EXHIBIT 13.1

Management's Discussion and Analysis of Financial Condition and
Results of Operations

The following discussion should be read in conjunction with all of the
financial statements and notes appearing elsewhere in this report. Historical
results and trends which might appear should not be taken as indicative of
future operations.

We have made statements in this report that are "forward-looking" in that
they do not discuss historical fact, but instead note future expectations,
projections, intentions or other items relating to the future. You should not
rely on these forward-looking statements as they are subject to known and
unknown risks, uncertainties and other factors that may cause our actual results
or performance to differ materially from those included in the forward-looking
statements. Many of those factors are noted in conjunction with the
forward-looking statements in the text. Other important factors that could cause
actual results to differ include:

o the results of our efforts to implement our property
development strategy;
o the effect of economic and market conditions;
o our failure to qualify as a real estate
investment trust;
o our cost of capital;
o the actions of our competitors and our ability to
respond to those actions;
o changes in government regulations, tax rates and similar
matters; and
o environmental uncertainties and natural
disasters.

Do not rely on these forward-looking statements, which only represent our
estimates and assumptions as of the date of this report. We assume no obligation
to update or revise any forward-looking statement.

Business

Camden Property Trust is a real estate investment trust and, with our
subsidiaries, reports as a single business segment with activities related to
the ownership, development, construction and management of multifamily
communities. As of December 31, 2001, we owned interests in, operated or were
developing 147 multifamily properties containing 52,147 apartment homes located
in nine states. Our properties, excluding properties in lease-up and under
development, had a weighted average occupancy rate of 94.2% for the year ended
December 31, 2001. This represents the average occupancy for all our properties
in 2001 weighted by the number of apartment homes in each property. Weighted
average occupancy was 94.0% for the year ended December 31, 2000. Two of our
newly developed multifamily apartment properties containing 1,000 apartment
homes were in lease-up at year end. Two of our multifamily properties containing
802 apartment homes were under development at December 31, 2001. Additionally,
we have several sites which we intend to develop into multifamily apartment
communities.

Property Update

During 2001, we completed construction on the following two development
properties totaling 1,000 apartment homes: Camden Farmers Market in Dallas and
Camden Crown Valley in Southern California. Stabilization occurred during 2001
at three properties totaling 1,256 apartment homes: Camden Oxmoor in Louisville,
Camden Lee Vista in Orlando and Camden Copper Square in Phoenix. We expect
stabilization to occur at the completed development properties during 2002. We
consider a property stabilized once it reaches 90% occupancy, or generally one
year from opening the leasing office, with some allowances for larger than
average properties. Additionally, we have two properties currently under

development: Camden Harbour View, a 538-unit property located in Long Beach,
California and Camden Vineyards, a 264-unit property located in Murrieta,
California.

During 2001, we acquired one multifamily property and three tracts of
undeveloped land. The completed multifamily property, Camden Pecos Ranch, is a
272-unit property located in Phoenix, Arizona which was purchased for $20.6
million, and was developed under our third party development program. Camden
Pecos Ranch was completed during the fourth quarter 2000 and stabilized
operations during the first quarter 2001. We acquired 13.6 acres of land in
Murrieta, California, 27.5 acres of land in Orlando, and 8.3 acres of land in
Houston for a total cost of $22.2 million. These projects were in
pre-development at time of acquisition. The 13.6 acres of land acquired in
California is currently being developed as a 264- unit property, Camden
Vineyards.

Dispositions during 2001 included two parcels of land totaling 22.7 acres
located in Houston and three operating properties with a total of 1,264
apartment homes located in North Carolina and Dallas. The net proceeds from the
land sales totaled $8.6 million and were used to reduce indebtedness outstanding
under our unsecured line of credit. The operating properties were held through a
joint venture and the gains from these dispositions, totaling $6.6 million, are
included in "Equity in income of joint ventures".

Our multifamily property portfolio, excluding land we hold for future
development and joint venture properties we do not manage, at December 31, 2001,
2000 and 1999 is summarized as follows:

2001 2000 1999
------------------------- -------------------------- -------------------------
Apartment Apartment Apartment
Homes Properties Homes Properties Homes Properties
------------ ------------ ------------ ------------- ------------ ------------

Operating Properties
West Region
Las Vegas, Nevada (a)....................... 10,653 37 10,653 37 11,513 40
Denver, Colorado (a)........................ 2,529 8 2,529 8 2,312 7
Phoenix, Arizona............................ 2,109 7 1,837 6 1,505 5
Southern California......................... 1,653 4 1,272 3 1,272 3
Tucson, Arizona............................. 821 2 821 2 821 2
Reno, Nevada................................ 450 1 450 1 450 1
Central Region
Dallas, Texas (b)........................... 8,359 23 8,447 23 9,381 26
Houston, Texas.............................. 7,190 16 7,190 16 8,258 19
St. Louis, Missouri......................... 2,123 6 2,123 6 2,731 7
Austin, Texas............................... 1,745 6 1,745 6 1,745 6
Corpus Christi, Texas....................... 1,663 4 1,663 4 1,512 4
Kansas City, Missouri....................... 596 1 596 1 596 1
El Paso, Texas ............................. 129 1
East Region
Tampa, Florida.............................. 5,023 11 5,023 11 5,023 11
Orlando, Florida (c)........................ 2,804 6 2,804 6 2,312 6
Charlotte, North Carolina (b)............... 1,659 6 1,879 7 1,879 7
Louisville, Kentucky........................ 1,448 5 1,448 5 1,016 4
Greensboro, North Carolina (b).............. 520 2 856 3 856 3
Total Operating Properties 51,345 145 51,336 145 53,311 153
------------ -------- ------------ -------- ------------ --------

Properties Under Development
West Region
Southern California ........................ 802 2 918 2 380 1
Phoenix, Arizona ........................... 332 1
Denver, Colorado ........................... 218 1
Central Region
Dallas, Texas.............................. 620 1 620 1
East Region
Orlando, Florida ........................... 492 1
Louisville, Kentucky........................ 432 1
------------ -------- ------------ -------- ------------ --------
Total Properties Under Development 802 2 1,538 3 2,474 6
------------ -------- ------------ -------- ------------ --------
Total Properties 52,147 147 52,874 148 55,785 159
------------ -------- ------------ -------- ------------ --------

Less: Joint Venture Properties (a) (b) (c) 5,239 20 6,503 23 6,504 23
------------ -------- ------------ -------- ------------ --------

Total Properties Owned 100% 46,908 127 46,371 125 49,281 136
============ ======== ============ ======== ============ ========

(a) Includes properties held in joint ventures as follows: one property with
320 apartment homes (321 apartment homes at December 31, 1999) in Colorado
in which we own a 50% interest, the remaining interest is owned by an
unaffiliated private investor; and 19 properties with 4,919 apartment homes
in Nevada 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
and 1999 balances include 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.
(c) Includes the combination of operations at January 1, 2000 of two adjacent
properties.

At December 31, 2001, we had two completed properties in lease-up as
follows:

Number of Estimated
Apartment % Leased Date of Date of
Property and Location Homes at 3/7/02 Completion Stabilization
- ---------------------------------------- --------------- ------------ ------------- ----------------

Camden Farmers Market
Dallas, TX........................... 620 83% 2Q01 2Q02
Camden Crown Valley
Mission Viejo, CA.................... 380 77% 3Q01 2Q02

At December 31, 2001, we had two development properties under construction
as follows:

Number of Estimated Estimated Estimated
Apartment Cost Date of Date of
Property and Location Homes ($ millions) Completion Stabilization
- ---------------------------------------------- ------------ -------------- ------------- --------------

Camden Harbour View
Long Beach, CA ............................ 538 $ 127.0 3Q03 4Q04
Camden Vineyards
Murrieta, CA .............................. 264 35.0 4Q02 2Q03
--------- ----------
Total development properties ............ 802 $ 162.0
========= ==========

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 as they become
occupied. All construction and carrying costs are capitalized and reported on
the balance sheet in "Properties under development, including land" until
individual buildings are completed. Carrying charges are principally interest
and real estate taxes which are capitalized as part of properties under
development. Upon 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 stabilization, 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 are 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 include $143.6 million related to
properties currently under development. Of this amount, $46.2 million relates to
our two development projects currently under construction. Additionally, we have
$97.4 million invested in land held for future development. Included in this
amount is $51.8 million in land development projects located in Houston, Dallas,
and Long Beach. We are currently in the planning phase with respect to these
properties to further develop apartment homes in these areas. We may also sell
certain parcels of undeveloped land to third parties for commercial and retail
development.

During 2001, we completed construction on 17 for-sale townhomes in the
downtown Dallas area at a total cost of approximately $5.5 million. At December
31, 2001, five units had been sold at a total sales price of approximately $1.6
million. The proceeds received from the townhome sales are included in other
income in our consolidated financial statements. Other expenses in our
consolidated financial statements represents the construction cost associated
with the townhomes sold during the year.

At December 31, 2001 and 2000, our investment in various geographic areas,
excluding investments in joint ventures and third party development properties,
was as follows:

(Dollars in thousands)
2001 2000
----------------- ------------------
West Region
Las Vegas, Nevada....................$ 408,662 15% $ 404,957 15%
Southern California.................. 255,106 9 212,785 8
Denver, Colorado..................... 190,331 7 188,507 7
Phoenix, Arizona..................... 143,536 5 121,526 5
Reno, Nevada......................... 44,413 2 43,713 2
Tucson, Arizona...................... 34,230 1 33,699 1
Central Region
Dallas, Texas........................ 400,484 15 388,212 15
Houston, Texas....................... 392,480 14 379,036 15
St. Louis, Missouri.................. 115,721 4 113,655 4
Austin, Texas........................ 70,959 3 70,244 3
Corpus Christi, Texas................ 60,258 2 59,143 2
Kansas City, Missouri................ 36,134 1 35,938 1
East Region
Tampa, Florida....................... 246,450 9 242,776 9
Orlando, Florida..................... 164,485 6 158,972 6
Charlotte, North Carolina............ 79,867 3 78,775 3
Louisville, Kentucky................. 75,867 3 74,595 3
Greensboro, North Carolina........... 17,491 1 17,196 1
----------- ---- ----------- -----
Total Properties $ 2,736,474 100% $ 2,623,729 100%
=========== ==== =========== =====

Third Party Development

Our construction division performs services for our internally developed
construction pipeline, as well as provides services for other third party owners
of multifamily, commercial and retail properties. In addition to providing
construction services to third party multifamily owners, for selected properties
in markets we are comfortable making investments in, we may provide financing
for a portion of the project costs. In connection with this program, we have
entered into agreements with unaffiliated third parties to develop, construct,
and manage five multifamily projects containing a total of 1,667 apartment
homes. We are providing financing for a portion of each project in the form of
notes receivable which mature through 2005. These notes accrue interest at 10%
annually and is being recognized as earned. These notes are secured by second
liens on the assets and partial guarantees by the third party owners. We expect
these notes to be repaid from operating cash flow or proceeds from the sale of
the individual properties. At December 31, 2001 and 2000, these notes had

principal balances totaling $70.0 million and $72.9 million, respectively. We
anticipate funding an additional $10.0 million on these third party development
properties during 2002.

These projects are supported with adequate third party equity to allow us
to earn fees for managing the development, construction and eventual operations
of these properties. The related fees we earned for all projects totaled $2.2
million, $2.2 million and $1.7 million for the years ended December 31, 2001,
2000 and 1999, respectively. Two of the projects were completed and stabilized
operations during 2001. The remaining three projects are all currently under
construction, with one project in the lease-up phase. We expect that the
remaining two projects will begin leasing during 2002.

During 2001, we purchased one completed and stabilized third party
development project and three projects which were in pre-development as they fit
our diversification strategy. All net fees and interest previously recognized on
the pre-development projects were reversed at time of purchase.

Liquidity and Capital Resources

Financial 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 fixed rate debt and
hedging where management believes it is appropriate;
(iv) borrowing on an unsecured basis in order to maintain a
substantial number of unencumbered assets; and
(v) maintaining conservative coverage ratios.

The interest expense coverage ratio, net of capitalized interest, was 3.5,
3.4 and 3.7 times for the years ended December 31, 2001, 2000 and 1999,
respectively. At December 31, 2001, 2000 and 1999, 80.4%, 75.6% and 76.0%
respectively, of our real estate assets (based on invested capital) were
unencumbered. Our weighted average maturity of debt, excluding our line of
credit, was 6.9 years, 5.6 years and 6.1 years at December 31, 2001, 2000 and
1999.

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) normal operating expenses;
(ii) current debt service requirements;
(iii) recurring capital expenditures;
(iv) property development;
(v) investments in third party development properties;
(vi) common share repurchases; and
(vii) distributions on our common and preferred equity.

We consider our long-term liquidity requirements to be the repayment of
maturing debt, including borrowings under our unsecured line of credit, and
funding of acquisitions. 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 concentrate our growth efforts toward selective development
and acquisition opportunities in our current markets, and through the
acquisition of existing operating portfolios and the development of properties
in selected new markets. During the year ended December 31, 2001, we incurred
$76.6 million in development costs and $20.6 million in acquisition costs. We
are developing two properties at a projected aggregate cost of approximately
$162.0 million, $26.6 million of which was incurred during 2001. At year end, we
were obligated for approximately $85.8 million under construction contracts (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. We also seek to selectively dispose of assets
that management believes have a lower projected net operating income growth rate
than the overall portfolio, or no longer conform to our operating and investment
strategies. We intend to continue rebalancing our portfolio with the goal of
limiting any one market to no more than 12% of total real estate assets. We
expect that any such sales should generate capital for acquisitions and new
developments or for debt reduction. Real estate to be disposed of is reported at
the lower of its carrying amount or its estimated fair value, less its cost to
sell. Depreciation expense is not recorded during the period in which such
assets are held for sale.

Dispositions during the year included two parcels of land totaling 22.7
acres located in Houston. We used the net proceeds from these dispositions,
totaling $8.6 million, to reduce indebtedness outstanding under our unsecured
line of credit. Additionally, three properties totaling 1,264 apartment homes
were sold during the year. These properties were held in a joint venture in
which we owned a 44% interest. The gains from these property sales are included
in "Equity in income of joint ventures" in our consolidated statement of
operations.

Net cash provided by operating activities totaled $198.2 million for 2001,
an increase of $31.8 million, or 19.1%, over 2000. This increase was
attributable to an $8.0 million increase in net operating income from the real
estate portfolio for 2001 over the same period in 2000. Equity in income of
joint ventures for 2001 increased $7.8 million over 2000. This increase was due
to the sale in 2001 of three properties held in a joint venture. Fee and asset
management and other income increased a total of $4.4 million over the prior
year, primarily from third party construction fees, interest on notes receivable
and the sale of five townhomes. Additionally, accrued expenses and other
liabilities increased $9.3 million during 2001 primarily from increases in
accrued interest from new unsecured debt issuances.

Net cash used in investing activities totaled $119.6 million for the year
ended 2001 compared to $15.8 million in 2000. For 2001, expenditures for
acquisitions, property development and capital improvements totaled $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. For the year ended 2000, expenditures for property development
and capital improvements were $94.4 million and $27.9 million, respectively.
Additionally, we received $150.1 million in net proceeds from property
dispositions during 2000.

Net cash used in financing activities totaled $77.9 million for the year
ended 2001 compared to $151.3 million for 2000. During 2001, we paid
distributions totaling $119.2 million and paid $26.9 million to repurchase our
outstanding Series A preferred shares. We 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. For the year ended 2000, we paid distributions totaling $112.9 million,
repaid notes payable totaling $107.4 million and repurchased $31.2 million
common shares and units convertible into common shares. These payments were
offset by the issuances of $17.5 million of preferred units, and an increase in
borrowings under our line of credit of $80.0 million.

In 1998, we began repurchasing our common equity securities under a program
approved by our Board of Trust Managers. The plan allows us to repurchase or
redeem up to $200 million of our securities through open market purchases and
private transactions. 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, 2001, we had repurchased approximately 6.9 million common shares and
redeemed approximately 106,000 units convertible into common shares at a total
cost of $180.9 million. No common shares or units convertible into common shares
were repurchased during 2001.

On January 17, 2002, we paid a distribution of $0.61 per share for the
fourth quarter of 2001 to all holders of record of our common shares as of
December 19, 2001, 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, 2001 were $2.44 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 while maintaining what
management believes to be a conservative payout ratio. The dividend payout
ratio, which is calculated by dividing distributions per share by funds from
operations per share, was 69%, 64% and 65% for the years ended December 31,
2001, 2000 and 1999, respectively.

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.

distributions. The preferred units are convertible after 10 years 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, 2001.

Scheduled principal repayments on all notes payable outstanding at December
31, 2001 over the next five years are $39.3 million in 2002, $87.3 million in
2003, $391.8 million in 2004, $61.4 million in 2005, $210.7 million in 2006 and
$416.5 million thereafter. Principal repayments during 2002 will be made using
funds available under our unsecured line of credit.

Financial Flexibility

In August 2001, we amended our line of credit to increase total capacity by
$20 million to $420 million and extended the maturity through August 2004. The
scheduled interest rates are currently based on spreads over LIBOR or Prime. The
scheduled interest rates 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 $200 million or the remaining amount available under
the line of credit. The line of credit is subject to customary financial
covenants and limitations. At year end, we were in compliance with all covenants
and limitations.

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, 2001, we had $263 million available under the unsecured
line of credit and $435.5 million available under our $750 million universal
shelf registration. We have significant unencumbered real estate assets which we
believe could be sold or used as collateral for financing purposes should other
sources of capital not be available.

The following table summarizes notes payable issued during 2001:

Month of Coupon Maturity Interest
Type and Amount Issuance Terms Rate Date Paid Proceeds
- ------------------------------------- ----------- -------------- ----------- ------------ -------------- --------------

$150.0 million senior unsecured notes 02/01 Interest only 7.625% 02/15/11 February 15 $148.3 million
and August 15
$50.0 million senior unsecured notes 02/01 Interest only 7.000% 02/15/06 February 15 $49.5 million
and August 15
$14.5 million medium-term notes 08/01 Interest only 6.790% 08/27/10 March 15 and $14.4 million
September 15
$100.0 million senior unsecured notes 09/01 Interest only 6.750% 09/15/10 March 15 and $99.2 million
September 15

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 2001, we paid off five secured notes totaling $50.7 million and $150
million in unsecured notes matured. The interest rates on the secured notes
ranged from 7.5% to 8.63%, and rates on the unsecured notes were from 6.63% to
6.75%. We incurred prepayment penalties totaling $388,000 in connection with
repayment of four of the secured notes. We repaid both the secured and unsecured
notes using proceeds available under our unsecured line of credit. The secured
notes were prepaid due to our ability to refinance them at significantly lower
interest rates.

At December 31, 2001, the weighted average interest rate on floating rate
debt was 2.89%.

The joint ventures in which we had 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 Risk

We 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. Our policy regarding
the use of derivative financial instruments in managing market risk exposures is
consistent with the prior year and is not expected to change in future years. We
do not use derivative financial instruments for trading or speculative purposes.
As of December 31, 2001, 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, 2001, we had fixed rate debt of $988.1 million and floating
rate debt of $218.9 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 $40.9
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 $2.2 million, holding all other
variables constant.

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 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. Our diluted FFO for the
year ended December 31, 2001 increased $1.6 million over 2000. On a per share
basis, diluted FFO for 2001 increased 1.1% over 2000. This increase in diluted
FFO was primarily due to a $8.0 million increase in net operating income from
our real estate portfolio, and a $1.1 million increase in income from joint
ventures, net of gains on sales of properties held in those joint ventures.
These increases were offset by a $9.9 million impairment provision for
technology investments.

The calculation of basic and diluted FFO for the years ended December 31,
2001, 2000 and 1999 follows:

(In thousands)

2001 2000 1999
---------- --------- ----------

Funds from operations
Net income to common shareholders.................................... $ 58,747 $ 65,053 $ 52,252
Real estate depreciation............................................. 98,400 94,277 87,491
Adjustments for unconsolidated joint ventures........................ (3,032) 3,238 3,936
Extraordinary charge (early retirement of debt)...................... 388
Gain on sales of properties and joint venture interests.............. (2,372) (18,323) (2,979)
---------- --------- ----------
Funds from operations - basic 152,131 144,245 140,700
Preferred share dividends............................................ 2,545 9,371 9,371
Income allocated to units convertible into common shares............. 3,127 2,461 2,014
Adjustments for convertible subordinated debentures.................. 37 197 284
---------- --------- ----------
Funds from operations - diluted $ 157,840 $ 156,274 $ 152,369
========== ========= ==========

Weighted average shares - basic 39,796 38,112 41,236
Common share options and awards granted.............................. 1,234 729 431
Preferred shares..................................................... 1,052 3,207 3,207
Minority interest units.............................................. 2,509 2,547 2,624
Convertible subordinated debentures.................................. 19 105 146
---------- --------- ----------
Weighted average shares - diluted 44,610 44,700 47,644
========== ========= ==========

Results of Operations

Changes in revenues and expenses related to our operating properties from
period to period are primarily due to property developments, dispositions,
acquisitions, and improvements in the performance of the stabilized properties
in the portfolio. Where appropriate, comparisons are made on a dollars-per-
weighted-average-apartment home basis in order to adjust for such changes in the
number of apartment homes owned during each period. Selected weighted average
revenues and expenses per operating apartment home for the three years ended
December 31, 2001 are as follows:

2001 2000 1999
----------- ---------- -----------

Rental income per apartment home per month.................................. $ 686 $ 653 $ 623
Property operating and maintenance per apartment home per year.............. $ 2,541 $ 2,424 $ 2,367
Real estate taxes per apartment home per year............................... $ 895 $ 840 $ 798
Weighted average number of operating apartment homes........................ 45,488 46,501 45,606

2001 Compared to 2000

Earnings before interest, depreciation and amortization increased $9.4
million, or 4.0%, from $237.4 million to $246.8 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 46,501 to
45,488 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 acquisition. Total operating properties we owned 100% were 125
and 122 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.

Our apartment communities generate rental revenue and other income through
the leasing of apartment homes. Revenues from our rental operations comprised
94%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
property operating and maintenance expenses, including real estate taxes. Net
operating income increased $8.0 million, or 3.3%, from $239.4 million to $247.3
million for the years ended December 31, 2000 and 2001, respectively.

Rental income for the year ended December 31, 2001 increased $10.1 million,
or 2.8% over the year ended December 31, 2000. Rental income per apartment home
per month increased $33, or 5.1%, from $653 to $686 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 $2.4 million from $27.0 million to $29.4
million for the years ended December 31, 2000 and 2001, respectively, which
represents a monthly increase of $5 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.

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. Fee and asset
management in 2001 increased $1.1 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 $2.8 million or 2.5%,
from $112.7 million to $115.6 million, but decreased slightly as a percent of
total property income from 28.8% to 28.6%, for the years ended December 31, 2000
and 2001, respectively. On an annualized basis, property operating and
maintenance expenses increased $117 per unit, or 4.8%. The increase in operating
expense was due to significant increases in property insurance costs 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 $1.7 million from $39.1 million to $40.7
million for the years ended December 31, 2000 and 2001, respectively, which
represents an annual increase of $55 per apartment home. The increase was
primarily due to increases in the valuations of properties and increases in
property tax rates.

General and administrative expenses decreased $606,000, from $14.3 million
in 2000 to $13.7 million in 2001, and decreased as a percent of revenues from
3.6% to 3.2%. 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 variable
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 to $10.9
million from $15.3 million for the years ended December 31, 2001 and 2000,
respectively, due to lower development activities during 2001.

Depreciation and amortization increased from $97.0 million to $101.7
million. This increase was due primarily to new development, property
acquisition and capital improvements, partially offset by dispositions during
the third quarter of 2000.

Gains 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. Gains on sales 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 is 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.

Preferred share dividends decreased from $9.4 million in 2000 to $2.5
million in 2001 due to the conversion of 3.1 million preferred shares into
common shares and the redemption of approximately 1.0 million preferred shares
for cash.

2000 Compared to 1999

Earnings before interest, depreciation and amortization increased $21.1
million, or 9.8%, from $216.3 million to $237.4 million for the years ended
December 31, 1999 and 2000, respectively. The weighted average number of
apartment homes increased by 895 apartment homes, or 1.9%, from 45,606 to 46,501
for the years ended December 31, 1999 and 2000, respectively. Total operating
properties we owned 100% were 122 and 130 at December 31, 2000 and 1999,
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.

Our apartment communities generate rental revenue and other income through
the leasing of apartment homes. Revenues from our rental operations comprised
97% and 98% of our total revenues for the years ended December 31, 2000 and
1999, respectively. Our primary financial focus for our apartment communities is
net operating income. Net operating income represents total property revenues
less property operating and maintenance expenses, including real estate taxes.
Net operating income increased $20.4 million, or 9.3%, from $218.9 million to
$239.4 million for the years ended December 31, 1999 and 2000, respectively.

Rental income for the year ended December 31, 2000 increased $22.9 million,
or 6.7% over the year ended December 31, 1999. Rental income per apartment home
per month increased $30, or 4.8%, from $623 to $653 for the years ended December
31, 1999 and 2000, 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. Additionally, overall
average occupancy increased from 93.4% for the year ended December 31, 1999 to
94.0% for the year ended December 31, 2000.

Other property income increased $4.9 million from $22.1 million to $27.0
million for the years ended December 31, 1999 and 2000, respectively, which
represents a monthly increase of $8 per apartment home. This increase in other
property income was primarily due to increases from revenue sources such as
telephone, cable and water.

Other income increased $3.9 million from $1.9 million to $5.8 million for
the years ended December 31, 1999 and 2000, respectively. This increase was
primarily due to interest earned on our investments in third party development
properties which increased $38.5 million during the year.

Property operating and maintenance expenses increased $4.8 million or 4.4%,
from $108.0 million to $112.7 million, but decreased as a percent of total
property income from 29.7% to 28.8%, for the years ended December 31, 1999 and
2000, respectively. The increase in operating expense was due to a larger number
of apartment homes in operation and an increase 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.

Real estate taxes increased $2.6 million from $36.4 million to $39.1
million for the years ended December 31, 1999 and 2000, respectively, which
represents an annual increase of $42 per apartment home. The increase was
primarily due to increases in the valuations of renovated and developed
properties and increases in property tax rates.

General and administrative expenses increased $3.7 million, from $10.6
million in 1999 to $14.3 million in 2000, and increased as a percent of revenues
from 2.9% to 3.6%. The increase was primarily due to increases in
incentive-based compensation expense, including the vesting of previously issued
and outstanding restricted performance-based compensation awards related to
successful implementation of our land development strategy, and expenses related
to our information technology initiatives. Excluding the vesting of the
restricted awards associated with the land sales, the general and administrative
expense percentage would have been 3.0% of revenues for the year ended December
31, 2000.

Interest expense increased from $57.9 million in 1999 to $69.0 million in
2000 primarily due to interest on debt incurred to fund new development and
repurchase securities under our repurchase program. Interest capitalized was
$15.3 million and $16.4 million for the years ended December 31, 2000 and 1999,
respectively.

Depreciation and amortization increased from $89.5 million to $97.0
million. This increase was due primarily to the completion of new development
and capital expenditures over the past two years, partially offset by property
dispositions.

Gains on sales 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 is 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. Gains on sales of properties for the
year ended December 31, 1999 totaled $3.0 million due to the sale of two
multifamily properties containing 358 units and the sale of our investment in
two commercial office buildings. The gains recorded on these 1999 dispositions
were partially offset by a loss on the sale of a retail/commercial center. The
gains in 1999 do not include a loss on the sale of a 408 unit property held in a
joint venture of $738,000 which is included in "Equity in income of joint
ventures."

Distributions on units convertible into perpetual preferred shares
increased $4.6 million, from $8.3 million for the year ended December 31, 1999
to $12.8 million for the year ended December 31, 2000. This increase is
attributable to our issuances of perpetual preferred units during 1999 and 2000
as follows: $100 million in February 1999; $35.5 million in August and September
of 1999; and $17.5 million in January 2000.

Inflation

We lease apartments under lease terms generally ranging from six to
thirteen months. Management believes that such short-term lease contracts lessen
the impact of inflation due to the ability to adjust rental rates to market
levels as leases expire.

Impact of New Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities", which is effective for all
fiscal years beginning after June 15, 2000. SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities. Under SFAS No. 133, certain contracts that were not formerly
considered derivatives may now meet the definition of a derivative. We have
adopted SFAS No. 133 effective January 1, 2001. The adoption of SFAS No. 133 did
not have a material impact on our financial position, results of operations, or
cash flows.

In June 2001, FASB issued SFAS No. 141, "Business Combinations", which is
effective for business combinations initiated after June 30, 2001. SFAS No. 141
requires all business combinations to be accounted for under the purchase method
and that the pooling-of-interest method is no longer allowed. The adoption of
SFAS No. 141 will not have a material effect on our financial position, results
of operations, or cash flows.

In June 2001, FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets", which is effective for fiscal years beginning after December 15, 2001.
SFAS No. 142 requires that goodwill no longer be amortized to earnings, but
instead be reviewed for impairment. The adoption of SFAS No. 142 will not have a
material impact on our financial position, results of operations, or cash flows.

In June 2001, FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations", which is effective for fiscal years beginning after June 15, 2002.
SFAS No. 143 addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. The adoption of SFAS No. 143 will not have a material
impact on our financial position, results of operations or cash flows.

In August 2001, FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long- Lived Assets", which is effective for fiscal years beginning
after December 15, 2001. SFAS No. 144 addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. The adoption of
SFAS No. 144 will not have a material impact on our financial position, results
of operations or cash flows.

INDEPENDENT AUDITORS' REPORT

To the Shareholders of Camden Property Trust

We have audited the accompanying consolidated balance sheets of Camden Property
Trust as of December 31, 2001 and 2000, and the related consolidated statements
of operations, shareholders' equity and cash flows for each of the three years
in the period ended December 31, 2001. These financial statements are the
responsibility of the management of Camden Property Trust. Our responsibility is
to express an opinion on the financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Camden Property Trust at December
31, 2001 and 2000, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2001 in conformity with
accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Houston, Texas
January 29, 2002

CAMDEN PROPERTY TRUST
CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

December 31,
-----------------------------
2001 2000
------------- --------------

Assets
Real estate assets, at cost
Land........................................................................... $ 362,717 $ 350,248
Buildings and improvements..................................................... 2,230,161 2,124,740
2,592,878 2,474,988
Less: accumulated depreciation................................................. (422,154) (326,723)
------------- -------------
Net operating real estate assets............................................ 2,170,724 2,148,265
Properties under development, including land................................... 143,596 148,741
Investment in joint ventures................................................... 17,073 22,612
Investment in third party development properties............................... 69,983 72,893
------------- -------------
Total real estate assets................................................. 2,401,376 2,392,511

Accounts receivable-- affiliates.................................................. 4,586 3,236
Notes receivable-- affiliates..................................................... 1,800 1,800
Other assets, net ................................................................ 33,121 23,923
Cash and cash equivalents......................................................... 5,625 4,936
Restricted cash................................................................... 3,157 4,475
------------- -------------
Total assets................................................................ $ 2,449,665 $ 2,430,881
============= =============

Liabilities and Shareholders' Equity
Liabilities
Notes payable:
Unsecured................................................................... $ 923,890 $ 799,026
Secured..................................................................... 283,157 339,091
Accounts payable............................................................... 13,337 13,592
Accrued real estate taxes...................................................... 28,378 26,781
Accrued expenses and other liabilities......................................... 46,275 36,981
Distributions payable.......................................................... 30,298 28,900
------------- -------------
Total liabilities........................................................... 1,325,335 1,244,371

Minority interests:
Units convertible into perpetual preferred shares............................ 149,815 149,815
Units convertible into common shares......................................... 56,264 60,562
------------ ------------
Total minority interests................................................ 206,079 210,377

7.33% Convertible Subordinated Debentures......................................... - 1,950

Shareholders' Equity
Convertible preferred shares of beneficial interest; $2.25
Series A Cumulative Convertible, $0.01 par value per
share, liquidation preference of $25 per 10,000 shares
authorized, 4,165 issued and outstanding at December 31, 2000 share, ........ - 42
Common shares of beneficial interest; $0.01 par value per share; 100,000
shares authorized; 48,627 and 45,760 issued at
December 31, 2001 and 2000, respectively..................................... 476 450
Additional paid-in capital..................................................... 1,297,239 1,312,323
Distributions in excess of net income.......................................... (194,718) (153,972)
Unearned restricted share awards............................................... (8,621) (6,680)
Less: treasury shares, at cost .............................................. (176,125) (177,980)
------------- -------------
Total shareholders' equity.................................................. 918,251 974,183
------------- -------------
Total liabilities and shareholders' equity.............................. $ 2,449,665 $ 2,430,881
============= =============

See Notes to Consolidated Financial Statements.

CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

Year Ended December 31,
----------------------------------------
2001 2000 1999
---------- ---------- ----------

Revenues
Rental income.......................................................$ 374,187 $ 364,111 $ 341,168
Other property income............................................... 29,433 27,030 22,148
---------- ---------- ----------
Total property income............................................. 403,620 391,141 363,316
Equity in income of joint ventures.................................. 8,527 765 683
Fee and asset management............................................ 6,951 5,810 5,373
Other income........................................................ 9,117 5,823 1,924
---------- ---------- ----------
Total revenues.................................................... 428,215 403,539 371,296
---------- ---------- ----------

Expenses
Property operating and maintenance.................................. 115,572 112,727 107,972
Real estate taxes................................................... 40,717 39,054 36,410
General and administrative.......................................... 13,743 14,349 10,606
Impairment provision for technology investments..................... 9,864 - -
Other expenses...................................................... 1,511 - -
Interest............................................................ 69,841 69,036 57,856
Depreciation and amortization....................................... 101,660 96,966 89,516
---------- ---------- ----------
Total expenses.................................................... 352,908 332,132 302,360
---------- ---------- ----------

Income before gain on sales of properties and joint venture interests,
minority interests and extraordinary charge............................. 75,307 71,407 68,936
Gain on sales of properties and joint venture interests ................ 2,372 18,323 2,979
Income allocated to minority interests
Distributions on units convertible into perpetual preferred shares. (12,872) (12,845) (8,278)
Income allocated to units convertible into common shares........... (3,127) (2,461) (2,014)
---------- ---------- ----------
Income before extraordinary charge...................................... 61,680 74,424 61,623
Extraordinary charge (early retirement of debt)......................... (388) - -
---------- ---------- ----------
Net Income.............................................................. 61,292 74,424 61,623
Preferred share dividends............................................... (2,545) (9,371) (9,371)
---------- ---------- ----------
Net income to common shareholders.......................................$ 58,747 $ 65,053 $ 52,252
========== ========== ==========

Basic earnings per share before extraordinary charge....................$ 1.49 $ 1.71 $ 1.27
Basic earnings per share................................................ 1.48 1.71 1.27

Diluted earnings per share before extraordinary charge.................. 1.42 1.63 1.23
Diluted earnings per share.............................................. 1.41 1.63 1.23

Distributions declared per common share.................................$ 2.44 $ 2.25 $ 2.08

Weighted average number of common shares outstanding.................... 39,796 38,112 41,236
Weighted average number of common and common dilutive 41,603 41,388 44,291
equivalent shares outstanding......................................

See Notes to Consolidated Financial Statements.

CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In thousands, except per share amounts)

Preferred Common Unearned
Shares of Shares of Additional Distributions Restricted Treasury
Beneficial Beneficial Paid-In in Excess of Share Shares,
Interest Interest Capital Net Income Awards at cost
---------- ---------- ----------- ------------- ---------- -----------

Shareholders' Equity, January 1, 1999.....................$ 42 $ 447 $1,299,539 $ (98,897) $ (10,039) $ (20,704)

Net income to common shareholders....................... 52,252
Common shares issued under dividend reinvestment plan... 28
Conversion of debentures (7 shares)..................... 169
Restricted shares issued under benefit plan (90 shares). 1 2,041 1,559
Employee Stock Purchase Plan............................ (522)
Restricted shares placed into Rabbi Trust (35 shares)... 5 (5)
Common share options exercised (80 shares).............. 1,806
Conversion of Operating Partnership units (23 shares)... 479
Repurchase of minority interest units................... 100
Repurchase of common shares (4,890 shares).............. (126,073)
Cash distributions ($2.08 per share).................... (85,553)
---------- ---------- ----------- ------------- ---------- -----------
Shareholders' Equity, December 31, 1999................... 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)
========== ========== =========== ============= ========== ===========

See Notes to Consolidated Financial Statements.

CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Year Ended December 31,
-----------------------------------
2001 2000 1999
---------- ---------- -----------

Cash Flow from Operating Activities
Net income ..........................................................................$ 61,292 $ 74,424 $ 61,623
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization ..................................................... 101,660 96,966 89,516
Equity in income of joint ventures, net of cash received........................... 7,411 1,959 2,491
Gain on sales of properties and joint venture interests............................ (2,372) (18,323) (2,979)
Impairment provision for technology investments.................................... 9,864
Extraordinary charge (early retirement of debt).................................... 388
Income allocated to units convertible into common shares........................... 3,127 2,461 2,014
Accretion of discount on unsecured notes payable................................... 421 403 320
Net change in operating accounts................................................... 16,422 8,546 11,036
---------- ---------- -----------
Net cash provided by operating activities..................................... 198,213 166,436 164,021

Cash Flow from Investing Activities
Increase in real estate assets..................................................... (122,088) (120,636) (213,352)
Net proceeds from sales of properties and townhomes................................ 10,377 150,141 13,226
Net proceeds from sale of joint venture interests.................................. 5,465
Increase in investment in joint ventures........................................... (1,881) (2,702) (2,012)
Decrease in investment in joint ventures........................................... 1,505
Increase in investment in third party development properties....................... (26,349) (38,451) (23,530)
Decrease in investment in third party development properties....................... 29,259
Increase in technology investments................................................. (7,249) (2,615)
Other.............................................................................. (1,696) (1,488) (1,873)
---------- ---------- -----------
Net cash used in investing activities......................................... (119,627) (15,751) (220,571)

Cash Flow from Financing Activities
Net increase (decrease) in unsecured lines of credit and short-term borrowings..... (39,000) 80,000 (66,000)
Proceeds from notes payable........................................................ 326,868 253,380
Repayment of notes payable ........................................................ (219,359) (107,376) (25,178)
Proceeds from issuance of preferred units, net..................................... 17,136 132,679
Distributions to shareholders and minority interests .............................. (119,226) (112,850) (108,253)
Repurchase of preferred shares..................................................... (26,922)
Repurchase of common shares and units.............................................. (31,203) (128,929)
Extraordinary charge (early retirement of debt).................................... (388)
Other.............................................................................. 130 3,027 (1,279)
---------- ---------- -----------
Net cash (used in) provided by financing activities........................... (77,897) (151,266) 56,420
---------- ---------- -----------
Net increase (decrease) in cash and cash equivalents.......................... 689 (581) (130)
Cash and cash equivalents, beginning of period.......................................... 4,936 5,517 5,647
---------- ---------- -----------
Cash and cash equivalents, end of period................................................$ 5,625 $ 4,936 $5,517
========== =========== ==========

Supplemental Information
Cash paid for interest, net of interest capitalized..................................$ 65,276 $ 70,310 $ 54,226
Interest capitalized................................................................. 10,920 15,303 16,396

Supplemental Schedule of Noncash Investing and Financing Activities
Conversion of 7.33% subordinated debentures to common shares, net ...................$ 1,950 $ 1,456 $ 169
Value of shares issued under benefit plans, net...................................... 5,222 5,873 2,047
Conversion of operating partnership units to common shares........................... 1,179 144 479
Conversion of preferred shares to common shares...................................... 31
Fair value adjustment from the acquisition of Oasis Residential, Inc.:
Fair value of assets acquired................................................. 835
Liabilities assumed........................................................... 835
Notes receivable issued upon sale of real estate assets.............................. 10,912

See Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Business

Camden Property Trust is a self-administered and self-managed real estate
investment trust (REIT) organized on May 25, 1993. We, with our subsidiaries,
report as a single business segment, with activities related to the ownership,
development, construction and management of multifamily apartment communities.
As of December 31, 2001, we owned interests in, operated or were developing 147
multifamily properties containing 52,147 apartment homes located in nine states.
Two of our multifamily properties containing 802 apartment homes were under
development at December 31, 2001. Additionally, we have several sites which we
intend to develop into multifamily apartment communities.

Property Update

During 2001, we completed construction on the following two development
properties totaling 1,000 apartment homes: Camden Farmers Market in Dallas and
Camden Crown Valley in Southern California. Stabilization occurred during 2001
at three properties totaling 1,256 apartment homes: Camden Oxmoor in Louisville,
Camden Lee Vista in Orlando and Camden Copper Square in Phoenix. We consider a
property stabilized once it reaches 90% occupancy, or generally one year from
opening the leasing office, with some allowances for larger than average
properties. We expect stabilization to occur at the completed development
properties during 2002. Additionally, we have two properties currently under
development: Camden Harbour View, a 538-unit property located in Long Beach,
California and Camden Vineyards, a 264-unit property located in Murrieta,
California.

2. Summary of Significant Accounting Policies

Principles of Consolidation. The consolidated financial statements include
our assets, liabilities and operations and those of our wholly-owned
subsidiaries and partnerships in which our aggregate ownership is greater than
50% and we exercise elements of control. Those entities owned 50% or less where
significant influence is in effect are accounted for using the equity method.
Those entities owned less than 50% where significant influence is not exercised
are accounted for using the cost method. All significant intercompany accounts
and transactions have been eliminated in consolidation.

Use of Estimates. The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, results of operations
during the reporting periods and related disclosures. Actual results could
differ from those estimates.

Reportable Segments. We follow Financial Accounting Standards Board
("FASB") Statement No. 131, "Disclosures about Segments of an Enterprise and
Related Information" ("SFAS No. 131"). SFAS No. 131 establishes standards for
reporting financial and descriptive information about an enterprise's reportable
segments. We have determined that we have one reportable segment, with
activities related to the ownership, development, construction and management of
multifamily communities. Our apartment communities generate rental revenue and
other income through the leasing of apartment homes, which comprised 94%, 97%
and 98% of our total consolidated revenues for the years ended December 31,
2001, 2000 and 1999, respectively. Although our multifamily communities are
geographically diversified throughout the United Sates, management evaluates
operating performance on an individual property level. Where appropriate, we
provide information about our real estate portfolio on a geographic basis in
order to illustrate the concentration of market risk associated with our
portfolio.

Operating Partnership and Minority Interests. Approximately 24% of our
multifamily apartment units at December 31, 2001 were held in Camden Operating,
L.P. This operating partnership has issued both common and preferred limited
partnership units. As of December 31, 2001, we held 82.8% of the common limited
partnership units and the sole 1% general partnership interest of the operating
partnership. The remaining 16.2% of the common limited partnership units are
primarily held by former officers, directors and investors of Paragon Group,
Inc., which we acquired in 1997, who collectively owned 1,918,737 common limited
partnership units at December 31, 2001. Each common limited partnership unit is
redeemable for one common share of Camden or cash at our election. Holders of
common limited partnership units are not entitled to rights as shareholders
prior to redemption of their common limited partnership units. No member of our
management owns common limited partnership units and only two of our eight Trust
Managers own common limited partnership units.

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 on or after the fifth
anniversary of issuance at par plus the amount of any accumulated and unpaid
distributions. The preferred units are convertible after 10 years by the holder
into corresponding Series B or C Cumulative Redeemable Perpetual Preferred
Shares. The preferred units are subordinate to present and future debt.

In conjunction with our acquisition of Oasis Residential, Inc. in 1998, we
acquired the controlling managing member interest in Oasis Martinique, LLC which
owns one property in Orange County, California and is included in our
consolidated financial statements. The remaining interests comprising 754,270
units are exchangeable into 572,490 of our common shares.

Minority interests in the accompanying consolidated financial statements
relate to holders of common and preferred limited partnership units of Camden
Operating, L.P. and units in Oasis Martinique, LLC.

Cash and Cash Equivalents. All cash and investments in money market
accounts and other securities with a maturity of three months or less at the
date of purchase are considered to be cash and cash equivalents.

Restricted Cash. Restricted cash mainly consists of escrow deposits held by
lenders for property taxes, insurance and replacement reserves. Substantially
all restricted cash is invested in short-term securities.

Real Estate Assets, at Cost. Real estate assets are carried at cost plus
capitalized carrying charges. Expenditures directly related to the development,
acquisition and improvement of real estate assets, excluding internal costs
relating to acquisitions, are capitalized at cost as land, buildings and
improvements. All construction and carrying costs are capitalized and reported
on the balance sheet in "Properties under development, including land" until
individual buildings are completed. Upon 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. All
operating expenses, excluding depreciation, associated with occupied apartment
homes for properties in the development and leasing phase are expensed against
revenues generated by those apartment homes as they become occupied. All
apartment homes are considered operating upon achieving 90% occupancy, or
generally one year from opening the leasing office, with some allowances for
larger than average properties, and we begin expensing all items that were
previously considered carrying costs.

Real estate to be disposed of is reported at the lower of its carrying
amount or its estimated fair value, less its cost to sell. Depreciation expense
is not recorded during the period in which such assets are held for sale.

We capitalized $26.7 million and $27.9 million in 2001 and 2000,
respectively, of renovation and improvement costs which we believe extended the
economic lives and enhanced the earnings of our multifamily properties.

Carrying charges, principally interest and real estate taxes, of land under
development and buildings under construction are capitalized as part of
properties under development and buildings and improvements to the extent that
such charges do not cause the carrying value of the asset to exceed its net
realizable value. Capitalized interest was $10.9 million in 2001, $15.3 million
in 2000 and $16.4 million in 1999. Capitalized real estate taxes were $2.3
million in 2001, $2.9 million in 2000 and $3.2 million in 1999.

All initial buildings and improvements costs are depreciated over their
remaining estimated useful lives of 5 to 35 years using the straight line
method. Capital improvements, including carpet, appliances and HVAC unit
replacements, subsequent to initial construction are depreciated over their
expected useful lives of 3 to 15 years using the straight line method.

Property operating and maintenance expenses included normal repairs and
maintenance expenses which totaled $27.2 million in 2001, $27.6 million in 2000
and $24.5 million in 1999.

Other Assets, Net. Other assets in our consolidated financial statements
include deferred financing costs, non-real estate leasehold improvements and
equipment, prepaid expenses and other miscellaneous receivables. Deferred
financing costs are amortized over the terms of the related debt on the straight
line method. Leasehold improvements and equipment are depreciated on the
straight line method over the shorter of the expected useful lives or the lease
terms which range from 3 to 10 years. Accumulated depreciation and amortization
for such assets was $12.4 million in 2001 and $9.0 million in 2000.

Interest Rate Swap Agreements. The differential to be paid or received on
interest rate swap agreements is accrued as interest rates change and is
recognized over the life of the agreements as an increase or decrease in
interest expense. We do not use these instruments for trading or speculative
purposes.

Income Recognition. In December 1999, the SEC issued Staff Accounting
Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements." SAB No.
101 provides guidance on revenue recognition as well as the presentation and
disclosure of revenue in financial statements for all public companies. Our
rental and other property income is recorded when due from residents and is
recognized monthly as it is earned. Our apartment homes are rented to residents
on lease terms generally ranging from six to thirteen months, with monthly
payments due in advance. Interest, fee and asset management and all other
sources of income are recognized as earned. We had been following the criteria
set forth in SAB No. 101 to determine when revenue can be recognized, and
therefore our adoption of SAB No. 101 during 2000 did not have a material impact
on our financial statements.

Rental Operations. We own and operate multifamily apartment homes that are
rented to residents. Two of our properties are subject to rent control or rent
stabilization. Operations of apartment properties acquired are recorded from the
date of acquisition in accordance with the purchase method of accounting. In
management's opinion, due to the number of residents, the type and diversity of
submarkets in which the properties operate, and the collection terms, there is
no concentration of credit risk.

Reclassifications. Certain reclassifications have been made to amounts in
prior year financial statements to conform with current year presentations.

New Accounting Pronouncements. In June 1998, FASB issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which is effective for all fiscal years
beginning after June 15, 2000. SFAS No. 133, as amended, establishes accounting
and reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts and for hedging activities. Under SFAS
No. 133, certain contracts that were not formerly considered derivatives may now
meet the definition of a derivative. We have adopted SFAS No. 133 effective
January 1, 2001. The adoption of SFAS No. 133 did not have a material impact on
our financial position, results of operations, or cash flows.

and that the pooling-of-interest method is no longer allowed. The adoption of
SFAS No. 141 will not have a material effect on our financial position, results
of operations, or cash flows.

3. Income Taxes

We have maintained and intend to maintain our election as a REIT under the
Internal Revenue Code of 1986, as amended. As a result, we generally will not be
subject to federal taxation to the extent we distribute 90% (95% in 2000 and
1999) of our REIT taxable income to our shareholders and satisfy certain other
requirements. Accordingly, no provision for federal income taxes from REIT
operations has been included in the accompanying consolidated financial
statements. If we fail to qualify as a REIT in any taxable year, then we will be
subject to federal income taxes at regular corporate rates, including any
applicable alternative minimum tax. Taxable income from non-REIT activities
managed through taxable REIT subsidiaries is subject to applicable federal,
state and local income taxes.

The following table reconciles net income to common shareholders to REIT
taxable income for the years ended December 31, 2001, 2000 and 1999 (in 000's):

Year Ended December 31,
---------------------------------------
2001 2000 1999
----------- ---------- ----------

Net income to common shareholders........................................ $ 58,747 $ 65,053 $ 52,252
Add: Net loss of taxable REIT subsidiaries included above.............. (3,525)
----------- ---------- ----------
Net income from REIT operations.......................................... 62,272 65,053 52,252
Add: Book depreciation and amortization................................ 101,639 96,966 89,516
Less: Tax depreciation and amortization................................ (81,167) (77,284) (71,379)
Book/tax difference on gains/losses from capital transactions.......... 5,374 7,254 (2,979)
Other book/tax difference, net......................................... (2,099) 3,030 6,969
----------- ---------- ----------
REIT taxable income...................................................... 85,499 95,019 74,379
Less: Dividends paid deduction......................................... (102,757) (96,198) (94,925)
----------- ---------- ----------
Dividends paid in excess of taxable income .............................. $ (17,258) $ (1,179) $ (20,546)
=========== ========== ==========

A schedule of per share distributions we paid and reported to our
shareholders is set forth in the following tables:

Year Ended December 31,
-----------------------------------
Common Share Distributions 2001 2000 1999
- -------------------------- -------- --------- --------

Ordinary income........................................................ $ 2.31 $ 1.71 $ 2.08
20% Long-term capital gain............................................. 0.11 0.11
25% Sec. 1250 capital gain............................................. 0.02 0.43
-------- --------- --------
Total............................................................... $ 2.44 $ 2.25 $ 2.08
======== ========= ========

Percentage of distributions representing tax preference items.............. 10.773% 12.090% 12.187%

Year Ended December 31
-----------------------------------
Preferred Share Dividends 2001 2000 1999
- ------------------------- --------- -------- --------
Ordinary income............................................................ $ 1.24 $ 1.71 $ 2.25
20% Long-term capital gain................................................. 0.06 0.11
25% Sec. 1250 capital gain................................................. 0.01 0.43
--------- -------- --------
Total................................................................... $ 1.31 $ 2.25 $ 2.25
========= ======== ========

4. Earnings Per Share

Basic earnings per share is computed using net income to common
shareholders 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,
----------------------------------------
2001 2000 1999
--------- --------- ---------

BASIC EARNINGS PER SHARE
Weighted average common shares outstanding....................... 39,796 38,112 41,236
========= ========= =========
Basic earnings per share..................................... $ 1.48 $ 1.71 $ 1.27
========= ========= =========

DILUTED EARNINGS PER SHARE
Weighted average common shares outstanding....................... 39,796 38,112 41,236
Shares issuable from assumed conversion of:
Common share options and awards granted...................... 1,234 729 431
Units convertible into common shares......................... 573 2,547 2,624
--------- --------- ---------
Weighted average common shares outstanding, as adjusted ......... 41,603 41,388 44,291
========= ========= =========
Diluted earnings per share................................... $ 1.41 $ 1.63 $ 1.23
========= ========= =========

EARNINGS FOR BASIC AND DILUTED COMPUTATION
Net income........................................................ $ 61,292 $ 74,424 $ 61,623
Less: preferred share dividends................................... 2,545 9,371 9,371
--------- --------- ---------
Net income to common shareholders (basic earnings per share
computation)............................................... 58,747 65,053 52,252
Income allocated to units convertible into common shares.......... 2,461 2,014
--------- --------- ---------
Net income to common shareholders, as adjusted (diluted
earnings per share computation).............................. $ 58,747 $ 67,514 $ 54,266
========= ========= =========

5. Investment in Joint Ventures

In 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. At December 31, 2001, Sierra-Nevada owned 19 apartment communities with
4,919 apartment homes. TMT-Nevada holds an 80% interest in Sierra-Nevada and
Camden USA holds the remaining 20% interest. This transaction was funded with
capital invested by the members of Sierra-Nevada, the assumption of $9.9 million
of existing nonrecourse indebtedness, the issuance of 17 nonrecourse cross
collateralized and cross defaulted loans totaling $180 million and the issuance
of two nonrecourse second lien mortgages totaling $7 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
321 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."

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 "Summary of Significant Accounting Policies."

6. Investments in Third Party Development Properties

The following is a detail of our third party construction subject to notes
receivable as of December 31, 2001:

Number of Budgeted/ Estimated/ Estimated/
Apartment Actual Cost Actual Date Actual Date of
Property and Location Homes ($ millions) of Completion Stabilization
- ----------------------------------------- ----------- ------------ --------------- ----------------

Stabilized
Marina Pointe II
Tampa, FL ........................ 352 $ 29 1Q01 3Q01
Creekside
Denver, CO ....................... 279 33 3Q01 3Q01
In lease-up
Ybor City
Tampa, FL ........................ 454 40 1Q02 4Q02
Under Construction
Little Italy
San Diego, CA .................... 160 36 4Q02 3Q03
Otay Ranch
San Diego, CA .................... 422 57 1Q03 4Q03
----------- -----------
Total Third Party Development ........... 1,667 $ 195
============ ===========

7. Notes Payable

The following is a summary of our indebtedness:

(In millions)

December 31,
-------------------------
2001 2000
----------- -----------

Unsecured Line of Credit and Short Term Borrowings...................................... $ 157.0 $ 196.0

Senior Unsecured Notes
6.63% - 6.75% Notes, due 2001....................................................... 150.0
7.03% Notes, due 2003............................................................... 50.0 50.0
7.14% Notes, due 2004............................................................... 199.4 199.2
7.11% - 7.28% Notes, due 2006....................................................... 174.2 124.3
6.77% Notes, due 2010............................................................... 99.9
7.69% Notes, due 2011............................................................... 149.4
----------- -----------
672.9 523.5
Medium Term Notes
6.68% - 6.74% Notes, due 2002....................................................... 34.5 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
--------- ---------
94.0 79.5
--------- ---------
Total Unsecured Notes................................................................... 923.9 799.0

Secured Notes
7.00% - 8.50% Conventional Mortgage Notes, due 2003 - 2009.......................... 182.5 237.6
3.29% - 7.29% Tax-exempt Mortgage Notes, due 2023-2031.............................. 100.6 101.5
--------- ---------
283.1 339.1
--------- ---------
Total notes payable............................................................ $ 1,207.0 $ 1,138.1
========= =========
Floating rate debt included in unsecured line of credit (2.71% -2.75%).................. $ 157.0 $ 196.0
Floating rate tax-exempt debt included in secured notes (3.29% - 3.35%) ................ $ 62.0 $ 62.6
Net book value of real estate assets subject to secured notes .......................... $ 440.3 $ 577.6

As of December 31, 2001, we had $263 million available under our unsecured
line of credit. The weighted average balance outstanding on the unsecured lines
of credit during the year ended December 31, 2001 was $152.8 million, with a
maximum outstanding balance of $227.0 million.

At December 31, 2001, the weighted average interest rate on floating rate
debt was 2.89%.

During January 2000, we combined our three outstanding shelf registrations
into a single $750 million universal shelf registration, of which $435.5 million
was available at December 31, 2001.

The following table summarizes notes payable issued during 2001:

8. Convertible Subordinated Debentures

In April 1994, we issued $86.3 million aggregate principal amount of 7.33%
Convertible Subordinated Debentures which matured on April 2001. The debentures
were convertible at any time prior to maturity into our common shares. Prior to
maturity, $86.2 million in principal amount of the debentures were converted
into 3.6 million common shares. In addition, $3.2 million of unamortized
debenture issue costs were reclassified into additional paid-in-capital.

9. Incentive and Benefit Plans

We have elected to follow Accounting Principles Board Opinion No. 25,
Accounting for Stock Issuedto Employees ("APB No. 25") and related
interpretations in accounting for our share-based compensation. Under APB No.
25, since the exercise price of share options equals the market price of our
shares at the date of grant, no compensation expense is recorded. Restricted
shares are recorded to compensation expense over the vesting periods based on
the market value on the date of grant, and no compensation expense is recorded
for our Employee Stock Purchase Plan ("ESPP"), since the ESPP is considered non-
compensatory. We have adopted the disclosure-only provisions of SFAS No. 123,
Accounting for Stock- Based Compensation.

Incentive Plan. We have a non-compensatory option plan which was amended in
2000 by our shareholders and trust managers. This amendment resulted in an
increase in the maximum number of common shares available for issuance under the
plan to 10% of the common shares outstanding at any time plus the number of
common shares, if any, held as treasury shares, plus the number of common shares
reserved for issuance upon the conversion of securities convertible into or
exchangeable for common shares. Compensation awards that can be granted under
the plan include various forms of incentive awards including incentive share
options, non-qualified share options and restricted shares. The class of
eligible persons that can receive grants of incentive awards under the plan
consists of non-employee trust managers, key employees, consultants, and
directors of subsidiaries as determined by the compensation committee of our
Board of Trust Managers. No incentive awards may be granted under this plan
after May 27, 2003.

Following is a summary of the activity of the plan for the three years
ended December 31, 2001:

Shares
Available for
Issuance Options and Restricted Shares
------------- -------------------------------------------------------------------
Weighted Weighted Weighted
Average Average Average
2001 2001 2001 Price 2000 2000 Price 1999 1999 Price
------------- --------- ---------- --------- ----------- ---------- ----------

Balance at January 1.................... 1,474,723 3,351,704 $ 28.30 3,311,705 $ 27.50 2,838,499 $ 28.03
Current Year Share Adjustment (a)....... (47,226)

Options
Granted............................. 5,250 25.88 603,072 24.88
Exercised........................... (204,846) 29.65 (147,589) 29.22 (79,650) 22.67
Forfeited .......................... 14,487 (14,487) 26.11 (36,083) 27.09 (139,768) 27.38
------------ ---------- --------- ----------
Net Options..................... 14,487 (219,333) (178,422) 383,654
------------ ---------- --------- ----------

Restricted Shares
Granted............................. (179,560) 179,560 32.06 260,114 26.91 142,826 25.31
Forfeited........................... (19,115) 28.48 (41,693) 27.24 (53,274) 27.01
------------ ---------- --------- ----------
Net Restricted Shares........... (179,590) 160,445 218,421 89,552
------------ ---------- --------- ----------

Balance at December 31.................. 1,262,424 3,292,816 $ 29.21 3,351,704 $ 28.30 3,311,705 $ 27.50
============ ========== ========= ========= ========== ========== =========

Exercisable options at December 31...... 1,991,231 $ 30.50 889,654 $ 28.78 1,056,076 $ 27.86
Vested restricted shares at December 31. 756,661 $ 26.79 655,504 $ 25.56 343,702 $ 25.93

(a) Current year share adjustment reflects repurchase of preferred shares, net
of new shares issued.

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 2001 were exercised
at prices ranging from $22 to $33.25 per share. At December 31, 2001, options
outstanding were at exercise prices ranging from $22 to $33.25 per share. Such
options have a weighted average remaining contractual life of six 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. All of the Oasis options became fully vested upon conversion, and have a
weighted average remaining contractual life of four years. As of December 31,
2001, there were 543,451 Oasis options outstanding, which are exercisable at
prices ranging from $28.66 to $33.76 per share.

The fair value of each option grant was estimated on the date of grant
utilizing the Black-Scholes option pricing model with the following weighted
average assumptions used for grants in 2000 and 1999, respectively: risk-free
interest rates of 6.6% and 4.9%, expected life of ten years, dividend yield of
6.7% and 7.6%, and expected share volatility of 13.4% and 13.7%. The weighted
average fair value of options granted in 2000 and 1999, respectively, was $2.54
and $0.91 per share. There were no options granted in 2001.

Restricted shares have vesting periods of up to ten years. The compensation
cost for restricted shares has been recognized at the fair market value of our
shares. During 2000, we accelerated vesting of 180,634 restricted shares, which
had a weighted average price of $27.74, in connection with the successful
implementation of our land development strategy.

Employee Stock Purchase Plan. In July 1997, we established and commenced an
ESPP for all active employees, officers, and trust managers who have completed
one year of continuous service. Participants may elect to purchase Camden common
shares through payroll or director fee deductions and/or through quarterly
contributions. At the end of each six-month offering period, each participant's
account balance is applied to acquire common shares on the open market at 85% of
the market value, as defined, on the first or last day of the offering period,
whichever price is lower. Effective for the 2000 plan year, each participant
must hold the shares purchased for nine months in order to receive the discount.
A participant may not purchase more than $25,000 in value of shares during any
plan year, as defined. No compensation expense was recognized for the difference
in price paid by employees and the fair market value of our shares at the date
of purchase. There were 28,747, 35,900 and 98,456 shares purchased under the
ESPP during 2001, 2000 and 1999, respectively. The weighted average fair value
of ESPP shares purchased in 2001, 2000, and 1999 was $35.80, $28.67 and $27.42
per share, respectively. On January 10, 2002, 7,670 shares were purchased under
the ESPP related to the 2001 plan year.

If we applied the recognition 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,
----------------------------------
2001 2000 1999
---------- ---------- ----------
Net income to common shareholders.............$ 58,310 $ 64,317 $ 51,076
Basic earnings per share......................$ 1.47 $ 1.69 $ 1.24
Diluted earnings per share....................$ 1.40 $ 1.62 $ 1.20

The effects of applying SFAS No. 123 in this pro forma disclosure are not
indicative of future amounts.

Rabbi Trust. In February 1997, we established a rabbi trust in which salary
and bonus amounts awarded to certain officers under the share incentive plan and
restricted shares awarded to certain officers and trust managers may be
deposited. We account for the rabbi trust similar to a compensatory stock option
plan. At December 31, 2001, approximately 1,041,824 restricted shares were held
in the rabbi trust. At December 31, 2001 and 2000, $3.9 million and $2.7
million, respectively, was due to us under this plan, and is included in
"Accounts receivable-affiliates" in our consolidated financial statements.

401(k) Savings Plan. We have a 401(k) savings plan which is a voluntary
defined contribution plan. Under the savings plan, every employee is eligible to
participate beginning on the earlier of January 1 or July 1 following the date
the employee has completed six months of continuous service with us. Each
participant may make contributions to the savings plan by means of a pre-tax
salary deferral which may not be less than 1% nor more than 15% of the
participant's compensation. The federal tax code limits the annual amount of
salary deferrals that may be made by any participant. We may make matching
contributions on the participant's behalf. A participant's salary deferral
contribution will always be 100% vested and nonforfeitable. A participant will
become vested in our matching contributions 33.33% after one year of service,
66.67% after two years of service and 100% after three years of service.
Expenses under the savings plan were not material.

10. Securities Repurchase Program

In 1998, we began repurchasing our securities under a program approved by
our Board of Trust Managers. The plan allows us to repurchase or redeem up to
$200 million of our securities through open market purchases and private
transactions. 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, 2001, we had repurchased approximately 6.9 million common shares and
redeemed approximately 106,000 units convertible into common shares at a total
cost of $180.9 million. No common shares or units convertible into common shares
were repurchased during 2001.

11. Convertible Preferred Shares

The 4,165,000 Series A preferred shares paid a cumulative dividend
quarterly in arrears in an amount equal to $2.25 per share per annum. The
preferred shares generally had no voting rights and had a liquidation preference
of $25 per share plus accrued and unpaid distributions. The preferred shares
were convertible at the option of the holder at any time into common shares at a
conversion price of $32.4638 per common share (equivalent to a conversion rate
of 0.7701 per common share for each preferred share), subject to adjustment in
certain circumstances. The preferred shares were not redeemable prior to April
30, 2001.

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
preferred shares were converted into 2.4 million common shares. The remaining
preferred shares were redeemed for an aggregate of $27.1 million, including
unpaid dividends, using funds available under our unsecured line of credit.

12. Technology Investments

During 2000, our Board of Trust Managers authorized us to invest in
non-real estate initiatives, including investments in e-commerce initiatives
with other multi-family real estate owners. These investments were made in
companies that provide our residents with a broad range of real estate
technology services including high-speed data services, online owner-renter
matching services, and resident portals. These portals provide our residents
with a variety of online services, including online maintenance requests, which
we believe will improve their overall living experience. Additionally, we have
invested in companies that we believe will improve the efficiency of our
internal operations through revenue management, credit scoring and purchasing.

During 2001, 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.
Therefore, during the year we recorded an impairment provision totaling $9.9
million, which represented our remaining carrying value at time of write-off of
all technology initiatives. The write-off included $3.8 million in notes
receivable. Our investments in technology investments had been recorded in
"Other assets, net" during 2001. We will continue to use the technology provided
by these companies to deliver services to our residents, which we believe
achieve our goal of providing a quality living experience. Additionally, a
number of these initiatives have been, or are in the process of being,
implemented which management believes should result in improved operational
efficiency.

13. Townhome Sales

During 2001, we completed construction of 17 for-sale townhomes in the
downtown Dallas area at a total cost of approximately $5.5 million. During 2001,
we sold five units at a total sales price of approximately $1.6 million. The
proceeds received from these townhome sales are included in other income in our
consolidated financial statements. Other expenses in our consolidated financial
statements represents the construction costs associated with the townhomes sold
during the quarter.

14. Related Party Transactions

Two of our executive officers have loans totaling $1.8 million with one of
our taxable-REIT subsidiaries. The executives utilized amounts received from
these loans to purchase our common shares in 1994. The loans mature in February
2004 and bear interest at the fixed rate of 5.23%. These loans are full recourse
obligations of the officers and do not require any prepayments of principal
until maturity.

We perform property management services for properties owned by joint
ventures in which we own an interest. Management fees earned on these properties
amounted to $900,000, $944,000, and $845,000 for the years ended December 31,
2001, 2000, and 1999, respectively.

In connection with the Oasis merger, we entered into consulting agreements
with two former Oasis executives, one of whom currently serves as a trust
manager, to locate potential investment opportunities in California. We paid
consulting fees totaling $389,000 to these executives in 1999. No fees were paid
during 2001 or 2000.

In 1999 and 2000, our Board of Trust Managers approved a plan which
permitted six of our senior executive officers to complete the purchase of $23.0
million of our common shares in open market transactions. The purchases were
funded with unsecured full recourse personal loans made to each of the
executives by a third party lender. The loans mature in five years, bear
interest at market rates and require interest to be paid quarterly. In order to
facilitate the employee share purchase transactions, we entered into a guaranty
agreement with the lender for payment of all indebtedness, fees and liabilities
of the officers to the lender. Simultaneously, we entered into a reimbursement
agreement with each of the executive officers whereby each executive officer has
indemnified us and absolutely and unconditionally agreed to reimburse us should
any amounts ever be paid by us pursuant to the terms of the guaranty agreement.
The reimbursement agreements require the executives to pay interest from the
date any amounts are paid by us until repayment by the officer. We have not had
to perform under the guaranty agreement.

Beginning in 2000, we invested approximately $1.4 million into BroadBand
Residential Inc., a multi-unit owner-sponsored broadband company providing
high-speed data services to multi-family residents, and invested approximately
$2.1 million in Viva Group, Inc., an internet based company that provides online
owner-renter matching services for the multi-family housing industry. One of our
trust managers is a director, executive officer and significant shareholder of
Viva. In connection with our investment in BroadBand Residential, we had the
right to designate one member of its board of directors. We appointed one of our
executive officers to fill that position and represent our interest. As
described in Note 12, during 2001, we recorded an impairment charge for all
technology investments, including our investment in Viva and BroadBand
Residential. Additionally, during 2001 BroadBand Residential discontinued
operations.

15. Fair Value of Financial Instruments

SFAS No. 107 requires disclosure about fair value for all financial
instruments, whether or not recognized, for financial statement purposes.
Disclosure about fair value of financial instruments is based on pertinent
information available to management as of December 31, 2001 and 2000.
Considerable judgment is necessary to interpret market data and develop
estimated fair values. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts we could obtain on disposition of the
financial instruments. The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value amounts.

As of December 31, 2001 and 2000, management estimates that the fair value
of (i) cash and cash equivalents, accounts receivable, notes receivable,
accounts payable, accrued expenses and other liabilities and distributions
payable are carried at amounts which reasonably approximate their fair value;
and (ii) based upon our borrowing rate for issuances of debt with similar terms
and remaining maturities, the carrying amount of our fixed rate debt
approximates fair value.

16. Net Change in Operating Accounts

The effect of changes in the operating accounts on cash flows from
operating activities is as follows:

(In thousands)
Year Ended December 31,
------------------------------
2001 2000 1999
--------- --------- --------
Decrease (increase) in assets:
Accounts receivable - affiliates.............$ (839) $ (65) $ (1,085)
Other assets, net ........................... (5,503) (950) 38
Restricted cash.............................. 1,318 237 (426)

Increase (decrease) in liabilities:
Accounts payable ............................ (255) (6,999) (3,768)
Accrued real estate taxes ................... 2,012 3,526 3,011
Accrued expenses and other liabilities ...... 19,689 12,797 13,266
--------- -------- ---------
Change in operating accounts ........$ 16,422 $ 8,546 $ 11,036
========= ======== =========

17. Commitments and Contingencies

Construction Contracts. As of December 31, 2001, we were obligated for
approximately $85.8 million of additional expenditures (a substantial amount of
which we expect to be funded with debt).

Lease Commitments. At December 31, 2001, we had long-term operating leases
covering certain land, office facilities and equipment. Rental expense totaled
$1.9 million in 2001, $1.6 million in 2000 and $1.7 million in 1999. Minimum
annual rental commitments for the years ending December 31, 2002 through 2006
are $1.8 million, $1.7 million, $1.4 million, $1.4 million and $1.1 million,
respectively, and $6.9 million in the aggregate thereafter.

Technology Investments. We have commitments to invest an additional $2.6
million with a consortium of real estate and technology companies which intended
to pursue a broad range of real estate technology initiatives. Based on our
discussion with consortium members, it is not likely that any additional
investments will be made.

Employment Agreements. We have employment agreements with six of our senior
officers, the terms of which expire at various times through August 20, 2003.
Such agreements provide for minimum salary levels as well as various incentive
compensation arrangements, which are payable based on the attainment of specific
goals. The agreements also provide for severance payments in the event certain
situations occur such as termination without cause or a change of control. The
severance payments vary based on the officer's position and amount to one times
the current salary base for four of the officers and 2.99 times the average
annual compensation over the previous three fiscal years for the two remaining
officers. Six months prior to expiration, unless notification of termination is
given by the senior officers, these agreements extend for one year from the date
of expiration.

Contingencies. Prior to our merger with Oasis, Oasis had been contacted by
certain regulatory agencies with regards to alleged failures to comply with the
Fair Housing Amendments Act (the "Fair Housing Act") as it pertained to nine
properties (seven of which we currently own) constructed for first occupancy
after March 31, 1991. On February 1, 1999, the Justice Department filed a
lawsuit against us and several other defendants in the United States District
Court for the District of Nevada alleging (1) that the design and construction
of these properties violates the Fair Housing Act and (2) that we, through the
merger with Oasis, had discriminated in the rental of dwellings to persons
because of handicap. The complaint requests an order that (i) declares that the
defendant's policies and practices violate the Fair Housing Act; (ii) enjoins us
from (a) failing or refusing, to the extent possible, to bring the dwelling
units and public use and common use areas at these properties and other covered
units that Oasis has designed and/or constructed into compliance with the Fair
Housing Act, (b) failing or refusing to take such affirmative steps as may be
necessary to restore, as nearly as possible, the alleged victims of the
defendants alleged unlawful practices to positions they would have been in but
for the discriminatory conduct and (c) designing or constructing any covered
multi-family dwellings in the future that do not contain the accessibility and
adaptability features set forth in the Fair Housing Act; and requires us to pay
damages, including punitive damages, and a civil penalty.

With any acquisition, we plan for and undertake renovations needed to
correct deferred maintenance, life/safety and Fair Housing matters. On January
30, 2001, a consent decree was ordered and executed in the above Justice
Department action. Under the terms of the decree, we were ordered to make
certain retrofits and implement certain educational programs and fair housing
advertising. These changes are to take place over the next five years. In
management's opinion, the costs associated with complying with the decree are
not expected to have a material impact on our financial statements.

We are subject to various legal proceedings and claims that arise in the
ordinary course of business. These matters are generally covered by insurance.
While the resolution of these matters cannot be predicted with certainty,
management believes that the final outcome of such matters will not have a
material adverse effect on our consolidated financial statements.

In the ordinary course of our business, we issue letters of intent
indicating a willingness to negotiate for the purchase or sale of multifamily
properties or development land. In accordance with local real estate market
practice, such letters of intent are non-binding, and neither party to the
letter of intent is obligated to pursue negotiations unless and until a
definitive contract is entered into by the parties. Even if definitive contracts
are entered into, the letters of intent and resulting contracts contemplate that
such contracts will provide the purchaser with time to evaluate the properties
and conduct due diligence and during which periods the purchaser will have the
ability to terminate the contracts without penalty or forfeiture of any deposit
or earnest money. There can be no assurance that definitive contracts will be
entered into with respect to any properties covered by letters of intent or that
we will acquire or sell any property as to which we may have entered into a
definitive contract. Further, due diligence periods are frequently extended as
needed. An acquisition or sale becomes probable at the time that the due
diligence period expires and the definitive contract has not been terminated. We
are then at risk under an acquisition contract, but only to the extent of any
earnest money deposits associated with the contract, and are obligated to sell
under a sales contract.

We are currently in the due diligence period for the purchase of land for
development. No assurance can be made that we will be able to complete the
negotiations or become satisfied with the outcome of the due diligence.

18. Quarterly Financial Data (unaudited)

Summarized quarterly financial data for the years ended December 31, 2001
and 2000 are as follows:

(In thousands, except per share amounts)

First Second Third Fourth Total
--------- ---------- --------- ----------- ----------

2001:
Revenues....................................$ 105,354 $ 104,560 $ 112,218 $ 106,083 $ 428,215
Net income to common shareholders........... 16,201* 16,934** 18,096 7,516 58,747
Basic earnings per share.................... 0.43* 0.43** 0.44 0.18 1.48
Diluted earnings per share.................. 0.41* 0.40** 0.42 0.18 1.41

2000:
Revenues....................................$ 98,714 $ 101,327 $ 102,395 $ 101,103 $ 403,539
Net income to common shareholders........... 12,676*** 10,594 28,203**** 13,580 65,053
Basic earnings per share.................... 0.33*** 0.28 0.74**** 0.36 1.71
Diluted earnings per share.................. 0.31*** 0.27 0.72**** 0.33 1.63

* Includes a $1,716, or $0.05 basic and $0.04 diluted earnings per share,
impact related to the gain on sale of land.
** Includes a $656, or $0.02 basic and $0.01 diluted earnings per share,
impact related to the gain on sale of land.
*** Includes a $1,933, or $0.05 basic and diluted earnings per share, impact
related to the gain on sale of land.
**** Includes a $16,440, or $0.43 basic and $0.37 diluted earnings per share,
impact related to the gain on sale of properties.

19. Price Range of Common Shares (unaudited)

The high and low sales prices per share of our common shares, as reported
on the New York Stock Exchange composite tape, and distributions per share
declared for the quarters indicated were as follows:

High Low Distributions
---------------- --------------- --------------
2001:
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

2000:
First ...................... $ 27.38 $ 25.88 $ 0.5625
Second ..................... 30.75 27.06 0.5625
Third ...................... 32.00 29.44 0.5625
Fourth ..................... 33.81 28.50 0.5625

CAMDEN PROPERTY TRUST
COMPARATIVE SUMMARY OF SELECTED FINANCIAL AND PROPERTY DATA

(In thousands, except per share amounts)

Year Ended December 31,
-----------------------------------------------------------------------
2001 2000 1999 1998* 1997**
------------ ------------ ------------ ----------- -----------

Operating Data
Revenues:
Rental income ......................................... $ 374,187 $ 364,111 $ 341,168 $ 300,632 $ 187,928
Other property income ................................. 29,433 27,030 22,148 18,093 9,446
------------ ------------ ------------ ----------- -----------
Total property income ............................... 403,620 391,141 363,316 318,725 197,374
Equity in income of joint ventures .................... 8,527 765 683 1,312 1,141
Fee and asset management .............................. 6,951 5,810 5,373 1,552 743
Other income .......................................... 9,117 5,823 1,924 2,250 531
------------ ------------ ------------ ----------- -----------
Total revenues ...................................... 428,215 403,539 371,296 323,839 199,789
------------ ------------ ------------ ----------- -----------

Expenses
Property operating and maintenance .................... 115,572 112,727 107,972 97,137 70,679
Real estate taxes ..................................... 40,717 39,054 36,410 31,469 21,028
General and administrative ............................ 13,743 14,349 10,606 7,998 4,389
Impairment provision for technology investments ....... 9,864
Other Expenses ........................................ 1,511
Interest ............................................. 69,841 69,036 57,856 50,467 28,537
Depreciation and amortization.......................... 101,660 96,966 89,516 78,113 44,836
------------ ------------ ------------ ----------- -----------
Total expenses....................................... 352,908 332,132 302,360 265,184 169,469
------------ ------------ ------------ ----------- -----------

Income before gain on sales of properties and joint
venture interests, minority interest and
extraordinary charge....................................... 75,307 71,407 68,936 58,655 30,320
Gain on sales of properties and joint venture interests ... 2,372 18,323 2,979 10,170
Income allocated to minority interests
Distributions on units convertible into perpetual
preferred shares..................................... (12,872) (12,845) (8,278)
Income allocated to units convertible into common shares (3,127) (2,461) (2,014) (1,322) (1,655)
------------ ------------ ------------ ----------- -----------
Income before extraordinary charge......................... 61,680 74,424 61,623 57,333 38,835
Extraordinary charge (early retirement of debt)............ (388) (397)
------------ ------------ ------------ ----------- -----------
Net income ................................................ 61,292 74,424 61,623 57,333 38,438
Preferred share dividends ................................. (2,545) (9,371) (9,371) (9,371)
------------ ------------ ------------ ---------- -----------
Net income to common shareholders ......................... $ 58,747 $ 65,053 $ 52,252 $ 47,962 $ 38,438
============ ============ ============ =========== ===========

Basic earnings per share before extraordinary charge....... $ 1.49 $ 1.71 $ 1.27 $ 1.16 $ 1.48
Basic earnings per share .................................. 1.48 1.71 1.27 1.16 1.46
Diluted earnings per share before extraordinary charge..... 1.42 1.63 1.23 1.12 1.43
Diluted earnings per share ................................ 1.41 1.63 1.23 1.12 1.41
Distributions per common share ............................ $ 2.44 $ 2.25 $ 2.08 $ 2.02 $ 1.96
Weighted average number of common shares outstanding 39,796 38,112 41,236 41,174 26,257
Weighted average number of common and common
dilutive equivalent shares outstanding ............... 41,603 41,388 44,291 44,183 28,356

CAMDEN PROPERTY TRUST
COMPARATIVE SUMMARY OF SELECTED FINANCIAL AND PROPERTY DATA (CONTINUED)

(In thousands, except property data amounts)

Year Ended December 31,
--------------------------------------------------------------------
2001 2000 1999 1998* 1997**
------------ ----------- ------------ ------------ ------------

Balance Sheet Data (at end of year)
Real estate assets............................................ $ 2,823,530 $ 2,719,234 $ 2,678,034 $ 2,487,942 $ 1,397,138
Accumulated depreciation...................................... (422,154) (326,723) (253,545) (167,560) (94,665)
Total assets.................................................. 2,449,665 2,430,881 2,487,932 2,347,982 1,323,620
Notes payable ................................................ 1,207,047 1,138,117 1,165,090 1,002,568 480,754
Minority interests............................................ 206,079 210,377 196,852 71,783 63,325
Convertible subordinated debentures........................... 1,950 3,406 3,576 6,025
Shareholders' Equity.......................................... 918,251 974,183 1,016,675 1,170,388 710,564

Common shares outstanding .................................... 40,799 38,129 39,093 43,825 31,694

Other Data
Cash flows provided by (used in):
Operating activities .................................... $ 198,213 $ 166,436 $ 164,021 $ 138,419 $ 65,974
Investing activities .................................... (119,627) (15,751) (220,571) (55,013) (73,709)
Financing activities .................................... (77,897) (151,266) 56,420) (84,227) 11,837
Funds from operations*** 157,840 156,274 152,369 137,996 75,753

Property Data
Number of operating properties (at end of year)............... 145 145 153 149 100
Number of operating apartment homes (at end of year).......... 51,345 51,336 53,311 51,310 34,669
Number of operating apartment homes (weighted average) ....... 45,488 46,501 45,606 42,411 29,280
Weighted average monthly total property
income per apartment home.................................. $ 739 $ 701 $ 664 $ 626 $ 562
Properties under development (at end of period)............... 2 3 6 14 6

* Effective April 1, 1998 we acquired Oasis Residential, Inc.
** Effective April 1, 1997 we acquired Paragon Group, Inc.
*** 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.