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CAMDEN PROPERTY TRUST ANNOUNCES THIRD QUARTER 2018 OPERATING RESULTS
Houston, Texas (October 25, 2018) - Camden Property Trust (NYSE:CPT) announced today operating results for the three and nine months ended September 30, 2018. 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, 2018 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 | 2018 | 2017 | 2018 | 2017 |
EPS | $0.40 | $0.38 | $1.22 | $1.20 |
FFO | $1.20 | $1.11 | $3.54 | $3.35 |
AFFO | $1.00 | $0.92 | $3.04 | $2.87 |
Quarterly Growth | Sequential Growth | Year-to-Date Growth | |
Same Property Results | 3Q18 vs. 3Q17 | 3Q18 vs. 2Q18 | 2018 vs. 2017 |
Revenues | 3.1% | 1.1% | 3.2% |
Expenses | 1.9% | 2.7% | 2.4% |
Net Operating Income ("NOI") | 3.8% | 0.2% | 3.6% |
Same Property Results | 3Q18 | 3Q17 | 2Q18 | |||
Occupancy | 95.9 | % | 95.9 | % | 95.8 | % |
“We are pleased to report another strong quarter of performance, with property NOI growth and FFO per share both slightly better than anticipated,” said Richard J. Campo, Camden’s Chairman and CEO. “As a result, we have increased the midpoint of our 2018 FFO guidance from $4.74 to $4.76 per share, and raised the midpoint of expected same property NOI growth from 3.0% to 3.2%.”
The Company defines same property communities as communities owned and stabilized since January 1, 2017, excluding communities under redevelopment and properties held for sale. A reconciliation of net income to NOI and same property NOI is included in the financial tables accompanying this press release.
Development Activity
During the quarter, construction commenced at Camden Buckhead in Atlanta, GA. Subsequent to quarter-end, lease-up was completed at Camden NoMa II in Washington, DC.
Development Communities - Construction Completed and Projects in Lease-Up ($ in millions)
Total | Total | % Leased | ||||
Community Name | Location | Units | Cost | as of 10/23/2018 | ||
Camden NoMa II | Washington, DC | 405 | $108.4 | 94 | % | |
Camden Shady Grove | Rockville, MD | 457 | 113.9 | 85 | % | |
Total | 862 | $222.3 | ||||
1
Development Communities - Construction Ongoing ($ in millions)
Total | Total | % Leased | |||
Community Name | Location | Units | Budget | as of 10/23/2018 | |
Camden Washingtonian | Gaithersburg, MD | 365 | $90.0 | 58 | % |
Camden McGowen Station | Houston, TX | 315 | 90.0 | 50 | % |
Camden North End I | Phoenix, AZ | 441 | 105.0 | 44 | % |
Camden Grandview II | Charlotte, NC | 28 | 21.0 | ||
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 | ||
Total | 2,378 | $793.0 | |||
Acquisition/Disposition Activity
During the quarter, the Company acquired Camden Thornton Park, a 299-home apartment community in Orlando, FL, for approximately $89.8 million. Camden also sold approximately 14.1 acres of land adjacent to two development communities in Phoenix, AZ for approximately $11.5 million. The Company does not expect to complete any additional acquisitions or dispositions during the fourth quarter of 2018.
Capital Markets Transactions
In October 2018, Camden retired $175.0 million of 2.86% variable rate secured conventional mortgage notes and $205.0 million of 5.77% secured conventional mortgage notes.
In October 2018, the Company issued $400 million senior unsecured notes under its existing shelf registration statement. These ten-year notes were offered to the public at 99.893% of par value with a coupon of 4.100%. After giving effect to the settlement of in-place swap agreements and deducting the underwriting discounts and other estimated expenses of the offering, the effective annual interest rate on the notes is approximately 3.74%. The Company received net proceeds of approximately $396.1 million, net of underwriting discounts and other estimated offering expenses.
In September 2018, Camden entered into a $100.0 million three-year unsecured floating-rate term loan which was funded in October 2018. The interest rate on the term loan is based on LIBOR plus a margin which is subject to change as our credit ratings change. The current margin is 0.85%.
Earnings Guidance
Camden updated its earnings guidance for 2018 based on its current and expected views of the apartment market and general economic conditions, and provided guidance for fourth quarter 2018 as detailed below.
4Q18 | 2018 | 2018 Midpoint | |||
Per Diluted Share | Range | Range | Current | Prior | Change |
EPS | $0.40 - $0.44 | $1.62 - $1.66 | $1.64 | $1.61 | $0.03 |
FFO | $1.20 - $1.24 | $4.74 - $4.78 | $4.76 | $4.74 | $0.02 |
2018 | 2018 Midpoint | |||
Same Property Growth | Range | Current | Prior | Change |
Revenues | 3.05% - 3.25% | 3.15% | 3.15% | 0.00% |
Expenses | 2.95% - 3.15% | 3.05% | 3.50% | (0.45)% |
NOI | 3.00% - 3.40% | 3.20% | 3.00% | 0.20% |
2
Camden intends to update its earnings guidance to the market on a quarterly basis. Additional information on the Company’s 2018 financial outlook and a reconciliation of expected EPS to expected FFO are included in the financial tables accompanying this press release.
Conference Call
Friday, October 26, 2018 at 10:00 AM CT
Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061
Passcode: 8427208
Webcast: http://services.choruscall.com/links/cpt181026.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 engaged in the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. Camden owns interests in and operates 159 properties containing 54,480 apartment homes across the United States. Upon completion of 8 properties currently under development, the Company’s portfolio will increase to 56,858 apartment homes in 167 properties. Camden was recently named by FORTUNE® Magazine for the eleventh consecutive year as one of the “100 Best Companies to Work For” in America, ranking #24.
For additional information, please contact Camden’s Investor Relations Department at (713) 354-2787 or access our website at camdenliving.com.
3
CAMDEN | OPERATING RESULTS | |
(In thousands, except per share amounts) | ||
(Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
OPERATING DATA | |||||||||||||
Property revenues | |||||||||||||
Rental revenues (a) | $212,984 | $194,690 | $625,123 | $573,262 | |||||||||
Other property revenues (a) | 28,786 | 33,488 | 84,463 | 97,807 | |||||||||
Total property revenues | 241,770 | 228,178 | 709,586 | 671,069 | |||||||||
Property expenses | |||||||||||||
Property operating and maintenance (b) | 56,973 | 60,090 | 165,624 | 164,188 | |||||||||
Real estate taxes | 30,860 | 28,193 | 91,235 | 83,916 | |||||||||
Total property expenses | 87,833 | 88,283 | 256,859 | 248,104 | |||||||||
Non-property income | |||||||||||||
Fee and asset management | 1,827 | 2,116 | 5,651 | 5,806 | |||||||||
Interest and other income | 385 | 385 | 1,669 | 1,579 | |||||||||
Income on deferred compensation plans | 3,539 | 3,648 | 3,769 | 11,706 | |||||||||
Total non-property income | 5,751 | 6,149 | 11,089 | 19,091 | |||||||||
Other expenses | |||||||||||||
Property management | 6,303 | 6,201 | 19,415 | 19,782 | |||||||||
Fee and asset management | 1,140 | 973 | 3,193 | 2,818 | |||||||||
General and administrative (c) | 12,618 | 12,266 | 37,113 | 37,585 | |||||||||
Interest | 21,235 | 21,210 | 62,216 | 66,132 | |||||||||
Depreciation and amortization | 76,476 | 67,014 | 222,269 | 195,781 | |||||||||
Expense on deferred compensation plans | 3,539 | 3,648 | 3,769 | 11,706 | |||||||||
Total other expenses | 121,311 | 111,312 | 347,975 | 333,804 | |||||||||
Loss on early retirement of debt | — | — | — | (323 | ) | ||||||||
Equity in income of joint ventures (d) | 1,943 | 1,255 | 5,644 | 4,857 | |||||||||
Income from continuing operations before income taxes | 40,320 | 35,987 | 121,485 | 112,786 | |||||||||
Income tax expense | (330 | ) | (512 | ) | (1,098 | ) | (1,008 | ) | |||||
Net income | 39,990 | 35,475 | 120,387 | 111,778 | |||||||||
Less income allocated to non-controlling interests from continuing operations | (1,124 | ) | (1,091 | ) | (3,455 | ) | (3,345 | ) | |||||
Net income attributable to common shareholders | $38,866 | $34,384 | $116,932 | $108,433 | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||
Net income | $39,990 | $35,475 | $120,387 | $111,778 | |||||||||
Other comprehensive income | |||||||||||||
Unrealized gain on cash flow hedging activities | 5,202 | 1,754 | 13,984 | 1,754 | |||||||||
Reclassification of net loss on cash flow hedging activities, prior service cost and net loss on post retirement obligation | 35 | 34 | 104 | 102 | |||||||||
Comprehensive income | 45,227 | 37,263 | 134,475 | 113,634 | |||||||||
Less income allocated to noncontrolling interests from continuing operations | (1,124 | ) | (1,091 | ) | (3,455 | ) | (3,345 | ) | |||||
Comprehensive income attributable to common shareholders | $44,103 | $36,172 | $131,020 | $110,289 | |||||||||
PER SHARE DATA | |||||||||||||
Total earnings per common share - basic | $0.41 | $0.38 | $1.22 | $1.20 | |||||||||
Total earnings per common share - diluted | 0.40 | 0.38 | 1.22 | 1.20 | |||||||||
Weighted average number of common shares outstanding: | |||||||||||||
Basic | 95,257 | 91,011 | 95,190 | 90,351 | |||||||||
Diluted | 95,417 | 92,033 | 95,333 | 91,345 | |||||||||
(a) Upon our adoption of ASU 2014-09 on January 1, 2018, we are now presenting certain revenue items, historically included as a component of other property revenues, as rental revenues due to the nature and timing of revenue recognition for these items being more closely aligned to a lease. This new presentation has been applied prospectively as this reclassification will not have an impact upon total property revenues or the opening balance of retained earnings. Approximately $5.5 million and $16.9 million of rental revenue is related to this presentation for the three and nine months ended September 30, 2018, respectively. Had ASU 2014-09 been effective as of January 1, 2017, we would have reclassified approximately $5.7 million and $16.7 million from other property revenues to rental revenue for the three and nine months ended September 30, 2017, respectively.
(b) Includes approximately $3.9 million in storm-related expenses related to Hurricanes Harvey and Irma for both the three and nine months ended September 30, 2017.
(c) Includes approximately $0.7 million in storm-related expenses related to Hurricanes Harvey and Irma for both the three and nine months ended September 30, 2017.
(d) Includes approximately $0.4 million in storm-related expenses related to Hurricanes Harvey and Irma for both the three and nine months ended September 30, 2017.
Note: Please refer to the following pages for definitions and reconciliations of all non-GAAP financial measures presented in this document.
4
CAMDEN | FUNDS FROM OPERATIONS | |
(In thousands, except per share and property data amounts) | ||
(Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
FUNDS FROM OPERATIONS | |||||||||||||
Net income attributable to common shareholders (a) | $38,866 | $34,384 | $116,932 | $108,433 | |||||||||
Real estate depreciation and amortization | 74,841 | 65,489 | 217,416 | 191,092 | |||||||||
Adjustments for unconsolidated joint ventures | 2,239 | 2,223 | 6,743 | 6,650 | |||||||||
Income allocated to non-controlling interests | 1,124 | 1,091 | 3,455 | 3,345 | |||||||||
Funds from operations | $117,070 | $103,187 | $344,546 | $309,520 | |||||||||
Less: recurring capitalized expenditures (b) | (19,849 | ) | (17,506 | ) | (49,038 | ) | (43,975 | ) | |||||
Adjusted funds from operations - diluted | $97,221 | $85,681 | $295,508 | $265,545 | |||||||||
PER SHARE DATA | |||||||||||||
Funds from operations - diluted | $1.20 | $1.11 | $3.54 | $3.35 | |||||||||
Adjusted funds from operations - diluted | 1.00 | 0.92 | 3.04 | 2.87 | |||||||||
Distributions declared per common share | 0.77 | 0.75 | 2.31 | 2.25 | |||||||||
Weighted average number of common shares outstanding: | |||||||||||||
FFO/AFFO - diluted | 97,238 | 93,111 | 97,194 | 92,424 | |||||||||
PROPERTY DATA | |||||||||||||
Total operating properties (end of period) (c) | 159 | 156 | 159 | 156 | |||||||||
Total operating apartment homes in operating properties (end of period) (c) | 54,480 | 54,038 | 54,480 | 54,038 | |||||||||
Total operating apartment homes (weighted average) | 47,010 | 46,546 | 46,682 | 46,103 | |||||||||
(a) Net income attributable to common shareholders for the three and nine months ended September 30, 2017 included approximately $5.0 million of storm-related expenses related to Hurricanes Harvey and Irma.
(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.
5
CAMDEN | BALANCE SHEETS | |
(In thousands) | ||
(Unaudited)
Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | |||||||||||
ASSETS | |||||||||||||||
Real estate assets, at cost | |||||||||||||||
Land | $1,088,293 | $1,066,077 | $1,053,578 | $1,021,031 | $1,016,097 | ||||||||||
Buildings and improvements | 6,828,068 | 6,620,169 | 6,494,229 | 6,269,481 | 6,269,561 | ||||||||||
7,916,361 | 7,686,246 | 7,547,807 | 7,290,512 | 7,285,658 | |||||||||||
Accumulated depreciation | (2,328,092 | ) | (2,255,737 | ) | (2,185,452 | ) | (2,118,839 | ) | (2,080,989 | ) | |||||
Net operating real estate assets | 5,588,269 | 5,430,509 | 5,362,355 | 5,171,673 | 5,204,669 | ||||||||||
Properties under development, including land | 315,904 | 373,350 | 399,903 | 377,231 | 363,481 | ||||||||||
Investments in joint ventures | 24,664 | 26,205 | 26,863 | 27,237 | 28,420 | ||||||||||
Total real estate assets | 5,928,837 | 5,830,064 | 5,789,121 | 5,576,141 | 5,596,570 | ||||||||||
Accounts receivable – affiliates | 22,605 | 23,473 | 23,397 | 24,038 | 23,620 | ||||||||||
Other assets, net (a)(b) | 228,468 | 204,717 | 199,420 | 195,764 | 189,253 | ||||||||||
Cash and cash equivalents | 8,529 | 64,071 | 101,401 | 368,492 | 350,274 | ||||||||||
Restricted cash | 10,061 | 9,581 | 15,036 | 9,313 | 9,178 | ||||||||||
Total assets | $6,198,500 | $6,131,906 | $6,128,375 | $6,173,748 | $6,168,895 | ||||||||||
LIABILITIES AND EQUITY | |||||||||||||||
Liabilities | |||||||||||||||
Notes payable | |||||||||||||||
Unsecured | $1,394,178 | $1,339,659 | $1,339,142 | $1,338,628 | $1,338,117 | ||||||||||
Secured | 865,431 | 865,629 | 865,798 | 865,970 | 866,134 | ||||||||||
Accounts payable and accrued expenses | 140,046 | 127,777 | 123,706 | 128,313 | 127,557 | ||||||||||
Accrued real estate taxes | 70,174 | 52,461 | 29,061 | 51,383 | 70,027 | ||||||||||
Distributions payable | 74,976 | 75,071 | 75,083 | 72,943 | 72,962 | ||||||||||
Other liabilities (b)(c) | 178,898 | 156,767 | 157,002 | 154,567 | 154,506 | ||||||||||
Total liabilities | 2,723,703 | 2,617,364 | 2,589,792 | 2,611,804 | 2,629,303 | ||||||||||
Commitments and contingencies | |||||||||||||||
Non-qualified deferred compensation share awards | 60,874 | 85,938 | 76,174 | 77,230 | 73,015 | ||||||||||
Equity | |||||||||||||||
Common shares of beneficial interest | 1,030 | 1,027 | 1,026 | 1,028 | 1,028 | ||||||||||
Additional paid-in capital | 4,147,278 | 4,132,404 | 4,132,056 | 4,137,161 | 4,134,206 | ||||||||||
Distributions in excess of net income attributable to common shareholders | (466,512 | ) | (436,575 | ) | (396,596 | ) | (368,703 | ) | (383,584 | ) | |||||
Treasury shares, at cost | (355,825 | ) | (355,752 | ) | (356,687 | ) | (364,066 | ) | (364,736 | ) | |||||
Accumulated other comprehensive income (loss) (d) | 14,031 | 8,794 | 3,579 | (57 | ) | (7 | ) | ||||||||
Total common equity | 3,340,002 | 3,349,898 | 3,383,378 | 3,405,363 | 3,386,907 | ||||||||||
Non-controlling interests | 73,921 | 78,706 | 79,031 | 79,351 | 79,670 | ||||||||||
Total equity | 3,413,923 | 3,428,604 | 3,462,409 | 3,484,714 | 3,466,577 | ||||||||||
Total liabilities and equity | $6,198,500 | $6,131,906 | $6,128,375 | $6,173,748 | $6,168,895 | ||||||||||
(a) Includes net deferred charges of: | $538 | $724 | $929 | $1,125 | $1,312 | ||||||||||
(b) Includes net asset fair value of derivative instruments: | $15,674 | $10,472 | $5,291 | $1,690 | $1,754 | ||||||||||
(c) Includes deferred revenues of: | $603 | $659 | $536 | $426 | $1,463 | ||||||||||
(d) Represents the unrealized net loss and unamortized prior service costs on post retirement obligations, and unrealized net gain on cash flow hedging activities. | |||||||||||||||
6
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 gains (or losses) associated with the sale of previously depreciated operating properties, real estate depreciation and amortization, impairments of depreciable assets, and adjustments for unconsolidated joint ventures. 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 operating properties, 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, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
Net income attributable to common shareholders | $38,866 | $34,384 | $116,932 | $108,433 | |||||||||
Real estate depreciation and amortization | 74,841 | 65,489 | 217,416 | 191,092 | |||||||||
Adjustments for unconsolidated joint ventures | 2,239 | 2,223 | 6,743 | 6,650 | |||||||||
Income allocated to non-controlling interests | 1,124 | 1,091 | 3,455 | 3,345 | |||||||||
Funds from operations | $117,070 | $103,187 | $344,546 | $309,520 | |||||||||
Less: recurring capitalized expenditures | (19,849 | ) | (17,506 | ) | (49,038 | ) | (43,975 | ) | |||||
Adjusted funds from operations | $97,221 | $85,681 | $295,508 | $265,545 | |||||||||
Weighted average number of common shares outstanding: | |||||||||||||
EPS diluted | 95,417 | 92,033 | 95,333 | 91,345 | |||||||||
FFO/AFFO diluted | 97,238 | 93,111 | 97,194 | 92,424 | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
Total Earnings Per Common Share - Diluted | $0.40 | $0.38 | $1.22 | $1.20 | |||||||||
Real estate depreciation and amortization | 0.77 | 0.70 | 2.23 | 2.07 | |||||||||
Adjustments for unconsolidated joint ventures | 0.02 | 0.02 | 0.07 | 0.07 | |||||||||
Income allocated to non-controlling interests | 0.01 | 0.01 | 0.02 | 0.01 | |||||||||
FFO per common share - Diluted | $1.20 | $1.11 | $3.54 | $3.35 | |||||||||
Less: recurring capitalized expenditures | (0.20 | ) | (0.19 | ) | (0.50 | ) | (0.48 | ) | |||||
AFFO per common share - Diluted | $1.00 | $0.92 | $3.04 | $2.87 | |||||||||
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:
4Q18 | Range | 2018 | Range | ||||||||||
Low | High | Low | High | ||||||||||
Expected earnings per common share - diluted | $0.40 | $0.44 | $1.62 | $1.66 | |||||||||
Expected real estate depreciation and amortization | 0.77 | 0.77 | 3.00 | 3.00 | |||||||||
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 | 0.03 | 0.03 | |||||||||
Expected FFO per share - diluted | $1.20 | $1.24 | $4.74 | $4.78 | |||||||||
7
Note: This table contains forward-looking statements. Please see the paragraph regarding forward-looking statements earlier in this document.
CAMDEN | NON-GAAP FINANCIAL MEASURES | |
DEFINITIONS & RECONCILIATIONS | ||
(In thousands, except per share amounts) | ||
(Unaudited)
Net Operating Income (NOI)
NOI is defined by the Company as total property income less property operating and maintenance expenses less real estate taxes. NOI is further detailed in the Components of Property NOI schedules on page 11. 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, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
Net income | $39,990 | $35,475 | $120,387 | $111,778 | |||||||||
Less: Fee and asset management income | (1,827 | ) | (2,116 | ) | (5,651 | ) | (5,806 | ) | |||||
Less: Interest and other income | (385 | ) | (385 | ) | (1,669 | ) | (1,579 | ) | |||||
Less: Income on deferred compensation plans | (3,539 | ) | (3,648 | ) | (3,769 | ) | (11,706 | ) | |||||
Plus: Property management expense | 6,303 | 6,201 | 19,415 | 19,782 | |||||||||
Plus: Fee and asset management expense | 1,140 | 973 | 3,193 | 2,818 | |||||||||
Plus: General and administrative expense | 12,618 | 12,266 | 37,113 | 37,585 | |||||||||
Plus: Interest expense | 21,235 | 21,210 | 62,216 | 66,132 | |||||||||
Plus: Depreciation and amortization expense | 76,476 | 67,014 | 222,269 | 195,781 | |||||||||
Plus: Expense on deferred compensation plans | 3,539 | 3,648 | 3,769 | 11,706 | |||||||||
Plus: Loss on early retirement of debt | — | — | — | 323 | |||||||||
Less: Equity in income of joint ventures | (1,943 | ) | (1,255 | ) | (5,644 | ) | (4,857 | ) | |||||
Plus: Income tax expense | 330 | 512 | 1,098 | 1,008 | |||||||||
NOI | $153,937 | $139,895 | $452,727 | $422,965 | |||||||||
"Same Property" Communities | $131,943 | $127,153 | $392,276 | $378,537 | |||||||||
Non-"Same Property" Communities | 16,400 | 13,136 | 47,209 | 36,947 | |||||||||
Development and Lease-Up Communities | 4,072 | 1,406 | 8,978 | 1,837 | |||||||||
Hurricane Expenses | — | (3,944 | ) | — | (3,944 | ) | |||||||
Dispositions/Other | 1,522 | 2,144 | 4,264 | 9,588 | |||||||||
NOI | $153,937 | $139,895 | $452,727 | $422,965 | |||||||||
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. 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, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
Net income attributable to common shareholders | $38,866 | $34,384 | $116,932 | $108,433 | |||||||||
Plus: Interest expense | 21,235 | 21,210 | 62,216 | 66,132 | |||||||||
Plus: Depreciation and amortization expense | 76,476 | 67,014 | 222,269 | 195,781 | |||||||||
Plus: Income allocated to non-controlling interests from continuing operations | 1,124 | 1,091 | 3,455 | 3,345 | |||||||||
Plus: Income tax expense | 330 | 512 | 1,098 | 1,008 | |||||||||
Plus: Loss on early retirement of debt | — | — | — | 323 | |||||||||
Less: Equity in income of joint ventures | (1,943 | ) | (1,255 | ) | (5,644 | ) | (4,857 | ) | |||||
Adjusted EBITDA | $136,088 | $122,956 | $400,326 | $370,165 | |||||||||
8
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Ticker: CPT
CIK: 906345
Form Type: 8-K Corporate News
Accession Number: 0000906345-18-000042
Submitted to the SEC: Thu Oct 25 2018 4:20:09 PM EST
Accepted by the SEC: Thu Oct 25 2018
Period: Thursday, October 25, 2018
Industry: Real Estate Investment Trusts
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