Camden Property Trust Announces 2014 Operating Results, 6.1% Dividend Increase and 2015 Financial Outlook

Camden Property Trust (NYSE: CPT) today announced operating results for the three and twelve months ended December 31, 2014.

Funds from Operations (“FFO”)

FFO for the fourth quarter of 2014 totaled $0.99 per diluted share or $90.3 million, as compared to $1.08 per diluted share or $96.9 million for the same period in 2013. FFO for the three months ended December 31, 2014 included a $10.0 million or $0.11 per diluted share charge related to incentive compensation paid as a result of joint venture restructuring [see press release dated December 29, 2014 for additional information].

FFO for the twelve months ended December 31, 2014 totaled $4.18 per diluted share or $378.0 million, as compared to $4.11 per diluted share or $368.3 million for the same period in 2013. FFO for the twelve months ended December 31, 2014 included: a $10.0 million or $0.11 per diluted share charge related to incentive compensation paid as a result of joint venture restructuring, and a $2.5 million or $0.03 per diluted share net gain on sale of land holdings. FFO for the twelve months ended December 31, 2013 included: a $5.1 million or $0.06 per diluted share impact from a promoted equity interest recognized in conjunction with the sale of joint venture properties; a $1.0 million or $0.01 per diluted share impact from non-recurring fee income; and a $0.7 million or $0.01 per diluted share gain on sale of undeveloped land.

Net Income Attributable to Common Shareholders

For the three months ended December 31, 2014, the Company reported Net Income Attributable to Common Shareholders of $178.5 million and Earnings per Share - diluted ("EPS") of $1.98, as compared to EPS of $1.46 for the same period in 2013. EPS for the three months ended December 31, 2014 included a $1.73 per share gain on sale of operating properties, and an $0.11 per share charge related to incentive compensation paid as a result of joint venture restructuring. EPS for the three months ended December 31, 2013 included a $1.03 per share gain on sale of discontinued operations and a $0.04 per share gain on sale of unconsolidated joint venture properties.

For the twelve months ended December 31, 2014, Camden reported Net Income Attributable to Common Shareholders of $292.1 million and EPS of $3.27, as compared to EPS of $3.78 for the same period in 2013. EPS for the twelve months ended December 31, 2014 included: a $1.76 per share gain on sale of operating properties, an $0.11 per share charge related to incentive compensation paid as a result of joint venture restructuring, a $0.04 per share gain on sale of unconsolidated joint venture properties, and a $0.03 per share net gain on sale of land holdings. EPS for the twelve months ended December 31, 2013 included: a $2.06 per share gain on sale of discontinued operations, an $0.18 per share gain on sale of unconsolidated joint venture properties, a $0.06 per share impact from a promoted equity interest recognized in conjunction with the sale of joint venture properties, a $0.01 per share impact from non-recurring fee income, and a $0.01 per share gain on sale of undeveloped land.

A reconciliation of net income attributable to common shareholders to FFO is included in the financial tables accompanying this press release.

Same-Property Results

For the 46,069 apartment homes included in consolidated same-property results, fourth quarter 2014 same-property net operating income (“NOI”) increased 4.2% compared to the fourth quarter of 2013, with revenues increasing 4.2% and expenses increasing 4.3%. On a sequential basis, fourth quarter 2014 same-property NOI increased 2.3% compared to the third quarter of 2014, with revenues increasing 0.1% and expenses declining 3.7% compared to the prior quarter. On a full-year basis, 2014 same-property NOI increased 4.9%, with revenues increasing 4.5% and expenses increasing 3.8% compared to the same period in 2013. Same-property physical occupancy levels averaged 95.7% during both the fourth quarter of 2014 and fourth quarter of 2013, and 96.1% during the third quarter of 2014.

The Company defines same-property communities as communities owned and stabilized since January 1, 2013. 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.

Acquisition/Disposition Activity

During the fourth quarter, the company acquired Camden Fourth Ward, a 276-home apartment community in Atlanta, GA for $62.6 million.

Camden sold five wholly-owned apartment communities during the quarter for a total of $218.3 million: Camden River, a 352-home community in Atlanta, GA; Camden Glen Lakes, a 424-home community in Dallas, TX; Camden Club, a 436-home community in Orlando, FL; Camden Lakeside, a 228-home community in Tampa, FL; and Camden Pinehurst, a 407-home community in Charlotte, NC.

Subsequent to quarter-end, the Company disposed of Camden Ridgecrest, a 284-home community in Austin, TX for $29.3 million. Camden has one additional community in Tampa, FL under contract for sale which is expected to close on January 30, 2015 for approximately $85.1 million.

Development Activity

Lease-up was completed during the quarter at Camden NoMa, a 321-home project in Washington, DC, which is currently 95% occupied. Construction began during the quarter at two new wholly-owned communities: Camden McGowen Station in Houston, TX, a $90 million project with 315 apartment homes; and Camden Lincoln Station in Denver, CO, a $56 million project with 267 apartment homes.

Lease-up continued during the quarter at six wholly-owned development communities: Camden Boca Raton in Boca Raton, FL, a $52 million project with 261 apartment homes which is currently 77% leased; Camden Foothills in Scottsdale, AZ, a $44 million project with 220 apartment homes which is currently 51% leased; Camden La Frontera in Round Rock, TX, a $36 million project with 300 apartment homes which is currently 64% leased; Camden Lamar Heights in Austin, TX, a $47 million project with 314 apartment homes which is currently 51% leased; Camden Flatirons in Denver, CO, a $78 million project with 424 apartment homes which is currently 40% leased; and Camden Paces in Atlanta, GA, a $110 million project with 379 apartment homes which is currently 24% leased. Lease-up also began at one wholly-owned development community during the fourth quarter: Camden Hayden in Tempe, AZ, a $48 million project with 234 apartment homes which is currently 12% leased.

Construction continued at five wholly-owned development communities: Camden Glendale in Glendale, CA, a $115 million project with 303 apartment homes; Camden Gallery in Charlotte, NC, a $58 million project with 323 apartment homes; Camden Chandler in Chandler, AZ, a $75 million project with 380 apartment homes; Camden Victory Park in Dallas, TX, an $82 million project with 423 apartment homes; and The Camden in Los Angeles, CA, a $145 million project with 287 apartment homes. Construction also continued at one joint venture development community: Camden Southline in Charlotte, NC, a $48 million project with 266 apartment homes.

Equity Issuance

During the fourth quarter, Camden issued 209,747 common shares through its at-the-market ("ATM") share offering program at an average price of $76.28 per share, for total net consideration of approximately $15.7 million. No additional shares were sold subsequent to quarter-end.

Quarterly Dividend Declaration

Camden’s Board of Trust Managers declared a first quarter 2015 dividend of $0.70 per common share, which is a 6.1% increase over the Company’s prior quarterly dividend of $0.66 per share. The dividend is payable on April 17, 2015 to holders of record as of March 31, 2015. In declaring the dividend, the Board of Trust Managers considered a number of factors, including the Company’s past performance and future prospects, as described in this release.

Earnings Guidance

Camden provided initial earnings guidance for 2015 based on its current and expected views of the apartment market and general economic conditions. Full-year 2015 FFO is expected to be $4.36 to $4.56 per diluted share, and full-year 2015 EPS is expected to be $1.47 to $1.67. First quarter 2015 earnings guidance is $1.04 to $1.08 per diluted share for FFO and $0.34 to $0.38 for EPS. Guidance for EPS excludes gains on real estate transactions.

The midpoint of the Company’s initial 2015 earnings guidance takes into account property dispositions of $247.6 million completed between October 1, 2014 and January 15, 2015, and also assumes an additional property disposition of $85.1 million will occur on January 30, 2015. The impact to 2015 FFO from the property dispositions of $332.7 million is approximately $0.22 per diluted share.

Camden expects 2015 same-property revenue growth between 3.75% and 4.75%, expense growth between 4.5% and 5.0%, and NOI growth between 3.0% and 5.0%. The Company’s same-property guidance for 2015 includes the impact of a new on-site bulk Internet initiative, which is anticipated to contribute 25 to 50 basis points to revenue growth and 75 to 100 basis points to expense growth during 2015. The impact to same store NOI growth should be minimal in 2015 but meaningful in future years when the rollout is completed.

Camden intends to update its earnings guidance to the market on a quarterly basis. Additional information on the Company’s 2015 financial outlook and a reconciliation of expected net income attributable to common shareholders to expected FFO are included in the financial tables accompanying this press release.

Conference Call

The Company will hold a conference call on Thursday, January 29, 2015 at 11:00 a.m. Central Time to review its fourth quarter and full-year 2014 results and discuss its outlook for future performance. To participate in the call, please dial (888) 317-6003 (Domestic) or (412) 317-6061 (International) by 10:50 a.m. Central Time and enter passcode: 5063934, or join the live webcast of the conference call by accessing the Investor Relations section of the Company’s website at 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. Factors which may cause the Company’s actual results or performance to differ materially from those contemplated by forward-looking statements are described under the heading “Risk Factors” in Camden’s Annual Report on Form 10-K and in other filings with the Securities and Exchange Commission (SEC). Forward-looking statements made in today’s press release represent management’s current opinions, and the Company assumes no obligation to update or supplement these statements because of subsequent events.

About Camden

Camden Property Trust, an S&P 400 Company, is a real estate company engaged in the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. Camden owns interests in and operates 167 properties containing 58,664 apartment homes across the United States. Upon completion of 13 properties under development, the Company’s portfolio will increase to 62,879 apartment homes in 180 properties. Camden was recently named by FORTUNE® Magazine for the seventh consecutive year as one of the “100 Best Companies to Work For” in America, ranking #11.

For additional information, please contact Camden’s Investor Relations Department at (800) 922-6336 or (713) 354-2787 or access our website at camdenliving.com.

Note: This table contains forward-looking statements. Please see the paragraph regarding forward-looking statements earlier in this document. Additionally, please refer to the following pages for definitions and reconciliations of all non-GAAP financial measures presented in this document.

FFO

The National Association of Real Estate Investment Trusts (“NAREIT”) currently defines FFO as net income (computed in accordance with accounting principles generally accepted in the United States of America ("GAAP")), excluding gains (or losses) associated with previously depreciated operating properties, real estate depreciation and amortization, impairments of depreciable assets, and adjustments for unconsolidated joint ventures. Our calculation of diluted FFO also assumes conversion of all potentially dilutive securities, including certain non-controlling interests, which are convertible into common shares. We consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions of operating properties, and depreciation, FFO can assist in the comparison of the operating performance of a company’s real estate investments between periods or to different companies. A reconciliation of net income attributable to common shareholders to FFO is provided below:

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 earnings per common share (EPS). A reconciliation of the ranges provided for diluted EPS to expected FFO per diluted share is provided below:

Note: This table contains forward-looking statements. Please see the paragraph regarding forward-looking statements earlier in this document.

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) loss of joint ventures, (gain) loss on sale of unconsolidated joint venture interests, gain on acquisition of controlling interest in joint ventures, gain on sale of discontinued operations, net of tax, and income (loss) allocated to non-controlling interests. The Company considers EBITDA to be an appropriate supplemental measure of operating performance to net income attributable to common shareholders 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 attributable to common shareholders to EBITDA is provided below: