EX-99.1 2 exhibit991earningsreleaseq.htm EXHIBIT 99.1 Exhibit
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CAMDEN PROPERTY TRUST ANNOUNCES 2016 OPERATING RESULTS, 2017 FINANCIAL OUTLOOK AND FIRST QUARTER 2017 DIVIDEND

Houston, TEXAS (February 7, 2017) - Camden Property Trust (NYSE:CPT) today announced operating results for the three and twelve months ended December 31, 2016. 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, 2016 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
2016
2015
 
2016
2015
EPS
$0.45
$0.67
 
$9.05
$2.76
FFO
$1.15
$1.20
 
$4.64
$4.54
AFFO
$0.98
$1.01
 
$3.99
$3.83
 
Quarterly Growth

Sequential Growth

Year to Date Growth

Same Property Results
4Q16 vs. 4Q15

4Q16 vs. 3Q16

2016 vs. 2015

Revenues
3.1
 %
(0.7
)%
3.9
%
Expenses
(0.8
)%
(7.1
)%
2.2
%
Net Operating Income ("NOI")
5.1
 %
2.9
 %
4.8
%
Same Property Results
4Q16

4Q15

3Q16

Occupancy
94.8
%
95.5
%
95.8
%

“We are pleased to report another solid quarter of results for our company,” said Richard J. Campo, Camden’s Chairman and CEO. “2016 was a successful year for Camden as we further improved our balance sheet and the quality of our portfolio through strategic capital recycling. We expect demand for apartments to remain steady in 2017, but revenue growth to moderate due to increased levels of new supply in many of our markets.”

For 2016, the Company defines same property communities as communities owned and stabilized as of January 1, 2015, excluding 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
Lease-up was completed during the quarter at Camden Chandler in Chandler, AZ, leasing began at Camden Lincoln Station in Denver, CO, and construction was completed at The Camden in Hollywood, CA. The Company also commenced construction at Camden North End I in Phoenix, AZ.

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

Total
% Leased

Community Name
Location
Units

Cost
as of 2/4/2017

The Camden
Hollywood, CA
287

$133.7
88
%
Camden Victory Park
Dallas, TX
423

84.6
80
%
TOTAL
 
710

$218.3
 


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

% Leased

Community Name
Location
Units
Budget

as of 2/4/2017

Camden Gallery
Charlotte, NC
323
$58.0
85
%
Camden Lincoln Station
Denver, CO
267
56.0

33
%
Camden NoMa II
Washington, DC
405
115.0

 
Camden Shady Grove
Rockville, MD
457
116.0

 
Camden McGowen Station
Houston, TX
315
90.0

 
Camden Washingtonian
Gaithersburg, MD
365
90.0

 
Camden North End I
Phoenix, AZ
441
105.0

 
TOTAL
 
2,573
$630.0

 

Earnings Guidance
Camden provided initial earnings guidance for 2017 based on its current and expected views of the apartment market and general economic conditions, and provided guidance for first quarter 2017 as detailed below.

Per Diluted Share
1Q17
2017
EPS
$0.36 - $0.40
$1.59 - $1.79
FFO
$1.06 - $1.10
$4.46 - $4.66
Same Property Growth
2017 Range
2017 Midpoint
Revenues
2.3% - 3.3%
2.8%
Expenses
4.0% - 5.0%
4.5%
NOI
0.8% - 2.8%
1.8%

Camden’s guidance for 2017 same property expense growth is primarily due to higher projected costs for real estate taxes and property insurance. Expenses for those categories in 2016 reflected the impact of property tax refunds and insurance reimbursements recognized during 2016 that are not expected to recur in 2017.

For 2017, the Company defines same property communities as communities owned and stabilized as of January 1, 2016, excluding properties held for sale. Camden intends to update its earnings guidance to the market on a quarterly basis. Additional information on the Company’s 2017 financial outlook 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 2017 dividend of $0.75 per common share. The dividend is payable on April 17, 2017 to holders of record as of March 31, 2017. 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
Wednesday, February 8, 2017 at 11:00 AM CT
Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061
Passcode: 0452454
Webcast: http://services.choruscall.com/links/cpt170208.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 152 properties containing 52,793 apartment homes across the United States. Upon completion of 7 properties under development, the Company’s portfolio will increase to 55,366 apartment homes in 159 properties. Camden was recently named by FORTUNE® Magazine for the ninth consecutive year as one of the “100 Best Companies to Work For” in America, ranking #9.

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,
 
2016
2015
 
2016
2015
OPERATING DATA
 
 
 
 
 
Property revenues
 
 
 
 
 
Rental revenues

$186,461


$185,633

 

$750,597


$721,816

Other property revenues
30,678

29,352

 
125,850

113,802

Total property revenues
217,139

214,985

 
876,447

835,618

 
 
 
 
 
 
Property expenses
 
 
 
 
 
Property operating and maintenance
49,976

50,705

 
206,780

202,105

Real estate taxes
23,700

24,353

 
104,575

98,895

Total property expenses
73,676

75,058

 
311,355

301,000

 
 
 
 
 
 
Non-property income
 
 
 
 
 
Fee and asset management
1,641

1,916

 
6,864

6,999

Interest and other income
836

289

 
2,202

597

Income/(loss) on deferred compensation plans
730

1,607

 
5,511

(264
)
Total non-property income
3,207

3,812

 
14,577

7,332

 
 
 
 
 
 
Other expenses
 
 
 
 
 
Property management
5,978

5,632

 
25,125

23,055

Fee and asset management
987

1,318

 
3,848

4,742

General and administrative
12,579

13,113

 
47,415

46,233

Interest
23,209

23,740

 
93,145

97,312

Depreciation and amortization
62,767

61,684

 
250,146

240,944

Expense/(benefit) on deferred compensation plans
730

1,607

 
5,511

(264
)
Total other expenses
106,250

107,094

 
425,190

412,022

 
 
 
 
 
 
Gain on sale of operating properties, including land
—

19,096

 
295,397

104,288

Equity in income of joint ventures
2,073

1,681

 
7,125

6,168

Income from continuing operations before income taxes
42,493

57,422

 
457,001

240,384

Income tax expense
(413
)
(538
)
 
(1,617
)
(1,872
)
Income from continuing operations
42,080

56,884

 
455,384

238,512

Income from discontinued operations
—

4,918

 
7,605

19,750

Gain on sale of discontinued operations, net of tax
—

—

 
375,237

—

Net income
42,080

61,802

 
838,226

258,262

Less income allocated to non-controlling interests from continuing operations
(1,187
)
(1,209
)
 
(18,403
)
(8,947
)
Net income attributable to common shareholders

$40,893


$60,593

 

$819,823


$249,315

 
 
 
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
 
 
 
 
Net income
$42,080
$61,802
 
$838,226
$258,262
Other comprehensive income
 
 
 
 
 
Unrealized gain (loss) and unamortized prior service cost on post retirement obligation
(80
)
357

 
(80
)
357

Reclassification of net loss on cash flow hedging activities, prior service cost and net loss on post retirement obligation
33

37

 
130

149

Comprehensive income
42,033

62,196

 
838,276

258,768

Less income allocated to non-controlling interests from continuing operations
(1,187
)
(1,209
)
 
(18,403
)
(8,947
)
Comprehensive income attributable to common shareholders

$40,846


$60,987

 

$819,873


$249,821

 
 
 
 
 
 
PER SHARE DATA
 
 
 
 
 
 
 
 
 
 
 
Total earnings per common share - basic

$0.45


$0.67

 

$9.08


$2.77

Total earnings per common share - diluted
0.45

0.67

 
9.05

2.76

Earnings per share from continuing operations - basic
0.45

0.61

 
4.81

2.55

Earnings per share from continuing operations - diluted
0.45

0.61

 
4.79

2.54

 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
     Basic
89,745

89,175

 
89,580

89,120

     Diluted
90,844

90,418

 
89,903

89,490






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,
 
2016
2015
 
2016
2015
FUNDS FROM OPERATIONS
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to common shareholders

$40,893


$60,593

 

$819,823


$249,315

 Real estate depreciation and amortization
61,214

60,084

 
243,908

234,966

 Real estate depreciation from discontinued operations
—

4,202

 
4,327

16,138

 Adjustments for unconsolidated joint ventures
2,250

2,364

 
9,194

9,146

 Income allocated to non-controlling interests
1,187

1,209

 
18,403

8,947

 Gain on sale of operating properties, net of tax
—

(18,870
)
 
(294,954
)
(104,015
)
 Gain on sale of discontinued operations, net of tax
—

—

 
(375,237
)
—

     Funds from operations

$105,544


$109,582

 

$425,464


$414,497

 
 
 
 
 
 
     Less: recurring capitalized expenditures (a)
(15,475
)
(17,429
)
 
(59,084
)
(64,169
)
 
 
 
 
 
 
     Adjusted funds from operations - diluted

$90,069


$92,153

 

$366,380


$350,328

 
 
 
 
 
 
PER SHARE DATA
 
 
 
 
 
Funds from operations - diluted

$1.15


$1.20

 

$4.64


$4.54

Adjusted funds from operations - diluted
0.98

1.01

 
3.99

3.83

Distributions declared per common share
0.75

0.70

 
3.00

2.80

Special Distributions declared per common share
—

—

 
4.25

—

 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
FFO/AFFO - diluted
91,926

91,502

 
91,794

91,386

 
 
 
 
 
 
PROPERTY DATA
 
 
 
 
 
Total operating properties (end of period) (b)
152

172

 
152

172

Total operating apartment homes in operating properties (end of period) (b)
52,793

59,792

 
52,793

59,792

Total operating apartment homes (weighted average)
45,455

52,379

 
48,505

52,006

Total operating apartment homes - excluding discontinued operations (weighted average)
45,455

47,461

 
46,394

47,088


(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.































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,
2016

Sep 30,
2016

Jun 30,
2016

Mar 31,
2016

Dec 31,
2015

 
ASSETS
 
 
 
 
 
 
Real estate assets, at cost
 
 
 
 
 
 
Land

$967,375


$962,507


$989,097


$998,519


$989,247

 
Buildings and improvements
5,967,023

5,910,347

5,956,361

5,978,843

5,911,432

 
 
6,934,398

6,872,854

6,945,458

6,977,362

6,900,679

 
Accumulated depreciation
(1,890,656
)
(1,829,563
)
(1,855,678
)
(1,841,107
)
(1,780,694
)
 
Net operating real estate assets
5,043,742

5,043,291

5,089,780

5,136,255

5,119,985

 
Properties under development, including land
442,292

425,452

446,740

489,730

486,918

 
Investments in joint ventures
30,254

30,046

31,142

32,568

33,698

 
Properties held for sale, including land
 
 
 
 
 
 
Operating properties held for sale (a)
—

—

105,254

—

—

 
Discontinued operations held for sale (b)
—

—

—

238,417

239,063

 
Total real estate assets
5,516,288

5,498,789

5,672,916

5,896,970

5,879,664

 
Accounts receivable – affiliates
24,028

23,998

24,008

24,011

25,100

 
Other assets, net (d)
142,010

143,059

139,263

107,161

116,260

 
Short-term investments (c)
100,000

100,000

—

—

—

 
Cash and cash equivalents
237,364

313,742

341,726

6,935

10,617

 
Restricted cash
8,462

8,691

21,561

5,378

5,971

 
Total assets

$6,028,152


$6,088,279


$6,199,474


$6,040,455


$6,037,612

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
Notes payable
 
 
 
 
 
 
Unsecured

$1,583,236


$1,582,655


$1,582,077


$1,866,502


$1,824,930

 
Secured
897,352

897,971

898,723

899,315

899,757

 
Accounts payable and accrued expenses
137,813

143,193

140,864

140,991

133,353

 
Accrued real estate taxes
49,041

66,079

46,801

25,499

45,223

 
Distributions payable
69,161

82,861

69,116

69,020

64,275

 
Other liabilities (e)
118,959

122,270

117,023

86,423

97,814

 
Total liabilities
2,855,562

2,895,029

2,854,604

3,087,750

3,065,352

 
 
 
 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
Non-qualified deferred compensation share awards
77,037

72,222

72,480

88,550

79,364

 
 
 
 
 
 
 
 
Equity
 
 
 
 
 
 
Common shares of beneficial interest
978

978

978

975

976

 
Additional paid-in capital
3,678,277

3,675,806

3,673,237

3,658,372

3,662,864

 
Distributions in excess of net income attributable to common shareholders
(289,180
)
(261,324
)
(104,004
)
(491,275
)
(458,577
)
 
Treasury shares, at cost
(373,339
)
(373,597
)
(373,914
)
(378,032
)
(386,793
)
 
Accumulated other comprehensive loss (f)
(1,863
)
(1,816
)
(1,848
)
(1,881
)
(1,913
)
 
Total common equity
3,014,873

3,040,047

3,194,449

2,788,159

2,816,557

 
Non-controlling interests
80,680

80,981

77,941

75,996

76,339

 
Total equity
3,095,553

3,121,028

3,272,390

2,864,155

2,892,896

 
Total liabilities and equity

$6,028,152


$6,088,279


$6,199,474


$6,040,455


$6,037,612

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
(a) Operating properties held for sale includes one dual-phase property and one operating property as of June 30, 2016 which were each subsequently sold in July.
 
 
 
 
 
 
 
 
(b) All prior periods presented have been changed to present the 15 operating properties, 19.6 acres of land, and retail center located in Las Vegas, Nevada, which were classified as held for sale at March 31, 2016 and subsequently sold on April 26, 2016. (See page 19 for additional information relating to this sale).
 
 
 
 
 
 
 
 
 
(c) At December 31, 2016, our short-term investments consist wholly of a certificate of deposit that has a maturity date of January 4, 2017.
 
 
 
 
 
 
 
 
(d) Includes net deferred charges of:

$1,915


$2,140


$2,353


$2,600


$2,851

 
 
 
 
 
 
 
 
(e) Includes deferred revenues of:

$1,541


$1,598


$831


$1,797


$1,768

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





 
 
CAMDEN
 
2017 FINANCIAL OUTLOOK
 
 
AS OF FEBRUARY 7, 2017
 
 
 
 
 
 
(Unaudited)
Earnings Guidance - Per Diluted Share
 
 
 Expected FFO per share - diluted
 
$4.46 - $4.66
 
 
 
"Same Property" Communities
 
 
Number of Units
 
41,988
2016 Base Net Operating Income
 
$501 million
Total Revenue Growth
 
2.30% - 3.30%
Total Expense Growth
 
4.00% - 5.00%
Net Operating Income Growth
 
0.80% - 2.80%
Impact from 1% change in NOI Growth is approximately $0.054 / share
 
 
 
 
 
Physical Occupancy
 
94.9%
 
 
 
Capitalized Expenditures
 
 
Recurring
 
$60 - $64 million
Revenue Enhancing Capex and Repositions (a)
 
$24 - $28 million
 
 
 
Acquisitions/Dispositions
 
 
Disposition Volume (consolidated on balance sheet)
 
$0 - $200 million
Acquisition Volume (consolidated on balance sheet)
 
$0 - $200 million
 
 
 
Development
 
 
Development Starts (consolidated on balance sheet)
 
$100 - $300 million
Development Spend (consolidated on balance sheet)
 
$170 - $200 million
 
 
 
Equity in Income of Joint Ventures (FFO)
 
$15 - $17 million
 
 
 
Non-Property Income
 
 
Non-Property Income, Net
 
$4 - $6 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
 
$46 - $50 million
Property management expense
 
$26 - $28 million
Corporate G&A Depreciation/Amortization
 
$6 - $8 million
 
 
 
Capital
 
 
Expected Capital Transactions
 
$0 - $300 million
Expensed Interest
 
$88 - $92 million
Capitalized Interest
 
$14 - $16 million

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


Note: This table contains forward-looking statements. Please see the paragraph regarding forward-looking statements on page 2 of 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 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 December 31,
 
Twelve Months Ended December 31,
 
2016
2015
 
2016
2015
Net income attributable to common shareholders

$40,893


$60,593

 

$819,823


$249,315

 Real estate depreciation and amortization
61,214

60,084

 
243,908

234,966

 Real estate depreciation from discontinued operations
—

4,202

 
4,327

16,138

 Adjustments for unconsolidated joint ventures
2,250

2,364

 
9,194

9,146

 Income allocated to non-controlling interests
1,187

1,209

 
18,403

8,947

 Gain on sale of operating properties, net of tax
—

(18,870
)
 
(294,954
)
(104,015
)
 Gain on sale of discontinued operations, net of tax
—

—

 
(375,237
)
—

Funds from operations

$105,544


$109,582

 

$425,464


$414,497

 
 
 
 
 
 
Less: recurring capitalized expenditures
(15,475
)
(17,429
)
 
(59,084
)
(64,169
)
 
 
 
 
 
 
Adjusted funds from operations

$90,069


$92,153

 

$366,380


$350,328

 
 
 
 
 
 
Weighted average number of common shares outstanding:
 
 
 
 
 
EPS diluted
90,844

90,418

 
89,903

89,490

FFO/AFFO diluted
91,926

91,502

 
91,794

91,386

 
 
 
 
 
 
Total earnings per common share - diluted

$0.45


$0.67

 

$9.05


$2.76

FFO per common share - diluted

$1.15


$1.20

 

$4.64


$4.54

AFFO per common share - diluted

$0.98


$1.01

 

$3.99


$3.83

 
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:
 
1Q17

Range
 
2017

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

$0.36


$0.40

 

$1.59


$1.79

Expected real estate depreciation and amortization
0.67

0.67

 
2.73

2.73

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

 
0.04

0.04

Expected FFO per share - diluted

$1.06


$1.10

 

$4.46


$4.66



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 December 31,
 
Twelve months ended December 31,
 
2016
2015
 
2016
2015
Net income

$42,080


$61,802

 

$838,226


$258,262

Less: Fee and asset management income
(1,641
)
(1,916
)
 
(6,864
)
(6,999
)
Less: Interest and other income
(836
)
(289
)
 
(2,202
)
(597
)
Less: Income/(loss) on deferred compensation plans
(730
)
(1,607
)
 
(5,511
)
264

Plus: Property management expense
5,978

5,632

 
25,125

23,055

Plus: Fee and asset management expense
987

1,318

 
3,848

4,742

Plus: General and administrative expense
12,579

13,113

 
47,415

46,233

Plus: Interest expense
23,209

23,740

 
93,145

97,312

Plus: Depreciation and amortization expense
62,767

61,684

 
250,146

240,944

Plus: Expense/(benefit) on deferred compensation plans
730

1,607

 
5,511

(264
)
Less: Gain on sale of operating properties, including land
—

(19,096
)
 
(295,397
)
(104,288
)
Less: Equity in income of joint ventures
(2,073
)
(1,681
)
 
(7,125
)
(6,168
)
Plus: Income tax expense
413

538

 
1,617

1,872

Less: Income from discontinued operations
—

(4,918
)
 
(7,605
)
(19,750
)
Less: Gain on sale of discontinued operations, net of tax
—

—

 
(375,237
)
—

Net Operating Income (NOI)

$143,463


$139,927

 

$565,092


$534,618

 
 
 
 
 
 
"Same Property" Communities

$124,414


$118,336

 

$482,333


$460,246

Non-"Same Property" Communities
15,233

12,683

 
53,603

37,427

Development and Lease-Up Communities
2,763

1

 
5,036

(7
)
Dispositions/Other
1,053

8,907

 
24,120

36,952

Net Operating Income (NOI)

$143,463


$139,927

 

$565,092


$534,618


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, 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 December 31,
 
Twelve months ended December 31,
 
2016
2015
 
2016
2015
Net income attributable to common shareholders

$40,893


$60,593

 

$819,823


$249,315

Plus: Interest expense
23,209

23,740

 
93,145

97,312

Plus: Depreciation and amortization expense
62,767

61,684

 
250,146

240,944

Plus: Income allocated to non-controlling interests from continuing operations
1,187

1,209

 
18,403

8,947

Plus: Income tax expense
413

538

 
1,617

1,872

Plus: Real estate depreciation from discontinued operations
—

4,202

 
4,327

16,138

Less: Gain on sale of operating properties, including land
—

(19,096
)
 
(295,397
)
(104,288
)
Less: Equity in income of joint ventures
(2,073
)
(1,681
)
 
(7,125
)
(6,168
)
Less: Gain on sale of discontinued operations, net of tax
—

—

 
(375,237
)
—

Adjusted EBITDA

$126,396


$131,189

 

$509,702


$504,072