Filed by American Campus Communities, Inc. Pursuant to Rule 425 under
the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934. Subject company:
GMH Communities Trust Commission File No.: 001-32290.
American
Campus Communities, Inc. Reports First Quarter 2008 Financial Results
AUSTIN, Texas--(BUSINESS WIRE)--American Campus Communities, Inc.
(NYSE:ACC) today announced the following financial results for the
quarter ended March 31, 2008.
Highlights
-
Quarterly FFOM of $0.38 per fully diluted share, compared to zero FFOM
for the same period prior year, which included a compensation charge
of $0.38 per fully diluted share recorded in the first quarter 2007
related to the company’s 2004 Outperformance Bonus Plan.
-
Increased net operating income ("NOI") for same store wholly-owned
properties by 6.3 percent over the first quarter 2007.
-
Achieved same store occupancy for wholly-owned portfolio of 96.9
percent as of March 31, 2008.
-
Entered into a merger agreement with GMH Communities to acquire its
student housing platform for approximately $1.4 billion including
outstanding debt totaling approximately $963 million.
-
Completed $18.1 million in property acquisitions including Sunnyside
Commons, a 161-bed community serving students attending West Virginia
University, and Pirate’s Place, a 528-bed community serving students
attending East Carolina University.
-
Awarded third-party development and management services of a new
550-bed community at Cleveland State University.
-
Awarded six new third-party management assignments, which increases
total pipeline to 11 pending third-party management contracts totaling
9,551 beds commencing 2008 – 2010.
First Quarter 2008 Operating Results
Revenue for the 2008 first quarter totaled $41.4 million, up 18.6
percent from $35.0 million in the 2007 first quarter. Net income for the
2008 first quarter totaled $4.9 million, or $0.18 per fully diluted
share, and includes $153,000 of GMH merger expenses, or $0.01 per fully
diluted share. This compares to a net loss of $4.7 million, or $0.20 per
fully diluted share, for the same quarter in 2007. The company’s net
loss for the 2007 first quarter was due to a compensation charge of $9.6
million, or $0.38 per fully diluted share, related to the company’s 2004
Outperformance Bonus Plan. FFO for the 2008 first quarter totaled $13.2
million, or $0.45 per fully diluted share, and FFOM for the 2008 first
quarter was $11.2 million or $0.38 per fully diluted share. A
reconciliation of FFO and FFOM to net income is shown on Table 3.
NOI for same store wholly-owned properties was $15.4 million in the
quarter, up 6.3 percent from $14.5 million in the 2007 first quarter.
NOI for the total wholly-owned property portfolio increased 16.7 percent
to $18.2 million for the quarter from $15.6 million in the comparable
period of 2007, primarily due to the impact of acquisitions completed
during both periods and a development property placed into service
during 2007.
Subsequent to Quarter End
Leasing status for the same store wholly-owned portfolio was 87 percent
applied for and 82 percent leased for the 2008-2009 academic year as of
April 25, 2008. This compares to 89 percent applied for and 84 percent
leased for the same period prior year. The company’s total owned
portfolio is 87 percent applied for and 81 percent leased.
The company was recently selected by Boise State University to begin the
planning process for the development of an ACE™ (American Campus Equity)
project. This potential multi-phased project could ultimately result in
a housing development containing approximately 2,000 beds.
On April 23, 2008, the company completed a public offering of 9,200,000
shares of its common stock at a price of $28.75 per share, which
includes 1,200,000 shares issued as a result of the underwriters'
exercise of their over-allotment option in full at the closing. The
company received approximately $252.4 million in net proceeds from the
offering.
“Q1 2008 was a monumental quarter for American Campus with the
announcement of our acquisition of the GMH student housing platform,”
said Bill Bayless, ACC CEO. “We believe we can unlock the value of these
assets by applying our proven operating platform, which this quarter
generated a 6.3 percent increase in same store NOI compared to Q1 2007.
In addition, being selected by Boise State to develop multiple projects
under our ACE program is an important step in establishing ACE as the
optimal choice for universities looking to improve on-campus housing
while preserving their credit capacity.”
Portfolio Update
The company entered into a merger agreement with GMH Communities to
acquire its student housing platform for approximately $1.4 billion
including outstanding debt totaling approximately $963 million. For more
details on the agreement, please refer to the press release titled
American
Campus Communities to Acquire GMH Communities Trust
previously
posted on the company’s website
www.studenthousing.com
on
February 12, 2008. The transaction is expected to close in the second
quarter of 2008 and is subject to certain closing conditions, including
approval of the merger by GMH Communities' shareholders and completion
by GMH of the sale of its military housing division.
In February, the company completed $18.1 million in property
acquisitions, which included Sunnyside Commons, a 161-bed community
serving students attending West Virginia University, and Pirate’s Place,
a 528-bed community serving students attending East Carolina University.
Construction of Vista del Sol, the initial phase of a three-phase owned
ACE development at Arizona State University, was 79 percent complete as
of March 31, 2008. The 1,866-bed community is 116 percent applied for
and 100 percent pre-leased for the 2008-2009 academic year.
Construction on the Villas at Chestnut Ridge in Amherst, NY was 85
percent complete as of March 31, 2008. The 552-bed community will serve
students attending the State University of New York, Buffalo and is 92
percent applied for and 90 percent pre-leased for the 2008-2009 academic
year.
The company commenced construction on The Highlands, a 796-bed
third-party development on the campus of Edinboro University in
Pennsylvania, and was awarded third-party development and management
services of a new 550-bed community at Cleveland State University.
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.studenthousing.com
. In addition,
the company will host a conference call to discuss first quarter results
and the 2008 outlook on Wednesday, April 30, 2008 at 11 a.m. EST (10:00
a.m. CST). To participate by telephone, call 866-713-8563 passcode
83931961 at least five minutes prior to the call.
To listen to the live broadcast, go to
www.studenthousing.com
or
www.earnings.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 two hours after the end of
the call until May 7, 2008 by dialing 888-286-8010 or 617-801-6888
passcode 77324732. The replay also will be available for 30 days at
www.studenthousing.com
and at
www.earnings.com
. The call will also be available as a
podcast on
www.REITcafe.com
and on the company’s website shortly
after the call.
Non-GAAP Financial Measures
As defined by NAREIT, FFO represents income (loss) before allocation to
minority interests (computed in accordance with GAAP), excluding gains
(or losses) from sales of property, plus real estate related
depreciation and amortization (excluding amortization of loan
origination costs) 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, many of which present FFO when
reporting their results. FFO is intended to exclude GAAP historical cost
depreciation and amortization of real estate and related assets, which
assumes that the value of real estate diminishes ratably over time.
Historically, however, real estate values have risen or fallen with
market conditions. Because FFO excludes depreciation and amortization
unique to real estate, gains and losses from property dispositions and
extraordinary items, it provides a performance measure that, when
compared year over year, reflects the impact to operations from trends
in occupancy rates, rental rates, operating costs, development
activities and interest costs, providing perspective not immediately
apparent from net income. We compute FFO in accordance with standards
established by the Board of Governors of NAREIT in its March 1995 White
Paper (as amended in November 1999 and April 2002), which may differ
from the methodology for calculating FFO utilized by other equity REITs
and, accordingly, may not be comparable to such other REITs. Further,
FFO does not represent amounts available for management's discretionary
use because of needed capital replacement or expansion, debt service
obligations or other commitments and uncertainties. FFO should not be
considered as an alternative to net income (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 is it indicative of funds
available to fund our cash needs, including our ability to pay dividends
or make distributions.
As noted above, FFO excludes GAAP historical cost depreciation and
amortization of real estate and related assets because these GAAP items
assume that the value of real estate diminishes over time. However,
unlike the ownership of our owned off-campus properties, the unique
features of our ownership interest in our on-campus participating
properties cause the value of these properties to diminish over time.
For example, since the ground leases under which we operate the
participating properties require the reinvestment from operations of
specified amounts for capital expenditures and for the repayment of debt
while our interest in these properties terminates upon the repayment of
the debt, such capital expenditures do not increase the value of the
property to us and mortgage debt amortization only increases the equity
of the ground lessor. Accordingly, when considering our FFO, we believe
it is also a meaningful measure of our performance to modify FFO to
exclude the operations of our on-campus participating properties and to
consider their impact on performance by including only that portion of
our revenues from those properties that are reflective of our share of
net cash flow and the management fees that we receive, both of which
increase and decrease with the operating measure of the properties, a
measure we refer to as FFOM.
The company defines property 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 one of the largest developers,
owners and managers 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,
leasing and management of student housing properties. The company owns
and manages a portfolio of 46 high-quality student housing communities
containing approximately 29,300 beds. Including its owned properties,
the company provides management and leasing services at a total of 66
properties, representing approximately 45,200 beds located on or near
college and university campuses. Additional information is available at
www.studenthousing.com
.
Forward-Looking Statements
This news release contains forward-looking statements, which express the
current beliefs and expectations of management. Except for historical
information, the matters discussed in this news release are
forward-looking statements and can be identified by the use of the words
"anticipate," "believe," "expect," "intend," "may," "might," "plan,"
"estimate," "project," "should," "will," "result" and similar
expressions. Such statements are based on current expectations and
involve a number of known and unknown risks and uncertainties that could
cause our future results, performance or achievements to differ
significantly from the results, performance or achievements expressed or
implied by such forward-looking statements.
Our actual results could differ materially from those anticipated in
these forward-looking statements as a result of various factors,
including risks and uncertainties related to the proposed transactions
(including but not limited to (i) the occurrence of any effect, event,
development or change that could give rise to the termination of the
definitive agreements, (ii) the inability to complete the proposed
transactions, including in the case of the merger, due to the failure of
GMH’s shareholders to approve the merger, (iii) the failure of any party
to satisfy the conditions to the closing of the transactions and (iv)
the failure of ACC to obtain the necessary financing arrangements set
forth in a commitment letter received in connection with the proposed
merger), inherent in the national economy, the real estate industry in
general, and in our specific markets; the effect of terrorism or the
threat of terrorism; legislative or regulatory changes including changes
to laws governing REITs; our dependence on key personnel whose continued
service is not guaranteed; availability of qualified acquisition and
development targets; availability of capital and financing; rising
interest rates; rising insurance rates; impact of ad valorem and income
taxation; changes in generally accepted accounting principals; and our
continued ability to successfully lease and operate our properties.
While we believe these forward-looking statements are based on
reasonable assumptions, we can give no assurance that our expectations
will be achieved. These forward-looking statements are made as of the
date of this news release, and we undertake no obligation to update
publicly or revise any forward-looking statement, whether as a result of
new information, future developments or otherwise.
Additional Information about the Merger and Where to Find It
This press release does not constitute an offer of any securities for
sale. In connection with the merger, American Campus Communities, Inc.
(“ACC”) has filed with the SEC a registration statement on Form S-4,
which includes a proxy statement/prospectus of GMH Communities Trust
(“GMH”) and ACC and other relevant materials in connection with the
proposed transactions. The proxy statement/prospectus will be mailed to
GMH shareholders starting on April 30, 3008. Investors and security
holders of ACC and GMH are urged to read the proxy statement/prospectus
and the other relevant material when they become available because they
will contain important information about ACC, GMH and the proposed
transactions. The proxy statement/prospectus and other relevant
materials (when they become available), and any and all documents filed
by ACC or GMH with the SEC, may be obtained free of charge at the SEC’s
web site at
www.sec.gov
. Investors and security holders may
obtain free copies of the documents filed with the SEC by ACC by
directing a written request to American Campus Communities, Inc., 805
Las Cimas Parkway, Suite 400, Austin, Texas 78746 Attention: Investor
Relations. In addition, investors and security holders may obtain free
copies of the documents filed with the SEC by GMH Communities by
directing a written request to GMH Communities Trust, 10 Campus
Boulevard, Newtown Square, Pennsylvania 19073, Attention: Investor
Relations. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME
AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT
TO THE PROPOSED TRANSACTIONS.
ACC, GMH and their respective executive officers, directors and trustees
may be deemed to be participants in the solicitation of proxies from the
security holders of GMH in connection with the merger. Information about
those executive officers and directors of ACC and their ownership of ACC
common stock is set forth in the proxy statement for ACC’s 2008 Annual
Meeting of Stockholders, which was filed with the SEC on April 2, 2008.
Information about the executive officers and trustees of GMH and their
ownership of GMH common shares is set forth in the Annual Report on Form
10K/A of GMH, which was filed with the SEC on April 29, 2008. Investors
and security holders may obtain additional information regarding the
direct and indirect interests of ACC, GMH and their respective executive
officers, directors and trustees in the merger by reading the proxy
statement and prospectus regarding the merger when they become available.
Table 1
American Campus Communities, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands)
|
|
March 31, 2008
|
|
December 31, 2007
|
Assets
|
(unaudited)
|
|
|
|
|
|
|
Investments in real estate:
|
|
|
|
Wholly-owned properties, net
|
$ 998,167
|
|
|
$ 947,062
|
|
On-campus participating properties, net
|
71,888
|
|
|
72,905
|
|
Investments in real estate, net
|
1,070,055
|
|
|
1,019,967
|
|
|
|
|
|
Cash and cash equivalents
|
13,039
|
|
|
12,073
|
|
Restricted cash
|
15,618
|
|
|
13,855
|
|
Student contracts receivable, net
|
2,641
|
|
|
3,657
|
|
Other assets
|
27,344
|
|
|
26,744
|
|
|
|
|
|
Total assets
|
$ 1,128,697
|
|
|
$ 1,076,296
|
|
|
|
|
|
Liabilities and stockholders’ equity
|
|
|
|
Liabilities:
|
|
|
|
Secured debt
|
$ 568,137
|
|
|
$ 533,430
|
|
Unsecured revolving credit facility
|
36,600
|
|
|
9,600
|
|
Accounts payable and accrued expenses
|
11,833
|
|
|
14,360
|
|
Other liabilities
|
42,372
|
|
|
43,278
|
|
Total liabilities
|
658,942
|
|
|
600,668
|
|
|
|
|
|
Minority interests
|
30,092
|
|
|
31,251
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
Common stock
|
274
|
|
|
273
|
|
Additional paid in capital
|
495,223
|
|
|
494,160
|
|
Accumulated earnings and dividends
|
(52,612
|
)
|
|
(48,181
|
)
|
Accumulated other comprehensive loss
|
(3,222
|
)
|
|
(1,875
|
)
|
Total stockholders’ equity
|
439,663
|
|
|
444,377
|
|
|
|
|
|
Total liabilities and stockholders’ equity
|
$ 1,128,697
|
|
|
$ 1,076,296
|
|
Table 2
American Campus Communities, Inc. and Subsidiaries
Consolidated Statements of Operations
(dollars in thousands, except share and per share data)
|
|
Three Months Ended March 31,
|
|
2008
|
|
2007
|
Revenues:
|
(unaudited)
|
|
|
|
Wholly-owned properties
|
$ 31,681
|
|
|
$ 27,145
|
|
|
On-campus participating properties
|
6,744
|
|
|
6,337
|
|
|
Third-party development services
|
1,656
|
|
|
405
|
|
|
Third-party management services
|
922
|
|
|
722
|
|
|
Resident services
|
438
|
|
|
341
|
|
|
Total revenues
|
41,441
|
|
|
34,950
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
Wholly-owned properties
|
13,885
|
|
|
11,862
|
|
|
On-campus participating properties
|
2,295
|
|
|
2,026
|
|
|
Third-party development and management services
|
2,108
|
|
|
1,294
|
|
|
General and administrative
|
2,134
|
|
|
11,328
|
|
(1)
|
Depreciation and amortization
|
8,029
|
|
|
6,970
|
|
|
Ground/facility leases
|
359
|
|
|
295
|
|
|
Total operating expenses
|
28,810
|
|
|
33,775
|
|
|
|
|
|
|
|
Operating income
|
12,631
|
|
|
1,175
|
|
|
|
|
|
|
|
Non-operating income and (expenses):
|
|
|
|
|
Interest income
|
162
|
|
|
707
|
|
|
Interest expense
|
(6,979
|
)
|
|
(6,460
|
)
|
|
Amortization of deferred financing costs
|
(311
|
)
|
|
(298
|
)
|
|
Loss from unconsolidated joint venture
|
(126
|
)
|
|
-
|
|
|
Total non-operating expenses
|
(7,254
|
)
|
|
(6,051
|
)
|
|
|
|
|
|
|
Income (loss) before income taxes and minority interests
|
5,377
|
|
|
(4,876
|
)
|
|
Income tax provision
|
(60
|
)
|
|
(60
|
)
|
|
Minority interests
|
(408
|
)
|
|
258
|
|
|
Net income (loss)
|
$ 4,909
|
|
|
$ (4,678
|
)
|
|
|
|
|
|
|
Net income (loss) per share – basic and diluted
|
$ 0.18
|
|
|
$ (0.20
|
)
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
Basic
|
27,331,896
|
|
|
22,942,737
|
|
|
Diluted
|
29,161,145
|
|
|
25,241,190
|
|
|
(1)
Includes a compensation charge of $9.6 million, or $0.38
per fully diluted share, related to the company’s 2004 Outperformance
Bonus Plan.
Table 3
American Campus Communities, Inc. and Subsidiaries
Calculation of FFO and FFOM
(unaudited, dollars in thousands, except share and per share
data)
|
|
Three Months Ended March 31,
|
|
2008
|
|
2007
|
|
$ Change
|
Net income (loss)
|
$ 4,909
|
|
|
$ (4,678
|
)
|
|
$ 9,587
|
|
Minority interests
|
408
|
|
|
(258
|
)
|
|
666
|
|
Loss from unconsolidated joint venture
(1)
|
126
|
|
|
-
|
|
|
126
|
|
FFO from unconsolidated joint venture
(1)
|
(126
|
)
|
|
-
|
|
|
(126
|
)
|
Real estate related depreciation and amortization
|
7,848
|
|
|
6,876
|
|
|
972
|
|
Funds from operations (“FFO”)
|
13,165
|
|
|
1,940
|
|
|
11,225
|
|
|
|
|
|
|
|
Elimination of operations from on-campus participating properties
and unconsolidated joint venture:
|
|
|
|
|
|
Net income from on-campus participating properties
|
(1,682
|
)
|
|
(1,577
|
)
|
|
(105
|
)
|
Amortization of investment in on-campus participating properties
|
(1,069
|
)
|
|
(1,061
|
)
|
|
(8
|
)
|
FFO from unconsolidated joint venture
(1)
|
126
|
|
|
-
|
|
|
126
|
|
Funds from operations excluding participating properties and
unconsolidated joint venture
|
10,540
|
|
|
(698
|
)
|
|
11,238
|
|
Modifications to reflect operational performance of on-campus
participating properties:
|
|
|
|
|
|
Our share of net cash flow
(2)
|
359
|
|
|
295
|
|
|
64
|
|
Management fees
|
308
|
|
|
290
|
|
|
18
|
|
Impact of on-campus participating properties
|
667
|
|
|
585
|
|
|
82
|
|
Funds from Operations—modified for operational performance of
on-campus participating properties (“FFOM”)
|
11,207
|
|
|
(113
|
)
|
|
11,320
|
|
Compensation expense related to 2004 Outperformance Bonus Plan
|
-
|
|
|
9,636
|
|
|
(9,636
|
)
|
FFOM, excluding compensation expense related to 2004
Outperformance Bonus Plan
|
$ 11,207
|
|
|
$ 9,523
|
|
|
$ 1,684
|
|
FFO per share - diluted
|
$ 0.45
|
|
|
$ 0.08
|
|
|
|
FFOM per share - diluted
|
$ 0.38
|
|
|
$ -
|
|
|
|
FFOM per share, excluding compensation expense related to 2004
Outperformance Bonus Plan – diluted
|
$ 0.38
|
|
|
$ 0.38
|
|
|
|
Weighted average common shares outstanding - diluted
|
29,161,145
|
|
|
25,394,550
|
|
|
|
(1)
Represents the Hampton Roads Military Housing
unconsolidated joint venture, which closed December 2007. Our share of
the FFO from this unconsolidated joint venture is included for purposes
of calculating the company’s FFO but is excluded for purposes of
calculating FFOM, as management believes this amount does not accurately
reflect the company’s participation in the economics of the transaction.
For the three months ended March 31, 2008, our share of the venture’s
FFO equals our share of net loss, as there was no depreciation expense
incurred for the period.
(2)
50 percent of the properties’ net cash available for
distribution after payment of operating expenses, debt service
(including repayment of principal) and capital expenditures. Represents
amounts accrued for the interim periods.
CONTACT:
American Campus Communities, Inc., Austin
Gina Cowart,
512-732-1000
Filed by American Campus Communities, Inc. Pursuant to Rule 425 under
the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934. Subject company:
GMH Communities Trust Commission File No.: 001-32290.
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