Camden Property Trust (NYSE: CPT) today announced operating results for the three and twelve months ended December 31, 2014.

Funds from Operations (“FFO”)

FFO for the fourth quarter of 2014 totaled $0.99 per diluted share or $90.3 million, as compared to $1.08 per diluted share or $96.9 million for the same period in 2013. FFO for the three months ended December 31, 2014 included a $10.0 million or $0.11 per diluted share charge related to incentive compensation paid as a result of joint venture restructuring [see press release dated December 29, 2014 for additional information].

FFO for the twelve months ended December 31, 2014 totaled $4.18 per diluted share or $378.0 million, as compared to $4.11 per diluted share or $368.3 million for the same period in 2013. FFO for the twelve months ended December 31, 2014 included: a $10.0 million or $0.11 per diluted share charge related to incentive compensation paid as a result of joint venture restructuring, and a $2.5 million or $0.03 per diluted share net gain on sale of land holdings. FFO for the twelve months ended December 31, 2013 included: a $5.1 million or $0.06 per diluted share impact from a promoted equity interest recognized in conjunction with the sale of joint venture properties; a $1.0 million or $0.01 per diluted share impact from non-recurring fee income; and a $0.7 million or $0.01 per diluted share gain on sale of undeveloped land.

Net Income Attributable to Common Shareholders

For the three months ended December 31, 2014, the Company reported Net Income Attributable to Common Shareholders of $178.5 million and Earnings per Share - diluted ("EPS") of $1.98, as compared to EPS of $1.46 for the same period in 2013. EPS for the three months ended December 31, 2014 included a $1.73 per share gain on sale of operating properties, and an $0.11 per share charge related to incentive compensation paid as a result of joint venture restructuring. EPS for the three months ended December 31, 2013 included a $1.03 per share gain on sale of discontinued operations and a $0.04 per share gain on sale of unconsolidated joint venture properties.

For the twelve months ended December 31, 2014, Camden reported Net Income Attributable to Common Shareholders of $292.1 million and EPS of $3.27, as compared to EPS of $3.78 for the same period in 2013. EPS for the twelve months ended December 31, 2014 included: a $1.76 per share gain on sale of operating properties, an $0.11 per share charge related to incentive compensation paid as a result of joint venture restructuring, a $0.04 per share gain on sale of unconsolidated joint venture properties, and a $0.03 per share net gain on sale of land holdings. EPS for the twelve months ended December 31, 2013 included: a $2.06 per share gain on sale of discontinued operations, an $0.18 per share gain on sale of unconsolidated joint venture properties, a $0.06 per share impact from a promoted equity interest recognized in conjunction with the sale of joint venture properties, a $0.01 per share impact from non-recurring fee income, and a $0.01 per share gain on sale of undeveloped land.

A reconciliation of net income attributable to common shareholders to FFO is included in the financial tables accompanying this press release.

Same-Property Results

For the 46,069 apartment homes included in consolidated same-property results, fourth quarter 2014 same-property net operating income (“NOI”) increased 4.2% compared to the fourth quarter of 2013, with revenues increasing 4.2% and expenses increasing 4.3%. On a sequential basis, fourth quarter 2014 same-property NOI increased 2.3% compared to the third quarter of 2014, with revenues increasing 0.1% and expenses declining 3.7% compared to the prior quarter. On a full-year basis, 2014 same-property NOI increased 4.9%, with revenues increasing 4.5% and expenses increasing 3.8% compared to the same period in 2013. Same-property physical occupancy levels averaged 95.7% during both the fourth quarter of 2014 and fourth quarter of 2013, and 96.1% during the third quarter of 2014.

The Company defines same-property communities as communities owned and stabilized since January 1, 2013. A reconciliation of net income to net operating income and same-property net operating income is included in the financial tables accompanying this press release.

Acquisition/Disposition Activity

During the fourth quarter, the company acquired Camden Fourth Ward, a 276-home apartment community in Atlanta, GA for $62.6 million.

Camden sold five wholly-owned apartment communities during the quarter for a total of $218.3 million: Camden River, a 352-home community in Atlanta, GA; Camden Glen Lakes, a 424-home community in Dallas, TX; Camden Club, a 436-home community in Orlando, FL; Camden Lakeside, a 228-home community in Tampa, FL; and Camden Pinehurst, a 407-home community in Charlotte, NC.

Subsequent to quarter-end, the Company disposed of Camden Ridgecrest, a 284-home community in Austin, TX for $29.3 million. Camden has one additional community in Tampa, FL under contract for sale which is expected to close on January 30, 2015 for approximately $85.1 million.

Development Activity

Lease-up was completed during the quarter at Camden NoMa, a 321-home project in Washington, DC, which is currently 95% occupied. Construction began during the quarter at two new wholly-owned communities: Camden McGowen Station in Houston, TX, a $90 million project with 315 apartment homes; and Camden Lincoln Station in Denver, CO, a $56 million project with 267 apartment homes.

Lease-up continued during the quarter at six wholly-owned development communities: Camden Boca Raton in Boca Raton, FL, a $52 million project with 261 apartment homes which is currently 77% leased; Camden Foothills in Scottsdale, AZ, a $44 million project with 220 apartment homes which is currently 51% leased; Camden La Frontera in Round Rock, TX, a $36 million project with 300 apartment homes which is currently 64% leased; Camden Lamar Heights in Austin, TX, a $47 million project with 314 apartment homes which is currently 51% leased; Camden Flatirons in Denver, CO, a $78 million project with 424 apartment homes which is currently 40% leased; and Camden Paces in Atlanta, GA, a $110 million project with 379 apartment homes which is currently 24% leased. Lease-up also began at one wholly-owned development community during the fourth quarter: Camden Hayden in Tempe, AZ, a $48 million project with 234 apartment homes which is currently 12% leased.

Construction continued at five wholly-owned development communities: Camden Glendale in Glendale, CA, a $115 million project with 303 apartment homes; Camden Gallery in Charlotte, NC, a $58 million project with 323 apartment homes; Camden Chandler in Chandler, AZ, a $75 million project with 380 apartment homes; Camden Victory Park in Dallas, TX, an $82 million project with 423 apartment homes; and The Camden in Los Angeles, CA, a $145 million project with 287 apartment homes. Construction also continued at one joint venture development community: Camden Southline in Charlotte, NC, a $48 million project with 266 apartment homes.

Equity Issuance

During the fourth quarter, Camden issued 209,747 common shares through its at-the-market ("ATM") share offering program at an average price of $76.28 per share, for total net consideration of approximately $15.7 million. No additional shares were sold subsequent to quarter-end.

Quarterly Dividend Declaration

Camden’s Board of Trust Managers declared a first quarter 2015 dividend of $0.70 per common share, which is a 6.1% increase over the Company’s prior quarterly dividend of $0.66 per share. The dividend is payable on April 17, 2015 to holders of record as of March 31, 2015. 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 release.

Earnings Guidance

Camden provided initial earnings guidance for 2015 based on its current and expected views of the apartment market and general economic conditions. Full-year 2015 FFO is expected to be $4.36 to $4.56 per diluted share, and full-year 2015 EPS is expected to be $1.47 to $1.67. First quarter 2015 earnings guidance is $1.04 to $1.08 per diluted share for FFO and $0.34 to $0.38 for EPS. Guidance for EPS excludes gains on real estate transactions.

The midpoint of the Company’s initial 2015 earnings guidance takes into account property dispositions of $247.6 million completed between October 1, 2014 and January 15, 2015, and also assumes an additional property disposition of $85.1 million will occur on January 30, 2015. The impact to 2015 FFO from the property dispositions of $332.7 million is approximately $0.22 per diluted share.

Camden expects 2015 same-property revenue growth between 3.75% and 4.75%, expense growth between 4.5% and 5.0%, and NOI growth between 3.0% and 5.0%. The Company’s same-property guidance for 2015 includes the impact of a new on-site bulk Internet initiative, which is anticipated to contribute 25 to 50 basis points to revenue growth and 75 to 100 basis points to expense growth during 2015. The impact to same store NOI growth should be minimal in 2015 but meaningful in future years when the rollout is completed.

Camden intends to update its earnings guidance to the market on a quarterly basis. Additional information on the Company’s 2015 financial outlook and a reconciliation of expected net income attributable to common shareholders to expected FFO are included in the financial tables accompanying this press release.

Conference Call

The Company will hold a conference call on Thursday, January 29, 2015 at 11:00 a.m. Central Time to review its fourth quarter and full-year 2014 results and discuss its outlook for future performance. To participate in the call, please dial (888) 317-6003 (Domestic) or (412) 317-6061 (International) by 10:50 a.m. Central Time and enter passcode: 5063934, or join the live webcast of the conference call by accessing the Investor Relations section of the Company’s website at camdenliving.com. Supplemental financial information is available in the Investor Relations section of the Company’s website under Earnings Releases or by calling Camden’s Investor Relations Department at (800) 922-6336.

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, and the Company assumes no obligation to update or supplement these statements because of subsequent events.

About Camden

Camden Property Trust, an S&P 400 Company, is a real estate company engaged in the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. Camden owns interests in and operates 167 properties containing 58,664 apartment homes across the United States. Upon completion of 13 properties under development, the Company’s portfolio will increase to 62,879 apartment homes in 180 properties. Camden was recently named by FORTUNE® Magazine for the seventh consecutive year as one of the “100 Best Companies to Work For” in America, ranking #11.

For additional information, please contact Camden’s Investor Relations Department at (800) 922-6336 or (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,

2014   2013 2014   2013

OPERATING DATA

    
Property revenues
Rental revenues $188,225 $177,795 $731,874 $683,362
Other property revenues 28,234     26,522   112,104     105,489  
Total property revenues 216,459     204,317   843,978     788,851  
 
Property expenses
Property operating and maintenance 53,014 50,297 211,253 199,650
Real estate taxes 23,415     21,582   94,055     86,041  
Total property expenses 76,429     71,879   305,308     285,691  
 
Non-property income
Fee and asset management 2,531 2,873 9,832 11,690
Interest and other income 80 41 842 1,217
Income on deferred compensation plans 2,003     3,078   3,937     8,290  
Total non-property income 4,614     5,992   14,611     21,197  
 
Other expenses
Property management 5,581 5,196 22,689 21,774
Fee and asset management 1,595 1,288 5,341 5,756
General and administrative 20,595 9,209 51,005 40,586
Interest 24,417 24,162 93,263 98,129
Depreciation and amortization 61,106 55,878 235,634 214,395
Amortization of deferred financing costs 862 859 3,355 3,548
Expense on deferred compensation plans 2,003     3,078   3,937     8,290  
Total other expenses 116,159     99,670   415,224     392,478  
 
Gain on sale of operating properties, including land 155,680 — 159,289 698
Impairment associated with land holdings — — (1,152 ) —
Equity in income of joint ventures 1,134     4,207   7,023     24,865  
Income from continuing operations before income taxes 185,299 42,967 303,217 157,442
Income tax expense – current (675 )   (239 ) (1,903 )   (1,826 )
Income from continuing operations 184,624 42,728 301,314 155,616
Income from discontinued operations — 1,290 — 8,515
Gain on sale of discontinued operations, net of tax —     91,101   —     182,160  
Net income 184,624 135,119 301,314 346,291
Less income allocated to non-controlling interests from continuing operations (6,126 ) (1,128 ) (9,225 ) (4,022 )
Less income, including gain on sale, allocated to non-controlling interests from discontinued operations —     (3,995 ) —     (5,905 )
Net income attributable to common shareholders $178,498     $129,996   $292,089     $336,364  
 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income $184,624 $135,119 $301,314 $346,291
Other comprehensive income
Unrealized loss on cash flow hedging activities — — (417 ) —
Unrealized loss and unamortized prior service cost on post retirement obligation (970 ) (99 ) (970 ) (99 )
Reclassification of net loss on cash flow hedging activities, prior service cost and net loss on post retirement obligation 25     13   74     54  
Comprehensive income 183,679 135,033 300,001 346,246
Less income allocated to non-controlling interests from continuing operations (6,126 ) (1,128 ) (9,225 ) (4,022 )
Less income, including gain on sale, allocated to non-controlling interests from discontinued operations —     (3,995 ) —     (5,905 )
Comprehensive income attributable to common shareholders $177,553     $129,910   $290,776     $336,319  
 

PER SHARE DATA

Total earnings per common share -- basic $1.99 $1.47 $3.29 $3.82
Total earnings per common share -- diluted 1.98 1.46 3.27 3.78
Earnings per common share from continuing operations -- basic 1.99 0.46 3.29 1.70
Earnings per common share from continuing operations -- diluted 1.98 0.46 3.27 1.69
 
Weighted average number of common shares outstanding:
Basic 88,683 87,459 88,084 87,204
Diluted 90,233 88,686 88,468 88,494
 

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,

2014   2013 2014   2013

FUNDS FROM OPERATIONS

    
 
Net income attributable to common shareholders $178,498 $129,996 $292,089 $336,364
Real estate depreciation from continuing operations 60,032 54,520 230,638 209,474
Real estate depreciation from discontinued operations — 199 — 5,255
Adjustments for unconsolidated joint ventures 1,357 1,422 5,337 5,738
Income allocated to non-controlling interests 6,126 5,123 9,225 9,927
Gain on sale of unconsolidated joint venture properties — (3,245 ) (3,566 ) (16,277 )
Gain on sale of operating properties, net of tax (155,680 ) — (155,680 ) —
Gain on sale of discontinued operations, net of tax —     (91,101 ) —     (182,160 )
Funds from operations $90,333     $96,914   $378,043     $368,321  
 

PER SHARE DATA

Funds from operations - diluted $0.99 $1.08 $4.18 $4.11
Distributions declared per common share 0.66 0.63 2.64 2.52
 
Weighted average number of common shares outstanding:
FFO - diluted 91,045 89,772 90,366 89,580
 

PROPERTY DATA

Total operating properties (end of period) (a) 168 170 168 170
Total operating apartment homes in operating properties (end of period) (a) 58,948 59,899 58,948 59,899
Total operating apartment homes (weighted average) 52,998 53,710 52,833 54,181
Total operating apartment homes - excluding discontinued operations (weighted average) 52,998 52,629 52,833 51,759
 

(a) Includes joint ventures and properties held for sale.

 
 

 

Note:  Please refer to the following pages for definitions and reconciliations of all non-GAAP financial measures presented in this document.

 
 

CAMDEN

  

BALANCE SHEET
(In thousands)

(Unaudited)

Dec 31,
2014

   Sep 30,
2014		   Jun 30,
2014		   Mar 31,
2014		   Dec 31,
2013
ASSETS        
Real estate assets, at cost
Land $1,003,422 $997,349 $985,444 $978,770 $969,711
Buildings and improvements 5,890,498     5,894,453     5,762,428     5,691,619     5,629,904  
6,893,920 6,891,802 6,747,872 6,670,389 6,599,615
Accumulated depreciation (1,738,862 )   (1,813,124 )   (1,755,086 )   (1,698,724 )   (1,643,713 )
Net operating real estate assets 5,155,058 5,078,678 4,992,786 4,971,665 4,955,902
Properties under development, including land 527,596 576,269 599,139 515,141 472,566
Investments in joint ventures 36,429 35,180 36,167 36,719 42,155
Properties held for sale 27,143     —     —     —     —  
Total real estate assets 5,746,226 5,690,127 5,628,092 5,523,525 5,470,623
Accounts receivable – affiliates 25,977 25,954 26,501 26,145 27,724
Other assets, net (a) 124,888 123,999 114,002 107,862 109,401
Cash and cash equivalents 153,918 66,127 16,069 16,768 17,794
Restricted cash 5,898     5,769     5,424     5,549     6,599  
Total assets $6,056,907     $5,911,976     $5,790,088     $5,679,849     $5,632,141  
 
 
 
LIABILITIES AND EQUITY
Liabilities
Notes payable
Unsecured $1,837,911 $1,837,621 $1,769,287 $1,649,041 $1,588,798
Secured 905,628 906,328 930,952 940,881 941,968
Accounts payable and accrued expenses 157,232 147,255 122,307 124,981 113,307
Accrued real estate taxes 39,149 54,369 40,232 21,922 35,648
Distributions payable 60,386 60,265 59,770 59,728 56,787
Other liabilities (b) 100,058     94,230     90,944     88,693     88,272  
Total liabilities 3,100,364 3,100,068 3,013,492 2,885,246 2,824,780
 
Commitments and contingencies
Non-qualified deferred compensation share awards 68,134 60,363 61,727 55,498 47,180
 
Equity
Common shares of beneficial interest 976 974 967 966 967
Additional paid-in capital 3,667,448 3,649,750 3,595,315 3,593,633 3,596,069
Distributions in excess of net income attributable to common shareholders (453,777 ) (568,142 ) (550,050 ) (523,321 ) (494,167 )
Treasury shares, at cost (396,626 ) (397,497 ) (398,474 ) (399,510 ) (410,227 )
Accumulated other comprehensive loss (c) (2,419 )   (1,474 )   (1,077 )   (1,091 )   (1,106 )
Total common equity 2,815,602 2,683,611 2,646,681 2,670,677 2,691,536
Non-controlling interests 72,807     67,934     68,188     68,428     68,645  
Total equity 2,888,409     2,751,545     2,714,869     2,739,105     2,760,181  
Total liabilities and equity $6,056,907     $5,911,976     $5,790,088     $5,679,849     $5,632,141  
 
 
 
(a) Includes:
net deferred charges of: $13,219 $14,361 $12,747 $13,615 $14,497
 
(b) Includes:
deferred revenues of: $1,848 $1,734 $1,070 $1,786 $1,886
 
(c) Represents the unrealized loss and unamortized prior service costs on post retirement obligation, and unrealized loss on cash flow hedging activities.
 
 

CAMDEN

2015 FINANCIAL OUTLOOK
AS OF JANUARY 30, 2015

(Unaudited)

 
2014 Reported FFO, Adjusted for Non-Routine Items and Year End Shares Outstanding    
($'s and shares in thousands)  
Total   Per Share
2014 Reported FFO $378,043 $4.18
Adjustments for 2014 non-routine items:
Less: Gain on sale of land, net (2,457 ) (0.03 )
Plus: Fund Modification Incentive Compensation 10,000     0.11  
 
2014 FFO adjusted for non-routine items $385,586 $4.27
 
2014 Fully Diluted Weighted Average Shares Outstanding - FFO 90,366
 
December 31, 2014 Fully Diluted Weighted Average Shares Outstanding - FFO 91,210
 
2014 FFO Adjusted for Non-Routine Items and December 31, 2014 Fully Diluted Shares Outstanding - FFO $4.23
 
 
2015 Financial Outlook            
 
Earnings Guidance - Per Diluted Share
Expected FFO per share - diluted $4.36 - $4.56
 
"Same Property" Communities
Number of Units 47,878
2014 Base Net Operating Income $496 million
Total Revenue Growth 3.75% - 4.75%
Total Expense Growth 4.50% - 5.00%
Net Operating Income Growth 3.00% - 5.00%
Impact from 1% change in NOI Growth is approximately $0.054 / share
 
Physical Occupancy 95.2%
 
Capitalized Expenditures
Recurring $61 - $65 million
Revenue Enhancing Repositions (a) $21 - $25 million
 
Acquisitions/Dispositions
Disposition Volume (consolidated on balance sheet) $100 - $300 million
Acquisition Volume (consolidated on balance sheet) $100 - $300 million
 
Development
Development Starts (consolidated on balance sheet) $100 - $300 million
Development Spend (consolidated on balance sheet) $300 - $400 million
 
Equity in Income of Joint Ventures (FFO) $13 - $15 million
 
Non-Property Income
Non-Property Income, Net $2 - $4 million

Includes: Fee and asset management income (including fees from joint ventures), net of expenses, and interest and other income

 
Corporate Expenses
General and administrative expense (b) $41 - $43 million
Property management expense $23 - $25 million
 
Capital
Expected Capital Transactions $0 - $300 million
Expensed Interest $96 - $100 million
Capitalized Interest $16 - $18 million
 

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

 

(b)  Excludes any third party acquisition costs.

 

Note: This table contains forward-looking statements. Please see the paragraph regarding forward-looking statements earlier in this document. Additionally, please refer to the following pages for definitions and reconciliations of all non-GAAP financial measures presented in this document.

 

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 gains (or losses) associated with previously depreciated operating properties, real estate depreciation and amortization, impairments of depreciable assets, and adjustments for unconsolidated joint ventures. 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 operating properties, and depreciation, FFO can assist in the comparison of the operating performance of a company’s real estate investments between periods or to different companies. A reconciliation of net income attributable to common shareholders to FFO is provided below:

 
 

Three Months Ended
December 31,

  

Twelve Months Ended
December 31,

2014   2013 2014   2013
Net income attributable to common shareholders $178,498   $129,996 $292,089   $336,364
Real estate depreciation from continuing operations 60,032 54,520 230,638 209,474
Real estate depreciation from discontinued operations — 199 — 5,255
Adjustments for unconsolidated joint ventures 1,357 1,422 5,337 5,738
Income allocated to non-controlling interests 6,126 5,123 9,225 9,927
Gain on sale of unconsolidated joint venture properties — (3,245 ) (3,566 ) (16,277 )
Gain on sale of operating properties, net of tax (155,680 ) — (155,680 ) —
Gain on sale of discontinued operations, net of tax —     (91,101 ) —     (182,160 )
Funds from operations $90,333     $96,914   $378,043     $368,321  
 
Weighted average number of common shares outstanding:
EPS diluted 90,233 88,686 88,468 88,494
FFO diluted 91,045 89,772 90,366 89,580
 
Total earnings per common share -- diluted $1.98 $1.46 $3.27 $3.78
FFO per common share - diluted $0.99 $1.08 $4.18 $4.11
 

Expected FFO

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

 
 

1Q15 Range

  

2015 Range

Low   High Low   High
Expected earnings per common share - diluted $0.34   $0.38 $1.47   $1.67
Expected real estate depreciation 0.67 0.67 2.74 2.74
Expected adjustments for unconsolidated joint ventures 0.02 0.02 0.10 0.10
Expected income allocated to non-controlling interests 0.01     0.01   0.05     0.05
Expected FFO per share - diluted $1.04 $1.08 $4.36 $4.56
 

Note: This table contains forward-looking statements. Please see the 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 total property income less property operating and maintenance expenses less real estate taxes.  The Company considers NOI to be an appropriate supplemental measure of operating performance to net income attributable to common shareholders because it reflects the operating performance of our communities without allocation of corporate level property management overhead or general and administrative costs. A reconciliation of net income attributable to common shareholders to net operating income is provided below:

 
 
 

Three months ended
December 31,

  

Twelve months ended
December 31,

2014   2013 2014   2013
Net income attributable to common shareholders $178,498   $129,996 $292,089   $336,364
Less: Fee and asset management (2,531 ) (2,873 ) (9,832 ) (11,690 )
Less: Interest and other income (80 ) (41 ) (842 ) (1,217 )
Less: Income on deferred compensation plans (2,003 ) (3,078 ) (3,937 ) (8,290 )
Plus: Property management 5,581 5,196 22,689 21,774
Plus: Fee and asset management 1,595 1,288 5,341 5,756
Plus: General and administrative 20,595 9,209 51,005 40,586
Plus: Interest 24,417 24,162 93,263 98,129
Plus: Depreciation and amortization 61,106 55,878 235,634 214,395
Plus: Amortization of deferred financing costs 862 859 3,355 3,548
Plus: Expense on deferred compensation plans 2,003 3,078 3,937 8,290
Less: Gain on sale of operating properties, including land (155,680 ) — (159,289 ) (698 )
Less: Impairment associated with land holdings — — 1,152 —
Less: Equity in income of joint ventures (1,134 ) (4,207 ) (7,023 ) (24,865 )
Plus: Income tax expense 675 239 1,903 1,826
Less: Income from discontinued operations — (1,290 ) — (8,515 )
Less: Gain on sale of discontinued operations, net of tax — (91,101 ) — (182,160 )
Plus: Income allocated to non-controlling interests from continuing operations 6,126 1,128 9,225 4,022
Plus: Income, including gain on sale, allocated to non-controlling interests from discontinued operations —     3,995   —     5,905  
Net Operating Income (NOI) $140,030 $132,438 $538,670 $503,160
 
"Same Property" Communities $120,271 $115,469 $469,488 $447,696
Non-"Same Property" Communities 15,362 12,648 52,138 38,972
Development and Lease-Up Communities 1,809 (12 ) 2,355 (12 )
Dispositions/Other 2,588     4,333   14,689     16,504  
Net Operating Income (NOI) $140,030 $132,438 $538,670 $503,160
 

EBITDA

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 discontinued operations, net of tax, and income (loss) allocated to non-controlling interests. The Company considers 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. A reconciliation of net income attributable to common shareholders to EBITDA is provided below:

 
 

Three months ended
December 31,

  

Twelve months ended
December 31,

2014   2013   2014   2013
Net income attributable to common shareholders $178,498   $129,996 $292,089   $336,364
Plus: Fund Modification Incentive Compensation 10,000 — 10,000 —
Plus: Interest 24,417 24,162 93,263 98,129
Plus: Amortization of deferred financing costs 862 859 3,355 3,548
Plus: Depreciation and amortization 61,106 55,878 235,634 214,395
Plus: Income allocated to non-controlling interests from continuing operations 6,126 1,128 9,225 4,022
Plus: Income, including gain on sale, allocated to non-controlling interests from discontinued operations — 3,995 — 5,905
Plus: Income tax expense 675 239 1,903 1,826
Plus: Real estate depreciation from discontinued operations — 199 — 5,255
Less: Gain on sale of operating properties, including land (155,680 ) — (159,289 ) (698 )
Less: Impairment associated with land holdings — — 1,152 —
Less: Equity in income of joint ventures (1,134 ) (4,207 ) (7,023 ) (24,865 )
Less: Gain on sale of discontinued operations, net of tax —     (91,101 ) —     (182,160 )
EBITDA $124,870 $121,148 $480,309 $461,721