-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HO/RBTfGYjKx8PSMKkslWJG4/FFrUFuR9Tyi4ejiRSQtcqo7FjQEVwv7dQUNLp38 PKWxZDz21vnDWVOx9BA13g== 0000906345-02-000002.txt : 20020415 0000906345-02-000002.hdr.sgml : 20020415 ACCESSION NUMBER: 0000906345-02-000002 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020328 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAMDEN PROPERTY TRUST CENTRAL INDEX KEY: 0000906345 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 766088377 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12110 FILM NUMBER: 02590074 BUSINESS ADDRESS: STREET 1: THREE GREENWAY PLAZA STREET 2: SUITE 1300 CITY: HOUSTON STATE: TX ZIP: 77046 BUSINESS PHONE: 7139643555 MAIL ADDRESS: STREET 1: THREE GREENWAY PLZ STREET 2: SUITE 1300 CITY: HOUSTON STATE: TX ZIP: 77046 10-K 1 cpt10k-01.txt CAMDEN PROPERTY TRUST - DATED 12/31/01 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------------------------------------------- FORM 10-K FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One) X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2001 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _________ Commission file number: 1-12110 CAMDEN PROPERTY TRUST (Exact Name of Registrant as Specified in Its Charter) Texas 76-6088377 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 3 Greenway Plaza, Suite 1300 77046 Houston, Texas (Zip Code) (Address of Principal Executive Offices) Registrant's telephone number, including area code: (713) 354-2500 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered ------------------- ----------------------------------------- Common Shares of Beneficial New York Stock Exchange Interest, $.01 par value Securities registered pursuant to Section 12(g) of the Act: None 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 X No ------- ------- Indicate 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 registrant's 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. The aggregate market value of voting shares of beneficial interest held by non-affiliates of the registrant was $1,518,877,625 at March 15, 2002. The number of common shares of beneficial interest outstanding at March 15, 2002 was 40,993,198. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's Annual Report to Shareholders for the year ended December 31, 2001 are incorporated by reference in Parts I, II and IV. Portions of the registrant's Proxy Statement in connection with its Annual Meeting of Shareholders to be held May 15, 2002 are incorporated by reference in Part III. TABLE OF CONTENTS Page PART I Item 1. Business...................................................... 3 Item 2. Properties.................................................... 5 Item 3. Legal Proceedings............................................. 9 Item 4. Submission of Matters to a Vote of Security Holders........... 9 PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters................................... 10 Item 6. Selected Financial Data....................................... 10 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations........................... 10 Item 7a. Quantitative and Qualitative Disclosures About Market Risk............................................. 10 Item 8. Financial Statements and Supplementary Data................... 10 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure........................ 10 PART III Item 10. Directors and Officers of the Registrant...................... 10 Item 11. Executive Compensation........................................ 10 Item 12. Security Ownership of Certain Beneficial Owners and Management......................................... 10 Item 13. Certain Relationships and Related Transactions................ 10 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K................................................... 11 SIGNATURES .............................................................. 15 PART I Item 1. Business Introduction Camden Property Trust is a real estate investment trust organized on May 25, 1993 and, with our subsidiaries, reports as a single business segment. We are one of the largest real estate investment trusts in the nation with operations related to the ownership, development, construction and management of multifamily apartment communities in nine states. As of December 31, 2001, we owned interests in, operated or were developing 147 properties containing 52,147 apartment homes geographically dispersed in the Sunbelt and Midwestern markets, from Florida to California. Our properties, excluding properties in lease-up and under development, had a weighted average occupancy rate of 94.2% for the year ended December 31, 2001. This rate represents the average occupancy for all of our properties in 2001 weighted by the number of apartment homes in each property. Two of our newly developed multifamily properties containing 1,000 apartment homes were in lease-up at year end. Two of our multifamily properties containing 802 apartment homes were under development at December 31, 2001. We also have several sites which we intend to develop into multifamily apartment communities. At December 31, 2001, we had 1,750 employees. Our headquarters are located at 3 Greenway Plaza, Suite 1300, Houston, Texas 77046 and our telephone number is (713) 354-2500. Operating Strategy We believe that producing consistent earnings growth and selectively investing in favorable markets are crucial factors to our success. We rely heavily on our sophisticated property management capabilities and innovative operating strategies in our efforts to produce consistent earnings growth. Sophisticated Property Management. We believe the depth of our organization enables us to deliver quality services, thereby promoting resident satisfaction and improving resident retention, which should reduce 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 the net operating income produced at their property, as well as rental rate increases and the level of lease renewals achieved. Property net operating income represents total property revenues less property operating and maintenance expenses, including real estate taxes. Operating Strategies. 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. Lease terms are generally staggered based on vacancy exposure by apartment type so that lease expirations are better matched to each property's seasonal rental patterns. We 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 we respond timely to residents changing needs and to ensure that residents retain a high level of satisfaction. Branding. In 2001, we began implementation of our strategic brand initiative, and each of our communities now carries the Camden flagship name. Our brand promise of "Living Excellence" reinforces our reputation as an organization that promises excellence everywhere our customers look. This initiative was undertaken to reinforce our reputation as a provider of high quality apartment home living. These actions leverage our brand to increase market awareness and define who and what we are to our current and prospective residents. We believe these actions will create long-term value for us and our shareholders. New Development and Acquisitions. We believe we are well positioned in our current markets and have the expertise to take advantage of both development and acquisition opportunities which have healthy long-term fundamentals and strong growth projections. This dual capability, combined with what we believe is a conservative financial structure, allows us to concentrate our growth efforts towards selective development alternatives and acquisition opportunities. We believe that the physical improvements we have made at our acquired properties, such as new or enhanced landscaping design, new or upgraded amenities and redesigned building structures, coupled with a strong focus on property management and marketing, has resulted in attractive yields on acquired properties. 3 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. All development decisions are made from our corporate office. Risks inherent to developing real estate include zoning changes and environmental matters. There is also the risk that certain assumptions concerning economic conditions may change during the development process. We believe that we understand and effectively manage the risks associated with development and that the risks of new development are justified by higher potential yields. Our consolidated financial statements include $143.6 million related to properties currently under development. Of this amount, $46.2 million relates to our two current development projects: Camden Harbour View in Long Beach and Camden Vineyards in Southern California. Additionally, we have $97.4 million invested in land held for future development. Included in this amount is $51.8 million in land development projects located in Houston, Dallas, and Long Beach. We are currently in the planning phase with respect to these properties to further develop apartment homes in these areas. We may also sell certain parcels of undeveloped land to third parties for commercial and retail development. Dispositions. We continue to operate in markets where we have a concentration advantage due to economies of scale. We feel that 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 will seek to selectively dispose of properties and redeploy capital if we determine a property cannot meet long-term earnings growth expectations. We also intend to continue rebalancing our portfolio with the goal of limiting any one market to providing no more than 12% of total net operating income. Our strategy regarding the undeveloped land sales has been to integrate the residential and retail components in such a way that enhances the quality of life for our residents. Environmental Matters. Under various federal, state and local laws, ordinances and regulations, we are liable for the costs of removal or remediation of certain hazardous or toxic substances on or in our properties. These laws often impose liability without regard to whether we knew of, or were responsible for, the presence of the hazardous or toxic substances. All of our properties have been subjected to Phase I site assessments or similar environmental audits to determine if there is a likelihood of contamination from either on- or off-site sources. These audits have been carried out in accordance with accepted industry practices. We have also conducted limited subsurface investigations and tested for radon and lead-based paint where such procedures have been recommended by our consultants. We cannot assure you that existing environmental studies reveal all environmental liabilities or that any prior owner did not create any material environmental condition not known to us. The costs of investigation, remediation or removal of hazardous substances may be substantial. If hazardous or toxic substances are present on a property, or if we fail to properly remediate such substances, our ability to sell or rent such property or to borrow using such property as collateral may be adversely affected. Insurance. We carry comprehensive liability, fire, flood, extended coverage and rental loss insurance on our properties, which we believe is of the type and amount customarily obtained on real property assets. We intend to obtain similar coverage for properties we acquire in the future. However, there are certain types of losses, generally of a catastrophic nature, such as losses from floods or earthquakes, that may be subject to limitations in certain areas. Our board exercises its discretion in determining amounts, coverage limits and deductibility provisions of insurance, with a view to maintaining 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 cost of our lost investment. Inflation, changes in building codes and ordinances, environmental considerations and other factors also might make it infeasible to use insurance proceeds to replace a property after it has been damaged or destroyed. Markets and Competition Our portfolio consists of middle to upper market apartment properties. We target acquisitions and developments in selected high-growth markets. Since our initial public offering in 1993, we have diversified into other markets in the Southwest region and into the Southeast, Midwest and Western regions of 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. There are numerous housing alternatives that compete with our properties in attracting residents. Our properties compete directly with other multifamily properties and single family homes that are available for rent in the markets in which our properties are located. Our properties also compete for residents with the new and existing owned-home market. The demand for rental housing is driven by economic and demographic trends. Recent trends in the economics of renting 4 versus home ownership indicate an increasing demand for owned housing in certain markets, due to a number of factors, including the decrease in mortgage interest rates. Rental demand should be strong in areas anticipated to experience in-migration, due to the younger ages that characterize movers as well as the relatively high cost of home ownership in higher growth areas. Disclosure Regarding Forward Looking Statements We have made statements in this report that are "forward-looking" in that they do not discuss historical fact, but instead note future expectations, projections, intentions or other items relating to the future. These forward-looking statements include those made in the documents incorporated by reference in this report. Forward-looking statements are subject to known and unknown risks, uncertainties and other facts that may cause our actual results or performance to differ materially from those contemplated by the forward- looking statements. Many of those factors are noted in conjunction with the forward-looking statements in the text. Other important factors that could cause actual results to differ include: 1. The results of our efforts to implement our property development strategy. 2. The effect of economic conditions. 3. Failure to qualify as a real estate investment trust. 4. The costs of our capital. 5. Actions of our competitors and our ability to respond to those actions. 6. Changes in government regulations, tax rates and similar matters. 7. Environmental uncertainties and natural disasters. Given these uncertainties, do not rely on these forward-looking statements. These forward-looking statements represent our estimates and assumptions as of the date of this report. We assume no obligation to update or revise any forward-looking statements. Item 2. Properties The Properties Our properties typically consist of two- and three-story buildings in a landscaped setting and provide residents with a variety of amenities. Most of the properties have, or are expected to 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. The 145 properties, which we owned interests in and operated at December 31, 2001, average 849 square feet of living area. Operating Properties For the year ended December 31, 2001, no single operating property accounted for greater than 2.6% of our total revenues. The operating properties had a weighted average occupancy rate of 94% for 2001 and 2000. Resident lease terms generally range from six to thirteen months and usually require security deposits. One hundred and twenty six of our operating properties have over 200 apartment homes, with the largest having 894 apartment homes. Our operating properties have an average age of 11 years (calculated on the basis of investment dollars). Our operating properties were constructed and placed in service as follows: Year Placed in Service Number of Properties ------------------------------- ------------------------ 1997 - 2001 25 1992 - 1996 29 1987 - 1991 28 1982 - 1986 48 Prior to 1982 15 Property Table The following table sets forth information with respect to our operating properties at December 31, 2001. 5
OPERATING PROPERTIES - -------------------------------------------------------------------------------------------------------------------------------- December 2001 Avg. Mo. Rental Rates ---------------------- Number of Year Placed Average Apartment 2001 Average Per Property and Location Apartments in Service Size (Sq. Ft.) Occupancy (1) Apartment Per Sq. Ft. - -------------------------------------------------------------------------------------------------------------------------------- ARIZONA Phoenix Camden Copper Square (2) 332 2000 786 89 % $ 824 $ 1.05 Camden Fountain Palms 192 1986/1996 1,050 95 772 0.73 Camden Legacy 428 1996 1,067 93 913 0.86 Camden Pecos Ranch 272 2001 924 94 853 0.92 Camden Sierra 288 1997 925 93 752 0.81 Camden Towne Center 240 1998 871 92 785 0.90 Camden Vista Valley 357 1986 923 93 728 0.79 Tucson Camden Pass 456 1984 559 95 470 0.84 Camden View 365 1974 1,026 92 720 0.70 CALIFORNIA Orange County Camden Crown Valley (6) 380 2001 1,009 Lease-up 1,458 1.45 Camden Martinique 714 1986 795 96 1,202 1.51 Camden Parkside 421 1972 835 96 1,067 1.28 Camden Sea Palms 138 1990 891 98 1,197 1.34 COLORADO Denver Camden Arbors 358 1986 810 94 867 1.07 Camden Caley 218 2000 925 94 1,006 1.09 Camden Centennial 276 1985 744 94 832 1.12 Camden Denver West (4) 320 1997 1,015 95 1,202 1.18 Camden Highlands Ridge 342 1996 1,141 93 1,236 1.08 Camden Interlocken 340 1999 1,022 96 1,261 1.23 Camden Lakeway 451 1997 919 94 1,074 1.17 Camden Pinnacle 224 1985 748 94 831 1.11 FLORIDA Orlando Camden Club 436 1986 1,077 86 875 0.81 Camden Fountains 552 1984/1986 747 95 615 0.82 Camden Landings 220 1983 748 96 646 0.86 Camden Lee Vista (2) 492 2000 937 95 832 0.89 Camden Renaissance 578 1996/1998 899 89 793 0.88 Camden Reserve 526 1990/1991 824 93 723 0.88 Tampa/St. Petersburg Camden Bay 408 1997 927 92 838 0.90 Camden Bay Pointe 368 1984 771 95 657 0.85 Camden Bayside 832 1987/1989 748 94 703 0.94 Camden Citrus Park 247 1985 704 95 621 0.88 Camden Isles 484 1983/1985 722 93 615 0.85 Camden Lakes 688 1982/1983 728 92 660 0.91 Camden Lakeside 228 1986 728 95 663 0.91 Camden Live Oaks 770 1990 1,093 90 783 0.72 Camden Preserve 276 1996 942 90 924 0.98 Camden Westshore 278 1986 728 95 727 1.00 Camden Woods 444 1986 1,223 96 791 0.65 KENTUCKY Louisville Camden Brookside 224 1987 732 91 654 0.89 Camden Downs 254 1975 682 92 562 0.82 Camden Meadows 400 1987/1990 746 92 663 0.89 Camden Oxmoor (2) 432 2000 903 88 782 0.87 Camden Prospect Park 138 1990 916 92 757 0.83 MISSOURI Kansas City Camden Passage 596 1989/1997 832 93 743 0.89 St. Louis Camden Cedar Lakes 420 1986 852 94 619 0.73 Camden Cove West 276 1990 828 95 968 1.17 Camden Cross Creek 591 1973/1980 947 92 838 0.88 Camden Taravue 304 1975 676 92 576 0.85 Camden Trace 372 1972 1,158 95 807 0.70 Camden Westchase 160 1986 945 97 944 1.00
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OPERATING PROPERTIES (CONTINUED) - -------------------------------------------------------------------------------------------------------------------------------- December 2001 Avg. Mo. Rental Rates ---------------------- Number of Year Placed Average Apartment 2001 Average Per Property and Location Apartments in Service Size (Sq. Ft.) Occupancy (1) Apartment Per Sq. Ft. - -------------------------------------------------------------------------------------------------------------------------------- NEVADA Las Vegas Camden Bel Air 528 1988/1995 943 93 % $ 799 $ 0.85 Camden Breeze 320 1989 846 95 723 0.85 Camden Canyon 200 1995 987 96 834 0.84 Camden Commons 376 1988 936 96 793 0.85 Camden Cove 124 1990 898 96 752 0.84 Camden Del Mar 560 1995 986 97 886 0.90 Camden Fairways 320 1989 896 97 777 0.87 Camden Greens 432 1990 892 96 761 0.85 Camden Harbor 336 1996 1,008 98 840 0.83 Camden Hills 184 1991 579 94 552 0.95 Camden Legends 113 1994 792 98 766 0.97 Camden Palisades 624 1991 905 96 795 0.88 Camden Pines 315 1997 1,005 97 844 0.84 Camden Pointe 252 1996 985 95 785 0.80 Camden Summit 234 1995 1,187 96 1,119 0.94 Camden Tiara 400 1996 1,043 96 867 0.83 Camden Vintage 368 1994 978 95 782 0.80 Oasis Bay (3) 128 1990 862 95 776 0.90 Oasis Crossings (3) 72 1996 983 97 794 0.81 Oasis Emerald (3) 132 1988 873 94 675 0.77 Oasis Gateway (3) 360 1997 1,146 94 858 0.75 Oasis Heritage (3) 720 1986 950 97 611 0.64 Oasis Island (3) 118 1990 901 94 675 0.75 Oasis Landing (3) 144 1990 938 94 716 0.76 Oasis Meadows (3) 383 1996 1,031 95 777 0.75 Oasis Palms (3) 208 1989 880 94 710 0.81 Oasis Pearl (3) 90 1989 930 95 733 0.79 Oasis Place (3) 240 1992 440 95 524 1.19 Oasis Plaza (3) 300 1976 820 94 635 0.77 Oasis Ridge (3) 477 1984 391 91 454 1.16 Oasis Rose (3) 212 1994 1,025 97 741 0.72 Oasis Sands 48 1994 1,125 97 815 0.72 Oasis Sierra (3) 208 1998 922 94 828 0.90 Oasis Springs (3) 304 1988 838 93 661 0.79 Oasis Suites (3) 409 1988 404 93 510 1.26 Oasis View (3) 180 1983 940 95 690 0.73 Oasis Vinings (3) 234 1994 1,152 94 803 0.70 Reno Camden Bluffs 450 1997 1,111 95 1,071 0.96 NORTH CAROLINA Charlotte Camden Eastchase 220 1986 698 94 625 0.90 Camden Forest 208 1989 703 94 658 0.94 Camden Habersham 240 1986 773 91 683 0.88 Camden Park Commons 232 1997 859 92 764 0.89 Camden Pinehurst 407 1967 1,147 91 822 0.72 Camden Timber Creek 352 1984 706 91 663 0.94 Greensboro Camden Glen 304 1980 662 92 592 0.90 Camden Wendover 216 1985 795 91 659 0.83 TEXAS Austin Camden Briar Oaks 430 1980 711 97 683 0.96 Camden Huntingdon 398 1995 903 94 875 0.97 Camden Laurel Ridge 183 1986 705 95 690 0.98 Camden Ridgecrest 284 1995 851 95 831 0.98 Camden Ridgeview 167 1984 859 95 788 0.92 Camden Woodview 283 1984 644 97 680 1.06
7
OPERATING PROPERTIES (CONTINUED) - -------------------------------------------------------------------------------------------------------------------------------- December 2001 Avg. Mo. Rental Rates ---------------------- Number of Year Placed Average Apartment 2001 Average Per Property and Location Apartments in Service Size (Sq. Ft.) Occupancy (1) Apartment Per Sq. Ft. - -------------------------------------------------------------------------------------------------------------------------------- Corpus Christi Camden Breakers 288 1996 861 95% $ 769 $ 0.89 Camden Copper Ridge 344 1986 775 94 601 0.78 Camden Miramar (5) 451 1994-2000 569 86 791 1.39 Camden Waterford 580 1976 767 94 517 0.67 Dallas/Fort Worth Camden Addison 456 1996 942 96 917 0.97 Camden Buckingham 464 1997 919 93 875 0.95 Camden Centreport 268 1997 910 92 858 0.94 Camden Cimarron 286 1992 772 95 847 1.10 Camden Farmers Market (6) 620 2001 916 Lease-up 1,074 1.17 Camden Gardens 256 1983 652 94 635 0.97 Camden Glen Lakes 424 1979 877 91 804 0.92 Camden Highlands 160 1985 816 95 692 0.85 Camden Lakeview 476 1985 853 94 680 0.80 Camden Legacy Creek 240 1995 831 94 826 0.99 Camden Legacy Park 276 1996 871 95 848 0.97 Camden Oaks 446 1985 730 95 684 0.94 Camden Oasis 602 1986 548 92 611 1.11 Camden Place 442 1984 772 93 650 0.84 Camden Ridge 208 1985 829 94 661 0.80 Camden Springs 304 1987 713 96 651 0.91 Camden Terrace 340 1984 848 94 656 0.77 Camden Towne Village 188 1983 735 94 649 0.88 Camden Trails 264 1984 733 92 635 0.87 Camden Valley Creek 380 1984 855 95 717 0.84 Camden Valley Park 516 1986 743 94 726 0.98 Camden Valley Ridge 408 1987 773 94 663 0.86 Camden Westview 335 1983 697 93 663 0.95 Houston Camden Baytown 272 1999 844 94 720 0.85 Camden Chasewood 282 1978 749 96 589 0.79 Camden Creek 456 1984 639 94 623 0.98 Camden Crossing 366 1982 762 96 614 0.81 Camden Greenway 756 1999 861 97 1,014 1.18 Camden Holly Springs 548 1999 934 97 912 0.98 Camden Midtown 337 1999 843 96 1,016 1.20 Camden Park 288 1995 866 94 833 0.96 Camden Steeplechase 290 1982 748 97 630 0.84 Camden Stonebridge 204 1993 845 97 825 0.98 Camden Sugar Grove 380 1997 917 94 859 0.94 Camden Vanderbilt 894 1996/1997 863 98 1,034 1.20 Camden Wallingford 462 1980 787 97 636 0.81 Camden West Oaks 671 1982 726 94 578 0.80 Camden Wilshire 536 1982 761 96 602 0.79 Camden Wyndham 448 1978/1981 797 96 561 0.70 -------- ------------ ----------- -------- --------- Total 51,345 849 94% $ 777 $ 0.91 ======== ============ =========== ======== =========
(1) Represents average physical occupancy for the year, except as noted below. (2) Development property - average occupancy calculated from date at which occupancy exceeded 90% through year-end. (3) Properties owned through a joint venture in which we own a 20% interest. The remaining interest is owned by an unaffiliated private pension fund. (4) Property owned through a joint venture in which we own a 50% interest. The remaining interest is owned by an unaffiliated private investor. (5) Miramar is a student housing project for Texas A&M at Corpus Christi. Average occupancy includes summer which is normally subject to high vacancies. (6) Properties under lease-up at December 31, 2001. 8 Operating Properties Under Lease-Up The operating properties under lease-up table is incorporated herein by reference from page 37 of the Company's Annual Report to Shareholders for the year ended December 31, 2001, which page is filed as Exhibit 13.1 hereto. Development Properties The total budgeted cost of the development properties is approximately $162.0 million, with a remaining cost to complete, as of December 31, 2001, of approximately $115.8 million. There can be no assurance that our budget, leasing or occupancy estimates will be attained for the development properties or that their performance will be comparable to that of our existing portfolio. Development Properties Table The development properties table is incorporated herein by reference from page 37 of our Annual Report to Shareholders for the year ended December 31, 2001, which is filed as Exhibit 13.1. Management believes that we possess the development capabilities and experience to provide a continuing source of portfolio growth. In making development decisions, management considers a number of factors, including the size of the property, the season in which leasing activity will occur and the extent to which delivery of the completed apartment homes will coincide with leasing and occupancy of such apartment homes (which is dependent upon local market conditions). In order to pursue a development opportunity, we currently require a minimum initial stabilized target return of 9.0%-10.0%. This minimum target return is based on projected market rents and projected stabilized expenses, considering the market and the nature of the prospective development. Item 3. Legal Proceedings Prior to our merger with Oasis Residential, Inc. in 1998, Oasis had been contacted by certain regulatory agencies with regards to alleged failures to comply with the Fair Housing Amendments Act as it pertained to nine properties (seven of which we currently own) constructed for first occupancy after March 31, 1991. On February 1, 1999, the Justice Department filed a lawsuit against us and several other defendants in the United States District Court for the District of Nevada alleging (1) that the design and construction of these properties violates the Fair Housing Act and (2) that we, through the merger with Oasis, had discriminated in the rental of dwellings to persons because of handicap. The complaint requests an order that (i) declares that the defendants' policies and practices violate the Fair Housing Act; (ii) enjoins us from (a) failing or refusing, to the extent possible, to bring the dwelling units and public use and common use areas at these properties and other covered units that Oasis had designed and/or constructed into compliance with the Fair Housing Act, (b) failing or refusing to take such affirmative steps as may be necessary to restore, as nearly as possible, the alleged victims of the defendants alleged unlawful practices to positions they would have been in but for the discriminatory conduct and (c) designing or constructing any covered multi-family dwellings in the future that do not contain the accessibility and adaptability features set forth in the Fair Housing Act; and requires us to pay damages, including punitive damages, and a civil penalty. With any acquisition, we plan for and undertake renovations needed to correct deferred maintenance, life/safety and Fair Housing matters. On January 30, 2001, a consent decree was ordered and executed in the above Justice Department action. Under the terms of the decree, we were ordered to make certain retrofits and implement certain educational programs and fair housing advertising. These changes are to take place over the next five years. In management's opinion, the costs associated with complying with the decree are not expected to have a material impact on our financial statements. We are subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance. While the resolution of these matters cannot be predicted with certainty, management believes that the final outcome of such matters will not have a material adverse effect on our consolidated financial statements. Item 4. Submission of Matters to a Vote of Security Holders No matter was submitted during the fourth quarter of the fiscal year covered by this report to a vote of security holders, through the solicitation of proxies or otherwise. 9 PART II Item 5. Market for Registrant's Common Equity and Related Stockholder Matters Information with respect to this Item 5 is incorporated herein by reference from page 75 of our Annual Report to Shareholders for the year ended December 31, 2001, which is filed as Exhibit 13.1. The number of holders of record of our common shares, $0.01 par value, as of March 15, 2002, was 992. Item 6. Selected Financial Data Information with respect to this Item 6 is incorporated herein by reference from pages 76 and 77 of our Annual Report to Shareholders for the year ended December 31, 2001, which is filed as Exhibit 13.1. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Information with respect to this Item 7 is incorporated herein by reference from pages 34 through 49 of our Annual Report to Shareholders for the year ended December 31, 2001, which is filed as Exhibit 13.1. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Information with respect to this Item 7A is incorporated herein by reference from page 43 of our Annual Report to Shareholders for the year ended December 31, 2001, which is filed as Exhibit 13.1. Item 8. Financial Statements and Supplementary Data Our financial statements and supplementary financial information for the years ended December 31, 2001, 2000 and 1999 are listed in the accompanying Index to Consolidated Financial Statements and Supplementary Data at F-1 and are incorporated herein by reference from pages 50 through 75 of our Annual Report to Shareholders for the year ended December 31, 2001, which is filed as Exhibit 13.1. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. PART III Item 10. Directors and Executive Officers of the Registrant 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, 2002 in connection with the Annual Meeting of Shareholders to be held May 15, 2002. 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, 2002 in connection with the Annual Meeting of Shareholders to be held May 15, 2002. Item 12. Security Ownership of Certain Beneficial Owners and Management 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, 2002 in connection with the Annual Meeting of Shareholders to be held May 15, 2002. Item 13. Certain Relationships and Related Transactions Information with respect to this Item 13 is incorporated by reference from our Proxy Statement, which we intend to file on or before March 28, 2002 in connection with the Annual Meeting of Shareholders to be held May 15, 2002. 10 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a) (1) Financial Statements: Our financial statements and supplementary financial information for the years ended December 31, 2001, 2000 and 1999 are listed in the accompanying Index to Consolidated Financial Statements and Supplementary Data at F-1 and are incorporated herein by reference from pages 50 through 75 of our Annual Report to the Shareholders for the year ended December 31, 2001, which pages are filed as Exhibit 13.1 hereto. (2) Financial Statement Schedule: The financial statement schedule listed in the accompanying Index to Consolidated Financial Statements and Supplementary Data at page F-1 is filed as part of this Report. (3) Index to Exhibits: Number Title 2.1 Agreement and Plan of Merger, dated December 16, 1997, among Camden Property Trust, Camden Subsidiary II, Inc. and Oasis Residential, Inc. Incorporated by reference from Exhibit 2.1 to Camden Property Trust's Form 8-K filed December 17, 1997 (File No. 1-12110). 2.2 Amendment No. 1, dated February 4, 1998, to the Agreement and Plan of Merger, dated December 16, 1997, among Camden Property Trust, Camden Subsidiary II, Inc. and Oasis Residential, Inc. Incorporated by reference from Exhibit 2.1 to Camden Property Trust's Form 8-K filed February 5, 1998 (File No. 1-12110). 2.3 Contribution Agreement, dated June 26, 1998, by and between Camden Subsidiary, Inc. and Sierra- Nevada Multifamily Investments, LLC. Incorporated by reference from Exhibit 2.1 to Camden Property Trust's Form 8-K filed July 15, 1998 (File No. 1-12110). 2.4 Agreement of Purchase and Sale, dated June 26, 1998, by and between Camden Subsidiary, Inc. and Sierra-Nevada Multifamily Investments, LLC. Incorporated by reference from Exhibit 2.2 to Camden Property Trust's Form 8-K filed July 15, 1998 (File No. 1-12110). 2.5 Agreement of Purchase and Sale, dated June 26, 1998, by and between NQRS, Inc. and Sierra-Nevada Multifamily Investments, LLC. Incorporated by reference from Exhibit 2.3 to Camden Property Trust's Form 8-K filed July 15, 1998 (Filed No. 1-12110). 3.1 Amended and Restated Declaration of Trust of Camden Property Trust. Incorporated by reference from Exhibit 3.1 to Camden Property Trust's Form 10-K for the year ended December 31, 1993 (File No. 1-12110). 3.2 Amendment to the Amended and Restated Declaration of Trust of Camden Property Trust. Incorporated by reference from Exhibit 3.1 to Camden Property Trust's Form 10-Q filed August 14, 1997 (File No. 1-12110). 3.3 Second Amended and Restated Bylaws of Camden Property Trust. Incorporated by reference from Exhibit 3.3 to Camden Property Trust's Form 10-K for the year ended December 31, 1997 (File No. 1-12110). 4.1 Specimen certificate for Common Shares of Beneficial Interest. Incorporated by reference from Exhibit 4.1 to Camden Property Trust's Registration Statement on Form S-11 filed September 15, 1993 (File No. 33-68736). 4.2 Indenture dated as of April 1, 1994 by and between Camden Property Trust and The First National Bank of Boston, as Trustee. Incorporated by reference from Exhibit 4.3 to Camden Property Trust's Statement on Form S-11 filed April 12, 1994 (File No. 33-76244). 11 4.3 Form of Convertible Subordinated Debenture Due 2001. Incorporated by reference from Exhibit 4.3 to Camden Property Trust's Statement on Form S-11 filed April 12, 1994 (File No. 33-76244). 4.4 Indenture dated as of February 15, 1996 between Camden Property Trust and the U.S. Trust Company of Texas, N.A., as Trustee. Incorporated by reference from Exhibit 4.1 to Camden Property Trust's Form 8-K filed February 15, 1996 (File No. 1-12110). 4.5 First Supplemental Indenture dated as of February 15, 1996 between Camden Property Trust and U.S. Trust Company of Texas N.A., as trustee. Incorporated by reference from Exhibit 4.2 to Camden Property Trust's Form 8-K filed February 15, 1996 (File No. 1-12110). 4.6 Form of Camden Property Trust 6 5/8% Note due 2001. Incorporated by reference from Exhibit 4.3 to Camden Property Trust's Form 8-K filed February 15, 1996 (File No. 1-12110). 4.7 Form of Camden Property Trust 7% Note due 2006. Incorporated by reference from Exhibit 4.3 to Camden Property Trust's Form 8-K filed December 2, 1996 (File No. 1-12110). 4.8 Specimen certificate for Camden Series A Cumulative Convertible Shares of Beneficial Interest. Incorporated from Exhibit 4.3 to Camden Property Trust's Registration Statement on Form S-4 filed February 6, 1998 (File No. 333-45817). 4.9 Statement of Designation, Preferences and Rights of Series A Cumulative Convertible Preferred Shares of Beneficial Interest. Incorporated by reference from Exhibit 4.1 to Camden Property Trust's Registration Statement on Form S-4 filed February 6, 1998 (File No. 333-45817). 4.10 Form of Statement of Designation of Series B Cumulative Redeemable Preferred Shares of Beneficial Interest. Incorporated by reference from Exhibit 4.1 to Camden Property Trust's Form 8-K filed on March 10, 1999 (File No. 1-12110). 4.11 Form of Statement of Designation of Series C Cumulative Redeemable Perpetual Preferred Shares of Beneficial Interest of Camden Property Trust. Incorporated by reference from Exhibit 4.11 to Camden Property Trust's Form 10-K for the year ended December 31, 1999 (File No. 1-12110). 4.12 Form of First Amendment to Statement of Designation of Series C Cumulative Redeemable Perpetual Preferred Shares of Beneficial Interest of Camden Property Trust. Incorporated by reference from Exhibit 4.12 to Camden Property Trust's Form 10-K for the year ended December 31, 1999 (File No. 1-12110). 4.13 Form of Second Amendment to Statement of Designation of Series C Cumulative Redeemable Perpetual Preferred Shares of Beneficial Interest of Camden Property Trust. Incorporated by reference from Exhibit 4.13 to Camden Property Trust's Form 10-K for the year ended December 31, 1999 (File No. 1-12110). 4.14 Form of Underwriting Agreement among Camden Property Trust and the Underwriters dated April 15, 1999 relating to the offering of 7% notes due 2004. Incorporated by reference from Exhibit 1.1 to Camden Property Trust's Form 8-K filed April 20, 1999 (File No. 1-12110). 4.15 Form of Camden Property Trust 7% Note due 2004. Incorporated by reference from Exhibit 4.3 to Camden Property Trust's Form 8-K filed April 20, 1999 (File No. 1-12110). 4.16 Form of Underwriting Agreement among Camden Property Trust and the Underwriters dated February 7, 2001 relating to the offering of 7% notes due 2006 and 7.625% notes dues 2011. Incorporated by reference from Exhibit 1.1 to Camden Property Trust's Form 8-K filed February 20, 2001 (File No. 1-12110). 4.17 Form of Camden Property Trust 7% Note due 2006. Incorporated by reference from Exhibit 4.3 to Camden Property Trust's Form 8-K filed February 20, 2001 (File No. 1-12110). 4.18 Form of Camden Property Trust 7.625% Note due 2011. Incorporated by reference from Exhibit 4.4 to Camden Property Trust's Form 8-K filed February 20, 2001 (File No. 1-12110). 12 4.19 Form of Underwriting Agreement among Camden Property Trust and the Underwriters dated September 7, 2001 relating to the offering of 6.75% notes due 2010. Incorporated by reference from Exhibit 1.1 to Camden Property Trust's Form 8-K filed September 17, 2001 (File No. 1-12110). 4.20 Form of Camden Property Trust's 6.75% Note due 2010. Incorporated by reference from Exhibit 4.3 to Camden Property Trust's Form 8-K filed September 17, 2001 (Filed No. 1-12110). 10.1 Form of Indemnification Agreement by and between Camden Property Trust and certain of its trust managers and executive officers. Incorporated by reference from Exhibit 10.18 to Amendment No. 1 of Camden Property Trust's Registration Statement on Form S-11 filed July 9, 1993 (File No. 33- 63588). 10.2 Amended and Restated Employment Agreement dated August 7, 1998 by and between Camden Property Trust and Richard J. Campo. Incorporated by reference from Exhibit 10.4 to Camden Property Trust's Form 10-K filed March 30, 1999 (File No. 1-12110). 10.3 Amended and Restated Employment Agreement dated August 7, 1998 by and between Camden Property Trust and D. Keith Oden. Incorporated by reference from Exhibit 10.5 to Camden Property Trust's Form 10-K filed March 30, 1999 (File No. 1-12110). 10.4 Form of Employment Agreement by and between Camden Property Trust and certain senior executive officers. Incorporated by reference from Exhibit 10.13 to Camden Property Trust's Form 10-K filed March 28, 1997 (File No. 1-12110). 10.5 Camden Property Trust Key Employee Share Option Plan. Incorporated by reference from Exhibit 10.14 to Camden Property Trust's Form 10-K filed March 28, 1997 (File No. 1-12110). 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. Incorporated by reference from Exhibit 1.1 to Camden Property Trust's Form 8-K filed March 21, 1997 (File No. 1-12110). 10.7 Form of Master Exchange Agreement by and between Camden Property Trust and certain key employees. Incorporated by reference from Exhibit 10.16 to Camden Property Trust's Form 10-K filed February 6, 1998 (File No. 1-12110). 10.8 Form of Credit Agreement dated August 18, 1999 between Bank of America, N.A. and Camden Property Trust. Incorporated by reference from Camden Property Trust's Form 10-Q filed November 15, 1999 (File No. 1-12110). 10.9 Form of Third Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P. Incorporated by reference from Exhibit 10.1 to Camden Property Trust's Form S-4 filed on February 26, 1997 (File No. 333-22411). 10.10 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. Incorporated by reference from Exhibit 99.1 to Camden Property Trust's Form 8-K filed July 15, 1998 (File No. 1-12110). 10.11 Amended and Restated Limited Liability Company Agreement of Oasis Martinique, LLC, dated as of October 23, 1998, by and among Oasis Residential, Inc. and the persons named therein. Incorporated by reference from Exhibit 10.59 to Oasis Residential, Inc.'s Annual Report on Form 10- K for the year ended December 31, 1997 (File No. 1-12428). 10.12 Exchange Agreement, dated as of October 23, 1998, by and among Oasis Residential, Inc., Oasis Martinique, LLC and the holders listed thereon. Incorporated by reference from Exhibit 10.60 to Oasis Residential, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1997 (File No. 1-12428). 10.13 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. Incorporated by reference from Exhibit 99.1 to Camden Property Trust's Form 8-K filed on March 10, 1999 (File No. 1-12110). 13 10.14 First Amendment to Third Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P., dated as of February 23, 1999. Incorporated by reference from Exhibit 99.2 to Camden Property Trust's Form 8-K filed on March 10, 1999 (File No. 1-12110). 10.15 Form of Second Amendment to Third Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P., dated as of August 13, 1999. Incorporated by reference from Exhibit 10.15 to Camden Property Trust's Form 10-K for the year ended December 31, 1999 (File No. 1- 12110). 10.16 Form of Third Amendment to Third Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P., dated as of September 7, 1999. Incorporated by reference from Exhibit 10.16 to Camden Property Trust's Form 10-K for the year ended December 31, 1999 (File No. 1- 12110). 10.17 Form of Fourth Amendment to Third Amended and Restated Agreement of Limited Partnership of Camden Operating, L.P., dated as of January 7, 2000. Incorporated by reference from Exhibit 10.17 to Camden Property Trust's Form 10-K for the year ended December 31, 1999 (File No. 1-12110). 10.18 Amended and Restated 1993 Share Incentive Plan of Camden Property Trust. Incorporated by reference from Exhibit 10.18 to Camden Property Trust's Form 10-K for the year ended December 31, 1999 (File No. 1-12110). 10.19 Camden Property Trust 1999 Employee Share Purchase Plan. Incorporated by reference from Exhibit 10.19 to Camden Property Trust's Form 10-K for the year ended December 31, 1999 (File No. 1- 12110). 10.20 Form of Senior Executive Loan Guaranty between Camden Operating L.P., Camden USA, Inc. and Bank One, NA. Incorporated by reference from Exhibit 10.20 to Camden Property Trust's Form 10- K for the year ended December 31, 1999 (File No. 1-12110). 12.1* Statement re Computation of Ratios 13.1* Selected pages of the Camden Property Trust Annual Report to Shareholders for the year ended December 31, 2001. 21.1* Subsidiaries of Camden Property Trust. 23.1* Consent of Deloitte & Touche LLP. 24.1* Powers of Attorney for Richard J. Campo, D. Keith Oden, G. Steven Dawson, William R. Cooper, George A. Hrdlicka, Scott S. Ingraham, Lewis A. Levey, F. Gardner Parker and Steven A. Webster. _____________________ *Filed herewith. 14(b) Reports on Form 8-K Camden Property Trust did not file any Current Reports on Form 8-K during the fourth quarter of 2001. 14 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. March 28, 2002 CAMDEN PROPERTY TRUST By: /s/G. Steven Dawson ------------------------------------- G. Steven Dawson Chief Financial Officer, Senior Vice President - Finance and Secretary By: /s/Dennis M. Steen -------------------------------------- Dennis M. Steen Vice President - Controller, Chief Accounting Officer and Treasurer 15 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
* Chairman of the Board of Trust March 28, 2002 - ----------------------- Managers and Chief Executive Richard J. Campo Officer (Principal Executive Officer) * President, Chief Operating Officer March 28, 2002 - ----------------------- and Trust Manager D. Keith Oden /S/G. Steven Dawson Chief Financial Officer, Senior Vice March 28, 2002 - ----------------------- President-Finance and Secretary G. Steven Dawson (Principal Financial Officer) /S/Dennis M. Steen Vice President - Controller, Chief March 28, 2002 - ----------------------- Accounting Officer and Treasurer Dennis M. Steen (Principal Accounting Officer) * Trust Manager March 28, 2002 - ----------------------- William R. Cooper * Trust Manager March 28, 2002 - ----------------------- George A. Hrdlicka * Trust Manager March 28, 2002 - ----------------------- Scott S. Ingraham * Trust Manager March 28, 2002 - ----------------------- Lewis A. Levey * Trust Manager March 28, 2002 - ----------------------- F. Gardner Parker * Trust Manager March 28, 2002 - ----------------------- Steven A. Webster
*By: /S/G. Steven Dawson --------------------------------- G. Steven Dawson Attorney-in-Fact 16 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following financial statements of Camden Property Trust and its subsidiaries required to be included in Item 14(a)(1) are listed below: Page CAMDEN PROPERTY TRUST Independent Auditors' Report (included herein) . . . . . . . . . . . . . F-2 Financial Statements (incorporated by reference under Item 8 of Part II from pages 50 through 75 of our Annual Report to Shareholders for the year ended December 31, 2001): Independent Auditors' Report Consolidated Balance Sheets as of December 31, 2001 and 2000 Consolidated Statements of Operations for the Years Ended December 31, 2001, 2000 and 1999 Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2001, 2000 and 1999 Consolidated Statements of Cash Flows for the Years Ended December 31, 2001, 2000 and 1999 Notes to Consolidated Financial Statements The following financial statement supplementary data of Camden Property Trust and its subsidiaries required to be included in Item 14(a)(2) is listed below: Schedule III -- Real Estate and Accumulated Depreciation . . . . . . . . S-1 F-1 INDEPENDENT AUDITORS' REPORT To the Shareholders of Camden Property Trust We have audited the consolidated financial statements of Camden Property Trust ("Camden") as of December 31, 2001 and 2000, and for each of the three years in the period ended December 31, 2001, and have issued our report thereon dated January 29, 2002; such consolidated financial statements and report are included in your 2001 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the financial statement schedule of Camden Property Trust, listed in Item 14. This financial statement schedule is the responsibility of Camden's management. Our responsibility is to express an opinion based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein. DELOITTE & TOUCHE LLP Houston, Texas January 29, 2002 F-2 Schedule III CAMDEN PROPERTY TRUST REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2001 (In thousands)
Cost Capitalized Subsequent to Acquisition Initial Cost to or Description Encumbrances Camden Property Trust Development - -------------------------------------- ------------ ------------------------- ------------ Building and Property Name Location Land Improvements - -------------------------- ---------- ---------- -------------- Apartments................ TX $ 28,557 $131,530 $ 657,404 $ 67,902 Apartments................ AZ 7,877 20,986 149,466 7,314 Apartments................ CA 48,524 53,237 135,983 8,345 Apartments................ CO 32,012 21,907 164,114 4,310 Apartments................ FL 21,734 47,170 334,401 25,235 Apartments................ KY 18,155 5,107 66,684 4,076 Apartments................ MO 51,733 18,148 120,848 12,859 Apartments................ NV 61,227 52,789 371,902 13,803 Apartments................ NC 13,338 11,842 75,099 10,417 Properties under Development NV 3,295 11,286 Properties under Development CA 28,457 29,084 Properties under Development FL 3,331 798 Properties under Development TX 42,040 25,305 ----------- -------- ------------ ---------- Total................ $ 283,157 $439,839 $ 2,142,374 $ 154,261 =========== ======== ============ ==========
Date Gross Amount at Which Accumulated Constructed Depreciable Description Carried at December 31, 2001 (a) Depreciation(a) or Acquired Life (Years) - -------------------------------------- ---------------------------------------- --------------- ------------ ------------ Property Name Location Land Building Total - -------------------------- ---------- ---------- -------------- ------------- Apartments................ TX $131,530 $ 725,306 $ 856,836 $ 169,667 1993-2001 3 - 35 Apartments................ AZ 20,986 156,780 177,766 29,516 1994-2001 3 - 35 Apartments................ CA 53,237 144,328 197,565 11,955 1998-2001 3 - 35 Apartments................ CO 21,907 168,424 190,331 18,671 1998-2000 3 - 35 Apartments................ FL 47,170 359,636 406,806 61,098 1997-2000 3 - 35 Apartments................ KY 5,107 70,760 75,867 12,581 1997-2000 3 - 35 Apartments................ MO 18,148 133,707 151,855 34,728 1997 3 - 35 Apartments................ NV 52,789 385,705 438,494 51,298 1998-1999 3 - 35 Apartments................ NC 11,842 85,516 97,358 32,640 1997 3 - 35 Properties under Development NV 3,295 11,286 14,581 1998-2001 Properties under Development CA 28,457 29,084 57,541 1998-2001 Properties under Development FL 3,331 798 4,129 1998-2001 Properties under Development TX 42,040 25,305 67,345 1995-2001 -------- ------------- ----------- ------------ Total................ $439,839 $ 2,296,635 $ 2,736,474 $ 422,154 ======== ============= =========== ============
(a) The aggregate cost for federal income tax purposes at December 31,2001 was $2.6 billion. The changes in total real estate assets, excluding investments in joint ventures and third party development properties, for the years ended December 31, 2001, 2000 and 1999 are as follows: 2001 2000 1999 ----------- ---------- ----------- Balance, beginning of period............ $ 2,623,729 $2,656,165 $ 2,455,458 Additions during period: Acquisition - Oasis.................. 888 Acquisition - other.................. 20,634 Development.......................... 76,561 94,444 188,506 Improvements......................... 26,655 27,940 33,366 Deductions during period: Cost of real estate sold - other..... (11,106) (154,820) (22,053) ----------- ---------- ----------- Balance, end of period.................. $ 2,736,473 $2,623,729 $ 2,656,165 =========== ========== =========== The changes in accumulated depreciation for the years ended December 31, 2001, 2000 and 1999 are as follows: 2001 2000 1999 ----------- ---------- ----------- Balance, beginning of period............ $ 326,723 $ 253,545 $ 167,560 Depreciation......................... 98,400 94,227 87,491 Real estate sold..................... (2,969) (21,049) (1,506) ----------- ---------- ----------- Balance, end of period.................. $ 422,154 $ 326,723 $ 253,545 =========== ========== =========== S-1 EX-12 3 ex12-1.txt STATEMENT REGARDING COMPUTATION OF RATIOS EXHIBIT 12.1 CAMDEN PROPERTY TRUST STATEMENT REGARDING COMPUTATION OF RATIOS FOR THE FIVE YEARS ENDED DECEMBER 31, 2001 (In thousands, except for ratio amounts)
2001 (4) 2000 (3) 1999 (2) 1998 1997 (1) ---------- ----------- ---------- ---------- ---------- EARNINGS BEFORE FIXED CHARGES: Income before extraordinary charge $ 61,680 $ 74,424 $ 61,623 $ 57,333 $ 38,835 Add: income allocated to minority interests 15,999 15,306 10,290 1,322 1,655 Less: equity in income of joint ventures (8,527) (765) (683) (1,312) (1,141) ---------- ----------- ---------- ---------- ---------- 69,152 88,965 71,232 57,343 38,952 Distributed income of joint ventures 15,076 2,122 2,505 2,350 1,939 Less: interest capitalized (10,920) (15,303) (16,396) (9,929) (3,338) Less: preferred distribution of subsidiaries (12,872) (12,845) (8,278) ---------- ----------- ---------- ---------- ---------- Total earnings before fixed charges 60,436 62,939 49,063 49,764 37,553 ---------- ----------- ---------- ---------- ---------- FIXED CHARGES: Interest expense 69,841 69,036 57,856 50,467 28,537 Interest capitalized 10,920 15,303 16,396 9,929 3,338 Accretion of discount 421 403 320 169 142 Loan amortization 1,591 1,340 1,100 785 864 Interest portion of rental expense 569 478 517 300 235 Preferred distribution of subsidiaries 12,872 12,845 8,278 ---------- ----------- ---------- ---------- ---------- Total fixed charges 96,214 99,405 84,467 61,650 33,116 ---------- ----------- ---------- ---------- ---------- Total earnings and fixed charges $ 156,650 $ 162,344 $ 133,530 $ 111,414 $ 70,669 ========== =========== ========== ========== ========== RATIO OF EARNINGS TO FIXED CHARGES 1.63x 1.63x 1.58x 1.81x 2.13x RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED SHARE DIVIDENDS: Total fixed charges $ 96,214 $ 99,405 $ 84,467 $ 61,650 $ 33,116 Preferred share dividends 2,545 9,371 9,371 9,371 ---------- ----------- ---------- ---------- ---------- Total combined fixed charges and preferred share dividends 98,759 108,776 93,838 71,021 33,116 Total earnings and combined fixed charges and preferred share dividends $ 159,195 $ 171,715 $ 142,901 $ 120,785 $ 70,669 ========== =========== ========== ========== ========== RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED SHARE DIVIDENDS 1.61x 1.58x 1.52x 1.70x 2.13x
(1) Earnings include a $10,170 impact related to gain on sales of properties. Excluding this impact, such ratios would be 1.83x. (2) Earnings include a $2,979 impact related to gain on sales of properties. Excluding this impact, such ratios would be 1.55x and 1.49x. (3) Earnings include a $18,323 impact related to gain on sales of properties. Excluding this impact, such ratios would be 1.45x and 1.41x. (4) Earnings include a $2,372 impact related to gain on sales of properties. Excluding this impact, such ratios would be 1.60x and 1.59x.
INTEREST COVERAGE RATIO Total revenues $ 428,215 $ 403,539 $ 371,296 $ 323,839 $ 199,789 Total expenses (352,908) (332,132) (302,360) (265,184) (169,469) Add: Depreciation and amortization 101,660 96,966 89,516 78,113 44,836 Add: Interest expense 69,841 69,036 57,856 50,467 28,537 ---------- ----------- ---------- ---------- ---------- $ 246,808 $ 237,409 $ 216,308 $ 187,235 $ 103,693 ---------- ----------- ---------- ---------- ---------- Interest expense $ 69,841 $ 69,036 $ 57,856 $ 50,467 $ 28,537 ---------- ----------- ---------- ---------- ---------- INTEREST COVERAGE RATIO 3.5x 3.4x 3.7x 3.7x 3.6x ========== =========== ========== ========== ==========
EX-13 4 ex13-1.txt MANAGEMENT'S DISCUSSION AND ANALYSIS EXHIBIT 13.1 Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with all of the financial statements and notes appearing elsewhere in this report. Historical results and trends which might appear should not be taken as indicative of future operations. We have made statements in this report that are "forward-looking" in that they do not discuss historical fact, but instead note future expectations, projections, intentions or other items relating to the future. You should not rely on these forward-looking statements as they are subject to known and unknown risks, uncertainties and other factors that may cause our actual results or performance to differ materially from those included in the forward-looking statements. Many of those factors are noted in conjunction with the forward-looking statements in the text. Other important factors that could cause actual results to differ include: o the results of our efforts to implement our property development strategy; o the effect of economic and market conditions; o our failure to qualify as a real estate investment trust; o our cost of capital; o the actions of our competitors and our ability to respond to those actions; o changes in government regulations, tax rates and similar matters; and o environmental uncertainties and natural disasters. Do not rely on these forward-looking statements, which only represent our estimates and assumptions as of the date of this report. We assume no obligation to update or revise any forward-looking statement. Business Camden Property Trust is a real estate investment trust and, with our subsidiaries, reports as a single business segment with activities related to the ownership, development, construction and management of multifamily communities. As of December 31, 2001, we owned interests in, operated or were developing 147 multifamily properties containing 52,147 apartment homes located in nine states. Our properties, excluding properties in lease-up and under development, had a weighted average occupancy rate of 94.2% for the year ended December 31, 2001. This represents the average occupancy for all our properties in 2001 weighted by the number of apartment homes in each property. Weighted average occupancy was 94.0% for the year ended December 31, 2000. Two of our newly developed multifamily apartment properties containing 1,000 apartment homes were in lease-up at year end. Two of our multifamily properties containing 802 apartment homes were under development at December 31, 2001. Additionally, we have several sites which we intend to develop into multifamily apartment communities. Property Update During 2001, we completed construction on the following two development properties totaling 1,000 apartment homes: Camden Farmers Market in Dallas and Camden Crown Valley in Southern California. Stabilization occurred during 2001 at three properties totaling 1,256 apartment homes: Camden Oxmoor in Louisville, Camden Lee Vista in Orlando and Camden Copper Square in Phoenix. We expect stabilization to occur at the completed development properties during 2002. We consider a property stabilized once it reaches 90% occupancy, or generally one year from opening the leasing office, with some allowances for larger than average properties. Additionally, we have two properties currently under development: Camden Harbour View, a 538-unit property located in Long Beach, California and Camden Vineyards, a 264-unit property located in Murrieta, California. During 2001, we acquired one multifamily property and three tracts of undeveloped land. The completed multifamily property, Camden Pecos Ranch, is a 272-unit property located in Phoenix, Arizona which was purchased for $20.6 million, and was developed under our third party development program. Camden Pecos Ranch was completed during the fourth quarter 2000 and stabilized operations during the first quarter 2001. We acquired 13.6 acres of land in Murrieta, California, 27.5 acres of land in Orlando, and 8.3 acres of land in Houston for a total cost of $22.2 million. These projects were in pre-development at time of acquisition. The 13.6 acres of land acquired in California is currently being developed as a 264- unit property, Camden Vineyards. Dispositions during 2001 included two parcels of land totaling 22.7 acres located in Houston and three operating properties with a total of 1,264 apartment homes located in North Carolina and Dallas. The net proceeds from the land sales totaled $8.6 million and were used to reduce indebtedness outstanding under our unsecured line of credit. The operating properties were held through a joint venture and the gains from these dispositions, totaling $6.6 million, are included in "Equity in income of joint ventures". Our multifamily property portfolio, excluding land we hold for future development and joint venture properties we do not manage, at December 31, 2001, 2000 and 1999 is summarized as follows:
2001 2000 1999 ------------------------- -------------------------- ------------------------- Apartment Apartment Apartment Homes Properties Homes Properties Homes Properties ------------ ------------ ------------ ------------- ------------ ------------ Operating Properties West Region Las Vegas, Nevada (a)....................... 10,653 37 10,653 37 11,513 40 Denver, Colorado (a)........................ 2,529 8 2,529 8 2,312 7 Phoenix, Arizona............................ 2,109 7 1,837 6 1,505 5 Southern California......................... 1,653 4 1,272 3 1,272 3 Tucson, Arizona............................. 821 2 821 2 821 2 Reno, Nevada................................ 450 1 450 1 450 1 Central Region Dallas, Texas (b)........................... 8,359 23 8,447 23 9,381 26 Houston, Texas.............................. 7,190 16 7,190 16 8,258 19 St. Louis, Missouri......................... 2,123 6 2,123 6 2,731 7 Austin, Texas............................... 1,745 6 1,745 6 1,745 6 Corpus Christi, Texas....................... 1,663 4 1,663 4 1,512 4 Kansas City, Missouri....................... 596 1 596 1 596 1 El Paso, Texas ............................. 129 1 East Region Tampa, Florida.............................. 5,023 11 5,023 11 5,023 11 Orlando, Florida (c)........................ 2,804 6 2,804 6 2,312 6 Charlotte, North Carolina (b)............... 1,659 6 1,879 7 1,879 7 Louisville, Kentucky........................ 1,448 5 1,448 5 1,016 4 Greensboro, North Carolina (b).............. 520 2 856 3 856 3 Total Operating Properties 51,345 145 51,336 145 53,311 153 ------------ -------- ------------ -------- ------------ -------- Properties Under Development West Region Southern California ........................ 802 2 918 2 380 1 Phoenix, Arizona ........................... 332 1 Denver, Colorado ........................... 218 1 Central Region Dallas, Texas.............................. 620 1 620 1 East Region Orlando, Florida ........................... 492 1 Louisville, Kentucky........................ 432 1 ------------ -------- ------------ -------- ------------ -------- Total Properties Under Development 802 2 1,538 3 2,474 6 ------------ -------- ------------ -------- ------------ -------- Total Properties 52,147 147 52,874 148 55,785 159 ------------ -------- ------------ -------- ------------ -------- Less: Joint Venture Properties (a) (b) (c) 5,239 20 6,503 23 6,504 23 ------------ -------- ------------ -------- ------------ -------- Total Properties Owned 100% 46,908 127 46,371 125 49,281 136 ============ ======== ============ ======== ============ ========
(a) Includes properties held in joint ventures as follows: one property with 320 apartment homes (321 apartment homes at December 31, 1999) in Colorado in which we own a 50% interest, the remaining interest is owned by an unaffiliated private investor; and 19 properties with 4,919 apartment homes in Nevada in which we own a 20% interest, the remaining interest is owned by an unaffiliated private investor. (b) In addition to the properties listed in footnote (a), the December 31, 2000 and 1999 balances include properties held in joint ventures as follows: one property with 708 apartment homes in Dallas and two properties with 556 apartment homes in North Carolina in which we owned a 44% interest, the remaining interest was owned by unaffiliated private investors. (c) Includes the combination of operations at January 1, 2000 of two adjacent properties. At December 31, 2001, we had two completed properties in lease-up as follows:
Number of Estimated Apartment % Leased Date of Date of Property and Location Homes at 3/7/02 Completion Stabilization - ---------------------------------------- --------------- ------------ ------------- ---------------- Camden Farmers Market Dallas, TX........................... 620 83% 2Q01 2Q02 Camden Crown Valley Mission Viejo, CA.................... 380 77% 3Q01 2Q02
At December 31, 2001, we had two development properties under construction as follows:
Number of Estimated Estimated Estimated Apartment Cost Date of Date of Property and Location Homes ($ millions) Completion Stabilization - ---------------------------------------------- ------------ -------------- ------------- -------------- Camden Harbour View Long Beach, CA ............................ 538 $ 127.0 3Q03 4Q04 Camden Vineyards Murrieta, CA .............................. 264 35.0 4Q02 2Q03 --------- ---------- Total development properties ............ 802 $ 162.0 ========= ==========
Where possible, we stage our construction to allow leasing and occupancy during the construction period which we believe minimizes the duration of the lease-up period following completion of construction. Our accounting policy related to properties in the development and leasing phase is that all operating expenses, excluding depreciation, associated with occupied apartment homes are expensed against revenues generated by those apartment homes as they become occupied. All construction and carrying costs are capitalized and reported on the balance sheet in "Properties under development, including land" until individual buildings are completed. Carrying charges are principally interest and real estate taxes which are capitalized as part of properties under development. Upon completion of each building, the total cost of that building and the associated land is transferred to "Buildings and improvements" and "Land", respectively and the assets are depreciated over their estimated useful lives using the straight-line method of depreciation. Upon stabilization, all apartment homes are considered operating and we begin expensing all items that were previously considered carrying costs. If an event or change in circumstance indicates a potential impairment in the value of a property has occurred, our policy is to assess any potential impairment by making a comparison of the current and projected operating cash flows for such property over its remaining useful life, on an undiscounted basis, to the carrying amount of the property. If such carrying amounts are in excess of the estimated projected operating cash flows of the property, we would recognize an impairment loss equivalent to an amount required to adjust the carrying amount to its estimated fair market value. Our consolidated financial statements include $143.6 million related to properties currently under development. Of this amount, $46.2 million relates to our two development projects currently under construction. Additionally, we have $97.4 million invested in land held for future development. Included in this amount is $51.8 million in land development projects located in Houston, Dallas, and Long Beach. We are currently in the planning phase with respect to these properties to further develop apartment homes in these areas. We may also sell certain parcels of undeveloped land to third parties for commercial and retail development. During 2001, we completed construction on 17 for-sale townhomes in the downtown Dallas area at a total cost of approximately $5.5 million. At December 31, 2001, five units had been sold at a total sales price of approximately $1.6 million. The proceeds received from the townhome sales are included in other income in our consolidated financial statements. Other expenses in our consolidated financial statements represents the construction cost associated with the townhomes sold during the year. At December 31, 2001 and 2000, our investment in various geographic areas, excluding investments in joint ventures and third party development properties, was as follows: (Dollars in thousands) 2001 2000 ----------------- ------------------ West Region Las Vegas, Nevada....................$ 408,662 15% $ 404,957 15% Southern California.................. 255,106 9 212,785 8 Denver, Colorado..................... 190,331 7 188,507 7 Phoenix, Arizona..................... 143,536 5 121,526 5 Reno, Nevada......................... 44,413 2 43,713 2 Tucson, Arizona...................... 34,230 1 33,699 1 Central Region Dallas, Texas........................ 400,484 15 388,212 15 Houston, Texas....................... 392,480 14 379,036 15 St. Louis, Missouri.................. 115,721 4 113,655 4 Austin, Texas........................ 70,959 3 70,244 3 Corpus Christi, Texas................ 60,258 2 59,143 2 Kansas City, Missouri................ 36,134 1 35,938 1 East Region Tampa, Florida....................... 246,450 9 242,776 9 Orlando, Florida..................... 164,485 6 158,972 6 Charlotte, North Carolina............ 79,867 3 78,775 3 Louisville, Kentucky................. 75,867 3 74,595 3 Greensboro, North Carolina........... 17,491 1 17,196 1 ----------- ---- ----------- ----- Total Properties $ 2,736,474 100% $ 2,623,729 100% =========== ==== =========== ===== Third Party Development Our construction division performs services for our internally developed construction pipeline, as well as provides services for other third party owners of multifamily, commercial and retail properties. In addition to providing construction services to third party multifamily owners, for selected properties in markets we are comfortable making investments in, we may provide financing for a portion of the project costs. In connection with this program, we have entered into agreements with unaffiliated third parties to develop, construct, and manage five multifamily projects containing a total of 1,667 apartment homes. We are providing financing for a portion of each project in the form of notes receivable which mature through 2005. These notes accrue interest at 10% annually and is being recognized as earned. These notes are secured by second liens on the assets and partial guarantees by the third party owners. We expect these notes to be repaid from operating cash flow or proceeds from the sale of the individual properties. At December 31, 2001 and 2000, these notes had principal balances totaling $70.0 million and $72.9 million, respectively. We anticipate funding an additional $10.0 million on these third party development properties during 2002. These projects are supported with adequate third party equity to allow us to earn fees for managing the development, construction and eventual operations of these properties. The related fees we earned for all projects totaled $2.2 million, $2.2 million and $1.7 million for the years ended December 31, 2001, 2000 and 1999, respectively. Two of the projects were completed and stabilized operations during 2001. The remaining three projects are all currently under construction, with one project in the lease-up phase. We expect that the remaining two projects will begin leasing during 2002. During 2001, we purchased one completed and stabilized third party development project and three projects which were in pre-development as they fit our diversification strategy. All net fees and interest previously recognized on the pre-development projects were reversed at time of purchase. Liquidity and Capital Resources Financial Structure We intend to maintain what management believes to be a conservative capital structure by: (i) using what management believes is a prudent combination of debt and common and preferred equity; (ii) extending and sequencing the maturity dates of our debt where possible; (iii)managing interest rate exposure using fixed rate debt and hedging where management believes it is appropriate; (iv) borrowing on an unsecured basis in order to maintain a substantial number of unencumbered assets; and (v) maintaining conservative coverage ratios. The interest expense coverage ratio, net of capitalized interest, was 3.5, 3.4 and 3.7 times for the years ended December 31, 2001, 2000 and 1999, respectively. At December 31, 2001, 2000 and 1999, 80.4%, 75.6% and 76.0% respectively, of our real estate assets (based on invested capital) were unencumbered. Our weighted average maturity of debt, excluding our line of credit, was 6.9 years, 5.6 years and 6.1 years at December 31, 2001, 2000 and 1999. Liquidity We intend to meet our short-term liquidity requirements through cash flows provided by operations, our unsecured line of credit discussed in the "Financial Flexibility" section and other short-term borrowings. We expect that our ability to generate cash will be sufficient to meet our short-term liquidity needs, which include: (i) normal operating expenses; (ii) current debt service requirements; (iii) recurring capital expenditures; (iv) property development; (v) investments in third party development properties; (vi) common share repurchases; and (vii) distributions on our common and preferred equity. We consider our long-term liquidity requirements to be the repayment of maturing debt, including borrowings under our unsecured line of credit, and funding of acquisitions. We intend to meet our long- term liquidity requirements through the use of common and preferred equity capital, senior unsecured debt and property dispositions. We intend to concentrate our growth efforts toward selective development and acquisition opportunities in our current markets, and through the acquisition of existing operating portfolios and the development of properties in selected new markets. During the year ended December 31, 2001, we incurred $76.6 million in development costs and $20.6 million in acquisition costs. We are developing two properties at a projected aggregate cost of approximately $162.0 million, $26.6 million of which was incurred during 2001. At year end, we were obligated for approximately $85.8 million under construction contracts (a substantial amount of which we expect to fund with debt). We intend to fund our developments and acquisitions through a combination of equity capital, partnership units, medium-term notes, construction loans, other debt securities and our unsecured line of credit. We also seek to selectively dispose of assets that management believes have a lower projected net operating income growth rate than the overall portfolio, or no longer conform to our operating and investment strategies. We intend to continue rebalancing our portfolio with the goal of limiting any one market to no more than 12% of total real estate assets. We expect that any such sales should generate capital for acquisitions and new developments or for debt reduction. Real estate to be disposed of is reported at the lower of its carrying amount or its estimated fair value, less its cost to sell. Depreciation expense is not recorded during the period in which such assets are held for sale. Dispositions during the year included two parcels of land totaling 22.7 acres located in Houston. We used the net proceeds from these dispositions, totaling $8.6 million, to reduce indebtedness outstanding under our unsecured line of credit. Additionally, three properties totaling 1,264 apartment homes were sold during the year. These properties were held in a joint venture in which we owned a 44% interest. The gains from these property sales are included in "Equity in income of joint ventures" in our consolidated statement of operations. Net cash provided by operating activities totaled $198.2 million for 2001, an increase of $31.8 million, or 19.1%, over 2000. This increase was attributable to an $8.0 million increase in net operating income from the real estate portfolio for 2001 over the same period in 2000. Equity in income of joint ventures for 2001 increased $7.8 million over 2000. This increase was due to the sale in 2001 of three properties held in a joint venture. Fee and asset management and other income increased a total of $4.4 million over the prior year, primarily from third party construction fees, interest on notes receivable and the sale of five townhomes. Additionally, accrued expenses and other liabilities increased $9.3 million during 2001 primarily from increases in accrued interest from new unsecured debt issuances. Net cash used in investing activities totaled $119.6 million for the year ended 2001 compared to $15.8 million in 2000. For 2001, expenditures for acquisitions, property development and capital improvements totaled $20.6 million, $76.6 million and $26.7 million, respectively. These expenditures were offset by $10.4 million in net proceeds received from the sales of properties and townhomes. For the year ended 2000, expenditures for property development and capital improvements were $94.4 million and $27.9 million, respectively. Additionally, we received $150.1 million in net proceeds from property dispositions during 2000. Net cash used in financing activities totaled $77.9 million for the year ended 2001 compared to $151.3 million for 2000. During 2001, we paid distributions totaling $119.2 million and paid $26.9 million to repurchase our outstanding Series A preferred shares. We received net proceeds totaling $326.9 million from the issuance of senior unsecured and secured notes. The proceeds from these issuances were used to pay down borrowings under our line of credit, which decreased $39.0 million during the year, and repay $219.4 million in notes payable. For the year ended 2000, we paid distributions totaling $112.9 million, repaid notes payable totaling $107.4 million and repurchased $31.2 million common shares and units convertible into common shares. These payments were offset by the issuances of $17.5 million of preferred units, and an increase in borrowings under our line of credit of $80.0 million. In 1998, we began repurchasing our common equity securities under a program approved by our Board of Trust Managers. The plan allows us to repurchase or redeem up to $200 million of our securities through open market purchases and private transactions. Management consummates these repurchases and redemptions at the time when they believe that we can reinvest available cash flow into our own securities at yields which exceed those currently available on direct real estate investments. These repurchases were made and we expect that future repurchases, if any, will be made without incurring additional debt and, in management's opinion, without reducing our financial flexibility. At December 31, 2001, we had repurchased approximately 6.9 million common shares and redeemed approximately 106,000 units convertible into common shares at a total cost of $180.9 million. No common shares or units convertible into common shares were repurchased during 2001. On January 17, 2002, we paid a distribution of $0.61 per share for the fourth quarter of 2001 to all holders of record of our common shares as of December 19, 2001, and paid an equivalent amount per unit to holders of common limited partnership units in Camden Operating, L.P. Total distributions to common shareholders and holders of common operating partnership units for the year ended December 31, 2001 were $2.44 per share or unit. We determine the amount of cash available for distribution to unitholders in accordance with the partnership agreements and have made and intend to continue to make distributions to the holders of common operating partnership units in amounts equivalent to the per share distributions paid to holders of common shares. We intend to continue to make shareholder distributions in accordance with REIT qualification requirements under the federal tax code while maintaining what management believes to be a conservative payout ratio. The dividend payout ratio, which is calculated by dividing distributions per share by funds from operations per share, was 69%, 64% and 65% for the years ended December 31, 2001, 2000 and 1999, respectively. In April 2001, we announced that our issued and outstanding Series A preferred shares would be redeemed effective April 30, 2001 at a redemption price of $25.00 per share plus an amount equal to all accumulated, accrued and unpaid dividends as of April 30, 2001. Prior to redemption, 3.1 million Series A preferred shares were converted into 2.4 million common shares. The remaining Series A preferred shares were redeemed for an aggregate of $27.1 million, including unpaid dividends, using funds available under our unsecured line of credit. Our operating partnership has issued $100 million of 8.5% Series B Cumulative Redeemable Perpetual Preferred Units and $53 million of 8.25% Series C Cumulative Redeemable Perpetual Preferred Units. Distributions on the preferred units are payable quarterly in arrears. The preferred units are redeemable for cash by the operating partnership on or after the fifth anniversary of issuance at par plus the amount of any accumulated and unpaid distributions. The preferred units are convertible after 10 years by the holder into corresponding Series B or C Cumulative Redeemable Perpetual Preferred Shares. The preferred units are subordinate to present and future debt. Distributions on the preferred units totaled $12.9 million for the year ended December 31, 2001. Scheduled principal repayments on all notes payable outstanding at December 31, 2001 over the next five years are $39.3 million in 2002, $87.3 million in 2003, $391.8 million in 2004, $61.4 million in 2005, $210.7 million in 2006 and $416.5 million thereafter. Principal repayments during 2002 will be made using funds available under our unsecured line of credit. Financial Flexibility In August 2001, we amended our line of credit to increase total capacity by $20 million to $420 million and extended the maturity through August 2004. The scheduled interest rates are currently based on spreads over LIBOR or Prime. The scheduled interest rates are subject to change as our credit ratings change. Advances under the line of credit may be priced at the scheduled rates, or we may enter into bid rate loans with participating banks at rates below the scheduled rates. These bid rate loans have terms of six months or less and may not exceed the lesser of $200 million or the remaining amount available under the line of credit. The line of credit is subject to customary financial covenants and limitations. At year end, we were in compliance with all covenants and limitations. As an alternative to our unsecured line of credit, we from time to time borrow using competitively bid unsecured short-term notes with lenders who may or may not be a part of the unsecured line of credit bank group. Such borrowings vary in term and pricing and are typically priced at interest rates below those available under the unsecured line of credit. As of December 31, 2001, we had $263 million available under the unsecured line of credit and $435.5 million available under our $750 million universal shelf registration. We have significant unencumbered real estate assets which we believe could be sold or used as collateral for financing purposes should other sources of capital not be available. The following table summarizes notes payable issued during 2001:
Month of Coupon Maturity Interest Type and Amount Issuance Terms Rate Date Paid Proceeds - ------------------------------------- ----------- -------------- ----------- ------------ -------------- -------------- $150.0 million senior unsecured notes 02/01 Interest only 7.625% 02/15/11 February 15 $148.3 million and August 15 $50.0 million senior unsecured notes 02/01 Interest only 7.000% 02/15/06 February 15 $49.5 million and August 15 $14.5 million medium-term notes 08/01 Interest only 6.790% 08/27/10 March 15 and $14.4 million September 15 $100.0 million senior unsecured notes 09/01 Interest only 6.750% 09/15/10 March 15 and $99.2 million September 15
We may redeem the notes at any time at a redemption price equal to the principal amount and accrued interest, plus a make-whole provision. The notes are direct, senior unsecured obligations and rank equally with all other unsecured and unsubordinated indebtedness. We used the net proceeds to reduce indebtedness outstanding under our unsecured line of credit. During 2001, we paid off five secured notes totaling $50.7 million and $150 million in unsecured notes matured. The interest rates on the secured notes ranged from 7.5% to 8.63%, and rates on the unsecured notes were from 6.63% to 6.75%. We incurred prepayment penalties totaling $388,000 in connection with repayment of four of the secured notes. We repaid both the secured and unsecured notes using proceeds available under our unsecured line of credit. The secured notes were prepaid due to our ability to refinance them at significantly lower interest rates. At December 31, 2001, the weighted average interest rate on floating rate debt was 2.89%. The joint ventures in which we had an interest have been funded with secured, non-recourse debt. We are not committed to any additional funding in relation to our joint ventures. Market Risk We use fixed and floating rate debt to finance acquisitions, developments and maturing debt. These transactions expose us to market risk related to changes in interest rates. Management's policy is to review our borrowings and attempt to mitigate interest rate exposure through the use of long term debt maturities and derivative instruments where appropriate. Our policy regarding the use of derivative financial instruments in managing market risk exposures is consistent with the prior year and is not expected to change in future years. We do not use derivative financial instruments for trading or speculative purposes. As of December 31, 2001, we had no derivative instruments outstanding. For fixed rate debt, interest rate changes affect the fair market value but do not impact net income to common shareholders or cash flows. Conversely, for floating rate debt, interest rate changes generally do not affect the fair market value but do impact net income to common shareholders and cash flows, assuming other factors are held constant. At December 31, 2001, we had fixed rate debt of $988.1 million and floating rate debt of $218.9 million. Holding other variables constant (such as debt levels), a one percentage point variance in interest rates would change the unrealized fair market value of the fixed rate debt by approximately $40.9 million. The net income to common shareholders and cash flows impact on the next year resulting from a one percentage point variance in interest rates on floating rate debt would be approximately $2.2 million, holding all other variables constant. Funds from Operations (FFO) Management considers FFO to be an appropriate measure of performance of an equity REIT. The National Association of Real Estate Investment Trusts currently defines FFO as net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from debt restructuring and sales of property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our definition of diluted FFO also assumes conversion at the beginning of the period of all dilutive convertible securities, including minority interests, which are convertible into common equity. We believe that in order to facilitate a clear understanding of our consolidated historical operating results, FFO should be examined in conjunction with net income as presented in the consolidated financial statements and data included elsewhere in this report. FFO is not defined by generally accepted accounting principles. FFO should not be considered as an alternative to net income as an indication of our operating performance or to net cash provided by operating activities as a measure of our liquidity. Further, FFO as disclosed by other REIT's may not be comparable to our calculation. Our diluted FFO for the year ended December 31, 2001 increased $1.6 million over 2000. On a per share basis, diluted FFO for 2001 increased 1.1% over 2000. This increase in diluted FFO was primarily due to a $8.0 million increase in net operating income from our real estate portfolio, and a $1.1 million increase in income from joint ventures, net of gains on sales of properties held in those joint ventures. These increases were offset by a $9.9 million impairment provision for technology investments. The calculation of basic and diluted FFO for the years ended December 31, 2001, 2000 and 1999 follows: (In thousands)
2001 2000 1999 ---------- --------- ---------- Funds from operations Net income to common shareholders.................................... $ 58,747 $ 65,053 $ 52,252 Real estate depreciation............................................. 98,400 94,277 87,491 Adjustments for unconsolidated joint ventures........................ (3,032) 3,238 3,936 Extraordinary charge (early retirement of debt)...................... 388 Gain on sales of properties and joint venture interests.............. (2,372) (18,323) (2,979) ---------- --------- ---------- Funds from operations - basic 152,131 144,245 140,700 Preferred share dividends............................................ 2,545 9,371 9,371 Income allocated to units convertible into common shares............. 3,127 2,461 2,014 Adjustments for convertible subordinated debentures.................. 37 197 284 ---------- --------- ---------- Funds from operations - diluted $ 157,840 $ 156,274 $ 152,369 ========== ========= ========== Weighted average shares - basic 39,796 38,112 41,236 Common share options and awards granted.............................. 1,234 729 431 Preferred shares..................................................... 1,052 3,207 3,207 Minority interest units.............................................. 2,509 2,547 2,624 Convertible subordinated debentures.................................. 19 105 146 ---------- --------- ---------- Weighted average shares - diluted 44,610 44,700 47,644 ========== ========= ==========
Results of Operations Changes in revenues and expenses related to our operating properties from period to period are primarily due to property developments, dispositions, acquisitions, and improvements in the performance of the stabilized properties in the portfolio. Where appropriate, comparisons are made on a dollars-per- weighted-average-apartment home basis in order to adjust for such changes in the number of apartment homes owned during each period. Selected weighted average revenues and expenses per operating apartment home for the three years ended December 31, 2001 are as follows:
2001 2000 1999 ----------- ---------- ----------- Rental income per apartment home per month.................................. $ 686 $ 653 $ 623 Property operating and maintenance per apartment home per year.............. $ 2,541 $ 2,424 $ 2,367 Real estate taxes per apartment home per year............................... $ 895 $ 840 $ 798 Weighted average number of operating apartment homes........................ 45,488 46,501 45,606
2001 Compared to 2000 Earnings before interest, depreciation and amortization increased $9.4 million, or 4.0%, from $237.4 million to $246.8 million for the years ended December 31, 2000 and 2001, respectively. The weighted average number of apartment homes decreased by 1,013 apartment homes, or 2.2%, from 46,501 to 45,488 for the years ended December 31, 2000 and 2001, respectively. The decrease in the weighted average number of apartment homes is due to the sale of 3,599 apartment homes in the third quarter of 2000, offset by property development and acquisition. Total operating properties we owned 100% were 125 and 122 at December 31, 2001 and 2000, respectively. The weighted average number of apartment homes and the operating properties exclude the impact of our ownership interest in properties owned in joint ventures. Our apartment communities generate rental revenue and other income through the leasing of apartment homes. Revenues from our rental operations comprised 94%and 97% of our total revenues for the years ended December 31, 2001 and 2000, respectively. Our primary financial focus for our apartment communities is net operating income. Net operating income represents total property revenues less property operating and maintenance expenses, including real estate taxes. Net operating income increased $8.0 million, or 3.3%, from $239.4 million to $247.3 million for the years ended December 31, 2000 and 2001, respectively. Rental income for the year ended December 31, 2001 increased $10.1 million, or 2.8% over the year ended December 31, 2000. Rental income per apartment home per month increased $33, or 5.1%, from $653 to $686 for the years ended December 31, 2000 and 2001, respectively. The increase was primarily due to increased revenue growth from the stabilized real estate portfolio and higher average rental rates on the completed development properties. Also, the properties sold in 2000 had average rental rates which were lower than the portfolio average. Overall average occupancy increased slightly from 94.0% for the year ended December 31, 2000 to 94.2% for the year ended December 31, 2001. Other property income increased $2.4 million from $27.0 million to $29.4 million for the years ended December 31, 2000 and 2001, respectively, which represents a monthly increase of $5 per apartment home. This increase in other property income was primarily due to increases from revenue sources such as telephone, cable, water, and other miscellaneous property fees. Equity in income of joint ventures increased $7.8 million over the year ended 2000, primarily from gains recognized in one of our joint ventures from the sale of three properties totaling 1,264 apartment homes. Fee and asset management in 2001 increased $1.1 million over 2000. This increase is primarily due to fees earned on third party construction projects. Other income for the year ended December 31, 2001 increased $3.3 million over the year ended 2000. This increase was due to interest earned on our investments in third party development properties and from sales of five townhomes. Property operating and maintenance expenses increased $2.8 million or 2.5%, from $112.7 million to $115.6 million, but decreased slightly as a percent of total property income from 28.8% to 28.6%, for the years ended December 31, 2000 and 2001, respectively. On an annualized basis, property operating and maintenance expenses increased $117 per unit, or 4.8%. The increase in operating expense was due to significant increases in property insurance costs as well as increases in salary and benefit expenses per unit. Our operating expense ratios decreased primarily as a result of operating efficiencies generated by our newly developed properties. The operating expense ratios for the properties sold during the third quarter of 2000 were higher than the portfolio average. Real estate taxes increased $1.7 million from $39.1 million to $40.7 million for the years ended December 31, 2000 and 2001, respectively, which represents an annual increase of $55 per apartment home. The increase was primarily due to increases in the valuations of properties and increases in property tax rates. General and administrative expenses decreased $606,000, from $14.3 million in 2000 to $13.7 million in 2001, and decreased as a percent of revenues from 3.6% to 3.2%. The decrease was due to vesting of performance-based compensation awards in 2000, offset by increases in 2001 in salary and benefit expenses, information technology and branding initiatives and tax expenses on our taxable subsidiaries. During 2001, we recorded an impairment provision totaling $9.9 million, which represented the remaining carrying value of all of our technology investments at the time of write-off. This provision was recorded after management determined that the current capital markets for technology companies, and the expected future cash flows from these investments, made it difficult to support the carrying values of our technology investments. Gross interest cost before interest capitalized to development properties decreased from $84.3 million for the year ended December 31, 2000 to $80.8 million for the year ended December 31, 2001. This decrease is primarily due to lower average debt balances in 2001 arising from proceeds received from the dispositions in the third quarter of 2000, lower interest rates on our variable debt and interest savings from the prepayment of mortgage debt. These decreases in interest expense were offset by increases in the debt used to fund new development, acquisitions, investments to third party development properties and the repurchase of our preferred shares. Interest capitalized decreased to $10.9 million from $15.3 million for the years ended December 31, 2001 and 2000, respectively, due to lower development activities during 2001. Depreciation and amortization increased from $97.0 million to $101.7 million. This increase was due primarily to new development, property acquisition and capital improvements, partially offset by dispositions during the third quarter of 2000. Gains on sale of properties for the year ended December 31, 2001 totaled $2.4 million due primarily to the sale of 22.7 acres of undeveloped land located in Houston. Gains on sales of properties for the year ended December 31, 2000 totaled $18.3 million due to the sale of eleven properties containing a total of 3,599 apartment homes. Also included in the gain in 2000 is the sale of a mini-storage facility in Las Vegas and the sale of approximately 61 acres of undeveloped land located in Las Vegas, Dallas and Houston. Preferred share dividends decreased from $9.4 million in 2000 to $2.5 million in 2001 due to the conversion of 3.1 million preferred shares into common shares and the redemption of approximately 1.0 million preferred shares for cash. 2000 Compared to 1999 Earnings before interest, depreciation and amortization increased $21.1 million, or 9.8%, from $216.3 million to $237.4 million for the years ended December 31, 1999 and 2000, respectively. The weighted average number of apartment homes increased by 895 apartment homes, or 1.9%, from 45,606 to 46,501 for the years ended December 31, 1999 and 2000, respectively. Total operating properties we owned 100% were 122 and 130 at December 31, 2000 and 1999, respectively. The weighted average number of apartment homes and the operating properties exclude the impact of our ownership interest in properties owned in joint ventures. Our apartment communities generate rental revenue and other income through the leasing of apartment homes. Revenues from our rental operations comprised 97% and 98% of our total revenues for the years ended December 31, 2000 and 1999, respectively. Our primary financial focus for our apartment communities is net operating income. Net operating income represents total property revenues less property operating and maintenance expenses, including real estate taxes. Net operating income increased $20.4 million, or 9.3%, from $218.9 million to $239.4 million for the years ended December 31, 1999 and 2000, respectively. Rental income for the year ended December 31, 2000 increased $22.9 million, or 6.7% over the year ended December 31, 1999. Rental income per apartment home per month increased $30, or 4.8%, from $623 to $653 for the years ended December 31, 1999 and 2000, respectively. The increase was primarily due to increased revenue growth from the stabilized real estate portfolio and higher average rental rates on the completed development properties. Additionally, overall average occupancy increased from 93.4% for the year ended December 31, 1999 to 94.0% for the year ended December 31, 2000. Other property income increased $4.9 million from $22.1 million to $27.0 million for the years ended December 31, 1999 and 2000, respectively, which represents a monthly increase of $8 per apartment home. This increase in other property income was primarily due to increases from revenue sources such as telephone, cable and water. Other income increased $3.9 million from $1.9 million to $5.8 million for the years ended December 31, 1999 and 2000, respectively. This increase was primarily due to interest earned on our investments in third party development properties which increased $38.5 million during the year. Property operating and maintenance expenses increased $4.8 million or 4.4%, from $108.0 million to $112.7 million, but decreased as a percent of total property income from 29.7% to 28.8%, for the years ended December 31, 1999 and 2000, respectively. The increase in operating expense was due to a larger number of apartment homes in operation and an increase in salary and benefit expenses per unit. Our operating expense ratios decreased primarily as a result of operating efficiencies generated by our newly developed properties. Real estate taxes increased $2.6 million from $36.4 million to $39.1 million for the years ended December 31, 1999 and 2000, respectively, which represents an annual increase of $42 per apartment home. The increase was primarily due to increases in the valuations of renovated and developed properties and increases in property tax rates. General and administrative expenses increased $3.7 million, from $10.6 million in 1999 to $14.3 million in 2000, and increased as a percent of revenues from 2.9% to 3.6%. The increase was primarily due to increases in incentive-based compensation expense, including the vesting of previously issued and outstanding restricted performance-based compensation awards related to successful implementation of our land development strategy, and expenses related to our information technology initiatives. Excluding the vesting of the restricted awards associated with the land sales, the general and administrative expense percentage would have been 3.0% of revenues for the year ended December 31, 2000. Interest expense increased from $57.9 million in 1999 to $69.0 million in 2000 primarily due to interest on debt incurred to fund new development and repurchase securities under our repurchase program. Interest capitalized was $15.3 million and $16.4 million for the years ended December 31, 2000 and 1999, respectively. Depreciation and amortization increased from $89.5 million to $97.0 million. This increase was due primarily to the completion of new development and capital expenditures over the past two years, partially offset by property dispositions. Gains on sales of properties for the year ended December 31, 2000 totaled $18.3 million due to the sale of eleven properties containing a total of 3,599 apartment homes. Also included in the gain is the sale of a mini-storage facility in Las Vegas and the sale of approximately 61 acres of undeveloped land located in Las Vegas, Dallas and Houston. Gains on sales of properties for the year ended December 31, 1999 totaled $3.0 million due to the sale of two multifamily properties containing 358 units and the sale of our investment in two commercial office buildings. The gains recorded on these 1999 dispositions were partially offset by a loss on the sale of a retail/commercial center. The gains in 1999 do not include a loss on the sale of a 408 unit property held in a joint venture of $738,000 which is included in "Equity in income of joint ventures." Distributions on units convertible into perpetual preferred shares increased $4.6 million, from $8.3 million for the year ended December 31, 1999 to $12.8 million for the year ended December 31, 2000. This increase is attributable to our issuances of perpetual preferred units during 1999 and 2000 as follows: $100 million in February 1999; $35.5 million in August and September of 1999; and $17.5 million in January 2000. Inflation We lease apartments under lease terms generally ranging from six to thirteen months. Management believes that such short-term lease contracts lessen the impact of inflation due to the ability to adjust rental rates to market levels as leases expire. Impact of New Accounting Pronouncements In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities", which is effective for all fiscal years beginning after June 15, 2000. SFAS No. 133, as amended, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. Under SFAS No. 133, certain contracts that were not formerly considered derivatives may now meet the definition of a derivative. We have adopted SFAS No. 133 effective January 1, 2001. The adoption of SFAS No. 133 did not have a material impact on our financial position, results of operations, or cash flows. In June 2001, FASB issued SFAS No. 141, "Business Combinations", which is effective for business combinations initiated after June 30, 2001. SFAS No. 141 requires all business combinations to be accounted for under the purchase method and that the pooling-of-interest method is no longer allowed. The adoption of SFAS No. 141 will not have a material effect on our financial position, results of operations, or cash flows. In June 2001, FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets", which is effective for fiscal years beginning after December 15, 2001. SFAS No. 142 requires that goodwill no longer be amortized to earnings, but instead be reviewed for impairment. The adoption of SFAS No. 142 will not have a material impact on our financial position, results of operations, or cash flows. In June 2001, FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations", which is effective for fiscal years beginning after June 15, 2002. SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The adoption of SFAS No. 143 will not have a material impact on our financial position, results of operations or cash flows. In August 2001, FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long- Lived Assets", which is effective for fiscal years beginning after December 15, 2001. SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The adoption of SFAS No. 144 will not have a material impact on our financial position, results of operations or cash flows. INDEPENDENT AUDITORS' REPORT To the Shareholders of Camden Property Trust We have audited the accompanying consolidated balance sheets of Camden Property Trust as of December 31, 2001 and 2000, and the related consolidated statements of operations, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the management of Camden Property Trust. Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Camden Property Trust at December 31, 2001 and 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Houston, Texas January 29, 2002 CAMDEN PROPERTY TRUST CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts)
December 31, ----------------------------- 2001 2000 ------------- -------------- Assets Real estate assets, at cost Land........................................................................... $ 362,717 $ 350,248 Buildings and improvements..................................................... 2,230,161 2,124,740 2,592,878 2,474,988 Less: accumulated depreciation................................................. (422,154) (326,723) ------------- ------------- Net operating real estate assets............................................ 2,170,724 2,148,265 Properties under development, including land................................... 143,596 148,741 Investment in joint ventures................................................... 17,073 22,612 Investment in third party development properties............................... 69,983 72,893 ------------- ------------- Total real estate assets................................................. 2,401,376 2,392,511 Accounts receivable-- affiliates.................................................. 4,586 3,236 Notes receivable-- affiliates..................................................... 1,800 1,800 Other assets, net ................................................................ 33,121 23,923 Cash and cash equivalents......................................................... 5,625 4,936 Restricted cash................................................................... 3,157 4,475 ------------- ------------- Total assets................................................................ $ 2,449,665 $ 2,430,881 ============= ============= Liabilities and Shareholders' Equity Liabilities Notes payable: Unsecured................................................................... $ 923,890 $ 799,026 Secured..................................................................... 283,157 339,091 Accounts payable............................................................... 13,337 13,592 Accrued real estate taxes...................................................... 28,378 26,781 Accrued expenses and other liabilities......................................... 46,275 36,981 Distributions payable.......................................................... 30,298 28,900 ------------- ------------- Total liabilities........................................................... 1,325,335 1,244,371 Minority interests: Units convertible into perpetual preferred shares............................ 149,815 149,815 Units convertible into common shares......................................... 56,264 60,562 ------------ ------------ Total minority interests................................................ 206,079 210,377 7.33% Convertible Subordinated Debentures......................................... - 1,950 Shareholders' Equity Convertible preferred shares of beneficial interest; $2.25 Series A Cumulative Convertible, $0.01 par value per share, liquidation preference of $25 per 10,000 shares authorized, 4,165 issued and outstanding at December 31, 2000 share, ........ - 42 Common shares of beneficial interest; $0.01 par value per share; 100,000 shares authorized; 48,627 and 45,760 issued at December 31, 2001 and 2000, respectively..................................... 476 450 Additional paid-in capital..................................................... 1,297,239 1,312,323 Distributions in excess of net income.......................................... (194,718) (153,972) Unearned restricted share awards............................................... (8,621) (6,680) Less: treasury shares, at cost .............................................. (176,125) (177,980) ------------- ------------- Total shareholders' equity.................................................. 918,251 974,183 ------------- ------------- Total liabilities and shareholders' equity.............................. $ 2,449,665 $ 2,430,881 ============= =============
See Notes to Consolidated Financial Statements. CAMDEN PROPERTY TRUST CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts)
Year Ended December 31, ---------------------------------------- 2001 2000 1999 ---------- ---------- ---------- Revenues Rental income.......................................................$ 374,187 $ 364,111 $ 341,168 Other property income............................................... 29,433 27,030 22,148 ---------- ---------- ---------- Total property income............................................. 403,620 391,141 363,316 Equity in income of joint ventures.................................. 8,527 765 683 Fee and asset management............................................ 6,951 5,810 5,373 Other income........................................................ 9,117 5,823 1,924 ---------- ---------- ---------- Total revenues.................................................... 428,215 403,539 371,296 ---------- ---------- ---------- Expenses Property operating and maintenance.................................. 115,572 112,727 107,972 Real estate taxes................................................... 40,717 39,054 36,410 General and administrative.......................................... 13,743 14,349 10,606 Impairment provision for technology investments..................... 9,864 - - Other expenses...................................................... 1,511 - - Interest............................................................ 69,841 69,036 57,856 Depreciation and amortization....................................... 101,660 96,966 89,516 ---------- ---------- ---------- Total expenses.................................................... 352,908 332,132 302,360 ---------- ---------- ---------- Income before gain on sales of properties and joint venture interests, minority interests and extraordinary charge............................. 75,307 71,407 68,936 Gain on sales of properties and joint venture interests ................ 2,372 18,323 2,979 Income allocated to minority interests Distributions on units convertible into perpetual preferred shares. (12,872) (12,845) (8,278) Income allocated to units convertible into common shares........... (3,127) (2,461) (2,014) ---------- ---------- ---------- Income before extraordinary charge...................................... 61,680 74,424 61,623 Extraordinary charge (early retirement of debt)......................... (388) - - ---------- ---------- ---------- Net Income.............................................................. 61,292 74,424 61,623 Preferred share dividends............................................... (2,545) (9,371) (9,371) ---------- ---------- ---------- Net income to common shareholders.......................................$ 58,747 $ 65,053 $ 52,252 ========== ========== ========== Basic earnings per share before extraordinary charge....................$ 1.49 $ 1.71 $ 1.27 Basic earnings per share................................................ 1.48 1.71 1.27 Diluted earnings per share before extraordinary charge.................. 1.42 1.63 1.23 Diluted earnings per share.............................................. 1.41 1.63 1.23 Distributions declared per common share.................................$ 2.44 $ 2.25 $ 2.08 Weighted average number of common shares outstanding.................... 39,796 38,112 41,236 Weighted average number of common and common dilutive 41,603 41,388 44,291 equivalent shares outstanding......................................
See Notes to Consolidated Financial Statements. CAMDEN PROPERTY TRUST CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In thousands, except per share amounts)
Preferred Common Unearned Shares of Shares of Additional Distributions Restricted Treasury Beneficial Beneficial Paid-In in Excess of Share Shares, Interest Interest Capital Net Income Awards at cost ---------- ---------- ----------- ------------- ---------- ----------- Shareholders' Equity, January 1, 1999.....................$ 42 $ 447 $1,299,539 $ (98,897) $ (10,039) $ (20,704) Net income to common shareholders....................... 52,252 Common shares issued under dividend reinvestment plan... 28 Conversion of debentures (7 shares)..................... 169 Restricted shares issued under benefit plan (90 shares). 1 2,041 1,559 Employee Stock Purchase Plan............................ (522) Restricted shares placed into Rabbi Trust (35 shares)... 5 (5) Common share options exercised (80 shares).............. 1,806 Conversion of Operating Partnership units (23 shares)... 479 Repurchase of minority interest units................... 100 Repurchase of common shares (4,890 shares).............. (126,073) Cash distributions ($2.08 per share).................... (85,553) ---------- ---------- ----------- ------------- ---------- ----------- Shareholders' Equity, December 31, 1999................... 42 448 1,303,645 (132,198) (8,485) (146,777) ---------- ---------- ----------- ------------- ---------- ----------- Net income to common shareholders....................... 65,053 Common shares issued under dividend reinvestment plan... 23 Conversion of debentures (61 shares).................... 1 1,462 Restricted shares issued under benefit plan (329 shares) 3 6,195 1,805 Employee Stock Purchase Plan............................ (189) Restricted shares placed into Rabbi Trust (241 shares).. (2) 2 Common share options exercised (46 shares).............. 1,052 Conversion of Operating Partnership units (6 shares).... 133 Repurchase of common shares (1,166 shares).............. (31,203) Cash distributions ($2.25 per share).................... (86,827) ---------- ---------- ----------- ------------- ---------- ----------- Shareholders' Equity, December 31, 2000................... 42 450 1,312,323 (153,972) (6,680) (177,980) ---------- ---------- ----------- ------------- ---------- ----------- Net income to common shareholders....................... 58,747 Conversion of preferred shares (3,088 shares)........... (31) 24 7 Redemption of preferred shares (1,077 shares)........... (11) (26,911) Common shares issued under dividend reinvestment plan... 15 Conversion of debentures (81 shares).................... 1 2,006 Restricted shares issued under benefit plan (247 shares) 2 5,493 (1,941) Employee Stock Purchase Plan............................ (36) 666 Restricted shares placed into Rabbi Trust (269 shares).. (3) 3 Common share options exercised (110 shares)............. 1 3,160 1,189 Conversion of Operating Partnership units (51 shares)... 1 1,179 Cash distributions ($2.44 per share).................... (99,493) ---------- ---------- ----------- ------------- ---------- ----------- Shareholders' Equity, December 31, 2001...................$ - $ 476 $1,297,239 $ (194,718) $ (8,621) $(176,125) ========== ========== =========== ============= ========== ===========
See Notes to Consolidated Financial Statements. CAMDEN PROPERTY TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Year Ended December 31, ----------------------------------- 2001 2000 1999 ---------- ---------- ----------- Cash Flow from Operating Activities Net income ..........................................................................$ 61,292 $ 74,424 $ 61,623 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization ..................................................... 101,660 96,966 89,516 Equity in income of joint ventures, net of cash received........................... 7,411 1,959 2,491 Gain on sales of properties and joint venture interests............................ (2,372) (18,323) (2,979) Impairment provision for technology investments.................................... 9,864 Extraordinary charge (early retirement of debt).................................... 388 Income allocated to units convertible into common shares........................... 3,127 2,461 2,014 Accretion of discount on unsecured notes payable................................... 421 403 320 Net change in operating accounts................................................... 16,422 8,546 11,036 ---------- ---------- ----------- Net cash provided by operating activities..................................... 198,213 166,436 164,021 Cash Flow from Investing Activities Increase in real estate assets..................................................... (122,088) (120,636) (213,352) Net proceeds from sales of properties and townhomes................................ 10,377 150,141 13,226 Net proceeds from sale of joint venture interests.................................. 5,465 Increase in investment in joint ventures........................................... (1,881) (2,702) (2,012) Decrease in investment in joint ventures........................................... 1,505 Increase in investment in third party development properties....................... (26,349) (38,451) (23,530) Decrease in investment in third party development properties....................... 29,259 Increase in technology investments................................................. (7,249) (2,615) Other.............................................................................. (1,696) (1,488) (1,873) ---------- ---------- ----------- Net cash used in investing activities......................................... (119,627) (15,751) (220,571) Cash Flow from Financing Activities Net increase (decrease) in unsecured lines of credit and short-term borrowings..... (39,000) 80,000 (66,000) Proceeds from notes payable........................................................ 326,868 253,380 Repayment of notes payable ........................................................ (219,359) (107,376) (25,178) Proceeds from issuance of preferred units, net..................................... 17,136 132,679 Distributions to shareholders and minority interests .............................. (119,226) (112,850) (108,253) Repurchase of preferred shares..................................................... (26,922) Repurchase of common shares and units.............................................. (31,203) (128,929) Extraordinary charge (early retirement of debt).................................... (388) Other.............................................................................. 130 3,027 (1,279) ---------- ---------- ----------- Net cash (used in) provided by financing activities........................... (77,897) (151,266) 56,420 ---------- ---------- ----------- Net increase (decrease) in cash and cash equivalents.......................... 689 (581) (130) Cash and cash equivalents, beginning of period.......................................... 4,936 5,517 5,647 ---------- ---------- ----------- Cash and cash equivalents, end of period................................................$ 5,625 $ 4,936 $5,517 ========== =========== ==========
Supplemental Information Cash paid for interest, net of interest capitalized..................................$ 65,276 $ 70,310 $ 54,226 Interest capitalized................................................................. 10,920 15,303 16,396 Supplemental Schedule of Noncash Investing and Financing Activities Conversion of 7.33% subordinated debentures to common shares, net ...................$ 1,950 $ 1,456 $ 169 Value of shares issued under benefit plans, net...................................... 5,222 5,873 2,047 Conversion of operating partnership units to common shares........................... 1,179 144 479 Conversion of preferred shares to common shares...................................... 31 Fair value adjustment from the acquisition of Oasis Residential, Inc.: Fair value of assets acquired................................................. 835 Liabilities assumed........................................................... 835 Notes receivable issued upon sale of real estate assets.............................. 10,912
See Notes to Consolidated Financial Statements. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Business Camden Property Trust is a self-administered and self-managed real estate investment trust (REIT) organized on May 25, 1993. We, with our subsidiaries, report as a single business segment, with activities related to the ownership, development, construction and management of multifamily apartment communities. As of December 31, 2001, we owned interests in, operated or were developing 147 multifamily properties containing 52,147 apartment homes located in nine states. Two of our multifamily properties containing 802 apartment homes were under development at December 31, 2001. Additionally, we have several sites which we intend to develop into multifamily apartment communities. Property Update During 2001, we completed construction on the following two development properties totaling 1,000 apartment homes: Camden Farmers Market in Dallas and Camden Crown Valley in Southern California. Stabilization occurred during 2001 at three properties totaling 1,256 apartment homes: Camden Oxmoor in Louisville, Camden Lee Vista in Orlando and Camden Copper Square in Phoenix. We consider a property stabilized once it reaches 90% occupancy, or generally one year from opening the leasing office, with some allowances for larger than average properties. We expect stabilization to occur at the completed development properties during 2002. Additionally, we have two properties currently under development: Camden Harbour View, a 538-unit property located in Long Beach, California and Camden Vineyards, a 264-unit property located in Murrieta, California. During 2001, we acquired one multifamily property and three tracts of undeveloped land. The completed multifamily property, Camden Pecos Ranch, is a 272-unit property located in Phoenix, Arizona which was purchased for $20.6 million, and was developed under our third party development program. Camden Pecos Ranch was completed during the fourth quarter 2000 and stabilized operations during the first quarter 2001. We acquired 13.6 acres of land in Murrieta, California, 27.5 acres of land in Orlando, and 8.3 acres of land in Houston for a total cost of $22.2 million. These projects were in pre-development at time of acquisition. The 13.6 acres of land acquired in California is currently being developed as a 264- unit property, Camden Vineyards. Dispositions during 2001 included two parcels of land totaling 22.7 acres located in Houston and three operating properties with a total of 1,264 apartment homes located in North Carolina and Dallas. The net proceeds from the land sales totaled $8.6 million and were used to reduce indebtedness outstanding under our unsecured line of credit. The operating properties were held through a joint venture and the gains from these dispositions, totaling $6.6 million, are included in "Equity in income of joint ventures". 2. Summary of Significant Accounting Policies Principles of Consolidation. The consolidated financial statements include our assets, liabilities and operations and those of our wholly-owned subsidiaries and partnerships in which our aggregate ownership is greater than 50% and we exercise elements of control. Those entities owned 50% or less where significant influence is in effect are accounted for using the equity method. Those entities owned less than 50% where significant influence is not exercised are accounted for using the cost method. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, results of operations during the reporting periods and related disclosures. Actual results could differ from those estimates. Reportable Segments. We follow Financial Accounting Standards Board ("FASB") Statement No. 131, "Disclosures about Segments of an Enterprise and Related Information" ("SFAS No. 131"). SFAS No. 131 establishes standards for reporting financial and descriptive information about an enterprise's reportable segments. We have determined that we have one reportable segment, with activities related to the ownership, development, construction and management of multifamily communities. Our apartment communities generate rental revenue and other income through the leasing of apartment homes, which comprised 94%, 97% and 98% of our total consolidated revenues for the years ended December 31, 2001, 2000 and 1999, respectively. Although our multifamily communities are geographically diversified throughout the United Sates, management evaluates operating performance on an individual property level. Where appropriate, we provide information about our real estate portfolio on a geographic basis in order to illustrate the concentration of market risk associated with our portfolio. Operating Partnership and Minority Interests. Approximately 24% of our multifamily apartment units at December 31, 2001 were held in Camden Operating, L.P. This operating partnership has issued both common and preferred limited partnership units. As of December 31, 2001, we held 82.8% of the common limited partnership units and the sole 1% general partnership interest of the operating partnership. The remaining 16.2% of the common limited partnership units are primarily held by former officers, directors and investors of Paragon Group, Inc., which we acquired in 1997, who collectively owned 1,918,737 common limited partnership units at December 31, 2001. Each common limited partnership unit is redeemable for one common share of Camden or cash at our election. Holders of common limited partnership units are not entitled to rights as shareholders prior to redemption of their common limited partnership units. No member of our management owns common limited partnership units and only two of our eight Trust Managers own common limited partnership units. Our operating partnership has issued $100 million of 8.5% Series B Cumulative Redeemable Perpetual Preferred Units and $53 million of 8.25% Series C Cumulative Redeemable Perpetual Preferred Units. Distributions on the preferred units are payable quarterly in arrears. The preferred units are redeemable for cash by the operating partnership on or after the fifth anniversary of issuance at par plus the amount of any accumulated and unpaid distributions. The preferred units are convertible after 10 years by the holder into corresponding Series B or C Cumulative Redeemable Perpetual Preferred Shares. The preferred units are subordinate to present and future debt. In conjunction with our acquisition of Oasis Residential, Inc. in 1998, we acquired the controlling managing member interest in Oasis Martinique, LLC which owns one property in Orange County, California and is included in our consolidated financial statements. The remaining interests comprising 754,270 units are exchangeable into 572,490 of our common shares. Minority interests in the accompanying consolidated financial statements relate to holders of common and preferred limited partnership units of Camden Operating, L.P. and units in Oasis Martinique, LLC. Cash and Cash Equivalents. All cash and investments in money market accounts and other securities with a maturity of three months or less at the date of purchase are considered to be cash and cash equivalents. Restricted Cash. Restricted cash mainly consists of escrow deposits held by lenders for property taxes, insurance and replacement reserves. Substantially all restricted cash is invested in short-term securities. Real Estate Assets, at Cost. Real estate assets are carried at cost plus capitalized carrying charges. Expenditures directly related to the development, acquisition and improvement of real estate assets, excluding internal costs relating to acquisitions, are capitalized at cost as land, buildings and improvements. All construction and carrying costs are capitalized and reported on the balance sheet in "Properties under development, including land" until individual buildings are completed. Upon completion of each building, the total cost of that building and the associated land is transferred to "Buildings and improvements" and "Land", respectively, and the assets are depreciated over their estimated useful lives using the straight line method of depreciation. All operating expenses, excluding depreciation, associated with occupied apartment homes for properties in the development and leasing phase are expensed against revenues generated by those apartment homes as they become occupied. All apartment homes are considered operating upon achieving 90% occupancy, or generally one year from opening the leasing office, with some allowances for larger than average properties, and we begin expensing all items that were previously considered carrying costs. If an event or change in circumstance indicates a potential impairment in the value of a property has occurred, our policy is to assess any potential impairment by making a comparison of the current and projected operating cash flows for such property over its remaining useful life, on an undiscounted basis, to the carrying amount of the property. If such carrying amounts are in excess of the estimated projected operating cash flows of the property, we would recognize an impairment loss equivalent to an amount required to adjust the carrying amount to its estimated fair market value. Real estate to be disposed of is reported at the lower of its carrying amount or its estimated fair value, less its cost to sell. Depreciation expense is not recorded during the period in which such assets are held for sale. We capitalized $26.7 million and $27.9 million in 2001 and 2000, respectively, of renovation and improvement costs which we believe extended the economic lives and enhanced the earnings of our multifamily properties. Carrying charges, principally interest and real estate taxes, of land under development and buildings under construction are capitalized as part of properties under development and buildings and improvements to the extent that such charges do not cause the carrying value of the asset to exceed its net realizable value. Capitalized interest was $10.9 million in 2001, $15.3 million in 2000 and $16.4 million in 1999. Capitalized real estate taxes were $2.3 million in 2001, $2.9 million in 2000 and $3.2 million in 1999. All initial buildings and improvements costs are depreciated over their remaining estimated useful lives of 5 to 35 years using the straight line method. Capital improvements, including carpet, appliances and HVAC unit replacements, subsequent to initial construction are depreciated over their expected useful lives of 3 to 15 years using the straight line method. Property operating and maintenance expenses included normal repairs and maintenance expenses which totaled $27.2 million in 2001, $27.6 million in 2000 and $24.5 million in 1999. Other Assets, Net. Other assets in our consolidated financial statements include deferred financing costs, non-real estate leasehold improvements and equipment, prepaid expenses and other miscellaneous receivables. Deferred financing costs are amortized over the terms of the related debt on the straight line method. Leasehold improvements and equipment are depreciated on the straight line method over the shorter of the expected useful lives or the lease terms which range from 3 to 10 years. Accumulated depreciation and amortization for such assets was $12.4 million in 2001 and $9.0 million in 2000. Interest Rate Swap Agreements. The differential to be paid or received on interest rate swap agreements is accrued as interest rates change and is recognized over the life of the agreements as an increase or decrease in interest expense. We do not use these instruments for trading or speculative purposes. Income Recognition. In December 1999, the SEC issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements." SAB No. 101 provides guidance on revenue recognition as well as the presentation and disclosure of revenue in financial statements for all public companies. Our rental and other property income is recorded when due from residents and is recognized monthly as it is earned. Our apartment homes are rented to residents on lease terms generally ranging from six to thirteen months, with monthly payments due in advance. Interest, fee and asset management and all other sources of income are recognized as earned. We had been following the criteria set forth in SAB No. 101 to determine when revenue can be recognized, and therefore our adoption of SAB No. 101 during 2000 did not have a material impact on our financial statements. Rental Operations. We own and operate multifamily apartment homes that are rented to residents. Two of our properties are subject to rent control or rent stabilization. Operations of apartment properties acquired are recorded from the date of acquisition in accordance with the purchase method of accounting. In management's opinion, due to the number of residents, the type and diversity of submarkets in which the properties operate, and the collection terms, there is no concentration of credit risk. Reclassifications. Certain reclassifications have been made to amounts in prior year financial statements to conform with current year presentations. New Accounting Pronouncements. In June 1998, FASB issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities", which is effective for all fiscal years beginning after June 15, 2000. SFAS No. 133, as amended, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. Under SFAS No. 133, certain contracts that were not formerly considered derivatives may now meet the definition of a derivative. We have adopted SFAS No. 133 effective January 1, 2001. The adoption of SFAS No. 133 did not have a material impact on our financial position, results of operations, or cash flows. In June 2001, FASB issued SFAS No. 141, "Business Combinations", which is effective for business combinations initiated after June 30, 2001. SFAS No. 141 requires all business combinations to be accounted for under the purchase method and that the pooling-of-interest method is no longer allowed. The adoption of SFAS No. 141 will not have a material effect on our financial position, results of operations, or cash flows. In June 2001, FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets", which is effective for fiscal years beginning after December 15, 2001. SFAS No. 142 requires that goodwill no longer be amortized to earnings, but instead be reviewed for impairment. The adoption of SFAS No. 142 will not have a material impact on our financial position, results of operations, or cash flows. In June 2001, FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations", which is effective for fiscal years beginning after June 15, 2002. SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The adoption of SFAS No. 143 will not have a material impact on our financial position, results of operations or cash flows. In August 2001, FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long- Lived Assets", which is effective for fiscal years beginning after December 15, 2001. SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The adoption of SFAS No. 144 will not have a material impact on our financial position, results of operations or cash flows. 3. Income Taxes We have maintained and intend to maintain our election as a REIT under the Internal Revenue Code of 1986, as amended. As a result, we generally will not be subject to federal taxation to the extent we distribute 90% (95% in 2000 and 1999) of our REIT taxable income to our shareholders and satisfy certain other requirements. Accordingly, no provision for federal income taxes from REIT operations has been included in the accompanying consolidated financial statements. If we fail to qualify as a REIT in any taxable year, then we will be subject to federal income taxes at regular corporate rates, including any applicable alternative minimum tax. Taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to applicable federal, state and local income taxes. The following table reconciles net income to common shareholders to REIT taxable income for the years ended December 31, 2001, 2000 and 1999 (in 000's):
Year Ended December 31, --------------------------------------- 2001 2000 1999 ----------- ---------- ---------- Net income to common shareholders........................................ $ 58,747 $ 65,053 $ 52,252 Add: Net loss of taxable REIT subsidiaries included above.............. (3,525) ----------- ---------- ---------- Net income from REIT operations.......................................... 62,272 65,053 52,252 Add: Book depreciation and amortization................................ 101,639 96,966 89,516 Less: Tax depreciation and amortization................................ (81,167) (77,284) (71,379) Book/tax difference on gains/losses from capital transactions.......... 5,374 7,254 (2,979) Other book/tax difference, net......................................... (2,099) 3,030 6,969 ----------- ---------- ---------- REIT taxable income...................................................... 85,499 95,019 74,379 Less: Dividends paid deduction......................................... (102,757) (96,198) (94,925) ----------- ---------- ---------- Dividends paid in excess of taxable income .............................. $ (17,258) $ (1,179) $ (20,546) =========== ========== ==========
A schedule of per share distributions we paid and reported to our shareholders is set forth in the following tables:
Year Ended December 31, ----------------------------------- Common Share Distributions 2001 2000 1999 - -------------------------- -------- --------- -------- Ordinary income........................................................ $ 2.31 $ 1.71 $ 2.08 20% Long-term capital gain............................................. 0.11 0.11 25% Sec. 1250 capital gain............................................. 0.02 0.43 -------- --------- -------- Total............................................................... $ 2.44 $ 2.25 $ 2.08 ======== ========= ======== Percentage of distributions representing tax preference items.............. 10.773% 12.090% 12.187% Year Ended December 31 ----------------------------------- Preferred Share Dividends 2001 2000 1999 - ------------------------- --------- -------- -------- Ordinary income............................................................ $ 1.24 $ 1.71 $ 2.25 20% Long-term capital gain................................................. 0.06 0.11 25% Sec. 1250 capital gain................................................. 0.01 0.43 --------- -------- -------- Total................................................................... $ 1.31 $ 2.25 $ 2.25 ========= ======== ========
4. Earnings Per Share Basic earnings per share is computed using net income to common shareholders and the weighted average number of common shares outstanding. Diluted earnings per share reflects common shares issuable from the assumed conversion of common share options and awards granted, preferred shares, units convertible into common shares and convertible subordinated debentures. Only those items that have a dilutive impact on our basic earnings per share are included in diluted earnings per share. For the year ended December 31, 2001, 1.9 million units convertible into common shares were not included in the diluted earnings per share calculated as they were not dilutive. The following table presents information necessary to calculate basic and diluted earnings per share for the periods indicated: (In thousands, except per share amounts).
Year Ended December 31, ---------------------------------------- 2001 2000 1999 --------- --------- --------- BASIC EARNINGS PER SHARE Weighted average common shares outstanding....................... 39,796 38,112 41,236 ========= ========= ========= Basic earnings per share..................................... $ 1.48 $ 1.71 $ 1.27 ========= ========= ========= DILUTED EARNINGS PER SHARE Weighted average common shares outstanding....................... 39,796 38,112 41,236 Shares issuable from assumed conversion of: Common share options and awards granted...................... 1,234 729 431 Units convertible into common shares......................... 573 2,547 2,624 --------- --------- --------- Weighted average common shares outstanding, as adjusted ......... 41,603 41,388 44,291 ========= ========= ========= Diluted earnings per share................................... $ 1.41 $ 1.63 $ 1.23 ========= ========= ========= EARNINGS FOR BASIC AND DILUTED COMPUTATION Net income........................................................ $ 61,292 $ 74,424 $ 61,623 Less: preferred share dividends................................... 2,545 9,371 9,371 --------- --------- --------- Net income to common shareholders (basic earnings per share computation)............................................... 58,747 65,053 52,252 Income allocated to units convertible into common shares.......... 2,461 2,014 --------- --------- --------- Net income to common shareholders, as adjusted (diluted earnings per share computation).............................. $ 58,747 $ 67,514 $ 54,266 ========= ========= =========
5. Investment in Joint Ventures In June 1998, we completed a transaction in which Camden USA, Inc., one of our wholly owned subsidiaries, and TMT-Nevada, LLC, a wholly owned subsidiary of a private pension fund, formed Sierra- Nevada Multifamily Investments, LLC ("Sierra-Nevada"). We entered into this transaction to reduce our market risk in the Las Vegas area. In this transaction, we transferred to Sierra-Nevada 19 apartment communities containing 5,119 apartment homes for an aggregate of $248 million. At December 31, 2001, Sierra-Nevada owned 19 apartment communities with 4,919 apartment homes. TMT-Nevada holds an 80% interest in Sierra-Nevada and Camden USA holds the remaining 20% interest. This transaction was funded with capital invested by the members of Sierra-Nevada, the assumption of $9.9 million of existing nonrecourse indebtedness, the issuance of 17 nonrecourse cross collateralized and cross defaulted loans totaling $180 million and the issuance of two nonrecourse second lien mortgages totaling $7 million. In April 1998, we acquired, through one of our wholly owned subsidiaries, a 50% interest in Denver West Apartments, LLC, which owns Camden Denver West, a 321 apartment home community located in Denver, Colorado. The remaining 50% interest is owned by a private investor. In April 1997, we acquired, through our operating partnership, a 44% interest in Paradim, Inc. The remaining interest was held by unaffiliated private investors. During 2001, our investment in Paradim, Inc. was liquidated after all the assets, consisting of three apartment communities with 1,264 apartment homes were sold. Our portion of the gains recognized from these sales totaled $6.6 million and is included in "Equity in income of joint ventures." The joint ventures discussed above are all accounted for under the equity method. The joint ventures in which we have an interest have been funded with secured, non-recourse debt. We are not committed to any additional funding in relation to our joint ventures. See discussion of principles of consolidation in Note 2 "Summary of Significant Accounting Policies." 6. Investments in Third Party Development Properties Our construction division performs services for our internally developed construction pipeline, as well as provides services for other third party owners of multifamily, commercial and retail properties. In addition to providing construction services to third party multifamily owners, for selected properties in markets we are comfortable making investments in, we may provide financing for a portion of the project costs. In connection with this program, we have entered into agreements with unaffiliated third parties to develop, construct, and manage five multifamily projects containing a total of 1,667 apartment homes. We are providing financing for a portion of each project in the form of notes receivable which mature through 2005. These notes accrue interest at 10% annually and is being recognized as earned. These notes are secured by second liens on the assets and partial guarantees by the third party owners. We expect these notes to be repaid from operating cash flow or proceeds from the sale of the individual properties. At December 31, 2001 and 2000, these notes had principal balances totaling $70.0 million and $72.9 million, respectively. We anticipate funding an additional $10.0 million on these third party development properties during 2002. These projects are supported with adequate third party equity to allow us to earn fees for managing the development, construction and eventual operations of these properties. The related fees we earned for all projects totaled $2.2 million, $2.2 million and $1.7 million for the years ended December 31, 2001, 2000 and 1999, respectively. Two of the projects were completed and stabilized operations during 2001. The remaining three projects are all currently under construction, with one project in the lease-up phase. We expect that the remaining two projects will begin leasing during 2002. The following is a detail of our third party construction subject to notes receivable as of December 31, 2001:
Number of Budgeted/ Estimated/ Estimated/ Apartment Actual Cost Actual Date Actual Date of Property and Location Homes ($ millions) of Completion Stabilization - ----------------------------------------- ----------- ------------ --------------- ---------------- Stabilized Marina Pointe II Tampa, FL ........................ 352 $ 29 1Q01 3Q01 Creekside Denver, CO ....................... 279 33 3Q01 3Q01 In lease-up Ybor City Tampa, FL ........................ 454 40 1Q02 4Q02 Under Construction Little Italy San Diego, CA .................... 160 36 4Q02 3Q03 Otay Ranch San Diego, CA .................... 422 57 1Q03 4Q03 ----------- ----------- Total Third Party Development ........... 1,667 $ 195 ============ ===========
During 2001, we purchased one completed and stabilized third party development project and three projects which were in pre-development as they fit our diversification strategy. All net fees and interest previously recognized on the pre-development projects were reversed at time of purchase. 7. Notes Payable The following is a summary of our indebtedness: (In millions)
December 31, ------------------------- 2001 2000 ----------- ----------- Unsecured Line of Credit and Short Term Borrowings...................................... $ 157.0 $ 196.0 Senior Unsecured Notes 6.63% - 6.75% Notes, due 2001....................................................... 150.0 7.03% Notes, due 2003............................................................... 50.0 50.0 7.14% Notes, due 2004............................................................... 199.4 199.2 7.11% - 7.28% Notes, due 2006....................................................... 174.2 124.3 6.77% Notes, due 2010............................................................... 99.9 7.69% Notes, due 2011............................................................... 149.4 ----------- ----------- 672.9 523.5 Medium Term Notes 6.68% - 6.74% Notes, due 2002....................................................... 34.5 34.5 6.88% - 7.17% Notes, due 2004....................................................... 30.0 30.0 7.63% Notes, due 2009............................................................... 15.0 15.0 6.79% Notes, due 2010............................................................... 14.5 --------- --------- 94.0 79.5 --------- --------- Total Unsecured Notes................................................................... 923.9 799.0 Secured Notes 7.00% - 8.50% Conventional Mortgage Notes, due 2003 - 2009.......................... 182.5 237.6 3.29% - 7.29% Tax-exempt Mortgage Notes, due 2023-2031.............................. 100.6 101.5 --------- --------- 283.1 339.1 --------- --------- Total notes payable............................................................ $ 1,207.0 $ 1,138.1 ========= ========= Floating rate debt included in unsecured line of credit (2.71% -2.75%).................. $ 157.0 $ 196.0 Floating rate tax-exempt debt included in secured notes (3.29% - 3.35%) ................ $ 62.0 $ 62.6 Net book value of real estate assets subject to secured notes .......................... $ 440.3 $ 577.6
In August 2001, we amended our line of credit to increase total capacity by $20 million to $420 million and extended the maturity through August 2004. The scheduled interest rates are currently based on spreads over LIBOR or Prime. The scheduled interest rates are subject to change as our credit ratings change. Advances under the line of credit may be priced at the scheduled rates, or we may enter into bid rate loans with participating banks at rates below the scheduled rates. These bid rate loans have terms of six months or less and may not exceed the lesser of $200 million or the remaining amount available under the line of credit. The line of credit is subject to customary financial covenants and limitations. At year end, we were in compliance with all covenants and limitations. As of December 31, 2001, we had $263 million available under our unsecured line of credit. The weighted average balance outstanding on the unsecured lines of credit during the year ended December 31, 2001 was $152.8 million, with a maximum outstanding balance of $227.0 million. At December 31, 2001, the weighted average interest rate on floating rate debt was 2.89%. Scheduled principal repayments on all notes payable outstanding at December 31, 2001 over the next five years are $39.3 million in 2002, $87.3 million in 2003, $391.8 million in 2004, $61.4 million in 2005, $210.7 million in 2006 and $416.5 million thereafter. Principal repayments during 2002 will be made using funds available under our unsecured line of credit. During January 2000, we combined our three outstanding shelf registrations into a single $750 million universal shelf registration, of which $435.5 million was available at December 31, 2001. The following table summarizes notes payable issued during 2001:
Month of Coupon Maturity Interest Type and Amount Issuance Terms Rate Date Paid Proceeds - ------------------------------------- ----------- -------------- ----------- ------------ -------------- -------------- $150.0 million senior unsecured notes 02/01 Interest only 7.625% 02/15/11 February 15 $148.3 million and August 15 $50.0 million senior unsecured notes 02/01 Interest only 7.000% 02/15/06 February 15 $49.5 million and August 15 $14.5 million medium-term notes 08/01 Interest only 6.790% 08/27/10 March 15 and $14.4 million September 15 $100.0 million senior unsecured notes 09/01 Interest only 6.750% 09/15/10 March 15 and $99.2 million September 15
We may redeem the notes at any time at a redemption price equal to the principal amount and accrued interest, plus a make-whole provision. The notes are direct, senior unsecured obligations and rank equally with all other unsecured and unsubordinated indebtedness. We used the net proceeds to reduce indebtedness outstanding under our unsecured line of credit. During 2001, we paid off five secured notes totaling $50.7 million and $150 million in unsecured notes matured. The interest rates on the secured notes ranged from 7.5% to 8.63%, and rates on the unsecured notes were from 6.63% to 6.75%. We incurred prepayment penalties totaling $388,000 in connection with repayment of four of the secured notes. We repaid both the secured and unsecured notes using proceeds available under our unsecured line of credit. The secured notes were prepaid due to our ability to refinance them at significantly lower interest rates. 8. Convertible Subordinated Debentures In April 1994, we issued $86.3 million aggregate principal amount of 7.33% Convertible Subordinated Debentures which matured on April 2001. The debentures were convertible at any time prior to maturity into our common shares. Prior to maturity, $86.2 million in principal amount of the debentures were converted into 3.6 million common shares. In addition, $3.2 million of unamortized debenture issue costs were reclassified into additional paid-in-capital. 9. Incentive and Benefit Plans We have elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issuedto Employees ("APB No. 25") and related interpretations in accounting for our share-based compensation. Under APB No. 25, since the exercise price of share options equals the market price of our shares at the date of grant, no compensation expense is recorded. Restricted shares are recorded to compensation expense over the vesting periods based on the market value on the date of grant, and no compensation expense is recorded for our Employee Stock Purchase Plan ("ESPP"), since the ESPP is considered non- compensatory. We have adopted the disclosure-only provisions of SFAS No. 123, Accounting for Stock- Based Compensation. Incentive Plan. We have a non-compensatory option plan which was amended in 2000 by our shareholders and trust managers. This amendment resulted in an increase in the maximum number of common shares available for issuance under the plan to 10% of the common shares outstanding at any time plus the number of common shares, if any, held as treasury shares, plus the number of common shares reserved for issuance upon the conversion of securities convertible into or exchangeable for common shares. Compensation awards that can be granted under the plan include various forms of incentive awards including incentive share options, non-qualified share options and restricted shares. The class of eligible persons that can receive grants of incentive awards under the plan consists of non-employee trust managers, key employees, consultants, and directors of subsidiaries as determined by the compensation committee of our Board of Trust Managers. No incentive awards may be granted under this plan after May 27, 2003. Following is a summary of the activity of the plan for the three years ended December 31, 2001:
Shares Available for Issuance Options and Restricted Shares ------------- ------------------------------------------------------------------- Weighted Weighted Weighted Average Average Average 2001 2001 2001 Price 2000 2000 Price 1999 1999 Price ------------- --------- ---------- --------- ----------- ---------- ---------- Balance at January 1.................... 1,474,723 3,351,704 $ 28.30 3,311,705 $ 27.50 2,838,499 $ 28.03 Current Year Share Adjustment (a)....... (47,226) Options Granted............................. 5,250 25.88 603,072 24.88 Exercised........................... (204,846) 29.65 (147,589) 29.22 (79,650) 22.67 Forfeited .......................... 14,487 (14,487) 26.11 (36,083) 27.09 (139,768) 27.38 ------------ ---------- --------- ---------- Net Options..................... 14,487 (219,333) (178,422) 383,654 ------------ ---------- --------- ---------- Restricted Shares Granted............................. (179,560) 179,560 32.06 260,114 26.91 142,826 25.31 Forfeited........................... (19,115) 28.48 (41,693) 27.24 (53,274) 27.01 ------------ ---------- --------- ---------- Net Restricted Shares........... (179,590) 160,445 218,421 89,552 ------------ ---------- --------- ---------- Balance at December 31.................. 1,262,424 3,292,816 $ 29.21 3,351,704 $ 28.30 3,311,705 $ 27.50 ============ ========== ========= ========= ========== ========== ========= Exercisable options at December 31...... 1,991,231 $ 30.50 889,654 $ 28.78 1,056,076 $ 27.86 Vested restricted shares at December 31. 756,661 $ 26.79 655,504 $ 25.56 343,702 $ 25.93
(a) Current year share adjustment reflects repurchase of preferred shares, net of new shares issued. Options are exercisable, subject to the terms and conditions of the plan, in increments of 33.33% per year on each of the first three anniversaries of the date of grant. The plan provides that the exercise price of an option will be determined by the compensation committee of the Board on the day of grant and to date all options have been granted at an exercise price which equals the fair market value on the date of grant. Options exercised during 2001 were exercised at prices ranging from $22 to $33.25 per share. At December 31, 2001, options outstanding were at exercise prices ranging from $22 to $33.25 per share. Such options have a weighted average remaining contractual life of six years. In 1998, in connection with the merger with Oasis, we assumed the Oasis stock incentive plans. We converted all unexercised Oasis stock options issued under the former Oasis stock incentive plans into options to purchase Camden common shares. The options are exercisable at prices ranging from $28.66 to $33.76. All of the Oasis options became fully vested upon conversion, and have a weighted average remaining contractual life of four years. As of December 31, 2001, there were 543,451 Oasis options outstanding, which are exercisable at prices ranging from $28.66 to $33.76 per share. The fair value of each option grant was estimated on the date of grant utilizing the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2000 and 1999, respectively: risk-free interest rates of 6.6% and 4.9%, expected life of ten years, dividend yield of 6.7% and 7.6%, and expected share volatility of 13.4% and 13.7%. The weighted average fair value of options granted in 2000 and 1999, respectively, was $2.54 and $0.91 per share. There were no options granted in 2001. Restricted shares have vesting periods of up to ten years. The compensation cost for restricted shares has been recognized at the fair market value of our shares. During 2000, we accelerated vesting of 180,634 restricted shares, which had a weighted average price of $27.74, in connection with the successful implementation of our land development strategy. Employee Stock Purchase Plan. In July 1997, we established and commenced an ESPP for all active employees, officers, and trust managers who have completed one year of continuous service. Participants may elect to purchase Camden common shares through payroll or director fee deductions and/or through quarterly contributions. At the end of each six-month offering period, each participant's account balance is applied to acquire common shares on the open market at 85% of the market value, as defined, on the first or last day of the offering period, whichever price is lower. Effective for the 2000 plan year, each participant must hold the shares purchased for nine months in order to receive the discount. A participant may not purchase more than $25,000 in value of shares during any plan year, as defined. No compensation expense was recognized for the difference in price paid by employees and the fair market value of our shares at the date of purchase. There were 28,747, 35,900 and 98,456 shares purchased under the ESPP during 2001, 2000 and 1999, respectively. The weighted average fair value of ESPP shares purchased in 2001, 2000, and 1999 was $35.80, $28.67 and $27.42 per share, respectively. On January 10, 2002, 7,670 shares were purchased under the ESPP related to the 2001 plan year. If we applied the recognition provisions of SFAS No. 123 to our option grants and ESPP, our net income to common shareholders and related basic and diluted earnings per share would be as follows (in thousands, except per share amounts): Year Ended December 31, ---------------------------------- 2001 2000 1999 ---------- ---------- ---------- Net income to common shareholders.............$ 58,310 $ 64,317 $ 51,076 Basic earnings per share......................$ 1.47 $ 1.69 $ 1.24 Diluted earnings per share....................$ 1.40 $ 1.62 $ 1.20 The effects of applying SFAS No. 123 in this pro forma disclosure are not indicative of future amounts. Rabbi Trust. In February 1997, we established a rabbi trust in which salary and bonus amounts awarded to certain officers under the share incentive plan and restricted shares awarded to certain officers and trust managers may be deposited. We account for the rabbi trust similar to a compensatory stock option plan. At December 31, 2001, approximately 1,041,824 restricted shares were held in the rabbi trust. At December 31, 2001 and 2000, $3.9 million and $2.7 million, respectively, was due to us under this plan, and is included in "Accounts receivable-affiliates" in our consolidated financial statements. 401(k) Savings Plan. We have a 401(k) savings plan which is a voluntary defined contribution plan. Under the savings plan, every employee is eligible to participate beginning on the earlier of January 1 or July 1 following the date the employee has completed six months of continuous service with us. Each participant may make contributions to the savings plan by means of a pre-tax salary deferral which may not be less than 1% nor more than 15% of the participant's compensation. The federal tax code limits the annual amount of salary deferrals that may be made by any participant. We may make matching contributions on the participant's behalf. A participant's salary deferral contribution will always be 100% vested and nonforfeitable. A participant will become vested in our matching contributions 33.33% after one year of service, 66.67% after two years of service and 100% after three years of service. Expenses under the savings plan were not material. 10. Securities Repurchase Program In 1998, we began repurchasing our securities under a program approved by our Board of Trust Managers. The plan allows us to repurchase or redeem up to $200 million of our securities through open market purchases and private transactions. Management consummates these repurchases and redemptions at the time when they believe that we can reinvest available cash flow into our own securities at yields which exceed those currently available on direct real estate investments. These repurchases were made and we expect that future repurchases, if any, will be made without incurring additional debt and, in management's opinion, without reducing our financial flexibility. At December 31, 2001, we had repurchased approximately 6.9 million common shares and redeemed approximately 106,000 units convertible into common shares at a total cost of $180.9 million. No common shares or units convertible into common shares were repurchased during 2001. 11. Convertible Preferred Shares The 4,165,000 Series A preferred shares paid a cumulative dividend quarterly in arrears in an amount equal to $2.25 per share per annum. The preferred shares generally had no voting rights and had a liquidation preference of $25 per share plus accrued and unpaid distributions. The preferred shares were convertible at the option of the holder at any time into common shares at a conversion price of $32.4638 per common share (equivalent to a conversion rate of 0.7701 per common share for each preferred share), subject to adjustment in certain circumstances. The preferred shares were not redeemable prior to April 30, 2001. In April 2001, we announced that our issued and outstanding Series A preferred shares would be redeemed effective April 30, 2001 at a redemption price of $25.00 per share plus an amount equal to all accumulated, accrued and unpaid dividends as of April 30, 2001. Prior to redemption, 3.1 million preferred shares were converted into 2.4 million common shares. The remaining preferred shares were redeemed for an aggregate of $27.1 million, including unpaid dividends, using funds available under our unsecured line of credit. 12. Technology Investments During 2000, our Board of Trust Managers authorized us to invest in non-real estate initiatives, including investments in e-commerce initiatives with other multi-family real estate owners. These investments were made in companies that provide our residents with a broad range of real estate technology services including high-speed data services, online owner-renter matching services, and resident portals. These portals provide our residents with a variety of online services, including online maintenance requests, which we believe will improve their overall living experience. Additionally, we have invested in companies that we believe will improve the efficiency of our internal operations through revenue management, credit scoring and purchasing. During 2001, management determined that the current capital markets for technology companies and the expected future cash flows from these investments made it difficult to support the carrying values of our technology investments. Therefore, during the year we recorded an impairment provision totaling $9.9 million, which represented our remaining carrying value at time of write-off of all technology initiatives. The write-off included $3.8 million in notes receivable. Our investments in technology investments had been recorded in "Other assets, net" during 2001. We will continue to use the technology provided by these companies to deliver services to our residents, which we believe achieve our goal of providing a quality living experience. Additionally, a number of these initiatives have been, or are in the process of being, implemented which management believes should result in improved operational efficiency. 13. Townhome Sales During 2001, we completed construction of 17 for-sale townhomes in the downtown Dallas area at a total cost of approximately $5.5 million. During 2001, we sold five units at a total sales price of approximately $1.6 million. The proceeds received from these townhome sales are included in other income in our consolidated financial statements. Other expenses in our consolidated financial statements represents the construction costs associated with the townhomes sold during the quarter. 14. Related Party Transactions Two of our executive officers have loans totaling $1.8 million with one of our taxable-REIT subsidiaries. The executives utilized amounts received from these loans to purchase our common shares in 1994. The loans mature in February 2004 and bear interest at the fixed rate of 5.23%. These loans are full recourse obligations of the officers and do not require any prepayments of principal until maturity. We perform property management services for properties owned by joint ventures in which we own an interest. Management fees earned on these properties amounted to $900,000, $944,000, and $845,000 for the years ended December 31, 2001, 2000, and 1999, respectively. In connection with the Oasis merger, we entered into consulting agreements with two former Oasis executives, one of whom currently serves as a trust manager, to locate potential investment opportunities in California. We paid consulting fees totaling $389,000 to these executives in 1999. No fees were paid during 2001 or 2000. In 1999 and 2000, our Board of Trust Managers approved a plan which permitted six of our senior executive officers to complete the purchase of $23.0 million of our common shares in open market transactions. The purchases were funded with unsecured full recourse personal loans made to each of the executives by a third party lender. The loans mature in five years, bear interest at market rates and require interest to be paid quarterly. In order to facilitate the employee share purchase transactions, we entered into a guaranty agreement with the lender for payment of all indebtedness, fees and liabilities of the officers to the lender. Simultaneously, we entered into a reimbursement agreement with each of the executive officers whereby each executive officer has indemnified us and absolutely and unconditionally agreed to reimburse us should any amounts ever be paid by us pursuant to the terms of the guaranty agreement. The reimbursement agreements require the executives to pay interest from the date any amounts are paid by us until repayment by the officer. We have not had to perform under the guaranty agreement. Beginning in 2000, we invested approximately $1.4 million into BroadBand Residential Inc., a multi-unit owner-sponsored broadband company providing high-speed data services to multi-family residents, and invested approximately $2.1 million in Viva Group, Inc., an internet based company that provides online owner-renter matching services for the multi-family housing industry. One of our trust managers is a director, executive officer and significant shareholder of Viva. In connection with our investment in BroadBand Residential, we had the right to designate one member of its board of directors. We appointed one of our executive officers to fill that position and represent our interest. As described in Note 12, during 2001, we recorded an impairment charge for all technology investments, including our investment in Viva and BroadBand Residential. Additionally, during 2001 BroadBand Residential discontinued operations. 15. Fair Value of Financial Instruments SFAS No. 107 requires disclosure about fair value for all financial instruments, whether or not recognized, for financial statement purposes. Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2001 and 2000. Considerable judgment is necessary to interpret market data and develop estimated fair values. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could obtain on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. As of December 31, 2001 and 2000, management estimates that the fair value of (i) cash and cash equivalents, accounts receivable, notes receivable, accounts payable, accrued expenses and other liabilities and distributions payable are carried at amounts which reasonably approximate their fair value; and (ii) based upon our borrowing rate for issuances of debt with similar terms and remaining maturities, the carrying amount of our fixed rate debt approximates fair value. 16. Net Change in Operating Accounts The effect of changes in the operating accounts on cash flows from operating activities is as follows: (In thousands) Year Ended December 31, ------------------------------ 2001 2000 1999 --------- --------- -------- Decrease (increase) in assets: Accounts receivable - affiliates.............$ (839) $ (65) $ (1,085) Other assets, net ........................... (5,503) (950) 38 Restricted cash.............................. 1,318 237 (426) Increase (decrease) in liabilities: Accounts payable ............................ (255) (6,999) (3,768) Accrued real estate taxes ................... 2,012 3,526 3,011 Accrued expenses and other liabilities ...... 19,689 12,797 13,266 --------- -------- --------- Change in operating accounts ........$ 16,422 $ 8,546 $ 11,036 ========= ======== ========= 17. Commitments and Contingencies Construction Contracts. As of December 31, 2001, we were obligated for approximately $85.8 million of additional expenditures (a substantial amount of which we expect to be funded with debt). Lease Commitments. At December 31, 2001, we had long-term operating leases covering certain land, office facilities and equipment. Rental expense totaled $1.9 million in 2001, $1.6 million in 2000 and $1.7 million in 1999. Minimum annual rental commitments for the years ending December 31, 2002 through 2006 are $1.8 million, $1.7 million, $1.4 million, $1.4 million and $1.1 million, respectively, and $6.9 million in the aggregate thereafter. Technology Investments. We have commitments to invest an additional $2.6 million with a consortium of real estate and technology companies which intended to pursue a broad range of real estate technology initiatives. Based on our discussion with consortium members, it is not likely that any additional investments will be made. Employment Agreements. We have employment agreements with six of our senior officers, the terms of which expire at various times through August 20, 2003. Such agreements provide for minimum salary levels as well as various incentive compensation arrangements, which are payable based on the attainment of specific goals. The agreements also provide for severance payments in the event certain situations occur such as termination without cause or a change of control. The severance payments vary based on the officer's position and amount to one times the current salary base for four of the officers and 2.99 times the average annual compensation over the previous three fiscal years for the two remaining officers. Six months prior to expiration, unless notification of termination is given by the senior officers, these agreements extend for one year from the date of expiration. Contingencies. Prior to our merger with Oasis, Oasis had been contacted by certain regulatory agencies with regards to alleged failures to comply with the Fair Housing Amendments Act (the "Fair Housing Act") as it pertained to nine properties (seven of which we currently own) constructed for first occupancy after March 31, 1991. On February 1, 1999, the Justice Department filed a lawsuit against us and several other defendants in the United States District Court for the District of Nevada alleging (1) that the design and construction of these properties violates the Fair Housing Act and (2) that we, through the merger with Oasis, had discriminated in the rental of dwellings to persons because of handicap. The complaint requests an order that (i) declares that the defendant's policies and practices violate the Fair Housing Act; (ii) enjoins us from (a) failing or refusing, to the extent possible, to bring the dwelling units and public use and common use areas at these properties and other covered units that Oasis has designed and/or constructed into compliance with the Fair Housing Act, (b) failing or refusing to take such affirmative steps as may be necessary to restore, as nearly as possible, the alleged victims of the defendants alleged unlawful practices to positions they would have been in but for the discriminatory conduct and (c) designing or constructing any covered multi-family dwellings in the future that do not contain the accessibility and adaptability features set forth in the Fair Housing Act; and requires us to pay damages, including punitive damages, and a civil penalty. With any acquisition, we plan for and undertake renovations needed to correct deferred maintenance, life/safety and Fair Housing matters. On January 30, 2001, a consent decree was ordered and executed in the above Justice Department action. Under the terms of the decree, we were ordered to make certain retrofits and implement certain educational programs and fair housing advertising. These changes are to take place over the next five years. In management's opinion, the costs associated with complying with the decree are not expected to have a material impact on our financial statements. We are subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance. While the resolution of these matters cannot be predicted with certainty, management believes that the final outcome of such matters will not have a material adverse effect on our consolidated financial statements. In the ordinary course of our business, we issue letters of intent indicating a willingness to negotiate for the purchase or sale of multifamily properties or development land. In accordance with local real estate market practice, such letters of intent are non-binding, and neither party to the letter of intent is obligated to pursue negotiations unless and until a definitive contract is entered into by the parties. Even if definitive contracts are entered into, the letters of intent and resulting contracts contemplate that such contracts will provide the purchaser with time to evaluate the properties and conduct due diligence and during which periods the purchaser will have the ability to terminate the contracts without penalty or forfeiture of any deposit or earnest money. There can be no assurance that definitive contracts will be entered into with respect to any properties covered by letters of intent or that we will acquire or sell any property as to which we may have entered into a definitive contract. Further, due diligence periods are frequently extended as needed. An acquisition or sale becomes probable at the time that the due diligence period expires and the definitive contract has not been terminated. We are then at risk under an acquisition contract, but only to the extent of any earnest money deposits associated with the contract, and are obligated to sell under a sales contract. We are currently in the due diligence period for the purchase of land for development. No assurance can be made that we will be able to complete the negotiations or become satisfied with the outcome of the due diligence. 18. Quarterly Financial Data (unaudited) Summarized quarterly financial data for the years ended December 31, 2001 and 2000 are as follows: (In thousands, except per share amounts)
First Second Third Fourth Total --------- ---------- --------- ----------- ---------- 2001: Revenues....................................$ 105,354 $ 104,560 $ 112,218 $ 106,083 $ 428,215 Net income to common shareholders........... 16,201* 16,934** 18,096 7,516 58,747 Basic earnings per share.................... 0.43* 0.43** 0.44 0.18 1.48 Diluted earnings per share.................. 0.41* 0.40** 0.42 0.18 1.41 2000: Revenues....................................$ 98,714 $ 101,327 $ 102,395 $ 101,103 $ 403,539 Net income to common shareholders........... 12,676*** 10,594 28,203**** 13,580 65,053 Basic earnings per share.................... 0.33*** 0.28 0.74**** 0.36 1.71 Diluted earnings per share.................. 0.31*** 0.27 0.72**** 0.33 1.63
* Includes a $1,716, or $0.05 basic and $0.04 diluted earnings per share, impact related to the gain on sale of land. ** Includes a $656, or $0.02 basic and $0.01 diluted earnings per share, impact related to the gain on sale of land. *** Includes a $1,933, or $0.05 basic and diluted earnings per share, impact related to the gain on sale of land. **** Includes a $16,440, or $0.43 basic and $0.37 diluted earnings per share, impact related to the gain on sale of properties. 19. Price Range of Common Shares (unaudited) The high and low sales prices per share of our common shares, as reported on the New York Stock Exchange composite tape, and distributions per share declared for the quarters indicated were as follows: High Low Distributions ---------------- --------------- -------------- 2001: First ...................... $ 33.29 $ 31.07 $ 0.61 Second ..................... 36.70 32.72 0.61 Third ...................... 39.32 35.92 0.61 Fourth ..................... 37.51 34.32 0.61 2000: First ...................... $ 27.38 $ 25.88 $ 0.5625 Second ..................... 30.75 27.06 0.5625 Third ...................... 32.00 29.44 0.5625 Fourth ..................... 33.81 28.50 0.5625 CAMDEN PROPERTY TRUST COMPARATIVE SUMMARY OF SELECTED FINANCIAL AND PROPERTY DATA (In thousands, except per share amounts)
Year Ended December 31, ----------------------------------------------------------------------- 2001 2000 1999 1998* 1997** ------------ ------------ ------------ ----------- ----------- Operating Data Revenues: Rental income ......................................... $ 374,187 $ 364,111 $ 341,168 $ 300,632 $ 187,928 Other property income ................................. 29,433 27,030 22,148 18,093 9,446 ------------ ------------ ------------ ----------- ----------- Total property income ............................... 403,620 391,141 363,316 318,725 197,374 Equity in income of joint ventures .................... 8,527 765 683 1,312 1,141 Fee and asset management .............................. 6,951 5,810 5,373 1,552 743 Other income .......................................... 9,117 5,823 1,924 2,250 531 ------------ ------------ ------------ ----------- ----------- Total revenues ...................................... 428,215 403,539 371,296 323,839 199,789 ------------ ------------ ------------ ----------- ----------- Expenses Property operating and maintenance .................... 115,572 112,727 107,972 97,137 70,679 Real estate taxes ..................................... 40,717 39,054 36,410 31,469 21,028 General and administrative ............................ 13,743 14,349 10,606 7,998 4,389 Impairment provision for technology investments ....... 9,864 Other Expenses ........................................ 1,511 Interest ............................................. 69,841 69,036 57,856 50,467 28,537 Depreciation and amortization.......................... 101,660 96,966 89,516 78,113 44,836 ------------ ------------ ------------ ----------- ----------- Total expenses....................................... 352,908 332,132 302,360 265,184 169,469 ------------ ------------ ------------ ----------- ----------- Income before gain on sales of properties and joint venture interests, minority interest and extraordinary charge....................................... 75,307 71,407 68,936 58,655 30,320 Gain on sales of properties and joint venture interests ... 2,372 18,323 2,979 10,170 Income allocated to minority interests Distributions on units convertible into perpetual preferred shares..................................... (12,872) (12,845) (8,278) Income allocated to units convertible into common shares (3,127) (2,461) (2,014) (1,322) (1,655) ------------ ------------ ------------ ----------- ----------- Income before extraordinary charge......................... 61,680 74,424 61,623 57,333 38,835 Extraordinary charge (early retirement of debt)............ (388) (397) ------------ ------------ ------------ ----------- ----------- Net income ................................................ 61,292 74,424 61,623 57,333 38,438 Preferred share dividends ................................. (2,545) (9,371) (9,371) (9,371) ------------ ------------ ------------ ---------- ----------- Net income to common shareholders ......................... $ 58,747 $ 65,053 $ 52,252 $ 47,962 $ 38,438 ============ ============ ============ =========== =========== Basic earnings per share before extraordinary charge....... $ 1.49 $ 1.71 $ 1.27 $ 1.16 $ 1.48 Basic earnings per share .................................. 1.48 1.71 1.27 1.16 1.46 Diluted earnings per share before extraordinary charge..... 1.42 1.63 1.23 1.12 1.43 Diluted earnings per share ................................ 1.41 1.63 1.23 1.12 1.41 Distributions per common share ............................ $ 2.44 $ 2.25 $ 2.08 $ 2.02 $ 1.96 Weighted average number of common shares outstanding 39,796 38,112 41,236 41,174 26,257 Weighted average number of common and common dilutive equivalent shares outstanding ............... 41,603 41,388 44,291 44,183 28,356
CAMDEN PROPERTY TRUST COMPARATIVE SUMMARY OF SELECTED FINANCIAL AND PROPERTY DATA (CONTINUED) (In thousands, except property data amounts)
Year Ended December 31, -------------------------------------------------------------------- 2001 2000 1999 1998* 1997** ------------ ----------- ------------ ------------ ------------ Balance Sheet Data (at end of year) Real estate assets............................................ $ 2,823,530 $ 2,719,234 $ 2,678,034 $ 2,487,942 $ 1,397,138 Accumulated depreciation...................................... (422,154) (326,723) (253,545) (167,560) (94,665) Total assets.................................................. 2,449,665 2,430,881 2,487,932 2,347,982 1,323,620 Notes payable ................................................ 1,207,047 1,138,117 1,165,090 1,002,568 480,754 Minority interests............................................ 206,079 210,377 196,852 71,783 63,325 Convertible subordinated debentures........................... 1,950 3,406 3,576 6,025 Shareholders' Equity.......................................... 918,251 974,183 1,016,675 1,170,388 710,564 Common shares outstanding .................................... 40,799 38,129 39,093 43,825 31,694 Other Data Cash flows provided by (used in): Operating activities .................................... $ 198,213 $ 166,436 $ 164,021 $ 138,419 $ 65,974 Investing activities .................................... (119,627) (15,751) (220,571) (55,013) (73,709) Financing activities .................................... (77,897) (151,266) 56,420) (84,227) 11,837 Funds from operations*** 157,840 156,274 152,369 137,996 75,753 Property Data Number of operating properties (at end of year)............... 145 145 153 149 100 Number of operating apartment homes (at end of year).......... 51,345 51,336 53,311 51,310 34,669 Number of operating apartment homes (weighted average) ....... 45,488 46,501 45,606 42,411 29,280 Weighted average monthly total property income per apartment home.................................. $ 739 $ 701 $ 664 $ 626 $ 562 Properties under development (at end of period)............... 2 3 6 14 6
* Effective April 1, 1998 we acquired Oasis Residential, Inc. ** Effective April 1, 1997 we acquired Paragon Group, Inc. *** Management considers FFO to be an appropriate measure of the performance of an equity REIT. The National Association of Real Estate Investment Trusts ("NAREIT") currently defines FFO as net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from debt restructuring and sales of property, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. In addition, extraordinary or unusual items, along with significant non-recurring events that materially distort the comparative measure of FFO are typically disregarded in its calculation. Our definition of diluted FFO also assumes conversion at the beginning of the period of all convertible securities, including minority interests, which are convertible into common equity. We believe that in order to facilitate a clear understanding of our consolidated historical operating results, FFO should be examined in conjunction with net income as presented in the consolidated financial statements and data included elsewhere in this report. FFO is not defined by generally accepted accounting principles. FFO should not be considered as an alternative to net income as an indication of our operating performance or to net cash provided by operating activities as a measure of our liquidity. Further, FFO as disclosed by other REIT's may not be comparable to our calculation. EX-21 5 ex21-1.txt SUBSIDIARIES OF THE REGISTRANT EXHIBIT 21.1 State of Incorporation/ Name Under Which Names of Subsidiaries Organization Business is Done - ------------------------------- ------------------- ------------------------- 1. Camden Operating, L.P. Delaware Camden Operating, L.P. 2. Camden USA, Inc. Delaware Camden USA, Inc. 3. Camden Development, Inc. Delaware Camden Development, Inc. 4. Camden Realty, Inc. Delaware Camden Realty, Inc. 5. Camden Builders, Inc. Delaware Camden Builders, Inc. EX-23 6 ex23-1.txt INDEPENDENT AUDITORS' CONSENT EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statements No. 33-80230, No. 333-32569 and No. 333- 57565, each on Form S-8, Amendment No. 2 to No. 33-84658, Amendment No. 1 to No. 33-84536, Amendment No. 4 to No. 333-70295 and Post-Effective Amendment No.1 to No. 333-92959, each on Form S-3, of Camden Property Trust of our report dated January 29, 2002, appearing in this Annual Report on Form 10-K of Camden Property Trust for the year ended December 31, 2001. DELOITTE & TOUCHE LLP Houston, Texas March 28, 2002 EX-24 7 ex24-1.txt POWER OF ATTORNEY EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute and appoint D. Keith Oden and G. Steven Dawson, and each of them, each with full power to act without the other, his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY TRUST on Form 10-K for the year ended December 31, 2001 and to sign any and all amendments to the Annual Report and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof. /s/Richard J. Campo ------------------------------------------ Signature Richard J. Campo ------------------------------------------ Print Name Dated: March 28, 2002 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute and appoint Richard J. Campo and G. Steven Dawson, and each of them, each with full power to act without the other, his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY TRUST on Form 10-K for the year ended December 31, 2001 and to sign any and all amendments to the Annual Report and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof. /s/D. Keith Oden ------------------------------------------ Signature D. Keith Oden ------------------------------------------ Print Name Dated: March 28, 2002 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute and appoint D. Keith Oden and Richard J. Campo, and each of them, each with full power to act without the other, his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY TRUST on Form 10-K for the year ended December 31, 2001 and to sign any and all amendments to the Annual Report and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof. /s/G. Steven Dawson ------------------------------------------ Signature G. Steven Dawson ------------------------------------------ Print Name Dated: March 28, 2002 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute and appoint D. Keith Oden, Richard J. Campo and G. Steven Dawson, and each of them, each with full power to act without the other, his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY TRUST on Form 10-K for the year ended December 31, 2001 and to sign any and all amendments to the Annual Report and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof. /s/William R. Cooper ------------------------------------------ Signature William R. Cooper ------------------------------------------ Print Name Dated: March 28, 2002 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute and appoint D. Keith Oden, Richard J. Campo and G. Steven Dawson, and each of them, each with full power to act without the other, his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY TRUST on Form 10-K for the year ended December 31, 2001 and to sign any and all amendments to the Annual Report and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof. /s/George A. Hrdlicka ------------------------------------------ Signature George A. Hrdlicka ------------------------------------------ Print Name Dated: March 28, 2002 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute and appoint D. Keith Oden, Richard J. Campo and G. Steven Dawson, and each of them, each with full power to act without the other, his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY TRUST on Form 10-K for the year ended December 31, 2001 and to sign any and all amendments to the Annual Report and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof. /s/Scott S. Ingraham ------------------------------------------ Signature Scott S. Ingraham ------------------------------------------ Print Name Dated: March 28, 2002 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute and appoint D. Keith Oden, Richard J. Campo and G. Steven Dawson, and each of them, each with full power to act without the other, his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY TRUST on Form 10-K for the year ended December 31, 2001 and to sign any and all amendments to the Annual Report and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof. /s/Lewis A. Levey ------------------------------------------ Signature Lewis A. Levey ------------------------------------------ Print Name Dated: March 28, 2002 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute and appoint D. Keith Oden, Richard J. Campo and G. Steven Dawson, and each of them, each with full power to act without the other, his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY TRUST on Form 10-K for the year ended December 31, 2001 and to sign any and all amendments to the Annual Report and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof. /s/F. Gardner Parker ------------------------------------------ Signature F. Gardner Parker ------------------------------------------ Print Name Dated: March 28, 2002 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby constitute and appoint D. Keith Oden, Richard J. Campo and G. Steven Dawson, and each of them, each with full power to act without the other, his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign an Annual Report (the "Annual Report") of CAMDEN PROPERTY TRUST on Form 10-K for the year ended December 31, 2001 and to sign any and all amendments to the Annual Report and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof. /s/Steven A. Webster ------------------------------------------ Signature Steven A. Webster ------------------------------------------ Print Name Dated: March 28, 2002 -----END PRIVACY-ENHANCED MESSAGE-----