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Camden Property Trust Announces Fourth Quarter and Full Year 2011 Operating Results and Provides 2012 Financial Outlook

2/2/2012

HOUSTON--(BUSINESS WIRE)-- Camden Property Trust (NYSE: CPT) today announced operating results for the three and twelve months ended December 31, 2011.

Funds from Operations (“FFO”)

FFO for the fourth quarter of 2011 totaled $0.84 per diluted share or $64.3 million, as compared to $0.73 per diluted share or $53.9 million for the same period in 2010. FFO for the three months ended December 31, 2010 included a net $0.04 per diluted share impact from other income recognized as a result of the dissolution of a development joint venture, partially offset by an impairment associated with a technology investment.

FFO for the twelve months ended December 31, 2011 totaled $2.73 per diluted share or $207.5 million, as compared to $2.72 per diluted share or $194.3 million for the same period in 2010. FFO for the twelve months ended December 31, 2011 included: a $0.40 per diluted share impact related to a $29.8 million loss on discontinuation of a hedging relationship of an interest rate swap and $0.5 million write-off of unamortized loan costs related to the payoff of a term loan; a $4.7 million or $0.06 per diluted share gain on sale of undeveloped land; a net $3.3 million or $0.04 per diluted share impact related to the sale of an available-for-sale investment; and a $2.1 million or $0.03 per diluted share impact for General & Administrative (“G&A”) costs related to a one-time bonus awarded to all non-executive employees. FFO for the twelve months ended December 31, 2010 included a net $0.04 per diluted share impact from other income recognized as a result of the dissolution of a development joint venture, partially offset by an impairment associated with a technology investment.

Net Income Attributable to Common Shareholders (“EPS”)

The Company reported net income attributable to common shareholders (“EPS”) of $46.8 million or $0.62 per diluted share for the fourth quarter of 2011, as compared to $17.1 million or $0.24 per diluted share for the same period in 2010. EPS for the three months ended December 31, 2011 included a $24.6 million or $0.33 per diluted share impact related to the gain on sale of two wholly-owned apartment communities, and a $6.4 million or $0.09 per diluted share impact related to the gain on sale of four joint venture communities. EPS for the three months ended December 31, 2010 included a $0.13 per diluted share impact from the gain on sale of discontinued operations, and a net $0.04 per diluted share impact from other income recognized as a result of the dissolution of a development joint venture, partially offset by an impairment associated with a technology investment.

For the twelve months ended December 31, 2011, Camden reported net income attributable to common shareholders of $49.4 million or $0.66 per diluted share, as compared to $23.2 million or $0.33 per diluted share for the same period in 2010. EPS for the twelve months ended December 31, 2011 included: a $24.6 million or $0.33 per diluted share impact related to the gain on sale of two wholly-owned apartment communities; a $6.4 million or $0.09 per diluted share impact related to the gain on sale of four joint venture communities; a $0.41 per diluted share impact related to a $29.8 million loss on discontinuation of a hedging relationship of an interest rate swap and $0.5 million write-off of unamortized loan costs related to the payoff of a term loan; a $4.7 million or $0.06 per diluted share gain on sale of undeveloped land; a net $3.3 million or $0.05 per diluted share impact related to gain on sale of an available-for-sale investment; a $2.1 million or $0.03 per diluted share impact for G&A costs related to a one-time bonus awarded to all non-executive employees; and a $1.1 million or $0.02 per diluted share impact from gain on sale of three joint venture interests. EPS for the twelve months ended December 31, 2010 included a $0.14 per diluted share impact from the gain on sale of discontinued operations, and a net $0.05 per diluted share impact from other income recognized as a result of the dissolution of a development joint venture, partially offset by an impairment associated with a technology investment.

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 46,164 apartment homes included in consolidated same-property results, fourth quarter 2011 same-property net operating income (“NOI”) increased 8.0% compared to the fourth quarter of 2010, with revenues increasing 6.7% and expenses increasing 4.6%. On a sequential basis, fourth quarter 2011 same-property NOI increased 4.2% compared to the third quarter of 2011, with revenues increasing 0.1% and expenses declining 6.1% compared to the prior quarter. On a full-year basis, 2011 same-property NOI increased 7.1%, with revenues increasing 5.5% and expenses increasing 3.0% compared to the same period in 2010. Same-property physical occupancy levels for the combined portfolio averaged 94.5% during the fourth quarter of 2011, compared to 93.8% in the fourth quarter of 2010 and 95.0% in the third quarter of 2011.

The Company defines same-property communities as communities owned and stabilized as of January 1, 2010, excluding properties held for sale and communities under major redevelopment. A reconciliation of net income to net operating income and same-property net operating income is included in the financial tables accompanying this press release.

Acquisition Activity

During the fourth quarter, Camden acquired five communities with 1,488 apartment homes located in Houston, TX for approximately $135.5 million through its Funds. The Company also acquired 2.2 acres of land in Glendale, CA for approximately $21.4 million during the quarter, and plans to begin construction on 242 apartment homes during 2012.

On January 25, 2012, Camden purchased the remaining 80% ownership interest in twelve unconsolidated joint ventures for approximately $99.5 million and assumed approximately $272.6 million in mortgage debt, which was retired on January 31, 2012. The Company now owns 100% of the interests in 4,034 apartment homes located in Dallas, Houston, Las Vegas, Phoenix, and Southern California, and will consolidate those entities for financial reporting purposes going forward. The Company also acquired one multifamily community with 350 apartment homes located in Raleigh, NC for approximately $44.2 million through one of its Funds on January 27, 2012.

Disposition Activity

The Company disposed of two properties during the fourth quarter for a total of $39.7 million and a gain of $24.6 million: Camden Valley Creek, a 380-home community, and Camden Valley Ridge, a 408-home apartment community, both located in Irving, TX. The Company also disposed of four joint venture communities with 1,194 apartment homes located in Louisville, KY during the quarter for approximately $97.1 million. Camden’s proportionate share of the gain on sale was approximately $6.4 million.

On January 12, 2012, Camden sold an additional community with 357 apartment homes located in Mesa, AZ for approximately $24.5 million.

Development Activity

Construction and lease-up activity was underway during the quarter at three wholly-owned communities: Camden LaVina, a $60 million project with 420 apartment homes in Orlando, FL, which is currently 53% leased; Camden Summerfield II, a $30 million project with 187 apartment homes in Landover, MD, which is currently 42% leased; and Camden Royal Oaks II, a $14 million project with 104 apartment homes in Houston, TX, which is currently 11% leased.

Construction continued during the quarter on five wholly-owned development communities: Camden Montague in Tampa, FL, a $23 million project with 192 apartment homes; Camden Westchase Park in Tampa, FL, a $52 million project with 348 apartment homes; Camden Town Square in Orlando, FL, a $66 million project with 438 apartment homes; Camden City Centre II in Houston, TX, a $36 million project with 268 apartment homes, and Camden NOMA in Washington DC, a $110 million project with 320 apartment homes. Construction also continued during the quarter on two joint venture communities: Camden South Capitol in Washington, DC, an $88 million project with 276 apartment homes, and Camden Amber Oaks II in Austin, TX, a $25 million project with 244 apartment homes.

Equity Issuances/Redemption

During the fourth quarter, Camden issued 623,122 common shares through its at-the-market (“ATM”) share offering program at an average price of $59.82 per share, for total net consideration of approximately $36.7 million. During full-year 2011, Camden issued a total of 1,751,020 common shares through its ATM program at an average price of $61.95 per share, for total net consideration of approximately $106.6 million.

In January 2012, Camden completed a public offering of 6,612,500 common shares for net proceeds of approximately $391.6 million. The Company also issued 51,479 common shares in January 2012 through its ATM program at an average price of $62.41 per share, for total net consideration of approximately $3.2 million.

In January 2012, Camden exercised its right to redeem the 4,000,000 outstanding 7.0% Series B Cumulative Redeemable Perpetual Preferred Units from the existing holders for an aggregate of $100 million (plus an amount equal to accrued but unpaid distributions as of the redemption date). The redemption is currently expected to occur in February 2012.

Earnings Guidance

Camden provided initial earnings guidance for 2012 based on its current and expected views of the apartment market and general economic conditions. Full-year 2012 FFO is expected to be $3.30 to $3.55 per diluted share, and full-year 2012 EPS is expected to be $0.95 to $1.20 per diluted share. First quarter 2012 earnings guidance is $0.77 to $0.81 per diluted share for FFO and $0.18 to $0.22 per diluted share for EPS, and includes a $0.02 per diluted share charge related to the anticipated redemption of $100 million of perpetual preferred operating partnership units in February 2012. Guidance for EPS excludes potential future gains on real estate transactions. Camden intends to update its earnings guidance to the market on a quarterly basis.

The Company’s initial 2012 earnings guidance is based on projections of same-property revenue growth between 4.75% and 6.25%, expense growth between 2.5% and 3.5%, and NOI growth between 6.0% and 8.0%. Additional information on the Company’s 2012 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, February 3, 2012 at 11:00 a.m. Central Time to review its fourth quarter and full-year 2011 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: 0988815, 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 196 properties containing 66,990 apartment homes across the United States. Upon completion of ten properties under development, the Company’s portfolio will increase to 69,787 apartment homes in 206 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 camdenliving.com.

           
CAMDENOPERATING RESULTS
(In thousands, except per share and property data amounts)
                     
(Unaudited)Three Months EndedTwelve Months Ended
December 31,December 31,

OPERATING DATA

   2011   20102011   2010
Property revenues
Rental revenues $ 144,522 $ 132,094 $ 563,010 $ 516,908
Other property revenues   23,190       21,052     92,858       84,542  
Total property revenues   167,712       153,146     655,868       601,450  
 
Property expenses
Property operating and maintenance 45,838 44,033 187,587 175,926
Real estate taxes   16,786       14,865     69,092       66,986  
Total property expenses   62,624       58,898     256,679       242,912  
 
Non-property income
Fee and asset management 3,018 2,144 9,973 8,172
Interest and other income (loss) (100 ) 4,596 4,649 8,584
Income on deferred compensation plans   5,540       4,763     6,773       11,581  
Total non-property income   8,458       11,503     21,395       28,337  
 
Other expenses
Property management 5,208 4,988 20,686 19,982
Fee and asset management 1,715 1,230 5,935 4,841
General and administrative 9,064 8,423 35,456 30,762
Interest 26,942 30,815 112,414 125,893
Depreciation and amortization 44,641 44,213 179,867 170,362
Amortization of deferred financing costs 1,116 1,478 5,877 4,102
Expense on deferred compensation plans   5,540       4,763     6,773       11,581  
Total other expenses   94,226       95,910     367,008       367,523  
 
 
Loss on discontinuation of hedging relationship - - (29,791 ) -
Gain on sale of properties, including land - - 4,748 236
Gain on sale of unconsolidated joint venture interests - - 1,136 -
Impairment provision for technology investments - (1,000 ) - (1,000 )
Equity in income/(loss) of joint ventures   5,845       (54 )   5,679       (839 )
Income from continuing operations before income taxes25,1658,78735,34817,749
Income tax expense - current   (331 )     (295 )   (2,220 )     (1,581 )
Income from continuing operations24,8348,49233,12816,168
Income from discontinued operations 609 1,175 2,212 5,360
Gain on sale of discontinued operations   24,621       9,614     24,621       9,614  
Net income50,06419,28159,96131,142
Less income allocated to noncontrolling interests from continuing operations (1,464 ) (384 ) (3,582 ) (926 )
Less income allocated to perpetual preferred units   (1,750 )     (1,750 )   (7,000 )     (7,000 )
Net income attributable to common shareholders$46,850     $17,147   $49,379     $23,216  
 
 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income$50,064$19,281$59,961$31,142
Other comprehensive income
Unrealized gain (loss) on cash flow hedging activities - 490 (2,692 ) (19,059 )
Reclassification of net losses on cash flow hedging activities (3 ) 5,897 39,657 23,385
Unrealized gain on available-for-sale securities, net of tax - 1,392 - 3,306
Reclassification of gain on available-for-sale investment to earnings, net of tax 3 - (3,306 ) -
Unrealized gain (loss) on and unamortized prior service cost on postretirement obligations   (884 )     65     (884 )     65  
Comprehensive income49,18027,12592,73638,839
Less income allocated to noncontrolling interests from continuing operations (1,464 ) (384 ) (3,582 ) (926 )
Less income allocated to perpetual preferred units   (1,750 )     (1,750 )   (7,000 )     (7,000 )
Comprehensive income attributable to common shareholders$45,966     $24,991   $82,154     $30,913  
 
 

PER SHARE DATA

Net income attributable to common shareholders - basic $ 0.63 $ 0.24 $ 0.67 $ 0.33
Net income attributable to common shareholders - diluted 0.62 0.24 0.66 0.33
Income from continuing operations attributable to common shareholders - basic 0.29 0.09 0.30 0.11
Income from continuing operations attributable to common shareholders - diluted 0.28 0.09 0.30 0.11
 
Weighted average number of common and
common equivalent shares outstanding:

Basic

73,510 70,716 72,756 68,608
Diluted 74,428 71,587 73,701 68,957

 

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 EndedTwelve Months Ended
December 31,December 31,

FUNDS FROM OPERATIONS

2011   20102011   2010
 
Net income attributable to common shareholders (a)$46,850$17,147$49,379$23,216
Real estate depreciation from continuing operations 43,432 42,926 174,889 165,462
Real estate depreciation from discontinued operations 413 1,059 2,298 5,198
(Gain) on sale of discontinued operations (24,621 ) (9,614 ) (24,621 ) (9,614 )
Adjustments for unconsolidated joint ventures 3,492 2,190 10,534 8,943
(Gain) on sale of unconsolidated joint venture properties (6,394 ) - (6,394 ) -
(Gain) on sale of unconsolidated joint venture interests - - (1,136 ) -
Income allocated to noncontrolling interests   1,092       240     2,586       1,104  
Funds from operations - diluted$64,264     $53,948   $207,535     $194,309  
 

PER SHARE DATA

Funds from operations - diluted $ 0.84 $ 0.73 $ 2.73 $ 2.72
Cash distributions 0.49 0.45 1.96 1.80
 
Weighted average number of common and
common equivalent shares outstanding:
FFO - diluted 76,649 73,847 75,928 71,552
 

PROPERTY DATA

Total operating properties (end of period) (b) 196 186 196 186
Total operating apartment homes in operating properties (end of period) (b) 66,997 63,316 66,997 63,316
Total operating apartment homes (weighted average) 50,934 50,970 50,905 50,794
Total operating apartment homes - excluding discontinued operations (weighted average) 49,920 49,049 49,793 48,656

(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.

 
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)Dec 31,Sep 30,Jun 30,Mar 31,Dec 31,
2011   2011   2011   2011   2010
ASSETS
Real estate assets, at cost
Land $ 768,016 $ 766,302 $ 760,397 $ 760,397 $ 760,397
Buildings and improvements   4,751,654       4,758,397       4,711,552       4,690,741       4,680,361  
5,519,670 5,524,699 5,471,949 5,451,138 5,440,758
Accumulated depreciation   (1,432,799 )     (1,421,867 )     (1,378,630 )     (1,335,831 )     (1,292,924 )
Net operating real estate assets 4,086,871 4,102,832 4,093,319 4,115,307 4,147,834
Properties under development, including land 299,870 274,201 237,549 220,641 206,919
Investments in joint ventures 44,844 37,033 39,398 21,196 27,632
Properties held for sale, including land   11,131       -       -       -       -  
Total real estate assets 4,442,716 4,414,066 4,370,266 4,357,144 4,382,385
Accounts receivable - affiliates 31,035 31,395 30,401 29,973 31,895
Notes receivable - affiliates - - - - 3,194
Other assets, net (a) 88,089 87,657 90,346 92,051 106,175
Cash and cash equivalents 55,159 56,099 63,148 98,771 170,575
Restricted cash   5,076       5,357       4,898       5,354       5,513  
Total assets $ 4,622,075     $ 4,594,574     $ 4,559,059     $ 4,583,293     $ 4,699,737  
 
 
 
LIABILITIES AND EQUITY
Liabilities
Notes payable
Unsecured $ 1,380,755 $ 1,380,560 $ 1,380,368 $ 1,419,681 $ 1,507,757
Secured 1,051,357 1,052,544 1,053,699 1,054,839 1,055,997
Accounts payable and accrued expenses 93,747 97,613 78,460 81,972 81,556
Accrued real estate taxes 21,883 37,721 27,424 16,585 22,338
Distributions payable 39,364 39,319 38,966 38,662 35,295
Other liabilities (b)   109,276       111,043       123,829       134,608       141,496  
Total liabilities 2,696,382 2,718,800 2,702,746 2,746,347 2,844,439
 
Commitments and contingencies
 
Perpetual preferred units 97,925 97,925 97,925 97,925 97,925
 
Equity
Common shares of beneficial interest 845 839 834 827 824
Additional paid-in capital 2,901,024 2,861,139 2,823,690 2,783,621 2,775,625
Distributions in excess of net income attributable to common shareholders (690,466 ) (700,897 ) (676,367 ) (623,740 ) (595,317 )
Treasury shares, at cost (452,003 ) (452,244 ) (459,134 ) (460,467 ) (461,255 )
Accumulated other comprehensive income (loss) (c)   (683 )     201       93       (31,504 )     (33,458 )
Total common equity 1,758,717 1,709,038 1,689,116 1,668,737 1,686,419
Noncontrolling interest   69,051       68,811       69,272       70,284       70,954  
Total equity   1,827,768       1,777,849       1,758,388       1,739,021       1,757,373  
Total liabilities and equity $ 4,622,075     $ 4,594,574     $ 4,559,059     $ 4,583,293     $ 4,699,737  
 
 
 
(a) Includes:
net deferred charges of:$16,102$16,868$14,484$12,677$13,336
 
(b) Includes:
deferred revenues of:$2,140$2,213$2,181$2,254$2,332
distributions in excess of investments in joint ventures of:$30,596$31,799$31,040$33,442$32,288
fair value adjustment of derivative instruments:$16,486$22,192$27,977$31,655$36,898
 

(c) Represents the fair value adjustment of derivative instruments, unrealized gain on and unamortized prior service costs on post retirement obligations, and unrealized gain on available-for-sale securities, net of tax, if any.

 

   
CAMDEN2012 Financial Outlook
as of February 2, 2012
         
 
(Unaudited)
 
2011 Reported FFO, Adjusted for Non-Routine Items        
 

Total

Per Share

2011 Reported FFO

 

$207,535

 

$2.73

Adjustments for 2011 non-routine items:
Less: Gain on sale of technology investment, net of tax (3,316 )

(0.04)

 

Less: Gain on sale of properties, including land (4,748 )

(0.06)

 

Plus: Loss on discontinuation of hedging relationship & write-off of unamortized loan costs

30,243

0.40

 
2011 FFO adjusted for non-routine items

 

$229,714

 

$3.03

 
2011 Fully Diluted Shares Outstanding - FFO 75,928
 
December 31, 2011 Fully Diluted Shares Outstanding - FFO 77,227
 
2011 FFO adjusted for non-routine items and December 31, 2011 Fully Diluted Shares Outstanding - FFO

 

$2.97

 
2012 Financial Outlook        
 
Earnings Guidance - Per Diluted Share
Expected net income attributable to common shareholders per share - diluted

 

$0.95 - $1.20

Expected real estate depreciation 2.21
Expected adjustments for unconsolidated joint ventures 0.11
Expected income allocated to noncontrolling interests

0.03

Expected FFO per share - diluted

 

$3.30 - $3.55

 
"Same Property" Communities
Number of Units 48,400
2011 Base Net Operating Income

$387 million

Total Revenue Growth

4.75% - 6.25%

 

Total Expense Growth

2.50% - 3.50%

 

Net Operating Income Growth

6.00% - 8.00%

 

Physical Occupancy

95%

 

∙ Impact from 1.0% change in NOI Growth is approximately $0.05 / share
 
Capitalized Maintenance Expenditures$60 - $64 million
 
Acquisitions/Dispositions
Dispositions Volume $100 - $300 million
Acquisitions Volume (consolidated on balance sheet) $400 to $650 million
Acquisitions Volume (joint venture) $50 - $200 million
 
Development
Development Starts (consolidated on balance sheet) $250 - $450 million
Development Starts (joint venture) $0 - $100 million
 
 
Non-Property Income
Non-Property Income, Net $6 - $8 million
Includes: Fee and asset management income, net of expenses and
Interest and other income
 
Corporate Expenses
General and administrative and property management expenses $54 - $58 million
 
Debt
Capitalized Interest $11 - $14 million
Expensed Interest $103 - $109 million
 
Perpetual Preferred Units
Redemption of Perpetual Preferred Units $100 million
 
 

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 EndedTwelve Months Ended
December 31,December 31,
2011   20102011   2010
Net income attributable to common shareholders (a) $ 46,850 $ 17,147 $ 49,379 $ 23,216
Real estate depreciation from continuing operations 43,432 42,926 174,889 165,462
Real estate depreciation from discontinued operations 413 1,059 2,298 5,198
(Gain) on sale of discontinued operations (24,621 ) (9,614 ) (24,621 ) (9,614 )
Adjustments for unconsolidated joint ventures 3,492 2,190 10,534 8,943
(Gain) on sale of unconsolidated joint venture properties (6,394 ) - (6,394 ) -
(Gain) on sale of unconsolidated joint venture interests - - (1,136 ) -
Income allocated to noncontrolling interests   1,092       240     2,586       1,104  
Funds from operations - diluted $ 64,264     $ 53,948   $ 207,535     $ 194,309  
 
Weighted average number of common and
common equivalent shares outstanding:
EPS diluted 74,428 71,587 73,701 68,957
FFO diluted 76,649 73,847 75,928 71,552
 
Net income attributable to common shareholders - diluted $ 0.62 $ 0.24 $ 0.66 $ 0.33
FFO per common share - diluted $ 0.84 $ 0.73 $ 2.73 $ 2.72
 

(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:

 
1Q12 Range2012 Range
Low   HighLow   High
 
Expected net income attributable to common shareholders per share - diluted $ 0.18 $ 0.22 $ 0.95 $ 1.20
Expected real estate depreciation 0.55 0.55 2.21 2.21
Expected adjustments for unconsolidated joint ventures 0.03 0.03 0.11 0.11
Recognized (gain) on sale of unconsolidated joint venture interests 0.00 0.00 0.00 0.00
Expected income allocated to noncontrolling interests   0.01       0.01     0.03       0.03  
Expected FFO per share - diluted $ 0.77 $ 0.81 $ 3.30 $ 3.55
 
 
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 EndedTwelve Months Ended
December 31,December 31,
2011   20102011   2010
Net income attributable to common shareholders $ 46,850 $ 17,147 $ 49,379 $ 23,216
Less: Fee and asset management income (3,018 ) (2,144 ) (9,973 ) (8,172 )
Less: Interest and other (income) loss 100 (4,596 ) (4,649 ) (8,584 )
Less: Income on deferred compensation plans (5,540 ) (4,763 ) (6,773 ) (11,581 )
Plus: Property management expense 5,208 4,988 20,686 19,982
Plus: Fee and asset management expense 1,715 1,230 5,935 4,841
Plus: General and administrative expense 9,064 8,423 35,456 30,762
Plus: Interest expense 26,942 30,815 112,414 125,893
Plus: Depreciation and amortization 44,641 44,213 179,867 170,362
Plus: Amortization of deferred financing costs 1,116 1,478 5,877 4,102
Plus: Expense on deferred compensation plans 5,540 4,763 6,773 11,581
Less: Gain on sale of properties, including land - - (4,748 ) (236 )
Less: Gain on sale of unconsolidated joint venture interests - - (1,136 ) -
Less: Equity in (income) loss of joint ventures (5,845 ) 54 (5,679 ) 839
Plus: Loss on discontinuation of hedging relationship - - 29,791 -
Plus: Impairment provision for technology investments - 1,000 - 1,000
Plus: Income allocated to perpetual preferred units 1,750 1,750 7,000 7,000
Plus: Income allocated to noncontrolling interests 1,464 384 3,582 926
Plus: Income tax expense - current 331 295 2,220 1,581
Less: Income from discontinued operations (609 ) (1,175 ) (2,212 ) (5,360 )
Less: (Gain) on sale of discontinued operations   (24,621 )     (9,614 )   (24,621 )     (9,614 )
Net Operating Income (NOI) $ 105,088 $ 94,248 $ 399,189 $ 358,538
 
"Same Property" Communities $ 94,836 $ 87,849 $ 363,292 $ 339,146
Non-"Same Property" Communities 9,353 6,689 34,316 20,045
Development and Lease-Up Communities 410 - 493 -
Other   489       (290 )   1,088       (653 )
Net Operating Income (NOI) $ 105,088 $ 94,248 $ 399,189 $ 358,538
 
 

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, 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 EndedTwelve Months Ended
December 31,December 31,
2011   20102011   2010
Net income attributable to common shareholders $ 46,850 $ 17,147 $ 49,379 $ 23,216
Plus: Interest expense 26,942 30,815 112,414 125,893
Plus: Amortization of deferred financing costs 1,116 1,478 5,877 4,102
Plus: Depreciation and amortization 44,641 44,213 179,867 170,362
Plus: Income allocated to perpetual preferred units 1,750 1,750 7,000 7,000
Plus: Income allocated to noncontrolling interests 1,464 384 3,582 926
Plus: Income tax expense - current 331 295 2,220 1,581
Plus: Real estate depreciation from discontinued operations 413 1,059 2,298 5,198
Less: Gain on sale of properties, including land - - (4,748 ) (236 )
Less: Gain on sale of unconsolidated joint venture interests - - (1,136 ) -
Less: Equity in (income) loss of joint ventures (5,845 ) 54 (5,679 ) 839
Plus: Loss on discontinuation of hedging relationship - - 29,791 -
Plus: Impairment provision for technology investments - 1,000 - 1,000
Less: (Gain) on sale of discontinued operations   (24,621 )     (9,614 )   (24,621 )     (9,614 )
EBITDA $ 93,041 $ 88,581 $ 356,244 $ 330,267

 

Camden Property Trust
Kim Callahan, 713-354-2549

Source: Camden Property Trust

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