Maryland | 77-0404318 | ||
(State or other jurisdiction of | (I.R.S. Employer | ||
incorporation or organization) | Identification No.) |
99.1 | Press Release of AvalonBay Communities, Inc. dated July 27, 2015, including Attachments. |
99.2 | Supplemental discussion of second quarter 2015 operating results (the “Full Release”) dated July 27, 2015, including Attachments. |
AVALONBAY COMMUNITIES, INC. | |||
Dated: July 27, 2015 | By: | /s/ Kevin P. O’Shea | |
Kevin P. O’Shea | |||
Chief Financial Officer |
99.1 | Press Release of AvalonBay Communities, Inc. dated July 27, 2015, including Attachments. | |
99.2 | Supplemental discussion of second quarter 2015 operating results (the “Full Release”) dated July 27, 2015, including Attachments. |
Second Quarter 2015 Results | ||||||
Comparison to April 2015 Outlook | ||||||
Per Share | ||||||
FFO | Core FFO | |||||
Projected per share - April 2015 outlook (1) | $ | 1.94 | $ | 1.82 | ||
NOI from communities | 0.03 | 0.03 | ||||
Joint venture income | 0.02 | 0.02 | ||||
Casualty gain, net (2) | 0.13 | — | ||||
Gain on sale of real estate | 0.07 | — | ||||
Overhead, interest and other | (0.01 | ) | — | |||
Q2 2015 per share reported results | $ | 2.18 | $ | 1.87 | ||
(1) The mid-point of the Company's April 2015 outlook. | ||||||
(2) Net insurance recoveries for the Edgewater fire, discussed in this release. | ||||||
Q2 2015 Compared to Q2 2014 | |||||||||||||||
Rental Revenue | |||||||||||||||
Avg Rent | Ec | % of | |||||||||||||
Rates | Occ | Opex | NOI | NOI (1) | |||||||||||
New England | 3.4 | % | 0.8 | % | 6.8 | % | 2.3 | % | 14.3 | % | |||||
Metro NY/NJ | 3.8 | % | (0.7 | )% | 2.8 | % | 2.9 | % | 25.4 | % | |||||
Mid-Atlantic | 0.4 | % | 0.4 | % | 4.6 | % | (0.9 | )% | 15.4 | % | |||||
Pacific NW | 7.4 | % | (0.4 | )% | 4.6 | % | 7.9 | % | 5.1 | % | |||||
No. California | 10.0 | % | (0.9 | )% | 0.8 | % | 11.7 | % | 21.1 | % | |||||
So. California | 6.2 | % | (0.3 | )% | 4.3 | % | 6.7 | % | 18.7 | % | |||||
Total | 5.0 | % | (0.3 | )% | 3.9 | % | 5.0 | % | 100.0 | % | |||||
(1) Represents each region's % of total NOI for Q2 2015, including amounts related to communities that have been sold or that are classified as held for sale. | |||||||||||||||
YTD 2015 Compared to YTD 2014 | |||||||||||||||
Rental Revenue | |||||||||||||||
Avg Rent | Ec | % of | |||||||||||||
Rates | Occ | Opex | NOI | NOI (1) | |||||||||||
New England | 3.1 | % | 0.6 | % | 10.8 | % | (0.7 | )% | 13.5 | % | |||||
Metro NY/NJ | 3.5 | % | (0.6 | )% | 3.0 | % | 2.9 | % | 25.3 | % | |||||
Mid-Atlantic | 0.2 | % | 0.3 | % | 3.7 | % | (0.8 | )% | 15.8 | % | |||||
Pacific NW | 6.8 | % | 0.2 | % | 3.4 | % | 8.4 | % | 5.2 | % | |||||
No. California | 9.6 | % | (0.7 | )% | 0.7 | % | 11.6 | % | 21.0 | % | |||||
So. California | 5.9 | % | 0.2 | % | (1.4 | )% | 9.8 | % | 19.2 | % | |||||
Total | 4.6 | % | (0.1 | )% | 3.2 | % | 5.1 | % | 100.0 | % | |||||
(1) Represents each region's % of total NOI for YTD 2015, including amounts related to communities that have been sold or that are classified as held for sale. | |||||||||||||||
• | Avalon Assembly Row/AVA Somerville, located in Somerville, MA; |
• | Avalon Wharton, located in Wharton, NJ; and |
• | Avalon Hayes Valley, located in San Francisco, CA. |
• | Avalon Laurel, located in Laurel, MD; |
• | Avalon Quincy, located in Quincy, MA; |
• | Avalon Great Neck, located in Great Neck, NY; and |
• | AVA NoMa, located in Washington D.C. |
• | The Company issued $525,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of approximately $520,653,000. The notes mature in June 2025 and were issued at a 3.45% coupon interest rate. |
• | The Company settled 609,275 shares of common stock at a settlement price of $147.72 per share, for net proceeds of $90,000,000, pursuant to the forward equity sale contract entered into in September 2014 to sell 4,500,000 shares of common stock, as described in the Company's third quarter 2014 earnings release dated October 27, 2014. |
• | The Company received distributions of $9,970,000 from its investments in unconsolidated real estate entities. |
• | eight fixed rate mortgage loans secured by eight wholly-owned operating communities, which had an aggregate principal balance of $481,582,000, and contractual maturity date of November 2015, at par; |
• | the fixed rate mortgage loan secured by Avalon at Edgewater, which had a principal balance of $74,531,000 and contractual maturity of May 2019, at par; and |
• | two fixed rate mortgage loans secured by two wholly-owned operating communities, which had principal balances of $15,778,000 and $7,805,000, and contractual maturities of February 2041 and May 2027, incurring a prepayment penalty of $158,000. |
July 2015 Full Year Outlook | ||||||
Comparison to January 2015 Outlook | ||||||
Per Share | ||||||
FFO | Core FFO | |||||
Projected per share - January 2015 outlook (1) | $ | 7.40 | $ | 7.35 | ||
Established Community NOI | 0.08 | 0.08 | ||||
Other Stabilized and Redevelopment NOI | 0.02 | 0.02 | ||||
Development NOI | (0.02 | ) | (0.02 | ) | ||
Joint venture income and management fees | (0.01 | ) | 0.02 | |||
Subtotal, community NOI and joint venture income | 0.07 | 0.10 | ||||
Capital markets and transaction activity | 0.26 | 0.06 | ||||
Interest expense, including capitalized interest | 0.05 | 0.05 | ||||
Overhead and other | (0.03 | ) | (0.03 | ) | ||
Casualty gain, net | 0.16 | — | ||||
Gain on sale of real estate assets | 0.07 | — | ||||
Projected per share - July 2015 outlook (1) | $ | 7.98 | $ | 7.53 | ||
(1) The mid-point of the Company's outlook. | ||||||
Q2 | Q2 | YTD | YTD | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
FFO, actual | $ | 290,471 | $ | 222,486 | $ | 541,051 | $ | 435,330 | ||||||||
Adjusting Items | ||||||||||||||||
Joint venture gains and costs (1) | (9,571 | ) | (3,951 | ) | (11,572 | ) | (6,057 | ) | ||||||||
Casualty and impairment gain, net (2) | (17,114 | ) | — | (15,521 | ) | — | ||||||||||
Lost NOI from Edgewater fire | 1,687 | — | 3,334 | — | ||||||||||||
Early extinguishment of debt | (7,749 | ) | 412 | (7,749 | ) | 412 | ||||||||||
Gain on sale of real estate | (9,625 | ) | — | (9,647 | ) | — | ||||||||||
Joint venture promote | — | — | (20,680 | ) | — | |||||||||||
Income taxes | 997 | — | 997 | — | ||||||||||||
Abandoned pursuits (3) | 353 | 2,564 | 462 | 2,564 | ||||||||||||
Acquisition costs | 62 | 17 | 940 | 30 | ||||||||||||
Severance related costs | 16 | 300 | 1,664 | 300 | ||||||||||||
Business interruption insurance proceeds | (66 | ) | (587 | ) | (154 | ) | (587 | ) | ||||||||
Core FFO | $ | 249,461 | $ | 221,241 | $ | 483,125 | $ | 431,992 | ||||||||
Core FFO per share | $ | 1.87 | $ | 1.70 | $ | 3.63 | $ | 3.32 | ||||||||
Average shares outstanding - diluted | 133,086,439 | 130,248,321 | 133,131,363 | 129,938,232 | ||||||||||||
(1) Composed primarily of the Company's proportionate share of gains and operating results for joint ventures formed with Equity Residential as part of the Archstone acquisition. | ||||||||||||||||
(2) Composed primarily of insurance proceeds, partially offset by costs from the fire at Edgewater. | ||||||||||||||||
(3) Q2 and YTD 2014 amounts are composed of write-offs expensed by the Company during the quarter and year to date periods for development rights and a retail tenant. | ||||||||||||||||
Q2 | Q2 | YTD | YTD | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net income attributable to common stockholders | $ | 172,324 | $ | 158,086 | $ | 380,469 | $ | 299,825 | ||||||||
Depreciation - real estate assets, including discontinued | ||||||||||||||||
operations and joint venture adjustments | 119,856 | 111,653 | 238,177 | 220,619 | ||||||||||||
Distributions to noncontrolling interests, including | ||||||||||||||||
discontinued operations | 9 | 9 | 19 | 17 | ||||||||||||
Gain on sale of unconsolidated entities holding previously | ||||||||||||||||
depreciated real estate assets | (1,718 | ) | (449 | ) | (10,873 | ) | (449 | ) | ||||||||
Gain on sale of previously depreciated real estate assets (1) | — | (46,813 | ) | (70,936 | ) | (84,682 | ) | |||||||||
Impairment due to casualty loss | — | — | 4,195 | — | ||||||||||||
FFO attributable to common stockholders | $ | 290,471 | $ | 222,486 | $ | 541,051 | $ | 435,330 | ||||||||
Average shares outstanding - diluted | 133,086,439 | 130,248,321 | 133,131,363 | 129,938,232 | ||||||||||||
Earnings per share - diluted | $ | 1.29 | $ | 1.21 | $ | 2.86 | $ | 2.31 | ||||||||
FFO per common share - diluted | $ | 2.18 | $ | 1.71 | $ | 4.06 | $ | 3.35 | ||||||||
(1) Q2 and YTD 2014 include the impact of the noncontrolling portion of the gain on sale of community owned by Fund I that was consolidated for financial reporting purposes. | ||||||||||||||||
Net income attributable to common stockholders | $ | 172,324 | |
Interest expense, net | 44,590 | ||
Income tax expense | 1,293 | ||
Depreciation expense | 118,627 | ||
EBITDA | $ | 336,834 | |
NOI from discontinued operations and real estate assets sold or held for sale, not classified as discontinued operations | (1,353 | ) | |
Gain on sale of communities | — | ||
EBITDA after disposition activity | $ | 335,481 | |
Joint venture income | (13,806 | ) | |
Casualty and impairment gain, net | (17,114 | ) | |
Lost NOI from Edgewater fire | 1,687 | ||
Gain on extinguishment of debt, net | (7,749 | ) | |
Gain on sale of real estate | (9,625 | ) | |
Other non-core adjustments | 365 | ||
Core EBITDA | $ | 289,239 | |
Interest expense, net | $ | 44,590 | |
Interest Coverage | 6.5 times | ||
Total debt principal (1) | $ | 6,433,889 | |
Cash and cash in escrow | (168,805 | ) | |
Net debt | $ | 6,265,084 | |
Core EBITDA | $ | 289,239 | |
Core EBITDA, annualized | $ | 1,156,956 | |
Net Debt-to-Core EBITDA | 5.4 times | ||
(1) Balance at June 30, 2015 excludes $7,169 of debt discount as reflected in unsecured notes, net, and $60,410 of debt premium as reflected in notes payable, on the Condensed Consolidated Balance Sheets. The debt premium is primarily related to above market interest rates on debt assumed in connection with the Archstone acquisition. | |||
Q2 | Q2 | Q1 | Q4 | YTD | YTD | |||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Net income | $ | 172,253 | $ | 172,197 | $ | 208,053 | $ | 142,530 | $ | 380,306 | $ | 313,796 | ||||||||||||
Indirect operating expenses, net of corporate income | 14,817 | 12,343 | 15,399 | 12,721 | 30,215 | 23,161 | ||||||||||||||||||
Investments and investment management expense | 1,073 | 1,137 | 1,034 | 1,290 | 2,107 | 2,116 | ||||||||||||||||||
Expensed acquisition, development and other pursuit costs, net of recoveries | 673 | 2,017 | 1,187 | (6,855 | ) | 1,860 | 2,732 | |||||||||||||||||
Interest expense, net | 44,590 | 43,722 | 45,573 | 47,987 | 90,164 | 86,255 | ||||||||||||||||||
(Gain) loss on extinguishment of debt, net | (7,749 | ) | 412 | — | — | (7,749 | ) | 412 | ||||||||||||||||
General and administrative expense | 10,335 | 10,162 | 10,468 | 10,715 | 20,803 | 19,386 | ||||||||||||||||||
Joint venture income | (13,806 | ) | (7,710 | ) | (34,566 | ) | (5,241 | ) | (48,371 | ) | (12,933 | ) | ||||||||||||
Depreciation expense | 118,627 | 110,395 | 116,853 | 114,084 | 235,480 | 216,762 | ||||||||||||||||||
Income tax expense | 1,293 | 58 | 15 | 9,332 | 1,308 | 70 | ||||||||||||||||||
Casualty and impairment (gain) loss, net | (17,114 | ) | — | 5,788 | — | (11,326 | ) | — | ||||||||||||||||
Gain on sale of real estate assets | (9,625 | ) | (60,945 | ) | (70,958 | ) | (24,470 | ) | (80,583 | ) | (60,945 | ) | ||||||||||||
Gain on sale of discontinued operations | — | — | — | — | — | (37,869 | ) | |||||||||||||||||
Income from discontinued operations | — | — | — | — | — | (310 | ) | |||||||||||||||||
NOI from real estate assets sold or held for sale, not classified as discontinued operations | (1,353 | ) | (6,240 | ) | (1,437 | ) | (3,540 | ) | (2,791 | ) | (12,522 | ) | ||||||||||||
NOI | $ | 314,014 | $ | 277,548 | $ | 297,409 | $ | 298,553 | $ | 611,423 | $ | 540,111 | ||||||||||||
Established: | ||||||||||||||||||||||||
New England | $ | 30,985 | $ | 30,286 | $ | 27,839 | $ | 30,499 | $ | 58,823 | $ | 59,211 | ||||||||||||
Metro NY/NJ | 67,880 | 65,955 | 65,109 | 67,486 | 132,989 | 129,272 | ||||||||||||||||||
Mid-Atlantic | 35,938 | 36,247 | 36,031 | 36,652 | 71,969 | 72,551 | ||||||||||||||||||
Pacific NW | 13,657 | 12,654 | 13,373 | 12,853 | 27,030 | 24,924 | ||||||||||||||||||
No. California | 52,635 | 47,129 | 49,734 | 47,645 | 102,369 | 91,752 | ||||||||||||||||||
So. California | 43,046 | 40,350 | 43,517 | 41,843 | 86,564 | 78,841 | ||||||||||||||||||
Total Established | 244,141 | 232,621 | 235,603 | 236,978 | 479,744 | 456,551 | ||||||||||||||||||
Other Stabilized | 36,536 | 25,600 | 34,818 | 36,734 | 71,353 | 47,070 | ||||||||||||||||||
Development/Redevelopment | 33,337 | 19,327 | 26,988 | 24,841 | 60,326 | 36,490 | ||||||||||||||||||
NOI | $ | 314,014 | $ | 277,548 | $ | 297,409 | $ | 298,553 | $ | 611,423 | $ | 540,111 | ||||||||||||
Q2 | Q2 | YTD | YTD | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Income from discontinued operations | $ | — | $ | — | $ | — | $ | 310 | ||||||||
Depreciation expense | — | — | — | — | ||||||||||||
NOI from discontinued operations | $ | — | $ | — | $ | — | $ | 310 | ||||||||
Revenue from real estate assets sold or held for sale, not classified as discontinued operations | $ | 2,285 | $ | 10,226 | $ | 4,809 | $ | 20,595 | ||||||||
Operating expenses from real estate assets sold or held for sale, not classified as discontinued operations | (932 | ) | (3,986 | ) | (2,018 | ) | (8,073 | ) | ||||||||
NOI from real estate assets sold or held for sale, not classified as discontinued operations | $ | 1,353 | $ | 6,240 | $ | 2,791 | $ | 12,522 | ||||||||
Low Range | High Range | ||||||||
Projected EPS (diluted) - Q3 2015 | $ | 1.54 | $ | 1.58 | |||||
Projected depreciation (real estate related) | 0.89 | 0.93 | |||||||
Projected gain on sale of operating communities | (0.42 | ) | (0.46 | ) | |||||
Projected FFO per share (diluted) - Q3 2015 | 2.01 | 2.05 | |||||||
Early extinguishment of debt | (0.13 | ) | (0.13 | ) | |||||
Edgewater operating and casualty losses | 0.01 | 0.01 | |||||||
Other non-core items | 0.01 | 0.01 | |||||||
Projected Core FFO per share (diluted) - Q3 2015 | $ | 1.90 | $ | 1.94 | |||||
Projected EPS (diluted) - Full Year 2015 | $ | 6.04 | $ | 6.18 | |||||
Projected depreciation (real estate related) | 3.53 | 3.67 | |||||||
Projected gain on sale of operating communities | (1.69 | ) | (1.83 | ) | |||||
Impairment due to casualty loss | 0.03 | 0.03 | |||||||
Projected FFO per share (diluted) - Full Year 2015 | $ | 7.91 | $ | 8.05 | |||||
Non recurring joint venture income and management fees | (0.21 | ) | (0.23 | ) | |||||
Edgewater operating losses and casualty gains | (0.05 | ) | (0.07 | ) | |||||
Income taxes | 0.05 | 0.07 | |||||||
Gain on sale of real estate | (0.07 | ) | (0.07 | ) | |||||
Early extinguishment of debt | (0.17 | ) | (0.17 | ) | |||||
Other non-core items | — | 0.02 | |||||||
Projected Core FFO per share (diluted) - Full Year 2015 | $ | 7.46 | $ | 7.60 | |||||
Q2 | Q2 | YTD | YTD | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Rental revenue (GAAP basis) | $ | 346,559 | $ | 330,861 | $ | 686,255 | $ | 656,412 | ||||||||
Concessions amortized | 268 | 1,452 | 649 | 3,021 | ||||||||||||
Concessions granted | (34 | ) | (993 | ) | (343 | ) | (2,444 | ) | ||||||||
Rental Revenue with Concessions | ||||||||||||||||
on a Cash Basis | $ | 346,793 | $ | 331,320 | $ | 686,561 | $ | 656,989 | ||||||||
% change -- GAAP revenue | 4.7 | % | 4.5 | % | ||||||||||||
% change -- cash revenue | 4.7 | % | 4.5 | % | ||||||||||||
Year To Date | |||
NOI | |||
NOI for Established Communities | $ | 479,744 | |
NOI for Other Stabilized Communities | 71,353 | ||
NOI for Development/Redevelopment Communities | 60,326 | ||
NOI for discontinued operations | — | ||
NOI from real estate assets sold or held for sale, not classified as discontinued operations | 2,791 | ||
Total NOI generated by real estate assets | 614,214 | ||
NOI on encumbered assets | 147,982 | ||
NOI on unencumbered assets | $ | 466,232 | |
Unencumbered NOI | 76 | % | |
Second Quarter 2015 Results | ||||||
Comparison to April 2015 Outlook | ||||||
Per Share | ||||||
FFO | Core FFO | |||||
Projected per share - April 2015 outlook (1) | $ | 1.94 | $ | 1.82 | ||
NOI from communities | 0.03 | 0.03 | ||||
Joint venture income | 0.02 | 0.02 | ||||
Casualty gain, net (2) | 0.13 | — | ||||
Gain on sale of real estate | 0.07 | — | ||||
Overhead, interest and other | (0.01 | ) | — | |||
Q2 2015 per share reported results | $ | 2.18 | $ | 1.87 | ||
(1) The mid-point of the Company's April 2015 outlook. | ||||||
(2) Net insurance recoveries for the Edgewater fire, discussed in this release. | ||||||
Q2 2015 Compared to Q2 2014 | |||||||||||||||
Rental Revenue | |||||||||||||||
Avg Rent | Ec | % of | |||||||||||||
Rates | Occ | Opex | NOI | NOI (1) | |||||||||||
New England | 3.4 | % | 0.8 | % | 6.8 | % | 2.3 | % | 14.3 | % | |||||
Metro NY/NJ | 3.8 | % | (0.7 | )% | 2.8 | % | 2.9 | % | 25.4 | % | |||||
Mid-Atlantic | 0.4 | % | 0.4 | % | 4.6 | % | (0.9 | )% | 15.4 | % | |||||
Pacific NW | 7.4 | % | (0.4 | )% | 4.6 | % | 7.9 | % | 5.1 | % | |||||
No. California | 10.0 | % | (0.9 | )% | 0.8 | % | 11.7 | % | 21.1 | % | |||||
So. California | 6.2 | % | (0.3 | )% | 4.3 | % | 6.7 | % | 18.7 | % | |||||
Total | 5.0 | % | (0.3 | )% | 3.9 | % | 5.0 | % | 100.0 | % | |||||
(1) Represents each region's % of total NOI for Q2 2015, including amounts related to communities that have been sold or that are classified as held for sale. | |||||||||||||||
YTD 2015 Compared to YTD 2014 | |||||||||||||||
Rental Revenue | |||||||||||||||
Avg Rent | Ec | % of | |||||||||||||
Rates | Occ | Opex | NOI | NOI (1) | |||||||||||
New England | 3.1 | % | 0.6 | % | 10.8 | % | (0.7 | )% | 13.5 | % | |||||
Metro NY/NJ | 3.5 | % | (0.6 | )% | 3.0 | % | 2.9 | % | 25.3 | % | |||||
Mid-Atlantic | 0.2 | % | 0.3 | % | 3.7 | % | (0.8 | )% | 15.8 | % | |||||
Pacific NW | 6.8 | % | 0.2 | % | 3.4 | % | 8.4 | % | 5.2 | % | |||||
No. California | 9.6 | % | (0.7 | )% | 0.7 | % | 11.6 | % | 21.0 | % | |||||
So. California | 5.9 | % | 0.2 | % | (1.4 | )% | 9.8 | % | 19.2 | % | |||||
Total | 4.6 | % | (0.1 | )% | 3.2 | % | 5.1 | % | 100.0 | % | |||||
(1) Represents each region's % of total NOI for YTD 2015, including amounts related to communities that have been sold or that are classified as held for sale. | |||||||||||||||
• | Avalon Assembly Row/AVA Somerville, located in Somerville, MA; |
• | Avalon Wharton, located in Wharton, NJ; and |
• | Avalon Hayes Valley, located in San Francisco, CA. |
• | Avalon Laurel, located in Laurel, MD; |
• | Avalon Quincy, located in Quincy, MA; |
• | Avalon Great Neck, located in Great Neck, NY; and |
• | AVA NoMa, located in Washington D.C. |
• | The Company issued $525,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of approximately $520,653,000. The notes mature in June 2025 and were issued at a 3.45% coupon interest rate. |
• | The Company settled 609,275 shares of common stock at a settlement price of $147.72 per share, for net proceeds of $90,000,000, pursuant to the forward equity sale contract entered into in September 2014 to sell 4,500,000 shares of common stock, as described in the Company's third quarter 2014 earnings release dated October 27, 2014. |
• | The Company received distributions of $9,970,000 from its investments in unconsolidated real estate entities. |
• | eight fixed rate mortgage loans secured by eight wholly-owned operating communities, which had an aggregate principal balance of $481,582,000, and contractual maturity date of November 2015, at par; |
• | the fixed rate mortgage loan secured by Avalon at Edgewater, which had a principal balance of $74,531,000 and contractual maturity of May 2019, at par; and |
• | two fixed rate mortgage loans secured by two wholly-owned operating communities, which had principal balances of $15,778,000 and $7,805,000, and contractual maturities of February 2041 and May 2027, incurring a prepayment penalty of $158,000. |
July 2015 Full Year Outlook | ||||||
Comparison to January 2015 Outlook | ||||||
Per Share | ||||||
FFO | Core FFO | |||||
Projected per share - January 2015 outlook (1) | $ | 7.40 | $ | 7.35 | ||
Established Community NOI | 0.08 | 0.08 | ||||
Other Stabilized and Redevelopment NOI | 0.02 | 0.02 | ||||
Development NOI | (0.02 | ) | (0.02 | ) | ||
Joint venture income and management fees | (0.01 | ) | 0.02 | |||
Subtotal, community NOI and joint venture income | 0.07 | 0.10 | ||||
Capital markets and transaction activity | 0.26 | 0.06 | ||||
Interest expense, including capitalized interest | 0.05 | 0.05 | ||||
Overhead and other | (0.03 | ) | (0.03 | ) | ||
Casualty gain, net | 0.16 | — | ||||
Gain on sale of real estate assets | 0.07 | — | ||||
Projected per share - July 2015 outlook (1) | $ | 7.98 | $ | 7.53 | ||
(1) The mid-point of the Company's outlook. | ||||||
Company Profile | ||
Detailed Operating Information...................................................................................................................................... | Attachment 1 | |
Condensed Consolidated Balance Sheets.................................................................................................................... | Attachment 2 | |
Sequential Operating Information by Business Segment.............................................................................................. | Attachment 3 | |
Market Profile - Established Communities | ||
Quarterly Rental Revenue and Occupancy Changes.................................................................................................... | Attachment 4 | |
Sequential Quarterly Rental Revenue and Occupancy Changes.................................................................................. | Attachment 5 | |
Year To Date Rental Revenue and Occupancy Changes.............................................................................................. | Attachment 6 | |
Operating Expenses ("Opex")........................................................................................................................................ | Attachment 7 | |
Development, Joint Venture, Debt Profile and Disposition Activity | ||
Development Communities............................................................................................................................................ | Attachment 8 | |
Future Development...................................................................................................................................................... | Attachment 9 | |
Unconsolidated Real Estate Investments...................................................................................................................... | Attachment 10 | |
Debt Structure and Select Debt Metrics......................................................................................................................... | Attachment 11 | |
Summary of Disposition Activity..................................................................................................................................... | Attachment 12 | |
2015 Financial Outlook | ||
2015 Financial Outlook................................................................................................................................................. | Attachment 13 | |
Definitions and Reconciliations | ||
Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms................................................... | Attachment 14 |
Q2 | Q2 | YTD | YTD | |||||||||||||||||||
2015 | 2014 | % Change | 2015 | 2014 | % Change | |||||||||||||||||
Revenue: | ||||||||||||||||||||||
Rental and other income | $ | 454,517 | $ | 411,134 | 10.6 | % | $ | 894,273 | $ | 808,131 | 10.7 | % | ||||||||||
Management, development and other fees | 2,942 | 2,672 | 10.1 | % | 5,553 | 5,750 | (3.4 | )% | ||||||||||||||
Total | 457,459 | 413,806 | 10.5 | % | 899,826 | 813,881 | 10.6 | % | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Direct property operating expenses, excluding property taxes | 93,214 | 84,875 | 9.8 | % | 186,936 | 168,509 | 10.9 | % | ||||||||||||||
Property taxes | 45,913 | 42,439 | 8.2 | % | 93,089 | 86,924 | 7.1 | % | ||||||||||||||
Property management and other indirect operating expenses | 17,782 | 15,047 | 18.2 | % | 35,802 | 28,976 | 23.6 | % | ||||||||||||||
Total operating expenses | 156,909 | 142,361 | 10.2 | % | 315,827 | 284,409 | 11.0 | % | ||||||||||||||
Interest expense, net | (44,590 | ) | (43,722 | ) | 2.0 | % | (90,164 | ) | (86,255 | ) | 4.5 | % | ||||||||||
Gain (loss) on extinguishment of debt, net | 7,749 | (412 | ) | N/A | 7,749 | (412 | ) | N/A | ||||||||||||||
General and administrative expense | (10,335 | ) | (10,162 | ) | 1.7 | % | (20,803 | ) | (19,386 | ) | 7.3 | % | ||||||||||
Joint venture income (1) | 13,806 | 7,710 | 79.1 | % | 48,371 | 12,933 | 274.0 | % | ||||||||||||||
Investments and investment management | (1,073 | ) | (1,137 | ) | (5.6 | )% | (2,107 | ) | (2,116 | ) | (0.4 | )% | ||||||||||
Expensed acquisition, development and other pursuit costs, net of recoveries | (673 | ) | (2,017 | ) | (66.6 | )% | (1,860 | ) | (2,732 | ) | (31.9 | )% | ||||||||||
Depreciation expense | (118,627 | ) | (110,395 | ) | 7.5 | % | (235,480 | ) | (216,762 | ) | 8.6 | % | ||||||||||
Income tax expense | (1,293 | ) | (58 | ) | N/A | (1,308 | ) | (70 | ) | N/A | ||||||||||||
Casualty and impairment gain, net (2) | 17,114 | — | 100.0 | % | 11,326 | — | 100.0 | % | ||||||||||||||
Gain on sale of real estate (3) | 9,625 | — | 100.0 | % | 9,647 | — | 100.0 | % | ||||||||||||||
Gain on sale of communities (4) | — | 60,945 | (100.0 | )% | 70,936 | 60,945 | 16.4 | % | ||||||||||||||
Income from continuing operations | 172,253 | 172,197 | — | % | 380,306 | 275,617 | 38.0 | % | ||||||||||||||
Discontinued operations: | ||||||||||||||||||||||
Income from discontinued operations | — | — | — | % | — | 310 | (100.0 | )% | ||||||||||||||
Gain on sale of discontinued operations | — | — | — | % | — | 37,869 | (100.0 | )% | ||||||||||||||
Total discontinued operations | — | — | — | % | — | 38,179 | (100.0 | )% | ||||||||||||||
Net income | 172,253 | 172,197 | — | % | 380,306 | 313,796 | 21.2 | % | ||||||||||||||
Net loss (income) attributable to noncontrolling interests | 71 | (14,111 | ) | N/A | 163 | (13,971 | ) | N/A | ||||||||||||||
Net income attributable to common stockholders | $ | 172,324 | $ | 158,086 | 9.0 | % | $ | 380,469 | $ | 299,825 | 26.9 | % | ||||||||||
Net income attributable to common stockholders per common share - basic | $ | 1.30 | $ | 1.22 | 6.6 | % | $ | 2.88 | $ | 2.31 | 24.7 | % | ||||||||||
Net income attributable to common stockholders per common share - diluted | $ | 1.29 | $ | 1.21 | 6.6 | % | $ | 2.86 | $ | 2.31 | 23.8 | % | ||||||||||
Funds from Operations | $ | 290,471 | $ | 222,486 | 30.6 | % | $ | 541,051 | $ | 435,330 | 24.3 | % | ||||||||||
Per common share - diluted | $ | 2.18 | $ | 1.71 | 27.5 | % | $ | 4.06 | $ | 3.35 | 21.2 | % | ||||||||||
Dividends declared - common | $ | 166,109 | $ | 152,107 | 9.2 | % | $ | 331,346 | $ | 302,412 | 9.6 | % | ||||||||||
Per common share | $ | 1.25 | $ | 1.16 | 7.8 | % | $ | 2.50 | $ | 2.32 | 7.8 | % | ||||||||||
Average shares and participating securities outstanding - basic | 132,319,255 | 130,065,698 | 1.7 | % | 132,269,714 | 129,784,847 | 1.9 | % | ||||||||||||||
Average shares outstanding - diluted | 133,086,439 | 130,248,321 | 2.2 | % | 133,131,363 | 129,938,232 | 2.5 | % | ||||||||||||||
Total outstanding common shares and operating partnership units | 132,895,667 | 131,137,295 | 1.3 | % | 132,895,667 | 131,137,295 | 1.3 | % |
(1) | Amounts for the three and six months ended June 30, 2015 include $12,232 and $23,807, respectively, in disposition gains, legal settlements and distributions associated with the wind down of joint ventures. In addition, the amount for the six months ended June 30, 2015 includes income of $20,680 from a joint venture partner’s buyout of the Company’s promoted interest in future distributions of MVP I, LLC. |
(2) | Casualty and impairment gain, net for the three and six months ended June 30, 2015 includes $22,000 and $44,000, respectively, of Edgewater insurance proceeds received, partially offset by $4,886 and $27,679, respectively, for the write-off of real estate and related costs. The gain for the six months ended June 30, 2015 also includes casualty losses of $4,195 related to severe winter storms in the Company's Northeast markets. |
(3) | Includes gain on the sale of air rights and two undeveloped land parcels. |
(4) | Gain on sale of communities for the three and six months ended June 30, 2014 includes $16,656 related to the sale of a community owned by Fund I that was consolidated for financial reporting purposes. The Company's joint venture partners' 85% interest in this gain of $14,132 is reported as a component of net loss (income) attributable to noncontrolling interests. |
June 30, | December 31, | |||||||
2015 | 2014 | |||||||
Real estate | $ | 16,587,715 | $ | 16,093,718 | ||||
Less accumulated depreciation | (3,092,205 | ) | (2,874,578 | ) | ||||
Net operating real estate | 13,495,510 | 13,219,140 | ||||||
Construction in progress, including land | 1,536,368 | 1,417,246 | ||||||
Land held for development | 487,205 | 180,516 | ||||||
Operating real estate assets held for sale, net | 61,939 | 118,838 | ||||||
Total real estate, net | 15,581,022 | 14,935,740 | ||||||
Cash and cash equivalents | 65,126 | 509,460 | ||||||
Cash in escrow | 103,679 | 95,625 | ||||||
Resident security deposits | 31,290 | 29,617 | ||||||
Investments in unconsolidated real estate entities | 264,616 | 298,315 | ||||||
Other assets | 274,743 | 307,966 | ||||||
Total assets | $ | 16,320,476 | $ | 16,176,723 | ||||
Unsecured notes, net | $ | 3,567,831 | $ | 2,993,265 | ||||
Unsecured credit facility | — | — | ||||||
Notes payable | 2,919,299 | 3,532,587 | ||||||
Resident security deposits | 53,403 | 49,189 | ||||||
Liabilities related to assets held for sale | 657 | 1,492 | ||||||
Other liabilities | 558,213 | 541,020 | ||||||
Total liabilities | $ | 7,099,403 | $ | 7,117,553 | ||||
Redeemable noncontrolling interests | 10,588 | 12,765 | ||||||
Equity | 9,210,485 | 9,046,405 | ||||||
Total liabilities and equity | $ | 16,320,476 | $ | 16,176,723 |
Total | Quarter Ended | Quarter Ended | Quarter Ended | ||||||||||||
Apartment | June | March | December | ||||||||||||
Homes | 30, 2015 | 31, 2015 | 31, 2014 | ||||||||||||
RENTAL REVENUE (2) | |||||||||||||||
Established (3) | 51,794 | $ | 346,559 | $ | 339,697 | $ | 338,137 | ||||||||
Other Stabilized (3) (4) | 8,999 | 54,197 | 53,690 | 53,282 | |||||||||||
Redevelopment (3) | 3,998 | 27,314 | 26,635 | 26,530 | |||||||||||
Development (3) | 11,022 | 23,157 | 16,213 | 11,634 | |||||||||||
Total Consolidated Communities | 75,813 | $ | 451,227 | $ | 436,235 | $ | 429,583 | ||||||||
OPERATING EXPENSE | |||||||||||||||
Established | $ | 102,854 | $ | 104,521 | $ | 101,985 | |||||||||
Other Stabilized (4) | 18,149 | 19,266 | 17,719 | ||||||||||||
Redevelopment | 8,626 | 9,202 | 8,616 | ||||||||||||
Development | 8,593 | 6,836 | 5,219 | ||||||||||||
Total Consolidated Communities | $ | 138,222 | $ | 139,825 | $ | 133,539 | |||||||||
NOI (3) | |||||||||||||||
Established | $ | 244,141 | $ | 235,603 | $ | 236,978 | |||||||||
Other Stabilized (4) | 36,536 | 34,818 | 36,734 | ||||||||||||
Redevelopment | 18,692 | 17,438 | 18,356 | ||||||||||||
Development | 14,645 | 9,550 | 6,485 | ||||||||||||
Total Consolidated Communities | $ | 314,014 | $ | 297,409 | $ | 298,553 | |||||||||
AVERAGE REVENUE PER OCCUPIED HOME (5) | |||||||||||||||
Established | $ | 2,332 | $ | 2,278 | $ | 2,268 | |||||||||
Other Stabilized (4) | $ | 2,091 | $ | 2,046 | $ | 2,035 | |||||||||
Redevelopment | $ | 2,415 | $ | 2,352 | $ | 2,327 | |||||||||
ECONOMIC OCCUPANCY (5) | |||||||||||||||
Established | 95.6 | % | 96.0 | % | 95.9 | % | |||||||||
Other Stabilized (4) | 95.3 | % | 96.0 | % | 93.7 | % | |||||||||
Redevelopment | 94.3 | % | 94.4 | % | 95.1 | % | |||||||||
ESTABLISHED COMMUNITIES TURNOVER | |||||||||||||||
Current year period / Prior year period (6) | 59.6% / 58.3% | 41.3% / 44.8% | 45.1% / 49.4% | ||||||||||||
Current year period YTD / Prior year period YTD (6) | 50.5% / 51.6% | 53.9% / 56.2% |
(1) | Includes consolidated communities and excludes amounts related to communities that have been sold or that are classified as held for sale. |
(2) | Rental revenue excludes non-qualified REIT income. |
(3) | See Attachment #14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
(4) | Results for these communities for quarters prior to January 1, 2015 may reflect community operations prior to stabilization, including periods of lease-up, such that occupancy levels are below what would be considered stabilized. Q1 2015 average revenue per occupied home is based on the weighted average number of homes available for Edgewater. |
(5) | For per home rent projections and economic occupancy for Development Communities currently under construction and/or completed in Q2 2015 see Attachment #8, Development Communities. |
(6) | Turnover represents the annualized number of units turned over during the quarter, divided by the total number of apartment homes for Established Communities for the respective reporting period. |
(7) | Redevelopment Communities includes seven communities containing 2,787 apartment homes that are currently under active Redevelopment as of June 30, 2015. |
CAPITALIZED COSTS | ||||
Non-Rev | ||||
Cap | Cap | Capex per | ||
Interest | Overhead | Home | ||
Q215 | $19,800 | $11,180 | $110 | |
Q115 | $19,030 | $10,762 | $113 | |
Q414 | $15,667 | $12,045 | $182 | |
Q314 | $15,989 | $8,775 | $185 | |
Q214 | $18,626 | $8,245 | $71 | |
REDEVELOPMENT COMMUNITIES (7) | ||||
Total | Remaining | |||
Capital Cost | to Invest | |||
Q215 | $122,900 | $82,700 |
Apartment Homes | Average Rental Rates (2) | Economic Occupancy | Rental Revenue ($000s) (3) (4) | |||||||||||||||||||||||||||||||
Q2 15 | Q2 14 | % Change | Q2 15 | Q2 14 | % Change | Q2 15 | Q2 14 | % Change | ||||||||||||||||||||||||||
New England | ||||||||||||||||||||||||||||||||||
Boston, MA | 5,348 | $ | 2,235 | $ | 2,145 | 4.2 | % | 95.9 | % | 95.2 | % | 0.7 | % | $ | 34,402 | $ | 32,806 | 4.9 | % | |||||||||||||||
Fairfield-New Haven, CT | 2,269 | 2,231 | 2,188 | 2.0 | % | 96.1 | % | 95.3 | % | 0.8 | % | 14,597 | 14,201 | 2.8 | % | |||||||||||||||||||
New England Average | 7,617 | 2,234 | 2,160 | 3.4 | % | 96.0 | % | 95.2 | % | 0.8 | % | 48,999 | 47,007 | 4.2 | % | |||||||||||||||||||
Metro NY/NJ | ||||||||||||||||||||||||||||||||||
New York City, NY | 3,373 | 3,763 | 3,614 | 4.1 | % | 95.6 | % | 96.3 | % | (0.7 | )% | 36,398 | 35,197 | 3.4 | % | |||||||||||||||||||
New York - Suburban | 4,464 | 2,773 | 2,684 | 3.3 | % | 95.6 | % | 96.6 | % | (1.0 | )% | 35,490 | 34,680 | 2.3 | % | |||||||||||||||||||
New Jersey | 3,718 | 2,261 | 2,167 | 4.3 | % | 95.9 | % | 96.3 | % | (0.4 | )% | 24,187 | 23,282 | 3.9 | % | |||||||||||||||||||
Metro NY/NJ Average | 11,555 | 2,897 | 2,790 | 3.8 | % | 95.7 | % | 96.4 | % | (0.7 | )% | 96,075 | 93,159 | 3.1 | % | |||||||||||||||||||
Mid-Atlantic | ||||||||||||||||||||||||||||||||||
Washington Metro/Baltimore, MD | 8,789 | 2,075 | 2,066 | 0.4 | % | 95.5 | % | 95.1 | % | 0.4 | % | 52,240 | 51,825 | 0.8 | % | |||||||||||||||||||
Mid-Atlantic Average | 8,789 | 2,075 | 2,066 | 0.4 | % | 95.5 | % | 95.1 | % | 0.4 | % | 52,240 | 51,825 | 0.8 | % | |||||||||||||||||||
Pacific Northwest | ||||||||||||||||||||||||||||||||||
Seattle, WA | 3,444 | 1,925 | 1,792 | 7.4 | % | 95.6 | % | 96.0 | % | (0.4 | )% | 19,013 | 17,775 | 7.0 | % | |||||||||||||||||||
Pacific Northwest Average | 3,444 | 1,925 | 1,792 | 7.4 | % | 95.6 | % | 96.0 | % | (0.4 | )% | 19,013 | 17,775 | 7.0 | % | |||||||||||||||||||
Northern California | ||||||||||||||||||||||||||||||||||
San Jose, CA | 3,373 | 2,483 | 2,238 | 10.9 | % | 96.0 | % | 96.6 | % | (0.6 | )% | 24,113 | 21,852 | 10.3 | % | |||||||||||||||||||
Oakland-East Bay, CA | 2,934 | 2,190 | 1,964 | 11.5 | % | 95.1 | % | 96.7 | % | (1.6 | )% | 18,339 | 16,687 | 9.9 | % | |||||||||||||||||||
San Francisco, CA | 2,894 | 2,978 | 2,752 | 8.2 | % | 95.3 | % | 96.1 | % | (0.8 | )% | 24,631 | 22,939 | 7.4 | % | |||||||||||||||||||
Northern California Average | 9,201 | 2,545 | 2,313 | 10.0 | % | 95.5 | % | 96.4 | % | (0.9 | )% | 67,083 | 61,478 | 9.1 | % | |||||||||||||||||||
Southern California | ||||||||||||||||||||||||||||||||||
Los Angeles, CA | 7,269 | 2,006 | 1,890 | 6.1 | % | 95.9 | % | 96.1 | % | (0.2 | )% | 41,926 | 39,594 | 5.9 | % | |||||||||||||||||||
Orange County, CA | 2,657 | 1,915 | 1,796 | 6.6 | % | 95.7 | % | 95.8 | % | (0.1 | )% | 14,606 | 13,719 | 6.5 | % | |||||||||||||||||||
San Diego, CA | 1,262 | 1,848 | 1,745 | 5.9 | % | 94.6 | % | 95.5 | % | (0.9 | )% | 6,617 | 6,304 | 5.0 | % | |||||||||||||||||||
Southern California Average | 11,188 | 1,967 | 1,852 | 6.2 | % | 95.7 | % | 96.0 | % | (0.3 | )% | 63,149 | 59,617 | 5.9 | % | |||||||||||||||||||
Average/Total Established | 51,794 | $ | 2,332 | $ | 2,220 | 5.0 | % | 95.6 | % | 95.9 | % | (0.3 | )% | $ | 346,559 | $ | 330,861 | 4.7 | % |
(1) | Established Communities are communities with stabilized occupancy and operating expenses as of January 1, 2014 such that a comparison of Q2 2014 to Q2 2015 is meaningful. |
(2) | Reflects the effect of concessions amortized over the average lease term. |
(3) | With concessions reflected on a cash basis, rental revenue from Established Communities would have remained unchanged with an increase of 4.7% from Q2 2014 to Q2 2015. |
(4) | If the Company were to include planned, current and previously completed Redevelopment Communities in its Established Communities portfolio, the increase in Established Communities' rental revenue would have been 4.9%. |
Apartment Homes | Average Rental Rates (1) | Economic Occupancy | Rental Revenue ($000s) (2) | |||||||||||||||||||||||||||||||
Q2 15 | Q1 15 | % Change | Q2 15 | Q1 15 | % Change | Q2 15 | Q1 15 | % Change | ||||||||||||||||||||||||||
New England | ||||||||||||||||||||||||||||||||||
Boston, MA | 5,348 | $ | 2,235 | $ | 2,193 | 1.9 | % | 95.9 | % | 95.2 | % | 0.7 | % | $ | 34,402 | $ | 33,500 | 2.7 | % | |||||||||||||||
Fairfield-New Haven, CT | 2,269 | 2,231 | 2,180 | 2.3 | % | 96.1 | % | 96.1 | % | 0.0 | % | 14,597 | 14,258 | 2.4 | % | |||||||||||||||||||
New England Average | 7,617 | 2,234 | 2,189 | 2.1 | % | 96.0 | % | 95.5 | % | 0.5 | % | 48,999 | 47,758 | 2.6 | % | |||||||||||||||||||
Metro NY/NJ | ||||||||||||||||||||||||||||||||||
New York City, NY | 3,373 | 3,763 | 3,713 | 1.3 | % | 95.6 | % | 94.9 | % | 0.7 | % | 36,398 | 35,647 | 2.1 | % | |||||||||||||||||||
New York - Suburban | 4,464 | 2,773 | 2,711 | 2.3 | % | 95.6 | % | 95.8 | % | (0.2 | )% | 35,490 | 34,798 | 2.0 | % | |||||||||||||||||||
New Jersey | 3,718 | 2,261 | 2,178 | 3.8 | % | 95.9 | % | 97.1 | % | (1.2 | )% | 24,187 | 23,598 | 2.5 | % | |||||||||||||||||||
Metro NY/NJ Average | 11,555 | 2,897 | 2,832 | 2.3 | % | 95.7 | % | 95.8 | % | (0.1 | )% | 96,075 | 94,043 | 2.2 | % | |||||||||||||||||||
Mid-Atlantic | ||||||||||||||||||||||||||||||||||
Washington Metro/Baltimore, MD | 8,789 | 2,075 | 2,047 | 1.4 | % | 95.5 | % | 95.7 | % | (0.2 | )% | 52,240 | 51,686 | 1.1 | % | |||||||||||||||||||
Mid-Atlantic Average | 8,789 | 2,075 | 2,047 | 1.4 | % | 95.5 | % | 95.7 | % | (0.2 | )% | 52,240 | 51,686 | 1.1 | % | |||||||||||||||||||
Pacific Northwest | ||||||||||||||||||||||||||||||||||
Seattle, WA | 3,444 | 1,925 | 1,861 | 3.4 | % | 95.6 | % | 96.0 | % | (0.4 | )% | 19,013 | 18,451 | 3.0 | % | |||||||||||||||||||
Pacific Northwest Average | 3,444 | 1,925 | 1,861 | 3.4 | % | 95.6 | % | 96.0 | % | (0.4 | )% | 19,013 | 18,451 | 3.0 | % | |||||||||||||||||||
Northern California | ||||||||||||||||||||||||||||||||||
San Jose, CA | 3,373 | 2,483 | 2,398 | 3.5 | % | 96.0 | % | 96.7 | % | (0.7 | )% | 24,113 | 23,475 | 2.7 | % | |||||||||||||||||||
Oakland-East Bay, CA | 2,934 | 2,190 | 2,106 | 4.0 | % | 95.1 | % | 96.0 | % | (0.9 | )% | 18,339 | 17,793 | 3.1 | % | |||||||||||||||||||
San Francisco, CA | 2,894 | 2,978 | 2,894 | 2.9 | % | 95.3 | % | 96.3 | % | (1.0 | )% | 24,631 | 24,193 | 1.8 | % | |||||||||||||||||||
Northern California Average | 9,201 | 2,545 | 2,461 | 3.4 | % | 95.5 | % | 96.4 | % | (0.9 | )% | 67,083 | 65,461 | 2.5 | % | |||||||||||||||||||
Southern California | ||||||||||||||||||||||||||||||||||
Los Angeles, CA | 7,269 | 2,006 | 1,966 | 2.0 | % | 95.9 | % | 96.6 | % | (0.7 | )% | 41,926 | 41,408 | 1.3 | % | |||||||||||||||||||
Orange County, CA | 2,657 | 1,915 | 1,879 | 1.9 | % | 95.7 | % | 96.0 | % | (0.3 | )% | 14,606 | 14,385 | 1.5 | % | |||||||||||||||||||
San Diego, CA | 1,262 | 1,848 | 1,808 | 2.2 | % | 94.6 | % | 95.0 | % | (0.4 | )% | 6,617 | 6,505 | 1.7 | % | |||||||||||||||||||
Southern California Average | 11,188 | 1,967 | 1,927 | 2.1 | % | 95.7 | % | 96.3 | % | (0.6 | )% | 63,149 | 62,298 | 1.4 | % | |||||||||||||||||||
Average/Total Established | 51,794 | $ | 2,332 | $ | 2,278 | 2.4 | % | 95.6 | % | 96.0 | % | (0.4 | )% | $ | 346,559 | $ | 339,697 | 2.0 | % |
(1) | Reflects the effect of concessions amortized over the average lease term. |
(2) | If the Company were to include planned, current and previously completed Redevelopment Communities in its Established Communities portfolio, the increase in Established Communities' rental revenue would have been 2.1%. |
Apartment Homes | Average Rental Rates (2) | Economic Occupancy | Rental Revenue ($000's) (3) (4) | |||||||||||||||||||||||||||||||
Year to Date 2015 | Year to Date 2014 | % Change | Year to Date 2015 | Year to Date 2014 | % Change | Year to Date 2015 | Year to Date 2014 | % Change | ||||||||||||||||||||||||||
New England | ||||||||||||||||||||||||||||||||||
Boston, MA | 5,348 | $ | 2,214 | $ | 2,137 | 3.6 | % | 95.6 | % | 95.0 | % | 0.6 | % | $ | 67,902 | $ | 65,183 | 4.2 | % | |||||||||||||||
Fairfield-New Haven, CT | 2,269 | 2,205 | 2,167 | 1.8 | % | 96.1 | % | 95.3 | % | 0.8 | % | 28,854 | 28,133 | 2.6 | % | |||||||||||||||||||
New England Average | 7,617 | 2,211 | 2,145 | 3.1 | % | 95.7 | % | 95.1 | % | 0.6 | % | 96,756 | 93,316 | 3.7 | % | |||||||||||||||||||
Metro NY/NJ | ||||||||||||||||||||||||||||||||||
New York City, NY | 3,373 | 3,738 | 3,597 | 3.9 | % | 95.2 | % | 96.1 | % | (0.9 | )% | 72,045 | 69,940 | 3.0 | % | |||||||||||||||||||
New York - Suburban | 4,464 | 2,742 | 2,659 | 3.1 | % | 95.7 | % | 96.5 | % | (0.8 | )% | 70,288 | 68,682 | 2.3 | % | |||||||||||||||||||
New Jersey | 3,718 | 2,219 | 2,140 | 3.7 | % | 96.5 | % | 96.5 | % | — | % | 47,785 | 46,089 | 3.7 | % | |||||||||||||||||||
Metro NY/NJ Average | 11,555 | 2,865 | 2,767 | 3.5 | % | 95.7 | % | 96.3 | % | (0.6 | )% | 190,118 | 184,711 | 2.9 | % | |||||||||||||||||||
Mid-Atlantic | ||||||||||||||||||||||||||||||||||
Washington Metro/Baltimore, MD | 8,789 | 2,061 | 2,056 | 0.2 | % | 95.6 | % | 95.3 | % | 0.3 | % | 103,927 | 103,370 | 0.5 | % | |||||||||||||||||||
Mid-Atlantic Average | 8,789 | 2,061 | 2,056 | 0.2 | % | 95.6 | % | 95.3 | % | 0.3 | % | 103,927 | 103,370 | 0.5 | % | |||||||||||||||||||
Pacific Northwest | ||||||||||||||||||||||||||||||||||
Seattle, WA | 3,444 | 1,893 | 1,773 | 6.8 | % | 95.8 | % | 95.6 | % | 0.2 | % | 37,463 | 35,006 | 7.0 | % | |||||||||||||||||||
Pacific Northwest Average | 3,444 | 1,893 | 1,773 | 6.8 | % | 95.8 | % | 95.6 | % | 0.2 | % | 37,463 | 35,006 | 7.0 | % | |||||||||||||||||||
Northern California | ||||||||||||||||||||||||||||||||||
San Jose, CA | 3,373 | 2,440 | 2,211 | 10.4 | % | 96.4 | % | 96.6 | % | (0.2 | )% | 47,588 | 43,190 | 10.2 | % | |||||||||||||||||||
Oakland-East Bay, CA | 2,934 | 2,148 | 1,938 | 10.8 | % | 95.5 | % | 96.8 | % | (1.3 | )% | 36,132 | 32,991 | 9.5 | % | |||||||||||||||||||
San Francisco, CA | 2,894 | 2,936 | 2,723 | 7.8 | % | 95.8 | % | 96.4 | % | (0.6 | )% | 48,824 | 45,554 | 7.2 | % | |||||||||||||||||||
Northern California Average | 9,201 | 2,503 | 2,283 | 9.6 | % | 95.9 | % | 96.6 | % | (0.7 | )% | 132,544 | 121,735 | 8.9 | % | |||||||||||||||||||
Southern California | ||||||||||||||||||||||||||||||||||
Los Angeles, CA | 7,269 | 1,986 | 1,878 | 5.8 | % | 96.2 | % | 96.1 | % | 0.1 | % | 83,334 | 78,688 | 5.9 | % | |||||||||||||||||||
Orange County, CA | 2,657 | 1,897 | 1,782 | 6.5 | % | 95.8 | % | 95.2 | % | 0.6 | % | 28,991 | 27,075 | 7.1 | % | |||||||||||||||||||
San Diego, CA | 1,262 | 1,828 | 1,726 | 5.9 | % | 94.8 | % | 95.8 | % | (1.0 | )% | 13,122 | 12,511 | 4.9 | % | |||||||||||||||||||
Southern California Average | 11,188 | 1,947 | 1,838 | 5.9 | % | 96.0 | % | 95.8 | % | 0.2 | % | 125,447 | 118,274 | 6.1 | % | |||||||||||||||||||
Average/Total Established | 51,794 | $ | 2,305 | $ | 2,203 | 4.6 | % | 95.8 | % | 95.9 | % | (0.1 | )% | $ | 686,255 | $ | 656,412 | 4.5 | % |
Q2 | Q2 | Q2 2015 % of | YTD | YTD | YTD 2015 % of | |||||||||||||||||||||||
2015 | 2014 | % Change | Total Opex | 2015 | 2014 | % Change | Total Opex | |||||||||||||||||||||
Property taxes (2) | $ | 33,789 | $ | 33,055 | 2.2 | % | 32.8 | % | $ | 68,993 | $ | 68,083 | 1.3 | % | 33.2 | % | ||||||||||||
Payroll (3) | 23,253 | 22,040 | 5.5 | % | 22.6 | % | 46,631 | 44,091 | 5.8 | % | 22.5 | % | ||||||||||||||||
Repairs & maintenance (4) | 18,983 | 17,573 | 8.0 | % | 18.5 | % | 35,255 | 32,416 | 8.8 | % | 17.0 | % | ||||||||||||||||
Office operations (5) | 10,958 | 11,207 | (2.2 | )% | 10.6 | % | 21,511 | 22,086 | (2.6 | )% | 10.4 | % | ||||||||||||||||
Utilities (6) | 9,455 | 9,340 | 1.2 | % | 9.2 | % | 22,356 | 22,470 | (0.5 | )% | 10.8 | % | ||||||||||||||||
Insurance (7) | 3,971 | 3,538 | 12.2 | % | 3.9 | % | 7,676 | 7,145 | 7.4 | % | 3.7 | % | ||||||||||||||||
Marketing (8) | 2,445 | 2,260 | 8.2 | % | 2.4 | % | 4,953 | 4,607 | 7.5 | % | 2.4 | % | ||||||||||||||||
Total Established Communities Operating Expenses (9) | $ | 102,854 | $ | 99,013 | 3.9 | % | 100.0 | % | $ | 207,375 | $ | 200,898 | 3.2 | % | 100.0 | % |
(1) | See Attachment #14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
(2) | Property taxes increased for the three and six months ended June 30, 2015 over the prior year periods primarily due to increases in rates and assessments, particularly in the Company's East Coast and Pacific Northwest markets, coupled with lower than expected supplemental tax billings for certain California communities present in the prior year period. The increase for the six months ended June 30, 2015, was partially offset by reductions and a successful appeal of a California community. |
(3) | Payroll includes expenses directly related to on-site operations and increased for the three and six months ended June 30, 2015 over the prior year periods due to increased benefits costs from higher medical claims and compliance with the provisions of the Affordable Care Act as well as increased salaries. |
(4) | Repairs and maintenance increased for the three and six months ended June 30, 2015 over the prior year periods. The increase for the three months ended June 30, 2015 was primarily due to the timing of various maintenance projects, increased turnover costs and a decrease in damage receipts as compared to the prior year period. The increase for the six months ended June 30, 2015 was primarily due to snow removal and other costs related to severe winter storms in the Company's Northeast markets in the first quarter of 2015. |
(5) | Office operations includes administrative costs, land lease expense, bad debt expense and association and license fees. The decrease for the three and six months ended June 30, 2015 from the prior year periods is primarily due to a decrease in rent write-offs, partially offset by the timing of accounting and auditing fees. The decrease for the six months ended June 30, 2015 was also partially offset by an increase in state income taxes. |
(6) | Utilities represent aggregate utility costs, net of resident reimbursements. The increase for the three months ended June 30, 2015 over the prior year period is primarily due to increases in water and sewer expenses, net of resident reimbursements, partially offset by a decrease in gas consumption. The decrease for the six months ended June 30, 2015 from the prior year period is primarily due to a decrease in gas and electricity consumption, partially offset by an increase in water and sewer expenses, net of resident reimbursements. |
(7) | Insurance costs consist of premiums, expected claims activity and associated reductions from receipt of claims recoveries. The increase for the three and six months ended June 30, 2015 over the prior year periods is primarily due to increased property premiums as well as the timing of claims and related recoveries. Insurance costs can exhibit volatility due to the amounts and timing of estimated and actual claim activity and the related recoveries received. |
(8) | Marketing costs represent amounts incurred for electronic and print advertising, as well as prospect management and incentive costs. The increase for the three and six months ended June 30, 2015 over the prior year periods is primarily due to increased customer service incentives related to the severe winter storms in the Company's Northeast markets. |
(9) | Operating expenses for Established Communities excludes indirect costs for off-site corporate-level property management related expenses and other support-related expenses. |
Community Information | Number | Total | Schedule | Avg Rent | % | % | % | % | |||||||||||||||||||||||||
of | Capital | Full Qtr | Per | Complete | Leased | Occupied | Economic | ||||||||||||||||||||||||||
Apt | Cost | Initial | Stabilized | Home | Occ. | ||||||||||||||||||||||||||||
Development Name | Location | Homes | (millions) (1) | Start | Occupancy | Complete | Ops (1) | (1) | As of July 17, 2015 | Q2 '15 (1) | |||||||||||||||||||||||
Under Construction: | |||||||||||||||||||||||||||||||||
1. | Avalon Baker Ranch | Lake Forest, CA | 430 | $ | 130.6 | Q4 2013 | Q4 2014 | Q4 2015 | Q2 2016 | $2,250 | 71.6 | % | 61.4 | % | 55.1 | % | 41.3 | % | |||||||||||||||
2. | Avalon Vista | Vista, CA | 221 | 58.3 | Q4 2013 | Q1 2015 | Q3 2015 | Q1 2016 | 2,015 | 75.6 | % | 51.6 | % | 42.5 | % | 21.6 | % | ||||||||||||||||
3. | Avalon Roseland | Roseland, NJ | 136 | 46.2 | Q1 2014 | Q1 2015 | Q3 2015 | Q1 2016 | 3,220 | 81.6 | % | 75.0 | % | 69.9 | % | 40.8 | % | ||||||||||||||||
4. | Avalon Falls Church | Falls Church, VA | 384 | 109.8 | Q1 2014 | Q1 2015 | Q1 2016 | Q3 2016 | 2,275 | 48.4 | % | 39.8 | % | 30.2 | % | 12.0 | % | ||||||||||||||||
5. | Avalon Marlborough | Marlborough, MA | 350 | 76.6 | Q1 2014 | Q1 2015 | Q2 2016 | Q4 2016 | 2,065 | 62.9 | % | 58.3 | % | 40.9 | % | 17.2 | % | ||||||||||||||||
6. | AVA Theater District | Boston, MA | 398 | 182.4 | Q1 2013 | Q2 2015 | Q4 2015 | Q2 2016 | 4,025 | 45.7 | % | 37.2 | % | 14.6 | % | 1.6 | % | ||||||||||||||||
7. | Avalon Bloomfield Station | Bloomfield, NJ | 224 | 52.8 | Q4 2013 | Q2 2015 | Q4 2015 | Q2 2016 | 2,290 | 35.7 | % | 40.2 | % | 28.6 | % | 5.9 | % | ||||||||||||||||
8. | Avalon Glendora | Glendora, CA | 280 | 82.5 | Q4 2013 | Q2 2015 | Q1 2016 | Q3 2016 | 2,045 | 8.6 | % | 16.4 | % | 8.6 | % | 1.4 | % | ||||||||||||||||
9. | Avalon Willoughby Square/AVA DoBro | Brooklyn, NY | 826 | 444.9 | Q3 2013 | Q3 2015 | Q4 2016 | Q2 2017 | 3,470 | — | 2.8 | % | — | — | |||||||||||||||||||
10. | Avalon Framingham | Framingham, MA | 180 | 43.9 | Q3 2014 | Q3 2015 | Q2 2016 | Q4 2016 | 2,045 | — | 21.7 | % | — | — | |||||||||||||||||||
11. | Avalon Green III | Elmsford, NY | 68 | 22.1 | Q4 2014 | Q3 2015 | Q2 2016 | Q4 2016 | 2,790 | — | 5.9 | % | — | — | |||||||||||||||||||
12. | AVA Capitol Hill (2) | Seattle, WA | 249 | 81.4 | Q1 2014 | Q4 2015 | Q2 2016 | Q4 2016 | 2,170 | — | — | — | — | ||||||||||||||||||||
13. | Avalon Irvine III | Irvine, CA | 156 | 55.0 | Q2 2014 | Q4 2015 | Q1 2016 | Q3 2016 | 2,270 | — | — | — | — | ||||||||||||||||||||
14. | Avalon Dublin Station II | Dublin, CA | 252 | 83.7 | Q2 2014 | Q4 2015 | Q2 2016 | Q4 2016 | 2,390 | — | — | — | — | ||||||||||||||||||||
15. | Avalon Huntington Beach (2) | Huntington Beach, CA | 378 | 120.3 | Q2 2014 | Q3 2016 | Q2 2017 | Q4 2017 | 2,115 | — | — | — | — | ||||||||||||||||||||
16. | Avalon West Hollywood (2) | West Hollywood, CA | 294 | 162.4 | Q2 2014 | Q3 2016 | Q2 2017 | Q4 2017 | 3,495 | — | — | — | — | ||||||||||||||||||||
17. | Avalon Esterra Park (2) | Redmond, WA | 482 | 137.8 | Q3 2014 | Q2 2016 | Q2 2017 | Q4 2017 | 2,030 | — | — | — | — | ||||||||||||||||||||
18. | Avalon North Station | Boston, MA | 503 | 256.9 | Q3 2014 | Q4 2016 | Q4 2017 | Q2 2018 | 3,575 | — | — | — | — | ||||||||||||||||||||
19. | Avalon Union | Union, NJ | 202 | 50.7 | Q4 2014 | Q1 2016 | Q4 2016 | Q1 2017 | 2,345 | — | — | — | — | ||||||||||||||||||||
20. | Avalon Princeton | Princeton, NJ | 280 | 95.5 | Q4 2014 | Q3 2016 | Q2 2017 | Q4 2017 | 2,890 | — | — | — | — | ||||||||||||||||||||
21. | Avalon Alderwood II | Lynnwood, WA | 124 | 26.1 | Q1 2015 | Q2 2016 | Q3 2016 | Q4 2016 | 1,670 | — | — | — | — | ||||||||||||||||||||
22. | Avalon Hunt Valley | Hunt Valley, MD | 332 | 74.0 | Q1 2015 | Q2 2016 | Q1 2017 | Q3 2017 | 1,795 | — | — | — | — | ||||||||||||||||||||
23. | Avalon Laurel | Laurel, MD | 344 | 72.4 | Q2 2015 | Q2 2016 | Q1 2017 | Q3 2017 | 1,850 | — | — | — | — | ||||||||||||||||||||
24. | Avalon Quincy | Quincy, MA | 395 | 95.3 | Q2 2015 | Q3 2016 | Q2 2017 | Q4 2017 | 2,165 | — | — | — | — | ||||||||||||||||||||
25. | Avalon Great Neck | Great Neck, NY | 191 | 78.9 | Q2 2015 | Q1 2017 | Q2 2017 | Q4 2017 | 3,570 | — | — | — | — | ||||||||||||||||||||
26. | AVA NoMa | Washington, D.C. | 438 | 148.3 | Q2 2015 | Q2 2017 | Q1 2018 | Q3 2018 | 2,535 | — | — | — | — | ||||||||||||||||||||
Subtotal / Weighted Average | 8,117 | $ | 2,788.8 | $2,590 | |||||||||||||||||||||||||||||
Completed this Quarter: | |||||||||||||||||||||||||||||||||
1. | Avalon Assembly Row/AVA Somerville | Somerville, MA | 445 | $ | 129.0 | Q2 2012 | Q2 2014 | Q2 2015 | Q4 2015 | $2,630 | 100.0 | % | 95.5 | % | 87.4 | % | 76.0 | % | |||||||||||||||
2. | Avalon Wharton | Wharton, NJ | 247 | 51.1 | Q4 2012 | Q3 2014 | Q2 2015 | Q3 2015 | 2,060 | 100.0 | % | 99.6 | % | 97.6 | % | 88.2 | % | ||||||||||||||||
3. | Avalon Hayes Valley | San Francisco, CA | 182 | 95.4 | Q3 2013 | Q1 2015 | Q2 2015 | Q4 2015 | 4,410 | 100.0 | % | 87.4 | % | 85.2 | % | 41.1 | % | ||||||||||||||||
Subtotal / Weighted Average | 874 | $ | 275.5 | $2,840 | |||||||||||||||||||||||||||||
Total / Weighted Average | 8,991 | $ | 3,064.3 | $2,615 | |||||||||||||||||||||||||||||
Asset Cost Basis (millions) (3): | |||||||||||||||||||||||||||||||||
Total Capital Cost, under construction and completed | $ | 3,783.8 | Weighted Average Projected NOI as a % of Total Capital Cost (1) | 6.4% | |||||||||||||||||||||||||||||
Total Capital Cost, disbursed to date | (2,617.7 | ) | |||||||||||||||||||||||||||||||
Total Capital Cost, remaining to invest | $ | 1,166.1 |
(1) | See Attachment #14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
(2) | Developments containing at least 10,000 square feet of retail space include AVA Capitol Hill (15,000 sf), Avalon Huntington Beach (10,000 sf), Avalon West Hollywood (32,000 sf), and Avalon Esterra Park (17,000 sf). |
(3) | Includes the communities presented on this attachment plus six additional communities with 2,115 apartment homes representing $719.5 million in Total Capital Costs which have completed construction but not yet achieved Stabilized Operations for the full quarter. Q2 2015 NOI for these 35 communities was $14.7 million, of which $4.0 million relates to communities classified as Other Stabilized on Attachment #3. |
This chart contains forward-looking statements. Please see the paragraph regarding forward-looking statements on the Table of Contents page relating to the Company's Supplemental Operating and Financial Data for the second quarter of 2015. |
DEVELOPMENT RIGHTS (1) |
Estimated | Total Capital | |||||
# of Rights | Number | Cost (1) (2) | ||||
of Homes | (millions) | |||||
Development Rights as of 12/31/2014 | 37 | 10,384 | $3,187 | |||
Q1 2015 | ||||||
Q1 Additions | 3 | 910 | $426 | |||
Q1 Construction starts | (2) | (456) | (99) | |||
Q1 Adjustments to existing Development Rights | (3) | (853) | (205) | |||
Development Rights as of 3/31/2015 | 35 | 9,985 | $3,309 | |||
Q2 2015 | ||||||
Q2 Additions | 4 | 1,699 | $694 | |||
Q2 Construction starts | (4) | (1,369) | (392) | |||
Q2 Adjustments to existing Development Rights | (1) | (235) | 57 | |||
Development Rights as of 6/30/2015 | 34 | 10,080 | $3,668 | |||
Current Development Rights by Market as of June 30, 2015 | ||||||
New England | 4 | 856 | $237 | |||
Metro NY/NJ | 16 | 4,459 | 1,710 | |||
Mid-Atlantic | 5 | 1,520 | 386 | |||
Pacific Northwest | 4 | 1,278 | 401 | |||
Northern California | 3 | 941 | 468 | |||
Southern California | 2 | 1,026 | 466 | |||
Total | 34 | 10,080 | $3,668 |
(1) | See Attachment #14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
(2) | As of June 30, 2015, the Company owns land (including pursuit costs) in the amount of $487 million for the future development of 13 of the 34 Development Rights. Construction is expected to commence during the next 12 months on eight of the 13 Development Rights for which land is owned with a total basis of $122 million. |
This chart contains forward-looking statements. Please see the paragraph regarding forward-looking statements on the Table of Contents page relating to the Company's Supplemental Operating and Financial Data for the second quarter of 2015. |
Company | # of | NOI (3) | Debt | |||||||||||||||||||
# of | Ownership | Apartment | YTD | Principal | Interest | |||||||||||||||||
Unconsolidated Real Estate Investments (1) | Communities | Percentage (2) | Homes | Q2 2015 | 2015 | Amount (3) | Rate (4) | |||||||||||||||
AvalonBay Value Added Fund II, L.P. ("Fund II") | 9 | 31.3% | 3,564 | $ | 10,710 | $ | 23,230 | $ | 347,929 | 4.12 | % | |||||||||||
Multifamily Partners AC LP | 9 | 28.6% | 1,730 | 8,894 | 18,316 | 325,313 | 3.92 | % | ||||||||||||||
Multifamily Partners AC JV LP | 3 | 20.0% | 921 | 4,662 | 9,033 | 162,300 | (5) | 6.00 | % | |||||||||||||
MVP I, LLC | 1 | 25.0% | (6) | 313 | 2,804 | 5,569 | 103,000 | 3.24 | % | |||||||||||||
Brandywine Apartments of Maryland, LLC | 1 | 28.7% | 305 | 1,260 | 2,563 | 24,092 | 3.40 | % | ||||||||||||||
Total Unconsolidated Real Estate Investments | 23 | 6,833 | $ | 28,330 | $ | 58,711 | $ | 962,634 | 4.26 | % |
(1) | Total unconsolidated real estate investments excludes the real estate investments owned through the joint ventures entered into with Equity Residential as part of the Archstone acquisition. |
(2) | Company ownership percentages do not reflect the impact of promoted interests. |
(3) | NOI and outstanding indebtedness are presented at 100% ownership. NOI includes $1,718 for the six months ended June 30, 2015 from a Fund II community disposed of during the period and excludes property management fees as the Company serves as the property management company for all ventures except Brandywine Apartments of Maryland, LLC. |
(4) | Represents the weighted average interest rate as of June 30, 2015. |
(5) | Borrowing is comprised of four mortgage loans made by the equity investors in the venture in proportion to their equity interests. |
(6) | During the three months ended March 31, 2015, the Company received $20,680 from the joint venture partner associated with MVP I, LLC upon agreement to modify the joint venture agreement to eliminate the Company's promoted interest for future return calculations and associated distributions. Beginning in March 2015, the Company's share of operating results is based on its 25.0% ownership interest. Prior to this modification of the joint venture agreement, after the venture made certain threshold distributions to the third-party partner, the Company generally received 45.0% of all further distributions. In January and February 2015, the Company received aggregate distributions of $660 in excess of its ownership percentage for its promoted interest in MVP I, LLC. |
DEBT COMPOSITION AND MATURITIES | SELECT DEBT METRICS (5) | ||||||||||||||||
Average | |||||||||||||||||
Interest | Net Debt-to-Core EBITDA | ||||||||||||||||
Debt Composition (1) | Amount (2) | Rate (3) | Maturities (1) (2) | 5.4x | |||||||||||||
Conventional Debt | 2015 | $ | 112,641 | ||||||||||||||
Long-term, fixed rate | $ | 4,970,287 | 2016 | $ | 283,554 | Interest Coverage | 6.5x | ||||||||||
Long-term, variable rate | 400,937 | 2017 | $ | 978,456 | |||||||||||||
Variable rate facility (4) | — | 2018 | $ | 94,572 | Unencumbered NOI | 76 | % | ||||||||||
Subtotal, Conventional | 5,371,224 | 4.3% | 2019 | $ | 594,868 | ||||||||||||
Tax-Exempt Debt | |||||||||||||||||
Long-term, fixed rate | 117,270 | ||||||||||||||||
Long-term, variable rate | 945,395 | ||||||||||||||||
Subtotal, Tax-Exempt | 1,062,665 | 2.1% | |||||||||||||||
Total Debt | $ | 6,433,889 | 3.9% |
DEBT COVENANT COMPLIANCE (5) | ||||||||||
Unsecured Line of Credit Covenants | June 30, 2015 | Requirement | ||||||||
Total Outstanding Indebtedness to Capitalization Value (6) | 29.4 | % | < | 60% | ||||||
Combined EBITDA to Combined Debt Service | 4.96x | > | 1.50x | |||||||
Unsecured Indebtedness to Unencumbered Asset Value | 19.3 | % | < | 65% | ||||||
Secured Indebtedness to Capitalization Value (6) | 13.5 | % | < | 40% | ||||||
Unsecured Senior Notes Covenants | June 30, 2015 | Requirement | ||||||||
Total Outstanding Indebtedness to Total Assets (7) | 36.9 | % | < | 60% | ||||||
Secured Indebtedness to Total Assets (7) | 15.1 | % | < | 40% | ||||||
Unencumbered Assets to Unsecured Indebtedness | 417.3 | % | > | 150% | ||||||
Consolidated Income Available for Debt Service to the Annual Service Charge | 6.63x | > | 1.50x |
(1) | The Company has the option to extend the maturity date of $692,191 principal amount of indebtedness currently scheduled to mature in 2017. The extension option provides the Company the ability, for a fee, to elect a revised maturity of one or two years beyond the current maturity. |
(2) | Balances outstanding and amounts due at maturity exclude any associated issuance discount and mark-to-market premiums. |
(3) | Rates are as of June 30, 2015 and include costs of financing such as credit enhancement fees, trustees' fees, the impact of interest rate hedges and mark-to-market adjustments. |
(4) | Represents the Company's $1.3 billion unsecured credit facility, under which no amounts were outstanding at June 30, 2015. |
(5) | See Attachment #14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
(6) | Capitalization Value represents the Company’s Combined EBITDA for operating communities that the Company has owned for the six months ended June 30, 2015, capitalized at a rate of 6% per annum, plus the book value of Development Communities and real estate acquired during the six months ended June 30, 2015. For discussion of other defined terms, see "Debt Covenant Compliance" in Attachment #14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
(7) | Total Assets represents the sum of the Company's undepreciated real estate assets and other assets, excluding accounts receivable. See "Debt Covenant Compliance" in Attachment #14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
Weighted Average | Accumulated | Weighted Average | Weighted Average | |||||||||||||||||||
Number of | Investment Period | Gross Sales | Depreciation | Economic | Initial Year Mkt. | Unleveraged | ||||||||||||||||
Communities Sold | (Years) (3) | Price | GAAP Gain | and Other | Gain (Loss) (2) | Cap Rate (2) (3) | IRR (2) (3) | |||||||||||||||
2006- 2010: | ||||||||||||||||||||||
27 Communities, 1 Office Building | 11.3 | $ | 1,512,117 | $ | 708,584 | $ | 163,742 | $ | 544,842 | 5.3% | 14.1% | |||||||||||
6 Land Parcels (4) (5) | ||||||||||||||||||||||
2011: | ||||||||||||||||||||||
3 Communities, 3 Land Parcels (6) | 13.4 | $ | 292,965 | $ | 287,132 | $ | 156,233 | $ | 130,899 | 5.1% | 16.0% | |||||||||||
2012: | ||||||||||||||||||||||
4 Communities, 1 Land Parcel (7) | 13.9 | $ | 280,550 | $ | 146,591 | $ | 67,178 | $ | 79,413 | 5.3% | 10.6% | |||||||||||
2013: | ||||||||||||||||||||||
8 Communities, 1 Land Parcel (8) | 13.4 | $ | 937,070 | $ | 279,206 | $ | 96,745 | $ | 182,461 | 4.9% | 12.8% | |||||||||||
2014: | ||||||||||||||||||||||
5 Communities, 1 Land Parcel (9) | 10.9 | $ | 669,250 | $ | 157,106 | $ | 45,958 | $ | 111,148 | 5.0% | 12.6% | |||||||||||
2015: | ||||||||||||||||||||||
1 Community, 2 Land Parcels (10) | 14.5 | $ | 129,276 | $ | 70,911 | $ | 29,053 | $ | 41,858 | 5.1% | 11.9% | |||||||||||
2006 - 2015 Total | ||||||||||||||||||||||
48 Communities, 1 Office Building, | 13.8 | $ | 3,821,228 | $ | 1,649,530 | $ | 558,909 | $ | 1,090,621 | 5.1% | 13.5% | |||||||||||
14 Land Parcels |
(1) | Provides disposition activity for the most recent 10 year periods and excludes dispositions by AvalonBay Value Added Fund, L.P. ("Fund I"), Fund II and any joint ventures formed with Equity Residential as part of the Archstone acquisition, and dispositions to joint venture entities in which the Company retains an economic interest. |
(2) | See Attachment #14 - Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. |
(3) | For purposes of this attachment, land and office building sales and the disposition of any real estate held in a joint venture for any or all of the Company's investment periods are not included in the calculation of Weighted Average Investment Period, Weighted Average Initial Year Market Cap Rate, or Weighted Average Unleveraged IRR. |
(4) | GAAP gains for sales during this period include the Company's proportionate share of communities held by joint ventures and the recovery of any previously recognized impairment losses. |
(5) | 2009 and 2010 GAAP and Economic Gain include the recognition of approximately $2,770 and $2,675, respectively, in deferred gains for prior year dispositions, recognition of which occurred in conjunction with settlement of associated legal matters. |
(6) | 2011 results exclude the Company's proportionate GAAP gain of $7,675 associated with an asset exchange. 2011 Accumulated Depreciation and Other includes $20,210 in impairment charges, recorded in prior periods, on two of the land parcels sold. |
(7) | 2012 Accumulated Depreciation and Other includes $16,363 in impairment charges for the land parcel sold. 2012 GAAP and Economic Gains include the recognition of approximately $1,225 and $496, respectively, in deferred gains for prior year dispositions and gains for current year dispositions, which occurred in conjunction with settlement of associated legal matters. |
(8) | 2013 results include the sale of four Archstone communities for Gross Sales Price and Weighted Average Initial Year Market Cap Rate, but exclude these dispositions for other metrics due to an investment period of less than one year. 2013 Accumulated Depreciation and Other includes $1,955 in impairment charges, recorded in a prior period, for the Company's basis in the unconsolidated venture sold. |
(9) | 2014 results include the sale of two communities acquired as part of the Archstone acquisition, which are excluded from the Weighted Average Investment Period and Weighted Average Unleveraged IRR, due to the short investment period. 2014 GAAP and Economic Gain (Loss) includes $50,478 and $42,887, respectively, related to the sale of Avalon Chrystie Place in which the Company held a 20% equity interest; additionally the Company earned $58,128 for its promoted interest from the sale. |
(10) | 2015 Accumulated Depreciation and Other includes $6,733 in impairment charges for the land parcels sold, of which $5,933 was recorded in a prior year period. |
Annual 2015 | |||||
July 2015 Outlook | January 2015 Outlook | ||||
Projected Earnings per share | $6.04 to $6.18 | $4.65 to $4.95 | |||
Less - Net gain on asset sales, per share | $1.69 to $1.83 | $0.90 to $1.10 | |||
Plus - Impairment due to casualty loss, per share | $0.03 | — | |||
Plus - Real estate depreciation, per share | $3.53 to $3.67 | $3.50 to $3.70 | |||
Projected FFO per share range (1) | $7.91 to $8.05 | $7.25 to $7.55 | |||
Projected FFO per share change at the mid-point of outlook ranges | 10.1% | 2.1% | |||
Expected per share non-routine items included in Projected FFO per share | $0.45 | $0.05 | |||
Projected Core FFO per share range (1) | $7.46 to $7.60 | $7.20 to $7.50 | |||
Projected Core FFO per share change at the mid-point of outlook ranges | 11.1% | 8.4% | |||
Established Communities (2015 Buckets) | |||||
Rental revenue change | 4.5% to 5.0% | 3.5% to 4.5% | |||
Operating expense change | 3.0% to 4.0% | 3.0% to 4.0% | |||
Net Operating Income change | 5.0% to 5.75% | 3.5% to 5.0% | |||
Development and Redevelopment Activity (2) | |||||
Development Starts: Expected Total Capital Cost for communities started in 2015 - (AVB Share) | $1,200 | $1,250 | |||
Development Completions: Expected Total Capital Cost for communities completed during 2015 - (AVB Share) | $1,200 | $1,200 | |||
Development Spend: Expected Total Capital Cost to be incurred for communities during 2015 (including land purchases) - (AVB Share) | $1,500 | $1,500 | |||
Development homes completed and delivered in 2015 | 3,500 | 3,700 | |||
Development homes occupied in 2015 | 3,200 | 3,500 | |||
Development NOI in 2015 | $64 to $68 | $63 to $75 | |||
Redevelopment Spend: Expected Total Capital Cost to be incurred for communities during 2015 | $200 | $200 | |||
External Funding Activity - Sources (Uses) (2) | |||||
New capital from asset sales and capital markets activity | $1,950 | $1,750 | |||
Secured debt redemptions and amortization | $850 | $650 | |||
Weighted average effective interest rate on maturing debt | 4.3% | 3.8% | |||
Capitalized Interest | $77 to $83 | $70 to $80 | |||
Change in Expensed Overhead (Corporate G&A, Property and Investment Management) | +6.0% to +8.0% | 0.0% to +5.0% | |||
(1) | This term is a non-GAAP measure or other term that is described more fully on Attachment 14. |
(2) | Includes 2015 activity discussed in this release. |
Q2 | Q2 | YTD | YTD | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
FFO, actual | $ | 290,471 | $ | 222,486 | $ | 541,051 | $ | 435,330 | ||||||||
Adjusting Items | ||||||||||||||||
Joint venture gains and costs (1) | (9,571 | ) | (3,951 | ) | (11,572 | ) | (6,057 | ) | ||||||||
Casualty and impairment gain, net (2) | (17,114 | ) | — | (15,521 | ) | — | ||||||||||
Lost NOI from Edgewater fire | 1,687 | — | 3,334 | — | ||||||||||||
Early extinguishment of debt | (7,749 | ) | 412 | (7,749 | ) | 412 | ||||||||||
Gain on sale of real estate | (9,625 | ) | — | (9,647 | ) | — | ||||||||||
Joint venture promote | — | — | (20,680 | ) | — | |||||||||||
Income taxes | 997 | — | 997 | — | ||||||||||||
Abandoned pursuits (3) | 353 | 2,564 | 462 | 2,564 | ||||||||||||
Acquisition costs | 62 | 17 | 940 | 30 | ||||||||||||
Severance related costs | 16 | 300 | 1,664 | 300 | ||||||||||||
Business interruption insurance proceeds | (66 | ) | (587 | ) | (154 | ) | (587 | ) | ||||||||
Core FFO | $ | 249,461 | $ | 221,241 | $ | 483,125 | $ | 431,992 | ||||||||
Core FFO per share | $ | 1.87 | $ | 1.70 | $ | 3.63 | $ | 3.32 | ||||||||
Average shares outstanding - diluted | 133,086,439 | 130,248,321 | 133,131,363 | 129,938,232 | ||||||||||||
(1) Composed primarily of the Company's proportionate share of gains and operating results for joint ventures formed with Equity Residential as part of the Archstone acquisition. | ||||||||||||||||
(2) Composed primarily of insurance proceeds, partially offset by costs from the fire at Edgewater. | ||||||||||||||||
(3) Q2 and YTD 2014 amounts are composed of write-offs expensed by the Company during the quarter and year to date periods for Development Rights and a retail tenant. | ||||||||||||||||
Q2 | Q2 | YTD | YTD | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net income attributable to common stockholders | $ | 172,324 | $ | 158,086 | $ | 380,469 | $ | 299,825 | ||||||||
Depreciation - real estate assets, including discontinued | ||||||||||||||||
operations and joint venture adjustments | 119,856 | 111,653 | 238,177 | 220,619 | ||||||||||||
Distributions to noncontrolling interests, including | ||||||||||||||||
discontinued operations | 9 | 9 | 19 | 17 | ||||||||||||
Gain on sale of unconsolidated entities holding previously | ||||||||||||||||
depreciated real estate assets | (1,718 | ) | (449 | ) | (10,873 | ) | (449 | ) | ||||||||
Gain on sale of previously depreciated real estate assets (1) | — | (46,813 | ) | (70,936 | ) | (84,682 | ) | |||||||||
Impairment due to casualty loss | — | — | 4,195 | — | ||||||||||||
FFO attributable to common stockholders | $ | 290,471 | $ | 222,486 | $ | 541,051 | $ | 435,330 | ||||||||
Average shares outstanding - diluted | 133,086,439 | 130,248,321 | 133,131,363 | 129,938,232 | ||||||||||||
Earnings per share - diluted | $ | 1.29 | $ | 1.21 | $ | 2.86 | $ | 2.31 | ||||||||
FFO per common share - diluted | $ | 2.18 | $ | 1.71 | $ | 4.06 | $ | 3.35 | ||||||||
(1) Q2 and YTD 2014 include the impact of the noncontrolling portion of the gain on sale of community owned by Fund I that was consolidated for financial reporting purposes. | ||||||||||||||||
Net income attributable to common stockholders | $ | 172,324 | |
Interest expense, net | 44,590 | ||
Income tax expense | 1,293 | ||
Depreciation expense | 118,627 | ||
EBITDA | $ | 336,834 | |
NOI from discontinued operations and real estate assets sold or held for sale, not classified as discontinued operations | (1,353 | ) | |
Gain on sale of communities | — | ||
EBITDA after disposition activity | $ | 335,481 | |
Joint venture income | (13,806 | ) | |
Casualty and impairment gain, net | (17,114 | ) | |
Lost NOI from Edgewater fire | 1,687 | ||
Gain on extinguishment of debt, net | (7,749 | ) | |
Gain on sale of real estate | (9,625 | ) | |
Other non-core adjustments | 365 | ||
Core EBITDA | $ | 289,239 | |
Interest expense, net | $ | 44,590 | |
Interest Coverage | 6.5 times | ||
Total debt principal (1) | $ | 6,433,889 | |
Cash and cash in escrow | (168,805 | ) | |
Net debt | $ | 6,265,084 | |
Core EBITDA | $ | 289,239 | |
Core EBITDA, annualized | $ | 1,156,956 | |
Net Debt-to-Core EBITDA | 5.4 times | ||
(1) Balance at June 30, 2015 excludes $7,169 of debt discount as reflected in unsecured notes, net, and $60,410 of debt premium as reflected in notes payable, on the Condensed Consolidated Balance Sheets. The debt premium is primarily related to above market interest rates on debt assumed in connection with the Archstone acquisition. | |||
Q2 | Q2 | Q1 | Q4 | YTD | YTD | |||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Net income | $ | 172,253 | $ | 172,197 | $ | 208,053 | $ | 142,530 | $ | 380,306 | $ | 313,796 | ||||||||||||
Indirect operating expenses, net of corporate income | 14,817 | 12,343 | 15,399 | 12,721 | 30,215 | 23,161 | ||||||||||||||||||
Investments and investment management expense | 1,073 | 1,137 | 1,034 | 1,290 | 2,107 | 2,116 | ||||||||||||||||||
Expensed acquisition, development and other pursuit costs, net of recoveries | 673 | 2,017 | 1,187 | (6,855 | ) | 1,860 | 2,732 | |||||||||||||||||
Interest expense, net | 44,590 | 43,722 | 45,573 | 47,987 | 90,164 | 86,255 | ||||||||||||||||||
(Gain) loss on extinguishment of debt, net | (7,749 | ) | 412 | — | — | (7,749 | ) | 412 | ||||||||||||||||
General and administrative expense | 10,335 | 10,162 | 10,468 | 10,715 | 20,803 | 19,386 | ||||||||||||||||||
Joint venture income | (13,806 | ) | (7,710 | ) | (34,566 | ) | (5,241 | ) | (48,371 | ) | (12,933 | ) | ||||||||||||
Depreciation expense | 118,627 | 110,395 | 116,853 | 114,084 | 235,480 | 216,762 | ||||||||||||||||||
Income tax expense | 1,293 | 58 | 15 | 9,332 | 1,308 | 70 | ||||||||||||||||||
Casualty and impairment (gain) loss, net | (17,114 | ) | — | 5,788 | — | (11,326 | ) | — | ||||||||||||||||
Gain on sale of real estate assets | (9,625 | ) | (60,945 | ) | (70,958 | ) | (24,470 | ) | (80,583 | ) | (60,945 | ) | ||||||||||||
Gain on sale of discontinued operations | — | — | — | — | — | (37,869 | ) | |||||||||||||||||
Income from discontinued operations | — | — | — | — | — | (310 | ) | |||||||||||||||||
NOI from real estate assets sold or held for sale, not classified as discontinued operations | (1,353 | ) | (6,240 | ) | (1,437 | ) | (3,540 | ) | (2,791 | ) | (12,522 | ) | ||||||||||||
NOI | $ | 314,014 | $ | 277,548 | $ | 297,409 | $ | 298,553 | $ | 611,423 | $ | 540,111 | ||||||||||||
Established: | ||||||||||||||||||||||||
New England | $ | 30,985 | $ | 30,286 | $ | 27,839 | $ | 30,499 | $ | 58,823 | $ | 59,211 | ||||||||||||
Metro NY/NJ | 67,880 | 65,955 | 65,109 | 67,486 | 132,989 | 129,272 | ||||||||||||||||||
Mid-Atlantic | 35,938 | 36,247 | 36,031 | 36,652 | 71,969 | 72,551 | ||||||||||||||||||
Pacific NW | 13,657 | 12,654 | 13,373 | 12,853 | 27,030 | 24,924 | ||||||||||||||||||
No. California | 52,635 | 47,129 | 49,734 | 47,645 | 102,369 | 91,752 | ||||||||||||||||||
So. California | 43,046 | 40,350 | 43,517 | 41,843 | 86,564 | 78,841 | ||||||||||||||||||
Total Established | 244,141 | 232,621 | 235,603 | 236,978 | 479,744 | 456,551 | ||||||||||||||||||
Other Stabilized | 36,536 | 25,600 | 34,818 | 36,734 | 71,353 | 47,070 | ||||||||||||||||||
Development/Redevelopment | 33,337 | 19,327 | 26,988 | 24,841 | 60,326 | 36,490 | ||||||||||||||||||
NOI | $ | 314,014 | $ | 277,548 | $ | 297,409 | $ | 298,553 | $ | 611,423 | $ | 540,111 | ||||||||||||
Q2 | Q2 | YTD | YTD | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Income from discontinued operations | $ | — | $ | — | $ | — | $ | 310 | ||||||||
Depreciation expense | — | — | — | — | ||||||||||||
NOI from discontinued operations | $ | — | $ | — | $ | — | $ | 310 | ||||||||
Revenue from real estate assets sold or held for sale, not classified as discontinued operations | $ | 2,285 | $ | 10,226 | $ | 4,809 | $ | 20,595 | ||||||||
Operating expenses from real estate assets sold or held for sale, not classified as discontinued operations | (932 | ) | (3,986 | ) | (2,018 | ) | (8,073 | ) | ||||||||
NOI from real estate assets sold or held for sale, not classified as discontinued operations | $ | 1,353 | $ | 6,240 | $ | 2,791 | $ | 12,522 | ||||||||
Low Range | High Range | ||||||||
Projected EPS (diluted) - Q3 2015 | $ | 1.54 | $ | 1.58 | |||||
Projected depreciation (real estate related) | 0.89 | 0.93 | |||||||
Projected gain on sale of operating communities | (0.42 | ) | (0.46 | ) | |||||
Projected FFO per share (diluted) - Q3 2015 | 2.01 | 2.05 | |||||||
Early extinguishment of debt | (0.13 | ) | (0.13 | ) | |||||
Edgewater operating and casualty losses | 0.01 | 0.01 | |||||||
Other non-core items | 0.01 | 0.01 | |||||||
Projected Core FFO per share (diluted) - Q3 2015 | $ | 1.90 | $ | 1.94 | |||||
Projected EPS (diluted) - Full Year 2015 | $ | 6.04 | $ | 6.18 | |||||
Projected depreciation (real estate related) | 3.53 | 3.67 | |||||||
Projected gain on sale of operating communities | (1.69 | ) | (1.83 | ) | |||||
Impairment due to casualty loss | 0.03 | 0.03 | |||||||
Projected FFO per share (diluted) - Full Year 2015 | $ | 7.91 | $ | 8.05 | |||||
Non recurring joint venture income and management fees | (0.21 | ) | (0.23 | ) | |||||
Edgewater operating losses and casualty gains | (0.05 | ) | (0.07 | ) | |||||
Income taxes | 0.05 | 0.07 | |||||||
Gain on sale of real estate | (0.07 | ) | (0.07 | ) | |||||
Early extinguishment of debt | (0.17 | ) | (0.17 | ) | |||||
Other non-core items | — | 0.02 | |||||||
Projected Core FFO per share (diluted) - Full Year 2015 | $ | 7.46 | $ | 7.60 | |||||
Q2 | Q2 | YTD | YTD | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Rental revenue (GAAP basis) | $ | 346,559 | $ | 330,861 | $ | 686,255 | $ | 656,412 | ||||||||
Concessions amortized | 268 | 1,452 | 649 | 3,021 | ||||||||||||
Concessions granted | (34 | ) | (993 | ) | (343 | ) | (2,444 | ) | ||||||||
Rental Revenue with Concessions | ||||||||||||||||
on a Cash Basis | $ | 346,793 | $ | 331,320 | $ | 686,561 | $ | 656,989 | ||||||||
% change -- GAAP revenue | 4.7 | % | 4.5 | % | ||||||||||||
% change -- cash revenue | 4.7 | % | 4.5 | % | ||||||||||||
Year To Date | |||
NOI | |||
NOI for Established Communities | $ | 479,744 | |
NOI for Other Stabilized Communities | 71,353 | ||
NOI for Development/Redevelopment Communities | 60,326 | ||
NOI for discontinued operations | — | ||
NOI from real estate assets sold or held for sale, not classified as discontinued operations | 2,791 | ||
Total NOI generated by real estate assets | 614,214 | ||
NOI on encumbered assets | 147,982 | ||
NOI on unencumbered assets | $ | 466,232 | |
Unencumbered NOI | 76 | % | |
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