Camden Property Trust Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to _______________

Commission file number: 1-12110

CAMDEN PROPERTY TRUST

(Exact Name of Registrant as Specified in Its Charter)



TX			76-6088377
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

11 Greenway Plaza, Suite 2400	Houston,	TX	77046
(Address of principal executive offices)			(Zip Code)

(713) 354-2500

(Registrant's Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol	Name of each exchange on which registered
Common Shares of Beneficial Interest, $.01 par value	CPT	NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of "large accelerated filer", "accelerated filer", and "small reporting company" in Rule 12b-2 of the Exchange Act. (Check one):



Large Accelerated Filer	ý	Accelerated filer	¨

Non-accelerated filer	¨	Smaller Reporting Company	¨

		Emerging Growth Company	¨

If an emerging growth company, indicate by check mark if the registrant has elected to not use the extended transition period for complying with any new or revised financial accounting standards provided pursuant of Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

On July 24, 2020, 97,395,868 common shares of the registrant were outstanding, net of treasury shares and shares held in our deferred compensation arrangements.

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CAMDEN PROPERTY TRUST

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		Page
PART I	FINANCIAL INFORMATION	1

Item 1	Financial Statements	1

	Condensed Consolidated Balance Sheets (Unaudited) as of June 30, 2020 and December 31, 2019	1

	Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) for the Three and Six Months Ended June 30, 2020 and 2019	2

	Condensed Consolidated Statements of Equity (Unaudited) for the Three and Six Months Ended June 30, 2020 and 2019	3

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2020 and 2019	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3	Quantitative and Qualitative Disclosures About Market Risk	34

Item 4	Controls and Procedures	34

PART II	OTHER INFORMATION	35

Item 1	Legal Proceedings	35

Item 1A	Risk Factors	35

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 3	Defaults Upon Senior Securities	35

Item 4	Mine Safety Disclosures	35

Item 5	Other Information	35

Item 6	Exhibits	36

SIGNATURES

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



(in thousands, except per share amounts)	June 30, 2020			December 31, 2019
Assets
Real estate assets, at cost
Land	$	1,206,656		$	1,199,384
Buildings and improvements	7,597,165			7,404,090
	$	8,803,821		$	8,603,474
Accumulated depreciation	(2,857,124		)	(2,686,025		)
Net operating real estate assets	$	5,946,697		$	5,917,449
Properties under development, including land	514,336			512,319
Investments in joint ventures	21,735			20,688
Total real estate assets	$	6,482,768		$	6,450,456
Accounts receivable – affiliates	21,432			21,833
Other assets, net	211,823			248,716
Cash and cash equivalents	601,584			23,184
Restricted cash	4,093			4,315
Total assets	$	7,321,700		$	6,748,504
Liabilities and equity
Liabilities
Notes payable
Unsecured	$	3,224,871		$	2,524,099
Accounts payable and accrued expenses	167,453			171,719
Accrued real estate taxes	62,499			54,408
Distributions payable	84,138			80,973
Other liabilities	172,172			215,581
Total liabilities	$	3,711,133		$	3,046,780
Commitments and contingencies (Note 11)
Equity
Common shares of beneficial interest; $0.01 par value per share; 175,000 shares authorized; 109,110 and 109,110 issued; 106,844 and 106,878 outstanding at June 30, 2020 and December 31, 2019, respectively	1,068			1,069
Additional paid-in capital	4,574,387			4,566,731
Distributions in excess of net income attributable to common shareholders	(689,809		)	(584,167		)
Treasury shares, at cost (9,449 and 9,636 common shares at June 30, 2020 and December 31, 2019, respectively)	(341,637		)	(348,419		)
Accumulated other comprehensive loss	(5,797		)	(6,529		)
Total common equity	$	3,538,212		$	3,628,685
Non-controlling interests	72,355			73,039
Total equity	$	3,610,567		$	3,701,724
Total liabilities and equity	$	7,321,700		$	6,748,504

See Notes to Condensed Consolidated Financial Statements (Unaudited).

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CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

(Unaudited)



	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except per share amounts)	2020			2019			2020			2019
Property revenues	$	250,683		$	255,761		$	516,562		$	504,328
Property expenses
Property operating and maintenance	$	64,641		$	58,147		$	124,597		$	115,095
Real estate taxes	35,040			33,080			69,220			66,970
Total property expenses	$	99,681		$	91,227		$	193,817		$	182,065
Non-property income
Fee and asset management	$	2,380		$	1,867		$	4,907		$	3,710
Interest and other income	325			331			654			629
Income/(loss) on deferred compensation plans	11,435			3,856			(3,425		)	14,212
Total non-property income	$	14,140		$	6,054		$	2,136		$	18,551
Other expenses
Property management	$	5,939		$	6,093		$	12,466		$	12,750
Fee and asset management	820			1,522			1,663			2,706
General and administrative	14,391			13,261			27,624			26,569
Interest	23,482			19,349			43,189			39,819
Depreciation and amortization	92,803			84,646			184,662			164,920
Expense/(benefit) on deferred compensation plans	11,435			3,856			(3,425		)	14,212
Total other expenses	$	148,870		$	128,727		$	266,179		$	260,976
Gain on sale of land	—			—			382			—
Equity in income of joint ventures	1,633			1,909			3,755			3,821
Income from continuing operations before income taxes	$	17,905		$	43,770		$	62,839		$	83,659
Income tax expense	(394		)	(228		)	(861		)	(396		)
Net income	$	17,511		$	43,542		$	61,978		$	83,263
Less income allocated to non-controlling interests	(1,034		)	(1,143		)	(2,217		)	(2,251		)
Net income attributable to common shareholders	$	16,477		$	42,399		$	59,761		$	81,012



Earnings per share – basic	$	0.17		$	0.43		$	0.60		$	0.83
Earnings per share – diluted	$	0.17		$	0.43		$	0.60		$	0.82
Weighted average number of common shares outstanding – basic	99,399			98,903			99,348			97,903
Weighted average number of common shares outstanding – diluted	99,408			98,997			99,394			98,024
Condensed Consolidated Statements of Comprehensive Income
Net income	$	17,511		$	43,542		$	61,978		$	83,263
Other comprehensive income
Unrealized (loss) on cash flow hedging activities	—			(7,060		)	—			(12,998		)
Reclassification of net loss (gain) on cash flow hedging activities, prior service cost and net loss on post retirement obligation	366			(351		)	732			(726		)
Comprehensive income	$	17,877		$	36,131		$	62,710		$	69,539
Less income allocated to non-controlling interests	(1,034		)	(1,143		)	(2,217		)	(2,251		)
Comprehensive income attributable to common shareholders	$	16,843		$	34,988		$	60,493		$	67,288

See Notes to Condensed Consolidated Financial Statements (Unaudited).

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CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

For the six months ended June 30, 2020



	Common Shareholders
(in thousands)	Common shares of beneficial interest			Additional paid-in capital			Distributions in excess of net income			Treasury shares, at cost			Accumulated other comprehensive (loss)/income			Non-controlling interests			Total equity
Equity, December 31, 2019	$	1,069		$	4,566,731		$	(584,167	)	$	(348,419	)	$	(6,529	)	$	73,039		$	3,701,724
Net income							59,761									2,217			61,978
Other comprehensive income													732						732
Net share awards				7,146						6,379									13,525
Employee share purchase plan				640						403									1,043
Cash distributions declared to equity holders ($1.66 per common share)							(165,403		)							(2,901		)	(168,304		)
Other	(1		)	(130		)													(131		)
Equity, June 30, 2020	$	1,068		$	4,574,387		$	(689,809	)	$	(341,637	)	$	(5,797	)	$	72,355		$	3,610,567

See Notes to Condensed Consolidated Financial Statements (Unaudited).

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CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(Unaudited)

For the three months ended June 30, 2020



	Common Shareholders
(in thousands)	Common shares of beneficial interest			Additional paid-in capital			Distributions in excess of net income			Treasury shares, at cost			Accumulated other comprehensive (loss)/income			Non-controlling interests			Total equity
Equity, March 31, 2020	$	1,069		$	4,569,995		$	(623,570	)	$	(342,778	)	$	(6,163	)	$	72,771		$	3,671,324
Net income							16,477									1,034			17,511
Other comprehensive income													366						366
Net share awards				3,940						738									4,678
Employee share purchase plan				558						403									961
Cash distributions declared to equity holders ($0.83 per common share)							(82,716		)							(1,450		)	(84,166		)
Other	(1		)	(106		)													(107		)
Equity, June 30, 2020	$	1,068		$	4,574,387		$	(689,809	)	$	(341,637	)	$	(5,797	)	$	72,355		$	3,610,567

See Notes to Condensed Consolidated Financial Statements (Unaudited).

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CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

For the six months ended June 30, 2019



	Common Shareholders
(in thousands)	Common shares of beneficial interest		Additional paid-in capital		Distributions in excess of net income			Treasury shares, at cost			Accumulated other comprehensive loss			Non-controlling interests			Total equity
Equity, December 31, 2018	$	1,031	$	4,154,763	$	(495,496	)	$	(355,804	)	$	6,929		$	73,681		$	3,385,104
Net income					81,012									2,251			83,263
Other comprehensive loss											(13,724		)				(13,724		)
Common shares issued	34		328,340														328,374
Net share awards			5,940					6,730									12,670
Employee share purchase plan			1,156					594									1,750
Change in classification of deferred compensation plan			43,311		9,363												52,674
Conversion of operating partnership units			115											(115		)	—
Cash distributions declared to equity holders ($1.60 per common share)					(158,713		)							(2,808		)	(161,521		)
Other			42											136			178
Equity, June 30, 2019	$	1,065	$	4,533,667	$	(563,834	)	$	(348,480	)	$	(6,795	)	$	73,145		$	3,688,768

See Notes to Condensed Consolidated Financial Statements (Unaudited).

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CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Continued)

(Unaudited)

For the three months ended June 30, 2019



	Common Shareholders
(in thousands)	Common shares of beneficial interest		Additional paid-in capital		Distributions in excess of net income			Treasury shares, at cost			Accumulated other comprehensive loss			Non-controlling interests			Total equity
Equity, March 31, 2019	$	1,064	$	4,527,659	$	(526,856	)	$	(349,655	)	$	616		$	73,492		3,726,320
Net income					42,399									1,143			43,542
Other comprehensive loss											(7,411		)				(7,411		)
Net share awards			4,807					580									5,387
Employee share purchase plan			1,082					595									1,677
Conversion of operating partnership units			115											(115		)	—
Cash distributions declared to equity holders ($0.80 per common share)					(79,377		)							(1,403		)	(80,780		)
Other	1		4											28			33
Equity, June 30, 2019	$	1,065	$	4,533,667	$	(563,834	)	$	(348,480	)	$	(6,795	)	$	73,145		$	3,688,768

See Notes to Condensed Consolidated Financial Statements (Unaudited).

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CAMDEN PROPERTY TRUST

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



	Six Months Ended June 30,
(in thousands)	2020			2019
Cash flows from operating activities
Net income	$	61,978		$	83,263
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	184,662			164,920
Gain on sale of land	(382		)	—
Distributions of income from joint ventures	4,039			3,802
Equity in income of joint ventures	(3,755		)	(3,821		)
Share-based compensation	7,046			8,535
Settlement of forward interest rate swaps	—			(20,430		)
Net change in operating accounts and other	(3,414		)	(17,598		)
Net cash from operating activities	$	250,174		$	218,671
Cash flows from investing activities
Development and capital improvements, including land	$	(199,598	)	$	(206,724	)
Acquisition of operating properties	—			(214,233		)
Proceeds from sale of land	753			—
Increase in non-real estate assets	(4,871		)	(9,655		)
Other	(1,920		)	505
Net cash from investing activities	$	(205,636	)	$	(430,107	)
Cash flows from financing activities
Borrowings on unsecured credit facility and other short-term borrowings	$	358,000		$	1,167,000
Repayments on unsecured credit facility and other short-term borrowings	(402,000		)	(1,167,000		)
Repayment of notes payable	—			(439,852		)
Proceeds from notes payable	743,103			593,409
Distributions to common shareholders and non-controlling interests	(165,085		)	(155,723		)
Proceeds from issuance of common shares	—			328,374
Payment of deferred financing costs	(686		)	(5,342		)
Other	308			1,910
Net cash from financing activities	$	533,640		$	322,776
Net increase in cash, cash equivalents, and restricted cash	578,178			111,340
Cash, cash equivalents, and restricted cash, beginning of year	27,499			43,603
Cash, cash equivalents, and restricted cash, end of period	$	605,677		$	154,943
Reconciliation of cash, cash equivalents, and restricted cash to the Condensed Consolidated Balance Sheets
Cash and cash equivalents	$	601,584		$	149,551
Restricted cash	4,093			5,392
Total cash, cash equivalents, and restricted cash, end of period	$	605,677		$	154,943
Supplemental information
Cash paid for interest, net of interest capitalized	$	40,551		$	41,573
Cash paid for income taxes	146			1,197
Supplemental schedule of noncash investing and financing activities
Distributions declared but not paid	84,138			80,767
Value of shares issued under benefit plans, net of cancellations	20,117			18,554
Accrual associated with construction and capital expenditures	27,259			33,280
Right-of-use assets obtained in exchange for the use of new operating lease liabilities	69			16,249

See Notes to Condensed Consolidated Financial Statements (Unaudited).

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CAMDEN PROPERTY TRUST

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Description of Business

Business. Formed on May 25, 1993, Camden Property Trust, a Texas real estate investment trust ("REIT"), 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 June 30, 2020, we owned interests in, operated, or were developing 171 multifamily properties comprised of 58,051 apartment homes across the United States. Of the 171 properties, seven properties were under construction as of June 30, 2020, and will consist of a total of 1,939 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 condensed consolidated financial statements include our accounts and the accounts of other subsidiaries and joint ventures (including partnerships and limited liability companies) over which we have control. All intercompany transactions, balances, and profits have been eliminated in consolidation. Investments acquired or created are evaluated based on the accounting guidance relating to variable interest entities ("VIEs"), which requires the consolidation of VIEs in which we are considered to be the primary beneficiary. If the investment is determined not to be a VIE, then the investment is evaluated for consolidation primarily using a voting interest model. 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 June 30, 2020, 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 June 30, 2020, 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.

Interim Financial Reporting. We have prepared these unaudited financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial statements and the applicable rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, these statements do not include all information and footnote disclosures required for annual statements. While we believe the disclosures presented are adequate for interim reporting, these interim unaudited financial statements should be read in conjunction with the audited financial statements and notes included in our 2019 Annual Report on Form 10-K.

Acquisitions of Real Estate. Upon acquisition of real estate, we determine the fair value of tangible and intangible assets, which includes land, buildings (as-if-vacant), furniture and fixtures, the value of in-place leases, including above and below market leases, and acquired liabilities. In estimating these values, we apply methods similar to those used by independent appraisers of income-producing property. We generally believe acquisitions of operating properties are asset acquisitions, which include the capitalization of transaction costs. 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 condensed consolidated balance sheets.

We recognized amortization expense related to in-place leases of approximately $4.2 million and $3.6 million for the three months ended June 30, 2020 and 2019, respectively, and approximately $8.8 million and $5.5 million for the six months ended June 30, 2020 and 2019, respectively. We recognized no amortization related to market leases for either the three or six months ended June 30, 2020 and recognized approximately $0.1 million of amortization related to net below market leases for each of the three and six months ended June 30, 2019. During the three and six months ended June 30, 2020, the weighted average amortization periods for in-place leases and net below market leases were approximately six months and seven months, respectively. During the three and six months ended June 30, 2019, the weighted average amortization period for in-place net below market leases were approximately six months and five months, respectively.

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

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regarding a number of factors including, but not limited to, 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 three or six months ended June 30, 2020 or 2019.

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

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

Cost Capitalization. Real estate assets are carried at cost plus capitalized carrying charges. Carrying charges are primarily interest and real estate taxes which are capitalized as part of properties under development. Capitalized interest is generally based on the weighted average interest rate of our unsecured debt and was approximately $4.1 million and $3.2 million for the three months ended June 30, 2020 and 2019, respectively, and was approximately $8.6 million and $5.9 million for the six months ended June 30, 2020 and 2019, respectively. Capitalized real estate taxes were approximately $1.3 million and $0.7 million for the three months ended June 30, 2020 and 2019, respectively, and were approximately $2.8 million and $2.0 million for the six months ended June 30, 2020 and 2019, respectively.

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 certain activities necessary to prepare the underlying real estate for its intended use have been initiated. All construction and carrying costs are capitalized and reported in the balance sheet as properties under development until the apartment homes are substantially completed. As apartment homes within development properties are substantially completed the total capitalized development cost of each apartment home is transferred from properties under development including land to buildings and improvements.

Depreciation and amortization is computed over the expected useful lives of depreciable property on a straight-line basis with lives generally as follows:



	Estimated Useful Life
Buildings and improvements	5-35 years
Furniture, fixtures, equipment, and other	3-20 years
Intangible assets/liabilities (in-place leases and above and below market leases)	underlying lease term

Fair Value. For financial assets and liabilities recorded at fair value on a recurring or non-recurring basis, fair value is the price we would expect to receive to sell an asset, or pay to transfer a liability, in an orderly transaction with a market participant at the measurement date under current market conditions. 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.

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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 condensed 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.

Non-Recurring Fair Value Measurements. Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances. These assets primarily include long-lived assets which are recorded at fair value if they are impaired using the fair value methodologies used to measure long-lived assets described above at "Asset Impairment." Non-recurring fair value disclosures are not provided for impairments on assets disposed during the period because they are no longer owned by us. The inputs associated with the valuation of long-lived assets are generally included in Level 3 of the fair value hierarchy, unless a quoted price for a similar long-lived asset in an active market exists, at which time they are included in Level 2 of the fair value hierarchy.

Financial Instrument Fair Value Disclosures. As of June 30, 2020 and December 31, 2019, the carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and distributions payable represented fair value because of the short-term nature of these instruments. The carrying value of restricted cash approximates its fair value based on the nature of our assessment of the ability to recover these amounts. The carrying values of our notes receivable also approximate their fair values, which are based on certain factors, such as market interest rates, terms of the note and credit worthiness of the borrower. These financial instruments utilize Level 3 inputs. In calculating the fair value of our notes payable, interest rate and spread assumptions reflect current credit worthiness and market conditions available for the issuance of notes payable with similar terms and remaining maturities. These financial instruments utilize Level 2 inputs.

Income Recognition. The majority of our revenues are derived from real estate lease contracts and presented as property revenues, which include rental revenue and revenue from amounts received under contractual terms for other services provided to our customers.

Property Revenues: We earn rental revenue from operating lease contracts for the use of dedicated spaces within owned assets which is our only underlying asset class. We recognize rental revenues from these lease contracts 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. These amounts received under contractual terms for other services are charged to our residents and recognized monthly as earned. 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.

In April 2020, we announced Resident Relief Funds for our residents experiencing financial losses caused by COVID-19, which were intended to help impacted residents by providing immediate financial assistance for living expenses such as food, utilities, medical, insurance, childcare, and transportation. During the three and six months ended June 30, 2020, the Resident Relief Funds paid approximately $10.4 million to approximately 8,200 Camden residents. Of this amount, approximately $9.1 million was paid to approximately 7,100 residents of our wholly-owned communities and recorded as a reduction of property revenues, and approximately $1.3 million was paid to approximately 1,100 residents of the operating communities owned by our unconsolidated joint ventures. For the amounts paid to residents of the operating communities at our unconsolidated joint ventures, we recognized our ownership interest of $0.4 million in equity in income of joint ventures. Additionally, we also made arrangements to defer payments over many residents'/tenants' existing lease terms. For the deferred rent payment plans offered, we continue to recognize property revenue on the existing straight-line basis over the remaining lease term and recognize any changes in payment through lease receivables, which is recorded in other assets, net, in our condensed consolidated balance sheet.

As of June 30, 2020, our average residential lease term was approximately fourteen months with all other commercial leases averaging longer lease terms. We currently anticipate property revenue from existing leases as follows:

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(in millions)
Year ended December 31,	Operating Leases
Remainder of 2020	$	426.7
2021	239.5
2022	5.9
2023	5.2
2024	4.4
Thereafter	30.1
Total	$	711.8

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.

Note Receivable. We have one note receivable included in other assets, net, in our condensed consolidated balance sheets, relating to a real estate secured loan made to an unaffiliated third party. This note receivable matures on October 1, 2025. At both June 30, 2020 and December 31, 2019, the outstanding note receivable principal balance was approximately $7.9 million. The weighted average interest rate was approximately 7.0% for both the three and six months ended June 30, 2020 and 2019, respectively. Interest is recognized over the life of the note and included in interest and other income in our condensed consolidated statements of income and comprehensive income. We will provide for an allowance on our note receivable for expected losses if it becomes apparent conditions exist which may lead to our inability to collect all contractual amounts due. Conditions may include challenging economic factors, delinquent or late payments on the receivable, deterioration in the on-going relationship with the borrower, and other relevant factors. No allowance has been recognized on this note receivable as of June 30, 2020.

Recent Accounting Pronouncements. In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." ASU 2020-04 provides temporary relief to simplify the accounting for modifying contracts to transition away from referenced rates such as LIBOR and other interbank offered rates. To be eligible for these accounting reliefs, the modifications i) must change, or have the potential to change, the amount or timing of contractual cash flows and ii) be related to the replacement of the referenced rate expected to be discontinued. When the contracts have met the criteria above, modified contracts can be accounted for as a continuation of the existing contract and applied prospectively adjusting the effective interest rate in the agreement. ASU 2020-04 is effective for interim periods beginning January 1, 2020, and the contracts electing to use the optional relief must be entered into prior to December 31, 2022. We adopted ASU 2020-04 as of March 31, 2020 and will apply this guidance for modifications, if any, during the interim period and prospectively through December 31, 2022. We do not expect our adoption of ASU 2020-04 to have a material impact on our consolidated financial statements as our only outstanding debt indexed to LIBOR are our unsecured credit facility and unsecured term loan.

In April 2020, the FASB's staff issued a question and answer document ("Q&A") focused on the application of lease modification accounting as a result of COVID-19. The Q&A allows companies, assuming the total payments of modified leases are substantially the same as or less than the total payments of the existing lease, to elect to bypass a lease-by-lease analysis, and instead either apply the lease modification accounting framework or not. The election is to be applied consistently to leases with similar characteristics and similar circumstances. Having met the required criteria as defined in the Q&A, we elected to not account for concessions as lease modifications. As disclosed above, the cash payments provided to residents relating to the Resident Relief Funds of approximately $9.1 million was recognized as a reduction to property revenues during the three and six months ended June 30, 2020 and amounts paid to residents of the operating communities owned by our unconsolidated joint ventures, of which, we recognized our ownership interest of $0.4 million in equity in income of joint ventures. We also elected to account for all other concessions provided to our residents/tenants, which were primarily related to a change of timing of rent payments with no significant changes to total payments or term, as a deferred payment in which we continue to recognize property revenue on the existing straight-line basis over the remaining lease term and recognize any changes in payment through lease receivables, which is recorded in other assets, net, in our condensed consolidated balance sheet.

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3. Per Share Data

Basic earnings per share is computed using net income attributable to common shareholders and the weighted average number of common shares outstanding. Diluted earnings per share reflects common shares issuable from the assumed conversion of common share options and unvested share awards, units convertible into common shares, and shares which could be settled under equity forward sales agreements. 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. Common shares under a forward sales agreement will be considered in our calculation for diluted earnings-per-share until settlement, using the treasury stock method. The number of common share equivalent securities excluded from the diluted earnings per share calculation were approximately 2.0 million and 1.9 million for the three and six months ended June 30, 2020 and approximately 2.0 million for each of the three and six months ended June 30, 2019. 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 calculations as they are anti-dilutive. The following table presents information necessary to calculate basic and diluted earnings per share for the periods indicated:



	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except per share amounts)	2020			2019			2020			2019
Earnings per common share calculation – basic
Income from continuing operations attributable to common shareholders	$	16,477		$	42,399		$	59,761		$	81,012
Amount allocated to participating securities	(35		)	(117		)	(134		)	(186		)
Net income attributable to common shareholders – basic	$	16,442		$	42,282		$	59,627		$	80,826

Total earnings per common share – basic	$	0.17		$	0.43		$	0.60		$	0.83

Weighted average number of common shares outstanding – basic	99,399			98,903			99,348			97,903

Earnings per common share calculation – diluted
Net income attributable to common shareholders – diluted	$	16,442		$	42,282		$	59,627		$	80,826

Total earnings per common share – diluted	$	0.17		$	0.43		$	0.60		$	0.82

Weighted average number of common shares outstanding – basic	99,399			98,903			99,348			97,903
Incremental shares issuable from assumed conversion of:
Common share options and share awards granted	9			94			46			121
Weighted average number of common shares outstanding – diluted	99,408			98,997			99,394			98,024

4. Common Shares

In June 2020, we created an at-the market ("ATM") share offering program through which we can, but have no obligation to, sell common shares and we may also enter into separate forward sale agreements with forward purchasers for an aggregate offering price of up to $362.7 million (the "2020 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 2020 ATM program are intended to be used for general corporate purposes, which may include reducing future borrowings under our $900 million 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.

The 2020 ATM program permits the use of forward sales agreements which allows us to lock in a share price on the sale of common shares at the time the agreement is executed, but defer receiving the proceeds from the sale of shares until a later date. If we enter into a forward sale agreement, we expect the relevant forward purchasers will borrow from third parties and, through the relevant sales agent, acting in its role as forward seller, sell a number of common shares equal to the number of shares underlying the agreement. Under this scenario, we would not initially receive any proceeds from any sale of borrowed shares by the forward seller. We expect to physically settle each forward sale agreement with the relevant forward purchaser on or prior to the maturity

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date of a particular forward sale agreement by issuing our common shares in return for the receipt of aggregate net cash proceeds at settlement equal to the number of common shares underlying the particular forward sale agreement multiplied by the relevant forward sale price. However, at our sole discretion, we may also elect to cash settle or net share settle a particular forward sale agreement, in which case we may not receive any proceeds from the issuance of common shares, and we will instead receive or pay cash (in the case of cash settlement) or receive or deliver common shares (in the case of net share settlement). During the three months ended June 30, 2020 and through the date of this filing, we did not enter into any forward sale agreements nor were there any shares sold under the 2020 ATM program. As of the date of this filing, we had common shares having an aggregate offering price of up to $362.7 million remaining available for sale under the 2020 ATM program.

In May 2017, we created an ATM share offering program through which we could, but have no obligation to, sell common shares having an aggregate offering price of up to $315.3 million (the "2017 ATM program"). We terminated the 2017 ATM program in the second quarter of 2020, with $287.7 million remaining available for sale. Upon termination, no further common shares were available for sale under the 2017 ATM program.

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. There were no repurchases during the three and six months ended June 30, 2020. As of the date of this filing, the remaining dollar value of our common equity securities authorized to be repurchased under this program was approximately $

Price	110.37	EPS	2
Shares	99	P/E	65
MCap	10,934	P/FCF	27
Net Debt	2,314	EBIT	228
TEV	13,248	TEV/EBIT	58
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-07-31
10-Q	2020-03-31	Filed 2020-05-08
10-K	2019-12-31	Filed 2020-02-20
10-Q	2019-09-30	Filed 2019-11-01
10-Q	2019-06-30	Filed 2019-07-26
10-Q	2019-03-31	Filed 2019-05-03
10-K	2018-12-31	Filed 2019-02-15
10-Q	2018-09-30	Filed 2018-10-26
10-Q	2018-06-30	Filed 2018-08-03
10-Q	2018-03-31	Filed 2018-05-04
10-K	2017-12-31	Filed 2018-02-16
10-Q	2017-09-30	Filed 2017-10-27
10-Q	2017-06-30	Filed 2017-07-28
10-Q	2017-03-31	Filed 2017-05-05
10-K	2016-12-31	Filed 2017-02-13
10-Q	2016-09-30	Filed 2016-10-28
10-Q	2016-06-30	Filed 2016-07-29
10-Q	2016-03-31	Filed 2016-04-29
10-K	2015-12-31	Filed 2016-02-19
10-Q	2015-09-30	Filed 2015-10-30
10-Q	2015-06-30	Filed 2015-07-31
10-Q	2015-03-31	Filed 2015-05-01
10-K	2014-12-31	Filed 2015-02-20
10-Q	2014-09-30	Filed 2014-10-31
10-Q	2014-06-30	Filed 2014-08-01
10-Q	2014-03-31	Filed 2014-05-07
10-K	2013-12-31	Filed 2014-02-21
10-Q	2013-09-30	Filed 2013-11-01
10-Q	2013-06-30	Filed 2013-07-26
10-K	2012-12-31	Filed 2013-02-15
10-Q	2012-09-30	Filed 2012-11-02
10-Q	2012-06-30	Filed 2012-08-03
10-Q	2012-03-31	Filed 2012-04-27
10-K	2011-12-31	Filed 2012-02-17
10-Q	2011-09-30	Filed 2011-11-04
10-Q	2011-06-30	Filed 2011-07-29
10-Q	2011-03-31	Filed 2011-04-29
10-K	2010-12-31	Filed 2011-02-24
10-Q	2010-09-30	Filed 2010-11-05
10-Q	2010-06-30	Filed 2010-07-30
10-Q	2010-03-31	Filed 2010-05-07
10-K	2009-12-31	Filed 2010-02-25

8-K	2020-07-30	Earnings, Exhibits
8-K	2020-06-04
8-K	2020-05-15
8-K	2020-05-13
8-K	2020-05-07
8-K	2020-05-01
8-K	2020-04-16
8-K	2020-04-15
8-K	2020-04-09
8-K	2020-02-20
8-K	2020-01-30
8-K	2019-10-31
8-K	2019-10-07
8-K	2019-09-23
8-K	2019-07-25
8-K	2019-07-24
8-K	2019-06-17
8-K	2019-06-06
8-K	2019-05-09
8-K	2019-05-02
8-K	2019-03-08
8-K	2019-02-22
8-K	2019-01-31
8-K	2018-10-25
8-K	2018-10-04
8-K	2018-09-14
8-K	2018-08-02
8-K	2018-05-17
8-K	2018-05-03
8-K	2018-02-01

EX-31.1	cpt6302020-ex311.htm
EX-31.2	cpt6302020-ex312.htm
EX-32.1	cpt6302020ex321.htm

CPT 10Q Quarterly Report

Camden Property Trust Earnings 2020-06-30