Supplemental disclosures of non-cash investing and financing activities:

During the ninethree months ended September 30, 2016:March 31, 2017:

During the ninethree months ended September 30, 2015:March 31, 2016:

AvalonBay Communities, Inc. (the “Company,”"Company," which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its subsidiaries), is a Maryland corporation that has elected to be treated as a real estate investment trust (“REIT”("REIT") for federal income tax purposes under the Internal Revenue Code of 1986 (the “Code”"Code"). The Company focuses on the development, redevelopment, acquisition, ownership and operation of multifamily communities primarily in New England, the New York/New Jersey metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California.

At September 30, 2016,March 31, 2017, the Company owned or held a direct or indirect ownership interest in 261260 operating apartment communities containing 75,25474,952 apartment homes in 10 states and the District of Columbia, of which eightnine communities containing 3,3634,075 apartment homes were under reconstruction.redevelopment. In addition, the Company owned or held a direct or indirect ownership interest in 2224 communities under constructiondevelopment that are expected to contain an aggregate of 7,4547,581 apartment homes when completed. The Company also owned or held a direct or indirect ownership interest in land or rights to land on which the Company expects to develop an additional 28 communities that, if developed as expected, will contain an estimated 9,5509,304 apartment homes.

The interim unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”("GAAP") for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”("SEC"). Certain information and footnote disclosures normally included in financial statements required by GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited financial statements should be read in conjunction with the financial statements and notes included in the Company’s 2015Company's 2016 Annual Report on Form 10-K. The results of operations for the three and nine months ended September 30, 2016March 31, 2017 are not necessarily indicative of the operating results for the full year. Management believes the disclosures are adequate to ensure the information presented is not misleading.  In the opinion of management, all adjustments and eliminations, consisting only of normal, recurring adjustments necessary for a fair presentation of the financial statements for the interim periods, have been included.

Capitalized terms used without definition have meanings provided elsewhere in this Form 10-Q.

Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares outstanding during the period. All outstanding unvested restricted share awards contain rights to non-forfeitable dividends and participate in undistributed earnings with common shareholders and, accordingly, are considered participating securities that are included in the two-class method of computing basic earnings per share (“EPS”("EPS"). Both the unvested restricted shares and other potentially dilutive common shares, and the related impact to earnings, are considered when calculating earnings per share on a diluted basis. The Company’sCompany's earnings per common share are determined as follows (dollars in thousands, except per share data):

All options to purchase shares of common stock outstanding as of September 30,March 31, 2017 and 2016 and 2015 are included in the computation of diluted earnings per share.

TheAs discussed under "Recently Issued and Adopted Accounting Standards," as of January 1, 2017, the Company isadopted the provision of ASU 2016-09 using the modified retrospective approach to recognize forfeitures as they occur. Prior to the adoption of this standard, the Company was required to estimate the forfeiture of stock options and recognizerecognized compensation cost net of the estimated forfeitures. The estimated forfeitures included in compensation cost arewere adjusted to reflect actual forfeitures at the end of the vesting period. The forfeiture rate at September 30, 2016 was 0.8% and is basedchange in accounting principle had an immaterial effect on the average forfeiture activity over a period equalCompany's financial position and no adjustment to retained earnings or the estimated life ofCompany's diluted shares outstanding, as prescribed under the stock options. The application of estimated forfeitures did not materially impact compensation expense formodified retrospective approach, was required in the three and nine months ended September 30, 2016 or 2015.prior year period.

The Company enters into interest rate swap and interest rate cap agreements (collectively, “Hedging Derivatives”"Hedging Derivatives") for interest rate risk management purposes and in conjunction with certain variable rate secured debt to satisfy lender requirements. The Company does not enter into Hedging Derivative transactions for trading or other speculative purposes. The Company assesses the effectiveness of qualifying cash flow and fair value hedges, both at inception and on an on-going basis. Hedge ineffectiveness is reported as a component of general and administrative expenses. The fair values of Hedging Derivatives that are in an asset position are recorded in prepaid expenses and other assets. The fair value of Hedging Derivatives that are in a liability position are included in accrued expenses and other liabilities. The Company does not present or disclose the fair value of Hedging Derivatives on a net basis. Fair value changes for derivatives that are not in qualifying hedge relationships are reported as a component of interest expense, net.  For the Hedging Derivative positions that the Company has determined qualify as effective cash flow hedges, the Company has recorded the effective portion of cumulative changes in the fair value of Hedging Derivatives in other comprehensive income (loss).  Amounts recorded in other comprehensive income (loss) will be reclassified into earnings in the periods in which earnings are affected by the hedged cash flow. The effective portion of the change in fair value of the Hedging Derivatives that the Company has determined qualified as effective fair value hedges is reported as an adjustment to the carrying amount of the corresponding debt being hedged. See Note 10, "Fair Value," for further discussion of derivative financial instruments.

In January 2015, a fire occurred at the Company's Avalon at Edgewater apartment community located in Edgewater, New Jersey.Jersey ("Edgewater"). Edgewater consisted of two residential buildings. One building, containing 240 apartment homes, was destroyed. The second building, containing 168 apartment homes, suffered minimal damage and has been repaired.

The Company has established protocols for processing claims from third parties who suffered losses as a result of the fire, and many third parties have contacted the Company's insurance carrier and settled their claims. See Part II, Item 1, "Legal Proceedings," for further discussion of the lawsuits associated with the Edgewater casualty loss.

Three class action lawsuits have been filed against the Company on behalf of occupants of the destroyed building and consolidated in the United States District Court for the District of New Jersey. The Company has agreed with class counsel to the terms of a proposed settlement which would provide a claims process (with agreed upon protocols for instructing the adjuster as to how to evaluate claims) and, if needed, an arbitration process to determine damage amounts to be paid to individual claimants covered by the class settlement. On July 8, 2016, class counsel filed withIn March 2017 the court a motion forDistrict Court granted preliminary approval of thisthe class action settlement and the Company did not oppose such motion. The Court administratively terminated this motion without prejudice duein July 2017 a fairness hearing will be held to the filing of an appeal of an order denying a motion to intervene indetermine whether the settlement but the Company expects that the motion will be re-filed shortly. The Company cannot predict when or if the court will approve the settlement.receive final approval. A fourth class action, being heard in the same federal court, was filed against the Company on behalf of residents of the second Edgewater building that suffered minimal damage. Recently, a fifth class action lawsuit was filed against the Company seeking to certify a class on behalf of both buildings and other third parties. That action is currently stayed pending the decision by those plaintiffs either to be included in the class settlement or to formally opt-out. In addition to the class action lawsuits described above, 2019 lawsuits representing approximately 141146 individual plaintiffs have been filed and are currently pending in the Superior Court of New Jersey Bergen County - Law Division and 19 of these lawsuits are currently pending.Division. All of these state court cases have been consolidated by the court;court. These plaintiffs, if eligible to be class members under the class settlement that has been preliminarily approved as described above, must formally opt-out of that class action settlement by May 17, 2017 if they want to continue their individual actions. The Company believes that it has meritorious defenses to the extent of damages claimed in all of the suits. There are also threefive subrogation lawsuits that have been filed against the Company by insurers of Edgewater residents who obtained “renter’s insurance”;renters insurance; it is the Company’sCompany's position that in the majority of the applicable leases the residents waived subrogation rights. One of these lawsuits has been dismissed on that basis and the other twofour are currently pending in the United States District Court for the District of New Jersey. The District Court recently denied the Company's motions seeking dismissal on this basis. The Company will reassess the viability of this defense after conducting additional discovery.

Having settled many third party claims through the insurance claims process, the Company currently believes that any potential remaining liability to third parties (including any potential liability to third parties determined in accordance with the class settlement described above, if approved) will not be material to the Company and will in any event be substantially covered by the Company's insurance policies. However, the Company can give no assurances in this regard and continues to evaluate this matter. See Note 5, "Investments in Real Estate Entities," and Part II, Item 1, "Legal Proceedings," for further discussion of the casualty gains and losses and lawsuits associated with the Edgewater casualty loss.

The Company is involved in various other claims and/or administrative proceedings unrelated to the Edgewater casualty loss that arise in the ordinary course of its business. While no assurances can be given, the Company does not currently believe that any of these other outstanding litigation matters, individually or in the aggregate, will have a material adverse effect on its financial condition or results of operations.

The Company accounts for acquisitions of investments in real estate in accordance with the authoritative guidance for the initial measurement, which requires the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree to be recognized at fair value. Typical assets and liabilities acquired include land, building, furniture, fixtures and equipment, debt and identified intangible assets and liabilities, consisting of the value of above or below market leases and in-place leases. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes various sources, including its own analysis of recently acquired and existing comparable properties in its portfolio and other market data. Consideration for acquisitions is typically in the form of cash unless otherwise disclosed. For an acquisition of a business, the allocation of the purchase price is based on the fair value of the net assets, and for an asset acquisition, the allocation of the purchase price is based on the relative fair value of the net assets. Subsequent to the adoption of ASU 2017-01 on October 1, 2016, the Company expects that acquisitions of individual operating communities will generally be viewed as asset acquisitions.

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods.  Actual results could differ from those estimates.

Certain reclassifications have been made to amounts in prior years’years' notes to financial statements to conform to current year presentations as a result of changes in held for sale classification and disposition activity.

In May 2014,February 2017, the FASBFinancial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. This ASU 2014-09, Revenue from Contracts with Customers, a revenue recognition standard that will result in companies recognizing revenue from contracts when control forclarifies the service or product that is the subjectscope of the contract is transferred fromnonfinancial asset guidance and the sellerderecognition of all businesses and nonprofit activities (except those related to conveyances of oil and gas mineral rights or contracts with customers). In addition, the buyer. In August 2015,amendments eliminate the FASB  issued ASU 2015-14, Revenue from Contracts with Customers-Deferralexception in the financial asset guidance for transfers of investments (including equity method investments) in real estate entities and supersede the Effective Date, which defersguidance in the effective dateExchanges of a Nonfinancial Asset for a Noncontrolling Ownership Interest. The amendments also provide guidance on the new revenue recognition standard until the first quarteraccounting of 2018. Subsequently, the FASB has issued multiple ASU’s clarifying ASU 2014-09partial sales of nonfinancial assets and ASU 2015-14. The Company is assessing whether the new standard will havecontributions of nonfinancial assets to a material effect on its financial positionjoint venture or results of operations.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU addresses eight specific cash flow issues including debt prepayment or debt extinguishment costs, proceeds from the settlement of insurance claims, distributions received from equity method investees and separately identifiable cash flows and application of the predominance principle. The new standard requires a retrospective approach. The guidance will be effective in the first quarter of 2018 and allows for early adoption. The Company is assessing whether theadopted this guidance as of January 1, 2017. The new standard willdid not have a material effect on the Company's Condensed Consolidated Statements of Cash Flows.

ASU 2016-02 provides for transition relief, which includes not electing to (i) reassess whether any expired or existing contract is a lease or contains a lease, (ii) reassess the lease classification of any expired or existing leases and (iii) expense any capitalized initial direct costs for any existing leases. The Company anticipates adoption of the standard to have a material impact on its financial position orand results of operations.operations resulting from the recognition of the right to use asset and corresponding lease obligation for its long-term ground leases, currently accounted for as operating leases. The Company will continue to assess the impact of the new standard.

The Company capitalizes interest during the development and redevelopment of real estate assets. Capitalized interest associated with the Company’sCompany's development or redevelopment activities totaled $19,889,000$17,821,000 and $20,356,000$20,609,000 for the three months ended September 30,March 31, 2017 and 2016, and 2015, respectively, and $60,522,000 and $59,186,000 for the nine months ended September 30, 2016 and 2015, respectively.

The Company’sCompany's mortgage notes payable, unsecured notes, variable rate unsecured term loan (the “Term Loan”loans ("Term Loans") and Credit Facility, as defined below, as of September 30, 2016March 31, 2017 and December 31, 20152016 are summarized below (dollars in thousands).below.  The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of September 30, 2016March 31, 2017 and December 31, 2015,2016, as shown in the accompanying Condensed Consolidated Balance Sheets (dollars in thousands) (see Note 6, “Real"Real Estate Disposition Activities”Activities").

The following debt activity occurred during the ninethree months ended September 30, 2016:

At March 31, 2017, the Company has a $1,500,000,000 revolving variable rate unsecured credit facility (the “Credit Facility”) from April 2017 to April 2020, and amended other provisions in the Credit Facility. In addition, pursuant to an option available under the terms of the Credit Facility, with the approval of thea syndicate of lenders, the Company increased the aggregate facility size from $1,300,000,000 to $1,500,000,000banks (the "Credit Facility Increase"Facility"). which matures in April 2020. The Company may further extend the termmaturity for up to nine months, provided the Company is not in default and upon payment of a $1,500,000 extension fee. In connection with the Credit Facility Increase, the applicable margin over reference rates used to determine the applicable interest rates on the Company's borrowings from time to time decreased. The Credit Facility bears interest at varying levels based on the London Interbank Offered Rate ("LIBOR"), rating levels achieved on the Company's unsecured notes and on a maturity schedule selected by the Company. The current stated pricing is LIBOR plus 0.825% per annum (1.36%(1.81% at September 30, 2016)March 31, 2017), assuming a one month borrowing rate. The stated spread over LIBOR can vary from LIBOR plus 0.80% to LIBOR plus 1.55% based on the Company's credit ratings. In addition, a competitive bid option is available for borrowings up to 65% of the Credit Facility amount, which allows banks that are part of the lender consortium to bid to make loans at a rate that is lower than the stated rate if market conditions allow. In connection with the Credit Facility Increase, the annual facility fee was also amended to lower the fee tois 0.125% from 0.15%, resulting in a fee of(or approximately $1,875,000 annually based on the $1,500,000,000 facility size and based on the Company's current credit rating.rating).

The Company had $170,000,000 outstanding under the Credit Facility as of September 30, 2016 and no borrowings outstanding under the Credit Facility as of December 31, 2015. The Companyand had $53,137,000$45,084,000 and $43,049,000$46,711,000 outstanding in letters of credit that reduced the borrowing capacity as of September 30, 2016March 31, 2017 and December 31, 2015,2016, respectively.

In the aggregate, secured notes payable mature at various dates from FebruaryNovember 2017 through July 2066, and are secured by certain apartment communities (with a net carrying value of $3,482,680,000,$3,405,173,000, excluding communities classified as held for sale, as of September 30, 2016)March 31, 2017).

As of September 30, 2016,March 31, 2017, the Company has guaranteed a $100,000,000 of mortgage notesnote payable held by a wholly-owned subsidiaries; allsubsidiary; such mortgage notesnote payable areis consolidated for financial reporting purposes. The weighted average interest rate of the Company’sCompany's fixed rate mortgage notes payable (conventional and tax-exempt) was 4.4% and 4.6% at September 30, 2016both March 31, 2017 and December 31, 2015, respectively.2016.  The weighted average interest rate of the Company’sCompany's variable rate mortgage notes payable (conventional and tax-exempt), the Term Loan and its Credit Facility, including the effect of certain financing related fees, was 2.5% and 2.3% and 1.8% at September 30, 2016March 31, 2017 and December 31, 2015,2016, respectively.

Scheduled payments and maturities of mortgage notes payable and unsecured notes outstanding at September 30, 2016March 31, 2017 are as follows (dollars in thousands):

The Company was in compliance at September 30, 2016March 31, 2017 with customary financial and other covenants under the Credit Facility, the Term Loan,Loans and the Company’sCompany's fixed rate unsecured notes.

The following summarizes the changes in equity for the ninethree months ended September 30, 2016March 31, 2017 (dollars in thousands):

As of September 30, 2016March 31, 2017 and December 31, 2015,2016, the Company’sCompany's charter had authorized for issuance a total of 280,000,000 shares of common stock and 50,000,000 shares of preferred stock.stock for issuance.

During the ninethree months ended September 30, 2016,March 31, 2017, the Company:

Any deferred compensation related to the Company’sCompany's stock option, restricted stock and performance award grants during the ninethree months ended September 30, 2016March 31, 2017 is not reflected on the accompanying Condensed Consolidated Balance Sheet as of September 30, 2016,March 31, 2017, and will not be reflected until recognized as compensation cost.

In December 2015, the Company commenced a fourth continuous equity program ("CEP IV") under which the Company may sell up to $1,000,000,000 of its common stock from time to time. Actual sales will depend on a variety of factors to be determined by the Company, including market conditions, the trading price of the Company's common stock and determinations by the Company of the appropriate sources of funding for the Company. In conjunction with CEP IV, the Company engaged sales agents who will receive compensation of up to 2.0% of the gross sales price for shares sold. CEP IV also allows the Company to enter into forward sale agreements up to $1,000,000,000 in aggregate sales price of its common stock. The Company expects that it will physically settle each forward sale agreement on one or more dates specified by the Company on or prior to the maturity date of that particular forward sale agreement, in which case the Company will expect to receive aggregate net cash proceeds at settlement equal to the number of shares underlying the particular forward agreement multiplied by the relevant forward sale price. However, the Company may also elect to cash settle or net share settle a forward sale agreement. In connection with each forward sale agreement, the Company will pay the relevant forward seller, in the form of a reduced initial forward sale price, a commission of up to 2.0% of the sales prices of all borrowed shares of common stock sold. During the three and nine months ended September 30, 2016,March 31, 2017, the Company sold 306,177 shares at an average sales price of $186.44 per share, for net proceeds of $56,228,000. As of March 31, 2017, the Company had no sales$942,915,000 of shares remaining authorized for issuance under the program and did not enter into any forward sale agreements.this program.

As of September 30, 2016,March 31, 2017, the Company had investments in five unconsolidated real estate entities with ownership interest percentages ranging from 20.0% to 31.3%, excluding development joint ventures and joint ventures formed with Equity Residential as part of the Archstone acquisition. The Company accounts for its investments in unconsolidated real estate entities under the equity method of accounting. The significant accounting policies of the Company’sCompany's unconsolidated real estate entities are consistent with those of the Company in all material respects.

During the ninethree months ended September 30, 2016,March 31, 2017, AvalonBay Value Added Fund II, L.P. ("Fund II") sold two communities:

The Company has an equity interest of 31.3% in Fund II, and upon achievement of a threshold return, the Company has a right to incentive distributions for its promoted interest representingbased on the current returns earned by Fund II, which represents 20.0% of further Fund II distributions, which is in addition to its proportionate share of the remaining 80.0% of distributions. During the ninethree months ended September 30, 2016,March 31, 2017, the Company recognized income of $3,447,000$6,765,000 for its promoted interest, which is reported as a component of equity in (loss) income of unconsolidated real estate entities on the accompanying Condensed Consolidated Statements of Comprehensive Income.

The following is a combined summary of the financial position of the entities accounted for using the equity method discussed above as of the dates presented (dollars in thousands):

The following is a combined summary of the operating results of the entities accounted for using the equity method discussed above for the periods presented (dollars in thousands):

In conjunction with the formation of Fund II and North Point II JV, LP ("AVA North Point"), and the acquisition of the U.S. Fund,Archstone Multifamily Partners AC LP (the "U.S. Fund"), Multifamily Partners AC JV LP (the "AC JV") and Brandywine Apartments of Maryland, LLC ("Brandywine"), the Company incurred costs in excess of its equity in the underlying net assets of the respective investments. These costs represent $38,485,000$37,148,000 and $40,978,000$38,015,000 at September 30, 2016March 31, 2017 and December 31, 2015,2016, respectively, of the Company's respective investment balances. These amounts are being amortized over the lives of the underlying assets as a component of equity in (loss) income of unconsolidated entities on the accompanying Condensed Consolidated Statements of Comprehensive Income.

The Company capitalizes pre-development costs incurred in pursuit of new development opportunities for which the Company currently believes future development is probable (“("Development Rights”Rights"). Future development of these Development Rights is dependent upon various factors, including zoning and regulatory approval, rental market conditions, construction costs and the availability of capital. Initial pre-development costs incurred for pursuits for which future development is not yet considered probable are expensed as incurred. In addition, if the status of a Development Right changes, making future development by the Company no longer probable, any capitalized pre-development costs are expensed. The Company expensed costs related to the abandonment of Development Rights as well as costs incurred in pursuing the acquisition of assets or costs incurred pursuing the disposition of assets for which such acquisition and disposition activity did not occur, in the amounts of $3,804,000$728,000 and $3,391,000$746,000 for the three months ended September 30,March 31, 2017 and 2016, and 2015, respectively, and $7,086,000 and $5,251,000 for the nine months ended September 30, 2016 and 2015, respectively. These costs are included in expensed acquisition, development, and other pursuit costs, net of recoveries on the accompanying Condensed Consolidated Statements of Comprehensive Income. Abandoned pursuit costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods.

The Company evaluates its real estate and other long-lived assets for impairment when potential indicators of impairment exist. Such assets are stated at cost, less accumulated depreciation and amortization, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property or long-lived asset may not be recoverable, the Company assesses its recoverability by comparing the carrying amount of the property or long-lived asset to its estimated undiscounted future cash flows. If the carrying amount exceeds the aggregate undiscounted future cash flows, the Company recognizes an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property or long-lived asset. Based on periodic tests of recoverability of long-lived assets for the three and nine months ended September 30,March 31, 2017 and 2016, and 2015, the Company did not recognize any impairment losses for wholly-owned operating real estate assets.

The Company assesses its portfolio of land held for both development and investment for impairment if the intent of the Company changes with respect to either the development of, or the expected holding period for, the land. During the ninethree months ended September 30,March 31, 2017, the Company recognized an impairment charge of $9,350,000 relating to a land parcel which the Company had acquired for development in 2004 and no longer intends to develop. During the three months ended March 31, 2016, the Company recognized $10,500,000 ofan aggregate impairment charges relatedcharge of $6,500,000 relating to three ancillarytwo undeveloped land parcels. This charge wasThese charges were determined as the excess of the Company's carrying basis over the expected sales price for each parcel, and isthese charges are included in casualty and impairment loss (gain), net on the accompanying Condensed Consolidated Statements of Comprehensive Income. The Company did not recognize any material impairment charges on its investment in land during the three and nine months ended September 30, 2015.

The Company evaluates its unconsolidated investments for other than temporary impairment, considering both the extent and amount by which the carrying value of the investment exceeds the fair value, and the Company’sCompany's intent and ability to hold the investment to recover its carrying value. The Company also evaluates its proportionate share of any impairment of assets held by unconsolidated investments. There were no material other than temporary impairment losses recognized by any of the Company’sCompany's investments in unconsolidated real estate entities during the three and nine months ended September 30, 2016March 31, 2017 and 2015.2016.

During the ninethree months ended September 30,March 31, 2017, the Company recorded a casualty loss of $19,481,000 composed of a charge of $16,361,000 to write-off the net book value of the fixed assets destroyed in the Maplewood casualty loss, and demolition and additional incident expenses of $3,120,000. The casualty loss was partially offset by $17,143,000 of expected property damage insurance proceeds, of which $4,545,000 was received during the three months ended March 31, 2017. The receivable for the remaining $12,598,000 of expected property damage insurance proceeds is included in prepaid expenses and other assets on the accompanying Condensed Consolidated Balance Sheets. The net casualty loss of $2,338,000 is included in casualty and impairment loss (gain), net on the accompanying Condensed Consolidated Statements of Comprehensive Income. See discussion in Note 1, "Organization, Basis of Presentation and Significant Accounting Policies, Legal and Other Contingencies," for further discussion of the Maplewood casualty loss.

During the three months ended March 31, 2016, the Company reached a final insurance settlement for the Company's property damage and lost income for the Edgewater casualty loss, for which itloss. In 2015 and 2016, the Company received aggregate insurance proceeds for Edgewater of $73,150,000, after self-insurance and deductibles, as discussed below.

During the ninethree months ended September 30, 2016,March 31, 2017, the Company sold five wholly-owned operating communities.the following real estate assets.

At September 30, 2016,March 31, 2017, the Company had three communities and three ancillary land parcelsno real estate assets that qualified as held for sale.

The Company’sCompany's reportable operating segments include Established Communities, Other Stabilized Communities, and Development/Redevelopment Communities.  Annually as of January 1, the Company determines which of its communities fall into each of these categories and generally maintains that classification throughout the year for the purpose of reporting segment operations, unless disposition or redevelopment plans regarding a community change.

In addition, the Company owns land for future development and has other corporate assets that are not allocated to an operating segment.

The Company’sCompany's segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing each segment’ssegment's performance. The Company’sCompany's chief operating decision maker is comprised of several members of its executive management team who use net operating income (“NOI”("NOI") as the primary financial measure for Established Communities and Other Stabilized Communities. NOI is defined by the Company as total property revenue less direct property operating expenses (including property taxes), and excluding corporate-level income (including management, development and other fees), corporate-level property management and other indirect operating expenses, investments and investment management expenses, expensed acquisition, development and other pursuit costs, net of recoveries, interest expense, net, loss (gain) loss on extinguishment of debt, net, general and administrative expense, equity in (loss) income of unconsolidated real estate entities, depreciation expense, corporate income tax expense, casualty and impairment loss (gain), net, gain on sale of real estate assets and net operating income from real estate assets sold or held for sale. Although the Company considers NOI a useful measure of a community's or communities' operating performance, NOI should not be considered an alternative to net income or net cash flow from operating activities, as determined in accordance with GAAP. NOI excludes a number of income and expense categories as detailed in the reconciliation of NOI to net income.

A reconciliation of NOI to net income for the three and nine months ended September 30,March 31, 2017 and 2016 and 2015 is as follows (dollars in thousands):

The following is a summary of NOI from real estate assets sold or held for sale for the periods presented (dollars in thousands):

The primary performance measure for communities under development or redevelopment depends on the stage of completion.  While under development, management monitors actual construction costs against budgeted costs as well as lease-up pace and rent levels compared to budget.

The following table provides details of the Company’sCompany's segment information as of the dates specified (dollars in thousands). The segments are classified based on the individual community’scommunity's status at the beginning of the given calendar year. Therefore, each year the composition of communities within each business segment is adjusted. Accordingly, the amounts between years are not directly comparable. Segment information for total revenue and NOI for the three and nine months ended September 30,March 31, 2017 and 2016 and 2015 has been adjusted to exclude the real estate assets that were sold from January 1, 20152016 through September 30, 2016,March 31, 2017, or otherwise qualify as held for sale as of September 30, 2016,March 31, 2017, as described in Note 6, “Real"Real Estate Disposition Activities.”" Segment information for gross real estate as of September 30,March 31, 2017 and 2016 and 2015 has not been adjusted to exclude real estate assets that were sold or otherwise qualified as held for sale subsequent to the respective balance sheet dates.