Camden Property Trust Announces Second Quarter 2015 Operating Results

July 30, 2015 04:24 PM Eastern Daylight Time

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

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


	Three Months Ended		Six Months Ended
	June 30		June 30
Per Diluted Share	2015	2014	2015	2014
FFO	$1.12	$1.05	$2.20	$2.10
AFFO	$0.91	$0.86	$1.86	$1.82
EPS	$0.40	$0.40	$1.68	$0.85

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
	2Q15 vs. 2Q14	2Q15 vs. 1Q15	2015 vs. 2014
Revenues	5.2%	2.2%	4.9%
Expenses	3.9%	0.3%	5.0%
Net Operating Income ("NOI")	5.9%	3.3%	4.8%

	2Q15	2Q14	1Q15
Occupancy	96.0%	95.6%	95.5%

“Operating performance remains strong across our markets, with continued demand for well-located apartment homes,” said Richard Campo, Camden’s Chairman and CEO. “As a result, we are raising our 2015 projections for both FFO and same property growth for the second time this year.”

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

Construction was completed during the second quarter at Camden Hayden located in Tempe, AZ, and construction commenced at Camden Shady Grove in Rockville, MD.

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


		Total	Total	CPT %	% Leased
Community Name	Location	Units	Cost	Owned	as of 7/26/2015
Camden Foothills	Scottsdale, AZ	220	$44.6	100%	89%
Camden Hayden	Tempe, AZ	234	44.2	100%	67%
TOTAL		454	$88.8

Development Communities - Construction Ongoing ($ in millions)


		Total	Total	CPT %	% Leased
Community Name	Location	Units	Budget	Owned	as of 7/26/2015
Camden Flatirons	Denver, CO	424	$79	100%	79%
Camden Paces	Atlanta, GA	379	117	100%	57%
Camden Southline	Charlotte, NC	266	48	31.3%	50%
Camden Chandler	Chandler, AZ	380	73	100%	38%
Camden Glendale	Glendale, CA	303	115	100%	33%
Camden Gallery	Charlotte, NC	323	58	100%
Camden Victory Park	Dallas, TX	423	82	100%
The Camden	Los Angeles, CA	287	145	100%
Camden Lincoln Station	Denver, CO	267	56	100%
Camden McGowen Station	Houston, TX	315	90	100%
Camden NoMa II	Washington, DC	405	115	100%
Camden Shady Grove	Rockville, MD	457	116	100%
TOTAL		4,229	$1,094

Acquisition/Disposition Activity

During the quarter, Camden acquired a 49.6-acre land parcel in Phoenix, AZ and a 2.7-acre land parcel in Los Angeles, CA for the future development of up to 1,274 apartment homes.

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 third quarter 2015 as detailed below.


Per Diluted Share	3Q15	2015
FFO	$1.12 - $1.16	$4.47 - $4.57
EPS	$0.38 - $0.42	$2.45 - $2.55

Same Property Growth	2015 Range	2015 Midpoint
Revenue	4.75% - 5.25%	5.00%
Expenses	4.75% - 5.25%	5.00%
NOI	4.75% - 5.25%	5.00%

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, July 31, 2015 at 11:00 a.m. Central Time to review its second 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: 6772868, 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, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. Camden owns interests in and operates 169 properties containing 58,680 apartment homes across the United States. Upon completion of 12 properties under development, the Company’s portfolio will increase to 62,909 apartment homes in 181 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 June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
OPERATING DATA
Property revenues
Rental revenues	$190,089		$180,438		$376,946		$359,402
Other property revenues	30,562		28,054		59,139		55,019
Total property revenues	220,651		208,492		436,085		414,421

Property expenses
Property operating and maintenance	53,472		52,264		106,470		103,011
Real estate taxes	25,317		23,616		50,730		47,193
Total property expenses	78,789		75,880		157,200		150,204

Non-property income
Fee and asset management	1,618		2,147		3,181		5,170
Interest and other income	141		44		201		332
Income/(loss) on deferred compensation plans	(297	)	2,018		1,567		2,699
Total non-property income	1,462		4,209		4,949		8,201

Other expenses
Property management	6,082		5,853		12,044		11,692
Fee and asset management	1,121		1,247		2,197		2,506
General and administrative	11,582		10,534		21,330		20,079
Interest	24,411		22,746		49,023		45,879
Depreciation and amortization	63,728		57,953		125,258		115,349
Amortization of deferred financing costs	620		816		1,418		1,657
Expense/(benefit) on deferred compensation plans	(297	)	2,018		1,567		2,699
Total other expenses	107,247		101,167		212,837		199,861

Gain on sale of operating properties, including land	—		1,447		85,192		1,801
Impairment associated with land holdings	—		(1,152	)	—		(1,152	)
Equity in income of joint ventures	1,531		736		2,913		5,026
Income from continuing operations before income taxes	37,608		36,685		159,102		78,232
Income tax expense	(407	)	(401	)	(836	)	(875	)
Net income	37,201		36,284		158,266		77,357
Less income allocated to non-controlling interests from continuing operations	(1,122	)	(1,012	)	(6,588	)	(2,049	)
Net income attributable to common shareholders	$36,079		$35,272		$151,678		$75,308

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$37,201		$36,284		$158,266		$77,357
Other comprehensive income
Reclassification of net loss on cash flow hedging activities, prior service cost and net loss on post retirement obligation	37		14		74		29
Comprehensive income	37,238		36,298		158,340		77,386
Less income allocated to non-controlling interests from continuing operations	(1,122	)	(1,012	)	(6,588	)	(2,049	)
Comprehensive income attributable to common shareholders	$36,116		$35,286		$151,752		$75,337

PER SHARE DATA
Total earnings per common share – basic	$0.40		$0.40		$1.69		$0.85
Total earnings per common share – diluted	0.40		0.40		1.68		0.85

Weighted average number of common shares outstanding:
Basic	89,153		87,845		89,071		87,748
Diluted	90,252		88,972		90,496		88,899

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 June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
FUNDS FROM OPERATIONS

Net income attributable to common shareholders	$36,079		$35,272		$151,678		$75,308
Real estate depreciation from continuing operations	62,603		56,556		122,966		112,567
Adjustments for unconsolidated joint ventures	2,237		1,326		4,482		2,640
Income allocated to non-controlling interests	1,122		1,012		6,588		2,049
Gain on sale of unconsolidated joint venture properties	—		—		—		(3,566	)
Gain on sale of operating properties, net of tax	—		—		(85,145	)	—
Funds from operations	$102,041		$94,166		$200,569		$188,998

Less: recurring capitalized expenditures^(a)	(19,233	)	(17,011	)	(30,494	)	(25,410	)

Adjusted funds from operations - diluted	$82,808		$77,155		$170,075		$163,588

PER SHARE DATA
Funds from operations - diluted	$1.12		$1.05		$2.20		$2.10
Adjusted funds from operations - diluted	0.91		0.86		1.86		1.82
Distributions declared per common share	0.70		0.66		1.40		1.32

Weighted average number of common shares outstanding:
FFO/AFFO - diluted	91,338		90,058		91,307		89,985

PROPERTY DATA
Total operating properties (end of period) ^(b)	169		170		169		170
Total operating apartment homes in operating properties (end of period) ^(b)	58,680		59,963		58,680		59,963
Total operating apartment homes (weighted average)	51,762		52,709		51,660		52,684

(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)

	Jun 30,		Mar 31,		Dec 31,		Sep 30,		Jun 30,
	2015		2015		2014		2014		2014
ASSETS
Real estate assets, at cost
Land	$1,034,649		$1,012,684		$1,003,422		$997,349		$985,444
Buildings and improvements	6,134,510		5,979,985		5,890,498		5,894,453		5,762,428
	7,169,159		6,992,669		6,893,920		6,891,802		6,747,872
Accumulated depreciation	(1,860,923	)	(1,798,955	)	(1,738,862	)	(1,813,124	)	(1,755,086	)
Net operating real estate assets	5,308,236		5,193,714		5,155,058		5,078,678		4,992,786
Properties under development, including land	488,565		519,454		527,596		576,269		599,139
Investments in joint ventures	35,731		36,526		36,429		35,180		36,167
Properties held for sale	—		—		27,143		—		—
Total real estate assets	5,832,532		5,749,694		5,746,226		5,690,127		5,628,092
Accounts receivable – affiliates	25,855		25,652		25,977		25,954		26,501
Other assets, net ^(a)	120,082		122,326		124,888		123,999		114,002
Cash and cash equivalents	16,508		174,353		153,918		66,127		16,069
Restricted cash	5,791		5,034		5,898		5,769		5,424
Total assets	$6,000,768		$6,077,059		$6,056,907		$5,911,976		$5,790,088


LIABILITIES AND EQUITY
Liabilities
Notes payable
Unsecured	$1,770,491		$1,838,203		$1,837,911		$1,837,621		$1,769,287
Secured	904,196		904,914		905,628		906,328		930,952
Accounts payable and accrued expenses	128,532		134,438		157,232		147,255		122,307
Accrued real estate taxes	43,905		23,269		39,149		54,369		40,232
Distributions payable	64,253		64,261		60,386		60,265		59,770
Other liabilities ^(b)	100,515		102,163		100,058		94,230		90,944
Total liabilities	3,011,892		3,067,248		3,100,364		3,100,068		3,013,492

Commitments and contingencies
Non-qualified deferred compensation share awards	69,791		69,902		68,134		60,363		61,727

Equity
Common shares of beneficial interest	976		976		976		974		967
Additional paid-in capital	3,657,537		3,656,105		3,667,448		3,649,750		3,595,315
Distributions in excess of net income attributable to common shareholders	(426,614	)	(403,518	)	(453,777	)	(568,142	)	(550,050	)
Treasury shares, at cost	(387,172	)	(388,181	)	(396,626	)	(397,497	)	(398,474	)
Accumulated other comprehensive loss ^(c)	(2,345	)	(2,382	)	(2,419	)	(1,474	)	(1,077	)
Total common equity	2,842,382		2,863,000		2,815,602		2,683,611		2,646,681
Non-controlling interests	76,703		76,909		72,807		67,934		68,188
Total equity	2,919,085		2,939,909		2,888,409		2,751,545		2,714,869
Total liabilities and equity	$6,000,768		$6,077,059		$6,056,907		$5,911,976		$5,790,088



(a) Includes net deferred charges of:	$11,921		$12,432		$13,219		$14,361		$12,747

(b) Includes deferred revenues of:	$843		$1,728		$1,848		$1,734		$1,070

(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 June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Net income attributable to common shareholders	$36,079		$35,272		$151,678		$75,308
Real estate depreciation and amortization	62,603		56,556		122,966		112,567
Adjustments for unconsolidated joint ventures	2,237		1,326		4,482		2,640
Income allocated to non-controlling interests	1,122		1,012		6,588		2,049
Gain on sale of unconsolidated joint venture properties	—		—		—		(3,566	)
Gain on sale of operating properties, net of tax	—		—		(85,145	)	—
Funds from operations	$102,041		$94,166		$200,569		$188,998

Less: recurring capitalized expenditures	(19,233	)	(17,011	)	(30,494	)	(25,410	)

Adjusted funds from operations	$82,808		$77,155		$170,075		$163,588

Weighted average number of common shares outstanding:
EPS diluted	90,252		88,972		90,496		88,899
FFO/AFFO diluted	91,338		90,058		91,307		89,985

Earnings per common share - diluted	$0.40		$0.40		$1.68		$0.85
FFO per common share - diluted	$1.12		$1.05		$2.20		$2.10
AFFO per common share - diluted	$0.91		$0.86		$1.86		$1.82

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:

	3Q15 Range		2015 Range
	Low	High	Low		High
Expected earnings per common share - diluted	$0.38	$0.42	$2.45		$2.55
Expected real estate depreciation and amortization	0.70	0.70	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	0.10		0.10
(Gain) on sale of unconsolidated joint venture property	—	—	—		—
Realized (gain) on sale of operating properties	—	—	(0.93	)	(0.93	)
Expected FFO per share - diluted	$1.12	$1.16	$4.47		$4.57

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 June 30,				Six months ended June 30,
	2015		2014		2015		2014
Net income attributable to common shareholders	$36,079		$35,272		$151,678		$75,308
Less: Fee and asset management	(1,618	)	(2,147	)	(3,181	)	(5,170	)
Less: Interest and other income	(141	)	(44	)	(201	)	(332	)
Less: Income/(loss) on deferred compensation plans	297		(2,018	)	(1,567	)	(2,699	)
Plus: Property management	6,082		5,853		12,044		11,692
Plus: Fee and asset management	1,121		1,247		2,197		2,506
Plus: General and administrative	11,582		10,534		21,330		20,079
Plus: Interest	24,411		22,746		49,023		45,879
Plus: Depreciation and amortization	63,728		57,953		125,258		115,349
Plus: Amortization of deferred financing costs	620		816		1,418		1,657
Plus: Expense/(benefit) on deferred compensation plans	(297	)	2,018		1,567		2,699
Less: Gain on sale of operating properties, including land	—		(1,447	)	(85,192	)	(1,801	)
Less: Impairment associated with land holdings	—		1,152		—		1,152
Less: Equity in income of joint ventures	(1,531	)	(736	)	(2,913	)	(5,026	)
Plus: Income tax expense	407		401		836		875
Plus: Income allocated to non-controlling interests from continuing operations	1,122		1,012		6,588		2,049
Net Operating Income (NOI)	$141,862		$132,612		$278,885		$264,217

"Same Property" Communities	$130,446		$123,151		$256,753		$244,899
Non-"Same Property" Communities	8,515		3,565		16,789		7,504
Development and Lease-Up Communities	2,162		31		3,338		30
Dispositions/Other	739		5,865		2,005		11,784
Net Operating Income (NOI)	$141,862		$132,612		$278,885		$264,217


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 June 30,				Six months ended June 30,
	2015		2014		2015		2014
Net income attributable to common shareholders	$36,079		$35,272		$151,678		$75,308
Plus: Interest	24,411		22,746		49,023		45,879
Plus: Amortization of deferred financing costs	620		816		1,418		1,657
Plus: Depreciation and amortization	63,728		57,953		125,258		115,349
Plus: Income allocated to non-controlling interests from continuing operations	1,122		1,012		6,588		2,049
Plus: Income tax expense	407		401		836		875
Less: Gain on sale of operating properties, including land	—		(1,447	)	(85,192	)	(1,801	)
Less: Impairment associated with land holdings	—		1,152		—		1,152
Less: Equity in income of joint ventures	(1,531	)	(736	)	(2,913	)	(5,026	)
EBITDA	$124,836		$117,169		$246,696		$235,442

Contacts

Camden Property Trust
Kim Callahan, 713-354-2549

Contacts

Contacts

Search