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| AvalonBay Communities Expects First Quarter 2002 EPS of $0.51 And FFO Per Share of $0.99; Revenue From Established Communities Declined; Edgewater Insurance Settlement Update |
ALEXANDRIA, Va., April 22 /PRNewswire-FirstCall/ -- AvalonBay Communities, Inc. (NYSE: AVB; Pacific) announced today that the Company expects to report Earnings per Share ("EPS") of $0.51 for the first quarter of 2002. The Company also affirmed its first quarter 2002 outlook, as disclosed during the fourth quarter earnings conference call, for funds from operations ("FFO") per share at the low end of the range previously issued in the Company's December 2001 financial outlook. Specifically, the Company currently expects first quarter 2002 FFO per share of $0.99. Rental revenues from Established Communities for the first quarter 2002 declined 4.1% as compared to the same period of 2001. The year over year decline in Established Communities rental revenues is comprised of rental rate growth of 0.1% and a decrease in economic occupancy of 4.2%. Rental revenues from Established Communities for the first quarter 2002 also declined 2.1% sequentially from the fourth quarter of 2001. The sequential decline is comprised of a 1.6% rental rate decline and a decrease in economic occupancy of 0.5%. The following is a summary of rental revenue from Established Communities: 1Q 02 Compared to 1Q 01 Average Rental Economic Rental Rate Occupancy Revenue ----------- ----------- -------- Northeast Boston, MA 6.2% (3.3%) 2.9% Fairfield-New Haven, CT 4.1% (3.2%) 0.9% Northern New Jersey 2.1% (9.8%) (7.7%) Central New Jersey 6.8% (5.2%) 1.6% Long Island, NY 7.5% (1.6%) 5.9% New York, NY 4.0% (5.4%) (1.4%) Northeast Average 4.6% (4.9%) (0.3%) Mid-Atlantic 4.9% (3.1%) 1.8% Midwest 0.7% (3.9%) (3.2%) Pacific Northwest (1.5%) (0.3%) (1.8%) Northern California San Jose, CA (8.7%) (6.9%) (15.6%) Oakland-East Bay, CA (3.4%) (2.3%) (5.7%) San Francisco, CA (5.6%) 0.2% (5.4%) Northern California Average (7.2%) (4.7%) (11.9%) Southern California 5.6% (3.1%) 2.5% Wtd Average/Total Established 0.1% (4.2%) (4.1%) 1Q 02 Compared to 4Q 01 Average Rental Economic Rental Rate Occupancy Revenue ----------- ----------- -------- Northeast Boston, MA (2.0%) (0.6%) (2.6%) Fairfield-New Haven, CT (0.1%) (1.0%) (1.1%) Northern New Jersey (1.6%) (4.6%) (6.2%) Central New Jersey 2.0% (3.5%) (1.5%) Long Island, NY 0.8% (0.1%) 0.7% New York, NY (0.1%) (2.9%) (3.0%) Northeast Average (0.4%) (2.1%) (2.5%) Mid-Atlantic 0.3% (1.1%) (0.8%) Midwest (1.5%) 0.2% (1.3%) Pacific Northwest (2.7%) 2.1% (0.6%) Northern California San Jose, CA (5.1%) 2.5% (2.6%) Oakland-East Bay, CA (2.2%) (0.9%) (3.1%) San Francisco, CA (2.4%) (0.4%) (2.8%) Northern California Average (4.0%) 1.3% (2.7%) Southern California 0.3% (2.2%) (1.9%) Wtd Average/Total Established (1.6%) (0.5%) (2.1%) The Company continues to see deteriorating fundamentals in certain markets, in particular, in its New York and Northern New Jersey markets. However, the Company is seeing signs of stabilization in certain markets including declining availability in its Northern California markets resulting in increased occupancy in March. For the first quarter of 2002, the Company expects Established Communities expense growth of 2.4%, resulting in an expected decline in Net Operating Income from Established Communities of 6.3%. Edgewater Insurance Update The Company experienced a fire at a community under development in Edgewater, New Jersey in September 2000. Although the Company's claim has not been settled, management can now estimate a settlement range of between $6.2 and $8.5 million for the business interruption portion of the claim, of which $2.5 million was recognized in the fourth quarter of 2001. Accordingly, the Company expects to recognize income at the low end of this range, recording incremental other income of $3.7 million for the first quarter. If upon final settlement of the Company's claim, the actual business interruption proceeds are greater or less than the amount recorded, the Company will adjust other income accordingly. The Company expects the construction of Avalon at Edgewater to be completed in the second quarter of 2002. First Quarter 2002 Earnings Release, Conference Call and Full Year Outlook The Company will release first quarter 2002 earnings in its entirety on April 30, 2002 after the market closes, and hold its first quarter conference call on May 1, 2002 at 11:00 AM Eastern Time. Management will discuss its first quarter results, market fundamentals and the Company's outlook for the full year 2002 on the conference call. Detailed information on the Company's updated 2002 financial outlook will also be provided. The domestic number for the conference call is 1-877-510-2397, and the international number for the conference call is 1-706-634-5877. The replay of the call will be available from May 1, 2002 at 1:00 PM Eastern Time until May 8, 2002 at 11:59 PM Eastern Time. The domestic number for the replay is 1-800-642-1687, and the international number for the replay is 1-706-645-9291 - Access Code: 3579368. A live, on-demand webcast of the conference call will be available on the Company's website at http://www.avalonbay.com/earnings, and an on-line playback of the webcast will be available for 30 days following the call. About AvalonBay Communities, Inc. AvalonBay Communities, Inc., headquartered in Alexandria, Virginia, currently owns or holds an ownership interest in 141 apartment communities containing 41,191 apartment homes in eleven states and the District of Columbia, of which fifteen communities are under construction and three communities are under reconstruction. AvalonBay is in the business of developing, redeveloping, acquiring and managing luxury apartment communities in high barrier-to-entry markets of the United States. More information on AvalonBay may be found on AvalonBay's Web site at http://www.avalonbay.com. FFO and other Non-GAAP Measures Management generally considers FFO to be an appropriate supplemental measure of the operating performance of the Company because it provides investors an understanding of the ability of the Company to incur and service debt and to make capital expenditures. FFO is determined based on a definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts(R) ("NAREIT"), and is defined as net income or loss computed in accordance with generally accepted accounting principles ("GAAP"), except that excluded from net income or loss are gains or losses on sales of property and extraordinary (as defined by GAAP) gains or losses on debt restructuring, plus depreciation of real estate assets and after adjustments for unconsolidated partnerships and joint ventures. The methodology for computing FFO used by other REITs may differ from the Company's, and, accordingly, the Company's calculation of FFO may not be comparable to such other REITs. FFO does not represent cash generated from operating activities in accordance with GAAP. Therefore it should not be considered an alternative to net income as an indication of the Company's performance. Nor should it be considered an alternative to net cash flows from operating activities as determined by GAAP as a measure of liquidity. Additionally, it is not necessarily indicative of cash available to fund cash needs. An "Established Communities" comparison means a comparison of the performance of those communities that the Company owned in each of the last two years and that had stabilized operating costs at the beginning of the first year, such that a comparison of the performance between years is meaningful. Established Communities are sometimes referred to as "Same-Store" communities. Community net operating income does not include either a management fee or any allocation of corporate overhead, and neither community level net operating income nor operating expenses are measures that can be determined in accordance with GAAP. Community net operating income should not be considered as an alternative to operating income, as determined in accordance with GAAP, as an indicator of the Company's or a community's operating performance, or to cash flows from operating activities (as determined in accordance with GAAP) as a measure of liquidity. Community net operating income as disclosed by other REITs may not be comparable to the Company's calculation. Forward-Looking Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements contained in this release are statements that are subject to certain risks and uncertainties, including, but not limited to, possible changes in demand for apartment homes, the effects of economic conditions, the impact of competition and competitive pricing, changes in construction costs, the results of financing efforts, potential acquisitions under agreement, the effects of the Company's accounting policies and other matters detailed in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001 under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements."SOURCE AvalonBay Communities, Inc.
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CONTACT:
Thomas J. Sargeant, Executive Vice President
and Chief Financial Officer of AvalonBay Communities, Inc.,
+1-703-317-4635
