2018 Q4 Form 10-Q Financial Statement

#000090634518000045 Filed on October 26, 2018

View on sec.gov

Income Statement

Concept 2018 Q4 2018 Q3 2017 Q3
Revenue $244.9M $1.827M $228.2M
YoY Change 6.57% -99.2% 3.61%
Cost Of Revenue $94.10M $95.30M $95.50M
YoY Change 7.3% -0.21% 9.9%
Gross Profit $150.8M $146.5M $132.7M
YoY Change 6.12% 10.4% -0.52%
Gross Profit Margin 61.57% 8018.61% 58.16%
Selling, General & Admin $13.60M $12.60M $12.30M
YoY Change 4.62% 2.44% 13.89%
% of Gross Profit 9.02% 8.6% 9.27%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $78.60M $76.50M $67.00M
YoY Change 15.25% 14.18% 6.52%
% of Gross Profit 52.12% 52.22% 50.49%
Operating Expenses $90.80M $87.20M $77.10M
YoY Change 15.23% 13.1% 7.08%
Operating Profit $60.00M $59.30M $55.60M
YoY Change -5.21% 6.65% -9.45%
Interest Expense -$19.40M $21.24M $21.21M
YoY Change 12.79% 0.12% -8.09%
% of Operating Profit -32.33% 35.81% 38.15%
Other Income/Expense, Net
YoY Change
Pretax Income $40.60M $40.32M $35.99M
YoY Change -54.54% 12.04% -88.16%
Income Tax $300.0K $300.0K $500.0K
% Of Pretax Income 0.74% 0.74% 1.39%
Net Earnings $39.20M $38.87M $34.38M
YoY Change -55.45% 13.04% -88.18%
Net Earnings / Revenue 16.0% 2127.31% 15.07%
Basic Earnings Per Share $0.41 $0.41 $0.38
Diluted Earnings Per Share $0.41 $0.40 $0.38
COMMON SHARES
Basic Shares Outstanding 93.14M shares 95.26M shares 91.01M shares
Diluted Shares Outstanding 95.42M shares 92.03M shares

Balance Sheet

Concept 2018 Q4 2018 Q3 2017 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $34.40M $8.500M $350.3M
YoY Change -90.66% -97.57% 11.67%
Cash & Equivalents $34.38M $8.529M $350.3M
Short-Term Investments
Other Short-Term Assets
YoY Change
Inventory
Prepaid Expenses
Receivables $22.90M $22.60M $23.60M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $57.30M $31.10M $373.9M
YoY Change -85.4% -91.68% 10.72%
LONG-TERM ASSETS
Property, Plant & Equipment $5.925B $5.904B $5.568B
YoY Change 6.78% 6.03% 1.82%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments $22.30M $24.70M $28.40M
YoY Change -18.01% -13.03% -78.15%
Other Assets $9.200M $10.10M $9.200M
YoY Change -36.55% 9.78% 5.75%
Total Long-Term Assets $6.162B $6.167B $5.795B
YoY Change 6.59% 6.43% 0.77%
TOTAL ASSETS
Total Short-Term Assets $57.30M $31.10M $373.9M
Total Long-Term Assets $6.162B $6.167B $5.795B
Total Assets $6.220B $6.199B $6.169B
YoY Change 0.74% 0.48% 1.32%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $146.9M $140.0M $127.6M
YoY Change 14.5% 9.72% -10.89%
Accrued Expenses
YoY Change
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $276.2M $285.2M $270.6M
YoY Change 9.34% 5.4% -7.36%
LONG-TERM LIABILITIES
Long-Term Debt $2.322B $2.260B $2.204B
YoY Change 5.31% 2.51% -11.14%
Other Long-Term Liabilities $236.7M $239.8M $227.5M
YoY Change 2.11% 5.41% 16.97%
Total Long-Term Liabilities $2.558B $2.499B $2.432B
YoY Change 5.0% 2.78% -9.09%
TOTAL LIABILITIES
Total Short-Term Liabilities $276.2M $285.2M $270.6M
Total Long-Term Liabilities $2.558B $2.499B $2.432B
Total Liabilities $2.782B $2.724B $2.629B
YoY Change 6.51% 3.59% -9.18%
SHAREHOLDERS EQUITY
Retained Earnings
YoY Change
Common Stock $4.155B $4.147B $4.134B
YoY Change 0.43% 0.32% 12.47%
Preferred Stock
YoY Change
Treasury Stock (at cost) $355.8M $355.8M $364.7M
YoY Change -2.27% -2.44% -2.37%
Treasury Stock Shares 9.841M shares 9.841M shares 10.09M shares
Shareholders Equity $3.311B $3.340B $3.387B
YoY Change
Total Liabilities & Shareholders Equity $6.220B $6.199B $6.169B
YoY Change 0.74% 0.48% 1.32%

Cashflow Statement

Concept 2018 Q4 2018 Q3 2017 Q3
OPERATING ACTIVITIES
Net Income $39.20M $38.87M $34.38M
YoY Change -55.45% 13.04% -88.18%
Depreciation, Depletion And Amortization $78.60M $76.50M $67.00M
YoY Change 15.25% 14.18% 6.52%
Cash From Operating Activities $127.7M $144.7M $130.5M
YoY Change 26.69% 10.88% -3.62%
INVESTING ACTIVITIES
Capital Expenditures -$86.90M -$94.80M -$71.80M
YoY Change 9.58% 32.03% -31.09%
Acquisitions
YoY Change
Other Investing Activities -$2.200M -$69.80M $800.0K
YoY Change -103.17% -8825.0% -99.79%
Cash From Investing Activities -$89.10M -$164.6M -$71.00M
YoY Change 809.18% 131.83% -126.13%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -13.60M -35.20M 275.4M
YoY Change -81.29% -112.78% -161.49%
NET CHANGE
Cash From Operating Activities 127.7M 144.7M 130.5M
Cash From Investing Activities -89.10M -164.6M -71.00M
Cash From Financing Activities -13.60M -35.20M 275.4M
Net Change In Cash 25.00M -55.10M 334.9M
YoY Change 36.61% -116.45% -920.83%
FREE CASH FLOW
Cash From Operating Activities $127.7M $144.7M $130.5M
Capital Expenditures -$86.90M -$94.80M -$71.80M
Free Cash Flow $214.6M $239.5M $202.3M
YoY Change 19.16% 18.39% -15.57%

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12300000 USD
CY2018Q3 us-gaap Debt Instrument Unamortized Discount Premium And Debt Issuance Costs Net
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10200000 USD
CY2018Q3 us-gaap Debt Weighted Average Interest Rate
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0.044
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CY2018Q3 us-gaap Deferred Compensation Plan Assets
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146400000 USD
CY2018Q3 us-gaap Deferred Tax Liability Not Recognized Amount Of Unrecognized Deferred Tax Liability Undistributed Earnings Of Domestic Subsidiaries
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0 USD
CY2017Q3 us-gaap Depreciation And Amortization
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67014000 USD
us-gaap Depreciation And Amortization
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195781000 USD
CY2018Q3 us-gaap Depreciation And Amortization
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76476000 USD
us-gaap Depreciation And Amortization
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222269000 USD
us-gaap Depreciation Depletion And Amortization
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195781000 USD
us-gaap Depreciation Depletion And Amortization
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222269000 USD
CY2017Q3 us-gaap Dilutive Securities Effect On Basic Earnings Per Share Other
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294000 USD
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869000 USD
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0 USD
us-gaap Dilutive Securities Effect On Basic Earnings Per Share Other
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0 USD
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60090000 USD
us-gaap Direct Costs Of Leased And Rented Property Or Equipment
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164188000 USD
CY2018Q3 us-gaap Direct Costs Of Leased And Rented Property Or Equipment
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56973000 USD
us-gaap Direct Costs Of Leased And Rented Property Or Equipment
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165624000 USD
us-gaap Dividends
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72962000 USD
us-gaap Dividends
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74976000 USD
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211666000 USD
us-gaap Dividends Common Stock Cash
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225115000 USD
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600000 USD
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0.38
us-gaap Earnings Per Share Basic
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1.20
CY2018Q3 us-gaap Earnings Per Share Basic
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0.41
us-gaap Earnings Per Share Basic
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1.22
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0.38
us-gaap Earnings Per Share Diluted
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1.20
CY2018Q3 us-gaap Earnings Per Share Diluted
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0.40
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1.22
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1000000 USD
us-gaap Employee Service Share Based Compensation Allocation Of Recognized Period Costs Capitalized Amount
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2800000 USD
us-gaap Proceeds From Payments For Other Financing Activities
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1227000 USD
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions Risk Free Interest Rate Minimum
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0.020
us-gaap Share Based Compensation Arrangement By Share Based Payment Award Options Forfeitures In Period
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0 shares
us-gaap Equity Method Investment Summarized Financial Information Net Income Loss
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9400000 USD
CY2018Q3 us-gaap Equity Method Investment Summarized Financial Information Net Income Loss
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4000000 USD
us-gaap Equity Method Investment Summarized Financial Information Net Income Loss
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11600000 USD
CY2017Q3 us-gaap Equity Method Investment Summarized Financial Information Revenue
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30800000 USD
us-gaap Equity Method Investment Summarized Financial Information Revenue
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91200000 USD
CY2018Q3 us-gaap Equity Method Investment Summarized Financial Information Revenue
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32500000 USD
us-gaap Equity Method Investment Summarized Financial Information Revenue
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95300000 USD
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0 USD
CY2018Q3 us-gaap Employee Service Share Based Compensation Allocation Of Recognized Period Costs Capitalized Amount
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700000 USD
us-gaap Employee Service Share Based Compensation Allocation Of Recognized Period Costs Capitalized Amount
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2400000 USD
us-gaap Equity Method Investment Dividends Or Distributions
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4791000 USD
us-gaap Equity Method Investment Dividends Or Distributions
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5573000 USD
CY2018Q3 us-gaap Equity Method Investment Ownership Percentage
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0.200
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715900000 USD
CY2018Q3 us-gaap Equity Method Investment Summarized Financial Information Assets
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703100000 USD
CY2017Q4 us-gaap Equity Method Investment Summarized Financial Information Equity Or Capital
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174500000 USD
CY2018Q3 us-gaap Equity Method Investment Summarized Financial Information Equity Or Capital
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166100000 USD
CY2017Q4 us-gaap Equity Method Investment Summarized Financial Information Liabilities
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514500000 USD
CY2018Q3 us-gaap Equity Method Investment Summarized Financial Information Liabilities
EquityMethodInvestmentSummarizedFinancialInformationLiabilities
511700000 USD
CY2017Q3 us-gaap Equity Method Investment Summarized Financial Information Net Income Loss
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2000000 USD
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0 USD
us-gaap Gains Losses On Extinguishment Of Debt
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0 USD
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us-gaap General And Administrative Expense
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37585000 USD
CY2018Q3 us-gaap General And Administrative Expense
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12618000 USD
us-gaap General And Administrative Expense
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37113000 USD
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0 USD
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34384000 USD
us-gaap Income Loss From Continuing Operations
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108433000 USD
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38866000 USD
us-gaap Income Loss From Continuing Operations
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116932000 USD
CY2017Q3 us-gaap Income Loss From Continuing Operations Before Income Taxes Domestic
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35987000 USD
us-gaap Income Loss From Continuing Operations Before Income Taxes Domestic
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112786000 USD
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40320000 USD
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121485000 USD
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1255000 USD
us-gaap Income Loss From Equity Method Investments Net Of Dividends Or Distributions
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4857000 USD
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1943000 USD
us-gaap Income Loss From Equity Method Investments Net Of Dividends Or Distributions
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5644000 USD
us-gaap Income Taxes Paid
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1528000 USD
us-gaap Income Taxes Paid
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1954000 USD
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-1356000 USD
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300000 USD
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1047000 USD
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1395000 USD
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0 USD
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9994 shares
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10135000 USD
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1178000 USD
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20986000 USD
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17726000 USD
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805000 shares
us-gaap Incremental Common Shares Attributable To Conversion Of Preferred Stock
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805000 shares
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0 shares
us-gaap Incremental Common Shares Attributable To Conversion Of Preferred Stock
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us-gaap Interest And Other Income
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385000 USD
us-gaap Interest And Other Income
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3400000 USD
us-gaap Interest Costs Capitalized
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11600000 USD
CY2018Q3 us-gaap Interest Costs Capitalized
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3300000 USD
us-gaap Interest Costs Capitalized
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10800000 USD
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21210000 USD
us-gaap Interest Expense
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66132000 USD
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21235000 USD
us-gaap Interest Expense
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62216000 USD
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64455000 USD
us-gaap Interest Paid Net
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58597000 USD
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1600000 USD
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2200000 USD
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15700000 USD
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500000 USD
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0 USD
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6269481000 USD
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27237000 USD
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24664000 USD
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1000000 USD
us-gaap Lease And Rental Expense
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3000000 USD
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900000 USD
us-gaap Lease And Rental Expense
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2800000 USD
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CY2018Q3 us-gaap Line Of Credit Facility Remaining Borrowing Capacity
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559900000 USD
CY2018Q3 us-gaap Long Term Debt
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790700000 USD
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379700000 USD
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349300000 USD
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249100000 USD
CY2018Q3 us-gaap Long Term Debt Maturities Repayments Of Principal In Year Three
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28800000 USD
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462000000 USD
CY2017Q4 us-gaap Minority Interest
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CY2018Q3 us-gaap Minority Interest
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CY2017Q4 us-gaap Mortgage Loans On Real Estate
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18800000 USD
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9300000 USD
us-gaap Net Cash Provided By Used In Financing Activities
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us-gaap Net Cash Provided By Used In Financing Activities
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us-gaap Net Cash Provided By Used In Investing Activities
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us-gaap Net Cash Provided By Used In Investing Activities
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us-gaap Net Cash Provided By Used In Operating Activities
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333871000 USD
us-gaap Net Cash Provided By Used In Operating Activities
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375950000 USD
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us-gaap Net Income Loss
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108433000 USD
CY2018Q3 us-gaap Net Income Loss
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us-gaap Net Income Loss
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CY2017Q3 us-gaap Net Income Loss Attributable To Noncontrolling Interest
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us-gaap Net Income Loss Attributable To Noncontrolling Interest
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3345000 USD
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1124000 USD
us-gaap Net Income Loss Attributable To Noncontrolling Interest
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3455000 USD
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34363000 USD
us-gaap Net Income Loss Available To Common Stockholders Basic
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108300000 USD
CY2018Q3 us-gaap Net Income Loss Available To Common Stockholders Basic
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38582000 USD
us-gaap Net Income Loss Available To Common Stockholders Basic
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116101000 USD
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us-gaap Net Income Loss Available To Common Stockholders Diluted
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109169000 USD
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38582000 USD
us-gaap Net Income Loss Available To Common Stockholders Diluted
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116101000 USD
CY2017Q3 us-gaap New Accounting Pronouncement Or Change In Accounting Principle Description
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5.7
us-gaap New Accounting Pronouncement Or Change In Accounting Principle Description
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16.7
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5.5
us-gaap New Accounting Pronouncement Or Change In Accounting Principle Description
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16.9
us-gaap Noncontrolling Interest Increase From Business Combination
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0 USD
us-gaap Noncontrolling Interest Increase From Business Combination
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14668000 USD
CY2017Q4 us-gaap Notes Payable
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CY2018Q3 us-gaap Notes Payable
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2259600000 USD
CY2018Q2 us-gaap Number Of Units In Real Estate Property
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360
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CY2018Q3 us-gaap Operating Leases Future Minimum Payments Due In Five Years
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2700000 USD
CY2018Q3 us-gaap Operating Leases Future Minimum Payments Due In Four Years
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2900000 USD
us-gaap Participating Securities Distributed And Undistributed Earnings Loss Basic
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133000 USD
CY2018Q3 us-gaap Operating Leases Future Minimum Payments Due In Three Years
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2900000 USD
CY2018Q3 us-gaap Operating Leases Future Minimum Payments Due In Two Years
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2800000 USD
CY2018Q3 us-gaap Operating Leases Future Minimum Payments Due Thereafter
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6900000 USD
CY2017Q3 us-gaap Operating Leases Income Statement Minimum Lease Revenue
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us-gaap Operating Leases Income Statement Minimum Lease Revenue
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us-gaap Operating Leases Income Statement Minimum Lease Revenue
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1754000 USD
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1754000 USD
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5202000 USD
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13984000 USD
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us-gaap Other Operating Activities Cash Flow Statement
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21028000 USD
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21000 USD
CY2018Q3 us-gaap Participating Securities Distributed And Undistributed Earnings Loss Basic
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284000 USD
us-gaap Participating Securities Distributed And Undistributed Earnings Loss Basic
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831000 USD
us-gaap Payments For Proceeds From Other Investing Activities
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us-gaap Payments For Proceeds From Other Investing Activities
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us-gaap Payments Of Dividends
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us-gaap Payments Of Dividends
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CY2018Q2 us-gaap Payments To Acquire Land
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11400000 USD
us-gaap Payments To Acquire Other Property Plant And Equipment
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2799000 USD
us-gaap Payments To Acquire Other Property Plant And Equipment
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12436000 USD
us-gaap Payments To Acquire Real Estate
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58267000 USD
us-gaap Payments To Acquire Real Estate
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290005000 USD
us-gaap Payments To Develop Real Estate Assets
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219817000 USD
us-gaap Payments To Develop Real Estate Assets
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272340000 USD
CY2018Q3 us-gaap Preferred Stock Shares Authorized
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0 shares
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9500000 USD
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500000 USD
us-gaap Proceeds From Issuance Of Common Stock
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445038000 USD
us-gaap Proceeds From Issuance Of Common Stock
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0 USD
us-gaap Proceeds From Issuance Of Shares Under Incentive And Share Based Compensation Plans
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18154000 USD
us-gaap Proceeds From Issuance Of Shares Under Incentive And Share Based Compensation Plans
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17841000 USD
us-gaap Proceeds From Lines Of Credit
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465000000 USD
us-gaap Proceeds From Short Term Debt Maturing In Three Months Or Less
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100000000 USD
us-gaap Proceeds From Lines Of Credit
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62000000 USD
CY2017Q3 us-gaap Profit Loss
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35475000 USD
us-gaap Profit Loss
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111778000 USD
CY2018Q3 us-gaap Profit Loss
ProfitLoss
39990000 USD
us-gaap Profit Loss
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120387000 USD
CY2017Q4 us-gaap Real Estate Investment Property Accumulated Depreciation
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">1. Description of Business</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Business</font><font style="font-family:inherit;font-size:10pt;">. Formed on May&#160;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 </font><font style="font-family:inherit;font-size:10pt;">September&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, we owned interests in, operated, or were developing </font><font style="font-family:inherit;font-size:10pt;">167</font><font style="font-family:inherit;font-size:10pt;"> multifamily properties comprised of </font><font style="font-family:inherit;font-size:10pt;">56,858</font><font style="font-family:inherit;font-size:10pt;"> apartment homes across the United States. Of the </font><font style="font-family:inherit;font-size:10pt;">167</font><font style="font-family:inherit;font-size:10pt;"> properties, </font><font style="font-family:inherit;font-size:10pt;">eight</font><font style="font-family:inherit;font-size:10pt;"> properties were under construction as of </font><font style="font-family:inherit;font-size:10pt;">September&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, and will consist of a total of </font><font style="font-family:inherit;font-size:10pt;">2,378</font><font style="font-family:inherit;font-size:10pt;"> apartment homes when completed. We also own land holdings which we may develop into multifamily communities in the future.</font></div></div>
us-gaap Revenue Recognition Leases
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-bottom:8px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">3. Revenues</font></div><div style="line-height:120%;padding-bottom:8px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">On January 1, 2018, we adopted ASU 2014-09 and all related amendments in accordance with ASU 2014-09 and elected to apply the new revenue standard to those contracts which were not completed as of January 1, 2018. We also elected to omit disclosing the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the invoiced amount directly corresponds to the value transferred to the customer as provided for in the practical expedients.&#160;Our adoption of ASU 2014-09 and its related amendments did not have a material impact upon our consolidated financial statements as the majority of our revenues are derived from real estate lease contracts which are scoped out of ASU 2014-09.&#160; </font></div><div style="line-height:120%;padding-bottom:8px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Our presentation of revenue within our condensed consolidated statements of income and comprehensive income is separated into its component parts by the nature and timing of the revenue streams.&#160;Our revenue within the scope of this new revenue standard is recognized when the services are transferred to our customers for an amount which reflects the consideration we expect to receive in exchange for those services rendered and include the following:&#160; </font></div><div style="line-height:120%;padding-bottom:8px;text-align:justify;text-indent:29px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Other Property Revenues. </font><font style="font-family:inherit;font-size:10pt;">The items within other property revenues relate to non-lease components within a lease contract and primarily consist of utility rebillings which are usually recognized over time and other transactional fees primarily recognized at a point-in-time. These fees are charged to our residents and recognized monthly as the performance obligation is satisfied.</font></div><div style="line-height:120%;padding-bottom:8px;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Upon our adoption of ASU 2014-09, we are now presenting certain revenue items, historically included as a component of other property revenues, as rental revenues due to the nature and timing of revenue recognition for these items being more closely aligned to a lease. This new presentation has been applied prospectively as this reclassification will not have an impact upon total property revenues or the opening balance of retained earnings. Approximately </font><font style="font-family:inherit;font-size:10pt;">$5.5 million</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">$16.9 million</font><font style="font-family:inherit;font-size:10pt;"> of rental revenue is related to this presentation for the </font><font style="font-family:inherit;font-size:10pt;">three and nine</font><font style="font-family:inherit;font-size:10pt;"> months ended </font><font style="font-family:inherit;font-size:10pt;">September&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, respectively. Had ASU 2014-09 been effective as of January 1, 2017, we would have reclassified approximately </font><font style="font-family:inherit;font-size:10pt;">$5.7 million</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">$16.7 million</font><font style="font-family:inherit;font-size:10pt;"> from other property revenues to rental revenue for the </font><font style="font-family:inherit;font-size:10pt;">three and nine</font><font style="font-family:inherit;font-size:10pt;"> months ended </font><font style="font-family:inherit;font-size:10pt;">September&#160;30, 2017</font><font style="font-family:inherit;font-size:10pt;">, respectively.</font></div><div style="line-height:120%;padding-bottom:8px;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Fee and Asset Management Income. </font><font style="font-family:inherit;font-size:10pt;">Management fee income primarily consists of fees charged to our unconsolidated joint ventures for managing the joint venture, and the development, redevelopment and capital expenditures 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. </font></div><div style="line-height:120%;padding-bottom:8px;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">We also generate construction fees for construction management and general contracting services provided to third-party owners of multifamily, commercial, and retail 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. </font></div><div style="line-height:120%;padding-bottom:8px;text-align:justify;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Contract Balances. </font><font style="font-family:inherit;font-size:10pt;">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 </font><font style="font-family:inherit;font-size:10pt;">three and nine</font><font style="font-family:inherit;font-size:10pt;"> months ended </font><font style="font-family:inherit;font-size:10pt;">September&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, these contract receivable and liability balances were immaterial.</font></div></div>

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