filings.toolsItem 16. Summary
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Item 16. Summary
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Camden Property Trust has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| February 20, 2020 | CAMDEN PROPERTY TRUST | |||||
| By: | /s/ Michael P. Gallagher | |||||
| Michael P. Gallagher | ||||||
| Senior Vice President — Chief Accounting Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of Camden Property Trust and in the capacities and on the dates indicated.
| Name | Title | Date | ||
| /s/ Richard J. Campo | Chairman of the Board of Trust | February 20, 2020 | ||
| Richard J. Campo | Managers and Chief Executive Officer (Principal Executive Officer) | |||
| /s/ D. Keith Oden | Executive Vice Chairman of the Board of Trust | February 20, 2020 | ||
| D. Keith Oden | Managers | |||
| /s/ Alexander J. Jessett | Executive Vice President - Finance, | February 20, 2020 | ||
| Alexander J. Jessett | Chief Financial Officer and Treasurer (Principal Financial Officer) | |||
| /s/ Michael P. Gallagher | Senior Vice President - Chief Accounting | February 20, 2020 | ||
| Michael P. Gallagher | Officer (Principal Accounting Officer) | |||
| * | ||||
| Heather J. Brunner | Trust Manager | February 20, 2020 | ||
| * | ||||
| Scott S. Ingraham | Trust Manager | February 20, 2020 | ||
| * | ||||
| Renu Khator | Trust Manager | February 20, 2020 | ||
| * | ||||
| William B. McGuire, Jr. | Trust Manager | February 20, 2020 | ||
| * | ||||
| William F. Paulsen | Trust Manager | February 20, 2020 | ||
| * | ||||
| Frances Aldrich Sevilla-Sacasa | Trust Manager | February 20, 2020 | ||
| * | ||||
| Steven A. Webster | Trust Manager | February 20, 2020 | ||
| * | ||||
| Kelvin R. Westbrook | Trust Manager | February 20, 2020 | ||
| *By: /s/ Alexander J. Jessett | ||||
| Alexander J. Jessett Attorney-in-fact |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Trust Managers of Camden Property Trust
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Camden Property Trust and subsidiaries (the "Company") as of December 31, 2019 and 2018, the related consolidated statements of income and comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2019, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2020, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Asset Impairment - Determination of Impairment Indicators of Properties Under Development, Including Land - Refer to Note 2 to the financial statements
Critical Audit Matter Description
The Company’s evaluation of properties under development, including land (“properties under development”), for impairment involves an initial assessment to determine whether events or changes in circumstances indicate that the carrying amount of properties under development may not be recoverable. Possible indications of impairment of properties under development may include deterioration of market conditions or changes in the Company’s development strategy that may significantly affect key assumptions used in fair value estimates.
The Company considers projected future undiscounted cash flows, trends, strategic decisions regarding future development plans, and other factors in the assessment of whether impairment conditions exist. The Company makes significant assumptions, such as project start date, as well as estimates of demand for multifamily communities, market rents, economic conditions, and occupancies, to evaluate properties under development for possible indications of impairment. Changes in these assumptions could
F-1
have a significant impact on concluding whether impairment indications exist, which would require a recoverability test to be performed for the properties under development. As of December 31, 2019, the Company’s properties under development had an aggregate book value of $512.3 million, and no impairment loss has been recognized for the year ended December 31, 2019.
Given the Company’s evaluation of impairment indicators for the properties under development requires management to make judgments related to significant assumptions described above, performing audit procedures to evaluate whether management appropriately identified events or changes in circumstances indicating that the carrying amounts may not be recoverable required a high degree of auditor judgment.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the evaluation of properties under development for possible indications of impairment included the following, among others:
| • | We tested the effectiveness of controls over management’s process of identifying indicators of asset impairment, including controls over management’s estimates of projected occupancy and market rent, projected construction costs, and other market and economic assumptions. |
| • | We evaluated the reasonableness of management’s impairment indicator analysis by performing the following procedures: |
| ◦ | Compared projected net operating income growth, occupancy rate, and capitalization rate for each property to market averages from third-party market reports and to the Company’s financial performance for operating properties in the same or nearby markets. |
| ◦ | Discussed with management and read Board of Trust Managers' meeting minutes to determine if there were any significant adverse changes in legal factors or in the business climate that could affect management’s plans for properties under development, including if it is more likely than not that the properties under development will be sold, not developed, or otherwise disposed of significantly before the end of its previously estimated useful life. |
| ◦ | Performed a retrospective lookback review of completed construction projects to determine if projected costs are reasonable to actual completed construction costs. |
| • | We performed a search for negative evidence by reading third-party market reports to evaluate management’s analysis to identify any significant changes in economic factors, industry factors, or other adverse events that may result in an impairment indicator. |
| /s/ DELOITTE & TOUCHE LLP |
| Houston, Texas |
| February 20, 2020 |
| We have served as the Company's auditor since 1993. |
F-2
CAMDEN PROPERTY TRUST
CONSOLIDATED BALANCE SHEETS
| December 31, | |||||||
| (in thousands, except per share amounts) | 2019 | 2018 | |||||
| Assets | |||||||
| Real estate assets, at cost | |||||||
| Land | $ | 1,199,384 | $ | 1,098,526 | |||
| Buildings and improvements | 7,404,090 | 6,935,971 | |||||
| $ | 8,603,474 | $ | 8,034,497 | ||||
| Accumulated depreciation | (2,686,025 | ) | (2,403,149 | ) | |||
| Net operating real estate assets | $ | 5,917,449 | $ | 5,631,348 | |||
| Properties under development, including land | 512,319 | 293,978 | |||||
| Investments in joint ventures | 20,688 | 22,283 | |||||
| Total real estate assets | $ | 6,450,456 | $ | 5,947,609 | |||
| Accounts receivable – affiliates | 21,833 | 22,920 | |||||
| Other assets, net | 248,716 | 205,454 | |||||
| Cash and cash equivalents | 23,184 | 34,378 | |||||
| Restricted cash | 4,315 | 9,225 | |||||
| Total assets | $ | 6,748,504 | $ | 6,219,586 | |||
| Liabilities and equity | |||||||
| Liabilities | |||||||
| Notes payable | |||||||
| Unsecured | $ | 2,524,099 | $ | 1,836,427 | |||
| Secured | — | 485,176 | |||||
| Accounts payable and accrued expenses | 171,719 | 146,866 | |||||
| Accrued real estate taxes | 54,408 | 54,358 | |||||
| Distributions payable | 80,973 | 74,982 | |||||
| Other liabilities | 215,581 | 183,999 | |||||
| Total liabilities | $ | 3,046,780 | $ | 2,781,808 | |||
| Commitments and contingencies (Note 14) | |||||||
| Non-qualified deferred compensation share awards | — | 52,674 | |||||
| Equity | |||||||
| Common shares of beneficial interest; $0.01 par value per share; 175,000 shares authorized; 109,110 and 105,503 issued; 106,878 and 103,080 outstanding at December 31, 2019 and 2018, respectively | 1,069 | 1,031 | |||||
| Additional paid-in capital | 4,566,731 | 4,154,763 | |||||
| Distributions in excess of net income attributable to common shareholders | (584,167 | ) | (495,496 | ) | |||
| Treasury shares, at cost (9,636 and 9,841 common shares, at December 31, 2019 and 2018, respectively) | (348,419 | ) | (355,804 | ) | |||
| Accumulated other comprehensive income (loss) | (6,529 | ) | 6,929 | ||||
| Total common equity | $ | 3,628,685 | $ | 3,311,423 | |||
| Non-controlling interests | 73,039 | 73,681 | |||||
| Total equity | $ | 3,701,724 | $ | 3,385,104 | |||
| Total liabilities and equity | $ | 6,748,504 | $ | 6,219,586 |
See Notes to Consolidated Financial Statements.
F-3
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
| Year Ended December 31, | |||||||||||
| (in thousands, except per share amounts) | 2019 | 2018 | 2017 | ||||||||
| Property revenues | $ | 1,028,461 | $ | 954,505 | $ | 900,896 | |||||
| Property expenses | |||||||||||
| Property operating and maintenance | $ | 235,589 | $ | 220,732 | $ | 217,817 | |||||
| Real estate taxes | 130,758 | 122,847 | 110,925 | ||||||||
| Total property expenses | $ | 366,347 | $ | 343,579 | $ | 328,742 | |||||
| Non-property income | |||||||||||
| Fee and asset management | $ | 8,696 | $ | 7,231 | $ | 8,176 | |||||
| Interest and other income | 3,090 | 2,101 | 3,011 | ||||||||
| Income (loss) on deferred compensation plans | 21,694 | (6,535 | ) | 16,608 | |||||||
| Total non-property income | $ | 33,480 | $ | 2,797 | $ | 27,795 | |||||
| Other expenses | |||||||||||
| Property management | $ | 25,290 | $ | 25,581 | $ | 25,773 | |||||
| Fee and asset management | 5,759 | 4,451 | 3,903 | ||||||||
| General and administrative | 53,201 | 50,735 | 50,587 | ||||||||
| Interest | 80,706 | 84,263 | 86,750 | ||||||||
| Depreciation and amortization | 336,274 | 300,946 | 263,974 | ||||||||
| Expense (benefit) on deferred compensation plans | 21,694 | (6,535 | ) | 16,608 | |||||||
| Total other expenses | $ | 522,924 | $ | 459,441 | $ | 447,595 | |||||
| Loss on early retirement of debt | (11,995 | ) | — | (323 | ) | ||||||
| Gain on sale of operating properties | 49,901 | — | 43,231 | ||||||||
| Equity in income of joint ventures | 14,783 | 7,836 | 6,822 | ||||||||
| Income from continuing operations before income taxes | $ | 225,359 | $ | 162,118 | $ | 202,084 | |||||
| Income tax expense | (1,089 | ) | (1,424 | ) | (1,224 | ) | |||||
| Net income | $ | 224,270 | $ | 160,694 | $ | 200,860 | |||||
| Less income allocated to non-controlling interests | (4,647 | ) | (4,566 | ) | (4,438 | ) | |||||
| Net income attributable to common shareholders | $ | 219,623 | $ | 156,128 | $ | 196,422 |
| Total earnings per share – basic | 2.23 | 1.63 | 2.14 | |||||
| Total earnings per share – diluted | 2.22 | 1.63 | 2.13 | |||||
| Weighted average number of common shares outstanding – basic | 98,460 | 95,208 | 91,499 | |||||
| Weighted average number of common shares outstanding – diluted | 99,384 | 95,366 | 92,515 |
See Notes to Consolidated Financial Statements.
F-4
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Continued)
| Year Ended December 31, | |||||||||||
| (In thousands, except per share amounts) | 2019 | 2018 | 2017 | ||||||||
| Consolidated Statements of Comprehensive Income | |||||||||||
| Net income | $ | 224,270 | $ | 160,694 | $ | 200,860 | |||||
| Other comprehensive income | |||||||||||
| Unrealized gain (loss) on cash flow hedging activities | (12,998 | ) | 6,782 | 1,690 | |||||||
| Unrealized gain (loss) and unamortized prior service cost on post retirement obligation | (449 | ) | 450 | (20 | ) | ||||||
| Reclassification of net (gain) loss on cash flow hedging activities, prior service cost and net loss on post retirement obligation | (11 | ) | (246 | ) | 136 | ||||||
| Comprehensive income | $ | 210,812 | $ | 167,680 | $ | 202,666 | |||||
| Less income allocated to non-controlling interests | (4,647 | ) | (4,566 | ) | (4,438 | ) | |||||
| Comprehensive income attributable to common shareholders | $ | 206,165 | $ | 163,114 | $ | 198,228 |
See Notes to Consolidated Financial Statements.
F-5
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF EQUITY
| Common Shareholders | |||||||||||||||||||||||||||
| (in thousands, except per share amounts) | Common shares of beneficial interest | Additional paid-in capital | Distributions in excess of net income | Treasury shares, at cost | Accumulated other comprehensive loss | Non-controlling interests | Total equity | ||||||||||||||||||||
| Equity, December 31, 2016 | $ | 978 | $ | 3,678,277 | $ | (289,180 | ) | $ | (373,339 | ) | $ | (1,863 | ) | $ | 80,680 | $ | 3,095,553 | ||||||||||
| Net income | 196,422 | 4,438 | 200,860 | ||||||||||||||||||||||||
| Other comprehensive income | 1,806 | 1,806 | |||||||||||||||||||||||||
| Common shares issued (4,778 shares) | 48 | 444,990 | 445,038 | ||||||||||||||||||||||||
| Net share awards | 15,779 | 8,177 | 23,956 | ||||||||||||||||||||||||
| Employee share purchase plan | 1,030 | 686 | 1,716 | ||||||||||||||||||||||||
| Common share options exercised (11 shares) | 521 | 410 | 931 | ||||||||||||||||||||||||
| Change in classification of deferred compensation plan | (13,388 | ) | (13,388 | ) | |||||||||||||||||||||||
| Change in redemption value of non-qualified share awards | (10,038 | ) | (10,038 | ) | |||||||||||||||||||||||
| Diversification of share awards within deferred compensation plan | 10,159 | 13,074 | 23,233 | ||||||||||||||||||||||||
| Conversions of operating partnership unit (3 shares) | 117 | (117 | ) | — | |||||||||||||||||||||||
| Cash distributions declared to equity holders ($3.00 per share) | (278,981 | ) | (5,650 | ) | (284,631 | ) | |||||||||||||||||||||
| Other | 2 | (324 | ) | (322 | ) | ||||||||||||||||||||||
| Equity, December 31, 2017 | $ | 1,028 | $ | 4,137,161 | $ | (368,703 | ) | $ | (364,066 | ) | $ | (57 | ) | $ | 79,351 | $ | 3,484,714 | ||||||||||
| Net income | 156,128 | 4,566 | 160,694 | ||||||||||||||||||||||||
| Other comprehensive income | 6,986 | 6,986 | |||||||||||||||||||||||||
| Net share awards | 13,720 | 7,961 | 21,681 | ||||||||||||||||||||||||
| Employee share purchase plan | 826 | 554 | 1,380 | ||||||||||||||||||||||||
| Common share options exercised (8 shares) | 41 | 41 | |||||||||||||||||||||||||
| Change in classification of deferred compensation plan | (16,407 | ) | (16,407 | ) | |||||||||||||||||||||||
| Change in redemption value of non-qualified share awards | 669 | 669 | |||||||||||||||||||||||||
| Diversification of share awards within deferred compensation plan | 29,379 | 10,915 | 40,294 | ||||||||||||||||||||||||
| Common shares repurchased | (253 | ) | (253 | ) | |||||||||||||||||||||||
| Conversion/redemption of operating partnership units (2 shares) | (9,781 | ) | (4,634 | ) | (14,415 | ) | |||||||||||||||||||||
| Cash distributions declared to equity holders ($3.08 per share) | (294,505 | ) | (5,602 | ) | (300,107 | ) | |||||||||||||||||||||
| Other | 3 | (176 | ) | (173 | ) | ||||||||||||||||||||||
| Equity, December 31, 2018 | $ | 1,031 | $ | 4,154,763 | $ | (495,496 | ) | $ | (355,804 | ) | $ | 6,929 | $ | 73,681 | $ | 3,385,104 |
See Notes to Consolidated Financial Statements.
F-6
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF EQUITY (Continued)
| Common Shareholders | |||||||||||||||||||||||||||
| (in thousands, except per share amounts) | Common shares of beneficial interest | Additional paid-in capital | Distributions in excess of net income | Treasury shares, at cost | Accumulated other comprehensive loss | Non-controlling interests | Total equity | ||||||||||||||||||||
| Equity, December 31, 2018 | $ | 1,031 | $ | 4,154,763 | $ | (495,496 | ) | $ | (355,804 | ) | $ | 6,929 | $ | 73,681 | $ | 3,385,104 | |||||||||||
| Net income | 219,623 | 4,647 | 224,270 | ||||||||||||||||||||||||
| Other comprehensive (loss) | (13,458 | ) | (13,458 | ) | |||||||||||||||||||||||
| Common shares issued (3,599 shares) | 36 | 353,177 | 353,213 | ||||||||||||||||||||||||
| Net share awards | 13,609 | 6,590 | 20,199 | ||||||||||||||||||||||||
| Employee share purchase plan | 1,538 | 795 | 2,333 | ||||||||||||||||||||||||
| Change in classification of deferred compensation plan (See Note 11) | 43,311 | 9,363 | 52,674 | ||||||||||||||||||||||||
| Conversion of operating partnership units (8 shares) | 304 | (304 | ) | — | |||||||||||||||||||||||
| Cash distributions declared to equity holders ($3.20 per share) | (317,657 | ) | (5,607 | ) | (323,264 | ) | |||||||||||||||||||||
| Other | 2 | 29 | 622 | 653 | |||||||||||||||||||||||
| Equity, December 31, 2019 | $ | 1,069 | $ | 4,566,731 | $ | (584,167 | ) | $ | (348,419 | ) | $ | (6,529 | ) | $ | 73,039 | $ | 3,701,724 |
See Notes to Consolidated Financial Statements.
F-7
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended December 31, | |||||||||||
| (in thousands) | 2019 | 2018 | 2017 | ||||||||
| Cash flows from operating activities | |||||||||||
| Net income | $ | 224,270 | $ | 160,694 | $ | 200,860 | |||||
| Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
| Depreciation and amortization | 336,274 | 300,946 | 263,974 | ||||||||
| Loss on early retirement of debt | 11,995 | — | 323 | ||||||||
| Gain on sale of operating properties | (49,901 | ) | — | (43,231 | ) | ||||||
| Distributions of income from joint ventures | 14,843 | 7,736 | 6,851 | ||||||||
| Equity in income of joint ventures | (14,783 | ) | (7,836 | ) | (6,822 | ) | |||||
| Share-based compensation | 15,235 | 16,749 | 17,547 | ||||||||
| Receipts for settlement of forward interest rate swaps | (20,430 | ) | 15,905 | — | |||||||
| Net change in operating accounts and other | 38,094 | 9,553 | (4,846 | ) | |||||||
| Net cash from operating activities | $ | 555,597 | $ | 503,747 | $ | 434,656 | |||||
| Cash flows from investing activities | |||||||||||
| Development and capital improvements, including land | $ | (407,558 | ) | $ | (359,230 | ) | $ | (299,086 | ) | ||
| Acquisition of operating property | (436,305 | ) | (290,005 | ) | (58,267 | ) | |||||
| Proceeds from sales of operating properties, including land | 67,572 | 11,296 | 76,902 | ||||||||
| Increase in non-real estate assets | (17,197 | ) | (14,503 | ) | (5,128 | ) | |||||
| Decrease (increase) in notes receivable | 1,394 | 9,475 | (1,988 | ) | |||||||
| Maturity of short-term investments | — | — | 100,000 | ||||||||
| Other | (351 | ) | 2,046 | (2,187 | ) | ||||||
| Net cash from investing activities | $ | (792,445 | ) | $ | (640,921 | ) | $ | (189,754 | ) | ||
| Cash flows from financing activities | |||||||||||
| Borrowings on unsecured credit facility and other short-term borrowings | $ | 1,217,000 | $ | 342,000 | $ | 465,000 | |||||
| Repayments on unsecured credit facility and other short-term borrowings | (1,173,000 | ) | (342,000 | ) | (465,000 | ) | |||||
| Repayment of notes payable, including prepayment penalties | (746,730 | ) | (381,438 | ) | (278,999 | ) | |||||
| Proceeds from notes payable | 889,979 | 495,545 | — | ||||||||
| Distributions to common shareholders and non-controlling interests | (317,253 | ) | (298,005 | ) | (280,761 | ) | |||||
| Payment of deferred financing costs | (5,965 | ) | (914 | ) | (978 | ) | |||||
| Proceeds from issuance of common shares | 353,213 | — | 445,038 | ||||||||
| Repurchase of common shares and redemption of units | — | (14,668 | ) | — | |||||||
| Other | 3,500 | 2,452 | 2,777 | ||||||||
| Net cash from financing activities | $ | 220,744 | $ | (197,028 | ) | $ | (112,923 | ) | |||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | (16,104 | ) | (334,202 | ) | 131,979 | ||||||
| Cash, cash equivalents, and restricted cash, beginning of year | 43,603 | 377,805 | 245,826 | ||||||||
| Cash, cash equivalents, and restricted cash, end of year | $ | 27,499 | $ | 43,603 | $ | 377,805 |
See Notes to Consolidated Financial Statements.
F-8
CAMDEN PROPERTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
| Year Ended December 31, | |||||||||||
| (in thousands) | 2019 | 2018 | 2017 | ||||||||
| Reconciliation of cash, cash equivalents, and restricted cash to the Consolidated Balance Sheet | |||||||||||
| Cash and cash equivalents | $ | 23,184 | $ | 34,378 | $ | 368,492 | |||||
| Restricted cash | 4,315 | 9,225 | 9,313 | ||||||||
| Total cash, cash equivalents, and restricted cash, end of year | 27,499 | 43,603 | 377,805 | ||||||||
| Supplemental information | |||||||||||
| Cash paid for interest, net of interest capitalized | $ | 71,248 | $ | 81,299 | $ | 88,654 | |||||
| Cash paid for income taxes | 1,291 | 1,951 | 1,705 | ||||||||
| Supplemental schedule of noncash investing and financing activities | |||||||||||
| Distributions declared but not paid | $ | 80,973 | $ | 74,982 | $ | 72,943 | |||||
| Value of shares issued under benefit plans, net of cancellations | 18,249 | 17,253 | 18,061 | ||||||||
| Accrual associated with construction and capital expenditures | 27,162 | 35,588 | 19,016 | ||||||||
| Right-of-use assets obtained in exchange for the use of new operating lease liabilities | 15,017 | — | — |
See Notes to Consolidated Financial Statements.
F-9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business
Business. Formed on May 25, 1993, Camden Property Trust, a Texas real estate investment trust (“REIT”), and all consolidated subsidiaries are primarily engaged in the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. Our multifamily apartment communities are referred to as “communities,” “multifamily communities,” “properties,” or “multifamily properties” in the following discussion. As of December 31, 2019, we owned interests in, operated, or were developing 172 multifamily properties comprised of 58,315 apartment homes across the United States. Of the 172 properties, eight properties were under construction, and will consist of a total of 2,208 apartment homes when completed. We also own land holdings which we may develop into multifamily communities in the future.
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements
Principles of Consolidation. Our consolidated financial statements include our accounts and the accounts of other subsidiaries and joint ventures (including partnerships and limited liability companies) over which we have control. All intercompany transactions, balances, and profits have been eliminated in consolidation. Investments acquired or created are evaluated based on the accounting guidance relating to variable interest entities (“VIEs”), which requires the consolidation of VIEs in which we are considered to be the primary beneficiary. If the investment is determined not to be a VIE, then the investment is evaluated for consolidation primarily using a voting interest model. In determining if we have a controlling financial interest, we consider factors such as ownership interests, authority to make decisions, kick-out rights and participating rights. As of December 31, 2019, two of our consolidated operating partnerships are VIEs. We are considered the primary beneficiary of both consolidated operating partnerships and therefore consolidate these operating partnerships. As of December 31, 2019, we held approximately 92% and 95% of the outstanding common limited partnership units and the sole 1% general partnership interest in each of these consolidated operating partnerships.
Acquisitions of Real Estate. Upon the acquisition of real estate, we determine the fair value of tangible and intangible assets, which includes land, buildings (as-if-vacant), furniture and fixtures, the value of in-place leases, including above and below market leases, and acquired liabilities. In estimating these values, we apply methods similar to those used by independent appraisers of income-producing property. Estimates of fair value of acquired debt are based upon interest rates available for the issuance of debt with similar terms and remaining maturities. Depreciation is computed on a straight-line basis over the remaining useful lives of the related tangible assets. The value of in-place leases and above or below market leases is amortized over the estimated average remaining life of leases in place at the time of acquisition; the net carrying value of in-place leases are included in other assets, net and the net carrying value of above or below market leases are included in other liabilities, net in our consolidated balance sheets.
During the years ended December 31, 2019, 2018, and 2017, we recognized amortization expense of approximately $10.4 million, $9.4 million, and $1.3 million, respectively, related to in-place leases. The net amortization of above-market and below-market leases increased rental revenues by $0.1 million and $0.2 million during the years ended December 31, 2019 and 2018, respectively. We did not recognize any net amortization of above-market and below-market leases during the year ended December 31, 2017. During the year ended December 31, 2019, the weighted average amortization periods for both in-place and net above and below market leases were approximately six months. During the year ended December 31, 2018, the weighted average amortization period for in-place and net above and below market leases were approximately seven months and five months. During the year ended December 31, 2017, the weighted average amortization period for in-place leases was approximately six months.
Asset Impairment. Long-lived assets are reviewed for impairment annually or whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Impairment may exist if estimated future undiscounted cash flows associated with long-lived assets are not sufficient to recover the carrying value of such assets. We consider projected future undiscounted cash flows, trends, strategic decisions regarding future development plans, and other factors in our assessment of whether impairment conditions exist. While we believe our estimates of future cash flows are reasonable, different assumptions regarding a number of factors, including market rents, economic conditions, and occupancies, could significantly affect these estimates. When impairment exists, the long-lived asset is adjusted to its fair value. In estimating fair value, management uses appraisals, management estimates, and discounted cash flow calculations which utilize inputs from a marketplace participant’s perspective. In addition, we evaluate our equity investments in joint ventures and if we believe there is an other than temporary decline in market value of our investment below our carrying value, we will record an impairment charge. We did not record any impairment charges for the years ended December 31, 2019, 2018, or 2017.
The value of our properties under development depends on market conditions, including estimates of the project start date as well as estimates of demand for multifamily communities. We have reviewed market trends and other marketplace information and have incorporated this information as well as our current outlook into the assumptions we use in our impairment analyses.
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Due to the judgment and assumptions applied in the impairment analyses, it is possible actual results could differ substantially from those estimated.
We believe the carrying value of our operating real estate assets, properties under development, and land is currently recoverable. However, if market conditions deteriorate or if changes in our development strategy significantly affect any key assumptions used in our fair value estimates, we may need to take material charges in future periods for impairments related to existing assets. Any such non-cash charges could have an adverse effect on our consolidated financial position and results of operations.
Cash and Cash Equivalents. All cash and investments in money market accounts and other highly liquid securities with a maturity of three months or less at the date of purchase are considered to be cash and cash equivalents. We maintain the majority of our cash and cash equivalents at major financial institutions in the United States and deposits with these financial institutions may exceed the amount of insurance provided on such deposits; however, we regularly monitor the financial stability of these financial institutions and believe we are not currently exposed to any significant default risk with respect to these deposits.
Short-term Investments. Our short-term investments consisted of certificates of deposit which have original maturities of more than three months but less than one year.
Cost Capitalization. Real estate assets are carried at cost plus capitalized carrying charges. Carrying charges are primarily interest and real estate taxes which are capitalized as part of properties under development. Capitalized interest is generally based on the weighted average interest rate of our unsecured debt. Expenditures directly related to the development and improvement of real estate assets are capitalized at cost as land and buildings and improvements. Indirect development costs, including salaries and benefits and other related costs directly attributable to the development of properties, are also capitalized. We begin capitalizing development, construction, and carrying costs when the development of the future real estate asset is probable and activities necessary to prepare the underlying real estate for its intended use have been initiated. All construction and certain carrying costs are capitalized and reported in the balance sheet as properties under development until the apartment homes are substantially completed. As apartment homes within development properties are completed, the total capitalized development cost of each apartment home is transferred from properties under development including land to buildings and improvements.
As discussed above, carrying charges are principally interest and real estate taxes capitalized as part of properties under development. Capitalized interest was approximately $14.1 million, $13.6 million, and $15.2 million for the years ended December 31, 2019, 2018, and 2017, respectively. Capitalized real estate taxes were approximately $2.8 million, $2.2 million, and $2.4 million for the years ended December 31, 2019, 2018, and 2017, respectively.
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 to expense all operating costs associated with completed apartment homes. We capitalize renovation and improvement costs we believe extend the economic lives of depreciable property. Capital expenditures subsequent to initial construction are capitalized and depreciated over their estimated useful lives.
Depreciation and amortization is computed over the expected useful lives of depreciable property on a straight-line basis with lives generally as follows:
| Estimated Useful Life | |
| Buildings and improvements | 5-35 years |
| Furniture, fixtures, equipment and other | 3-20 years |
| Intangible assets/liabilities (in-place leases and below market leases) | underlying lease term |
Derivative Financial Instruments. Derivative financial instruments are recorded in the consolidated balance sheets at fair value and presented on a gross basis for financial reporting purposes even when those instruments are subject to master netting arrangements and may otherwise qualify for net presentation. Accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting, and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows or other types of forecasted transactions are cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes attributable to the earnings effect of the hedged transactions. We may enter into derivative contracts which are intended to economically hedge certain of our risks, for which hedge accounting does not apply or we elect not to apply hedge accounting.
Assets Held for Sale (Including Discontinued Operations). Disposed of properties are classified as a discontinued operation when the disposal represents a strategic shift, such as disposal of a major line of business, a major geographical area or a major
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equity investment. The results of operations for properties sold during the period or classified as held for sale at the end of the period, and meeting the above criteria of discontinued operations, are classified as discontinued operations for all periods presented. Real estate assets held for sale are measured at the lower of carrying amount or fair value less costs to sell and are presented separately in the accompanying consolidated balance sheets. Subsequent to classification of a property as held for sale, no further depreciation is recorded. Consolidated operating properties sold or classified as held for sale, which do not meet the above criteria of discontinued operations are not included in discontinued operations and the related gains and losses are included in continuing operations. Properties sold by our unconsolidated entities which do not meet the above criteria of discontinued operations are not included in discontinued operations and related gains or losses are reported as a component of equity in income of joint ventures.
Gains on sale of real estate are recognized when the criteria for derecognition of an asset is met, including when a contract exists and the buyer obtained control of the nonfinancial asset sold, in accordance with accounting principles generally accepted in the United States of America ("GAAP"). As a result, most of our future contributions of nonfinancial assets to our joint ventures, if any, will result in the recognition of a full gain or loss as if we sold 100% of the nonfinancial asset.
Fair Value. For financial assets and liabilities recorded at fair value on a recurring or non-recurring basis, fair value is the price we would receive to sell an asset, or pay to transfer a liability, in an orderly transaction with a market participant at the measurement date. In the absence of such data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction.
In determining fair value, observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions; preference is given to observable inputs. These two types of inputs create the following fair value hierarchy:
| • | Level 1: Quoted prices for identical instruments in active markets. |
| • | Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. |
| • | Level 3: Significant inputs to the valuation model are unobservable. |
Recurring Fair Value Measurements. The following describes the valuation methodologies we use to measure different financial instruments at fair value on a recurring basis:
Deferred Compensation Plan Investments. The estimated fair values of investment securities classified as deferred compensation plan investments are based on quoted market prices utilizing public information for the same transactions. Our deferred compensation plan investments are recorded in other assets in our consolidated balance sheets. The inputs associated with the valuation of our recurring deferred compensation plan investments are included in Level 1 of the fair value hierarchy.
Derivative Financial Instruments. The estimated fair values of derivative financial instruments are valued using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps and caps are estimated using the market-standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit enhancements to the contracts, are incorporated in the fair values to account for potential nonperformance risk, including our own nonperformance risk and the respective counterparty’s nonperformance risk. The fair value of interest rate caps is determined using the market-standard methodology of discounting the future expected cash receipts which would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observed market interest rate curves and volatilities.
Although we have determined the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default. However, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and have determined the credit valuation adjustments are not significant to the overall valuation of our derivatives. As a result, we have determined our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.
Non-recurring Fair Value Measurements. Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances. Long-lived assets such as the land, real estate asset, and in-place leases acquired with an operating property are measured in the form of cash received unless otherwise noted. These assets are recorded at fair value if they are impaired using the fair value methodologies
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used to measure long-lived assets described above at "Asset Impairment." The inputs associated with the valuation of long-lived assets are generally included in Level 3 of the fair value hierarchy, unless a quoted price for a similar long-lived asset in an active market exists, at which time they are included in Level 2 of the fair value hierarchy.
Financial Instrument Fair Value Disclosures. As of December 31, 2019 and 2018, the carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, and distributions payable represent fair value because of the short-term nature of these instruments. The carrying value of restricted cash approximates its fair value based on the nature of our assessment of the ability to recover these amounts. The carrying value of our notes receivable, which are included in other assets, net in our consolidated balance sheets, approximates their fair value. The estimated fair values are based on certain factors, such as market interest rates, terms of the note, and credit worthiness of the borrower. These financial instruments utilize Level 3 inputs. In calculating the fair value of our notes payable, interest rate, and spread assumptions reflect current credit worthiness and market conditions available for the issuance of notes payable with similar terms and remaining maturities. These financial instruments utilize Level 2 inputs.
Income Recognition. On January 1, 2019, we adopted Accounting Standards Update ("ASU") 2016-02, "Leases" which is codified as ASC 842, Leases. The majority of our revenues are derived from real estate lease contracts which are accounted for pursuant to ASC 842 and presented as property revenues, which include rental revenue and revenue from amounts received under contractual terms for other services provided to our customers. Our other revenue streams include fee and asset management income in accordance with other revenue guidance, ASC 606, Revenues from Contracts with Customers. A detail of these revenue streams are discussed below:
Property Revenue: We earn rental revenue from operating lease contracts for the use of dedicated spaces within owned assets which is recognized on a straight-line basis over the applicable lease term, net of amounts related to lease contracts identified as uncollectible. We also earn revenues from amounts received under contractual terms for other services considered non-lease components within a lease contract, primarily consisting of utility rebillings and other transactional fees, and are charged to our residents and recognized monthly as earned. We elected the practical expedient under ASU 2016-02 to not separate lease and non-lease components and have presented our property revenues combined based upon the lease being determined to be the predominant component. Any uncollectible amounts related to individual lease contracts are presented as an adjustment to property revenue. Any renewal options of real estate lease contracts are considered a new, separate contract and will be recognized at the time the option is exercised on a straight-line basis over the renewal period.
As of December 31, 2019, our average residential lease term was between twelve months to fifteen months with all other commercial leases averaging longer lease terms. We anticipate property revenue from existing leases as follows:
| (in millions) | |||
| Year ended December 31, | Operating Leases | ||
| 2020 | $ | 666.0 | |
| 2021 | 34.1 | ||
| 2022 | 5.5 | ||
| 2023 | 4.9 | ||
| 2024 | 4.1 | ||
| Thereafter | 28.3 | ||
| Total | $ | 742.9 |
Fee and Asset Management Income: We receive property management, asset management, and development and construction fees from our joint ventures for managing the ventures and managing the activities, development, and construction of their operating communities. While the individual activities related to these fees may vary, the services provided are substantially similar, have the same pattern of transfer, and are considered to be individual performance obligations composed of a series of distinct services recognized monthly as earned.
We also earn construction fees for construction management and general contracting services we provide to third-party owners of multifamily and commercial properties. These fees are recognized as we satisfy our single performance obligation over time based on a percentage-of-completion of cost basis which we believe is an accurate depiction of the transfer of control to our customers. For these contracts, significant judgment is used to estimate the cost plus margin for the project fee and our profitability on those contracts is dependent on the ability to accurately predict such factors. We record third-party construction receivables for amounts where we have unconditional rights to payment but have not received and liabilities for amounts incurred but not paid. For the years ended December 31, 2019 and 2018, these contract receivable and liability balances were immaterial.
Credit Risk. In management’s opinion, due to the number of residents, the types and diversity of submarkets in which our properties operate, and the collection terms, there is no significant concentration of credit risk.
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Reclassifications. Certain amounts have been presented separately within financing activities in the consolidated statements of cash flows for the years ended December 31, 2018 and 2017 to conform to the current-year presentation. These changes in presentation had no impact in consolidated cash flows from financing activities. Upon our adoption of ASU 2016-02 on January 1, 2019 we were required, based on our election of a practical expedient, to combine lessor lease and non-lease components as a single component under certain conditions. For the years ended December 31, 2018 and 2017, we combined other property revenues of $112.5 million and $130.4 million, respectively, with rental revenues of $842.0 million and $770.5 million, respectively, to conform to the current year presentation.
Insurance. Our primary lines of insurance coverage are property, general liability, health, workers’ compensation, and cyber security. We believe our insurance coverage adequately insures our properties against the risk of loss attributable to fire, earthquake, hurricane, tornado, flood, and other perils and adequately insures us against other risks. Losses are accrued based upon our estimates of the aggregate liability for claims incurred using certain actuarial assumptions followed in the insurance industry and based on our experience.
Other Assets, Net. Other assets in our consolidated financial statements include investments under deferred compensation plans, deferred financing costs, non-real estate leasehold improvements and equipment, notes receivable, operating lease right-of-use assets, prepaid expenses, and other miscellaneous receivables. Investments under deferred compensation plans are classified as trading securities and are adjusted to fair market value at period end. For a further discussion of our investments under deferred compensation plans, see Note 11, “Share-based Compensation and Benefit Plans.” Deferred financing costs are related to our unsecured credit facility, and are amortized no longer than the terms of the related facility on the straight-line method, which approximates the effective interest method. Corporate leasehold improvements and equipment includes expenditures related to renovation and construction of office space we lease. These leasehold improvements are depreciated using the straight-line method over the shorter of the expected useful lives or the lease terms which generally range from three to ten years.
Notes Receivable. We have one note receivable included in Other assets, net in our consolidated balance sheets, relating to a real estate secured loan to an unaffiliated third party. During 2019, we received payments of approximately $1.4 million in principal and approximately $0.6 million in interest on this note which matures on October 1, 2025. At December 31, 2019 and 2018, the outstanding note receivable balance was approximately $7.9 million and $9.3 million, respectively, and the weighted average interest rate was approximately 7.0% and 4.0%, respectively. Interest is recognized over the life of the note and is included in interest and other income in our consolidated statements of income and comprehensive income. We consider a note receivable to be impaired if it is probable we will not collect all contractually due principal and interest. We do not accrue interest when a note is considered impaired and an allowance is recorded for any principal and previously accrued interest which is not believed to be collectible. All cash receipts on impaired notes are applied to reduce the principal amount of such notes until the principal has been recovered and, thereafter, are recognized as interest income. There were no impairments as of December 31, 2019 or 2018.
Reportable Segments. We operate in a single reportable segment which includes the ownership, management, development, redevelopment, acquisition, and construction of multifamily apartment communities. Each of our operating properties is considered a separate operating segment as each property earns revenues and incurs expenses, individual operating results are reviewed and discrete financial information is available. We do not distinguish or group our consolidated operations based on geography, size or type. Our multifamily apartment communities have similar long-term economic characteristics and provide similar products and services to our residents. Further, all material operations are within the United States and no multifamily apartment community comprises more than 10% of consolidated revenues. As a result, our operating properties are aggregated into a single reportable segment. Our multifamily communities generate property revenue through the leasing of apartment homes, which comprised approximately 99% of our total property revenues and total non-property income, excluding income (loss) on deferred compensation plans, for each of the years ended December 31, 2019, 2018, and 2017.
Restricted Cash. Restricted cash consists of escrow deposits held by lenders for property taxes, insurance and replacement reserves, cash required to be segregated for the repayment of residents’ security deposits, and escrowed amounts related to our development and acquisition activities. Substantially all restricted cash is invested in demand and short-term instruments.
Share-based Compensation. Compensation expense associated with share-based awards is recognized in our consolidated statements of income and comprehensive income using the grant-date fair values. Compensation cost for all share-based awards, including options, requires measurement at estimated fair value on the grant date and recognition of compensation expense over the requisite service period for awards expected to vest. The fair value of stock option grants is estimated using the Black-Scholes valuation model. Valuation models require the input of assumptions, including judgments to estimate the expected stock price volatility, expected life, and forfeiture rate. The compensation cost for share-based awards is based on the market value of the shares on the date of grant and is adjusted as actual forfeitures occur.
Use of Estimates. In the application of GAAP, management is required to make estimates and assumptions which affect the reported amounts of assets and liabilities at the date of the financial statements, results of operations during the reporting periods,
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and related disclosures. Our more significant estimates include estimates supporting our impairment analysis related to the carrying values of our real estate assets. These estimates are based on historical experience and other assumptions believed to be reasonable under the circumstances. Future events rarely develop exactly as forecasted, and the best estimates routinely require adjustment.
Recent Accounting Pronouncements. In August 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-15, "Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract." ASU 2018-15 aligns the accounting for costs incurred to implement a cloud computing arrangement which is a service arrangement with the guidance on capitalizing costs associated with developing or obtaining internal-use software. ASU 2018-15 is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. This standard may be applied using the prospective transition method which is applicable to costs for activities on service contracts entered, renewed, materially modified, or performed after the effective date or the retrospective transition method which allows us to recognize a cumulative effect adjustment to the opening balance of retained earnings, if any, as of the adoption date. We adopted as of January 1, 2020, using the prospective transition method and will present future qualified capitalizable costs relating to new completed cloud computing arrangements which are service arrangements as prepaid assets within other assets on our consolidated balance sheets, as cash flows from operating activities on our consolidated statement of cash flows, and the associated amortization as general and administrative expenses on our consolidated statements of income and comprehensive income. Our adoption of ASU 2018-15 will not have a material impact on our consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, "Leases." ASU 2016-02 and its related amendments codify ASC 842 and provides new guidance for accounting for leases. We adopted ASC 842 as of January 1, 2019 using the transition method which allows us to recognize a cumulative-effect adjustment to the opening balance of retained earnings as of the adoption date and to initially apply the new lease standard to leases which existed as of January 1, 2019. Upon our adoption of ASC 842, as a lessee we recorded a right-of-use asset and a corresponding liability in our consolidated balance sheet, as a lessor we now present combined lease and non-lease components as a single component in our consolidated statement of income and comprehensive income, and this ASU did not have an impact on the opening balance of retained earnings as of the adoption date. In addition to the transition practical expedient, we elected other practical expedients during our adoption of the new lease standard. For both lessor and lessee contracts, we elected the practical expedient package to not reassess: (i) whether any expired or existing contract was a lease or contained a lease, (ii) the lease classification of any expired or existing leases, and (iii) the accounting for initial direct costs for any existing leases.
As a lessor, we also elected practical expedients to:
| • | not separate the lease and non-lease components by class of underlying assets and account for the combined components as a single component under certain conditions, and |
| • | exclude from lease revenues the sales taxes collected from lessees and certain lessor costs paid directly by the lessee (as of the date of adoption, we did not have material sales tax collected from customers or lessor costs paid by customers). |
As a lessee, we also elected the practical expedients to:
| • | use hindsight to determine lease terms and impairment of the right-of-use assets for existing lease contracts, |
| • | not separate lease and non-lease components by class of underlying asset when certain conditions are met which is consistent with our current accounting, and |
| • | not recognize short-term lease contracts with a duration of 12 months or less (short-term leases) in our consolidated balance sheet. |
We earn income from the leasing of our owned real estate properties which is considered our only lessor underlying asset class. Substantially all of our real estate lessor commitments will continue to be accounted for as operating leases and the new leasing standard did not have a material impact on our property revenues. As a lessee, we enter into lease contracts to facilitate the operations and needs of our business and our operating leases primarily consist of our office facility leases which are considered our only lessee underlying asset class. Our lessee operating lease commitments are subject to this standard and recognized as operating lease liabilities and right-of-use assets upon adoption. See above "Income Recognition," as it relates to our lessor leases and Note 14, "Commitments and Contingencies" as it relates to our lessee leases for additional disclosures required by ASC 842.
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3. Per Share Data
Basic earnings per share are computed using net income attributable to common shareholders and the weighted average number of common shares outstanding. Diluted earnings per share reflect common shares issuable from the assumed conversion of common share options and share awards granted and units convertible into common shares. Only those items having a dilutive impact on our basic earnings per share are included in diluted earnings per share. Our unvested share-based awards are considered participating securities and are reflected in the calculation of basic and diluted earnings per share using the two-class method. The number of common share equivalent securities excluded from the diluted earnings per share calculation was approximately 1.1 million, 2.1 million, and 1.5 million for the years ended December 31, 2019, 2018, and 2017, respectively. These securities, which include common share options and share awards granted and units convertible into common shares, were excluded from the diluted earnings per share calculation as they are anti-dilutive.
The following table presents information necessary to calculate basic and diluted earnings per share for the periods indicated:
| Year Ended December 31, | ||||||||||||
| (in thousands, except per share amounts) | 2019 | 2018 | 2017 | |||||||||
| Earnings per common share calculation – basic | ||||||||||||
| Income from continuing operations attributable to common shareholders | $ | 219,623 | $ | 156,128 | $ | 196,422 | ||||||
| Amount allocated to participating securities | (539 | ) | (1,107 | ) | (660 | ) | ||||||
| Net income attributable to common shareholders – basic | $ | 219,084 | $ | 155,021 | $ | 195,762 | ||||||
| Total earnings per common share – basic | $ | 2.23 | $ | 1.63 | $ | 2.14 | ||||||
| Weighted average number of common shares outstanding – basic | 98,460 | 95,208 | 91,499 |
| Earnings per common share calculation – diluted | ||||||||||||
| Income from continuing operations attributable to common shareholders, net of amount allocated to participating securities | $ | 219,084 | $ | 155,021 | $ | 195,762 | ||||||
| Income allocated to common units from continuing operations | 1,593 | — | 1,174 | |||||||||
| Net income attributable to common shareholders – diluted | $ | 220,677 | $ | 155,021 | $ | 196,936 | ||||||
| Total earnings per common share – diluted | $ | 2.22 | $ | 1.63 | $ | 2.13 | ||||||
| Weighted average number of common shares outstanding – basic | 98,460 | 95,208 | 91,499 | |||||||||
| Incremental shares issuable from assumed conversion of: | ||||||||||||
| Common share options and share awards granted | 119 | 158 | 211 | |||||||||
| Common units | 805 | — | 805 | |||||||||
| Weighted average number of common shares outstanding – diluted | 99,384 | 95,366 | 92,515 |
4. Common Shares
In May 2017, we created an at-the market ("ATM") share offering program through which we can, but have no obligation to, sell common shares having an aggregate offering price of up to $315.3 million (the "2017 ATM program"), in amounts and at times as we determine, into the existing trading market at current market prices as well as through negotiated transactions. Actual sales from time to time may depend on a variety of factors including, among others, market conditions, the trading price of our common shares, and determinations by management of the appropriate sources of funding for us. The proceeds from the sale of our common shares under the 2017 ATM program are intended to be used for general corporate purposes, which may include reducing future borrowings under our unsecured line of credit, the repayment of other indebtedness, the redemption or other repurchase of outstanding debt or equity securities, funding for development activities, and financing for acquisitions.
For the year ended December 31, 2018, we did not sell any shares under the 2017 ATM program. The following table presents activity under the 2017 ATM program for the years ended December 31, 2019 and 2017:
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| Year Ended December 31, | |||||||
| (in thousands, except per share amounts) | 2019 | 2017 | |||||
| Total net consideration | $ | 24,839.1 | $ | 2,513.6 | |||
| Common shares sold | 224.3 | 28.1 | |||||
| Average price per share | $ | 111.88 | $ | 90.44 |
As of the date of this filing, we had common shares having an aggregate offering price of up to $287.7 million remaining available for sale under the 2017 ATM program. No additional shares were sold under the 2017 ATM program subsequent to December 31, 2019 through the date of this filing.
We have a repurchase plan approved by our Board of Trust Managers which allows for the repurchase of up to $500 million of our common equity securities through open market purchases, block purchases, and privately negotiated transactions. For the year ended December 31, 2018, we repurchased 3,222 common shares for approximately $0.3 million. There were no repurchases under this program for the years ended December 31, 2017 or 2019 or through the date of this filing. The remaining dollar value of our common equity securities authorized to be repurchased under the program was approximately $269.5 million as of the date of this filing.
We currently have an automatic shelf registration statement which allows us to offer, from time to time, common shares, preferred shares, debt securities, or warrants. Our Amended and Restated Declaration of Trust provides we may issue up to 185 million shares of beneficial interest, consisting of 175 million common shares and 10 million preferred shares. At December 31, 2019, we had approximately 97.2 million common shares outstanding, net of treasury shares and shares held in our deferred compensation arrangements, and no preferred shares outstanding. In February 2019, we issued approximately 3.4 million common shares in an underwritten equity offering and received approximately $328.4 million in net proceeds, which we used to acquire one operating property in Scottsdale, Arizona, and repay amounts on our unsecured line of credit and certain secured conventional mortgage debt.
In the first quarter of 2020, the Company's Board of Trust Managers declared a first quarter dividend of $0.83 per common share to our common shareholders of record as of March 31, 2020.
5. Operating Partnerships
At December 31, 2019, approximately 4% of our consolidated multifamily apartment homes were held in Camden Operating, L.P. (“Camden Operating” or the “operating partnership”). Camden Operating has 11.9 million outstanding common limited partnership units and as of December 31, 2019, we held approximately 92% of the outstanding common limited partnership units and the sole 1% general partnership interest of the operating partnership. The remaining common limited partnership units, comprising approximately 0.8 million units, are primarily held by former officers, directors, and investors of Paragon Group, Inc., which we acquired in 1997. Each common limited partnership unit is redeemable for one common share of Camden Property Trust or cash at our election. Holders of common limited partnership units are not entitled to rights as shareholders prior to redemption of their common limited partnership units. No member of our management owns Camden Operating common limited partnership units.
At December 31, 2019, approximately 32% of our consolidated multifamily apartment homes were held in Camden Summit Partnership, L.P. (the “Camden Summit Partnership”). Camden Summit Partnership has 22.8 million outstanding common limited partnership units and as of December 31, 2019, we held approximately 95% of the outstanding common limited partnership units and the sole 1% general partnership interest of Camden Summit Partnership. The remaining common limited partnership units, comprising approximately 0.9 million units, are primarily held by former officers, directors, and investors of Summit Properties Inc., which we acquired in 2005. Each common limited partnership unit is redeemable for one common share of Camden Property Trust or cash at our election and holders of common limited partnership units are not entitled to rights as shareholders prior to redemption of their common limited partnership units. No member of our management owns Camden Summit Partnership common limited partnership units, and two of our trust managers own Camden Summit Partnership common limited partnership units.
We made no material changes to any operating partnership agreements during the year ended December 31, 2019. During 2018, we entered into an agreement with certain holders of common units of limited partnership interest in the Camden Summit Partnership, which holders included two of our Trust Managers. This agreement modifies the original terms of the Tax Protection Agreement dated February 28, 2005 which states the Camden Summit Partnership must maintain a certain amount of secured debt until February 28, 2020 to protect the negative tax capital of the unitholders or reimburse the unitholders for income taxes incurred from the repayment of this indebtedness. Pursuant to this 2018 agreement, Camden Summit Partnership issued $100.0 million of unsecured debt with an unrelated third party which was guaranteed by Camden Property Trust. Additionally, each such unitholder agreed to indemnify Camden Property Trust for their portion of the unsecured debt equal to the amount of income and gain which would be required to be recognized by the unitholder due to their negative tax capital account; the indemnities are for
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a one-year period with an annual October 15 renewal right. These amounts were approximately $21.2 million in the aggregate for the two Trust Managers which are holders of common units of limited partner interest in Camden Summit Partnership. In return, Camden Summit Partnership agreed to extend the duration of the Tax Protection Agreement for two years for each year such unitholder's indemnification agreement remains in place.
6. Income Taxes
We have maintained and intend to maintain our election as a REIT under the Internal Revenue Code of 1986, as amended. In order for us to continue to qualify as a REIT we must meet a number of organizational and operational requirements, including a requirement to distribute annual dividends to our shareholders equal to a minimum of 90% of our adjusted taxable income. As a REIT, we generally will not be subject to federal income tax on our taxable income at the corporate level to the extent such income is distributed to our shareholders annually. If our taxable income exceeds our dividends in a tax year, REIT tax rules allow us to designate dividends from the subsequent tax year in order to avoid current taxation on undistributed income. If we fail to qualify as a REIT in any taxable year, we may be subject to federal and state income taxes for such year. In addition, we may not be able to requalify as a REIT for the four subsequent taxable years and may be subject to federal and state income taxes in those years as well. Historically, we have incurred only state and local income, franchise, and excise taxes. Taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to applicable federal, state, and local income taxes. Our operating partnerships are flow-through entities and are not subject to federal income taxes at the entity level.
We have recorded income, franchise, and excise taxes in the consolidated statements of income and comprehensive income for the years ended December 31, 2019, 2018 and 2017 as income tax expense. Income taxes for the years ended December 31, 2019, 2018 and 2017, primarily related to state income tax and federal taxes on certain of our taxable REIT subsidiaries. We have no significant temporary or permanent differences or tax credits associated with our taxable REIT subsidiaries.
For income tax purposes, distributions to common shareholders are characterized as ordinary income, capital gains or as a return of a shareholder's invested capital. A summary of the income tax characterization of our distributions paid per common share for the years ended December 31, 2019, 2018 and 2017 is set forth in the following table:
| Year Ended December 31, | ||||||||||||
| 2019 | 2018 | 2017 | ||||||||||
| Common Share Distributions | ||||||||||||
| Ordinary income | $ | 2.53 | $ | 2.99 | $ | 2.38 | ||||||
| Long-term capital gain | 0.46 | 0.09 | 0.41 | |||||||||
| Unrecaptured Sec. 1250 gain | 0.21 | — | 0.21 | |||||||||
| Total | $ | 3.20 | $ | 3.08 | $ | 3.00 |
We have taxable REIT subsidiaries which are subject to federal and state income taxes. At December 31, 2019, our taxable REIT subsidiaries had immaterial net operating loss carryforwards (“NOL’s”) related to 2017 and prior which expire in years 2034 to 2037 and no benefits related to these NOL’s have been recognized in our consolidated financial statements. For any post 2017 NOL's, the NOL can be carried forward indefinitely, however, usage of the NOL is limited to 80% of any year's taxable income.
The carrying value of net assets reported in our consolidated financial statements at December 31, 2019 exceeded the tax basis by approximately $1.3 billion.
Income Tax Expense. We had income tax expense of approximately $1.1 million, $1.4 million and $1.2 million for the tax years ended December 31, 2019, 2018 and 2017, respectively, which was comprised mainly of state income tax and federal income tax related to one of our taxable REIT subsidiaries.
Income Tax Expense – Deferred. For the years ended December 31, 2019, 2018, and 2017, our deferred tax expense was not significant.
The income tax returns of Camden Property Trust and its subsidiaries are subject to examination by federal, state and local tax jurisdictions for years 2016 through 2018. Tax attributes generated in years prior to 2016 are also subject to challenge in any examination of those tax years. We believe we have no uncertain tax positions or unrecognized tax benefits requiring disclosure as of and for the periods presented.
Tax reform. The 2017 Tax Act was passed on December 22, 2017 which includes a number of changes to the corporate income tax system, including but not limited to a reduction in the statutory federal corporate income tax rate from 35% to 21% for non-REIT “C” corporations, changes to deductions for certain pass-through business income, and possible limitations on interest expense, depreciation and the deductibility of executive compensation. As a REIT, we generally will not be subject to
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federal income tax on our taxable income at the corporate level and the changes from the 2017 Tax Act did not have a material impact on our consolidated financial statements.
7. Acquisitions and Dispositions
Asset Acquisition of Operating Properties. In December 2019, we acquired one operating property comprised of 186 apartment homes in Raleigh, North Carolina for approximately $75.1 million, and one operating property comprised of 552 apartment homes in Houston, Texas for approximately $147.2 million. In May 2019, we acquired one operating property comprised of 326 apartment homes located in Austin, Texas for approximately $120.4 million. In February 2019, we acquired one operating property comprised of 316 apartment homes located in Scottsdale, Arizona for approximately $97.1 million.
In September 2018, we acquired one operating property comprised of 299 apartment homes located in Orlando, Florida, for approximately $89.8 million. In February 2018, we acquired one operating property comprised of 333 apartment homes located in Orlando, Florida, for approximately $81.4 million. In January 2018, we acquired one operating property comprised of 358 apartment homes located in St. Petersburg, Florida, for approximately $126.9 million. In June 2017, we acquired one operating property comprised of 250 apartment homes, located in Atlanta, Georgia, for approximately $58.3 million.
Acquisitions of Land. In connection with the acquisition of the operating property in Houston, Texas in December 2019, we acquired approximately 2.3 acres of land adjacent to the operating property for approximately $8.0 million for the future development of approximately 300 apartment homes. In May 2019, we acquired approximately 11.6 acres of land in Tempe, Arizona for approximately $18.0 million for the development of approximately 400 apartment homes. In April 2019, we acquired approximately 4.3 acres of land in Charlotte, North Carolina for approximately $10.9 million for the development of approximately 400 apartment homes. During the year ended December 31, 2018, we acquired approximately 1.8 acres of land in Orlando, Florida for approximately $11.4 million for the development of a community with 360 apartment homes. During the year ended December 31, 2017, we acquired approximately 8.2 acres of land in San Diego, California for approximately $20.0 million for the development of approximately 132 apartment homes.
In January 2020, we acquired 4.9 acres of land in Raleigh, North Carolina for approximately $18.2 million for the future development of approximately 355 apartment homes.
Land Holding Dispositions. During the year ended December 31, 2018, we sold approximately 14.1 acres of land adjacent to two development properties in Phoenix, Arizona for approximately $11.5 million. We did not sell any land during the years ended December 31, 2019 or 2017.
Sale of Operating Properties. During the year ended December 31, 2019, we sold our remaining three operating properties in Corpus Christi, Texas. The operating properties sold included two consolidated communities comprised of 632 apartment homes and one joint venture community comprised of 270 apartment homes. The total net proceeds recognized from the disposition of the two consolidated communities was approximately $69.4 million and we recognized a gain of approximately $49.9 million. See Note 8, "Investments in Joint Ventures" for further discussion of the joint venture community. We did not sell any operating properties during the year ended December 31, 2018. During the year ended December 31, 2017, we sold one operating property, comprised of 1,005 apartment homes, located in Corpus Christi, Texas for approximately $78.4 million and recognized a gain of approximately $43.2 million.
8. Investments in Joint Ventures
Our equity investments in unconsolidated joint ventures, which we account for utilizing the equity method of accounting, consists of three funds (collectively, the "Funds"). At December 31, 2019, 2018, and 2017, we had two discretionary investment funds in which we had an ownership interest of 31.3% in each of these funds. In March 2015, we completed the formation of a third fund with an unaffiliated third party for additional multifamily investments of up to $450.0 million. In June 2019, we amended the third fund's agreement, among other things, to reduce the investments from $450.0 million to approximately $360.0 million and increase our ownership interest from 20% to 40%. This third fund did not own any properties in 2019, 2018, or 2017. We provide property and asset management and other services to the Funds which own operating properties and we may also provide construction and development services to the Funds which own properties under development. The following table summarizes the combined balance sheet and statement of income data for the Funds as of and for the periods presented:
| (in millions) | 2019 | 2018 | |||||
| Total assets | $ | 685.0 | $ | 695.2 | |||
| Total third-party debt | 496.9 | 510.7 | |||||
| Total equity | 153.4 | 158.4 |
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| 2019 | 2018 | 2017 | |||||||||
| Total revenues | $ | 131.7 | $ | 127.4 | $ | 121.9 | |||||
| Gain on sale of operating property (1) | 19.8 | — | — | ||||||||
| Net income (2) | 37.5 | 16.4 | 13.5 | ||||||||
| Equity in income (3) (4) | 14.8 | 7.8 | 6.8 |
| (1) | In December 2019, one of the funds sold one operating property comprised of 270 apartment homes for approximately $38.5 million*.* |
| (2) | Net income for the year ended December 31, 2017 includes approximately $1.3 million of property expense relating to Hurricanes Harvey and Irma in the third quarter of 2017. |
| (3) | Equity in income excludes our ownership interest of fee income from various services provided by us to the Funds. |
| (4) | Equity in income for the year ended December 31, 2019 includes our ownership interest of the gain on sale of the operating property of approximately $6.2 million*. Equity in income for the year ended December 31, 2017 includes our ownership interest of the hurricane related insurance recoveries and expenses of approximately* $0.4 million*.* |
The Funds in which we have a partial interest have been funded in part with secured third-party debt. As of December 31, 2019, we had no outstanding guarantees related to debt of the Funds.
We may earn fees for property and asset management, construction, development, and other services related to joint ventures in which we own an equity interest and may earn a promoted equity interest if certain thresholds are met. We eliminate fee income for services provided to these joint ventures to the extent of our ownership. Fees earned for these services, net of eliminations, were approximately $6.8 million, $5.7 million, and $5.8 million for the years ended December 31, 2019, 2018, and 2017, respectively.
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9. Notes Payable
The following is a summary of our indebtedness:
| December 31, | ||||||||
| (in millions) | 2019 | 2018 | ||||||
| Commercial banks | ||||||||
| Unsecured credit facility | $ | 44.0 | $ | — | ||||
| 2.70% Term loan, due 2022 | 99.7 | 99.6 | ||||||
| $ | 143.7 | $ | 99.6 | |||||
| Senior unsecured notes (1) | ||||||||
| 4.78% Notes, due 2021 | $ | — | $ | 249.1 | ||||
| 3.15% Notes, due 2022 | 348.0 | 347.3 | ||||||
| 5.07% Notes, due 2023 | 248.4 | 248.0 | ||||||
| 4.36% Notes, due 2024 | 249.0 | 248.7 | ||||||
| 3.68% Notes, due 2024 | 248.0 | 247.6 | ||||||
| 3.74% Notes, due 2028 | 396.7 | 396.1 | ||||||
| 3.67% Notes, due 2029 | 593.7 | — | ||||||
| 3.41% Notes, due 2049 | 296.6 | — | ||||||
| $ | 2,380.4 | $ | 1,736.8 | |||||
| Total unsecured notes payable | $ | 2,524.1 | $ | 1,836.4 | ||||
| Secured notes | ||||||||
| 4.38% Conventional Mortgage Loan, due 2045 | $ | — | $ | 45.9 | ||||
| 5.19% Conventional Mortgage Notes, due 2019 | — | 419.9 | ||||||
| 5.33% Conventional Mortgage Loan, due 2019 | — | 19.4 | ||||||
| $ | — | $ | 485.2 | |||||
| Total notes payable (1) | $ | 2,524.1 | $ | 2,321.6 | ||||
| Value of real estate assets, at cost, subject to secured notes | $ | — | $ | 867.9 |
| (1) | Unamortized debt discounts and debt issuance costs of $19.9 million and $13.9 million are included in senior unsecured and secured notes payable as of December 31, 2019 and 2018*, respectively.* |
In March 2019, we amended and restated our $600 million unsecured credit facility to, among other things, extend the maturity date from August 2019 to March 2023, with two options to further extend the facility at our election for two additional six month periods, and increase the facility from $600 million to $900 million, which may be expanded three times by up to an additional $500 million upon satisfaction of certain conditions. The interest rate on our unsecured credit facility is based upon the London Interbank Offered Rate ("LIBOR") plus a margin which is subject to change as our credit ratings change. Advances under our credit facility may be priced at the scheduled rates, or we may enter into bid rate loans with participating banks at rates below the scheduled rates. These bid rate loans have terms of 180 days or less and may not exceed the lesser of $450 million or the remaining amount available under our credit facility. Our credit facility is subject to customary financial covenants and limitations. We believe we are in compliance with all such financial covenants and limitations as of December 31, 2019 through the date of this filing.
Our credit facility provides us with the ability to issue up to $50 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding under our credit facility, it does reduce the amount available. At December 31, 2019, we had approximately $44.0 million of borrowings outstanding on our $900 million credit facility and we had outstanding letters of credit totaling approximately $8.9 million, leaving approximately $847.1 million available under our credit facility.
In the first quarter of 2019, we repaid approximately $439.3 million of secured conventional mortgage debt utilizing our unsecured credit facility and proceeds from our equity offering completed in February 2019.
In June 2019, we issued $600.0 million aggregate principal amount of 3.150% senior unsecured notes due July 1, 2029 (the "2029 Notes") under our existing shelf registration statement. The 2029 Notes were offered to the public at 99.751% of their face amount with a stated rate of 3.150% and a yield to maturity of 3.179%. In anticipation of the offering of the 2029 Notes, we
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initiated forward interest rate swap agreements with an aggregate notional amount of $300.0 million. After giving effect to the settlement of the swap agreements, which will be recognized over the first seven years of the 2029 Notes as discussed below in Note 10, "Derivative Financial Instruments and Hedging Activities," and deducting the underwriting discounts and other estimated expenses of the offering, the effective annual interest rate on the 2029 Notes is approximately 3.84% through June 2026, and approximately 3.28% thereafter, for an all-in average effective rate of approximately 3.67%. We received net proceeds of approximately $593.4 million, net of underwriting discounts and other estimated offering expenses. Interest on the 2029 Notes is payable semi-annually on January 1 and July 1, beginning January 1, 2020. We may redeem the 2029 Notes, in whole or in part, at any time at a redemption price equal to the principal amount and accrued interest of the notes being redeemed plus a make-whole provision. If, however, we redeem the 2029 Notes 90 days or fewer prior to the maturity date, the redemption price will equal 100% of the principal amount of the 2029 Notes to be redeemed plus accrued and unpaid interest on the amount being redeemed to the redemption date. The 2029 Notes are direct, senior unsecured obligations and rank equally with all of our other unsecured and unsubordinated indebtedness. We used the proceeds from the offering of the 2029 Notes to repay outstanding balances on our unsecured line of credit in June 2019, the prepayment of secured debt in late October 2019 (discussed below) and for general corporate purposes which included property development, capital expenditures, and working capital.
In October 2019, we issued $300.0 million aggregate principal amount of 3.350% senior unsecured notes due November 1, 2049 (the "2049 Notes") under our existing shelf registration statement. The 2049 Notes were offered to the public at 99.941% of their face amount with a stated rate of 3.350% and a yield to maturity of 3.353%. We received net proceeds of approximately $296.6 million, net of underwriting discounts and other estimated offering expenses. After giving effect to net underwriting discounts and other estimated offering expenses, the effective annual interest rate on the 2049 Notes is approximately 3.41%. Interest on the 2049 Notes is payable semi-annually on May 1 and November 1, beginning May 1, 2020. We may redeem the 2049 Notes, in whole or in part, at any time at a redemption price equal to the principal amount and accrued interest of the notes being redeemed, plus a make-whole provision. If, however, we redeem the 2049 Notes within six months of the maturity date, the redemption price will equal 100% of the principal amount of the 2049 Notes to be redeemed plus accrued and unpaid interest on the amount being redeemed to the redemption date. The 2049 Notes are direct, senior unsecured obligations and rank equally with all of our other unsecured and unsubordinated indebtedness.
In October 2019, we used the net proceeds from the 2049 Notes, together with cash on hand, to fund the early redemption of all of the $250 million aggregate principal amount of our 4.78% effective rate Senior Notes due 2021, plus a make-whole premium and accrued and unpaid interest to the date of redemption, and to prepay all of the approximately $45.3 million aggregate principal amount of our 4.38% secured conventional mortgage note due 2045, plus a prepayment premium and interest to the date of repayment. In connection with these transactions, we recorded an approximate $12 million loss on early retirement of debt in the fourth quarter of 2019.
At December 31, 2019, we had $143.7 million outstanding floating rate debt, which included amounts borrowed under our unsecured credit facility, with a weighted average interest rate of approximately 2.7%. At December 31, 2018, we had outstanding floating rate debt of approximately $99.6 million with a weighted average interest rate of approximately 3.3%.
Our indebtedness, which includes our unsecured credit facility, had a weighted average maturity of 8.9 years at December 31, 2019. The table below is a summary of the maturity dates of our outstanding debt and principal amortizations, and the weighted average interest rates on such debt, at December 31, 2019:
| (in millions) (1) | Amount (2) | Weighted Average Interest Rate (3) | |||||
| 2020 | $ | (3.1 | ) | — | % | ||
| 2021 | (3.1 | ) | — | ||||
| 2022 | 447.0 | 3.1 | |||||
| 2023 | 247.9 | 5.1 | |||||
| 2024 (4) | 542.6 | 3.9 | |||||
| Thereafter | 1,292.8 | 3.7 | |||||
| Total | $ | 2,524.1 | 3.8 | % |
| (1) | Includes all available extension options. |
| (2) | Includes amortization of debt discounts and debt issuance costs. |
| (3) | Includes the effects of the applicable settled forward interest rate swaps. |
| (4) | Includes $44.0 million of borrowings outstanding under our unsecured credit facility. |
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10. Derivative Financial Instruments and Hedging Activities
Risk Management Objective of Using Derivatives. We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we may enter into derivative financial instruments to manage exposures arising from business activities resulting in differences in the amount, timing, and duration of our known or expected cash payments principally related to our borrowings. See Note 2, "Summary of Significant Accounting Policies and Recent Accounting Pronouncements" for a further discussion of derivative financial instruments.
Cash Flow Hedges of Interest Rate Risk. Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps and caps as part of our interest rate risk management strategy. Interest rate swaps involve the receipt of variable rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps involve the receipt of variable rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an upfront premium.
Designated Hedges. The gain or loss on the derivatives designated and qualifying as cash flow hedges is reported as a component of other comprehensive income or loss and subsequently reclassified into earnings in the period the hedged forecasted transaction affects earnings and presented in the same line item as the earnings effect of the hedged item.
In connection with the 2029 Notes issued in June 2019, we settled all of our remaining outstanding forward interest rate swaps with a total notional value of $300.0 million resulting in a net cash payment of approximately $20.4 million. Amounts in other comprehensive income associated with the settled forward interest rate swaps will be reclassified to interest expense over the first seven years of the 2029 Notes. In connection with the 2028 Notes issued in October 2018, we settled forward interest rate swaps with a total notional value of $400.0 million resulting in a net cash receipt of approximately $15.9 million. Amounts in other comprehensive income associated with the settled forward interest rate swaps will be reclassified to interest expense over the life of the 2028 Notes. At December 31, 2019, we had no designated hedges outstanding. At December 31, 2018, we had a total of two designated hedges outstanding with a total notional value of $300.0 million to hedge a portion of anticipated future fixed rate debt issuances in 2019.
Non-Designated Hedges. Derivatives are not entered into for trading or speculative purposes and are used to manage our exposure to interest rate movements and other identified risks. Our non-designated hedges are either specifically non-designated by management or do not meet strict hedge accounting requirements. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings in interest and other income. At December 31, 2019 and 2018, we did not have any non-designated hedges outstanding.
The table below presents the fair value of our derivative financial instruments as well as their classification in the consolidated balance sheets at December 31, 2019 and 2018:
| Asset Derivatives | Liability Derivatives | ||||||||||||||||||||||
| December 31, 2019 | December 31, 2018 | December 31, 2019 | December 31, 2018 | ||||||||||||||||||||
| (in millions) | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||||
| Derivatives Designated as Hedging Instruments | |||||||||||||||||||||||
| Interest Rate Swaps | Other Assets | $ | — | Other Assets | $ | — | Other Liabilities | $ | — | Other Liabilities | $ | 7.4 |
The table below presents the effect of our derivative financial instruments in the consolidated statements of income and comprehensive income for the year ended December 31, 2019 and 2018:
| (in millions) | Unrealized Gain (Loss) Recognized in Other Comprehensive Income (“OCI”) on Derivatives | Location of Gain Reclassified from Accumulated OCI into Income | Amount of Gain Reclassified from Accumulated OCI into Income | |||||||||||||||||||||||
| Derivatives in Cash Flow Hedging Relationships | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||||
| Interest Rate Swaps | $ | (13.0 | ) | $ | 6.8 | $ | 1.7 | Interest expense | $ | 0.1 | $ | 0.4 | $ | — |
As of December 31, 2019, the amount we expect to be reclassified into earnings in the next 12 months as an increase to interest expense is approximately $1.3 million.
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11. Share-based Compensation and Benefit Plans
Incentive Compensation. We currently maintain the 2018 Share Incentive Plan (the “2018 Share Plan”) and the 2011 Share Incentive Plan (the “2011 Share Plan”), although no new awards may be granted under the 2011 Plan. Each of these plans were approved by the Company’s shareholders. The shares available for awards under the 2018 Share Plan are, subject to certain other limits under the plan, generally available for any type of award authorized under the 2018 Share Plan, including stock options, stock appreciation rights, restricted stock awards, stock bonuses and other stock-based awards. Persons eligible to receive awards under the 2018 Share Plan include officers and employees of the Company or any of its subsidiaries, Trust Managers of the Company, and certain consultants and advisors to the Company or any of its subsidiaries. A total of 9.7 million shares (“Share Limit”) was authorized under the 2018 Share Plan. Shares issued or to be issued are counted against the Share Limit as set forth as (1) 3.45 to 1.0 for every share award, excluding stock options and share appreciation rights, granted, and (2) 1.0 to 1.0 for every share of stock option or share appreciation right granted. As of December 31, 2019, there were approximately 7.6 million common shares available under the 2018 Share Plan, which would result in approximately 2.2 million shares which could be granted pursuant to full value awards conversion ratios as defined under the plan.
Total compensation cost for option and share awards charged against income was approximately $16.8 million, $17.8 million, and $18.8 million for 2019, 2018 and 2017, respectively. Total capitalized compensation cost for option and share awards was approximately $3.4 million, $3.0 million, and $3.8 million for the years ended December 31, 2019, 2018, and 2017, respectively.
A summary of activity under our share incentive plans for the year ended December 31, 2019 is shown below:
| Nonvested Share Awards Outstanding | Weighted Average Exercise / Grant Price | ||||||
| Nonvested share awards outstanding at December 31, 2018 | 390,681 | $ | 79.82 | ||||
| Granted | 199,957 | 98.84 | |||||
| Exercised/Vested | (308,514 | ) | 82.65 | ||||
| Forfeited | (17,470 | ) | 86.64 | ||||
| Total nonvested share awards outstanding at December 31, 2019 | 264,654 | $ | 90.44 |
Options. Stock options other than reload options have a contractual life of ten years and vest over periods up to three years. Reload options vest at the grant date. Reload options are granted for the number of shares tendered as payment for the exercise price upon the exercise of an option with a reload provision. The reload options granted had an exercise price equal to the fair market value of a common share on the date of grant and expired on the same date as the original options which were exercised. None of our current incentive compensation plans carry reload option rights, and all of our obligations relating to reload options have been satisfied as of December 31, 2018. Expense for stock options is based on grant date fair value and recognized on a straight-line method over the vesting period.
We estimate the fair values of each option award on the date of grant using the Black-Scholes option pricing model. There were no options granted in December 31, 2019. The weighted-average fair value of reload stock options granted during the years ended December 31, 2018 and 2017 and the weighted-average assumptions for such grants were as follows:
| Year Ended December 31, 2018 | Year Ended December 31, 2017 | |||
| Weighted average fair value of options granted | $4.11 | $5.25 | ||
| Expected volatility | 15.1% | 18.9% | ||
| Risk-free interest rate | 2.0% | 1.3% | ||
| Expected dividend yield | 3.3% | 5.5% | ||
| Expected life | 1 year | 2 years |
Our computations of expected volatility for 2018 and 2017 were based on the historical volatility of our common shares over a time period equal to the expected life of the option and ending on the grant date, and the interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield on our common shares was based on the historical dividend yield over the expected term of the options granted. Our computation of expected life was based upon historical experience of similar awards, giving consideration to the contractual terms of the share-based awards.
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The total intrinsic value of options exercised was approximately $2.0 million and $2.2 million during the years ended December 31, 2018 and 2017, respectively. At December 31, 2019, there was no unrecognized compensation cost related to unvested options and there were no options outstanding.
Share Awards and Vesting. Share awards for employees generally vest over three years and are valued at the market value of the shares on the grant date. In the event the holder of the share awards attains at least age 65, and with respect to employees, also attain at least ten or more years of service ("Retirement Eligibility") before the term in which the awards are scheduled to vest, the value of the share awards is amortized from the date of grant to the individual's Retirement Eligibility date.
At December 31, 2019, 2018 and 2017, the weighted average fair value of share awards granted was $98.84, $82.81 and $83.41, respectively. The total fair value of shares vested during the years ended December 31, 2019, 2018 and 2017 was approximately $25.5 million, $24.0 million, and $23.1 million, respectively. At December 31, 2019, the unamortized value of previously issued unvested share awards was approximately $13.5 million which is expected to be amortized over the next two years.
Employee Share Purchase Plan (“ESPP”). In May 2018, our shareholders approved the 2018 Employee Share Purchase Plan (the "2018 ESPP") which amends and restates our 1999 Employee Share Purchase Plan (the "1999 ESPP") effective with the offering period commencing in June 2018. Under the 2018 ESPP, we may issue up to a total of approximately 500,000 common shares. The 2018 ESPP permits eligible employees to purchase our common shares either through payroll deductions or through semi-annual contributions. Each offering period has a six month duration commencing in June and December for which shares may be purchased at 85% of the market value, as defined on the first or last day of the offering period, whichever price is lower. We currently use treasury shares to satisfy ESPP share requirements. Each participant must hold the shares purchased for nine months in order to receive the discount, and a participant may not purchase more than $25,000 in value of shares during any plan year, as defined. The following table presents information related to our ESPP:
| 2019 | 2018 | 2017 | |||||||||
| Shares purchased | 22,032 | 15,330 | 18,986 | ||||||||
| Weighted average fair value of shares purchased | $ | 105.93 | $ | 90.93 | $ | 89.89 | |||||
| Expense recorded (in millions) | $ | 0.4 | $ | 0.2 | $ | 0.3 |
Rabbi Trust. We established a rabbi trust for a select group of participants in which share awards granted under the share incentive plan and salary and other cash amounts earned may be deposited. The rabbi trust is only in use for deferrals made prior to 2005, including bonuses related to service in 2004 but paid in 2005. The rabbi trust is an irrevocable trust and no portion of the trust fund may be used for any purpose other than the delivery of those assets to the participants. The assets held in the rabbi trust are subject to the claims of our general creditors in the event of bankruptcy or insolvency.
The value of the assets of the rabbi trust is consolidated into our financial statements. Granted share awards held by the rabbi trust are classified in equity in a manner similar to the manner in which treasury stock is accounted. Subsequent changes in the fair value of the shares are not recognized. The deferred compensation obligation is classified as an equity instrument and changes in the fair value of the amount owed to the participant are not recognized. At December 31, 2019 and 2018, approximately 1.4 million and 1.7 million share awards, respectively were held in the rabbi trust. Additionally, as of December 31, 2019 and 2018, the rabbi trust held trading securities totaling approximately $12.5 million and $14.9 million, respectively, which represents cash deferrals made by plan participants. Market value fluctuations on these trading securities are recognized in income in accordance with GAAP and the liability due to participants is adjusted accordingly.
At December 31, 2019 and 2018, approximately $17.3 million and $21.2 million, respectively, was required to be paid to us by plan participants upon the withdrawal of any assets from the rabbi trust, and is included in “Accounts receivable-affiliates” in our consolidated financial statements.
Non-Qualified Deferred Compensation. In 2004, we established a Non-Qualified Deferred Compensation Plan which is an unfunded arrangement established and maintained primarily for the benefit of a select group of participants. Eligible participants commence participation in this plan on the date the deferral election first becomes effective. We credit to the participant's account an amount equal to the amount designated as the participant's deferral for the plan year as indicated in the participant's deferral election(s). Any modification to or termination of the plan will not reduce a participant's right to any vested amounts already credited to his or her account. Approximately 0.8 million and 0.7 million share awards were held in the plan at December 31, 2019 and 2018, respectively. Additionally, as of December 31, 2019 and 2018, the plan held trading securities totaling approximately $139.3 million and $129.8 million, respectively, which represents cash deferrals made by plan participants and diversification of share awards within the plan to trading securities. Market value fluctuations on these trading securities are recognized in income in accordance with GAAP and the liability due to participants is adjusted accordingly. The assets held in the Non-Qualified Deferred Compensation Plan are subject to the claims of our general creditors in the event of bankruptcy or insolvency.
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Balances within temporary equity in our consolidated balance sheets related to fully vested awards and the proportionate share of nonvested awards of participants within our Non-Qualified Deferred Compensation Plan who were permitted to diversify their shares into other equity securities subject to a six-month holding period. In December 2018, the plan was amended and restated and effective January 1, 2019 participants in the Non-Qualified Deferred Compensation Plan were no longer able to diversify their common shares; accordingly, the fully vested share awards and the proportionate share of nonvested share awards previously eligible for diversification were reclassified on the effective date from temporary equity into additional paid-in capital in our consolidated balance sheet.
The following table summarizes the eligible share award activity for the years ended December 31, 2018 and 2017:
| (in thousands) | 2018 | 2017 | ||||||
| Temporary equity: | ||||||||
| Balance at beginning of period | $ | 77,230 | $ | 77,037 | ||||
| Change in classification | 16,407 | 13,388 | ||||||
| Change in redemption value | (669 | ) | 10,038 | |||||
| Diversification of share awards (429 shares during December 31, 2018) | (40,294 | ) | (23,233 | ) | ||||
| Balance at December 31 | $ | 52,674 | $ | 77,230 |
401(k) Savings Plan. We have a 401(k) savings plan, which is a voluntary defined contribution plan, which provides participating employees the ability to elect to contribute up to 60 percent of eligible compensation, subject to limitations as defined by the federal tax code, with the Company making matching contributions up to a predetermined limit. The matching contributions made for the years ended December 31, 2019, 2018, and 2017 were approximately $3.1 million, $2.9 million, and $2.7 million, respectively. Employees become vested in our matching contributions 33% after one year of service, 67% after two years of service and 100% after three years of service.
12. Fair Value Measurements
Recurring Fair Value Disclosures. The following table presents information about our financial instruments measured at fair value on a recurring basis as of December 31, 2019 and 2018 using the inputs and fair value hierarchy discussed in Note 2, “Summary of Significant Accounting Policies and Recent Accounting Pronouncements”:
Financial Instruments Measured at Fair Value on a Recurring Basis
| December 31, 2019 | December 31, 2018 | ||||||||||||||||||||||||||||||
| (in millions) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | |||||||||||||||||||||||
| Other Assets | |||||||||||||||||||||||||||||||
| Deferred compensation plan investments (1) | $ | 151.8 | $ | — | $ | — | $ | 151.8 | $ | 144.7 | $ | — | $ | — | $ | 144.7 | |||||||||||||||
| Other Liabilities | |||||||||||||||||||||||||||||||
| Derivative financial instruments - forward interest rate swaps | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 7.4 | $ | — | $ | 7.4 |
| (1) | Approximately $18.0 million and $12.7 million of participant cash was withdrawn from our deferred compensation plan investments during the years ended December 31, 2019 and 2018*, respectively. Approximately* $40.3 million of shares within the deferred compensation plan were diversified into other deferred compensation plan investments during the year ended 2018. |
Nonrecurring Fair Value Disclosures. The nonrecurring fair value disclosures inputs under the fair value hierarchy are discussed in Note 2, “Summary of Significant Accounting Policies and Recent Accounting Pronouncements.” We completed four asset acquisitions of operating properties during the year ended December 31, 2019 and three asset acquisitions of operating properties during the year ended December 31, 2018. We recorded the real estate assets and identifiable above and below market and in-place leases at their relative fair values based upon methods similar to those used by independent appraisers of income producing properties. The fair value measurements associated with the valuation of these acquired assets represent Level 3 measurements within the fair value hierarchy. See Note 7, "Acquisitions and Dispositions" for a further discussion about these acquisitions.
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Financial Instrument Fair Value Disclosures. The following table presents the carrying and estimated fair values of our notes payable at December 31, 2019 and 2018, in accordance with the policies discussed in Note 2, "Summary of Significant Accounting Policies and Recent Accounting Pronouncements."
| December 31, 2019 | December 31, 2018 | ||||||||||||||
| (in millions) | Carrying Value | Estimated Fair Value | Carrying Value | Estimated Fair Value | |||||||||||
| Fixed rate notes payable | $ | 2,380.4 | $ | 2,533.5 | $ | 2,222.0 | $ | 2,265.4 | |||||||
| Floating rate notes payable (1) | 143.7 | 143.8 | 99.6 | 99.4 |
| (1) | Includes balances outstanding under our unsecured credit facility at December 31, 2019. |
13. Net Change in Operating Accounts
The effect of changes in the operating accounts and other on cash flows from operating activities is as follows:
| Year Ended December 31, | |||||||||||
| (in thousands) | 2019 | 2018 | 2017 | ||||||||
| Change in assets: | |||||||||||
| Other assets, net | $ | (6,976 | ) | $ | 10,364 | $ | (6,724 | ) | |||
| Change in liabilities: | |||||||||||
| Accounts payable and accrued expenses | 19,713 | (4,133 | ) | (2,300 | ) | ||||||
| Accrued real estate taxes | (1,014 | ) | 1,910 | 2,342 | |||||||
| Other liabilities | 23,119 | (1,486 | ) | (995 | ) | ||||||
| Other | 3,252 | 2,898 | 2,831 | ||||||||
| Change in operating accounts and other | $ | 38,094 | $ | 9,553 | $ | (4,846 | ) |
14. Commitments and Contingencies
Construction Contracts. As of December 31, 2019, we estimate the additional cost to complete the seven consolidated projects currently under construction to be approximately $358.6 million. We expect to fund this amount through a combination of one or more of the following: cash flows generated from operations, draws on our unsecured credit facility, the use of debt and equity offerings under our automatic shelf registration statement, proceeds from property dispositions, equity issued from our ATM programs, other unsecured borrowings or secured mortgages.
Litigation. We are subject to various legal proceedings and claims which arise in the ordinary course of business. Matters which arise out of allegations of bodily injury, property damage, and employment practices are generally covered by insurance. While the resolution of these legal proceedings and claims cannot be predicted with certainty, management believes the final outcome of such matters will not have a material adverse effect on our consolidated financial statements.
Other Commitments and Contingencies. In the ordinary course of our business, we issue letters of intent indicating a willingness to negotiate for acquisitions, dispositions, or joint ventures and also enter into arrangements contemplating various transactions. Such letters of intent and other arrangements are non-binding as to either party unless and until a definitive contract is entered into by the parties. Even if definitive contracts relating to the purchase or sale of real property are entered into, these contracts generally provide the purchaser with time to evaluate the property and conduct due diligence, during which periods the purchaser will have the ability to terminate the contracts without penalty or forfeiture of any deposit or earnest money. There can be no assurance definitive contracts will be entered into with respect to any matter covered by letters of intent or we will consummate any transaction contemplated by any definitive contract. Furthermore, due diligence periods for real property are frequently extended as needed. An acquisition or sale of real property becomes probable at the time the due diligence period expires and the definitive contract has not been terminated. We are then at risk under a real property acquisition contract, but generally only to the extent of any earnest money deposits associated with the contract, and are obligated to sell under a real property sales contract. At December 31, 2019, we had approximately $0.9 million in refundable earnest money deposits for potential acquisitions of operating properties and land and are included in other assets, net in our consolidated balance sheet. Of this $0.9 million in refundable earnest money deposits, approximately $0.2 million was related to the acquisition of land in Raleigh, North Carolina which was completed in January 2020.
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Lease Commitments. Substantially all of our operating leases recorded in our consolidated balance sheets at January 1, 2019 upon adoption of ASC 842 are related to office facility leases. The lease and non-lease components are accounted for as a combined single component based upon the standalone price at the time the applicable lease is commenced and is recognized as a lease expense on a straight-line basis over the lease term. Most of our office facility leases include options to renew and generally are not included in the operating lease liabilities or right-of-use ("ROU") assets as they are not reasonably certain of being exercised. If an option to renew is exercised, it would be considered a separate contract and recognized based upon the standalone price at the time the option to renew is exercised. Variable lease payments which values are not known at lease commencement, such as executory costs of real estate taxes, property insurance, and common area maintenance, are expensed as incurred.
As of December 31, 2019, we had no significant leases executed but not yet commenced and did not record any impairment charges related to our ROU assets. The following is a summary of our operating lease related information:
| ($ in millions) | As of | |||||
| Balance sheet | Classification | December 31, 2019 | ||||
| Right-of-use assets, net | Other assets, net | $ | 10.6 | |||
| Operating lease liabilities | Other liabilities | $ | 15.0 |
| ($ in millions) | Year ended | |||||
| Statement of income and comprehensive income | Classification | December 31, 2019 | ||||
| Rent expense related to operating lease liabilities | General and administrative expenses and property management expenses | $ | 2.9 | |||
| Variable lease expense | General and administrative expenses and property management expenses | $ | 1.4 |
| ($ in millions) | Year ended | |||||
| Statement of cash flows | Classification | December 31, 2019 | ||||
| Cash flows from operating leases | Net cash from operating activities | $ | 3.1 | |||
| Supplemental lease information | ||||||
| Weighted average remaining lease term (years) | 5.3 | |||||
| Weighted average discount rate - operating leases (1) | 4.9 | % |
| (1) | We use a secured incremental borrowing rate, as defined by ASC 842 based on an estimated secured rate with applicable adjustments, as most of our lease contracts do not provide a readily determinable implicit rate. |
The following is a summary of our maturities of our lease liabilities as of December 31, 2019:
| (in millions) | |||
| Year ended December 31, | Operating Leases | ||
| 2020 | $ | 3.4 | |
| 2021 | 3.2 | ||
| 2022 | 2.9 | ||
| 2023 | 2.7 | ||
| 2024 | 2.8 | ||
| Thereafter | 2.1 | ||
| Less: discount for time value | (2.1 | ) | |
| Lease liability as of December 31, 2019 | $ | 15.0 |
Prior to our adoption of ASU 2016-12, rental expense for the years ended December 31, 2018 and 2017 were approximately $3.8 million and $4.0 million, respectively. Minimum annual rental commitments as of December 31, 2018 for the years ending December 31, 2019 through 2023 were approximately $2.9 million, $3.0 million, $3.1 million, $2.7 million and $2.6 million, respectively, and approximately $4.5 million in the aggregate thereafter.
Investments in Joint Ventures. We have entered into, and may continue in the future to enter into, joint ventures or partnerships (including limited liability companies) through which we own an indirect economic interest in less than 100% of the community or land owned directly by the joint venture or partnership. Our decision whether to hold the entire interest in an apartment community or land ourselves, or to have an indirect interest in the community or land through a joint venture or partnership, is based on a variety of factors and considerations, including: (i) our projection, in some circumstances, that we will achieve higher returns on
F-28
our invested capital or reduce our risk if a joint venture or partnership vehicle is used; (ii) our desire to diversify our portfolio of investments by market; (iii) our desire at times to preserve our capital resources to maintain liquidity or balance sheet strength; and (iv) the economic and tax terms required by a seller of land or of a community, who may prefer or who may require less payment if the land or community is contributed to a joint venture or partnership. Investments in joint ventures or partnerships are not limited to a specified percentage of our assets. Each joint venture or partnership agreement is individually negotiated, and our ability to operate or dispose of land or of a community in our sole discretion may be limited to varying degrees in our existing joint venture agreements and may be limited to varying degrees depending on the terms of future joint venture agreements.
Employment Agreements. At December 31, 2019, we had employment agreements with 13 of our senior officers, the terms of which expire at various times through August 20, 2020. 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 plus a gross-up payment if certain situations occur, such as termination without cause or a change of control. In the case of 10 of the agreements, the severance payment equals one times the respective current annual base salary in the case of termination without cause and 2.99 times the respective average annual base salary over the previous three fiscal years in the case of a change of control and a termination of employment or a material adverse change in the scope of their duties. In the case of one agreement, the severance payment equals one times the respective current annual base salary for termination without cause and 2.99 times the greater of current gross income or average gross income over the previous three fiscal years in the case of a change of control. In the case of the other two agreements, the severance payment generally equals 2.99 times the respective average annual compensation over the previous three fiscal years in connection with, among other things, a termination without cause or a change of control, and the officer would be entitled to receive continuation and vesting of certain benefits in the case of such termination.
15. Quarterly Financial Data (unaudited)
Summarized quarterly financial data for the years ended December 31, 2019 and 2018, is as follows:
| (in thousands, except per share amounts) | First | Second | Third | Fourth | Total (a) | ||||||||||||||
| 2019: | |||||||||||||||||||
| Revenues | $ | 248,567 | $ | 255,761 | $ | 260,672 | $ | 263,461 | $ | 1,028,461 | |||||||||
| Net income attributable to common shareholders | 38,613 | 42,399 | 43,597 | 95,014 | (b) | 219,623 | |||||||||||||
| Total earnings per share – basic | 0.40 | 0.43 | 0.44 | 0.96 | (b) | 2.23 | |||||||||||||
| Total earnings per share – diluted | 0.40 | 0.43 | 0.44 | 0.95 | (b) | 2.22 | |||||||||||||
| 2018: | |||||||||||||||||||
| Revenues | $ | 230,683 | $ | 237,133 | $ | 241,770 | $ | 244,919 | $ | 954,505 | |||||||||
| Net income attributable to common shareholders | 39,395 | 38,671 | 38,866 | 39,196 | 156,128 | ||||||||||||||
| Total earnings per share – basic | 0.41 | 0.40 | 0.41 | 0.41 | 1.63 | ||||||||||||||
| Total earnings per share – diluted | 0.41 | 0.40 | 0.40 | 0.41 | 1.63 |
| (a) | Net income per share is computed independently for each of the quarters presented. Therefore, the sum of quarterly net income per share amounts may not equal the total computed for the year. |
| (b) | Includes a $11,995 or $0.12 basic and diluted per share, impact related to the loss on early retirement of debt in October 2019. Also includes a $49,901 or $0.50 basic and $0.49 diluted per share, impact related to a gain on sale of two consolidated operating properties. |
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| Camden Property Trust Real Estate and Accumulated Depreciation As of December 31, 2019 (in thousands) | Schedule III | ||||||||||||||||||||||||||||||||
| Initial Cost | Total Cost | ||||||||||||||||||||||||||||||||
| Land | Building/ Construction in Progress & Improvements | Cost Subsequent to Acquisition/ Construction | Land | Building/ Construction in Progress & Improvements | Total | Accumulated Depreciation | Total Cost, Net of Accumulated Depreciation | Year of Completion/ Acquisition | |||||||||||||||||||||||||
| Current communities (1): | |||||||||||||||||||||||||||||||||
| ARIZONA | |||||||||||||||||||||||||||||||||
| Phoenix/Scottsdale | |||||||||||||||||||||||||||||||||
| Camden Chandler | $ | 5,511 | $ | 62,429 | $ | 353 | $ | 5,511 | $ | 62,782 | $ | 68,293 | $ | 11,766 | $ | 56,527 | 2016 | ||||||||||||||||
| Camden Copper Square | 4,825 | 23,672 | 8,859 | 4,825 | 32,531 | 37,356 | 20,332 | 17,024 | 2000 | ||||||||||||||||||||||||
| Camden Foothills | 11,006 | 33,712 | 328 | 11,006 | 34,040 | 45,046 | 7,454 | 37,592 | 2014 | ||||||||||||||||||||||||
| Camden Hayden | 9,248 | 35,254 | 262 | 9,248 | 35,516 | 44,764 | 7,259 | 37,505 | 2015 | ||||||||||||||||||||||||
| Camden Legacy | 4,068 | 26,612 | 18,905 | 4,068 | 45,517 | 49,585 | 28,933 | 20,652 | 1998 | ||||||||||||||||||||||||
| Camden Montierra | 13,687 | 31,727 | 5,891 | 13,687 | 37,618 | 51,305 | 10,733 | 40,572 | 2012 | ||||||||||||||||||||||||
| Camden North End | 16,108 | 82,620 | 68 | 16,108 | 82,688 | 98,796 | 8,346 | 90,450 | 2019 | ||||||||||||||||||||||||
| Camden Old Town Scottsdale | 23,227 | 71,784 | 1,832 | 23,227 | 73,616 | 96,843 | 4,211 | 92,632 | 2019 | ||||||||||||||||||||||||
| Camden Pecos Ranch | 3,362 | 24,492 | 6,044 | 3,362 | 30,536 | 33,898 | 10,541 | 23,357 | 2012 | ||||||||||||||||||||||||
| Camden San Marcos | 11,520 | 35,166 | 6,441 | 11,520 | 41,607 | 53,127 | 12,171 | 40,956 | 2012 | ||||||||||||||||||||||||
| Camden San Paloma | 6,480 | 23,045 | 11,173 | 6,480 | 34,218 | 40,698 | 19,292 | 21,406 | 2002 | ||||||||||||||||||||||||
| Camden Sotelo | 3,376 | 30,576 | 1,665 | 3,376 | 32,241 | 35,617 | 7,522 | 28,095 | 2013 | ||||||||||||||||||||||||
| CALIFORNIA | |||||||||||||||||||||||||||||||||
| Los Angeles/Orange County | |||||||||||||||||||||||||||||||||
| Camden Crown Valley | 9,381 | 54,210 | 11,280 | 9,381 | 65,490 | 74,871 | 37,277 | 37,594 | 2001 | ||||||||||||||||||||||||
| Camden Glendale | 21,492 | 96,158 | 180 | 21,492 | 96,338 | 117,830 | 17,563 | 100,267 | 2015 | ||||||||||||||||||||||||
| Camden Harbor View | 16,079 | 127,459 | 29,477 | 16,079 | 156,936 | 173,015 | 72,266 | 100,749 | 2003 | ||||||||||||||||||||||||
| Camden Main and Jamboree | 17,363 | 75,387 | 2,782 | 17,363 | 78,169 | 95,532 | 23,382 | 72,150 | 2008 | ||||||||||||||||||||||||
| Camden Martinique | 28,401 | 51,861 | 27,676 | 28,401 | 79,537 | 107,938 | 49,477 | 58,461 | 1998 | ||||||||||||||||||||||||
| Camden Sea Palms | 4,336 | 9,930 | 8,280 | 4,336 | 18,210 | 22,546 | 10,683 | 11,863 | 1998 | ||||||||||||||||||||||||
| The Camden | 18,286 | 118,730 | 337 | 18,286 | 119,067 | 137,353 | 18,101 | 119,252 | 2016 | ||||||||||||||||||||||||
| San Diego/Inland Empire | |||||||||||||||||||||||||||||||||
| Camden Landmark | 17,339 | 71,315 | 3,789 | 17,339 | 75,104 | 92,443 | 19,580 | 72,863 | 2012 | ||||||||||||||||||||||||
| Camden Old Creek | 20,360 | 71,777 | 9,397 | 20,360 | 81,174 | 101,534 | 32,105 | 69,429 | 2007 | ||||||||||||||||||||||||
| Camden Sierra at Otay Ranch | 10,585 | 49,781 | 10,662 | 10,585 | 60,443 | 71,028 | 29,713 | 41,315 | 2003 | ||||||||||||||||||||||||
| Camden Tuscany | 3,330 | 36,466 | 6,639 | 3,330 | 43,105 | 46,435 | 21,530 | 24,905 | 2003 | ||||||||||||||||||||||||
| Camden Vineyards | 4,367 | 28,494 | 5,189 | 4,367 | 33,683 | 38,050 | 18,091 | 19,959 | 2002 | ||||||||||||||||||||||||
| COLORADO | |||||||||||||||||||||||||||||||||
| Denver | |||||||||||||||||||||||||||||||||
| Camden Belleview Station | 8,091 | 44,003 | 5,790 | 8,091 | 49,793 | 57,884 | 12,182 | 45,702 | 2012 | ||||||||||||||||||||||||
| Camden Caley | 2,047 | 17,445 | 10,096 | 2,047 | 27,541 | 29,588 | 15,303 | 14,285 | 2000 | ||||||||||||||||||||||||
| Camden Denver West | $ | 6,396 | $ | 51,552 | $ | 12,633 | $ | 6,396 | $ | 64,185 | $ | 70,581 | $ | 16,661 | $ | 53,920 | 2012 | ||||||||||||||||
| Camden Flatirons | 6,849 | 72,631 | 855 | 6,849 | 73,486 | 80,335 | 15,824 | 64,511 | 2015 | ||||||||||||||||||||||||
| Camden Highlands Ridge | 2,612 | 34,726 | 22,996 | 2,612 | 57,722 | 60,334 | 31,611 | 28,723 | 1996 | ||||||||||||||||||||||||
| Camden Interlocken | 5,293 | 31,612 | 19,410 | 5,293 | 51,022 | 56,315 | 28,633 | 27,682 | 1999 | ||||||||||||||||||||||||
| Camden Lakeway | 3,915 | 34,129 | 26,754 | 3,915 | 60,883 | 64,798 | 34,940 | 29,858 | 1997 | ||||||||||||||||||||||||
| Camden Lincoln Station | 4,648 | 51,762 | 309 | 4,648 | 52,071 | 56,719 | 7,503 | 49,216 | 2017 | ||||||||||||||||||||||||
| WASHINGTON DC METRO | |||||||||||||||||||||||||||||||||
| Camden Ashburn Farm | 4,835 | 22,604 | 6,009 | 4,835 | 28,613 | 33,448 | 12,767 | 20,681 | 2005 | ||||||||||||||||||||||||
| Camden College Park | 16,409 | 91,503 | 7,579 | 16,409 | 99,082 | 115,491 | 28,675 | 86,816 | 2008 | ||||||||||||||||||||||||
| Camden Dulles Station | 10,807 | 61,548 | 9,357 | 10,807 | 70,905 | 81,712 | 24,907 | 56,805 | 2008 | ||||||||||||||||||||||||
| Camden Fair Lakes | 15,515 | 104,223 | 14,105 | 15,515 | 118,328 | 133,843 | 53,166 | 80,677 | 2005 | ||||||||||||||||||||||||
| Camden Fairfax Corner | 8,484 | 72,953 | 10,162 | 8,484 | 83,115 | 91,599 | 36,257 | 55,342 | 2006 | ||||||||||||||||||||||||
| Camden Fallsgrove | 9,408 | 43,647 | 6,107 | 9,408 | 49,754 | 59,162 | 23,071 | 36,091 | 2005 | ||||||||||||||||||||||||
| Camden Grand Parc | 7,688 | 35,900 | 3,891 | 7,688 | 39,791 | 47,479 | 17,257 | 30,222 | 2005 | ||||||||||||||||||||||||
| Camden Lansdowne | 15,502 | 102,267 | 26,380 | 15,502 | 128,647 | 144,149 | 55,180 | 88,969 | 2005 | ||||||||||||||||||||||||
| Camden Largo Town Center | 8,411 | 44,163 | 4,661 | 8,411 | 48,824 | 57,235 | 21,706 | 35,529 | 2005 | ||||||||||||||||||||||||
| Camden Monument Place | 9,030 | 54,089 | 7,618 | 9,030 | 61,707 | 70,737 | 23,110 | 47,627 | 2007 | ||||||||||||||||||||||||
| Camden NoMa | 19,442 | 82,306 | 405 | 19,442 | 82,711 | 102,153 | 20,114 | 82,039 | 2014 | ||||||||||||||||||||||||
| Camden NoMa II | 17,331 | 91,211 | 102 | 17,331 | 91,313 | 108,644 | 19,201 | 89,443 | 2017 | ||||||||||||||||||||||||
| Camden Potomac Yard | 16,498 | 88,317 | 11,856 | 16,498 | 100,173 | 116,671 | 35,674 | 80,997 | 2008 | ||||||||||||||||||||||||
| Camden Roosevelt | 11,470 | 45,785 | 5,669 | 11,470 | 51,454 | 62,924 | 21,963 | 40,961 | 2005 | ||||||||||||||||||||||||
| Camden Russett | 13,460 | 61,837 | 7,631 | 13,460 | 69,468 | 82,928 | 31,431 | 51,497 | 2005 | ||||||||||||||||||||||||
| Camden Shady Grove | 24,177 | 89,820 | 236 | 24,177 | 90,056 | 114,233 | 15,388 | 98,845 | 2018 | ||||||||||||||||||||||||
| Camden Silo Creek | 9,707 | 45,301 | 8,646 | 9,707 | 53,947 | 63,654 | 22,983 | 40,671 | 2005 | ||||||||||||||||||||||||
| Camden Washingtonian | 13,512 | 75,134 | 38 | 13,512 | 75,172 | 88,684 | 7,453 | 81,231 | 2018 | ||||||||||||||||||||||||
| FLORIDA | |||||||||||||||||||||||||||||||||
| Southeast Florida | |||||||||||||||||||||||||||||||||
| Camden Aventura | 12,185 | 47,616 | 14,567 | 12,185 | 62,183 | 74,368 | 30,092 | 44,276 | 2005 | ||||||||||||||||||||||||
| Camden Boca Raton | 2,201 | 50,057 | 435 | 2,201 | 50,492 | 52,693 | 10,690 | 42,003 | 2014 | ||||||||||||||||||||||||
| Camden Brickell | 14,621 | 57,031 | 32,064 | 14,621 | 89,095 | 103,716 | 36,848 | 66,868 | 2005 | ||||||||||||||||||||||||
| Camden Doral | 10,260 | 40,416 | 7,769 | 10,260 | 48,185 | 58,445 | 22,353 | 36,092 | 2005 | ||||||||||||||||||||||||
| Camden Doral Villas | 6,476 | 25,543 | 7,881 | 6,476 | 33,424 | 39,900 | 16,294 | 23,606 | 2005 | ||||||||||||||||||||||||
| Camden Las Olas | 12,395 | 79,518 | 28,185 | 12,395 | 107,703 | 120,098 | 44,737 | 75,361 | 2005 | ||||||||||||||||||||||||
| Camden Plantation | 6,299 | 77,964 | 13,767 | 6,299 | 91,731 | 98,030 | 41,354 | 56,676 | 2005 | ||||||||||||||||||||||||
| Camden Portofino | 9,867 | 38,702 | 10,387 | 9,867 | 49,089 | 58,956 | 22,310 | 36,646 | 2005 | ||||||||||||||||||||||||
| Orlando | |||||||||||||||||||||||||||||||||
| Camden Hunter's Creek | $ | 4,156 | $ | 20,925 | $ | 6,337 | $ | 4,156 | $ | 27,262 | $ | 31,418 | $ | 13,356 | $ | 18,062 | 2005 | ||||||||||||||||
| Camden Lago Vista | 3,497 | 29,623 | 6,301 | 3,497 | 35,924 | 39,421 | 17,112 | 22,309 | 2005 | ||||||||||||||||||||||||
| Camden LaVina | 12,907 | 42,617 | 1,306 | 12,907 | 43,923 | 56,830 | 13,395 | 43,435 | 2012 | ||||||||||||||||||||||||
| Camden Lee Vista | 4,350 | 34,643 | 11,443 | 4,350 | 46,086 | 50,436 | 26,129 | 24,307 | 2000 | ||||||||||||||||||||||||
| Camden North Quarter | 9,990 | 68,471 | 1,038 | 9,990 | 69,509 | 79,499 | 8,057 | 71,442 | 2018 | ||||||||||||||||||||||||
| Camden Orange Court | 5,319 | 40,733 | 3,813 | 5,319 | 44,546 | 49,865 | 17,210 | 32,655 | 2008 | ||||||||||||||||||||||||
| Camden Thornton Park | 11,711 | 74,628 | 764 | 11,711 | 75,392 | 87,103 | 5,843 | 81,260 | 2018 | ||||||||||||||||||||||||
| Camden Town Square | 13,127 | 45,997 | 1,093 | 13,127 | 47,090 | 60,217 | 13,085 | 47,132 | 2012 | ||||||||||||||||||||||||
| Camden World Gateway | 5,785 | 51,821 | 8,612 | 5,785 | 60,433 | 66,218 | 27,663 | 38,555 | 2005 | ||||||||||||||||||||||||
| Tampa/St. Petersburg | |||||||||||||||||||||||||||||||||
| Camden Bay | 7,450 | 63,283 | 23,090 | 7,450 | 86,373 | 93,823 | 47,472 | 46,351 | 1998/2002 | ||||||||||||||||||||||||
| Camden Montague | 3,576 | 16,534 | 785 | 3,576 | 17,319 | 20,895 | 5,376 | 15,519 | 2012 | ||||||||||||||||||||||||
| Camden Pier District | 16,704 | 105,383 | 1,271 | 16,704 | 106,654 | 123,358 | 12,714 | 110,644 | 2018 | ||||||||||||||||||||||||
| Camden Preserve | 1,206 | 17,982 | 11,267 | 1,206 | 29,249 | 30,455 | 18,995 | 11,460 | 1997 | ||||||||||||||||||||||||
| Camden Royal Palms | 2,147 | 38,339 | 4,283 | 2,147 | 42,622 | 44,769 | 17,259 | 27,510 | 2007 | ||||||||||||||||||||||||
| Camden Westchase Park | 11,955 | 36,254 | 825 | 11,955 | 37,079 | 49,034 | 10,626 | 38,408 | 2012 | ||||||||||||||||||||||||
| GEORGIA | |||||||||||||||||||||||||||||||||
| Atlanta | |||||||||||||||||||||||||||||||||
| Camden Brookwood | 7,174 | 31,984 | 10,702 | 7,174 | 42,686 | 49,860 | 20,559 | 29,301 | 2005 | ||||||||||||||||||||||||
| Camden Buckhead Square | 13,200 | 43,785 | 894 | 13,200 | 44,679 | 57,879 | 4,930 | 52,949 | 2017 | ||||||||||||||||||||||||
| Camden Creekstone | 5,017 | 19,912 | 5,492 | 5,017 | 25,404 | 30,421 | 7,137 | 23,284 | 2012 | ||||||||||||||||||||||||
| Camden Deerfield | 4,895 | 21,922 | 9,717 | 4,895 | 31,639 | 36,534 | 15,389 | 21,145 | 2005 | ||||||||||||||||||||||||
| Camden Dunwoody | 5,290 | 23,642 | 9,812 | 5,290 | 33,454 | 38,744 | 16,870 | 21,874 | 2005 | ||||||||||||||||||||||||
| Camden Fourth Ward | 10,477 | 51,258 | 1,621 | 10,477 | 52,879 | 63,356 | 11,789 | 51,567 | 2014 | ||||||||||||||||||||||||
| Camden Midtown Atlanta | 6,196 | 33,828 | 11,097 | 6,196 | 44,925 | 51,121 | 21,671 | 29,450 | 2005 | ||||||||||||||||||||||||
| Camden Paces | 15,262 | 102,521 | 1,218 | 15,262 | 103,739 | 119,001 | 22,448 | 96,553 | 2015 | ||||||||||||||||||||||||
| Camden Peachtree City | 6,536 | 29,063 | 8,323 | 6,536 | 37,386 | 43,922 | 17,992 | 25,930 | 2005 | ||||||||||||||||||||||||
| Camden Shiloh | 4,181 | 18,798 | 6,220 | 4,181 | 25,018 | 29,199 | 12,697 | 16,502 | 2005 | ||||||||||||||||||||||||
| Camden St. Clair | 7,526 | 27,486 | 8,316 | 7,526 | 35,802 | 43,328 | 18,251 | 25,077 | 2005 | ||||||||||||||||||||||||
| Camden Stockbridge | 5,071 | 22,693 | 5,281 | 5,071 | 27,974 | 33,045 | 13,537 | 19,508 | 2005 | ||||||||||||||||||||||||
| Camden Vantage | 11,787 | 68,822 | 7,354 | 11,787 | 76,176 | 87,963 | 17,762 | 70,201 | 2013 | ||||||||||||||||||||||||
| NORTH CAROLINA | |||||||||||||||||||||||||||||||||
| Charlotte | |||||||||||||||||||||||||||||||||
| Camden Ballantyne | $ | 4,503 | $ | 30,250 | $ | 9,801 | $ | 4,503 | $ | 40,051 | $ | 44,554 | $ | 20,131 | $ | 24,423 | 2005 | ||||||||||||||||
| Camden Cotton Mills | 4,246 | 19,147 | 7,548 | 4,246 | 26,695 | 30,941 | 13,703 | 17,238 | 2005 | ||||||||||||||||||||||||
| CoWork by Camden | 814 | 3,422 | 9 | 814 | 3,431 | 4,245 | 172 | 4,073 | 2019 | ||||||||||||||||||||||||
| Camden Dilworth | 516 | 16,633 | 3,421 | 516 | 20,054 | 20,570 | 8,836 | 11,734 | 2006 | ||||||||||||||||||||||||
| Camden Fairview | 1,283 | 7,223 | 4,639 | 1,283 | 11,862 | 13,145 | 6,692 | 6,453 | 2005 | ||||||||||||||||||||||||
| Camden Foxcroft | 1,408 | 7,919 | 4,898 | 1,408 | 12,817 | 14,225 | 7,103 | 7,122 | 2005 | ||||||||||||||||||||||||
| Camden Foxcroft II | 1,152 | 6,499 | 3,698 | 1,152 | 10,197 | 11,349 | 5,096 | 6,253 | 2005 | ||||||||||||||||||||||||
| Camden Gallery | 7,930 | 51,957 | 637 | 7,930 | 52,594 | 60,524 | 8,449 | 52,075 | 2017 | ||||||||||||||||||||||||
| Camden Grandview | 7,570 | 33,859 | 13,278 | 7,570 | 47,137 | 54,707 | 22,302 | 32,405 | 2005 | ||||||||||||||||||||||||
| Camden Grandview II | 4,617 | 17,852 | 26 | 4,617 | 17,878 | 22,495 | 1,120 | 21,375 | 2019 | ||||||||||||||||||||||||
| Camden Sedgebrook | 5,266 | 29,211 | 8,192 | 5,266 | 37,403 | 42,669 | 18,878 | 23,791 | 2005 | ||||||||||||||||||||||||
| Camden South End | 6,625 | 29,175 | 14,961 | 6,625 | 44,136 | 50,761 | 19,757 | 31,004 | 2005 | ||||||||||||||||||||||||
| Camden Stonecrest | 3,941 | 22,021 | 6,962 | 3,941 | 28,983 | 32,924 | 14,930 | 17,994 | 2005 | ||||||||||||||||||||||||
| Camden Touchstone | 1,203 | 6,772 | 3,807 | 1,203 | 10,579 | 11,782 | 5,818 | 5,964 | 2005 | ||||||||||||||||||||||||
| Raleigh | |||||||||||||||||||||||||||||||||
| Camden Carolinian | 14,765 | 56,674 | 39 | 14,765 | 56,713 | 71,478 | 267 | 71,211 | 2019 | ||||||||||||||||||||||||
| Camden Crest | 4,412 | 31,108 | 7,473 | 4,412 | 38,581 | 42,993 | 17,807 | 25,186 | 2005 | ||||||||||||||||||||||||
| Camden Governor's Village | 3,669 | 20,508 | 7,066 | 3,669 | 27,574 | 31,243 | 12,827 | 18,416 | 2005 | ||||||||||||||||||||||||
| Camden Lake Pine | 5,746 | 31,714 | 14,563 | 5,746 | 46,277 | 52,023 | 22,328 | 29,695 | 2005 | ||||||||||||||||||||||||
| Camden Manor Park | 2,535 | 47,159 | 11,213 | 2,535 | 58,372 | 60,907 | 24,147 | 36,760 | 2006 | ||||||||||||||||||||||||
| Camden Overlook | 4,591 | 25,563 | 10,347 | 4,591 | 35,910 | 40,501 | 18,586 | 21,915 | 2005 | ||||||||||||||||||||||||
| Camden Reunion Park | 3,302 | 18,457 | 11,358 | 3,302 | 29,815 | 33,117 | 14,502 | 18,615 | 2005 | ||||||||||||||||||||||||
| Camden Westwood | 4,567 | 25,519 | 9,115 | 4,567 | 34,634 | 39,201 | 16,292 | 22,909 | 2005 | ||||||||||||||||||||||||
| TEXAS | |||||||||||||||||||||||||||||||||
| Austin | |||||||||||||||||||||||||||||||||
| Camden Cedar Hills | 2,684 | 20,931 | 3,503 | 2,684 | 24,434 | 27,118 | 9,295 | 17,823 | 2008 | ||||||||||||||||||||||||
| Camden Gaines Ranch | 5,094 | 37,100 | 10,909 | 5,094 | 48,009 | 53,103 | 23,458 | 29,645 | 2005 | ||||||||||||||||||||||||
| Camden Huntingdon | 2,289 | 17,393 | 10,791 | 2,289 | 28,184 | 30,473 | 20,459 | 10,014 | 1995 | ||||||||||||||||||||||||
| Camden La Frontera | 3,250 | 32,376 | 543 | 3,250 | 32,919 | 36,169 | 7,610 | 28,559 | 2015 | ||||||||||||||||||||||||
| Camden Lamar Heights | 3,988 | 42,773 | 531 | 3,988 | 43,304 | 47,292 | 9,938 | 37,354 | 2015 | ||||||||||||||||||||||||
| Camden Rainey Street | 30,044 | 85,477 | 887 | 30,044 | 86,364 | 116,408 | 3,040 | 113,368 | 2019 | ||||||||||||||||||||||||
| Camden Stoneleigh | 3,498 | 31,285 | 8,966 | 3,498 | 40,251 | 43,749 | 19,167 | 24,582 | 2006 | ||||||||||||||||||||||||
| Dallas/Fort Worth | |||||||||||||||||||||||||||||||||
| Camden Addison | $ | 11,516 | $ | 29,332 | $ | 8,735 | $ | 11,516 | $ | 38,067 | $ | 49,583 | $ | 13,673 | $ | 35,910 | 2012 | ||||||||||||||||
| Camden Belmont | 12,521 | 61,522 | 6,530 | 12,521 | 68,052 | 80,573 | 17,987 | 62,586 | 2012 | ||||||||||||||||||||||||
| Camden Buckingham | 2,704 | 21,251 | 11,413 | 2,704 | 32,664 | 35,368 | 21,634 | 13,734 | 1997 | ||||||||||||||||||||||||
| Camden Centreport | 1,613 | 12,644 | 7,459 | 1,613 | 20,103 | 21,716 | 12,961 | 8,755 | 1997 | ||||||||||||||||||||||||
| Camden Cimarron | 2,231 | 14,092 | 8,406 | 2,231 | 22,498 | 24,729 | 16,936 | 7,793 | 1997 | ||||||||||||||||||||||||
| Camden Farmers Market | 17,341 | 74,193 | 28,144 | 17,341 | 102,337 | 119,678 | 54,327 | 65,351 | 2001/2005 | ||||||||||||||||||||||||
| Camden Henderson | 3,842 | 15,256 | 801 | 3,842 | 16,057 | 19,899 | 4,680 | 15,219 | 2012 | ||||||||||||||||||||||||
| Camden Legacy Creek | 2,052 | 12,896 | 7,420 | 2,052 | 20,316 | 22,368 | 14,235 | 8,133 | 1997 | ||||||||||||||||||||||||
| Camden Legacy Park | 2,560 | 15,449 | 8,588 | 2,560 | 24,037 | 26,597 | 16,591 | 10,006 | 1997 | ||||||||||||||||||||||||
| Camden Valley Park | 3,096 | 14,667 | 15,989 | 3,096 | 30,656 | 33,752 | 28,700 | 5,052 | 1994 | ||||||||||||||||||||||||
| Camden Victory Park | 13,445 | 71,735 | 391 | 13,445 | 72,126 | 85,571 | 12,393 | 73,178 | 2016 | ||||||||||||||||||||||||
| Houston | |||||||||||||||||||||||||||||||||
| Camden City Centre | 4,976 | 44,735 | 8,861 | 4,976 | 53,596 | 58,572 | 20,203 | 38,369 | 2007 | ||||||||||||||||||||||||
| Camden City Centre II | 5,101 | 28,131 | 576 | 5,101 | 28,707 | 33,808 | 8,299 | 25,509 | 2013 | ||||||||||||||||||||||||
| Camden Greenway | 16,916 | 43,933 | 21,492 | 16,916 | 65,425 | 82,341 | 42,848 | 39,493 | 1999 | ||||||||||||||||||||||||
| Camden Highland Village | 28,536 | 111,802 | 34 | 28,536 | 111,836 | 140,372 | 586 | 139,786 | 2019 | ||||||||||||||||||||||||
| Camden Holly Springs | 11,108 | 42,852 | 12,811 | 11,108 | 55,663 | 66,771 | 19,048 | 47,723 | 2012 | ||||||||||||||||||||||||
| Camden McGowen Station | 6,089 | 85,038 | 18 | 6,089 | 85,056 | 91,145 | 9,284 | 81,861 | 2018 | ||||||||||||||||||||||||
| Camden Midtown | 4,583 | 18,026 | 11,861 | 4,583 | 29,887 | 34,470 | 19,581 | 14,889 | 1999 | ||||||||||||||||||||||||
| Camden Oak Crest | 2,078 | 20,941 | 6,437 | 2,078 | 27,378 | 29,456 | 15,113 | 14,343 | 2003 | ||||||||||||||||||||||||
| Camden Park | 4,922 | 16,453 | 6,443 | 4,922 | 22,896 | 27,818 | 8,015 | 19,803 | 2012 | ||||||||||||||||||||||||
| Camden Plaza | 7,204 | 31,044 | 4,528 | 7,204 | 35,572 | 42,776 | 10,443 | 32,333 | 2007 | ||||||||||||||||||||||||
| Camden Post Oak | 14,056 | 92,515 | 19,339 | 14,056 | 111,854 | 125,910 | 27,955 | 97,955 | 2013 | ||||||||||||||||||||||||
| Camden Royal Oaks | 1,055 | 20,046 | 3,829 | 1,055 | 23,875 | 24,930 | 10,362 | 14,568 | 2006 | ||||||||||||||||||||||||
| Camden Royal Oaks II | 587 | 12,743 | 28 | 587 | 12,771 | 13,358 | 3,791 | 9,567 | 2012 | ||||||||||||||||||||||||
| Camden Stonebridge | 1,016 | 7,137 | 7,076 | 1,016 | 14,213 | 15,229 | 10,152 | 5,077 | 1993 | ||||||||||||||||||||||||
| Camden Sugar Grove | 7,614 | 27,594 | 5,004 | 7,614 | 32,598 | 40,212 | 9,840 | 30,372 | 2012 | ||||||||||||||||||||||||
| Camden Travis Street | 1,780 | 29,104 | 2,028 | 1,780 | 31,132 | 32,912 | 11,104 | 21,808 | 2010 | ||||||||||||||||||||||||
| Camden Vanderbilt | 16,076 | 44,918 | 26,933 | 16,076 | 71,851 | 87,927 | 49,883 | 38,044 | 1994/1997 | ||||||||||||||||||||||||
| Camden Whispering Oaks | 1,188 | 26,242 | 2,016 | 1,188 | 28,258 | 29,446 | 11,332 | 18,114 | 2008 | ||||||||||||||||||||||||
| Total current communities: | $ | 1,199,384 | $ | 6,275,187 | $ | 1,122,505 | $ | 1,199,384 | $ | 7,397,692 | $ | 8,597,076 | $ | 2,685,956 | $ | 5,911,120 | |||||||||||||||||
| Communities under construction: | |||||||||||||||||||||||||||||||||
| Name / location | |||||||||||||||||||||||||||||||||
| Camden Atlantic Plantation, FL | $ | 19,259 | $ | 19,259 | $ | 19,259 | $ | 19,259 | N/A | ||||||||||||||||||||||||
| Camden Buckhead Atlanta, GA | 55,166 | 55,166 | 55,166 | 55,166 | N/A | ||||||||||||||||||||||||||||
| Camden Downtown I Houston, TX | 123,465 | 123,465 | 123,465 | 48 | 123,417 | N/A | |||||||||||||||||||||||||||
| Camden Hillcrest San Diego, CA | 42,669 | 42,669 | 42,669 | 42,669 | N/A | ||||||||||||||||||||||||||||
| Camden Lake Eola Orlando, FL | 75,000 | 75,000 | 75,000 | 75,000 | N/A | ||||||||||||||||||||||||||||
| Camden North End II Phoenix, AZ | 31,350 | 31,350 | 31,350 | 31,350 | N/A | ||||||||||||||||||||||||||||
| Camden RiNo Denver, CO | 66,530 | 66,530 | 66,530 | $21 | 66,509 | N/A | |||||||||||||||||||||||||||
| Total communities under construction: | $ | — | $ | 413,439 | $ | — | $ | — | $ | 413,439 | $ | 413,439 | $ | 69 | $ | 413,370 | |||||||||||||||||
| Development pipeline communities: | |||||||||||||||||||||||||||||||||
| Name/location | |||||||||||||||||||||||||||||||||
| Camden Arts District Los Angeles, CA | $ | 26,888 | $ | 26,888 | $ | 26,888 | $ | 26,888 | N/A | ||||||||||||||||||||||||
| Camden Downtown II Houston, TX | 11,406 | 11,406 | 11,406 | 11,406 | N/A | ||||||||||||||||||||||||||||
| Camden Hayden II Phoenix, AZ | 22,004 | 22,004 | 22,004 | 22,004 | N/A | ||||||||||||||||||||||||||||
| Camden Highland Village II Houston, TX | 8,025 | 8,025 | 8,025 | 8,025 | N/A | ||||||||||||||||||||||||||||
| Camden NoDa Charlotte, NC | 14,748 | 14,748 | 14,748 | 14,748 | N/A | ||||||||||||||||||||||||||||
| Camden Paces III Atlanta, GA | 15,783 | 15,783 | 15,783 | 15,783 | N/A | ||||||||||||||||||||||||||||
| Total development pipeline communities: | $ | — | $ | 98,854 | $ | — | $ | — | $ | 98,854 | $ | 98,854 | $ | — | $ | 98,854 | |||||||||||||||||
| Corporate | 6,424 | — | 6,424 | 6,424 | 6,424 | N/A | |||||||||||||||||||||||||||
| $ | — | $ | 6,424 | $ | — | $ | — | $ | 6,424 | $ | 6,424 | $ | — | $ | 6,424 | ||||||||||||||||||
| TOTAL | $ | 1,199,384 | $ | 6,793,904 | $ | 1,122,505 | $ | 1,199,384 | $ | 7,916,409 | $ | 9,115,793 | $ | 2,686,025 | $ | 6,429,768 |
| (1) | All communities were unencumbered at December 31, 2019. |
S-1
| Camden Property Trust Real Estate and Accumulated Depreciation As of December 31, 2019 (in thousands) | Schedule III |
The changes in total real estate assets as adjusted for discontinued operations for the years ended December 31:
| 2019 | 2018 | 2017 | |||||||||
| Balance, beginning of period | $ | 8,328,475 | $ | 7,667,743 | $ | 7,376,690 | |||||
| Additions during period: | |||||||||||
| Acquisition of operating properties | 422,309 | 286,901 | 56,985 | ||||||||
| Development and repositions | 341,236 | 300,294 | 224,202 | ||||||||
| Improvements | 75,360 | 84,841 | 71,889 | ||||||||
| Deductions during period: | |||||||||||
| Cost of real estate sold – other | (51,587 | ) | (11,304 | ) | (62,023 | ) | |||||
| Balance, end of period | $ | 9,115,793 | $ | 8,328,475 | $ | 7,667,743 | |||||
| The changes in accumulated depreciation for the years ended December 31: | |||||||||||
| 2019 | 2018 | 2017 | |||||||||
| Balance, beginning of period | $ | 2,403,149 | $ | 2,118,839 | $ | 1,890,656 | |||||
| Depreciation of real estate assets | 317,026 | 284,310 | 255,924 | ||||||||
| Dispositions | (34,150 | ) | — | (27,741 | ) | ||||||
| Balance, end of period | $ | 2,686,025 | $ | 2,403,149 | $ | 2,118,839 |
The aggregate cost for federal income tax purposes at December 31, 2019 was $8.2 billion*.*
S-2
| Camden Property Trust Mortgage Loans on Real Estate As of December 31, 2019 | Schedule IV | |||||||||||||
| ($ in thousands) Description | Interest Rate | Final Maturity Date | Periodic payment terms | Face amount of mortgages | Carry amount of mortgages (a) | |||||||||
| Parking Garage Developer advances Houston, TX | (b) | October 1, 2025 | (c) | $ | 7,868 | $ | 7,868 |
| (a) | The aggregate cost at December 31, 2019 for federal income tax purposes was approximately $7,868*.* |
| (b) | This loan currently bears interest at 7% on any unpaid principal balance. |
| (c) | Payments will consist of annual interest and principal payments from October 1, 2019 to October 1, 2025*.* |
Changes in mortgage loans for the years ended December 31 are summarized below:
| 2019 | 2018 | 2017 | |||||||||
| Balance, beginning of period | $ | 9,314 | $ | 18,790 | $ | 17,224 | |||||
| Additions: | |||||||||||
| Advances under real estate loans | — | — | 1,566 | ||||||||
| Deductions: | |||||||||||
| Collections of principal and loan payoff | (1,446 | ) | (9,476 | ) | — | ||||||
| Balance, end of period | $ | 7,868 | $ | 9,314 | $ | 18,790 |
S-3
Previous: Item 15. Exhibits and Financial Statement Schedules