Camden Property Trust Announces Second Quarter 2008 Operating Results

Camden Property Trust (NYSE:CPT) announced that its funds from operations ("FFO”) for the second quarter of 2008 totaled $0.94 per diluted share or $54.9 million, as compared to $0.92 per diluted share or $57.8 million for the same period in 2007. FFO for the six months ended June 30, 2008 totaled $1.83 per diluted share or $107.2 million, as compared to $1.81 per diluted share or $113.7 million for the same period in 2007. FFO for the three and six months ended June 30, 2008 included a $0.04 per diluted share impact from gains related to repurchase of unsecured senior notes. Net Income ("EPS”) The Company reported net income ("EPS”) of $17.3 million or $0.31 per diluted share for the second quarter of 2008, as compared to $42.6 million or $0.71 per diluted share for the same period in 2007. EPS for the three months ended June 30, 2008 included a $0.15 per diluted share impact from gain on sale of discontinued operations, and a $0.04 per diluted share impact from gains related to repurchase of unsecured senior notes. EPS for the three months ended June 30, 2007 included a $0.52 per diluted share impact from gain on sale of discontinued operations. For the six months ended June 30, 2008, net income totaled $32.2 million or $0.58 per diluted share, as compared to $55.6 million or $0.93 per diluted share for the same period in 2007. EPS for the six months ended June 30, 2008 included a $0.28 per diluted share impact from gain on sale of properties including discontinued operations, and a $0.04 per diluted share impact from gains related to repurchase of unsecured senior notes. EPS for the six months ended June 30, 2007 included a $0.52 per diluted share impact from gain on sale of properties including discontinued operations. A reconciliation of net income to FFO is included in the financial tables accompanying this press release. Same-Property Results For the 42,166 apartment homes included in consolidated same-property results, second quarter 2008 same-property net operating income ("NOI”) increased 0.8% compared to the second quarter of 2007, with revenues increasing 1.6% and expenses increasing 3.0%. On a sequential basis, second quarter 2008 same-property NOI increased 1.7% compared to the first quarter of 2008, with revenues increasing 1.8% and expenses increasing 2.1% compared to the prior quarter. Same-property physical occupancy levels for the portfolio averaged 94.6% during the second quarter of 2008, compared to 94.8% in the second quarter of 2007 and 93.8% in the first quarter of 2008. The Company defines same-property communities as communities owned and stabilized as of January 1, 2007, excluding properties held for sale and communities under redevelopment. A reconciliation of net income to net operating income and same-property net operating income is included in the financial tables accompanying this press release. Development Activity During the second quarter, lease-up was completed at Camden Monument Place in Fairfax, VA, a $62.7 million project that is currently 96% occupied, and Camden Plaza in Houston, TX, a $40.8 million joint venture project that is currently 93% occupied. As of June 30, 2008, Camden had five wholly-owned apartment communities which were completed and in lease-up: Camden Royal Oaks in Houston, TX, a $21.0 million project that is currently 94% leased; Camden City Centre in Houston, TX, a $51.6 million project that is currently 93% leased; Camden Potomac Yard in Arlington, VA, a $104.2 million project that is currently 63% leased; Camden Summerfield in Landover, MD, a $62.0 million project that is currently 57% leased; and Camden Orange Court in Orlando, FL, a $45.1 million project that is currently 44% leased. The Company has five additional communities currently under construction and in lease-up: Camden Dulles Station in Oak Hill, VA, a $77.0 million project that is currently 30% leased; Camden Cedar Hills in Austin, TX, a $27.0 million project that is currently 47% leased; Camden Whispering Oaks in Houston, TX, a $30.0 million project that is currently 32% leased; Camden College Park in College Park, MD, a $139.9 million joint venture project that is currently 56% leased; and Camden Main & Jamboree in Irvine, CA, a $115.0 million joint venture project that is currently 65% leased. Camden’s current development pipeline also includes three joint venture communities which are under construction but have not yet begun leasing. These projects comprise 807 apartment homes with a total budgeted cost of $121.8 million. Camden’s future development pipeline currently consists of 18 potential developments comprising 5,855 apartment homes and a total estimated cost of $1.5 billion. The future pipeline represents projects in the early phase of development, for which Camden owns the land but has not yet begun construction. Disposition Activity During the quarter, the Company disposed of Oasis Sands, a 48-home apartment community in Las Vegas, NV and Camden Towne Village, a 188-home apartment community in Mesquite, TX for a total of $14.0 million, resulting in a gain on sale of $8.6 million. Subsequent to quarter-end, the Company completed the sales of: Camden Lakeview, a 476-home apartment community in Irving, TX; Camden Woodview, a 283-home apartment community in Austin, TX; Camden Briar Oaks, a 430-home apartment community in Austin, TX; and Camden Arbors, a 358-home apartment community in Westminster, CO. The four communities were sold for a total of $94.9 million. Properties and Land Held for Sale At June 30, 2008, Camden had two operating communities consisting of 834 apartment homes held for sale: Camden Lakeview, a 476-home apartment community in Irving, TX; and Camden Arbors, a 358-home apartment community in Westminster, CO. Both communities were disposed of subsequent to quarter-end. The Company also had 4.6 acres of undeveloped land in Boca Raton, FL and Dallas, TX classified as held for sale at quarter-end. Stock Repurchase During the first quarter of 2008, Camden repurchased 690,400 common shares at an average price per share of $43.41, for a total of $30.0 million. No shares were repurchased during the second quarter of 2008. The Company has completed a total of $230.1 million of common share repurchases during 2007 and 2008. Earnings Guidance Camden’s earnings guidance for 2008 is based on its current and expected views of the apartment market and general economic conditions. Full-year 2008 FFO is expected to be $3.55 to $3.65 per diluted share, and full-year 2008 EPS is expected to be $0.72 to $0.82 per diluted share. The Company’s revised 2008 earnings guidance is based on projections of same-property revenue growth of 2.0% to 2.75%, expense growth of 4.25% to 5.25%, and NOI growth of 0.5% to 1.5%. Third quarter 2008 earnings guidance is $0.85 to $0.89 per diluted share for FFO and $0.06 to $0.10 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. A reconciliation of expected net income to expected FFO is included in the financial tables accompanying this press release. Conference Call The Company will hold a conference call on Friday, August 1, 2008 at 10:00 a.m. Central Time to review its second quarter 2008 results and discuss its outlook for future performance. To participate in the call, please dial (800) 860-2442 (domestic) or (412) 858-4600 (international) by 9:50 a.m. Central Time and request the Camden Property Trust Second Quarter 2008 Earnings Call, or join the live webcast of the conference call by accessing the Investor Relations section of the Company’s website at www.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 178 properties containing 62,065 apartment homes across the United States. Upon completion of eight properties under development, the Company’s portfolio will increase to 64,518 apartment homes in 186 properties. Camden was recently named to FORTUNE® Magazine’s list of the "100 Best Companies to Work For.” 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 Six Months Ended June 30, June 30, OPERATING DATA 2008   2007 2008   2007 Property revenues Rental revenues $ 139,628 $ 133,798 $ 276,951 $ 265,450 Other property revenues   19,488       15,989     37,179       30,426   Total property revenues 159,116 149,787 314,130 295,876   Property expenses Property operating and maintenance 41,464 38,293 81,852 76,338 Real estate taxes   18,237       16,892     35,919       32,722   Total property expenses 59,701 55,185 117,771 109,060   Non-property income Fee and asset management income 2,131 2,420 4,543 4,806 Interest and other income 1,092 1,810 2,425 3,372 Income on deferred compensation plans   (639 )     4,835     (9,180 )     7,141   Total non-property income 2,584 9,065 (2,212 ) 15,319   Other expenses Property management 5,281 4,800 10,181 9,528 Fee and asset management 1,696 811 3,421 2,431 General and administrative 8,414 7,912 16,374 15,966 Interest 33,378 29,243 66,044 57,003 Depreciation and amortization 43,983 38,905 86,288 77,627 Amortization of deferred financing costs 592 901 1,329 1,812 Expense on deferred compensation plans   (639 )     4,835     (9,180 )     7,141   Total other expenses   92,705       87,407     174,457       171,508     Income from continuing operations before gain on sale of properties, gains related to early retirement of debt, equity in income of joint ventures, minority interests and income taxes 9,294 16,260 19,690 30,627 Gain on sale of properties, including land - - 1,106 - Gains related to early retirement of debt 2,298 - 2,298 - Equity in income (loss) of joint ventures (474 ) 484 (521 ) 1,219 Minority interests Distributions on perpetual preferred units (1,750 ) (1,750 ) (3,500 ) (3,500 ) Income allocated to common units and other minority interests   (1,126 )     (1,343 )   (2,395 )     (2,130 ) Income from continuing operations before income taxes 8,242 13,651 16,678 26,216 Income tax expense   (160 )     (316 )   (433 )     (2,221 ) Income from continuing operations 8,082 13,335 16,245 23,995 Income from discontinued operations 663 2,800 1,288 5,447 Gain on sale of discontinued operations 8,549 30,976 14,676 30,976 Income from discontinued operations allocated to common units   -       (4,519 )   -       (4,789 ) Net income $ 17,294     $ 42,592   $ 32,209     $ 55,629     PER SHARE DATA Net income - basic $ 0.31 $ 0.72 $ 0.58 $ 0.95 Net income - diluted 0.31 0.71 0.58 0.93 Income from continuing operations - basic 0.15 0.23 0.29 0.41 Income from continuing operations - diluted 0.15 0.22 0.29 0.40   Weighted average number of common and common equivalent shares outstanding: Basic 55,351 58,894 55,158 58,854 Diluted 56,033 59,929 55,829 59,961   PROPERTY DATA Total operating properties (end of period) (a) 182 186 182 186 Total operating apartment homes in operating properties (end of period) (a) 63,612 64,191 63,612 64,191 Total operating apartment homes (weighted average) 51,957 53,424 51,860 53,260 Total operating apartment homes - excluding discontinued operations (weighted average) 50,919 49,375 50,750 49,091     (a) 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 FUNDS FROM OPERATIONS (In thousands, except per share and property data amounts)               (Unaudited) Three Months Ended Six Months Ended June 30, June 30, FUNDS FROM OPERATIONS 2008   2007 2008   2007   Net income $ 17,294 $ 42,592 $ 32,209 $ 55,629 Real estate depreciation and amortization from continuing operations 43,088 38,213 84,530 76,220 Real estate depreciation from discontinued operations 321 1,191 817 2,790 Adjustments for unconsolidated joint ventures 1,715 1,225 3,254 2,311 Income from continuing operations allocated to common units 1,004 1,048 2,160 1,784 Income from discontinued operations allocated to common units - 4,519 - 4,789 (Gain) loss on sale of operating properties, net of taxes - - (1,106 ) 1,184 (Gain) on sale of discontinued operations   (8,554 )     (30,976 )   (14,666 )     (30,976 ) Funds from operations - diluted $ 54,868     $ 57,812   $ 107,198     $ 113,731     PER SHARE DATA Funds from operations - diluted $ 0.94 $ 0.92 $ 1.83 $ 1.81 Cash distributions 0.70 0.69 1.40 1.38   Weighted average number of common and common equivalent shares outstanding: FFO - diluted 58,612 62,914 58,578 62,967   PROPERTY DATA Total operating properties (end of period) (a) 182 186 182 186 Total operating apartment homes in operating properties (end of period) (a) 63,612 64,191 63,612 64,191 Total operating apartment homes (weighted average) 51,957 53,424 51,860 53,260 Total operating apartment homes - excluding discontinued operations (weighted average) 50,919 49,375 50,750 49,091     (a) 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) Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, 2008   2008   2007   2007   2007 ASSETS Real estate assets, at cost Land $ 755,200 $ 749,664 $ 730,548 $ 714,044 $ 713,084 Buildings and improvements   4,474,749       4,435,787       4,316,472       4,215,662       4,144,075   5,229,949 5,185,451 5,047,020 4,929,706 4,857,159 Accumulated depreciation   (935,640 )     (907,643 )     (868,074 )     (827,944 )     (788,318 ) Net operating real estate assets 4,294,309 4,277,808 4,178,946 4,101,762 4,068,841 Properties under development, including land 333,419 358,994 446,664 488,620 454,617 Investments in joint ventures 14,773 12,526 8,466 12,243 12,722 Properties held for sale, including land   36,152       23,299       25,253       73,325       72,577   Total real estate assets 4,678,653 4,672,627 4,659,329 4,675,950 4,608,757 Accounts receivable - affiliates 36,556 36,166 35,940 36,171 35,341 Notes receivable Affiliates 53,849 52,331 50,358 48,172 45,560 Other 8,710 8,710 11,565 11,565 11,565 Other assets, net (a) 117,599 116,010 126,996 129,810 136,524 Cash and cash equivalents 1,242 947 897 1,207 3,058 Restricted cash   4,687       5,325       5,675       5,904       20,053   Total assets $ 4,901,296     $ 4,892,116     $ 4,890,760     $ 4,908,779     $ 4,860,858         LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Notes payable Unsecured $ 2,400,027 $ 2,351,006 $ 2,265,319 $ 2,198,628 $ 2,065,175 Secured 539,328 559,952 562,776 565,564 566,001 Accounts payable and accrued expenses 77,441 90,779 107,403 110,643 128,892 Accrued real estate taxes 30,664 17,769 24,943 42,151 29,785 Other liabilities (b) 129,471 146,817 136,365 117,317 115,547 Distributions payable   42,965       42,942       42,689       44,180       44,982   Total liabilities 3,219,896 3,209,265 3,139,495 3,078,483 2,950,382   Commitments and contingencies   Minority interests Perpetual preferred units 97,925 97,925 97,925 97,925 97,925 Common units 96,249 97,416 111,624 104,176 105,353 Other minority interests   8,572       8,537       10,403       10,740       10,916   Total minority interests 202,746 203,878 219,952 212,841 214,194   Shareholders' equity Common shares of beneficial interest 660 660 654 654 654 Additional paid-in capital 2,230,119 2,227,256 2,209,631 2,207,333 2,204,525 Distributions in excess of net income (272,294 ) (250,845 ) (227,025 ) (269,667 ) (241,711 ) Employee notes receivable (302 ) (306 ) (1,950 ) (1,963 ) (1,976 ) Treasury shares, at cost (463,574 ) (463,574 ) (433,874 ) (318,902 ) (265,210 ) Other comprehensive loss (c)   (15,955 )     (34,218 )     (16,123 )     -       -   Total shareholders' equity   1,478,654       1,478,973       1,531,313       1,617,455       1,696,282   Total liabilities and shareholders' equity $ 4,901,296     $ 4,892,116     $ 4,890,760     $ 4,908,779     $ 4,860,858         (a) includes: net deferred charges of: $ 9,434 $ 10,287 $ 10,811 $ 10,308 $ 11,565 value of in place leases of: - $ 62 $ 258 $ 703 $ 1,091   (b) includes: deferred revenues of: $ 2,747 $ 2,575 $ 2,459 $ 2,738 $ 2,937 above/below market leases of: - ($6 ) ($13 ) $ 25 $ 43 distributions in excess of investments in joint ventures of: $ 26,022 $ 25,065 $ 23,653 $ 20,867 $ 19,549 fair value adjustment of derivative instrument: $ 15,955 $ 34,218 $ 16,123 - -   (c) Represents the fair value adjustment of the derivative instrument.   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 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 to FFO is provided below:     Three Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 Net income $ 17,294 $ 42,592 $ 32,209 $ 55,629 Real estate depreciation and amortization from continuing operations 43,088 38,213 84,530 76,220 Real estate depreciation from discontinued operations 321 1,191 817 2,790 Adjustments for unconsolidated joint ventures 1,715 1,225 3,254 2,311 Income from continuing operations allocated to common units 1,004 1,048 2,160 1,784 Income from discontinued operations allocated to common units - 4,519 - 4,789 (Gain) loss on sale of operating properties, net of taxes - - (1,106 ) 1,184 (Gain) on sale of discontinued operations   (8,554 )   (30,976 )   (14,666 )   (30,976 ) Funds from operations - diluted $ 54,868   $ 57,812   $ 107,198   $ 113,731     Weighted average number of common and common equivalent shares outstanding: EPS diluted 56,033 59,929 55,829 59,961 FFO diluted 58,612 62,914 58,578 62,967   Net income per common share - diluted $ 0.31 $ 0.71 $ 0.58 $ 0.93 FFO per common share - diluted $ 0.94 $ 0.92 $ 1.83 $ 1.81   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 (EPS). A reconciliation of the ranges provided for expected net income per diluted share to expected FFO per diluted share is provided below:   3Q08 Range 2008 Range Low High Low High   Expected net income per share - diluted $ 0.06 $ 0.10 $ 0.72 $ 0.82 Expected difference between EPS and fully diluted FFO shares (0.01 ) (0.01 ) (0.03 ) (0.03 ) Expected real estate depreciation 0.74 0.74 2.94 2.94 Expected adjustments for unconsolidated joint ventures 0.03 0.03 0.12 0.12 Expected income allocated to common units 0.03 0.03 0.08 0.08 Expected (gain) on sale of properties and properties held for sale   0.00     0.00     (0.28 )   (0.28 ) Expected FFO per share - diluted $ 0.85 $ 0.89 $ 3.55 $ 3.65       Note: This table contains forward-looking statements. Please see the paragraph regarding forward-looking statements on page 1 of 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 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 to net operating income is provided below:   Three Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 Net income $ 17,294 $ 42,592 $ 32,209 $ 55,629 Fee and asset management income (2,131 ) (2,420 ) (4,543 ) (4,806 ) Interest and other income (1,092 ) (1,810 ) (2,425 ) (3,372 ) Income on deferred compensation plans 639 (4,835 ) 9,180 (7,141 ) Property management expense 5,281 4,800 10,181 9,528 Fee and asset management expense 1,696 811 3,421 2,431 General and administrative expense 8,414 7,912 16,374 15,966 Interest expense 33,378 29,243 66,044 57,003 Depreciation and amortization 43,983 38,905 86,288 77,627 Amortization of deferred financing costs 592 901 1,329 1,812 Expense on deferred compensation plans (639 ) 4,835 (9,180 ) 7,141 (Gain) loss on sale of properties, including land - - (1,106 ) - Gains related to early retirement of debt (2,298 ) - (2,298 ) - Equity in income (loss) of joint ventures 474 (484 ) 521 (1,219 ) Distributions on perpetual preferred units 1,750 1,750 3,500 3,500 Income allocated to common units and other minority interests 1,126 1,343 2,395 2,130 Income tax expense 160 316 433 2,221 Income from discontinued operations (663 ) (2,800 ) (1,288 ) (5,447 ) Gain on sale of discontinued operations (8,549 ) (30,976 ) (14,676 ) (30,976 ) Income from discontinued operations allocated to common units   -     4,519     -     4,789   Net Operating Income (NOI) $ 99,415 $ 94,602 $ 196,359 $ 186,816   "Same Property" Communities $ 81,246 $ 80,579 $ 161,150 $ 159,483 Non-"Same Property" Communities 9,634 7,109 19,327 13,506 Development and Lease-Up Communities 726 (23 ) 1,004 (114 ) Redevelopment Communities 6,925 6,301 13,351 12,794 Dispositions / Other   884     636     1,527     1,147   Net Operating Income (NOI) $ 99,415 $ 94,602 $ 196,359 $ 186,816     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 of joint ventures, gain on sale of real estate assets, and income allocated to minority interests. The Company considers EBITDA to be an appropriate supplemental measure of operating performance to net income 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 to EBITDA is provided below:   Three Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 Net income $ 17,294 $ 42,592 $ 32,209 $ 55,629 Interest expense 33,463 29,398 66,239 57,306 Amortization of deferred financing costs 592 901 1,329 1,812 Depreciation and amortization 43,983 38,905 86,288 77,627 Distributions on perpetual preferred units 1,750 1,750 3,500 3,500 Income allocated to common units and other minority interests 1,126 1,343 2,395 2,130 Income tax expense 160 316 433 2,221 Real estate depreciation and amortization from discontinued operations 325 1,196 826 2,800 (Gain) loss on sale of properties, including land - - (1,106 ) - Gains related to early retirement of debt (2,298 ) - (2,298 ) - Equity in income(loss) of joint ventures 474 (484 ) 521 (1,219 ) Gain on sale of discontinued operations (8,549 ) (30,976 ) (14,676 ) (30,976 ) Income from discontinued operations allocated to common units   -     4,519     -     4,789   EBITDA $ 88,320 $ 89,460 $ 175,660 $ 175,619