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

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

    Three Months Ended   Twelve Months Ended
December 31 December 31
Per Diluted Share     2015   2014   2015   2014
FFO $1.20   $0.99 $4.54   $4.18
AFFO $1.01 $0.79 $3.83 $3.52
EPS     $0.67   $1.98   $2.76   $3.27

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
        4Q15 vs. 4Q14   4Q15 vs. 3Q15   2015 vs. 2014
Revenues 5.4% 0.0% 5.2%
Expenses 4.8% (4.0)% 5.1%
Net Operating Income ("NOI")       5.7%   2.3%   5.2%
 
                 
        4Q15   4Q14   3Q15
Occupancy       95.5%   95.6%   96.0%

“We are pleased to report another solid quarter of results for our company,” said Richard J. Campo, Camden’s Chairman and CEO. “Our 2015 FFO totaled $4.54 per share, the highest level achieved in our 23 years of operations, driven by strong revenue and NOI growth at our communities. We expect 2016 to be another very good year for Camden and the multifamily industry.”

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 quarter at Camden Paces located in Atlanta, GA and Camden Southline in Charlotte, NC. Lease-up was completed at Camden Hayden in Tempe, AZ.

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

            Total       Total       CPT %       % Leased
Community Name       Location       Units       Cost       Owned       as of 1/24/2016
Camden Southline Charlotte, NC 266 $47.2 31.3 % 91%
Camden Flatirons Denver, CO 424 79.2 100 % 88%
Camden Paces Atlanta, GA 379 117.5 100 % 77%
Camden Glendale       Glendale, CA       303       113.2       100 %       69%
TOTAL               1,372       $357.1                
 

Development Communities - Construction Ongoing ($ in millions)

            Total       Total       CPT %       % Leased
Community Name       Location       Units       Budget       Owned       as of 1/24/2016
Camden Chandler Chandler, AZ 380 $73.0 100% 62%
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               2,857       $735.0                
 

Acquisition/Disposition Activity

During the quarter 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.

Quarterly Dividend Declaration

Camden’s Board of Trust Managers declared a first quarter 2016 dividend of $0.75 per common share, which is a 7.1% increase over the Company’s prior quarterly dividend of $0.70 per share. The dividend is payable on April 18, 2016 to holders of record as of March 31, 2016. In declaring the dividend, the Board of Trust Managers considered a number of factors, including the Company’s past performance and future prospects, as described in this press release.

Earnings Guidance

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

Per Diluted Share       1Q16       2016
FFO       $1.16 - $1.20       $4.75 - $4.95
EPS       $0.41 - $0.45       $1.71 - $1.91
                 
Same Property Growth       2016 Range       2016 Midpoint
Revenues 4.10% - 5.10% 4.6%
Expenses 4.30% - 5.30% 4.8%
NOI       3.50% - 5.50%       4.5%

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.

Conference Call

The Company will hold a conference call on Friday, January 29, 2016 at 11:00 a.m. Central Time to review its fourth quarter and full-year 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: 9020765, 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 172 properties containing 59,792 apartment homes across the United States. Upon completion of 8 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
December 31,

Twelve Months Ended
December 31,

2015 2014 2015 2014

OPERATING DATA

Property revenues
Rental revenues $ 197,647 $ 188,225 $ 769,108 $ 731,874
Other property revenues   32,011     28,234     123,820     112,104  
Total property revenues   229,658     216,459     892,928     843,978  
 
Property expenses
Property operating and maintenance 55,299 53,014 219,831 211,253
Real estate taxes   25,111     23,415     101,885     94,055  
Total property expenses   80,410     76,429     321,716     305,308  
 
Non-property income
Fee and asset management 1,916 2,531 6,999 9,832
Interest and other income 289 80 597 842
Income/(loss) on deferred compensation plans   1,607     2,003     (264 )   3,937  
Total non-property income   3,812     4,614     7,332     14,611  
 
Other expenses
Property management 5,833 5,581 23,761 22,689
Fee and asset management 1,318 1,595 4,742 5,341
General and administrative 13,113 20,595 46,233 51,005
Interest (a) 23,740 24,846 97,312 94,906
Depreciation and amortization 65,886 61,539 257,082 237,346
Expense/(benefit) on deferred compensation plans   1,607     2,003     (264 )   3,937  
Total other expenses   111,497     116,159     428,866     415,224  
 
Gain on sale of operating properties, including land 19,096 155,680 104,288 159,289
Impairment associated with land holdings

-

-

-

(1,152 )
Equity in income of joint ventures   1,681     1,134     6,168     7,023  
Income from continuing operations before income taxes 62,340 185,299 260,134 303,217
Income tax expense   (538 )   (675 )   (1,872 )   (1,903 )
Net income 61,802 184,624 258,262 301,314
Less income allocated to non-controlling interests from continuing operations   (1,209 )   (6,126 )   (8,947 )   (9,225 )
Net income attributable to common shareholders $ 60,593   $ 178,498   $ 249,315   $ 292,089  
 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income $61,802 $184,624 $258,262 $301,314
Other comprehensive income
Unrealized loss on cash flow hedging activities

-

-

-

(417 )
Unrealized gain (loss) and unamortized prior service cost on post retirement
obligation 357 (970 ) 357 (970 )
Reclassification of net loss on cash flow hedging activities, prior service cost and net
loss on post retirement obligation   37     25     149     74  
Comprehensive income 62,196 183,679 258,768 300,001
Less income allocated to non-controlling interests from continuing operations   (1,209 )   (6,126 )   (8,947 )   (9,225 )
Comprehensive income attributable to common shareholders $ 60,987   $ 177,553   $ 249,821   $ 290,776  
 

PER SHARE DATA

Total earnings per common share – basic $ 0.67 $ 1.99 $ 2.77 $ 3.29
Total earnings per common share – diluted 0.67 1.98 2.76 3.27
 
Weighted average number of common shares outstanding:
Basic 89,175 88,683 89,120 88,084
Diluted 90,418 90,233 89,490 88,468
 

(a) All periods presented have 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
December 31,

Twelve Months Ended
December 31,

2015 2014 2015 2014

FUNDS FROM OPERATIONS

 
Net income attributable to common shareholders $ 60,593 $ 178,498 $ 249,315 $ 292,089
Real estate depreciation and amortization 64,286 60,032 251,104 230,638
Adjustments for unconsolidated joint ventures 2,364 1,357 9,146 5,337
Income allocated to non-controlling interests 1,209 6,126 8,947 9,225
Gain on sale of unconsolidated joint venture properties

-

-

-

(3,566 )
Gain on sale of operating properties, net of tax   (18,870 )   (155,680 )   (104,015 )   (155,680 )
Funds from operations $ 109,582   $ 90,333   $ 414,497   $ 378,043  
 
Less: recurring capitalized expenditures (a) (17,429 ) (18,397 ) (64,169 ) (59,854 )
       
Adjusted funds from operations - diluted $ 92,153   $ 71,936   $ 350,328   $ 318,189  
 

PER SHARE DATA

Funds from operations - diluted $ 1.20 $ 0.99 $ 4.54 $ 4.18
Adjusted funds from operations - diluted 1.01 0.79 3.83 3.52
Distributions declared per common share 0.70 0.66 2.80 2.64
 
Weighted average number of common shares outstanding:
FFO/AFFO - diluted 91,502 91,045 91,386 90,366
 

PROPERTY DATA

Total operating properties (end of period)(b)

 172 168 172 168

Total operating apartment homes in operating properties (end of period)(b)

 59,792 58,948 59,792 58,948
Total operating apartment homes (weighted average) 52,379 52,998 52,006 52,833
 

(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)

Dec 31,
2015		 Sep 30,
2015		 Jun 30,
2015		 Mar 31,
2015		 Dec 31,
2014
ASSETS
Real estate assets, at cost
Land $ 1,048,685 $ 1,047,453 $ 1,034,649 $ 1,012,684 $ 1,003,422
Buildings and improvements   6,284,851     6,237,648     6,134,510     5,979,985     5,890,498  
7,333,536 7,285,101 7,169,159 6,992,669 6,893,920
Accumulated depreciation   (1,978,690 )   (1,914,469 )   (1,860,923 )   (1,798,955 )   (1,738,862 )
Net operating real estate assets 5,354,846 5,370,632 5,308,236 5,193,714 5,155,058
Properties under development, including land 491,120 443,469 488,565 519,454 527,596
Investments in joint ventures 33,698 34,705 35,731 36,526 36,429
Properties held for sale  

-

    13,168    

-

   

-

    27,143  
Total real estate assets 5,879,664 5,861,974 5,832,532 5,749,694 5,746,226
Accounts receivable – affiliates 25,100 25,053 25,855 25,652 25,977
Other assets, net (a)(b) 116,260 118,985 108,220 109,937 111,962
Cash and cash equivalents 10,617 10,375 16,508 174,353 153,918
Restricted cash   5,971     6,126     5,791     5,034     5,898  
Total assets $6,037,612 $6,022,513 $5,988,906 $6,064,670 $6,043,981
 
 
 
LIABILITIES AND EQUITY
Liabilities
Notes payable
Unsecured (b) $1,824,930 $1,803,360 $1,761,793 $1,829,146 $1,828,485
Secured (b) 899,757 900,472 901,032 901,582 902,128
Accounts payable and accrued expenses 133,353 131,532 128,532 134,438 157,232
Accrued real estate taxes 45,223 57,642 43,905 23,269 39,149
Distributions payable 64,275 64,276 64,253 64,261 60,386
Other liabilities (c)   97,814     96,679     100,515     102,163     100,058  
Total liabilities 3,065,352 3,053,961 3,000,030 3,054,859 3,087,438
 
Commitments and contingencies
Non-qualified deferred compensation share awards 78,593 72,316 69,791 69,902 68,134
 
Equity
Common shares of beneficial interest 976 976 976 976 976
Additional paid-in capital 3,662,696 3,660,482 3,657,537 3,656,105 3,667,448
Distributions in excess of net income attributable to common shareholders (457,638 ) (452,257 ) (426,614 ) (403,518 ) (453,777 )
Treasury shares, at cost (386,793 ) (387,114 ) (387,172 ) (388,181 ) (396,626 )
Accumulated other comprehensive loss (d)   (1,913 )   (2,307 )   (2,345 )   (2,382 )   (2,419 )
Total common equity 2,817,328 2,819,780 2,842,382 2,863,000 2,815,602
Non-controlling interests   76,339     76,456     76,703     76,909     72,807  
Total equity   2,893,667     2,896,236     2,919,085     2,939,909     2,888,409  

Total liabilities and equity

$ 6,037,612   $ 6,022,513   $ 5,988,906   $ 6,064,670   $ 6,043,981  
 
 
 
(a) Includes net deferred charges of: $ 2,851 $ 3,077 $ 59 $ 43 $ 293
 
(b) All periods presented have been changed to reflect the adoption of ASU 2015-03 (as supplemented by ASU 2015-15) at December 31, 2015, which required

retrospective application.

 
(c) Includes deferred revenues of: $ 1,768 $ 1,918 $ 843 $ 1,728 $ 1,848
 
(d) Represents the unrealized net loss and unamortized prior service costs on post retirement obligation, and unrealized loss on cash flow hedging activities.
 

CAMDEN

2016 FINANCIAL OUTLOOK

AS OF JANUARY 28, 2016

     

(Unaudited)

  
 
Earnings Guidance - Per Diluted Share
Expected FFO per share - diluted $4.75 - $4.95
 
"Same Property" Communities
Number of Units 47,894
2015 Base Net Operating Income $523 million
Total Revenue Growth 4.10% - 5.10%
Total Expense Growth 4.30% - 5.30%
Net Operating Income Growth 3.50% - 5.50%
Impact from 1% change in NOI Growth is approximately $0.057 / share
 
Physical Occupancy 95.4%
 
Capitalized Expenditures
Recurring $62 - $66 million
Revenue Enhancing Repositions (a) $19 - $23 million
 
Acquisitions/Dispositions
Disposition Volume (consolidated on balance sheet) $150 - $350 million
Acquisition Volume (consolidated on balance sheet) $0 million
 
Development
Development Starts (consolidated on balance sheet) $0 - $200 million
Development Spend (consolidated on balance sheet) $200 - $300 million
 
Equity in Income of Joint Ventures (FFO) $15 - $17 million
 
Non-Property Income
Non-Property Income, Net $2 - $4 million
Includes: Fee and asset management income (including fees from joint ventures), net of expenses,
and interest and other income
 
Corporate Expenses
General and administrative expense $45 - $49 million
Property management expense $24 - $26 million
 
Capital
Expected Capital Transactions $250 million
Expensed Interest $100 - $104 million
Capitalized Interest $17 - $19 million

(a) Revenue Enhancing Repositions are capital expenditures that improve a community's competitive position, typically kitchen and bath upgrades or other new amenities.

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 (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
December 31,

Twelve Months Ended
December 31,

2015   2014 2015   2014
Net income attributable to common shareholders $ 60,593   $ 178,498 $ 249,315   $ 292,089
Real estate depreciation and amortization 64,286 60,032 251,104 230,638
Adjustments for unconsolidated joint ventures 2,364 1,357 9,146 5,337
Income allocated to non-controlling interests 1,209 6,126 8,947 9,225
Gain on sale of unconsolidated joint venture properties

-

-

-

(3,566 )
Gain on sale of operating properties, net of tax   (18,870 )     (155,680 )   (104,015 )     (155,680 )
Funds from operations $ 109,582     $ 90,333   $ 414,497     $ 378,043  
 
Less: recurring capitalized expenditures (17,429 ) (18,397 ) (64,169 ) (59,854 )
           
Adjusted funds from operations $ 92,153     $ 71,936   $ 350,328     $ 318,189  
 
Weighted average number of common shares outstanding:
EPS diluted 90,418 90,233 89,490 88,468
FFO/AFFO diluted 91,502 91,045 91,386 90,366
 
Earnings per common share - diluted $ 0.67 $ 1.98 $ 2.76 $ 3.27
FFO per common share - diluted $ 1.20 $ 0.99 $ 4.54 $ 4.18
AFFO per common share - diluted $ 1.01 $ 0.79 $ 3.83 $ 3.52
 

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:

 
1Q16 Range 2016 Range
Low   High Low   High
Expected earnings per common share - diluted $ 0.41 $ 0.45 $ 1.71 $ 1.91
Expected real estate depreciation and amortization 0.72 0.72 2.90 2.90
Expected adjustments for unconsolidated joint ventures 0.02 0.02 0.09 0.09
Expected income allocated to non-controlling interests   0.01       0.01     0.05       0.05  
Expected FFO per share - diluted $ 1.16 $ 1.20 $ 4.75 $ 4.95
 
 

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
December 31,

Twelve months ended
December 31,

2015   2014 2015   2014
Net income attributable to common shareholders $ 60,593 $ 178,498 $ 249,315 $ 292,089
Less: Fee and asset management (1,916 ) (2,531 ) (6,999 ) (9,832 )
Less: Interest and other income (289 ) (80 ) (597 ) (842 )
Less: Income/(loss) on deferred compensation plans (1,607 ) (2,003 ) 264 (3,937 )
Plus: Property management 5,833 5,581 23,761 22,689
Plus: Fee and asset management 1,318 1,595 4,742 5,341
Plus: General and administrative 13,113 20,595 46,233 51,005
Plus: Interest 23,740 24,846 97,312 94,906
Plus: Depreciation and amortization 65,886 61,539 257,082 237,346
Plus: Expense/(benefit) on deferred compensation plans 1,607 2,003 (264 ) 3,937
Less: Gain on sale of operating properties, including land (19,096 ) (155,680 ) (104,288 ) (159,289 )
Less: Impairment associated with land holdings

-

-

-

1,152
Less: Equity in income of joint ventures (1,681 ) (1,134 ) (6,168 ) (7,023 )
Plus: Income tax expense 538 675 1,872 1,903
Plus: Income allocated to non-controlling interests from continuing operations   1,209       6,126     8,947       9,225  
Net Operating Income (NOI) $ 149,248 $ 140,030 $ 571,212 $ 538,670
 
"Same Property" Communities $ 133,716 $ 126,462 $ 520,132 $ 494,325
Non-"Same Property" Communities 11,364 7,855 37,375 19,280
Development and Lease-Up Communities 3,438 697 8,479 994
Dispositions/Other   730       5,016     5,226       24,071  
Net Operating Income (NOI) $ 149,248 $ 140,030 $ 571,212 $ 538,670
 

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
December 31,

Twelve months ended
December 31,

2015   2014 2015   2014
Net income attributable to common shareholders $ 60,593 $ 178,498 $ 249,315 $ 292,089
Plus: Interest 23,740 24,846 97,312 94,906
Plus: Depreciation and amortization 65,886 61,539 257,082 237,346
Plus: Income allocated to non-controlling interests from continuing operations 1,209 6,126 8,947 9,225
Plus: Income tax expense 538 675 1,872 1,903
Less: Gain on sale of operating properties, including land (19,096 ) (155,680 ) (104,288 ) (159,289 )
Less: Impairment associated with land holdings

-

-

-

1,152
Less: Equity in income of joint ventures   (1,681 )     (1,134 )   (6,168 )     (7,023 )
EBITDA $ 131,189 $ 114,870 $ 504,072 $ 470,309