Summary
AvalonBay Communities Inc. (AVB) filed an 8-K on July 30, 2009, detailing its second-quarter 2009 financial results and disclosing significant impairment and restructuring charges. The company recognized non-cash charges totaling approximately $24.3 million. This includes $20.3 million for impairments on two land parcels it no longer intends to develop, and $2 million for abandoned pursuit costs related to optioned land under agreement that will not proceed to development. Additionally, AVB incurred approximately $2 million in severance costs due to planned overhead reductions, reflecting adjustments to its organizational size in response to lower development levels and prevailing economic conditions. While these charges impact reported earnings, the company stated they are not expected to result in additional material future cash expenditures. Investors should review the furnished press release and supplemental information for a comprehensive understanding of these impacts.
Key Highlights
- 1AvalonBay Communities Inc. reported its Q2 2009 financial results via an 8-K filing on July 30, 2009.
- 2The company recorded significant non-cash charges totaling approximately $24.3 million in Q2 2009.
- 3Included in the charges is a $20.3 million impairment on two land parcels previously intended for development.
- 4An additional $2 million non-cash charge relates to abandoned pursuit costs for optioned land not proceeding to development.
- 5The company incurred approximately $2 million in severance costs due to planned overhead reductions.
- 6These charges are a result of strategic decisions regarding land development and organizational adjustments in response to economic conditions.
- 7The company expects these charges to not result in additional material future cash expenditures.