Equity Residential Reports First Quarter 2022 Results

CHICAGO--(BUSINESS WIRE)--Equity Residential (NYSE: EQR) today reported results for the quarter ended March 31, 2022. All per share results are reported as available to common shares/units on a diluted basis. For the first quarter of 2022, the Company reported earnings per share (EPS), Funds from Operations (FFO) per share and Normalized FFO per share of $0.19, $0.77 and $0.77, respectively.

“We delivered very good revenue growth in the first quarter driven by lease rates that accelerated faster than we expected due to exceptionally strong demand partially offset by higher than anticipated levels of new delinquency in Southern California,” said Mark J. Parrell, Equity Residential’s President and CEO. “Operating expense growth remains in check due to a combination of muted property tax increases and continuing efficiencies from our innovation initiatives, leading to 10.7% same store NOI growth for the quarter. As we head into our primary leasing season, we remain well positioned to generate excellent cash flow growth for our shareholders.”

Recent Highlights

• Strong demand drove a 26.7% increase in EPS, 14.9% increase in FFO per share and 13.2% increase in Normalized FFO per share during the first quarter of 2022 compared to the same period of 2021.
• The Company reported a 7.8% increase in same store revenue for the first quarter of 2022 compared to the same period of 2021, driven by strong Physical Occupancy and significant growth in pricing power.
• The Company reported a 2.5% increase in same store expenses for the first quarter of 2022, reflecting the Company’s continued success in managing controllable expenses and modest growth in real estate tax expense.
• The Company reported same store Turnover of 8.7% for the first quarter of 2022, the lowest in the Company’s history, reflecting a continued trend of historically high resident retention.
• The Company acquired one operating property in the first quarter of 2022, a 172-unit apartment property in San Diego, for a purchase price of $113.0 million. The Company did not sell any properties during the first quarter of 2022, but sold a 354-unit apartment property in New York for approximately $265.7 million in April 2022.

First Quarter 2022 Results

The change in EPS for the quarter ended March 31, 2022 compared to the same period of 2021 is due primarily to higher depreciation expense, offset by the various adjustment items listed on page 25 of this release and the items described below.

The per share change in FFO for the quarter ended March 31, 2022 compared to the same period of 2021 is due primarily to the various adjustment items listed on page 25 of this release and the items described below.

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

	Positive/(Negative) Impact
	First Quarter 2022 vs. First Quarter 2021
Residential same store Net Operating Income (NOI)	$	0.10
Lease-Up NOI		0.01
2022 and 2021 transaction activity impact on NOI, net		0.01
Interest expense, net		(0.02	)
Other items		(0.01	)
Net	$	0.09

The Company has a glossary of defined terms and related reconciliations of Non-GAAP financial measures on pages 27 through 32 of this release. Reconciliations and definitions of FFO and Normalized FFO are provided on pages 6, 29 and 30 of this release.

First Quarter 2022 Same Store Results

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

	First Quarter 2022 vs. First Quarter 2021	First Quarter 2022 vs. Fourth Quarter 2021
Apartment Units	74,675	77,276
Physical Occupancy	96.4% vs. 95.0%	96.4% vs. 96.6%
Revenues	7.8%	0.9%
Expenses	2.5%	5.7%
NOI	10.7%	(1.5%)

On page 10 of this release, the Company has provided a breakout of Residential and Non-Residential same store results with definitions that can be found on page 31 of this release. Non-Residential operations account for approximately 3.8% of total revenues for the quarter ended March 31, 2022.

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

	First Quarter 2022 vs. First Quarter 2021			First Quarter 2022 vs. Fourth Quarter 2021
	% Change			% Change
Same Store Residential Revenues-
comparable period
Lease rates		4.2	%		1.9	%
Leasing Concessions		1.5	%		0.6	%
Vacancy gain (loss)		1.2	%		(0.2	%)
Bad Debt, Net ^(1)		0.6	%		(1.2	%)
Other ^(2)		0.3	%		0.0	%
Same Store Residential Revenues-
current period		7.8	%		1.1	%

(1)	Change in rental income due to bad debt write-offs and reserves, net of amounts (including governmental rental assistance payments) collected on previously written-off or reserved accounts.
(2)	Includes ancillary income, utility recoveries, early lease termination income, miscellaneous income and other items.

See page 11 for detail and reconciliations of Same Store Residential Revenues on a GAAP basis to Same Store Residential Revenues with Leasing Concessions on a cash basis.

As indicated in our March 2022 Investor Update¹, both quarter-over-quarter and sequential Same Store Residential Revenues in the first quarter of 2022 were impacted by higher than expected delinquency in Southern California caused by residents that were previously in good standing failing to pay their rent as they applied for funds under the California rental assistance program as it was expanded and extended into 2022. The Company continues to actively pursue payment and is seeing early signs of improved resident payment behavior in April 2022 with the expiration of the program’s eligibility period on March 31, 2022.

For the first quarter of 2022, better than expected lease rates partially offset this increased delinquency. For the full year of 2022, we expect these higher lease rates to more than fully offset the increased delinquency, which we now expect to moderate later in the second half of 2022.

¹ The March 2022 Investor Update is included in the Investor section on the Company’s website.

Residential Same Store Operating Statistics

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

	Q4 2021	Q1 2022	April 2022 (1)
Physical Occupancy ^(2)	96.4%	96.3%	96.6%
Percentage of Residents Renewing by quarter/month	61.2%	60.0%	60.0%
New Lease Change	10.6%	15.3%	17.6%
Renewal Rate Achieved	10.7%	11.9%	12.5%
Blended Rate	10.7%	13.3%	14.7%

(1)	April 2022 results are preliminary.
(2)	Physical Occupancy is as of month-end December for Q4 2021, month-end March for Q1 2022 and as of April 21st for April 2022.

Investment Activity and Portfolio Strategy

The Company continues to optimize its portfolio by allocating capital to desirable suburban locations within its established markets and through expansion into certain new markets that attract a renter demographic that values our exceptional product offering. In support of this strategy, the Company acquired a 172-unit apartment property in San Diego, built in 2020, during the first quarter of 2022 for $113.0 million at an Acquisition Cap Rate of 3.5%.

The Company did not sell any properties in the first quarter of 2022, but subsequent to the quarter, sold a 354-unit apartment property in New York, built in 2003, for approximately $265.7 million at a Disposition Yield of 3.3%.

Second Quarter 2022 Guidance

The Company has established guidance ranges for the second quarter of 2022 EPS, FFO per share and Normalized FFO per share as listed below:

	Q2 2022 Guidance
EPS	$1.00 to $1.04
FFO per share	$0.82 to $0.86
Normalized FFO per share	$0.82 to $0.86

The difference between the first quarter of 2022 actual EPS of $0.19 and the second quarter of 2022 EPS guidance midpoint of $1.02 is due primarily to higher expected same store NOI and property sale gains.

The difference between the first quarter of 2022 actual FFO and Normalized FFO of $0.77 per share and the second quarter of 2022 FFO and Normalized FFO guidance midpoint of $0.84 per share is due primarily to higher expected same store NOI.

About Equity Residential

Equity Residential is committed to creating communities where people thrive. The Company, a member of the S&P 500, is focused on the acquisition, development and management of residential properties located in and around dynamic cities that attract affluent long-term renters. Equity Residential owns or has investments in 311 properties consisting of 80,581 apartment units, with an established presence in Boston, New York, Washington, D.C., Seattle, San Francisco and Southern California, and an expanding presence in Denver, Atlanta, Dallas/Ft. Worth and Austin. For more information on Equity Residential, please visit our website at www.equityapartments.com.

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements and information within the meaning of the federal securities laws. These statements are based on current expectations, estimates, projections and assumptions made by management. While Equity Residential’s management believes the assumptions underlying its forward-looking statements are reasonable, such information is inherently subject to uncertainties and may involve certain risks, including, without limitation, changes in general market conditions, including the rate of job growth and cost of labor and construction material, the level of new multifamily construction and development, competition and government regulation. In addition, these forward-looking statements are subject to risks related to the COVID-19 pandemic, many of which are unknown, including the duration and severity of the pandemic, the extent of the adverse health impact on the general population and on our residents, customers and employees in particular, its impact on the employment rate and the economy and the corresponding impact on our residents’ and tenants’ ability to pay their rent on time or at all, the extent and impact of governmental responses, the rollout and effectiveness of vaccines and the impact of operational changes we have implemented and may implement in response to the pandemic. Other risks and uncertainties are described under the heading “Risk Factors” in our Annual Report on Form 10-K and subsequent periodic reports filed with the Securities and Exchange Commission (SEC) and available on our website, www.equityapartments.com. Many of these uncertainties and risks are difficult to predict and beyond management’s control. Forward-looking statements are not guarantees of future performance, results or events. Equity Residential assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

A live web cast of the Company’s conference call discussing these results will take place tomorrow, Wednesday, April 27, 2022 at 10:00 a.m. CT. Please visit the Investor section of the Company’s website at www.equityapartments.com for the webcast link.

Equity Residential Consolidated Statements of Operations (Amounts in thousands except per share data) (Unaudited)
	Quarter Ended March 31,
	2022			2021
REVENUES
Rental income	$	653,348		$	597,602
EXPENSES
Property and maintenance		124,874			117,054
Real estate taxes and insurance		100,688			103,470
Property management		30,747			26,130
General and administrative		17,238			15,383
Depreciation		229,961			199,962
Total expenses		503,508			461,999
Net gain (loss) on sales of real estate properties		(102	)		(43	)
Operating income		149,738			135,560
Interest and other income		3,528			216
Other expenses		(3,056	)		(4,110	)
Interest:
Expense incurred, net		(72,792	)		(67,358	)
Amortization of deferred financing costs		(2,077	)		(2,185	)
Income before income and other taxes, income (loss) from
investments in unconsolidated entities and net gain (loss)
on sales of land parcels		75,341			62,123
Income and other tax (expense) benefit		(282	)		(153	)
Income (loss) from investments in unconsolidated entities		(1,261	)		(1,611	)
Net gain (loss) on sales of land parcels		—			5
Net income		73,798			60,364
Net (income) loss attributable to Noncontrolling Interests:
Operating Partnership		(2,394	)		(2,143	)
Partially Owned Properties		(639	)		(682	)
Net income attributable to controlling interests		70,765			57,539
Preferred distributions		(772	)		(773	)
Net income available to Common Shares	$	69,993		$	56,766
Earnings per share – basic:
Net income available to Common Shares	$	0.19		$	0.15
Weighted average Common Shares outstanding		375,509			372,280
Earnings per share – diluted:
Net income available to Common Shares	$	0.19		$	0.15
Weighted average Common Shares outstanding		389,628			386,916
Distributions declared per Common Share outstanding	$	0.625		$	0.6025

Equity Residential Consolidated Statements of Funds From Operations and Normalized Funds From Operations (Amounts in thousands except per share data) (Unaudited)
	Quarter Ended March 31,
	2022			2021
Net income	$	73,798		$	60,364
Net (income) loss attributable to Noncontrolling Interests – Partially
Owned Properties		(639	)		(682	)
Preferred distributions		(772	)		(773	)
Net income available to Common Shares and Units		72,387			58,909
Adjustments:
Depreciation		229,961			199,962
Depreciation – Non-real estate additions		(1,052	)		(1,100	)
Depreciation – Partially Owned Properties		(893	)		(828	)
Depreciation – Unconsolidated Properties		620			617
Net (gain) loss on sales of unconsolidated entities - operating
assets		(9	)		(4	)
Net (gain) loss on sales of real estate properties		102			43
FFO available to Common Shares and Units		301,116			257,599
Adjustments (see note for additional detail):
Impairment – non-operating assets		—			—
Write-off of pursuit costs		1,463			1,331
Debt extinguishment and preferred share redemption (gains)
losses		—			264
Non-operating asset (gains) losses		(1,642	)		854
Other miscellaneous items		(371	)		2,242
Normalized FFO available to Common Shares and Units	$	300,566		$	262,290
FFO	$	301,888		$	258,372
Preferred distributions		(772	)		(773	)
FFO available to Common Shares and Units	$	301,116		$	257,599
FFO per share and Unit – basic	$	0.78		$	0.67
FFO per share and Unit – diluted	$	0.77		$	0.67
Normalized FFO	$	301,338		$	263,063
Preferred distributions		(772	)		(773	)
Normalized FFO available to Common Shares and Units	$	300,566		$	262,290
Normalized FFO per share and Unit – basic	$	0.78		$	0.68
Normalized FFO per share and Unit – diluted	$	0.77		$	0.68
Weighted average Common Shares and Units outstanding – basic		387,397			385,330
Weighted average Common Shares and Units outstanding – diluted		389,628			386,916

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

Equity Residential Consolidated Balance Sheets (Amounts in thousands except for share amounts) (Unaudited)
	March 31,			December 31,
	2022			2021
ASSETS
Land	$	5,836,951		$	5,814,790
Depreciable property		22,496,307			22,370,811
Projects under development		36,718			24,307
Land held for development		66,980			62,998
Investment in real estate		28,436,956			28,272,906
Accumulated depreciation		(8,578,131	)		(8,354,282	)
Investment in real estate, net		19,858,825			19,918,624
Investments in unconsolidated entities (1)		150,092			127,448
Cash and cash equivalents		41,140			123,832
Restricted deposits		70,560			236,404
Right-of-use assets		471,667			474,713
Other assets		237,953			288,220
Total assets	$	20,830,237		$	21,169,241
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	2,193,199		$	2,191,201
Notes, net		5,836,957			5,835,222
Line of credit and commercial paper		129,995			315,030
Accounts payable and accrued expenses		157,681			107,013
Accrued interest payable		56,876			69,510
Lease liabilities		311,293			312,335
Other liabilities		303,654			353,102
Security deposits		67,515			66,141
Distributions payable		242,574			233,502
Total liabilities		9,299,744			9,483,056
Commitments and contingencies
Redeemable Noncontrolling Interests – Operating Partnership		495,760			498,977
Equity:
Shareholders’ equity:
Preferred Shares of beneficial interest, $0.01 par value;
100,000,000 shares authorized; 745,600 shares issued and
outstanding as of March 31, 2022 and December 31, 2021		37,280			37,280
Common Shares of beneficial interest, $0.01 par value;
1,000,000,000 shares authorized; 375,974,070 shares issued
and outstanding as of March 31, 2022 and 375,527,195
shares issued and outstanding as of December 31, 2021		3,760			3,755
Paid in capital		9,142,969			9,121,122
Retained earnings		1,661,705			1,827,063
Accumulated other comprehensive income (loss)		(31,847	)		(34,272	)
Total shareholders’ equity		10,813,867			10,954,948
Noncontrolling Interests:
Operating Partnership		217,451			214,094
Partially Owned Properties		3,415			18,166
Total Noncontrolling Interests		220,866			232,260
Total equity		11,034,733			11,187,208
Total liabilities and equity	$	20,830,237		$	21,169,241

(1)	Includes $89.7 million and $72.5 million in unconsolidated development projects as of March 31, 2022 and December 31, 2021, respectively. See Development and Lease-Up Projects for additional details on unconsolidated development projects.

Equity Residential Portfolio Summary As of March 31, 2022

					% of Stabilized			Average
			Apartment		Budgeted			Rental
Markets/Metro Areas	Properties		Units		NOI			Rate
Established Markets:
Los Angeles		66		15,259		18.5	%	$	2,584
Orange County		13		4,028		5.3	%		2,450
San Diego		12		2,878		4.0	%		2,697
Subtotal – Southern California		91		22,165		27.8	%		2,575
San Francisco		44		11,830		16.0	%		3,013
Washington DC		48		14,851		15.5	%		2,380
New York		36		9,345		13.7	%		3,741
Boston		27		7,170		11.3	%		3,131
Seattle		46		9,525		11.0	%		2,388
Subtotal – Established Markets		292		74,886		95.3	%		2,781
Expansion Markets:
Denver		8		2,498		2.6	%		2,228
Atlanta		4		1,215		0.9	%		1,952
Dallas/Ft. Worth		4		1,241		0.8	%		1,837
Austin		3		741		0.4	%		1,723
Subtotal – Expansion Markets		19		5,695		4.7	%		2,020
Total		311		80,581		100.0	%	$	2,728

	Properties		Apartment Units
Wholly Owned Properties		295		77,035
Partially Owned Properties – Consolidated		16		3,546
		311		80,581

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

Equity Residential

Portfolio Rollforward Q1 2022 ($ in thousands)
		Properties		Apartment Units		Purchase Price		Acquisition Cap Rate
	12/31/2021		310		80,407
Acquisitions:
Consolidated Rental Properties			1		172	$	113,000		3.5	%
Configuration Changes			—		2
	3/31/2022		311		80,581

Equity Residential

First Quarter 2022 vs. First Quarter 2021 Same Store Results/Statistics Including 74,675 Same Store Apartment Units $ in thousands (except for Average Rental Rate)
First Quarter 2022												First Quarter 2021
	Residential				% Change	Non- Residential		% Change	Total		% Change		Residential			Non- Residential		Total
Revenues	$	595,325		(1)	7.8%	$	23,032	6.4%	$	618,357	7.8%	Revenues	$	552,111		$	21,641	$	573,752
Expenses	$	203,752			2.5%	$	6,239	2.2%	$	209,991	2.5%	Expenses	$	198,784		$	6,106	$	204,890
NOI	$	391,573			10.8%	$	16,793	8.1%	$	408,366	10.7%	NOI	$	353,327		$	15,535	$	368,862
Average Rental Rate	$	2,757			6.2%							Average Rental Rate	$	2,597
Physical Occupancy		96.4	%		1.4%							Physical Occupancy		95.0	%
Turnover		8.7	%		(1.3%)							Turnover		10.0	%

First Quarter 2022 vs. Fourth Quarter 2021 Same Store Results/Statistics Including 77,276 Same Store Apartment Units $ in thousands (except for Average Rental Rate)
First Quarter 2022												Fourth Quarter 2021
	Residential				% Change	Non- Residential		% Change	Total		% Change		Residential			Non- Residential		Total
Revenues	$	610,398		(1)	1.1%	$	23,243	(4.0%)	$	633,641	0.9%	Revenues	$	604,020		$	24,219	$	628,239
Expenses	$	209,841			5.9%	$	6,308	0.0%	$	216,149	5.7%	Expenses	$	198,153		$	6,308	$	204,461
NOI	$	400,557			(1.3%)	$	16,935	(5.4%)	$	417,492	(1.5%)	NOI	$	405,867		$	17,911	$	423,778
Average Rental Rate	$	2,732			1.2%							Average Rental Rate	$	2,699
Physical Occupancy		96.4	%		(0.2%)							Physical Occupancy		96.6	%
Turnover		8.8	%		(0.7%)							Turnover		9.5	%

(1)	See page 11 for Same Store Residential Revenues with Leasing Concessions reflected on a cash basis. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional detail.

Equity Residential

Same Store Residential Revenues – GAAP to Cash Basis (1) $ in thousands
	First Quarter 2022 vs. First Quarter 2021						First Quarter 2022 vs. Fourth Quarter 2021
	74,675 Same Store Apartment Units						77,276 Same Store Apartment Units
	Q1 2022			Q1 2021			Q1 2022			Q4 2021
Same Store Residential Revenues (GAAP Basis)	$	595,325		$	552,111		$	610,398		$	604,020
Leasing Concessions amortized		3,677			11,726			3,881			7,306
Leasing Concessions granted		(1,350	)		(17,058	)		(1,440	)		(570	)
Same Store Residential Revenues with Leasing
Concessions on a cash basis	$	597,652		$	546,779		$	612,839		$	610,756
% change - GAAP revenue		7.8	%					1.1	%
% change - cash revenue		9.3	%					0.3	%

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

Same Store Net Operating Income By Quarter Including 74,675 Same Store Apartment Units $ in thousands
	Q1 2022		Q4 2021		Q3 2021		Q2 2021		Q1 2021
Same store revenues	$	618,357	$	613,703	$	595,207	$	573,916	$	573,752
Same store expenses		209,991		199,218		204,865		197,700		204,890
Same store NOI (includes Residential and Non-Residential)	$	408,366	$	414,485	$	390,342	$	376,216	$	368,862

Equity Residential

Same Store Resident/Tenant Accounts Receivable Balances Including 74,675 Same Store Apartment Units $ in thousands
	Residential							Non-Residential
Balance Sheet (Other assets):	March 31, 2022				December 31, 2021			March 31, 2022			December 31, 2021
Resident/tenant accounts receivable balances	$	42,784			$	37,344		$	3,631		$	3,192
Allowance for doubtful accounts		(38,337	)			(32,665	)		(2,379	)		(2,365	)
Net receivable balances	$	4,447		(1)	$	4,679		$	1,252		$	827
Straight-line receivable balances	$	2,495		(2)	$	4,822		$	12,641		$	12,684

(1)

The Company held same store Residential security deposits approximating 55.6% of the net receivable balance at March 31, 2022.

(2)

Total same store Residential Leasing Concessions granted in the first quarter of 2022 were approximately $1.4 million, higher than the fourth quarter of 2021 due to concession usage in Seattle. The straight-line receivable balance of $2.5 million reflects Residential Leasing Concessions that the Company expects will be primarily recognized as a reduction of rental revenues in the remainder of 2022 and the first quarter of 2023.

Same Store Residential Bad Debt Including 74,675 Same Store Apartment Units $ in thousands
Income Statement (Rental income):	Q1 2022			Q4 2021			Q1 2021
Bad Debt, Net (1)	$	9,677		$	1,612		$	13,158
% of Same Store Residential Revenues		1.6	%		0.3	%		2.4	%

(1)	Bad Debt, Net benefited from additional resident payments due to governmental rental assistance programs of approximately $9.6 million and $16.3 million during the first quarter of 2022 and fourth quarter of 2021, respectively.

Equity Residential First Quarter 2022 vs. First Quarter 2021 Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Year's Quarter
Markets/Metro Areas	Apartment Units		Q1 2022 % of Actual NOI			Q1 2022 Average Rental Rate		Q1 2022 Weighted Average Physical Occupancy %			Q1 2022 Turnover			Revenues				Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover
Los Angeles		15,259		19.9	%	$	2,584		96.7	%		8.3	%		8.6	%			2.8	%		11.6	%		7.6	%		0.9	%		(1.6	%)
Orange County		4,028		5.7	%		2,450		97.1	%		6.3	%		11.3	%			1.7	%		14.4	%		11.1	%		0.1	%		(1.5	%)
San Diego		2,706		4.1	%		2,662		96.9	%		8.9	%		11.7	%			6.4	%		13.5	%		12.1	%		(0.3	%)		(1.6	%)
Subtotal – Southern California		21,993		29.7	%		2,569		96.8	%		8.0	%		9.5	%			3.0	%		12.4	%		8.8	%		0.6	%		(1.6	%)
San Francisco		11,630		17.7	%		3,004		96.4	%		9.5	%		6.0	%			3.6	%		7.1	%		2.9	%		2.8	%		(2.2	%)
Washington DC		14,322		16.6	%		2,371		96.9	%		8.2	%		3.0	%			4.0	%		2.5	%		2.0	%		1.0	%		(1.4	%)
New York		9,345		13.0	%		3,741		97.0	%		8.2	%		13.6	%			2.4	%		27.6	%		6.8	%		5.7	%		(0.1	%)
Seattle		9,331		11.4	%		2,385		94.6	%		11.5	%		5.2	%			(5.4	%)		10.3	%		6.2	%		(1.0	%)		0.3	%
Boston		6,430		9.7	%		3,054		95.9	%		7.6	%		7.7	%			5.0	%		9.0	%		7.0	%		0.6	%		(1.3	%)
Denver		1,624		1.9	%		2,207		97.4	%		10.5	%		12.8	%			6.1	%		15.7	%		11.2	%		1.3	%		(1.8	%)
Total		74,675		100.0	%	$	2,757		96.4	%		8.7	%		7.8	%	(1)		2.5	%		10.8	%		6.2	%		1.4	%		(1.3	%)

(1)	With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues increased 9.3% in the first quarter of 2022 compared to the first quarter of 2021. See page 11 for additional detail and reconciliations.
Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.2% of total revenues for the quarter ended March 31, 2022.

Equity Residential First Quarter 2022 vs. Fourth Quarter 2021 Same Store Residential Results/Statistics by Market

														Increase (Decrease) from Prior Quarter
Markets/Metro Areas	Apartment Units		Q1 2022 % of Actual NOI			Q1 2022 Average Rental Rate		Q1 2022 Weighted Average Physical Occupancy %			Q1 2022 Turnover			Revenues				Expenses			NOI			Average Rental Rate			Physical Occupancy			Turnover
Los Angeles		15,259		19.4	%	$	2,584		96.7	%		8.3	%		(3.6	%)			6.3	%		(7.6	%)		(3.3	%)		(0.2	%)		(1.0	%)
Orange County		4,028		5.6	%		2,450		97.1	%		6.3	%		0.4	%			5.0	%		(0.9	%)		1.0	%		(0.6	%)		(1.1	%)
San Diego		2,706		4.0	%		2,662		96.9	%		8.9	%		2.2	%			9.5	%		0.1	%		2.5	%		(0.3	%)		0.3	%
Subtotal – Southern California		21,993		29.0	%		2,569		96.8	%		8.0	%		(2.2	%)			6.4	%		(5.3	%)		(1.9	%)		(0.3	%)		(0.9	%)
San Francisco		11,630		17.3	%		3,004		96.4	%		9.5	%		2.0	%			7.8	%		(0.5	%)		2.0	%		0.0	%		(1.2	%)
Washington DC		14,535		16.5	%		2,367		96.9	%		8.2	%		0.8	%			5.6	%		(1.5	%)		1.0	%		(0.1	%)		(0.8	%)
New York		9,345		12.6	%		3,741		97.0	%		8.2	%		3.6	%			4.5	%		2.7	%		4.0	%		(0.4	%)		1.3	%
Seattle		9,524		11.4	%		2,388		94.6	%		11.4	%		2.1	%			(1.0	%)		3.4	%		2.4	%		(0.4	%)		0.0	%
Boston		6,700		9.9	%		3,041		95.8	%		7.6	%		2.9	%			9.1	%		0.2	%		3.0	%		0.0	%		(1.7	%)
Denver		1,904		2.2	%		2,205		97.4	%		10.9	%		3.1	%			6.3	%		1.8	%		2.1	%		1.0	%		(3.8	%)
Other Expansion Markets		1,645		1.1	%		1,807		96.2	%		12.6	%		4.5	%			27.4	%		(9.9	%)		4.2	%		0.4	%		0.7	%
Total		77,276		100.0	%	$	2,732		96.4	%		8.8	%		1.1	%	(1)		5.9	%		(1.3	%)		1.2	%		(0.2	%)		(0.7	%)

(1)	With Leasing Concessions reflected on a cash basis, Same Store Residential Revenues increased 0.3% in the first quarter of 2022 compared to the fourth quarter of 2021. See page 11 for additional detail and reconciliations.
Note: The above table reflects Residential same store results only. Residential operations account for approximately 96.2% of total revenues for the quarter ended March 31, 2022.

Equity Residential

Same Store Residential Net Effective Lease Pricing Statistics For 74,675 Same Store Apartment Units
	New Lease Change (1)						Renewal Rate Achieved (1)						Blended Rate (1)
Markets/Metro Areas	Q1 2022			Q4 2021			Q1 2022			Q4 2021			Q1 2022			Q4 2021
Southern California		14.6	%		13.4	%		7.2	%		7.1	%		10.0	%		9.4	%
San Francisco		12.6	%		3.6	%		12.6	%		12.4	%		12.6	%		8.1	%
Washington DC		9.0	%		6.0	%		7.0	%		6.8	%		7.8	%		6.5	%
New York		29.7	%		20.2	%		21.0	%		14.5	%		24.4	%		16.6	%
Seattle		13.0	%		11.1	%		16.4	%		17.1	%		14.6	%		14.2	%
Boston		13.1	%		12.6	%		15.6	%		14.6	%		14.4	%		13.8	%
Denver		11.0	%		12.4	%		11.8	%		12.8	%		11.3	%		12.6	%
Total		15.3	%		10.6	%		11.9	%		10.7	%		13.3	%		10.7	%

(1)	See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for definitions. See page 3 for April 2022 preliminary data.

Equity Residential

First Quarter 2022 vs. First Quarter 2021 Total Same Store Operating Expenses Including 74,675 Same Store Apartment Units $ in thousands
	Q1 2022		Q1 2021		$ Change (1)			% Change			% of Q1 2022 Operating Expenses
Real estate taxes	$	87,550	$	87,086	$	464			0.5	%		41.7	%
On-site payroll		40,488		41,917		(1,429	)		(3.4	%)		19.3	%
Utilities		34,110		30,403		3,707			12.2	%		16.2	%
Repairs and maintenance		25,380		23,868		1,512			6.3	%		12.1	%
Insurance		7,233		6,667		566			8.5	%		3.4	%
Leasing and advertising		2,251		2,744		(493	)		(18.0	%)		1.1	%
Other on-site operating expenses		12,979		12,205		774			6.3	%		6.2	%
Total Same Store Operating Expenses (2) (includes Residential and Non-Residential)	$	209,991	$	204,890	$	5,101			2.5	%		100.0	%

(1)	The quarter-over-quarter changes were primarily driven by the following factors:
	Real estate taxes – Increase due to modest escalation in rates and assessed values.
	On-site payroll – Improved sales and service staff utilization from various technology initiatives and higher than usual staffing vacancies during the current period.
	Utilities – Increase from gas and electric primarily driven by higher commodity prices.
	Repairs and maintenance – Increase primarily driven by volume and timing of maintenance repairs along with increases in minimum wage on contracted services.
	Insurance – Increase due to higher premiums on property insurance renewal due to challenging conditions in the insurance market.
	Leasing and advertising – Decrease due primarily to reduction in use of outside brokers.
	Other on-site operating expenses – Increase driven primarily by higher ground lease related expenses.
(2)	See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.

Equity Residential

Debt Summary as of March 31, 2022 ($ in thousands)
	Debt Balances (1)		% of Total			Weighted Average Rates (1)			Weighted Average Maturities (years)
Secured	$	2,193,199		26.9	%		3.33	%		4.5
Unsecured		5,966,952		73.1	%		3.48	%		9.5
Total	$	8,160,151		100.0	%		3.44	%		8.1
Fixed Rate Debt:
Secured – Conventional	$	1,895,251		23.2	%		3.69	%		3.7
Unsecured – Public		5,836,957		71.5	%		3.61	%		9.7
Fixed Rate Debt		7,732,208		94.7	%		3.63	%		8.2
Floating Rate Debt:
Secured – Conventional		62,767		0.8	%		2.40	%		0.2
Secured – Tax Exempt		235,181		2.9	%		0.69	%		12.2
Unsecured – Revolving Credit Facility		—		—			—			2.6
Unsecured – Commercial Paper Program (2)		129,995		1.6	%		0.35	%		—
Floating Rate Debt		427,943		5.3	%		0.72	%		6.9
Total	$	8,160,151		100.0	%		3.44	%		8.1

(1)	See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.
(2)	At March 31, 2022, the weighted average maturity of commercial paper outstanding was 3 days. The weighted average amount outstanding for the quarter ended March 31, 2022 was approximately $260.9 million.
Note: The Company capitalized interest of approximately $1.0 million and $3.8 million during the quarters ended March 31, 2022 and 2021, respectively.

Equity Residential

Debt Maturity Schedule as of March 31, 2022 ($ in thousands)
Year	Fixed Rate			Floating Rate				Total			% of Total			Weighted Average Coupons on Fixed Rate Debt (1)			Weighted Average Coupons on Total Debt (1)
2022	$	262,253		$	194,332		(2)	$	456,585			5.5	%		3.25	%		2.40	%
2023		1,325,588			3,500				1,329,088			16.1	%		3.74	%		3.73	%
2024		—			6,100				6,100			0.1	%	N/A				0.46	%
2025		450,000			8,340				458,340			5.6	%		3.38	%		3.32	%
2026		592,025			9,000				601,025			7.3	%		3.58	%		3.54	%
2027		400,000			9,800				409,800			5.0	%		3.25	%		3.18	%
2028		900,000			10,700				910,700			11.1	%		3.79	%		3.75	%
2029		888,120			11,500				899,620			10.9	%		3.30	%		3.27	%
2030		1,095,000			12,600				1,107,600			13.4	%		2.55	%		2.52	%
2031		528,500			39,700				568,200			6.9	%		1.94	%		1.84	%
2032+		1,350,850			138,900				1,489,750			18.1	%		4.39	%		4.02	%
Subtotal		7,792,336			444,472				8,236,808			100.0	%		3.44	%		3.30	%
Deferred Financing Costs and Unamortized (Discount)		(60,128	)		(16,529	)			(76,657	)	N/A			N/A			N/A
Total	$	7,732,208		$	427,943			$	8,160,151			100.0	%		3.44	%		3.30	%

(1)	See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for additional details.
(2)	Includes $130.0 million in principal outstanding on the Company’s commercial paper program.

Equity Residential

Selected Unsecured Public Debt Covenants
	March 31,	December 31,
	2022	2021
Debt to Adjusted Total Assets (not to exceed 60%)	29.6%	30.3%
Secured Debt to Adjusted Total Assets (not to exceed 40%)	8.7%	8.7%
Consolidated Income Available for Debt Service to
Maximum Annual Service Charges
(must be at least 1.5 to 1)	5.24	5.05
Total Unencumbered Assets to Unsecured Debt
(must be at least 125%)	458.1%	441.0%

Note: These selected covenants represent the most restrictive financial covenants relating to ERP Operating Limited Partnership's ("ERPOP") outstanding public debt securities. Equity Residential is the general partner of ERPOP.

Selected Credit Ratios
	March 31,	December 31,
	2022	2021
Total debt to Normalized EBITDAre	5.42x	5.71x
Net debt to Normalized EBITDAre	5.38x	5.61x
Unencumbered NOI as a % of total NOI	87.5%	87.7%

Note: See Normalized EBITDAre Reconciliations for detail.

Equity Residential

Capital Structure as of March 31, 2022 (Amounts in thousands except for share/unit and per share amounts)
Secured Debt					$	2,193,199	26.9	%
Unsecured Debt						5,966,952	73.1	%
Total Debt						8,160,151	100.0	%	18.9	%
Common Shares (includes Restricted Shares)		375,974,070	96.7	%
Units (includes OP Units and Restricted Units)		12,872,604	3.3	%
Total Shares and Units		388,846,674	100.0	%
Common Share Price at March 31, 2022	$	89.92
						34,965,093	99.9	%
Perpetual Preferred Equity (see below)						37,280	0.1	%
Total Equity						35,002,373	100.0	%	81.1	%
Total Market Capitalization					$	43,162,524			100.0	%

Perpetual Preferred Equity as of March 31, 2022 (Amounts in thousands except for share and per share amounts)
Series	Call Date	Outstanding Shares		Liquidation Value		Annual Dividend Per Share		Annual Dividend Amount
Preferred Shares:
8.29% Series K	12/10/26		745,600	$	37,280	$	4.145	$	3,091

Equity Residential Common Share and Unit Weighted Average Amounts Outstanding

	Q1 2022		Q1 2021
Weighted Average Amounts Outstanding for Net Income Purposes:
Common Shares - basic		375,508,944		372,279,711
Shares issuable from assumed conversion/vesting of:
- OP Units		11,888,041		13,050,142
- long-term compensation shares/units		2,089,783		1,586,077
- ATM forward sales		141,136		—
Total Common Shares and Units - diluted		389,627,904		386,915,930
Weighted Average Amounts Outstanding for FFO and Normalized FFO Purposes:
Common Shares - basic		375,508,944		372,279,711
OP Units - basic		11,888,041		13,050,142
Total Common Shares and OP Units - basic		387,396,985		385,329,853
Shares issuable from assumed conversion/vesting of:
- long-term compensation shares/units		2,089,783		1,586,077
- ATM forward sales		141,136		—
Total Common Shares and Units - diluted		389,627,904		386,915,930
Period Ending Amounts Outstanding:
Common Shares (includes Restricted Shares)		375,974,070		372,917,413
Units (includes OP Units and Restricted Units)		12,872,604		14,042,374
Total Shares and Units		388,846,674		386,959,787

Equity Residential Development and Lease-Up Projects as of March 31, 2022 (Amounts in thousands except for project and apartment unit amounts)

												Estimated/Actual
Projects	Location	Ownership Percentage	No. of Apartment Units		Total Budgeted Capital Cost		Total Book Value to Date		Total Debt (A)		Percentage Completed	Start Date	Initial Occupancy	Completion Date	Stabilization Date	Percentage Leased / Occupied
CONSOLIDATED:
Projects Under Development:
9th and W (B)	Washington, DC	92%		312	$	108,027	$	36,718	$	—	30%	Q3 2021	Q2 2023	Q3 2023	Q3 2024	– / –
Projects Under Development - Consolidated				312		108,027		36,718		—
Projects Completed Not Stabilized:
The Edge (fka 4885 Edgemoor Lane) (B)	Bethesda, MD	100%		154		73,771		73,055		—	100%	Q3 2019	Q3 2021	Q3 2021	Q3 2022	78% / 69%
Aero Apartments	Alameda, CA	90%		200		117,794		113,659		64,274	100%	Q3 2019	Q2 2021	Q2 2021	Q3 2022	85% / 83%
Alcott Apartments (fka West End Tower)	Boston, MA	100%		470		409,749		402,873		—	99%	Q2 2018	Q3 2021	Q4 2021	Q1 2023	69% / 63%
Projects Completed Not Stabilized - Consolidated				824		601,314		589,587		64,274
UNCONSOLIDATED: (C)
Projects Under Development:
Alloy Sunnyside	Denver, CO	80%		209		66,004		20,437		—	20%	Q3 2021	Q2 2023	Q4 2023	Q3 2024	– / –
Alexan Harrison	Harrison, NY	62%		450		198,664		60,447		—	9%	Q3 2021	Q3 2023	Q2 2024	Q4 2025	– / –
Solana Beeler Park	Denver, CO	90%		270		79,956		16,242		—	5%	Q4 2021	Q4 2023	Q2 2024	Q1 2025	– / –
Projects Under Development - Unconsolidated				929		344,624		97,126		—
Total Development Projects - Consolidated				1,136		709,341		626,305		64,274
Total Development Projects - Unconsolidated				929		344,624		97,126		—
Total Development Projects				2,065	$	1,053,965	$	723,431	$	64,274

NOI CONTRIBUTION FROM DEVELOPMENT PROJECTS	Total Budgeted Capital Cost		Q1 2022 NOI
Projects Under Development - Consolidated	$	108,027	$	—
Projects Completed Not Stabilized - Consolidated		601,314		2,390
Projects Under Development - Unconsolidated		344,624		—
	$	1,053,965	$	2,390

(A)	All non-wholly owned projects are being partially funded with project-specific construction loans. None of these loans are recourse to the Company. As of March 31, 2022, no material draws have been made on the construction loans for 9th and W, Alloy Sunnyside, Alexan Harrison or Solana Beeler Park.
(B)	The land parcels under these projects are subject to long-term ground leases.
(C)	The Company has six unconsolidated development joint ventures as of March 31, 2022. In addition to the three projects disclosed in “Projects Under Development – Unconsolidated” above, the Company has three additional unconsolidated joint venture projects that have not yet started but are expected to do so in 2022 and eventually deliver approximately 1,005 apartment units.

Equity Residential Capital Expenditures to Real Estate For the Quarter Ended March 31, 2022 (Amounts in thousands except for apartment unit and per apartment unit amounts)

	Same Store Properties		Non-Same Store Properties/Other		Total		Same Store Avg. Per Apartment Unit
Total Apartment Units		74,675		5,906		80,581
Building Improvements	$	17,380	$	2,104	$	19,484	$	233
Renovation Expenditures (1)		8,336		—		8,336		112
Replacements		7,284		181		7,465		97
Capital Expenditures to Real Estate (2)	$	33,000	$	2,285	$	35,285	$	442

(1)	Renovation Expenditures on 317 same store apartment units for the quarter ended March 31, 2022 approximated $26,295 per apartment unit renovated.
(2)	See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Termsfor additional details.

Equity Residential Normalized EBITDAre Reconciliations (Amounts in thousands)

	Trailing Twelve Months						2022			2021
	March 31, 2022			December 31, 2021			Q1			Q4			Q3			Q2			Q1
Net income	$	1,410,148		$	1,396,714		$	73,798		$	560,978		$	447,332		$	328,040		$	60,364
Interest expense incurred, net		277,907			272,473			72,792			69,740			68,251			67,124			67,358
Amortization of deferred financing costs		8,629			8,737			2,077			2,565			2,048			1,939			2,185
Amortization of above/below market lease intangibles		4,327			4,309			1,116			1,116			1,116			979			1,098
Depreciation		868,271			838,272			229,961			222,240			215,397			200,673			199,962
Income and other tax expense (benefit)		1,044			915			282			236			284			242			153
EBITDA		2,570,326			2,521,420			380,026			856,875			734,428			598,997			331,120
Net (gain) loss on sales of real estate properties		(1,072,124	)		(1,072,183	)		102			(484,560	)		(363,928	)		(223,738	)		43
Net (gain) loss on sales of unconsolidated entities - operating assets		(1,309	)		(1,304	)		(9	)		(1,300	)		—			—			(4	)
EBITDAre		1,496,893			1,447,933			380,119			371,015			370,500			375,259			331,159
Impairment – non-operating assets		16,769			16,769			—			16,769			—			—			—
Write-off of pursuit costs (other expenses)		6,658			6,526			1,463			2,969			910			1,316			1,331
(Income) loss from investments in unconsolidated entities - operations		4,357			4,702			1,270			1,670			1,156			261			1,615
Net (gain) loss on sales of land parcels		—			(5	)		—			—			—			—			(5	)
Realized (gain) loss on investment securities (interest and other income)		(25,631	)		(23,432	)		(2,066	)		—			—			(23,565	)		133
Insurance/litigation settlement or reserve income (interest and other income)		(2,317	)		(1,090	)		(1,227	)		(20	)		(742	)		(328	)		—
Insurance/litigation/environmental settlement or reserve expense (other expenses)		8,103			9,565			750			4,482			1,871			1,000			2,212
Advocacy contributions (other expenses)		853			708			175			201			50			427			30
Other		(276	)		(207	)		(69	)		(207	)		—			—			—
Normalized EBITDAre	$	1,505,409		$	1,461,469		$	380,415		$	396,879		$	373,745		$	354,370		$	336,475
Balance Sheet Items:	March 31, 2022			December 31, 2021
Total debt	$	8,160,151		$	8,341,453
Cash and cash equivalents		(41,140	)		(123,832	)
Mortgage principal reserves/sinking funds		(20,409	)		(19,104	)
Net debt	$	8,098,602		$	8,198,517

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

Equity Residential

Adjustments from FFO to Normalized FFO

(Amounts in thousands)

	Quarter Ended March 31,
	2022			2021			Variance
Impairment – non-operating assets	$	—		$	—		$	—
Write-off of pursuit costs (other expenses)		1,463			1,331			132
Write-off of unamortized deferred financing costs (interest expense)		—			264			(264	)
Debt extinguishment and preferred share redemption (gains) losses		—			264			(264	)
Net (gain) loss on sales of land parcels		—			(5	)		5
(Income) loss from investments in unconsolidated entities ─ non-operating assets		424			726			(302	)
Realized (gain) loss on investment securities (interest and other income)		(2,066	)		133			(2,199	)
Non-operating asset (gains) losses		(1,642	)		854			(2,496	)
Insurance/litigation settlement or reserve income (interest and other income)		(1,227	)		—			(1,227	)
Insurance/litigation/environmental settlement or reserve expense (other expenses)		750			2,212			(1,462	)
Advocacy contributions (other expenses)		175			30			145
Other		(69	)		—			(69	)
Other miscellaneous items		(371	)		2,242			(2,613	)
Adjustments from FFO to Normalized FFO	$	(550	)	$	4,691		$	(5,241	)

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

Equity Residential Normalized FFO Guidance and Assumptions

The guidance/projections provided below are based on current expectations and are forward-looking. All guidance is given on a Normalized FFO basis. Therefore, certain items excluded from Normalized FFO, such as debt extinguishment costs/prepayment penalties and the write-off of pursuit costs, are not included in the estimates provided on this page. See Additional Reconciliations and Definitions of Non-GAAP Financial Measures and Other Terms for the definitions of non-GAAP financial measures and other terms as well as the reconciliations of EPS to FFO per share and Normalized FFO per share.

	Q2 2022	Full Year 2022
		(no change from previous Full Year 2022)
2022 Normalized FFO Guidance (per share diluted)
Expected Normalized FFO Per Share	$0.82 to $0.86	$3.40 to $3.50
2022 Same Store Assumptions (includes Residential and Non-Residential)
Physical Occupancy		96.5%
Revenue change		8.0% to 10.0%
Expense change		2.5% to 3.5%
NOI change (1)		11.0% to 13.0%
2022 Transaction Assumptions
Consolidated rental acquisitions		$2.0B
Consolidated rental dispositions		$2.0B
Transaction Accretion (Dilution)		(25 basis points)
2022 Debt Assumptions
Weighted average debt outstanding		$8.275B to $8.475B
Interest expense, net (on a Normalized FFO basis)		$285.0M to $291.0M
Capitalized interest		$4.5M to $8.5M
2022 Capital Expenditures to Real Estate Assumptions for Same Store Properties (2)
Capital Expenditures to Real Estate for Same Store Properties		$200.0M
Capital Expenditures to Real Estate per Same Store Apartment Unit		$2,700
2022 Other Guidance Assumptions
Property management expense		$113.0M to $116.0M
General and administrative expense		$55.0M to $59.0M
Debt offerings		No amounts budgeted
Weighted average Common Shares and Units - Diluted		390.9M

(1)	Approximately 25 basis point change in NOI percentage = $0.01 per share change in EPS/FFO per share/Normalized FFO per share.
(2)	During 2022, the Company expects to spend approximately $38.5 million for apartment unit Renovation Expenditures on approximately 1,750 same store apartment units at an average cost of approximately $22,000 per apartment unit renovated, which is included in the Capital Expenditures to Real Estate assumptions noted above.

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

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

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

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

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

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

Capital Expenditures to Real Estate:

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

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

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

Debt Balances:

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

Revolving Credit Facility – The Company’s $2.5 billion unsecured revolving credit facility matures November 1, 2024. The interest rate on advances under the facility will generally be LIBOR plus a spread (currently 0.775%), or based on bids received from the lending group, and an annual facility fee (currently 0.125%). Both the spread and the facility fee are dependent on the Company’s senior unsecured credit rating. In addition, the Company limits its utilization of the facility in order to maintain liquidity to support its $1.0 billion commercial paper program along with certain other obligations. The following table presents the availability on the Company’s unsecured revolving credit facility:

	March 31, 2022
Unsecured revolving credit facility commitment	$	2,500,000
Commercial paper balance outstanding		(130,000	)
Unsecured revolving credit facility balance outstanding		—
Other restricted amounts		(3,507	)
Unsecured revolving credit facility availability	$	2,366,493

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

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

Disposition Yield – NOI that the Company anticipates giving up in the next 12 months less an estimate of property management costs/management fees allocated to the project (generally ranging from 2.0% to 4.0% of revenues depending on the size and income streams of the asset) and less an estimate for in-the-unit replacement capital expenditures (generally ranging from $100-$450 per apartment unit depending on the age and condition of the asset) divided by the gross sales price of the asset. The weighted average Disposition Yield for sold properties is weighted based on the projected NOI streams and the relative sales price for each respective property.

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

EBITDA for Real Estate and Normalized EBITDA for Real Estate:

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

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

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

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

	Quarter Ended March 31, 2022
Net Gain (Loss) on Sales of Real Estate Properties	$	(102	)
Accumulated Depreciation Gain		—
Economic Gain (Loss)	$	(102	)

FFO and Normalized FFO:

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

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

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

• the impact of any expenses relating to non-operating asset impairment;

• pursuit cost write-offs;

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

• gains and losses from non-operating assets; and

• other miscellaneous items.

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

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

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

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

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

	Actual		Actual		Expected	Expected
	Q1 2022		Q1 2021		Q2 2022	2022
	Per Share		Per Share		Per Share	Per Share
EPS – Diluted	$	0.19	$	0.15	$1.00 to $1.04	$4.18 to $4.28
Depreciation expense		0.58		0.52	0.57	2.21
Net (gain) loss on sales		—		—	(0.75)	(3.03)
Impairment – operating assets		—		—	—	—
FFO per share – Diluted		0.77		0.67	0.82 to 0.86	3.36 to 3.46
Impairment – non-operating assets		—		—	—	—
Write-off of pursuit costs		—		—	—	0.02
Debt extinguishment and preferred share redemption (gains) losses		—		—	—	—
Non-operating asset (gains) losses		—		—	—	—
Other miscellaneous items		—		0.01	—	0.02
Normalized FFO per share – Diluted	$	0.77	$	0.68	$0.82 to $0.86	$3.40 to $3.50

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

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

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

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

	Quarter Ended March 31,
	2022		2021
Operating income	$	149,738	$	135,560
Adjustments:
Property management		30,747		26,130
General and administrative		17,238		15,383
Depreciation		229,961		199,962
Net (gain) loss on sales of real estate
properties		102		43
Total NOI	$	427,786	$	377,078
Rental income:
Same store	$	618,357	$	573,752
Non-same store/other		34,991		23,850
Total rental income		653,348		597,602
Operating expenses:
Same store		209,991		204,890
Non-same store/other		15,571		15,634
Total operating expenses		225,562		220,524
NOI:
Same store		408,366		368,862
Non-same store/other		19,420		8,216
Total NOI	$	427,786	$	377,078

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

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

Non-Same Store Properties – For annual comparisons, primarily includes all properties acquired during 2021 and 2022, plus any properties in lease-up and not stabilized as of January 1, 2021.

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

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

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

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

Residential – Consists of multifamily apartment revenues and expenses.

Same Store Operating Expenses:

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

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

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

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

Same Store Properties – For annual comparisons, primarily includes all properties acquired or completed that are stabilized prior to January 1, 2021, less properties subsequently sold. Properties are included in Same Store when they are stabilized for all of the current and comparable periods presented.

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

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

% of Stabilized Budgeted NOI – Represents original budgeted 2022 NOI for stabilized properties and projected annual NOI at stabilization (defined as having achieved 90% occupancy for three consecutive months) for properties that are in lease-up.

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

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

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

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

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

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

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

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

Weighted Average Coupons – Contractual interest rate for each debt instrument weighted by principal balances as of March 31, 2022. In case of debt for which fair value hedges are in place, the rate payable under the corresponding derivatives is used in lieu of the contractual interest rate.

Weighted Average Rates – Interest expense for each debt instrument for the quarter ended March 31, 2022 weighted by its average principal balance for the same period. Interest expense includes amortization of premiums, discounts and other comprehensive income on debt and related derivative instruments. In case of debt for which derivatives are in place, the income or expense recognized under the corresponding derivatives is included in the total interest expense for the period.