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Camden Property Trust Announces Second Quarter 2012 Operating Results

Stocks in this article: CPT

About Camden

Camden Property Trust, an S&P 400 Company, is a real estate company engaged in the ownership, development, acquisition, management and disposition of multifamily apartment communities. Camden owns interests in and operates 200 properties containing 67,917 apartment homes across the United States. Upon completion of seven properties under development, the Company's portfolio will increase to 70,125 apartment homes in 207 properties. Camden was recently named by FORTUNE® Magazine for the fifth consecutive year as one of the “100 Best Companies to Work For” in America, ranking #7.

For additional information, please contact Camden’s Investor Relations Department at (800) 922-6336 or (713) 354-2787 or access our website at www.camdenliving.com.

                           
CAMDEN OPERATING RESULTS
(In thousands, except per share and property data amounts)
                                     
(Unaudited) Three Months Ended Six Months Ended
June 30,       June 30,

OPERATING DATA

2012       2011       2012       2011
Property revenues
Rental revenues $ 159,318 $ 138,167 $ 313,037 $ 274,002
Other property revenues   26,727           23,235     51,659           45,002  
Total property revenues   186,045           161,402     364,696           319,004  
 
Property expenses
Property operating and maintenance 51,119 46,232 100,338 91,038
Real estate taxes   19,338           17,558     37,709           34,902  
Total property expenses   70,457           63,790     138,047           125,940  
 
Non-property income
Fee and asset management 3,608 2,471 6,531 4,309
Interest and other income (loss) (65 ) 86 (753 ) 4,857
Income (loss) on deferred compensation plans   (2,185 )         1,375     5,601           7,329  
Total non-property income   1,358           3,932     11,379           16,495  
 
Other expenses
Property management 4,851 5,109 10,135 10,428
Fee and asset management 1,444 1,670 3,187 2,890
General and administrative 9,730 8,032 18,409 17,820
Interest 26,247 28,381 52,930 58,118
Depreciation and amortization 53,310 44,754 103,428 90,605
Amortization of deferred financing costs 900 1,890 1,812 3,417
Expense (benefit) on deferred compensation plans   (2,185 )         1,375     5,601           7,329  
Total other expenses   94,297           91,211     195,502           190,607  
 
 
Gain on acquisition of controlling interests in joint ventures - - 40,191 -
Gain on sale of properties, including land - 4,748 - 4,748
Gain on sale of unconsolidated joint venture interests - - - 1,136
Loss on discontinuation of hedging relationship - (29,791 ) - (29,791 )
Equity in income of joint ventures   632           16     998           390  
Income (loss) from continuing operations before income taxes 23,281 (14,694 ) 83,715 (4,565 )
Income tax expense - current   (434 )         (256 )   (658 )         (1,576 )
Income (loss) from continuing operations 22,847 (14,950 ) 83,057 (6,141 )
Income from discontinued operations - 895 353 1,687
Gain on sale of discontinued operations, net of tax   -           -     32,541           -  
Net income (loss) 22,847 (14,055 ) 115,951 (4,454 )
Less income allocated to noncontrolling interests from continuing operations (1,084 ) (781 ) (1,909 ) (1,337 )
Less income, including gain on sale, allocated to noncontrolling interests from discontinued operations - (11 ) (670 ) (20 )
Less income allocated to perpetual preferred units - (1,750 ) (776 ) (3,500 )
Less write off of original issuance costs of redeemed perpetual preferred units   -           -     (2,075 )         -  
Net income (loss) attributable to common shareholders $ 21,763           ($16,597 ) $ 110,521           ($9,311 )
 
 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income (loss) $ 22,847 ($14,055 ) $ 115,951 ($4,454 )
Other comprehensive income
Unrealized loss on cash flow hedging activities - (2,189 ) - (2,692 )
Reclassification of net losses on cash flow hedging activities - 33,786 - 39,552
Reclassification of gain on available-for-sale investment to earnings, net of tax - - - (3,309 )
Reclassification of prior service cost on post retirement obligations   8           -     16           -  
Comprehensive income 22,855 17,542 115,967 29,097
Less income allocated to noncontrolling interests from continuing operations (1,084 ) (781 ) (1,909 ) (1,337 )
Less income, including gain on sale, allocated to noncontrolling interests from discontinued operations - (11 ) (670 ) (20 )
Less income allocated to perpetual preferred units - (1,750 ) (776 ) (3,500 )
Less write off of original issuance costs of redeemed perpetual preferred units   -           -     (2,075 )         -  
Comprehensive income attributable to common shareholders $ 21,771         $ 15,000   $ 110,537         $ 24,240  
 
 

PER SHARE DATA

Net income (loss) attributable to common shareholders - basic $ 0.26 ($0.23 ) $ 1.34 ($0.13 )
Net income (loss) attributable to common shareholders - diluted 0.26 (0.23 ) 1.32 (0.13 )
Income (loss) from continuing operations attributable to common shareholders - basic 0.26 (0.24 ) 0.95 (0.15 )
Income (loss) from continuing operations attributable to common shareholders - diluted 0.26 (0.24 ) 0.94 (0.15 )
 
Weighted average number of common and
common equivalent shares outstanding:
Basic 83,223 72,343 81,554 72,126
Diluted 83,846 72,343 84,461 72,126
 
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 Six Months Ended
June 30, June 30,

FUNDS FROM OPERATIONS

2012         2011 2012         2011
 
Net income (loss) attributable to common shareholders (a) $ 21,763 ($16,597 ) $ 110,521 ($9,311 )
Real estate depreciation from continuing operations 52,197 43,505 101,206 88,108
Real estate depreciation and amortization from discontinued operations - 977 186 1,948
Adjustments for unconsolidated joint ventures 2,038 1,813 4,313 3,819
Income allocated to noncontrolling interests 709 653 1,802 1,036
(Gain) on acquisition of controlling interests in joint ventures - - (40,191 ) -
(Gain) on sale of discontinued operations, net of tax - - (32,541 ) -
(Gain) on sale of unconsolidated joint venture interests   -           -     -             (1,136 )
Funds from operations - diluted $ 76,707         $ 30,351   $ 145,296           $ 84,464  
 

PER SHARE DATA

Funds from operations - diluted $ 0.89 $ 0.40 $ 1.72 $ 1.12
Cash distributions 0.56 0.49 1.12 0.98
 
Weighted average number of common and
common equivalent shares outstanding:
FFO - diluted 86,067 75,523 84,461 75,273
 

PROPERTY DATA

Total operating properties (end of period) (b) 199 196 199 196
Total operating apartment homes in operating properties (end of period) (b) 67,694 67,212 67,694 67,212
Total operating apartment homes (weighted average) 53,720 50,883 53,338 50,849
Total operating apartment homes - excluding discontinued operations (weighted average) 53,720 49,062 53,048 49,061
 

(a)

     

Includes a $29.8 million charge related to a loss on the discontinuation of a hedging relationship for the three and six months ended June 30, 2011.

(b)

Includes joint ventures.

 
                                       
CAMDEN BALANCE SHEETS
(In thousands)
                                                   
 
(Unaudited) Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,
2012         2012         2011         2011         2011
ASSETS
Real estate assets, at cost
Land $ 893,910 $ 868,964 $ 768,016 $ 766,302 $ 760,397
Buildings and improvements   5,203,675             5,068,560             4,751,654             4,758,397             4,711,552  
6,097,585 5,937,524 5,519,670 5,524,699 5,471,949
Accumulated depreciation   (1,505,862 )           (1,458,451 )           (1,432,799 )           (1,421,867 )           (1,378,630 )
Net operating real estate assets 4,591,723 4,479,073 4,086,871 4,102,832 4,093,319
Properties under development, including land 297,712 301,282 299,870 274,201 237,549
Investments in joint ventures 47,776 49,436 44,844 37,033 39,398
Properties held for sale   -             -             11,131             -             -  
Total real estate assets 4,937,211 4,829,791 4,442,716 4,414,066 4,370,266
Accounts receivable - affiliates 29,940 29,742 31,035 31,395 30,401
Other assets, net (a) 88,002 89,706 88,089 87,657 90,346
Cash and cash equivalents 52,126 49,702 55,159 56,099 63,148
Restricted cash   5,295             5,074             5,076             5,357             4,898  
Total assets $ 5,112,574           $ 5,004,015           $ 4,622,075           $ 4,594,574           $ 4,559,059  
 
 
 
LIABILITIES AND EQUITY
Liabilities
Notes payable
Unsecured $ 1,381,152 $ 1,380,952 $ 1,380,755 $ 1,380,560 $ 1,380,368
Secured 1,015,260 1,050,154 1,051,357 1,052,544 1,053,699
Accounts payable and accrued expenses 87,041 105,370 93,747 97,613 78,460
Accrued real estate taxes 31,607 17,991 21,883 37,721 27,424
Distributions payable 49,135 47,594 39,364 39,319 38,966
Other liabilities (b)   83,471             90,423             109,276             111,043             123,829  
Total liabilities 2,647,666 2,692,484 2,696,382 2,718,800 2,702,746
 
Commitments and contingencies
 
Perpetual preferred units - - 97,925 97,925 97,925
 
Equity
Common shares of beneficial interest 945 919 845 839 834
Additional paid-in capital 3,501,354 3,327,961 2,901,024 2,861,139 2,823,690
Distributions in excess of net income attributable to common shareholders (674,221 ) (648,074 ) (690,466 ) (700,897 ) (676,367 )
Treasury shares, at cost (430,958 ) (437,215 ) (452,003 ) (452,244 ) (459,134 )
Accumulated other comprehensive income (loss) (c)   (667 )           (675 )           (683 )           201             93  
Total common equity 2,396,453 2,242,916 1,758,717 1,709,038 1,689,116
Noncontrolling interests   68,455             68,615             69,051             68,811             69,272  
Total equity   2,464,908             2,311,531             1,827,768             1,777,849             1,758,388  
Total liabilities and equity $ 5,112,574           $ 5,004,015           $ 4,622,075           $ 4,594,574           $ 4,559,059  
 
 
 
(a) Includes:
net deferred charges of: $ 14,432 $ 15,267 $ 16,102 $ 16,868 $ 14,484
 
(b) Includes:
deferred revenues of: $ 2,012 $ 2,337 $ 2,140 $ 2,213 $ 2,181
distributions in excess of investments in joint ventures of: $ 16,499 $ 16,298 $ 30,596 $ 31,799 $ 31,040
fair value adjustment of derivative instruments: $ 5,918 $ 11,574 $ 16,486 $ 22,192 $ 27,977
 
(c) Represents the fair value adjustment of derivative instruments and amortization of prior service costs on post retirement obligations.
 
           

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 attributable to
common shares computed in accordance with generally accepted accounting principles (“GAAP”), excluding gains or losses from
depreciable operating property sales, plus real estate depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Camden’s definition of diluted FFO also assumes conversion of all dilutive
convertible securities, including minority interests, which are convertible into common equity. The Company considers FFO to
be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions of
operating properties and excluding depreciation, FFO can help one compare the operating performance of a company's real
estate between periods or as compared to different companies. A reconciliation of net income attributable to common
shareholders to FFO is provided below:
 
Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
Net income (loss) attributable to common shareholders (a) $ 21,763 ($16,597 ) $ 110,521 ($9,311 )
Real estate depreciation from continuing operations 52,197 43,505 101,206 88,108
Real estate depreciation and amortization from discontinued operations - 977 186 1,948
Adjustments for unconsolidated joint ventures 2,038 1,813 4,313 3,819
Income allocated to noncontrolling interests 709 653 1,802 1,036
(Gain) on acquisition of controlling interests in joint ventures - - (40,191 ) -
(Gain) on sale of discontinued operations, net of tax - - (32,541 ) -
(Gain) on sale of unconsolidated joint venture interests   -   -     -     (1,136 )
Funds from operations - diluted $ 76,707 $ 30,351   $ 145,296   $ 84,464  
 
Weighted average number of common and
common equivalent shares outstanding:
EPS diluted 83,846 72,343 84,461 72,126
FFO diluted 86,067 75,523 84,461 75,273
 
Net income (loss) attributable to common shareholders - diluted $ 0.26 ($0.23 ) $ 1.32 ($0.13 )
FFO per common share - diluted $ 0.89 $ 0.40 $ 1.72 $ 1.12
 
 

(a) Includes a $29.8 million charge related to a loss on the discontinuation of a hedging relationship for the three and six months ended June 30, 2011.

 

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 net income attributable to common shareholders (EPS). A reconciliation of the ranges provided for expected net
income attributable to common shareholders per diluted share to expected FFO per diluted share is provided below:
 
3Q12 Range 2012 Range
Low High Low High
 
Expected net income attributable to common shareholders per share - diluted $ 0.30 $ 0.34 $ 1.94 $ 2.02
Expected real estate depreciation from continuing operations 0.55 0.55 2.30 2.30
Expected real estate depreciation and amortization from discontinued operations 0.00 0.00 0.00 0.00
Expected adjustments for unconsolidated joint ventures 0.02 0.02 0.10 0.10
Expected income allocated to noncontrolling interests 0.01 0.01 0.04 0.04

Realized (gain) on acquisition of controlling interests in joint ventures

0.00 0.00 (0.49 ) (0.49 )
Realized (gain) on sale of discontinued operations, net of tax   0.00   0.00     (0.39 )   (0.39 )
Expected FFO per share - diluted $ 0.88 $ 0.92 $ 3.50 $ 3.58
 

Note:  This table contains forward-looking statements. Please see the paragraph regarding forward-looking statements earlier in this document.

                 

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 Six Months Ended
June 30, June 30,
2012 2011 2012 2011
Net income (loss) attributable to common shareholders $ 21,763 ($16,597 ) $ 110,521 ($9,311 )
Less: Fee and asset management income (3,608 ) (2,471 ) (6,531 ) (4,309 )
Less: Interest and other (income) loss 65 (86 ) 753 (4,857 )
Less: Income (loss) on deferred compensation plans 2,185 (1,375 ) (5,601 ) (7,329 )
Plus: Property management expense 4,851 5,109 10,135 10,428
Plus: Fee and asset management expense 1,444 1,670 3,187 2,890
Plus: General and administrative expense 9,730 8,032 18,409 17,820
Plus: Interest expense 26,247 28,381 52,930 58,118
Plus: Depreciation and amortization 53,310 44,754 103,428 90,605
Plus: Amortization of deferred financing costs 900 1,890 1,812 3,417
Plus: Expense (benefit) on deferred compensation plans (2,185 ) 1,375 5,601 7,329
Less: Gain on acquisition of controlling interests in joint ventures - - (40,191 ) -
Less: Gain on sale of properties, including land - (4,748 ) - (4,748 )
Less: Gain on sale of unconsolidated joint venture interests - - - (1,136 )
Plus: Loss on discontinuation of hedging relationship - 29,791 - 29,791
Less: Equity in income of joint ventures (632 ) (16 ) (998 ) (390 )
Plus: Income tax expense - current 434 256 658 1,576
Less: Income from discontinued operations - (895 ) (353 ) (1,687 )
Less: Gain on sale of discontinued operations, net of tax - - (32,541 ) -
Plus: Income allocated to noncontrolling interests from continuing operations 1,084 781 1,909 1,337
Plus: Income, including gain on sale, allocated to noncontrolling interests from discontinued operations - 11 670 20
Plus: Income allocated to perpetual preferred units - 1,750 776 3,500
Plus: Write off of original issuance costs of redeemed perpetual preferred units   -     -     2,075     -  
Net Operating Income (NOI) $ 115,588 $ 97,612 $ 226,649 $ 193,064
 
"Same Property" Communities $ 103,563 $ 95,360 $ 204,668 $ 187,616
Non-"Same Property" Communities 9,491 2,195 17,940 5,271
Development and Lease-Up Communities 1,536 - 2,216 -
Other   998     57     1,825     177  
Net Operating Income (NOI) $ 115,588 $ 97,612 $ 226,649 $ 193,064
 
 

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 noncontrolling 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 Six Months Ended
June 30, June 30,
2012 2011 2012 2011
Net income (loss) attributable to common shareholders $ 21,763 ($16,597 ) $ 110,521 ($9,311 )
Plus: Interest expense 26,247 28,381 52,930 58,118
Plus: Amortization of deferred financing costs 900 1,890 1,812 3,417
Plus: Depreciation and amortization 53,310 44,754 103,428 90,605
Plus: Income allocated to perpetual preferred units - 1,750 776 3,500
Plus: Write off of original issuance costs on redeemed perpetual preferred units - - 2,075 -
Plus: Income, including gain on sale, allocated to noncontrolling interests from discontinued operations - 11 670 20
Plus: Income allocated to noncontrolling interests from continuing operations 1,084 781 1,909 1,337
Plus: Income tax expense - current 434 256 658 1,576
Plus: Real estate depreciation and amortization from discontinued operations - 977 186 1,948
Less: Gain on sale of properties, including land - (4,748 ) - (4,748 )
Less: Gain on sale of unconsolidated joint venture interests - - - (1,136 )
Less: Gain on acquisition of controlling interests in joint ventures - - (40,191 ) -
Less: Equity in income of joint ventures (632 ) (16 ) (998 ) (390 )
Less: Gain on sale of discontinued operations, net of tax - - (32,541 ) -
Plus: Loss on discontinuation of hedging relationship   -     29,791     -     29,791  
EBITDA $ 103,106 $ 87,230 $ 201,235 $ 174,727




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