Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | Apr. 30, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'AVALONBAY COMMUNITIES INC | ' |
Entity Central Index Key | '0000915912 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Mar-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 129,609,154 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Real estate: | ' | ' |
Land | $3,346,202 | $3,315,521 |
Buildings and improvements | 11,460,239 | 11,230,813 |
Furniture, fixtures and equipment | 357,527 | 343,802 |
Total Capitalized Cost | 15,163,968 | 14,890,136 |
Less accumulated depreciation | -2,608,172 | -2,503,902 |
Net operating real estate | 12,555,796 | 12,386,234 |
Construction in progress, including land | 1,646,361 | 1,583,120 |
Land held for development | 250,204 | 300,364 |
Operating real estate assets held for sale, net | ' | 14,491 |
Total real estate, net | 14,452,361 | 14,284,209 |
Cash and cash equivalents | 386,190 | 281,541 |
Cash in escrow | 90,663 | 98,481 |
Resident security deposits | 27,232 | 26,672 |
Investments in unconsolidated real estate entities | 353,510 | 367,866 |
Deferred financing costs, net | 42,181 | 40,677 |
Deferred development costs | 34,305 | 31,592 |
Prepaid expenses and other assets | 183,797 | 197,105 |
Total assets | 15,570,239 | 15,328,143 |
LIABILITIES AND EQUITY | ' | ' |
Unsecured notes, net | 2,844,917 | 2,594,709 |
Mortgage notes payable | 3,536,881 | 3,550,682 |
Dividends payable | 150,309 | 138,476 |
Payables for construction | 94,133 | 94,472 |
Accrued expenses and other liabilities | 241,148 | 243,045 |
Accrued interest payable | 33,285 | 43,353 |
Resident security deposits | 46,493 | 45,485 |
Liabilities related to real estate assets held for sale | ' | 874 |
Total liabilities | 6,947,166 | 6,711,096 |
Redeemable noncontrolling interests | 16,002 | 17,320 |
Equity: | ' | ' |
Preferred stock, $0.01 par value; $25 liquidation preference; 50,000,000 shares authorized at both March 31, 2014 and December 31, 2013; zero shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | ' | ' |
Common stock, $0.01 par value; 280,000,000 shares authorized at March 31, 2014 and December 31, 2013; 129,572,864 and 129,416,695 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively | 1,296 | 1,294 |
Additional paid-in capital | 9,002,260 | 8,988,723 |
Accumulated earnings less dividends | -353,029 | -345,254 |
Accumulated other comprehensive loss | -47,058 | -48,631 |
Total stockholders' equity | 8,603,469 | 8,596,132 |
Noncontrolling interest | 3,602 | 3,595 |
Total equity | 8,607,071 | 8,599,727 |
Total liabilities and equity | $15,570,239 | $15,328,143 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, liquidation preference (in dollars per share) | $25 | $25 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 280,000,000 | 280,000,000 |
Common stock, shares issued | 129,572,864 | 129,416,695 |
Common stock, shares outstanding | 129,572,864 | 129,416,695 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenue: | ' | ' |
Rental and other income | $396,998 | $299,085 |
Management, development and other fees | 3,077 | 2,272 |
Total revenue | 400,075 | 301,357 |
Expenses: | ' | ' |
Operating expenses, excluding property taxes | 98,542 | 71,828 |
Property taxes | 44,485 | 31,902 |
Interest expense, net | 42,533 | 38,174 |
Depreciation expense | 106,367 | 105,559 |
General and administrative expense | 9,236 | 10,039 |
Expensed acquisition, development and other pursuit costs | 715 | 40,059 |
Total expenses | 301,878 | 297,561 |
Equity in income (loss) of unconsolidated entities | 5,223 | -18,564 |
Income (loss) from continuing operations | 103,420 | -14,768 |
Discontinued operations: | ' | ' |
Income from discontinued operations | 310 | 5,746 |
Gain on sale of communities | 37,869 | 84,491 |
Total discontinued operations | 38,179 | 90,237 |
Net income | 141,599 | 75,469 |
Net loss (gain) attributable to noncontrolling interests | 140 | -42 |
Net income attributable to common stockholders | 141,739 | 75,427 |
Other comprehensive income: | ' | ' |
Cash flow hedge losses reclassified to earnings | 1,573 | 1,391 |
Comprehensive income | $143,312 | $76,818 |
Earnings per common share - basic: | ' | ' |
Income (loss) from continuing operations attributable to common stockholders (in dollars per share) | $0.80 | ($0.12) |
Discontinued operations attributable to common stockholders (in dollars per share) | $0.29 | $0.75 |
Net income attributable to common stockholders (in dollars per share) | $1.09 | $0.63 |
Earnings per common share - diluted: | ' | ' |
Income (loss) from continuing operations attributable to common stockholders (in dollars per share) | $0.80 | ($0.12) |
Discontinued operations attributable to common stockholders (in dollars per share) | $0.29 | $0.75 |
Net income attributable to common stockholders (in dollars per share) | $1.09 | $0.63 |
Dividends per common share: (in dollars per share) | $1.16 | $1.07 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $141,599 | $75,469 |
Adjustments to reconcile net income to cash provided by operating activities: | ' | ' |
Depreciation expense | 106,367 | 105,559 |
Depreciation expense from discontinued operations | ' | 4,270 |
Amortization of deferred financing costs | 1,518 | 1,934 |
Amortization of debt premium/discount | -8,774 | -3,538 |
Amortization of stock-based compensation | 3,615 | 2,099 |
Equity in (income) loss of, and return on, unconsolidated entities and noncontrolling interests, net of eliminations | -547 | 16,734 |
Cash flow hedge losses reclassified to earnings | 1,573 | 1,391 |
Gain on sale of real estate assets | -37,869 | -84,491 |
Decrease (increase) in cash in operating escrows | 6,831 | -6,758 |
Decrease (increase) in resident security deposits, prepaid expenses and other assets | 13,655 | -23,299 |
Decrease in accrued expenses, other liabilities and accrued interest payable | -7,651 | -7,982 |
Net cash provided by operating activities | 220,317 | 81,388 |
Cash flows from investing activities: | ' | ' |
Development/redevelopment of real estate assets including land acquisitions and deferred development costs | -266,930 | -221,274 |
Acquisition of real estate assets, including partnership interest | ' | -749,275 |
Capital expenditures - existing real estate assets | -13,709 | -1,852 |
Capital expenditures - non-real estate assets | -9,300 | -1,764 |
Proceeds from sale of real estate, net of selling costs | 52,147 | 327,922 |
Decrease in payables for construction | -339 | -360 |
Decrease (increase) in investments in unconsolidated real estate entities | 13,767 | -2,978 |
Net cash used in investing activities | -224,364 | -649,581 |
Cash flows from financing activities: | ' | ' |
Issuance of common stock | 7,234 | 253 |
Dividends paid | -138,393 | -110,891 |
Repayments of mortgage notes payable, including prepayment penalties | -3,832 | -1,507,243 |
Issuance of unsecured notes | 250,000 | ' |
Repayment of unsecured notes | ' | -100,000 |
Payment of deferred financing costs | -3,022 | ' |
Distributions to DownREIT partnership unitholders | -9 | -8 |
Distributions to joint venture and profit-sharing partners | -82 | -80 |
Redemption of preferred interest obligation | -3,200 | ' |
Net cash provided by (used in) financing activities | 108,696 | -1,717,969 |
Net increase (decrease) in cash and cash equivalents | 104,649 | -2,286,162 |
Cash and cash equivalents, beginning of period | 281,541 | 2,733,618 |
Cash and cash equivalents, end of period | 386,190 | 447,456 |
Cash paid during the period for interest, net of amount capitalized | $55,140 | $45,765 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Mar. 31, 2013 | |
Archstone Enterprise LP | |||
Supplemental disclosures of non-cash investing and financing activities | ' | ' | ' |
Obligation related to outstanding preferred interests | ' | ' | $67,500,000 |
Increase in redeemable noncontrolling interests associated with business acquisition | ' | ' | 13,262,000 |
Value of shares of common stock issued as partial consideration for acquisition | ' | ' | 1,875,210,000 |
Assumed principal amount of indebtedness | ' | ' | 3,512,202,000 |
Number of shares of common stock issued as partial consideration for acquisition | ' | ' | 14,889,706 |
Stock issued in connection with stock grants (in shares) | 104,060 | 119,292 | ' |
Stock issued in connection with stock grants, value | 13,331,000 | 15,394,000 | ' |
Common stock issued through the dividend reinvestment plan (in shares) | 638 | 550 | ' |
Common stock issued through the dividend reinvestment plan | 78,000 | 76,000 | ' |
Number of shares withheld to satisfy employees' tax withholding and other liabilities | 33,365 | 29,219 | ' |
Shares withheld to satisfy employees' tax withholding and other liabilities, value | 3,567,000 | 3,590,000 | ' |
Number of shares forfeited | ' | 9,226 | ' |
Shares cancelled upon forfeiture | ' | 780,000 | ' |
Number of options granted for common stock | ' | 215,230 | ' |
Options granted for common stock, value | ' | 5,768,000 | ' |
Decrease in interest expense, net | ' | 1,414,000 | ' |
Common dividends declared but not paid | 150,304,000 | 138,438,000 | ' |
Decrease in other comprehensive income due to a change in other liabilities | ' | 1,414,000 | ' |
Cash flow hedge losses reclassified to interest expense, net | ' | 1,391,000 | ' |
(Decrease) increase in redeemable noncontrolling interests | -1,081,000 | 526,000 | ' |
Cash flow hedge losses reclassified to earnings | $1,573,000 | $1,391,000 | ' |
Organization_Basis_of_Presenta
Organization, Basis of Presentation and Significant Accounting Policies | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Organization, Basis of Presentation and Significant Accounting Policies | ' | |||||||
Organization, Basis of Presentation and Significant Accounting Policies | ' | |||||||
1. Organization, Basis of Presentation and Significant Accounting Policies | ||||||||
Organization and Basis of Presentation | ||||||||
AvalonBay Communities, Inc. (the “Company,” which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its consolidated subsidiaries), is a Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986 (the “Code”). The Company focuses on the development, acquisition, ownership and operation of apartment communities primarily in high barrier to entry markets of the United States. The Company’s primary markets are located in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest and the Northern and Southern California regions of the United States. | ||||||||
At March 31, 2014, the Company owned or held a direct or indirect ownership interest in 245 operating apartment communities containing 73,195 apartment homes in 12 states and the District of Columbia, of which five communities containing 2,248 apartment homes were under reconstruction. In addition, the Company owned or held a direct or indirect ownership interest in 31 communities under construction that are expected to contain an aggregate of 9,179 apartment homes when completed. The Company also owned or held a direct or indirect ownership interest in land or rights to land in which the Company expects to develop an additional 45 communities that, if developed as expected, will contain an estimated 12,632 apartment homes. | ||||||||
The interim unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission (“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 2013 Annual Report on Form 10-K. The results of operations for the three months ended March 31, 2014 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 the meaning as provided elsewhere in this Form 10-Q. | ||||||||
Earnings per Common Share | ||||||||
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”). 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’s earnings per common share are determined as follows (dollars in thousands, except per share data): | ||||||||
For the three months ended | ||||||||
3/31/14 | 3/31/13 | |||||||
Basic and diluted shares outstanding | ||||||||
Weighted average common shares - basic | 129,288,771 | 119,680,510 | ||||||
Weighted average DownREIT units outstanding | 7,500 | 7,500 | ||||||
Effect of dilutive securities | 333,286 | 423,118 | ||||||
Weighted average common shares - diluted | 129,629,557 | 120,111,128 | ||||||
Calculation of Earnings per Share - basic | ||||||||
Net income attributable to common stockholders | $ | 141,739 | $ | 75,427 | ||||
Net income allocated to unvested restricted shares | (232 | ) | (139 | ) | ||||
Net income attributable to common stockholders, adjusted | $ | 141,507 | $ | 75,288 | ||||
Weighted average common shares - basic | 129,288,771 | 119,680,510 | ||||||
Earnings per common share - basic | $ | 1.09 | $ | 0.63 | ||||
Calculation of Earnings per Share - diluted | ||||||||
Net income attributable to common stockholders | $ | 141,739 | $ | 75,427 | ||||
Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations | 9 | 8 | ||||||
Adjusted net income available to common stockholders | $ | 141,748 | $ | 75,435 | ||||
Weighted average common shares - diluted | 129,629,557 | 120,111,128 | ||||||
Earnings per common share - diluted | $ | 1.09 | $ | 0.63 | ||||
Certain options to purchase shares of common stock in the amounts of 605,899 and 608,148 were outstanding at March 31, 2014 and 2013, respectively, but were not included in the computation of diluted earnings per share because such options were anti-dilutive. | ||||||||
The Company is required to estimate the forfeiture of stock options and recognize compensation cost net of the estimated forfeitures. The estimated forfeitures included in compensation cost are adjusted to reflect actual forfeitures at the end of the vesting period. The forfeiture rate at March 31, 2014 is based on the average forfeiture activity over a period equal to the estimated life of the stock options, and was 1.0%. The application of estimated forfeitures did not materially impact compensation expense for the three months ended March 31, 2014 or 2013. | ||||||||
Derivative Instruments and Hedging Activities | ||||||||
The Company enters into interest rate swap and interest rate cap agreements (collectively, “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 Derivatives transactions for trading or other speculative purposes. The Company assesses both at inception, and on an on-going basis, the effectiveness of qualifying cash flow and fair value hedges. 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. Fair value changes for derivatives that are not in qualifying hedge relationships are reported as a component of interest expense, net. For Hedging Derivatives 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. Amounts recorded in other comprehensive income 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 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. | ||||||||
Legal and Other Contingencies | ||||||||
The Company is involved in various claims and/or administrative proceedings that arise in the ordinary course of the Company’s business. While no assurances can be given, the Company does not believe that any of these outstanding litigation matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial position or results of operations. | ||||||||
Acquisitions of Investments in Real Estate | ||||||||
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, 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, we utilize various sources, including our own analysis of recently acquired and existing comparable properties in our portfolio and other market data. | ||||||||
Use of Estimates | ||||||||
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. | ||||||||
Reclassifications | ||||||||
Certain reclassifications have been made to amounts in prior years’ financial statements to conform to current year presentations as a result of discontinued operations as described in Note 7, “Real Estate Disposition Activity.” | ||||||||
Recently Adopted Accounting Standards | ||||||||
In April 2014, the Financial Accounting Standards Board issued guidance updating the accounting and reporting for discontinued operations. Under the recently issued guidance, only disposals representing a strategic shift in operations (e.g., a disposal of a major geographic area, a major line of business or a major equity method investment) will be presented as discontinued operations. Additionally, the final standard requires expanded disclosures about dispositions that will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations, as well as disposals of a significant part of an entity that does not qualify for discontinued operations reporting. The final standard is effective in the first quarter of 2015 and allows for early adoption. The Company adopted the guidance as of January 1, 2014. |
Interest_Capitalized
Interest Capitalized | 3 Months Ended |
Mar. 31, 2014 | |
Interest Capitalized | ' |
Interest Capitalized | ' |
2. Interest Capitalized | |
The Company capitalizes interest during the development and redevelopment of real estate assets. Capitalized interest associated with the Company’s development or redevelopment activities totaled $19,679,000 and $13,139,000 for the three months ended March 31, 2014 and 2013, respectively. |
Notes_Payable_Unsecured_Notes_
Notes Payable, Unsecured Notes and Credit Facility | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ' | ||||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ' | ||||||||||||
3. Notes Payable, Unsecured Notes and Credit Facility | |||||||||||||
The Company’s mortgage notes payable, unsecured notes, Term Loan and Credit Facility, both as defined below, as of March 31, 2014 and December 31, 2013, are summarized below (dollars in thousands). The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of March 31, 2014 and December 31, 2013, as shown in the Condensed Consolidated Balance Sheets (dollars in thousands) (see Note 7, “Real Estate Disposition Activities”). | |||||||||||||
3/31/14 | 12/31/13 | ||||||||||||
Fixed rate unsecured notes (1) | $ | 2,600,000 | $ | 2,600,000 | |||||||||
Term Loan | 250,000 | — | |||||||||||
Fixed rate mortgage notes payable - conventional and tax-exempt (2) | 2,414,295 | 2,418,389 | |||||||||||
Variable rate mortgage notes payable - conventional and tax-exempt | 1,010,883 | 1,011,609 | |||||||||||
Total notes payable and unsecured notes | 6,275,178 | 6,029,998 | |||||||||||
Credit Facility | — | — | |||||||||||
Total mortgage notes payable, unsecured notes and Credit Facility | $ | 6,275,178 | $ | 6,029,998 | |||||||||
(1) Balances at March 31, 2014 and December 31, 2013 exclude $5,082 and $5,291 of debt discount, respectively, as reflected in unsecured notes, net on the Company’s Condensed Consolidated Balance Sheets. | |||||||||||||
(2) Balances at March 31, 2014 and December 31, 2013 exclude $111,702 and $120,684 of debt premium, respectively, as reflected in mortgage notes payable on the Company’s Condensed Consolidated Balance Sheets. | |||||||||||||
In March 2014, the Company entered into a $300,000,000 variable rate unsecured term loan that matures in March 2021 (the “Term Loan”). At March 31, 2014, the Company had drawn $250,000,000 of the available $300,000,000, with the option to draw the additional $50,000,000 until March 2015. | |||||||||||||
The Company has a $1,300,000,000 revolving variable rate unsecured credit facility with a syndicate of banks (the “Credit Facility”) which matures in April 2017. The Company has the option to extend the maturity by up to one year under two, six month extension options for an aggregate fee of $1,950,000. The Credit Facility bears interest at varying levels based on the London Interbank Offered Rate (“LIBOR”), rating levels achieved on the unsecured notes and on a maturity schedule selected by the Company. The current stated pricing is LIBOR plus 1.05% (1.20% at March 31, 2014), assuming a one month borrowing rate. The annual facility fee is approximately $1,950,000 based on the $1,300,000,000 facility size and based on the Company’s current credit rating. | |||||||||||||
The Company had no borrowings outstanding under the Credit Facility and had $52,300,000 and $65,018,000 outstanding in letters of credit that reduced the borrowing capacity as of March 31, 2014 and December 31, 2013, respectively. | |||||||||||||
In the aggregate, secured notes payable mature at various dates from November 2015 through July 2066, and are secured by certain apartment communities and improved land parcels (with a net carrying value of $4,445,256,000 excluding communities classified as held for sale, as of March 31, 2014). | |||||||||||||
As of March 31, 2014, the Company has guaranteed approximately $289,697,000 of mortgage notes payable held by wholly owned subsidiaries; all such mortgage notes payable are consolidated for financial reporting purposes. The weighted average interest rate of the Company’s fixed rate mortgage notes payable (conventional and tax-exempt) was 4.5% and 3.4% at March 31, 2014 and December 31, 2013, respectively. The weighted average interest rate of the Company’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 1.8% at both March 31, 2014 and December 31, 2013, respectively. | |||||||||||||
Scheduled payments and maturities of mortgage notes payable and unsecured notes outstanding at March 31, 2014 are as follows (dollars in thousands): | |||||||||||||
Stated | |||||||||||||
Secured | Secured | Unsecured | interest rate | ||||||||||
notes | notes | notes | of unsecured | ||||||||||
Year | payments | maturities | maturities | notes | |||||||||
2014 | $ | 12,753 | $ | — | $ | 150,000 | 5.375 | % | |||||
2015 | 16,743 | 603,044 | — | — | |||||||||
2016 | 17,874 | 16,255 | 250,000 | 5.75 | % | ||||||||
2017 | 19,060 | 710,491 | 250,000 | 5.7 | % | ||||||||
2018 | 18,413 | 76,928 | — | — | |||||||||
2019 | 7,145 | 610,811 | — | — | |||||||||
2020 | 6,205 | 50,824 | 250,000 | 6.1 | % | ||||||||
400,000 | 3.625 | % | |||||||||||
2021 | 5,985 | 27,844 | 250,000 | 3.95 | % | ||||||||
250,000 | LIBOR + 1.45 | % | |||||||||||
2022 | 6,352 | — | 450,000 | 2.95 | % | ||||||||
2023 | 6,596 | — | 350,000 | 4.3 | % | ||||||||
250,000 | 3 | % | |||||||||||
Thereafter | 85,878 | 1,125,977 | — | — | |||||||||
$ | 203,004 | $ | 3,222,174 | $ | 2,850,000 | ||||||||
The Company was in compliance at March 31, 2014 with certain customary financial and other covenants under the Credit Facility, the Term Loan, and the Company’s fixed-rate unsecured notes. |
Equity
Equity | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||
Equity | ' | ||||||||||||||||||||||
Equity | ' | ||||||||||||||||||||||
4. Equity | |||||||||||||||||||||||
The following summarizes the changes in equity for the three months ended March 31, 2014 (dollars in thousands): | |||||||||||||||||||||||
Accumulated | Accumulated | Total | |||||||||||||||||||||
Additional | earnings | other | AvalonBay | ||||||||||||||||||||
Common | paid-in | less | comprehensive | stockholders’ | Noncontrolling | Total | |||||||||||||||||
stock | capital | dividends | loss | equity | interests | equity | |||||||||||||||||
Balance at December 31, 2013 | $ | 1,294 | $ | 8,988,723 | $ | (345,254 | ) | $ | (48,631 | ) | $ | 8,596,132 | $ | 3,595 | $ | 8,599,727 | |||||||
Net income attributable to common stockholders | — | — | 141,739 | — | 141,739 | — | 141,739 | ||||||||||||||||
Cash flow hedge loss reclassified to earnings | — | — | — | 1,573 | 1,573 | — | 1,573 | ||||||||||||||||
Change in redemption value of redeemable noncontrolling interest | — | — | 1,081 | — | 1,081 | — | 1,081 | ||||||||||||||||
Noncontrolling interests income allocation | — | — | — | — | — | 7 | 7 | ||||||||||||||||
Dividends declared to common stockholders | — | — | (150,304 | ) | — | (150,304 | ) | — | (150,304 | ) | |||||||||||||
Issuance of common stock, net of withholdings | 2 | 4,033 | (291 | ) | — | 3,744 | — | 3,744 | |||||||||||||||
Amortization of deferred compensation | — | 9,504 | — | — | 9,504 | — | 9,504 | ||||||||||||||||
Balance at March 31, 2014 | $ | 1,296 | $ | 9,002,260 | $ | (353,029 | ) | $ | (47,058 | ) | $ | 8,603,469 | $ | 3,602 | $ | 8,607,071 | |||||||
As of March 31, 2014 and December 31, 2013, the Company’s charter had authorized for issuance a total of 280,000,000 shares of common stock and 50,000,000 shares of preferred stock. | |||||||||||||||||||||||
During the three months ended March 31, 2014, the Company: | |||||||||||||||||||||||
(i) issued 84,836 shares of common stock in connection with stock options exercised; | |||||||||||||||||||||||
(ii) issued 638 common shares through the Company’s dividend reinvestment plan; | |||||||||||||||||||||||
(iii) issued 104,060 common shares in connection with stock grants; and | |||||||||||||||||||||||
(iv) withheld 33,365 common shares to satisfy employees’ tax withholding and other liabilities. | |||||||||||||||||||||||
Any deferred compensation related to the Company’s stock option and restricted stock grants during the three months ended March 31, 2014 is not reflected on the Company’s Condensed Consolidated Balance Sheet as of March 31, 2014, and will not be reflected until earned as compensation cost. | |||||||||||||||||||||||
In August 2012, the Company commenced a third continuous equity program (“CEP III”), under which the Company may sell up to $750,000,000 of shares of its common stock from time to time during a 36-month period. 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 III, the Company engaged sales agents who receive compensation of approximately 1.5% of the gross sales price for shares sold. The Company had no sales under CEP III during the three months ended March 31, 2014, and has $646,274,000 of shares that remain authorized for issuance under this program as of March 31, 2014. |
Archstone_Acquisition
Archstone Acquisition | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Archstone Acquisition | ' | ||||
Archstone Acquisition | ' | ||||
5. Archstone Acquisition | |||||
On February 27, 2013, pursuant to an asset purchase agreement (the “Purchase Agreement”) dated November 26, 2012, by and among the Company, Equity Residential and its operating partnership, ERP Operating Limited Partnership (together, “Equity Residential”), Lehman Brothers Holdings, Inc. (“Lehman”, which term is sometimes used in this report to refer to Lehman Brothers Holdings, Inc., and/or its relevant subsidiary or subsidiaries), and Archstone Enterprise LP (“Archstone,” which has since changed its name to Jupiter Enterprise LP), the Company, together with Equity Residential, acquired, directly or indirectly, all of Archstone’s assets, including all of the ownership interests in joint ventures and other entities owned by Archstone, and assumed Archstone’s liabilities, both known and unknown, with certain limited exceptions. | |||||
Under the terms of the Purchase Agreement, the Company acquired approximately 40% of Archstone’s assets and liabilities and Equity Residential acquired approximately 60% of Archstone’s assets and liabilities (the “Archstone Acquisition”). The Company accounted for the acquisition as a business combination and recorded the purchase price to acquired tangible assets consisting primarily of direct and indirect interests in land and related improvements, buildings and improvements, construction in progress and identified intangible assets and liabilities, consisting primarily of the value of above and below market leases, the value of in-places leases, and acquired management fees, at their fair values. | |||||
During the three months ended March 31, 2013, the Company recognized $69,271,000 in acquisition related expenses associated with the Archstone Acquisition, with $29,457,000 reported as a component of equity in income (loss) of unconsolidated entities, and the balance in expensed acquisition, development, and other pursuit costs on the accompanying Consolidated Statements of Comprehensive Income. | |||||
Consideration | |||||
Pursuant to the Purchase Agreement and separate arrangements between the Company and Equity Residential governing the allocation of liabilities assumed under the Purchase Agreement, the Company’s portion of consideration under the Purchase Agreement consisted of the following: | |||||
· the issuance of 14,889,706 shares of the Company’s common stock, valued at $1,875,210,000 as of the market’s close on the closing date, February 27, 2013; | |||||
· cash payment of approximately $760,000,000; | |||||
· the assumption of consolidated indebtedness with a fair value of approximately $3,732,980,000, as of February 27, 2013, consisting of $3,512,202,000 principal amount of consolidated indebtedness and $220,777,000 representing the amount by which fair value of the aforementioned debt exceeds the principal face value, $70,479,000 of which excess related to $1,477,720,000 principal amount of debt the Company repaid concurrent with the Archstone Acquisition; | |||||
· the acquisition with Equity Residential of interests in entities that have preferred units outstanding, some of which may be presented for redemption from time to time. The Company’s 40% share of the fair value of the collective obligations, including accrued dividends on these outstanding Archstone preferred units as of February 27, 2013, was approximately $67,500,000; and | |||||
· the assumption with Equity Residential of all other liabilities, known or unknown, of Archstone, other than certain excluded liabilities. The Company shares 40% of the responsibility for these liabilities. | |||||
The following table presents information for assets acquired in the Archstone Acquisition that are included in the Company’s Consolidated Statement of Comprehensive Income from the closing date of the acquisition, February 27, 2013, through March 31, 2013 (in thousands). | |||||
For the period including | |||||
February 28, 2013 | |||||
through March 31, 2013 | |||||
Revenues | $ | 36,624 | |||
Income attributable to common shareholders (1) | $ | (22,635 | ) | ||
(1) Amounts exclude acquisition costs for the Archstone Acquisition. | |||||
Pro Forma Information | |||||
The following table presents the Company’s supplemental consolidated pro forma information for the three months ended March 31, 2013, as if the acquisition had occurred on January 1, 2012 (unaudited) (in thousands): | |||||
For the three months | |||||
ended March 31, 2013 | |||||
Revenues | $ | 384,078 | |||
Income from continuing operations | $ | 106,853 | |||
Earnings per common share - diluted (from continuing operations) | $ | 0.84 | |||
The pro forma consolidated results are prepared for informational purposes only, and are based on assumptions and estimates considered appropriate by the Company’s management. However, they are not necessarily indicative of what the Company’s consolidated financial condition or results of operations actually would have been assuming the Archstone Acquisition had occurred on January 1, 2012, nor do they purport to represent the consolidated financial position or results of operations for future periods. |
Investments_in_Real_Estate_Ent
Investments in Real Estate Entities | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Investments in Real Estate Entities | ' | |||||||
Investments in Real Estate Entities | ' | |||||||
6. Investments in Real Estate Entities | ||||||||
Investment in unconsolidated entities | ||||||||
As of March 31, 2014, the Company had investments in seven unconsolidated real estate entities, excluding interest in the Residual JV (as defined in this Form 10-Q), with ownership interest percentages ranging from 15.2% to 31.3%. The Company accounts for its investments in unconsolidated real estate entities under the equity method of accounting. The significant accounting policies of the Company’s unconsolidated real estate entities are consistent with those of the Company in all material respects. | ||||||||
The following is a combined summary of the financial position of the entities accounted for using the equity method as of the dates presented (dollars in thousands): | ||||||||
3/31/14 | 12/31/13 | |||||||
(unaudited) | (unaudited) | |||||||
Assets: | ||||||||
Real estate, net | $ | 1,883,464 | $ | 1,890,496 | ||||
Other assets | 355,135 | 402,644 | ||||||
Total assets | $ | 2,238,599 | $ | 2,293,140 | ||||
Liabilities and partners’ capital: | ||||||||
Mortgage notes payable and credit facility | $ | 1,249,276 | $ | 1,251,067 | ||||
Other liabilities | 39,532 | 29,677 | ||||||
Partners’ capital | 949,791 | 1,012,396 | ||||||
Total liabilities and partners’ capital | $ | 2,238,599 | $ | 2,293,140 | ||||
The following is a combined summary of the operating results of the entities accounted for using the equity method for the periods presented (dollars in thousands): | ||||||||
For the three months ended | ||||||||
(unaudited) | ||||||||
3/31/14 | 3/31/13 | |||||||
Rental and other income | $ | 51,132 | $ | 43,827 | ||||
Operating and other expenses | (21,171 | ) | (17,705 | ) | ||||
Gain on sale of communities | — | 54,051 | ||||||
Interest expense, net | (13,890 | ) | (15,269 | ) | ||||
Depreciation expense | (14,417 | ) | (13,151 | ) | ||||
Net income | $ | 1,654 | $ | 51,753 | ||||
In conjunction with the formation of AvalonBay Value Added Fund, L.P. (“Fund I”) and AvalonBay Value Added Fund II, L.P. (“Fund II”), the Company incurred costs in excess of its equity in the underlying net assets of the respective investments. These costs represent $5,404,000 at March 31, 2014 and $5,439,000 at December 31, 2013 of the respective investment balances. | ||||||||
As part of the formation of Fund I and Fund II, the Company provided separate and distinct guarantees to one of the limited partners in each of the ventures. These guarantees are specific to the respective fund and any impacts or obligation of the Company to perform under one of the guarantees has no impact on the Company’s obligations with respect to the other guarantee. The guarantees provide that, if, upon final liquidation of Fund I or Fund II, the total amount of all distributions to the guaranteed partner during the life of the respective fund (whether from operating cash flow or property sales) does not equal the total capital contributions made by that partner, then the Company will pay the guaranteed partner an amount equal to the shortfall, but in no event more than 10% of the total capital contributions made by the guaranteed partner (maximum of approximately $7,500,000 for Fund I and approximately $8,910,000 for Fund II as of March 31, 2014). As of March 31, 2014, the total amount of all distributions made by Fund I to that partner exceeds the minimum of the total capital contributions made by that partner, satisfying the Company’s guarantee. As of March 31, 2014, the expected realizable value of the real estate assets owned by Fund II is considered adequate to cover such potential payments under a liquidation scenario. The estimated fair value of, and the Company’s obligation under, these guarantees, both at inception and as of March 31, 2014, was not significant and therefore the Company has not recorded any obligation for either of these guarantees as of March 31, 2014. | ||||||||
Expensed Acquisition, Development and Other Pursuit Costs and Impairment of Long-Lived Assets | ||||||||
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”). 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 written off with a charge to expense. 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 disposition activity did not occur, in the amounts of $702,000 and $245,000 for the three months ended March 31, 2014 and 2013, respectively. These costs are included in expensed acquisition, development, and other pursuit costs 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 long-lived asset may not be recoverable, the Company assesses its recoverability by comparing the carrying amount of the 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 long-lived asset. Based on periodic tests of recoverability of long-lived assets, the Company did not record any impairment losses for the three months ended March 31, 2014 and 2013. | ||||||||
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. The Company did not recognize any impairment charges on its investment in land for the three months ended March 31, 2014 and 2013. | ||||||||
The Company also evaluates its unconsolidated investments for impairment, considering both the carrying value of the investment, estimated as the expected proceeds that it would receive if the entity were dissolved and the net assets were liquidated at their current GAAP basis, as well as the Company’s proportionate share of any impairment of assets held by unconsolidated investments. There were no impairment losses recognized by any of the Company’s investments in unconsolidated entities during the three months ended March 31, 2014 and 2013. |
Real_Estate_Disposition_Activi
Real Estate Disposition Activities | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Real Estate Disposition Activities | ' | |||||||
Real Estate Disposition Activities | ' | |||||||
7. Real Estate Disposition Activities | ||||||||
During the three months ended March 31, 2014, the Company sold Avalon Valley located in Danbury, CT. Avalon Valley, containing 268 homes, was sold for $53,325,000. The Company’s gain in accordance with GAAP for the disposition was $37,869,000. | ||||||||
During the three months ended March 31, 2014, the limited partnership that owned Arna Valley View, a 101 apartment home community in Arlington, VA, sold the apartment community. In conjunction with the sale of Arna Valley View, the Company received amounts due for its residual ownership interest of approximately $2,195,000, reported as a component of equity in income (loss) of unconsolidated entities on its Condensed Consolidated Statements of Comprehensive Income, included in this Form 10-Q. | ||||||||
The operations for any real estate assets sold from January 1, 2013 through March 31, 2014, which were classified as held for sale and discontinued operations as of and for the period ended December 31, 2013, have been presented as income from discontinued operations in the accompanying Condensed Consolidated Statements of Comprehensive Income. Accordingly, certain reclassifications have been made to prior years to reflect discontinued operations consistent with current year presentation. | ||||||||
The following is a summary of income from discontinued operations for the periods presented (dollars in thousands): | ||||||||
For the three months ended | ||||||||
(unaudited) | ||||||||
3/31/14 | 3/31/13 | |||||||
Rental income | $ | 579 | $ | 14,002 | ||||
Operating and other expenses | (269 | ) | (3,986 | ) | ||||
Depreciation expense | — | (4,270 | ) | |||||
Income from discontinued operations | $ | 310 | $ | 5,746 | ||||
Segment_Reporting
Segment Reporting | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Segment Reporting | ' | ||||||||||||
Segment Reporting | ' | ||||||||||||
8. Segment Reporting | |||||||||||||
The Company’s reportable operating segments include Established Communities, Other Stabilized Communities, and Development/Redevelopment Communities. Annually as of January 1st, 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. The Company expects to update its operating segments on April 1, 2014, primarily to include communities acquired as part of the Archstone Acquisition, as described in Note 5, “Archstone Acquisition,” in its Established Community portfolio. | |||||||||||||
In addition, the Company owns land for future development and has other corporate assets that are not allocated to an operating segment. | |||||||||||||
The Company’s segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing each segment’s performance. The Company’s chief operating decision maker is comprised of several members of its executive management team who use net operating income (“NOI”) as the primary financial measure for Established Communities and Other Stabilized Communities. NOI is defined by the Company as total revenue less direct property operating expenses. 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 months ended March 31, 2014 and 2013 is as follows (dollars in thousands): | |||||||||||||
For the three months ended | |||||||||||||
3/31/14 | 3/31/13 | ||||||||||||
Net income | $ | 141,599 | $ | 75,469 | |||||||||
Indirect operating expenses, net of corporate income | 10,818 | 9,041 | |||||||||||
Investments and investment management expense | 979 | 1,015 | |||||||||||
Expensed acquisition, development and other pursuit costs | 715 | 40,059 | |||||||||||
Interest expense, net | 42,533 | 38,174 | |||||||||||
General and administrative expense | 9,236 | 10,039 | |||||||||||
Equity in loss (income) of unconsolidated entities | (5,223 | ) | 18,564 | ||||||||||
Depreciation expense | 106,367 | 105,559 | |||||||||||
Gain on sale of real estate assets | (37,869 | ) | (84,491 | ) | |||||||||
Income from discontinued operations | (310 | ) | (5,746 | ) | |||||||||
Net operating income | $ | 268,845 | $ | 207,683 | |||||||||
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’s segment information as of the dates specified (dollars in thousands). The segments are classified based on the individual community’s status as of 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 the three months ended March 31, 2014 and 2013 has been adjusted for the real estate assets that were both sold between January 1, 2013 and March 31, 2014, and qualified as discontinued operations as of December 31, 2013, as described in Note 7, “Real Estate Disposition Activities.” | |||||||||||||
For the three months ended | |||||||||||||
Total | % NOI change | Gross | |||||||||||
revenue | NOI | from prior year | real estate (1) | ||||||||||
For the period ended March 31, 2014 | |||||||||||||
Established | |||||||||||||
New England | $ | 48,630 | $ | 29,904 | (2.0 | )% | $ | 1,489,948 | |||||
Metro NY/NJ | 72,354 | 50,019 | 1.3 | % | 2,187,554 | ||||||||
Mid-Atlantic | 24,647 | 17,455 | (3.0 | )% | 644,657 | ||||||||
Pacific Northwest | 13,129 | 9,134 | 3.2 | % | 498,710 | ||||||||
Northern California | 42,219 | 32,834 | 11.4 | % | 1,400,087 | ||||||||
Southern California | 34,149 | 23,352 | 4.2 | % | 1,217,764 | ||||||||
Total Established | 235,128 | 162,698 | 2.6 | % | 7,438,720 | ||||||||
Other Stabilized | 132,320 | 90,071 | N/A | 6,543,948 | |||||||||
Development / Redevelopment | 29,550 | 16,076 | N/A | 2,786,334 | |||||||||
Land Held for Future Development | N/A | N/A | N/A | 250,204 | |||||||||
Non-allocated (2) | 3,077 | N/A | N/A | 41,327 | |||||||||
Total | $ | 400,075 | $ | 268,845 | 29.3 | % | $ | 17,060,533 | |||||
For the period ended March 31, 2013 | |||||||||||||
Established | |||||||||||||
New England | $ | 43,350 | $ | 27,712 | 1.7 | % | $ | 1,360,858 | |||||
Metro NY/NJ | 61,244 | 42,439 | 5.5 | % | 1,915,890 | ||||||||
Mid-Atlantic | 25,035 | 18,188 | 1.6 | % | 631,207 | ||||||||
Pacific Northwest | 11,376 | 7,850 | 10.5 | % | 443,564 | ||||||||
Northern California | 34,064 | 25,609 | 11.4 | % | 1,231,893 | ||||||||
Southern California | 26,910 | 18,463 | 5.9 | % | 987,209 | ||||||||
Total Established | 201,979 | 140,261 | 5.5 | % | 6,570,621 | ||||||||
Other Stabilized | 73,932 | 51,433 | N/A | 6,733,024 | |||||||||
Development / Redevelopment | 23,174 | 15,989 | N/A | 1,915,146 | |||||||||
Land Held for Future Development | N/A | N/A | N/A | 359,029 | |||||||||
Non-allocated (2) | 2,272 | N/A | N/A | 69,318 | |||||||||
Total | $ | 301,357 | $ | 207,683 | 29.1 | % | $ | 15,647,138 | |||||
(1) Does not include gross real estate assets held for sale of $510,623 as of March 31, 2013. | |||||||||||||
(2) Revenue represents third party management, asset management and developer fees and miscellaneous income which are not allocated to a reportable segment. |
StockBased_Compensation_Plans
Stock-Based Compensation Plans | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Stock-Based Compensation Plans | ' | |||||||||||
Stock-Based Compensation Plans | ' | |||||||||||
9. Stock-Based Compensation Plans | ||||||||||||
Information with respect to stock options granted under the Company’s 1994 Stock Option and Incentive Plan (the “1994 Plan”) and its 2009 Stock Option and Incentive Plan (the “2009 Plan”) are as follows (dollars in thousands, other than per share amounts): | ||||||||||||
Weighted | Weighted | |||||||||||
average | average | |||||||||||
2009 Plan | exercise price | 1994 Plan | exercise price | |||||||||
shares | per share | shares | per share | |||||||||
Options Outstanding, December 31, 2013 | 501,568 | $ | 120.77 | 691,526 | $ | 106.19 | ||||||
Exercised | (37,572 | ) | 111.34 | (47,264 | ) | 80.37 | ||||||
Forfeited | — | — | (550 | ) | 49.09 | |||||||
Options Outstanding, March 31, 2014 | 463,996 | $ | 121.53 | 643,712 | $ | 108.13 | ||||||
Options Exercisable March 31, 2014 | 285,517 | $ | 116.32 | 643,712 | $ | 108.13 | ||||||
During the three months ended March 31, 2014, the Company issued 104,060 shares of restricted stock with a fair value of $13,331,000. The Company granted 131,941 restricted stock units with an estimated aggregate compensation cost of $15,627,000, as part of its stock-based compensation plan, during the three months ended March 31, 2014. The amount of restricted stock ultimately earned is based on the total shareholder return metrics related to the Company’s common stock for 57,493 restricted units, with the remaining amount to be earned for the balance of the grant determined by operating performance metrics. For the portion of the grant for which the award is determined by the total shareholder return of the Company’s common stock, the Company used a Monte Carlo model to assess the compensation cost associated with the restricted stock units. The estimated compensation cost was derived using the following assumptions: baseline share value of $128.97; dividend yield of approximately 3.5%; estimated volatility figures ranging from 17.6% to 18.6% over the life of the plan for the Company using 50% historical volatility and 50% implied volatility; and risk free rates over the life of the plan ranging from 0.04% to 0.72%, resulting in an average estimated fair value per restricted stock unit of $104.80. | ||||||||||||
At March 31, 2014, the Company had 211,967 outstanding unvested shares granted under restricted stock awards. Restricted stock vesting during the three months ended March 31, 2014 totaled 74,091 shares and had fair values at the grant date ranging from $74.20 to $149.05 per share. The total grant date fair value of shares vested was $8,763,000 and $8,981,000 for the three months ended March 31, 2014 and 2013, respectively. | ||||||||||||
Total employee stock-based compensation cost recognized in income was $3,154,000 and $5,617,000 for the three months ended March 31, 2014 and 2013, respectively, and total capitalized stock-based compensation cost was $1,435,000 and $1,860,000 for the three months ended March 31, 2014 and 2013, respectively. At March 31, 2014, there was a total of $2,242,000 and $32,631,000 in unrecognized compensation cost for unvested stock options and unvested restricted stock and restricted stock units, respectively, which does not include estimated forfeitures. The unrecognized compensation cost for unvested stock options, and restricted stock and restricted stock units is expected to be recognized over a weighted average period of 1.65 years and 4.16 years, respectively. |
Related_Party_Arrangements
Related Party Arrangements | 3 Months Ended |
Mar. 31, 2014 | |
Related Party Arrangements | ' |
Related Party Arrangements | ' |
10. Related Party Arrangements | |
Unconsolidated Entities | |
The Company manages unconsolidated real estate entities for which it receives asset management, property management, development and redevelopment fee revenue. From these entities, the Company earned fees of $3,077,000 and $2,272,000 in the three months ended March 31, 2014 and 2013, respectively. These fees are included in management, development and other fees on the accompanying Condensed Consolidated Statements of Comprehensive Income. In addition, the Company has outstanding receivables associated with its management role of $7,595,000 and $7,004,000 as of March 31, 2014 and December 31, 2013, respectively. | |
Director Compensation | |
The Company recorded non-employee director compensation expense relating to restricted stock grants and deferred stock awards in the amount of $156,000 and $256,000, in the three months ended March 31, 2014 and 2013, respectively, as a component of general and administrative expense. Deferred compensation relating to restricted stock grants and deferred stock awards to non-employee directors was $167,000 and $417,000 on March 31, 2014 and December 31, 2013, respectively. |
Fair_Value
Fair Value | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Fair Value | ' | |||||||||||||
Fair Value | ' | |||||||||||||
11. Fair Value | ||||||||||||||
Financial Instruments Carried at Fair Value | ||||||||||||||
Derivative Financial Instruments | ||||||||||||||
Currently, the Company uses interest rate cap agreements to manage its interest rate risk. These instruments are carried at fair value in the Company’s financial statements. In adjusting the fair value of its derivative contracts for the effect of counterparty nonperformance risk, the Company has considered the impact of its net position with a given counterparty, as well as any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. The Company minimizes its credit risk on these transactions by dealing with major, creditworthy financial institutions which have an A or better credit rating by the Standard & Poor’s Ratings Group. As part of its on-going control procedures, the Company monitors the credit ratings of counterparties and the exposure of the Company to any single entity, thus reducing credit risk concentration. The Company believes the likelihood of realizing losses from counterparty nonperformance is remote. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives use Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. As of March 31, 2014, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined it is not significant. As a result, the Company has determined that its derivative valuations are classified in Level 2 of the fair value hierarchy. | ||||||||||||||
Hedge ineffectiveness did not have a material impact on earnings of the Company for the three months ended March 31, 2014, or any prior period, and the Company does not anticipate that it will have a material effect in the future. | ||||||||||||||
The following table summarizes the consolidated Hedging Derivatives at March 31, 2014, excluding derivatives executed to hedge debt on communities classified as held for sale (dollars in thousands): | ||||||||||||||
Non- | ||||||||||||||
designated | Cash Flow | |||||||||||||
Hedges | Hedges | |||||||||||||
Interest | Interest | |||||||||||||
Rate Caps | Rate Caps | |||||||||||||
Notional balance | $ | 610,685 | $ | 133,945 | ||||||||||
Weighted average interest rate (1) | 1.70% | 2.50% | ||||||||||||
Weighted average capped interest rate | 5.90% | 4.90% | ||||||||||||
Earliest maturity date | 14-Aug | 15-Apr | ||||||||||||
Latest maturity date | 18-Aug | 15-Jun | ||||||||||||
(1)Represents the weighted average interest rate on the hedged debt. | ||||||||||||||
Excluding derivatives executed to hedge secured debt on communities classified as held for sale, the Company had three derivatives designated as cash flow hedges and 14 derivatives not designated as hedges at March 31, 2014. Fair value changes for derivatives not in qualifying hedge relationships for the three months ended at March 31, 2014 were not material. Fair value changes for derivatives not in qualifying hedge relationships for the three months ended March 31, 2013 resulted in an unrecognized gain of approximately $1,414,000, included in interest expense, net in the Condensed Consolidated Statements of Comprehensive Income. The Company reclassified $1,573,000 and $1,391,000 of deferred losses from accumulated other comprehensive income as a charge to earnings, for the three months ended March 31, 2014 and 2013, respectively. The Company anticipates reclassifying approximately $5,493,000 of hedging losses from accumulated other comprehensive income into earnings within the next 12 months to offset the variability of cash flows of the hedged items during this period. | ||||||||||||||
Redeemable Noncontrolling Interests | ||||||||||||||
The Company provided redemption options (the “Puts”) that allow joint venture partners of the Company to require the Company to purchase their interests in the investment at a guaranteed minimum amount related to three ventures. The Puts are payable in cash. The Company determines the fair value of the Puts based on unobservable inputs considering the assumptions that market participants would make in pricing the obligations, applying a guaranteed rate of return to the joint venture partners’ net capital contribution balances as of period end. Given the significance of the unobservable inputs, the valuations are classified in Level 3 of the fair value hierarchy. | ||||||||||||||
The Company issued units of limited partnership interest in DownREITs which provide the DownREIT limited partners the ability to present all or some of their units for redemption for cash as determined by the partnership agreement. Under the DownREIT agreements, for each limited partnership unit, the limited partner is entitled to receive cash in the amount equal to the fair value of the Company’s common stock on or about the date of redemption. In lieu of cash redemption, the Company may elect to exchange such units for an equal number of shares of the Company’s common stock. The limited partnership units in the DownREITs are valued using the market price of the Company’s common stock, a Level 1 price under the fair value hierarchy. | ||||||||||||||
Financial Instruments Not Carried at Fair Value | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
Cash and cash equivalent balances are held with various financial institutions within principal protected accounts. The Company monitors credit ratings of these financial institutions and the concentration of cash and cash equivalent balances with any one financial institution and believes the likelihood of realizing material losses related to cash and cash equivalent balances is remote. Cash and cash equivalents are carried at their face amounts, which reasonably approximate their fair values and are Level 1 within the fair value hierarchy. | ||||||||||||||
Other Financial Instruments | ||||||||||||||
The Company values its unsecured notes using quoted market prices, a Level 1 price within the fair value hierarchy. The Company values its notes payable and outstanding amounts under the Credit Facility using a discounted cash flow analysis on the expected cash flows of each instrument. This analysis reflects the contractual terms of the instrument, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The process also considers credit valuation adjustments to appropriately reflect the Company’s nonperformance risk. The Company has concluded that the value of its notes payable and amounts outstanding under its Credit Facility and Term Loan are Level 2 prices as the majority of the inputs used to value its positions fall within Level 2 of the fair value hierarchy. | ||||||||||||||
Financial Instruments Measured/Disclosed at Fair Value on a Recurring Basis | ||||||||||||||
The following table summarizes the classification between the three levels of the fair value hierarchy of the Company’s financial instruments measured/disclosed at fair value on a recurring basis (dollars in thousands): | ||||||||||||||
Quoted Prices | Significant | |||||||||||||
in Active | Other | Significant | ||||||||||||
Total Fair Value | Markets for | Observable | Unobservable | |||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||
Description | 3/31/14 | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Interest Rate Caps | $ | 65 | $ | — | $ | 65 | $ | — | ||||||
Puts | (14,582 | ) | — | — | (14,582 | ) | ||||||||
DownREIT units | (985 | ) | (985 | ) | — | — | ||||||||
Indebtedness | (6,604,144 | ) | (2,698,092 | ) | (3,906,052 | ) | — | |||||||
Total | $ | (6,619,646 | ) | $ | (2,699,077 | ) | $ | (3,905,987 | ) | $ | (14,582 | ) | ||
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events | ' |
Subsequent Events | ' |
12. Subsequent Events | |
The Company has evaluated subsequent events through the date on which this Form 10-Q was filed, the date on which these financial statements were issued, and identified the items below for discussion. | |
In April 2014: | |
· Fund I sold Weymouth Place, located in Weymouth, MA. Weymouth Place, containing 211 apartment homes, was sold for $25,750,000. | |
· In conjunction with certain requirements associated with the development of an apartment community, the Company entered into a $53,000,000 secured mortgage maturing in 2019, with an option to extend the maturity to 2024. The mortgage is comprised of a $15,000,000 fixed rate note and a $38,000,000 variable rate note. | |
· The Company repaid $150,000,000 principal amount of its 5.375% coupon unsecured notes pursuant to their scheduled maturity. | |
In 2014, through April 30, 2014, the Residual JV completed the disposition of substantially all of its indirect interest in German multifamily real estate assets as well as the associated property management company. The Company’s pro rata share of the proceeds that have been repatriated to the Residual JV as a result of these dispositions was approximately $40,100,000. |
Organization_Basis_of_Presenta1
Organization, Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Organization, Basis of Presentation and Significant Accounting Policies | ' | |||||||
Organization and Basis of Presentation | ' | |||||||
Organization and Basis of Presentation | ||||||||
AvalonBay Communities, Inc. (the “Company,” which term, unless the context otherwise requires, refers to AvalonBay Communities, Inc. together with its consolidated subsidiaries), is a Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986 (the “Code”). The Company focuses on the development, acquisition, ownership and operation of apartment communities primarily in high barrier to entry markets of the United States. The Company’s primary markets are located in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest and the Northern and Southern California regions of the United States. | ||||||||
At March 31, 2014, the Company owned or held a direct or indirect ownership interest in 245 operating apartment communities containing 73,195 apartment homes in 12 states and the District of Columbia, of which five communities containing 2,248 apartment homes were under reconstruction. In addition, the Company owned or held a direct or indirect ownership interest in 31 communities under construction that are expected to contain an aggregate of 9,179 apartment homes when completed. The Company also owned or held a direct or indirect ownership interest in land or rights to land in which the Company expects to develop an additional 45 communities that, if developed as expected, will contain an estimated 12,632 apartment homes. | ||||||||
The interim unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission (“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 2013 Annual Report on Form 10-K. The results of operations for the three months ended March 31, 2014 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 the meaning as provided elsewhere in this Form 10-Q. | ||||||||
Earnings per Common Share | ' | |||||||
Earnings per Common Share | ||||||||
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”). 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’s earnings per common share are determined as follows (dollars in thousands, except per share data): | ||||||||
For the three months ended | ||||||||
3/31/14 | 3/31/13 | |||||||
Basic and diluted shares outstanding | ||||||||
Weighted average common shares - basic | 129,288,771 | 119,680,510 | ||||||
Weighted average DownREIT units outstanding | 7,500 | 7,500 | ||||||
Effect of dilutive securities | 333,286 | 423,118 | ||||||
Weighted average common shares - diluted | 129,629,557 | 120,111,128 | ||||||
Calculation of Earnings per Share - basic | ||||||||
Net income attributable to common stockholders | $ | 141,739 | $ | 75,427 | ||||
Net income allocated to unvested restricted shares | (232 | ) | (139 | ) | ||||
Net income attributable to common stockholders, adjusted | $ | 141,507 | $ | 75,288 | ||||
Weighted average common shares - basic | 129,288,771 | 119,680,510 | ||||||
Earnings per common share - basic | $ | 1.09 | $ | 0.63 | ||||
Calculation of Earnings per Share - diluted | ||||||||
Net income attributable to common stockholders | $ | 141,739 | $ | 75,427 | ||||
Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations | 9 | 8 | ||||||
Adjusted net income available to common stockholders | $ | 141,748 | $ | 75,435 | ||||
Weighted average common shares - diluted | 129,629,557 | 120,111,128 | ||||||
Earnings per common share - diluted | $ | 1.09 | $ | 0.63 | ||||
Certain options to purchase shares of common stock in the amounts of 605,899 and 608,148 were outstanding at March 31, 2014 and 2013, respectively, but were not included in the computation of diluted earnings per share because such options were anti-dilutive. | ||||||||
The Company is required to estimate the forfeiture of stock options and recognize compensation cost net of the estimated forfeitures. The estimated forfeitures included in compensation cost are adjusted to reflect actual forfeitures at the end of the vesting period. The forfeiture rate at March 31, 2014 is based on the average forfeiture activity over a period equal to the estimated life of the stock options, and was 1.0%. The application of estimated forfeitures did not materially impact compensation expense for the three months ended March 31, 2014 or 2013. | ||||||||
Derivative Instruments and Hedging Activities | ' | |||||||
Derivative Instruments and Hedging Activities | ||||||||
The Company enters into interest rate swap and interest rate cap agreements (collectively, “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 Derivatives transactions for trading or other speculative purposes. The Company assesses both at inception, and on an on-going basis, the effectiveness of qualifying cash flow and fair value hedges. 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. Fair value changes for derivatives that are not in qualifying hedge relationships are reported as a component of interest expense, net. For Hedging Derivatives 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. Amounts recorded in other comprehensive income 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 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. | ||||||||
Legal and Other Contingencies | ' | |||||||
Legal and Other Contingencies | ||||||||
The Company is involved in various claims and/or administrative proceedings that arise in the ordinary course of the Company’s business. While no assurances can be given, the Company does not believe that any of these outstanding litigation matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial position or results of operations. | ||||||||
Acquisitions of Investments in Real Estate | ' | |||||||
Acquisitions of Investments in Real Estate | ||||||||
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, 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, we utilize various sources, including our own analysis of recently acquired and existing comparable properties in our portfolio and other market data. | ||||||||
Use of Estimates | ' | |||||||
Use of Estimates | ||||||||
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. | ||||||||
Reclassifications | ' | |||||||
Reclassifications | ||||||||
Certain reclassifications have been made to amounts in prior years’ financial statements to conform to current year presentations as a result of discontinued operations as described in Note 7, “Real Estate Disposition Activity.” | ||||||||
Recently Adopted Accounting Standards | ' | |||||||
Recently Adopted Accounting Standards | ||||||||
In April 2014, the Financial Accounting Standards Board issued guidance updating the accounting and reporting for discontinued operations. Under the recently issued guidance, only disposals representing a strategic shift in operations (e.g., a disposal of a major geographic area, a major line of business or a major equity method investment) will be presented as discontinued operations. Additionally, the final standard requires expanded disclosures about dispositions that will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations, as well as disposals of a significant part of an entity that does not qualify for discontinued operations reporting. The final standard is effective in the first quarter of 2015 and allows for early adoption. The Company adopted the guidance as of January 1, 2014. |
Organization_Basis_of_Presenta2
Organization, Basis of Presentation and Significant Accounting Policies (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Organization, Basis of Presentation and Significant Accounting Policies | ' | |||||||
Schedule of earnings per common share | ' | |||||||
The Company’s earnings per common share are determined as follows (dollars in thousands, except per share data): | ||||||||
For the three months ended | ||||||||
3/31/14 | 3/31/13 | |||||||
Basic and diluted shares outstanding | ||||||||
Weighted average common shares - basic | 129,288,771 | 119,680,510 | ||||||
Weighted average DownREIT units outstanding | 7,500 | 7,500 | ||||||
Effect of dilutive securities | 333,286 | 423,118 | ||||||
Weighted average common shares - diluted | 129,629,557 | 120,111,128 | ||||||
Calculation of Earnings per Share - basic | ||||||||
Net income attributable to common stockholders | $ | 141,739 | $ | 75,427 | ||||
Net income allocated to unvested restricted shares | (232 | ) | (139 | ) | ||||
Net income attributable to common stockholders, adjusted | $ | 141,507 | $ | 75,288 | ||||
Weighted average common shares - basic | 129,288,771 | 119,680,510 | ||||||
Earnings per common share - basic | $ | 1.09 | $ | 0.63 | ||||
Calculation of Earnings per Share - diluted | ||||||||
Net income attributable to common stockholders | $ | 141,739 | $ | 75,427 | ||||
Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations | 9 | 8 | ||||||
Adjusted net income available to common stockholders | $ | 141,748 | $ | 75,435 | ||||
Weighted average common shares - diluted | 129,629,557 | 120,111,128 | ||||||
Earnings per common share - diluted | $ | 1.09 | $ | 0.63 | ||||
Notes_Payable_Unsecured_Notes_1
Notes Payable, Unsecured Notes and Credit Facility (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ' | ||||||||||||
Summary of company's mortgage notes payable, unsecured notes and Credit Facility excluding mortgage notes secured by communities classified as held for sale | ' | ||||||||||||
The following amounts and discussion do not include the mortgage notes related to the communities classified as held for sale, if any, as of March 31, 2014 and December 31, 2013, as shown in the Condensed Consolidated Balance Sheets (dollars in thousands) (see Note 7, “Real Estate Disposition Activities”). | |||||||||||||
3/31/14 | 12/31/13 | ||||||||||||
Fixed rate unsecured notes (1) | $ | 2,600,000 | $ | 2,600,000 | |||||||||
Term Loan | 250,000 | — | |||||||||||
Fixed rate mortgage notes payable - conventional and tax-exempt (2) | 2,414,295 | 2,418,389 | |||||||||||
Variable rate mortgage notes payable - conventional and tax-exempt | 1,010,883 | 1,011,609 | |||||||||||
Total notes payable and unsecured notes | 6,275,178 | 6,029,998 | |||||||||||
Credit Facility | — | — | |||||||||||
Total mortgage notes payable, unsecured notes and Credit Facility | $ | 6,275,178 | $ | 6,029,998 | |||||||||
(1) Balances at March 31, 2014 and December 31, 2013 exclude $5,082 and $5,291 of debt discount, respectively, as reflected in unsecured notes, net on the Company’s Condensed Consolidated Balance Sheets. | |||||||||||||
(2) Balances at March 31, 2014 and December 31, 2013 exclude $111,702 and $120,684 of debt premium, respectively, as reflected in mortgage notes payable on the Company’s Condensed Consolidated Balance Sheets. | |||||||||||||
Scheduled payments and maturities of mortgage notes payable and unsecured notes outstanding | ' | ||||||||||||
Scheduled payments and maturities of mortgage notes payable and unsecured notes outstanding at March 31, 2014 are as follows (dollars in thousands): | |||||||||||||
Stated | |||||||||||||
Secured | Secured | Unsecured | interest rate | ||||||||||
notes | notes | notes | of unsecured | ||||||||||
Year | payments | maturities | maturities | notes | |||||||||
2014 | $ | 12,753 | $ | — | $ | 150,000 | 5.375 | % | |||||
2015 | 16,743 | 603,044 | — | — | |||||||||
2016 | 17,874 | 16,255 | 250,000 | 5.75 | % | ||||||||
2017 | 19,060 | 710,491 | 250,000 | 5.7 | % | ||||||||
2018 | 18,413 | 76,928 | — | — | |||||||||
2019 | 7,145 | 610,811 | — | — | |||||||||
2020 | 6,205 | 50,824 | 250,000 | 6.1 | % | ||||||||
400,000 | 3.625 | % | |||||||||||
2021 | 5,985 | 27,844 | 250,000 | 3.95 | % | ||||||||
250,000 | LIBOR + 1.45 | % | |||||||||||
2022 | 6,352 | — | 450,000 | 2.95 | % | ||||||||
2023 | 6,596 | — | 350,000 | 4.3 | % | ||||||||
250,000 | 3 | % | |||||||||||
Thereafter | 85,878 | 1,125,977 | — | — | |||||||||
$ | 203,004 | $ | 3,222,174 | $ | 2,850,000 |
Equity_Tables
Equity (Tables) | 3 Months Ended | ||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||
Equity | ' | ||||||||||||||||||||||
Summary of changes in equity | ' | ||||||||||||||||||||||
The following summarizes the changes in equity for the three months ended March 31, 2014 (dollars in thousands): | |||||||||||||||||||||||
Accumulated | Accumulated | Total | |||||||||||||||||||||
Additional | earnings | other | AvalonBay | ||||||||||||||||||||
Common | paid-in | less | comprehensive | stockholders’ | Noncontrolling | Total | |||||||||||||||||
stock | capital | dividends | loss | equity | interests | equity | |||||||||||||||||
Balance at December 31, 2013 | $ | 1,294 | $ | 8,988,723 | $ | (345,254 | ) | $ | (48,631 | ) | $ | 8,596,132 | $ | 3,595 | $ | 8,599,727 | |||||||
Net income attributable to common stockholders | — | — | 141,739 | — | 141,739 | — | 141,739 | ||||||||||||||||
Cash flow hedge loss reclassified to earnings | — | — | — | 1,573 | 1,573 | — | 1,573 | ||||||||||||||||
Change in redemption value of redeemable noncontrolling interest | — | — | 1,081 | — | 1,081 | — | 1,081 | ||||||||||||||||
Noncontrolling interests income allocation | — | — | — | — | — | 7 | 7 | ||||||||||||||||
Dividends declared to common stockholders | — | — | (150,304 | ) | — | (150,304 | ) | — | (150,304 | ) | |||||||||||||
Issuance of common stock, net of withholdings | 2 | 4,033 | (291 | ) | — | 3,744 | — | 3,744 | |||||||||||||||
Amortization of deferred compensation | — | 9,504 | — | — | 9,504 | — | 9,504 | ||||||||||||||||
Balance at March 31, 2014 | $ | 1,296 | $ | 9,002,260 | $ | (353,029 | ) | $ | (47,058 | ) | $ | 8,603,469 | $ | 3,602 | $ | 8,607,071 |
Archstone_Acquisition_Tables
Archstone Acquisition (Tables) | 3 Months Ended | ||||
Mar. 31, 2014 | |||||
Archstone Acquisition | ' | ||||
Schedule of information for assets acquired in the acquisition that is included in the consolidated statement of comprehensive income from the closing date of the acquisition | ' | ||||
The following table presents information for assets acquired in the Archstone Acquisition that are included in the Company’s Consolidated Statement of Comprehensive Income from the closing date of the acquisition, February 27, 2013, through March 31, 2013 (in thousands). | |||||
For the period including | |||||
February 28, 2013 | |||||
through March 31, 2013 | |||||
Revenues | $ | 36,624 | |||
Income attributable to common shareholders (1) | $ | (22,635 | ) | ||
(1) Amounts exclude acquisition costs for the Archstone Acquisition. | |||||
Schedule of company's supplemental consolidated pro forma information | ' | ||||
The following table presents the Company’s supplemental consolidated pro forma information for the three months ended March 31, 2013, as if the acquisition had occurred on January 1, 2012 (unaudited) (in thousands): | |||||
For the three months | |||||
ended March 31, 2013 | |||||
Revenues | $ | 384,078 | |||
Income from continuing operations | $ | 106,853 | |||
Earnings per common share - diluted (from continuing operations) | $ | 0.84 |
Investments_in_Real_Estate_Ent1
Investments in Real Estate Entities (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Investments in Real Estate Entities | ' | |||||||
Combined summary of the financial position of the entities accounted for using the equity method | ' | |||||||
The following is a combined summary of the financial position of the entities accounted for using the equity method as of the dates presented (dollars in thousands): | ||||||||
3/31/14 | 12/31/13 | |||||||
(unaudited) | (unaudited) | |||||||
Assets: | ||||||||
Real estate, net | $ | 1,883,464 | $ | 1,890,496 | ||||
Other assets | 355,135 | 402,644 | ||||||
Total assets | $ | 2,238,599 | $ | 2,293,140 | ||||
Liabilities and partners’ capital: | ||||||||
Mortgage notes payable and credit facility | $ | 1,249,276 | $ | 1,251,067 | ||||
Other liabilities | 39,532 | 29,677 | ||||||
Partners’ capital | 949,791 | 1,012,396 | ||||||
Total liabilities and partners’ capital | $ | 2,238,599 | $ | 2,293,140 | ||||
Combined summary of the operating results of the entities accounted for using the equity method | ' | |||||||
The following is a combined summary of the operating results of the entities accounted for using the equity method for the periods presented (dollars in thousands): | ||||||||
For the three months ended | ||||||||
(unaudited) | ||||||||
3/31/14 | 3/31/13 | |||||||
Rental and other income | $ | 51,132 | $ | 43,827 | ||||
Operating and other expenses | (21,171 | ) | (17,705 | ) | ||||
Gain on sale of communities | — | 54,051 | ||||||
Interest expense, net | (13,890 | ) | (15,269 | ) | ||||
Depreciation expense | (14,417 | ) | (13,151 | ) | ||||
Net income | $ | 1,654 | $ | 51,753 |
Real_Estate_Disposition_Activi1
Real Estate Disposition Activities (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Real Estate Disposition Activities | ' | |||||||
Summary of income from discontinued operations | ' | |||||||
The following is a summary of income from discontinued operations for the periods presented (dollars in thousands): | ||||||||
For the three months ended | ||||||||
(unaudited) | ||||||||
3/31/14 | 3/31/13 | |||||||
Rental income | $ | 579 | $ | 14,002 | ||||
Operating and other expenses | (269 | ) | (3,986 | ) | ||||
Depreciation expense | — | (4,270 | ) | |||||
Income from discontinued operations | $ | 310 | $ | 5,746 |
Segment_Reporting_Tables
Segment Reporting (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Segment Reporting | ' | ||||||||||||
Schedule of reconciliation of NOI to net income | ' | ||||||||||||
A reconciliation of NOI to net income for the three months ended March 31, 2014 and 2013 is as follows (dollars in thousands): | |||||||||||||
For the three months ended | |||||||||||||
3/31/14 | 3/31/13 | ||||||||||||
Net income | $ | 141,599 | $ | 75,469 | |||||||||
Indirect operating expenses, net of corporate income | 10,818 | 9,041 | |||||||||||
Investments and investment management expense | 979 | 1,015 | |||||||||||
Expensed acquisition, development and other pursuit costs | 715 | 40,059 | |||||||||||
Interest expense, net | 42,533 | 38,174 | |||||||||||
General and administrative expense | 9,236 | 10,039 | |||||||||||
Equity in loss (income) of unconsolidated entities | (5,223 | ) | 18,564 | ||||||||||
Depreciation expense | 106,367 | 105,559 | |||||||||||
Gain on sale of real estate assets | (37,869 | ) | (84,491 | ) | |||||||||
Income from discontinued operations | (310 | ) | (5,746 | ) | |||||||||
Net operating income | $ | 268,845 | $ | 207,683 | |||||||||
Schedule of details of segment information | ' | ||||||||||||
The following table provides details of the Company’s segment information as of the dates specified (dollars in thousands). | |||||||||||||
For the three months ended | |||||||||||||
Total | % NOI change | Gross | |||||||||||
revenue | NOI | from prior year | real estate (1) | ||||||||||
For the period ended March 31, 2014 | |||||||||||||
Established | |||||||||||||
New England | $ | 48,630 | $ | 29,904 | (2.0 | )% | $ | 1,489,948 | |||||
Metro NY/NJ | 72,354 | 50,019 | 1.3 | % | 2,187,554 | ||||||||
Mid-Atlantic | 24,647 | 17,455 | (3.0 | )% | 644,657 | ||||||||
Pacific Northwest | 13,129 | 9,134 | 3.2 | % | 498,710 | ||||||||
Northern California | 42,219 | 32,834 | 11.4 | % | 1,400,087 | ||||||||
Southern California | 34,149 | 23,352 | 4.2 | % | 1,217,764 | ||||||||
Total Established | 235,128 | 162,698 | 2.6 | % | 7,438,720 | ||||||||
Other Stabilized | 132,320 | 90,071 | N/A | 6,543,948 | |||||||||
Development / Redevelopment | 29,550 | 16,076 | N/A | 2,786,334 | |||||||||
Land Held for Future Development | N/A | N/A | N/A | 250,204 | |||||||||
Non-allocated (2) | 3,077 | N/A | N/A | 41,327 | |||||||||
Total | $ | 400,075 | $ | 268,845 | 29.3 | % | $ | 17,060,533 | |||||
For the period ended March 31, 2013 | |||||||||||||
Established | |||||||||||||
New England | $ | 43,350 | $ | 27,712 | 1.7 | % | $ | 1,360,858 | |||||
Metro NY/NJ | 61,244 | 42,439 | 5.5 | % | 1,915,890 | ||||||||
Mid-Atlantic | 25,035 | 18,188 | 1.6 | % | 631,207 | ||||||||
Pacific Northwest | 11,376 | 7,850 | 10.5 | % | 443,564 | ||||||||
Northern California | 34,064 | 25,609 | 11.4 | % | 1,231,893 | ||||||||
Southern California | 26,910 | 18,463 | 5.9 | % | 987,209 | ||||||||
Total Established | 201,979 | 140,261 | 5.5 | % | 6,570,621 | ||||||||
Other Stabilized | 73,932 | 51,433 | N/A | 6,733,024 | |||||||||
Development / Redevelopment | 23,174 | 15,989 | N/A | 1,915,146 | |||||||||
Land Held for Future Development | N/A | N/A | N/A | 359,029 | |||||||||
Non-allocated (2) | 2,272 | N/A | N/A | 69,318 | |||||||||
Total | $ | 301,357 | $ | 207,683 | 29.1 | % | $ | 15,647,138 | |||||
(1) Does not include gross real estate assets held for sale of $510,623 as of March 31, 2013. | |||||||||||||
(2) Revenue represents third party management, asset management and developer fees and miscellaneous income which are not allocated to a reportable segment. |
StockBased_Compensation_Plans_
Stock-Based Compensation Plans (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Stock-Based Compensation Plans | ' | |||||||||||
Schedule of information with respect to stock options granted | ' | |||||||||||
Information with respect to stock options granted under the Company’s 1994 Stock Option and Incentive Plan (the “1994 Plan”) and its 2009 Stock Option and Incentive Plan (the “2009 Plan”) are as follows (dollars in thousands, other than per share amounts): | ||||||||||||
Weighted | Weighted | |||||||||||
average | average | |||||||||||
2009 Plan | exercise price | 1994 Plan | exercise price | |||||||||
shares | per share | shares | per share | |||||||||
Options Outstanding, December 31, 2013 | 501,568 | $ | 120.77 | 691,526 | $ | 106.19 | ||||||
Exercised | (37,572 | ) | 111.34 | (47,264 | ) | 80.37 | ||||||
Forfeited | — | — | (550 | ) | 49.09 | |||||||
Options Outstanding, March 31, 2014 | 463,996 | $ | 121.53 | 643,712 | $ | 108.13 | ||||||
Options Exercisable March 31, 2014 | 285,517 | $ | 116.32 | 643,712 | $ | 108.13 |
Fair_Value_Tables
Fair Value (Tables) | 3 Months Ended | |||||||||||||
Mar. 31, 2014 | ||||||||||||||
Fair Value | ' | |||||||||||||
Schedule of summary of consolidated Hedging Derivatives, excluding derivatives executed to hedge debt on communities classified as held for sale | ' | |||||||||||||
The following table summarizes the consolidated Hedging Derivatives at March 31, 2014, excluding derivatives executed to hedge debt on communities classified as held for sale (dollars in thousands): | ||||||||||||||
Non- | ||||||||||||||
designated | Cash Flow | |||||||||||||
Hedges | Hedges | |||||||||||||
Interest | Interest | |||||||||||||
Rate Caps | Rate Caps | |||||||||||||
Notional balance | $ | 610,685 | $ | 133,945 | ||||||||||
Weighted average interest rate (1) | 1.70% | 2.50% | ||||||||||||
Weighted average capped interest rate | 5.90% | 4.90% | ||||||||||||
Earliest maturity date | 14-Aug | 15-Apr | ||||||||||||
Latest maturity date | 18-Aug | 15-Jun | ||||||||||||
(1)Represents the weighted average interest rate on the hedged debt. | ||||||||||||||
Schedule of summary of classification between the three levels of the fair value hierarchy of the Company's financial instruments measured at fair value on a recurring basis | ' | |||||||||||||
The following table summarizes the classification between the three levels of the fair value hierarchy of the Company’s financial instruments measured/disclosed at fair value on a recurring basis (dollars in thousands): | ||||||||||||||
Quoted Prices | Significant | |||||||||||||
in Active | Other | Significant | ||||||||||||
Total Fair Value | Markets for | Observable | Unobservable | |||||||||||
Identical Assets | Inputs | Inputs | ||||||||||||
Description | 3/31/14 | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Interest Rate Caps | $ | 65 | $ | — | $ | 65 | $ | — | ||||||
Puts | (14,582 | ) | — | — | (14,582 | ) | ||||||||
DownREIT units | (985 | ) | (985 | ) | — | — | ||||||||
Indebtedness | (6,604,144 | ) | (2,698,092 | ) | (3,906,052 | ) | — | |||||||
Total | $ | (6,619,646 | ) | $ | (2,699,077 | ) | $ | (3,905,987 | ) | $ | (14,582 | ) |
Organization_Basis_of_Presenta3
Organization, Basis of Presentation and Significant Accounting Policies (Details) | Mar. 31, 2014 |
state | |
home | |
community | |
Organization and Basis of Presentation | ' |
Number of operating apartment communities owned | 245 |
Number of apartment homes included in operating apartment communities owned | 73,195 |
Number of states where operating apartment communities owned are located | 12 |
Number of communities with apartments under reconstruction | 5 |
Number of apartment homes under reconstruction | 2,248 |
Number of owned communities under construction | 31 |
Expected number of apartment homes under construction | 9,179 |
Communities under development rights | 45 |
Estimated number of apartment homes in communities to be developed | 12,632 |
Organization_Basis_of_Presenta4
Organization, Basis of Presentation and Significant Accounting Policies (Details 2) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Basic and diluted shares outstanding | ' | ' |
Weighted average common shares - basic | 129,288,771 | 119,680,510 |
Weighted average DownREIT units outstanding (in shares) | 7,500 | 7,500 |
Effect of dilutive securities (in shares) | 333,286 | 423,118 |
Weighted average common shares - diluted | 129,629,557 | 120,111,128 |
Calculation of Earnings per Share - basic | ' | ' |
Net income attributable to common stockholders | $141,739 | $75,427 |
Net income allocated to unvested restricted shares | -232 | -139 |
Net income attributable to common stockholders, adjusted | 141,507 | 75,288 |
Weighted average common shares - basic | 129,288,771 | 119,680,510 |
Earnings per common share - basic (in dollars per share) | $1.09 | $0.63 |
Calculation of Earnings per Share - diluted | ' | ' |
Net income attributable to common stockholders | 141,739 | 75,427 |
Add: noncontrolling interests of DownREIT unitholders in consolidated partnerships, including discontinued operations | 9 | 8 |
Adjusted net income available to common stockholders | $141,748 | $75,435 |
Weighted average common shares - diluted | 129,629,557 | 120,111,128 |
Earnings per common share - diluted (in dollars per share) | $1.09 | $0.63 |
Options to purchase shares of common stock excluded from computation of earnings per share amount (in shares) | 605,899 | 608,148 |
Estimated forfeiture rate of stock options (as a percent) | 1.00% | ' |
Interest_Capitalized_Details
Interest Capitalized (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Interest Capitalized | ' | ' |
Capitalized interest during the development and redevelopment of real estate assets | $19,679,000 | $13,139,000 |
Notes_Payable_Unsecured_Notes_2
Notes Payable, Unsecured Notes and Credit Facility (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Notes Payable, Unsecured Notes and Credit Facility | ' | ' |
Total notes payable and unsecured notes | $6,275,178 | $6,029,998 |
Total mortgage notes payable, unsecured notes and Credit Facility | 6,275,178 | 6,029,998 |
Unsecured notes | ' | ' |
Notes Payable, Unsecured Notes and Credit Facility | ' | ' |
Fixed rate notes | 2,600,000 | 2,600,000 |
Total notes payable and unsecured notes | 2,850,000 | ' |
Amount of debt discount | 5,082 | 5,291 |
Mortgage notes payable | ' | ' |
Notes Payable, Unsecured Notes and Credit Facility | ' | ' |
Fixed rate notes | 2,414,295 | 2,418,389 |
Variable rate notes | 1,010,883 | 1,011,609 |
Total notes payable and unsecured notes | 3,222,174 | ' |
Amount of debt premium | $111,702 | $120,684 |
Notes_Payable_Unsecured_Notes_3
Notes Payable, Unsecured Notes and Credit Facility (Details 2) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Dec. 31, 2013 | |
item | ||
Mortgage notes payable | ' | ' |
Notes Payable, Unsecured Notes and Credit Facility | ' | ' |
Amount drawn | $1,010,883,000 | $1,011,609,000 |
Mortgage notes payable held by wholly owned subsidiaries guaranteed by the Company | 289,597,000 | ' |
Term Loan | ' | ' |
Notes Payable, Unsecured Notes and Credit Facility | ' | ' |
Principal amount of notes issued | 300,000,000 | ' |
Amount drawn | 250,000,000 | ' |
Additional amount with option to draw | 50,000,000 | ' |
Variable rate unsecured credit facility | ' | ' |
Notes Payable, Unsecured Notes and Credit Facility | ' | ' |
Available borrowing capacity | 1,300,000,000 | ' |
Line of credit facility, extension period | '1 year | ' |
Number of extension options | 2 | ' |
Extension period under each option | '6 months | ' |
Extension fee | 1,950,000 | ' |
Period of borrowing rate assumed | '1 month | ' |
Annual facility fee | 1,950,000 | ' |
Borrowings outstanding under the credit facility | 0 | 0 |
Outstanding balance of letters of credit | 52,300,000 | 65,018,000 |
Net carrying value of apartment communities and improved land parcels securing debt | $4,445,256,000 | ' |
Fixed rate mortgage notes payable | ' | ' |
Notes Payable, Unsecured Notes and Credit Facility | ' | ' |
Weighted average interest rate, debt (as a percent) | 4.50% | 4.50% |
Variable rate mortgage notes payable, unsecured term loan and Credit Facility | ' | ' |
Notes Payable, Unsecured Notes and Credit Facility | ' | ' |
Weighted average interest rate, debt (as a percent) | 1.80% | 1.80% |
LIBOR | Variable rate unsecured credit facility | ' | ' |
Notes Payable, Unsecured Notes and Credit Facility | ' | ' |
Debt instrument variable rate | 'LIBOR | ' |
Debt instrument, basis spread on variable rate (as a percent) | 1.05% | ' |
Current interest rate (as a percent) | 1.20% | ' |
Notes_Payable_Unsecured_Notes_4
Notes Payable, Unsecured Notes and Credit Facility (Details 3) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | Secured notes | Secured notes | Secured notes | Secured notes | Secured notes | Secured notes | Secured notes | Secured notes | Secured notes | Secured notes | Secured notes | Secured notes | Unsecured notes | Unsecured notes | Unsecured notes | Unsecured notes | Unsecured notes | Unsecured notes | Unsecured notes | Unsecured notes | Unsecured notes | Unsecured notes | Unsecured notes | Unsecured notes | ||
Notes payable maturing in 2014 | Notes payable maturing in 2015 | Notes payable maturing in 2016 | Notes payable maturing in 2017 | Notes payable maturing in 2018 | Notes payable maturing in 2019 | Notes Payable 6.100 Percent Maturities 2020 | Notes payable maturing in 2021 | Notes payable maturing in 2022 | Notes payable maturing in 2023 | Notes payable with maturities after 2023 | Notes payable maturing in 2014 | Notes payable maturing in 2016 | Notes payable maturing in 2017 | Notes Payable 6.100 Percent Maturities 2020 | Notes Payable 3.625 Percent Maturities 2020 | Notes payable maturing in 2021 | Notes payable maturing in 2022 | Notes payable maturing in 2023 | Notes payable with maturities after 2023 | Term Loan | Term Loan | |||||
LIBOR | ||||||||||||||||||||||||||
Notes Payable, Unsecured Notes and Credit Facility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Secured notes payments | ' | ' | $203,004 | $12,753 | $16,743 | $17,874 | $19,060 | $18,413 | $7,145 | $6,205 | $5,985 | $6,352 | $6,596 | $85,878 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mortgage notes payable and unsecured notes | $6,275,178 | $6,029,998 | $3,222,174 | ' | $603,044 | $16,255 | $710,491 | $76,928 | $610,811 | $50,824 | $27,844 | ' | ' | $1,125,977 | $2,850,000 | $150,000 | $250,000 | $250,000 | $250,000 | $400,000 | $250,000 | $450,000 | $350,000 | $250,000 | $250,000 | ' |
Stated interest rate of unsecured notes (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.38% | 5.75% | 5.70% | 6.10% | 3.63% | 3.95% | 2.95% | 4.30% | 3.00% | ' | ' |
Debt instrument variable rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'LIBOR |
Debt instrument, basis spread on variable rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.45% |
Equity_Details
Equity (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Changes in equity | ' | ' |
Balance | $8,599,727 | ' |
Net income attributable to common stockholders | 141,739 | ' |
Cash flow hedge loss reclassified to earnings | 1,573 | 1,391 |
Change in redemption value of redeemable noncontrolling interest | 1,081 | ' |
Noncontrolling interests income allocation | 7 | ' |
Dividends declared to common stockholders | -150,304 | -138,438 |
Issuance of common stock, net of withholdings | 3,744 | ' |
Amortization of deferred compensation | 9,504 | ' |
Balance | 8,607,071 | ' |
Common stock | ' | ' |
Changes in equity | ' | ' |
Balance | 1,294 | ' |
Issuance of common stock, net of withholdings | 2 | ' |
Balance | 1,296 | ' |
Additional paid-in capital | ' | ' |
Changes in equity | ' | ' |
Balance | 8,988,723 | ' |
Issuance of common stock, net of withholdings | 4,033 | ' |
Amortization of deferred compensation | 9,504 | ' |
Balance | 9,002,260 | ' |
Accumulated earnings less dividends | ' | ' |
Changes in equity | ' | ' |
Balance | -345,254 | ' |
Net income attributable to common stockholders | 141,739 | ' |
Change in redemption value of redeemable noncontrolling interest | 1,081 | ' |
Dividends declared to common stockholders | -150,304 | ' |
Issuance of common stock, net of withholdings | -291 | ' |
Balance | -353,029 | ' |
Accumulated other comprehensive loss | ' | ' |
Changes in equity | ' | ' |
Balance | -48,631 | ' |
Cash flow hedge loss reclassified to earnings | 1,573 | ' |
Balance | -47,058 | ' |
Total AvalonBay stockholders' equity | ' | ' |
Changes in equity | ' | ' |
Balance | 8,596,132 | ' |
Net income attributable to common stockholders | 141,739 | ' |
Cash flow hedge loss reclassified to earnings | 1,573 | ' |
Change in redemption value of redeemable noncontrolling interest | 1,081 | ' |
Dividends declared to common stockholders | -150,304 | ' |
Issuance of common stock, net of withholdings | 3,744 | ' |
Amortization of deferred compensation | 9,504 | ' |
Balance | 8,603,469 | ' |
Noncontrolling interests | ' | ' |
Changes in equity | ' | ' |
Balance | 3,595 | ' |
Noncontrolling interests income allocation | 7 | ' |
Balance | $3,602 | ' |
Equity_Details_2
Equity (Details 2) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Aug. 31, 2012 | Mar. 31, 2014 | |
CEP III | CEP III | ||||
Equity | ' | ' | ' | ' | ' |
Common stock, shares authorized | 280,000,000 | ' | 280,000,000 | ' | ' |
Preferred stock, shares authorized | 50,000,000 | ' | 50,000,000 | ' | ' |
Common stock shares issued in connection with stock options exercised | 84,836 | ' | ' | ' | ' |
Common stock shares issued through dividend reinvestment plan | 638 | 550 | ' | ' | ' |
Common stock shares issued in connection with stock grants | 104,060 | 119,292 | ' | ' | ' |
Number of shares of stock grants withheld | 33,365 | 29,219 | ' | ' | ' |
Maximum value of shares of common stock that can be sold (in dollars) | ' | ' | ' | $750,000,000 | ' |
Period during which common stock can be sold | ' | ' | ' | '36 months | ' |
Percentage of compensation received by sales agent | ' | ' | ' | ' | 1.50% |
Common stock shares issued | ' | ' | ' | ' | 0 |
Value of additional shares authorized for issuance | ' | ' | ' | ' | $646,274,000 |
Archstone_Acquisition_Details
Archstone Acquisition (Details) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Feb. 27, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Feb. 27, 2013 | |
Archstone | Archstone | Archstone | Archstone | |||
Equity | ||||||
Archstone acquisition | ' | ' | ' | ' | ' | ' |
Percentage of assets and liabilities acquired | ' | ' | 40.00% | ' | ' | 60.00% |
Acquisition related expenses recognized | ' | ' | ' | ' | $69,271,000 | ' |
Acquisition related expenses reported as a component of equity in income (loss) of unconsolidated entities | 5,223,000 | -18,564,000 | ' | ' | 29,457,000 | ' |
Consideration | ' | ' | ' | ' | ' | ' |
Number of shares issued | ' | ' | 14,889,706 | ' | 14,889,706 | ' |
Value of shares issued | ' | ' | 1,875,210,000 | ' | ' | ' |
Cash payment | ' | ' | 760,000,000 | ' | ' | ' |
Fair value of indebtedness assumed | ' | ' | 3,732,980,000 | ' | ' | ' |
Principal amount of consolidated indebtedness | ' | ' | 3,512,202,000 | 3,512,202,000 | 3,512,202,000 | ' |
Debt fair value exceeds the principal face value | ' | ' | 220,777,000 | ' | ' | ' |
Debt fair value exceeds the principal face value relating to debt repaid | ' | ' | 70,479,000 | ' | ' | ' |
Principal face value relating to debt repaid | ' | ' | 1,477,720,000 | ' | ' | ' |
Redemption value of preferred equity | ' | ' | 67,500,000 | 67,500,000 | 67,500,000 | ' |
Information for acquisition that is included in condensed consolidated statement of operations comprehensive income from the acquisition date | ' | ' | ' | ' | ' | ' |
Revenues | 400,075,000 | 301,357,000 | ' | 36,624,000 | ' | ' |
Income (Loss) attributable to common shareholders | 141,739,000 | 75,427,000 | ' | -22,635,000 | ' | ' |
Supplemental consolidated pro forma information | ' | ' | ' | ' | ' | ' |
Revenues | ' | 384,078,000 | ' | ' | ' | ' |
Income from continuing operations | ' | $106,853,000 | ' | ' | ' | ' |
Earnings per common share - diluted (from continuing operations) (in dollars per share) | ' | $0.84 | ' | ' | ' | ' |
Investments_in_Real_Estate_Ent2
Investments in Real Estate Entities (Details) (Unconsolidated real estate entities) | Mar. 31, 2014 |
entity | |
Investment in Real Estate Entities | ' |
Number of unconsolidated real estate entities | 7 |
Minimum | ' |
Investment in Real Estate Entities | ' |
Ownership interest percentage | 15.20% |
Maximum | ' |
Investment in Real Estate Entities | ' |
Ownership interest percentage | 31.30% |
Investments_in_Real_Estate_Ent3
Investments in Real Estate Entities (Details 2) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Assets: | ' | ' | ' |
Real estate, net | $1,883,464,000 | ' | $1,890,496,000 |
Other assets | 355,135,000 | ' | 402,644,000 |
Total assets | 2,238,599,000 | ' | 2,293,140,000 |
Liabilities and partners' capital: | ' | ' | ' |
Mortgage notes payable and credit facility | 1,249,276,000 | ' | 1,251,067,000 |
Other liabilities | 39,532,000 | ' | 29,677,000 |
Partners' capital | 949,791,000 | ' | 1,012,396,000 |
Total liabilities and partners' capital | 2,238,599,000 | ' | 2,293,140,000 |
Combined summary of the operating results of the accounted for using the equity method | ' | ' | ' |
Rental and other income | 51,132,000 | 43,827,000 | ' |
Operating and other expenses | -21,171,000 | -17,705,000 | ' |
Gain on sale of communities | ' | 54,051,000 | ' |
Interest expense, net | -13,890,000 | -15,269,000 | ' |
Depreciation expense | -14,417,000 | -13,151,000 | ' |
Net income | 1,654,000 | 51,753,000 | ' |
Impairment of investment in unconsolidated entities | 0 | 0 | ' |
Expensed Acquisition, Development and Other Pursuit Costs and Impairment of Long-Lived Assets | ' | ' | ' |
Expensed costs related to acquisition, development and other pursuit costs and impairment of long-lived assets | 702,000 | 245,000 | ' |
Fund I | ' | ' | ' |
Combined summary of the operating results of the accounted for using the equity method | ' | ' | ' |
Maximum amount that will be paid for capital contributions made by partners | 7,500,000 | ' | ' |
Fund II | ' | ' | ' |
Combined summary of the operating results of the accounted for using the equity method | ' | ' | ' |
Maximum amount that will be paid for capital contributions made by partners | 8,910,000 | ' | ' |
Fund I and II | ' | ' | ' |
Combined summary of the operating results of the accounted for using the equity method | ' | ' | ' |
Costs in excess of equity in underlying net assets of the respective investments | $5,404,000 | ' | $5,439,000 |
Maximum amount that will be paid for capital contributions made by partners (as a percent) | 10.00% | ' | ' |
Real_Estate_Disposition_Activi2
Real Estate Disposition Activities (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Summary of income from discontinued operations | ' | ' |
Gain on sale of communities | $37,869,000 | $84,491,000 |
Avalon Valley | ' | ' |
Summary of income from discontinued operations | ' | ' |
Apartment homes | 268 | ' |
Net proceeds | 53,325,000 | ' |
Gain on sale of communities | 37,869,000 | ' |
Arna Valley View | ' | ' |
Summary of income from discontinued operations | ' | ' |
Apartment homes | 101 | ' |
Amount received on sale of limited partnership for residual ownership interest | $2,195,000 | ' |
Real_Estate_Disposition_Activi3
Real Estate Disposition Activities (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Summary of income from discontinued operations | ' | ' |
Rental income | $579 | $14,002 |
Operating and other expenses | -269 | -3,986 |
Depreciation expense | ' | -4,270 |
Income from discontinued operations | $310 | $5,746 |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Reconciliation of NOI to net income | ' | ' |
Net income | $141,599 | $75,469 |
Indirect operating expenses, net of corporate income | 10,818 | 9,041 |
Investments and investment management expense | 979 | 1,015 |
Expensed acquisition, development and other pursuit costs | 715 | 40,059 |
Interest expense, net | 42,533 | 38,174 |
General and administrative expense | 9,236 | 10,039 |
Equity in loss (income) of unconsolidated entities | -5,223 | 18,564 |
Depreciation expense | 106,367 | 105,559 |
Gain on sale of real estate assets | -37,869 | -84,491 |
Income from discontinued operations | -310 | -5,746 |
Net operating income | $268,845 | $207,683 |
Segment_Reporting_Details_2
Segment Reporting (Details 2) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Segment Reporting | ' | ' |
Total revenue | $400,075 | $301,357 |
NOI | 268,845 | 207,683 |
% NOI change from prior year | 29.30% | 29.10% |
Gross real estate | 17,060,533 | 15,647,138 |
Gross real estate assets held for sale | ' | 510,623 |
Established | ' | ' |
Segment Reporting | ' | ' |
Total revenue | 235,128 | 201,979 |
NOI | 162,698 | 140,261 |
% NOI change from prior year | 2.60% | 5.50% |
Gross real estate | 7,438,720 | 6,570,621 |
Established | New England | ' | ' |
Segment Reporting | ' | ' |
Total revenue | 48,630 | 43,350 |
NOI | 29,904 | 27,712 |
% NOI change from prior year | -2.00% | 1.70% |
Gross real estate | 1,489,948 | 1,360,858 |
Established | Metro NY/NJ | ' | ' |
Segment Reporting | ' | ' |
Total revenue | 72,354 | 61,244 |
NOI | 50,019 | 42,439 |
% NOI change from prior year | 1.30% | 5.50% |
Gross real estate | 2,187,554 | 1,915,890 |
Established | Mid-Atlantic | ' | ' |
Segment Reporting | ' | ' |
Total revenue | 24,647 | 25,035 |
NOI | 17,455 | 18,188 |
% NOI change from prior year | -3.00% | 1.60% |
Gross real estate | 644,657 | 631,207 |
Established | Pacific Northwest | ' | ' |
Segment Reporting | ' | ' |
Total revenue | 13,129 | 11,376 |
NOI | 9,134 | 7,850 |
% NOI change from prior year | 3.20% | 10.50% |
Gross real estate | 498,710 | 443,564 |
Established | Northern California | ' | ' |
Segment Reporting | ' | ' |
Total revenue | 42,219 | 34,064 |
NOI | 32,834 | 25,609 |
% NOI change from prior year | 11.40% | 11.40% |
Gross real estate | 1,400,087 | 1,231,893 |
Established | Southern California | ' | ' |
Segment Reporting | ' | ' |
Total revenue | 34,149 | 26,910 |
NOI | 23,352 | 18,463 |
% NOI change from prior year | 4.20% | 5.90% |
Gross real estate | 1,217,764 | 987,209 |
Other Stabilized | ' | ' |
Segment Reporting | ' | ' |
Total revenue | 132,320 | 73,932 |
NOI | 90,071 | 51,433 |
Gross real estate | 6,543,948 | 6,733,024 |
Development / Redevelopment | ' | ' |
Segment Reporting | ' | ' |
Total revenue | 29,550 | 23,174 |
NOI | 16,076 | 15,989 |
Gross real estate | 2,786,334 | 1,915,146 |
Land Held for Future Development | ' | ' |
Segment Reporting | ' | ' |
Gross real estate | 250,204 | 359,029 |
Non-allocated | ' | ' |
Segment Reporting | ' | ' |
Total revenue | 3,077 | 2,272 |
Gross real estate | $41,327 | $69,318 |
StockBased_Compensation_Plans_1
Stock-Based Compensation Plans (Details) (USD $) | 3 Months Ended |
Mar. 31, 2014 | |
Shares | ' |
Exercised (in shares) | -84,836 |
2009 Plan | Stock Options | ' |
Shares | ' |
Options outstanding at the beginning of the period (in shares) | 501,568 |
Exercised (in shares) | -37,572 |
Options outstanding at the end of the period (in shares) | 463,996 |
Options exercisable at the end of the period (in shares) | 285,517 |
Weighted average exercise price per share | ' |
Options outstanding at the beginning of the period (in dollars per share) | 120.77 |
Exercised (in dollars per share) | 111.34 |
Options outstanding at the end of the period (in dollars per share) | 121.53 |
Options exercisable at the end of the period (in dollars per share) | 116.32 |
1994 Plan | Stock Options | ' |
Shares | ' |
Options outstanding at the beginning of the period (in shares) | 691,526 |
Exercised (in shares) | -47,264 |
Forfeited (in shares) | -550 |
Options outstanding at the end of the period (in shares) | 643,712 |
Options exercisable at the end of the period (in shares) | 643,712 |
Weighted average exercise price per share | ' |
Options outstanding at the beginning of the period (in dollars per share) | 106.19 |
Exercised (in dollars per share) | 80.37 |
Forfeited (in dollars per share) | 49.09 |
Options outstanding at the end of the period (in dollars per share) | 108.13 |
Options exercisable at the end of the period (in dollars per share) | 108.13 |
StockBased_Compensation_Plans_2
Stock-Based Compensation Plans (Details 2) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Additional disclosures | ' | ' |
Stock-based compensation expense | $3,154,000 | $5,617,000 |
Capitalized stock-based compensation cost | 1,435,000 | 1,860,000 |
Stock Options | ' | ' |
Additional disclosures | ' | ' |
Unrecognized compensation cost for unvested stock options | 2,242,000 | ' |
Weighted average period for recognition of unrecognized compensation cost | '1 year 7 months 24 days | ' |
Restricted stock | ' | ' |
Additional disclosures | ' | ' |
Restricted stock awards issued | 104,060 | ' |
Fair value of shares issued | 13,331,000 | ' |
Outstanding unvested shares granted | 211,967 | ' |
Shares vested | 74,091 | ' |
Total fair value of shares vested | 8,763,000 | 8,981,000 |
Restricted stock | Minimum | ' | ' |
Additional disclosures | ' | ' |
Grant date fair value per share (in dollars per share) | $74.20 | ' |
Restricted stock | Maximum | ' | ' |
Additional disclosures | ' | ' |
Grant date fair value per share (in dollars per share) | $149.05 | ' |
Restricted stock units | ' | ' |
Additional disclosures | ' | ' |
Restricted stock granted (in shares) | 131,941 | ' |
Estimated aggregate compensation cost related to restricted stock awards | 15,627,000 | ' |
Restricted stock earned based on total shareholder return metrics related to common stock (in units) | 57,493 | ' |
Baseline share value (in dollars per share) | $128.97 | ' |
Dividend yield (as a percent) | 3.50% | ' |
Estimated volatility, Minimum (as a percent) | 17.60% | ' |
Estimated volatility, Maximum (as a percent) | 18.60% | ' |
Historical volatility (as a percent) | 50.00% | ' |
Implied volatility (as a percent) | 50.00% | ' |
Risk-free interest rate, minimum (as a percent) | 0.04% | ' |
Risk-free interest rate, maximum (as a percent) | 0.72% | ' |
Average estimated fair value (in dollars per share) | $104.80 | ' |
Restricted stock and restricted stock units | ' | ' |
Additional disclosures | ' | ' |
Unrecognized compensation cost for unvested restricted stock | $32,631,000 | ' |
Weighted average period for recognition of unrecognized compensation cost | '4 years 1 month 28 days | ' |
Related_Party_Arrangements_Det
Related Party Arrangements (Details) (USD $) | 3 Months Ended | ||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |
Related Party Arrangements | ' | ' | ' |
Compensation expense | $3,154,000 | $5,617,000 | ' |
Unconsolidated real estate entities | ' | ' | ' |
Related Party Arrangements | ' | ' | ' |
Asset management, property management, development and redevelopment fee revenue | 3,077,000 | 2,272,000 | ' |
Outstanding receivables | 7,595,000 | ' | 7,004,000 |
Non-employee directors | Restricted stock and deferred stock awards | ' | ' | ' |
Related Party Arrangements | ' | ' | ' |
Compensation expense | 156,000 | 256,000 | ' |
Amount of deferred compensation | $167,000 | ' | $417,000 |
Fair_Value_Details
Fair Value (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2014 | Mar. 31, 2013 | |
Derivative instruments and Hedging Activities | ' | ' |
Hedging losses reclassified from accumulated other comprehensive income into earnings | $1,573,000 | $1,391,000 |
Cash Flow Hedges | ' | ' |
Derivative instruments and Hedging Activities | ' | ' |
Number of derivative instruments held | 3 | ' |
Estimated hedging losses to be reclassified from accumulated other comprehensive loss into earnings within the next twelve months | 5,493,000 | ' |
Cash Flow Hedges | Interest Rate Caps | ' | ' |
Derivative instruments and Hedging Activities | ' | ' |
Notional balance | 133,945,000 | ' |
Weighted average interest rate (as a percent) | 2.50% | ' |
Weighted average capped interest rate (as a percent) | 4.90% | ' |
Non-Designated Hedges | ' | ' |
Derivative instruments and Hedging Activities | ' | ' |
Number of derivative instruments held | 14 | ' |
Unrecognized gain on derivatives | ' | 1,414,000 |
Non-Designated Hedges | Interest Rate Caps | ' | ' |
Derivative instruments and Hedging Activities | ' | ' |
Notional balance | $610,685,000 | ' |
Weighted average interest rate (as a percent) | 1.70% | ' |
Weighted average capped interest rate (as a percent) | 5.90% | ' |
Fair_Value_Details_2
Fair Value (Details 2) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2014 |
item | |
Puts | ' |
Financial Instruments Measured/Discussed at Fair Value | ' |
Number of ventures in which the entity is required to purchase interest in the investment at guaranteed minimum amount | 3 |
Recurring basis | Total Fair Value | ' |
Financial Instruments Measured/Discussed at Fair Value | ' |
DownREIT units | -985 |
Indebtedness | -6,604,144 |
Total | -6,619,646 |
Recurring basis | Total Fair Value | Puts | ' |
Financial Instruments Measured/Discussed at Fair Value | ' |
Fair value of remaining outstanding Puts | -14,582 |
Recurring basis | Total Fair Value | Interest Rate Caps | ' |
Financial Instruments Measured/Discussed at Fair Value | ' |
Derivative assets | 65 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | ' |
Financial Instruments Measured/Discussed at Fair Value | ' |
DownREIT units | -985 |
Indebtedness | -2,698,092 |
Total | -2,699,077 |
Recurring basis | Significant Other Observable Inputs (Level 2) | ' |
Financial Instruments Measured/Discussed at Fair Value | ' |
Indebtedness | -3,906,052 |
Total | -3,905,987 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Interest Rate Caps | ' |
Financial Instruments Measured/Discussed at Fair Value | ' |
Derivative assets | 65 |
Recurring basis | Significant Unobservable Inputs (Level 3) | ' |
Financial Instruments Measured/Discussed at Fair Value | ' |
Total | -14,582 |
Recurring basis | Significant Unobservable Inputs (Level 3) | Puts | ' |
Financial Instruments Measured/Discussed at Fair Value | ' |
Fair value of remaining outstanding Puts | -14,582 |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | Mar. 31, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Apr. 30, 2014 | Apr. 30, 2014 |
Unsecured notes | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | Subsequent event | |
Notes payable maturing in 2014 | Residual JV | Variable rate secured mortgage | Secured notes | Fixed rate mortgage notes payable | Unsecured notes | Weymouth Place | |
Notes payable maturing in 2014 | Fund I | ||||||
home | |||||||
Subsequent events | ' | ' | ' | ' | ' | ' | ' |
Number of apartment homes sold | ' | ' | ' | ' | ' | ' | 211 |
Proceeds from sale of real estate | ' | $40,100,000 | ' | ' | ' | ' | $25,750,000 |
Principal amount of notes issued | ' | ' | 38,000,000 | 53,000,000 | 15,000,000 | ' | ' |
Principal amount of debt repaid | ' | ' | ' | ' | ' | $150,000,000 | ' |
Stated interest rate of unsecured notes (as a percent) | 5.38% | ' | ' | ' | ' | 5.38% | ' |