AVB

In addition, the price of our common stock may fluctuate significantly and/or decline in a high interest rate environment or a volatile economic environment, or if we dilute the interest of stockholders by issuing additional equity

from lower cash amounts invested at lower rates, increased commercial paper outstanding and increased effective interest expense for our unsecured indebtedness

18) Property management and other indirect operating expenses (39,933) (37,843) Expensed transaction, development and other pursuit costs, net of recoveries (3,416) (4,744) Interest expense, net (71,489) (59,864) Depreciation expense (233,104) (217,888) General and administrative expense (22,077) (19,780) Casualty and impairment loss (4,619) — Loss from unconsolidated investments (6,527) (999) Structured Investment Program interest income 7,481 6,113 Gain on sale of communities 179,912 56,469 Other real estate a

We compute this adjustment by multiplying the total capitalized cost of the unsold for-sale residential condominiums by the weighted average effective interest rate on our unsecured debt

compute this adjustment by multiplying the total capitalized cost of completed and unsold for-sale residential condominiums by the weighted average effective interest rate on our unsecured debt

39 Table of Contents Inflation can adversely impact our current and expected operating results by increasing (i) our corporate and community level operating costs, (ii) our cost of capital for new or variable rate borrowing activity as well as (iii) the costs for construction, dev

• the availability of debt and equity financing

• the inability or unwillingness of residents to pay rent increases, including as a result of inflation, higher interest rates or broader cost-of-living pressures

where residential rent increases at renewal in communities older than fifteen years are limited to the lesser of 10% or 5% plus local consumer price index ("CPI"), the State of Washington, which has similar rules limiting rent increases to the lesser of 10% or 7% plus local CPI for communities older than 12 years, and in New York, where laws regulate increases on those units that are subject to rent-control or ren

compute this adjustment by multiplying the total capitalized cost of completed and unsold for-sale residential condominiums by the weighted average effective interest rate on our unsecured debt

We compute this adjustment by multiplying the total capitalized cost of the unsold for-sale residential condominiums by the weighted average effective interest rate on our unsecured debt

where residential rent increases at renewal in communities older than fifteen years are limited to the lesser of 10% or 5% plus local consumer price index ("CPI"), the State of Washington, which has similar rules limiting rent increases to the lesser of 10% or 7% plus local CPI for communities older than 12 years, and in New York, where laws regulate increases on those units that are subject to rent-control or ren

In addition, the price of our common stock may fluctuate significantly and/or decline in a high interest rate environment or a volatile economic environment, or if we dilute the interest of stockholders by issuing additional equity

and related margins, liquidity and access to capital markets. The form, timing and/or amount of dividend distributions in future periods may vary and be impacted by our revenue generation, other liquidity needs and economic and other considerations. The form, timing and/or amount of dividend distributions will be declared at the discretion of the Board of Directors and will depend on our rental revenue, actual cash from operations, our financial condition, capital requirements, the annual distribution requirem

conditions. Operating & Property Management Strategy. We seek to increase operating income through innovative, proactive property management that will result in higher revenue from communities while constraining operating expenses. Our principal strategies to maximize operating income include: • focusing on associate engagement and resident satisfaction; • employing an innovative and continually evolving operating model that combines effective onsite associates with the capabilities of our centralized sha

acquired or developed communities. • Same Store NOI attributable to our apartment rental operations, including parking and other ancillary residential ("Residential") revenue, for the three months ended March 31, 2026 was $479,937,000, an increase of $1,087,000, or 0.2%, over the prior year period. The increase was primarily attributable to an increase in Residential revenue of $11,053,000, or 1.6%, partially offset by an increase in Residential property operating expenses of $9,966,000, or 4.7%. • Other S

NOI from communities over the prior year. Same Store NOI attributable to our apartment rental operations, including parking and other ancillary residential ("Residential") revenue, for the year ended December 31, 2025 was $1,860,407,000, an increase of $34,598,000, or 1.9%, over the prior year. The increase was due to an increase in Residential revenue of $66,107,000, or 2.5%, partially offset by an increase in Residential property operating expenses of $31,509,000, or 3.8%, over 2024. During 2025, excluding the

NOI from communities over the prior year. Same Store NOI attributable to our apartment rental operations, including parking and other ancillary residential ("Residential") revenue, for the year ended December 31, 2025 was $1,860,407,000, an increase of $34,598,000, or 1.9%, over the prior year. The increase was due to an increase in Residential revenue of $66,107,000, or 2.5%, partially offset by an increase in Residential property operating expenses of $31,509,000, or 3.8%, over 2024. During 2025, excluding the

and related margins, liquidity and access to capital markets. The form, timing and/or amount of dividend distributions in future periods may vary and be impacted by our revenue generation, other liquidity needs and economic and other considerations. The form, timing and/or amount of dividend distributions will be declared at the discretion of the Board of Directors and will depend on our rental revenue, actual cash from operations, our financial condition, capital requirements, the annual distribution requirem

acquired or developed communities. • Same Store NOI attributable to our apartment rental operations, including parking and other ancillary residential ("Residential") revenue, for the three months ended March 31, 2026 was $479,937,000, an increase of $1,087,000, or 0.2%, over the prior year period. The increase was primarily attributable to an increase in Residential revenue of $11,053,000, or 1.6%, partially offset by an increase in Residential property operating expenses of $9,966,000, or 4.7%. • Other S

conditions. Operating & Property Management Strategy. We seek to increase operating income through innovative, proactive property management that will result in higher revenue from communities while constraining operating expenses. Our principal strategies to maximize operating income include: • focusing on associate engagement and resident satisfaction; • employing an innovative and continually evolving operating model that combines effective onsite associates with the capabilities of our centralized sha

The national and global impacts of a health crisis, including a pandemic, epidemic or other public health emergency, may present material uncertainty and risk with respect to our financial condition, results of operations and cash flows

• an outbreak of disease or other public health event may affect the multifamily industry and general economy

• an outbreak of disease or other public health event may affect the multifamily industry and general economy

The national and global impacts of a health crisis, including a pandemic, epidemic or other public health emergency, may present material uncertainty and risk with respect to our financial condition, results of operations and cash flows

• an outbreak of disease or other public health event may affect the multifamily industry and general economy

• an outbreak of disease or other public health event may affect the multifamily industry and general economy

• we may incur costs that exceed our original estimates due to increased material, labor or other costs or supply chain disruptions, including as a result of tariffs or changes in immigration laws or their enforcement, which could impact our overall return from our development, redevelopment or construction activity

• inflation, tariffs and other economic conditions, and their potential impacts

• inflation, tariffs and other economic conditions, and their potential impacts

• we may incur costs that exceed our original estimates due to increased material, labor or other costs or supply chain disruptions, including as a result of tariffs or changes in immigration laws or their enforcement, which could impact our overall return from our development, redevelopment or construction activity

• inflation, tariffs and other economic conditions, and their potential impacts

• inflation, tariffs and other economic conditions, and their potential impacts

• we may incur costs that exceed our original estimates due to increased material, labor or other costs or supply chain disruptions, including as a result of tariffs or changes in immigration laws or their enforcement, which could impact our overall return from our development, redevelopment or construction activity

• we may incur costs that exceed our original estimates due to increased material, labor or other costs or supply chain disruptions, including as a result of tariffs or changes in immigration laws or their enforcement, which could impact our overall return from our development, redevelopment or construction activity

• the impact of landlord-tenant laws and rent regulations

manner so as to qualify as a REIT unless, because of circumstances or changes to the Internal Revenue Code of 1986, as amended (the "Code") (or the Treasury Regulations thereunder), our Board of Directors determines that it is no longer in our best interest to qualify as a REIT

• the impact of landlord-tenant laws and rent regulations, including rent caps

from time to time at the Company’s discretion. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The 2026 Stock Repurchase Program has no expiration date and may be suspended or terminated at any time without prior notice. (3) Represents remaining repurchase authority as of the indicated month end under the 2025 Stock Repurchase Program an

See "Risks related to our REIT or tax status or reliance on various tax regulations" section for more information on federal tax law risks

from time to time at the Company’s discretion. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions and other corporate liquidity requirements and priorities. The 2026 Stock Repurchase Program has no expiration date and may be suspended or terminated at any time without prior notice. (3) Represents remaining repurchase authority as of the indicated month end under the 2025 Stock Repurchase Program an

manner so as to qualify as a REIT unless, because of circumstances or changes to the Internal Revenue Code of 1986, as amended (the "Code") (or the Treasury Regulations thereunder), our Board of Directors determines that it is no longer in our best interest to qualify as a REIT

See "Risks related to our REIT or tax status or reliance on various tax regulations" section for more information on federal tax law risks

• the impact of landlord-tenant laws and rent regulations, including rent caps

• the impact of landlord-tenant laws and rent regulations

development, redevelopment, investment and operating activities with the purpose of "Creating a Better Way to Live." 1 Table of Contents We seek to be the leading rental housing company in select U.S. markets by delivering distinctive experiences that customers value, creating a workplace where associates thrive, and achieving superior results for shareholders. We focus on markets that we believe are generally characterized by growing employment in high wage sectors of the economy, higher cost of home ownership

private or public debt offerings, equity issuances, including through the settlement of the outstanding equity forwards, additional debt financing that is secured by mortgages on individual communities or groups of communities or borrowings under our Credit Facility, Term Loan or Commercial Paper Program. In addition, to the extent we have amounts outstanding under the Commercial Paper Program, we are obligated to repay the short-term indebtedness at maturity through either current cash on hand or by incurr

private or public debt offerings, equity issuances, including through the settlement of the outstanding equity forwards, additional debt financing that is secured by mortgages on individual communities or groups of communities or borrowings under our Credit Facility or Commercial Paper Program. In addition, to the extent we have amounts outstanding under the Commercial Paper Program, we are obligated to repay the short-term indebtedness at maturity through either current cash on hand or by incurring other i

and • we may incur liability if our communities are not constructed in compliance with the accessibility provisions of the Americans with Disabilities Act, the Fair Housing Act or other federal, state or local requirements. Noncompliance could result in imposition of fines, an award of damages to private litigants and a requirement that we undertake structural modifications to remedy the noncompliance. Refer to our "Risks related to liquidity and financing" section below for additional construction and dev

private or public debt offerings, equity issuances, including through the settlement of the outstanding equity forwards, additional debt financing that is secured by mortgages on individual communities or groups of communities or borrowings under our Credit Facility, Term Loan or Commercial Paper Program. In addition, to the extent we have amounts outstanding under the Commercial Paper Program, we are obligated to repay the short-term indebtedness at maturity through either current cash on hand or by incurr

and • we may incur liability if our communities are not constructed in compliance with the accessibility provisions of the Americans with Disabilities Act, the Fair Housing Act or other federal, state or local requirements. Noncompliance could result in imposition of fines, an award of damages to private litigants and a requirement that we undertake structural modifications to remedy the noncompliance. Refer to our "Risks related to liquidity and financing" section below for additional construction and dev

development, redevelopment, investment and operating activities with the purpose of "Creating a Better Way to Live." 1 Table of Contents We seek to be the leading rental housing company in select U.S. markets by delivering distinctive experiences that customers value, creating a workplace where associates thrive, and achieving superior results for shareholders. We focus on markets that we believe are generally characterized by growing employment in high wage sectors of the economy, higher cost of home ownership

private or public debt offerings, equity issuances, including through the settlement of the outstanding equity forwards, additional debt financing that is secured by mortgages on individual communities or groups of communities or borrowings under our Credit Facility or Commercial Paper Program. In addition, to the extent we have amounts outstanding under the Commercial Paper Program, we are obligated to repay the short-term indebtedness at maturity through either current cash on hand or by incurring other i

in our management of joint ventures and the REIT vehicles that are used with certain joint ventures; • we may experience a casualty loss, natural disaster or severe weather event, including those caused by climate change; • new or existing laws and regulations implementing rent control or rent stabilization, or otherwise limiting our ability to increase rents, charge non-rent fees or evict tenants, may impact our revenue or increase our costs; • our expectations, estimates and assumptions as of the dat

are located in the general vicinity of active earthquake faults. Insurance coverage for earthquakes can be costly and in limited supply. • Climate, severe or inclement weather or natural disaster risk. Many of our markets, particularly those located in coastal cities, are exposed to risks associated with inclement or severe weather including those arising from climate change, such as hurricanes, severe winter storms and coastal flooding. Many of our properties are also located in areas, such as Southern Calif

in our management of joint ventures and the REIT vehicles that are used with certain joint ventures; • we may experience a casualty loss, natural disaster or severe weather event, including those caused by climate change; • new or existing laws and regulations implementing rent control or rent stabilization, or otherwise limiting our ability to increase rents, charge non-rent fees or evict tenants, may impact our revenue or increase our costs; • our expectations, estimates and assumptions as of the dat

In California, the Governor and local governments have the ability to enact (and have in recent years exercised such right, for example, in connection with wildfires) local or statewide states of emergency which limit our ability to increase new and renewal rents to no more than 10% over the rent in place on the date such state of emergency was declared, which has impacted some of our California communities. We have seen an increase in state and local governments in our markets implementing, consi

are located in the general vicinity of active earthquake faults. Insurance coverage for earthquakes can be costly and in limited supply. • Climate, severe or inclement weather or natural disaster risk. Many of our markets, particularly those located in coastal cities, are exposed to risks associated with inclement or severe weather including those arising from climate change, such as hurricanes, severe winter storms and coastal flooding. Many of our properties are also located in areas, such as Southern Calif

in our management of joint ventures and the REIT vehicles that are used with certain joint ventures; • we may experience a casualty loss, natural disaster or severe weather event, including those caused by climate change; • new or existing laws and regulations implementing rent control or rent stabilization, or otherwise limiting our ability to increase rents, charge non-rent fees or evict tenants, may impact our revenue or increase our costs; • our expectations, estimates and assumptions as of the dat

In California, the Governor and local governments have the ability to enact (and have in recent years exercised such right, for example, in connection with wildfires) local or statewide states of emergency which limit our ability to increase new and renewal rents to no more than 10% over the rent in place on the date such state of emergency was declared, which has impacted some of our California communities. We have seen an increase in state and local governments in our markets implementing, consi

in our management of joint ventures and the REIT vehicles that are used with certain joint ventures; • we may experience a casualty loss, natural disaster or severe weather event, including those caused by climate change; • new or existing laws and regulations implementing rent control or rent stabilization, or otherwise limiting our ability to increase rents, charge non-rent fees or evict tenants, may impact our revenue or increase our costs; • our expectations, estimates and assumptions as of the dat

associates that are supported by our centralized shared services operating organization and flexible technology platform that incorporates automation and artificial intelligence ("AI")

Certain AI or machine learning tools used in our operations, or used by third parties with whom we do business, may generate outputs that are incomplete, inaccurate, misleading or otherwise flawed, and such issues may be difficult to identify or detect

already begun to explore for a number of reasons, including changes in local market conditions or increases in construction or financing costs or we may impair land held for development, and as a result, we may fail to recover expenses already incurred in exploring those opportunities

associates that are supported by our centralized shared services operating organization and flexible technology platform that incorporates automation and artificial intelligence ("AI")

where associates thrive, and achieving superior results for shareholders. We focus on markets that we believe are generally characterized by growing employment in high wage sectors of the economy, higher cost of home ownership, and a diverse and vibrant quality of life. From an operating perspective, we seek to deliver seamless, personalized experiences for our residents on an efficient and effective basis by our resident-focused on-site associates that are supported by our centralized shared services operati

• an oversupply of, or a reduced demand for, apartment or other rental homes; • a decline in household formation or employment or lack of employment growth or slower wage growth; • the inability or unwillingness of residents to pay rent increases, including as a result of inflation, higher interest rates or broader cost-of-living pressures; and • economic conditions that could cause an increase in our operating expenses, such as increases in property taxes, utilities, compensation of on-site associates

• an oversupply of, or a reduced demand for, apartment or other rental homes; • a decline in household formation or employment or lack of employment growth or slower wage growth; • the inability or unwillingness of residents to pay rent increases, including as a result of inflation, higher interest rates or broader cost-of-living pressures; and • economic conditions that could cause an increase in our operating expenses, such as increases in property taxes, utilities, compensation of on-site associates

where associates thrive, and achieving superior results for shareholders. We focus on markets that we believe are generally characterized by growing employment in high wage sectors of the economy, higher cost of home ownership, and a diverse and vibrant quality of life. From an operating perspective, we seek to deliver seamless, personalized experiences for our residents on an efficient and effective basis by our resident-focused on-site associates that are supported by our centralized shared services operati

to promote our business interests; • hedge ineffectiveness or gains or losses from derivatives not designated as hedges for accounting purposes; • changes to expected credit losses associated with the lending commitments under the SIP; • severance related costs; • executive transition compensation costs; • net for-sale condominium activity, including gains, marketing, operating and administrative costs and imputed carry cost; and • income taxes. FFO and Core FFO do not represent (i) net income in acc

to promote our business interests; • hedge ineffectiveness or gains or losses from derivatives not designated as hedges for accounting purposes; • changes to expected credit losses associated with the lending commitments under the SIP; • severance related costs; • executive transition compensation costs; • net for-sale condominium activity, including gains, marketing, operating and administrative costs and imputed carry cost; and • income taxes. FFO and Core FFO do not represent (i) net income in acc

or other remedies even if we make substantial improvements or repairs to maximize such properties' investment potential. We cannot be certain that our estimate of future credit losses will be adequate over time because of unanticipated adverse changes in the economy or events adversely affecting specific properties, assets, tenants, borrowers, industries in which our tenants and borrowers operate or markets in which our tenants and borrowers or their properties are located. The ultimate 9 Table of Contents reso

administrative support services for a third party leveraging the economies of scale at our center to produce an additional revenue stream. Tax Matters We filed an election with our 1994 federal income tax return to be taxed as a REIT under the Code and intend to maintain our qualification as a REIT in the future. As a REIT, with limited exceptions, such as those described under "Operating & Property Management Strategy" above, we will not be taxed under federal and certain state income tax laws at the co

federal corporate income tax on our taxable income. In addition, unless we are entitled to relief under applicable statutory provisions, we would be ineligible to make an election for treatment as a REIT for the four taxable years following the year we lose our qualification. The additional tax liability resulting from the failure to qualify as a REIT would significantly reduce or eliminate the amount of funds available for distribution to our stockholders. Furthermore, we would no longer be required to make dis

Furthermore, future regulatory developments, including data privacy laws, AI governance requirements, cybersecurity standards, or consumer protection protocols could impose restrictions on the use of these technologies or require us to implement costly compliance measures

Officer Stock Ownership Guidelines, Policy on Political Contributions and Government Relations, Compensation Recovery Policy, Insider Trading Policy, AvalonBay Sanctions Compliance and Anti-Corruption Policy and Corporate Responsibility Reports, are available free of charge in that section of our website or by writing to AvalonBay Communities, Inc

and activities of perpetrators of cyber-attacks, including as a result of the intensification of state-sponsored cybersecurity attacks during periods of geopolitical conflict

Officer Stock Ownership Guidelines, Policy on Political Contributions and Government Relations, Compensation Recovery Policy, Insider Trading Policy, AvalonBay Sanctions Compliance and Anti-Corruption Policy and Corporate Responsibility Reports, are available free of charge in that section of our website or by writing to AvalonBay Communities, Inc

and activities of perpetrators of cyber-attacks, including as a result of the intensification of state-sponsored cybersecurity attacks during periods of geopolitical conflict