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Camden Property Trust Announces Second Quarter 2010 Operating Results

7/29/2010

HOUSTON--(BUSINESS WIRE)-- Camden Property Trust (NYSE: CPT) today announced operating results for the three and six months ended June 30, 2010.

“We are pleased to report that Camden’s second quarter operating results were better than expected,” said Richard J. Campo, Chairman and Chief Executive Officer. “Based on these results and an improved outlook for our business, we have raised our 2010 guidance for both earnings and same property performance.”

Funds From Operations

FFO for the second quarter of 2010 totaled $0.66 per diluted share or $46.7 million, as compared to $0.72 per diluted share or $46.6 million for the same period in 2009. FFO for the six months ended June 30, 2010 totaled $1.34 per diluted share or $93.7 million, as compared to $1.60 per diluted share or $98.2 million for the same period in 2009. FFO for the three and six months ended June 30, 2009 included a $0.04 per diluted share impact from losses related to early retirement of debt.

Net Income Attributable to Common Shareholders (“EPS”)

The Company reported net income attributable to common shareholders (“EPS”) of $2.1 million or $0.03 per diluted share for the second quarter of 2010, as compared to $18.3 million or $0.30 per diluted share for the same period in 2009. EPS for the three months ended June 30, 2009 included a $0.27 per diluted share impact from gain on sale of discontinued operations, and a $0.04 per diluted share impact from losses related to early retirement of debt.

For the six months ended June 30, 2010, net income attributable to common shareholders totaled $4.4 million or $0.06 per diluted share, as compared to $24.5 million or $0.41 per diluted share for the same period in 2009. EPS for the six months ended June 30, 2009 included a $0.29 per diluted share impact from gain on sale of discontinued operations, and a $0.04 per diluted share impact from losses related to early retirement of debt.

A reconciliation of net income attributable to common shareholders to FFO is included in the financial tables accompanying this press release.

Same Property Results

For the 46,757 apartment homes included in consolidated same property results, second quarter 2010 same property NOI declined 4.1% compared to the second quarter of 2009, with revenues declining 3.3% and expenses declining 2.0%. On a sequential basis, second quarter 2010 same property NOI increased 2.8% compared to the first quarter of 2010, with revenues increasing 1.5% and expenses declining 0.4% compared to the prior quarter. On a year-to-date basis, 2010 same property NOI declined 6.6%, with revenues declining 4.0% and expenses essentially flat compared to the same period in 2009. Same property physical occupancy levels for the portfolio averaged 94.2% during the second quarter of 2010, compared to 94.3% in the second quarter of 2009 and 93.4% in the first quarter of 2010.

The Company defines same property communities as communities owned and stabilized as of January 1, 2009, excluding properties held for sale and communities under redevelopment. A reconciliation of net income attributable to common shareholders to net operating income and same property net operating income is included in the financial tables accompanying this press release.

Development Activity

Camden completed lease-up of two development communities during the first quarter: Camden Dulles Station in Oak Hill, VA, a $72.3 million wholly-owned project that is currently 97% occupied; and Camden Amber Oaks in Austin, TX, a $35.3 million joint venture project that is currently 97% occupied.

Lease-ups continued during the quarter at three Houston joint venture communities: Camden Travis Street, a $30.9 million project that is currently 86% leased; Braeswood Place, a $50.3 million project that is currently 81% leased; and Belle Meade, a $37.6 million project that is currently 66% leased.

Acquisition/Disposition Activity

Camden disposed of 1.7 acres of undeveloped land in Houston, TX for $0.9 million during the quarter, resulting in a gain of $236,000. In addition, the Company designated a 602-home apartment community in Euless, TX as held-for-sale.

Subsequent to quarter-end, the Company completed two acquisitions for approximately $41 million through its Multifamily Value Add Fund, in which it has a 20% interest: Camden Yorktown, a 306-home stabilized apartment community in Houston, TX; and Camden Ivy Hall, a 110-home substantially complete development community in Atlanta, GA.

Equity Issuance

During the second quarter, Camden issued approximately 1.9 million common shares through its at-the-market (“ATM”) share offering program at an average price of $47.24 per share, for total net consideration of approximately $89.2 million. Year-to-date, the Company has issued approximately 2.3 million common shares through its ATM program at an average price of $46.61 per share, for total net consideration of approximately $106.4 million.

Earnings Guidance

Camden raised its earnings guidance for 2010 based on its view of the current and expected apartment market and general economic conditions. Full-year 2010 FFO is expected to be $2.58 to $2.70 per diluted share, and full-year 2010 EPS is expected to be $0.06 to $0.18 per diluted share. Third quarter 2010 earnings guidance is $0.62 to $0.66 per diluted share for FFO and $(0.01) to $0.03 per diluted share for EPS. Guidance for EPS excludes potential future gains on the sale of properties. Camden intends to update its earnings guidance to the market on a quarterly basis.

The Company’s 2010 earnings guidance is based on projections of same property revenue declines between 1.50% and 2.50%, expense growth between 0.75% and 1.25%, and NOI declines between 3.00% and 5.00%. Additional information on the Company’s 2010 financial outlook and a reconciliation of expected net income attributable to common shareholders to expected FFO are included in the financial tables accompanying this press release.

Conference Call

The Company will hold a conference call on Friday, July 30, 2010 at 11:00 a.m. Central Time to review its second quarter 2010 results and discuss its outlook for future performance. To participate in the call, please dial (866) 843-0890 (Domestic) or (412) 317-9250 (International) by 10:50 a.m. Central Time and enter passcode: 0475524, or join the live webcast of the conference call by accessing the Investor Relations section of the Company’s website at camdenliving.com. Supplemental financial information is available in the Investor Relations section of the Company’s website under Earnings Releases or by calling Camden’s Investor Relations Department at (800) 922-6336.

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 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, 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, development, acquisition, management and disposition of multifamily apartment communities. Camden owns interests in and operates 187 properties containing 64,074 apartment homes across the United States. Camden was recently named by FORTUNE® Magazine for the third consecutive year as one of the “100 Best Companies to Work For” in America, placing 10th on the list.

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.

           
CAMDENOPERATING RESULTS

(In thousands, except per share and property data amounts)

                           
 
(Unaudited)

 

Three Months EndedSix Months Ended
June 30,June 30,

OPERATING DATA

2010   20092010   2009
Property revenues
Rental revenues $ 131,237 $ 134,854 $ 261,657 $ 270,490
Other property revenues   21,969       21,454     42,844       41,804  
Total property revenues   153,206       156,308     304,501       312,294  
 
Property expenses
Property operating and maintenance 44,258 44,141 88,414 86,019
Real estate taxes   18,228       18,444     36,542       36,889  
Total property expenses   62,486       62,585     124,956       122,908  
 
Non-property income
Fee and asset management income 2,045 2,244 3,883 4,275
Interest and other income 492 1,097 3,537 1,832
Income (loss) on deferred compensation plans   (3,582 )     7,660     (100 )     3,508  
Total non-property income (loss)   (1,045 )     11,001     7,320       9,615  
 
Other expenses
Property management 5,022 4,542 10,205 9,471
Fee and asset management 1,262 1,303 2,456 2,438
General and administrative 7,367 7,246 14,771 15,478
Interest 31,742 34,002 63,297 66,247
Depreciation and amortization 42,660 43,702 86,278 87,500
Amortization of deferred financing costs 713 857 1,439 1,674
Expense (benefit) on deferred compensation plans   (3,582 )     7,660     (100 )     3,508  
Total other expenses   85,184       99,312     178,346       186,316  
 
Gain on sale of properties, including land 236 - 236 -
Loss on early retirement of debt - (2,716 ) - (2,550 )
Equity in income (loss) of joint ventures   (436 )     222     (541 )     630  
Income from continuing operations before income taxes4,2912,9188,21410,765
Income tax expense - current   (304 )     (347 )   (574 )     (646 )
Income from continuing operations3,9872,5717,64010,119
Income from discontinued operations 261 1,029 389 1,986
Gain on sale of discontinued operations   -       16,887     -       16,887  
Net income4,24820,4878,02928,992
Less income allocated to noncontrolling interests from continuing operations (364 ) (422 ) (110 ) (943 )
Less income allocated to perpetual preferred units   (1,750 )     (1,750 )   (3,500 )     (3,500 )
Net income attributable to common shareholders$2,134     $18,315   $4,419     $24,549  
 
 

CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME

Net income$4,248$20,487$8,029$28,992
Other comprehensive income (loss)
Unrealized gain (loss) on cash flow hedging activities (7,409 ) 1,361 (14,226 ) (1,574 )
Reclassification of net losses on cash flow hedging activities   5,784       5,469     11,663       10,744  
Comprehensive income2,62327,3175,46638,162
Less income allocated to noncontrolling interests from continuing operations (364 ) (422 ) (110 ) (943 )
Less income allocated to perpetual preferred units   (1,750 )     (1,750 )   (3,500 )     (3,500 )
Comprehensive income attributable to common shareholders$509     $25,145   $1,856     $33,719  
 
 

PER SHARE DATA

Net income attributable to common shareholders - basic $ 0.03 $ 0.30 $ 0.06 $ 0.42
Net income attributable to common shareholders - diluted 0.03 0.30 0.06 0.41
Income from continuing operations attributable to common shareholders - basic 0.03 0.01 0.06 0.10
Income from continuing operations attributable to common shareholders - diluted 0.03 0.01 0.06 0.09
 
Weighted average number of common and
common equivalent shares outstanding:
Basic 68,090 61,499 67,287 58,542
Diluted 68,386 61,499 67,521 59,025
 
Note: Please refer to the following pages for definitions and reconciliations of all non-GAAP financial measures presented in this document.
           
 
CAMDENFUNDS FROM OPERATIONS
(In thousands, except per share and property data amounts)
                           
 
 
(Unaudited)Three Months EndedSix Months Ended
June 30,June 30,

FUNDS FROM OPERATIONS

2010   20092010   2009
 
Net income attributable to common shareholders$2,134$18,315$4,419$24,549
Real estate depreciation from continuing operations 41,449 42,677 83,893 85,505
Real estate depreciation from discontinued operations 130 186 325 368
Adjustments for unconsolidated joint ventures 2,298 1,961 4,461 3,877
Income allocated to noncontrolling interests 688 321 583 742
Gain on sale of discontinued operations   -     (16,887 )   -     (16,887 )
Funds from operations - diluted$46,699   $46,573   $93,681   $98,154  
 

PER SHARE DATA

Funds from operations - diluted $ 0.66 $ 0.72 $ 1.34 $ 1.60
Cash distributions 0.45 0.45 0.90 1.15
 
Weighted average number of common and
common equivalent shares outstanding:
FFO - diluted 70,987 64,357 70,146 61,430
 

PROPERTY DATA

Total operating properties (end of period) (a) 185 182 185 182
Total operating apartment homes in operating properties (end of period) (a) 63,658 62,946 63,658 62,946
Total operating apartment homes (weighted average) 50,680 50,846 50,629 50,767
Total operating apartment homes - excluding discontinued operations (weighted average) 50,078 49,573 50,027 49,494
 
 
(a) 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.
         
 
CAMDENBALANCE SHEETS
(In thousands)
                     
 
(Unaudited)Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,
2010   2010   2009   2009   2009
ASSETS
Real estate assets, at cost
Land $ 746,195 $ 748,604 $ 747,921 $ 746,825 $ 746,936
Buildings and improvements   4,521,376       4,527,523       4,512,124       4,484,335       4,473,906  
5,267,571 5,276,127 5,260,045 5,231,160 5,220,842
Accumulated depreciation   (1,221,422 )     (1,191,604 )     (1,149,056 )     (1,107,227 )     (1,065,861 )
Net operating real estate assets 4,046,149 4,084,523 4,110,989 4,123,933 4,154,981
Properties under development and land 199,012 196,371 201,581 279,620 268,655
Investments in joint ventures 50,392 42,994 43,542 43,236 22,334
Properties held for sale, including land   9,692       -       -       6,622       6,732  
Total real estate assets 4,305,245 4,323,888 4,356,112 4,453,411 4,452,702
Accounts receivable - affiliates 31,993 32,657 36,112 35,971 35,909
Notes receivable - affiliates 38,478 46,118 45,847 54,462 54,033
Other assets, net (a) 87,371 92,983 102,114 104,669 92,421
Cash and cash equivalents 128,155 28,553 64,156 81,683 157,665
Restricted cash   3,738       3,680       3,658       3,901       5,190  
Total assets $ 4,594,980     $ 4,527,879     $ 4,607,999     $ 4,734,097     $ 4,797,920  
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Notes payable
Unsecured $ 1,590,287 $ 1,590,473 $ 1,645,926 $ 1,646,106 $ 1,728,150
Secured 981,816 980,188 979,273 976,051 969,668
Accounts payable and accrued expenses 63,663 69,858 74,420 78,466 65,012
Accrued real estate taxes 28,416 17,005 23,241 42,386 30,154
Other liabilities (b) 137,020 138,136 145,176 145,464 132,763
Distributions payable   34,275       33,403       33,025       33,028       33,050  
Total liabilities 2,835,477 2,829,063 2,901,061 2,921,501 2,958,797
 
Commitments and contingencies
 
Perpetual preferred units 97,925 97,925 97,925 97,925 97,925
 
Shareholders' equity
Common shares of beneficial interest 798 778 770 770 769
Additional paid-in capital 2,641,354 2,548,722 2,525,656 2,522,525 2,517,788
Distributions in excess of net income attributable to common shareholders (550,039 ) (520,798 ) (492,571 ) (383,265 ) (357,168 )
Notes receivable secured by common shares (102 ) (101 ) (101 ) (101 ) (287 )
Treasury shares, at cost (461,517 ) (461,517 ) (462,188 ) (462,188 ) (462,751 )
Accumulated other comprehensive loss (c)   (43,718 )     (42,093 )     (41,155 )     (44,921 )     (41,886 )
Total common shareholders' equity 1,586,776 1,524,991 1,530,411 1,632,820 1,656,465
Noncontrolling interest   74,802       75,900       78,602       81,851       84,733  
Total shareholders' equity   1,661,578       1,600,891       1,609,013       1,714,671       1,741,198  
Total liabilities and shareholders' equity $ 4,594,980     $ 4,527,879     $ 4,607,999     $ 4,734,097     $ 4,797,920  
 
 
(a) includes:
net deferred charges of:$10,193$10,704$11,113$11,617$12,108
 
(b) includes:
deferred revenues of:$2,467$2,467$2,664$2,938$3,183
distributions in excess of investments in joint ventures of:$33,074$32,195$31,410$30,507$30,287
fair value adjustment of derivative instruments:$43,757$42,119$41,083$44,730$41,797
 
(c) Represents the fair value adjustment of derivative instruments and gain 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 EndedSix Months Ended
June 30,June 30,
2010   20092010   2009
Net income attributable to common shareholders $ 2,134 $ 18,315 $ 4,419 $ 24,549
Real estate depreciation from continuing operations 41,449 42,677 83,893 85,505
Real estate depreciation from discontinued operations 130 186 325 368
Adjustments for unconsolidated joint ventures 2,298 1,961 4,461 3,877
Income allocated to noncontrolling interests 688 321 583 742
Gain on sale of discontinued operations   -       (16,887 )   -     (16,887 )
Funds from operations - diluted $ 46,699     $ 46,573   $ 93,681   $ 98,154  
 
Weighted average number of common and
common equivalent shares outstanding:
EPS diluted 68,386 61,499 67,521 59,025
FFO diluted 70,987 64,357 70,146 61,430
 
Net income attributable to common shareholders - diluted $ 0.03 $ 0.30 $ 0.06 $ 0.41
FFO per common share - diluted $ 0.66 $ 0.72 $ 1.34 $ 1.60
 
 

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:

 
3Q10 Range2010 Range
Low   HighLow   High
 
Expected net income attributable to common shareholders per share - diluted ($0.01 ) $ 0.03 $ 0.06 $ 0.18
Expected real estate depreciation 0.60 0.60 2.37 2.37
Expected adjustments for unconsolidated joint ventures 0.03 0.03 0.13 0.13
Expected income allocated to noncontrolling interests   0.00       0.00     0.02     0.02  
Expected FFO per share - diluted 0.62 0.66 $ 2.58 $ 2.70
 

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. 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 EndedSix Months Ended
June 30,June 30,
2010   20092010   2009
Net income attributable to common shareholders $ 2,134 $ 18,315 $ 4,419 $ 24,549
Less: Fee and asset management income (2,045 ) (2,244 ) (3,883 ) (4,275 )
Less: Interest and other income (492 ) (1,097 ) (3,537 ) (1,832 )
Less: (Income) loss on deferred compensation plans 3,582 (7,660 ) 100 (3,508 )
Plus: Property management expense 5,022 4,542 10,205 9,471
Plus: Fee and asset management expense 1,262 1,303 2,456 2,438
Plus: General and administrative expense 7,367 7,246 14,771 15,478
Plus: Interest expense 31,742 34,002 63,297 66,247
Plus: Depreciation and amortization 42,660 43,702 86,278 87,500
Plus: Amortization of deferred financing costs 713 857 1,439 1,674
Plus: Expense (benefit) on deferred compensation plans (3,582 ) 7,660 (100 ) 3,508
Less: (Gain) on sale of properties, including land (236 ) - (236 ) -
Less: Loss on early retirement of debt - 2,716 - 2,550
Less: Equity in (income) loss of joint ventures 436 (222 ) 541 (630 )
Plus: Income allocated to perpetual preferred units 1,750 1,750 3,500 3,500
Plus: Income (loss) allocated to noncontrolling interests 364 422 110 943
Plus: Income tax expense - current 304 347 574 646
Less: (Income) from discontinued operations (261 ) (1,029 ) (389 ) (1,986 )
Less: (Gain) loss on sale of discontinued operations   -       (16,887 )   -       (16,887 )
Net Operating Income (NOI) $ 90,720 $ 93,723 $ 179,545 $ 189,386
 
"Same Property" Communities $ 84,556 $ 88,215 $ 166,816 $ 178,569
Non-"Same Property" Communities 5,727 4,478 11,866 9,030
Development and Lease-Up Communities (32 ) (1 ) (156 ) (1 )
Redevelopment Communities 587 479 1,157 978
Dispositions / Other   (118 )     552     (138 )     810  
Net Operating Income (NOI) $ 90,720 $ 93,723 $ 179,545 $ 189,386
 
 

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 early retirement of debt, 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 EndedSix Months Ended
June 30,June 30,
2010   20092010   2009
Net income attributable to common shareholders $ 2,134 $ 18,315 $ 4,419 $ 24,549
Plus: Interest expense 31,742 34,002 63,297 66,247
Plus: Amortization of deferred financing costs 713 857 1,439 1,674
Plus: Depreciation and amortization 42,660 43,702 86,278 87,500
Plus: Income allocated to perpetual preferred units 1,750 1,750 3,500 3,500
Plus: Income (loss) allocated to noncontrolling interests 364 422 110 943
Plus: Income tax expense - current 304 347 574 646
Plus: Real estate depreciation and amortization from discontinued operations 130 186 325 368
Less: (Gain) on sale of properties, including land (236 ) - (236 ) -
Less: Loss on early retirement of debt - 2,716 - 2,550
Less: Equity in (income) loss of joint ventures 436 (222 ) 541 (630 )
Less: (Gain) loss on sale of discontinued operations   -       (16,887 )   -       (16,887 )

EBITDA

$ 79,997 $ 85,188 $ 160,247 $ 170,460

 

 

Source: Camden Property Trust

Contact:

Camden Property Trust

Kim Callahan, 713-354-2549

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