Attached files
| file | filename |
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| 8-K - 8-K - AMERICAN CAMPUS COMMUNITIES INC | form8-kq12016earningsrelea.htm |
| EX-99.1 - EXHIBIT 99.1 - AMERICAN CAMPUS COMMUNITIES INC | q12016earningsrelease.htm |
Supplemental Analyst Package 1Q 2016 April 25, 2016
Table of Contents Financial Highlights 1 Consolidated Balance Sheets 2 Consolidated Statements of Comprehensive Income 3 Consolidated Statements of Funds from Operations 4 Wholly-Owned Properties Results of Operations 5 Same Store Wholly-Owned Properties Operating Expenses 6 Seasonality of Operations 7 2016 / 2017 Leasing Status 8 Investment Update 9 Owned Development Update 10 Third-Party Development Update 11 Management Services Update 12 Capital Structure 13 Interest Coverage 14 Capital Allocation – Long Term Funding Plan 15 2016 Outlook - Summary 16 2016 Outlook – Detail 17 Detail of Same Store Groupings 18 Definitions 19 Investor Information 21
Financial Highlights ($ in thousands, except share and per share data) 1. Excluding net gains from property dispositions and losses from the early extinguishment of debt, net income attributable to ACC for the three months ended March 31, 2016 and 2015 would have been $28.2 million and $26.5 million, respectively. 2. Refer to the definitions outlined on pages 19 and 20 for detailed definitions of terms appearing on this page. 3. Refer to calculation on page 14. Operating Data 2016 2015 $ Change % Change Total revenues 199,995$ 192,493$ 7,502$ 3.9% Operating income 53,035 50,176 2,859 5.7% Net income attributable to ACC1 45,587 70,197 (24,610) -35.1% Net income per share - basic 0.37 0.63 Net income per share - diluted 0.36 0.62 Funds From Operations ("FFO") 81,846 77,039 4,807 6.2% FFO per share—diluted 0.65 0.68 (0.03) -4.4% Funds From Operations - Modified ("FFOM") 78,168 76,082 2,086 2.7% FFOM per share—diluted 0.62 0.67 (0.05) -7.5% Market Capitalization and Unsecured Notes Covenants2 Debt to total market capitalization Net debt to EBITDA Unencumbered asset value to total asset value Total debt to total asset value Secured debt to total asset value Unencumbered asset value to unsecured debt Interest coverage3 14.5% 15.4% 333.1% 260.5% 3.5x 3.7x 5.7x 7.4x 71.5% 71.3% 36.0% 42.8% Three Months Ended March 31, March 31, 2016 December 31, 2015 29.4% 38.2% 1
Consolidated Balance Sheets ($ in thousands) March 31, 2016 December 31, 2015 (unaudited) Assets Investments in real estate: Wholly-owned properties, net 5,574,096$ 5,522,271$ Wholly-owned properties held for sale - 55,354 On-campus participating properties, net 88,990 90,129 Investments in real estate, net 5,663,086 5,667,754 Cash and cash equivalents 387,273 16,659 Restricted cash 40,312 33,675 Student contracts receivable, net 7,024 18,475 Other assets1 2 269,842 269,685 Total assets 6,367,537$ 6,006,248$ Liabilities and equity Liabilities: Secured mortgage, construction and bond debt2 1,087,716$ 1,094,962$ Unsecured notes2 1,187,175 1,186,700 Unsecured term loans2 348,376 597,719 Unsecured revolving credit facility - 68,900 Accounts payable and accrued expenses 49,306 71,988 Other liabilities3 155,033 144,811 Total liabilities 2,827,606 3,165,080 Redeemable noncontrolling interests 66,133 59,511 Equity: American Campus Communities, Inc. and Subsidiaries stockholders' equity: Common stock 1,304 1,124 Additional paid in capital 4,026,045 3,325,806 Treasury stock (405) (403) Accumulated earnings and dividends (557,427) (550,501) Accumulated other comprehensive loss (7,240) (5,830) 3,462,277 2,770,196 Noncontrolling interests - partially owned properties 11,521 11,461 Total equity 3,473,798 2,781,657 Total liabilities and equity 6,367,537$ 6,006,248$ Total American Campus Communities, Inc. and Subsidiaries stockholders' equity 1. As of March 31, 2016, other assets include approximately $3.6 million related to net deferred financing costs on our revolving credit facility and the net value of in-place leases. 2. Beginning in 2016, deferred financing costs associated with secured mortgage, construction and bond debt, unsecured notes, and unsecured term loans are subject to new accounting guidance and are presented as a direct reduction to the carrying value of the debt. Prior period amounts have been reclassified to conform to the current period presentation. 3. As of March 31, 2016, other liabilities include approximately $40.7 million in deferred revenue and fee income. 2
Consolidated Statements of Comprehensive Income (Unaudited, $ in thousands, except share and per share data) 2016 2015 $ Change Revenues Wholly-owned properties 185,702$ 179,898$ 5,804$ On-campus participating properties 10,046 9,200 846 Third-party development services 1,035 564 471 Third-party management services 2,410 2,001 409 Resident services 802 830 (28) Total revenues 199,995 192,493 7,502 Operating expenses Wholly-owned properties 78,851 79,010 (159) On-campus participating properties 3,042 2,668 374 Third-party development and management services 3,738 3,139 599 General and administrative 5,309 4,751 558 Depreciation and amortization 53,716 50,651 3,065 Ground/facility leases 2,304 2,098 206 Total operating expenses 146,960 142,317 4,643 Operating income 53,035 50,176 2,859 Nonoperating income and (expenses) Interest income 1,279 1,112 167 Interest expense (22,627) (21,988) (639) Amortization of deferred financing costs (2,542) (1,379) (1,163) Gain from disposition of real estate 17,409 44,252 (26,843) Loss from early extinguishment of debt - (595) 595 Total nonoperating (expense) income (6,481) 21,402 (27,883) Income before income taxes 46,554 71,578 (25,024) Income tax provision (345) (311) (34) Net income 46,209 71,267 (25,058) Net income attributable to noncontrolling interests (622) (1,070) 448 Net income attributable to ACC, Inc. and Subsidiaries common stockholders 45,587$ 70,197$ (24,610)$ Other comprehensive loss Change in fair value of interest rate swaps and other (1,410) (1,868) 458 Comprehensive income 44,177$ 68,329$ (24,152)$ Net income per share attributable to ACC, Inc. and Subsidiaries common stockholders Basic 0.37$ 0.63$ Diluted 0.36$ 0.62$ Weighted-average common shares outstanding Basic 123,445,985 110,955,099 Diluted 124,266,312 112,974,505 Three Months Ended March 31, 3
Consolidated Statements of Funds from Operations (Unaudited, $ in thousands, except share and per share data) 2016 2015 $ Change Net income attributable to ACC, Inc. and Subsidiaries common stockholders 45,587$ 70,197$ (24,610)$ Noncontrolling interests 622 1,070 (448) Gain from disposition of real estate (17,409) (44,252) 26,843 Real estate related depreciation and amortization 53,046 50,024 3,022 Funds from operations ("FFO") attributable to common stockholders and OP unitholders 81,846 77,039 4,807 Elimination of operations of on-campus participating properties Net income from on-campus participating properties (3,164) (2,668) (496) Amortization of investment in on-campus participating properties (1,823) (1,716) (107) 76,859 72,655 4,204 Modifications to reflect operational performance of on-campus participating properties Our share of net cash flow1 850 875 (25) Management fees 459 427 32 Impact of on-campus participating properties 1,309 1,302 7 Property acquisition costs - 1,530 (1,530) Elimination of loss from early extinguishment of debt2 - 595 (595) Funds from operations-modified ("FFOM") attributable to common stockholders and OP unitholders 78,168$ 76,082$ 2,086$ FFO per share - diluted 0.65$ 0.68$ FFOM per share - diluted 0.62$ 0.67$ Weighted average common shares outstanding - diluted 125,679,948 112,974,505 Three Months Ended March 31, 1. 50% 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, which is included in ground/facility leases expense in the consolidated statements of comprehensive income (refer to page 3). 2. Represents losses associated with the early pay-off of mortgage loans for two properties sold during the three months ended March 31, 2015. Such costs are excluded from gains from disposition of real estate reported in accordance with GAAP. However, we view the losses from early extinguishment of debt associated with the sales of real estate as an incremental cost of the sale transactions because we extinguished the debt in connection with the consummation of the sale transactions and we had no intent to extinguish the debt absent such transactions. We believe that adjusting FFOM to exclude these losses more appropriately reflects the results of our operations exclusive of the impact of our disposition transactions. 4
Wholly-Owned Properties Results of Operations ($ in thousands) 2016 2015 $ Change % Change Wholly-owned properties revenues Same store properties 166,176$ 162,376$ 3,800$ 2.3% New properties 18,195 3,759 14,436 Sold properties1 2,133 14,593 (12,460) Total revenues2 186,504$ 180,728$ 5,776$ 3.2% Wholly-owned properties operating expenses Same store properties3 70,715$ 69,234$ 1,481$ 2.1% New properties 7,028 2,722 4,306 Sold properties1 1,108 7,054 (5,946) Total operating expenses 78,851$ 79,010$ (159)$ -0.2% Wholly-owned properties net operating income Same store properties 95,461$ 93,142$ 2,319$ 2.5% New properties 11,167 1,037 10,130 Sold properties1 1,025 7,539 (6,514) Total net operating income 107,653$ 101,718$ 5,935$ 5.8% Three Months Ended March 31, Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2016 and 2015, and which are not conducting or planning to conduct substantial development or redevelopment activities. Refer to page 18 for detail of our same store groupings. 1. Includes 20 properties sold in 2015, along with two properties sold during the first quarter 2016, which are disclosed on page 9. 2. Includes revenues that are reflected as Resident Services Revenue on the accompanying consolidated statements of comprehensive income. 3. See page 6 for detail of same store operating expenses. 5
Same Store Wholly-Owned Properties Operating Expenses ($ in thousands, except per bed amounts) Total Per Bed Total Per Bed Utilities1 16,594$ 208$ -1.8% 24% 16,902$ 212$ 24% General & administrative and other2 15,032 189 2.3% 21% 14,691 184 21% Property taxes3 15,745 197 4.0% 22% 15,136 190 22% Payroll4 13,971 175 0.9% 20% 13,849 174 20% Repairs and maintenance5 4,827 61 13.6% 7% 4,248 53 6% Marketing6 2,945 37 14.5% 4% 2,573 32 4% Insurance 1,601 20 -12.8% 2% 1,835 23 3% Total same store wholly- owned operating expenses 70,715$ 887$ 2.1% 100% 69,234$ 868$ 100% Weighted average same store wholly-owned beds 79,733 Three Months Ended March 31, 2016 2015 % Change From Prior Year % of Total Operating Expenses % of Total Operating Expenses Note: The same store grouping above represents properties owned and operating for both of the entire years ended December 31, 2016 and 2015, and which are not conducting or planning to conduct substantial development or redevelopment activities. Refer to page 18 for detail of our same store groupings. 1. Represents gross expenses prior to any recoveries from tenants, which are reflected in wholly-owned properties revenues. 2. Includes security costs, shuttle costs, and property-level general and administrative costs as well as an allocation of costs related to corporate management and oversight. Also includes acquisition integration costs, bad debt, food service, and other miscellaneous expenses. 3. The increase over the prior year is primarily due to additional property tax expense resulting from owned development deliveries placed into service in 2014 that were assessed at full value for the first time. Excluding the impact of our 2014 development deliveries, property tax expense would have increased by 3.3% over the prior year. 4. Includes payroll and related expenses for on-site personnel including general managers, maintenance staff, and leasing staff. 5. Includes general maintenance costs such as interior painting, routine landscaping, pest control, fire protection, snow removal, elevator maintenance, roof and parking lot repairs, and other miscellaneous building repair costs. Also includes costs related to the annual turn process. The increase over the prior year is believed to be primarily related to the timing of planned expenditures. Management anticipates a normalized inflationary increase in this category for the full year. 6. Includes costs related to property marketing campaigns associated with our annual leasing efforts. 6
Seasonality of Operations ($ in thousands, except per bed amounts) March 31, 2015 June 30, 2015 September 30, 2015 December 31, 2015 March 31, 2016 Total/Weighted Average- Last 12 Months 2016 same store properties Revenue per occupied bed Rental revenue per occupied bed per month 643$ 630$ 650$ 663$ 661$ 651$ Other income per occupied bed per month1 51 60 75 53 53 60 Total revenue per occupied bed 694$ 690$ 725$ 716$ 714$ 711$ Average number of owned beds 79,733 79,733 79,733 79,733 79,733 79,733 Average physical occupancy for the quarter 97.8% 93.0% 91.3% 97.8% 97.4% 94.9% Total revenue 162,376$ 153,387$ 158,271$ 167,434$ 166,176$ 645,268$ Property operating expenses 69,234 69,245 87,580 70,984 70,715 298,524 Net operating income 93,142$ 84,142$ 70,691$ 96,450$ 95,461$ 346,744$ Operating margin 57.4% 54.9% 44.7% 57.6% 57.4% 53.7% 2016 new properties Revenue per occupied bed Rental revenue per occupied bed per month 777$ 800$ 649$ 786$ 784$ 759$ Other income per occupied bed per month1 114 92 98 75 71 80 Total revenue per occupied bed 891$ 892$ 747$ 861$ 855$ 839$ Average number of owned beds 1,429 2,978 5,263 7,738 7,738 5,929 Average physical occupancy for the quarter 98.4% 85.1% 82.3% 90.5% 91.7% 88.4% Total revenue 3,759$ 6,780$ 9,704$ 18,097$ 18,195$ 52,776$ Property operating expenses 2,722 3,888 6,873 7,041 7,028 24,830 Net operating income 1,037$ 2,892$ 2,831$ 11,056$ 11,167$ 27,946$ Operating margin 27.6% 42.7% 29.2% 61.1% 61.4% 53.0% ALL PROPERTIES Revenue per occupied bed Rental revenue per occupied bed per month 646$ 636$ 650$ 674$ 671$ 658$ Other income per occupied bed per month1 52 60 76 54 54 61 Total revenue per occupied bed 698$ 696$ 726$ 728$ 725$ 719$ Average number of owned beds 81,162 82,711 84,996 87,471 87,471 85,662 Average physical occupancy for the quarter 97.8% 92.7% 90.7% 97.1% 96.9% 94.4% Total revenue 166,135$ 160,167$ 167,975$ 185,531$ 184,371$ 698,044$ Property operating expenses 71,956 73,133 94,453 78,025 77,743 323,354 Net operating income 94,179$ 87,034$ 73,522$ 107,506$ 106,628$ 374,690$ Operating margin 56.7% 54.3% 43.8% 57.9% 57.8% 53.7% Sold properties2 Total revenue 14,593$ 8,002$ 3,078$ 2,537$ 2,133$ 15,750$ Property operating expenses 7,054 4,118 1,958 1,139 1,108 8,323 Net operating income 7,539$ 3,884$ 1,120$ 1,398$ 1,025$ 7,427$ Three Months Ended Note: The same store grouping above represents properties owned and/or operating for both the entire years ended December 31, 2016 and 2015, and which are not conducting or planning to conduct substantial development or redevelopment activities. Refer to page 18 for detail of our same store groupings. 1. Other income is all income other than Net Student Rent. This includes, but is not limited to, utility income, damages, parking income, summer conference rent, application and administration fees, income from retail tenants, etc. 2. Includes 20 properties sold in 2015, along with two properties sold during the first quarter 2016, which are disclosed on page 9. 7
2016 / 2017 Leasing Status Note: The same store grouping presented above for purposes of disclosing the pre-leasing status for the upcoming 2016/2017 academic year represents properties that will be classified as same store properties in 2017. Refer to page 18 for detail of our same store groupings. 1. As of April 22, 2016 for current year and April 22, 2015 for prior year. 2. Rentable beds exclude beds needed for on-site staff. 3. As of September 30, 2015. 4. Properties not owned or under ACC management during the prior year, or properties whose leasing progress is not comparable to the prior year as a result of plans to renovate or redevelop the property, are excluded for purposes of calculating the prior year percentage of rentable beds. 5. Projected rate increase reflects projected rental rates anticipated to be achieved through the end of the company’s leasing cycle, up to targeted occupancy. 6. Properties currently under construction with an anticipated delivery date of Fall 2017 are not included because these properties will not begin undertaking leasing activities until Fall 2016. 8 Prior Year Applications + Leases Applications + Leases1 Rentable Beds2 % of Rentable Beds % of Rentable Beds 2017 Same Store Wholly-owned Properties Final Fall 2015 occupancy of 98% or greater 53,901 61,484 87.7% 88.9% 61,612 99.6% Final Fall 2015 occupancy between 95% and 98% 8,542 11,105 76.9% 73.9% 11,148 96.8% Final Fall 2015 occupancy less than 95% 10,180 14,620 69.6% 60.8% 14,711 85.3% Total 2017 Same Store Wholly-owned Properties 72,623 87,209 83.3% 82.4%4 87,471 96.8% New Wholly-owned Properties6 2,640 3,171 83.3% n/a 3,193 n/a Total - Wholly-owned Properties 75,263 90,380 83.3% 82.4%4 90,664 96.8%4 Prior Year Leases Leases1 Rentable Beds2 % of Rentable Beds % of Rentable Beds 2017 Same Store Wholly-owned Properties Final Fall 2015 occupancy of 98% or greater 50,379 61,484 81.9% 82.4% 61,612 99.6% Final Fall 2015 occupancy between 95% and 98% 7,966 11,105 71.7% 67.0% 11,148 96.8% Final Fall 2015 occupancy less than 95% 9,128 14,620 62.4% 53.5% 14,711 85.3% Total 2017 Same Store Wholly-owned Properties 67,473 87,209 77.4% 75.7%4 87,471 96.8% 3.0% 3.0% New Wholly-owned Properties6 2,131 3,171 67.2% n/a 3,193 n/a n/a n/a Total - Wholly-owned Properties 69,604 90,380 77.0% 75.7%4 90,664 96.8%4 3.0% 3.0% Current Projected Rate Increase5 Current Year Design Beds Final Fall 2015 Occupancy3 Current Year Design Beds Final Fall 2015 Occupancy3 Initial Projected Rate Increase
Investment Update ($ in thousands) DISPOSITIONS Project Location Primary University Served Beds Closing Date Sales Price Outstanding Mortgage Debt The Edge - Orlando Orlando, FL University of Central Florida 930 March 11, 2016 -$ University Village - Sacramento Sacramento, CA California State Univ. - Sacramento 394 March 24, 2016 - 1,324 73,800$ -$ 9
Owned Development Update ($ in thousands) OWNED DEVELOPMENT PROJECTS UNDER CONSTRUCTION Project Location Primary University Served Project Type Beds CIP2 Land and Other3 Total Costs Incurred0 Scheduled Completion Currie Hall Los Angeles, CA University of Southern California ACE 456 52,200$ 39,488$ 51$ 39,539$ August 2016 Fairview House Indianapolis, IN Butler University ACE 633 39,600 31,229 - 31,229 August 2016 University Pointe Louisville, KY University of Louisville ACE 531 44,100 28,225 8 28,233 August 2016 Merwick Stanworth Phase II Princeton, NJ Princeton University ACE 379 46,500 29,007 675 29,682 Fall 20164 U Club on 28th Boulder, CO University of Colorado Off-campus 400 52,200 28,913 9,971 38,884 August 2016 U Club Sunnyside Morgantown, WV West Virginia University Off-campus 534 46,300 27,755 7,779 35,534 August 2016 SUBTOTAL - 2016 DELIVERIES 2,933 280,900$ 184,617$ 18,484$ 203,101$ Arizona State Univ. Res. Hall Tempe, AZ Arizona State University ACE 1,594 107,800$ 22,207$ -$ 22,207$ August 2017 Sky View Flagstaff, AZ Northern Arizona University ACE 626 56,600 4,174 - 4,174 August 2017 Prairie View A&M Univ. Phase VIII Prairie View, TX Prairie View A&M University ACE 466 26,800 - 419 419 August 2017 U Centre on Turner Columbia, MO University of Missouri Off-campus 718 69,100 6,041 14,005 20,046 August 2017 U Pointe on Speight Waco, TX Baylor University Off-campus 700 49,800 5,205 4,705 9,910 August 2017 21Hundred @ Overton Park Lubbock, TX Texas Tech University Off-campus 1,204 81,600 3,142 16,767 19,909 August 2017 Suites at 3rd Champaign, IL University of Illinois Off-campus 251 25,000 - 1,344 1,344 August 2017 SUBTOTAL - 2017 DELIVERIES 5,559 416,700$ 40,769$ 37,240$ 78,009$ PRESALE DEVELOPMENT PROJECT UNDER CONSTRUCTION Project Location Primary University Served Project Type Beds CIP2 Land and Other3 Total Costs Incurred0 Scheduled Completion The Court at Stadium Centre5 Tallahassee, FL Florida State University Off-campus 260 26,450$ 15,840$ 8,992$ 24,832$ August 2016 OWNED DEVELOPMENT PIPELINE6 7 Project Location Primary University Served Project Type Anticipated Commencement Approx. Targeted Beds Estimated Project Cost1 8 Targeted Completion U Club Binghamton Binghamton, NY SUNY Binghamton University Off-campus Q2 2016 562 53,000$ August 2017 Butler University Phase II Indianapolis, IN Butler University ACE Q3/Q4 2016 633 39,000 Fall 2018 Univ. of California, Berkeley Berkeley, CA University of California, Berkeley ACE Q4 2016 783 94,000 Fall 2018 Virginia Commonwealth Univ. Richmond, VA Virginia Commonwealth Univ. ACE TBD 1,524 92,000 Fall 2018 Northeastern University Boston, MA Northeastern University ACE Q1 2017 798 150,000 Fall 2019 Carbondale Development Carbondale, IL Southern Illinois University Off-campus TBD 650 32,000 TBD 4,950 460,000$ Purchase Price As of March 31, 2016 Estimated Project Cost1 As of March 31, 2016 1. In certain instances at ACE properties, the company agrees to construct spaces within the property that will ultimately be owned, managed, and funded by the universities. Such spaces include but are not limited to dining, childcare, retail, academic, and office facilities. The Estimated Project Cost excludes the costs of the construction of such facilities, as they will be reimbursed by the universities. 2. The total construction in progress (“CIP”) balance above excludes $3.3 million related to ongoing renovation projects at operating properties. 3. Consists of amounts incurred to purchase the land for off-campus development projects, as well as other development-related expenditures not included in CIP such as deposits, furniture, etc. 4. This community will serve faculty and staff members of Princeton University and, unlike student housing communities, this property is expected to stabilize in a manner consistent with a multi-family property during the first academic session. 5. In conjunction with the purchase of Stadium Centre in July 2015, we entered into a presale agreement to purchase The Court at Stadium Center, an adjacent property, which will be completed in August 2016. We are obligated to purchase the property as long as certain construction completion deadlines and other closing conditions are met. The company is responsible for leasing, management, and initial operations of the project while the third-party developer retains development risk during the construction period. In accordance with accounting guidance, the company is including this property in its consolidated financial statements. Costs incurred include contributions made by the Company of $7.0 million. 6. Does not include undeveloped land parcels in seven university markets totaling $31.5 million. 7. Commencement of owned off-campus development projects is subject to final determination of feasibility, execution and closing on definitive agreements, municipal approval processes, fluctuations in the construction market, and current capital market conditions. ACE awards provide the company with the opportunity to exclusively negotiate with the subject universities. Commencement of ACE projects is subject to various levels of university board approval, final determination of feasibility, execution and closing on definitive agreements, municipal approval processes, fluctuations in the construction market, and current capital market conditions. 8. Estimated Project Cost includes land and other predevelopment costs of $20.5 million incurred as of March 31, 2016 for owned development pipeline projects. 10
Third-Party Development Update ($ in thousands) RECENTLY COMPLETED PROJECTS Project Location Primary University Served Beds Total Fees Completed University of Kansas1 Lawrence, KS University of Kansas n/a 500$ Q1 2016 CONTRACTED PROJECTS IN PROGRESS Project Location Primary University Served Beds Total Fees Fees Earned as of March 31, 2016 Fees Earned in Current Year Remaining Fees as of March 31, 2016 Scheduled Completion Northeastern Illinois University Chicago, IL Northeastern Illinois University 440 2,100$ 1,699$ 254$ 401$ August 2016 Oregon State Univ. Cascades Bend, OR Oregon State University 340 1,900 1,200 181 700 December 2016 780 4,000$ 2,899$ 435$ 1,101$ ON-CAMPUS AWARD PIPELINE2 Project Location Anticipated Financing Structure Estimated Fees Texas A&M University Corpus Christi3 Corpus Christi, TX Third-party Q2/Q3 2016 1,400$ Momentum Village Phase II Corpus Christi, TX Third-party 2,300$ Texas A&M University San Antonio San Antonio, TX Third-party TBD Louisville Village Site Louisville, KY ACE n/a Arizona State Univ. Apartments Tempe, AZ ACE n/a La Salle University Philadelphia, PA Third-party TBDTBD Fall 2019 Anticipated Commencement Targeted Completion Q3 2016 Fall 2017 or Fall 2018 TBD Fall 2018 or Fall 2019 TBD Fall 2018 of Fall 2019 Q3 2016 Fall 2017 or Fall 2018 n/a 2016 2015 $ Change Development services revenue 1,035$ 564$ 471$ % of total revenue 0.5% 0.3% Three Months Ended March 31, 1. Under the terms of the predevelopment services agreement, during the first quarter 2016, we earned fees for the performance of various predevelopment activities. This concludes the company’s role in this transaction. 2. These awards relate to speculative development projects that are subject to final determination of feasibility, negotiation, final award, procurement rules and other applicable law, execution and closing of definitive agreements on terms acceptable to the company, and fluctuations in the construction and financing markets. Anticipated commencement and fees are dependent upon the availability of project financing, which is affected by current capital market conditions. 3. Under the terms of a Consultant Agreement, and with the consent of the University’s Board of Regents, we will earn fees for the performance of advisory services related to a not-for-profit entity’s potential purchase of a 1,790-bed apartment community for the benefit of the University. 11
Management Services Update ($ in thousands) 2016 2015 $ Change Management services revenue 2,410$ 2,001$ 409$ % of total revenue 1.2% 1.0% Three Months Ended March 31, 1. Stabilized annual fees are dependent upon the achievement of anticipated occupancy levels. 2. The stabilized annual fee amount does not include an initial operations fee of $90,000 to be earned from December 2015 through August 2016. Subsequent to August 2016, the stabilized annual fee will be approximately $50,000 per year. 12 NEW/PENDING MANAGEMENT CONTRACTS Property Location Approximate Beds Stabilized Annual Fees1 Actual or Anticipated Commencement The Nest Chicago, IL Northeastern Illinois University 440 170$ August 2016 Centennial Place Toronto, Canada Centennial College 742 166 September 2016 Collegeview Commons2 Ontario, Canada Conestoga College 487 50 September 2016 Collegeview Commons Phase II Ontario, Canada Conestoga College 513 50 September 2017 2,182 436$ DISCONTINUED MANAGEMENT CONTRACTS Property Location Beds 2016 Fee Contribution Prior to Termination Discontinued As Of 3170 & 3190 Donnelly Windsor, Ontario University of Windsor 117 4$ April 2016 675 Richmond London, Ontario University of Western Ontario 451 16 April 2016 West Village Suites Hamilton, Ontario McMaster University 449 37 June 2016 The Luxe Waterloo, Ontario University of Waterloo 955 78 June 2016 Village Suites Oshawa, Ontario Durham College 588 42 June 2016 Centennial Toronto, Canada Centennial College 368 51 September 2016 2,928 228$ Primary University Served Primary University Served
Capital Structure as of March 31, 2016 ($ in millions, except per share data) Weighted Average Interest Rate Of Debt Maturing Each Year Fixed Rate Mortgage Loans 6.0% 5.8% 4.2% - 5.6% 5.4% 4.1% 7.2% 4.5% 3.7% Total Debt 6.0% 3.5% 4.2% - 3.6% 4.2% 4.1% 4.0% 4.3% 4.6% Note – refer to the definitions outlined on pages 19 and 20 for detailed definitions of terms appearing on this page. 1. Excludes net unamortized debt premiums related to mortgage loans assumed in connection with acquisitions of $47.4 million, unamortized original issue discount on unsecured notes of $2.2 million, and unamortized deferred financing costs of $18.3 million. 2. Based on share price of $47.09 and fully diluted share count of 132,621,584 as of March 31, 2016. Assumes conversion of 1,404,405 common and preferred Operating Partnership units and 783,985 unvested restricted stock awards. 3. Excludes accumulated depreciation of $899.0 million and receivables and intangible assets, net of accumulated amortization, of $50.3 million. 4. Refer to page 14 for a calculation of Interest Coverage and a reconciliation to the nearest GAAP measures. 5. Including the amortization of net debt premiums related to mortgage loans assumed in connection with property acquisitions, the effective interest rate for fixed rate mortgage loans is 3.9%. 6. In February 2016, the company repaid the balance of the revolving credit facility in full using proceeds from the issuance of 17.9 million common shares. 7. On January 29, 2016 the company refinanced $150 million of its $350 million unsecured term loan by extending the maturity date for this $150 million portion from 2017 to 2021. In February 2016, the company repaid the $250 million term loan maturing in 2019 using proceeds from the issuance of 17.9 million common shares. 8. The company’s variable rate debt consists of the unsecured revolving credit facility. As a result of the transactions described above, all variable debt was repaid in February 2016. 13
Interest Coverage ($ in thousands) 14 June 30, 2015 September 30, 2015 December 31, 2015 March 31, 2016 Last Twelve Months Net income attributable to ACC, Inc. and Subsidiaries common stockholders 15,580$ 1,855$ 28,359$ 45,587$ 91,381$ Net income attributable to noncontrolling interests 338 161 501 622 1,622 Interest expense 20,586 21,053 24,162 22,627 88,428 Income tax provision 310 311 310 345 1,276 Depreciation and amortization 51,578 51,874 54,685 53,716 211,853 Amortization of deferred financing costs 1,338 1,315 1,518 2,542 6,713 Share-based compensation 1,915 1,704 2,481 2,651 8,751 Loss from early extinguishment of debt 1,175 - - - 1,175 Gain from disposition of real estate (3,790) (4,657) - (17,409) (25,856) Other adjustments - (388) - - (388) Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA") 89,030$ 73,228$ 112,016$ 110,681$ 384,955$ Pro-forma adjustments to EBITDA1 4,486 Adjusted EBITDA 389,441$ Interest Expense from consolidated statement of comprehensive income 20,586$ 21,053$ 24,162$ 22,627$ 88,428$ Amortization of mortgage debt premiums/discounts 2,819 3,106 3,150 3,236 12,311 Capitalized interest 2,943 2,713 1,461 2,090 9,207 Change in accrued interest payable (718) 1,054 (4,366) 4,884 854 Cash Interest Expense 25,630$ 27,926$ 24,407$ 32,837$ 110,800$ Pro-forma adjustments to Cash Interest Expense1 1,752 Adjusted Interest Expense 112,552$ Interest Coverage 3.5x Three Months Ended Note: refer to the definitions outlined on pages 19 and 20 for detailed definitions of terms appearing on this page. 1. Adjustment to reflect all acquisitions, development deliveries, dispositions, debt repayments and debt refinancings as if such transactions had occurred on the first day of the 12 month period presented.
Capital Allocation – Long Term Funding Plan ($ in millions) 15 1. Includes development projects under construction, and management’s Estimated Project Cost for future development deliveries that are expected to commence construction during the current year, as disclosed on page 10. Estimated Project Cost for 2018 developments includes two projects not yet under construction: Butler University Phase II ($39.0 million) and Univ. of California, Berkeley ($94.0 million). If we elect to move forward with additional developments, we would commence construction in future years. 2. Includes $26.5 million for The Court at Stadium Centre pre-sale development. 3. For purposes of analysis, available cash flow is derived from disclosure in our 2015 Form 10-K and is calculated as net cash provided by operating activities of $261.0 million less dividend payments of $178.5 million, less principal payments on debt of $14.5 million, less recurring capital expenditures of $19.4 million. Calculation results in available cash flow for investment in 2015 of $49.0 million, which is then annualized over the remaining 11 quarters through the end of 2018. 4. Remaining targeted dispositions after the $74 million of dispositions closed during Q1 2016. 5. Refer to definitions outlined on pages 19 and 20 for detailed definitions of terms appearing on this page. 6. Ratios represent the pro forma impact of dispositions and development deliveries assumed in the Sources and Uses table. Yields for developments range from 6.5% - 7.0% and the capitalization rate range for dispositions and/or joint ventures is consistent with those observed in recent transactions for core (5.0%) and non-core (6.3%) student housing assets. Actual ratios will vary based on the timing of dispositions versus the timing of construction funding. The targeted asset dispositions for 2016, consist entirely of non-core assets. Estimated Development Capital Uses: Development Pipeline1 Estimated Project Cost Total Costs Incurred Remaining Capital Needs 2016 Developments Underway2 307$ 228$ 79$ 2017 Developments Underway or Expected to Start in Current Year 470 92 378 2018 Developments Expected to Start in Current Year 133 1 132 Total 910$ 321$ 589$ Estimated Sources: Capital Sources Cash and Cash Equivalents 387$ Estimated Cash Flow available for Investment - through 20183 135 Remaining Targeted Asset Dispositions and/or Joint Ventures through 20164 126 - 526 Total $648 - $1,048 Credit Metric: March 31, 2016 Pro Forma6 Total Debt to Total Asset Value 36.0% 31.0% - 34.8% Net Debt to EBITDA 5.7x 5.0x - 5.8x Sources and Uses for Development - As of March 31, 2016 Selected Credit Metrics5 Note: This analysis demonstrates anticipated funding for the developments currently underway or with expected starts in the current year. As future developments commence, they are expected to be funded via additional dispositions and free cash available for investment.
2016 Outlook – Summary1 ($ in thousands, except share and per-share data) 1. The company believes that the financial results for the fiscal year ending December 31, 2016 may be affected by, among other factors: • national and regional economic trends and events; • the timing of acquisitions and/or dispositions; • interest rate risk; • 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 success of releasing the company’s owned properties for the 2016-2017 academic year. 16 Low High Net income 90,800$ 101,000$ Noncontrolling interests 900 1,100 Depreciation and amortization 195,700 206,100 Funds from operations ("FFO") 287,400$ 308,200$ Elimination of operations from on-campus participating properties (11,000) (11,400) Modifications to reflect operational performance of on-campus participating properties 3,800 4,400 Funds from operations - modified ("FFOM") 280,200$ 301,200$ Net income per share - diluted 0.69$ 0.77$ FFO per share - diluted 2.19$ 2.35$ FFOM per share - diluted 2.14$ 2.30$ Weighted-average common shares outstanding - diluted 130,950,000 130,950,000
2016 Outlook – Detail ($ in thousands, except share and per share data) 1. Refer to page 18 for detail of the 2016 same store and new property groupings. 2. Represents the contribution from two properties (The Edge Orlando and University Village Sacramento) classified as Held for Sale as of December 31, 2015 that were sold in the first quarter 2016. 3. Both the low-end and high-end of the guidance range include $74 million of disposition activity related to the two properties discussed in Note 2. An additional $526 million of dispositions during the second quarter 2016 is also included at the low-end, and an additional $126 million of dispositions during the fourth quarter 2016 is also included at the high-end. Assumes a 6.4% nominal cap rate on dispositions. 4. The low-end of the guidance range assumes, subsequent to their disposition, that we provide third-party management services for a majority of the sold properties assumed in the low-end of the guidance range, as discussed in note 3. 5. Includes ACE properties and excludes on-campus participating properties. 6. Net of capitalized interest and excluding on-campus participating properties. The low-end of the guidance range assumes the extinguishment of $266.0 million of fixed rate mortgage loans (including $55.5 million of mortgage loans scheduled to mature in 2016) with an effective interest rate of 4.37% in connection with the property dispositions assumed at the low-end of the guidance range, as discussed in notes 2 and 3. The high-end of the guidance range assumes the extinguishment of $45.2 million of fixed rate mortgage loans with an effective interest rate of 3.6% in connection with the dispositions assumed at the high-end of the guidance range. 17 Components of 2016 Property Net Operating Income Third-party Services Low High Low High Third-party development services revenue 4,200$ 5,200$ Wholly-owned properties Third-party management services revenue4 10,800$ 9,800$ 2016 same store properties1 Third-party development and mgmt. services expenses 16,500$ 15,100$ Revenue 655,400$ 659,800$ 2.2% - 2.9% Operating expenses (304,000) (302,300) 2.3% - 1.8% Net operating income 351,400 357,500 2.0% - 3.8% Corporate Expenses and Other 2016 new properties net operating Low High income1 52,700 53,200 Net income: 2016 Held for Sale properties net operating income2 1,100 1,100 General and administrative expenses 22,700$ 22,900$ 2016 speculative dispositions Ground/facility leases expense5 6,000$ 6,000$ net operating income3 (21,000) (2,500) Interest income 5,300$ 4,600$ Total wholly-owned properties net Interest expense6 70,500$ 76,000$ operating income 384,200$ 409,300$ Capitalized interest 10,700$ 10,900$ Amortization of deferred financing costs 6,200$ 6,400$ 2016 Property Net Operating Income Guidance Assumptions Income tax provision 1,400$ 1,400$ Low High Timing AY 2016/2017 final leasing results - occupancy 96.75% 98.75% Fall 2016 FFOM: AY 2016/2017 final leasing results - rental rate 3.25% 2.75% Fall 2016 Corporate depreciation 3,500$ 3,300$ Dispositions3 600,000$ 200,000$ See note 3 Contribution from on-campus participating properties 3,800$ 4,400$ Development deliveries 280,900$ 280,900$ See page 10 Mezzanine/pre-sale purchases 26,450$ 26,450$ See page 10 % Change From 2015
Detail of Same Store Groupings as of March 31, 2016 18 # of Design # of Design # of Design # of Design Properties Beds Properties Beds Properties Beds Properties Beds 134 79,733 134 79,733 2015 Acquisition Properties 7 3,535 7 3,535 2015 Development Deliveries 4 3,187 4 3,187 2015 Redevelopment Property 1 1,016 1 1,016 2016 Development Deliveries 7 3,193 7 3,193 2017 Development Deliveries 5 4,842 5 4,842 Total Wholly-owned Properties 134 79,733 24 15,773 146 87,471 12 8,035 Grand Total # of Wholly-owned Properties (All Groupings) 158 Grand Total Wholly-owned Design Beds (All Groupings) 95,506 2016: The 2016 same store grouping represents properties that will be owned and operating for both of the entire calendar years ended December 31, 2016 and 2015. This same store grouping will be used for purposes of presenting our 2016 same store operating results. 2017: The 2017 same store grouping represents properties that will be owned and operating for both of the entire calendar years ended December 31, 2017 and 2016. This same store grouping will be used for purposes of presenting our 2017 same store operating results and our same store leasing status updates throughout 2016. Properties Purchased or Developed Prior to January 1, 2015 Note on Property Portfolio: When disclosing our number of properties and design beds as of a certain date, we include all properties that are owned and operating as of that date, as well as properties that are under construction and anticipated to open for operations in future years. Properties that are in our development pipeline but have not yet commenced construction are not included. New Properties 2017 Grouping2016 Grouping Same Store Properties New Properties Same Store Properties
Definitions ACE The company’s American Campus Equity program, whereby the company enters into long-term ground/facility lease agreements with Universities to invest our capital and to develop, own, and operate on-campus student housing communities. Properties under this structure are considered to be wholly-owned and are included in the company's consolidated financial statements. Adjusted EBITDA* EBITDA, including pro forma adjustments to reflect acquisitions, development deliveries, and dispositions as if such transactions had occurred on the first day of the 12-month period presented. Adjusted Interest Expense Interest Expense, including pro forma adjustments to reflect acquisitions, development deliveries, dispositions, debt repayments, and debt refinancings as if such transactions had occurred on the first day of the 12-month period presented. Cash Cash and cash equivalents, determined on a consolidated basis in accordance with GAAP. Cash Interest Expense* Consolidated interest expense calculated in accordance with GAAP, plus amounts which have been deducted and minus amounts which have been added for, without duplication: (i) the amortization of mark-to-market premiums/discounts on mortgage loans assumed in connection with acquisitions; (ii) capitalized interest; and (iii) the change in accrued interest during the period presented. Design Beds Total beds based on the original property design, generally as specified in the construction documents. EBITDA* Consolidated net income calculated in accordance with GAAP, plus amounts which have been deducted and minus amounts which have been added for, without duplication: (i) interest expense; (ii) provision for income taxes; (iii) depreciation, amortization and all other non-cash items; (iv) provision for gains and losses; (v) noncontrolling interests; and (vi) extraordinary and other non-recurring items, as we determine in good faith. Funds from Operations (”FFO”) Determined based on the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). Calculated as consolidated net income or loss attributable to common shares computed in accordance with GAAP, excluding gains or losses from depreciable operating property sales, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Also excludes non-cash impairment charges. FFO Modified (”FFOM”) FFO modified to reflect certain adjustments related to the economic performance of our on-campus participating properties, and the elimination of property acquisition costs and other non-cash items, as we determine in good faith. The company believes it is meaningful to eliminate the FFO generated from the on-campus participating properties and instead to reflect the company's 50% share of the properties' net cash flow and management and development fees received, as this measure better reflects the economic benefit derived from the company's involvement in the operation of these properties. * These definitions are provided for purposes of calculating the company’s bond covenants and other key ratios. 19
Definitions GAAP Accounting principles generally accepted in the United States of America. Interest Coverage* Adjusted EBITDA / Adjusted Interest Expense. Net Debt* Total Debt less Cash. Net Debt to EBITDA* Net Debt divided by Adjusted EBITDA. Net Operating Income “NOI” Property revenues less direct property operating expenses, excluding depreciation, but including allocated corporate general and administrative expenses. On-campus Participating Properties A transaction structure whereby the company enters into long-term ground/facility lease agreements with Universities to develop, construct, and operate student housing communities. Under the terms of the leases, title to the constructed facilities is held by the University/lessor and such lessor receives 50% of net cash flows, as defined, on an annual basis through the term of the lease. Physical Occupancy Occupied beds, including staff accommodations, divided by Design Beds. Rentable Beds Design beds less beds used by on-site staff. Same Store Grouping Wholly-owned properties owned and operating for both of the entire annual periods presented, and which are not conducting or planning to conduct substantial development or redevelopment activities. Secured Debt* The portion of Total Debt that is secured by a mortgage, trust, deed of trust, deed to secure indebtedness, pledge, security interest, assignment of collateral, or any other security agreement. Total Asset Value* Undepreciated book value of real estate assets and all other assets, excluding receivables and intangibles, of our consolidated subsidiaries, all determined in accordance with GAAP. Total Debt* Total consolidated debt calculated in accordance with GAAP, including capital leases and excluding mark-to-market premiums/discounts on mortgage loans assumed in connection with acquisitions. Total Equity Market Value Fully diluted common shares times the company’s stock price at period-end. Unencumbered Asset Value* The sum of (i) the undepreciated book value of real estate assets which are not subject to secured debt; and (ii) all other assets, excluding accounts receivable and intangibles, for such properties. Does not include assets of unconsolidated joint ventures. Unsecured Debt* The portion of Total Debt that is not Secured Debt. * These definitions are provided for purposes of calculating the company’s bond covenants and other key ratios. 20
Investor Information Corporate Headquarters Investor Relations American Campus Communities, Inc. Tel: (512) 732-1000 Ryan Dennison (512) 732-1000 12700 Hill Country Blvd., Suite T-200 Fax: (512) 732-2450 VP, Investor Relations rdennison@americancampus.com Austin, Texas 78738 www.americancampus.com Executive Management Bill Bayless Chief Executive Officer Jim Hopke Chief Operating Officer Jon Graf Chief Financial Officer William Talbot Chief Investment Officer Research Coverage Jeffery Spector / Jana Galan Bank of America / Merrill Lynch (646) 855-1363 / (646) 855-3081 jeff.spector@baml.com / jana.galan@baml.com Ryan Meliker / Michael Kodesch Canaccord Genuity (212) 389-8094 / (212) 389-8095 rmeliker@canaccordgenuity.com / mkodesch@canaccordgenuity.com Michael Bilerman / Nick Joseph Citigroup Equity Research (212) 816-1383 / (212) 816-1909 michael.bilerman@citi.com / nicholas.joseph@citi.com Vincent Chao / Vlad Rudnytsky Deutsche Bank Securities, Inc. (212) 250-6799 / (212) 250-6090 vincent.chao@db.com / vlad.rudnytsky@db.com Steve Sakwa / Gwen Clark Evercore ISI (212) 446-9462 / (212) 446-5611 ssakwa@evercoreisi.com / gwen.clark@evercoreisi.com Andrew Rosivach / Jeff Pehl Goldman Sachs (212) 902-2796 / (212) 357-4474 andrew.rosivach@gs.com / jeffrey.pehl@gs.com Dave Bragg / Ryan Burke Green Street Advisors (949) 640-8780 / (949) 640-8780 dbragg@greenst.com / rburke@greenst.com Carol Kemple Hilliard Lyons (502) 588-1839 ckemple@hilliard.com Aaron Hecht JMP Securities (415) 835-3963 ahecht@jmpsecurities.com Anthony Paolone / Emil Shalmiyev J.P. Morgan Securities (212) 622-6682 / (212) 622-6615 anthony.paolone@jpmorgan.com / emil.shalmiyev@jpmorgan.com Jordan Sadler / Austin Wurschmidt KeyBanc Capital Markets (917) 368-2280 / (917) 368-2311 jsadler@keybanccm.com / awurschmidt@key.com Drew Babin Robert W. Baird & Co. (215) 553-7816 dbabin@rwbaird.com Alexander Goldfarb / Daniel Santos Sandler O'Neill + Partners, L.P. (212) 466-7937 / (212) 466-7927 agoldfarb@sandleroneill.com / dsantos@sandleroneill.com David Corak Stifel, Nicolaus & Company, Inc. (443) 224-1340 corakd@stifel.com Ross Nussbaum / Nick Yulico UBS Investment Research (212) 713-2484 / (212) 713-3402 ross.nussbaum@ubs.com / nick.yulico@ubs.com American Campus Communities, Inc. is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding American Campus Communities, Inc.'s performance made by such analysts are theirs alone and do not represent the opinions, forecasts or predictions of the company or its management. American Campus Communities, Inc. does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations. 21
Forward-looking Statements In addition to historical information, this supplemental package contains forward-looking statements under the federal securities law. These statements are based on current expectations, estimates and projections about the industry and markets in which American Campus operates, management's beliefs, and assumptions made by management. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict.