstanding		389,379			389,991			389,379			390,087
Earnings per Unit – diluted:
Net income available to Units	$	1.62		$	1.38		$	0.38		$	0.45
Weighted average Units outstanding		390,688			391,135			391,026			391,351

See accompanying notes

12

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued)

(Amounts in thousands except per Unit data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2024			2023			2024			2023
Comprehensive income:
Net income	$	637,104		$	546,219		$	148,517		$	181,286
Other comprehensive income (loss):
Other comprehensive income (loss) – derivative instruments:
Unrealized holding gains (losses) arising during the period		(3,989	)		4,514			(3,989	)		460
Losses reclassified into earnings from other comprehensive    income		1,819			3,132			609			931
Other comprehensive income (loss)		(2,170	)		7,646			(3,380	)		1,391
Comprehensive income		634,934			553,865			145,137			182,677
Comprehensive (income) attributable to Noncontrolling Interests –    Partially Owned Properties		(3,098	)		(5,299	)		(1,059	)		(3,217	)
Comprehensive income attributable to controlling interests	$	631,836		$	548,566		$	144,078		$	179,460

See accompanying notes

13

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	637,104		$	546,219
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		688,041			661,921
Amortization of deferred financing costs		5,784			7,023
Amortization of discounts and premiums on debt		3,823			2,815
Amortization of deferred settlements on derivative instruments		1,811			3,123
Amortization of right-of-use assets		11,320			9,572
Write-off of pursuit costs		1,905			2,739
(Income) loss from investments in unconsolidated entities		4,865			3,847
Distributions from unconsolidated entities – return on capital		446			436
Net (gain) loss on sales of real estate properties		(227,829	)		(127,034	)
Realized (gain) loss on investment securities		1,316			(1,511	)
Unrealized (gain) loss on investment securities		(19,880	)		(4,461	)
Compensation paid with Company Common Shares		26,781			26,948
Changes in assets and liabilities:
(Increase) decrease in other assets		5,551			11,887
Increase (decrease) in accounts payable and accrued expenses		71,360			71,334
Increase (decrease) in accrued interest payable		(15,083	)		(18,791	)
Increase (decrease) in lease liabilities		(3,363	)		(1,077	)
Increase (decrease) in other liabilities		20,258			(7,024	)
Increase (decrease) in security deposits		5,172			558
Net cash provided by operating activities		1,219,382			1,188,524
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in real estate – acquisitions		(1,320,592	)		(324,497	)
Investment in real estate – development/other		(90,718	)		(60,179	)
Capital expenditures to real estate		(230,107	)		(229,763	)
Non-real estate capital additions		(1,572	)		(1,457	)
Interest capitalized for real estate and unconsolidated entities under development		(10,697	)		(9,579	)
Proceeds from disposition of real estate, net		360,850			191,718
Investments in unconsolidated entities – acquisitions		(31,286	)		(989	)
Investments in unconsolidated entities – development/other		(48,360	)		(34,076	)
Distributions from unconsolidated entities – return of capital		1,409			15
Purchase of investment securities and other investments		—			(2,500	)
Proceeds from sale of investment securities		7,457			2,952
Net cash provided by (used for) investing activities		(1,363,616	)		(468,355	)

See accompanying notes

14

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2024			2023
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt financing costs	$	(5,307	)	$	(4,106	)
Mortgage notes payable, net:
Proceeds		—			572,896
Lump sum payoffs		—			(932,598	)
Scheduled principal repayments		(2,400	)		(554	)
Notes, net:
Proceeds		597,954			—
Line of credit and commercial paper:
Line of credit proceeds		198,000			—
Line of credit repayments		(198,000	)		—
Commercial paper proceeds		8,610,430			4,393,568
Commercial paper repayments		(8,233,000	)		(4,025,887	)
Proceeds from (payments on) settlement of derivative instruments		(3,989	)		25,169
Finance ground lease principal payments		(2,158	)		(1,995	)
Proceeds from EQR’s Employee Share Purchase Plan (ESPP)		2,830			2,591
Proceeds from exercise of EQR options		17,315			11,474
OP Units repurchased and retired		(38,474	)		—
Redemption of Preference Units		(20,125	)		—
Premium on redemption of Preference Units		(1,444	)		—
Other financing activities, net		(52	)		(37	)
Acquisition of Noncontrolling Interests – Partially Owned Properties		—			(3,737	)
Contributions – Noncontrolling Interests – Partially Owned Properties		458			9
Contributions – Limited Partners		2			1
Distributions:
OP Units – General Partner		(762,990	)		(738,584	)
Preference Units		(2,031	)		(2,319	)
OP Units – Limited Partners		(23,058	)		(22,969	)
Noncontrolling Interests – Partially Owned Properties		(3,163	)		(3,536	)
Net cash provided by (used for) financing activities		130,798			(730,614	)
Net increase (decrease) in cash and cash equivalents and restricted deposits		(13,436	)		(10,445	)
Cash and cash equivalents and restricted deposits, beginning of period		139,995			137,172
Cash and cash equivalents and restricted deposits, end of period	$	126,559		$	126,727
Cash and cash equivalents and restricted deposits, end of period
Cash and cash equivalents	$	28,610		$	39,250
Restricted deposits		97,949			87,477
Total cash and cash equivalents and restricted deposits, end of period	$	126,559		$	126,727

See accompanying notes

15

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2024			2023
SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized	$	197,587		$	206,080
Net cash paid (received) for income and other taxes	$	1,097		$	1,035
Real estate acquisitions/dispositions/other:
Mortgage loans assumed	$	—		$	42,256
Amortization of deferred financing costs:
Investment in real estate, net	$	—		$	(211	)
Other assets	$	2,089		$	2,089
Mortgage notes payable, net	$	786		$	2,265
Notes, net	$	2,909		$	2,880
Amortization of discounts and premiums on debt:
Mortgage notes payable, net	$	2,126		$	1,129
Notes, net	$	1,697		$	1,686
Amortization of deferred settlements on derivative instruments:
Other liabilities	$	(8	)	$	(9	)
Accumulated other comprehensive income	$	1,819		$	3,132
Write-off of pursuit costs:
Investment in real estate, net	$	401		$	421
Investments in unconsolidated entities	$	1,292		$	1,667
Other assets	$	212		$	651
(Income) loss from investments in unconsolidated entities:
Investments in unconsolidated entities	$	3,927		$	2,909
Other liabilities	$	938		$	938
Realized/unrealized (gain) loss on derivative instruments:
Other assets	$	—		$	(3,749	)
Other liabilities	$	3,989		$	(765	)
Accumulated other comprehensive income	$	(3,989	)	$	4,514
Investment in real estate – acquisitions:
Investment in real estate, net	$	(1,307,865	)	$	(324,497	)
Right-of-use assets	$	(12,727	)	$	—
Interest capitalized for real estate and unconsolidated entities under development:
Investment in real estate, net	$	(4,308	)	$	(3,468	)
Investments in unconsolidated entities	$	(6,389	)	$	(6,111	)
Investments in unconsolidated entities – development/other:
Investments in unconsolidated entities	$	(47,160	)	$	(32,667	)
Other liabilities	$	(1,200	)	$	(1,409	)
Debt financing costs:
Mortgage notes payable, net	$	—		$	(4,106	)
Notes, net	$	(5,307	)	$	—
Proceeds from (payments on) settlement of derivative instruments:
Other assets	$	—		$	25,613
Other liabilities	$	(3,989	)	$	(444	)
Right-of-use assets and lease liabilities initial measurement and reclassifications:
Right-of-use assets	$	—		$	(7,105	)
Lease liabilities	$	—		$	7,105
Non-cash share distribution and other transfers from unconsolidated entities:
Investments in unconsolidated entities	$	—		$	539
Other assets	$	—		$	(539	)

See accompanying notes

16

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Amounts in thousands)

(Unaudited)

	Nine Months Ended September 30,
	2024			2023
Non-cash change in Supplemental Executive Retirement Plan (SERP) balances:
Other assets	$	(1,362	)	$	33,970
Other liabilities	$	1,959		$	(66,048	)
Paid in capital	$	(597	)	$	32,078

See accompanying notes

17

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL

(Amounts in thousands except per Unit data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2024			2023			2024			2023
PARTNERS’ CAPITAL
PREFERENCE UNITS
Balance, beginning of period	$	37,280		$	37,280		$	17,155		$	37,280
Partial redemption of 8.29% Series K Cumulative Redeemable		(20,125	)		—			—			—
Balance, end of period	$	17,155		$	37,280		$	17,155		$	37,280
GENERAL PARTNER
Balance, beginning of period	$	11,042,844		$	11,138,706		$	10,951,818		$	10,982,878
OP Unit Issuance:
Conversion of OP Units held by Limited Partners into OP Units    held by General Partner		8,234			13,916			3,186			9,257
Exercise of EQR share options		17,315			11,474			10,835			116
EQR’s Employee Share Purchase Plan (ESPP)		2,830			2,591			381			467
Share-based employee compensation expense:
EQR restricted shares		11,755			10,294			2,372			2,349
EQR share options		2,973			3,904			466			779
EQR ESPP discount		589			481			88			83
OP Units repurchased and retired		(38,474	)		—			—			—
Net income available to Units – General Partner		614,014			521,428			143,090			171,735
OP Units – General Partner distributions		(767,779	)		(753,633	)		(256,059	)		(251,563	)
Supplemental Executive Retirement Plan (SERP)		(597	)		32,078			1			31,930
Acquisition of Noncontrolling Interests – Partially Owned Properties		—			(900	)		—			—
Change in market value of Redeemable Limited Partners		(64,541	)		18,613			(25,483	)		57,736
Adjustment for Limited Partners ownership in Operating Partnership		4,123			20,534			2,591			13,719
Balance, end of period	$	10,833,286		$	11,019,486		$	10,833,286		$	11,019,486
LIMITED PARTNERS
Balance, beginning of period	$	202,306		$	209,961		$	204,032		$	207,405
Issuance of restricted units to Limited Partners		2			1			—			—
Conversion of OP Units held by Limited Partners into OP Units held    by General Partner		(8,234	)		(13,916	)		(3,186	)		(9,257	)
Equity compensation associated with Units – Limited Partners		13,215			14,205			2,979			3,338
Net income available to Units – Limited Partners		17,290			17,174			4,012			5,561
Units – Limited Partners distributions		(23,236	)		(22,924	)		(7,361	)		(7,284	)
Change in carrying value of Redeemable Limited Partners		1,986			21,878			1,321			19,801
Adjustment for Limited Partners ownership in Operating Partnership		(4,123	)		(20,534	)		(2,591	)		(13,719	)
Balance, end of period	$	199,206		$	205,845		$	199,206		$	205,845
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Balance, beginning of period	$	5,704		$	(2,547	)	$	6,914		$	3,708
Accumulated other comprehensive income (loss) – derivative    instruments:
Unrealized holding gains (losses) arising during the period		(3,989	)		4,514			(3,989	)		460
Losses reclassified into earnings from other comprehensive    income		1,819			3,132			609			931
Balance, end of period	$	3,534		$	5,099		$	3,534		$	5,099
DISTRIBUTIONS
Distributions declared per Unit outstanding	$	2.025		$	1.9875		$	0.675		$	0.6625

See accompanying notes

18

ERP OPERATING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL (Continued)

(Amounts in thousands except per Unit data)

(Unaudited)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2024			2023			2024			2023
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS – PARTIALLY OWNED    PROPERTIES
Balance, beginning of period	$	994		$	(721	)	$	(295	)	$	(4,728	)
Net income attributable to Noncontrolling Interests		3,098			5,299			1,059			3,217
Contributions by Noncontrolling Interests		458			9			—			—
Distributions to Noncontrolling Interests		(3,215	)		(3,573	)		(429	)		(312	)
Acquisition of Noncontrolling Interests – Partially Owned Properties		—			(2,837	)		—			—
Other		(1,000	)		—			—			—
Balance, end of period	$	335		$	(1,823	)	$	335		$	(1,823	)

See accompanying notes

19

EQUITY RESIDENTIAL

ERP OPERATING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.

Business

Equity Residential (“EQR”) is an S&P 500 company focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract affluent 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 September 30, 2024 owned an approximate 97.0% 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 traded equity.

As of September 30, 2024, the Company, directly or indirectly through investments in title holding entities, owned all or a portion of 312 properties located in 10 states and the District of Columbia consisting of 84,018 apartment units. The ownership breakdown includes (table does not include any uncompleted development properties):

	Properties		Apartment Units
Wholly Owned Properties		297		80,749
Partially Owned Properties – Consolidated		14		3,060
Partially Owned Properties – Unconsolidated		1		209
		312		84,018

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 (“GAAP”) 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 nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

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.

The balance sheets at December 31, 2023 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.

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, 2023.

20

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 no 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.

Recent Accounting Pronouncements

In March 2024, the Securities and Exchange Commission ("SEC") adopted final rules that will require certain climate-related information in registration statements and annual reports. In April 2024, the SEC voluntarily stayed the new rules as a result of pending legal challenges. The new rules include a requirement to disclose material climate-related risks, descriptions of board and management oversight and risk management activities, the material impacts of these risks on a registrant’s strategy, business model and outlook, and any material climate-related targets or goals, as well as material effects and costs of severe weather events and other natural conditions and greenhouse gas emissions. Prior to the stay of the new rules, they would have been effective for annual periods beginning January 1, 2025, except for the greenhouse gas emissions disclosures, which would have been effective for annual periods beginning January 1, 2026. The Company is currently evaluating the impact of the new rules on its disclosures.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued an amendment to the income tax standards which requires disclosure enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. The new standard will be effective for annual periods beginning January 1, 2025 and will be applied on a prospective basis with the option to apply the standard retrospectively. The Company is currently evaluating the impact of adopting the standard on its consolidated results of operations and financial position.

In November 2023, the FASB issued an amendment to the segment reporting standards which requires disclosure for each reportable segment, on an interim and annual basis, of the significant expense categories and amounts that are regularly provided to the chief operating decision maker and included in each reported measure of a segment’s profit or loss. Additionally, it requires disclosure of the title and position of the individual or the name of the group or committee identified as the chief operating decision maker. The new standard will be effective for annual periods beginning January 1, 2024 and interim periods beginning January 1, 2025 on a retrospective basis. The Company is currently evaluating the impact of adopting the standard on its segment disclosures.

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. The new standard was effective for the Company upon issuance and elections could be made through December 31, 2024. The Company elected to apply the hedge accounting expedients and application of these expedients preserves the presentation of derivatives consistent with past presentation.

3.

Equity, Capital and Other Interests

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.

21

The following table presents the changes in the Company’s issued and outstanding Common Shares and Units for the nine months ended September 30, 2024 and 2023:

	2024			2023
Common Shares
Common Shares outstanding at January 1,		379,291,417			378,429,708
Common Shares Issued:
Conversion of OP Units		191,019			862,596
Exercise of share options		284,021			234,395
Employee Share Purchase Plan (ESPP)		54,061			48,835
Restricted share grants, net		186,672			148,304
Common Shares Other:
Repurchased and retired		(652,452	)		—
Common Shares outstanding at September 30,		379,354,738			379,723,838
Units
Units outstanding at January 1,		11,581,306			12,429,737
Restricted unit grants, net		172,667			166,344
Conversion of OP Units to Common Shares		(191,019	)		(862,596	)
Units outstanding at September 30,		11,562,954			11,733,485
Total Common Shares and Units outstanding at September 30,		390,917,692			391,457,323
Units Ownership Interest in Operating Partnership		3.0	%		3.0	%

The following table presents the changes in the Operating Partnership’s issued and outstanding General Partner Units and Limited Partner Units for the nine months ended September 30, 2024 and 2023:

	2024			2023
General and Limited Partner Units
General and Limited Partner Units outstanding at January 1,		390,872,723			390,859,445
Issued to General Partner:
Exercise of EQR share options		284,021			234,395
EQR’s Employee Share Purchase Plan (ESPP)		54,061			48,835
EQR’s restricted share grants, net		186,672			148,304
Issued to Limited Partners:
Restricted unit grants, net		172,667			166,344
General Partner Other:
OP Units repurchased and retired		(652,452	)		—
General and Limited Partner Units outstanding at September 30,		390,917,692			391,457,323
Limited Partner Units
Limited Partner Units outstanding at January 1,		11,581,306			12,429,737
Limited Partner restricted unit grants, net		172,667			166,344
Conversion of Limited Partner OP Units to EQR Common Shares		(191,019	)		(862,596	)
Limited Partner Units outstanding at September 30,		11,562,954			11,733,485
Limited Partner Units Ownership Interest in Operating Partnership		3.0	%		3.0	%

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.

22

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 September 30, 2024 and December 31, 2023.

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 September 30, 2024 and 2023, the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners have a redemption value of approximately $351.8 million and $277.8 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.

The following table presents the changes in the redemption value of the Redeemable Noncontrolling Interests – Operating Partnership/Redeemable Limited Partners for the nine months ended September 30, 2024 and 2023, respectively (amounts in thousands):

	2024			2023
Balance at January 1,	$	289,248		$	318,273
Change in market value		64,541			(18,613	)
Change in carrying value		(1,986	)		(21,878	)
Balance at September 30,	$	351,803		$	277,782

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 September 30, 2024 and December 31, 2023:

				Amounts in thousands
		Annual
	Call	Dividend Per		September 30,		December 31,
	Date (1)	Share/Unit (2)		2024		2023
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; 343,100 shares/units issued    and outstanding as of September 30, 2024 and 745,600 shares/units issued    and outstanding as of December 31, 2023 (3)	12/10/2026	$	4.145	$	17,155	$	37,280
				$	17,155	$	37,280

23

(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.

(3)

During the nine months ended September 30, 2024, the Company repurchased and retired 402,500 Series K Preferred Shares/Preference Units with a liquidation value of approximately $20.1 million for total cash consideration of approximately $21.8 million, inclusive of premiums and accrued dividends through the redemption date. As a result of this partial redemption, the Company incurred a cash charge of approximately $1.4 million which was recorded as a premium on the redemption of Preferred Shares/Preference Units.

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 May 2022 and expires in May 2025. 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 issue Common Shares from time to time into the existing trading market at current market prices or through negotiated transactions, including under forward sale arrangements. The current program matures in May 2025 and gives us the authority to issue up to 13.0 million shares, all of which remain available for issuance as of September 30, 2024.

During the nine months ended September 30, 2024, the Company repurchased and subsequently retired approximately $38.5 million (652,452 shares at a weighted average price per share of $58.95) of its Common Shares in the open market under its share repurchase program. Concurrent with these transactions, ERPOP repurchased and retired the same amount of OP Units previously issued to EQR. Prior to the share repurchase activity during the nine months ended September 30, 2024, the Company had the authority to repurchase up to 13.0 million Common Shares under its share repurchase program, of which 12,347,548 shares remain authorized to repurchase as of September 30, 2024.

4.

Real Estate

The following table summarizes the carrying amounts for the Company’s investment in real estate (at cost) as of September 30, 2024 and December 31, 2023 (amounts in thousands):

	September 30, 2024			December 31, 2023
Land	$	5,675,037		$	5,581,876
Depreciable property:
Buildings and improvements		20,760,047			19,809,432
Furniture, fixtures and equipment		2,822,816			2,609,600
In-Place lease intangibles		565,180			519,394
Projects under development:
Land		40,031			3,201
Construction-in-progress		182,024			74,835
Land held for development:
Land		46,160			82,026
Construction-in-progress		18,953			32,274
Investment in real estate		30,110,248			28,712,638
Accumulated depreciation		(10,386,783	)		(9,810,337	)
Investment in real estate, net	$	19,723,465		$	18,902,301

During the nine months ended September 30, 2024, the Company acquired the following from unaffiliated parties (purchase price and purchase price allocation in thousands):

							Purchase Price Allocation (1)
	Properties		Apartment Units		Purchase Price		Land		Depreciable Property		Lease Intangible (2)
Rental Properties – Consolidated		15		4,578	$	1,317,845	$	154,777	$	1,152,251	$	12,727

(1)

Purchase price allocation includes capitalized closing costs.

(2)

One of the properties is subject to fully prepaid below market long-term ground and parking leases, recorded as a lease intangible asset included in right-of-use assets on the consolidated balance sheets.

24

During the nine months ended September 30, 2024, the Company disposed of the following to unaffiliated parties (sales price and net gain in thousands):

	Properties		Apartment Units		Sales Price		Net Gain
Rental Properties – Consolidated		6		969	$	365,500	$	227,829

5.

Investments in Partially Owned Entities

The Company has invested in various entities 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 that have been deemed to be VIEs, and the Company is the VIEs’ primary beneficiary. As a result, the joint ventures are required to be consolidated on the Company’s financial statements. The following table summarizes the Company’s consolidated joint ventures as of September 30, 2024:

	Operating Properties (1)				Projects Under Development (2)
	Properties		Apartment Units		Projects		Apartment Units (3)
Consolidated Joint Ventures (VIE)		14		3,060		1		440

(1)

The land parcel under one of the properties is subject to a long-term ground lease.

(2)

Represents separate consolidated joint ventures for the purpose of developing multifamily rental properties.

(3)

Represents the intended number of apartment units to be developed.

The following table provides consolidated assets and liabilities related to the Company's VIEs as of September 30, 2024 and December 31, 2023 (amounts in thousands):

	September 30, 2024		December 31, 2023
Consolidated Assets	$	631,890	$	599,788
Consolidated Liabilities	$	47,373	$	41,153

Investments in Unconsolidated Entities

The Company has various equity interests in certain joint ventures that are unconsolidated and accounted for using the equity method of accounting. Most of these have been deemed to be VIEs and the Company is not the VIEs' primary beneficiary. The remaining have been deemed not to be VIEs and the Company does not have a controlling voting interest.

The following table and information summarizes the Company’s investments in unconsolidated entities as of September 30, 2024 and December 31, 2023 (amounts in thousands except for ownership percentage):

	September 30, 2024			December 31, 2023			Ownership Percentage
Investments in Unconsolidated Entities:
Various Real Estate Holdings (VIE)	$	34,915		$	35,421		Varies
Projects Under Development and Land Held for Development (VIE)		297,480			220,192		62% - 95% (1)
Real Estate Technology Funds/Companies (VIE)		27,666			26,691		Varies
Other		(251	)		(255	)	Varies
Investments in Unconsolidated Entities	$	359,810		$	282,049

25

(1)

In certain instances, the joint venture agreements contain provisions for promoted interests in favor of our joint venture partner. If the terms of the promoted interest are attained, then our share of the proceeds from a sale or other capital event of the unconsolidated entity may be less than the indicated ownership percentage.

The following table summarizes the Company’s unconsolidated joint ventures that were deemed to be VIEs as of September 30, 2024:

Operating Properties

Real Estate Holdings (1)

Projects Under Development (2), (5)

Projects Held for Development (2), (3)

Properties

Apartment Units

Entities

Projects

Apartment Units (4)

Projects

Apartment Units (4)

Unconsolidated Joint Ventures (VIE)

1

209

3

7

2,412

2

526

(1)

Represents entities that hold various real estate investments.

(2)

Represents separate unconsolidated joint ventures for the purpose of developing multifamily rental properties.

(3)

Represents separate unconsolidated joint ventures that have not yet started.

(4)

Represents the intended number of apartment units to be developed.

(5)

The land parcel under one of the projects is subject to a long-term ground lease.

6.

Restricted Deposits

The following table presents the Company’s restricted deposits as of September 30, 2024 and December 31, 2023 (amounts in thousands):

	September 30, 2024		December 31, 2023
Mortgage escrow deposits:
Real estate taxes and insurance	$	456	$	307
Mortgage principal reserves/sinking funds		33,124		29,270
Mortgage escrow deposits		33,580		29,577
Restricted cash:
Earnest money on pending acquisitions		—		524
Restricted deposits on real estate investments		2,231		2,181
Resident security and utility deposits		42,624		40,149
Replacement reserves		17,439		15,571
Other		2,075		1,250
Restricted cash		64,369		59,675
Restricted deposits	$	97,949	$	89,252

7.

Leases

Lessor Accounting

The Company is the lessor for its residential and non-residential leases and these leases are accounted for as operating leases under the lease standard.

26

The following tables present the lease income types relating to lease payments for residential and non-residential leases along with the total other rental income for the nine months and quarters ended September 30, 2024 and 2023 (amounts in thousands):

	Nine Months Ended September 30, 2024									Nine Months Ended September 30, 2023
Income Type	Residential Leases			Non-Residential Leases			Total			Residential Leases			Non-Residential Leases		Total
Residential and non-residential rent	$	1,978,847		$	48,658		$	2,027,505		$	1,926,869		$	46,642	$	1,973,511
Utility recoveries (RUBS income) (1)		67,731			752			68,483			64,007			662		64,669
Parking rent		34,738			1,027			35,765			32,955			354		33,309
Other lease revenue (2)		(15,417	)		(1,070	)		(16,487	)		(19,172	)		330		(18,842	)
Total lease revenue	$	2,065,899		$	49,367			2,115,266		$	2,004,659		$	47,988		2,052,647
Parking revenue								32,553								30,033
Other revenue								65,510								63,784
Total other rental income (3)								98,063								93,817
Rental income							$	2,213,329							$	2,146,464

	Quarter Ended September 30, 2024									Quarter Ended September 30, 2023
Income Type	Residential Leases			Non-Residential Leases			Total			Residential Leases			Non-Residential Leases			Total
Residential and non-residential rent	$	670,450		$	14,948		$	685,398		$	650,531		$	14,669		$	665,200
Utility recoveries (RUBS income) (1)		22,275			317			22,592			21,221			243			21,464
Parking rent		11,703			394			12,097			11,062			129			11,191
Other lease revenue (2)		(4,685	)		(589	)		(5,274	)		(5,752	)		(404	)		(6,156	)
Total lease revenue	$	699,743		$	15,070			714,813		$	677,062		$	14,637			691,699
Parking revenue								10,838									9,638
Other revenue								22,697									22,730
Total other rental income (3)								33,535									32,368
Rental income							$	748,348								$	724,067

(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 debt (see below for further discussion) and other miscellaneous lease revenue.

(3)

Other rental income is accounted for under the revenue recognition standard and primarily consists of third-party transient parking revenue and ancillary income such as cable and laundry revenue.

The following table presents residential accounts receivable and straight-line receivable balances for the Company’s properties as of September 30, 2024 and December 31, 2023 (amounts in thousands):

Balance Sheet (Other assets):	September 30, 2024			December 31, 2023
Residential accounts receivable balances	$	16,281		$	21,477
Allowance for doubtful accounts		(10,044	)		(15,846	)
Net receivable balances	$	6,237		$	5,631
Straight-line receivable balances	$	9,141		$	9,183

The following table presents residential bad debt for the Company’s properties for the nine months and quarters ended September 30, 2024 and 2023 (amounts in thousands):

	Nine Months Ended September 30,						Quarter Ended September 30,
Income Statement (Rental income):	2024			2023			2024			2023
Bad debt, net (1)	$	25,045		$	28,862		$	7,906		$	9,042
% of residential rental income		1.2	%		1.4	%		1.1	%		1.3	%

(1)

Bad debt, net benefited from additional resident payments due to governmental rental assistance programs of approximately $1.2 million and $2.4 million for the nine months ended September 30, 2024 and 2023, respectively, and $0.4 million and $0.5 million for the quarters ended September 30, 2024 and 2023, respectively.

27

Lessee Accounting

During the nine months ended September 30, 2024, the Company acquired below market long-term ground and parking leases, each fully prepaid at $1 and expiring in 2110, in connection with an apartment property acquisition as described in Note 4 and recorded a lease intangible asset of approximately $12.7 million, which is included in right-of-use assets on the consolidated balance sheets.

8.

Debt

EQR does not have any indebtedness as all debt is incurred by the Operating Partnership. Weighted average interest rates noted below for the nine months ended September 30, 2024 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 nine months ended September 30, 2024 (amounts in thousands):

	Mortgage notes payable, net as of December 31, 2023		Proceeds		Lump sum payoffs		Scheduled principal repayments			Amortization of premiums/ discounts		Amortization of deferred financing costs, net (1)		Mortgage notes payable, net as of September 30, 2024
Fixed Rate Debt:
Secured – Conventional	$	1,398,598	$	—	$	—	$	—		$	1,193	$	681	$	1,400,472
Floating Rate Debt:
Secured – Tax Exempt		234,304		—		—		(2,400	)		933		105		232,942
Total	$	1,632,902	$	—	$	—	$	(2,400	)	$	2,126	$	786	$	1,633,414

(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 nine months ended September 30, 2024:

	September 30, 2024
Interest Rate Ranges (ending)	0.10% - 5.25%
Weighted Average Interest Rate	3.85%
Maturity Date Ranges	2029-2061

As of September 30, 2024, the Company had $244.3 million of secured tax-exempt bonds subject to third-party credit enhancement.

Notes

The following table summarizes the Company’s notes activity for the nine months ended September 30, 2024 (amounts in thousands):

	Notes, net as of December 31, 2023		Proceeds			Lump sum payoffs		Amortization of premiums/ discounts		Amortization of deferred financing costs, net (1)			Notes, net as of September 30, 2024
Fixed Rate Debt:
Unsecured – Public	$	5,348,417	$	597,954	(2)	$	—	$	1,697	$	(2,398	)	$	5,945,670

(1)

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

(2)

Issued $600.0 million of ten-year 4.65% unsecured notes, receiving net proceeds before underwriting fees, hedge termination costs and other expenses.

28

The following table summarizes certain interest rate and maturity date information as of and for the nine months ended September 30, 2024:

	September 30, 2024
Interest Rate Ranges (ending)	1.85% - 7.57%
Weighted Average Interest Rate	3.52%
Maturity Date Ranges	2025-2047

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 nine months ended September 30, 2024.

Line of Credit and Commercial Paper

The Company has a $2.5 billion unsecured revolving credit facility maturing on October 26, 2027. 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 the Secured Overnight Financing Rate ("SOFR") plus a spread (currently 0.715%), 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 and other terms and conditions per the agreement. The weighted average interest rate on the revolving credit facility was 6.14% for the nine months ended September 30, 2024.

The Company has an unsecured commercial paper note program under which it may borrow up to a maximum of $1.0 billion 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.

The following table summarizes certain weighted average interest rate, maturity and amount outstanding information for the commercial paper program as of and for the nine months ended September 30, 2024:

	September 30, 2024
Weighted Average Interest Rate (1)	5.51%
Weighted Average Maturity (in days)	22
Weighted Average Amount Outstanding	$420.5 million

(1)

The notes bear interest at various floating rates.

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 September 30, 2024 (amounts in thousands):

	September 30, 2024
Unsecured revolving credit facility commitment	$	2,500,000
Commercial paper balance outstanding		(789,000	)
Unsecured revolving credit facility balance outstanding		—
Other restricted amounts		(3,438	)
Unsecured revolving credit facility availability	$	1,707,562

Other

The following table summarizes the Company's total debt extinguishment costs recorded as additional expense for the nine months and quarters ended September 30, 2024 and 2023 (amounts in thousands):

	Nine Months Ended September 30,				Quarter Ended September 30,
	2024		2023		2024		2023
Write-offs of unamortized deferred financing costs	$	—	$	1,143	$	—	$	1,096

29

9.

Fair Value Measurements

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 on listed market prices and 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.

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.

The following table summarizes the inputs to the valuations for each type of 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.
Derivatives	Readily observable market parameters such as forward yield curves and credit default swap data.

The fair values of the Company’s financial instruments (other than the items listed above and the investments disclosed below) 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 September 30, 2024 and December 31, 2023, respectively (amounts in thousands):

	September 30, 2024				December 31, 2023
	Carrying Value		Estimated Fair Value (Level 2)		Carrying Value		Estimated Fair Value (Level 2)
Mortgage notes payable, net	$	1,633,414	$	1,556,724	$	1,632,902	$	1,509,706
Unsecured debt, net		6,732,231		6,450,650		5,757,548		5,346,488
Total debt, net	$	8,365,645	$	8,007,374	$	7,390,450	$	6,856,194

30

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 September 30, 2024 and December 31, 2023, respectively (amounts in thousands):

				Fair Value Measurements at Reporting Date Using
Description	Balance Sheet Location	9/30/2024		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	$	109,840	$	109,840	$	—	$	—
Liabilities
Supplemental Executive Retirement Plan	Other Liabilities	$	109,840	$	109,840	$	—	$	—
Redeemable Noncontrolling Interests –
Operating Partnership/Redeemable
Limited Partners	Mezzanine	$	351,803	$	—	$	351,803	$	—

				Fair Value Measurements at Reporting Date Using
Description	Balance Sheet Location	12/31/2023		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	$	108,478	$	108,478	$	—	$	—
Liabilities
Supplemental Executive Retirement Plan	Other Liabilities	$	108,478	$	108,478	$	—	$	—
Redeemable Noncontrolling Interests –
Operating Partnership/Redeemable
Limited Partners	Mezzanine	$	289,248	$	—	$	289,248	$	—

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 nine months ended September 30, 2024 and 2023, respectively (amounts in thousands):

September 30, 2024 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	$	(3,989	)	Interest expense	$	(1,819	)
Total	$	(3,989	)		$	(1,819	)

September 30, 2023 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	$	4,514	Interest expense	$	(3,132	)
Total	$	4,514		$	(3,132	)

31

As of September 30, 2024 and December 31, 2023, there were approximately $3.5 million and $5.7 million in deferred gains, net, included in accumulated other comprehensive income (loss), respectively, related to previously settled and/or unsettled derivative instruments, of which an estimated $1.7 million may be recognized as additional interest expense during the twelve months ending September 30, 2025.

During the nine months ended September 30, 2024, the Company paid approximately $4.0 million to settle four forward starting swaps in conjunction with the issuance of $600.0 million of ten-year unsecured public notes. The entire $4.0 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 ten-year term of the notes.

Other

The Company has invested in various equity securities without readily determinable fair values and has elected to measure them using the measurement alternative in accordance with the applicable accounting standards for equity securities. These investments are carried at cost less any impairment and adjusted to fair value if there are observable price changes for an identical or similar investment of the same issuer.

The following table summarizes the Company’s real estate technology investment securities included in other assets as of September 30, 2024 and December 31, 2023 (amounts in thousands):

	September 30, 2024		December 31, 2023
Real Estate Technology Investments	$	30,419	$	19,312

During the nine months ended September 30, 2024, the Company sold a portion of one of these investment securities for proceeds of approximately $7.5 million and realized a loss on sale of approximately $1.3 million, which is included in interest and other income in the consolidated statements of operations. During the nine months ended September 30, 2024, the Company adjusted certain of these investment securities to observable market prices and recorded a net unrealized gain of approximately $19.9 million, which is included in interest and other income in the consolidated statements of operations.

32

10.

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):

	Nine Months Ended September 30,						Quarter Ended September 30,
	2024			2023			2024			2023
Numerator for net income per share – basic:
Net income	$	637,104		$	546,219		$	148,517		$	181,286
Allocation to Noncontrolling Interests – Operating Partnership		(17,290	)		(17,174	)		(4,012	)		(5,561	)
Net (income) loss attributable to Noncontrolling    Interests – Partially Owned Properties		(3,098	)		(5,299	)		(1,059	)		(3,217	)
Preferred distributions		(1,258	)		(2,318	)		(356	)		(773	)
Premium on redemption of Preferred Shares		(1,444	)		—			—			—
Numerator for net income per share – basic	$	614,014		$	521,428		$	143,090		$	171,735
Numerator for net income per share – diluted:
Net income	$	637,104		$	546,219		$	148,517		$	181,286
Net (income) loss attributable to Noncontrolling    Interests – Partially Owned Properties		(3,098	)		(5,299	)		(1,059	)		(3,217	)
Preferred distributions		(1,258	)		(2,318	)		(356	)		(773	)
Premium on redemption of Preferred Shares		(1,444	)		—			—			—
Numerator for net income per share – diluted	$	631,304		$	538,602		$	147,102		$	177,296
Denominator for net income per share – basic and diluted:
Denominator for net income per share – basic		378,718			378,614			378,756			378,853
Effect of dilutive securities:
OP Units		10,661			11,377			10,623			11,234
Long-term compensation shares/units		1,309			1,144			1,647			1,264
Denominator for net income per share – diluted		390,688			391,135			391,026			391,351
Net income per share – basic	$	1.62		$	1.38		$	0.38		$	0.45
Net income per share – diluted	$	1.62		$	1.38		$	0.38		$	0.45

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):

	Nine Months Ended September 30,						Quarter Ended September 30,
	2024			2023			2024			2023
Numerator for net income per Unit – basic and diluted:
Net income	$	637,104		$	546,219		$	148,517		$	181,286
Net (income) loss attributable to Noncontrolling    Interests – Partially Owned Properties		(3,098	)		(5,299	)		(1,059	)		(3,217	)
Allocation to Preference Units		(1,258	)		(2,318	)		(356	)		(773	)
Allocation to premium on redemption of Preference Units		(1,444	)		—			—			—
Numerator for net income per Unit – basic and diluted	$	631,304		$	538,602		$	147,102		$	177,296
Denominator for net income per Unit – basic and diluted:
Denominator for net income per Unit – basic		389,379			389,991			389,379			390,087
Effect of dilutive securities:
Dilution for Units issuable upon assumed exercise/vesting    of the Company’s long-term compensation shares/units		1,309			1,144			1,647			1,264
Denominator for net income per Unit – diluted		390,688			391,135			391,026			391,351
Net income per Unit – basic	$	1.62		$	1.38		$	0.38		$	0.45
Net income per Unit – diluted	$	1.62		$	1.38		$	0.38		$	0.45

33

11.

Commitments and Contingencies

Commitments

Real Estate Development Commitments

As of September 30, 2024, the Company has both consolidated and unconsolidated real estate projects under development. The following table summarizes the gross remaining total project costs for the Company’s projects under development at September 30, 2024 (total project costs remaining in thousands):

	Projects		Apartment Units		Total Project Costs Remaining (1)
Projects Under Development
Consolidated		2		665	$	162,738
Unconsolidated		7		2,412		269,964
Total Projects Under Development		9		3,077	$	432,702

(1)

The Company’s share of the $432.7 million in total project costs remaining approximates $231.3 million, with the balance funded by the Company’s joint venture partners (approximately $8.5 million) and/or applicable construction loans (approximately $192.9 million).

We have entered into, and may continue in the future to enter into, joint venture agreements with third-party partners for the development of multifamily rental properties. The joint venture agreements with each development partner include buy-sell provisions that provide 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 5 for additional discussion.

Other Commitments

We have entered into, and may continue in the future to enter into, real estate technology and other real estate fund investments. As of September 30, 2024, the Company has invested in ten separate such investments totaling $41.6 million with aggregate remaining commitments of approximately $16.4 million.

Contingencies

Litigation and Legal Matters

The Company, as an owner of real estate, is subject to various federal, state and local 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 on its current properties or on properties that it may acquire in the future.

The Company is involved in various pending and threatened legal proceedings which arise in the ordinary course of business. The Company evaluates these litigation matters on an ongoing basis, but in no event less than quarterly, in assessing the adequacy of its accruals and disclosures. For legal proceedings in which it has been determined that a loss is both probable and reasonably estimable, the Company records new accruals and/or adjusts existing accruals that represent its best estimate of the loss incurred based on the facts and circumstances known at that time. As of September 30, 2024 and December 31, 2023, the Company’s litigation accruals approximated $42.4 million and $17.1 million, respectively, and are included in other liabilities in the consolidated balance sheets. Actual losses may differ materially from the amounts noted above and the ultimate outcome of these legal proceedings is generally not yet determinable. As of September 30, 2024 and December 31, 2023, the Company does not believe there is any litigation pending or threatened against it that, either individually or in the aggregate and inclusive of the matters accrued for as noted above, may reasonably be expected to have a material adverse effect on the Company and its financial condition.

The Company has been named as a defendant in a number of cases filed in late 2022 and 2023 alleging antitrust violations by RealPage, Inc., a seller of revenue management software products, and various owners and/or operators of multifamily housing, including us, that have utilized these products. The complaints allege collusion among the defendants to illegally fix and inflate the pricing of multifamily rents and seek monetary damages, injunctive relief, fees and costs. All of the cases except for one have been consolidated into a single putative class action in the United States District Court for the Middle District of Tennessee. On December 28, 2023, motions to dismiss this consolidated action, filed by RealPage, Inc. as well as us and our multifamily co-defendants, were denied by the Court and the case is proceeding. Another case with similar allegations has been filed by the District of Columbia against RealPage, Inc. and a number of multifamily owners and/or operators, including us. We believe these various lawsuits are without merit and we intend to vigorously defend against them. As these proceedings are in the early stages, it is not possible for the Company to predict the outcome nor is it possible to estimate the amount of loss, if any, which may be associated with an adverse decision in any of

34

these cases.

The Company is named as a defendant in a class action in the United States District Court for the Northern District of California filed in 2016 which alleges that the amount of late fees charged by the Company were improperly determined under California law. The plaintiffs are seeking monetary damages and other relief. On April 8, 2024, the Court issued certain findings of facts and conclusions of law that are adverse to the Company’s legal position. At this time, the Company is continuing to defend the action. While the resolution of this matter cannot be predicted with certainty, the Company does not believe that the eventual outcome will have a material adverse effect on the Company and its financial condition.

12.

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 for same store properties and on a portfolio basis for non-same store properties. While the Company does maintain a non-residential presence, it accounts for less than 4.0% of total revenues for the nine months ended September 30, 2024 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 represent its reportable segments.

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 no customer who contributed 10% or more of the Company’s total revenues during the nine months and quarters ended September 30, 2024 and 2023, 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.

The following table presents a reconciliation of net income per the consolidated statements of operations to NOI for the nine months and quarters ended September 30, 2024 and 2023, respectively (amounts in thousands):

	Nine Months Ended September 30,						Quarter Ended September 30,
	2024			2023			2024			2023
Net income	$	637,104		$	546,219		$	148,517		$	181,286
Adjustments:
Property management		100,381			90,314			31,412			28,169
General and administrative		48,902			49,135			14,551			14,094
Depreciation		688,041			661,921			237,948			224,736
Net (gain) loss on sales of real estate properties		(227,829	)		(127,034	)		165			(26,912	)
Interest and other income		(26,501	)		(11,296	)		(15,844	)		(7,627	)
Other expenses		59,094			20,517			13,971			4,958
Interest:
Expense incurred, net		205,762			200,882			72,722			68,891
Amortization of deferred financing costs		5,784			7,023			1,948			3,027
Income and other tax expense (benefit)		925			892			290			258
(Income) loss from investments in    unconsolidated entities		4,865			3,847			1,493			1,242
Total NOI	$	1,496,528		$	1,442,420		$	507,173		$	492,122

35

The following tables present NOI from our rental real estate for each segment for the nine months and quarters ended September 30, 2024 and 2023, respectively, as well as total assets and capital expenditures at September 30, 2024 (amounts in thousands):

	Nine Months Ended September 30, 2024							Nine Months Ended September 30, 2023
	Rental Income		Operating Expenses		NOI			Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	359,597	$	111,273	$	248,324		$	348,595	$	108,917	$	239,678
Orange County		93,760		21,113		72,647			90,080		20,188		69,892
San Diego		77,784		17,731		60,053			74,183		17,371		56,812
Subtotal - Southern California		531,141		150,117		381,024			512,858		146,476		366,382
Washington, D.C.		347,229		110,104		237,125			331,425		107,050		224,375
San Francisco		325,999		99,012		226,987			321,310		98,504		222,806
New York		369,642		151,331		218,311			356,157		145,192		210,965
Boston		244,474		69,882		174,592			234,291		69,072		165,219
Seattle		223,656		65,197		158,459			218,574		62,055		156,519
Denver		53,522		16,190		37,332			53,324		16,161		37,163
Other Expansion Markets		55,612		22,509		33,103			55,768		24,123		31,645
Total same store		2,151,275		684,342		1,466,933			2,083,707		668,633		1,415,074
Non-same store/other
Non-same store (2)		54,874		22,230		32,644			22,406		10,893		11,513
Other (3)		7,180		10,229		(3,049	)		40,351		24,518		15,833
Total non-same store/other		62,054		32,459		29,595			62,757		35,411		27,346
Totals	$	2,213,329	$	716,801	$	1,496,528		$	2,146,464	$	704,044	$	1,442,420

(1)

For the nine months ended September 30, 2024 and 2023, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2023, less properties subsequently sold, which represented 76,916 apartment units.

(2)

For the nine months ended September 30, 2024 and 2023, non-same store primarily includes properties acquired after January 1, 2023, plus any properties in lease-up and not stabilized as of January 1, 2023, and any properties undergoing major renovations.

(3)

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

	Quarter Ended September 30, 2024							Quarter Ended September 30, 2023
	Rental Income		Operating Expenses		NOI			Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	120,211	$	37,670	$	82,541		$	118,812	$	36,343	$	82,469
Orange County		31,488		7,248		24,240			30,663		6,792		23,871
San Diego		25,969		6,071		19,898			25,258		5,820		19,438
Subtotal - Southern California		177,668		50,989		126,679			174,733		48,955		125,778
Washington, D.C.		117,306		38,351		78,955			112,681		35,616		77,065
San Francisco		108,957		33,313		75,644			107,808		32,769		75,039
New York		123,506		50,011		73,495			118,327		48,055		70,272
Boston		81,941		23,156		58,785			78,562		22,875		55,687
Seattle		75,032		21,907		53,125			72,778		20,883		51,895
Denver		19,649		6,062		13,587			19,802		5,937		13,865
Other Expansion Markets		18,249		6,309		11,940			18,679		7,957		10,722
Total same store		722,308		230,098		492,210			703,370		223,047		480,323
Non-same store/other
Non-same store (2)		25,391		9,371		16,020			8,059		4,099		3,960
Other (3)		649		1,706		(1,057	)		12,638		4,799		7,839
Total non-same store/other		26,040		11,077		14,963			20,697		8,898		11,799
Totals	$	748,348	$	241,175	$	507,173		$	724,067	$	231,945	$	492,122

(1)

For the quarters ended September 30, 2024 and 2023, same store primarily includes all properties acquired or completed that were stabilized prior to July 1, 2023, less properties subsequently sold, which represented 77,203 apartment units.

36

(2)

For the quarters ended September 30, 2024 and 2023, non-same store primarily includes properties acquired after July 1, 2023, plus any properties in lease-up and not stabilized as of July 1, 2023, and any properties undergoing major renovations.

(3)

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

	Nine Months Ended September 30, 2024
	Total Assets		Capital Expenditures
Same store (1)
Los Angeles	$	2,441,079	$	39,778
Orange County		334,057		12,059
San Diego		335,471		12,061
Subtotal - Southern California		3,110,607		63,898
Washington, D.C.		2,980,055		35,160
San Francisco		2,996,799		42,555
New York		3,241,250		19,683
Boston		2,028,747		21,954
Seattle		2,023,139		22,405
Denver		799,928		3,036
Other Expansion Markets		872,501		5,154
Total same store		18,053,026		213,845
Non-same store/other
Non-same store (2)		1,998,651		15,724
Other (3)		874,144		538
Total non-same store/other		2,872,795		16,262
Totals	$	20,925,821	$	230,107

(1)

Same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2023, less properties subsequently sold, which represented 76,916 apartment units.

(2)

Non-same store primarily includes properties acquired after January 1, 2023, plus any properties in lease-up and not stabilized as of January 1, 2023, and any properties undergoing major renovations.

(3)

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

13.

Subsequent Events

Subsequent to September 30, 2024, the Company:

•

Acquired the following from unaffiliated parties (purchase price in thousands):

	Properties		Apartment Units		Purchase Price
Rental Properties – Consolidated		1		274	$	89,500

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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 Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2023.

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. 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, 2023, particularly those under Item 1A, Risk Factors. Forward-looking statements and related uncertainties are also included in the Notes to Consolidated Financial Statements in this report. 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.

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 residential properties located in and around dynamic cities that attract affluent 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.

EQR is the general partner of, and as of September 30, 2024 owned an approximate 97.0% 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 traded equity.

The Company’s corporate headquarters is located in Chicago, Illinois and the Company also operates regional property management offices in most of its markets.

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/statements we file with or furnish to the Securities and Exchange Commission (“SEC”) free of charge on our website, www.equityapartments.com. These reports/statements are made available on our website as soon as reasonably practicable after we file them with or furnish them to 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, 2023.

38

Results of Operations

2024 Transactions

In conjunction with our business objectives and operating and investing strategies, the following table provides a rollforward of the transactions that occurred during the nine months ended September 30, 2024:

Portfolio Rollforward

($ in thousands)

	Properties			Apartment Units			Purchase Price			Acquisition Cap Rate
12/31/2023		302			80,191
Acquisitions:
Consolidated Rental Properties		14			4,418		$	1,255,250			5.1	%
Consolidated Rental Properties – Not Stabilized		1			160		$	62,595			5.7	%
Unconsolidated Land Parcels		—			—		$	33,394
							Sales Price			Disposition Yield
Dispositions:
Consolidated Rental Properties		(6	)		(969	)	$	(365,500	)		(5.7	%)
Completed Developments – Unconsolidated		1			209
Configuration Changes		—			9
9/30/2024		312			84,018

Acquisitions

•

The consolidated properties acquired during the nine months ended September 30, 2024 are located in the Atlanta (5), Boston, Dallas/Ft. Worth (5) and Denver (4) markets.

Dispositions

•

The consolidated properties disposed of during the nine months ended September 30, 2024 were located in the Boston, Orange County, San Francisco (2) and Washington, D.C. (2) markets.

Developments

•

Consolidated:

•

The Company commenced construction on one partially owned consolidated apartment property during the nine months ended September 30, 2024, located in the Boston market, consisting of 440 apartment units totaling approximately $232.2 million of expected development costs;

•

The Company stabilized one partially owned consolidated apartment property during the nine months ended September 30, 2024, located in the Washington, D.C. market, consisting of 312 apartment units totaling approximately $106.0 million of development costs; and

•

The Company spent approximately $90.7 million during the nine months ended September 30, 2024, primarily for consolidated development projects.

•

Unconsolidated:

•

The Company completed construction on one unconsolidated apartment property during the nine months ended September 30, 2024, located in the Denver market, consisting of 209 apartment units totaling approximately $70.0 million of development costs;

•

The Company spent approximately $75.6 million during the nine months ended September 30, 2024, primarily for unconsolidated development projects; and

•

The Company previously entered into two separate unconsolidated joint ventures for the purpose of developing vacant land parcels in the Boston and Seattle markets. During the nine months ended September 30, 2024, the joint ventures acquired their respective land parcels for the total purchase price listed above. The Company commenced construction on these two apartment properties, which are expected to contain 639 total apartment units. Total expected development cost for these projects is $307.2 million, and the Company's total investment in these two joint ventures is approximately

39

$69.0 million as of September 30, 2024.

See Notes 4 and 5 in the Notes to Consolidated Financial Statements for additional discussion regarding the Company’s real estate investments and investments in partially owned entities.

Comparison of the nine months and quarter ended September 30, 2024 to the nine months and quarter ended September 30, 2023

The following table presents a reconciliation of diluted earnings per share/unit for the nine months and quarter ended September 30, 2024 as compared to the same periods in 2023:

	Nine Months Ended September 30			Quarter Ended September 30
Diluted earnings per share/unit for period ended 2023	$	1.38		$	0.45
Property NOI		0.12			0.04
Interest expense		(0.01	)		(0.01	)
Corporate overhead (1)		(0.02	)		(0.01	)
Net gain/loss on property sales		0.27			(0.06	)
Non-operating asset gains/losses		0.03			0.03
Depreciation expense		(0.08	)		(0.04	)
Other		(0.07	)		(0.02	)
Diluted earnings per share/unit for period ended 2024	$	1.62		$	0.38

(1)

Corporate overhead includes property management and general and administrative expenses.

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 present reconciliations of net income per the consolidated statements of operations to NOI, along with rental income, operating expenses and NOI per the consolidated statements of operations allocated between same store and non-same store/other results (amounts in thousands):

	Nine Months Ended September 30,												Quarter Ended September 30,
	2024			2023			$ Change			% Change			2024			2023			$ Change			% Change
Net income	$	637,104		$	546,219		$	90,885			16.6	%	$	148,517		$	181,286		$	(32,769	)		(18.1	)%
Adjustments:
Property management		100,381			90,314			10,067			11.1	%		31,412			28,169			3,243			11.5	%
General and administrative		48,902			49,135			(233	)		(0.5	)%		14,551			14,094			457			3.2	%
Depreciation		688,041			661,921			26,120			3.9	%		237,948			224,736			13,212			5.9	%
Net (gain) loss on sales of real    estate properties		(227,829	)		(127,034	)		(100,795	)		79.3	%		165			(26,912	)		27,077			(100.6	)%
Interest and other income		(26,501	)		(11,296	)		(15,205	)		134.6	%		(15,844	)		(7,627	)		(8,217	)		107.7	%
Other expenses		59,094			20,517			38,577			188.0	%		13,971			4,958			9,013			181.8	%
Interest:
Expense incurred, net		205,762			200,882			4,880			2.4	%		72,722			68,891			3,831			5.6	%
Amortization of deferred    financing costs		5,784			7,023			(1,239	)		(17.6	)%		1,948			3,027			(1,079	)		(35.6	)%
Income and other tax expense    (benefit)		925			892			33			3.7	%		290			258			32			12.4	%
(Income) loss from investments in    unconsolidated entities		4,865			3,847			1,018			26.5	%		1,493			1,242			251			20.2	%
Total NOI	$	1,496,528		$	1,442,420		$	54,108			3.8	%	$	507,173		$	492,122		$	15,051			3.1	%
Rental income:
Same store	$	2,151,275		$	2,083,707		$	67,568			3.2	%	$	722,308		$	703,370		$	18,938			2.7	%
Non-same store/other		62,054			62,757			(703	)		(1.1	)%		26,040			20,697			5,343			25.8	%
Total rental income		2,213,329			2,146,464			66,865			3.1	%		748,348			724,067			24,281			3.4	%
Operating expenses:
Same store		684,342			668,633			15,709			2.3	%		230,098			223,047			7,051			3.2	%
Non-same store/other		32,459			35,411			(2,952	)		(8.3	)%		11,077			8,898			2,179			24.5	%
Total operating expenses		716,801			704,044			12,757			1.8	%		241,175			231,945			9,230			4.0	%
NOI:
Same store		1,466,933			1,415,074			51,859			3.7	%		492,210			480,323			11,887			2.5	%
Non-same store/other		29,595			27,346			2,249			8.2	%		14,963			11,799			3,164			26.8	%
Total NOI	$	1,496,528		$	1,442,420		$	54,108			3.8	%	$	507,173		$	492,122		$	15,051			3.1	%

40

Note: See Note 12 in the Notes to Consolidated Financial Statements for detail by reportable segment/market.

•

The increase in same store rental income is primarily driven by good demand and modest supply across most of our markets.

•

The increase in year-to-date same store operating expenses is due primarily to:

•

Real estate taxes – An $8.0 million increase due to escalation in rates and assessed values including an approximately one percentage point contribution to growth from 421-a tax abatement burnoffs in New York City. Once the burnoffs are completed, previously rent-restricted apartment units will transition to market;

•

Other on-site operating expenses – A $2.6 million increase primarily driven by higher property-related legal expenses;

•

Insurance – A $2.5 million increase due to higher premiums on property insurance renewal due to conditions in the insurance market that while less difficult than recent years, remain challenging; and

•

Utilities – A $1.7 million increase primarily driven by higher water, sewer and trash expense, partially offset by lower commodity prices for gas and electric.

•

Non-same store/other NOI results consist primarily of properties acquired in calendar years 2023 and 2024, operations from the Company’s development properties, other corporate operations and operations prior to disposition from 2023 and 2024 sold properties.

•

The increase in consolidated total NOI is primarily a result of the Company’s higher NOI from same store properties, largely due to improvement in same store revenues as noted above and the Company's continued focus on same store expense efficiency.

See the Same Store Results section below for additional discussion of those results. See the reconciliation table of net income per the consolidated statements of operations to NOI above for the dollar and percentage changes related to the comparison discussions provided below.

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 management companies. The increases during the nine months and quarter ended September 30, 2024 as compared to the prior year periods are primarily attributable to increases in payroll-related costs, information technology expenses and legal and professional fees.

General and administrative expenses, which include corporate operating expenses, decreased during the nine months ended September 30, 2024 as compared to the prior year period, primarily due to decreases in payroll-related costs, partially offset by increases in other public company costs. General and administrative expenses increased during the quarter ended September 30, 2024 as compared to the prior year period, primarily due to increases in travel costs and other public company expenses.

Depreciation expense, which includes depreciation on non-real estate assets, increased during the nine months and quarter ended September 30, 2024 as compared to the prior year periods, primarily as a result of additional depreciation expense on properties acquired in 2023 and 2024 and development properties placed in service during 2023 and 2024, partially offset by lower depreciation from properties sold in 2023 and 2024.

Net gain on sales of real estate properties increased during the nine months ended September 30, 2024 as compared to the prior year period, primarily as a result of the sale of six consolidated apartment properties for a higher gain in 2024 as compared to the sale of eight consolidated apartment properties in the same period in 2023. Net gain on sales of real estate properties decreased during the quarter ended September 30, 2024 as compared to the prior year period, primarily due to a loss on sale of one consolidated apartment property in the third quarter of 2024 as compared to a gain on sale of one consolidated apartment property in the same period in 2023.

Interest and other income increased during the nine months and quarter ended September 30, 2024 as compared to the prior year periods, primarily due to a net increase in realized/unrealized gains of $12.6 million and $8.1 million, respectively, on various investment securities as well as short-term investment income on restricted deposit accounts due to a higher rate environment and higher overall invested balances.

Other expenses increased during the nine months ended September 30, 2024 as compared to the prior year period, primarily due to increases in litigation accruals and advocacy contributions, partially offset by decreases in data transformation project costs that occurred during 2023 but not during 2024. Other expenses increased during the quarter ended September 30, 2024 as compared to the prior year period, primarily due to increases in advocacy contributions.

41

Interest expense, including amortization of deferred financing costs, increased during the nine months and quarter ended September 30, 2024 as compared to the prior year periods, primarily due to higher overall debt balances outstanding and higher rates on floating debt. The effective interest cost on all indebtedness, excluding debt extinguishment costs/prepayment penalties, for the nine months ended September 30, 2024 was 3.90% as compared to 3.81% for the prior year period, and for the quarter ended September 30, 2024 was 3.92% as compared to 3.81% for the prior year period. The Company capitalized interest of approximately $10.7 million and $9.6 million during the nine months ended September 30, 2024 and 2023, respectively, and $3.8 million and $2.6 million during the quarters ended September 30, 2024 and 2023, respectively.

Loss from investments in unconsolidated entities increased during the nine months and quarter ended September 30, 2024 as compared to the prior year periods, primarily as a result of losses incurred on our unconsolidated development properties which recently started lease-up activities, partially offset by increases in net income of unconsolidated operating properties and a gain on sale of an unconsolidated operating property.

Same Store Results

Properties that the Company owned and were stabilized for all of both of the nine months ended September 30, 2024 and 2023, which represented 76,916 apartment units, drove the Company’s results of operations. Properties are considered “stabilized” when they have achieved 90% occupancy for three consecutive months.

42

The following table provides results and statistics related to our Residential same store operations for the nine months ended September 30, 2024 and 2023:

September YTD 2024 vs. September YTD 2023

Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Year
Markets/Metro Areas	Apartment Units		Sept. YTD 24 % of Actual NOI			Sept. YTD 24 Average Rental Rate		Sept. YTD 24 Weighted Average Physical Occupancy %			Sept. YTD 24 Turnover				Average Rental Rate			Physical Occupancy			Turnover
Los Angeles		14,135		17.5	%	$	2,932		95.6	%		33.7	%			3.0	%		0.2	%		0.1	%
Orange County		3,718		5.2	%		2,917		96.0	%		28.9	%			4.3	%		(0.3	%)		0.0	%
San Diego		2,878		4.2	%		3,119		95.9	%		32.1	%			4.0	%		0.4	%		0.0	%
Subtotal – Southern California		20,731		26.9	%		2,955		95.7	%		32.6	%			3.4	%		0.1	%		0.0	%
Washington, D.C.		14,416		16.5	%		2,716		96.9	%		32.6	%			4.6	%		0.2	%		0.1	%
San Francisco		11,188		15.9	%		3,321		96.2	%		33.8	%			1.0	%		0.5	%		0.3	%
New York		8,536		14.3	%		4,624		97.3	%		27.1	%			3.1	%		0.5	%		(3.2	%)
Boston		7,077		11.2	%		3,597		96.2	%		33.8	%			3.9	%		0.2	%		(1.7	%)
Seattle		9,266		10.4	%		2,602		96.2	%		36.0	%			0.7	%		1.0	%		(3.8	%)
Denver		2,505		2.6	%		2,418		96.3	%		42.7	%			0.8	%		0.0	%		(3.9	%)
Other Expansion Markets		3,197		2.2	%		1,958		95.2	%		45.8	%			(1.4	%)		0.4	%		0.9	%
Total		76,916		100.0	%	$	3,108		96.3	%		33.5	%			2.7	%		0.4	%		(1.1	%)

Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.3% of total revenues for the nine months ended September 30, 2024.

During the nine months ended September 30, 2024, the Company had solid performance in its operating business, with healthy demand across most of our markets supported by a continuing solid job market, high employment levels among our target affluent renter demographic and wage growth across the economy. Competitive new supply has also been modest in most of our existing coastal markets yet has been elevated in our expansion markets. As expected, our East Coast markets continue to be our best performers. On the West Coast, Seattle has continued to show improvement, while San Francisco has improved but at a more modest pace. Our Southern California markets (namely the city of Los Angeles) have shown good demand but greater price sensitivity during the third quarter of 2024.

The Company continued to make progress in move-out activity related to delinquent residents during the nine months ended September 30, 2024. While the eviction process remains challenging, we have made additional progress in reducing delinquencies in our portfolio. We expect this trend to continue through the remainder of 2024.

We are seeing an increasingly active transaction market providing us with opportunities to acquire properties in our expansion markets. We are excited to grow our portfolio and create operating scale in these markets as we execute on our strategy to better balance our portfolio.

Overall, the fundamentals of our business are healthy. Long-term, we expect elevated single family home ownership costs, positive household formation trends, manageable competitive new supply in our established coastal markets and the overall deficit in housing across the country to buffer the impact on our business from the risks of potential economic weakness. We also see our affluent resident base as being resilient to economic uncertainty, including elevated inflation, due to higher levels of disposable income and lower relative rent-to-income ratios.

Liquidity and Capital Resources

With approximately $1.7 billion in readily available liquidity, a strong balance sheet, limited near-term debt maturities, very strong credit metrics and ample access to capital markets, the Company believes it is well positioned to meet its future obligations and take advantage of opportunities. See further discussion below.

43

Statements of Cash Flows

The following table sets forth our sources and uses of cash flows for the nine months ended September 30, 2024 and 2023 (amounts in thousands):

	Nine Months Ended September 30,
	2024			2023
Cash flows provided by (used for):
Operating activities	$	1,219,382		$	1,188,524
Investing activities	$	(1,363,616	)	$	(468,355	)
Financing activities	$	130,798		$	(730,614	)

The following provides information regarding the Company’s cash flows from operating, investing and financing activities for the nine months ended September 30, 2024.

Operating Activities

Our operating cash flows are primarily impacted by NOI and its components, such as Average Rental Rates, Physical Occupancy levels and operating expenses related to our properties. Cash provided by operating activities for the nine months ended September 30, 2024 as compared to the prior year period increased by approximately $30.9 million primarily as a result of the NOI and other changes discussed above in Results of Operations.

Investing Activities

Our investing cash flows are primarily impacted by our transaction activity (acquisitions/dispositions), development spend and capital expenditures. For the nine months ended September 30, 2024, key drivers were:

•

Acquired fifteen consolidated rental properties for approximately $1.3 billion;

•

Disposed of six consolidated rental properties, receiving net proceeds of approximately $360.9 million;

•

Invested $90.7 million primarily in consolidated development projects;

•

Invested $230.1 million in capital expenditures to real estate; and

•

Invested $79.6 million primarily in unconsolidated development joint venture entities as well as unconsolidated investments in real estate technology funds/companies for various technology initiatives.

Financing Activities

Our financing cash flows primarily relate to our borrowing activity (debt proceeds or repayment), distributions/dividends to shareholders/unitholders and other Common Share activity. For the nine months ended September 30, 2024, key drivers were:

•

Issued Common Shares related to share option exercises and ESPP purchases and received net proceeds of $20.1 million;

•

Paid dividends/distributions on Common Shares, Preferred Shares, Units (including OP Units and restricted units) and noncontrolling interests in partially owned properties totaling approximately $791.2 million;

•

Repurchased and retired 652,452 Common Shares, at a weighted average purchase price of $58.95 per share, for an aggregate purchased amount of approximately $38.5 million. See Note 3 in the Notes to Consolidated Financial Statements for further discussion;

•

Repurchased and retired 402,500 Series K Preferred Shares/Preference Units with a liquidation value of approximately $20.1 million for total cash consideration of approximately $21.8 million, inclusive of premiums and accrued dividends through the redemption date. See Note 3 in the Notes to Consolidated Financial Statements for further discussion; and

•

Issued $600.0 million of ten-year 4.65% unsecured notes, receiving net proceeds of approximately $598.0 million before underwriting fees, hedge termination costs and other expenses. The proceeds from this issuance were used to partially fund the Company’s acquisition activity during the third quarter of 2024.

44

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 September 30, 2024 and December 31, 2023 (amounts in thousands):

	September 30, 2024		December 31, 2023
Cash and cash equivalents	$	28,610	$	50,743
Restricted deposits	$	97,949	$	89,252
Unsecured revolving credit facility availability	$	1,707,562	$	2,086,585

Credit Facility and Commercial Paper Program

The Company has a $2.5 billion unsecured revolving credit facility maturing October 26, 2027. 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 the Secured Overnight Financing Rate (“SOFR”) plus a spread (currently 0.715%), 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 and other terms and conditions per the agreement. See Note 8 in the Notes to Consolidated Financial Statements for additional discussion of the Company’s credit facility.

The Company may borrow up to a maximum of $1.0 billion under 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.

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 October 28, 2024 (amounts in thousands):

	October 28, 2024
Unsecured revolving credit facility commitment	$	2,500,000
Commercial paper balance outstanding		(994,985	)
Unsecured revolving credit facility balance outstanding		(23,000	)
Other restricted amounts		(3,438	)
Unsecured revolving credit facility availability	$	1,478,577

Dividend Policy

The Company declared a dividend/distribution for the first, second and third quarters of 2024 of $0.675 per share/unit in each quarter, an annualized increase of 2.0% over the amount paid in 2023. All future dividends/distributions remain subject to the discretion of the Company’s Board of Trustees.

Total dividends/distributions paid in October 2024 amounted to $263.4 million (excluding distributions on Partially Owned Properties), which consisted of certain distributions declared during the quarter ended September 30, 2024.

45

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 $30.1 billion in investment in real estate on the Company’s balance sheet at September 30, 2024, $26.9 billion or 89.5% 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. For additional details, see Item 1A, Risk Factors, of the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the year ended December 31, 2023.

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 schedule as of September 30, 2024 is as follows:

Debt Summary as of September 30, 2024

($ in thousands)

	Debt Balances		% of Total
Secured	$	1,633,414		19.5	%
Unsecured		6,732,231		80.5	%
Total	$	8,365,645		100.0	%
Fixed Rate Debt:
Secured – Conventional	$	1,400,472		16.7	%
Unsecured – Public		5,945,670		71.1	%
Fixed Rate Debt		7,346,142		87.8	%
Floating Rate Debt:
Secured – Tax Exempt		232,942		2.8	%
Unsecured – Revolving Credit Facility		—		—
Unsecured – Commercial Paper Program		786,561		9.4	%
Floating Rate Debt		1,019,503		12.2	%
Total	$	8,365,645		100.0	%

The Company’s long-term financing and capital needs and sources have not changed materially 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, 2023.

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, 2023.

46

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 nine months and quarters ended September 30, 2024 and 2023:

Funds From Operations and Normalized Funds From Operations

(Amounts in thousands)

	Nine Months Ended September 30,						Quarter Ended September 30,
	2024			2023			2024			2023
Net income	$	637,104		$	546,219		$	148,517		$	181,286
Net (income) loss attributable to Noncontrolling    Interests – Partially Owned Properties		(3,098	)		(5,299	)		(1,059	)		(3,217	)
Preferred/preference distributions		(1,258	)		(2,318	)		(356	)		(773	)
Premium on redemption of Preferred Shares/Preference Units		(1,444	)		—			—			—
Net income available to Common Shares and Units / Units		631,304			538,602			147,102			177,296
Adjustments:
Depreciation		688,041			661,921			237,948			224,736
Depreciation – Non-real estate additions		(2,839	)		(3,291	)		(942	)		(1,032	)
Depreciation – Partially Owned Properties		(1,645	)		(1,599	)		(556	)		(544	)
Depreciation – Unconsolidated Properties		3,881			1,921			2,429			695
Net (gain) loss on sales of unconsolidated entities - operating assets		(710	)		—			(710	)		—
Net (gain) loss on sales of real estate properties		(227,829	)		(127,034	)		165			(26,912	)
Noncontrolling Interests share of gain (loss) on sales    of real estate properties		—			2,336			—			2,336
FFO available to Common Shares and Units / Units (1) (3) (4)		1,090,203			1,072,856			385,436			376,575
Adjustments:
Write-off of pursuit costs		1,905			2,739			536			746
Debt extinguishment and preferred share/preference unit redemption    (gains) losses		1,444			1,143			—			1,096
Non-operating asset (gains) losses		(17,452	)		(4,735	)		(14,236	)		(5,766	)
Other miscellaneous items		53,432			14,831			12,758			3,488
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)	$	1,129,532		$	1,086,834		$	384,494		$	376,139
FFO (1) (3)	$	1,092,905		$	1,075,174		$	385,792		$	377,348
Preferred/preference distributions		(1,258	)		(2,318	)		(356	)		(773	)
Premium on redemption of Preferred Shares/Preference Units		(1,444	)		—			—			—
FFO available to Common Shares and Units / Units (1) (3) (4)	$	1,090,203		$	1,072,856		$	385,436		$	376,575
Normalized FFO (2) (3)	$	1,130,790		$	1,089,152		$	384,850		$	376,912
Preferred/preference distributions		(1,258	)		(2,318	)		(356	)		(773	)
Normalized FFO available to Common Shares and Units / Units (2) (3) (4)	$	1,129,532		$	1,086,834		$	384,494		$	376,139

(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 real estate asset impairment;

• pursuit cost write-offs;

• gains and losses from early debt extinguishment and preferred share/preference unit redemptions;

• gains and losses from non-operating assets; and

• other miscellaneous items.

47

(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 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, 2023.

Item 4. Controls and Procedures

Equity Residential

(a)

Evaluation of Disclosure Controls and Procedures:

Effective as of September 30, 2024, 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 third quarter of 2024 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 September 30, 2024, 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.

48

(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 third quarter of 2024 that have materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Other than as disclosed below, there have been no changes to the legal proceedings discussed in Part I, Item 3 of the Company's and the Operating Partnership's Annual Report on Form 10-K for the year ended December 31, 2023. As of September 30, 2024, the Company does not believe there is any litigation pending or threatened against it that, either individually or in the aggregate, may reasonably be expected to have a material adverse effect on the Company and its financial condition. See Note 11 in the Notes to Consolidated Financial Statements for further discussion.

The Company is named as a defendant in a class action in the United States District Court for the Northern District of California filed in 2016 which alleges that the amount of late fees charged by the Company were improperly determined under California law. The plaintiffs are seeking monetary damages and other relief. On April 8, 2024, the Court issued certain findings of facts and conclusions of law that are adverse to the Company’s legal position. At this time, the Company is continuing to defend the action. While the resolution of this matter cannot be predicted with certainty, the Company does not believe that the eventual outcome will have a material adverse effect on the Company and its financial condition.

Item 1A. Risk Factors

There have been no material changes to the risk 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, 2023.

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

Unregistered Common Shares Issued in the Quarter Ended September 30, 2024 (Equity Residential)

During the quarter ended September 30, 2024, EQR issued 100,888 Common Shares in exchange for 100,888 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 option of ERPOP, the cash equivalent thereof, at any time one year after the date of issuance. These shares were either registered under the Securities Act of 1933, as amended (the “Securities Act”), or issued in reliance on an exemption from registration under 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 these exemptions.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the quarter ended September 30, 2024, no trustee or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

Item 6. Exhibits – See the Exhibit Index.

49

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	Ninth Amended and Restated Bylaws of Equity Residential, effective September 19, 2024.	Included as Exhibit 3.1 to Equity Residential's Form 8-K dated September 19, 2024, filed on September 24, 2024.
4.1	Form of 4.650% Note due September 15, 2034.	Included as Exhibit 4.1 to Equity Residential's and ERP Operating Limited Partnership's Form 8-K dated September 9, 2024, filed on September 10, 2024.
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 With Embedded Linkbase Documents.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

50

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:	November 4, 2024	By:	/s/ Robert A. Garechana
			Robert A. Garechana
			Executive Vice President and Chief Financial Officer
			(Principal Financial Officer)
Date:	November 4, 2024	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:	November 4, 2024	By:	/s/ Robert A. Garechana
			Robert A. Garechana
			Executive Vice President and Chief Financial Officer
			(Principal Financial Officer)
Date:	November 4, 2024	By:	/s/ Ian S. Kaufman
			Ian S. Kaufman
			Senior Vice President and Chief Accounting Officer
			(Principal Accounting Officer)