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Camden Property Trust Announces Second Quarter 2022 Operating Results

·11-min read

HOUSTON, July 28, 2022--(BUSINESS WIRE)--Camden Property Trust (NYSE:CPT) (the "Company") announced today operating results for the three and six months ended June 30, 2022. Net Income Attributable to Common Shareholders ("EPS"), Funds from Operations ("FFO"), and Adjusted Funds from Operations ("AFFO") for the three and six months ended June 30, 2022 are detailed below. A reconciliation of EPS to FFO is included in the financial tables accompanying this press release.

Three Months Ended

Six Months Ended

June 30,

June 30,

Per Diluted Share

2022

2021

2022

2021

EPS (1)

$4.54

$0.30

$5.37

$0.61

FFO

$1.64

$1.28

$3.14

$2.52

AFFO

$1.44

$1.10

$2.81

$2.21

(1) For the three and six months ended June 30, 2022, EPS included a non-cash gain on acquisition of unconsolidated joint venture interests of approximately $4.32 and $4.37 per diluted share, respectively.

Quarterly Growth

Sequential Growth

Year-To-Date Growth

Same Property Results

2Q22 vs. 2Q21

2Q22 vs. 1Q22

2022 vs. 2021

Revenues

12.1%

3.2%

11.6%

Expenses

4.7%

2.7%

4.2%

Net Operating Income ("NOI")

16.5%

3.5%

16.0%

Same Property Results

2Q22

2Q21

1Q22

Occupancy

96.9%

96.9%

97.1%

For 2022, the Company defines same property communities as communities wholly-owned and stabilized since January 1, 2021, excluding communities under redevelopment and properties held for sale. A reconciliation of net income to NOI and same property NOI is included in the financial tables accompanying this press release.

Operating Statistics - Same Property Portfolio

New Lease and Renewal Data - Date Signed (1)

July 2022*

July 2021

2Q22

2Q21

New Lease Rates

13.5%

18.4%

16.3%

9.1%

Renewal Rates

12.7%

11.0%

14.4%

6.7%

Blended Rates

13.1%

14.5%

15.3%

7.9%

New Lease and Renewal Data - Date Effective (2)

July 2022*

July 2021

2Q22

2Q21

New Lease Rates

15.5%

13.0%

15.3%

5.2%

Renewal Rates

14.6%

6.6%

13.4%

4.1%

Blended Rates

15.1%

9.7%

14.3%

4.7%

*Data as of July 25, 2022

(1) Average change in same property new lease and renewal rates vs. expiring lease rates when signed.

(2) Average change in same property new lease and renewal rates vs. expiring lease rates when effective.

Occupancy and Turnover Data

July 2022*

July 2021

2Q22

2Q21

Occupancy

96.7%

97.1%

96.9%

96.9%

Annualized Gross Turnover

59%

60%

53%

54%

Annualized Net Turnover

52%

50%

46%

45%

*Data as of July 25, 2022

Development Activity

During the quarter, construction was completed at Camden Buckhead in Atlanta, GA and construction commenced at Camden Village District in Raleigh, NC. Leasing began at Camden Tempe II in Tempe, AZ and leasing continued at Camden Hillcrest in San Diego, CA.

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

Total

Total

% Leased

Community Name

Location

Homes

Cost

as of 7/25/2022

Camden Buckhead

Atlanta, GA

366

$162.2

85%

Camden Hillcrest

San Diego, CA

132

91.7

82%

Total

498

$253.9

Development Communities - Construction Ongoing ($ in millions)

Total

Total

% Leased

Community Name

Location

Homes

Estimated Cost

as of 7/25/2022

Camden Tempe II

Tempe, AZ

397

$115.0

10%

Camden Atlantic

Plantation, FL

269

100.0

Camden NoDa

Charlotte, NC

387

105.0

Camden Durham

Durham, NC

420

145.0

Camden Village District

Raleigh, NC

369

138.0

Total

1,842

$603.0

Acquisition/Disposition Activity

During the quarter, Camden acquired two land parcels for a combined acreage of 42.6 in Charlotte, NC and a 3.8-acre land parcel in Nashville, TN for future development purposes.

In April 2022, Camden purchased the remaining 68.7% ownership interests in two discretionary Funds for cash consideration of approximately $1.1 billion, after adjusting for our assumption of approximately $515 million of existing secured mortgage debt of the Funds, which remains outstanding. The gross asset valuation of these communities acquired was approximately $2.1 billion and the Company now owns 100% of the interests in 7,247 apartment homes. In conjunction with this acquisition, we recognized a non-cash, non-FFO gain of approximately $474 million which represented a step-up to fair value on our previously held 31.3% equity interests in the Funds.

Capital Markets Transactions

During the quarter, the Company issued 2,900,000 common shares in a public equity offering and received approximately $490.3 million in net proceeds. The Company used the net proceeds to reduce borrowings under its $900 million unsecured line of credit.

Liquidity Analysis

As of June 30, 2022, Camden had approximately $907.8 million of liquidity comprised of approximately $72.1 million in cash and cash equivalents, and $835.7 million of availability under its unsecured credit facility. At quarter-end, the Company had $247.7 million left to fund under its existing wholly-owned development pipeline and no scheduled debt maturities until 3Q22.

Earnings Guidance

Camden updated its earnings guidance for 2022 based on its current and expected views of the apartment market and general economic conditions, and provided guidance for third quarter 2022 as detailed below. Expected EPS excludes, gains, if any, from real estate transactions not completed by quarter end.

3Q22

2022

2022 Midpoint

Per Diluted Share

Range

Range

Current

Prior

Change

EPS

$0.24 - $0.28

$5.87 - $6.07

$5.97

$1.37

$4.60

FFO

$1.68 - $1.72

$6.48 - $6.68

$6.58

$6.51

$0.07

2022

2022 Midpoint

Same Property Growth

Range

Current

Prior

Change

Revenues

10.75% - 11.75%

11.25%

10.25%

1.00%

Expenses

4.50% - 5.50%

5.00%

4.20%

0.80%

NOI

13.75% - 15.75%

14.75%

13.75%

1.00%

Camden intends to update its earnings guidance to the market on a quarterly basis. Additional information on the Company’s 2022 financial outlook and a reconciliation of expected EPS to expected FFO are included in the financial tables accompanying this press release.

Conference Call

Friday, July 29, 2022 at 10:00 AM CT
Domestic Dial-In Number: (888) 317-6003; International Dial-In Number: (412) 317-6061
Passcode: 6983346
Webcast: https://event.choruscall.com/mediaframe/webcast.html?webcastid=Hsqycs9l

The Company strongly encourages interested parties to join the call via webcast in order to view any associated videos, slide presentations, etc. The dial-in phone line will be reserved for accredited analysts and investors who plan to pose questions to Management during the Q&A session of the call.

Supplemental financial information is available in the Investors section of the Company’s website under Earnings Releases or by calling Camden’s Investor Relations Department at (713) 354-2787.

Forward-Looking Statements

In addition to historical information, this press release contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates, and projections about the industry and markets in which Camden operates, management's beliefs, and assumptions made by management. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties which are difficult to predict. Factors which may cause the Company’s actual results or performance to differ materially from those contemplated by forward-looking statements are described under the heading "Risk Factors" in Camden’s Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission (SEC). Forward-looking statements made in today’s press release represent management’s current opinions at the time of this publication, and the Company assumes no obligation to update or supplement these statements because of subsequent events.

About Camden

Camden Property Trust, an S&P 500 Company, is a real estate company primarily engaged in the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. Camden owns interests in and operates 171 properties containing 58,425 apartment homes across the United States. Upon completion of 5 properties currently under development, the Company’s portfolio will increase to 60,267 apartment homes in 176 properties. Camden has been recognized as one of the 100 Best Companies to Work For® by FORTUNE magazine for 15 consecutive years, most recently ranking #26.

For additional information, please contact Camden’s Investor Relations Department at (713) 354-2787 or access our website at camdenliving.com.

CAMDEN

OPERATING RESULTS
(In thousands, except per share amounts)

(Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

OPERATING DATA

Property revenues (a)

$

361,716

$

276,523

$

673,075

$

544,091

Property expenses

Property operating and maintenance

79,418

65,544

149,855

129,023

Real estate taxes

48,393

37,427

88,266

74,880

Total property expenses

127,811

102,971

238,121

203,903

Non-property income

Fee and asset management

1,190

2,263

3,640

4,469

Interest and other income

662

257

2,793

589

Income/(loss) on deferred compensation plans

(14,678

)

6,400

(22,175

)

10,026

Total non-property income/(loss)

(12,826

)

8,920

(15,742

)

15,084

Other expenses

Property management

7,282

6,436

14,496

12,560

Fee and asset management

359

1,019

1,534

2,151

General and administrative

15,734

15,246

30,524

29,468

Interest

29,022

24,084

53,564

47,728

Depreciation and amortization

157,734

99,586

270,872

192,727

Expense/(benefit) on deferred compensation plans

(14,678

)

6,400

(22,175

)

10,026

Total other expenses

195,453

152,771

348,815

294,660

Gain on sale of operating property

36,372

Gain on acquisition of unconsolidated joint venture interests

474,146

474,146

Equity in income of joint ventures

2,198

3,048

4,112

Income from continuing operations before income taxes

499,772

31,899

583,963

64,724

Income tax expense

(886

)

(460

)

(1,476

)

(812

)

Net income

498,886

31,439

582,487

63,912

Less income allocated to non-controlling interests

(1,571

)

(1,260

)

(4,427

)

(2,386

)

Net income attributable to common shareholders

$

497,315

$

30,179

$

578,060

$

61,526

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Net income

$

498,886

$

31,439

$

582,487

$

63,912

Other comprehensive income

Reclassification of net loss on cash flow hedging activities, prior service cost and net loss on post retirement obligation

369

372

738

745

Comprehensive income

499,255

31,811

583,225

64,657

Less income allocated to non-controlling interests

(1,571

)

(1,260

)

(4,427

)

(2,386

)

Comprehensive income attributable to common shareholders

$

497,684

$

30,551

$

578,798

$

62,271

PER SHARE DATA

Total earnings per common share - basic

$

4.59

$

0.30

$

5.41

$

0.61

Total earnings per common share - diluted

4.54

0.30

5.37

0.61

Weighted average number of common shares outstanding:

Basic

108,106

100,701

106,729

100,127

Diluted

109,745

100,767

108,393

100,197

(a) We elected to combine lease and non-lease components and thus present rental revenue in a single line item in our consolidated statements of income and comprehensive income. For the three months ended June 30, 2022, we recognized $361.7 million of property revenue which consisted of approximately $320.9 million of rental revenue and approximately $40.8 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. This compares to property revenue of $276.5 million recognized for the three months ended June 30, 2021, made up of approximately $242.9 million of rental revenue and approximately $33.6 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. For the six months ended June 30, 2022, we recognized $673.1 million of property revenue which consisted of approximately $597.9 million of rental revenue and approximately $75.2 million of amounts received under contractual terms for other services considered to be non-lease contracts. This compares to the $544.1 million of property revenue recognized for the six months ended June 30, 2021, made up of approximately $478.6 million of rental revenue and approximately $65.5 million of amounts received under contractual terms for other services considered to be non-lease components within our lease contracts. Revenue related to utility rebilling to residents was $9.4 million and $7.6 million for the three months ended June 30, 2022 and 2021, respectively and was $17.7 million and $15.3 million for the six months ended June 30, 2022 and 2021, respectively.

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 June 30,

Six Months Ended June 30,

2022

2021

2022

2021

FUNDS FROM OPERATIONS

Net income attributable to common shareholders

$

497,315

$

30,179

$

578,060

$

61,526

Real estate depreciation and amortization

155,206

97,122

265,743

187,829

Adjustments for unconsolidated joint ventures

2,630

2,709

5,229

Income allocated to non-controlling interests

1,571

1,260

4,427

2,386

Gain on sale of operating property

(36,372

)

Gain on acquisition of unconsolidated joint venture interests

(474,146

)

(474,146

)

Funds from operations

$

179,946

$

131,191

$

340,421

$

256,970

Less: recurring capitalized expenditures (a)

(21,430

)

(18,808

)

(35,681

)

(31,488

)

Adjusted funds from operations

$

158,516

$

112,383

$

304,740

$

225,482

PER SHARE DATA

Funds from operations - diluted

$

1.64

$

1.28

$

3.14

$

2.52

Adjusted funds from operations - diluted

1.44

1.10

2.81

2.21

Distributions declared per common share

0.94

0.83

1.88

1.66

Weighted average number of common shares outstanding:

FFO/AFFO - diluted

109,745

102,444

108,393

101,896

PROPERTY DATA

Total operating properties (end of period) (b)

171

169

171

169

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

58,425

57,611

58,425

57,611

Total operating apartment homes (weighted average)

58,282

49,887

54,608

49,663

(a) Capital expenditures necessary to help preserve the value of and maintain the functionality at our communities.

(b) Includes joint ventures and properties held for sale, if any.

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,
2022

Mar 31,
2022

Dec 31,
2021

Sep 30,
2021

Jun 30,
2021

ASSETS

Real estate assets, at cost

Land

$

1,695,118

$

1,343,209

$

1,349,594

$

1,317,431

$

1,285,634

Buildings and improvements

10,440,037

8,651,674

8,624,734

8,536,620

8,288,865

12,135,155

9,994,883

9,974,328

9,854,051

9,574,499

Accumulated depreciation

(3,572,764

)

(3,436,969

)

(3,358,027

)

(3,319,206

)

(3,219,085

)

Net operating real estate assets

8,562,391

6,557,914

6,616,301

6,534,845

6,355,414

Properties under development, including land

581,844

488,100

474,739

428,622

443,100

Investments in joint ventures

13,181

13,730

17,788

18,415

Total real estate assets

9,144,235

7,059,195

7,104,770

6,981,255

6,816,929

Accounts receivable – affiliates

13,258

13,258

18,664

18,686

19,183

Other assets, net (a)

249,865

254,763

234,370

252,079

241,687

Cash and cash equivalents

72,095

1,129,716

613,391

428,226

374,556

Restricted cash

6,563

5,778

5,589

5,321

4,762

Total assets

$

9,486,016

$

8,462,710

$

7,976,784

$