Camden Property Trust (NYSE:CPT) (the "Company") announced today operating results for the three months ended March 31, 2021. Net Income Attributable to Common Shareholders (“EPS”), Funds from Operations (“FFO”), and Adjusted Funds from Operations (“AFFO”) for the three months ended March 31, 2021 are detailed below. A reconciliation of EPS to FFO is included in the financial tables accompanying this press release.
Three Months Ended | ||||
March 31 | ||||
Per Diluted Share | 2021 | 2020 | ||
EPS | $0.31 | $0.43 | ||
FFO | $1.24 | $1.35 | ||
AFFO | $1.12 | $1.20 | ||
Quarterly Growth | Sequential Growth | |||
Same Property Results | 1Q21 vs. 1Q20 | 1Q21 vs. 4Q20 | ||
Revenues | (0.4)% | 0.1% | ||
Expenses | 5.4% | 0.3% | ||
Net Operating Income ("NOI") | (3.5)% | 0.1% | ||
| Same Property Results | 1Q21 | 1Q20 | 4Q20 |
Occupancy | 96.0% | 96.0% | 95.5% |
For 2021, the Company defines same property communities as communities owned and stabilized since January 1, 2020, 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.
April Collections
Same Property Scheduled Rents* | April 2021 | April 2020 | 1Q21 | 1Q20 |
Collected | 98.0% | 94.3% | 98.4% | 97.9% |
Deferred/Payment Plan Arranged | —% | 2.5% | —% | —% |
Delinquent | 2.0% | 3.2% | 1.6% | 2.1% |
*Rent is recognized as earned. The Company evaluates collectability on an ongoing basis and any accounts considered uncollectable are recorded against property revenues. | ||||
Operating Statistics - Same Property Portfolio
New Lease and Renewal Data - Date Signed (1) (2) | April 2021* | April 2020 | 1Q21(2) | 1Q20(2) |
New Lease Rates | 4.5% | (2.5)% | (0.8)% | 0.4% |
Renewal Rates | 4.7% | 0.1% | 3.4% | 4.3% |
Blended Rates | 4.6% | (0.8)% | 1.2% | 2.5% |
New Leases | 1,692 | 1,366 | 1,734 | 1,529 |
Renewals | 1,590 | 2,568 | 1,604 | 1,768 |
Total Leases | 3,282 | 3,934 | 3,338 | 3,297 |
New Lease and Renewal Data - Date Effective (3) (4) | April 2021* | April 2020 | 1Q21(4) | 1Q20(4) |
New Lease Rates | 1.7% | (1.4)% | (2.2)% | 0.2% |
Renewal Rates | 3.1% | 4.4% | 2.9% | 4.8% |
Blended Rates | 2.4% | 2.1% | 0.2% | 2.4% |
New Leases | 1,456 | 1,124 | 1,539 | 1,463 |
Renewals | 1,464 | 1,720 | 1,378 | 1,405 |
Total Leases | 2,920 | 2,844 | 2,917 | 2,868 |
*Data as of April 26, 2021 | ||||
(1) Average change in same property new lease and renewal rates vs. expiring lease rates when signed. | ||||
(2) Data represents average monthly leases signed during the period. | ||||
(3) Average change in same property new lease and renewal rates vs. expiring lease rates when effective. | ||||
(4) Data represents average monthly leases effective during the period. | ||||
Occupancy and Turnover Data | April 2021* | April 2020 | 1Q21 | 1Q20 |
Occupancy | 96.6% | 95.5% | 96.0% | 96.0% |
Annualized Gross Turnover | 47% | 47% | 45% | 46% |
Annualized Net Turnover | 37% | 37% | 35% | 37% |
*Data as of April 26, 2021 | ||||
Development Activity
During the quarter, construction commenced at Camden Durham in Durham, NC, and leasing began at two communities: Camden Lake Eola in Orlando, FL, and Camden Buckhead in Atlanta, GA. Subsequent to quarter-end, leasing began at Camden Hillcrest in San Diego, CA.
Development Communities - Construction Completed and Projects in Lease-Up ($ in millions)
Total | Total | % Leased | ||
Community Name | Location | Homes | Cost | as of 4/26/2021 |
Camden Downtown I | Houston, TX | 271 | $131.5 | 72 % |
Camden RiNo | Denver, CO | 233 | 78.9 | 96 % |
Camden Cypress Creek II (JV) | Cypress, TX | 234 | 31.9 | 87 % |
Total | 738 | $242.3 |
Development Communities - Construction Ongoing ($ in millions)
Total | Total | % Leased | |||
Community Name | Location | Homes | Estimated Cost | as of 4/26/2021 | |
Camden North End II | Phoenix, AZ | 343 | $90.0 | 48 % | |
Camden Lake Eola | Orlando, FL | 360 | 125.0 | 11 % | |
Camden Buckhead | Atlanta, GA | 366 | 160.0 | 15 % | |
Camden Hillcrest | San Diego, CA | 132 | 95.0 | 3 % | |
Camden Atlantic | Plantation, FL | 269 | 100.0 | ||
Camden Tempe II | Tempe, AZ | 397 | 115.0 | ||
Camden NoDa | Charlotte, NC | 387 | 105.0 | ||
Camden Durham | Durham, NC | 354 | 120.0 | ||
Total | 2,608 | $910.0 | |||
Liquidity Analysis
As of March 31, 2021, Camden had approximately $1.2 billion of liquidity comprised of approximately $333 million in cash and cash equivalents and no amounts outstanding on its $900 million unsecured credit facility. The Company has no scheduled debt maturities until 2022, and at quarter-end had $358 million left to fund under its existing wholly-owned development pipeline. As of March 31, 2021, Camden had outstanding letters of credit totaling approximately $12 million, which reduced the availability under its unsecured credit facility to $888 million.
Earnings Guidance
Camden updated its earnings guidance for 2021 based on its current and expected views of the apartment market and general economic conditions, and provided guidance for second quarter 2021 as detailed below.
2Q21 | 2021 | 2021 Midpoint | |||
Per Diluted Share | Range | Range | Current | Prior | Change |
EPS | $0.25 - $0.31 | $0.84 - $1.14 | $0.99 | $0.91 | $0.08 |
FFO | $1.22 - $1.28 | $4.94 - $5.24 | $5.09 | $5.00 | $0.09 |
2021 | 2021 Midpoint | ||||
Same Property Growth | Range | Current | Prior | Change | |
Revenues | 0.85% - 2.35% | 1.60% | 0.75% | 0.85% | |
Expenses | 3.50% - 4.30% | 3.90% | 3.50% | 0.40% | |
NOI | (1.10)% - 1.60% | 0.25% | (0.85)% | 1.10% | |
Camden intends to update its earnings guidance to the market on a quarterly basis. Additional information on the Company’s 2021 financial outlook and a reconciliation of expected EPS to expected FFO are included in the financial tables accompanying this press release.
Conference Call
Friday, April 30, 2021 at 10:00 AM CT
Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061
Passcode: 4025578
Webcast: https://services.choruscall.com/links/cpt210430.html
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 400 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 167 properties containing 56,851 apartment homes across the United States. Upon completion of 8 properties currently under development, the Company’s portfolio will increase to 59,459 apartment homes in 175 properties. Camden has been recognized as one of the 100 Best Companies to Work For® by FORTUNE magazine for 14 consecutive years, most recently ranking #8. The Company also received a Glassdoor Employees' Choice Award in 2020, ranking #25 for large U.S. companies.
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 March 31, | ||||
2021 | 2020 | |||
OPERATING DATA | ||||
Property revenues (a) | $267,568 | $265,879 | ||
Property expenses | ||||
Property operating and maintenance | 63,479 | 59,956 | ||
Real estate taxes | 37,453 | 34,180 | ||
Total property expenses | 100,932 | 94,136 | ||
Non-property income | ||||
Fee and asset management | 2,206 | 2,527 | ||
Interest and other income | 332 | 329 | ||
Income/(loss) on deferred compensation plans | 3,626 | (14,860 | ) | |
Total non-property income | 6,164 | (12,004 | ) | |
Other expenses | ||||
Property management | 6,124 | 6,527 | ||
Fee and asset management | 1,132 | 843 | ||
General and administrative | 14,222 | 13,233 | ||
Interest | 23,644 | 19,707 | ||
Depreciation and amortization | 93,141 | 91,859 | ||
Expense/(benefit) on deferred compensation plans | 3,626 | (14,860 | ) | |
Total other expenses | 141,889 | 117,309 | ||
Gain on sale of land | — | 382 | ||
Equity in income of joint ventures | 1,914 | 2,122 | ||
Income from continuing operations before income taxes | 32,825 | 44,934 | ||
Income tax expense | (352 | ) | (467 | ) |
Net income | 32,473 | 44,467 | ||
Less income allocated to non-controlling interests | (1,126 | ) | (1,183 | ) |
Net income attributable to common shareholders | $31,347 | $43,284 | ||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $32,473 | $44,467 | ||
Other comprehensive income | ||||
Reclassification of net loss on cash flow hedging activities, prior service cost and net loss on post retirement obligation | 373 | 366 | ||
Comprehensive income | 32,846 | 44,833 | ||
Less income allocated to non-controlling interests | (1,126 | ) | (1,183 | ) |
Comprehensive income attributable to common shareholders | $31,720 | $43,650 | ||
PER SHARE DATA | ||||
Total earnings per common share - basic | $0.31 | $0.43 | ||
Total earnings per common share - diluted | 0.31 | 0.43 | ||
Weighted average number of common shares outstanding: | ||||
Basic | 99,547 | 99,298 | ||
Diluted | 99,621 | 99,380 | ||
(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 March 31, 2021, we recognized $267.6 million of property revenue which consisted of approximately $235.8 million of rental revenue and approximately $31.8 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 $265.9 million recognized for the three months ended March 31, 2020, made up of approximately $236.6 million of rental revenue and approximately $29.3 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 $7.7 million and $6.9 million for the three months ended March 31, 2021 and 2020, 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 March 31, | ||||
2021 | 2020 | |||
FUNDS FROM OPERATIONS | ||||
Net income attributable to common shareholders | $31,347 | $43,284 | ||
Real estate depreciation and amortization | 90,707 | 89,511 | ||
Adjustments for unconsolidated joint ventures | 2,599 | 2,242 | ||
Income allocated to non-controlling interests | 1,126 | 1,282 | ||
Funds from operations | $125,779 | $136,319 | ||
Less: recurring capitalized expenditures (a) | (12,680 | ) | (14,825 | ) |
Adjusted funds from operations | $113,099 | $121,494 | ||
PER SHARE DATA | ||||
Funds from operations - diluted | $1.24 | $1.35 | ||
Adjusted funds from operations - diluted | 1.12 | 1.20 | ||
Distributions declared per common share | 0.83 | 0.83 | ||
Weighted average number of common shares outstanding: | ||||
FFO/AFFO - diluted | 101,341 | 101,128 | ||
PROPERTY DATA | ||||
Total operating properties (end of period) (b) | 167 | 164 | ||
Total operating apartment homes in operating properties (end of period) (b) | 56,851 | 56,112 | ||
Total operating apartment homes (weighted average) | 49,439 | 49,017 | ||
(a) | Capital expenditures necessary to help preserve the value of and maintain the functionality at our communities. | |
(b) | 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) | |||||||||||||||
Mar 31,
| Dec 31,
| Sep 30,
| Jun 30,
| Mar 31,
| |||||||||||
ASSETS | |||||||||||||||
Real estate assets, at cost | |||||||||||||||
Land | $1,233,937 | $1,225,214 | $1,216,942 | $1,206,656 | $1,206,130 | ||||||||||
Buildings and improvements | 7,863,707 | 7,763,748 | 7,677,676 | 7,597,165 | 7,547,150 | ||||||||||
9,097,644 | 8,988,962 | 8,894,618 | 8,803,821 | 8,753,280 | |||||||||||
Accumulated depreciation | (3,124,504 | ) | (3,034,186 | ) | (2,944,769 | ) | (2,857,124 | ) | (2,770,848 | ) | |||||
Net operating real estate assets | 5,973,140 | 5,954,776 | 5,949,849 | 5,946,697 | 5,982,432 | ||||||||||
Properties under development, including land | 541,958 | 564,215 | 522,664 | 514,336 | 467,288 | ||||||||||
Investments in joint ventures | 18,800 | 18,994 | 20,992 | 21,735 | 22,318 | ||||||||||
Total real estate assets | 6,533,898 | 6,537,985 | 6,493,505 | 6,482,768 | 6,472,038 | ||||||||||
Accounts receivable – affiliates | 19,502 | 20,158 | 20,152 | 21,432 | 20,344 | ||||||||||
Other assets, net (a) | 213,126 | 216,276 | 217,534 | 211,823 | 196,544 | ||||||||||
Cash and cash equivalents | 333,402 | 420,441 | 589,614 | 601,584 | 22,277 | ||||||||||
Restricted cash | 4,105 | 4,092 | 3,918 | 4,093 | 4,367 | ||||||||||
Total assets | $7,104,033 | $7,198,952 | $7,324,723 | $7,321,700 | $6,715,570 | ||||||||||
LIABILITIES AND EQUITY | |||||||||||||||
Liabilities | |||||||||||||||
Notes payable | |||||||||||||||
Unsecured | $3,167,557 | $3,166,625 | $3,225,799 | $3,224,871 | $2,606,876 | ||||||||||
Accounts payable and accrued expenses | 159,111 | 175,608 | 183,654 | 167,453 | 156,841 | ||||||||||
Accrued real estate taxes | 33,155 | 66,156 | 87,159 | 62,499 | 32,365 | ||||||||||
Distributions payable | 84,282 | 84,147 | 84,137 | 84,138 | 84,112 | ||||||||||
Other liabilities (b) | 185,852 | 189,829 | 177,967 | 172,172 | 164,052 | ||||||||||
Total liabilities | 3,629,957 | 3,682,365 | 3,758,716 | 3,711,133 | 3,044,246 | ||||||||||
Equity | |||||||||||||||
Common shares of beneficial interest | 1,070 | 1,069 | 1,068 | 1,068 | 1,069 | ||||||||||
Additional paid-in capital | 4,588,056 | 4,581,710 | 4,577,813 | 4,574,387 | 4,569,995 | ||||||||||
Distributions in excess of net income attributable to common shareholders | (842,628 | ) | (791,079 | ) | (737,556 | ) | (689,809 | ) | (623,570 | ) | |||||
Treasury shares | (335,511 | ) | (341,412 | ) | (341,831 | ) | (341,637 | ) | (342,778 | ) | |||||
Accumulated other comprehensive income (loss) (c) | (5,010 | ) | (5,383 | ) | (5,431 | ) | (5,797 | ) | (6,163 | ) | |||||
Total common equity | 3,405,977 | 3,444,905 | 3,494,063 | 3,538,212 | 3,598,553 | ||||||||||
Non-controlling interests | 68,099 | 71,682 | 71,944 | 72,355 | 72,771 | ||||||||||
Total equity | 3,474,076 | 3,516,587 | 3,566,007 | 3,610,567 | 3,671,324 | ||||||||||
Total liabilities and equity | $7,104,033 | $7,198,952 | $7,324,723 | $7,321,700 | $6,715,570 | ||||||||||
(a) Includes net deferred charges of: | $2,031 | $2,299 | $2,686 | $3,031 | $3,399 | ||||||||||
(b) Includes deferred revenues of: | $256 | $284 | $314 | $344 | $375 | ||||||||||
(c) Represents the unrealized net loss and unamortized prior service costs on post retirement obligations, and unrealized net gain (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. A reconciliation of net income attributable to common shareholders to FFO is provided below:
Adjusted FFO
In addition to FFO, we compute Adjusted FFO ("AFFO") as a supplemental measure of operating performance. AFFO is calculated utilizing 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 AFFO is provided below:
Three Months Ended March 31, | ||||||
2021 | 2020 | |||||
Net income attributable to common shareholders | $31,347 | $43,284 | ||||
Real estate depreciation and amortization | 90,707 | 89,511 | ||||
Adjustments for unconsolidated joint ventures | 2,599 | 2,242 | ||||
Income allocated to non-controlling interests | 1,126 | 1,282 | ||||
Funds from operations | $125,779 | $136,319 | ||||
Less: recurring capitalized expenditures | (12,680 | ) | (14,825 | ) | ||
Adjusted funds from operations | $113,099 | $121,494 | ||||
Weighted average number of common shares outstanding: | ||||||
EPS diluted | 99,621 | 99,380 | ||||
FFO/AFFO diluted | 101,341 | 101,128 | ||||
Three Months Ended March 31, | ||||||
2021 | 2020 | |||||
Total Earnings Per Common Share - Diluted | $0.31 | $0.43 | ||||
Real estate depreciation and amortization | 0.89 | 0.89 | ||||
Adjustments for unconsolidated joint ventures | 0.03 | 0.02 | ||||
Income allocated to non-controlling interests | 0.01 | 0.01 | ||||
FFO per common share - Diluted | $1.24 | $1.35 | ||||
Less: recurring capitalized expenditures | (0.12 | ) | (0.15 | ) | ||
AFFO per common share - Diluted | $1.12 | $1.20 | ||||
CAMDEN | NON-GAAP FINANCIAL MEASURES | |
DEFINITIONS & RECONCILIATIONS | ||
(In thousands, except per share amounts) | ||
(Unaudited) | ||
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). Guidance excludes gains, if any, on properties not currently held for sale 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 per diluted share is provided below:
2Q21 Range | 2021 Range | ||||||||
Low | High | Low | High | ||||||
Expected earnings per common share - diluted | $0.25 | $0.31 | $0.84 | $1.14 | |||||
Expected real estate depreciation and amortization | 0.93 | 0.93 | 3.95 | 3.95 | |||||
Expected adjustments for unconsolidated joint ventures | 0.03 | 0.03 | 0.10 | 0.10 | |||||
Expected income allocated to non-controlling interests | 0.01 | 0.01 | 0.05 | 0.05 | |||||
Expected FFO per share - diluted | $1.22 | $1.28 | $4.94 | $5.24 | |||||
Note: This table contains forward-looking statements. Please see paragraph regarding forward-looking statements earlier in this document. | |||||||||
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 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:
Three months ended March 31, | ||||||
2021 | 2020 | |||||
Net income | $32,473 | $44,467 | ||||
Less: Fee and asset management income | (2,206 | ) | (2,527 | ) | ||
Less: Interest and other income | (332 | ) | (329 | ) | ||
Less: (Income)/loss on deferred compensation plans | (3,626 | ) | 14,860 | |||
Plus: Property management expense | 6,124 | 6,527 | ||||
Plus: Fee and asset management expense | 1,132 | 843 | ||||
Plus: General and administrative expense | 14,222 | 13,233 | ||||
Plus: Interest expense | 23,644 | 19,707 | ||||
Plus: Depreciation and amortization expense | 93,141 | 91,859 | ||||
Plus: Expense/(benefit) on deferred compensation plans | 3,626 | (14,860 | ) | |||
Less: Gain on sale of land | — | (382 | ) | |||
Less: Equity in income of joint ventures | (1,914 | ) | (2,122 | ) | ||
Plus: Income tax expense | 352 | 467 | ||||
NOI | $166,636 | $171,743 | ||||
"Same Property" Communities | $150,483 | $155,954 | ||||
Non-"Same Property" Communities | 14,155 | 14,427 | ||||
Development and Lease-Up Communities | 1,440 | (75 | ) | |||
Dispositions/Other | 558 | 1,437 | ||||
NOI | $166,636 | $171,743 | ||||
CAMDEN | NON-GAAP FINANCIAL MEASURES | |
DEFINITIONS & RECONCILIATIONS | ||
(In thousands, except per share amounts) | ||
(Unaudited) | ||
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 and income (loss) allocated to non-controlling interests. 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:
Three months ended March 31, | ||||||
2021 | 2020 | |||||
Net income attributable to common shareholders | $31,347 | $43,284 | ||||
Plus: Interest expense | 23,644 | 19,707 | ||||
Plus: Depreciation and amortization expense | 93,141 | 91,859 | ||||
Plus: Income allocated to non-controlling interests | 1,126 | 1,183 | ||||
Plus: Income tax expense | 352 | 467 | ||||
Less: Gain on sale of land | — | (382 | ) | |||
Less: Equity in income of joint ventures | (1,914 | ) | (2,122 | ) | ||
Adjusted EBITDA | $147,696 | $153,996 | ||||
Annualized Adjusted EBITDA | $590,784 | $615,984 | ||||
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:
Net Debt:
Average monthly balance for the | ||||||
Three months ended March 31, | ||||||
2021 | 2020 | |||||
Unsecured notes payable | $3,167,246 | $2,633,950 | ||||
Total debt | 3,167,246 | 2,633,950 | ||||
Less: Cash and cash equivalents | (289,901 | ) | (20,184 | ) | ||
Net debt | $2,877,345 | $2,613,766 | ||||
Net Debt to Annualized Adjusted EBITDA:
Three months ended March 31, | ||||
2021 | 2020 | |||
Net debt | $2,877,345 | $2,613,766 | ||
Annualized Adjusted EBITDA | 590,784 | 615,984 | ||
Net Debt to Annualized Adjusted EBITDA | 4.9 | x | 4.2 | x |
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