Maryland
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77-0404318
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(State or other jurisdiction of
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(I.R.S. Employer
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incorporation or organization)
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Identification No.)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer (Do not check if a smaller reporting company)
o
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Smaller reporting company
o
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Emerging growth company
o
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PAGE
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PART I - FINANCIAL INFORMATION
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ITEM 1.
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CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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3/31/2018
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12/31/2017
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||||
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(unaudited)
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ASSETS
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Real estate:
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Land and improvements
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$
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4,226,043
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$
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4,237,318
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Buildings and improvements
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15,733,783
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15,708,666
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Furniture, fixtures and equipment
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636,793
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615,288
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20,596,619
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20,561,272
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Less accumulated depreciation
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(4,345,596
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)
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(4,218,379
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)
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Net operating real estate
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16,251,023
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16,342,893
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Construction in progress, including land
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1,375,366
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1,306,300
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Land held for development
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136,771
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68,364
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Real estate assets held for sale, net
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121,387
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—
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Total real estate, net
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17,884,547
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17,717,557
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Cash and cash equivalents
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137,244
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67,088
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Cash in escrow
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134,163
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134,818
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Resident security deposits
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33,130
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32,686
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Investments in unconsolidated real estate entities
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164,344
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163,475
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Deferred development costs
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39,369
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45,819
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Prepaid expenses and other assets
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253,650
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253,378
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Total assets
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$
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18,646,447
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$
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18,414,821
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LIABILITIES AND EQUITY
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Unsecured notes, net
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$
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6,150,633
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$
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5,852,764
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Variable rate unsecured credit facility
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—
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—
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Mortgage notes payable, net
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1,448,822
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1,476,706
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Dividends payable
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203,166
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196,094
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Payables for construction
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83,209
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85,377
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Accrued expenses and other liabilities
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299,426
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308,189
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Accrued interest payable
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60,111
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43,116
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Resident security deposits
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58,760
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58,473
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Liabilities related to real estate assets held for sale
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1,244
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—
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Total liabilities
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8,305,371
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8,020,719
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Commitments and contingencies
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Redeemable noncontrolling interests
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5,952
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6,056
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Equity:
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Preferred stock, $0.01 par value; $25 liquidation preference; 50,000,000 shares authorized at March 31, 2018 and December 31, 2017; zero shares issued and outstanding at March 31, 2018 and December 31, 2017
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—
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—
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Common stock, $0.01 par value; 280,000,000 shares authorized at March 31, 2018 and December 31, 2017; 138,208,280 and 138,094,154 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively
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1,382
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1,381
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Additional paid-in capital
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10,229,738
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10,235,475
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Accumulated earnings less dividends
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128,166
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188,609
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Accumulated other comprehensive loss
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(24,162
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)
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(37,419
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)
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Total equity
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10,335,124
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10,388,046
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Total liabilities and equity
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$
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18,646,447
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$
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18,414,821
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For the three months ended
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3/31/2018
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3/31/2017
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Revenue:
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Rental and other income
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$
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559,906
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$
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521,126
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Management, development and other fees
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886
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1,200
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Total revenue
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560,792
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522,326
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Expenses:
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Operating expenses, excluding property taxes
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132,024
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123,044
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Property taxes
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59,896
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52,930
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Interest expense, net
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55,113
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49,295
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Loss on extinguishment of debt, net
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397
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—
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Depreciation expense
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159,059
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140,621
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General and administrative expense
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13,664
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13,206
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Expensed acquisition, development and other pursuit costs, net of recoveries
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800
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728
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Casualty and impairment (gain) loss, net
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(58
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)
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11,688
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Total expenses
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420,895
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391,512
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Income before equity in income of unconsolidated real estate entities, gain (loss) on sale of communities and other real estate, and income taxes
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139,897
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130,814
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Equity in income of unconsolidated real estate entities
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1,740
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16,672
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Gain on sale of communities
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—
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87,949
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(Loss) gain on other real estate transactions
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(47
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366
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Income before income taxes
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141,590
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235,801
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Income tax expense
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—
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20
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Net income
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141,590
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235,781
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Net loss attributable to noncontrolling interests
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53
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94
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Net income attributable to common stockholders
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$
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141,643
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$
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235,875
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Other comprehensive income:
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Gain on cash flow hedges
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11,501
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145
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Cash flow hedge losses reclassified to earnings
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1,756
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1,752
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Comprehensive income
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$
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154,900
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$
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237,772
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Earnings per common share - basic:
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Net income attributable to common stockholders
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$
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1.03
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$
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1.72
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Earnings per common share - diluted:
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Net income attributable to common stockholders
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$
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1.03
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$
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1.72
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Dividends per common share
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$
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1.47
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$
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1.42
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For the three months ended
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3/31/2018
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3/31/2017
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Cash flows from operating activities:
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Net income
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$
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141,590
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$
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235,781
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Adjustments to reconcile net income to cash provided by operating activities:
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Depreciation expense
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159,059
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140,621
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Amortization of deferred financing costs
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2,007
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1,826
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Amortization of debt discount (premium)
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419
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(4,621
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)
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Loss on extinguishment of debt, net
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397
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—
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Amortization of stock-based compensation
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4,029
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4,319
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Equity in loss of (income), and return on, unconsolidated real estate entities and noncontrolling interests, net of eliminations
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1,486
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(5,768
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)
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Casualty and impairment (gain) loss, net
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(58
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)
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11,688
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Abandonment of development pursuits
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112
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265
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Cash flow hedge losses reclassified to earnings
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1,756
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1,752
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Loss (gain) on sale of real estate assets
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47
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(97,012
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)
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Increase in resident security deposits, prepaid expenses and other assets
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(6,608
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)
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(10,630
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)
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Increase in accrued expenses, other liabilities and accrued interest payable
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11,677
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21,674
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Net cash provided by operating activities
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315,913
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299,895
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Cash flows from investing activities:
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Development/redevelopment of real estate assets including land acquisitions and deferred development costs
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(301,299
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)
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(259,573
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)
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Capital expenditures - existing real estate assets
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(15,240
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)
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(8,015
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)
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Capital expenditures - non-real estate assets
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(1,735
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)
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(2,429
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)
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Proceeds from sale of real estate, net of selling costs
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603
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159,985
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Insurance proceeds for property damage claims
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58
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4,095
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Mortgage note receivable lending
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(2,006
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)
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(4,795
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)
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Mortgage note receivable payment
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4,862
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—
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Decrease in payables for construction
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(2,168
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)
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(4,326
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)
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Distributions from unconsolidated real estate entities
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2,013
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11,952
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Investments in unconsolidated real estate entities
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(4,368
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)
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(5,774
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)
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Net cash used in investing activities
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(319,280
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)
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(108,880
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)
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Cash flows from financing activities:
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Issuance of common stock, net
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—
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56,817
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Dividends paid
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(195,999
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)
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(185,192
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)
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Repayments of mortgage notes payable, including prepayment penalties
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(28,584
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)
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(21,905
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)
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Issuance of unsecured notes
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299,442
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—
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Payment of deferred financing costs
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(3,244
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)
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(2,315
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)
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Payment of capital lease obligation
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(267
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)
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—
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Receipts for termination of forward interest rate swaps
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12,598
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—
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Payments related to tax withholding for share-based compensation
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(10,483
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)
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—
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Distributions to DownREIT partnership unitholders
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(11
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)
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(11
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)
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Contributions from joint venture and profit-sharing partners
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—
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1,038
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Distributions to joint venture and profit-sharing partners
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(104
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)
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(104
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)
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Preferred interest obligation redemption and dividends
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(480
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)
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(600
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)
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Net cash provided by (used in) financing activities
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72,868
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(152,272
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)
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Net increase in cash and cash equivalents
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69,501
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38,743
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Cash and cash equivalents and restricted cash, beginning of period
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201,906
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329,977
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Cash and cash equivalents and restricted cash, end of period
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$
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271,407
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$
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368,720
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Cash paid during the period for interest, net of amount capitalized
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$
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33,936
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$
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34,503
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For the three months ended
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||||||
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3/31/2018
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3/31/2017
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Cash and cash equivalents
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$
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137,244
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$
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121,705
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Cash in escrow
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134,163
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247,015
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Cash, cash equivalents and restricted cash reported in the Consolidated Statements of Cash Flows
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$
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271,407
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$
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368,720
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•
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As described in Note 4, "Equity,"
182,998
shares of common stock were issued as part of the Company's stock-based compensation plans, of which
88,297
shares related to the conversion of performance awards to restricted shares, and the remaining
94,701
shares valued at
$15,277,000
were issued in connection with new stock grants;
566
shares valued at
$96,000
were issued through the Company's dividend reinvestment plan;
67,609
shares valued at
$10,483,000
were withheld to satisfy employees' tax withholding and other liabilities; and
1,829
restricted shares with an aggregate value of
$234,000
previously issued in connection with employee compensation were canceled upon forfeiture.
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•
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Common stock dividends declared but not paid totaled
$203,166,000
.
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•
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The Company recorded an increase of
$63,000
in redeemable noncontrolling interest with a corresponding decrease to accumulated earnings less dividends to adjust the redemption value associated with the put options held by joint venture partners and DownREIT partnership units. For further discussion of the nature and valuation of these items, see Note 10, "Fair Value."
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•
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The Company reclassified
$1,756,000
of cash flow hedge losses from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedge accounting activity.
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•
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The Company issued
198,502
shares of common stock as part of the Company's stock-based compensation plans, of which
128,482
shares related to the conversion of performance awards to restricted shares, and the remaining
70,020
shares valued at
$12,538,000
were issued in connection with new stock grants;
1,165
shares valued at
$205,000
were issued through the Company's dividend reinvestment plan;
57,172
shares valued at
$10,149,000
were withheld to satisfy employees' tax withholding and other liabilities; and
236
restricted shares with an aggregate value of
$41,000
previously issued in connection with employee compensation were canceled upon forfeiture.
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•
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Common stock dividends declared but not paid totaled
$195,657,000
.
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•
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The Company recorded an increase of
$183,000
in redeemable noncontrolling interest with a corresponding decrease to accumulated earnings less dividends to adjust the redemption value associated with the put options held by joint venture partners and DownREIT partnership units.
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•
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The Company recorded an increase in prepaid expenses and other assets of
$180,000
and an increase in accrued expenses and other liabilities of
$102,000
, and a corresponding adjustment to other comprehensive income, and reclassified
$1,752,000
of cash flow hedge losses from other comprehensive income to interest expense, net, to record the impact of the Company's derivative and hedge accounting activity.
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•
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As discussed in Note 5, "Investments in Real Estate Entities," the Company recognized a non-cash charge of
$16,361,000
to write-off the net book value of the fixed assets destroyed by the fire that occurred in February 2017 at the Company's Avalon Maplewood Development Community ("Maplewood"), and a corresponding recovery of loss of
$12,598,000
for property damage insurance proceeds for the Maplewood casualty loss not received during the period.
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For the three months ended
|
||||||
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3/31/2018
|
|
3/31/2017
|
||||
Basic and diluted shares outstanding
|
|
|
|
|
|
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Weighted average common shares - basic
|
137,764,468
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|
|
137,068,874
|
|
||
Weighted average DownREIT units outstanding
|
7,500
|
|
|
7,500
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|
||
Effect of dilutive securities
|
381,202
|
|
|
454,868
|
|
||
Weighted average common shares - diluted
|
138,153,170
|
|
|
137,531,242
|
|
||
|
|
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|
||||
Calculation of Earnings per Share - basic
|
|
|
|
|
|
||
Net income attributable to common stockholders
|
$
|
141,643
|
|
|
$
|
235,875
|
|
Net income allocated to unvested restricted shares
|
(430
|
)
|
|
(652
|
)
|
||
Net income attributable to common stockholders, adjusted
|
$
|
141,213
|
|
|
$
|
235,223
|
|
|
|
|
|
||||
Weighted average common shares - basic
|
137,764,468
|
|
|
137,068,874
|
|
||
|
|
|
|
||||
Earnings per common share - basic
|
$
|
1.03
|
|
|
$
|
1.72
|
|
|
|
|
|
||||
Calculation of Earnings per Share - diluted
|
|
|
|
|
|
||
Net income attributable to common stockholders
|
$
|
141,643
|
|
|
$
|
235,875
|
|
Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships
|
11
|
|
|
11
|
|
||
Adjusted net income attributable to common stockholders
|
$
|
141,654
|
|
|
$
|
235,886
|
|
|
|
|
|
||||
Weighted average common shares - diluted
|
138,153,170
|
|
|
137,531,242
|
|
||
|
|
|
|
||||
Earnings per common share - diluted
|
$
|
1.03
|
|
|
$
|
1.72
|
|
•
|
Management fees - The Company has investment interests in real estate joint ventures, for which the Company may manage (i) the venture, (ii) the associated operating communities owned by the ventures and/or (iii) the development or redevelopment of those operating communities. For these activities, the Company receives asset management, property management, development and/or redevelopment fee revenue. The performance obligation is the management of the venture, community or other defined task such as the development or redevelopment of the community. While the individual activities that comprise the performance obligation of the management fees can vary day to day, the nature of the overall performance obligation to provide management service is the same and considered by the Company to be a series of services that have the same pattern of transfer to the customer and the same method to measure progress toward satisfaction of the performance obligation. The Company recognizes revenue for fees as earned on a monthly basis and has concluded this is appropriate under the new standard.
|
•
|
Rental and non-rental related income - The Company recognizes revenue for new rental related income not included as components of a lease, such as reservation and application fees, as well as for non-rental related income, as earned, and has concluded this is appropriate under the new standard.
|
•
|
Gains or losses on sales of real estate
-
The Company accounts for the sale of real estate assets and any related gain recognition in accordance with the accounting guidance applicable to sales of real estate, which establishes standards for recognition of profit on all real estate sales transactions, other than retail land sales. The Company recognizes the sale, and associated gain or loss from the disposition, provided that the earnings process is complete and the Company does not have significant continuing involvement. Subsequent to the adoption of the new standard, a gain or loss is recognized when the criteria for an asset to be derecognized are met, which include when (i) a contract exists and (ii) the buyer obtained control of the nonfinancial asset that was sold. As a result, the Company may recognize a gain on a real estate disposition transaction that previously did not qualify as a sale or for full profit recognition due to the timing of the transfer of control or certain forms of continuing involvement. In addition, subsequent to the adoption of the new standard, a gain or loss recognized on the sale of a nonfinancial asset to an unconsolidated entity will be recognized at 100%, and not the Company’s proportionate ownership percentage.
|
|
|
For the three months ended
|
||||||||||||||||||
|
|
Established
Communities |
|
Other
Stabilized Communities |
|
Development/
Redevelopment Communities |
|
Non-
allocated (1) |
|
Total
|
||||||||||
For the period ended March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Management, development and other fees
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
886
|
|
|
$
|
886
|
|
Rental and non-rental related income (2)
|
|
2,399
|
|
|
1,817
|
|
|
405
|
|
|
—
|
|
|
4,621
|
|
|||||
Total non-lease revenue (3)
|
|
2,399
|
|
|
1,817
|
|
|
405
|
|
|
886
|
|
|
5,507
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease income (4)
|
|
415,145
|
|
|
69,386
|
|
|
67,529
|
|
|
—
|
|
|
552,060
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total revenue
|
|
$
|
417,544
|
|
|
$
|
71,203
|
|
|
$
|
67,934
|
|
|
$
|
886
|
|
|
$
|
557,567
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
For the period ended March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Management, development and other fees
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,200
|
|
|
$
|
1,200
|
|
Rental and non-rental related income (2)
|
|
2,224
|
|
|
1,687
|
|
|
405
|
|
|
—
|
|
|
4,316
|
|
|||||
Total non-lease revenue (3)
|
|
2,224
|
|
|
1,687
|
|
|
405
|
|
|
1,200
|
|
|
5,516
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Lease income (4)
|
|
380,533
|
|
|
68,429
|
|
|
55,142
|
|
|
—
|
|
|
504,104
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
|
$
|
382,757
|
|
|
$
|
70,116
|
|
|
$
|
55,547
|
|
|
$
|
1,200
|
|
|
509,620
|
|
(1)
|
Revenue represents third-party management, asset management and developer fees and miscellaneous income which are not allocated to a reportable segment.
|
(2)
|
Amounts include revenue streams related to leasing activities that are not considered components of a lease, including but not limited to, apartment hold fees and application fees, as well as revenue streams not related to leasing activities, including but not limited to, vendor revenue sharing, building advertising, vending and dry cleaning revenue.
|
(3)
|
Represents all revenue accounted for under ASC 2014-09.
|
(4)
|
Amounts include all revenue streams derived from residential and retail rental income and other lease income, which are scoped out from ASC 2014-09 and accounted for under the lease accounting framework.
|
|
3/31/2017
(as previously reported)
|
|
Impact of ASU 2016-18
|
|
3/31/2017
(as adjusted and currently reported)
|
||||||
|
|
|
|||||||||
Net cash provided by operating activities
|
$
|
293,462
|
|
|
$
|
6,433
|
|
|
$
|
299,895
|
|
Net cash used in investing activities
|
(235,347
|
)
|
|
126,467
|
|
|
(108,880
|
)
|
|||
Net cash used in financing activities
|
(151,404
|
)
|
|
(868
|
)
|
|
(152,272
|
)
|
|||
|
|
|
|
|
|
||||||
Net (decrease) increase in cash, cash equivalents
|
(93,289
|
)
|
|
93,289
|
|
|
—
|
|
|||
Net increase in cash, cash equivalents and restricted cash
|
—
|
|
|
38,743
|
|
|
38,743
|
|
|||
|
|
|
|
|
|
||||||
Cash, cash equivalents, beginning of period
|
214,994
|
|
|
(214,994
|
)
|
|
—
|
|
|||
Cash, cash equivalents and restricted cash, beginning of period
|
—
|
|
|
329,977
|
|
|
329,977
|
|
|||
Cash, cash equivalents, end of period
|
$
|
121,705
|
|
|
—
|
|
|
—
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
|
|
$
|
247,015
|
|
|
$
|
368,720
|
|
|
3/31/2018
|
|
12/31/2017
|
||||
|
|
|
|
||||
Fixed rate unsecured notes (1)
|
$
|
5,650,000
|
|
|
$
|
5,350,000
|
|
Variable rate unsecured notes (1)
|
300,000
|
|
|
300,000
|
|
||
Term Loans (1)
|
250,000
|
|
|
250,000
|
|
||
Fixed rate mortgage notes payable - conventional and tax-exempt (2)
|
566,091
|
|
|
593,987
|
|
||
Variable rate mortgage notes payable - conventional and tax-exempt (2)
|
909,788
|
|
|
910,326
|
|
||
Total mortgage notes payable, unsecured notes and Term Loans
|
7,675,879
|
|
|
7,404,313
|
|
||
Credit Facility
|
—
|
|
|
—
|
|
||
Total mortgage notes payable, unsecured notes, Term Loans and Credit Facility
|
$
|
7,675,879
|
|
|
$
|
7,404,313
|
|
(1)
|
Balances at
March 31, 2018
and
December 31, 2017
exclude
$11,039
and
$10,850
, respectively, of debt discount, and
$38,328
and
$36,386
, respectively, of deferred financing costs, as reflected in unsecured notes, net on the accompanying Condensed Consolidated Balance Sheets.
|
(2)
|
Balances at
March 31, 2018
and
December 31, 2017
exclude
$16,328
and
$16,351
, respectively, of debt discount, and
$10,729
and
$11,256
, respectively, of deferred financing costs, as reflected in mortgage notes payable on the accompanying Condensed Consolidated Balance Sheets.
|
•
|
In February 2018, the Company repaid
$15,174,000
of fixed rate debt secured by Avalon Oaks West in advance of its scheduled maturity date, incurring a charge of
$426,000
, consisting of a prepayment penalty of
$152,000
and the non-cash write-off of unamortized deferred financing costs of
$274,000
.
|
•
|
In February 2018, the Company repaid
$11,038,000
of fixed rate debt secured by AVA Pasadena at par in advance of its scheduled maturity date.
|
•
|
In March 2018, the Company issued
$300,000,000
principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of approximately
$296,210,000
. The notes mature in
April 2048
and were issued at a
4.35%
interest rate. The effective interest rate of the notes for the first
10
years is
3.97%
, including the impact of an interest rate hedge and offering costs, and for the remainder of the term the effective interest rate will be
4.39%
.
|
Year
|
|
Secured notes payments
|
|
Secured notes maturities
|
|
Unsecured notes maturities
|
|
Stated interest rate of unsecured notes
|
|||||||
2018
|
|
5,273
|
|
|
65,183
|
|
|
—
|
|
|
N/A
|
|
|||
2019
|
|
4,443
|
|
|
114,721
|
|
|
—
|
|
|
N/A
|
|
|||
2020
|
|
3,345
|
|
|
140,429
|
|
|
250,000
|
|
|
6.100
|
%
|
|||
|
|
|
|
|
|
|
|
400,000
|
|
|
3.625
|
%
|
|||
2021
|
|
3,259
|
|
|
27,844
|
|
|
250,000
|
|
|
3.950
|
%
|
|||
|
|
|
|
|
|
|
|
300,000
|
|
|
LIBOR + 0.43%
|
|
|||
2022
|
|
3,483
|
|
|
—
|
|
|
450,000
|
|
|
2.950
|
%
|
|||
|
|
|
|
|
|
100,000
|
|
|
LIBOR + .90%
|
|
|||||
2023
|
|
3,713
|
|
|
—
|
|
|
350,000
|
|
|
4.200
|
%
|
|||
|
|
|
|
|
|
|
|
250,000
|
|
|
2.850
|
%
|
|||
2024
|
|
3,950
|
|
|
—
|
|
|
300,000
|
|
|
3.500
|
%
|
|||
|
|
|
|
|
|
150,000
|
|
|
LIBOR + 1.50%
|
|
|||||
2025
|
|
4,202
|
|
|
84,835
|
|
|
525,000
|
|
|
3.450
|
%
|
|||
|
|
|
|
|
|
300,000
|
|
|
3.500
|
%
|
|||||
2026
|
|
4,486
|
|
|
—
|
|
|
475,000
|
|
|
2.950
|
%
|
|||
|
|
|
|
|
|
300,000
|
|
|
2.900
|
%
|
|||||
2027
|
|
4,048
|
|
|
185,100
|
|
|
400,000
|
|
|
3.350
|
%
|
|||
Thereafter
|
|
135,148
|
|
|
682,417
|
|
|
350,000
|
|
|
3.900
|
%
|
|||
|
|
|
|
|
|
300,000
|
|
|
4.150
|
%
|
|||||
|
|
|
|
|
|
450,000
|
|
|
3.200
|
%
|
|||||
|
|
|
|
|
|
300,000
|
|
|
4.350
|
%
|
|||||
|
|
$
|
175,350
|
|
|
$
|
1,300,529
|
|
|
$
|
6,200,000
|
|
|
|
|
|
Common
stock
|
|
Additional
paid-in
capital
|
|
Accumulated
earnings
less
dividends
|
|
Accumulated
other
comprehensive
loss
|
|
Total
equity
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at December 31, 2017
|
$
|
1,381
|
|
|
$
|
10,235,475
|
|
|
$
|
188,609
|
|
|
$
|
(37,419
|
)
|
|
$
|
10,388,046
|
|
Net income attributable to common stockholders
|
—
|
|
|
—
|
|
|
141,643
|
|
|
—
|
|
|
141,643
|
|
|||||
Gain on cash flow hedges, net
|
—
|
|
|
—
|
|
|
—
|
|
|
11,501
|
|
|
11,501
|
|
|||||
Cash flow hedge losses reclassified to earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
1,756
|
|
|
1,756
|
|
|||||
Change in redemption value of redeemable noncontrolling interest
|
—
|
|
|
—
|
|
|
(63
|
)
|
|
—
|
|
|
(63
|
)
|
|||||
Dividends declared to common stockholders
|
—
|
|
|
—
|
|
|
(203,166
|
)
|
|
—
|
|
|
(203,166
|
)
|
|||||
Issuance of common stock, net of withholdings
|
1
|
|
|
(12,286
|
)
|
|
1,143
|
|
|
—
|
|
|
(11,142
|
)
|
|||||
Amortization of deferred compensation
|
—
|
|
|
6,549
|
|
|
—
|
|
|
—
|
|
|
6,549
|
|
|||||
Balance at March 31, 2018
|
$
|
1,382
|
|
|
$
|
10,229,738
|
|
|
$
|
128,166
|
|
|
$
|
(24,162
|
)
|
|
$
|
10,335,124
|
|
i.
|
issued
566
common shares through the Company's dividend reinvestment plan;
|
ii.
|
issued
182,998
common shares in connection with restricted stock grants and the conversion of performance awards to restricted shares;
|
iii.
|
withheld
67,609
common shares to satisfy employees' tax withholding and other liabilities; and
|
iv.
|
canceled
1,829
common shares of restricted stock upon forfeiture.
|
|
3/31/2018
|
|
12/31/2017
|
||||
|
(unaudited)
|
|
(unaudited)
|
||||
Assets:
|
|
|
|
|
|
||
Real estate, net
|
$
|
689,612
|
|
|
$
|
695,077
|
|
Other assets
|
38,084
|
|
|
39,976
|
|
||
Total assets
|
$
|
727,696
|
|
|
$
|
735,053
|
|
|
|
|
|
||||
Liabilities and partners' capital:
|
|
|
|
|
|
||
Mortgage notes payable, net and credit facility
|
$
|
523,008
|
|
|
$
|
523,815
|
|
Other liabilities
|
13,406
|
|
|
10,540
|
|
||
Partners' capital
|
191,282
|
|
|
200,698
|
|
||
Total liabilities and partners' capital
|
$
|
727,696
|
|
|
$
|
735,053
|
|
|
For the three months ended
|
||||||
|
3/31/2018
|
|
3/31/2017
|
||||
|
(unaudited)
|
||||||
Rental and other income
|
$
|
21,801
|
|
|
$
|
28,642
|
|
Operating and other expenses
|
(8,305
|
)
|
|
(11,094
|
)
|
||
Gain on sale of communities
|
—
|
|
|
29,447
|
|
||
Interest expense, net
|
(5,618
|
)
|
|
(6,948
|
)
|
||
Depreciation expense
|
(5,880
|
)
|
|
(7,327
|
)
|
||
Net income
|
$
|
1,998
|
|
|
$
|
32,720
|
|
|
For the three months ended
|
||||||
|
3/31/2018
|
|
3/31/2017
|
||||
Net income
|
$
|
141,590
|
|
|
$
|
235,781
|
|
Indirect operating expenses, net of corporate income
|
18,082
|
|
|
16,297
|
|
||
Investments and investment management expense
|
1,643
|
|
|
1,321
|
|
||
Expensed acquisition, development and other pursuit costs, net of recoveries
|
800
|
|
|
728
|
|
||
Interest expense, net
|
55,113
|
|
|
49,295
|
|
||
Loss on extinguishment of debt, net
|
397
|
|
|
—
|
|
||
General and administrative expense
|
13,664
|
|
|
13,206
|
|
||
Equity in income of unconsolidated real estate entities
|
(1,740
|
)
|
|
(16,672
|
)
|
||
Depreciation expense
|
159,059
|
|
|
140,621
|
|
||
Income tax expense
|
—
|
|
|
20
|
|
||
Casualty and impairment loss (gain), net
|
(58
|
)
|
|
11,688
|
|
||
Gain on sale of communities
|
—
|
|
|
(87,949
|
)
|
||
Loss (gain) on other real estate transactions
|
47
|
|
|
(366
|
)
|
||
Net operating income from real estate assets sold or held for sale
|
(2,144
|
)
|
|
(8,101
|
)
|
||
Net operating income
|
$
|
386,453
|
|
|
$
|
355,869
|
|
|
For the three months ended
|
||||||
|
3/31/2018
|
|
3/31/2017
|
||||
Rental income from real estate assets sold or held for sale
|
$
|
3,225
|
|
|
$
|
12,706
|
|
Operating expenses from real estate assets sold or held for sale
|
(1,081
|
)
|
|
(4,605
|
)
|
||
Net operating income from real estate assets sold or held for sale
|
$
|
2,144
|
|
|
$
|
8,101
|
|
|
For the three months ended
|
|
|
|||||||||||
|
Total
revenue |
|
NOI
|
|
% NOI change from prior year
|
|
Gross real estate (1)
|
|||||||
For the period ended March 31, 2018
|
|
|
|
|
|
|
||||||||
Established
|
|
|
|
|
|
|
|
|
|
|
|
|||
New England
|
$
|
57,909
|
|
|
$
|
37,643
|
|
|
1.8
|
%
|
|
$
|
1,973,203
|
|
Metro NY/NJ
|
104,096
|
|
|
71,921
|
|
|
0.9
|
%
|
|
3,722,387
|
|
|||
Mid-Atlantic
|
59,159
|
|
|
41,067
|
|
|
0.2
|
%
|
|
2,233,711
|
|
|||
Pacific Northwest
|
21,242
|
|
|
14,838
|
|
|
(0.6
|
)%
|
|
725,487
|
|
|||
Northern California
|
92,197
|
|
|
70,494
|
|
|
1.8
|
%
|
|
3,017,863
|
|
|||
Southern California
|
82,941
|
|
|
59,394
|
|
|
1.9
|
%
|
|
2,842,685
|
|
|||
Total Established
|
417,544
|
|
|
295,357
|
|
|
1.2
|
%
|
|
14,515,336
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Other Stabilized
|
71,203
|
|
|
47,265
|
|
|
N/A
|
|
|
3,036,815
|
|
|||
Development / Redevelopment
|
67,934
|
|
|
43,831
|
|
|
N/A
|
|
|
4,321,466
|
|
|||
Land Held for Development
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
136,771
|
|
|||
Non-allocated (2)
|
886
|
|
|
N/A
|
|
|
N/A
|
|
|
98,368
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Total
|
$
|
557,567
|
|
|
$
|
386,453
|
|
|
8.6
|
%
|
|
$
|
22,108,756
|
|
|
|
|
|
|
|
|
|
|||||||
For the period ended March 31, 2017
|
|
|
|
|
|
|
||||||||
Established
|
|
|
|
|
|
|
|
|
|
|
|
|||
New England
|
$
|
56,154
|
|
|
$
|
36,180
|
|
|
1.0
|
%
|
|
$
|
1,875,024
|
|
Metro NY/NJ
|
85,760
|
|
|
58,938
|
|
|
2.9
|
%
|
|
2,903,317
|
|
|||
Mid-Atlantic
|
55,755
|
|
|
39,147
|
|
|
3.7
|
%
|
|
2,062,311
|
|
|||
Pacific Northwest
|
20,454
|
|
|
14,815
|
|
|
5.2
|
%
|
|
731,537
|
|
|||
Northern California
|
83,323
|
|
|
63,717
|
|
|
2.0
|
%
|
|
2,815,589
|
|
|||
Southern California
|
81,311
|
|
|
59,223
|
|
|
5.0
|
%
|
|
3,005,810
|
|
|||
Total Established
|
382,757
|
|
|
272,020
|
|
|
3.1
|
%
|
|
13,393,588
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Other Stabilized
|
70,116
|
|
|
48,943
|
|
|
N/A
|
|
|
3,032,689
|
|
|||
Development / Redevelopment
|
55,547
|
|
|
34,906
|
|
|
N/A
|
|
|
4,276,266
|
|
|||
Land Held for Development
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
103,954
|
|
|||
Non-allocated (2)
|
1,200
|
|
|
N/A
|
|
|
N/A
|
|
|
112,987
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Total
|
$
|
509,620
|
|
|
$
|
355,869
|
|
|
3.4
|
%
|
|
$
|
20,919,484
|
|
(1)
|
Does not include gross real estate assets held for sale of
$153,151
as of
March 31, 2018
.
|
(2)
|
Revenue represents third-party management, asset management and developer fees and miscellaneous income which are not allocated to a reportable segment.
|
|
|
2009 Plan
shares
|
|
Weighted average
exercise price
per share
|
|
1994 Plan
shares
|
|
Weighted average
exercise price
per share
|
||||||
Options Outstanding, December 31, 2017
|
|
149,973
|
|
|
$
|
126.77
|
|
|
7,778
|
|
|
$
|
48.60
|
|
Exercised
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Granted (1)
|
|
6,995
|
|
|
161.10
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Options Outstanding, March 31, 2018
|
|
156,968
|
|
|
$
|
128.30
|
|
|
7,778
|
|
|
$
|
48.60
|
|
Options Exercisable, March 31, 2018
|
|
149,973
|
|
|
$
|
126.77
|
|
|
7,778
|
|
|
$
|
48.60
|
|
(1)
|
Options granted during the
three months ended March 31, 2018
, are a result of recipient elections to receive a portion of earned performance awards and time-vesting restricted stock in the form of stock options.
|
|
|
Performance awards
|
|
Weighted average grant date fair value per award
|
|||
Outstanding at December 31, 2017
|
|
251,770
|
|
|
$
|
155.25
|
|
Granted (1)
|
|
100,501
|
|
|
155.31
|
|
|
Change in awards based on performance (2)
|
|
5,990
|
|
|
148.79
|
|
|
Converted to restricted stock or options
|
|
(88,477
|
)
|
|
148.79
|
|
|
Forfeited
|
|
(1,271
|
)
|
|
157.06
|
|
|
Outstanding at March 31, 2018
|
|
268,513
|
|
|
$
|
157.25
|
|
(1)
|
The amount of restricted stock that ultimately may be earned is based on the total shareholder return metrics related to the Company's common stock for
61,746
performance awards and financial metrics related to operating performance and leverage metrics of the Company for
38,755
performance awards.
|
(2)
|
Represents the change in the number of performance awards earned based on actual performance achievement for the performance period.
|
|
|
2018
|
Dividend yield
|
|
3.7%
|
Estimated volatility over the life of the plan (1)
|
|
11.8% - 18.7%
|
Risk free rate
|
|
1.86% - 2.46%
|
Estimated performance award value based on total shareholder return measure
|
|
$151.67
|
(1)
|
Estimated volatility over the life of the plan is using
50%
historical volatility and
50%
implied volatility.
|
|
|
Restricted stock shares
|
|
Restricted stock shares weighted average grant date fair value per share
|
|
Restricted stock shares converted from performance awards
|
||||
Outstanding at December 31, 2017
|
|
133,633
|
|
|
$
|
172.33
|
|
|
233,928
|
|
Granted - restricted stock shares
|
|
94,701
|
|
|
161.32
|
|
|
88,297
|
|
|
Vested - restricted stock shares
|
|
(64,224
|
)
|
|
171.20
|
|
|
(112,076
|
)
|
|
Forfeited
|
|
(1,257
|
)
|
|
168.68
|
|
|
(572
|
)
|
|
Outstanding at March 31, 2018
|
|
162,853
|
|
|
$
|
166.40
|
|
|
209,577
|
|
|
Non-designated
Hedges
Interest Rate Caps
|
|
Cash Flow
Hedges
Interest Rate Caps
|
||||
|
|
|
|
||||
Notional balance
|
$
|
688,044
|
|
|
$
|
34,820
|
|
Weighted average interest rate (1)
|
3.2
|
%
|
|
3.5
|
%
|
||
Weighted average swapped/capped interest rate
|
6.5
|
%
|
|
5.9
|
%
|
||
Earliest maturity date
|
Aug 2018
|
|
|
Apr 2019
|
|
||
Latest maturity date
|
Sep 2022
|
|
|
Apr 2019
|
|
(1)
|
For interest rate caps, represents the weighted average interest rate on the hedged debt.
|
|
For the three months ended
|
||||||
|
3/31/2018
|
|
3/31/2017
|
||||
|
|
|
|
||||
Cash flow hedge losses reclassified to earnings
|
$
|
1,756
|
|
|
$
|
1,752
|
|
|
|
3/31/2018
|
||||||||||||||
Description
|
|
Total Fair Value
|
|
Quoted Prices
in Active Markets for Identical Asset
(Level 1)
|
|
Significant
Other Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||
|
|
|
|
|||||||||||||
Non-Designated Hedges
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Caps
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
—
|
|
Puts
|
|
(3,245
|
)
|
|
—
|
|
|
—
|
|
|
(3,245
|
)
|
||||
DownREIT units
|
|
(1,234
|
)
|
|
(1,234
|
)
|
|
—
|
|
|
—
|
|
||||
Indebtedness
|
|
|
|
|
|
|
|
|
||||||||
Unsecured notes
|
|
(5,585,598
|
)
|
|
(5,585,598
|
)
|
|
—
|
|
|
—
|
|
||||
Secured notes payable and variable rate unsecured indebtedness
|
|
(1,817,732
|
)
|
|
—
|
|
|
(1,817,732
|
)
|
|
—
|
|
||||
Total
|
|
$
|
(7,407,791
|
)
|
|
$
|
(5,586,832
|
)
|
|
$
|
(1,817,714
|
)
|
|
$
|
(3,245
|
)
|
|
|
12/31/2017
|
||||||||||||||
Description
|
|
Total Fair Value
|
|
Quoted Prices
in Active Markets for Identical Asset
(Level 1)
|
|
Significant
Other Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||
|
|
|
|
|||||||||||||
Non-Designated Hedges
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Caps
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Cash Flow Hedges
|
|
|
|
|
|
|
|
|
||||||||
Interest Rate Swaps - Assets
|
|
2,270
|
|
|
—
|
|
|
2,270
|
|
|
—
|
|
||||
Interest Rate Swaps - Liabilities
|
|
(1,171
|
)
|
|
—
|
|
|
(1,171
|
)
|
|
—
|
|
||||
Puts
|
|
(3,245
|
)
|
|
—
|
|
|
—
|
|
|
(3,245
|
)
|
||||
DownREIT units
|
|
(1,338
|
)
|
|
(1,338
|
)
|
|
—
|
|
|
—
|
|
||||
Indebtedness
|
|
|
|
|
|
|
|
|
||||||||
Unsecured notes
|
|
(5,446,604
|
)
|
|
(5,446,604
|
)
|
|
—
|
|
|
—
|
|
||||
Secured notes payable and variable rate unsecured indebtedness
|
|
(1,849,851
|
)
|
|
—
|
|
|
(1,849,851
|
)
|
|
—
|
|
||||
Total
|
|
$
|
(7,299,937
|
)
|
|
$
|
(5,447,942
|
)
|
|
$
|
(1,848,750
|
)
|
|
$
|
(3,245
|
)
|
•
|
repaid
$13,380,000
of
3.06%
fixed rate debt secured by Avalon Andover at par at its maturity date; and
|
•
|
entered into an agreement to sell
two
operating communities containing an aggregate of
472
apartment homes and net real estate of
$72,081,000
as of March 31, 2018, resulting in the communities qualifying as held for sale. The Company expects to complete the sales in the second quarter of 2018.
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Net income attributable to common stockholders for the
three months ended March 31, 2018
was
$141,643,000
, a decrease of
$94,232,000
, or
39.9%
, as compared to the prior year period. The decrease is primarily due to a decrease in real estate sales and related gains, coupled with increases in depreciation and interest expense, partially offset by an increase in NOI and a net casualty and impairment loss in the prior year period.
|
•
|
Established Communities NOI for the
three months ended March 31, 2018
was
$295,357,000
, an increase of
$3,645,000
, or
1.2%
, over the prior year period. This increase was driven by an increase in rental revenue of
2.4%
, partially offset by an increase in operating expenses of
5.3%
compared to the prior year period.
|
•
|
Established Communities (also known as Same Store Communities)
are consolidated communities where a comparison of operating results from the prior year to the current year is meaningful, as these communities were owned and had stabilized occupancy as of the beginning of the respective prior year period. For the
three
month periods ended
March 31, 2018
and
2017
, the Established Communities are communities that are consolidated for financial reporting purposes, had stabilized occupancy as of January 1, 2017, are not conducting or planning to conduct substantial redevelopment activities and are not held for sale or planned for disposition within the current year. A community is considered to have stabilized occupancy at the earlier of (i) attainment of
95%
physical occupancy or (ii) the
one
-year anniversary of completion of development or redevelopment.
|
•
|
Other Stabilized Communities
are all other completed consolidated communities that have stabilized occupancy, as defined above, as of the beginning of the current calendar year. Other Stabilized Communities do not include communities that are conducting or planning to conduct substantial redevelopment activities within the current year.
|
•
|
Lease-Up Communities
are consolidated communities where construction has been complete for less than
one
year and where physical occupancy has not reached
95%
.
|
•
|
Redevelopment Communities
are consolidated communities where substantial redevelopment is in progress or is planned to begin during the current year. Redevelopment is considered substantial when capital invested during the reconstruction effort is expected to exceed the lesser of
$5,000,000
or
10%
of the community's pre-redevelopment basis and is expected to have a material impact on the operations of the community, including occupancy levels and future rental rates.
|
•
|
Unconsolidated Communities
are communities that we have an indirect ownership interest in through our investment interest in an unconsolidated joint venture.
|
|
|
Number of
communities
|
|
Number of
apartment homes
|
||
|
|
|
|
|
||
Current Communities
|
|
|
|
|
|
|
|
|
|
|
|
||
Established Communities:
|
|
|
|
|
|
|
New England
|
|
34
|
|
|
8,145
|
|
Metro NY/NJ
|
|
40
|
|
|
11,690
|
|
Mid-Atlantic
|
|
27
|
|
|
9,465
|
|
Pacific Northwest
|
|
14
|
|
|
3,256
|
|
Northern California
|
|
37
|
|
|
11,033
|
|
Southern California
|
|
46
|
|
|
12,697
|
|
Total Established
|
|
198
|
|
|
56,286
|
|
|
|
|
|
|
||
Other Stabilized Communities:
|
|
|
|
|
|
|
New England
|
|
8
|
|
|
1,837
|
|
Metro NY/NJ
|
|
6
|
|
|
1,303
|
|
Mid-Atlantic
|
|
7
|
|
|
2,666
|
|
Pacific Northwest
|
|
2
|
|
|
860
|
|
Northern California
|
|
2
|
|
|
516
|
|
Southern California
|
|
10
|
|
|
2,680
|
|
Expansion Markets
|
|
2
|
|
|
622
|
|
Non Core
|
|
3
|
|
|
1,014
|
|
Total Other Stabilized
|
|
40
|
|
|
11,498
|
|
|
|
|
|
|
||
Lease-Up Communities
|
|
6
|
|
|
1,728
|
|
|
|
|
|
|
||
Redevelopment Communities (1)
|
|
15
|
|
|
6,260
|
|
|
|
|
|
|
||
Unconsolidated Communities
|
|
11
|
|
|
2,616
|
|
|
|
|
|
|
||
Total Current Communities
|
|
270
|
|
|
78,388
|
|
|
|
|
|
|
||
Development Communities (2)
|
|
18
|
|
|
5,774
|
|
|
|
|
|
|
||
Total Communities
|
|
288
|
|
|
84,162
|
|
|
|
|
|
|
||
Development Rights
|
|
28
|
|
|
9,268
|
|
(1)
|
Redevelopment Communities includes the reconstruction of the building destroyed in the Edgewater casualty loss. Due to the nature of this reconstruction, the 240 apartment homes we expect the new building to contain upon completion are not included in the apartment home count presented, and will be included upon completion.
|
(2)
|
Development Communities includes AVA North Point, expected to contain 265 apartment homes, which is being developed within an unconsolidated joint venture.
|
|
For the three months ended
|
|||||||||||||
|
3/31/2018
|
|
3/31/2017
|
|
$ Change
|
|
% Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Rental and other income
|
$
|
559,906
|
|
|
$
|
521,126
|
|
|
$
|
38,780
|
|
|
7.4
|
%
|
Management, development and other fees
|
886
|
|
|
1,200
|
|
|
(314
|
)
|
|
(26.2
|
)%
|
|||
Total revenue
|
560,792
|
|
|
522,326
|
|
|
38,466
|
|
|
7.4
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||
Direct property operating expenses, excluding property taxes
|
111,405
|
|
|
104,233
|
|
|
7,172
|
|
|
6.9
|
%
|
|||
Property taxes
|
59,896
|
|
|
52,930
|
|
|
6,966
|
|
|
13.2
|
%
|
|||
Total community operating expenses
|
171,301
|
|
|
157,163
|
|
|
14,138
|
|
|
9.0
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Corporate-level property management and other indirect operating expenses
|
18,976
|
|
|
17,490
|
|
|
1,486
|
|
|
8.5
|
%
|
|||
Investments and investment management expense
|
1,643
|
|
|
1,321
|
|
|
322
|
|
|
24.4
|
%
|
|||
Expensed acquisition, development and other pursuit costs, net of recoveries
|
800
|
|
|
728
|
|
|
72
|
|
|
9.9
|
%
|
|||
Interest expense, net
|
55,113
|
|
|
49,295
|
|
|
5,818
|
|
|
11.8
|
%
|
|||
Loss on extinguishment of debt, net
|
397
|
|
|
—
|
|
|
397
|
|
|
100.0
|
%
|
|||
Depreciation expense
|
159,059
|
|
|
140,621
|
|
|
18,438
|
|
|
13.1
|
%
|
|||
General and administrative expense
|
13,664
|
|
|
13,206
|
|
|
458
|
|
|
3.5
|
%
|
|||
Casualty and impairment (gain) loss, net
|
(58
|
)
|
|
11,688
|
|
|
(11,746
|
)
|
|
N/A (1)
|
|
|||
Total other expenses
|
249,594
|
|
|
234,349
|
|
|
15,245
|
|
|
6.5
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Equity in income of unconsolidated real estate entities
|
1,740
|
|
|
16,672
|
|
|
(14,932
|
)
|
|
(89.6
|
)%
|
|||
Gain on sale of communities
|
—
|
|
|
87,949
|
|
|
(87,949
|
)
|
|
(100.0
|
)%
|
|||
(Loss) gain on other real estate transactions
|
(47
|
)
|
|
366
|
|
|
(413
|
)
|
|
N/A (1)
|
|
|||
Income before income taxes
|
141,590
|
|
|
235,801
|
|
|
(94,211
|
)
|
|
(40.0
|
)%
|
|||
Income tax expense
|
—
|
|
|
20
|
|
|
(20
|
)
|
|
(100.0
|
)%
|
|||
Net income
|
141,590
|
|
|
235,781
|
|
|
(94,191
|
)
|
|
(39.9
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Net loss attributable to noncontrolling interests
|
53
|
|
|
94
|
|
|
(41
|
)
|
|
(43.6
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Net income attributable to common stockholders
|
$
|
141,643
|
|
|
$
|
235,875
|
|
|
$
|
(94,232
|
)
|
|
(39.9
|
)%
|
(1)
|
Percent change is not meaningful.
|
|
For the three months ended
|
||||||
|
3/31/2018
|
|
3/31/2017
|
||||
|
|
|
|
||||
Net income
|
$
|
141,590
|
|
|
$
|
235,781
|
|
Indirect operating expenses, net of corporate income
|
18,082
|
|
|
16,297
|
|
||
Investments and investment management expense
|
1,643
|
|
|
1,321
|
|
||
Expensed acquisition, development and other pursuit costs, net of recoveries
|
800
|
|
|
728
|
|
||
Interest expense, net
|
55,113
|
|
|
49,295
|
|
||
Loss on extinguishment of debt, net
|
397
|
|
|
—
|
|
||
General and administrative expense
|
13,664
|
|
|
13,206
|
|
||
Equity in income of unconsolidated real estate entities
|
(1,740
|
)
|
|
(16,672
|
)
|
||
Depreciation expense
|
159,059
|
|
|
140,621
|
|
||
Income tax expense
|
—
|
|
|
20
|
|
||
Casualty and impairment loss (gain), net
|
(58
|
)
|
|
11,688
|
|
||
Gain on sale of real estate assets
|
—
|
|
|
(87,949
|
)
|
||
Loss (gain) on other real estate transactions
|
47
|
|
|
(366
|
)
|
||
Net operating income from real estate assets sold or held for sale
|
(2,144
|
)
|
|
(8,101
|
)
|
||
Net operating income
|
$
|
386,453
|
|
|
$
|
355,869
|
|
|
For the three months ended
|
||
|
3/31/2018
|
||
|
|
|
|
Established Communities
|
$
|
3,645
|
|
Other Stabilized Communities
|
17,573
|
|
|
Development and Redevelopment Communities
|
9,366
|
|
|
Total
|
$
|
30,584
|
|
•
|
gains or losses on sales of previously depreciated operating communities;
|
•
|
cumulative effect of change in accounting principle;
|
•
|
impairment write-downs of depreciable real estate assets;
|
•
|
write-downs of investments in affiliates due to a decrease in the value of depreciable real estate assets held by those affiliates;
|
•
|
depreciation of real estate assets; and
|
•
|
adjustments for unconsolidated partnerships and joint ventures.
|
•
|
joint venture gains, costs, and promoted interests;
|
•
|
casualty and impairment losses or gains, net;
|
•
|
gains or losses from early extinguishment of consolidated borrowings;
|
•
|
abandoned pursuits;
|
•
|
business interruption insurance proceeds and the related lost NOI that is covered by the business interruption insurance proceeds;
|
•
|
property and casualty insurance proceeds and legal settlements;
|
•
|
gains or losses on sales of assets not subject to depreciation;
|
•
|
advocacy contributions, representing payments to promote our business interests;
|
•
|
hedge ineffectiveness;
|
•
|
severance related costs;
|
•
|
expensed acquisition costs related to business combinations; and
|
•
|
other non-core items.
|
|
For the three months ended
|
||||||
|
3/31/2018
|
|
3/31/2017
|
||||
|
|
|
|
||||
Net income attributable to common stockholders
|
$
|
141,643
|
|
|
$
|
235,875
|
|
Depreciation - real estate assets, including joint venture adjustments
|
158,483
|
|
|
140,957
|
|
||
Distributions to noncontrolling interests
|
11
|
|
|
11
|
|
||
Gain on sale of unconsolidated entities holding previously depreciated real estate
|
—
|
|
|
(8,697
|
)
|
||
Gain on sale of previously depreciated real estate
|
—
|
|
|
(87,949
|
)
|
||
FFO attributable to common stockholders
|
300,137
|
|
|
280,197
|
|
||
|
|
|
|
||||
Adjusting items:
|
|
|
|
||||
Joint venture losses
|
—
|
|
|
266
|
|
||
Joint venture promote (1)
|
(925
|
)
|
|
(6,765
|
)
|
||
Impairment loss on real estate (2)
|
—
|
|
|
9,350
|
|
||
Casualty (gain) loss, net on real estate (3)
|
(58
|
)
|
|
2,338
|
|
||
Lost NOI from casualty losses covered by business interruption insurance (4)
|
898
|
|
|
1,805
|
|
||
Loss on extinguishment of consolidated debt
|
397
|
|
|
—
|
|
||
Advocacy contributions
|
303
|
|
|
—
|
|
||
Severance related costs
|
370
|
|
|
124
|
|
||
Development pursuit and other write-offs
|
327
|
|
|
423
|
|
||
Loss (gain) on sale of other real estate transactions
|
47
|
|
|
(366
|
)
|
||
Legal settlements
|
300
|
|
|
—
|
|
||
Core FFO attributable to common stockholders
|
$
|
301,796
|
|
|
$
|
287,372
|
|
|
|
|
|
||||
Weighted average common shares outstanding - diluted
|
138,153,170
|
|
|
137,531,242
|
|
||
|
|
|
|
||||
EPS per common share - diluted
|
$
|
1.03
|
|
|
$
|
1.72
|
|
FFO per common share - diluted
|
$
|
2.17
|
|
|
$
|
2.04
|
|
Core FFO per common share - diluted
|
$
|
2.18
|
|
|
$
|
2.09
|
|
(1)
|
Amounts represent our promoted interest in Fund II.
|
(2)
|
Amount for the
three
months ended
March 31, 2017
is composed of an impairment charge for a land parcel we had acquired for development in 2004 and sold in July 2017.
|
(3)
|
Amount for the
three
months ended
March 31, 2017
is composed of
$19,481
for the Maplewood casualty loss, partially offset by
$17,143
of property damage insurance proceeds.
|
(4)
|
Amount for the
three
months ended
March 31, 2018
relates to the Maplewood casualty loss in Q1 2017, for which the Company recognized $3,495 in business interruption insurance proceeds in Q3 2017. Amount for the
three
months ended
March 31, 2017
relates to the Edgewater casualty loss, for which we received $20,306 in business interruption insurance proceeds in Q1 2016.
|
|
For the three months ended
|
||||||
|
3/31/2018
|
|
3/31/2017 (1)
|
||||
Net cash provided by operating activities
|
$
|
315,913
|
|
|
$
|
299,895
|
|
Net cash used in investing activities
|
$
|
(319,280
|
)
|
|
$
|
(108,880
|
)
|
Net cash provided by (used in) financing activities
|
$
|
72,868
|
|
|
$
|
(152,272
|
)
|
(1)
|
Amounts for 2017 reflect retrospective adjustments to the Condensed Consolidated Statements of Cash Flows discussed in Note 1, "Organization, Basis of Presentation and Significant Accounting Policies, Change in Accounting Principle," of the Condensed Consolidated Financial Statements included elsewhere in this report.
|
•
|
development and redevelopment activity in which we are currently engaged;
|
•
|
the minimum dividend payments on our common stock required to maintain our REIT qualification under the Code;
|
•
|
debt service and principal payments either at maturity or opportunistically before maturity; and
|
•
|
normal recurring operating expenses and corporate overhead expenses.
|
•
|
investment of
$301,299,000
in the development and redevelopment of communities; and
|
•
|
capital expenditures of
$16,975,000
for our operating communities and non-real estate assets.
|
•
|
proceeds from the issuance of unsecured notes in the amount of
$299,442,000
, less deferred financing costs for the issuance activity of
$3,244,000
.
|
•
|
payment of cash dividends in the amount of
$195,999,000
; and
|
•
|
the repayment of secured notes in the amount of
$28,584,000
.
|
•
|
limitations on the amount of total and secured debt in relation to our overall capital structure;
|
•
|
limitations on the amount of our unsecured debt relative to the undepreciated basis of real estate assets that are not encumbered by property-specific financing; and
|
•
|
minimum levels of debt service coverage.
|
•
|
In February 2018, we repaid
$15,174,000
of fixed rate debt secured by Avalon Oaks West in advance of its scheduled maturity date, incurring a charge of
$426,000
, consisting of a prepayment penalty of
$152,000
and the non-cash write-off of unamortized deferred financing costs of
$274,000
.
|
•
|
In February 2018, we repaid
$11,038,000
of fixed rate debt secured by AVA Pasadena at par in advance of its scheduled maturity date.
|
•
|
In March 2018, we issued
$300,000,000
principal amount of unsecured notes in a public offering under our existing shelf registration statement for net proceeds of approximately
$296,210,000
. The notes mature in
April 2048
and were issued at a
4.35%
interest rate. The effective interest rate of the notes for the first
10
years is
3.97%
, including the impact of an interest rate hedge and offering costs, and for the remainder of the term the effective interest rate will be
4.39%
.
|
|
|
All-In
interest rate (1) |
|
Principal
maturity date |
|
Balance Outstanding (2)
|
|
Scheduled Maturities
|
|||||||||||||||||||||||||||||
Community
|
|
|
|
12/31/2017
|
|
3/31/2018
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|||||||||||||||||||
Tax-exempt bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Avalon Oaks West
|
|
7.55
|
%
|
|
Apr-2043
|
(3)
|
$
|
15,213
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Avalon at Chestnut Hill
|
|
6.16
|
%
|
|
Oct-2047
|
|
38,097
|
|
|
37,966
|
|
|
405
|
|
|
566
|
|
|
596
|
|
|
629
|
|
|
663
|
|
|
35,107
|
|
||||||||
Avalon Westbury
|
|
3.81
|
%
|
|
Nov-2036
|
(4)
|
62,200
|
|
|
62,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
62,200
|
|
||||||||
|
|
|
|
|
|
|
115,510
|
|
|
100,166
|
|
|
405
|
|
|
566
|
|
|
596
|
|
|
629
|
|
|
663
|
|
|
97,307
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Variable rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Eaves Mission Viejo
|
|
2.40
|
%
|
|
Jun-2025
|
(5)
|
7,635
|
|
|
7,635
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,635
|
|
||||||||
AVA Nob Hill
|
|
2.39
|
%
|
|
Jun-2025
|
(5)
|
20,800
|
|
|
20,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,800
|
|
||||||||
Avalon Campbell
|
|
2.72
|
%
|
|
Jun-2025
|
(5)
|
38,800
|
|
|
38,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,800
|
|
||||||||
Eaves Pacifica
|
|
2.74
|
%
|
|
Jun-2025
|
(5)
|
17,600
|
|
|
17,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,600
|
|
||||||||
Avalon Bowery Place I
|
|
4.27
|
%
|
|
Nov-2037
|
(5)
|
93,800
|
|
|
93,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
93,800
|
|
||||||||
Avalon Acton
|
|
3.18
|
%
|
|
Jul-2040
|
(5)
|
45,000
|
|
|
45,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,000
|
|
||||||||
Avalon Morningside Park
|
|
4.02
|
%
|
|
May-2046
|
(4)
|
100,000
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
345
|
|
|
405
|
|
|
99,250
|
|
||||||||
Avalon Clinton North
|
|
3.27
|
%
|
|
Nov-2038
|
(5)
|
147,000
|
|
|
147,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
147,000
|
|
||||||||
Avalon Clinton South
|
|
3.27
|
%
|
|
Nov-2038
|
(5)
|
121,500
|
|
|
121,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
121,500
|
|
||||||||
Avalon Midtown West
|
|
3.18
|
%
|
|
May-2029
|
(5)
|
100,500
|
|
|
100,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,500
|
|
||||||||
Avalon San Bruno I
|
|
3.16
|
%
|
|
Dec-2037
|
(5)
|
64,450
|
|
|
64,450
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64,450
|
|
||||||||
Avalon Calabasas
|
|
2.90
|
%
|
|
Apr-2028
|
(5)
|
44,410
|
|
|
44,410
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,410
|
|
||||||||
|
|
|
|
|
|
801,495
|
|
|
801,495
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
345
|
|
|
405
|
|
|
800,745
|
|
|||||||||
Conventional loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
$250 million unsecured notes
|
|
6.19
|
%
|
|
Mar-2020
|
|
250,000
|
|
|
250,000
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
$250 million unsecured notes
|
|
4.04
|
%
|
|
Jan-2021
|
|
250,000
|
|
|
250,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|
—
|
|
|
—
|
|
||||||||
$450 million unsecured notes
|
|
4.30
|
%
|
|
Sep-2022
|
|
450,000
|
|
|
450,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
450,000
|
|
|
—
|
|
||||||||
$250 million unsecured notes
|
|
3.00
|
%
|
|
Mar-2023
|
|
250,000
|
|
|
250,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250,000
|
|
||||||||
$400 million unsecured notes
|
|
3.78
|
%
|
|
Oct-2020
|
|
400,000
|
|
|
400,000
|
|
|
—
|
|
|
—
|
|
|
400,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
$350 million unsecured notes
|
|
4.30
|
%
|
|
Dec-2023
|
|
350,000
|
|
|
350,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350,000
|
|
||||||||
$300 million unsecured notes
|
|
3.66
|
%
|
|
Nov-2024
|
|
300,000
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||||||
$525 million unsecured notes
|
|
3.55
|
%
|
|
Jun-2025
|
|
525,000
|
|
|
525,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
525,000
|
|
||||||||
$300 million unsecured notes
|
|
3.62
|
%
|
|
Nov-2025
|
|
300,000
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||||||
$475 million unsecured notes
|
|
3.35
|
%
|
|
May-2026
|
|
475,000
|
|
|
475,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
475,000
|
|
||||||||
$300 million unsecured notes
|
|
3.01
|
%
|
|
Oct-2026
|
|
300,000
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||||||
$350 million unsecured notes
|
|
3.95
|
%
|
|
Oct-2046
|
|
350,000
|
|
|
350,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
350,000
|
|
||||||||
$400 million unsecured notes
|
|
3.50
|
%
|
|
May-2027
|
|
400,000
|
|
|
400,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400,000
|
|
||||||||
$300 million unsecured notes
|
|
4.09
|
%
|
|
Jul-2047
|
|
300,000
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||||||
$450 million unsecured notes
|
|
3.32
|
%
|
|
Jan-2028
|
|
450,000
|
|
|
450,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
450,000
|
|
||||||||
$300 million unsecured notes
|
|
3.97
|
%
|
|
Apr-2048
|
|
—
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
||||||||
Avalon Orchards
|
|
7.80
|
%
|
|
Jul-2033
|
|
15,579
|
|
|
15,439
|
|
|
437
|
|
|
619
|
|
|
663
|
|
|
710
|
|
|
760
|
|
|
12,250
|
|
||||||||
Avalon Walnut Creek
|
|
4.00
|
%
|
|
Jul-2066
|
|
3,557
|
|
|
3,557
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,557
|
|
||||||||
AVA Pasadena
|
|
4.06
|
%
|
|
Jun-2018
|
(3)
|
11,073
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Eaves Los Feliz
|
|
3.68
|
%
|
|
Jun-2027
|
|
41,400
|
|
|
41,400
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41,400
|
|
||||||||
Eaves Woodland Hills
|
|
3.67
|
%
|
|
Jun-2027
|
|
111,500
|
|
|
111,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111,500
|
|
||||||||
Avalon Russett
|
|
3.77
|
%
|
|
Jun-2027
|
|
32,200
|
|
|
32,200
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,200
|
|
||||||||
Avalon San Bruno II
|
|
3.85
|
%
|
|
Apr-2021
|
|
29,533
|
|
|
29,397
|
|
|
398
|
|
|
564
|
|
|
591
|
|
|
27,844
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Westbury
|
|
4.88
|
%
|
|
Nov-2036
|
(4)
|
16,450
|
|
|
16,120
|
|
|
1,025
|
|
|
1,430
|
|
|
1,495
|
|
|
1,575
|
|
|
1,655
|
|
|
8,940
|
|
||||||||
Avalon San Bruno III
|
|
3.18
|
%
|
|
Jun-2020
|
|
53,315
|
|
|
53,007
|
|
|
918
|
|
|
1,264
|
|
|
50,825
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Andover
|
|
3.28
|
%
|
|
Apr-2018
|
(6)
|
13,498
|
|
|
13,410
|
|
|
13,410
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Natick
|
|
3.14
|
%
|
|
Apr-2019
|
|
13,831
|
|
|
13,745
|
|
|
263
|
|
|
13,482
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Hoboken
|
|
3.55
|
%
|
|
Dec-2020
|
|
67,904
|
|
|
67,904
|
|
|
—
|
|
|
—
|
|
|
67,904
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Columbia Pike
|
|
3.24
|
%
|
|
Nov-2019
|
|
68,637
|
|
|
68,246
|
|
|
1,162
|
|
|
67,084
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
|
|
|
|
|
5,828,477
|
|
|
6,115,925
|
|
|
17,613
|
|
|
84,443
|
|
|
771,478
|
|
|
280,129
|
|
|
452,415
|
|
|
4,509,847
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All-In
interest rate (1) |
|
Principal
maturity date |
|
Balance Outstanding (2)
|
|
Scheduled Maturities
|
|||||||||||||||||||||||||||||
Community
|
|
|
|
12/31/2017
|
|
3/31/2018
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|||||||||||||||||||
Variable rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Avalon Calabasas
|
|
2.41
|
%
|
|
Aug-2018
|
(5)
|
52,092
|
|
|
51,773
|
|
|
51,773
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Avalon Natick
|
|
3.50
|
%
|
|
Apr-2019
|
(5)
|
35,039
|
|
|
34,820
|
|
|
665
|
|
|
34,155
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Archstone Lexington
|
|
3.49
|
%
|
|
Oct-2020
|
|
21,700
|
|
|
21,700
|
|
|
—
|
|
|
—
|
|
|
21,700
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Term Loan - $100 million
|
|
2.74
|
%
|
|
Feb-2022
|
|
100,000
|
|
|
100,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100,000
|
|
|
—
|
|
||||||||
Term Loan - $150 million
|
|
3.28
|
%
|
|
Feb-2024
|
|
150,000
|
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
||||||||
$300 million unsecured notes
|
|
2.03
|
%
|
|
Jan-2021
|
|
300,000
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
300,000
|
|
|
—
|
|
|
—
|
|
||||||||
|
|
|
|
|
|
|
658,831
|
|
|
658,293
|
|
|
52,438
|
|
|
34,155
|
|
|
21,700
|
|
|
300,000
|
|
|
100,000
|
|
|
150,000
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total indebtedness - excluding Credit Facility
|
|
|
|
|
|
|
$
|
7,404,313
|
|
|
$
|
7,675,879
|
|
|
$
|
70,456
|
|
|
$
|
119,164
|
|
|
$
|
793,774
|
|
|
$
|
581,103
|
|
|
$
|
553,483
|
|
|
$
|
5,557,899
|
|
(1)
|
Rates are given as of
March 31, 2018
and include credit enhancement fees, facility fees, trustees' fees, the impact of interest rate hedges, offering costs, mark to market amortization and other fees.
|
(2)
|
Balances outstanding represent total amounts due at maturity, and exclude deferred financing costs and debt discount for the unsecured notes of
$49,367
and
$47,236
as of
March 31, 2018
and
December 31, 2017
, respectively, and deferred financing costs and debt discount associated with secured notes of
$27,057
and
$27,607
as of
March 31, 2018
and
December 31, 2017
, respectively, as reflected on our Condensed Consolidated Balance Sheets included elsewhere in this report.
|
(3)
|
In February 2018, we repaid this borrowing in advance of its scheduled maturity date.
|
(4)
|
Maturity date reflects the contractual maturity of the underlying bond. There is also an associated earlier credit enhancement maturity date.
|
(5)
|
Financed by variable rate debt, but interest rate is capped through an interest rate protection agreement.
|
(6)
|
In April 2018, we repaid this borrowing at par at its scheduled maturity date.
|
|
|
Company
ownership percentage
|
|
# of Apartment homes
|
|
Total capitalized cost (1)
|
|
Debt (2)
|
|||||||||||||
|
|
|
|
|
|
|
|
|
Interest rate (3)
|
|
Maturity date
|
||||||||||
Unconsolidated Real Estate Investments
|
|
|
|
|
Amount
|
|
Type
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
U.S. Fund
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
1. Avalon Studio 4121 - Studio City, CA
|
|
|
|
|
149
|
|
|
$
|
57,080
|
|
|
$
|
28,763
|
|
|
Fixed
|
|
3.34
|
%
|
|
Nov 2022
|
2. Avalon Marina Bay - Marina del Rey, CA (4)
|
|
|
|
|
205
|
|
|
77,186
|
|
|
51,300
|
|
|
Fixed
|
|
1.56
|
%
|
|
Dec 2020
|
||
3. Avalon Venice on Rose - Venice, CA
|
|
|
|
|
70
|
|
|
57,364
|
|
|
28,911
|
|
|
Fixed
|
|
3.28
|
%
|
|
Jun 2020
|
||
4. Avalon Station 250 - Dedham, MA
|
|
|
|
|
285
|
|
|
97,117
|
|
|
56,048
|
|
|
Fixed
|
|
3.73
|
%
|
|
Sep 2022
|
||
5. Avalon Grosvenor Tower - Bethesda, MD
|
|
|
|
|
237
|
|
|
80,098
|
|
|
43,442
|
|
|
Fixed
|
|
3.74
|
%
|
|
Sep 2022
|
||
6. Avalon Kirkland at Carillon - Kirkland, WA
|
|
|
|
|
131
|
|
|
60,716
|
|
|
28,240
|
|
|
Fixed
|
|
3.75
|
%
|
|
Feb 2019
|
||
Total U.S. Fund
|
|
28.6
|
%
|
|
1,077
|
|
|
429,561
|
|
|
236,704
|
|
|
|
|
3.16
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
AC JV
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
1. Avalon North Point - Cambridge, MA (5)
|
|
|
|
|
426
|
|
|
188,153
|
|
|
111,653
|
|
|
Fixed
|
|
6.00
|
%
|
|
Aug 2021
|
||
2. Avalon Woodland Park - Herndon, VA (5)
|
|
|
|
|
392
|
|
|
86,376
|
|
|
50,647
|
|
|
Fixed
|
|
6.00
|
%
|
|
Aug 2021
|
||
3. Avalon North Point Lofts - Cambridge, MA
|
|
|
|
103
|
|
|
26,805
|
|
|
—
|
|
|
N/A
|
|
N/A
|
|
|
N/A
|
|||
Total AC JV
|
|
20.0
|
%
|
|
921
|
|
|
301,334
|
|
|
162,300
|
|
|
|
|
6.00
|
%
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Other Operating Joint Ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
1. MVP I, LLC
|
|
25.0
|
%
|
|
313
|
|
|
125,246
|
|
|
103,000
|
|
|
Fixed
|
|
3.24
|
%
|
|
Jul 2025
|
||
2. Brandywine Apartments of Maryland, LLC
|
|
28.7
|
%
|
|
305
|
|
|
19,384
|
|
|
22,621
|
|
|
Fixed
|
|
3.40
|
%
|
|
Jun 2028
|
||
Total Other Joint Ventures
|
|
|
|
618
|
|
|
144,630
|
|
|
125,621
|
|
|
|
|
3.27
|
%
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Unconsolidated Investments
|
|
|
|
2,616
|
|
|
$
|
875,525
|
|
|
$
|
524,625
|
|
|
|
|
4.06
|
%
|
|
|
(1)
|
Represents total capitalized cost as of
March 31, 2018
.
|
(2)
|
We have not guaranteed the debt of unconsolidated investees and bear no responsibility for the repayment.
|
(3)
|
Represents weighted average rate on outstanding debt as of
March 31, 2018
.
|
(4)
|
Borrowing on this community is a variable rate loan which has been converted to a fixed rate borrowing with an interest rate swap.
|
(5)
|
Borrowing is comprised of loans made by the equity investors in the venture in proportion to their equity interests.
|
(1)
|
Projected total capitalized cost includes all capitalized costs projected to be or actually incurred to develop the respective Development Community, determined in accordance with GAAP, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees. Projected total capitalized cost for communities identified as having joint venture ownership, either during construction or upon construction completion, represents the total projected joint venture contribution amount.
|
(2)
|
Initial projected occupancy dates are estimates. There can be no assurance that we will pursue to completion any or all of these proposed developments.
|
(3)
|
Stabilized operations is defined as the earlier of (i) attainment of
95%
or greater physical occupancy or (ii) the
one
-year anniversary of completion of development.
|
(4)
|
In February 2017, a fire occurred at Maplewood. See Note 5, "Investments in Real Estate Entities - Casualty Gains and Losses," in the accompanying Condensed Consolidated Financial Statements for additional discussion related to the Maplewood casualty loss.
|
(5)
|
We are developing this project within an unconsolidated joint venture that was formed in July 2016, in which we own a
55.0%
interest. The projected total capitalized cost above represents the total cost for the venture.
|
(6)
|
Development communities containing at least 10,000 square feet of retail space include 11 West 61st Street (67,000 square feet), Avalon Belltown Towers (11,000 square feet) and AVA Hollywood (19,000 square feet).
|
|
Number of
apartment homes |
|
Total capitalized
cost (1)
($ millions) |
|
Approximate rentable area
(sq. ft.)
|
|
Total capitalized cost per sq. ft.
|
||||||||
1.
|
|
AVA NoMa
Washington, D.C.
|
438
|
|
|
$
|
144
|
|
|
373,828
|
|
|
$
|
385
|
|
2.
|
|
Avalon Brooklyn Bay (2)
Brooklyn, NY |
180
|
|
|
97
|
|
|
149,881
|
|
|
$
|
647
|
|
|
3.
|
|
Avalon Somers
Somers, NY
|
152
|
|
|
46
|
|
|
179,401
|
|
|
$
|
256
|
|
|
|
|
Total
|
770
|
|
|
$
|
287
|
|
|
|
|
|
(1)
|
Total capitalized cost is as of
March 31, 2018
. We generally anticipate incurring additional costs associated with these communities that are customary for new developments.
|
(2)
|
We developed this project with a private development partner. We own the rental portion of the development on floors 3 through 19 and the partner owns the for-sale condominium portion of the development on floors 20 through 30. The information above represents only our portion of the project. We provided a construction loan to the development partner in the amount of
$41,976,000
for outstanding principal and interest, net of repayments, as of
March 31, 2018
. The loan is being repaid with proceeds the venture partner receives from the sale of the condominium portion of the project.
|
|
|
|
|
Number of
apartment
homes
|
|
Projected total
capitalized cost (1)
($ millions)
|
|
Reconstruction
start
|
|
Estimated
reconstruction
completion
|
|
Estimated
restabilized
operations (2)
|
|||
1.
|
|
AVA Toluca Hills
Los Angeles, CA
|
|
1,151
|
|
|
$
|
79
|
|
|
Q1 2017
|
|
Q1 2019
|
|
Q3 2019
|
2.
|
|
Avalon Prudential Center II
Boston, MA
|
|
266
|
|
|
19
|
|
|
Q1 2017
|
|
Q3 2019
|
|
Q1 2020
|
|
3.
|
|
Avalon Midtown West
New York, NY
|
|
550
|
|
|
30
|
|
|
Q1 2017
|
|
Q2 2019
|
|
Q4 2019
|
|
4.
|
|
Avalon at Edgewater II (3)
Edgewater, NJ |
|
240
|
|
|
60
|
|
|
Q2 2017
|
|
Q4 2018
|
|
Q2 2019
|
|
5.
|
|
Avalon at Florham Park
Florham Park, NJ
|
|
270
|
|
|
13
|
|
|
Q3 2017
|
|
Q3 2018
|
|
Q1 2019
|
|
6.
|
|
AVA Van Ness
Washington, D.C.
|
|
269
|
|
|
20
|
|
|
Q3 2017
|
|
Q1 2019
|
|
Q3 2019
|
|
7.
|
|
Avalon Ballston Square
Arlington, VA
|
|
714
|
|
|
25
|
|
|
Q4 2017
|
|
Q1 2019
|
|
Q3 2019
|
|
8.
|
|
Eaves Los Feliz
Los Angeles, CA.
|
|
263
|
|
|
6
|
|
|
Q1 2018
|
|
Q4 2018
|
|
Q2 2019
|
|
9.
|
|
Eaves Seal Beach
Seal Beach, CA
|
|
549
|
|
|
10
|
|
|
Q1 2018
|
|
Q4 2018
|
|
Q2 2019
|
|
10.
|
|
Avalon Walnut Ridge II
Walnut Creek, CA
|
|
360
|
|
|
7
|
|
|
Q1 2018
|
|
Q4 2018
|
|
Q2 2019
|
|
11.
|
|
Eaves Redmond Campus
Redmond, WA
|
|
422
|
|
|
17
|
|
|
Q1 2018
|
|
Q4 2018
|
|
Q2 2019
|
|
12.
|
|
Eaves Fairfax Towers
Falls Church, VA
|
|
415
|
|
|
6
|
|
|
Q1 2018
|
|
Q2 2019
|
|
Q4 2019
|
|
13.
|
|
Avalon at Newton Highlands
Newton, MA
|
|
294
|
|
|
12
|
|
|
Q1 2018
|
|
Q4 2018
|
|
Q2 2019
|
|
14.
|
|
Avalon Prudential Center I
Boston, MA
|
|
243
|
|
|
18
|
|
|
Q1 2018
|
|
Q2 2020
|
|
Q4 2020
|
|
15.
|
|
Avalon Court
Melville, NY
|
|
494
|
|
|
8
|
|
|
Q1 2018
|
|
Q3 2018
|
|
Q1 2019
|
|
|
|
Total
|
|
6,500
|
|
|
$
|
330
|
|
|
|
|
|
|
|
(1)
|
Projected total capitalized cost does not include capitalized costs incurred prior to redevelopment.
|
(2)
|
Estimated restabilized operations is defined as the earlier of (i) attainment of 95% or greater physical occupancy or (ii) the one-year anniversary of completion of redevelopment.
|
(3)
|
Redevelopment Communities includes the reconstruction of the building destroyed in the Edgewater casualty loss. Due to the nature of this reconstruction, the 240 apartment homes that we expect the new building to contain upon completion are not included in the apartment home count presented elsewhere in this Form 10-Q, and will be included upon completion.
|
Market
|
|
Number of rights
|
|
Estimated
number of homes
|
|
Projected total
capitalized cost ($ millions) (1)
|
||||
|
|
|
|
|
|
|
||||
New England
|
|
6
|
|
|
1,380
|
|
|
$
|
508
|
|
Metro NY/NJ
|
|
10
|
|
|
3,770
|
|
|
1,488
|
|
|
Mid-Atlantic
|
|
3
|
|
|
1,058
|
|
|
305
|
|
|
Pacific Northwest
|
|
1
|
|
|
272
|
|
|
80
|
|
|
Northern California
|
|
5
|
|
|
1,507
|
|
|
762
|
|
|
Southern California
|
|
3
|
|
|
1,281
|
|
|
581
|
|
|
Total
|
|
28
|
|
|
9,268
|
|
|
$
|
3,724
|
|
(1)
|
Projected total capitalized cost includes all capitalized costs incurred to date (if any) and projected to be incurred to develop the respective community, determined in accordance with GAAP, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees.
|
•
|
our potential development, redevelopment, acquisition or disposition of communities;
|
•
|
the timing and cost of completion of apartment communities under construction, reconstruction, development or redevelopment;
|
•
|
the timing of lease-up, occupancy and stabilization of apartment communities;
|
•
|
the pursuit of land on which we are considering future development;
|
•
|
the anticipated operating performance of our communities;
|
•
|
cost, yield, revenue, NOI and earnings estimates;
|
•
|
our declaration or payment of dividends;
|
•
|
our joint venture and discretionary fund activities;
|
•
|
our policies regarding investments, indebtedness, acquisitions, dispositions, financings and other matters;
|
•
|
our qualification as a REIT under the Internal Revenue Code;
|
•
|
the real estate markets in Northern and Southern California and markets in selected states in the Mid-Atlantic, New England, Metro New York/New Jersey and Pacific Northwest regions of the United States and in general;
|
•
|
the availability of debt and equity financing;
|
•
|
interest rates;
|
•
|
general economic conditions including the potential impacts from current economic conditions;
|
•
|
trends affecting our financial condition or results of operations; and
|
•
|
the impact of legal proceedings relating to the Edgewater casualty loss and related matters, including liability to third parties resulting therefrom.
|
•
|
we may fail to secure development opportunities due to an inability to reach agreements with third-parties to obtain land at attractive prices or to obtain desired zoning and other local approvals;
|
•
|
we may abandon or defer development opportunities for a number of reasons, including changes in local market conditions which make development less desirable, increases in costs of development, increases in the cost of capital or lack of capital availability, resulting in losses;
|
•
|
construction costs of a community may exceed our original estimates;
|
•
|
we may not complete construction and lease-up of communities under development or redevelopment on schedule, resulting in increased interest costs and construction costs and a decrease in our expected rental revenues;
|
•
|
occupancy rates and market rents may be adversely affected by competition and local economic and market conditions which are beyond our control;
|
•
|
financing may not be available on favorable terms or at all, and our cash flows from operations and access to cost effective capital may be insufficient for the development of our pipeline which could limit our pursuit of opportunities;
|
•
|
our cash flows may be insufficient to meet required payments of principal and interest, and we may be unable to refinance existing indebtedness or the terms of such refinancing may not be as favorable as the terms of existing indebtedness;
|
•
|
we may be unsuccessful in our management of the U.S. Fund, the AC JV or the REIT vehicles that are used with each respective joint venture;
|
•
|
we may be unsuccessful in managing changes in our portfolio composition; and
|
•
|
our expectations, estimates and assumptions as of the date of this filing regarding the outcome of investigations and/or legal proceedings resulting from the Edgewater casualty loss are subject to change.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROL AND PROCEDURES
|
(a)
|
Evaluation of disclosure controls and procedures.
|
(b)
|
Changes in internal controls over financial reporting.
|
PART II.
|
OTHER INFORMATION
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
(a)
Total Number of Shares
Purchased (1)
|
|
(b)
Average Price Paid
Per Share
|
|
(c)
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans or
Programs
|
|
(d)
Maximum Dollar
Amount that May Yet
be Purchased Under
the Plans or Programs
(in thousands) (2)
|
||||||
January 1 - January 31, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
200,000
|
|
February 1 - February 28, 2018
|
|
126
|
|
|
$
|
161.10
|
|
|
—
|
|
|
$
|
200,000
|
|
March 1 - March 31, 2018
|
|
67,483
|
|
|
$
|
155.05
|
|
|
—
|
|
|
$
|
200,000
|
|
(1)
|
Reflects shares surrendered to the Company in connection with exercise of stock options as payment of exercise price, as well as for taxes associated with the vesting of restricted share grants.
|
(2)
|
As disclosed in our Form 10-Q for the quarter ended March 31, 2008, represents amounts outstanding under the Company's
$500,000,000
Stock Repurchase Program. There is no scheduled expiration date to this program.
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
Exhibit No.
|
|
|
|
Description
|
|
|
|
|
|
3(i).1
|
|
—
|
|
|
3(i).2
|
|
—
|
|
|
3(i).3
|
|
—
|
|
|
3(ii).1
|
|
—
|
|
|
3(ii).2
|
|
—
|
|
|
3(ii).3
|
|
—
|
|
|
4.1
|
|
—
|
|
|
4.2
|
|
—
|
|
|
4.3
|
|
—
|
|
|
4.4
|
|
—
|
|
|
4.5
|
|
—
|
|
|
4.6
|
|
—
|
|
|
4.7
|
|
—
|
|
|
4.8
|
|
—
|
|
|
4.9
|
|
—
|
|
|
10.1
|
|
—
|
|
10.2
|
|
—
|
|
|
10.3
|
|
—
|
|
|
10.4
|
|
—
|
|
|
10.5
|
|
—
|
|
|
10.6
|
|
—
|
|
|
12.1
|
|
—
|
|
|
31.1
|
|
—
|
|
|
31.2
|
|
—
|
|
|
32
|
|
—
|
|
|
101
|
|
—
|
|
XBRL (Extensible Business Reporting Language). The following materials from AvalonBay Communities, Inc.'s Quarterly Report on Form 10-Q for the period ended March 31, 2018, formatted in XBRL: (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of comprehensive income, (iii) condensed consolidated statements of cash flows and (iv) notes to condensed consolidated financial statements.
|
|
AVALONBAY COMMUNITIES, INC.
|
|
|
|
|
|
|
|
Date:
|
May 4, 2018
|
/s/ Timothy J. Naughton
|
|
|
Timothy J. Naughton
|
|
|
Chairman, Chief Executive Officer and President
|
|
|
(Principal Executive Officer)
|
|
|
|
Date:
|
May 4, 2018
|
/s/ Kevin P. O'Shea
|
|
|
Kevin P. O'Shea
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial Officer)
|
|
Three Months Ended March 31, 2018
|
|
Year Ended
December 31, 2017 |
|
Year Ended
December 31, 2016 |
|
Year Ended
December 31, 2015 |
|
Year Ended
December 31, 2014 (1) |
||||||||||
Income from continuing operations before cumulative effect of change in accounting principle
|
$
|
141,590
|
|
|
$
|
876,801
|
|
|
$
|
1,034,013
|
|
|
$
|
743,216
|
|
|
$
|
668,516
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Plus):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity in income of unconsolidated entities, net of distributions received
|
2,085
|
|
|
29,226
|
|
|
60,103
|
|
|
84,764
|
|
|
71,781
|
|
|||||
Amortization of capitalized interest (2)
|
7,591
|
|
|
29,927
|
|
|
27,779
|
|
|
25,150
|
|
|
22,489
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings before fixed charges
|
$
|
151,266
|
|
|
$
|
935,954
|
|
|
$
|
1,121,895
|
|
|
$
|
853,130
|
|
|
$
|
762,786
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Plus) Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Portion of rents representative of the interest factor
|
$
|
2,145
|
|
|
$
|
8,338
|
|
|
$
|
8,483
|
|
|
$
|
7,790
|
|
|
$
|
7,504
|
|
Interest expense
|
55,113
|
|
|
199,661
|
|
|
187,510
|
|
|
175,615
|
|
|
180,618
|
|
|||||
Interest capitalized
|
13,164
|
|
|
64,420
|
|
|
78,872
|
|
|
79,834
|
|
|
69,961
|
|
|||||
Preferred dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total fixed charges (3)
|
$
|
70,422
|
|
|
$
|
272,419
|
|
|
$
|
274,865
|
|
|
$
|
263,239
|
|
|
$
|
258,083
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Less):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest capitalized
|
13,164
|
|
|
64,420
|
|
|
78,872
|
|
|
79,834
|
|
|
69,961
|
|
|||||
Preferred dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Noncontrolling interest in income of a subsidiary that has not incurred fixed charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,132
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (4)
|
$
|
208,524
|
|
|
$
|
1,143,953
|
|
|
$
|
1,317,888
|
|
|
$
|
1,036,535
|
|
|
$
|
936,776
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio (4 divided by 3)
|
2.96
|
|
|
4.20
|
|
|
4.79
|
|
|
3.94
|
|
|
3.63
|
|
|
Three Months Ended March 31, 2018
|
|
Year Ended
December 31, 2017 |
|
Year Ended
December 31, 2016 |
|
Year Ended
December 31, 2015 |
|
Year Ended
December 31, 2014 (1) |
||||||||||
Income from continuing operations before cumulative effect of change in accounting principle
|
$
|
141,590
|
|
|
$
|
876,801
|
|
|
$
|
1,034,013
|
|
|
$
|
743,216
|
|
|
$
|
668,516
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Plus):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Equity in income of unconsolidated entities, net of distributions received
|
2,085
|
|
|
29,226
|
|
|
60,103
|
|
|
84,764
|
|
|
71,781
|
|
|||||
Amortization of capitalized interest (2)
|
7,591
|
|
|
29,927
|
|
|
27,779
|
|
|
25,150
|
|
|
22,489
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings before fixed charges
|
$
|
151,266
|
|
|
$
|
935,954
|
|
|
$
|
1,121,895
|
|
|
$
|
853,130
|
|
|
$
|
762,786
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Plus) Fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Portion of rents representative of the interest factor
|
$
|
2,145
|
|
|
$
|
8,338
|
|
|
$
|
8,483
|
|
|
$
|
7,790
|
|
|
$
|
7,504
|
|
Interest expense
|
55,113
|
|
|
199,661
|
|
|
187,510
|
|
|
175,615
|
|
|
180,618
|
|
|||||
Interest capitalized
|
13,164
|
|
|
64,420
|
|
|
78,872
|
|
|
79,834
|
|
|
69,961
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total fixed charges (3)
|
$
|
70,422
|
|
|
$
|
272,419
|
|
|
$
|
274,865
|
|
|
$
|
263,239
|
|
|
$
|
258,083
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Less):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest capitalized
|
13,164
|
|
|
64,420
|
|
|
78,872
|
|
|
79,834
|
|
|
69,961
|
|
|||||
Noncontrolling interest in income of a subsidiary that has not incurred fixed charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,132
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings (4)
|
$
|
208,524
|
|
|
$
|
1,143,953
|
|
|
$
|
1,317,888
|
|
|
$
|
1,036,535
|
|
|
$
|
936,776
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio (4 divided by 3)
|
2.96
|
|
|
4.20
|
|
|
4.79
|
|
|
3.94
|
|
|
3.63
|
|
(1)
|
The results of operations for 2014 have been adjusted to remove the Company's earnings classified as discontinued operations.
|
(2)
|
Represents an estimate of capitalized interest costs based on the Company’s established depreciation policy and an analysis of interest costs capitalized since 1998 (the year in which AvalonBay was formed).
|
1.
|
I have reviewed this quarterly report on Form 10-Q of AvalonBay Communities, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
/s/ Timothy J. Naughton
|
|
Timothy J. Naughton
|
|
Chairman, Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of AvalonBay Communities, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Kevin P. O'Shea
|
|
Kevin P. O'Shea
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
/s/ Timothy J. Naughton
|
|
Timothy J. Naughton
|
|
Chairman, Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ Kevin P. O'Shea
|
|
Kevin P. O'Shea
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|