CAMDEN PROPERTY TRUST ANNOUNCES 2019 OPERATING RESULTS,
2020 FINANCIAL OUTLOOK, AND FIRST QUARTER 2020 DIVIDEND
Houston, Texas (January 30, 2020) - 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 Employeesʼ 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.
