ARLINGTON, Va.--(BUSINESS WIRE)--Jul 30, 2018--AvalonBay Communities, Inc. (NYSE: AVB) (the “Company”) reported today that Net Income Attributable to Common Stockholders for the three months ended June 30, 2018 was $254,662,000. This resulted in an increase in Earnings per Share – diluted (“EPS”) of 53.3% to $1.84 for the three months ended June 30, 2018, from $1.20 for the prior year period.

Funds from Operations attributable to common stockholders - diluted (“FFO”) per share for the three months ended June 30, 2018 increased 16.3% to $2.21 from $1.90 for the prior year period. Core FFO per share (as defined in this release) for the three months ended June 30, 2018 increased 6.7% to $2.23 from $2.09 for the prior year period.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the three months ended June 30, 2018 to its results for the prior year period:

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the second quarter of 2018 to its April 2018 outlook:

For the six months ended June 30, 2018, EPS decreased 1.4% to $2.87 from $2.91 for the prior year period, FFO per share increased 11.2% to $4.38 from $3.94 for the prior year period, and Core FFO per share increased 5.5% to $4.41 from $4.18 for the prior year period.

The following table compares the Company’s actual results for EPS, FFO per share and Core FFO per share for the six months ended June 30, 2018 to its results for the prior year period:

Operating Results for the Three Months Ended June 30, 2018 Compared to the Prior Year Period

For the Company, total revenue increased by $38,727,000, or 7.3%, to $569,239,000. This increase is primarily due to growth in revenue from stabilized operating communities and development communities.

For Established Communities, total revenue increased $10,470,000, or 2.6%, to $420,557,000. Operating expenses for Established Communities increased $2,132,000, or 1.8%, to $121,482,000. NOI for Established Communities increased $8,338,000, or 2.9%, to $299,075,000. Rental revenue for Established Communities increased 2.5%, as a result of an increase in Average Rental Rates of 2.3% and Economic Occupancy of 0.2%. If the Company were to include current and previously completed redevelopment communities as part of its Established Communities portfolio, the increase in Established Communities' rental revenue would have remained consistent at 2.5%.

The following table reflects the percentage changes in rental revenue, operating expenses and NOI for Established Communities for the three months ended June 30, 2018 compared to the three months ended June 30, 2017:

Operating Results for the Six Months Ended June 30, 2018 Compared to the Prior Year Period

For the Company, total revenue increased by $77,195,000, or 7.3%, to $1,130,032,000. This increase is primarily due to growth in revenue from stabilized operating communities and development communities.

For Established Communities, total revenue increased $20,232,000, or 2.5%, to $836,329,000. Operating expenses for Established Communities increased $8,291,000, or 3.5%, to $243,332,000. NOI for Established Communities increased $11,941,000, or 2.1%, to $592,997,000. Rental revenue for Established Communities increased 2.5%, as a result of an increase in Average Rental Rates of 2.4% and Economic Occupancy of 0.1%. If the Company were to include current and previously completed redevelopment communities as part of its Established Communities portfolio, the increase in Established Communities' rental revenue would have been 2.4%.

The following table reflects the percentage changes in rental revenue, operating expenses and NOI for Established Communities for the six months ended June 30, 2018 compared to the six months ended June 30, 2017:

Development Activity

During the three months ended June 30, 2018, the Company completed the development of two communities:

AVA Wheaton, located in Wheaton, MD; and Avalon Maplewood, located in Maplewood, NJ.

These communities contain an aggregate of 554 apartment homes and were constructed for an aggregate Total Capital Cost of $141,000,000.

The Company started the construction of three communities:

Avalon Saugus, located in Saugus, MA; Avalon Doral, located in Doral, FL; and Avalon Norwood, located in Norwood, MA.

These communities are expected to contain a total of 828 apartment homes and 23,000 square feet of retail space when completed and will be developed for an aggregate estimated Total Capital Cost of $265,000,000.

During the six months ended June 30, 2018, the Company completed the development of five communities containing an aggregate of 1,324 apartment homes, for an aggregate Total Capital Cost of $428,000,000.

At June 30, 2018, the Company had 19 communities under construction that in the aggregate are expected to contain 6,048 apartment homes and 120,000 square feet of retail space. Estimated Total Capital Cost at completion is $2,768,000,000, including the Company's share of communities being developed through joint ventures.

The projected Total Capital Cost of development rights at June 30, 2018 decreased to $3.5 billion from $3.7 billion at March 31, 2018.

Disposition Activity

During the three and six months ended June 30, 2018, the Company sold four wholly-owned operating communities:

Avalon Blue Hills, located in Randolph, MA; Avalon Canton at Blue Hills, located in Canton, MA; Eaves North Quincy, located in Quincy, MA; and Avalon Anaheim Stadium, located in Anaheim, CA.

These communities contain an aggregate of 947 apartment homes and 12,000 square feet of retail space and were sold for $307,100,000 and a weighted average Initial Year Market Cap Rate of 4.7%, resulting in a gain in accordance with GAAP of $105,211,000 and an Economic Gain of $59,684,000.

Liquidity and Capital Markets

At June 30, 2018, the Company did not have any borrowings outstanding under its $1,500,000,000 unsecured credit facility, and had $349,897,000 in unrestricted cash and cash in escrow.

The Company’s annualized Net Debt-to-Core EBITDAre (as defined in this release) for the second quarter of 2018 was 5.0 times.

During the six months ended June 30, 2018, the Company issued $300,000,000 principal amount of unsecured notes in a public offering under its existing shelf registration statement for net proceeds of $296,210,000. The notes mature in April 2048 and were issued with a 4.35% coupon. The effective interest rate of the notes for the first ten years is 3.97%, including the impact of an interest rate hedge and offering costs, and for the remainder of the term the effective interest rate will be 4.39%.

Third Quarter and Full Year 2018 Financial Outlook

For its third quarter and full year 2018 financial outlook, the Company expects the following:

The following table compares the Company's July 2018 Outlook for EPS, FFO per share and Core FFO per share for the full year 2018 to its January 2018 outlook:

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