Camden Property Trust Announces 2022 Operating Results, 2023 Financial Outlook, and First Quarter 2023 Dividend
HOUSTON, February 02, 2023--(BUSINESS WIRE)--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, | Sep 30, | Jun 30, | Mar 31, | Dec 31, | ||||||
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 |