American Campus Communities, Inc. (NYSE:ACC) today announced the
following financial results for the quarter ended September 30,
2017.
Highlights
- Reported net loss attributable to ACC
of $1.3 million or $0.01 per fully diluted share, versus net income
of $9.6 million or $0.07 per fully diluted share in the third
quarter 2016. Net loss in the current quarter includes
approximately $4.8 million in expenses related to Hurricanes Harvey
and Irma and transaction costs related to the Core Spaces / DRW
portfolio transaction.
- Reported quarterly FFOM per share of
$0.44 per fully diluted share or $61.2 million, versus $0.45 per
fully diluted share or $60.4 million for the third quarter prior
year.
- Reported same store wholly-owned net
operating income ("NOI") decreased by 0.8 percent over the third
quarter 2016 with revenues increasing 1.3 percent and operating
expenses increasing 3.3 percent. Excluding expenses of $1.9 million
associated with Hurricanes Harvey and Irma during the quarter, same
store wholly-owned operating expenses and NOI would have increased
by 1.0 and 1.7 percent, respectively.
- Achieved an average rental rate
increase of 2.9 percent and reported occupancy of 96.6 percent for
2018 same store wholly-owned properties, as of September 30, 2017
versus 97.2 percent for the same date prior year.
- Delivered 10 new owned development
projects containing 7,454 beds into service for the 2017-2018
academic year totaling $609.2 million in development cost.
- Executed a predevelopment agreement for
a second phase American Campus Equity (ACE®) development on the
University of Southern California Health Sciences campus in Los
Angeles. The estimated $42.0 million project is expected to include
approximately 300 on-campus beds targeting delivery in Fall
2020.
- Executed an agreement to recapitalize
and ultimately acquire seven select student housing properties,
including three presale developments for delivery in 2018, all
totaling 3,776 beds for $590.6 million from affiliates of Core
Spaces and DRW Real Estate Investments.
- Continued the company’s strategic
Seattle expansion in the University of Washington market with the
acquisition of Bridges @ 11th subsequent to quarter end. The
258-bed community is located on university owned land immediately
adjacent to the company’s recently acquired TWELVE at U District
and only two blocks from Hub U District Seattle.
“While challenging conditions in 3 of our 60 same store markets
caused us to fall short of our overall leasing expectations, our
lease-up in the other 57 markets was strong, coming in with
occupancy of 98 percent and rental rate growth of 3.2 percent.
Although we are obviously disappointed in missing our overall
expectations, the 2.3 percent opening same store rental revenue
growth is a testament to the stability of cash flows our sector
offers, as even a disappointing lease up provides the opportunity
for our 13th consecutive year of growth in same store rental rate,
rental revenue and NOI,” said Bill Bayless, American Campus
Communities CEO. “This long-term stability of internal growth, when
coupled with opportunistic accretive external growth, provides a
compelling value creation opportunity. Looking forward to the
upcoming leasing season, we continue to see a healthy fundamental
environment with a slight reduction in total new supply levels in
our collective markets and are currently targeting rental revenue
growth for the 2018-2019 academic year in the range of 2.5 to 4.0
percent through a combination of occupancy and rental rate
growth.”
Third Quarter Operating Results
Revenue for the 2017 third quarter totaled $196.9 million versus
$196.4 million in the third quarter 2016, and operating income for
the quarter totaled $17.6 million versus $29.3 million in the prior
year third quarter. The decrease in operating income was
primarily due to a $9.1 million increase in depreciation and
amortization primarily associated with recently acquired and
developed properties, $2.9 million in property acquisition costs
related to the Core Spaces Portfolio acquisition, and $1.9 million
in expenses associated with Hurricanes Harvey and Irma. Net loss
for the 2017 third quarter totaled $1.3 million, or $0.01 per fully
diluted share, compared with net income of $9.6 million, or $0.07
per fully diluted share, for the same quarter in 2016. FFO for
the 2017 third quarter totaled $59.0 million, or $0.43 per fully
diluted share, as compared to $61.1 million, or $0.46 per fully
diluted share for the same quarter in 2016. FFOM for the 2017 third
quarter was $61.2 million, or $0.44 per fully diluted share as
compared to $60.4 million, or $0.45 per fully diluted share for the
same quarter in 2016. A reconciliation of FFO and FFOM to net
income is provided in Table 3.
NOI for same store wholly-owned properties was $74.9 million in
the quarter, a decrease of 0.8 percent from $75.5 million in the
2016 third quarter. Same store wholly-owned property revenues
increased by 1.3 percent over the 2016 third quarter due primarily
to an increase in average rental rates for the 2017-2018 academic
year. Same store wholly-owned property operating expenses
increased by 3.3 percent over the prior year quarter. Excluding
expenses of $1.9 million associated with Hurricanes Harvey and Irma
during the quarter, same store wholly-owned operating expenses and
NOI would have increased by 1.0 percent and 1.7 percent,
respectively. NOI for the total wholly-owned portfolio decreased
1.2 percent to $84.9 million for the quarter from $85.9 million in
the comparable period of 2016 due primarily to the sale of 20
non-core properties since the second quarter of 2016. A
reconciliation of same store NOI to total NOI is provided in Table
4.
Portfolio Update
Developments
During the quarter, the company completed construction and
delivered $609.2 million of owned development assets into service.
As of September 30, 2017, these properties were 83.2 percent
occupied. The company also progressed with construction of its
$603.3 million development and $282.6 million presale development
pipeline with expected delivery in Fall 2018 and Fall 2019. These
construction projects are all core Class A assets located on campus
or pedestrian to campus in their respective markets and remain on
track to meet their collective targeted stabilized development
yield in the range of 6.25 - 7.0 percent for developments and 5.7 –
6.25 percent for presale developments.
American Campus Equity (ACE)
The company made further advancements in its ACE development
program, executing a predevelopment agreement for a second phase
project on the University of Southern California Health Sciences
campus in Los Angeles. The proposed $42.0 million second-phase
project includes approximately 300 beds, expanding on the highly
successful initial ACE development which was 99.6 percent occupied
as of September 30, 2017 and is currently over 100 percent applied
for academic year 2018-2019. Delivery timing for the new project
currently targets Fall 2020, but will ultimately be determined
based upon the lengthy City of Los Angeles entitlement process.
Acquisitions
Core Spaces Portfolio Acquisition
During the quarter, the company entered into an agreement to
recapitalize and ultimately acquire seven select student housing
properties totaling 3,776 beds for $590.6 million from affiliates
of Core Spaces and DRW Real Estate Investments. The transaction
focuses on strategic growth in seven key Power-5 conference and
state flagship university markets, and offers the potential for
multi-asset market efficiencies in five existing ACC markets. The
transaction included the acquisition of two existing communities,
two communities opened in Fall 2017, and three presale development
projects scheduled for completion in Fall 2018, with closing and
funding events scheduled to occur in a staged manner over
approximately two years, allowing for optimal integration and
funding.
American Campus Communities believes these seven assets
represent some of the best purpose-built student housing properties
in their respective markets, combining market leading unit and
amenity packages with excellent locations, averaging only 0.2 miles
to campus. Additionally, the seven strategic growth markets offer
strong student housing fundamentals with average enrollment in
excess of 35,000 students and existing purpose-built student
housing supply serving only 13 percent of total enrollment, as
compared to an average of 22 percent for the company’s current
portfolio.
As previously noted, in aggregate, the $590.6 million
transaction is expected to include closing and funding events over
approximately two years. Upon the initial funding of each property,
American Campus Communities assumes sole operational control, while
Core Spaces/DRW Real Estate Investments will retain certain limited
decision making abilities including responsibility for the
development and delivery of the in-process development properties.
The acquisition is subject to adjustment to total consideration
based on stabilized property tax assessments, various earn-out
adjustments and closing conditions including satisfactory
completion of the properties currently under construction by Core
Spaces/DRW Real Estate Investments. After investment of $7.9
million of upfront capital improvements, the portfolio targets a
stabilized cap rate of 5.4 percent nominal and 5.2 percent economic
for the 2019-2020 academic year, with multiple property market
efficiencies offering the potential for 25 to 50 basis points of
additional yield above the going-in cap rates for five of the seven
assets.
In association with this transaction, the company intends to
manage its balance sheet through the monetization of $400 to $450
million of select existing core assets via disposition or joint
venture, thereby taking advantage of the current cap rate
environment for core pedestrian student housing in tier one
university markets.
For additional information, please refer to the company’s press
release and investor presentation posted in the Investor Relations
section of the company’s website.
Bridges @ 11th
Following the company’s previously announced acquisitions of
TWELVE at U District and Hub U District Seattle (part of the Core
Spaces Portfolio), the company continued its strategic expansion in
the highly underserved University of Washington market with the
October acquisition of Bridges @ 11th. The 258-bed asset is located
on university owned land immediately adjacent to TWELVE at U
District and is subject to a long-term ground lease with the
University of Washington. Since opening in 2015, the property has
been highly attractive to students due to the pedestrian to campus
location within the popular U District submarket, while also
benefiting from priority leasing to faculty and staff of both the
University of Washington and Children’s Hospital. After investment
of $1.2 million of upfront capital improvements and based on
current occupancy, the acquisition represents a cap rate of 4.7
percent nominal and 4.5 percent economic. Over the next two leasing
cycles, the company plans to further capitalize on the property’s
high demand from UW students by strategically configuring select
floor plans to allow for shared occupancy thereby creating diverse
price points within the community, and furnishing many of the
units. Upon completion of these strategic initiatives, the company
targets a stabilized cap rate of 5.3 percent nominal and 5.1
percent economic.
Since June, the company has strategically accumulated three
Seattle-based properties located pedestrian to the exceedingly
supply-constrained University of Washington market, which contains
less than 1,000 existing modern purpose-built beds serving a
university with total enrollment exceeding 46,000 students. In
addition to their superior locations, the properties feature
price-point and unit-mix differentiation, highly competitive
amenity packages including dedicated study rooms, modern fitness
centers and outdoor amenity space. In addition, the assets offer
the potential for additional yield of 25 to 50 basis points above
the going-in cap rates by taking advantage of multi-asset
opportunities, integrating many operational functions.
Third-Party Services
During the quarter, the company completed construction and
commenced management of Momentum Village Phase II and Esperanza
Hall, 560-bed and 382-bed third-party development projects located
on the campuses of Texas A&M University – Corpus Christi and
Texas A&M University – San Antonio, respectively.
Also during the quarter, the company closed on financing and
commenced construction on a third-party on-campus development
project with the University of California, Irvine. The 1,441-bed
student housing development project represents the fourth phase of
the company’s partnership with the university, which includes more
than 6,500 modern student beds in purpose-built, academically
oriented student communities totaling more than $550 million of
total project cost. The company expects to earn $5.9 million in
development fees throughout the construction period with completion
scheduled for Fall 2019.
Capital Markets
In September, the company entered into a $300 million senior
unsecured term loan, which matures in September 2018. The loan
contains two one-year extension options and an accordion feature
that allows the company to expand the facility by up to an
additional $100 million, subject to the satisfaction of certain
conditions. Borrowing rates under the credit facility float at a
margin over LIBOR with spreads priced on a grid tied to the
company’s credit rating. Based on the company’s current Baa2/BBB
rating, the LIBOR margin is 110 basis points. Proceeds were used to
pay down the outstanding balance on the company’s revolving credit
facility, which was utilized for initial funding requirements of
the Core Spaces Portfolio acquisition.
Subsequent to quarter end, the company issued $400 million of
senior unsecured notes under its existing shelf registration, which
are fully and unconditionally guaranteed by the company. These
10-year notes were issued at 99.912 percent of par value with a
coupon of 3.625 percent and a yield of 3.635 percent. The notes
will mature on November 15, 2027. Moody’s and S&P rated the
notes Baa2 and BBB, respectively. Net proceeds from the transaction
totaled approximately $395 million, after expenses, and were used
to repay the outstanding balance of the company’s revolving credit
facility, with the remaining proceeds available to fund the
development pipeline, acquisition activity and for general business
purposes.
At-The-Market (ATM) Share Offering Program
In July, the company sold 24 thousand shares of common stock at
a weighted average price of $48.09 per share for net proceeds of
approximately $1.1 million. The company has not sold any shares
under the ATM program subsequent to this activity. Total gross
proceeds of $267 million have been raised under the ATM program in
2016 and 2017 leaving approximately $233 million of capacity under
the current program.
2017 Outlook
The company is updating its 2017 outlook primarily to reflect
the impact of the following items as compared to management’s
initial outlook: (1) an increase in NOI for properties acquired in
2017, offset by an increase in interest expense and common stock
issued to fund the purchases; (2) a decrease in NOI for 2017 same
store properties and Fall 2017 development deliveries due to the
results of the academic year 2017-2018 lease-up; (3) additional
interest expense from the issuance of $400 million of senior
unsecured notes approximately two months earlier than anticipated;
and (4) additional repairs and maintenance expenses associated with
Hurricanes Harvey and Irma of $2.0 million. Based upon these and
other factors, management anticipates that 2017 FFO will be in the
range of $2.39 to $2.43 and FFOM will be in the range of $2.28 to
$2.32 per fully diluted share, respectively. For additional details
regarding the company’s updated 2017 outlook, please see pages
17-18 of the Supplemental Analyst Package 3Q 2017.
“While the disappointing 2017-2018 lease-up results primarily
related to three challenging markets are expected to impact our
FFOM guidance by approximately four cents, three additional
nonrecurring or timing items further exacerbated our guidance
reduction by an additional four cents,” said Daniel Perry, American
Campus Communities CFO. “Although the 3.625 coupon achieved on our
recent bond issuance is expected to benefit the company for the
next decade, our original guidance did not anticipate the earlier
timing of the transaction and the corresponding impact to 2017
interest expense. This, combined with the significant expenses
associated with Hurricanes Harvey and Irma and the non-cash
interest expense associated with transferring Blanton Common to the
lender, resulted in the additional four cent impact.”
All guidance is based on the current expectations and judgment
of the company's management team.
A reconciliation of the range provided for projected net income
to projected FFO and FFOM for the fiscal year ending December 31,
2017 is included in Table 5.
Supplemental Information and Earnings Conference Call
Supplemental financial and operating information, as well as
this release, are available in the investor relations section of
the American Campus Communities website, www.americancampus.com. In
addition, the company will host a conference call to discuss third
quarter results and the 2017 outlook on Tuesday, October 24, 2017
at 10:00 a.m. ET (9:00 a.m. CT). Participants from within the U.S.
may dial 888-317-6003 passcode 0065474, and participants outside
the U.S. may dial 412-317-6061 passcode 0065474, at least 10
minutes prior to the call.
To listen to the live broadcast, go to www.americancampus.com at
least 15 minutes prior to the call so that required audio software
can be downloaded. Informational slides in the form of the
supplemental analyst package can be accessed via the website. A
replay of the conference call will be available beginning one hour
after the end of the call until November 7, 2017 by dialing
877-344-7529 or 412-317-0088 conference number 10112317.
Additionally, the replay will be available for one year at
www.americancampus.com.
Non-GAAP Financial Measures
The National Association of Real Estate Investment Trusts
("NAREIT") currently defines Funds from Operations ("FFO") as net
income or loss attributable to common shares computed in accordance
with generally accepted accounting principles ("GAAP"), excluding
gains or losses from depreciable operating property sales,
impairment charges and real estate depreciation and amortization,
and after adjustments for unconsolidated partnerships and joint
ventures. We present FFO because we consider it an important
supplemental measure of our operating performance and believe it is
frequently used by securities analysts, investors and other
interested parties in the evaluation of REITs. We also believe it
is meaningful to present a measure we refer to as FFO-Modified, or
(“FFOM”), which reflects certain adjustments related to the
economic performance of our on-campus participating properties and
excludes property acquisition costs, contractual executive
separation and retirement charges, and other non-cash items, as we
determine in good faith. FFO and FFOM should not be considered as
alternatives to net income or loss computed in accordance with GAAP
as an indicator of our financial performance or to cash flow from
operating activities computed in accordance with GAAP as an
indicator of our liquidity, nor are these measures indicative of
funds available to fund our cash needs, including our ability to
pay dividends or make distributions.
The company defines property net operating income (“NOI”) as
property revenues less direct property operating expenses,
excluding depreciation, but including allocated corporate general
and administrative expenses.
About American Campus Communities
American Campus Communities, Inc. is the largest owner, manager
and developer of high-quality student housing communities in the
United States. The company is a fully integrated, self-managed and
self-administered equity real estate investment trust (REIT) with
expertise in the design, finance, development, construction
management and operational management of student housing
properties. As of September 30, 2017, American Campus Communities
owned 166 student housing properties containing approximately
102,500 beds. Including its owned and third-party managed
properties, ACC's total managed portfolio consisted of 204
properties with approximately 131,300 beds. Visit
www.americancampus.com.
Forward-Looking Statements
In addition to historical information, this press release
contains forward-looking statements under the applicable federal
securities law. These statements are based on management’s current
expectations and assumptions regarding markets in which American
Campus Communities, Inc. (the “Company”) operates, operational
strategies, anticipated events and trends, the economy, and other
future conditions. Forward-looking statements are not guarantees of
future performance and involve certain risks and uncertainties,
which are difficult to predict. For discussions of some risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by the forward-looking statements,
please refer to our filings with the Securities and Exchange
Commission, including our Annual Report on Form 10-K for the year
ended December 31, 2016 under the heading “Risk Factors” and under
the heading “Business - Forward-looking Statements” and subsequent
quarterly reports on Form 10-Q. We undertake no obligation to
publicly update any forward-looking statements, including our
expected 2017 operating results, whether as a result of new
information, future events, or otherwise.
Table 1 American Campus Communities, Inc.
and Subsidiaries Consolidated Balance Sheets (dollars
in thousands) September 30, 2017 December 31,
2016 (unaudited) Assets Investments in
real estate: Wholly-owned properties, net $ 6,262,077 $ 5,427,014
Wholly-owned properties held for sale — 25,350 On-campus
participating properties, net 83,095 85,797
Investments in real estate, net 6,345,172 5,538,161
Cash and cash equivalents 16,341 22,140 Restricted cash 25,824
24,817 Student contracts receivable, net 15,531 8,428 Other assets1
284,023 272,367
Total
assets $ 6,686,891 $
5,865,913 Liabilities and equity
Liabilities: Secured mortgage, construction and bond debt $ 662,874
$ 688,195 Unsecured notes 1,190,296 1,188,737 Unsecured term loans
646,675 149,065 Unsecured revolving credit facility 266,440 99,300
Accounts payable and accrued expenses 79,612 76,614 Other
liabilities2 214,918 158,437
Total
liabilities 3,060,815 2,360,348
Redeemable noncontrolling interests 112,270
55,078 Equity:
American Campus Communities, Inc. and
Subsidiaries stockholders’ equity:
Common stock 1,364 1,322 Additional paid in capital 4,321,228
4,118,842 Common stock held in rabbi trust (2,944 ) (975 )
Accumulated earnings and dividends (816,360 ) (670,137 )
Accumulated other comprehensive loss (3,195 ) (4,067
)
Total American Campus Communities, Inc.
and Subsidiaries stockholders’ equity
3,500,093 3,444,985 Noncontrolling interests – partially owned
properties 13,713 5,502
Total
equity 3,513,806 3,450,487
Total liabilities and equity $
6,686,891 $ 5,865,913
1.
As of September 30, 2017, other assets include approximately $9.4
million related to net deferred financing costs on our revolving
credit facility and the net value of in-place leases.
2.
As of September 30, 2017, other liabilities include approximately
$64.6 million in deferred revenue and fee income.
Table 2 American Campus Communities, Inc. and
Subsidiaries Consolidated Statements of Comprehensive
Income (unaudited, dollars in thousands, except share and
per share data) Three Months Ended September
30, Nine Months Ended September 30,
2017 2016
2017 2016
Revenues Wholly-owned properties $ 183,569 $ 185,694 $
531,556 $ 546,078 On-campus participating properties 6,799 6,758
23,128 23,018 Third-party development services 3,566 773 4,697
3,929 Third-party management services 2,291 2,376 7,193 7,039
Resident services 713 810 2,310
2,325
Total revenues 196,938
196,411 568,884 582,389 Operating
expenses Wholly-owned properties 99,423 100,602 249,552 257,175
On-campus participating properties 3,923 3,784 11,080 10,125
Third-party development and management services 3,879 3,340 11,789
10,638 General and administrative1 8,684 5,375 25,200 16,810
Depreciation and amortization 61,125 52,067 169,391 159,486
Ground/facility leases 2,329 1,965 7,151 6,736 Provision for real
estate impairment2 — — 15,317
—
Total operating expenses
179,363 167,133 489,480 460,970
Operating income 17,575 29,278 79,404
121,419 Nonoperating income and (expenses)
Interest income 1,259 1,272 3,723 4,026 Interest expense (18,654 )
(19,016 ) (47,944 ) (61,762 ) Amortization of deferred financing
costs (1,146 ) (1,344 ) (3,197 ) (5,238 ) (Loss) gain from
disposition of real estate — —
(632 ) 17,409
Total nonoperating expense
(18,541 ) (19,088 )
(48,050 ) (45,565 )
(Loss) income before income taxes (966 ) 10,190 31,354
75,854 Income tax provision (267 ) (345 ) (791
) (1,035 )
Net (loss) income (1,233 )
9,845 30,563 74,819 Net income attributable to
noncontrolling interests (79 ) (201 ) (587 )
(1,150 )
Net (loss) income attributable to ACC,
Inc. and Subsidiaries common stockholders
$ (1,312 ) $ 9,644
$ 29,976 $ 73,669
Other comprehensive income (loss) Change in fair value of
interest rate swaps and other 233 1,271
872 (162 )
Comprehensive (loss) income
$ (1,079 ) $ 10,915
$ 30,848 $ 73,507 Net
(loss) income per share attributable to ACC, Inc.
and Subsidiaries common
shareholders
Basic $ (0.01 ) $ 0.07
$ 0.21 $ 0.57
Diluted $ (0.01 ) $
0.07 $ 0.21 $ 0.56
Weighted-average common shares outstanding
Basic 136,421,198
130,786,985 134,708,361
128,239,294 Diluted
136,421,198 131,568,371
135,585,850 129,034,401
1.
The nine months ended September 30, 2017 include $4.5 million of
contractual executive separation and retirement charges incurred in
the first and second quarter of 2017 with regard to the retirement
of the company's former Chief Financial Officer. The three and nine
months ended September 30, 2017 amounts include $2.9 million in
transaction costs related to our initial investment in the Core
Spaces/DRW joint ventures.
2.
Represents an impairment charge recorded in the second quarter of
2017 for one wholly-owned property currently in receivership that
is in the process of being transferred to the lender in settlement
of the property's $27.4 million mortgage loan that matured in
August 2017.
Table 3 American Campus
Communities, Inc. and Subsidiaries Consolidated Statements
of Funds from Operations (unaudited, dollars in thousands,
except share and per share data) Three Months
Ended September 30, Nine Months Ended
September 30, 2017
2016 2017
2016
Net (loss) income attributable to ACC,
Inc. and Subsidiaries common stockholders
$ (1,312 ) $ 9,644 $ 29,976 $ 73,669 Noncontrolling interests 85
201 593 1,150 Loss (gain) from disposition of real estate — — 632
(17,409 ) Elimination of provision for real estate impairment1 — —
15,317 — Real estate related depreciation and amortization
60,202 51,301 166,931
157,232
Funds from operations ("FFO") attributable to
common stockholders and OP unitholders 58,975
61,146 213,449 214,642 Elimination of
operations of on-campus participating properties Net loss (income)
from on-campus participating properties 479 365 (1,373 ) (1,702 )
Amortization of investment in on-campus participating properties
(1,892 ) (1,839 ) (5,621 ) (5,493 )
57,562 59,672 206,455 207,447 Modifications to reflect operational
performance of on-campus participating properties Our share of net
cash flow2 452 351 1,987 2,216 Management fees 306
304 1,046 1,027
Contribution from on-campus participating properties 758 655 3,033
3,243 Property acquisition costs3 2,855 114 2,855 114
Contractual executive separation and retirement charges4 —
— 4,515 —
Funds
from operations-modified ("FFOM") attributable to common
stockholders and OP unitholders $ 61,175
$ 60,441 $ 216,858
$ 210,804 FFO per share –
diluted $ 0.43 $ 0.46
$ 1.56 $ 1.65
FFOM per share – diluted $ 0.44
$ 0.45 $ 1.59 $
1.62 Weighted average common shares
outstanding - diluted 138,328,932
132,877,380 136,686,611
130,407,761
1.
Represents an impairment charge recorded for a wholly-owned
property currently in receivership that is in the process of being
transferred to the lender in settlement of the property's $27.4
million mortgage loan that matured in August 2017.
2.
50% of the properties’ net cash available for distribution after
payment of operating expenses, debt service (including repayment of
principal) and capital expenditures. Represents actual amounts
accrued for the interim periods, which is included in
ground/facility leases expense in the consolidated statements of
comprehensive income (refer to Table 2).
3.
The three and nine months ended September 30, 2017 amounts
represent transaction costs related to our initial investment in
the Core Spaces/DRW joint ventures.
4.
Represents contractual executive separation and retirement charges
incurred in the first and second quarter of 2017 with regard to the
retirement of the company's former Chief Financial Officer.
Table 4 American Campus Communities, Inc.
and Subsidiaries Wholly-Owned Properties Results of
Operations (unaudited, dollars in thousands)
Three Months Ended September 30, Nine Months Ended
September 30, 2017 2016
$ Change % Change
2017 2016 $ Change
% Change Wholly-owned properties
revenues Same store properties $ 162,776 $ 160,636 $ 2,140
1.3 % $ 490,177 $ 478,327 $ 11,850
2.5
% New properties 20,637 4,187 16,450 39,774 4,291 35,483
Sold and held for sale properties1 869 21,681
(20,812 ) 3,915 65,785 (61,870 )
Total revenues2 $ 184,282 $
186,504 $ (2,222 ) (1.2
%) $ 533,866 $ 548,403 $
(14,537 ) (2.7 %) Wholly-owned
properties operating expenses Same store properties3 $ 87,902 $
85,126 $ 2,776
3.3 % $ 227,993 $ 220,724 $ 7,269
3.3 % New properties 11,232 2,242 8,990 19,152 2,400
16,752 Sold and held for sale properties1 4 289
13,234 (12,945 ) 2,407 34,051
(31,644 )
Total operating expenses $
99,423 $ 100,602 $ (1,179
) (1.2 %) $ 249,552 $
257,175 $ (7,623 ) (3.0
%) Wholly-owned properties net operating income Same
store properties5 $ 74,874 $ 75,510 $ (636 )
(0.8 %)
$ 262,184 $ 257,603 $ 4,581
1.8 % New properties
9,405 1,945 7,460 20,622 1,891 18,731 Sold and held for sale
properties1 580 8,447 (7,867 )
1,508 31,734 (30,226 )
Total net operating
income $ 84,859 $ 85,902 $
(1,043 ) (1.2 %) $
284,314 $ 291,228 $ (6,914
) (2.4 %) Note: The same store grouping
above represents properties owned and operating for both of the
entire years ended December 31, 2017 and 2016, which are not
conducting or planning to conduct substantial development,
redevelopment, or repositioning activities, and are not classified
as held for sale as of September 30, 2017.
1.
Includes properties sold in 2016 and 2017, and one property
currently in receivership that is in the process of being
transferred to the lender in settlement of the property's $27.4
million mortgage loan that matured in August 2017.
2.
Includes revenues that are reflected as Resident Services Revenue
on the accompanying consolidated statements of comprehensive
income.
3.
Excluding expenses of $1.9 million incurred during the third
quarter of 2017 associated with Hurricanes Harvey and Irma, same
store wholly-owned operating expenses for the three and nine months
ended September 30, 2017 would have increased by 1.0% and 2.4%,
respectively.
4.
Does not include the allocation of payroll and other administrative
costs related to corporate management and oversight.
5.
The three and nine months ended September 30, 2017 include a
reduction of $272,000 and $548,000, respectively, related to 41
beds damaged by a fire occurring at one same store property in
March 2017 and a reduction in beds available for lease at one same
store property renovated during the summer months. The fire damaged
beds are being rebuilt and are anticipated to be available for
occupancy in Spring 2018. Losses incurred in relation to the fire
are covered by the company's business interruption insurance
policy. Proceeds from this policy are anticipated to be received
and recorded in 2018. Excluding the effects of these items and $1.9
million of expenses incurred during the third quarter of 2017
associated with Hurricanes Harvey and Irma, same store wholly-owned
net operating income for the three and nine months ended September
30, 2017 would have increased 2.0% and 2.7%, respectively.
Table 5 American Campus Communities, Inc. and
Subsidiaries
2017 Outlook1
(dollars in thousands, except share and per share data)
Prior Current Low High
Low High Net income $
103,400 $ 116,500 $ 92,800
$ 98,550 Noncontrolling interests 1,700 1,900 1,000
1,100 Loss from disposition of real estate2 — — 650 650 Elimination
of provision for real estate impairment3 — — 15,300 15,300
Depreciation and amortization 211,700 211,700
217,600 217,600
Funds from
operations ("FFO") $ 316,800 $
330,100 $ 327,350 $ 333,200
Elimination of operations from on-campus participating
properties (11,700 ) (12,100 ) (11,750 ) (12,350 ) Contribution
from on-campus participating properties 4,100 4,700 4,200 4,400
Contractual executive separation and retirement charges4 4,550
4,550 4,500 4,500 Property acquisition costs5 —
— 2,850 2,850
Funds
from operations - modified ("FFOM") $ 313,750
$ 327,250 $ 327,150
$ 332,600 Net income per
share - diluted $ 0.76 $
0.86 $ 0.68 $ 0.72
FFO per share - diluted $ 2.34
$ 2.44 $ 2.39
$ 2.43 FFOM per share - diluted
$ 2.32 $ 2.42 $
2.28 $ 2.32
Weighted-average common shares outstanding - diluted
135,500,000 135,500,000
137,100,000 137,100,000
1.
The company believes that the financial
results for the fiscal year ending December 31, 2017 may be
affected by, among other factors:
- national and regional economic trends and events;
- the timing of acquisitions and/or dispositions;
- the timing of commencement of construction on owned development
projects;
- the ability of the company to be awarded and the timing of the
commencement of construction on third-party development
projects;
- university enrollment, funding and policy trends;
- the ability of the company to earn third-party management
revenues;
- the amount of income recognized by the taxable REIT
subsidiaries and any corresponding income tax expense;
- the ability of the company to integrate acquired
properties;
- the outcome of legal proceedings arising in the normal course
of business; and
- the finalization of property tax rates and assessed values in
certain jurisdictions.
2.
Represents loss from one property disposed
of during the second quarter of 2017.
3.
Represents an impairment charge recorded
in the second quarter of 2017 for one wholly-owned property
currently in receivership that is in the process of being
transferred to the lender in settlement of the property's $27.4
million mortgage loan that matured in August 2017.
4.
Represents contractual executive
separation and retirement charges incurred with regard to the
retirement of the company's former Chief Financial Officer,
recognized in the first and second quarter 2017.
5.
Represents transaction costs related to
our initial investment in the Core Spaces/DRW transaction.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171023006358/en/
American Campus Communities, Inc., AustinRyan Dennison,
512-732-1000
American Campus Communit... (NYSE:ACC)
Historical Stock Chart
From Mar 2024 to Apr 2024
American Campus Communit... (NYSE:ACC)
Historical Stock Chart
From Apr 2023 to Apr 2024