Camden Property Trust (NYSE:CPT) today announced operating results for the three months ended March 31, 2015.

Funds from Operations (“FFO”), Adjusted Funds from Operations (“AFFO”), and Net Income Attributable to Common Shareholders (“EPS”) for the three months ended March 31, 2015 are detailed below.

   
Three Months Ended
March 31
Per Diluted Share     2015     2014
FFO $ 1.08     $ 1.05
AFFO $ 0.96 $ 0.96
EPS     $ 1.27     $ 0.45
 
  • EPS for the three months ended March 31, 2015 included an $0.89 per share net gain on sale of operating properties and land.
  • EPS for the three months ended March 31, 2014 included a $0.04 per share gain on sale of unconsolidated joint venture properties and undeveloped land.

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

Same Property Results

    Quarterly Growth     Sequential Growth
      1Q15 vs. 1Q14     1Q15 vs. 4Q14
Revenues 4.6 % 1.1 %
Expenses 6.2 % 4.0 %
Net Operating Income ("NOI")     3.7 %     (0.5 )%
 
           
      1Q15     1Q14     4Q14
Occupancy     95.5 %     95.5 %     95.6 %
 

“We are pleased to report another strong quarter of earnings,” said Richard J. Campo, Camden’s Chairman and CEO. “Our first quarter results were at the top end of our guidance range due to stronger than expected revenue growth, partially offset by higher than anticipated property tax assessments in our Houston and Austin markets.”

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 first quarter at Camden La Frontera and Camden Lamar Heights, both located in Austin, TX, and construction commenced at Camden NoMa II in Washington, DC.

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

        Total     Total     CPT %     % Leased
Community Name     Location     Units     Cost     Owned     as of 4/26/15
Camden La Frontera Round Rock, TX 300 $35.6 100 % 96 %
Camden Boca Raton Boca Raton, FL 261 51.5 100 % 95 %
Camden Lamar Heights Austin, TX 314 46.5 100 % 87 %
Camden Foothills     Scottsdale, AZ     220       44.4     100 %     71 %

TOTAL

          1,095       $178.0            
 

Development Communities - Construction Ongoing ($ in millions)

        Total     Total     CPT %     % Leased
Community Name     Location     Units     Budget     Owned     as of 4/26/15
Camden Flatirons Denver, CO 424 $78 100 % 55 %
Camden Paces Atlanta, GA 379 110 100 % 43 %
Camden Hayden Tempe, AZ 234 48 100 % 33 %
Camden Southline Charlotte, NC 266 48 31.3 % 22 %
Camden Chandler Chandler, AZ 380 75 100 % 15 %
Camden Glendale Glendale, CA 303 115 100 % 5 %
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 %      
TOTAL           4,006       $1,020            
 

Acquisition/Disposition Activity

Camden disposed of two communities during the quarter for a total of $114.4 million: Camden Ridgecrest, a 284-home property in Austin, TX, and Camden Bayside, an 832-home property in Tampa, FL. The communities sold had an average age of 24 years and average monthly rent of $856 per unit.

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 second quarter 2015 as detailed below.

       
Per Diluted Share     2Q15     2015
FFO $1.08 - $1.12 $4.40 - $4.56
EPS     $0.36 - $0.40     $2.39 - $2.55
Same Property Growth     2015 Range     2015 Midpoint
Revenue     4.00% - 5.00%     4.50%
Expenses 4.75% - 5.25%

5.00%

NOI     3.50% - 5.00%     4.25%
 

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, May 1, 2015 at 11:00 a.m. Central Time to review its first 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: 1020491, 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 168 properties containing 58,446 apartment homes across the United States. Upon completion of 12 properties under development, the Company’s portfolio will increase to 62,452 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 March 31,
2015   2014

OPERATING DATA

  
Property revenues
Rental revenues $ 186,857 $ 178,964
Other property revenues   28,577       26,965  
Total property revenues   215,434       205,929  
 
Property expenses
Property operating and maintenance 52,998 50,747
Real estate taxes   25,413       23,577  
Total property expenses   78,411       74,324  
 
Non-property income
Fee and asset management 1,563 3,023
Interest and other income 60 288
Income on deferred compensation plans   1,864       681  
Total non-property income   3,487       3,992  
 
Other expenses
Property management 5,962 5,839
Fee and asset management 1,076 1,259
General and administrative 9,748 9,545
Interest 24,612 23,133
Depreciation and amortization 61,530 57,396
Amortization of deferred financing costs 798 841
Expense on deferred compensation plans   1,864       681  
Total other expenses   105,590       98,694  
 
Gain on sale of operating properties, including land 85,192 354
Equity in income of joint ventures   1,382       4,290  
Income from continuing operations before income taxes 121,494 41,547
Income tax expense   (429 )     (474 )
Net income 121,065 41,073
Less income allocated to non-controlling interests from continuing operations   (5,466 )     (1,037 )
Net income attributable to common shareholders $ 115,599     $ 40,036  
 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income $121,065 $41,073
Other comprehensive income
Reclassification of net loss on cash flow hedging activities, prior service cost and net loss on post retirement obligation   37       15  
Comprehensive income 121,102 41,088
Less income allocated to non-controlling interests from continuing operations   (5,466 )     (1,037 )
Comprehensive income attributable to common shareholders $ 115,636     $ 40,051  
 

PER SHARE DATA

Total earnings per common share – basic $ 1.29 $ 0.45
Total earnings per common share – diluted 1.27 0.45
 
Weighted average number of common shares outstanding:
Basic 88,987 87,651
Diluted 90,464 88,824
 
 

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 March 31,
2015   2014

FUNDS FROM OPERATIONS

  
 
Net income attributable to common shareholders $ 115,599 $ 40,036
Real estate depreciation from continuing operations 60,363 56,011
Adjustments for unconsolidated joint ventures 2,245 1,314
Income allocated to non-controlling interests 5,466 1,037
Gain on sale of unconsolidated joint venture properties

-

(3,566 )
Gain on sale of operating properties, net of tax   (85,145 )    

-

 
Funds from operations $ 98,528     $ 94,832  
 
Less: recurring capitalized expenditures (a) (11,261 ) (8,399 )
     
Adjusted funds from operations - diluted $ 87,267     $ 86,433  
 

PER SHARE DATA

Funds from operations - diluted $ 1.08 $ 1.05
Adjusted funds from operations - diluted 0.96 0.96
Distributions declared per common share 0.70 0.66
 
Weighted average number of common shares outstanding:
FFO/AFFO - diluted 91,275 89,910
 

PROPERTY DATA

Total operating properties (end of period) (b) 168 169
Total operating apartment homes in operating properties (end of period) (b) 58,446 59,641
Total operating apartment homes (weighted average) 51,558 52,659
Total operating apartment homes - excluding operating property sales (weighted average) 51,558 52,659
 

(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)

        
 

Mar 31,
2015

  

Dec 31,
2014

  

Sep 30,
2014

  

Jun 30,
2014

  

Mar 31,
2014

ASSETS
Real estate assets, at cost
Land $ 1,012,684 $ 1,003,422 $ 997,349 $ 985,444 $ 978,770
Buildings and improvements   5,979,985       5,890,498       5,894,453       5,762,428       5,691,619  
6,992,669 6,893,920 6,891,802 6,747,872 6,670,389
Accumulated depreciation   (1,798,955 )     (1,738,862 )     (1,813,124 )     (1,755,086 )     (1,698,724 )
Net operating real estate assets 5,193,714 5,155,058 5,078,678 4,992,786 4,971,665
Properties under development, including land 519,454 527,596 576,269 599,139 515,141
Investments in joint ventures 36,526 36,429 35,180 36,167 36,719
Properties held for sale  

-

      27,143      

-

     

-

     

-

 
Total real estate assets 5,749,694 5,746,226 5,690,127 5,628,092 5,523,525
Accounts receivable – affiliates 25,652 25,977 25,954 26,501 26,145
Other assets, net (a) 122,326 124,888 123,999 114,002 107,862
Cash and cash equivalents 174,353 153,918 66,127 16,069 16,768
Restricted cash   5,034       5,898       5,769       5,424       5,549  
Total assets $6,077,059     $6,056,907     $5,911,976     $5,790,088     $5,679,849  
 
 
 
LIABILITIES AND EQUITY
Liabilities
Notes payable
Unsecured $1,838,203 $1,837,911 $1,837,621 $1,769,287 $1,649,041
Secured 904,914 905,628 906,328 930,952 940,881
Accounts payable and accrued expenses 134,438 157,232 147,255 122,307 124,981
Accrued real estate taxes 23,269 39,149 54,369 40,232 21,922
Distributions payable 64,261 60,386 60,265 59,770 59,728
Other liabilities (b)   102,163       100,058       94,230       90,944       88,693  
Total liabilities 3,067,248 3,100,364 3,100,068 3,013,492 2,885,246
 
Commitments and contingencies
Non-qualified deferred compensation share awards 69,902 68,134 60,363 61,727 55,498
 
Equity
Common shares of beneficial interest 976 976 974 967 966
Additional paid-in capital 3,656,105 3,667,448 3,649,750 3,595,315 3,593,633
Distributions in excess of net income attributable to common shareholders (403,518 ) (453,777 ) (568,142 ) (550,050 ) (523,321 )
Treasury shares, at cost (388,181 ) (396,626 ) (397,497 ) (398,474 ) (399,510 )
Accumulated other comprehensive loss (c)   (2,382 )     (2,419 )     (1,474 )     (1,077 )     (1,091 )
Total common equity 2,863,000 2,815,602 2,683,611 2,646,681 2,670,677
Non-controlling interests   76,909       72,807       67,934       68,188       68,428  
Total equity   2,939,909       2,888,409       2,751,545       2,714,869       2,739,105  
Total liabilities and equity $ 6,077,059     $ 6,056,907     $ 5,911,976     $ 5,790,088     $ 5,679,849  
 
 
 
(a) Includes net deferred charges of: $ 12,432 $ 13,219 $ 14,361 $ 12,747 $ 13,615
 
(b) Includes deferred revenues of: $ 1,728 $ 1,848 $ 1,734 $ 1,070 $ 1,786
 
(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 March 31,
2015   2014
Net income attributable to common shareholders $ 115,599   $ 40,036
Real estate depreciation from continuing operations 60,363 56,011
Adjustments for unconsolidated joint ventures 2,245 1,314
Income allocated to non-controlling interests 5,466 1,037
Gain on sale of unconsolidated joint venture properties

-

(3,566 )
Gain on sale of operating properties, net of tax   (85,145 )    

-

 
Funds from operations $ 98,528     $ 94,832  
 
Less: recurring capitalized expenditures (11,261 ) (8,399 )
     
Adjusted funds from operations $ 87,267     $ 86,433  
 
Weighted average number of common shares outstanding:
EPS diluted 90,464 88,824
FFO/AFFO diluted 91,275 89,910
 
Earnings per common share – diluted $ 1.27 $ 0.45
FFO per common share - diluted $ 1.08 $ 1.05
AFFO per common share - diluted $ 0.96 $ 0.96
   
 

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:

 
 

2Q15 Range

2015 Range
Low   High Low   High
Expected earnings per common share - diluted $ 0.36 $ 0.40 $ 2.39 $ 2.55
Expected real estate depreciation 0.68 0.68 2.74 2.74
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 $ 1.08 $ 1.12 $ 4.40 $ 4.56
 
 

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 March 31,
2015   2014
Net income attributable to common shareholders $ 115,599   $ 40,036
Less: Fee and asset management (1,563 ) (3,023 )
Less: Interest and other income (60 ) (288 )
Less: Income on deferred compensation plans (1,864 ) (681 )
Plus: Property management 5,962 5,839
Plus: Fee and asset management 1,076 1,259
Plus: General and administrative 9,748 9,545
Plus: Interest 24,612 23,133
Plus: Depreciation and amortization 61,530 57,396
Plus: Amortization of deferred financing costs 798 841
Plus: Expense on deferred compensation plans 1,864 681
Less: Gain on sale of operating properties, including land (85,192 ) (354 )
Less: Equity in income of joint ventures (1,382 ) (4,290 )
Plus: Income tax expense 429 474

Plus: Income allocated to non-controlling interests from continuing operations

  5,466       1,037  
Net Operating Income (NOI) $ 137,023 $ 131,605
 
"Same Property" Communities $ 126,307 $ 121,748
Non-"Same Property" Communities 7,137 3,938
Development and Lease-Up Communities 2,313 (14 )
Dispositions/Other   1,266       5,933  
Net Operating Income (NOI) $ 137,023 $ 131,605
 

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 March 31,
2015   2014
Net income attributable to common shareholders $ 115,599 $ 40,036
Plus: Interest 24,612 23,133
Plus: Amortization of deferred financing costs 798 841
Plus: Depreciation and amortization 61,530 57,396
Plus: Income allocated to non-controlling interests from continuing operations 5,466 1,037
Plus: Income tax expense 429 474
Less: Gain on sale of operating properties, including land (85,192 ) (354 )
Less: Equity in income of joint ventures   (1,382 )     (4,290 )
EBITDA $ 121,860 $ 118,273