CPT Camden Property Trust

Camden Property Trust (NYSE:CPT) announced that its funds from operations (“FFO”) for the first quarter of 2010 totaled $0.68 per diluted share or $47.0 million, as compared to $0.88 per diluted share or $51.6 million for the same period in 2009. The Company reported net income attributable to common shareholders (“EPS”) of $2.3 million or $0.03 per diluted share for the first quarter of 2010, as compared to $6.2 million or $0.11 per diluted share for the same period in 2009. EPS for the three months ended March 31, 2009 included a $0.01 per diluted share impact from the results of discontinued operations. A reconciliation of net income attributable to common shareholders to FFO is included in the financial tables accompanying this press release.

“We are pleased to report that our first quarter operating results reflected better than anticipated performance from our apartment communities,” said Richard J. Campo, Camden’s Chairman and Chief Executive Officer. “With market conditions continuing to improve across our portfolio, we expect our full-year 2010 FFO per share to be in the upper half of our guidance range.”

Same Property Results

For the 47,359 apartment homes included in consolidated same property results, first quarter 2010 same property net operating income (“NOI”) declined 9.1% compared to the first quarter of 2009, with revenues declining 4.8% and expenses increasing 2.0%. On a sequential basis, first quarter 2010 same property NOI declined 6.1% compared to the fourth quarter of 2009, with revenues declining 0.9% and expenses increasing 7.6% compared to the prior quarter. Same property physical occupancy levels for the portfolio averaged 93.1% during the first quarter of 2010, compared to 93.0% in the fourth quarter of 2009 and 93.6% in the first quarter of 2009.

The Company defines same property communities as communities owned and stabilized as of January 1, 2009, excluding properties held for sale and communities under 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.

Development Activity

Camden had one wholly-owned development community in lease-up during the first quarter: Camden Dulles Station in Oak Hill, VA, a $72.3 million project that is currently 95% leased.

During the quarter, construction was completed on two joint venture communities: Camden Travis Street, a $30.5 million project that is currently 47% leased; and Belle Meade, a $37.0 million project that is currently 54% leased. Lease-ups continued during the quarter at two additional joint venture communities which completed construction during 2009: Camden Amber Oaks in Austin, TX, a $35.3 million project that is currently 89% leased; and Braeswood Place in Houston, TX, a $50.3 million project that is currently 70% leased.

Equity Issuance

During the first quarter, Camden issued 403,500 common shares through its at-the-market (“ATM”) share offering program at an average price of $43.64 per share, for total net consideration of approximately $17.2 million. Subsequent to quarter-end, the Company issued an additional 825,124 common shares through its ATM program at an average price of $45.27 per share, for total net consideration of approximately $36.8 million.

Earnings Guidance

Camden maintained its earnings guidance for 2010 based on its current and expected views of the apartment market and general economic conditions. Full-year 2010 FFO is expected to be $2.35 to $2.65 per diluted share, and full-year 2010 EPS is expected to be $(0.24) to $0.06 per diluted share. Second quarter 2010 earnings guidance is $0.61 to $0.65 per diluted share for FFO and $(0.03) to $0.01 per diluted share for EPS. Guidance for EPS excludes potential future gains on the sale of properties. Camden intends to update its earnings guidance to the market on a quarterly basis.

The Company’s 2010 earnings guidance is based on projections of same property revenue declines between 2.25% and 4.25%, expense growth between 2.0% and 3.5%, and NOI declines between 5.5% and 8.5%. Additional information on the Company’s 2010 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, May 7, 2010 at 11:00 a.m. Central Time to review its first quarter 2010 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: 4447563, 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 185 properties containing 63,658 apartment homes across the United States. Camden was recently named by FORTUNE® Magazine for the third consecutive year as one of the “100 Best Companies to Work For” in America, placing 10th 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 camdenliving.com.

CAMDEN OPERATING RESULTS (In thousands, except per share and property data amounts)                         (Unaudited) Three Months Ended March 31,

OPERATING DATA

2010   2009 Property revenues Rental revenues $ 131,161 $ 136,500 Other property revenues   21,045       20,532   Total property revenues   152,206       157,032     Property expenses Property operating and maintenance 44,613 42,304 Real estate taxes   18,445       18,601   Total property expenses   63,058       60,905     Non-property income Fee and asset management income 1,838 2,031 Interest and other income 3,045 735 Income (loss) on deferred compensation plans   3,482       (4,152 ) Total non-property income (loss)   8,365       (1,386 )   Other expenses Property management 5,183 4,929 Fee and asset management 1,194 1,135 General and administrative 7,404 8,232 Interest 31,555 32,245 Depreciation and amortization 43,813 43,980 Amortization of deferred financing costs 726 817 Expense (benefit) on deferred compensation plans   3,482       (4,152 ) Total other expenses   93,357       87,186       Income from operations 4,156 7,555 Gain on early retirement of debt - 166 Equity in income (loss) of joint ventures   (105 )     408   Income from continuing operations before income taxes 4,051 8,129 Income tax expense - current   (270 )     (299 ) Income from continuing operations 3,781 7,830 Income from discontinued operations   -       675   Net income 3,781 8,505 Less (income) loss allocated to noncontrolling interests from continuing operations 254 (521 ) Less income allocated to perpetual preferred units   (1,750 )     (1,750 ) Net income attributable to common shareholders $ 2,285     $ 6,234      

CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME

Net income $ 3,781 $ 8,505 Other comprehensive income (loss) Unrealized loss on cash flow hedging activities (6,817 ) (2,936 ) Reclassification of net losses on cash flow hedging activities   5,879       5,276   Comprehensive income 2,843 10,845 Less (income) loss allocated to noncontrolling interests from continuing operations 254 (521 ) Less income allocated to perpetual preferred units   (1,750 )     (1,750 ) Comprehensive income attributable to common shareholders $ 1,347       8,574      

PER SHARE DATA

Net income attributable to common shareholders - basic $ 0.03 $ 0.11 Net income attributable to common shareholders - diluted 0.03 0.11 Income from continuing operations attributable to common shareholders - basic 0.03 0.10 Income from continuing operations attributable to common shareholders - diluted 0.03 0.10  

Weighted average number of common and common equivalent shares outstanding:

Basic 66,475 55,552 Diluted 68,169 56,047       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

2010   2009   Net income attributable to common shareholders $ 2,285 $ 6,234 Real estate depreciation from continuing operations 42,639 43,010 Adjustments for unconsolidated joint ventures 2,163 1,916 Income (loss) allocated to noncontrolling interests   (105 )     421 Funds from operations - diluted $ 46,982     $ 51,581  

PER SHARE DATA

Funds from operations - diluted $ 0.68 $ 0.88 Cash distributions 0.45 0.70  

Weighted average number of common and common equivalent shares outstanding:

FFO - diluted 69,295 58,471  

PROPERTY DATA

Total operating properties (end of period) (a) 185 182 Total operating apartment homes in operating properties (end of period) (a) 63,658 63,269 Total operating apartment homes (weighted average) 50,578 50,688 Total operating apartment homes - excluding discontinued operations (weighted average) 50,578 50,017     (a) Includes joint ventures and properties held for sale. CAMDEN         BALANCE SHEETS (In thousands)                         (Unaudited) Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, 2010   2009   2009   2009   2009 ASSETS Real estate assets, at cost Land $ 748,604 $ 747,921 $ 746,825 $ 746,936 $ 746,935 Buildings and improvements   4,527,523       4,512,124       4,484,335       4,473,906       4,466,296   5,276,127 5,260,045 5,231,160 5,220,842 5,213,231 Accumulated depreciation   (1,191,604 )     (1,149,056 )     (1,107,227 )     (1,065,861 )     (1,023,466 ) Net operating real estate assets 4,084,523 4,110,989 4,123,933 4,154,981 4,189,765 Properties under development and land 196,371 201,581 279,620 268,655 258,239 Investments in joint ventures 42,994 43,542 43,236 22,334 15,158 Properties held for sale, including land   -       -       6,622       6,732       20,696   Total real estate assets 4,323,888 4,356,112 4,453,411 4,452,702 4,483,858 Accounts receivable - affiliates 32,657 36,112 35,971 35,909 36,105 Notes receivable - affiliates 46,118 45,847 54,462 54,033 58,481 Other assets, net (a) 92,983 102,114 104,669 92,421 84,905 Cash and cash equivalents 28,553 64,156 81,683 157,665 7,256 Restricted cash   3,680       3,658       3,901       5,190       4,437   Total assets $ 4,527,879     $ 4,607,999     $ 4,734,097     $ 4,797,920     $ 4,675,042         LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Notes payable Unsecured $ 1,590,473 $ 1,645,926 $ 1,646,106 $ 1,728,150 $ 2,151,492 Secured 980,188 979,273 976,051 969,668 680,631 Accounts payable and accrued expenses 69,858 74,420 78,466 65,012 73,250 Accrued real estate taxes 17,005 23,241 42,386 30,154 19,113 Other liabilities (b) 138,136 145,176 145,464 132,763 137,397 Distributions payable   33,403       33,025       33,028       33,050       43,136   Total liabilities 2,829,063 2,901,061 2,921,501 2,958,797 3,105,019   Commitments and contingencies   Perpetual preferred units 97,925 97,925 97,925 97,925 97,925   Shareholders' equity Common shares of beneficial interest 778 770 770 769 666 Additional paid-in capital 2,548,722 2,525,656 2,522,525 2,517,788 2,242,940 Distributions in excess of net income attributable to common shareholders (520,798 ) (492,571 ) (383,265 ) (357,168 ) (345,481 ) Notes receivable secured by common shares (101 ) (101 ) (101 ) (287 ) (291 ) Treasury shares, at cost (461,517 ) (462,188 ) (462,188 ) (462,751 ) (462,751 ) Accumulated other comprehensive loss (c)   (42,093 )     (41,155 )     (44,921 )     (41,886 )     (48,716 ) Total common shareholders' equity 1,524,991 1,530,411 1,632,820 1,656,465 1,386,367 Noncontrolling interest   75,900       78,602       81,851       84,733       85,731   Total shareholders' equity   1,600,891       1,609,013       1,714,671       1,741,198       1,472,098   Total liabilities and shareholders' equity $ 4,527,879     $ 4,607,999     $ 4,734,097     $ 4,797,920     $ 4,675,042         (a) includes: net deferred charges of: $ 10,704 $ 11,113 $ 11,617 $ 12,108 $ 10,061   (b) includes: deferred revenues of: $ 2,467 $ 2,664 $ 2,938 $ 3,183 $ 2,402 distributions in excess of investments in joint ventures of: $ 32,195 $ 31,410 $ 30,507 $ 30,287 $ 31,318 fair value adjustment of derivative instruments: $ 42,119 $ 41,083 $ 44,730 $ 41,797 $ 48,693   (c) Represents the fair value adjustment of derivative instruments and gain on post retirement obligations. 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 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, 2010   2009 Net income attributable to common shareholders $ 2,285 $ 6,234 Real estate depreciation from continuing operations 42,639 43,010 Adjustments for unconsolidated joint ventures 2,163 1,916 Income (loss) allocated to noncontrolling interests   (105 )     421 Funds from operations - diluted $ 46,982     $ 51,581  

Weighted average number of common and common equivalent shares outstanding:

EPS diluted 68,169 56,047 FFO diluted 69,295 58,471   Net income attributable to common shareholders - diluted $ 0.03 $ 0.11 FFO per common share - diluted $ 0.68 $ 0.88    

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:

  2Q10 Range 2010 Range Low High Low   High   Expected net income attributable to common shareholders per share - diluted ($0.03 ) $ 0.01 ($0.24 ) $ 0.06 Expected real estate depreciation 0.60 0.60 2.43 2.43 Expected adjustments for unconsolidated joint ventures 0.03 0.03 0.13 0.13 Expected income allocated to noncontrolling interests 0.01     0.01   0.03       0.03 Expected FFO per share - diluted 0.61 0.65 $ 2.35 $ 2.65  

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

Net Operating Income (NOI)

(In thousands, except per share amounts)

 

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, 2010   2009 Net income attributable to common shareholders $ 2,285 $ 6,234 Less: Fee and asset management income (1,838 ) (2,031 ) Less: Interest and other income (3,045 ) (735 ) Less: (Income) loss on deferred compensation plans (3,482 ) 4,152 Plus: Property management expense 5,183 4,929 Plus: Fee and asset management expense 1,194 1,135 Plus: General and administrative expense 7,404 8,232 Plus: Interest expense 31,555 32,245 Plus: Depreciation and amortization 43,813 43,980 Plus: Amortization of deferred financing costs 726 817 Plus: Expense (benefit) on deferred compensation plans 3,482 (4,152 ) Less: (Gain) on early retirement of debt - (166 ) Less: Equity in (income) loss of joint ventures 105 (408 ) Plus: Income allocated to perpetual preferred units 1,750 1,750 Plus: Income (loss) allocated to noncontrolling interests (254 ) 521 Plus: Income tax expense - current 270 299 Less: Income from discontinued operations   -       (675 ) Net Operating Income (NOI) $ 89,148 $ 96,127   "Same Property" Communities $ 82,585 $ 90,813 Non-"Same Property" Communities 5,201 4,116 Development and Lease-Up Communities 799 424 Redevelopment Communities 570 500 Dispositions / Other   (7 )     274   Net Operating Income (NOI) $ 89,148 $ 96,127    

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 early retirement of debt, 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, 2010   2009 Net income attributable to common shareholders $ 2,285 $ 6,234 Plus: Interest expense 31,555 32,245 Plus: Amortization of deferred financing costs 726 817 Plus: Depreciation and amortization 43,813 43,980 Plus: Income allocated to perpetual preferred units 1,750 1,750 Plus: Income (loss) allocated to noncontrolling interests (254 ) 521 Plus: Income tax expense - current 270 299 Less: (Gain) on early retirement of debt - (166 ) Less: Equity in (income) loss of joint ventures   105       (408 ) EBITDA $ 80,250 $ 85,272