Camden Property Trust Announces Second Quarter 2023 Operating Results

Camden Property Trust (NYSE:CPT) (the "Company") announced today operating results for the three and six months ended June 30, 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 six months ended June 30, 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

Six Months Ended

 

June 30,

June 30,

Per Diluted Share

2023

2022

2023

2022

EPS

$0.84

$4.54

$1.22

$5.37

FFO

$1.67

$1.64

$3.33

$3.14

Core FFO

$1.70

$1.61

$3.36

$3.10

Core AFFO

$1.51

$1.42

$3.01

$2.77

 

Three Months Ended

2Q23 Guidance

2Q23 Guidance

Per Diluted Share

June 30, 2023

Midpoint

Variance

EPS(1)

$0.84

$0.38

$0.46

FFO(1)

$1.67

$1.66

$0.01

Core FFO

$1.70

$1.68

$0.02

(1) 2Q23 EPS and FFO guidance adjusted to reflect $0.02 impact from retirement of secured variable rate debt previously announced on May 31, 2023.

 

Quarterly Growth

Sequential Growth

Year-To-Date Growth

Same Property Results

2Q23 vs. 2Q22

2Q23 vs. 1Q23

2023 vs. 2022

Revenues

6.1%

1.5%

7.0%

Expenses

5.8%

0.9%

6.8%

Net Operating Income ("NOI")

6.2%

1.8%

7.1%

Same Property Results

2Q23

2Q22

1Q23

Occupancy

95.4%

96.8%

95.3%

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)

July 2023*

July 2022

2Q23

2Q22

Signed New Lease Rates

1.6%

13.0%

2.2%

16.2%

Signed Renewal Rates

5.2%

12.6%

5.9%

14.4%

Signed Blended Lease Rates

3.4%

12.8%

4.1%

15.2%

New Lease and Renewal Data - Date Effective (2)

July 2023*

July 2022

2Q23

2Q22

Effective New Lease Rates

2.0%

15.3%

2.2%

15.1%

Effective Renewal Rates

6.3%

14.5%

6.3%

13.2%

Effective Blended Lease Rates

4.1%

14.9%

4.0%

14.2%

*Data as of July 31, 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

July 2023*

July 2022

2Q23

2Q22

Occupancy

95.6%

96.7%

95.4%

96.8%

Annualized Gross Turnover

61%

63%

54%

54%

Annualized Net Turnover

50%

54%

44%

47%

*Data as of July 31, 2023

Development Activity

During the quarter, construction was completed at Camden Tempe II in Tempe, AZ and lease-up was completed subsequent to quarter end. Additionally, leasing continued at Camden NoDa in Charlotte, NC.

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

 

 

Total

Total

% Leased

Community Name

Location

Homes

Cost

as of 7/31/2023

Camden Tempe II

Tempe, AZ

397

$106.5

95%

Development Communities - Construction Ongoing ($ in millions)

 

 

Total

Total

% Leased

Community Name

Location

Homes

Estimated Cost

as of 7/31/2023

Camden NoDa

Charlotte, NC

387

$108.0

64%

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

 

1,553

$546.0

 

Disposition Activity

During the quarter, the Company disposed of a 138-apartment home community in Costa Mesa, CA for approximately $61.1 million and recognized a gain of approximately $48.9 million.

Liquidity Analysis

As of June 30, 2023, Camden had approximately $725.5 million of liquidity comprised of approximately $20.3 million in cash and cash equivalents, and $705.2 million of availability under its unsecured credit facility. At quarter-end, the Company had $212.3 million left to fund under its existing wholly-owned development pipeline.

Capital Market Transactions

During the quarter, the Company utilized its unsecured revolving credit facility to retire approximately $185.2 million of secured variable rate debt and recognized charges in conjunction with this early retirement of debt of approximately $2.5 million. Also during the quarter, the Company retired its 5.07% $250.0 million senior note payable which matured in June 2023.

Earnings Guidance

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

 

3Q23

2023

2023 Midpoint

Per Diluted Share

Range

Range

Current

Prior

Change

EPS(1)

$0.41 - $0.45

$2.07 - $2.17

$2.12

$1.67

$0.45

FFO(1)

$1.71 - $1.75

$6.80 - $6.90

$6.85

$6.84

$0.01

Core FFO

$1.71 - $1.75

$6.83 - $6.93

$6.88

$6.86

$0.02

(1) Prior EPS and FFO guidance adjusted to reflect $0.02 impact from retirement of secured variable rate debt previously announced on May 31, 2023.

 

 

2023

Updated Same Property Growth Guidance

 

Range

Midpoint

Prior

Change

Revenues

 

5.15% - 6.15%

5.65%

5.65%

—%

Expenses

 

6.35% - 7.35%

6.85%

6.85%

—%

NOI

 

4.00% - 6.00%

5.00%

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 and expected Core FFO are included in the financial tables accompanying this press release.

Conference Call

Friday, August 4, 2023 at 10:00 AM CT

Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061; Passcode: 6722168

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 58,961 apartment homes across the United States. Upon completion of 5 properties currently under development, the Company’s portfolio will increase to 60,514 apartment homes in 177 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 June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

2022

 

 

 

2023

 

 

2022

 

OPERATING DATA

 

 

 

 

 

 

 

 

 

 

 

Property revenues (a)

$

385,499

 

$

361,716

 

 

$

763,662

 

$

673,075

 

 

 

 

 

 

 

Property expenses

 

 

 

 

 

Property operating and maintenance

 

87,742

 

 

79,418

 

 

 

173,027

 

 

149,855

 

Real estate taxes

 

49,855

 

 

48,393

 

 

 

99,251

 

 

88,266

 

Total property expenses

 

137,597

 

 

127,811

 

 

 

272,278

 

 

238,121

 

 

 

 

 

 

 

Non-property income

 

 

 

 

 

Fee and asset management

 

718

 

 

1,190

 

 

 

1,296

 

 

3,640

 

Interest and other income

 

431

 

 

662

 

 

 

493

 

 

2,793

 

Income/(loss) on deferred compensation plans

 

2,844

 

 

(14,678

)

 

 

8,756

 

 

(22,175

)

Total non-property income/(loss)

 

3,993

 

 

(12,826

)

 

 

10,545

 

 

(15,742

)

 

 

 

 

 

 

Other expenses

 

 

 

 

 

Property management

 

8,751

 

 

7,282

 

 

 

17,048

 

 

14,496

 

Fee and asset management

 

420

 

 

359

 

 

 

833

 

 

1,534

 

General and administrative

 

15,863

 

 

15,734

 

 

 

31,219

 

 

30,524

 

Interest

 

33,578

 

 

29,022

 

 

 

66,421

 

 

53,564

 

Depreciation and amortization

 

143,054

 

 

157,734

 

 

 

285,498

 

 

270,872

 

Expense/(benefit) on deferred compensation plans

 

2,844

 

 

(14,678

)

 

 

8,756

 

 

(22,175

)

Total other expenses

 

204,510

 

 

195,453

 

 

 

409,775

 

 

348,815

 

 

 

 

 

 

 

Loss on early retirement of debt

 

(2,513

)

 

 

 

 

(2,513

)

 

 

Gain on sale of operating property

 

48,919

 

 

 

 

 

48,919

 

 

36,372

 

Gain on acquisition of unconsolidated joint venture interests

 

 

 

474,146

 

 

 

 

 

474,146

 

Equity in income of joint ventures

 

 

 

 

 

 

 

 

3,048

 

Income from continuing operations before income taxes

 

93,791

 

 

499,772

 

 

 

138,560

 

 

583,963

 

Income tax expense

 

(851

)

 

(886

)

 

 

(2,001

)

 

(1,476

)

Net income

 

92,940

 

 

498,886

 

 

 

136,559

 

 

582,487

 

Less income allocated to non-controlling interests

 

(1,841

)

 

(1,571

)

 

 

(3,543

)

 

(4,427

)

Net income attributable to common shareholders

$

91,099

 

$

497,315

 

 

$

133,016

 

$

578,060

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

 

 

 

 

 

Net income

$

92,940

 

$

498,886

 

 

$

136,559

 

$

582,487

 

Other comprehensive income

 

 

 

 

 

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

 

358

 

 

369

 

 

 

717

 

 

738

 

Comprehensive income

 

93,298

 

 

499,255

 

 

 

137,276

 

 

583,225

 

Less income allocated to non-controlling interests

 

(1,841

)

 

(1,571

)

 

 

(3,543

)

 

(4,427

)

Comprehensive income attributable to common shareholders

$

91,457

 

$

497,684

 

 

$

133,733

 

$

578,798

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

Total earnings per common share - basic

$

0.84

 

$

4.59

 

 

$

1.22

 

$

5.41

 

Total earnings per common share - diluted

 

0.84

 

 

4.54

 

 

 

1.22

 

 

5.37

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

Basic

 

108,663

 

 

108,106

 

 

 

108,616

 

 

106,729

 

Diluted

 

109,392

 

 

109,745

 

 

 

108,636

 

 

108,393

 

(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 June 30, 2023, we recognized $385.5 million of property revenue which consisted of approximately $343.1 million of rental revenue and approximately $42.4 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. This compares to property revenue of $361.7 million recognized for the three months ended June 30, 2022, made up of approximately $320.9 million of rental revenue and approximately $40.8 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. For the six months ended June 30, 2023, we recognized $763.7 million of property revenue which consisted of approximately $680.3 million of rental revenue and approximately $83.4 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. This compares to the $673.1 million of property revenue recognized for the six months ended June 30, 2022, made up of approximately $597.9 million of rental revenue and approximately $75.2 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 $10.3 million and $9.4 million for the three months ended June 30, 2023 and 2022, respectively and was $20.8 million and $17.7 million for the six months ended June 30, 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 June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

2022

 

 

 

2023

 

 

2022

 

FUNDS FROM OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

$

91,099

 

$

497,315

 

 

$

133,016

 

$

578,060

 

Real estate depreciation and amortization

 

140,013

 

 

155,206

 

 

 

279,400

 

 

265,743

 

Adjustments for unconsolidated joint ventures

 

 

 

 

 

 

 

 

2,709

 

Income allocated to non-controlling interests

 

1,841

 

 

1,571

 

 

 

3,543

 

 

4,427

 

Gain on sale of operating property

 

(48,919

)

 

 

 

 

(48,919

)

 

(36,372

)

Gain on acquisition of unconsolidated joint venture interests

 

 

 

(474,146

)

 

 

 

 

(474,146

)

Funds from operations

$

184,034

 

$

179,946

 

 

$

367,040

 

$

340,421

 

 

 

 

 

 

 

Plus: Casualty-related expenses, net of recoveries

 

981

 

 

251

 

 

 

939

 

 

251

 

Plus: Severance

 

 

 

 

 

 

 

 

896

 

Plus: Legal costs and settlements

 

 

 

555

 

 

 

84

 

 

555

 

Plus: Loss on early retirement of debt

 

2,513

 

 

 

 

 

2,513

 

 

 

Plus: Expensed development & other pursuit costs

 

471

 

 

 

 

 

471

 

 

 

Less: Net below market lease amortization

 

 

 

(3,442

)

 

 

 

 

(4,303

)

Less: Miscellaneous (income)/expense (a)

 

(364

)

 

(194

)

 

 

(364

)

 

(2,071

)

Core funds from operations

$

187,635

 

$

177,116

 

 

$

370,683

 

$

335,749

 

 

 

 

 

 

 

Less: recurring capitalized expenditures (b)

 

(21,034

)

 

(21,430

)

 

 

(38,613

)

 

(35,681

)

 

 

 

 

 

 

Core adjusted funds from operations

$

166,601

 

$

155,686

 

 

$

332,070

 

$

300,068

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

Funds from operations - diluted

$

1.67

 

$

1.64

 

 

$

3.33

 

$

3.14

 

Core funds from operations - diluted

 

1.70

 

 

1.61

 

 

 

3.36

 

 

3.10

 

Core adjusted funds from operations - diluted

 

1.51

 

 

1.42

 

 

 

3.01

 

 

2.77

 

Distributions declared per common share

 

1.00

 

 

0.94

 

 

 

2.00

 

 

1.88

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

FFO/Core FFO/Core AFFO - diluted

 

110,262

 

 

109,745

 

 

 

110,232

 

 

108,393

 

 

 

 

 

 

 

PROPERTY DATA

 

 

 

 

 

Total operating properties (end of period) (c)

 

172

 

 

171

 

 

 

172

 

 

171

 

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

 

58,961

 

 

58,425

 

 

 

58,961

 

 

58,425

 

Total operating apartment homes (weighted average)

 

59,039

 

 

58,282

 

 

 

58,938

 

 

54,608

 

(a)

Activity relates to proceeds from an earn-out 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)

 

 

 

Jun 30,

2023

 

 

Mar 31,

2023

 

 

Dec 31,

2022

 

 

Sep 30,

2022

 

 

Jun 30,

2022

 

ASSETS

 

 

 

 

 

Real estate assets, at cost

 

 

 

 

 

Land

$

1,727,182

 

$

1,722,881

 

$

1,716,273

 

$

1,706,396

 

$

1,695,118

 

Buildings and improvements

 

10,848,837

 

 

10,778,795

 

 

10,674,619

 

 

10,574,820

 

 

10,440,037

 

 

 

12,576,019

 

 

12,501,676

 

 

12,390,892

 

 

12,281,216

 

 

12,135,155

 

Accumulated depreciation

 

(4,113,095

)

 

(3,987,438

)

 

(3,848,111

)

 

(3,709,487

)

 

(3,572,764

)

Net operating real estate assets

 

8,462,924

 

 

8,514,238

 

 

8,542,781

 

 

8,571,729

 

 

8,562,391

 

Properties under development, including land

 

516,543

 

 

515,134

 

 

524,981

 

 

529,076

 

 

581,844

 

Total real estate assets

 

8,979,467

 

 

9,029,372

 

 

9,067,762

 

 

9,100,805

 

 

9,144,235

 

Accounts receivable – affiliates

 

12,121

 

 

12,121

 

 

13,364

 

 

13,258

 

 

13,258

 

Other assets, net (a)

 

239,958

 

 

226,394

 

 

229,371

 

 

231,645

 

 

249,865

 

Cash and cash equivalents

 

20,326

 

 

20,419

 

 

10,687

 

 

62,027

 

 

72,095

 

Restricted cash

 

8,531

 

 

6,863

 

 

6,751

 

 

6,390

 

 

6,563

 

Total assets

$

9,260,403

 

$

9,295,169

 

$

9,327,935

 

$

9,414,125

 

$

9,486,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Liabilities

 

 

 

 

 

Notes payable

 

 

 

 

 

Unsecured

$

3,352,415

 

$

3,232,682

 

$

3,165,924

 

$

3,173,198

 

$

3,222,252

 

Secured

 

330,015

 

 

515,134

 

 

514,989

 

 

514,843

 

 

514,698

 

Accounts payable and accrued expenses

 

192,613

 

 

191,468

 

 

211,370

 

 

212,558

 

 

195,070

 

Accrued real estate taxes

 

93,642

 

 

48,084

 

 

95,551

 

 

125,210

 

 

86,952

 

Distributions payable

 

110,465

 

 

110,444

 

 

103,628

 

 

103,620

 

 

103,621

 

Other liabilities (b)

 

189,711

 

 

193,804

 

 

179,552

 

 

176,334

 

 

186,143

 

Total liabilities

 

4,268,861

 

 

4,291,616

 

 

4,271,014

 

 

4,305,763

 

 

4,308,736

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Common shares of beneficial interest

 

1,156

 

 

1,156

 

 

1,156

 

 

1,156

 

 

1,156

 

Additional paid-in capital

 

5,907,828

 

 

5,903,437

 

 

5,897,454

 

 

5,893,623

 

 

5,890,792

 

Distributions in excess of net income attributable to common shareholders

 

(666,218

)

 

(648,457

)

 

(581,532

)

 

(525,127

)

 

(452,865

)

Treasury shares

 

(320,675

)

 

(321,431

)

 

(328,684

)

 

(329,027

)

 

(328,975

)

Accumulated other comprehensive loss (c)

 

(1,057

)

 

(1,415

)

 

(1,774

)

 

(2,632

)

 

(3,001

)

Total common equity

 

4,921,034

 

 

4,933,290

 

 

4,986,620

 

 

5,037,993

 

 

5,107,107

 

Non-controlling interests

 

70,508

 

 

70,263

 

 

70,301

 

 

70,369

 

 

70,173

 

Total equity

 

4,991,542

 

 

5,003,553

 

 

5,056,921

 

 

5,108,362

 

 

5,177,280

 

Total liabilities and equity

$

9,260,403

 

$

9,295,169

 

$

9,327,935

 

$

9,414,125

 

$

9,486,016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Includes net deferred charges of:

$

7,033

 

$

7,710

 

$

8,413

 

$

8,961

 

$

307

 

 

 

 

 

 

 

(b) Includes deferred revenues of:

$

1,239

 

$

1,348

 

$

304

 

$

331

 

$

358

 

 

 

 

 

 

 

(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, 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 June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

2022

 

 

 

2023

 

 

2022

 

Net income attributable to common shareholders

$

91,099

 

$

497,315

 

 

$

133,016

 

$

578,060

 

Real estate depreciation and amortization

 

140,013

 

 

155,206

 

 

 

279,400

 

 

265,743

 

Adjustments for unconsolidated joint ventures

 

 

 

 

 

 

 

 

2,709

 

Income allocated to non-controlling interests

 

1,841

 

 

1,571

 

 

 

3,543

 

 

4,427

 

Gain on sale of operating property

 

(48,919

)

 

 

 

 

(48,919

)

 

(36,372

)

Gain on acquisition of unconsolidated joint venture interests

 

 

 

(474,146

)

 

 

 

 

(474,146

)

Funds from operations

$

184,034

 

$

179,946

 

 

$

367,040

 

$

340,421

 

 

 

 

 

 

 

Plus: Casualty-related expenses, net of recoveries

 

981

 

 

251

 

 

 

939

 

 

251

 

Plus: Severance

 

 

 

 

 

 

 

 

896

 

Plus: Legal costs and settlements

 

 

 

555

 

 

 

84

 

 

555

 

Plus: Loss on early retirement of debt

 

2,513

 

 

 

 

 

2,513

 

 

 

Plus: Expensed development & other pursuit costs

 

471

 

 

 

 

 

471

 

 

 

Less: Net below market lease amortization

 

 

 

(3,442

)

 

 

 

 

(4,303

)

Less: Miscellaneous (income)/expense (a)

 

(364

)

 

(194

)

 

 

(364

)

 

(2,071

)

Core funds from operations

$

187,635

 

$

177,116

 

 

$

370,683

 

$

335,749

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

 

(21,034

)

 

(21,430

)

 

 

(38,613

)

 

(35,681

)

 

 

 

 

 

 

Core adjusted funds from operations

$

166,601

 

$

155,686

 

 

$

332,070

 

$

300,068

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

EPS diluted

 

109,392

 

 

109,745

 

 

 

108,636

 

 

108,393

 

FFO/Core FFO/ Core AFFO diluted

 

110,262

 

 

109,745

 

 

 

110,232

 

 

108,393

 

a)

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

 

 

CAMDEN

NON-GAAP FINANCIAL MEASURES

DEFINITIONS & RECONCILIATIONS

(In thousands, except per share amounts)

 

(Unaudited)

 
 

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

 

 

Three Months Ended June 30,

 

Three Months Ended March 31,

 

 

2023

 

 

2022

 

 

 

2023

 

 

2022

 

Total Earnings Per Common Share - Diluted

$

0.84

 

$

4.54

 

 

$

1.22

 

$

5.37

 

Real estate depreciation and amortization

 

1.26

 

 

1.41

 

 

 

2.52

 

 

2.45

 

Adjustments for unconsolidated joint ventures

 

 

 

 

 

 

 

 

0.02

 

Income allocated to non-controlling interests

 

0.01

 

 

0.01

 

 

 

0.03

 

 

0.01

 

Gain on sale of operating property

 

(0.44

)

 

 

 

 

(0.44

)

 

(0.34

)

Gain on acquisition of unconsolidated joint venture interests

 

 

 

(4.32

)

 

 

 

 

(4.37

)

FFO per common share - Diluted

$

1.67

 

$

1.64

 

 

$

3.33

 

$

3.14

 

 

 

 

 

 

 

Plus: Casualty-related expenses, net of recoveries

 

0.01

 

 

 

 

 

0.01

 

 

 

Plus: Severance

 

 

 

 

 

 

 

 

0.01

 

Plus: Legal costs and settlements

 

 

 

 

 

 

 

 

0.01

 

Plus: Loss on early retirement of debt

 

0.02

 

 

 

 

 

0.02

 

 

 

Plus: Expensed development & other pursuit costs

 

 

 

 

 

 

 

 

 

Less: Net below market lease amortization

 

 

 

(0.03

)

 

 

 

 

(0.04

)

Less: Miscellaneous (income)/expense (a)

 

 

 

 

 

 

 

 

(0.02

)

Core FFO per common share - Diluted

$

1.70

 

$

1.61

 

 

$

3.36

 

$

3.10

 

 

 

 

 

 

 

Less: recurring capitalized expenditures

 

(0.19

)

 

(0.19

)

 

 

(0.35

)

 

(0.33

)

 

 

 

 

 

 

Core AFFO per common share - Diluted

$

1.51

 

$

1.42

 

 

$

3.01

 

$

2.77

 

 

 

 

 

 

 

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). 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 and expected Core FFO per diluted share is provided below:

 

3Q23

Range

 

2023

Range

 

Low

High

 

Low

High

Expected earnings per common share - diluted

$

0.41

$

0.45

 

$

2.07

 

$

2.17

 

Expected real estate depreciation and amortization

 

1.29

 

 

1.29

 

 

 

5.12

 

 

5.12

 

Expected income allocated to non-controlling interests

 

0.01

 

 

0.01

 

 

 

0.05

 

 

0.05

 

Reported (gain) on sale of operating properties

 

 

 

 

 

 

(0.44

)

 

(0.44

)

Expected FFO per share - diluted

$

1.71

 

$

1.75

 

 

$

6.80

 

$

6.90

 

Anticipated Adjustments to FFO

 

 

 

 

 

 

0.03

 

 

0.03

 

Expected Core FFO per share - diluted

$

1.71

 

$

1.75

 

 

$

6.83

 

$

6.93

 

 

 

 

 

 

 

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 June 30,

 

Six months ended June 30,

 

 

2023

 

 

2022

 

 

 

2023

 

 

2022

 

Net income

$

92,940

 

$

498,886

 

 

$

136,559

 

$

582,487

 

Less: Fee and asset management income

 

(718

)

 

(1,190

)

 

 

(1,296

)

 

(3,640

)

Less: Interest and other income

 

(431

)

 

(662

)

 

 

(493

)

 

(2,793

)

Less: Income/(loss) on deferred compensation plans

 

(2,844

)

 

14,678

 

 

 

(8,756

)

 

22,175

 

Plus: Property management expense

 

8,751

 

 

7,282

 

 

 

17,048

 

 

14,496

 

Plus: Fee and asset management expense

 

420

 

 

359

 

 

 

833

 

 

1,534

 

Plus: General and administrative expense

 

15,863

 

 

15,734

 

 

 

31,219

 

 

30,524

 

Plus: Interest expense

 

33,578

 

 

29,022

 

 

 

66,421

 

 

53,564

 

Plus: Depreciation and amortization expense

 

143,054

 

 

157,734

 

 

 

285,498

 

 

270,872

 

Plus: Expense/(benefit) on deferred compensation plans

 

2,844

 

 

(14,678

)

 

 

8,756

 

 

(22,175

)

Plus: Loss on early retirement of debt

 

2,513

 

 

 

 

 

2,513

 

 

 

Less: Gain on sale of operating property

 

(48,919

)

 

 

 

 

(48,919

)

 

(36,372

)

Less: Gain on acquisition of unconsolidated joint venture interests

 

 

 

(474,146

)

 

 

 

 

(474,146

)

Less: Equity in income of joint ventures

 

 

 

 

 

 

 

 

(3,048

)

Plus: Income tax expense

 

851

 

 

886

 

 

 

2,001

 

 

1,476

 

NOI

$

247,902

 

$

233,905

 

 

$

491,384

 

$

434,954

 

 

 

 

 

 

 

"Same Property" Communities

$

205,054

 

$

193,066

 

 

$

406,459

 

$

379,464

 

Non-"Same Property" Communities

 

39,495

 

 

35,385

 

 

 

78,348

 

 

47,047

 

Development and Lease-Up Communities

 

1,763

 

 

9

 

 

 

2,615

 

 

9

 

Disposition/Other

 

1,590

 

 

5,445

 

 

 

3,962

 

 

8,434

 

NOI

$

247,902

 

$

233,905

 

 

$

491,384

 

$

434,954

 

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 result and by 2 for six month results. A reconciliation of net income to EBITDAre and adjusted EBITDAre is provided below:

 

Three months ended June 30,

 

Six months ended June 30,

 

 

2023

 

 

2022

 

 

 

2023

 

 

2022

 

Net income

$

92,940

 

$

498,886

 

 

$

136,559

 

$

582,487

 

Plus: Interest expense

 

33,578

 

 

29,022

 

 

 

66,421

 

 

53,564

 

Plus: Depreciation and amortization expense

 

143,054

 

 

157,734

 

 

 

285,498

 

 

270,872

 

Plus: Income tax expense

 

851

 

 

886

 

 

 

2,001

 

 

1,476

 

Less: Gain on sale of operating property

 

(48,919

)

 

 

 

 

(48,919

)

 

(36,372

)

Less: Gain on acquisition of unconsolidated joint venture interests

 

 

 

(474,146

)

 

 

 

 

(474,146

)

EBITDAre

$

221,504

 

$

212,382

 

 

$

441,560

 

$

397,881

 

Plus: Loss on early retirement of debt

 

2,513

 

 

 

 

 

2,513

 

 

 

Less: Equity in income of joint ventures

 

 

 

 

 

 

 

 

(3,048

)

Adjusted EBITDAre

$

224,017

 

$

212,382

 

 

$

444,073

 

$

394,833

 

Annualized Adjusted EBITDAre

$

896,068

 

$

849,528

 

 

$

888,146

 

$

789,666

 

 

 

 

 

 

 

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 June 30,

 

Six months ended June 30,

 

 

2023

 

 

2022

 

 

 

2023

 

 

2022

 

Unsecured notes payable

$

3,364,180

 

$

3,231,938

 

 

$

3,316,971

 

$

3,284,799

 

Secured notes payable

 

391,732

 

 

514,650

 

 

 

453,409

 

 

257,325

 

Total debt

 

3,755,912

 

 

3,746,588

 

 

 

3,770,380

 

 

3,542,124

 

Less: Cash and cash equivalents

 

(6,775

)

 

(31,302

)

 

 

(8,650

)

 

(360,731

)

Net debt

$

3,749,137

 

$

3,715,286

 

 

$

3,761,730

 

$

3,181,393

 

Net Debt to Annualized Adjusted EBITDAre:

 

Three months ended June 30,

 

Six months ended June 30,

 

 

2023

 

 

2022

 

 

 

2023

 

 

2022

 

Net debt

$

3,749,137

$

3,715,286

 

$

3,761,730

$

3,181,393

Annualized Adjusted EBITDAre

 

896,068

 

 

849,528

 

 

 

888,146

 

 

789,666

 

Net Debt to Annualized Adjusted EBITDAre

 

4.2x

 

 

4.4x

 

 

 

4.2x

 

 

4.0x

 

 

Contacts

 Kim Callahan, 713-354-2549 

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