10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
 
(Mark One)
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2016
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from  ______________ to _______________                                       
Commission file number: 1-12110 
 
CAMDEN PROPERTY TRUST
(Exact Name of Registrant as Specified in Its Charter)
 
 
Texas
 
76-6088377
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
11 Greenway Plaza, Suite 2400
Houston, Texas
 
77046
(Address of principal executive offices)
 
(Zip Code)
(713) 354-2500
(Registrant's Telephone Number, Including Area Code)
 
 
N/A
(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one): 
Large accelerated filer
 
ý
Accelerated filer
 
¨
 
 
 
 
Non-accelerated filer
 
¨
Smaller Reporting Company
 
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý
On April 22, 2016, 86,998,140 common shares of the registrant were outstanding, net of treasury shares and shares held in our deferred compensation arrangements.

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Table of Contents

CAMDEN PROPERTY TRUST
Table of Contents
 
 
 
 
Page
PART I
 
 
 
 
 
Item 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2
 
 
 
 
 
Item 3
 
 
 
 
 
Item 4
 
 
 
 
 
PART II
 
 
 
 
 
Item 1
 
 
 
 
 
Item 1A
 
 
 
 
 
Item 2
 
 
 
 
 
Item 3
 
 
 
 
 
Item 4
 
 
 
 
 
Item 5
 
 
 
 
 
Item 6
 
 
 
 
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 101.INS
Exhibit 101.SCH
Exhibit 101.CAL
Exhibit 101.DEF
Exhibit 101.LAB
Exhibit 101.PRE

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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CAMDEN PROPERTY TRUST
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) 
(in thousands, except per share amounts)
March 31,
2016
 
December 31, 2015
Assets
 
 
 
Real estate assets, at cost
 
 
 
Land
$
998,519

 
$
989,247

Buildings and improvements
5,978,843

 
5,911,432

 
$
6,977,362

 
$
6,900,679

Accumulated depreciation
(1,841,107
)
 
(1,780,694
)
Net operating real estate assets
$
5,136,255

 
$
5,119,985

Properties under development, including land
489,730

 
486,918

Investments in joint ventures
32,568

 
33,698

Properties held for sale, including land
238,417

 
239,063

Total real estate assets
$
5,896,970

 
$
5,879,664

Accounts receivable – affiliates
24,011

 
25,100

Other assets, net
107,161

 
116,260

Cash and cash equivalents
6,935

 
10,617

Restricted cash
5,378

 
5,971

Total assets
$
6,040,455

 
$
6,037,612

Liabilities and equity
 
 
 
Liabilities
 
 
 
Notes payable
 
 
 
Unsecured
$
1,866,502

 
$
1,824,930

Secured
899,315

 
899,757

Accounts payable and accrued expenses
140,991

 
133,353

Accrued real estate taxes
25,499

 
45,223

Distributions payable
69,020

 
64,275

Other liabilities
86,423

 
97,814

Total liabilities
$
3,087,750

 
$
3,065,352

Commitments and contingencies (Note 10)

 

Non-qualified deferred compensation share awards
88,550

 
79,364

Equity
 
 
 
Common shares of beneficial interest; $0.01 par value per share; 175,000 shares authorized; 100,635 and 100,636 issued; 97,455 and 97,571 outstanding at March 31, 2016 and December 31, 2015, respectively
975

 
976

Additional paid-in capital
3,658,372

 
3,662,864

Distributions in excess of net income attributable to common shareholders
(491,275
)
 
(458,577
)
Treasury shares, at cost (10,460 and 10,703 common shares at March 31, 2016 and December 31, 2015, respectively)
(378,032
)
 
(386,793
)
Accumulated other comprehensive loss
(1,881
)
 
(1,913
)
Total common equity
$
2,788,159

 
$
2,816,557

Non-controlling interests
75,996

 
76,339

Total equity
$
2,864,155

 
$
2,892,896

Total liabilities and equity
$
6,040,455

 
$
6,037,612

See Notes to Condensed Consolidated Financial Statements.

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CAMDEN PROPERTY TRUST
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME
(Unaudited)
 
Three Months Ended
March 31,
(in thousands, except per share amounts)
2016
 
2015
Property revenues
 
 
 
Rental revenues
$
187,119

 
$
175,220

Other property revenues
30,476

 
26,388

Total property revenues
$
217,595

 
$
201,608

Property expenses
 
 
 
Property operating and maintenance
$
50,269

 
$
48,851

Real estate taxes
26,880

 
24,677

Total property expenses
$
77,149

 
$
73,528

Non-property income
 
 
 
Fee and asset management
$
1,765

 
$
1,563

Interest and other income
224

 
60

Income on deferred compensation plans
63

 
1,864

Total non-property income
$
2,052

 
$
3,487

Other expenses
 
 
 
Property management
$
7,140

 
$
5,792

Fee and asset management
952

 
1,076

General and administrative
12,223

 
9,748

Interest
23,790

 
25,052

Depreciation and amortization
62,091

 
57,984

Expense on deferred compensation plans
63

 
1,864

Total other expenses
$
106,259

 
$
101,516

Gain on sale of operating properties, including land
443

 
85,192

Equity in income of joint ventures
1,497

 
1,382

Income from continuing operations before income taxes
$
38,179

 
$
116,625

Income tax expense
(315
)
 
(429
)
Income from continuing operations
$
37,864

 
$
116,196

Income from discontinued operations
5,076

 
4,869

Net income
$
42,940

 
$
121,065

Less income allocated to non-controlling interests from continuing operations
(1,210
)
 
(5,466
)
Net income attributable to common shareholders
$
41,730

 
$
115,599

See Notes to Condensed Consolidated Financial Statements.

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CAMDEN PROPERTY TRUST
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND COMPREHENSIVE INCOME (Continued)
(Unaudited)
 
Three Months Ended
March 31,
(in thousands, except per share amounts)
2016
 
2015
Earnings per share – basic
 
 
 
Earnings per common share from continuing operations
$
0.41

 
$
1.23

Earnings per common share from discontinued operations
0.05

 
0.06

Total earnings per common share - basic
$
0.46

 
$
1.29

Earnings per share – diluted
 
 
 
Earnings per common share from continuing operations
$
0.41

 
$
1.22

Earnings per common share from discontinued operations
0.05

 
0.05

Total earnings per common share – diluted
$
0.46

 
$
1.27

Distributions declared per common share
$
0.75

 
$
0.70

Weighted average number of common shares outstanding – basic
89,344

 
88,987

Weighted average number of common shares outstanding – diluted
90,509

 
90,464

Condensed Consolidated Statements of Comprehensive Income:
 
 
 
Net income
$
42,940

 
$
121,065

Other comprehensive income
 
 
 
Reclassification of net loss on cash flow hedging activities, prior service cost and net loss on post-retirement obligation
32

 
37

Comprehensive income
$
42,972

 
$
121,102

Less income allocated to non-controlling interests from continuing operations
(1,210
)
 
(5,466
)
Comprehensive income attributable to common shareholders
$
41,762

 
$
115,636

See Notes to Condensed Consolidated Financial Statements.

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CAMDEN PROPERTY TRUST
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
 
 
Common Shareholders
 
 
 
 
(in thousands)
Common
shares of
beneficial
interest
 
Additional
paid-in
capital
 
Distributions
in excess of
net income
 
Treasury
shares, at
cost
 
Accumulated
other
comprehensive
loss
 
Non-controlling interests
 
Total equity
Equity, December 31, 2015
$
976

 
$
3,662,864

 
$
(458,577
)
 
$
(386,793
)
 
$
(1,913
)
 
$
76,339


$
2,892,896

Net income
 
 
 
 
41,730

 
 
 
 
 
1,210

 
42,940

Other comprehensive income
 
 
 
 
 
 
 
 
32

 
 
 
32

Net share awards
 
 
(2,306
)
 
 
 
8,759

 
 
 
 
 
6,453

Employee share purchase plan
 
 
63

 
 
 
2

 
 
 
 
 
65

Change in classification of deferred compensation plan
 
 
(2,376
)
 
 
 
 
 
 
 
 
 
(2,376
)
Change in redemption value of non-qualified share awards
 
 
 
 
(6,810
)
 
 
 
 
 
 
 
(6,810
)
Conversions of operating partnership units
 
 
134

 
 
 
 
 
 
 
(134
)
 
—

Cash distributions declared to equity holders
 
 
 
 
(67,618
)
 
 
 
 
 
(1,419
)
 
(69,037
)
       Other
(1
)
 
(7
)
 
 
 
 
 
 
 
 
 
(8
)
Equity, March 31, 2016
$
975

 
$
3,658,372

 
$
(491,275
)
 
$
(378,032
)
 
$
(1,881
)
 
$
75,996

 
$
2,864,155


See Notes to Condensed Consolidated Financial Statements.

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CAMDEN PROPERTY TRUST
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Continued)
(Unaudited)
 
 
Common Shareholders
 
 
 
 
(in thousands)
Common
shares of
beneficial
interest
 
Additional
paid-in
capital
 
Distributions
in excess of
net income
 
Treasury
shares, at
cost
 
Accumulated
other
comprehensive
loss
 
Non-controlling
interests
 
Total equity
Equity, December 31, 2014
$
976

 
$
3,667,448

 
$
(453,777
)
 
$
(396,626
)
 
$
(2,419
)
 
$
72,807

 
$
2,888,409

Net income
 
 
 
 
115,599

 
 
 
 
 
5,466

 
121,065

Other comprehensive income
 
 
 
 
 
 
 
 
37

 
 
 
37

Net share awards
 
 
(2,726
)
 
 
 
8,444

 
 
 
 
 
5,718

Employee share purchase plan
 
 
65

 
 
 
1

 
 
 
 
 
66

Common share options exercised
 
 
176

 
 
 


 
 
 
 
 
176

Change in classification of deferred compensation plan
 
 
(1,024
)
 
 
 
 
 
 
 
 
 
(1,024
)
Change in redemption value of non-qualified share awards
 
 
 
 
(3,764
)
 
 
 
 
 
 
 
(3,764
)
Diversification of share awards within deferred compensation plan
 
 
1,668

 
1,352

 
 
 
 
 
 
 
3,020

Conversions of operating partnership units
 
 
16

 
 
 
 
 
 
 
(16
)
 
—

Cash distributions declared to equity holders
 
 
 
 
(62,928
)
 
 
 
 
 
(1,328
)
 
(64,256
)
Purchase of non-controlling interests
 
 
(9,480
)
 
 
 
 
 
 
 
(20
)
 
(9,500
)
Other
 
 
(38
)
 
 
 
 
 
 
 
 
 
(38
)
Equity, March 31, 2015
$
976

 
$
3,656,105

 
$
(403,518
)
 
$
(388,181
)
 
$
(2,382
)
 
$
76,909

 
$
2,939,909

See Notes to Condensed Consolidated Financial Statements.

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CAMDEN PROPERTY TRUST
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Three Months Ended
March 31,
(in thousands)
2016
 
2015
Cash flows from operating activities
 
 
 
Net income
$
42,940

 
$
121,065

Income from discontinued operations
(5,076
)
 
(4,869
)
Adjustments to reconcile net income to net cash from operating activities:
 
 
 
Depreciation and amortization
62,091

 
57,984

Gain on sale of operating properties, including land
(443
)
 
(85,192
)
Distributions of income from joint ventures
1,483

 
1,203

Equity in income of joint ventures
(1,497
)
 
(1,382
)
Share-based compensation
4,759

 
3,919

Net change in operating accounts and other
(16,920
)
 
(25,060
)
Net cash from continuing operating activities
$
87,337

 
$
67,668

Net cash from discontinued operating activities
9,173

 
8,868

Net cash from operating activities
$
96,510

 
$
76,536

Cash flows from investing activities
 
 
 
Development and capital improvements
$
(73,065
)
 
$
(96,245
)
Proceeds from sales of operating properties, including land
2,000

 
112,180

Other
(2,664
)
 
(284
)
Net cash from continuing investing activities
$
(73,729
)
 
$
15,651

Net cash from discontinued investing activities
(3,671
)
 
(1,509
)
Net cash from investing activities
$
(77,400
)
 
$
14,142

Cash flows from financing activities
 
 
 
Borrowings on unsecured credit facility and other short-term borrowings
$
966,000

 
$
—

Repayments on unsecured credit facility, other short-term borrowings and notes payable
(925,610
)
 
(714
)
Distributions to common shareholders and non-controlling interests
(64,249
)
 
(60,386
)
Purchase of non-controlling interests
—

 
(9,500
)
Other
1,067

 
357

Net cash from continuing financing activities
$
(22,792
)
 
$
(70,243
)
Net increase (decrease) in cash and cash equivalents
(3,682
)
 
20,435

Cash and cash equivalents, beginning of period
10,617

 
153,918

Cash and cash equivalents, end of period
$
6,935

 
$
174,353

Supplemental information
 
 
 
Cash paid for interest, net of interest capitalized
$
16,552

 
$
14,420

Supplemental schedule of noncash investing and financing activities
 
 
 
Distributions declared but not paid
$
69,020

 
$
64,261

Value of shares issued under benefit plans, net of cancellations
17,545

 
17,297

Net change in redemption of non-qualified share awards
6,810

 
2,412

Accrual associated with construction and capital expenditures
30,157

 
25,637

See Notes to Condensed Consolidated Financial Statements.


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CAMDEN PROPERTY TRUST
Notes to Condensed Consolidated Financial Statements
(Unaudited)

1. Description of Business
Business. Formed on May 25, 1993, Camden Property Trust, a Texas real estate investment trust ("REIT"), is primarily engaged in the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. Our multifamily apartment communities are referred to as "communities," "multifamily communities," "properties," or "multifamily properties" in the following discussion. As of March 31, 2016, we owned interests in, operated, or were developing 180 multifamily properties comprised of 62,649 apartment homes across the United States, including 4,918 apartment homes located in Las Vegas, Nevada, which were held for sale at March 31, 2016, and subsequently sold to an unaffiliated third party on April 26, 2016. Of the 180 properties, seven properties were under construction, and when completed will consist of a total of 2,477 apartment homes. We also own land holdings which we may develop into multifamily communities in the future.

2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements
Principles of Consolidation. Our condensed consolidated financial statements include our accounts and the accounts of other subsidiaries and joint ventures (including partnerships and limited liability companies) over which we have control. All intercompany transactions, balances, and profits have been eliminated in consolidation. Investments acquired or created are evaluated based on the accounting guidance relating to variable interest entities ("VIEs"), which requires the consolidation of VIEs in which we are considered to be the primary beneficiary. If the investment is determined not to be a VIE, then the investment is evaluated for consolidation (primarily using a voting interest model) under the remaining consolidation guidance relating to real estate entities. If we are the general partner of a limited partnership, or manager of a limited liability company, we also consider the consolidation guidance relating to the rights of limited partners, or non-managing members, to assess whether the limited partners, or non-managing members, hold substantive kick-out or participating rights which indicate we do not have a controlling financial interest. At March 31, 2016, two of our consolidated operating partnerships are VIEs, of which we held between 92% and 94% of the outstanding common limited partnership units and the sole 1% general partnership interest of each consolidated operating partnership. As we are considered the primary beneficiary, we would continue to consolidate these operating partnerships.

Interim Financial Reporting. We have prepared these unaudited financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial statements and the applicable rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, these statements do not include all information and footnote disclosures required for annual statements. While we believe the disclosures presented are adequate for interim reporting, these interim unaudited financial statements should be read in conjunction with the audited financial statements and notes included in our 2015 Annual Report on Form 10-K. Certain insignificant amounts in the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2015 have been reclassified to conform to the current year presentation. These reclassifications had no impact on our condensed consolidated cash flows from
operating, investing or financing activities. As a result of our adoption of Accounting Standards Update 2015-03 ("ASU 2015-03"), "Simplifying the Presentation of Debt Issuance Costs," as supplemented by Accounting Standards Update 2015-15 ("ASU 2015-15"), "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements," as of December 31, 2015, we reclassified $0.4 million of deferred financing charges relating to our unsecured credit facility to depreciation and amortization in our condensed consolidated statements of income and comprehensive income for the three months ended March 31, 2015. We also reclassified $0.4 million of deferred charges for the three months ended March 31, 2015 to interest expense. In the opinion of management, all adjustments and eliminations, consisting of normal recurring adjustments, necessary for a fair representation of our financial statements for the interim period reported have been included. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results which may be expected for the full year.

Acquisitions of Real Estate. Upon acquisition of real estate, we determine the fair value of tangible and intangible assets, which includes land, buildings (as-if-vacant), furniture and fixtures, the value of in-place leases, including above and below market leases, and acquired liabilities. In estimating these values, we apply methods similar to those used by independent appraisers of income-producing property. Upon the acquisition of a controlling interest of an investment in an unconsolidated joint venture, such joint venture is consolidated and our initial equity investment is remeasured to fair value at the date the controlling interest is acquired; any difference between the carrying value of the previously held equity investment and the fair value is recognized in earnings at the time of obtaining control. Transaction costs associated with the acquisition of operating real estate assets are expensed. Estimates of fair value of acquired debt are based upon interest rates available for the issuance of debt with similar terms and remaining maturities. Depreciation is computed on a straight-line basis over the remaining useful

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lives of the related tangible assets. The value of in-place leases and above or below market leases is amortized over the estimated average remaining life of leases in place at the time of acquisition.
Asset Impairment. Long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment may exist if estimated future undiscounted cash flows associated with long-lived assets are not sufficient to recover the carrying value of such assets. We consider projected future discounted and undiscounted cash flows, trends, strategic decisions regarding future development plans, and other factors in our assessment of whether impairment conditions exist. While we believe our estimates of future cash flows are reasonable, different assumptions regarding a number of factors, including, but not limited to, market rents, economic conditions, and occupancies, could significantly affect these estimates. In estimating fair value, management uses appraisals, management estimates, and discounted cash flow calculations which utilize inputs from a marketplace participant's perspective. When impairment exists, the long-lived asset is adjusted to its fair value. In addition, we evaluate our equity investments in joint ventures and if we believe there is an other than temporary decline in market value of our investment below our carrying value, we will record an impairment charge. We did not record any impairment charges for the three months ended March 31, 2016 or 2015.

The value of our properties under development depends on market conditions, including estimates of the project start date as well as estimates of demand for multifamily communities. We have reviewed market trends and other marketplace information and have incorporated this information as well as our current outlook into the assumptions we use in our impairment analyses. Due to the judgment and assumptions applied in the impairment analyses, it is possible actual results could differ substantially from those estimated.

We believe the carrying value of our operating real estate assets, properties under development, and land is currently recoverable. However, if market conditions deteriorate or if changes in our development strategy significantly affect any key assumptions used in our fair value estimates, we may need to take material charges in future periods for impairments related to existing assets. Any such material non-cash charges could have an adverse effect on our consolidated financial position and results of operations.

Cost Capitalization. Real estate assets are carried at cost plus capitalized carrying charges. Carrying charges are primarily interest and real estate taxes which are capitalized as part of properties under development. Capitalized interest is generally based on the weighted average interest rate of our unsecured debt. Expenditures directly related to the development and improvement of real estate assets are capitalized at cost as land and buildings and improvements. Indirect development costs, including salaries and benefits and other related costs directly attributable to the development of properties, are also capitalized. We begin capitalizing development, construction, and carrying costs when the development of the future real estate asset is probable and activities necessary to prepare the underlying real estate for its intended use have been initiated. All construction and carrying costs are capitalized and reported in the balance sheet as properties under development until the apartment homes are substantially completed. Upon substantial completion of the apartment homes, the total capitalized development cost for the apartment homes and the associated land is transferred to buildings and improvements and land, respectively.

As discussed above, carrying charges are principally interest and real estate taxes capitalized as part of properties under development. Capitalized interest was approximately $4.6 million and $5.4 million for the three months ended March 31, 2016 and 2015, respectively. Capitalized real estate taxes were approximately $1.6 million and $0.9 million for the three months ended March 31, 2016 and 2015, respectively.

Depreciation and amortization is computed over the expected useful lives of depreciable property on a straight-line basis with lives generally as follows:
 
Estimated
Useful Life
Buildings and improvements
5-35 years
Furniture, fixtures, equipment, and other
3-20 years
Intangible assets/liabilities (in-place leases and above and below market leases)
underlying lease term

Discontinued Operations. A property is classified as a discontinued operation when the disposal represents a strategic shift, such as disposal of a major line of business, a major geographical area or a major equity investment. The results of operations for properties sold or classified as held for sale at the end of the period, and meeting the above criteria of discontinued operations, are classified as discontinued operations for all periods presented. The property-specific components of earnings classified as discontinued operations include separately identifiable property-specific revenues, expenses,

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depreciation, and interest expense, if any. The gain or loss resulting from the eventual disposal of the held for sale properties meeting the criteria of discontinued operations is also classified within discontinued operations. Real estate assets held for sale are measured at the lower of carrying amount or fair value less costs to sell and are presented separately in the accompanying condensed consolidated balance sheets for all periods presented. Subsequent to classification of a property as held for sale, no further depreciation is recorded. Properties sold by our unconsolidated entities which do not meet the above criteria of discontinued operations are not included in discontinued operations and related gains or losses are reported as a component of equity in income of joint ventures.
Gains on sale of real estate are recognized using the full accrual or partial sale methods, as applicable, in accordance with GAAP, provided various criteria relating to the terms of sale and any subsequent involvement with the real estate sold are satisfied.
See Note 5, "Acquisitions, Dispositions, Discontinued Operations and Assets Held for Sale," for a discussion of discontinued operations for the three months ended March 31, 2016. There were no discontinued operations for the three months ended March 31, 2015.
Fair Value. For financial assets and liabilities recorded at fair value on a recurring or non-recurring basis, fair value is the price we would expect to receive to sell an asset, or pay to transfer a liability, in an orderly transaction with a market participant at the measurement date. In the absence of such data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction.
In determining fair value, observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions; preference is given to observable inputs. These two types of inputs create the following fair value hierarchy:
•
Level 1:    Quoted prices for identical instruments in active markets.
•
Level 2:    Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
•
Level 3:    Significant inputs to the valuation model are unobservable.
Recurring Fair Value Measurements. The valuation methodology we use to measure our deferred compensation plan investments is based on quoted market prices utilizing public information for the same transactions. Our deferred compensation plan investments are recorded at fair value on a recurring basis and included in other assets in our condensed consolidated balance sheets.
Non-Recurring Fair Value Measurements. Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances. These assets primarily include long-lived assets which are recorded at fair value if they are impaired using the fair value methodologies used to measure long-lived assets described above at "Asset Impairment." Non-recurring fair value disclosures are not provided for impairments on assets disposed during the period because they are no longer owned by us. The inputs associated with the valuation of long-lived assets are generally included in Level 3 of the fair value hierarchy, unless a quoted price for a similar long-lived asset in an active market exists, at which time they are included in Level 2 of the fair value hierarchy.
Financial Instrument Fair Value Disclosures. As of March 31, 2016 and December 31, 2015, the carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and distributions payable represent fair value because of the short-term nature of these instruments. The carrying value of restricted cash approximates its fair value based on the nature of our assessment of the ability to recover these amounts. The carrying values of our notes receivable also approximate their fair values, which are based on certain factors, such as market interest rates, terms of the note and credit worthiness of the borrower. These financial instruments utilize Level 3 inputs. In calculating the fair value of our notes payable, interest rate and spread assumptions reflect current credit worthiness and market conditions available for the issuance of notes payable with similar terms and remaining maturities. These financial instruments utilize Level 2 inputs.
Notes Receivable. Our notes receivable, which are included in other assets, net, in our condensed consolidated balance sheets, relate to real estate secured loans to unaffiliated third parties. At March 31, 2016 and December 31, 2015, we had outstanding notes receivable balances of approximately $17.0 million and $13.2 million, respectively, and the weighted average interest rate on such notes was approximately 4.1% and 4.3% for the three months ended March 31, 2016 and 2015, respectively. At March 31, 2016, we were also committed to funding additional amounts under one of the loans in the amount

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of approximately $4.6 million. Interest is recognized over the lives of the notes and is included in interest and other income in our consolidated statements of income and comprehensive income. We consider a note receivable to be impaired if it is probable we will not collect all contractually due principal and interest. We do not accrue interest when a note is considered impaired and an allowance is recorded for any principal and previously accrued interest which is not believed to be collectible.
Recent Accounting Pronouncements. In January 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2016-01 ("ASU 2016-01"), "Recognition and Measurement of Financial Assets and Financial Liabilities." ASU 2016-01 changes certain recognition, measurement, presentation, and disclosure requirements for financial instruments. This standard requires all equity investments, except those accounted for under the equity method of accounting or resulting in consolidation, to be measured at fair value with changes in fair value recognized in net income. This standard also simplifies the impairment assessment for equity investments without readily determinable fair values, amends the presentation requirements for changes in the fair value of financial liabilities, requires presentation of financial instruments by measurement category and form of financial asset, and eliminates the requirement to disclose the methods and significant assumptions used in estimating the fair value of financial instruments. ASU 2016-01 is effective for interim and annual periods beginning after December 15, 2017, and early adoption is not permitted except for the amended presentation requirements for changes in the fair value of financial liabilities. We expect to adopt ASU 2016-01 as of January 1, 2018, and do not expect it to have a material impact on our consolidated financial statements upon adoption.
In February 2016, the FASB issued Accounting Standards Update 2016-02 ("ASU 2016-02"), "Leases." ASU 2016-02 requires lessees to recognize right-of-use assets and lease liabilities on the balance sheet for all leases of property, plant and equipment with lease terms greater than 12 months. Prior to this accounting standard, only capital leases were recognized on the balance sheet. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. This standard must be applied as of the beginning of the earliest comparative period presented in the year of adoption. We expect to adopt ASU 2016-02 as of January 1, 2019, and we are currently evaluating the impact this standard may have on our consolidated financial statements upon adoption.

In March 2016, the FASB issued Accounting Standards Update 2016-07 ("ASU 2016-07"), "Simplifying the Transition to the Equity Method of Accounting." ASU 2016-07 eliminates the requirement to retroactively adjust an investment when the investment qualifies for use of the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. Additionally, if the investment was previously accounted for as an available-for-sale security, any unrealized holding gain or loss in accumulated other comprehensive income would be recognized in earnings at the date the investment qualifies for the equity method of accounting. ASU 2016-07 is effective for interim and annual periods beginning after December 15, 2016, and early adoption is permitted. This standard must be applied prospectively. We expect to adopt ASU 2016-07 as of January 1, 2017, and do not expect it to have a material impact on our consolidated financial statements upon adoption.

In March 2016, the FASB issued Accounting Standards Update 2016-09 ("ASU 2016-09"), "Improvements to Employee Share-Based Payment Accounting." ASU 2016-09 amends several aspects of the accounting for share-based payment transactions, including the income tax consequences, accrual of compensation cost, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for interim and annual periods beginning after December 15, 2016, and early adoption is permitted. The amendments in this standard must be applied prospectively, retrospectively, or as of the beginning of the earliest comparative period presented in the year of adoption, depending on the type of amendment. We expect to adopt ASU 2016-09 as of January 1, 2017, and we are currently evaluating the impact this standard may have on our consolidated financial statements upon adoption.

In May 2014, the FASB issued Accounting Standards Update 2014-09 ("ASU 2014-09"), "Revenue from Contracts with Customers." ASU 2014-09 provides a single comprehensive revenue recognition model for contracts with customers (excluding certain contracts, such as lease contracts) to improve comparability within industries. ASU 2014-09 requires an entity to recognize revenue to reflect the transfer of goods or services to customers at an amount the entity expects to be paid in exchange for those goods and services and provide enhanced disclosures, all to provide more comprehensive guidance for transactions such as service revenue and contract modifications. In August 2015, the FASB deferred the effective date of ASU 2014-09 by one year, and it is now effective for interim and annual periods beginning after December 15, 2017. In March 2016, the FASB issued Accounting Standards Update 2016-08 ("ASU 2016-08"), "Principal versus Agent Considerations (Reporting Revenue Gross versus Net)." ASU 2016-08 amends ASU 2014-09 to assist in the decision of whether an entity is a principal or agent in a revenue transaction in which a third party is involved in providing goods or services to a customer of the entity. Early adoption of ASU 2014-09 is permitted but not before the original effective date, which applied to interim and annual periods beginning after December 15, 2016. ASU 2014-09 may be applied using either a full retrospective or a modified approach upon adoption. We expect to adopt this standard as of January 1, 2018, and we are currently evaluating the impact this standard may have on our consolidated financial statements upon adoption.

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3. Per Share Data
Basic earnings per share are computed using net income attributable to common shareholders and the weighted average number of common shares outstanding. Diluted earnings per share reflect common shares issuable from the assumed conversion of common share options and share awards granted and units convertible into common shares. Only those items having a dilutive impact on our basic earnings per share are included in diluted earnings per share. Our unvested share-based awards are considered participating securities and are reflected in the calculation of basic and diluted earnings per share using the two-class method. The number of common share equivalent securities excluded from the diluted earnings per share calculation was approximately 1.7 million and 1.5 million for the three months ended March 31, 2016 and 2015, respectively. These securities, which include common share options and share awards granted and units convertible into common shares, were excluded from the diluted earnings per share calculation as they are anti-dilutive.

The following table presents information necessary to calculate basic and diluted earnings per share for the periods indicated:
 
 
Three Months Ended
March 31,
(in thousands, except per share amounts)
 
2016
 
2015
Earnings per common share calculation – basic
 
 
 
 
Income from continuing operations attributable to common shareholders
 
$
36,654

 
$
110,730

Amount allocated to participating securities
 
(232
)
 
(1,052
)
Income from continuing operations attributable to common shareholders, net of amount allocated to participating securities
 
$
36,422

 
$
109,678

Income from discontinued operations attributable to common shareholders
 
5,076

 
4,869

Net income attributable to common shareholders, as adjusted – basic
 
$
41,498

 
$
114,547

 
 
 
 
 
Earnings per common share from continuing operations
 
$
0.41

 
$
1.23

Earnings per common share from discontinued operations
 
0.05

 
0.06

Total earnings per common share – basic
 
$
0.46

 
$
1.29

 
 
 
 
 
Weighted average number of common shares outstanding – basic
 
89,344

 
88,987

 
 
 
 
 
Earnings per common share calculation – diluted
 
 
 
 
Income from continuing operations attributable to common shareholders, net of amount allocated to participating securities
 
$
36,422

 
$
109,678

Income allocated to common units from continuing operations
 
328

 
766

Income from continuing operations attributable to common shareholders, as adjusted
 
$
36,750

 
$
110,444

Income from discontinued operations attributable to common shareholder
 
5,076

 
4,869

Net income attributable to common shareholders – diluted
 
$
41,826

 
$
115,313

 
 
 
 
 
Earnings per common share from continuing operations
 
$
0.41

 
$
1.22

Earnings per common share from discontinued operations
 
0.05

 
0.05

Total earnings per common share – diluted
 
$
0.46

 
$
1.27

 
 
 
 
 
Weighted average number of common shares outstanding – basic
 
89,344

 
88,987

Incremental shares issuable from assumed conversion of:
 
 
 
 
Common share options and share awards granted
 
355

 
391

Common units
 
810

 
1,086

Weighted average number of common shares outstanding – diluted
 
90,509

 
90,464



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4. Common Shares
In November 2014, we created an at-the-market ("ATM") share offering program through which we can, but have no obligation to, sell common shares having an aggregate offering price of up to $331.3 million (the "2014 ATM program"), in amounts and at times as we determine, into the existing trading market at current market prices as well as through privately negotiated transactions. Actual sales from time to time may depend on a variety of factors including, among others, market conditions, the trading price of our common shares, and determinations by management of the appropriate sources of funding for us. We intend to use the net proceeds from any future sales under the 2014 ATM program for general corporate purposes, which may include reducing future borrowings under our unsecured credit facility or other short-term borrowings, the repayment of other indebtedness, the redemption or other repurchase of outstanding debt or equity securities, funding for development, redevelopment and investment projects and financing for acquisitions.
 
There were no shares sold during the three months ended March 31, 2016 or 2015 under the 2014 ATM program. As of the date of this filing, we had common shares having an aggregate offering price of up to $315.3 million remaining available for sale under the 2014 ATM program. No shares were sold subsequent to March 31, 2016 through the date of this filing under the 2014 ATM program.

In January 2008, our Board of Trust Managers approved an increase of the April 2007 repurchase plan to allow for the repurchase of up to $500 million of our common equity securities through open market purchases, block purchases, and privately negotiated transactions. Under this program, we repurchased 4.3 million shares for a total of approximately $230.2 million from April 2007 through December 31, 2008 and there have not been any shares repurchased subsequent to that date. As of the date of this filing, the remaining dollar value of our common equity securities authorized to be repurchased under the program was approximately $269.8 million.

We currently have an automatic shelf registration statement which allows us to offer, from time to time, common shares, preferred shares, debt securities, or warrants. Our Amended and Restated Declaration of Trust provides we may issue up to 185 million shares of beneficial interest, consisting of 175 million common shares and 10 million preferred shares. At March 31, 2016, we had approximately 87.0 million common shares outstanding, net of treasury shares and shares held in our deferred compensation arrangements, and no preferred shares outstanding.
5. Acquisitions, Dispositions, Discontinued Operations and Assets Held for Sale
Acquisitions of Land. In February 2016, we acquired approximately 2.0 acres of land in Charlotte, North Carolina for approximately $4.1 million. We did not acquire any land during the three months ended March 31, 2015.

Land Holding Dispositions. In February 2016, we sold approximately 6.3 acres of land adjacent to an operating property in Tampa, Florida for approximately $2.2 million and recognized a gain of approximately $0.4 million. In March 2015, we sold a land holding adjacent to an operating property in Dallas, Texas for approximately $0.4 million and recognized a gain of approximately $0.1 million.

Sale of Operating Properties. We did not sell any operating properties during the three months ended March 31, 2016. In January 2015, we sold two operating properties, which were included in properties held for sale at December 31, 2014, comprised of 1,116 apartment homes located in Tampa, Florida and Austin, Texas for approximately $114.4 million and we recognized a gain of approximately $85.1 million relating to these property sales.

Discontinued Operations and Assets Held for Sale. We intend to continue our practice of seeking to make selective dispositions as market conditions warrant and opportunities arise. In accordance with this practice, on April 26, 2016, we sold 15 operating properties, comprised of 4,918 apartment homes, with an average age of 23 years, a retail center and approximately 19.6 acres of land, all located in Las Vegas, Nevada to an unaffiliated third party for approximately $630.0 million. For each of the three months ended March 31, 2016 and 2015, income from discontinued operations included the results of operations of the 15 operating properties and the retail center.


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The following is a summary of the operating properties, retail center and land classified as held for sale in the condensed consolidated balance sheets at March 31, 2016 and December 31, 2015, which consisted of the 15 operating properties, retail center and land sold subsequent to March 31, 2016:
(in thousands)
 
March 31, 2016
 
December 31, 2015
Land
 
$
59,438

 
$
59,438

Buildings and improvements
 
377,100

 
373,419

 
 
$
436,538

 
$
432,857

Accumulated depreciation
 
(202,323
)
 
(197,996
)
Net operating real estate assets
 
$
234,215

 
$
234,861

Properties under development, including land
 
4,202

 
4,202

Properties held for sale, including land
 
$
238,417

 
$
239,063

Other assets related to properties held for sale, including land
 
1,139

 
1,191

Total assets held for sale
 
$
239,556

 
$
240,254

 
 
 
 
 
Liabilities related to assets held for sale
 
$
1,371

 
$
1,654



The following is a summary of income from discontinued operations for the three months ended March 31, 2016 and 2015 relating to the 15 operating properties and retail center held for sale at March 31, 2016, which were sold subsequent to March 31, 2016:
 
 
Three Months Ended March 31,
(in thousands)
 
2016
 
2015
Property revenues
 
$
14,827

 
$
13,826

Property expenses
 
(5,148
)
 
(4,883
)
 
 
$
9,679

 
$
8,943

Property management expense
 
(176
)
 
(170
)
Depreciation and amortization
 
(4,327
)
 
(3,904
)
Income tax expense
 
(100
)
 
—

Income from discontinued operations
 
$
5,076

 
$
4,869


6. Investments in Joint Ventures
As of March 31, 2016, our equity investments in unconsolidated joint ventures, which we account for utilizing the equity method of accounting, consisted of three discretionary investment funds (collectively, "the Funds"), with our ownership percentages ranging from 20% to 31.3%. One of the Funds, in which we have a 20% ownership interest, does not own any properties for any periods presented. We provide property and asset management and other services to the Funds which own operating properties and we may also provide construction and development services to the Funds which own properties under development. The following table summarizes the combined balance sheet and statement of income data for the Funds as of and for the periods presented:
 
(in millions)
March 31, 2016
 
December 31, 2015
Total assets
$
736.2

 
$
748.0

Total third-party debt
528.2

 
527.0

Total equity
191.6

 
195.3


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Three Months Ended
March 31,
(in millions)
2016
 
2015
Total revenues
$
29.5

 
$
27.5

Net income
2.8

 
2.7

Equity in income (1)
1.5

 
1.4

 
(1)
Equity in income excludes our ownership interest of fee income from various services provided by us to the Funds.

The Funds in which we have a partial interest have been funded in part with secured third-party debt. As of March 31, 2016, we had no outstanding guarantees related to debt of the Funds.

We may earn fees for property and asset management, construction, development, and other services related to joint ventures in which we own an equity interest and may earn a promoted equity interest if certain thresholds are met. We eliminate fee income for services provided to these joint ventures to the extent of our ownership. Fees earned for these services, net of eliminations, were approximately $1.3 million and $1.4 million for the three months ended March 31, 2016 and 2015, respectively.

7. Notes Payable
The following is a summary of our indebtedness:
(in millions)
 
March 31,
2016
 
December 31, 2015
Commercial banks
 
 
 
 
Unsecured credit facility
 
$
265.0

 
$
225.0

Unsecured short-term borrowings
 
20.0

 
19.0

 
 
$
285.0

 
$
244.0

 
 
 
 
 
Senior unsecured notes (1)
 
 
 
 
5.83% Notes, due 2017
 
246.4

 
246.3

4.78% Notes, due 2021
 
248.2

 
248.0

3.15% Notes, due 2022
 
345.5

 
345.4

5.07% Notes, due 2023
 
246.9

 
246.8

4.36% Notes, due 2024
 
248.0

 
248.0

3.68% Notes, due 2024
 
246.5

 
246.4

 
 
$
1,581.5

 
$
1,580.9

 
 
 
 
 
Total unsecured notes payable
 
1,866.5

 
1,824.9

 
 
 
 
 
Secured notes (1)
 
 
 
 
1.38% – 5.77% Conventional Mortgage Notes, due 2018 – 2045
 
867.2

 
867.4

Tax-exempt Mortgage Note, due 2028 (1.62% floating rate)
 
32.1

 
32.4

 
 
899.3

 
899.8

Total notes payable
 
$
2,765.8

 
$
2,724.7

 
 
 
 
 
Other floating rate debt included in secured notes (1.38%)
 
$
175.0

 
$
175.0

(1)
Unamortized debt discounts and debt issuance costs of $17.9 million and $18.6 million are included in senior unsecured and secured notes payable as of March 31, 2016 and December 31, 2015, respectively.

We have a $600 million unsecured credit facility which matures in August 2019, with two six-month options to extend the maturity date at our election to August 2020. Additionally, we have the option to further increase our credit facility to $900 million by either adding additional banks to the facility or obtaining the agreement of the existing banks to increase their commitments. The interest rate on our credit facility is based upon the London Interbank Offered Rate ("LIBOR") plus a margin which is subject to change as our credit ratings change. Advances under our credit facility may be priced at the

16
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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 180 days or less and may not exceed the lesser of $300 million or the remaining amount available under our credit facility. Our credit facility is subject to customary financial covenants and limitations. We believe we are in compliance with all such financial covenants and limitations on the date of this filing.

Our credit facility provides us with the ability to issue up to $50 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding under our credit facility, it does reduce the amount available. At March 31, 2016, we had approximately $265.0 million outstanding on our $600 million credit facility and we had outstanding letters of credit totaling approximately $9.4 million, leaving approximately $325.6 million available under our credit facility.

We also have a $40 million unsecured short-term borrowing facility which matures in May 2016. The interest rate is based upon LIBOR plus 1.05%. At March 31, 2016, we had approximately $20.0 million outstanding on our unsecured short-term borrowing facility.

At March 31, 2016 and 2015, we had outstanding floating rate debt of approximately $492.1 million and $208.8 million, respectively, which included our unsecured credit facility and unsecured short-term borrowings, and the weighted average interest rate on such debt was approximately 1.4% and 1.0% for the three months ended March 31, 2016 and 2015, respectively.

Our indebtedness, which includes our unsecured credit facility and unsecured short-term borrowings, had a weighted average maturity of approximately 5.4 years at March 31, 2016. The table below is a summary of the maturity dates of our outstanding debt and principal amortizations, and the weighted average interest rates on such debt, at March 31, 2016: 
(in millions)
 
Amount
 
Weighted Average 
Interest Rate
2016 (1)
 
$
20.1

 
1.5
%
2017
 
247.2

 
5.8

2018
 
175.8

 
1.4

2019 (2)
 
910.2

 
4.2

2020
 
1.1

 
—

Thereafter
 
1,411.4

 
4.1

Total
 
$
2,765.8

 
4.1
%
(1)
Includes $20.0 million of unsecured short-term borrowings.
(2)
Includes $265.0 million balance outstanding under our unsecured credit facility.

8. Share-based Compensation and Non-Qualified Deferred Compensation Plan
Incentive Compensation. During the second quarter of 2011, our Board of Trust Managers adopted, and our shareholders approved, the 2011 Share Incentive Plan of Camden Property Trust (as amended, the "2011 Share Plan"). Under the 2011 Share Plan, we may issue up to a total of approximately 9.1 million fungible units (the "Fungible Pool Limit"), which is comprised of approximately 5.8 million new fungible units plus approximately 3.3 million fungible units previously available for issuance under our 2002 share incentive plan based on a 3.45 to 1.0 fungible unit to full value award conversion ratio. Fungible units represent the baseline for the number of shares available for issuance under the 2011 Share Plan. Different types of awards are counted differently against the Fungible Pool Limit, as follows:
 
•
Each share issued or to be issued in connection with an award, other than an option, right or other award which does not deliver the full value at grant of the underlying shares, will be counted against the Fungible Pool Limit as 3.45 fungible pool units;
•
Options and other awards which do not deliver the full value at grant of the underlying shares and which expire more than five years from date of grant will be counted against the Fungible Pool Limit as one fungible pool unit; and
•
Options, rights and other awards which do not deliver the full value at grant and expire five years or less from the date of grant will be counted against the Fungible Pool Limit as 0.83 of a fungible pool unit.

At March 31, 2016, approximately 3.8 million fungible units were available under the 2011 Share Plan, which results in approximately 1.1 million common shares which may be granted pursuant to full value awards based on the 3.45 to 1.0 fungible unit to full value award conversion ratio.


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Awards which may be granted under the 2011 Share Plan include incentive share options, non-qualified share options (which may be granted separately or in connection with an option), share awards, dividends and dividend equivalents and other equity based awards. Persons eligible to receive awards under the 2011 Share Plan are trust managers, directors of our affiliates, executive and other officers, key employees and consultants, as determined by the Compensation Committee of our Board of Trust Managers. The 2011 Share Plan will expire on May 11, 2021.

Options. New options are exercisable, subject to the terms and conditions of the 2011 Share Plan, in increments ranging from 20% to 33.33% per year on each of the anniversaries of the date of grant. The 2011 Share Plan provides that the exercise price of an option will be determined by the Compensation Committee of the Board of Trust Managers on the day of grant, and to date all options have been granted at an exercise price that equals the fair market value on the date of grant. There were no options granted or exercised during the three months ended March 31, 2016. Approximately 0.1 million options were exercised during the three months ended March 31, 2015 and had a total intrinsic value of approximately $2.0 million. At March 31, 2016, there was no unrecognized compensation cost related to unvested options. At March 31, 2016, all options outstanding were exercisable and had a weighted average remaining life of approximately 2.9 years.

The following table summarizes outstanding share options, all of which were exercisable, at March 31, 2016:
 
 
Options Outstanding and Exercisable (1)
Range of Exercise Prices
 
Number
 
Weighted
Average Price
$30.06
 
105,015

 
$
30.06

$41.16 - $43.94
 
119,242

 
42.46

$48.02 - $75.17
 
70,948

 
60.92

Total options
 
295,205

 
$
42.49

 

(1)
The aggregate intrinsic value of options outstanding and exercisable at March 31, 2016 was $12.3 million. The aggregate intrinsic value was calculated as the excess, if any, between our closing share price of $84.09 per share on March 31, 2016 and the strike price of the underlying award.

Share Awards and Vesting. Share awards for employees generally have a vesting period of three to five years. The compensation cost for share awards is generally based on the market value of the shares on the date of grant and is amortized over the vesting period. In the event the holder of the share awards will reach both the retirement eligibility age of 65 years and the service requirements as defined in the 2011 Share Plan before the term in which the awards are scheduled to vest, the value of the share awards is amortized from the date of grant to the individual's retirement eligibility date. To estimate forfeitures, we use actual forfeiture history. At March 31, 2016, the unamortized value of previously issued unvested share awards was approximately $42.8 million, which is expected to be amortized over the next three years. The total fair value of shares vested during the three months ended March 31, 2016 and 2015 was approximately $20.9 million and $17.6 million, respectively.

Total compensation cost for option and share awards charged against income was approximately $5.1 million and $4.1 million for the three months ended March 31, 2016 and 2015, respectively. Total capitalized compensation cost for option and share awards was approximately $0.9 million and $0.8 million for the three months ended March 31, 2016 and 2015, respectively.

The following table summarizes activity under our share incentive plans for the three months ended March 31, 2016:
 
 
Options
Outstanding
 
Weighted
Average
Exercise /
Grant Price
 
Nonvested
Share
Awards
Outstanding
 
Weighted
Average
Exercise /  Grant Price
Options and nonvested share awards outstanding at December 31, 2015
295,205

 
$
42.49

 
750,246

 
$
68.09

Granted
—

 
—

 
242,619

 
73.63

Exercised/Vested
—

 
—

 
(312,584
)
 
66.96

Forfeited
—

 
—

 
(4,714
)
 
70.00

Total options and nonvested share awards outstanding at March 31, 2016
295,205

 
$
42.49

 
675,567

 
$
70.59



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Non-Qualified Deferred Compensation Plan. In February 2014, we adopted the Second Amended and Restated Camden Property Trust Non-Qualified Deferred Compensation Plan to clarify certain terms in the existing plan relating to the deferral of performance-based compensation. As a result of such action, the fully vested awards and the proportionate share of nonvested awards eligible for diversification were reclassified from additional paid in capital to temporary equity in our condensed consolidated balance sheets. The share awards are adjusted to their redemption value at each reporting period, with the redemption value based on the market value of the shares at the end of the reporting period. Changes in value from period to period are charged to distributions in excess of net income attributable to common shareholders in our condensed consolidated statements of equity.

The following table summarizes the eligible share award activity as recorded in temporary equity for the three months ended March 31, 2016:
(in thousands)
 
Three Months Ended
March 31, 2016
Temporary equity:
 
 
Balance at December 31, 2015
 
$
79,364

Change in classification
 
2,376

Change in redemption value
 
6,810

Diversification of share awards
 
—

Balance at March 31, 2016
 
$
88,550


9. Net Change in Operating Accounts
The effect of changes in the operating and other accounts on cash flows from operating activities is as follows:
  
Three Months Ended
March 31,
(in thousands)
2016
 
2015
Change in assets:
 
 
 
Other assets, net
$
6,073

 
$
5,494

Change in liabilities:
 
 
 
Accounts payable and accrued expenses
1,768

 
(14,191
)
Accrued real estate taxes
(19,722
)
 
(15,857
)
Other liabilities
(5,779
)
 
(1,238
)
Other
740

 
732

Change in operating accounts and other
$
(16,920
)
 
$
(25,060
)

10. Commitments and Contingencies
Construction Contracts. As of March 31, 2016, we estimate the additional cost to complete the seven consolidated projects currently under construction to be approximately $245.5 million. We expect to fund this amount through a combination of one or more of the following: cash flows generated from operations, draws on our unsecured credit facilities, proceeds from property dispositions, the use of debt and equity offerings under our automatic shelf registration statement, equity issued from our ATM program, other unsecured borrowings and secured mortgages.

Other Commitments and Contingencies. In the ordinary course of our business, we issue letters of intent indicating a willingness to negotiate for acquisitions, dispositions, or joint ventures and also enter into arrangements contemplating various transactions. Such letters of intent and other arrangements are non-binding as to either party unless and until a definitive contract is entered into by the parties. Even if definitive contracts relating to the purchase or sale of real property are entered into, these contracts generally provide the purchaser with time to evaluate the property and conduct due diligence, 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 definitive contracts will be entered into with respect to any matter covered by letters of intent or we will consummate any transaction contemplated by any definitive contract. Furthermore, due diligence periods for real property are frequently extended as needed. An acquisition or sale of real property becomes probable at the time the due diligence period expires and the definitive contract has not been terminated. We are then at risk under a real property acquisition contract, but generally only to the extent of any earnest money deposits associated with the contract, and are obligated to sell under a real property sales contract. At March 31, 2016, we had earnest money deposits of approximately $0.6

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million for potential acquisitions of land which are included in other assets, net in our condensed consolidated balance sheets. Approximately $0.3 million of these deposits was non-refundable at March 31, 2016.

Lease Commitments. At March 31, 2016, we had long-term leases covering certain land, office facilities, and equipment. Rental expense totaled approximately $1.0 million and 0.8 million for the three months ended March 31, 2016 and 2015, respectively. Minimum annual rental commitments for the remainder of 2016 are $2.2 million, and for the years ending December 31, 2017 through 2020 are approximately $2.9 million, $2.7 million, $2.5 million, and $2.5 million, respectively, and approximately $11.1 million in the aggregate thereafter.

Investments in Joint Ventures. We have entered into, and may continue in the future to enter into, joint ventures or partnerships, including limited liability companies, through which we own an indirect economic interest in less than 100% of the community or land owned directly by the joint venture or partnership. Our decision whether to hold the entire interest in an apartment community or land ourselves, or to have an indirect interest in the community or land through a joint venture or partnership, is based on a variety of factors and considerations, including: (i) our projection, in some circumstances, that we will achieve higher returns on our invested capital or reduce our risk if a joint venture or partnership vehicle is used; (ii) our desire to diversify our portfolio of investments by market; (iii) our desire at times to preserve our capital resources to maintain liquidity or balance sheet strength; and (iv) the economic and tax terms required by a seller of land or of a community, who may prefer or who may require less payment if the land or community is contributed to a joint venture or partnership. Investments in joint ventures or partnerships are not limited to a specified percentage of our assets. Each joint venture or partnership agreement is individually negotiated, and our ability to operate or dispose of land or of a community in our sole discretion may be limited to varying degrees in our existing joint venture agreements and may be limited to varying degrees depending on the terms of future joint venture agreements.

11. Income Taxes
We have maintained and intend to maintain our election as a REIT under the Internal Revenue Code of 1986, as amended. In order for us to continue to qualify as a REIT we must meet a number of organizational and operational requirements, including a requirement to distribute annual dividends to our shareholders equal to a minimum of 90% of our adjusted taxable income. As a REIT, we generally will not be subject to federal income tax on our taxable income at the corporate level to the extent such income is distributed to our shareholders annually. If our taxable income exceeds our dividends in a tax year, REIT tax rules allow us to designate dividends from the subsequent tax year in order to avoid current taxation on undistributed income. If we fail to qualify as a REIT in any taxable year, we will be subject to federal and state income taxes at regular corporate rates, including any applicable alternative minimum tax. In addition, we may not be able to requalify as a REIT for the four subsequent taxable years. Historically, we have incurred only state and local income, franchise, and excise taxes. Taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to applicable federal, state, and local income taxes. Our consolidated operating partnerships are flow-through entities and are not subject to federal income taxes at the entity level.

We have recorded income, franchise, and excise taxes in the condensed consolidated statements of income and comprehensive income for the three months ended March 31, 2016 and 2015 as income tax expense. Income taxes for the three months ended March 31, 2016 primarily related to state income tax and federal taxes on certain of our taxable REIT subsidiaries. We have no significant temporary or permanent differences or tax credits associated with our taxable REIT subsidiaries.

We believe we have no uncertain tax positions or unrecognized tax benefits requiring disclosure as of and for the three months ended March 31, 2016.


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12. Fair Value Measurements

Recurring Fair Value Measurements. The following table presents information about our financial instruments measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 using the inputs and fair value hierarchy discussed in Note 2, "Summary of Significant Accounting Policies and Recent Accounting Pronouncements":
 
Financial Instruments Measured at Fair Value on a Recurring Basis
 
March 31, 2016
 
December 31, 2015
(in millions)
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs (Level 3)
 
Total
 
Quoted Prices in Active Markets for Identical Assets (Level 1)
 
Significant Other Observable Inputs (Level 2)
 
Significant Unobservable Inputs (Level 3)
 
Total
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred compensation plan investments (1)
$
48.5

 
$
—

 
$
—

 
$
48.5

 
$
53.6

 
$
—

 
$
—

 
$
53.6

(1)
Approximately $7.1 million and $8.4 million of participant cash was withdrawn from our deferred compensation plan investments during the three months ended March 31, 2016 and the year ended December 31, 2015, respectively.

Non-Recurring Fair Value Disclosures. There were no events during the three months ended March 31, 2016 or 2015 which required fair value adjustments of our non-financial assets and non-financial liabilities.

Financial Instrument Fair Value Disclosures. The following table presents the carrying and estimated fair values of our notes payable at March 31, 2016 and December 31, 2015, in accordance with the policies discussed in Note 2, "Summary of Significant Accounting Policies and Recent Accounting Pronouncements."
 
March 31, 2016
 
December 31, 2015
(in millions)
Carrying
Value
 
Estimated
Fair Value
 
Carrying
Value
 
Estimated
Fair Value
Fixed rate notes payable
$
2,273.7

 
$
2,407.3

 
$
2,273.3

 
$
2,358.8

Floating rate notes payable (1)
492.1

 
484.0

 
451.4

 
441.3

(1)
Includes balances outstanding under our unsecured credit facility and unsecured short-term borrowings.


13. Non-controlling Interests

The following table summarizes the effect of changes in our ownership interest in subsidiaries on the equity attributable to common shareholders for the periods indicated:
 
 
Three Months Ended
March 31,
(in thousands)
 
2016
 
2015
Net income attributable to common shareholders
 
$
41,730

 
$
115,599

Transfers from non-controlling interests:
 
 
 
 
Increase in equity for conversion of operating partnership units
 
134

 
16

Decrease in additional paid-in capital for purchase of remaining non-controlling ownership interests in two consolidated joint ventures
 
—

 
(9,480
)
Change in common equity and net transfers from non-controlling interests
 
$
41,864

 
$
106,135



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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the condensed consolidated financial statements and notes appearing elsewhere in this report, as well as Part I, Item 1A, "Risk Factors" within our Annual Report on Form 10-K for the year ended December 31, 2015. Historical results and trends which might appear in the condensed consolidated financial statements should not be interpreted as being indicative of future operations.

We consider portions of this report to be "forward-looking" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, both as amended, with respect to our expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions, or other items relating to the future; forward-looking statements are not guarantees of future performance, results, or events. Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, we can give no assurance our expectations will be achieved. Any statements contained herein which are not statements of historical fact should be deemed forward-looking statements. Reliance should not be placed on these forward-looking statements as these statements are subject to known and unknown risks, uncertainties, and other factors beyond our control and could differ materially from our actual results and performance.

Factors which may cause our actual results or performance to differ materially from those contemplated by forward-looking statements include, but are not limited to, the following:

•
Volatility in capital and credit markets, or other unfavorable changes in economic conditions, either nationally or regionally in one or more of the markets in which we operate, could adversely impact us;
•
Short-term leases expose us to the effects of declining market rents;
•
Competition could limit our ability to lease apartments or increase or maintain rental income;
•
We face risks associated with land holdings and related activities;
•
Potential reforms to Fannie Mae and Freddie Mac could adversely affect us;
•
Development, redevelopment and construction risks could impact our profitability;
•
Investments through joint ventures and discretionary funds involve risks not present in investments in which we are the sole investor;
•
Competition could adversely affect our ability to acquire properties;
•
Our acquisition strategy may not produce the cash flows expected;
•
Tax matters, including failure to qualify as a REIT, could have adverse consequences;
•
Litigation risks could affect our business;
•
Losses from catastrophes may exceed our insurance coverage;
•
A cybersecurity incident and other technology disruptions could negatively impact our business;
•
We have significant debt, which could have adverse consequences;
•
Insufficient cash flows could limit our ability to make required payments for debt obligations or pay distributions to shareholders;
•
Issuances of additional debt may adversely impact our financial condition;
•
We may be unable to renew, repay, or refinance our outstanding debt;
•
Variable rate debt is subject to interest rate risk;
•
Failure to maintain our current credit ratings could adversely affect our cost of funds, related margins, liquidity, and access to capital markets;
•
Share ownership limits and our ability to issue additional equity securities may prevent takeovers beneficial to shareholders;
•
Our share price will fluctuate; and
•
The form, timing and amount of dividend distributions in future periods may vary and be impacted by economic and other considerations.

These forward-looking statements represent our estimates and assumptions as of the date of this report, and we assume no obligation to update or supplement forward-looking statements because of subsequent events.

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Executive Summary
We are primarily engaged in the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. As of March 31, 2016, we owned interests in, operated, or were developing 180 multifamily properties comprised of 62,649 apartment homes across the United States, including 4,918 apartment homes located in Las Vegas, Nevada, which were held for sale at March 31, 2016, and subsequently sold to an unaffiliated third party on April 26, 2016, as detailed in the following Property Portfolio table. In addition, we own other land holdings which we may develop into multifamily apartment communities in the future.
Property Operations
Our results for the three months ended March 31, 2016 reflect an increase in same store revenues of 4.9% as compared to the same period in 2015, due to higher average rental rates and occupancy levels, which we believe were due to the continuation of improving economic conditions, including job growth, favorable demographics, a manageable supply of new multifamily housing, and in part to more individuals choosing to rent versus buy as evidenced by the moderating level of homeownership rates across the U.S. We believe U.S. economic and employment growth is likely to continue during the remainder of 2016 and the supply of new multifamily homes, although increasing, will likely remain at manageable levels. If economic conditions were to worsen, our operating results could be adversely affected.
Construction Activity
At March 31, 2016, we had seven projects under construction to be comprised of 2,477 apartment homes, with initial occupancy scheduled to occur within the next 20 months. As of March 31, 2016, we estimate the additional cost to complete the construction of the seven projects to be approximately $245.5 million.
Acquisitions
In February 2016, we acquired approximately 2.0 acres of land in Charlotte, North Carolina for approximately $4.1 million.
Dispositions
In February 2016, we sold approximately 6.3 acres of land adjacent to an operating property in Tampa, Florida for approximately $2.2 million and recognized a gain of approximately $0.4 million.
On April 26, 2016, we sold 15 operating properties, comprised of 4,918 apartment homes, a retail center and approximately 19.6 acres of land, all located in Las Vegas, Nevada to an unaffiliated third party for approximately $630.0 million. These operating properties and land were classified as held for sale at March 31, 2016.

Future Outlook
Subject to market conditions, we intend to continue to seek opportunities to develop, redevelop and acquire existing communities. We also intend to evaluate our operating property and land development portfolio and plan to continue our practice of selective dispositions as market conditions warrant and opportunities arise. We expect to strengthen our capital and liquidity positions by continuing to focus on our core fundamentals which we believe are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs. We anticipate meeting our near-term liquidity requirements through a combination of one or more of the following: cash flows generated from operations, draws on our unsecured credit facility or other short-term borrowings, proceeds from property dispositions, the use of debt and equity offerings under our automatic shelf registration statement, equity issued from our at-the-market ("ATM") share offering program, other unsecured borrowings and secured mortgages.
As of March 31, 2016, we had approximately $6.9 million in cash and cash equivalents, $265.0 million outstanding on our $600 million unsecured credit facility, $20.0 million outstanding on our $40 million unsecured short-term borrowing facility and, as of the date of this filing, we had common shares having an aggregate offering price of up to $315.3 million remaining available for sale under our 2014 ATM program. We believe payments on debt maturing through the remainder of 2016 are manageable at approximately $20.1 million, which represents approximately 0.7% of our total outstanding debt and consists primarily of amounts outstanding under our unsecured short-term borrowing facility. We believe we are well-positioned with a strong balance sheet and sufficient liquidity to cover near-term debt maturities and new development, redevelopment, and other capital funding requirements. We will, however, continue to assess and take further actions we believe are prudent to meet our objectives and capital requirements.

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Property Portfolio
Our multifamily property portfolio is summarized as follows:
 
March 31, 2016
 
December 31, 2015
 
Apartment Homes    
 
Properties    
 
Apartment
 Homes    
 
Properties    
Operating Properties
 
 
 
 
 
 
 
Houston, Texas
8,434

 
24

 
8,434

 
24

Washington, D.C. Metro
6,405

 
19

 
6,405

 
19

Dallas, Texas
5,243

 
13

 
5,243

 
13

Las Vegas, Nevada (1)
4,918

 
15

 
4,918

 
15

Atlanta, Georgia
4,246

 
13

 
4,246

 
13

Tampa, Florida
3,788

 
9

 
3,788

 
9

Orlando, Florida
3,540

 
9

 
3,540

 
9

Austin, Texas
3,360

 
10

 
3,360

 
10

Raleigh, North Carolina
3,054

 
8

 
3,054

 
8

Phoenix, Arizona
2,929

 
10

 
2,549

 
9

Los Angeles/Orange County, California
2,784

 
7

 
2,784

 
7

Southeast Florida
2,781

 
8

 
2,781

 
8

Charlotte, North Carolina
2,753

 
12

 
2,753

 
12

Denver, Colorado
2,365

 
7

 
2,365

 
7

Corpus Christi, Texas
1,907

 
4

 
1,907

 
4

San Diego/Inland Empire, California
1,665

 
5

 
1,665

 
5

Total Operating Properties
60,172

 
173

 
59,792

 
172

Properties Under Construction
 
 
 
 
 
 
 
Washington, D.C. Metro
862

 
2

 
862

 
2

Dallas, Texas
423

 
1

 
423

 
1

Charlotte, North Carolina
323

 
1

 
323

 
1

Houston, Texas
315

 
1

 
315

 
1

Los Angeles/Orange County, California
287

 
1

 
287

 
1

Denver, Colorado
267

 
1

 
267

 
1

Phoenix, Arizona
—

 
—

 
380

 
1

Total Properties Under Construction
2,477

 
7

 
2,857

 
8

Total Properties
62,649

 
180

 
62,649

 
180

Less: Unconsolidated Joint Venture Properties (2)
 
 
 
 
 
 
 
Houston, Texas
2,522

 
8

 
2,522

 
8

Austin, Texas
1,360

 
4

 
1,360

 
4

Dallas, Texas
1,250

 
3

 
1,250

 
3

Tampa, Florida
450

 
1

 
450

 
1

Raleigh, North Carolina
350

 
1

 
350

 
1

Orlando, Florida
300

 
1

 
300

 
1

Washington, D.C. Metro
276

 
1

 
276

 
1

Corpus Christi, Texas
270

 
1

 
270

 
1

Charlotte, North Carolina
266

 
1

 
266

 
1

Atlanta, Georgia
234

 
1

 
234

 
1

Total Unconsolidated Joint Venture Properties
7,278

 
22

 
7,278

 
22

Total Properties Fully Consolidated
55,371

 
158

 
55,371

 
158

 

(1)
These 15 operating properties were included in properties held for sale at March 31, 2016, and sold to an unaffiliated third party on April 26, 2016.
(2)
Refer to Note 6, "Investments in Joint Ventures," in the notes to Condensed Consolidated Financial Statements for further discussion of our joint venture investments.


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Stabilized Communities
We generally consider a property stabilized once it reaches 90% occupancy. During the three months ended March 31, 2016, stabilization was achieved at one consolidated operating property and one unconsolidated operating property as follows:
Property and Location
Number of
Apartment
Homes
 
Date of
Construction
Completion
 
Date of
Stabilization
Consolidated Operating Property
 
 
 
 
 
Camden Flatirons
 
 
 
 
 
Denver, CO
424

 
3Q15
 
1Q16
 
 
 
 
 
 
Unconsolidated Operating Property
 
 
 
 
 
Camden Southline
 
 
 
 
 
Charlotte, NC
226

 
4Q15
 
1Q16
Completed Construction in Lease-Up
At March 31, 2016, we had three consolidated completed operating properties in lease-up as follows:
($ in millions)
Property and Location
Number of
Apartment
Homes
 
Cost
Incurred (1)
 
% Leased at 4/24/2016
 
Date of
Construction
Completion
 
Estimated
Date of
Stabilization
Camden Glendale
 
 
 
 
 
 
 
 
 
Glendale, CA
303

 
$
113.3

 
77
%
 
3Q15
 
2Q16
Camden Paces
 
 
 
 
 
 
 
 
 
Atlanta, GA
379

 
117.4

 
89

 
4Q15
 
2Q16
Camden Chandler
 
 
 
 
 
 
 
 
 
Chandler, AZ
380

 
67.5

 
71

 
1Q16
 
4Q16
Total
1,062

 
$
298.2

 
 
 
 
 
 
(1)
Excludes leasing costs, which are expensed as incurred.
Properties Under Development and Land
Our condensed consolidated balance sheet at March 31, 2016 included approximately $489.7 million related to properties under development and land. Of this amount, approximately $354.2 million related to our projects currently under construction. In addition, we had approximately $135.5 million primarily invested in land held for future development and land holdings, which included approximately $129.8 million related to projects we expect to begin constructing during the next three years, and approximately $5.7 million invested in land which we may develop in the future.

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Communities Under Construction. At March 31, 2016, we had seven consolidated properties in various stages of construction as follows:
($ in millions)
Property and Location
Number of
Apartment
Homes
 
Estimated
Cost
 
Cost
Incurred
 
Included in
Properties
Under
Development
 
Estimated
Date of
Construction
Completion
 
Estimated
Date of
Stabilization
Camden Gallery (1)
 
 
 
 
 
 
 
 
 
 
 
Charlotte, NC
323

 
$
58.0

 
$
54.1

 
$
40.4

 
3Q16
 
1Q17
Camden Victory Park (2)
 
 
 
 
 
 
 
 
 
 
 
Dallas, TX
423

 
82.0

 
75.4

 
51.5

 
3Q16
 
1Q18
The Camden (3)
 
 
 
 
 
 
 
 
 
 
 
Los Angeles, CA
287

 
145.0

 
123.3

 
98.6

 
4Q16
 
2Q17
Camden Lincoln Station
 
 
 
 
 
 
 
 
 
 
 
Denver, CO
267

 
56.0

 
24.2

 
24.2

 
2Q17
 
1Q18
Camden NoMa II
 
 
 
 
 
 
 
 
 
 
 
Washington, DC
405

 
115.0

 
62.0

 
62.0

 
4Q17
 
4Q19
Camden Shady Grove
 
 
 
 
 
 
 
 
 
 
 
Rockville, MD
457

 
116.0

 
58.9

 
58.9

 
1Q18
 
4Q19
Camden McGowen Station
 
 
 
 
 
 
 
 
 
 
 
Houston, TX
315

 
90.0

 
18.6

 
18.6

 
2Q18
 
3Q19
Total
2,477

 
$
662.0

 
$
416.5

 
$
354.2

 
 
 
 
 
(1)
Property in lease-up and was 30% leased at April 24, 2016.
(2)
Property in lease-up and was 20% leased at April 24, 2016.
(3)
Property in lease-up and was 16% leased at April 24, 2016.

Development Pipeline Communities. At March 31, 2016, we had the following consolidated communities undergoing development activities:
($ in millions)
Property and Location
Projected Homes
 
Total Estimated Cost (1)
 
Cost to Date
Camden Washingtonian
 
 
 
 
 
Gaithersburg, MD
365

 
$
90.0

 
$
18.9

Camden North End (2)
 
 
 
 
 
Phoenix, AZ
1,069

 
225.0

 
39.2

Camden Buckhead
 
 
 
 
 
Atlanta, GA
336

 
80.0

 
22.7

Camden Arts District
 
 
 
 
 
Los Angeles, CA
354

 
150.0

 
13.9

Camden Conte (3)
 
 
 
 
 
Houston, TX
519

 
170.0

 
21.5

Camden Atlantic
 
 
 
 
 
Plantation, FL
286

 
62.0

 
13.6

Total
2,929

 
$
777.0

 
$
129.8

(1)
Represents our estimate of total costs we expect to incur on these projects. However, forward-looking statements are not guarantees of future performance, results, or events. Although we believe these expectations are based upon reasonable assumptions, future events rarely develop exactly as forecasted, and estimates routinely require adjustment.
(2)
Will be developed in three phases. The estimated units, estimated cost, and cost to date represent all phases.
(3)
Will be developed in two phases. The estimated units, estimated cost, and cost to date represent both phases.


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Land Holdings/Other. At March 31, 2016, we had the following investments in land:
($ in millions)
Location
Acres (1)
 
Cost to Date (1)
Charlotte, NC
2.0

 
$
5.3

Other (2)
—

 
0.4

Total
2.0


$
5.7

(1)
Excludes approximately 19.6 acres of land located in Las Vegas, Nevada, with a cost of $4.2 million as of March 31, 2016, which was classified as held for sale at March 31, 2016, and sold to an unaffiliated third party on April 26, 2016.
(2)
Includes development opportunities in the early phase of the development process for which we either have an option to acquire land or enter into a leasehold interest, or for which we are the buyer under a contract to purchase land.

Results of Operations
Changes in revenues and expenses related to our operating properties from period to period are due primarily to the performance of stabilized properties in the portfolio, the lease-up of newly constructed properties, acquisitions, and dispositions. Where appropriate, comparisons of income and expense for communities included in continuing operations 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 averages for the three months ended March 31, 2016 and 2015 are as follows:
 
Three Months Ended
March 31,
2016
 
2015
Average monthly property revenue per apartment home
$
1,523

 
$
1,441

Annualized total property expenses per apartment home
$
6,478

 
$
6,306

Weighted average number of operating apartment homes owned 100%
47,634

 
46,640

Weighted average occupancy of operating apartment homes owned 100% *
95.3
%
 
95.6
%
*
Our one student housing community is excluded from this calculation.

Management considers net operating income ("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. We define NOI as total property income less property operating and maintenance expenses less real estate taxes. NOI is not defined by accounting principles generally accepted in the United States of America ("GAAP") and should not be considered an alternative to net income as an indication of our operating performance. NOI also should not be considered an alternative to net cash from operating activities as a measure of liquidity, or an indication of cash available to fund cash needs. Additionally, NOI as disclosed by other REITs may not be comparable to our calculation.


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Table of Contents

Reconciliations of net income to NOI for the three months ended March 31, 2016 and 2015 are as follows:
 
 
Three Months Ended
March 31,
(in thousands)
 
2016
 
2015
Net income
 
$
42,940

 
$
121,065

Less: Fee and asset management income
 
(1,765
)
 
(1,563
)
Less: Interest and other income