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Camden Property Trust Announces 2021 Operating Results, 2022 Financial Outlook, and First Quarter 2022 Dividend

Camden Property Trust (NYSE:CPT) (the "Company") announced today operating results for the three and twelve months ended December 31, 2021. 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, 2021 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

2021

2020

2021

2020

EPS

$2.02

$0.29

$2.96

$1.24

FFO

$1.51

$1.21

$5.39

$4.90

AFFO

$1.30

$1.00

$4.68

$4.13

 

Quarterly Growth

Sequential Growth

Year-To-Date Growth

Same Property Results*

4Q21 vs. 4Q20

4Q21 vs. 3Q21

2021 vs. 2020

Revenues

8.5%

2.5%

4.3%

Expenses

(2.3)%

(7.5)%

3.5%

Net Operating Income ("NOI")

14.9%

8.4%

4.8%

 

*Same property results exclude any Pandemic Related Impact.

Same Property Results

4Q21

4Q20

3Q21

Occupancy

97.1%

95.5%

97.3%

For 2021, the Company defines same property communities as communities owned and stabilized since January 1, 2020, 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.

Operating Statistics - Same Property Portfolio

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

January 2022*

January 2021

4Q21(2)

4Q20(2)

New Lease Rates

17.1%

(3.1)%

16.7%

(4.0)%

Renewal Rates

13.5%

3.0%

14.1%

2.9%

Blended Rates

15.2%

(0.2)%

15.5%

(0.9)%

 

 

 

 

 

New Leases

1,311

1,646

1,287

1,398

Renewals

1,472

1,546

1,163

1,145

Total Leases

2,783

3,192

2,450

2,543

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

January 2022*

January 2021

4Q21(4)

4Q20(4)

New Lease Rates

16.7%

(3.4)%

17.8%

(4.3)%

Renewal Rates

14.8%

2.9%

13.6%

2.5%

Blended Rates

15.7%

(1.0)%

15.7%

(1.3)%

 

 

 

 

 

New Leases

1,338

1,569

1,379

1,519

Renewals

1,300

973

1,295

1,163

Total Leases

2,638

2,542

2,674

2,682

 

*Data as of January 30, 2022

(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

January 2022*

January 2021

4Q21

4Q20

Occupancy

97.2%

95.7%

97.1%

95.5%

Annualized Gross Turnover

36%

47%

42%

47%

Annualized Net Turnover

32%

39%

38%

40%

 

*Data as of January 30, 2022

Development Activity

During the quarter, construction was completed at Camden Hillcrest in San Diego, CA and lease-up was completed at Camden North End II in Phoenix, AZ.

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

 

 

Total

Total

% Leased

Community Name

Location

Homes

Cost

as of 1/30/2022

Camden Lake Eola

Orlando, FL

360

$125.0

96%

Camden Hillcrest

San Diego, CA

132

89.3

41%

Total

 

492

$214.3

 

Development Communities - Construction Ongoing ($ in millions)

 

 

Total

Total

% Leased

Community Name

Location

Homes

Estimated Cost

as of 1/30/2022

Camden Buckhead

Atlanta, GA

366

$163.5

65%

Camden Atlantic

Plantation, FL

269

100.0

 

Camden Tempe II

Tempe, AZ

397

115.0

 

Camden NoDa

Charlotte, NC

387

105.0

 

Camden Durham

Durham, NC

354

120.0

 

Total

 

1,773

$603.5

 

Acquisition/Disposition Activity

During the quarter, the Company acquired Camden Greenville, a 558-home apartment community located in Dallas, TX for approximately $165.5 million. During the quarter, Camden also acquired a 5.2-acre land parcel in Denver, CO and a 2.0-acre land parcel in Nashville, TN for approximately $60.6 million for future development purposes.

The Company disposed of three operating communities during the quarter for approximately $260.0 million. Two of the communities sold were located in Houston, TX and one in Laurel, MD and included 1,078 total apartment homes.

Equity Issuance

During the quarter, the Company issued approximately 1.1 million common shares through its at-the-market (“ATM”) share offering program at an average price of $167.56 per share, for total net consideration of approximately $179.7 million.

Liquidity Analysis

As of December 31, 2021, Camden had approximately $1.5 billion of liquidity comprised of approximately $613.4 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 3Q22, and at quarter-end had $199.4 million left to fund under its existing wholly-owned development pipeline. As of December 31, 2021, Camden had outstanding letters of credit totaling approximately $14.8 million, which reduced the availability under its unsecured credit facility to $885.2 million.

Earnings Guidance

Camden provided initial earnings guidance for 2022 based on its current and expected views of the apartment market and general economic conditions, and provided guidance for first quarter 2022 as detailed below.

 

1Q22

2022

Per Diluted Share

Range

Range

Midpoint

EPS

$0.38 - $0.42

$1.65 - $1.95

$1.80

FFO

$1.45 - $1.49

$6.09 - $6.39

$6.24

 

 

 

 

 

 

2022

Same Property Growth

 

Range

Midpoint

Revenues

 

7.75% - 9.75%

8.75%

Expenses

 

2.25% - 3.75%

3.00%

NOI

 

10.50% - 13.50%

12.00%

For 2022, the Company defines same property communities as communities owned and stabilized since January 1, 2021, 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 2022 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 2022 dividend of $0.94 per common share. The dividend is payable on April 18, 2022 to shareholders of record as of March 31, 2022. 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, February 4, 2022 at 10:00 AM CT

Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061

Passcode: 1838681

Webcast: https://services.choruscall.com/mediaframe/webcast.html?webcastid=aMGiqn3x

The Company strongly encourages interested parties to join the call via webcast in order to view any associated videos, slide presentations, etc. The dial-in phone line will be reserved for accredited analysts and investors who plan to pose questions to Management during the Q&A session of the call.

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 171 properties containing 58,300 apartment homes across the United States. Upon completion of 5 properties currently under development, the Company’s portfolio will increase to 60,073 apartment homes in 176 properties. Camden has been recognized as one of the 100 Best Companies to Work For® by FORTUNE magazine for 14 consecutive years, most recently ranking #8.

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,

 

2021

2020

 

2021

2020

OPERATING DATA

 

 

 

 

 

 

 

 

 

 

 

Property revenues (a)

$305,364

 

$261,554

 

 

$1,143,585

 

$1,043,837

 

 

 

 

 

 

 

Property expenses

 

 

 

 

 

Property operating and maintenance

67,343

 

62,402

 

 

267,703

 

252,190

 

Real estate taxes

35,711

 

37,555

 

 

149,322

 

142,636

 

Total property expenses

103,054

 

99,957

 

 

417,025

 

394,826

 

Non-property income

 

 

 

 

 

Fee and asset management

2,815

 

3,351

 

 

10,532

 

10,800

 

Interest and other income

191

 

347

 

 

1,223

 

2,949

 

Income on deferred compensation plans

5,186

 

10,399

 

 

14,369

 

12,045

 

Total non-property income

8,192

 

14,097

 

 

26,124

 

25,794

 

Other expenses

 

 

 

 

 

Property management

7,139

 

5,841

 

 

26,339

 

24,201

 

Fee and asset management

1,201

 

1,273

 

 

4,511

 

3,954

 

General and administrative

14,940

 

13,274

 

 

59,368

 

53,624

 

Interest

24,582

 

24,072

 

 

97,297

 

91,526

 

Depreciation and amortization

116,503

 

91,925

 

 

420,692

 

367,162

 

Expense on deferred compensation plans

5,186

 

10,399

 

 

14,369

 

12,045

 

Total other expenses

169,551

 

146,784

 

 

622,576

 

552,512

 

Loss on early retirement of debt

 

(176

)

 

 

(176

)

Gain on sale of operating properties, including land

174,384

 

 

 

174,384

 

382

 

Equity in income of joint ventures

3,125

 

2,143

 

 

9,777

 

8,052

 

Income from continuing operations before income taxes

218,460

 

30,877

 

 

314,269

 

130,551

 

Income tax expense

(601

)

(496

)

 

(1,893

)

(1,972

)

Net income

217,859

 

30,381

 

 

312,376

 

128,579

 

Less income allocated to non-controlling interests

(4,961

)

(1,188

)

 

(8,469

)

(4,668

)

Net income attributable to common shareholders (b)

$212,898

 

$29,193

 

 

$303,907

 

$123,911

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

Net income

$217,859

 

$30,381

 

 

$312,376

 

$128,579

 

Other comprehensive income

 

 

 

 

 

Unrealized gain (loss) and unamortized prior service cost on post retirement obligation

154

 

(318

)

 

154

 

(318

)

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

373

 

366

 

 

1,490

 

1,464

 

Comprehensive income

218,386

 

30,429

 

 

314,020

 

129,725

 

Less income allocated to non-controlling interests

(4,961

)

(1,188

)

 

(8,469

)

(4,668

)

Comprehensive income attributable to common shareholders

$213,425

 

$29,241

 

 

$305,551

 

$125,057

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

Total earnings per common share - basic

$2.03

 

$0.29

 

 

$2.97

 

$1.24

 

Total earnings per common share - diluted

2.02

 

0.29

 

 

2.96

 

1.24

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

Basic

104,611

 

99,422

 

 

101,999

 

99,385

 

Diluted

105,448

 

99,507

 

 

102,829

 

99,438

 

(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 December 31, 2021, we recognized $305.4 million of property revenue which consisted of approximately $271.4 million of rental revenue and approximately $34.0 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. This compares to property revenue of $261.6 million recognized for the three months ended December 31, 2020, made up of approximately $230.8 million of rental revenue, including the negative impact of $3.5 million related to the non-cash adjustment to retail straight-line rent receivables, and approximately $30.8 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, 2021, we recognized $1,143.6 million of property revenue which consisted of approximately $1,009.2 million of rental revenue and approximately $134.4 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. This compares to $1,043.8 million of property revenue recognized for the twelve months ended December 31, 2020, made up of approximately $923.0 million of rental revenue, including the combined negative impact of $12.6 million related to the non-cash adjustment to retail straight-line rent receivables and the Resident Relief Funds, and approximately $120.8 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 $8.3 million and $7.5 million for the three months ended December 31, 2021 and 2020, respectively, and was $31.5 million and $28.9 million for the twelve months ended December 31, 2021 and 2020, respectively.

 

 

(b)

Net income attributable to common shareholders was negatively impacted for the three and twelve months ended December 31, 2020 by an approximate $3.5 million non-cash adjustment to retail straight-line rent receivables. Net income attributable to common shareholders was also negatively impacted for the twelve months ended December 31, 2020 by an approximate $14.8 million due to Pandemic Related Impact. Please refer to page 28 of the supplement, footnote (a) for additional detail on the breakdown of the Pandemic 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 December 31,

 

Twelve Months Ended December 31,

 

2021

2020

 

2021

2020

FUNDS FROM OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders (a)

$212,898

 

$29,193

 

 

$303,907

 

$123,911

 

Real estate depreciation and amortization

114,007

 

89,504

 

 

410,767

 

357,489

 

Adjustments for unconsolidated joint ventures

2,688

 

2,550

 

 

10,591

 

9,483

 

Income allocated to non-controlling interests

4,961

 

1,188

 

 

8,469

 

4,849

 

Gain on sale of operating properties

(174,384

)

 

 

(174,384

)

 

Funds from operations

$160,170

 

$122,435

 

 

$559,350

 

$495,732

 

 

 

 

 

 

 

Less: recurring capitalized expenditures (b)

(22,398

)

(21,619

)

 

(73,603

)

(77,525

)

 

 

 

 

 

 

Adjusted funds from operations

$137,772

 

$100,816

 

 

$485,747

 

$418,207

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

Funds from operations - diluted

$1.51

 

$1.21

 

 

$5.39

 

$4.90

 

Adjusted funds from operations - diluted

1.30

 

1.00

 

 

4.68

 

4.13

 

Distributions declared per common share

0.83

 

0.83

 

 

3.32

 

3.32

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

FFO/AFFO - diluted

106,322

 

101,255

 

 

103,747

 

101,186

 

 

 

 

 

 

 

PROPERTY DATA

 

 

 

 

 

Total operating properties (end of period) (c)

171

 

167

 

 

171

 

167

 

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

58,300

 

56,850

 

 

58,300

 

56,850

 

Total operating apartment homes (weighted average)

51,313

 

49,270

 

 

50,479

 

49,128

 

(a)

Net income attributable to common shareholders was negatively impacted for the three and twelve months ended December 31, 2020 by an approximate $3.5 million non-cash adjustment to retail straight-line rent receivables. Net income attributable to common shareholders was also negatively impacted for the twelve months ended December 31, 2020 by an approximate $14.8 million due to Pandemic Related Impact. Please refer to page 28 of the supplement, footnote (a), for additional detail on the breakdown of the Pandemic 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)

 

Dec 31,

2021

Sep 30,

2021

Jun 30,

2021

Mar 31,

2021

Dec 31,

2020

ASSETS

 

 

 

 

 

Real estate assets, at cost

 

 

 

 

 

Land

$1,349,594

 

$1,317,431

 

$1,285,634

 

$1,233,937

 

$1,225,214

 

Buildings and improvements

8,624,734

 

8,536,620

 

8,288,865

 

7,863,707

 

7,763,748

 

 

9,974,328

 

9,854,051

 

9,574,499

 

9,097,644

 

8,988,962

 

Accumulated depreciation

(3,358,027

)

(3,319,206

)

(3,219,085

)

(3,124,504

)

(3,034,186

)

Net operating real estate assets

6,616,301

 

6,534,845

 

6,355,414

 

5,973,140

 

5,954,776

 

Properties under development, including land

474,739

 

428,622

 

443,100

 

541,958

 

564,215

 

Investments in joint ventures

13,730

 

17,788

 

18,415

 

18,800

 

18,994

 

Total real estate assets

7,104,770

 

6,981,255

 

6,816,929

 

6,533,898

 

6,537,985

 

Accounts receivable – affiliates

18,664

 

18,686

 

19,183

 

19,502

 

20,158

 

Other assets, net (a)

234,370

 

252,079

 

241,687

 

213,126

 

216,276

 

Cash and cash equivalents

613,391

 

428,226

 

374,556

 

333,402

 

420,441

 

Restricted cash

5,589

 

5,321

 

4,762

 

4,105

 

4,092

 

Total assets

$7,976,784

 

$7,685,567

 

$7,457,117

 

$7,104,033

 

$7,198,952

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Liabilities

 

 

 

 

 

Notes payable

 

 

 

 

 

Unsecured

$3,170,367

 

$3,169,428

 

$3,168,492

 

$3,167,557

 

$3,166,625

 

Accounts payable and accrued expenses

191,651

 

191,648

 

155,057

 

159,111

 

175,608

 

Accrued real estate taxes

66,673

 

88,116

 

66,696

 

33,155

 

66,156

 

Distributions payable

88,786

 

87,919

 

86,689

 

84,282

 

84,147

 

Other liabilities (b)

193,052

 

194,634

 

193,975

 

185,852

 

189,829

 

Total liabilities

3,710,529

 

3,731,745

 

3,670,909

 

3,629,957

 

3,682,365

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Common shares of beneficial interest

1,126

 

1,114

 

1,098

 

1,070

 

1,069

 

Additional paid-in capital

5,363,530

 

5,180,783

 

4,953,703

 

4,588,056

 

4,581,710

 

Distributions in excess of net income attributable to common shareholders

(829,453

)

(954,880

)

(897,761

)

(842,628

)

(791,079

)

Treasury shares

(333,974

)

(334,066

)

(334,161

)

(335,511

)

(341,412

)

Accumulated other comprehensive loss (c)

(3,739

)

(4,266

)

(4,638

)

(5,010

)

(5,383

)

Total common equity

4,197,490

 

3,888,685

 

3,718,241

 

3,405,977

 

3,444,905

 

Non-controlling interests

68,765

 

65,137

 

67,967

 

68,099

 

71,682

 

Total equity

4,266,255

 

3,953,822

 

3,786,208

 

3,474,076

 

3,516,587

 

Total liabilities and equity

$7,976,784

 

$7,685,567

 

$7,457,117

 

$7,104,033

 

$7,198,952

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Includes net deferred charges of:

$969

 

$1,336

 

$1,655

 

$2,031

 

$2,299

 

 

 

 

 

 

 

(b) Includes deferred revenues of:

$334

 

$208

 

$232

 

$256

 

$284

 

 

 

 

 

 

 

(c) Represents the unrealized net gain (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 December 31,

 

Twelve Months Ended December 31,

 

2021

2020

 

2021

2020

Net income attributable to common shareholders (a)

$212,898

 

$29,193

 

 

$303,907

 

$123,911

 

Real estate depreciation and amortization

114,007

 

89,504

 

 

410,767

 

357,489

 

Adjustments for unconsolidated joint ventures

2,688

 

2,550

 

 

10,591

 

9,483

 

Income allocated to non-controlling interests

4,961

 

1,188

 

 

8,469

 

4,849

 

Gain on sale of operating properties

(174,384

)

 

 

(174,384

)

 

Funds from operations

$160,170

 

$122,435

 

 

$559,350

 

$495,732

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

(22,398

)

(21,619

)

 

(73,603

)

(77,525

)

 

 

 

 

 

 

Adjusted funds from operations

$137,772

 

$100,816

 

 

$485,747

 

$418,207

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

EPS diluted

105,448

 

99,507

 

 

102,829

 

99,438

 

FFO/AFFO diluted

106,322

 

101,255

 

 

103,747

 

101,186

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

2021

 

2020

 

 

2021

 

2020

 

Total Earnings Per Common Share - Diluted

$2.02

 

$0.29

 

 

$2.96

 

$1.24

 

Real estate depreciation and amortization

1.07

 

0.88

 

 

3.96

 

3.53

 

Adjustments for unconsolidated joint ventures

0.03

 

0.03

 

 

0.09

 

0.09

 

Income allocated to non-controlling interests

0.03

 

0.01

 

 

0.06

 

0.04

 

Gain on sale of operating properties

(1.64

)

 

 

(1.68

)

 

FFO per common share - Diluted

$1.51

 

$1.21

 

 

$5.39

 

$4.90

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

(0.21

)

(0.21

)

 

(0.71

)

(0.77

)

 

 

 

 

 

 

AFFO per common share - Diluted

$1.30

 

$1.00

 

 

$4.68

 

$4.13

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Net income attributable to common shareholders was negatively impacted for the three and twelve months ended December 31, 2020 by an approximate $3.5 million non-cash adjustment to retail straight-line rent receivables. Net income attributable to common shareholders was also negatively impacted for the twelve months ended December 31, 2020 by an approximate $14.8 million due to Pandemic Related Impact. The total Pandemic Related Impact for the twelve months ended December 31, 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. Additionally, we incurred approximately $4.5 million of pandemic expenses at our operating communities during the third and fourth of 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 pandemic expenses for the twelve months ended December 31, 2020. We also incurred approximately $0.8 million related to the Employee Relief Fund we established to help our employees impacted by the pandemic during the twelve months ended December 31, 2020.

 

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:

 

1Q22 Range

 

2022 Range

 

Low

High

 

Low

High

Expected earnings per common share - diluted

$0.38

$0.42

 

$1.65

$1.95

Expected real estate depreciation and amortization

1.03

1.03

 

4.28

4.28

Expected adjustments for unconsolidated joint ventures

0.03

0.03

 

0.10

0.10

Expected income allocated to non-controlling interests

0.01

0.01

 

0.06

0.06

Expected FFO per share - diluted

$1.45

$1.49

 

$6.09

$6.39

 

 

 

 

 

 

 

 

 

 

 

 

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 December 31,

 

Twelve months ended December 31,

 

2021

2020

 

2021

2020

Net income (a)

$217,859

 

$30,381

 

 

$312,376

 

$128,579

 

Less: Fee and asset management income

(2,815

)

(3,351

)

 

(10,532

)

(10,800

)

Less: Interest and other income

(191

)

(347

)

 

(1,223

)

(2,949

)

Less: Income on deferred compensation plans

(5,186

)

(10,399

)

 

(14,369

)

(12,045

)

Plus: Property management expense

7,139

 

5,841

 

 

26,339

 

24,201

 

Plus: Fee and asset management expense

1,201

 

1,273

 

 

4,511

 

3,954

 

Plus: General and administrative expense

14,940

 

13,274

 

 

59,368

 

53,624

 

Plus: Interest expense

24,582

 

24,072

 

 

97,297

 

91,526

 

Plus: Depreciation and amortization expense

116,503

 

91,925

 

 

420,692

 

367,162

 

Plus: Expense on deferred compensation plans

5,186

 

10,399

 

 

14,369

 

12,045

 

Plus: Loss on early retirement of debt

 

176

 

 

 

176

 

Less: Gain on sale of operating properties, including land

(174,384

)

 

 

(174,384

)

(382

)

Less: Equity in income of joint ventures

(3,125

)

(2,143

)

 

(9,777

)

(8,052

)

Plus: Income tax expense

601

 

496

 

 

1,893

 

1,972

 

NOI (b) (c)

$202,310

 

$161,597

 

 

$726,560

 

$649,011

 

 

 

 

 

 

 

"Same Property" Communities

$168,342

 

$146,564

 

 

$620,662

 

$592,495

 

Non-"Same Property" Communities

28,174

 

15,085

 

 

86,160

 

58,885

 

Development and Lease-Up Communities

2,867

 

(4

)

 

4,876

 

(7

)

Pandemic Related Impact (b) (c)

 

 

 

 

(13,614

)

Other

2,927

 

(48

)

 

14,862

 

11,252

 

NOI (b) (c) (d)

$202,310

 

$161,597

 

 

$726,560

 

$649,011

 

(a)

Net income was negatively impacted for the three and twelve months ended December 31, 2020 by an approximate $3.5 million non-cash adjustment to retail straight-line rent receivables. Net income was also negatively impacted for the twelve months ended December 31, 2020 by an approximate $14.8 million due to Pandemic Related Impact. Please refer to page 28 of the supplement, footnote (a), for additional detail on the breakdown of the Pandemic Related Impact.

 

 

(b)

Two Resident Relief Funds were established for residents experiencing financial losses caused by the pandemic, and paid out approximately $9.1 million to approximately 7,100 Camden residents of our wholly-owned communities, which were recognized in 2Q20 as a reduction of property revenues.

 

 

(c)

We incurred approximately $4.5 million of directly-related pandemic related expenses at our operating communities for the twelve months ended December 31, 2020, which included $2.8 million of bonuses paid to employees providing essential services during the pandemic and approximately $1.7 million in other directly-related pandemic expenses.

 

 

(d)

For the three and twelve months ended December 31, 2020, NOI was negatively impacted by an approximate $3.5 million non-cash adjustment to retail straight-line rent receivables.

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 the direct Pandemic 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. 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,

 

2021

2020

 

2021

2020

Net income attributable to common shareholders (a)

$212,898

 

$29,193

 

 

$303,907

 

$123,911

 

Plus: Interest expense

24,582

 

24,072

 

 

97,297

 

91,526

 

Plus: Depreciation and amortization expense

116,503

 

91,925

 

 

420,692

 

367,162

 

Plus: Income allocated to non-controlling interests

4,961

 

1,188

 

 

8,469

 

4,668

 

Plus: Income tax expense

601

 

496

 

 

1,893

 

1,972

 

Plus: Pandemic Related Impact (b)

 

 

 

 

14,364

 

Plus: Retail straight-line rent receivables adjustment (c)

 

3,519

 

 

 

3,519

 

Less: Gain on sale of operating properties, including land

(174,384

)

 

 

(174,384

)

(382

)

Plus: Loss on early retirement of debt

 

176

 

 

 

176

 

Less: Equity in income of joint ventures

(3,125

)

(2,143

)

 

(9,777

)

(8,052

)

Adjusted EBITDA

$182,036

 

$148,426

 

 

$648,097

 

$598,864

 

Annualized Adjusted EBITDA

$728,144

 

$593,704

 

 

$648,097

 

$598,864

 

(a)

Net income attributable to common shareholders was negatively impacted for the three and twelve months ended December 31, 2020 by an approximate $3.5 million non-cash adjustment to retail straight-line rent receivables. Net income attributable to common shareholders was also negatively impacted for the twelve months ended December 31, 2020 by an approximate $14.8 million due to Pandemic Related Impact. Please refer to page 28 of the supplement, footnote (a), for additional detail on the breakdown of the Pandemic Related Impact.

 

 

(b)

Approximately $14.4 million of the stated Pandemic Related Impact, which consists of the Resident Relief Funds, Employee Relief Fund, directly-related pandemic expenses, and bonuses paid to on-site employees, has been added back to the Adjusted EBITDA calculation for the twelve months ended December 31, 2020, respectively.

 

 

(c)

During 4Q20, we took an approximately $3.5 million negative non-cash adjustment to retail straight-line rent receivables as a result of our assessing collectability by tenant and determining it was no longer probable substantially all leasing revenue would be collected from certain retail tenants. This adjustment has been added back to the Adjusted EBITDA calculation for the three and twelve months ended December 31, 2020.

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 the

 

Average monthly balance for the

 

Three months ended December 31,

 

Twelve months ended December 31,

 

2021

2020

 

2021

2020

Unsecured notes payable

$3,170,054

 

$3,166,316

 

 

$3,168,649

 

$3,062,587

 

Total debt

3,170,054

 

3,166,316

 

 

3,168,649

 

3,062,587

 

Less: Cash and cash equivalents

(385,194

)

(403,119

)

 

(329,967

)

(376,114

)

Net debt

$2,784,860

 

$2,763,197

 

 

$2,838,682

 

$2,686,473

 

Net Debt to Annualized Adjusted EBITDA:

 

Three months ended December 31,

 

Twelve months ended December 31,

 

2021

2020

 

2021

2020

Net debt

$2,784,860

$2,763,197

 

$2,838,682

$2,686,473

Annualized Adjusted EBITDA

728,144

593,704

 

648,097

598,864

Net Debt to Annualized Adjusted EBITDA

3.8x

4.7x

 

4.4x

4.5x

CAMDEN

2022 FINANCIAL OUTLOOK

 

AS OF FEBRUARY 3, 2022

 

(Unaudited)

 

Earnings Guidance - Per Diluted Share

 

Expected FFO per share - diluted

$6.09 - $6.39

 

 

"Same Property" Communities

 

Number of Units - 2022

46,789

2021 Base Net Operating Income

$668 million

Total Revenue Growth

7.75% - 9.75%

Total Expense Growth

2.25% - 3.75%

Net Operating Income Growth

10.50% - 13.50%

Impact from 1% change in NOI Growth is approximately $0.062 / share

 

 

 

Capitalized Expenditures

 

Recurring

$80 - $84 million

Revenue Enhancing Capex, Repositions, Redevelopment, and Repurposes (a)

$62 - $66 million

Non-Recurring Capital Expenditures

$16 - $18 million

 

 

Acquisitions/Dispositions

 

Acquisition Volume (consolidated on balance sheet)

$500 - $700 million

Disposition Volume (consolidated on balance sheet)

$200 - $300 million

 

 

Development

 

Development Starts (consolidated on balance sheet)

$400 - $600 million

Development Spend (consolidated on balance sheet)

$300 - $330 million

 

 

Equity in Income of Joint Ventures (FFO)

$22 - $24 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 / Property Management Expenses

$82 - $88 million

Fee and Asset Management Expense

$4 - $6 million

Corporate G&A Depreciation/Amortization

$10 - $12 million

 

 

Capital

 

Expensed Interest

$95 - $99 million

Capitalized Interest

$16 - $18 million

(a)

Capital expenditures that improve a community's cash flow and competitive position, including kitchen and bath upgrades or other new amenities, additional leasable space, and our smart access solution.

Note: This table contains forward-looking statements. Please see the paragraph regarding forward-looking statements earlier in this document. Additionally, please refer to earlier pages for definitions and reconciliations of all non-GAAP financial measures presented in this document.

 

Contacts

Kim Callahan, 713-354-2549

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