Business Context and Reporting Period
Company: Camden Property Trust
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: June 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 June 30, 2001, the company owned interests in, operated, or was developing 147 properties containing 52,590 apartment homes across Sunbelt and Midwestern markets.
Key Financial Metrics
| Metric | Six Months Ended June 30, 2001 | Six Months Ended June 30, 2000 |
|---|---|---|
| Total Revenues | $209.9 million | $200.0 million |
| Net Income | $35.7 million | $28.0 million |
| Net Income to Common Shareholders | $33.1 million | $23.3 million |
| Diluted EPS | $0.82 | $0.58 |
| Funds from Operations (Diluted) | $82.1 million | $76.9 million |
| Net Cash Provided by Operating Activities | $88.2 million | $72.6 million |
| Total Debt (Notes Payable) | $1,195.5 million | $1,138.1 million |
| Cash and Cash Equivalents | $2.6 million | $3.0 million |
| Dividends Declared (Common) | $1.22 per share | $1.125 per share |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased 5.0% year-over-year, driven by a 2.3% increase in rental income and growth in fee and asset management income.
- Profitability: Net income to common shareholders rose 42.4% to $33.1 million, primarily due to higher net operating income and gains on property sales.
- Operating Efficiency: Net operating income increased 3.9% to $122.8 million. Rental income per apartment home per month increased 6.7% to $683.
- Debt Structure: Total notes payable increased to $1,195.5 million. The company issued $200 million in senior unsecured notes in February 2001 to reduce borrowings under its unsecured line of credit.
- Portfolio Activity: The company acquired Camden Pecos Ranch (272 units) for $20.6 million. Dispositions included 22.7 acres of land in Houston ($8.6 million proceeds) and two operating properties in North Carolina (gains of $2.6 million).
- Unusual Items: The company recorded a $1.1 million impairment provision for technology investments related to BroadBand Residential Inc.
Guidance, Outlook, and Risks
- Development Pipeline: Construction continues on two properties totaling 918 units (The Park at Crown Valley and Camden Harbour View). Two newly developed properties (952 units) are in lease-up.
- Liquidity Strategy: The company maintains a $400 million unsecured line of credit with $230 million available as of June 30, 2001. Management intends to fund growth through equity, debt, and selective dispositions.
- Shareholder Returns: A quarterly dividend of $0.61 per share was declared for Q2 2001. The company continues a securities repurchase program, having spent $180.9 million on repurchases as of June 30, 2001.
- Legal Contingencies: A consent decree was executed in January 2001 regarding Fair Housing Act compliance for nine properties. Management does not expect the associated retrofit costs to have a material financial impact.
- Accounting Changes: The company adopted SFAS No. 133 (Derivatives) with no material impact. Future adoption of SFAS No. 141 (Business Combinations) and SFAS No. 142 (Goodwill) is not expected to be material.
Investor Verification Checklist
- Debt Maturity Profile: Verify the scheduled principal repayments, noting $52.5 million due in 2001 and significant maturities in 2003 ($294.9 million) and 2004 ($234.6 million).
- Technology Investment Exposure: Review the status of the $5.0 million invested in e-commerce companies and the $3.3 million in outstanding funding commitments following the $1.1 million write-off.
- Development Costs: Monitor the $178.5 million aggregate cost for the two properties currently under development and the timeline for stabilization.
- Occupancy Trends: Confirm the 94.4% overall average occupancy rate and the lease-up progress of the two properties currently in that phase.
- Line of Credit Utilization: Track the usage of the $400 million credit facility, which was reduced by proceeds from new note issuances but remains a primary liquidity source.