Equity Residential Reports First Quarter 2014 Results

  Equity Residential Reports First Quarter 2014 Results

                   11% Increase in Normalized FFO per Share

Business Wire

CHICAGO -- April 30, 2014

Equity Residential (NYSE: EQR) today reported results for the quarter ended
March 31, 2014. All per share results are reported as available to common
shares on a diluted basis.

“As expected, fundamentals across our core markets, with the exception of
Washington DC, remain favorable with continued strong demand and manageable
new supply,” said David J. Neithercut, Equity Residential’s President and CEO.
“As we approach our primary leasing season with occupancy of 95.9% and renewal
rates achieved to date of 5.3%, we are well positioned for yet another year of
strong revenue growth.”

First Quarter 2014

FFO (Funds from Operations), as defined by the National Association of Real
Estate Investment Trusts (NAREIT), for the first quarter of 2014 was $0.71 per
share compared to $0.22 per share in the first quarter of 2013. The difference
is due primarily to the expenses and prepayment penalties the company incurred
in the first quarter of 2013 in connection with the Archstone acquisition,
along with the items described below.

For the first quarter of 2014, the company reported Normalized FFO of $0.71
per share compared to $0.64 per share in the same period of 2013. The
following items impacted Normalized FFO per share in the quarter:

  *the positive impact of approximately $0.04 per share from higher same
    store net operating income (NOI) and approximately $0.01 per share from
    NOI from non-same store properties currently in lease up; and
  *the positive impact of approximately $0.02 per share from lower total
    interest expense.

Normalized FFO begins with FFO and eliminates certain items that by their
nature are not comparable from period to period or that tend to obscure the
company’s actual operating performance. A reconciliation and definition of
Normalized FFO are provided on pages 23 and 25 of this release and the company
has included guidance for Normalized FFO on page 24 of this release.

For the first quarter of 2014, the company reported earnings of $0.22 per
share compared to $3.01 per share in the first quarter of 2013. The difference
is due primarily to approximately $1.2 billion in higher gains on property
sales in the first quarter of 2013, partially offset by higher depreciation
expense in the first quarter of 2013 as a result of the Archstone acquisition
as well as the expenses and prepayment penalties incurred in connection with
the Archstone acquisition.

Same Store Results

The company’s same store results include 18,465 stabilized apartment units
acquired in the Archstone acquisition that are owned and managed by the
company.

On a same store first quarter to first quarter comparison, which includes
100,984 apartment units, revenues increased 4.0%, expenses increased 3.2% and
NOI increased 4.4%.

Investment Activity

During the first quarter of 2014, the company acquired a 430-unit apartment
property in Los Angeles for a purchase price of approximately $143.0 million
and a capitalization (cap) rate of 4.9%. Also during the quarter, the company
acquired additional development rights at one of its existing land sites in
Manhattan for approximately $5.5 million.

The company sold no properties or land parcels during the first quarter of
2014.

During the first quarter of 2014, the company completed construction on five
development projects, consisting of 1,290 apartment units, at a total
development cost of approximately $368.3 million. Two of these properties are
located in Seattle and one each in Southern California, South Florida and
Washington, DC.

Also during the quarter, the company started construction on three development
projects, which will consist of a total of 1,145 apartment units, at a total
development cost of approximately $614.3 million. Two of these properties are
located in San Francisco and one in Southern California.

Second Quarter 2014 Guidance

The company has established a Normalized FFO guidance range of $0.74 to $0.78
per share for the second quarter of 2014. The difference between the company’s
first quarter Normalized FFO of $0.71 per share and the midpoint of the second
quarter guidance range of $0.76 per share is due primarily to:

  *the positive impact of approximately $0.05 per share from higher NOI from
    same store properties and properties in lease up;
  *the positive impact of approximately $0.01 per share from other items
    including lower general and administrative expenses; and
  *the negative impact of approximately $0.01 per share from higher total
    interest expense.

Second Quarter 2014 Earnings and Conference Call

Equity Residential expects to announce second quarter 2014 results on Tuesday,
July 29, 2014 and host a conference call to discuss those results at 10:00
a.m. CT on Wednesday, July 30, 2014.

Equity Residential is an S&P 500 company focused on the acquisition,
development and management of high quality apartment properties in top U.S.
growth markets. Equity Residential owns or has investments in 396 properties
consisting of 111,537 apartment units. 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 local government
regulation. 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, Thursday, May 1, at 10:00 a.m. Central. Please visit the
Investor section of the company’s web site at www.equityapartments.com for the
link. A replay of the web cast will be available for two weeks at this site.


Equity Residential
Consolidated Statements of Operations
(Amounts in thousands except per share data)
(Unaudited)
                                                              
                                                  Quarter Ended March 31,
                                                  2014           2013
REVENUES
Rental income                                     $ 630,725      $ 502,562
Fee and asset management                           2,717        2,160     
Total revenues                                     633,442      504,722   
                                                                 
EXPENSES
Property and maintenance                            125,573        98,529
Real estate taxes and insurance                     82,094         65,095
Property management                                 22,118         22,489
Fee and asset management                            1,662          1,646
Depreciation                                        185,167        196,222
General and administrative                         17,576       16,495    
Total expenses                                     434,190      400,476   
                                                                 
Operating income                                    199,252        104,246
                                                                 
Interest and other income                           605            320
Other expenses                                      (657     )     (21,719   )
Interest:
Expense incurred, net                               (113,049 )     (194,467  )
Amortization of deferred financing costs           (2,792   )    (6,948    )
Income (loss) before income and other taxes,
(loss) from investments in unconsolidated
entities, net (loss) on sales of land parcels       83,359         (118,568  )
and discontinued operations
Income and other tax (expense) benefit              (222     )     (405      )
(Loss) from investments in unconsolidated           (1,409   )     (46,366   )
entities
Net (loss) on sales of land parcels                (30      )    —         
Income (loss) from continuing operations            81,698         (165,339  )
Discontinued operations, net                       1,034        1,226,373 
Net income                                          82,732         1,061,034
Net (income) attributable to Noncontrolling
Interests:
Operating Partnership                               (3,093   )     (43,323   )
Partially Owned Properties                         (504     )    (25       )
Net income attributable to controlling              79,135         1,017,686
interests
Preferred distributions                            (1,036   )    (1,036    )
Net income available to Common Shares             $ 78,099      $ 1,016,650 
                                                                 
Earnings per share – basic:
Income (loss) from continuing operations          $ 0.21        $ (0.47     )
available to Common Shares
Net income available to Common Shares             $ 0.22        $ 3.01      
Weighted average Common Shares outstanding         360,470      337,532   
                                                                 
Earnings per share – diluted:
Income (loss) from continuing operations          $ 0.21        $ (0.47     )
available to Common Shares
Net income available to Common Shares             $ 0.22        $ 3.01      
Weighted average Common Shares outstanding         376,384      337,532   
                                                                 
Distributions declared per Common Share           $ 0.50        $ 0.40      
outstanding


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,
                                                  2014          2013
Net income                                        $ 82,732      $ 1,061,034
Net (income) attributable to Noncontrolling
Interests –
Partially Owned Properties                          (504    )     (25        )
Preferred distributions                            (1,036  )    (1,036     )
Net income available to Common Shares and Units     81,192        1,059,973
                                                                
Adjustments:
Depreciation                                        185,167       196,222
Depreciation – Non-real estate additions            (1,188  )     (1,216     )
Depreciation – Partially Owned Properties           (1,068  )     (1,275     )
Depreciation – Unconsolidated Properties            1,603         260
Discontinued operations:
Depreciation                                        —             23,816
Net (gain) on sales of discontinued operations      (71     )     (1,198,922 )
Gain on sale of Equity Corporate Housing (ECH)     —           250        
FFO available to Common Shares and Units (1)        265,635       79,108
(3) (4)
                                                                
Adjustments (see page 23 for additional
detail):
Asset impairment and valuation allowances           —             —
Property acquisition costs and write-off of         474           67,668
pursuit costs
Debt extinguishment (gains) losses, including
prepayment penalties, preferred share
redemptions and non-cash convertible debt           —             79,643
discounts
(Gains) losses on sales of non-operating
assets, net of income and other tax expense
(benefit)                                           9             (250       )
Other miscellaneous non-comparable items           (463    )    —          
Normalized FFO available to Common Shares and     $ 265,655    $ 226,169    
Units (2) (3) (4)
                                                                
FFO (1) (3)                                       $ 266,671     $ 80,144
Preferred distributions                            (1,036  )    (1,036     )
FFO available to Common Shares and Units -        $ 265,635    $ 79,108     
basic and diluted (1) (3) (4)
FFO per share and Unit - basic                    $ 0.71       $ 0.23       
FFO per share and Unit - diluted                  $ 0.71       $ 0.22       
                                                                
Normalized FFO (2) (3)                            $ 266,691     $ 227,205
Preferred distributions                            (1,036  )    (1,036     )
Normalized FFO available to Common Shares and     $ 265,655    $ 226,169    
Units - basic and diluted (2) (3) (4)
Normalized FFO per share and Unit - basic         $ 0.71       $ 0.64       
Normalized FFO per share and Unit - diluted       $ 0.71       $ 0.64       
                                                                
Weighted average Common Shares and Units           374,201     351,255    
outstanding - basic
Weighted average Common Shares and Units           376,384     353,656    
outstanding - diluted
                                                                             

        See page 23 for additional detail regarding the adjustments from FFO
Note:  to Normalized FFO. See page 25 for the definitions, the footnotes
        referenced above and the reconciliations of EPS to FFO and Normalized
        FFO.


Equity Residential
Consolidated Balance Sheets
(Amounts in thousands except for share amounts)
(Unaudited)
                                                             
                                               March 31,        December 31,
                                               2014             2013
ASSETS
Investment in real estate
Land                                           $ 6,281,124      $ 6,192,512
Depreciable property                             19,623,472       19,226,047
Projects under development                       865,177          988,867
Land held for development                       295,357        393,522    
Investment in real estate                        27,065,130       26,800,948
Accumulated depreciation                        (4,992,877 )    (4,807,709 )
Investment in real estate, net                   22,072,253       21,993,239
Cash and cash equivalents                        37,209           53,534
Investments in unconsolidated entities           205,068          178,526
Deposits – restricted                            91,081           103,567
Escrow deposits – mortgage                       43,995           42,636
Deferred financing costs, net                    55,754           58,486
Other assets                                    384,271        404,557    
Total assets                                   $ 22,889,631    $ 22,834,545 
                                                                
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable                         $ 5,167,626      $ 5,174,166
Notes, net                                       5,477,656        5,477,088
Lines of credit                                  298,000          115,000
Accounts payable and accrued expenses            161,838          118,791
Accrued interest payable                         78,140           78,309
Other liabilities                                321,043          347,748
Security deposits                                72,735           71,592
Distributions payable                           187,759        243,511    
Total liabilities                               11,764,797     11,626,205 
                                                                
Commitments and contingencies
                                                                
Redeemable Noncontrolling Interests –           405,276        363,144    
Operating Partnership
Equity:
Shareholders’ equity:
Preferred Shares of beneficial interest,
$0.01 par value;
100,000,000 shares authorized; 1,000,000
shares issued and
outstanding as of March 31, 2014 and             50,000           50,000
December 31, 2013
Common Shares of beneficial interest, $0.01
par value;
1,000,000,000 shares authorized; 361,148,189
shares issued and
outstanding as of March 31, 2014 and
360,479,260 shares
issued and outstanding as of December 31,        3,611            3,605
2013
Paid in capital                                  8,541,046        8,561,500
Retained earnings                                1,944,798        2,047,258
Accumulated other comprehensive (loss)          (162,894   )    (155,162   )
Total shareholders’ equity                       10,376,561       10,507,201
Noncontrolling Interests:
Operating Partnership                            215,339          211,412
Partially Owned Properties                      127,658        126,583    
Total Noncontrolling Interests                  342,997        337,995    
Total equity                                    10,719,558     10,845,196 
Total liabilities and equity                   $ 22,889,631    $ 22,834,545 


Equity Residential
Portfolio Summary
As of March 31, 2014
                                                       
                                               % of         Average
                                   Apartment   Stabilized   Rental
Markets/Metro Areas   Properties   Units       NOI (1)      Rate (2)
                                                            
Core:
Washington DC         57           18,652      18.6%        $  2,222
New York              38           10,330      16.7%           3,771
San Francisco         51           13,208      13.0%           2,281
Los Angeles           59           12,670      12.1%           2,125
Boston                34           7,816       10.1%           2,806
South Florida         36           11,731      7.4%            1,586
Seattle               40           8,116       6.7%            1,833
Denver                19           6,935       4.4%            1,352
San Diego             13           3,505       3.1%            1,938
Orange County, CA     11           3,490       2.9%           1,738
Subtotal – Core       358          96,453      95.0%           2,231
                                                            
Non-Core:
Inland Empire, CA     10           3,081       2.1%            1,530
Orlando               10           3,383       1.7%            1,143
All Other Markets     16           3,561       1.2%           1,152
Subtotal – Non-Core   36           10,025      5.0%           1,265
Total                 394          106,478     100.0%         2,138
                                                            
Military Housing      2            5,059       —              —
                                                            
Grand Total           396          111,537     100.0%       $  2,138


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

(1) % of Stabilized NOI includes budgeted 2014 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.
                                         
(2) Average rental rate is defined as total rental revenues divided by the
weighted average occupied apartment units for the last month of the period
presented.


Equity Residential
                                                                
Portfolio as of March 31, 2014
                                                                       
                                                         Apartment
                                            Properties   Units
Wholly Owned Properties                     367             99,936
Master-Leased Properties - Consolidated     3               853
Partially Owned Properties - Consolidated   20              4,020
Partially Owned Properties -                4               1,669
Unconsolidated
Military Housing                            2             5,059
                                                                       
                                            396           111,537
                                                                       
                                                            
                                                                       
Portfolio Rollforward Q1 2014
($ in thousands)
                                                                       
                                            Apartment    Purchase/
                               Properties   Units        (Sale)        Cap
                                                         Price         Rate
                  12/31/2013   390          109,855
Acquisitions:
Rental
Properties -                   1            430          $  143,000    4.9  %
Consolidated
Land Parcel -                  —            —            $  5,500
Consolidated
Completed
Developments -                 5            1,290
Consolidated
Configuration                  —            (38      )
Changes
                                                                       
                  3/31/2014    396          111,537  

     
      Equity Residential
                                                                                
      First Quarter 2014 vs. First Quarter 2013
      Same Store Results/Statistics for 100,984 Same Store Apartment Units
      $ in thousands (except for Average Rental Rate)
                                                                                       
                    Results                                    Statistics
                                                               Average
                                                               Rental
      Description   Revenues      Expenses      NOI (1)        Rate (2)    Occupancy   Turnover
                                                                                       
      Q1 2014       $ 613,878     $ 218,239     $ 395,639      $ 2,133     95.1  %     11.3  %
      Q1 2013       $ 590,452    $ 211,485    $ 378,967     $ 2,053    95.0  %     12.1  %
                                                                                       
      Change        $ 23,426     $ 6,754      $ 16,672      $ 80       0.1   %     (0.8  %)
                                                                                       
      Change          4.0     %     3.2     %     4.4     %      3.9   %
                                                                                       
                                                                           
                                                                                       
                                                                                       
      First Quarter 2014 vs. Fourth Quarter 2013
      Same Store Results/Statistics for 101,494 Same Store Apartment Units
      $ in thousands (except for Average Rental Rate)
                                                                                       
                    Results                                    Statistics
                                                               Average
                                                               Rental
      Description   Revenues      Expenses      NOI (1)        Rate (2)    Occupancy   Turnover
                                                                                       
      Q1 2014       $ 616,874     $ 219,200     $ 397,674      $ 2,132     95.1  %     11.3  %
      Q4 2013       $ 613,776    $ 202,649    $ 411,127     $ 2,116    95.3  %     12.2  %
                                                                                       
      Change        $ 3,098      $ 16,551     $ (13,453 )    $ 16       (0.2  %)    (0.9  %)
                                                                                       
      Change          0.5     %     8.2     %     (3.3    %)     0.8   %
                                                                                       
      Note: Same store results/statistics include 18,465 stabilized apartment units acquired in
      the Archstone acquisition that are owned and managed by the Company.
                                                                                       
      The Company's primary financial measure for evaluating each of its apartment communities
      is net operating income ("NOI"). NOI represents rental income less property and
      maintenance expense, real estate tax and insurance expense and property management
(1)   expense. 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 communities. See page 25 for reconciliations from
      operating income.
                                                                                       
(2)   Average rental rate is defined as total rental revenues divided by the weighted average
      occupied apartment units for the period.


Equity Residential
First Quarter 2014 vs. First Quarter 2013
Same Store Results/Statistics by Market
                                                                                            
                                                                                                      
                                                            Increase (Decrease) from Prior Year's Quarter
                            Q1 2014   Q1 2014   Q1 2014
                            % of      Average   Weighted                                    Average
                Apartment   Actual    Rental    Average                                     Rental
Markets/Metro   Units       NOI       Rate      Occupancy   Revenues   Expenses   NOI       Rate      Occupancy
Areas                                 (1)       %                                           (1)
                                                                                                      
Core:
Washington DC   17,553      18.5  %   $ 2,219   94.5    %   (0.5  %)   4.2   %    (2.8 %)   (0.3 %)   (0.3  %)
New York        10,330      16.4  %     3,762   95.6    %   3.0   %    7.2   %    0.1  %    2.8  %    0.2   %
San Francisco   12,764      13.8  %     2,238   94.8    %   8.4   %    (5.3  %)   16.7 %    8.0  %    0.3   %
Los Angeles     11,139      10.9  %     2,076   95.2    %   4.6   %    (1.0  %)   7.9  %    4.6  %    (0.1  %)
Boston (2)      7,722       10.1  %     2,812   95.1    %   4.8   %    9.6   %    2.3  %    3.8  %    0.9   %
South Florida   10,834      7.6   %     1,564   95.3    %   4.8   %    3.1   %    5.8  %    4.5  %    0.1   %
Seattle         7,411       6.3   %     1,786   95.0    %   6.7   %    4.3   %    7.9  %    6.4  %    0.2   %
Denver          6,935       4.8   %     1,344   95.2    %   6.6   %    3.2   %    7.9  %    7.1  %    (0.5  %)
San Diego       3,505       3.3   %     1,926   95.0    %   4.4   %    2.5   %    5.4  %    3.8  %    0.6   %
Orange          3,490       3.1   %    1,744   95.1    %   4.5   %    (2.8  %)   7.8  %    4.8  %    (0.3  %)
County, CA
Subtotal –      91,683      94.8  %     2,221   95.0    %   4.0   %    3.1   %    4.5  %    3.9  %    0.1   %
Core
                                                                                                      
Non-Core:
Inland          3,081       2.3   %     1,536   95.5    %   4.5   %    5.8   %    3.8  %    3.4  %    0.9   %
Empire, CA
Orlando         3,383       1.8   %     1,141   94.8    %   1.8   %    0.9   %    2.3  %    3.3  %    (1.4  %)
All Other       2,837       1.1   %    1,124   96.0    %   2.8   %    8.3   %    (2.7 %)   1.5  %    1.2   %
Markets
Subtotal –      9,301       5.2   %     1,267   95.4    %   3.1   %    5.1   %    1.9  %    2.9  %    0.2   %
Non-Core
                                                                                              
Total           100,984     100.0 %   $ 2,133   95.1    %   4.0   %    3.2   %    4.4  %    3.9  %    0.1   %
                                                                                                      
                                                                                                      
Note: Same store results/statistics include 18,465 stabilized apartment units acquired in the Archstone
acquisition that are owned and managed by the Company.
                                                                                                      
(1) Average rental rate is defined as total rental revenues divided by the weighted average occupied apartment
units for the period.
                                                                                                      
(2) Quarter over quarter same store revenues in Boston were positively impacted by non-residential related
income. Residential-only same store revenues increased in Boston 3.6% quarter over quarter.


Equity Residential
First Quarter 2014 vs. Fourth Quarter 2013
Same Store Results/Statistics by Market
                                                                                             
                                                                                                       
                                                            Increase (Decrease) from Prior Quarter
                            Q1 2014   Q1 2014   Q1 2014
                            % of      Average   Weighted                                     Average
                Apartment   Actual    Rental    Average                                      Rental
Markets/Metro   Units       NOI       Rate      Occupancy   Revenues   Expenses   NOI        Rate      Occupancy
Areas                                 (1)       %                                            (1)
                                                                                                       
Core:
Washington DC   17,741      18.6  %   $ 2,223   94.5    %   (0.7  %)   12.7  %    (6.4  %)   (0.2 %)   (0.5  %)
New York        10,330      16.3  %     3,762   95.6    %   0.6   %    14.4  %    (7.3  %)   1.1  %    (0.4  %)
San Francisco   12,764      13.7  %     2,238   94.8    %   1.2   %    0.6   %    1.5   %    1.8  %    (0.6  %)
Los Angeles     11,139      10.8  %     2,076   95.2    %   1.0   %    2.5   %    0.2   %    0.9  %    (0.1  %)
Boston (2)      7,722       10.0  %     2,812   95.1    %   (0.5  %)   17.4  %    (8.3  %)   0.2  %    (0.7  %)
South Florida   10,834      7.6   %     1,564   95.3    %   1.9   %    2.9   %    1.4   %    1.9  %    0.0   %
Seattle         7,733       6.6   %     1,785   95.0    %   1.3   %    5.9   %    (0.9  %)   1.1  %    0.3   %
Denver          6,935       4.8   %     1,344   95.2    %   1.1   %    (0.3  %)   1.6   %    1.1  %    (0.1  %)
San Diego       3,505       3.3   %     1,926   95.0    %   (0.3  %)   0.2   %    (0.5  %)   0.5  %    (0.7  %)
Orange          3,490       3.1   %    1,744   95.1    %   0.2   %    2.6   %    (0.7  %)   0.9  %    (0.7  %)
County, CA
Subtotal –      92,193      94.8  %     2,220   95.0    %   0.5   %    8.1   %    (3.2  %)   0.8  %    (0.3  %)
Core
                                                                                                       
Non-Core:
Inland          3,081       2.3   %     1,536   95.5    %   0.9   %    (0.4  %)   1.5   %    1.3  %    (0.3  %)
Empire, CA
Orlando         3,383       1.8   %     1,141   94.8    %   0.3   %    6.9   %    (3.2  %)   0.3  %    0.0   %
All Other       2,837       1.1   %    1,124   96.0    %   0.9   %    22.8  %    (15.5 %)   0.1  %    0.8   %
Markets
Subtotal –      9,301       5.2   %     1,267   95.4    %   0.7   %    9.4   %    (4.2  %)   0.6  %    0.1   %
Non-Core
                                                                                               
Total           101,494     100.0 %   $ 2,132   95.1    %   0.5   %    8.2   %    (3.3  %)   0.8  %    (0.2  %)
                                                                                                       
                                                                                                       
Note: Same store results/statistics include 18,465 stabilized apartment units acquired in the Archstone
acquisition that are owned and managed by the Company.
                                                                                                       
(1) Average rental rate is defined as total rental revenues divided by the weighted average occupied
apartment units for the period.
                                                                                                       
(2) Sequential same store revenues in Boston were positively impacted by non-residential related income.
Residential-only same store revenues decreased in Boston 1.2% sequentially.


Equity Residential
                                                             
                                                                   
First Quarter 2014 vs. First Quarter 2013
Same Store Operating Expenses for 100,984 Same Store Apartment Units
$ in thousands
                                                                   
                                                                   
                                                                   % of Actual
                                                                   Q1 2014
                   Actual      Actual      $            %          Operating
                   Q1 2014     Q1 2013     Change       Change     Expenses
                                                                   
Real estate        $ 72,828    $ 68,603    $ 4,225      6.2   %    33.4    %
taxes
On-site payroll      43,674      45,499      (1,825 )   (4.0  %)   20.0    %
(1)
Utilities (2)        38,262      33,414      4,848      14.5  %    17.5    %
Repairs and          25,940      25,217      723        2.9   %    11.9    %
maintenance (3)
Property
management costs     19,030      19,485      (455   )   (2.3  %)   8.7     %
(4)
Insurance            6,246       6,321       (75    )   (1.2  %)   2.9     %
Leasing and          2,568       3,030       (462   )   (15.2 %)   1.2     %
advertising
Other on-site
operating           9,691      9,916      (225   )   (2.3  %)   4.4     %
expenses (5)
                                                                   
Same store
operating          $ 218,239   $ 211,485   $ 6,754     3.2   %    100.0   %
expenses

    
      Note: Same store operating results include 18,465 stabilized apartment
      units acquired in the Archstone acquisition that are owned and managed
      by the Company.
      
      On-site payroll - Includes payroll and related expenses for on-site
(1)   personnel including property managers, leasing consultants and
      maintenance staff.
      
      Utilities - Represents gross expenses prior to any recoveries under the
(2)   Resident Utility Billing System ("RUBS"). Recoveries are reflected in
      rental income.
      
      Repairs and maintenance - Includes general maintenance costs, apartment
(3)   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 costs.
      
      Property management costs - Includes payroll and related expenses for
      departments, or portions of departments, that directly support on-site
(4)   management. These include such departments as regional and corporate
      property management, property accounting, human resources, training,
      marketing and revenue management, procurement, real estate tax, property
      legal services and information technology.
      
      Other on-site operating expenses - Includes ground lease costs and
(5)   administrative costs such as office supplies, telephone and data charges
      and association and business licensing fees.


Equity Residential
                                                                                          
Debt Summary as of March 31, 2014
(Amounts in thousands)
                                                                                                 
                                                                                    Weighted
                                                                         Weighted   Average
                                                                         Average    Maturities
                                     Amounts (1)        % of Total       Rates      (years)
                                                                         (1)
                                                                                                 
Secured                              $ 5,167,626          47.2       %   4.22  %    8.2
Unsecured                             5,775,656        52.8       %   4.70  %    4.3    
                                                                                                 
Total                                $ 10,943,282       100.0      %   4.47  %    6.1    
                                                                                                 
Fixed Rate Debt:
Secured – Conventional               $ 4,386,084          40.1       %   4.84  %    6.7
Unsecured – Public/Private            4,727,656        43.2       %   5.49  %    4.8    
                                                                                                 
Fixed Rate Debt                       9,113,740        83.3       %   5.18  %    5.7    
                                                                                                 
Floating Rate Debt:
Secured – Conventional                 56,868             0.5        %   2.21  %    0.5
Secured – Tax Exempt                   724,674            6.6        %   0.63  %    17.0
Unsecured – Public/Private             750,000            6.9        %   1.33  %    0.8
Unsecured – Revolving Credit          298,000          2.7        %   0.98  %    4.0    
Facility
                                                                                                 
Floating Rate Debt                    1,829,542        16.7       %   1.02  %    7.9    
                                                                                                 
Total                                $ 10,943,282       100.0      %   4.47  %    6.1    
                                                                                                 
(1) Net of the effect of any derivative instruments. Weighted average rates are for the quarter ended
March 31, 2014.
                                                                                                 
Note: The Company capitalized interest of approximately $12.8 million and $8.4 million during the
quarters ended March 31, 2014 and 2013, respectively.
                                                                                                 
                                                                                    
                                                                                                 
  Debt Maturity Schedule as of March 31, 2014
  (Amounts in thousands)
                                                                                                 
                                                                                    Weighted     Weighted
                                                                                    Average      Average
                                                                                    Rates
                       Fixed         Floating                                       on Fixed     Rates on
  Year                 Rate (1)      Rate (1)           Total            % of       Rate Debt    Total
                                                                         Total      (1)          Debt (1)
                                                                                                 
  2014                 $ 509,160     $ 48,883           $ 558,043        5.1   %    5.25   %     5.02  %
  2015                   420,448       750,000      (2)   1,170,448      10.7  %    6.28   %     3.11  %
  2016                   1,193,250     —                  1,193,250      10.9  %    5.34   %     5.34  %
  2017                   1,346,734     456                1,347,190      12.3  %    6.16   %     6.16  %
  2018                   84,359        395,659      (3)   480,018        4.4   %    5.61   %     1.75  %
  2019                   806,644       20,766             827,410        7.6   %    5.48   %     5.35  %
  2020                   1,678,601     809                1,679,410      15.3  %    5.49   %     5.49  %
  2021                   1,195,242     856                1,196,098      10.9  %    4.63   %     4.64  %
  2022                   228,933       905                229,838        2.1   %    3.17   %     3.18  %
  2023                   1,303,079     956                1,304,035      11.9  %    3.75   %     3.75  %
  2024+                  297,925       674,988            972,913        8.9   %    6.25   %     2.23  %
  Premium/(Discount)    49,365       (64,736    )      (15,371    )   (0.1  %)   N/A         N/A   
                                                                                                 
  Total                $ 9,113,740   $ 1,829,542       $ 10,943,282    100.0 %    5.20   %     4.46  %
                                                                                                 
  (1) Net of the effect of any derivative instruments. Weighted average rates are as of March 31, 2014.
                                                                                                 
  (2) Includes the Company's $750.0 million unsecured term loan facility that matures on January 11, 2015
  and is subject to a one-year extension option exercisable by the Company.
                                                                                                 
  (3) Includes $298.0 million outstanding on the Company's unsecured revolving credit facility. As of
  March 31, 2014, there was approximately $2.17 billion available on this facility.


Equity Residential
Unsecured Debt Summary as of March 31, 2014
(Amounts in thousands)
                                                                    
                                                              
                                                              Unamortized
              Coupon        Due                 Face          Premium/      Net
              Rate          Date                Amount        (Discount)    Balance
                                                                            
  Fixed
  Rate
  Notes:
              5.250%        09/15/14            $ 500,000     $  (28)       $ 499,972
              6.584%        04/13/15              300,000        (110)        299,890
              5.125%        03/15/16              500,000        (103)        499,897
              5.375%        08/01/16              400,000        (433)        399,567
              5.750%        06/15/17              650,000        (1,653)      648,347
              7.125%        10/15/17              150,000        (230)        149,770
              4.750%        07/15/20              600,000        (2,861)      597,139
              4.625%        12/15/21              1,000,000      (2,921)      997,079
              3.000%        04/15/23              500,000        (4,005)      495,995
              7.570%        08/15/26             140,000       —           140,000
                                                                            
                                                 4,740,000     (12,344)    4,727,656
  Floating
  Rate
  Notes:
  Term Loan   LIBOR+1.20%   01/11/15   (1)(2)    750,000       —           750,000
  Facility
                                                                            
                                                 750,000       —           750,000
                                                                            
  Revolving
  Credit      LIBOR+1.05%   04/01/18   (1)(3)    298,000       —           298,000
  Facility:
                                                                            
  Total
  Unsecured                                     $ 5,788,000   $  (12,344)   $ 5,775,656
  Debt

    
(1)   Facilities are private. All other unsecured debt is public.
      
      Represents the Company's $750.0 million unsecured term loan facility.
      The maturity date of January 11, 2015 is subject to a one-year extension
(2)   option exercisable by the Company. The interest rate on advances under
      the term loan facility will generally be LIBOR plus a spread (currently
      1.20%), which is dependent on the credit rating of the Company's
      long-term debt.
      
      Represents the Company's $2.5 billion unsecured revolving credit
      facility maturing April 1, 2018. The interest rate on advances under the
      new credit facility will generally be LIBOR plus a spread (currently
(3)   1.05%) and an annual facility fee (currently 15 basis points). Both the
      spread and the facility fee are dependent on the credit rating of the
      Company's long-term debt. As of March 31, 2014, there was approximately
      $2.17 billion available on the Company's unsecured revolving credit
      facility.


Equity Residential
                                                             
Selected Unsecured Public Debt Covenants
                                                                  
                                                      March 31,   December 31,
                                                      2014        2013
                                                                  
  Total Debt to Adjusted Total Assets (not to         40.3   %    40.0     %
  exceed 60%)
                                                                  
  Secured Debt to Adjusted Total Assets (not to       19.0   %    19.2     %
  exceed 40%)
                                                                  
  Consolidated Income Available for Debt Service to
  Maximum Annual Service Charges
  (must be at least 1.5 to 1)                         3.12        3.07
                                                                  
  Total Unsecured Assets to Unsecured Debt            322.5  %    326.9    %
  (must be at least 150%)


These selected covenants relate to ERP Operating Limited Partnership's
("ERPOP") outstanding unsecured public debt. Equity Residential is the general
partner of ERPOP.


Equity Residential
                                                                                        
Capital Structure as of March 31, 2014
(Amounts in thousands except for share/unit and per share amounts)
                                                                                                 
  Secured Debt                                                           $ 5,167,626    47.2%
  Unsecured Debt                                                          5,775,656    52.8%
                                                                                                 
  Total Debt                                                               10,943,282   100.0%   33.4%
                                                                                                 
  Common Shares
  (includes                                     361,148,189     96.2%
  Restricted
  Shares)
  Units
  (includes OP                                 14,375,319     3.8%
  Units and LTIP
  Units)
                                                                                                 
  Total Shares                                  375,523,508     100.0%
  and Units
  Common Share
  Price at March                              $ 57.99
  31, 2014
                                                                           21,776,608   99.8%
  Perpetual
  Preferred                                                               50,000       0.2%
  Equity (see
  below)
                                                                                                 
  Total Equity                                                             21,826,608   100.0%   66.6%
                                                                                                 
  Total Market                                                           $ 32,769,890            100.0%
  Capitalization
                                                                                                 
                                                                                  
                                                                                                 
Perpetual Preferred Equity as of March 31, 2014
(Amounts in thousands except for share and per share amounts)
                                                                                                 
                                                              Annual     Annual
                   Redemption   Outstanding   Liquidation     Dividend   Dividend
  Series           Date         Shares        Value           Per        Amount
                                                              Share
                                                                                                 
  Preferred
  Shares:
  8.29% Series K   12/10/26     1,000,000     $ 50,000        $ 4.145    $ 4,145
                                                                                                 
  Total
  Perpetual                     1,000,000     $ 50,000                   $ 4,145
  Preferred
  Equity


Equity Residential
Common Share and Unit
Weighted Average Amounts Outstanding
                                                                
                                                     Q1 2014       Q1 2013
                                                                   
Weighted Average Amounts Outstanding for Net
Income Purposes:
Common Shares - basic                                360,470,366   337,532,330
Shares issuable from assumed conversion/vesting of
(1):
- OP Units                                           13,730,577    —
- long-term compensation shares/units                2,183,239     —
                                                                   
Total Common Shares and Units - diluted (1)          376,384,182   337,532,330
                                                                   
Weighted Average Amounts Outstanding for FFO and
Normalized

FFO Purposes:
Common Shares - basic                                360,470,366   337,532,330
OP Units - basic                                     13,730,577    13,722,414
                                                                   
Total Common Shares and OP Units - basic             374,200,943   351,254,744
Shares issuable from assumed conversion/vesting
of:
- long-term compensation shares/units                2,183,239     2,400,834
                                                                   
Total Common Shares and Units - diluted              376,384,182   353,655,578
                                                                   
Period Ending Amounts Outstanding:
Common Shares (includes Restricted Shares)           361,148,189   360,063,675
Units (includes OP Units and LTIP Units)             14,375,319    14,226,725
                                                                   
Total Shares and Units                               375,523,508   374,290,400

    
      Potential common shares issuable from the assumed conversion of OP Units
      and the exercise/vesting of long-term compensation shares/units are
(1)   automatically anti-dilutive and therefore excluded from the diluted
      earnings per share calculation as the Company had a loss from continuing
      operations during the quarter ended March 31, 2013.


Equity Residential
Partially Owned Entities as of March 31, 2014
(Amounts in thousands except for project and apartment unit amounts)
                                                                                                             
                       Consolidated                                           Unconsolidated
                       Development Projects                                   Development Projects
                       Held for                                               Held for                   
                       and/or        Completed,                               and/or        Completed,
                       Under         Not                                      Under         Not
                       Development   Stabilized   Operating     Total         Development   Stabilized    Operating    Total
                       (4)           (5)                                      (4)           (5)
                                                                                                                       
Total projects (1)       —             1        19          20           —          3           1          4       
                                                                                                                       
Total apartment          —             268      3,752       4,020        —          1,333       336        1,669   
units (1)
                                                                                                                       
Operating
information for the
quarter ended
3/31/14 (at 100%):
Operating revenue      $  —          $    468     $ 21,308      $ 21,776      $  —          $ 4,528       $ 1,353      $ 5,881
Operating expenses       77            204      6,453       6,734        44         1,917       559        2,520   
Net operating (loss)      (77   )         264       14,855        15,042         (44    )     2,611         794          3,361
income
Depreciation              —               —         5,363         5,363          —            2,782         447          3,229
General and              (9    )        116      12          119          —          12          43         55      
administrative/other
Operating (loss)          (68   )         148       9,480         9,560          (44    )     (183    )     304          77
income
Interest and other        —               —         3             3              —            —             —            —
income
Other expenses            (42   )         —         (7      )     (49     )      —            —             —            —
Interest:
Expense incurred,         —               —         (3,887  )     (3,887  )      —            (1,992  )     (279   )     (2,271  )
net
Amortization of
deferred financing       —             —        (88     )    (88     )     —          (3      )    —          (3      )
costs
                                                                                                                       
(Loss) income before
income and other
taxes and (loss)
from
investments in
unconsolidated            (110  )         148       5,501         5,539          (44    )     (2,178  )     25           (2,197  )
entities
Income and other tax      —               —         (36     )     (36     )      —            —             —            —
(expense) benefit
(Loss) from
investments in            —               —         (419    )     (419    )      —            —             —            —
unconsolidated
entities
                                                                                                                
Net (loss) income      $  (110  )    $    148     $ 5,046      $ 5,084      $  (44    )   $ (2,178  )   $ 25        $ (2,197  )
                                                                                                                       
Debt - Secured (2):
EQR Ownership (3)      $  —          $    —       $ 281,974     $ 281,974     $  808        $ 56,716      $ 6,082      $ 63,606
Noncontrolling           —             —        78,243      78,243       15,346     119,516     24,328     159,190 
Ownership
                                                                                                                       
Total (at 100%)        $  —         $    —       $ 360,217    $ 360,217    $  16,154    $ 176,232    $ 30,410    $ 222,796 
                                                                                                                       
(1)              Project and apartment unit counts exclude all uncompleted development projects until those projects are
                 substantially completed.
                                                                                                                       
(2)              All debt is non-recourse to the Company with the exception of 50% of the current $16.2 million outstanding debt
                 balance on one unconsolidated development project.
                                                                                                                       
(3)              Represents the Company's current equity ownership interest.
                                                                                                                       
(4)              See Projects Under Development - Partially Owned on page 19 for consolidated projects and Projects Under
                 Development - Unconsolidated on page 20 for further information.
                                                                                                                       
                 Projects included here are substantially complete. However, they may still require additional exterior and
(5)              interior work for all units to be available for leasing. See Projects Completed, Not Stabilized - Partially Owned
                 on page 19 for consolidated projects and Projects Completed, Not Stabilized - Unconsolidated on page 20 for
                 further information.
                                                                                                                       
                 The above table excludes the Company's interests in unconsolidated joint ventures entered into with AvalonBay
                 ("AVB") in connection with the Archstone transaction. These ventures own certain non-core Archstone assets that
Note:            are held for sale and succeeded to certain residual Archstone liabilities, such as liability for various
                 employment-related matters as well as responsibility for tax protection arrangements and third-party preferred
                 interests in former Archstone subsidiaries. The preferred interests have an aggregate liquidation value of $79.3
                 million at March 31, 2014. The ventures are owned 60% by the Company and 40% by AVB.


Equity Residential
Consolidated Development and Lease-Up Projects as of March 31, 2014
(Amounts in thousands except for project and apartment unit amounts)
                                                                                                                                       
                                                                       Total
                                                                       Book
                               No. of      Total         Total         Value Not                                                       Estimated    Estimated
                               Apartment   Capital       Book Value    Placed in   Total       Percentage    Percentage   Percentage   Completion   Stabilization
Projects       Location        Units       Cost (1)      to Date       Service     Debt        Completed     Leased       Occupied     Date         Date
                                                                                                                                                    
Projects
Under
Development
- Wholly
Owned:
Residences
at Westgate
II (formerly   Pasadena, CA    88          $ 54,037      $ 33,514      $ 33,514    $ —           44%             —        —            Q3 2014      Q1 2015
Westgate
III)
Residences
at Westgate    Pasadena, CA    252           125,293       108,583       108,583     —           81%             9%       6%           Q3 2014      Q2 2015
I (formerly
Westgate II)
170
Amsterdam      New York, NY    236           110,892       58,457        58,457      —           50%             —        —            Q1 2015      Q1 2016
(2)
Azure (at      San             273           189,090       80,257        80,257      —           35%             —        —            Q3 2015      Q4 2016
Mission Bay)   Francisco, CA
West Seattle   Seattle, WA     206           67,112        20,745        20,745      —           8%              —        —            Q4 2015      Q3 2016
Tallman        Seattle, WA     303           84,277        29,241        29,241      —           14%             —        —            Q4 2015      Q2 2017
Village at     Los Angeles,
Howard         CA              545           193,231       56,006        56,006      —           2%              —        —            Q2 2016      Q2 2017
Hughes
Millikan       Irvine, CA      344           102,331       17,490        17,490      —           1%              —        —            Q2 2016      Q3 2017
Potrero        San             453           224,474       46,094        46,094      —           1%              —        —            Q2 2016      Q3 2017
               Francisco, CA
Tasman         San Jose, CA    554           214,923       70,287        70,287      —           19%             —        —            Q2 2016      Q2 2018
Rincon Hill    San             348          287,454      54,885       54,885     —           1%              —        —            Q3 2016      Q1 2018
               Francisco, CA
Projects
Under
Development                    3,602         1,653,114     575,559       575,559     —
- Wholly
Owned
                                                                                                                                                    
Projects
Under
Development
- Partially
Owned:
400 Park
Avenue South   New York, NY    269          251,961      186,731      186,731    —           70%             —        —            Q2 2015      Q1 2016
(3)
Projects
Under
Development                    269           251,961       186,731       186,731     —
- Partially
Owned
                                                                               
Projects
Under                          3,871        1,905,075    762,290      762,290    —
Development
                                                                                                                                                    
Completed
Not
Stabilized -
Wholly Owned
(4):
Gaithersburg   Gaithersburg,   389           93,000        92,044        —           89,269                      96%      95%          Completed    Q2 2014
Station (5)    MD
Breakwater
at Marina      Marina Del      224           87,949        87,595        —           27,000                      91%      89%          Completed    Q3 2014
Del Rey (2)    Rey, CA
(6)
Oasis at       Delray Beach,
Delray Beach   FL              128           22,239        21,960        —           —                           77%      70%          Completed    Q3 2014
II
Reserve at     Mill Creek,
Town Center    WA              95            21,330        20,874        —           —                           39%      26%          Completed    Q4 2014
III
1111 Belle
Pre            Alexandria,     360           114,072       108,438       —           —                           48%      39%          Completed    Q2 2015
(formerly      VA
The Madison)
Jia
(formerly      Los Angeles,    280           92,920        88,403        —           —                           17%      13%          Completed    Q3 2015
Chinatown      CA
Gateway)
Urbana
(formerly
Market         Seattle, WA     287          90,024       82,807       —          —                           18%      13%          Completed    Q3 2015
Street
Landing)
Projects
Completed
Not                            1,763         521,534       502,121       —           116,269
Stabilized -
Wholly Owned
                                                                                                                                                    
Completed
Not
Stabilized -
Partially
Owned (4):
Park Aire
(formerly      Wellington,
Enclave at     FL              268          50,000       48,319       —          —                           56%      51%          Completed    Q1 2015
Wellington)
(7)
Projects
Completed
Not                            268           50,000        48,319        —           —
Stabilized -
Partially
Owned
                                                                               
Projects
Completed                      2,031        571,534      550,440      —          116,269
Not
Stabilized
                                                                                                                                                    
Total
Consolidated                   5,902       $ 2,476,609   $ 1,312,730   $ 762,290   $ 116,269
Projects
                                                                                                                                                    
Land Held
for                            N/A          N/A         $ 295,357     $ 295,357   $ —
Development
                                                                                                                                                    
                                                                                               Total         Q1 2014
                                                                                               Capital
NOI CONTRIBUTION FROM CONSOLIDATED DEVELOPMENT PROJECTS                                        Cost (1)      NOI
Projects Under Development                                                                     $ 1,905,075   $   (60)
Completed Not Stabilized                                                                         571,534         2,109
Completed and Stabilized During the Quarter                                                     —              —
Total Consolidated Development NOI Contribution                                                $ 2,476,609   $   2,049
                                                                                                                                                    
(1)         Total capital cost represents estimated cost for projects under development and/or developed and all capitalized costs incurred to date plus any
            estimates of costs remaining to be funded for all projects, all in accordance with GAAP.
            
(2)         170 Amsterdam and Breakwater at Marina Del Rey – The land under these developments are subject to long term ground leases.
            
            400 Park Avenue South – The Company is jointly developing with Toll Brothers (NYSE: TOL) a project at 400 Park Avenue South in New York City with the
(3)         Company's rental portion on floors 2-22 and Toll's for sale portion on floors 23-40. The total capital cost and total book value to date represent
            only the Company's portion of the project. Toll Brothers has funded $102.9 million for their allocated share of the project.
            
(4)         Properties included here are substantially complete. However, they may still require additional exterior and interior work for all apartment units to
            be available for leasing.
            
(5)         Gaithersburg Station – This project has a non-recourse loan with a current outstanding balance of $89.3 million, bears interest at 5.24% and matures
            April 1, 2053.
            
(6)         Breakwater at Marina Del Rey – The Company has substantially completed renovations of this property. The non-recourse loan has a current outstanding
            balance of $27.0 million, bears interest at LIBOR plus 1.75% and matures September 1, 2014.
            
(7)         Park Aire – The Company has a 95.0% ownership interest in this project.


Equity Residential
Unconsolidated Development and Lease-Up Projects as of March 31, 2014
(Amounts in thousands except for project and apartment unit amounts)
                                                                                                                                           
                                                                               Total
                                                                               Book
                                             No. of      Total      Total      Value                                                        Estimated    Estimated
                                                                               Not
                                Percentage   Apartment   Capital    Book       Placed     Total      Percentage   Percentage   Percentage   Completion   Stabilization
                                                                    Value      in
Projects          Location      Ownership    Units       Cost (1)   to Date    Service    Debt       Completed    Leased       Occupied     Date         Date
                                                                                                                                                         
Projects Under
Development -
Unconsolidated:
1333 Powell                                                                                 *Story
(formerly         Emeryville,   5.0%         176         $ 75,000   $ 49,332   $ 49,332   $ too
Parkside at       CA                                                                        large*
Emeryville) (2)

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