AVALONBAY COMMUNITIES INC

Previous wording

Our principal financial goal is to increase long-term shareholder value through the development, redevelopment, acquisition, ownership, operation and asset management and, when appropriate, disposition of apartment communities in our markets. To help meet this goal, we regularly (i) monitor our investment allocation by geographic market and product type, (ii) develop, redevelop and acquire interests in apartment communities in our selected markets, (iii) efficiently operate our communities to maximize resident satisfaction and shareholder return, (iv) selectively sell apartment communities that no longer meet our long term strategy or when opportunities are presented to realize a portion of the value created through our investment and redeploy the proceeds from those sales and (v) maintain a capital structure that we believe is aligned with our business risks and allows us to maintain continuous access to cost-effective capital. We pursue our development, redevelopment, investment and operating activities with the purpose of "Creating a Better Way to Live."

Current wording

Our principal financial goal is to increase long-term shareholder value through the development, redevelopment, acquisition, ownership, operation and asset management and, when appropriate, disposition of apartment communities in our markets. To help meet this goal, subject to the restrictions in the Merger Agreement (defined below), we regularly (i) monitor our investment allocation by geographic market and product type, (ii) develop, redevelop and acquire interests in apartment communities in our selected markets, (iii) efficiently operate our communities to maximize resident satisfaction and shareholder return, (iv) selectively sell apartment communities that no longer meet our long term strategy or when opportunities are presented to realize a portion of the value created through our investment and redeploy the proceeds from those sales and (v) maintain a capital structure that we believe is aligned with our business risks and allows us to maintain continuous access to cost-effective capital. We pursue our development, redevelopment, investment and operating activities with the purpose of "Creating a Better Way to Live."

Previous wording

•Net income attributable to common stockholders for the three months ended March 31, 2026 was $325,730,000, an increase of $89,133,000, or 37.7%, over the prior year period. The increase was primarily attributable to an increase in gains from real estate sales and NOI from communities, partially offset by an increase in depreciation expense from newly acquired or developed communities.

Current wording

•Net income attributable to common stockholders for the three months ended June 30, 2026 was $155,720,000, a decrease of $112,945,000, or 42.0%, over the prior year period. The decrease was primarily attributable to a decrease in gains from real estate sales and an increase in expensed transaction, development and other pursuit costs, net of recoveries, driven primarily by costs related to the proposed Merger.

Previous wording

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

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, 2026 was $488,552,000, an increase of $4,824,000, or 1.0%, over the prior year period. The increase was primarily attributable to an increase in Residential revenue of $10,958,000, or 1.6%, partially offset by an increase in Residential property operating expenses of $6,134,000, or 2.9%.

Previous wording

•Other Stabilized Residential NOI, for the three months ended March 31, 2026 was $19,014,000, an increase of $15,713,000, over the prior year period due to newly acquired and recently completed Development communities.

Current wording

•Other Stabilized Residential NOI for the three months ended June 30, 2026 was $19,549,000, an increase of $9,275,000, over the prior year period due to newly acquired and recently completed Development communities.

Previous wording

•25 wholly-owned communities under construction, which are expected to contain 8,673 apartment homes with a projected total capitalized cost of $3,390,000,000.

Current wording

•27 wholly-owned communities under construction, which are expected to contain 9,064 apartment homes with a projected total capitalized cost of $3,526,000,000.

Previous wording

•Land or rights to land on which we expect to develop an additional 30 apartment communities that, if developed as expected, will contain 9,866 apartment homes.

Current wording

•Land or rights to land on which we expect to develop an additional 31 apartment communities that, if developed as expected, will contain 9,997 apartment homes.

Previous wording

First Quarter 2026 Real Estate Transactions Highlights

Current wording

Second Quarter 2026 Real Estate Transaction Highlights

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 respective prior year period. For the three month periods ended March 31, 2026 and 2025, Same Store communities are consolidated for financial reporting purposes, had stabilized occupancy as of January 1, 2025, are not conducting or expected to conduct substantial redevelopment activities and are not held for sale as of March 31, 2026 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 respective prior year period. For the six month periods ended June 30, 2026 and 2025, Same Store communities are consolidated for financial reporting purposes, had stabilized occupancy as of January 1, 2025, are not conducting or expected to conduct substantial redevelopment activities and are not held for sale as of June 30, 2026 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 also affected by national and local market conditions 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, 2026 and 2025 is as follows (unaudited, dollars in thousands).

Current wording

Our results of operations are driven by our operating platform and are also affected by national and local market conditions 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, 2026 and 2025 is as follows (unaudited, dollars in thousands).

Previous wording

Net income attributable to common stockholders increased $89,133,000, or 37.7%, to $325,730,000 for the three months ended March 31, 2026, as compared to the prior year period, primarily due to an increase in gains from real estate sales and NOI from communities, partially offset by (i) an increase in depreciation expense from newly acquired or developed communities and (ii) increased interest expense, net over the prior year period due to a higher effective rate for our unsecured indebtedness and increased commercial paper outstanding.

Current wording

Net income attributable to common stockholders decreased $112,945,000, or 42%, to $155,720,000 and $23,812,000, or 4.7%, to $481,450,000 for the three and six months ended June 30, 2026, respectively, as compared to the prior year periods. The decrease for the three months ended June 30, 2026 is primarily due to a decrease in gains from real estate sales and an increase in expensed transaction, development and other pursuit costs, net of recoveries, related to costs for the proposed Merger. The decrease for the six months ended June 30, 2026 is primarily due to (i) increased interest expense, net, over the prior year period due to a higher effective rate for our unsecured indebtedness and increased commercial paper outstanding, (ii) an increase in depreciation expense from newly acquired or developed communities, and (iii) an increase in expensed transaction, development and other pursuit costs, net of recoveries, related to costs for the proposed Merger.

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, 2026 and 2025 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, 2026 and 2025 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, 2026 compared to the three months ended March 31, 2025 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, 2026 compared to the three and six months ended June 30, 2025 consist of changes in the following categories (unaudited, dollars in thousands):

Previous wording

The 0.2% increase in Same Store Residential NOI for the three months ended March 31, 2026 is due to an increase in Residential revenue of $11,053,000, or 1.6%, partially offset by an increase in Residential property operating expenses of $9,966,000, or 4.7%, over the prior year period.

Current wording

The 1.0% increase in Same Store Residential NOI for the three months ended June 30, 2026 is due to an increase in Residential revenue of $10,958,000, or 1.6%, partially offset by an increase in Residential property operating expenses of $6,134,000, or 2.9%, over the prior year period. The 0.6% increase in our Same Store Residential NOI for the six months ended June 30, 2026 is due to an increase in Residential revenue of $21,953,000, or 1.6%, partially offset by an increase in Residential property operating expenses of $16,053,000, or 3.7%, over the prior year period.

Previous wording

Rental and other income increased $24,308,000, or 3.3%, for the three months ended March 31, 2026, compared to the prior year period, primarily due to an increase in rental revenue from our stabilized operating communities, discussed below.

Current wording

Rental and other income increased $17,385,000, or 2.3%, and $41,693,000, or 2.8%, for the three and six months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to an increase in 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 84,277 apartment homes for the three months ended March 31, 2026, compared to 80,703 apartment homes for the prior year period. The weighted average monthly Residential revenue per occupied apartment home was $2,991 for the three months ended March 31, 2026, 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 84,608 apartment homes for the six months ended June 30, 2026, compared to 81,495 apartment homes for the prior year period. The weighted average monthly Residential revenue per occupied apartment home was $3,004 for the six months ended June 30, 2026, compared to $3,047 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, 2026 (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, 2026 (unaudited, dollars in thousands).

Previous wording

Direct property operating expenses, excluding property taxes, increased $9,299,000, or 6.2%, for the three months ended March 31, 2026, compared to the prior year period, 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.

Current wording

Direct property operating expenses, excluding property taxes, increased $4,311,000, or 2.9%, and $13,610,000, or 4.5%, for the three and six months ended June 30, 2026, 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, partially offset by decreased operating expenses from dispositions.

Previous wording

Same Store Residential direct property operating expenses, excluding property taxes, increased $5,376,000, or 3.9%, for the three months ended March 31, 2026, compared to the prior year period, primarily from increased (i) utility costs due to higher rates for electricity and water/sewer, and (ii) repairs and maintenance costs due to the continued deployment of smart home technology and increased cleaning and third-party maintenance costs.

Current wording

Same Store Residential direct property operating expenses, excluding property taxes, increased $3,495,000, or 2.6%, and $8,833,000, or 3.2%, for the three and six months ended June 30, 2026, respectively, compared to the prior year periods, primarily from increased (i) repairs and maintenance costs due to the continued deployment of smart home technology and increased cleaning costs, and (ii) utility costs due to higher energy costs driven by higher rates and increased consumption and increased trash and recycling costs.

Previous wording

Property taxes increased $8,278,000, or 10.1%, for the three months ended March 31, 2026, compared to the prior year period, primarily due to the addition of newly developed and acquired apartment communities and increases for our Same Store Residential portfolio, partially offset by decreased property taxes from dispositions.

Current wording

Property taxes increased $4,083,000, or 4.7%, and $12,361,000, or 7.4%, for the three and six months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to increases for our Same Store Residential portfolio as discussed below 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 $4,590,000, or 6.0%, for the three months ended March 31, 2026, compared to the prior year period, primarily due to (i) increased rates and assessments across the portfolio, (ii) a greater benefit from tax appeals realized in the prior year period and (iii) the expiration of property tax incentive programs primarily at certain New York City properties.

Current wording

Same Store Residential property taxes increased $2,639,000, or 3.4%, and $7,220,000, or 4.7%, for the three and six months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to (i) increased rates and assessments across the portfolio, (ii) a greater benefit from tax appeals realized in the prior year periods and (iii) the expiration of property tax incentive programs primarily at certain New York City properties.

Previous wording

Property management and other indirect operating expenses, net of corporate income increased $2,090,000, or 5.5%, for the three months ended March 31, 2026, compared to the prior year period, primarily due to advocacy costs in the current year period, partially offset by a decrease in consulting costs for strategic initiatives.

Current wording

Property management and other indirect operating expenses, net of corporate income increased $518,000, or 1.3%, and $2,608,000, or 3.4%, for the three and six months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to increased advocacy costs in the current year periods, partially offset by a decrease in consulting costs for strategic initiatives.

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 may vary significantly from year to year. In addition, the timing for recoveries will not always align with the timing for expensing an abandoned pursuit. Expensed transaction, development and other pursuit costs, net of recoveries, was $3,416,000 and $4,744,000 for the three months ended March 31, 2026 and 2025, respectively. The amount for the three months ended March 31, 2025 includes a write-off of $3,668,000 for one development opportunity that we determined was no longer probable.

Current wording

Expensed transaction, development and other pursuit costs, net of recoveries includes write downs and costs related to the abandonment of Development Rights, development pursuits not yet considered probable for development, abandoned acquisition and disposition pursuits, and costs associated with the proposed Merger, offset by 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 may vary significantly from year to year. In addition, the timing for recoveries will not always align with the timing for expensing an abandoned pursuit. Expensed transaction, development and other pursuit costs, net of recoveries, was $19,976,000 and $23,392,000 for the three and six months ended June 30, 2026, respectively and $2,493,000 and $7,237,000 for the three and six months ended June 30, 2025, respectively. The amount for the three months ended June 30, 2026 includes costs of $12,367,000 associated with the proposed Merger with Equity Residential (see Note 1, "Organization, Basis of Presentation and Significant Accounting Policies," of the Condensed Consolidated Financial Statements for further discussion of the Merger) and a write-off of $4,545,000 for one development opportunity that we determined was no longer probable. The amount for the six months ended June 30, 2025 includes a write-off of $3,668,000 for one development opportunity that we determined was no longer probable.

Previous wording

Interest expense, netincreased $11,625,000, or 19.4%, for the three months ended March 31, 2026, compared to the prior year period. This category includes interest costs offset by interest capitalized for development and redevelopment activities, amortization of premium/discount on debt and any deferred gains or losses from our hedging activity, interest income and any mark-to-market impact from derivatives not in qualifying hedge relationships. The increase for the three months ended March 31, 2026 is primarily due to higher effective interest expense for our unsecured indebtedness and increased commercial paper outstanding, partially offset by increased capitalized interest compared to the prior year period.

Current wording

Interest expense, netincreased $5,269,000, or 8.1%, and $16,894,000, or 13.6%, for the three and six months ended June 30, 2026, respectively, compared to the prior year periods. This category includes interest costs offset by interest capitalized for development and redevelopment activities, amortization of premium/discount on debt and any deferred gains or losses from our hedging activity, 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, 2026 are primarily due to higher effective interest rates for our unsecured indebtedness and increased commercial paper outstanding, partially offset by increased capitalized interest compared to the prior year periods.

Previous wording

Depreciation expense increased $15,216,000, or 7.0%, for the three months ended March 31, 2026, 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 $1,245,000, or 0.5%, and $16,461,000, or 3.7%, for the three and six months ended June 30, 2026, 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

General and administrative expense increased $2,297,000, or 11.6%, for the three months ended March 31, 2026, compared to the prior year period, primarily due to an increase in legal costs and settlements and higher severance costs.

Current wording

General and administrative expense increased $4,140,000, or 18.0%, and $6,437,000, or 15.0%, for the three and six months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to an increase in legal costs and settlements and software licensing fees.

Previous wording

Casualty and impairment loss for the three months ended March 31, 2026 was $4,619,000, which represents property damage and emergency response at certain of our communities resulting from casualty events. These losses relate to damage from a water pipe break at a community in New Jersey and damage at communities throughout the portfolio from winter storms.

Current wording

Casualty and impairment loss for the six months ended June 30, 2026 was $4,619,000 and $858,000 for the three and six months ended June 30, 2025, which represents property damage and emergency response at certain of our communities resulting from casualty events. The losses for the six months ended June 30, 2026 relate to damage from a water pipe break at a community in New Jersey and damage at communities throughout the portfolio from winter storms. The losses for the three and six months ended June 30, 2025 relate to damage from a water pipe break at a community in Massachusetts.

Previous wording

Loss from unconsolidated investments increased $5,528,000 for the three months ended March 31, 2026, compared to the prior year period, primarily due to a non‑cash write down of one property technology investment.

Current wording

Income (loss) from unconsolidated investments increased $8,699,000 and $3,171,000 for the three and six months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to unrealized gains on property technology and sustainability fund investments.

Previous wording

Structured Investment Program interest income increased $1,368,000 for the three months ended March 31, 2026, compared to the prior year period, primarily due to the increased principal amount funded in our SIP investments.

Current wording

Structured Investment Program interest income increased $767,000 and $2,135,000 for the three and six months ended June 30, 2026, respectively, compared to the prior year periods, primarily due to the increased principal amount funded in our SIP investments.

Previous wording

Gain on sale of communities increased $123,443,000 for the three months ended March 31, 2026, compared to the prior year period. The amount of gain realized in a particular 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, 2026, we sold three wholly-owned communities and recognized gains of $179,912,000. For the three months ended March 31, 2025, we sold one wholly-owned community and recognized a gain of $56,469,000.

Current wording

(Loss) gain on sale of communities decreased $99,795,000 for the three months ended June 30, 2026 and increased $23,648,000 for the six months ended June 30, 2026 compared to the prior year periods. The amount of gain realized in a particular 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 six months ended June 30, 2026, we sold three wholly-owned communities and recognized gains of $179,574,000. For the three and six months ended June 30, 2025, we sold two and three wholly-owned communities, respectively and recognized a gain of $99,457,000 and $155,926,000, respectively.

Previous wording

(1)Amounts for the three months ended March 31, 2026 consist primarily of unrealized losses on property technology and sustainability fund investments, as well as the distribution from an unconsolidated real estate venture. The amount for three months ended March 31, 2025 consists primarily of unrealized losses on property technology and sustainability fund investments.

Current wording

(1)Amounts for the three and six months ended June 30, 2026 consist primarily of unrealized gains on property technology and sustainability fund investments, as well as distributions from an unconsolidated real estate venture. Amounts for three and six months ended June 30, 2025 consists primarily of unrealized losses on property technology and sustainability fund investments.

Previous wording

(3)Amount for the three months ended March 31, 2025 includes a write-off of $3,668 for one development opportunity that we determined was no longer probable.

Current wording

(3)Amount for the three months ended June 30, 2026 includes costs related to the proposed Merger with Equity Residential of $12,367 and a write-off of $4,545 for one development opportunity that we determined was no longer probable. Amount for the six months ended June 30, 2025 includes a write-off of $3,668 for one development opportunity that we determined was no longer probable.

Previous wording

We employ a disciplined approach to our liquidity and capital management. When we source capital, we take into account both our view of the most cost-effective alternative available and our desire to maintain a balance sheet that provides us with flexibility. Our principal focus on near-term and intermediate-term liquidity is to ensure we have adequate capital to fund:

Current wording

We employ a disciplined approach to our liquidity and capital management. When we source capital, we take into account both our view of the most cost-effective alternative available and our desire to maintain a balance sheet that provides us with flexibility. The following discussion regarding our liquidity and capital resources is subject in all cases to applicable restrictions in the Merger Agreement. Our principal focus on near-term and intermediate-term liquidity is to ensure we have adequate capital to fund:

Previous wording

We had cash, cash equivalents and restricted cash of $291,094,000 at March 31, 2026, a decrease of $61,989,000 from $353,083,000 at December 31, 2025. 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 $246,118,000 at June 30, 2026, a decrease of $106,965,000 from $353,083,000 at December 31, 2025. 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 an increase in NOI from our stabilized operating communities as well as from our Development communities.

Current wording

•Net cash provided by operating activities decreased primarily due to an increase in interest expense and timing of working capital, partially offset by an increase in NOI from our stabilized operating communities as well as from our Development communities.

Previous wording

•Net cash used in investing activities decreased primarily due to (i) an increase in net proceeds from the disposition of real estate assets and (ii) a decrease in the acquisition of real estate assets from the prior year period, partially offset by increased investment in the development and redevelopment of apartment communities.

Current wording

•Net cash used in investing activities decreased primarily due to (i) a decrease in the acquisition of real estate assets from the prior year period and (ii) an increase in net proceeds from the disposition of real estate assets, partially offset by increased investment in the development and redevelopment of apartment communities.

Previous wording

•Net cash used in financing activities increased primarily due to (i) the repurchase of 1,130,336 shares of common stock at an average price of $175.59 per share for a total purchase price including fees of $198,480,000 in the current year period and (ii) a decrease in net borrowings under our Commercial Paper Program over the prior year period.

Current wording

•Net cash used in financing activities was primarily due to (i) a decrease in net borrowings under our Commercial Paper Program from the prior year period and (ii) the repurchase of 1,130,336 shares of common stock at an average price of $175.59 per share for a total purchase price including fees of $198,480,000 in the current year period, and was partially offset by the issuance of 2,760,000 shares of common stock through the settlement of forward contracts for proceeds of $607,433,000.

Previous wording

We have a $2,500,000,000 revolving variable rate unsecured credit facility with a syndicate of banks which matures in April 2030. The interest rate that would be applicable to borrowings under the Credit Facility was 4.33% at May 5, 2026 and is composed of (i) 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.

Current wording

We have a $2,500,000,000 revolving variable rate unsecured credit facility with a syndicate of banks which matures in April 2030. The interest rate that would be applicable to borrowings under the Credit Facility was 4.35% at July 24, 2026 and is composed of (i) 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

(1)In addition, we had $51,574 outstanding in additional letters of credit unrelated to the Credit Facility as of May 5, 2026.

Current wording

(1)In addition, we had $57,072 outstanding in additional letters of credit unrelated to the Credit Facility as of July 24, 2026.

Previous wording

We have a Commercial Paper Program with a maximum amount of commercial paper notes that can be outstanding at any one time not to exceed $1,000,000,000. Under the terms of the Commercial Paper Program, we may issue unsecured commercial paper notes with maturities of less than one year. 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 May 5, 2026, we had $910,000,000 of borrowings outstanding under the Commercial Paper Program.

Current wording

We have a Commercial Paper Program with a maximum amount of commercial paper notes that can be outstanding at any one time not to exceed $1,000,000,000. Under the terms of the Commercial Paper Program, we may issue unsecured commercial paper notes with maturities of less than one year. 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 24, 2026, we had $930,000,000 of borrowings outstanding under the Commercial Paper Program.

Previous wording

Under our continuous equity program (the "CEP"), we may sell (and/or enter into forward sale agreements for the sale of) up to $1,000,000,000 of our common stock from time to time. During the three months ended March 31, 2026 and through May 5, 2026, we had no sales under the CEP. As of May 5, 2026, we had $623,997,000 remaining authorized for issuance under the program.

Current wording

Under our continuous equity program (the "CEP"), we may sell (and/or enter into forward sale agreements for the sale of) up to $1,000,000,000 of our common stock from time to time. During the three and six months ended June 30, 2026 we had no sales under the CEP. In connection with the pending Merger, the CEP was suspended as of the date of the Merger Agreement, and no sales were made under the CEP subsequent to June 30, 2026.