10-QPeriod: Q1 FY2019

AVALONBAY COMMUNITIES INC Quarterly Report for Q1 Ended Mar 31, 2019

Filed May 3, 2019For Securities:AVB

Summary

AvalonBay Communities Inc. (AVB) reported strong financial results for the first quarter of 2019. Net income attributable to common stockholders increased by a significant 20.3% year-over-year, reaching $170.4 million. This growth was primarily driven by higher real estate sales gains and increased Net Operating Income (NOI) from its portfolio of apartment communities. The company continues to expand its portfolio, with 19 communities under construction projected to cost $2.23 billion and land secured for an additional 29 communities representing a future investment of $4.20 billion. AVB's strategic focus remains on high-growth metropolitan areas with strong employment in high-wage sectors and limited housing affordability, indicating a commitment to long-term shareholder value creation through development, acquisition, and operation of upscale multifamily properties.

Financial Highlights

33 data points
Beta

Revenue

$566.18M

Net Income

$170.37M

30.1% Net Margin

EPS (Diluted)

$1.23

Total Assets

$18.64B

Cash & Equivalents

$63.00M

Free Cash Flow

$361.79M

Financial Statements
Beta
Revenue$566.18M
Operating Expenses$409.34M
Operating Income$394.92M
Interest Expense$47.89M
Net Income$170.37M
EPS (Basic)$1.23
EPS (Diluted)$1.23
Shares Outstanding (Basic)138.33M
Shares Outstanding (Diluted)138.83M

Key Highlights

  • 1Net income attributable to common stockholders rose 20.3% to $170.4 million in Q1 2019 compared to Q1 2018.
  • 2Established Communities' Net Operating Income (NOI) grew by 4.9% to $331.5 million.
  • 3The company has a substantial development pipeline with 19 communities under construction ($2.23 billion projected cost) and 29 future development sites ($4.20 billion projected cost).
  • 4Rental and other income increased by 0.9% to $565.0 million, driven by higher rental rates across the portfolio.
  • 5Direct property operating expenses decreased by 7.9% due to dispositions and a change in accounting for uncollectible lease revenue.
  • 6Interest expense, net decreased by 13.1% due to increased capitalized interest and reduced outstanding debt.
  • 7AVB successfully amended and restated its credit facility, increasing its capacity to $1.75 billion.

Frequently Asked Questions

The primary drivers of AVB's net income growth in the first quarter of 2019 were increased gains from real estate sales and a higher Net Operating Income (NOI) generated from its portfolio of apartment communities.

AVB is actively managing a significant development pipeline, with 19 communities currently under construction and land secured for 29 future communities. This strategic expansion is focused on high-growth metropolitan areas, reflecting the company's commitment to long-term value creation through disciplined capital allocation.

AVB reported strong operating cash flow growth and maintained a healthy liquidity position. The company amended and restated its credit facility to $1.75 billion, providing continued financial flexibility. They also have various other sources for capital, including existing cash, operating cash flows, debt, and equity issuances.

Consolidated total community operating expenses decreased by 4.3% year-over-year. This reduction was primarily due to decreases in direct property operating expenses, partly from dispositions and a change in accounting for uncollectible lease revenue, and a significant decrease in interest expense.