Camden Property Trust : Announces First Quarter 2012 Operating Results FFO Per Diluted Share Increases 15%
04/26/2012| 04:25pm US/Eastern
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Camden Property Trust (NYSE: CPT) today announced operating results for
the three months ended March 31, 2012.
Funds from Operations ("FFO")
FFO for the first quarter of 2012 totaled $0.83 per diluted share or
$68.6 million, as compared to $0.72 per diluted share or $54.1 million
for the same period in 2011, an increase of 15% per diluted share.
FFO for the three months ended March 31, 2012 included a $2.1 million or
$0.03 per diluted share charge related to the redemption of perpetual
preferred operating partnership units. FFO for the three months ended
March 31, 2011 included a net gain of $3.3 million or $0.04 per diluted
share impact related to other income of $4.3 million from the sale of an
available-for-sale investment, partially offset by $1.0 million of
income taxes associated with that gain, and a $2.1 million or $0.03 per
diluted share impact for General & Administrative ("G&A") costs related
to a one-time bonus awarded to all non-executive employees.
Net Income Attributable to Common Shareholders
("EPS")
The Company reported EPS of $88.8 million or $1.07 per diluted share for
the first quarter of 2012, as compared to $7.3 million or $0.10 per
diluted share for the same period in 2011. EPS for the three months
ended March 31, 2012 included: a $40.2 million or $0.49 per diluted
share impact related to the gain on acquisition of the controlling
interest in twelve joint ventures; a $32.5 million or $0.39 per diluted
share impact related to the gain on sale of discontinued operations;
and, a $2.1 million or $0.03 per diluted share charge related to the
redemption of perpetual preferred operating partnership units. EPS for
the three months ended March 31, 2011 included a net $3.3 million or
$0.05 per diluted share impact related to gain on sale of an
available-for-sale investment; a $2.1 million or $0.03 per diluted share
impact for G&A costs related to a one-time bonus awarded to all
non-executive employees; and, a $1.1 million or $0.02 per diluted share
impact from gain on the sale of three joint venture interests.
A reconciliation of net income attributable to common shareholders to
FFO is included in the financial tables accompanying this press release.
Same Property Results
For the 47,724 apartment homes included in consolidated same property
results, first quarter 2012 same property net operating income ("NOI")
increased 9.6% compared to the first quarter of 2011, with revenues
increasing 6.8% and expenses increasing 2.4%. On a sequential basis,
first quarter 2012 same property NOI increased 0.8% compared to the
fourth quarter of 2011, with revenues increasing 1.5% and expenses
increasing 2.8% compared to the prior quarter. Same property physical
occupancy levels for the portfolio averaged 94.9% during the first
quarter of 2012, compared to 94.5% in the fourth quarter of 2011 and
94.0% in the first quarter of 2011.
The Company defines same property communities as communities owned and
stabilized as of January 1, 2011, excluding properties held for sale and
communities under major redevelopment. A reconciliation of net income
attributable to common shareholders to net operating income and same
property net operating income is included in the financial tables
accompanying this press release.
Acquisition Activity
On January 25, 2012, Camden purchased the remaining 80% ownership
interest in twelve unconsolidated joint ventures for approximately $99.5
million, and assumed approximately $272.6 million in mortgage debt which
was subsequently retired. The Company now owns 100% of the interests in
4,034 apartment homes located in Dallas, Houston, Las Vegas, Phoenix,
and Southern California, and consolidated those entities for financial
reporting purposes as of the acquisition date. The Company also acquired
one multifamily community with 350 apartment homes located in Raleigh,
NC for approximately $44.2 million through one of its Funds.
Disposition Activity
The Company disposed of three operating properties during the first
quarter for a total of $55.6 million, resulting in a gain on sale of
$32.5 million: Camden Vista Valley, a 357-home community located in
Mesa, AZ; Camden Landings, a 220-home apartment community located in
Orlando, FL; and Camden Creek, a 456-home apartment community located in
Houston, TX.
Development Activity
Construction was completed during the quarter at three wholly-owned
communities: Camden LaVina, a $55 million project with 420 apartment
homes in Orlando, FL, which is currently 67% leased; Camden Summerfield
II, a $25 million project with 187 apartment homes in Landover, MD,
which is currently 72% leased; and Camden Royal Oaks II, a $12 million
project with 104 apartment homes in Houston, TX, which began leasing
during the quarter and is currently 21% leased. Lease-up activity began
during the first quarter at two communities which are currently under
construction: Camden Montague, a $23 million project with 192 apartment
homes in Tampa, FL which is currently 53% leased; and Camden Westchase
Park, a $52 million project with 348 apartment homes in Tampa, FL which
is currently 16% leased.
Construction continued during the quarter on three wholly-owned
development communities: Camden Town Square in Orlando, FL, a $66
million project with 438 apartment homes; Camden City Centre II in
Houston, TX, a $36 million project with 268 apartment homes, and Camden
NOMA in Washington DC, a $110 million project with 320 apartment homes.
Construction also continued during the quarter on two joint venture
communities: Camden Amber Oaks II in Austin, TX, a $25 million project
with 244 apartment homes, which is currently 8% leased, and Camden South
Capitol in Washington, DC, an $88 million project with 276 apartment
homes.
Equity Issuances/Redemption
During the first quarter, Camden completed a public offering of
6,612,500 common shares for net proceeds of approximately $391.6
million. The Company also issued 704,245 common shares through its ATM
program at an average price of $63.89 per share, for total net
consideration of approximately $44.3 million.
The Company also redeemed its 7.0% Series B Cumulative Redeemable
Perpetual Preferred Units from existing holders for an aggregate of $100
million (plus an amount equal to accrued but unpaid distributions as of
the redemption date), resulting in a charge to earnings of $2.1 million.
Subsequent to quarter-end, Camden issued 430,078 common shares through
its ATM program at an average price of $65.23 per share, for total net
consideration of approximately $27.6 million.
Earnings Guidance
Camden updated its earnings guidance for 2012 based on its current and
expected views of the apartment market and general economic conditions.
Full-year 2012 FFO is expected to be $3.35 to $3.55 per diluted share,
and full-year 2012 EPS is expected to be $1.85 to $2.05 per diluted
share. Second quarter 2012 earnings guidance is $0.85 to $0.89 per
diluted share for FFO and $0.26 to $0.30 per diluted share for EPS.
Guidance for EPS excludes potential future gains on real estate
transactions. Camden intends to update its earnings guidance to the
market on a quarterly basis.
The Company's 2012 earnings guidance is based on projections of
same-property revenue growth between 4.75% and 6.25%, expense growth
between 2.5% and 3.5%, and NOI growth between 6.0% and 8.0%. Additional
information on the Company's 2012 financial outlook and a reconciliation
of expected net income attributable to common shareholders to expected
FFO are included in the financial tables accompanying this press release.
Conference Call
The Company will hold a conference call on Friday, April 27, 2012 at
11:00 a.m. Central Time to review its first quarter 2012 results and
discuss its outlook for future performance. To participate in the call,
please dial (866) 843-0890 (Domestic) or (412) 317-9250 (International)
by 10:50 a.m. Central Time and enter passcode: 5402762, 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.
About Camden
Camden Property Trust, an S&P 400 Company, is a real estate company
engaged in the ownership, development, acquisition, management and
disposition of multifamily apartment communities. Camden owns interests
in and operates 197 properties containing 67,025 apartment homes across
the United States. Upon completion of 7 properties under development,
the Company's portfolio will increase to 69,111 apartment homes in 204
properties. Camden was recently named by FORTUNE® Magazine for the fifth
consecutive year as one of the "100 Best Companies to Work For" in
America, placing 7th on the list.
For additional information, please contact Camden's Investor Relations
Department at (800) 922-6336 or (713) 354-2787 or access our website at www.camdenliving.com.
CAMDEN
OPERATING RESULTS
(In thousands, except per share and property data amounts)
(Unaudited)
Three Months Ended
March 31,
OPERATING DATA
2012
2011
Property revenues
Rental revenues
$
153,719
$
135,835
Other property revenues
24,932
21,767
Total property revenues
178,651
157,602
Property expenses
Property operating and maintenance
49,219
44,806
Real estate taxes
18,371
17,344
Total property expenses
67,590
62,150
Non-property income
Fee and asset management
2,923
1,838
Interest and other income (loss)
(688
)
4,771
Income on deferred compensation plans
7,786
5,954
Total non-property income
10,021
12,563
Other expenses
Property management
5,284
5,319
Fee and asset management
1,743
1,220
General and administrative
8,679
9,788
Interest
26,683
29,737
Depreciation and amortization
50,118
45,851
Amortization of deferred financing costs
912
1,527
Expense on deferred compensation plans
7,786
5,954
Total other expenses
101,205
99,396
Gain on sale of unconsolidated joint venture interests
-
1,136
Gain on acquisition of controlling interests in joint ventures
40,191
-
Equity in income of joint ventures
366
374
Income from continuing operations before income taxes
60,434
10,129
Income tax expense - current
(224
)
(1,320
)
Income from continuing operations
60,210
8,809
Income from discontinued operations
353
792
Gain on sale of discontinued operations, net of tax
32,541
-
Net income
93,104
9,601
Less income allocated to noncontrolling interests from continuing
operations
(825
)
(556
)
Less income, including gain on sale, allocated to noncontrolling
interests from discontinued operations
(670
)
(9
)
Less income allocated to perpetual preferred units
(776
)
(1,750
)
Less write off of original issuance costs of redeemed perpetual
preferred units
(2,075
)
-
Net income attributable to common shareholders
$
88,758
$
7,286
CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
Net income
$
93,104
$
9,601
Other comprehensive income
Unrealized loss on cash flow hedging activities
-
(503
)
Reclassification of net losses on cash flow hedging activities
-
5,766
Reclassification of gain on available-for-sale investment to
earnings, net of tax
-
(3,309
)
Reclassification of prior service cost on post retirement obligations
8
-
Comprehensive income
93,112
11,555
Less income allocated to noncontrolling interests from continuing
operations
(825
)
(556
)
Less income, including gain on sale, allocated to noncontrolling
interests from discontinued operations
(670
)
(9
)
Less income allocated to perpetual preferred units
(776
)
(1,750
)
Less write off of original issuance costs of redeemed perpetual
preferred units
(2,075
)
-
Comprehensive income attributable to common shareholders
$
88,766
$
9,240
PER SHARE DATA
Net income attributable to common shareholders - basic
$
1.10
$
0.10
Net income attributable to common shareholders - diluted
1.07
0.10
Income from continuing operations attributable to common
shareholders - basic
0.70
0.09
Income from continuing operations attributable to common
shareholders - diluted
0.68
0.09
Weighted average number of common and
common equivalent shares outstanding:
Basic
79,885
71,906
Diluted
82,855
72,783
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,
FUNDS FROM OPERATIONS
2012
2011
Net income attributable to common shareholders
$
88,758
$
7,286
Real estate depreciation from continuing operations
49,009
44,603
Real estate depreciation and amortization from discontinued
operations
186
971
Adjustments for unconsolidated joint ventures
2,275
2,006
(Gain) on sale of unconsolidated joint venture interests
-
(1,136
)
Income allocated to noncontrolling interests
1,093
383
(Gain) on acquisition of controlling interests in joint ventures
(40,191
)
-
(Gain) on sale of discontinued operations, net of tax
(32,541
)
-
Funds from operations - diluted
$
68,589
$
54,113
PER SHARE DATA
Funds from operations - diluted
$
0.83
$
0.72
Cash distributions
0.56
0.49
Weighted average number of common and
common equivalent shares outstanding:
FFO - diluted
82,855
75,021
PROPERTY DATA
Total operating properties (end of period) (a)
197
187
Total operating apartment homes in operating properties (end of
period) (a)
67,025
63,798
Total operating apartment homes (weighted average)
52,957
50,881
Total operating apartment homes - excluding discontinued operations
(weighted average)
52,376
49,060
(a) Includes joint ventures.
CAMDEN
BALANCE SHEETS
(In thousands)
(Unaudited)
Mar 31,
Dec 31,
Sep 30,
Jun 30,
Mar 31,
2012
2011
2011
2011
2011
ASSETS
Real estate assets, at cost
Land
$
868,964
$
768,016
$
766,302
$
760,397
$
760,397
Buildings and improvements
5,068,560
4,751,654
4,758,397
4,711,552
4,690,741
5,937,524
5,519,670
5,524,699
5,471,949
5,451,138
Accumulated depreciation
(1,458,451
)
(1,432,799
)
(1,421,867
)
(1,378,630
)
(1,335,831
)
Net operating real estate assets
4,479,073
4,086,871
4,102,832
4,093,319
4,115,307
Properties under development, including land
301,282
299,870
274,201
237,549
220,641
Investments in joint ventures
49,436
44,844
37,033
39,398
21,196
Properties held for sale
-
11,131
-
-
-
Total real estate assets
4,829,791
4,442,716
4,414,066
4,370,266
4,357,144
Accounts receivable - affiliates
29,742
31,035
31,395
30,401
29,973
Other assets, net (a)
89,706
88,089
87,657
90,346
92,051
Cash and cash equivalents
49,702
55,159
56,099
63,148
98,771
Restricted cash
5,074
5,076
5,357
4,898
5,354
Total assets
$
5,004,015
$
4,622,075
$
4,594,574
$
4,559,059
$
4,583,293
LIABILITIES AND EQUITY
Liabilities
Notes payable
Unsecured
$
1,380,952
$
1,380,755
$
1,380,560
$
1,380,368
$
1,419,681
Secured
1,050,154
1,051,357
1,052,544
1,053,699
1,054,839
Accounts payable and accrued expenses
105,370
93,747
97,613
78,460
81,972
Accrued real estate taxes
17,991
21,883
37,721
27,424
16,585
Distributions payable
47,594
39,364
39,319
38,966
38,662
Other liabilities (b)
90,423
109,276
111,043
123,829
134,608
Total liabilities
2,692,484
2,696,382
2,718,800
2,702,746
2,746,347
Commitments and contingencies
Perpetual preferred units
-
97,925
97,925
97,925
97,925
Equity
Common shares of beneficial interest
919
845
839
834
827
Additional paid-in capital
3,327,961
2,901,024
2,861,139
2,823,690
2,783,621
Distributions in excess of net income attributable to common
shareholders
(648,074
)
(690,466
)
(700,897
)
(676,367
)
(623,740
)
Treasury shares, at cost
(437,215
)
(452,003
)
(452,244
)
(459,134
)
(460,467
)
Accumulated other comprehensive income (loss) (c)
(675
)
(683
)
201
93
(31,504
)
Total common equity
2,242,916
1,758,717
1,709,038
1,689,116
1,668,737
Noncontrolling interests
68,615
69,051
68,811
69,272
70,284
Total equity
2,311,531
1,827,768
1,777,849
1,758,388
1,739,021
Total liabilities and equity
$
5,004,015
$
4,622,075
$
4,594,574
$
4,559,059
$
4,583,293
(a) Includes:
net deferred charges of:
$
15,267
$
16,102
$
16,868
$
14,484
$
12,677
(b) Includes:
deferred revenues of:
$
2,337
$
2,140
$
2,213
$
2,181
$
2,254
distributions in excess of investments in joint ventures of:
$
16,298
$
30,596
$
31,799
$
31,040
$
33,442
fair value adjustment of derivative instruments:
$
11,574
$
16,486
$
22,192
$
27,977
$
31,655
(c) Represents the fair value adjustment of derivative
instruments and amortization of prior service costs on post
retirement obligations.
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 attributable to
common shares computed in accordance with generally accepted
accounting principles ("GAAP"), excluding gains or losses from
depreciable operating property sales, plus real estate
depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Camden's
definition of diluted FFO also assumes conversion of all dilutive
convertible securities, including minority interests, which are
convertible into common equity. The Company considers FFO to be an
appropriate supplemental measure of operating performance because,
by excluding gains or losses on dispositions of operating
properties and excluding depreciation, FFO can help one compare
the operating performance of a company's real estate between
periods or as compared to different companies. A reconciliation of
net income attributable to common shareholders to FFO is provided
below:
Three Months Ended
March 31,
2012
2011
Net income attributable to common shareholders
$
88,758
$
7,286
Real estate depreciation from continuing operations
49,009
44,603
Real estate depreciation and amortization from discontinued
operations
186
971
Adjustments for unconsolidated joint ventures
2,275
2,006
(Gain) on sale of unconsolidated joint venture interests
-
(1,136
)
Income allocated to noncontrolling interests
1,093
383
(Gain) on acquisition of controlling interests in joint ventures
(40,191
)
-
(Gain) on sale of discontinued operations, net of tax
(32,541
)
-
Funds from operations - diluted
$
68,589
$
54,113
Weighted average number of common and
common equivalent shares outstanding:
EPS diluted
82,855
72,783
FFO diluted
82,855
75,021
Net income attributable to common shareholders - diluted
$
1.07
$
0.10
FFO per common share - diluted
$
0.83
$
0.72
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 net
income attributable to common shareholders (EPS). A reconciliation
of the ranges provided for expected net income attributable to
common shareholders per diluted share to expected FFO per diluted
share is provided below:
2Q12 Range
2012 Range
Low
High
Low
High
Expected net income attributable to common shareholders per share -
diluted
$
0.26
$
0.30
$
1.85
$
2.05
Expected real estate depreciation from continuing operations
0.55
0.55
2.24
2.24
Expected real estate depreciation and amortization from discontinued
operations
0.00
0.00
0.00
0.00
Expected adjustments for unconsolidated joint ventures
0.03
0.03
0.10
0.10
Expected income allocated to noncontrolling interests
0.01
0.01
0.04
0.04
Realized (gain) on acquisition of controlling interests in joint
ventures
0.00
0.00
(0.49
)
(0.49
)
Realized (gain) on sale of discontinued operations, net of tax
0.00
0.00
(0.39
)
(0.39
)
Expected FFO per share - diluted
$
0.85
$
0.89
$
3.35
$
3.55
Note: This table contains forward-looking statements. Please see the
paragraph regarding forward-looking statements earlier in this
document.
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,
2012
2011
Net income attributable to common shareholders
$
88,758
$
7,286
Less: Fee and asset management income
(2,923
)
(1,838
)
Less: Interest and other (income) loss
688
(4,771
)
Less: Income on deferred compensation plans
(7,786
)
(5,954
)
Plus: Property management expense
5,284
5,319
Plus: Fee and asset management expense
1,743
1,220
Plus: General and administrative expense
8,679
9,788
Plus: Interest expense
26,683
29,737
Plus: Depreciation and amortization
50,118
45,851
Plus: Amortization of deferred financing costs
912
1,527
Plus: Expense on deferred compensation plans
7,786
5,954
Less: Gain on sale of unconsolidated joint venture interests
-
(1,136
)
Less: Gain on acquisition of controlling interests in joint ventures
(40,191
)
-
Less: Equity in income of joint ventures
(366
)
(374
)
Plus: Income allocated to perpetual preferred units
776
1,750
Plus: Write off of original issuance costs of redeemed perpetual
preferred units
2,075
-
Plus: Income, including gain on sale, allocated to noncontrolling
interests from discontinued operations
670
9
Plus: Income allocated to noncontrolling interests from continuing
operations
825
556
Plus: Income tax expense - current
224
1,320
Less: Income from discontinued operations
(353
)
(792
)
Less: Gain on sale of discontinued operations, net of tax
(32,541
)
-
Net Operating Income (NOI)
$
111,061
$
95,452
"Same Property" Communities
$
101,105
$
92,256
Non-"Same Property" Communities
8,449
3,076
Development and Lease-Up Communities
680
-
Other
827
120
Net Operating Income (NOI)
$
111,061
$
95,452
EBITDA
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 discontinued
operations, net of tax, and income (loss) allocated to
noncontrolling 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,
2012
2011
Net income attributable to common shareholders
$
88,758
$
7,286
Plus: Interest expense
26,683
29,737
Plus: Amortization of deferred financing costs
912
1,527
Plus: Depreciation and amortization
50,118
45,851
Plus: Income allocated to perpetual preferred units
776
1,750
Plus: Write off of original issuance costs on redeemed perpetual
preferred units
2,075
-
Plus: Income, including gain on sale, allocated to noncontrolling
interests from discontinued operations
670
9
Plus: Income allocated to noncontrolling interests from continuing
operations
825
556
Plus: Income tax expense - current
224
1,320
Plus: Real estate depreciation and amortization from discontinued
operations
186
971
Less: Gain on sale of unconsolidated joint venture interests
-
(1,136
)
Less: Gain on acquisition of controlling interests in joint ventures
(40,191
)
-
Less: Equity in income of joint ventures
(366
)
(374
)
Less: Gain on sale of discontinued operations, net of tax
Recommend:
