July 27, 2006 - EX-99.2 - 8-K: Current report filing | AvalonBay Communities, Inc. (AVB)

AvalonBay Communities, Inc.


For Immediate News Release		Exhibit 99.2
July 26, 2006

AVALONBAY COMMUNITIES, INC. ANNOUNCES
SECOND QUARTER 2006 OPERATING RESULTS

(Alexandria, VA) AvalonBay Communities, Inc. (NYSE: AVB) reported today that Net Income Available to Common Stockholders for the quarter ended June 30, 2006 was $67,794,000. This resulted in Earnings per Share diluted (EPS) of $0.90 for the quarter ended June 30, 2006, compared to $0.74 for the comparable period of 2005, a per share increase of 21.6%. For the six months ended June 30, 2006, EPS was $2.39 compared to $1.65 for the comparable period of 2005, a per share increase of 44.8%. These increases are primarily attributable to the timing and volume of gains on the sale of assets in 2006 as compared to 2005, coupled with growth in income from existing and newly developed communities.

Funds from Operations attributable to common stockholders diluted (FFO) for the quarter ended June 30, 2006 was $77,510,000 or $1.03 per share compared to $72,325,000, or $0.97 per share for the comparable period of 2005, a per share increase of 6.2%. Prior year FFO per share (for the quarter ended June 30, 2005) includes several non-routine items totaling $0.04 per share. Adjusting for these non-routine items, FFO per share increased 10.8% during the quarter ended June 30, 2006 as compared to 2005, driven primarily by improved community operating results and contributions from newly developed communities.

FFO per share for the six months ended June 30, 2006 increased by 13.0% to $2.18 from $1.93 for the comparable period of 2005. FFO per share for the six months ended June 30, 2006 includes $0.17 per share related to the sale of a land parcel. FFO per share for the six months ended June 30, 2005 includes several non-routine items totaling $0.11 per share, including the $0.04 discussed above. Adjusting for these non-routine items in both six-month periods, FFO per share increased 10.4%, driven primarily by improved community operating results and contributions from newly developed communities.

Commenting on the Companys results, Tim Naughton, President, said, Our second quarter results were driven in large part by strong operating performance, as same-store NOI increased over 8%. Steady job growth and low housing affordability are driving rental housing demand while new supply continues to be delivered at a modest rate. Solid fundamentals are translating into improved operating performance, such that we have raised the mid-point of our full year financial outlook for FFO by $0.08 to a range of $4.28 to $4.38 per share.

Operating Results for the Quarter Ended June 30, 2006 Compared to the Quarter Ended June 30, 2005

For the Company, including discontinued operations, total revenue increased by $7,903,000, or 4.6% to $180,832,000. For Established Communities, rental revenue increased 6.6%, comprised of an increase in Average Rental Rates of 5.8% and an increase in Economic Occupancy of 0.8%. As a result, total revenue for Established Communities increased $8,562,000 to $138,448,000. Operating expenses for Established Communities increased $1,440,000 or 3.5% to $43,015,000. Accordingly, Net Operating Income (NOI) for Established Communities increased by $7,122,000 or 8.1%, to $95,433,000.

The following table reflects the percentage changes in rental revenue, operating expenses and NOI for Established Communities from the second quarter of 2005 to the second quarter of 2006:

2Q 06 Compared to 2Q 05


	Rental			Operating						% of
	Revenue			Expenses			NOI			NOI (1)
Northeast		5.0	%		3.4	%		5.7	%		42.5	%
Mid-Atlantic		8.2	%		3.5	%		10.3	%		17.5	%
Midwest		1.2	%		5.4	%		(1.1	%)		2.2	%
Pacific NW		9.9	%		8.0	%		10.9	%		4.4	%
No. California		7.5	%		4.4	%		8.8	%		21.6	%
So. California		6.6	%		(2.4	%)		10.5	%		11.8	%

Total		6.6	%		3.5	%		8.1	%		100.0	%


(1)		Total represents each regions % of total NOI from the Company, including discontinued operations.

Cash concessions are recognized in accordance with Generally Accepted Accounting Principles (GAAP) and are amortized over the approximate lease term, which is generally one year. The following table reflects the percentage changes in rental revenue on a GAAP basis and Rental Revenue with Concessions on a Cash Basis for our Established Communities:


	2Q 06 vs 2Q 05
GAAP Rental Revenue		6.6	%

Rental Revenue with Concessions on a Cash Basis		7.6	%

Operating Results for the Six Months Ended June 30, 2006 Compared to the Prior Year Period

For the Company, including discontinued operations, total revenue increased by $14,689,000, or 4.3% to $357,620,000. For Established Communities, rental revenue increased 6.4%, comprised of an increase in Average Rental Rates of 5.4% and an increase in Economic Occupancy of 1.0%. As a result, total revenue for Established Communities increased $16,364,000 to $273,936,000, and operating expenses for Established Communities increased $2,618,000 or 3.2% to $84,913,000. Accordingly, NOI for Established Communities increased by $13,746,000 or 7.8%, to $189,023,000.

The following table reflects the percentage changes in rental revenue, operating expenses and NOI for Established Communities for the six months ended June 30, 2006 as compared to the six months ended June 30, 2005:

YTD 2006 Compared to YTD 2005


	Rental			Operating						% of
	Revenue			Expenses			NOI			NOI (1)
Northeast		4.7	%		4.6	%		4.8	%		42.2	%
Mid-Atlantic		8.3	%		1.5	%		11.3	%		17.7	%
Midwest		0.9	%		4.1	%		(0.9	%)		2.2	%
Pacific NW		8.9	%		7.9	%		9.3	%		4.5	%
No. California		7.1	%		2.8	%		9.1	%		21.9	%
So. California		6.6	%		(1.5	%)		10.1	%		11.5	%

Total		6.4	%		3.2	%		7.8	%		100.0	%


(1)		Total represents each regions % of total NOI from the Company, including discontinued operations.

Development and Redevelopment Activity

The Company completed development of Avalon Pines II during the second quarter of 2006 for a Total Capital Cost of $25,100,000. Avalon Pines II is the second phase of a multi-phase apartment community containing an aggregate of 450 apartment homes that were completed for a Total Capital Cost of $73,200,000.

In addition, the Company commenced construction of two communities during the second quarter of 2006: Avalon at Dublin Station I, a mid-rise community located at the BART station in Dublin, CA and Avalon at Lexington Hills, a garden-style community located in Lexington, MA. These two communities are expected to contain an aggregate of 692 apartment homes when completed for a Total Capital Cost of $172,000,000.

The Company completed the redevelopment of Avalon at Fairway Hills III located in Columbia, MD. The redevelopment of Avalon at Fairway Hills III, a garden-style community containing 336 apartment homes, was completed for a Total Capital Cost of $6,000,000, excluding costs incurred prior to redevelopment.

The Company recently determined that soil at its Avalon Lyndhurst development site, located in Lyndhurst, NJ, was contaminated from imported fill delivered to the site by third parties. The contaminants exceeded allowable levels for residential use under New Jersey state and local regulations, and the Company is in the process of remediating the site as required. As a result, the Company estimates that the cost to complete construction of this community, including costs associated with construction delays, may increase by approximately $10,000,000. The Company is pursuing the recovery of these additional costs through its insurance as well as the third parties involved, but no assurance can be given as to the amount or timing of reimbursements to the Company.

Disposition Activity

In April 2006, the Company sold Avalon Corners, located in Stamford, CT. This community contains 195 apartment homes and was sold for a price of $60,200,000. This resulted in a GAAP gain of $31,992,000 and an Economic Gain of $26,859,000. The Unleveraged IRR over an approximate eight-year holding period was 16.9%. The buyer of this asset intends to continue to operate this community as rental apartments.

Investment Management Fund Activity

During the second quarter of 2006, AvalonBay Value Added Fund, L.P. (the Fund), the private, discretionary investment vehicle in which the Company holds an equity interest of approximately 15%, acquired one community. Avalon at Aberdeen Station, located in Aberdeen, NJ, was acquired for a purchase price of $57,600,000. Avalon at Aberdeen Station is a garden-style community containing 290 apartment homes.

In July 2006, the Fund acquired The Springs, located in Corona, CA, part of the Inland Empire, for a purchase price of $47,120,000. The Springs is a garden-style community containing 320 apartment homes.

Financing, Liquidity and Balance Sheet Statistics

As of June 30, 2006, the Company had $6,000,000 outstanding under its $500,000,000 unsecured credit facility. Leverage, calculated as total debt as a percentage of Total Market Capitalization, was 21.9% at June 30, 2006. Unencumbered NOI for the six months ended June 30, 2006 was approximately 85% and Interest Coverage for the second quarter of 2006 was 3.7 times.

In July 2006, the Company repaid $150,000,000 of unsecured notes with an annual interest rate of 6.8%, along with any unpaid interest, pursuant to their scheduled maturity.

Third Quarter and Full Year Outlook

The Company expects EPS in the range of $0.49 to $0.53 for the third quarter of 2006. Based on changes to the Companys disposition plan, the Company is revising its projected EPS to a range of $3.68 to $3.78 for the full year 2006.

Strong apartment fundamentals in the Companys markets drove revenue and NOI growth, resulting in better than expected operating results for the second quarter of 2006. These positive trends are continuing into July 2006. As such, the Company expects Projected FFO per share in the range of $1.04 to $1.08 for the third quarter of 2006. In addition, the Company expects Projected NOI growth for Established Communities of 8% to 9% for the full year 2006. As such, the Company is increasing its outlook for Projected FFO per share to a range of $4.28 to $4.38 for the full year 2006.

Other Matters

The Company will hold a conference call on July 27, 2006 at 1:00 PM EDT to review and answer questions about its second quarter results, the Attachments (described below) and related matters. To participate on the call, dial 1-877-510-2397 domestically and 1-706-634-5877 internationally.

To hear a replay of the call, which will be available from July 27, 2006 at 3:00 PM EDT until August 3, 2006 at 11:59 PM EDT, dial 1-800-642-1687 domestically and 1-706-645-9291 internationally, and use Access Code: 1551386.

A webcast of the conference call will also be available at http://www.avalonbay.com/earnings, and an on-line playback of the webcast will be available for at least 30 days following the call.

The Company produces Earnings Release Attachments (the Attachments) that provide detailed information regarding operating, development, redevelopment, disposition and acquisition activity. These Attachments are considered a part of this earnings release and are available in full with this earnings release via the Companys website at http://www.avalonbay.com/earnings and through e-mail distribution. To receive future press releases via e-mail, please send a request to IR@avalonbay.com. Some items referenced in the earnings release may require the Adobe Acrobat Reader. If you do not have the Adobe Acrobat Reader, you may download it at: http://www.adobe.com/products/acrobat/readstep2.html .

About AvalonBay Communities, Inc.

As of June 30, 2006, the Company owned or held a direct or indirect ownership interest in 160 apartment communities containing 46,904 apartment homes in ten states and the District of Columbia, of which 17 communities were under construction and three communities were under reconstruction. The Company is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in high barrier-to-entry markets of the United States. More information may be found on the Companys website at http://www.avalonbay.com. For additional information, please contact Timothy J. Naughton, President, at 1-703-317-4620, or Thomas J. Sargeant, Chief Financial Officer, at 1-703-317-4635.

Forward-Looking Statements

This release, including its Attachments, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these forward-looking statements by the Companys use of words such as expects, plans, estimates, projects, intends, believes, outlook and similar expressions that do not relate to historical matters. Actual results may differ materially from those expressed or implied by the forward-looking statements as a result of risks and uncertainties, which include the following: changes in local employment conditions, demand for apartment homes, supply of competitive housing products, and other economic conditions may result in lower than expected occupancy and/or rental rates and adversely affect the profitability of our communities; increases in costs of materials, labor or other expenses may result in communities that we develop or redevelop failing to achieve expected profitability; delays in completing development, redevelopment and/or lease-up may result in increased financing and construction costs, and may delay and/or reduce the profitability of a community; debt and/or equity financing for development, redevelopment or acquisitions of communities may not be available on favorable terms; we may be unable to obtain, or experience delays in obtaining, necessary governmental permits and authorizations; or we may abandon development or redevelopment opportunities for which we have already incurred costs.

Additional discussions of risks and uncertainties appear in the Companys filings with the Securities and Exchange Commission, including the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2005 under the headings Risk Factors and under the heading Managements Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements, as well as the Companys Quarterly Report on Form 10-Q for the subsequent quarter under the heading Managements Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements.

The Company does not undertake a duty to update forward-looking statements, including its expected operating results for the third quarter and full year 2006. The Company may, in its discretion, provide information in future public announcements regarding its outlook that may be of interest to the investment community. The format and extent of future outlooks may be different from the format and extent of the information contained in this release.

Definitions and Reconciliations

Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined and further explained on Attachment 14, Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms. Attachment 14 is included in the full earnings release available at the Companys website at http://www.avalonbay.com/earnings.

SECOND QUARTER 2006

Supplemental Operating and Financial Data

Located in Coram, New York on Long Island, Avalon Pines II is the second phase of a two-phase, garden-style, apartment community that is adjacent to Pine Ridge Golf Club. Apartment homes feature washers and dryers, private patios or balconies and optional features such as crown molding and fireplaces. Community amenities include a fitness center, swimming pool, indoor basketball court, tennis court and jogging trails.

With easy access to the Long Island Expressway, I-495, two Long Island Railroad stations, and the Port Jefferson/Bridgeport ferry landing, Avalon Pines provides easy access to nearby employment centers.

Avalon Pines II is the second phase of a multi-phase apartment community containing an aggregate of 450 apartment homes that was completed for a Total Capital Cost of $73.2 million.

SECOND QUARTER 2006

Supplemental Operating and Financial Data

Table of Contents


Company Profile
Selected Operating and Other Information		Attachment 1
Detailed Operating Information		Attachment 2
Condensed Consolidated Balance Sheets		Attachment 3

Sub-Market Profile
Quarterly Revenue and Occupancy Changes (Established Communities)		Attachment 4
Sequential Quarterly Revenue and Occupancy Changes (Established Communities)		Attachment 5
Year-to-Date Revenue and Occupancy Changes (Established Communities)		Attachment 6

Development, Redevelopment, Acquisition and Disposition Profile
Summary of Development and Redevelopment Activity		Attachment 7
Development Communities		Attachment 8
Redevelopment Communities		Attachment 9
Summary of Development and Redevelopment Community Activity		Attachment 10
Future Development		Attachment 11
Unconsolidated Real Estate Investments		Attachment 12
Summary of Disposition Activity		Attachment 13

Definitions and Reconciliations
Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms		Attachment 14

The following is a Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended. The projections and estimates contained in the following attachments are forward-looking statements that involve risks and uncertainties, and actual results may differ materially from those projected in such statements. Risks associated with the Companys development, redevelopment, construction, and lease-up activities, which could impact the forward-looking statements made are discussed in the paragraph titled Forward-Looking Statements in the release to which these attachments relate. In particular, development opportunities may be abandoned; Total Capital Cost of a community may exceed original estimates, possibly making the community uneconomical and/or affecting projected returns; construction and lease-up may not be completed on schedule, resulting in increased debt service and construction costs; and other risks described in the Companys filings with the Securities and Exchange Commission, including the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2005 and the Companys Quarterly Reports on Form 10-Q for subsequent quarters.

Attachment 1

AvalonBay Communities, Inc.
Selected Operating and Other Information
June 30, 2006
(Dollars in thousands except per share data)
(unaudited)

SELECTED OPERATING INFORMATION


	Q2		Q2					YTD		YTD
	2006		2005		% Change			2006		2005		% Change
Net income available to common stockholders	$	67,794	$	54,736		23.9	%	$	179,696	$	122,171		47.1	%

Per common share basic	$	0.91	$	0.75		21.3	%	$	2.43	$	1.68		44.5	%
Per common share diluted	$	0.90	$	0.74		21.6	%	$	2.39	$	1.65		44.8	%

Funds from Operations	$	77,510	$	72,325		7.2	%	$	164,354	$	143,574		14.5	%
Per common share diluted	$	1.03	$	0.97		6.2	%	$	2.18	$	1.93		13.0	%

Dividends declared common	$	58,044	$	52,029		11.6	%	$	116,030	$	103,777		11.8	%
Per common share	$	0.78	$	0.71		9.9	%	$	1.56	$	1.42		9.9	%

Common shares outstanding		74,415,977		73,280,345		1.5	%		74,415,977		73,280,345		1.5	%
Outstanding operating partnership units		152,002		470,226		(67.7	%)		152,002		470,226		(67.7	%)

Total outstanding shares and units		74,567,979		73,750,571		1.1	%		74,567,979		73,750,571		1.1	%


Average shares outstanding basic		74,100,800		72,786,719		1.8	%		73,950,147		72,640,134		1.8	%
Average operating partnership units outstanding		152,221		477,970		(68.2	%)		194,662		487,913		(60.1	%)
Effect of dilutive securities		1,108,890		1,324,547		(16.3	%)		1,141,137		1,289,458		(11.5	%)

Average shares outstanding diluted		75,361,911		74,589,236		1.0	%		75,285,946		74,417,505		1.2	%

DEBT COMPOSITION AND MATURITIES


			% of Total			Average
			Market			Interest			Remaining
Debt Composition	Amount		Cap			Rate(1)			Maturities(2)
Conventional Debt										2006	$	154,516	(3)
Long-term, fixed rate	$	1,849,916		17.3	%					2007	$	307,690
Long-term, variable rate		112,825		1.1	%					2008	$	208,565
Variable rate credit facility and construction loan		45,952		0.4	%					2009	$	231,048
										2010	$	234,437

Subtotal, Conventional		2,008,693		18.8	%		6.7	%


Tax-Exempt Debt
Long-term, fixed rate		192,777		1.8	%
Long-term, variable rate		139,367		1.3	%

Subtotal, Tax-Exempt		332,144		3.1	%		5.9	%


Total Debt	$	2,340,837		21.9	%		6.5	%


⁽¹⁾		Includes credit enhancement fees, facility fees, trustees fees, etc.

⁽²⁾		Excludes amounts under the $500,000 variable rate credit facility. The Company is evaluating the refinancing of this credit facility in 2006. If the facility is not refinanced, after all extensions, it matures in 2008.

⁽³⁾		Includes $150,000 of unsecured notes repaid in July 2006.

CAPITALIZED COSTS


					Non-Rev
	Cap		Cap		Capex
	Interest		Overhead		per Home
Q206	$	11,205	$	5,377	$	164
Q106	$	8,364	$	5,559	$	38
Q405	$	7,067	$	5,477	$	77
Q305	$	6,519	$	4,842	$	155
Q205	$	6,036	$	4,321	$	214

COMMUNITY INFORMATION


			Apartment
	Communities		Homes
Current Communities		143		41,485
Development Communities		17		5,419
Development Rights		49		11,996

Attachment 2

AvalonBay Communities, Inc.
Detailed Operating Information
June 30, 2006
(Dollars in thousands except per share data)
(unaudited)


	Q2			Q2						YTD			YTD
	2006			2005			% Change			2006			2005			% Change
Revenue:
Rental and other income	$	179,280		$	164,289			9.1	%	$	353,232		$	325,165			8.6	%
Management, development and other fees		1,395			1,363			2.3	%		2,601			1,796			44.8	%

Total		180,675			165,652			9.1	%		355,833			326,961			8.8	%


Operating expenses:
Direct property operating expenses, excluding property taxes		40,960			37,381			9.6	%		79,929			74,065			7.9	%
Property taxes		16,871			16,171			4.3	%		33,775			32,222			4.8	%
Property management and other indirect operating expenses		8,307			7,594			9.4	%		16,938			14,722			15.1	%
Investments and investment management(1)		2,398			1,171			104.8	%		3,869			2,164			78.8	%

Total		68,536			62,317			10.0	%		134,511			123,173			9.2	%


Interest expense, net		(26,595	)		(32,112	)		(17.2	%)		(55,259	)		(64,232	)		(14.0	%)
General and administrative expense(2)		(6,479	)		(6,262	)		3.5	%		(12,762	)		(13,421	)		(4.9	%)
Joint venture income and minority interest(3)		79			(159	)		(149.7	%)		174			5,910			(97.1	%)
Depreciation expense		(41,238	)		(39,377	)		4.7	%		(81,153	)		(78,693	)		3.1	%
Gain on sale of land					4,617			N/A			13,166			4,617			185.2	%


Income from continuing operations		37,906			30,042			26.2	%		85,488			57,969			47.5	%

Discontinued operations:(4)
Income from discontinued operations		71			4,222			(98.3	%)		1,147			8,291			(86.2	%)
Gain on sale of communities		31,992			22,647			41.3	%		97,411			60,261			61.6	%

Total discontinued operations		32,063			26,869			19.3	%		98,558			68,552			43.8	%


Net income		69,969			56,911			22.9	%		184,046			126,521			45.5	%
Dividends attributable to preferred stock		(2,175	)		(2,175	)					(4,350	)		(4,350	)

Net income available to common stockholders	$	67,794		$	54,736			23.9	%	$	179,696		$	122,171			47.1	%

Net income per common share basic	$	0.91		$	0.75			21.3	%	$	2.43		$	1.68			44.5	%

Net income per common share diluted	$	0.90		$	0.74			21.6	%	$	2.39		$	1.65			44.8	%


(1)		Reflects costs incurred related to investment acquisition, investment management and abandoned pursuits. Abandoned pursuits are volatile and therefore may vary widely between periods.

(2)		Amounts for the three and six months ended June 30, 2005 include the accrual of $1,500 in costs related to various litigation matters. In addition, the amount for the six months ended June 30, 2005 includes separation costs in the amount of $2,100 due to the departure of a senior executive.

(3)		Amount for the six months ended June 30, 2005 includes $6,252 related to gain on the sale of Rent.com to eBay.

(4)		Reflects net income for communities sold during the period from January 1, 2005 through June 30, 2006. The following table details income from discontinued operations as of the periods shown:


	Q2			Q2			YTD			YTD
	2006			2005			2006			2005
Rental income	$	157		$	7,277		$	1,787		$	15,970
Operating and other expenses		(86	)		(2,230	)		(640	)		(5,064	)
Interest expense, net
Depreciation expense					(825	)					(2,615	)

Income from discontinued operations(5)	$	71		$	4,222		$	1,147		$	8,291


(5)		NOI for discontinued operations totaled $71 and $1,147 for the three and six months ended June 30, 2006, respectively, all of which is related to assets sold.

Attachment 3

AvalonBay Communities, Inc.
Condensed Consolidated Balance Sheets
(Dollars in thousands)
(unaudited)


	June 30,			December 31,
	2006			2005
Real estate	$	5,378,135		$	5,304,234
Less accumulated depreciation		(1,018,627	)		(938,297	)

Net operating real estate		4,359,508			4,365,937

Construction in progress, including land		486,925			317,823
Land held for development		214,463			179,739
Operating real estate assets held for sale, net					82,289


Total real estate, net		5,060,896			4,945,788

Cash and cash equivalents		12,780			6,106
Cash in escrow		30,569			48,266
Resident security deposits		27,317			26,290
Other assets (1)		140,878			138,610


Total assets	$	5,272,440		$	5,165,060


Unsecured senior notes	$	1,805,214		$	1,809,182
Unsecured facility		6,000			66,800
Notes payable		528,837			490,582
Resident security deposits		37,962			35,640
Liabilities related to assets held for sale					1,837
Other liabilities		247,896			199,892


Total liabilities	$	2,625,909		$	2,603,933


Minority interest		5,483			19,464

Stockholders equity		2,641,048			2,541,663


Total liabilities and stockholders equity	$	5,272,440		$	5,165,060


⁽¹⁾		Other assets includes $0 and $485 relating to discontinued operations as of June 30, 2006 and December 31, 2005, respectively.

Attachment 4

AvalonBay Communities, Inc.
Quarterly Revenue and Occupancy Changes Established Communities (1)
June 30, 2006


	Apartment
	Homes		Average Rental Rates(2)							Economic Occupancy									Rental Revenue ($000s)
			Q2 06		Q2 05		% Change			Q2 06			Q2 05			% Change			Q2 06		Q2 05		% Change
Northeast
Boston, MA		2,471	$	1,644	$	1,609		2.2	%		95.6	%		95.6	%		0.0	%	$	11,650	$	11,401		2.2	%
Fairfield-New Haven, CT		1,998		2,007		1,927		4.2	%		96.9	%		96.0	%		0.9	%		11,660		11,099		5.1	%
New York, NY		1,606		2,203		2,131		3.4	%		97.2	%		96.5	%		0.7	%		10,313		9,908		4.1	%
Northern New Jersey		1,182		2,460		2,255		9.1	%		97.3	%		95.9	%		1.4	%		8,484		7,678		10.5	%
Long Island, NY		915		2,368		2,264		4.6	%		97.5	%		97.3	%		0.2	%		6,338		6,046		4.8	%
Central New Jersey		502		1,667		1,615		3.2	%		96.7	%		95.6	%		1.1	%		2,421		2,322		4.3	%

Northeast Average		8,674		2,019		1,936		4.3	%		96.8	%		96.1	%		0.7	%		50,866		48,454		5.0	%


Mid-Atlantic
Washington, DC		5,115		1,606		1,501		7.0	%		96.3	%		94.6	%		1.7	%		23,720		21,823		8.7	%
Baltimore, MD		718		1,175		1,151		2.1	%		98.0	%		96.3	%		1.7	%		2,480		2,390		3.8	%

Mid-Atlantic Average		5,833		1,553		1,457		6.6	%		96.4	%		94.8	%		1.6	%		26,200		24,213		8.2	%


Midwest
Chicago, IL		887		1,124		1,095		2.6	%		94.7	%		96.1	%		(1.4	%)		2,831		2,797		1.2	%

Midwest Average		887		1,124		1,095		2.6	%		94.7	%		96.1	%		(1.4	%)		2,831		2,797		1.2	%


Pacific Northwest
Seattle, WA		2,500		1,121		1,035		8.3	%		96.5	%		94.9	%		1.6	%		8,116		7,384		9.9	%

Pacific Northwest Average		2,500		1,121		1,035		8.3	%		96.5	%		94.9	%		1.6	%		8,116		7,384		9.9	%


Northern California
San Jose, CA		4,464		1,523		1,433		6.3	%		96.6	%		95.7	%		0.9	%		19,709		18,386		7.2	%
San Francisco, CA		2,015		1,820		1,670		9.0	%		96.5	%		96.2	%		0.3	%		10,618		9,715		9.3	%
Oakland-East Bay, CA		1,647		1,227		1,172		4.7	%		96.2	%		95.6	%		0.6	%		5,831		5,536		5.3	%

Northern California Average		8,126		1,537		1,439		6.8	%		96.5	%		95.8	%		0.7	%		36,158		33,637		7.5	%


Southern California
Los Angeles, CA		1,198		1,572		1,442		9.0	%		95.5	%		95.4	%		0.1	%		5,393		4,945		9.1	%
Orange County, CA		1,174		1,356		1,273		6.5	%		96.8	%		96.3	%		0.5	%		4,624		4,320		7.0	%
San Diego, CA		1,058		1,385		1,347		2.8	%		95.4	%		94.9	%		0.5	%		4,196		4,063		3.3	%

Southern California Average		3,430		1,440		1,355		6.3	%		95.9	%		95.6	%		0.3	%		14,213		13,328		6.6	%


Average/Total Established		29,450	$	1,623	$	1,534		5.8	%		96.5	%		95.7	%		0.8	%	$	138,384	$	129,813		6.6	%


(1)		Established Communities are communities with stabilized operating expenses as of January 1, 2005 such that a comparison of 2005 to 2006 is meaningful.

(2)		Reflects the effect of concessions amortized over the average lease term.

Attachment 5

AvalonBay Communities, Inc.
*Sequential Quarterly* Revenue and Occupancy Changes Established Communities (1)
June 30, 2006


	Apartment
	Homes		Average Rental Rates (2)							Economic Occupancy									Rental Revenue ($000s)
			Q2 06		Q1 06		% Change			Q2 06			Q1 06			% Change				Q2 06		Q1 06		% Change
Northeast
Boston, MA		2,471	$	1,644	$	1,639		0.3	%		95.6	%		95.3	%		0.3	%		$	11,650	$	11,584		0.6	%
Fairfield-New Haven, CT		1,998		2,007		1,958		2.5	%		96.9	%		96.0	%		0.9	%			11,660		11,268		3.5	%
New York, NY		1,606		2,203		2,172		1.4	%		97.2	%		97.0	%		0.2	%			10,313		10,149		1.6	%
Northern New Jersey		1,182		2,460		2,406		2.2	%		97.3	%		96.5	%		0.8	%			8,484		8,236		3.0	%
Long Island, NY		915		2,368		2,322		2.0	%		97.5	%		96.1	%		1.4	%			6,338		6,127		3.4	%
Central New Jersey		502		1,667		1,625		2.6	%		96.7	%		94.4	%		2.3	%			2,421		2,309		4.9	%

Northeast Average		8,674		2,019		1,987		1.6	%		96.8	%		96.1	%		0.7	%			50,866		49,673		2.4	%


Mid-Atlantic
Washington, DC		5,115		1,606		1,563		2.8	%		96.3	%		96.5	%		(0.2	%)			23,720		23,140		2.5	%
Baltimore, MD		718		1,175		1,161		1.2	%		98.0	%		98.2	%		(0.2	%)			2,480		2,457		0.9	%

Mid-Atlantic Average		5,833		1,553		1,513		2.6	%		96.4	%		96.7	%		(0.3	%)			26,200		25,597		2.4	%


Midwest
Chicago, IL		887		1,124		1,095		2.6	%		94.7	%		93.9	%		0.8	%			2,831		2,736		3.5	%

Midwest Average		887		1,124		1,095		2.6	%		94.7	%		93.9	%		0.8	%			2,831		2,736		3.5	%


Pacific Northwest
Seattle, WA		2,500		1,121		1,090		2.8	%		96.5	%		96.2	%		0.3	%			8,116		7,864		3.2	%

Pacific Northwest Average		2,500		1,121		1,090		2.8	%		96.5	%		96.2	%		0.3	%			8,116		7,864		3.2	%


Northern California
San Jose, CA		4,464		1,523		1,487		2.4	%		96.6	%		97.2	%		(0.6	%)			19,709		19,358		1.8	%
San Francisco, CA		2,015		1,820		1,776		2.5	%		96.5	%		96.9	%		(0.4	%)			10,618		10,399		2.1	%
Oakland-East Bay, CA		1,647		1,227		1,202		2.1	%		96.2	%		97.3	%		(1.1	%)			5,831		5,779		0.9	%

Northern California Average		8,126		1,537		1,501		2.4	%		96.5	%		97.1	%		(0.6	%)			36,158		35,536		1.8	%



Southern California
Los Angeles, CA		1,198		1,572		1,530		2.7	%		95.5	%		95.8	%		(0.3	%)			5,393		5,266		2.4	%
Orange County, CA		1,174		1,356		1,340		1.2	%		96.8	%		96.6	%		0.2	%			4,624		4,558		1.4	%
San Diego, CA		1,058		1,385		1,371		1.0	%		95.4	%		96.1	%		(0.7	%)			4,196		4,182		0.3	%

Southern California Average		3,430		1,440		1,416		1.7	%		95.9	%		96.1	%		(0.2	%)			14,213		14,006		1.5	%


Average/Total Established		29,450	$	1,623	$	1,590		2.1	%		96.5	%		96.4	%		0.1	%		$	138,384	$	135,412		2.2	%


(1)		Established Communities are communities with stabilized operating expenses as of January 1, 2005 such that a comparison of 2005 to 2006 is meaningful.

(2)		Reflects the effect of concessions amortized over the average lease term.

Attachment 6

AvalonBay Communities, Inc.
Year-To-Date Revenue and Occupancy Changes Established Communities (1)
June 30, 2006


	Apartment
	Homes		Average Rental Rates (2)							Economic Occupancy									Rental Revenue ($000s)
			YTD Q2 06		YTD Q2 05		% Change			YTD Q2 06			YTD Q2 05			% Change			YTD Q2 06		YTD Q2 05		% Change
Northeast
Boston, MA		2,471	$	1,642	$	1,608		2.1	%		95.5	%		95.4	%		0.1	%	$	23,234	$	22,728		2.2	%
Fairfield-New Haven, CT		1,998		1,982		1,904		4.1	%		96.5	%		95.8	%		0.7	%		22,928		21,868		4.8	%
New York, NY		1,606		2,187		2,118		3.3	%		97.1	%		96.1	%		1.0	%		20,462		19,618		4.3	%
Northern New Jersey		1,182		2,433		2,227		9.3	%		96.9	%		96.4	%		0.5	%		16,720		15,228		9.8	%
Long Island, NY		915		2,345		2,253		4.1	%		96.8	%		96.9	%		(0.1	%)		12,465		11,991		4.0	%
Central New Jersey		502		1,644		1,603		2.6	%		95.5	%		95.0	%		0.5	%		4,730		4,590		3.1	%

Northeast Average		8,674		2,004		1,923		4.2	%		96.4	%		95.9	%		0.5	%		100,539		96,023		4.7	%


Mid-Atlantic
Washington, DC		5,115		1,584		1,486		6.6	%		96.4	%		94.4	%		2.0	%		46,860		43,141		8.6	%
Baltimore, MD		718		1,168		1,138		2.6	%		98.1	%		95.5	%		2.6	%		4,936		4,694		5.2	%

Mid-Atlantic Average		5,833		1,534		1,443		6.3	%		96.5	%		94.5	%		2.0	%		51,796		47,835		8.3	%


Midwest
Chicago, IL		887		1,109		1,087		2.0	%		94.3	%		95.4	%		(1.1	%)		5,567		5,515		0.9	%

Midwest Average		887		1,109		1,087		2.0	%		94.3	%		95.4	%		(1.1	%)		5,567		5,515		0.9	%


Pacific Northwest
Seattle, WA		2,500		1,106		1,027		7.7	%		96.3	%		95.1	%		1.2	%		15,981		14,680		8.9	%

Pacific Northwest Average		2,500		1,106		1,027		7.7	%		96.3	%		95.1	%		1.2	%		15,981		14,680		8.9	%


Northern California
San Jose, CA		4,464		1,505		1,429		5.3	%		96.9	%		95.6	%		1.3	%		39,068		36,652		6.6	%
San Francisco, CA		2,015		1,798		1,660		8.3	%		96.7	%		95.5	%		1.2	%		21,017		19,201		9.5	%
Oakland-East Bay, CA		1,647		1,214		1,168		3.9	%		96.8	%		95.8	%		1.0	%		11,610		11,066		4.9	%

Northern California Average		8,126		1,519		1,435		5.9	%		96.8	%		95.6	%		1.2	%		71,695		66,919		7.1	%



Southern California
Los Angeles, CA		1,198		1,551		1,425		8.8	%		95.6	%		95.8	%		(0.2	%)		10,659		9,815		8.6	%
Orange County, CA		1,174		1,348		1,263		6.7	%		96.7	%		96.4	%		0.3	%		9,182		8,580		7.0	%
San Diego, CA		1,058		1,378		1,339		2.9	%		95.8	%		94.8	%		1.0	%		8,377		8,065		3.9	%

Southern California Average		3,430		1,428		1,343		6.3	%		96.0	%		95.7	%		0.3	%		28,218		26,460		6.6	%


Average/Total Established		29,450	$	1,606	$	1,524		5.4	%		96.5	%		95.5	%		1.0	%	$	273,796	$	257,432		6.4	%


(1)		Established Communities are communities with stabilized operating expenses as of January 1, 2005 such that a comparison of 2005 to 2006 is meaningful.

(2)		Reflects the effect of concessions amortized over the average lease term.

Attachment 7

AvalonBay Communities, Inc.
Summary of Development and Redevelopment Activity (1) as of June 30, 2006


			Number		Number		Total
			of		of		Capital Cost (2)
			Communities		Homes		(millions)
Portfolio Additions:
2006 Annual Completions	(3	)
Development				4		849	$	167.6
Redevelopment	(4	)		2				10.1

Total Additions				6		849	$	177.7


2005 Annual Completions
Development				7		1,971	$	408.2
Redevelopment				3				31.0

Total Additions				10		1,971	$	439.2


Pipeline Activity:	(3	)

Currently Under Construction
Development				17		5,419	$	1,412.0
Redevelopment	(4	)		3				26.2

Subtotal				20		5,419	$	1,438.2


Planning
Development Rights				49		11,996	$	2,869.0

Total Pipeline				69		17,415	$	4,307.2


(1)		Represents activity for consolidated and unconsolidated entities.

(2)		See Attachment #14 Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.

(3)		Information represents projections and estimates.

(4)		Represents only cost of redevelopment activity, does not include original acquisition cost or number of apartment homes acquired.

		This chart contains forward-looking statements. Please see the paragraph regarding forward-looking statements on the Table of Contents page relating to the Companys Supplemental Operating and Financial Data for the second quarter of 2006.

Attachment 8

AvalonBay Communities, Inc.
Development Communities as of June 30, 2006


	Percentage					Total					Schedule						Avg
	Ownership			# of		Capital											Rent								% Occ
	Upon			Apt		Cost (1)					Initial				Stabilized		Per		% Comp			% Leased			Physical			Economic
	Completion			Homes		(millions)			Start		Occupancy		Complete		Ops (1)		Home (1)		(2)			(3)			(4)			(1) (5)
																	Inclusive of
																	Concessions
																	See Attachment #14
Under Construction:
1. Avalon Del Rey (6)		30	%		309	$	70.0			Q2 2004		Q1 2006		Q3 2006		Q1 2007	$	2,010		96.4	%		77.7	%		67.3	%		33.4	%
Los Angeles, CA
2. Avalon Camarillo		100	%		249		47.2			Q2 2004		Q1 2006		Q3 2006		Q1 2007		1,660		84.3	%		76.3	%		63.1	%		35.7	%
Camarillo, CA
3. Avalon Wilshire		100	%		123		46.6			Q1 2005		Q4 2006		Q1 2007		Q3 2007		2,520		N/A			N/A			N/A			N/A
Los Angeles, CA
4. Avalon at Mission Bay North II (7)		25	%		313		116.2			Q1 2005		Q3 2006		Q1 2007		Q3 2007		3,020		21.1	%		18.2	%		10.9	%		N/A
San Francisco, CA
5. Avalon Chestnut Hill		100	%		204		60.6			Q2 2005		Q4 2006		Q1 2007		Q3 2007		2,735		N/A			4.9	%		N/A			N/A
Chestnut Hill, MA
6. Avalon at Decoverly II		100	%		196		30.5			Q3 2005		Q2 2006		Q2 2007		Q4 2007		1,500		14.3	%		16.3	%		8.7	%		1.1	%
Rockville, MD
7. Avalon Lyndhurst (8)		100	%		328		78.8			Q3 2005		Q1 2007		Q4 2007		Q2 2008		2,260		N/A			N/A			N/A			N/A
Lyndhurst, NJ
8. Avalon Shrewsbury		100	%		251		36.1			Q3 2005		Q2 2006		Q2 2007		Q4 2007		1,380		18.7	%		24.3	%		9.6	%		1.5	%
Shrewsbury, MA
9. Avalon Riverview North		100	%		602		175.6			Q3 2005		Q3 2007		Q3 2008		Q1 2009		2,695		N/A			N/A			N/A			N/A
New York, NY
10. Avalon Chrystie Place II		100	%		206		100.8			Q4 2005		Q4 2006		Q1 2007		Q3 2007		3,420		N/A			N/A			N/A			N/A
New York, NY
11. Avalon at Glen Cove North		100	%		111		42.4			Q4 2005		Q2 2007		Q3 2007		Q1 2008		2,300		N/A			N/A			N/A			N/A
Glen Cove, NY
12. Avalon Danvers		100	%		433		84.8			Q4 2005		Q1 2007		Q2 2008		Q4 2008		1,660		N/A			N/A			N/A			N/A
Danvers, MA
13. Avalon Woburn		100	%		446		81.9			Q4 2005		Q4 2006		Q1 2008		Q3 2008		1,640		N/A			3.4	%		N/A			N/A
Woburn, MA
14. Avalon on the Sound II		100	%		588		184.2			Q1 2006		Q3 2007		Q3 2008		Q1 2009		2,420		N/A			N/A			N/A			N/A
New Rochelle, NY
15. Avalon Meydenbauer		100	%		368		84.3			Q1 2006		Q4 2007		Q3 2008		Q1 2009		1,625		N/A			N/A			N/A			N/A
Bellevue, WA
16. Avalon at Dublin Station I		100	%		305		85.8			Q2 2006		Q3 2007		Q2 2008		Q4 2008		1,995		N/A			N/A			N/A			N/A
Dublin, CA
17. Avalon at Lexington Hills		100	%		387		86.2			Q2 2006		Q2 2007		Q3 2008		Q1 2009		2,105		N/A			N/A			N/A			N/A
Lexington, MA

Subtotal/Weighted Average					5,419	$	1,412.0										$	2,160

Completed this Quarter:
1. Avalon Pines II		100	%		152		25.1			Q22005		Q12006		Q22006		Q42006		1,890		100.0	%		91.4	%		83.6	%		55.9	%
Coram, NY

Subtotal/Weighted Average					152	$	25.1

Total/Weighted Average					5,571	$	1,437.1										$	2,155

Weighted Average Projected NOI
as a % of Total Capital Cost (1)(9)							7.0	%	Inclusive of Concessions See Attachment #14


Non-Stabilized Development Communities: (10)				% Economic			Asset Cost Basis, Non-Stabilized Development						Source
				Occ
Prior Quarter Completions:					(1) (5)		Capital Cost, Prior Quarter Completions			$	25.3		Att. 8
Avalon at Bedford Center, Bedford, MA	139	$	25.3				Capital Cost, Current Completions				25.1		Att. 8
							Capital Cost, Under Construction				1,324.9		Att. 8 (less JV partner share)
							Less: Remaining to Invest, Under Construction
Total	139	$	25.3		95.1	%

							Total Remaining to Invest	915.4					Att. 10
							Capital Cost, Projected Q3 2006 Starts	(123.5	)				Att. 10, Footnote 5

											(791.9	)

							Total Asset Cost Basis, Non-Stabilized Development			$	583.4

Q2 2006 Net Operating Income/(Deficit) for communities under construction and non-stabilized development communities was $1.0 million. See Attachment #14.


(1)		See Attachment #14 Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.

(2)		Includes apartment homes for which construction has been completed and accepted by management as of July 21, 2006.

(3)		Includes apartment homes for which leases have been executed or non-refundable deposits have been paid as of July 21, 2006.

(4)		Physical occupancy based on apartment homes occupied as of July 21, 2006.

(5)		Represents Economic Occupancy for the second quarter of 2006.

(6)		The community is currently owned by a wholly-owned subsidiary of the Company, will be financed, in part or in whole, by a construction loan, and is subject to a joint venture agreement that allows for a joint venture partner to be admitted upon construction completion.

(7)		The community is being developed under a joint venture structure and is expected to be financed in part by a construction loan. The Companys portion of the Total Capital Cost of this joint venture is projected to be $29.1 million including community-based debt.

(8)		The accompanying earnings release text, under the heading Development and Redevelopment Activity, includes a discussion of a remediation effort at this community. Although the Company estimates the resulting additional cost to complete construction at approximately $10 million, any recoverable amounts from insurance or third parties are not currently estimable. Accordingly, the Total Capital Cost and yield cited above do not reflect the potential impact of any additional costs associated with this remediation effort.

(9)		The Weighted Average calculation is based on the Companys pro rata share of the Total Capital Cost for each community.

(10)		Represents Development Communities completed in the current quarter and prior quarters that had not achieved Stabilized Operations for the entire current quarter. Estimates are based on the Companys pro rata share of the Total Capital Cost for each community.

This chart contains forward-looking statements. Please see the paragraph regarding forward-looking statements on the Table of Contents page relating to the Companys Supplemental Operating and Financial Data for the second quarter of 2006.

Attachment 9

AvalonBay Communities, Inc.
Redevelopment Communities as of June 30, 2006


						Cost (millions)					Schedule								Avg		Number of Homes
				# of		Pre-		Total											Rent				Out of
	Percentage			Apt		Redevelopment		Capital			Acquisition /						Restabilized		Per		Completed		Service
	Ownership			Homes		Capital Cost		Cost (1)(2)			Completion		Start		Complete		Ops (2)		Home (2)		to date		@ 6/30/06
																			Inclusive of
																			Concessions
																			See Attachment #14
Under Redevelopment:
Stabilized (3)
1. 200 Arlington Place Arlington Heights, IL		100	%		409	$	50.2	$	57.1			Q4 2000		Q1 2006		Q1 2007		Q3 2007	$	1,345		97		7
2. Avalon Walk I and II (4)		100	%		764		59.4		71.2			Q3 1992		Q1 2006		Q4 2007		Q2 2008		1,320		191		37
Hamden, CT												Q3 1994

Subtotal					1,173	$	109.6	$	128.3										$	1,330		288		44


Acquisitions (3)
1. Ravenswood at the Park (5)		15	%		400		49.2		56.7			Q4 2004		Q2 2006		Q4 2007		Q2 2008		1,325		57		16
Redmond, WA


Total/Weighted Average					1,573	$	158.8	$	185.0										$	1,330		345		60


Completed this Quarter:
Stabilized
1. Avalon at Fairway Hills III (6)		100	%		336	$	23.3	$	29.3			Q3 1996		Q4 2004		Q2 2006		Q3 2006	$	1,345		336
Columbia, MD

Acquisitions
1. Avalon Columbia (7)		15	%		170		25.5		29.6			Q4 2004		Q2 2005		Q2 2006		Q3 2006		1,360		170
Columbia, MD


Total/Weighted Average					506	$	48.8	$	58.9										$	1,350		506


Grand Total/Weighted Average					2,079	$	207.6	$	243.9										$	1,335		851		60


Weighted Average Projected NOI as a % of Total Capital Cost (2)									9.7	%	Inclusive of Concessions See Attachment #14


(1)		Inclusive of acquisition cost.

(2)		See Attachment #14 Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.

(3)		Stabilized Redevelopment Communities have been held for one year or more and have achieved Stabilized Operations before beginning redevelopment. Acquisition redevelopments are those communities that begin redevelopment within one year of acquisition.

(4)		This community was developed by a predecessor of the Company. Phase I was completed in Q3 1992 and Phase II was completed in Q3 1994.

(5)		This community was acquired in Q4 2004 and was transferred to a subsidiary of the Companys Investment Management Fund (the IM Fund) in Q1 2005, reducing the Companys indirect equity interest in the community to 15%.

(6)		This is one of two communities that previously comprised Avalon at Fairway Hills II. In connection with the beginning of its renovation, this community will now be reported separately as Phase III.

(7)		This community was acquired in Q4 2004 and was transferred to a subsidiary of the Companys IM Fund in Q1 2005, reducing the Companys indirect equity interest in the community to 15%. This community was formerly known as Hobbits Grove.

		This chart contains forward-looking statements. Please see the paragraph regarding forward-looking statements on the Table of Contents page relating to the Companys Supplemental Operating and Financial Data for the second quarter of 2006.

Attachment 10

AvalonBay Communities, Inc.
Summary of Development and Redevelopment Community Activity (1) as of June 30, 2006
($ in Thousands)

DEVELOPMENT (2)


	Apt Homes		Total Capital		Cost of Homes				Construction in
	Completed &		Cost Invested		Completed &		Remaining to		Progress at
	Occupied		During Period (3)		Occupied (4)		Invest (5)		Period End (6)
Total 2004 Actual		2,181	$	302,184	$	368,301	$	287,812	$	266,548


2005 Actual:
Quarter 1		259	$	60,827	$	42,234	$	286,946	$	294,379
Quarter 2		473		72,327		75,121		588,802		315,720
Quarter 3		510		96,202		66,050		734,543		295,545
Quarter 4		238		118,483		35,641		881,012		377,320

Total 2005 Actual		1,480	$	347,839	$	219,046


2006 Projected:
Quarter 1 (Actual)		267	$	113,125	$	47,014	$	952,410	$	468,401
Quarter 2 (Actual)		302		155,381		59,948		915,400		570,875
Quarter 3 (Projected)		487		207,368		90,510		708,032		606,591
Quarter 4 (Projected)		510		152,518		116,838		555,514		522,017

Total 2006 Projected		1,566	$	628,392	$	314,310

REDEVELOPMENT


			Total Capital				Reconstruction in
	Avg Homes		Cost Invested		Remaining to		Progress at
	Out of Service		During Period (3)		Invest (5)		Period End (6)
Total 2004 Actual			$	3,544	$	15,710	$	2,140


2005 Actual:
Quarter 1		80	$	2,878	$	9,938	$	5,963
Quarter 2		98		2,536		7,301		14,236
Quarter 3		110		1,890		17,350		15,172
Quarter 4		52		1,668		13,456		7,877

Total 2005 Actual			$	8,972


2006 Projected:
Quarter 1 (Actual)		32	$	3,433	$	18,443	$	8,502
Quarter 2 (Actual)		60		3,474		21,760		10,206
Quarter 3 (Projected)		111		4,571		17,189		16,029
Quarter 4 (Projected)		101		4,480		12,709		16,238

Total 2006 Projected			$	15,958


(1)		Data is presented for all communities currently under construction or reconstruction and those communities for which construction or reconstruction is expected to begin within the next 90 days.

(2)		Projected periods include data for consolidated joint ventures at 100%. The offset for joint venture partners participation is reflected as minority interest.

(3)		Represents Total Capital Cost incurred or expected to be incurred during the quarter, year or in total. See Attachment #14 Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.

(4)		Represents Total Capital Cost incurred in all quarters of apartment homes completed and occupied during the quarter. Calculated by dividing Total Capital Cost for each Development Community by number of homes for the community, multiplied by the number of homes completed and occupied during the quarter.

(5)		Represents projected Total Capital Cost remaining to invest on communities currently under construction or reconstruction and those for which construction or reconstruction is expected to begin within the next 90 days. Remaining to invest for Q2 2006 includes $123.5 million attributed to two anticipated Q3 2006 development starts and $7.3 million related to two anticipated Q3 2006 redevelopment starts. Remaining to Invest also includes $6.3 million attributed to Avalon at Mission Bay North II. The Companys portion of the Total Capital Cost of this joint venture is projected to be $29.1 million including community- based construction debt.

(6)		Represents period end balance of construction or reconstruction costs. Amount for Q2 2006 includes $94.2 million related to one unconsolidated joint venture and one unconsolidated investment in the IM Fund, and is reflected in other assets for financial reporting purposes.

		This chart contains forward-looking statements. Please see the paragraph regarding forward-looking statements on the Table of Contents page relating to the Companys Supplemental Operating and Financial Data for the second quarter of 2006.

Attachment 11

AvalonBay Communities, Inc.
Future Development as of June 30, 2006

DEVELOPMENT RIGHTS (1)


					Estimated		Total
					Number		Capital Cost (1)
Location of Development Right					of Homes		(millions)
	1.	New York, NY Phase III	(2	)		90	$	62
	2.	Encino, CA	(2	)		131		61
	3.	Canoga Park, CA	(2	)		210		52
	4.	Acton, MA				380		71
	5.	White Plains, NY				393		146
	6.	Hingham, MA	(2	)		235		44
	7.	New York, NY				296		121
	8.	Kirkland, WA Phase II	(2	)		176		53
	9.	Coram, NY	(2	)		200		47
	10.	Wilton, CT	(2	)		100		24
	11.	Tinton Falls, NJ				216		41
	12.	Northborough, MA				350		60
	13.	Irvine, CA	(2	)		280		76
	14.	Sharon, MA				156		26
	15.	Norwalk, CT				314		63
	16.	Andover, MA	(2	)		115		21
	17.	Union City, CA Phase I	(2	)		272		74
	18.	Union City, CA Phase II	(2	)		166		46
	19.	Brooklyn, NY				409		204
	20.	Milford, CT	(2	)		284		45
	21.	West Long Branch, NJ	(3	)		216		36
	22.	Greenburgh, NY Phase II				444		112
	23.	West Haven, CT				170		23
	24.	Plainview, NY				160		38
	25.	Shelton, CT II				171		34
	26.	Oyster Bay, NY				273		69
	27.	Hackensack, NJ				210		47
	28.	Gaithersburg, MD				254		41
	29.	Highland Park, NJ				285		67
	30.	Shelton, CT				302		49
	31.	Wanaque, NJ				200		33
	32.	Pleasant Hill, CA	(4	)		449		153
	33.	Cohasset, MA	(2	)		200		38
	34.	Quincy, MA	(2	)		146		24
	35.	Plymouth, MA Phase II				81		17
	36.	Dublin, CA Phase II				200		52
	37.	Dublin, CA Phase III				205		53
	38.	San Francisco, CA				152		40
	39.	Howell, NJ				265		42
	40.	Wheaton, MD	(2	)		320		56
	41.	Camarillo, CA				376		55
	42.	Stratford, CT	(2	)		146		23
	43.	Alexandria, VA	(2	)		282		56
	44.	Saddle Brook, NJ				300		55
	45.	Yaphank, NY	(2	)		344		57
	46.	Garden City, NY				160		58
	47.	Tysons Corner, VA	(2	)		439		101
	48.	Camarillo, CA II				233		57
	49.	Rockville, MD	(2	)		240		46


		Total				11,996	$	2,869


(1)		See Attachment #14 Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.

(2)		Company owns land, but construction has not yet begun.

(3)		This Development Right is subject to a joint venture arrangement.

(4)		This Development Right is subject to a joint venture arrangement. In connection with the pursuit of this Development Right, $125 million in bond financing was issued and immediately invested in a guaranteed investment contract (GIC) administered by a trustee. The Company does not have any equity or economic interest in the joint venture entity at this time, but has an option to make a capital contribution to the joint venture entity for a 99% general partner interest. Should the Company exercise this option, the bond proceeds will be released from the GIC and used for future construction of the Development Right. Should the Company decide not to exercise this option, the bond proceeds will be redeemed to the issuer.

Attachment 12

AvalonBay Communities, Inc.
Unconsolidated Real Estate Investments (1) as of June 30, 2006


										AVB											AVBs
						# of		Total		Book		Outstanding Debt									Economic
		Unconsolidated	Percentage			Apt		Capital		Value						Interest			Maturity		Share
		Real Estate Investments	Ownership			Homes		Cost (2)		Investment (3)		Amount		Type		Rate			Date		of Debt
AvalonBay Value Added Fund, LP

	1.	Avalon at Redondo Beach		N/A			105	$	24,418		N/A	$	16,765	Fixed			4.84	%	Oct 2011		$	2,540
		Los Angeles, CA
	2.	Avalon Lakeside		N/A			204		18,053		N/A		7,888	Fixed			6.90	%	Feb 2028 (4)			1,195
		Chicago, IL
	3.	Avalon Columbia		N/A			170		29,223		N/A		16,575	Fixed			5.25	%	Apr 2012			2,511
		Baltimore, MD
	4.	Ravenswood at the Park		N/A			400		50,316		N/A		31,500	Fixed			4.96	%	Jul 2012			4,772
		Seattle, WA
	5.	Avalon at Poplar Creek		N/A			196		25,178		N/A		16,500	Fixed			4.83	%	Oct 2012			2,500
		Chicago, IL
	6.	Fuller Martel		N/A			82		18,013		N/A		11,500	Fixed			5.41	%	Feb 2014			1,742
		Los Angeles, CA
	7.	Civic Center Place (5)		N/A			192		37,991		N/A		23,806	Fixed			5.29	%	Aug 2013			3,607
		Norwalk, CA
	8.	Paseo Park		N/A			134		19,777		N/A		11,800	Fixed			5.74	%	Nov 2013			1,788
		Fremont, CA
	9.	Aurora at Yerba Buena		N/A			160		66,133		N/A				N/A		N/A			N/A
		San Francisco, CA
	10.	Avalon at Aberdeen Station Aberdeen, NJ		N/A			290		57,758		N/A				N/A		N/A			N/A
		Fund corporate debt (6)		N/A			N/A		N/A		N/A		67,000	Variable			6.09	%	Jan 2008			10,151

				15.2	%		1,933	$	346,860	$	57,566	$	203,334								$	30,806


Other Operating Joint Ventures
	1.	Avalon Run		(7	)		426	$	28,767	$	1,473	$			N/A		N/A			N/A	$
		Lawrenceville, NJ
	2.	Avalon Grove		(8	)		402		51,659		8,317				N/A		N/A			N/A
		Stamford, CT
	3.	Avalon Bedford		25.0	%		368		61,201		12,743		37,200	Fixed			5.24	%	Nov 2010			9,300
		Stamford, CT
	4.	Avalon Chrystie Place I		20.0	%		361		129,662		28,233		117,000	Variable			4.02	%	Feb 2009			23,400
		New York, NY

							1,557	$	271,289	$	50,766	$	154,200								$	32,700


Other Development Joint Ventures
	1.	Avalon at Mission Bay North II San Francisco, CA		25.0	%		313	$	91,296	$	20,846	$	60,008	Variable			6.85	%	Sep 2008(9)		$	15,002

							313	$	91,296	$	20,846	$	60,008								$	15,002

							3,803	$	709,445	$	129,178	$	417,542								$	78,508


(1)		Schedule does not include one community (Avalon Del Rey) that is being developed under a joint venture arrangement,

		but is currently wholly-owned and therefore consolidated for financial reporting purposes.

(2)		See Attachment #14 Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.

(3)		These unconsolidated real estate investments are accounted for under the equity method of accounting. AVB Book Value Investment represents the Companys recorded equity investment plus the Companys pro rata share of outstanding debt.

(4)		Debt can be prepaid after February 2008 without penalty.

(5)		This communitys debt is a combination of two separate fixed rate loans which both mature in August 2013. The first loan totals $18,154 at a 5.04% interest rate and was assumed by the Fund upon purchase of this community. The second loan was procured in connection with the acquisition in the amount of $5,652 at a 6.08% interest rate. The rate listed in the table above represents a blended interest rate.

(6)		Amounts are outstanding under the Funds unsecured credit facility. The interest rate is a blended average of the outstanding balance.

(7)		After the venture makes certain distributions to the third-party partner, the Company will generally be entitled to receive 40% of all operating cash flow distributions and 49% of all residual cash flow following a sale.

(8)		After the venture makes certain distributions to the third-party partner, the Company generally receives 50% of all further distributions.

(9)		The maturity date as reflected on this attachment may be extended to September 2010 upon exercise of two one-year extension options.

Attachment 13

AvalonBay Communities, Inc.
Summary of Disposition Activity as of June 30, 2006
(Dollars in thousands)

Weighted

Accumulated

Weighted Average

Number of

Average

Gross Sales

Depreciation

Economic

Initial Year

Weighted Average

Communities Sold

Holding Period (1)

Price

GAAP Gain

and Other

Gain(2)

Mkt. Cap Rate (1)(2)

Unleveraged IRR (1)(2)

1998:
9 Communities

170,312

25,270

23,438

1,832

8.1

16.2

1999:
16 Communities

317,712

47,093

27,150

19,943

8.3

12.1

2000:
8 Communities

160,085

40,779

6,262

34,517

7.9

15.3

2001:
7 Communities

241,130

62,852

21,623

41,229

8.0

14.3

2002:
1 Community

80,100

48,893

7,462

41,431

5.4

20.1

2003:
12 Communities, 1 Land Parcel(3)

460,600

184,438

52,613

131,825

6.3

15.3

2004:
5 Communities, 1 Land Parcel

250,977

122,425

19,320

103,105

4.8

16.8

2005:
7 Communities, 1 Office
Building, 3 Land Parcels (4)

382,720

199,766

14,929

184,838

3.8

18.0

2006:
3 Communities, 1 Land Parcel

197,750

110,577

19,083

91,494

4.4

16.6

1998 - 2006 Total

6.1

2,261,386

842,093

191,880

650,214

6.3

15.6


(1)		For purposes of this attachment, land sales and the disposition of an office building are not included in the calculation of Weighted Average Holding Period, Weighted Average Initial Year Market Cap Rate, or Weighted Average Unleveraged IRR.

(2)		See Attachment #14 Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms.

(3)		2003 GAAP gain, for purposes of this attachment, includes $23,448 related to the sale of a community in which the Company held a 50% membership interest.

(4)		2005 GAAP gain includes the recovery of an impairment loss in the amount of $3,000 recorded in 2002 related to one of the land parcels sold in 2005. This loss was recorded to reflect the land at fair value based on its entitlement status at the time when it was determined planned for disposition.

Attachment 14

AvalonBay Communities, Inc.
Definitions and Reconciliations of Non-GAAP Financial Measures and Other Terms

This release, including its attachments, contains certain non-GAAP financial measures and other terms. The definition and calculation of these non-GAAP financial measures and other terms may differ from the definitions and methodologies used by other REITs and, accordingly, may not be comparable. The non-GAAP financial measures referred to below should not be considered an alternative to net income as an indication of our performance. In addition, these non-GAAP financial measures do not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered as an alternative measure of liquidity or as indicative of cash available to fund cash needs.

FFO is determined based on a definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT). FFO is calculated by the Company as net income or loss computed in accordance with GAAP, adjusted for gains or losses on sales of previously depreciated operating communities, extraordinary gains or losses (as defined by GAAP), cumulative effect of a change in accounting principle and depreciation of real estate assets, including adjustments for unconsolidated partnerships and joint ventures. Management generally considers FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses related to dispositions of previously depreciated operating communities and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help one compare the operating performance of a companys real estate between periods or as compared to different companies. A reconciliation of FFO to net income is as follows (dollars in thousands):


	Q2			Q2			YTD			YTD
	2006			2005			2006			2005
Net income	$	69,969		$	56,911		$	184,046		$	126,521
Dividends attributable to preferred stock		(2,175	)		(2,175	)		(4,350	)		(4,350	)
Depreciation real estate assets, including discontinued operations and joint venture adjustments		41,609			39,933			81,871			80,884
Minority interest, including discontinued operations		99			303			198			780
Gain on sale of previously depreciated real estate assets		(31,992	)		(22,647	)		(97,411	)		(60,261	)

FFO attributable to common stockholders	$	77,510		$	72,325		$	164,354		$	143,574


Average shares outstanding diluted		75,361,911			74,589,236			75,285,946			74,417,505

EPS diluted	$	0.90		$	0.74		$	2.39		$	1.65

FFO per common share diluted	$	1.03		$	0.97	(1)	$	2.18	(2)	$	1.93	(3)


(1)		FFO per common share - diluted for the three months ended June 30, 2005 includes gains on the sale of two land parcels, partially offset by the accrual of costs related to various litigation matters, totaling $0.04 per share.

(2)		FFO per common share - diluted for the six months ended June 30, 2006 includes $0.17 per share related to the sale of a land parcel.

(3)		FFO per common share - diluted for the six months ended June 30, 2005 includes the items in (1) above, as well as the following non-routine items, totaling $0.11 per share:



		- Gain on sale of a technology investment; and

		- Income related to the impact of the development by a third-party of a hotel adjacent to one of the Companys existing communities; partially offset by

		- Separation costs due to the departure of a senior executive.

Attachment 14 (continued)

Projected FFO, as provided within this release in the Companys outlook, is calculated on a consistent basis as historical FFO, and is therefore considered to be an appropriate supplemental measure to projected net income of projected operating performance. A reconciliation of the range provided for Projected FFO per share (diluted) for the third quarter and full year 2006 to the range provided for projected EPS (diluted) is as follows:


	Low			High
	range			range
Projected EPS (diluted) Q3 06	$	0.49		$	0.53
Projected depreciation (real estate related)		0.55			0.55

Projected FFO per share (diluted) Q3 06	$	1.04		$	1.08


Projected EPS (diluted) Full Year 2006	$	3.68		$	3.78
Projected depreciation (real estate related)		2.17			2.21
Projected gain on sale of operating communities		(1.57	)		(1.61	)

Projected FFO per share (diluted) Full Year 2006	$	4.28		$	4.38

NOI is defined by the Company as total property revenue less direct property operating expenses (including property taxes), and excludes corporate-level income (including management, development and other fees), corporate-level property management and other indirect operating expenses, investments and investment management, net interest expense, general and administrative expense, joint venture income, minority interest, depreciation expense, gain on sale of real estate assets and income from discontinued operations. The Company considers NOI to be an appropriate supplemental measure to net income of operating performance of a community or communities because it helps both investors and management to understand the core operations of a community or communities prior to the allocation of corporate-level property management overhead or general and administrative costs. This is more reflective of the operating performance of a community, and allows for an easier comparison of the operating performance of single assets or groups of assets. In addition, because prospective buyers of real estate have different overhead structures, with varying marginal impact to overhead by acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or groups of assets.

A reconciliation of NOI (from continuing operations) to net income, as well as a breakdown of NOI by operating segment, is as follows (dollars in thousands):


	Q2			Q2			YTD			YTD
	2006			2005			2006			2005
Net income	$	69,969		$	56,911		$	184,046		$	126,521
Property management and other indirect operating expenses		8,307			7,594			16,938			14,722
Corporate-level other income		(1,394	)		(1,441	)		(2,600	)		(2,054	)
Investments and investment management		2,398			1,171			3,869			2,164
Interest expense, net		26,595			32,112			55,259			64,232
General and administrative expense		6,479			6,262			12,762			13,421
Joint venture income and minority interest		(79	)		159			(174	)		(5,910	)
Depreciation expense		41,238			39,377			81,153			78,693
Gain on sale of real estate assets		(31,992	)		(27,264	)		(110,577	)		(64,878	)
Income from discontinued operations		(71	)		(4,222	)		(1,147	)		(8,291	)

NOI from continuing operations	$	121,450		$	110,659		$	239,529		$	218,620


Established:
Northeast	$	34,280		$	32,421		$	67,353		$	64,292
Mid-Atlantic		18,531			16,794			37,021			33,275
Midwest		1,778			1,798			3,444			3,475
Pacific NW		5,338			4,812			10,506			9,608
No. California		25,167			23,125			50,161			45,965
So. California		10,339			9,361			20,538			18,662

Total Established		95,433			88,311			189,023			175,277

Other Stabilized		15,486			14,267			30,764			27,575
Development/Redevelopment		10,531			8,081			19,742			15,768

NOI from continuing operations	$	121,450		$	110,659		$	239,529		$	218,620

Attachment 14 (continued)

NOI as reported by the Company does not include the operating results from discontinued operations (i.e., assets sold during the period January 1, 2005 through June 30, 2006). A reconciliation of NOI from communities sold to net income for these communities is as follows (dollars in thousands):


	Q2		Q2		YTD		YTD
	2006		2005		2006		2005
Income from discontinued operations	$	71	$	4,222	$	1,147	$	8,291
Interest expense, net
Depreciation expense				825				2,615

NOI from discontinued operations	$	71	$	5,047	$	1,147	$	10,906


NOI from assets sold	$	71	$	5,047	$	1,147	$	10,906
NOI from assets held for sale

NOI from discontinued operations	$	71	$	5,047	$	1,147	$	10,906

Projected NOI, as used within this release for certain Development and Redevelopment Communities and in calculating the Initial Year Market Cap Rate for dispositions, represents managements estimate, as of the date of this release (or as of the date of the buyers valuation in the case of dispositions), of projected stabilized rental revenue minus projected stabilized operating expenses. For Development and Redevelopment Communities, Projected NOI is calculated based on the first year of Stabilized Operations, as defined below, following the completion of construction. In calculating the Initial Year Market Cap Rate, Projected NOI for dispositions is calculated for the first twelve months following the date of the buyers valuation. Projected stabilized rental revenue represents managements estimate of projected gross potential (based on leased rents for occupied homes and Market Rents, as defined below, for vacant homes) minus projected economic vacancy and adjusted for concessions. Projected stabilized operating expenses do not include interest, income taxes (if any), depreciation or amortization, or any allocation of corporate-level property management overhead or general and administrative costs. The weighted average Projected NOI as a percentage of Total Capital Cost is weighted based on the Companys share of the Total Capital Cost of each community, based on its percentage ownership.

Projected NOI as used within this release for Established Communities Projected NOI growth for the full year 2006 as compared to Established Communities NOI for the full year 2005, represents Established Communities NOI for the six months ended June 30, 2006, as presented elsewhere in this release, plus managements estimate of Established Communities revenue less Established Communities operating expenses for the remainder of 2006.

In this release the Company has not given a projection of NOI on a company-wide basis. Management believes that Projected NOI of the development and redevelopment communities, on an aggregated weighted average basis, assists investors in understanding managements estimate of the likely impact on operations of the Development and Redevelopment Communities (before allocation of any corporate-level property management overhead, general and administrative costs or interest expense) when they are complete and achieve stabilized occupancy. In addition, management believes that Projected NOI growth for Established Communities in the aggregate, provides investors with a better understanding of current trends and apartment market fundamentals. Given the different dates and fiscal years for which NOI is projected for these communities, the projected allocation of corporate-level property management overhead, general and administrative costs and interest expense to communities under development or redevelopment, and to Established Communities is complex, impractical to develop, and of uncertain meaningfulness. Projected NOI of these communities is not a projection of the Companys overall financial performance or cash flow. There can be no assurance that the communities under development or redevelopment, or the Established Communities, will achieve the Projected NOI used in the calculation of weighted average Projected NOI as described in this release.

Rental Revenue with Concessions on a Cash Basis is considered by the Company to be a supplemental measure to rental revenue in conformity with GAAP in helping investors to evaluate the impact of both current and historical concessions on GAAP based rental revenue and to more readily enable comparisons to revenue as reported by other companies. In addition, rental revenue (with concessions on a cash basis) allows an investor to understand the historical trend in cash concessions. A reconciliation of rental revenue from Established Communities in conformity with GAAP to rental revenue (with concessions on a cash basis) is as follows (dollars in thousands):

Attachment 14 (continued)


	Q2			Q 2
	2006			2005
Rental revenue (GAAP basis)	$	138,384		$	129,813
Concessions amortized		3,384			5,191
Concessions granted		(1,755	)		(4,940	)

Rental revenue (with concessions on a cash basis)	$	140,013		$	130,064


% change GAAP revenue		6.6	%

% change cash revenue		7.6	%

Economic Gain is calculated by the Company as the gain on sale in accordance with GAAP, less accumulated depreciation through the date of sale and any other non-cash adjustments that may be required under GAAP accounting. Management generally considers Economic Gain to be an appropriate supplemental measure to gain on sale in accordance with GAAP because it helps investors to understand the relationship between the cash proceeds from a sale and the cash invested in the sold community. The Economic Gain for each of the communities presented is estimated based on their respective final settlement statements. A reconciliation of Economic Gain for the six months ended June 30, 2006 to gain on sale in accordance with GAAP is presented on Attachment 13.

Interest Coverage is calculated by the Company as EBITDA from continuing operations, excluding land gains, divided by the sum of interest expense, net, and preferred dividends. Interest Coverage is presented by the Company because it provides rating agencies and investors an additional means of comparing our liquidity to that of other companies. EBITDA is defined by the Company as net income before interest income and expense, income taxes, depreciation and amortization.

A reconciliation of EBITDA and a calculation of Interest Coverage for the second quarter of 2006 are as follows (dollars in thousands):


Net income	$	69,969
Interest expense, net		26,595
Depreciation expense		41,238


EBITDA	$	137,802


EBITDA from continuing operations	$	105,739
EBITDA from discontinued operations		32,063


EBITDA	$	137,802


EBITDA from continuing operations	$	105,739

Interest expense, net		26,595
Dividends attributable to preferred stock		2,175

Interest charges		28,770


Interest coverage		3.7

In the calculations of EBITDA above, EBITDA from discontinued operations includes $31,992 in gain on sale of communities.

Total Capital Cost includes all capitalized costs projected to be or actually incurred to develop the respective Development or Redevelopment Community, or Development Right, including land acquisition costs, construction costs, real estate taxes, capitalized interest and loan fees, permits, professional fees, allocated development overhead and other regulatory fees, all as determined in accordance with GAAP. For Redevelopment Communities, Total Capital Cost excludes costs incurred prior to the start of redevelopment when indicated. With respect to communities where development or redevelopment was completed in a prior or the current period, Total Capital Cost reflects the actual cost incurred, plus any contingency estimate made by management. Total Capital Cost for communities identified as having joint venture ownership, either during construction or upon construction completion, represents the total projected joint venture contribution amount. For joint ventures not in construction, Total Capital Cost is equal to gross real estate value.

Attachment 14 (continued)

Initial Year Market Cap Rate is defined by the Company as Projected NOI of a single community for the first 12 months of operations (assuming no repositioning), less estimates for non-routine allowance of approximately $200 $300 per apartment home, divided by the gross sales price for the community. The gross sales price is adjusted for transaction costs and deferred maintenance in determining the Initial Year Market Cap Rate for acquisitions. Projected NOI, as referred to above, represents managements estimate of projected rental revenue minus projected operating expenses before interest, income taxes (if any), depreciation, amortization and extraordinary items. For this purpose, managements projection of operating expenses for the community includes a management fee of 3.0% 3.5%. The Initial Year Market Cap Rate, which may be determined in a different manner by others, is a measure frequently used in the real estate industry when determining the appropriate purchase price for a property or estimating the value for the property. Buyers may assign different Initial Year Market Cap Rates to different communities when determining the appropriate value because they (i) may project different rates of change in operating expenses and capital expenditure estimates and (ii) may project different rates of change in future rental revenue due to different estimates for changes in rent and occupancy levels. The weighted average Initial Year Market Cap Rate is weighted based on the gross sales price of each community (for dispositions) and on the expected total investment in each community (for acquisitions).

Unleveraged IRR on sold communities refers to the internal rate of return calculated by the Company considering the timing and amounts of (i) total revenue during the period owned by the Company and (ii) the gross sales price net of selling costs, offset by (iii) the undepreciated capital cost of the communities at the time of sale and (iv) total direct operating expenses during the period owned by the Company. Each of the items (i), (ii), (iii) and (iv) are calculated in accordance with GAAP.

The calculation of Unleveraged IRR does not include an adjustment for the Companys general and administrative expense, interest expense, or corporate-level property management and other indirect operating expenses. Therefore, Unleveraged IRR is not a substitute for net income as a measure of our performance. Management believes that the Unleveraged IRR achieved during the period a community is owned by the Company is useful because it is one indication of the gross value created by the Companys acquisition, development or redevelopment, management and sale of the community, before the impact of indirect expenses and Company overhead. The Unleveraged IRR achieved on the communities as cited in this release should not be viewed as an indication of the gross value created with respect to other communities owned by the Company, and the Company does not represent that it will achieve similar Unleveraged IRRs upon the disposition of other communities. The weighted average Unleveraged IRR for sold communities is weighted based on all cash flows over the holding period for each respective community, including net sales proceeds.

Leverage is calculated by the Company as total debt as a percentage of Total Market Capitalization. Total Market Capitalization represents the aggregate of the market value of the Companys common stock, the market value of the Companys operating partnership units outstanding (based on the market value of the Companys common stock), the liquidation preference of the Companys preferred stock and the outstanding principal balance of the Companys debt. Management believes that Leverage can be one useful measure of a real estate operating companys long-term liquidity and balance sheet strength, because it shows an approximate relationship between a companys total debt and the current total market value of its assets based on the current price at which the companys common stock trades. Changes in Leverage also can influence changes in per share results. A calculation of Leverage as of June 30, 2006 is as follows (dollars in thousands):


Total debt	$	2,340,837

Common stock		8,231,895
Preferred stock		100,000
Operating partnership units		16,814
Total debt		2,340,837

Total market capitalization		10,689,546


Debt as % of capitalization		21.9	%

Because Leverage changes with fluctuations in the Companys stock price, which occurs regularly, the Companys Leverage may change even when the Companys earnings, interest and debt levels remain stable. Investors should also note that the net realizable value of the Companys assets in liquidation is not easily determinable and may differ substantially from the Companys Total Market Capitalization.

Attachment 14 (continued)

Unencumbered NOI as calculated by the Company represents NOI generated by real estate assets unencumbered by outstanding secured debt as a percentage of total NOI generated by real estate assets. The Company believes that current and prospective unsecured creditors of the Company view Unencumbered NOI as one indication of the borrowing capacity of the Company. Therefore, when reviewed together with the Companys Interest Coverage, EBITDA and cash flow from operations, the Company believes that investors and creditors view Unencumbered NOI as a useful supplemental measure for determining the financial flexibility of an entity. A calculation of Unencumbered NOI for the six months ended June 30, 2006 is as follows (dollars in thousands):


NOI for Established Communities	$	189,023
NOI for Other Stabilized Communities		30,764
NOI for Development/Redevelopment Communities		19,742
NOI for discontinued operations		1,147

Total NOI generated by real estate assets		240,676
NOI on encumbered assets		37,305

NOI on unencumbered assets		203,371


Unencumbered NOI		84.5	%

Established Communities are identified by the Company as 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 Operations, as defined below, as of the beginning of the prior year. Therefore, for 2006, Established Communities are consolidated communities that have Stabilized Operations as of January 1, 2005 and are not conducting or planning to conduct substantial redevelopment activities within the current year. Established Communities do not include communities that are currently held for sale or planned for disposition during the current year.

Average Rental Rates are calculated by the Company as rental revenue in accordance with GAAP, divided by the weighted average number of occupied apartment homes.

Economic Occupancy is defined as total possible revenue less vacancy loss as a percentage of total possible revenue. Total possible revenue is determined by valuing occupied units at contract rates and vacant units at Market Rents. Vacancy loss is determined by valuing vacant units at current Market Rents. By measuring vacant apartments at their Market Rents, Economic Occupancy takes into account the fact that apartment homes of different sizes and locations within a community have different economic impacts on a communitys gross revenue.

Market Rents as reported by the Company are based on the current market rates set by the managers of the Companys communities based on their experience in renting their communities apartments and publicly available market data. Trends in market rents for a region as reported by others could vary. Market Rents for a period are based on the average Market Rents during that period and do not reflect any impact for cash concessions.

Non-Revenue Generating Capex represents capital expenditures that will not directly result in revenue earnings or expense savings.

Stabilized/Restabilized Operations is defined as the earlier of (i) attainment of 95% physical occupancy or (ii) the one-year anniversary of completion of development or redevelopment.

Average Rent per Home, as calculated for certain Development and Redevelopment Communities in lease-up, reflects (i) actual average leased rents for those apartments leased through the end of the quarter net of estimated stabilized concessions, (ii) estimated market rents net of comparable concessions for all unleased apartments and (iii) includes actual and estimated other rental revenue. For Development and Redevelopment Communities not yet in lease-up, Average Rent per Home reflects managements projected rents.

Development Rights are development opportunities in the early phase of the development process for which the Company either has an option to acquire land or enter into a leasehold interest, for which the Company is the buyer under a long-term conditional contract to purchase land or where the Company owns land to develop a new community. The Company capitalizes related predevelopment costs incurred in pursuit of new developments for which future development is probable.

Form: 8-K

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