Camden Property Trust Announces Second Quarter 2007 Operating Results

Camden Property Trust (NYSE:CPT) announced that its funds from operations ("FFO”) for the second quarter of 2007 totaled $0.92 per diluted share or $57.8 million, as compared to $0.89 per diluted share or $53.4 million for the same period in 2006. FFO for the six months ended June 30, 2007 totaled $1.81 per diluted share or $113.7 million, as compared to $1.77 per diluted share or $105.2 million for the same period in 2006. Net Income ("EPS”) The Company reported net income ("EPS”) of $42.6 million or $0.71 per diluted share for the second quarter of 2007, as compared to $34.6 million or $0.61 per diluted share for the same period in 2006. EPS for the three months ended June 30, 2007 included a $0.52 per diluted share impact from gain on sale of discontinued operations, as compared to a $0.43 per diluted share impact from gain on sale of properties and discontinued operations for the same period in 2006. For the six months ended June 30, 2007, net income totaled $55.6 million or $0.93 per diluted share, as compared to $76.0 million or $1.36 per diluted share for the same period in 2006. EPS for the six months ended June 30, 2007 included a $0.52 per diluted share impact from gain on sale of discontinued operations. EPS for the six months ended June 30, 2006 included a $0.96 per diluted share impact from gain on sale of land, joint venture properties and discontinued operations. A reconciliation of net income to FFO is included in the financial tables accompanying this press release. Same-Property Results For the 42,089 apartment homes included in consolidated same-property results, second quarter 2007 same-property net operating income ("NOI”) growth was 5.9% compared to the second quarter of 2006, with revenues increasing 5.1% and expenses increasing 3.6%. On a sequential basis, second quarter 2007 same-property NOI increased 2.1% compared to first quarter 2007, with revenues increasing 1.6% and expenses increasing 0.6% compared to the prior quarter. On a year-to-date basis, 2007 same-property NOI increased 5.8%, with revenue growth of 5.1% and expense growth of 4.0% compared to the same period in 2006. Same-property physical occupancy levels for the combined portfolio averaged 94.8% during the second quarter of 2007, compared to 94.4% in the first quarter of 2007 and 95.7% in the second quarter of 2006. The Company defines same-property communities as communities owned by Camden and stabilized as of January 1, 2006, excluding properties held for sale and communities under redevelopment. A reconciliation of net income to net operating income and same-property net operating income is included in the financial tables accompanying this press release. Development Activity During the second quarter, lease-up was completed at Camden Clearbrook in Frederick, MD, a $46.0 million project that is currently 96% occupied and stabilized. As of June 30, 2007, Camden had four completed apartment communities in lease-up: Camden Manor Park in Raleigh, NC, a $52.0 million project that is currently 90% leased; Camden Westwind in Ashburn, VA, a $97.6 million project that is currently 90% leased; Camden Old Creek in San Marcos, CA, a $98.0 million project that is currently 75% leased; and Camden Royal Oaks in Houston, TX, a $22.0 million project that is currently 63% leased. The Company’s current development pipeline under construction includes seven wholly-owned communities comprising 2,254 apartment homes with a total budgeted cost of $449.0 million. Camden also has five joint venture communities under development comprising 1,528 apartment homes with a total budgeted cost of $367.9 million. The Company’s future development pipeline currently consists of 19 potential developments comprising 6,124 apartment homes and a total estimated cost of $1.5 billion. The future pipeline represents projects in the early phase of the development process for which Camden either owns the land, has an option to acquire the land or enter into a leasehold interest, or is the buyer under a long-term conditional contract. Acquisition/Disposition Activity During the second quarter, the Company acquired Camden South Congress, a 253-home apartment community in Austin, TX for $42.8 million and Camden Royal Palms, a 352-home apartment community in Brandon, FL for $41.1 million. Camden disposed of three operating communities during the quarter which had been classified as held for sale: Camden Downs, a 254-home apartment community in Louisville, KY; Camden Taravue, a 304-home apartment community in St. Louis, MO; and Camden Trace, a 372-home apartment community in St. Louis, MO. Gross sales proceeds from these three communities totaled $49.9 million. Properties and Land Held for Sale During the second quarter, Camden classified nine operating communities consisting of 2,515 apartment homes as held for sale: Camden Glen, a 304-home apartment community in Greensboro, NC; Camden Wendover, a 216-home apartment community in Greensboro, NC; Camden Eastchase, a 220-home apartment community in Charlotte, NC; Camden Timber Creek, a 352-home apartment community in Charlotte, NC; Camden Ridge, a 208-home apartment community in Fort Worth, TX; Camden Terrace, a 340-home apartment community in Fort Worth, TX; Camden Ridgeview, a 167-home apartment community in Austin, TX; Camden Isles, a 484-home apartment community in Tampa, FL; and Camden Pinnacle, a 224-home apartment community in Denver, CO. The Company also had 5.7 acres of undeveloped land in Miami, FL, Boca Raton, FL and Dallas, TX classified as held for sale at quarter-end. No land sales are currently expected to close during 2007. Stock Repurchase During the quarter, Camden repurchased 459,000 common shares at an average price per share of $67.76, for a total of $31.1 million. Subsequent to quarter-end, the Company repurchased an additional 283,865 common shares at an average price per share of $66.56 for a total of $18.9 million. Camden currently has $200 million remaining under its stock repurchase program. Earnings Guidance Camden has updated earnings guidance for 2007 based on its current and expected views of the apartment market and general economic conditions. The Company reduced the top end of its guidance range for 2007 FFO by $0.20 per diluted share, reflecting current expectations that no land sales will occur during the remainder of 2007 ($0.16 per diluted share impact) and that 2007 same-property NOI will be slightly lower than originally projected ($0.04 per diluted share impact). Full-year 2007 FFO is now expected to be between $3.60 and $3.70 per diluted share, and full-year 2007 EPS is expected to be between $1.40 and $1.50 per diluted share. Third quarter 2007 earnings guidance is $0.89 to $0.93 per diluted share for FFO and $0.22 and $0.26 per diluted share for EPS. Guidance for EPS excludes potential future gains on the sale of operating properties. Camden intends to update its earnings guidance to the market on a quarterly basis. The Company’s 2007 earnings guidance is based on projections of same-property NOI growth between 5.5% and 6.5%, revenue growth between 5.0% and 5.5% and expense growth between 3.5% and 4.0%. A reconciliation of expected net income to expected FFO is included in the financial tables accompanying this press release. Conference Call The Company will hold a conference call on Friday, August 3, 2007 at 10:00 a.m. Central Time to review its second quarter results and discuss its outlook for future performance. To participate in the call, please dial (877) 407-0782 (domestic) or (201) 689-8567 (international) by 9:50 a.m. Central Time and request the Camden Property Trust Second Quarter 2007 Earnings Call, or join the live webcast of the conference call by accessing the Investor Relations section of the Company’s website at www.camdenliving.com. Supplemental financial information is available in the Investor Relations section of the Company’s website under Earnings Releases or by calling Camden’s Investor Relations Department at (800) 922-6336. Forward-Looking Statements In addition to historical information, this press release contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates and projections about the industry and markets in which Camden operates, management's beliefs, and assumptions made by management. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties which are difficult to predict. About Camden Camden Property Trust is a real estate company engaged in the ownership, development, acquisition, management and disposition of multifamily apartment communities. Camden owns interests in and operates 186 properties containing 64,191 apartment homes across the United States. Upon completion of 12 properties under development, the Company’s portfolio will increase to 67,973 apartment homes in 198 properties. For additional information, please contact Camden’s Investor Relations Department at (800) 922-6336 or (713) 354-2787 or access our website at www.camdenliving.com.       CAMDEN OPERATING RESULTS (In thousands, except per share and property data amounts)     (Unaudited) Three Months Ended Six Months Ended June 30, June 30, OPERATING DATA   2007       2006     2007       2006   Property revenues Rental revenues $ 135,343 $ 131,740 $ 268,495 $ 260,837 Other property revenues   16,218       12,905     30,872       24,959   Total property revenues 151,561 144,645 299,367 285,796   Property expenses Property operating and maintenance 38,926 38,165 77,556 74,835 Real estate taxes   17,127       15,732     33,186       31,580   Total property expenses 56,053 53,897 110,742 106,415   Non-property income Fee and asset management 2,420 3,120 4,806 5,597 Interest and other income 1,810 3,611 3,372 4,364 Income on deferred compensation plans   4,835       2,331     7,141       2,381   Total non-property income 9,065 9,062 15,319 12,342   Other expenses Property management 4,800 4,966 9,528 9,192 Fee and asset management 811 3,238 2,431 4,604 General and administrative 7,912 8,036 15,966 15,450 Interest 29,279 31,259 57,069 62,174 Depreciation and amortization 39,311 39,645 78,388 75,108 Amortization of deferred financing costs 906 909 1,819 1,950 Expense on deferred compensation plans   4,835       2,331     7,141       2,381   Total other expenses   87,854       90,384     172,342       170,859     Income from continuing operations before gain on sale of properties, equity in income of joint ventures, minority interests and income taxes 16,719 9,426 31,602 20,864 Gain on sale of properties, including land - 810 - 1,309 Equity in income of joint ventures 484 569 1,219 2,886 Minority interests Distributions on perpetual preferred units (1,750 ) (1,750 ) (3,500 ) (3,500 ) Income allocated to common units and other minority interests   (1,343 )     (959 )   (2,130 )     (2,074 ) Income from continuing operations before income taxes 14,110 8,096 27,191 19,485 Income tax expense (316 ) - (1,037 ) - Income tax expense on sale of depreciable operating properties   -       -     (1,184 )     -   Income from continuing operations 13,794 8,096 24,970 19,485 Income from discontinued operations 2,341 3,057 4,472 6,680 Gain on sale of discontinued operations 30,976 23,652 30,976 51,044 Income from discontinued operations allocated to common units   (4,519 )     (223 )   (4,789 )     (1,184 ) Net income $ 42,592     $ 34,582   $ 55,629     $ 76,025     PER SHARE DATA Net income - basic $ 0.72 $ 0.62 $ 0.95 $ 1.38 Net income - diluted 0.71 0.61 0.93 1.36 Income from continuing operations - basic 0.23 0.15 0.43 0.35 Income from continuing operations - diluted 0.23 0.14 0.42 0.35   Weighted average number of common and common equivalent shares outstanding:   Basic 58,894 55,506 58,854 54,901 Diluted 59,929 56,683 59,961 56,083   PROPERTY DATA Total operating properties (end of period) (a) 186 186 186 186 Total operating apartment homes in operating properties (end of period) (a) 64,191 63,737 64,191 63,737 Total operating apartment homes (weighted average) 53,424 56,533 53,260 56,855 Total operating apartment homes - excluding discontinued operations (weighted average) 50,221 51,327 49,937 51,130     (a) Includes joint ventures and properties held for sale.   Note: Please refer to the following pages for definitions and reconciliations of all non-GAAP financial measures presented in this document.       CAMDEN FUNDS FROM OPERATIONS (In thousands, except per share and property data amounts)       (Unaudited) Three Months Ended Six Months Ended June 30, June 30, FUNDS FROM OPERATIONS   2007       2006     2007       2006     Net income $ 42,592 $ 34,582 $ 55,629 $ 76,025 Real estate depreciation and amortization from continuing operations 38,618 38,982 76,980 73,791 Real estate depreciation from discontinued operations 786 1,597 2,030 3,533 Adjustments for unconsolidated joint ventures 1,225 764 2,311 1,545 Income from continuing operations allocated to common units 1,048 907 1,784 1,971 Income from discontinued operations allocated to common units 4,519 223 4,789 1,184 Income tax expense on sale of depreciable operating properties - - 1,184 - (Gain) on sale of discontinued operations (30,976 ) (23,652 ) (30,976 ) (51,044 ) (Gain) on sale of joint venture properties   -       -     -       (1,763 ) Funds from operations - diluted $ 57,812     $ 53,403   $ 113,731     $ 105,242     PER SHARE DATA Funds from operations - diluted $ 0.92 $ 0.89 $ 1.81 $ 1.77 Cash distributions 0.69 0.66 1.38 1.32   Weighted average number of common and common equivalent shares outstanding:   FFO - diluted 62,914 60,083 62,967 59,539   PROPERTY DATA Total operating properties (end of period) (a) 186 186 186 186 Total operating apartment homes in operating properties (end of period) (a) 64,191 63,737 64,191 63,737 Total operating apartment homes (weighted average) 53,424 56,533 53,260 56,855 Total operating apartment homes - excluding discontinued operations (weighted average) 50,221 51,327 49,937 51,130     (a) Includes joint ventures and properties held for sale.       Note: Please refer to the following pages for definitions and reconciliations of all non-GAAP financial measures presented in this document.       CAMDEN BALANCE SHEETS (In thousands)     (Unaudited) Jun 30, Mar 31, Dec 31, Sep 30, Jun 30,   2007       2007       2006       2006       2006   ASSETS Real estate assets, at cost Land $ 713,084 $ 703,850 $ 693,312 $ 683,645 $ 697,690 Buildings and improvements   4,144,075       4,108,955       4,036,286       3,988,031       4,074,737   4,857,159 4,812,805 4,729,598 4,671,676 4,772,427 Accumulated depreciation   (788,318 )     (799,624 )     (762,011 )     (725,790 )     (786,208 ) Net operating real estate assets 4,068,841 4,013,181 3,967,587 3,945,886 3,986,219 Properties under development, including land 454,617 410,002 369,861 351,246 427,500 Investments in joint ventures 12,722 8,321 9,245 8,266 8,270 Properties held for sale, including land   72,577       32,879       32,763       45,074       55,562   Total real estate assets 4,608,757 4,464,383 4,379,456 4,350,472 4,477,551 Accounts receivable - affiliates 35,341 34,854 34,170 33,624 33,408 Notes receivable Affiliates 45,560 43,507 41,478 31,037 23,327 Other 11,565 11,565 3,855 3,855 9,211 Other assets, net (a) 136,524 118,329 121,336 112,801 111,636 Cash and cash equivalents 3,058 1,470 1,034 8,061 49,700 Restricted cash   20,053       5,772       4,721       5,541       5,194   Total assets $ 4,860,858     $ 4,679,880     $ 4,586,050     $ 4,545,391     $ 4,710,027         LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Notes payable Unsecured $ 2,065,175 $ 1,897,865 $ 1,759,498 $ 1,693,106 $ 1,940,693 Secured 566,001 568,731 571,478 587,347 620,592 Accounts payable and accrued expenses 128,892 110,486 124,834 120,566 117,301 Accrued real estate taxes 29,785 16,036 23,306 41,165 31,280 Other liabilities (b) 115,547 110,684 105,999 101,332 99,460 Distributions payable   44,982       45,137       43,068       43,056       43,031   Total liabilities 2,950,382 2,748,939 2,628,183 2,586,572 2,852,357   Commitments and contingencies   Minority interests Perpetual preferred units 97,925 97,925 97,925 97,925 97,925 Common units 105,353 102,217 115,280 116,776 106,217 Other minority interests   10,916       10,335       10,306       10,002       10,555   Total minority interests 214,194 210,477 223,511 224,703 214,697   Shareholders' equity Common shares of beneficial interest 654 654 650 650 649 Additional paid-in capital 2,204,525 2,199,713 2,183,622 2,176,170 2,172,616 Distributions in excess of net income (241,711 ) (243,786 ) (213,665 ) (206,442 ) (293,386 ) Employee notes receivable (1,976 ) (2,025 ) (2,036 ) (2,047 ) (2,035 ) Treasury shares, at cost   (265,210 )     (234,092 )     (234,215 )     (234,215 )     (234,871 ) Total shareholders' equity   1,696,282       1,720,464       1,734,356       1,734,116       1,642,973   Total liabilities and shareholders' equity $ 4,860,858     $ 4,679,880     $ 4,586,050     $ 4,545,391     $ 4,710,027         (a) includes: net deferred charges of: $ 11,565 $ 9,724 $ 10,295 $ 11,155 $ 13,120 value of in place leases of: $ 1,091 $ 61 $ 242 $ 452 $ 431   (b) includes: deferred revenues of: $ 2,937 $ 3,321 $ 3,875 $ 5,256 $ 4,408 above/below market leases of: $ 43 $ 8 $ 32 $ 80 $ 13 distributions in excess of investments in joint ventures of: $ 19,549 $ 18,805 $ 18,350 $ 18,044 $ 12,701 CAMDEN NON-GAAP FINANCIAL MEASURES DEFINITIONS & RECONCILIATIONS (In thousands, except per share amounts)                           (Unaudited)   This document contains certain non-GAAP financial measures management believes are useful in evaluating an equity REIT's performance. Camden's definitions and calculations of non-GAAP financial measures may differ from those used by other REITs, and thus may not be comparable. The non-GAAP financial measures 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.   FFO The National Association of Real Estate Investment Trusts ("NAREIT”) currently defines FFO as net income computed in accordance with generally accepted accounting principles ("GAAP”), excluding gains or losses from depreciable operating property sales, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Camden’s definition of diluted FFO also assumes conversion of all dilutive convertible securities, including minority interests, which are convertible into common equity. The Company considers FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions of operating properties and excluding depreciation, FFO can help one compare the operating performance of a company's real estate between periods or as compared to different companies. A reconciliation of net income to FFO is provided below:   Three Months Ended Six Months Ended June 30, June 30,   2007       2006     2007       2006   Net income $ 42,592 $ 34,582 $ 55,629 $ 76,025 Real estate depreciation and amortization from continuing operations 38,618 38,982 76,980 73,791 Real estate depreciation from discontinued operations 786 1,597 2,030 3,533 Adjustments for unconsolidated joint ventures 1,225 764 2,311 1,545 Income from continuing operations allocated to common units 1,048 907 1,784 1,971 Income from discontinued operations allocated to common units 4,519 223 4,789 1,184 Income tax expense on sale of depreciable operating properties - - 1,184 - (Gain) on sale of discontinued operations (30,976 ) (23,652 ) (30,976 ) (51,044 ) (Gain) on sale of joint venture properties   -       -     -       (1,763 ) Funds from operations - diluted $ 57,812     $ 53,403   $ 113,731     $ 105,242     Weighted average number of common and common equivalent shares outstanding:   EPS diluted 59,929 56,683 59,961 56,083 FFO diluted 62,914 60,083 62,967 59,539   Net income per common share - diluted $ 0.71 $ 0.61 $ 0.93 $ 1.36 FFO per common share - diluted $ 0.92 $ 0.89 $ 1.81 $ 1.77   Expected FFO Expected FFO is calculated in a method consistent with historical FFO, and is considered an appropriate supplemental measure of expected operating performance when compared to expected net income (EPS). A reconciliation of the ranges provided for expected net income per diluted share to expected FFO per diluted share is provided below: 3Q07 Range 2007 Range Low   High Low   High   Expected net income per share - diluted $ 0.22 $ 0.26 $ 1.40 $ 1.50 Expected difference between EPS and fully diluted FFO shares (0.01 ) (0.01 ) (0.07 ) (0.07 ) Expected real estate depreciation 0.64 0.64 2.52 2.52 Expected adjustments for unconsolidated joint ventures 0.02 0.02 0.07 0.07 Expected income allocated to common units 0.02 0.02 0.15 0.15 Expected (gain) on sale of properties held in joint ventures 0.00 0.00 0.00 0.00 Expected (gain) on sale of properties and properties held for sale   0.00       0.00     (0.47 )     (0.47 ) Expected FFO per share - diluted $ 0.89 $ 0.93 $ 3.60 $ 3.70   Note: This table contains forward-looking statements. Please see the paragraph regarding forward-looking statements earlier in this document.     Net Operating Income (NOI) NOI is defined by the Company as total property income less property operating and maintenance expenses less real estate taxes. The Company considers NOI to be an appropriate supplemental measure of operating performance to net income because it reflects the operating performance of our communities without allocation of corporate level property management overhead or general and administrative costs. A reconciliation of net income to net operating income is provided below: Three Months Ended Six Months Ended June 30, June 30,   2007       2006     2007       2006   Net income $ 42,592 $ 34,582 $ 55,629 $ 76,025 Fee and asset management (2,420 ) (3,120 ) (4,806 ) (5,597 ) Interest and other income (1,810 ) (3,611 ) (3,372 ) (4,364 ) Income on deferred compensation plans (4,835 ) (2,331 ) (7,141 ) (2,381 ) Property management expense 4,800 4,966 9,528 9,192 Fee and asset management expense 811 3,238 2,431 4,604 General and administrative expense 7,912 8,036 15,966 15,450 Interest expense 29,279 31,259 57,069 62,174 Depreciation and amortization 39,311 39,645 78,388 75,108 Amortization of deferred financing costs 906 909 1,819 1,950 Expense on deferred compensation plans 4,835 2,331 7,141 2,381 Gain on sale of properties, including land - (810 ) - (1,309 ) Equity in income of joint ventures (484 ) (569 ) (1,219 ) (2,886 ) Distributions on perpetual preferred units 1,750 1,750 3,500 3,500 Income allocated to common units and other minority interests 1,343 959 2,130 2,074 Income tax expense 316 - 1,037 - Income tax expense on sale of depreciable operating properties - - 1,184 - Income from discontinued operations (2,341 ) (3,057 ) (4,472 ) (6,680 ) Gain on sale of discontinued operations (30,976 ) (23,652 ) (30,976 ) (51,044 ) Income from discontinued operations allocated to common units   4,519     223     4,789     1,184   Net Operating Income (NOI) $ 95,508 $ 90,748 $ 188,625 $ 179,381   "Same Property" Communities $ 79,567 $ 75,122 $ 157,488 $ 148,902 Non-"Same Property" Communities 7,404 4,291 15,339 9,156 Development and Lease-Up Communities 2,327 734 4,104 1,045 Redevelopment Communities 5,558 5,803 10,477 10,749 Dispositions / Other   652     4,798     1,217     9,529   Net Operating Income (NOI) $ 95,508 $ 90,748 $ 188,625 $ 179,381     EBITDA EBITDA is defined by the Company as earnings before interest, taxes, depreciation and amortization, including net operating income from discontinued operations, excluding equity in income of joint ventures, gain on sale of real estate assets, and income allocated to minority interests. The Company considers EBITDA to be an appropriate supplemental measure of operating performance to net income because it represents income before non-cash depreciation and the cost of debt, and excludes gains or losses from property dispositions. A reconciliation of net income to EBITDA is provided below:   Three Months Ended Six Months Ended June 30, June 30,   2007       2006     2007       2006   Net income $ 42,592 $ 34,582 $ 55,629 $ 76,025 Interest expense 29,397 31,380 57,305 62,416 Amortization of deferred financing costs 906 909 1,819 1,950 Depreciation and amortization 39,311 39,645 78,388 75,108 Distributions on perpetual preferred units 1,750 1,750 3,500 3,500 Income allocated to common units and other minority interests 1,343 959 2,130 2,074 Income tax expense 316 - 1,037 - Income tax expense on sale of depreciable operating properties - - 1,184 - Real estate depreciation from discontinued operations 786 1,597 2,030 3,533 Gain on sale of properties, including land - (810 ) - (1,309 ) Equity in income of joint ventures (484 ) (569 ) (1,219 ) (2,886 ) Gain on sale of discontinued operations (30,976 ) (23,652 ) (30,976 ) (51,044 ) Income from discontinued operations allocated to common units   4,519       223     4,789       1,184   EBITDA $ 89,460 $ 86,014 $ 175,616 $ 170,551