EX-99.1 2 exhibit991er3q18.htm EXHIBIT 99.1 Exhibit
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CAMDEN PROPERTY TRUST ANNOUNCES THIRD QUARTER 2018 OPERATING RESULTS

Houston, Texas (October 25, 2018) - Camden Property Trust (NYSE:CPT) announced today operating results for the three and nine months ended September 30, 2018. Net Income Attributable to Common Shareholders (“EPS”), Funds from Operations (“FFO”), and Adjusted Funds from Operations (“AFFO”) for the three and nine months ended September 30, 2018 are detailed below. A reconciliation of EPS to FFO is included in the financial tables accompanying this press release.

 
Three Months Ended
Nine Months Ended
 
September 30
September 30
Per Diluted Share
2018
2017
2018
2017
EPS
$0.40
$0.38
$1.22
$1.20
FFO
$1.20
$1.11
$3.54
$3.35
AFFO
$1.00
$0.92
$3.04
$2.87

 
Quarterly Growth
Sequential Growth
Year-to-Date Growth
Same Property Results
3Q18 vs. 3Q17
3Q18 vs. 2Q18
2018 vs. 2017
Revenues
3.1%
1.1%
3.2%
Expenses
1.9%
2.7%
2.4%
Net Operating Income ("NOI")
3.8%
0.2%
3.6%

Same Property Results
3Q18

3Q17

2Q18

Occupancy
95.9
%
95.9
%
95.8
%

“We are pleased to report another strong quarter of performance, with property NOI growth and FFO per share both slightly better than anticipated,” said Richard J. Campo, Camden’s Chairman and CEO.  “As a result, we have increased the midpoint of our 2018 FFO guidance from $4.74 to $4.76 per share, and raised the midpoint of expected same property NOI growth from 3.0% to 3.2%.”

The Company defines same property communities as communities owned and stabilized since January 1, 2017, 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.

Development Activity
During the quarter, construction commenced at Camden Buckhead in Atlanta, GA. Subsequent to quarter-end, lease-up was completed at Camden NoMa II in Washington, DC.

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

% Leased

Community Name
Location
Units
Cost

as of 10/23/2018

Camden NoMa II
Washington, DC
405
$108.4
94
%
Camden Shady Grove
Rockville, MD
457
113.9

85
%
Total
 
862
$222.3

 

1

Development Communities - Construction Ongoing ($ in millions)
 
 
Total
Total
% Leased

Community Name
Location
Units
Budget
as of 10/23/2018

Camden Washingtonian
Gaithersburg, MD
365
$90.0
58
%
Camden McGowen Station
Houston, TX
315
90.0
50
%
Camden North End I
Phoenix, AZ
441
105.0
44
%
Camden Grandview II
Charlotte, NC
28
21.0
 
Camden RiNo
Denver, CO
233
75.0
 
Camden Downtown I
Houston, TX
271
132.0
 
Camden Lake Eola
Orlando, FL
360
120.0
 
Camden Buckhead
Atlanta, GA
365
160.0
 
Total
 
2,378
$793.0
 

Acquisition/Disposition Activity
During the quarter, the Company acquired Camden Thornton Park, a 299-home apartment community in Orlando, FL, for approximately $89.8 million. Camden also sold approximately 14.1 acres of land adjacent to two development communities in Phoenix, AZ for approximately $11.5 million. The Company does not expect to complete any additional acquisitions or dispositions during the fourth quarter of 2018.

Capital Markets Transactions
In October 2018, Camden retired $175.0 million of 2.86% variable rate secured conventional mortgage notes and $205.0 million of 5.77% secured conventional mortgage notes.

In October 2018, the Company issued $400 million senior unsecured notes under its existing shelf registration statement. These ten-year notes were offered to the public at 99.893% of par value with a coupon of 4.100%. After giving effect to the settlement of in-place swap agreements and deducting the underwriting discounts and other estimated expenses of the offering, the effective annual interest rate on the notes is approximately 3.74%. The Company received net proceeds of approximately $396.1 million, net of underwriting discounts and other estimated offering expenses.

In September 2018, Camden entered into a $100.0 million three-year unsecured floating-rate term loan which was funded in October 2018. The interest rate on the term loan is based on LIBOR plus a margin which is subject to change as our credit ratings change. The current margin is 0.85%.

Earnings Guidance
Camden updated its earnings guidance for 2018 based on its current and expected views of the apartment market and general economic conditions, and provided guidance for fourth quarter 2018 as detailed below.

 
4Q18
2018
2018 Midpoint
 
Per Diluted Share
Range
Range
Current
Prior
Change
EPS
$0.40 - $0.44
$1.62 - $1.66
$1.64
$1.61
$0.03
FFO
$1.20 - $1.24
$4.74 - $4.78
$4.76
$4.74
$0.02

 
2018
2018 Midpoint
 
Same Property Growth
Range
Current
Prior
Change
Revenues
3.05% - 3.25%
3.15%
3.15%
0.00%
Expenses
2.95% - 3.15%
3.05%
3.50%
(0.45)%
NOI
3.00% - 3.40%
3.20%
3.00%
0.20%


2

Camden intends to update its earnings guidance to the market on a quarterly basis. Additional information on the Company’s 2018 financial outlook and a reconciliation of expected EPS to expected FFO are included in the financial tables accompanying this press release.

Conference Call
Friday, October 26, 2018 at 10:00 AM CT
Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061
Passcode: 8427208
Webcast: http://services.choruscall.com/links/cpt181026.html

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 (the “Company”) 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 engaged in the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. Camden owns interests in and operates 159 properties containing 54,480 apartment homes across the United States. Upon completion of 8 properties currently under development, the Company’s portfolio will increase to 56,858 apartment homes in 167 properties. Camden was recently named by FORTUNE® Magazine for the eleventh consecutive year as one of the “100 Best Companies to Work For” in America, ranking #24.

For additional information, please contact Camden’s Investor Relations Department at (713) 354-2787 or access our website at camdenliving.com.




3


 
 
 
CAMDEN
 
OPERATING RESULTS
 
 
(In thousands, except per share amounts)
 
 
 
(Unaudited)
 
Three Months Ended September 30,
 
 Nine Months Ended September 30,
 
2018
2017
 
2018
2017
OPERATING DATA
 
 
 
 
 
Property revenues
 
 
 
 
 
Rental revenues (a)

$212,984


$194,690

 

$625,123


$573,262

Other property revenues (a)
28,786

33,488

 
84,463

97,807

Total property revenues
241,770

228,178

 
709,586

671,069

 
 
 
 
 
 
Property expenses
 
 
 
 
 
Property operating and maintenance (b)
56,973

60,090

 
165,624

164,188

Real estate taxes
30,860

28,193

 
91,235

83,916

Total property expenses
87,833

88,283

 
256,859

248,104

 
 
 
 
 
 
Non-property income
 
 
 
 
 
Fee and asset management
1,827

2,116

 
5,651

5,806

Interest and other income
385

385

 
1,669

1,579

Income on deferred compensation plans
3,539

3,648

 
3,769

11,706

Total non-property income
5,751

6,149

 
11,089

19,091

 
 
 
 
 
 
Other expenses
 
 
 
 
 
Property management
6,303

6,201

 
19,415

19,782

Fee and asset management
1,140

973

 
3,193

2,818

General and administrative (c)
12,618

12,266

 
37,113

37,585

Interest
21,235

21,210

 
62,216

66,132

Depreciation and amortization
76,476

67,014

 
222,269

195,781

Expense on deferred compensation plans
3,539

3,648

 
3,769

11,706

Total other expenses
121,311

111,312

 
347,975

333,804

 
 
 
 
 
 
Loss on early retirement of debt
—

—

 
—

(323
)
Equity in income of joint ventures (d)
1,943

1,255

 
5,644

4,857

Income from continuing operations before income taxes
40,320

35,987

 
121,485

112,786

Income tax expense
(330
)
(512
)
 
(1,098
)
(1,008
)
Net income
39,990

35,475

 
120,387

111,778

Less income allocated to non-controlling interests from
continuing operations
(1,124
)
(1,091
)
 
(3,455
)
(3,345
)
Net income attributable to common shareholders

$38,866


$34,384

 

$116,932


$108,433

 
 
 
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
 
 
 
 
Net income
$39,990
$35,475
 
$120,387
$111,778
Other comprehensive income
 
 
 
 
 
Unrealized gain on cash flow hedging activities
5,202

1,754

 
13,984

1,754

Reclassification of net loss on cash flow hedging activities, prior service cost and net loss on post retirement obligation
35

34

 
104

102

Comprehensive income
45,227

37,263

 
134,475

113,634

Less income allocated to noncontrolling interests from continuing operations
(1,124
)
(1,091
)
 
(3,455
)
(3,345
)
Comprehensive income attributable to common shareholders

$44,103


$36,172

 

$131,020


$110,289

 
 
 
 
 
 
PER SHARE DATA
 
 
 
 
 
 
 
 
 
 
 
Total earnings per common share - basic

$0.41


$0.38

 

$1.22


$1.20

Total earnings per common share - diluted
0.40

0.38

 
1.22

1.20

 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
     Basic
95,257

91,011

 
95,190

90,351

     Diluted
95,417

92,033

 
95,333

91,345



(a) Upon our adoption of ASU 2014-09 on January 1, 2018, we are now presenting certain revenue items, historically included as a component of other property revenues, as rental revenues due to the nature and timing of revenue recognition for these items being more closely aligned to a lease. This new presentation has been applied prospectively as this reclassification will not have an impact upon total property revenues or the opening balance of retained earnings. Approximately $5.5 million and  $16.9 million of rental revenue is related to this presentation for the three and nine months ended September 30, 2018, respectively. Had ASU 2014-09 been effective as of January 1, 2017, we would have reclassified approximately $5.7 million and $16.7 million from other property revenues to rental revenue for the three and nine months ended September 30, 2017, respectively.
(b) Includes approximately $3.9 million in storm-related expenses related to Hurricanes Harvey and Irma for both the three and nine months ended September 30, 2017.
(c) Includes approximately $0.7 million in storm-related expenses related to Hurricanes Harvey and Irma for both the three and nine months ended September 30, 2017.
(d) Includes approximately $0.4 million in storm-related expenses related to Hurricanes Harvey and Irma for both the three and nine months ended September 30, 2017.

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

4


 
 
 
CAMDEN
 
FUNDS FROM OPERATIONS
 
 
(In thousands, except per share and property data amounts)
 
 
 
(Unaudited)
 
Three Months Ended September 30,
 
 Nine Months Ended September 30,
 
2018
2017
 
2018
2017
FUNDS FROM OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to common shareholders (a)

$38,866


$34,384

 

$116,932


$108,433

 Real estate depreciation and amortization
74,841

65,489

 
217,416

191,092

 Adjustments for unconsolidated joint ventures
2,239

2,223

 
6,743

6,650

 Income allocated to non-controlling interests
1,124

1,091

 
3,455

3,345

     Funds from operations

$117,070


$103,187

 

$344,546


$309,520

 
 
 
 
 
 
     Less: recurring capitalized expenditures (b)
(19,849
)
(17,506
)
 
(49,038
)
(43,975
)
 
 
 
 
 
 
     Adjusted funds from operations - diluted

$97,221


$85,681

 

$295,508


$265,545

 
 
 
 
 
 
PER SHARE DATA
 
 
 
 
 
Funds from operations - diluted

$1.20


$1.11

 

$3.54


$3.35

Adjusted funds from operations - diluted
1.00

0.92

 
3.04

2.87

Distributions declared per common share
0.77

0.75

 
2.31

2.25

 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
FFO/AFFO - diluted
97,238

93,111

 
97,194

92,424

 
 
 
 
 
 
PROPERTY DATA
 
 
 
 
 
Total operating properties (end of period) (c)
159

156

 
159

156

Total operating apartment homes in operating properties (end of period) (c)
54,480

54,038

 
54,480

54,038

Total operating apartment homes (weighted average)
47,010

46,546

 
46,682

46,103


(a) Net income attributable to common shareholders for the three and nine months ended September 30, 2017 included approximately $5.0 million of storm-related expenses related to Hurricanes Harvey and Irma.

(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.


5


 
 
 
CAMDEN
 
BALANCE SHEETS
 
 
(In thousands)
 
 
 
(Unaudited)
 
Sep 30,
2018

Jun 30,
2018

Mar 31,
2018

Dec 31,
2017

Sep 30,
2017

ASSETS
 
 
 
 
 
Real estate assets, at cost
 
 
 
 
 
Land

$1,088,293


$1,066,077


$1,053,578


$1,021,031


$1,016,097

Buildings and improvements
6,828,068

6,620,169

6,494,229

6,269,481

6,269,561

 
7,916,361

7,686,246

7,547,807

7,290,512

7,285,658

Accumulated depreciation
(2,328,092
)
(2,255,737
)
(2,185,452
)
(2,118,839
)
(2,080,989
)
Net operating real estate assets
5,588,269

5,430,509

5,362,355

5,171,673

5,204,669

Properties under development, including land
315,904

373,350

399,903

377,231

363,481

Investments in joint ventures
24,664

26,205

26,863

27,237

28,420

Total real estate assets
5,928,837

5,830,064

5,789,121

5,576,141

5,596,570

Accounts receivable – affiliates
22,605

23,473

23,397

24,038

23,620

Other assets, net (a)(b)
228,468

204,717

199,420

195,764

189,253

Cash and cash equivalents
8,529

64,071

101,401

368,492

350,274

Restricted cash
10,061

9,581

15,036

9,313

9,178

Total assets

$6,198,500


$6,131,906


$6,128,375


$6,173,748


$6,168,895

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
Liabilities
 
 
 
 
 
Notes payable
 
 
 
 
 
Unsecured

$1,394,178


$1,339,659


$1,339,142


$1,338,628


$1,338,117

Secured
865,431

865,629

865,798

865,970

866,134

Accounts payable and accrued expenses
140,046

127,777

123,706

128,313

127,557

Accrued real estate taxes
70,174

52,461

29,061

51,383

70,027

Distributions payable
74,976

75,071

75,083

72,943

72,962

Other liabilities (b)(c)
178,898

156,767

157,002

154,567

154,506

Total liabilities
2,723,703

2,617,364

2,589,792

2,611,804

2,629,303

 
 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
Non-qualified deferred compensation share awards
60,874

85,938

76,174

77,230

73,015

 
 
 
 
 
 
Equity
 
 
 
 
 
Common shares of beneficial interest
1,030

1,027

1,026

1,028

1,028

Additional paid-in capital
4,147,278

4,132,404

4,132,056

4,137,161

4,134,206

Distributions in excess of net income attributable to common shareholders
(466,512
)
(436,575
)
(396,596
)
(368,703
)
(383,584
)
Treasury shares, at cost
(355,825
)
(355,752
)
(356,687
)
(364,066
)
(364,736
)
Accumulated other comprehensive income (loss) (d)
14,031

8,794

3,579

(57
)
(7
)
Total common equity
3,340,002

3,349,898

3,383,378

3,405,363

3,386,907

Non-controlling interests
73,921

78,706

79,031

79,351

79,670

Total equity
3,413,923

3,428,604

3,462,409

3,484,714

3,466,577

Total liabilities and equity

$6,198,500


$6,131,906


$6,128,375


$6,173,748


$6,168,895

 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 

 
 
 
 
 
 
(a) Includes net deferred charges of:

$538


$724


$929


$1,125


$1,312

 
 
 
 
 
 
(b) Includes net asset fair value of derivative instruments:

$15,674


$10,472


$5,291


$1,690


$1,754

 
 
 
 
 
 
(c) Includes deferred revenues of:

$603


$659


$536


$426


$1,463

 
 
 
 
 
 
(d) Represents the unrealized net loss and unamortized prior service costs on post retirement obligations, and unrealized net gain on cash flow hedging activities.


6


 
 
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 the sale of 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:

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 September 30,
 
 Nine Months Ended September 30,
 
2018
2017
 
2018
2017
Net income attributable to common shareholders

$38,866


$34,384

 

$116,932


$108,433

 Real estate depreciation and amortization
74,841

65,489

 
217,416

191,092

 Adjustments for unconsolidated joint ventures
2,239

2,223

 
6,743

6,650

 Income allocated to non-controlling interests
1,124

1,091

 
3,455

3,345

Funds from operations

$117,070


$103,187

 

$344,546


$309,520

 
 
 
 
 
 
Less: recurring capitalized expenditures
(19,849
)
(17,506
)
 
(49,038
)
(43,975
)
 
 
 
 
 
 
Adjusted funds from operations

$97,221


$85,681

 

$295,508


$265,545

 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
EPS diluted
95,417

92,033

 
95,333

91,345

FFO/AFFO diluted
97,238

93,111

 
97,194

92,424

 
 
 
 
 
 
 
Three Months Ended September 30,
 
 Nine Months Ended September 30,
 
2018
2017
 
2018
2017
Total Earnings Per Common Share - Diluted
$0.40
$0.38
 

$1.22


$1.20

 Real estate depreciation and amortization
0.77

0.70

 
2.23

2.07

 Adjustments for unconsolidated joint ventures
0.02

0.02

 
0.07

0.07

 Income allocated to non-controlling interests
0.01

0.01

 
0.02

0.01

FFO per common share - Diluted

$1.20


$1.11

 

$3.54


$3.35

 
 
 
 
 
 
Less: recurring capitalized expenditures
(0.20
)
(0.19
)
 
(0.50
)
(0.48
)
 
 
 
 
 
 
AFFO per common share - Diluted

$1.00


$0.92

 

$3.04


$2.87

 
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:
 
4Q18

Range
 
2018

Range
 
Low
High
 
Low
High
Expected earnings per common share - diluted

$0.40


$0.44

 

$1.62


$1.66

Expected real estate depreciation and amortization
0.77

0.77

 
3.00

3.00

Expected adjustments for unconsolidated joint ventures
0.02

0.02

 
0.09

0.09

Expected income allocated to non-controlling interests
0.01

0.01

 
0.03

0.03

Expected FFO per share - diluted

$1.20


$1.24

 

$4.74


$4.78



7



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. NOI is further detailed in the Components of Property NOI schedules on page 11. 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 September 30,
 
Nine months ended September 30,
 
2018
2017
 
2018
2017
Net income

$39,990


$35,475

 

$120,387


$111,778

Less: Fee and asset management income
(1,827
)
(2,116
)
 
(5,651
)
(5,806
)
Less: Interest and other income
(385
)
(385
)
 
(1,669
)
(1,579
)
Less: Income on deferred compensation plans
(3,539
)
(3,648
)
 
(3,769
)
(11,706
)
Plus: Property management expense
6,303

6,201

 
19,415

19,782

Plus: Fee and asset management expense
1,140

973

 
3,193

2,818

Plus: General and administrative expense
12,618

12,266

 
37,113

37,585

Plus: Interest expense
21,235

21,210

 
62,216

66,132

Plus: Depreciation and amortization expense
76,476

67,014

 
222,269

195,781

Plus: Expense on deferred compensation plans
3,539

3,648

 
3,769

11,706

Plus: Loss on early retirement of debt
—

—

 
—

323

Less: Equity in income of joint ventures
(1,943
)
(1,255
)
 
(5,644
)
(4,857
)
Plus: Income tax expense
330

512

 
1,098

1,008

NOI

$153,937


$139,895

 

$452,727


$422,965

 
 
 
 
 
 
"Same Property" Communities

$131,943


$127,153

 

$392,276


$378,537

Non-"Same Property" Communities
16,400

13,136

 
47,209

36,947

Development and Lease-Up Communities
4,072

1,406

 
8,978

1,837

Hurricane Expenses
—

(3,944
)
 
—

(3,944
)
Dispositions/Other
1,522

2,144

 
4,264

9,588

NOI

$153,937


$139,895

 

$452,727


$422,965


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, net of tax, 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. A reconciliation of net income attributable to common shareholders to Adjusted EBITDA is provided below:
 
Three months ended September 30,
 
Nine months ended September 30,
 
2018
2017
 
2018
2017
Net income attributable to common shareholders

$38,866


$34,384

 

$116,932


$108,433

Plus: Interest expense
21,235

21,210

 
62,216

66,132

Plus: Depreciation and amortization expense
76,476

67,014

 
222,269

195,781

Plus: Income allocated to non-controlling interests from continuing operations
1,124

1,091

 
3,455

3,345

Plus: Income tax expense
330

512

 
1,098

1,008

Plus: Loss on early retirement of debt
—

—

 
—

323

Less: Equity in income of joint ventures
(1,943
)
(1,255
)
 
(5,644
)
(4,857
)
Adjusted EBITDA

$136,088


$122,956

 

$400,326


$370,165



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