Camden Property Trust Announces Second Quarter 2019 Operating Results

HOUSTON--()--Camden Property Trust (NYSE:CPT) announced today operating results for the three and six months ended June 30, 2019. 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, 2019 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

2019

2018

2019

2018

EPS

$0.43

$0.40

$0.82

$0.81

FFO

$1.28

$1.19

$2.50

$2.34

AFFO

$1.07

$1.00

$2.19

$2.04

 

Quarterly Growth

Sequential Growth

Year-To-Date Growth

Same Property Results

2Q19 vs. 2Q18

2Q19 vs. 1Q19

2019 vs. 2018

Revenues

3.4%

1.5%

3.5%

Expenses

2.0%

(1.3)%

2.9%

Net Operating Income ("NOI")

4.2%

3.1%

3.9%

Same Property Results

2Q19

2Q18

1Q19

Occupancy

96.1%

95.7%

95.8%

“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 second quarter. As a result, we have increased the midpoint of our 2019 FFO guidance by $0.02 to $5.09 per share, and raised the midpoint of our 2019 expected same property NOI growth from 3.40% to 3.75%.”

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

Lease-up was completed at Camden Washingtonian in Gaithersburg, MD, and construction commenced at Camden Cypress Creek II in Cypress, TX, a joint venture project with 234 apartment homes.

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

 

 

Total

Total

% Leased

Community Name

Location

Units

Cost

as of 7/24/2019

Camden McGowen Station

Houston, TX

315

$90.9

83%

Camden North End I

Phoenix, AZ

441

98.2

70%

Camden Grandview II

Charlotte, NC

28

22.4

46%

Total

 

784

$211.5

74%

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 Cypress Creek II (JV)

Cypress, TX

234

38.0

Total

 

1,806

$615.0

Acquisition Activity

During the quarter, Camden acquired approximately 4.3 acres of land in Charlotte, NC for approximately $10.9 million for the future development of approximately 400 apartment homes and acquired approximately 11.6 acres of land in Tempe, AZ for approximately $18.0 million for the future development of approximately 400 apartment homes. The Company also acquired Camden Rainey Street, a 326-home apartment community located in Austin, TX for approximately $120.4 million.

Capital Markets Transactions

In June 2019, the Company issued $600.0 million senior unsecured notes under its existing shelf registration statement. These ten-year notes were offered to the public at 99.751% of par value with a coupon of 3.150%. After giving effect to the settlement of the swap agreements which will be recognized over the first seven years of the notes and deducting the underwriting discounts and other estimated expenses of the offering, the effective annual interest rate on the notes is approximately 3.84% through June 2026, and approximately 3.28% thereafter, for an all-in average effective rate of approximately 3.67%. The Company received net proceeds of approximately $593.4 million, net of underwriting discounts and other estimated offering expenses.

Executive Officer Appointments

On July 24, 2019, Camden’s Board of Trust Managers appointed D. Keith Oden from President to Executive Vice Chairman of the Board, and H. Malcolm Stewart from Chief Operating Officer to President and Chief Operating Officer. Mr. Oden will retain his current role of providing strategic leadership, communicating and implementing the Company’s mission, and managing the Company’s operations. Mr. Stewart will continue to report to Mr. Oden and will retain his current responsibilities for overseeing the Company’s property operations, construction and facilities projects, strategic and business programs, and other day-to-day operational functions. These changes recognize Mr. Stewart’s long-term contributions to Camden’s success and, as part of good corporate governance and long-term succession planning, are intended to create an avenue for future promotions of other existing senior-level executives.

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 third quarter 2019 as detailed below.

 

3Q19

2019

2019 Midpoint

Per Diluted Share

Range

Range

Current

Prior

Change

EPS

$0.40 - $0.44

$1.63 - $1.75

$1.69

$1.64

$0.05

FFO

$1.26 - $1.30

$5.03 - $5.15

$5.09

$5.07

$0.02

 

2019

2019 Midpoint

Same Property Growth

Range

Current

Prior

Change

Revenues

3.15% - 3.65%

3.40%

3.40%

0.00%

Expenses

2.50% - 3.00%

2.75%

3.35%

(0.60)%

NOI

3.25% - 4.25%

3.75%

3.40%

0.35%

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, July 26, 2019 at 10:00 AM CT
Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061
Passcode: 7002268
Webcast: https://services.choruscall.com/links/cpt190726.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 6 properties currently under development, the Company’s portfolio will increase to 58,077 apartment homes in 171 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 June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

 

2019

 

2018

 

OPERATING DATA

 

 

 

 

 

 

 

 

 

 

 

Property revenues (a)

$255,761

$237,133

 

$504,328

$467,816

 

 

 

 

 

 

Property expenses

 

 

 

 

 

Property operating and maintenance

58,147

 

54,735

 

 

115,095

 

108,651

 

Real estate taxes

33,080

 

30,326

 

 

66,970

 

60,375

 

Total property expenses

91,227

 

85,061

 

 

182,065

 

169,026

 

 

 

 

 

 

 

Non-property income

 

 

 

 

 

Fee and asset management

1,867

 

1,826

 

 

3,710

 

3,824

 

Interest and other income

331

 

491

 

 

629

 

1,284

 

Income on deferred compensation plans

3,856

 

435

 

 

14,212

 

230

 

Total non-property income

6,054

 

2,752

 

 

18,551

 

5,338

 

 

 

 

 

 

 

Other expenses

 

 

 

 

 

Property management

6,093

 

6,473

 

 

12,750

 

13,112

 

Fee and asset management

1,522

 

1,088

 

 

2,706

 

2,053

 

General and administrative

13,261

 

12,272

 

 

26,569

 

24,495

 

Interest

19,349

 

20,607

 

 

39,819

 

40,981

 

Depreciation and amortization

84,646

 

75,569

 

 

164,920

 

145,793

 

Expense on deferred compensation plans

3,856

 

435

 

 

14,212

 

230

 

Total other expenses

128,727

 

116,444

 

 

260,976

 

226,664

 

 

 

 

 

 

 

Equity in income of joint ventures

1,909

 

1,872

 

 

3,821

 

3,701

 

Income from continuing operations before income taxes

43,770

 

40,252

 

 

83,659

 

81,165

 

Income tax expense

(228

)

(380

)

 

(396

)

(768

)

Net income

43,542

 

39,872

 

 

83,263

 

80,397

 

Less income allocated to non-controlling interests from continuing operations

(1,143

)

(1,201

)

 

(2,251

)

(2,331

)

Net income attributable to common shareholders

$42,399

 

$38,671

 

 

$81,012

 

$78,066

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

Net income

$43,542

$39,872

 

$83,263

$80,397

Other comprehensive income

 

 

 

 

 

Unrealized gain (loss) on cash flow hedging activities

(7,060

)

5,181

 

 

(12,998

)

8,782

 

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

(351

)

34

 

 

(726

)

69

 

Comprehensive income

36,131

 

45,087

 

 

69,539

 

89,248

 

Less income allocated to non-controlling interests from continuing operations

(1,143

)

(1,201

)

 

(2,251

)

(2,331

)

Comprehensive income attributable to common shareholders

$34,988

 

$43,886

 

 

$67,288

 

$86,917

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

Total earnings per common share - basic

$0.43

 

$0.40

 

 

$0.83

 

$0.81

 

Total earnings per common share - diluted

0.43

 

0.40

 

 

0.82

 

0.81

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

Basic

98,903

 

95,243

 

 

97,903

 

95,155

 

Diluted

98,997

 

95,337

 

 

98,024

 

95,289

 

 

(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 June 30, 2019, we recognized $255.7 million of property revenue which consisted of approximately $226.2 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. This compares to property revenue of $237.1 million recognized for the three months ended June 30, 2018, made up of approximately $208.6 million of rental revenue and approximately $28.5 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, 2019, we recognized $504.3 million of property revenue which consisted 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. This compares to property revenue of $467.8 million recognized for the six months ended June 30, 2018, made up of approximately $412.1 million of rental revenue and approximately $55.7 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 June 30,

 

Six Months Ended June 30,

 

 

2019

2018

 

2019

2018

FUNDS FROM OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

$42,399

 

$38,671

 

 

$81,012

 

$78,066

 

Real estate depreciation and amortization

82,796

 

73,980

 

 

161,471

 

142,575

 

Adjustments for unconsolidated joint ventures

2,260

 

2,257

 

 

4,491

 

4,504

 

Income allocated to non-controlling interests

1,180

 

1,201

 

 

2,324

 

2,331

 

Funds from operations

$128,635

 

$116,109

 

 

$249,298

 

$227,476

 

 

 

 

 

 

 

Less: recurring capitalized expenditures (a)

(21,166

)

(19,190

)

 

(30,821

)

(29,189

)

 

 

 

 

 

 

Adjusted funds from operations

$107,469

 

$96,919

 

 

$218,477

 

$198,287

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

Funds from operations - diluted

$1.28

 

$1.19

 

 

$2.50

 

$2.34

 

Adjusted funds from operations - diluted

1.07

 

1.00

 

 

2.19

 

2.04

 

Distributions declared per common share

0.80

 

0.77

 

 

1.60

 

1.54

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

FFO/AFFO - diluted

100,750

 

97,220

 

 

99,779

 

97,172

 

 

 

 

 

 

 

PROPERTY DATA

 

 

 

 

 

Total operating properties (end of period) (b)

165

 

158

 

 

165

 

158

 

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

56,271

 

54,181

 

 

56,271

 

54,181

 

Total operating apartment homes (weighted average)

48,565

 

46,682

 

 

48,261

 

46,518

 

 

(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)

 

Jun 30,
2019

 

Mar 31,
2019

 

Dec 31,
2018

 

Sep 30,
2018

 

Jun 30,
2018

 

ASSETS

 

 

 

 

 

Real estate assets, at cost

 

 

 

 

 

Land

$1,158,342

 

$1,127,485

 

$1,098,526

 

$1,088,293

 

$1,066,077

 

Buildings and improvements

7,192,644

 

7,057,101

 

6,935,971

 

6,828,068

 

6,620,169

 

 

8,350,986

 

8,184,586

 

8,034,497

 

7,916,361

 

7,686,246

 

Accumulated depreciation

(2,558,690

)

(2,479,875

)

(2,403,149

)

(2,328,092

)

(2,255,737

)

Net operating real estate assets

5,792,296

 

5,704,711

 

5,631,348

 

5,588,269

 

5,430,509

 

Properties under development, including land

397,418

 

307,981

 

293,978

 

315,904

 

373,350

 

Investments in joint ventures

21,313

 

21,955

 

22,283

 

24,664

 

26,205

 

Total real estate assets

6,211,027

 

6,034,647

 

5,947,609

 

5,928,837

 

5,830,064

 

Accounts receivable – affiliates

22,297

 

21,337

 

22,920

 

22,605

 

23,473

 

Other assets, net (a)(b)

233,335

 

217,663

 

205,454

 

228,468

 

204,717

 

Cash and cash equivalents

149,551

 

6,092

 

34,378

 

8,529

 

64,071

 

Restricted cash

5,392

 

5,655

 

9,225

 

10,061

 

9,581

 

Total assets

$6,621,602

 

$6,285,394

 

$6,219,586

 

$6,198,500

 

$6,131,906

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Liabilities

 

 

 

 

 

Notes payable

 

 

 

 

 

Unsecured

$2,431,336

 

$2,079,136

 

$1,836,427

 

$1,394,178

 

$1,339,659

 

Secured

45,467

 

45,683

 

485,176

 

865,431

 

865,629

 

Accounts payable and accrued expenses (b)

128,371

 

126,964

 

146,866

 

140,046

 

127,777

 

Accrued real estate taxes

59,525

 

30,891

 

54,358

 

70,174

 

52,461

 

Distributions payable

80,767

 

80,771

 

74,982

 

74,976

 

75,071

 

Other liabilities (b)(c)

187,368

 

195,629

 

183,999

 

178,898

 

156,767

 

Total liabilities

2,932,834

 

2,559,074

 

2,781,808

 

2,723,703

 

2,617,364

 

 

 

 

 

 

 

Non-qualified deferred compensation share awards

 

 

52,674

 

60,874

 

85,938

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Common shares of beneficial interest

1,065

 

1,064

 

1,031

 

1,030

 

1,027

 

Additional paid-in capital

4,533,667

 

4,527,659

 

4,154,763

 

4,147,278

 

4,132,404

 

Distributions in excess of net income attributable to common shareholders

(563,834

)

(526,856

)

(495,496

)

(466,512

)

(436,575

)

Treasury shares, at cost

(348,480

)

(349,655

)

(355,804

)

(355,825

)

(355,752

)

Accumulated other comprehensive income (loss) (d)

(6,795

)

616

 

6,929

 

14,031

 

8,794

 

Total common equity

3,615,623

 

3,652,828

 

3,311,423

 

3,340,002

 

3,349,898

 

Non-controlling interests

73,145

 

73,492

 

73,681

 

73,921

 

78,706

 

Total equity

3,688,768

 

3,726,320

 

3,385,104

 

3,413,923

 

3,428,604

 

Total liabilities and equity

$6,621,602

 

$6,285,394

 

$6,219,586

 

$6,198,500

 

$6,131,906

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Includes net deferred charges of:

$4,345

 

$5,081

 

$242

 

$538

 

$724

 

 

 

 

 

 

 

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

$—

 

($13,370

)

($7,433

)

$15,674

 

$10,472

 

 

 

 

 

 

 

(c) Includes deferred revenues of:

$581

 

$659

 

$552

 

$603

 

$659

 

 

 

 

 

 

 

(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 June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

Net income attributable to common shareholders

$42,399

 

$38,671

 

$81,012

 

$78,066

 

Real estate depreciation and amortization

82,796

 

73,980

 

161,471

 

142,575

 

Adjustments for unconsolidated joint ventures

2,260

 

2,257

 

4,491

 

4,504

 

Income allocated to non-controlling interests

1,180

 

1,201

 

2,324

 

2,331

 

Funds from operations

$128,635

 

$116,109

 

$249,298

 

$227,476

 

 

 

 

 

 

Less: recurring capitalized expenditures

(21,166

)

(19,190

)

(30,821

)

(29,189

)

 

 

 

 

 

Adjusted funds from operations

$107,469

 

$96,919

 

$218,477

 

$198,287

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

EPS diluted

98,997

 

95,337

 

98,024

 

95,289

 

FFO/AFFO diluted

100,750

 

97,220

 

99,779

 

97,172

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

Total Earnings Per Common Share - Diluted

$0.43

$0.40

$0.82

 

$0.81

 

Real estate depreciation and amortization

0.82

 

0.76

 

1.62

 

1.47

 

Adjustments for unconsolidated joint ventures

0.02

 

0.02

 

0.05

 

0.05

 

Income allocated to non-controlling interests

0.01

 

0.01

0.01

 

0.01

 

FFO per common share - Diluted

$1.28

 

$1.19

 

$2.50

 

$2.34

 

 

 

 

 

 

Less: recurring capitalized expenditures

(0.21

)

(0.19

)

(0.31

)

(0.30

)

 

 

 

 

 

AFFO per common share - Diluted

$1.07

 

$1.00

 

$2.19

 

$2.04

 

 

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:

 

3Q19 Range

 

 

2019 Range

 

Low

 

High

 

 

Low

 

High

Expected earnings per common share - diluted

$0.40

 

$0.44

 

 

$1.63

 

$1.75

Expected real estate depreciation and amortization

0.83

 

0.83

 

 

3.27

 

3.27

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

 

 

0.04

 

0.04

Expected FFO per share - diluted

$1.26

 

$1.30

 

 

$5.03

 

$5.15

 

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 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,

 

2019

2018

 

2019

2018

Net income

$43,542

 

$39,872

 

 

$83,263

 

$80,397

 

Less: Fee and asset management income

(1,867

)

(1,826

)

 

(3,710

)

(3,824

)

Less: Interest and other income

(331

)

(491

)

 

(629

)

(1,284

)

Less: Income on deferred compensation plans

(3,856

)

(435

)

 

(14,212

)

(230

)

Plus: Property management expense

6,093

 

6,473

 

 

12,750

 

13,112

 

Plus: Fee and asset management expense

1,522

 

1,088

 

 

2,706

 

2,053

 

Plus: General and administrative expense

13,261

 

12,272

 

 

26,569

 

24,495

 

Plus: Interest expense

19,349

 

20,607

 

 

39,819

 

40,981

 

Plus: Depreciation and amortization expense

84,646

 

75,569

 

 

164,920

 

145,793

 

Plus: Expense on deferred compensation plans

3,856

 

435

 

 

14,212

 

230

 

Less: Equity in income of joint ventures

(1,909

)

(1,872

)

 

(3,821

)

(3,701

)

Plus: Income tax expense

228

 

380

 

 

396

 

768

 

NOI

$164,534

 

$152,072

 

 

$322,263

 

$298,790

 

 

 

 

 

 

 

"Same Property" Communities

$138,897

 

$133,353

 

 

$273,579

 

$263,332

 

Non-"Same Property" Communities

22,781

 

17,300

 

 

43,339

 

32,638

 

Development and Lease-Up Communities

1,482

 

79

 

 

2,467

 

77

 

Dispositions/Other

1,374

 

1,340

 

 

2,878

 

2,743

 

NOI

$164,534

 

$152,072

 

 

$322,263

 

$298,790

 

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,

 

2019

 

2018

 

2019

 

2018

Net income attributable to common shareholders

$42,399

 

 

$38,671

 

 

$81,012

 

 

$78,066

 

Plus: Interest expense

19,349

 

 

20,607

 

 

39,819

 

 

40,981

 

Plus: Depreciation and amortization expense

84,646

 

 

75,569

 

 

164,920

 

 

145,793

 

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

1,143

 

 

1,201

 

 

2,251

 

 

2,331

 

Plus: Income tax expense

228

 

 

380

 

 

396

 

 

768

 

Less: Equity in income of joint ventures

(1,909

)

(1,872

)

 

(3,821

)

(3,701

)

Adjusted EBITDA

$145,856

 

 

$134,556

 

 

$284,577

 

 

$264,238

 

Annualized Adjusted EBITDA

$583,424

 

 

$538,224

 

 

$569,154

 

 

$528,476

 

 

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,

 

2019

 

2018

 

2019

 

2018

Unsecured notes payable

$2,323,439

 

$1,339,486

 

 

$2,202,336

 

$1,339,228

 

Secured notes payable

45,539

 

865,686

 

 

158,737

 

865,772

 

Total debt

2,368,978

 

2,205,172

 

 

2,361,073

 

2,205,000

 

Less: Cash and cash equivalents

(89,879

)

(42,275

)

(114,314

)

(76,948

)

Net debt

$2,279,099

 

$2,162,897

 

 

$2,246,759

 

$2,128,052

 

 

Net Debt to Annualized Adjusted EBITDA:

 

Three months ended June 30,

 

Six months ended June 30,

 

2019

 

2018

 

2019

 

2018

Net debt

$2,279,099

 

$2,162,897

 

 

$2,246,759

 

 

$2,128,052

 

Annualized Adjusted EBITDA

583,424

 

538,224

 

 

569,154

 

 

528,476

 

Net Debt to Annualized Adjusted EBITDA

3.9x

4.0x

 

3.9x

4.0x

 

Contacts

Kim Callahan, 713-354-2549

Contacts

Kim Callahan, 713-354-2549