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Press Release: Camden Property Trust Announces -5-

· 02/04/2021 16:15
Three months ended Twelve months ended December December 31, 31, -------------------------- ---------------------------- 2020 2019 2020 2019 ------------- ----------- ------------- ------------- Net income attributable to common shareholders (a) $29,193 $95,014 $123,911 $219,623 Plus: Interest expense 24,072 20,168 91,526 80,706 Plus: Depreciation and amortization expense 91,925 85,540 367,162 336,274 Plus: Income allocated to non-controlling interests 1,188 1,211 4,668 4,647 Plus: Income tax expense 496 380 1,972 1,089 Plus: COVID-19 Related Impact (b) -- -- 14,364 -- Plus: Retail straight-line rent receivables adjustment (c) 3,519 -- 3,519 -- Less: Gain on sale of operating properties, including land -- (49,901) (382) (49,901) Plus: Loss on early retirement of debt 176 11,995 176 11,995 Less: Equity in income of joint ventures (2,143) (8,829) (8,052) (14,783) --------- ---------- --------- ---------- Adjusted EBITDA $148,426 $155,578 $598,864 $589,650 --------- ---------- --------- ---------- Annualized Adjusted EBITDA $593,704 $622,312 $598,864 $589,650 ========= ========== ========= ==========CAMDEN NON-GAAP FINANCIAL MEASURES DEFINITIONS & RECONCILIATIONS (In thousands, except per share amounts) (Unaudited)Three months ended Twelve months ended December 31, December 31, ------------------------- -------------------------- 2020 2019 2020 2019 ------------- ---------- ------------ ------------ Net income (a) $30,381 $96,225 $128,579 $224,270 Less: Fee and asset management income (3,351) (2,847) (10,800) (8,696) Less: Interest and other income (347) (976) (2,949) (3,090) Less: Income on deferred compensation plans (10,399) (6,702) (12,045) (21,694) Plus: Property management expense 5,841 6,386 24,201 25,290 Plus: Fee and asset management expense 1,273 1,737 3,954 5,759 Plus: General and administrative expense 13,274 13,174 53,624 53,201 Plus: Interest expense 24,072 20,168 91,526 80,706 Plus: Depreciation and amortization expense 91,925 85,540 367,162 336,274 Plus: Expense on deferred compensation plans 10,399 6,702 12,045 21,694 Plus: Loss on early retirement of debt 176 11,995 176 11,995 Less: Gain on sale of operating properties, including land -- (49,901) (382) (49,901) Less: Equity in income of joint ventures (2,143) (8,829) (8,052) (14,783) Plus: Income tax expense 496 380 1,972 1,089 --------- --------- -------- --------- NOI (b) (c) (d) $161,597 $173,052 $649,011 $662,114 "Same Property" Communities $143,953 $150,819 $581,631 $584,056 Non-"Same Property" Communities 20,551 18,992 81,830 66,580 Development and Lease-Up Communities 15 15 (724) 2 COVID-19 Related Impact (b) (c) -- -- (13,614) -- Dispositions/Other (2,922) 3,226 (112) 11,476 --------- --------- -------- --------- NOI (b) (c) (d) $161,597 $173,052 $649,011 $662,114

NOI is defined by the Company as property revenue less property operating and maintenance expenses less real estate taxes. NOI is further detailed in the Components of Property NOI schedules on page 12 of the supplement. The Company considers NOI to be an appropriate supplemental measure of operating performance to net income attributable to common shareholders because it reflects the operating performance of our communities without allocation of corporate level property management overhead or general and administrative costs. A reconciliation of net income attributable to common shareholders to net operating income is provided below:

(a) Net income was negatively impacted for the three and twelve months ended December 31, 2020 by an approximate $3.5 million non-cash adjustment to retail straight-line rent receivables. Net income was also negatively impacted for the twelve months ended December 31, 2020 by approximately $14.8 million of COVID-19 Related Impact, which consists of the Resident Relief Funds, Employee Relief Fund, direct COVID-19 expenses, and bonus paid to on-site employees. Please refer to page 29 of the supplement, footnote (a), for additional detail on the breakdown of the COVID-19 Related Impact.

(b) Two Resident Relief Funds were established for residents experiencing financial losses caused by the COVID-19 pandemic, and paid out approximately $9.1 million to approximately 7,100 Camden residents of our wholly-owned communities. All charges related to these funds were recognized as a reduction of revenue for the twelve months ended December 31, 2020.

(c) The Company incurred approximately $4.5 million of COVID-19 expenses at our operating communities for the twelve months ended December 31, 2020, which included $2.8 million of bonuses paid to on-site employees who provided essential services during the pandemic and $1.7 million in other directly-related COVID-19 expenses.

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

Adjusted EBITDA

Adjusted EBITDA is defined by the Company as earnings before interest, taxes, depreciation and amortization, including net operating income from discontinued operations, excluding equity in (income) loss of joint ventures, (gain) loss on sale of unconsolidated joint venture interests, gain on acquisition of controlling interest in joint ventures, gain on sale of operating properties including land, loss on early retirement of debt, income (loss) allocated to non-controlling interests, non-cash retail straight-line rent receivables adjustment, and direct COVID-19 Related Impact. The Company considers Adjusted EBITDA to be an appropriate supplemental measure of operating performance to net income attributable to common shareholders because it represents income before non-cash depreciation and the cost of debt, and excludes gains or losses from property dispositions. Annualized Adjusted EBITDA is Adjusted EBITDA as reported for the period multiplied by 4 for quarter results. A reconciliation of net income attributable to common shareholders to Adjusted EBITDA is provided below:

(a) Net income attributable to common shareholders was negatively impacted for the three and twelve months ended December 31, 2020 by an approximate $3.5 million non-cash adjustment to retail straight-line rent receivables. Net income attributable to common shareholders was also negatively impacted for the twelve months ended December 31, 2020 by approximately $14.8 million of COVID-19 Related Impact, which consists of the Resident Relief Funds, Employee Relief Fund, direct COVID-19 expenses, and bonus paid to on-site employees. Please refer to page 29 of the supplement, footnote (a), for additional detail on the breakdown of the COVID-19 Related Impact.

(b) Approximately $14.4 million of the stated COVID-19 Related Impact, which consists of the Resident Relief Funds, Employee Relief Fund, direct COVID-19 expenses, and bonus paid to on-site employees, has been added back to the Adjusted EBITDA calculation for the twelve months ended December 31, 2020.

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

Net Debt to Annualized Adjusted EBITDA

The Company believes Net Debt to Annualized Adjusted EBITDA to be an appropriate supplemental measure of evaluating balance sheet leverage. Net Debt is defined by the Company as the average monthly balance of Total Debt during the period, less the average monthly balance of Cash and Cash Equivalents during the period. The following tables reconcile average Total debt to Net debt and computes the ratio to Adjusted EBITDA for the following periods:

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February 04, 2021 16:15 ET (21:15 GMT)