Camden Property Trust Announces Third Quarter 2015 Operating Results

HOUSTON--()--Camden Property Trust (NYSE:CPT) today announced operating results for the three and nine months ended September 30, 2015.

Funds from Operations (“FFO”), Adjusted Funds from Operations (“AFFO”), and Net Income Attributable to Common Shareholders (“EPS”) for the three and nine months ended September 30, 2015 are detailed below.

    Three Months Ended     Nine Months Ended
September 30 September 30
Per Diluted Share     2015 2014     2015 2014
FFO $1.14 $1.09 $3.34 $3.19
AFFO $0.91 $0.89 $2.77 $2.71
EPS     $0.41 $0.43     $2.09 $1.28

A reconciliation of EPS to FFO is included in the financial tables accompanying this press release.

Same Property Results

Quarterly Growth     Sequential Growth     Year to Date Growth
  3Q15 vs. 3Q14     3Q15 vs. 2Q15     2015 vs. 2014
Revenues 5.5 % 2.1 % 5.1 %
Expenses 5.7 % 4.8 % 5.2 %
Net Operating Income ("NOI") 5.5 %     0.6 %     5.0 %
               
  3Q15     3Q14     2Q15
Occupancy 96.0%     95.9%     95.9%

“We are pleased to report another solid quarter of earnings growth,” said Richard Campo, Camden’s Chairman and CEO. “Operating fundamentals in the apartment industry remain favorable, and we expect 2016 to be another strong year for our business.”

The Company defines same property communities as communities owned and stabilized as of January 1, 2014. 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 third quarter at Camden Foothills in Scottsdale, AZ and the property is currently 94% occupied. Construction was completed during the quarter at Camden Flatirons located in Denver, CO and Camden Glendale located in Glendale, CA.

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

            Total       Total       CPT %       % Leased
Community Name       Location       Units       Cost       Owned       as of 10/28/2015
Camden Hayden Tempe, AZ 234 $44.2 100% 88%
Camden Flatirons Denver, CO 424 79.2 100% 81%
Camden Glendale       Glendale, CA       303       112.8       100%       57%
TOTAL               961       $236.2                

Development Communities - Construction Ongoing ($ in millions)

            Total       Total       CPT %       % Leased
Community Name       Location       Units       Budget       Owned       as of 10/28/2015
Camden Paces Atlanta, GA 379 $117.0 100% 67%
Camden Southline Charlotte, NC 266 48.0 31.3% 68%
Camden Chandler Chandler, AZ 380 73.0 100% 67%
Camden Gallery Charlotte, NC 323 58.0 100%
Camden Victory Park Dallas, TX 423 82.0 100%
The Camden Los Angeles, CA 287 145.0 100%
Camden Lincoln Station Denver, CO 267 56.0 100%
Camden NoMa II Washington, DC 405 115.0 100%
Camden Shady Grove Rockville, MD 457 116.0 100%
Camden McGowen Station       Houston, TX       315       90.0       100%        
TOTAL               3,502       $900.0                

Acquisition/Disposition Activity

Subsequent to quarter-end, the Company acquired a 5.8-acre land parcel in Gaithersburg, MD for $13.3 million for the future development of approximately 365 apartment homes. The Company also disposed of Camden Providence Lakes, a 260-home community in Brandon, FL for $33.0 million subsequent to quarter-end.

Earnings Guidance

Camden updated its earnings guidance for 2015 based on its current and expected views of the apartment market and general economic conditions, and provided guidance for fourth quarter 2015 as detailed below.

Per Diluted Share       4Q15       2015
FFO       $1.17 - $1.21       $4.51 - $4.55
EPS       $0.62 - $0.66       $2.71 - $2.75
                 
Same Property Growth       2015 Range       2015 Midpoint
Revenue 5.1% - 5.3% 5.2%
Expenses 5.1% - 5.3% 5.2%
NOI       5.1% - 5.3%       5.2%

Camden intends to update its earnings guidance to the market on a quarterly basis. Additional information on the Company’s 2015 financial outlook and a reconciliation of expected EPS to expected FFO are included in the financial tables accompanying this press release.

Conference Call

The Company will hold a conference call on Friday, October 30, 2015 at 11:00 a.m. Central Time to review its third quarter 2015 results and discuss its outlook for future performance. To participate in the call, please dial (888) 317-6003 (Domestic) or (412) 317-6061 (International) by 10:50 a.m. Central Time and enter passcode: 3697045, or join the live webcast of the conference call by accessing the Investors section of the Company’s website at camdenliving.com. 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 (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, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. Camden owns interests in and operates 170 properties containing 59,147 apartment homes across the United States. Upon completion of 10 properties under development, the Company’s portfolio will increase to 62,649 apartment homes in 180 properties. Camden was recently named by FORTUNE® Magazine for the eighth 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 amounts)

                       

(Unaudited)

 

Three Months Ended
September 30,

Nine Months Ended
September 30,

  2015     2014     2015     2014  

OPERATING DATA

Property revenues
Rental revenues $ 194,515 $ 184,247 $ 571,461 $ 543,649
Other property revenues   32,670     28,851     91,809     83,870  
Total property revenues   227,185     213,098     663,270     627,519  
 
Property expenses
Property operating and maintenance 58,062 55,228 164,532 158,239
Real estate taxes   26,044     23,447     76,774     70,640  
Total property expenses   84,106     78,675     241,306     228,879  
 
Non-property income
Fee and asset management 1,902 2,131 5,083 7,301
Interest and other income 107 430 308 762
Income/(loss) on deferred compensation plans   (3,438 )   (765 )   (1,871 )   1,934  
Total non-property income   (1,429 )   1,796     3,520     9,997  
 
Other expenses
Property management 5,884 5,416 17,928 17,108
Fee and asset management 1,227 1,240 3,424 3,746
General and administrative 11,790 10,331 33,120 30,410
Interest 23,265 22,967 72,288 68,846
Depreciation and amortization 65,079 59,179 190,337 174,528
Amortization of deferred financing costs 725 836 2,143 2,493
Expense/(benefit) on deferred compensation plans   (3,438 )   (765 )   (1,871 )   1,934  
Total other expenses   104,532     99,204     317,369     299,065  
 
Gain on sale of operating properties, including land

-

1,808 85,192 3,609
Impairment associated with land holdings

-

-

-

(1,152 )
Equity in income of joint ventures   1,574     863     4,487     5,889  
Income from continuing operations before income taxes 38,692 39,686 197,794 117,918
Income tax expense   (498 )   (353 )   (1,334 )   (1,228 )
Net income 38,194 39,333 196,460 116,690
Less income allocated to non-controlling interests from continuing operations   (1,150 )   (1,050 )   (7,738 )   (3,099 )
Net income attributable to common shareholders $ 37,044   $ 38,283   $ 188,722   $ 113,591  
 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income $ 38,194 $ 39,333 $ 196,460 $ 116,690
Other comprehensive income
Unrealized loss on cash flow hedging activities

-

(417 )

-

(417 )
Reclassification of net loss on cash flow hedging activities, prior service cost and net
loss on post retirement obligation   38     20     112     49  
Comprehensive income 38,232 38,936 196,572 116,322
Less income allocated to non-controlling interests from continuing operations   (1,150 )   (1,050 )   (7,738 )   (3,099 )
Comprehensive income attributable to common shareholders $ 37,082   $ 37,886   $ 188,834   $ 113,223  
 

PER SHARE DATA

Total earnings per common share – basic $ 0.41 $ 0.43 $ 2.10 $ 1.28
Total earnings per common share – diluted 0.41 0.43 2.09 1.28
 
Weighted average number of common shares outstanding:
Basic 89,164 88,146 89,102 87,882
Diluted 90,341 89,353 89,450 89,052

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,

2015 2014 2015 2014

FUNDS FROM OPERATIONS

 
Net income attributable to common shareholders $ 37,044 $ 38,283 $ 188,722 $ 113,591
Real estate depreciation and amortization 63,852 58,039 186,818 170,606
Adjustments for unconsolidated joint ventures 2,300 1,340 6,782 3,980
Income allocated to non-controlling interests 1,150 1,050 7,738 3,099
Gain on sale of unconsolidated joint venture properties

-

-

-

(3,566 )
Gain on sale of operating properties, net of tax  

-

   

-

    (85,145 )  

-

 
Funds from operations $ 104,346   $ 98,712   $ 304,915   $ 287,710  
 
Less: recurring capitalized expenditures (a) (21,508 ) (18,074 ) (52,002 ) (43,484 )
               
Adjusted funds from operations - diluted $ 82,838   $ 80,638   $ 252,913   $ 244,226  
 

PER SHARE DATA

Funds from operations - diluted $ 1.14 $ 1.09 $ 3.34 $ 3.19
Adjusted funds from operations - diluted 0.91 0.89 2.77 2.71
Distributions declared per common share 0.70 0.66 2.10 1.98
 
Weighted average number of common shares outstanding:
FFO/AFFO - diluted 91,426 90,439 91,347 90,138
 

PROPERTY DATA

Total operating properties (end of period) (b) 171 170 171 170
Total operating apartment homes in operating properties (end of period) (b) 59,407 60,038 59,407 60,038
Total operating apartment homes (weighted average) 52,323 52,964 51,881 52,778

(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,
2015
  Jun 30,
2015
  Mar 31,
2015
  Dec 31,
2014
  Sep 30,
2014
 
ASSETS
Real estate assets, at cost
Land $ 1,047,453 $ 1,034,649 $ 1,012,684 $ 1,003,422 $ 997,349
Buildings and improvements   6,237,648     6,134,510     5,979,985     5,890,498     5,894,453  
7,285,101 7,169,159 6,992,669 6,893,920 6,891,802
Accumulated depreciation   (1,914,469 )   (1,860,923 )   (1,798,955 )   (1,738,862 )   (1,813,124 )
Net operating real estate assets 5,370,632 5,308,236 5,193,714 5,155,058 5,078,678
Properties under development, including land 443,469 488,565 519,454 527,596 576,269
Investments in joint ventures 34,705 35,731 36,526 36,429 35,180
Properties held for sale   13,168    

-

   

-

    27,143    

-

 
Total real estate assets 5,861,974 5,832,532 5,749,694 5,746,226 5,690,127
Accounts receivable – affiliates 25,053 25,855 25,652 25,977 25,954
Other assets, net (a) 130,360 120,082 122,326 124,888 123,999
Cash and cash equivalents 10,375 16,508 174,353 153,918 66,127
Restricted cash   6,126     5,791     5,034     5,898     5,769  
Total assets $ 6,033,888   $ 6,000,768   $ 6,077,059   $ 6,056,907   $ 5,911,976  
 
 
 
LIABILITIES AND EQUITY
Liabilities
Notes payable
Unsecured $ 1,811,739 $ 1,770,491 $ 1,838,203 $ 1,837,911 $ 1,837,621
Secured 903,468 904,196 904,914 905,628 906,328
Accounts payable and accrued expenses 131,532 128,532 134,438 157,232 147,255
Accrued real estate taxes 57,642 43,905 23,269 39,149 54,369
Distributions payable 64,276 64,253 64,261 60,386 60,265
Other liabilities (b)   96,679     100,515     102,163     100,058     94,230  
Total liabilities 3,065,336 3,011,892 3,067,248 3,100,364 3,100,068
 
Commitments and contingencies
Non-qualified deferred compensation share awards 72,316 69,791 69,902 68,134 60,363
 
Equity
Common shares of beneficial interest 976 976 976 976 974
Additional paid-in capital 3,660,482 3,657,537 3,656,105 3,667,448 3,649,750
Distributions in excess of net income attributable to common shareholders (452,257 ) (426,614 ) (403,518 ) (453,777 ) (568,142 )
Treasury shares, at cost (387,114 ) (387,172 ) (388,181 ) (396,626 ) (397,497 )
Accumulated other comprehensive loss (c)   (2,307 )   (2,345 )   (2,382 )   (2,419 )   (1,474 )
Total common equity 2,819,780 2,842,382 2,863,000 2,815,602 2,683,611
Non-controlling interests   76,456     76,703     76,909     72,807     67,934  
Total equity   2,896,236     2,919,085     2,939,909     2,888,409     2,751,545  
Total liabilities and equity $ 6,033,888   $ 6,000,768   $ 6,077,059   $ 6,056,907   $ 5,911,976  
 
 
 
(a) Includes net deferred charges of: $14,452 $11,921 $12,432 $13,219 $14,361
 
(b) Includes deferred revenues of: $1,918 $843 $1,728 $1,848 $1,734
 
(c) 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. Definitions of recurring capital expenditures are subjective. Accordingly, there can be no assurance our basis for computing this non-GAAP measure is comparable with that of other REITs. A reconciliation of FFO to AFFO is provided below:

       

Three Months Ended
September 30,

Nine Months Ended
September 30,

2015   2014 2015   2014
Net income attributable to common shareholders $ 37,044   $ 38,283 $ 188,722   $ 113,591
Real estate depreciation and amortization 63,852 58,039 186,818 170,606
Adjustments for unconsolidated joint ventures 2,300 1,340 6,782 3,980
Income allocated to non-controlling interests 1,150 1,050 7,738 3,099
Gain on sale of unconsolidated joint venture properties

-

-

-

(3,566 )
Gain on sale of operating properties, net of tax  

-

     

-

    (85,145 )    

-

 
Funds from operations $ 104,346     $ 98,712   $ 304,915     $ 287,710  
 
Less: recurring capitalized expenditures (21,508 ) (18,074 ) (52,002 ) (43,484 )
           
Adjusted funds from operations $ 82,838     $ 80,638   $ 252,913     $ 244,226  
 
Weighted average number of common shares outstanding:
EPS diluted 90,341 89,353 89,450 89,052
FFO/AFFO diluted 91,426 90,439 91,347 90,138
 
Earnings per common share - diluted $ 0.41 $ 0.43 $ 2.09 $ 1.28
FFO per common share - diluted $ 1.14 $ 1.09 $ 3.34 $ 3.19
AFFO per common share - diluted $ 0.91 $ 0.89 $ 2.77 $ 2.71
 

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). A reconciliation of the ranges provided for diluted EPS to expected FFO per diluted share is provided below:

 
4Q15 Range 2015 Range
Low   High Low   High
Expected earnings per common share - diluted $ 0.62 $ 0.66 $ 2.71 $ 2.75
Expected real estate depreciation and amortization 0.70 0.70 2.72 2.72
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 0.10 0.10
(Gain) on sale of unconsolidated joint venture property

-

-

-

-

Realized (gain) on sale of operating properties

-

-

(0.93 ) (0.93 )
Estimated (gain) on sale of operating property   (0.19 )     (0.19 )   (0.19 )     (0.19 )
Expected FFO per share - diluted $ 1.17 $ 1.21 $ 4.51 $ 4.55
 

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 ended
September 30,

Nine months ended
September 30,

2015   2014 2015   2014
Net income attributable to common shareholders $ 37,044 $ 38,283 $ 188,722 $ 113,591
Less: Fee and asset management (1,902 ) (2,131 ) (5,083 ) (7,301 )
Less: Interest and other income (107 ) (430 ) (308 ) (762 )
Less: Income/(loss) on deferred compensation plans 3,438 765 1,871 (1,934 )
Plus: Property management 5,884 5,416 17,928 17,108
Plus: Fee and asset management 1,227 1,240 3,424 3,746
Plus: General and administrative 11,790 10,331 33,120 30,410
Plus: Interest 23,265 22,967 72,288 68,846
Plus: Depreciation and amortization 65,079 59,179 190,337 174,528
Plus: Amortization of deferred financing costs 725 836 2,143 2,493
Plus: Expense/(benefit) on deferred compensation plans (3,438 ) (765 ) (1,871 ) 1,934
Less: Gain on sale of operating properties, including land

-

(1,808 ) (85,192 ) (3,609 )
Less: Impairment associated with land holdings

-

-

-

1,152
Less: Equity in income of joint ventures (1,574 ) (863 ) (4,487 ) (5,889 )
Plus: Income tax expense 498 353 1,334 1,228
Plus: Income allocated to non-controlling interests from continuing operations   1,150       1,050     7,738       3,099  
Net Operating Income (NOI) $ 143,079 $ 134,423 $ 421,964 $ 398,640
 
"Same Property" Communities $ 130,695 $ 123,929 $ 386,416 $ 367,863
Non-"Same Property" Communities 7,982 3,919 25,442 11,425
Development and Lease-Up Communities 2,943 269 5,610 297
Dispositions/Other   1,459       6,306  

 

  4,496       19,055  
Net Operating Income (NOI) $ 143,079 $ 134,423 $ 421,964 $ 398,640
 

EBITDA

 

EBITDA is defined by the Company as earnings before interest, taxes, depreciation and amortization, 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 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
September 30,

Nine months ended
September 30,

2015   2014 2015   2014
Net income attributable to common shareholders $ 37,044 $ 38,283 $ 188,722 $ 113,591
Plus: Interest 23,265 22,967 72,288 68,846
Plus: Amortization of deferred financing costs 725 836 2,143 2,493
Plus: Depreciation and amortization 65,079 59,179 190,337 174,528
Plus: Income allocated to non-controlling interests from continuing operations 1,150 1,050 7,738 3,099
Plus: Income tax expense 498 353 1,334 1,228
Less: Gain on sale of operating properties, including land

-

(1,808 ) (85,192 ) (3,609 )
Less: Impairment associated with land holdings

-

-

-

1,152
Less: Equity in income of joint ventures   (1,574 )     (863 )   (4,487 )     (5,889 )
EBITDA $ 126,187 $ 119,997 $ 372,883 $ 355,439

Contacts

Camden Property Trust
Kim Callahan, 713-354-2549

Contacts

Camden Property Trust
Kim Callahan, 713-354-2549