CPT
$88.02
Camden Property Trust
($.60)
(.68%)
Earnings Details
2nd Quarter June 2020
Thursday, July 30, 2020 4:30:00 PM
Tweet Share Watch
Summary

Camden Property Trust Sees FFO Below Estimates

Camden Property Trust (CPT) reported 2nd Quarter June 2020 earnings of $1.09 per share on revenue of $250.7 million. The consensus earnings estimate was $1.15 per share on revenue of $264.3 million. Revenue fell 2.0% compared to the same quarter a year ago.

The company said it expects third quarter funds from operations of $1.14 to $1.20 per share. The current consensus FFO estimate is $1.23 per share for the quarter ending September 30, 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
$1.09
Earnings Whisper
-
Consensus Estimate
$1.15
Reported Revenue
$250.7 Mil
Revenue Estimate
$264.3 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Camden Property Trust Announces Second Quarter 2020 Operating Results

HOUSTON--(BUSINESS WIRE)--Camden Property Trust (NYSE:CPT) (the "Company") announced today operating results for the three and six months ended June 30, 2020. Net Income Attributable to Common Shareholders (“EPS”), Funds from Operations (“FFO”), and Adjusted Funds from Operations (“AFFO”) for the three and six months ended June 30, 2020 are detailed below. A reconciliation of EPS to FFO is included in the financial tables accompanying this press release.

 

Three Months Ended

Six Months Ended

 

June 30

June 30

Per Diluted Share

2020

2019

2020

2019

EPS

$0.17

$0.43

$0.60

$0.82

FFO

$1.09

$1.28

$2.44

$2.50

AFFO

$0.91

$1.07

$2.11

$2.19

EPS, FFO and AFFO include an approximate $0.14 per diluted share impact of non-recurring charges from COVID-19 Related Impact for the three and six months ended June 30, 2020 as detailed below.

COVID-19 Related Impact

Per Diluted Share

Income Statement Line Item

Resident Relief Funds (Wholly-Owned)

$0.090

Property revenues

Resident Relief Funds (JV Allocation at Pro-rata)

$0.004

Equity in income of joint ventures

Employee Relief Fund

$0.007

General & administrative expense

Frontline Bonus

$0.028

Property operating & maintenance expense

2Q COVID-19 Expenses

$0.013

Property operating & maintenance expense

Total

$0.142

 

 

Quarterly Growth

Sequential Growth

Year-To-Date Growth

Same Property Results*

2Q20 vs. 2Q19

2Q20 vs. 1Q20

2020 vs. 2019

Revenues

0.1%

(2.0)%

1.9%

Expenses

2.3%

0.9%

1.2%

Net Operating Income ("NOI")

(1.1)%

(3.5)%

2.2%

*Same property results exclude COVID-19 Related Impact described above.

Same Property Results

2Q20

2Q19

1Q20

Occupancy

95.2%

96.1%

96.1%

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. A reconciliation of net income to NOI and same property NOI is included in the financial tables accompanying this press release.

July Collections

Same Property Scheduled Rents*

July 2020

July 2019

2Q20

2Q19

Collected

98.7%

98.4%

97.7%

98.6%

Deferred/Payment Plan Arranged

—%

—%

1.1%

—%

Delinquent

1.3%

1.6%

1.2%

1.4%

*Rent is recognized as earned. The Company evaluates collectability on an ongoing basis and any accounts considered uncollectible are subsequently reserved against property revenues.

Retail revenues are not included above and comprise approximately 0.7% of total property revenues. The Company collected 46% and 48% of its retail billings for the second quarter of 2020 and July 2020, respectively.

Operating Statistics - Same Property Portfolio

New Lease and Renewal Data - Signed (1) (2)

July 2020*

July 2019

2Q20(2)

2Q19(2)

New Lease Rates

(2.0)%

4.0%

(2.8)%

4.0%

Renewal Rates

1.1%

5.3%

0.3%

5.7%

Blended Rates

(0.6)%

4.6%

(1.1)%

4.8%

 

 

 

 

 

New Leases

1,733

1,773

1,759

2,054

Renewals

1,716

1,692

2,096

1,962

Total Leases

3,449

3,465

3,855

4,016

New Lease and Renewal Data - Effective (3) (4)

July 2020*

July 2019

2Q20(4)

2Q19(4)

New Lease Rates

(2.0)%

4.4%

(2.1)%

3.2%

Renewal Rates

0.2%

5.6%

2.3%

5.4%

Blended Rates

(0.9)%

5.0%

0.3%

4.3%

 

 

 

 

 

New Leases

2,180

2,080

1,510

1,860

Renewals

2,404

2,400

1,898

1,714

Total Leases

4,584

4,480

3,408

3,574

*Data as of July 29, 2020

(1)

Average change in same property new lease and renewal rates vs. expiring lease rates when signed.

(2)

Data represents average monthly leases signed during the period.

(3)

Average change in same property new lease and renewal rates vs. expiring lease rates when effective.

(4)

Data represents average monthly leases effective during the period.

Occupancy and Turnover Data

July 2020*

July 2019

2Q20

2Q19

Occupancy

95.3%

96.3%

95.2%

96.1%

Annualized Gross Turnover

57%

66%

54%

57%

Annualized Net Turnover

46%

58%

43%

50%

*Data as of July 29, 2020 

Development Activity

Leasing began during the quarter at Camden Cypress Creek II in Cypress, TX, a joint venture project with 234 apartment homes.

Development Community - Construction Completed and Project in Lease-Up ($ in millions)

 

 

Total

Total

% Leased

Community Name

Location

Homes

Cost

as of 7/29/2020

Camden North End I

Phoenix, AZ

441

$98.8

89 %

Development Communities - Construction Ongoing ($ in millions)

 

 

Total

Total

% Leased

Community Name

Location

Homes

Estimated Cost

as of 7/29/2020

Camden Downtown I

Houston, TX

271

$132.0

24 %

Camden RiNo

Denver, CO

233

78.0

 

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 Cypress Creek II (JV)

Cypress, TX

234

38.0

6%

Total

 

1,939

$713.0

 

Capital Markets Transactions

During the quarter, the Company issued $750.0 million of senior unsecured notes under its existing shelf registration statement. These 10-year notes were offered to the public at 99.929% of par value with a coupon of 2.800%. Camden received net proceeds of approximately $743.1 million, net of underwriting discounts and other estimated offering expenses.

Liquidity Analysis

As of June 30, 2020, the Company had approximately $1.5 billion of liquidity comprised of $602 million in cash and cash equivalents and no amounts outstanding on its $900 million unsecured credit facility. The Company has no scheduled debt maturities until 2022, and had $184.7 million left to fund under its existing wholly-owned development pipeline at quarter-end.

Earnings Guidance

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

3Q20 Guidance
3Q20 vs. 3Q19 Same Property Growth
Per Diluted ShareRevenues(2.2)% - (1.0)%
EPS$0.27 - $0.33Expenses3.5% - 5.5%
FFO$1.14 - $1.20NOI(6.5)% - (3.5)%

Conference Call

Friday, July 31, 2020 at 10:00 AM CT
Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061
Passcode: 4385387
Webcast: https://services.choruscall.com/links/cpt200731.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 56,112 apartment homes across the United States. Upon completion of 7 properties currently under development, the Company’s portfolio will increase to 58,051 apartment homes in 171 properties. Camden has been recognized as one of the 100 Best Companies to Work For® by FORTUNE magazine for 13 consecutive years, most recently ranking #18. 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 June 30,

Six Months Ended June 30,

 

2020

2019

2020

2019

OPERATING DATA

 

 

 

 

 

 

 

 

 

Property revenues (a)

$250,683

 

$255,761

 

$516,562

 

$504,328

 

 

 

 

 

 

Property expenses

 

 

 

 

Property operating and maintenance

64,641

 

58,147

 

124,597

 

115,095

 

Real estate taxes

35,040

 

33,080

 

69,220

 

66,970

 

Total property expenses

99,681

 

91,227

 

193,817

 

182,065

 

 

 

 

 

 

Non-property income

 

 

 

 

Fee and asset management

2,380

 

1,867

 

4,907

 

3,710

 

Interest and other income

325

 

331

 

654

 

629

 

Income/(Loss) on deferred compensation plans

11,435

 

3,856

 

(3,425

)

14,212

 

Total non-property income

14,140

 

6,054

 

2,136

 

18,551

 

 

 

 

 

 

Other expenses

 

 

 

 

Property management

5,939

 

6,093

 

12,466

 

12,750

 

Fee and asset management

820

 

1,522

 

1,663

 

2,706

 

General and administrative

14,391

 

13,261

 

27,624

 

26,569

 

Interest

23,482

 

19,349

 

43,189

 

39,819

 

Depreciation and amortization

92,803

 

84,646

 

184,662

 

164,920

 

Expense/(Benefit) on deferred compensation plans

11,435

 

3,856

 

(3,425

)

14,212

 

Total other expenses

148,870

 

128,727

 

266,179

 

260,976

 

 

 

 

 

 

Gain on sale of land

 

 

382

 

 

Equity in income of joint ventures

1,633

 

1,909

 

3,755

 

3,821

 

Income from continuing operations before income taxes

17,905

 

43,770

 

62,839

 

83,659

 

Income tax expense

(394

)

(228

)

(861

)

(396

)

Net income

17,511

 

43,542

 

61,978

 

83,263

 

Less income allocated to non-controlling interests

(1,034

)

(1,143

)

(2,217

)

(2,251

)

Net income attributable to common shareholders (b)

$16,477

 

$42,399

 

$59,761

 

$81,012

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

Net income

$17,511

 

$43,542

 

$61,978

 

$83,263

 

Other comprehensive income

 

 

 

 

Unrealized (loss) on cash flow hedging activities

 

(7,060

)

 

(12,998

)

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

366

 

(351

)

732

 

(726

)

Comprehensive income

17,877

 

36,131

 

62,710

 

69,539

 

Less income allocated to non-controlling interests

(1,034

)

(1,143

)

(2,217

)

(2,251

)

Comprehensive income attributable to common shareholders

$16,843

 

$34,988

 

$60,493

 

$67,288

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

Total earnings per common share - basic

$0.17

 

$0.43

 

$0.60

 

$0.83

 

Total earnings per common share - diluted

0.17

 

0.43

 

0.60

 

0.82

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

Basic

99,399

 

98,903

 

99,348

 

97,903

 

Diluted

99,408

 

98,997

 

99,394

 

98,024

 

(a)

We elected to combine 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 June 30, 2020, we recognized $250.7 million of property revenue which consisted of approximately $221.4 million of rental revenue, net of $9.1 million related to the Resident Relief Funds, and approximately $29.3 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 $255.8 million recognized for the three months ended June 30, 2019, made up of approximately $226.3 million of rental revenue and approximately $29.5 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. For the six months ended June 30, 2020, we recognized $516.6 million of property revenue which consisted of approximately $458.0 million of rental revenue, net of $9.1 million related to the Resident Relief Funds, and approximately $58.6 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 $504.3 million recognized for the six months ended June 30, 2019, made up of approximately $446.3 million of rental revenue and approximately $58.0 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. Revenue related to utility rebilling to residents was $7.1 million and $6.4 million for the three months ended June 30, 2020 and 2019, respectively. For the six months ended June 30, 2020 we recognized $14.0 million of revenue related to utility rebilling to residents. This compares to revenue related to utility rebilling to residents of $12.9 million for the six months ended June 30, 2019.

(b)

Net income attributable to common shareholders includes the approximate $14.4 million COVID-19 Related Impact for the three and six months ended June 30, 2020. Please refer to page 28 of the supplement, footnote (a), for additional detail on the breakdown of the COVID-19 Related Impact.

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 June 30,

 

Six Months Ended June 30,

 

2020

2019

 

2020

2019

FUNDS FROM OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders (a)

$16,477

 

$42,399

 

 

$59,761

 

$81,012

 

Real estate depreciation and amortization

90,500

 

82,796

 

 

180,011

 

161,471

 

Adjustments for unconsolidated joint ventures

2,287

 

2,260

 

 

4,529

 

4,491

 

Income allocated to non-controlling interests

1,103

 

1,180

 

 

2,385

 

2,324

 

Funds from operations

$110,367

 

$128,635

 

 

$246,686

 

$249,298

 

 

 

 

 

 

 

Less: recurring capitalized expenditures (b)

(18,782

)

(21,166

)

 

(33,607

)

(30,821

)

 

 

 

 

 

 

Adjusted funds from operations

$91,585

 

$107,469

 

 

$213,079

 

$218,477

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

Funds from operations - diluted

$1.09

 

$1.28

 

 

$2.44

 

$2.50

 

Adjusted funds from operations - diluted

0.91

 

1.07

 

 

2.11

 

2.19

 

Distributions declared per common share

0.83

 

0.80

 

 

1.66

 

1.60

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

FFO/AFFO - diluted

101,156

 

100,750

 

 

101,142

 

99,779

 

 

 

 

 

 

 

PROPERTY DATA

 

 

 

 

 

Total operating properties (end of period) (c)

164

 

165

 

 

164

 

165

 

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

56,112

 

56,271

 

 

56,112

 

56,271

 

Total operating apartment homes (weighted average)

49,069

 

48,565

 

 

49,043

 

48,261

 

(a)

 

Net income attributable to common shareholders includes the approximate $14.4 million COVID-19 Related Impact for the three and six months ended June 30, 2020. Please refer to page 28 of the supplement, footnote (a), for additional detail on the breakdown of the COVID-19 Related Impact.

(b)

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

(c)

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)

 

Jun 30,
2020

Mar 31,
2020

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

ASSETS

 

 

 

 

 

Real estate assets, at cost

 

 

 

 

 

Land

$1,206,656

 

$1,206,130

 

$1,199,384

 

$1,158,342

 

$1,158,342

 

Buildings and improvements

7,597,165

 

7,547,150

 

7,404,090

 

7,242,256

 

7,192,644

 

 

8,803,821

 

8,753,280

 

8,603,474

 

8,400,598

 

8,350,986

 

Accumulated depreciation

(2,857,124

)

(2,770,848

)

(2,686,025

)

(2,638,693

)

(2,558,690

)

Net operating real estate assets

5,946,697

 

5,982,432

 

5,917,449

 

5,761,905

 

5,792,296

 

Properties under development, including land

514,336

 

467,288

 

512,319

 

440,917

 

397,418

 

Investments in joint ventures

21,735

 

22,318

 

20,688

 

21,715

 

21,313

 

Total real estate assets

6,482,768

 

6,472,038

 

6,450,456

 

6,224,537

 

6,211,027

 

Accounts receivable – affiliates

21,432

 

20,344

 

21,833

 

23,170

 

22,297

 

Other assets, net (a)

211,823

 

196,544

 

248,716

 

238,014

 

233,335

 

Cash and cash equivalents

601,584

 

22,277

 

23,184

 

157,239

 

149,551

 

Restricted cash

4,093

 

4,367

 

4,315

 

5,686

 

5,392

 

Total assets

$7,321,700

 

$6,715,570

 

$6,748,504

 

$6,648,646

 

$6,621,602

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Liabilities

 

 

 

 

 

Notes payable

 

 

 

 

 

Unsecured

$3,224,871

 

$2,606,876

 

$2,524,099

 

$2,432,137

 

$2,431,336

 

Secured

 

 

 

45,250

 

45,467

 

Accounts payable and accrued expenses

167,453

 

156,841

 

171,719

 

170,689

 

128,371

 

Accrued real estate taxes

62,499

 

32,365

 

54,408

 

74,658

 

59,525

 

Distributions payable

84,138

 

84,112

 

80,973

 

80,764

 

80,767

 

Other liabilities (b)

172,172

 

164,052

 

215,581

 

187,367

 

187,368

 

Total liabilities

3,711,133

 

3,044,246

 

3,046,780

 

2,990,865

 

2,932,834

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Common shares of beneficial interest

1,068

 

1,069

 

1,069

 

1,065

 

1,065

 

Additional paid-in capital

4,574,387

 

4,569,995

 

4,566,731

 

4,538,422

 

4,533,667

 

Distributions in excess of net income attributable to common shareholders

(689,809

)

(623,570

)

(584,167

)

(599,615

)

(563,834

)

Treasury shares, at cost

(341,637

)

(342,778

)

(348,419

)

(348,556

)

(348,480

)

Accumulated other comprehensive income (loss) (c)

(5,797

)

(6,163

)

(6,529

)

(6,438

)

(6,795

)

Total common equity

3,538,212

 

3,598,553

 

3,628,685

 

3,584,878

 

3,615,623

 

Non-controlling interests

72,355

 

72,771

 

73,039

 

72,903

 

73,145

 

Total equity

3,610,567

 

3,671,324

 

3,701,724

 

3,657,781

 

3,688,768

 

Total liabilities and equity

$7,321,700

 

$6,715,570

 

$6,748,504

 

$6,648,646

 

$6,621,602

 

 

 

 

 

 

 

 

(a) Includes net deferred charges of:

$3,031

 

$3,399

 

$3,658

 

$4,358

 

$4,345

 

 

 

 

 

 

 

(b) Includes deferred revenues of:

$344

 

$375

 

$408

 

$497

 

$581

 

 

 

 

 

 

 

(c) 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. 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 June 30,

 

Six Months Ended June 30,

 

2020

2019

 

2020

2019

Net income attributable to common shareholders (a)

$16,477

 

$42,399

 

 

$59,761

 

$81,012

 

Real estate depreciation and amortization

90,500

 

82,796

 

 

180,011

 

161,471

 

Adjustments for unconsolidated joint ventures

2,287

 

2,260

 

 

4,529

 

4,491

 

Income allocated to non-controlling interests

1,103

 

1,180

 

 

2,385

 

2,324

 

Funds from operations

$110,367

 

$128,635

 

 

$246,686

 

$249,298

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

(18,782

)

(21,166

)

 

(33,607

)

(30,821

)

 

 

 

 

 

 

Adjusted funds from operations

$91,585

 

$107,469

 

 

$213,079

 

$218,477

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

EPS diluted

99,408

 

98,997

 

 

99,394

 

98,024

 

FFO/AFFO diluted

101,156

 

100,750

 

 

101,142

 

99,779

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2020

2019

 

2020

2019

Total Earnings Per Common Share - Diluted

$0.17

 

$0.43

 

 

$0.60

 

$0.82

 

Real estate depreciation and amortization

0.89

 

0.82

 

 

1.78

 

1.62

 

Adjustments for unconsolidated joint ventures

0.02

 

0.02

 

 

0.04

 

0.05

 

Income allocated to non-controlling interests

0.01

 

0.01

 

 

0.02

 

0.01

 

FFO per common share - Diluted

$1.09

 

$1.28

 

 

$2.44

 

$2.50

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

(0.18

)

(0.21

)

 

(0.33

)

(0.31

)

 

 

 

 

 

 

AFFO per common share - Diluted

$0.91

 

$1.07

 

 

$2.11

 

$2.19

 

(a)

Net income attributable to common shareholders includes the approximate $14.4 million COVID-19 Related Impact for the three and six months ended June 30, 2020. The total COVID-19 Related Impact was comprised of $9.5 million related to the Resident Relief Funds which were established in April 2020. Of this amount, approximately $9.1 million was paid to residents at our wholly-owned communities and approximately $1.3 million of Resident Relief Funds paid to residents of the operating communities owned by our unconsolidated joint ventures, of which, we recognized our ownership interest of $0.4 million in equity in income of joint ventures. Additionally, we incurred approximately $4.1 million of COVID-19 expenses at our operating communities, which included $2.8 million of bonuses paid to on-site employees who provided essential services during the pandemic and $1.3 million in other directly related COVID-19 expenses. We also incurred approximately $0.8 million related to the Employee Relief Fund we established to help our employees impacted by COVID-19.

CAMDEN

NON-GAAP FINANCIAL MEASURES

DEFINITIONS & RECONCILIATIONS

(In thousands, except per share amounts)

 

(Unaudited)

 

3Q20

Range

 

Low

High

Expected earnings per common share - diluted

$0.27

$0.33

Expected real estate depreciation and amortization

0.84

0.84

Expected adjustments for unconsolidated joint ventures

0.02

0.02

Expected income allocated to non-controlling interests

0.01

0.01

Expected FFO per share - diluted

$1.14

$1.20

Note: This table contains forward-looking statements. Please see 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 12 of the supplement. 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 June 30,

 

Six months ended June 30,

 

2020

2019

 

2020

2019

Net income (a)

$17,511

 

$43,542

 

 

$61,978

 

$83,263

 

Less: Fee and asset management income

(2,380

)

(1,867

)

 

(4,907

)

(3,710

)

Less: Interest and other income

(325

)

(331

)

 

(654

)

(629

)

Less: (Income)/Loss on deferred compensation plans

(11,435

)

(3,856

)

 

3,425

 

(14,212

)

Plus: Property management expense

5,939

 

6,093

 

 

12,466

 

12,750

 

Plus: Fee and asset management expense

820

 

1,522

 

 

1,663

 

2,706

 

Plus: General and administrative expense

14,391

 

13,261

 

 

27,624

 

26,569

 

Plus: Interest expense

23,482

 

19,349

 

 

43,189

 

39,819

 

Plus: Depreciation and amortization expense

92,803

 

84,646

 

 

184,662

 

164,920

 

Plus: Expense/(Benefit) on deferred compensation plans

11,435

 

3,856

 

 

(3,425

)

14,212

 

Less: Gain on sale of land

 

 

 

(382

)

 

Less: Equity in income of joint ventures

(1,633

)

(1,909

)

 

(3,755

)

(3,821

)

Plus: Income tax expense

394

 

228

 

 

861

 

396

 

NOI (b) (c)

$151,002

 

$164,534

 

 

$322,745

 

$322,263

 

 

 

 

 

 

 

"Same Property" Communities

$143,837

 

$145,508

 

 

$292,941

 

$286,551

 

Non-"Same Property" Communities

18,530

 

15,349

 

 

38,498

 

28,467

 

Development and Lease-Up Communities

1,089

 

927

 

 

2,324

 

1,706

 

COVID-19 Related Impact (b) (c)

(13,170

)

 

 

(13,170

)

 

Dispositions/Other

716

 

2,750

 

 

2,152

 

5,539

 

NOI (b) (c)

$151,002

 

$164,534

 

 

$322,745

 

$322,263

 

(a)

Net income includes the approximate $14.4 million COVID-19 Related Impact for the three and six months ended June 30, 2020. Please refer to page 28 of the supplement, footnote (a), for additional detail on the breakdown of the COVID-19 Related Impact.

(b)

Two Resident Relief Funds were established for residents experiencing financial losses caused by the COVID-19 pandemic, and paid out approximately $9.1 million to approximately 7,100 Camden residents of our wholly-owned communities. All charges related to these funds were recognized in 2Q20 as a reduction of revenue.

(c)

We incurred approximately $4.1 million of COVID-19 expenses at our operating communities, which included $2.8 million of bonuses paid to on-site employees who provided essential services during the pandemic and $1.3 million in other directly related COVID-19 expenses, for the three and six months ended June 30, 2020.

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 2 for 6 month results. A reconciliation of net income attributable to common shareholders to Adjusted EBITDA is provided below:

 

 

Three months ended June 30,

 

Six months ended June 30,

 

2020

2019

 

2020

2019

Net income attributable to common shareholders (a)

$16,477

 

$42,399

 

 

$59,761

 

$81,012

 

Plus: Interest expense

23,482

 

19,349

 

 

43,189

 

39,819

 

Plus: Depreciation and amortization expense

92,803

 

84,646

 

 

184,662

 

164,920

 

Plus: Income allocated to non-controlling interests

1,034

 

1,143

 

 

2,217

 

2,251

 

Plus: Income tax expense

394

 

228

 

 

861

 

396

 

Plus: COVID-19 Related Impact (b)

13,920

 

 

 

13,920

 

 

Less: Gain on sale of land

 

 

 

(382

)

 

Less: Equity in income of joint ventures

(1,633

)

(1,909

)

 

(3,755

)

(3,821

)

Adjusted EBITDA

$146,477

 

$145,856

 

 

$300,473

 

$284,577

 

Annualized Adjusted EBITDA

$585,908

 

$583,424

 

 

$600,946

 

$569,154

 

(a)

Net income attributable to common shareholders includes the approximate $14.4 million COVID-19 Related Impact for the three and six months ended June 30, 2020. Please refer to page 28 of the supplement, footnote (a), for additional detail on the breakdown of the COVID-19 Related Impact.

(b)

Approximately $13.9 million of the stated COVID-19 Related Impact, which consists of the Resident Relief Funds, Employee Relief Fund, direct COVID-19 expenses, and bonus paid to on-site employees, has been added back to the Adjusted EBITDA calculation.

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 June 30,

 

the six months ended June 30,

 

 

 

2020

2019

 

2020

2019

Unsecured notes payable

 

 

$3,224,594

 

$2,323,439

 

 

$2,929,272

 

$2,202,336

 

Secured notes payable

 

 

 

45,539

 

 

 

158,737

 

Total debt

 

 

3,224,594

 

2,368,978

 

 

2,929,272

 

2,361,073

 

Less: Cash and cash equivalents

 

 

(558,090

)

(89,879

)

 

(282,409

)

(114,314

)

Net debt

 

 

$2,666,504

 

$2,279,099

 

 

$2,646,863

 

$2,246,759

 

Net Debt to Annualized Adjusted EBITDA:

 

 

 

Three months ended June 30,

 

Six months ended June 30,

 

 

 

2020

2019

 

2020

2019

Net debt

 

 

$2,666,504

$2,279,099

 

$2,646,863

$2,246,759

Annualized Adjusted EBITDA

 

 

585,908

583,424

 

600,946

569,154

Net Debt to Annualized Adjusted EBITDA

 

 

4.6x

3.9x

 

4.4x

3.9x

 

Kim Callahan, 713-354-2549

Source: Camden Property Trust