CPT
$111.12
Camden Property Trust
$.16
.14%
Earnings Details
3rd Quarter September 2019
Thursday, October 31, 2019 4:15:00 PM
Tweet Share Watch
Summary

Camden Property Trust Sees Fourth Quarter Below Estimates

Camden Property Trust (CPT) reported 3rd Quarter September 2019 earnings of $1.29 per share on revenue of $260.7 million. The consensus earnings estimate was $1.28 per share on revenue of $255.5 million. Revenue grew 7.8% on a year-over-year basis.

The company said it expects fourth quarter funds from operations of $1.21 to $1.25 per share. The current consensus FFO estimate is $1.28 per share for the quarter ending December 31, 2019.

Camden Property Trust, a Texas real estate investment trust engaged in the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities.

Results
Reported Earnings
$1.29
Earnings Whisper
-
Consensus Estimate
$1.28
Reported Revenue
$260.7 Mil
Revenue Estimate
$255.5 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Camden Property Trust Announces Third Quarter 2019 Operating Results

HOUSTON--(BUSINESS WIRE)--Camden Property Trust (NYSE:CPT) announced today operating results for the three and nine months ended September 30, 2019. Net Income Attributable to Common Shareholders (“EPS”), Funds from Operations (“FFO”), and Adjusted Funds from Operations (“AFFO”) for the three and nine months ended September 30, 2019 are detailed below. A reconciliation of EPS to FFO is included in the financial tables accompanying this press release.

 

Three Months Ended

Nine Months Ended

 

September 30

September 30

Per Diluted Share

2019

2018

2019

2018

EPS

$0.44

$0.40

$1.26

$1.22

FFO

$1.29

$1.20

$3.79

$3.54

AFFO

$1.09

$1.00

$3.28

$3.04

 

Quarterly Growth

Sequential Growth

Year-To-Date Growth

Same Property Results

3Q19 vs. 3Q18

3Q19 vs. 2Q19

2019 vs. 2018

Revenues

3.6%

1.4%

3.6%

Expenses

1.8%

2.6%

2.5%

Net Operating Income ("NOI")

4.7%

0.8%

4.2%

Same Property Results

3Q19

3Q18

2Q19

Occupancy

96.3%

95.9%

96.1%

“We are pleased to report another solid quarter of results for our company,” said Richard J. Campo, Camden’s Chairman and CEO. “Same property NOI growth and FFO per share were both better than anticipated for the third quarter. As a result of our strong same property performance in the third quarter, along with continued outperformance expected in the fourth quarter, we have increased the midpoints of our 2019 guidance for same property revenue from 3.40% to 3.50% and same property NOI growth from 3.75% to 4.25%.”

For 2019, the Company defines same property communities as communities owned and stabilized since January 1, 2018, excluding communities under redevelopment and properties held for sale. A reconciliation of net income to NOI and same property NOI is included in the financial tables accompanying this press release.

Development Activity

During the quarter, construction commenced at Camden Hillcrest in San Diego, CA. Subsequent to quarter-end, lease-up was completed at Camden McGowen Station in Houston, TX.

Development Communities - Construction Completed and Projects in Lease-Up ($ in millions)

 

 

 

Total

Total

% Leased

Community Name

Location

Units

Cost

as of 10/30/2019

Camden McGowen Station

Houston, TX

315

$91.1

92%

Camden North End I

Phoenix, AZ

441

98.6

77%

Camden Grandview II

Charlotte, NC

28

22.5

71%

Total

 

784

$212.2

83%

Development Communities - Construction Ongoing ($ in millions)

 

 

 

Total

Total

Community Name

Location

Units

Budget

Camden RiNo

Denver, CO

233

$75.0

Camden Downtown I

Houston, TX

271

132.0

Camden Lake Eola

Orlando, FL

360

120.0

Camden Buckhead

Atlanta, GA

365

160.0

Camden North End II

Phoenix, AZ

343

90.0

Camden Hillcrest

San Diego, CA

132

95.0

Camden Cypress Creek II (JV)

Cypress, TX

234

38.0

Total

 

1,938

$710.0

Capital Markets Transactions

In October 2019, the Company issued $300.0 million senior unsecured notes under its existing shelf registration statement. These 30-year notes were offered to the public at 99.941% of par value with a coupon of 3.350%. Camden received net proceeds of approximately $296.6 million, net of underwriting discounts and other estimated offering expenses.

In late October 2019, Camden redeemed all of its 4.78% $250 million senior notes due 2021 and prepaid its 4.38% $45.3 million secured mortgage notes due 2045. In connection with these transactions, Camden will record an approximate $12 million charge in the fourth quarter of 2019.

Earnings Guidance

Camden updated its earnings guidance for 2019 based on its current and expected views of the apartment market and general economic conditions, and provided guidance for fourth quarter 2019 as detailed below. The earnings guidance detailed below includes an approximate $12 million charge in the fourth quarter of 2019 related to the previously mentioned early redemption and prepayment of debt.

 

4Q19

 

 

2019

 

 

2019 Midpoint

Per Diluted Share

Range

 

 

Range

 

 

Current

 

 

Prior

 

 

Change

 

EPS

$0.37 - $0.41

 

 

$1.63 - $1.67

 

 

$1.65

 

 

$1.69

 

 

$(0.04)

 

FFO

$1.21 - $1.25

 

 

$5.00 - $5.04

 

 

$5.02

 

 

$5.09

 

 

$(0.07)

 

 

 

2019

2019 Midpoint

 

Same Property Growth

 

Range

Current

 

 

Prior

 

Change

 

Revenues

 

3.40% - 3.60%

 

3.50%

 

 

3.40%

 

 

0.10%

 

Expenses

 

2.10% - 2.30%

 

2.20%

 

 

2.75%

 

 

(0.55)%

 

NOI

 

4.05% - 4.45%

 

4.25%

 

 

3.75%

 

 

0.50%

 

The Company raised guidance for 2019 same property revenue growth as a result of better than expected occupancy rates achieved during the third quarter and continued strength in occupancy rates anticipated during the fourth quarter. The Company also revised guidance for 2019 same property expense growth as a result of lower than expected property tax rates, primarily in its Texas markets.

Camden intends to update its earnings guidance to the market on a quarterly basis. Additional information on the Company’s 2019 financial outlook and a reconciliation of expected EPS to expected FFO are included in the financial tables accompanying this press release.

Conference Call

Friday, November 1, 2019 at 10:00 AM CT
Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061
Passcode: 1152654
Webcast: https://services.choruscall.com/links/cpt191101.html

Supplemental financial information is available in the Investors section of the Company’s website under Earnings Releases or by calling Camden’s Investor Relations Department at (713) 354-2787.

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates, and projections about the industry and markets in which Camden (the “Company”) operates, management's beliefs, and assumptions made by management. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties which are difficult to predict. Factors which may cause the Company’s actual results or performance to differ materially from those contemplated by forward-looking statements are described under the heading “Risk Factors” in Camden’s Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission (SEC). Forward-looking statements made in today’s press release represent management’s current opinions at the time of this publication, and the Company assumes no obligation to update or supplement these statements because of subsequent events.

About Camden

Camden Property Trust, an S&P 400 Company, is a real estate company primarily engaged in the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. Camden owns interests in and operates 165 properties containing 56,271 apartment homes across the United States. Upon completion of 7 properties currently under development, the Company’s portfolio will increase to 58,209 apartment homes in 172 properties. Camden was recently named by FORTUNE Magazine for the 12th consecutive year as one of the 100 Best Companies to Work For® in America, ranking #19.

For additional information, please contact Camden’s Investor Relations Department at (713) 354-2787 or access our website at camdenliving.com.

CAMDEN

OPERATING RESULTS

(In thousands, except per share amounts)

 

(Unaudited)

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2019

 

2018

 

2019

 

2018

OPERATING DATA

 

 

 

 

 

 

 

 

 

 

 

Property revenues (a)

$260,672

 

$241,770

 

 

$765,000

 

$709,586

 

 

 

 

 

 

 

Property expenses

 

 

 

 

 

Property operating and maintenance

62,277

 

56,973

 

 

177,372

 

165,624

 

Real estate taxes

31,596

 

30,860

 

 

98,566

 

91,235

 

Total property expenses

93,873

 

87,833

 

 

275,938

 

256,859

 

 

 

 

 

 

 

Non-property income

 

 

 

 

 

Fee and asset management

2,139

 

1,827

 

 

5,849

 

5,651

 

Interest and other income

1,485

 

385

 

 

2,114

 

1,669

 

Income on deferred compensation plans

780

 

3,539

 

 

14,992

 

3,769

 

Total non-property income

4,404

 

5,751

 

 

22,955

 

11,089

 

 

 

 

 

 

 

Other expenses

 

 

 

 

 

Property management

6,154

 

6,303

 

 

18,904

 

19,415

 

Fee and asset management

1,316

 

1,140

 

 

4,022

 

3,193

 

General and administrative

13,458

 

12,618

 

 

40,027

 

37,113

 

Interest

20,719

 

21,235

 

 

60,538

 

62,216

 

Depreciation and amortization

85,814

 

76,476

 

 

250,734

 

222,269

 

Expense on deferred compensation plans

780

 

3,539

 

 

14,992

 

3,769

 

Total other expenses

128,241

 

121,311

 

 

389,217

 

347,975

 

 

 

 

 

 

 

Equity in income of joint ventures

2,133

 

1,943

 

 

5,954

 

5,644

 

Income from continuing operations before income taxes

45,095

 

40,320

 

 

128,754

 

121,485

 

Income tax expense

(313

)

(330

)

 

(709

)

(1,098

)

Net income

44,782

 

39,990

 

 

128,045

 

120,387

 

Less income allocated to non-controlling interests from continuing operations

(1,185

)

(1,124

)

 

(3,436

)

(3,455

)

Net income attributable to common shareholders

$43,597

 

$38,866

 

 

$124,609

 

$116,932

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

Net income

$44,782

 

$39,990

 

 

$128,045

 

$120,387

 

Other comprehensive income

 

 

 

 

 

Unrealized gain (loss) on cash flow hedging activities

 

5,202

 

 

(12,998

)

13,984

 

Reclassification of net (gain) loss on cash flow hedging activities, prior service cost and net loss on post retirement obligation

357

 

35

 

 

(369

)

104

 

Comprehensive income

45,139

 

45,227

 

 

114,678

 

134,475

 

Less income allocated to non-controlling interests from continuing operations

(1,185

)

(1,124

)

 

(3,436

)

(3,455

)

Comprehensive income attributable to common shareholders

$43,954

 

$44,103

 

 

$111,242

 

$131,020

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

Total earnings per common share - basic

$0.44

 

$0.41

 

 

$1.27

 

$1.22

 

Total earnings per common share - diluted

0.44

 

0.40

 

 

1.26

 

1.22

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

Basic

98,959

 

95,257

 

 

98,259

 

95,190

 

Diluted

99,066

 

95,417

 

 

98,375

 

95,333

 

(a)

Upon our adoption of Accounting Standard Codification 842 - “Leases” effective January 1, 2019, we elected the practical expedient to not separate lease and non-lease components and thus present rental revenue in a single line item in our consolidated statements of income and comprehensive income. For the three months ended September 30, 2019, we recognized $260.7 million of property revenue which consisted of approximately $230.7 million of rental revenue and approximately $30.0 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. This compares to property revenue of $241.8 million recognized for the three months ended September 30, 2018, made up of approximately $213.0 million of rental revenue and approximately $28.8 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. For the nine months ended September 30, 2019, we recognized $765.0 million of property revenue which consisted of approximately $677.0 million of rental revenue and approximately $88.0 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. This compares to property revenue of $709.6 million recognized for the nine months ended September 30, 2018, made up of approximately $625.1 million of rental revenue and approximately $84.5 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts.

 

 

Note: Please refer to the following pages for definitions and reconciliations of all non-GAAP financial measures presented in this document.

CAMDEN

FUNDS FROM OPERATIONS

(In thousands, except per share and property data amounts)

 

(Unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2019

 

2018

 

2019

 

2018

FUNDS FROM OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

$43,597

 

$38,866

 

 

$124,609

 

$116,932

 

Real estate depreciation and amortization

83,437

 

74,841

 

 

244,908

 

217,416

 

Adjustments for unconsolidated joint ventures

2,245

 

2,239

 

 

6,736

 

6,743

 

Income allocated to non-controlling interests

1,225

 

1,124

 

 

3,549

 

3,455

 

Funds from operations

$130,504

 

$117,070

 

 

$379,802

 

$344,546

 

 

 

 

 

 

 

Less: recurring capitalized expenditures (a)

(20,242

)

(19,849

)

 

(51,063

)

(49,038

)

 

 

 

 

 

 

Adjusted funds from operations

$110,262

 

$97,221

 

 

$328,739

 

$295,508

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

Funds from operations - diluted

$1.29

 

$1.20

 

 

$3.79

 

$3.54

 

Adjusted funds from operations - diluted

1.09

 

1.00

 

 

3.28

 

3.04

 

Distributions declared per common share

0.80

 

0.77

 

 

2.40

 

2.31

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

FFO/AFFO - diluted

100,819

 

97,238

 

 

100,129

 

97,194

 

 

 

 

 

 

 

PROPERTY DATA

 

 

 

 

 

Total operating properties (end of period) (b)

165

 

159

 

 

165

 

159

 

Total operating apartment homes in operating properties (end of period) (b)

56,271

 

54,480

 

 

56,271

 

54,480

 

Total operating apartment homes (weighted average)

48,801

 

47,010

 

 

48,441

 

46,682

 

(a)

Capital expenditures necessary to help preserve the value of and maintain the functionality at our communities.

 

(b)

Includes joint ventures and properties held for sale, if any.

 

Note: Please refer to the following pages for definitions and reconciliations of all non-GAAP financial measures presented in this document.

CAMDEN

BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

Sep 30,
2018

ASSETS

 

 

 

 

 

Real estate assets, at cost

 

 

 

 

 

Land

$1,158,342

 

$1,158,342

 

$1,127,485

 

$1,098,526

 

$1,088,293

 

Buildings and improvements

7,242,256

 

7,192,644

 

7,057,101

 

6,935,971

 

6,828,068

 

 

8,400,598

 

8,350,986

 

8,184,586

 

8,034,497

 

7,916,361

 

Accumulated depreciation

(2,638,693

)

(2,558,690

)

(2,479,875

)

(2,403,149

)

(2,328,092

)

Net operating real estate assets

5,761,905

 

5,792,296

 

5,704,711

 

5,631,348

 

5,588,269

 

Properties under development, including land

440,917

 

397,418

 

307,981

 

293,978

 

315,904

 

Investments in joint ventures

21,715

 

21,313

 

21,955

 

22,283

 

24,664

 

Total real estate assets

6,224,537

 

6,211,027

 

6,034,647

 

5,947,609

 

5,928,837

 

Accounts receivable – affiliates

23,170

 

22,297

 

21,337

 

22,920

 

22,605

 

Other assets, net (a)(b)

238,014

 

233,335

 

217,663

 

205,454

 

228,468

 

Cash and cash equivalents

157,239

 

149,551

 

6,092

 

34,378

 

8,529

 

Restricted cash

5,686

 

5,392

 

5,655

 

9,225

 

10,061

 

Total assets

$6,648,646

 

$6,621,602

 

$6,285,394

 

$6,219,586

 

$6,198,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Liabilities

 

 

 

 

 

Notes payable

 

 

 

 

 

Unsecured

$2,432,137

 

$2,431,336

 

$2,079,136

 

$1,836,427

 

$1,394,178

 

Secured

45,250

 

45,467

 

45,683

 

485,176

 

865,431

 

Accounts payable and accrued expenses (b)

170,689

 

128,371

 

126,964

 

146,866

 

140,046

 

Accrued real estate taxes

74,658

 

59,525

 

30,891

 

54,358

 

70,174

 

Distributions payable

80,764

 

80,767

 

80,771

 

74,982

 

74,976

 

Other liabilities (b)(c)

187,367

 

187,368

 

195,629

 

183,999

 

178,898

 

Total liabilities

2,990,865

 

2,932,834

 

2,559,074

 

2,781,808

 

2,723,703

 

 

 

 

 

 

 

Non-qualified deferred compensation share awards

 

 

 

52,674

 

60,874

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Common shares of beneficial interest

1,065

 

1,065

 

1,064

 

1,031

 

1,030

 

Additional paid-in capital

4,538,422

 

4,533,667

 

4,527,659

 

4,154,763

 

4,147,278

 

Distributions in excess of net income attributable to common shareholders

(599,615

)

(563,834

)

(526,856

)

(495,496

)

(466,512

)

Treasury shares, at cost

(348,556

)

(348,480

)

(349,655

)

(355,804

)

(355,825

)

Accumulated other comprehensive income (loss) (d)

(6,438

)

(6,795

)

616

 

6,929

 

14,031

 

Total common equity

3,584,878

 

3,615,623

 

3,652,828

 

3,311,423

 

3,340,002

 

Non-controlling interests

72,903

 

73,145

 

73,492

 

73,681

 

73,921

 

Total equity

3,657,781

 

3,688,768

 

3,726,320

 

3,385,104

 

3,413,923

 

Total liabilities and equity

$6,648,646

 

$6,621,602

 

$6,285,394

 

$6,219,586

 

$6,198,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Includes net deferred charges of:

$4,358

 

$4,345

 

$5,081

 

$242

 

$538

 

 

 

 

 

 

 

(b) Includes net asset/(liability) and interest receivable/(payable) fair value of derivative instruments:

$—

 

$—

 

($13,370

)

($7,433

)

$15,674

 

 

 

 

 

 

 

(c) Includes deferred revenues of:

$497

 

$581

 

$659

 

$552

 

$603

 

 
(d) Represents the unrealized net loss and unamortized prior service costs on post retirement obligations, and unrealized net gain (loss) on cash flow hedging activities.

CAMDEN

 

NON-GAAP FINANCIAL MEASURES

 

 

DEFINITIONS & RECONCILIATIONS

 

 

(In thousands, except per share amounts)

 

 

 

(Unaudited)

 

 

 

 

 

 

This document contains certain non-GAAP financial measures management believes are useful in evaluating an equity REIT's performance. Camden's definitions and calculations of non-GAAP financial measures may differ from those used by other REITs, and thus may not be comparable. The non-GAAP financial measures should not be considered as an alternative to net income as an indication of our operating performance, or to net cash provided by operating activities as a measure of our liquidity.

 

FFO

 

The National Association of Real Estate Investment Trusts (“NAREIT”) currently defines FFO as net income (computed in accordance with accounting principles generally accepted in the United States of America ("GAAP")), excluding depreciation and amortization related to real estate, gains (or losses) from the sale of certain real estate assets (depreciable real estate), impairments of certain real estate assets (depreciable real estate), gains or losses from change in control, and adjustments for unconsolidated joint ventures to reflect FFO on the same basis. Our calculation of diluted FFO also assumes conversion of all potentially dilutive securities, including certain non-controlling interests, which are convertible into common shares. We consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions of depreciable real estate, and depreciation, FFO can assist in the comparison of the operating performance of a company’s real estate investments between periods or to different companies. The FFO definition as restated in 2018 allows companies an option to also exclude gains and losses on sales or impairment charges on real estate assets incidental to a company's business. We did not elect this option, and as a result, the definition of FFO as restated did not have an impact on our calculation upon adoption on January 1, 2019. A reconciliation of net income attributable to common shareholders to FFO is provided below:

 

Adjusted FFO

 

In addition to FFO, we compute Adjusted FFO ("AFFO") as a supplemental measure of operating performance. AFFO is calculated utilizing FFO less recurring capital expenditures which are necessary to help preserve the value of and maintain the functionality at our communities. Our definition of recurring capital expenditures may differ from other REITs, and there can be no assurance our basis for computing this measure is comparable to other REITs. A reconciliation of FFO to AFFO is provided below:

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2019

 

2018

 

2019

 

2018

Net income attributable to common shareholders

$43,597

 

$38,866

 

 

$124,609

 

$116,932

 

Real estate depreciation and amortization

83,437

 

74,841

 

 

244,908

 

217,416

 

Adjustments for unconsolidated joint ventures

2,245

 

2,239

 

 

6,736

 

6,743

 

Income allocated to non-controlling interests

1,225

 

1,124

 

 

3,549

 

3,455

 

Funds from operations

$130,504

 

$117,070

 

 

$379,802

 

$344,546

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

(20,242

)

(19,849

)

 

(51,063

)

(49,038

)

 

 

 

 

 

 

Adjusted funds from operations

$110,262

 

$97,221

 

 

$328,739

 

$295,508

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

EPS diluted

99,066

 

95,417

 

 

98,375

 

95,333

 

FFO/AFFO diluted

100,819

 

97,238

 

 

100,129

 

97,194

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2019

 

2018

 

2019

 

2018

Total Earnings Per Common Share - Diluted

$0.44

 

$0.40

 

 

$1.26

 

$1.22

 

Real estate depreciation and amortization

0.83

 

0.77

 

 

2.45

 

2.23

 

Adjustments for unconsolidated joint ventures

0.01

 

0.02

 

 

0.05

 

0.07

 

Income allocated to non-controlling interests

0.01

 

0.01

 

 

0.03

 

0.02

 

FFO per common share - Diluted

$1.29

 

$1.20

 

 

$3.79

 

$3.54

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

(0.20

)

(0.20

)

 

(0.51

)

(0.50

)

 

 

 

 

 

 

AFFO per common share - Diluted

$1.09

 

$1.00

 

 

$3.28

 

$3.04

 

CAMDEN

 

NON-GAAP FINANCIAL MEASURES

 

 

DEFINITIONS & RECONCILIATIONS

 

 

(In thousands, except per share amounts)

 

 

 

(Unaudited)

 

 

 

 

 

Expected FFO

 

Expected FFO is calculated in a method consistent with historical FFO, and is considered an appropriate supplemental measure of expected operating performance when compared to expected earnings per common share (EPS). Guidance excludes gains, if any, on properties not currently held for sale due to the uncertain timing and extent of property dispositions and the resulting gains/losses on sales. A reconciliation of the ranges provided for diluted EPS to expected FFO per diluted share is provided below:

 

4Q19 Range

 

2019 Range

 

Low

 

High

 

Low

 

High

Expected earnings per common share - diluted(a)

$0.37

$0.41

 

$1.63

$1.67

Expected real estate depreciation and amortization

0.81

0.81

 

3.26

3.26

Expected adjustments for unconsolidated joint ventures

0.02

0.02

 

0.07

0.07

Expected income allocated to non-controlling interests

0.01

0.01

 

0.04

0.04

Expected FFO per share - diluted(a)

$1.21

$1.25

 

$5.00

$5.04

(a)

The 4Q19 and full year 2019 guidance includes an approximate $0.12 per diluted share charge related to the early redemption and prepayment of debt. See footnote (c) on page 21 of the supplemental for additional information.

 

 

Note: This table contains forward-looking statements. Please see the paragraph regarding forward-looking statements earlier in this document.

Net Operating Income (NOI)

 

NOI is defined by the Company as property revenue less property operating and maintenance expenses less real estate taxes. NOI is further detailed in the Components of Property NOI schedules on page 11 of the supplemental. The Company considers NOI to be an appropriate supplemental measure of operating performance to net income attributable to common shareholders because it reflects the operating performance of our communities without allocation of corporate level property management overhead or general and administrative costs. A reconciliation of net income attributable to common shareholders to net operating income is provided below:

 

Three months ended September 30,

 

Nine months ended September 30,

 

2019

 

2018

 

2019

 

2018

Net income

$44,782

 

$39,990

 

 

$128,045

 

$120,387

 

Less: Fee and asset management income

(2,139

)

(1,827

)

 

(5,849

)

(5,651

)

Less: Interest and other income

(1,485

)

(385

)

 

(2,114

)

(1,669

)

Less: Income on deferred compensation plans

(780

)

(3,539

)

 

(14,992

)

(3,769

)

Plus: Property management expense

6,154

 

6,303

 

 

18,904

 

19,415

 

Plus: Fee and asset management expense

1,316

 

1,140

 

 

4,022

 

3,193

 

Plus: General and administrative expense

13,458

 

12,618

 

 

40,027

 

37,113

 

Plus: Interest expense

20,719

 

21,235

 

 

60,538

 

62,216

 

Plus: Depreciation and amortization expense

85,814

 

76,476

 

 

250,734

 

222,269

 

Plus: Expense on deferred compensation plans

780

 

3,539

 

 

14,992

 

3,769

 

Less: Equity in income of joint ventures

(2,133

)

(1,943

)

 

(5,954

)

(5,644

)

Plus: Income tax expense

313

 

330

 

 

709

 

1,098

 

NOI

$166,799

 

$153,937

 

 

$489,062

 

$452,727

 

 

 

 

 

 

 

"Same Property" Communities

$139,940

 

$133,700

 

 

$413,519

 

$397,032

 

Non-"Same Property" Communities

23,693

 

18,142

 

 

67,032

 

50,780

 

Development and Lease-Up Communities

1,890

 

572

 

 

4,357

 

649

 

Dispositions/Other

1,276

 

1,523

 

 

4,154

 

4,266

 

NOI

$166,799

 

$153,937

 

 

$489,062

 

$452,727

 

CAMDEN

 

NON-GAAP FINANCIAL MEASURES

 

 

DEFINITIONS & RECONCILIATIONS

 

 

(In thousands, except per share amounts)

 

 

 

(Unaudited)

 

 

 

 

 

Adjusted EBITDA

 

Adjusted EBITDA is defined by the Company as earnings before interest, taxes, depreciation and amortization, including net operating income from discontinued operations, excluding equity in (income) loss of joint ventures, (gain) loss on sale of unconsolidated joint venture interests, gain on acquisition of controlling interest in joint ventures, gain on sale of operating properties including land, net of tax, loss on early retirement of debt and income (loss) allocated to non-controlling interests. The Company considers Adjusted EBITDA to be an appropriate supplemental measure of operating performance to net income attributable to common shareholders because it represents income before non-cash depreciation and the cost of debt, and excludes gains or losses from property dispositions. Annualized Adjusted EBITDA is Adjusted EBITDA as reported for the period multiplied by 4 for quarter results or 1.33 for 9 month results. A reconciliation of net income attributable to common shareholders to Adjusted EBITDA is provided below:

 

Three months ended September 30,

 

Nine months ended September 30,

 

2019

 

2018

 

2019

 

2018

Net income attributable to common shareholders

$43,597

 

$38,866

 

 

$124,609

 

$116,932

 

Plus: Interest expense

20,719

 

21,235

 

 

60,538

 

62,216

 

Plus: Depreciation and amortization expense

85,814

 

76,476

 

 

250,734

 

222,269

 

Plus: Income allocated to non-controlling interests from continuing operations

1,185

 

1,124

 

 

3,436

 

3,455

 

Plus: Income tax expense

313

 

330

 

 

709

 

1,098

 

Less: Equity in income of joint ventures

(2,133

)

(1,943

)

 

(5,954

)

(5,644

)

Adjusted EBITDA

$149,495

 

$136,088

 

 

$434,072

 

$400,326

 

Annualized Adjusted EBITDA

$597,980

 

$544,352

 

 

$578,763

 

$533,768

 

Net Debt to Annualized Adjusted EBITDA

 

The Company believes Net Debt to Annualized Adjusted EBITDA to be an appropriate supplemental measure of evaluating balance sheet leverage. Net Debt is defined by the Company as the average monthly balance of Total Debt during the period, less the average monthly balance of Cash and Cash Equivalents during the period. The following tables reconcile average Total debt to Net debt and computes the ratio to Adjusted EBITDA for the following periods:

Net Debt:

 

 

 

 

Average monthly balance for
the three months ended September 30,

 

Average monthly balance for
the nine months ended September 30,

 

 

 

2019

 

2018

 

2019

 

2018

Unsecured notes payable

 

 

$2,431,858

 

$1,358,004

 

 

$2,278,843

 

$1,345,487

 

Secured notes payable

 

 

45,322

 

865,505

 

 

120,933

 

865,683

 

Total debt

 

 

2,477,180

 

2,223,509

 

 

2,399,776

 

2,211,170

 

Less: Cash and cash equivalents

 

 

(124,936

)

(6,553

)

 

(117,855

)

(53,483

)

Net debt

 

 

$2,352,244

 

$2,216,956

 

 

$2,281,921

 

$2,157,687

 

Net Debt to Annualized Adjusted EBITDA:

 

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

 

2019

 

2018

 

2019

 

2018

Net debt

 

 

$2,352,244

$2,216,956

 

$2,281,921

$2,157,687

Annualized Adjusted EBITDA

 

 

597,980

544,352

 

578,763

533,768

Net Debt to Annualized Adjusted EBITDA

 

 

3.9x

4.1x

 

3.9x

4.0x

 

Kim Callahan, 713-354-2549

Source: Camden Property Trust