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Camden Property Trust Announces 2012 Operating Results, 12.5% Dividend Increase And 2013 Financial Outlook

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 192 properties containing 65,005 apartment homes across the United States. Upon completion of nine properties under development, the Company’s portfolio will increase to 67,850 apartment homes in 201 properties. Camden was recently named by FORTUNE® Magazine for the sixth consecutive year as one of the “100 Best Companies to Work For” in America, ranking #10.

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

 
CAMDEN   OPERATING RESULTS
(In thousands, except per share and property data amounts)
     
(Unaudited) Three Months Ended   Twelve Months Ended
December 31, December 31,

OPERATING DATA

2012   2011 2012   2011
Property revenues    
Rental revenues $165,464 $137,113 $626,127 $533,937
Other property revenues 25,968   21,775 101,781   87,137
Total property revenues 191,432   158,888 727,908   621,074
 
Property expenses
Property operating and maintenance 50,226 42,722 196,811 175,000
Real estate taxes 18,621   15,809 72,858   65,128
Total property expenses 68,847   58,531 269,669   240,128
 
Non-property income
Fee and asset management 2,773 3,018 12,345 9,973
Interest and other income (loss) 40 (100) (710) 4,649
Income on deferred compensation plans 952   5,540 4,772   6,773
Total non-property income 3,765   8,458 16,407   21,395
 
Other expenses
Property management 6,152 5,208 21,796 20,686
Fee and asset management 1,580 1,715 6,631 5,935
General and administrative 9,816 9,064 37,528 35,456
Interest 25,487 26,942 104,282 112,414
Depreciation and amortization 52,501 42,428 203,077 171,127
Amortization of deferred financing costs 887 1,116 3,608 5,877
Expense on deferred compensation plans 952   5,540 4,772   6,773
Total other expenses 97,375   92,013 381,694   358,268
 
 
Gain on acquisition of controlling interests in joint ventures 17,227 - 57,418 -
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 of joint ventures 15,489   5,845 20,175   5,679
Income from continuing operations before income taxes 61,691 22,647 170,545 25,845
Income tax expense - current (216)   (331) (1,208)   (2,220)
Income from continuing operations 61,475 22,316 169,337 23,625
Income from discontinued operations 2,144 3,127 9,495 11,715
Gain on sale of discontinued operations, net of tax 82,527   24,621 115,068   24,621
Net income 146,146 50,064 293,900 59,961
Less income allocated to noncontrolling interests from continuing operations (1,893) (1,431) (4,821) (3,453)
Less income, including gain on sale, allocated to noncontrolling interests from discontinued operations (2,087) (33) (2,838) (129)
Less income allocated to perpetual preferred units - (1,750) (776) (7,000)
Less write off of original issuance costs of redeemed perpetual preferred units -   - (2,075)   -
Net income attributable to common shareholders $142,166   $46,850 $283,390   $49,379
 
 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income $146,146 $50,064 $293,900 $59,961
Other comprehensive income
Unrealized loss on cash flow hedging activities - - - (2,692)
Reclassification of net (gain) loss on cash flow hedging activities - (3) - 39,657
Reclassification of (gain) loss on available-for-sale investment to earnings, net of tax - 3 - (3,306)
Reclassification of prior service cost and net loss on post retirement obligation 7 - 30 -
Unrealized loss and unamortized prior service cost on postretirement obligation (409)   (884) (409)   (884)
Comprehensive income 145,744 49,180 293,521 92,736
Less income allocated to noncontrolling interests from continuing operations (1,893) (1,431) (4,821) (3,453)
Less income, including gain on sale, allocated to noncontrolling interests from discontinued operations (2,087) (33) (2,838) (129)
Less income allocated to perpetual preferred units - (1,750) (776) (7,000)
Less write off of original issuance costs of redeemed perpetual preferred units -   - (2,075)   -
Comprehensive income attributable to common shareholders $141,764   $45,966 $283,011   $82,154
 
 

PER SHARE DATA

Net income attributable to common shareholders - basic $1.63 $0.63 $3.35 $0.67
Net income attributable to common shareholders - diluted 1.60 0.62 3.30 0.66
Income from continuing operations attributable to common shareholders - basic 0.67 0.25 1.90 0.17
Income from continuing operations attributable to common shareholders - diluted 0.66 0.25 1.88 0.17
 

Weighted average number of common and common equivalent shares outstanding:

Basic 86,298 73,510 83,772 72,756
Diluted 88,020 74,428 85,556 73,462
 
 
 
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 Twelve Months Ended
December 31, December 31,

FUNDS FROM OPERATIONS

2012   2011 2012   2011
 
Net income attributable to common shareholders (a) $142,166 $46,850 $283,390 $49,379
Real estate depreciation from continuing operations 51,399 41,219 198,642 166,149
Real estate depreciation and amortization from discontinued operations 948 2,626 6,795 11,038
Adjustments for unconsolidated joint ventures 1,741 3,492 7,939 10,534
Income allocated to noncontrolling interests 3,971 1,092 6,475 2,586
(Gain) on sale of unconsolidated joint venture properties (14,543) (6,394) (17,418) (7,530)
(Gain) on acquisition of controlling interests in joint ventures (17,227) - (57,418) -
(Gain) on sale of discontinued operations, net of tax (82,527)   (24,621) (115,068)   (24,621)
Funds from operations - diluted $85,928

 

$64,264 $313,337   $207,535
 

PER SHARE DATA

Funds from operations - diluted $0.97 $0.84 $3.62 $2.73
Cash distributions 0.56 0.49 2.24 1.96
 

Weighted average number of common and common equivalent shares outstanding:

FFO - diluted 88,991 76,649 86,619 75,928
 

PROPERTY DATA

Total operating properties (end of period) (b) 193 196 193 196
Total operating apartment homes in operating properties (end of period) (b) 65,775 66,997 65,775 66,997
Total operating apartment homes (weighted average) 55,163 50,934 54,194 50,905
Total operating apartment homes - excluding discontinued operations (weighted average) 53,052 46,294 51,308 46,167
 
 

(a) Includes a $29.8 million charge related to a loss on the discontinuation of a hedging relationship for the twelve months ended December 31, 2011.

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

 
 
CAMDEN   BALANCE SHEETS
(In thousands)
 
       
(Unaudited) Dec 31, Sept 30, Jun 30, Mar 31, Dec 31,
2012   2012   2012   2012   2011
ASSETS
Real estate assets, at cost
Land $949,777 $929,289 $893,910 $868,964 $768,016
Buildings and improvements 5,389,674   5,359,707   5,203,675   5,068,560   4,751,654
6,339,451 6,288,996 6,097,585 5,937,524 5,519,670
Accumulated depreciation (1,518,896)   (1,542,530)   (1,505,862)   (1,458,451)   (1,432,799)
Net operating real estate assets 4,820,555 4,746,466 4,591,723 4,479,073 4,086,871
Properties under development, including land 334,463 280,948 297,712 301,282 299,870
Investments in joint ventures 45,092 46,566 47,776 49,436 44,844
Properties held for sale 30,517   6,373   -   -   11,131
Total real estate assets 5,230,627 5,080,353 4,937,211 4,829,791 4,442,716
Accounts receivable - affiliates 33,625 28,874 29,940 29,742 31,035
Other assets, net (a) 88,260 96,401 88,002 89,706 88,089
Cash and cash equivalents 26,669 5,590 52,126 49,702 55,159
Restricted cash 5,991   6,742   5,295   5,074   5,076
Total assets $5,385,172   $5,217,960   $5,112,574   $5,004,015   $4,622,075
 
 
 
LIABILITIES AND EQUITY
Liabilities
Notes payable
Unsecured $1,538,212 $1,415,354 $1,381,152 $1,380,952 $1,380,755
Secured 972,256 978,371 1,015,260 1,050,154 1,051,357
Accounts payable and accrued expenses 101,896 118,879 87,041 105,370 93,747
Accrued real estate taxes 28,452 43,757 31,607 17,991 21,883
Distributions payable 49,969 49,940 49,135 47,594 39,364
Other liabilities (b) 67,679   78,551   83,471   90,423   109,276
Total liabilities 2,758,464 2,684,852 2,647,666 2,692,484 2,696,382
 
Commitments and contingencies
 
Perpetual preferred units - - - - 97,925
 
Equity
Common shares of beneficial interest 962 959 945 919 845
Additional paid-in capital 3,587,505 3,580,528 3,501,354 3,327,961 2,901,024
Distributions in excess of net income attributable to common shareholders (598,951) (692,235) (674,221) (648,074) (690,466)
Treasury shares, at cost (425,355) (425,756) (430,958) (437,215) (452,003)
Accumulated other comprehensive income (loss) (c) (1,062)   (660)   (667)   (675)   (683)
Total common equity 2,563,099 2,462,836 2,396,453 2,242,916 1,758,717
Noncontrolling interests 63,609   70,272   68,455   68,615   69,051
Total equity 2,626,708   2,533,108   2,464,908   2,311,531   1,827,768
Total liabilities and equity $5,385,172   $5,217,960   $5,112,574   $5,004,015   $4,622,075
 
 
 
(a) Includes:
net deferred charges of: $15,635 $13,695 $14,432 $15,267 $16,102
 
(b) Includes:
deferred revenues of: $2,521 $1,746 $2,012 $2,337 $2,140
distributions in excess of investments in joint ventures of: $9,509 $16,708 $16,499 $16,298 $30,596
fair value adjustment of derivative instruments: ($1) $185 $5,918 $11,574 $16,486
 
(c) Represents the unrealized (loss)/gain and unamortized prior service costs on post retirement obligations.
 
 
CAMDEN   2013 Financial Outlook
as of January 31, 2013
 
 
(Unaudited)
 
2012 Reported FFO, Adjusted for Year End Shares Outstanding
($'s and shares in thousands)

Total

Per Share

2012 Reported FFO $313,337 $3.62
 
2012 Fully Diluted Shares Outstanding - FFO 86,619
 
December 31, 2012 Fully Diluted Shares Outstanding - FFO 89,039
 
2012 FFO adjusted for December 31, 2012 Fully Diluted Shares Outstanding - FFO $3.52
 
2013 Financial Outlook
 
Earnings Guidance - Per Diluted Share
Expected net income attributable to common shareholders per share - diluted $1.38 - $1.58
Expected real estate depreciation 2.33
Expected adjustments for unconsolidated joint ventures 0.07
Expected income allocated to noncontrolling interests

0.07

Expected FFO per share - diluted $3.85 - $4.05
 
"Same Property" Communities
Number of Units 44,395
2012 Base Net Operating Income $398 million
Total Revenue Growth 4.75% - 6.25%
Total Expense Growth 3.20% - 4.00%
Net Operating Income Growth 5.50% - 7.50%
Impact from 1.0% change in NOI Growth is approximately $0.045 / share
 

Impact from 2013 Revenue Enhancing Repositions included in Same Store Net Operating Income Guidance (a)

0.50%
 
Physical Occupancy 95%
 
Capitalized Expenditures
Recurring $60 - $64 million
Revenue Enhancing Repositions (a)

$50 - $60 million

 
Acquisitions/Dispositions
Acquisition Volume (consolidated on balance sheet) $200 - $400 million
Disposition Volume $200 - $400 million
 
Development
Development Starts (consolidated on balance sheet) $250 - $400 million
Development Starts (joint venture) $0 - $50 million
Development Spend (consolidated on balance sheet) $200 - $250 million
 
 
Non-Property Income
Non-Property Income, Net $5 - $6 million
Includes: Fee and asset management income, net of expenses and
Interest and other income
 
Corporate Expenses
General and administrative expense (b) $38 - $40 million
Property management expense $21 - $23 million
 
Capital
Expected Capital Transactions $250 - $350 million
Expensed Interest $98 - $102 million
Capitalized Interest $14 - $16 million
 
 
 
(a) Capital expenditures that improve a community's competitive position, typically kitchen and bath upgrades or other new amenities.
(b) Excludes any third party acquisition costs.
 

Note: This table contains forward-looking statements. Please see the paragraph regarding forward-looking statements earlier in 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 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 Twelve Months Ended
December 31, December 31,
2012   2011 2012   2011
Net income attributable to common shareholders (a) $142,166 $46,850 $283,390 $49,379
Real estate depreciation from continuing operations 51,399 41,219 198,642 166,149
Real estate depreciation and amortization from discontinued operations 948 2,626 6,795 11,038
Adjustments for unconsolidated joint ventures 1,741 3,492 7,939 10,534
Income allocated to noncontrolling interests 3,971 1,092 6,475 2,586
(Gain) on sale of unconsolidated joint venture properties (14,543) (6,394) (17,418) (7,530)
(Gain) on acquisition of controlling interests in joint ventures (17,227) - (57,418) -
(Gain) on sale of discontinued operations, net of tax (82,527)   (24,621) (115,068)   (24,621)
Funds from operations - diluted $85,928

 

$64,264 $313,337   $207,535
 

Weighted average number of common and common equivalent shares outstanding:

EPS diluted 88,020 74,428 85,556 73,462
FFO diluted 88,991 76,649 86,619 75,928
 
Net income attributable to common shareholders - diluted $1.60 $0.62 $3.30 $0.66
FFO per common share - diluted $0.97 $0.84 $3.62 $2.73
 
 
(a) Includes a $29.8 million charge related to a loss on the discontinuation of a hedging relationship for the twelve months ended December 31, 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:

 
1Q13 Range 2013 Range
Low   High Low   High
 
Expected net income attributable to common shareholders per share - diluted $0.28 $0.32 $1.38 $1.58
Expected real estate depreciation 0.60 0.60 2.33 2.33
Expected adjustments for unconsolidated joint ventures 0.02 0.02 0.07 0.07
Expected income allocated to noncontrolling interests 0.02   0.02 0.07   0.07
Expected FFO per share - diluted $0.92 $0.96 $3.85 $4.05
 
 
 
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 Twelve Months Ended
December 31, December 31,
2012

 

2011 2012   2011
Net income attributable to common shareholders $142,166 $46,850 $283,390 $49,379
Less: Fee and asset management income (2,773) (3,018) (12,345) (9,973)
Less: Interest and other (income) loss (40) 100 710 (4,649)
Less: Income on deferred compensation plans (952) (5,540) (4,772) (6,773)
Plus: Property management expense 6,152 5,208 21,796 20,686
Plus: Fee and asset management expense 1,580 1,715 6,631 5,935
Plus: General and administrative expense 9,816 9,064 37,528 35,456
Plus: Interest expense 25,487 26,942 104,282 112,414
Plus: Depreciation and amortization 52,501 42,428 203,077 171,127
Plus: Amortization of deferred financing costs 887 1,116 3,608 5,877
Plus: Expense on deferred compensation plans 952 5,540 4,772 6,773
Less: Gain on acquisition of controlling interests in joint ventures (17,227) - (57,418) -
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 of joint ventures (15,489) (5,845) (20,175) (5,679)
Plus: Income tax expense - current 216 331 1,208 2,220
Less: Income from discontinued operations (2,144) (3,127) (9,495) (11,715)
Less: Gain on sale of discontinued operations, net of tax (82,527) (24,621) (115,068) (24,621)
Plus: Income allocated to noncontrolling interests from continuing operations 1,893 1,431 4,821 3,453
Plus: Income, including gain on sale, allocated to noncontrolling interests from discontinued operations 2,087 33 2,838 129
Plus: Income allocated to perpetual preferred units - 1,750 776 7,000
Plus: Write off of original issuance costs of redeemed perpetual preferred units -   - 2,075   -
Net Operating Income (NOI) $122,585 $100,357 $458,239 $380,946
 
"Same Property" Communities $103,930 $96,193 $402,513 $368,569
Non-"Same Property" Communities 17,449 3,652 51,525 11,491
Development and Lease-Up Communities 598 1 1,126 1
Other 608   511 3,075   885
Net Operating Income (NOI) $122,585 $100,357 $458,239 $380,946
 
 

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 Twelve Months Ended
December 31, December 31,
2012   2011 2012   2011
Net income attributable to common shareholders $142,166 $46,850 $283,390 $49,379
Plus: Interest expense 25,487 26,942 104,282 112,414
Plus: Amortization of deferred financing costs 887 1,116 3,608 5,877
Plus: Depreciation and amortization 52,501 42,428 203,077 171,127
Plus: Income allocated to perpetual preferred units - 1,750 776 7,000
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 2,087 33 2,838 129
Plus: Income allocated to noncontrolling interests from continuing operations 1,893 1,431 4,821 3,453
Plus: Income tax expense - current 216 331 1,208 2,220
Plus: Real estate depreciation and amortization from discontinued operations 948 2,626 6,795 11,038
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 (17,227) - (57,418) -
Less: Equity in income of joint ventures (15,489) (5,845) (20,175) (5,679)
Less: Gain on sale of discontinued operations, net of tax (82,527) (24,621) (115,068) (24,621)
Plus: Loss on discontinuation of hedging relationship -   - -   29,791
EBITDA $110,942 $93,041 $420,209 $356,244
 




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