AvalonBay Communities (AvalonBay Communities) Interest Coverage

: 4.56 (As of Dec. 2023)

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Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. AvalonBay Communities's Operating Income for the three months ended in Dec. 2023 was $226 Mil. AvalonBay Communities's Interest Expense for the three months ended in Dec. 2023 was $-49 Mil. AvalonBay Communities's interest coverage for the quarter that ended in Dec. 2023 was 4.56. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for AvalonBay Communities's Interest Coverage or its related term are showing as below:

AVB' s Interest Coverage Range Over the Past 10 Years
Min: 2.78 Med: 3.85 Max: 4.3
Current: 4.3

AVB's Interest Coverage is ranked better than
64.4% of 677 companies
in the REITs industry
Industry Median: 3.01 vs AVB: 4.30

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

AvalonBay Communities Interest Coverage Historical Data

The historical data trend for AvalonBay Communities's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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AvalonBay Communities Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

4.11

3.32

2.78

3.41

4.30

AvalonBay Communities Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage																3.70	3.70	4.42	4.63	4.56

Competitive Comparison

For the REIT - Residential subindustry, AvalonBay Communities's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

AvalonBay Communities Interest Coverage Distribution

For the REITs industry and Real Estate sector, AvalonBay Communities's Interest Coverage distribution charts can be found below:

* The bar in red indicates where AvalonBay Communities's Interest Coverage falls into.

AvalonBay Communities Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

AvalonBay Communities's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, AvalonBay Communities's Interest Expense was $-206 Mil. Its Operating Income was $886 Mil. And its Long-Term Debt & Capital Lease Obligation was $8,135 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	886.278	/	-205.992
	=	4.30

AvalonBay Communities's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, AvalonBay Communities's Interest Expense was $-49 Mil. Its Operating Income was $226 Mil. And its Long-Term Debt & Capital Lease Obligation was $8,135 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	225.64	/	-49.471
	=	4.56

The higher the ratio, the stronger the company's Financial Strength is.

AvalonBay Communities (NYSE:AVB) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

AvalonBay Communities Interest Coverage Related Terms

Thank you for viewing the detailed overview of AvalonBay Communities's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

AvalonBay Communities (AvalonBay Communities) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » AvalonBay Communities Inc (NYSE:AVB) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

WV8:Germany A1VB34:Brazil AVBC:Austria

Address

4040 Wilson Boulevard, Suite 1000, Arlington, VA, USA, 22203

Website

https://www.avalonbay.com

AvalonBay Communities owns a portfolio of 276 apartment communities with over 82,000 units and is developing 18 additional properties with over 5,700 units. The company focuses on owning large, high-quality properties in major metropolitan areas of New England, New York/New Jersey, Washington D.C., California, and the Pacific Northwest.

Executives

Joanne M Lockeridge	officer: Executive Vice President	4040 WILSON BOULEVARD, SUITE 1000, ARLINGTON VA 22203
Matthew H. Birenbaum	officer: EVP, Strategy & Portfolio Mgmt	671 NORTH GLEBE ROAD, SUITE 800, ARLINGTON VA 22203
Mueller Charles E Jr	director	C/O AVALONBAY COMMUNITIES, INC., 4040 WILSON BLVD., SUITE 1000, ARLINGTON VA 22027
Edward M Schulman	officer: Vice President-General Counsel
William M Mclaughlin	officer: Executive Vice President	AVALONBAY COMMUNITIES, INC., 2900 EISENHOWER AVENUE, SUITE 300, ALEXANDRIA VA 22314
Timothy J Naughton	officer: Chief Operating Officer	2900 ELSENHOWER AVE 3RD FL, ALEXANDRIA VA 22314
Sean J. Breslin	officer: Senior Vice President	2900 EISENHOWER AVE., SUITE 300, ALEXANDRIA VA 22314
Keri A Shea	officer: VP-Finance and Treasurer	2900 EISEHOWER AVE., SUITE 300, ALEXANDRIA VA 22314
Kevin P. O'shea	officer: Executive Vice President	671 N. GLEBE ROAD, SUITE 800, ARLINGTON VA 22203
Nnenna Lynch	director	4040 WILSON BOULEVARD, SUITE1000, ARLINGTON VA 22203
Christopher B. Howard	director	4040 WILSON BOULEVARD, SUITE 1000, ARLINGTON VA 22203
Benjamin Schall	director, officer: President	261 BROADWAY, NO.11B, NEW YORK NY 10007
W Edward Walter	director
Horey Leo S Iii	officer: Senior Vice President	2900 ELSENHOWER AVE 3RD FL, ALEXANDRIA VA 22314
Stephen W Wilson	officer: Executive Vice President	C/O PS BUSINESS PARKS, INC., 701 WESTERN AVENUE, GLENDALE CA 91201