Summary
AvalonBay Communities, Inc. (AVB) reported its second-quarter 2011 financial results, highlighting revenue growth driven by both portfolio expansion and increased rental rates. While net income attributable to common stockholders saw a decrease compared to the prior year, this was primarily due to a reduction in property disposition gains, a strategic shift from asset sales towards development and redevelopment. The company is actively growing its development pipeline, with significant investments planned for the remainder of 2011 and into 2012, reflecting confidence in the multifamily sector's fundamentals. Financially, AVB demonstrated a strengthening Net Operating Income (NOI) from its Established Communities, a key indicator of core property performance. The company also managed its debt effectively, preparing to replace its credit facility while maintaining compliance with financial covenants. Liquidity appears robust, with substantial cash reserves and access to capital markets supporting ongoing development and operational needs. Investors should note the company's strategic focus on long-term shareholder value through development and operational excellence in high-barrier markets.
Financial Highlights
30 data points| Revenue | $231.22M |
| Operating Expenses | $200.74M |
| Operating Income | $36.61M |
| Net Income | $43.37M |
| EPS (Basic) | $0.50 |
| EPS (Diluted) | $0.49 |
| Shares Outstanding (Basic) | 87.32M |
| Shares Outstanding (Diluted) | 88.20M |
Key Highlights
- 1Total revenue increased by 11.1% for the quarter and 10.3% for the six months ended June 30, 2011, compared to the prior year periods, driven by rental income and management fees.
- 2Net income attributable to common stockholders decreased by 15.2% for the quarter and 40.4% for the six months ended June 30, 2011, largely due to a significant decrease in gains from property sales compared to the prior year.
- 3Net Operating Income (NOI) for Established Communities increased by 8.0% year-over-year for the quarter, indicating strong core property performance.
- 4The company started construction on three new communities totaling 506 apartment homes in Q2 2011 and had 13 communities under construction with a projected capitalized cost of approximately $829.3 million as of June 30, 2011.
- 5AVB acquired two new land parcels for development in Q2 2011 and two more in July 2011, adding 1,466 future apartment homes to its development pipeline.
- 6The company is actively managing its debt, with plans to replace its existing $1 billion credit facility with a new $750 million facility in Q3 2011.
- 7Funds From Operations (FFO) per diluted common share increased to $1.13 for the quarter and $2.21 for the six months ended June 30, 2011, up from $1.04 and $2.01, respectively, in the prior year.