Camden Property Trust (NYSE:CPT) (the "Company") announced today operating results for the three and nine months ended September 30, 2020. Net Income Attributable to Common Shareholders (“EPS”), Funds from Operations (“FFO”), and Adjusted Funds from Operations (“AFFO”) for the three and nine months ended September 30, 2020 are detailed below. A reconciliation of EPS to FFO is included in the financial tables accompanying this press release.
Three Months Ended | Nine Months Ended | |||
September 30 | September 30 | |||
Per Diluted Share | 2020 | 2019 | 2020 | 2019 |
EPS | $0.35 | $0.44 | $0.95 | $1.26 |
FFO | $1.25 | $1.29 | $3.69 | $3.79 |
AFFO | $1.03 | $1.09 | $3.14 | $3.28 |
The Company incurred approximately $0.4 million and $14.8 million of COVID-19 Related Impact for the three and nine months ended September 30, 2020, respectively.
Quarterly Growth | Sequential Growth | Year-To-Date Growth | |
Same Property Results* | 3Q20 vs. 3Q19 | 3Q20 vs. 2Q20 | 2020 vs. 2019 |
Revenues | 0.8% | 2.2% | 1.5% |
Expenses | 4.7% | 4.9% | 2.4% |
Net Operating Income ("NOI") | (1.3)% | 0.6% | 1.0% |
*Same property results exclude any COVID-19 Related Impact.
Same Property Results | 3Q20 | 3Q19 | 2Q20 |
Occupancy | 95.6% | 96.3% | 95.2% |
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.
October Collections
Same Property Scheduled Rents* | October 2020 | October 2019 | 3Q20 | 3Q19 |
Collected | 98.1% | 98.2% | 99.4% | 98.3% |
Deferred/Payment Plan Arranged | —% | —% | —% | —% |
Delinquent | 1.9% | 1.8% | 0.6% | 1.7% |
*Rent is recognized as earned. The Company evaluates collectability on an ongoing basis and any accounts considered uncollectable are recorded against property revenues.
Retail revenues are not included above and comprise approximately 0.6% of total property revenues. The Company collected 58% and 54% of its retail billings for the third quarter of 2020 and October 29, 2020, respectively.
Operating Statistics - Same Property Portfolio
New Lease and Renewal Data - Date Signed (1) (2) | October 2020* | October 2019 | 3Q20(2) | 3Q19(2) |
New Lease Rates | (3.1)% | (0.4)% | (3.0)% | 2.5% |
Renewal Rates | 3.0% | 5.0% | 1.7% | 5.1% |
Blended Rates | (0.8)% | 1.8% | (0.9)% | 3.7% |
New Leases | 1,248 | 1,415 | 1,760 | 1,686 |
Renewals | 838 | 995 | 1,467 | 1,418 |
Total Leases | 2,086 | 2,410 | 3,227 | 3,104 |
New Lease and Renewal Data - Date Effective (3) (4) | October 2020* | October 2019 | 3Q20(4) | 3Q19(4) |
New Lease Rates | (3.5)% | 0.4% | (2.4)% | 3.4% |
Renewal Rates | 2.1% | 4.7% | 0.6% | 5.4% |
Blended Rates | (1.0)% | 2.5% | (0.9)% | 4.4% |
New Leases | 1,698 | 1,487 | 1,943 | 2,003 |
Renewals | 1,338 | 1,379 | 2,087 | 2,106 |
Total Leases | 3,036 | 2,866 | 4,030 | 4,109 |
*Data as of October 27, 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 | October 2020* | October 2019 | 3Q20 | 3Q19 |
Occupancy | 95.4% | 96.1% | 95.6% | 96.3% |
Annualized Gross Turnover | 50% | 48% | 60% | 62% |
Annualized Net Turnover | 39% | 39% | 49% | 52% |
*Data as of October 27, 2020
Development Activity
During the quarter, construction was completed at Camden Downtown I in Houston, TX, lease-up was completed at Camden North End I in Phoenix, AZ and leasing began at Camden RiNo in Denver, CO. The Company also commenced construction at three communities: Camden Atlantic in Plantation, FL, Camden Tempe II in Tempe, AZ and Camden NoDa in Charlotte, NC. Subsequent to quarter-end, leasing began at Camden North End II in Phoenix, AZ.
Development Community - Construction Completed and Project in Lease-Up ($ in millions)
Total | Total | % Leased | ||
Community Name | Location | Homes | Cost | as of 10/27/2020 |
Camden Downtown I | Houston, TX | 271 | $131.2 | 39% |
Development Communities - Construction Ongoing ($ in millions)
Total | Total | % Leased | ||
Community Name | Location | Homes | Estimated Cost | as of 10/27/2020 |
Camden RiNo | Denver, CO | 233 | $79.0 | 40% |
Camden North End II | Phoenix, AZ | 343 | 90.0 | 1% |
Camden Lake Eola | Orlando, FL | 360 | 125.0 | |
Camden Buckhead | Atlanta, GA | 366 | 160.0 | |
Camden Hillcrest | San Diego, CA | 132 | 95.0 | |
Camden Atlantic | Plantation, FL | 269 | 100.0 | |
Camden Tempe II | Tempe, AZ | 397 | 115.0 | |
Camden NoDa | Charlotte, NC | 387 | 105.0 | |
Camden Cypress Creek II (JV) | Cypress, TX | 234 | 38.0 | 33% |
Total | 2,721 | $907.0 |
Liquidity Analysis
As of September 30, 2020, Camden had approximately $1.5 billion of liquidity comprised of approximately $590 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 at quarter-end had $384 million left to fund under its existing wholly-owned development pipeline. As of September 30, 2020, Camden had outstanding letters of credit totaling approximately $10 million, which reduced the availability under its unsecured credit facility to $890 million.
In October 2020, the Company entered into a $40 million two-year unsecured floating rate term loan with an unrelated third party and used the net proceeds, together with cash on hand, to repay its $100 million unsecured term loan which was scheduled to mature in 2022.
Earnings Guidance
Camden updated its earnings guidance for 2020 based on its current and expected views of the apartment market and general economic conditions, and provided guidance for fourth quarter 2020 as detailed below.
Per Diluted Share | 4Q20 Range | 2020 Range |
EPS | $0.30 - $0.36 | $1.25 - $1.31 |
FFO | $1.21 - $1.27 | $4.90 - $4.96 |
Same Property Growth | 2020 Range | |
Revenues | 0.75% - 1.25% | |
Expenses | 3.20% - 3.60% | |
NOI | (0.75)% - 0.15% |
Conference Call
Friday, October 30, 2020 at 10:00 AM CT
Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061
Passcode: 6005789
Webcast: https://services.choruscall.com/links/cpt201030.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 165 properties containing 56,383 apartment homes across the United States. Upon completion of 9 properties currently under development, the Company’s portfolio will increase to 59,104 apartment homes in 174 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 September 30, | Nine Months Ended September 30, | ||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||
OPERATING DATA | |||||||||||||
Property revenues (a) | $ | 265,721 | $ | 260,672 | $ | 782,283 | $ | 765,000 | |||||
Property expenses | |||||||||||||
Property operating and maintenance | 65,191 | 62,277 | 189,788 | 177,372 | |||||||||
Real estate taxes | 35,861 | 31,596 | 105,081 | 98,566 | |||||||||
Total property expenses | 101,052 | 93,873 | 294,869 | 275,938 | |||||||||
Non-property income | |||||||||||||
Fee and asset management | 2,542 | 2,139 | 7,449 | 5,849 | |||||||||
Interest and other income | 1,948 | 1,485 | 2,602 | 2,114 | |||||||||
Income on deferred compensation plans | 5,071 | 780 | 1,646 | 14,992 | |||||||||
Total non-property income | 9,561 | 4,404 | 11,697 | 22,955 | |||||||||
Other expenses | |||||||||||||
Property management | 5,894 | 6,154 | 18,360 | 18,904 | |||||||||
Fee and asset management | 1,018 | 1,316 | 2,681 | 4,022 | |||||||||
General and administrative | 12,726 | 13,458 | 40,350 | 40,027 | |||||||||
Interest | 24,265 | 20,719 | 67,454 | 60,538 | |||||||||
Depreciation and amortization | 90,575 | 85,814 | 275,237 | 250,734 | |||||||||
Expense on deferred compensation plans | 5,071 | 780 | 1,646 | 14,992 | |||||||||
Total other expenses | 139,549 | 128,241 | 405,728 | 389,217 | |||||||||
Gain on sale of land | — | — | 382 | — | |||||||||
Equity in income of joint ventures | 2,154 | 2,133 | 5,909 | 5,954 | |||||||||
Income from continuing operations before income taxes | 36,835 | 45,095 | 99,674 | 128,754 | |||||||||
Income tax expense | (615 | ) | (313 | ) | (1,476 | ) | (709 | ) | |||||
Net income | 36,220 | 44,782 | 98,198 | 128,045 | |||||||||
Less income allocated to non-controlling interests | (1,263 | ) | (1,185 | ) | (3,480 | ) | (3,436 | ) | |||||
Net income attributable to common shareholders (b) | $ | 34,957 | $ | 43,597 | $ | 94,718 | $ | 124,609 | |||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||
Net income | $ | 36,220 | $ | 44,782 | $ | 98,198 | $ | 128,045 | |||||
Other comprehensive income | |||||||||||||
Unrealized (loss) on cash flow hedging activities | — | — | — | (12,998 | ) | ||||||||
Reclassification of net loss (gain) on cash flow hedging activities, prior service cost and net loss on post retirement obligation | 366 | 357 | 1,098 | (369 | ) | ||||||||
Comprehensive income | 36,586 | 45,139 | 99,296 | 114,678 | |||||||||
Less income allocated to non-controlling interests | (1,263 | ) | (1,185 | ) | (3,480 | ) | (3,436 | ) | |||||
Comprehensive income attributable to common shareholders | $ | 35,323 | $ | 43,954 | $ | 95,816 | $ | 111,242 | |||||
PER SHARE DATA | |||||||||||||
Total earnings per common share - basic | $ | 0.35 | $ | 0.44 | $ | 0.95 | $ | 1.27 | |||||
Total earnings per common share - diluted | 0.35 | 0.44 | 0.95 | 1.26 | |||||||||
Weighted average number of common shares outstanding: | |||||||||||||
Basic | 99,419 | 98,959 | 99,372 | 98,259 | |||||||||
Diluted | 99,455 | 99,066 | 99,414 | 98,375 | |||||||||
(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 September 30, 2020, we recognized $265.7 million of property revenue which consisted of approximately $234.3 million of rental revenue and approximately $31.4 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 $260.7 million recognized for the three months ended September 30, 2019, made up of approximately $230.7 million of rental revenue and approximately $30.0 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. For the nine months ended September 30, 2020, we recognized $782.3 million of property revenue which consisted of approximately $692.2 million of rental revenue and approximately $90.1 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 $765.0 million recognized for the nine months ended September 30, 2019, made up of approximately $677.0 million of rental revenue and approximately $88.0 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. Revenue related to utility rebilling to residents was $7.4 million and $6.6 million for the three months ended September 30, 2020 and 2019, respectively. For the nine months ended September 30, 2020 we recognized $21.4 million of revenue related to utility rebilling to residents. This compares to revenue related to utility rebilling to residents of $19.5 million for the nine months ended September 30, 2019. |
(b) | Net income attributable to common shareholders includes an approximate $0.4 million and $14.8 million COVID-19 Related Impact for the three and nine months ended September 30, 2020, respectively. 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 September 30, | Nine Months Ended September 30, | ||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||
FUNDS FROM OPERATIONS | |||||||||||||
Net income attributable to common shareholders (a) | $ | 34,957 | $ | 43,597 | $ | 94,718 | $ | 124,609 | |||||
Real estate depreciation and amortization | 87,974 | 83,437 | 267,985 | 244,908 | |||||||||
Adjustments for unconsolidated joint ventures | 2,404 | 2,245 | 6,933 | 6,736 | |||||||||
Income allocated to non-controlling interests | 1,276 | 1,225 | 3,661 | 3,549 | |||||||||
Funds from operations | $ | 126,611 | $ | 130,504 | $ | 373,297 | $ | 379,802 | |||||
Less: recurring capitalized expenditures (b) | (22,299 | ) | (20,242 | ) | (55,906 | ) | (51,063 | ) | |||||
Adjusted funds from operations | $ | 104,312 | $ | 110,262 | $ | 317,391 | $ | 328,739 | |||||
PER SHARE DATA | |||||||||||||
Funds from operations - diluted | $ | 1.25 | $ | 1.29 | $ | 3.69 | $ | 3.79 | |||||
Adjusted funds from operations - diluted | 1.03 | 1.09 | 3.14 | 3.28 | |||||||||
Distributions declared per common share | 0.83 | 0.80 | 2.49 | 2.40 | |||||||||
Weighted average number of common shares outstanding: | |||||||||||||
FFO/AFFO - diluted | 101,203 | 100,819 | 101,162 | 100,129 | |||||||||
PROPERTY DATA | |||||||||||||
Total operating properties (end of period) (c) | 165 | 165 | 165 | 165 | |||||||||
Total operating apartment homes in operating properties (end of period) (c) | 56,383 | 56,271 | 56,383 | 56,271 | |||||||||
Total operating apartment homes (weighted average) | 49,158 | 48,801 | 49,081 | 48,441 | |||||||||
(a) | Net income attributable to common shareholders includes the approximate $0.4 million and $14.8 million COVID-19 Related Impact for the three and nine months ended September 30, 2020, respectively. 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) | ||||||||||||||||||||
Sep 30,
| Jun 30,
| Mar 31,
| Dec 31,
| Sep 30,
| ||||||||||||||||
ASSETS | ||||||||||||||||||||
Real estate assets, at cost | ||||||||||||||||||||
Land | $ | 1,216,942 | $ | 1,206,656 | $ | 1,206,130 | $ | 1,199,384 | $ | 1,158,342 | ||||||||||
Buildings and improvements | 7,677,676 | 7,597,165 | 7,547,150 | 7,404,090 | 7,242,256 | |||||||||||||||
8,894,618 | 8,803,821 | 8,753,280 | 8,603,474 | 8,400,598 | ||||||||||||||||
Accumulated depreciation | (2,944,769 | ) | (2,857,124 | ) | (2,770,848 | ) | (2,686,025 | ) | (2,638,693 | ) | ||||||||||
Net operating real estate assets | 5,949,849 | 5,946,697 | 5,982,432 | 5,917,449 | 5,761,905 | |||||||||||||||
Properties under development, including land | 522,664 | 514,336 | 467,288 | 512,319 | 440,917 | |||||||||||||||
Investments in joint ventures | 20,992 | 21,735 | 22,318 | 20,688 | 21,715 | |||||||||||||||
Total real estate assets | 6,493,505 | 6,482,768 | 6,472,038 | 6,450,456 | 6,224,537 | |||||||||||||||
Accounts receivable – affiliates | 20,152 | 21,432 | 20,344 | 21,833 | 23,170 | |||||||||||||||
Other assets, net (a) | 217,534 | 211,823 | 196,544 | 248,716 | 238,014 | |||||||||||||||
Cash and cash equivalents | 589,614 | 601,584 | 22,277 | 23,184 | 157,239 | |||||||||||||||
Restricted cash | 3,918 | 4,093 | 4,367 | 4,315 | 5,686 | |||||||||||||||
Total assets | $ | 7,324,723 | $ | 7,321,700 | $ | 6,715,570 | $ | 6,748,504 | $ | 6,648,646 | ||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Notes payable | ||||||||||||||||||||
Unsecured | $ | 3,225,799 | $ | 3,224,871 | $ | 2,606,876 | $ | 2,524,099 | $ | 2,432,137 | ||||||||||
Secured | — | — | — | — | 45,250 | |||||||||||||||
Accounts payable and accrued expenses | 183,654 | 167,453 | 156,841 | 171,719 | 170,689 | |||||||||||||||
Accrued real estate taxes | 87,159 | 62,499 | 32,365 | 54,408 | 74,658 | |||||||||||||||
Distributions payable | 84,137 | 84,138 | 84,112 | 80,973 | 80,764 | |||||||||||||||
Other liabilities (b) | 177,967 | 172,172 | 164,052 | 215,581 | 187,367 | |||||||||||||||
Total liabilities | 3,758,716 | 3,711,133 | 3,044,246 | 3,046,780 | 2,990,865 | |||||||||||||||
Equity | ||||||||||||||||||||
Common shares of beneficial interest | 1,068 | 1,068 | 1,069 | 1,069 | 1,065 | |||||||||||||||
Additional paid-in capital | 4,577,813 | 4,574,387 | 4,569,995 | 4,566,731 | 4,538,422 | |||||||||||||||
Distributions in excess of net income attributable to common shareholders | (737,556 | ) | (689,809 | ) | (623,570 | ) | (584,167 | ) | (599,615 | ) | ||||||||||
Treasury shares, at cost | (341,831 | ) | (341,637 | ) | (342,778 | ) | (348,419 | ) | (348,556 | ) | ||||||||||
Accumulated other comprehensive income (loss) (c) | (5,431 | ) | (5,797 | ) | (6,163 | ) | (6,529 | ) | (6,438 | ) | ||||||||||
Total common equity | 3,494,063 | 3,538,212 | 3,598,553 | 3,628,685 | 3,584,878 | |||||||||||||||
Non-controlling interests | 71,944 | 72,355 | 72,771 | 73,039 | 72,903 | |||||||||||||||
Total equity | 3,566,007 | 3,610,567 | 3,671,324 | 3,701,724 | 3,657,781 | |||||||||||||||
Total liabilities and equity | $ | 7,324,723 | $ | 7,321,700 | $ | 6,715,570 | $ | 6,748,504 | $ | 6,648,646 | ||||||||||
(a) Includes net deferred charges of: | $ | 2,686 | $ | 3,031 | $ | 3,399 | $ | 3,658 | $ | 4,358 | ||||||||||
(b) Includes deferred revenues of: | $ | 314 | $ | 344 | $ | 375 | $ | 408 | $ | 497 | ||||||||||
(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 September 30, | Nine Months Ended September 30, | ||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||
Net income attributable to common shareholders (a) | $ | 34,957 | $ | 43,597 | $ | 94,718 | $ | 124,609 | |||||
Real estate depreciation and amortization | 87,974 | 83,437 | 267,985 | 244,908 | |||||||||
Adjustments for unconsolidated joint ventures | 2,404 | 2,245 | 6,933 | 6,736 | |||||||||
Income allocated to non-controlling interests | 1,276 | 1,225 | 3,661 | 3,549 | |||||||||
Funds from operations | $ | 126,611 | $ | 130,504 | $ | 373,297 | $ | 379,802 | |||||
Less: recurring capitalized expenditures | (22,299 | ) | (20,242 | ) | (55,906 | ) | (51,063 | ) | |||||
Adjusted funds from operations | $ | 104,312 | $ | 110,262 | $ | 317,391 | $ | 328,739 | |||||
Weighted average number of common shares outstanding: | |||||||||||||
EPS diluted | 99,455 | 99,066 | 99,414 | 98,375 | |||||||||
FFO/AFFO diluted | 101,203 | 100,819 | 101,162 | 100,129 | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||
Total Earnings Per Common Share - Diluted | $ | 0.35 | $ | 0.44 | $ | 0.95 | $ | 1.26 | |||||
Real estate depreciation and amortization | 0.87 | 0.83 | 2.65 | 2.45 | |||||||||
Adjustments for unconsolidated joint ventures | 0.02 | 0.01 | 0.06 | 0.05 | |||||||||
Income allocated to non-controlling interests | 0.01 | 0.01 | 0.03 | 0.03 | |||||||||
FFO per common share - Diluted | $ | 1.25 | $ | 1.29 | $ | 3.69 | $ | 3.79 | |||||
Less: recurring capitalized expenditures | (0.22 | ) | (0.20 | ) | (0.55 | ) | (0.51 | ) | |||||
AFFO per common share - Diluted | $ | 1.03 | $ | 1.09 | $ | 3.14 | $ | 3.28 | |||||
(a) | Net income attributable to common shareholders includes an approximate $0.4 million and $14.8 million COVID-19 Related Impact for the three and nine months ended September 30, 2020, respectively. The total COVID-19 Related Impact for the nine months ended September 30, 2020 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 $4.5 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 $1.7 million in other directly-related COVID-19 expenses for the nine months ended September 30, 2020. We also incurred approximately $0.8 million related to the Employee Relief Fund we established to help our employees impacted by COVID-19 for the nine months ended September 30, 2020. |
CAMDEN | NON-GAAP FINANCIAL MEASURES | |
DEFINITIONS & RECONCILIATIONS | ||
(In thousands, except per share amounts) | ||
(Unaudited) | ||
4Q20 Range | 2020 Range | ||||||||||||
Low | High | Low | High | ||||||||||
Expected earnings per common share - diluted | $ | 0.30 | $ | 0.36 | $ | 1.25 | $ | 1.31 | |||||
Expected real estate depreciation and amortization | 0.88 | 0.88 | 3.53 | 3.53 | |||||||||
Expected adjustments for unconsolidated joint ventures | 0.02 | 0.02 | 0.08 | 0.08 | |||||||||
Expected income allocated to non-controlling interests | 0.01 | 0.01 | 0.04 | 0.04 | |||||||||
Expected FFO per share - diluted | $ | 1.21 | $ | 1.27 | $ | 4.90 | $ | 4.96 | |||||
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 September 30, | Nine months ended September 30, | ||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||
Net income (a) | $ | 36,220 | $ | 44,782 | $ | 98,198 | $ | 128,045 | |||||||||
Less: Fee and asset management income | (2,542 | ) | (2,139 | ) | (7,449 | ) | (5,849 | ) | |||||||||
Less: Interest and other income | (1,948 | ) | (1,485 | ) | (2,602 | ) | (2,114 | ) | |||||||||
Less: (Income)/Loss on deferred compensation plans | (5,071 | ) | (780 | ) | (1,646 | ) | (14,992 | ) | |||||||||
Plus: Property management expense | 5,894 | 6,154 | 18,360 | 18,904 | |||||||||||||
Plus: Fee and asset management expense | 1,018 | 1,316 | 2,681 | 4,022 | |||||||||||||
Plus: General and administrative expense | 12,726 | 13,458 | 40,350 | 40,027 | |||||||||||||
Plus: Interest expense | 24,265 | 20,719 | 67,454 | 60,538 | |||||||||||||
Plus: Depreciation and amortization expense | 90,575 | 85,814 | 275,237 | 250,734 | |||||||||||||
Plus: Expense on deferred compensation plans | 5,071 | 780 | 1,646 | 14,992 | |||||||||||||
Less: Gain on sale of land | — | — | (382 | ) | — | ||||||||||||
Less: Equity in income of joint ventures | (2,154 | ) | (2,133 | ) | (5,909 | ) | (5,954 | ) | |||||||||
Plus: Income tax expense | 615 | 313 | 1,476 | 709 | |||||||||||||
NOI (b) (c) | $ | 164,669 | $ | 166,799 | $ | 487,414 | $ | 489,062 | |||||||||
"Same Property" Communities | $ | 144,737 | $ | 146,686 | $ | 437,678 | $ | 433,237 | |||||||||
Non-"Same Property" Communities | 20,072 | 17,413 | 61,279 | 47,588 | |||||||||||||
Development and Lease-Up Communities | (354 | ) | (11 | ) | (739 | ) | (13 | ) | |||||||||
COVID-19 Related Impact (b) (c) | (444 | ) | — | (13,614 | ) | — | |||||||||||
Dispositions/Other | 658 | 2,711 | 2,810 | 8,250 | |||||||||||||
NOI (b) (c) | $ | 164,669 | $ | 166,799 | $ | 487,414 | $ | 489,062 | |||||||||
(a) | Net income attributable to common shareholders includes the approximate $0.4 million and $14.8 million COVID-19 Related Impact for the three and nine months ended September 30, 2020, respectively. 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 $0.4 million of COVID-19 expenses at our operating communities for the three months ended September 30, 2020 and $4.5 million for the nine months ending September 30, 2020, which included $2.8 million of bonuses paid to on-site employees who provided essential services during the pandemic and $1.7 million in other directly-related COVID-19 expenses. |
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, loss on early retirement of debt, income (loss) allocated to non-controlling interests, as well as direct COVID-19 Related Impact. The Company considers Adjusted EBITDA to be an appropriate supplemental measure of operating performance to net income attributable to common shareholders because it represents income before non-cash depreciation and the cost of debt, and excludes gains or losses from property dispositions. Annualized Adjusted EBITDA is Adjusted EBITDA as reported for the period multiplied by 4 for quarter results or 1.33 for 9 month results. A reconciliation of net income attributable to common shareholders to Adjusted EBITDA is provided below:
Three months ended September 30, | Nine months ended September 30, | ||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||
Net income attributable to common shareholders (a) | $ | 34,957 | $ | 43,597 | $ | 94,718 | $ | 124,609 | |||||
Plus: Interest expense | 24,265 | 20,719 | 67,454 | 60,538 | |||||||||
Plus: Depreciation and amortization expense | 90,575 | 85,814 | 275,237 | 250,734 | |||||||||
Plus: Income allocated to non-controlling interests | 1,263 | 1,185 | 3,480 | 3,436 | |||||||||
Plus: Income tax expense | 615 | 313 | 1,476 | 709 | |||||||||
Plus: COVID-19 Related Impact (b) | 444 | — | 14,364 | — | |||||||||
Less: Gain on sale of land | — | — | (382 | ) | — | ||||||||
Less: Equity in income of joint ventures | (2,154 | ) | (2,133 | ) | (5,909 | ) | (5,954 | ) | |||||
Adjusted EBITDA | $ | 149,965 | $ | 149,495 | $ | 450,438 | $ | 434,072 | |||||
Annualized Adjusted EBITDA | $ | 599,860 | $ | 597,980 | $ | 600,584 | $ | 578,763 | |||||
(a) | Net income attributable to common shareholders includes the approximate $0.4 million and $14.8 million COVID-19 Related Impact for the three and nine months ended September 30, 2020, respectively. Please refer to page 28 of the supplement, footnote (a), for additional detail on the breakdown of the COVID-19 Related Impact. |
(b) | Approximately $0.4 million and $14.4 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 for the three and nine months ended September 30, 2020, respectively. |
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 September 30, | the nine months ended September 30, | ||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||
Unsecured notes payable | $ | 3,225,490 | $ | 2,431,858 | $ | 3,028,011 | $ | 2,278,843 | |||||||||||
Secured notes payable | — | 45,322 | — | 120,933 | |||||||||||||||
Total debt | 3,225,490 | 2,477,180 | 3,028,011 | 2,399,776 | |||||||||||||||
Less: Cash and cash equivalents | (536,520 | ) | (124,936 | ) | (367,113 | ) | (117,855 | ) | |||||||||||
Net debt | $ | 2,688,970 | $ | 2,352,244 | $ | 2,660,898 | $ | 2,281,921 | |||||||||||
Net Debt to Annualized Adjusted EBITDA:
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||
Net debt | $ | 2,688,970 | $ | 2,352,244 | $ | 2,660,898 | $ | 2,281,921 | ||||||||||
Annualized Adjusted EBITDA | 599,860 | 597,980 | 600,584 | 578,763 | ||||||||||||||
Net Debt to Annualized Adjusted EBITDA | 4.5 | x | 3.9 | x | 4.4 | x | 3.9 | x | ||||||||||
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