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Camden Property Trust Announces Third Quarter 2012 Operating Results

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 Nine Months Ended
September 30, September 30,

OPERATING DATA

2012   2011 2012   2011
Property revenues
Rental revenues $ 166,179 $ 140,332 $ 477,501 $ 412,794
Other property revenues   28,025       23,892     79,322       68,605  
Total property revenues   194,204       164,224     556,823       481,399  
 
Property expenses
Property operating and maintenance 54,008 48,731 153,491 138,974
Real estate taxes   19,096       16,892     56,586       51,596  
Total property expenses   73,104       65,623     210,077       190,570  
 
Non-property income
Fee and asset management 3,041 2,646 9,572 6,955
Interest and other income (loss) 3 (108 ) (750 ) 4,749
Income (loss) on deferred compensation plans   (1,781 )     (6,096 )   3,820       1,233  
Total non-property income   1,263       (3,558 )   12,642       12,937  
 
Other expenses
Property management 5,509 5,050 15,644 15,478
Fee and asset management 1,864 1,330 5,051 4,220
General and administrative 9,303 8,572 27,712 26,392
Interest 25,865 27,354 78,795 85,472
Depreciation and amortization 52,588 43,367 155,579 133,547
Amortization of deferred financing costs 909 1,344 2,721 4,761
Expense (benefit) on deferred compensation plans   (1,781 )     (6,096 )   3,820       1,233  
Total other expenses   94,257       80,921     289,322       271,103  
 
 
Gain on acquisition of controlling interests in joint ventures - - 40,191 -
Gain on sale of properties, including land - - - 4,748
Gain on sale of unconsolidated joint venture interests - - - 1,136
Loss on discontinuation of hedging relationship - - - (29,791 )
Equity in income (loss) of joint ventures   3,688       (556 )   4,686       (166 )
Income from continuing operations before income taxes 31,794 13,566 114,943 8,590
Income tax expense - current   (334 )     (313 )   (992 )     (1,889 )
Income from continuing operations 31,460 13,253 113,951 6,701
Income from discontinued operations 343 1,098 1,262 3,196
Gain on sale of discontinued operations, net of tax   -       -     32,541       -  
Net income 31,803 14,351 147,754 9,897
Less income allocated to noncontrolling interests from continuing operations (1,100 ) (752 ) (3,009 ) (2,089 )
Less income, including gain on sale, allocated to noncontrolling interests from discontinued operations - (9 ) (670 ) (29 )
Less income allocated to perpetual preferred units - (1,750 ) (776 ) (5,250 )
Less write off of original issuance costs of redeemed perpetual preferred units   -       -     (2,075 )     -  
Net income attributable to common shareholders $ 30,703     $ 11,840   $ 141,224     $ 2,529  
 
 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income $ 31,803 $ 14,351 $ 147,754 $ 9,897
Other comprehensive income
Unrealized loss on cash flow hedging activities - - - (2,692 )
Reclassification of net losses on cash flow hedging activities - 108 - 39,660
Reclassification of gain on available-for-sale investment to earnings, net of tax - - - (3,309 )
Reclassification of prior service cost on post retirement obligations   7       -     23       -  
Comprehensive income 31,810 14,459 147,777 43,556
Less income allocated to noncontrolling interests from continuing operations (1,100 ) (752 ) (3,009 ) (2,089 )
Less income, including gain on sale, allocated to noncontrolling interests from discontinued operations - (9 ) (670 ) (29 )
Less income allocated to perpetual preferred units - (1,750 ) (776 ) (5,250 )
Less write off of original issuance costs of redeemed perpetual preferred units   -       -     (2,075 )     -  
Comprehensive income attributable to common shareholders $ 30,710     $ 11,948   $ 141,247     $ 36,188  
 
 

PER SHARE DATA

Net income attributable to common shareholders - basic $ 0.36 $ 0.16 $ 1.69 $ 0.03
Net income attributable to common shareholders - diluted 0.35 0.16 1.66 0.03
Income (loss) from continuing operations attributable to common shareholders - basic 0.35 0.14 1.29 (0.01 )
Income (loss) from continuing operations attributable to common shareholders - diluted 0.35 0.14 1.27 (0.01 )
 
Weighted average number of common and
common equivalent shares outstanding:
Basic 85,631 73,242 82,923 72,502
Diluted 86,293 74,274 84,694 72,502
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 Nine Months Ended
September 30, September 30,

FUNDS FROM OPERATIONS

2012   2011 2012   2011
 
Net income attributable to common shareholders (a) $ 30,703 $ 11,840 $ 141,224 $ 2,529
Real estate depreciation from continuing operations 51,477 42,095 152,246 129,778
Real estate depreciation and amortization from discontinued operations 221 1,191 844 3,564
Adjustments for unconsolidated joint ventures 1,885 3,223 6,198 7,042
Income allocated to noncontrolling interests 702 458 2,504 1,494
(Gain) on sale of unconsolidated joint venture property (2,875 ) - (2,875 ) -
(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 $ 82,113     $ 58,807 $ 227,409     $ 143,271  
 

PER SHARE DATA

Funds from operations - diluted $ 0.93 $ 0.77 $ 2.65 $ 1.89
Cash distributions 0.56 0.49 1.68 1.47
 
Weighted average number of common and
common equivalent shares outstanding:
FFO - diluted 88,514 76,494 85,822 75,685
 

PROPERTY DATA

Total operating properties (end of period) (b) 203 197 203 197
Total operating apartment homes in operating properties (end of period) (b) 68,831 67,491 68,831 67,491
Total operating apartment homes (weighted average) 54,934 50,921 53,870 50,895
Total operating apartment homes - excluding discontinued operations (weighted average) 54,461 48,627 53,204 48,601

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

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

         
CAMDEN BALANCE SHEETS
(In thousands)
                     
 
(Unaudited) Sept 30, Jun 30, Mar 31, Dec 31, Sep 30,
2012   2012   2012   2011   2011
ASSETS
Real estate assets, at cost
Land $ 929,289 $ 893,910 $ 868,964 $ 768,016 $ 766,302
Buildings and improvements   5,359,707       5,203,675       5,068,560       4,751,654       4,758,397  
6,288,996 6,097,585 5,937,524 5,519,670 5,524,699
Accumulated depreciation   (1,542,530 )     (1,505,862 )     (1,458,451 )     (1,432,799 )     (1,421,867 )
Net operating real estate assets 4,746,466 4,591,723 4,479,073 4,086,871 4,102,832
Properties under development, including land 280,948 297,712 301,282 299,870 274,201
Investments in joint ventures 46,566 47,776 49,436 44,844 37,033
Properties held for sale   6,373       -       -       11,131       -  
Total real estate assets 5,080,353 4,937,211 4,829,791 4,442,716 4,414,066
Accounts receivable - affiliates 28,874 29,940 29,742 31,035 31,395
Other assets, net (a) 96,401 88,002 89,706 88,089 87,657
Cash and cash equivalents 5,590 52,126 49,702 55,159 56,099
Restricted cash   6,742       5,295       5,074       5,076       5,357  
Total assets $ 5,217,960     $ 5,112,574     $ 5,004,015     $ 4,622,075     $ 4,594,574  
 
 
 
LIABILITIES AND EQUITY
Liabilities
Notes payable
Unsecured $ 1,415,354 $ 1,381,152 $ 1,380,952 $ 1,380,755 $ 1,380,560
Secured 978,371 1,015,260 1,050,154 1,051,357 1,052,544
Accounts payable and accrued expenses 118,879 87,041 105,370 93,747 97,613
Accrued real estate taxes 43,757 31,607 17,991 21,883 37,721
Distributions payable 49,940 49,135 47,594 39,364 39,319
Other liabilities (b)   78,551       83,471       90,423       109,276       111,043  
Total liabilities 2,684,852 2,647,666 2,692,484 2,696,382 2,718,800
 
Commitments and contingencies
 
Perpetual preferred units - - - 97,925 97,925
 
Equity
Common shares of beneficial interest 959 945 919 845 839
Additional paid-in capital 3,580,528 3,501,354 3,327,961 2,901,024 2,861,139
Distributions in excess of net income attributable to common shareholders (692,235 ) (674,221 ) (648,074 ) (690,466 ) (700,897 )
Treasury shares, at cost (425,756 ) (430,958 ) (437,215 ) (452,003 ) (452,244 )
Accumulated other comprehensive income (loss) (c)   (660 )     (667 )     (675 )     (683 )     201  
Total common equity 2,462,836 2,396,453 2,242,916 1,758,717 1,709,038
Noncontrolling interests   70,272       68,455       68,615       69,051       68,811  
Total equity   2,533,108       2,464,908       2,311,531       1,827,768       1,777,849  
Total liabilities and equity $ 5,217,960     $ 5,112,574     $ 5,004,015     $ 4,622,075     $ 4,594,574  
 
 
 
(a) Includes:
net deferred charges of: $ 13,695 $ 14,432 $ 15,267 $ 16,102 $ 16,868
 
(b) Includes:
deferred revenues of: $ 1,746 $ 2,012 $ 2,337 $ 2,140 $ 2,213
distributions in excess of investments in joint ventures of: $ 16,708 $ 16,499 $ 16,298 $ 30,596 $ 31,799
fair value adjustment of derivative instruments: $ 185 $ 5,918 $ 11,574 $ 16,486 $ 22,192
 
(c) Represents the unrealized (loss)/gain and unamortized 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 Nine Months Ended
September 30, September 30,
2012   2011 2012   2011
Net income (loss) attributable to common shareholders (a) $ 30,703 $ 11,840 $ 141,224 $ 2,529
Real estate depreciation from continuing operations 51,477 42,095 152,246 129,778
Real estate depreciation and amortization from discontinued operations 221 1,191 844 3,564
Adjustments for unconsolidated joint ventures 1,885 3,223 6,198 7,042
Income allocated to noncontrolling interests 702 458 2,504 1,494
(Gain) on sale of unconsolidated joint venture property (2,875 ) - (2,875 ) -
(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 $ 82,113     $ 58,807   $ 227,409     $ 143,271  
 
Weighted average number of common and
common equivalent shares outstanding:
EPS diluted 86,293 74,274 84,694 72,502
FFO diluted 88,514 76,494 85,822 75,685
 
Net income (loss) attributable to common shareholders - diluted $ 0.35 $ 0.16 $ 1.66 $ 0.03
FFO per common share - diluted $ 0.93 $ 0.77 $ 2.65 $ 1.89
 
 
(a) Includes a $29.8 million charge related to a loss on the discontinuation of a hedging relationship for the nine months ended September 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:

 
4Q12 Range 2012 Range
Low   High Low   High
 
Expected net income attributable to common shareholders per share - diluted $ 0.42 $ 0.46 $ 2.06 $ 2.10
Expected real estate depreciation from continuing operations 0.56 0.56 2.33 2.33
Expected real estate depreciation and amortization from discontinued operations 0.00 0.00 0.01 0.01
Expected adjustments for unconsolidated joint ventures (0.05 ) (0.05 ) 0.02 0.02
Expected income allocated to noncontrolling interests 0.01 0.01 0.04 0.04

(Gain) on sale of unconsolidated joint venture property

0.00 0.00 (0.03 ) (0.03 )
Realized (gain) on acquisition of controlling interests in joint ventures 0.00 0.00 (0.46 ) (0.46 )
Realized (gain) on sale of discontinued operations, net of tax   0.00       0.00     (0.38 )     (0.38 )
Expected FFO per share - diluted $ 0.94 $ 0.98 $ 3.59 $ 3.63
 
 
 
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 Nine Months Ended
September 30, September 30,
2012   2011 2012   2011
Net income attributable to common shareholders $ 30,703 $ 11,840 $ 141,224 $ 2,529
Less: Fee and asset management income (3,041 ) (2,646 ) (9,572 ) (6,955 )
Less: Interest and other (income) loss (3 ) 108 750 (4,749 )
Less: Income (loss) on deferred compensation plans 1,781 6,096 (3,820 ) (1,233 )
Plus: Property management expense 5,509 5,050 15,644 15,478
Plus: Fee and asset management expense 1,864 1,330 5,051 4,220
Plus: General and administrative expense 9,303 8,572 27,712 26,392
Plus: Interest expense 25,865 27,354 78,795 85,472
Plus: Depreciation and amortization 52,588 43,367 155,579 133,547
Plus: Amortization of deferred financing costs 909 1,344 2,721 4,761
Plus: Expense (benefit) on deferred compensation plans (1,781 ) (6,096 ) 3,820 1,233
Less: Gain on acquisition of controlling interests in joint ventures - - (40,191 ) -
Less: Gain on sale of properties, including land - - - (4,748 )
Less: Gain on sale of unconsolidated joint venture interests - - - (1,136 )
Plus: Loss on discontinuation of hedging relationship - - - 29,791
Less: Equity in income (loss) of joint ventures (3,688 ) 556 (4,686 ) 166
Plus: Income tax expense - current 334 313 992 1,889
Less: Income from discontinued operations (343 ) (1,098 ) (1,262 ) (3,196 )
Less: Gain on sale of discontinued operations, net of tax - - (32,541 ) -
Plus: Income allocated to noncontrolling interests from continuing operations 1,100 752 3,009 2,089
Plus: Income, including gain on sale, allocated to noncontrolling interests from discontinued operations - 9 670 29
Plus: Income allocated to perpetual preferred units - 1,750 776 5,250
Plus: Write off of original issuance costs of redeemed perpetual preferred units   -       -     2,075       -  
Net Operating Income (NOI) $ 121,100 $ 98,601 $ 346,746 $ 290,829
 
"Same Property" Communities $ 105,939 $ 95,735 $ 309,612 $ 282,528
Non-"Same Property" Communities 13,300 2,567 33,127 7,839
Development and Lease-Up Communities 1,148 - 1,476 -
Other   713       299     2,531       462  
Net Operating Income (NOI) $ 121,100 $ 98,601 $ 346,746 $ 290,829
 
 

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 Nine Months Ended
September 30, September 30,
2012   2011 2012   2011
Net income attributable to common shareholders $ 30,703 $ 11,840 $ 141,224 $ 2,529
Plus: Interest expense 25,865 27,354 78,795 85,472
Plus: Amortization of deferred financing costs 909 1,344 2,721 4,761
Plus: Depreciation and amortization 52,588 43,367 155,579 133,547
Plus: Income allocated to perpetual preferred units - 1,750 776 5,250
Plus: Write off of original issuance costs of redeemed perpetual preferred units - - 2,075 -
Plus: Income, including gain on sale, allocated to noncontrolling interests from discontinued operations - 9 670 29
Plus: Income allocated to noncontrolling interests from continuing operations 1,100 752 3,009 2,089
Plus: Income tax expense - current 334 313 992 1,889
Plus: Real estate depreciation and amortization from discontinued operations 221 1,191 844 3,564
Less: Gain on sale of properties, including land - - - (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 (loss) of joint ventures (3,688 ) 556 (4,686 ) 166
Less: Gain on sale of discontinued operations, net of tax - - (32,541 ) -
Plus: Loss on discontinuation of hedging relationship   -       -     -       29,791  
EBITDA $ 108,032 $ 88,476 $ 309,267 $ 263,203




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