8-KOther Events

AVALONBAY COMMUNITIES INC 8-K Report (Aug 15, 2003)

Filed August 15, 2003For Securities:AVB

Summary

AvalonBay Communities, Inc. (AVB) announced a public offering of 2,750,000 shares of its common stock on August 12, 2003, with a public offering price of $46.00 per share. The company expects to raise approximately $124.8 million in net proceeds, which will be utilized for general corporate purposes. These purposes may include debt repayment and funding future development and redevelopment projects, indicating potential growth and financial flexibility for the company. Additionally, AvalonBay will implement a change in accounting principle related to the Securities and Exchange Commission's clarification on EITF Topic D-42, concerning the redemption or conversion of preferred stock. This change will be applied retroactively to its financial statements for the year ending December 31, 2003. While it will not affect net income, it will lead to a reduction in net income available to common stockholders for specific historical periods, namely the six months ended June 30, 2003, and the years ended December 31, 2002, and 2001.

Key Highlights

  • 1Public offering of 2,750,000 shares of common stock announced on August 12, 2003.
  • 2Offering price set at $46.00 per share.
  • 3Expected net proceeds of approximately $124.8 million.
  • 4Proceeds intended for general corporate purposes, including debt repayment and future development/redevelopment.
  • 5Underwriting by Morgan Stanley & Co. Incorporated, with an over-allotment option for an additional 412,500 shares.
  • 6Adoption of a change in accounting principle concerning EITF Topic D-42, effective retroactively for the year ending December 31, 2003.
  • 7The accounting change will reduce net income available to common stockholders for specific past periods but will not impact overall net income.

Frequently Asked Questions

The primary purpose of the stock offering is to raise approximately $124.8 million in net proceeds for general corporate purposes. This could include repaying existing debt and financing future development and redevelopment projects, which suggests strategic growth initiatives.

The company is adopting a change in accounting principle related to EITF Topic D-42. This change will be applied retroactively to financial statements for the year ending December 31, 2003. While it won't impact the company's net income, it will result in a reduction of net income available to common stockholders for the six months ended June 30, 2003, and the years ended December 31, 2002, and 2001.

The offering is being underwritten by Morgan Stanley & Co. Incorporated. The underwriting agreement includes a provision granting Morgan Stanley the right to purchase up to an additional 412,500 shares to cover potential over-allotments, which could increase the total capital raised.

The company is offering 2,750,000 shares at $46.00 per share, for gross proceeds of approximately $126.5 million. If the underwriter exercises the over-allotment option, an additional 412,500 shares could be sold, bringing the total potential shares sold to 3,162,500.