AVALONBAY COMMUNITIES INC

Previous wording

•Net income attributable to common stockholders for the three months ended March 31, 2025 was $236,597,000, an increase of $63,148,000, or 36.4%, from the prior year period. The increase was primarily attributable to increases in real estate sales and related gains and an increase in NOI from communities over the prior year period.

Current wording

•Net income attributable to common stockholders for the three months ended June 30, 2025 was $268,665,000, an increase of $14,731,000, or 5.8%, from the prior year period. The increase was primarily attributable to increases in real estate sales and related gains and an increase in NOI from communities over the prior year period.

Previous wording

•Same Store NOI attributable to our apartment rental operations, including parking and other ancillary residential revenue ("Residential"), for the three months ended March 31, 2025 was $478,316,000, an increase of $12,025,000, or 2.6%, over the prior year period. The increase over the prior year period was due to an increase in Residential revenue of $20,294,000, or 3.0%, partially offset by an increase in Residential property operating expenses of $8,269,000, or 4.0%.

Current wording

•Same Store NOI attributable to our apartment rental operations, including parking and other ancillary residential ("Residential") revenue, for the three months ended June 30, 2025 was $477,180,000, an increase of $12,578,000, or 2.7%, over the prior year period. The increase over the prior year period was due to an increase in Residential revenue of $19,966,000, or 3.0%, partially offset by an increase in Residential property operating expenses of $7,388,000, or 3.6%.

Previous wording

•19 wholly-owned communities under construction, which are expected to contain 6,595 apartment homes with a projected total capitalized cost of $2,493,000,000.

Current wording

•20 wholly-owned communities under construction, which are expected to contain 7,299 apartment homes with a projected total capitalized cost of $2,780,000,000.

Previous wording

•Land or rights to land on which we expect to develop an additional 28 apartment communities that, if developed as expected, will contain 8,932 apartment homes.

Current wording

•Land or rights to land on which we expect to develop an additional 28 apartment communities that, if developed as expected, will contain 8,854 apartment homes.

Previous wording

First Quarter 2025 Real Estate Transactions Highlights

Current wording

Second Quarter 2025 Real Estate Transactions Highlights

Previous wording

•we acquired the remaining six apartment communities, in the Dallas-Fort Worth metropolitan area, containing 1,844 apartment homes, with the consideration comprised of a cash payment of $193,000,000 and the issuance of 1,060,000 DownREIT Units.

Current wording

•We acquired six apartment communities, in the Dallas-Fort Worth metropolitan area, containing 1,844 apartment homes for $415,579,000, with the consideration comprised of a cash payment of $193,000,000 and the issuance of 1,060,000 DownREIT Units.

Previous wording

•we sold Avalon Wesmont Station I & II, located in Wood-Ridge, NJ, containing 406 apartment homes and 18,000 square feet of commercial space for $161,500,000.

Current wording

•We sold two wholly-owned communities, Avalon Wesmont Station I & II, located in Wood-Ridge, NJ and containing 406 apartment homes and 18,000 square feet of commercial space, for $161,500,000, for a gain in accordance with GAAP of $99,636,000.

Previous wording

•Same Store is composed of consolidated communities where a comparison of operating results from the prior year to the current year is meaningful as these communities were owned and had stabilized occupancy as of the beginning of the prior year period. For the three month periods ended March 31, 2025 and 2024, Same Store communities are consolidated for financial reporting purposes, had stabilized occupancy as of January 1, 2024, are not conducting or are not probable to conduct substantial redevelopment activities and are not held for sale as of March 31, 2025 or probable for disposition to unrelated third parties within the current year. A community is considered to have stabilized occupancy at the earlier of (i) attainment of 90% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment.

Current wording

•Same Store is composed of consolidated communities where a comparison of operating results from the prior year to the current year is meaningful as these communities were owned and had stabilized occupancy as of the beginning of the prior year period. For the six month periods ended June 30, 2025 and 2024, Same Store communities are consolidated for financial reporting purposes, had stabilized occupancy as of January 1, 2024, are not conducting or are not probable to conduct substantial redevelopment activities and are not held for sale as of June 30, 2025 or probable for disposition to unrelated third parties within the current year. A community is considered to have stabilized occupancy at the earlier of (i) attainment of 90% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment.

Previous wording

Our results of operations are driven by our operating platform and are primarily affected by both overall and individual geographic market conditions and apartment fundamentals and are reflected in changes in Same Store NOI; NOI derived from acquisitions, development completions and development under construction and in lease-up; loss of NOI related to disposed communities; and capital market and financing activity. A comparison of our operating results for the three months ended March 31, 2025 and 2024 is as follows (unaudited, dollars in thousands).

Current wording

Our results of operations are driven by our operating platform and are primarily affected by both overall and individual geographic market conditions and apartment fundamentals and are reflected in changes in Same Store NOI; NOI derived from acquisitions, development completions and development under construction and in lease-up; loss of NOI related to disposed communities; and capital market and financing activity. A comparison of our operating results for the three and six months ended June 30, 2025 and 2024 is as follows (unaudited, dollars in thousands).

Previous wording

Net income attributable to common stockholders increased $63,148,000, or 36.4%, to $236,597,000 for the three months ended March 31, 2025, as compared to the prior year period, primarily due to increases in NOI from communities and real estate sales and related gains in the current year.

Current wording

Net income attributable to common stockholders increased $14,731,000, or 5.8%, to $268,665,000 and $77,879,000, or 18.2%, to $505,262,000 for the three and six months ended June 30, 2025, respectively, as compared to the prior year periods, primarily due to real estate sales and related gains in the current year and increases in NOI from communities.

Previous wording

NOI does not represent cash generated from operating activities in accordance with GAAP, and NOI should not be considered an alternative to net income as an indication of our performance. NOI should also not be considered an alternative to net cash flow from operating activities, as determined by GAAP, as a measure of liquidity, nor is NOI indicative of cash available to fund cash needs. Residential NOI represents results attributable to our apartment rental operations, including parking and other ancillary residential revenue. Reconciliations of NOI and Residential NOI for the three months ended March 31, 2025 and 2024 to net income for each period are as follows (unaudited, dollars in thousands):

Current wording

NOI does not represent cash generated from operating activities in accordance with GAAP, and NOI should not be considered an alternative to net income as an indication of our performance. NOI should also not be considered an alternative to net cash flow from operating activities, as determined by GAAP, as a measure of liquidity, nor is NOI indicative of cash available to fund cash needs. Residential NOI represents results attributable to our apartment rental operations, including parking and other ancillary residential revenue. Reconciliations of NOI and Residential NOI for the three and six months ended June 30, 2025 and 2024 to net income for each period are as follows (unaudited, dollars in thousands):

Previous wording

The Residential NOI changes for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 consist of changes in the following categories (unaudited, dollars in thousands):

Current wording

The Residential NOI changes for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 consist of changes in the following categories (unaudited, dollars in thousands):

Previous wording

The 2.6% increase in our Same Store Residential NOI for the three months ended March 31, 2025 is due to an increase in Residential revenue of $20,294,000, or 3.0%, partially offset by an increase in Residential property operating expenses of $8,269,000, or 4.0%, over the prior year period.

Current wording

The 2.7% increase in our Same Store Residential NOI for the three months ended June 30, 2025 is due to an increase in Residential revenue of $19,966,000, or 3.0%, partially offset by an increase in Residential property operating expenses of $7,388,000, or 3.6%, over the prior year period. The 2.6% increase in our Same Store Residential NOI for the six months ended June 30, 2025 is due to an increase in Residential revenue of $39,892,000, or 3.0%, partially offset by an increase in Residential property operating expenses of $15,522,000, or 3.8%, over the prior year period.

Previous wording

Rental and other income increased $33,074,000, or 4.7%, for the three months ended March 31, 2025, compared to the prior year period, primarily due to the increased rental revenue from our Same Store communities, discussed below.

Current wording

Rental and other income increased $34,390,000, or 4.7%, and $67,464,000, or 4.7%, for the three and six months ended June 30, 2025, respectively, compared to the prior year periods, due to the increased rental revenue from our stabilized operating communities, discussed below.

Previous wording

Consolidated Communities — The weighted average number of occupied apartment homes for consolidated communities increased to 80,703 apartment homes for the three months ended March 31, 2025, compared to 77,375 homes for the prior year period. The weighted average monthly residential revenue per occupied apartment home increased to $3,025 for the three months ended March 31, 2025, compared to $3,020 in the prior year period.

Current wording

Consolidated Communities — The weighted average number of occupied apartment homes for consolidated communities increased to 81,495 apartment homes for the six months ended June 30, 2025, compared to 77,215 homes for the prior year period. The weighted average monthly residential revenue per occupied apartment home decreased to $3,052 for the six months ended June 30, 2025, compared to $3,055 in the prior year period.

Previous wording

Same Store Communities — The following table presents the change in Same Store Residential revenue, including the attribution of the change between average revenue per occupied home and Economic Occupancy (as defined below) for the three months ended March 31, 2025 (unaudited, dollars in thousands).

Current wording

Same Store Communities — The following table presents the change in Same Store Residential revenue, including the attribution of the change between average revenue per occupied home and Economic Occupancy (as defined below) for the six months ended June 30, 2025 (unaudited, dollars in thousands).

Previous wording

Direct property operating expenses, excluding property taxes, increased $10,276,000, or 7.4%, for the three months ended March 31, 2025 compared to the prior year period, primarily due to the addition of newly developed apartment communities as well as increased Residential operating expenses at our Same Store communities as discussed below.

Current wording

Direct property operating expenses, excluding property taxes, increased $10,993,000, or 7.8%, and $21,269,000, or 7.6%, for the three and six months ended June 30, 2025, respectively, compared to the prior year periods, primarily due to the addition of newly developed and acquired apartment communities as well as increased Residential operating expenses at our Same Store communities as discussed below.

Previous wording

Same Store Residential direct property operating expenses, excluding property taxes, increased $7,568,000, or 5.8%, for the three months ended March 31, 2025, compared to the prior year period, primarily due to increased (i) repairs and maintenance costs, (ii) utility costs from our bulk internet offering, (iii) property insurance premiums and (iv) marketing costs from internet advertising.

Current wording

Same Store Residential direct property operating expenses, excluding property taxes, increased $5,684,000, or 4.4%, and $13,088,000, or 5.1%, for the three and six months ended June 30, 2025, respectively, compared to the prior year periods, primarily due to increased (i) repairs and maintenance costs, (ii) utility costs from our bulk internet offering, and (iii) payroll costs primarily from increased employee benefit costs and bonus achievement.

Previous wording

Property taxes increased $2,051,000, or 2.6%, for the three months ended March 31, 2025, compared to the prior year period, primarily due to increases for our Same Store Residential portfolio and the addition of newly developed and acquired apartment communities, partially offset by decreased property taxes from dispositions.

Current wording

Property taxes increased $4,975,000, or 6.1%, and $7,026,000, or 4.4%, for the three and six months ended June 30, 2025, respectively, compared to the prior year periods, primarily due to increases for our Same Store Residential portfolio and the addition of newly developed and acquired apartment communities, partially offset by decreased property taxes from dispositions.

Previous wording

Same Store Residential property taxes increased $701,000, or 0.9%, for the three months ended March 31, 2025, compared to the prior year period, due to increased assessments across the portfolio and the expiration of property tax incentive programs primarily at certain of our properties in New York City, partially offset by successful appeals in the current year period in excess of the prior year period.

Current wording

Same Store Residential property taxes increased $1,704,000, or 2.3%, and $2,434,000, or 1.6%, for the three and six months ended June 30, 2025, respectively, compared to the prior year periods, due to increased assessments across the portfolio and the expiration of property tax incentive programs primarily at certain of our properties in New York City, partially offset by decreased tax rates and/or successful tax appeals at certain of our properties in the current year period in excess of the prior year period.

Previous wording

Property management and other indirect operating expenses, net of corporate income increased $838,000, or 2.3%, for the three months ended March 31, 2025, compared to the prior year period, primarily due to increased costs related to investments in technology and process related spend for initiatives to improve future efficiency in services for residents and prospects.

Current wording

Property management and other indirect operating expenses, net of corporate income increased $1,190,000, or 1.6%, for the six months ended June 30, 2025, compared to the prior year period, due to increased costs related to investments in technology and process related spend for initiatives to improve future efficiency in services for residents and prospects, as well as higher compensation, partially offset by a decrease in advocacy costs.

Previous wording

Expensed transaction, development and other pursuit costs, net of recoveries includes costs incurred for write downs and abandonment of Development Rights and development pursuits not yet considered probable for development, as well as costs related to abandoned acquisition and disposition pursuits, offset by any recoveries of costs incurred. In periods of increased acquisition and pursuit activity, periods of economic downturn or when there is limited access to capital, these costs can be volatile and may vary significantly from year to year. In addition, the timing for potential recoveries will not always align with the timing for expensing an abandoned pursuit. Expensed transaction, development and other pursuit costs, net of recoveries, was $4,744,000 for the three months ended March 31, 2025, and $4,245,000 for the three months ended March 31, 2024. The amounts for 2025 and 2024 include a write-off of $3,668,000 and $1,600,000, respectively, for one development opportunity in each year that the Company determined is no longer probable.

Current wording

Expensed transaction, development and other pursuit costs, net of recoveries includes costs incurred for write downs and abandonment of Development Rights and development pursuits not yet considered probable for development, as well as costs related to abandoned acquisition and disposition pursuits, offset by any recoveries of costs incurred. In periods of increased acquisition and pursuit activity, periods of economic downturn or when there is limited access to capital, these costs can be volatile and may vary significantly from year to year. In addition, the timing for potential recoveries will not always align with the timing for expensing an abandoned pursuit. Expensed transaction, development and other pursuit costs, net of recoveries, was $2,493,000 and $7,237,000 for the three and six months ended June 30, 2025, respectively, and $1,417,000 and $5,662,000 for the three and six months ended June 30, 2024, respectively. The amounts for the six months ended June 30, 2025 and 2024 include a write-off of $3,668,000 and $1,600,000, respectively, for one development opportunity in each year that we determined is no longer probable.

Previous wording

Interest expense, netincreased $5,098,000, or 9.3%, for the three months ended March 31, 2025, compared to the prior year period. This category includes interest costs offset by capitalized interest pertaining to development and redevelopment activity, amortization of premium/discount on debt, interest income and any mark-to-market impact from derivatives not in qualifying hedge relationships. The increases for the three months ended March 31, 2025 are primarily due to increased effective interest expense for our unsecured indebtedness, increased commercial paper outstanding and decreases in interest income compared to the prior year period due to lower cash amounts invested and lower rates. The increases for the three months ended March 31, 2025 are also due to decreased capitalized interest, compared to the prior year period.

Current wording

Interest expense, netincreased $7,723,000, or 13.5%, and $12,821,000, or 11.5%, for the three and six months ended June 30, 2025, respectively, compared to the prior year periods. This category includes interest costs offset by capitalized interest pertaining to development and redevelopment activity, amortization of premium/discount on debt, interest income and any mark-to-market impact from derivatives not in qualifying hedge relationships. The increases for the three and six months ended June 30, 2025 are primarily due to increased effective interest expense for our unsecured indebtedness, increased commercial paper outstanding and decreases in interest income compared to the prior year periods due to lower cash amounts invested and lower rates. The increases for the three and six months ended June 30, 2025 are also due to decreased capitalized interest, compared to the prior year periods.

Previous wording

Depreciation expense increased $5,619,000, or 2.6%, for the three months ended March 31, 2025, compared to the prior year period, primarily due to the addition of newly developed and acquired apartment communities, partially offset by dispositions.

Current wording

Depreciation expense increased $24,807,000, or 12.0%, and $30,426,000, or 7.3%, for the three and six months ended June 30, 2025, respectively, compared to the prior year periods, primarily due to the addition of newly developed and acquired apartment communities, partially offset by dispositions.

Previous wording

Casualty and impairment loss for the three months ended March 31, 2024 was $2,935,000 for property and casualty damage to certain of our communities. The charge for the three months ended March 31, 2024 relates to flooding and water damage at communities in California from extensive rainfall and a fire at a community in New Jersey.

Current wording

Casualty and impairment loss for the three and six months ended June 30, 2025 was $858,000 and the loss for the six months ended June 30, 2024 was $2,935,000, which represents property and casualty damage to certain of our communities. The charge for the three and six months ended June 30, 2025 relates to damage from a water pipe break at a community in Massachusetts. The charge for the six months ended June 30, 2024 relates to flooding and resulting water damage at communities in California from extensive rainfall and a fire at a community in New Jersey.

Previous wording

Income from unconsolidated investments decreased $8,728,000 for the three months ended March 31, 2025, compared to the prior year period, primarily due to unrealized gains on our property technology investments in the prior year period as well as unrealized property technology investment losses in the current year period.

Current wording

Income from unconsolidated investments decreased $1,918,000 and $10,646,000 for the three and six months ended June 30, 2025, compared to the prior year periods, primarily due to unrealized losses for our investments in third-party property technology and sustainability investment funds in the current year periods and unrealized gains on our third-party property technology and sustainability fund investments in the prior year periods.

Previous wording

Structured Investment Program interest income increased $2,995,000 for the three months ended March 31, 2025, compared to the prior year period, primarily due to the ramp up of the SIP resulting in higher outstanding lending balances in the three months ended March 31, 2025, compared to the prior year period.

Current wording

Structured Investment Program interest income increased $2,981,000 and $5,976,000 for the three and six months ended June 30, 2025, compared to the prior year periods, primarily due to the increased amount funded in our SIP investments as of the six months ended June 30, 2025, compared to the prior year period.

Previous wording

Gain on sale of communities increased $56,539,000 for the three months ended March 31, 2025, compared to the prior year period. The amount of gain realized in a given period depends on many factors, including the number of communities sold, expected operating performance of the communities and the market conditions in the local area. For the three months ended March 31, 2025, we sold one wholly-owned community and recognized a gain of $56,469,000, with no sales in the three months ended March 31, 2024.

Current wording

Gain on sale of communities increased $30,901,000 and $87,440,000 for the three and six months ended June 30, 2025, compared to the prior year periods. The amount of gain realized in a given period depends on many factors, including the number of communities sold, expected operating performance of the communities and the market conditions in the local area. For the three and six months ended June 30, 2025, we sold two and three wholly-owned communities and recognized gains of $99,457,000 and $155,926,000, respectively. For the six months ended June 30, 2024, we sold three wholly-owned communities and recognized gains of $68,486,000.

Previous wording

(1)Amounts consist primarily of net unrealized losses (gains) on technology investments.

Current wording

(1)Amounts consist primarily of net unrealized losses (gains) on third-party property technology and sustainability fund investments.

Previous wording

(4)Comprised of gains on sale of non-operating real estate, as well as the imputed carry cost of for-sale residential condominiums at The Park Loggia. We compute this adjustment by multiplying the total capitalized cost of completed and unsold for-sale residential condominiums by our weighted average unsecured debt effective interest rate.

Current wording

(4)Amounts for the three and six months ended June 30, 2025 consist primarily of the gain on the sale of a development right. Amounts for the three and six months ended June 30, 2024 consist primarily of gains on sale of other non-operating real estate, as well as the imputed carry cost of for-sale residential condominiums at The Park Loggia. We compute this adjustment by multiplying the total capitalized cost of completed and unsold for-sale residential condominiums by our weighted average unsecured debt effective interest rate.

Previous wording

(5)Amounts for the three months ended March 31, 2025 include legal costs and/or payments/receipts associated with legal settlements.

Current wording

(5)Amounts for the three and six months ended June 30, 2025 include legal costs and legal settlements.

Previous wording

Factors affecting our liquidity and capital resources are our cash flows from operations, financing activities and investing activities (including dispositions) as well as general economic and market conditions. Cash flows from operations are determined by operating activities and factors including but not limited to (i) the number of apartment homes currently owned, (ii) rental rates, (iii) occupancy levels, (iv) uncollectible lease revenue levels or interruptions in collections caused by market conditions and (v) operating expenses with respect to apartment homes. The timing and type of capital markets activity in which we engage is affected by changes in the capital markets environment, such as changes in interest rates or the availability of cost-effective capital. Our plans for development, redevelopment, non-routine capital expenditure, acquisition and disposition activity are affected by market conditions and capital availability. We frequently review our liquidity needs, especially in periods with volatile market conditions, as well as the adequacy of cash flows from operations and other expected liquidity sources to meet these needs.

Current wording

Factors affecting our liquidity and capital resources are our cash flows from operations, financing activities and investing activities (including dispositions) as well as general economic and market conditions. Cash flows from operations are determined by operating activities and factors including but not limited to (i) the number of apartment homes currently owned, (ii) rental rates, (iii) occupancy levels, (iv) uncollectible lease revenue levels or interruptions in collections caused by market conditions (v) operating expenses and (vi) capital expenditures with respect to our communities. The timing and type of capital markets activity in which we engage is affected by changes in the capital markets environment, such as changes in interest rates or the availability of cost-effective capital. Our plans for development, redevelopment, non-routine capital expenditure, acquisition and disposition activity are affected by market conditions and capital availability. We frequently review our liquidity needs, especially in periods with volatile market conditions, as well as the adequacy of cash flows from operations and other expected liquidity sources to meet these needs.

Previous wording

We had cash, cash equivalents and restricted cash of $219,107,000 at March 31, 2025, a decrease of $47,969,000 from $267,076,000 at December 31, 2024. The following discussion relates to changes in cash, cash equivalents and restricted cash due to operating, investing and financing activities.

Current wording

We had cash, cash equivalents and restricted cash of $295,372,000 at June 30, 2025, an increase of $28,296,000 from $267,076,000 at December 31, 2024. The following discussion relates to changes in cash, cash equivalents and restricted cash due to operating, investing and financing activities.

Previous wording

•Net cash provided by operating activities increased primarily due to increases in NOI.

Current wording

•Net cash provided by operating activities increased primarily due to an increase in NOI from our stabilized operating communities as well as from our Development Communities.

Previous wording

•Net cash used in investing activities was primarily due to (i) the investment of $237,282,000 in the development and redevelopment of communities, (ii) acquisition of two wholly-owned communities for $187,362,000 and (iii) capital expenditures of $48,626,000 for our wholly-owned communities and non-real estate assets. These amounts were partially offset by net proceeds from the disposition of one wholly-owned community of $63,651,000.

Current wording

•Net cash used in investing activities was primarily due to (i) the investment of $549,366,000 in the development and redevelopment of communities, (ii) acquisition of eight wholly-owned communities for $384,495,000 and (iii) capital expenditures of $110,914,000 for our wholly-owned communities and non-real estate assets. These amounts were partially offset by net proceeds from the disposition of three wholly-owned communities of $228,058,000.

Previous wording

•Net cash used in financing activities was primarily due to payment of cash dividends in the amount of $243,678,000, partially offset by proceeds from the issuance of commercial paper in the amount of $224,942,000.

Current wording

•Net cash provided by financing activities was primarily due to proceeds from the issuance of commercial paper in the amount of $665,000,000, partially offset by the repayment of $525,000,000 of our 3.45% coupon unsecured notes at par upon maturity.

Previous wording

In April 2025, the Company entered into the Seventh Amended and Restated Revolving Loan Agreement with a syndicate of banks, which provides for a revolving variable rate unsecured credit facility, replacing our prior credit facility, dated September 27, 2022. The Amended Credit Facility (i) increased the borrowing capacity from $2,250,000,000 to $2,500,000,000, and (ii) extended the term of the Credit Facility from September 2026 to April 2030. The interest rate that would be applicable to borrowings under the Amended Credit Facility is 5.12% at April 30, 2025 and is composed of (i) the Secured Overnight Financing Rate ("SOFR"), applicable to the period of borrowing for a particular draw of funds from the facility (e.g., one month to maturity, three months to maturity, etc.), plus (ii) the current borrowing spread to SOFR of 0.705% per annum, assuming a daily SOFR borrowing rate. The borrowing spread to SOFR can vary from SOFR plus 0.65% to SOFR plus 1.40% per annum based upon the rating of our unsecured and unsubordinated long-term indebtedness. There is also an annual facility fee of 0.12% of the borrowing capacity under the facility, which can vary from 0.10% to 0.30% per annum based upon the rating of the Company's unsecured and unsubordinated long-term indebtedness. The Amended Credit Facility contains a sustainability-linked pricing component which provides for interest rate margin and commitment fee reductions or increases by meeting or missing targets related to environmental sustainability that can range from (0.025)% to 0.025% in the aggregate.

Current wording

In April 2025, we entered into the Seventh Amended and Restated Revolving Loan Agreement with a syndicate of banks (the “Credit Facility”), which replaces our prior credit facility, dated September 27, 2022. The amended and restated Credit Facility (i) increased the borrowing capacity under the Credit Facility from $2,250,000,000 to $2,500,000,000, and (ii) extended the term of the Credit Facility from September 2026 to April 2030. The interest rate that would be applicable to borrowings under the Credit Facility was 5.10% at July 31, 2025 and is composed of (i) the Secured Overnight Financing Rate ("SOFR"), applicable to the period of borrowing for a particular draw of funds from the Credit Facility (e.g., one month to maturity, three months to maturity, etc.), plus (ii) the current borrowing spread to SOFR of 0.705% per annum, assuming a daily SOFR borrowing rate. The borrowing spread to SOFR can vary from SOFR plus 0.65% to SOFR plus 1.40% based upon the rating of our unsecured senior notes. There is also an annual facility commitment fee of 0.12% of the borrowing capacity under the Credit Facility, which can vary from 0.10% to 0.30% based upon the rating of our unsecured senior notes. The Credit Facility contains a sustainability-linked pricing component which provides for interest rate margin and commitment fee reductions or increases related to certain environmental sustainability targets, specifically greenhouse gas emission reductions, with the adjustment determined annually. The most recent annual determination under the sustainability-linked pricing component occurred in July 2025, maintaining reductions of approximately 0.02% to the interest rate margin and 0.005% to the commitment fee due to our achievement of sustainability targets.

Previous wording

The availability on the Amended Credit Facility as of April 30, 2025 is as follows (dollars in thousands):

Current wording

The availability on the Credit Facility as of July 31, 2025 is as follows (dollars in thousands):

Previous wording

(1)In addition, we had $49,086 outstanding in additional letters of credit unrelated to the Amended Credit Facility as of April 30, 2025.

Current wording

(1)In addition, we had $55,387 outstanding in additional letters of credit unrelated to the Credit Facility as of July 31, 2025.

Previous wording

We have a Commercial Paper Program in which we may issue, unsecured commercial paper notes with maturities of less than one year. In April 2025, the Company increased the maximum amount of commercial paper that can be outstanding under its unsecured Commercial Paper Program from $500,000,000 to $1,000,000,000. The Commercial Paper Program is backstopped by our commitment to maintain available borrowing capacity under the Amended Credit Facility in an amount equal to actual borrowings under the Commercial Paper Program. As of April 30, 2025, we had $595,000,000 of borrowings outstanding under the Commercial Paper Program.

Current wording

We have a Commercial Paper Program in which we may issue unsecured commercial paper notes with maturities of less than one year. In April 2025, we increased the maximum amount of commercial paper notes that can be outstanding under the Commercial Paper Program from $500,000,000 to $1,000,000,000. The Commercial Paper Program is backstopped by our commitment to maintain available borrowing capacity under the Credit Facility in an amount equal to actual borrowings under the Commercial Paper Program. As of July 31, 2025, we had $530,400,000 of borrowings outstanding under the Commercial Paper Program.