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Camden Property Trust Announces 2022 Operating Results, 2023 Financial Outlook, and First Quarter 2023 Dividend

Camden Property Trust (NYSE:CPT) (the "Company") announced today operating results for the three and twelve months ended December 31, 2022. 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, 2022 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

2022

2021

2022

2021

EPS(1)(2)

$0.42

$2.02

$6.04

$2.96

FFO(1)

$1.74

$1.51

$6.59

$5.39

AFFO(1)

$1.48

$1.30

$5.76

$4.68

(1) For the twelve months ended December 31, 2022, EPS, FFO, and AFFO included approximately $0.01 per diluted share in storm-related expenses related to Hurricane Ian.

(2) For the twelve months ended December 31, 2022, EPS included a non-cash gain on acquisition of unconsolidated joint venture interests of approximately $4.37 per diluted share.

 

Quarterly Growth

Sequential Growth

Year-To-Date Growth

Same Property Results

4Q22 vs. 4Q21

4Q22 vs. 3Q22

2022 vs. 2021

Revenues

9.9%

0.8%

11.2%

Expenses(1)

8.1%

(3.9)%

5.1%

Net Operating Income ("NOI")(1)

10.9%

3.3%

14.6%

(1) For the twelve months ended December 31, 2022, same property results exclude approximately $1.0 million of storm-related expenses related to Hurricane Ian.

Same Property Results

4Q22

4Q21

3Q22

Occupancy

95.8%

97.1%

96.6%

For 2022, the Company defines same property communities as communities wholly-owned and stabilized since January 1, 2021, 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)

January 2023*

January 2022

4Q22

4Q21

New Lease Rates

2.0%

16.5%

4.0%

16.7%

Renewal Rates

7.3%

13.5%

8.4%

14.2%

Blended Rates

4.2%

14.9%

6.1%

15.5%

New Lease and Renewal Data - Date Effective (2)

January 2023*

January 2022

4Q22

4Q21

New Lease Rates

1.2%

16.6%

5.3%

17.7%

Renewal Rates

8.4%

15.0%

10.1%

13.6%

Blended Rates

4.8%

15.8%

7.6%

15.7%

*Data as of January 30, 2023

(1) Average change in same property new lease and renewal rates vs. expiring lease rates when signed.

(2) Average change in same property new lease and renewal rates vs. expiring lease rates when effective.

Occupancy and Turnover Data

January 2023*

January 2022

4Q22

4Q21

Occupancy

95.4%

97.1%

95.8%

97.1%

Annualized Gross Turnover

42%

43%

44%

42%

Annualized Net Turnover

34%

37%

37%

36%

*Data as of January 30, 2023

Development Activity

During the quarter, construction was completed at Camden Atlantic in Plantation, FL and leasing continued at Camden Tempe 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 1/30/2023

Camden Atlantic

Plantation, FL

269

$100.2

87%

Development Communities - Construction Ongoing ($ in millions)

 

 

Total

Total

% Leased

Community Name

Location

Homes

Estimated Cost

as of 1/30/2023

Camden Tempe II

Tempe, AZ

397

$115.0

50%

Camden NoDa

Charlotte, NC

387

108.0

 

Camden Durham

Durham, NC

420

145.0

 

Camden Village District

Raleigh, NC

369

138.0

 

Camden Woodmill Creek

The Woodlands, TX

189

75.0

 

Camden Long Meadow Farms

Richmond, TX

188

80.0

 

Total

 

1,950

$661.0

 

Capital Markets Transactions

During the quarter, the Company used the $300 million delayed draw unsecured term loan facility and borrowings from our existing unsecured credit facility to repay the principal amount of our 3.15% senior unsecured note payable which matured on December 15, 2022, for a total of $350.0 million, plus accrued interest. The current weighted average interest rate on our unsecured term loan facility and unsecured credit facility is 5.2%.

Liquidity Analysis

As of December 31, 2022, Camden had nearly $1.2 billion of liquidity comprised of approximately $10.7 million in cash and cash equivalents, and over $1.1 billion of availability under its unsecured credit facility. At quarter-end, the Company had $306.7 million left to fund under its existing wholly-owned development pipeline.

Earnings Guidance

Camden provided initial earnings guidance for 2023 based on its current and expected views of the apartment market and general economic conditions, and provided guidance for first quarter 2023 as detailed below. Expected EPS excludes gains, if any, from future real estate transactions.

 

1Q23

2023

Per Diluted Share

Range

Range

Midpoint

EPS

$0.36 - $0.40

$1.53 - $1.83

$1.68

FFO

$1.63- $1.67

$6.70 - $7.00

$6.85

A reconciliation of 2023 FFO per share guidance as compared to 2022 actual results is detailed below.

2022 FFO per share - actual

$ 6.59

5% Same store NOI growth

0.36

Additional NOI from Fund acquisition

0.26

Growth in other non-same store/development communities

0.16

Increased interest expense

(0.21)

2022 Amortization of net below market leases - Fund acquisition

(0.07)

2022 Equity in income of joint ventures and management fees - Fund

(0.07)

Higher overhead expenses

(0.06)

Additional shares outstanding for full year 2023

(0.06)

Other - 2022 Chirp earnout and 2022 disposition

(0.05)

2023 FFO per share - midpoint guidance

$ 6.85

 

 

2023

Same Property Growth

 

Range

Midpoint

Revenues

 

4.10% - 6.10%

5.10%

Expenses

 

4.75% - 6.25%

5.50%

NOI

 

3.50% - 6.50%

5.00%

Camden intends to update its earnings guidance to the market on a quarterly basis. Additional information on the Company’s 2023 financial outlook including key assumptions for same property growth 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 2023 dividend of $1.00 per common share payable on April 17, 2023 to shareholders of record as of March 31, 2023. 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 3, 2023 at 10:00 AM CT

Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061; Passcode: 2673669

Webcast: https://investors.camdenliving.com

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 500 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 172 properties containing 58,702 apartment homes across the United States. Upon completion of 6 properties currently under development, the Company’s portfolio will increase to 60,652 apartment homes in 178 properties. Camden has been recognized as one of the 100 Best Companies to Work For® by FORTUNE magazine for 15 consecutive years, most recently ranking #26. 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,

 

2022

2021

 

2022

2021

OPERATING DATA

 

 

 

 

 

 

 

 

 

 

 

Property revenues (a)

$375,909

 

$305,364

 

 

$1,422,756

 

$1,143,585

 

 

 

 

 

 

 

Property expenses (b)

 

 

 

 

 

Property operating and maintenance

81,233

 

67,343

 

 

315,737

 

267,703

 

Real estate taxes

45,896

 

35,711

 

 

182,344

 

149,322

 

Total property expenses

127,129

 

103,054

 

 

498,081

 

417,025

 

 

 

 

 

 

 

Non-property income

 

 

 

 

 

Fee and asset management

931

 

2,815

 

 

5,188

 

10,532

 

Interest and other income

138

 

191

 

 

3,019

 

1,223

 

Income/(loss) on deferred compensation plans

8,813

 

5,186

 

 

(19,637

)

14,369

 

Total non-property income/(loss)

9,882

 

8,192

 

 

(11,430

)

26,124

 

 

 

 

 

 

 

Other expenses

 

 

 

 

 

Property management

7,373

 

7,139

 

 

28,601

 

26,339

 

Fee and asset management

426

 

1,201

 

 

2,516

 

4,511

 

General and administrative

15,887

 

14,940

 

 

60,413

 

59,368

 

Interest

30,668

 

24,582

 

 

113,424

 

97,297

 

Depreciation and amortization

147,271

 

116,503

 

 

577,020

 

420,692

 

Expense/(benefit) on deferred compensation plans

8,813

 

5,186

 

 

(19,637

)

14,369

 

Total other expenses

210,438

 

169,551

 

 

762,337

 

622,576

 

 

 

 

 

 

 

Gain on sale of operating properties

 

174,384

 

 

36,372

 

174,384

 

Gain on acquisition of unconsolidated joint venture interests

 

 

 

474,146

 

 

Equity in income of joint ventures

 

3,125

 

 

3,048

 

9,777

 

Income from continuing operations before income taxes

48,224

 

218,460

 

 

664,474

 

314,269

 

Income tax expense

(753

)

(601

)

 

(2,966

)

(1,893

)

Net income

47,471

 

217,859

 

 

661,508

 

312,376

 

Less income allocated to non-controlling interests

(1,762

)

(4,961

)

 

(7,895

)

(8,469

)

Net income attributable to common shareholders

$45,709

 

$212,898

 

 

$653,613

 

$303,907

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

Net income

$47,471

 

$217,859

 

 

$661,508

 

$312,376

 

Other comprehensive income

 

 

 

 

 

Unrealized gain and unamortized prior service cost on post retirement obligation

489

 

154

 

 

489

 

154

 

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

369

 

373

 

 

1,476

 

1,490

 

Comprehensive income

48,329

 

218,386

 

 

663,473

 

314,020

 

Less income allocated to non-controlling interests

(1,762

)

(4,961

)

 

(7,895

)

(8,469

)

Comprehensive income attributable to common shareholders

$46,567

 

$213,425

 

 

$655,578

 

$305,551

 

 

 

 

 

 

 

PER SHARE DATA

��

 

 

 

 

 

 

 

 

 

 

Total earnings per common share - basic

$0.42

 

$2.03

 

 

$6.07

 

$2.97

 

Total earnings per common share - diluted

0.42

 

2.02

 

 

6.04

 

2.96

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

Basic

108,467

 

104,611

 

 

107,605

 

101,999

 

Diluted

108,512

 

105,448

 

 

108,388

 

102,829

 

(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, 2022, we recognized $375.9 million of property revenue which consisted of approximately $336.0 million of rental revenue and approximately $39.9 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 $305.4 million recognized for the three months ended December 31, 2021, made up 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. For the twelve months ended December 31, 2022, we recognized $1,422.7 million of property revenue which consisted of approximately $1,265.9 million of rental revenue and approximately $156.8 million of amounts received under contractual terms for other services considered to be non-lease contracts. This compares to the $1,143.6 million of property revenue recognized for the twelve months ended December 31, 2021, made up 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. Revenue related to utility rebilling to residents was $10.0 million and $8.3 million for the three months ended December 31, 2022 and 2021, respectively and was $37.5 million and $31.5 million for the twelve months ended December 31, 2022 and 2021, respectively.

(b)

For the twelve months ended December 31, 2022 expenses include approximately $1.0 million in storm-related expenses related to Hurricane Ian.

 

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,

 

2022

2021

 

2022

2021

FUNDS FROM OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders (a)

$45,709

 

$212,898

 

 

$653,613

 

$303,907

 

Real estate depreciation and amortization

144,105

 

114,007

 

 

565,913

 

410,767

 

Adjustments for unconsolidated joint ventures

 

2,688

 

 

2,709

 

10,591

 

Income allocated to non-controlling interests

1,762

 

4,961

 

 

7,895

 

8,469

 

Gain on sale of operating property

 

(174,384

)

 

(36,372

)

(174,384

)

Gain on acquisition of unconsolidated joint venture interests

 

 

 

(474,146

)

 

Funds from operations

$191,576

 

$160,170

 

 

$719,612

 

$559,350

 

 

 

 

 

 

 

Less: recurring capitalized expenditures (b)

(29,033

)

(22,398

)

 

(90,715

)

(73,603

)

 

 

 

 

 

 

Adjusted funds from operations

$162,543

 

$137,772

 

 

$628,897

 

$485,747

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

Funds from operations - diluted

$1.74

 

$1.51

 

 

$6.59

 

$5.39

 

Adjusted funds from operations - diluted

1.48

 

1.30

 

 

5.76

 

4.68

 

Distributions declared per common share

0.94

 

0.83

 

 

3.76

 

3.32

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

FFO/AFFO - diluted

110,117

 

106,322

 

 

109,261

 

103,747

 

 

 

 

 

 

 

PROPERTY DATA

 

 

 

 

 

Total operating properties (end of period) (c)

172

 

171

 

 

172

 

171

 

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

58,702

 

58,300

 

 

58,702

 

58,300

 

Total operating apartment homes (weighted average)

58,621

 

51,313

 

 

56,566

 

50,479

 

(a)

Net income attributable to common shareholders for the twelve months ended December 31, 2022 included approximately $1.0 million of storm-related expenses related to Hurricane Ian.

(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,

2022

Sep 30,

2022

Jun 30,

2022

Mar 31,

2022

Dec 31,

2021

ASSETS

 

 

 

 

 

Real estate assets, at cost

 

 

 

 

 

Land

$1,716,273

 

$1,706,396

 

$1,695,118

 

$1,343,209

 

$1,349,594

 

Buildings and improvements

10,674,619

 

10,574,820

 

10,440,037

 

8,651,674

 

8,624,734

 

 

12,390,892

 

12,281,216

 

12,135,155

 

9,994,883

 

9,974,328

 

Accumulated depreciation

(3,848,111

)

(3,709,487

)

(3,572,764

)

(3,436,969

)

(3,358,027

)

Net operating real estate assets

8,542,781

 

8,571,729

 

8,562,391

 

6,557,914

 

6,616,301

 

Properties under development, including land

524,981

 

529,076

 

581,844

 

488,100

 

474,739

 

Investments in joint ventures

 

 

 

13,181

 

13,730

 

Total real estate assets

9,067,762

 

9,100,805

 

9,144,235

 

7,059,195

 

7,104,770

 

Accounts receivable – affiliates

13,364

 

13,258

 

13,258

 

13,258

 

18,664

 

Other assets, net (a)

229,371

 

231,645

 

249,865

 

254,763

 

234,370

 

Cash and cash equivalents

10,687

 

62,027

 

72,095

 

1,129,716

 

613,391

 

Restricted cash

6,751

 

6,390

 

6,563

 

5,778

 

5,589

 

Total assets

$9,327,935

 

$9,414,125

 

$9,486,016

 

$8,462,710

 

$7,976,784

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Liabilities

 

 

 

 

 

Notes payable

 

 

 

 

 

Unsecured

$3,165,924

 

$3,173,198

 

$3,222,252

 

$3,671,309

 

$3,170,367

 

Secured

514,989

 

514,843

 

514,698

 

 

 

Accounts payable and accrued expenses

211,370

 

212,558

 

195,070

 

169,973

 

191,651

 

Accrued real estate taxes

95,551

 

125,210

 

86,952

 

36,988

 

66,673

 

Distributions payable

103,628

 

103,620

 

103,621

 

100,880

 

88,786

 

Other liabilities (b)

179,552

 

176,334

 

186,143

 

197,021

 

193,052

 

Total liabilities

4,271,014

 

4,305,763

 

4,308,736

 

4,176,171

 

3,710,529

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Common shares of beneficial interest

1,156

 

1,156

 

1,156

 

1,127

 

1,126

 

Additional paid-in capital

5,897,454

 

5,893,623

 

5,890,792

 

5,396,267

 

5,363,530

 

Distributions in excess of net income attributable to common shareholders

(581,532

)

(525,127

)

(452,865

)

(848,074

)

(829,453

)

Treasury shares

(328,684

)

(329,027

)

(328,975

)

(329,521

)

(333,974

)

Accumulated other comprehensive loss (c)

(1,774

)

(2,632

)

(3,001

)

(3,370

)

(3,739

)

Total common equity

4,986,620

 

5,037,993

 

5,107,107

 

4,216,429

 

4,197,490

 

Non-controlling interests

70,301

 

70,369

 

70,173

 

70,110

 

68,765

 

Total equity

5,056,921

 

5,108,362

 

5,177,280

 

4,286,539

 

4,266,255

 

Total liabilities and equity

$9,327,935

 

$9,414,125

 

$9,486,016

 

$8,462,710

 

$7,976,784

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Includes net deferred charges of:

$8,413

 

$8,961

 

$307

 

$693

 

$969

 

 

 

 

 

 

 

(b) Includes deferred revenues of:

$304

 

$331

 

$358

 

$384

 

$334

 

 

 

 

 

 

 

(c) Represents the unrealized net loss and unamortized prior service costs on post retirement obligations, and unrealized net 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,

 

2022

2021

 

2022

2021

Net income attributable to common shareholders

$45,709

 

$212,898

 

 

$653,613

 

$303,907

 

Real estate depreciation and amortization

144,105

 

114,007

 

 

565,913

 

410,767

 

Adjustments for unconsolidated joint ventures

 

2,688

 

 

2,709

 

10,591

 

Income allocated to non-controlling interests

1,762

 

4,961

 

 

7,895

 

8,469

 

Gain on sale of operating property

 

(174,384

)

 

(36,372

)

(174,384

)

Gain on acquisition of unconsolidated joint venture interests

 

 

 

(474,146

)

 

Funds from operations

$191,576

 

$160,170

 

 

$719,612

 

$559,350

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

(29,033

)

(22,398

)

 

(90,715

)

(73,603

)

 

 

 

 

 

 

Adjusted funds from operations

$162,543

 

$137,772

 

 

$628,897

 

$485,747

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

EPS diluted

108,512

 

105,448

 

 

108,388

 

102,829

 

FFO/AFFO diluted

110,117

 

106,322

 

 

109,261

 

103,747

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

2022

2021

 

2022

2021

Total Earnings Per Common Share - Diluted

$0.42

 

$2.02

 

 

$6.04

 

$2.96

 

Real estate depreciation and amortization

1.31

 

1.07

 

 

5.16

 

3.96

 

Adjustments for unconsolidated joint ventures

 

0.03

 

 

0.02

 

0.09

 

Income allocated to non-controlling interests

0.01

 

0.03

 

 

0.04

 

0.06

 

Gain on sale of operating property

 

(1.64

)

 

(0.33

)

(1.68

)

Gain on acquisition of unconsolidated joint venture interests

 

 

 

(4.34

)

 

FFO per common share - Diluted

$1.74

 

$1.51

 

 

$6.59

 

$5.39

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

(0.26

)

(0.21

)

 

(0.83

)

(0.71

)

 

 

 

 

 

 

AFFO per common share - Diluted

$1.48

 

$1.30

 

 

$5.76

 

$4.68

 

 

 

 

 

 

 

 

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, from real estate transactions not sold as of quarter close 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:

 

1Q23 Range

 

2023 Range

 

Low

High

 

Low

High

Expected earnings per common share - diluted

$0.36

$0.40

 

$1.53

$1.83

Expected real estate depreciation and amortization

1.26

1.26

 

5.12

5.12

Expected income allocated to non-controlling interests

0.01

0.01

 

0.05

0.05

Expected FFO per share - diluted

$1.63

$1.67

 

$6.70

$7.00

 

 

 

 

 

 

 

 

 

 

 

 

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 11 of the supplement. The Company considers NOI to be an appropriate supplemental measure of operating performance to net income attributable to common shareholders because it reflects the operating performance of our communities without allocation of corporate level property management overhead or general and administrative costs. A reconciliation of net income attributable to common shareholders to net operating income is provided below:

 

Three months ended December 31,

 

Twelve months ended December 31,

 

2022

2021

 

2022

2021

Net income

$47,471

 

$217,859

 

 

$661,508

 

$312,376

 

Less: Fee and asset management income

(931

)

(2,815

)

 

(5,188

)

(10,532

)

Less: Interest and other income

(138

)

(191

)

 

(3,019

)

(1,223

)

Less: Income/(loss) on deferred compensation plans

(8,813

)

(5,186

)

 

19,637

 

(14,369

)

Plus: Property management expense

7,373

 

7,139

 

 

28,601

 

26,339

 

Plus: Fee and asset management expense

426

 

1,201

 

 

2,516

 

4,511

 

Plus: General and administrative expense

15,887

 

14,940

 

 

60,413

 

59,368

 

Plus: Interest expense

30,668

 

24,582

 

 

113,424

 

97,297

 

Plus: Depreciation and amortization expense

147,271

 

116,503

 

 

577,020

 

420,692

 

Plus: Expense/(benefit) on deferred compensation plans

8,813

 

5,186

 

 

(19,637

)

14,369

 

Less: Gain on sale of operating properties

 

(174,384

)

 

(36,372

)

(174,384

)

Less: Gain on acquisition of unconsolidated joint venture interests

 

 

 

(474,146

)

 

Less: Equity in income of joint ventures

 

(3,125

)

 

(3,048

)

(9,777

)

Plus: Income tax expense

753

 

601

 

 

2,966

 

1,893

 

NOI

$248,780

 

$202,310

 

 

$924,675

 

$726,560

 

 

 

 

 

 

 

"Same Property" Communities

$197,575

 

$178,163

 

 

$753,204

 

$656,985

 

Non-"Same Property" Communities

48,713

 

20,238

 

 

164,621

 

51,041

 

Development and Lease-Up Communities

1,025

 

 

 

1,255

 

8

 

Hurricane Expenses

 

 

 

(1,000

)

 

Other

1,467

 

3,909

 

 

6,595

 

18,526

 

NOI

$248,780

 

$202,310

 

 

$924,675

 

$726,560

 

 

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 acquisition 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, as well as income (loss) allocated to non-controlling interests. The Company considers Adjusted EBITDA to be an appropriate supplemental measure of operating performance to net income attributable to common shareholders because it represents income before non-cash depreciation and the cost of debt, and excludes gains or losses from property dispositions. Annualized Adjusted EBITDA is Adjusted EBITDA as reported for the period multiplied by 4 for quarter results. A reconciliation of net income attributable to common shareholders to Adjusted EBITDA is provided below:

 

Three months ended December 31,

 

Twelve months ended December 31,

 

2022

2021

 

2022

2021

Net income attributable to common shareholders

$45,709

$212,898

 

 

$653,613

 

$303,907

 

Plus: Interest expense

30,668

24,582

 

 

113,424

 

97,297

 

Plus: Depreciation and amortization expense

147,271

116,503

 

 

577,020

 

420,692

 

Plus: Income allocated to non-controlling interests

1,762

4,961

 

 

7,895

 

8,469

 

Plus: Income tax expense

753

601

 

 

2,966

 

1,893

 

Plus: Hurricane expenses

 

 

1,000

 

 

Less: Gain on sale of operating properties

(174,384

)

 

(36,372

)

(174,384

)

Less: Gain on acquisition of unconsolidated joint venture interests

 

 

(474,146

)

 

Less: Equity in income of joint ventures

(3,125

)

 

(3,048

)

(9,777

)

Adjusted EBITDA

$226,163

$182,036

 

 

$842,352

 

$648,097

 

Annualized Adjusted EBITDA

$904,652

$728,144

 

 

$842,352

 

$648,097

 

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,

 

 

 

2022

2021

 

2022

2021

Unsecured notes payable

 

 

$3,188,976

 

$3,170,054

 

 

$3,242,448

 

$3,168,649

 

Secured notes payable

 

 

514,940

 

 

 

386,096

 

 

Total debt

 

 

3,703,916

 

3,170,054

 

 

3,628,544

 

3,168,649

 

Less: Cash and cash equivalents

 

 

(3,562

)

(385,194

)

 

(186,178

)

(329,967

)

Net debt

 

 

$3,700,354

 

$2,784,860

 

 

$3,442,366

 

$2,838,682

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Debt to Annualized Adjusted EBITDA:

 

 

 

Three months ended December 31,

 

Twelve months ended December 31,

 

 

 

2022

2021

 

2022

2021

Net debt

 

 

$3,700,354

$2,784,860

 

$3,442,366

$2,838,682

Annualized Adjusted EBITDA

 

 

904,652

728,144

 

842,352

648,097

Net Debt to Annualized Adjusted EBITDA

 

 

4.1x

3.8x

 

4.1x

4.4x

 

CAMDEN

 

2023 FINANCIAL OUTLOOK

 

 

AS OF FEBRUARY 2, 2023

 

 

 

 

 

 

(Unaudited)

 

 

 

 

Earnings Guidance - Per Diluted Share

 

 

 

Expected FFO per share - diluted

 

 

$6.70 - $7.00

 

 

 

 

"Same Property" Communities

 

 

 

Number of Units - 2023

 

 

48,463

2022 Base Net Operating Income

 

 

$790 million

Total Revenue Growth

 

 

4.10% - 6.10%

Total Expense Growth

 

 

4.75% - $6.25%

Net Operating Income Growth

 

 

3.50% - 6.50%

Impact from 1% change in NOI Growth is approximately $0.072 / share

 

 

 

 

 

 

 

2023 Assumptions

 

 

 

Earned-in Rent Growth as of December 31, 2022 & Loss to Lease Capture

 

 

5.00%

December 2022 to December 2023 Assumed Market Rent Growth

 

 

3.00%

Occupancy

 

 

95.7%

Rental Income as a % of Property Revenues

 

 

89%

Other Income Growth

 

 

1.50%

Other Income as a % of Property Revenues

 

 

11%

Property Tax Growth

 

 

6.50%

Property Tax as a % of Property Expenses

 

 

37%

Insurance Growth

 

 

12.50%

Insurance Growth as a % of Property Expenses

 

 

6%

 

 

 

 

Capitalized Expenditures

 

 

 

Recurring

 

 

$96 - $100 million

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

 

 

$93 - $97 million

Non - Recurring Capital Expenditures

 

 

$26 - $28 million

 

 

 

 

Acquisitions/Dispositions

 

 

 

Acquisition Volume (consolidated on balance sheet)

 

 

$0 - $500 million

Disposition Volume (consolidated on balance sheet)

 

 

$0 - $500 million

 

 

 

 

Development

 

 

 

Development Starts (consolidated on balance sheet)

 

 

$250 - $600 million

Development Spend (consolidated on balance sheet)

 

 

$275 - $305 million

 

 

 

 

Non-Property Income

 

 

 

Non-Property Income

 

 

$2 - $3 million

Includes: Fee and asset management income and interest and other income

 

 

 

 

 

 

 

Corporate Expenses

 

 

 

General and Administrative Expenses

 

 

$60 - $64 million

Property Management Expense

 

 

$31 - $35 million

Fee and Asset Management Expense

 

 

$1 - $2 million

Corporate G&A Depreciation/Amortization

 

 

$12 - $14 million

Income Tax Expense

 

 

$2 - $4 million

 

 

 

 

Capital

 

 

 

Expensed Interest

 

 

$135 - $139 million

Capitalized Interest

 

 

$19 - $21 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 on page 2 of this document. Additionally, please refer to the following 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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