Camden Property Trust Announces Third Quarter 2016 Operating Results

News Details

Camden Property Trust Announces Third Quarter 2016 Operating Results

Camden Property Trust Announces Third Quarter 2016 Operating Results

Contact Us

Camden Property Trust Announces Third Quarter 2016 Operating Results

Home

About

Blog

Careers

Log In

Our doors are open

View All News

10/27/2016

HOUSTON--(BUSINESS WIRE)-- Camden Property Trust (NYSE:CPT) today announced operating results for the three and nine months ended September 30, 2016. Net Income Attributable to Common Shareholders (“EPS”), Funds from Operations (“FFO”), and Adjusted Funds from Operations (“AFFO”) for the three and nine months ended September 30, 2016 are detailed below. A reconciliation of EPS to FFO is included in the financial tables accompanying this press release.


	Three Months Ended				Nine Months Ended
	September 30				September 30
Per Diluted Share	2016		2015		2016		2015
EPS	$	3.21	$	0.41	$	8.60	$	2.09
FFO	$	1.13	$	1.14	$	3.49	$	3.34
AFFO	$	0.92	$	0.94	$	3.01	$	2.83


	Quarterly Growth		Sequential Growth		Year to Date Growth
Same Property Results	3Q16 vs. 3Q15		3Q16 vs. 2Q16		2016 vs. 2015
Revenues	3.7	%	1.6	%	4.2	%
Expenses	2.2	%	1.4	%	3.2	%
Net Operating Income ("NOI")	4.5	%	1.7	%	4.7	%


Same Property Results	3Q16		3Q15		2Q16
Occupancy	95.8	%	96.2	%	95.5	%

“We are pleased to announce another solid quarter of performance,” said Richard Campo, Camden’s Chairman and CEO. “Our earnings were better than expected primarily due to lower operating expenses and the timing of certain dispositions, and we have raised our full-year guidance for both FFO and same property NOI as a result. In addition, we have now successfully completed all dispositions planned for 2016, for a total of nearly $1.2 billion in asset sales year-to-date, and we paid a special dividend of $4.25 per share to our common shareholders.”

The Company defines same property communities as communities owned and stabilized as of January 1, 2015, excluding properties held for sale. A reconciliation of net income to NOI and same property NOI is included in the financial tables accompanying this press release.

Development Activity

Lease-up was completed during the quarter at Camden Glendale in Glendale, CA, and construction was completed at Camden Victory Park in Dallas, TX. The Company also commenced construction at Camden Washingtonian in Gaithersburg, MD.

Development Communities - Construction Completed and Projects in Lease-Up ($ in millions)


		Total	Total		% Leased
Community Name	Location	Units	Cost		as of 10/26/2016
Camden Chandler	Chandler, AZ	380	$	67.8	87	%
Camden Victory Park	Dallas, TX	423		84.8	67	%
TOTAL		803	$	152.6

Development Communities - Construction Ongoing ($ in millions)


		Total	Total		% Leased
Community Name	Location	Units	Budget		as of 10/26/2016
Camden Gallery	Charlotte, NC	323	$	58.0	69	%
The Camden	Los Angeles, CA	287		145.0	70	%
Camden Lincoln Station	Denver, CO	267		56.0
Camden NoMa II	Washington, DC	405		115.0
Camden Shady Grove	Rockville, MD	457		116.0
Camden McGowen Station	Houston, TX	315		90.0
Camden Washingtonian	Gaithersburg, MD	365		90.0
TOTAL		2,419	$	670.0

Acquisition/Disposition Activity

During the quarter Camden acquired approximately 2.4 acres of land in Denver, CO for $15.0 million for the future development of approximately 230 apartment homes. The Company also sold one dual-phased community and five operating communities comprised of 2,906 apartment homes for approximately $484.4 million. Year-to-date, dispositions totaled nearly $1.2 billion.

Earnings Guidance

Camden updated its earnings guidance for 2016 based on its current and expected views of the apartment market and general economic conditions, and provided guidance for fourth quarter 2016 as detailed below.


Per Diluted Share	4Q16	2016
EPS	$0.40 - $0.44	$9.00 - $9.04
FFO	$1.12 - $1.16	$4.61 - $4.65

The Company's revised 2016 same store expense guidance is the result of lower projected operating expenses, including lower than anticipated property taxes due to both lower rates and valuations combined with better than expected resolutions to several prior year property tax appeals. The majority of the tax refunds from these prior year appeals will be recognized in the fourth quarter of 2016.

Camden intends to update its earnings guidance to the market on a quarterly basis. Additional information on the Company’s 2016 financial outlook and a reconciliation of expected EPS to expected FFO are included in the financial tables accompanying this press release.

Special Dividend

In addition to the regular quarterly dividend, Camden declared a special dividend of $4.25 per share to its common shareholders of record as of September 23, 2016. The special dividend, consisting primarily of gains on dispositions completed in 2016, was paid on September 30, 2016.

Conference Call

Friday, October 28, 2016 at 11:00 AM CT
Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061
Passcode: 6983019
Webcast: http://services.choruscall.com/links/cpt161028.html
Supplemental financial information is available in the Investors section of the Company’s website under Earnings Releases or by calling Camden’s Investor Relations Department at (713) 354-2787.

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 (the "Company") 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 at the time of this publication, 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, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. Camden owns interests in and operates 151 properties containing 52,506 apartment homes across the United States. Upon completion of 7 properties under development, the Company’s portfolio will increase to 54,925 apartment homes in 158 properties. Camden was recently named by FORTUNE® Magazine for the ninth consecutive year as one of the “100 Best Companies to Work For” in America, ranking #9.

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


CAMDEN	OPERATING RESULTS
	(In thousands, except per share amounts)

(Unaudited)

		Three Months Ended September 30,						Nine Months Ended September 30,
		2016			2015			2016			2015
OPERATING DATA
Property revenues
Rental revenues		$	187,771		$	182,650		$	564,136		$	536,183
Other property revenues			32,464			29,943			95,172			84,450
Total property revenues			220,235			212,593			659,308			620,633

Property expenses
Property operating and maintenance			53,679			53,380			156,804			151,400
Real estate taxes			26,695			25,284			80,875			74,542
Total property expenses			80,374			78,664			237,679			225,942

Non-property income
Fee and asset management			1,667			1,902			5,223			5,083
Interest and other income			927			107			1,366			308
Income/(loss) on deferred compensation plans			3,494			(3,438	)		4,781			(1,871	)
Total non-property income			6,088			(1,429	)		11,370			3,520

Other expenses
Property management			5,590			5,700			19,147			17,423
Fee and asset management			911			1,227			2,861			3,424
General and administrative			10,810			11,790			34,836			33,120
Interest ^(a)			23,076			23,674			69,936			73,572
Depreciation and amortization			62,832			61,336			187,379			179,260
Expense/(benefit) on deferred compensation plans			3,494			(3,438	)		4,781			(1,871	)
Total other expenses			106,713			100,289			318,940			304,928

Gain on sale of operating properties, including land			262,719			-			295,397			85,192
Equity in income of joint ventures			1,866			1,574			5,052			4,487
Income from continuing operations before income taxes			303,821			33,785			414,508			182,962
Income tax expense			(400	)		(498	)		(1,204	)		(1,334	)
Income from continuing operations			303,421			33,287			413,304			181,628
Income from discontinued operations			-			4,907			7,605			14,832
Gain on sale of discontinued operations, net of tax			-			-			375,237			-
Net income			303,421			38,194			796,146			196,460
Less income allocated to non-controlling interests from continuing operations			(12,523	)		(1,150	)		(17,216	)		(7,738	)
Net income attributable to common shareholders		$	290,898		$	37,044		$	778,930		$	188,722

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income		$303,421			$38,194			$796,146			$196,460
Other comprehensive income
Reclassification of net loss on cash flow hedging activities, prior service cost and net loss on post retirement obligation			32			38			97			112
Comprehensive income			303,453			38,232			796,243			196,572
Less income allocated to non-controlling interests from continuing operations			(12,523	)		(1,150	)		(17,216	)		(7,738	)
Comprehensive income attributable to common shareholders		$	290,930		$	37,082		$	779,027		$	188,834

PER SHARE DATA

Total earnings per common share - basic		$	3.23		$	0.41		$	8.63		$	2.10
Total earnings per common share - diluted			3.21			0.41			8.60			2.09
Earnings per share from continuing operations - basic			3.23			0.36			4.35			1.93
Earnings per share from continuing operations - diluted			3.21			0.36			4.34			1.93

Weighted average number of common shares outstanding:
Basic			89,669			89,164			89,524			89,102
Diluted			90,012			89,530			89,858			89,450

(a) Prior period has been changed to reflect the adoption of ASU 2015-03 (as supplemented by ASU 2015-15) at December 31, 2015, which required retrospective application.

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 September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
FUNDS FROM OPERATIONS

Net income attributable to common shareholders	$	290,898		$	37,044		$	778,930		$	188,722
Real estate depreciation and amortization		61,264			59,793			182,694			174,882
Real estate depreciation from discontinued operations		-			4,059			4,327			11,936
Adjustments for unconsolidated joint ventures		2,266			2,300			6,944			6,782
Income allocated to non-controlling interests		12,523			1,150			17,216			7,738
Gain on sale of operating properties, net of tax		(262,719	)		-			(294,954	)		(85,145	)
Gain on sale of discontinued operations, net of tax		-			-			(375,237	)		-
Funds from operations	$	104,232		$	104,346		$	319,920		$	304,915

Less: recurring capitalized expenditures (a)		(19,246	)		(18,202	)		(43,609	)		(46,740	)

Adjusted funds from operations - diluted	$	84,986		$	86,144		$	276,311		$	258,175

PER SHARE DATA
Funds from operations - diluted	$	1.13		$	1.14		$	3.49		$	3.34
Adjusted funds from operations - diluted		0.92			0.94			3.01			2.83
Distributions declared per common share		0.75			0.70			2.25			2.10
Special Distributions declared per common share		4.25			-			4.25			-

Weighted average number of common shares outstanding:
FFO/AFFO - diluted		91,901			91,426			91,749			91,347

PROPERTY DATA
Total operating properties (end of period) ^(b)		151			171			151			171
Total operating apartment homes in operating properties (end of period) ^(b)		52,506			59,407			52,506			59,407
Total operating apartment homes (weighted average)		46,702			52,323			49,521			51,881
Total operating apartment homes - excluding discontinued operations (weighted average)		46,702			47,405			47,426			46,963

(a) Capital expenditures necessary to help preserve the value of and maintain the functionality at our communities.

(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.


CAMDEN	BALANCE SHEET
	(In thousands)

(Unaudited)

	Sep 30, 2016			Jun 30, 2016			Mar 31, 2016			Dec 31, 2015			Sep 30, 2015
ASSETS
Real estate assets, at cost
Land	$	962,507		$	989,097		$	998,519		$	989,247		$	990,035
Buildings and improvements		5,910,347			5,956,361			5,978,843			5,911,432			5,890,751
		6,872,854			6,945,458			6,977,362			6,900,679			6,880,786
Accumulated depreciation		(1,829,563	)		(1,855,678	)		(1,841,107	)		(1,780,694	)		(1,730,929	)
Net operating real estate assets		5,043,291			5,089,780			5,136,255			5,119,985			5,149,857
Properties under development, including land		425,452			446,740			489,730			486,918			439,777
Investments in joint ventures		30,046			31,142			32,568			33,698			34,705
Properties held for sale, including land
Operating properties held for sale ^(a)		-			105,254			-			-			-
Discontinued operations held for sale ^(b)		-			-			238,417			239,063			237,635
Total real estate assets		5,498,789			5,672,916			5,896,970			5,879,664			5,861,974
Short-term investments ^(c)		100,000			-			-			-			-
Accounts receivable – affiliates		23,998			24,008			24,011			25,100			25,053
Other assets, net ^(d)		143,059			139,263			107,161			116,260			118,985
Cash and cash equivalents		313,742			341,726			6,935			10,617			10,375
Restricted cash		8,691			21,561			5,378			5,971			6,126
Total assets	$	6,088,279		$	6,199,474		$	6,040,455		$	6,037,612		$	6,022,513



LIABILITIES AND EQUITY
Liabilities
Notes payable
Unsecured	$	1,582,655		$	1,582,077		$	1,866,502		$	1,824,930		$	1,803,360
Secured		897,971			898,723			899,315			899,757			900,472
Accounts payable and accrued expenses		143,193			140,864			140,991			133,353			131,532
Accrued real estate taxes		66,079			46,801			25,499			45,223			57,642
Distributions payable		82,861			69,116			69,020			64,275			64,276
Other liabilities ^(e)		122,270			117,023			86,423			97,814			96,679
Total liabilities		2,895,029			2,854,604			3,087,750			3,065,352			3,053,961

Commitments and contingencies
Non-qualified deferred compensation share awards		72,222			72,480			88,550			79,364			72,316

Equity
Common shares of beneficial interest		978			978			975			976			976
Additional paid-in capital		3,675,806			3,673,237			3,658,372			3,662,864			3,660,482
Distributions in excess of net income attributable to common shareholders		(261,324	)		(104,004	)		(491,275	)		(458,577	)		(452,257	)
Treasury shares, at cost		(373,597	)		(373,914	)		(378,032	)		(386,793	)		(387,114	)
Accumulated other comprehensive loss ^(f)		(1,816	)		(1,848	)		(1,881	)		(1,913	)		(2,307	)
Total common equity		3,040,047			3,194,449			2,788,159			2,816,557			2,819,780
Non-controlling interests		80,981			77,941			75,996			76,339			76,456
Total equity		3,121,028			3,272,390			2,864,155			2,892,896			2,896,236
Total liabilities and equity	$	6,088,279		$	6,199,474		$	6,040,455		$	6,037,612		$	6,022,513

(a) Operating properties held for sale includes one dual-phase property and one operating property as of June 30, 2016 which were each subsequently sold in July.

(b) All prior periods presented have been changed to present the 15 operating properties, 19.6 acres of land, and retail center located in Las Vegas, Nevada, which were classified as held for sale at March 31, 2016 and subsequently sold on April 26, 2016. (See page 19 for additional information relating to this sale).

(c) At September 30, 2016, our short-term investments consist wholly of a certificate of deposit that has a maturity date of January 4, 2017.

(d) Includes net deferred charges of:

2,140

2,353

2,600

2,851

3,077

(e) Includes deferred revenues of:

1,598

831

1,797

1,768

1,918

(f) Represents the unrealized net loss and unamortized prior service costs on post retirement obligation, and unrealized loss on cash flow hedging activities.


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 (computed in accordance with accounting principles generally accepted in the United States of America ("GAAP")), excluding gains (or losses) associated with previously depreciated operating properties, real estate depreciation and amortization, impairments of depreciable assets, and adjustments for unconsolidated joint ventures. Our calculation of diluted FFO also assumes conversion of all potentially dilutive securities, including certain non-controlling interests, which are convertible into common shares. We consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions of operating properties, and depreciation, FFO can assist in the comparison of the operating performance of a company’s real estate investments between periods or to different companies. A reconciliation of net income attributable to common shareholders to FFO is provided below: Adjusted FFO In addition to FFO, we compute Adjusted FFO ("AFFO") as a supplemental measure of operating performance. AFFO is calculated utilizing FFO less recurring capital expenditures which are necessary to help preserve the value of and maintain the functionality at our communities. Our definition of recurring capital expenditures may differ from other REITs, and there can be no assurance our basis for computing this measure is comparable to other REITs. A reconciliation of FFO to AFFO is provided below:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income attributable to common shareholders	$	290,898		$	37,044		$	778,930		$	188,722
Real estate depreciation and amortization		61,264			59,793			182,694			174,882
Real estate depreciation from discontinued operations		-			4,059			4,327			11,936
Adjustments for unconsolidated joint ventures		2,266			2,300			6,944			6,782
Income allocated to non-controlling interests		12,523			1,150			17,216			7,738
Gain on sale of operating properties, net of tax		(262,719	)		-			(294,954	)		(85,145	)
Gain on sale of discontinued operations, net of tax		-			-			(375,237	)		-
Funds from operations	$	104,232		$	104,346		$	319,920		$	304,915

Less: recurring capitalized expenditures		(19,246	)		(18,202	)		(43,609	)		(46,740	)

Adjusted funds from operations	$	84,986		$	86,144		$	276,311		$	258,175

Weighted average number of common shares outstanding:
EPS diluted		90,012			89,530			89,858			89,450
FFO/AFFO diluted		91,901			91,426			91,749			91,347

Total earnings per common share - diluted	$	3.21		$	0.41		$	8.60		$	2.09
FFO per common share - diluted	$	1.13		$	1.14		$	3.49		$	3.34
AFFO per common share - diluted	$	0.92		$	0.94		$	3.01		$	2.83

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 earnings per common share (EPS). Guidance excludes gains, if any, on properties not currently held for sale due to the uncertain timing and extent of property dispositions and the resulting gains/losses on sales. A reconciliation of the ranges provided for diluted EPS to expected FFO per diluted share is provided below:

	4Q16Range						2016Range
	Low			High			Low			High
Expected earnings per common share - diluted	$	0.40		$	0.44		$	9.00		$	9.04
Expected real estate depreciation and amortization		0.68			0.68			2.75			2.75
Expected adjustments for unconsolidated joint ventures		0.03			0.03			0.10			0.10
Expected income allocated to non-controlling interests		0.01			0.01			0.21			0.21
Reported (gain) on sale of operating properties		-			-			(3.28	)		(3.28	)
Reported (gain) on sale of discontinued operations		-			-			(4.17	)		(4.17	)
Expected FFO per share - diluted	$	1.12		$	1.16		$	4.61		$	4.65

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. NOI is further detailed in the Components of Property NOI schedules on page 11. 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 September 30,						Nine months ended September 30,
	2016			2015			2016			2015
Net income	$	303,421		$	38,194		$	796,146		$	196,460
Less: Fee and asset management income		(1,667	)		(1,902	)		(5,223	)		(5,083	)
Less: Interest and other income		(927	)		(107	)		(1,366	)		(308	)
Less: Income/(loss) on deferred compensation plans		(3,494	)		3,438			(4,781	)		1,871
Plus: Property management expense		5,590			5,700			19,147			17,423
Plus: Fee and asset management expense		911			1,227			2,861			3,424
Plus: General and administrative expense		10,810			11,790			34,836			33,120
Plus: Interest expense		23,076			23,674			69,936			73,572
Plus: Depreciation and amortization expense		62,832			61,336			187,379			179,260
Plus: Expense/(benefit) on deferred compensation plans		3,494			(3,438	)		4,781			(1,871	)
Less: Gain on sale of operating properties, including land		(262,719	)		-			(295,397	)		(85,192	)
Less: Equity in income of joint ventures		(1,866	)		(1,574	)		(5,052	)		(4,487	)
Plus: Income tax expense		400			498			1,204			1,334
Less: Income from discontinued operations		-			(4,907	)		(7,605	)		(14,832	)
Less: Gain on sale of discontinued operations, net of tax		-			-			(375,237	)		-
Net Operating Income (NOI)	$	139,861		$	133,929		$	421,629		$	394,691

"Same Property" Communities	$	120,966		$	115,739		$	357,919		$	341,910
Non-"Same Property" Communities		11,801			8,545			35,898			24,160
Development and Lease-Up Communities		2,525			359			4,745			576
Dispositions/Other		4,569			9,286			23,067			28,045
Net Operating Income (NOI)	$	139,861		$	133,929		$	421,629		$	394,691

Adjusted EBITDA Adjusted 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 operating properties including land, net of tax, and income (loss) allocated to non-controlling interests. The Company considers Adjusted 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 Adjusted EBITDA is provided below:

	Three months ended September 30,						Nine months ended September 30,
	2016			2015			2016			2015
Net income attributable to common shareholders	$	290,898		$	37,044		$	778,930		$	188,722
Plus: Interest expense		23,076			23,674			69,936			73,572
Plus: Depreciation and amortization expense		62,832			61,336			187,379			179,260
Plus: Income allocated to non-controlling interests from continuing operations		12,523			1,150			17,216			7,738
Plus: Income tax expense		400			498			1,204			1,334
Plus: Real estate depreciation from discontinued operations		-			4,059			4,327			11,936
Less: Gain on sale of operating properties, including land		(262,719	)		-			(295,397	)		(85,192	)
Less: Equity in income of joint ventures		(1,866	)		(1,574	)		(5,052	)		(4,487	)
Less: Gain on sale of discontinued operations, net of tax		-			-			(375,237	)		-
Adjusted EBITDA	$	125,144		$	126,187		$	383,306		$	372,883

View source version on businesswire.com: http://www.businesswire.com/news/home/20161027006672/en/

Camden Property Trust
Kim Callahan, 713-354-2549

Source: Camden Property Trust

View All News

Same Property Growth

3.9% - 4.1%

2.3% - 2.5%

4.8% - 5.0%