AvalonBay Communities, Inc. (NYSE:AVB) Q3 2023 Earnings Conference Call October 26, 2023 1:00 PM ET Company Participants Jason Reilley - Vice President of Investor Relations Ben Schall - Chief Executive Officer and President Sean Breslin - Chief Operating Officer Matt Birenbaum - Chief Investment Officer Kevin O’Shea - Chief Financial Officer Conference Call Participants Eric Wolfe - Citi Austin Wurschmidt - KeyBanc Capital Markets John Kim - BMO Capital Markets Adam Kramer - Morgan Stanley John Pawlowski - ...

Avalon Woburn Woburn, MA INVESTOR TELECONFERENCE Kanso Twinbrook Rockville, MD PRESENTATION Third Quarter 2023 October 25, 2023 1 AVA Hollywood at La Pietra Place Los Angeles, CA See Appendix for information about forward-looking s ...

[Report Information](index=1&type=section&id=Report%20Information) This report details the quarterly financial filing for AvalonBay Communities, Inc as of June 30, 2023 - AvalonBay Communities, Inc filed its **Form 10-Q** for the quarterly period ended **June 30, 2023**[1](index=1&type=chunk) - The company is classified as a **large accelerated filer**[1](index=1&type=chunk) Common Stock Outstanding | Metric | Value | | :----- | :---- | | Common Stock Outstanding | 142,015,558 shares | | As of | July 31, 2023 | [PART I - FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [ITEM 1. Condensed Consolidated Financial Statements](index=2&type=section&id=ITEM%201.%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents unaudited financial statements for the periods ended June 30, 2023, including balance sheets, income, and cash flows [Condensed Consolidated Balance Sheets](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section summarizes the company's assets, liabilities, and equity as of June 30, 2023, compared to December 31, 2022 Key Balance Sheet Data (June 30, 2023 vs. December 31, 2022) | Metric | June 30, 2023 (Unaudited) ($000) | December 31, 2022 ($000) | Change ($000) | | :---------------------------------- | :------------------------ | :---------------- | :----- | | Total assets | 20,806,197 | 20,457,764 | +348,433 | | Total liabilities | 8,989,119 | 9,201,526 | -212,407 | | Total equity | 11,815,565 | 11,253,553 | +562,012 | | Cash and cash equivalents | 769,622 | 613,189 | +156,433 | | Construction in progress, including land | 1,202,977 | 1,072,543 | +130,434 | | Unsecured notes, net | 7,355,693 | 7,602,305 | -246,612 | | Additional paid-in capital | 11,269,159 | 10,765,431 | +503,728 | [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) This section details revenues, expenses, and net income for the three and six months ended June 30, 2023 and 2022 Key Comprehensive Income Data (Three Months Ended June 30) | Metric | Q2 2023 ($000) | Q2 2022 ($000) | Change ($000) | Change (%) | | :----------------------------------- | :-------- | :-------- | :--------- | :--------- | | Total revenue | 690,860 | 644,559 | +46,301 | +7.2% | | Total expenses | 515,903 | 509,008 | +6,895 | +1.4% | | Gain on sale of communities | 187,322 | 404 | +186,918 | N/A | | Net income | 367,807 | 138,566 | +229,241 | +165.4% | | Net income attributable to common stockholders | 367,923 | 138,691 | +229,232 | +165.3% | | EPS - basic | $2.59 | $0.99 | +$1.60 | +161.6% | | EPS - diluted | $2.59 | $0.99 | +$1.60 | +161.6% | Key Comprehensive Income Data (Six Months Ended June 30) | Metric | H1 2023 ($000) | H1 2022 ($000) | Change ($000) | Change (%) | | :----------------------------------- | :-------- | :-------- | :--------- | :--------- | | Total revenue | 1,365,569 | 1,258,486 | +107,083 | +8.5% | | Total expenses | 1,045,238 | 1,007,778 | +37,460 | +3.7% | | Gain on sale of communities | 187,309 | 149,204 | +38,105 | +25.5% | | Net income | 514,582 | 400,642 | +113,940 | +28.4% | | Net income attributable to common stockholders | 514,825 | 400,735 | +114,090 | +28.5% | | EPS - basic | $3.65 | $2.87 | +$0.78 | +27.2% | | EPS - diluted | $3.65 | $2.86 | +$0.79 | +27.6% | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section outlines cash movements from operating, investing, and financing activities for the six months ended June 30, 2023 Key Cash Flow Data (Six Months Ended June 30) | Metric | H1 2023 ($000) | H1 2022 ($000) | Change ($000) | | :----------------------------------- | :-------- | :-------- | :--------- | | Net cash provided by operating activities | 742,579 | 640,048 | +102,531 | | Net cash used in investing activities | (297,877) | (356,508) | +58,631 | | Net cash used in financing activities | (231,949) | (567,137) | +335,188 | | Net increase (decrease) in cash, cash equivalents and cash in escrow | 212,753 | (283,597) | +496,350 | | Cash, cash equivalents and cash in escrow, end of period | 946,998 | 260,191 | +686,807 | - Investing activities included **$453.1 million in development/redevelopment** and **$81.9 million in capital expenditures**, partially offset by **$252.9 million from real estate dispositions**[18](index=18&type=chunk)[161](index=161&type=chunk) - Financing activities included **$454.3 million in dividends paid** and **$250 million in unsecured note repayments**, partially offset by **$491.9 million from common stock issuance**[18](index=18&type=chunk)[162](index=162&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed explanations of accounting policies and specific financial statement line items [1. Organization, Basis of Presentation and Significant Accounting Policies](index=7&type=section&id=1.%20Organization%2C%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This section describes the company's business as a REIT, its portfolio, and key accounting policies including segment reporting - AvalonBay Communities, Inc is a Maryland corporation operating as a **REIT**, specializing in the development, acquisition, ownership, and operation of multifamily communities in key US metropolitan areas and expansion regions[25](index=25&type=chunk) - As of June 30, 2023, the company owned or held interests in **294 operating apartment communities** (88,659 homes) and land for **43 additional communities** (estimated 14,993 homes)[26](index=26&type=chunk) Total Revenue by Segment (Three Months Ended June 30) | Segment | Q2 2023 Revenue ($000) | Q2 2022 Revenue ($000) | Change ($000) | Change (%) | | :-------------------------- | :--------------------- | :--------------------- | :------------ | :--------- | | Same Store | 636,890 | 599,828 | +37,062 | +6.2% | | Other Stabilized | 32,240 | 19,078 | +13,162 | +69.0% | | Development/Redevelopment | 13,029 | 6,546 | +6,483 | +99.0% | | Nonallocated | 2,712 | 904 | +1,808 | +200.0% | | **Total Revenue** | **684,871** | **626,356** | **+58,515** | **+9.3%** | Total Revenue by Segment (Six Months Ended June 30) | Segment | H1 2023 Revenue ($000) | H1 2022 Revenue ($000) | Change ($000) | Change (%) | | :-------------------------- | :--------------------- | :--------------------- | :------------ | :--------- | | Same Store | 1,261,641 | 1,170,919 | +90,722 | +7.7% | | Other Stabilized | 63,972 | 34,291 | +29,681 | +86.6% | | Development/Redevelopment | 23,529 | 12,597 | +10,932 | +86.8% | | Nonallocated | 3,778 | 1,656 | +2,122 | +128.1% | | **Total Revenue** | **1,352,920** | **1,219,463** | **+133,457** | **+10.9%** | - Uncollectible lease revenue, net of government rent relief, increased to **$13.3 million (Q2 2023)** from $7.1 million (Q2 2022) and to **$30.3 million (H1 2023)** from $20.7 million (H1 2022)[49](index=49&type=chunk) [2. Interest Capitalized](index=12&type=section&id=2.%20Interest%20Capitalized) This section details the amount of interest capitalized for development and redevelopment activities Capitalized Interest | Period | 2023 ($000) | 2022 ($000) | Change ($000) | Change (%) | | :-------------------- | :---------- | :---------- | :------------ | :--------- | | Three months ended June 30 | 11,606 | 8,193 | +3,413 | +41.7% | | Six months ended June 30 | 22,624 | 15,293 | +7,331 | +47.9% | [3. Debt](index=12&type=section&id=3.%20Debt) This section summarizes the company's debt structure, including unsecured notes, credit facilities, and covenant compliance Debt Summary (June 30, 2023 vs. December 31, 2022) | Metric | June 30, 2023 ($000) | December 31, 2022 ($000) | Change ($000) | | :----------------------------------- | :------------------- | :--------------------- | :------------ | | Total principal outstanding | 8,120,427 | 8,377,827 | -257,400 | | Weighted average interest rate | 3.5% | 3.4% | +0.1% | | Fixed rate unsecured notes | 7,250,000 | 7,500,000 | -250,000 | | Variable rate mortgage notes payable | 449,750 | 457,150 | -7,400 | - The company repaid **$250 million** of its 2.85% unsecured notes at maturity during the six months ended June 30, 2023[55](index=55&type=chunk) Credit Facility Availability (June 30, 2023 vs. December 31, 2022) | Metric | June 30, 2023 ($000) | December 31, 2022 ($000) | | :-------------------------- | :------------------- | :--------------------- | | Credit Facility commitment | 2,250,000 | 2,250,000 | | Total Credit Facility available | 2,248,086 | 2,248,086 | - The company was in **compliance with all customary covenants** under its Credit Facility, Commercial Paper Program, Term Loan, and unsecured notes as of June 30, 2023[58](index=58&type=chunk) [4. Equity](index=14&type=section&id=4.%20Equity) This section outlines changes in stockholders' equity, common stock issuance, and share repurchase activities Equity Changes (Six Months Ended June 30, 2023) | Metric | December 31, 2022 ($000) | June 30, 2023 ($000) | Change ($000) | | :----------------------------------- | :----------------------- | :------------------- | :------------ | | Total stockholders' equity | 11,253,476 | 11,815,488 | +562,012 | | Net income attributable to common stockholders | N/A | 514,825 | N/A | | Dividends declared to common stockholders | N/A | (465,732) | N/A | | Issuance of common stock, net of withholdings | N/A | 494,705 | N/A | - During the six months ended June 30, 2023, the company issued **2,000,000 shares of common stock** in settlement of forward contracts for **$491.9 million**[63](index=63&type=chunk)[65](index=65&type=chunk) - The company repurchased **11,800 shares** of common stock for an average price of **$161.96 per share** under its Stock Repurchase Program, with **$314.2 million remaining authorized**[65](index=65&type=chunk) [5. Investments](index=16&type=section&id=5.%20Investments) This section details investments in unconsolidated entities, property technology, and the Structured Investment Program - As of June 30, 2023, the company had investments in **five unconsolidated entities** (20.0% to 50.0% ownership) and other unconsolidated investments in property technology and environmentally focused companies[66](index=66&type=chunk) - The company guaranteed a construction loan of **$111.7 million** for one unconsolidated development investment (25.0% ownership)[66](index=66&type=chunk) - Under its Structured Investment Program (SIP), the company had commitments to fund three mezzanine loans up to **$92.4 million**, with **$55.9 million funded** as of June 30, 2023, at a weighted average rate of return of **9.8%**[68](index=68&type=chunk) [6. Real Estate Disposition Activities](index=17&type=section&id=6.%20Real%20Estate%20Disposition%20Activities) This section reports on the sale of communities and residential condominiums during the first half of 2023 Real Estate Sales (Six Months Ended June 30, 2023) | Community Name | Location | Apartment Homes | Gross Sales Price ($000) | Gain on Disposition ($000) | | :----------------------- | :--------------- | :-------------- | :----------------------- | :------------------------- | | eaves Daly City | Daly City, CA | 195 | 67,000 | 54,618 | | Avalon at Newton Highlands | Newton, MA | 294 | 170,000 | 132,723 | | **Total** | | **489** | **237,000** | **187,341** | - For The Park Loggia, **four residential condominiums were sold for $19.3 million** (H1 2023), resulting in a gain of **$410,000**. Five residential condominiums remained unsold as of June 30, 2023[78](index=78&type=chunk) [7. Commitments and Contingencies](index=19&type=section&id=7.%20Commitments%20and%20Contingencies) This section discloses obligations related to ground leases, operating leases, and finance leases - The company owns **seven apartment communities** and two commercial properties on ground leases expiring between July 2046 and April 2106[79](index=79&type=chunk) Lease Obligations (June 30, 2023 vs. December 31, 2022) | Lease Type | June 30, 2023 ($000) | December 31, 2022 ($000) | | :-------------------- | :------------------- | :--------------------- | | Operating lease assets | 107,765 | 114,977 | | Operating lease obligations | 134,916 | 142,602 | | Finance lease assets | 28,415 | 28,354 | | Finance lease obligations | 20,041 | 20,069 | [8. Segment Reporting](index=20&type=section&id=8.%20Segment%20Reporting) This section provides financial performance data for the company's primary operating segments - The company's reportable operating segments are **Same Store, Other Stabilized, and Development/Redevelopment**, with Net Operating Income (NOI) as the primary financial measure for Same Store and Other Stabilized communities[83](index=83&type=chunk)[84](index=84&type=chunk) Net Operating Income (NOI) Reconciliation (Six Months Ended June 30) | Metric | H1 2023 ($000) | H1 2022 ($000) | Change ($000) | Change (%) | | :----------------------------------- | :------------- | :------------- | :------------ | :--------- | | Net income | 514,582 | 400,642 | +113,940 | +28.4% | | **Net operating income (NOI)** | **932,381** | **842,406** | **+89,975** | **+10.7%** | | Commercial NOI | (17,094) | (15,693) | -1,401 | +8.9% | | **Residential NOI** | **915,287** | **826,713** | **+88,574** | **+10.7%** | Same Store Residential NOI by Region (Six Months Ended June 30, 2023) | Region | Total Revenue ($000) | NOI ($000) | | :------------------ | :------------------- | :--------- | | New England | 180,732 | 120,976 | | Metro NY/NJ | 266,285 | 183,903 | | Mid-Atlantic | 182,367 | 127,015 | | Southeast Florida | 38,119 | 25,274 | | Denver, CO | 13,882 | 9,765 | | Pacific Northwest | 85,789 | 61,030 | | Northern California | 212,104 | 151,466 | | Southern California | 270,540 | 185,947 | | Other Expansion Regions | 11,823 | 8,103 | | **Total Same Store** | **1,261,641** | **873,479** | [9. Stock-Based Compensation Plans](index=22&type=section&id=9.%20Stock-Based%20Compensation%20Plans) This section details activity in stock option and performance award plans for employees Stock Options Outstanding (June 30, 2023) | Metric | Options | Weighted Average Exercise Price | | :-------------------------- | :-------- | :------------------------------ | | Outstanding at Dec 31, 2022 | 293,813 | $181.85 | | Granted | 15,744 | $177.83 | | Exercised | (5,773) | $163.56 | | **Outstanding at June 30, 2023** | **303,784** | **$181.99** | Performance Awards Outstanding (June 30, 2023) | Metric | Performance Awards | Weighted Average Grant Date Fair Value | | :-------------------------- | :----------------- | :------------------------------------- | | Outstanding at Dec 31, 2022 | 279,067 | $225.46 | | Granted | 89,977 | $193.88 | | Converted to common stock | (60,016) | $238.71 | | **Outstanding at June 30, 2023** | **274,964** | **$210.54** | - Total employee stock-based compensation cost recognized in income was **$15.2 million for H1 2023**, down from $17.8 million for H1 2022[95](index=95&type=chunk) [10. Related Party Arrangements](index=23&type=section&id=10.%20Related%20Party%20Arrangements) This section reports on fees from unconsolidated entities and compensation for non-employee directors Fees from Unconsolidated Entities | Period | 2023 ($000) | 2022 ($000) | Change ($000) | Change (%) | | :-------------------- | :---------- | :---------- | :------------ | :--------- | | Three months ended June 30 | 2,712 | 904 | +1,808 | +200.0% | | Six months ended June 30 | 3,778 | 1,656 | +2,122 | +128.1% | Non-Employee Director Compensation Expense | Period | 2023 ($000) | 2022 ($000) | Change ($000) | Change (%) | | :-------------------- | :---------- | :---------- | :------------ | :--------- | | Three months ended June 30 | 631 | 575 | +56 | +9.7% | | Six months ended June 30 | 1,246 | 1,090 | +156 | +14.3% | [11. Fair Value](index=23&type=section&id=11.%20Fair%20Value) This section discloses the fair value measurements of financial instruments, including derivatives and debt - The company uses interest rate swap and cap agreements as **Hedging Derivatives** to manage interest rate risk, classified as **Level 2** in the fair value hierarchy[98](index=98&type=chunk) - During H1 2023, the company entered into **$250 million** of new forward interest rate swap agreements to hedge anticipated future debt issuance[101](index=101&type=chunk) Financial Instruments Measured/Disclosed at Fair Value (June 30, 2023) | Description | Total Fair Value ($000) | Level 1 ($000) | Level 2 ($000) | Level 3 ($000) | | :----------------------------------- | :---------------------- | :------------- | :------------- | :------------- | | **Assets:** | | | | | | Equity Securities | 28,926 | — | 28,926 | — | | Notes Receivable, net | 59,071 | — | 59,071 | — | | Non Designated Hedges (Interest Rate Caps & Swaps) | 8,750 | — | 8,750 | — | | **Total Assets** | **96,747** | **—** | **96,747** | **—** | | **Liabilities:** | | | | | | Fixed rate unsecured notes | 6,474,043 | 6,474,043 | — | — | | Mortgage notes payable, Commercial Paper Program and variable rate unsecured notes | 763,708 | — | 763,708 | — | | **Total Liabilities** | **7,237,751** | **6,474,043** | **763,708** | **—** | [12. Subsequent Events](index=26&type=section&id=12.%20Subsequent%20Events) This section reports on significant events occurring after the balance sheet date, such as property sales - In July 2023, the company sold **Avalon Columbia Pike** (269 apartment homes, 27,000 sq ft commercial space) for **$105 million**[112](index=112&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial condition, results of operations, and strategic initiatives [Executive Overview](index=27&type=section&id=Executive%20Overview) This section highlights the company's strategic vision, Q2 2023 operating results, and development activities - The company's strategic vision is to be the **leading apartment company** in select US markets, providing distinctive living experiences, leveraging market research, consumer insight, disciplined capital allocation, and balance sheet management[116](index=116&type=chunk) Q2 2023 Operating Highlights | Metric | Q2 2023 ($000) | Q2 2022 ($000) | Change ($000) | Change (%) | | :----------------------------------- | :------------- | :------------- | :------------ | :--------- | | Net income attributable to common stockholders | 367,923 | 138,691 | +229,232 | +165.3% | | Same Store Residential NOI | 435,057 | 412,850 | +22,207 | +5.4% | | Residential rental revenue | N/A | N/A | +37,080 | +6.3% | | Residential property operating expenses | N/A | N/A | +14,769 | +8.2% | - As of June 30, 2023, the company had **17 wholly-owned communities under construction** (5,761 homes, $2.29 billion projected cost) and land for **43 additional communities** (14,993 homes, $6.8 billion projected cost)[118](index=118&type=chunk)[120](index=120&type=chunk) - During Q2 2023, two wholly-owned communities (489 homes) were sold for **$237 million**, generating a GAAP gain of **$187.3 million**. Avalon Columbia Pike was sold in July 2023 for **$105 million**[120](index=120&type=chunk) [Communities Overview](index=28&type=section&id=Communities%20Overview) This section classifies the company's portfolio into Same Store, Stabilized, Development, and other categories - **Same Store communities** are consolidated, had stabilized occupancy as of January 1, 2022, and are not undergoing substantial redevelopment or held for sale. Stabilized occupancy is 90% physical occupancy or one year post-completion[121](index=121&type=chunk) Community Classification (June 30, 2023) | Category | Number of Communities | Number of Apartment Homes | | :-------------------------- | :-------------------- | :------------------------ | | Same Store | 253 | 74,955 | | Other Stabilized | 11 | 4,012 | | Redevelopment | 1 | 714 | | Unconsolidated | 8 | 2,247 | | **Total Current Communities** | **273** | **81,928** | | Development | 20 | 6,256 | | Unconsolidated Development | 1 | 475 | | **Total Communities** | **294** | **88,659** | | Development Rights | 43 | 14,993 | [Results of Operations](index=30&type=section&id=Results%20of%20Operations) This section presents a detailed analysis of operating results for the three and six months ended June 30, 2023 Key Operating Results (Three Months Ended June 30) | Metric | Q2 2023 ($000) | Q2 2022 ($000) | Change ($000) | Change (%) | | :----------------------------------- | :------------- | :------------- | :------------ | :--------- | | Rental and other income | 688,148 | 643,655 | +44,493 | +6.9% | | Management, development and other fees | 2,712 | 904 | +1,808 | +200.0% | | Total revenue | 690,860 | 644,559 | +46,301 | +7.2% | | Total community operating expenses | 213,150 | 195,713 | +17,437 | +8.9% | | Interest expense, net | (51,585) | (58,797) | +7,212 | -12.3% | | Gain on sale of communities | 187,322 | 404 | +186,918 | N/A | | Net income attributable to common stockholders | 367,923 | 138,691 | +229,232 | +165.3% | Key Operating Results (Six Months Ended June 30) | Metric | H1 2023 ($000) | H1 2022 ($000) | Change ($000) | Change (%) | | :----------------------------------- | :------------- | :------------- | :------------ | :--------- | | Rental and other income | 1,361,791 | 1,256,830 | +104,961 | +8.4% | | Management, development and other fees | 3,778 | 1,656 | +2,122 | +128.1% | | Total revenue | 1,365,569 | 1,258,486 | +107,083 | +8.5% | | Total community operating expenses | 420,627 | 388,912 | +31,715 | +8.2% | | Interest expense, net | (108,406) | (115,323) | +6,917 | -6.0% | | Gain on sale of communities | 187,309 | 149,204 | +38,105 | +25.5% | | Net income attributable to common stockholders | 514,825 | 400,735 | +114,090 | +28.5% | - **Same Store Residential rental revenue increased by 7.8%** for the six months ended June 30, 2023, primarily due to an **8.1% increase in average rental revenue per occupied home**, partially offset by a 0.3% decrease in Economic Occupancy[138](index=138&type=chunk) - Uncollectible lease revenue (excluding rent relief) as a percentage of Same Store Residential rental revenue **decreased to 2.6% in H1 2023** from 4.1% in H1 2022[140](index=140&type=chunk) - Casualty loss of **$5.05 million for H1 2023** was due to severe weather damages in Northeast and California regions[148](index=148&type=chunk) FFO and Core FFO (Six Months Ended June 30) | Metric | H1 2023 ($000) | H1 2022 ($000) | Change ($000) | Change (%) | | :----------------------------------- | :------------- | :------------- | :------------ | :--------- | | FFO attributable to common stockholders | 735,069 | 650,700 | +84,369 | +13.0% | | Core FFO attributable to common stockholders | 738,152 | 656,948 | +81,204 | +12.4% | | FFO per common share - diluted | $5.21 | $4.65 | +$0.56 | +12.0% | | Core FFO per common share - diluted | $5.23 | $4.69 | +$0.54 | +11.5% | [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's sources and uses of cash, debt facilities, and equity activities - The company's principal focus for liquidity is to fund **development/redevelopment, minimum REIT dividend payments, debt service, operating expenses, and strategic investments**[158](index=158&type=chunk) Cash, Cash Equivalents and Cash in Escrow | Metric | June 30, 2023 ($000) | December 31, 2022 ($000) | Change ($000) | | :----------------------------------- | :------------------- | :--------------------- | :------------ | | Cash, cash equivalents and cash in escrow | 946,998 | 734,245 | +212,753 | - The **$2.25 billion Credit Facility** matures in September 2026, with **$2.248 billion available** as of July 31, 2023. The interest rate margin and commitment fee were reduced in July 2023 due to achieving sustainability targets[163](index=163&type=chunk)[165](index=165&type=chunk) - The company repaid **$250 million of 2.85% unsecured notes** at maturity during H1 2023[173](index=173&type=chunk) - The company settled an Equity Forward contract, issuing **2 million shares of common stock for $491.9 million**[170](index=170&type=chunk) - The company repurchased **11,800 shares of common stock** under its Stock Repurchase Program during H1 2023, with **$314.2 million remaining authorized**[171](index=171&type=chunk) [Unconsolidated Real Estate Investments and Off-Balance Sheet Arrangements](index=42&type=section&id=Unconsolidated%20Real%20Estate%20Investments%20and%20Off-Balance%20Sheet%20Arrangements) This section details joint ventures, development projects, and commitments under the Structured Investment Program Unconsolidated Real Estate Investments - Operating Communities (June 30, 2023) | Joint Venture | Company Ownership | of Apartment Homes | Total Capitalized Cost ($000) | Principal Amount Debt ($000) | Weighted Avg. Interest Rate | | :----------------------------------- | :---------------- | :------------------- | :---------------------------- | :--------------------------- | :-------------------------- | | NYTA MF Investors, LLC (5 communities) | 20.0% | 1,301 | 769,222 | 394,969 | 3.88% | | Other Operating Joint Ventures (3 communities) | 25.0% - 50.0% | 946 | 257,922 | 122,399 | 3.27% | | **Total** | | **2,247** | **1,027,144** | **517,368** | **3.73%** | - The **AVA Arts District**, an unconsolidated development community (25.0% ownership), is projected to contain 475 apartment homes and 56,000 sq ft of commercial space, with an estimated completion in Q4 2023 and a total capitalized cost of **$288 million**. The company has an equity investment of **$31.8 million** and guarantees a construction loan of **$111.7 million**[191](index=191&type=chunk) - The company has **17 wholly-owned Development Communities** under construction, expected to add 5,761 apartment homes and 29,000 sq ft of commercial space, with a total capitalized cost of approximately **$2.29 billion**[193](index=193&type=chunk)[194](index=194&type=chunk) - The company holds **43 Development Rights** for future apartment communities, estimated to add 14,993 apartment homes, with **$195.1 million in land acquisition costs** and **$71.4 million in capitalized deferred development costs**[196](index=196&type=chunk) - In July 2023, the company committed to an additional mezzanine loan of up to **$20.9 million** under the SIP, bringing total commitments to **$113.3 million** for four loans, with **$63.6 million funded** as of July 31, 2023[198](index=198&type=chunk) [Supplemental U.S. Federal Income Tax Considerations](index=45&type=section&id=Supplemental%20U.S.%20Federal%20Income%20Tax%20Considerations) This section outlines tax withholding requirements for distributions to non-U.S. stockholders - The company is required to withhold and remit to the IRS **21%** (or the then applicable highest corporate rate of US federal income tax) of any distributions to non-US stockholders attributable to gain from the sale or exchange of US real property interests[200](index=200&type=chunk) [Forward-Looking Statements](index=46&type=section&id=Forward-Looking%20Statements) This section provides a cautionary statement regarding forward-looking information and associated risks - The report contains forward-looking statements identified by words like **"believe," "expect," "anticipate," "intend," "estimate," "assume," "project," "plan," "may," "shall," "will," "pursue"**[201](index=201&type=chunk) - Key factors that could cause actual results to differ include failure to secure development opportunities, construction cost overruns, delays in completion, adverse market conditions, financing availability, new landlord-tenant laws, and risks associated with joint ventures and the SIP[204](index=204&type=chunk)[205](index=205&type=chunk) [Critical Accounting Policies and Estimates](index=49&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section identifies the company's most critical accounting policies and confirms no material changes - The company's critical accounting policies and estimates are **cost capitalization and abandoned pursuit costs** and **asset impairment**[206](index=206&type=chunk) - These policies have **not materially changed** from the discussion in the Annual Report on Form 10-K for the year ended December 31, 2022[206](index=206&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section confirms no material changes to the company's exposures to market risk since the disclosures in its Annual Report on Form 10-K for the year ended December 31, 2022 - **No material changes** to market risk exposures since the December 31, 2022 Annual Report on Form 10-K[208](index=208&type=chunk) [ITEM 4. Controls and Procedures](index=50&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of its disclosure controls and procedures as of June 30, 2023, and notes no changes in internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective as of June 30, 2023**[209](index=209&type=chunk) - **No changes in internal controls** over financial reporting occurred during the quarter ended June 30, 2023[210](index=210&type=chunk) [PART II - OTHER INFORMATION](index=2&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part contains disclosures on legal proceedings, risk factors, equity sales, and other required information [ITEM 1. Legal Proceedings](index=50&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section states that current litigation is not expected to have a material adverse effect on the company - The company is involved in various legal proceedings arising in the **ordinary course of business**[211](index=211&type=chunk) - Management does not believe any outstanding litigation will have a **material adverse effect** on financial condition or results of operations[211](index=211&type=chunk) [ITEM 1A. Risk Factors](index=50&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section confirms there have been no material changes to the company's risk factors since December 31, 2022 - **No material changes** to risk factors since December 31, 2022[212](index=212&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details the company's issuer purchases of equity securities during the second quarter of 2023 Issuer Purchases of Equity Securities (Q2 2023) | Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs (in thousands) (2) | | :---------------------- | :--------------------------- | :--------------------------- | :----------------------------------------------------------------------- | :--------------------------------------------------------------------------------------------------------------------------------- | | April 1- April 30, 2023 | 5,363 | $163.47 | 4,800 | 314,237 | | May 1- May 31, 2023 | 959 | $179.63 | — | 314,237 | | June 1- June 30, 2023 | — | $— | — | 314,237 | | **Total** | **6,322** | **$165.92** | **4,800** | | - The Stock Repurchase Program, approved in July 2020, authorizes up to **$500 million** in common stock repurchases and does not have an expiration date[217](index=217&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=51&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section reports there were no defaults upon senior securities for the period - **No defaults** upon senior securities were reported[218](index=218&type=chunk) [ITEM 4. Mine Safety Disclosures](index=51&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section states that this item is not applicable to the company - This item is **not applicable**[218](index=218&type=chunk) [ITEM 5. Other Information](index=51&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section confirms no directors or officers adopted, terminated, or modified a trading arrangement during the quarter - No directors or officers adopted, terminated, or modified **Rule 10b5-1 or non-Rule 10b5-1 trading arrangements** during Q2 2023[218](index=218&type=chunk) [ITEM 6. Exhibits](index=52&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including certifications and financial materials in Inline XBRL format - Exhibits include Articles of Amendment and Restatement of Articles of Incorporation, Amended and Restated Bylaws, and certifications under **Sections 302 and 906 of the Sarbanes-Oxley Act**[220](index=220&type=chunk) - Financial materials for the period ended June 30, 2023, are provided in **Inline XBRL format**[220](index=220&type=chunk) [SIGNATURES](index=53&type=section&id=SIGNATURES) This section provides the official signatures of the company's certifying officers - The report was signed by **Benjamin W. Schall (CEO and President)** and **Kevin P. O'Shea (CFO)** on August 4, 2023[222](index=222&type=chunk)

AvalonBay Communities, Inc. (NYSE:AVB) Q2 2023 Earnings Conference Call August 1, 2023 1:00 PM ET Company Participants Jason Reilley – Vice President of Investor Relations Ben Schall – Chief Executive Officer and President Sean Breslin – Chief Operating Officer Matt Birenbaum – Chief Investment Officer Kevin O’Shea – Chief Financial Officer Conference Call Participants Nick Joseph – Citi Austin Wurschmidt – KeyBanc Adam Kramer – Morgan Stanley John Kim – BMO Capital Markets Alan Peterson – Green Street Sank ...

Financial Performance & Outlook - Core FFO per share year-over-year growth was 9.5% in Q2 and 11.5% year-to-date[7] - Same store residential rental revenue growth year-over-year was 6.3% in Q2 and 7.8% year-to-date[7] - The company raised $740 million in capital in Q2 and $745 million year-to-date, with a weighted average initial cost of capital of 4.2%[7] - Full year 2023 projected Core FFO per share growth revised upward from 5.3% to 7.9%[22] - Innovation plans are expected to deliver nearly $16 million of incremental NOI in 2023[40, 43, 61] Portfolio & Development - Development completions totaled $185 million with a weighted average initial projected stabilized yield of 5.9%[7] - Development starts amounted to $110 million in Q2 and $210 million year-to-date[7] - Lease-ups continue to outperform initial projections, with weighted average monthly rental revenue per home at $3,365, an 18.3% variance from initial projections of $2,845[45] Market Dynamics - AVB established regions are projected to be more insulated from new apartment supply compared to Sunbelt regions[18] - Disposition activity involved the sale of three wholly-owned communities for an aggregate sales price of approximately $340 million, at a weighted average initial market cap rate of approximately 4.7%[51, 61] ESG Initiatives - The company's 12th annual ESG report highlights progress toward creating science-based targets[53] - The company has achieved a 53% reduction in Scope 1 & 2 GHG emissions per square foot since the 2017 baseline year[56]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number: 1-12672 AVALONBAY COMMUNITIES, INC. (Exact name of registrant as specified in its charter) Maryland 77-0404318 (State or other ju ...

AvalonBay Communities, Inc. (NYSE:AVB) Q1 2023 Earnings Conference Call April 27, 2023 1:00 PM ET Company Participants Jason Reilley - Vice President, Investor Relations Ben Schall - Chairman and Chief Executive Officer and President Kevin O’Shea - Chief Financial Officer Sean Breslin - Chief Operating Officer Matt Birenbaum - Chief Investment Officer Conference Call Participants Nick Joseph - Citi Eric Wolfe - Citi Steve Sakwa - Evercore Austin Wurschmidt - KeyBanc Adam Kramer - Morgan Stanley Chandni Luth ...

Financial Performance - Core FFO per share year-over-year growth was 137% in Q1 2023[7] - Same store residential rental revenue growth year-over-year was 95% in Q1 2023, with sequential growth of 11%[7] - Net Debt-to-Core EBITDAre was 46x, within the target range of 50x to 60x[35] - Interest coverage was 69x[35] Development and Lease-Up - Development starts totaled $100 million[7] - Current lease-ups are projected to generate $3,330 in weighted average monthly rental revenue per home, a $485 or 170% variance above original projections of $2,845[27] - Current lease-ups projected stabilized yield is 67%, 70 BPS higher than the original projection of 60%[27] - Development underway is expected to deliver > $130 million of incremental NOI annually upon stabilization[30] Market Trends - AVB established regions are expected to be more insulated from new apartment deliveries in 2023[12] - Hard costs are starting to correct, with ≈ 5% to 10% reductions in most coastal markets over the past two quarters[33] Balance Sheet and Operations - Unencumbered NOI was 95%[35] - The company settled the outstanding equity forward contracts entered into in April 2022, issuing 2,000,000 shares of common stock, net of offerings fees and discounts, for $491,912,000 or $24596 per share[7]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number: 1-12672 AVALONBAY COMMUNITIES, INC. (Exact name of registrant as specified in its charter) Maryland 77-0404318 (State or other jurisd ...

AvalonBay Communities, Inc. (NYSE:AVB) Q4 2022 Results Conference Call February 9, 2023 1:00 PM ET Company Participants Jason Reilley - VP, IR Ben Schall - President and CEO Kevin O’Shea - CFO Sean Breslin - COO Matt Birenbaum - Chief Investment Officer Conference Call Participants Nick Joseph - Citi Steve Sakwa - Evercore Austin Wurschmidt - KeyBanc Chandni Luthra - Goldman Sachs Adam Kramer - Morgan Stanley John Kim - BMO Capital Markets Alan Peterson - Green Street Rich Anderson - SMBC Michael Goldsmith ...