o | the results of our efforts to implement our property development, construction and acquisition strategies; |
o | the effects of economic conditions, including rising interest rates; |
o | our ability to generate sufficient cash flows; |
o | the failure to qualify as a real estate investment trust; |
o | the costs of our capital and debt; |
o | changes in our capital requirements; |
o | the actions of our competitors and our ability to respond to those actions; |
o | changes in governmental regulations, tax rates and similar matters; and |
o | environmental uncertainties and disasters. |
Property and Location | Number of Apartment Homes | Date of Acquisition | Status as of December 31, 2002 | Year Built | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Camden Bay, Phase II | ||||||||||||||||||||||||||||||||||
Tampa, FL | 352 | 2Q02 | Stabilized | 2001 | ||||||||||||||||||||||||||||||
Camden San Paloma | ||||||||||||||||||||||||||||||||||
Phoenix, AZ | 324 | 2Q02 | Stabilized | 1993/1994 | ||||||||||||||||||||||||||||||
Camden Providence Lakes | ||||||||||||||||||||||||||||||||||
Tampa, FL | 260 | 4Q02 | Stabilized | 1996 | ||||||||||||||||||||||||||||||
Camden Ybor City | ||||||||||||||||||||||||||||||||||
Tampa, FL | 454 | 2Q02 | In lease-up | 2002 | ||||||||||||||||||||||||||||||
Camden Tuscany | ||||||||||||||||||||||||||||||||||
San Diego, CA | 160 | 4Q02 | Under construction | 2003 | ||||||||||||||||||||||||||||||
Camden Sierra at Otay Ranch | ||||||||||||||||||||||||||||||||||
San Diego, CA | 422 | 4Q02 | Under construction | 2003 | ||||||||||||||||||||||||||||||
Total apartment homes acquired | 1,972 | |||||||||||||||||||||||||||||||||
Dispositions
Property and Location | Number of Apartment Homes | Date of Disposition | Year Built | |||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oasis Plaza (a) | ||||||||||||||||||||||||||||||||||
Las Vegas, NV | 300 | 1Q02 | 1976 | |||||||||||||||||||||||||||||||
Camden Bluffs | ||||||||||||||||||||||||||||||||||
Reno, NV | 450 | 4Q02 | 1997 | |||||||||||||||||||||||||||||||
Camden Harbor | ||||||||||||||||||||||||||||||||||
Las Vegas, NV | 336 | 4Q02 | 1996 | |||||||||||||||||||||||||||||||
Camden Chasewood | ||||||||||||||||||||||||||||||||||
Houston, TX | 282 | 4Q02 | 1978 | |||||||||||||||||||||||||||||||
Camden Wallingford | ||||||||||||||||||||||||||||||||||
Houston, TX | 462 | 4Q02 | 1980 | |||||||||||||||||||||||||||||||
Camden Waterford | ||||||||||||||||||||||||||||||||||
Corpus Christi, TX | 580 | 4Q02 | 1976/1980 | |||||||||||||||||||||||||||||||
Total apartment homes sold | 2,410 | |||||||||||||||||||||||||||||||||
(a) | Oasis Plaza was held through one of our joint ventures. Our portion of the results of operations and the gain from this disposition is included in "Equity in income of joint ventures" in our consolidated statements of operations |
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Camden Bluffs and Camden Harbor were sold along with two adjacent undeveloped land parcels to an unaffiliated third party. The net proceeds from this sale totaled $69.7 million and were used to reduce indebtedness outstanding under our unsecured line of credit. The gain from the sale of these assets totaled $18,000. We will continue to manage these two properties and have provided $15.6 million in second lien financing to the third party owner which is included in “Notes receivable – other” in our consolidated balance sheets. Due to our continuing involvement in the operations of these two properties through ongoing management agreements, the historical operating results and gain on sale of these properties are reported in continuing operations. Camden Chasewood, Camden Wallingford and Camden Waterford were sold to an unaffiliated third party. The net proceeds from this sale totaled $51.8 million. The gain recognized from the sale of these communities totaled $29.2 million. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the operating results and gain on sale of these properties have been included in discontinued operations in our statements of operations for all periods presented. In addition to our property acquisitions, during 2002, we acquired approximately 64.6 acres of undeveloped land in Northern Virginia, California and Texas for an aggregate of $38.4 million. We intend to develop up to 1,025 apartment homes on these parcels beginning in 2003.
Our multifamily property portfolio, excluding land we hold for future development and joint venture properties we do not manage, at December 31, 2002, 2001 and 2000 is summarized as follows: |
2002 | 2001 | 2000 | ||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apartment Homes | Properties | Apartment Homes | Properties | Apartment Homes | Properties | |||||||||||||||||||||||||||||||||||||||||||
Operating Properties | ||||||||||||||||||||||||||||||||||||||||||||||||
West Region | ||||||||||||||||||||||||||||||||||||||||||||||||
Las Vegas, Nevada (a) | 10,017 | 35 | 10,653 | 37 | 10,653 | 37 | ||||||||||||||||||||||||||||||||||||||||||
Denver, Colorado (a) | 2,529 | 8 | 2,529 | 8 | 2,529 | 8 | ||||||||||||||||||||||||||||||||||||||||||
Phoenix, Arizona | 2,433 | 8 | 2,109 | 7 | 1,837 | 6 | ||||||||||||||||||||||||||||||||||||||||||
Southern California | 1,917 | 5 | 1,653 | 4 | 1,272 | 3 | ||||||||||||||||||||||||||||||||||||||||||
Tucson, Arizona | 821 | 2 | 821 | 2 | 821 | 2 | ||||||||||||||||||||||||||||||||||||||||||
Reno, Nevada | -- | -- | 450 | 1 | 450 | 1 | ||||||||||||||||||||||||||||||||||||||||||
Central Region | ||||||||||||||||||||||||||||||||||||||||||||||||
Dallas, Texas (b) | 8,359 | 23 | 8,359 | 23 | 8,447 | 23 | ||||||||||||||||||||||||||||||||||||||||||
Houston, Texas | 6,446 | 14 | 7,190 | 16 | 7,190 | 16 | ||||||||||||||||||||||||||||||||||||||||||
St. Louis, Missouri | 2,123 | 6 | 2,123 | 6 | 2,123 | 6 | ||||||||||||||||||||||||||||||||||||||||||
Austin, Texas | 1,745 | 6 | 1,745 | 6 | 1,745 | 6 | ||||||||||||||||||||||||||||||||||||||||||
Corpus Christi, Texas | 1,284 | 3 | 1,663 | 4 | 1,663 | 4 | ||||||||||||||||||||||||||||||||||||||||||
Kansas City, Missouri | 596 | 1 | 596 | 1 | 596 | 1 | ||||||||||||||||||||||||||||||||||||||||||
East Region | ||||||||||||||||||||||||||||||||||||||||||||||||
Tampa, Florida | 6,089 | 13 | 5,023 | 11 | 5,023 | 11 | ||||||||||||||||||||||||||||||||||||||||||
Orlando, Florida | 2,804 | 6 | 2,804 | 6 | 2,804 | 6 | ||||||||||||||||||||||||||||||||||||||||||
Charlotte, North Carolina (b) | 1,659 | 6 | 1,659 | 6 | 1,879 | 7 | ||||||||||||||||||||||||||||||||||||||||||
Louisville, Kentucky | 1,448 | 5 | 1,448 | 5 | 1,448 | 5 | ||||||||||||||||||||||||||||||||||||||||||
Greensboro, North Carolina (b) | 520 | 2 | 520 | 2 | 856 | 3 | ||||||||||||||||||||||||||||||||||||||||||
Total Operating Properties | 50,790 | 143 | 51,345 | 145 | 51,336 | 145 | ||||||||||||||||||||||||||||||||||||||||||
Properties Under Development | ||||||||||||||||||||||||||||||||||||||||||||||||
West Region | ||||||||||||||||||||||||||||||||||||||||||||||||
Southern California | 1,120 | 3 | 802 | 2 | 918 | 2 | ||||||||||||||||||||||||||||||||||||||||||
Central Region | ||||||||||||||||||||||||||||||||||||||||||||||||
Houston, Texas | 364 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||
Dallas, Texas | 620 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||
Total Properties Under Development | 1,484 | 4 | 802 | 2 | 1,538 | 3 | ||||||||||||||||||||||||||||||||||||||||||
Total Properties | 52,274 | 147 | 52,147 | 147 | 52,874 | 148 | ||||||||||||||||||||||||||||||||||||||||||
Less: Joint Venture Properties (a) (b) | 4,939 | 19 | 5,239 | 20 | 6,503 | 23 | ||||||||||||||||||||||||||||||||||||||||||
Total Properties Owned 100% | 47,335 | 128 | 46,908 | 127 | 46,371 | 125 | ||||||||||||||||||||||||||||||||||||||||||
(a) | Includes properties held in joint ventures as follows: one property with 320 apartment homes in Colorado in which we own a 50% interest, the remaining interest is owned by an unaffiliated private investor; and 18 properties with 4,619 apartment homes (19 properties and 4,919 apartment homes at December 31, 2001 and 2000) in Las Vegas in which we own a 20% interest, the remaining interest is owned by an unaffiliated private investor. |
(b) | In addition to the properties listed in footnote (a), the December 31, 2000 balances included properties held in joint ventures as follows: one property with 708 apartment homes in Dallas and two properties with 556 apartment homes in North Carolina in which we owned a 44% interest, the remaining interest was owned by unaffiliated private investors. |
At December 31, 2002, we had two completed properties in lease-up as follows: |
Property and Location | Number of Apartment Homes | % Leased at 3/01/03 | Date of Completion | Estimated Date of Stabilization | |||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Camden Ybor City | |||||||||||||||||||||||||||||||||
Tampa, FL | 454 | 82% | 1Q02 | 2Q03 | |||||||||||||||||||||||||||||
Camden Vineyards | |||||||||||||||||||||||||||||||||
Murrieta, CA | 264 | 84% | 4Q02 | 2Q03 |
At December 31, 2002, we had four development properties in various stages of construction as follows: ($ in millions) |
Property and Location | Number of Apartment Homes | Estimated Cost | Cost Incurred At 12/31/02 | Estimated Date of Completion | Estimated Date of Stabilization | |||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
In Lease-Up | ||||||||||||||||||||||||||||||||||||||||||
Camden Oak Crest | ||||||||||||||||||||||||||||||||||||||||||
Houston, TX | 364 | $ | 24.4 | $ | 19.3 | 3Q03 | 2Q04 | |||||||||||||||||||||||||||||||||||
Camden Sierra at Otay Ranch | ||||||||||||||||||||||||||||||||||||||||||
San Diego, CA | 422 | 60.0 | 56.7 | 1Q03 | 1Q04 | |||||||||||||||||||||||||||||||||||||
Under Construction | ||||||||||||||||||||||||||||||||||||||||||
Camden Tuscany | ||||||||||||||||||||||||||||||||||||||||||
San Diego, CA | 160 | 39.0 | 32.7 | 2Q03 | 3Q03 | |||||||||||||||||||||||||||||||||||||
Camden Harbor View | ||||||||||||||||||||||||||||||||||||||||||
Long Beach, CA | 538 | 127.0 | 102.2 | 3Q03 | 4Q04 | |||||||||||||||||||||||||||||||||||||
Total development properties | 1,484 | $ | 250.4 | $ | 210.9 | |||||||||||||||||||||||||||||||||||||
Where possible, we stage our construction to allow leasing and occupancy during the construction period which we believe minimizes the duration of the lease-up period following completion of construction. Our accounting policy related to properties in the development and leasing phase is that all operating expenses, excluding depreciation, associated with occupied apartment homes are expensed against revenues generated by those apartment homes. All construction and carrying costs are capitalized and reported on the balance sheet in “Properties under development, including land” until individual buildings are substantially completed. Carrying charges are principally interest and real estate taxes which are capitalized as part of properties under development. Upon substantial completion of each building, the total cost of that building and the associated land is transferred to “Buildings and improvements” and “Land”, respectively and the assets are depreciated over their estimated useful lives using the straight-line method of depreciation. Upon substantial completion, all apartment homes are considered operating and we begin expensing all items that were previously considered carrying costs. If an event or change in circumstance indicates a potential impairment in the value of a property has occurred, our policy is to assess any potential impairment by making a comparison of the current and projected operating cash flows for such property over its remaining useful life, on an undiscounted basis, to the carrying amount of the property. If such carrying amounts were in excess of the estimated projected operating cash flows of the property, we would recognize an impairment loss equivalent to an amount required to adjust the carrying amount to its estimated fair market value. Our consolidated financial statements at December 31, 2002 included $285.6 million related to properties under development, including land. Of this amount, $156.8 million relates to our four development projects currently under construction. Additionally, we have $128.8 million invested in land held for future development. Included in this amount is $72.7 million related to projects we expect to begin constructing throughout 2003. We also have $35.9 million invested in land tracts adjacent to current development projects which are being utilized in conjunction with those projects. Upon completion of these current development projects we expect to utilize this land to further develop apartment homes in these areas. We may also sell certain parcels of these undeveloped land tracts to third parties for commercial and retail development. We have completed construction on 17 townhomes in the downtown Dallas area at a total cost of approximately $5.5 million. During 2002, we sold eight units at a total sales price of approximately $2.5 million. As of December 31, 2002, four units remained unsold. The unsold units had a carrying value of $1.5 million which we believe approximates their fair value, less costs to sell, at December 31, 2002. The proceeds received from townhome sales are included in other income in our consolidated statements of operations. Other expenses in our consolidated statements of operations includes the construction cost and marketing expenses associated with the townhomes sold during the year.
At December 31, 2002 and 2001, our investment in various geographic areas, excluding investments in joint ventures and third party development properties, was as follows: (In thousands) |
2002 | 2001 | |||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
West Region | ||||||||||||||||||||||||||||||||||||||
Southern California | $ | 454,878 | 15 | % | $ | 255,106 | 9 | % | ||||||||||||||||||||||||||||||
Las Vegas, Nevada | 379,606 | 12 | 408,662 | 15 | ||||||||||||||||||||||||||||||||||
Denver, Colorado | 192,738 | 6 | 190,331 | 7 | ||||||||||||||||||||||||||||||||||
Phoenix, Arizona | 174,672 | 6 | 143,536 | 5 | ||||||||||||||||||||||||||||||||||
Tucson, Arizona | 34,825 | 1 | 34,230 | 1 | ||||||||||||||||||||||||||||||||||
Reno, Nevada | -- | -- | 44,413 | 2 | ||||||||||||||||||||||||||||||||||
Central Region | ||||||||||||||||||||||||||||||||||||||
Dallas, Texas | 407,313 | 13 | 400,484 | 15 | ||||||||||||||||||||||||||||||||||
Houston, Texas | 396,462 | 13 | 392,480 | 14 | ||||||||||||||||||||||||||||||||||
St. Louis, Missouri | 117,391 | 4 | 115,721 | 4 | ||||||||||||||||||||||||||||||||||
Austin, Texas | 72,110 | 2 | 70,959 | 3 | ||||||||||||||||||||||||||||||||||
Corpus Christi, Texas | 49,076 | 2 | 60,258 | 2 | ||||||||||||||||||||||||||||||||||
Kansas City, Missouri | 36,458 | 1 | 36,134 | 1 | ||||||||||||||||||||||||||||||||||
East Region | ||||||||||||||||||||||||||||||||||||||
Tampa, Florida | 338,999 | 11 | 246,450 | 9 | ||||||||||||||||||||||||||||||||||
Orlando, Florida | 169,544 | 6 | 164,485 | 6 | ||||||||||||||||||||||||||||||||||
Charlotte, North Carolina | 81,246 | 3 | 79,867 | 3 | ||||||||||||||||||||||||||||||||||
Louisville, Kentucky | 77,308 | 3 | 75,867 | 3 | ||||||||||||||||||||||||||||||||||
Northern Virginia | 20,017 | 1 | -- | -- | ||||||||||||||||||||||||||||||||||
Greensboro, North Carolina | 17,941 | 1 | 17,491 | 1 | ||||||||||||||||||||||||||||||||||
Total Properties | $ | 3,020,584 | 100 | % | $ | 2,736,474 | 100 | % | ||||||||||||||||||||||||||||||
Third Party Development Our construction division performs services for our internally developed construction pipeline, as well as construction management and general contracting services for third parties. We are currently under contract with third parties on projects ranging from $2.2 million to $19.7 million in construction costs. We earn fees on these projects ranging from 3% to 7% of the total contracted construction cost which we recognize when they are earned. Fees earned from third party construction projects totaled $2.7 million, $2.6 million and $800,000 for the years ended December 31, 2002, 2001 and 2000, respectively, and are included in the revenues section of our consolidated statements of operations under “Fee and asset management”. For projects where our fee is based on a fixed price, any cost overruns, as compared to the original budget, incurred during construction will reduce the fee generated on those projects. For any project where cost overruns are expected to be in excess of the fee generated on the project, we will recognize the total loss in the period in which the loss is first estimated. In addition to providing construction services to third parties, for selected properties in markets where we are interested in making investments, we may provide financing for a portion of the project costs. In connection with this program, we entered into agreements to develop, construct, and manage multifamily projects for unaffiliated third parties. We provided financing for a portion of each project in the form of a note receivable. Interest on these notes accrued at 10% annually and was recognized as earned. These notes were secured by second liens on the assets and partial guarantees by the third party owner. At December 31, 2001, our investments in third party development properties totaled $70.0 million. We had no investments in third party development properties at December 31, 2002.
During 2002, we purchased four properties, which we had previously developed for our third party customers, for an aggregate of $157.7 million, as we believe these investments fit our diversification strategy: Camden Bay which was completed and stabilized operations during 2001, Camden Ybor City which was completed during the first quarter 2002 and is expected to stabilize operations during 2003 and Camden Tuscany and Camden Sierra at Otay Ranch which are both currently under development. We expect to complete the construction and stabilize operations of these two development properties in early 2004. The owners of these properties had equity at risk sufficient enough to cover the costs associated with managing the development, construction and operation of these properties. The invested equity for all projects ranged from 6% to 10% of construction costs. The fees earned from all investments totaled $1.7 million, $2.2 million and $2.2 million for the years ended December 31, 2002, 2001 and 2000, respectively. During 2001, we purchased one completed and stabilized third party development project and three projects which were in the pre-development stage, as they fit our diversification strategy. All net fees and interest, totaling $1.0 million, previously recognized on the pre-development projects were reversed at the time of purchase. Liquidity and Capital ResourcesFinancial Structure We intend to maintain what management believes to be a conservative capital structure by: |
(i) | using what management believes is a prudent combination of debt and common and preferred equity; |
(ii) | extending and sequencing the maturity dates of our debt where possible; |
(iii) | managing interest rate exposure using what management believes are prudent levels of fixed and floating rate debt; |
(iv) | borrowing on an unsecured basis in order to maintain a substantial number of unencumbered assets; and |
(v) | maintaining conservative coverage ratios. |
Our interest expense coverage ratio, net of capitalized interest, was 3.3, 3.4 and 3.4 times for the years ended December 31, 2002, 2001 and 2000, respectively. At December 31, 2002, 2001 and 2000, 83.8%, 80.4% and 75.6% respectively, of our properties (based on invested capital) were unencumbered. Our weighted average maturity of debt, excluding our line of credit, was 6.7 years, 6.9 years and 5.6 years at December 31, 2002, 2001 and 2000, respectively. Liquidity We intend to meet our short-term liquidity requirements through cash flows provided by operations, our unsecured line of credit discussed in the “Financial Flexibility” section and other short-term borrowings. We expect that our ability to generate cash will be sufficient to meet our short-term liquidity needs, which include: |
(i) | operating expenses; |
(ii) | current debt service requirements; |
(iii) | recurring capital expenditures; |
(iv) | initial funding of property developments and acquisitions; |
(v) | common share repurchases; and |
(vi) | distributions on our common and preferred equity. |
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We consider our long-term liquidity requirements to be the repayment of maturing debt, including borrowings under our unsecured line of credit which were used to fund development and acquisition activities. We intend to meet our long-term liquidity requirements through the use of common and preferred equity capital, senior unsecured debt and property dispositions. We intend to continue rebalancing our portfolio by selectively disposing of assets that management believes are highly capital intensive, have a lower projected net operating income growth rate than the overall portfolio, or no longer conform to our operating and investment strategies. We expect to use the proceeds from any such sales for reinvestment in acquisitions or new developments, reduction of debt or share repurchases. We intend to concentrate our growth efforts toward selective development and acquisition opportunities in our current markets, and through the acquisition of existing operating properties and the development of properties in selected new markets. During the year ended December 31, 2002, we incurred $124.2 million in development costs and $248.8 million in acquisition costs. We are developing four properties at a projected aggregate cost of approximately $250.4 million, $210.9 million of which had been incurred through 2002. At year end, we were obligated for approximately $27.2 million under construction contracts related to these projects (a substantial amount of which we expect to fund with debt). We intend to fund our developments and acquisitions through a combination of equity capital, partnership units, medium-term notes, construction loans, other debt securities and our unsecured line of credit. Net cash provided by operating activities totaled $184.9 million for 2002, a decrease of $10.8 million, or 5.5%, from 2001. This decrease was attributable to a $5.2 million decrease in net operating income from the real estate portfolio for 2002 as compared to the same period in 2001. Equity in income of joint ventures for 2002 decreased $8.2 million from 2001. This decrease was due to the sale in 2001 of three properties held in a joint venture. Fee and asset management and other income decreased a total of $2.4 million from the prior year, due to declines in third party construction fees, interest earned on our investments in third party development properties and the sales of townhomes. Net cash used in investing activities totaled $223.8 million for the year ended 2002 compared to $119.6 million in 2001. For 2002, expenditures for acquisitions, property development and capital improvements totaled $248.8 million, $124.2 million and $33.7 million, respectively. These investments were offset by $127.8 million in net proceeds received from the sales of properties, including discontinued operations and townhomes, and a net decrease in investments in third party development properties of $70.0 million. Additionally, notes receivable increased $18.6 million due primarily to second lien financing related to property sales. For the year ended 2001, expenditures for acquisitions, property development and capital improvements were $20.6 million, $76.6 million and $26.7 million, respectively. These expenditures were offset by $10.4 million in net proceeds received from the sales of properties and townhomes. Net cash provided by financing activities totaled $36.1 million for the year ended 2002 compared to net cash used of $77.9 million for 2001. During 2002, we paid distributions totaling $123.4 million. We received net proceeds totaling $365.5 million from the issuance of senior unsecured and secured notes. The proceeds from these issuances were used to pay down borrowings under our line of credit, which decreased $61.0 million during the year, repay $85.1 million in notes payable and repurchase $62.7 million in common shares and units. For the year ended 2001, we paid distributions totaling $119.2 million. We also paid $26.9 million to repurchase our outstanding Series A preferred shares, and received net proceeds totaling $326.9 million from the issuance of senior unsecured and secured notes. The proceeds from these issuances were used to pay down borrowings under our line of credit, which decreased $39.0 million during the year, and repay $219.4 million in notes payable. In 1998, we began repurchasing our common equity securities under a program approved by our board of Trust Managers, which allowed us to repurchase or redeem up to $200 million of our securities through open market purchases and private transactions. In February 2002, our Board of Trust Managers approved repurchases or redemptions of an additional $50 million of securities, bringing the total to $250 million. Management consummates these repurchases and redemptions at the time when they believe that we can reinvest available cash flow into our own securities at yields which exceed those currently available on direct real estate investments. These repurchases were made and we expect that future repurchases, if any, will be made without incurring additional debt and, in management’s opinion, without reducing our financial flexibility. At December 31, 2002, we had repurchased approximately 8.8 million common shares and redeemed approximately 106,000 units convertible into common shares at a total cost of $243.6 million.
On January 17, 2003, we paid a distribution of $0.635 per share for the fourth quarter of 2002 to all holders of record of our common shares as of December 18, 2002, and paid an equivalent amount per unit to holders of common limited partnership units in Camden Operating, L.P. Total distributions to common shareholders and holders of common operating partnership units for the year ended December 31, 2002 were $2.54 per share or unit. We determine the amount of cash available for distribution to unitholders in accordance with the partnership agreements and have made and intend to continue to make distributions to the holders of common operating partnership units in amounts equivalent to the per share distributions paid to holders of common shares. We intend to continue to make shareholder distributions in accordance with REIT qualification requirements under the federal tax code. The dividend payout ratio, which is calculated by dividing distributions per share by funds from operations per share, was 75%, 69% and 64% for the years ended December 31, 2002, 2001 and 2000, respectively. Management intends to maintain a dividend rate that, when combined with expenditures for capital improvements, is less than our funds from operations. In April 2001, we announced that our issued and outstanding Series A preferred shares would be redeemed effective April 30, 2001 at a redemption price of $25.00 per share plus an amount equal to all accumulated, accrued and unpaid dividends as of April 30, 2001. Prior to redemption, 3.1 million Series A preferred shares were converted into 2.4 million common shares. The remaining Series A preferred shares were redeemed for an aggregate of $27.1 million, including unpaid dividends, using funds available under our unsecured line of credit. Our operating partnership has issued $100 million of 8.5% Series B Cumulative Redeemable Perpetual Preferred Units and $53 million of 8.25% Series C Cumulative Redeemable Perpetual Preferred Units. Distributions on the preferred units are payable quarterly in arrears. The preferred units are redeemable for cash by the operating partnership beginning in 2004 at par plus the amount of any accumulated and unpaid distributions. The preferred units are convertible beginning in 2009 by the holder into corresponding Series B or C Cumulative Redeemable Perpetual Preferred Shares. The preferred units are subordinate to present and future debt. Distributions on the preferred units totaled $12.9 million for the year ended December 31, 2002. As of December 31, 2002, we had unsecured debt totaling $1,177.3 million and secured mortgage loans totaling $249.7 million. Our indebtedness, excluding our unsecured line of credit, had a weighted average maturity of 6.7 years. Scheduled repayments on outstanding debt, including our line of credit, at December 31, 2002 is as follows: |
(In millions)
Year | Amount | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
2003 | $ | 67.2 | ||||||||||
2004 | 234.3 | |||||||||||
2005 | 61.0 | |||||||||||
2006 | 306.3 | |||||||||||
2007 | 165.5 | |||||||||||
2008 and thereafter | 592.7 | |||||||||||
Total | $ | 1,427.0 | ||||||||||
|
Type and Amount | Month of Issuance | Terms | Coupon Rate | Maturity Date | Interest Paid | Proceeds, Net of Costs | |||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
June 1 and | |||||||||||||||||||||||||||||||||||||||||||||||||
$150.0 million senior unsecured notes | 06/02 | Interest only | 5.875% | 06/01/07 | December 1 | $148.4 million | |||||||||||||||||||||||||||||||||||||||||||
May 30 and | |||||||||||||||||||||||||||||||||||||||||||||||||
$200.0 million senior unsecured notes | 11/02 | Interest only | 5.875% | 11/30/12 | November 30 | $197.8 million |
We may redeem the notes at any time at a redemption price equal to the principal amount and accrued interest, plus a make-whole provision. The notes are direct, senior unsecured obligations and rank equally with all other unsecured and unsubordinated indebtedness. We used the net proceeds to reduce indebtedness outstanding under our unsecured line of credit. During 2002, we paid off $34.5 million of maturing medium-term notes. These notes had interest rates ranging from 6.68% to 6.74% and were repaid using proceeds available under our unsecured line of credit. Additionally, we paid off two conventional mortgage notes totaling $27.5 million which had a weighted average interest rate of 8.4%. We incurred a prepayment penalty of $234,000 in connection with repayment of one of the notes. We repaid these mortgages using proceeds available under our unsecured line of credit, as the interest rates on the line of credit are significantly lower than the rates on the mortgage notes.
In addition to our repayments, we refinanced $18.0 million in tax exempt fixed rate mortgage notes which had a weighted average interest rate of 5.9%. The new tax exempt variable rate notes, which now total $17.1 million after repayment of $900,000, had a weighted average interest rate of 2.2% at December 31, 2002. At December 31, 2002, the weighted average interest rate on our floating rate debt was 2.6%. The joint ventures in which we have an interest have been funded with secured, non-recourse debt. We are not committed to any additional funding in relation to our joint ventures. Market RiskWe use fixed and floating rate debt to finance acquisitions, developments and maturing debt. These transactions expose us to market risk related to changes in interest rates. Management’s policy is to review our borrowings and attempt to mitigate interest rate exposure through the use of long term debt maturities and derivative instruments where appropriate. As of December 31, 2002, we had no derivative instruments outstanding. For fixed rate debt, interest rate changes affect the fair market value but do not impact net income to common shareholders or cash flows. Conversely, for floating rate debt, interest rate changes generally do not affect the fair market value but do impact net income to common shareholders and cash flows, assuming other factors are held constant. At December 31, 2002, we had fixed rate debt of $1,252.6 million and floating rate debt of $174.4 million. Holding other variables constant (such as debt levels), a one percentage point variance in interest rates would change the unrealized fair market value of the fixed rate debt by approximately $55.7 million. The net income to common shareholders and cash flows impact on the next year resulting from a one percentage point variance in interest rates on floating rate debt would be approximately $1.7 million, holding all other variables constant. Results of OperationsChanges in revenues and expenses related to our operating properties from period to period are primarily due to property developments, acquisitions, dispositions, and changes in the performance of the stabilized properties in our portfolio. Where appropriate, comparisons are made on a dollars-per-weighted-average-apartment home basis in order to adjust for changes in the number of apartment homes owned during each period. Selected operating results for the three years ended December 31, 2002 are as follows: |
2002 | 2001 | 2000 | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Rental income per apartment home per month | $ | 671 | $ | 691 | $ | 657 | ||||||||||||||||||||
Property operating and maintenance per apartment home per year | $ | 2,396 | $ | 2,336 | $ | 2,225 | ||||||||||||||||||||
Real estate taxes per apartment home per year | $ | 902 | $ | 900 | $ | 844 | ||||||||||||||||||||
Weighted average number of operating apartment homes | ||||||||||||||||||||||||||
45,465 | 44,164 | 45,177 | ||||||||||||||||||||||||
Weighted average occupancy, by region: | ||||||||||||||||||||||||||
West | 93.1 | % | 94.8 | % | 94.5 | % | ||||||||||||||||||||
Central | 92.5 | % | 94.7 | % | 94.0 | % | ||||||||||||||||||||
East | 90.2 | % | 92.2 | % | 93.0 | % | ||||||||||||||||||||
Total operating properties owned 100% | 92.2 | % | 94.2 | % | 94.0 | % |
2002 Compared to 2001Income from continuing operations decreased $16.2 million, or 27.6%, from $58.7 million to $42.5 million for the years ended December 31, 2001 and 2002, respectively. The weighted average number of apartment homes increased by 1,301 apartment homes, or 2.9%, from 44,164 to 45,465 for the years ended December 31, 2001 and 2002, respectively. The increase in the weighted average number of apartment homes was primarily due to the acquisition of 1,662 apartment homes and an increase in occupancy at our newly constructed properties. We had 122 and 124 wholly owned operating properties at December 31, 2001 and 2002, respectively. The weighted average number of apartment homes and the number of operating properties exclude the impact of our ownership interest in properties owned in joint ventures, and the impact from properties classified as discontinued operations.
Our apartment communities generate rental revenue and other income through the leasing of apartment homes. Revenues from our rental operations comprised 96% of our total revenues for the years ended December 31, 2001 and 2002. Our primary financial focus for our apartment communities is net operating income. Net operating income represents total property income less total property expenses. Net operating income decreased $5.2 million, or 2.1%, from $251.8 million to $246.6 million for the years ended December 31, 2001 and 2002, respectively. Net operating income from our stabilized communities, which represents properties owned and stabilized as of January 1, 2001, decreased $10.6 million, or 4.7% from $224.2 million to $213.6 million for the years ended December 31, 2001 and 2002, respectively. This decrease was offset by increases in net operating income from our newly developed and acquired properties. Rental income for the year ended December 31, 2002 decreased slightly from the year ended December 31, 2001. Rental income per apartment home per month decreased $20, or 2.9%, from $691 to $671 for the years ended December 31, 2001 and 2002, respectively. The decrease was primarily due to higher concessions granted and higher vacancy rates in the majority of our markets during 2002. Overall average occupancy decreased from 94.2% for the year ended December 31, 2001 to 92.2% for the year ended December 31, 2002. Other property income increased $1.9 million from $28.7 million to $30.6 million for the years ended December 31, 2001 and 2002, respectively, which represents a monthly increase of $2 per apartment home. This increase in other property income was primarily due to increases in miscellaneous property fees, as well as increases in cable and water revenues. Fee and asset management income for 2002 decreased $1.5 million from 2001. This decrease was primarily due to a reduction in fees earned from our investments in third party development projects in 2002. Other income for the year ended December 31, 2002 decreased $903,000 from the year ended December 31, 2001. This decrease was primarily due to decreases in interest income related to our investments in third party development projects partially offset by increases in revenues from townhome sales. Property operating and maintenance expenses increased $5.8 million or 5.6%, from $103.2 million to $108.9 million, and increased as a percent of total property income from 26.1% to 27.5%, for the years ended December 31, 2001 and 2002, respectively. The increase in property operating and maintenance expenses as a percent of property income was primarily due to a decline in rental income from our stabilized communities combined with an increase in operating expenses. On an annualized basis, property operating and maintenance expenses increased $60 per unit, or 2.6%. This increase is primarily due to increases in salary and benefit expenses and a 33.7% increase in property insurance expenses. Real estate taxes increased $1.2 million from $39.8 million to $41.0 million for the years ended December 31, 2001 and 2002, respectively, which represents an annual increase of $2 per apartment home. The increase was primarily due to increases in the valuations of properties and increases in property tax rates.
Property management expense, which represents regional supervision and accounting costs related to property operations, increased from $9.5 million for the year ended December 31, 2001 to $10.0 million for the year ended December 31, 2002. This increase is primarily due to increases in salary and benefit expenses. Fee and asset management expense, which represents expenses related to third party construction projects and property management for third parties, increased from $2.0 million for the year ended December 31, 2001 to $2.5 million for the year ended December 31, 2002. This increase is primarily due to increased costs associated with our third party construction division. See further discussion of our third party construction in our “Business” section. General and administrative expenses increased $1.9 million, from $12.5 million in 2001 to $14.4 million in 2002, and increased as a percent of revenues from 3.0% to 3.5%. The increase was primarily due to increases in salary and benefit expenses, including long-term incentive compensation costs, and increases in costs associated with pursuing potential transactions that were not consummated and information technology expenses. Other expenses which represent the construction costs associated with the townhomes sold during the year, increased $1.3 million, from $1.5 million for the year ended December 31, 2001 to $2.8 million for the year ended December 31, 2002. During 2002, we sold eight townhomes, compared to only five townhome sales in 2001. Gross interest cost before interest capitalized to development properties increased $1.7 million, or 2.0%, from $80.8 million for the year ended December 31, 2001 to $82.4 million for the year ended December 31, 2002. The overall increase in interest expense was due to higher average debt balances in 2002, offset by lower average interest rates on our floating rate debt. Interest capitalized remained constant at $10.9 million for the years ended December 31, 2002 and 2001. Depreciation and amortization increased from $99.6 million to $103.3 million. This increase was due to increases in real estate assets resulting from new development, property acquisitions and capital improvements during the past two years. Gain on sale of properties for the year ended December 31, 2002 totaled $359,000 due primarily to the sale of 6.7 acres of undeveloped land located in Houston. During 2002, we also sold two properties with 786 apartment homes and 58.6 acres of undeveloped land adjacent to those properties. We will continue to manage these two properties for a third party and therefore have included the gain resulting from this sale, which totaled approximately $18,000, in “Gain on sale of properties.” Gain on sale of properties for the year ended December 31, 2001 totaled $2.4 million due primarily to the sale of 22.7 acres of undeveloped land located in Houston. Equity in income of joint ventures decreased $8.2 million from the year ended 2001, primarily from gains recognized in one of our joint ventures from the sale of three properties totaling 1,264 apartment homes in 2001. The gains from these properties, which are located in North Carolina and Dallas, totaled $6.6 million for year ended December 31, 2001. During the year ended December 31, 2002, one property with 300 apartment homes was sold which resulted in a gain of $37,000. 2001 Compared to 2000Income from continuing operations decreased $13.1 million, or 18.3%, from $71.8 million to $58.7 million for the years ended December 31, 2000 and 2001, respectively. The weighted average number of apartment homes decreased by 1,013 apartment homes, or 2.2%, from 45,177 to 44,164 for the years ended December 31, 2000 and 2001, respectively. The decrease in the weighted average number of apartment homes is due to the sale of 3,599 apartment homes in the third quarter of 2000, offset by property development and acquisitions. We had 122 and 119 wholly owned operating properties at December 31, 2001 and 2000, respectively. The weighted average number of apartment homes and the operating properties exclude the impact of our ownership interest in properties owned in joint ventures, and the impact of properties classified as discontinued operations.
Our apartment communities generate rental revenue and other income through the leasing of apartment homes. Revenues from our rental operations comprised 96%and 97% of our total revenues for the years ended December 31, 2001 and 2000, respectively. Our primary financial focus for our apartment communities is net operating income. Net operating income represents total property revenues less total property expenses. Net operating income increased $7.6 million, or 3.1%, from $244.1 million to $251.8 million for the years ended December 31, 2000 and 2001, respectively. Rental income for the year ended December 31, 2001 increased $9.6 million, or 2.7% over the year ended December 31, 2000. Rental income per apartment home per month increased $33, or 5.0%, from $657 to $691 for the years ended December 31, 2000 and 2001, respectively. The increase was primarily due to increased revenue growth from the stabilized real estate portfolio and higher average rental rates on the completed development properties. Also, the properties sold in 2000 had average rental rates which were lower than the portfolio average. Overall average occupancy increased slightly from 94.0% for the year ended December 31, 2000 to 94.2% for the year ended December 31, 2001. Other property income increased $2.3 million from $26.4 million to $28.7 million for the years ended December 31, 2000 and 2001, respectively, which represents a monthly increase of $6 per apartment home. This increase in other property income was primarily due to increases from revenue sources such as telephone, cable, water, and other miscellaneous property fees. Fee and asset management income in 2001 increased $1.2 million over 2000. This increase is primarily due to fees earned on third party construction projects. Other income for the year ended December 31, 2001 increased $3.3 million over the year ended 2000. This increase was due to interest earned on our investments in third party development properties and from sales of five townhomes. Property operating and maintenance expenses increased $2.6 million or 2.6%, from $100.5 million to $103.2 million, but decreased slightly as a percent of total property income from 26.3% to 26.1%, for the years ended December 31, 2000 and 2001, respectively. On an annualized basis, property operating and maintenance expenses increased $111 per unit, or 5.0%. The increase in operating expense was due to increases in property insurance expenses as well as increases in salary and benefit expenses per unit. Our operating expense ratios decreased primarily as a result of operating efficiencies generated by our newly developed properties. The operating expense ratios for the properties sold during the third quarter of 2000 were higher than the portfolio average. Real estate taxes increased $1.6 million from $38.1 million to $39.8 million for the years ended December 31, 2000 and 2001, respectively, which represents an annual increase of $56 per apartment home. The increase was primarily due to increases in the valuations of properties and increases in property tax rates. Property management expense, which represents regional supervision and accounting costs related to property operations, increased from $9.4 million for the year ended December 31, 2001 to $9.5 million for the year ended December 31, 2002. This increase is primarily due to increases in salary and benefit expenses.
Fee and asset management expense, which represents expenses related to third party construction projects and property management for third parties, increased from $1.4 million for the year ended December 31, 2001 to $2.0 million for the year ended December 31, 2002. This increase is primarily due to increased activity associated with our third party construction division. See further discussion of our third party construction in our “Business” section. General and administrative expenses decreased $1.2 million, from $13.7 million in 2000 to $12.5 million in 2001, and decreased as a percent of revenues from 3.5% to 3.0%. The decrease was due to vesting of performance-based compensation awards in 2000, offset by increases in 2001 in salary and benefit expenses, information technology and branding initiatives and tax expenses on our taxable subsidiaries. During 2001, we recorded an impairment provision totaling $9.9 million, which represented the remaining carrying value of all of our technology investments at the time of write-off. This provision was recorded after management determined that the current capital markets for technology companies, and the expected future cash flows from these investments, made it difficult to support the carrying values of our technology investments. Gross interest cost before interest capitalized to development properties decreased from $84.3 million for the year ended December 31, 2000 to $80.8 million for the year ended December 31, 2001. This decrease is primarily due to lower average debt balances in 2001 arising from proceeds received from the dispositions in the third quarter of 2000, lower interest rates on our floating rate debt and interest savings from the prepayment of mortgage debt. These decreases in interest expense were offset by increases in the debt used to fund new development, acquisitions, investments to third party development properties and the repurchase of our preferred shares. Interest capitalized decreased from $15.3 million to $10.9 million for the years ended December 31, 2000 and 2001, respectively, due to lower development activities during 2001. Depreciation and amortization increased from $95.0 million to $99.6 million. This increase was due primarily to new development, property acquisition and capital improvements, partially offset by dispositions during the third quarter of 2000. Gain on sale of properties for the year ended December 31, 2001 totaled $2.4 million due primarily to the sale of 22.7 acres of undeveloped land located in Houston. Gain on sale of properties for the year ended December 31, 2000 totaled $18.3 million due to the sale of eleven properties containing a total of 3,599 apartment homes. Also included in the gain in 2000 are the sale of a mini-storage facility in Las Vegas and the sale of approximately 61 acres of undeveloped land located in Las Vegas, Dallas and Houston. Equity in income of joint ventures increased $7.8 million over the year ended 2000, primarily from gains recognized in one of our joint ventures from the sale of three properties totaling 1,264 apartment homes. Funds from Operations (FFO)Management considers FFO to be an appropriate measure of performance of an equity REIT. The National Association of Real Estate Investment Trusts currently defines FFO as net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from debt restructuring and sales of property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our definition of diluted FFO also assumes conversion at the beginning of the period of all dilutive convertible securities, including minority interests, which are convertible into common equity.
We believe that in order to facilitate a clear understanding of our consolidated historical operating results, FFO should be examined in conjunction with net income as presented in the consolidated statements of operations and data included elsewhere in this report. FFO is not defined by generally accepted accounting principles. FFO 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. Further, FFO as disclosed by other REIT’s may not be comparable to our calculation. The reconciliation of net income to common shareholders to FFO and the calculation of diluted FFO for the years ended December 31, 2002, 2001 and 2000 follows: |
(In thousands)
2002 | 2001 | 2000 | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Funds from operations | ||||||||||||||||||||||||||
Net income to common shareholders | $ | 74,612 | $ | 58,747 | $ | 65,053 | ||||||||||||||||||||
Real estate depreciation from continuing operations | 99,206 | 96,303 | 92,261 | |||||||||||||||||||||||
Real estate depreciation from discontinued operations | 1,785 | 2,097 | 2,016 | |||||||||||||||||||||||
Adjustments for unconsolidated joint ventures | 2,252 | (3,032 | ) | 3,238 | ||||||||||||||||||||||
Extraordinary charge (early retirement of debt) | 234 | 388 | -- | |||||||||||||||||||||||
Gain on sale of properties | (359 | ) | (2,372 | ) | (18,323 | ) | ||||||||||||||||||||
Gain on sale of discontinued operations | (29,199 | ) | -- | -- | ||||||||||||||||||||||
Preferred share dividends | -- | 2,545 | 9,371 | |||||||||||||||||||||||
Income allocated to units convertible into common shares | 1,807 | 3,127 | 2,461 | |||||||||||||||||||||||
Adjustments for convertible subordinated debentures | -- | 37 | 197 | |||||||||||||||||||||||
Funds from operations - diluted | $ | 150,338 | $ | 157,840 | $ | 156,274 | ||||||||||||||||||||
Weighted average shares - basic | 40,441 | 39,796 | 38,112 | |||||||||||||||||||||||
Common share options and awards granted | 1,313 | 1,234 | 729 | |||||||||||||||||||||||
Minority interest units | 2,462 | 2,509 | 2,547 | |||||||||||||||||||||||
Preferred shares | -- | 1,052 | 3,207 | |||||||||||||||||||||||
Convertible subordinated debentures | -- | 19 | 105 | |||||||||||||||||||||||
Weighted average shares - diluted | 44,216 | 44,610 | 44,700 | |||||||||||||||||||||||
December 31, | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2001 | ||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Real estate assets, at cost | |||||||||||||||||||||||
Land | $ | 386,246 | $ | 362,717 | |||||||||||||||||||
Buildings and improvements | 2,348,702 | 2,230,161 | |||||||||||||||||||||
2,734,948 | 2,592,878 | ||||||||||||||||||||||
Accumulated depreciation | (498,776 | ) | (422,154 | ) | |||||||||||||||||||
Net operating real estate assets | 2,236,172 | 2,170,724 | |||||||||||||||||||||
Properties under development, including land | 285,636 | 143,596 | |||||||||||||||||||||
Investments in joint ventures | 15,386 | 17,073 | |||||||||||||||||||||
Investments in third party development properties | -- | 69,983 | |||||||||||||||||||||
Total real estate assets | 2,537,194 | 2,401,376 | |||||||||||||||||||||
Accounts receivable - affiliates | 5,843 | 4,586 | |||||||||||||||||||||
Notes receivable | |||||||||||||||||||||||
Affiliates | 1,800 | 1,800 | |||||||||||||||||||||
Other | 18,614 | -- | |||||||||||||||||||||
Other assets, net | 41,827 | 33,121 | |||||||||||||||||||||
Cash and cash equivalents | 405 | 3,179 | |||||||||||||||||||||
Restricted cash | 4,216 | 5,603 | |||||||||||||||||||||
Total assets | $ | 2,609,899 | $ | 2,449,665 | |||||||||||||||||||
Liabilities and shareholders' equity | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Notes payable | |||||||||||||||||||||||
Unsecured | $ | 1,177,347 | $ | 923,890 | |||||||||||||||||||
Secured | 249,669 | 283,157 | |||||||||||||||||||||
Accounts payable | 36,189 | 13,337 | |||||||||||||||||||||
Accrued real estate taxes | 26,827 | 28,378 | |||||||||||||||||||||
Accrued expenses and other liabilities | 49,144 | 46,275 | |||||||||||||||||||||
Distributions payable | 30,541 | 30,298 | |||||||||||||||||||||
Total liabilities | 1,569,717 | 1,325,335 | |||||||||||||||||||||
Commitments and contingencies | |||||||||||||||||||||||
Minority interests | |||||||||||||||||||||||
Units convertible into perpetual preferred shares | 149,815 | 149,815 | |||||||||||||||||||||
Units convertible into common shares | 50,914 | 56,264 | |||||||||||||||||||||
Total minority interests | 200,729 | 206,079 | |||||||||||||||||||||
Shareholders' equity | |||||||||||||||||||||||
Common shares of beneficial interest; $0.01 par value per share; | |||||||||||||||||||||||
100,000 shares authorized; 49,233 and 48,627 issued at | |||||||||||||||||||||||
December 31, 2002 and 2001, respectively | 479 | 476 | |||||||||||||||||||||
Additional paid-in capital | 1,314,592 | 1,297,239 | |||||||||||||||||||||
Distributions in excess of net income | (224,756 | ) | (194,718 | ) | |||||||||||||||||||
Unearned restricted share awards | (13,714 | ) | (8,621 | ) | |||||||||||||||||||
Treasury shares, at cost | (237,148 | ) | (176,125 | ) | |||||||||||||||||||
Total shareholders' equity | 839,453 | 918,251 | |||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 2,609,899 | $ | 2,449,665 | |||||||||||||||||||
See Notes to Consolidated Financial Statements.
CAMDEN PROPERTY TRUST (In thousands, except per share amounts) |
Year Ended December 31, | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2001 | 2000 | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Rental income | $ | 365,883 | $ | 365,973 | $ | 356,396 | ||||||||||||||||||||
Other property income | 30,622 | 28,692 | 26,351 | |||||||||||||||||||||||
Total property income | 396,505 | 394,665 | 382,747 | |||||||||||||||||||||||
Fee and asset management | 6,264 | 7,745 | 6,537 | |||||||||||||||||||||||
Other income | 8,214 | 9,117 | 5,823 | |||||||||||||||||||||||
Total revenues | 410,983 | 411,527 | 395,107 | |||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||
Property operating and maintenance | 108,915 | 103,154 | 100,511 | |||||||||||||||||||||||
Real estate taxes | 41,005 | 39,760 | 38,125 | |||||||||||||||||||||||
Total property expenses | 149,920 | 142,914 | 138,636 | |||||||||||||||||||||||
Property management | 10,027 | 9,510 | 9,358 | |||||||||||||||||||||||
Fee and asset management | 2,499 | 2,016 | 1,370 | |||||||||||||||||||||||
General and administrative | 14,439 | 12,521 | 13,706 | |||||||||||||||||||||||
Impairment provision for technology investments | -- | 9,864 | -- | |||||||||||||||||||||||
Other expenses | 2,790 | 1,511 | -- | |||||||||||||||||||||||
Interest | 71,499 | 69,841 | 69,036 | |||||||||||||||||||||||
Depreciation and amortization | 103,342 | 99,563 | 94,950 | |||||||||||||||||||||||
Total expenses | 354,516 | 347,740 | 327,056 | |||||||||||||||||||||||
Income from continuing operations before gain on sale of properties, equity in income of joint ventures and minority interests | 56,467 | 63,787 | 68,051 | |||||||||||||||||||||||
Gain on sale of properties | 359 | 2,372 | 18,323 | |||||||||||||||||||||||
Equity in income of joint ventures | 366 | 8,527 | 765 | |||||||||||||||||||||||
Income allocated to minority interests | ||||||||||||||||||||||||||
Distributions on units convertible into perpetual preferred shares | (12,872 | ) | (12,872 | ) | (12,845 | ) | ||||||||||||||||||||
Income allocated to units convertible into common shares | (1,807 | ) | (3,127 | ) | (2,461 | ) | ||||||||||||||||||||
Income from continuing operations | 42,513 | 58,687 | 71,833 | |||||||||||||||||||||||
Income from discontinued operations | 3,134 | 2,993 | 2,591 | |||||||||||||||||||||||
Gain on sale of discontinued operations | 29,199 | -- | -- | |||||||||||||||||||||||
Income before extraordinary charge | 74,846 | 61,680 | 74,424 | |||||||||||||||||||||||
Extraordinary charge (early retirement of debt) | (234 | ) | (388 | ) | -- | |||||||||||||||||||||
Net income | 74,612 | 61,292 | 74,424 | |||||||||||||||||||||||
Preferred share dividends | -- | (2,545 | ) | (9,371 | ) | |||||||||||||||||||||
Net income to common shareholders | $ | 74,612 | $ | 58,747 | $ | 65,053 | ||||||||||||||||||||
Earnings per share - basic | ||||||||||||||||||||||||||
Income from continuing operations | $ | 1.05 | $ | 1.41 | $ | 1.64 | ||||||||||||||||||||
Income from discontinued operations, including gain on sale | 0.80 | 0.08 | 0.07 | |||||||||||||||||||||||
Extraordinary charge (early retirement of debt) | (0.01 | ) | (0.01 | ) | -- | |||||||||||||||||||||
Net income to common shareholders | $ | 1.84 | $ | 1.48 | $ | 1.71 | ||||||||||||||||||||
Earnings per share - diluted | ||||||||||||||||||||||||||
Income from continuing operations | $ | 1.00 | $ | 1.35 | $ | 1.57 | ||||||||||||||||||||
Income from discontinued operations, including gain on sale | 0.73 | 0.07 | 0.06 | |||||||||||||||||||||||
Extraordinary charge (early retirement of debt) | (0.00 | ) | (0.01 | ) | -- | |||||||||||||||||||||
Net income to common shareholders | $ | 1.73 | $ | 1.41 | $ | 1.63 | ||||||||||||||||||||
Distributions declared per common share | $ | 2.54 | $ | 2.44 | $ | 2.25 | ||||||||||||||||||||
Weighted average number of common shares outstanding | 40,441 | 39,796 | 38,112 | |||||||||||||||||||||||
Weighted average number of common and common dilutive equivalent shares outstanding | 44,216 | 41,603 | 41,388 | |||||||||||||||||||||||
See Notes to Consolidated Financial Statements.
CAMDEN PROPERTY TRUST (In thousands, except per share amounts) |
Preferred Shares of Beneficial Interest | Common Shares of Beneficial Interest | Additional Paid-In Capital | Distributions In Excess of Net Income | Unearned Restricted Share Awards | Treasury Shares, at cost | |||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shareholders' equity, January 1, 2000 | $ | 42 | $ | 448 | $ | 1,303,645 | $ | (132,198 | ) | $ | (8,485 | ) | $ | (146,777 | ) | |||||||||||||||||||||||||||||||||||
Net income to common shareholders | 65,053 | |||||||||||||||||||||||||||||||||||||||||||||||||
Common shares issued under dividend reinvestment plan | 23 | |||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of debentures (61 shares) | 1 | 1,462 | ||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares issued under benefit plan (329 shares) | 3 | 6,195 | 1,805 | |||||||||||||||||||||||||||||||||||||||||||||||
Employee stock purchase plan | (189 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares placed into Rabbi Trust (241 shares) | (2 | ) | 2 | |||||||||||||||||||||||||||||||||||||||||||||||
Common share options exercised (46 shares) | 1,052 | |||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of operating partnership units (6 shares) | 133 | |||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common shares (1,166 shares) | (31,203 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash distributions ($2.25 per share) | (86,827 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' equity, December 31, 2000 | 42 | 450 | 1,312,323 | (153,972 | ) | (6,680 | ) | (177,980 | ) | |||||||||||||||||||||||||||||||||||||||||
Net income to common shareholders | 58,747 | |||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of preferred shares (3,088 shares) | (31 | ) | 24 | 7 | ||||||||||||||||||||||||||||||||||||||||||||||
Redemption of preferred shares (1,077 shares) | (11 | ) | (26,911 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Common shares issued under dividend reinvestment plan | 15 | |||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of debentures (81 shares) | 1 | 2,006 | ||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares issued under benefit plan (247 shares) | 2 | 5,493 | (1,941 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Employee stock purchase plan | (36 | ) | 666 | |||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares placed into Rabbi Trust (269 shares) | (3 | ) | 3 | |||||||||||||||||||||||||||||||||||||||||||||||
Common share options exercised (110 shares) | 1 | 3,160 | 1,189 | |||||||||||||||||||||||||||||||||||||||||||||||
Conversion of operating partnership units (51 shares) | 1 | 1,179 | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash distributions ($2.44 per share) | (99,493 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' equity, December 31, 2001 | -- | 476 | 1,297,239 | (194,718 | ) | (8,621 | ) | $ | (176,125 | ) | ||||||||||||||||||||||||||||||||||||||||
Net income to common shareholders | 74,612 | |||||||||||||||||||||||||||||||||||||||||||||||||
Common shares issued under dividend reinvestment plan | 26 | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares issued under benefit plan (367 shares) | 4 | 10,199 | (5,093 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Employee stock purchase plan | 125 | 639 | ||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares placed into Rabbi Trust (310 shares) | (3 | ) | 3 | |||||||||||||||||||||||||||||||||||||||||||||||
Common share options exercised (204 shares) | 2 | 6,190 | 1,013 | |||||||||||||||||||||||||||||||||||||||||||||||
Conversion of operating partnership units (35 shares) | 810 | |||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common shares (1,945 shares) | (62,675 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Cash distributions ($2.54 per share) | (104,650 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' equity, December 31, 2002 | $ | -- | $ | 479 | $ | 1,314,592 | $ | (224,756 | ) | $ | (13,714 | ) | $ | (237,148 | ) | |||||||||||||||||||||||||||||||||||
See Notes to Consolidated Financial Statements.
CAMDEN PROPERTY TRUST (In thousands) |
Year Ended December 31, | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2001 | 2000 | ||||||||||||||||||||||||
Cash flow from operating activities | ||||||||||||||||||||||||||
Net income | $ | 74,612 | $ | 61,292 | $ | 74,424 | ||||||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||||||||||||||||
Income from discontinued operations | (3,134 | ) | (2,993 | ) | (2,591 | ) | ||||||||||||||||||||
Depreciation and amortization | 103,342 | 99,563 | 94,950 | |||||||||||||||||||||||
Equity in income of joint ventures, net of cash received | 1,687 | 7,411 | 1,959 | |||||||||||||||||||||||
Gain on sale of discontinued operations | (29,199 | ) | -- | -- | ||||||||||||||||||||||
Gain on sale of properties | (359 | ) | (2,372 | ) | (18,323 | ) | ||||||||||||||||||||
Impairment provision for technology investments | -- | 9,864 | -- | |||||||||||||||||||||||
Extraordinary charge (early retirement of debt) | 234 | 388 | -- | |||||||||||||||||||||||
Income allocated to units convertible into common shares | 1,807 | 3,127 | 2,461 | |||||||||||||||||||||||
Accretion of discount on unsecured notes payable | 529 | 421 | 403 | |||||||||||||||||||||||
Net change in operating accounts | 30,460 | 14,146 | 8,546 | |||||||||||||||||||||||
Net cash provided by operating activities of continuing operations | 179,979 | 190,847 | 161,829 | |||||||||||||||||||||||
Net cash provided by operating activities of discontinued operations | 4,945 | 4,920 | 4,607 | |||||||||||||||||||||||
Net cash provided by operating activities | 184,924 | 195,767 | 166,436 | |||||||||||||||||||||||
Cash flow from investing activities | ||||||||||||||||||||||||||
Increase in real estate assets | (401,403 | ) | (122,088 | ) | (120,636 | ) | ||||||||||||||||||||
Net proceeds from sales of properties and townhomes | 76,007 | 10,377 | 150,141 | |||||||||||||||||||||||
Net proceeds from sale of discontinued operations | 51,810 | -- | -- | |||||||||||||||||||||||
Increase in investments in joint ventures | -- | (1,881 | ) | (2,702 | ) | |||||||||||||||||||||
Increase in notes receivable | (18,614 | ) | -- | -- | ||||||||||||||||||||||
Increase in investments in third party development properties | (10,386 | ) | (26,349 | ) | (38,451 | ) | ||||||||||||||||||||
Decrease in investments in third party development properties | 80,369 | 29,259 | -- | |||||||||||||||||||||||
Increase in technology investments | (240 | ) | (7,249 | ) | (2,615 | ) | ||||||||||||||||||||
Other | (1,362 | ) | (1,696 | ) | (1,488 | ) | ||||||||||||||||||||
Net cash used in investing activities | (223,819 | ) | (119,627 | ) | (15,751 | ) | ||||||||||||||||||||
Cash flow from financing activities | ||||||||||||||||||||||||||
Net (decrease) increase in unsecured line of credit and short term borrowings | (61,000 | ) | (39,000 | ) | 80,000 | |||||||||||||||||||||
Proceeds from notes payable | 365,528 | 326,868 | -- | |||||||||||||||||||||||
Repayments of notes payable | (85,088 | ) | (219,359 | ) | (107,376 | ) | ||||||||||||||||||||
Proceeds from issuance of preferred units, net | -- | -- | 17,136 | |||||||||||||||||||||||
Distributions to shareholders and minority interests | (123,412 | ) | (119,226 | ) | (112,850 | ) | ||||||||||||||||||||
Repurchase of preferred shares | -- | (26,922 | ) | -- | ||||||||||||||||||||||
Repurchase of common shares and units | (62,675 | ) | -- | (31,203 | ) | |||||||||||||||||||||
Extraordinary charge (early retirement of debt) | (234 | ) | (388 | ) | -- | |||||||||||||||||||||
Other | 3,002 | 130 | 3,027 | |||||||||||||||||||||||
Net cash provided by (used in) financing activities | 36,121 | (77,897 | ) | (151,266 | ) | |||||||||||||||||||||
Net decrease in cash and cash equivalents | (2,774 | ) | (1,757 | ) | (581 | ) | ||||||||||||||||||||
Cash and cash equivalents, beginning of year | 3,179 | 4,936 | 5,517 | |||||||||||||||||||||||
Cash and cash equivalents, end of year | $ | 405 | $ | 3,179 | $ | 4,936 | ||||||||||||||||||||
Supplemental information | ||||||||||||||||||||||||||
Cash paid for interest, net of interest capitalized | $ | 70,912 | $ | 65,276 | $ | 70,310 | ||||||||||||||||||||
Interest capitalized | 10,923 | 10,920 | 15,303 | |||||||||||||||||||||||
Supplemental schedule of noncash investing and financing activities | ||||||||||||||||||||||||||
Value of shares issued under benefit plans, net | $ | 9,893 | $ | 5,222 | $ | 5,873 | ||||||||||||||||||||
Conversion of operating partnership units to common shares | 810 | 1,179 | 144 | |||||||||||||||||||||||
Conversion of 7.33% subordinated debentures to common shares, net | -- | 1,950 | 1,456 | |||||||||||||||||||||||
Conversion of preferred shares to common shares | -- | 31 | -- | |||||||||||||||||||||||
Property and Location | Number of Apartment Homes | Date of Acquisition | Status as of December 31, 2002 | Year Built | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Camden Bay, Phase II | ||||||||||||||||||||||||||||||||||
Tampa, FL | 352 | 2Q02 | Stabilized | 2001 | ||||||||||||||||||||||||||||||
Camden San Paloma | ||||||||||||||||||||||||||||||||||
Phoenix, AZ | 324 | 2Q02 | Stabilized | 1993/1994 | ||||||||||||||||||||||||||||||
Camden Providence Lakes | ||||||||||||||||||||||||||||||||||
Tampa, FL | 260 | 4Q02 | Stabilized | 1996 | ||||||||||||||||||||||||||||||
Camden Ybor City | ||||||||||||||||||||||||||||||||||
Tampa, FL | 454 | 2Q02 | In lease-up | 2002 | ||||||||||||||||||||||||||||||
Camden Tuscany | ||||||||||||||||||||||||||||||||||
San Diego, CA | 160 | 4Q02 | Under construction | 2003 | ||||||||||||||||||||||||||||||
Camden Sierra at Otay Ranch | ||||||||||||||||||||||||||||||||||
San Diego, CA | 422 | 4Q02 | Under construction | 2003 | ||||||||||||||||||||||||||||||
Total apartment homes acquired | 1,972 | |||||||||||||||||||||||||||||||||
Dispositions |
Property and Location | Number of Apartment Homes | Date of Disposition | Year Built | |||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oasis Plaza (a) | ||||||||||||||||||||||||||||||||||
Las Vegas, NV | 300 | 1Q02 | 1976 | |||||||||||||||||||||||||||||||
Camden Bluffs | ||||||||||||||||||||||||||||||||||
Reno, NV | 450 | 4Q02 | 1997 | |||||||||||||||||||||||||||||||
Camden Harbor | ||||||||||||||||||||||||||||||||||
Las Vegas, NV | 336 | 4Q02 | 1996 | |||||||||||||||||||||||||||||||
Camden Chasewood | ||||||||||||||||||||||||||||||||||
Houston, TX | 282 | 4Q02 | 1978 | |||||||||||||||||||||||||||||||
Camden Wallingford | ||||||||||||||||||||||||||||||||||
Houston, TX | 462 | 4Q02 | 1980 | |||||||||||||||||||||||||||||||
Camden Waterford | ||||||||||||||||||||||||||||||||||
Corpus Christi, TX | 580 | 4Q02 | 1976/1980 | |||||||||||||||||||||||||||||||
Total apartment homes sold | 2,410 | |||||||||||||||||||||||||||||||||
(a) | Oasis Plaza was held through one of our joints ventures. Our portion of the results of operations and the gain from this disposition is included in "equity in income of joint ventures" in our consolidated statements of operations |
Year Ended December 31, | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2001 | 2000 | ||||||||||||||||||||||||
Net income to common shareholders | $ | 74,612 | $ | 58,747 | $ | 65,053 | ||||||||||||||||||||
Net loss of taxable REIT subsidiaries included above | 4,034 | 3,525 | -- | |||||||||||||||||||||||
Net income from REIT operations | 78,646 | 62,272 | 65,053 | |||||||||||||||||||||||
Book depreciation and amortization, including discontinued operations | 105,043 | 101,639 | 96,966 | |||||||||||||||||||||||
Tax depreciation and amortization | (89,734 | ) | (81,687 | ) | (77,284 | ) | ||||||||||||||||||||
Book/tax difference on gains/losses from capital transactions | (1,642 | ) | 5,374 | 7,254 | ||||||||||||||||||||||
Other book/tax differences, net | (3,919 | ) | (2,099 | ) | 3,030 | |||||||||||||||||||||
REIT taxable income | 88,394 | 85,499 | 95,019 | |||||||||||||||||||||||
Dividends paid deduction | (103,441 | ) | (102,757 | ) | (96,198 | ) | ||||||||||||||||||||
Dividends paid in excess of taxable income | $ | (15,047 | ) | $ | (17,258 | ) | $ | (1,179 | ) | |||||||||||||||||
A schedule of per share distributions we paid and reported to our shareholders is set forth in the following tables: |
Year Ended December 31, | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2001 | 2000 | ||||||||||||||||||||||||
Common Share Distributions | ||||||||||||||||||||||||||
Ordinary income | $ | 1.85 | $ | 2.31 | $ | 1.71 | ||||||||||||||||||||
20% Long-term capital gain | 0.46 | 0.11 | 0.11 | |||||||||||||||||||||||
25% Sec. 1250 capital gain | 0.23 | 0.02 | 0.43 | |||||||||||||||||||||||
Total | $ | 2.54 | $ | 2.44 | $ | 2.25 | ||||||||||||||||||||
Percentage of distributions representing tax preference items | 9.491 | 10.773 | 12.090 | % | ||||||||||||||||||||||
Preferred Share Dividends | ||||||||||||||||||||||||||
Ordinary income | $ | 1.24 | $ | 1.71 | ||||||||||||||||||||||
20% Long-term capital gain | 0.06 | 0.11 | ||||||||||||||||||||||||
25% Sec. 1250 capital gain | 0.01 | 0.43 | ||||||||||||||||||||||||
Total | $ | 1.31 | $ | 2.25 | ||||||||||||||||||||||
4. Earnings Per ShareBasic earnings per share is computed using income from continuing operations and the weighted average number of common shares outstanding. Diluted earnings per share reflects common shares issuable from the assumed conversion of common share options and awards granted, preferred shares, units convertible into common shares and convertible subordinated debentures. Only those items that have a dilutive impact on our basic earnings per share are included in diluted earnings per share. For the year ended December 31, 2001, 1.9 million units convertible into common shares were not included in the diluted earnings per share calculated as they were not dilutive.
The following table presents information necessary to calculate basic and diluted earnings per share for the periods indicated: (In thousands, except per share amounts) |
Year Ended December 31, | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2001 | 2000 | ||||||||||||||||||||||||
BASIC EARNINGS PER SHARE | ||||||||||||||||||||||||||
Weighted average common shares outstanding | 40,441 | 39,796 | 38,112 | |||||||||||||||||||||||
Income from continuing operations per share - basic | $ | 1.05 | $ | 1.41 | $ | 1.64 | ||||||||||||||||||||
DILUTED EARNINGS PER SHARE | ||||||||||||||||||||||||||
Weighted average common shares outstanding | 40,441 | 39,796 | 38,112 | |||||||||||||||||||||||
Shares issuable from assumed conversion of: | ||||||||||||||||||||||||||
Common share options and awards outstanding | 1,313 | 1,234 | 729 | |||||||||||||||||||||||
Units convertible into common shares | 2,462 | 573 | 2,547 | |||||||||||||||||||||||
Weighted average common shares outstanding, as adjusted | 44,216 | 41,603 | 41,388 | |||||||||||||||||||||||
Income from continuing operations per share - diluted | $ | 1.00 | $ | 1.35 | $ | 1.57 | ||||||||||||||||||||
EARNINGS FOR BASIC AND DILUTED COMPUTATION | ||||||||||||||||||||||||||
Income from continuing operations | $ | 42,513 | $ | 58,687 | $ | 71,833 | ||||||||||||||||||||
Preferred share dividends | -- | (2,545 | ) | (9,371 | ) | |||||||||||||||||||||
Income from continuing operations (basic EPS) | 42,513 | 56,142 | 62,462 | |||||||||||||||||||||||
Income allocated to units convertible into common shares | 1,807 | -- | 2,461 | |||||||||||||||||||||||
Income from continuing operations, as adjusted (diluted EPS) | $ | 44,320 | $ | 56,142 | $ | 64,923 | ||||||||||||||||||||
|
Year Ended December 31, | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2001 | 2000 | ||||||||||||||||||||||||
Total property income | $ | 8,944 | $ | 8,955 | $ | 8,394 | ||||||||||||||||||||
Total property expenses | (4,025 | ) | (3,865 | ) | (3,787 | ) | ||||||||||||||||||||
Net operating income | 4,919 | 5,090 | 4,607 | |||||||||||||||||||||||
Depreciation | (1,785 | ) | (2,097 | ) | (2,016 | ) | ||||||||||||||||||||
Income from discontinued operations | $ | 3,134 | $ | 2,993 | $ | 2,591 | ||||||||||||||||||||
6. Investments in Joint VenturesIn June 1998, we completed a transaction in which Camden USA, Inc., one of our wholly owned subsidiaries, and TMT-Nevada, LLC, a wholly owned subsidiary of a private pension fund, formed Sierra- Nevada Multifamily Investments, LLC (“Sierra-Nevada”). We entered into this transaction to reduce our market risk in the Las Vegas area. In this transaction, we transferred to Sierra-Nevada 19 apartment communities containing 5,119 apartment homes for an aggregate of $248 million. TMT-Nevada holds an
80% interest in Sierra-Nevada and Camden USA holds the remaining 20% interest. At December 31, 2002, Sierra-Nevada owned 18 apartment communities with 4,619 apartment homes, had total assets of $207.8 million and had secured debt totaling $175.6 million. In April 1998, we acquired, through one of our wholly owned subsidiaries, a 50% interest in Denver West Apartments, LLC, which owns Camden Denver West, a 320 apartment home community located in Denver, Colorado. The remaining 50% interest is owned by a private investor. In April 1997, we acquired, through our operating partnership, a 44% interest in Paradim, Inc. The remaining interest was held by unaffiliated private investors. During 2001, our investment in Paradim, Inc. was liquidated after all the assets, consisting of three apartment communities with 1,264 apartment homes were sold. Our portion of the gains recognized from these sales totaled $6.6 million and is included in “Equity in income of joint ventures” for the year then ended. The joint ventures discussed above are all accounted for under the equity method. The joint ventures in which we have an interest have been funded with secured, non-recourse debt. We are not committed to any additional funding in relation to our joint ventures. See discussion of principles of consolidation in Note 2. 7. Third Party Construction ServicesOur construction division performs services for our internally developed construction pipeline, as well as construction management and general contracting services for third parties. We are currently under contract with third parties on projects ranging from $2.2 million to $19.7 million in construction costs. We earn fees on these projects ranging from 3% to 7% of the total contracted construction cost which we recognize when they are earned. Fees earned from third party construction projects totaled $2.7 million, $2.6 million and $800,000 for the years ended December 31, 2002, 2001 and 2000, respectively, and are included in the revenues section of our consolidated statements of operations under “Fee and asset management.” For projects where our fee is based on a fixed price, any cost overruns, as compared to the original budget, incurred during construction will reduce the fee generated on those projects. For any project where cost overruns are expected to be in excess of the fee generated on the project, we will recognize the total loss in the period in which the loss is first estimated. 8. Investments in Third Party Development PropertiesIn addition to providing construction services to third parties, for selected properties in markets where we are interested in making investments, we may provide financing for a portion of the project costs. In connection with this program, we entered into agreements to develop, construct, and manage multifamily projects for unaffiliated third parties. We provided financing for a portion of each project in the form of a note receivable. Interest on these notes accrued at 10% annually and was recognized as earned. These notes were secured by second liens on the assets and partial guarantees by the third party owner. At December 31, 2001, our investments in third party development properties totaled $70.0 million. We had no investments in third party development properties at December 31, 2002. During 2002, we purchased four properties, which we had previously developed for our third party customers, for an aggregate of $157.7 million, as we believe these investments fit our diversification strategy: Camden Bay which was completed and stabilized operations during 2001, Camden Ybor City which was completed during the first quarter 2002 and is expected to stabilize operations during 2003 and Camden Tuscany and Camden Sierra at Otay Ranch which are both currently under development. We expect to complete the construction and stabilize operations of these two development properties in early 2004.
The owners of these properties had equity at risk sufficient enough to cover the costs associated with managing the development, construction and operation of these properties. The invested equity for all projects ranged from 6% to 10% of construction costs. The fees earned from all investments totaled $1.7 million, $2.2 million and $2.2 million for the years ended December 31, 2002, 2001 and 2000, respectively. During 2001, we purchased one completed and stabilized third party development project and three projects which were in the pre-development stage, as they fit our diversification strategy. All net fees and interest, totaling $1.0 million, previously recognized on the pre-development projects were reversed at the time of purchase. 9. Notes PayableThe following is a summary of our indebtedness: (In thousands) |
December 31, | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2001 | |||||||||||||||||||||||||
Unsecured line of credit and short term borrowings | $ | 96.0 | $ | 157.0 | ||||||||||||||||||||||
Senior unsecured notes | ||||||||||||||||||||||||||
7.03% Notes, due 2003 | 50.0 | 50.0 | ||||||||||||||||||||||||
7.14% Notes, due 2004 | 199.7 | 199.4 | ||||||||||||||||||||||||
7.11% - 7.28% Notes, due 2006 | 174.4 | 174.2 | ||||||||||||||||||||||||
5.98% Notes, due 2007 | 149.3 | -- | ||||||||||||||||||||||||
6.77% Notes, due 2010 | 99.9 | 99.9 | ||||||||||||||||||||||||
7.69% Notes, due 2011 | 149.4 | 149.4 | ||||||||||||||||||||||||
5.93% Notes, due 2012 | 199.1 | -- | ||||||||||||||||||||||||
1,021.8 | 672.9 | |||||||||||||||||||||||||
Medium term notes | ||||||||||||||||||||||||||
6.68% - 6.74% Notes, due 2002 | -- | 34.5 | ||||||||||||||||||||||||
6.88% - 7.17% Notes, due 2004 | 30.0 | 30.0 | ||||||||||||||||||||||||
7.63% Notes, due 2009 | 15.0 | 15.0 | ||||||||||||||||||||||||
6.79% Notes, due 2010 | 14.5 | 14.5 | ||||||||||||||||||||||||
59.5 | 94.0 | |||||||||||||||||||||||||
Total unsecured notes | 1,177.3 | 923.9 | ||||||||||||||||||||||||
Secured notes | ||||||||||||||||||||||||||
7.10% - 8.50% Conventional Mortgage Notes, due 2003 - 2009 | 150.0 | 182.5 | ||||||||||||||||||||||||
2.23% - 7.29% Tax-exempt Mortgage Notes, due 2025-2032 | 99.7 | 100.6 | ||||||||||||||||||||||||
249.7 | 283.1 | |||||||||||||||||||||||||
Total notes payable | $ | 1,427.0 | $ | 1,207.0 | ||||||||||||||||||||||
Floating rate debt included in unsecured line of credit (2.00% - 2.25%) | $ | 96.0 | $ | 157.0 | ||||||||||||||||||||||
Floating rate tax-exempt debt included in secured notes (2.23% - 3.46%) | 78.4 | 62.0 | ||||||||||||||||||||||||
Net book value of real estate assets subject to secured notes | 399.6 | 440.3 |
In August 2002, we entered into a new line of credit for $500 million, replacing our previous credit facility, which totaled $420 million. The new line includes 19 banks, eight of which are new to our unsecured facility, and matures in August 2006. The scheduled interest rate is currently based on spreads over LIBOR or Prime. The scheduled interest rate spreads are subject to change as our credit ratings change. Advances under the line of credit may be priced at the scheduled rates, or we may enter into bid rate loans with participating banks at rates below the scheduled rates. These bid rate loans have terms of six months or less and may not exceed the lesser of $250 million or the remaining amount available under the line of credit. The line of credit is subject to customary financial covenants and limitations. The new line of credit will provide us with additional liquidity to pursue development and acquisition opportunities, as well as lower our overall cost of funds and contains financial covenant requirements that are more favorable to us. At year end, we were in compliance with all covenants and limitations. The weighted average balance outstanding on the unsecured lines of credit during the year ended December 31, 2002 was $208.9 million, with a maximum outstanding balance of $332.0 million.
Our new line of credit provides us with the ability to issue up to $100 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding under our line, it does reduce the amount available to us. At December 31, 2002 we had outstanding letters of credit totaling $1.3 million. As an alternative to our unsecured line of credit, we from time to time borrow using competitively bid unsecured short-term notes with lenders who may or may not be a part of the unsecured line of credit bank group. Such borrowings vary in term and pricing and are typically priced at interest rates below those available under the unsecured line of credit. As of December 31, 2002, we had $402.7 million available under our unsecured line of credit and $85.5 million available under our $750 million universal shelf registration. Subsequent to year end, we filed a universal shelf registration statement providing for the issuance of an additional $1.0 billion in debt securities, preferred shares, common shares or warrants. The following table summarizes our unsecured notes payable issued during 2002 from our $750 million universal shelf registration: |
Type and Amount | Month of Issuance | Terms | Coupon Rate | Maturity Date | Interest Paid | Proceeds, Net of Costs | |||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
June 1 and | |||||||||||||||||||||||||||||||||||||||||||||||||
$150.0 million senior unsecured notes | 06/02 | Interest only | 5.875% | 06/01/07 | December 1 | $148.4 million | |||||||||||||||||||||||||||||||||||||||||||
May 30 and | |||||||||||||||||||||||||||||||||||||||||||||||||
$200.0 million senior unsecured notes | 11/02 | Interest only | 5.875% | 11/30/12 | November 30 | $197.8 million |
We may redeem the notes at any time at a redemption price equal to the principal amount and accrued interest, plus a make-whole provision. The notes are direct, senior unsecured obligations and rank equally with all other unsecured and unsubordinated indebtedness. We used the net proceeds to reduce indebtedness outstanding under our unsecured line of credit. During 2002, we paid off $34.5 million of maturing medium-term notes. These notes had interest rates ranging from 6.68% to 6.74% and were repaid using proceeds available under our unsecured line of credit. Additionally, we paid off two conventional mortgage notes totaling $27.5 million which had a weighted average interest rate of 8.4%. We incurred a prepayment penalty of $234,000 in connection with repayment of one of the notes. We repaid these mortgages using proceeds available under our unsecured line of credit, as the interest rates on the line of credit are significantly lower than the rates on the mortgage notes. In addition to our repayments, we refinanced $18.0 million in tax exempt fixed rate mortgage notes which had a weighted average interest rate of 5.9%. The new tax exempt variable rate notes, which now total $17.1 million after repayment of $900,000, had a weighted average interest rate of 2.2% at December 31, 2002. At December 31, 2002, the weighted average interest rate on our floating rate debt was 2.6%.
Our indebtedness, excluding our unsecured line of credit, had a weighted average maturity of 6.7 years. Scheduled repayments on outstanding debt, including our line of credit, at December 31, 2002 is as follows: |
Year | Amount | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
2003 | $ | 67.2 | |||||||||
2004 | 234.3 | ||||||||||
2005 | 61.0 | ||||||||||
2006 | 306.3 | ||||||||||
2007 | 165.5 | ||||||||||
2008 and thereafter | 592.7 | ||||||||||
Total | $ | 1,427.0 | |||||||||
1993 Share Plan | Shares Available for Issuance | Options and Restricted Shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2002 | Weighted Average 2002 Price | 2001 | Weighted Average 2001 Price | 2000 | Weighted Average 2000 Price | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 1 | 1,262,424 | 3,292,816 | $ | 29.21 | 3,351,704 | $ | 28.30 | 3,311,705 | $ | 27.50 | ||||||||||||||||||||||||||||||||||||||||||||||||
Current Year Share Adjustment (a) | 57,192 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Granted | (510,000 | ) | 510,000 | 34.59 | -- | 5,250 | 25.88 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Exercised | -- | (142,813 | ) | 28.15 | (204,846 | ) | 29.65 | (147,589 | ) | 29.22 | ||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | 333 | (333 | ) | 24.88 | (14,487 | ) | 26.11 | (36,083 | ) | 27.09 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net Options | (509,667 | ) | 366,854 | (219,333) | (178,422) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Shares | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Granted | (294,555 | ) | 294,555 | 35.07 | 179,560 | 32.06 | 260,114 | 26.91 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | -- | (15,025 | ) | 31.15 | (19,115 | ) | 28.48 | (41,693 | ) | 27.24 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net Restricted Shares | (294,555 | ) | 279,530 | 160,445 | 218,421 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31 | 515,394 | 3,939,200 | $ | 30.96 | 3,292,816 | $ | 29.21 | 3,351,704 | $ | 28.30 | ||||||||||||||||||||||||||||||||||||||||||||||||
Exercisable options at December 31 | 2,017,495 | $ | 31.32 | 1,991,231 | $ | 30.50 | 889,654 | $ | 28.78 | |||||||||||||||||||||||||||||||||||||||||||||||||
Vested restricted shares at December 31 | 880,440 | $ | 27.12 | 756,661 | $ | 26.79 | 655,504 | $ | 25.56 |
(a) | Current year share adjustment reflects the impact of new common shares issued in 2002. |
2002 Share Plan | Shares Available for Issuance | Options and Restricted Shares | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2002 | Weighted Average 2002 Price | ||||||||||||||||||||||||
Beginning shares available under 2002 | ||||||||||||||||||||||||||
Share Plan | 5,169,004 | -- | $ | -- | ||||||||||||||||||||||
Options | ||||||||||||||||||||||||||
Granted | (612,486 | ) | 612,486 | 36.87 | ||||||||||||||||||||||
Forfeited | 19,031 | (19,031 | ) | 36.87 | ||||||||||||||||||||||
Net Options | (593,455 | ) | 593,455 | |||||||||||||||||||||||
Balance at December 31 | 4,575,549 | 593,455 | $ | 36.87 | ||||||||||||||||||||||
There were no exercisable options or vested restricted shares under the 2002 Share Plan at December 31, 2002. |
Options. Options are exercisable, subject to the terms and conditions of the plan, in increments of 33.33% per year on each of the first three anniversaries of the date of grant. The plan provides that the exercise price of an option will be determined by the compensation committee of the Board on the day of grant and to date all options have been granted at an exercise price which equals the fair market value on the date of grant. Options exercised during 2002 were exercised at prices ranging from $24 to $33.76 per share.
At December 31, 2002, options outstanding were at exercise prices ranging from $21.38 to $38.85 per share, and had a weighted average remaining contractual life of 6.2 years. The following is a detail of outstanding options at December 31, 2002: |
Option Price | Total Options Outstanding | Vested Options Outstanding | Remaining Contractual Life | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$21.38-$29.44 | 578,533 | 574,532 | 3.5 years | |||||||||||||||
$30.75-$34.59 | 1,685,848 | 1,175,849 | 6.1 years | |||||||||||||||
$36.87-$38.85 | 860,570 | 267,114 | 8.1 years | |||||||||||||||
Total Options | 3,124,951 | 2,017,495 | 6.2 years | |||||||||||||||
In 1998, in connection with the merger with Oasis, we assumed the Oasis stock incentive plans. We converted all unexercised Oasis stock options issued under the former Oasis stock incentive plans into options to purchase Camden common shares. The options are exercisable at prices ranging from $28.66 to $33.76 per share. All of the Oasis options became fully vested upon conversion, and have a weighted average remaining contractual life of three years. As of December 31, 2002, there were 363,897 Oasis options outstanding, which are exercisable at prices ranging from $28.66 to $32.28 per share. Fair Value Stock-Based Compensation. The fair value of each option granted is estimated on the date of grant utilizing the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2002 and 2000, respectively: risk-free interest rates of 5.1% and 6.6%, expected life of ten years, dividend yield of 6.9% and 6.7%, and expected share volatility of 18.1% and 13.4%. The weighted average fair value of options granted in 2002 and 2000, respectively, was $2.24 and $2.54 per share. There were no options granted in 2001. If we applied the retroactive restatement method set forth in SFAS No. 148 in applying the provisions of SFAS No. 123 to our option grants and ESPP, our net income to common shareholders and related basic and diluted earnings per share would be as follows (in thousands, except per share amounts): |
Year Ended December 31, | |||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2001 | 2000 | |||||||||||||||||||||||||||
Net income to common shareholders | $ | 74,009 | 58,310 | $ | 64,317 | ||||||||||||||||||||||||
Net income to common shareholders per share - basic | $ | 1.83 | $ | 1.47 | $ | 1.69 | |||||||||||||||||||||||
Net income to common shareholders per share - diluted | $ | 1.71 | $ | 1.40 | $ | 1.62 |
Year Ended December 31, | |||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2001 | 2000 | |||||||||||||||||||||||||||
Decrease (increase) in assets: | |||||||||||||||||||||||||||||
Accounts receivable - affiliates | $ | (570 | ) | $ | (839 | ) | $ | (65 | ) | ||||||||||||||||||||
Other assets, net | (6,720 | ) | (5,333 | ) | (950 | ) | |||||||||||||||||||||||
Restricted cash | 1,387 | (1,128 | ) | 237 | |||||||||||||||||||||||||
Increase (decrease) in liabilities: | |||||||||||||||||||||||||||||
Accounts payable | 22,624 | (255 | ) | (6,999 | ) | ||||||||||||||||||||||||
Accrued real estate taxes | (1,695 | ) | 2,012 | 3,526 | |||||||||||||||||||||||||
Accrued expenses and other liabilities | 15,434 | 19,689 | 12,797 | ||||||||||||||||||||||||||
Change in operating accounts | $ | 30,460 | $ | 14,146 | $ | 8,546 | |||||||||||||||||||||||
First | Second | Third | Fourth | Total | ||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002: | ||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | 101,697 | $ | 101,753 | $ | 104,229 | $ | 103,304 | $ | 410,983 | ||||||||||||||||||||||||||||||||
Income before extraordinary charge | 13,982 | 12,117 | 10,469 | 38,278 | 74,846 | |||||||||||||||||||||||||||||||||||||
Net income to common shareholders | 13,982 | 12,117 | 10,235 | 38,278 | 74,612 | |||||||||||||||||||||||||||||||||||||
Net income to common shareholders per share - basic | 0.34 | 0.30 | 0.25 | 0.98 | (a) | 1.84 | ||||||||||||||||||||||||||||||||||||
Net income to common shareholders per share - diluted | 0.32 | 0.28 | 0.24 | 0.93 | (a) | 1.73 | ||||||||||||||||||||||||||||||||||||
2001: | ||||||||||||||||||||||||||||||||||||||||||
Revenues | $ | 100,696 | $ | 102,317 | $ | 104,693 | $ | 103,821 | $ | 411,527 | ||||||||||||||||||||||||||||||||
Income before extraordinary charge | 18,544 | 17,136 | 18,484 | 7,516 | 61,680 | |||||||||||||||||||||||||||||||||||||
Net income to common shareholders | 16,201 | 16,934 | 18,096 | 7,516 | 58,747 | |||||||||||||||||||||||||||||||||||||
Net income to common shareholders per share - basic | 0.43 | 0.43 | 0.44 | 0.18 | (b) | 1.48 | ||||||||||||||||||||||||||||||||||||
Net income to common shareholders per share - diluted | 0.41 | 0.40 | 0.42 | 0.18 | (b) | 1.41 |
(a) | Includes a $29,199, or $0.74 basic and $0.71 diluted, impact related to the gain on sale of discontinued operations. |
(b) | Includes a $(8,774), or $(0.22) basic and $(0.21) diluted impact related to an impairment provision for technology investments |
|
High | Low | Distributions | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 Quarters: | ||||||||||||||||||||||||||
First | $ | 39.20 | $ | 34.59 | $ | 0.635 | ||||||||||||||||||||
Second | 41.54 | 36.81 | 0.635 | |||||||||||||||||||||||
Third | 37.25 | 30.80 | 0.635 | |||||||||||||||||||||||
Fourth | 34.35 | 29.74 | 0.635 | |||||||||||||||||||||||
2001 Quarters: | ||||||||||||||||||||||||||
First | $ | 33.29 | $ | 31.07 | 0.61 | |||||||||||||||||||||
Second | 36.70 | 32.72 | 0.61 | |||||||||||||||||||||||
Third | 39.32 | 35.92 | 0.61 | |||||||||||||||||||||||
Fourth | 37.51 | 34.32 | 0.61 |
|
CAMDEN PROPERTY TRUST |
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2001 | 2000 | 1999 | 1998(a) | ||||||||||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||||||||||||
Rental income | $ | 365,883 | $ | 365,973 | $ | 356,396 | $ | 333,482 | $ | 292,862 | ||||||||||||||||||||||||||||||||
Other property income | 30,622 | 28,692 | 26,351 | 21,476 | 17,472 | |||||||||||||||||||||||||||||||||||||
Total property income | 396,505 | 394,665 | 382,747 | 354,958 | 310,334 | |||||||||||||||||||||||||||||||||||||
Fee and asset management | 6,264 | 7,745 | 6,537 | 6,492 | 2,619 | |||||||||||||||||||||||||||||||||||||
Other income | 8,214 | 9,117 | 5,823 | 1,924 | 2,250 | |||||||||||||||||||||||||||||||||||||
Total revenues | 410,983 | 411,527 | 395,107 | 363,374 | 315,203 | |||||||||||||||||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||||||||||||||||||||
Property operating and maintenance | 108,915 | 103,154 | 100,511 | 95,794 | 85,889 | |||||||||||||||||||||||||||||||||||||
Real estate taxes | 41,005 | 39,760 | 38,125 | 35,451 | 30,553 | |||||||||||||||||||||||||||||||||||||
Total property expenses | 149,920 | 142,914 | 138,636 | 131,245 | 116,442 | |||||||||||||||||||||||||||||||||||||
Property management | 10,027 | 9,510 | 9,358 | 9,372 | 8,243 | |||||||||||||||||||||||||||||||||||||
Fee and asset management | 2,499 | 2,016 | 1,370 | 1,254 | 1,090 | |||||||||||||||||||||||||||||||||||||
General and administrative | 14,439 | 12,521 | 13,706 | 10,471 | 7,975 | |||||||||||||||||||||||||||||||||||||
Impairment provision for technology investments | -- | 9,864 | -- | -- | -- | |||||||||||||||||||||||||||||||||||||
Other expenses | 2,790 | 1,511 | -- | -- | -- | |||||||||||||||||||||||||||||||||||||
Interest | 71,499 | 69,841 | 69,036 | 57,856 | 50,467 | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 103,342 | 99,563 | 94,950 | 87,587 | 76,229 | |||||||||||||||||||||||||||||||||||||
Total expenses | 354,516 | 347,740 | 327,056 | 297,785 | 260,446 | |||||||||||||||||||||||||||||||||||||
Income from continuing operations before gain on sale of | ||||||||||||||||||||||||||||||||||||||||||
properties, equity in income of joint ventures and | ||||||||||||||||||||||||||||||||||||||||||
minority interests | 56,467 | 63,787 | 68,051 | 65,589 | 54,757 | |||||||||||||||||||||||||||||||||||||
Gain on sale of properties | 359 | 2,372 | 18,323 | 2,979 | -- | |||||||||||||||||||||||||||||||||||||
Equity in income of joint ventures | 366 | 8,527 | 765 | 683 | 1,312 | |||||||||||||||||||||||||||||||||||||
Income allocated to minority interests | ||||||||||||||||||||||||||||||||||||||||||
Distributions on units convertible into perpetual | ||||||||||||||||||||||||||||||||||||||||||
preferred shares | (12,872 | ) | (12,872 | ) | (12,845 | ) | (8,278 | ) | -- | |||||||||||||||||||||||||||||||||
Income allocated to units convertible into common shares | (1,807 | ) | (3,127 | ) | (2,461 | ) | (2,014 | ) | (1,322 | ) | ||||||||||||||||||||||||||||||||
Income from continuing operations | 42,513 | 58,687 | 71,833 | 58,959 | 54,747 | |||||||||||||||||||||||||||||||||||||
Income from discontinued operations | 3,134 | 2,993 | 2,591 | 2,664 | 2,586 | |||||||||||||||||||||||||||||||||||||
Gain on sale of discontinued operations | 29,199 | -- | -- | -- | -- | |||||||||||||||||||||||||||||||||||||
Income before extraordinary charge | 74,846 | 61,680 | 74,424 | 61,623 | 57,333 | |||||||||||||||||||||||||||||||||||||
Extraordinary charge (early retirement of debt) | (234 | ) | (388 | ) | -- | -- | -- | |||||||||||||||||||||||||||||||||||
Net income | 74,612 | 61,292 | 74,424 | 61,623 | 57,333 | |||||||||||||||||||||||||||||||||||||
Preferred share dividends | -- | (2,545 | ) | (9,371 | ) | (9,371 | ) | (9,371 | ) | |||||||||||||||||||||||||||||||||
Net income to common shareholders | $ | 74,612 | $ | 58,747 | $ | 65,053 | $ | 52,252 | $ | 47,962 | ||||||||||||||||||||||||||||||||
Earnings per share - basic | ||||||||||||||||||||||||||||||||||||||||||
Income from continuing operations | $ | 1.05 | $ | 1.41 | $ | 1.64 | $ | 1.20 | $ | 1.10 | ||||||||||||||||||||||||||||||||
Income from discontinued operations, including gain on sale | 0.80 | 0.08 | 0.07 | 0.07 | 0.06 | |||||||||||||||||||||||||||||||||||||
Extraordinary charge (early retirement of debt) | (0.01 | ) | (0.01 | ) | -- | -- | -- | |||||||||||||||||||||||||||||||||||
Net income to common shareholders | $ | 1.84 | $ | 1.48 | $ | 1.71 | $ | 1.27 | $ | 1.16 | ||||||||||||||||||||||||||||||||
Earnings per share - diluted | ||||||||||||||||||||||||||||||||||||||||||
Income from continuing operations | $ | 1.00 | $ | 1.35 | $ | 1.57 | $ | 1.17 | $ | 1.06 | ||||||||||||||||||||||||||||||||
Income from discontinued operations, including gain on sale | 0.73 | 0.07 | 0.06 | 0.06 | 0.06 | |||||||||||||||||||||||||||||||||||||
Extraordinary charge (early retirement of debt) | (0.00 | ) | (0.01 | ) | -- | -- | -- | |||||||||||||||||||||||||||||||||||
Net income to common shareholders | $ | 1.73 | $ | 1.41 | $ | 1.63 | $ | 1.23 | $ | 1.12 | ||||||||||||||||||||||||||||||||
Distributions declared per common share | $ | 2.54 | $ | 2.44 | $ | 2.25 | $ | 2.08 | $ | 2.02 | ||||||||||||||||||||||||||||||||
Weighted average number of common shares outstanding | 40,441 | 39,796 | 38,112 | 41,236 | 41,174 | |||||||||||||||||||||||||||||||||||||
Weighted average number of common and common | ||||||||||||||||||||||||||||||||||||||||||
dilutive equivalent shares outstanding | 44,216 | 41,603 | 41,388 | 44,291 | 44,183 |
|
CAMDEN PROPERTY TRUST |
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2002 | 2001 | 2000 | 1999 | 1998(a) | ||||||||||||||||||||||||||||||||||||||
Balance Sheet Data (at end of year) | ||||||||||||||||||||||||||||||||||||||||||
Real estate assets | $ | 3,035,970 | $ | 2,823,530 | $ | 2,719,234 | $ | 2,678,034 | $ | 2,487,942 | ||||||||||||||||||||||||||||||||
Accumulated depreciation | (498,776 | ) | (422,154 | ) | (326,723 | ) | (253,545 | ) | (167,560 | ) | ||||||||||||||||||||||||||||||||
Total assets | 2,609,899 | 2,449,665 | 2,430,881 | 2,487,932 | 2,347,982 | |||||||||||||||||||||||||||||||||||||
Notes payable | 1,427,016 | 1,207,047 | 1,138,117 | 1,165,090 | 1,002,568 | |||||||||||||||||||||||||||||||||||||
Minority interests | 200,729 | 206,079 | 210,377 | 196,852 | 71,783 | |||||||||||||||||||||||||||||||||||||
Convertible subordinated debentures | -- | -- | 1,950 | 3,406 | 3,576 | |||||||||||||||||||||||||||||||||||||
Shareholders' equity | $ | 839,453 | $ | 918,251 | $ | 974,183 | $ | 1,016,675 | $ | 1,170,388 | ||||||||||||||||||||||||||||||||
Common shares outstanding | 39,214 | 40,799 | 38,129 | 39,093 | 43,825 | |||||||||||||||||||||||||||||||||||||
Other Data | ||||||||||||||||||||||||||||||||||||||||||
Cash flows provided by (used in): | ||||||||||||||||||||||||||||||||||||||||||
Operating activities | $ | 184,924 | $ | 195,767 | $ | 166,436 | $ | 164,021 | $ | 138,419 | ||||||||||||||||||||||||||||||||
Investing activities | (223,819 | ) | (119,627 | ) | (15,751 | ) | (220,571 | ) | (55,013 | ) | ||||||||||||||||||||||||||||||||
Financing activities | 36,121 | (77,897 | ) | (151,266 | ) | (56,420 | ) | (84,227 | ) | |||||||||||||||||||||||||||||||||
Funds from operations (b) | 150,338 | 157,840 | 156,274 | 152,369 | 137,996 | |||||||||||||||||||||||||||||||||||||
Property Data | ||||||||||||||||||||||||||||||||||||||||||
Number of operating properties (at end of year) | ||||||||||||||||||||||||||||||||||||||||||
Included in continuing operations | 143 | 142 | 142 | 150 | 146 | |||||||||||||||||||||||||||||||||||||
Included in discontinued operations | -- | 3 | 3 | 3 | 3 | |||||||||||||||||||||||||||||||||||||
Number of operating apartment homes (at end of year) | ||||||||||||||||||||||||||||||||||||||||||
Included in continuing operations | 50,790 | 50,021 | 50,012 | 51,987 | 49,986 | |||||||||||||||||||||||||||||||||||||
Included in discontinued operations | -- | 1,324 | 1,324 | 1,324 | 1,324 | |||||||||||||||||||||||||||||||||||||
Number of operating apartment homes (weighted average) | ||||||||||||||||||||||||||||||||||||||||||
Included in continuing operations | 45,465 | 44,164 | 45,177 | 44,282 | 41,087 | |||||||||||||||||||||||||||||||||||||
Included in discontinued operations | 1,285 | 1,324 | 1,324 | 1,324 | 1,324 | |||||||||||||||||||||||||||||||||||||
Weighted average monthly total property income | ||||||||||||||||||||||||||||||||||||||||||
per apartment home | $ | 727 | $ | 745 | $ | 706 | $ | 668 | $ | 629 | ||||||||||||||||||||||||||||||||
Properties under development (at end of period) | 4 | 2 | 3 | 6 | 14 |
(a) | Effective April 1, 1998 we acquired Oasis Residential, Inc. |
(b) | Management considers FFO to be an appropriate measure of the performance of an equity REIT. The National Association of Real Estate Investment Trusts ("NAREIT") currently defines FFO as net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from debt restructuring and sales of property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. In addition, extraordinary or unusual items, along with significant non-recurring events that materially distort the comparative measure of FFO are typically disregarded in its calculation. Our definition of diluted FFO also assumes conversion at the beginning of the period of all convertible securities, including minority interests, which are convertible into common equity. We believe that in order to facilitate a clear understanding of our consolidated historical operating results, FFO should be examined in conjunction with net income as presented in the consolidated financial statements and data included elsewhere in this report. FFO is not defined by generally accepted accounting principles. FFO 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. Further, FFO as disclosed by other REIT's may not be comparable to our calculation. See our reconciliation of net income to common shareholders to FFO in Management's Discussion and Analysis. |