Business Context and Reporting Period
Company: Camden Property Trust
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: September 30, 2001
Business Overview: Camden Property Trust is a real estate investment trust (REIT) engaged in the ownership, development, construction, and management of multifamily apartment communities. As of September 30, 2001, the company owned interests in, operated, or was developing 146 multifamily properties containing 51,883 apartment homes across nine states.
Key Financial Metrics
| Metric (Nine Months Ended Sep 30, 2001) | Value (in thousands) |
|---|---|
| Total Revenues | $322,132 |
| Net Income | $53,776 |
| Net Income to Common Shareholders | $51,231 |
| Diluted EPS | $1.24 |
| Funds from Operations (Diluted) | $124,430 |
| Net Cash Provided by Operating Activities | $152,012 |
| Total Debt (Notes Payable) | $1,192,188 |
| Cash and Cash Equivalents | $3,213 |
| Available Credit Facility | $329,000 |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased 6.5% to $322.1 million for the nine months ended September 30, 2001, compared to $302.4 million in the prior year period. Rental income rose 2.4% to $280.1 million.
- Net Income Decline: Net income decreased 8.1% to $53.8 million from $58.5 million in the prior year. This decline was primarily driven by a significant reduction in gains from property sales ($2.5 million in 2001 vs. $18.4 million in 2000).
- Operating Performance: Net Operating Income (NOI) increased 3.5% to $184.5 million. Rental income per apartment home per month increased 6.3% to $686.
- Debt Structure: Total notes payable increased to $1.19 billion from $1.14 billion. The company issued $313.4 million in new senior unsecured notes during the period to reduce reliance on its unsecured line of credit.
- Portfolio Changes: The company disposed of three operating properties (1,264 homes) and 22.7 acres of land. It acquired one property (Camden Pecos Ranch) and completed construction on 1,000 new homes.
Guidance, Outlook, and Risks
- Capital Strategy: Management intends to maintain a conservative capital structure, extending debt maturities and managing interest rate exposure. The company plans to fund growth through equity, debt, and property dispositions.
- Development Pipeline: Construction continues on Camden Harbour View in Long Beach (538 homes), expected to begin leasing in Q3 2002. The company is also developing urban land projects in Dallas, Houston, and Long Beach.
- Dividends: A quarterly dividend of $0.61 per share was declared for Q3 2001, representing an annualized rate of $2.44 per share.
- Risks and Contingencies:
- Legal Proceedings: A consent decree was executed regarding Fair Housing Act compliance for nine properties, requiring retrofits and educational programs over five years. Management does not expect material financial impact.
- Technology Investments: The company wrote off $1.1 million in investments related to BroadBand Residential Inc. during the period.
- Market Risk: Exposure to interest rate fluctuations on variable-rate debt, though the weighted average rate on floating debt was 4.09%.
Investor Verification Checklist
- Debt Maturity Profile: Verify the scheduled principal repayments, noting $51.1 million due in 2001 and $325.8 million due in 2004.
- Disposition Gains: Confirm the impact of the reduced gain on sales of properties ($2.5M vs $18.4M prior year) on future earnings projections.
- Development Costs: Review the $120 million aggregate cost for the Camden Harbour View project and funding sources.
- Third-Party Advances: Assess the $87.9 million in advances to third-party development properties and the recent purchase of three pre-development projects.
- Occupancy Rates: Monitor the 94.6% overall average occupancy and the lease-up progress of newly completed properties (The Park at Farmers Market and The Park at Crown Valley).