CPT
$118.89
Camden Property Trust
$1.32
1.12%
Earnings Details
Quarter December 2019
Thursday, January 30, 2020 4:20:00 PM
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Summary

Camden Property Trust Misses

Camden Property Trust (CPT) reported Quarter December 2019 earnings of $1.24 per share on revenue of $263.5 million. The consensus earnings estimate was $1.33 per share on revenue of $262.5 million. The Earnings Whisper number was $1.25 per share. Revenue grew 7.6% on a year-over-year basis.

The company said it expects first quarter funds from operations of $1.29 to $1.33 per share. The current consensus FFO estimate is $1.31 per share for the quarter ending March 31, 2020. The company also said it expects 2020 funds from operations of $5.30 to $5.50 per share. The current consensus FFO estimate is $5.42 per share for the year ending December 31, 2020.

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
$1.24
Earnings Whisper
$1.25
Consensus Estimate
$1.33
Reported Revenue
$263.5 Mil
Revenue Estimate
$262.5 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Camden Property Trust Announces 2019 Operating Results, 2020 Financial Outlook, and First Quarter 2020 Dividend

HOUSTON--(BUSINESS WIRE)--Camden Property Trust (NYSE:CPT) (the "Company") announced today operating results for the three and twelve months ended December 31, 2019. Net Income Attributable to Common Shareholders (“EPS”), Funds from Operations (“FFO”), and Adjusted Funds from Operations (“AFFO”) for the three and twelve months ended December 31, 2019 are detailed below. A reconciliation of EPS to FFO is included in the financial tables accompanying this press release.

 

Three Months Ended

Twelve Months Ended

 

December 31

December 31

Per Diluted Share

2019

2018

2019

2018

EPS

$0.95

$0.41

$2.22

$1.63

FFO

$1.24

$1.23

$5.04

$4.77

AFFO

$1.04

$0.99

$4.32

$4.03

The Company's 4Q19 and full-year 2019 results include a $0.12 per diluted share charge related to the early redemption and prepayment of debt.

 

Quarterly Growth

Sequential Growth

Year-To-Date Growth

Same Property Results

4Q19 vs. 4Q18

4Q19 vs. 3Q19

2019 vs. 2018

Revenues

4.1%

0.3%

3.7%

Expenses

0.3%

(4.4)%

2.0%

Net Operating Income ("NOI")

6.2%

2.9%

4.7%

Same Property Results

4Q19

4Q18

3Q19

Occupancy

96.2%

95.8%

96.3%

“We are pleased to report another strong quarter of performance, with same property growth and FFO per share slightly better than anticipated for both fourth quarter and full-year 2019,” said Richard J. Campo, Camden’s Chairman and CEO. “During 2019 we continued to improve the quality of our portfolio and strengthen our balance sheet through strategic capital recycling and the successful execution of several capital markets transactions. We expect demand for apartment homes to remain steady in 2020 with levels of new supply increasing slightly, resulting in moderating same property revenue growth over the course of the year.”

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, lease-up was completed at Camden McGowen Station in Houston, TX and construction commenced at Camden Atlantic in Plantation, FL.

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

 

 

Total

Total

% Leased

Community Name

Location

Homes

Cost

as of 1/29/2020

Camden North End I

Phoenix, AZ

441

$98.8

75%

Camden Grandview II

Charlotte, NC

28

22.5

93%

Total

 

469

$121.3

76%

Development Communities - Construction Ongoing ($ in millions)

 

 

Total

Total

Community Name

Location

Homes

Budget

Camden Downtown I

Houston, TX

271

$132.0

Camden RiNo

Denver, CO

233

75.0

Camden Lake Eola

Orlando, FL

360

120.0

Camden Buckhead

Atlanta, GA

366

160.0

Camden North End II

Phoenix, AZ

343

90.0

Camden Hillcrest

San Diego, CA

132

95.0

Camden Atlantic

Plantation, FL

269

100.0

Camden Cypress Creek II (JV)

Cypress, TX

234

38.0

Total

 

2,208

$810.0

Acquisition/Disposition Activity

During the quarter, the Company acquired Camden Carolinian, a 186-home apartment community located in Raleigh, NC for approximately $75.1 million, and acquired Camden Highland Village, a 552-home apartment community with an adjacent 2.25-acre development site located in Houston, TX for approximately $155.2 million.

The Company also completed the sale of its Corpus Christi, TX portfolio and exit of that market during the quarter. The assets sold included two wholly-owned communities with 632 apartment homes, and one joint venture community with 270 apartment homes. Net proceeds to the Company were approximately $75.0 million.

Subsequent to quarter-end, Camden acquired 4.9 acres of land in Raleigh, NC for $18.2 million for the future development of approximately 355 apartment homes.

Capital Markets Transactions

In October 2019, the Company issued $300.0 million of 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 unsecured notes due 2021 and prepaid its 4.38% $45.3 million secured mortgage notes due 2045. In connection with these transactions, Camden recorded an approximate $12 million charge in the fourth quarter of 2019.

Equity Issuance

During the fourth quarter, Camden issued 224,256 common shares through its at-the-market (“ATM”) share offering program at an average price of $111.88 per share, for total net consideration of approximately $24.8 million.

Earnings Guidance

Camden provided initial earnings guidance for 2020 based on its current and expected views of the apartment market and general economic conditions, and provided guidance for first quarter 2020 as detailed below.

 

1Q20

2020

Per Diluted Share

Range

Range

Midpoint

EPS

$0.39 - $0.43

$1.64 - $1.84

$1.74

FFO

$1.29 - $1.33

$5.30 - $5.50

$5.40

 

2020

Same Property Growth

Range

Midpoint

Revenues

2.70% - 3.70%

3.20%

Expenses

2.50% - 3.50%

3.00%

NOI

2.30% - 4.30%

3.30%

For 2020, the Company defines same property communities as communities owned and stabilized since January 1, 2019, excluding communities under redevelopment and properties held for sale. The Company defines properties under redevelopment as communities with capital expenditures that improve a community's cash flow and competitive position, through extensive unit, exterior building, common area, and amenity upgrades. Camden intends to update its earnings guidance to the market on a quarterly basis. Additional information on the Company’s 2020 financial outlook and a reconciliation of expected EPS to expected FFO are included in the financial tables accompanying this press release.

Quarterly Dividend Declaration

Camden's Board of Trust Managers declared a first quarter 2020 dividend of $0.83 per common share, which is a 3.75% increase over the Company's prior quarterly dividend of $0.80 per share. The dividend is payable on April 17, 2020 to shareholders of record as of March 31, 2020. In declaring the dividend, the Board of Trust Managers considered a number of factors, including the Company's past performance and future prospects, as described in this press release.

Conference Call

Friday, January 31, 2020 at 10:00 AM CT
Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061
Passcode: 0557569
Webcast: https://services.choruscall.com/links/cpt200131.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 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 164 properties containing 56,107 apartment homes across the United States. Upon completion of 8 properties currently under development, the Company’s portfolio will increase to 58,315 apartment homes in 172 properties. Camden has been recognized as one of the 100 Best Companies to Work For® by FORTUNE magazine for 12 consecutive years, most recently ranking #19. The Company also received a Glassdoor Employees' Choice Award in 2020, ranking #25 for large U.S. companies.

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 December 31,

 

Twelve Months Ended December 31,

 

2019

 

2018

 

 

2019

 

2018

 

OPERATING DATA

 

 

 

 

 

 

 

 

 

 

 

Property revenues (a)

$263,461

$244,919

 

$1,028,461

$954,505

 

 

 

 

 

 

Property expenses

 

 

 

 

 

Property operating and maintenance

58,217

 

55,108

 

 

235,589

 

220,732

 

Real estate taxes

32,192

 

31,612

 

 

130,758

 

122,847

 

Total property expenses

90,409

 

86,720

 

 

366,347

 

343,579

 

 

 

 

 

 

 

Non-property income

 

 

 

 

 

Fee and asset management

2,847

 

1,580

 

 

8,696

 

7,231

 

Interest and other income

976

 

432

 

 

3,090

 

2,101

 

Income/(Loss) on deferred compensation plans

6,702

 

(10,304

)

 

21,694

 

(6,535

)

Total non-property income

10,525

 

(8,292

)

 

33,480

 

2,797

 

 

 

 

 

 

 

Other expenses

 

 

 

 

 

Property management

6,386

 

6,166

 

 

25,290

 

25,581

 

Fee and asset management

1,737

 

1,258

 

 

5,759

 

4,451

 

General and administrative

13,174

 

13,622

 

 

53,201

 

50,735

 

Interest

20,168

 

22,047

 

 

80,706

 

84,263

 

Depreciation and amortization

85,540

 

78,677

 

 

336,274

 

300,946

 

Expense/(Benefit) on deferred compensation plans

6,702

 

(10,304

)

 

21,694

 

(6,535

)

Total other expenses

133,707

 

111,466

 

 

522,924

 

459,441

 

 

 

 

 

 

 

Loss on early retirement of debt

(11,995

)

 

 

(11,995

)

 

Gain on sale of operating properties, net of tax

49,901

 

 

 

49,901

 

 

Equity in income of joint ventures

8,829

 

2,192

 

 

14,783

 

7,836

 

Income from continuing operations before income taxes

96,605

 

40,633

 

 

225,359

 

162,118

 

Income tax expense

(380

)

(326

)

 

(1,089

)

(1,424

)

Net income

96,225

 

40,307

 

 

224,270

 

160,694

 

Less income allocated to non-controlling interests

(1,211

)

(1,111

)

 

(4,647

)

(4,566

)

Net income attributable to common shareholders

$95,014

 

$39,196

 

 

$219,623

 

$156,128

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

Net income

$96,225

$40,307

 

$224,270

$160,694

Other comprehensive income

 

 

 

 

 

Unrealized gain (loss) on cash flow hedging activities

 

(7,202

)

 

(12,998

)

6,782

 

Unrealized gain (loss) and unamortized prior service cost on post retirement obligation

(449

)

450

 

 

(449

)

450

 

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

358

 

(350

)

 

(11

)

(246

)

Comprehensive income

96,134

 

33,205

 

 

210,812

 

167,680

 

Less income allocated to non-controlling interests

(1,211

)

(1,111

)

 

(4,647

)

(4,566

)

Comprehensive income attributable to common shareholders

$94,923

 

$32,094

 

 

$206,165

 

$163,114

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

Total earnings per common share - basic

$0.96

 

$0.41

 

 

$2.23

 

$1.63

 

Total earnings per common share - diluted

0.95

 

0.41

 

 

2.22

 

1.63

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

Basic

99,055

 

95,262

 

 

98,460

 

95,208

 

Diluted

100,932

 

95,465

 

 

99,384

 

95,366

 

(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 December 31, 2019, we recognized $263.5 million of property revenue which consisted of approximately $234.1 million of rental revenue and approximately $29.4 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 $244.9 million recognized for the three months ended December 31, 2018, made up of approximately $216.9 million of rental revenue and approximately $28.0 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. For the twelve months ended December 31, 2019, we recognized $1,028.5 million of property revenue which consisted of approximately $911.1 million of rental revenue and approximately $117.4 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 $954.5 million recognized for the twelve months ended December 31, 2018, made up of approximately $842.0 million of rental revenue and approximately $112.5 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 December 31,

 

Twelve Months Ended December 31,

 

2019

2018

 

2019

2018

FUNDS FROM OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

$95,014

 

$39,196

 

 

$219,623

 

$156,128

 

Real estate depreciation and amortization

83,137

 

76,867

 

 

328,045

 

294,283

 

Adjustments for unconsolidated joint ventures

2,251

 

2,233

 

 

8,987

 

8,976

 

Gain on sale of operating properties, net of tax

(49,901

)

 

 

(49,901

)

 

Gain on sale of unconsolidated joint venture property

(6,204

)

 

 

(6,204

)

 

Income allocated to non-controlling interests

1,289

 

1,140

 

 

4,838

 

4,595

 

Funds from operations

$125,586

 

$119,436

 

 

$505,388

 

$463,982

 

 

 

 

 

 

 

Less: recurring capitalized expenditures (a)

(21,109

)

(23,258

)

 

(72,172

)

(72,296

)

 

 

 

 

 

 

Adjusted funds from operations

$104,477

 

$96,178

 

 

$433,216

 

$391,686

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

Funds from operations - diluted

$1.24

 

$1.23

 

 

$5.04

 

$4.77

 

Adjusted funds from operations - diluted

1.04

 

0.99

 

 

4.32

 

4.03

 

Distributions declared per common share

0.80

 

0.77

 

 

3.20

 

3.08

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

FFO/AFFO - diluted

100,932

 

97,221

 

 

100,332

 

97,201

 

 

 

 

 

 

 

PROPERTY DATA

 

 

 

 

 

Total operating properties (end of period) (b)

164

 

161

 

 

164

 

161

 

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

56,107

 

55,160

 

 

56,107

 

55,160

 

Total operating apartment homes (weighted average)

48,875

 

47,653

 

 

48,549

 

46,925

 

(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)

 

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Dec 31,
2018

ASSETS

 

 

 

 

 

Real estate assets, at cost

 

 

 

 

 

Land

$1,199,384

$1,158,342

$1,158,342

$1,127,485

$1,098,526

Buildings and improvements

7,404,090

7,242,256

7,192,644

7,057,101

6,935,971

 

8,603,474

8,400,598

8,350,986

8,184,586

8,034,497

Accumulated depreciation

(2,686,025)

(2,638,693)

(2,558,690)

(2,479,875)

(2,403,149)

Net operating real estate assets

5,917,449

5,761,905

5,792,296

5,704,711

5,631,348

Properties under development, including land

512,319

440,917

397,418

307,981

293,978

Investments in joint ventures

20,688

21,715

21,313

21,955

22,283

Total real estate assets

6,450,456

6,224,537

6,211,027

6,034,647

5,947,609

Accounts receivable – affiliates

21,833

23,170

22,297

21,337

22,920

Other assets, net (a)

248,716

238,014

233,335

217,663

205,454

Cash and cash equivalents

23,184

157,239

149,551

6,092

34,378

Restricted cash

4,315

5,686

5,392

5,655

9,225

Total assets

$6,748,504

$6,648,646

$6,621,602

$6,285,394

$6,219,586

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Liabilities

 

 

 

 

 

Notes payable

 

 

 

 

 

Unsecured

$2,524,099

$2,432,137

$2,431,336

$2,079,136

$1,836,427

Secured

45,250

45,467

45,683

485,176

Accounts payable and accrued expenses

171,719

170,689

128,371

126,964

146,866

Accrued real estate taxes

54,408

74,658

59,525

30,891

54,358

Distributions payable

80,973

80,764

80,767

80,771

74,982

Other liabilities (b)(c)

215,581

187,367

187,368

195,629

183,999

Total liabilities

3,046,780

2,990,865

2,932,834

2,559,074

2,781,808

 

 

 

 

 

 

Non-qualified deferred compensation share awards

52,674

 

 

 

 

 

 

Equity

 

 

 

 

 

Common shares of beneficial interest

1,069

1,065

1,065

1,064

1,031

Additional paid-in capital

4,566,731

4,538,422

4,533,667

4,527,659

4,154,763

Distributions in excess of net income attributable to common shareholders

(584,167)

(599,615)

(563,834)

(526,856)

(495,496)

Treasury shares, at cost

(348,419)

(348,556)

(348,480)

(349,655)

(355,804)

Accumulated other comprehensive income (loss) (d)

(6,529)

(6,438)

(6,795)

616

6,929

Total common equity

3,628,685

3,584,878

3,615,623

3,652,828

3,311,423

Non-controlling interests

73,039

72,903

73,145

73,492

73,681

Total equity

3,701,724

3,657,781

3,688,768

3,726,320

3,385,104

Total liabilities and equity

$6,748,504

$6,648,646

$6,621,602

$6,285,394

$6,219,586

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Includes net deferred charges of:

$3,658

$4,358

$4,345

$5,081

$242

 

 

 

 

 

 

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

$—

$—

$—

($13,370)

($7,433)

 

 

 

 

 

 

(c) Includes deferred revenues of:

$408

$497

$581

$659

$552

 

 

 

 

 

 

(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 December 31,

 

Twelve Months Ended December 31,

 

2019

2018

 

2019

2018

Net income attributable to common shareholders

$95,014

 

$39,196

 

 

$219,623

 

$156,128

 

Real estate depreciation and amortization

83,137

 

76,867

 

 

328,045

 

294,283

 

Adjustments for unconsolidated joint ventures

2,251

 

2,233

 

 

8,987

 

8,976

 

Income allocated to non-controlling interests

1,289

 

1,140

 

 

4,838

 

4,595

 

Gain on sale of operating properties, net of tax

(49,901

)

 

 

(49,901

)

 

Gain on sale of unconsolidated joint venture property, net of tax

(6,204

)

 

 

(6,204

)

 

Funds from operations

$125,586

 

$119,436

 

 

$505,388

 

$463,982

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

(21,109

)

(23,258

)

 

(72,172

)

(72,296

)

 

 

 

 

 

 

Adjusted funds from operations

$104,477

 

$96,178

 

 

$433,216

 

$391,686

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

EPS diluted

100,932

 

95,465

 

 

99,384

 

95,366

 

FFO/AFFO diluted

100,932

 

97,221

 

 

100,332

 

97,201

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

2019

2018

 

2019

2018

Total Earnings Per Common Share - Diluted

$0.95

 

$0.41

 

 

$2.22

 

$1.63

 

Real estate depreciation and amortization

0.82

 

0.79

 

 

3.27

 

3.03

 

Adjustments for unconsolidated joint ventures

0.02

 

0.02

 

 

0.08

 

0.09

 

Income allocated to non-controlling interests

 

0.01

 

 

0.03

 

0.02

 

Gain on sale of operating properties, net of tax

(0.49

)

 

 

(0.50

)

 

Gain on sale of unconsolidated joint venture property, net of tax

(0.06

)

 

 

(0.06

)

 

FFO per common share - Diluted

$1.24

 

$1.23

 

 

$5.04

 

$4.77

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

(0.20

)

(0.24

)

 

(0.72

)

(0.74

)

 

 

 

 

 

 

AFFO per common share - Diluted

$1.04

 

$0.99

 

 

$4.32

 

$4.03

 

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:

 

1Q20

Range

 

2020

Range

 

Low

High

 

Low

High

Expected earnings per common share - diluted

$0.39

 

$0.43

 

 

$1.64

 

$1.84

 

Expected real estate depreciation and amortization

0.87

 

0.87

 

 

3.52

 

3.52

 

Expected adjustments for unconsolidated joint ventures

0.02

 

0.02

 

 

0.09

 

0.09

 

Expected income allocated to non-controlling interests

0.01

 

0.01

 

 

0.05

 

0.05

 

Expected FFO per share - diluted

$1.29

 

$1.33

 

 

$5.30

 

$5.50

 

 

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 December 31,

 

Twelve months ended December 31,

 

2019

2018

 

2019

2018

Net income

$96,225

 

$40,307

 

 

$224,270

 

$160,694

 

Less: Fee and asset management income

(2,847

)

(1,580

)

 

(8,696

)

(7,231

)

Less: Interest and other income

(976

)

(432

)

 

(3,090

)

(2,101

)

Less: (Income)/Loss on deferred compensation plans

(6,702

)

10,304

 

 

(21,694

)

6,535

 

Plus: Property management expense

6,386

 

6,166

 

 

25,290

 

25,581

 

Plus: Fee and asset management expense

1,737

 

1,258

 

 

5,759

 

4,451

 

Plus: General and administrative expense

13,174

 

13,622

 

 

53,201

 

50,735

 

Plus: Interest expense

20,168

 

22,047

 

 

80,706

 

84,263

 

Plus: Depreciation and amortization expense

85,540

 

78,677

 

 

336,274

 

300,946

 

Plus: Expense/(Benefit) on deferred compensation plans

6,702

 

(10,304

)

 

21,694

 

(6,535

)

Plus: Loss on early retirement of debt

11,995

 

 

 

11,995

 

 

Less: Gain on sale of operating properties, net of tax

(49,901

)

 

 

(49,901

)

 

Less: Equity in income of joint ventures

(8,829

)

(2,192

)

 

(14,783

)

(7,836

)

Plus: Income tax expense

380

 

326

 

 

1,089

 

1,424

 

NOI

$173,052

 

$158,199

 

 

$662,114

 

$610,926

 

 

 

 

 

 

 

"Same Property" Communities

$142,692

 

$134,372

 

 

$552,419

 

$527,780

 

Non-"Same Property" Communities

25,896

 

20,560

 

 

94,437

 

71,437

 

Development and Lease-Up Communities

1,403

 

708

 

 

4,251

 

1,260

 

Dispositions/Other

3,061

 

2,559

 

 

11,007

 

10,449

 

NOI

$173,052

 

$158,199

 

 

$662,114

 

$610,926

 

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. A reconciliation of net income attributable to common shareholders to Adjusted EBITDA is provided below:

 

Three months ended December 31,

 

Twelve months ended December 31,

 

2019

2018

 

2019

2018

Net income attributable to common shareholders

$95,014

 

$39,196

 

 

$219,623

 

$156,128

 

Plus: Interest expense

20,168

 

22,047

 

 

80,706

 

84,263

 

Plus: Depreciation and amortization expense

85,540

 

78,677

 

 

336,274

 

300,946

 

Plus: Income allocated to non-controlling interests

1,211

 

1,111

 

 

4,647

 

4,566

 

Plus: Income tax expense

380

 

326

 

 

1,089

 

1,424

 

Less: Gain on sale of operating properties, net of tax

(49,901

)

 

 

(49,901

)

 

Plus: Loss on early retirement of debt

11,995

 

 

 

11,995

 

 

Less: Equity in income of joint ventures

(8,829

)

(2,192

)

 

(14,783

)

(7,836

)

Adjusted EBITDA

$155,578

 

$139,165

 

 

$589,650

 

$539,491

 

Annualized Adjusted EBITDA

$622,312

 

$556,660

 

 

$589,650

 

$539,491

 

 

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

 

Average monthly balance for

 

 

 

the three months ended December 31,

 

the twelve months ended December 31,

 

 

 

2019

2018

 

2019

2018

Unsecured notes payable

 

 

$2,494,525

 

$1,836,195

 

 

$2,332,764

 

$1,468,164

 

Secured notes payable

 

 

 

485,261

 

 

90,699

 

770,578

 

Total debt

 

 

2,494,525

 

2,321,456

 

 

2,423,463

 

2,238,742

 

Less: Cash and cash equivalents

 

 

49,696

 

29,489

 

 

100,815

 

47,485

 

Net debt

 

 

$2,444,829

 

$2,291,967

 

 

$2,322,648

 

$2,191,257

 

 

Net Debt to Annualized Adjusted EBITDA:

 

 

 

Three months ended December 31,

 

Twelve months ended December 31,

 

 

 

2019

2018

 

2019

2018

Net debt

 

 

$2,444,829

 

$2,291,967

 

 

$2,322,648

 

$2,191,257

 

Annualized Adjusted EBITDA

 

 

622,312

 

556,660

 

 

589,650

 

539,491

 

Net Debt to Annualized Adjusted EBITDA

 

 

3.9x

4.1x

 

3.9x

4.1x

CAMDEN

2020 FINANCIAL OUTLOOK
AS OF JANUARY 30, 2020

(Unaudited)

 

Earnings Guidance - Per Diluted Share

 

 

Expected FFO per share - diluted

 

$5.30 - $5.50

 

 

 

"Same Property" Communities

 

 

Number of Units

 

43,710

2019 Base Net Operating Income

 

$584 million

Total Revenue Growth

 

2.70% - 3.70%

Total Expense Growth

 

2.50% - 3.50%

Net Operating Income Growth

 

2.30% - 4.30%

Impact from 1% change in NOI Growth is approximately $0.058 / share

 

 

 

 

 

Capitalized Expenditures

 

 

Recurring

 

$72 - $76 million

Revenue Enhancing Capex and Repositions (a)

 

$52 - $56 million

Redevelopments (b)

 

$16 - $20 million

 

 

 

Acquisitions/Dispositions

 

 

Acquisition Volume (consolidated on balance sheet)

 

$200 - $400 million

Disposition Volume (consolidated on balance sheet)

 

$100 - $300 million

 

 

 

Development

 

 

Development Starts (consolidated on balance sheet)

 

$100 - $300 million

Development Spend (consolidated on balance sheet)

 

$285 - $315 million

 

 

 

Equity in Income of Joint Ventures (FFO)

 

$17 - $19 million

 

 

 

Non-Property Income

 

 

Non-Property Income

 

$10 - $12 million

Includes: Fee and asset management income and Interest and other income

 

 

 

 

 

 

 

 

Corporate Expenses

 

 

General and Administrative Expense

 

$52 - $56 million

Property Management Expense

 

$24 - $26 million

Fee and Asset Management Expense

 

$3 - $5 million

Corporate G&A Depreciation/Amortization

 

$9 - $11 million

 

 

 

Capital

 

 

Expected Debt Capital Transactions

 

$200 - $400 million

Expensed Interest

 

$85 - $89 million

Capitalized Interest

 

$16 - $18 million

(a)

Revenue Enhancing Capex and Repositions are capital expenditures that improve a community's cash flow and competitive position, typically kitchen and bath upgrades or other new amenities.

 

 

(b)

Redevelopments are capital expenditures that improve a community's cash flow and competitive position, through extensive unit, exterior building, common area, and amenity upgrades.

 

 

 

 

Note: This table contains forward-looking statements. Please see the paragraph regarding forward-looking statements earlier in this document. Additionally, please refer to the following pages for definitions and reconciliations of all non-GAAP financial measures presented in this document.

 

Kim Callahan, 713-354-2549

Source: Camden Property Trust