CPT Camden Property Trust

Camden Property Trust (NYSE: CPT) today announced operating results for the three and nine months ended September 30, 2011.

Funds From Operations (“FFO”)

FFO for the third quarter of 2011 totaled $0.77 per diluted share or $58.8 million, as compared to $0.65 per diluted share or $46.7 million for the same period in 2010, an increase of 18% per diluted share.

FFO for the nine months ended September 30, 2011 totaled $1.89 per diluted share or $143.3 million, as compared to $1.98 per diluted share or $140.4 million for the same period in 2010. FFO for the nine months ended September 30, 2011 included: a $0.40 per diluted share impact related to a $29.8 million loss on discontinuation of a hedging relationship of an interest rate swap and $0.5 million write-off of unamortized loan costs related to the payoff of a term loan; a $4.7 million or $0.06 per diluted share gain on sale of undeveloped land; a net $3.3 million or $0.04 per diluted share impact related to the sale of an available-for-sale investment; 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. FFO for the nine months ended September 30, 2010 included a $2.7 million or $0.04 per diluted share impact for income relating to the expiration of an indemnification provision related to one of the Company’s operating joint ventures.

Net Income Attributable to Common Shareholders (“EPS”)

The Company reported EPS of $11.8 million or $0.16 per diluted share for the third quarter of 2011, as compared to $1.7 million or $0.02 per diluted share for the same period in 2010.

For the nine months ended September 30, 2011, Camden reported EPS of $2.5 million or $0.03 per diluted share, as compared to $6.1 million or $0.09 per diluted share for the same period in 2010. EPS for the nine months ended September 30, 2011 included: a $0.41 per diluted share impact related to a $29.8 million loss on discontinuation of a hedging relationship of an interest rate swap and $0.5 million write-off of unamortized loan costs related to the payoff of a term loan; a $4.7 million or $0.06 per diluted share gain on sale of undeveloped land; 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 sale of three joint venture interests. EPS for the nine months ended September 30, 2010 included a $2.7 million or $0.04 per diluted share impact for income relating to the expiration of an indemnification provision related to one of the Company’s operating joint ventures.

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 47,309 apartment homes included in consolidated same property results, third quarter 2011 same property NOI increased 7.4% compared to the third quarter of 2010, with revenues increasing 6.3% and expenses increasing 4.6%. On a sequential basis, third quarter 2011 same property NOI increased 0.9% compared to the second quarter of 2011, with revenues increasing 2.1% and expenses increasing 3.9% compared to the prior quarter. On a year-to-date basis, 2011 same property NOI increased 6.8%, with revenues increasing 5.1% and expenses increasing 2.6% compared to the same period in 2010. Same property physical occupancy levels for the portfolio averaged 95.0% during the third quarter of 2011, compared to 94.3% in the third quarter of 2010 and 94.8% in the second quarter of 2011.

The Company defines same property communities as communities owned and stabilized as of January 1, 2010, 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

During the quarter, the Company acquired 30 acres of land in Atlanta, GA for approximately $40 million, which it intends to utilize for future development.

Camden also completed the acquisition of a 240-home apartment community in San Antonio, TX during the quarter for approximately $15 million through one of its discretionary investment funds (“Funds”), in which it owns a 20% interest. Subsequent to quarter-end, the Company acquired five additional communities with 1,488 apartment homes located in Houston, TX for approximately $136 million through its Funds.

Development Activity

Lease-up was completed during the third quarter at Camden Ivy Hall, a $17 million joint venture community which is currently 94% occupied. Lease-ups began during the quarter at two wholly-owned communities: Camden LaVina in Orlando, FL, which is currently 35% leased; and Camden Summerfield II in Landover, MD, which is currently 19% leased.

Construction continued during the quarter on six wholly-owned development communities: Camden LaVina in Orlando, FL, a $60 million project with 420 apartment homes; Camden Summerfield II in Landover, MD, a $30 million project with 187 apartment homes; Camden Royal Oaks II in Houston, TX, a $14 million project with 104 apartment homes; Camden Montague in Tampa, FL, a $23 million project with 192 apartment homes; Camden Westchase Park in Tampa, FL, a $52 million project with 348 apartment homes; and Camden Town Square in Orlando, FL, a $66 million project with 438 apartment homes. Construction also continued during the quarter on two joint venture communities: Camden South Capitol in Washington, DC, an $88 million project with 276 apartment homes, and Camden Amber Oaks II in Austin, TX, a $25 million project with 244 apartment homes.

Subsequent to quarter-end, the Company began construction on two additional wholly-owned development communities: 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.

Equity Issuance

During the third quarter, Camden issued 506,200 common shares through its at-the-market (“ATM”) share offering programs at an average price of $65.76 per share, for total net consideration of approximately $32.7 million. Year-to-date Camden has issued 1,127,898 common shares through its ATM programs at an average price of $63.13 per share, for total net consideration of approximately $69.9 million.

Earnings Guidance

Camden updated its earnings guidance for 2011 based on its current and expected views of the apartment market and general economic conditions. Full-year 2011 FFO is expected to be $2.70 to $2.74 per diluted share, and full-year 2011 EPS is expected to be $0.24 to $0.28 per diluted share. Fourth quarter 2011 earnings guidance is $0.81 to $0.85 per diluted share for FFO and $0.20 to $0.24 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 2011 earnings guidance is based on projections of same property revenue growth between 5.2% and 5.6%, expense growth between 2.75% and 3.25%, and NOI growth between 6.75% and 7.25%. Additional information on the Company’s 2011 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.

Camden expects to issue earnings guidance for 2012 in conjunction with its fourth quarter 2011 earnings release on February 2, 2012.

Conference Call

The Company will hold a conference call on Friday, November 4, 2011 at 11:00 a.m. Central Time to review its third quarter 2011 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: 9252989, 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 202 properties containing 68,979 apartment homes across the United States. Upon completion of 10 properties under development, the Company's portfolio will increase to 71,776 apartment homes in 212 properties. Camden was recently named by FORTUNE® Magazine for the fourth 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 Nine Months Ended September 30, September 30,

OPERATING DATA

2011   2010 2011   2010 Property revenues   Rental revenues $144,211 $131,911 $424,210 $390,376 Other property revenues 24,723   22,363 70,977   64,641 Total property revenues 168,934   154,274 495,187   455,017   Property expenses Property operating and maintenance 50,715 46,999 144,666 134,655 Real estate taxes 17,329   16,652 52,932   52,767 Total property expenses 68,044   63,651 197,598   187,422   Non-property income (loss) Fee and asset management 2,646 2,145 6,955 6,028 Interest and other income (loss) (108) 451 4,749 3,988 Income (loss) on deferred compensation plans (6,096)   6,918 1,233   6,818 Total non-property income (loss) (3,558)   9,514 12,937   16,834   Other expenses Property management 5,050 4,789 15,478 14,994 Fee and asset management 1,330 1,155 4,220 3,611 General and administrative 8,572 7,568 26,392 22,339 Interest 27,354 31,781 85,472 95,078 Depreciation and amortization 44,558 43,034 137,111 128,012 Amortization of deferred financing costs 1,344 1,185 4,761 2,624 Expense (benefit) on deferred compensation plans (6,096)   6,918 1,233   6,818 Total other expenses 82,112   96,430 274,667   273,476     Loss on discontinuation of hedging relationship - - (29,791) - Gain on sale of properties, including land - - 4,748 236 Gain on sale of unconsolidated joint venture interests - - 1,136 - Equity in loss of joint ventures (556)   (244) (166)   (785) Income from continuing operations before income taxes 14,664 3,463 11,786 10,404 Income tax expense - current (313)   (712) (1,889)   (1,286) Income from continuing operations 14,351 2,751 9,897 9,118 Income from discontinued operations -   1,081 -   2,743 Net income 14,351 3,832 9,897 11,861 Less income allocated to noncontrolling interests from continuing operations (761) (432) (2,118) (542) Less income allocated to perpetual preferred units (1,750)   (1,750) (5,250)   (5,250) Net income attributable to common shareholders $11,840   $1,650 $2,529   $6,069    

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income $14,351 $3,832 $9,897 $11,861 Other comprehensive income Unrealized loss on cash flow hedging activities - (5,323) (2,692) (19,549) Reclassification of net losses on cash flow hedging activities 108 5,825 39,660 17,488 Unrealized gain on available-for-sale securities, net of tax - 1,914 - 1,914 Reclassification of gain on available-for-sale investment to earnings, net of tax -   - (3,309)   - Comprehensive income 14,459 6,248 43,556 11,714 Less income allocated to noncontrolling interests from continuing operations (761) (432) (2,118) (542) Less income allocated to perpetual preferred units (1,750)   (1,750) (5,250)   (5,250) Comprehensive income attributable to common shareholders $11,948   $4,066 $36,188   $5,922    

PER SHARE DATA

Net income attributable to common shareholders - basic $0.16 $0.02 $0.03 $0.09 Net income attributable to common shareholders - diluted 0.16 0.02 0.03 0.09 Income from continuing operations attributable to common shareholders - basic 0.16 0.01 0.03 0.05 Income from continuing operations attributable to common shareholders - diluted 0.16 0.01 0.03 0.05   Weighted average number of common and common equivalent shares outstanding: Basic 73,242 69,100 72,502 67,898 Diluted 74,274 69,441 73,217 68,169     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 Nine Months Ended September 30, September 30,

FUNDS FROM OPERATIONS

2011   2010 2011   2010   Net income attributable to common shareholders (a) $11,840 $1,650 $2,529 $6,069 Real estate depreciation from continuing operations 43,286 41,806 133,342 124,399 Real estate depreciation from discontinued operations - 651 - 2,276 Adjustments for unconsolidated joint ventures 3,223 2,292 7,042 6,753 (Gain) on sale of unconsolidated joint venture interests - - (1,136) - Income allocated to noncontrolling interests 458   281 1,494   864 Funds from operations - diluted $58,807   $46,680 $143,271   $140,361  

PER SHARE DATA

Funds from operations - diluted $0.77 $0.65 $1.89 $1.98 Cash distributions 0.49 0.45 1.47 1.35   Weighted average number of common and common equivalent shares outstanding: FFO - diluted 76,494 72,025 75,685 70,779  

PROPERTY DATA

Total operating properties (end of period) (b) 197 186 197 186 Total operating apartment homes in operating properties (end of period) (b) 67,491 63,964 67,491 63,964 Total operating apartment homes (weighted average) 50,921 50,950 50,895 50,736 Total operating apartment homes - excluding discontinued operations (weighted average) 50,921 49,884 50,895 49,670   (a) Includes a $29.8 million charge related to a loss on the discontinuation of a hedging relationship

    for the nine months ended September 30,2011.

(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 SHEETS   (In thousands)                             (Unaudited) Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, 2011   2011   2011   2010   2010 ASSETS Real estate assets, at cost Land $766,302 $760,397 $760,397 $760,397 $763,559 Buildings and improvements 4,758,397   4,711,552   4,690,741   4,680,361   4,613,036 5,524,699 5,471,949 5,451,138 5,440,758 5,376,595 Accumulated depreciation (1,421,867)   (1,378,630)   (1,335,831)   (1,292,924)   (1,263,173) Net operating real estate assets 4,102,832 4,093,319 4,115,307 4,147,834 4,113,422 Properties under development, including land 274,201 237,549 220,641 206,919 198,377 Investments in joint ventures 37,033 39,398 21,196 27,632 33,226 Properties held for sale, including land -   -   -   -   9,737 Total real estate assets 4,414,066 4,370,266 4,357,144 4,382,385 4,354,762 Accounts receivable - affiliates 31,395 30,401 29,973 31,895 32,269 Notes receivable - affiliates - - - 3,194 17,509 Other assets, net (a) 87,657 90,346 92,051 106,175 105,950 Cash and cash equivalents 56,099 63,148 98,771 170,575 91,071 Restricted cash 5,357   4,898   5,354   5,513   5,174 Total assets $4,594,574   $4,559,059   $4,583,293   $4,699,737   $4,606,735       LIABILITIES AND EQUITY Liabilities Notes payable Unsecured $1,380,560 $1,380,368 $1,419,681 $1,507,757 $1,507,858 Secured 1,052,544 1,053,699 1,054,839 1,055,997 1,034,354 Accounts payable and accrued expenses 97,613 78,460 81,972 81,556 82,598 Accrued real estate taxes 37,721 27,424 16,585 22,338 40,340 Distributions payable 39,319 38,966 38,662 35,295 34,548 Other liabilities (b) 111,043   123,829   134,608   141,496   144,146 Total liabilities 2,718,800 2,702,746 2,746,347 2,844,439 2,843,844   Commitments and contingencies   Perpetual preferred units 97,925 97,925 97,925 97,925 97,925   Equity Common shares of beneficial interest 839 834 827 824 804 Additional paid-in capital 2,861,139 2,823,690 2,783,621 2,775,625 2,673,606 Distributions in excess of net income attributable to common shareholders (700,897) (676,367) (623,740) (595,317) (580,046) Treasury shares, at cost (452,244) (459,134) (460,467) (461,255) (461,255) Accumulated other comprehensive income (loss) (c) 201   93   (31,504)   (33,458)   (41,302) Total common equity 1,709,038 1,689,116 1,668,737 1,686,419 1,591,807 Noncontrolling interest 68,811   69,272   70,284   70,954   73,159 Total equity 1,777,849   1,758,388   1,739,021   1,757,373   1,664,966 Total liabilities and equity $4,594,574   $4,559,059   $4,583,293   $4,699,737   $4,606,735       (a) Includes: net deferred charges of: $16,868 $14,484 $12,677 $13,336 $14,892   (b) Includes: deferred revenues of: $2,213 $2,181 $2,254 $2,332 $2,347 distributions in excess of investments in joint ventures of: $31,799 $31,040 $33,442 $32,288 $34,045 fair value adjustment of derivative instruments: $22,192 $27,977 $31,655 $36,898 $43,267   (c) Represents the fair value adjustment of derivative instruments, unrealized gain on post retirement obligations and unrealized gain on available-for-sale securities, net of tax, if any.     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 Nine Months Ended September 30, September 30, 2011   2010 2011   2010 Net income attributable to common shareholders (a) $11,840 $1,650 $2,529 $6,069 Real estate depreciation from continuing operations 43,286 41,806 133,342 124,399 Real estate depreciation from discontinued operations - 651 - 2,276 Adjustments for unconsolidated joint ventures 3,223 2,292 7,042 6,753 (Gain) on sale of unconsolidated joint venture interests - - (1,136) - Income allocated to noncontrolling interests 458   281 1,494   864 Funds from operations - diluted $58,807   $46,680 $143,271   $140,361   Weighted average number of common and

common equivalent shares outstanding:

EPS diluted 74,274 69,441 73,217 68,169 FFO diluted 76,494 72,025 75,685 70,779   Net income attributable to common shareholders - diluted $0.16 $0.02 $0.03 $0.09 FFO per common share - diluted $0.77 $0.65 $1.89 $1.98   (a) Includes a $29.8 million charge related to a loss on the discontinuation of a hedging relationship

 for the nine months ended September 30,2011.

  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:   4Q11 Range 2011 Range Low   High Low   High   Expected net income attributable to common shareholders per share - diluted $0.20 $0.24 $0.24 $0.28 Expected difference between fully diluted EPS and FFO shares (0.02) (0.02) (0.07) (0.07) Expected real estate depreciation 0.58 0.58 2.38 2.38 Expected adjustments for unconsolidated joint ventures 0.04 0.04 0.14 0.14 Recognized (gain) on sale of unconsolidated joint venture interests 0.00 0.00 (0.02) (0.02) Expected income allocated to noncontrolling interests 0.01   0.01 0.03   0.03 Expected FFO per share - diluted $0.81 $0.85 $2.70 $2.74       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 Nine Months Ended September 30, September 30, 2011   2010 2011   2010 Net income attributable to common shareholders $11,840 $1,650 $2,529 $6,069 Less: Fee and asset management income (2,646) (2,145) (6,955) (6,028) Less: Interest and other (income) loss 108 (451) (4,749) (3,988) Less: (Income) loss on deferred compensation plans 6,096 (6,918) (1,233) (6,818) Plus: Property management expense 5,050 4,789 15,478 14,994 Plus: Fee and asset management expense 1,330 1,155 4,220 3,611 Plus: General and administrative expense 8,572 7,568 26,392 22,339 Plus: Interest expense 27,354 31,781 85,472 95,078 Plus: Depreciation and amortization 44,558 43,034 137,111 128,012 Plus: Amortization of deferred financing costs 1,344 1,185 4,761 2,624 Plus: Expense (benefit) on deferred compensation plans (6,096) 6,918 1,233 6,818 Less: Gain on sale of properties, including land - - (4,748) (236) Less: Gain on sale of unconsolidated joint venture interests - - (1,136) - Less: Equity in (income) loss of joint ventures 556 244 166 785 Plus: Loss on discontinuation of hedging relationship - - 29,791 - Plus: Income allocated to perpetual preferred units 1,750 1,750 5,250 5,250 Plus: Income allocated to noncontrolling interests 761 432 2,118 542 Plus: Income tax expense - current 313 712 1,889 1,286 Less: Income from discontinued operations -   (1,081) -   (2,743) Net Operating Income (NOI) $100,890 $90,623 $297,589 $267,595   "Same Property" Communities $92,154 $85,796 $271,903 $254,586 Non-"Same Property" Communities 8,298 5,066 24,964 13,356 Development and Lease-Up Communities 83 - 83 - Other 355   (239) 639   (347) Net Operating Income (NOI) $100,890 $90,623 $297,589 $267,595    

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, 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 Nine Months Ended September 30, September 30, 2011   2010 2011   2010 Net income attributable to common shareholders $11,840 $1,650 $2,529 $6,069 Plus: Interest expense 27,354 31,781 85,472 95,078 Plus: Amortization of deferred financing costs 1,344 1,185 4,761 2,624 Plus: Depreciation and amortization 44,558 43,034 137,111 128,012 Plus: Income allocated to perpetual preferred units 1,750 1,750 5,250 5,250 Plus: Income allocated to noncontrolling interests 761 432 2,118 542 Plus: Income tax expense - current 313 712 1,889 1,286 Plus: Real estate depreciation from discontinued operations - 651 - 2,276 Less: Gain on sale of properties, including land - - (4,748) (236) Less: Gain on sale of unconsolidated joint venture interests - - (1,136) - Less: Equity in (income) loss of joint ventures 556 244 166 785 Plus: Loss on discontinuation of hedging relationship -   - 29,791   - EBITDA $88,476 $81,439 $263,203 $241,686