e10vk
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2006
OR
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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)
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Texas
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76-6088377 |
(State or other jurisdiction of
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(I.R.S. Employer |
incorporation or organization)
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Identification No.) |
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3 Greenway Plaza, Suite 1300 |
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77046 |
Houston, Texas
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(Zip Code) |
(Address of principle executive offices)
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Registrants telephone number, including area code: (713) 354-2500
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Name of each exchange on which registered |
Common Shares of Beneficial Interest, $.01 par value
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New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. Yes þ No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act. Yes o No þ
Indicate by check mark whether 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 registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes þ No o
Indicated by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
is not contained herein, and will not be contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act (check one):
Large accelerated filer þ Accelerated filer o Non-accelerated filer o
Indicate by check mark whether the registrant is a shell company (as defined in the Rule 12b-2 of
the Exchange Act). Yes o No þ
The aggregate market value of voting and non-voting common equity held by non-affiliates of
the registrant was $4,091,663,801 based on a June 30, 2006 share price of $73.55.
On February 19, 2007, the number of outstanding common shares of the registrants was 56,794,195
(net of 8,554,483 treasury shares).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrants Proxy Statement in connection with its Annual Meeting of Shareholders
to be held May 1, 2007 are incorporated by reference in Part III.
PART I
Item 1. Business
General Development of Business
Formed on May 25, 1993, Camden Property Trust, a Texas real estate investment trust (REIT),
is engaged in the ownership, development, construction and management of multifamily apartment
communities. Our multifamily apartment communities are referred to as communities, multifamily
communities, properties, or multifamily properties in the following discussion.
Our portfolio consists of middle- to upper-market multifamily communities. We target
acquisitions and developments in selected markets in the United States. By combining acquisition,
renovation and development capabilities, we believe we can better respond to changing conditions in
each market, reduce market risk and take advantage of opportunities as they arise.
Our executive offices are located at 3 Greenway Plaza, Suite 1300, Houston, Texas 77046 and
our telephone number is (713) 354-2500. Our website is located at www.camdenliving.com. On our
website, we make available free of charge our current and periodic reports, and amendments to such
reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended, as soon as reasonably practicable after we file such material electronically
with, or furnish it to, the Securities and Exchange Commission (the SEC). We also make
available, free of charge on our website, our Guidelines on Governance, Code of Business Conduct
and Ethics, Code of Ethical Conduct for Senior Financial Officers and the charters of each of our
Audit, Compensation, Nominating and Corporate Governance Committees. This information is also
available in print free of charge to any person who requests it by contacting us at Camden Property
Trust, 3 Greenway Plaza, Suite 1300, Houston, Texas 77046, attention: Investor Relations.
Our annual, quarterly and current reports, proxy statements and other information are
electronically filed with the SEC. You may read and copy any materials we file with the SEC at the
SECs Public Reference Room at 100 F Street, NE., Washington, D.C. 20549. Please contact the SEC
at 1-800-SEC-0330 for further information about the operation of the SECs Public Reference Room.
The SEC also maintains a website at www.sec.gov which contains reports, proxy and information
statements, and other information regarding issuers that file electronically with the SEC.
Financial Information about Segments
We are engaged in the ownership, development, construction and management of multifamily
apartment communities. As each of our apartment communities has similar economic characteristics,
residents, and products and services, our operations have been aggregated into one reportable
segment. See the consolidated financial statements and notes thereto included in Item 15 of this
Annual Report on Form 10-K for certain information required by Item 1.
Narrative Description of Business
As of December 31, 2006, we owned interests in, operated or were developing 197 multifamily
properties comprising 67,631 apartment homes located in 13 states. We had 3,788 apartment homes
under development at 11 of our multifamily properties, including 1,069 apartment homes at three
multifamily properties owned through joint ventures, 26 apartment homes at one operating property,
and several sites we intend to develop into multifamily apartment communities. Additionally, three
properties comprised of 930 apartment homes were designated as held for sale.
Operating Strategy
We believe producing consistent earnings growth through property operations, development and acquisitions,
achieving market balance and recycling capital are crucial factors to our success. We rely heavily
on our sophisticated property management capabilities and innovative operating strategies to
produce consistent earnings growth.
Real Estate Investments and Market Balance. We believe we are well positioned in our current
markets and have the expertise to take advantage of both development and acquisition opportunities
in new markets which have healthy long-term fundamentals and strong growth projections. These
capabilities, combined with what we believe is a conservative financial structure, allow us to
concentrate our growth efforts towards selective development and acquisition opportunities to
achieve our strategy of having a geographically and physically diverse portfolio of assets that
meet the requirements of our residents. We typically make physical improvements at our acquired
properties, such as new or enhanced landscaping design, new or upgraded amenities and redesigned
building structures, which, coupled with a strong focus on property management, branding and
marketing, have resulted in attractive yields on acquired properties.
We continue to operate in our core markets in which we believe we have an advantage due to economies of
scale. We feel where possible, it is best to operate with a strong base of properties in order to
benefit from the personnel allocation and the market strength associated with managing several
properties in the same market. However, in order to generate consistent earnings growth, we intend
to selectively dispose of properties and redeploy capital if we determine a property cannot meet
long term earnings growth expectations.
We have recently expanded our development pipeline significantly, and we expect selective
development of new apartment properties will continue to be important to the growth of our
portfolio for the next several years. We use experienced on-site construction superintendents,
operating under the supervision of project managers and senior management, to control the
construction process. Risks inherent to developing real estate include zoning changes,
environmental matters and changes in economic conditions during the development process. See the
further discussion of risks associated with development and construction in our Risk Factors
section.
Sophisticated Property Management. We believe the depth of our organization enables us to
deliver quality services, promote resident satisfaction and improve resident retention, thereby
reducing operating expenses. We manage our properties utilizing a staff of professionals and
support personnel, including certified property managers, experienced apartment managers and
leasing agents, and trained apartment maintenance technicians. Our on-site personnel are trained to
deliver high quality services to their residents. We attempt to motivate our on-site employees
through incentive compensation arrangements based upon operational results produced at their
property, rental rate increases and the level of lease renewals achieved.
Operations. We believe an intense focus on operations is necessary to realize consistent,
sustained earnings growth. Ensuring resident satisfaction, increasing rents as market conditions
allow, maximizing rent collections, maintaining property occupancy at optimal levels and
controlling operating costs comprise our principal strategies to maximize property net operating
income. During 2005, we completed the roll out of our web-based property management and revenue
management systems. These two systems have improved on-site operations and were a contributing
factor in allowing us to increase rental rates substantially during a period of strong recovery in
the United States economy. Lease terms are generally staggered based on vacancy exposure by
apartment type so lease expirations are matched to each propertys seasonal rental patterns. We
generally offer leases ranging from six to thirteen months, with individual property marketing
plans structured to respond to local market conditions. In addition, we conduct ongoing customer
service surveys to ensure timely response to residents changing needs and a high level of
satisfaction.
2
Competition
There are numerous housing alternatives which compete with our properties in attracting
residents. Our properties compete directly with other multifamily properties as well as
condominiums and single family homes which are available for rent or purchase in the markets in
which our properties are located. This competitive environment could have a material adverse
effect on our ability to lease apartment homes at our present properties or any newly developed or
acquired property, as well as on the rents charged.
Employees
At December 31, 2006, we had approximately 1,920 employees, including executive,
administrative and community personnel.
Qualification as a Real Estate Investment Trust
As of December 31, 2006, we met the qualification of a REIT under Sections 856-860 of the
Internal Revenue Code of 1986, as amended (the Code). As a result, we, with the exception of our
taxable REIT subsidiaries, will not be subject to federal income tax to the extent we meet certain
requirements of the Code.
Item 1A. Risk Factors
In addition to the other information contained in this Form 10-K, the following risk factors
should be considered carefully in evaluating our business. Our business, financial condition, or
results of operations could be materially adversely affected by any of these risks. Please note
additional risks not presently known to us or which we currently consider immaterial may also
impair our business and operations.
Insufficient cash flows could limit our ability to make required payments for debt obligations or
pay distributions to shareholders and create refinancing risk.
Substantially all of our income is derived from rental income from our multifamily
communities. As a result, our performance depends on our ability to collect rent from residents
which could be negatively affected by a number of factors, including the following:
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delay in resident lease commencements; |
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decline in occupancy; |
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failure of residents to make rental payments when due; |
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the attractiveness of our properties to residents and potential residents; |
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our ability to adequately manage and maintain our properties; |
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competition from other available apartments and housing alternatives; and |
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changes in market rents. |
Cash flow could be insufficient to meet required payments of principal and interest with
respect to debt financing. We are required to distribute annual dividends equal to a minimum of
90% of our REIT taxable income, computed without regards to the dividends paid deduction and our
net capital gain, in order for us to continue to qualify as a REIT; this requirement limits the
cash flow available to meet required principal and interest payments on our debt. We may need to
refinance all or a portion of our outstanding debt as it matures. We may not be able to refinance
existing debt or a refinancing may not occur on favorable terms, either of which may have a
material adverse effect on our financial condition and results of operations.
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Unfavorable changes in economic conditions could adversely impact occupancy or rental rates.
Economic conditions may significantly affect apartment home occupancy or rental rates.
Occupancy and rental rates in the markets in which we operate, in turn, may have a material adverse
impact on our cash flows and operating results. The risks that may affect conditions in these
markets include the following:
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changes in the national, regional and local economic climates; |
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local conditions, such as an oversupply of apartments or a reduction in demand for
apartments in the area; |
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a future economic downturn which simultaneously effects more than one of our
geographical markets; and |
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increased operating costs, if these costs cannot be passed through to residents. |
National, regional and local economic climates may be adversely affected should population or
job growth slow. To the extent either of these conditions occurs in the markets in which we
operate, market rents will likely be affected. We could also face challenges adequately managing
and maintaining our properties should we experience increased operating costs. As a result, we may
experience a loss of rental revenues, which may adversely affect our results of operations and our
ability to satisfy our financial obligations and to pay distributions to shareholders.
Various changes could adversely impact the market price of our common shares.
The market price of our publicly traded common shares depends on various conditions. The
risks that may affect this market price include the following:
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investor interest in our property portfolio; |
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the reputation and performance of REITs; |
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the attractiveness of REITs as compared to other investment vehicles; |
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the results of our financial condition and operations; |
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the perception of our growth and earnings potential; |
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dividend payment rates; and |
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increases in market rates, which may lead purchasers of our common shares to
demand a higher yield. |
Development and construction risks could impact our profitability.
We intend to continue to develop and construct multifamily apartment communities for our
property portfolio. Our development and construction activities may be exposed to a number of risks
that may increase our construction costs including the following:
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inability to obtain, or delays in obtaining, necessary zoning, land-use,
building, occupancy and other required permits and authorizations, or problems with
subcontractors could result in increased costs; |
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incurring construction costs for a property exceeding our original estimates due
to increased materials, labor or other costs, or due to errors and omissions that
occur in the design or construction process; |
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experiencing fluctuations in occupancy rates and rents at a newly completed
property, which may not be adequate to make the property profitable; |
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inability to obtain financing with favorable terms for the development of a
community; |
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inability to complete construction and lease-up of a community on schedule,
resulting in increased costs; |
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incurring costs related to the abandonment of development opportunities which we
have pursued and deemed unfeasible; and |
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our inability to successfully implement our development and construction
strategy could adversely affect our results of operations and our ability to
satisfy our financial obligations and pay distributions to shareholders. |
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We also develop and construct properties for unrelated third parties pursuant to guaranteed
maximum price contracts. The terms of these contracts require us to estimate the time and costs to
complete a project and we assume the risk the time and costs associated with our performance may be
greater than was anticipated. As a result, our profitability on guaranteed maximum price contracts
is dependent on our ability to predict these factors accurately. The time and costs may be
affected by a variety of factors, including those listed above, many of which are beyond our
control. In addition, the terms of these contracts generally require a warranty period, which may
have a duration of up to ten years, during which we may be required to repair, replace or rebuild a
project in the event of a material defect.
Our property acquisition strategy may not produce the cash flows expected.
In the normal course of our business, we continually evaluate a number of potential
acquisitions and may acquire additional operating properties. The success of our acquisition
activities is subject to a number of risks, including the following:
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we may not be able to successfully integrate acquired properties into our
existing operations; |
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our estimates of the costs of repositioning or redeveloping the acquired
property may prove inaccurate; and |
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the expected occupancy and rental rates may differ from the actual results. |
Our inability to successfully implement our property acquisition strategy could adversely
affect our results of operations and our ability to satisfy our financial obligations and pay
distributions to shareholders. We expect other real estate investors, including insurance
companies, pension and investment funds, private investors and other apartment REITs will compete
with us to acquire existing properties and to develop new properties. This competition could
increase prices for the type of properties we would likely pursue and adversely affect our ability
to acquire these properties or the profitability of such properties upon acquisition.
Difficulties of selling real estate could limit our flexibility.
Real estate investments generally cannot be disposed of quickly, especially when market
conditions are poor. This may limit our ability to vary our portfolio promptly in response to
changes in economic or other conditions. In addition, in order to maintain our status as a REIT,
the Code imposes restrictions on our ability to sell properties held fewer than four years, which
may cause us to incur losses thereby reducing our cash flows and adversely impacting distributions
to shareholders.
We have significant debt, which could have important consequences.
As of December 31, 2006, we had outstanding debt of approximately $2.3 billion. This
indebtedness could have important consequences, including:
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if a property is mortgaged to secure payment of indebtedness, and if we are
unable to meet our mortgage obligations, we could sustain a loss as a result of
foreclosure on the mortgage; |
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our vulnerability to general adverse economic and industry conditions is increased; and |
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our flexibility in planning for, or reacting to, changes in business and industry is limited. |
Variable rate debt is subject to interest rate risk.
We have mortgage debt with varying interest rates dependent upon the market index. In
addition, we have a revolving credit facility bearing interest at a variable rate on all amounts
drawn on the facility. We may incur additional variable rate debt in the future. Increases in
interest rates on variable rate debt would increase our interest expense, which would adversely
affect net income and cash available for payment of our debt obligations and distributions to
shareholders.
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Issuances of additional debt or equity may adversely impact our financial condition.
Our capital requirements depend on numerous factors, including the occupancy rates of our
apartment properties, dividend payment rates to our shareholders, development and capital
expenditures, costs of operations and potential acquisitions. If our capital requirements vary
materially from our plans, we may require additional financing sooner than anticipated.
Accordingly, we could become more leveraged, resulting in increased risk of default on our
obligations and an increase in our debt service requirements, both of which could adversely affect
our financial condition and ability to access debt and equity capital markets in the future.
Losses from catastrophes may exceed our insurance coverage.
We carry comprehensive property and liability insurance on our properties, which we believe is
of the type and amount customarily obtained on similar real property assets. We intend to obtain
similar coverage for properties we acquire in the future. However, some losses, generally of a
catastrophic nature, such as losses from floods, hurricanes or earthquakes, may be subject to
coverage limitations. We exercise our discretion in determining amounts, coverage limits and
deductibility provisions of insurance, to maintain appropriate insurance on our investments at a
reasonable cost and on suitable terms. If we suffer a substantial loss, our insurance coverage may
not be sufficient to pay the full current market value or current replacement value of our lost
investment, as well as the anticipated future revenues from the property. Inflation, changes in
building codes and ordinances, environmental considerations and other factors also may reduce the
feasibility of using insurance proceeds to replace a property after it has been damaged or
destroyed.
Potential liability for environmental contamination could result in substantial costs.
Under various federal, state and local laws, ordinances and regulations, we are liable for
costs to investigate and remove or remediate hazardous or toxic substances on or in our properties,
in some cases, regardless of whether we knew of or were responsible for the presence of these
substances. These costs, and other costs of investigation, remediation or removal of hazardous
substances, may be substantial. Also, the presence of hazardous or toxic substances on a property,
or the failure to properly remediate such substances, may adversely affect our ability to sell or
rent the property or use the property as collateral.
Additionally, we occasionally develop, manage, lease and/or operate various properties for
third parties. Consequently, we may be considered to have been or to be an operator of these
properties and, therefore, potentially liable for removal or remediation costs or other potential
costs that could relate to hazardous or toxic substances.
Over the past several years, there have been an increasing number of lawsuits against owners
and managers of multifamily properties alleging personal injury and property damage caused by the
presence of mold in residential real estate. Some of these lawsuits have resulted in substantial
monetary judgments or settlements. Insurance carriers have reacted to these liability awards by
excluding mold related claims from standard policies and pricing mold endorsements at high rates.
Therefore, should we be named in a lawsuit regarding mold infiltration, the amount of damages may
not be fully covered under insurance.
Tax matters, including failure to qualify as a REIT, could have adverse consequences.
We may not continue to qualify in the future as a REIT. The Internal Revenue Service may
challenge our qualification as a REIT for prior years and new legislation, regulations,
administrative interpretations or court decisions may change the tax laws or the application of the
tax laws with respect to qualification as a REIT or the federal tax consequences of such
qualification.
For any taxable year we fail to qualify as a REIT:
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we would be subject to federal income tax on our taxable income at corporate
rates, subject to any applicable alternative minimum tax; |
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we would be disqualified from treatment as a REIT for the four taxable years
following the year in which we failed to qualify, thereby reducing our net earning
available for operations, including any distributions to shareholders, as we would
be required to pay significant income taxes for the year or years involved; and |
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our ability to expand our business and raise capital would be impaired, which
may adversely affect the value of our common shares. |
We may face other tax liabilities in the future which may impact our cash flow. These
potential tax liabilities may be calculated on our income or property at either the corporate or
individual property levels. Any additional tax expense incurred would decrease the cash available
for distribution to our shareholders.
Investments through joint ventures and partnerships involve risks not present in investments in
which we are the sole investor.
Instead of acquiring or developing apartment communities directly, we may invest in a joint
venture or partnership as a partner. These investments involve risks, including the possibility
our partner may become insolvent, our partner may have business goals which are inconsistent with
ours, or our partner may be in a position to take action or withhold consent contrary to our
requests. We and our partner may each have the right to trigger a buy-sell arrangement, which
could cause us to sell our interest, or acquire our partners interest, at a time when we otherwise
would not have initiated such a transaction.
Compliance or failure to comply with laws requiring access to our properties by disabled persons
could result in substantial cost.
The Americans with Disabilities Act, or ADA, the Fair Housing Amendments Act of 1988, or FHAA,
and other federal, state and local laws generally require public accommodations be made accessible
to disabled persons. Noncompliance could result in the imposition of fines by the government or
the award of damages to private litigants. These laws may require us to modify our existing
properties. These laws may also restrict renovations by requiring improved access to such
buildings by disabled persons or may require us to add other structural features that increase our
construction costs. Legislation or regulations adopted in the future may impose further burdens or
restrictions on us with respect to improved access by disabled persons. Although we believe our
properties are substantially in compliance with present requirements, we may incur unanticipated
expenses to comply with ADA, FHAA and other federal, state and local laws.
Share ownership limits and our ability to issue additional equity securities may prevent takeovers
beneficial to shareholders.
For us to maintain our qualification as a REIT, we must have 100 or more shareholders during
the year and not more than 50% in value of our outstanding shares may be owned, directly or
indirectly, by five or fewer individuals. As defined for federal income tax purposes, the term
individuals includes a number of specified entities. To minimize the possibility we will fail to
qualify as a REIT under this test, our declaration of trust includes restrictions on transfers of
our shares and ownership limits. The ownership limits, as well as our ability to issue other
classes of equity securities, may delay, defer or prevent a change in control. These provisions
may also deter tender offers for our common shares that may be attractive to you, or limit your
opportunity to receive a premium for your shares that might otherwise exist if a third party were
attempting to effect a change in control transaction.
Competition could limit our ability to lease apartments or increase or maintain rental income.
Our apartment communities compete with numerous housing alternatives in attracting residents,
including other rental apartments, condominiums and single-family homes available for rent or sale.
Competitive residential housing in a particular area could adversely affect our ability to lease
apartments and increase or maintain rents.
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We depend on our key personnel.
Our success depends in part on our ability to attract and retain the services of executive
officers and other personnel. There is substantial competition for qualified personnel in the real
estate industry and the loss of several of our key personnel could have an adverse effect on us.
Changes in laws and litigation risks could affect our business.
As a large publicly-traded owner of multifamily properties, we may become involved in legal
proceedings, including consumer, employment, tort or commercial litigation, which if decided
adversely to or settled by us, could result in liability that is material to our financial
condition or results of operations.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
The Properties
Our properties typically consist of mid-rise buildings or two- and three-story buildings in a
landscaped setting and provide residents with a variety of amenities. Most of the properties have
one or more swimming pools and a clubhouse and many have whirlpool spas, tennis courts and
controlled-access gates. Many of the apartment homes offer additional features such as fireplaces,
vaulted ceilings, microwave ovens, covered parking, icemakers, washers and dryers and ceiling fans.
Operating Properties
The 186 operating properties, including properties held through joint ventures, which we owned
interests in and operated at December 31, 2006, averaged 905 square feet of living area per
apartment home. For the year ended December 31, 2006, no single operating property accounted for
greater than 2.1% of our total revenues. Our operating properties, including properties held
through joint ventures, had a weighted average occupancy rate of 95.2% and 95.3% for 2006 and 2005,
respectively. Resident lease terms generally range from six to thirteen months. One hundred and
fifty-nine of our operating properties have over 200 apartment homes, with the largest having 894
apartment homes. Our operating properties have an average age of 9.5 years (calculated on the
basis of investment dollars). Our operating properties were constructed and placed in service as
follows:
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Year Placed in Service |
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Number of Operating Properties |
2001 -2006
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33 |
1996 -2000
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57 |
1991 -1995
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20 |
1986 -1990
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41 |
1980 -1985
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27 |
Prior to 1980
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Property Table
The following table sets forth information with respect to our operating properties at
December 31, 2006.
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OPERATING PROPERTIES
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Number of |
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Year Placed |
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Average Apartment |
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2006 Average |
Property and Location |
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Apartments |
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In Service |
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Size (Sq. Ft.) |
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Occupancy (1) |
ARIZONA |
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Phoenix |
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Camden Copper Square |
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332 |
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2000 |
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786 |
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95.7 |
% |
Camden Fountain Palms (2) |
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192 |
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1986/1996 |
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1,050 |
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95.1 |
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Camden Legacy |
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428 |
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1996 |
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1,067 |
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96.5 |
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Camden Pecos Ranch (2) |
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272 |
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2001 |
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924 |
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96.6 |
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Camden San Paloma |
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324 |
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1993/1994 |
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1,042 |
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95.9 |
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Camden Sierra (2) |
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288 |
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1997 |
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925 |
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95.0 |
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Camden Towne Center (2) |
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240 |
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1998 |
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871 |
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95.8 |
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Camden Vista Valley |
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357 |
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1986 |
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923 |
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94.9 |
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CALIFORNIA |
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|
|
|
Los Angeles/Orange County |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Crown Valley |
|
|
380 |
|
|
|
2001 |
|
|
|
1,009 |
|
|
|
95.7 |
|
Camden Harbor View |
|
|
538 |
|
|
|
2004 |
|
|
|
976 |
|
|
|
94.5 |
|
Camden Martinique |
|
|
714 |
|
|
|
1986 |
|
|
|
795 |
|
|
|
93.9 |
|
Camden Parkside (2) |
|
|
421 |
|
|
|
1972 |
|
|
|
836 |
|
|
|
95.3 |
|
Camden Sea Palms |
|
|
138 |
|
|
|
1990 |
|
|
|
891 |
|
|
|
96.0 |
|
San Diego/Inland Empire |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Sierra at Otay Ranch |
|
|
422 |
|
|
|
2003 |
|
|
|
962 |
|
|
|
94.2 |
|
Camden Tuscany |
|
|
160 |
|
|
|
2003 |
|
|
|
891 |
|
|
|
97.4 |
|
Camden Vineyards |
|
|
264 |
|
|
|
2002 |
|
|
|
1,053 |
|
|
|
93.2 |
|
COLORADO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denver |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Arbors |
|
|
358 |
|
|
|
1986 |
|
|
|
792 |
|
|
|
93.6 |
|
Camden Caley |
|
|
218 |
|
|
|
2000 |
|
|
|
925 |
|
|
|
96.6 |
|
Camden Centennial |
|
|
276 |
|
|
|
1985 |
|
|
|
744 |
|
|
|
94.6 |
|
Camden Denver West (3) |
|
|
320 |
|
|
|
1997 |
|
|
|
1,015 |
|
|
|
95.3 |
|
Camden Highlands Ridge |
|
|
342 |
|
|
|
1996 |
|
|
|
1,149 |
|
|
|
94.7 |
|
Camden Interlocken |
|
|
340 |
|
|
|
1999 |
|
|
|
1,022 |
|
|
|
94.5 |
|
Camden Lakeway |
|
|
451 |
|
|
|
1997 |
|
|
|
932 |
|
|
|
93.6 |
|
Camden Pinnacle |
|
|
224 |
|
|
|
1985 |
|
|
|
748 |
|
|
|
91.8 |
|
WASHINGTON DC METRO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Ashburn Farms |
|
|
162 |
|
|
|
2000 |
|
|
|
1,061 |
|
|
|
97.6 |
|
Camden Fair Lakes |
|
|
530 |
|
|
|
1999 |
|
|
|
996 |
|
|
|
95.5 |
|
Camden Fairfax Corner (4) |
|
|
488 |
|
|
|
2006 |
|
|
|
934 |
|
|
Lease-up |
Camden Fallsgrove |
|
|
268 |
|
|
|
2004 |
|
|
|
996 |
|
|
|
96.6 |
|
Camden Grand Parc |
|
|
105 |
|
|
|
2002 |
|
|
|
904 |
|
|
|
97.4 |
|
Camden Lansdowne |
|
|
690 |
|
|
|
2002 |
|
|
|
1,006 |
|
|
|
95.7 |
|
Camden Largo Town Center |
|
|
219 |
|
|
|
2000 |
|
|
|
1,042 |
|
|
|
97.1 |
|
Camden Roosevelt |
|
|
198 |
|
|
|
2003 |
|
|
|
856 |
|
|
|
97.8 |
|
Camden Russett |
|
|
426 |
|
|
|
2000 |
|
|
|
1,025 |
|
|
|
94.5 |
|
Camden Silo Creek |
|
|
284 |
|
|
|
2004 |
|
|
|
971 |
|
|
|
95.6 |
|
Camden Westwind (4) |
|
|
464 |
|
|
|
2006 |
|
|
|
1,036 |
|
|
Lease-up |
FLORIDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southeast Florida |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Aventura |
|
|
379 |
|
|
|
1995 |
|
|
|
1,106 |
|
|
|
95.6 |
|
Camden Doral |
|
|
260 |
|
|
|
1999 |
|
|
|
1,172 |
|
|
|
97.3 |
|
Camden Doral Villas |
|
|
232 |
|
|
|
2000 |
|
|
|
1,253 |
|
|
|
96.8 |
|
Camden Las Olas |
|
|
420 |
|
|
|
2004 |
|
|
|
1,043 |
|
|
|
96.2 |
|
Camden Plantation |
|
|
502 |
|
|
|
1997 |
|
|
|
1,152 |
|
|
|
95.3 |
|
Camden Portofino |
|
|
322 |
|
|
|
1995 |
|
|
|
1,307 |
|
|
|
96.0 |
|
Summit Brickell |
|
|
405 |
|
|
|
2003 |
|
|
|
937 |
|
|
|
97.3 |
|
9
OPERATING PROPERTIES (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
Year Placed |
|
Average Apartment |
|
2006 Average |
Property and Location |
|
Apartments |
|
In Service |
|
Size (Sq. Ft.) |
|
Occupancy (1) |
Orlando |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Club |
|
|
436 |
|
|
|
1986 |
|
|
|
1,077 |
|
|
|
96.1 |
% |
Camden Hunters Creek |
|
|
270 |
|
|
|
2000 |
|
|
|
1,082 |
|
|
|
95.0 |
|
Camden Lago Vista |
|
|
366 |
|
|
|
2005 |
|
|
|
954 |
|
|
|
96.6 |
|
Camden Landings |
|
|
220 |
|
|
|
1983 |
|
|
|
748 |
|
|
|
96.8 |
|
Camden Lee Vista |
|
|
492 |
|
|
|
2000 |
|
|
|
937 |
|
|
|
94.5 |
|
Camden Renaissance |
|
|
578 |
|
|
|
1996/1998 |
|
|
|
899 |
|
|
|
93.5 |
|
Camden Reserve |
|
|
526 |
|
|
|
1990/1991 |
|
|
|
824 |
|
|
|
95.5 |
|
Camden World Gateway |
|
|
408 |
|
|
|
2000 |
|
|
|
979 |
|
|
|
97.1 |
|
Tampa/St. Petersburg |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Bay |
|
|
760 |
|
|
|
1997/2001 |
|
|
|
943 |
|
|
|
94.3 |
|
Camden Bay Pointe |
|
|
368 |
|
|
|
1984 |
|
|
|
771 |
|
|
|
96.5 |
|
Camden Bayside |
|
|
832 |
|
|
|
1987/1989 |
|
|
|
748 |
|
|
|
95.7 |
|
Camden Citrus Park |
|
|
247 |
|
|
|
1985 |
|
|
|
704 |
|
|
|
97.3 |
|
Camden Isles |
|
|
484 |
|
|
|
1983/1985 |
|
|
|
722 |
|
|
|
94.8 |
|
Camden Lakes |
|
|
688 |
|
|
|
1982/1983 |
|
|
|
728 |
|
|
|
95.0 |
|
Camden Lakeside |
|
|
228 |
|
|
|
1986 |
|
|
|
728 |
|
|
|
96.1 |
|
Camden Live Oaks |
|
|
770 |
|
|
|
1990 |
|
|
|
1,093 |
|
|
|
94.4 |
|
Camden Preserve |
|
|
276 |
|
|
|
1996 |
|
|
|
942 |
|
|
|
95.0 |
|
Camden Providence Lakes |
|
|
260 |
|
|
|
1996 |
|
|
|
1,024 |
|
|
|
93.7 |
|
Camden Westshore |
|
|
278 |
|
|
|
1986 |
|
|
|
728 |
|
|
|
95.7 |
|
Camden Woods |
|
|
444 |
|
|
|
1986 |
|
|
|
1,223 |
|
|
|
94.0 |
|
GEORGIA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Atlanta |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Brookwood |
|
|
359 |
|
|
|
2002 |
|
|
|
906 |
|
|
|
92.1 |
|
Camden Dunwoody |
|
|
324 |
|
|
|
1997 |
|
|
|
1,007 |
|
|
|
94.2 |
|
Camden Deerfield |
|
|
292 |
|
|
|
2000 |
|
|
|
1,187 |
|
|
|
94.4 |
|
Camden Midtown Atlanta |
|
|
296 |
|
|
|
2001 |
|
|
|
953 |
|
|
|
95.6 |
|
Camden River |
|
|
352 |
|
|
|
1997 |
|
|
|
1,103 |
|
|
|
95.6 |
|
Camden Peachtree City |
|
|
399 |
|
|
|
2001 |
|
|
|
1,026 |
|
|
|
95.2 |
|
Camden Shiloh |
|
|
232 |
|
|
|
1999/2002 |
|
|
|
1,151 |
|
|
|
96.1 |
|
Camden St. Clair |
|
|
336 |
|
|
|
1997 |
|
|
|
969 |
|
|
|
94.9 |
|
Camden Stockbridge |
|
|
304 |
|
|
|
2003 |
|
|
|
1,009 |
|
|
|
94.1 |
|
Camden Sweetwater |
|
|
308 |
|
|
|
2000 |
|
|
|
1,151 |
|
|
|
95.2 |
|
KENTUCKY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Louisville |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Brookside (5) |
|
|
224 |
|
|
|
1987 |
|
|
|
732 |
|
|
|
96.9 |
|
Camden Downs |
|
|
254 |
|
|
|
1975 |
|
|
|
682 |
|
|
|
95.3 |
|
Camden Meadows (5) |
|
|
400 |
|
|
|
1987/1990 |
|
|
|
746 |
|
|
|
94.9 |
|
Camden Oxmoor (5) |
|
|
432 |
|
|
|
2000 |
|
|
|
903 |
|
|
|
96.2 |
|
Camden Prospect Park (5) |
|
|
138 |
|
|
|
1990 |
|
|
|
916 |
|
|
|
95.6 |
|
MISSOURI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kansas City |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Passage (5) |
|
|
596 |
|
|
|
1989/1997 |
|
|
|
832 |
|
|
|
93.4 |
|
St. Louis |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Cedar Lakes (5) |
|
|
420 |
|
|
|
1986 |
|
|
|
852 |
|
|
|
94.6 |
|
Camden Cove West (5) |
|
|
276 |
|
|
|
1990 |
|
|
|
828 |
|
|
|
93.5 |
|
Camden Cross Creek (5) |
|
|
591 |
|
|
|
1973/1980 |
|
|
|
947 |
|
|
|
95.6 |
|
Camden Taravue |
|
|
304 |
|
|
|
1975 |
|
|
|
676 |
|
|
|
90.6 |
|
Camden Trace |
|
|
372 |
|
|
|
1972 |
|
|
|
1,158 |
|
|
|
95.5 |
|
Camden Westchase (5) |
|
|
160 |
|
|
|
1986 |
|
|
|
945 |
|
|
|
95.6 |
|
10
OPERATING PROPERTIES (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
Year Placed |
|
Average Apartment |
|
2006 Average |
Property and Location |
|
Apartments |
|
In Service |
|
Size (Sq. Ft.) |
|
Occupancy (1) |
NEVADA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Las Vegas |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Bel Air |
|
|
528 |
|
|
|
1988/1995 |
|
|
|
943 |
|
|
|
96.2 |
% |
Camden Breeze |
|
|
320 |
|
|
|
1989 |
|
|
|
846 |
|
|
|
96.8 |
|
Camden Canyon |
|
|
200 |
|
|
|
1995 |
|
|
|
987 |
|
|
|
97.6 |
|
Camden Commons |
|
|
376 |
|
|
|
1988 |
|
|
|
936 |
|
|
|
95.9 |
|
Camden Cove |
|
|
124 |
|
|
|
1990 |
|
|
|
898 |
|
|
|
96.8 |
|
Camden Del Mar |
|
|
560 |
|
|
|
1995 |
|
|
|
986 |
|
|
|
95.8 |
|
Camden Fairways |
|
|
320 |
|
|
|
1989 |
|
|
|
896 |
|
|
|
96.7 |
|
Camden Hills |
|
|
184 |
|
|
|
1991 |
|
|
|
579 |
|
|
|
95.8 |
|
Camden Legends |
|
|
113 |
|
|
|
1994 |
|
|
|
792 |
|
|
|
96.6 |
|
Camden Palisades |
|
|
624 |
|
|
|
1991 |
|
|
|
905 |
|
|
|
96.8 |
|
Camden Pines (2) |
|
|
315 |
|
|
|
1997 |
|
|
|
1,005 |
|
|
|
96.9 |
|
Camden Pointe |
|
|
252 |
|
|
|
1996 |
|
|
|
985 |
|
|
|
96.8 |
|
Camden Summit (2) |
|
|
234 |
|
|
|
1995 |
|
|
|
1,187 |
|
|
|
97.2 |
|
Camden Tiara (2) |
|
|
400 |
|
|
|
1996 |
|
|
|
1,043 |
|
|
|
96.6 |
|
Camden Vintage |
|
|
368 |
|
|
|
1994 |
|
|
|
978 |
|
|
|
94.2 |
|
Oasis Bay (6) |
|
|
128 |
|
|
|
1990 |
|
|
|
876 |
|
|
|
94.0 |
|
Oasis Crossings (6) |
|
|
72 |
|
|
|
1996 |
|
|
|
983 |
|
|
|
97.1 |
|
Oasis Emerald (6) |
|
|
132 |
|
|
|
1988 |
|
|
|
873 |
|
|
|
96.7 |
|
Oasis Gateway (6) |
|
|
360 |
|
|
|
1997 |
|
|
|
1,146 |
|
|
|
94.4 |
|
Oasis Island (6) |
|
|
118 |
|
|
|
1990 |
|
|
|
901 |
|
|
|
93.5 |
|
Oasis Landing (6) |
|
|
144 |
|
|
|
1990 |
|
|
|
938 |
|
|
|
95.8 |
|
Oasis Meadows (6) |
|
|
383 |
|
|
|
1996 |
|
|
|
1,031 |
|
|
|
96.3 |
|
Oasis Palms (6) |
|
|
208 |
|
|
|
1989 |
|
|
|
880 |
|
|
|
94.7 |
|
Oasis Pearl (6) |
|
|
90 |
|
|
|
1989 |
|
|
|
930 |
|
|
|
96.4 |
|
Oasis Place (6) |
|
|
240 |
|
|
|
1992 |
|
|
|
440 |
|
|
|
95.6 |
|
Oasis Ridge (6) |
|
|
477 |
|
|
|
1984 |
|
|
|
391 |
|
|
|
93.9 |
|
Oasis Sands |
|
|
48 |
|
|
|
1994 |
|
|
|
1,125 |
|
|
|
95.2 |
|
Oasis Sierra (6) |
|
|
208 |
|
|
|
1998 |
|
|
|
922 |
|
|
|
95.5 |
|
Oasis Springs (6) |
|
|
304 |
|
|
|
1988 |
|
|
|
838 |
|
|
|
95.1 |
|
Oasis Vinings (6) |
|
|
234 |
|
|
|
1994 |
|
|
|
1,152 |
|
|
|
94.5 |
|
NORTH CAROLINA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charlotte |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Ballantyne |
|
|
400 |
|
|
|
1998 |
|
|
|
1,053 |
|
|
|
95.8 |
|
Camden Cotton Mills |
|
|
180 |
|
|
|
2002 |
|
|
|
906 |
|
|
|
96.7 |
|
Camden Dilworth (7) |
|
|
145 |
|
|
|
2006 |
|
|
|
857 |
|
|
|
97.4 |
|
Camden Eastchase |
|
|
220 |
|
|
|
1986 |
|
|
|
698 |
|
|
|
92.1 |
|
Camden Fairview |
|
|
135 |
|
|
|
1983 |
|
|
|
1,036 |
|
|
|
96.9 |
|
Camden Forest |
|
|
208 |
|
|
|
1989 |
|
|
|
703 |
|
|
|
93.7 |
|
Camden Foxcroft |
|
|
156 |
|
|
|
1979 |
|
|
|
940 |
|
|
|
96.3 |
|
Camden Grandview |
|
|
266 |
|
|
|
2000 |
|
|
|
1,145 |
|
|
|
94.6 |
|
Camden Habersham |
|
|
240 |
|
|
|
1986 |
|
|
|
773 |
|
|
|
96.9 |
|
Camden Park Commons |
|
|
232 |
|
|
|
1997 |
|
|
|
859 |
|
|
|
95.7 |
|
Camden Pinehurst |
|
|
407 |
|
|
|
1967 |
|
|
|
1,147 |
|
|
|
95.5 |
|
Camden Sedgebrook |
|
|
368 |
|
|
|
1999 |
|
|
|
1,017 |
|
|
|
96.6 |
|
Camden Simsbury |
|
|
100 |
|
|
|
1985 |
|
|
|
874 |
|
|
|
96.4 |
|
Camden South End |
|
|
299 |
|
|
|
2003 |
|
|
|
883 |
|
|
|
94.3 |
|
Camden Stonecrest |
|
|
306 |
|
|
|
2001 |
|
|
|
1,169 |
|
|
|
96.2 |
|
Camden Timber Creek |
|
|
352 |
|
|
|
1984 |
|
|
|
706 |
|
|
|
93.5 |
|
Camden Touchstone |
|
|
132 |
|
|
|
1986 |
|
|
|
899 |
|
|
|
96.2 |
|
11
OPERATING PROPERTIES (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
Year Placed |
|
Average Apartment |
|
2006 Average |
Property and Location |
|
Apartments |
|
In Service |
|
Size (Sq. Ft.) |
|
Occupancy (1) |
Greensboro |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Glen |
|
|
304 |
|
|
|
1980 |
|
|
|
662 |
|
|
|
93.5 |
% |
Camden Wendover |
|
|
216 |
|
|
|
1985 |
|
|
|
795 |
|
|
|
94.8 |
|
Raleigh |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Crest |
|
|
438 |
|
|
|
2001 |
|
|
|
1,129 |
|
|
|
95.3 |
|
Camden Governors Village |
|
|
242 |
|
|
|
1999 |
|
|
|
1,134 |
|
|
|
94.4 |
|
Camden Lake Pine |
|
|
446 |
|
|
|
1999 |
|
|
|
1,075 |
|
|
|
95.5 |
|
Camden Manor Park (4) |
|
|
484 |
|
|
|
2006 |
|
|
|
966 |
|
|
Lease-up |
Camden Overlook |
|
|
320 |
|
|
|
2001 |
|
|
|
1,056 |
|
|
|
95.0 |
|
Camden Reunion Park |
|
|
420 |
|
|
|
2000/2004 |
|
|
|
972 |
|
|
|
93.8 |
|
Camden Westwood |
|
|
354 |
|
|
|
1999 |
|
|
|
1,112 |
|
|
|
95.5 |
|
PENNSYLVANIA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Valleybrook |
|
|
352 |
|
|
|
2002 |
|
|
|
992 |
|
|
|
93.6 |
|
TEXAS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Austin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Briar Oaks |
|
|
430 |
|
|
|
1980 |
|
|
|
711 |
|
|
|
94.7 |
|
Camden Gaines Ranch |
|
|
390 |
|
|
|
1997 |
|
|
|
955 |
|
|
|
93.3 |
|
Camden Huntingdon |
|
|
398 |
|
|
|
1995 |
|
|
|
903 |
|
|
|
95.6 |
|
Camden Laurel Ridge |
|
|
183 |
|
|
|
1986 |
|
|
|
702 |
|
|
|
96.6 |
|
Camden Ridge View |
|
|
167 |
|
|
|
1984 |
|
|
|
859 |
|
|
|
95.8 |
|
Camden Ridgecrest |
|
|
284 |
|
|
|
1995 |
|
|
|
851 |
|
|
|
95.3 |
|
Camden Stoneleigh (8) |
|
|
390 |
|
|
|
2001 |
|
|
|
908 |
|
|
|
95.8 |
|
Camden Woodview |
|
|
283 |
|
|
|
1984 |
|
|
|
644 |
|
|
|
95.2 |
|
Corpus Christi |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Breakers |
|
|
288 |
|
|
|
1996 |
|
|
|
868 |
|
|
|
92.8 |
|
Camden Copper Ridge |
|
|
344 |
|
|
|
1986 |
|
|
|
775 |
|
|
|
94.9 |
|
Camden Miramar (9) |
|
|
778 |
|
|
|
1994/2004 |
|
|
|
468 |
|
|
|
85.0 |
|
Dallas/Fort Worth |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Addison (2) |
|
|
456 |
|
|
|
1996 |
|
|
|
942 |
|
|
|
95.6 |
|
Camden Buckingham |
|
|
464 |
|
|
|
1997 |
|
|
|
919 |
|
|
|
96.5 |
|
Camden Centreport |
|
|
268 |
|
|
|
1997 |
|
|
|
910 |
|
|
|
94.7 |
|
Camden Cimarron |
|
|
286 |
|
|
|
1992 |
|
|
|
772 |
|
|
|
95.9 |
|
Camden Farmers Market |
|
|
620 |
|
|
|
2001 |
|
|
|
916 |
|
|
|
95.5 |
|
Camden Farmers Market II (7) |
|
|
284 |
|
|
|
2005 |
|
|
|
970 |
|
|
|
93.2 |
|
Camden Gardens |
|
|
256 |
|
|
|
1983 |
|
|
|
652 |
|
|
|
95.0 |
|
Camden Glen Lakes |
|
|
424 |
|
|
|
1979 |
|
|
|
877 |
|
|
|
94.5 |
|
Camden Lakeview |
|
|
476 |
|
|
|
1985 |
|
|
|
853 |
|
|
|
94.0 |
|
Camden Legacy Creek |
|
|
240 |
|
|
|
1995 |
|
|
|
831 |
|
|
|
97.3 |
|
Camden Legacy Park |
|
|
276 |
|
|
|
1996 |
|
|
|
871 |
|
|
|
98.0 |
|
Camden Oasis |
|
|
602 |
|
|
|
1986 |
|
|
|
548 |
|
|
|
92.6 |
|
Camden Place |
|
|
442 |
|
|
|
1984 |
|
|
|
772 |
|
|
|
94.3 |
|
Camden Ridge |
|
|
208 |
|
|
|
1985 |
|
|
|
829 |
|
|
|
94.2 |
|
Camden Springs |
|
|
304 |
|
|
|
1987 |
|
|
|
713 |
|
|
|
94.5 |
|
Camden Terrace |
|
|
340 |
|
|
|
1984 |
|
|
|
848 |
|
|
|
94.6 |
|
Camden Towne Village |
|
|
188 |
|
|
|
1983 |
|
|
|
735 |
|
|
|
95.3 |
|
Camden Valley Creek |
|
|
380 |
|
|
|
1984 |
|
|
|
855 |
|
|
|
95.6 |
|
Camden Valley Park |
|
|
516 |
|
|
|
1986 |
|
|
|
743 |
|
|
|
96.1 |
|
Camden Valley Ridge |
|
|
408 |
|
|
|
1987 |
|
|
|
773 |
|
|
|
93.6 |
|
Camden Westview |
|
|
335 |
|
|
|
1983 |
|
|
|
697 |
|
|
|
94.8 |
|
12
OPERATING PROPERTIES (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
Year Placed |
|
Average Apartment |
|
2006 Average |
Property and Location |
|
Apartments |
|
In Service |
|
Size (Sq. Ft.) |
|
Occupancy (1) |
Houston |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Baytown |
|
|
272 |
|
|
|
1999 |
|
|
|
844 |
|
|
|
95.7 |
% |
Camden Creek |
|
|
456 |
|
|
|
1984 |
|
|
|
639 |
|
|
|
92.3 |
|
Camden Greenway |
|
|
756 |
|
|
|
1999 |
|
|
|
861 |
|
|
|
95.7 |
|
Camden Holly Springs (2) |
|
|
548 |
|
|
|
1999 |
|
|
|
934 |
|
|
|
94.7 |
|
Camden Midtown |
|
|
337 |
|
|
|
1999 |
|
|
|
843 |
|
|
|
96.6 |
|
Camden Oak Crest |
|
|
364 |
|
|
|
2003 |
|
|
|
870 |
|
|
|
94.4 |
|
Camden Park (2) |
|
|
288 |
|
|
|
1995 |
|
|
|
866 |
|
|
|
95.6 |
|
Camden Royal Oaks (4) |
|
|
236 |
|
|
|
2006 |
|
|
|
923 |
|
|
Lease-up |
Camden Steeplechase |
|
|
290 |
|
|
|
1982 |
|
|
|
748 |
|
|
|
93.9 |
|
Camden Stonebridge |
|
|
204 |
|
|
|
1993 |
|
|
|
845 |
|
|
|
96.9 |
|
Camden Sugar Grove (2) |
|
|
380 |
|
|
|
1997 |
|
|
|
917 |
|
|
|
95.4 |
|
Camden Vanderbilt |
|
|
894 |
|
|
|
1996/1997 |
|
|
|
863 |
|
|
|
97.4 |
|
Camden West Oaks |
|
|
671 |
|
|
|
1982 |
|
|
|
726 |
|
|
|
93.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
63,843 |
|
|
|
|
|
|
|
905 |
|
|
|
95.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents average physical occupancy for the year except as noted below. |
|
(2) |
|
Properties owned through a joint venture in which we own a 20% interest. The remaining
interest is owned by an unaffiliated private investor. |
|
(3) |
|
Property owned through a joint venture in which we own a 50% interest. The remaining
interest is owned by an unaffiliated private investor. |
|
(4) |
|
Properties under lease-up at December 31, 2006. |
|
(5) |
|
Properties owned through a joint venture in which we own a 15% interest. The remaining
interest is owned by an unaffiliated private investor. |
|
(6) |
|
Properties owned through a joint venture in which we own a 20% interest. The remaining
interest is owned by an unaffiliated private pension fund. |
|
(7) |
|
Development property completed during 2006 average occupancy calculated from date at which
occupancy exceeded 90% through year-end. |
|
(8) |
|
Properties acquired during 2006 average occupancy calculated from date of acquisition date
through year-end. |
|
(9) |
|
Miramar is a student housing project for Texas A&M at Corpus Christi. Average occupancy
includes summer which is normally subject to high vacancies. |
13
Item 3. Legal Proceedings
For discussion regarding legal proceedings, see Note 18 to the Consolidated Financial
Statements on page F-30.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
The high and low closing prices per share of our common shares, as reported on the
New York Stock Exchange composite tape, and distributions per share declared for the
quarters indicated are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
Low |
|
Distributions |
2006 Quarters: |
|
|
|
|
|
|
|
|
|
|
|
|
First |
|
$ |
72.70 |
|
|
$ |
58.40 |
|
|
$ |
0.66 |
|
Second |
|
|
73.55 |
|
|
|
65.50 |
|
|
|
0.66 |
|
Third |
|
|
77.99 |
|
|
|
72.80 |
|
|
|
0.66 |
|
Fourth |
|
|
80.97 |
|
|
|
71.40 |
|
|
|
0.66 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 Quarters: |
|
|
|
|
|
|
|
|
|
|
|
|
First |
|
$ |
50.70 |
|
|
$ |
45.31 |
|
|
$ |
0.635 |
|
Second |
|
|
55.60 |
|
|
|
46.76 |
|
|
|
0.635 |
|
Third |
|
|
56.25 |
|
|
|
49.91 |
|
|
|
0.635 |
|
Fourth |
|
|
60.18 |
|
|
|
52.70 |
|
|
|
0.635 |
|
As of February 19, 2007, there were 765 shareholders of record and approximately
29,200 beneficial owners of our common shares.
Item 6. Selected Financial Data
The following table provides selected financial data relating to our historical
financial condition and results of operations as of and for each of the years ending
December 31, 2002 through 2006. This data should be read in conjunction with, Item 7.
Managements Discussion and Analysis of Financial Condition and Results of Operations and
the consolidated financial statements and related notes. Prior year amounts have been
restated for amounts classified as discontinued operations.
14
COMPARATIVE SUMMARY OF SELECTED FINANCIAL AND PROPERTY DATA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
(in thousands, except per share amounts) |
|
2006 |
|
|
2005 (c) |
|
|
2004 |
|
|
2003 |
|
|
2002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
|
$ |
544,236 |
|
|
$ |
479,221 |
|
|
$ |
351,513 |
|
|
$ |
335,892 |
|
|
$ |
332,290 |
|
Other property revenues |
|
|
55,194 |
|
|
|
42,860 |
|
|
|
31,503 |
|
|
|
29,999 |
|
|
|
27,636 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property revenues |
|
|
599,430 |
|
|
|
522,081 |
|
|
|
383,016 |
|
|
|
365,891 |
|
|
|
359,926 |
|
Property Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating and maintenance |
|
|
165,810 |
|
|
|
145,044 |
|
|
|
113,762 |
|
|
|
106,148 |
|
|
|
96,918 |
|
Real estate taxes |
|
|
63,388 |
|
|
|
57,316 |
|
|
|
42,131 |
|
|
|
40,191 |
|
|
|
37,678 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property expenses |
|
|
229,198 |
|
|
|
202,360 |
|
|
|
155,893 |
|
|
|
146,339 |
|
|
|
134,596 |
|
Non-property income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee and asset management |
|
|
14,041 |
|
|
|
12,912 |
|
|
|
9,187 |
|
|
|
7,276 |
|
|
|
6,264 |
|
Sale of technology investments |
|
|
1,602 |
|
|
|
24,206 |
|
|
|
863 |
|
|
|
|
|
|
|
|
|
Interest and other income |
|
|
9,771 |
|
|
|
7,373 |
|
|
|
11,074 |
|
|
|
5,685 |
|
|
|
8,214 |
|
Income (loss) on deferred compensation plans |
|
|
10,116 |
|
|
|
6,421 |
|
|
|
6,760 |
|
|
|
(895 |
) |
|
|
(1,353 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-property income |
|
|
35,530 |
|
|
|
50,912 |
|
|
|
27,884 |
|
|
|
12,066 |
|
|
|
13,125 |
|
Other expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property management |
|
|
18,490 |
|
|
|
16,145 |
|
|
|
11,924 |
|
|
|
10,154 |
|
|
|
10,027 |
|
Fee and asset management |
|
|
9,382 |
|
|
|
6,897 |
|
|
|
3,856 |
|
|
|
3,908 |
|
|
|
2,499 |
|
General and administrative |
|
|
37,584 |
|
|
|
24,845 |
|
|
|
18,536 |
|
|
|
16,231 |
|
|
|
14,439 |
|
Transaction compensation and merger expenses |
|
|
|
|
|
|
14,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment provision for technology investments |
|
|
|
|
|
|
130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,389 |
|
|
|
2,790 |
|
Losses related to early retirement of debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
234 |
|
Interest |
|
|
118,344 |
|
|
|
111,548 |
|
|
|
78,260 |
|
|
|
74,036 |
|
|
|
70,093 |
|
Depreciation and amortization |
|
|
158,510 |
|
|
|
164,705 |
|
|
|
94,730 |
|
|
|
92,948 |
|
|
|
88,442 |
|
Amortization of deferred financing costs |
|
|
3,813 |
|
|
|
3,739 |
|
|
|
2,697 |
|
|
|
2,633 |
|
|
|
2,165 |
|
Expense (gain) on deferred compensation plans |
|
|
10,116 |
|
|
|
6,421 |
|
|
|
6,760 |
|
|
|
(895 |
) |
|
|
(1,353 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expenses |
|
|
356,239 |
|
|
|
348,515 |
|
|
|
216,763 |
|
|
|
200,404 |
|
|
|
189,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before gain on sale of
properties, impairment loss on land held for sale, equity in
income of joint ventures and minority interests |
|
|
49,523 |
|
|
|
22,118 |
|
|
|
38,244 |
|
|
|
31,214 |
|
|
|
49,119 |
|
Gain on sale of properties, including land |
|
|
97,452 |
|
|
|
132,914 |
|
|
|
1,642 |
|
|
|
2,590 |
|
|
|
359 |
|
Impairment loss on land held for sale |
|
|
|
|
|
|
(339 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Equity in income of joint ventures |
|
|
5,156 |
|
|
|
10,049 |
|
|
|
356 |
|
|
|
3,200 |
|
|
|
366 |
|
Income allocated to minority interests |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions on perpetual preferred units |
|
|
(7,000 |
) |
|
|
(7,028 |
) |
|
|
(10,461 |
) |
|
|
(12,747 |
) |
|
|
(12,872 |
) |
Original issuance costs of redeemed perpetual preferred units |
|
|
|
|
|
|
(365 |
) |
|
|
(745 |
) |
|
|
|
|
|
|
|
|
Income allocated to common units and other minority interests |
|
|
(16,163 |
) |
|
|
(2,223 |
) |
|
|
(2,733 |
) |
|
|
(2,196 |
) |
|
|
(1,762 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
128,968 |
|
|
|
155,126 |
|
|
|
26,303 |
|
|
|
22,061 |
|
|
|
35,210 |
|
Income from discontinued operations |
|
|
6,434 |
|
|
|
8,249 |
|
|
|
8,357 |
|
|
|
7,410 |
|
|
|
10,248 |
|
Gain on sale of discontinued operations |
|
|
99,273 |
|
|
|
36,175 |
|
|
|
9,351 |
|
|
|
|
|
|
|
29,199 |
|
Impairment loss on land held for sale |
|
|
|
|
|
|
|
|
|
|
(1,143 |
) |
|
|
|
|
|
|
|
|
Income from discontinued operations, allocated to common units |
|
|
(1,829 |
) |
|
|
(464 |
) |
|
|
(1,527 |
) |
|
|
(41 |
) |
|
|
(45 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
232,846 |
|
|
$ |
199,086 |
|
|
$ |
41,341 |
|
|
$ |
29,430 |
|
|
$ |
74,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
2.28 |
|
|
$ |
2.98 |
|
|
$ |
0.64 |
|
|
$ |
0.56 |
|
|
$ |
0.87 |
|
Income from discontinued operations, including gain on sale |
|
|
1.83 |
|
|
|
0.85 |
|
|
|
0.36 |
|
|
|
0.19 |
|
|
|
0.97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
4.11 |
|
|
$ |
3.83 |
|
|
$ |
1.00 |
|
|
$ |
0.75 |
|
|
$ |
1.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
2.21 |
|
|
$ |
2.79 |
|
|
$ |
0.62 |
|
|
$ |
0.53 |
|
|
$ |
0.84 |
|
Income from discontinued operations, including gain on sale |
|
|
1.75 |
|
|
|
0.79 |
|
|
|
0.36 |
|
|
|
0.18 |
|
|
|
0.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
3.96 |
|
|
$ |
3.58 |
|
|
$ |
0.98 |
|
|
$ |
0.71 |
|
|
$ |
1.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions declared per common share |
|
$ |
2.64 |
|
|
$ |
2.54 |
|
|
$ |
2.54 |
|
|
$ |
2.54 |
|
|
$ |
2.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding |
|
|
56,660 |
|
|
|
52,000 |
|
|
|
41,430 |
|
|
|
39,355 |
|
|
|
40,441 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common and common
dilutive equivalent shares outstanding |
|
|
59,524 |
|
|
|
56,313 |
|
|
|
42,426 |
|
|
|
41,354 |
|
|
|
44,216 |
|
15
COMPARATIVE SUMMARY OF SELECTED FINANCIAL AND PROPERTY DATA
(CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
(in thousands, except property data) |
|
2006 |
|
|
2005 (c) |
|
|
2004 |
|
|
2003 |
|
|
2002 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data (at end of year) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate assets |
|
$ |
5,141,467 |
|
|
$ |
5,039,007 |
|
|
$ |
3,159,077 |
|
|
$ |
3,099,856 |
|
|
$ |
3,035,970 |
|
Accumulated depreciation |
|
|
(762,011 |
) |
|
|
(716,650 |
) |
|
|
(688,333 |
) |
|
|
(601,688 |
) |
|
|
(498,776 |
) |
Total assets |
|
|
4,586,050 |
|
|
|
4,487,799 |
|
|
|
2,629,364 |
|
|
|
2,625,561 |
|
|
|
2,608,899 |
|
Notes payable |
|
|
2,330,976 |
|
|
|
2,633,091 |
|
|
|
1,576,405 |
|
|
|
1,509,677 |
|
|
|
1,427,016 |
|
Minority interests |
|
|
223,511 |
|
|
|
221,023 |
|
|
|
159,567 |
|
|
|
196,385 |
|
|
|
200,729 |
|
Shareholders equity |
|
$ |
1,734,356 |
|
|
$ |
1,370,903 |
|
|
$ |
738,515 |
|
|
$ |
784,885 |
|
|
$ |
839,453 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares outstanding |
|
|
65,006 |
|
|
|
60,763 |
|
|
|
48,601 |
|
|
|
48,299 |
|
|
|
47,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows provided by (used in): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities |
|
$ |
231,569 |
|
|
$ |
200,845 |
|
|
$ |
156,997 |
|
|
$ |
144,703 |
|
|
$ |
184,808 |
|
Investing activities |
|
|
(52,067 |
) |
|
|
(207,561 |
) |
|
|
(65,321 |
) |
|
|
(94,386 |
) |
|
|
(220,766 |
) |
Financing activities |
|
|
(180,044 |
) |
|
|
6,039 |
|
|
|
(92,780 |
) |
|
|
(47,365 |
) |
|
|
33,184 |
|
Funds from operations diluted (a) |
|
|
237,790 |
|
|
|
195,290 |
|
|
|
143,669 |
|
|
|
135,699 |
|
|
|
150,443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of operating properties (at end of year) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in continuing operations |
|
|
183 |
|
|
|
180 |
|
|
|
131 |
|
|
|
130 |
|
|
|
129 |
|
Included in discontinued operations |
|
|
3 |
|
|
|
11 |
|
|
|
13 |
|
|
|
14 |
|
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of operating apartment homes (at end of year) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in continuing operations |
|
|
62,913 |
|
|
|
61,609 |
|
|
|
46,599 |
|
|
|
45,935 |
|
|
|
45,381 |
|
Included in discontinued operations |
|
|
930 |
|
|
|
3,971 |
|
|
|
4,857 |
|
|
|
5,409 |
|
|
|
5,409 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of operating apartment homes (weighted average) (b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in continuing operations |
|
|
53,387 |
|
|
|
50,765 |
|
|
|
41,712 |
|
|
|
41,014 |
|
|
|
40,316 |
|
Included in discontinued operations |
|
|
2,463 |
|
|
|
4,291 |
|
|
|
5,406 |
|
|
|
5,368 |
|
|
|
6,435 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average monthly total property revenue per apartment home, excluding discontinued operations |
|
$ |
936 |
|
|
$ |
857 |
|
|
$ |
765 |
|
|
$ |
743 |
|
|
$ |
744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties under development (at end of period) |
|
|
11 |
|
|
|
9 |
|
|
|
3 |
|
|
|
2 |
|
|
|
4 |
|
|
|
|
(a) |
|
Management considers Funds From Operations (FFO) to be an appropriate measure of performance of an equity REIT. The National Association of Real Estate Investment Trusts currently defines FFO as net
income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from depreciable operating property sales, plus real estate depreciation and amortization, and
after adjustments for unconsolidated partnerships and joint ventures. Diluted FFO also assumes conversion of all dilutive convertible securities, including minority 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 excluding depreciation,
FFO can help one compare the operating performance of a companys real estate between periods or as compared to different companies. |
|
(b) |
|
Excludes apartment homes owned in joint ventures. |
|
(c) |
|
The 2005 results include the operations of Summit Properties Inc. subsequent to February 28, 2005. |
16
Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the consolidated financial
statements and notes appearing elsewhere in this report. Historical results and trends which might
appear in the 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. 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 that are not statements of
historical fact should be deemed forward-looking statements. Reliance should not be placed on
these forward-looking statements as they 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 that 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:
|
|
|
Insufficient cash flows could affect our ability to make required payments of
debt obligations or pay distributions to shareholders and create refinancing risk; |
|
|
|
|
Unfavorable changes in economic conditions could adversely impact occupancy or rental rates; |
|
|
|
|
Various changes could adversely impact the market price of our common shares; |
|
|
|
|
Development and construction risks could impact our profitability; |
|
|
|
|
Our property acquisition strategy may not produce the cash flows expected; |
|
|
|
|
Difficulties of selling real estate could limit our flexibility; |
|
|
|
|
Our variable rate debt is subject to interest rate risk; |
|
|
|
|
Issuances of additional debt or equity may adversely impact our financial condition; |
|
|
|
|
Losses from catastrophes may exceed our insurance coverage; |
|
|
|
|
Potential liability for environmental contamination could result in substantial loss; |
|
|
|
|
Tax matters, including failure to qualify as a real estate investment trust
(REIT) could have adverse consequences; |
|
|
|
|
Investments in joint ventures and partnerships involve risks not present in
investments in which we are the sole investor; |
|
|
|
|
Competition could limit our ability to lease apartments or increase or maintain
rental income; and |
|
|
|
|
Changes in laws and litigation risks could affect our business. |
These forward-looking statements represent our estimates and assumptions as of the date of this
report.
Executive Summary
Based on our results for the year ended December 31, 2006 and the projected economic
conditions, we expect moderate growth during 2007 from the revenue generated by our stabilized
communities. The economic projections include meaningful job growth and population growth in a
number of markets in which we operate and decreased housing demand due to rising interest rates
resulting in multifamily apartment communities being an economically attractive alternative to
purchasing a single-family home and positively affecting apartment housing demand.
We intend to continue to focus on our market balance investment strategy and to improve our
portfolio mix through the acquisition and disposition of real estate assets. We expect market
concentration risk to be mitigated as our property operations are not centralized in any one
market.
In positioning for future growth, we intend to continue focusing on our development pipeline
and maintain approximately $1.0 billion to $1.5 billion in our current and future development
pipelines. Total projected capital costs and the commencement of future developments may be
impacted by increasing construction costs and other factors.
17
Property Portfolio
Our multifamily property portfolio, excluding land held for future development and joint
venture properties which we do not manage, is summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2006 |
|
December 31, 2005 |
|
|
Apartment |
|
|
|
|
|
Apartment |
|
|
|
|
Homes |
|
Properties |
|
Homes |
|
Properties |
Operating Properties |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Las Vegas, Nevada |
|
|
8,064 |
|
|
|
30 |
|
|
|
8,064 |
|
|
|
30 |
|
Dallas, Texas |
|
|
7,773 |
|
|
|
21 |
|
|
|
8,643 |
|
|
|
24 |
|
Houston, Texas |
|
|
5,696 |
|
|
|
13 |
|
|
|
6,810 |
|
|
|
15 |
|
Tampa, Florida |
|
|
5,635 |
|
|
|
12 |
|
|
|
5,635 |
|
|
|
12 |
|
Charlotte, North Carolina |
|
|
4,146 |
|
|
|
17 |
|
|
|
4,493 |
|
|
|
18 |
|
Washington, D.C. Metro |
|
|
3,834 |
|
|
|
11 |
|
|
|
2,882 |
|
|
|
9 |
|
Orlando, Florida |
|
|
3,296 |
|
|
|
8 |
|
|
|
3,296 |
|
|
|
8 |
|
Atlanta, Georgia |
|
|
3,202 |
|
|
|
10 |
|
|
|
3,202 |
|
|
|
10 |
|
Raleigh, North Carolina |
|
|
2,704 |
|
|
|
7 |
|
|
|
2,631 |
|
|
|
7 |
|
Denver, Colorado |
|
|
2,529 |
|
|
|
8 |
|
|
|
2,529 |
|
|
|
8 |
|
Austin, Texas |
|
|
2,525 |
|
|
|
8 |
|
|
|
2,135 |
|
|
|
7 |
|
Southeast Florida |
|
|
2,520 |
|
|
|
7 |
|
|
|
2,520 |
|
|
|
7 |
|
Phoenix, Arizona |
|
|
2,433 |
|
|
|
8 |
|
|
|
2,433 |
|
|
|
8 |
|
Los Angeles/Orange County, California |
|
|
2,191 |
|
|
|
5 |
|
|
|
2,191 |
|
|
|
5 |
|
St. Louis, Missouri |
|
|
2,123 |
|
|
|
6 |
|
|
|
2,123 |
|
|
|
6 |
|
Louisville, Kentucky |
|
|
1,448 |
|
|
|
5 |
|
|
|
1,448 |
|
|
|
5 |
|
Corpus Christi, Texas |
|
|
1,410 |
|
|
|
3 |
|
|
|
1,410 |
|
|
|
3 |
|
San Diego/Inland Empire, California |
|
|
846 |
|
|
|
3 |
|
|
|
846 |
|
|
|
3 |
|
Other |
|
|
1,468 |
|
|
|
4 |
|
|
|
2,289 |
|
|
|
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Properties |
|
|
63,843 |
|
|
|
186 |
|
|
|
65,580 |
|
|
|
191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties Under Development |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Washington, D.C. Metro |
|
|
2,237 |
|
|
|
6 |
|
|
|
1,996 |
|
|
|
5 |
|
Houston, Texas |
|
|
650 |
|
|
|
2 |
|
|
|
236 |
|
|
|
1 |
|
San Diego/Inland Empire, California |
|
|
350 |
|
|
|
1 |
|
|
|
350 |
|
|
|
1 |
|
Los Angeles/Orange County, California |
|
|
290 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
Orlando, Florida |
|
|
261 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
Raleigh, North Carolina |
|
|
|
|
|
|
|
|
|
|
484 |
|
|
|
1 |
|
Charlotte, North Carolina |
|
|
|
|
|
|
|
|
|
|
145 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Properties Under Development |
|
|
3,788 |
|
|
|
11 |
|
|
|
3,211 |
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Properties |
|
|
67,631 |
|
|
|
197 |
|
|
|
68,791 |
|
|
|
200 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Joint Venture Properties (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Las Vegas, Nevada |
|
|
4,047 |
|
|
|
17 |
|
|
|
4,047 |
|
|
|
17 |
|
Dallas, Texas |
|
|
456 |
|
|
|
1 |
|
|
|
456 |
|
|
|
1 |
|
Houston, Texas |
|
|
1,487 |
|
|
|
4 |
|
|
|
1,216 |
|
|
|
3 |
|
Charlotte, North Carolina |
|
|
|
|
|
|
|
|
|
|
492 |
|
|
|
2 |
|
Washington, D.C. Metro |
|
|
508 |
|
|
|
1 |
|
|
|
464 |
|
|
|
1 |
|
Raleigh, North Carolina |
|
|
|
|
|
|
|
|
|
|
411 |
|
|
|
1 |
|
Denver, Colorado |
|
|
320 |
|
|
|
1 |
|
|
|
320 |
|
|
|
1 |
|
Phoenix, Arizona |
|
|
992 |
|
|
|
4 |
|
|
|
992 |
|
|
|
4 |
|
Los Angeles/Orange County, California |
|
|
711 |
|
|
|
2 |
|
|
|
421 |
|
|
|
1 |
|
St. Louis, Missouri |
|
|
1,447 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
Louisville, Kentucky |
|
|
1,194 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
Other |
|
|
596 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Joint Venture Properties |
|
|
11,758 |
|
|
|
39 |
|
|
|
8,819 |
|
|
|
31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Properties Owned 100% |
|
|
55,873 |
|
|
|
158 |
|
|
|
59,972 |
|
|
|
169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Refer to Note 8, Investments in Joint Ventures in the Notes to Consolidated
Financial Statements for further discussion of our joint venture investments. |
18
Stabilized Communities
We consider a property stabilized once it reaches 90% occupancy, or generally one year from
opening the leasing office, with some allowances for larger than average properties. During the
year ended December 31, 2006, stabilization was achieved at two recently completed properties as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
|
Apartment |
|
Date of |
|
Date of |
Property and Location |
|
Homes |
|
Completion |
|
Stabilization |
Camden Farmers Market II |
|
|
|
|
|
|
|
|
|
|
|
|
Dallas, TX |
|
|
284 |
|
|
|
3Q05 |
|
|
|
2Q06 |
|
Camden Dilworth |
|
|
|
|
|
|
|
|
|
|
|
|
Charlotte, NC |
|
|
145 |
|
|
|
2Q06 |
|
|
|
3Q06 |
|
Acquisition Communities
On January 31, 2006, we acquired the remaining 80% interest in Camden-Delta Westwind, LLC, a
joint venture in which we had a 20% interest, in accordance with the Agreement and Assignment of
Limited Liability Company Interest. The 80% interest was previously owned by Westwind Equity, LLC
(Westwind), an unrelated third-party. As a result of the acquisition, we paid Westwind $31.0
million, which included a $2.0 million non-refundable earnest money deposit paid in October 2005.
Concurrent with this transaction, the mezzanine loan we had provided to the joint venture, which
totaled $12.1 million, was canceled. Additionally, we repaid the outstanding balance of a
third party construction loan, totaling $46.8 million. We used proceeds from our unsecured line of
credit facility to fund this purchase. The purchase price was allocated to the tangible and
intangible assets and liabilities acquired based on their estimated fair value at the date of
acquisition. The intangible assets acquired at acquisition include in-place leases of $0.5
million.
In July 2006, we acquired Camden Stoneleigh, a 390-apartment home community located in Austin,
Texas, for $35.3 million using proceeds from our unsecured line of credit. The purchase price of
this property was allocated to the tangible and intangible assets and liabilities acquired based on
their estimated fair values at the date of acquisition. The intangible assets acquired at
acquisition include in-place leases of $0.6 million and above or below market leases of $0.1
million.
Dispositions and Partial Sales to Joint Ventures Included in Continuing Operations
During the year ended December 31, 2006, we recognized gains of $91.5 million from the partial
sale of nine properties to an affiliated unconsolidated joint venture. This partial sale generated
net proceeds of approximately $170.9 million. During the year ended December 31, 2005, we
recognized gains of $132.1 million from the partial sales of twelve properties to twelve affiliated
unconsolidated joint ventures. These partial sales generated net proceeds of approximately $316.8
million. The gains recognized on the partial sales of these assets were included in continuing
operations as we retained a partial interest in the ventures which own these assets.
During the year ended December 31, 2006, we recognized gains of $0.5 million and $4.7 million
on the partial sales of land to two joint ventures located in Houston, Texas and College Park,
Maryland, respectively. The gains recognized on the sales of these assets were included in
continuing operations as we retained a partial interest in the ventures which own these assets.
During the year ended December 31, 2006, we recognized a gain of $0.8 million on the sale of
land located adjacent to one of our pre-development assets in College Park, Maryland. During the
year ended December 31, 2005, we recognized a gain of $0.8 million on the sale of land located
adjacent to one of our pre-development assets in Houston, Texas. Also during 2005, we sold
undeveloped land located in Dallas, Texas to an unrelated third party. In connection with our
decision to sell this undeveloped land, we recognized an impairment loss of $0.3 million. During
the year ended December 31, 2004, we recognized gains totaling $1.6 million on the sales of land
located adjacent to two of our pre-development assets in Houston, Texas. These gains were included
in continuing operations as the cash flows from these land parcels were not separately identifiable
from the cash flows generated by the adjacent pre-development assets.
19
Discontinued Operations
Income from discontinued operations includes the operations of properties, including land,
sold during the period or classified as held for sale as of December 31, 2006. The components of
earnings classified as discontinued operations include separately identifiable property-specific
revenues, expenses, depreciation and interest expense, if any. The gain or loss on the disposal of
the held for sale properties is also classified as discontinued operations. We intend to maintain
a strategy of managing our invested capital through the selective sale of properties and to utilize
the proceeds to fund investments with higher anticipated growth prospects in our markets.
A summary of our 2006 dispositions and properties held for sale as of December 31, 2006 is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
|
|
|
($ in millions) |
|
Apartment |
|
Date of |
|
|
|
|
|
Net Book |
Property and Location |
|
Homes |
|
Disposition |
|
Year Built |
|
Value (1) |
Dispositions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Highlands |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plano, TX |
|
|
160 |
|
|
|
1Q06 |
|
|
|
1985 |
|
|
|
n/a |
|
Camden View |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tucson, AZ |
|
|
365 |
|
|
|
1Q06 |
|
|
|
1974 |
|
|
|
n/a |
|
Camden Trails |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dallas, TX |
|
|
264 |
|
|
|
2Q06 |
|
|
|
1984 |
|
|
|
n/a |
|
Camden Wilshire |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Houston, TX |
|
|
536 |
|
|
|
2Q06 |
|
|
|
1982 |
|
|
|
n/a |
|
Camden Pass |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tucson, AZ |
|
|
456 |
|
|
|
2Q06 |
|
|
|
1984 |
|
|
|
n/a |
|
Camden Oaks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dallas, TX |
|
|
446 |
|
|
|
3Q06 |
|
|
|
1985 |
|
|
|
n/a |
|
Camden Wyndham |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Houston, TX |
|
|
448 |
|
|
|
4Q06 |
|
|
|
1978/1981 |
|
|
|
n/a |
|
Camden Crossing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Houston, TX |
|
|
366 |
|
|
|
4Q06 |
|
|
|
1982 |
|
|
|
n/a |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Held for Sale |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Trace |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maryland Heights, MO |
|
|
372 |
|
|
|
n/a |
|
|
|
1972 |
|
|
$ |
6.9 |
|
Camden Taravue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
St. Louis, MO |
|
|
304 |
|
|
|
n/a |
|
|
|
1975 |
|
|
|
5.9 |
|
Camden Downs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Louisville, KY |
|
|
254 |
|
|
|
n/a |
|
|
|
1975 |
|
|
|
5.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total apartment homes sold and held for sale |
|
|
3,971 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Net Book Value is land and buildings and improvements less the related accumulated
depreciation as of December 31, 2006. |
During the year ended December 31, 2006, we recognized gains of $78.8 million from the
sale of eight operating properties to unaffiliated third parties. These sales generated net
proceeds of approximately $137.3 million. During the year ended December 31, 2005, we recognized
gains of $36.1 million from the sale of three operating properties, containing 1,317 apartment
homes, to unaffiliated third parties. During the year ended December 31, 2004, we recognized a gain
of $8.4 million on the sale of one operating property, containing 552 apartment homes, to an
unaffiliated third party.
During the year ended December 31, 2006, the operations of two properties previously included
in discontinued operations were reclassified to continuing operations as management made the
decision not to sell these assets. As a result, we adjusted the current and prior period
consolidated financial statements to reflect the
20
necessary reclassifications. Additionally, we recorded a depreciation charge of $2.6 million
during the year ended December 31, 2006 on these assets.
Upon our decision to abandon efforts to develop certain land parcels and to market these
parcels as held for sale, we reclassified the operating expenses associated with these assets to
discontinued operations. At December 31, 2006, we had several undeveloped land parcels classified
as held for sale as follows:
|
|
|
|
|
|
|
|
|
($ in millions) |
|
|
|
|
|
Net Book |
|
Location |
|
Acres |
|
|
Value |
|
Southeast Florida |
|
|
3.1 |
|
|
$ |
12.3 |
|
Dallas |
|
|
2.6 |
|
|
|
2.5 |
|
|
|
|
|
|
|
|
|
Total land held for sale |
|
|
|
|
|
$ |
14.8 |
|
|
|
|
|
|
|
|
|
During the year ended December 31, 2006, we sold undeveloped land totaling an aggregate of 8.7
acres to unrelated third parties. In connection with these sales, we received net proceeds of
$41.0 million and recognized gains totaling $20.5 million. During the year ended December 31,
2004, we sold undeveloped land totaling 2.1 acres to an unrelated third party. In connection with
this sale, we recognized a gain of $1.0 million. Land sales during the year ended December 31,
2005 were immaterial.
During 2004, in connection with our decision to dispose of a 2.4 acre parcel of undeveloped
land located in Dallas, we incurred an impairment charge of $1.1 million to write-down the carrying
value of the land to its fair value, less costs to sell.
Development and Lease-Up Properties
At December 31, 2006, we had four completed properties in lease-up as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
|
% Leased |
|
|
|
|
|
|
Estimated |
|
($ in millions) |
|
Apartment |
|
|
Cost to |
|
|
at |
|
|
Date of |
|
|
Date of |
|
Property and Location |
|
Homes |
|
|
Date |
|
|
2 /19/07 |
|
|
Completion |
|
|
Stabilization |
|
In Lease-Up: Wholly-Owned |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Fairfax Corner |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fairfax, VA |
|
|
488 |
|
|
$ |
80.6 |
|
|
|
93 |
% |
|
|
3Q06 |
|
|
|
1Q07 |
|
Camden Westwind |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ashburn, VA |
|
|
464 |
|
|
|
95.0 |
|
|
|
71 |
% |
|
|
2Q06 |
|
|
|
3Q07 |
|
Camden Manor Park |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Raleigh, NC |
|
|
484 |
|
|
|
49.3 |
|
|
|
78 |
% |
|
|
3Q06 |
|
|
|
3Q07 |
|
Camden Royal Oaks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Houston, TX |
|
|
236 |
|
|
|
20.8 |
|
|
|
46 |
% |
|
|
3Q06 |
|
|
|
1Q08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total wholly-owned |
|
|
1,672 |
|
|
$ |
245.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
At December 31, 2006, we had eleven properties in various stages of construction as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in |
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
|
|
|
|
|
Properties |
|
|
Estimated |
|
|
Estimated |
|
($ in millions) |
|
Apartment |
|
|
Estimated |
|
|
Cost |
|
|
Under |
|
|
Date of |
|
|
Date of |
|
Property and Location |
|
Homes |
|
|
Cost |
|
|
Incurred |
|
|
Development |
|
|
Completion |
|
|
Stabilization |
|
In Lease-Up: Wholly-Owned |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Clearbrook |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frederick, MD |
|
|
297 |
|
|
$ |
46.0 |
|
|
$ |
45.3 |
|
|
$ |
13.6 |
|
|
|
1Q07 |
|
|
|
3Q07 |
|
Camden Old Creek |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
San Marcos, CA |
|
|
350 |
|
|
|
98.0 |
|
|
|
90.0 |
|
|
|
44.5 |
|
|
|
2Q07 |
|
|
|
4Q07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under
Construction: Wholly-Owned |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Largo, Phase II |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Largo, MD |
|
|
26 |
|
|
|
5.5 |
|
|
|
3.9 |
|
|
|
3.9 |
|
|
|
1Q07 |
|
|
|
2Q07 |
|
Camden Monument Place |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fairfax, VA |
|
|
368 |
|
|
|
64.0 |
|
|
|
46.8 |
|
|
|
46.8 |
|
|
|
3Q07 |
|
|
|
1Q08 |
|
Camden Potomac Yards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arlington County, VA |
|
|
379 |
|
|
|
110.0 |
|
|
|
75.3 |
|
|
|
75.3 |
|
|
|
3Q07 |
|
|
|
3Q08 |
|
Camden City Centre |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Houston, TX |
|
|
379 |
|
|
|
54.0 |
|
|
|
31.0 |
|
|
|
31.0 |
|
|
|
4Q07 |
|
|
|
3Q08 |
|
Camden Summerfield |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Largo, MD |
|
|
291 |
|
|
|
68.0 |
|
|
|
28.3 |
|
|
|
28.3 |
|
|
|
3Q08 |
|
|
|
1Q09 |
|
Camden Orange Court |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Orlando, FL |
|
|
261 |
|
|
|
49.0 |
|
|
|
16.2 |
|
|
|
16.2 |
|
|
|
3Q08 |
|
|
|
1Q09 |
|
Camden Dulles Station |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Herndon, VA |
|
|
368 |
|
|
|
77.0 |
|
|
|
26.1 |
|
|
|
26.1 |
|
|
|
4Q08 |
|
|
|
2Q09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total wholly-owned |
|
|
2,719 |
|
|
$ |
571.5 |
|
|
$ |
362.9 |
|
|
$ |
285.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under Construction Joint
Ventures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Camden Main & Jamboree |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Irvine, CA |
|
|
290 |
|
|
$ |
107.1 |
|
|
$ |
94.0 |
|
|
$ |
94.0 |
|
|
|
2Q07 |
|
|
|
4Q07 |
|
Camden Plaza |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Houston, TX |
|
|
271 |
|
|
|
42.9 |
|
|
|
28.9 |
|
|
|
28.9 |
|
|
|
3Q07 |
|
|
|
2Q08 |
|
Camden College Park |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
College Park, MD |
|
|
508 |
|
|
|
139.9 |
|
|
|
68.3 |
|
|
|
68.3 |
|
|
|
1Q09 |
|
|
|
4Q09 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total joint ventures |
|
|
1,069 |
|
|
$ |
289.9 |
|
|
$ |
191.2 |
|
|
$ |
191.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our consolidated balance sheet at December 31, 2006 included $369.9 million related to
wholly-owned properties under development. Of this amount, $285.7 million related to our
wholly-owned projects currently under development. Additionally, at December 31, 2006, we had
$84.2 million invested in land held for future development. Included in this amount was $41.9
million related to projects we expect to begin constructing during 2007. We also had $36.1 million
invested in land tracts adjacent to development projects, which are being utilized in conjunction
with those projects. Upon completion of these development projects, we may utilize this land to
further develop apartment homes in these areas. We may also sell certain parcels of these
undeveloped land tracts to third parties for commercial and retail development.
22
Geographic Diversification
At December 31, 2006 and 2005, our investments in various geographic areas, excluding
investments in joint ventures, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
2006 |
|
|
2005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Washington, D.C. Metro |
|
$ |
1,038,981 |
|
|
|
20.2 |
% |
|
$ |
810,717 |
|
|
|
16.7 |
% |
Southeast Florida |
|
|
454,837 |
|
|
|
8.9 |
|
|
|
371,579 |
|
|
|
7.6 |
|
Dallas, Texas |
|
|
381,521 |
|
|
|
7.4 |
|
|
|
387,159 |
|
|
|
8.0 |
|
Los Angeles/Orange County, California |
|
|
343,853 |
|
|
|
6.7 |
|
|
|
342,279 |
|
|
|
7.0 |
|
Charlotte, North Carolina |
|
|
336,337 |
|
|
|
6.6 |
|
|
|
334,063 |
|
|
|
6.9 |
|
Houston, Texas |
|
|
334,019 |
|
|
|
6.5 |
|
|
|
326,535 |
|
|
|
6.7 |
|
Tampa, Florida |
|
|
322,684 |
|
|
|
6.3 |
|
|
|
257,963 |
|
|
|
5.3 |
|
Atlanta, Georgia |
|
|
314,595 |
|
|
|
6.1 |
|
|
|
309,639 |
|
|
|
6.4 |
|
Orlando, Florida |
|
|
288,088 |
|
|
|
5.6 |
|
|
|
274,569 |
|
|
|
5.7 |
|
Las Vegas, Nevada |
|
|
281,069 |
|
|
|
5.5 |
|
|
|
277,503 |
|
|
|
5.7 |
|
Raleigh, North Carolina |
|
|
232,973 |
|
|
|
4.5 |
|
|
|
222,019 |
|
|
|
4.6 |
|
Denver, Colorado |
|
|
198,185 |
|
|
|
3.9 |
|
|
|
196,110 |
|
|
|
4.0 |
|
San Diego/Inland Empire, California |
|
|
190,341 |
|
|
|
3.7 |
|
|
|
158,095 |
|
|
|
3.3 |
|
Austin, Texas |
|
|
158,673 |
|
|
|
3.1 |
|
|
|
117,855 |
|
|
|
2.4 |
|
Phoenix, Arizona |
|
|
115,418 |
|
|
|
2.2 |
|
|
|
113,370 |
|
|
|
2.3 |
|
Corpus Christi, Texas |
|
|
56,823 |
|
|
|
1.1 |
|
|
|
56,067 |
|
|
|
1.2 |
|
St. Louis, Missouri |
|
|
12,772 |
|
|
|
0.3 |
|
|
|
123,022 |
|
|
|
2.5 |
|
Louisville, Kentucky |
|
|
5,168 |
|
|
|
0.1 |
|
|
|
79,659 |
|
|
|
1.6 |
|
Other |
|
|
65,885 |
|
|
|
1.3 |
|
|
|
102,596 |
|
|
|
2.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total real estate assets, at cost |
|
|
5,132,222 |
|
|
|
100.0 |
% |
|
|
4,860,799 |
|
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Properties held for sale |
|
|
32,763 |
|
|
|
|
|
|
|
172,112 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total properties held for investment, at cost |
|
$ |
5,099,459 |
|
|
|
|
|
|
$ |
4,688,687 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results of Operations
Changes in revenues and expenses related to our operating properties from period to period are
due primarily to acquisitions, dispositions, the performance of stabilized properties in the
portfolio, and the lease-up of newly constructed properties. Where appropriate, comparisons of
income and expense on 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 years ended
December 31 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 |
|
2005 |
|
2004 |
Average monthly property revenue per apartment home |
|
$ |
936 |
|
|
$ |
857 |
|
|
$ |
765 |
|
Annualized total property expenses per apartment home |
|
$ |
4,293 |
|
|
$ |
3,986 |
|
|
$ |
3,737 |
|
Weighted average number of operating apartment homes owned 100% |
|
|
53,387 |
|
|
|
50,765 |
|
|
|
41,712 |
|
Weighted average occupancy of operating apartment homes owned 100% |
|
|
95.1 |
% |
|
|
95.0 |
% |
|
|
94.1 |
% |
23
Property-level operating results
The following tables present the property-level revenues and property-level expenses,
excluding discontinued operations, for the year ended December 31, 2006 as compared to 2005 and for
the year ended December 31, 2005 as compared to 2004:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apartment |
|
|
Year Ended |
|
|
|
|
|
|
Homes |
|
|
December 31, |
|
|
Change |
|
($ in thousands) |
|
at 12/31/06 |
|
|
2006 |
|
|
2005 |
|
|
$ |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same store communities |
|
|
33,465 |
|
|
$ |
336,076 |
|
|
$ |
314,308 |
|
|
$ |
21,768 |
|
|
|
6.9 |
% |
Summit same store communities |
|
|
13,100 |
|
|
|
171,943 |
|
|
|
133,584 |
|
|
|
38,359 |
|
|
|
28.7 |
|
Non-same store communities |
|
|
3,154 |
|
|
|
38,765 |
|
|
|
22,593 |
|
|
|
16,172 |
|
|
|
71.6 |
|
Summit non-same store communities |
|
|
833 |
|
|
|
14,741 |
|
|
|
9,975 |
|
|
|
4,766 |
|
|
|
47.8 |
|
Development and lease-up communities |
|
|
4,391 |
|
|
|
13,585 |
|
|
|
405 |
|
|
|
13,180 |
|
|
|
100.0 |
|
Dispositions/other |
|
|
|
|
|
|
24,320 |
|
|
|
41,216 |
|
|
|
(16,896 |
) |
|
|
(41.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property revenues |
|
|
54,943 |
|
|
$ |
599,430 |
|
|
$ |
522,081 |
|
|
$ |
77,349 |
|
|
|
14.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same store communities |
|
|
33,465 |
|
|
$ |
137,290 |
|
|
$ |
130,190 |
|
|
$ |
7,100 |
|
|
|
5.5 |
% |
Summit same store communities |
|
|
13,100 |
|
|
|
57,450 |
|
|
|
45,865 |
|
|
|
11,585 |
|
|
|
25.3 |
|
Non-same store communities |
|
|
3,154 |
|
|
|
13,934 |
|
|
|
7,789 |
|
|
|
6,145 |
|
|
|
78.9 |
|
Summit non-same store communities |
|
|
833 |
|
|
|
5,088 |
|
|
|
3,863 |
|
|
|
1,225 |
|
|
|
31.7 |
|
Development and lease-up communities |
|
|
4,391 |
|
|
|
4,308 |
|
|
|
87 |
|
|
|
4,221 |
|
|
|
100.0 |
|
Dispositions/other |
|
|
|
|
|
|
11,128 |
|
|
|
14,566 |
|
|
|
(3,438 |
) |
|
|
(23.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property expenses |
|
|
54,943 |
|
|
$ |
229,198 |
|
|
$ |
202,360 |
|
|
$ |
26,838 |
|
|
|
13.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same store communities are communities we (or Summit) owned and were stabilized as of January 1,
2005. Non-same store communities are stabilized communities we (or Summit) have acquired or
developed after January 1, 2005. Development and lease-up communities are non-stabilized
communities we (or Summit) have acquired or developed after January 1, 2005. Dispositions
primarily represent communities we have partially sold to joint ventures in which we retained an
ownership interest.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apartment |
|
|
Year Ended |
|
|
|
|
|
|
Homes |
|
|
December 31, |
|
|
Change |
|
|
|
at 12/31/05 |
|
|
2005 |
|
|
2004 |
|
|
$ |
|
|
% |
|
Property revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same store communities |
|
|
35,916 |
|
|
$ |
330,628 |
|
|
$ |
318,976 |
|
|
$ |
11,652 |
|
|
|
3.7 |
% |
Summit same store communities |
|
|
11,083 |
|
|
|
114,229 |
|
|
|
|
|
|
|
114,229 |
|
|
|
100.0 |
|
Non-same store communities |
|
|
3,266 |
|
|
|
32,120 |
|
|
|
22,698 |
|
|
|
9,422 |
|
|
|
41.5 |
|
Summit non-same store communities |
|
|
2,705 |
|
|
|
29,820 |
|
|
|
|
|
|
|
29,820 |
|
|
|
100.0 |
|
Development and lease-up communities |
|
|
3,031 |
|
|
|
806 |
|
|
|
|
|
|
|
806 |
|
|
|
100.0 |
|
Dispositions/other |
|
|
|
|
|
|
14,478 |
|
|
|
41,342 |
|
|
|
(26,864 |
) |
|
|
(65.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property revenues |
|
|
56,001 |
|
|
$ |
522,081 |
|
|
$ |
383,016 |
|
|
$ |
139,065 |
|
|
|
36.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same store communities |
|
|
35,916 |
|
|
$ |
135,579 |
|
|
$ |
131,191 |
|
|
$ |
4,388 |
|
|
|
3.3 |
% |
Summit same store communities |
|
|
11,083 |
|
|
|
39,185 |
|
|
|
|
|
|
|
39,185 |
|
|
|
100.0 |
|
Non-same store communities |
|
|
3,266 |
|
|
|
11,562 |
|
|
|
9,282 |
|
|
|
2,280 |
|
|
|
24.6 |
|
Summit non-same store communities |
|
|
2,705 |
|
|
|
10,811 |
|
|
|
|
|
|
|
10,811 |
|
|
|
100.0 |
|
Development and lease-up communities |
|
|
3,031 |
|
|
|
539 |
|
|
|
|
|
|
|
539 |
|
|
|
100.0 |
|
Dispositions/other |
|
|
|
|
|
|
4,684 |
|
|
|
15,420 |
|
|
|
(10,736 |
) |
|
|
(69.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property expenses |
|
|
56,001 |
|
|
$ |
202,360 |
|
|
$ |
155,893 |
|
|
$ |
46,467 |
|
|
|
29.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same store communities are communities we (or Summit) owned and were stabilized as of January 1,
2004. Non-same store communities are stabilized communities we (or Summit) have acquired or
developed after January 1, 2004. Development and lease-up communities are non-stabilized
communities we (or Summit) have developed or acquired after January 1, 2004. Dispositions
primarily represent communities we have partially sold to joint ventures in which we retained an
ownership interest.
24
Same store analysis
Camden same store property revenues for the year ended December 31, 2006 increased $21.8
million, or 6.9%, from 2005 resulting primarily from higher rental income per apartment home. Same
store property revenues for the year ended December 31, 2005 increased $11.7 million, or 3.7% from
2004 primarily from higher rental income per apartment home and decreased vacancy loss per
apartment home. Our revenue growth is the result of improving market fundamentals resulting from
growth in employment and population in the majority of our markets, the increasing cost of
ownership versus rental, and rising interest rates and construction costs limiting new supply. In
addition, we continue to believe our strong operating performance is not only the result of
improving operating fundamentals, but also the continued enhancements we are making to many of our
operational components, such as our web-based property management and revenue management systems.
We believe these enhancements have created efficiencies within our business and have allowed us to
take advantage of improvements in the rental market.
Total property expenses from our same store communities increased 5.5% and 3.3% for the year
ended December 31, 2006 as compared to 2005 and for the year ended December 31, 2005 as compared to
2004, respectively. The increases in same store property expenses per apartment home for the year
ended December 31, 2006 as compared to 2005 were primarily due to increases in repair and
maintenance, salaries and utilities expenses. These three expense categories represent
approximately 60% of total operating costs for the year ended December 31, 2006 and increased
approximately 8% as compared to the year ended December 31, 2005. The increases for the year ended
December 31, 2005 as compared to 2004 were primarily due to increases in salary and benefit expenses, real
estate tax expenses and utilities expenses. These three expense categories represent approximately
68% of total operating costs for the period, and increased approximately 5% as compared to 2004.
The revenues and expenses related to Summit same store communities represent the operations of
those assets since February 28, 2005, the effective time of the Summit merger. Increases in
revenues and expenses on Summit same store communities for 2006 compared to 2005 and for 2005
compared to 2004 are due to our ownership of those assets for only a partial year, beginning in
2005.
Non-same store analysis and other analysis
Property revenues from non-same store, development and lease-up communities increased $34.1
million for the year ended December 31, 2006 as compared to 2005 and increased $40.0 million for the
year ended December 31, 2005 as compared to 2004. The increase during both periods was primarily
due to the completion and lease-up of properties in our development pipeline. Property revenues
from non-same store, development and lease-up communities acquired in the Summit merger are only
for periods subsequent to February 28, 2005, the effective date of the merger.
Property revenues from dispositions/other decreased $16.9 million and $26.9 million for the
year ended December 31, 2006 as compared to 2005 and for the year ended December 31, 2005 as
compared to 2004, respectively. Dispositions/other property revenues earned during the year ended
December 31, 2006 primarily related to properties partially sold to joint ventures of $20.0 million
and retail lease income of $3.1 million. For the year ended December 31, 2005, dispositions/other
property revenues earned primarily related to properties partially sold into joint ventures of
$35.1 million, retail lease income of $2.3 million and income associated with the amortization of
above and below market leases on acquired communities of $2.8 million. For the year ended December
31, 2004, dispositions/other property revenue earned primarily related to properties partially sold
into joint ventures of $40.8 million.
Property expenses from non-same store, development and lease-up communities increased $11.6
million for the year ended December 31, 2006 as compared to 2005 and $13.6 million for 2005 as
compared to 2004. The increase in expenses during both periods was primarily due to the completion
and lease-up of properties in our development pipeline. Property expenses from non-same store,
development and lease-up communities acquired in the Summit merger are only for periods subsequent
to February 28, 2005, the effective date of the merger.
Property expenses from dispositions/other decreased $3.4 million and $10.7 million for the
year ended December 31, 2006 as compared to 2005 and for the year ended December 31, 2005 as
compared to 2004, respectively. The decrease for the year ended December 31, 2006 as compared to
December 31, 2005 was due to the partial sale of nine properties to a joint venture in 2006. The
decrease for the year ended December 31, 2005 as
25
compared to the year ended December 31, 2004 was due to the twelve communities partially sold to
twelve individual affiliated joint ventures during 2005.
Non-property income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
|
|
|
|
December 31, |
|
|
Change |
|
|
December 31, |
|
|
Change |
|
($ in thousands) |
|
2006 |
|
|
2005 |
|
|
$ |
|
|
% |
|
|
2005 |
|
|
2004 |
|
|
$ |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee and asset management |
|
$ |
14,041 |
|
|
$ |
12,912 |
|
|
$ |
1,129 |
|
|
|
8.7 |
% |
|
$ |
12,912 |
|
|
$ |
9,187 |
|
|
$ |
3,725 |
|
|
|
40.5 |
% |
Sale of technology investments |
|
|
1,602 |
|
|
|
24,206 |
|
|
|
(22,604 |
) |
|
|
(39.3 |
) |
|
|
24,206 |
|
|
|
863 |
|
|
|
23,343 |
|
|
|
|
* |
Interest and other income |
|
|
9,771 |
|
|
|
7,373 |
|
|
|
2,398 |
|
|
|
(71.5 |
) |
|
|
7,373 |
|
|
|
11,074 |
|
|
|
(3,701 |
) |
|
|
(33.4 |
) |
Income on deferred compensation plans |
|
|
10,116 |
|
|
|
6,421 |
|
|
|
3,695 |
|
|
|
57.5 |
|
|
|
6,421 |
|
|
|
6,760 |
|
|
|
(339 |
) |
|
|
(5.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-property income |
|
$ |
35,530 |
|
|
$ |
50,912 |
|
|
$ |
(15,382 |
) |
|
|
(30.2 |
)% |
|
$ |
50,912 |
|
|
$ |
27,884 |
|
|
$ |
23,028 |
|
|
|
82.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Not a meaningful percentage |
Fee and asset management income for the year ended December 31, 2006 increased $1.1
million as compared to 2005 and increased $3.7 million for the year ended December 31, 2005 as
compared to 2004. The increase in fee and asset management income during 2006 as compared to 2005
was primarily due to fees earned on our third-party construction projects. The fees earned from
the three joint ventures formed during the year ended December 31, 2006 were consistent with the
structuring fees we earned from the partial sale of 12 properties to joint ventures in 2005. The
increase in fee and asset management income during 2005 as compared to 2004 was primarily due to
the structuring fees we earned from the partial sale of 12 properties to joint ventures in 2005.
Income from the sale of technology investments totaled $1.6 million, $24.2 million and $0.9
million for the years ended December 31, 2006, 2005 and 2004, respectively. During the year ended
December 31, 2005, we recognized a $24.2 million gain on the sale of our investment in Rent.com,
which was acquired by eBay Inc. during the first quarter of 2005. During the year ended December 31,
2006, we received additional distributions totaling $1.6 million from the sale of our investment in
Rent.com.
Interest and other income increased $2.4 million for 2006 as compared to 2005 and decreased
$3.7 million for 2005 as compared to 2004. Interest income, which primarily relates to interest
earned on notes receivable outstanding under our mezzanine financing program, decreased $2.9
million for 2006 as compared to 2005 and decreased $2.0 million for 2005 as compared to 2004.
These decreases were due to repayments of notes receivable during all years. Other income was $5.3
million in 2006 and $1.7 million in 2004. Other income represents income recognized upon the
settlement of legal, insurance and warranty claims and contract disputes.
Income on deferred compensation plans increased $3.7 million during the year ended December
31, 2006 as compared to 2005 and decreased $0.3 million during the year ended December 31, 2005 as
compared to 2004. The changes in income primarily related to the performance of the assets held in
the deferred compensation plan for plan participants.
26
Other expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
|
|
|
|
December 31, |
|
|
Change |
|
|
December 31, |
|
|
Change |
|
($ in thousands) |
|
2006 |
|
|
2005 |
|
|
$ |
|
|
% |
|
|
2005 |
|
|
2004 |
|
|
$ |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property management |
|
$ |
18,490 |
|
|
$ |
16,145 |
|
|
$ |
2,345 |
|
|
|
14.5 |
% |
|
$ |
16,145 |
|
|
$ |
11,924 |
|
|
$ |
4,221 |
|
|
|
35.4 |
% |
Fee and asset management |
|
|
9,382 |
|
|
|
6,897 |
|
|
|
2,485 |
|
|
|
36.0 |
|
|
|
6,897 |
|
|
|
3,856 |
|
|
|
3,041 |
|
|
|
78.9 |
|
General and administrative |
|
|
37,584 |
|
|
|
24,845 |
|
|
|
12,739 |
|
|
|
51.3 |
|
|
|
24,845 |
|
|
|
18,536 |
|
|
|
6,309 |
|
|
|
34.0 |
|
Transaction compensation and merger
expenses |
|
|
|
|
|
|
14,085 |
|
|
|
(14,085 |
) |
|
|
(100.0 |
) |
|
|
14,085 |
|
|
|
|
|
|
|
14,085 |
|
|
|
100.0 |
|
Impairment provisions on technology
investments |
|
|
|
|
|
|
130 |
|
|
|
(130 |
) |
|
|
(100.0 |
) |
|
|
130 |
|
|
|
|
|
|
|
130 |
|
|
|
100.0 |
|
Interest |
|
|
118,344 |
|
|
|
111,548 |
|
|
|
6,796 |
|
|
|
6.1 |
|
|
|
111,548 |
|
|
|
78,260 |
|
|
|
33,288 |
|
|
|
42.5 |
|
Depreciation and amortization |
|
|
158,510 |
|
|
|
164,705 |
|
|
|
(6,195 |
) |
|
|
(3.8 |
) |
|
|
164,705 |
|
|
|
94,730 |
|
|
|
69,975 |
|
|
|
73.9 |
|
Amortization of deferred financing costs |
|
|
3,813 |
|
|
|
3,739 |
|
|
|
74 |
|
|
|
2.0 |
|
|
|
3,739 |
|
|
|
2,697 |
|
|
|
1,042 |
|
|
|
38.6 |
|
Expense on deferred compensation plans |
|
|
10,116 |
|
|
|
6,421 |
|
|
|
3,695 |
|
|
|
57.5 |
|
|
|
6,421 |
|
|
|
6,760 |
|
|
|
(339 |
) |
|
|
(5.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-property income |
|
$ |
356,239 |
|
|
$ |
348,515 |
|
|
$ |
7,724 |
|
|
|
2.2 |
% |
|
$ |
348,515 |
|
|
$ |
216,763 |
|
|
$ |
131,752 |
|
|
|
60.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property management expense, which represents regional supervision and accounting costs
related to property operations, increased $2.3 million for the year ended December 31, 2006 as
compared to 2005 and increased $4.2 million for 2005 as compared to 2004. The increases were
primarily due to salary and benefit expenses, including long-term incentive compensation and
amortization expense recorded for share awards. Additionally, increases in 2005 as compared to
2004 included the costs of additional regional supervision personnel and regional offices from the
Summit merger. Property management expenses were 3.1% of total property revenues for the years
ended December 31, 2006, 2005 and 2004.
Fee and asset management expense, which represents expenses related to third-party
construction projects and property management, increased $2.5 million for 2006 as compared to 2005
and increased $3.0 million for 2005 as compared to 2004. These increases were primarily due to
increases in costs and cost over-runs on third-party construction projects which totaled $7.0
million, $5.4 million and $2.7 million for the years ended December 31, 2006, 2005 and 2004,
respectively.
General and administrative expenses increased $12.7 million during the year ended December 31,
2006 as compared to 2005 and increased $6.3 million during the year ended December 31, 2005 as
compared to 2004, and were 5.8%, 4.1% and 4.1% of total revenues for the years ended December 31,
2006, 2005 and 2004, respectively. The increase in general and administrative expenses for the
year ended December 31, 2006 as compared to 2005 was primarily due to increases in salary and
benefit expenses, including long-term incentive compensation and amortization expense recorded for
share awards, acceleration of vesting of previously granted share awards and legal costs. During
2006, an aggregate of 76,542 share awards that otherwise would have vested from time to time over
the next five years became immediately exercisable. By accelerating the vesting of these share
awards, we recognized a one-time expense of approximately $4.2 million. The increase in general
and administrative expenses for the year ended December 31, 2005 as compared to 2004 was primarily
due to costs associated with pursuing potential transactions not consummated, increases in salary
and benefit expenses, including the addition of internal audit, information technology and
personnel associated with the Summit merger, and professional fees associated with Sarbanes-Oxley
Act of 2002 compliance requirements and information technology projects.
During the year ended December 31, 2005, we incurred transaction compensation and merger
expenses totaling $14.1 million related to the Summit merger. Merger expenses primarily related to
training and transitional employee costs.
Gross interest cost before interest capitalized to development properties increased $9.9
million for the year ended December 31, 2006 as compared to 2005 and increased $41.5 million for
the year ended December 31, 2004 as compared to 2005. The overall increase in interest expense
was due primarily to an increase in debt outstanding as a result of continued funding of the
development pipeline, increases in the effective interest rate associated with variable rate debt
and interest on notes acquired in the Summit merger. These increases were partially offset by the
repayment of debt associated with our equity offering in 2006. Interest capitalized increased $3.1
million for 2006 as compared to 2005 and increased $8.2 million for 2005 as compared to 2004. The
increase in interest capitalized was due to higher average balances in our development pipeline,
including the increase in development assets acquired in the Summit merger in 2005.
27
Depreciation and amortization and amortization of deferred financing costs decreased 3.6%
during the year ended December 31, 2006 as compared to 2005 and increased 72.9% during the year
ended December 31, 2005 as compared to 2004. These variances were due primarily to amortization of
the value of in-place leases acquired in connection with the merger with Summit of $32.3 million
during the year ended December 31, 2005, offset by additional depreciation on assets acquired,
depreciation charges on assets reclassified from discontinued operations to continuing operations,
and new development and capital improvements placed in service during the preceding year.
Expense on deferred compensation plans increased $3.7 million during the year ended December
31, 2006 as compared to 2005 and decreased $0.3 million during the year ended December 31, 2005 as
compared to 2004. The changes in expense primarily related to the performance of the assets held
in the deferred compensation plan for plan participants.
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
|
|
December 31, |
|
Change |
|
December 31, |
|
Change |
($ in thousands) |
|
2006 |
|
2005 |
|
$ |
|
% |
|
2005 |
|
2004 |
|
$ |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of properties,
including land |
|
$ |
97,452 |
|
|
$ |
132,914 |
|
|
$ |
(35,462 |
) |
|
|
(26.7 |
)% |
|
$ |
132,914 |
|
|
$ |
1,642 |
|
|
$ |
131,272 |
|
|
|
* |
% |
Equity in income of joint ventures |
|
|
5,156 |
|
|
|
10,049 |
|
|
|
(4,893 |
) |
|
|
(48.7 |
) |
|
|
10,049 |
|
|
|
356 |
|
|
|
9,693 |
|
|
|
* |
|
Distributions on perpetual
preferred units |
|
|
(7,000 |
) |
|
|
(7,028 |
) |
|
|
(28 |
) |
|
|
(0.4 |
) |
|
|
(7,028 |
) |
|
|
(10,461 |
) |
|
|
3,433 |
|
|
|
32.8 |
|
Original issuance costs on
redeemed perpetual preferred
units |
|
|
|
|
|
|
(365 |
) |
|
|
365 |
|
|
|
100.0 |
|
|
|
(365 |
) |
|
|
(745 |
) |
|
|
380 |
|
|
|
51.0 |
|
Income allocated to common units
and other minority interests |
|
|
(16,163 |
) |
|
|
(2,223 |
) |
|
|
(13,940 |
) |
|
|
(627.1 |
) |
|
|
(2,223 |
) |
|
|
(2,733 |
) |
|
|
510 |
|
|
|
18.7 |
|
|
|
|
* |
|
Not a meaningful percentage. |
Gain on sale of properties for the year ended December 31, 2006 included gains of $91.5
million from the partial sale of nine operating properties to an affiliated joint venture and $5.2
million from the partial sales of land to affiliated joint ventures. Also included in gain on sale
of properties for the year ended December 31, 2006 was $0.8 million from the sale of undeveloped
land to an unaffiliated third party. Gain on sale of properties for the year ended December 31,
2005 included a gain of $132.1 million from the partial sale of 12 operating communities to
affiliated joint ventures and $0.8 million from the sale of undeveloped land to an unaffiliated
third party. Gain on sale of properties for the year ended December 31, 2004 included gains of
$1.6 million from the sales of undeveloped land to unaffiliated third parties.
Equity in income of joint ventures decreased $4.9 million for the year ended December 31, 2006
as compared to 2005, and increased $9.7 million for the year December 31, 2005 as compared to 2004.
Changes from period to period are due to an increase in the number of properties and gains
recognized on the sale of assets held through joint ventures. We recognized $2.8 million of gains
on the sale of three properties held through a joint venture during the year ended December 31,
2006. During the year ended December 31, 2005, we recognized $11.2 million in gains on the sale of
three properties held in joint ventures. The gains recognized during the year ended December 31,
2005 were partially offset by losses recognized in one joint venture due to debt retirement costs
associated with the refinancing of debt totaling $2.0 million.
Distributions on perpetual preferred units decreased $3.4 million for the year ended December
31, 2005 as compared to 2004 as a result of the redemption of $53 million Series C preferred units
in September 2004 and January 2005. Original issuance costs of $0.4 million and $0.7 million were
expensed in connection with these redemptions in 2005 and 2004, respectively.
Income allocated to common units and other minority interests increased $13.9 million during
the year ended December 31, 2006 as compared to 2005 and decreased $0.5 million during the year
ended December 31, 2005 as compared to 2004. The increase in 2006 was due primarily to gains
recognized on the partial sale of eight properties held in Camden Operating, L.P. to a joint
venture during the year ended December 31, 2006. A portion of the gains recognized were allocated
to minority interest holders in Camden Operating, L.P.
28
Funds from Operations (FFO)
Management considers FFO to be an appropriate measure of the financial performance of an
equity REIT. The National Association of Real Estate Investment Trusts (NAREIT) currently
defines FFO as net income (computed in accordance with generally accepted accounting principles),
excluding gains (or losses) from depreciable operating property sales, plus real estate
depreciation and amortization, and after adjustments for unconsolidated partnerships and joint
ventures. Diluted FFO also assumes conversion of all dilutive convertible securities, including
convertible minority 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 excluding depreciation, FFO can help one compare the
operating performance of a companys real estate between periods or as compared to different
companies.
We believe in order to facilitate a clear understanding of our consolidated historical
operating results, FFO should be examined in conjunction with net income as presented in the
consolidated statements of operations and data included elsewhere in this report. FFO is not
defined by generally accepted accounting principles and should not be considered as an alternative
to net income as an indication of our operating performance. Additionally, FFO as disclosed by
other REITs may not be comparable to our calculation.
Reconciliations of net income to diluted FFO for the years ended December 31, 2006, 2005 and
2004 are as follows:
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2006 |
|
|
2005 |
|
|
2004 |
|
Funds from operations |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
232,846 |
|
|
$ |
199,086 |
|
|
$ |
41,341 |
|
Real estate depreciation, including discontinued operations |
|
|
157,233 |
|
|
|
168,777 |
|
|
|
104,339 |
|
Adjustments for unconsolidated joint ventures |
|
|
478 |
|
|
|
(6,867 |
) |
|
|
2,097 |
|
Gain on sale of properties, including discontinued operations |
|
|
(170,304 |
) |
|
|
(168,221 |
) |
|
|
(8,368 |
) |
Income allocated to common units, including discontinued operations |
|
|
17,537 |
|
|
|
2,515 |
|
|
|
4,260 |
|
|
|
|
|
|
|
|
|
|
|
Funds from operations diluted |
|
$ |
237,790 |
|
|
$ |
195,290 |
|
|
$ |
143,669 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares basic |
|
|
56,660 |
|
|
|
52,000 |
|
|
|
41,430 |
|
Incremental shares issuable from assumed conversion of: |
|
|
|
|
|
|
|
|
|
|
|
|
Common share options and awards granted |
|
|
725 |
|
|
|
483 |
|
|
|
434 |
|
Common units |
|
|
3,868 |
|
|
|
3,830 |
|
|
|
2,438 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares diluted |
|
|
61,253 |
|
|
|
56,313 |
|
|
|
44,302 |
|
|
|
|
|
|
|
|
|
|
|
Adjustments for unconsolidated joint ventures included in FFO for the years ended
December 31, 2006 and 2005 includes net gains totaling $2.8 million and $11.2 million,
respectively, from the sale of properties held in joint ventures. Included in the net gains
recognized during the years ended December 31, 2006 and 2005 are $0.5 million and $0.3 million,
respectively, in prepayment penalties associated with the repayment of mortgages associated with
the sold properties.
Liquidity and Capital Resources
We are committed to maintaining a strong balance sheet and preserving our financial
flexibility, which we believe enhances our ability to identify and capitalize on investment
opportunities as they become available. We intend to maintain what management believes is a
conservative capital structure by:
|
|
|
using what management believes to be a prudent combination of debt and common and
preferred equity; |
|
|
|
|
extending and sequencing the maturity dates of our debt where possible; |
|
|
|
|
managing interest rate exposure using what management believes to be prudent levels
of fixed and floating rate debt; |
|
|
|
|
borrowing on an unsecured basis in order to maintain a substantial number of
unencumbered assets; and |
|
|
|
|
maintaining conservative coverage ratios. |
29
Our interest expense coverage ratio, net of capitalized interest, was 2.9, 2.8 and 3.0 times
for the years ended December 31, 2006, 2005 and 2004, respectively. Interest expense coverage
ratio is derived by dividing interest expense for the period into the sum of income from continuing
operations before gain on sale of properties, equity in income (loss) of joint ventures and
minority interests, depreciation, amortization, interest expense and income from discontinued
operations. At December 31, 2006, 2005 and 2004, 80.5%, 78.8% and 88.6%, respectively, of our
properties (based on invested capital) were unencumbered. Our weighted average maturity of debt,
excluding our line of credit, was 4.7 years at December 31, 2006.
As a result of the significant cash flow generated by our operations, the availability under
our unsecured credit facility and other short-term borrowings, proceeds from dispositions of
properties and other investments and access to the capital markets by issuing securities under our
automatic shelf registration statement, we believe our liquidity and financial condition are
sufficient to meet all of our reasonably anticipated cash flow needs during 2007 including:
|
|
|
normal recurring operating expenses; |
|
|
|
|
current debt service requirements; |
|
|
|
|
recurring capital expenditures; |
|
|
|
|
initial funding of property developments, acquisitions and notes receivable; and |
|
|
|
|
the minimum dividend payments required to maintain our REIT qualification under the
Internal Revenue Code of 1986. |
One of our principal long-term liquidity requirements includes the repayment of maturing debt,
including borrowings under our unsecured line of credit used to fund development and acquisition
activities. For unsecured notes, we anticipate that no significant portion of the principal of
those notes will be repaid prior to maturity. Additionally, as of December 31, 2006, we had
several development projects in various stages of construction, for which a total estimated cost of
$208.6 million remained to be funded. We intend to meet our long-term liquidity requirements
through the use of debt and equity offerings under our automatic shelf registration statement,
draws on our unsecured credit facility and property dispositions.
In December 2006, we announced our Board of Trust Managers had declared a dividend
distribution of $0.66 per share to holders of record as of December 22, 2006 of our common shares.
The dividend was subsequently paid on January 17, 2007. We paid equivalent amounts per unit to
holders of the common operating partnership units. This distribution to common shareholders and
holders of common operating partnership units equates to an annualized dividend rate of $2.64 per
share or unit.
Net cash provided by operating activities increased to $231.6 million during the year ended
December 31, 2006 from $200.8 million for the same period in 2005. The increases were primarily
due to additional property revenues from recently acquired properties and growth in property
revenues from our stabilized communities. This increase was partially offset by the loss of
property revenues due to sales of properties and other transactional expenses.
Cash flows used in investing activities during the year ended December 31, 2006 totaled $52.1
million, as compared to $207.6 million during the year ended December 31, 2005. We incurred $463.1
million in property development, acquisition and capital improvement costs during 2006 as compared
to $301.6 million during 2005. During the year ended December 31, 2006, we paid $8.2 million of
severance benefits associated with the Summit merger. Notes receivable affiliates increased
$41.6 million as five mezzanine loans were provided to joint ventures formed during the year ended
December 31, 2006. Proceeds received from sales of properties and technology investments, sales of
assets to joint ventures and joint venture distributions representing returns of investments
totaled $445.2 million for the year ended December 31, 2006. Investing activities for the year
ended December 31, 2005 primarily consisted of transactions associated with the Summit merger and
expenditures related to real estate assets as we paid $509.8 million in connection with the Summit
merger, either as consideration paid at acquisition or for merger liabilities assumed. These
payments were ultimately funded using a portion of the proceeds received from the sales of
properties and technology investments and distributions from joint ventures representing returns of
investments, which totaled an aggregate of $555.7 million.
Net cash used in financing activities totaled $180.0 million for the year ended December 31,
2006, primarily as a result of the repayment of our line of credit of $45.0 million, payments of
$227.3 million related to the payoff of senior unsecured notes and one mortgage note and distributions
to shareholders and minority interest holders
30
of $166.2 million. The cash used in financing
activities was partially offset by $254.9 million of proceeds from the issuance of 3.6 million
common shares. Net cash provided by financing activities for the year ended December 31, 2005 was
$6.0 million, primarily due to a net increase in our unsecured line of credit of $195.0 million and
proceeds from notes payable of $248.4 million, partially offset by the repayment of a secured
credit facility assumed in our merger with Summit of $188.5 million, the repayment of $79.8 million
in notes payable and distributions to shareholders and minority interest holders and redemption of
preferred units of $165.8 million.
Financial Flexibility
In January 2005, we entered into a credit agreement which increased our unsecured credit
facility to $600 million, with the ability to further increase it up to $750 million. This $600
million unsecured line of credit was originally scheduled to mature in January 2008. In January
2006, we entered into an amendment to our credit agreement to extend the maturity by two years to
January 2010 and to amend certain covenants. The scheduled interest rate is based on spreads over
the London Interbank Offered Rate (LIBOR) or the Prime Rate. The scheduled interest rate spreads
are subject to change as our credit ratings change. Advances under the line of credit may be
priced at the scheduled rates, or we may enter into bid rate loans with participating banks at
rates below the scheduled rates. These bid rate loans have terms of six months or less and may not
exceed the lesser of $300 million or the remaining amount available under the line of credit. The
line of credit is subject to customary financial covenants and limitations, all of which we were in
compliance with at December 31, 2006.
Our line of credit provides us with the ability to issue up to $100 million in letters of
credit. While our issuance of letters of credit does not increase our borrowings outstanding under
our line, it does reduce the amount available. At December 31, 2006, we had outstanding letters of
credit totaling $31.1 million, and had $362.9 million available, under our unsecured line of
credit.
As an alternative to our unsecured line of credit, we from time to time borrow using
competitively bid unsecured short-term notes with lenders who may or may not be a part of the
unsecured line of credit bank group. Such borrowings vary in term and pricing and are typically
priced at interest rates below those available under the unsecured line of credit.
During 2006 and 2005, we repaid $200.0 million and $25.0 million, respectively, of maturing
unsecured notes with an effective interest rate of 6.8% and 3.6%, respectively. We also repaid one
conventional mortgage note during 2006 totaling $13.1 million, which had an interest rate of 7.6%.
Additionally, we repaid six conventional mortgage notes during 2005 totaling $40.8 million which
had a weighted average interest rate of 7.3%. We repaid all notes payable using proceeds available
under our unsecured line of credit.
In connection with our partial sale of nine apartment communities to a joint venture during
2006, as discussed in Note 8 to the consolidated financial statements, three variable rate
tax-exempt mortgage notes totaling $30.5 million were assumed by the joint venture.
At December 31, 2006 and 2005, the weighted average interest rate on our floating rate debt,
which includes our unsecured line of credit, was 5.4% and 4.5%, respectively.
In June 2006, we issued 3.6 million common shares at $71.25 per share in a public equity
offering. We used the net proceeds of $254.9 million to reduce indebtedness on our unsecured line
of credit and for general corporate purposes.
We filed an automatic shelf registration statement with the Securities and Exchange Commission
during 2006 that became effective upon filing. We may use the shelf registration statement to
offer, from time to time, common shares, preferred shares, debt securities or warrants. Our
declaration of trust provides that we may issue up to 110,000,000 shares of beneficial interest,
consisting of 100,000,000 common shares and 10,000,000 preferred shares. As of December 31, 2006,
we had 65,005,959 common shares outstanding under our declaration of trust.
31
Contractual Obligations
The following table summarizes our known contractual obligations as of December 31, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
|
Total |
|
|
2007 |
|
|
2008 |
|
|
2009 |
|
|
2010 |
|
|
2011 |
|
|
Thereafter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt maturities |
|
$ |
2,331.0 |
|
|
$ |
219.9 |
|
|
$ |
200.7 |
|
|
$ |
198.2 |
|
|
$ |
658.8 |
|
|
$ |
248.4 |
|
|
$ |
805.0 |
|
Interest payments (1) |
|
|
569.8 |
|
|
|
119.2 |
|
|
|
110.7 |
|
|
|
97.4 |
|
|
|
69.0 |
|
|
|
46.1 |
|
|
|
127.4 |
|
Non-cancelable operating lease payments |
|
|
15.3 |
|
|
|
2.5 |
|
|
|
2.3 |
|
|
|
2.1 |
|
|
|
1.9 |
|
|
|
1.5 |
|
|
|
5.0 |
|
Postretirement benefit obligations |
|
|
2.2 |
|
|
|
0.2 |
|
|
|
0.2 |
|
|
|
0.2 |
|
|
|
0.2 |
|
|
|
0.2 |
|
|
|
1.2 |
|
Construction contracts |
|
|
156.5 |
|
|
|
127.4 |
|
|
|
29.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,074.8 |
|
|
$ |
469.2 |
|
|
$ |
343.0 |
|
|
$ |
297.9 |
|
|
$ |
729.9 |
|
|
$ |
296.2 |
|
|
$ |
938.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes contractual interest payments for our line of credit, senior unsecured notes,
medium-term notes and secured notes. The interest payments on certain secured notes with floating
interest rates and our line of credit were calculated based on the interest rates in effect as of
December 31, 2006. |
The joint ventures in which we have an interest have been funded with secured,
third-party debt. We are not committed to any additional funding on third-party debt in relation
to our joint ventures. We are committed to funding an additional $9.0 million under mezzanine loans
provided to joint ventures. We have guaranteed our proportionate interest on construction loans in
three of our development joint ventures. See further discussion of our investments in various
joint ventures in Note 8 to our Consolidated Financial Statements.
Inflation
Substantially all of our apartment leases are for a term generally ranging from 6 to 13
months. In an inflationary environment, we may realize increased rents at the commencement of new
leases or upon the renewal of existing leases. The short-term nature of our leases generally
minimizes our risk from the adverse affects of inflation.
Critical Accounting Policies
Critical accounting policies are those most important to the presentation of a companys
financial condition and results, and require managements most difficult, subjective or complex
judgments, often as a result of the need to make estimates about the effect of matters that are
inherently uncertain. We follow financial accounting and reporting policies in accordance with
generally accepted accounting principles in the United States of America.
Income recognition. Our rental and other property income is recorded when due from residents
and is recognized monthly as it is earned. Other property income consists primarily of utility
rebillings, and administrative, application and other transactional fees charged to our residents.
Retail lease income is recorded on a straight-line basis over the lease term, including any
construction period if we are determined not to be the owner of the tenant improvements. Interest,
fee and asset management and all other sources of income are recognized as earned.
Capital expenditures. We capitalize renovation and improvement costs we believe extend the
economic lives and enhance the earnings of the related assets. Capital expenditures, including
carpet, appliances and HVAC unit replacements, subsequent to initial construction are capitalized
and depreciated over their estimated useful lives, which range from 3 to 20 years.
Accounting for Joint Ventures. We make co-investments with unrelated third parties and are
required to determine whether to consolidate or use the equity method of accounting for these
ventures. FASB Interpretation No. 46R, Consolidation of Variable Interest Entities (as revised)
and Emerging Issues Task Force No. 04-05, Determining Whether a General Partner, or the General
Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners
Have Certain Rights are two of the primary sources of accounting guidance in this area.
Appropriate application of these relatively complex rules requires substantial management judgment.
Asset impairment. Long-lived assets are reviewed for impairment whenever events or changes in
circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of the carrying amount of an asset to
estimated undiscounted future cash
32
flows expected to be generated by the asset. If the carrying amount of an asset exceeds its
estimated future cash flows and costs to sell, an impairment charge equal to the excess is
recognized.
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. Expenditures directly related to the development,
acquisition and improvement of real estate assets, excluding internal costs relating to
acquisitions of operating properties, are capitalized at cost as land, buildings and improvements.
Indirect development costs, including salaries and benefits and other related costs attributable to
the development of properties, are also capitalized. All construction and carrying costs are
capitalized and reported on the balance sheet in properties under development until the apartment
homes are substantially completed. Upon substantial completion of the apartment homes, the total
cost for the apartment homes and the associated land is transferred to buildings and improvements
and land, respectively, and the assets are depreciated over their estimated useful lives using the
straight-line method of depreciation.
Where possible, we stage our construction to allow leasing and occupancy during the
construction period, which we believe minimizes the duration of the lease-up period following
completion of construction. Our accounting policy related to properties in the development and
leasing phase is all operating expenses associated with completed apartment homes are expensed.
Allocations of Purchase Price. Upon the acquisition of real estate, we allocate the purchase
price between tangible and intangible assets, which includes land, buildings, furniture and
fixtures, the value of in-place leases, including above and below market leases, and acquired
liabilities. When allocating the purchase price to acquired properties, we allocated costs to the
estimated intangible value of in-place leases and above or below market leases and to the estimated
fair value of furniture and fixtures, land and buildings on a value determined by assuming the
property was vacant by applying methods similar to those used by independent appraisers of
income-producing property. Depreciation and amortization is computed on a straight-line basis over
the remaining useful lives of the related 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. Estimates of fair value of acquired debt are based upon interest rates available
for the issuance of debt with similar terms and remaining maturities.
Use of Estimates. The preparation of our financial statements in conformity with generally
accepted accounting principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial statements, results of
operations during the reporting periods and related disclosures. Our more significant estimates
relate to determining the allocation of the purchase price of our acquisitions, estimates
supporting our impairment analysis related to the carrying value of our real estate assets,
estimates of the useful lives of our assets, reserves related to co-insurance requirements under
our property, general liability and employee benefit insurance programs and estimates of expected
losses of variable interest entities. Future events rarely develop exactly as forecast, and the
best estimates routinely require adjustment. Also, see Note 2 to our consolidated financial
statements, Summary of Significant Accounting Policies.
New Accounting Standards
In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based Payment (SFAS
No. 123(R))requiring the compensation cost relating to share-based payments be recognized over
their vesting periods in the income statement based on their estimated fair values. In April 2005,
the SEC issued Staff Accounting Bulletin No. 107, Shared-Based Payment providing for a phased-in
implementation process for SFAS No. 123(R). SFAS No. 123(R) is effective for all public entities
in the first annual reporting period beginning after June 15, 2005. We adopted SFAS No. 123(R) on
January 1, 2006 using the modified prospective method. The impact of adopting this pronouncement is
discussed in Note 12 Share-based Compensation.
In May 2005, the FASB issued SFAS No. 154 Accounting Changes and Error Corrections, a
replacement of APB Opinion No. 20 and FASB Statement No. 3 (SFAS No. 154). This pronouncement
applies to all voluntary changes in accounting principle and revises the requirements for
accounting for and reporting a change in accounting principle. SFAS No. 154 requires retrospective
application to prior periods financial statements of a voluntary change in accounting principle,
unless it is impracticable to do so. This pronouncement also requires changes to the method of
depreciation, amortization, or depletion for long-lived, non-financial assets be accounted for as a
change in accounting estimate that is effected by a change in accounting principle. SFAS No. 154
is effective for accounting changes and corrections of errors made in fiscal years beginning after
December 15, 2005.
33
It does not change the transition provisions of any existing accounting pronouncements, including
those which are in a transition phase as of the effective date. The adoption of SFAS No. 154 did
not have a material impact on our financial position, results of operations or cash flows.
In June 2005, the FASB issued Emerging Issues Task Force (EITF) Issue No. 04-5, Determining
Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or
Similar Entity When the Limited Partners Have Certain Rights. EITF Issue No. 04-5 provides a
framework for determining whether a general partner controls, and should consolidate, a limited
partnership or a similar entity. EITF Issue No. 04-5 was effective after June 29, 2005, for all
newly formed limited partnerships and for any pre-existing limited partnerships that modify their
partnership agreements after that date. General partners of all other limited partnerships are
required to apply the consensus no later than the beginning of the first reporting period in fiscal
years beginning after December 15, 2005. The adoption of EITF Issue No. 04-5 did not have a
material impact on our financial position, results of operations or cash flows.
In June 2005, the FASB issued FASB Staff Position (FSP) 78-9-1, Interaction of AICPA
Statement of Position 78-9 and EITF Issue No. 04-5. The EITF acknowledged the consensus in EITF
Issue No. 04-5 conflicted with certain aspects of Statement of Position (SOP) 78-9, Accounting
for Investments in Real Estate Ventures. The EITF agreed with the assessment of whether a general
partner, or the general partners as a group, controls a limited partnership should be consistent
for all limited partnerships, irrespective of the industry within which the limited partnership
operates. Accordingly, the guidance in SOP 78-9 was amended in FSP 78-9-1 to be consistent with
the guidance in EITF Issue No. 04-5. The effective dates for this FSP are the same as those
mentioned above in EITF Issue No. 04-5. The adoption of FSP 78-9-1 did not have a material impact
on our financial position, results of operations or cash flows.
In April 2006, the FASB issued FSP FASB Interpretation (FIN) 46(R)-6, Determining the
Variability to Be Considered in Applying FASB Interpretation No. 46(R). FIN 46(R)-6 addresses how
a reporting enterprise should determine variability associated with a variable interest entity or
variable interests in an entity when applying the provisions of FIN 46(R) and is effective for
reporting periods beginning after June 15, 2006. We will evaluate the impact of FIN 46(R)-6 at the
time any reconsideration event occurs, as defined by the provisions of FIN 46(R), and for any new
entities with which we become involved in future periods.
In June 2006, the FASB issued FIN 48, Accounting for Uncertainty in Income Taxes an
Interpretation of FASB Statement No. 109, which clarifies the accounting for uncertainty in tax
positions. FIN 48 requires we recognize in our financial statements the impact of a tax position,
if the position is more likely than not of being sustained on audit, based on the technical merits
of the position. FIN 48 is effective for fiscal years beginning after December 15, 2006. We have
assessed the potential impact of FIN 48 and our adoption will not have a material impact on our
financial position, results of operations or cash flows.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157
defines fair value, establishes a framework for measuring fair value in GAAP and expands
disclosures about fair value measurements. The statement does not require new fair value
measurements, but is applied to the extent other accounting pronouncements require or permit fair
value measurements. The statement emphasizes fair value as a market-based measurement which should
be determined based on assumptions market participants would use in pricing an asset or liability.
We will be required to disclose the extent to which fair value is used to measure assets and
liabilities, the inputs used to develop the measurements, and the effect of certain of the
measurements on earnings (or changes in net assets) for the period. SFAS No. 157 is effective for
fiscal years beginning after November 15, 2007. We do not anticipate the adoption of this
statement will have a material impact on our financial position, results of operations or cash
flows.
In September 2006, the FASB issued SFAS No. 158, "Employers Accounting for Defined Benefit
Pension and Other Postretirement Plansan amendment of FASB Statements No. 87, 88, 106, and
132(R), which requires an employer to recognize the over-funded or under-funded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in
its statement of financial position and to recognize changes in funded status in the year in which
the changes occur through comprehensive income of a business entity. SFAS No. 158 also requires an
employer to measure the funded status of a plan as of the date of its year-end statement of
financial position, with limited exceptions. This statement is effective for fiscal years ending
after December 15, 2006. Our adoption of this statement did not have a material impact on our
financial position, results of operations or cash flows.
34
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Our primary market risk exposure is interest rate risk. The table below provides information
about our liabilities sensitive to changes in interest rates as of December 31, 2006 and 2005.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2006 |
|
December 31, 2005 |
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
Average |
|
Weighted |
|
|
|
|
|
|
|
|
|
Average |
|
Weighted |
|
|
|
|
|
|
|
|
Maturity |
|
Average |
|
|
|
|
|
|
|
|
|
Maturity |
|
Average |
|
|
|
|
Amount |
|
(in years) |
|
Interest |
|
% Of |
|
Amount |
|
(in years) |
|
Interest |
|
% Of |
|
|
(in millions) |
|
(1) |
|
Rate |
|
Total |
|
(in millions) |
|
(1) |
|
Rate |
|
Total |
Fixed rate debt |
|
$ |
2,059.6 |
|
|
|
4.3 |
|
|
|
5.4 |
% |
|
|
88.4 |
% |
|
$ |
2,285.2 |
|
|
|
4.9 |
|
|
|
5.5 |
% |
|
|
86.8 |
% |
Variable rate debt |
|
|
271.4 |
|
|
|
18.7 |
|
|
|
5.4 |
|
|
|
11.6 |
|
|
|
347.9 |
|
|
|
21.8 |
|
|
|
4.5 |
|
|
|
13.2 |
|
|
|
|
(1) |
|
Excludes balances outstanding under our unsecured line of credit |
We use variable rate indebtedness available under our revolving credit facility to
initially fund acquisitions and our development pipeline. To the extent we incur additional
variable rate indebtedness, our exposure to increases in interest rates in an inflationary period
would increase. We believe such increases in interest expense as a result of inflation would not
significantly impact our distributable cash flow.
Item 8. Financial Statements and Supplementary Data
Our response to this item is included in a separate section at the end of this report
beginning on page F-1.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of disclosure controls and procedures. We carried out an evaluation under the
supervision and with the participation of our management, including the Chief Executive Officer and
Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the
end of the period covered by this report pursuant to Securities Exchange Act (Exchange Act) Rules
13a-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded the disclosure controls and procedures as of the end of the period covered by this report
are effective to ensure information required to be disclosed by us in our Exchange Act filings is
recorded, processed, summarized and reported within the periods specified in the Securities and
Exchange Commissions rules and forms.
Changes in internal controls. There were no changes in our internal control over financial
reporting occurring during our most recent fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.
35
Managements Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over
financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and
15d-15(f) promulgated under the Securities Exchange Act of 1934 as follows:
A process designed by, or under the supervision of, the companys principal executive and
principal financial officers, or persons performing similar functions, and effected by the
companys board of trust managers, management, and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles and includes those
policies and procedures that:
|
|
|
Pertain to the maintenance of records in reasonable detail that accurately and fairly reflect
the transactions and dispositions of the assets of the company; |
|
|
|
|
Provide reasonable assurance transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and |
|
|
|
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the companys assets that could have a material effect
on the financial statements. |
Management assessed the effectiveness of our internal control over financial reporting as of
December 31, 2006. In making this assessment, management used the criteria set forth by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control-Integrated Framework.
Based on our assessment, management concluded our internal control over financial reporting is
effective as of December 31, 2006.
Deloitte & Touche LLP, an independent registered public accounting firm, has issued an
attestation report on managements assessment of the effectiveness of our internal control over
financial reporting as of December 31, 2006. Deloitte & Touche LLPs attestation report regarding
the effectiveness of managements assessment of internal controls over financial reporting is
included herein.
36
Report of Independent Registered Public Accounting Firm
To the Board of Trust Managers and the Shareholders of Camden Property Trust
We have audited managements assessment, included in the accompanying Managements Report on
Internal Control over Financial Reporting, that Camden Property Trust and subsidiaries (the
Trust) maintained effective internal control over financial reporting as of December 31, 2006,
based on criteria established in Internal ControlIntegrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. The Trusts management is responsible for
maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting. Our responsibility is to express an
opinion on managements assessment and an opinion on the effectiveness of the Trusts internal
control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal
control over financial reporting, evaluating managements assessment, testing and evaluating the
design and operating effectiveness of internal control, and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis
for our opinions.
A companys internal control over financial reporting is a process designed by, or under the
supervision of, the companys principal executive and principal financial officers, or persons
performing similar functions, and effected by the companys board of trust managers, management,
and other personnel to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A companys internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of
the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and trust managers of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including
the possibility of collusion or improper management override of controls, material misstatements
due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any
evaluation of the effectiveness of the internal control over financial reporting to future periods
are subject to the risk that the controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, managements assessment that the Trust maintained effective internal control
over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based
on the criteria established in Internal ControlIntegrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Trust maintained, in
all material respects, effective internal control over financial reporting as of December 31, 2006,
based on the criteria established in Internal ControlIntegrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the consolidated financial statements and financial statement
schedules as of and for the year ended December 31, 2006 of the Trust and our reports dated
February 28, 2007 express unqualified opinions on those financial statements and financial
statement schedules.
DELOITTE & TOUCHE LLP
Houston, Texas
February 28, 2007
37
Item 9B. Other Information
None.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Information with respect to this Item 10 is incorporated by reference from our Proxy
Statement, which we intend to file on or before March 28, 2007 in connection with the Annual
Meeting of Shareholders to be held May 1, 2007.
Item 11. Executive Compensation
Information with respect to this Item 11 is incorporated by reference from our Proxy
Statement, which we intend to file on or before March 28, 2007 in connection with the Annual
Meeting of Shareholders to be held May 1, 2007.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information with respect to this Item 12 is incorporated by reference from our Proxy
Statement, which we intend to file on or before March 28, 2007 in connection with the Annual
Meeting of Shareholders to be held May 1, 2007.
Equity Compensation Plan Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities |
|
|
|
|
|
|
|
|
|
|
|
remaining available for |
|
|
|
Number of securities to be |
|
|
Weighted-average |
|
|
future issuance under |
|
|
|
issued upon exercise of |
|
|
exercise price of |
|
|
equity compensation plans |
|
|
|
outstanding options, |
|
|
outstanding options, |
|
|
(excluding securities |
|
|
|
warrants and rights |
|
|
warrants and rights |
|
|
reflected in column (a)) |
|
Plan Category |
|
(a) |
|
|
(b) |
|
|
(c) |
|
Equity compensation
plans approved by
security holders |
|
|
3,452,711 |
|
|
$ |
38.25 |
|
|
|
3,218,685 |
|
Equity compensation
plans not approved
by security holders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
3,452,711 |
|
|
$ |
38.25 |
|
|
|
3,218,685 |
|
|
|
|
|
|
|
|
|
|
|
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information with respect to this Item 13 is incorporated herein by reference from our Proxy
Statement, which we intend to file on or before March 28, 2007 in connection with the Annual
Meeting of Shareholders to be held May 1, 2007.
Item 14. Principal Accounting Fees and Services
Information with respect to this Item 14 is incorporated herein by reference from our Proxy
Statement, which we intend to file on or before March 28, 2007 in connection with the Annual
Meeting of Shareholders to be held May 1, 2007.
38
PART IV
Item 15. Exhibits and Financial Statement Schedules
The following documents are filed as part of this report:
(a) |
|
(1) Financial Statements: |
|
(2) |
|
Financial Statement Schedules: |
All other schedules have been omitted since the required information is presented in the
financial statements and the related notes or is not applicable.
The following exhibits are filed as part of or incorporated by reference into this report:
|
|
|
|
|
Exhibit |
|
|
|
Filed Herewith or Incorporated Herein |
No. |
|
Description |
|
by Reference (1) |
2.1
|
|
Agreement and Plan of Merger, dated October 4, 2004, among
Camden Property Trust, Camden Summit, Inc. and Summit
Properties Inc.
|
|
Current Report on Form 8-K filed on
October 5, 2004 |
|
|
|
|
|
2.2
|
|
Amendment No. 1 to Agreement and Plan of Merger, dated
October 6, 2004, among Camden Property Trust, Camden Summit,
Inc. and Summit Properties Inc.
|
|
Exhibit 2.1 to Form 8-K filed on
October 6, 2004 |
|
|
|
|
|
2.3
|
|
Amendment No. 2 to Agreement and Plan of Merger, dated
January 24, 2005, among Camden Property Trust, Camden
Summit, Inc. and Summit Properties Inc.
|
|
Exhibit 2.1 to Form 8-K filed on
January 25, 2005 |
|
|
|
|
|
3.1
|
|
Amended and Restated Declaration of Trust of Camden Property
Trust
|
|
Exhibit 3.1 to Form 10-K for the
year ended December 31, 1993 |
|
|
|
|
|
3.2
|
|
Amendment to the Amended and Restated Declaration of Trust
of Camden Property Trust
|
|
Exhibit 3.1 to Form 10-Q for the
quarter ended June 30, 1997 |
|
|
|
|
|
3.3
|
|
Second Amended and Restated Bylaws of Camden Property Trust
|
|
Exhibit 3.3 to Form 10-K for the
year ended December 31, 1997 |
|
|
|
|
|
3.4
|
|
Amendment to Second Amended and Restated Bylaws of Camden
Property Trust
|
|
Exhibit 99.2 to Form 8-K filed on
May 4, 2006 |
|
|
|
|
|
4.1
|
|
Specimen certificate for Common Shares of Beneficial Interest
|
|
Form S-11 filed on September 15,
1993 (Registration No. 33-68736) |
39
|
|
|
|
|
Exhibit |
|
|
|
Filed Herewith or Incorporated Herein |
No. |
|
Description |
|
by Reference (1) |
4.2
|
|
Indenture dated as of February 15, 1996 between
Camden Property Trust and the U.S. Trust Company
of Texas, N.A., as Trustee
|
|
Exhibit 4.1 to Form
8-K filed on
February 15, 1996 |
|
|
|
|
|
4.3
|
|
First Supplemental Indenture dated as of February
15, 1996 between Camden Property Trust and U.S.
Trust Company of Texas, N.A., as Trustee
|
|
Exhibit 4.2 to Form
8-K filed on
February 15, 1996 |
|
|
|
|
|
4.4
|
|
Form of Camden Property Trust 7% Notes due 2006
|
|
Exhibit 4.3 to Form
8-K filed on
December 2, 1996 |
|
|
|
|
|
4.5
|
|
Form of Indenture for Senior Debt Securities
dated as of February 11, 2003 between Camden
Property Trust and SunTrust Bank, as Trustee
|
|
Exhibit 4.1 to Form
S-3 filed on
February 12, 2003
(Registration No.
333-103119) |
|
|
|
|
|
4.6
|
|
Registration Rights Agreement, dated as of
February 23, 1999, between Camden Property Trust
and the unitholders named therein
|
|
Exhibit 99.3 to
Form 8-K filed on
March 10, 1999 |
|
|
|
|
|
4.7
|
|
Form of Amendment to Registration Rights
Agreement, dated as of December 1, 2003, between
Camden Property Trust and the unitholders named
therein
|
|
Exhibit 4.8 to Form
10-K for the year
ended December 31,
2003 |
|
|
|
|
|
4.8
|
|
Form of Registration Rights Agreement between
Camden Property Trust and the holders named
therein
|
|
Form S-4 filed on
November 24, 2004
(Registration No.
333-120733) |
|
|
|
|
|
4.9
|
|
Form of Statement of Designation of Series B
Cumulative Redeemable Preferred Shares of
Beneficial Interest
|
|
Exhibit 4.1 to Form
8-K filed on March
10, 1999 |
|
|
|
|
|
4.10
|
|
Form of Amendment to Statement of Designation of
Series B Cumulative Redeemable Preferred Shares
of Beneficial Interest, effective as of December
31, 2003
|
|
Exhibit 4.10 to
Form 10-K for the
year ended December
31, 2003 |
|
|
|
|
|
4.11
|
|
Form of Camden Property Trust 7% Note due 2006
|
|
Exhibit 4.3 to Form
8-K filed on
February 20, 2001 |
|
|
|
|
|
4.12
|
|
Form of Camden Property Trust 7.625% Note due 2011
|
|
Exhibit 4.4 to Form
8-K filed on
February 20, 2001 |
|
|
|
|
|
4.13
|
|
Form of Camden Property Trust 6.75% Note due 2010
|
|
Exhibit 4.3 to Form
8-K filed on
September 17, 2001 |
|
|
|
|
|
4.14
|
|
Form of Camden Property Trust 5.875% Note due 2007
|
|
Exhibit 4.3 to Form
8-K filed on June
4, 2002 |
|
|
|
|
|
4.15
|
|
Form of Camden Property Trust 5.875% Note due 2012
|
|
Exhibit 4.3 to Form
8-K filed on
November 25, 2002 |
|
|
|
|
|
4.16
|
|
Form of Camden Property Trust 5.375% Note due 2013
|
|
Exhibit 4.2 to Form
8-K filed on
December 9, 2003 |
|
|
|
|
|
4.17
|
|
Form of Camden Property Trust 4.70% Note due 2009
|
|
Exhibit 4.2 to Form
8-K filed on July
12, 2004 |
|
|
|
|
|
4.18
|
|
Form of Camden Property Trust 4.375% Note due 2010
|
|
Exhibit 4.2 to Form
8-K filed on
December 20, 2004 |
|
|
|
|
|
4.19
|
|
Form of Camden Property Trust 5.00% Note due 2015
|
|
Exhibit 4.2 to Form
8-K filed on June
7, 2005 |
|
|
|
|
|
4.20
|
|
Indenture dated as of August 7, 1997 between
Camden Summit Partnership, L.P. (f/k/a Summit
Properties Partnership, L.P.) and First Union
National Bank
|
|
Exhibit 4.1 to
Camden Summit
Partnership, L.P.s
Form 8-K filed on
August 11, 1997
(File No.
000-22411) |
40
|
|
|
|
|
Exhibit |
|
|
|
Filed Herewith or Incorporated Herein |
No. |
|
Description |
|
by Reference (1) |
4.21
|
|
Supplemental Indenture No. 1, dated as of August 12,
1997, between Camden Summit Partnership, L.P. (f/k/a
Summit Properties Partnership, L.P.) and First Union
National Bank
|
|
Exhibit 4.1 to
Camden Summit
Partnership, L.P.s
Form 8-K/A-1 filed
on August 18, 1997
(File No.
000-22411) |
|
|
|
|
|
4.22
|
|
Supplemental Indenture No. 2, dated as of December 17,
1997, between Camden Summit Partnership, L.P. (f/k/a
Summit Properties Partnership, L.P.) and First Union
National Bank
|
|
Exhibit 4.1 to
Camden Summit
Partnership, L.P.s
Form 8-K/A-1 filed
on December 17,
1997 (File No.
000-22411) |
|
|
|
|
|
4.23
|
|
Supplemental Indenture No. 3, dated as of May 29,
1998, between Camden Summit Partnership, L.P. (f/k/a
Summit Properties Partnership, L.P.) and First Union
National Bank
|
|
Exhibit 4.2 to
Camden Summit
Partnership, L.P.s
Form 8-K filed on
June 2, 1998 (File
No. 000-22411) |
|
|
|
|
|
4.24
|
|
Supplemental Indenture No. 4, dated as of April 20,
2000, between Camden Summit Partnership, L.P. (f/k/a
Summit Properties Partnership, L.P.) and First Union
National Bank
|
|
Exhibit 4.2 to
Camden Summit
Partnership, L.P.s
Form 8-K filed on
April 28, 2000
(File No.
000-22411) |
|
|
|
|
|
4.25
|
|
Supplemental Indenture No. 5, dated as of June 21,
2005, among Camden Summit Partnership, L.P., Camden
Property Trust and Wachovia Bank, N.A.
|
|
Exhibit 99.1 to
Form 8-K filed on
June 23, 2005 |
|
|
|
|
|
4.26
|
|
Form of Camden Summit Partnership, L.P. (f/k/a Summit
Properties Partnership, L.P.) 7.59% Medium-Term Note
due 2009
|
|
Exhibit 4.1 to
Camden Summit
Partnership, L.P.s
Form 10-Q for the
quarter ended March
31, 1999 (File No.
000-22411) |
|
|
|
|
|
4.27
|
|
Form of Camden Summit Partnership, L.P. (f/k/a Summit
Properties Partnership, L.P.) 8.50% Medium-Term Note
due 2010
|
|
Exhibit 10.2 to
Summit Property
Inc.s Form 10-Q
for the quarter
ended September 30,
2000 (File No.
001-12792) |
|
|
|
|
|
4.28
|
|
Form of Camden Summit Partnership, L.P. (f/k/a Summit
Properties Partnership, L.P.) 8.037% Medium-Term Note
due 2005
|
|
Exhibit 4.2.9 to
Summit Property
Inc.s Form 10-K
for the year ended
December 31, 2000
(File No.
001-12792) |
|
|
|
|
|
4.29
|
|
Form of Camden Summit Partnership, L.P. (f/k/a Summit
Properties Partnership, L.P.) 7.04% Medium-Term Note
due 2006
|
|
Exhibit 10.2 to
Summit Property
Inc.s Form 10-Q
for the quarter
ended June 30, 2001
(File No.
001-12792) |
|
|
|
|
|
4.30
|
|
Form of Camden Summit Partnership, L.P. (f/k/a Summit
Properties Partnership, L.P.) 7.703% Medium-Term Note
due 2011
|
|
Exhibit 10.3 to
Summit Property
Inc.s Form 10-Q
for the quarter
ended June 30, 2001
(File No.
001-12792) |
|
|
|
|
|
10.1
|
|
Form of Indemnification Agreement between Camden
Property Trust and certain of its trust managers and
executive officers
|
|
Form S-11 filed on
July 9, 1993
(Registration No.
33-63588) |
|
|
|
|
|
10.2
|
|
Second Amended and Restated Employment Agreement dated
July 11, 2003 between Camden Property Trust and
Richard J. Campo
|
|
Exhibit 10.1 to
Form 10-Q for the
quarter ended June
30, 2003 |
|
|
|
|
|
10.3
|
|
Second Amended and Restated Employment Agreement dated
July 11, 2003 between Camden Property Trust and D.
Keith Oden
|
|
Exhibit 10.2 to
Form 10-Q for the
quarter ended June
30, 2003 |
|
|
|
|
|
10.4
|
|
Form of Employment Agreement by and between Camden
Property Trust and certain senior executive officers
|
|
Exhibit 10.13 to
Form 10-K for the
year ended December
31, 1996 |
|
|
|
|
|
10.5
|
|
Camden Property Trust Key Employee Share Option Plan
|
|
Exhibit 10.14 to
Form 10-K for the
year ended December
31, 1996 |
|
|
|
|
|
10.6
|
|
Distribution Agreement dated March 20, 1997 among
Camden Property Trust and the Agents listed therein
relating to the issuance of Medium Term Notes
|
|
Exhibit 1.1 to Form
8-K filed on March
21, 1997 |
|
|
|
|
|
10.7
|
|
Form of Amended and Restated Master Exchange Agreement
between Camden Property Trust and certain key
employees
|
|
Exhibit 10.7 to
Form 10-K for the
year ended December
31, 2003 |
41
|
|
|
|
|
Exhibit |
|
|
|
Filed Herewith or Incorporated Herein |
No. |
|
Description |
|
by Reference (1) |
10.8
|
|
Form of Amended and Restated Master Exchange Agreement
between Camden Property Trust and certain trust
managers
|
|
Exhibit 10.8 to
Form 10-K for the
year ended December
31, 2003 |
|
|
|
|
|
10.9
|
|
Form of Amended and Restated Master Exchange Agreement
between Camden Property Trust and certain key
employees
|
|
Exhibit 10.9 to
Form 10-K for the
year ended December
31, 2003 |
|
|
|
|
|
10.10
|
|
Form of Master Exchange Agreement between Camden
Property Trust and certain trust managers
|
|
Exhibit 10.10 to
Form 10-K for the
year ended December
31, 2003 |
|
|
|
|
|
10.11
|
|
Form of Third Amended and Restated Agreement of
Limited Partnership of Camden Operating, L.P.
|
|
Exhibit 10.1 to
Form S-4 filed on
February 26, 1997
(Registration No.
333-22411) |
|
|
|
|
|
10.12
|
|
First Amendment to Third Amended and Restated
Agreement of Limited Partnership of Camden Operating,
L.P., dated as of February 23, 1999
|
|
Exhibit 99.2 to
Form 8-K filed on
March 10, 1999 |
|
|
|
|
|
10.13
|
|
Form of Second Amendment to Third Amended and Restated
Agreement of Limited Partnership of Camden Operating,
L.P., dated as of August 13, 1999
|
|
Exhibit 10.15 to
Form 10-K for the
year ended December
31, 1999 |
|
|
|
|
|
10.14
|
|
Form of Third Amendment to Third Amended and Restated
Agreement of Limited Partnership of Camden Operating,
L.P., dated as of September 7, 1999
|
|
Exhibit 10.16 to
Form 10-K for the
year ended December
31, 1999 |
|
|
|
|
|
10.15
|
|
Form of Fourth Amendment to Third Amended and Restated
Agreement of Limited Partnership of Camden Operating,
L.P., dated as of January 7, 2000
|
|
Exhibit 10.17 to
Form 10-K for the
year ended December
31, 1999 |
|
|
|
|
|
10.16
|
|
Form of Amendment to Third Amended and Restated
Agreement of Limited Partnership of Camden Operating,
L.P., dated as of December 1, 2003
|
|
Exhibit 10.19 to
Form 10-K for the
year ended December
31, 2003 |
|
|
|
|
|
10.17
|
|
Amended and Restated Limited Liability Company
Agreement of Sierra-Nevada Multifamily Investments,
LLC, adopted as of June 29, 1998 by Camden Subsidiary,
Inc. and TMT-Nevada, L.L.C.
|
|
Exhibit 99.1 to
Form 8-K filed on
July 15, 1998 |
|
|
|
|
|
10.18
|
|
Amended and Restated Limited Liability Company
Agreement of Oasis Martinique, LLC, adopted as of
October 23, 1998 among Oasis Residential, Inc. and the
persons named therein
|
|
Exhibit 10.59 to
Oasis Residential,
Inc.s Form 10-K
for the year ended
December 31, 1997
(File No.
001-12428) |
|
|
|
|
|
10.19
|
|
Exchange Agreement, dated as of October 23, 1998, by
and among Oasis Residential, Inc., Oasis Martinique,
LLC and the holders listed therein
|
|
Exhibit 10.60 to
Oasis Residential,
Inc.s Form 10-K
for the year ended
December 31, 1997
(File No.
001-12428) |
|
|
|
|
|
10.20
|
|
Contribution Agreement, dated as of February 23, 1999,
by and among Belcrest Realty Corporation, Belair Real
Estate Corporation, Camden Operating, L.P. and Camden
Property Trust
|
|
Exhibit 99.1 to
Form 8-K filed on
March 10, 1999 |
|
|
|
|
|
10.21
|
|
Amended and Restated 1993 Share Incentive Plan of
Camden Property Trust
|
|
Exhibit 10.18 to
Form 10-K for the
year ended December
31, 1999 |
|
|
|
|
|
10.22
|
|
Camden Property Trust 1999 Employee Share Purchase Plan
|
|
Exhibit 10.19 to
Form 10-K for the
year ended December
31, 1999 |
|
|
|
|
|
10.23
|
|
Amended and Restated 2002 Share Incentive Plan of
Camden Property Trust
|
|
Exhibit 10.1 to
Form 10-Q for the
quarter ended March
31, 2002 |
|
|
|
|
|
10.24
|
|
Amendment to Amended and Restated 2002 Share Incentive
Plan of Camden Property Trust
|
|
Exhibit 99.1 to
Form 8-K filed on
May 4, 2006 |
42
|
|
|
|
|
Exhibit |
|
|
|
Filed Herewith or Incorporated Herein |
No. |
|
Description |
|
by Reference (1) |
10.25
|
|
Camden Property Trust Short Term Incentive Plan
|
|
Exhibit 10.2 to
Form 10-Q for the
quarter ended March
31, 2002 |
|
|
|
|
|
10.26
|
|
Form of Second Amended and Restated Agreement
of Limited Partnership of Camden Summit
Partnership, L.P. among Camden Summit, Inc.,
as general partner, and the persons whose
names are set forth on Exhibit A thereto
|
|
Exhibit 10.4 to
Form S-4 filed on
November 24, 2004
(Registration No.
333-120733) |
|
|
|
|
|
10.27
|
|
Form of Tax, Asset and Income Support
Agreement among Camden Property Trust, Camden
Summit, Inc., Camden Summit Partnership, L.P.
and each of the limited partners who has
executed a signature page thereto
|
|
Exhibit 10.5 to
Form S-4 filed on
November 24, 2004
(Registration No.
333-120733) |
|
|
|
|
|
10.28
|
|
Form of Amended and Restated Credit Agreement
dated January 14, 2005 among Camden Property
Trust, Bank of America, N.A., as
administrative agent, J.P. Morgan Chase Bank,
N.A., as syndication agent, Wachovia Bank,
N.A. and Wells Fargo Bank, N.A., as the
documentation agents, and the Lenders named
therein
|
|
Exhibit 99.1 to
Form 8-K filed on
January 18, 2005 |
|
|
|
|
|
10.29
|
|
Form of First Amendment to Credit Agreement,
dated as of January 18, 2006, among Camden
Property Trust and Bank of America, N.A. on
behalf of itself and the Lenders
|
|
Exhibit 99.1 to
Form 8-K filed on
January 20, 2006 |
|
|
|
|
|
10.30
|
|
Employment Agreement dated February 15, 1999,
by and among William B. McGuire, Jr., Summit
Properties Inc. and Summit Management Company,
as restated on August 24, 2001
|
|
Exhibit 10.1 to
Summit Properties
Inc.s Form 10-Q
for the quarter
ended September 30,
2001 (File No.
000-12792) |
|
|
|
|
|
10.31
|
|
Noncompetition Agreement between Summit
Properties Inc. and William F. Paulsen
|
|
Exhibit 10.5 to
Summit Properties
Inc.s Form 10-Q
for the quarter
ended March 31,
2000 (File No.
001-12792) |
|
|
|
|
|
10.32
|
|
Noncompetition Agreement between Summit
Properties Inc. and William B. McGuire, Jr. |
|
Exhibit 10.7 to
Summit Properties
Inc.s Form 10-Q
for the quarter ended March 31,
2000 (File No.
001-12792) |
|
|
|
|
|
10.33
|
|
Amendment Agreement, dated as of June 19,
2004, among William B. McGuire, Jr., Summit
Properties Inc. and Summit Management Company
|
|
Exhibit 10.8.2 to
Summit Properties
Inc.s Form 10-Q
for the quarter
ended June 30, 2004
(File No.
001-12792) |
|
|
|
|
|
10.34
|
|
Amendment Agreement, dated as of June 19,
2004, among William F. Paulsen, Summit
Properties Inc. and Summit Management Company
|
|
Exhibit 10.8.2 to
Summit Properties
Inc.s Form 10-Q
for the quarter
ended June 30, 2004
(File No.
001-12792) |
|
|
|
|
|
10.35
|
|
Separation Agreement, dated as of February 28,
2005, between Camden Property Trust and
William B. McGuire, Jr.
|
|
Exhibit 99.1 to
Form 8-K filed on
April 28, 2005 |
|
|
|
|
|
10.36
|
|
Separation Agreement, dated as of February 28,
2005, between Camden Property Trust and
William F. Paulsen
|
|
Exhibit 99.2 to
Form 8-K filed on
April 28, 2005 |
|
|
|
|
|
10.37
|
|
Credit Agreement dated July 28, 2003 by and
among Camden Summit Partnership, L.P. (f/k/a
Summit Properties Partnership, L.P.), Summit
Sweetwater, LLC, Summit Shiloh, LLC, Summit
Grandview, LLC, Summit Portofino Place, LTD.,
and L.J. Melody & Company
|
|
Exhibit 10.1 to
Camden Summit
Partnership, L.P.s
Form 10-Q for the
quarter ended June
30, 2003 |
|
|
|
|
|
10.38
|
|
Distribution Agreement, dated as of April 20,
2000, by and among Camden Summit Partnership,
L.P. (f/k/a Summit Properties Partnership,
L.P.), Summit Properties Inc. and the Agents
listed therein
|
|
Camden Summit
Partnership, L.P.s
Form 8-K filed on
April 28, 2000 |
43
|
|
|
|
|
Exhibit |
|
|
|
Filed Herewith or Incorporated Herein |
No. |
|
Description |
|
by Reference (1) |
10.39
|
|
First Amendment to Distribution Agreement,
dated as of May 8, 2001, among Camden Summit
Partnership, L.P. (f/k/a Summit Properties
Partnership, L.P.), Summit Properties Inc. and
the Agents named therein
|
|
Exhibit 10.2 to
Summit Properties
Inc.s Form 10-Q
for the quarter
ended March 31,
2001 |
|
|
|
|
|
12.1
|
|
Statement Re Computation of Ratios
|
|
Filed Herewith |
|
|
|
|
|
21.1
|
|
List of Subsidiaries
|
|
Filed Herewith |
|
|
|
|
|
23.1
|
|
Consent of Deloitte & Touche LLP
|
|
Filed Herewith |
|
|
|
|
|
24.1
|
|
Powers of Attorney for Richard J. Campo, D.
Keith Oden, Dennis M. Steen, William R.
Cooper, George A. Hrdlicka, Scott S. Ingraham,
Lewis A. Levey, William B. McGuire, Jr., F.
Gardner Parker, William F. Paulsen and Steven A. Webster
|
|
Filed Herewith |
|
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer
pursuant to Rule 13a-14(a) of the Securities Exchange Act
|
|
Filed Herewith |
|
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer
pursuant to Rule 13a-14(a) of the Securities Exchange Act
|
|
Filed Herewith |
|
|
|
|
|
32.1
|
|
Certification pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed Herewith |
|
|
|
(1) |
|
Unless otherwise indicated, all references to reports or registration statements are to
reports or registration statements filed by Camden Property Trust (File No. 1-12110). |
44
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
Camden Property Trust has duly caused this Report to be signed on its behalf by the undersigned
thereunto duly authorized.
|
|
|
|
|
February 28, 2007 |
CAMDEN PROPERTY TRUST
|
|
|
By: |
/s/ Michael P. Gallagher
|
|
|
|
Michael P. Gallagher |
|
|
|
Vice President & Chief Accounting Officer |
|
|
45
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been
signed below by the following persons on behalf of Camden Property Trust and in the capacities and
on the dates indicated.
|
|
|
|
|
Name |
|
Title |
|
Date |
/s/ Richard J. Campo
Richard J. Campo |
|
Chairman of the
Board of Trust
Managers and Chief
Executive Officer
(Principal
Executive Officer)
|
|
February 28, 2007 |
/s/ D. Keith Oden
D. Keith Oden |
|
President, Chief
Operating Officer
and Trust Manager
|
|
February 28, 2007 |
/s/ Dennis M. Steen
Dennis M. Steen |
|
Chief Financial
Officer, Senior
Vice
President-Finance
and Secretary
(Principal
Financial Officer)
|
|
February 28, 2007 |
*
William R. Cooper |
|
Trust Manager
|
|
February 28, 2007 |
*
George A. Hrdlicka |
|
Trust Manager
|
|
February 28, 2007 |
*
Scott S. Ingraham |
|
Trust Manager
|
|
February 28, 2007 |
*
Lewis A. Levey |
|
Trust Manager
|
|
February 28, 2007 |
*
William B. McGuire, Jr. |
|
Trust Manager
|
|
February 28, 2007 |
*
F. Gardner Parker |
|
Trust Manager
|
|
February 28, 2007 |
*
William F. Paulsen |
|
Trust Manager
|
|
February 28, 2007 |
*
Steven A. Webster |
|
Trust Manager
|
|
February 28, 2007 |
|
|
|
|
|
|
* By: |
/s/ Dennis M. Steen
|
|
|
Dennis M. Steen |
|
|
Attorney-in-fact |
|
|
46
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trust Managers and the Shareholders of Camden Property Trust
We have audited the accompanying consolidated balance sheets of Camden Property Trust and
subsidiaries (the Trust) as of December 31, 2006 and 2005, and the related consolidated
statements of income, stockholders equity, and cash flows for each of the three years in the
period ended December 31, 2006. Our audits also included the financial statement schedules listed
in the Index at Item 15(a)(2). These financial statements and financial statement schedules are
the responsibility of the Trusts management. Our responsibility is to express an opinion on the
financial statements and financial statement schedules based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such consolidated financial statements present fairly, in all material
respects, the financial position of Camden Property Trust and subsidiaries as of December 31, 2006
and 2005, and the results of their operations and their cash flows for each of the three years in
the period ended December 31, 2006, in conformity with accounting principles generally accepted in
the United States of America. Also, in our opinion, such financial statement schedules, when
considered in relation to the basic consolidated financial statements taken as a whole, present
fairly, in all material respects, the information set forth therein.
We have also audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the effectiveness of the Trusts internal control over financial
reporting as of December 31, 2006, based on the criteria established in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated February 28, 2007 (presented herein) expresses an unqualified
opinion on managements assessment of the effectiveness of the Trusts internal control over
financial reporting and an unqualified opinion on the effectiveness of the Trusts internal control
over financial reporting.
DELOITTE & TOUCHE LLP
Houston, Texas
February 28, 2007
F-1
CAMDEN PROPERTY TRUST
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
2006 |
|
|
2005 |
|
Assets |
|
|
|
|
|
|
|
|
Real estate assets, at cost |
|
|
|
|
|
|
|
|
Land |
|
$ |
693,312 |
|
|
$ |
646,854 |
|
Buildings and improvements |
|
|
4,036,286 |
|
|
|
3,840,969 |
|
|
|
|
|
|
|
|
|
|
|
4,729,598 |
|
|
|
4,487,823 |
|
Accumulated depreciation |
|
|
(762,011 |
) |
|
|
(716,650 |
) |
|
|
|
|
|
|
|
Net operating real estate assets |
|
|
3,967,587 |
|
|
|
3,771,173 |
|
Properties under development, including land |
|
|
369,861 |
|
|
|
372,976 |
|
Investments in joint ventures |
|
|
9,245 |
|
|
|
6,096 |
|
Properties held for sale, including land |
|
|
32,763 |
|
|
|
172,112 |
|
|
|
|
|
|
|
|
Total real estate assets |
|
|
4,379,456 |
|
|
|
4,322,357 |
|
|
|
|
|
|
|
|
|
|
Accounts receivable affiliates |
|
|
34,170 |
|
|
|
34,084 |
|
Notes receivable |
|
|
|
|
|
|
|
|
Affiliates |
|
|
41,478 |
|
|
|
11,916 |
|
Other |
|
|
3,855 |
|
|
|
13,261 |
|
Other assets, net |
|
|
121,336 |
|
|
|
99,516 |
|
Cash and cash equivalents |
|
|
1,034 |
|
|
|
1,576 |
|
Restricted cash |
|
|
4,721 |
|
|
|
5,089 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
4,586,050 |
|
|
$ |
4,487,799 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders equity |
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Notes payable |
|
|
|
|
|
|
|
|
Unsecured |
|
$ |
1,759,498 |
|
|
$ |
2,007,164 |
|
Secured |
|
|
571,478 |
|
|
|
625,927 |
|
Accounts payable and accrued expenses |
|
|
124,834 |
|
|
|
108,979 |
|
Accrued real estate taxes |
|
|
23,306 |
|
|
|
26,070 |
|
Distributions payable |
|
|
43,068 |
|
|
|
38,922 |
|
Other liabilities |
|
|
105,999 |
|
|
|
88,811 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
2,628,183 |
|
|
|
2,895,873 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minority interests |
|
|
|
|
|
|
|
|
Perpetual preferred units |
|
|
97,925 |
|
|
|
97,925 |
|
Common units |
|
|
115,280 |
|
|
|
112,637 |
|
Other minority interests |
|
|
10,306 |
|
|
|
10,461 |
|
|
|
|
|
|
|
|
Total minority interests |
|
|
223,511 |
|
|
|
221,023 |
|
|
|
|
|
|
|
|
|
|
Shareholders equity |
|
|
|
|
|
|
|
|
Common shares of beneficial interest; $0.01 par value per share;
100,000 shares authorized; 67,451 and 63,111 issued; 65,006 and 60,763
outstanding at December 31, 2006 and 2005, respectively |
|
|
650 |
|
|
|
608 |
|
Additional paid-in capital |
|
|
2,183,622 |
|
|
|
1,902,595 |
|
Distributions in excess of net income |
|
|
(213,665 |
) |
|
|
(295,074 |
) |
Employee notes receivable |
|
|
(2,036 |
) |
|
|
(2,078 |
) |
Treasury shares, at cost |
|
|
(234,215 |
) |
|
|
(235,148 |
) |
|
|
|
|
|
|
|
Total shareholders equity |
|
|
1,734,356 |
|
|
|
1,370,903 |
|
|
|
|
|
|
|
|
Total liabilities and shareholders equity |
|
$ |
4,586,050 |
|
|
$ |
4,487,799 |
|
|
|
|
|
|
|
|
See Notes to Consolidated Financial Statements.
F-2
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2006 |
|
|
2005 |
|
|
2004 |
|
Property revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenues |
|
$ |
544,236 |
|
|
$ |
479,221 |
|
|
$ |
351,513 |
|
Other property revenues |
|
|
55,194 |
|
|
|
42,860 |
|
|
|
31,503 |
|
|
|
|
|
|
|
|
|
|
|
Total property revenues |
|
|
599,430 |
|
|
|
522,081 |
|
|
|
383,016 |
|
|
|
|
|
|
|
|
|
|
|
Property expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Property operating and maintenance |
|
|
165,810 |
|
|
|
145,044 |
|
|
|
113,762 |
|
Real estate taxes |
|
|
63,388 |
|
|
|
57,316 |
|
|
|
42,131 |
|
|
|
|
|
|
|
|
|
|
|
Total property expenses |
|
|
229,198 |
|
|
|
202,360 |
|
|
|
155,893 |
|
|
|
|
|
|
|
|
|
|
|
Non-property income |
|
|
|
|
|
|
|
|
|
|
|
|
Fee and asset management |
|
|
14,041 |
|
|
|
12,912 |
|
|
|
9,187 |
|
Sale of technology investments |
|
|
1,602 |
|
|
|
24,206 |
|
|
|
863 |
|
Interest and other income |
|
|
9,771 |
|
|
|
7,373 |
|
|
|
11,074 |
|
Income on deferred compensation plans |
|
|
10,116 |
|
|
|
6,421 |
|
|
|
6,760 |
|
|
|
|
|
|
|
|
|
|
|
Total non-property income |
|
|
35,530 |
|
|
|
50,912 |
|
|
|
27,884 |
|
|
|
|
|
|
|
|
|
|
|
Other expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Property management |
|
|
18,490 |
|
|
|
16,145 |
|
|
|
11,924 |
|
Fee and asset management |
|
|
9,382 |
|
|
|
6,897 |
|
|
|
3,856 |
|
General and administrative |
|
|
37,584 |
|
|
|
24,845 |
|
|
|
18,536 |
|
Transaction compensation and merger expenses |
|
|
|
|
|
|
14,085 |
|
|
|
|
|
Impairment provisions on technology investments |
|
|
|
|
|
|
130 |
|
|
|
|
|
Interest |
|
|
118,344 |
|
|
|
111,548 |
|
|
|
78,260 |
|
Depreciation and amortization |
|
|
158,510 |
|
|
|
164,705 |
|
|
|
94,730 |
|
Amortization of deferred financing costs |
|
|
3,813 |
|
|
|
3,739 |
|
|
|
2,697 |
|
Expense on deferred compensation plans |
|
|
10,116 |
|
|
|
6,421 |
|
|
|
6,760 |
|
|
|
|
|
|
|
|
|
|
|
Total other expenses |
|
|
356,239 |
|
|
|
348,515 |
|
|
|
216,763 |
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before gain on sale of properties,
impairment loss on land held for sale, equity in income of joint ventures and
minority interests |
|
|
49,523 |
|
|
|
22,118 |
|
|
|
38,244 |
|
Gain on sale of properties, including land |
|
|
97,452 |
|
|
|
132,914 |
|
|
|
1,642 |
|
Impairment loss on land held for sale |
|
|
|
|
|
|
(339 |
) |
|
|
|
|
Equity in income of joint ventures |
|
|
5,156 |
|
|
|
10,049 |
|
|
|
356 |
|
Income allocated to minority interests |
|
|
|
|
|
|
|
|
|
|
|
|
Distributions on perpetual preferred units |
|
|
(7,000 |
) |
|
|
(7,028 |
) |
|
|
(10,461 |
) |
Original issuance costs on redeemed perpetual preferred units |
|
|
|
|
|
|
(365 |
) |
|
|
(745 |
) |
Income allocated to common units and other minority interests |
|
|
(16,163 |
) |
|
|
(2,223 |
) |
|
|
(2,733 |
) |
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
128,968 |
|
|
|
155,126 |
|
|
|
26,303 |
|
Income from discontinued operations |
|
|
6,434 |
|
|
|
8,249 |
|
|
|
8,357 |
|
Gain on sale of discontinued operations |
|
|
99,273 |
|
|
|
36,175 |
|
|
|
9,351 |
|
Impairment loss on land held for sale |
|
|
|
|
|
|
|
|
|
|
(1,143 |
) |
Income from discontinued operations, allocated to common units |
|
|
(1,829 |
) |
|
|
(464 |
) |
|
|
(1,527 |
) |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
232,846 |
|
|
$ |
199,086 |
|
|
$ |
41,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share basic |
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
2.28 |
|
|
$ |
2.98 |
|
|
$ |
0.64 |
|
Income from discontinued operations |
|
|
1.83 |
|
|
|
0.85 |
|
|
|
0.36 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
4.11 |
|
|
$ |
3.83 |
|
|
$ |
1.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share diluted |
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
2.21 |
|
|
$ |
2.79 |
|
|
$ |
0.62 |
|
Income from discontinued operations |
|
|
1.75 |
|
|
|
0.79 |
|
|
|
0.36 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
3.96 |
|
|
$ |
3.58 |
|
|
$ |
0.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions declared per common share |
|
$ |
2.64 |
|
|
$ |
2.54 |
|
|
$ |
2.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding |
|
|
56,660 |
|
|
|
52,000 |
|
|
|
41,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common and common dilutive
equivalent shares outstanding |
|
|
59,524 |
|
|
|
56,313 |
|
|
|
42,426 |
|
See Notes to Consolidated Financial Statements.
F-3
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
shares of |
|
|
Additional |
|
|
Distributions |
|
|
Employee |
|
|
Treasury |
|
|
|
beneficial |
|
|
paid-in |
|
|
in excess of |
|
|
notes |
|
|
shares, |
|
|
|
interest |
|
|
capital |
|
|
net income |
|
|
receivable |
|
|
at cost |
|
Shareholders equity, January 1, 2004 |
|
$ |
483 |
|
|
$ |
1,318,637 |
|
|
$ |
(297,808 |
) |
|
$ |
|
|
|
$ |
(236,427 |
) |
Net income |
|
|
|
|
|
|
|
|
|
|
41,341 |
|
|
|
|
|
|
|
|
|
Common shares issued under dividend reinvestment plan |
|
|
|
|
|
|
40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share awards issued under benefit plan (233 shares) |
|
|
2 |
|
|
|
784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share awards canceled under benefit plan (32 shares) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of previously granted share awards |
|
|
|
|
|
|
4,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee share purchase plan |
|
|
|
|
|
|
299 |
|
|
|
|
|
|
|
|
|
|
|
604 |
|
Share awards placed into deferred plans (384 shares) |
|
|
(4 |
) |
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common share options exercised (483 shares) |
|
|
5 |
|
|
|
11,547 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Redemption of operating partnership units |
|
|
|
|
|
|
(101 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions ($2.54 per share) |
|
|
|
|
|
|
|
|
|
|
(105,506 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity, December 31, 2004 |
|
|
486 |
|
|
|
1,335,825 |
|
|
|
(361,973 |
) |
|
|
|
|
|
|
(235,823 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
199,086 |
|
|
|
|
|
|
|
|
|
Common shares issued in Summit merger (11,802 shares) |
|
|
118 |
|
|
|
543,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued under dividend reinvestment plan |
|
|
|
|
|
|
34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share awards issued under benefit plan (298 shares) |
|
|
3 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share awards canceled under benefit plan (19 shares) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of previously granted share awards |
|
|
|
|
|
|
11,325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee share purchase plan |
|
|
|
|
|
|
523 |
|
|
|
|
|
|
|
|
|
|
|
675 |
|
Acquisition of employee notes receivable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,882 |
) |
|
|
|
|
Repayment of employee notes receivable, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,804 |
|
|
|
|
|
Share awards placed into deferred plans (202 shares) |
|
|
(2 |
) |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common share options exercised (264 shares) |
|
|
3 |
|
|
|
10,461 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversions and redemptions of operating partnership units |
|
|
|
|
|
|
539 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions ($2.54 per share) |
|
|
|
|
|
|
|
|
|
|
(132,187 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity, December 31, 2005 |
|
|
608 |
|
|
|
1,902,595 |
|
|
|
(295,074 |
) |
|
|
(2,078 |
) |
|
|
(235,148 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
232,846 |
|
|
|
|
|
|
|
|
|
Common shares issued (3,600 shares) |
|
|
36 |
|
|
|
254,895 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares issued under dividend reinvestment plan |
|
|
|
|
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Share awards issued under benefit plan (317 shares) |
|
|
3 |
|
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
(2 |
) |
Share awards canceled under benefit plan (31 shares) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of previously granted share awards |
|
|
|
|
|
|
12,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee share purchase plan |
|
|
|
|
|
|
1,359 |
|
|
|
|
|
|
|
|
|
|
|
935 |
|
Repayment of employee notes receivable, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42 |
|
|
|
|
|
Share awards placed into deferred plans (97 shares) |
|
|
(1 |
) |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common share options exercised (119 shares) |
|
|
1 |
|
|
|
5,293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversions and redemptions of operating partnership units |
|
|
3 |
|
|
|
6,486 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions ($2.64 per share) |
|
|
|
|
|
|
|
|
|
|
(151,437 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders equity, December 31, 2006 |
|
$ |
650 |
|
|
$ |
2,183,622 |
|
|
$ |
(213,665 |
) |
|
$ |
(2,036 |
) |
|
$ |
(234,215 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financial Statements.
F-4
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2006 |
|
|
2005 |
|
|
2004 |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
232,846 |
|
|
$ |
199,086 |
|
|
$ |
41,341 |
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization, including discontinued operations |
|
|
159,860 |
|
|
|
171,254 |
|
|
|
106,183 |
|
Amortization of deferred financing costs |
|
|
3,813 |
|
|
|
3,739 |
|
|
|
2,697 |
|
Equity in income of joint ventures |
|
|
(5,156 |
) |
|
|
(10,049 |
) |
|
|
(356 |
) |
Gain on sale of discontinued operations |
|
|
(99,273 |
) |
|
|
(36,175 |
) |
|
|
(9,351 |
) |
Gain on sale of properties, including land |
|
|
(97,452 |
) |
|
|
(132,914 |
) |
|
|
(1,642 |
) |
Gain on sale of technology investments |
|
|
(1,602 |
) |
|
|
(24,206 |
) |
|
|
(863 |
) |
Impairment loss on land held for sale |
|
|
|
|
|
|
339 |
|
|
|
1,143 |
|
Impairment provisions on technology investments |
|
|
|
|
|
|
130 |
|
|
|
|
|
Original issuance costs on redeemed perpetual preferred units |
|
|
|
|
|
|
365 |
|
|
|
745 |
|
Income allocated to common units and other minority interests, including discontinued
operations |
|
|
17,992 |
|
|
|
2,687 |
|
|
|
4,260 |
|
Accretion of discount on unsecured notes payable |
|
|
694 |
|
|
|
687 |
|
|
|
609 |
|
Amortization of share-based compensation |
|
|
11,619 |
|
|
|
9,549 |
|
|
|
3,381 |
|
Interest on employee notes receivable |
|
|
(108 |
) |
|
|
(96 |
) |
|
|
|
|
Net change in operating accounts |
|
|
8,336 |
|
|
|
16,449 |
|
|
|
8,850 |
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
231,569 |
|
|
|
200,845 |
|
|
|
156,997 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
Increase in real estate assets |
|
|
(444,300 |
) |
|
|
(297,790 |
) |
|
|
(107,640 |
) |
Proceeds from sale of properties, including land and discontinued operations |
|
|
181,963 |
|
|
|
134,882 |
|
|
|
43,882 |
|
Proceeds from the sale of technology investments |
|
|
1,602 |
|
|
|
24,651 |
|
|
|
863 |
|
Proceeds from partial sales of assets to joint ventures |
|
|
213,720 |
|
|
|
316,746 |
|
|
|
|
|
Distributions from joint ventures |
|
|
47,922 |
|
|
|
79,425 |
|
|
|
1,748 |
|
Investments in joint ventures |
|
|
(3,147 |
) |
|
|
(878 |
) |
|
|
|
|
Payments received on notes receivable other |
|
|
9,406 |
|
|
|
31,383 |
|
|
|
9,320 |
|
Increase in notes receivable other |
|
|
|
|
|
|
(97 |
) |
|
|
(12,451 |
) |
Increase in notes receivable affiliates |
|
|
(41,615 |
) |
|
|
|
|
|
|
|
|
Cash of Summit at merger date |
|
|
|
|
|
|
16,696 |
|
|
|
|
|
Cash consideration paid for Summit |
|
|
|
|
|
|
(458,050 |
) |
|
|
|
|
Payment of merger related liabilities |
|
|
(8,233 |
) |
|
|
(51,794 |
) |
|
|
|
|
Earnest money deposits on potential transactions |
|
|
(4,803 |
) |
|
|
|
|
|
|
|
|
Change in restricted cash |
|
|
368 |
|
|
|
362 |
|
|
|
2,746 |
|
Increase in non-real estate assets and other |
|
|
(4,950 |
) |
|
|
(3,097 |
) |
|
|
(3,789 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(52,067 |
) |
|
|
(207,561 |
) |
|
|
(65,321 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in unsecured line of credit and short-term borrowings |
|
|
(45,000 |
) |
|
|
195,000 |
|
|
|
9,000 |
|
Proceeds from the issuance of notes payable |
|
|
|
|
|
|
248,423 |
|
|
|
349,709 |
|
Repayment of Summit secured credit facility |
|
|
|
|
|
|
(188,500 |
) |
|
|
|
|
Repayment of notes payable |
|
|
(227,284 |
) |
|
|
(79,753 |
) |
|
|
(292,590 |
) |
Proceeds from issuance of common shares |
|
|
254,931 |
|
|
|
|
|
|
|
|
|
Distributions to shareholders and minority interests |
|
|
(166,234 |
) |
|
|
(148,318 |
) |
|
|
(123,841 |
) |
Redemption of perpetual preferred units |
|
|
|
|
|
|
(17,500 |
) |
|
|
(35,500 |
) |
Repayment of employee notes receivable |
|
|
150 |
|
|
|
1,900 |
|
|
|
|
|
Repurchase of common units |
|
|
(170 |
) |
|
|
(5,688 |
) |
|
|
(181 |
) |
Net increase in accounts receivable affiliates |
|
|
382 |
|
|
|
(1,439 |
) |
|
|
(1,151 |
) |
Common share options exercised |
|
|
4,155 |
|
|
|
9,238 |
|
|
|
8,025 |
|
Payment of deferred financing costs |
|
|
(2,945 |
) |
|
|
(7,247 |
) |
|
|
(4,825 |
) |
Other |
|
|
1,971 |
|
|
|
(77 |
) |
|
|
(1,426 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
(180,044 |
) |
|
|
6,039 |
|
|
|
(92,780 |
) |
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents |
|
|
(542 |
) |
|
|
(677 |
) |
|
|
(1,104 |
) |
Cash and cash equivalents, beginning of year |
|
|
1,576 |
|
|
|
2,253 |
|
|
|
3,357 |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of year |
|
$ |
1,034 |
|
|
$ |
1,576 |
|
|
$ |
2,253 |
|
|
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financial Statements.
F-5
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2006 |
|
|
2005 |
|
|
2004 |
|
Supplemental information |
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest, net of interest capitalized |
|
$ |
121,396 |
|
|
$ |
106,020 |
|
|
$ |
80,929 |
|
Interest capitalized |
|
|
20,627 |
|
|
|
17,513 |
|
|
|
9,332 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental schedule of non-cash investing and financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of Summit, net of cash acquired, at fair value |
|
|
|
|
|
|
|
|
|
|
|
|
Assets acquired |
|
$ |
1,881 |
|
|
$ |
1,591,899 |
|
|
$ |
|
|
Liabilities assumed |
|
|
1,881 |
|
|
|
982,966 |
|
|
|
|
|
Common shares issued |
|
|
|
|
|
|
544,065 |
|
|
|
|
|
Common units issued |
|
|
|
|
|
|
81,564 |
|
|
|
|
|
Value of shares issued under benefit plans, net |
|
|
16,144 |
|
|
|
11,330 |
|
|
|
5,764 |
|
Cancellation of notes receivable affiliate in connection with property acquisition |
|
|
12,053 |
|
|
|
|
|
|
|
|
|
Distributions declared but not paid |
|
|
43,068 |
|
|
|
38,922 |
|
|
|
30,412 |
|
Conversion of operating partnership units to common shares |
|
|
6,569 |
|
|
|
424 |
|
|
|
|
|
Contribution of real estate assets to joint ventures |
|
|
33,493 |
|
|
|
45,297 |
|
|
|
|
|
Decrease in liabilities in connection with property transactions, net |
|
|
2,581 |
|
|
|
|
|
|
|
|
|
Assumption of debt by joint venture |
|
|
30,525 |
|
|
|
|
|
|
|
|
|
Common units issued in connection with investment in joint venture |
|
|
1,900 |
|
|
|
|
|
|
|
|
|
See Notes to Consolidated Financial Statements.
F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business
Business. Formed on May 25, 1993, Camden Property Trust, a Texas real estate investment trust
(REIT), is engaged in the ownership, development, construction and management 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 December 31, 2006, we owned interests in, operated or were developing 197 multifamily
properties comprising 67,631 apartment homes located in 13 states. We had 3,788 apartment homes
under development at 11 of our multifamily properties, including 1,069 apartment homes at three
multifamily properties owned through joint ventures, 26 apartment homes at one operating property,
and several sites we intend to develop into multifamily apartment communities. Additionally, three
properties comprised of 930 apartment homes were designated as held for sale.
2. Summary of Significant Accounting Policies
Principles of Consolidation. The consolidated financial statements include our assets,
liabilities and operations and those of our wholly-owned subsidiaries and partnerships. We also
assess the consolidation of any entity in which we have an equity interest. Any entities that do
not meet the criteria for consolidation, but where we exercise significant influence are accounted
for using the equity method. Any entities that do not meet the criteria for consolidation where we
do not exercise significant influence are accounted for using the cost method. All significant
intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates. The preparation of our financial statements in conformity with generally
accepted accounting principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial statements, results of
operations during the reporting periods and related disclosures. Our more significant estimates
relate to determining the allocation of the purchase price of our acquisitions, estimates
supporting our impairment analysis related to the carrying value of our real estate assets,
estimates of the useful lives of our assets, reserves related to co-insurance requirements under
our property, general liability and employee benefit insurance programs and estimates of expected
losses of variable interest entities. Actual results could differ from those estimates.
Reportable Segments. Our multifamily communities are geographically diversified throughout
the United States and management evaluates operating performance on an individual property level.
However, as each of our apartment communities has similar economic characteristics, residents, and
products and services, our apartment communities have been aggregated into one reportable segment
with activities related to the ownership, development, construction and management of multifamily
communities. Our multifamily communities generate rental revenue and other income through the
leasing of apartment homes, which comprised 95% of our total consolidated revenues, excluding
non-recurring gains on technology investments, for the years ended December 31, 2006, 2005 and
2004.
Cash and Cash Equivalents. All cash and investments in money market accounts and other highly
liquid securities with a maturity of three months or less at the date of purchase are considered to
be cash and cash equivalents.
Restricted Cash. Restricted cash consists of escrow deposits held by lenders for property
taxes, insurance and replacement reserves, cash required to be segregated for the repayment of
residents security deposits and escrowed amounts related to our development activities.
Substantially all restricted cash is invested in demand and short-term instruments.
Real Estate Assets, at Cost. Real estate assets are carried at cost plus capitalized carrying
charges. Carrying charges, principally interest and real estate taxes, of land under development
and buildings under construction are capitalized as part of properties under development and
buildings and improvements to the extent such charges do not cause the carrying value of the asset
to exceed its net realizable value. Expenditures directly related to the development, acquisition
and improvement of real estate assets, excluding internal costs relating to acquisitions of
F-7
operating properties, are capitalized at cost as land, buildings and improvements. Indirect
development costs, including salaries and benefits and other related costs that are clearly
attributable to the development of properties, are also capitalized. All construction and carrying
costs are capitalized and reported on the balance sheet in properties under development until the
apartment homes are substantially completed. Upon substantial completion of the apartment homes,
the total cost for the apartment homes and the associated land is transferred to buildings and
improvements and land, respectively, and the assets are depreciated over their estimated useful
lives using the straight-line method of depreciation.
Upon the acquisition of real estate, we allocate the purchase price between tangible and
intangible assets, which includes land, buildings, furniture and fixtures, the value of in-place
leases, including above and below market leases, and acquired liabilities. When allocating the
purchase price to acquired properties, we allocated costs to the estimated intangible value of
in-place leases and above or below market leases and to the estimated fair value of furniture and
fixtures, land and buildings on a value determined by assuming the property was vacant by applying
methods similar to those used by independent appraisers of income-producing property. Depreciation
and amortization is computed on a straight-line basis over the remaining useful lives of the
related 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. 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 and amortization is computed over the expected useful lives of depreciable
property on a straight-line basis as follows:
|
|
|
|
|
|
|
Estimated Useful Life |
|
Buildings and improvements |
|
5-35 years |
Furniture, fixtures, equipment and other |
|
3-20 years |
Intangible assets (in-place leases and
above and below market leases) |
|
6-13 months |
As discussed above, carrying charges are principally interest and real estate taxes
capitalized as part of properties under development and buildings and improvements. Capitalized
interest was $20.6 million in 2006, $17.5 million in 2005 and $9.3 million in 2004. Capitalized
real estate taxes were $2.6 million, $2.5 million and $2.2 million in 2006, 2005 and 2004,
respectively. All operating expenses associated with completed apartment homes for properties in
the development and leasing phase are expensed. Upon substantial completion of the project, all
apartment homes are considered operating and we begin expensing all items that were previously
considered carrying costs.
We capitalize renovation and improvement costs which we believe extend the economic lives
and enhance the earnings of our multifamily properties. Capital expenditures totaled $58.5
million and $41.0 million in 2006 and 2005, respectively. Included in the $58.5 million for 2006
is $13.7 million of non-recurring capital improvements on renovation and rehabilitation projects at
certain of our multifamily properties.
Costs recorded as repair and maintenance include all costs which do not alter the primary use,
extend the expected useful life or improve the safety or efficiency of the related asset. Our
largest repair and maintenance expenditures related to landscaping, interior painting and floor
coverings. Property operating and maintenance expense and income from discontinued operations
included repair and maintenance expenses totaling $41.6 million in 2006, $36.5 million in 2005 and
$30.9 million in 2004.
Impairment of Long-Lived Assets. Long-lived assets are reviewed for impairment whenever
events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount of
an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the
carrying amount of an asset exceeds its estimated future cash flows and costs to sell, an
impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the
fair value of the asset.
F-8
Discontinued Operations. The results of operations for properties sold during the period or
classified as held for sale at the end of the current period are required to be classified as
discontinued operations in the current and prior periods. The property-specific components of
earnings that are classified as discontinued operations include net operating income, depreciation
expense and interest expense. The gain or loss on the eventual disposal of the held for sale
properties is also classified as discontinued operations. Real estate assets held for sale are
measured at the lower of the carrying amount or the fair value less costs to sell, and are
presented separately in the accompanying consolidated balance sheets. Subsequent to classification
of a property as held for sale, no further depreciation is recorded. Properties sold by our
unconsolidated entities are not included in discontinued operations and related gains or losses are
reported as a component of equity in income of joint ventures.
During the year ended December 31, 2006, the operations of two properties previously included
in discontinued operations were reclassified to continuing operations as management made the
decision not to sell these assets. As a result, we adjusted the current and prior period
consolidated financial statements to reflect the necessary reclassifications. Additionally, we
recorded a depreciation charge of $2.6 million during the year ended December 31, 2006.
Gains on sale of real estate are recognized using the full accrual or partial sale methods, as
applicable, in accordance with SFAS No. 66 Accounting for Real Estate Sales, provided various
criteria relating to the terms of sale and any subsequent involvement with the real estate sold are
met.
Other Assets, Net. Other assets in our consolidated financial statements include investments
under deferred compensation plans, deferred financing costs, non-real estate leasehold improvements
and equipment, prepaid expenses, the value of in-place leases and related accumulated amortization,
and other miscellaneous receivables. Investments under deferred compensation plans are held as
trading securities and are adjusted to fair market value at period end. See further discussion of
our investments under deferred compensation plans in Note 12. Deferred financing costs are
amortized over the terms of the related debt on the straight-line method, which approximates the
effective interest method. Corporate leasehold improvements and equipment are depreciated on the
straight-line method over the shorter of the expected useful lives or the lease terms which range
from 3 to 10 years. Accumulated depreciation and amortization for such assets totaled $26.9
million in 2006 and $23.1 million in 2005.
Insurance. Our primary lines of insurance coverage are property, general liability, health
and workers compensation. We believe our insurance coverage adequately insures our properties
against the risk of loss attributable to fire, earthquake, hurricane, tornado, flood and other
perils and adequately insures us against other risks. Losses are accrued based upon our estimates
of the aggregate liability for claims incurred using certain actuarial assumptions followed in the
insurance industry and based on our experience.
Income Recognition. Our rental and other property income is recorded when due from residents
and is recognized monthly as it is earned. Other property income consists primarily of utility
rebillings, and administrative, application and other transactional fees charged to our residents.
Our apartment homes are rented to residents on lease terms generally ranging from 6 to 13 months,
with monthly payments due in advance. Interest, fee and asset management and all other sources of
income are recognized as earned. Two of our properties are subject to rent control or rent
stabilization. Operations of apartment properties acquired are recorded from the date of
acquisition in accordance with the purchase method of accounting. In managements opinion, due to
the number of residents, the type and diversity of submarkets in which the properties operate, and
the collection terms, there is no significant concentration of credit risk.
Retail Lease Income. We have approximately 178,000 square feet of leaseable space for retail
and commercial uses. Retail lease income is recorded on a straight-line basis over the lease term,
including the construction period if we are determined not to be the owner of the tenant
improvements. The difference between the cash received and income in any period is recorded as
deferred retail lease receivable in other assets in the consolidated balance sheets. Any tenant
incentives, also recorded in other assets in the consolidated balance sheets, are amortized over
the related term of the lease, commencing the date we pay the incentive, as a reduction of retail
lease income.
Retail lease income for the year ended December 31, 2006 totaled $3.5 million which included a
$0.3 million impact of recording the retail lease income on a straight-line basis. For retail
leases outstanding as of
F-9
December 31, 2006, minimum expected annual retail lease income for the years ending December 31,
2007 through 2011 are $3.3 million, $2.8 million, $2.6 million, $2.4 million and $1.8 million,
respectively, and $2.2 million in the aggregate thereafter.
Third-Party Construction Services. Our construction division performs services for our
internally developed communities, as well as provides construction management and general
contracting services for third-party owners of multifamily, commercial and retail properties.
Income from these third-party projects is recognized on a percentage-of-completion basis. For
projects where our fee is based on a fixed price, any cost overruns, as compared to the original
budget, incurred during construction will reduce the fee generated on those projects. For any
project where cost overruns are expected to be in excess of the fee generated on the project, we
will recognize the total projected loss in the period in which the loss is first estimated. See
Note 9 for further discussion of our third-party construction services.
Recent Accounting Pronouncements. In December 2004, the FASB issued SFAS No. 123 (revised
2004), Share-Based Payment (SFAS No. 123(R)) requiring the compensation cost relating to
share-based payments be recognized over their vesting periods in the income statement based on
their estimated fair values. In April 2005, the SEC issued Staff Accounting Bulletin No. 107,
Shared-Based Payment providing for a phased-in implementation process for SFAS No. 123(R). SFAS
No. 123(R) is effective for all public entities in the first annual reporting period beginning
after June 15, 2005. We adopted SFAS No. 123(R) on January 1, 2006 using the modified prospective
method. The impact of adopting this pronouncement is discussed in Note 12, Share-based
Compensation.
In May 2005, the FASB issued SFAS No. 154 Accounting Changes and Error Corrections, a
replacement of APB Opinion No. 20 and FASB Statement No. 3 (SFAS No. 154). This pronouncement
applies to all voluntary changes in accounting principle and revises the requirements for
accounting for and reporting a change in accounting principle. SFAS No. 154 requires retrospective
application to prior periods financial statements of a voluntary change in accounting principle,
unless it is impracticable to do so. This pronouncement also requires changes to the method of
depreciation, amortization, or depletion for long-lived, non-financial assets be accounted for as a
change in accounting estimate that is effected by a change in accounting principle. SFAS No. 154
is effective for accounting changes and corrections of errors made in fiscal years beginning after
December 15, 2005. SFAS No. 154 does not change the transition provisions of any existing
accounting pronouncements, including those which are in a transition phase as of the effective
date. The adoption of SFAS No. 154 did not have a material impact on our financial position,
results of operations or cash flows.
In June 2005, the FASB issued Emerging Issues Task Force (EITF) Issue No. 04-5, Determining
Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or
Similar Entity When the Limited Partners Have Certain Rights. EITF Issue No. 04-5 provides a
framework for determining whether a general partner controls, and should consolidate, a limited
partnership or a similar entity. EITF Issue No. 04-5 was effective after June 29, 2005, for all
newly formed limited partnerships and for any pre-existing limited partnerships that modify their
partnership agreements after that date. General partners of all other limited partnerships are
required to apply the consensus no later than the beginning of the first reporting period in fiscal
years beginning after December 15, 2005. The adoption of EITF Issue No. 04-5 did not have a
material impact on our financial position, results of operations or cash flows.
In June 2005, the FASB issued FASB Staff Position (FSP) 78-9-1, Interaction of AICPA
Statement of Position 78-9 and EITF Issue No. 04-5. The EITF acknowledged the consensus in EITF
Issue No. 04-5 conflicted with certain aspects of Statement of Position (SOP) 78-9, Accounting
for Investments in Real Estate Ventures. The EITF agreed with the assessment of whether a general
partner, or the general partners as a group, controls a limited partnership should be consistent
for all limited partnerships, irrespective of the industry within which the limited partnership
operates. Accordingly, the guidance in SOP 78-9 was amended in FSP 78-9-1 to be consistent with
the guidance in EITF Issue No. 04-5. The effective dates for this FSP are the same as those
mentioned above in EITF Issue No. 04-5. The adoption of FSP 78-9-1 did not have a material impact
on our financial position, results of operations or cash flows.
In April 2006, the FASB issued FSP FASB Interpretation (FIN) 46(R)-6, Determining the
Variability to Be Considered in Applying FASB Interpretation No. 46(R). FIN 46(R)-6 addresses how
a reporting enterprise
F-10
should determine variability associated with a variable interest entity or variable interests in an
entity when applying the provisions of FIN 46(R) and is effective for reporting periods beginning
after June 15, 2006. We will evaluate the impact of FIN 46(R)-6 at the time any reconsideration
event occurs, as defined by the provisions of FIN 46(R), and for any new entities with which we
become involved in future periods.
In June 2006, the FASB issued FIN 48, Accounting for Uncertainty in Income Taxes an
Interpretation of FASB Statement No. 109, which clarifies the accounting for uncertainty in tax
positions. FIN 48 requires we recognize in our financial statements the impact of a tax position,
if the position is more likely than not of being sustained on audit, based on the technical merits
of the position. FIN 48 is effective for fiscal years beginning after December 15, 2006. We have
assessed the potential impact of FIN 48 and our adoption will not have a material impact on our
financial position, results of operations or cash flows.
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157
defines fair value, establishes a framework for measuring fair value in GAAP and expands
disclosures about fair value measurements. The statement does not require new fair value
measurements, but is applied to the extent other accounting pronouncements require or permit fair
value measurements. The statement emphasizes fair value as a market-based measurement which should
be determined based on assumptions market participants would use in pricing an asset or liability.
We will be required to disclose the extent to which fair value is used to measure assets and
liabilities, the inputs used to develop the measurements, and the effect of certain of the
measurements on earnings (or changes in net assets) for the period. SFAS No. 157 is effective for
fiscal years beginning after November 15, 2007. We do not anticipate the adoption of this
statement will have a material impact on our financial position, results of operations or cash
flows.
In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit
Pension and Other Postretirement Plansan amendment of FASB Statements No. 87, 88, 106, and
132(R), which requires an employer to recognize the over-funded or under-funded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in
its statement of financial position and to recognize changes in funded status in the year in which
the changes occur through comprehensive income of a business entity. SFAS No. 158 also requires an
employer to measure the funded status of a plan as of the date of its year-end statement of
financial position, with limited exceptions. This statement is effective for fiscal years ending
after December 15, 2006. Our adoption of this statement did not have a material impact on our
financial position, results of operations or cash flows.
Reclassifications. In our Consolidated Statements of Operations for the year ended December
31, 2006, we present separately income and expense on deferred compensation plans. In the
accompanying Consolidated Statements of Operations, we reclassified the income and expense on
deferred compensation plans to be consistent with our 2006 presentation which resulted in a $6.4
million and $6.8 million increase to non-property income and to other expenses for the years ended
December 31, 2005 and 2004, respectively.
3. Merger with Summit Properties Inc.
On February 28, 2005, Summit Properties Inc. (Summit) was merged with and into Camden Summit
Inc., one of our wholly-owned subsidiaries (Camden Summit), pursuant to an Agreement and Plan of
Merger dated as of October 4, 2004 (the Merger Agreement), as amended. Prior to February 28,
2005, Summit was the sole general partner of Summit Properties Partnership, L.P. (the Camden
Summit Partnership). At the effective time, Camden Summit became the sole general partner of the
Camden Summit Partnership and the name of such partnership was changed to Camden Summit
Partnership, L.P. As of February 28, 2005, Summit owned or held an ownership interest in 48
operating communities comprised of 15,002 apartment homes with an additional 1,834 apartment homes
under construction in five new communities.
F-11
The aggregate consideration paid for the merger was as follows:
|
|
|
|
|
(in thousands) |
|
|
|
|
Fair value of Camden common shares issued |
|
$ |
544,065 |
|
Fair value of Camden Summit Partnership units issued |
|
|
81,564 |
|
Cash consideration paid for Summit common shares and partnership units
exchanged |
|
|
458,050 |
|
|
|
|
|
Total consideration |
|
|
1,083,679 |
|
Fair value of liabilities assumed, including debt |
|
|
984,847 |
|
|
|
|
|
Total purchase price |
|
$ |
2,068,526 |
|
|
|
|
|
Under the terms of the Merger Agreement, Summit stockholders had the opportunity to elect to
receive cash or Camden shares for their Summit stock. Each stockholders election was subject to
proration, depending on the elections of all Summit stockholders, such that the aggregate amount of
cash issued in the merger to Summits stockholders approximated $436.3 million. As a result of
this proration, Summit stockholders electing Camden shares received approximately .6383 of a Camden
common share and $1.4177 in cash for each of their shares of Summit common stock. The final
conversion ratio of the common shares was determined based on the average market price of our
common shares over a five day trading period preceding the effective time of the merger.
Fractional shares were paid in cash. Summit stockholders electing cash or who made no effective
election received $31.20 in cash for each of their Summit shares. We issued approximately 11.8
million common shares to Summit stockholders.
In conjunction with the merger, the limited partners in the Camden Summit Partnership were
offered, on a unit-by-unit basis, the opportunity to redeem their partnership units for $31.20 in
cash, without interest, or to remain in the Camden Summit Partnership following the merger at a
unit valuation equal to .6687 of a Camden common share. The limited partner elections resulted in
the redemption of 0.7 million partnership units for cash, for an aggregate of $21.7 million, and
the issuance of 1.8 million partnership units. The value of the common shares and partnership
units issued was determined based on the average market price of our common shares for the five day
period commencing two days prior to the announcement of the merger on October 4, 2004.
Revisions to the purchase price allocations during 2005 included reductions of $3.4 million
due to the write-down of a property classified as held for sale which was sold in July 2005 and
adjustments to retail lease commission balances, offset by increases of $3.9 million in accounts
payable, accrued expenses and other liabilities and $0.4 million to other minority interests.
Revisions to the purchase price during 2006 included increases of $1.3 million to land and $0.7
million to properties under development, including land, as a result of purchase price adjustments
primarily related to increases of $1.9 million in accounts payable, accrued expenses and other
liabilities for litigation.
F-12
The following table summarizes the estimated fair values of the assets acquired and
liabilities assumed at the time of merger, net of cash acquired:
|
|
|
|
|
(in thousands) |
|
|
|
|
Land |
|
$ |
299,321 |
|
Buildings and improvements |
|
|
1,528,124 |
|
Properties under development, including land |
|
|
153,142 |
|
Investments in joint ventures |
|
|
2,652 |
|
Properties held for sale |
|
|
29,741 |
|
Other assets, including the value of in-place leases of $32.6 million |
|
|
37,308 |
|
Cash and cash equivalents |
|
|
16,696 |
|
Restricted cash |
|
|
1,542 |
|
|
|
|
|
Total assets acquired |
|
|
2,068,526 |
|
|
|
|
|
Notes payable |
|
|
880,829 |
|
Accounts payable, accrued expenses and other liabilities |
|
|
97,612 |
|
Employee notes receivable |
|
|
(3,882 |
) |
Other minority interests |
|
|
10,288 |
|
|
|
|
|
Fair value of liabilities assumed, including debt |
|
|
984,847 |
|
|
|
|
|
Total consideration |
|
$ |
1,083,679 |
|
|
|
|
|
In connection with the merger, we incurred $69.8 million of termination, severance and
settlement of share-based compensation costs. Of this amount, Summit had paid $26.3 million prior
to the effective time of the merger. As of December 31, 2006, substantially all costs were paid.
The following unaudited pro forma financial information for the years ended December 31, 2005
and 2004 gives effect to the merger as if it had occurred at the beginning of the periods
presented. The pro forma financial information for the year ended December 31, 2005 includes pro
forma results for the first two months of 2005 and actual results for the remaining ten months.
The pro forma results are based on historical data and are not intended to be indicative of the
results of future operations.
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
(in thousands, except per share amounts) |
|
2005 |
|
2004 |
|
|
|
|
|
|
|
|
|
Total property revenues |
|
$ |
596,436 |
|
|
$ |
569,583 |
|
Net income to common shareholders |
|
|
184,318 |
|
|
|
165,898 |
|
Net income per common and common equivalent share Basic |
|
$ |
2.89 |
|
|
$ |
3.12 |
|
Net income per common and common equivalent share Diluted |
|
|
2.71 |
|
|
|
3.06 |
|
4. Operating Partnership and Minority Interests
At December 31, 2006, approximately 14% of our multifamily apartment homes were held in Camden
Operating, L.P (Camden Operating). Camden Operating has issued both common and preferred limited
partnership units. In connection with our joint venture in Camden Main & Jamboree, LP, as
discussed in Note 8, Investments in Joint Ventures, we issued 28,999 Series B common units during
the year ended December 31, 2006. As of December 31, 2006, we held 85.3% of the common limited
partnership units and the sole 1% general partnership interest of the operating partnership. The
remaining common limited partnership units, comprising 1,630,691 units, are primarily held by
former officers, directors and investors of Paragon Group, Inc., which we acquired in 1997. Each
common limited partnership unit is redeemable for one common share of Camden or cash at our
election. Holders of common limited partnership units are not entitled to rights as shareholders
prior to redemption of their common limited partnership units. No member of our management owns
Camden Operating common limited partnership units, and two of our ten trust managers own Camden
Operating common limited partnership units.
F-13
Camden Operating had $100 million of 7.0% Series B Cumulative Redeemable Perpetual Preferred
Units outstanding as of December 31, 2006. Distributions on the preferred units are payable
quarterly in arrears. The Series B preferred units are redeemable beginning in 2008 by the
operating partnership for cash at par plus the amount of any accumulated and unpaid distributions.
The preferred units are convertible beginning in 2013 by the holder into a fixed number of
corresponding Series B Cumulative Redeemable Perpetual Preferred Shares. The Series B preferred
units are subordinate to present and future debt. Distributions on the Series B preferred units
totaled $7.0 million for the years ended December 31, 2006, 2005 and 2004.
Additionally, Camden Operating had issued $53 million of 8.25% Series C Cumulative Redeemable
Perpetual Preferred Units. During the third quarter of 2004, we redeemed 1.4 million Series C
preferred units at their redemption price of $25.00 per unit, or an aggregate of $35.5 million,
plus accrued and unpaid distributions at which time we expensed the issuance cost associated with
these units. In January 2005, we redeemed the remaining 0.7 million Series C preferred units at
their redemption price of $25.00 per unit, or an aggregate of $17.5 million, plus accrued and
unpaid distributions, at which time we expensed the issuance cost associated with these units.
Distributions on the Series C preferred units totaled $28,000 and $3.5 million for the years ended
December 31, 2005 and 2004, respectively.
In conjunction with our acquisition of Oasis Residential, Inc. in 1998, we acquired the
controlling managing member interest in Oasis Martinique, LLC, which owns one property in Orange
County, California and is included in our consolidated financial statements. The remaining
interests, comprising 669,348 units, are exchangeable into 508,035 common shares.
In 2002, Summit entered into two separate joint ventures with a major financial services
institution (the investor member) to redevelop Summit Roosevelt and Summit Grand Parc, both
located in the Washington, D.C. Metro area, in a manner to permit the use of federal rehabilitation
income tax credits. The investor member contributed approximately $6.5 million for Summit
Roosevelt and approximately $2.6 million for Summit Grand Parc in equity to fund a portion of the
total estimated costs for the respective communities and will receive a preferred return on these
capital investments and an annual asset management fee with respect to each community. The
investor members interests in the joint ventures are subject to put/call rights during the sixth
and seventh years after the respective communities are placed in service. As a result of the
merger, we have assumed these joint ventures and they are consolidated in our financial statements.
At December 31, 2006, approximately 22% of our multifamily apartment homes were held in the
Camden Summit Partnership, as discussed in Note 3, Merger with Summit Properties Inc. This
operating partnership has issued common limited partnership units. As of December 31, 2006, we
held 91.9% of the common limited partnership units and the sole 1% general partnership interest of
the Camden Summit Partnership. The remaining common limited partnership units, comprising
1,621,891 million units, are primarily held by former officers, directors and investors of Summit.
Each common limited partnership unit is redeemable for one common share of Camden or cash at our
election. Holders of common limited partnership units are not entitled to rights as shareholders
prior to redemption of their common limited partnership units. No member of our management owns
Camden Summit Partnership common limited partnership units, and two of our ten trust managers own
Camden Summit Partnership common limited partnership units.
5. Income Taxes
We have maintained and intend to maintain our election as a REIT under the Internal Revenue
Code of 1986, as amended. To qualify as a REIT, we must meet a number of organizational and
operational requirements, including a requirement we distribute at least 90% of our taxable income
to our shareholders. As a REIT, we generally will not be subject to federal income tax on
distributed taxable income. 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. For the years ended December 31, 2006 and 2005, we designated
dividends from 2007 and 2006, respectively, to meet our dividend distribution requirements. If we
fail to qualify as a REIT in any taxable year, we will be subject to federal income taxes at
regular corporate rates, including any applicable alternative minimum tax. Taxable income from
non-REIT activities managed through taxable REIT subsidiaries is subject to applicable federal,
state and local income taxes.
F-14
The following table reconciles net income to REIT taxable income for the years ended December
31, 2006, 2005 and 2004:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
(in thousands) |
|
2006 |
|
|
2005 |
|
|
2004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
232,846 |
|
|
$ |
199,086 |
|
|
$ |
41,341 |
|
Net (income) loss of taxable REIT subsidiaries included above |
|
|
(6,540 |
) |
|
|
6,871 |
|
|
|
2,504 |
|
|
|
|
|
|
|
|
|
|
|
Net income from REIT operations |
|
|
226,306 |
|
|
|
205,957 |
|
|
|
43,845 |
|
Book depreciation and amortization, including discontinued operations |
|
|
163,673 |
|
|
|
174,993 |
|
|
|
108,880 |
|
Tax depreciation and amortization |
|
|
(177,153 |
) |
|
|
(142,303 |
) |
|
|
(100,803 |
) |
Book/tax difference on gains/losses from capital transactions |
|
|
(90,694 |
) |
|
|
5,439 |
|
|
|
29,627 |
|
Book/tax difference on merger costs |
|
|
(331 |
) |
|
|
(21,024 |
) |
|
|
|
|
Other book/tax differences, net |
|
|
(767 |
) |
|
|
(17,867 |
) |
|
|
(3,697 |
) |
|
|
|
|
|
|
|
|
|
|
REIT taxable income |
|
|
121,034 |
|
|
|
205,195 |
|
|
|
77,852 |
|
Dividends paid deduction |
|
|
(121,034) |
(1) |
|
|
(205,195 |
) |
|
|
(79,038 |
) |
|
|
|
|
|
|
|
|
|
|
Dividends paid in excess of taxable income |
|
$ |
|
|
|
$ |
|
|
|
$ |
(1,186 |
) |
|
|
|
|
|
|
|
|
|
|
(1) |
|
The dividend deduction includes designated dividends from 2007 of $6.2 million. |
A schedule of per share distributions we paid and reported to our shareholders is set
forth in the following tables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2006 |
|
|
2005 |
|
|
2004 (2) |
|
Common Share Distributions |
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary income |
|
$ |
0.26 |
|
|
$ |
0.11 |
|
|
$ |
0.97 |
|
Post May 5, 2004 long-term capital gain |
|
|
1.85 |
|
|
|
2.28 |
|
|
|
0.72 |
|
25% Sec. 1250 capital gain |
|
|
0.53 |
|
|
|
0.79 |
|
|
|
0.22 |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
2.64 |
|
|
$ |
3.18 |
|
|
$ |
1.91 |
|
|
|
|
|
|
|
|
|
|
|
Percentage of distributions representing tax preference items |
|
|
5.99 |
% |
|
|
3.91 |
% |
|
|
9.08 |
% |
(2) |
|
The dividend declared for the fourth quarter of 2004, with a record date of January 3, 2005, was taxable in 2005. |
At December 31, 2006, our taxable REIT subsidiaries had net operating loss carryforwards
(NOLs) of approximately $19.8 million for income tax purposes that expire in years 2020 to 2026.
Because NOLs are subject to certain change of ownership and separate return limitations, and
because it is unlikely the available NOLs will be utilized, no benefits of these NOLs have been
recognized in these consolidated financial statements.
SFAS No. 109, Accounting for Income Taxes, requires a public enterprise to disclose the
aggregate difference in the basis of its net assets for financial and tax reporting purposes. The
carrying value reported in our consolidated financial statements exceeded the tax basis by $1,165.9
million.
Texas Margin Tax. On May 18, 2006, the Texas Governor signed into law a Texas margin tax
which restructures the state business tax by replacing the taxable capital components of the
current franchise tax with a new taxable margin component. Since the tax base on the Texas
margin tax is derived from an income based measure, we believe the margin tax is an income tax and,
therefore, the provisions of SFAS 109 regarding the recognition of deferred taxes apply to the new
margin tax. In accordance with SFAS 109, the effect on deferred tax liabilities of a change in tax
law should be included in tax expense attributable to continuing operations in the period including
the enactment date. As a result, we calculated our deferred tax assets and liabilities for Texas
based on the new margin tax. The cumulative effect of the change was immaterial and the impact of
the change in deferred tax liabilities did not have a material impact on tax expense. Beginning in
2007, we anticipate we will incur tax expense related to this margin tax.
F-15
6. Per Share Data
Basic earnings per share is computed using income from continuing operations and the weighted
average number of common shares outstanding. Diluted earnings per share reflects common shares
issuable from the assumed conversion of common share options and awards granted and units
convertible into common shares. Only those items that have a dilutive impact on our basic earnings
per share are included in diluted earnings per share. For the years ended December 31, 2006 and
2004, 1.7 million and 1.9 million units convertible into common shares, respectively, were excluded
from the diluted earnings per share calculated as they were not dilutive.
The following table presents information necessary to calculate basic and diluted earnings per
share for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
(in thousands, except per share amounts) |
|
2006 |
|
|
2005 |
|
|
2004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share calculation |
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
128,968 |
|
|
$ |
155,126 |
|
|
$ |
26,303 |
|
Income from discontinued operations |
|
|
103,878 |
|
|
|
43,960 |
|
|
|
15,038 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
232,846 |
|
|
$ |
199,086 |
|
|
$ |
41,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations per share |
|
$ |
2.28 |
|
|
$ |
2.98 |
|
|
$ |
0.64 |
|
Income from discontinued operations per share |
|
|
1.83 |
|
|
|
0.85 |
|
|
|
0.36 |
|
|
|
|
|
|
|
|
|
|
|
Net income per share |
|
$ |
4.11 |
|
|
$ |
3.83 |
|
|
$ |
1.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding |
|
|
56,660 |
|
|
|
52,000 |
|
|
|
41,430 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share calculation |
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
128,968 |
|
|
$ |
155,126 |
|
|
$ |
26,303 |
|
Income allocated to common units |
|
|
2,432 |
|
|
|
2,053 |
|
|
|
41 |
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, as adjusted |
|
|
131,400 |
|
|
|
157,179 |
|
|
|
26,344 |
|
Income from discontinued operations |
|
|
103,878 |
|
|
|
43,960 |
|
|
|
15,038 |
|
Income from discontinued operations allocated to common units |
|
|
652 |
|
|
|
463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income, as adjusted |
|
$ |
235,930 |
|
|
$ |
201,602 |
|
|
$ |
41,382 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, as adjusted per share |
|
$ |
2.21 |
|
|
$ |
2.79 |
|
|
$ |
0.62 |
|
Income from discontinued operations per share |
|
|
1.75 |
|
|
|
0.79 |
|
|
|
0.36 |
|
|
|
|
|
|
|
|
|
|
|
Net income, as adjusted per share |
|
$ |
3.96 |
|
|
$ |
3.58 |
|
|
$ |
0.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
56,660 |
|
|
|
52,000 |
|
|
|
41,430 |
|
Incremental shares issuable from assumed conversion of: |
|
|
|
|
|
|
|
|
|
|
|
|
Common share options and awards granted |
|
|
725 |
|
|
|
483 |
|
|
|
434 |
|
Common units |
|
|
2,139 |
|
|
|
3,830 |
|
|
|
562 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding, as adjusted |
|
|
59,524 |
|
|
|
56,313 |
|
|
|
42,426 |
|
|
|
|
|
|
|
|
|
|
|
7. Property Acquisitions, Dispositions and Assets Held for Sale
Acquisitions. On January 31, 2006, we acquired the remaining 80% interest in Camden-Delta
Westwind, LLC, a joint venture in which we had a 20% interest, in accordance with the Agreement and
Assignment of Limited Liability Company Interest. The 80% interest was previously owned by
Westwind Equity, LLC (Westwind), an unrelated third party. As a result of the acquisition, we
paid Westwind $31.0 million, which included a $2.0 million non-refundable earnest money deposit
paid in October 2005. Concurrent with this transaction, the mezzanine loan we had provided to the
joint venture, which totaled $12.1 million, was canceled. Additionally, we repaid the outstanding
balance of a third-party construction loan, totaling $46.8 million. We used proceeds from our
unsecured line of credit facility to fund this purchase. The purchase price was allocated to the
tangible and intangible assets and liabilities acquired based on their estimated fair value at the
date of acquisition. The intangible assets acquired at acquisition include in-place leases of $0.5
million.
F-16
In July 2006, we acquired Camden Stoneleigh, a 390-apartment home community located in Austin,
Texas, for $35.3 million using proceeds from our unsecured line of credit. The purchase price of
this property was allocated to the tangible and intangible assets and liabilities acquired based on
their estimated fair values at the date of acquisition. Tangible assets, which include land,
buildings and improvements are being depreciated over their estimated useful lives, which range
from 5 to 35 years. The intangible assets acquired at acquisition include in-place leases of $0.6
million and below market leases of $0.1 million. Intangible assets are being amortized over 10
months, which is the estimated average remaining life of in-place leases at time of acquisition.
Discontinued Operations and Assets Held for Sale. For the years ended December 31, 2006, 2005
and 2004, income from discontinued operations included the results of operations of three operating
properties, containing 930 apartment homes, classified as held for sale at December 31, 2006 and
the results of operations of eight operating properties sold in 2006 through their sale dates. For
the years ended December 31, 2005 and 2004, income from discontinued operations also included the
results of operations of three operating properties sold during 2005 and one operating property
sold during 2004 through their sale dates. As of December 31, 2006, the three operating properties
held for sale had a net book value of $17.9 million.
The following is a summary of income from discontinued operations for the years presented
below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
(in thousands) |
|
2006 |
|
|
2005 |
|
|
2004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property revenues |
|
$ |
17,832 |
|
|
$ |
30,456 |
|
|
$ |
39,018 |
|
Total property expenses |
|
|
10,048 |
|
|
|
15,658 |
|
|
|
18,254 |
|
|
|
|
|
|
|
|
|
|
|
Net operating income |
|
|
7,784 |
|
|
|
14,798 |
|
|
|
20,764 |
|
Interest |
|
|
|
|
|
|
|
|
|
|
954 |
|
Depreciation |
|
|
1,350 |
|
|
|
6,549 |
|
|
|
11,453 |
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations |
|
$ |
6,434 |
|
|
$ |
8,249 |
|
|
$ |
8,357 |
|
|
|
|
|
|
|
|
|
|
|
During the year ended December 31, 2006, we recognized gains of $78.8 million from the sale of
eight operating properties to unaffiliated third parties. These sales generated net proceeds of
approximately $137.3 million. During the year ended December 31, 2005, we recognized gains of
$36.1 million from the sale of three operating properties, containing 1,317 apartment homes, to
unaffiliated third parties. During the year ended December 31, 2004, we recognized a gain of $8.4
million on the sale of one operating property, containing 552 apartment homes to an unaffiliated
third party.
Upon our decision to abandon efforts to develop certain land parcels and to market these
parcels as held for sale, we reclassified the operating expenses associated with these assets to
discontinued operations. At December 31, 2006, we had several undeveloped land parcels classified
as held for sale as follows:
|
|
|
|
|
|
|
|
|
($ in millions) |
|
|
|
|
|
Net Book |
|
Location |
|
Acres |
|
|
Value |
|
Southeast Florida |
|
|
3.1 |
|
|
$ |
12.3 |
|
Dallas |
|
|
2.6 |
|
|
|
2.5 |
|
|
|
|
|
|
|
|
|
Total land held for sale |
|
|
|
|
|
$ |
14.8 |
|
|
|
|
|
|
|
|
|
During the year ended December 31, 2006, we sold undeveloped land totaling an aggregate of 8.7
acres to unrelated third parties. In connection with these sales, we received net proceeds of
$41.0 million and recognized gains totaling $20.5 million. During the year ended December 31,
2004, we sold undeveloped land totaling 2.1 acres to an unrelated third party. In connection with
this sale, we recognized a gain totaling $1.0 million.
During 2004, in connection with our decision to dispose of a 2.4 acre parcel of undeveloped
land located in Dallas, we incurred an impairment charge of $1.1 million to write-down the carrying
value of the land to its fair value, less costs to sell.
F-17
Asset Dispositions and Partial Sales to Joint Ventures. During the year ended December 31,
2006, we recognized gains of $91.5 million from the partial sale of nine properties to an
affiliated unconsolidated joint venture. This partial sale generated net proceeds of approximately
$170.9 million. During the year ended December 31, 2005, we recognized gains of $132.1 million
from the partial sales of twelve properties to twelve affiliated unconsolidated joint ventures.
These partial sales generated net proceeds of approximately $316.8 million. The gains recognized
on the partial sales of these assets were included in continuing operations as we retained a
partial interest in the ventures which own these assets.
During the year ended December 31, 2006, we recognized gains of $0.5 million and $4.7 million
on the partial sales of land to two joint ventures located in Houston, Texas and College Park,
Maryland, respectively. The gains recognized on the sales of these assets were included in
continuing operations as we retained a partial interest in the ventures which own these assets.
During the year ended December 31, 2006, we recognized a gain of $0.8 million on the sale of
land located adjacent to one of our pre-development assets in College Park, Maryland. During the
year ended December 31, 2005, we recognized a gain of $0.8 million on the sale of land located
adjacent to one of our pre-development assets in Houston, Texas. Also during 2005, we sold
undeveloped land located in Dallas, Texas to an unrelated third party. In connection with our
decision to sell this undeveloped land, we recognized an impairment loss of $0.3 million. During
the year ended December 31, 2004, we recognized gains totaling $1.6 million on the sales of land
located adjacent to two of our pre-development assets in Houston, Texas. These gains were included
in continuing operations as the cash flows from these land parcels were not separately identifiable
from the cash flows generated by the adjacent pre-development assets.
8. Investments in Joint Ventures
The joint ventures described below are accounted for using the equity method. The joint
ventures in which we have an interest have been funded with secured, third-party debt and we are
not committed to any additional funding on third-party debt in relation to our joint ventures. We
have guaranteed our proportionate interest on construction loans in three of our development joint
ventures. Additionally, we eliminate fee income from property management services to the extent of
our ownership
Our contributions of real estate assets to joint ventures at formation where we receive cash
are treated as partial sales and, as a result, the amounts recorded as gain on sale of assets to
joint ventures represents the change in ownership of the underlying assets. Our initial investment
is determined based on our ownership percentage in the net book value of the underlying assets on
the date of the transaction.
As of December 31, 2006, our equity investments in unconsolidated joint ventures accounted for
under the equity method of accounting consisted of:
|
|
|
A 20% interest in Sierra-Nevada Multifamily Investments, LLC (Sierra-Nevada),
which owns 14 apartment communities with 3,098 apartment homes located in Las
Vegas. We are providing property management services to Sierra-Nevada and fees
earned for these services totaled $1.0 million, $1.1 million and $1.1 million for
the years ended December 31, 2006, 2005 and 2004, respectively. At December 31,
2006, Sierra-Nevada had total assets of $135.0 million and third-party secured debt
totaling $179.9 million. |
|
|
|
|
A 50% interest in Denver West Apartments, LLC (Denver West), which owns Camden
Denver West, a 320-apartment home community located in Denver, Colorado. We are
providing property management services to Denver West and fees earned for these
services totaled $0.1 million for each of the years ended December 31, 2006, 2005
and 2004, respectively. At December 31, 2006, Denver West had total assets of
$21.8 million and third-party secured debt totaling $17.0 million. |
|
|
|
|
A 20% interest in 12 apartment communities containing 4,034 apartment homes
(located in the Las Vegas, Phoenix, Houston, Dallas and Orange County, California
markets), which we partially sold to 12 individual affiliated joint ventures in
March 2005. We are providing property management services to the joint ventures
and fees earned for these services totaled $1.1 million |
F-18
|
|
|
and $0.8 million for the years ended December 31, 2006 and 2005, respectively. At
December 31, 2006, the joint ventures had total assets of $388.1 million and had
third-party secured debt totaling $272.6 million. |
|
|
|
|
A 30% interest in Camden Plaza, LP to which we partially sold undeveloped land
located in Houston, Texas in January 2006. In connection with this partial sale,
we received cash proceeds of $3.8 million. Of the total proceeds received,
approximately $2.0 million was recognized as an immediate distribution and was
applied against our initial investment balance. The remaining 70% interest is owned
by an unaffiliated third party, who contributed cash of $3.2 million to the joint
venture. The joint venture is developing a 271 apartment home community at a total
estimated cost to complete of $42.9 million. We are providing construction and
development services to this joint venture which totaled $1.1 million for 2006.
Concurrent with this transaction, we provided a $6.4 million mezzanine loan to the
joint venture which had a balance of $7.3 million at December 31, 2006, and is
reported as Notes receivable affiliates as discussed in Note 10. At December
31, 2006, the joint venture had total assets of $29.4 million and had third-party
secured debt totaling $17.6 million. |
|
|
|
|
A 30% interest in Camden Main & Jamboree, LP to which we contributed $1.4
million in cash and $1.9 million in Camden Operating Series B common units in March
2006. The remaining 70% interest is owned by an unaffiliated third party who
contributed $7.7 million to the joint venture. The joint venture purchased Camden
Main & Jamboree, a 290-apartment home community located in Irvine, California,
which is currently under development and has a total estimated cost to complete of
$107.1 million as of December 31, 2006. We are providing construction management
services to this joint venture which totaled $1.9 million for 2006. Concurrent
with this transaction, we provided a mezzanine loan totaling $15.8 million to the
joint venture, which had a balance of $17.7 million at December 31, 2006, and is
reported as Notes receivable affiliates as discussed in Note 10. At December
31, 2006, the joint venture had total assets of $95.1 million and had third-party
secured debt totaling $66.1 million. |
|
|
|
|
A 30% interest in Camden College Park, LP to which we partially sold undeveloped
land located in College Park, Maryland in August 2006. In connection with this
partial sale, we received cash proceeds of $45.0 million. Of the total proceeds
received, approximately $9.1 million was recognized as an immediate distribution
and was applied against our initial investment balance. The remaining 70% interest
is owned by an unaffiliated third party who contributed cash of $10.1 million to
the joint venture. The joint venture is developing a 508-apartment home community
and has a total estimated cost to complete of $139.9 million as of December 31,
2006. We are providing construction and development services to this joint venture
which totaled $1.9 million for 2006. Concurrent with this transaction, we provided
a mezzanine loan totaling $6.7 million to the joint venture, which had a balance of
$7.1 million at December 31, 2006, and is reported as Notes receivable -
affiliates as discussed in Note 10. At December 31, 2006, the joint venture had
total assets of $70.7 million and had third-party secured debt totaling $49.4
million. |
|
|
|
|
A 15% interest in G&I V Midwest Residential LLC to which we partially sold nine
apartment communities containing 3,237 apartment homes located in Kentucky and
Missouri in September 2006. The remaining 85% of the joint venture is owned by an
unaffiliated third party who contributed cash of $64.0 million to the joint
venture. In connection with this partial sale, we received cash proceeds of
approximately $194.9 million. Of the proceeds received, approximately $23.9
million was recognized as an immediate distribution and was applied against our
initial investment balance. We are providing property management services to the
joint venture, and fees earned for these services totaled $0.2 million for 2006. At
December 31, 2006, the joint venture had total assets of $245.0 million and had
third-party secured debt totaling $169.0 million. |
|
|
|
|
A 30% interest in two development joint ventures to which we contributed an
aggregate of $2.3 million in cash. The remaining 70% interest in each joint
venture is owned by an unaffiliated third party who contributed an aggregate of
$5.4 million. Each joint venture has purchased certain parcels of real estate in
Houston, Texas which it intends to develop into multifamily communities. |
F-19
|
|
|
Concurrent with this transaction, we provided mezzanine loans totaling $9.3 million
to the joint ventures and is reported as Notes receivable affiliates as
discussed in Note 10. We are committed to funding an additional $9.0 million under
the mezzanine loan. At December 31, 2006, the joint ventures had total assets of
$17.3 million. |
|
|
|
|
A 25% interest in the Station Hill, LLC (Station Hill) joint venture, which we
acquired in connection with the Summit merger. The remaining 75% of the joint
venture is owned by an unaffiliated third party who commenced termination of the
joint ventures operations as all properties in the joint venture were sold as of
December 31, 2006. In 2006, Station Hill sold three properties, Summit Creek, a
260-apartment home community located in Charlotte, North Carolina, Summit Hill, a
411-apartment home community located in Raleigh, North Carolina and Summit Hollow,
a 232-apartment home community located in Charlotte, North Carolina for $63.0
million. Our share of these dispositions totaled $15.8 million and we recognized
net gains on sale totaling $2.8 million during 2006. We provided property
management services to the joint venture, and fees earned for these services
totaled $33,000 and $0.2 million for the years ended December 31, 2006 and 2005,
respectively. |
9. Third-Party Construction Services
At December 31, 2006, we were under contract on third-party construction projects ranging from
$2.4 million to $35.0 million. We earn fees on these projects ranging from 3.5% to 6.4% of the
total contracted construction cost, which we recognize as earned. Fees earned from third-party
construction projects totaled $3.3 million, $2.4 million and $3.8 million for the years ended
December 31, 2006, 2005 and 2004, respectively, and are included in Fee and asset management
income in our consolidated statements of operations. We recorded warranty and repair related
costs on third-party construction projects of $5.3 million, $3.4 million and $1.0 million during
the years ended December 31, 2006, 2005 and 2004, respectively. These costs are first applied
against revenues earned on each project and any excess is included in Fee and asset management
expenses in our consolidated statements of operations.
10. Notes Receivable
We have a mezzanine financing program under which we provide secured financing to owners of
real estate properties. As of December 31, 2006, we had a $3.9 million secured note receivable due
from an unrelated third party. This note, which matures in 2008, accrues interest at 9.25% per
annum, which is recognized as earned. We have reviewed the terms and conditions underlying the
outstanding note receivable and believe this note is collectable, and no impairment existed at
December 31, 2006.
The following is a summary of our notes receivable under the mezzanine financing program
during the periods presented, excluding notes receivable from affiliates:
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in millions) |
|
|
|
|
|
December 31, |
|
Location |
|
Property Type |
|
Status |
|
2006 |
|
|
2005 |
|
Dallas/Fort Worth, Texas |
|
Multifamily |
|
Stabilized |
|
$ |
|
|
|
$ |
6.9 |
|
Houston, Texas |
|
Multifamily |
|
Predevelopment |
|
|
3.9 |
|
|
|
3.9 |
|
Austin, Texas |
|
Multifamily |
|
Stabilized |
|
|
|
|
|
|
2.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
|
$ |
3.9 |
|
|
$ |
13.3 |
|
|
|
|
|
|
|
|
|
|
|
|
During the years ended December 31, 2006 and 2005, three loans totaling $9.4 million and eight
loans totaling $31.4 million were repaid, respectively. These loans had rates ranging from 11.0%
to 18.0%. Included in these repayments were approximately $0.1 million and $0.8 million of
prepayment penalties, which are included in Fee and asset management income in our consolidated
statements of operations during the years ended December 31, 2006 and 2005, respectively.
We provided mezzanine construction financing in connection with certain of our joint venture
transactions as discussed in Note 8. As of December 31, 2006 and 2005, the balance of Notes
receivable affiliates totaled
F-20
$41.4 million and $11.9 million, respectively. The note outstanding at December 31, 2005 was
cancelled on January 31, 2006 in connection with our acquisition of the remaining 80% interest in
the joint venture. At the time the mezzanine loan was cancelled, the balance of the note was $12.1
million. The notes outstanding as of December 31, 2006 accrue interest at rates ranging from the
London Interbank Offered Rate (LIBOR) + 3% to 14% per year and mature through 2010.
11. Notes Payable
The following is a summary of our indebtedness:
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
(in millions) |
|
2006 |
|
|
2005 |
|
|
|
|
|
|
|
|
|
|
Unsecured line of credit and short-term borrowings |
|
$ |
206.0 |
|
|
$ |
251.0 |
|
|
|
|
|
|
|
|
|
|
Senior unsecured notes |
|
|
|
|
|
|
|
|
$50.0 million 7.11% Notes, due 2006 |
|
|
|
|
|
|
50.0 |
|
$75.0 million 7.16% Notes, due 2006 |
|
|
|
|
|
|
74.9 |
|
$50.0 million 7.28% Notes, due 2006 |
|
|
|
|
|
|
50.0 |
|
$50.0 million 4.30% Notes, due 2007 |
|
|
51.0 |
|
|
|
52.3 |
|
$150.0 million 5.98% Notes, due 2007 |
|
|
149.9 |
|
|
|
149.8 |
|
$100.0 million 4.74% Notes, due 2009 |
|
|
99.9 |
|
|
|
99.9 |
|
$250.0 million 4.39% Notes, due 2010 |
|
|
249.9 |
|
|
|
249.9 |
|
$100.0 million 6.77% Notes, due 2010 |
|
|
99.9 |
|
|
|
99.9 |
|
$150.0 million 7.69% Notes, due 2011 |
|
|
149.7 |
|
|
|
149.6 |
|
$200.0 million 5.93% Notes, due 2012 |
|
|
199.4 |
|
|
|
199.4 |
|
$200.0 million 5.45% Notes, due 2013 |
|
|
199.1 |
|
|
|
199.0 |
|
$250.0 million 5.08% Notes, due 2015 |
|
|
248.6 |
|
|
|
248.5 |
|
|
|
|
|
|
|
|
|
|
|
1,447.4 |
|
|
|
1,623.2 |
|
|
|
|
|
|
|
|
|
|
Medium-term notes |
|
|
|
|
|
|
|
|
$25.0 million 3.91% Notes, due 2006 |
|
|
|
|
|
|
25.3 |
|
$15.0 million 7.63% Notes, due 2009 |
|
|
15.0 |
|
|
|
15.0 |
|
$25.0 million 4.64% Notes, due 2009 |
|
|
26.6 |
|
|
|
27.2 |
|
$10.0 million 4.90% Notes, due 2010 |
|
|
11.2 |
|
|
|
11.5 |
|
$14.5 million 6.79% Notes, due 2010 |
|
|
14.5 |
|
|
|
14.5 |
|
$35.0 million 4.99% Notes, due 2011 |
|
|
38.8 |
|
|
|
39.5 |
|
|
|
|
|
|
|
|
|
|
|
106.1 |
|
|
|
133.0 |
|
|
|
|
|
|
|
|
Total unsecured notes |
|
|
1,759.5 |
|
|
|
2,007.2 |
|
|
|
|
|
|
|
|
|
|
Secured notes |
|
|
|
|
|
|
|
|
4.55% - 8.50% Conventional Mortgage Notes, due 2007 - 2013 |
|
|
506.4 |
|
|
|
529.2 |
|
4.20% - 7.29% Tax-exempt Mortgage Notes, due 2025 - 2028 |
|
|
65.1 |
|
|
|
96.7 |
|
|
|
|
|
|
|
|
|
|
|
571.5 |
|
|
|
625.9 |
|
|
|
|
|
|
|
|
Total notes payable |
|
$ |
2,331.0 |
|
|
$ |
2,633.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Floating rate debt included in unsecured line of credit (5.56% - 5.79%) |
|
$ |
206.0 |
|
|
$ |
251.0 |
|
Floating rate tax-exempt debt included in secured notes (4.20% - 4.53%) |
|
|
58.6 |
|
|
|
90.0 |
|
Net book value of real estate assets subject to secured notes |
|
|
914.1 |
|
|
|
985.2 |
|
As a result of the Summit merger, we assumed $488.4 million in conventional mortgage loans
with effective interest rates ranging from 3.61% to 5.07% per year. We also assumed $50 million in
senior unsecured notes payable issued by Summit in 1997, which are due in August 2007, with an
effective interest rate of 4.30%, payable quarterly, and $120 million in medium-term notes, with
effective interest rates ranging from 3.59% to 4.99%.
In connection with the merger, we recorded a $33.9 million fair value adjustment to account
for the difference between the fixed rates and market rates for the mortgage loans, notes payable,
and medium-term notes. The fixed interest rates on the various borrowings we assumed upon
completion of the merger with Summit were primarily above prevailing market rates.
F-21
The following is a summary of the debt assumed at the time of merger:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book |
|
|
Fair Value |
|
|
Fair |
|
(in millions) |
|
Value |
|
|
Adjustment |
|
|
Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured notes |
|
|
|
|
|
|
|
|
|
|
|
|
3.59% - 4.99% Notes, due 2005 - 2011 |
|
$ |
170.0 |
|
|
$ |
14.8 |
|
|
$ |
184.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured notes |
|
|
|
|
|
|
|
|
|
|
|
|
Secured Credit Facility (1) |
|
|
188.5 |
|
|
|
|
|
|
|
188.5 |
|
3.61% - 5.07% Mortgage Notes, due 2005 - 2013 |
|
|
488.4 |
|
|
|
19.1 |
|
|
|
507.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
676.9 |
|
|
|
19.1 |
|
|
|
696.0 |
|
|
|
|
|
|
|
|
|
|
|
Total notes payable |
|
$ |
846.9 |
|
|
$ |
33.9 |
|
|
$ |
880.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
In connection with the merger, on February 28, 2005, we repaid amounts
outstanding under the Summit secured credit facility using our $600 million credit
facility. |
In January 2005, we entered into a credit agreement which increased our unsecured credit
facility to $600 million, with the ability to further increase it up to $750 million. This $600
million unsecured line of credit was originally scheduled to mature in January 2008. In January
2006, we entered into an amendment to our credit agreement to extend the maturity by two years to
January 2010 and to amend certain covenants. The scheduled interest rate is based on spreads over
LIBOR or the Prime Rate. The scheduled interest rate spreads are subject to change as our credit
ratings change. Advances under the line of credit may be priced at the scheduled rates, or we may
enter into bid rate loans with participating banks at rates below the scheduled rates. These bid
rate loans have terms of six months or less and may not exceed the lesser of $300 million or the
remaining amount available under the line of credit. The line of credit is subject to customary
financial covenants and limitations, all of which we were in compliance with at December 31, 2006.
Our line of credit provides us with the ability to issue up to $100 million in letters of
credit. While our issuance of letters of credit does not increase our borrowings outstanding under
our line, it does reduce the amount available. At December 31, 2006, we had outstanding letters
of credit totaling $31.1 million, and had $362.9 million available under our unsecured line of
credit.
During the first quarter of 2005, we funded the cash portion of the merger consideration and
payment of estimated fees and other expenses related to the merger using borrowings primarily from
our $500 million senior unsecured bridge facility. The bridge facility had a term of 364 days from
funding and an interest rate of LIBOR plus 80 basis points, which was subject to certain
conditions. Certain of our subsidiaries had guaranteed any outstanding obligation under the bridge
facility. We repaid all outstanding borrowings on the $500 million senior unsecured bridge
facility and terminated the facility during the first quarter of 2005.
In connection with the merger, we assumed Summits interest rate swap agreement with a
notional amount of $50.0 million, relating to $50.0 million of 7.20% fixed rate notes issued.
Under the interest rate swap agreement, through the maturity date of August 15, 2007, (a) Summit
agreed to pay to the counterparty the interest on a $50.0 million notional amount at a floating
interest rate of three-month LIBOR plus 241.75 basis points, and (b) the counterparty had agreed to
pay Summit the interest on the same notional amount at the fixed rate of the underlying debt
obligation. The swap was designated as a fair value hedge of the underlying fixed rate debt
obligation and was recorded in Other assets, net in the allocation of the purchase price
discussed in Note 3.
In March 2005, we terminated the interest rate swap and received $0.6 million from the
counterparty. In accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, we are recording the $0.6 million as a reduction of interest expense over the period
beginning from the termination date through the maturity date of the underlying debt obligation of
August 15, 2007.
In June 2005, we issued from our $1.1 billion shelf registration an aggregate principal amount
of $250 million 5.0% ten-year senior unsecured notes maturing on June 15, 2015. Interest on the
notes is payable on June 15 and December 15 commencing December 15, 2005. We may redeem these
notes at any time at a redemption price
F-22
equal to the principal amount and accrued interest, plus a make-whole provision. The notes are a
direct, senior unsecured obligation and rank equally with all other unsecured and unsubordinated
indebtedness. The proceeds received from the sale of the notes were $246.8 million, net of
issuance costs, and were used to reduce amounts outstanding under our unsecured line of credit.
During 2006 and 2005, we repaid $200.0 million and $25.0 million, respectively, of maturing
unsecured notes with an effective interest rate of 6.8% and 3.6%, respectively. We also repaid one
conventional mortgage note during 2006 totaling $13.1 million, which had an interest rate of 7.6%.
Additionally, we repaid six conventional mortgage notes during 2005 totaling $40.8 million which
had a weighted average interest rate of 7.3%. We repaid all notes payable using proceeds available
under our unsecured line of credit to take advantage of lower borrowing rates.
In connection with our partial sale of nine apartment communities to a joint venture during
the year ended December 31, 2006, as discussed in Note 8, three tax-exempt mortgage notes totaling
$30.5 million were assumed by the joint venture.
At December 31, 2006 and 2005, the weighted average interest rate on our floating rate debt,
which includes our unsecured line of credit, was 5.4% and 4.5%, respectively.
Our indebtedness, excluding our unsecured line of credit, had a weighted average maturity of
4.7 years. Scheduled repayments on outstanding debt, including our line of credit, and the
weighted average interest rate on maturing debt at December 31, 2006 are as follows:
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average |
|
Year |
|
Amount |
|
|
Interest Rate |
|
2007 |
|
$ |
219.9 |
|
|
|
5.6 |
% |
2008 |
|
|
200.7 |
|
|
|
4.8 |
|
2009 |
|
|
198.2 |
|
|
|
5.0 |
|
2010 |
|
|
658.8 |
|
|
|
5.4 |
|
2011 |
|
|
248.4 |
|
|
|
6.5 |
|
2012 and thereafter |
|
|
805.0 |
|
|
|
5.3 |
|
|
|
|
|
|
|
|
Total |
|
$ |
2,331.0 |
|
|
|
5.4 |
% |
|
|
|
|
|
|
|
F-23
12. Share Based Compensation and Benefit Plans
Adoption of SFAS 123(R). Under SFAS No. 123(R), we account for share-based awards on a
prospective basis, with compensation expense, net of estimated forfeitures, being recognized in our
statement of operations beginning in the first quarter of 2006 using the grant-date fair values.
Compensation cost for all share-based awards requires measurement at fair value on the grant
date and recognition of compensation expense over the requisite service period for awards expected
to vest. The fair value of stock option grants was determined using the Black-Scholes valuation
model, which is consistent with our prior valuation techniques utilized for options granted after
January 1, 2003, as previously reported in disclosures required under SFAS No. 123, Accounting for
Stock Based Compensation, (SFAS No. 123) as amended by SFAS No. 148, Accounting for Stock-Based
Compensation Transition and Disclosure (SFAS No. 148). Employee awards granted prior to
January 1, 2003 were accounted for under the recognition and measurement principles of Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, (APB 25) and related
interpretations.
The adoption of SFAS No. 123(R) changes the accounting for our stock options and share awards
(SAs) under our 2002 Share Incentive Plan and our 1993 Share Incentive Plan as discussed below.
Share Awards. SAs have a vesting period of up to ten years. The compensation cost for SAs
is based on the market value of the shares on the date of grant. The fair value method under SFAS
No. 123(R) is similar to the fair value method under SFAS No. 123, as amended by SFAS No. 148, with
respect to measurement and recognition of share-based compensation. However, SFAS No. 123
permitted us to recognize forfeitures as they occurred, while SFAS No. 123(R) requires us to
estimate future forfeitures. To determine our estimated future forfeitures, we used actual
forfeiture history.
Incentive Plan. During 2002, our Board of Trust Managers adopted, and our shareholders
approved, the 2002 Share Incentive Plan of Camden Property Trust (the 2002 Share Plan). Under
the 2002 Share Plan, we may issue up to 10% of the total of (i) the number of our common shares
outstanding as of the plan date, February 5, 2002, plus (ii) the number of our common shares
reserved for issuance upon conversion of securities convertible into or exchangeable for our common
shares, plus (iii) the number of our common shares held as treasury shares. Compensation awards
that can be granted under the 2002 Share Plan include various forms of incentive awards, including
incentive share options, non-qualified share options and share awards. The class of eligible
persons that can receive grants of incentive awards under the 2002 Share Plan consists of key
employees, consultants and non-employee trust managers as determined by the Compensation Committee
of our Board of Trust Managers. The 2002 Share Plan does not have a termination date; however, no
incentive share options will be granted under this plan after February 5, 2012.
We also have a non-compensatory option plan (the 1993 Share Plan) that was amended in 2000
by our shareholders and Board of Trust Managers. The terms and conditions of the 1993 Share Plan
are similar to the 2002 Share Plan, except no incentive awards were able to be granted under the
1993 Share Plan after May 27, 2004. As the terms and conditions of the 1993 Share Plan and the
2002 Share Plan are similar, when the term plan is used in the following discussion, we are
referring to the plan from which the incentive award was granted.
F-24
Valuation Assumptions. The weighted average fair value of options granted was $7.88 and $4.47
in 2006 and 2005, respectively. We calculated the fair value of each option award on the date of
grant using the Black-Scholes option pricing model. The following assumptions were used for each
respective period:
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
December 31, |
|
|
2006 |
|
2005 |
Expected volatility |
|
|
16.6 |
% |
|
|
18.0 |
% |
Risk-free interest rate |
|
|
4.4 |
% |
|
|
4.2 |
% |
Expected dividend yield |
|
|
4.1 |
% |
|
|
5.6 |
% |
Expected life (in years) |
|
|
5 |
|
|
|
10 |
|
Our computation of expected volatility for 2006 is based on the historical volatility of our
common shares over a time period equal to the expected term of the option and ending on the grant
date. Prior to 2006, our computation of expected volatility was based on historical volatility of
our common shares over a time period from the inception of the 1993 Share Incentive Plan and ending
on the grant date. The interest rate for periods within the contractual life of the award is based
on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield on
our common shares is calculated using the annual dividends paid in prior year. Our computation of
expected life for 2006 was determined based on historical experience of similar awards, giving
consideration to the contractual terms of the share-based awards.
Options. Options are exercisable, subject to the terms and conditions of the plan, in
increments of 33.33% per year on each of the first three anniversaries of the date of grant. The
plan provides that the exercise price of an option will be determined by the Compensation Committee
of the Board 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. Options exercised during
2006 were exercised at prices ranging from $24.88 to $42.90 per share. At December 31, 2006,
options outstanding were exercisable at prices ranging from $24.88 to $62.32 per share and had a
weighted average remaining contractual life of 6.2 years.
The following table summarizes share options outstanding and exercisable at December 31, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Options |
|
|
Exercisable Options |
|
|
|
|
Range of |
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
Weighted |
|
|
Remaining |
|
Exercise |
|
|
|
|
|
|
Average |
|
|
|
|
|
|
Average |
|
|
Contractual |
|
Prices |
|
|
Number |
|
|
Price |
|
|
Number |
|
|
Price |
|
|
Life |
|
$24.88-$40.40 |
|
|
|
386,321 |
|
|
$ |
34.36 |
|
|
|
386,321 |
|
|
$ |
34.36 |
|
|
5.0 years |
$41.90-$43.90 |
|
|
|
451,538 |
|
|
|
42.91 |
|
|
|
318,538 |
|
|
|
42.91 |
|
|
6.7 years |
$44.00-$62.32 |
|
|
|
445,838 |
|
|
|
48.39 |
|
|
|
312,506 |
|
|
|
49.62 |
|
|
6.9 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total options |
|
|
|
1,283,697 |
|
|
$ |
42.24 |
|
|
|
1,017,365 |
|
|
$ |
41.73 |
|
|
6.2 years |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In 1998, in connection with the merger with Oasis Residential, Inc., we assumed the Oasis
stock incentive plans. We converted all unexercised Oasis stock options issued under the former
Oasis stock incentive plans into options to purchase Camden common shares. All of the Oasis
options became fully vested upon conversion and have a weighted average remaining contractual life
of 0.6 years. As of December 31, 2006, there were 1,140 Oasis options outstanding, which are
exercisable at $30.63 per share.
F-25
The following are summaries of the activity of the 1993 Share Plan and the 2002 Share Plan for the
three years ended December 31, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1993 Share Plan |
|
Options and Share awards |
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
Average |
|
|
|
|
|
|
Average |
|
|
|
|
|
|
Average |
|
|
|
2006 |
|
|
2006 Price |
|
|
2005 |
|
|
2005 Price |
|
|
2004 |
|
|
2004 Price |
|
Balance at January 1 |
|
|
2,045,730 |
|
|
$ |
32.12 |
|
|
|
2,201,915 |
|
|
$ |
31.57 |
|
|
|
3,055,467 |
|
|
$ |
30.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercised |
|
|
(89,879 |
) |
|
|
32.24 |
|
|
|
(154,165 |
) |
|
|
32.17 |
|
|
|
(776,032 |
) |
|
|
34.75 |
|
Forfeited |
|
|
(1,086 |
) |
|
|
29.44 |
|
|
|
|
|
|
|
|
|
|
|
(63,981 |
) |
|
|
30.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net options |
|
|
(90,965 |
) |
|
|
|
|
|
|
(154,165 |
) |
|
|
|
|
|
|
(840,013 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forfeited |
|
|
(965 |
) |
|
|
34.71 |
|
|
|
(2,020 |
) |
|
|
34.22 |
|
|
|
(13,539 |
) |
|
|
32.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net share awards |
|
|
(965 |
) |
|
|
|
|
|
|
(2,020 |
) |
|
|
|
|
|
|
(13,539 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31 |
|
|
1,953,800 |
|
|
$ |
31.99 |
|
|
|
2,045,730 |
|
|
$ |
32.12 |
|
|
|
2,201,915 |
|
|
$ |
31.57 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable options at December 31 |
|
|
262,779 |
|
|
$ |
32.78 |
|
|
|
245,454 |
|
|
$ |
33.61 |
|
|
|
182,690 |
|
|
$ |
32.78 |
|
Vested share awards at December 31 |
|
|
1,317,733 |
|
|
$ |
28.85 |
|
|
|
1,283,225 |
|
|
$ |
28.71 |
|
|
|
1,121,611 |
|
|
$ |
28.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares |
|
|
|
|
|
|
Available |
|
|
|
|
|
|
for |
|
|
|
|
2002 Share Plan |
|
Issuance |
|
|
Options and Share awards |
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
|
Average |
|
|
|
|
|
|
Average |
|
|
|
|
|
|
Average |
|
|
|
2006 |
|
|
2006 |
|
|
2006 Price |
|
|
2005 |
|
|
2005 Price |
|
|
2004 |
|
|
2004 Price |
|
Balance at January 1 |
|
|
3,458,630 |
|
|
|
1,334,332 |
|
|
$ |
42.72 |
|
|
|
1,042,623 |
|
|
$ |
40.33 |
|
|
|
616,800 |
|
|
$ |
35.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200,000 |
|
|
|
45.53 |
|
|
|
412,500 |
|
|
|
42.88 |
|
Exercised |
|
|
|
|
|
|
(75,366 |
) |
|
|
35.50 |
|
|
|
(144,783 |
) |
|
|
37.20 |
|
|
|
(129,904 |
) |
|
|
36.87 |
|
Forfeited |
|
|
1,534 |
|
|
|
(1,534 |
) |
|
|
36.87 |
|
|
|
(5,320 |
) |
|
|
36.87 |
|
|
|
(77,987 |
) |
|
|
37.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net options |
|
|
1,534 |
|
|
|
(76,900 |
) |
|
|
|
|
|
|
49,897 |
|
|
|
|
|
|
|
204,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Granted |
|
|
(270,658 |
) |
|
|
270,658 |
|
|
|
65.24 |
|
|
|
258,322 |
|
|
|
46.99 |
|
|
|
238,395 |
|
|
|
44.24 |
|
Forfeited |
|
|
29,179 |
|
|
|
(29,179 |
) |
|
|
52.63 |
|
|
|
(16,510 |
) |
|
|
44.74 |
|
|
|
(17,181 |
) |
|
|
37.30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net share awards |
|
|
(241,479 |
) |
|
|
241,479 |
|
|
|
|
|
|
|
241,812 |
|
|
|
|
|
|
|
221,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31 |
|
|
3,218,685 |
|
|
|
1,498,911 |
|
|
$ |
46.40 |
|
|
|
1,334,332 |
|
|
$ |
42.72 |
|
|
|
1,042,623 |
|
|
$ |
40.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable options at December 31 |
|
|
|
|
|
|
754,586 |
|
|
$ |
44.84 |
|
|
|
586,103 |
|
|
$ |
42.38 |
|
|
|
403,362 |
|
|
$ |
40.77 |
|
Vested share awards at December 31 |
|
|
|
|
|
|
354,850 |
|
|
$ |
46.44 |
|
|
|
168,691 |
|
|
$ |
40.03 |
|
|
|
41,702 |
|
|
$ |
33.95 |
|
Employee Share Purchase Plan. We have established an ESPP for all active employees and
officers, who have completed one year of continuous service. Participants may elect to purchase
Camden common shares through payroll deductions and/or through semi-annual contributions. At the
end of each six-month offering period, each participants account balance is applied to acquire
common shares at 85% of the market value, as defined, on the first or last day of the offering
period, whichever price is lower. The adoption of SFAS No. 123(R) had no effect on the accounting
surrounding our ESPP as the plan was previously deemed compensatory under the provisions of SFAS
No. 123. We currently use treasury shares to satisfy ESPP share requirements. Each participant
must hold
F-26
the shares purchased for nine months in order to receive the discount, and a participant may not
purchase more than $25,000 in value of shares during any plan year, as defined. We expensed $0.5
million, $0.2 million, and $0.2 million related to ESPP purchases during 2006, 2005 and 2004,
respectively. There were 30,352, 25,840 and 20,126 shares purchased under the ESPP during 2006,
2005 and 2004, respectively. The weighted average fair value of ESPP shares purchased in 2006,
2005 and 2004 was $73.61, $53.51 and $47.88 per share, respectively. In January 2007, 6,211 shares
were purchased under the ESPP related to the 2006 plan year.
Pro Forma Information for Periods Prior to the Adoption of SFAS 123(R). The following table
illustrates the effect on net income and net income per share had we applied the fair value
recognition provisions of SFAS No. 123 to all outstanding and unvested option grants and Employee
Share Purchase Plan (ESPP) awards for the years ended December 31, 2005 and 2004, prior to the
adoption of SFAS No. 123(R):
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2005 |
|
|
2004 |
|
Net income, as reported |
|
$ |
199,086 |
|
|
$ |
41,341 |
|
Add: stock-based employee compensation expense included
in reported net income |
|
|
9,558 |
|
|
|
3,842 |
|
Deduct: total stock-based employee compensation expense
determined under fair value method for all awards |
|
|
(9,764 |
) |
|
|
(4,536 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net income |
|
$ |
198,880 |
|
|
$ |
40,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
Basic as reported |
|
$ |
3.83 |
|
|
$ |
1.00 |
|
Basic pro forma |
|
|
3.82 |
|
|
|
0.98 |
|
|
|
|
|
|
|
|
|
|
Diluted as reported |
|
$ |
3.58 |
|
|
$ |
0.98 |
|
Diluted pro forma |
|
|
3.58 |
|
|
|
0.96 |
|
Impact of SFAS No. 123(R). Share-based compensation expense recognized during the year ended
December 31, 2006 decreased income from continuing operations and net income by $0.6 million, and
increased capitalized compensation cost by $0.2 million. The $0.6 million decrease to income from
continuing operations and net income for the year ended December 31, 2006 was primarily related to
expense associated with the accelerated vesting of certain share awards granted to individuals who
met retirement conditions as defined in the 2002 Share Incentive Plan. As a result of SFAS 123(R),
there was a $0.01 impact to basic and diluted earnings per share for the year ended December 31,
2006.
In our Consolidated Balance Sheets as of December 31, 2006, we presented unvested share awards
as a component of Additional paid-in capital. We previously presented unvested share awards as a
separate component of shareholders equity. In the accompanying Consolidated Balance Sheets, we
reclassified the unvested share awards outstanding as of December 31, 2005 totaling $13.0 million
to additional paid-in capital. These amounts represent the unvested portions of the estimated fair
value of obligations under our share awards. There was no impact to the Consolidated Statements of
Cash Flows as a result of our adoption of SFAS 123(R).
Accelerated Vesting. On October 30, 2006, the Compensation Committee of the Board of Trust
Managers of Camden Property Trust authorized the acceleration of vesting of all unvested share
awards held by two members of senior management issued under the 2002 share incentive plan. As a
result of vesting acceleration, an aggregate of 76,542 share awards that otherwise would have
vested from time to time over the next five years became immediately exercisable. All other terms
and conditions applicable to such share awards remain in effect. By accelerating the vesting of
these share awards, we recognized a one-time expense in 2006 of approximately $4.2 million. This
action will reduce compensation expense by an equivalent amount over the five-year period these
share awards would have originally vested.
F-27
Rabbi Trust. We have established a rabbi trust for a select group of participants in which share
awards granted under the share incentive plan and salary and other cash amounts earned may be
deposited. The rabbi trust is an irrevocable trust and no portion of the trust fund may be used
for any purpose other than the delivery of those assets to the participants. The assets held in
the rabbi trust are subject to the claims of the Companys general creditors in the event of
bankruptcy or insolvency. As of December 31, 2006, the rabbi trust is in use only for deferrals
made prior to 2005, including bonuses related to service in 2004 but paid in 2005.
We follow the provisions of EITF 97-14 Accounting for Deferred Compensation Arrangements
Where the Amounts Are Held in a Rabbi Trust and Invested regarding the accounting for the rabbi
trust. As a result, the assets of the rabbi trust are consolidated into our financial statements.
Granted share awards held by the rabbi trust are classified in equity in a manner similar to the
manner in which treasury stock is accounted. Subsequent changes in the fair value of the shares
are not recognized. The deferred compensation obligation is classified as an equity instrument and
changes in the fair value of the amount owed to the participant are not recognized. At December
31, 2006 and 2005, approximately 2.2 million and 2.3 million share awards, respectively, were held
in the rabbi trust. Additionally, as of December 31, 2006 and 2005, the rabbi trust was holding
trading securities totaling $65.8 million and $53.8 million, respectively, which represents cash
deferrals made by plan participants. Market value fluctuations on these trading securities are
recognized in income in accordance with SFAS No. 115, Accounting for Certain Investments in Debt
and Equity Securities, and the fair value of the liability due to participants is adjusted
accordingly.
At December 31, 2006 and 2005, $33.7 million and $33.6 million, respectively, was required to
be paid to us by plan participants upon the withdrawal of any assets from the trust, and is
included in Accounts receivable-affiliates in our consolidated financial statements.
Non-Qualified Deferred Compensation Plan. The Non-Qualified Deferred Compensation Plan (the
Plan), effective December 1, 2004, is an unfunded arrangement established and maintained
primarily for the benefit of a select group of participants. Eligible participants shall commence
participation in the Plan on the date the deferral election first becomes effective. Participants
in the Plan may elect to defer no less than 5% of total compensation, including option awards and
restricted share awards. We will credit to the participants account an amount equal to the amount
designated as the participants deferral for the plan year as indicated in the participants
deferral election. Any modification to or termination of the Plan will not reduce a participants
right to any vested amounts already credited to his or her account. At December 31, 2006 and 2005,
approximately 0.4 million and 0.2 million share awards, respectively, were held in the Plan.
Additionally, as of December 31, 2006 and 2005, the Plan was holding trading securities totaling
$15.6 million and $8.9 million, respectively, which represents cash deferrals made by plan
participants. Market value fluctuations on these trading securities are recognized in income in
accordance with SFAS No. 115 and the fair value of the liability due to participants is adjusted
accordingly.
401(k) Savings Plan. We have a 401(k) savings plan, which is a voluntary defined contribution
plan. Under the savings plan, every employee is eligible to participate beginning on the earlier of
January 1, April 1, July 1 or October 1 following the date the employee has completed six months of
continuous service with us. Each participant may make contributions to the savings plan by means of
a pre-tax salary deferral, which may not be less than 1% nor more than 60% of the participants
compensation. The federal tax code limits the annual amount of salary deferrals that may be made
by any participant. We may make matching contributions on the participants behalf up to a
predetermined limit. The matching contributions made for the years ended December 31, 2006, 2005
and 2004 were $1.0 million, $1.2 million and $0.8 million, respectively. A participants salary
deferral contribution will always be 100% vested and nonforfeitable. A participant will become
vested in our matching contributions 33.33% after one year of service, 66.67% after two years of
service and 100% after three years of service. Administrative expenses under the savings plan were
paid by us and were not material.
13. Securities Repurchase Program
In 1998, we began repurchasing our common equity securities under a program approved by our
Board of Trust Managers. To date, the Board has authorized us to repurchase or redeem up to $250
million of our securities through open market purchases and private transactions. As such, we had
repurchased approximately 8.8 million common shares and redeemed approximately 106,000 common units
for a total cost of $243.6 million. At
F-28
December 31, 2006 and 2005, 8.6 million shares were held in treasury. No shares or units were
repurchased under this program during 2006 and 2005.
14. Common Shares
In June 2006, we issued 3.6 million common shares at $71.25 per share in a public equity
offering. We used the net proceeds of $254.9 million to reduce indebtedness on our unsecured line
of credit and for general corporate purposes.
We filed an automatic shelf registration statement with the Securities and Exchange Commission
in June 2006 which became effective upon filing. We may use the shelf registration statement to
offer, from time to time, common shares, preferred shares, debt securities or warrants. Our
declaration of trust provides that we may issue up to 110,000,000 shares of beneficial interest,
consisting of 100,000,000 common shares and 10,000,000 preferred shares. As of December 31, 2006,
we had 65,005,959 common shares outstanding under our declaration of trust.
15. Related Party Transactions
We perform property management services for properties owned by joint ventures in which we own
an interest. Management fees earned on these properties amounted to $2.4 million, $2.2 million and
$2.2 million for the years ended December 31, 2006, 2005 and 2004, respectively. See further
discussion of our investments in joint ventures in Note 8.
In conjunction with our merger with Summit, we acquired employee notes receivable from nine
former employees of Summit totaling $3.9 million. Subsequent to the merger, five employees repaid
their loans totaling $1.8 million. At December 31, 2006, the notes receivable had an outstanding
balance of $2.0 million. As of December 31, 2006, the employee notes receivable were 100% secured
by Camden common shares.
16. Fair Value of Financial Instruments
Disclosure about the fair value of financial instruments is based on pertinent information
available to management as of December 31, 2006 and 2005. Considerable judgment is necessary to
interpret market data and develop estimated fair values. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts we could obtain on disposition of the
financial instruments. The use of different market assumptions and/or estimation methodologies may
have a material effect on the estimated fair value amounts.
As of December 31, 2006 and 2005, management estimated the carrying value of cash and cash
equivalents, restricted cash, accounts receivable, notes receivable, investments and liabilities
under deferred compensation plans, accounts payable, accrued expenses and other liabilities and
distributions payable were at amounts that reasonably approximated their fair value.
Estimates of fair value of our notes payable are based upon interest rates available for the
issuance of debt with similar terms and remaining maturities. As of December 31, 2006, the
outstanding balance of fixed rate notes payable of $2,059.6 million had a fair value of $2,050.2
million. As of December 31, 2005, the outstanding balance of fixed rate notes payable of $2,285.2
million had a fair value of $2,287.8 million. The floating rate notes payable balance at December
31, 2006 and 2005 approximated fair value.
F-29
17. Net Change in Operating Accounts
The effect of changes in the operating accounts on cash flows from operating activities is as
follows: