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Camden Property Trust Announces 2023 Operating Results, 2024 Financial Outlook, and First Quarter 2024 Dividend

Camden Property Trust (NYSE:CPT) (the "Company") announced today operating results for the three and twelve months ended December 31, 2023. Net Income Attributable to Common Shareholders (“EPS”), Funds from Operations (“FFO”), Core Funds from Operations ("Core FFO"), and Core Adjusted Funds from Operations (“Core AFFO”) for the three and twelve months ended December 31, 2023 are detailed below. A reconciliation of EPS to FFO, Core FFO, and Core AFFO is included in the financial tables accompanying this press release.

 

Three Months Ended

Twelve Months Ended

 

December 31,

December 31,

Per Diluted Share

2023

2022

2023

2022

EPS

$2.03

$0.42

$3.70

$6.04

FFO

$1.72

$1.74

$6.78

$6.59

Core FFO

$1.73

$1.74

$6.82

$6.52

Core AFFO

$1.44

$1.48

$5.94

$5.69

 

Three Months Ended

4Q23 Guidance

4Q23 Guidance

Per Diluted Share

December 31, 2023

Midpoint

Variance

EPS

$2.03

$0.39

$1.64

FFO

$1.72

$1.72

$0.00

Core FFO

$1.73

$1.72

$0.01

 

Quarterly Growth

Sequential Growth

Year-To-Date Growth

Same Property Results

4Q23 vs. 4Q22

4Q23 vs. 3Q23

2023 vs. 2022

Revenues

2.6%

(0.6)%

5.1%

Expenses

7.7%

(2.2)%

6.7%

Net Operating Income ("NOI")

0.0%

0.3%

4.3%

Same Property Results

4Q23

4Q22

3Q23

Occupancy

94.9%

95.8%

95.6%

For 2023, the Company defines same property communities as communities wholly-owned and stabilized since January 1, 2022, 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 2024*

January 2023

4Q23

4Q22

Signed New Lease Rates

(3.8)%

1.8%

(4.3)%

4.0%

Signed Renewal Rates

3.6%

7.1%

3.9%

8.3%

Signed Blended Lease Rates

(0.3)%

4.1%

(0.6)%

6.1%

New Lease and Renewal Data - Date Effective (2)

January 2024*

January 2023

4Q23

4Q22

Effective New Lease Rates

(4.4)%

1.1%

(3.9)%

5.2%

Effective Renewal Rates

3.7%

8.4%

4.4%

10.2%

Effective Blended Lease Rates

(0.6)%

4.8%

0.1%

7.5%

*Data as of January 31, 2024

(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, Bad Debt and Turnover Data

January 2024*

January 2023

4Q23

4Q22

Occupancy

95.0%

95.3%

94.9%

95.8%

Bad Debt

N/A

1.6%

1.1%

1.6%

Annualized Gross Turnover

41%

44%

44%

44%

Annualized Net Turnover

31%

36%

34%

37%

*Data as of January 31, 2024

Development Activity

During the quarter, construction was completed at Camden NoDa in Charlotte, NC. Additionally, leasing began at Camden Woodmill Creek in The Woodlands, TX and leasing continued at Camden Durham in Durham, NC.

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

 

 

Total

Total

% Leased

Community Name

Location

Homes

Cost

as of 1/31/2024

Camden NoDa

Charlotte, NC

387

$107.6

89%

Development Communities - Construction Ongoing ($ in millions)

 

 

Total

Total

% Leased

Community Name

Location

Homes

Estimated Cost

as of 1/31/2024

Camden Durham

Durham, NC

420

$145.0

17%

Camden Woodmill Creek

The Woodlands, TX

189

75.0

15%

Camden Village District

Raleigh, NC

369

138.0

 

Camden Long Meadow Farms

Richmond, TX

188

80.0

 

Total

 

1,166

$438.0

 

Disposition Activity

During the quarter, the Company disposed of a 714-apartment home community in Costa Mesa, CA for approximately $232.0 million and recognized a gain of approximately $176.4 million. In February 2024, Camden expects to close on a planned disposition of a 592-apartment home community in Atlanta, GA for approximately $115.0 million.

Capital Markets Transactions

During the quarter, the Company issued $500 million senior unsecured notes due 2026. These three-year notes were issued at 99.997% of par value with a coupon of 5.850%, a yield of 5.85%, and effective interest rate of 6.08% per annum after giving effect to deducting the underwriting discounts and other expenses of the offering. In connection with the offering of the notes, Camden initiated a forward interest rate swap agreement with an aggregate notional amount of $500 million. Under the interest rate swap agreement, the Company receives a fixed rate of 5.85% and pays a floating interest rate of daily compounded SOFR plus 1.12%.

Subsequent to quarter-end, the Company issued $400 million senior unsecured notes due 2034. These ten-year notes were issued at 99.638% of par value with a coupon of 4.900%, a yield of 4.94%, and effective interest rate of 5.06% per annum after giving effect to deducting the underwriting discounts and other expenses of the offering. Also subsequent to quarter-end, the Company repaid the outstanding balance on its $300 million unsecured term loan and repaid its 4.36% $250 million senior unsecured notes payable which matured in January 2024.

Liquidity Analysis

As of December 31, 2023, Camden had over $1.4 billion of liquidity comprised of approximately $259.7 million in cash and cash equivalents, and nearly $1.2 billion of availability under its unsecured credit facility. At quarter-end, the Company had $137.6 million left to fund under its existing wholly-owned development pipeline.

Earnings Guidance

Camden provided initial earnings guidance for 2024 based on its current and expected views of the apartment market and general economic conditions, and provided guidance for first quarter 2024 as detailed below. Expected EPS excludes gains, if any, from future real estate transactions.

 

1Q24

2024

Per Diluted Share

Range

Range

Midpoint

EPS

$0.74 - $0.78

$1.72 - $2.02

$1.87

FFO

$1.62 - $1.66

$6.54 - $6.84

$6.69

Core FFO(1)

$1.65 - $1.69

$6.59 - $6.89

$6.74

(1) The Company's 2024 core FFO guidance includes approximately $0.05 per share of non-core adjustments for casualty-related expenses, legal costs, loss on early retirement of debt, and expensed pursuit costs.

 

 

2024

Same Property Growth Guidance

Range

Midpoint

Revenues

 

0.50% - 2.50%

1.50%

Expenses

 

3.75% - 5.25%

4.50%

NOI

 

(1.50%) - 1.50%

0.00%

Camden intends to update its earnings guidance to the market on a quarterly basis. Additional information on the Company’s 2024 financial outlook including key assumptions for same property growth and a reconciliation of expected EPS to expected FFO and expected Core FFO are included in the financial tables accompanying this press release.

Quarterly Dividend Declaration

Camden's Board of Trust Managers declared a first quarter 2024 dividend of $1.03 per common share payable on April 17, 2024 to shareholders of record as of March 29, 2024. 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 2, 2024 at 10:00 AM CT

Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061; Passcode: 5105539

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 and operates 172 properties containing 58,634 apartment homes across the United States. Upon completion of 4 properties currently under development, the Company’s portfolio will increase to 59,800 apartment homes in 176 properties. Camden has been recognized as one of the 100 Best Companies to Work For® by FORTUNE magazine for 16 consecutive years, most recently ranking #33. 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,

 

2023

2022

 

 

2023

2022

OPERATING DATA

 

 

 

 

 

 

 

 

 

 

 

Property revenues (a)

$387,587

 

$375,909

 

 

$1,542,027

 

$1,422,756

 

 

 

 

 

 

 

Property expenses

 

 

 

 

 

Property operating and maintenance

89,873

 

81,233

 

 

353,911

 

315,737

 

Real estate taxes

46,664

 

45,896

 

 

195,009

 

182,344

 

Total property expenses

136,537

 

127,129

 

 

548,920

 

498,081

 

 

 

 

 

 

 

Non-property income

 

 

 

 

 

Fee and asset management

1,078

 

931

 

 

3,451

 

5,188

 

Interest and other income

322

 

138

 

 

879

 

3,019

 

Income/(loss) on deferred compensation plans

9,981

 

8,813

 

 

15,398

 

(19,637

)

Total non-property income/(loss)

11,381

 

9,882

 

 

19,728

 

(11,430

)

 

 

 

 

 

 

Other expenses

 

 

 

 

 

Property management

8,767

 

7,373

 

 

33,706

 

28,601

 

Fee and asset management

440

 

426

 

 

1,717

 

2,516

 

General and administrative

15,744

 

15,887

 

 

62,506

 

60,413

 

Interest

33,968

 

30,668

 

 

133,395

 

113,424

 

Depreciation and amortization

144,956

 

147,271

 

 

574,813

 

577,020

 

Expense/(benefit) on deferred compensation plans

9,981

 

8,813

 

 

15,398

 

(19,637

)

Total other expenses

213,856

 

210,438

 

 

821,535

 

762,337

 

 

 

 

 

 

 

Loss on early retirement of debt

 

 

 

(2,513

)

 

Gain on sale of operating properties, including land

176,497

 

 

 

225,416

 

36,372

 

Gain on acquisition of unconsolidated joint venture interests

 

 

 

 

474,146

 

Equity in income of joint ventures

 

 

 

 

3,048

 

Income from continuing operations before income taxes

225,072

 

48,224

 

 

414,203

 

664,474

 

Income tax expense

(897

)

(753

)

 

(3,650

)

(2,966

)

Net income

224,175

 

47,471

 

 

410,553

 

661,508

 

Less income allocated to non-controlling interests

(1,845

)

(1,762

)

 

(7,244

)

(7,895

)

Net income attributable to common shareholders

$222,330

 

$45,709

 

 

$403,309

 

$653,613

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

Net income

$224,175

 

$47,471

 

 

$410,553

 

$661,508

 

Other comprehensive income

 

 

 

 

 

Unrealized loss on cash flow hedging activities

(728

)

 

 

(728

)

 

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

(183

)

489

 

 

(183

)

489

 

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

358

 

369

 

 

1,433

 

1,476

 

Comprehensive income

223,622

 

48,329

 

 

411,075

 

663,473

 

Less income allocated to non-controlling interests

(1,845

)

(1,762

)

 

(7,244

)

(7,895

)

Comprehensive income attributable to common shareholders

$221,777

 

$46,567

 

 

$403,831

 

$655,578

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

Total earnings per common share - basic

$2.04

 

$0.42

 

 

$3.71

 

$6.07

 

Total earnings per common share - diluted

2.03

 

0.42

 

 

3.70

 

6.04

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

Basic

108,698

 

108,467

 

 

108,653

 

107,605

 

Diluted

110,312

 

108,512

 

 

109,399

 

108,388

 

(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, 2023, we recognized $387.6 million of property revenue which consisted of approximately $346.0 million of rental revenue and approximately $41.6 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 $375.9 million recognized for the three months ended December 31, 2022, made up 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. For the twelve months ended December 31, 2023, we recognized $1,542.0 million of property revenue which consisted of approximately $1,374.0 million of rental revenue and approximately $168.0 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. This compares to the $1,422.8 million of property revenue recognized for the twelve months ended December 31, 2022, made up of approximately $1,266.0 million of rental revenue and approximately $156.8 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 $10.7 million and $10.0 million for the three months ended December 31, 2023 and 2022, respectively and was $42.0 million and $37.5 million for the twelve months ended December 31, 2023 and 2022, respectively.

 

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,

 

2023

2022

 

2023

2022

FUNDS FROM OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

$222,330

 

$45,709

 

 

$403,309

 

$653,613

 

Real estate depreciation and amortization

141,892

 

144,105

 

 

562,654

 

565,913

 

Adjustments for unconsolidated joint ventures

 

 

 

 

2,709

 

Income allocated to non-controlling interests

1,845

 

1,762

 

 

7,244

 

7,895

 

Gain on sale of operating properties

(176,412

)

 

 

(225,331

)

(36,372

)

Gain on acquisition of unconsolidated joint venture interests

 

 

 

 

(474,146

)

Funds from operations

$189,655

 

$191,576

 

 

$747,876

 

$719,612

 

 

 

 

 

 

 

Plus: Casualty-related expenses, net of recoveries

683

 

625

 

 

1,186

 

2,282

 

Plus: Severance

 

 

 

 

896

 

Plus: Legal costs and settlements, net of recoveries

196

 

 

 

280

 

555

 

Plus: Loss on early retirement of debt

 

 

 

2,513

 

 

Plus: Expensed development & other pursuit costs

 

 

 

471

 

 

Less: Net below market lease amortization

 

(722

)

 

 

(8,467

)

Less: Miscellaneous (income)/expense (a)

 

 

 

(364

)

(2,071

)

Core funds from operations

$190,534

 

$191,479

 

 

$751,962

 

$712,807

 

 

 

 

 

 

 

Less: recurring capitalized expenditures (b)

(31,927

)

(29,033

)

 

(97,094

)

(90,715

)

 

 

 

 

 

 

Core adjusted funds from operations

$158,607

 

$162,446

 

 

$654,868

 

$622,092

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

Funds from operations - diluted

$1.72

 

$1.74

 

 

$6.78

 

$6.59

 

Core funds from operations - diluted

1.73

 

1.74

 

 

6.82

 

6.52

 

Core adjusted funds from operations - diluted

1.44

 

1.48

 

 

5.94

 

5.69

 

Distributions declared per common share

1.00

 

0.94

 

 

4.00

 

3.76

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

FFO/Core FFO/Core AFFO - diluted

110,312

 

110,117

 

 

110,269

 

109,261

 

 

 

 

 

 

 

PROPERTY DATA

 

 

 

 

 

Total operating properties (end of period) (c)

172

 

172

 

 

172

 

172

 

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

58,634

 

58,702

 

 

58,634

 

58,702

 

Total operating apartment homes (weighted average)

59,245

 

58,621

 

 

59,068

 

56,566

 

(a)

Activity relates to proceeds from a previously sold technology investment.

(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,

2023

Sep 30,

2023

Jun 30,

2023

Mar 31,

2023

Dec 31,

2022

ASSETS

 

 

 

 

 

Real estate assets, at cost

 

 

 

 

 

Land

$1,711,873

 

$1,732,804

 

$1,727,182

 

$1,722,881

 

$1,716,273

 

Buildings and improvements

10,993,390

 

10,963,667

 

10,848,837

 

10,778,795

 

10,674,619

 

 

12,705,263

 

12,696,471

 

12,576,019

 

12,501,676

 

12,390,892

 

Accumulated depreciation

(4,332,524

)

(4,254,388

)

(4,113,095

)

(3,987,438

)

(3,848,111

)

Net operating real estate assets

8,372,739

 

8,442,083

 

8,462,924

 

8,514,238

 

8,542,781

 

Properties under development, including land

486,864

 

499,761

 

516,543

 

515,134

 

524,981

 

Total real estate assets

8,859,603

 

8,941,844

 

8,979,467

 

9,029,372

 

9,067,762

 

Accounts receivable – affiliates

11,905

 

12,057

 

12,121

 

12,121

 

13,364

 

Other assets, net (a)

244,182

 

237,594

 

239,958

 

226,394

 

229,371

 

Cash and cash equivalents

259,686

 

14,600

 

20,326

 

20,419

 

10,687

 

Restricted cash

8,361

 

8,369

 

8,531

 

6,863

 

6,751

 

Total assets

$9,383,737

 

$9,214,464

 

$9,260,403

 

$9,295,169

 

$9,327,935

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Liabilities

 

 

 

 

 

Notes payable

 

 

 

 

 

Unsecured

$3,385,309

 

$3,323,057

 

$3,352,415

 

$3,232,682

 

$3,165,924

 

Secured

330,127

 

330,071

 

330,015

 

515,134

 

514,989

 

Accounts payable and accrued expenses

222,599

 

211,759

 

192,613

 

191,468

 

211,370

 

Accrued real estate taxes

96,517

 

128,794

 

93,642

 

48,084

 

95,551

 

Distributions payable

110,427

 

110,463

 

110,465

 

110,444

 

103,628

 

Other liabilities (b)

186,987

 

175,341

 

189,711

 

193,804

 

179,552

 

Total liabilities

4,331,966

 

4,279,485

 

4,268,861

 

4,291,616

 

4,271,014

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Common shares of beneficial interest

1,156

 

1,156

 

1,156

 

1,156

 

1,156

 

Additional paid-in capital

5,914,868

 

5,911,627

 

5,907,828

 

5,903,437

 

5,897,454

 

Distributions in excess of net income attributable to common shareholders

(613,651

)

(727,117

)

(666,218

)

(648,457

)

(581,532

)

Treasury shares

(320,364

)

(320,702

)

(320,675

)

(321,431

)

(328,684

)

Accumulated other comprehensive loss (c)

(1,252

)

(699

)

(1,057

)

(1,415

)

(1,774

)

Total common equity

4,980,757

 

4,864,265

 

4,921,034

 

4,933,290

 

4,986,620

 

Non-controlling interests

71,014

 

70,714

 

70,508

 

70,263

 

70,301

 

Total equity

5,051,771

 

4,934,979

 

4,991,542

 

5,003,553

 

5,056,921

 

Total liabilities and equity

$9,383,737

 

$9,214,464

 

$9,260,403

 

$9,295,169

 

$9,327,935

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Includes net deferred charges of:

$5,879

 

$6,481

 

$7,033

 

$7,710

 

$8,413

 

 

 

 

 

 

 

(b) Includes deferred revenues of:

$1,030

 

$1,167

 

$1,239

 

$1,348

 

$304

 

 

 

 

 

 

 

(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.

Core FFO

Core FFO represents FFO as further adjusted for items not considered part of our core business operations, such as casualty-related expenses, net of (recoveries), severance, legal costs and settlements, net of recoveries, loss on early retirement of debt, expensed development and other pursuit costs, net below market lease amortization, and miscellaneous (income)/expense adjustments. We consider Core FFO to be a helpful supplemental measure of operating performance as it excludes not only depreciation expense of real estate assets, but it also excludes certain items which by their nature are not comparable period over period and therefore tends to obscure actual operating performance. Our definition of Core FFO may differ from other REITs, and there can be no assurance our basis for computing this measure is comparable to other REITs.

Core Adjusted FFO

In addition to FFO & Core FFO, we compute Core Adjusted FFO ("Core AFFO") as a supplemental measure of operating performance. Core AFFO is calculated utilizing Core 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 Core FFO and Core AFFO is provided below:

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

2023

2022

 

2023

2022

Net income attributable to common shareholders

$222,330

 

$45,709

 

 

$403,309

 

$653,613

 

Real estate depreciation and amortization

141,892

 

144,105

 

 

562,654

 

565,913

 

Adjustments for unconsolidated joint ventures

 

 

 

 

2,709

 

Income allocated to non-controlling interests

1,845

 

1,762

 

 

7,244

 

7,895

 

Gain on sale of operating properties

(176,412

)

 

 

(225,331

)

(36,372

)

Gain on acquisition of unconsolidated joint venture interests

 

 

 

 

(474,146

)

Funds from operations

$189,655

 

$191,576

 

 

$747,876

 

$719,612

 

 

 

 

 

 

 

Plus: Casualty-related expenses, net of recoveries

683

 

625

 

 

1,186

 

2,282

 

Plus: Severance

 

 

 

 

896

 

Plus: Legal costs and settlements, net of recoveries

196

 

 

 

280

 

555

 

Plus: Loss on early retirement of debt

 

 

 

2,513

 

 

Plus: Expensed development & other pursuit costs

 

 

 

471

 

 

Less: Net below market lease amortization

 

(722

)

 

 

(8,467

)

Less: Miscellaneous (income)/expense (a)

 

 

 

(364

)

(2,071

)

Core funds from operations

$190,534

 

$191,479

 

 

$751,962

 

$712,807

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

(31,927

)

(29,033

)

 

(97,094

)

(90,715

)

 

 

 

 

 

 

Core adjusted funds from operations

$158,607

 

$162,446

 

 

$654,868

 

$622,092

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

EPS diluted

110,312

 

108,512

 

 

109,399

 

108,388

 

FFO/Core FFO/ Core AFFO diluted

110,312

 

110,117

 

 

110,269

 

109,261

 

a) Activity relates to proceeds from an earn-out from a previously sold technology investment

CAMDEN

NON-GAAP FINANCIAL MEASURES

(In thousands, except per share amounts)

 

(Unaudited)

 

Reconciliation of FFO, Core FFO, and Core AFFO per share

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

2023

2022

 

2023

2022

Total Earnings Per Common Share - Diluted

$2.03

 

$0.42

 

 

$3.70

 

$6.04

 

Real estate depreciation and amortization

1.28

 

1.31

 

 

5.07

 

5.15

 

Adjustments for unconsolidated joint ventures

 

 

 

 

0.02

 

Income allocated to non-controlling interests

0.01

 

0.01

 

 

0.05

 

0.05

 

Gain on sale of operating property

(1.60

)

 

 

(2.04

)

(0.33

)

Gain on acquisition of unconsolidated joint venture interests

 

 

 

 

(4.34

)

FFO per common share - Diluted

$1.72

 

$1.74

 

 

$6.78

 

$6.59

 

 

 

 

 

 

 

Plus: Casualty-related expenses, net of recoveries

0.01

 

0.01

 

 

0.01

 

0.02

 

Plus: Severance

 

 

 

 

0.01

 

Plus: Legal costs and settlements, net of recoveries

 

 

 

 

 

Plus: Loss on early retirement of debt

 

 

 

0.03

 

 

Plus: Expensed development & other pursuit costs

 

 

 

 

 

Less: Net below market lease amortization

 

(0.01

)

 

 

(0.08

)

Less: Miscellaneous (income)/expense (a)

 

 

 

 

(0.02

)

Core FFO per common share - Diluted

$1.73

 

$1.74

 

 

$6.82

 

$6.52

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

(0.29

)

(0.26

)

 

(0.88

)

(0.83

)

 

 

 

 

 

 

Core AFFO per common share - Diluted

$1.44

 

$1.48

 

 

$5.94

 

$5.69

 

Expected FFO & Core FFO

Expected FFO and Core FFO is calculated in a method consistent with historical FFO and Core FFO, and is considered appropriate supplemental measures of expected operating performance when compared to expected earnings per common share (EPS). A reconciliation of the ranges provided for diluted EPS to expected FFO and expected Core FFO per diluted share is provided below:

 

1Q24 Range

 

2024 Range

 

Low

High

 

Low

High

Expected earnings per common share - diluted

$0.74

 

$0.78

 

 

$1.72

 

$2.02

 

Expected real estate depreciation and amortization

1.28

 

1.28

 

 

5.17

 

5.17

 

Expected income allocated to non-controlling interests

0.01

 

0.01

 

 

0.06

 

0.06

 

Expected (gain) on sale of operating properties

(0.41

)

(0.41

)

 

(0.41

)

(0.41

)

Expected FFO per share - diluted

$1.62

 

$1.66

 

 

$6.54

 

$6.84

 

Anticipated Adjustments to FFO

0.03

 

0.03

 

 

0.05

 

0.05

 

Expected Core FFO per share - diluted

$1.65

 

$1.69

 

 

$6.59

 

$6.89

 

 

 

 

 

 

 

Note: This table contains forward-looking statements. Please see 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 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. Our definition of NOI 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 net income to net operating income is provided below:

 

Three months ended December 31,

 

Twelve months ended December 31,

 

2023

2022

 

2023

2022

Net income

$224,175

 

$47,471

 

 

$410,553

 

$661,508

 

Less: Fee and asset management income

(1,078

)

(931

)

 

(3,451

)

(5,188

)

Less: Interest and other income

(322

)

(138

)

 

(879

)

(3,019

)

Less: Income/(loss) on deferred compensation plans

(9,981

)

(8,813

)

 

(15,398

)

19,637

 

Plus: Property management expense

8,767

 

7,373

 

 

33,706

 

28,601

 

Plus: Fee and asset management expense

440

 

426

 

 

1,717

 

2,516

 

Plus: General and administrative expense

15,744

 

15,887

 

 

62,506

 

60,413

 

Plus: Interest expense

33,968

 

30,668

 

 

133,395

 

113,424

 

Plus: Depreciation and amortization expense

144,956

 

147,271

 

 

574,813

 

577,020

 

Plus: Expense/(benefit) on deferred compensation plans

9,981

 

8,813

 

 

15,398

 

(19,637

)

Plus: Loss on early retirement of debt

 

 

 

2,513

 

 

Less: Gain on sale of operating properties, including land

(176,497

)

 

 

(225,416

)

(36,372

)

Less: Gain on acquisition of unconsolidated joint venture interests

 

 

 

 

(474,146

)

Less: Equity in income of joint ventures

 

 

 

 

(3,048

)

Plus: Income tax expense

897

 

753

 

 

3,650

 

2,966

 

NOI

$251,050

 

$248,780

 

 

$993,107

 

$924,675

 

 

 

 

 

 

 

"Same Property" Communities

$202,942

 

$202,930

 

 

$804,175

 

$770,987

 

Non-"Same Property" Communities

41,983

 

39,753

 

 

163,983

 

123,942

 

Development and Lease-Up Communities

1,262

 

25

 

 

2,615

 

28

 

Disposition/Other

4,863

 

6,072

 

 

22,334

 

29,718

 

NOI

$251,050

 

$248,780

 

 

$993,107

 

$924,675

 

CAMDEN

 

NON-GAAP FINANCIAL MEASURES

 

 

DEFINITIONS & RECONCILIATIONS

 

 

(In thousands, except per share amounts)

 

 

 

(Unaudited)

EBITDAre and Adjusted EBITDAre

Earnings Before Interest, Taxes, Depreciation, and Amortization for Real Estate (“EBITDAre”) and Adjusted EBITDAre are supplemental measures of our financial performance. EBITDAre is calculated in accordance with the definition adopted by NAREIT as earnings before interest, taxes, depreciation and amortization plus or minus losses and gains on the disposition of depreciated property, including gains (losses) on change of control, plus impairment write-downs of depreciated property with adjustments to reflect the Company’s share of EBITDAre of unconsolidated joint ventures.

Adjusted EBITDAre represents EBITDAre as further adjusted for non-core items. Adjusted EBITDAre excludes equity in (income) loss of joint ventures, (gain) loss on land, and loss on early retirement of debt. The Company considers EBITDAre and Adjusted EBITDAre to be appropriate supplemental measures of operating performance to net income because it represents income before non-cash depreciation and the cost of debt, and excludes gains or losses from property dispositions. Annualized Adjusted EBITDAre is Adjusted EBITDAre as reported for the period multiplied by 4 for quarter results. A reconciliation of net income to EBITDAre and adjusted EBITDAre is provided below:

 

Three months ended December 31,

 

Twelve months ended December 31,

 

2023

2022

 

2023

2022

Net income

$224,175

 

$47,471

 

 

$410,553

 

$661,508

 

Plus: Interest expense

33,968

 

30,668

 

 

133,395

 

113,424

 

Plus: Depreciation and amortization expense

144,956

 

147,271

 

 

574,813

 

577,020

 

Plus: Income tax expense

897

 

753

 

 

3,650

 

2,966

 

Less: Gain on sale of operating properties, including land

(176,497

)

 

 

(225,416

)

(36,372

)

Less: Gain on acquisition of unconsolidated joint venture interests

 

 

 

 

(474,146

)

EBITDAre

$227,499

 

$226,163

 

 

$896,995

 

$844,400

 

Plus: Loss on early retirement of debt

 

 

 

2,513

 

 

Plus: Casualty-related expenses, net of recoveries

683

 

625

 

 

1,186

 

2,282

 

Plus: Severance

 

 

 

 

896

 

Plus: Legal costs and settlements, net of recoveries

196

 

 

 

280

 

555

 

Plus: Expensed development & other pursuit costs

 

 

 

471

 

 

Less: Equity in income of joint ventures

 

 

 

 

(3,048

)

Less: Net below market lease amortization

 

(722

)

 

 

(8,467

)

Less: Miscellaneous (income)/expense (a)

 

 

 

(364

)

(2,071

)

Adjusted EBITDAre

$228,378

 

$226,066

 

 

$901,081

 

$834,547

 

Annualized Adjusted EBITDAre

$913,512

 

$904,264

 

 

$901,081

 

$834,547

 

Net Debt to Annualized Adjusted EBITDAre

The Company believes Net Debt to Annualized Adjusted EBITDAre 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 EBITDAre 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,

 

 

 

2023

2022

 

2023

2022

Unsecured notes payable

 

 

$3,394,948

 

$3,188,976

 

 

$3,350,767

 

$3,242,448

 

Secured notes payable

 

 

330,108

 

514,940

 

 

391,745

 

386,096

 

Total debt

 

 

3,725,056

 

3,703,916

 

 

3,742,512

 

3,628,544

 

Less: Cash and cash equivalents

 

 

(95,392

)

(3,562

)

 

(30,257

)

(186,178

)

Net debt

 

 

$3,629,664

 

$3,700,354

 

 

$3,712,255

 

$3,442,366

 

Net Debt to Annualized Adjusted EBITDAre:

 

 

 

Three months ended December 31,

 

Twelve months ended December 31,

 

 

 

2023

2022

 

2023

2022

Net debt

 

 

$3,629,664

$3,700,354

 

$3,712,255

$3,442,366

Annualized Adjusted EBITDAre

 

 

913,512

904,264

 

901,081

834,547

Net Debt to Annualized Adjusted EBITDAre

 

 

4.0x

4.1x

 

4.1x

4.1x

CAMDEN

2024 FINANCIAL OUTLOOK

AS OF FEBRUARY 1, 2024

(Unaudited)

 

 

 

 

Earnings Guidance - Per Diluted Share

 

 

 

Expected FFO per share - diluted

 

 

$6.54 - $6.84

Expected CORE FFO per share - diluted

 

 

$6.59 - $6.89

 

 

 

 

"Same Property" Communities

 

 

 

Number of Units - 2024

 

 

55,866

2023 Base Net Operating Income

 

 

$933 million

Total Revenue Growth

 

 

0.50% - 2.50%

Total Expense Growth

 

 

3.75% - 5.25%

Net Operating Income Growth

 

 

(1.50%) - 1.50%

Impact from 1.0% change in NOI Growth is approximately $0.084 / share

 

 

 

Bad Debt Midpoint

 

 

1.1%

 

 

 

 

Capitalized Expenditures

 

 

 

Recurring

 

 

$101 - $105 million

Revenue Enhancing Capex and Repositions (a)

 

 

$90 - $94 million

Non - Recurring Capital Expenditures

 

 

$23 - $25 million

 

 

 

 

Acquisitions/Dispositions

 

 

 

Acquisition Volume (consolidated on balance sheet)

 

 

$0 - $500 million

Disposition Volume (consolidated on balance sheet)

 

 

$115 - $615 million

 

 

 

 

Development

 

 

 

Development Starts (consolidated on balance sheet)

 

 

$0 - $300 million

Development Spend (consolidated on balance sheet)

 

 

$160 - $190 million

 

 

 

 

Non-Property Income

 

 

 

Non-Property Income

 

 

$7 - $8 million

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

 

 

 

 

 

 

 

CORE Corporate Expenses

 

 

 

General and Administrative Expenses

 

 

$61 - $65 million

Property Management Expense

 

 

$34 - $37 million

Fee and Asset Management Expense

 

 

$1 - $2 million

Corporate G&A Depreciation/Amortization

 

 

$11 - $14 million

Income Tax Expense

 

 

$3 - $4 million

Non-CORE Corporate Expenses / Insurance Adjustments

 

 

$5 - $6 million

 

 

 

 

Capital

 

 

 

Expensed Interest

 

 

$124 - $128 million

Capitalized Interest

 

 

$17 - $18 million

(a) Revenue Enhancing Capex and Repositions are capital expenditures that improve a community's cash flow and competitive position, typically kitchen and bath upgrades, or other new amenities.

 

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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