EX-99.2 3 q12023ex-992.htm EX-99.2 Document

Exhibit 99.2
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For Immediate News Release
April 26, 2023

AVALONBAY COMMUNITIES, INC. ANNOUNCES
FIRST QUARTER 2023 OPERATING RESULTS AND
SECOND QUARTER AND FULL YEAR 2023 FINANCIAL OUTLOOK
(Arlington, VA) AvalonBay Communities, Inc. (NYSE: AVB) (the “Company”) reported Earnings per Share – diluted (“EPS”), Funds from Operations attributable to common stockholders - diluted (“FFO”) per share and Core FFO per share (as defined in this release) for the three months ended March 31, 2023 and 2022 as detailed below.

 Q1
2023
Q1 2022%
Change
EPS$1.05 $1.87 (43.9)%
FFO per share (1)$2.54 $2.24 13.4 %
Core FFO per share (1)$2.57 $2.26 13.7 %
(1) For additional detail on reconciling items between net income attributable to common stockholders, FFO and Core FFO, see Attachment 11, table 2.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended March 31, 2023 to its results for the prior year period:

Q1 2023 Results Compared to Q1 2022
Per Share
EPSFFOCore FFO
Q1 2022 per share reported results$1.87 $2.24 $2.26 
Same Store Residential NOI (1)0.30 0.30 0.30 
Development and Other Stabilized Residential NOI0.06 0.06 0.06 
Overhead and other (0.06)(0.06)(0.03)
Capital markets and transaction activity (0.03)(0.03)(0.03)
Unconsolidated investment income0.04 0.04 0.01 
Income taxes(0.01)(0.01)— 
Casualty loss(0.04)— — 
Gain on sale of real estate and depreciation expense(1.08)— — 
Q1 2023 per share reported results$1.05 $2.54 $2.57 
(1) Consists of increases of $0.39 in revenue and $0.09 in operating expenses.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the
three months ended March 31, 2023 to its February 2023 outlook:
Q1 2023 Results Compared to February 2023 Outlook
Per Share
EPSFFOCore FFO
Projected per share (1)$1.10 $2.51 $2.52 
Same Store Residential NOI (2)0.04 0.04 0.04 
Overhead and other (0.02)(0.02)— 
Capital markets and transaction activity 0.01 0.01 0.01 
Unconsolidated investment income and other0.02 0.02 — 
Income taxes(0.02)(0.02)— 
Casualty loss(0.04)— — 
Gain on sale of real estate and depreciation expense(0.04)— — 
Q1 2023 per share reported results$1.05 $2.54 $2.57 
(1) The mid-point of the Company's February 2023 outlook.
(2) Consists of $0.01 for favorable uncollectible lease revenue and $0.03 for operating expenses.

Same Store Operating Results for the Three Months Ended March 31, 2023 Compared to the Prior Year Period

Same Store total revenue increased $54,285,000, or 9.4%, to $629,929,000. Same Store Residential rental revenue increased $54,168,000, or 9.5%, to $622,449,000, as detailed in the following table:

Copyright © 2023 AvalonBay Communities, Inc. All Rights Reserved
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Same Store Residential Rental Revenue Change
Q1 2023 Compared to Q1 2022
Residential rental revenue
Lease rates8.0 %
Concessions and other discounts1.2 %
Economic occupancy(0.1)%
Other rental revenue0.9 %
Uncollectible lease revenue (excluding rent relief) (1)1.5 %
Rent relief (2)(2.0)%
Residential rental revenue9.5 %
(1) Adjusting to remove the impact of rent relief, uncollectible lease revenue as a percentage of total Residential rental revenue decreased to 3.0% in Q1 2023 from 4.7% in Q1 2022. See Attachment 11, table 10 for further detail of uncollectible lease revenue for the Company’s Same Store portfolio.
(2) The Company recognized $3,056,000 and $14,235,000 from government rent relief programs during Q1 2023 and Q1 2022, respectively.

Same Store Residential operating expenses increased $12,713,000, or 7.1%, to $192,501,000 and Same Store Residential NOI increased $41,569,000, or 10.7%, to $430,430,000.

The following table presents percentage changes in Same Store Residential rental revenue, operating expenses and NOI for the three months ended March 31, 2023 compared to the three months ended March 31, 2022:

Q1 2023 Compared to Q1 2022
Same Store Residential
Rental Revenue
(1)
Opex
(2)
% of
Q1 2023 NOI
 NOI
New England11.5 %5.3 %15.0 %14.3 %
Metro NY/NJ11.7 %9.0 %12.9 %21.1 %
Mid-Atlantic8.1 %2.0 %10.9 %15.0 %
Southeast FL17.3 %6.8 %23.6 %2.8 %
Denver, CO8.4 %19.7 %4.6 %1.1 %
Pacific NW10.5 %7.7 %11.6 %6.8 %
N. California8.6 %7.1 %9.2 %17.2 %
S. California6.4 %9.2 %5.2 %20.8 %
Other Expansion Regions13.8 %11.4 %15.2 %0.9 %
   Total9.5 %7.1 %10.7 %100.0 %
(1) See Attachment 4, Quarterly Residential Rental Revenue and Occupancy Changes, for additional detail.
(2) See Attachment 6, Residential Operating Expenses ("Opex"), for discussion of variances.

Development Activity

Consolidated Development Communities

During the three months ended March 31, 2023, the Company started the development of Avalon Lake Norman, located in Mooresville, NC. Avalon Lake Norman is being developed through the Company's Developer Funding Program ("DFP") and is expected to contain 345 apartment
homes when completed and be developed for an estimated Total Capital Cost of $101,000,000. The Company uses the DFP to accelerate wholly-owned development in the Company's expansion regions, by utilizing third-party multifamily developers to source and construct communities which the Company owns and operates.

At March 31, 2023, the Company had 18 consolidated Development communities under construction that are expected to contain 5,762 apartment homes and 56,000 square feet of commercial space. Estimated Total Capital Cost at completion for these Development communities is $2,360,000,000.

Structured Investment Program (the "SIP") Activity

As of March 31, 2023, the Company had commitments to fund three mezzanine loans for the development of multifamily projects in the Company's markets, up to $92,375,000 in the aggregate. At March 31, 2023, the commitments had a weighted average rate of return of 9.8% and mature at various dates on or before June 2026. As of March 31, 2023, the Company had funded $42,074,000 of these commitments.

Liquidity and Capital Markets

As of March 31, 2023, the Company did not have any borrowings outstanding under its $2,250,000,000 unsecured revolving credit facility (the "Credit Facility") or its $500,000,000 unsecured commercial paper note program. The commercial paper program is backstopped by the Company's commitment to maintain available borrowing capacity under its Credit Facility in an amount equal to actual borrowings under the program.

In addition, at March 31, 2023, the Company had $254,466,000 in unrestricted cash and cash equivalents and $121,598,000 in cash in escrow, which is restricted primarily related to principal reserve funds for secured borrowing arrangements.

The Company’s annualized Net Debt-to-Core EBITDAre (as defined in this release) for the first quarter of 2023 was 4.6 times and Unencumbered NOI (as defined in this release) for the three months ended March 31, 2023 was 95%.

During the three months ended March 31, 2023, the Company repaid $250,000,000 principal amount of its 2.85% unsecured notes at its maturity.

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In April 2023, the Company settled the outstanding equity forward contracts entered into in April 2022 (the "Equity Forward"), issuing 2,000,000 shares of common stock, net of offering fees and discounts, for $491,912,000 or $245.96 per share.

Stock Repurchase Program

Under the 2020 stock repurchase program, during the three months ended March 31, 2023 and through the date of this release, the Company repurchased 11,800 shares of common stock at an average price of $161.96 per share.

Second Quarter and Full Year 2023 Financial Outlook

For its second quarter and full year 2023 financial outlook, the Company expects the following:
Projected EPS, Projected FFO and Projected Core FFO Outlook (1)
 Q2 2023Full Year 2023
 LowHighLowHigh
Projected EPS $2.48 $2.58 $5.69 $6.09 
Projected FFO per share $2.52 $2.62 $10.10 $10.50 
Projected Core FFO per share$2.54 $2.64 $10.21 $10.61 
(1) See Attachment 11, table 8, for reconciliations of Projected FFO per share and Projected Core FFO per share to Projected EPS.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the first quarter 2023 to its second quarter 2023 financial outlook:
Q1 2023 Results Compared to Q2 2023 Outlook
Per Share
EPSFFOCore FFO
Q1 2023 per share reported results $1.05 $2.54 $2.57 
Same Store Residential revenue0.04 0.04 0.04 
Same Store Residential Opex(0.03)(0.03)(0.03)
Capital markets and transaction activity(0.01)(0.01)(0.01)
Overhead and other0.03 0.03 0.02 
Gain on sale of real estate and depreciation expense1.45 — — 
Projected per share - Q2 2023 outlook (1)$2.53 $2.57 $2.59 
(1) Represents the mid-point of the Company's outlook.

The following table compares the Company’s February 2023 outlook for EPS, FFO per share and Core FFO per share for the full year 2023 to its April 2023 financial outlook:

February 2023 Full Year Outlook Compared
to April 2023 Full Year Outlook
Per Share
EPSFFOCore FFO
Projected per share - February 2023 outlook (1)$6.50 $10.24 $10.31 
Same Store Residential revenue0.02 0.02 0.02 
Same Store Residential Opex0.02 0.02 0.02 
Capital markets and transaction activity (2)0.06 0.06 0.06 
Overhead and other(0.04)(0.04)— 
Casualty loss(0.04)— — 
Gain on sale of real estate and depreciation expense(0.63)— — 
Projected per share - April 2023 outlook (1)$5.89 $10.30 $10.41 
(1) Represents the mid-point of the Company's outlook.
(2) Includes $0.03 of interest income on cash deposits net of the dilutive impact from the earlier-than-expected Equity Forward settlement.

Other Matters

The Company will hold a conference call on April 27, 2023 at 1:00 PM ET to review and answer questions about this release, its first quarter 2023 results, the Attachments (described below) and related matters. To participate on the call, dial 877-407-9716.

To hear a replay of the call, which will be available from April 27, 2023 at 4:00 PM ET to May 27, 2023, dial 844-512-2921 and use replay passcode: 13734359. A webcast of the conference call will also be available at http://investors.avalonbay.com, and an online playback of the webcast will be available for at least seven days following the call.

The Company produces Earnings Release Attachments (the "Attachments") that provide detailed information regarding operating, development, redevelopment, disposition and acquisition activity. These Attachments are considered a part of this earnings release and are available in full with this earnings release via the Company's website at http://investors.avalonbay.com. To receive future press releases via e-mail, please submit a request through http://investors.avalonbay.com/email_notification.

In addition to the Attachments, the Company is providing a teleconference presentation that will be available on the Company's website at http://investors.avalonbay.com subsequent to this release and before the market opens on April 27, 2023.

About AvalonBay Communities, Inc.

As of March 31, 2023, the Company owned or held a direct or indirect ownership interest in 295 apartment communities
Copyright © 2023 AvalonBay Communities, Inc. All Rights Reserved
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containing 88,826 apartment homes in 12 states and the District of Columbia, of which 19 communities were under development and one community was under redevelopment. The Company is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in leading metropolitan areas in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California, as well as in the Company's expansion regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado. More information may be found on the Company’s website at http://www.avalonbay.com. For additional information, please contact Jason Reilley, Vice President of Investor Relations, at 703-317-4681.

Forward-Looking Statements

This release, including its Attachments, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements, which you can identify by the Company’s use of words such as “expects,” “plans,” “estimates,” “anticipates,” “projects,” “intends,” “believes,” “outlook,” "may," "shall," "will," "pursue" and similar expressions that predict or indicate future events and trends and that do not report historical matters, are based on the Company’s expectations, forecasts and assumptions at the time of this release, which may not be realized and involve risks and uncertainties that cannot be predicted accurately or that might not be anticipated. These could cause actual results, performance or achievements to differ materially from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements. Risks and uncertainties that might cause such differences include the following: we may abandon development or redevelopment opportunities for which we have already incurred costs; adverse capital and credit market conditions, including rising interest rates, may affect our access to various sources of capital and/or cost of capital, which may affect our business activities, earnings and common stock price, among other things; changes in local employment conditions, demand for apartment homes, supply of competitive housing products, landlord-tenant laws, including the adoption of rent control regulations, and other economic or regulatory conditions may result in lower than expected occupancy and/or rental rates and adversely affect the profitability of our communities; delays in completing development, redevelopment and/or lease-up, and general price inflation, may result in increased financing and construction costs and may delay and/or reduce the profitability of a community; debt and/or equity
financing for development, redevelopment or acquisitions of communities may not be available or may not be available on favorable terms; we may be unable to obtain, or experience delays in obtaining, necessary governmental permits and authorizations; expenses may result in communities that we develop or redevelop failing to achieve expected profitability; our assumptions concerning risks relating to joint ventures and our ability to successfully dispose of certain assets may not be realized; investments made under the Structured Investment Program in either mezzanine debt or preferred equity of third-party multifamily development may not be repaid as expected; our assumptions and expectations in our financial outlook may prove to be too optimistic; litigation costs and consequences may exceed our expectations; and risks related to pandemics, including the effect, among other factors, on the multifamily industry and the general economy of measures taken by businesses and the government, such as governmental limitations on the ability of multifamily owners to evict residents who are delinquent in the payment of their rent, the preferences of consumers and businesses for living and working arrangements, and federal efforts at economic stimulus. Additional discussions of risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements appear in the Company’s filings with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 under the heading “Risk Factors” and under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements” and in subsequent quarterly reports on Form 10-Q.

The Company does not undertake a duty to update forward-looking statements, including its expected 2023 operating results and other financial data forecasts contained in this release. The Company may, in its discretion, provide information in future public announcements regarding its outlook that may be of interest to the investment community. The format and extent of future outlooks may be different from the format and extent of the information contained in this release.
 
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Definitions and Reconciliations

Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined, reconciled and further explained on Attachment 11, Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. Attachment 11 is included in the full earnings release available at the Company’s website at http://investors.avalonbay.com.

Copyright © 2023 AvalonBay Communities, Inc. All Rights Reserved
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er-q1x2023.jpg
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 FIRST QUARTER 2023
 
Supplemental Operating and Financial Data
 
Table of Contents
 
Company Profile  
Condensed Consolidated Operating Information..........................................................................................................Attachment 1
Condensed Consolidated Balance Sheets....................................................................................................................Attachment 2
Sequential Operating Information.................................................................................................................................Attachment 3
  
Market Profile - Same Store  
Quarterly Residential Rental Revenue and Occupancy Changes................................................................................Attachment 4
Sequential Quarterly Residential Rental Revenue and Occupancy Changes..............................................................Attachment 5
Residential Operating Expenses ("Opex")....................................................................................................................Attachment 6
  
Development, Joint Venture and Debt Profile  
Expensed Community Maintenance Costs and Capitalized Community Expenditures................................................Attachment 7
Development Communities...........................................................................................................................................Attachment 8
Unconsolidated Real Estate Investments.....................................................................................................................Attachment 9
Debt Structure and Select Debt Metrics........................................................................................................................Attachment 10
Definitions and Reconciliations  
Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms...................................................Attachment 11

 
The following is a "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The projections and estimates contained in the following attachments, including but not limited to Attachments 8, 9, and 11 contain forward-looking statements that involve risks and uncertainties, and actual results may differ materially from those projected in such statements. Risks associated with the Company's development, redevelopment, construction, and lease-up activities which could impact the forward-looking statements are discussed in the paragraph titled "Forward-Looking Statements" in the release that accompanies, and should be read in conjunction with, these attachments. These and other risks are also described in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and the Company's Quarterly Reports on Form 10-Q for subsequent quarters, and could cause actual results to differ materially from such projections and estimates.
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Attachment 1
AvalonBay Communities, Inc.
Condensed Consolidated Operating Information
March 31, 2023
(Dollars in thousands except per share data)
(unaudited)
Q1Q1
20232022% Change
Revenue:   
Rental and other income$673,642 $613,175 9.9 %
Management, development and other fees1,066 752 41.8 %
Total674,708 613,927 9.9 %
Operating expenses:
Direct property operating expenses, excluding property taxes132,981 122,461 8.6 %
Property taxes74,495 70,738 5.3 %
Total community operating expenses207,476 193,199 7.4 %
Property management and other indirect operating expenses(31,851)(28,851)10.4 %
Expensed transaction, development and other pursuit costs, net of recoveries (1)(2,992)(987)203.1 %
Interest expense, net (1)(56,821)(56,526)0.5 %
Depreciation expense(204,743)(201,786)1.5 %
General and administrative expense (1)(20,400)(17,421)17.1 %
Casualty loss (2)(5,051)— (100.0)%
Income from investments in unconsolidated entities (1)4,845 317 N/A
(Loss) gain on sale of communities(13)148,800 N/A
Other real estate activity (1)129 273 (52.7)%
Income before income taxes150,335 264,547 (43.2)%
Income tax expense (1)(3,560)(2,471)44.1 %
Net income146,775 262,076 (44.0)%
Net loss (income) attributable to noncontrolling interests 127 (32)N/A
Net income attributable to common stockholders$146,902 $262,044 (43.9)%
Net income attributable to common stockholders per common share - basic$1.05 $1.87 (43.9)%
Net income attributable to common stockholders per common share - diluted$1.05 $1.87 (43.9)%
FFO (1)$355,258 $313,908 13.2 %
Per common share - diluted$2.54 $2.24 13.4 %
Core FFO (1)$359,970 $316,923 13.6 %
Per common share - diluted$2.57 $2.26 13.7 %
Dividends declared - common$231,438 $222,754 3.9 %
Per common share$1.65 $1.59 3.8 %
Average shares and participating securities outstanding - basic140,021,257 139,838,920 0.1 %
Average shares outstanding - diluted140,023,810 139,976,082 — %
Total outstanding common shares and operating partnership units140,010,356 139,825,568 0.1 %
(1)Amounts include non-Core items as detailed in Attachment 11 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms, table 2.
(2)During the three months ended March 31, 2023, certain of the Company's communities in each of the Northeast and California regions incurred property damage from severe storms. See Attachment 11 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms, table 2.
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Attachment 2
 
AvalonBay Communities, Inc.
Condensed Consolidated Balance Sheets
March 31, 2023
(Dollars in thousands)
(unaudited)
 
 March 31,December 31,
 20232022
Real estate$24,700,941 $24,619,616 
Less accumulated depreciation(7,058,327)(6,878,556)
Net operating real estate17,642,614 17,741,060 
Construction in progress, including land1,211,405 1,072,543 
Land held for development177,889 179,204 
Real estate assets held for sale, net11,832 — 
Total real estate, net19,043,740 18,992,807 
Cash and cash equivalents254,466 613,189 
Cash in escrow121,598 121,056 
Resident security deposits36,347 36,815 
Investments in unconsolidated entities219,143 212,084 
Other assets499,601 481,813 
Total assets$20,174,895 $20,457,764 
Unsecured notes, net$7,353,721 $7,602,305 
Unsecured credit facility and commercial paper— — 
Notes payable, net713,174 713,740 
Resident security deposits64,097 63,700 
Other liabilities871,913 821,781 
Total liabilities9,002,905 9,201,526 
Redeemable noncontrolling interests2,734 2,685 
Equity11,169,256 11,253,553 
Total liabilities and equity$20,174,895 $20,457,764 


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Attachment 3
AvalonBay Communities, Inc.
Sequential Operating Information (1)
March 31, 2023
(Dollars in thousands, except per home data)
(unaudited)
Total Apartment
Homes
Quarter Ended
March 31, 2023
Quarter Ended
December 31, 2022
Residential Rental Revenue (2)  
Same Store75,518 $622,449 $615,807 
Other Stabilized (3)3,743 27,401 26,620 
Development/Redevelopment (4)6,648 10,325 8,858 
Commercial Rental Revenue (2)N/A10,471 10,891 
     Total Rental Revenue85,909 $670,646 $662,176 
Residential Operating Expense
Same Store$192,501 $186,681 
Other Stabilized (3)8,658 7,213 
Development/Redevelopment4,242 3,386 
Commercial Operating Expense1,718 1,649 
Total Operating Expense$207,119 $198,929 
Residential NOI
Same Store$430,430 $429,650 
Other Stabilized (3)19,764 20,238 
Development/Redevelopment6,092 5,480 
Commercial NOI8,753 9,242 
Total NOI$465,039 $464,610 
Same Store Average Rental Revenue per Occupied Home (5)$2,859 $2,837 
Same Store Economic Occupancy96.1 %95.8 %
Same Store Turnover (6)
Current year period / Prior year period37.2% / 35.9%39.2% / 37.8%
SAME STORE LIKE-TERM EFFECTIVE RENT CHANGE
January 2023February 2023March 2023April 2023 (7)
  New England5.1 %5.3 %6.1 %6.9 %
  Metro NY/NJ5.5 %4.8 %4.3 %4.6 %
  Mid-Atlantic2.3 %2.9 %3.8 %4.2 %
  Southeast FL7.2 %6.2 %3.7 %5.1 %
  Denver, CO1.9 %4.5 %1.5 %2.7 %
  Pacific NW3.7 %4.3 %4.5 %4.5 %
  N. California2.4 %3.7 %3.6 %3.6 %
  S. California2.6 %3.9 %5.0 %5.4 %
  Other Expansion Regions1.4 %6.4 %5.9 %(0.2)%
     Total3.7 %4.2 %4.6 %4.9 %
(1)Includes consolidated communities and excludes communities that have been sold or that are classified as held for sale. See Attachment 11 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms for the definition of capitalized terms.
(2)Rental revenue excludes non-qualified REIT income.
(3)Results for these communities prior to January 1, 2023 may reflect operations prior to stabilization, including lease-up, such that occupancy is not stabilized.
(4)For per home rent projections and Economic Occupancy for Development communities currently under construction, see Attachment 8 - Development Communities.
(5)Reflects the effect of Residential concessions amortized over the average lease term and includes uncollectible lease revenue and revenue from government rent relief programs.
(6)Turnover is the annualized number of units turned over during the period, divided by the total number of Same Store apartment homes for the respective period, and excludes any third-party managed communities.
(7)Rent change percentage for activity in April 2023 through April 24, 2023.
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Attachment 4
AvalonBay Communities, Inc.
Quarterly Residential Rental Revenue and Occupancy Changes - Same Store (1)
March 31, 2023
(unaudited)
 Apartment HomesAverage Monthly Rental Revenue
Per Occupied Home
Economic OccupancyResidential Rental Revenue ($000s)(2)
% Change Excluding
Rent Relief (3)
  Q1 23Q1 22% ChangeQ1 23Q1 22% ChangeQ1 23Q1 22% Change
          
  New England9,871 $3,226 $2,880 12.0 %96.6 %97.1 %(0.5)%$92,278 $82,737 11.5 %13.0 %
  Metro NY/NJ
     New York City, NY3,788 3,962 3,454 14.7 %96.9 %97.1 %(0.2)%43,637 38,108 14.5 %15.3 %
     New York - Suburban3,792 3,470 3,227 7.5 %94.8 %95.7 %(0.9)%37,416 35,083 6.6 %6.3 %
     New Jersey5,415 3,187 2,795 14.0 %96.2 %96.9 %(0.7)%49,799 43,970 13.3 %13.4 %
  Metro NY/NJ12,995 3,495 3,111 12.3 %96.0 %96.6 %(0.6)%130,852 117,161 11.7 %11.9 %
  Mid-Atlantic
     Washington DC2,626 2,560 2,337 9.5 %93.6 %94.5 %(0.9)%18,867 17,374 8.6 %9.2 %
     Northern Virginia6,032 2,469 2,262 9.2 %95.7 %95.8 %(0.1)%42,768 39,210 9.1 %9.6 %
     Suburban Maryland2,595 2,148 2,039 5.3 %96.3 %95.6 %0.7 %16,101 15,183 6.0 %7.0 %
     Baltimore, MD2,317 2,063 1,945 6.1 %95.7 %94.9 %0.8 %13,720 12,829 6.9 %8.0 %
  Mid-Atlantic13,570 2,356 2,179 8.1 %95.4 %95.4 %0.0 %91,456 84,596 8.1 %8.8 %
  Southeast FL2,187 2,887 2,477 16.6 %97.3 %96.6 %0.7 %18,441 15,722 17.3 %20.0 %
  Denver, CO1,086 2,211 2,032 8.8 %95.1 %95.5 %(0.4)%6,846 6,314 8.4 %8.7 %
  Pacific Northwest5,474 2,646 2,383 11.0 %95.4 %95.9 %(0.5)%41,456 37,504 10.5 %10.7 %
  Northern California
     San Jose, CA4,723 2,943 2,683 9.7 %96.8 %96.4 %0.4 %40,373 36,663 10.1 %11.1 %
     Oakland - East Bay, CA4,338 2,689 2,518 6.8 %96.3 %96.2 %0.1 %33,713 31,535 6.9 %8.3 %
     San Francisco, CA3,072 3,405 3,160 7.8 %96.0 %95.3 %0.7 %30,128 27,756 8.5 %11.1 %
  Northern California12,133 2,969 2,745 8.2 %96.4 %96.0 %0.4 %104,214 95,954 8.6 %10.2 %
  Southern California
     Los Angeles, CA12,139 2,617 2,482 5.4 %96.3 %96.1 %0.2 %91,727 86,852 5.6 %14.6 %
     Orange County, CA3,371 2,656 2,441 8.8 %95.7 %96.7 %(1.0)%25,700 23,832 7.8 %11.5 %
     San Diego, CA1,767 2,689 2,463 9.2 %96.9 %96.7 %0.2 %13,809 12,626 9.4 %11.7 %
  Southern California17,277 2,632 2,471 6.5 %96.2 %96.3 %(0.1)%131,236 123,310 6.4 %13.6 %
  Other Expansion Regions925 2,143 1,907 12.4 %95.3 %93.9 %1.4 %5,670 4,983 13.8 %13.8 %
        Total Same Store75,518 $2,859 $2,608 9.6 %96.1 %96.2 %(0.1)%$622,449 $568,281 9.5 %11.8 %
(1) Same Store is composed of communities with Stabilized Operations as of January 1, 2022 such that a comparison of Q1 2022 to Q1 2023 is meaningful.
(2) Reflects Residential concessions amortized over the average lease term and includes uncollectible lease revenue and revenue from government rent relief programs. Residential Rental Revenue with Concessions on a Cash Basis
for the Company's Same Store portfolio was 8.1%. See Attachment 11, table 9.
(3) Represents the change in Residential Rental Revenue adjusted to remove the impact of governmental rent relief in the periods presented. See Attachment 11, table 10 for further detail of uncollectible lease revenue and government
rent relief for the Company's Same Store portfolio.
11



Attachment 5
AvalonBay Communities, Inc.
Sequential Quarterly Residential Rental Revenue and Occupancy Changes - Same Store (1)
March 31, 2023
(unaudited)
 Apartment HomesAverage Monthly Rental Revenue
Per Occupied Home
Economic OccupancyResidential Rental Revenue ($000s)(2)
% Change Excluding
Rent Relief (3)
  Q1 23Q4 22% ChangeQ1 23Q4 22% ChangeQ1 23Q4 22% Change
          
  New England9,871 $3,226 $3,200 0.8 %96.6 %96.7 %(0.1)%$92,278 $91,672 0.7 %0.6 %
  Metro NY/NJ
     New York City, NY3,788 3,962 3,937 0.6 %96.9 %97.0 %(0.1)%43,637 43,402 0.5 %0.5 %
     New York - Suburban3,792 3,470 3,445 0.7 %94.8 %95.1 %(0.3)%37,416 37,252 0.4 %(0.1)%
     New Jersey5,415 3,187 3,183 0.1 %96.2 %96.1 %0.1 %49,799 49,687 0.2 %0.4 %
  Metro NY/NJ12,995 3,495 3,478 0.5 %96.0 %96.1 %(0.1)%130,852 130,341 0.4 %0.3 %
  Mid-Atlantic
     Washington DC2,626 2,560 2,487 2.9 %93.6 %94.1 %(0.5)%18,867 18,423 2.4 %2.2 %
     Northern Virginia6,032 2,469 2,467 0.1 %95.7 %95.1 %0.6 %42,768 42,485 0.7 %0.9 %
     Suburban Maryland2,595 2,148 2,146 0.1 %96.3 %95.2 %1.1 %16,101 15,904 1.2 %1.8 %
     Baltimore, MD2,317 2,063 2,080 (0.8)%95.7 %94.7 %1.0 %13,720 13,695 0.2 %1.1 %
  Mid-Atlantic13,570 2,356 2,344 0.5 %95.4 %94.9 %0.5 %91,456 90,507 1.0 %1.3 %
  Southeast FL2,187 2,887 2,807 2.9 %97.3 %97.3 %0.0 %18,441 17,928 2.9 %2.9 %
  Denver, CO1,086 2,211 2,246 (1.6)%95.1 %95.4 %(0.3)%6,846 6,979 (1.9)%(1.2)%
  Pacific Northwest5,474 2,646 2,647 0.0 %95.4 %94.7 %0.7 %41,456 41,173 0.7 %0.8 %
  Northern California
     San Jose, CA4,723 2,943 2,915 1.0 %96.8 %95.6 %1.2 %40,373 39,521 2.2 %2.2 %
     Oakland - East Bay, CA4,338 2,689 2,676 0.5 %96.3 %96.0 %0.3 %33,713 33,448 0.8 %1.4 %
     San Francisco, CA3,072 3,405 3,369 1.1 %96.0 %95.7 %0.3 %30,128 29,720 1.4 %1.4 %
  Northern California12,133 2,969 2,943 0.9 %96.4 %95.8 %0.6 %104,214 102,689 1.5 %1.7 %
  Southern California
     Los Angeles, CA12,139 2,617 2,571 1.8 %96.3 %96.1 %0.2 %91,727 89,957 2.0 %2.0 %
     Orange County, CA3,371 2,656 2,647 0.3 %95.7 %94.8 %0.9 %25,700 25,391 1.2 %1.3 %
     San Diego, CA1,767 2,689 2,684 0.2 %96.9 %95.8 %1.1 %13,809 13,632 1.3 %1.3 %
  Southern California17,277 2,632 2,598 1.3 %96.2 %95.8 %0.4 %131,236 128,980 1.7 %1.8 %
  Other Expansion Regions925 2,143 2,106 1.8 %95.3 %94.7 %0.6 %5,670 5,538 2.4 %2.4 %
        Total Same Store75,518 $2,859 $2,837 0.8 %96.1 %95.8 %0.3 %$622,449 $615,807 1.1 %1.2 %
(1) Same Store is composed of communities with Stabilized Operations as of January 1, 2022.
(2) Reflects Residential concessions amortized over the average lease term and includes uncollectible lease revenue and revenue from government rent relief programs. Residential Rental Revenue with Concessions on a Cash Basis
for the Company's Same Store portfolio was 1.3%. See Attachment 11, table 9.
(3) Represents the change in Residential Rental Revenue adjusted to remove the impact of governmental rent relief in the periods presented. See Attachment 11, table 10 for further detail of uncollectible lease revenue and government
rent relief for the Company's Same Store portfolio.
12



Attachment 6
AvalonBay Communities, Inc.
Residential Operating Expenses ("Opex") - Same Store (1)
March 31, 2023
(Dollars in thousands)
(unaudited)
Q1
2023
Q1
2022
% ChangeQ1 2023 % of
Total Opex
Property taxes (2)$68,815 $65,837 4.5 %35.8 %
Payroll (3)38,336 38,986 (1.7)%19.9 %
Repairs & maintenance (4)30,086 28,629 5.1 %15.6 %
Utilities (5)24,547 19,910 23.3 %12.8 %
Office operations (6)18,496 15,052 22.9 %9.6 %
Insurance (7)8,704 7,819 11.3 %4.5 %
Marketing3,517 3,555 (1.1)%1.8 %
Total Same Store Residential Operating Expenses$192,501 $179,788 7.1 %100.0 %

(1)Same Store operating expenses exclude indirect costs for corporate-level property management and other support-related expenses.
(2)Property taxes increased for the three months ended March 31, 2023 over the prior year period due to (i) increased assessments across the portfolio and (ii) the expiration of property tax incentive programs primarily at certain of our properties in New York City. The expiration of property tax incentive programs represents $1,041 or 35% of the 4.5% increase in property taxes for the three months ended March 31, 2023.
(3)Payroll costs decreased for the three months ended March 31, 2023 from the prior year period primarily due to a reduction in on-site leasing and administrative personnel, a decrease in incentive compensation and lower benefit costs.
(4)Repairs and maintenance increased for the three months ended March 31, 2023 over the prior year period due to increased contract labor and turnover costs, partially offset by increased maintenance rebates and damage receipts as compared to the prior year period.
(5)Utilities represents aggregate utility costs, net of resident reimbursements. The increase for the three months ended March 31, 2023 over the prior year period is primarily due to the Company’s implementation of a bulk internet offering at its communities, which is more than offset by bulk internet revenue, as well as increases in electricity and gas rates and trash removal costs.
(6)Office operations includes administrative costs, legal and eviction costs, land lease expense and association and license fees. The increase for the three months ended March 31, 2023 over the prior year period is primarily due to (i) bad debt expense associated with resident expense reimbursements, damage receipts and other related items, (ii) legal costs, (iii) credit card fees (which are offset in revenue) and (iv) furnished housing furniture rental costs which are more than offset by furnished housing rental premiums.
(7)Insurance is composed of premiums, expected claims activity and associated reductions from receipt of claims recoveries. The increase for the three months ended March 31, 2023 over the prior year period is due to increased property insurance premiums and timing of claims. Insurance costs can be variable due to the amounts and timing of estimated and actual claim activity and the related recoveries received.
13



Attachment 7
AvalonBay Communities, Inc.
Expensed Community Maintenance Costs and Capitalized Community Expenditures
March 31, 2023
(Dollars in thousands except per home data)
(unaudited)
Q1 2023 Maintenance
Expensed Per Home
Categorization of Q1 2023
Additional Capitalized Value (1)
Current Communities Apartment Homes (2)Carpet ReplacementOther Maintenance (3)TotalAcquisitions, Construction, Redevelopment & Dispositions (4)NOI Enhancing (5)Asset PreservationQ1 2023 Additional Capitalized ValueNOI Enhancing Per HomeAsset Preservation Per Home
Same Store75,518 $26 $643 $669 $12,056 (6)$7,017 $22,488 $41,561 $93 $298 
Other Stabilized3,743 11 483 494 2,683 (7)102 54 2,839 $27 $14 
Development/Redevelopment (8)6,648 149 153 205,067 — — 205,067 — — 
Dispositions (9)— — — — (3,478)— — (3,478)— — 
        Total 85,909 $24 $598 $622 $216,328 $7,119 $22,542 $245,989 N/AN/A

(1)Expenditures are capitalized for the acquisition or development of new assets or for expenditures that extend the life of existing assets and benefit the Company for periods greater than a year.
(2)Includes consolidated communities and excludes communities that have been sold or that are classified as held for sale.
(3)Other maintenance includes maintenance, landscaping and redecorating costs, as well as maintenance related payroll expense.
(4)Includes the write-off of impaired assets and additional capitalized expenditures related to recognized casualty losses, if applicable.
(5)This Attachment excludes capitalized expenditures for the commercial component of communities, which the Company classifies as NOI Enhancing. Same Store and Other Stabilized exclude $1,408 and $53, respectively, related to commercial space.
(6)Consists primarily of expenditures for communities under redevelopment that have remained in Same Store with stabilized occupancy.
(7)Represents acquired communities coupled with commitment close-outs and construction true-ups on recently constructed communities.
(8)Includes communities under construction/reconstruction during the period, including communities where construction/reconstruction is complete.
(9)Includes The Park Loggia condominium sales.
Other Capitalized Costs
InterestOverhead
Q1 2023$11,018 $13,552 
Q4 2022$10,430 $11,600 
Q3 2022$9,131 $12,934 
Q2 2022$8,193 $13,417 

14



Attachment 8
AvalonBay Communities, Inc.
Development Communities as of March 31, 2023
(unaudited)
Community InformationNumberTotalActual/Projected ScheduleAvg%%%%
 ofCapital   Full QtrMonthlyCompleteLeasedOccupiedEconomic
 AptCost Initial StabilizedRental Rev   Occ.
Development NameLocationHomes(millions)StartOccupancyCompleteOpsPer HomeAs of April 12, 2023Q1 '23
Communities Under Construction:
1.Avalon Harrison (1)Harrison, NY143 $94 Q4 2018Q3 2021Q2 2023Q4 2023$4,100 79 %57 %51 %47 %
2.Avalon Somerville StationSomerville, NJ374 122 Q4 2020Q2 2022Q3 2023Q1 20243,150 76 %72 %67 %56 %
3.Avalon North AndoverNorth Andover, MA221 78 Q2 2021Q4 2022Q3 2023Q4 20232,750 77 %61 %55 %43 %
4.Avalon BrightonBoston, MA180 89 Q2 2021Q1 2023Q2 2023Q4 20233,810 37 %34 %10 %%
5.Avalon Merrick Park (2)Miami, FL254 102 Q2 2021Q2 2023Q3 2023Q2 20242,835 — — — — 
6.Avalon AmityvilleAmityville, NY338 135 Q2 2021Q2 2023Q2 2024Q4 20243,110 — — — — 
7.Avalon Bothell Commons IBothell, WA467 236 Q2 2021Q3 2023Q3 2024Q2 20252,965 — — — — 
8.Avalon Westminster PromenadeWestminster, CO312 110 Q3 2021Q1 2024Q2 2024Q1 20252,130 — — — — 
9.Avalon West DublinDublin, CA499 270 Q3 2021Q4 2023Q1 2025Q2 20253,245 — — — — 
10.Avalon Princeton CirclePrinceton, NJ221 88 Q4 2021Q2 2023Q1 2024Q3 20243,565 — %— — 
11.Avalon MontvilleMontville, NJ349 127 Q4 2021Q4 2023Q3 2024Q4 20242,895 — — — — 
12.Avalon Redmond Campus (3)Redmond, WA214 80 Q4 2021Q4 2023Q2 2024Q4 20242,795 — — — — 
13.Avalon Governor's ParkDenver, CO304 135 Q1 2022Q2 2024Q3 2024Q2 20252,690 — — — — 
14.Avalon West Windsor (1)West Windsor, NJ535 201 Q2 2022Q2 2025Q3 2026Q1 20272,995 — — — — 
15.Avalon Durham (2)Durham, NC336 125 Q2 2022Q2 2024Q3 2024Q2 20252,270 — — — — 
16.Avalon AnnapolisAnnapolis, MD508 202 Q3 2022Q3 2024Q3 2025Q2 20262,700 — — — — 
17.Kanso MilfordMilford, MA162 65 Q4 2022Q1 2024Q3 2024Q1 20252,600 — — — — 
18.Avalon Lake Norman (2)Mooresville, NC345 101 Q1 2023Q4 2024Q4 2025Q2 20261,945 — — — — 
Total / Weighted Average Under Construction 5,762 $2,360 $2,870 
Total Weighted Average Projected NOI as a % of Total Capital Cost5.8 %
Asset Cost Basis (millions) (4):          
 Total Capital Cost, under construction and completed $2,454    
 Total Capital Cost, disbursed to date(1,373)    
 Total Capital Cost, remaining to invest$1,081       
(1)Developments containing at least 10,000 square feet of commercial space include Avalon Harrison (27,000 sf) and Avalon West Windsor (19,000 sf).
(2)Communities being developed through the Developer Funding Program.
(3)Avalon Redmond Campus is a densification of the Company's existing eaves Redmond Campus wholly-owned community, where 48 existing older apartment homes were demolished and are being replaced by Avalon Redmond Campus. As a densification, this community is excluded from the weighted average Projected NOI as a % of Total Capital Cost.
(4)Includes the communities presented and one additional community with 172 apartment homes representing $94 million in Total Capital Costs which completed construction but had not yet achieved Stabilized Operations for the full quarter. Q1 2023 total NOI for these 19 communities was $2.5 million.

15



Attachment 9
AvalonBay Communities, Inc.
Unconsolidated Real Estate Investments
March 31, 2023
(Dollars in thousands)
(unaudited)
Operating Communities
  NOI (1)(2)Debt
AVBApartmentQ1PrincipalInterest
VentureCommunitiesOwnershipHomes2023Amount (1)Rate (3)
NYTA MF Investors, LLC520.0 %1,301 $10,234 $395,189 3.88 %
MVP I, LLC125.0 %313 2,041 103,000 3.24 %
Brandywine Apartments of Maryland, LLC 128.7 %305 1,153 19,566 3.40 %
Avalon Alderwood MF, LLC150.0 %328 1,693 — — %
Total Unconsolidated Real Estate Investments82,247 $15,121 $517,755 3.73 %


Development Communities
ProjectedAvg%
Total CapitalProjectedMonthlyComplete
AVBApartmentCostInitialRental RevAs of April 12, 2023
VentureLocationOwnershipHomes (millions) (1)StartOccupancyCompletePer Home
Arts District Joint Venture (4)Los Angeles, CA25.0 %475$288 Q3 2020Q3 2023Q4 2023$3,360 — 

(1)NOI, debt principal amount and projected Total Capital Cost are presented at 100% ownership.
(2)NOI excludes property management fees as the Company serves as the property management company for all ventures except Brandywine Apartments of Maryland, LLC.
(3)Represents the weighted average interest rate as of March 31, 2023.
(4)This development is expected to include 56,000 square feet of commercial space. As of March 31, 2023, the Company had contributed its full expected equity commitment of $31,139. The remaining development costs are expected to be funded by the venture's variable rate construction loan. The venture had drawn $99,130 of the $167,147 maximum borrowing capacity of the construction loan as of March 31, 2023.
16



Attachment 10
AvalonBay Communities, Inc.
Debt Structure and Select Debt Metrics
March 31, 2023
(Dollars in thousands)
(unaudited)
DEBT COMPOSITION AND MATURITIES
Average Interest Rate (1)Principal Amortization Payments and Maturities (2)
Debt CompositionAmountYearSecured notes amortization and maturitiesUnsecured notes maturitiesTotal
Secured notes2023$7,400 $350,000 $357,400 
Fixed rate$270,677 3.4 %20249,100 450,000 459,100 
Variable rate456,250 5.6 %20259,700 825,000 834,700 
Subtotal, secured notes 726,927 4.8 %202610,600 775,000 785,600 
2027249,000 400,000 649,000 
Unsecured notes202817,600 850,000 867,600 
Fixed rate7,250,000 3.3 %202974,750 450,000 524,750 
Variable rate150,000 5.9 %20309,000 700,000 709,000 
Subtotal, unsecured notes 7,400,000 3.3 %20319,600 600,000 609,600 
203210,300 700,000 710,300 
Variable rate facility (3)— — %Thereafter319,877 1,300,000 1,619,877 
Commercial paper (3)— — %$726,927 $7,400,000 $8,126,927 
Total Debt$8,126,927 3.5 %
SELECT DEBT METRICS
Q1 2023
Net Debt-to-Core EBITDAre (4)
4.6xQ1 2023 Interest Coverage (4)6.9xQ1 2023
Unencumbered NOI (4)
95%Weighted avg years to maturity of total debt (2)7.9
DEBT COVENANT COMPLIANCE
Unsecured Line of Credit CovenantsMarch 31, 2023Requirement
Total Outstanding Indebtedness to Capitalization Value (5)26.5 %<65%
Combined EBITDA to Combined Debt Service6.23x>1.50x
Unsecured Indebtedness to Unencumbered Asset Value24.8 %<65%
Secured Indebtedness to Capitalization Value (5)2.8 %<40%
Unsecured Senior Notes Covenants (6)March 31, 2023Requirement
Total Outstanding Indebtedness to Total Assets (7)31.0 %<65%
Secured Indebtedness to Total Assets (7)2.7 %<40%
Unencumbered Assets to Unsecured Indebtedness336.0 %>150%
Consolidated Income Available for Debt Service to the Annual Service Charge6.84x>1.50x
(1)
Rates are as of March 31, 2023 and, for secured and unsecured notes, include costs of financing such as credit enhancement fees, trustees' fees, the impact of interest rate hedges and mark-to-market adjustments.
(2)
Excludes the Company's (i) Credit Facility, (ii) commercial paper and (iii) any associated issuance discount, mark-to-market discounts and deferred financing costs, if applicable.
(3)
Represents amounts outstanding at March 31, 2023 under the Company's (i) $2.25 billion Credit Facility and (ii) $500 million unsecured commercial paper program, which is backstopped by, and reduces the borrowing capacity of, the Credit Facility.
(4)
See Attachment 11 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.
(5)
Capitalization Value represents the Company’s Combined EBITDA for operating communities that the Company has owned for at least 12 months as of March 31, 2023, capitalized at a rate of 5.75% per annum, plus the book value of Development communities and real estate communities acquired. For discussion of other defined terms, see "Debt Covenant Compliance" in Attachment 11 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.
(6)
The information about the Company’s unsecured senior notes covenants shows compliance with selected covenants under the Company’s 1998 Indenture, under which debt securities are outstanding with maturity dates through 2047, subject to prepayment or redemption at the Company’s election. See “Debt Covenant Compliance” in Attachment 11 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. Different covenants apply to debt securities outstanding under the Company’s 2018 Indenture.
(7)
Total Assets represents the sum of the Company's undepreciated real estate assets and other assets, excluding accounts receivable. See "Debt Covenant Compliance" in Attachment 11 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.
17



Attachment 11
 
AvalonBay Communities, Inc.
Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms
March 31, 2023
(unaudited)
 
This release, including its attachments, contains certain non-GAAP financial measures and other terms. The definitions and calculations of these non-GAAP financial measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. The non-GAAP financial measures referred to below should not be considered an alternative to net income as an indication of our performance. In addition, these non-GAAP financial measures do not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered as an alternative measure of liquidity or as indicative of cash available to fund cash needs.
 
Asset Preservation Capex represents capital expenditures that the Company does not expect will directly result in increased revenue or expense savings.

Average Monthly Rental Revenue per Home, as calculated for certain Development communities in lease-up, reflects management’s projected stabilized rents net of estimated stabilized concessions, including estimated stabilized other rental revenue and excluding projected commercial revenue. Projected stabilized rents are based on one or more of the following: (i) actual average leased rents on apartments leased through quarter end, (ii) projected rollover rents on apartments leased through quarter end where the lease term expires within the first twelve months of Stabilized Operations and (iii) Market Rents on unleased homes.

Average Monthly Rental Revenue per Occupied Home is calculated by the Company as Residential rental revenue in accordance with GAAP, divided by the weighted average number of occupied apartment homes.

Commercial represents results attributable to the non-apartment components of the Company's mixed-use communities and other non-residential operations.

Debt Covenant Compliance ratios for the Unsecured Line of Credit Covenants show the Company's compliance with selected covenants provided in the Company’s Sixth Amended and Restated Revolving Loan Agreement dated as of September 27, 2022 and the Company’s Amended and Restated Term Loan Agreement dated February 28, 2019, as amended on October 27, 2022, which have been or will be filed as exhibits to the Company’s SEC reports. The ratios for the Unsecured Senior Notes Covenants show only the Company's compliance with selected covenants provided in the Company’s Indenture dated as of January 16, 1998, as supplemented by the First Supplemental Indenture dated as of January 20, 1998, Second Supplemental Indenture dated as of July 7, 1998, Amended and Restated Third Supplemental Indenture dated as of July 20, 2000, Fourth Supplemental Indenture dated as of September 18, 2006 and Fifth Supplemental Indenture dated as of November 21, 2014 (collectively, the “1998 Indenture"), which have been filed as exhibits to the Company’s SEC reports. Different covenants apply to debt securities outstanding under the Company’s Indenture dated as of February 23, 2018, as supplemented by the First Supplemental Indenture dated as of March 26, 2018 and the Second Supplemental Indenture dated as of May 29, 2018 (collectively, the “2018 Indenture”), which have been filed as exhibits to the Company's SEC reports. Compliance with selected covenants under the 2018 Indenture is excluded from the presentation of Debt Covenant Compliance in this release.

The Debt Covenant Compliance ratios are provided only to show the Company’s compliance with certain covenants contained in the 1998 Indenture governing a majority of the Company's unsecured debt securities and in the Company’s Credit Facility and Term Loans, as of the date reported. These ratios should not be used for any other purpose, including without limitation to evaluate the Company’s financial condition or results of operations, nor do they indicate the Company’s covenant compliance as of any other date or for any other period. The capitalized terms in the disclosure are defined in the Indenture or the Credit Facility and the Term Loans, and may differ materially from similar terms (i) used elsewhere in this release and the Attachments and (ii) used by other companies that present information about their covenant compliance. For risks related to failure to comply with these covenants, see “Risk Factors – Risks related to indebtedness” and other risks discussed in the Company’s 2022 Annual Report on Form 10-K and the Company’s other reports filed with the SEC.

Development is composed of consolidated communities that are either currently under construction, or were under construction and were completed during the current year. These communities may be partially or fully complete and operating.

18



Attachment 11

EBITDA, EBITDAre and Core EBITDAre are considered by management