Equity

6 Months Ended

Jun. 30, 2013

Equity

Equity

4.  Equity

The following summarizes the changes in stockholders’ equity for the six months ended June 30, 2013 (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, 2012	$	1,144	$	7,086,407	$	(142,329	)	$	(108,007	)	$	6,837,215		$	3,578	$	6,840,793
Net income attributable to common stockholders	—		—		111,648			—			111,648			—		111,648
Cash flow hedge loss reclassified to earnings	—		—		—			2,965			2,965			—		2,965
Change in redemption value of redeemable noncontrolling interest	—		—		(329		)	—			(329		)	—		(329		)
Noncontrolling interests income allocation	—		—		—			—			—			19		19
Dividends declared to common stockholders	—		—		(276,894		)	—			(276,894		)	—		(276,894		)
Issuance of common stock, net of withholdings	150		1,872,418		(1,034		)	—			1,871,534			—		1,871,534
Amortization of deferred compensation	—		14,027		—			—			14,027			—		14,027
Balance at June 30, 2013	$	1,294	$	8,972,852	$	(308,938	)	$	(105,042	)	$	8,560,166		$	3,597	$	8,563,763

During the six months ended June 30, 2013, the Company:

(i) issued 30,118 shares of common stock in connection with stock options exercised;

(ii) issued 1,030 common shares through the Company’s dividend reinvestment plan;

(iii) issued 123,977 common shares in connection with stock grants;

(iv) withheld 44,222 common shares to satisfy employees’ tax withholding and other liabilities;

(v) cancelled 5,214 shares of restricted common stock upon forfeiture; and

(vi) issued 14,889,706 common shares in connection with the closing of the Archstone Acquisition.

With respect to the 14,889,706 common shares issued in conjunction with the Archstone Acquisition to Lehman (as defined below), the Company and Lehman entered into a shareholders agreement (the “Shareholders Agreement”). Under the Shareholders Agreement, until February 27, 2014 Lehman will vote all of its shares of the Company’s common stock in accordance with the recommendation of the Company’s board of directors on any matter other than an extraordinary transaction.  After February 14, 2014, and for so long as Lehman holds more than 5% of the Company’s common stock, Lehman will vote all of its shares of the Company’s common stock (i) in accordance with the recommendations of the Company’s board of directors with respect to any election of directors, compensation and equity plan matters, and any amendment to our charter to increase our authorized capital stock; (ii) on all matters proposed by other shareholders, either proportionately in accordance with the votes of the other shareholders or, at its election, in accordance with the recommendation of the Company’s board of directors; and (iii) on all other matters, in its sole and absolute discretion.  In May 2013, Lehman sold 7,870,000 of the Company’s common shares it received as consideration for the Archstone Acquisition. Lehman received all of the net proceeds from the offering, and the sale did not impact the total number of the Company’s common shares outstanding.

In addition, during the six months ended June 30, 2013 the Company granted 215,230 options for common stock to employees.  Any deferred compensation related to the Company’s stock option and restricted stock grants during the six months ended June 30, 2013 is not reflected on the Company’s Condensed Consolidated Balance Sheet as of June 30, 2013, 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 is authorized to sell up to $750,000,000 of shares of its common stock from time to time during a 36-month period. The Company had no sales under CEP III during the six months ended June 30, 2013, and has $646,274,000 of shares that remain authorized for issuance under this program as of June 30, 2013.